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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 educational 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. David Bezar, Bret Elam and Karen Bezar, Thrive Financial Services and Thrive Capital Management are licensed to offer investment advisory services through Thrive Capital Management, LLC, a Pennsylvania State registered investment advisor. Office headquarter is located in Fort Washington, and offices of convenience used exclusively for client meetings at Exton, Yardley and Cherry Hill.
Joe Krause:
Good Saturday morning everyone, and welcome into Roadmap to Retirement, the radio show, as we come to you on Talk Radio 1210 WPHT, welcome everyone in joining us here this morning. As you listen to the radio program, I\’ve been saying it to whoever will listen to me, David, all week during this craziness. Never has there been a time more that the listeners on Talk Radio 1210 need Thrive Financial. We, meaning the audience, and I represent the audience here. We need you. There is so much going on.
David Bezar:
You\’re absolutely right Joe. It\’s an interesting time. Here at Thrive, every day we are continuing to act as advocates and educators and even sometimes a little bit of the psychologist and the calmness for people out there. Again, a lot of the people that do work with us at Thrive as clients are really and going through a whole lot. Again, it\’s getting a little crazy from a health scare perspective and I think that just kind of changes people\’s overall mindset. A lot of our conversations are just conversation so not even completely financial related, but at the same time, we\’ve had such a blast of people who previously went to one of our workshops and came in for consultations.
David Bezar:
Maybe at the time, it wasn\’t right for them to become clients of ours, but the reason the three of us look so tired is we\’re just extending major, major hours. We are being incredibly diligent. We\’re trying to balance this whole thing out, Joe, about the isolation and the social distancing, which it\’s amazing how times change and words get used and all that. But we still have people that want to come into the office. So we\’re very, very diligent on sanitizing and making sure everything\’s good and we\’re isolating. Our staff is 90% working remotely right now. So it\’s a skeleton staff as people come in. Then what we\’ve introduced over this past week is virtual, right?
David Bezar:
So we\’re meeting a lot of people virtually over the computer where we\’re sharing screens. We\’re able to still see each other and kind help each other out. But the number of people who\’ve come in this week to say, \”You know what guys? You told me this a year ago, you told me it nine months ago, you told me three months ago. I should\’ve listened then, I need to listen now.\” And we still have salvageable situations. We still have strategies that stand the test of time, even in these crazy economic, financial situations. Then I\’ve said a lot this week is that the worst decision you can make is indecision. When people get scared, when people start to panic, they get paralyzed and they do nothing.
David Bezar:
I was talking to a prospective client on the phone yesterday and that was her mantra almost to me. \”I\’m just so nervous. I can\’t think straight, I can\’t do straight.\” I said, \”Well, that\’s why you need to work with somebody like me.\” Ultimately, after, and I don\’t push Joe, you know that.
Joe Krause:
I know that.
David Bezar:
Part of the theory here and part of the commitment is never to put any pressure on people. I gave her my ideas, I gave her my strategy, I said if you are interested, you call me back. She called me back this morning, we\’re going to meet, we\’re going to take care of a situation. Because it\’s never as good as it seems and it\’s never as bad as it seems. We hear our stable, we hear are understanding what\’s happening. I\’ve been doing this 30 years, I\’ve been through this three different times. Each time a little bit different, but I\’ve experienced it. It\’s not new for me. I know how to stay calm, and when everybody else is panicking and that\’s what we\’re doing here to thrive.
Joe Krause:
Yeah. That\’s the beauty of this radio show. It is the reason why the Thrive army continues to grow and why we are welcomed into everybody\’s home so much on a Saturday morning along with David Bezar and Karen Bezar and Bret Elam. I\’m Joe Krause. For the next hour, we\’re going to give you real concrete information and talk about something specific, perhaps that you\’re thinking about. Bret, I know you\’re logging as many hours as David and you\’re in many different directions and you\’ve crunched so many numbers in the last couple of days that you still can see straight because you\’re a numbers guy. That\’s why I enjoy what you contribute to this radio show, and more importantly than that, what you do for your clients.
Bret Elam:
I appreciate that Krause. One important word that David just said was should. How many people that we\’re talking to say that word should. Again, we nickname them in our office. Don\’t become a should head. I should have done this, I should have done that. That\’s what today\’s show is going to be about, Krause. I just echo exactly what David just said. There\’s so many people that were speaking out to. The emotions are all over the place. Scared, angry, buying opportunities. Am I going to have a job? What\’s gonna happen to my grandchildren? People are all over the place. The ones that scare us the most though are the ones that are putting their heads in the sand, like I\’m not looking, I\’m not watching. When you\’re starting to hear words slinging around, like not recessions, but the depressions and large unemployment rates, those are actionable items, and that\’s what today\’s show is going to be about.
