Retire Like Royalty

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You

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coming up today on Retire Smart Maryland Radio. Do you want to retire like royalty? We have four hard lessons learned by monarchs about money, and we’re going to give them to you, so you can keep your retirement fortune safe in your own castle.

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Welcome in to Retire Smart Maryland Radio with Prashant Sabapathy.

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Welcome in to Retire Smart Maryland Radio, your host, Prashant Sabapathy. You can find him at Elite Income Advisors Independent Fiduciary. He’s also a published author, a couple of books already to his credit, fiscal health, retirement, wealth, and retire abundantly, and again, that independent fiduciary, it’s all about getting you ready for your retirement, helping hundreds of its clients do so, and again, we’re here to help you. There’s an opportunity to get on the calendar with Elite Income Advisors, we’ll tell you about that as we move through the program before we jump into retiring like royalty.

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Prashant, how was your week?

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Hey, good to be back with you, Morgan. This is an exciting time for us. A week’s been busy, but we’ve actually just done a full on website relaunch, and so we’ve made a ton of improvements to our website, added some cool resources on there. One of the coolest things that we added was a projected tax calculator, and so if you go to the resources [email protected]

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you can put a little bit of info in about your situation, and get a projected tax calculator for what kind of income tax you might have to deal with in the future, and you can put in different assumptions. Actually, really cool tool, we’ve integrated that into the website. So, encourage everybody to go check out Elite Income advisors.com

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brand new website, lot of cool stuff going on, and we’re just trying to make it as educational as resourceful as we possibly can. So it’s been really exciting. Yeah, I mean, I saw the rebrand, the notification on social media – Facebook, Instagram, LinkedIn – it’s all over that. So again, if you want the information, the latest, and you want to follow them on social media, just search Elite Income Advisors, give them a like, give them a follow, and again, you would have known about the rebrand on Elite Income advisors.com looks fantastic, easy to navigate, so check it out, Elite Income advisors.com So there’s this old saying, Prashant, that money ain’t got no owners, only spenders. Well, if you want to find out if that’s true, all we have to do is go back in history, and there are a lot of monarchs that have amassed fortunes, only to have them dwindle away. So, the bottom line is that retirement means keeping what you earn, and you don’t want to end up like some of these most famous kings or infamous, who had the untold riches, and then lost them all over the place with just really dumb reasons. So, we happen to have four of some of these costly mistakes in front of us right now, and we’re going to learn from them. So, the first one, and it comes under the title of selling for short term gains. This is Henry the Eighth of England, we were around like 1491

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to 1547

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but why

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is Henry the Eighth of England falling into the selling for short, short term gains? Henry the Eighth’s reign saw immense spending, which included wars with, you know, like France, and the construction of different naval fleets, and

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you know, the interesting thing

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here is relying on one-time financial gains is not necessarily a sustainable strategy to fund Henry the Eighth’s ambitions, but what he did was he dissolved a monastery, seized their wealth, and that gave him the immediate financial relief that he needed to fund these types of projects, but that windfall was temporary, and England’s economy was eventually weakened as a result, and so what I’m getting at here is it’s routine to go through years where you make a 20 or a 30% growth rate in the market, and a lot of times you know you have half a million dollars and you earn 20% for the year. Well, that’s $100,000

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of return that we’ve gotten. A lot of people take that $100,000

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and they want to spend it because they’ve made it, and now they’re just going to reset back to the half a million that they had at the beginning of the year. This can be a very dangerous thing to do. You want to make sure that your money is continually compounding for you. That’s the entire point of investing it is to be able to compound, and so

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you want to be really careful, I think, Morgan, about keeping the short.

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Term at the forefront, when we invest, we’re always investing for the long term, and compounding interest is extremely important in building that retirement wealth and that nest egg for the next phase of life. Here on Retire Smart Maryland Radio, we’re going back in time, and we’re learning from history some of the monarchs that didn’t spend their money well. We just talked about Henry the Eighth selling for short-term gains, and now this next one, Louis the 16th of France, 1754 to 1793 This is procrastination. I’ll read you this: Louis again faced a financial crisis due to France’s mounting debt and cost of supporting the American Revolution; however, he hesitated to implement necessary economic reforms, including modernizing France’s taxation system, his failure to address fiscal problems effectively, helping ignite what was his own French Revolution within the country, leading to his overthrow, and, of course, his execution. What’s the lesson here about procrastination. Hey, Morgan, is this Louis the 16th of France, or is this like modern-day American laws? I

