Determining Your Budget During Crisis

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This program is a pre-recorded paid commercial announcement, produced and paid for by Jacob Media Partners. No statements made during the Thrive Retirement Roadmap Radio Show shall constitute tax, legal, or accounting advice. You should consult your own legal or tax professional on any such matters. Information presented is for education purposes only, and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investment, or investment strategies. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor, and or tax professional before implementing any strategy discussed.

Joe Krause:
And a good Saturday morning, everyone, and welcome into Roadmap to Retirement, the radio show as we come to you on Talk Radio 1210 WPHT, along with David Bezar, Karen Bezar, Bret Elam. I\’m Joe Krause, we\’re still standing, and we are still practicing our social distancing or spacing from each other. We\’re broadcasting from what is really a unique setup, we\’re coming from four corners of a big conference room. But collectively, our audio comes together to deliver to the listening audience, who joins us every week on this radio program.

Joe Krause:
The information that they really do need, David, you\’ve heard me say it time and time again. And I feel with each passing hour or with each passing day of this craziness, it\’s so important to be educated, it\’s so important to spend time. And people have time, so it\’s very, very important to take advantage of the education.

David Bezar:
Yeah, absolutely. Good morning to you.

Joe Krause:
Good morning.

David Bezar:
Good morning to our audience. Yeah, it just keeps rolling on, it\’s an interesting time. Like you just said, it gives a lot of people a time of it\’s an uncomfortable rest, but this is a time to keep the mind sharp. We talk a lot about, especially when it comes to health and wealth, obviously, we\’ve got to do all the right things that we\’re being encouraged to do from a health perspective. It\’s really scary.

David Bezar:
I\’m not buying into the whole fear-mongering side of it. But again, if you\’ve got some time, you do a little bit of research, a little bit of reading, it\’s important to keep the social distancing, it\’s important not to go out right now. Collectively, as a country, we\’ve got to flatten out that curve, I think that\’s important. The second side is right now, people are worried. This week in the market has been another tumultuous week, and people are getting concerned. 401Ks are becoming 201Ks.

David Bezar:
We shared, last Saturday, we said we didn\’t think we saw the bottom yet, by any stretch of the imagination. Even as we sit here today on Saturday, I still don\’t think we\’re seeing the full impact of what\’s going to ultimately happen to the economy. Just the jobless claims going up, and companies shutting down. We just saw this week Boeing offered buyouts of their pensions, just so many different things that are happening, Joe.

David Bezar:
It\’s a good time, again, to take a deep breath, stay focused, and really get the information so you can make rational decisions versus emotional based decisions.

Joe Krause:
Yeah, and the one thing that I want to endorse, the one thing that I want to make sure we encourage listeners to do is to consider signing up to participate in one of the webinars. They are fantastic. I watched the webinar, the very first webinar. You watch it, Bret, from the comfort of your home. The information is priceless, it\’s valuable, it\’s real, it\’s relevant. All the information that you\’re covering, I can consume as a listener, or as somebody who\’s worried about their 401(k) becoming a 201(k). Very, very important, complimentary, and you can do it right from home.

Bret Elam:
Yeah, and you know what I\’m hearing from a lot of people, part of the Thrive Army, is they\’re calling the webinar a little bit of the best of, taking a bunch of what we\’ve been talking about over the past couple years related to the tax, and just really relating it to everything that\’s happened with the coronavirus. Just actionable items, and really just dialing in, of making sure that we\’re just making rational decisions.

Bret Elam:
Again, it\’s very emotional. Again, David just said, jobless claims doubled, over six plus million, again for this week. I\’m not sure when that\’s going to slow down. Again, we\’re encouraging people in the safety of their own home, they still get to see some great information from David and I on a weekly basis.

Joe Krause:
We\’re going to remind listeners, and I\’m going to let listeners who are watching or who rather who are listening to us on this radio show right now. You\’re going to see some messaging on television. You\’re going to see some messaging from Thrive Financial Services on some of the news talk networks like Fox News. And you\’re going to see information that we\’ll certainly provide today, but you\’re going to see a way for our listeners and for the television audience to be able to sign up for one of these complimentary webinars or and or the virtual ability to sit down, again, right from your own home. Karen, I know that you liked the virtual approach and you\’ve had some meaningful conversations with it.

Karen Bezar:
We have, definitely. I prefer, we prefer meeting people in person, but virtual approach is a next best thing. I have a question though. Dave keeps saying social distancing is 12 feet apart, that I have to stay 12 feet away from. Is that what you heard? Because that is not what I\’m hearing there.

