Speaker 1 0:00
In today’s retirees are navigating a new set of post-work stressors, from inflation to having purpose, health care to housing. Today on Retire Smart Maryland Radio, we’ll break down critical pressure points that retirees are facing right now.
Speaker 2 0:20
Welcome in to Retire Smart Maryland Radio with Prashant Sabbath. Welcome in to Retire Smart Maryland Radio. Your host is Prashant Sabapathi. You can find him at Elite Income Advisors. They’re headquartered at Ellicott City Sawat Office in Annapolis for your convenience, and again, independent fiduciary. It’s all about having the plan, being proactive. Check out the website, it’s a resource, Elite Income advisors.com Again, Elite Income advisors.com I’m Morgan Patrick. Pleasure to be on with Prashant, as always, talking about some of the latest topics when it comes to being prepared, having a plan, and getting ready for retirement, so before we dive in, Prashant, how was the week?
Speaker 1 1:04
Hey Morgan, the week’s been great, you know, as we head into Q4 and the end of the year and the holiday season, it’s really all about doing those last minute things that you need to get taken care of to close out the calendar year and thus your financial and tax year, and so a lot of tax planning opportunities, Roth conversions, tax loss harvesting, it’s really all about creating an efficient plan, and you know, I think we’re going to talk about a lot of different things today, major stressors that retirees are facing, but you know, I think I’ve recently had a conversation with one of my really good friends, he’s another advisor down in Texas, and we were talking about this idea of what are what is the modern day retirees’ biggest concern. Okay, and I think if you were to ask people that, I think what most people would say is the threat of running out of money, or the risk, or the fear of running out of money, is their biggest concern. I think when you have a really solid financial plan in place, you kind of graduate from that being your biggest fear to other things. So, I was talking to this guy, he’s down in Austin, and he told me he pretty much said to me, How many of your clients actually ran out of money at the time they passed away? You know, like, so we have clients have been with us five years, seven years, 10 years, right? And I’ve watched my clients retire, I’ve watched, unfortunately, I’ve watched some of them pass away, and I have the opportunity to kind of look back at their situation and say, how many of these people actually ran out of money, and what we’re finding is like almost none of them actually run out. In fact, a lot of them have a lot more money at the end of life than when they started, and I think a lot of that can be attributed to good planning, but my point in telling this story is that I think there’s a different problem that most of our clients face after they put their financial plan in place, and to me that problem is not spending enough money in retirement, you know, like I think we’re so conditioned to save, save, save, and that’s what we’ve been taught to do for 30 or 40 years, especially if we grew up with Depression-era parents and things like that, that it’s hard to flip that switch from saving to spending, and as a result, we find that our clients have a hard time doing all the things that they dreamt about doing, because there’s still that deep-seated fear of kind of running out, even when they have millions and millions of dollars, and so it’s all about spending. This is my commitment for 2020-six is I’m going to get my clients to spend more money on the things that are really important to them, so that their life is as fulfilling as possible, you just can’t. You can’t take it with you, Morgan. No, you can’t.
Speaker 2 4:04
You really can’t. You’ve said this before on the show, and it kind of struck me when you said it, and it’s almost like if you plan well and you have those income streams, it’s you’re giving yourself permission to spend your own money, and once you have that permission and you know you can do it, you know that’s the confidence you need as you move into retirement.
