David Bezar, Bret Elam and Karen Bezar discuss the pitfalls of women in retirement, social security and the importance of having a financial plan in place after the death of a spouse.
I would like to start this weeks blog by praising our Thrive Army. We can say with an unconditional guarantee that your commitment and your genuine concern for clients, potential clients, listeners, members of the Thrive Army supersedes anyone’s highest expectation. I applaud all three of you for continuing to push that forward.
There’s that old cliché out there, if you do what you love on a daily basis, all good things happen from that. And, we absolutely love it. It’s really awesome to spend time with people – to hear their stories. I had an appointment with some folks that visited us at one of our workshops in Upper Dublin.
The comment as he walked out the door was “David, I’ve gone to tons of these workshops, and I’ve met with various financial advisors.” He said, “I don’t want to get your ego up too high, but you make it so I understand it. And, when I’m walking out of here, I have confidence that I understand, and that’s for the first time, and I’m 66 years old.”
And, I revel in that. I know Bret does. I know Karen does. It’s really rewarding to be able to sit down with somebody who has entered that fourth quarter of life -where you can’t fumble, you can’t throw an interception, you have do it right because you don’t get a do-over. We are giving people that confidence. We’re sharing ideas, we’re sharing data, and proving it mathematically that they can do it in a really successful way. And, it’s a blast. We’re having a great time.
And everyone that walks through your door seems to truly enjoy the teams passion. On the note of passion, Karen’s individual mission of delivering a message to the women of the Delaware Valley is starting to really resonate. It’s becoming a more frequent topic, “Hey, we need to focus in on that.” I’m quickly starting to understand and realize women make the decisions in our households, and women need to be involved in those decisions, and women need to understand. My wife needs to understand as much, if not more, of all of this that you talk about, more so than me.
I totally agree. Obviously I’ve touted this subject for a while, and it’s always been a passion of mine since we started in this arena so many years ago. I’m not going to tell you how many years ago, how long I’ve been doing this business.
In two weeks, Jim Chilton, from SOFA will be along, and he will join us. Give us a little bit of a quick backdrop on SOFA. We’ve talked about that before. There’s real value, not only for you, but for the listening audience.
SOFA, itself, is an acronym for an organization called the Society For Financial Awareness. It’s a national 501c3 organization, and Karen, myself, and Bret were nominated, and accepted the nomination, for the Pennsylvania State Chapter Presidents of the organization. And the commitment, Jim being the CEO of the company, founded it. It was over 20 years ago that he recognized a need for an organization to be out there that could really provide education and advocacy for consumers, especially in the topic of financial services.
There has always been such a big disconnect between consumers and professionals within the industry. I mean, if people don’t get educated, they feel that they need someone else to do the work for them. Our goal is to empower and act as an advocate, and get people to understand so they can make the proper decisions. And, Jim is an absolute champion for that cause, and I’m very excited for him come speak to us in a few weeks.
And, Karen, what should we expect from you today?
Surprise, surprise, I’m going to be talking a little bit about the pitfalls that women fall into when they’re planning for retirement.
At the request of people that are visiting with us in our office, and at our workshops, we put an additional website together that people can visit. I’ll tell you a little bit about what’s on it. So, the website is called meetthrivefinancial.
We said we wanted to come up with a tool that people could “meet us” before they meet us. Who are these guys? We hear ’em on the radio show, we hear about these workshops. How can we get a little bit more intimate, understand who they are, what they do, why they do it? What we added to that website is a lot of good information that folks could download. So, we have a downloadable book on there. The title to it is How to Retire Worry Free. When you visit the site, it’ll be the first thing that pops up.
On the website there’s a great video explaining what we here at Thrive believe helps someone navigate a successful retirement. There’s even a quiz that people can take on the website to give them some indication of what their understanding is about some of the different topics related to taxes and tax planning, investment management. There’s a lot of information about Karen, myself, and Bret. We want people to know who we are as people, so there’s fun things on there like 20 Things That You Didn’t Know About David or Karen or Bret.