Joe Krause:
Well, On one of my other radio programs, we literally had a roller-

Karen Bezar:
Oh no, yeah.

Joe Krause:
-and that we were measuring out and we didn\’t make David\’s litmus test. We didn\’t even make the six-foot roll.

Karen Bezar:
Interesting.

Joe Krause:
We had to actually expand the broadcast table to get to the six feet. I liked the 12, Dave, you\’re ahead of the curve, sir.

Karen Bezar:
And in all honesty, yes, in all honesty. There\’s so much doom and gloom out there and I get the anxiety. I feel so much anxiety, but got to keep a little sense of humor. I went to CVS the other day, my daughter and I, and there\’s tape in front of the cashiers and it actually said, “Hot lava.” To like say, “Listen, somebody has a sense of humor, but keep your distance. Just be mindful of everything.” Any comment from you?

David Bezar:
I\’d like to keep my mouth shut.

Joe Krause:
David, let me ask you one thing. I don\’t want to put you on the spot, but one question that you\’re getting right now from a new caller, somebody who\’s been listening to the show, they have never reached out. Perhaps they went to a workshop 6 months ago, 12 months ago. We\’ve had a few of those that have come and reached out. What\’s the first question that you\’re getting when you engage in a potential conversation with a client, or just a call or somebody calling?

David Bezar:
Yeah, and it\’s a great question, Joe. It\’s really this. It\’s like what should I do? It\’s not specific. And that\’s what\’s got me worried. Right? Again, I think there is this degree of almost paralysis by analysis, right? There is, like Karen said, there\’s just so much doom and gloom that I think people are still in a degree of shock, and shock is a lot of high anxiety and uncomfortableness, and things of that sort. Now, you might be listening and saying, “That\’s not my situation. I\’m just going to stay the course,” and I\’m not recommending against that by any stretch of the imagination, but things are definitely going to change, right?

David Bezar:
Companies that have been the leaders in the bull market era may not become the leaders in the future when we get through this. And again, a lot of people think this is going to turn very quickly. You got to take into effect all these companies, the downsizings, all of those types of situations are going to have… look, it happened before. This is already closed and it\’s being predicted to be significantly more severe than what we saw in the financial crisis of \’07-\’09. And Joe, I don\’t want to pat our team on the back here, but I\’m going to for a second.

David Bezar:
See, we didn\’t buy into this whole bull market. We\’re safe money strategists and we\’re geeky a little bit about monitoring and watch what\’s going on in the reality of what\’s happening. The pandemic was like a light, a match, right? That lit this woodpile that had tons of gasoline already on it. That\’s what\’s happened. It\’s exacerbated but it was going to happen, regardless. I mean, that\’s just the reality. They had the head of the FHA on yesterday, or maybe it was Thursday, I think it was on Thursday. They had the head of the FHA, Federal Housing Authority on CNBC and they asked him, “Is this going to be anything like the housing crisis of \’08, \’09?”

David Bezar:
And he said, “If we get back to a normalcy sometime in the next two months, we\’ll probably be okay. If it goes longer than that, there\’s a good chance that a housing crisis, a mortgage back security crisis, the one we had in \’07-‘09 will look very small compared to the one that could be pending.” Now again, I don\’t want to breed doom and gloom, but we\’ve been talking about this for close to a year, and preparing our clients. And that\’s we\’re getting a lot of calls, like you said, from people who visited with us once before but maybe didn\’t hire us or didn\’t take our advice and now saying, “I should have.”

David Bezar:
Anyway, in our next couple of segments, we\’ve got a lot of great information. So if people want to sign up for that webinar, they can go to thrivefinancialservices.tyl16lnm-liquidwebsites.com or call us at (800)-516-5861.

Joe Krause:
Well done. Well said, and stay with us as we get into the opening break here on Talk Radio 1210 WPHT, thrivefinancialservices.tyl16lnm-liquidwebsites.com. There\’s an incredible amount of information there for you. In addition, as David said, you can go there and get signed up for the webinar next week. The first webinar will, again, be on Tuesday night or every Tuesday and Thursday. We get to a commercial break back on the other side.

Joe Krause:
David, Karen and Bret will return after the break. And remember, if you want to connect or have a question, send a text to 267-870-8210.

Joe Krause:
And back here on Roadmap to Retirement, the radio show here on a Saturday morning and a shout out to all members of the Thrive Army who have religiously and continue to join us every Saturday morning for a live show or for a recorded show, but they come for the information. We know that and David, for all of those, what would you say for-

David Bezar:
Lazy bums. The lazy… we adore our 06:00 AM Radio one, rights?