Speaker 1 4:26
Yeah, I think you’re exactly right, and we have alluded to it, but it kind of just hit me like a ton of bricks. Is like, yeah, all of our clients, like I did a review with a client literally this morning when they started with me, they had $700,000 when they first came to visit with me. They’ve been retired now four years, and their net worth is $1.6 million and they’ve been retired four years. And I’m sitting there thinking, great, but all that tells me is that you’ve actually been saving money in retirement, which is fantastic. I love it when my clients save money in retirement. Yeah, but then I think back to when they asked me, hey, we want to go to South Africa, we want to go on that European river cruise on the Danube. Like, why have we not done that? Is it because spending $30,000 is just a lot of money? Yeah, it is a lot of money, but if your net worth is doubled and you’ve been retired, shouldn’t we be spending it on the meaningful things in life? Shouldn’t we be spending that money with people that we love? Shouldn’t be spending that money on things that we never got to do while we were working, like, and so that is my commitment to my clients for 2026 We’re going to make sure that your financial plan is as efficient as possible, that you have all the income you need, that there’s safety and growth built in. Those are all the things that we always talk about, but my commitment is we’re going to put together a real spending plan that truly allows you to live the life that you deserve. Quite frankly, after 30 or 40 years of hard work. I don’t know why it hit me in this way, but it just hit, and I thought it was the most eye-opening thing I had to share. It
Speaker 2 6:06
all right, so listen. If the light bulb goes off and it’s going off right now, and you want that permission to spend your own money, you need to start with the planning process. If you’re in the middle of something, you need a second opinion, or if you haven’t started, this is your opportunity to grab one of our complimentary appointments. Again, you’re not going to pay for it, and there’s no obligation to become a client. It’s mainly to see if this is a good fit. Call our number, secure an appointment: 800-653-8404 That’s 800-653-8404 Again, they will set you up with Elite Income Advisors. This is a complimentary appointment. See if you are ready for retirement. If you haven’t started planning, get rolling on it. And again, if you need that second opinion, use the appointment for that. 800-653-8404 So I kind of wanted to get into this a little bit today, Prashant. And that’s just retirement is often seen as just this finish line,
Speaker 1 7:00
and then they cross, and you feel like I’m just going to coast, but what we’re going to talk about today, and in today’s world, it feels more like you’ve got a new race in front of you, one where the rules are shifting from rising costs to longer lifespans, retirees are facing some pretty serious stressors, and we want to talk about a few of those today, so the impact of persistent inflation on fixed income, inflation is a big one. It’s a huge one, you know. Headline inflation rate has eased from the peaks that we saw in 2022 I mean, we saw an inflation rate that peaked out at 9.1% back in 2022 We’re in the mid twos right now, which on the surface seems like a really good thing, but retirees who are living on more of a fixed income are finding that that monthly check from things like Social Security or that fixed pension that you might have earned that doesn’t stretch like it used to. Okay, there was a 2025 senior financial outlook report, it said that 68% of retirees say that the cost of living going up in inflation is their number one concern. So we try to make this really simple. What is the answer to higher prices and higher costs? It’s very simple. It’s higher income. The higher the income, the better the outcome. Inflation, it’s almost like trying to fill a leaky bucket, right, with more and more water, because every month a little bit more just strips out of the bottom. If you are concerned about inflation, if you’re not sure where your income is going to come from when you retire, or whether or not you’ll be able to live the life you deserve, all you need to do is pick up the phone, it’s 800-653-8404 800-653-8404 You dial that phone number, you schedule a free appointment with our team at Elite Income Advisors. Just a conversation to see where you stand and whether or not me and my team are even the right match to help you figure out whether or not you’re on track. It all starts with that phone call, 800-653-8404 And when we come back from the break, I think we want to talk about healthcare, longevity, and the emotional and identity strain that comes with retirement.
Speaker 2 9:16
That’s coming up next. You’re listening to Retire Smart Maryland Radio, we are back on Retire Smart Maryland Radio, hosted by Prashant Sabapathi of Elite Income Advisors, headquartered Ellicott City, and the satellite office in Annapolis, for your convenience. Prashant is an independent fiduciary. He’s also a published author, fiscal health, retirement, wealth, and the second book, Retire Abundantly. I’m Morgan Patrick. Pleasure to jump on with Prashant and just talk about the importance of being proactive, having a plan for retirement, having that roadmap. Get you to and through, and we know that so many of you are sitting on portfolios you’ve saved and accumulated well, but there’s no plan after that, and there are a number of you that are halfway down the path but need that second opinion here on the program. Not only do we walk the walk and talk the talk, we give you an opportunity to get on the calendar with Elite Income Advisors with a complimentary appointment, see if you’re on track for your retirement. So, stay tuned for that. We started off the show basically talking about giving you permission to spend your own money when it comes to retirement. So many of you are saving well, accumulating, and you’re even doing that in retirement, and many people are passing away, and they haven’t spent their money, so again, permission to spend your money in retirement. Other things you need to be concerned about when you cross the finish line, inflation, it’s going to be there for you. You need a hedge against that. You need a little bit more income as you enter into retirement. The next one, per shot, huge rising healthcare, long-term care costs, I mean, these numbers are staggering, and a lot of people heading to retirement, that’s the last thing they’re thinking about.