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don’t know, we might be repeating that. Oh, either way, man, I think the lesson is the same, that when you ignore financial problems, delay critical reforms, like has been done recently, and even during that time, in the mid 1700s

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these types of things can lead to catastrophic outcomes, and so one thing we’re always preaching is having proactive financial management, as opposed to reactive management, and proactive financial management includes having the willingness to make difficult decisions at difficult times to be able to better the long-term health of your financial plan, or on a more macro scale, the long-term health of our overall economy, right. And the first thing that comes to mind is things like Social Security and Medicare. There is a shortfall on those programs, those things have to be addressed, and they need to be addressed sooner rather than later. Otherwise, this is going to be a problem. Last one we have time for, we’ll go to Spain for this one. Philippe the Second, emotional spending 1527 to 1598 Now, Philippe inherited a vast empire of overextended, and he overextended Spain’s resources in numerous costly wars. The Spanish Armada’s defeat by England in 1588 along with continuous military engagements across Europe, draining the treasury. Now, Philippe declared bankruptcy multiple times, despite controlling some of the world’s richest territories. What do we learn from this?

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It’s all about risk, right? It is all about risk. If you overextend into things that are risky, aggressive expansion, it could be war that could ultimately lead to financial collapse. So, if you have abundant resources to be able to retire comfortably, you want to make sure you’re harnessing those resources in the most efficient, low-risk way to ensure your proper outcome in retirement, so folks,

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if, if any of the lessons learned from these monarchs are things that you can relate with, let’s open up our phone lines and give you the opportunity to call in. The phone number is 800-653-8404

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that’s 800-653-8404

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If you’re not sure whether you’re taking too much risk, if you’re overextended in the stock market, if you’re not sure

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what kinds of gains and losses you may be subject to, and what is worth harvesting versus what is worth letting compound, give us a call. You’ll be able to schedule a complimentary visit with our team of specialists, it’s going to help you put together a written retirement plan. It’ll include things like an income plan, social security optimization analysis, as well as a tax map to give you an idea of what your future tax liability looks like. That phone number, again, phone lines are open 800-653-8404

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When we return on Retire Smart, Maryland Radio Music has the ability to trigger memories of a specific time. We are going to bring out the record player, play some vinyl for you from the 80s. It’s all about retirement planning. It’s coming up next,

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you

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We are back on Retire Smart Maryland Radio. We are smarter as we enter in segment two, because we learn from history, the monarchs, and how they overspent or misspent their monies, and how it relates to your retirement planning. Prashant Sabapathy is your host, Elite Income Advisors, where you can find him. And, as we already found out today, a newly branded website, Elite Income advisors.com lot of great tools there for you. So, go kick the tires, Elite Income advisors.com Also, social media: Facebook, Instagram, LinkedIn. Give them a like, give them a follow, just search Elite.

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Income advisors. I’m Morgan Patrick. Again, we get into the retirement topics. It’s all about helping you get ready. Prashant is a fiduciary, helping hundreds of his clients get into retirement, enjoy retirement. Again, this is about having that plan. We’re gonna have some fun, though. It’s almost like we’re gonna play a little name that tune, right? I’m gonna give him a snippet of a song from the 80s, and these are huge hits, but then we ask him to identify the song and why we selected the song, why he thinks we selected the song, as it pertains to retirement planning. All right, here is your first clip.

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I wonder

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about don’t stop believing, don’t believe in, and the band name

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is Journey, Journey, and that’s Steve Perry, of course, great voice, the original Journey, but don’t stop believing. How does that relate to what people are going through as far as getting ready for retirement? Well, look, what’s the song all about? It’s about maintaining hope and persistence, and I think you can carry a lot of that into the retirement planning sphere, especially when it comes to your attitude towards things like your current financial goals, your future retirement goals, and so it’s really important to stay optimistic, but not just the optimism, but also staying committed to your financial plan, even when that plan seems to kind of hit the road bumps, right. And so I look at it, looking at a year like 2022 for example, right. Markets were down, it was a scary time to go through, and I think the people that had a written plan that they could rely on during that tough time are the ones that were able to stick to it, especially if you’re partnered up with an advisor who’s going to help coach you through that timeframe, right? Because financial planning is just as much about managing your emotions as it is about managing your money, and so

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you know, don’t stop believing. I think you have to maintain optimism, but what breeds optimism is being prepared, and the more prepared you are, the more equipped you’re going to be to handle the tough times. We are naming that song. This is Retire Smart Maryland Radio, Prashant Sabapathy, your host, and apparently all over the 80s music scene. Here is song number two, Snippet,

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you all right, that’s all you get. Do you know

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the band?

