Speaker 1 0:02
It’s going to be a big year for those who are planning to retire in 2025 If that’s you, we’ve got some things that you need to do before saying goodbye to 2024 That and more today on Retire Smart Maryland Radio.
Speaker 2 0:20
Welcome in to Retire Smart Maryland Radio with Prashant Sabbath. Welcome in to Retire Smart Maryland Radio, your host Prashant Sabapathi. You can find him at Elite Income Advisors. They’re headquartered in Ellicott City. They have a satellite office in Annapolis for your convenience. Again, it’s always about the importance of having that retirement plan, being ready for it. Prashant is an independent fiduciary, he’s a published author, couple of books already, physical health, retirement, wealth, and retire abundantly. Again, it’s all about having that plan. I’m Morgan Patrick, and each and every week, it is always this type of discussion, but we give you an opportunity to get on the calendar with Prashant and his team at Elite Income Advisors, and these appointments we open up on the radio show are complimentary, so listen up and grab one when we make them available. So, Prashant, before we dive in, how was your week?
Speaker 1 1:12
Yeah, it is so busy around the fourth quarter, just because everyone’s kind of getting ready for the end of the year, getting involved with their tax plan, see if there’s any money moves they should make, both with their investments and their taxes, before the year’s out, and it just creates a natural reset point just before the holidays, so that you can go into the next year, 2025 feeling really confident about your footing financially. So, appointments are going really quickly, it seems like every time slot feels like it’s taken up, but our office gets really busy. It’s definitely the most fun time of the year for us, though.
Speaker 2 1:46
Having the plan, helping people get to and through retirement, that’s what we do here on the program. And most of us are going to work our, you know, three decades, four decades, you know, in that job, putting money away. There’s a survey that I wanted to talk about today. Northwestern Mutual found that Americans believe they’re going to need, and listen, I’ve heard this number before. We’ve had this conversation that people have this magic number of a million dollars to retire. Well, this new survey from Northwestern Mutual, the number is a whopping 1.4 6 million per shot to retire comfortably, so what do we need to do first? I want your reaction to the number 1.46 It’s going to be different for everybody, but I used to always think a million, and I think a lot of people out there probably do the same, but this survey saying people think they need 1.46
Speaker 1 2:38
Yeah, I think it has to do with a couple things, number one being that people are living longer, and so if you’re living longer, you simply need more resources to get through that tail end of your lifespan, and so if you’re living three or four extra years and healthcare costs are rising, inflation, as we’ve seen here last couple years, is through the roof, it’s going to take more money to get you through the end of life, especially when you don’t have access to guaranteed income, like a pension the way that we used to, and I know we’re going to talk about that a little bit later on in the show, so you know we have a little bit of a checklist here of all the different things that you can start to do to make sure that your retirement plan is on track, and number one, there is fine tune your retirement spending plan, and that involves doing what I would call a detailed expense review. You do not want to estimate when it comes to putting together your spending plan. Track your current spending closely, do that for three to six months, so that you have an understanding of what your expenditures are going to look like number two is project the future costs associated with your spending plan, you got to consider things like housing, health care, inflation, travel, hobbies, and then number three is stress test that spending plan, imagine yourself in different scenarios, look at the cost of health care closely, especially medicare, build in some wiggle room for unexpected home repairs, and that is what’s going to allow you to make sure that your spending plan is as resilient as possible, and that your income can actually keep up.
Speaker 2 4:15
Okay. Retire Smart Maryland radio talking about a kind of a checklist, make sure you’re on track here. What do you need to do? So, fine tune the spending plan, maxing out your retirement savings, so whatever you can give to those accounts, Prashant, you absolutely do it on a regular basis.
Speaker 1 4:30
Yeah, that could include increasing your 401 k contributions. If you have a 401 k, or even a Roth 401 k, you want to contribute as much as possible, especially if your employer is offering a match. If you’re over the age of 50, you should take advantage of what’s called the catch-up contribution. Catch up contribution allows you to save even more money than the traditional limit as you get closer to retirement. And then the third thing is to consider other forms of savings. Things like Roth IRAs, brokerage accounts, health savings accounts are great tools to help you through the retirement phase of your lifetime. Now, you do have to check eligibility requirements on some of those things. You may or may not be allowed, per IRS guidelines, to make contributions to those things, but if you’re not looking at those, or if your advisor is not talking to you about all these alternative savings vehicles that could help you retire a little bit more smart and a little bit more comfortably, I think you have to ask the question, Am I working with the right specialists? I can’t tell you how many times radio listeners and television audience folks come in to visit with me, and we start talking about some of these more complex strategies, like HSAs or Roth IRAs, or converting to a Roth IRA, and they say my advisor, who I’ve been with for 20 years, has never once brought this up, and to me that is a huge, huge concern, Morgan. So, if your advisor hasn’t talked to you about this, you got to get educated. We’ll open up the phone lines here before the end of the segment to offer everyone the opportunity to come in for a free complimentary visit with our team, but that’s where we have to start when it talks, when we talk about maximizing retirement savings.
