Speaker:
The Thrive team has been recognized by Suburban Life Magazine and Philadelphia Magazine as one of the area’s top wealth management firms. They’ve been featured in numerous publications such as The Wall Street Journal, CBS News, FOX, NBC, and ABC as well. But their greatest accomplishment yet is their ability to talk to people just like you about living out their dreams in retirement. Their phone is always open at 800-516-5861 or visit thrivefinancialservices.com. Now, here’s David, Karen, and Bret along with Joe Krause.

Joe Krause:
And good day everyone. Welcome to Roadmap to Retirement the radio show. You, meaning the listening audience have an unwelcome surprise waiting for you when you get to retirement. It’s called required minimum distributions or RMDs. When you reach a certain age the IRS forces you to withdraw money from your IRA, 401k, or other tax-deferred retirement accounts. They force you to sell investments and withdraw this money and this could trigger a series of unforeseen financial consequences.

Joe Krause:
Plus there were changes from the Secure Act that you need to know about. Good morning everyone or good Saturday everyone, this is Roadmap to Retirement the radio show along with David Bezar, Karen Bezar, and Bret Elam. I’m Joe Krause. We begin the show today with Karen Bezar. RMDs Karen. We’re going to focus on that conversation, that acronym for the entire show today.

Karen Bezar:
Thanks Joe. So one of the things that people are very, not very, sometimes people are confused about RMDs, again required minimum distributions and that’s one of the questions they have for us when they come in for the complimentary analysis that we offer. So I’m going to kind of backtrack a little bit and give you the nuts and bolts of RMDs.

Karen Bezar:
When you’re working and your younger and you’re saving for retirement you kind of understand that at some point you’re going to have to pay taxes on the money that your squirreling away for a rainy day. So what is a required minimum distribution? A required minimum distribution is an amount that the tax laws require you to take out of a certain type of retirement account once you reach a certain age. If you have a traditional IRA or a 401k account or any of the several other types of employer-sponsored retirement plans, then you’ll generally have to start taking RMDs once the law says you have to.

Karen Bezar:
And right now you have to start taking it out when you reach 72 and I’ll go in a little bit more detail about that. But remember the reason that RMDs exist is that you haven’t paid taxes on that money for years and years and years. So now your partner, the IRS is saying time to pay and they need their money. So RMDs aren’t easy and sometimes they’re misunderstood. You can’t ignore them and the key is to address early. That’s what we concentrate on.

Karen Bezar:
So you can get in front of the potential problem because you could end up paying a lot more in taxes than you thought. So you have to come up with a strategy before you reach that age and that’s something that we help our clients and we can also offer you that information if you come in for a complimentary analysis. So what accounts are subject to RMDs? You have traditional IRAs, you have rollover IRAs, there is inherited IRAs. There is SEP-IRAs, there’s 401k, 403bs, 457bs. So other than Roth IRAs which aren’t subject to require minimum distributions normally if it’s yours. If you inherit the account sometimes there are RMDs, again there’s confusion out there.

Karen Bezar:
So if you are curious about that, that’s something that we can certainly help you out with. So when you need to take your RMD, you have to take your first RMD no later than April 1st of the year after you turn 72. Remember it used to be 70 and a half, we have run into people and they are not aware of the fact that it’s 72 now, it used to be 70 and a half. So that’s something very important to understand and how much do you have to withdraw? This is another area where people are very confused. The good news is most of the time the companies that you have your tax-deferred account with will send you a letter once the end of the year prior to you turning age 72 begins, they will send you a letter telling you what amount you need to take.

Karen Bezar:
So you normally don’t have to figure this all out. Where it becomes confusing for some people is you may have started a job when you were 25, right? Then you may have started a job, you didn’t like that job so you went to another job. So you have IRAs kind of all over the place. You can have two, you can have 10. So sometimes confusion can come from do I have to take it from each separate account? Can I take it all from one account? And we say the answer is maybe. It depends on the tax account itself.