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I know the songs take on me,

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and it’s aha,

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right? Yeah, okay. And this was this was a big, big band, because they came onto the scene right as MTV was really kicking off, and they decided to sink a lot of money into their first video, which was partial film, partial sketch art,

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really groundbreaking, very memorable. But the song “Take on Me” how does that relate to retirement planning? It’s all about taking risks, and I think more importantly, seizing opportunities, and that kind of mirrors the need for making informed decisions when it comes to your retirement planning, as well as your investment plan. It’s all about being proactive and engaging with your financial future, kind of like we talked about in that first segment. You want to have a plan that is an actively managed plan, not a passively managed plan, right. We always want to be proactive instead of reactive, and to me that means understanding how much risk you’re taking, but more importantly than anything, part of the reason we call the firm Elite Income Advisors is we’re a big believer that income is at the forefront of

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a successful retirement. I always say the higher the income, the better the outcome when we get to retirement. So, where that starts is you have to have a tremendous understanding of where your paycheck is going to come from when you retire. When that income goes away from working, it’s gone. You now it’s on you to recreate that paycheck to provide yourself a standard of living that you can feel good about when you head to retirement. And so that’s what we help our clients with every day, is on helping them understand where their paycheck is going to come from, social security, pension, for 1k Roth IRAs, etc.

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You have to have that written plan in place. The time horizon, it’s different for everybody, but as we get closer, I mean, you really need to dial in that plan. We’re having a little fun on Retire Smart Maryland radio with some of the music from the 80s, and the reason we picked the 80s, because this is the decade where people are now turning 65

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they’re getting into their retirement years, and these songs are going to trigger a whole bunch of memories, not only from when they were growing up, but we’re also kind of tying it to retirement planning. We’ve already heard from Journey, Don’t Stop Believing, we’re doing a little name that song, and Prashant’s doing a fantastic.

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Fantastic job, and then, aha, take on me, just an incredible song. Who came along in the video age, the MTV age, and really kind of took off. Now, this next one, we’re not even gonna get the lyrics, but as this song opens up, it is, it’s a classic three man group. See if you can identify it,

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yeah. The police here,

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every breath you take. So,

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this is this, this one is one of my favorites, right? It’s like known for its repetitive, watchful nature. To me, this song always represented,

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like, if I was drawing the parallel, it would, it would represent the importance of monitoring and reviewing your retirement plan regularly, right? I always say to folks that come in to visit, very rarely

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is the plan you start out with the plan that you end up with, right? Life just kind of comes at you, and so your plan should have the flexibility to be able to make changes along the way as life comes at you. A great example of this, I had a client, dear client of mine, started working with him and his wife, probably about four years ago,

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and his plan was to retire in six years. This was back in 2020 He said, by the end of 2026

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I’m going to retire. Well, two years in,

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he had a stroke, and his life changed when he had that stroke. Couldn’t go back to work, and so we had to have the flexibility to adapt to create the income he needed to manage the investments in such a way where his time horizon changed very rapidly, and because we were able to design his plan originally with enough wiggle room to make those changes, him having the stroke

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was an event that we were able to manage around, and he didn’t have to add any additional financial stress in addition to the medical stress that he was already dealing with, so that’s just one small example of why flexibility and adaptability is so important to be built into your financial plan. So often I visit with our radio listeners, the people that watch our TV show, they come in to visit and they haven’t had the flexibility conversation with their advisor, so if your advisor has not built in wiggle room to your financial plan, I think you have to

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figure out whether or not you’re working with the right specialist, that may or may not be us. Not everyone that comes in to visit becomes a client, and I’m not saying that we’re a good fit for every single person, but whether you work with us or not, your plan has to have flexibility to make changes as life comes at you. Tell you, so important to

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be open-minded, you know. Things are going to change, things aren’t set in stone, and you really do need to kind of keep an eye on things every breath you take. Again, keeping an eye, with the courtesy of the police from the 80s, now this next one I had to double check on this one, Prashant, because I was like, this has got to be early 90s, but it’s 8687 here we go,

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all

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right, classic voice gone way too, yeah, gone way too early, but man, How does I want to dance with somebody relate to retirement planning? It’s, it’s upbeat, isn’t it? Like, does anyone ever listen to that song and not

