David, Karen, Bret, and Joe are joined by Jim and Fran of Del-Val Insurance to discuss how each company conducts their business, as well as discuss their similarities and differences.
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We say hello to everyone. We start with you, David, and good morning to you, sir. How are you?
Good morning to you, Joe. Good to see you this morning.
Good. Nice to see you. with another informative discussion for the listening audience around the Delaware Valley. The ultimate hope for all of us here is to make sure that listeners consume and educate themselves with some of the information about their own personal roadmap to retirement.
Yeah. We\’re excited. We have one of our guests in today, Jim Muehlbronner, so we will hear from Delaware Valley Insurance Group. Joe, I want to make a quick comment, we keep seeing folks coming out to the workshop that listen to us on the radio, so it\’s awesome to meet them in person, and hear some of the commentary and how much they like the show. Some even made some recommendations on additional things that we can discuss on the show.
Oh, that\’s nice to hear.
It\’s absolutely awesome.
We always encourage people that are listening, if you want to come out to one of our complimentary educational workshops, we do taxes, retirement, social security, Medicare, all the different things that people are going to deal with in retirement, certainly feel free to visit us on our website at thrivefinancialservices.tyl16lnm-liquidwebsites.com. All of the dates and locations are available on the website, and you can actually register right there on the website. I\’m going to talk a little bit about something new that we have on the website as a result of meeting people, who have listened to the Radio Show, and a lot of the questions that get asked. We wrote a new whitepaper, a new eBook that\’s available on our website as of yesterday.
It\’s called, How to Retire Worry Free: A Guide to Lifelong Financial Freedom. It\’s a free download, so if people go visit our website like I mentioned at thrivefinancialservices.tyl16lnm-liquidwebsites.com, they\’re going to be able to get a copy instantaneously, just download that right to your computer, and get started reading, what some of the things you\’re going to need to evaluate, so as you\’re navigating retirement you do it in a successful way.
Throughout the show, we will continue to remind our listeners about it. How to Retire Worry Free, we\’ll make sure that we continue to tell everybody how to get that, and as you referenced, David, it\’s kind of a gathering of some of the relevant information that is out there that leads people to react once they hear us talk about something on Roadmap to Retirement. Bret Elam is here. Bret, what are you talking about today? First, I do want to send a little congrats across the studio table to you today to your son, actually, who is going to wrestle in states, so that is one incredible accomplishment and I just want to say congrats to you as a parent, nice job.
Yeah. We hit that time of year where I think my weekends are done with wrestling tournaments.
Oh, that\’s good.
Yeah. They\’re gone for a little while. Yeah. It\’s kind of cool, I\’m watching him wrestle, and it\’s something I did 30 plus years ago, so we\’ll go up to Johnstown, Pennsylvania in a couple weeks, here.
Here\’s what I know, in order to get to a point where you\’re wrestling in state, you need to be incredibly good at what you do, so you need to be well disciplined, so congrats to you on that.
Hey, thanks. On today\’s show, in recent weeks we\’ve been talking about risk mitigation, so we love when our partner Jim is here from Del-Val. We’re going to be really chatting about that, so we\’ve been talking about sequence of return risk, and market risk of the sort, so I just want to kind of chime in, and talk about some of the people I\’ve met with over the past couple weeks, just related to what our partners here do, as well. Just continue upon that theme of risk mitigation. Again, trying to take as many things off the table as possible, so that we can have peace of mind for the future.
I do reference Jim Muehlbronner from Del-Val Insurance, our partner joining us here. Jimmy, a good Saturday to you, sir.
Thank you, Krausey. It\’s great to be here. I would rather be nowhere else.
Nice to have you here, and as we talked about in terms of prep, we don\’t need to have a conversation sometimes about the reality of our insurance until it falls into our own reality, and my brother-in-law just last week experienced that with a devastating fire at his home, and it immediately triggered an incredible amount of questions that came up and at that point some of those answers were passed the point of being able to make a change.
Yeah. You and I were talking, and first of all I\’m sorry to hear that, that\’s devastating. Fires are particularly devastating, but it brings up the age old situation where you need to have that policy correct prior to the claim. Right? Once a claim happens, and you find out it\’s too late to change anything, or you had something incorrect on the policy, it\’s too late, then. It\’s very important to make sure you have the right coverages, the right type of policy prior to the claim.
