Speaker 1 0:01
For coming up today on Retire Smart Maryland Radio, we’re going to write you a prescription for financial health and talk about seven financial diseases that retirees should avoid. Stay with us if you want to stay healthy, wealthy, and happy through your retirement.
Announcer 0:22
Welcome to in to Retire Smart Maryland Radio with Prashant Sabapathi.
Speaker 2 0:29
Welcome in to Retire Smart Maryland Radio. Your host, Prashant Sabapathi of Elite Income Advisors, headquartered Ellicott City Satellite Office in Annapolis, for your convenience. Prashant is an independent fiduciary. He’s a published author, couple of books already to his credit, physical health, retirement, wealth, and retire abundantly. I’m Morgan Patrick, co-host, and we go back and forth each and every week. It’s always about retirement planning and the importance of having such a plan to get you to and through. We’re going to give you an opportunity to get on the calendar with Elite Income Advisors, and see kind of where you are, and we know you’re probably in one of two spots. You have done a nice job, amazing job, saving money, putting money away. It’s in your retirement accounts, but that does not equate to a retirement plan. You need to have that roadmap right, need to have it put together for you smartly. And then there’s another category, and that would be you’re halfway down the path in your planning, but you’re frustrated, you would be a candidate for a second opinion. We have those, they are complimentary for our radio listeners. We’ll tell you about those as we move through the program. So, Prashant, before we dive in on the parallels between health and retirement, and some of the things you, you really need to be aware of. How was your week, bud?
Speaker 1 1:45
Week’s been good, you know, just busy, man, just busy as ever. I feel like we’re getting into two very important, important parts of the year. Number one, obviously, is the election, and we did a show, I think it was a couple weeks back, on, you know, mixing politics and looking at past presidencies and how that impacts retirees at that point in time, and so election season is always really busy around the office, but the second thing is like we’re coming up on the time where people who are on tax extension are being forced to file, right, so it’s a natural time to revisit talking about taxes, especially in preparation for year end, and what kind of strategies we can take advantage of.
Speaker 2 2:30
And at Elite, you guys have taken some steps to help out in the tax category. Tell us about this new website.
Speaker 1 2:37
Yeah, it’s actually really, really, really cool. What we did is we partnered with some people to develop some potential tax bill calculation software. Okay, so one of the things you can do is you can visit the website, it is Test MyTax bill.com Okay, that’s TestMyTax bill.com It’s going to take you to a potential tax bill calculator. All you have to do is enter in a couple different very basic bits of info, and you’re going to get a report generated for you that could show you the potential tax liability that your retirement savings carries, and what that does is it kind of sets the stage of how much of a tax burden is associated with your financial plan. From there, you have the opportunity to have one of my team members reach out to you and talk to you about how to potentially reduce that tax bill. And so it’s a really cool calculator. It’s totally free to use. Visit the website testmytaxbill.com play around with it, see what comes back, and see if there’s something there that maybe you didn’t know about before. It’s a really cool tool that we’ve installed,
Speaker 2 3:52
a wonderful resource. Again, it is testmytaxbill.com Crank in a few numbers and you’ll get some information back, and again, always about educating you as you move towards your retirement date, because a lot of things are going to come at you. So, we’re going to get into this discussion. Prashant, your family, a lot of them are in the medical field. It’s just, you know, we talk about it quite often. You went finance, they’re in the medical, but we’re gonna talk, yeah, we’re gonna talk about kind of the parallels between some of some of the stuff that’s out there that can really kind of derail us from a health standpoint, but also do the parallel and how that kind of relates to retirement planning. The first one is the big killer that’s out there, and that’s heart disease. A lot of people focus in on cancer, which we’re gonna get to, but heart disease is the big number one out there that takes so many of us, and if you had to parallel heart disease with financial issues, where would that, where would you find yourself? I mean, if you’re talking about that kind of comparison,
Speaker 1 4:55
yeah, you know, heart disease is one of these things that develops over time. Right, and it’s mostly due to things like poor lifestyle choices, and so just like we have poor lifestyle choices that kind of compound over time and leads to this terrible disease, failing to account for long-term risks in your financial plan could eventually lead to what I would call financial heart disease, which is the threat of running out of money or living in a lifestyle that is not consistent with what your expectations were when you originally planned. So, what are these long-term risks that are oftentimes overlooked? By far, I think the two most kind of common long-term risks that are overlooked are inflation, right. While we’re working, we have the ability to have our paychecks increase over time, hopefully, and a lot of times people forget to make sure that their retirement paycheck actually increases as well, which is not so great for trying to combat inflation. So, we got to make sure that we’re aware of inflation, and the second thing is longevity, right? With people living longer and longer, you got to ask yourself, what happens if I live to be 8590 95 years old, right? And if that happens, am I at risk of running out of money? And so, financial heart disease, overlooking the long-term risks like inflation, longevity, but those are things that are compounded over time by improper planning.
