One For The Money

Episode SummaryWith Mother’s Day right around the corner, this episode highlights an important—and often overlooked—reality in financial planning: too many women are still taking a back seat when it comes to managing their financial future.Drawing from real client experiences, this episode explores why financial planning works best when both partners are actively involved, and why it’s especially critical for women to engage in the process.From differences in financial goals and investment behavior to the long-term impact of widowhood and divorce, this conversation makes a compelling case for shared financial decision-making—and the risks of sitting on the sidelines.What You’ll LearnWhy financial planning is more effective when both partners participateCommon differences in how men and women approach investingHow misaligned goals (even in something like vacations) reflect deeper planning gapsThe financial realities women often face after divorce or widowhoodWhy women tend to outperform men as investorsThe risks of deferring financial decisions to a spouseKey TakeawaysFinancial planning is not a “set it and forget it” process—especially for couplesWomen are statistically more likely to experience the long-term outcomes of financial decisionsBeing uninvolved in financial planning can lead to costly consequencesWomen often bring discipline, patience, and better long-term behavior to investingShared planning leads to better alignment, better decisions, and better outcomesTips, Tricks & StrategiesWant to get more involved in your financial life? Start here:Attend financial meetingsBe present in conversations with your financial advisor. If you don’t have one, consider working with a professional.Build your financial knowledgeListen to podcasts, watch videos, or read about personal finance. The basics are more approachable than you think.Run a “what if” scenarioIf you had to take over all financial responsibilities tomorrow, would you be ready? Know your accounts, contacts, and plan.Notable Stats from the EpisodeWomen often experience a larger drop in income after divorce than menWomen tend to live longer, making long-term planning even more criticalA significant percentage of women defer financial decisions to their spouseStudies show women often outperform men in investing due to more disciplined behaviorFinal ThoughtA better life is the result of better planning—and better planning requires participation. If you’re not at the table, it’s time to pull up a chair.ReferencesDo women live longer than men in the US? | USAFactsThe Economic Consequences of Gray Divorce for Women and MenWomen Are Strong Savers. So, Why Do Their Balances Often Lag Behind?Women Put Financial Security at Risk by Deferring Long-term Financial Decisions to Spouses

It’s Tax Day — the one day of the year when millions of Americans collectively ask the same question: Did I pay too much… or too little?But another question quickly follows: Is everyone else paying their fair share?In this episode, we explore one of the most debated topics in economics and politics — the fairness of the U.S. tax system. We examine how income and wealth are taxed differently, look at what the latest IRS data actually shows about who pays federal income taxes, and discuss current policy debates such as proposed wealth taxes.You may be surprised by what the numbers reveal.In the Tips, Tricks, and Strategies segment, we also discuss how reviewing your recently filed tax return can help you make smarter tax planning decisions for the year ahead.Key Topics CoveredTax Day and the Emotional Side of TaxesTaxes are more than numbers — they’re emotional. Every election cycle raises the question of whether Americans pay too much or whether certain groups pay too little.Economist Thomas Sowell once joked:“Elections should be held on April 16th — the day after we pay our income taxes.”The quote highlights how differently people view taxation depending on when they’re writing the check.Income vs. Wealth: Why They’re Taxed DifferentlyA key factor in the fairness debate is that income and wealth are taxed in very different ways.IncomeWages and salaryBusiness incomeTaxed progressively (higher income = higher rates)WealthStocksReal estateBusiness ownershipUsually taxed only when assets are soldBecause wealth is often unrealized, individuals can sometimes access it through borrowing strategies without triggering taxes.The “Borrow, Spend, Die” StrategySome wealthy individuals use what’s often called the borrow, spend, die strategy:Borrow against investments rather than selling themSpend the borrowed fundsPass assets to heirs when they pass awayBecause assets may receive a step-up in basis at death, the capital gains taxes can be significantly reduced.This strategy is one reason critics argue the tax code favors asset owners over wage earners.The Warren Buffett ExampleInvestor Warren Buffett famously said that he pays a lower tax rate than his secretary.While statements like this often fuel public debate, they also highlight an important distinction between:Tax ratesTotal taxes paidEven when rates differ, the wealthiest taxpayers still pay very large total amounts of tax.What the IRS Data Actually ShowsThe most recent IRS data (2022) reveals that the federal income tax system is already highly progressive.Top 1%Income: ~$663,000+ AGIAverage tax rate: 26.1%Share of federal income taxes paid: 40.4%Bottom 50%Income: ~$50,000 or lessAverage tax rate: 3.7%Share of federal income taxes paid: 3%Key takeaway:The top 1% earns roughly 22% of income but pays more than 40% of federal income taxes.The Wealth Tax DebateRecent policy proposals — including some state initiatives — have revived discussion about wealth taxes.Supporters argue they would address wealth inequality by taxing large accumulations of assets.Critics argue wealth taxes would require governments to:Value assets every yearAssess taxes on unrealized wealthExpand government oversight into private propertyRegardless of where someone stands politically, the debate reflects a larger issue:The U.S. tax system is complicated, and fairness is difficult to define.Tips, Tricks, and StrategiesConduct a “Tax Post-Mortem”Now that you’ve filed your taxes, take a few minutes to review your return and ask a few key questions.1. Did You Withhold Too Much?A large refund might feel good — but it means you gave the government an interest-free loan during the year.If your refund was larger than $1,000–$2,000, consider adjusting your withholding.2. Review Your Marginal vs. Effective Tax RateRemember:Marginal tax rate = rate applied to your last dollar of incomeEffective tax rate = your overall average tax rateUnderstanding the difference can help guide decisions like:Retirement contributionsRoth conversionsIncome timing strategies3. Look at Your Adjusted Gross Income (AGI)Review your AGI and see:Which tax bracket you fell intoHow close you were to the next bracketIf you were near a threshold, planning opportunities may exist for future years.Key TakeawayThe fairness of the tax code will always be debated.But instead of trying to solve the national tax system, the most productive step you can take is to focus on your own tax strategy.Better planning leads to better outcomes.And good financial planning always includes tax planning.ReferencesSOI Tax Stats - Individual statistical tables by tax rate and income percentile | Internal Revenue ServiceSummary of the Latest Federal Income Tax Data, 2025 UpdateIf You Enjoyed This EpisodeBe sure to:Follow the podcastShare the episode with someone preparing their taxesLeave a review to help others discover the showThis information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

Episode 107 Show NotesPay Taxes Now or Later? 7 Strategic Reasons to Consider Roth ConversionsThis episode airs on April 1st — just two weeks before the April 15th tax filing deadline — which makes it the perfect time to talk about proactive tax planning.While everyone has to pay taxes, no one should ever leave a tip.In this episode, we discuss why paying taxes strategically now — through Roth contributions and Roth conversions — may help you and your loved ones pay significantly less over your lifetime.If most of your retirement savings are in traditional IRAs or 401(k)s, this conversation is especially important. Pre-tax accounts can become what some call “ticking tax time bombs” because the taxes are still owed — and future tax rates are unknown.We walk through seven key reasons you may want to consider paying taxes sooner rather than later.In This Episode1️⃣ Avoiding the “Widow’s Tax”When one spouse passes away, the surviving spouse often moves from married filing jointly to single filing status — which can mean a significantly smaller standard deduction and potentially higher taxes. Strategic Roth conversions can help reduce that future burden.2️⃣ Preventing Large Tax Bills on Big WithdrawalsMajor purchases, healthcare costs, or bucket-list experiences may require large withdrawals. Taking those funds from pre-tax accounts can push you into higher tax brackets. Having tax-free Roth funds creates flexibility.3️⃣ Reducing Medicare Premium Surprises (IRMAA)Medicare premiums are income-based. Higher taxable income can increase your premiums through IRMAA. Managing future taxable income with Roth strategies can potentially help minimize these increases.4️⃣ Controlling Required Minimum Distributions (RMDs)RMDs are mandatory — whether you need the income or not. Large pre-tax account balances can force sizable taxable withdrawals later in life. Tax diversification gives you more control over your income in retirement.5️⃣ Protecting Heirs from the 10-Year RuleUnder the SECURE Act, most non-spouse beneficiaries must withdraw inherited retirement accounts within 10 years — often during their highest earning years. Roth conversions can serve as a tax-efficient legacy strategy.6️⃣ Using Non-Retirement Funds StrategicallyPaying conversion taxes from taxable or cash accounts may allow more of your retirement assets to grow tax-free over time.7️⃣ Hedging Against Future Tax IncreasesCurrent tax rates are historically low relative to federal debt levels. Roth strategies allow you to lock in today’s known rates instead of gambling on tomorrow’s unknown ones.Tips, Tricks & Strategies: The Golden Tax WindowWe also introduce the Golden Tax Window — the period between retirement and the start of Required Minimum Distributions.During these years:Earned income may be reduced or eliminatedTaxable income may be lowerRMDs have not yet begunThis window can provide a powerful opportunity to execute Roth conversions at favorable tax rates.Key TakeawayYou don’t pay less in taxes by accident. Lower lifetime taxes are the result of proactive, multi-year planning.Most Americans save primarily in pre-tax retirement accounts — but remember, those accounts are co-owned with the IRS. How much you ultimately keep depends on the planning you do today.Roth conversions are not one-size-fits-all. Work with a CFP® professional and qualified tax advisor to determine whether this strategy makes sense for your situation.If you found this episode helpful, please subscribe, share it with someone who could benefit, and leave a review.Remember: A better life is the result of better planning — and better planning includes proactive tax planning.

Retirement isn’t just the closing of one chapter — it’s the opening of another.In this episode, I explore how shifting your mindset from retirement to ReFirement can dramatically improve both your financial outcomes and your overall fulfillment. Rather than viewing retirement as a period of rest and withdrawal, I discuss how intentional planning can turn it into a season of renewed purpose, contribution, and personal growth.You’ll also learn about an increasingly popular early-retirement strategy known as Coast FIRE — and how it may provide more flexibility in your working years than you realize.In This Episode, I Discuss:🔹 Why the First Year of Retirement MattersHow early retirement habits shape the next 25–30 yearsThe emotional and identity shifts that occur after leaving a careerWhy traditional retirement planning often misses the human side of the transition🔹 ReFirement: A New Vision for RetirementMoving beyond financial capital to focus on Return on Happiness (ROH)Rediscovering passions, purpose, and contributionWhy retirement planning should center on meaning — not just money🔹 The Three Life-Planning QuestionsInspired by George Kinder’s life planning framework, I walk through three powerful exercises designed to uncover what truly matters:What would you do if you were financially free?How would you live if you had 5–10 years left?If today were your last day, what would you regret not doing or becoming?These questions help uncover untapped aspirations and align your financial plan with your deepest values.🔹 Coast FIRE ExplainedWhat FIRE (Financial Independence, Retire Early) really meansHow Coast FIRE differs from extreme early retirement strategiesWhen you’ve saved enough to let compound growth “do the heavy lifting”How Coast FIRE can allow for reduced hours, career pivots, or sabbaticalsThe financial and psychological risks to considerKey TakeawaysRetirement should be designed — not drifted into.Financial planning without life planning is incomplete.Accumulated retirement savings may already provide more flexibility than you realize.A better life is the result of better planning.Resources MentionedGeorge Kinder – Life Planning & EVOKE® ProcessThe Top Five Regrets of the Dying by Bronnie WareMr. Money Mustache (FIRE movement)If you found this episode helpful, please share it with someone planning for retirement or considering a more flexible financial future.Remember: you only get one life. Plan accordingly.