Speaker 1 11:06
Fidelity comes out with a study almost every single year, and the latest Fidelity study said that the average 65 year old couple retiring this year will need over $350,000 for health care expenses throughout retirement, and by the way, Morgan, that does not include long-term care. I know that we’ve cited this statistic over and over again on this program. Part of that is because number one, with the demographic of the folks that we work with, most of our clients are between the age of 55 and 80 years old, and so we get to watch them live through their Medicare years and their rising healthcare expense years, and the costs just keep going up. If you look at what has happened to the cost of Medicare Part B in the last several years, that number has gone up as well, and then you layer on long term care, which I’ve shared my story about. My mom, our family spent over three quarters of a million dollars out of pocket on long term care costs for my mother, who was diagnosed with dementia when she was 57 years old. These are real big ticket expenses that you have to plan for, and whether or not you have the money is one thing. It’s all about whether or not you have a plan, because if you do have the money to pay, but you don’t have a plan, then you might actually spend it in a really inefficient way that ends up costing you 10s of 1000s of dollars, either in lost opportunities or in additional taxes. So, the way I think about healthcare is, you know, we all have our subscriptions, right, whether it’s our streaming services or whatever, healthcare costs are the subscription that you cannot cancel, and the thing is, the price seems like it goes up each and every year, if that’s going to happen, you have to have a way to be able to deal with it, and just like when we look at higher costs, the answer is deeply embedded, in my opinion, in higher income retirees. Should not be necessarily worrying about how costs are going to increase; they should be worried about how their income is going to increase to keep up with costs, and that’s what we talk about with almost every single person that comes in, is how do we get your income in retirement as high as possible. We want to make sure you’re doing that as quickly as possible, but most importantly, Morgan, we want our clients’ income to be higher quicker, but also do that in the safest way possible. It’s about planning, it’s about being proactive, having the conversation. Easy to do that with Prashant and his team at Elite Income Advisors. Call the number, secure one of our appointments. You can do this at any time during the show, and the appointment is complimentary. It’s also not – you’re not obligated to become a client. This is a great way to see if it’s a good fit. Call the
Speaker 2 14:00
number: 800-653-8404 106 538404 that’s 800-653-8404 You can also visit the website, it’s a wonderful resource, Elite Income advisors.com Links to the TV show, our radio shows are in podcast form, it’s all there for you, that’s Elite Income advisors.com So, back to it again, things you need to be concerned about once you cross that finish line, you’re headed into retirement. Inflation is going to be there, front and center. Health care costs, long-term care costs, they need to be not only considered, they need to be planned for, because we’re living longer, we’re going to need it. Now, the emotional and the identity part of retirement, it puts a strain on us. There, a lot of people aren’t thinking about this, Prashant, but once you leave your work, once you leave your job, and you head off into retirement, you really need to plan that out. What are you going to be doing? What’s your purpose? I don’t think advisors talk enough about this, Morgan, because this one does not show up on some spreadsheet or on some you.
Speaker 1 15:00
You know, projection software or anything, but this is a real big strain. Many retirees, they struggle with the loss of identity or structure, or in some cases even purpose, right? Like, and I’ve seen this with my own clients. I mean, one of the benefits I have of helping our firm has probably helped nearly 1000 maybe more than 1000 people retire in the last 20 years or so. We have the power of perspective. I get to see people who are thriving in retirement, but equally I get to see some of the people that lost some of that identity and structure and purpose, and they feel kind of lost. And there was a Merrill Lynch study that came out. Retirees who felt high purpose, quote unquote high purpose, were two and a half times more likely to report excellent health. I was sitting down with a client doing a review. This was probably three months ago. She could retire, okay? She could retire, but she didn’t want to, because she was afraid that she would have nothing to retire to, meaning she didn’t know how she was going to spend her 40 or 50 hours a week that she was working, and she was afraid that if she got caught up just sitting on the couch watching TV, not being active, not having personal engagement, that her health would rapidly decline, and so this one is a lot more common than anyone would ever think that it would be. You’re not, you have to have something to retire to, not just have something that you are retiring from. So important. Again, this is part of the planning process. You have these types of conversations you talk about your goals, what you want to do in retirement. A lot of that is purpose. What are you going to be doing in your retirement years? Going over some of the stressors that are out there that retirees are facing, you know, once they get into retirement. So, we’ve talked about already just the impact of inflation, also the rising costs of health care and long-term care. And then, where’s the purpose? You know, what about your emotional identity once you get into retirement? Make sure you’re planning for that as well. This next one, it goes without saying, the market, it’s volatile sequence of returns trap. I mean, there’s a stressor there, but there’s also a release valve, so to speak. Make sure you’re planning for this, when you see the stock market continually go up, I mean, I think that’s a really good thing. Obviously, if you’re invested in the market, you’re making a lot of money, which is fantastic. That’s what we want for everyone that we visit with. As I want all my clients to make a lot of money when it’s available to be had. I think one of the downsides of the market always going up, is it gives people a sense of complacency that that will always be the case, that the market will always go up. Now, I’m a big believer in the United States stock market. I think 1015, 20 years from now, my hope is that it will be a lot higher than whatever it is today, and history has shown us that the market tends to go up over time, but that being said, in any given year it’s anyone’s guess what’s going to happen. If you look at what happened in 2021 the market did a great year in 2021 and everything was all good. And then what happened? 2022 Russia-Ukraine conflict, oil prices go up, global inflation crisis, and that was at a time that at the end of 2021 everyone was really optimistic, and so things can change really quickly. So, let me paint a picture. You did a great job saving money, you have a million and a half, you have $2 million saved, and your plan is to start to withdraw from that 2 million to supplement your social security, when you get to retirement, your plan is to start to take out $80,000 a year, 4% off of that 2 million, and that’s going to give you a really comfortable lifestyle.