Speaker 2 6:28
Retire Smart Maryland Radio, Prashant Sabapathi, our host. I’m Morgan Patrick. We’re talking about, you know, what our health issues are, you know, they are what could be, and we’re doing parallels with your finances, and how it kind of equates, so heart disease, that’s overlooking long-term risk when it comes to your finances, and now the Alzheimer’s disease, this is almost like, you know, this is a tough one, because it really hits home, a lot of people are concerned about it, but when it comes to your, your retirement, how does that parallel with
Speaker 1 7:00
Alzheimer’s? Yeah, and you know, my mom had dementia, and so dementia, Alzheimer’s, like kind of the same type of disease there, and what we know is Alzheimer’s progressively affects memory, and it affects cognitive function, which in my mind can be likened to letting your retirement plan go dormant, so to speak, right, and so for us the key symptoms of this from a financial planning standpoint is having a set it and forget it mentality, right. So if you just set up a plan, maybe did that 15 or 20 years ago, and you’ve never revisited it, then that’s an issue, right? Because the world has changed, your life, I’m sure, has changed, markets have changed, and so the lesson we can learn from this is that we want to be periodically checking our memory by reviewing your financial plan to ensure that your plan is still aligned with your goals. Okay, and so folks, if you’re feeling like you haven’t done a full on review of your financial plan, or you haven’t accounted for the long-term risks like we talked about, whether that’s inflation or longevity or the threat of rising taxes. If your advisor isn’t talking to you about this, I want you to pick up the phone and dial this phone number. It’s 800-653-8404 That’s 800-653-8404 When you dial that phone number, you will be able to schedule a free appointment with my team at Elite Income Advisors. Come into our office in Ellicott City, Maryland – that’s where our headquarters are. You can book a Zoom call as well. And let’s talk about your financial plan. Let’s figure out whether your plan is set up in such a way to provide you the retirement that you deserve. If you’re concerned about taxes, visit that website, test my tax bill.com Check out the potential tax bill calculator to get an idea of where you stand. Starts with that phone call, 800-653-8404
Speaker 2 8:57
When we return on Retire Smart Maryland Radio, we’ll continue the discussion and talk about obviously disease that we can face from a health standpoint, but also how that parallels with your financial health and your retirement. That’s coming up next on Retire Smart, Marilyn Riddick, you We are back on Retire Smart Maryland Radio, hosted by Prashant Sabapathi, Elite Income Advisors. Where you can find them, check us out online, great resource website, Elite Income advisors.com easy to remember, Elite Income advisors.com Prashant, a published author, two books to his credit: Fiscal Health, Retirement, Wealth, and Retire Abundantly. He is an independent fiduciary. And again, folks, it’s all about helping his clients get ready for their retirement. Two office locations headquartered in Ellicott City, Satellite Office in Annapolis. I’m Morgan Patrick. And away we go. We started off the show. Talking about, of course, the diseases that we face from a health standpoint, but also the parallel when you talk about financial health, what that means. So, heart disease, overlooking the long-term risk when you’re talking about your finances, Alzheimer’s, just a, just a horrible diagnosis, it’s there, but when it comes to the parallel with your finances, just failing to review and update your plans, which a lot of us are guilty of. Now, this next one, Prashant, diabetes, it is growing like crazy. We probably are a little bit more in the know and can diagnose it even better. But how does that parallel with what’s going on with our finances as we head towards retirement,
Speaker 1 10:43
yeah, you know, like I kind of look at it like it’s almost like mismanaging your cash flow, right? And in the comparison here is that we know diabetes requires careful management of, you know, your sugar levels and your lifestyle habits, and to me, that’s a lot like managing your cash flow, because managing that cash flow, I talk about it all the time, it’s the money in, money out management that is essential to prevent financial ruin when you get to retirement, and when you really fail to control your spending early in your retirement years, that could be a lot like poor glucose control, which ultimately compounds and results in long-term consequences. So, the key symptoms of this are overspending in the early years of retirement. It’s also improper planning, insofar as to say that maybe we didn’t map out our monthly income target with enough precision and accuracy, and so the lesson we can learn here is that you want to have a spending plan in place before you get to retirement, and then you want to manage your, for lack of a better word, your financial diet to avoid costly overspending that can lead to future financial shortfalls.