Karen Bezar:
Traditional IRAs may differ from a 401k but that’s information that we understand, again if you have questions about that, that’s something that we could clear up for you. So again as a reminder, it’s 72 now, not 70 and a half. I’m going to go a little bit into how you calculate it but not a lot because it’s confusing. There is a website, if you can find on the IRS there’s actually a website you can go onto that will give you the table of the factors that you have to divide the balance by. So when you calculate your required minimum distribution for any given year it’s always based on the account’s balance as of December 31st of the previous year.

Karen Bezar:
So what you have to do is find the distribution factor listed on a calculation table that corresponds to your age on your birthday of the current year. For most people, the factor is 27.4 to 1.9 so I’m kind of going to give you an example here. So here’s an example, I’m going to say Bob for a lack of a better name who is an account holder and he’s 74 years old and his birthday is October 1st. So April is nearing and Bob’s IRA is worth now $225 but the balance was $205,000 on December 31st of the previous year.

Karen Bezar:
So the distribution factor on the IRS table for his age would be at age 75. The distribution factor is 22.9, so what he does is he takes $205,000 divides it by 22.9 and it gives him $8951.97. You have to take that amount out. If you don’t take the full amount out you will not only have to pay taxes on that money but you have to also pay a penalty. Again it’s a 50% penalty for the amount of money that you did not take. So if you were supposed to take $8000 and you took out $4000 your penalty would be $2000 which is crazy and you really need to understand these rules because you can confuse yourself.

David Bezar:
Joe, do you have a headache?

Joe Krause:
That was wow.

Karen Bezar:
So that’s why I didn’t go into too much detail.

David Bezar:
Right?

Joe Krause:
Yeah I mean I was going to stop Karen and ask her because I know that if you were 70 and a half before the end of 2019 that was different from the Secure Act. So just even that I was trying to process in my mind as Karen was speaking.

David Bezar:
Yeah, there’s tons of changes, tons of calculations and then if you have multiple accounts at different custodians that’s really where the challenges come in because a lot of people think it’s simple and just listening to Karen you can see the complexity involved in that.

Joe Krause:
Yeah, no doubt.

Karen Bezar:
And we make it simple and we’re always here to guide our clients. And just to throw one more thing in there, just remember because of this whole COVID-19 situation, RMDs have been suspended for this year, so we’ll just throw another thing into the mix there. And that’s based on the CARES Act. So if I asked you how much money you’ve saved for retirement you probably know the answer off the top of your head right? But I ask you how much you’ll pay in taxes on that money when you retire, most people can’t even come up with a ballpark figure and that’s dangerous.

Karen Bezar:
Learn how some defensive tax planning strategies could help you dramatically reduce your taxes in retirement with our retirement tax analysis. This analysis will show you the defensive tax planning strategies that could save you hundreds of thousands of dollars with your IRA, 401k, things of that nature. Now some advisors charge thousands of dollars for this analysis but we’re going to underwrite 100% of the cost just for the listeners who call us today. But promise me one thing, you are seriously interested in how you could save a bunch of taxes in retirement.

Karen Bezar:
Call us and leave a message now. 215-987-2430. Again give us a call at 215-987-2430. Our calendars do fill up quickly we only have a limited number of spots 215-987-2430.

Joe Krause:
Good stuff from Karen to open the show here on Roadmap to Retirement the radio show. We’ll get to a commercial break. When we come back, perhaps a quick question. If my RMDs are suspended does that mean I have to take double next year? How does that apply? How do taxes factor into that? Stay with us as we roll along here on Talk Radio 1210 WPHT, back in a moment.

Joe Krause:
Back here on Roadmap to Retirement the radio show. Thank you so much for tuning in and listening to the show. Three letters that could trigger an avalanche of unexpected taxes and every year the tax bill could get bigger and bigger. Even if you don’t need the money Bret there’s an issue or there’s a concern you need to know about it. Welcome back everyone to Roadmap to Retirement the radio show.

Bret Elam:
Thanks, Krause.

Joe Krause:
Hey nice, your welcome sir.

Bret Elam:
Yeah so when I hear the three letters RMD it’s tax, tax, tax and you just asked a great question going into the break last time and the good news is, everyone that is going to have their RMD waived again because of the CARES act they don’t have to take it this year, you do not have to take both next year. So I just wanted to make sure we didn’t leave that hanging out there. But again when we talk about RMDs the problem with that is that it leads to I call it a mountain, it’s a gigantic amount of taxes.