Bret Elam:
Again, I know you heard it last weekend. I know you\’re hearing it on the air all the time about all the dooming gloom, get out, do this yesterday. Stop. People are prying on people\’s emotions. Again, it\’s times like this that you get one decision, and again, you got to make a decision. Again, as David said, it\’s indecision, not the wrong decision. So it\’s again, getting out of the paralysis and just being proactive and making good rational decisions.
Joe Krause:
Yeah. Let me say to the listening audience in the spirit of what you just said. I want people to feel comfortable. I want people, relax is the wrong word because it\’s a time where there\’s a lot of angst and a lot of uncertainty. But for the next hour on this radio show or for the conversation that they have with you, be open to that conversation. You will be so much more educated. I think that really, really is the key. Karen, nice to have you here as well.
Karen Bezar:
Thank you.
Joe Krause:
I know that you are logging hours as well, but thank you for being on the show today and thank you for being a part of the conversation we\’re going to have.
Karen Bezar:
I\’m just going to echo what David and Bret said, and I\’m just thankful for the people that are coming in that have decided that they cannot take this anymore and that they did listen to us. It\’s just, when we\’re reaching out to people that haven\’t become clients and are on the fence, we really are reaching out because we are … I cannot tell you how concerned I am for some people that have buried their head in sand. The common thought process for some people it\’s like, I\’m so nervous, I don\’t even want to look at my account. You can\’t do nothing. You can\’t stand frozen. It\’s making me sick to my stomach.
Joe Krause:
Yeah, no, that\’s a good point, David, it\’ll come to you before we get to the break. We\’ve got about a minute and 25 seconds before we get to the break. You said when you open that you are trying to accommodate all different ways for the listening audience to be able to consume some information. You\’re introducing the webinar this upcoming week since the workshops on location at the libraries are not an option. Tell us about it.
David Bezar:
Yeah, we\’ve worked really hard. I\’m very proud of our team to get technology in place, get us to understand how it all works so that we can still reach out to the community. So we are hosting two live, we\’re going to call it the COVID-19 kind of emergency strategy. I don\’t even know what the word is, but the reality is, is we want to just become, What do they call it? That lighthouse amongst all this fog and try to clear some things up for people. Because again, as disruptive as this all is, and I want people to hear this, Joe, it will all pass and we will get back to a degree of normalcy just like we did after the.com bust, just like we did after black Monday in 1987, just like we did right after the horrific events of 9/11.
David Bezar:
Took a little bit of time, people took their breath and then they got back to normalcy and things even got better. Every adversity any of us have ever experienced brings the seed of equivalent or even better benefit. What we want is we want to put people back to normalcy on their retirement planning track. We\’re going to be hosting this webinar Tuesday, March 24th or Thursday, March 26th at 6:30. All you have to do is go to our website, thrivefinancialservices.tyl16lnm-liquidwebsites.com. Right on our homepage, you\’ll see a screen that pops up and that will let you register. You can sit at home, you don\’t have to leave your couch or your dining room table or the bedroom, whatever it is, and you\’ll be able to see us live conducting what we normally do in our normal in-person workshops.
Joe Krause:
All right, good stuff. I\’ll give that information out throughout the hour. We\’ll get to our first commercial break here on Talk Radio 1210 WPHT.
Speaker:
David, Karen, and Bret will return after the break. Remember, if you want to connect or have a question, send a text to (267) 870-8210.
CLICK HERE TO REGISTER FOR OUR NEXT UPCOMING WEBINAR
Joe Krause:
Back here on Roadmap to Retirement, the radio show. We thank you so much for tuning in. Bret, I want to come right to you. I don\’t want to waste a lot of time, a lot of minutes or a lot of seconds coming back in and out of the break, I want to give you David and Karen the opportunity to deliver really, really good information. It\’s all about educating the listeners and the public and you guys are just incredible advocates. Right to you I come, sir.