Speaker 2 12:03
Yeah, and you start talking about diabetes, and you’re also talking about monitoring your health constantly. Same thing goes for retirement planning, you need to keep your finger on the pulse of what’s going on with your finances, again doing the parallels between your health, but also and some of the disease that can pop up on your way through life, but also doing the parallels on your financial health and how it all relates. So, this next one, another another category where the numbers are alarming. We have a fat country, Prashant obesity is a big, big problem. Now, when we look at that and we compare it and contrast it to retirement planning, we got to go probably in the debt category, because we’re expanding in that the high interest stuff is growing like crazy, but obesity paralleled with debt.
Speaker 1 12:52
Yeah, it’s exactly right. It’s like accumulating too much debt, and we know that obesity strains the body, creates a higher risk for other health issues, and I think we all experienced that during the COVID times, right? Where we were hearing about comorbidities and things like that, and debt is kind of the same, right? When you have debt as a part of your financial plan, it puts additional strain on all the other parts of your financial plan, right, it straps your income a little bit more, it increases your stress, and that ultimately leads to financial inflexibility and a reduced quality of life. And so, what we want to try to do here is, we want to reduce our financial weight by minimizing our debt before retirement, that’s a huge part of the planning process, in order to create more flexibility and less stress and more comfort during our retirement years. You know, like, I think a lot of our audience, including me, by the way, has struggled with this. Right, I’ll never forget a couple years ago I went into the doctor and he pretty much all but told me, like, hey, if you don’t lose 20 or 30 pounds, you’re gonna have a huge problem when you are 15 or 20 years down the road, and when a doctor says that to you, it freaks you out, it’s scary, man.
Speaker 2 14:16
Well, and now let’s, let’s turn the page over to your finances, if you had an opportunity to sit down with a fiduciary and kind of open up that portfolio and have someone basically tell you possibly that there may be some issues down the road, wouldn’t you take that opportunity if it comes at no cost, no obligation, no pressure to see how your money is, what’s your health when it comes to finances, before you get to retirement. I mean, you’re talking about a way to kind of make sure, almost like that doctor’s checkup for your own physical well-being. You’re doing this for your money,
Speaker 1 14:54
that’s exactly right. And if you look at every major asset in your life. Whether it is your home or your health, you’re getting those things checked up and having maintenance done on those things every year, right? Like, you would never buy a 50 or $100,000 car and then never take it in for servicing, right? You would never get a million dollar house and not take care of the roof and the gutters and the HVAC system, right, but so often the thing that we’re going to depend on in retirement is our planning, our money, yet we don’t ever do maintenance on it. And why is that, right? And same thing goes with our health, you go see the doctor every year, why are you not going and seeing the financial doctor every year, not necessarily even to make changes, but just to make sure that you’re on the right track, and that’s what we do when folks come in for those, like you said, complimentary appointments with our team. Again, that phone number, 800-653-8404 you dial that number, you’ll be able to schedule that free appointment, and it’s just a conversation. You’re not agreeing to become a client, you’re not agreeing to do business with us. In fact, we’re not agreeing to take anybody as a client, but what we are doing is we’re getting you exactly what you need, which is a comprehensive look of your entire situation to determine whether or not there are markers, whether they’re financial red flags, or what have you, that you can proactively take action on to make sure that you’re in the best financial health possible, moving forward.