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have a smile on their face? Like, it’s upbeat, it’s full of joy, and it to me it symbolizes the freedom that you hope to have when you get to retirement? That’s the point of working for three four decades, is to be able to get to retirement and do all the things that you never got to do while you were working, and so just planning well can make sure that when you get to that next phase of life, you’ll have the financial freedom that is required to be able to enjoy life to the fullest. My colleague Mike and I always talk about

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the three kind of phases of retirement rights: the go-go, the slow-go, and the no-go phases. Then the go-go phase is probably going to be between the ages of like 65 and 7778

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years old, and you have to maximize your retirement during that time frame. Hopefully, you still have good health. Hopefully, you have the money to be able to do it, and you know what’s important to you, and so you want to maximize that period of time before you hit the slow go, and eventually the no-go year. So, that’s what that song reminds me. I tell you, we’re kind of going back into the 80s, and how some of this music, and how it kind of hits with our listeners, but also

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parallels with what we do every single week. We talk about retirement planning and the importance of it. So, we’ve gotten Journey, Don’t Stop Believin’ Take on Me by Aha, Every Breath You Take the Police.

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Classic, and I want to dance with somebody, one of the best voices in the history of music, Whitney Houston. Now, this next group, they came out

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probably late 70s, but really hit it in the 80s, and it was just a different sound, and really changed the game.

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Sleight of hand,

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all right. I only gave you a snippet there, Prashant, but can you name, can you name the group, and can you name the song? One of my favorites ever, you two. Yes, with or without you. Yeah, right. I mean, just change the game, yeah. And it’s interesting because with or without you is really

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it’s about a duality, right? It’s balance, right. And so to me that signifies kind of

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the duality of planning for the future while managing your present needs at the same time, right. So I never want to be the advisor that tells someone,

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you know, you have to sacrifice every single penny today, so that you can have the retirement you want. You want to be able to live your life. I mean, most of our clients work really, really hard to accumulate what they have, and so they should be able to enjoy their life now. But it is important to maintain a longer term outlook. I had a client come to me just earlier this week, we’re doing a review, and he just entered retirement about six months ago, and he said to me, I’m thinking about buying this, this BMW, and so one of you know, I’m not a big car guy, but he’s like, you know, I’ve dreamt of having this car for, you know, less a bucket list item, he wants a bucket list item, and it was really important to him, right, and so one of the things that we have to do is we have to kind of figure out how buying that car is going to impact him in the short term and what that’s going to do for

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his planning and everything else for the long term as well. So look, folks, there’s a lot of stuff that we can take from just listening to these songs. I think if anything

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is important, it’s the importance of putting together that written retirement plan. That phone number again: 800-653-8404

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800-653-8404

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Come on into the office. Let’s design that written plan so that you have a real roadmap for where your income is going to come from, what kind of tax liability you’re dealing with, and how to ultimately structure your portfolio in a way that is consistent with your risk profile. Retire Smart Maryland Radio continues on the other side. What if we told you we have specific things that you need in order to retire well, and we’re going to give them to you? Stay tuned, you should. we are back on Retire Smart Maryland Radio, your host Prashant Sabupati. You can find him at Elite Income Advisors, independent fiduciary, published author, couple of books already, fiscal health, retirement, wealth, and retire abundantly, and as we have been talking about all show a new rebranded website, check out Elite Income advisors.com a lot of great tools there, just new stuff for you to try again, that’s Elite Income advisors.com again helping you with your retirement, and give them a follow and like on social media, Facebook, Instagram, LinkedIn, search Elite Income Advisors, and again, lot of information, anything that’s coming up with Elite, you’ll find it on social, or you’ll also find it at the website Elite Income advisors.com I’m Morgan Patrick. Each and every week, I go back and forth with Prashant, Mike, the team, and Elite, and it’s always about the importance of having that plan, so we do get into checklists, and we have a lot of checklists just all over our lives, right, things that we need to get done, house inspections, car inspections, all your medical stuff, all sorts of checklists. So, what about a retirement checklist? Now, after a review, we’ve got a few things that we feel like you can put on that list and check them off, all right. So, we’re going to make it easy for you again. These are steps. Let’s get to some of them, if not all of them. So, the first one: substantial retirement savings. That’s the first thing you got to have. You got to have the money, right? You got to have the funds to fund your retirement, that’s exactly right. So, what we’re talking about is retirement-specific resources, things like 401 ks, 403 bs, thrift savings plan, if you’re working for the federal government, IRAs, Roth IRAs. A good rule of thumb, and this isn’t advice, it’s just a general rule of thumb, is you want to take your annual expenses and multiply by 25 to 30 times. Okay, that gives us at least a starting baseline of what kind of nest egg we need to accumulate to be able to retire comfortably. Now, like I said, it’s not personalized advice, it’s just.