Bret Elam:
Yeah, Krause, so you know how we like to be slow and take our time and get into that educational delivery, and it\’s what Thrive was built on and it\’s what we continue to do. But when we go through times that aren\’t normal, like today is probably, I guess the easiest way for me to describe it is there\’s actionable items that we have to take, and it goes beyond just which stock or bond do I put my money into. Just appointments that I\’ve had this last week, Krause, it\’s been refreshing to hear the importance of the Thrive Retirement Roadmap review is not just investments, investments, investments, investments, because that\’s what I\’m hearing from everybody. My advisor was a stock jockey.
Bret Elam:
It\’s all he ever does. And you know what? He\’s picking all the wrong ones. I\’m like, \”I get it. I\’d be frustrated too because your conversations you completely are always having is about the investments, investments.\” So the conversations we\’re having about tax planning. That\’s a year round conversation. Again, when we\’re talking about fees that are out there, if you\’re going to work with somebody, what are you getting for that fee at the end of the day? So conversations that we\’re having with people when they\’re coming in day in, day out, here\’s one thing. We\’ve had a couple episodes, Krause, talking about pensions and the pension crisis that\’s out there as a country. It never continues to get better, things get worse.
Bret Elam:
We go back to 15 months ago in that little three month blip in the fourth quarter of 2018. It recovered in three months, but you read a lot of the publications that came out from that, it said, \”Hey, that correction that just happened this fourth quarter, we\’re not going to feel it right away, but that little blip, we\’re going to feel it in three or four years from now of the stress that\’s going to have on the pension system. Well, gang, listening audience, it\’s now been four weeks since all this new normal occurred, and now we\’re down about 30% on the stock market. Sitting here today, one month after everything\’s happened.
Bret Elam:
When I start talking about pensions, Krause, talking about a 30% decline, it\’s going to stress the pension system. I\’m sure there\’s plenty of listeners here, \”Hey Brian, I got a pension. Why are you talking about pensions? These things are guaranteed. For our listener, and if you want some more information related to it, I always tell people about the Kline-Miller Pension Reform Act of 2014. Again, whether you\’re out here in Chester County, you know people that work for Bethlehem Steel, and I can go just straight down the list Krause about people that have had pensions before that, had been reduced if not eliminated.
Bret Elam:
A lot of people have had the opportunity. It\’s still out there today, Joe, is people have this opportunity called a lump sum pension. For instance, we have a lot of teachers, part of the PSERS retirement system here in Pennsylvania. Again, right now when they retire, they have the ability to take a lump sum portion out of their pension and then take a normal payment. Some people have the ability to pull all their money out in a lump sum and do whatever they want to do with it, create their own pension, if they just want to get control of the asset. But what I\’m here to share with you is that when companies offer lump sum options within a pension Krause, it\’s because they\’re well funded. Well, guess what? One month ago they were probably a lot better funded than they are today. If you have been contemplating, Hey, you know what? I have that lump sum option on my pension.
Bret Elam:
Gang, there is no time to procrastinate anymore. You have an actionable decision that you probably need to make within weeks or months of if you are going to take that lump sum, you want to act upon it, but then the questions go, it\’s an emotional decision. Does it make sense for me? Do I do it? Don\’t I do it? These are all things that we talk about with people as part of that Thrive Retirement Roadmap review.
Joe Krause:
Those conversations are individual …
Bret Elam:
Absolutely.
Joe Krause:
… to the individuals there.
Bret Elam:
There is no set answer, which is why I\’m not giving anyone an answer like CNN Money Magazine saying, everyone take a lump sum. No, everybody\’s situation is completely different or everyone\’s recommendation is going to be completely different. But again, in a time like this where we\’re paralyzed from making decisions, again, we\’ve got a brush off the dust off the shoulders, we got to pick ourselves up. We\’re emotional beings, but again, David, Karen and I, we\’re earning our keep here over the last month. There\’s a lot going on and these are critical decisions that you get one chance to make.
Bret Elam:
Then, we don\’t know if this is going to be a quick blip, but when you\’re starting to hear words like 20% unemployment, depression, this feels a lot like the worse than the short term blip like we saw the three months of 2018. If you\’re a listener today, hey, I do have that lump sum option. I do work for Mac. I do work for Chop. I do work for Pfizer. I do work for the city of Philadelphia and their drop program. Do I have this lump sum option? That\’s the first question. The second one is, what do I do with it? If you\’re sitting here wondering saying, \”How does that apply to me?\” Again, reach out to us.