Karen, last but not least, certainly, what is on your agenda, today?
I\’m going to chat a little bit about women and retirement, again.
Getting back on my bandwagon.
Do not leave that point, that is important. And the workshops have been gaining major traction so far this year, right David?
Yeah. One of the comments, which we actually included in our new eBook that’s available on the website is a transformative conversation. So many people who have come to the workshop and then ultimately come in for that complimentary consultation have used the word transformative, finding out that there were conversations that they didn\’t even know they should have been having. Just like Jim had just said a little earlier, sometimes you go beyond the time. Right? You wait too long. If something happens, and it wasn\’t in the policy, then it may not be covered, because that conversation did not occur in advance.
Same thing with retirement, if you don\’t know what questions you should be asking, things that could pop up that you ultimately make decisions uninformed could have consequences. We\’re excited about that. We love the fact that people can come in, get introduced to this new line of thinking, get an idea about what they need to be educated, and start that transformative conversation.
The eBook is complimentary, How to Retire Worry Free. You can go to thrivefinancialservices.tyl16lnm-liquidwebsites.com and you can download that eBook free of charge. Go to the website, download it, an absolutely must, How to Retire Worry Free. Real quick, David, the great thing about an eBook, is that the information is concise, it\’s easy to read, it\’s easy to understand, and it takes you through a bullet point of categories.
Yeah. We wrote it specifically that way, so that people could get through it, get all the bullet points, get all the high notes that they need to be focused on, so we hope that people get an opportunity to download that.
I encourage our listeners, also, to consider Del-Val Insurance, dvigi.com, Del-Val Insurance, one of our preferred partners here on Roadmap to Retirement. Why are they in the room? Because they can save you money, which as we know is important for retirement.
Bret, there are so many moving parts that go into that one big umbrella, or that one big question.
Yeah. That\’s it Krausey, and when you talk about retiring worry free, for me, and for a lot of people it can mean a lot of different things, but the first thing I think of is risk. How can I get rid of risk, which gets rid of problems. Call it what you will to have that worry-free retirement. Here\’s a real quick story of someone that I had met with recently, and again, I\’ve been talking about a lot of different types of risk over the past couple weeks. I\’m going to continue along that theme, today, I had met a couple that were about four years away from retirement, and he was eight years away from retirement, and according to him, they were both four years away from retirement.
[bctt tweet=\” Retirement can mean a lot of different things, but the first thing I think of is risk\” via=\”no\”]
Definitely a little bit of divergence of how long she had him planning to work for. Through our analysis, as part of that complimentary Thrive retirement roadmap review, some of the dialogue that came up was, “hey, you know what, mom and dad were able to retire very easily when they were at that time to start making that decision of how do we do it, what do we do, etc.” and we went through a really quick history lesson, and I always say to people, people we\’re sitting in front of, again, I\’m a little bit younger, so I talk about my grandparents, and then a lot of times people were sitting in front of their parents. You go back to the late \’70s, early \’80s where interest rates were, we\’ve seen them start to climb, and they\’ve dipped here a little bit, but if we go back to that timeframe, interest rates were sky high.
I don\’t know, Krausey remember what mortgage rates were back in the late \’70s, early \’80s, but they were sky high. In fact, I remember banking in the late \’90s, a young lady coming into the bank crying, I said, “Can I help you?” She just goes, “I don\’t think so.” I go, “Can I try?” She said, “Sure.” She said, “My 20-year CD that I purchased back in 1979 that I was making 18% is now coming due.” I go, “You\’re right, I can\’t help you, because rates are nowhere near 18% the way they were back then.”
At that time, in the late \’90s I was able to get her 7% from a CD way back then, though. Let\’s think about that, parents, grandparents retired back in the \’70s and the \’80s, they were very easily able to put their money into fixed income guaranteed buckets at significant interest rates did not have to take a lot of risk to achieve what they were looking to achieve. In fact, in the interest rate environment that if you look at a quick history lesson from 1980 to 2010 when you talk about interest rates, and the feds fund rates, interest rates kept on coming down, and coming down, and coming down.