Speaker 2 16:28
It’s all about that financial health. We’re having a discussion, and it’s about the parallels between, you know, our health, but also our financial health, and what all of this means. And you’re going to go through life, and you may face some challenges on the health side. Your money is going to face similar challenges we’ve talked about already. Heart disease, number one killer that’s out there, and when you relate that to retirement planning, it’s just overlooking what is going to be your long-term risk. You got to make sure you’re not doing that. Alzheimer’s, we have discussed horrible disease, and that is, you know, when you look at your finances, just failing to review, failing to update, that’s the parallel diabetes, just mismanaging of cash flow. When you look at the retirement side, obesity, it’s the high interest debt that’s there, it can really be a killer when it comes to your retirement. And now we get to cancer and the big C, it’s in a lot of people’s lives. I mean, it is just absolutely amazing how many people you probably know that have been diagnosed with it from a health standpoint. Good news, they’ve had a lot of advances in how they treat cancer, the different types, but when it comes to your finances, Prashant, what kind of.. I mean, what would classify as a cancer when you’re looking at, say, a portfolio,
Speaker 1 17:42
unfortunately, what comes to mind, because you know my grandfather passed away of cancer. My father was diagnosed, and he’s in remission, which is great, but oftentimes what we find and what we see, and I’m sure our audience can relate to this, is cancer often goes undetected, isn’t it, until it’s too late. What about the parts of your financial plan that go undetected. What about hidden costs like that tax that you didn’t know you were going to pay? What about the fees that you unknowingly pay, whether it’s to your investments or your advisor? What about health care expenses? While we’re on the topic, what about the health care expenses that retirees incur that they never ever plan for, right? Like all of these things are potential health issues, financial health issues that go undetected until it’s too late, and so you want to have those regular screenings, so that you can get educated on what those taxes are that you’re going to pay, whether it’s the tax on social security, like I can’t, I can’t tell you how many times just in the last couple weeks here people have come in to visit and we’re talking about taxes on the social security benefit that they’re going to receive, and they say to me, well, hang on a second, I paid the taxes going in, you’re telling me I had to pay the taxes coming out, like a lot of people don’t know that you pay tax on social security income when you receive it, which is totally counterintuitive. I mean, we paid payroll taxes going in, why should we pay the taxes coming out? But that is something that we’re going to have to deal with. So, visiting with your fiduciary to help get you educated on taxes, on hidden costs and fees and potential health care expenditures. You got to do that, and you got to do it every year, and doing so will help you mitigate some of those hidden dangers before they cause that irreparable damage.
Speaker 2 19:35
Talking about financial health here on Retire Smart Maryland Radio, and this portion of the program, and, and doing the parallel between our regular health things that could come up in our lifetime, and how it relates to, or possibly could relate to, you know, your retirement and your retirement planning. The last one, and again, Prashant, you’ve been in this business, you are a, you know, you’re a pro, I mean, you do this on a day. Daily basis, you’ve got many years under your belt. I don’t think you’ve experienced this from a health standpoint, but a lot of us have, and that’s arthritis. So, if you’re going through life and you’re headed towards retirement, arthritis might be something that’s on your radar from a personal health standpoint, but from a financial standpoint, what would equate to arthritis?
Speaker 1 20:22
Yeah. yeah. And this is inflexibility, right? Like having a financial plan that is not flexible is, is an issue. And actually, believe it or not, I have dealt with this, and, and, and am dealing with this at the moment. It’s mild, but it is starting, right. And you know, my one of my aunts has terrible RA, and her life, her quality of life now is not great, right, and that’s because of joint stiffness, limited mobility, and when we have that kind of inflexibility with our financial plan, it can, it can cause issues, right? If you don’t properly adjust to changes in markets or changes in tax laws, or how your life circumstances influence your financial plan, that could lead to what I would consider to be a pretty suboptimal outcome, and so keeping your retirement plan flexible by being open to adjustments as your life changes, as the market changes, as conditions shift. That’s super, super important. Okay, so folks, if you’ve never gone through this financial wellness checkup to make sure that you’re in good shape, that you’re avoiding too much debt, that you’re not aware of the hidden fees and costs that your portfolio might have. If you’re fearful that your plan is not flexible enough to deal with the changes that life will throw at you, give us a call. That phone number is 800-653-8404 Book that free appointment with our team. We’re going to walk you through a social security optimization plan. We’ll help you calculate your potential future tax bill. We’ll even put together what’s called an income for life report, help you map out your income each and every year for the rest of your life, and take into account taxes and inflation along the way, this is called the Retire Smart Roadmap. You can have that conversation now. Just style the phone number: 800-653-8404
Speaker 2 22:28
When we return on Retire Smart Maryland Radio, it’s time for some pointers. Yeah, getting to retirement is easy, but getting through retirement might be a challenge. We’re here to help you. Retire Smart Maryland Radio, hosted by Prashant Sabapathi. You can find him at Elite Income Advisors, independent fiduciary, published author, couple of books already to his credit, physical health, retirement, wealth, and retire abundantly again. Elite Income Advisors, headquartered Ellicott City Satellite Office in Annapolis, for your convenience. I’m Morgan Patrick, and we talk retirement each and every week. Prashant, big news, new website. Again, we have Elite Income advisors.com great resource website, but because of all the concern about taxes, test my tax bill.com very quickly. Explain it to our listeners. What a great resource.