There’s even a great little button on there that you can refer the website, so you can just send it to somebody that you know, so they can visit it, as well. And, I think that’ll certainly help the expansion of the Thrive Army which we want to see that happen.
I will tell you that just people, in general, sometimes have a fear of stepping outside their comfort level. Not in a bad way. It’s just the make-up of who we are, of what people do. So, I applaud you for that. The website is a great way for people to get to know Thrive.
The one thing about us is that we’ve got patience. A lot of people in the financial field look at everybody that walks through their doors as their next client, their next sale or their next bit of income. And, we’re not here for the short-term, we’re here for the long-term.
At the end of the day, we just want to provide that education, and if it takes you a year or two for you to come around to wanting to come in and visit, that’s fine with us. In the interim we want to get you educated, because maybe things happen in that interim that you need to know about prior to coming in and visiting with us.
I think the experience for people is really exceptional. It’s very calm. It’s informative. There’s a ton of value. And, just the fact that you end up walking out with confidence, whether you become our client or not, it’s all a win.
It’s funny you closed with that statement, because that is exactly how I reference who you are when somebody says to me, “Who is Thrive? What is it all about?” That, to me, is just an incredible position to be able to take, and to stay true to it. If somebody comes in to see, and ultimately decides to not do business or to not become a client, you’re thrilled that you had an opportunity to educate them on something specific. I think it’s incredible. It’s great stuff.
It’s a pay-it-forward, because eventually it’s going to impact somebody else. We practice. We play the way we practice. It’s just the way we do it.
I had a great visit with a couple of folks from one of our workshops, yesterday. We did our first appointment, which we offer complimentary, and then we offer a complimentary follow up appointment. We share information related to the questions and concerns that they have during their first appointment. In between those two appointments, I got an email from this particular family asking me some questions. They inquired what they had saw at the workshop in addition to what they saw via the first appointment. In anticipation of the second appointment, they wanted to know what it was like to become our client. So, they wanted to do their due diligence, and I thought it was really good. And, I thought maybe I could share a little bit of that email.
So, this gentleman said, “Here’s my questions.” He had a lot of them. But, the number one question was: What services do you offer completely?
So, I said, “Here’s the things that we do: from a service standpoint, we’re doing taxes and tax planning, we do investment management, we do risk management, we do insurance services, when applicable, and we deal with estate and legacy planning for our client. So, those are the services that we offer.”
And, then, “What products do you offer?”
“Well, we offer investments. Stocks, bonds, mutual funds, exchange traded funds, and the like. And, we also offer insurance related solutions. So, long-term healthcare, certain types of life insurance, we even have a relationship with Del-Val Insurance where we do property and casualty, auto and homeowner’s, and we bring annuities up if they’re appropriate and they kind of fit into the mix.”
Then he asked another question. He said, “Are these offerings limited to certain types of products or only proprietary products?“
And, that’s something that we at Thrive really pride ourselves on is that we are fiduciaries, and we are completely and utterly independent, and the only allegiance we have is to the people that we serve not the companies that we represent. So, I explained to him that we at Thrive hold no proprietary products whatsoever. We do our due diligence, and make recommendation that are most suitable, and best fit for the clients that we serve as acting as a fiduciary.
So, I want to piggyback on what David just finished on. Somebody came to a workshop. Somebody came to an appointment, met us the first time. Sometimes it’s meeting us the second time, too. There are so many times you sit down with people, whether they’re on the radio or whether you’re sitting kneecap-to-kneecap, and all they ever want to talk to you about are the products.
That is an important part of financial planning, but it needs to be put together with all the different puzzle pieces. So, it’s a testament, and I love my partners and my team here at Thrive is that we’re truly out here being advocates. It’s not bait-and-switch.
We’re actually, truly delivering on what we actually talk about at the workshop. It’s people like Jim Chilton who’s coming onboard while we’ve been recognized to be the state chapter presidents, and possibly looking at becoming national chapter presidents of SOFA. So, that excites us.
