Speaker 1:
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:
Do you know the number one thing that scares people about retirement? It’s probably not what you think it is. It’s not being bored or even dying. According to research from MarketWatch, the number one thing people fear the most is running out of money in retirement. It’s being 80 years old, full of life and flat broke. Nobody wants to be in that position. Good morning, everyone. Welcome to Roadmap to Retirement, The Radio Show, as we come to you here on Talk Radio 1210 WPHT, your advocates, Thrive Financial Services, along with David Bezar, Karen Bezar and Bret ELAM. David, I say good morning to you. Welcome in. Got a great show lined up, again for the listening audience.

David Bezar:
Good morning, Joe, and happy weekend to you. Man, that opening really sets a tone. This is going to be a great show. Because what we find a lot of times is, there’s tons of people out there, they’re very concerned about their future, and could you run out or your money run out before you do? But then there’s again, a lot of people who think they’re bulletproof, but haven’t taken all the things to consider whether they really are, and that retirement as secure as they think it is. Look, you want to avoid going broke in retirement, no matter what you can do. Probably, one of the worst things that can happen, Joe, just like you described there.

David Bezar:
What you need in retirement is income that you can depend on every single month, just like clockwork, and you need it to be coming from different sources. That’s the challenge, that’s never been easy. And this pandemic that we’ve had and are still in, has even made it way worse, right? I mean, interest rates on CDs and savings accounts are next to zero. Investing in the stock market now comes with a much bigger risk. We really have no idea is the economy connected? Is it not connected? Is this is just a kind of run up with the balloon will pop. And then with these trillions of dollars in stimulus, it really… We are listening to the DNC this past week, and we never make any political statements, but we’ve all here at Thrive have been studying the proposals and things of that sort. I really hope our audience knows that you’ve really got to be planning for taxes to go up.

David Bezar:
So, coming up on today’s show, we’re going to go through five surprising income strategies. I don’t know if we’ll get to all five, but we’ll go through it. But we’ve got five income strategies that could help you avoid going broke in retirement. These include the fastest and safest way to increase your income and retirement right now. A contrarian strategy that could help you get more income from Social Security. Plus a strategy to make your money last, even if you live beyond age 100, which we keep hearing more and more about people becoming centurions. So, Bret Is going to kick it off right now, talking about some of the ways. And surprise, surprise, surprise, Bret, what is one of the first ways?

Bret Elam:
Fastest and safest way to increase your income, reducing taxes.

Joe Krause:
I knew that answer.

Bret Elam:
It’s not that up and down, the uncertainty of the markets, it’s taxes, taxes, taxes. It’s a certainty. David, just said it. With everything that just rolled out this week, and again, this week to come as well, taxes are not going down with all the proposals that are out there. And when we ask people, “How much have you saved for retirement?” They can tell us. But then at the followup question is, “How much are you going to keep?” Because of taxes. You get the shrugging of shoulders, and you know what? It’s dangerous. So, actually, before we started here this morning, we were talking about some of the statistics that are out there that Karen has got to share with us here. Sharon, Karen [inaudible 00:04:26].

Karen Bezar:
It’s okay. That’s all right.

Bret Elam:
It’s all good. But some of those statistics that are out there that are just staggering of just people not being aware.

Karen Bezar:
And one of the key words you said, Bret, when we were talking about this, is people are saving for retirement, but what they might not be doing is planning or planning strategically for retirement. And if you’re not considering the effects of taxes on your retirement nest egg, it can come back to haunt you in the end. And if you’re not strategically preparing or thinking about it, you actually might end up paying more money in taxes than you thought. So, if you have that million dollars saved for retirement, you actually might only have $750,000 saved for retirement. So, what we want you to remember is taxes really matter a lot. Don’t you find that David, with when we talk to people when they come in?

David Bezar:
Yeah, absolutely. And again, we don’t want to sound like a broken record here at Thrive. We talk a lot about taxes. And the reason that we do is for two things. Number one, again, like Bret said earlier, people tend to prepare taxes with their CPAs, accountants, enrolled agents, whatever it is, but they don’t plan for taxes. And with we knowing that taxes are going up, it’s a big done deal of accounts. I mean, really taxes matter a lot. Not all income is equal. I mean, where and how you hold your assets can actually mean the difference between being somewhat well off and obscenely rich. It really depends the tax bite based on where that money is stored.