Speaker 2 6:14
Yeah, you just want to be on the same page, want to make sure you have that plan. We got time for one more. We’re going to hit this on the checklist, make sure you’re ready for retirement. We talked about fine-tuning that spending plan, maxing your retirement savings, what you are donating to that. And now we’ve got Social Security. Carrie Hannon is Yahoo personal finance columnist, and she has the latest on the cost of living adjustment.
Speaker 2 6:34
What that means is when you look at the average Social Security check is for retirees is around $1,870 We’re talking about a bump up of maybe, maybe $46 I mean, it is helpful, but the problem here is that many seniors still grapple with rising health care costs and rising housing costs. The statistic is something like one in four seniors, they rely on their social security check for 90% of their income needs each month.
Speaker 2 7:05
I’ll tell you, just 90% that number alone is kind of shocking. So, therefore, Prashant, the last thing we’ll talk about in this segment is just having strategy for your social security.
Speaker 1 7:14
It’s exactly right. Social security is a potentially million dollar decision for you, right, especially if you’re married, how you coordinate the benefits with your spouse is extremely important. You could be leaving 10s of 1000s of dollars of additional income on the table by not optimizing your benefit, and so you have to get it right. In my opinion, you really only get one shot to get it right, and so you should be armed with as much information and education as possible as to what your available options are, so that you make the correct social security decision for you and your family. Let’s go ahead and open up the phone lines here. The phone number is 800-653-8404 We do it every week on the show, it’s 800-653-8404 You dial that number, you’ll be able to schedule a free visit with our team of specialists at Elite Income Advisors. You come on in to visit with us, we’re going to walk you through how to optimize your social security. If you’ve never done a retirement spending plan, we’ll help you get to how much income you need to have coming in. We’ll take a look at your investments, we’ll talk about health care costs, and then yes, we will talk about the threat of rising taxes. All that is a part of our Retire Smart roadmap. To the first appointment with us, it’s totally free. There’s no obligation. Just pick up the phone, dial that phone number right now. It’s 800-653-8404 We are back with more Retire Smart Maryland radio right after this,
Speaker 2 8:52
we are back on Retire Smart Maryland Radio. Your host, Prashant Sabapathi, independent fiduciary. You can find him at Elite Income Advisors. Check them out online. Wonderful resource website, easy to remember, Elite Income advisors.com That’s Elite Income advisors.com Again, experience working with his clients, getting them ready for retirement, opportunity to get on the calendar with Prashant. It can happen at any point in the course of this show. These are complimentary. All you got to do is call 800-653-8404 That’s 800-653-8404 I’m Morgan Patrick, and we get back to this discussion again. Things you need to be doing, kind of a short checklist for you, fine tune that spending plan, maximize your retirement savings, make sure you’re doing that there, and then also develop that social security strategy. It’s going to be a big part of your retirement. And now, Prashant, assessing and adjusting, not just assessing, but also being able to adjust your investments, and this is something that happens, you know, during your planning and during your retirement.
Speaker 1 9:57
This is what I would consider regular. Maintenance on your retirement plan, you want to make sure that your investment portfolio actually aligns with your retirement timeline and your risk capacity, and what is typical is to consider gradually shifting towards a lower risk approach the closer you get to retirement, but believe it or not, not everybody needs to do that. It’s a total function of whether or not you’re going to depend on your portfolio for a significant amount of retirement income when you get there. So that’s number one, is reviewing your asset allocation. We find so many people that are incorrectly invested outside of their own stated risk capacity. If you’ve not done a revisitation of that retirement risk capacity, it’s a great exercise to go through as soon as possible, especially if you’re within five years of retirement.