It’s happening right in front of my eyes. I’m watching it; I’ve watched the growth. I’ve watched and experienced what takes place. I don’t work for Thrive. I’m hosting a radio show with Thrive Financial Services. So, for me to be able to watch, see it, and enjoy it, and take real good feeling in watching other people do it, it’s just an amazing thing. I’m so thrilled to be part of this program, in the small role that I have. You guys are doing really, really good work.
Today I want to start putting some of these puzzle pieces together.
Today, when we talk about the government, It’s realized today, 66 cents of every dollar that’s being spent by our United States government is going towards Social Security, Medicare, Medicaid, and there’s this thing called ‘The Debt’. This country’s trillions of dollars in debts. So, those four things: servicing ‘The Debt’, Social Security, Medicare, and Medicaid.
66 cents. So, 34 cents of every dollar that’s coming in, paying for government jobs, the military, FEMA, the SEC, Roads and Construction, etc, etc.
Now, realize that there’s this segment of our population that’s called the Baby Boomers. 10,000 of them turning the age of 65. I believe our number, now, for the next 13 years, 10,000 people every day turning the age of 65 for the next 13 years. You ready for this?
Under current law, 94 cents of every dollar in the year 2026 is going to be spent from the United States government on Social Security, Medicare, Medicaid, and servicing ‘The Debt’.Under current law, 94 cents of every dollar in the year 2026 is going to spent from the United States government on social security, medicare, medicaid and servicing 'the debt' ... Click To Tweet
Today, 34 cents of every dollar the government raises in taxes are going towards all the other programs. In eight years, 2026, 6 cents of every dollar. So, what’s that telling us?
Taxes can only go one way. It’s staring us in the face every time we get a Social Security statement. Under current law, if nothing changes by the year 2034, you’re only going to receive 77 cents on the dollar, whatever your benefit’s supposed to be. Those tough decisions are not being made.
So, reality tells us, if there’s only going to be 6 cents of every dollar that’s going to be left to spend on all these government programs, which ones are we going to cut? FEMA? The SEC? Roads and Construction?
What does it tell me? Taxes are going to go up. We heard back in November of 2017, Medicare, and this is what we’re getting into the healthcare. Medicare Part B in 2017 moving into 2018 is going to stay flat. Great news, Americans. Costs $134.00 in 2017, it’s staying flat 2018. $134.00.
But, what they never tell us is that they adjusted the income brackets, of what they call for Medicare surcharges. What a lot of people don’t understand is, depending upon your income that you show on your tax return and retirement will dictate what Medicare will cost. There’s a lotta Baby Boomers, there’s not a lotta younger people. So, more and more people on Social Security, Medicare, Medicaid, and ‘The Debt’ is still uncontrollable, at the end of the day.
It’s understanding that with taxes going up. like when you have an IRA and you have a 401K, we call those profit sharing plans. Do you know who shares in those profits? The IRS. And, do you know who gets to dictate who gets to control what part of the profits? The IRS. How do they do that? They make changes to the tax code. Easily.
Today the highest tax bracket as an individual filer is at 37%. Married, Filing Jointly, individual filer, 37%. Can you give me a guess of where taxes were at the highest in United States history? Today it’s at 37%. You want to give it a shot?
No idea. Is it higher than 37%?
94%. President Reagan used to do movies back in the ’40s. He would only do two a year because, if he did that third movie back in the ’40s when taxes were that high, he only kept 6 cents on the dollar. He goes, “Why would I do more than two movies?”
So, we’re at 37 cents, today. Is it going to 94? I don’t know if it’s going to go that far. Conventional wisdom says delay your IRAs all the way out till 70 and a half. Don’t touch them because the IRS is now going to say you have to start taking that money out.
For every million dollars that you have in 401Ks and IRAs, you have to pull out approximately $36,000 a year. And, knowing that, from a healthcare standpoint, they’re making it easier and easier and easier to fall into these Medicare surcharge levels is a couple things we need to think about in starting to connect those puzzle pieces.