Speaker 1 23:31
Yeah, absolutely. I mean, test my tax bill.com Here’s what it does, folks. Like a lot of people don’t realize this, that because you’ve been putting money away into your 401 k, your IRA, your thrift savings plan for decades, you did that with the understanding that you would take the tax deduction upfront for making the contribution, and when you got to retirement, you withdrew that money, and when you withdrew it, you’d pay the taxes at that point in time, and the purpose behind all this is that we thought that we’d be in a lower tax bracket when we withdrew the money, but then the government ran up a ton of federal debt, and Social Security and Medicare are underfunded, as they’ve said, and so the writing is on the wall that we all kind of think that taxes are going to go up, and now all that money that you saved, whether it’s half a million, a million dollars, met with someone that had $2 million in their 401 k the other day, they’re going to be forced to take that money out and pay a potentially higher tax rate on it. Now, here’s the thing, you can mitigate that tax liability by just being proactive about your financial and tax planning, but the thing is, most people don’t know how to be proactive with it. When you go and use this potential tax bill calculator, again, testmytaxbill.com you’ll be able to enter in some of that data, you’ll be able to. Play with your average tax rate, you put in your IRA or 401 k value, and what’s going to happen is you’re going to get a report that shows you what your potential tax bill is going to look like. It will blow your mind. Okay, I was playing around with it the other day, and the amount of tax that could be owed on my million dollar IRA when I’m 70 years old is just mind blowing. Okay, but not only does it highlight for you the potential problem, it gives you some ideas on how to implement a solution. Now you want to do this in tandem with a fiduciary and with a qualified tax advisor, and so this tax software is not designed to give you the solution with 100% precision. It’s just there to give you a potential tax bill, so that you have an idea of what you’re up against. Once you know what the problem is, you can work with the appropriate professionals to solve it, but this gives you a starting point for how to have the conversation, and it will blow your mind.
Speaker 2 26:04
Yeah, I mean, it’s like you don’t know the playing field, and then all of a sudden, boom, you’re on the field, and you have an idea of exactly what could be coming your way, and also in time to plan to be the word you used that I think is so vital is proactive, you know, get it, get ahead of it,
Speaker 1 26:24
and actually, you know, what to piggyback on that is, when you look at this tax report, I think it would be impossible to look at this tax report and evaluate the current advisor that you’re working with, and if they haven’t talked to you about the things that you will find in this report. Then I think what’s going to happen is you’re going to make a change. Now, that doesn’t necessarily make mean that you’re going to make a change and work with elite income advisors. We may or may not be the right fit for you. That’s for us to all figure out together later on, but for a lot of people that look at this, it’s hard for them to look at it and say my advisor is doing a good job when that advisor has never ever talked to them about the potential tax bill that they face. Okay, and so whether you work with us or not, that’s something we can visit at a later time if we’re even a good fit for you, but I feel confident that if you’re working with someone and they haven’t talked to you about this, you’ll probably end up making a change one way or another, because the numbers are absolutely glaring. Okay, testmytaxbilll.com go check it out.
Speaker 2 27:28
All right, again, it’s all about being proactive when it comes to your retirement. Lot of different areas you need to make sure you’re covered on, and again, work with a fiduciary, map this out, and be ready for your retirement. You’re locked into Retire Smart Maryland Radio. Prashant Sabapathi, our host. I’m Morgan Patrick. We are going to get into some pointers now and adjusting to a new phase of life. We’re headed towards retirement. It can be tough, you know, when you think about it, no matter how old you are, because change is going to happen. But what about your money situation? Is it going to match up with how you like to play, how you like to spend, and don’t forget to set aside enough money for those fun things that are just going to make you happy. So, we’ve got some financial pointers, and if we have time, we’ll hit a few happiness pointers, because that’s very important, but you know, as far as finances, it’s so important, you guys at Elite, you focus in on a spending plan, and you need to do this before you get to retirement. Look, I say this all the time, I’ve said it every single day, I feel like for the last several years here, and I’ll probably keep saying it, and that is, while you’re working, your financial life is nothing more than money in and money out. At its simplest form, that is what is it? What it is, your paycheck comes in and your expenses go out. Now, when you retire, that doesn’t change. It is very much so still about money in and money out, but what changes is where the money in comes from. So,
Speaker 1 29:00
there’s two components to the retirement planning process. Number one, two core components. Number one is understanding your spending. Okay, if we don’t know what the money out needs to look like, how can we properly plan for the money in? So the first step is understanding your money out, and that is by creating a spending plan, list all the expenses that you’re projected to have in retirement, break it down by the wants and the needs, and whatever that number is, that becomes what I call your monthly income target. And then from there, we should design a money in plan, which we’re going to talk about here in a second. Design a money in plan to help you get to that money out target, which is the monthly income target. It all starts with creating a spending plan. You have to plan with the end in mind. If you don’t have a number that you’re working to, how can you accurately put a plan together? When you come in to visit with us, that is a question. Question, my team will ask you, okay? If you’re not prepared to answer that question, don’t bother booking the appointment, okay? Because you’re going to be wasting your own time, and quite frankly, it’s not going to be a good use of your time to come in to visit with us. But if you come in saying, I know I need $6,000 a month, or approximately $8,000 a month to retire, then we can truly help you. We can help you design a plan to get you to that income target, money in, money out.