David Bezar:
The most surprising and complex set of retirement rules that baby boomers must navigate is the maze of retirement taxes. I mean, we’ve seen it. The rule book is really, it’s 300 plus pages. There’s never been a reduction to it. It just keeps expanding and expanding and expanding. Things like, you could end up paying 50% penalties for underpayment of required minimum distributions. If taxes are going up, you got to know the difference between your marginal tax rate, your effective tax rate. You got to know how Social Security is taxed. You got to know about the required minimum distributions. You got to know about… I mean, there’s talk about capital gains, the limit is going away, and it becoming ordinary income. I mean, these are things that could really have devastating impact on people’s retirement.

Bret Elam:
And David said it, because most people just file and prepare their taxes with a CPA and an account. When you’re doing that, you’re just reporting history. Again, you got to look forward, not backwards. Again, tax planning, and the reason why it becomes so important, Karen’s going to share with us, taxes got to be going higher in the future. I mean, it’s realistic with everything that’s out there.

Karen Bezar:
Again, conventional wisdom when you’re saving in those 401k plans, when you’re working hard, and putting all your money away, conventional wisdom claims that you’re going to have lower taxes when you retire. But that might not necessarily be the case, and they could actually be higher than expected. According to CNBC, not me, not us, your marginal tax rate could just jump as high as 46% when the Trump tax cuts expire in 2025. So, I know it sounds crazy. But even if it doesn’t get that high, isn’t it better to be prepared for that, than be shocked and surprised by it and let your nest egg get eaten away.

Karen Bezar:
So, today what we’re talking about again is how to generate more income in retirement. And if you have an IRA or 401k, you might want to think of this as your money, but again, it’s not, it’s a joint account between you and Uncle Sam. Your retirement savings could end up being chiseled away. And unless you take advantage of some defensive tax planning strategies right now, you’re going to be surprised in retirement.

Karen Bezar:
So, here’s some good news we have. There are ways you can reduce your taxes in retirement accounts. And we want to show you what these are with a free customized retirement analysis. Our free analysis will show you the defensive tax planning strategies that could help you save tens of thousands, if not hundreds of thousands of dollars in your IRA, 401k pension, and other deferred retirement accounts. You might expect to pay for a customized analysis like this, but we’re going to cover 100% of the costs just for the listeners who call us today. So, give us a call, (215) 987-2430. Again, if you’re interested in paying a few taxes in retirement, give us a call, (215) 987-2430.

Joe Krause:
Thanks everyone for listening and tuning in to Roadmap to Retirement, The Radio Show. David, I’ll come to you real quick, before we go to the break. One way to lose 50% on your required minimum distribution is to forget to withdraw the money, right? It’s a 50% penalty.

David Bezar:
Yeah. And we still have people that we talk to that think it’s age 70 and a half, but because of some congressional laws that got put in December of 2019, they’ve extended it out to age 72. It’s just little things like that, Joe, that people aren’t necessarily up to speed on.

Joe Krause:
The show rolls on here on Talk Radio 1210 WPHT. USA Today is calling it a near perfect source of retirement income. Find out what it is when we come back.

Joe Krause:
Instead of thinking about how much money you’ve saved for retirement, it’s time to start thinking about how you’ll turn that money into income when you’re retired. Unfortunately, I think that’s easier said than done. Since the pandemic, generating income has become even more challenging. But without a successful strategy, it could be the fastest way to run out of your entire savings far too soon. We keep saying that back here on Roadmap to Retirement, The Radio Show on Talk Radio 1210 WPHT.

David Bezar:
This segment is going to be important. Okay. Now, we’ve talked about Social Security in the past. And I want to make sure you understand that it shouldn’t be a haphazard decision. A lot of people we know that over 50% of the people start their Social Security benefits as early as possible, because they think they have to. So, we’re going to talk about Social Security and make sure that you get every last nickel from Social Security, that’s rightfully yours.