Number one, today taxes are low. We have an eight year run in which we can do things that may be in my benefit. With a 65 year old couple that’s alive right now, there’s a 50% chance one of them making it to the age of 95. So, sometimes we need to do a little bit of short-term sacrifice, in very low tax brackets, to ensure that they’re going to have tax efficiency for a long time of not knowing what the IRS could change taxes to.
Number two, is understanding how Medicare surcharges work. Meaning, depending upon the income that we have on our tax return will dictate, how much we pay for Medicare. We start connecting some of those dots. We need to be proactive. That’s part of what we call the Thrive Retirement Roadmap Review.
Those are all the puzzle pieces that we help people connect. It’s a breath of fresh air when people say, “What are your products?” Because we’re not always talking about products.
Let’s talk about all the problems we’re facing as Americans.
We love to educate. It is what we love to do. We have a lot of powerful women in our organization who are helping to educate as well. Our daughter helps out sometimes at our seminars. We have David’s mom and Bret’s wife working too. The important thing is that we understand that sometimes women have different thoughts or concerns than men. So, please come out, and it’s really, totally, 100% educational. That’s all you’re going to get from us is education and that is it.
It’s something I’m very passionate about, and I think the reason I’m passionate about it is I am one of the statistics. My parents were divorced when I was a young age, and I saw what my mother went through, because she let my dad take care of everything. So, when she had to start dealing with things and paying bills, and she didn’t even know how to balance a checkbook.
My mom didn’t know how to plan for retirement, and she didn’t plan right for retirement. Luckily, she’s doing okay, and we’re able to help and guide her, and we’re always there for her. So, things worked out for her.
It’s a scary time. My topic is there are four reasons that women have problems in retirement. The wage gap, which is a lot of talk right now, women just don’t get paid in a lot of industries still the same as men. Women tend to be more likely to be the caregivers of. So, they might have to stop working, and their Social Security is not accruing, and they don’t have that savings. Or, they only worked part time; they never worked full time.
And, even if you’re married, women, statistically speaking, outlive men. At some point you’re going to be responsible for yourself. So, it’s better to have a plan than to stick your head in the sand.
And, that’s one of the things that we talk about when we sit with couples. We plan for one person dying before the other. It’s a reality we have to face.
We have a few couples, one recently, and she said, “My husband and I already have … I’ve already told him he’s not allowed to die before me.” Said jokingly, but, sad fact is, chances of it happening are slim to none that he’s going to follow her rules and abide by them.
So, it’s a possibility you’re going to find yourself responsible for your own financial situation, and there’s things you can do to prepare for it. Number one, if it’s not us, find somebody that you’re comfortable with that can give you guidance.
You have to have a plan. A case that come to my mind is one woman did come in, she said, “I don’t have enough money.” And, in our conversation she brought all her financial information, and she brought her life insurance policy with her. She was very happy she had life insurance, because she wanted to leave something behind for her kids. She didn’t have a lot, but she was paying money every month into this life insurance policy. And, as I’m looking at it, I noticed that something didn’t look right, so we called her life insurance company.
In that conversation they actually told her that premium was going to double. She didn’t even know that. She didn’t understand that. If she didn’t pay it, her policy was going to lapse, so she was so thankful that we did that for her.
Yeah, it’s pretty good stuff. Even the example you just used, I think we all, putting me in that we category, we have to be incredibly self aware, and you’ve heard me say this, we have to be have to be smart enough to know what we don’t know. Once we’re willing to accept that, then we can start to have a conversation and understand where we’re going to go, and how we’re going to build this retirement. I know as I sit here today, I’m not ready for retirement, neither is my wife. When you get engaged with Thrive Financial, we help you get started.
People come in, sometimes they think, “Oh, it’s too early to start, or to come in and meet with us.”
We’re prior to retirement, we’re are during retirement, and we are after retirement. We are there with you the whole way.
Whatever you might need, we are there. Some people don’t need a lot of help, some people do need a lot of help. But, we’re here to give guidance, and, holistically, right, we take into consideration taxes, Social Security, everything, we take the whole kit and caboodle. We are educators and advocates who also happen to be financial advisors.