Speaker 2 30:25
Yeah, so important. Have that plan, have a good idea of what you’re going to need as you go month to month, and you can do this before you actually get into retirement. Take it for a test drive, so to speak. So, pointers, we’ve talked about, you know, the spending plan, the social security piece of this Prashant, and how it all works together with your, the rest of your portfolio, and maxing the Social Security, if you can.
Speaker 1 30:51
Yeah, that’s exactly right. Because it comes down to once we understand money out, let’s talk about money in. So, where’s the money in going to come from? Number one, Social Security is a huge part of that money in equation, so we have to talk about, should I delay claiming my social security benefits until full retirement age, or do I wait till 70, because that can significantly increase my monthly income, which could provide me a larger safety net. So one of the things that we’ll do to help you understand the money in is we’ll run for you what’s called a social security optimization report. It’ll take you through all the different strategies on how to collect your social security benefit, and that way you’re armed with the information you need to make the best decision for you. The second thing we’ll do is we’ll review tax efficient withdrawal strategies. Right, so in order to supplement your Social Security, you’re probably going to need to withdraw from your 401 K, your IRA, your TSP, and you want to do so in the most tax efficient way possible. So, one of the things that we’ll talk about is how do we take what you’ve saved and use a portion of that to help you create the income that is required to supplement your social security to get to your monthly income target. Give you a great example. I just met with somebody earlier this week. She had a million dollars, I think I talked about this in a previous show as well. Similar case, she had a million dollars saved in her 401 k, and she needed to create $55,000 of income from that 401 K. The challenge she ran into, though, is she thought that she might be at risk of running out of money, and so when she was at risk of running out of money, one thing we’re able to do is protect $500,000 of the 1 million, and what that actually did is it’s going to provide her with $55,000 of income guaranteed for the rest of her life, and that closed her income gap. So, folks, there’s so many different strategies out there that you probably just have never heard of, that you’ve never been exposed to. When you come in to visit with us, come in with that monthly income target for what’s gonna, what it’s gonna take to make your retirement go, and we’re gonna help you design this income plan to fulfill that income target. Phone number 800-653-8404 it’s 800-653-8404 Morgan, I want to stay on this on the other side of the break, if we can. Let’s talk about the happiness pointers, and talk a little bit more about the financial pointers as well.