I always ask people, “Do you remember how many times you refinanced?” They\’re like, “Yeah, pretty much every other year, because rates kept on coming down.” I go, “Yeah, that\’s right.” You saw a small period between 2004, 2007 that rates came up, and then when the market collapsed in 2008 it pretty much went to zero. Now, again, they stayed flat until the election happened in 2016, and rates started to come back up. Now, all of a sudden we\’re exposed to something that\’s called interest rate risk. What I had shared with the clients I had sat down with last week was we\’re now on the other side of the curve, as now interest rates are going up, we\’re all of a sudden susceptible to our principle on our fixed income products going down.
We spent a lot of time going through that and talking about the risk that we faced now with interest rates going up, and again, all the risk that we\’ve talked about over the recent weeks and months, talking about market risk, and sequence of returns risk, and tax rates possibly going up. Again, we should start talking about interest rate risk and the environment that we\’re in today where none you have a 10-year treasury still below 3%, just how the heck can I go out there and make money today in a safe conservative way, and as David said, to give us that worry-free retirement.
It\’s a lot of times as well, and I love it when our great partner Jim and Fran from Del-Val Insurance get to come in and talk about the other side of risk mitigation. There are so many times that we sit in front of people and you start talking about the inevitable that you must have in terms of everyday people. Homeowner’s insurance, auto and home insurance, number one, having the right coverages, that\’s where it starts. So many times, I feel like, hey, can we give a look at a policy and they\’re like, “No,” we\’re like, “What do you mean?” Be like, “Oh, I have the cheapest of the cheapest, you\’re not going to get any cheaper than I have,” I go, “Whoa, are we looking for the cheapest of the cheapest, or are we looking for the right coverage at the end of the day?”
That becomes a big deal, and things like limited torte versus full torte, what the heck does that mean? Or, “Hey, you know what, I love hosting people over at my house,” whether you have a cocktail or two, or God forbid somebody slips on the deck, or around the pool and hits their head, whatever that case may be, what\’s an umbrella policy? What does that do? Again, these are things that might only cost a couple more dollars to have the right coverages, but when you start talking about the God forbids, and it\’s real. It\’s real.
I think it becomes so real as Jim and I talked about when it occurs, and sometimes regrettably. It takes the incident to occur for us to realize that we made a mistake.
My wife was in an accident, and how I learned the difference between limited torte and full torte. As Jim said it, you need to make sure you have the right coverage before it ever happens.
That\’s right. Yeah.
Unfortunately, I got educated after the accident happened to my wife. When it comes to limited torte and full torte, these are things that we constantly want to review. If we talk about beneficiaries, or whatever the case may be is our coverages on everyday life, we\’re getting in a car, and we\’re hanging out with people at the house, whatever that case may be, and why you need to have those necessary evils in place.
That\’s right, Bret, and like any good insurance guy I get all excited when you start using the word, risk. I mean, back to insurance 101, I think a lot of our listeners out there will know that basically conceptual insurance, whether it\’s auto insurance, homeowners insurance is that for a relatively small premium you\’re transferring that risk to the insurance company.
The insurance company assumes the risk, if you injure somebody in an auto accident, or your house burns down, those type of things, so that\’s a basic concept there. Where we grab the ball from that point and take it forward is that we are a broker, we represent a lot of different insurance companies, some are better to insure some risks, others are better to insure other risks.
We take your particular situation to our carriers, find the best combination of policy and rate for you, because like you were just saying, Krausey, a lot of people call in and say, “I want the cheapest policy possible,” like you said Bret, or “I want the best policy possible.” There\’s a combination there where you get good coverage, and you get good premium. The cheapest policy is not always the best policy, and you really need to look at the policy, make sure you\’re paying the proper premium for the coverages that you\’re getting, because it\’s too late after a fire. Bret, it\’s too late after an accident.
You can\’t backdate coverage.
No, and I really feel and see that realization more and more when incidents and issues come up and I think that\’s even true of retirement, and we talk about that. We talk about having a plan to be worry free, but do we actually do it, and I would raise my hand in unison with everybody listening on the radio right now, most of us don\’t.
Yeah. That\’s it, and a lot of times when you start, people always have the best of intentions, but then they start becoming cost conscious, and frugal, and then you start asking about priorities, I mean, talk about life insurance, or full torte versus limited torte, and I say, “What\’s more important for you to have HBO, or make sure that your family\’s protected?”