Speaker 1 18:54
Social Security, plus another 80,000 off your portfolio, gives you everything you need, but then in that first or second year of retirement, 2 million becomes 1.2 million. How comfortable do you feel taking $80,000 a year off of just 1.2 million? Right, I don’t know that too many people would feel super comfortable about that, because your withdrawal rate just went up, and now you are at unnecessary risk of running out of money, because you’re taking out a disproportionately high amount. If you remember the old saying on Wall Street, it was what it was: buy low,
Speaker 2 19:31
sell high, and
Speaker 1 19:32
sell high, right? But when the market goes down, and then you have to take money out to fund your lifestyle, are you buying low and selling high? You are not. You’re doing the opposite. You’re selling low, you’re locking in your losses by taking that withdrawal, and you’re compounding that loss, you know, by spending that money and paying tax at the same time, potentially, which makes it really difficult to recover. And so I think it’s really. Easy to get complacent when the market’s good. Let’s not remember, let’s not forget, I should say that sometimes it’s not about making the most amount of money possible. It’s simply about protecting the money that you have. Risk is for people trying to get to the two or three or $5 million All you have to do when you get to a certain level is just make sure you don’t lose it, because the losses hurt you more than gains help you the closer you get to retirement. Yeah,
Speaker 2 20:30
it’s so important to know where your risk level is as you get closer to that retirement. Have a plan, you know, work with a fiduciary, map this out, understand what’s in your portfolio, how it’s working for you, and better yet, plan for how it can work for you even better. Again, opportunity to get on the counter with Prashant and his team, ongoing during the course of the show. We’ll tell you how to grab one of those appointments here shortly. Real quickly, Prashant, I do want to hit this last one, just Social Security and pension, the uncertainty there. There’s there’s this cloud around social security, a lot of people don’t have pensions, but just let’s clear the air on this one.