Episode 105: The Real State of Retirement in AmericaRetirement is supposed to be the reward after decades of hard work—but for many Americans, it’s filled with uncertainty, stress, and fear.In this episode of the One for the Money Podcast, we take an honest look at what retirement really looks like in America today, based on recent survey data from current retirees. The findings are eye-opening—and in some cases, heartbreaking.Drawing on both national research and real-world experience working with retirees every day, this episode breaks down what’s going wrong, what retirees are worried about most, and why so many people aren’t enjoying retirement the way they expected.We also wrap up with a Tips, Tricks, and Strategies segment packed with practical ideas for both pre-retirees and retirees who want more clarity, confidence, and enjoyment in retirement.What You’ll Learn in This EpisodeThe Emotional Reality of RetirementWhy retirement brings both hope and fearThe most common questions retirees ask themselves:“Do I have enough?”“Will my money last?”“Am I doing everything I can?”Shocking Findings from the 2025 U.S. Retirement SurveyBased on a national survey of 1,500 investors (including 373 retirees):Only 40% of retirees believe they have enough money45% say retirement expenses are higher than expected62% have no idea how long their money will lastWe break down what’s driving these numbers—and what can be done about them.Why So Many Retirees Feel Financially Insecure1. Fear of Spending MoneyMany retirees default to “spend less and hope” instead of following a real planThe decumulation paradox: most retirees never touch their principalWhy the real risk for many isn’t running out of money—but running out of time2. Retirement Expenses Are Higher Than ExpectedHousing, transportation, and household costs don’t disappearHealthcare and leisure spending often skyrocketThe reality behind Fidelity’s estimate that retirees spend 55–80% of pre-retirement income every year3. No Clear Answer to the Big QuestionWhy knowing how long your money will last requires stress-testing your planThe importance of planning for market downturns, inflation, longevity, and long-term careTop Retirement Concerns in 2025According to retirees surveyed:92% worry about inflation86% worry about healthcare costs80% worry about market corrections71% don’t know the best way to generate income70% worry about outliving their assetsThe Most Heartbreaking Statistic of AllWhen retirees were asked how they feel about their financial situation:Only 5% said they are living their dream37% feel comfortable39% say “not great, not bad”16% are struggling3% say they are living a nightmareAnd 64% of retirees don’t work with a financial professional—a gap that often leads to confusion, fear, and missed opportunities.Tips, Tricks, and StrategiesFor Pre-RetireesKnow exactly where you stand financiallyMaximize savings during your peak earning yearsReview all income sources and their reliabilityGet serious about managing debtPrioritize health and fitnessPlan healthcare before age 65 if retiring earlyReduce taxes with smart Roth and charitable strategiesEvaluate housing options and long-term suitabilityPrepare for long-term care expensesUpdate estate plans, beneficiaries, and powers of attorneyFor RetireesFocus on:Optimizing retirement incomeReducing unnecessary investment riskChoosing the right Medicare coverageCapturing every available tax opportunityKeeping estate plans updated and clearly communicatedFinal ThoughtsRetirement should not be lived in constant fear. With the right planning across income, investments, taxes, insurance, and estate planning, retirees can gain clarity—and the confidence to actually enjoy the life they worked so hard to build.A better life is the result of better planning—especially when it comes to retirement planning.Thanks for listening to Episode 105 of the One for the Money Podcast.ReferencesLiving in Retirement: Schroders US Retirement Survey

Episode 104: Should You Pay Off Your Mortgage Early?Is owning a home really the American Dream… or is owning it free and clear the real goal?In Episode 104 of One for the Money, we tackle one of the most common—and emotionally charged—financial questions homeowners ask: Should you pay off your mortgage early?The answer isn’t just about math. It’s about psychology, peace of mind, and how your mortgage fits into your bigger financial picture.What You’ll Learn in This EpisodeWhy over 40% of U.S. homeowners are mortgage-free—and what that trend tells usThe key numbers to evaluate before paying off your mortgage earlyWhy your amortization schedule matters more than you thinkWhen a low mortgage rate makes paying early a bad financial moveThe truth about the mortgage interest “tax deduction” mythWhether you can realistically retire with a mortgageHow peace of mind sometimes beats spreadsheets—and when it shouldn’tMath vs. MindsetWe break down when paying off your mortgage makes sense mathematically, and when it may make sense psychologically—even if the numbers say otherwise. After all, you can’t put a price tag on sleeping better at night.Tips, Tricks & Strategies SegmentIn this episode’s strategy segment, you’ll learn:A simple extra-payment strategy that can:Cut years off your mortgageSave tens of thousands of dollars in interestA real-world example showing how one extra payment per year can shave over 4 years off a 30-year mortgageSmall habit. Big impact.Key TakeawayPaying off your mortgage early isn’t a one-size-fits-all decision. It depends on:Your savingsYour interest rateYour tax situationYour retirement timelineAnd yes… your peace of mindA paid-for home can offer something no mortgage ever will: freedom.ReferencesWhy 40% of U.S. homeowners have no mortgage—and the number keeps growing - Fast Company

There aren’t enough homes. Homes are too expensive. And mortgage rates are too high.In Episode 103 of One for the Money, I break down how the U.S. housing crisis was created, why it persists, and what realistic solutions could actually improve affordability.This episode goes beyond headlines and politics to diagnose the root causes of the crisis—using plain economics, real-world examples, and historical context. We also share practical guidance for anyone considering buying a home in today’s challenging market.🎧 What You’ll Learn in This EpisodeWhy the housing crisis is fundamentally a supply-and-demand problemHow the early 2000s housing boom and NINJA loans set the stage for collapseWhy the Great Recession permanently reduced housing supplyHow zoning laws and building regulations increased home pricesThe role ultra-low interest rates played in fueling demandHow COVID-19 accelerated housing inflation at historic levelsWhy inflation and Fed rate hikes froze the housing marketThe “rate lock-in” effect keeping homeowners from sellingWhy younger generations are being priced out of homeownership🏡 Data Points DiscussedU.S. home prices rose 40–50% between 2020–2022Average long-term home appreciation (1990–2023): ~4.4% annuallyMortgage rates jumped from the mid-3% range to mid-6%Median age of first-time homebuyers rose from 32 (2000) to ~40 (2025)💡 Solutions ExploredWhy 50-year mortgages would likely make the problem worseThe potential of portable (assumable) mortgages to unlock supplyTargeted rate incentives for first-time buyersWhy boosting supply—not demand—is the key to fixing housing🧠 Tips, Tricks & Strategies SegmentPractical advice for anyone thinking about buying a home:Why your primary residence should not be treated as an investmentWhy staying in a home at least 10 years often makes the math workWhen relocating may make financial senseHow to choose a home that allows you to grow and age in placeWhy attending open houses years in advance makes you a smarter buyerHow to spot good construction, smart layouts, and strong neighborhoods🎯 Key TakeawayHousing affordability isn’t about individual failure—it’s the result of policy decisions, economic forces, and timing. Understanding those forces allows you to make smarter decisions and plan more effectively for the future.ReferencesHomeownership TrendsHousing market deep freeze: The Fed successfully froze U.S. home prices for one year | FortuneMortgage Rate History: 1970s To 2025 | BankrateUnited States House Price Index YoY

The stock market can feel like a rollercoaster—especially when the drops are steep. Declines of 20% or more are known as bear markets, and while they can be frightening, they’re also a normal part of investing.In this episode, I explain why bear markets shouldn’t be feared, how often they really occur, and—most importantly—what actions investors should (and shouldn’t) take when they happen. Drawing on history, personal experience, and real-world examples, we’ll explore how emotional decisions can derail long-term success and how proper planning can help you stay on track.You’ll also hear a powerful story from my own past investment mistakes during the 2007–2009 financial crisis, and why staying invested matters more than trying to time the market.In the Tips, Tricks, and Strategies segment, I’ll share a practical bear market investment strategy designed to help you make good things happen—even when markets feel overwhelming.In this episode, you’ll learn:What defines a bear market and how often they occurWhy bear markets are a normal (and necessary) part of investingThe biggest mistake investors make during market downturnsHow time horizon impacts bear market strategyWhy planning before a downturn is criticalA simple framework to approach bear markets with confidenceBear markets may be scary—but with the right plan, they can also be opportunities.Thank you for listening. Now, on with the show. 🎙️

Happy New Year, and welcome to episode 101 of the One for the Money podcast!This episode airs on January 1st—a perfect moment for financial resolutions and fresh starts. If getting back on track with your money is one of your goals for the new year, this episode will help you make one of the most important decisions in your financial life: whether to hire a financial advisor, and how to choose the right one.In This EpisodeI’ll share the 10 essential questions you should ask when interviewing a financial advisor, including:Whether the advisor is a true fiduciaryHow they are compensatedHow often you’ll meetHow many clients they serveTheir education, experience, and credentialsWhether they review your tax return and estate documentsHow they manage their own financesAnd more insights that help you avoid conflicts of interest and ensure you’re hiring someone who will put your interests firstI’ll give personal examples from my own practice at Better Planning Better Life, as well as real stories of people who tried to “DIY” their finances and paid the price.Why This MattersFinancial mistakes are often invisible at first… but they compound over time. And while many of us hesitate to discuss money, the consequences of mismanaging it can follow us for decades. A great advisor can help you avoid costly errors, stay on track, and make informed decisions with confidence.Tips, Tricks & StrategiesIn the final segment, I’ll explain a simple but powerful cash-management strategy to protect your purchasing power from inflation—the silent thief.You’ll learn:How much cash to keep in reservesWhere to keep it for maximum yieldWhen to consider higher-yield instrumentsWhy doing nothing with your cash can quietly cost you thousandsEpisode HighlightsThe danger of default 401(k) mistakesWhy relying only on the company match is rarely enoughHow financial “invisibility” leads people to miss opportunitiesWhat transparency from an advisor should look like (including how I show clients my own plan)Who This Episode Is ForAnyone considering hiring a financial advisorAnyone unhappy or uncertain about their current advisorDIY investors wondering if they’re missing somethingAnyone wanting a smarter, more intentional financial plan for 2025Anyone with too much cash sitting in low-yield bank accountsTakeawayA better life is the result of better planning. Asking the right questions—and using the right cash strategy—can help you start the year with clarity, confidence, and momentum.ReferenceHiring a Financial Adviser: 10 Questions to Ask | Kiplinger

Episode 100 — A License to Spend: How to Use Your Money to Create Compounding MemoriesOverviewWelcome to the 100th episode of the One for the Money podcast! In this milestone episode, we explore the driving force behind our work with clients: giving them permission—a license—to spend intentionally so they can create a richer, more meaningful life.While compound interest is powerful, the compound effect of memories is even greater. We discuss why now—not someday—is the time to invest in the experiences that matter most. From family road trips to sabbaticals, from national parks to international adventures, this episode dives into the intersection of money, time, and health, and how better planning leads to a better life.In the Tips, Tricks, and Strategies segment, we break down six research-backed ways money can buy happiness—when used intentionally.What You’ll LearnWhy memories compound better than moneyThe importance of spending earlier, not laterHow health, time, and money intersect—and why waiting until retirement is often too lateHow experiences become lifelong “dividends” to your future selfInsights from Die with Zero by Bill PerkinsWhy Americans struggle to take vacation—and why that needs to changeSix evidence-based ways money can truly enhance happinessHow better planning gives you a “license to spend”Key TakeawaysMemories compound over time and are often worth more than the dollars saved.You can’t get your health or your kids’ childhood back. Use your money when you have both time and vitality.Spending intentionally—especially on experiences—yields long-term happiness.A financial plan exists to help you live well, not simply to help you accumulate more.Don’t wait until retirement to enjoy life. Balance smart saving with purposeful spending.Resources MentionedBook: Die with Zero by Bill PerkinsArticle: “6 Ways Money Can Buy Happiness” — Ronald Sier on Kitces.comPodcast inspiration: Tim Ferriss Show (question on most-gifted book)Concept: “Sharpen the Saw” — Stephen Covey, The 7 Habits of Highly Effective PeopleSix Research-Backed Ways Money Can Buy HappinessSpend on others, not just yourselfSpend to buy time and reduce stressSpend now, enjoy later — the power of anticipationSpend on experiences, not thingsSpend on small pleasures more oftenSpend to support fundamental human needs — growth, connection, purposeQuotes From This Episode“Memories compound better than money.”“A financial plan is not just about avoiding running out of money—it’s about avoiding running out of time.”“Life is a choice. Choose consciously. Choose wisely. Choose memories.”