God forbid one of these things happen, I mean, when you start looking at your premium cable channels or how often I go to Wawa on a monthly basis, and when you start looking at some of these extra costs, and Jim can talk about it. I mean, when you start talking about a full torte versus a limited torte plan, or what\’s that extra umbrella policy cost me to give me that ultimate peace of mind that I\’m busing my hump, saving money in my 401K, and getting ready for retirement, then all of a sudden three years away from retirement, life happens.
Let\’s say you get your 401K up to a million bucks, or $500,000.00 and then you\’ll complain about having to spend $200.00 or $300.00 for an umbrella policy that would protect that against a lawsuit. Yeah.
Jim, somebody who\’s going to reach out to you at Del-Val and say, “Okay, I heard you on the radio, Jim, I really want a good plan.” What are you going to take them through? What\’s that process?
First, let me just get it out there our listeners how to get in touch with us, and when you get in touch with us, I will personally talk to you, or I will personally respond to your email, our phone number is 215-354-0122, my email is [email protected], and our website is dvigi.com. Reach out to me if you have any questions, but the process, David, basically is we\’ll gather some information, we\’ll typically ask for a copy of your current policies, whether we\’re talking about auto, homeowners, or if it\’s a business owner. We\’d want to take a look at the business policies, workers comp, general liability, all that kind of stuff, assess where you\’re at, and then determine what\’s the best way to go forward. Do you have proper coverages? Do we need to tweak some things? That would be the process. We\’d go to our carriers, get rates, get back in touch with you.
I know a lot of the people that we refer to you guys have been, what I would say with us sitting here at the table and go, “Geez, that is a significant amount of savings.” What would you say the average situation is? Then, if there isn\’t savings, it\’s usually a dramatic increase in coverage.
Yeah. Typically it\’s amazing, depending on your situation, if you\’re a family that has four cars, four drivers, and a homeowners, I mean, you can save into the thousands of dollars, believe it or not, depending on how much you\’re spending, but typically 20% to 40%, let\’s say.
That\’s a big deal.
It could be a big savings, depending on what you\’re paying.
It\’s worth it.
Plus, you\’re going to make sure you have proper coverages.
How long does that process take?
The information gathering process can be done in five to 10 minutes with a phone call, email, I\’ll have you email over, declarations page is the best thing to send to me, that’s a good starting point, and then it\’s on me, we\’ll take the time to run the rates, look at everything, and we\’ll get back in touch with you, but it\’s a very small time investment.
Make sure to come out to a Thrive Financial Workshop. You are guaranteed to leave the workshop more informed than before you arrived, and I say that, Karen, with a 100% confidence, because that\’s the reality of what Thrive Financial Services has been able to do with each and every workshop. But, I think the end result, or the proof of that is the growing number of people that continue to come to the workshop, and the number of people that become Thrive clients, or at least come in for the complimentary review.
I agree. When people come in for the complimentary review, they always, not always, but many times say they learned something that night, and I can guarantee you if you come for the complimentary review that you\’re going to learn a lot more that you heard at the workshop, so it\’s definitely worth your time, and effort to come in and meet with us.
No doubt about that. Before we jump into your segment I did want to give the website for Del-Val Insurance, dvigi.com. Jim Muehlbronner one of the partners of the firm is visiting with us, he\’s a preferred partner of Roadmap to Retirement. This is not the first time that Jim has joined us on the show, and we\’re glad to have him here for the entire hour.
Exactly. Happy to have him here. He loves getting up early
Thank you, Karen.
I have an article here, Three Strikes Against Women in Retirement, and I\’m going to get back on my soapbox again, any women out there reading, again, it\’s really important we have different reasons why retirement is more difficult for us, but it\’s something that if you understand now that you can take care of it, and prevent it from happening later. I have an interesting statistic here, more than 6 in 10 Americans don\’t know how much money they\’ll need to retire.
A recent bankrate.com study found that millennials are more likely to be perplexed, they said 69% of millennials they ask have no idea about retirement, how much money they\’re going to need to save, but 60% of baby boomers weren\’t sure how much money they need to save to successfully retire, which is crazy to me. That\’s a question that we ask a lot of times when people come in, if it\’s a single person, or a couple, that\’s a very important number that we need to do some of these reports for you, and they come in with sometimes, they don\’t know, they don\’t, and we sit there and we have worksheets to go through, but that\’s a very, very important number.