Joe Krause:
Yes, we do.

David Bezar:
We appreciate you. We are so thankful that you get up with us in the morning, but we know you all have some friends that are those lazy morning, Saturday morning, they don\’t get up early. We decided that we were going to try to figure out a way to expand our audience and get this message out.

Joe Krause:
And we\’re going to accomplish that. Today I\’m going to let the audience know that we\’re adding an additional radio show on Saturday morning and we\’ll continue to update you over the next week with some additional details, but we are adding a second show. It\’s going to allow us to talk to those lazy bums or meet new people through the beautiful ability of just a referral from one of our Thrive listeners.

David Bezar:
Yeah. And I say that in just the lazy bums, but yeah, that\’s what I call my kids.

Bret Elam:
It\’s for anybody that works the night shift. [crosstalk 00:13:47]

Joe Krause:
Yes, good stuff. Karen, let\’s get into it. You are consistent, always. You have a list. I love a list. My wife loves the list. We start off this week\’s segment with you.

Karen Bezar:
I love my lists too, and it\’s right now it\’s the only thing that\’s getting me through, keeping my life in a sense of normalcy; getting up, making the bed, making our lists, knowing what we have to get done for the day. And hopefully, this is helpful to other people what I\’m going to talk about today. Here\’s a list of things when people come in that can help people out there that are listening to understand, are you financially prepared to retire? That\’s what we do, right? We help people financially prepare to retire, and prior to retiring, here\’s some things and things that we see when people come in that can cause retirement to derail.

Karen Bezar:
One of them, number one is having a high debt load depending on what your situation is, that something you want to consider in retirement, getting of your debt paid down? No retirement spending plan. Number two, number three, not-

Joe Krause:
By spending plan, you mean what? Monthly budget?

Karen Bezar:
Yup. And I\’ll go circle back to that in one second. Number three, not accounting for health expenses. Number four, banking on social security. Number five, no clear investment picture. Number six, are you supporting kids? Do you still have kids in college? Are you paying off all their school loans? And number eight, not considering extra expenses. I\’ll go back to number one, high debt load, that speaks for itself, if you\’re going into retirement, your goal is maybe pay down some of that debt so that you can have a budget that makes sense for your retirement plan.

Karen Bezar:
Number two, no retirement spending plan. That\’s really, really important. We do what\’s called, one of the reports that we do, we do four to five reports now. One of them we do is a stress analysis. And how we do that is we take a look at what your monthly expenses are going to be. You can\’t plan for retirement if you don\’t have an idea of what you need to live off every month. That\’s so important and so key. And you\’d be surprised that people do come in here and don\’t really have an idea. That\’s something that we work on. It\’s very, very important.

Bret Elam:
Krause, real quick, yesterday talking with somebody, going through the Thrive Retirement Roadmap, we\’ve met with them two or three times. They were clients getting ready to finally retire for the last two years, 2,700, 2,700, 2,700, 2,700, that\’s how much we need every month in retirement. Yesterday, now all of a sudden it\’s 5,200. You gotta be real to yourself, again, it\’s the number one thing.

Joe Krause:
And I think sometimes this might be you don\’t calculate expenses that are expenses. You don\’t add them into that. [crosstalk 00:16:53]

Bret Elam:
And this is the one time to not wing it, figure it out. Because if we only get one chance, don\’t give up your $100,000 job to go retire on something that is not real. Find a way.

David Bezar:
That should give some examples of that, because a lot of times it\’s-

Karen Bezar:
Things that people forget or-

Karen Bezar:
One thing is you have to account for your property taxes are always going to go up. Right? that\’s number one. Number two, something else that people forget is do you have grandchildren and you\’re going to have more grandchildren. You want to do things by them things. We say include your gifts, include travel expenses, include people that, “Oh, I don\’t have a car payment.” Yeah, but are you going to that same car for the next 10 to 20 years? I don\’t think so. Jokingly, I sat down with a couple and we were going over their budget, and they forgot food. You need food. It is surprising how much you spend on just day to day things that you don\’t even think about.

Joe Krause:
If you\’re in a home, you get into the summer months, you might have a landscaping bill that is part of it, or snow removal.