Bret Elam:
The ticking tax bomb if you will. Again I heard it recently that said, “Tax-deferred accounts is like a sleeping tax bear and all of a sudden wakes up in our 70s and growls loudly.” So when we talk about a bear we could be talking about the tax bear or you’re talking about the bear that’s happening in the market, remember what’s happened this week we saw a big six percent drop in the market just simply on Thursday Krause. Again things are starting to move all over the place, but here’s the problem. Conventional wisdom says, “Don’t pay any taxes, don’t pay any taxes, put the money in a savings account.”

Bret Elam:
In fact, now Krause the government even made a rule you start working for a company they automatically put you into a 401k plan and the problem is it’s the traditional 401k plan because the thought process is hey, you know what? You’re going to spend less money in retirement. Put the money away into your IRA 401k today because you’re going to spend less money, you’re going to pay less money in taxes into the future. So here’s a question for you Krause all right? You’re working, you’re a family man, you’ve got a lot of people in the family there Krause. So let me ask you a question Joe, what day of the week does your family spend the most amount of money?

Joe Krause:
Boy, that’s a challenging question. My initial thought was going to say Saturday because of the weekend.

Bret Elam:
That’s it.

Joe Krause:
Oh, it is.

Bret Elam:
Don’t overthink it. Friday night and probably Saturday. We hear that all of the time. But think about this, what happens in retirement? Every day is Friday and Saturday. So whoever came up with this thought pattern that we’re going to spend less money in retirement, it’s to going to happen. We see it all the time and then we start talking about the tax bill going up that’s going to be on top of that, and where do a lot of those taxes come from? Required minimum distributions where taxes again ends up becoming almost the biggest budget item that people have to face.

Bret Elam:
So again we need to be conscious of again that ticking tax bomb as Karen said that is going to come at age 72. And again when you start understanding some of the concepts when you start talking about, and again some of these tricky words that people use on TV. Marginal rates, effective rates when we start talking about taxes but here you go, for taxpayers older than 72-years-old that have to start taking money out of those required minimum distribution accounts Krause, are you ready for this? 55% effective marginal tax rates taking a hit in the future and people are like, “What are you even talking about? The highest tax rate that I look at the tax code is 37%, how are you even talking about 55%?”

Bret Elam:
And it’s understanding this concept called effective marginal tax rates. We see it all the time and its people that are not disciplined, not having a plan. And the most important plan of all that we’ve been talking about over the recent year since we’ve been on this show Krause is that income plan. Again you can have all the assets in the world but if we don’t have a distribution strategy of how we’re going to go pull all of that money out we could end up blowing it up because we’re not disciplined in coming up, we’re just winging it. “Oh, I retired, I’m just going to pull some from here and some from there.”

Bret Elam:
Again that’s not disciplined, that’s not a plan, we’re just winging it at the end of the day and it yields to so much inefficiency all day long. Here’s some of the solutions. I love our loyal listeners that have been calling in from the show and they’re like, “We’ve been listening to you for years. We’ve been trying to do these Roth conversions, we understand taxes are our problem.” Here’s the problem, it’s hard to put them all together. I appreciate the effort, I’d love the message and the delivery and the feedback that we’re getting from our loyal listeners that are out there.

Bret Elam:
That’s why we offer these consultations. Because it’s hard to put them together. I know the amount of time that David, Karen, and I trained just our team here at Thrive to make sure that we’re putting those plans together and these are people that are just in this industry and we have people that are all over the place. And here’s the biggest one Krause especially when we see people trying to convert and/or spend money from the IRA where it’s not technically called an RMD in their 60s where people think they’ve figured it out.

Bret Elam:
They’re like “Oh Bret I’m looking at the tax sheet and the joint taxpayer up to $107,000 I’m taking out 12%.” Yeah, but are you collecting social security yet? And I’m telling you 80% of the time the answer is yes. I go, “Well if you’re taking money out of your IRA and collecting social security at the same time you’re not at the 12% tax bracket. That’s where this concept of effective marginal tax rates come in. These are such an important term that we educate our listening audience, people that come to our workshops day in and day out because it’s hard to navigate. You see my fingers there, what’s it about, three or four inches thick of what is that IRS code.