🎧 Episode 99: I Got 99 Problems, But a “B” (as in Budget) Shouldn’t Be One📝 Episode SummaryIn this episode of One for the Money, we tackle one of the most important — and misunderstood — topics in personal finance: budgeting. Whether you call it a “budget” or a “spending plan,” having a strategy for where your money goes is the difference between drifting financially and sailing toward your goals with purpose.But budgeting isn’t about restriction — it’s about freedom. You’ll learn how to make your money work for you, avoid common pitfalls, and even hear real-life stories (from family lessons to famous fortunes lost) that drive home the power of a plan.💡 In This Episode You’ll Learn:Why budgeting is the rudder of your financial life — and how to steer your money with confidence.The difference between a budget and a spending plan — and why the latter feels a lot better.How to apply the 20/50/30 Rule (and why paying yourself first changes everything).A smart adjustment if you’re tackling high-interest debt — the 5/50/40 method.The emotional and relational benefits of budgeting, including how money communication can strengthen marriages.Cautionary tales from high earners like Antoine Walker and Johnny Depp — proof that more money doesn’t fix bad money habits.A simple system to review and adjust your budget so it actually works in real life.The Rocks, Pebbles, and Sand analogy — your new framework for prioritizing spending.How to know if your budget’s off course (and how to fix it fast).💬 Memorable Quotes“A budget is the rudder on your financial ship. Without it, you’re just drifting — hoping the current takes you somewhere nice, preferably with Wi-Fi and low property taxes.”“Don’t save what’s left after spending. Spend what’s left after saving.” – Warren Buffett“Good things don’t happen to good people — they happen to people who do good planning.”“You can have 99 problems in life, but a B — as in no Budget — shouldn’t be one.”⚙️ Tips, Tricks & StrategiesAutomate everything you can — savings, retirement contributions, and bills.Review your budget regularly — weekly if you’re partnered, monthly if solo.Pay yourself first — even if it’s just 5%, build the habit.Budget for adventures, not just retirement. Life’s too short not to make memories along the way.Watch your “sand” spending (those small daily luxuries) so you have room for the big rocks.🔍 Quick Budget Gut-CheckIt might be time for a reset if:You carry credit card debt month to month,You lack a 3-month emergency fund,You’re saving less than 10–15% for retirement.📈 Key TakeawayBudgeting isn’t about deprivation — it’s about direction.A well-designed budget gives you more choices, more peace, and a better life.📚 Resources & MentionsBetter Planning, Better Life frameworkWarren Buffett’s philosophy on savingAntoine Walker’s financial literacy foundation (for athletes)The 50/30/20 rule (and how to adapt it to 20/50/30 or 5/50/40)🎯 Episode ChallengeTake 20 minutes this week to review your own “rudder.”Ask yourself:Am I telling my money where to go, or wondering where it went?What’s one category I can adjust to better align with my goals?Then, automate one new financial habit — savings, debt payment, or investment — before next payday.

🎧 Episode 98 — What's Your Plan For After You Are Gone?📝 Episode SummaryBenjamin Franklin once said, “Nothing is certain except death and taxes.” In this episode of One for the Money, we’re tackling one of those certainties: death—and more specifically, what happens to your assets and loved ones after you pass.While we can't answer the big question of where we go when we die, we can answer the important question of what happens to your estate. This episode covers why estate planning is not just for the wealthy, but for everyone who wants to protect their family, preserve their legacy, and avoid unnecessary legal headaches.🔑 What You’ll Learn in This EpisodeWhat an estate plan actually is (and what it includes)The default estate plan you already have—whether you like it or notWhy probate court is costly, slow, and public—and how to avoid itReal-life cautionary tales of celebrities who died without a planWhy women are disproportionately impacted by poor estate planningThe 5 domains of financial planning and how estate planning fits inThe four key benefits of having a comprehensive estate plan:✅ Control✅ Family protection✅ Avoiding intestacy✅ Incapacity planningThe essential estate documents everyone should haveCommon benefits of trusts—privacy, speed, control, and tax efficiencyA powerful mindset shift: think legacy, not death💡 Tips, Tricks & Strategies SegmentIn the second half of the episode, we share a critical tip:🧠 The biggest risk of not having an estate plan isn’t legal—it's emotional.Estate plans aren't just about legal documents—they're about maintaining family unity. Hear real-life stories of how families were torn apart due to poor or unclear planning, and learn how to avoid becoming a cautionary tale.📌 Resources & ReferencesKiplinger: Widows Move Forward on Their Own—But Not AloneFidelity: Estate Planning BasicsLegalZoom: 10 Famous People Who Died Without a Will📣 Call to ActionIf you don’t have an estate plan—or haven’t updated it in a while—this episode is your wake-up call. Talk to a trusted estate attorney and work with a Certified Financial Planner to ensure your family is protected and your legacy preserved.

Episode SummaryIn this episode of One for the Money, we explore a common misconception that holds too many people back from reaching their full financial potential: believing that having accounts equals having a financial plan.I share my personal financial journey — including real-life challenges, eye-opening lessons, and hard-won insights — to demonstrate why a collection of IRAs, 401(k)s, and 529s doesn’t constitute a plan.You'll also learn about the five essential domains of financial planning, and why aligning these with your ideal life is the key to long-term success and fulfillment.Whether you’re nearing retirement, building wealth, or just starting out, this episode will challenge the way you think about your money and help you take the first steps toward better planning and a better life.What You'll Learn in This EpisodeWhy most Americans mistake accounts for a financial plan — and the risks of doing soThe five critical areas every true financial plan must addressHow to align your money with your life’s most important goalsReal client stories that reveal costly — and avoidable — financial mistakesHow to avoid being among the 60% of retirees who wish they could do it overOne actionable strategy to kick-start your personal planning journey todayTips, Tricks & Strategies SegmentThis week’s actionable strategy:Envision your ideal life, then build your financial plan around it.Learn how to prioritize your goals, assess alignment with your current financial picture, and determine whether you're on the most efficient path to achieving what matters most. Spoiler alert: It starts with clarity and ends with intentional planning.The 5 Domains of a Complete Financial PlanIncome – Your cash flow strategy (now and in retirement)Investments – Your portfolio allocation and growth strategyInsurance – Risk management and protection for your familyTaxes – Lifetime tax planning to maximize after-tax wealthEstate Planning – Directing your legacy with wills, trusts, and powers of attorneyMemorable Quotes“We don’t rise to the level of our dreams — we fall to the level of our planning.”“A 401(k) is not a plan. A Roth IRA is not a plan. A bunch of accounts is not a plan.”“Better planning leads to a better life. Especially when it’s based on your best life.”Want More?Subscribe to One for the Money on your favorite podcast platform.Ready to plan your ideal retirement? Schedule a free consultation with our team.https://BetterPlanningBetterLife.com Connect with Jonny on LinkedIn

Episode 96 — Debunking Social Security Myths (Part 2)Episode SummaryIn this second installment of our two-part Social Security series, we continue busting the most common — and costly — myths surrounding Social Security.From the misconception that Social Security alone can fund a comfortable retirement, to the idea that everyone automatically qualifies for benefits, these misunderstandings can lead to financial shortfalls that are hard to recover from.We’ll unpack the math, explore real-life examples, and explain why personalized retirement planning is essential. We’ll also share a valuable strategy for those claiming spousal benefits — and how to avoid leaving money on the table.Remember: Social Security is important, but it’s just one part of your retirement plan.What You'll Learn in This Episode:Why contributing to Social Security isn’t the same as saving for retirementHow much income Social Security really replaces — and for whomThe truth about who qualifies for benefits (and who doesn't)Why some retirees are shocked by how little they receiveHow Australia’s retirement system compares to Social SecurityWhen (and when not) to claim spousal Social Security benefitsKey Takeaways:Social Security is not a retirement plan. It's a supplement — not a substitute — for personal savings like IRAs or 401(k)s.Claiming early reduces benefits, and delaying only helps if it’s your own benefit — not a spousal one.Spousal benefits cap out at 50% of your spouse’s full benefit and do not increase after your FRA.Only those who’ve paid into the system for 10+ years qualify — and even then, benefits are based on your 35 highest-earning years.Under-the-table wages hurt your future benefits. Report income accurately to protect your retirement.A holistic retirement strategy — including taxes, income sources, longevity, and goals — leads to better outcomes.Referenced Resources:Listen to Episode 95 – Debunking Social Security Myths (Part 1)Social Security Administration Benefit Calculator: ssa.govAARP: Understanding Social Security’s Progressive Benefit FormulaWant More?Subscribe to One for the Money on your favorite podcast platform.Ready to plan your ideal retirement? Schedule a free consultation with our team.https://BetterPlanningBetterLife.com Connect with Jonny on LinkedIn🎯 Closing ReminderSocial Security decisions are too important to leave to guesswork or general advice. Get the facts, make a plan, and as always — remember:A better life begins with better planning.Thanks for listening to One for the Money!

