Joe Krause:
We say good morning on this 4th of July weekend. Welcome into Roadmap to Retirement, the radio show, we start with a question. What if you forgot about the whole idea of retirement? What if you stop thinking about it as some sort of finish line or that it happened at a specific age or date? Instead, what if you focused on becoming financially independent, because achieving financial independence could happen at any age or date. In fact, it could happen right now.

David Bezar:
So Joe, we were going to have a great show today for everybody, and you just mentioned it. So what exactly is financial independence? Here’s what it is. It’s never having to work another day in your life, unless you want to. It’s having a reliable stream of income without lifting a finger, and it’s not having to worry about the ups and downs of all of what happens on Wall Street. So you can achieve financial independence, but it doesn’t happen by accident. Coming up today on our show, we’re going to share five things that you must do that can help you achieve that financial independence, including the key to generating a consistent and steady stream of income that never stops, how you could dramatically reduce your taxes so you can have more money in your pocket, plus the one common thread with people who are financially independent today. So Karen’s going to lead us off today on talking a little bit about taxes. Bret will be back talking on other topics related to this whole concept of financial independence.

Karen Bezar:
If you’re out there listening, and I asked you how much money you have saved for retirement at this point, and you would say … let’s say you have a million dollars saved. That sounds fantastic. That sounds great. But let me ask you this question. If you have a million dollars saved, can you actually spend that million dollars in retirement? Have you thought about that? One of the biggest expenses you’ll face in retirement, it’s not what you think. It’ll most likely be your taxes. And if you’re not careful, taxes could take a huge chunk out of your savings. It’s taxes on IRA, 401K, Social Security benefits, taxes on all that investment income that you worked so hard to save. Here’s something directly from Forbes and they say, quote, “The more tax you pay, the less secure retirement is, and the greater your chances of running out of money.”

Karen Bezar:
Just think about that for a minute. You’ve worked so hard all your life and you’re planning on retirement, but have you planned for this portion of your retirement? And no matter how much you try to avoid it, Uncle Sam is always going to want to be your partner, your investment partner. So this is something to really think about that. So if you’re out there on planning on retirement in the near future, that’s something to think about. The good news is, you can do something about it. And how can you? Really, really important, we’ve discussed it before. Instead of tax preparing, you want to do tax planning.

Karen Bezar:
Here’s a good way to think about tax planning versus tax preparing. When you get in your car, what do you do? You adjust your mirrors. You look in your rear view mirror. Looking in your rear view mirror is tax preparing. It’s already happened. That past is already past, you can’t do anything about it. But when you get in the car, you’re looking forward, you’re looking out the windshield and that’s tax planning, where we sit down. That’s something that we focus on here with our clients is, it’s an ongoing basis. We sit down at the beginning of the year and we go, “All right, what’s going to happen this year?” We dictate what happens. We don’t look at what we already did.

Karen Bezar:
So what a tax planning is, again, it’s an analysis of your finances from the tax perspective, with the purpose of ensuring maximum tax efficiency. You want to consider tax planning, including timing of your income, size of income, timing of purchases, and you want to plan for expenditures, things that are going to happen in the future. Can’t always plan on an emergency, but I can guarantee you at least once in your year during retirement, you’re going to have … right Joe? You’re going to have some type of own emergency. And tax planning strategies can also include savings for retirement and IRA and engaging in tax gain/loss harvesting. This is something that we help our clients with on an ongoing basis. You can’t just set it and forget it. You have to always be looking at this on an ongoing basis.

Karen Bezar:
This is according to US News, retirees who plan carefully can often pay a lower tax bill in retirement. However, tax mistakes can have a dramatic effect on your finances when you’re on a fixed income. Think about that. Once you’re retired, that that job income’s gone. So this is where haphazard planning, tax planning might actually move you into a higher tax bracket or result in needlessly paying more taxes. And who wants to do that? Let me ask you, do you have a plan to withdraw money from your IRA and 401K? Dave, do you like surprises?

David Bezar:
Never.

Karen Bezar:
I know we’ve been married for a long time, but he definitely doesn’t like surprises. Don’t ever throw him a surprise party. Joe, just in case you were thinking of it, he doesn’t like it.

Joe Krause:
Good to know, I’ll file that away.