Then, of course, that\’s one thing to define the number, it\’s another thing to be able to understand how to manage the number, manage the process.
That goes into being able to handle the number.
Right. Anybody out there listening that\’s part of the 60% that don\’t know, start with that. Start figuring out what retirements going to look like, and what you need to retire comfortably. Back to women, there\’s three major challenges that women tend to face in retirement. Number one, is age and life expectancy. Women, again, we\’ve talked about this before, they actually tend to live longer than men.
Yeah. Unfortunately, there\’s a couple reasons, women tend to marry somebody who\’s older than them, and then we also tend to live longer, so that\’s a problem, and here\’s a statistic, which I found scary or sad is that women represent 70% of the people in nursing homes, so healthcare expenses can come into play as well. That\’s one area. The amount saved for retirement right now, they say that women tend to save less for retirement than men do. There are many reasons why women don\’t save, but it\’s possible they don\’t prioritize saving due to budget constraints.
There was a survey done, and it says that women acknowledge that it\’s important to save for retirement, but women aren\’t placing as high a priority on setting the dollars aside. Women rank saving for retirement as the fifth highest priority. It fell under meeting daily living costs, paying off debt, and it suggests that men and women prioritize financial needs differently. It\’s really important to get a handle on it, now, before it becomes too late.
You\’ve had, and I know that we\’ve talked about this before, you\’ve had some scenarios where the woman will come in for the workshop or for one of the complimentary reviews without the spouse, and then there\’s the encouragement, or the conversation to say, “Hey, it\’s more important I think to collectively have both partners involved.”
Yep. Absolutely. Sometimes the gentlemen will come in without the wife, and say, “I take care of everything.” I\’ve actually had the opposite happen, as well, but it\’s important for both people to be on the same page, and understand the whole process, and understand what retirements going to look like, because like Bret said, sometimes the one person might think they\’re retiring at 70 and the spouse thinks they\’re retiring, I\’ve had that happen before. One, think the husband is going to retire at one age, and the husband thinks he\’s going to retire at a different age and vice versa.
It\’s fun to watch.
Yeah. I definitely said at times, I mean, I\’m not going to lie, it has gotten contentious once in a while.
Like I said, it\’s fun to watch.
Honestly, it has.
Is there a way to retire without retiring? Because I always say I\’m never going to retire.
Some women do say, the gentlemen will say, “I\’m going to retire at 68,” and she\’ll look at him, she\’ll say, “No you\’re not,” like no, because you drive me crazy now, but that\’s another story, maybe we\’ll cover that in a whole other show. The value of social security and pensions, and again, women, there\’s a wage gap, number one, which we\’re all aware of, it\’s starting to narrow, but a lot of times women leave the workforce to care for children, and elderly parents, and it causes a pay drop in your social security income, so again, they take the 35 highest earning years. So something important to remember is maybe get back out there and grow your social security income after the children are raised, go back out into the workforce. That\’s some valuable information.
Karen, I was just wondering just out of curiosity, because I was listening to some of the statistics, and we do see a lot of times that women are on their own, whether it\’s from being a widow, or divorce situation, and all of that. Jim, when you\’re dealing with women that are single, do you find them, like who typically takes care of the insurance decisions?
[bctt tweet=\”it\’s another then to be able to understand how to manage the number, manage the process.\” via=\”no\”]
You know what? Looking at some of my notes, here, I think where this whole conversation manifests itself in my business is what we see a lot when we get quote sheets in, or declarations from people to do their quotes, often times we see that there\’s only one named insured on the auto policy, and/or the home policy.
That\’s usually the husband. Right? Instead of having the husband and the wife the named insured, which is a way it should be, and a problem can arise when the husband typically predeceases the wife, now, the policy a lot of times would have to be, the auto policy will have to be rewritten, if it\’s just in the husbands name.
Is that intentional?
I think it\’s just the way.
Is that an intentional decision that people make or no?
I think a lot of these policies have been with the same Carrier, or same company for a longtime, just never got updated, or that\’s the way they did it back then. It was always the man first. It should read, John and Jane Doe instead of just John Doe.