Bret Elam:
And you guys said it, USA Today, they’ve referred it just recently. Social Security has been referred to as to near perfect source of retirement income. Give you the very first reason is because you don’t have to worry about the money running out during your lifetime. Again, you got four of us out there talking about, hey, Social Security, you could think of it like a tooth, a one and a half million dollar annuity. And it serves as the foundation of your overall retirement plan. We see about 60% to 67% of people’s retirement foundation is coming from Social Security. Why is Social Security so hard to replicate? Again, it’s indexed to inflation. So, it goes up each and every year. It’s guaranteed for as long as you live, and it’s not correlated, not related to the financial market.

Bret Elam:
So, if you made modest income, your benefits could be over six figures. If you’ve made above average income, could be a few hundred thousand dollars. And if you’ve made significant income, your Social Security benefits could be several hundred thousand dollars. And why is it so important? Because you’ve paid into it. You have and your employer, if you’re self employed 12.4%. But here’s the problem with Social Security, it’s tough to understand. They will talk about just some of the issues that are out there.

David Bezar:
Yeah. The problem comes from the fact that Social Security is a confusing program, and simple decisions can end up costing you hundreds of thousands of dollars. Like I said earlier, most Americans are taking their Social Security benefits at face value and they wind up leaving tens of thousands of dollars, if not hundreds of thousands of dollars on the table. And we study a lot of the research work that comes out, and Bloomberg actually said 96% of hardworking Americans citizens lose an average of $111,000 in Social Security benefits. And it’s all due to the critical timing mistakes.

David Bezar:
Karen and I were visiting with a couple yesterday. And I would say, I guess, the funny, the sad of it is they’ve been our clients for a while. And the husband said, “Okay, I’m getting ready to retire.” He’s 62 years old. And he’s like, “I’m just going to start Social Security.” And I was like, “Have you completely forgot everything we’ve talked about?” So, again, so here’s some of the value, right? Working with a fiduciary, working with somebody who’s really educated on all the moving puzzle pieces of retirement. I had to say, “Look, let’s think this through one more time. Let me show you the schematic of how we’re going to get this accomplished. You’re going to delay Social Security, because you’re going to get that guaranteed interest rate compounding on it. And we’re also going to improve your taxes by taking money strategically from other areas.”

David Bezar:
So, I just want you to remember how, and when you claim your benefits impacts a lot more than the amount of benefit check that you’ve received. You could unknowingly trigger an avalanche of taxes, double your Medicare premiums, and cause you to forfeit thousands of dollars in spousal benefits potential. Again, I can’t stress how many moving puzzle pieces there are to Social Security.

Karen Bezar:
Here’s another puzzle piece. Guess what Joe? You paid for your Social Security, came out of your paycheck all those years. And guess what? You have to pay taxes on your Social Security income. Can you believe that? So, some people know that, and some people don’t. And if you’re not aware of the tax, when you retire, it’s like, “What?” it’s the reaction that we get a lot of times, are like, “Are you kidding me? I paid my taxes on them, paying it again?”

Joe Krause:
Do I have to pay them when I get to Florida, when I’m living in Florida, do I have pay taxes?

Karen Bezar:
Yes again, we’ve been through this, Joe.

David Bezar:
Welcome to the United States.

Karen Bezar:
You’ve been through this Joe, it’s federal. And again, just to note, just an important point, it’s federal taxes. You could be paying taxes up to as much as 85% of your Social Security benefits. Again, most people don’t realize this. And without a strategy, when that tax bill hits, sometimes it’s too late to do anything about it.

Karen Bezar:
So, how much of your Social Security income is taxable? It depends on the amount of your Social Security benefits and all those other incomes that you’re going to start taking in retirement, pensions, required minimum distributions. And your benefits are included with other taxable income. And again, it’s something called provisional income, right, Bret? So, 85% of your Social Security could be tax 50% or zero. It all depends on the steps you take now to reduce your tax exposure in the future.