Karen Bezar:
Right. Exactly. Good surprises are good. But when I’m talking about surprises is, if you don’t have a plan to withdraw money from your IRAs and 401Ks, it could have a surprisingly negative effect on retirement. What do I mean by that? It’s going to have a ripple effect. If you have not planned on this, it could actually make you pay more taxes on Social Security, your Medicare premiums can actually go up if you have to take more money out that you’re going to raise yourself in a tax bracket. And again, this is something that our team works on every day with our clients. You could unknowingly jump into a higher tax bracket and cause higher taxes on Social Security benefits. And again, remember Social Security benefits, you can pay up to 85%, up to 85% of your Social Security income can be taxed, which doesn’t seem fair, but it’s the truth.

Karen Bezar:
Do you have a plan to navigate your RMDs? And again, RMDs are required minimum distribution. So that means the government is requiring you to take out that money. So you can’t just say, “Hey, don’t feel like doing it this year.” However, just a reminder, the SECURE Act just raised the required minimum withdrawal age to 72 from 70 and a half if you’re not aware of that. And President Trump signed a bill that we do not have to take RMDs this year, which is very, very important. Something you can do to help stop the required minimum distributions is do a Roth conversion. This is something we do ongoing. We do a Roth conversion analysis, just a real quick example of an actual example of a client that came in and she had saved $1.6 million in qualified retirement accounts. So her before picture was her paying $920,000 on that 1.6 million before doing any type of conversions into Roth.

Karen Bezar:
And after she would only end up paying $403,000. So that’s a savings of $517,000. That’s a lot of money. And let’s say you’re out there and say, “Well, I don’t have $1.6 million saved.” Well, guess what? We have a client that had 650,000 saved. Before picture, paying 428,000 on that 650 after 151, and that saved them $277,000. That’s a huge difference. So again, if I asked you how much money you’ve saved for retirement, you’d probably know the answer right off the top of your head, right? But if I asked you how much you’ll pay in taxes on that money when you retire, most people don’t have a clue. And again, we don’t like surprises. So you don’t want to be stuck in that position where you’re going to raise your tax bracket.

Karen Bezar:
I want to show you how we could dramatically reduce your taxes and retirement with our retirement tax analysis. This analysis will reveal the defensive tax planning strategies that could save you tens of thousands, if not hundreds of thousands of dollars, with your IRA, 401K, Social Security benefits, investment income, and more. You might expect to pay a hundreds of dollars for a customized analysis, but we’re going to cover 100% of the cost just for the listeners who call us today. Our strategies are best suited for those who have saved at least $250,000. And if you saved higher than that, the tax savings could be more significant. So to get your free analysis, give us a call at 215982430. If you’re serious about saving taxes and retirement, don’t wait because we only have a handful of slots and we have to book as you come. So 215982430 to schedule your free analysis. 2159872430, just leave a message if we’re not answering right away.

Joe Krause:
All right, good stuff. Thank you, Karen. No surprises for David as we move forward. Bret Elam is on deck as we go to the break, how can you turn your savings and investments into a reliable stream of income? We’ll talk about some attractive options when we come back.

Speaker 1:
You’ve saved and invested for retirement, but it’s what you do with your money that really matters. Welcome back to Roadmap to Retirement, the radio show.

Joe Krause:
Imagine if you didn’t have to work another day in your life unless you wanted to. Imagine if you had saved enough money or had enough money coming in, you didn’t have to lift a finger. That’s what it’s like to be financially independent, and you don’t have to wait for it to happen at a certain age or date. It could happen for you right now. Welcome back everyone to Roadmap to Retirement, the radio show along with David Bazaar, Karen Bazaar and Bret Elam. I’m Joe Krause coming up on this segment, the latest options to create a consistent and diversified stream of income, even with record low interest rates. And with that introduction, Bret Elam, all yours sir.

Bret Elam:
Today on Independence day and how fit that we’re talking about financial independence, and as you just said, Joe, with interest rates being so low, we just heard about it from Barron’s where they’ve reported what the fed just came out and said just a couple weeks ago that they expect interest rates are going to be where they’re at, which is now essentially at zero through 2022 for now a reassessment. So if we understand that out there and maybe you’ve saved a million dollars, maybe it’s $2 million. Maybe we had in our mind of how much income we were going to need in retirement. But now all of a sudden, you can’t plan for COVID and what just happened. And now the federal government has now reduced interest rates to darn near 0%. So how are we going to come up with that income for retirement?

