Join David Bezar and Bret Elam on the newest episode of the Roadmap to Retirement podcast episode 200 – Stock Market Volatility as they discuss essential retirement planning strategies on the Roadmap to Retirement podcast. In this episode, they delve into the impact of stock market volatility on retirement savings and the importance of diversification in managing risk. Gain insights on reassessing your risk tolerance and aligning your investment strategy with your financial goals. Don’t miss this valuable advice to secure your financial future.
This program is paid for by JAKIB Media Partners. All opinions or statements expressed on this program are solely those of JAKIB Media or its guests and do not reflect the views of WPHT or Audacy. Today’s program is pre-recorded Welcome to Roadmap to Retirement, the Radio Show with David Bezar, Karen Bezar, and Bret Elam from Thrive Financial Services who have been featured on Fox, ABC, NBC, the Wall Street Journal, and more. Saving for retirement is a great start. But it’s what you do with this money that really matters. What’s your strategy to reduce taxes, generate income in retirement, reduce your risk, and get even more from Social Security? This is where you can count on straightforward and objective advice about how you can make your money go a lot further in retirement. Roadmap to Retirement, The Radio Show. Now here are your hosts David, Karen, and Bret along with Joe Krause.
Joe Krause 00:52
Welcome everyone to another edition of roadmap to retirement to radio show along with David Bezar, Karen Bezar, and Bret Elam. Karen is off today. I wonder if you’re walking along the boards down the Jersey Shore or perhaps listening to this program. While you’re strolling on the beach. I wonder what you’re asking yourself about the $39 billion forgiven for the 800,000 800,000 student loan borrowers that was announced on Friday, David, it’s just one punch after another. But all of these decisions, and all of these actions create questions of uncertainty. For us, for us on the road to retirement.
David Bezar 01:38
Yeah, Joe, listen, there’s tons of information that comes out during the week that turns people their head goes swivels to the left, it swivels to the right, they really don’t know which way to be looking to find out, you know, what’s the next path for me? So we could find any kind of headline like that during the week that just kind of sets people you know, a float, what do I do? Today? Well, we’re going to talk about is investing mistakes and things of that sort, we’ve changed up a little bit in our formatting, because we really want to try to connect with our audience to make sure they understand, you know, this idea of getting them aware, providing the education, all that good stuff. So you know, lots of questions that come up, when people come in for their complimentary consultation visit with us. We orient around, how do I invest? Like, am I properly invested right now? Am I taking too much risk, I’m taking too little risk. Having some portion of your retirement nest egg investing in the stock market might be one of the best ways to pursue long term retirement goals. Historically, it’s actually provided, you know, much higher returns compared to other investments. But to reap these potential returns, Joe, we’ve got to accept that the stock market can be unpredictable, and sometimes pretty darn bumpy. It’s a matter of fact, right? You hear the CPI comes out and the market goes through the roof. And then it settles out a little bit. And then some other news comes out and we’re down. We’ve been going up, up up and up for a little while here. Now, we can’t fall into that sense of security, false sense of security that all the market does is go up. Historically, it’s going up dramatically. But when you’re in retirement, it’s a whole different show. So Bret’s gonna talk a little bit about that as well right now.
Bret Elam 03:27
So if you’ve been diligently saving for retirement, again, as David said, it’s highly likely that a portion of your funds are invested in the market. But you might be wondering whether your investment portfolio is riskier than it should be and requires any of those adjustments. And that’s where we, as a financial advisory firm, can help and provide some of that assistance. So we’re here to help and answer your questions, provide any guidance and especially tailored to your unique situation. So give us a call at 215-798-9088. Again, 215-798-9088 to schedule that complimentary consultation.
Joe Krause 04:05
My son sent me a little graphic, texted me a graphic the other day. And then I ultimately saw the story on Twitter in the graphic where it was a graphic financial graphic and the headline was, you’re always going to make a lot more money in the bull market than you are in the bear market.
David Bezar 04:22
Somebody who’s a genius.
Joe Krause 04:26
That’s what made me think that LoL is a false sense of security. Exactly.