Speaker 1 21:07
Transamerica Institute reports that 72% of workers believe that social security will either be reduced or unavailable in their retirement years. Okay, I think it’s a fair perspective to have. They’ve already told us Social Security does not have the funds to make it beyond about 2030 to 2033 They’re roughly, you know, 72% or 79% excuse me, funded at that point in time. So, if there’s a 21% reduction, or the system has to change. How are you going to deal with it? It comes back to something very simple. I’ve already said it twice in this segment. The answer is higher income. If you can use your own money to recreate some of your social security, maybe you do that through dividends, maybe you use something like an annuity to guarantee you a certain amount of income, that could be one way to handle it, folks. These issues, they don’t exist in isolation, they stack on top of each other, and that’s why you need a plan to connect the dots. The phone number is 800-653-8404 800-653-8404 Come into one of our offices in either Annapolis, Maryland, Ellicott City, Maryland, our headquarters, or you can book a virtual consultation free of cost on Zoom or Teams. You come in, we’re going to talk about your situation. Let’s talk about which of these stressors keeps you up at night, and more importantly, what we can take off your stress list. 800-653-8404
Speaker 2 22:48
We have more Retire Smart Maryland Radio coming up. A
Speaker 1 23:03
retire Smart Maryland radio powered by Elite Income Advisors, headquartered Ellicott City, and of course the satellite office in Annapolis. And your host is Prashant Sabapathi, is part of the team. I’m Morgan Patrick. It’s always a pleasure to jump on. Prashant is an independent fiduciary. I did mention Team Prashant. Talk about your team, because this team is growing to better serve your community. Yeah, look, we’ve just expanded our reach a little bit, opened a new office in Annapolis, beautiful Class A office down there. We just expanded our headquarter office here in Ellicott City, so our team is made up of several integral pieces. We have multiple retirement advisors and investment advisor representatives acting in a fiduciary capacity. So, we have our advisory team. We have about six or seven advisors. We have a great support team here of para planners, junior advisors, new business team, you know, client services team, marketing team. We’ve recently brought on a healthcare specialist to help advise our clients on Medicare decisions, as well as in-house tax advisors, and so look, retirement is a comprehensive thing. I got really sick of having to say, hey, you have a Medicare question, let’s go consult a Medicare health advisor. You have a tax question, let’s go consult an outside CPA or something like that. We brought a lot of that stuff in house, that way when you have questions, we have the resources to be able to find the correct answers. I was always taught, my mom always taught me, and God bless her. We lost her in March of 2024 but one thing she always taught me was, Prashant, you don’t have to know it all, but you have to know who to ask, and so that’s kind of my attitude if my client asks. Me, a question that I don’t know the answer to. I’m not going to give you an answer that I’m not confident in, but I certainly have the resources in our office to be able to start to answer questions on health care, taxes, and then, of course, we do what we do with social security, income planning, portfolio management. So great team here, we’ve been growing, we’ve recently hired probably seven or eight new people, but that’s only because the response from our community, both to the television program Retire Smart Maryland TV, you can check out our YouTube page on that, and then, of course, the podcast and the radio show Morgan that we’ve been doing for several years together now. The response has just been fantastic. I mean, it’s, it’s been awesome. Well, I tell you, it’s been a lot of fun, you know, spreading this information, because we are helping, and we’re approaching 200 shows. I mean, it’s amazing when you start thinking about it, but again, the point, so many of you out there are just sitting on your portfolios, and we are, we are applauding you on saving and accumulating,
Speaker 2 26:00
but then you got to ask your question. Now, what it’s called, planning, folks. We hit these different topics. You’re going to have questions about your own situation. Grab one of the appointments we’ll make available today, no cost, no obligation. See if you’re on track for retirement. And I’ll state this many, many times: having a portfolio is not a plan. If you’re in the middle of something and you’re frustrated, use one of the appointments for a second opinion and get another set of eyes on what exactly is going on. Grab one of those appointments at any time during the show, simply by calling 800-653-8404 that’s 800-653-8404 So, per shot, next up retirees and those getting very close to retirement, a lot on the mind, obviously. Markets are dancing all over the place. Inflation, we’ve already talked about today. Social Security has been whispering about, you know, uncertain things, maybe some changes. Taxes are out there, and the question is, Am I doing enough? And a key, you know, are you waking
Speaker 1 27:00
up at 3am if you’re advising, or you’re the retiree thinking these thoughts, you’re going to hear the same questions over and over again. So today we’re going to talk about some of the top ones and help you turn that wonder into how you’re going to actually act on it. Okay. First question, Prashant, how much do I really need to save for retirement? I think this would be the magic question. Everybody wants to know. This is kind of like the high, how high is the mountain question, right? It’s this is by far one of the more common ones that we get, especially from people who are frustrated that their current advisor hasn’t answered this right, and I think I’m going to answer this a little bit of a different way now. If you’ve been listening to me and my show for the last several years, you probably know how I’m going to approach this. Retirement is not about how much money you have. I’ve met with people who have 2 million, 3 million, $5 million who don’t have enough money to retire, and conversely, I’ve met with people that have a quarter of a million dollars that are so well prepared for retirement it’s fantastic, and so retirement is not about getting to some number, some arbitrary number, it’s all about understanding how much income is going to drive your lifestyle, if you really think about it. Your financial life, while you’re working, is just a function of what I call money coming in and money going out. That’s all it is. It’s money in, money out. Paychecks come in, expenses go out, and you do your best to try to save as much money as you possibly can when you’re working in order to retire, but then when you get to retirement, it is not about anything other than money coming in and money going out. That concept does not change. Now, of course, 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, whether that’s social security, your pension, or your 401 k, your IRA, your thrift savings plan, your Roth, and so how much do I really need to save for retirement? It’s all about how much money is required to supply you all of the income that you could ever want or need on a guaranteed basis when you get to retirement. If you need 8000 a month, and your social security and your pension only total up to 5000 a month, you need to have enough money to make sure you can close that gap of 3000 a month, every month, no matter if the market is up, down, or sideways. If your advisor has not shown you how to do that, then you don’t have a real plan, and I’d argue you’re not really working with a retirement advisor, in my opinion, who knows what they’re doing, because at the end of the day, it’s all about the income, it’s not about how much money you have, it’s about how much income that money generates for you,
Speaker 2 29:59
we are talking. Talking about again, top questions from people that are very close to retirement, and that first one is, How much do I really need to save before I head off into retirement? And again, Prashant alluded to it, everybody’s got this magic number they’re fixated on, but you need to focus more on the income you’re going to need, and again, that takes a plan. Here’s the next question: When should I take social security? A lot of people like, I take it right away, or I’m going to wait, but I mean it’s either or. There’s no real answer that fits everybody.