If Jane has to re up her insurance after, does that cause an issue that it could be at a higher rate.
If she\’s underwritten.
Yeah. It would be underwritten.
She\’s had some issues with driving, or tickets, or accidents, those kinds of things could come into play. It\’s just silly, because it doesn\’t need to be that way, if both names are on there, it\’s simple, it\’s a matter of deleting the one named insured. Typically, we deal with this.
One spouse, typically, and that\’s usually the man who we talk with on the phone. We like it to be both parties involved, so that they both understand what\’s going on and are involved with the decision.
Sometimes the simple conversations are the ones that have the most importance.
Jim, it\’s always nice to have you when you join us on the program, because what you do, you deal with what everyone has in their life, so whether it\’s an automotive, it\’s a home, anybody who\’s listening to this show right now has a potential need for Del-Val Insurance, or at least a potential need to have a conversation with you. And I even came to an even bigger realization of that, again, when reality hits at your doorstep, that\’s when we need you. Well, we need you before, that\’s when we\’re reminded we need you when reality checks us at the door.
Yeah. It\’s one of the benefits of my profession, and I suppose, Bret, Karen and David’s, as well, is that we provide services that almost everybody needs, Right? Most people own a car, most people own a home, or rent an apartment, something where there\’s insurance involved, and as a broker we have 12 different package carriers that can do auto, home, umbrella, all that stuff, with the same carrier. And we have multiple special lines companies for other circumstances. With one phone call to us at 215-354-0122, you\’ll speak to me personally and we\’ll take a look at your situation and find a great company for you at a very reasonable price.
Good stuff. Great to have you here, and we\’ll remind our audience not only today, but each week on here on Roadmap to Retirement that it\’s all part of those buckets, David, that when you get into a review, and you start to gather information, all of those different details are going to ultimately determine what kind of a plan you can put together for the individual. There are no cookie cutter plans. There\’s an overview, but there\’s an individual and a personalized plan based on the details.
Yeah. That\’s exactly right, Joe, and it\’s actually a little surprising for me personally, like how much we actually understand. When I grew up in this business, my roles were basically acting as an investment advisor, just kind of helping people pick what type of a mutual fund, or stock, bond, whatever it may have been, and when we got started here at Thrive and we saw that, that\’s what everybody else was doing.
And you know they tell you a lot of times not to compete where other people are strong, but compete where they\’re weak, and the weakness that we identified is nobody was really acting as an educator and an advocate, and really teaching retirees, baby boomers, that segment of the population that\’s getting ready to retire just entered retirement, how to do it successfully.
When we went out on that adventure of learning that process, understanding all the moving puzzle pieces, it\’s extensive. I think people end up realizing that. When they come in and sit down with us, they\’ll tell us things like, \”I ran a retirement analyzer at Fidelity,\” or, \”I ran the retirement analyzer at Vanguard,\” and I\’ll say, Bret, Karen, we\’ll all say, \”Tell us a little bit about it,\” \”Well, they told me everything\’s fine.\” Then we\’ll start asking the questions. Did it factor in X? Did it factor in Y? Did it factor in Z? They go, \”I don\’t think so.\”
Well, those are things that could be very disruptive to your retirement, \”Don\’t you think it would make sense that we run that analysis to see if it kind of gives you a little bit more detail?\” Then, when we do the detail, it\’s a whole lot different than the original story. I encourage, look, I\’ll make a statement maybe it\’s not the right thing to say on public radio, but planning for retirement sucks, but not planning sucks worse. Right? You got to go through the pain a little bit to really get yourself a high degree of a certainty that your plan is bullet proof. That it\’s been tested against all the conditions that can kind of derail, let me give you a really easy, easy example that we see unfortunately very, very frequently.
Karen, had mentioned it a little bit. We ask people when they come in to be prepared to explain to us what their monthly budget is going to be. Okay? How much do you think you\’re going to need at retirement? We\’ll get a number, and we\’ll start to do our work on that number, and one of couple things will happen. One, is we\’ll get a phone call in between our first complimentary appointment, our second complimentary appointment where we share the reports on the second appointment, and they\’ll say, \”I\’ve really been thinking about this, and I think the number that I gave you was wrong. I think the number is 50% to 60% actually higher than the initial estimate.”