Bret Elam:
Now, most of us have in our mind that, hey, we just want to save, save, save, save, and save. And that’s great. However, it’s all about having that diversified income plan. Again, your income will be the backbone of that retirement plan, but it’s not about simply how much you have. It’s all about the ability to generate that income. Not only generating that income, but again, it needs to be a diversified income plan again, with all the ups and downs that we’ve gone through the market.

Bret Elam:
Now, this is a big mindset change because you may be thinking out there. I just finished working the last 30, 40 years, month in month out, week in week out, paycheck, paycheck, paycheck. We never had to think. You never had to think, where’s my next paycheck going to be coming from? We just simply showed up as direct deposit every two weeks, twice a month, monthly. And now we go ahead and hand in the cleats, we’re no longer working now you all of a sudden need to start to recreate that paycheck. And that’s what we talk about, two different phases of life.

Bret Elam:
And again, as we’re entering this second phase in life, which we will call retirement, one, we need to be concerned about, the accumulation phase. This is us growing our assets. And typically, we have the ability. You have the ability to be a lot more aggressive while you’re working in those growth focus stocks where you would expect those values, and they did. We saw one heck of a stock market run from 2009 to where we are here at the present before COVID kicked in in February and March. But it’s understanding now as we’re entering that second phase of life where we will call it retirement, say you are now graduating to retirement, there’s that change. No more of that paycheck coming in. We talk about Social Security. We talk about pension, diversified streams of income. Some people don’t have pensions, but yet they have this pile of money of saying, “Okay, I have this money, now what do I do?”

Bret Elam:
And that’s what a lot of people are missing. And maybe you are our listening saying, “Hey Bret, I have accumulated a lot of assets. I have that million. I have that $2 million,” and that’s great. But now all of a sudden, how am I going to recreate that paycheck that’s coming back to me? That becomes the big problem that is out there. And this is it right here. This is a publication called The Street and it says, why retirement income matters. It says, despite the growing attention to coronavirus in the run up to the stock market crash, the six annual report said the following, that very few clients believed that a market downturn was very likely for this year 2020. And obviously no one saw COVID-19 coming, but overall people did not think that the market wasn’t going to go down. And here’s the second half of that study, which is what’s very important, is similar to findings from previous periods of market volatility. And this is it.

Bret Elam:
The study shows that more people year over year, their interest and guaranteed lifetime income. And you saw it again from 2019 to 2020, people’s interest in guaranteed lifetime income continues to increase year over year. And you may be hearing us here today and saying, “I’m 65 years old, I’m getting ready to retire.” And maybe you have life expectancy on your side where maybe 20, 30, 40 years as crazy as this sounds. We have plenty of clients and they’re hundreds of years old. We need to be thinking about what are those guaranteed streams? Yes, Social Security, having a little bit of faith in the government, that’ll be guaranteed. Maybe I do or maybe I don’t have a pension payment that will yield to overall guaranteed income. It’s understanding that there are streams of income that are out there that we have the ability to partake in.

Bret Elam:
And this was it right here. We just sat down with somebody who spoke about their parents who retired back in the 80s. And they said, Bret, they just simply put their money into CDs and they are able to live in retirement. But can we go do that too? And again, how we just started this segment, talking about interest rates being an all time lows, it’s not practical anymore. I wish we could give people CDs seven, 10%. They just don’t exist where we’re simply going out there and looking for items that are going to be … and especially in the CDs and the banking space that may be paying us 2% if we’re lucky these days.

Bret Elam:
So when we start talking about some of those sources of income, how can we generate that? And again, we talk about being diversified. Don’t have it all in just CDs. We have to have diversification of that portfolio. So some examples that we have that are out there, again, there’s solutions that are called annuities. Annuities can absolutely provide that guaranteed cashflow that you’re looking for. That gives you that peace of mind, that you can not outlive that check. Another diversified way on how we can generate income are through bonds. You have both corporate bonds, treasury bonds, municipal bonds, where they will give you interest where that can create again, a cash flow.