Speaker 2 10:54
I mean, have a plan, you don’t know what you don’t know. Work with a fiduciary and map this out. It’s, you know, that example I’ve always used is, you know, if you go on a road trip and you don’t know how much gas is in your tank, yeah, you could run out. If you don’t know what’s going on in your portfolio, it could be a big problem as you move towards retirement. Working with a fiduciary, working with a team can help you plan this, and again, give you confidence that you’re not going to run out of gas, right. All right. Last one in this short list, again, just a checklist is plan for health care, the costs of health care, and we could even go
Speaker 1 11:30
into long-term care. These are things, because you mentioned it before, Prashant. We’re living longer. That’s exactly right. I think people underestimate the cost of health care, so let’s talk about Medicare first. If you’re turning 65 in 2025 you want to do a thorough evaluation of your Medicare option, so look at Part A, Part B, Part D. You might even look at a Medigap policy, and then make sure you’re up to speed on your enrollment deadlines. If you miss some of these enrollment deadlines, you could be hit with a pretty significant penalty. So, Medicare enrollment is a big deal. The cost of Medicare is something that I think a lot of people do not take into consideration, especially things like Medicare Part B. So, original Medicare Part B is linked to your income, believe it or not, the higher your income was two years ago, the higher potentially you will pay for Medicare premiums, and so a lot of people who are really good savers think that they’ll get to retirement, their cost of health care will go down because they’re transitioning onto the government’s health care program, and when, in fact, what we find is a lot of times people’s health care costs go up in retirement because they did a great job earning income and saving money, so you have to plan for health care costs. And then the second part of this is the long term care. You want to explore long term care options and how to fund that. You could do that through insurance, you could do that through using your own assets, believe it or not, there’s new ways out there where you can get long term care coverage without buying long term care insurance. It’s one of the most intriguing, powerful tools out there to prepare yourself for a long term care situation. You just have to ask yourself, if you go into a nursing home or a home health care situation, kind of like my mom did before she passed away, and you have to incur 8000 10,000 or $12,000 per month of additional expense to pay for that. How is that going to affect your retirement plan? Are you going to be put at undue risk of running out of money? If you don’t have the answer to that question, this is something that you have to look at, in my opinion, and you need to do it immediately. It’s such a huge risk that goes unplanned for.
Speaker 2 13:49
How are you doing on that checklist? Are you ready? Are you fine-tuning your spending plan? Are you maxing your retirement savings? Are you developing that social security strategy? Are you assessing and adjusting those investments, and are you planning for health care and the cost of health care? If you are, congratulations. If you’re not, grab an appointment with Prashant and his team. 800-653-8404 These are complimentary. Get that Retire Smart roadmap, get that Retire Smart roadmap put together for you. Again, the number 806 53840 38404 We’re going to shift gears. We’re going to talk about an article. Prashant, you brought it to my attention. Very, very interesting. The US retirement system gets a C plus in a global study. This is Jana Herron, senior columnist with Yahoo Finance. Obviously, this caught your eye. Let’s talk about
Speaker 1 14:39
it. Yeah, I was shocked, and then when I read the article, it was actually not that shocking. So, you hear that, you see that headline: America gets a C plus for retirement readiness, so to speak. And the primary reason for that, I think, Morgan, and the article brings this out, is two different things: number one is pensions have started to. Go away, right. So, like, a lot of baby boomers had a pension, they worked for the same company for 20 or 30 years, 40 years in some cases, and when they retired, they had a guaranteed paycheck that could help simulate the paycheck that they had while they were working, and oftentimes what we find is people with pensions, by the time you pair the pensions with Social Security, you’re finding that that’s all the income you need to comfortably retire, but the article cites that only 21% of the US workforce actually has a pension in this day and age, which means the remaining 79% who don’t have a pension are forced to rely on things like the 401 k or the IRA or the TSP to make sure that we can live in retirement the way that we want. The trouble is with people living longer and the market becoming more volatile and interest rate environment being a lot less predictable. What we’re finding is that Americans are projected to outlive their retirement savings by 10 years, and so in order to solve the retirement puzzle, in order to retire smart and retire comfortably, I think we have to solve this problem. How do we make sure that we’re going to have all the income that we need without the security of a pension, and do so in such a way that we’re never going to be at risk of running out of money. I’ll tell you what, Morgan, if you can solve this problem, in my opinion, you’re more than two thirds of the way there to being able to
Speaker 2 16:30
have a comfortable retirement. Well, let’s talk about solving that problem, and I’m going to bring up a word that a lot of people kind of go, “hmm, really, and it’s called an annuity. Now, and when I say that, you need to kind of just take, take a second, take a deep breath. We’re going to have this discussion, because if you think about it, Social Security, what is it? It’s an annuity. What is a pension? It’s an annuity. So, there’s a way to build your own pension, and I know that this is something you talk about, probably not in every meeting that you have with a potential client or a current client, but this is something where you can create that pension for your client.