Bret Elam:
Again, you can call our know our office number at +1 800-516-5861, but it\’s topics like this, we go into taxes, everything that we need to be considering during this coronavirus, this new world that we\’re now in. These are things that we talk about. I encourage our listening audience to also go to our website, www.thrivefinancialservices.tyl16lnm-liquidwebsites.com. My encouragement, whether it\’s next Tuesday or whether it\’s Thursday, either the 24th or the 26, my encouragement is you tune in. Again, we\’re going to be talking about topics like this, and just like we do here on our weekly radio show, we\’re going to be changing it up a bit.
Joe Krause:
I\’m going to send my buddy the link. I want him to go on to the site. He\’s 65 years old. He was working for 40 years in the business. His company was bought out in January. He finds himself two months out into 2020 unemployed, not sure now whether he should retire, worried about all of the money that he\’s put away for the last 40 years. He\’s in one of those uncertain windmills and he just can\’t seem to collectively slow himself down a little bit and see the end. I think there\’s a lot of people going through that. I really do.
David Bezar:
No doubt. That is just the tip of the iceberg. Everybody listening today probably is smart enough to understand the repercussions of these declines and how … so many small businesses are probably not going to make. We have to see what the government\’s ultimately going to settle on, but there\’s probably so many companies that are going to go insolvent, bankrupt, which means unemployment. Last week, we heard the unemployment numbers jumped from 70,000 claims for the week up to 271,000. This is really before we\’ve even gotten to a peak with the coronavirus and the ultimate ramifications. Joe, what I would suggest, we do have these workshops, these virtual workshops that we\’re going to be doing on the 24th and the 26. What I have found though is there are so many people who want to come right in for an appointment.
David Bezar:
If people want to do that, they could just go to our … Now that appointment, Joe, can either be here physically or it can be online virtual. So the same process. If you go to our website, right on the homepage, you will be able to schedule either virtually or physically in any one of the four local offices and get that complimentary consultation. Again, there\’s no obligation to do business, but what you will sit with is a very caring, empathetic fiduciary who completely gets all the moving puzzle pieces of retirement. Though you may be going through a high degree of emotion and that emotion may be negative emotion, we\’re not. So we can be a very grounded sounding board. We remain calm. We look objectively at the situation, help push away the clouds, let the sun come through and give you some certainty versus uncertainty.
David Bezar:
I\’d really highly suggest that people are in that mode. Spend an hour with us on the computer. If you want to come in physically, just let us know, we\’ll be prepared, but it can be of tremendous value to you.
Joe Krause:
I know you did mention this when we were on the live show last week, and we all did agree with it. You are a germaphobe, so if people did come in, it is completely-
Bret Elam:
I have holsters now with Lysol and Purell. Well, you know what\’s crazy Krause, too is this world of technology. And again, we get people that meet us here in Southeastern, the greater Philadelphia area and they move. But guess what? They still stay with Thrive. And you know how we\’ve been able to connect with them over the years they\’ve left is the same virtual technology that we\’re talking about here today. Whether you\’re five minutes down the road or five States away, what I know is that the clients that are a part of Thrive. They enjoy the experience. They\’re like, \”This is the second best thing. It\’s almost like we\’re still sitting in here in Pennsylvania next to you guys where we\’re not missing a beat.\”
Bret Elam:
Again, we know the emotions are running high is don\’t stand still, is do something, be proactive. There\’s no time. Again, there\’s winners and losers on every decision that are made. Today is not a time to sit idle. Again, feel free to reach out to us. Come out to thrivefinancialservices.tyl16lnm-liquidwebsites.com. Again, you can choose to link on there, either to attend our webinar next Tuesday or Thursday at 6:30 or again, just click on that icon to schedule that virtual appointment or if you\’d like to meet with somebody here locally as well. That\’s my encouragement, Krause.
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Joe Krause:
Last thing before we go to the break and I already know the answer, and after you do it, after you go through that hour conversation, after you listen and learn and get your questions answered, at that point, it\’s okay for you to leave, it\’s okay to go home at that point. There\’s never any pressure to do anything other than to get educated. That\’s a fair assessment, right?
David Bezar:
Absolutely.
Joe Krause:
That\’s why I love coming to Thrive Financial Services. That\’s why I love doing the radio show. We\’ll get to a commercial break here on talk radio 1210 WPHT. Karen Bezar will join us on the other side back in a moment.
Speaker:
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 thrivefinancialservices.tyl16lnm-liquidwebsites.com.