Bret Elam:
Again, each and every one of these solutions, we need to understand the risk and the reward associated with them. And we get a lot of people just to traditional stock market. We have dividend stocks, big paying stocks, maybe Home Depot or Coca Cola, where they’ve been around for a while. And they’re saying, “Hey, thank you for being a part of our corporation. And in return, we’re going to give you what we call as a dividend.” So it can create that cash flow, again, that cashflow, that diversified stream of income that we have at our disposal.

Bret Elam:
There are these things called target date funds. A lot of people are familiar with maybe Vanguard or Fidelity of 2020 or 2025 or 2030 fund. It is the most common area that we see people are invested in their 401K. Maybe you are invested in one of those funds 2020, 2030. Is that appropriate? Maybe that helped me. Maybe that helped you get to the peak of retirement. And now that you’ve hit that peak of retirement, does it make sense to stay there or now do I need to change the mindset that now you need to now start receiving that stream of income, not just simply thinking about how do we grow, grow, grow our assets.

Bret Elam:
Real estate, real estate is another example. There’s a lot of concern out there today with everything going on with COVID and the small business market, but another example of real estate, whether it be commercial real estate or residential real estate, having some rental properties, again, having some cashflow of rental income that’s coming to you. But notice, I did not say that you should have all your money in one spot. This is all about diversification, diversification, diversification. We talk about from Harvard Business Review says our thoughts to retirement is wrong. Everyone thinks about net worth. We need to start thinking about monthly income. Again, monthly income, because what happens is if we have all that money in one bucket with what just happened, and we hear about it when we have people that come into the office, say, mom and dad, mom and dad, but it’s understanding what has happened in the past is a lot different than where we are at today.

Bret Elam:
So when we start talking about all those different streams of income that are available to us, you may be thinking, I can have all my eggs in one basket. Now, again, we started this segment talking about the periodical from Barron’s talking about the fed says for at least the next two and a half years, that interest rates are going to be zero. So this makes generating income again, virtually impossible. And we start thinking about traditional sources again, like CDs and savings account. So what it does is it forces you to take more risk in the stock market. And that’s too much of a dangerous game to play as you’re nearing retirement. But the good news is, there are some surprisingly attractive options for generating income that you may not even know exists.

Bret Elam:
Now, I want to show you what these are with our retirement income analysis. This analysis doesn’t cost you a dime it’s free and there’s no obligation. And if you’re the kind of person who wants to make your money work, but you don’t want to bet the farm, this is right up your alley. Now, if you’ve saved at least $250,000, call 2159872430. Our staff only sets aside a handful of slots every week for these appointments, and they fill up quickly from the show. So don’t wait again. The number is 2159872430. Once more, that’s 215982430.

Joe Krause:
All right, good stuff Bret Elam. A lot of information falling under the category of diversifying your streams of income. Have a great 4th of July, sir. We’ll catch you on the show next week as we go to the commercial break, filing for Social Security will be one of the most important financial decisions you’ll ever make. Hundreds of thousands of dollars are at stake. We’ll share how you can avoid the biggest mistakes when we come back.

Speaker 1:
Taxes, income, Social Security, IRAs, and 401Ks, David, Karen and Bret tackle the most difficult subjects and make them simple and easy to understand. You’re listening to Roadmap to Retirement, the radio show from Thrive Financial Services.

Joe Krause:
And back here on Roadmap to Retirement, the radio show. What if you forgot about the whole idea of retirement? What if you stop thinking about it as some sort of finish line or that it happened at a specific age or date. Instead, what if you focused on achieving financial independence. David, all yours, sir.

David Bezar:
Yeah. So what we’re going to cover Joe in this segment is how you could avoid losing out on tens of thousands of dollars. And we’ve even seen it, if not hundreds of thousands of dollars in Social Security income. See, Social Security benefits will be very critical to your financial independence. We’ve seen people with less than a million dollars, we’ve seen people with a lot more than a million dollars that sometimes put emphasis, and sometimes don’t put emphasis into Social Security. But according to Forbes, Social Security benefits function as a $1.5 million annuity and should be considered as one of the foundation pillars of your overall retirement. If you were thinking of retiring, chances are good you’re eager to start collecting Social Security. Unfortunately, if you’re like most people who probably don’t understand how these important benefits actually work, I mean, in fact, more than nine out of 10 adults really don’t have a complete understanding of how to maximize that benefit out of Social Security.