Speaker 1 17:07
Yeah, and honestly, it’s such a powerful tool to be able to leverage, quite frankly. So we were meeting with a radio listener recently, and they’re about four years away from retirement, 68 years old, 67 years old for the spouse. They’re four years away from retirement, and what we found is that they had $1.7 million and their concern was the same concern that a lot of our folks have, which is, How do we make sure this 1.7 million doesn’t ever run out on us, and what they needed to withdraw from their portfolio was about $78,000 per year, and their concern was, what happens if the 1.6 or 1.7 goes to a market crash and it goes down to a million, yet I still need my $78,000 of income, I’m withdrawing way too much, and now I’m at undue risk of running out of money. So, here’s what we did for them, Morgan. Through the use of an annuity, we put $800,000 of their 1.6 into an annuity, 50% of their net worth we put into this annuity, and in four years’ time, guess how much income that annuity is going to provide, more than they need in this case, just about what they need, about $78,000 of awesome will be generated, and by the way, it will be 100% guaranteed for each of their lifetimes, so his life and her life. If he passes away first, they’ll be able to count on $78,000 a year of guaranteed income. So, think about what we did. We used 50% of their assets to create 100% of their income, and we did that using no market risk, and when we showed them that concept, they’re like, so you mean the other 800,000 that we didn’t put in the annuity can just sit in the market and work for us, and even if it does go down by 10 or 15 or 20% we’re still going to be okay. And the answer to that question was based on the income target, yes, absolutely. And so there, look, there’s always a trade off when you use an annuity. I’m not saying an annuity is the right thing for every single person, but for those of us who do not have a pension that’s going to guarantee us a paycheck in retirement, it’s an incredibly powerful tool. Now, one of the trade-offs with annuities is that you’re going to give up the ability to grow at a super fast rate, right? Okay, I think a lot of people get into annuities and their advisor tells them, hey, you should expect this thing to earn eight or 10 or 15% a year. Well, most annuities are not equipped to do that, so you have to have the proper expectations when you get into these things. You have to plan appropriately, you have to not put too much money into them, but I’ll tell you what it. If you use them the way that they’re intended to be used, and that is in sync with the rest of your retirement plan, it is one of the most powerful tools in helping you retire, because ultimately it creates income security.
Speaker 2 20:14
When you explained it to the client that you are using as an example, what was their physical reaction?
Speaker 1 20:22
Let relief. Yeah, more than anything, it was relief. I asked them, because I asked everybody, because I say I always tell people when they come in to visit, my team does this too. I’m going to show you a bunch of ideas. If you think any of these ideas are not a good fit, you’re welcome to be upfront with me. And I showed them this idea, and they instantly felt relief, and I said, “Do you think that this would be a good idea? Do you think that there’s anything about this that you’d be opposed to? And they said, “Absolutely not. Who would be opposed to having a guaranteed stream of income for the rest of their life? And these people are not big risk takers either, Morgan. So, like, the person who’s a big risk taker, an annuity might not be the right fit for, but for folks who are low in risk, don’t want to have a ton of variance or uncertainty surrounding their retirement paycheck, this is a great option. I’ll tell you what, if you don’t have a pension, if you don’t know where your retirement paycheck is going to come from, or how you’re going to supplement Social Security to fulfill your retirement income needs. Pick up the phone and give us a call, folks. It’s totally free to come in. The phone number is 800-653-8404 If you’re just not sure whether or not an annuity is the right thing for you, come on in and get an independent evaluation. You might find that it’s not the right thing, or you might find that using something like an annuity could give you a tremendous amount of income security for your retirement. If you’ve been thinking about it, but you’ve never taken action, now is your chance to come in for free, visit with our team, get a retirement plan put together for you, and see what your best options are. 800-653-8404
Speaker 2 21:58
When we return on Retire Smart Maryland Radio, we’re going to talk about love, that’s right, the love languages and how it relates to retirement planning. You know, guys, you’ve all taken this quiz, that’s coming up next, Retire. Smart Maryland radio, your host Prashant Sabapathi. You can find him at Elite Income Advisors. They’re headquartered in Ellicott City, satellite office in Annapolis, for your convenience. Prashant is an independent fiduciary, helping his clients get ready for their retirement. I’m Morgan Patrick, and each and every week, it is the importance of having the plan, getting you that, that retire smart roadmap, so you have that confidence in retirement, and there are many of you that have done an amazing job saving your entire working life, and you’re just going to start withdrawing from your accounts when you get into retirement. That is not a plan. There are a lot of things that can happen. There are things that you can also plan for, so you’re not surprised by anything. Have you thought about health care? If you thought about the tax ramifications, how are you going to take social security? How does it all mesh together for you? That’s called planning, folks. The opportunity to get on the counter with elite income advisors, going on during the course of this show, they’re complimentary appointments. All you’ve got to do is call 800-653-8404 that’s 800-653-8404 All right, it’s time to talk about two big topics: money and love. Now, we had a little fun, we went back and we took a look at the five love languages, and we all have one. Our love language is how we show love to our partners, because we all have different ways of showing affection, but is there a connection between the love and also money? The answer is absolutely yes. It turns out that your love language seems to influence how you go about planning for retirement. So we’re going to break down each of the love languages right now and tell you the connection between how you love and how you spin, but before we do that, Prashant, did you ever take this test? Did you ever take
Speaker 1 24:06
it? Yeah, I’ve been asked about this a little bit more formally by my wife before we, you know, made it serious. Well,
Speaker 2 24:14
everybody wants to know if you’re going to be compatible or have the best chance to be compatible.