Bret Elam:
Because we’ve talked about it in recent shows and what’s the problem that we also face Krause? Is conventional wisdom, defer, defer, defer, defer out to age 72 but yet the governments printing, printing and I think every show that goes by they print and print more money. I mean it’s crazy and we’re not talking about stimulus round two, another $1200 per taxpayer, is that going to happen? I don’t know but if they’re printing money it means taxes are going to go up in the future. Which means what? We’ve got to have that distribution plan for those IRAs, those RMDs.

Bret Elam:
And again we said it, when do most people spend the most amount of money? Friday and Saturday and in retirement every day is Friday and Saturday and a lot of the publications, a lot of what we’re reading out there today is because everything that’s going on today, everything that’s going on today. Again people out of work are going to start stressing the social security system, the Medicare system. All the printing of money has to yield higher taxes at some point in time in the future.

Bret Elam:
So what do people understand? The most successful people that we see that navigate this and something that we’re so passionate about Krause is the difference and if you’re a loyal listener of the show you know I love this term, the difference between a tax planner and a tax procrastinator and that’s it. It’s coming up with that strategy and here’s why that strategy is so important. It’s because conventional wisdom says do not touch it, do not touch it, do not touch it, do not touch it.

Bret Elam:
But then we just created that uncertainty of what the government… Remember? These RMDs essentially just mean we have a profit-sharing plan with the government. Remember every dollar Karen talked about, all the different accounts that we have to pull money out at the age of 72 but Uncle Sam, the IRS is your partner in every single one of those plans who dictates what percentage of the profits they keep, how and they control it. They change the tax rate. The second lowest tax rate in the United States history and I’m hearing people, what Karen said, no RMDs this year. “Oh, I don’t have to do anything.”

Bret Elam:
No, you’re missing the opportunity. RMDs it’s the bomb, we’ve got to have a plan. Do not lose the opportunity especially when we saw the V, the market went down, the market came back up, I don’t have to do anything. You need to realize there’s a reason why the CARES Act said do not take money out of your RMD because if you pull money out of it at the same time it’s going down it’s one of the most devastating things that could happen. But fortunately, the market came back up. So it’s all about that opportunity and finding that time of when to act on things.

Bret Elam:
Again, the most important thing in the concept that we talk about all the time, Krause so passionate about it is forward tax planning. And forward tax planning with those ticking tax bombs is where it’s most important. Where the government mandates, forces our hand of when we’re going to spend what when those are the things that are staring at us right in the face that we think we have control of those assets but we don’t have a much control as we think. Again things like the Secure Act and everything that we’ve talked about in recent months that’s taking a lot of that control away.

Bret Elam:
Because what do most people do Krause? They get to April, they go find their accountant, go find their CPA, give them their 1099s and say, “Let’s do our taxes.” That’s history. There’s nothing you can do.

Joe Krause:
That’s what everybody does.

Bret Elam:
Everybody. Everybody. And that’s why we’re so passionate. What’s great about it, we’re sitting here in early mid-June. We have six more months. The opportunity’s here that we can start putting some of those puzzle pieces together. The timing is perfect because a lot of people missed the opportunity. It went down, again late March, March 20th ish, we hit the bottom in the market and it came roaring back up. Now before this week, we were just off of that all-time high. But now all of a sudden we’re starting to see that slip again with what happened again this week.

Bret Elam:
Again we need to be prepared for it. So Krause, I always ask this question. Here’s one someone I met with last week, what would you do with an extra $368,465? That’s how much a local Delaware Valley couple could save in taxes in their IRA and 401k with our defensive tax planning strategies. An extra $368,000 could go a long way in retirement. Do you have an IRA, a 401k? Learn exactly how much money you could save with our free retirement tax analysis. This free analysis can be done in person, over the phone, or video conference and takes no time at all.