David Bezar:
And like I’ve heard people say to me, I want to get every penny that’s due to me possible in Social Security. I paid in for 35 to 40 years, I don’t want to jeopardize myself by taking it at age 62 versus 70, but it’s kind of just a random decision. There isn’t a lot of thought process. It’s more emotion than actual logic. And I really want to share with people that, when most Americans take their Social Security benefits at face value, they could end up leaving. Like I said earlier, tens of thousands, if not hundreds of thousands of dollars on the table. And according to new research in Bloomberg, 96% of hardworking Americans lose an average, listen to this number, lose an average of $111,000 in Social Security benefits, and it’s all due to the critical timing mistakes that people tend to make.

David Bezar:
So one out of 300 people between the ages of 60 and 70 could answer five basic questions about Social Security correctly. So 99.6% of these people got it wrong, and that’s really frightening when you consider what’s at stake is potentially hundreds of thousands of dollars. So this is an important topic and we don’t take it very lightly. We really spend time getting people educated up. Number one, through our show, we’ve done it on TV. We certainly have done it in our workshops in the past, our webinars, so on and so forth. So what you might try to … a lot of people think I’m going to try to delay starting to collect Social Security until age 70. And in order to be able to pull that off, you could plan to draw more from your IRA and or your 401K account for a few years.

David Bezar:
So I recommend don’t just aim for age 70 automatically though. After all many people live shorter than average lives and if your health or your family tree suggests that that may be the case, it could actually make of sense to collect that Social Security benefit early and start enjoying retirement as soon as you can. And again, we don’t have a blanket approach for people. We try to get folks educated up, that let’s consider all the different situations that are possible before we just take that random I’m going to take Social Security.

David Bezar:
Now, there are reasons to claim Social Security at 62, but there are also reasons to wait until you’re older. Claiming benefits too early could actually result in receiving a significantly lower amount. In other cases you may be actually creating a tax credit for yourself if you start receiving a Social Security too early and are still working. Now, I said headache. So for those of you from Philadelphia, my wife is always giving me a hard time.

Karen Bezar:
He says headache.

David Bezar:
Headache, I don’t know. Creak string, so I’m not really sure, but I’m going to continue with headache. So-

Karen Bezar:
Let me translate, head ache. Go ahead.

David Bezar:
Thank you. Appreciate that. So how and when you claim your benefit impacts a lot more than the amount of your benefit check, you could also unknowingly trigger an avalanche of taxes. You could end up doubling your Medicare premiums and you could actually end up causing yourself to forfeit thousands of dollars in spousal benefits. So just from what I’m describing right now, I really hope that you put yourself on pause, right? Especially if you’ve not yet taken Social Security and go, holy smokes. I guess there’s a whole lot more to the decisioning aspect of where does Social Security fit into my financial game plan to, what’s going to be the impact be between taking it early versus taking it later. Do I do a break, even analysis?

David Bezar:
A lot of people do break even analysis, but they don’t factor in, it could be a husband and wife situation, which if you’re at a certain age, that would allow you some special timing election choices that could really add a dramatic amount of money to the total amount that you get. So we have to consider all of that. Social Security is something that’s very difficult to replicate. That’s another big decisioning aspect of it. Unlike a lot of other investments that people have for retirement, Social Security is indexed to inflation. It’s guaranteed to last for as long as you live, and here’s a neat part, right? Especially in these interesting times that we live in, it’s unrelated to the fate of the financial markets. So it might not cover all of your income needs, but it’s certainly a good component if you structure it correctly.

David Bezar:
Social Security, now, here’s something that people really need to consider. It’s the taxation of Social Security. It could hit you like a ton of bricks. You could pay taxes on as much as 85% of your Social Security benefits. Most people don’t realize this, and when the tax bill hits, it’s too late to do anything about it. So now the money you were counting on to help support you in retirement could actually end up being a fraction of what you thought it was going to be in retirement for you.