Speaker 1 24:18
Yeah, absolutely. I mean, hey, we talk on this show about who’s a good fit, right? That’s exactly it. It’s just as true in, you know, your personal life as it is in your financials. All
Speaker 2 24:31
right, is there one? Is there one where you kind of.. that’s me? Is there one in the jumps out at
Speaker 1 24:37
you? Yeah, I mean, for me, for sure, it’s acts of service. Okay, that’s what I appreciate the most. I think for my wife it’s definitely quality time or physical touch, you know. So, I know we get into it, but before we do that, how about you? You know, we talk about me all the time. I want to know about you.
Speaker 2 24:57
Yeah, I’ve had this exam. This test put in front of me from a romantic standpoint several times, and now I’m, I am totally in love, and just so, so very happy. But you know, my significant other asked me to take this just to see if we were compatible, and this is like the third time I’ve taken this test, and I am quality time and physical touch, so I like to hold hands, I like to spend time, so yeah. So you put me on the spot, and yes, I am, I’m QT, I’m quality time, that’s the one that I, I recognize, I guess my side of things, and certainly, guess what, my significant other was also quality. We, we hit it off there. So let’s, let’s kind of do the parallels. The first one is words of affirmation. I love you, offering phrases of, you know, acknowledging efforts and providing positive feedback. What’s the parallel with retirement planning?
Speaker 1 25:51
To me, it’s setting clear goals, right? What you say to others has the power to uplift and encourage other people, so you like to clearly articulate your retirement goals to get motivation and direction, and when you talk about your objectives, in my experience, it keeps it fresh in your mind. You like to remember what you’re working towards. That’s number one, is set clear goals, and number two is open communication is so important. You also like to discuss your retirement plans with a financial planner to get support and also to be accountable, right. Retirement planning is a journey that takes work, and what better way to hold yourself accountable than to work with a professional who has done this with hundreds, if not 1000s, of other people, where they can draw on some of their other clients’ experiences to bring some insight into how to help you be the most successful. So, clear, set clear goals and have open communication, not just with your partner, but with your financial professional as well. We are hitting the love language quiz, as it pertains to retirement and planning for retirement. So, words of affirmation, check, and here’s yours. This is your wheelhouse. Acts of service, what’s the parallel? Yeah, so I go back to proactive measures, right? So acts of service and retirement planning really means taking steps that benefit your future self, so that you can set yourself up to be in the best possible situation in the future. So one way to do that is automating your retirement savings, right? So that is an act of service to your future retirement self by increasing and automating the amount that you’re saving towards your retirement nest egg. Number two, reduce your unnecessary expenses, that’s also an act of service. Now, a real act of service is helping your loved ones. You might want to consider how your financial well-being allows you, and not just allows you, but empowers you to help your loved ones, whether it’s your kids or your grandkids in some way. I was meeting with a client for a review earlier this week, and they have to take out their required minimum distribution, which, of course, you have to do when you’re 73 years old or older, and what they do with that money is they actually take all of their RMDs and put it into their grandkids’ 529 plans and their grandkids’ custodial accounts, and that’s a nest egg that by the time their grandkids get to 18 or 21 years old should have 10s of 1000s of dollars that Grandma and Grandpa put away for their benefit, and that is a true act of service. I love that. I love seeing my clients do that, and it’s been really a joy getting to see their reaction to what they’re able to do for their loved ones in the future.