David Bezar:
Well, that\’s one of the things, Joe, it\’s a big point. And I know we\’re probably spent a little too much time on this, but this is critical, right? I mean, it\’s part of retirement income planning as we got to know what income you need, everybody needs to know that, like Karen said. Sometimes what people forget is those bills that don\’t get paid monthly, just like you said, right? It could be landscaping or many times I\’ve said, “Let\’s talk about your insurance. You all got everything included. Are your car insurance is in here?” “Oh no, no, I pay that annually,” right? I mean, no disrespect. I don\’t laugh it. I said, “Okay, I understand that because just logically it\’s not one of my monthly bills. I saved money for it.” What we do is we take that annual expense and just break it down monthly.

Karen Bezar:
Right. And also back to expenses, not accounting for healthcare expenses. Sometimes people come in, they\’re still working, they\’re not… We look at what your healthcare going to be in the future. People forget to account for a Medicare part B. Are you going to be a Medicare surcharge territory? What is your settlement plan going to look like? They forget that they\’re paying through work. Sometimes they\’re only paying $100 a month, $150 a month. That\’s not going to be the case when you\’re retired. That\’s something we include. And then there\’s always extra expenses.

Karen Bezar:
And I don\’t know about you Joe, but it seems that every month and in talking to people, I\’ll look at their expenses. I\’ve had people come in with these awesome spreadsheets. One month it\’s pretty much the same month after month, and then one month the bill is $3,000 more. Well, what happened there? We had to replace roofing, we had to replace air conditioning system. You really have to consider extra expenses. You don\’t know what\’s around the corner. It just seems like for us, the silliest things happen, and maybe somebody has a car accident, you got to pay that insurance deductible. You really need to build almost a cushion into your plan, for sure.

Joe Krause:
Yeah. As you\’re saying it and speaking about it, I\’m thinking about my buddy\’s text from a couple of weeks ago who was in the restaurant business, who\’s closed, and I think I shared it on the show a few weeks ago. He sent me a text. “Krause, it\’s amazing how quickly money goes out when nothing\’s coming in, how quickly it\’s gone, and there\’s nothing coming in to replenish what was there.” And that I guess in its simplest form is what retirement is. In some way, you have to account for money going out because you\’re not working to replenish those dollars.

Karen Bezar:
And that\’s so important and so key. Definitely, take a look at your budget, really go down to the ridiculous, and that\’s how you\’re going to plan for retirement. And then we take a look at your investments and what incomes are coming in, Social Security. There\’s so many different parts to this that I would urge you just to look at our website to start with, thrivefinancialservices.tyl16lnm-liquidwebsites.com. Come to one of the workshops virtually and meet us that way. But it\’s what people are going through now, you don\’t want to be caught into this situation when you\’re retired without a solid plan.

Joe Krause:
Well done and well said. I\’m going to use the last 30 seconds of this break before we get into the commercial break here on Talk Radio 1210 WPHT to encourage people to sign up for the webinar. The next webinar coming up is on Tuesday. The start time is 06-

David Bezar:
06:30.

Joe Krause:
-06:30. It\’s an hour and 15 minutes, give or take, a minute or two from the comfort of your home, from your desk, from your sofa, from your kitchen table with a coffee or a hot tea, a notepad, the ability to consume information in a very conversational way. It\’s an absolute must for you to do. It\’s complimentary. Please go to thrivefinancialservices.tyl16lnm-liquidwebsites.com and get registered for Tuesday and or Thursday of next week. We\’ll get to a commercial break. We\’re back on the other side.

Speaker 2:
Are you a member of the Thrive Army? If not, it\’s okay. You can still get a sample RMD tax report at no charge. All you have to do is go to thrivefinancialservices.tyl16lnm-liquidwebsites.com.

Joe Krause:
And back here again on a Saturday morning on Talk Radio 1210 WPHT. This is Roadmap to Retirement, the radio show along with David Bezar, Karen Bezar and Bret Elam. I\’m Joe Krause. Thanks again to all members of the Thrive Army for joining us. And Bret, I want to say thanks to all of those who have already attended one of the webinars. I want to say thank you to all of those people. It\’s been really unique and really cool to see the number of people that are watching and tuning in on the webinar.

Bret Elam:
We are learning to embrace technology, Krause. We\’re used to doing these 10 live workshops a month and everybody putting their hands up, and getting their responses. We figured out the chat bar on the right hand side and now we\’re taking polls. Like how well are we doing? Are you picking things up tonight? And what\’s great is 100% of the time that every question we\’re getting, “Yes, yes, yes”. What\’s nice is we give people the opportunity to say no, and we don\’t even know who it is that\’s in there as well. But we\’re getting yeses.