David Bezar 04:31
Yeah. And also we experienced because, you know, we meet with hundreds of people on a monthly basis, the exact opposite, right? I mean, there are people that would prefer to altogether avoid investing in the stock market because of the fear of losing that money. So you might be thinking if you’re listening right now with interest rates going up and everything else, why not just put everything in, you know, investment options like treasury bills or FDIC insured accounts. Well, here’s the problem. The problem is that while these options are much less risky, they don’t prevent a protect us from that other thing that we’re constantly talking about on the show called inflation. And I said last week on the show, Joe, like people keep in from the media perspective, hey, we’re ticking down. We’re ticking down. We’re ticking down. Well, two things. One, yes, maybe we are a little bit in certain areas. But then when you look at it from a segment perspective, like food costs, restaurant travel, the things that consumers do, are still way way high, and inflation is a problem. So that’s where having some investments can really be important. Important having it in the stock market, it’s important to develop an investment strategy that aligns with your risk tolerance. And unfortunately, a lot of people don’t know what that risk tolerance is. So today, we’re going to discuss this topic, our primary focus is helping you towards your retirement objectives. If you’re interested in having number one, the education, and then maybe somebody assisting you with the process, you can call us at 215-798-9088 and set up either a 15 minute discovery call, or come in for a full blown consultation. And we’ll go through this process with you.
Joe Krause 06:14
I have always you’ve heard, you can go back and listen to one of the many, many shows that we’ve done, I have always supported and emphasize to our listeners, that it’s the best complimentary education you’re going to get and that awareness, and that understanding is going to certainly help you better navigate what’s in front of you or have an answer when or an understanding when a question comes up.
Bret Elam 06:41
You said it that word awareness again, conversations that need to be had that you didn’t know that needed to be had by asking a series of questions that you didn’t know that needed to be asked. So, Joe, as you said, it’s, again, it’s that need for that comprehensive retirement plan. And again, as we look ahead, one thing that becomes increasingly clear, is the stock market may be even more volatile in the future than it’s been in the past and why you might ask, and I just look at how fast information travels today versus 10, 20 years ago. Again, if you take a consider, take a moment to consider the world we live in today. It’s more connected than ever before, again, thinking about everything that happened in China and Ukraine and just politics again, gone are the days when our economy and government actions were the primary factors impacting what I’ll call is our financial well being. Again, in today’s interconnected world, you have events unfolding across the globe on a daily basis that can have that significant impact on our own portfolios and retirement plans. Again, how do we control what we can control, you might have a political decision in a faraway country, an unexpected economic shift in markets, you got natural disasters that happen all over the place. Again, these are just a couple of the events, and examples of how that ripple effects a global of how these global events can reach a call at our doorsteps with greater intensity than they ever have before.
David Bezar 08:04
Yeah, so what does that mean for us investors? Well, what it means is that if the markets become more volatile, it becomes even more important to avoid some of these common mistakes that people will inevitably end up dealing with, you know, the ups and the downs in the market. So throughout the rest of the show, Joe, what we’re going to do is we’re going to dive in, we’re going to explore the common mistakes, mistakes to avoid when you’re dealing with the stock market volatility. Too much exposure to the stock market, what we’re going to talk about in the next segment.
Joe Krause 08:36
All right, good stuff and a good roundtable conversation today with David Bezar and Bret Elam again. Karen is off today you’re listening to Roadmap to Retirement, the radio show as we go into our first commercial break, learn about some critical tax planning strategies and get registered for one of the upcoming three workshops. Go to thrivefinancialservices.com. That’s how you’ll get registered. They continue to be at a sellout capacity, meaning there’s no cost to attend. But the room and the capacity of the room can only hold so many and can only take so many people and they are well. Well, well worth your time. As I’ve always said you will be much more educated when you leave than before you arrive back in a moment. As we return to this edition of roadmap to retirement, the radio show if you heard one of those upcoming workshops, and you would like to get registered two ways go to thrive financial services.com Or you can call the office at 215-798-9088 critical tax planning strategies for your retirement is the headline for the workshops today on the show. Too much exposure to David in the stock market. What does it mean? I don’t think of us as listeners or Bret. I don’t think of us as listeners actually know how to define that.