Speaker 2 33:25
I mean, so important. We’ve got a lot to talk about. We will do that when we return again. Retire Smart Maryland Radio. We’re back right after this, you Retire Smart Maryland Radio hosted by Prashant Sabapathi of Elite Income Advisors, headquartered Ellicott City Satellite Office in Annapolis, for your convenience. Prashant is an independent fiduciary, he’s a published author, a couple of books already to his credit, Physical health, retirement, wealth, and retire abundantly. I’m Morgan Patrick. And again, it’s always about being ready for your retirement planning, being proactive, not reactive. Stay ahead of this, folks. We have been hitting just some financial pointers when it comes to retirement. There’s going to be an opportunity to get on the calendar and see how you’re doing, and again, these appointments with Prashant and Elite Income Advisors are complimentary. You leave the checkbook at home just to see how you’re doing. A lot of you are sitting on portfolios, that is not a plan. You need a roadmap, you need a Retire Smart roadmap put together, and you can do that complimentary simply by calling 800-653-8404 That’s 806 53 38404 So, again, just to review the pointers we’ve given you so far. Again, spending plan, make sure you have one, make sure you’re revising it as you move towards retirement. Max the social security benefits, review the investment portfolio. Explore tax-efficient withdrawal strategies. Make sure you have a tax plan incorporated with your retirement plan. Now, let’s go health care. I mean, this is something that a lot of people put off, Prashant, and you just can’t do
Speaker 1 35:14
it. Yeah, so you know, I think one of the biggest misconceptions is that when I get to retirement, I transition to the government’s insurance, which is Medicare, and as a result I’m going to have great coverage, and it’s actually going to be cheaper than whatever I was paying when I was working. Now, here’s what a lot of people don’t know: Medicare may not cover all of your medical expenses, right? So we have to look at things like Medicare supplement plans, we have to look at Medicare Advantage plans, prescription drug plans, right? All of those things need to work in tandem with original Medicare Part A and Part B to comprise your overall health care plan. The thing is, there’s so many different options out there, which in a way is a good thing, but it’s also a bad thing, because the more information that’s out there, the harder it is to wade through that information to actually make a great decision, right, and I think a lot of our clients and our radio listeners can probably relate to that, so planning for healthcare is a huge part of this, and then the other thing is the cost of health care, right? A lot of people think that when we get on Medicare, our costs are going to go down, but did you know that Medicare costs are actually linked to your income? The higher your income is, the higher your Medicare cost is, and the issue is that if you spent your career saving money like you were supposed to into those pre-tax retirement accounts, like a 401 k or a tsp, you’re going to have to take out what’s called a required minimum distribution when you are between the ages of 73 and 75 years old, and when you take that distribution out, because you’re mandated to by the federal government, it counts as income, and so the higher your income, potentially the higher your Medicare premiums are. You have to have a comprehensive health care plan in place, and then long-term care is another piece of it. We can talk about that another time, but I know a lot of our clients have been through long-term care. I’ve personally been through it. We’re spending $10,000 per month for my mom’s care up until she passed away. It’s a tough, tough thing to go through. You got to make sure your bases are covered before you get to the retirement phase of your life.
Speaker 2 37:32
Yeah, and again, we’re not going to dive deep, but just off the top of your head, Prashant, when it comes to the long-term care, can you give our listeners an idea, if it’s in home or if you’re in assisted living, or if you’re in memory care. I mean, the expenses per month, they can be staggering,
Speaker 1 37:48
enormous, enormous. Some of the numbers just feel like suffocating, right? Like we were taking care of my mom at home, it was probably 16 hour a daycare, just a little bit of relief overnight. She didn’t need caregivers overnight, but we did it in the house, and it was costing our family 10,000 bucks a month, pretty much every single month. Some months it was more, some months maybe slightly less, but 10,000 bucks a month. There now, my father specializes in geriatrics and internal medicine, so he gets around on a lot of the nursing homes in the Howard County area, and a lot of the assisted livings as well. So, I get to actually talk with him about, hey, what are the costs like when you’re in that type of situation in the area that we’re in. We know Howard County is one of the most affluent counties in the United States. You’re talking about an assisted living being 567 $8,000 per month, and then certainly when you transition into things like private room in a nursing home, we’re talking 13 $15,000 a month in a lot of cases, and so it’s a huge expense. I think the question you have to ask is, if this happens to you, how are you going to deal with it, even if you have a million or $2 million saved, $2 million goes really, really quickly when you have to draw down $10,000 a month. And why is that? It’s because of the tax liability along the way. In order to net 10,000 a month, you’re going to need to withdraw probably 1314, 15,000 to account for the requisite taxes, so look, it’s a huge domino effect. Every part of your financial plan impacts some other part of your financial plan. Your health care plan has to be properly coordinated with your income plan, with your investment plan, and I think most importantly, with your tax plan.
Speaker 2 39:36
Yeah, I mean, we get on and we talk here on Retire Smart Maryland Radio about retirement planning, the importance of it, and you probably feel like you know, gosh, I’m just being bombarded. There’s so much that can happen. Well, it can happen. You got to prepare for what is going to be maybe unexpected, so being proactive, sitting down with a fiduciary, mapping out how you want it to go. In retirement, have the confidence in that plan. It relieves a lot of stress, and again, we’re just talking about some nice pointers, things that you can really get moving on. Make sure you’ve got your spending plan, make sure you’re figuring out how social security is going to feed into that plan and work with it. You know, the investment portfolio. Make sure you’re reviewing that on a regular basis. The tax efficient withdrawal strategies, that is a must. Again, health care, you’ve got to put it on the front burner. You have to plan for it. And we just got into a little bit of the long term care, but that was just a little bit of it. But again, it’s retirement, Prashant. I want to transition into what we want out of retirement. We want the happiness factor. Really, first things first, it’s a big change. A lot of people don’t, I mean, they work their entire lives, they look forward to retirement, they’re not quite ready for what’s coming. I mean, it’s a big change.