David Bezar:
That’s it, I mean, we have to thank our government for making the Social Security system so easy, that’s out there. And again, that’s my bad joke gang, but this is it. I mean, think about this. I want you to go pull out your tax return and I want you to go look at flying 5B and see if you have any of your Social Security income that is subject to taxation. Again, even if you’ve started it or not, what can you do if you’re subject to paying income taxes? Here’s one, a lot of times it’s required minimum distributions or IRAs that you’re pulling out, that’s making your Social Security taxable. Here’s a strategy. Again, we can talk about converting. Here’s that Roth IRA conversation. Why it’s Roth? Why is that dependent upon Social Security? Because if you do some planning upfront and it’s important, upfront. Again, before you start Social Security benefits, and just as important, is at least two years before Medicare, because you will trigger some additional expenses related to that, if your income goes too high. Again, a lot of puzzle pieces to navigate.

David Bezar:
And here’s the list for those of you that have a pen out, or you’re just going to listen. Here are seven Social Security mistakes that could cost you a fortune. Here’s number one, failing to make sure your earnings record is correct. We see about 15% to 20% of the time things are missing. You need to look at that. Here’s why, and we get some self employed people, maybe you’re under reporting your income, understand that’s going to affect your Social Security benefits long term. Working too few years. Remember your highest 35 years adjusted for inflation. We see this a lot, people wanting to retire early for whatever reason. But if you are retiring at the peak of your earning years, it’s definitely taken away from those Social Security benefits. We talk about this all the time.

David Bezar:
Number five, claiming benefits at the wrong time. What goes along with that is failing to explore all benefits available to you, widow, spousal, survivorship, divorcee. And with all those rules, not understanding all the rules before you act. And that’s why it’s important that we put all those puzzle pieces together.

David Bezar:
So, I said it, when I started the segment, have you made an average or an above average income throughout your career? If so, those traditional roles of Social Security just don’t apply, we just don’t simply delay to age of 70. It could end up costing you a fortune. You wonder why? Because we’re always thinking about our gross. We need to be thinking about net, net, what are taxes? What are Medicare? What’s that effect going to be on my overall check? And what we want to show you is how you can get more income out of Social Security with our customized tax analysis.

David Bezar:
Again, that analysis will show you how you can get more income out of Social Security, whether or not, and how it’s going to be effected by your taxes, your Medicare premiums, am I eligible for spousal benefits and more. It really gives you that defined roadmap. So, if you have not filed for Social Security and this segment made you pause and think and say, “There’s a lot to this, I need you to do me a favor.” Pick up the phone and give us a call right now at (215) 987-2430. Again, if you’re seriously interested in how you could get more money from Social Security, don’t wait, call us right now. Our staff is ready to answer the phone. You can call us at (215) 987-2430.

Joe Krause:
David, one of the things you referenced, 96% of hardworking Americans lose an average of $111,000 in Social Security benefits. That’s a big number.

David Bezar:
That’s a lot of money.

Joe Krause:
That’s a lot of money.

David Bezar:
It’s a big mistake.

Joe Krause:
111 grand, that’s a lot of money.

David Bezar:
Goes a long way.

Joe Krause:
Roadmap to Retirement, The radio Show, here on Talk Radio 1210 WPHT. Give them a call. It’s worth the education to get to speak with David Bezar, Karen Bezar, or Bret ELAM. We’ll get to a commercial break here on Talk Radio 1210 WPHP. Forbes calls it a stealthy tax. And it could leave you with far less income in retirement. We’ll tell you what it is when we come back.

Joe Krause:
Most people look at their savings as a gauge of if they’re ready to retire. And that’s probably a big mistake. Instead, you should shift your focus to how you’ll turn your savings into generating income for you in retirement. But generating income has never been easy. And the fallout from the pandemic will make it more challenging than ever. We cover that subject every week. Welcome back to on the Roadmap to Retirement, The Radio Show, on Talk Radio 1210 WPHT.

David Bezar:
I’m going to use air quotes for a second. I know our audience can’t really see it. But I’m going to call this a stealthy tax, right? A stealthy tax. Again, one of the things that has to be considered when you’re putting your retirement plan together, it’s a terrible little thing called inflation. So, don’t forget the negative impact of inflation it could have ultimately on your overall nest egg.