Speaker 2 28:42
Oh, wow, just a true generational gift. We are talking about again the love languages that we’ve all taken the exam. We want to be compatible with our better half, and how does that relate to retirement planning? So, words of affirmation, setting clear goals, open communication, acts of service, we just talked about being proactive, helping out loved ones, just continuous improvement on ourselves. And now the next one is receiving gifts. Now that’s always nice, but let’s, let’s tie it into retirement planning.
Speaker 1 29:15
So for me, this goes to three things. Number one is maximizing your benefits, you look for opportunities where you can receive a gift, and what comes to mind is your employer’s 401 k match, or maybe a tax break that the IRS would offer you, or even dividends off of your existing investments. All of these are financial gifts, so to speak, that help you maximize your retirement security. Number two is investing in yourself. You like to allocate funds to retirement accounts because it feels like you’re giving a gift to your future self. Each contribution that you make to that 401 k or that Roth IRA or that thrift savings plan is a present that’s going to appreciate hope. Fleet over time, and appreciation is the third part of this. You recognize and appreciate the gift that compound interest actually is. The more money you have saved for retirement, the more it’s going to compound and grow as you get closer to retirement, and that is the best gift of all, is watching your money grow without you having to actually do anything, that is the best gift.
Speaker 2 30:24
We have two more, and we’ll hit them really quickly in this next one. It’s kind of obvious to me, quality time, that was me on the emotional side when dealing with a relationship, but when it comes to your retirement, you need to spend time on this.
Speaker 1 30:38
Yeah, to me, this is about focus. Okay, spending quality time on your financial plan ensures that you make wise money decisions. You work through financial problems and think about them. This might involve, like, you know, researching investment options, planning out your retirement lifestyle, thinking about taxes in retirement. How about doing regular reviews? Just like relationships flourish when you give them enough attention, so does your retirement plan, right? Just like you wouldn’t go buy $100,000 car and never do maintenance on it, you wouldn’t do the same with $1,000,000.02 million dollar retirement plan. So you got to be doing regular reviews, maintenance, and check-ins with your retirement plan as well. All right. Last one, holding hands, physical touch, love language. This was a big one for me when it comes to the romance, but when it comes to retirement, what does physical touch bring? Yeah, when it comes to retirement, physical touch brings tangible actions, right? Physical touch translates to taking active steps that have a real impact on your retirement readiness, so that could be purchasing new assets, whether that’s a rental property or a new set of stocks or mutual funds that better your financial position, or it could be the taking the tangible action of paying off higher interest debt, and that means that you’re always being proactive, I think being proactive as opposed to reactive when it comes to your planning is a huge part of your retirement savings journey. Lastly, on this one is having interactive engagement, handling your finances directly with an advisor in conjunction with your spouse makes managing your investment properties or your retirement portfolio a little bit more real, a little bit more immediate. So, I think that’s super important. If you can relate to any of these things that we’ve talked about, whether it’s getting together for a tax planning session, an investment planning session, understanding where your paycheck is going to come from, if you can relate to any of those things, but you haven’t done it yet, pick up the phone and give us a call: 800-653-8404 We have offices in Ellicott City, Annapolis, or you can book a virtual appointment to meet with our team of specialists. We’ll walk you through the Retire Smart roadmap, help you map out your income, optimize your social security, and talk about how to reduce your future retirement tax bill. 800-653-8404
Speaker 2 33:00
When we return on Retire Smart Maryland Radio, there are four major financial gaps that could cause a serious impact on your retirement planning. We’re going to talk about those, so you can avoid them when we return. Retire Smart Maryland radio hosted by Prashant Sabapathi, and you can find him at Elite Income Advisors. Check them out online, it’s a great resource website, Elite Income advisors.com Again, easy to remember, Elite Income advisors.com Prashant is an independent fiduciary, couple of books already to his credit, physical health, retirement, wealth, and retire abundantly. I’m Morgan Patrick. In each and every week, it is about retirement planning, the importance of having that roadmap to get you there. The Retire Smart roadmap is going to be available for you. Complimentary appointment, we’ll tell you about that as we move through. Also, Prashant, I want to take a second. You guys have a website that is now going to help you with taxes. It’s called Test My Tax bill.com This has been very popular.