Speaker 1 30:33
Yeah, that’s right. I think coordination matters as well. If you’re married, how you take social security in coordination with your spouse also is a huge part of the planning process, but I go back to creating a written income plan. Okay, you won’t know when to take social security unless you can actually map out where your income is going to come from, when it’s going to be there, what it’s going to look like after taxes, like all these things impact your social security decision. We have a really cool tool in the office, we call it the Social Security Timing Tool. What it allows us to do is examine literally any combination of how you, or you and your spouse, will collect Social Security and show you what the differential is in lifetime income by employing any one of those strategies, so it effectively means we can evaluate every potential social security option for you and show you how that impacts your financial plan. Again, if you haven’t gone through that level of analysis, then I’d argue you don’t have a real plan in place, you got to remember Social Security, it’s an irreversible decision when you make that, when you make your mind up to collect Social Security, if five years later you feel like you made a mistake, they’re not going to let you go back and redo it, there are no do-overs, and so when it comes to Social Security, this is not a dress rehearsal. This is like the real performance on Broadway, in front of 1000 2000 people, and you got to get it right the first time. If you are not taking that level of care and making this decision, I think you are missing the mark. More importantly, I think your advisor is missing the mark. Folks, if you don’t know when to take Social Security, you’ve never had a Social Security timing report done. If you don’t know how much income you need or where it’s going to come from, and whether or not it’s affected by the stock market and affected by the threat of rising taxes and rising inflation and retirement, this is your moment. Okay, as you prepare for year-end planning, heading into a fresh 2026 All you need to do is pick up the phone and give us a call. It’s 800-653-8404 That’s 800-653-8404 If you’ve never been through a comprehensive planning process and you’re not even sure where to start. You can book that complimentary appointment with my team at Elite Income Advisors, but I do one better. If you’re just kind of kicking the tires and you need some education before you can even get started with an appointment, visit Elite Income advisors.com That’s our website, Elite Income advisors.com There’s an education center in the top right hand side of the website. Go check out the education null materials, they’re all free. There’s a resources tab in there as well. So we’ll do our part, but you have to do yours. It’s 800-653-8404
Speaker 2 33:36
When we return on Retire Smart Maryland Radio, I’ve got a handful of scenarios. Let’s see what Prashant would do when I give them to him. That’s coming up next. You’re listening to Retire Smart Maryland Radio. We are back on Retire Smart Maryland Radio, hosted by Prashant Sabapathi. You can find Prashant at Elite Income Advisors. They’re headquartered, Ellicott City Satellite Office in Annapolis. Independent fiduciary, yes, he is. Published author, couple books to his credit so far: Fiscal Health, Retirement, Wealth, and Retire abundantly. I’m Morgan Patrick. A pleasure to jump on with Prashant and the rest of his team, and they are a growing team in Maryland to again support that community when it comes to planning for your retirement. So many of you have saved well, but you haven’t started planning, or you’re halfway down the path and you’re in desperate need of a second opinion, we’re going to give you that opportunity, a complimentary no-obligation appointment with Elite Income Advisors. Stay tuned, that is coming up. So, it’s time for scenarios. Prashant, we’ve gathered a couple for you. Let’s see what you would do here. They used to joke about being bored in retirement, now they’re busier than ever, they’re volunteering, the babysitting, the grandbabies. They’re joining clubs, but they’re burning through their fund money faster than expected. How can retirees set limits without losing their spark that keeps them active?