Karen Bezar:
Right. Negative impact. Remember inflation erodes your wealth. So, it is a case for 1%, 2% or even 3%. Now, it might not sound like a lot when you’re saying those numbers. And especially when you’re working and your salary is going up each year, it’s not a big deal. But if you add it up over 20 or 30 years, it could have a huge impact on your lifestyle and retirement. And that’s again, it’s that stealthy tax. It’s like a silent killer of your nest egg. And fixed income is especially, and remember, retirement you’re no longer working. They can get crushed by inflation. So, ignoring inflation could mean the difference between you enjoying everything that you’ve ever dreamed doing during your retirement, versus just getting by. And that’s not what you want your retirement to be, right? That’s your golden years. You want to enjoy yourself. And you have to take a look at the whole picture. And Bret, that’s something that we focus on when we are planning for our client’s retirement.

Bret Elam:
Yeah. It’s a stress test that people don’t really go through. You think about it, if you have 3% inflation, it means if you need $6,000 today, that’s $12,000 a month, 24 years from now. And again, we need to address it. I think of mom. She retired school teacher. She got her pension from 15 years ago, not one race. Karen said it, fixed incomes get crushed because they don’t move with inflation. Again, Wall Street Journal, get ready for the return of inflation. The fed’s actions with the printing, the quantity of money that they’ve put into the United States economy, it’s unavoidable. It’s happening at a blistering rate and it’s continuing.

Bret Elam:
Again, another one, the inflation dog may finally bark. And what we’re seeing right now, gold, annuities, inflation linked bonds. Again, there’s pouring of money into these solutions with the recent explosion of government spending and the Central Bank stimulus, that what we need during this pandemic.

Bret Elam:
So, what are some solutions? What are some of the ways that we can go ahead and diversify, can fight the inflation that’s out there? Here’s some things to think about. Number one, we got diversification. Here’s some things, do I have an extra room in my house? Maybe I’m going to go rent that out. Those are things called tips. We’ve been talking about inflation, linked bonds, annuities. They can absolutely fight off inflation because some of them will go up with their payouts every month, will go up with what inflation goes up with as well. You have stocks, ETFs, mutual funds. These are all ways, again, having diversification. I did not say put all our money in one bucket. And again, making the right Social Security strategy. Why is that important? And if you say, “Hey, you know what? Inflation is not going to be a big deal for me. When I retire, I’m only going to last a couple of years.” But here’s the problem, it’s talking about the four simple strategies to keep you from going broke. David, is going to talk about why we need to be concerned with inflation.

David Bezar:
Yeah. It’s called longevity risk. All right? So, I want to bring this topic up because it’s really critical for our audience. Longevity risk, the way inflation happens is it happens like Karen said, a little bit at a time over a long period. Bret said, if you need $6,000 of income today, and inflation is running at 3%, that means 24 years from now, you’re going to need $12,000 of income to be the replacement of what you could have bought for $6,000, 24 years previous. And the thinking I want to help people get out of their head is, “I’m not going to live that long.” Right? I mean, we hear it, “I’m not…” And if I live too long, with the figurative shoot me type comment, always pops up.

David Bezar:
One of the reports that we run, and this is something that causes concern all the time. When we do our complimentary consultations and people come in and they say, “Yeah, I had a retirement stress test done.” And most times they don’t have it with them. A lot of times they do. But hey, let’s take a look at that. And what we see is that stress analysis was run at what Social Security, actuarial tables tell us people will live to. So, for guys, that’s 82. For women, it’s 85. So, one of the big questions that we ask in our evaluation is, “Tell us about mom and dad. How long did…” And I can’t tell you Joe, how many times we hear, “Oh yeah. Mom passed away at 98. Dad passed away at 92.”

David Bezar:
So, if you’ve done your evaluation on your retirement, you’ve done your stress analysis on your retirement, and it only carries you from 82 to 85. What if you live to 92 or 96 or 98 years old, do you have a concrete understanding of how inflation impacted the required income that you’re going to need during that period of time? So, please don’t discard. Don’t think it’s a little thing. Certainly make sure that you get an analysis done that evaluates for longevity risks.