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Rule of thumb, you want to make sure that you have a tax-efficient withdrawal strategy in place. We call that your income for life plan. That’s one of the things that we’ll put together for you when you come in to visit with us, but having a robust nest egg and then having a withdrawal plan in place are two critical parts of the retirement savings piece

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of planning properly for the next phase of life. Just hitting some steps, check these off, write these down again. You know that substantial retirement savings, you’re going to need it. Multiple, I love this one. Multiple streams of reliable income. You guys are all about the income streams, yeah. And that operative word is reliable income, right. So, what is reliable income? I ask this question to every single seminar that I give, and we do a lot of seminars and educational events in the area. You can also visit Elite Income advisors.com if you’d like to attend one of my

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workshops here in the future. They’re all free to attend, by the way. But anyways, one of the questions I’m asking to people is, what sources of reliable income do I have? And here’s some examples of it. Number one is social security. In theory, social security should be reliable, because we’ve paid a ton of taxes for it over the course of our working career. Number two is a pension. If you’re fortunate enough to have earned a pension that should be an income stream that you can count on for the rest of your life. And then number three is something like an annuity, Morgan. Things like annuities are making a comeback, and that’s because interest rates have really gone up, and it’s making these income annuities extremely favorable, and that’s really cool, because an annuity is effectively a privatized pension, you can take part of your own money from a 401 k IRA TSP, put it into an annuity to give you a guaranteed income for the rest of your lifetime. I give you a great example of this, I have a client,

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relatively new client, who’s getting ready to retire in about six years, okay, and she’s got $1 million in her 401 k, and I feels really good about that. And the challenge is when she gets her retirement, she’s got to withdraw about $70,000

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per year to create the income that she needs, and so on the surface, a million dollars doesn’t seem like it’s enough to create 70,000 for this, not her life, it does not, but what one thing we were able to do is because she’s still six years away, we were able to take half a million dollars from her 401 k, so one half of the 401 k is going to create for her a guaranteed income of $54,000

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per year. When she gets to retirement, now it’s not the full 70 that she needs, but we’re going to use exactly half of the portfolio to create about 85% of the income that she actually needs when she retires, and that is a really good ratio. There, I want to use the least amount of dollars to create the highest amount of income. Annuities are a safe, guaranteed way to do that. That doesn’t mean annuity is the right thing for every single person, but it could be an incredibly powerful tool to help secure your retirement paycheck. I mean, it’s worth a conversation. There are many ways to get to retirement. Everybody’s going to be different. Your puzzle pieces are different, so maybe an annuity is a good piece for the portfolio. Again, having that conversation is a great way to start it. Complimentary appointments available with elite income advisors, Prashant and his team. 800-653-8404

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Call now, move to the front of line, grab one of these appointments. Again, they are complimentary: 800-653-8404 6538404

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getting through this checklist, the must haves if you’re headed towards retirement, substantial retirement savings, multiple streams of reliable income. Ooh, this next one, try to be debt free, or as debt free as you possibly can, as you move to your retirement years. Yeah, and when we talk about being debt free. I think consumer debt is the most important one to get rid of, right? We don’t want high interest rate credit cards, we don’t want car payments, if we can

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make that happen. The only debt that we’re really okay with is kind of the mortgage debt, right? And that’s because we know typically the mortgage debts are going to be

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at lower interest rates, and they’re going to be fixed payments for the most part, unless you’re on something like an adjustable rate mortgage. If you have a fixed rate mortgage, we should have a good understanding of what that payment is going to look like, and so debt only becomes an issue. I say this all the time, debt only becomes an issue in the absence of income to service that debt. The trouble with consumer debt is when the interest rates are so high and they’re variable, like credit card rates or rates are oftentimes variable. It makes it really difficult to plan for where that income is going to come from. If I know that you have a $2,500 a month mortgage payment, the.