Bret Elam 10:04
That’s, uh, I mean, and today’s show is talking about common mistakes to avoid when dealing with stock market volatility. And you said, the number one thing, jumping right into it is too much exposure to the stock market. So, you know, one mistake that retirees make is having too much of their savings allocated towards stocks, again, it can be quite risky, especially when the market takes a downturn. That’s why it’s important to consider a balanced approach to invest in again, it’s so important that word balanced that’s out there. Again, by diversifying your portfolio, including a mix of different asset classes, you can help mitigate the risk associated with a heavy reliance on stocks. But here’s the thing. Again, you don’t want to have more money at stake in the stock market than you can afford to lose. It’s like, again, putting all your eggs in one basket. We’ve heard that for years. So it’s important to consider, again, spreading your investments across different asset classes to help you reduce the impact, again, of having all your eggs in one basket and being exposed to just simply one single investments performance.
David Bezar 11:10
Yeah, and we have some new nuances in the equation, much higher interest rates than we’ve seen over the past 15 years. Finally, right. So now what’s starting to happen is cash or a cash equivalent is coming back into the mix. People aren’t sure what to do when you hear Bret talk about assets, right? How are they allocated? For years, it’s been, you know, stocks bonds. And that’s been pretty much right. There’s many more different asset classes for good proper diversification that people should think about. But today, it’s it might be easier due to that fact that interest rates have been on the rise. I mean, this means there are many more opportunities to explore financial instruments that offer potentially higher returns, without, you know, the tied to the ups and downs of the stock market. So by considering a balanced portfolio, that includes a mix of investments, and being open to exploring these alternatives to traditional stocks, you can actually strive to pursue a more desired return. But the real important aspect, also managing the impact of the stock market volatility on your retirement savings. So one of the big things is, like you said about that, that graphic that people beat their chests, you know about how well their portfolio, their 401(k) is when the markets go up. But you can’t forget right? There are cycles in the market that happen every 12 to 15 years, we see really significant declines. We haven’t seen that other than the pandemic. And that whipsaw back to where we’re at today is unprecedented. Like you can’t, that’s one of those black swan type events. So you have to make sure you’re thinking about a balanced approach, right? Too much of one thing we always have heard the old cliche, ain’t that good for you. So remember, one of the keys is finding the right balance that aligns with the risk tolerance, and ultimately, your financial goals.
Bret Elam 13:17
Everyone’s always talking about their winners when no one ever tells you about their losers. And when that happens. And as David said, it’s finding that right mix that right balance, and talking about neglecting the next mistake talk about neglecting to reassess risk tolerance, retirement, this is a big one for me just again, as you retire, the new normal now begins. So in talking about that it’s important to align your investment strategy with your personal risk tolerance to avoid unnecessary and we talk about this all the time, that stress, again, you want to be thinking about the ups and downs of the markets. As you’re in retirement, you want to be thinking about how do I spend time in the community spending time with a family? Where am I traveling? Next, I want to stay healthy. And again, you want to know how do we avoid those potential financial setbacks. But here’s the thing to keep in mind. We’ll think about this. Again, when the stock market’s thriving, it’s easy to believe I can I can handle any kind of a tolerance that’s out there. But let’s think back in recent memory, remember turbulent times like the Great Recession of Oh 809, or maybe those couple months during the COVID pandemic where the markets just went straight down. Remember that feeling that you had, when you saw that 401k statement? Again, in a way down you saw 10 then 20, then 3040. And again, the market went down 53%. And then inevitably, with COVID went down 35% in one month. You remember how you felt when you saw your investments going down like that?
David Bezar 14:48
Yeah, and here’s the other thing that I think people I think the point that Bret’s making is critical is people get stuck in that old physics rule right a body at rest. tends to stay at rest, a body in motion tends to stay in motion, what you were doing from a risk tolerance from an asset allocation balancing during your working years, is, it should be different than what you do in your retirement years. And unfortunately, either the work of a financial advisor or somebody who’s kind of a DIY er and managing the money themselves, they forget to get to that stage, where it’s now time to look at that risk. Because here’s the deal, right? In the early years while and I tell people this in the seminar, while you’re working, you can actually afford to make money, some mistakes in your investment choices. Because what you have is you’ve got the luxury of time. So if you’re in your 20s, your 30s, even your early 40s. And maybe, you know, you’ve made a few mistakes, or whatever else, you’ve got another 20 years, 15, 20 years to recover, and make up for those losses. And markets that have declines. When markets declined during your accumulation years, your working years. That’s a good thing, right? Because every week out of your paycheck or, you know, a distribution from your business, you’re putting it in the market, sometimes you’re buying high, sometimes you’re buying lower, and they end up ends up giving you a good average price on those shares that you’re buying, whether it’s bonds, or you know, stocks, equities, things of that sort. But in the retirement years when you have to start taking distributions, and now, right you whether it’s through a required minimum distribution, or you need this money to supplement Social Security, if you don’t have a pension to meet your expenses. Now you’re taking shares out of the market at a decline to rate right. And at the same time as the markets rebound, which they always do. You don’t have any, you don’t have as many shares that are in there during that recovery phase. So it’s harder to outpace the decline than the returns. Does that make sense?