Bret Elam:
Yeah. I mean, David said it, I mean, statistics 65, you have a couple age, 65, a 50% chance that one of you is going for three decades. Again, we talk about longevity in here all the time. And Karen and I are going to share some different strategies that exist that help combat longevity risk. And here’s the most important thing, is going through a financial planning process. I said, the word planning and process back to back, can help pick what is that appropriate mix of those strategies. So, here’s one, focus on retirement resources that promise to pay an individual specified amount for life. Things like we’ve talked about Social Security. If you’re fortunate to have a pension, or maybe you create a pension, or there’s these things called immediate payout annuities, give a company a bucket of money, you get it back, and they give you a check for the rest of your life.

Bret Elam:
Here’s another one, explore deferred annuity products. While these aren’t giving you the income today, you’re putting it in today with certainty of what your income is going to be in the future when you need it. We’ve always talked about delaying Social Security, number three. So, those who delay the start of Social Security will increase their lifetime inflation, indexed benefit, they will receive. And the last one, I’m going to share, before Karen will share a couple here, is maintain a process. This is so important, a process. Maintain a process to provide regular withdrawals with gradual, not gigantic, gradual down draw those assets. Again, while lifetime income is not guaranteed, the strategy again, gradual definitely helps you improve your chances when you live longer.

Karen Bezar:
Another thing to think about is managing your required minimum distribution. So, remember what required minimum distributions are. The IRS says, “Look, you’ve saved your money. We want you to pay taxes now on that money.” But is there a way to manage it, so your required minimum distributions might not be taxed. So, again, we’ve talked about it before it, can you do Roth conversion as something to reduce the taxation. Because the more… Again, a reminder people sometimes don’t realize that every year that required minimum distribution number goes up. And if we’re talking about longevity, if you’re living 20 years, in the 20th year of taking those required minimum distributions that is increasing your tax rate, which is having a ripple effect on your Social Security check that’s being taxed, and anything else that you’re making pension. Everything has a ripple effect. So, again, can you manage your required minimum distributions, something to think about, something to consider when you’re heading into retirement.

Karen Bezar:
And the last thing I’m going to talk about here is considering your home and the value it provides. So, remember, if you’re out there and you think about, if you’re retired and something comes up and you might not want to touch your nest egg, there might be a different reason for saving that, you have a home that has value. And a lot of people that we know when you bring up the word reverse mortgage, David, sometimes we hear that, we talk about and people go, “Oh God, I don’t want to do that.” And we’re like, “Well, why not? What have you heard?” There’s good reverse mortgages out there, and maybe not so good. That’s why you need to have a fiduciary there by your side to help you with that. But that’s something that’s like your hidden weapon, your secret weapon.

David Bezar:
Yeah. I hope we’ve been able to illustrate that there’s a lot of components. I mean, we talked about taxes all the time. We talk about planning. But again, we’ve hit so many different things today. We’ve hit inflation. We’ve hit longevity. Here’s one of the biggest challenges that we all have going forward is, if you listen to the fed, they anticipate that interest rates are going to be at near 0%, at least until 2022. I was listening to CNBC yesterday. They were talking about things like the airline industry won’t come back until 2025, 60% of restaurants in New York City will never return. I mean, look, folks, I’m not trying to paint this horrible, horrible picture, because you can navigate it successfully if you do the right things. But generating income has become virtually impossible from traditional sources like CDs and savings accounts. And it’s forcing people to take much more risk by investing in the stock market. And we don’t disagree, you should be there, but you’ve got to do it the right way.

David Bezar:
So, you’re going to find out that there are some surprisingly attractive options for generating income that you may not even know, actually exists. Look, all we want to do is have a conversation, we want to make available for you a retirement income analysis. We go through that analysis that identifies all the things that we talked about. So, if you’re the kind of person who wants to make your money work for you, but you can’t afford to take any more risk, I’m going to tell you something. This is really right up your alley. So, I would encourage you to make a phone call, just walk over the phone, pick it up. Our team’s waiting for your phone calls to get you one of our discovery calls. You can get to us on (215) 987-2430.