Joe Krause:
Thank you so much for listening this week to Roadmap to Retirement, the radio show, as we come to you on Talk Radio 1210 WPHT. David, I want to make sure that I do not give out the information incorrectly for the webinar. One is Tuesday the 24th, the other one is Thursday, the 26th. Listeners can go to thrivefinancialservices.tyl16lnm-liquidwebsites.com.
David Bezar:
A link will pop up.
Joe Krause:
A link will pop up where they go there.
David Bezar:
And they could just click on that and get it. The webinar starts at 6:30.
Joe Krause:
Okay. From the comfort of your home, you can sit and absorb, and how long has the webinar?
David Bezar:
A typical webinar go an hour and 15 minutes. We may have a chat box moderating, so if people have questions. Again, this is new for us, so we\’re gonna try and figure out. We ask for everybody\’s permission to kind of bear with us.
Karen Bezar:
Forgiveness.
David Bezar:
Give us some forgiveness on this one. But it\’s going to be our standard going forward.
Joe Krause:
All right, good stuff. Well done. So thrivefinancialservices.tyl16lnm-liquidwebsites.com, Tuesday the 24th, Thursday the 26th, and it starts at 6:30. Karen, on that note, you can jump in here. How are you?
Karen Bezar:
Great. Thanks for letting me jump in, Joe. What a roller coaster ride this week. I\’m ready to get off the ride. It\’s making me nauseous, but we\’re still on it. So you\’re in the midst of it. All I can say is, I told my younger daughters is, it\’s a scary time for people, but you can really learn a lesson from this as well. They\’re younger, and if you\’re starting to look at retirement and ahead into retirement, this is a wake up call for you to make sure that you really plan for your retirement and you plan for these things. It\’s like David said, I think on our last show is, we didn\’t know this virus was going to come around and cause this type of reaction, but we knew something was going to come along and cause a market correction and a scare in the market.
Karen Bezar:
So you had to be prepared for that, and that\’s a good lesson that everybody is unfortunately learning now if you\’re not prepared. Just this week what I have been seeing a lot of, and Bret talked about it just a little while ago was the pensions. I met with somebody, he\’s a local union worker and he said that he had this really nice pension coming to him in retirement and he\’s right on the border verge of heading that direction and now he\’s concerned because he has heard it has happened, not in his specific union or his local, you\’re more versed at that than I am Joe, but they actually have cut people\’s pensions back.
Karen Bezar:
Now, he was planning on having this amount of money and he might not have that actual inflow of cash every month that he thought he was going to have. That\’s really happening out there. Another thing that I\’ve seen twice this week is somebody came in for that first appointment. They did come in for their second, and in the beginning they were, when I talk with them, I ask people how they feel about market corrections, market going up, market going down, and they\’re like, \”We\’re okay with it. It always comes back up.\” We try to tell people again, yes it does, but when you\’re in retirement and you need that money, that\’s a whole different story. From the first appointment to the second appointment, I asked them, \”How do you feel about the market correction and what\’s going on?\”
Karen Bezar:
I take notes and I write down what they say. In our conversation, they said, \”Oh, I\’m not concerned about it.\” I said, \”Are you still not concerned about it?\” And they said, \”Well, I thought I wasn\’t, but now that I\’m closer to retirement, I\’m rethinking that strategy.\” It\’s a big difference, it\’s a big deal. Then, another person came in, had the option of taking a lump sum pension. Same conversation. She said, \”I\’m thinking of taking that,\” and she had no survivor benefit on. I said, \”What happens to the no survivor benefit? You start the pension for one year, two years, three years, and what happens to all that money that you worked for that pension amount? It goes back to the company. It doesn\’t go to your survivors.\”
Karen Bezar:
The light bulb went on in their heads. If you\’re out there thinking about retirement or you\’re in a situation now where you\’re really concerned, I can\’t stress to you enough, go on thrivefinancialservices.tyl16lnm-liquidwebsites.com, our website. We will meet with you virtually or in person. You can do something now. Again, don\’t just sit idle and do nothing. You can take charge of what is going on and your life and definitely come in and work on your retirement. If you\’re out there heading into retirement, you really need to take a look at what you\’re willing to risk out there.
Joe Krause:
Yeah, and I would say this, all of the different assessments that you do for the individual will help the individual start to understand a little bit more about what you\’re saying and about the options and the riskalyze and all of the different ways that you come at an individual. It\’s amazing to me, but you cover everything to come up with the right plan. That\’s what I love so much.