Joe Krause 17:10
Sure. Yeah, no, it makes sense. And I’m trying to, you know, theater, the mind, we’re doing a radio show theater, the mind, I’m trying to visualize, you know, extracting or taking, withdrawing that money, as you said, to just subsidize my everyday life. And then what that means the effect of that, because the dollars are out, I mean, that’s what we’re dealing with, and it’s something that’s that’s the real life, we are not working, yet, we’re not working?
David Bezar 17:38
Well, here’s an easy way to really visualize it during your accumulation. When market declines occur in your portfolio, your 401(k) statement goes down. It’s a paper loss. That’s all it is, is a paper loss, because you’re not using the money out to write when you’re in your retirement phase, and you’re now withdrawing money out if those market declines are occurring. Those are real losses and do right, those are real losses. I was on the phone. This week, we had a prospective client come in a couple of weeks ago. And they work at a great company and they have a pension, well, they actually have a profit sharing program for their retirement, this is their only retirement savings, as far as his work, you know, at this firm for a very long time. And again, that body at rest tends to stay at a rest type mindset. So when we were going through the statements, they get one statement a year, and what it shows is the company’s profit distribution to the employee, and then the market performance of where that money is invested. And as you go back, up until the past two or three years, there’s been a really nice contribution made by the employer, somewhere around 25 to $35,000. So that’s a great return, right? And then the rest of the money sits in a performance bucket. And when we looked through it, it was pretty, you know, it was like it looked like an EKG was going up. It’s going down, it’s going last year, they did have a toenail. And what happens you kind of get lulled into, and I’ll tell you a real quick story. What’s interesting about this conversation is I talked to the trustee of the profit sharing program. The prospective client gave me permission to have a conversation with the trustee of the plan. And I will tell you about a wonderful person very smart and almost evangelistic because this prospective client and his wife are getting very concerned about the performance of the investment side even though they got like a $27,000 contribution from the employer. The investment account last year was down at $1,000. Right well Want about $750,000? Total?
Bret Elam 20:02
That’s a big deal.
David Bezar 20:04
That’s a big deal, right. But the trustee when I was talking to her was so evangelistic about the program, because our prospective client is thinking about moving that money into an IRA account, and having a much more diverse, diversified way to, to invest it. She was just like, I don’t think it’s, you know, kind of from their perspective, not a good idea. So we just, again, that awareness and education is really, really important. Trustees are just thinking about the investments are not thinking about, are they a 30 year old or 60 year old? That’s invest everybody the same? So, Nick, collecting needs to reassess spots? Yeah, yeah. So these are experiences we deal with Joe on a daily basis, we’d love to offer that to people who are in our listening audience, you can do that very simply, by giving us a call to 215-798-9088. schedule that consultation. Or if you just want to talk for 15 minutes on the phone, we could do that as well.
Joe Krause 21:03
Well, it’s a really good example of every individual, as an individual set of circumstances is unique and applicable. Which is why you need a good roadmap. Roadmap to Retirement the radio show, we’ll get to a commercial break. Back on the other side with Bret and David –
This program is paid for by JAKIB Media Partners.
Joe Krause 21:28
And back here on Roadmap to Retirement, the radio show. Shout out to all of our listeners tuning in and being a part of this roadmap to retirement, we will continue to educate all of our listeners to number for Thrive as to 215-798-9088. That’s 215-798-9088. You know, Bret, as we were sitting in the break, I couldn’t help but thinking about that statement of every one is unique and individual it is so true. That last example was really spot on because their circumstances created a tremendous amount of conversation from what results they were receiving, they might not apply to one of the listeners. But there’s a lesson there.