Bret Elam:
We know the message is coming across and we\’re getting good. And it\’s a little bit of new information, especially with I call it the cloudiness that\’s over everyone\’s head just related to everything. But Krause, you want to take a step back today because the stimulus package has been passed now and there\’s some things in here that our listening audience I believe should be well aware of. There\’s things out there for taxpayers, we should all be expecting to receive a $1,200 check for a single taxpayer, if you\’re married, a $2,400, income limits of $75,000 and $150,000 respectively for those checks.

Bret Elam:
You could also get some additional funds if you do have children now. We expect those checks should be out in the next couple of weeks, direct deposit. And those of you where they don\’t have your information, checks will be coming out directly to you. Another big one, listening audience, people that are on social security, you\’re going to get a little bit of a pay boost related to social security, Krause. But the one that we want to chat about and you know we\’re passionate about taxes, and we\’ve been talking about being as rational as you can be, is I\’m going to talk about some of the changes that are happening with IRAs, and this is a big one.

Bret Elam:
2020, there is an elimination of having to take a required minimum distribution. For the year of 2020, this is all part of the cares act, is that we are exempt from taking an RMD. Let me talk about part of what is in there and how it relates to some of what we talked about over the last couple of weeks, Krause. And I\’m just going to go a little bit of a Q&A. I got my little list here today, Krause, and it says, here\’s the first one. It says, because we got some business owners as clients that are saying, “Hey, what do you guys know about the stimulus package and stuff like that.” Here\’s the first one. “Can I take money from my IRA to help cope with the economic slowdown?”

Bret Elam:
The answer is, yes. Okay? Our listening audience should be a well aware, if you ever pull money from an IRA before the age of 59 and a half, you have to pay a 10% IRS penalty. Now, the things that I\’m going through right now are one-time things. Meaning, it\’s telling you how real this Coronavirus is, that the things that I\’m talking about here today are unprecedented, have never been allowed before. Some people listening here today are may want to take advantage of it, others are going to shove it aside like, “Ah, not a big deal to me.” But the things that the government has opened up are game changers and people want to understand what\’s available to them.

Bret Elam:
The first one is you have the ability to pull out up to $100,000 out of your IRA. And if you are under the age of 59 and a half, you avoid the 10% early withdrawal penalty. Okay? There\’s some restrictions that are come along with that. And the most important thing when we talk about a lot of the stimulus that\’s being rolled out right now is document, document, document, document, especially with what I\’m getting ready to share with you. But here\’s the thing, the provision is for people that have been affected by the coronavirus. You\’ve gotta love it when you hear stuff like that. That sounds like a very general statement.

Bret Elam:
I think everyone\’s been affected by the Coronavirus. It\’s whether you\’ve gotten sick, your spouse has gotten sick, one of you lost your job, maybe your business has been impacted. Again, in some kind of way, I think everyone\’s been impacted in one way, shape, or form. The most important thing though is you need to document how you\’ve been impacted and being able to pull that money out. Here\’s the next part about it. Again, different, it almost reminds me back to when Roth IRAs and Roth conversions happened a while ago and you\’re going to hear this why in just a second.

Bret Elam:
The next one is, “Can I put money back to avoid having to pay income taxes on money I don\’t use?” Let\’s say I pull out that $100,000. I avoid that 10% IRS penalty. Well, you just avoided the IRS penalty, the early withdrawal penalty. Remember, for pull money out of a 401(k) in IRA, you got to pay taxes. Okay, we\’ve got to pay tax. And so if we pulled out $100,000 and let\’s just say we\’re in the 22% bracket marginally, we would have to pay $22,000. But here is the big deal, of monies that are withdrawn from that IRA, $100,000, you\’re ready? The tax burden is spread out over three years. That\’s a big deal.

Bret Elam:
Our listening audience, normally, $100,000 you pull out, we have $22,000 this year, 2020, 2021 and 2022, you have the ability to equally make that tax burden in those payments. Okay? Additionally, and this is important as well, again, people have taken money out of their IRA and if you put money back into an IRA within a 60-day period, this is a normal role. The IRS recognizes as if what that withdrawal never happened and there\’s no taxation, circumstances that I\’m speaking about right here.

Bret Elam:
Additionally, you can return the cash to your IRA from this early withdrawal whenever you want over the next three years to avoid owing taxes. That\’s a big deal. The 60-day rule is gone. This is unprecedented. It\’s telling you the impact of what\’s happening to the economy. David just shared with you people from FHA, what they\’re saying to the housing market and another two months, 6.6 million people being laid off this week, and now people getting clarity on the stimulus package from a small business ownership standpoint.