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Only variance in that 2500 is going to be the taxes and the insurance moving forward, which makes it a lot easier to plan for how we’re going to fund that type of expense. So we want to be as close to consumer debt free as we can. If you’re keeping a mortgage in retirement, just make sure that you have a guaranteed source of income, a reliable source of income to always make your payments as you are heading towards retirement. Talking about some must haves. Okay, you need to have this. Check these off: substantial retirement savings, multiple streams of reliable income, debt free or minimal debt as you move into retirement. High interest stuff gone. Low interest mortgage, probably okay to hang on to for a little bit. The last one we have time for, and it is a big one. Prashant, comprehensive health and long-term care coverage, got to have that conversation. Absolutely, I think one of the biggest misconceptions for pre-retirees is that Medicare is just going to take care of everything when I get to age 65 and it’s oftentimes not the case. Okay, we need to coordinate our Medicare Part A, Part B with our Medicare Supplement plan to make sure that we have the appropriate amount of coverage. You want to work with a specialist on those types of things, and you want to understand the cost. There’s a tremendous cost potentially associated with Medicare Part B, because we do pay a premium for that Medicare Part B coverage, and then we have to pay for supplements or Medicare Advantage plan. I think the second piece of this, you mentioned it, Morgan, is the long-term care piece. Okay, the government does not typically pick up the cost of your long-term care, a lot of people know my family’s story. I’ve shared it hundreds of times on the radio, but I talk about my mom a lot, who was diagnosed with dementia when she was in her mid 50s. She was 57 years old, and by the time she passed away, we were eight years into the diagnosis, and it required $10,000

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per month round the clock care,

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and if you incur that type of cost, whether it’s 5000 7000 10,000 or more per month, you have to protect yourself. One of the newest ways to protect yourself for long-term care is what is called asset-based care. Believe it or not, you can use money that you have in the bank, or that you have in non-retirement accounts, to protect yourself from long-term care events, and you can do this, Morgan, without having to buy insurance. It’s a really cool concept. Not a lot of people are talking about it, but it’s something worth exploring. So, folks, if you haven’t thought about a long-term care plan, or how to protect yourself in retirement from a healthcare event, if you haven’t figured out what streams of reliable income you have, whether that’s social security optimization, privatizing your pension by the use of something like a guaranteed income annuity, if you’re not sure whether or not you even have enough money to retire the way that you want to call this phone number right now, 800-653-8404

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that’s 800-653-8404

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Schedule a complimentary, that means 100% free review and conversation with one of our specialists at Elite Income advisors, you’ll come in. We’ll help you design an income plan. We’ll take a look at your portfolio, understand your risk, and then we’ll share some ideas with you on long-term care on reliable income sources for you to prepare properly for this next phase of your life. Coming up on Retire Smart Maryland Radio, it’s time for retirement scenarios. I’ll throw them at Prashant. We’ll see what he comes up with. That’s all. Next,

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we are back on Retire Smart, Maryland Radio. Your host, Prashant Sabhapathi, Elite Income Advisors, where you can find him, headquartered, Ellicott City Satellite Office in Annapolis. Independent fiduciary, yes, Prashant is published author. You bet already two books in the hopper, Physical Health, Retirement, Wealth, and Retire Abundantly, and it’s all about getting you ready for your retirement. Here on the program. I’m Morgan Patrick. We go back and forth on the topics. There’s going to be an opportunity for you to get on the calendar with Elite Income Advisors and just kind of see where you are in your planning process. And there are a lot of you that have done an incredible job of saving during your working life, and you have these wonderful portfolios, but that is not a retirement plan. And there are others that are halfway down the path in retirement planning, but they’re frustrated, or maybe confused, irritated, they’re not being communicated with. It’s okay to go and get a second opinion. We have that opportunity for you during the course of this show, for our radio listeners, and all you’ve got to do to get a complimentary appointment is call the number eight.

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800-653-8404

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again, 800-653-8404

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We’ll tell you more about those appointments as we move through this portion, and it is the scenario portion. I give the scenario to Prashant. We’ll see how he’s going to handle it. First one up, should I roll over my traditional IRA into my Roth IRA at 60 years old. Also, I have a work-related 401 k with about 107,000

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in it, as well as a designated trading account with an additional 90,000

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I have nothing but standard deductions, as our homes are paid for.