Bret Elam 22:15
Life changes lifestyle namics, yeah, prepared to make those chips as well, no doubt. And again, we’re emotional beings not always rational, which is the next mistake of seeing what people make all the time are chasing higher returns, I just had somebody into our Fort Washington office, here, Montgomery County, and they’re just talking about, Hey, are we maybe a little bit more conservative than we should be like the stock market’s been up here today. And I looked at him, I said, yeah, the S&P is up here to date. But you understand that between Apple, Amazon, Google, Facebook, Microsoft, and the Vidya and Tesla, those seven stocks right now, if they were out of the S&P 500, the S&P would actually be down today. And then you look at their eyes, and they’re like, oh, and that’s it. And again, it’s that rational versus being emotional. So again, the next common mistake that retirees need to be worried about is the temptation to chase those higher returns. Again, it’s easy to fall into this trap, where some retirees seek investments that promise exceptionally high returns, without considering the associated risk. However, it’s important to remember that not all investments offering higher returns are suitable for financial goals and risk profile, especially when we talk about retirement. And again, here’s the thing chasing those chasing after those high return investments can lead to and we see it all the time, unfortunately, to those potential scams getting ripped off again, you seen those commercials on TV, take all your money out of your IRA, go put it in a gold go put it in silver, I mean, there’s so much out there, again, you may come across an investment promoter claiming to have some triple secret method of how to double or triple returns without any risk. The good old adage, if it sounds too good to be true, it probably is going to be false. So again, those types of offers often turn into something nothing more than empty promises.
David Bezar 24:15
Yeah. And that always becomes rampid. You know, and it’s interesting, when a TV perspective, what stations they play those on, right, you know, they know their audience, and then depending on what station, you know, if they lean right, or they lean left, and it’s really pretty amazing. And unfortunately, it really does. People always think the grass is greener on the other side, right? Why don’t we have this in our portfolio? They’re asking that question. Here’s the good thing. We have the answer. We have the answer, why you have it in your portfolio, or why you don’t have it in your portfolio.
Joe Krause 24:51
And as either way, if there’s not an answer to that question, then you gotta you gotta forget that question.
David Bezar 24:56
No doubt. You know, one of the things that I really make sure of and I disclose this when, you know, a new client comes on board with us. I tell people, you’re never gonna brag about us about the high rates of return that we get you at a cocktail party. Like we’re not shooting for the stars. What we want to make sure I heard Bret say this years ago, is we want to teach people the swan methodology of investing, especially when you’re in retirement. And Swan stands for sleep well, at night. Right, sleep well, at night, I think. And I have a slide in one of my presentations, where I said, Look, you know, we do 100 of these educational workshops on an annual basis. We do webinars, we do lunch and learn. We do all kinds of public events, right? Because we want to create that awareness. We started doing this, how long do think Bret?
Bret Elam 26:00
June of 2015.
David Bezar 26:03
So that’s, you’re good with math? Eight years, eight years. Wow, that means all combined, we’ve probably given 1200 to 1500 of these presentations. And we collect data, like we have people fill out a survey afterwards. You know, why did you show up tonight? What did you like about what you heard all these things? And then we ask, What do you want? In a return? Like, what’s the picture for you in retirement? And there’s about seven different things, right peace of mind, good quality health, spend time with family travel, there’s seven things there that are very common amongst everybody. So I tell people, you can go like what Brightstar, you can chase high rates of return, but the risk involved with that may actually derail those seven things that you want. Because losses sometimes could be 10s of 1000s, if not hundreds of 1000s of dollars. And if you’ve got about a million dollars saved, that could be very impactful and how long that money will last in retirement. So even when the investment itself is legitimate, let’s say like a corporate bond, offering a significantly higher interest rate compared to other bonds, you still need to be cautious, right? You got to ask yourself, why is that rate so high, there could be underlying reasons behind it such as, you know, like the issuing companies facing severe financial problems, the likelihood that that Bond could potentially default, that company has to offer a higher rate of return to get that term. So stay informed to exercise your due diligence, be cautious when any investment opportunity, that just seems too good to be true.
Bret Elam 27:46
Because it rolls into the very next mistake, which is exactly what we’re talking about is taking on more risk than needed to meet your objectives. Again, another risk that some retirees make, again, is taken on more than what is absolutely necessary. Now I understand that those who have struggled or trying to make up for lost time, again, growing their savings is important. But it might even force you to take on more risks than inevitably you are comfortable with.