Bret Elam:
Expectations are, we\’re going to see it yet again. Some people have been waiting, some people aren\’t even going to qualify. I don\’t think it\’s going to slow down anytime soon. It\’s understanding, everything I\’m going through, there\’s a reason that people are allowing for that.

Joe Krause:
I don\’t want to eat into your time, but-

Bret Elam:
It\’s okay Krause.

Joe Krause:
-just quickly. I can withdraw $100,000 out of my IRA. I can avoid the tax penalty, the 10% tax penalty-

Bret Elam:
If I\’m under 59 and a half.

Joe Krause:
-under 59 and a half. I can, over the course of the next three years, replenish then $100,000 back into my IRA and never have to pay or treat it as income. Is that right?

Bret Elam:
That\’s a on a pro rata basis. You got it. And so the next question becomes, what if I don\’t have an IRA? I have a 401(k) or a 403(k), rules are a little bit different, a little bit different. Because in an IRA, remember, you never have the ability, in an IRA, you never have the ability to take a loan against an IRA, okay? Can never take a loan against an IRA. Don\’t even try it. It\’s just not available. But if people that do have a 401(k) and you\’re still working, you still have the ability to take out a loan. Now, the maximum amount that you can pull out of a loan traditionally is $50,000, same thing. The limit is being increased to $100,000 okay?

Bret Elam:
They\’re doubling the amount of money that you can pull out in the form of a loan, but same circumstances, you also have the ability just like an IRA to just take a distribution, okay? To just take a distribution. If you take a loan, take a loan from a 401(k), you didn\’t take a distribution, you took a loan. There is no tax impact related to that. Okay. But if you take a distribution, like we spoke about with an IRA, Krause, you still have that same three-year time period to pay those taxes. Okay? That three years is a big deal, being able to stretch out that tax burden on an emergency basis of people that need money. Okay?

Joe Krause:
Would you suggest a preference one or the other, or it would depend on the individual circumstances?

Bret Elam:
This is what I\’d actually recommend is people to call 1-800-516-5861 or reach out to [email protected] Topics like this, we talk about during that webinar or if you just have more questions, reach out to us. These are the questions we\’re getting from people every day. And again, being educators-

Joe Krause:
That\’s new information-

Bret Elam:
-and advocators, oh my gosh.

Joe Krause:
That\’s new information for me right now.

Bret Elam:
It\’s brand new.

Joe Krause:
Like I had no idea any of this existed.

Bret Elam:
These words never came out of my mouth before. I mean, this is hot off the press, it\’s out there. And the biggest part, Krause, is and that\’s how I started, required minimum distributions are gone for the year of 2020. David, Karen, and myself, we always chat about the one bucket of money that you can never put into a Roth IRA is your required minimum distribution. And we have so many people as part of the Thrive Army that are already of age that they have to start taking required minimum distributions. Phenomenal news. You don\’t need to do it this year.

Bret Elam:
Again, if your stock is down and you\’re like, “Oh my gosh, I\’m not to pull money out of it,” you get a free pass. That doesn\’t mean don\’t do anything. Again, you can be a tax planner or a tax procrastinator. For us, it just makes it that much more important, makes it that much more impactful that people need to have these conversations about Roth, Roth, Roth. Again, the federal government just added 25% on top of the federal deficit. Taxes have to go up at some point in time down the road. We\’ve been echoing that forever. But now with just an additional 25% put on top, we know they\’re going to go up.

Bret Elam:
Again, be a tax planner, again, with all the emotion that\’s going on out there every single day. Again, reach out to us, 1-800-516-5861 or, again, Thrive, reach out to us on the website, thrivefinancialservices.tyl16lnm-liquidwebsites.com. Again, Thrive, T-H-R-I-V-E Again, sign up for one of our upcoming webinars or feel free to set up one of those complimentary sessions where we can get all your questions answered.

Joe Krause:
Let we hammer this home. I\’ve got one minute til the break. Quick scenario, you respond. “I lost a hunt, my IRA\’s down $150,000 as it sits. Should I even consider? I need money to live right now? Should I consider pulling $60,000 out of my IRA? And how is that going to impact me when I\’ve already lost on paper 150,000?”

Bret Elam:
The question is, should you consider the answer is yes. Should you do it? I don\’t know. And again, that\’s the importance of speaking with most importantly a fiduciary, not some of these people that are presenting doom and gloom that\’s out there, is speak with somebody who\’s going to look at that overall picture and given you the appropriate guidance.