Speaker 1 35:12
Isn’t this what planning is all about? How liberating would it be if every year you knew exactly like to the dollar, exactly what you could spend in order to make your life fulfilling, right? How much comfort might that give you if you knew what that number was? I think scenarios like this, Morgan, are a classic case of people just not knowing what their limit should be right, and so I have no problem with clients, you know, burning down their fund money. I mean, that’s ultimately what it’s there for, but it’s almost like eating dessert before dinner, right? It’s fine occasionally, but you don’t want to be doing that every single night. The thing is, there is actually a way to determine what that number should look like, but so many advisors don’t prepare their clients for what it should be. They don’t tell them, and I suspect they don’t tell them, because a lot of advisors don’t know how to calculate it themselves. But when you have a really detail-oriented financial plan. These are the types of questions that you should be able to answer. How much can I spend without me being at unnecessary risk of my tax rate being too high or running out of money one day, or that I won’t have enough resources in the event that one or both of us get sick, okay? You have to be able to answer these questions, and if you’re not able to do that, I think you have to examine why.
Speaker 2 36:48
Yeah, I mean, scenarios are always interesting because it’s going to get you thinking about your own, and you want to make sure you’re planning for it. Make sure you have this roadmap to get you to and through retirement, but not only that. I mean, you want to be able to do what you want to do, and again, it’s all about planning. All right, next scenario. This is an interesting one. They’ve always managed their own investments, Prashant, but now they’re spending more time watching cable news, any kind of business show, than managing their own portfolio, and it’s starting to show up, when is the right time to hand off investing to a pro, and how do you make this kind of shift without feeling like you’re kind of giving up control?
Speaker 1 37:30
Look, I don’t think that there is a right time to hand off to a pro, because it’s different for every single person. It’s the right time when you no longer are a getting the results that you hoped, or be you no longer have the desire to have your hands in it. Okay, and that’s different for every single person. I had somebody, she’s been a client forever, but she had only done like estate planning things with us, things like life insurance policy. We did some stuff to protect her for long-term care. She finally got to like 78 years old, and she had had enough of doing it herself, managing her portfolio. She came in one day, and it was like out of the blue, because I stopped talking to her about managing her money, because the response was always, ‘No, I’m having too much fun, I’m doing great in the market, I love doing the research. One day she came in, said Prashant. It’s time. I said it’s time for what? What are you talking about? And she goes, I don’t want to do this anymore. I saw all my friends traveling, I saw all my friends doing stuff, and unfortunately I saw a couple of my friends pass away, and I would hate to be at the end thinking I didn’t do what I wanted to, because I was so consumed with trading in my portfolio, doing the research. I’ll tell you what, for 78 years old, this is one of the sharpest ladies I’ve ever met in my life, of any age, and I really respected her for saying that, and coming to that realization that you know life isn’t always about just trying to make the most amount of money possible. To me, it’s about sharing it with the people that you love and doing all the things that you deserve to, quite frankly. And so, you know, it’s different for every single person, and I think only you will know when it is right, but I think you also have to have an honest conversation about what is working for you and what isn’t. Okay, we see so many people that think that they’re doing a great job until you really dive in and find out that they’re lagging the market or they’re taking way too much risk or they don’t know how to generate income. You have to have an honest assessment of what’s going on.
Speaker 2 39:42
Tell you, we hit the scenarios, you get thinking about your own, and you’ve got some questions. We’ve got an opportunity for you. It’s a cost-free, no-obligation appointment with Elite Income Advisors. Come in and talk about your own retirement scenario. Maybe it’s a Zoom call, you just zoom in and. Have that conversation, it’s complimentary. There’s no obligation to become a client. You can call right now, 800-653-8404 and claim one of those complimentary appointments. That’s 800-653-8404 And how you want to do it, you can go into the office, you can do it by Zoom or by Teams. Again, that’s 800-653-8404 All right, next scenario, they just bought a hot tub. Now I’m gonna also throw this in. This could be any big purchase, right? They just, they just bought a hot tub. They wanted to relax more, forgot about, you know, budgeting, the installation, the wiring, the monthly bump to the electric bill. How can folks plan for big purchases? Maybe it’s the boat, maybe it’s that big worldwide trip, the world tour. How can they plan for this without absolutely just wrecking their retirement budget?