David Bezar 28:16
Yeah, and you have to consider a different scenario as well, right? There are individuals who have accumulated more than money to meet all the needs in retirement, like, the closer you might be to fitting in with that category, the more important it becomes to make sure you aren’t taking on risk that isn’t really necessary. Let me try to illustrate that. Let’s consider a hypothetical example. Imagine a 90 year old lady with $6 million in retirement assets. Based on her current and future project expenses. Along with her desired lifestyle, it is highly unlikely that she would ever run out of money during her lifetime. And this remains true even if her 6 million never experiences any growth whatsoever. Now, in a situation like this, we have to ask ourselves, why take any risk at all? Well, if she has an investment portfolio exposed to the ups and downs of the market in hopes of generating additional growth, the question begs to be asked, What is she trying to accomplish? Is her goal to make her heirs rich? Like we want to figure that stuff out to be able to design the appropriate risk profile?
Bret Elam 29:29
Yeah, and again, that’s one of the keys here is to be clear about what you are trying to achieve with your money and to not risk any more than you absolutely need to to a chump accomplish those objectives. Again, it’s about aligning your investment strategy with your financial goals and perhaps an even more conservative approach when it is appropriate. So again, it’s important to do that reassessment not only while you’re entering retirement, but constantly updating and looking at those. So again, give us a call Today at 215-798-9088, again 215-798-9088 and schedule a session to sit down with us to, to let’s take a look at your risk tolerance and make sure everything’s in alignment.
Joe Krause 30:13
Man if you’ve never attended one of the educational workshops, as David mentioned, 1500 or whatever that number is, if you’ve never done that, I suggest that you consider that will tell you in this commercial break about three upcoming workshops, you can go to thrive financial services.com to get registered back in a moment. Here are three opportunities to learn critical tax planning strategies for your retirement: get registered for July 18 at the Spring Mill Country Club, and then two opportunities on July 20, at the William Penn Inn and at the Kimberton Inn, that’s July 18. At the Spring Mill Country Club, July 20, at the William Penn Inn or the Kimberton Inn. Get registered, go to thrivefinancialservices.com. And back here on Roadmap to Retirement, the radio show, thank you so much for tuning in, again, the number to call Thrive Financial Services is 215-798-9088. As always, Bret, we hope that during this 60 minutes, we hope that we’ve reached somebody in our listening audience, perhaps created through an example, a thought process for them that will trigger of call to meet up with the greatest financial retirement company, I think in the world appreciate. And that’s not based on anything other than what I’ve experienced in my history with Thrive Financial Services, and all of your clients who have shared such great success with me.
Bret Elam 31:46
That’s a and again, it’s what we tried to bring on the show as awareness and what’s awareness again, conversations that need to be had that you don’t know that need to be heard by asking a series of questions that you didn’t even know that needed to be asked again, that’s why we try to share some stories. And I’m sure we’ll have some more to share during this last segment here. But again, this will be the fifth mistake that we’ll talk about. On today’s show. And again, we’re going to call this one wrong plan. Wrong advisor again, the final mistake we will discuss actually has a connection to many of the other mistakes, again, that we’ve already mentioned. It’s not having that comprehensive financial plan in place or relying on the wrong adviser to develop that plan. Having a financial plan is important because it gives you that clear understanding, it gives you that peace of mind. Again, it’s that clear understanding of your future income needs and how much your savings must grow again to meet your unique needs.