David Bezar:
The other thing is people who saved money for retirement are being punished. I’m using the word punished by Social Security taxes. Great article on MarketWatch for you to read, talking about the punishing effect of Social Security. Taxation on Social Security benefits is likely to happen only if your combined income is too high, right? Because the way that … it’s called a provisional income formula, the way they calculate, they take all things, all incomes into consideration, and then take half of your Social Security benefit into that. And that tells you what your tax bite is going to ultimately be.

David Bezar:
So couple of quick things that I would recommend that you should really know and really get focused on is, there are six things related to Social Security. One, you can claim benefit at 62. Two, you can delay your claim until age 70, number three, your lifetime benefit doesn’t change based on timing. Your spouse can claim based on your earnings. Number five, you don’t get a do over. And number six, you can work the formula to increase your benefits. Critically important. So those are six things that you can get a good understanding, really know them like the back of your hand, and that will help with the decision making. If you’ve made an average or above average income throughout your career, a lot of the traditional rules for filing for your Social Security benefits may not apply to you. The traditional rules of thumb, like delaying your benefits as long as possible could end up costing you a small fortune in taxation. And if you’re wondering why, it’s because when you consider the impact of taxes and Medicare premiums, the net net could be a lot less money for you.

David Bezar:
What want to do is show you how you could maximize your Social Security income with our customized Social Security analysis. This analysis will reveal how you could get more income from Social Security while considering the impact of taxes, Medicare premiums, spousal benefits, and more. Now, a lot of advisors will charge a lot of money for these customized plans, but we’re going to cover a 100% of the cost for our listening audience. If you’ve saved at least $250,000 and have not yet filed for Social Security, schedule your free customized analysis by calling us at 2159872430. I mean, if you’re really seriously interested in how you get more income out of Social Security, I’d suggest not waiting. Call us at 215982430.

Joe Krause:
Really, really good topic. I wrote down hundreds of thousands of dollars times the number of people that take Social Security. Oh my goodness.

David Bezar:
Crazy.

Joe Krause:
It is a crazy, crazy amount of money that is at risk. Great job. As we go into our final commercial break, are you taking on too much risk in the stock market and you don’t even know it? Learn to key to reducing investment risk after the break.

Speaker 1:
This is where you can count on straightforward and objective advice about how to make your money go a lot further in retirement. Welcome back to Roadmap to Retirement, the radio show.

Joe Krause:
And back here on Roadmap to Retirement, the radio show, what is financial independence? It’s about never having to work another day, unless you want to. It’s about enjoying your reliable stream of income without lifting a finger. And it’s about never having to worry about the ups and downs on Wall Street. Again, on this Independence weekend, Karen, we talk about financial independence.

Karen Bezar:
Absolutely. And one thing you can do to maintain your financial independence is you want to reduce your investment risk. So we have a little do over from this beginning of the coronavirus. So the stock market has come up a little bit. So this is your chance. Unless you have been living under a rock, the stock market has been on a roller coaster these last few months. So now is the time to protect your savings before it’s too late. Don’t just sit there and do nothing. One thing you can do is to help protect your investments from this crazy stock market and is properly diversifying your portfolio. Diversification and asset allocation are always critical to protecting your wealth. But if you’re nearing retirement or in retirement, this is a key component.

Karen Bezar:
Just remember how you felt when saw the stock market dropping. You have to do something now. So according to Think Advisor diversification is key and in light of recent volatile market swings, now is a good time to review portfolios to ensure their retirement income stream will be resilient enough to withstand the next inevitable recession. It’s going to happen again. It’s all over the place, prepare now. So what does that mean? How do I diversify my portfolio? So important, number one is you have to start rebalancing and consistently update your plan, right Bret?

Bret Elam:
Yeah, that’s it Karen. And you said it’s all about diversification. And again, diversification is not just a onetime task. Again, once you have that target mix, again, you need to keep it on track, again, with those periodic checkups and rebalancing, because if you don’t rebalance a good run in stocks can leave you with a risk level, that’s inconsistent with your goals and strategies. So it’s understanding maybe you have already diversified, but it’s this concept of rebalancing. And when is it too much? And it’s understanding a recent article from MSM, they went through and said, just talking about what we just went through with COVID and saying, it’s always a difficult time during volatile markets and recessions of what we just got of what we just went through with rebalancing. It doesn’t help that this was not our typical recession, and it came with unprecedented volatility.