Karen Bezar:
What is eyeopening is we do this … we use a software called Riskalyze and it\’s a stress, risk and fee analysis is the way I like to put it. So if someone was in a few weeks ago and they had their dollar amount of what their account values were, and we do what\’s called a stress test during our report with you during our report. It\’s compared to past experiences in the stock market, S&P 500 dropped 32% or 53% during the financial crisis. I couldn\’t have made that up. It doesn\’t hit home until they actually see it. The couple I was sitting with is like, they\’re afraid to even look at what their accounts are. They didn\’t even look at them again, but they said, \”That\’s probably what my account\’s worth.\” I said, \”Are you willing to take that risk?\”
Joe Krause:
Yeah, and that\’s good.
David Bezar:
Yeah. I just wanted to … Joe, how much time do we have in this segment?
Joe Krause:
You have four minutes in this segment.
David Bezar:
Let me tell you a quick story.
Joe Krause:
Okay.
David Bezar:
Karen and I have been in business. Our offices have always been here in the Fort Washington Office Park here on Virginia Drive. We started our first financial planning company right next door, 1015, an office building, 1035 Virginia Drive. So we were on the first floor in that building for a number of years. Then as the weather changed, weathers change. Right? I just don\’t remember as a kid getting no snow in the winter and unbelievable hurricanes in the summer back when I was growing up. But when we were in that office building, Joe, the first floor during these really high rains would flood completely, basically put us out of business for a month or two while the building owners would go in and restore everything, take out the dry wall, all that done.
David Bezar:
That happened one year and then we\’d say, okay, what\’s the chance that\’s ever going to happen again? And then two years later, Joe, it happened the second time and we were out of business for about two months while they came in and did that. Then I moved the business down to the end, at 1250 Virginia Drive, and I said, there\’s really no chance that …
Joe Krause:
On the other side of the street [crosstalk 00:30:24].
David Bezar:
On the other side of the street, there\’s no chance that this floor is going to … first floor office space is going to flood out.
Karen Bezar:
Because it\’s never happened.
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David Bezar:
Right? We\’re in 100-year flood plain, but in a matter of six years, Joe, that building flooded as well. So I got flooded out of business over a six year period of time, three times. Do you know what my solution was, Joe? I moved to the second floor. The 1987 market crash, the 2000 dotcom bust, the 2007 through 2009 financial crisis. Now we\’re in a correction. We\’re actually in a bear market right now. We are in a defined bear market. How many more times does it take for a future retiree to consider moving to the second floor? Stop the old mentality of just stay the course and everything will be fine. See, for me to stay in business and be successful, I had to move to the second floor so I did not get disrupted.
David Bezar:
I don\’t know if that makes enough sense to everybody listening. On the next segment, Joe, I\’m going to talk a little bit about the opportunities that do exist because it\’s not all doom and gloom. I want people to hear, this is when you may never, during the rest of your lifetime, for most of the people who are listening to this, have the opportunity that we have right now, and I\’m going to share a lot about that in our next segment.
Joe Krause:
Wow. Let\’s get to the break and we\’ll get to that on the other side. This is Roadmap to Retirement, the radio show. We thank you for listening on Talk Radio 1210 WPHT as we go to the break. Coming up on Tuesday, March 24th Thursday March 26th at 6:30, it\’s the taxes in retirement webinar, and it starts at 6:30. Go to thrivefinancialservices.tyl16lnm-liquidwebsites.com. Back on the other side of the break. Stay tuned.
Speaker:
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:
Back here on talk radio 1210 WPHT from the second floor. David, good story going into the commercial break. Right to you for our final segment.
David Bezar:
Yeah, Joe. Like I was saying before the commercial break, this is a great opportunity. As fearful as anxiety ridden as so many people are, is if we can get them to a level of being calm and practical and look at things for what they are. The world\’s not coming to an end. Just go back through history. There have been circumstances. There was the plague, there was influenza of nineteen … There\’s so many things that have happened, but we\’ve social media and just the nature of our culture now is just to be such a heightened … You\’re either the lowest lows or the highest highs. We want to be that, again, that calming, rational voice for people to think through and not get their retirement disrupted.