I can\’t tell you how often we will see a retired couple come in and say, \”I think it\’s costing me about $3,000.00 a month to live, I don\’t have a mortgage, I have real estate taxes, and homeowners insurance, but we don\’t have any credit card debt, the car\’s paid off,\” so on and so forth, but then as you start to go through the litany of items that people spend money on, and here\’s the big one that people forget about, what most people do to figure out their budget is they take a check register, or a quick, wherever they register what they paid for the month, and they\’ll kind of just times that out by 12 and this is what I spend divided, then we say to them, \”What about the things that you pay quarterly? What about the things that you pay semiannually? What about the things that you only pay one time a year? Did you factor those in?\” \”Oh, no, they don\’t show up, I just looked at the month of January.\”
When you start to look at those things, you start to find a much, much bigger number, and that dramatically impacts the projections. Right? If somebody tells us they have a million dollars, and their monthly expense are only $3,000.00 a month, that may give us a completely green light on everything. Right? Longevity, money\’s going to last. Assets, going to continue to grow. If you have a healthcare crisis, you\’ve got plenty, so on and so forth. But, if that number is $6,000.00 that could totally change everything to the point that when we show one of the reports with a graph, it actually may show that they run out of money, they\’re assets get depleted a 100% somewhere in their late 70s or early 80s.
The worst thing that could happen to anybody, especially with people living longer, today, is that your money runs out before you do. We\’ve seen that so many times, Joe, and we want to make sure just because somebody says, \”I have my money at Fidelity, and I ran their analyzer, everything looks pretty darn good.\” That analyzer really is only looking at the stock market returns, kind of what money has done over the past 10, 15, 20, or 30 years. It doesn\’t take into consideration what happens when my spouse passes away? Right?
When I lose one social security check, and because I picked 50% survivor benefit on my pension, now I\’ve got a cashflow disruption from my surviving spouse. What if I have to go into a healthcare facility, and I don\’t have long-term care insurance? The average stay here in southeastern Pennsylvania is 2.9 years at a cost of a $100,000.00 a year, so there\’s $300,000 of assets that Vanguard, Fidelity, or any of those other quotes on quote “robo” type advisors did not really take into consideration. Right?
We want to make sure people understand all of that, Joe. That\’s really the benefit of coming out to one of our workshops. Seeing that, this is the first time I heard that I should be considering that. Right? We talk about taxes all the time, that\’s the topic of our workshop, and we see a lot of people who come into our office, that have what\’s called, non-qualified money. Right? This is money that sits outside of retirement plans, and some of those are getting great performance, and what we end up seeing is money\’s getting distributed from those accounts, where these folks in retirement actually don\’t even need the money. Right?
Now, that money is showing up on line 8A, or 9A of the 1040 tax return, and they\’re now going to be subjected to federal and state income tax on that, it could potentially increase the taxation on their social security benefit. It could do a lot of things like that. When they come in, and we start to have this conversation, did you know that there are alternative, not out of the mainstream, just alternative investments, where we could potentially do a couple things, that money that\’s sitting there, we could potentially pass that on, legacy, completely tax free.
We can grow that money tax deferred, so that it\’s not showing up on, you know, you\’re not getting a 1099, and reporting that on your tax income. We could include long-term care benefits on that type of money, and the list goes on and on, and on, Joe. High encouragement to our audience, come out and see us. Come out to one of the workshops. Come in for a free consultation. We\’ll go through this conversation. It\’s transformative. Let\’s find out if there are things that can be done today that set you up better for tomorrow.
I think it is okay for anyone in the audience to say right now, and admit, it\’s okay to say you don\’t know. I, a 100% believe that, that is the start. We don\’t know. We think we do, but we don\’t. Is that fair?
It is fair, and even for the people who say, “I do know,” and they\’ve done the planning, why not get a second opinion and make sure you have it completely locked down the way you want it, get certainty.
Perfect transition, Jim, get a second opinion from what you can provide, give us your contact information, again, for the audience.
Good stuff. Thank you so much for being with us today. Special thanks to Del-Val Insurance for giving us some insight into areas that we usually don’t get to discuss. Of course, we also thank David, Bret, and Karen for another week of discussing all things Thrive Financial Services. That will do it for this week. Don’t forget to contact us if you have any questions or are considering acquiring our services!