David Bezar 32:47
Yeah, Joe. Here’s the other thing too, as I hear Bret say that there is definitively a difference between a plan and a portfolio design. A plan is all encompassing. It takes a look at all the puzzle pieces that you need to know about to have a plan to navigate retirement successfully. See, I you know, I got asked a question in an interview recently. The question was, you know, what kind of differentiates thrive from other financial planning firms. And when Bret and I decided to form the company, we both had long standing careers at that particular point, and had the luxury of designing our business, you know, kind of late in the game, so to say. So we’ve seen a lot of what not to do, or what we didn’t like about the industry. And if we could start from scratch here is the ideal way to build it. And that’s what we were able to do. So I said to this person who was interviewing me, I said, you know, a lot of the people that we meet, probably 90 plus percent of the people that we end up having become clients of ours, had a previous financial advisor, and sometimes a very long standing relationship 2025. And they really liked become friends. And they’re, you know, it’s a good relationship. But what they recognize, and this is kind of the analogy is that advisor who did a great job, getting them to retirement, did not have the knowledge base or the skill set to make sure that there was a guide plan in place to take care of all those other aspects of retirement. When they had a question about taxes, well, we should go talk to your accountant about that. They had a question about Medicare or Social Security, we should call the Social Security office. That’s not what people want. What people want is the answer. They don’t want to have to, you know, sit on the phone with Social Security for an hour and a half to get somebody to say, well, I can’t answer that for you have to make that decision. Right. And the account and then nothing. Look, we have accounts right and we have CPAs on staff. They’re fantastic, but their job is really kind of looking at history. trickle information, remember your mirror, right a rear view approach, and then telling you what’s the consequence of that. That’s not forward tax planning. And that’s also not something that traditional financial advisors do, right? They get paid to write they, they talk about what they get paid to do, which is primarily investment management. So I tell people, they’re kind of like a starting pitcher in Major League Baseball, and you’re a big sports fan, Joe. So what’s a good major league pitcher, how far they get you in a game.
Joe Krause 35:33
Not 103 205 pitch can’t read the next time you go to the Phillies, you’ll see five hours going out in the fifth.
David Bezar 35:41
So fifth or sixth inning, right, and then the GM is pointing to the bullpen, and when they go to the bullpen, they’re looking for a specific specialist, right, because they know the next batters coming up and everything else. That’s what we decided to be is we wanted to be the specialists, not the generalist. And it takes a different set of knowledge base and skill sets to help people navigate to that next step. So a plan, a true plan is a big deal.
Joe Krause 36:09
And I think, as you say that, I think when we get to the point of where we all are in retirement on the doorstep of retirement, the specialist Bret is what we need.
Bret Elam 36:22
Yeah. And just hearing it, what David said. And again, I went, I went through a training program. And what David described was exactly what we were told to tell people. And it’s that frustration inevitably led the two of us to know that there’s got to be a better way, which is why Thrive was created. So again, the bottom line is that you need the right kind of financial plan for retirement one that encompasses that broader range of considerations beyond just that portfolio growth, which is what we hear over and over and over again, again, you’re planning to take into account factors like your income needs, tax implications, what happens when the first one of us passes away? What happens if one of us gets sick? How do we make sure things like Medicare surcharges? Again, there’s so much that goes into a comprehensive retirement plan, you can’t just be worrying about investment performance, it’s only one aspect of the wheel of financial planning, you had so many people just try to lump the two of them together where again, investment management is part of financial planning. Financial Planning is not investment management reminds me of a couple that I sat down with two months ago up in our Yardley office up in Bucks County, where they were, quote unquote, on the track to retirement had been working with somebody for a while they were six months away from retirement when they came into one of our educational workshops at the Washington Crossing Inn. And they wanted to schedule a complimentary session to get that second opinion. And we came in, when they came in, and we sat down. And we went through just what their existing plan was, they were in a fortunate position where they were going to have a pension and what their roadmap was, was, let’s turn on Social Security as quick as possible that with our pension, we’re able to satisfy our needs. Now, in addition to that, they had approximately $1.8 million in their 401(k) or IRA, and their adviser says burn good shape, you’re going to be very tax efficient until you hit your required minimum distribution age, which is now age 73 years old. And so we look at him, we said, that’s one way you can do it. But if you taken into account, do you need to be this risky? Because the idea was just continue with the way that things were? And the answer was no. They didn’t need to be that risky, in fact that their risk tolerance over the last couple years had actually declined. But yet their advisor just said, Just hang in there. There’s no reason to change that risk tolerance. That was that was the first step, the second step. And we that we brought to our attention because it came to a tax workshop was the worst thing that you could do, again, as being from the biggest nation in the world, procrastination and do nothing until age 73. So when we talked about the importance of that comprehensive financial plan, we gave them a roadmap to become tax free. Again, not in year one, it takes a couple years to transition to that time period. But again, it’s easy to to look at today. But sometimes it’s difficult to look through the light through the force at the end of the day. And that’s what we help people do. How through a comprehensive retirement plan when you’re just chasing returns. All you’re worried about is what’s my performance, what’s my performance, what’s my performance, but we’re in that quote unquote, last phase of life and we’re worried about when’s the first person gonna pass away what happens when one of us gets sick? What happens when the tax rates change in 2026? These are some of the conversations that need to be had. And that’s the awareness that we pride ourselves here. Delaware Valley, again, Pennsylvania, New Jersey, Delaware, again, this greater Delaware Valley. It’s it’s, it’s what we get up for it. And not only do our clients, we want them to have the swamp theory of investing, but it’s what we pride ourselves here, David, and I’m building our disciple of advisors that we all sleep well at night as well, knowing that we’re given an IRR and given people, everything that they need to pull it together, of why they need to have that comprehensive retirement plan. Because what happened, we pulled that story together, once we put them on track, to be that much more tax efficient, giving them that peace of mind and security inevitably, that they deserve.