Episode 95: Myth Busters – Social Security Edition (Part 1)Episode OverviewIn this episode of One for the Money, we take on one of the most misunderstood areas of retirement planning: Social Security. Despite being around for 90 years, myths and misinformation still lead people to make costly mistakes—sometimes losing hundreds of thousands of dollars in lifetime benefits.This is Part 1 of our Social Security Myth Busters series, where we’ll tackle two of the most common myths about claiming benefits. In addition, the Tips, Tricks, & Strategies segment covers an often-overlooked opportunity with spousal and ex-spousal benefits.What You’ll LearnWhy Social Security is such a critical piece of retirement incomeThe true costs of claiming early at age 62 versus waiting until full retirement age or age 70Why the fear of Social Security “running out” is misleadingThe most likely fixes to secure the program’s long-term futureA strategy for spousal and ex-spousal benefits that can add unexpected valueMyth #1: You should take Social Security at 62 because it’s available.Claiming early reduces benefits by about 30% for life.Waiting until 67—or even better, 70—can increase lifetime benefits dramatically.Delaying acts like a guaranteed 6–8% return per year, something most investors can’t match consistently.Early filing penalties apply if you’re still working.Myth #2: Social Security is going to run out.While the trust fund is projected to deplete by 2034, payroll taxes will still fund about 80% of benefits.Likely adjustments—raising the income cap, modest tax increases, or raising the retirement age—are far more probable than eliminating benefits.We’ve faced this before, and reforms extended the program by decades. History suggests the same will happen again.Tips, Tricks, & Strategies Segment: The Ex-FilesDivorced after a marriage that lasted 10 years or more? You may qualify for ex-spousal benefits—up to 50% of your former spouse’s benefit, or your own, whichever is greater. Your ex won’t be notified, and their benefits won’t be reduced. With the right documentation, this strategy can meaningfully improve your retirement income.Episode Highlights & Quotes“Claiming Social Security early isn’t just a smaller check for a few years—it’s smaller for life.”“Delaying benefits is the closest thing to a guaranteed return most retirees will ever see.”“The idea that Social Security will ‘run out’ is a myth. Adjustments will be made, just as they have in the past.”“Sometimes, the best retirement strategy from a marriage comes long after it ends.”Planning Your Next StepsIf you’re unsure about when to claim Social Security, don’t guess—or rely on casual advice. At Better Planning, Better Life, we help you make the right decision in the context of your entire financial plan. Schedule a free consultation with us today.Want More?Subscribe to One for the Money on your favorite podcast platform.Ready to plan your ideal retirement? Schedule a free consultation with our team.https://BetterPlanningBetterLife.com Connect with Jonny on LinkedIn

🎧 Episode 94: How to Protect Yourself in the Retirement Danger Zone🎙 One for the Money Podcast💡 Episode SummaryYou’ve worked, saved, and sacrificed for decades—and now retirement is finally within reach. But what happens if the market crashes just as you’re ready to cash in on all that hard work?In this critical episode, we explore how to protect your retirement during the most financially vulnerable decade of your life: the five years before and after you retire—a period I call the Retirement Danger Zone.You’ll learn:The real-world lessons from the COVID-19 market crashWhy emotional decisions can destroy retirement plansThe three-bucket strategy for safer, smarter retirement withdrawalsHow a rising equity glidepath can actually improve long-term outcomesThe power of dynamic withdrawal strategies backed by over 100 years of market historyWhy delaying Social Security to age 70 is a game-changer for long-term incomeWhether you’re approaching retirement or advising someone who is, this episode offers essential insights to ensure decades of planning aren’t undone by fear or poor timing.🛠 Tips, Tricks & Strategies SegmentIn this episode’s bonus segment, I reveal the truth about a financial product often sold to retirees under the guise of “safety”: annuities.Why fixed index annuities may cost more than they’re worthHow they limit your upside, lock up your funds, and come with steep surrender chargesWhy salespeople love them—and why I don’t recommend them for my clients🔑 Key TakeawaysThe Retirement Danger Zone is a 10-year window (5 years before and after retirement) where financial decisions have outsized consequencesMarket downturns during this period can have a permanent impact if you’re not preparedA well-designed plan using investment segmentation, dynamic spending, and delayed guaranteed income can make your retirement more secure and flexibleAnnuities are not a substitute for planning—and often benefit the seller far more than the buyer📘 Resources & MentionsEpisode 93: Why Your First Year of Retirement Is the Most ImportantRudyard Kipling’s If— (poem referenced)Fidelity data on investor behavior during the COVID crashResearch on rising equity glidepaths (Michael Kitces, et al.)Want More?👉 Subscribe to One for the Money on your favorite podcast platform.👉 Ready to plan your ideal retirement? Schedule a free consultation with our team.https://BetterPlanningBetterLife.com Connect with Jonny on LinkedIn

Episode 93: Why Your First Year of Retirement Matters MostIn this episode of the One for the Money podcast, we explore why your first 12 months of retirement are critical in shaping your long-term financial, emotional, and lifestyle success.✅ What you’ll learn:Why the first year sets the tone for your entire retirementThe six key ingredients for a fulfilling retirementCommon mistakes new retirees make — and how to avoid themHow to align your spending, purpose, and habits early onWhy boredom, not just money, drives many retirees back to work💡 Tips, Tricks & Strategies Segment:Discover how travel planning can ease your transition and bring joy, structure, and anticipation to your early retirement experience.🎙️ Whether you’re newly retired or preparing for it soon, this episode will help you approach retirement’s first year with intention and clarityReferenced article: Kiplinger: The First Year of Retirement Rule

Episode 92: The Swiss Army Knife of Investment Accounts💡 Episode Summary:When it comes to financial freedom — especially for early retirees — there’s one unsung hero in the investment world: the non-retirement brokerage account. In this episode, we explore why this versatile, often overlooked account deserves a permanent place in your financial toolkit.Using the metaphor of a childhood favorite (yes, the trusty Swiss Army knife), we’ll break down the three major reasons this type of account is invaluable — not just for early retirees, but for anyone who wants flexibility, tax efficiency, and freedom with their investments.Whether you're planning to retire in your 40s, 50s, or beyond, this episode gives you the clarity to make smarter decisions about where your money goes.🧭 What You’ll Learn:✅ What a non-retirement (brokerage) account actually is✅ Why it’s the ultimate flexible investment account✅ The surprising tax advantages that rival even retirement accounts✅ A comparison between Roth IRAs and brokerage accounts✅ The true cost (and limits) of accessing retirement funds early✅ Exceptions to the 59½ rule — including the Rule of 55 and 72(t)✅ A simple funding order strategy based on your retirement timeline✅ Why early retirees must consider non-retirement accounts in their plan🛠️ Tips, Tricks & Strategies:When should you invest in a brokerage account over a 401(k)?How much should you save if you're planning to retire in your 40s?Why an HSA might be your secret early retirement weaponHow to avoid taxes on six-figure gains with the right planning📚 Resources Mentioned:Episode 81 – What to Tackle Before You Start Investing🧠 Quote of the Episode:"A non-retirement account is like the Swiss Army knife of investing — you may not think you need it until you really, really do."

🎧 Episode 91: The 5 Domains of Better Financial Planning🔍 Episode OverviewIn this episode of One for the Money, we explore the Five Domains of Better Financial Planning—a framework that, when fully addressed, helps individuals and families live with greater financial confidence, clarity, and purpose.Drawing parallels from real-life stories and even lessons from a classic hunting book, this episode delivers powerful metaphors and cautionary tales that illustrate what can happen when you ignore or neglect key areas of your financial life.📌 What You’ll LearnWhat the Five Domains of financial planning are and why they matterHow each domain contributes to a more complete, resilient financial strategyReal-world examples of what can go wrong when a domain is ignoredHow financial ignorance or carelessness in any of these areas can have lasting consequencesA suggested order for tackling these domains, based on life stage and financial priorities💡 The 5 Domains of Financial PlanningInvestments – Building and managing your wealth through proper asset allocation.Income – Managing cash flow through salary, pensions, investments, and more.Insurance – Protecting your financial well-being through risk management.Taxes – Minimizing your lifetime tax burden through proactive strategies.Estate Planning – Ensuring your wishes are honored and loved ones are protected.🔁 Tips, Tricks, & Strategies SegmentWondering where to start? In the second half of the episode, we break down the optimal order to address each domain:Insurance (especially for those with dependents)Income and Cash FlowInvestments and AllocationsTax Planning StrategiesEstate Planning (especially critical after age 60)📖 Episode Highlights & Quotes“Financial planning isn’t a single plan—it’s five smaller plans working in harmony.”“Like a hunter misjudging a lion, financial ignorance can be fatal to your future.”“A GoFundMe page is not a financial plan.”“Taxes and estate planning are often the most neglected—and the most costly—if ignored.”“The real purpose of estate planning is preserving family legacy—not just avoiding probate.”📚 Mentioned in This EpisodeBook: Killers in Africa by Alexander Lake(Used for metaphorical lessons about ignorance and carelessness in decision-making.)🧠 Call to ActionIf you haven't addressed all five domains in your financial plan—or if you’re not sure where to begin—we’re here to help. Schedule a free consultation with us at Better Planning Better Life and take the first step toward a more secure and confident financial future.✅ Subscribe & ReviewIf you enjoyed this episode, please consider:Subscribing to One for the Money on your favorite podcast platformLeaving a 5-star review to help others discover the showSharing it with a friend or family member who might benefit

🎙️ Episode 90 — The Case for Concern: Understanding and Responding to the U.S. Debt CrisisWelcome to episode 90 of the One for the Money podcast! In this important installment, we flip the script from optimism to realism. While there’s much to be hopeful about, it’s equally vital to acknowledge the financial risks facing our country—particularly the growing national debt and its long-term implications.📉 In this episode, we break down:Why optimism about humanity’s future is warranted (Episode 89 recap)The alarming rise in U.S. federal debt and spending trendsThe impact of over $1 trillion/year in interest paymentsThe bipartisan nature of overspendingReal-life analogies to explain the scale of the debt crisisHow these issues may affect taxes and future economic growth📌 We also explore:Past episodes that discussed tax planning and deficit concernsA powerful analogy from The Pied Piper of Hamelin—and what it means for our kidsPractical, actionable steps you can take to protect your financial future💡 Tips, Tricks, and Strategies Segment:Why now is the time to engage in proactive tax planningTax-saving strategies including Roth conversions, defined benefit plans, tax-loss/gain harvesting, and moreThe power of using tools like the Augusta Rule, Health Savings Accounts, and strategic charitable giving🧠 Featured Past Episodes Mentioned:Episode 1 – Roth & 401(k) contributionsEpisode 2 – Health Savings AccountsEpisodes 6, 12, 26 – Roth IRAs & Roth conversionsEpisodes 8–9 – The Augusta RuleEpisode 7 – Defined Benefit PlansEpisode 26 – Tax gain harvestingEpisode 29 – HSA strategiesEpisode 33 – Time to Pay the Piper🔜 Coming Next:A deep dive into NUA (Net Unrealized Appreciation)—a significant but underutilized tax-saving opportunity hidden in many 401(k)s.📢 Call to Action:Get involved in your local primaries. Fiscal discipline should be a priority—regardless of political party.Start tax planning now. Don’t wait for Congress to act—because they probably won’t until they’re forced to.🔗 Resources Mentioned:USDebtClock.orgLearn more about David Bahnsen’s proposals on fiscal reformIRS information on Roth IRAs, HSAs, and tax strategies

🎙️ Episode 89 – The Case for Optimism 2025Welcome to the 4th annual "Case for Optimism" episode! In the midst of global challenges—from ongoing wars to economic uncertainty—this episode highlights why we still have so many reasons to be hopeful.Each year, I dedicate one episode to stepping back, taking a broader perspective, and focusing on the positive trajectory of human progress. From unprecedented advances in technology and medicine to dramatic reductions in global poverty, this is a reminder that—despite what the headlines may say—the world continues to move forward.We also dive into why the U.S., despite its current political divisions, remains one of the most dynamic and productive nations in history. Plus, in the Tips, Tricks & Strategies segment, I’ll share how travel can be one of the most powerful ways to foster optimism and gratitude.💡 What You’ll Learn in This Episode:📈 Why the global trend line of human progress is more positive than you might think📉 How extreme poverty has fallen from 80% to under 9% worldwide in just two centuries🤖 How technology, especially AI, is supercharging our capacity to learn, create, and connect🏞️ Why the United States remains uniquely positioned for success, both economically and geographically🌍 How spending money on experiences, especially travel, can help you cultivate joy and a more hopeful mindset🔍 Highlights & Key Stats:Global economic growth: The world economy has grown 100x in the past 200 years.Poverty decline: From 80% in extreme poverty (1800s) to less than 9% today.U.S. wealth boom: American net worth has grown by $100 trillion over the past 15 years.Technology leap: AI tools are now doing in minutes what used to take humans weeks or months.Starlink growth: From 2 satellites in 2018 to over 7,200 in 2025—connecting even the most remote areas.Quote of the episode: “If you had to choose blindly what moment in history to be born, you’d choose now.” – Barack Obama🧠 Resources Mentioned:HumanProgress.org – Data-driven optimism about global developmentA Wealth of Common Sense: $100 Trillion in Wealth CreationBasic Economics by Thomas Sowell – A powerful explanation of economic principles and America’s geographic advantagesMark Twain’s quote on travel and open-mindedness✈️ Tips, Tricks & Strategies:Tip of the episode:Use money to create perspective and joy—travel!Explore national parks or international cultures to gain insight, gratitude, and lasting memories. Travel helps you appreciate what you have and opens your eyes to the beauty of other ways of life.🎧 Listen & Subscribe:If you enjoyed this episode, be sure to check out previous “Case for Optimism” episodes:Episode 17Episode 32Episode 63Subscribe and leave a review to help others find One for the Money. Your support means the world!📬 Connect:Website: [Insert your podcast or business site]Email: [Insert contact email]Social: [Insert Instagram, Twitter, LinkedIn, etc.]Remember: A better life is a result of better planning.