David Bezar:
Just a couple quick things, Joe. I said early in the show that this will pass and it will, and if we think about the days and the weeks and the months before all of this happened, everybody was at an all time high. The markets were doing phenomenal. People\’s 401ks were going through the roof. Snap of a finger, things turn around. Again, it\’s never as good as you think it is. It\’s never as bad as you think it is. For us, here at Thrive, we\’ve been talking about a significant market correction for over a year. It\’s coming. We know it\’s coming. Now. We had data, and we were a little geeked out on this type of stuff, but we had the data that we understood that there were fundamental flaws in the overall economy.
David Bezar:
Things weren\’t as great as they were, just like they\’re not as bad as what you\’re hearing on CNBC or MSNBC or whatever. Look at it this way, right? If you believed in some of the stocks or mutual funds or ETFs that you owned right before this, and now they\’re at 30% less value, does that mean you now no longer believe in those? Now, for some of us that have been sitting on the sidelines with a big pile of cash waiting for this all to happen are very, very excited. But the opportunity that presents to probably a lot of the listening audience is this whole concept of we talk about, which is optimizing your taxes during retirement and getting the federal government to be the smallest possible partner in your future as compared to a pretty sizeable.
David Bezar:
Because now with all of this, all of the economic stimulus that the government\’s throwing in, what\’s happening to our deficit? It\’s getting bigger and bigger and bigger and bigger and bigger. Some day, probably not too far off into the distant future, I don\’t think I could have many people give me a case that taxes are not going to go up dramatically.
Joe Krause:
Yeah, right.
David Bezar:
Dramatically. Moving from maybe a 24% marginal tax rate, 22%, maybe up into the mid-30s. If you know that that\’s probable, why not take action today? Now let\’s say, I\’m just gonna do easy math. These aren\’t the actual numbers by any stretch, Joe, but let\’s say we owned Apple stock and Apple stock right before this crisis was at $200 a share. That\’s not what it was, but let\’s just call it $200 a share and you bought it for $100 a share. So you had a capital gain on that stock of over 100 bucks. But now today, let\’s say Apple stock is $150. It\’s not, but let\’s just say for easy math. So you\’ve reduced your capital gain down by $50. Now you probably still believe in Apple stock.
David Bezar:
I believe in it. I believe in Microsoft. Holy smokes, that company has got whack, but man, it\’s a great company. It\’s going to do phenomenal. There\’s so many other companies that I could describe that are classified as great American companies. They\’re not damaged, they\’ve got great balance sheets, they\’re depressed stock prices because of what\’s going on emotionally. If I believe Apple stock is going to go back up to $200, which I believe it will, why wouldn\’t I sell it today in my IRA account, realize the $50 gain, pay the taxes on that gain at a lower rate that I will probably pay on it in the future, put that Apple stock now into a Roth IRA account, and as it goes back up to $200 a share, that $50 increase in share price is no longer a capital gain because I don\’t have to pay taxes on it inside the Roth.
David Bezar:
Joe, does that sound like it makes sense?
Joe Krause:
It makes sense.
David Bezar:
Okay. Bret, did I explain that clearly?
Bret Elam:
Yeah, I mean, Roth conversions. Again, listening audience, you\’re going to end up paying tax on the whole thing, including the profit and what you put in there, but David described it well. Do you want to pay the tax on the harvest or the seed? And when you have a harvest that turn back into a seed. That $200 went back to 150. Well, don\’t pay the tax on the whole 200 when it was there. Wait for it to go back then do the Roth conversion. Again, everything David just spoke about is going to lead the future taxation increases. Again, when you get an opportunity, a 30% decline, yeah, you\’re going to pay tax on the whole 150, but that\’s okay. You\’re going to miss the tax back up all the way back to 200. Again, it\’s going to grow for tax free with dividends.
Joe Krause:
Forever. You\’re going to miss it forever.
Bret Elam:
No RMD distribution. Kids are going to get a tax free. It goes on and on.
David Bezar:
Joe, this goes right in the face of what most financial advisors advice to their clients are. In these type of economic conditions, these depressed situations, these chaotic situations, the common call for most advisors is, \”Joe, calm down. Just stay the course. You\’re going to be fine. It\’s going to come back.\” We don\’t disagree with that. The part that we disagree with is, stay the course. Because if you\’re a smart investor, you recognize it\’s not only about the appreciation of your shares, but what\’s the tax consequence on that appreciation. If you get this epic moment in time where you\’ve reduced, where you were really high, your appreciation was high, it\’s now down, you could buy that … As long as there is a gain, the way the IRS rules work is you can buy that stock ETF, whatever, right back. Same day or the next day. You don\’t have to wait 30 days.