Joe Krause:
Go to the thrivefinancialservices.tyl16lnm-liquidwebsites.com and register for the webinar coming up on either Tuesday or Thursday. A great, great segment, Bret. Great information. We\’ll get to a commercial break here on Talk Radio 1210 WPHT, one segment to go. David Bezar waiting for us on the other side, back in a moment.

Speaker 2:
We hope you\’re enjoying and learning from this week\’s radio show. And if there\’s an area that\’s important to you that you\’d like covered, send a text to (267) 870-8210. And remember, it\’s always complimentary and there\’s nothing for sale.

Joe Krause:
And welcome back everyone to Roadmap to Retirement radio show, as we come to you on Talk Radio 1210, WPHT. Thrive Financial services is there for you and for their clients. They\’ve made changes in terms of how the information can be consumed. And with that, David, I come to you following up with what was a great segment from Bret. Boy, the information is changing as quickly as the hour, as everything else is changing.

David Bezar:
Yeah. And these are experiences. Now, what Bret covered is all new because it\’s part of the stimulus package and it\’s the government\’s attempt to allay fears and re-spark the economy and all of that. But as someone who\’s been in this business now for 31 years, I\’ve seen these types of situations before. Maybe not with a pandemic attached to it, but some other type of a crisis. What I want to talk about is what happens when the stock market doesn\’t go the way that you want, especially the closer you get to retirement or if you already are in retirement. Because human nature as human nature and physics, right.

David Bezar:
The thing I remember from physics, a body at rest tends to stay at rest. A body in motion tends to stay in motion. What\’s that mean? How\’s that relate to humans? Well, how it relates to humans is we\’re creatures of habit. If we\’ve done something for 40 years, invest on a monthly basis, dollar cost average in, defer our money till retirement. When it comes to retirement, it\’s a big shift. Like you said earlier in the show, Joe, you said like my buddy, it\’s amazing how fast money goes out when you don\’t have money coming in, that\’s no different than retirement, right?

David Bezar:
Social security, if you\’re lucky, you got a pension and the remaining bucket is you\’ve got to rely on those investments. And if those investments don\’t stay intact during your retirement and you ultimately only get left with social security or, and maybe hopefully a pension, that could adjust the way lifestyle goes. I want to just give some history. I actually pulled up a presentation that we used to do four or five years ago, and it talks about the best days and the worst days in the stock market. It\’s a little bit outdated but it\’s got some relevance to it.

David Bezar:
It\’s looking at a 20-year period, January of 1994 through December of 2013. That is there are 5,037 days when the market was open during that period of time, right? I mean, you could have made investments. If we took $10,000 and we put it into the S&P 500, and it was invested all 5,037 days, the annualized return you would have received is 9.22%. And your $10,000 investment over that period of time would have grown to $58,000. Now, if you missed, listen to this, if you missed just the top five days where they had the highest gains-

Joe Krause:
Out of 5,000?

David Bezar:
Out of 5,000 right? The top 5 days of the 5,037, your return would have been reduced from 9.22% to 7%. Instead of 58,000, it\’d be $38,000. If you miss the top 10 biggest days in the stock market, your returns reduced to 5.5% or $29,000 on your $10,000. If you miss the top 20 days, 3.02%, and if you miss the top 40 days, your return goes to -1%. Your $10,000 didn\’t grow, it actually lost. You\’d have $8,149. People ask, “Do I take money in? Do I take money out? What should I do? How do I do this?” Right there just shows you out of 5,000 plus days, if you miss the top 40 days, that S&P return that went from 9.22% annualized goes down to a -1.02%. That\’s pretty impactful, right?

Joe Krause:
That\’s impactful.

David Bezar:
Yeah. And that\’s again, people don\’t realize we get… again, we buy into what we\’re told, right? I want to illustrate for you very quickly and try, if you\’re in our listening audience, try to relate this to exactly what\’s happening today. Better or worse, same or different. In the 2007 through 2009 recession, they call it The Great Financial Crisis, the Dow Jones, the drop that the Dow Jones had was more painful than any other recession in the previous past. It fell by more than 50% and it took 17 months for that to happen. The Dow came down 50%, the S&P came down 53.5% during that same period of time, but it took 17 months.

David Bezar:
Now the percentage was less than the 80% drop during the great depression, but that loss took over three years from the high to the low, took over three years. Now, I\’m going to give you the quick narrative. On October 9th of 2007, the Dow closed at its prerecession all time high of 14,164 points. The Dow started declining gradually after the failure of Bear Stearns in April of 2008 and a negative GDP report in Q2 of 2008, the Dow dropped from 14,001 64 to 11,000. Now, many analysts felt that that 20% decline was the market bottom.