Welcome to One for the Money! In Episode 88, we explore retirement as a journey—and each important stop along the way. From your 20s through your 60s (and beyond), you’ll learn what to focus on at each stage, how to avoid costly pitfalls, and how to test-drive retirement with a mini-retirement that just might change your life.🔑 In This Episode, You’ll Learn:The 5 key retirement milestones: Before 50, 50, 55, 60, and 65—and what you should be doing at each one.How to use catch-up contributions at age 50+ to turbocharge your savings.Why age 55 offers hidden opportunities for penalty-free withdrawals and boosted HSA contributions.The “Danger Zone” around age 60 and how to protect yourself from market volatility.Why claiming Social Security early (at 62) may cost you big time—and how to decide when to claim.What to know about Medicare deadlines at age 65 to avoid lifelong penalties.The latest updates to 401(k) contribution limits and Required Minimum Distribution (RMD) ages for 2025.🧠 Tips, Tricks & Strategies Segment: The Power of a Mini-RetirementTaking a break between jobs? Consider a mini-retirement—a planned sabbatical where you rest, recharge, and test-drive your future lifestyle. Learn:What a mini-retirement is (and why it’s more than just a vacation).How mini-retirements can offer massive tax advantages (yes, really!).Why experiencing other cultures in your 40s or 50s might beat waiting until your 70s.How to time it right when switching jobs for minimal disruption and maximum impact.📺 Referenced Episodes:Episode 6: Making Retirement MeaningfulEpisode 26: Mini-Retirement & Tax Benefits📌 Key Quote:“We don’t rise to the level of our dreams—we fall to the level of our planning.”✅ Action Steps:Review your financial plan at each milestone age: 50, 55, 60, 62, 65, 67, 70, and beyond.Assess your plan using the 5 Domains: income, investments, insurance, taxes, and estate planning.Explore the option of a mini-retirement—especially during a career transition.Talk to a Certified Financial Planner (CFP®) to optimize your strategy.📬 Want More?👉 Subscribe to One for the Money on your favorite podcast platform.👉 Ready to plan your ideal retirement? Schedule a free consultation with our team.

Welcome to episode 87 of the One for the Money podcast. Retirement is the ultimate dream for many, but there are realities of retirement that everyone needs to be aware of. Better retirement planning will incorporate these realities so it leads to a better life in retirement. In the tips, tricks, and strategies portion, I will share ten tips when you are 10 years from retirement.In this episode...Your Biggest Expense Isn’t What You Think [2:08]Your Biggest Fear is Misplaced [3:20]Regret is More Common Than You Think [4:40]The Real Risk Isn’t a Market Crash [5:08]Your Most Expensive Years Are… Surprising [5:59]Your Health = Your Wealth [6:26]Identity Crisis Incoming [6:48]Estate Planning is About More Than Money [7:30]We often forget that retirement is only a recent invention. It hasn’t been around for that long. For most of human history, people worked until death or until their family could care for them when they were unable to work any longer. Retirement allows one to enjoy a life of leisure even though one is still capable of work. It really is a more amazing concept than we give it credit, and it truly is an absolute luxury of both the modern and first world. It’s amazing to think that a person can work and invest for 30-40 years and then live off that work for another 30-40 more years. Your great-grandparents would’ve thought that was science fiction. And honestly, for billions around the world, it still is.If you are literally and figuratively fortunate enough to enjoy such a dream as retirement, here are the most important retirement realities as I see them.💸 Retirement Reality #1: Your Biggest Expense Isn’t What You ThinkWhen I ask people to guess their largest retirement expense, I hear the usual suspects: housing, healthcare, maybe travel, or groceries. But nope. The winner — and it's not even close — is taxes.Yes, Uncle Sam (and sometimes Cousin State) will still want a piece of your pie. Social Security? Taxable at the federal level and in some states. IRAs and 401(k)s? You bet. Medicare surcharges? Yep, that’s a thing.But here’s the kicker: the folks who pay the least in taxes during retirement aren’t lucky. They’re prepared. They’ve been implementing smart tax strategies years — even decades — before they stop working. We’re talking Roth contributions, conversions, HSAs, pre-tax vehicles, cash balance plans — all the good stuff.And to do it right, you need a plan customized to your current and future tax situations. That’s exactly what we do for our clients — because the less you pay in taxes, the more you can spend on what actually matters: time, travel, and tacos with the grandkids.😱 Retirement Reality #2: Your Biggest Fear is MisplacedEveryone fears running out of money. But statistically, what they should be afraid of… is dying with too much.No joke — a study by the Investments and Wealth Institute found that 84% of retirees only spend the earnings from their portfolios. They never touch the principal. It's called the "decumulation paradox." They’ve got the money — they’re just afraid to use it.Why? Two big reasons:Lifelong savers have trouble flipping the switch to spending mode.The “just in case” fund: just in case the kids need help, or a health crisis hits, or Aunt Sally’s dementia story plays on repeat in your mind.But here's the thing — the real tragedy isn't running out of money. It's running out of time to enjoy it.Using the well-known 4% rule, retirees in over two-thirds of cases ended up with twice their original wealth, even after withdrawing every year.So yeah, have a plan. But make it one that helps you live now, not just preserve your balance sheet.As Mark Twain so beautifully put it:“Twenty years from now, you will be more disappointed by the things you didn’t do than by the ones you did.”🔧 Retirement Reality #3: Regret is More Common Than You ThinkIn a past episode (shoutout to episode 62!), more than 60% of retirees say they would do retirement differently if they had the chance.Why? Because too many people go into retirement with a “wing it” strategy. No structure, no vision, no plan.Every single regret we hear from retirees could have been avoided with proper planning. Don’t let that be your story.📉 Retirement Reality #4: The Real Risk Isn’t a Market CrashPeople fear stock market crashes like they’re retirement’s Grim Reaper. And yes, they can hurt, especially during the "danger zone," the 5 years before and after retirement.But here’s what’s worse: playing it too safe. Inflation is the silent killer. Cash, bonds, even real estate can’t keep up over the long haul — only stocks have historically done that.That’s why we use a time-based strategy:Money you’ll use in the next 1-5 years? Conservatively invested.6-10 years? Moderately.10+ years? Growth-oriented.The goal: protect your near-term needs and grow your long-term bucket. This structure helps our clients sleep better because they know their short-term money is safe, and their long-term money is working.🏖️ Retirement Reality #5: Your Most Expensive Years Are… SurprisingRetirement spending forms a smile: High in the early years (you’re healthy and adventurous), lower in the middle, and rising again in later years due to healthcare and long-term care.So don’t waste your early years! That’s when you’re most likely to enjoy travel, grandkid adventures, and the bucket list. Plan to maximize that window before Netflix becomes your best friend by default.🏥 Retirement Reality #6: Your Health = Your WealthWant to enjoy retirement? Prioritize your health. The best financial plan in the world won’t matter if you can’t move or hurt every time you try.Start now: 5-7 hours of exercise per week before retirement. Your future self will send you a thank-you note.🧠 Retirement Reality #7: Identity Crisis IncomingYou’ve had structure, colleagues, Zoom calls, purpose — then suddenly... you don’t.You gain 2,500 hours a year, and no idea what to do with them. For some, it’s bliss. For others, it’s a blindside.Work gives us identity. And when that’s gone, the void can be jarring. Add in shifting relationship dynamics (hello, 24/7 spouse time!) and surprise grandparent duties, and suddenly retirement looks less like a dream and more like a confusing second act.That’s why retirement planning has to go beyond money. Purpose, structure, and social connection matter just as much, if not more.🧾 Retirement Reality #8: Estate Planning is About More Than MoneyMost people think estate planning is about transferring money efficiently. But it’s way more about preserving your legacy, which is family unity. Because if you don’t think your family gets along great now, wait until you throw a bunch of money and real estate in the middle, and the fights will only get worse.An unclear or outdated estate plan can turn a loving family into a war zone. Don’t let decades of hard work — and beautiful memories — go up in flames because you didn’t have that conversation.The plan itself is important, yes. But how well you communicate it can make all the difference.✅ TIPS, TRICKS & STRATEGIES: 10 Things to Do When You’re 10 Years OutThese are straight from episode 53 — go there for the full breakdown — but here’s your 10-year checklist:Check your savings. Know where you stand.Boost contributions. It's crunch time.Review income sources. Social Security, pensions, and rentals. Learn the amounts and viability of each. Assess your debts. Pay down what you can. Low-rate mortgages are fine. Higher interest rate auto loans and especially credit card balances are not. Start a regular exercise routine. Future-you demands it.Review healthcare options pre-65. Especially if you’re retiring early (see episode 5 of this podcast!).Project your taxes. Mitigation starts now. Maybe it’s Roth contributions, Roth conversions, backdoor Roth contributions, pre-tax IRA contributions, cash balance plans, bunching charitable contributions every other year. There are so many ways to legally pay less in taxes.Evaluate your housing. Stay? Downsize? Move closer to family? Can your current house suit your needs when you are older? Is it a one-story or is your master bedroom on the first floor?Plan for long-term care. Earmark money for “just in case.” We make a legacy/long-term care fund for clients. If you need LTC, great, you have the money. If you don’t, your kids, grandkids, and charitable endeavors get a little more.Update your estate plan. Dust it off, review your POAs, and make sure it reflects your current wishes. Your uncle Rico may be your POA, and you may not want him making those decisions anymore. We help clients with all of this — and more. Because with better planning, you’ll have a better retirement life— not just in dollars, but in joy, time, and memories.