Bret Elam:
This analysis will show you those defensive tax planning strategies that we’ve been talking about. You could save tens of thousands of not hundreds of thousands of dollars in taxes with those IRAs, 401ks, pension all of those tax-deferred accounts. Now you might expect to pay thousands of dollars for this customized tax analysis but great news, we’re going to underwrite 100% of those costs for our listeners that call us today. So the strategies we use are best served for our listeners that have saved more than a quarter-million dollars. But there could be even more tax savings if you have seven figures saved or more.

Bret Elam:
Now to schedule that free analysis call us now at 215-987-2430. Again learn exactly how much money you could save in taxes with your tax-deferred retirement accounts again by calling 215-987-2430. Again 215-987-2430.

Joe Krause:
As we go into the commercial break I’m just glad I got the answer to the question right. I feel good about getting the right answer.

Karen Bezar:
You came to the right place, Joe.

Joe Krause:
I got a right answer today which was very good. One other thing you mentioned Bret as we go to the commercial break, you talked about withdrawal being financially devastating during a bear market when you’re forced to take an RMD distribution in retirement. Learn details about that when we come back.

Speaker 7:
So 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 thrivefinacialservices.com.

Joe Krause:
And back here on Roadmap to Retirement the radio show. Thank you so much for listening. I do want to point out to the listening audience you can still schedule for a complimentary webinar, just go to thrivefinancialservices.com. There’s three opportunities now if you’re listening today in the morning there’s one coming up at 11:00 this morning. If you’re listening Saturday afternoon on this show you can get registered for the one coming up on Tuesday, either way, you can catch a triple shot of Thrive Financial Services and spend 65 minutes David of really, really good stuff and I’m quite sure that RMDs are part of the webinar.

David Bezar:
Absolutely, all the time. Yeah, all the time.

Karen Bezar:
Yes and I don’t know if we’ve peppered this in with Bret’s segment but RMDs actually go up each year you get older which some people are surprised and I don’t know if we’ve added that in but that’s also something that again your tax bill’s going to go up. You’re going to take more and more and more out of your account.

Joe Krause:
The answer is no we didn’t and I didn’t know that, so thank you for pointing that out.

Karen Bezar:
There you go. Every time you meet with us you get smarter and smarter Joe. I don’t know.

David Bezar:
Well about finances.

Joe Krause:
Yes.

David Bezar:
You’re already way up on the smart scale related to everything else.

Karen Bezar:
If we ask your wife she’ll tell us the same thing I’m sure. When we meet somebody for the first time we like to educate people that’s our goal and we try to kind of start gauging their risk tolerance. So one of the questions I ask if it’s an individual or a couple is I ask them how they feel about market corrections. The answer I get a lot of time prior to retirement is so I would say 50/50. Sometimes people are so concerned about it and then other times they’re like, “Oh the market goes up and the market goes down but we always seem to regain what we lost.”

Karen Bezar:
And that’s true because while your working and you’re still putting money into your tax retirement accounts even though there’s a market loss you still get to gain money and you’re putting money in. But where it can be financially devastating is when you have to take that required minimum distribution in a bear market. And what happens is your forced to sell your investments and withdraw money from your retirement accounts whether you want to or not and you’ll never get this money back again because you’re not filling up the hole.

Karen Bezar:
You’re taking money out and if the market keeps going down you really have no recourse so it basically forces you to lock in your losses whether you like it or not and you’re never getting this money back. And now more than ever people are aware of this because of this crazy up and down with the market you definitely want to understand that you do have to prepare for this type of problem in retirement.

Bret Elam:
And Karen just said it there Krause. I mean it’s why the CARES Act did what they did in waiving it because Karen just said it, how devastating it can be pulling money out at the same time that the market is going down. So what Karen was starting to talk about and something I want to hone in on is something called the sequence of returns risk and you know what Krause, you just asked another question I’ll answer it too. We talked about how much you have to pull out more money each year. For our listening audience, you have a million-dollar IRA, this really will put it into fruition.

Bret Elam:
At the age of 72, you need to pull out $39,000 from a required minimum distribution. That same million-dollar balance at the age of 85 whether you need the money or not, $75,000. That’s a big difference. Every year you’ve got to pull out more and more and more. And where does that become important? It’s because the risk that people face, a lot of time for the first time in their life that they’ve never even had to think about while they were working is this thing called sequence of returns risk and let me read what is sequence of returns risk.