Joe Krause:
Are you being tricked into taking too much risk with your retirement savings? You’re about to find out when we come back. And back here on Roadmap to Retirement, The Radio Show, here’s my visual for the listening audience. We’re standing in the middle of Lincoln Financial Field. There are 67,000 people listening to David Bezar, Karen Bezar and Bret ELAM. And all 67,000 of them have a different scenario in their real life. Whatever they do or whatever they’re doing, something that we’re talking about, Bret, is going to apply.

Bret Elam:
I mean, that’s a traditional way of thinking and what a lot of people think about is navigating up. I call it Mount Everest. They just think about the accumulation of assets. And what we specialize in and what we love, is all about how do we distribute it. And again, so many people focus on investment management. We’ve talked about it in recent weeks about, you need to be thinking about financial planning. Investment management is part of financial planning. Here’s an example. Again, we don’t know what we don’t know. And again, we talk about Roth conversion so much. And there’s so much that’s out there. Do I do it? Don’t I do it? Again, and a lot of people just wing it or they just put their head in the sand and take the ostrich approach.

Bret Elam:
So, just this past week, recently sat down again. It was the third time we sat down and they were in their early sixties, retired, again fortunate. And they had about $700,000 in IRA assets. So, between their savings, non-IRA assets made a couple small pensions. They were able to get by, again, they had modest needs.

Bret Elam:
So, what we had done, one of the reports that we had shared with them was, what does life look like, conventional wisdom of you not touching your IRA assets until the age of 72. David talked about 70 and a half, went to 72 with the Secure Act that got passed in December. So, when we gave him that schematic, it was going to be about $12,000. Again, projecting under today’s tax code out at age 72. Again, we have a little bit of certainty and clarity that we believe taxes are going to be higher, so it could be even worse. But again, under today’s rules, $12,000.

Bret Elam:
So, what we did, again, this is putting the plan together, going against the grain of conventional wisdom, put a carefully, laid out plan for them. Listen to this, that we were able to give them that roadmap of maximizing at lower tax rates, the Roth conversion amount in these early years, with the defined tax code today. What it had done is that now they paid taxes today, but it eliminated by the time they went on Social Security. And now, their IRA assets, were Roth IRA assets, were with just their Social Security benefits. And those two small pensions, they were going to be paying no taxes for the rest of their life. $12,000 a year, $1,000 a month until the day the second one passes away. That’s a big stinking deal by putting the pieces together.

Joe Krause:
And just real quick for clarity, when you say they’re paying taxes today, but they’re paying taxes at a very, very low rate today.

Bret Elam:
That’s it, to planning. Plan, put the plan together.

Karen Bezar:
Right. And that’s so important is to understand that strategy. And another part of the strategy, a report that we run, one of my favorite areas is Social Security. It’s like putting a puzzle pieces together and what can you do for this person? Or what can you do for that person that they might not have known? So, I have a report in front of me. I’m just going to read some of the information. So, we had a couple and we ran the Social Security report. And the suggested way of claiming more, we’ll give them an income of $1,204,866, if they use the strategy that the computer or the analysis told them. That’s a lot of money, $1,204,860.

David Bezar:
And that’s the additional accumulated benefit, right? That’s the total over their lifetime, by taking Social Security, by making the right choice.

Karen Bezar:
Correct. And Social Security, the numbers we use, men will live to 82. I mean, yes, and women 85. So, we don’t have a crystal ball. So, if you live longer than that, you’re going to get more money out of your Social Security strategy. But here, and then in detail, it says she begins benefits based on her earnings record and the estimated amount of $2,181 in a certain month and year. We have written down here at age 64 and six months. This is how detailed it gets to, right? And then he will file what’s called a restricted application, which some people can still take advantage of for his spousal benefits only in the estimated amount of $1,227. And that he does at age 66 and eight months. And then he will switch over to his benefit based on his earning record at the age of 70.