Welcome to episode 86 of the One for the Money podcast. In the late 1960s and early 70s, a famous psychological study was conducted that has since been called the Stanford Marshmallow test. The study was designed to explore the concept of delayed gratification. In this episode, I’ll share how life might be considered one giant marshmallow test.In the tips, tricks, and strategies portion, I will share a tip regarding how to not eat the entire marshmallow.In this episode...The Marshmallow Test [0:36]Delayed Gratification in Personal Finance [2:23]Investing Rewards Patience [10:01]Teaching Financial Discipline [10:46]In the late 1960s and early 70s, a psychologist named Walter Mischel at Stanford University conducted what has become a famous psychological study. The study was designed to explore the concept of delayed gratification — the ability to resist the temptation for an immediate reward in order to receive a larger reward a short time later.Here is how the Experiment was set up:600 preschool-aged children, roughly 4-6 years old, participated in the study. Each child was placed in a room with a marshmallow placed on a table. The researcher told the child that they could either eat the marshmallow immediately or wait 15 minutes without eating it. If they waited without eating the marshmallow, they would be rewarded with a second marshmallow.The researcher then left the room, leaving the child alone with the first marshmallow. The Key Findings as a result of this research were that Individuals had varied Self-Control: Some children immediately ate the marshmallow, while others were able to wait the full 15 minutes for the larger reward. Now you might be wondering what a 4-6-year-old eating a marshmallow has to do with personal finance? Well, that’s what was most remarkable about this study was what the follow-up studies revealed. The outcomes were very successful at Predicting Future Outcomes: Over the subsequent decades, Mischel and his colleagues followed up with many of the children who participated in the experiment, and the results were astounding:It found that the children who were able to wait for the second marshmallow, decades later, tended to have significantly better life outcomes in terms of higher SAT scores, lower rates of obesity, more likely to be financially stable as well as to have greater job satisfaction. The ability to delay gratification was a more accurate predictor of future success than their scores on an IQ test.Now it should be noted that while the Stanford Marshmallow Experiment became a widely discussed study about the power of self-control, later research showed that the environment in which a child grows up, including factors like trust in caregivers, socioeconomic status, and stability, can influence how well they are able to delay gratification. For instance, children in more unstable environments may have less reason to trust that the promised later reward will actually come. But suffice it to say, the Stanford Marshmallow Experiment remains one of the most influential studies in psychology, because it exposed the impact that self-control has on later life outcomes.I’ve read about this study numerous times over the years, but recently it has led me to this thought: is life really just one giant marshmallow test? Is delaying gratification part of the better planning one needs to implement to have a WAY better life?As I thought about this more, I came to the belief that generally speaking, life is one giant marshmallow test and that individuals can both learn and develop the skills so they too can have much better life outcomes. It also seems to me that businesses and politicians can hijack our desires for immediate gratification to their advantage.Individuals who can gain an understanding of the power of delayed gratification can have a much better life. Let me provide just a few examples of where this is the case:Credit cards are a tool for individuals to pay for goods or services and not having to carry around a bunch of cash. They are incredibly convenient. It’s remarkable how you can tap this piece of plastic on the machine and pay for things all around the world. You can use it to ride the tube in London, pay for some gelato in Rome, or buy some clothes in Bangkok. Credit cards can be a convenient way to pay for everything from groceries to travel. These can be decent tools provided you already have the money in the bank.But far too often, individuals use these to pay for things they can’t afford right now, essentially eating the marshmallow now.  Maybe they are a few weeks away from their next paycheck, so they use the credit card as a short-term loan.  But one unexpected expense later, and wa-la, you have recurring debt. Credit cards are an easy way for individuals to “eat their marshmallow now", but too often, CC users pay dearly for it later. This is evidenced by the tremendous revenue these credit card companies generate. In 2020, interest payments (which are made by people who couldn’t afford the original purchase) accounted for $76 billion, or 43% of all credit card company profits. Fees charged to stores that accept credit cards accounted for $51B or 29% of CC company profits. But some might think, ah, but jokes are on the credit card company because I’m getting air travel points, etc. Nope, the joke is still on the consumer as credit card companies are recycling our own money for a steep fee. As I just mentioned, 29% of their revenues ($51B) come from the fees they charge retailers to accept their credit cards. These fees are around 3-4% on every transaction. The businesses don’t pay these costs, but instead pass those fees along to the consumers by adding 3-4% to the price. So the credit card company indirectly charges an additional 3-4% on every purchase and generously gives credit card holders anywhere from 1-4% in return in the form of cash back or travel points, depending upon the category of the good or service purchased. Oftentimes, those travel points are not used or come with numerous restrictions. In fact, I recently purchased some marketing materials for my Better Planning Better Life business, and they included a 3% credit card processing fee charge on the invoice. I instead paid by electronic check to avoid the charge. It took some extra effort, but it saved me a few hundred dollars. I’ve also noticed a small sign by the cashier at the Greek restaurant near my office, which states that there will be a 3% charge for the use of credit cards. For individuals who use Credit cards the wrong way, they are not succeeding at the marshmallow test. The average balance on a CC in America is over $6700 as of the 3Q of 2024, and those between 44-59 have an average balance of over $9500.CC companies hijack consumers' reward centers by enabling them to eat the marshmallow now.In the news recently, there was another example of how businesses make money by helping people eat the marshmallow. This isn’t via a credit card but through a microloan.  There is an online lending company called Klarna, and they recently partnered with DoorDash to finance people’s takeout meals. This way, you could literally eat the marshmallow. Talk about your signs of the financial apocalypse. If we are at the point where people are financing their DoorDash, we are in for trouble.  Automobiles are another prominent way where many individuals fail the marshmallow test and eat it now. In episode 85 of this podcast, I share how data shows that over 80% of new car purchases in 2024 were financed, and the average monthly car payment is $742 for new cars and $525 for used ones. Too often with automobiles, we eat the marshmallow. We falsely believe that because we can qualify for a loan that we can afford a car. For some individuals, it can make them feel good initially that they can “afford” such a nice car. But if you aren’t paying cash, then you really can’t, but there are plenty of banks and car companies that would be happy to finance the belief that you can. As I shared in episode 85, Americans aren’t becoming automatic millionaires... because they’re spending too much money on automobiles. Because they want the new car (ie, marshmallow) now, they are spending tens of thousands of dollars on vehicles and not saving this money instead. Credit cards and auto loans are too often used to essentially rent a lifestyle we cannot actually afford. If you can’t pay cash, you can’t actually afford it.There are positive aspects to the marshmallow test. Investing is a great form of the marshmallow test. For those who can wait, the rewards are nothing short of astounding. The incredible power of compound interest requires an extended period of delayed gratification, but given the magical ingredient of time, miraculous things can happen. For example, if you made a one-time investment of $10,000 and it grew at a rate of 10% per year for 4o years, it will have grown to over $ 452k. And if you invested $10,000 each year for 40 years, your $400k total investment would grow to over $4.8M. That’s the power of waiting for the additional marshmallow.Now, does that mean we should just delay gratification in every aspect of our lives for as long as possible? Certainly not. In many episodes of this podcast, I’ve shared the importance of spending one's money on experiences throughout their lifetime.  The problem is that far too many spend other people's money on those experiences, namely the credit card or auto financing companies, and consequently, pay more for that...

Welcome to Episode 85 of the One for the Money podcast! Some of you may remember that best-selling book The Automatic Millionaire. It told readers how to easily become a millionaire with a few simple steps. But in this episode, I’ll reveal the sad truth: too many people aren’t becoming automatic millionaires because they’re spending too much money on automobiles. Yes, cars and trucks are putting the brakes on a better future for many Americans. I'll also share the massive benefit of driving one’s car until the wheels come off.In the tips, tricks, and strategies section, I’ll share some car-buying tips.In this episode...Automating Savings [1:23]The Financial Impact of Car Ownership [2:04]When Is It Ok to Buy a Nice Car? [6:35]The Automatic Millionaire, written by David Bach, became an international bestseller because it gave us that magical formula for becoming a millionaire. Bach’s magic trick? Automating your savings and spending. He basically tells you to set it and forget it. You set up automatic contributions to your 401k or IRA, and it’s that easy to be on the road to riches. He even argues that you don’t need to be making a six-figure income to become a millionaire—you just need to make sure your savings and spendings are adjusted on autopilot and viola, decades later you reap the rewards.And yet, despite this brilliant advice, millions of people are still missing the automatic millionaire bus, and they’re doing it by throwing too much of their money at automobiles. While an automobile is designed to take you places, far too often, it takes owners to a future that is much poorer and less fulfilling than it otherwise could be.Now, you might ask, is car ownership really that impactful? Let’s look at the numbers from 2024:Americans owe around $1.655 trillion in auto loan debt. That’s right, trillion with a T.Over 80% of new car purchases in 2024 are financed, and the average car payment is $742 for new cars and $525 for used ones. (That’s a lot of money that could be used to build wealth instead.)Now, why is this a problem? I mean, cars are cool, right? But here's the thing—unless you’re driving a classic car like a 23-window VW van (I can dream), cars lose value. In fact, a new car drops thousands of dollars in value as soon as you drive it off the lot. So, people are paying $525-$747 a month for years... for something that’s losing value fast. In fact, over 30% of people with car loans have negative equity, meaning their car is worth less than what they owe. Here is something even scarier: When a car is damaged, such as in a natural disaster, insurance will either pay to repair a car’s damage or give the driver a lump sum equal to the value of the car. When the damage is severe, insurers usually choose the lump sum. That means if your car with negative equity is totaled. You will be out of a car and still have money you owe on it. Even when the damage isn’t severe, it can still pose a huge financial challenge. An Oct 2024 article from the WSJ featured a 34-year-old gentleman who had noticed the main display screen on his new vehicle would often disappear. The car’s backup camera didn’t always work, and the car would make a screeching noise when in reverse. He decided to bring the car into a local dealership, hoping to trade it in. Only to have the dealership tell him it was worth roughly $24,000, which was just under half of the roughly $50,000 he still owed on his loan. Now, I should confess that I drive a 15-year-old Toyota Prius that I had purchased used. It’s been a great car, and I hope it will continue to be for years to come. My wife’s car is 7 years old, and it replaced her 16-year-old car at the time. However, I must also confess that like many others, I have also made a huge mistake when purchasing a vehicle. So I have been on both sides of the Automobile purchase decision. I’ve made both good decisions and bad. Here are the details about my poor choice. A few years after graduating high school, my twin brother and I purchased a used Jeep Wrangler. It had far superior features than a new Jeep model we were also looking at. The used vehicle had a lift, hard top, and much better rims and tires. It looked so much better than the new Jeep with its rag top, smaller rims and wheels. We were excited about the purchase of this cool-looking vehicle, but sadly, that excitement lasted for less than 24 hours when it broke down. The Jeep couldn’t drive and so we thought we would be fine since we also had purchased drive train insurance. Instead, we were told by the dealership that insurance didn’t cover this particular issue. We continued to have numerous and expensive problems with the Jeep that the “drive train insurance” didn’t cover. Finally, when our speedometer stopped working, the dealership was quick to offer to fix it. We were relieved that finally, this insurance covered something. Only later did we learned why: because a broken speedometer was evidence that the Jeep's odometer, which measures the mileage driven, had been tampered with and that the Jeep had tens of thousands of more miles on it than advertised. We were told by a friend of the previous owner that he had unhooked the odometer so he wouldn’t rack up tens of thousands of miles to preserve the value of the Jeep.The moral of the story? You can lose a fortune over the years buying cars you cannot afford. Does that mean buying nice cars is wrong? Absolutely not, provided you have all the other things in place first (emergency fund, on track for retirement, etc). I am personally enamored with classic cars. They made them with so much more style back then. In fact, every Spring, the City of Seal Beach hosts a classic are show, and my family and I enjoy going to it every year. There are some proud owners of these vehicles. Some inherited them, others rescued them from old barns, and others bought them. It’s really cool to see the cars parked from my office window. But collector cars are different than daily drivers. Classic cars can be a viable investment, provided you have everything else in place, such as life insurance, your emergency fund, no high interest debt, you are on track for retirement, and you can pay cash for the vehicle.But interestingly, most wealthy people don’t drive fancy cars as their daily drivers. While some wealthy Americans drive luxury vehicles, an Experian Automotive study found that a whopping 61% of households making more than $250,000 don’t drive luxury brands. Instead, they drive less showy cars, like Hondas, Toyotas, and Fords.Dave Ramsey noted that most millionaires don’t drive flashy cars.While an automobile is designed to take you places, far too often, it takes owners to a future that is much poorer and less fulfilling than it otherwise could be. But if you plan to drive an old and not so flashy car, your life could be much wealthier and better because of it.TIPS, TRICKS, AND STRATEGIESWelcome to the tips, tricks, and strategies portion of the podcast, where I will share some tips regarding buying a vehicle.The best thing one can do before buying a vehicle is to develop a plan. You need to determine what you can afford, the type of car or truck that meets your needs, and do a lot of online research regarding prices and features. You need to have a firm number on how much you can afford. Without a plan, it is far too easy to walk out of a dealership with the keys to a much more expensive car than you can afford. In fact it is far better to buy a used vehicle and pay for it entirely with cash. If you can’t pay cash, then that may be your first clue that you are very likely looking at a car that is too expensive. It can make sense to buy a used car at the dealership as there can be risks with purchasing a vehicle privately, but there are likely added expenses with buying a used car at a dealership as well. There can be a case for buying a new vehicle if you own a business. Normally, you can write off the purchase of a work vehicle over a few years, but using Section 179 of the Internal Revenue tax code, you can fully depreciate a vehicle in a single tax year, provided it weighs over 6000 lbs. This can save the business owner a lot on taxes. In fact, I knew a business owner who had the option to pay taxes or purchase a Porsche Cayenne. As a business owner, I would choose the latter as well. But for most Americans, they will purchase a vehicle that won’t provide a tax deduction.A nice car can be very exciting for a little while, but these have eroded far too much wealth for Americans who automated their way to not becoming a millionaire by purchasing vehicles they could not afford. I know it's not the most exciting thing to buy a used car but the best things one should do rarely are. Well, I hope you found these helpful, and until next time, remember a better life is a result of better planning, and that must include better car buying. Have a great one!ReferencesThe Cost of Car Ownership Is Getting Painful - WSJDave Ramsey: Here Are the 10 Cars Millionaires Drive These DaysThe New Math of Driving Your Car Till the...