Bret Elam:
It is the risk of retiring during a downturn in the stock market and if the stock market is falling during the first few years of your retirement the combination of the stock market losses and the need to withdraw money to pay for your retirement literally can decimate that nest egg. We share during our webinar it’s a great story I invite people to tune into it. We share the story of two people, one retiring two years earlier than the other and again we have no idea. How about our listening audience that are getting ready to retire right now? Nobody saw it coming of it collapsing right in front of us.

Bret Elam:
Now it’s come back up but again a lot of signals are showing it’s going to get crushed again. We need to be prepared for it. Again that’s falling into the wrong time period of when we’re going to retire and again it could yield to a lot people are saying you could have even two-thirds less by simply retiring at the wrong time and what do we don’t know? We don’t know if the market’s going to return in the year or the two years or the three years that we’re going to retire.

Bret Elam:
There’s ways to combat that though and the most important thing, and David’s going to talk about it here in just a moment but there’s ways to combat that sequence of returns all about being disciplined. Again if you’re pulling money out as the market’s going down think of it like sequence of returns risk here’s a great concept for our listening audience. If you ever heard of dollar-cost averaging, what I’m speaking about is almost reverse dollar-cost averaging where now the risk is working against us where it becomes a positive while we’re working putting money away no matter what the market conditions are, now we’re taking money out no matter what the conditions are. Now all of a sudden the risk falls off of us where we don’t have the buckets allocated necessarily correctly.

David Bezar:
Yeah and that’s, you know what it comes down to is the proper diversification proper rebalancing of a portfolio. A lot of people just listen to headlines right? So we hear the word rebalance or we hear diversification and we may do that once like it’s real simple. With the market volatility that we see people hear the word passive investing especially if you’re a do it yourselfer. So we take that word passive and we utilize that almost permanently and what gets lost in that translation which is one of the key elements of successful investing is the idea of proper diversification and proper rebalancing. I actually call it the blindside.

David Bezar:
Let me explain what I mean by that. So the first check that investors write when allocating their portfolio is it’s the objective of total return. But the second check mark is for protecting against downside risk. So while total returns Joe are the things that get the most fanfare and attention the job of managing risk is to protect the portfolio from what investors can’t see coming. The blindside.

David Bezar:
So if you go back to the movie, that was the whole thing. Watch your blindside. We’ve all seen it right? Now we’re hoping we get to see it soon again, you know watching football but the one that gets the most reaction from the fan base is when a quarterback gets completely annihilated from the blindside. That’s the one that we, like that visceral emotion, it’s like oh my God right?

David Bezar:
So that’s what investors forget about is with all this volatility there’s no way that if you are not actively rebalancing, now that maybe once a year, maybe twice a year or it maybe every quarter, it really depends upon your portfolio and your approach. But if you just set your portfolio, you set it and forget it, with all of this volatility eventually it’s not going to be balanced to the way that you originally diversified that portfolio. So when that next set of events occur you may be out of balance where your exposure is just completely out of whack.

David Bezar:
And again that’s not in the short term. Thrive is not about short term as a matter of fact. So here’s how Thrive operates, we have a company called Thrive Capital Management. That is a registered investment advisory fiduciary company. Inside of Thrive we have an investment committee and that investment committee is composed of people with amazing experience. There’s a designation called a certified financial advisor, it’s the most respected designation, it’s the highest designation you can get from and investment management perspective.

David Bezar:
We have certified financial planners in the investment committee and then we have collectively I would say we probably have 200 years of investing experience within that committee. So what we do for our clients is we actively rebalance. We actively swap out… I’ll give you a perfect example Joe. We just reviewed one of our model portfolios and this was a dividend-paying stock portfolio. Well with the collapse of the oil market a lot of oil companies have stopped paying their dividend.

David Bezar:
Well if you’re investing in a dividend performing portfolio and you still have a stock in there that’s no longer paying dividends does it make any sense to keep that stock in there? So the committee got together, we reviewed and we swapped out that stock for our clients with something that was paying a much higher dividend. So we’re passive in the sense that we look at things and when it makes appropriate sense we make adjustments. And then based on our client’s wishes and direction we’ll rebalance those portfolios again whether it’s quarterly, semi-annual or annual.