Bret Elam:
Again, we always need to structure portfolios around longterm and short term goals, but that doesn’t simply mean to just let ride things out. Again, investors who hold, this may be you. Their diversified positions and stay the course are less likely to encounter that market timing risk. Again, we recommend establishing rules for rebalancing in advance, and this is the most important thing, and sticking to that plan. Again, asset allocations are based on individual risk tolerances, meaning your risk tolerance, not everyone’s, yours. And your time horizon, not on market productions. There’s no reason to get a crystal ball out, we’ll just wait and see if rebalancing is warranted. So maybe you are ready. Maybe you are diversified. Maybe you are rebalancing. Here’s three things. Something Motley Fool shared recently with everything that’s going on, this is important related to the diversification and rebalancing. Number one, making sure you’re not investing money that you need for the next year or so.

Bret Elam:
Again, if your child has just taken the PSA, SATs preparing for college, don’t have all their college money sitting in the stock market. Again, we’re going to want to have the appropriate amounts sitting in cash, money that we know we’re going to need. Here’s number two, you need to make sure you own good companies that will come out of the crisis well, even if their business mates suffer, we know they’re going to come back. And number three, you to have some cash ready. Again, we call this, keep your powder dry so that when companies go on sale, we can buy them on a discount. Why that becomes important to pulling it all together was the fifth step to financial independence, and I’m going to throw that over to David.

David Bezar:
Yeah. Another important aspect, which we didn’t get a chance to talk about, that’s a little off topic of rebalancing is just making sure overall you’ve got the comprehensive financial game plan. We see thousands of people on an annual basis. We ask a question all the time. Do you have a written retirement income plan, right? A written retirement income plan, and overwhelmingly the answer is no. I don’t know what you’re really talking about. I get statements, I have my investments. I talk to my financial advisor. I get my taxes done by my accountant. But do you have an overarching plan that basically gives you the direction to make sure you arrive financial independence like you planned for? Planning for retirement is like building a house. The fundamental features of any home are basically the foundation, the walls, the roof, of course, there’s other details like the electrical, the plumbing, the finished work, so on and so forth, but just like a blueprint that you would need to build out a house, you need a blueprint that will help you build out your retirement plan.

David Bezar:
That retirement blueprint that we designed for our clients includes the following thing. The foundation, does your principal protected safe assets, the walls designed for growth and income composed of assets, not generally tied directly to the stock market and then the roof, right? The roof typically growth oriented equity investments with exposure to the markets. And that plan, it’s got to generate income, it’s got to reduce taxes, it’s got to maximize Social Security benefits, it’s got to have a strategy to withdraw money from your IRAs and 401Ks. It’s got to avoid the devastating impact of required minimum distributions. It’s got to stay one step ahead of inflation. It has to have an estate plan component to it, it’s got to reduce your fees and expenses overall, and having a plan for the skyrocketing cost of healthcare and longterm care. That is a written retirement income plan.

David Bezar:
So today we’re talking about how to achieve financial independence. When you think about growing your wealth or getting more out of what you have, you might think about reaching for a bigger return on your investments, but unfortunately that comes with more risk, right? So one of the fastest and safest ways that could increase your wealth is probably not what you’re actually thinking. The thing is, it’s actually by reducing your taxes when you retire. Many people believe you don’t have any control over your taxes, but that is completely untrue. In fact, you have more control over how much you pay in taxes in retirement than any other time in your life.

David Bezar:
I want to show you how you could utilize our retirement tax analysis. This analysis will reveal the defensive tax planning strategies that could help you save tens of thousand dollars or even possibly hundreds of thousands of dollars within your IRA, 401K, Social Security benefits and the like. So what I want you to do is to get your free analysis. I want you to call us at 2159872430. I don’t want you to wait because this is critically important to financial independence, 2159872430.

Joe Krause:
Good stuff, and a really, really good topic. As we end the show here on Roadmap to Retirement, the radio show, I actually jotted down hand written plan, realizing that nobody writes anymore. But a plan, you need to have a financial plan. That’s going to do it on this holiday weekend. On behalf of David Bezar, Karen Bezar and Bret Elam, I’m Joe Krause. See you next time, everybody.

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