Welcome to episode 84 of the One for the Money podcast. This episode airs on April 15 which means it’s the tax filing deadline. Now no one likes paying more taxes than they have to, and a great way to accomplish this is by using a Roth Retirement account. In this episode, I’ll share how everyone can have a Roth. In the tips, tricks, and strategies portion, I will share a tip on how for the same amount of money it may make more sense to complete a Roth conversion than a Roth contribution.In this episode...What is a Roth Retirement Account? [1:56]Direct Roth IRA Contributions [2:46]Roth 401ks, SIMPLE IRAs, and SEP IRAs [3:44]Roth Conversions [7:36]Backdoor Roth IRAs & Pro-Rata Rule [8:36]I remember years ago a coworker of mine shared with me that she and her husband hoped that their income would one day be high enough that they would no longer be eligible to contribute to a Roth IRA. It’s true, that certain individuals, can make too much income to contribute to a Roth IRA. But in this episode, I will share how everyone, regardless of their income level can contribute to a Roth IRA or put differently, how everyone can Roth this way. Okay, that was pretty bad but I had to try. But first, it would be helpful to provide a brief explanation of what exactly a Roth retirement account is and how they came about. A Roth retirement account is merely a retirement account on which you invest monies on which you already paid taxes. Because you are contributing money after it’s been taxed all of the growth and all of the distributions are 100% tax-free (provided you follow the required distribution rules; age 59.5, etc). These are a fantastic way for individuals to build a tax-free bucket of money that they can utilize in retirement that won't have any taxable implications.Roth IRA Contributions The first way to contribute to a Roth IRA is to make direct Roth IRA contributions. For the 2025 tax year, individuals who earn less than $150,000 or married couples who earn less than $236,000 can contribute directly to a Roth IRA. For those under 50, they can contribute $7000 and for those 50 and older they can contribute $8000. Roth IRAs are a fantastic way to build a tax-free bucket of money for retirement. I set these up for my wife and me early in our marriage and I’m so glad I did. These can be especially great for kids as well. I call them Kid Roths and I’ve set these up for our three boys. That way they can benefit from decades of compound growth. If you are early in your career it can be a great time to invest in a Roth IRA.Roth 401ks/Simple IRAs and SEP IRAsRoth 401ks/Simple IRAs and SEP IRAs are another great way for anyone regardless of income level to contribute to a Roth investment account. For whatever reason, Roth 401ks, Simple IRAs, and SEP IRAs have no income limits like Roth IRAs do. So regardless of one's income, they can contribute to a Roth 401k. Roth 401ks are great for lower earners as they can allow you to put away even more money on a tax-free forever basis. Individuals can put up to $23,500 in 2025 and for those 50 and older they can put away an extra $30,500. Oddly enough, for those specifically between the ages of 60-63 they can put away $34,750. Why especially those ages, not sure, you’ll have to ask Congress.Roth Simple IRAs have lower contribution limits namely $16,000 for those under 50 and $19,500 for those 50 and older. Roth SEP IRA limits are based on a percentage of one's income. These all are great vehicles where individuals can put a lot more money away on a tax-free forever basis. These can make a lot of sense for individuals in their lower-income years such as those early in their career or for those that are late in their career when they are working part-time prior to retirement. However, these can also make a lot of sense for much higher earners who also happen to have very large pre-tax retirement account balances. As I explained in episode 82 the reason why high earners with large pre-tax retirement accounts should consider stopping contributions to these accounts is because they will be forced to take out huge sums when they reach 75 via required minimum distributions. You haven’t paid taxes on these funds yet and the IRS finally wants to get their slice.For example, if at age 60 you had a balance of ~$2 million in your pre-tax retirement account, at a modest 7%/annual rate of return it will be $5.5M at age 75. You will then be forced to take out $223,000 at age 80 it will be $316,000 and at 85, it will be $418,000.And it's not just extra income tax you will pay. With all the extra income you’ll have to pay a lot more in Medicare Part B premiums which are based on income. It could be as high as $591/month vs the lowest premium of $185/month (and those are 2025 numbers).And if you think you can leave this problem for your kids, they’ll have even more tax problems they will now as they will have just 10 years to withdraw 100% of the funds which will occur during some of the highest earning years.  You’ve got to hand it to Congress, it is an incredibly stealthy way to raise tax revenue by making the inheritors pay the taxes. Because who feels sorry for beneficiaries inheriting money and having to pay more taxes. But with proper planning, more of that money can be spent by the actual beneficiaries and not by the government.Another way to contribute to a Roth IRA is via a Roth Conversion which has been around since 2010, that was the year the income limit for Roth IRA conversions was removed entirely. This allowed individuals with higher incomes to convert their traditional IRAs into Roth IRAs, thus opening the doors for many wealthy individuals to take advantage of the tax-free growth. There are no income limits for Roth IRA conversions, so regardless of your income, you can convert any amount from a Traditional IRA into a Roth IRA. However, the converted amount will be subject to taxes. I complete these for many of my clients in the early years of their retirement. Consequently, we are able to save them hundreds of thousands and in some cases millions of dollars in taxes they would have paid had they let things go without the conversions. For more details on Roth Conversions, see episode 49 of this podcast.The final way to get money into a Roth is via the backdoor. It is literally called a Backdoor Roth IRA. This is a strategy used by high-income earners to get around the income limits for contributing directly to a Roth IRA. This method also takes advantage of the ability to convert a Traditional IRA into a Roth IRA.Here’s how the Backdoor Roth IRA works, step by step:The first step is to contribute to a Traditional IRA. Unlike Roth IRAs, Traditional IRAs do not have income limits for contributions. However, the contribution might not be deductible if the individual is covered by a workplace retirement plan and their income exceeds certain thresholds.Even if the contribution is non-deductible, meaning no tax break is received on the contribution, it is still allowed. The individual can contribute up to the annual limit (e.g., $7000 in 2025, or $8000 for those 50 and older)Once the money is in the Traditional IRA, the next step is to convert those funds into a Roth IRA. This is where the "backdoor" part of the strategy comes into play.Many people perform the conversion shortly after the contribution to minimize the amount of earnings that would be subject to tax. This is particularly helpful if the Traditional IRA has little to no growth.But there are a few important caveats to Keep in Mind when it comes to backdoor Roth contributions. These are subject to the Pro-rata Rule: When you convert money from a Traditional IRA (or other tax-deferred account like a 401(k) if applicable) to a Roth IRA, you must pay taxes on any pre-tax contributions or earnings you convert. The pro rata rule comes into play if your Traditional IRA contains both pre-tax (tax-deductible) and after-tax (non-deductible) contributions.The pro rata rule essentially requires you to treat the pre-tax and after-tax portions of your account as a combined pool when you do a Roth conversion. You cannot pick and choose which portion of your IRA to convert; it will be a blend of pre-tax and after-tax money, based on the proportion of each type of contribution in your account.This can be avoided by rolling over any pre-tax IRA money into an employer-sponsored retirement plan (like a 401(k)) before making the Backdoor Roth conversion. Lots to consider so I would speak with an experienced Certified financial planner about these. Now If you think these are impressive ways to get a Roth wait until you hear what the legendary investor Peter Thiel accomplished with a Roth. He started his Roth IRA with just a few thousand dollars. He then invested these funds into buying pre-IPO stock opportunities in FB and PayPal. He bought these shares for a fraction of a penny and as a result, he has a completely tax-free Roth IRA with a balance of over $5 Billion, with a capital “B”. That’s like having 5000 Roth IRA accounts each with 1 million dollars.Roths are an incredibly powerful tax-saving strategy that everyone, regardless of income can create for themselves. I strongly encourage you to speak with a certified financial planner, who can help you consider your options. We’d be happy to assist you. TIPS, TRICKS AND STRATEGIESWelcome to the tips, tricks, and strategies portion of...