Speaker 1 34:16
Yeah, actually, we’ve been seeing so many people going to the website Test My Tax bill.com You can enter in a couple of basic informational points about how much you have saved for retirement. You can play with an anticipated tax rate, anticipated growth rate, and the output will actually be a report, an electronic report that will show you the potential tax bill, the potential tax liability that is embedded in your pre-tax retirement accounts, like your 401k your IRA, your TSP, and what’s great about that is we’re finding that so many people have not thought about tax planning when you get to retirement. If you saved a million dollars for retirement, do you really have a million dollars? Members,
Speaker 2 35:00
no, you don’t
Speaker 1 35:00
know you don’t, because you’re in a partnership, you’re in a partnership with Uncle Sam and the IRS, and the issue with that is that you’re not even the majority partner, you’re the minority partner, and you have to listen to what the majority partner says, they set all the rules, you just have to play by them, and so without having any idea where tax rates are going to go in the future, you have to start to think about not just reactive but proactive tax strategies to mitigate or even eliminate your future retirement tax bill. Just remember this, folks. Let’s say that you needed to withdraw $40,000 a year off of your million dollars. Okay, but now taxes, instead of being, let’s say, your tax rate was 25% but now your tax rate goes up to 35% but you still need the $40,000 net in your pocket. How much more are you gonna have to take out of that portfolio? You’re gonna have to take out significantly more to account for the rising taxes. When you start to take too much out of your portfolio, that’s what puts you at that additional risk of running out of money. Tax planning is such an underrated part of the retirement planning process. If you haven’t talked about that or thought about that with a professional, it’s a great opportunity to do so, because we’re heading into the end of the year, and the end of the year is the very best time to think about tax planning strategies.
Speaker 2 36:27
All right, that website again, Test mytaxbill.com that’s testmytaxbill.com Check it out. So, retirement, it’s that golden time we all dream about it, but are we going to be really prepared? Truly prepared, it takes more than just wishing it to be true, right? So we wanted to dive into four critical gaps that can absolutely sabotage even the best laid retirement plans. And the first one, I mean, we offer up education every single week here on this show, the knowledge gap. Yeah, so the knowledge gap is this
Speaker 1 37:00
idea that many people simply don’t understand how retirement finances work, or how to think about how much they need to save, or how much they need their investments to grow, or most importantly, where their income is actually going to come from. So, how you bridge this gap is number one, you got to educate yourself, read, read books, articles, online resources about retirement planning. In fact, if you visit www.eliteincomeadvisors.com that’s Elite Income advisors.com that’s my website. At the top right hand side of the website, you can visit our education center. It’s got different resources on all these topics, on investments, on taxes. You can watch our TV show segments and our podcasts, which are on Spotify and Apple Music, about all these different topics, so that you can get educated. Once you get educated, you want to seek professional advice. Talk to an advisor who is a fiduciary who can help you assess not just your needs, but also create a personalized plan to address those specific needs, that’s where we have to start with bridging the knowledge gap. If you feel that you’re deficient in education on this topic, go visit our website, take advantage of the free resources that we have to help get you on track.
Speaker 2 38:16
Well, I tell you, already off to a great start. You’re listening to the show, but go to Elite Income advisors.com and click on that tab and get even more education. Again, it’s very important. It’s your retirement. Be ready for it. So we’re talking about the gaps. You need to be prepared for these. You need to understand them. You need to try to cover them. You don’t want these things to kind of derail your retirement resources gap. Obviously, this is the monies
Speaker 1 38:40
and the resource gap is this idea that it can be challenging to save enough money for retirement, especially when you have competing expenses like housing, education for your kids, healthcare, and just the normal day-to-day expenses, right, especially with everything getting more costly over the last couple of years, so how we bridge this gap is creating a spending plan. We talked about that in the first segment. You want to break it down into the needs and then the wants when you get to retirement. Number two is increase your income. Remember, while you’re working, your financial life, it’s just money in and money out. Paychecks come in, expenses go out, and you try your best to save as much money as you possibly can. When you get to retirement, that concept does not change. It’s still very much so about money in and money out, but what changes is where the money in comes from. If it’s not coming from your paycheck, it’s got to come from somewhere else, your 401 k, your IRA, your Thrift Savings Plan, and so oftentimes advisors talk about ROI, right, Morgan? ROI, and ROI means what? Return on investment, return on investment, but you know what I think ROI is. The closer you get to retirement, it’s not return on investment, it’s reliability of income, the closer. You get to retirement, so it’s all about your income. It’s all about your paycheck. If you don’t have a reliable paycheck in retirement, you’re not going to be properly set up, in my opinion, to have that comfortable, risk-free retirement. So, when we talk about resources, create the spending plan, increase your income, and start thinking about where is your ROI, your reliability of income, going to come from?