David Bezar:
You only have that condition as if you\’re selling for a loss. But here we\’re selling for a gain. We\’re still up. We bought it at 100, it went to 200, it\’s now back to 150. I\’m selling it at a $50 gain, paying less in taxes, converting to the Roth, and as that recovers, I\’m putting that stock into the Roth, as it recovers, tax free. No RMD passes to your children or your beneficiaries. Tax free. Again, not conventional. It\’s not what we\’re hearing most times, but when you do the math, when you take a breath, you clear out your head and I\’m looking for the most optimal way to manage my retirement, it\’s a no brainer, a no brainer.
David Bezar:
That\’s just one example of the things that we talk about at our physical workshops at our now to be virtual workshops until the foreseeable future.
Joe Krause:
How many people know that, what you just described?
David Bezar:
I want to tell you something, Joe. I don\’t want anybody to be scared by what I\’m about to say, but over the past couple of months, what we have noticed here at Thrive, and then one thing here at Thrive is we have zero prejudice. We don\’t care how many zeros you\’ve got on your financial statements. We treat somebody with $50,000 just like we treat somebody with $5 million. That\’s our commitment and that\’s the way it is. Again, because we are focused on doing good by people, we don\’t worry about whether people … Yeah, people do good by us. We don\’t worry about it.
David Bezar:
So we don\’t push any which way. But recently, I think the word has spread about the sophisticated tax planning that Thrive does for its clients. We see say more typical than not now that the average person walking through the door has five, six, eight, $9 million in retirement assets. And you asked the question, how many people know it? None of them. Now you would think somebody who saved that kind of money in retirement would be at a level of financial education, that they will be, \”Oh yeah, I do that. Nothing. They look at us initially and go, \”I never heard that before. It makes all the sense in the world. Why wouldn\’t I do it?\” Now, we don\’t have to say anything. Right? Yeah. Why wouldn\’t you? There is no reason not to do it. It\’s pure.
David Bezar:
Here\’s the interesting thing. Not to give a plug, but Ed Slott who was a very well respected national CPA tax expert, he\’s on PBS all the time. He endorses that strategy constantly, all the time. He says if you\’ve got traditional IRAs, all they are is ticking tax bombs. At some point, you\’re going to have to pay the tax man on it. Why not pay the least if you think that taxes are … and again Joe, that\’s just one example. If you found that one example like holy smokes, what I promise you as a listening person that gets onto our webinar, you\’re going to hear about 10 others. We cover 11 specific topics that really are aha moments for most people.
David Bezar:
Now with the additional stress of what we\’re dealing with, there is no better time than the present to get on that. So if you\’re interested, go to thrivefinancialservices.tyl16lnm-liquidwebsites.com. That\’s our website, tons of stuff on there. You can register, you\’ll see a pop up window that lets you pick the time. Whether it\’s Tuesday, March 24th or Thursday, March 26, start time is at 6:30. You can pick. We\’ll be doing that live, and I think it\’ll be a great experience for our listening audience.
Joe Krause:
Well, really, really good segment, David. Thank you very much for that. Bret, I\’ll go around the horn. I\’ll come to you. You have 30 seconds before I have to say goodbye. 30 to you, 30 to Karen and then I\’m outta here.
Bret Elam:
Dang. Don\’t make emotional decisions, be a rational sounding board, don\’t turn on your social security early. There are plans for healthcare. Gang, just reach out. We\’re here, we hope we\’re that rational sounding board.
Joe Krause:
Good stuff. Great job. By you, Karen.
Karen Bezar:
I say, go on our website, go on to the webinar. What else are you doing? We can\’t go shopping. We can\’t go to the movies. We can\’t.
Bret Elam:
I\’m looking forward to it.
David Bezar:
We got new jokes. [crosstalk 00:43:50].
Bret Elam:
I was just going to ask you about it.
Karen Bezar:
Please, what\’s it going to hurt? You really might learn something and I think you will.
Joe Krause:
Really, really good stuff. I thank you all. Thank you David, thank you Karen, and thank you Bret and thank you Thrive army for continuing to listen to this radio show and continuing to get yourself educated. The Delaware Valley needs Thrive Financial Services. That\’s going to do it for this week\’s edition of Roadmap to Retirement, the radio show. On behalf of David, on behalf of Karen and on behalf of Bret, I\’m Joe Krause. See a Tuesday night on the webinar.