David Bezar:
Those types of activities prevent the blindside from occurring and I would ask our listening audience that if you just look at the past six months if you’ve not received a phone call from your financial advisor talking to you about what I just shared giving suggestions, instead you’re just getting, “Just stay the course, everything will be fine.” That’s scary. Number one that’s not acting as a fiduciary. Number two it’s just really scary. Right? Because you could be owning something that’s really out of whack.

David Bezar:
So I would really, really encourage our listening audience, one of the tools that we use as a portfolio analysis tool where we can assess the risk of your portfolio, we can design and help you understand what that rebalancing should be. We could take a look at your existing portfolio and tell you what you may want to consider swapping out. The easiest way to do that is just give us a call at 215-987-2430. Schedule a 15-minute phone call, we’ll talk about it and if you want to take it further and get that analysis done we’re happy to do that with you.

Joe Krause:
Boy, I hope the listening audience zeroed in on that part of the conversation just to understand the depth and scope of what you get when you partner with Thrive Financial. It’s amazing. As an individual, we don’t know that but that’s who should be taking the pressure off of us to make those decisions. Well done, well said and I didn’t mean to run on there, we’ll get to a commercial break here on Roadmap to Retirement the radio show back in a moment.

Joe Krause:
And back here on Roadmap to Retirement with David Bezar, Karen Bezar, and Bret Elam. Don’t forget to go to thrivefinancialservices.com if you want to sign up for one of the virtual webinars there are three to choose for you they’re convenient, they’re very informative, they’re 65 minutes and you’ll learn a lot when you come out of that webinar. Just like you learn a lot when you come out of that radio show and I never stop learning.

Joe Krause:
I learned a lot about Thrive Financial Services in the last four minutes. I’ve been coming here for 22 months. I didn’t realize the depth or the scope of what’s available for people that become partners and clients with Thrive Financial. Very impressive.

David Bezar:
Yeah, thanks, Joe and I hope again, you know our goal as a company is constantly delivering great educational information. Really helping people by acting advocately for them. Making sure they understand what’s ahead in retirement and that’s what we specialize, that’s what we do. We’re not about… Well here, it’s a perfect lead-in for my closing topic. There is a difference between investment management and financial planning. They’re not the same.

David Bezar:
And unfortunately, it gets lumped in that they are the same. You know investment management is usually the focus of what you see television ads about. What you get robocalls about. What you get mailers about for dinner seminars and things like that. Investment management is what pays the bills for most financial advisors. That’s it. Like I hope our audience hears that. That’s the ugly truth of my industry, of our industry. Investment management and why you see so much commercial advertising related to it is it pays the bills.

David Bezar:
And see that’s not the whole story right? Those ads feature happy investors who have reached their life goals. You never see a frown. I mean you never see a frown on those ads regardless of market conditions. What we enjoy, what is so beneficial for us, I mean how many phone calls did we get on Thursday when the Dow went down 1800 points? The Nasdaq over 500 points.

Karen Bezar:
No panicked calls but some nice phone calls.

David Bezar:
Some really nice phone calls. I’m so happy of what you did with my financial planning. Not my investment management. Now, investment management is a component of financial planning. So the wirehouses, which are the big named companies out there and other advisors who talk about financial planning offer, for the most part, a ream of paper that has very little value.

David Bezar:
We hear it all the time, they come in, “Oh yeah I ran my analysis on X, Y, Z’s company, on their website.” And then we come back and we’ll say, “Well did you account for this?” “No.” “Did you account for that?”

Joe Krause:
Yeah, 300 million people in the United States all have the same tax bracket, it’s amazing.

David Bezar:
Yeah, it’s just amazing. It’s so static these reports, like again I’m sorry that we’re talking about the ugly truth but if you’ve gone to the big brand names websites and ran your “financial plan” I think you’re setting yourself up for something that’s not going to deliver on what your actual expectations are.

Bret Elam:
I’ll tell you what’s just as bad is the reports the advisors even do for them have the same static tax reports. Not even you doing it yourselves but even the ones the advisors are producing from these big shops, it’s frustrating.