Karen Bezar:
So, he took his spousal benefit and then he let his own benefit grow each year by 8%. That’s a guaranteed 8% interest rate on his Social Security amount. That’s a big deal. Now, the strategy they were thinking of using, and they originally discussed with us and what we proposed them, gives them an extra $82,482 in their retirement. Again, if he lives to 82 and she lives to 85, it’ll give them more money if they live past that. That’s a big deal.

Karen Bezar:
And you’re out there, you might be thinking, “Well, guess what? I’m a single person. So, I can’t use that kind of strategy.” Well, here’s another example. I spoke with someone and she was looking ahead at retirement. She was divorced, but she was married over 10 years. She’s not remarried. And when we’re doing the planning, she said, “My Social Security benefits only, it was around a $1046.” And I asked her if she was married for more than 10 years, she said, yes. Her spousal benefit, she did not even know she could take that. She can get 50% of her ex-husband spousal benefit, which would increase her Social Security income to a $1,491, instead of $1046. That’s a big deal in retirement to have that extra money every month. So, that’s something that we brought to light that she was not even aware of.

David Bezar:
Yeah, Joe, hopefully, I mean, it’s always difficult to try to verbalize without seeing graphs and everything out. The impact of these particular plans that we do, the attacks analysis plan, it’s hard on radio to illustrate how we can actually line up the buckets properly so that you have a strategic plan. And a lot of times we use the word not conventional, right? Because conventional strategies, which most people…

David Bezar:
Well, we’ve been featured in Kiplinger. We’ve been in The Wall Street Journal. We’ve been in Inc Magazine. I don’t tell that to boast by any stretch. I say these things because that’s where a lot of people go to get their information. Right? And because it was written in an article by some financial author, a lot of people take that as gospel. And they say, “Okay. Well, that’s going to be… I could use that. That’s applicable for me.” The question is, is it really? Right? Is it really? I don’t know. I go to the doctor, I ask questions, right? He’s said, “I’m going to prescribe this.” I said, “Do you know I’m taking these other things?” Because I want to make sure that they’re not just giving me a blind prescription diagnosis without knowing all the other details.

David Bezar:
It really pains us here at Thrive, that when we sit down during these complimentary consultation, how benign a lot of the advice people have gotten and how unprepared they are. Now, look, we’ve got people that we visit with, like Karen said, might not even know that they were entitled to a spousal benefit. And just by saying, “Did you know you’re entitled to get this?” I mean, you guys see people’s eyes light up, go, “Oh Jesus, I didn’t no idea that was going to be available.”

Joe Krause:
More so than not, most people don’t know that.

David Bezar:
But then we have the middle of the road people, who do go out, and they either have a financial advisor, whatever it may be. Spend a little bit of time, get a little bit educated. But again, those people are being susceptible to that benign advice, more investment management than actual financial planning. And then, look, we do have groups of people who have done an amazing job, getting themselves educated up to speed and know a bunch. We asked those people, “So, look, you’ve done an awesome job, right? If you continue without any advice from us, you’re going to be fine. You’re going to be fine. But how would you like to be excellent. How would you like to have optimal situations? How would you like to be bullet proof, that you never have to think about your retirement ever again?” I mean, can you imagine that for a second, right?

David Bezar:
Can you imagine that you now retire and your biggest decision in the day is, “What am I going to do?” It’s a little different times right now but, “Do I go to the movies? Do I take a trip? Do I go play golf? Do I go hang out with my grandkids?” And you’re not having to think about your finances in any capacity.

Joe Krause:
Do I do nothing today?

David Bezar:
Or just nothing. Right? I wake up when I’m done sleeping and I go to bed when I’m too tired. That’s always been my dream. Right?

Joe Krause:
I love it.

David Bezar:
Right? That’s the name of the game. And that can happen if you do the right things with your plan. So, I really encourage you, give us a call, (215) 987-2430. Get one of these retirement 401k tax analysis. Sit and talk with us. We’ll have a cup of coffee, and get that security,

Joe Krause:
Great stuff again. As the show comes to a close here on Talk Radio 1210 WPHT, (215) 987-2430…

Leave a Comment