David Bezar 40:37
I don’t want to miss that point, but didn’t necessarily conclude that story, right? You take somebody you said how much 1.6 Millions 1818 in an IRA account, they were going to turn on to Social Security checks and a pension check. And that was going to cover their base need for the rest of their lives. So now that you’ve got this ticking tax box, right, the longer you let that IRA 401(k). Sit, potentially, it’s gonna get bigger and bigger and bigger, which means a much bigger RMD required minimum distribution, which now is going to be their third source of taxable income, not even needed, right? Don’t even need that money. It’s gonna go on top of the Social Security’s gonna go, like people lose sight of these ideas about Roth conversions, because we’ve been trained, defer, defer, defer. So Bret put them on a plan to start now, not age 73. Start now doing your Roth conversions strategically, so that by the time you turn age 73, your IRA has been converted to a Roth. And Joe, when you take money out of a Roth account, it’s tax free X ray, and here’s even the better part they’re probably never going to touch that money because Social Security never and pension cover their monthly expenses. That money if it’s in a Roth compared to a traditional IRA account, is now 100% gonna go to their beneficiaries tax free.
Joe Krause 42:00
Well, there is no RMD on a Roth, right? Dumb question, but I just want to make sure people get that.
Bret Elam 42:08
Yes. So again, at Thrive Financial Services, we focus on helping individuals like you develop a comprehensive develop comprehensive financial plans that help set the stage for what that enjoyable retirement. Again, our experienced team of financial planners understands the intricacies of retirement planning and can provide the guidance and knowledge you need to create a customized plan that aligns with your unique goals and circumstances. So don’t hesitate and reach out to us today. for a complimentary consultation. Call us right now at 215-798-9088. That number again is 215-798-9088. We’re here to help you work towards your financial goals and most importantly, so that you can be confident in your retirement one.
Joe Krause 42:57
Last reminder before we say goodbye today, if you would like to get registered for one of the upcoming workshops, go to thrive financial services.com sign up, get educated, get good, get registered, and get educated. That’s going to do it for this edition of Roadmap to Retirement, the radio show on behalf of Karen Bezar, who was off this weekend. And of course on behalf of David Bezar, and Bret Elam and all of our listeners today. I’m Joe Krause. See you next time everybody.
Thanks for listening to Roadmap to Retirement, the Radio Show from Thrive Financial Services. If you’re like most Americans, you have more questions than you do answer about what to do with your retirement savings. If you have a question about your IRA or your 401k pension or other tax-deferred accounts, if you have a question about reducing taxes, generating income or filing for Social Security, whatever it is, David, Karen, and Bret are here to help and often your questions can be answered in a simple phone call, call 215-798-9088. And so you know no statements made during Roadmap to Retirement, the Radio Show shall constitute tax legal or accounting advice you should consult your own legal or tax professional on any such matters. information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investment or investment strategies investments involve risk and unless otherwise stated or not. Guaranteed Be sure to first consult with a qualified financial adviser and or tax professional before implementing any strategy discussed here David Bezar, Bret Elam, and Karen Bezar from Thrive Financial Services and Thrive Capital Management are licensed to offer investment advisory services through Thrive Capital Management LLC and SEC-registered investment advisory firm office headquarters located in Fort Washington and offices of convenience used exclusively for client meetings in Exton, Yardley, and Cherry Hill. Roadmap to Retirement, the Radio Show was a paid commercial announcement from JAKIB Media Partners. If you’d like to learn more about the power of the Radio Hour contact Joe Krause at 267-261-3428. Today’s program has been pre-recorded.