David Bezar:
How many people today are on CNBC where we\’ve experienced so far, a 25% decline from the highs are already telling people we\’ve gotten to a bottom and they should be rushing back in. Don\’t miss out. Now, however, on Monday, September 15, 2008, Lehman Brothers declared bankruptcy. On Wednesday, panicky bankers withdrew $144 billion from money market funds, nearly causing a collapse in the money market. In response, the Dow plummeted an additional 13% in October and by November, it fell down from an unmarriageable high of 14,000 to 7,552 which was a new low.

David Bezar:
This was not yet the true market bottom. The Dow climbed back up to 9,000 and then on January 2nd of 2009, it dropped all the way down to 6,594. I hope that illustrates that people really need to be thinking about what they\’re doing.

Joe Krause:
That\’s heavy stuff, David.

David Bezar:
Right? All right, so now could that repeat? Could it be worse? Could it be better? We don\’t have that crystal ball, but we certainly have to make the considerations. One of the by-products of what I just shared, so we know a little bit about history, is we got record unemployment because of that recession. We\’re going to beat that record through this particular recession that we\’re about to go. A lot of people are going to have questions, Joe, and we actually have put together a review called the Forced to Retire Review, the Forced to Retire Review.

David Bezar:
What questions should you be asking and would you want to come in and visit with us by going to our website? Thrivefinancialservices.com or calling us at (800) 516-5861. Here\’s the questions that we\’ll answer during that review for you, and again, that could be done virtually. Do I need to find another job? Big question, right? Should I collect unemployment? What can I do about health insurance? Should I start my social security now instead of waiting like I originally thought? What should I do about my pension if I happen to have a pension? Should I take the annuity or should I take the lump sum distribution?

David Bezar:
If I have a 401(k) at this employer that I just got forced to retire from, it\’s a nice way of saying got laid off, should I leave it with that employer or should I roll it over to a self-directed IRA? And then the last question is, should I change my portfolio around, right? While I\’m not making new contributions because I\’m laid off, should I be shifting the asset allocation of my existing portfolio? Joe, would you assess that it\’s probably the big questions that most people have if they find themselves now unemployed?

Joe Krause:
Do we have time for you to give the list again?

David Bezar:
We\’ll post it up on our website, we\’ll do that, [crosstalk 00:43:35]

Joe Krause:
It\’s a great list.

David Bezar:
It\’d just be a whole lot easier. Give us a call. (800) 516-5861 or go to our website and you can register for a virtual Forced to Retire review, right? We could spend, it could be a short call, 15 minutes, or it can be an hour call. It depends on you and what questions, and what assistance you need. Now, for a lot of people who are self-directed and find themselves in a position that they\’re now unemployed, it really might be the right time in life to get these types of questions answered correctly, to start working with a financial advisor.

David Bezar:
Here\’s the last question. How do you find the right financial advisor to work with? We think there\’s five criteria and it doesn\’t have to be Thrive Financial Services, but if you\’re going to look for a financial advisor, here\’s the five things. Number one, that they are completely independent. Independence in the financial planning space where they\’re not influenced by some big company on what solutions to recommend. People who work in an independent space much better for your future retirement.

David Bezar:
Number two, there\’s got to be chemistry. Number three, there\’s got to be empathy, right? They got to been in this business long enough to understand what you\’re going through because they know they\’ve seen the different declines in the markets like we\’re seeing today. They got to have adequate staffing, is number four, right? They got a team. It can\’t be one person, God forbid, that person gets Coronavirus and isn\’t around for a while, right? You need to staff. And lastly, they need to be a fiduciary. They got to act in your best interest.

David Bezar:
If you\’re in that unfortunate situation where you have been forced to retire and you\’re in a little bit of anxiety or panic, and you want to get the Force to Retire review, give us a call, (800) 516-5861 or go to our website.

Joe Krause:
Really good stuff today on the program, full disclosure to the listening audience. I did turn over the timing of that segment to Karen. Nice job, Karen. Thanks for the proper time cue. One last time, go to Thrivefinancialservices.com, Forced to Retire review. Really, really good stuff. That\’s going to do it on this Saturday morning. On behalf of David Bezar, Karen Bezar and Bret Elam. I\’m Joe Krause. We\’ll see you on the webinar on Tuesday night.

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