Speaker 1 40:50
Morgan, you have dogs, don’t you? Yes, I know, I know you do. You’ve shared the pictures with me several times. You have some cute puppies, but that being said, do you remember bringing the puppy home for the first time.
Speaker 2 41:01
Yes,
Speaker 1 41:02
yeah. And what do you notice about the costs? All the costs come after you bring the puppy home, not before, right? True,
Speaker 2 41:09
very true. That
Speaker 1 41:09
bills and they need medication. And then you know, you know, we have, we have a cat at home, and the cat’s been having health problems. They want us to switch the cat food to something that costs $60 when I’m used to paying 20 for the food, and I’m like, holy smokes, the costs add up after you bring the thing home, that’s what this reminds me of. And so, how do you plan for that? We go back to having surplus, your financial plan should always have surplus income for the what ifs, because we all know that that the what ifs are going to happen. Life comes at you, and here’s the cool thing I’ve been talking about: having income surplus for years. It’s how we’ve built this entire philosophy surrounding retirement planning, is always make sure that you have wiggle room income built into your financial plan. In all the time I’ve been doing this, Morgan, I’ve never had a client ever. It’s never happened. Never had a client come to me and say, “Prashant, you built in way too much income to my financial plan, and now I am suffering because I have way too much coming in.
Speaker 2 42:18
Yeah, that’s never
Speaker 1 42:19
happened. Okay, and so it’s very simple. You want to make sure that your financial plan has wiggle room. You want to make sure that you have more income than you need coming in. That way, when you run into these things that, yeah, it’s natural to just forget about in the heat of the moment, you’re still going to be able to handle it. What is wrong with having too much income?
Speaker 2 42:40
All right, well, you mentioned what if. Final scenario, we’ll hit it real quick. Finally paid off the mortgage just in time for the roof to start leaking. Is it ever smart to keep home equity line open in retirement, even if everything’s paid off? Is
Speaker 1 42:55
it smart to keep a fire extinguisher in the house?
Speaker 2 42:58
Yeah,
Speaker 1 42:59
like you hope that you’ll never have to use it, but man, you don’t want to be without it if your house is the one that catches on fire, right? And so, with that being said, I love the idea of keeping a home equity line of credit open. Doesn’t ever mean that you have to use it, and hopefully you don’t, and hopefully you do have wiggle room built in, and hopefully you have an emergency fund set aside just in case, but with that being said, What’s wrong with having a home equity line of credit open? If you need it, you get to use that money tax free. Now, yeah, you do have a payment, then you’ll have to pay it back, and you should absolutely understand the terms of your home equity line of credit. We’ve seen some HELOCs in the past that don’t let you pay for six months or 12 months, and thus they accrue some interest on the front side, but that being said, having more arrows in your quiver to solve a problem is always better in my book, right? And so I just want options, HELOC tends to be a really good, viable option for a lot of different people, but that being said, you don’t want to blindly do these things right. You want to make sure that if you do have a home equity line of credit, and heaven forbid you do have to draw on it, that you have the means to be able to repay it, right? I don’t want people just taking on unnecessary debt, because that’s our only option, we want to make sure that there’s always a plan for how to be responsible in using it to maybe offset tax liability, to continue to build your wealth, and make sure that your retirement plan does not get derailed, and so folks, that is really what this is all about. Having a plan is ultimately about having security and having some stability as you head for that next phase of your lifetime. Okay, whether you’re budgeting for fun, delegating investments, keeping that roof from leaking, we’re going to help you find. Find that balance before something catastrophic happens. It starts with that phone call. It’s 800-653-8404 Now, when you come into the office, we’re going to sit down and talk about the things that are specifically important to you, whether it’s inflation, mapping out your income, maybe you’re concerned, like so many, about the threat of rising taxes amidst the 38 and a half trillion dollars of projected national debt that we have. If any of those things are concerned, come on in and talk about it. You’re not agreeing to become a client, and by the way, me and my team, we’re not agreeing to take anybody as a client. It’s really about understanding where you’re at and figuring out whether or not we’re even the right fit to help you through your retirement planning journey. It starts with that phone call: 800-653-8404 800-653-8404 You can also visit Elite Income advisors.com check out the resources, the Education Center. You can book an appointment through the website as well. Retire Smart Maryland Radio, another edition is in the books. For Prashant, I’m Morgan. We will see on the radio next week. Newly
Speaker 3 46:19
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