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Yeah, so this is a great question, and believe it or not, this is a pretty common concern that most of the people listening to this show and the folks that come in to visit can relate to, and it’s this idea that we all think taxes are probably going to go up, right, and so the

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base case for doing a Roth conversion is if we think that our future tax rate is higher than our current tax rate, moving our money from an IRA into a Roth IRA could be a good idea, and so

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when we’re having this conversation with clients about whether or not a Roth conversion is a right thing for them to do, it really starts with evaluating a couple different areas, number one is you have to evaluate your current income. We want to understand what your tax bracket is today, and then we want to project out what that tax bracket is likely

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to do to be when you get to retirement. And then we’re going to do a comparison: is today’s tax rate higher, lower, or the same as our future projected tax rate, and then the second component to it is if we elect to do a Roth conversion, how are we actually going to pay the taxes? So, are you going to pay the taxes out of money that you already have, like in your trading account, in this example, or are we going to withhold those taxes from the actual conversion? So, a lot of different moving parts. This, I think, the most important thing is that you work with a not just a financial professional, but a tax professional as well. You don’t want to make mistakes on the tax side of things and get on the wrong side of the IRS. So, there’s a heck of a lot of preparation that goes into it. If your advisor is not going into this level of detail with you to make these highly important decisions. I think you have to go get a second opinion and figure out whether or not you’re working with the right specialist to guide you through the distribution phase of your lifetime. I tell you, so many different scenarios, you’ll probably hear one on the show from time to time that’s similar to what you’re going through, just remember it’s not exactly what you’re going through. Make sure you have a customized retirement plan that’s yours, because your situation is totally different from anybody else’s. Next situation for you, Prashant, is this one all right? As my deceased husband’s annuitant, I have to decide whether to select a one life annuity or a fixed period annuity. Both require that I estimate when I’m going to pass away. The company thinks I’m going to live 23 more years to the age of 97 I think that’s absurd. How do I know which one of these to choose so that the remaining money goes to beneficiaries? This is all about having an income plan, right? I think trying to estimate when you’re going to pass away is a game that nobody wants to play, and very rarely do we have any accuracy with this. Okay, I’m not going to know that any more than you are, and so the best thing we can do is just make sure that your money is being used to provide you all the income you need at different points in your life, so if you’re, you know, 70 years old today, the first thing that we’re going to do is we’re going to evaluate what your monthly income target should look like. If you need $7,000 a month for your lifestyle to be fulfilled in retirement, you should only put enough money into an annuity to help supplement your social security and your pension to get you to that $7,000

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a month. If it’s important to you to leave money to your beneficiaries, you don’t want money, in my opinion, unnecessarily going into vehicles that are designed for income that you’re not going to use right, so this is a very complicated question. There is no cookie cutter answer to say you should use annuity A or annuity B. I think what you should do, though, is get a comprehensive income plan in place that takes into account your monthly income target, your sources of reliable income, and the income taxes that you’re going to pay. This is one piece of what I call the Retire Smart roadmap, and this is going to be specifically that income for life plan. So, important to have that customized plan as you move to and through your retirement. We’re all headed there. Make sure you’re planning for it. We are in the middle.

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Of retirement scenarios, I throw the scenario at Prashant, and he works it out. So, here’s the next one. What advantages do exchange traded funds have over mutual funds? You know, exchange traded funds, or ETFs, as they’re known, are starting to become more and more popular. So, here are kind of some highlights on them. Exchange traded funds offer

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tax friendlier investing, right, and that’s because a mutual fund oftentimes has passed through capital gains taxes, and without getting too far in the weeds on it, we’ve seen cases where you actually lose money in a mutual fund, but because some of the gains of those funds were passed through back to the investors, you actually end up paying taxes, even though you lost money. It’s a completely, in my opinion, kind of a backwards way of investing. Now, that’s not the case for all mutual funds, and certainly I would never make a blanket statement like all types of one investment are good or not good for somebody. You have to be

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understanding of what your situation demands, so number one is it could provide us tax friendlier investing,