David Bezar:
Yeah. So you know the product offered is typically a generic print out of charts, numbers, projections that are based on a questionable, like Bret just said, questionable set of assumptions and facts. They’re not customized, they’re not tailored because here’s the thing, big brand named companies have an agenda. They want you to buy their proprietary solutions so they design their deliverables to support those solutions and like you can hear it in Bret’s voice and maybe I’m not as emotional.

David Bezar:
Internally I am but it is frustrating and it’s damaging and it’s unjust. That’s the big part, it’s unjust because this is your livelihood. I mean how many times do you get to do your retirement over? You don’t. It’s a one-shot deal. Do it right or don’t do it right? So not even a thought is given to the client’s particular life situation, income situation, goals, values, timeline is a whole nother thing.

David Bezar:
The really important questions are never asked because the people selling the products who should be asking generally have no interest in the answers beyond the products that they’re going to be charged with selling and promoting. Like why do I want to talk about that if it’s actually going to steer you in the direction of something that I don’t have in my “bag of tricks?” That’s why it happens. Maybe I’m getting mad.

Bret Elam:
There you go.

David Bezar:
You know maybe I am getting mad.

Bret Elam:
Keep going.

Karen Bezar:
You’re emotional.

David Bezar:
Yeah.

Karen Bezar:
Passionate.

David Bezar:
So financial planning, and I mean Joe, real financial planning is a carefully crafted, living document that begins with a clear understanding of what the client values are. The document’s goals are aligned with the client’s goals and values whatever they may be. In our financial planning deliverable, let me go through it real quick with you, we deliver a social security maximization report. It helps you identify what is the optimal timing, the optimal election choice related to everything else in your plan.

David Bezar:
We deliver a tax clarity report. That shows you an assumption of what taxes will look like if you do no defensive tax planning strategies. We deliver a tax RMD analysis that shows you a strong case that a Roth conversion may be in your best interest knowing that we’re about to add another four trillion dollars on top of what we’ve already added to the balance sheet of our federal government. Taxes are going up.

David Bezar:
We deliver a risk analysis based on what you respond to your tolerance level and then we marry up that with your investment portfolio and see if it should be a marriage or not. Right? Is the risk tolerance equal to the risk profile of the portfolio and then on top of it are you paying too much in fees? Then we do a stress analysis and that stress analysis is based upon the objectives, the goals, and the timelines that you as an audience member have shared with us.

David Bezar:
You wrap that up and that is a living document. You know what it is? It’s a roadmap to retirement. A map that you literally can watch as your going along and then if we need to do a course correction because something happens on the external we’re able to do that as financial planners. Not investment managers. Does that make sense?

Joe Krause:
That was a perfect description of what everyone should have.

David Bezar:
And Joe I think it’s actually what people want. I really do. It’s just they don’t know that all the things that we just talked about that we do here at Thrive actually exist because they’re so used to working with an investment manager when they pick up the phone and say, “What’s going on?” “Oh, everything’s fine. Just stay the course.” They don’t realize all of this else is out there coming. So if what I just shared with you has resonated with you it may be time to start, just start with a discovery call.

David Bezar:
Let’s spend 15 minutes on the phone together, ask us questions, get to know us a little bit and if you want to take it further to a complimentary consultation where we’ll develop all those reports that I just talked about Joe, we’re happy to do that. And you can set that call up by calling us 215-987-2430. 215-987-2430. Schedule a 15-minute call with one of us or our advisors and we’ll talk and see if it makes sense to even take the next step to that complimentary roadmap to retirement analysis.

Joe Krause:
Man, well said. Well done, and so proud to be sitting in the Thrive Studios with David Bezar, Karen Bezar, and Bret Elam I can’t say it enough. Even watching you pop up on 6ABC News last week I had a little bit of pride watching and listening to your message. By the way, as I say goodbye on this Saturday, the message on 6ABC was the same message that we deliver here on a weekly basis. Tribute to everybody here and I hope the listening audience calls 215-987-2430. That’s going to do it for Roadmap to Retirement the radio show on behalf of David Bezar, Karen Bezar, and Bret Elam, the taxman. I’m Joe Krause, see you next time everybody.

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