Speaker 1 40:54
Yeah, it is a huge change. And I oftentimes say that one of the things that we have the power of is we have the power of perspective, right, because we’ve helped so many households retire, and we constantly see these people for annual and quarterly reviews of their retirement plan. We don’t just talk about the financial side of it, right, like they share with us everything that they’re doing in retirement, and so I kind of have a good feeling on what makes people fulfilled in retirement, what makes people happy, and figured this would be a good time to share some of those things, and so here are some of the common kind of trends I’ve seen with my own clients, the ones that are really happy in retirement, I’ve noticed a couple, a couple things, figured I’d share these, so number one is people that stay connected tend to be happier, so what I mean by that is you want to maintain strong social connections and engage in different activities that can help combat some of those feelings of isolation and loneliness, because you’re right, Morgan, transitioning to retirement is a difficult thing to do, because it’s hard to find that purpose. For decades, our purpose was going to work, yeah, earning a living, being able to take care of our family, and a lot of that goes away when you retire. So, you have to be able to stay connected. That’s number one. Number two, we’ve talked about it in segment one of the shows. You want to maintain a healthy lifestyle, right, whether it’s a regular exercise, balanced diet, sleeping enough. You got to have a healthy lifestyle. And then the last thing, or one of the last things, is pursue the things that you’re passionate about that you never got to do while you were working, whether that’s traveling more, a little bit more adventure, right? Explore new hobbies, volunteer, give back to the community. All these things are things that provide a sense of purpose and a sense of fulfillment. When you get to retirement, do all the things that you never got to do while you were working. I think that’s so important.
Speaker 2 42:55
Yeah, it comes down to balance, and we get so just tied up, wrapped up in having the monies to retire, and you are dialed in to work, that’s all you’ve known for 30, sometimes 40 years, and then all of a sudden you know that outlet is gone, so you really have to work hard at the retirement piece of this, because once you get past the go-go years, once you get past maybe the travel, maybe relocating near the grandbabies, you, I mean, it’s it’s you, it’s you and your spouse, if you’re fortunate enough to still be with your spouse, if your spouse is still living, you know that is what it’s going to be all about. So you got to make sure you plan for the happiness part of your retirement. Now,
Speaker 1 43:38
the opera, and actually just to piggyback on that, real quick, it’s, it’s always funny to me when you hear advisors talk about this idea of like being able to retire on 60 or 70% of the income that you had while you were working, right? Like, if that’s your mindset, I’m probably not going to be the best fit for you. Okay, I’m just being upfront, and my team is not wired that way. We want our clients to have the retirement that they truly deserve after four or five decades of hard work, right? And to me, that means that you should have the income to do all the things that you couldn’t do, like when someone says to me, “I should be able to retire on 70% of what I had, I’m like, you worked 50 years to give up 30% of your lifestyle when you got to retirement, like that doesn’t make any sense to me. So we want to work with people that think really big and that are committed to creating a financial plan that allows them to do everything that they truly deserve after four or five decades of hard work, folks, this will be our last opportunity to dial in and book that appointment with our team at Elite Income Advisors Office Headquarters Offices in Ellicott City. We have supplementary office in Annapolis, or maybe you can just book a Zoom call if that’s easiest for you. The phone number is eight. 6538404 It’s 800-653-8404 When you come in, we’re going to help you put together a social security optimization report. We’ll help you put together an income for life plan, help you map out that income. We’ll do a forensic analysis of your portfolio. We’ll take into account the fees that you’re paying, both hidden fees and transparent, we’ll also look at the risk profile of your investments and figure out whether or not you are positioned appropriately. Lastly, we’re going to talk about tax. We have to talk about tax. We’ll take you through your projected tax bill and retirement and how you deal with it. You can also get started on that on your own by visiting Test My Tax bill.com Last opportunity to dial that phone number, 800-653-8404
Speaker 2 45:50
Another edition of Retire Smart Maryland Radio. In the books for Prashant, I’m Morgan. We’ll see on the radio next week,
Speaker 3 45:56
you The
Announcer 46:06
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Unknown Speaker 47:16
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