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and the second thing that I think is really important is ETFs tend to have lower costs, and that’s because ETFs are typically unmanaged baskets of securities, so we don’t need a portfolio manager managing that ETF. A lot of times they just track indexes like the real estate index or the gold index or the S and p5 100, and because it’s just tracking an index, there’s not a huge internal cost. And then the third thing is the liquidity component, right? So if you buy and sell a mutual fund, it buys at the open of the market when it sells at the close of the market, whereas an ETF can trade oftentimes as if it’s stock, which means if I wanted to sell it at 12pm I get the price at 12pm I don’t have to wait until the day’s end at 4o’clock to determine what that investment’s price is, so I like the liquidity component of the ETF. Here’s what I found, Morgan. A lot of our clients don’t care about stuff like that, right? They don’t care about the difference between a mutual fund and an ETF. What they care about is, am I going to be okay when I get to retirement? Most of the time, my clients come in and they say, give me an overview of the portfolio. I don’t need to get into the details. I want you to prove to me that I’m going to be all right when I retire, and however we get to that outcome, just show it to me. Okay? You don’t have to get into all the details, and I think most of our audience can probably relate to that. And unfortunately, I think advisors spend way too much time talking about stuff that their clients just don’t care about or understand. I think what we should do is we should start helping people understand where their paycheck is going to come from, right? How much tax are they going to pay when they get to retirement? And how do we minimize that tax liability? How much risk am I taking? And if the market goes down, am I going to lose my shirt to the point that I become really uncomfortable, like if we can answer those three questions, that’s a huge part of the retirement planning process. And guess what, we didn’t have to talk about mutual funds and the complexities, we didn’t have to talk about ETFs, we didn’t have to talk about annuities. I think people just want to know it’s okay, and unfortunately, I don’t think people are getting that in this day and age. That’s what my firm strives to do, is we try to make complicated things as simple as they possibly can be. Yeah, I mean, we talk about it on a weekly basis. Number one fear that’s out there is running out of money. You create a plan, so you don’t. I mean, it’s all about having that plan, and again, it’s gonna be different for everybody out there. I love getting into these scenarios. Hey, can I interrupt you real quick? I love what you just

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said. It’s retirees’ number one concern is running out of money. It’s incredible how many people are out there that come to visit with us, and just by getting that written plan put together, we find that they’re actually in a much better position than they ever gave themselves credit for, and one of the things that I was thinking about this past week, I don’t know if you caught any of the tour championship in East Lake for all of our golf fans out there, but I was watching Scotty Scheffler, and I think that he was up

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four strokes heading into the 18th hole, and for the first three days on the 18th hole, he hit driver into that par five, and for the non-golfers out there, hitting drivers like the big risk-reward play, right? Your ball is going to go further, but it might have less control. What he did in that last round is he hit a three wood, he hit a club that he could control a little bit more, he laid up on his second shot. He didn’t try to go for the green and two. He laid it up, he put a wedge in there, and he two putted for par to win the tournament. By the way, won $25 million when he did it, right? And that got me thinking, it’s like, if we’ve already won the race, why do we take additional risk, right? If all I have to do, if I’m.

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Running a marathon is make it through the last mile. I just got to make sure that I don’t fall and break my leg and cross the finish line, but so many people take unnecessary risks, not because they’re high risk takers, it’s just because they’re uninformed, because their advisor has not done a good job illustrating it for them. So, folks, if you’ve never had that written retirement plan done. If you’re not sure whether or not you’re even in a position to retire and stay retired, pick up the phone and give us a call. Last opportunity for today’s show: Retire Smart Maryland Radio, 800-653-8404

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It’s 800-653-8404

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Visit Elite Income advisors.com

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You can call, you can go online to schedule an appointment. Come in, visit with us, get that retirement plan that you deserve, so you can retire smart and retire comfortably as you head to the next phase of life. Another edition of Retire Smart, Maryland Radio and the Books for Prashant Sabapathy. I’m Morgan Patrick. We will see on the radio next week,

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annuity guarantees are subject to the claims paying ability of the issuing insurance company. If you withdraw money from or surrender your contract within a certain period of time after investing, the insurance company may assess the surrender charge. Withdrawals may be subject to tax penalties and income taxes. Persons selling annuities and other insurance products receive compensation for these transactions. Products are subject to fees and additional expenses. Any comments regarding safe and secure investments and guaranteed income streams referral into fixed insurance products? They do not refer in any way to securities or investment advisory products.

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Information presented on this program is believed to be factual and up to date, but we do not guarantee its accuracy, and it should not be regarded as complete analysis of the subjects discussed. Discussion should not be construed as an offer to buy or sell, or a solicitation of an offer to buy or sell the investments mentioned. A professional advisor should be consulted before implementing any of the strategies discussed. Investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for a client’s portfolio. Elite Income Advisors Incorporated is registered as an investment advisor with the state of Maryland, and only transacts business in states where the firm is properly registered or is excluded or exempted from registration requirements. Registration as an investment advisor is not an endorsement of the firm by security regulators and does not mean that the advisor has attained a particular level of skill or ability. You should always consult an attorney or tax professional regarding your specific legal or tax situation,

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I.