Speaker 2 40:24
So, important to have these gaps covered. There’s an opportunity to get on the calendar with Prashant Sabapathi and his team at Elite Income Advisors. Simply call 800-653-8404 that’s 800-653-8404 Secure one of the appointments, get that retire smart roadmap put together for you, and again have that confidence as you move towards your retirement. And these appointments are complimentary, 800-653-8404 So, the knowledge gap, you know, we’re talking about four of the big gaps you need to be aware of, and make sure you’re covered. Now, knowledge gap, I get it, I understand
Speaker 1 41:00
that, there it is resource gap, that’s your money. Yes, absolutely. This is the one that kind of got me. Perception gap, yeah. And what the perception gap is, it’s self doubt, right? It’s self doubt, because that can be a major obstacle in and of itself to achieving not just your retirement goals, but all your goals, right? If you don’t believe you can succeed, you’re less likely to take the necessary steps, and I’m going to go off on a little bit of a tangent here, because you know one of my favorite athletes of all time was Kobe Bryant, right, and we know about the Mamba mentality and everything else. I had the good fortune of watching Kobe’s personal coach do a do a keynote when I was at a conference in Nashville. His name’s Tim Grover, and he was pretty much the architect of the Mamba mentality, and he worked closely with Michael Jordan as well. And I was just going back one night, and I was watching these old Kobe interviews, and if you remember when he tours Achilles, he was in shambles for about a minute after that, sure, and he went on, you know, late-night talk show, and they read the blog post that he made, and the quote that always sticks with me was, “If I’m in a fight with a bear, pray for the bear, right, and that spoke to the resiliency and the and the ability to overcome self doubt, even at his lowest point in time, where he just torn the Achilles. We didn’t know if his career was over. He said that’s not going to hold me down, and that’s not going to be an obstacle to me achieving my goals. And when it comes to your retirement, it is the exact same thing. Okay, now you focus on overcoming the self-doubt by setting realistic goals, start with small, achievable goals, gradually increase them over time. Focus on your progress, celebrate your successes, and learn from your setbacks. Number three, visualize your future. One of the questions my team asks every single person that comes in to visit is, What do you want retirement to look like? What are your goals exactly? What is your most fulfilling version of retirement, and what does that look like? And number four, surround yourself with support. Make sure you’re working not just with your spouse, but also with an advisor who knows what they’re doing, who’s helped other people retire, who can share their perspective with all the mistakes that other people have made, so that you are well educated on how to not make those mistakes yourself. When you have that combination, it allows you to overcome the self-doubt and feel really good about your retirement lifestyle.
Speaker 2 43:36
Last gap, and you can absolutely knock this one out of the park. That’s the empowerment gap that’s taken charge,
Speaker 1 43:41
yeah, and it’s about taking ownership, right? That’s what it is. It’s taking ownership of your retirement planning and making it a priority. I always say when you take that first step to come in to visit with us, that shows me that you’re serious. Nobody who comes in to visit with me is just coming in to waste their own time or waste my time. It shows that you’re actually serious, and so I love that. If you come in and take that first step, my team is going to treat you with the respect you deserve to have an independent analysis of your situation. Now, look, I get it. Nobody wants to go into somebody’s office who they’ve never met and be afraid that they’re going to be sold something, right? That is the primary barrier to why people don’t visit with financial professionals. So, here’s what I will say. When you come in to visit with our team, I’ll give you a guarantee that there will be no pressure. When you come in to visit, you’re not going to be asked to make a decision that you’re not ready to make. All you’re going to be there to do is talk about your situation, your concerns, and figure out whether or not my team’s even the right fit to help you through your retirement planning journey. Last opportunity for today’s show to get on our schedule, the spots go really quick, especially at this time of the year. The phone number is 800-653-8404 that’s 800-653-8404 When you come in to visit, we’ll help you map. Out your income for the rest of your life. If you don’t know where your paycheck is coming from, we’ll share with you how you can create a little bit more income security and a lot more reliability of your income with your income plan. We’ll help you optimize social security. We’ll talk about how to minimize that future retirement tax bill. And lastly, we will do both an investment analysis, a risk analysis, and a fee analysis for your retirement plan. This is called the Retire Smart Roadmap. It starts with your phone call 800-653-8404
Speaker 2 45:30
Another edition of Retire Smart Maryland Radio in the books for Prashant Sabapathi. I’m Morgan Patrick. We’ll see on the radio next week, you
Announcer 45:42
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