Welcome to episode 83 of the One for the Money podcast. This episode airs in April, which means we are in the final days of tax season. I’ve never met anyone who likes paying more taxes than they have to, and in this episode, I’ll share how you can utilize the standard or itemized deductions so you don’t have to pay them. Hence the title of this episode, not your standard tax savings strategy. In the tips, tricks, and strategies portion, I will share a tip regarding how paying it forward can save you on taxes. In this episode...Standard vs. Itemized Deductions [2:15]Tax Planning Strategies for Deductions [7:04]Benefits of Donating Stock vs. Cash [9:17]Importance of Tax Planning in Financial Strategy [11:32]MAINOne of the best financial planning quotes I’ve read is this “In America, there are two tax systems; one for the informed and one for the uninformed. Both are legal.”How true that is. But the challenge with being “informed” about taxes is that Taxes are incredibly complex. Just the federal tax code alone is over 6700 written pages, and the US treasury’s interpretations of the tax code, because it isn’t sufficiently clear, are tens of thousands of pages more. For these reasons and others, many individuals ignore the tax laws altogether and consequently pay more taxes than required. However, with a little bit of better tax planning, you can have a better life because you will pay less in taxes and have more money to spend on great experiences.A particular area that many taxpayers don’t understand is the deductions everyone receives on their income. Deductions are the amount of your income that is not taxed at all. Taxpayers will take one of two forms of these deductions, which are known as either the standard deduction or itemized deduction. The standard deduction is a default amount of income that you would pay no taxes on. The itemized deductions are for those individuals who have certain key items (such as medical expenses, mortgage interest, gifts to charity, and state and local taxes) that would provide a higher amount of their income that is not subject to tax.Just what are the amounts not subject to tax, well in 2025 the standard deduction for an individual is $15,000, and for a married couple it is just double that or $30,000. A reminder, what that means is on the first $15,000 of income an individual pays 0% in taxes. So if a person has $65,000 of income in 2025, they would only have to pay Federal taxes on $50,000 because the first $15,000 of their $65000 salary is not taxed. I should note that the standard deduction wasn’t always this high, but back in 2019 when the Tax Cuts and Jobs Act was passed, it doubled the standard deduction from what it was previously. Before this doubling of the standard deduction, just over two-thirds of taxpayers took the standard deduction and just under one-third itemized deductions, but now with the increase of the standard deductions, over 90% of taxpayers claim the standard deduction with just around 9% taking itemized deductions. That’s a good thing for most tax payers as lower earners had more of their income not subject to tax.Just what are these itemized deductions? Itemized deductions are when individuals have items on which they spent their income, that in total, were higher than the standard deduction. Itemized deductions are captured on Schedule A of the tax forms. There are primarily four items. The first is Medical expenses, the second is mortgage interest on your primary and secondary residence, the third is state and local taxes, and the fourth is charitable contributions.  For medical expenses, it is only for those that are above 7.5% of your AGI. So if your adjusted gross income was $100,000, you would include with your itemized deductions any medical expenses that were more than $7500 for that tax year. So if you had $10,000 worth of medical expenses, you would include $2500 in your itemized deductions.The next item included is interest on your primary or secondary mortgages. If your interest paid was $5000, then that would be added to your itemized total. The next item you include is the state and local taxes paid. This includes state income taxes as well as property taxes. For individuals in high-income tax states like California or NY, this would seem like a benefit, but the Tax Cuts and Jobs Act limited the amount you could itemize to just $10,000. So if you paid $20,000 in state and local taxes (which includes property taxes) you only get credit for $10,000. The final item you would include with your itemized deductions is charitable contributions. These are cash or other donations (donating your car for example) that are made to any non-profit organization such as the American Red Cross, the Salvation Army, or even your church. If you gave $10,000 to the American Red Cross, then that would be added to your itemized deduction amount. Now, if the total of your itemized deductions is more than the standard deduction you would have more of your income not subject to taxes. Let me share an example for clarity. Let’s say an individual paid $5000 in mortgage interest, another $6000 in State and Local taxes, and gave another $5000 to charity. Their total of itemized deductions is $16,000. Now this person could elect to take the itemized deduction of $16,000 or the standard deduction of $15,000, which is the default that everyone gets. Of course, the person will elect to take the itemized deduction because it’s $1000 higher, and therefore $1,000 more of their income would not be taxable.Here is where better tax planning can come in and help save an individual from paying even more on taxes. One such better tax planning strategy is to plan so that a person’s itemized deductions are even higher. An example would be when you would combine your charitable contributions from multiple years into a single tax year. This would then increase your tax savings. Let me provide an example for clarity. The example I previously shared was of an individual who paid $5000 in mortgage interest, another $6000 in State and Local taxes, and another $5000 to charity. That raised their itemized deductions to $16,000 which is higher than the standard deduction of $15,000. Now if this individual planned to contribute $5000 every year to charity, what if instead of giving $5000 in two consecutive years he gave $10,000 in the first year and $0 in the second? In the year that he gave $10,000 to charity, his itemized deduction would rise to $21,000 instead of $16,000. That’s an extra $5000 not subject to tax. Then in the following year, his itemized deductions would only total $11,000, $5000 for the mortgage interest, and $6000 for SALT. Because this would only add up to $11,000, he would take the standard deduction instead and have $15,000 not taxed. Over the two years combined, he contributed the same amount to charity, he also paid the same amount in property taxes, and he paid the same amount in mortgage interest, but overall he paid less in taxes because he made adjustments so $9000 was not subject to tax. Now of course this was a hypothetical example. The amount of mortgage interest usually decreases each year and the standard deduction amount is adjusted each year for inflation, but you can get the general idea of how bunching charitable contributions in a single year can save you a lot in taxes over both years. This is a great example where those who are informed can pay less taxes than those who are uninformed. Staying with Charitable contributions can make a significant difference for individuals and couples to save on taxes. Now we don’t give to charity to save on taxes, but instead, we give to causes or organizations we believe in. Because we are giving that money to another cause or organization, we don’t have to pay taxes on that portion of our income. But for individuals or couples that own stock there are much better ways to give to charity that can greatly benefit both you and the charity you are donating to. The single worst way to give to charity is to sell stocks and give the proceeds to the charity. You would have to pay taxes on any gains and the charity would receive the proceeds less the taxes paid. The better way to donate to charity is by directly transferring stock from your non-retirement account to a charity. This way you don’t have to sell the stock. The charity receives the stock and then they can sell it and won’t pay any taxes since they are a non-profit organization. The individual donating gets a larger contribution for their itemized deductions and the charity will receive more in the process. But here is another way that an individual can benefit from contributing highly appreciated stock to a charitable organization. Let’s say this individual bought stock in XYZ company for $5,000 and it has grown to over $25,000. Let’s say this individual also plans to give $25,000 to charity this year as well. But he doesn’t want to sell his XYZ stock because he still thinks it has more room to grow. A great option for this individual would be to donate the $25,000 in stock to the charity or charities of their choice and then use $25,000 to purchase stock of company XYZ. He still owns $25,000 of stock in XYZ company, but he doesn’t owe any taxes on this stock at present because it's equal to the amount he paid. The stock he donated to charity had a $20,000 gain and by donating the stock, he eliminated any capital gains on his original purchase of XYZ stock. He has the same amount of stock, but no longer has a tax problem. I share again the quote I shared at the beginning of this episode “In America, there are two tax systems; one for the informed and one for...

Welcome to episode 82 of the One for the Money podcast. This episode airs in March which means we are in the midst of tax season and there are numerous ways to reduce taxes. One of those ways is to make pre-tax contributions to your 401k or IRA. You don’t pay taxes now but will pay taxes later in retirement when you withdraw these funds. But in this episode, I’ll share a perspective that argues that certain high earners should halt pre-tax 401k and IRA contributions.In the tips, tricks, and strategies portion, I will share tax savings tips utilizing a trust.In this episode...401(k) Contribution & Tax Efficiency [1:20]Higher Earners & Pre-Tax Contributions [2:47]Beneficiary Impact [6:59]Tax Mitigation Strategies [9:09]In the episode before this one, I shared that saving in a 401k is a great way to ensure you have sufficient income in retirement and a 401k can allow you to do it in an incredibly tax-efficient manner. With a traditional 401k or IRA, you can contribute funds on a pre-tax basis, this is also known as a traditional 401k or IRA.  This will lower your taxable income for the year of the contributions. You will pay taxes later when you take distributions from the account in retirement.And recently Congress passed legislation to help certain individuals save even more.  Those are individuals that are between the ages of 60-63 who can now contribute an additional $3750 to their 401k accounts. For those under 50 they can put away in a 401k up to $23,500, and those between 50-59 and 64 and older put away up to $31,000 but retirees between ages 60-63 will be able to contribute up to $34,750 in 2025. Why those specific ages, 60-63, and not 65 or 67, well you’d have to ask Congress. While this may seem like something one should take advantage of, Ed Slott, a well-recognized tax and retirement expert has argued that certain higher earners should stop funding pre-tax 401ks and IRAS altogether. Now Ed Slott is a certified public accountant and is a nationally recognized IRA and retirement planning distribution expert, best-selling author, professional speaker, and television personality. So he’s no crackpot. He has even hosted several public television programs, including his latest, Retire Safe & Secure! with Ed Slott which was featured on PBS.But the key is understanding the specific people that Ed Slott argues should stop contributing to their pre-tax IRAs and 401ks.  Specifically, it is for people who have very large pre-tax 401k and/or IRA balances that should stop because the income forced out of these plans in retirement, via required minimum distributions, will result in them possibly being in even higher tax brackets than they are now.This highlights an issue that I see countless times in my own financial planning practice which is that far too often tax saving strategies can be very short-sighted. The focus often is on how to get a larger refund in the current year and not considering the ticking tax time bombs that we may be setting ourselves up for in the future. The absolute best tax mitigation strategies consider both short-term and long-term implications when it comes to lowering your lifetime tax bill.The reason why high earners with large 401ks and IRAs should consider stopping funding is that when they reach the required minimum distribution age, they may have to take some significantly high distributions. People would be amazed by how many of the retirees I work with don’t want these distributions. And my financial practice isn’t alone. There are a number of advisors who work with individuals who don’t want the funds from their IRAs.I’ll share a hypothetical example to give you an idea. Let’s say you have a large pre-tax retirement account at age 60 with a balance of ~$2 million and it grows at a relatively modest 7% until age 75 which is the age your required minimum distributions begin. At that point, your balance would be just over $5.5M. At 75 your required minimum distributions which are based on life expectancy tables show that such a person would have to take out $223,000 in the year they turn 75 and each year they will have to take out a higher percentage. At age 80, even with taking distribution each year prior, a person would be forced to take out $316,000, and at 85, they will be required to take out $418,000. I don’t know many 85-year-olds who need $418k to spend. If you think these higher income taxes are bad, it gets worse because these higher incomes will also result in you having to pay much higher Part B premiums for Medicare as they are based upon the AGI from your tax return from two years prior. In 2025 a $400k income would result in a monthly premium of $591/month vs the lowest premium of $185/month. That’s a steep difference.This is why high-earners with large pre-tax 401ks and IRAs should consider not funding these or funding Roth 401ks instead. I mention 401k only because there are no income limits on contributions to a Roth 401k like there are with Roth IRAs.If you think that is challenging, wait until you hear about the impact on the children who inherit retirement accounts. I’ve had clients share with me that they won’t need the pre-tax IRAs or 401ks that they are funding and they plan to leave these to their kids. While that may sound like a great plan, especially for the kids, it’s a strategy that could lead to you and your beneficiaries paying a lot more in taxes. Maybe you are asking, just how would you and your beneficiaries pay more in taxes. As I mentioned, you’ll have to take RMDs from 75 until you pass away.  But your beneficiaries will have to take out all of the money in a much more accelerated time frame. The SECURE Act that was passed a few years back dramatically changed the distribution rules for beneficiaries. Prior to the Secure Act, non-spousal beneficiaries, children, for example, could distribute their inherited IRAs over their entire lifetimes. I have several clients doing just that right now. But for any non-spouse, ie child, that inherits an IRA after Jan 1, 2020, they will now have just 10 years to withdraw 100%of  the funds. The shorter the window, the larger the required withdrawals—and the higher the resulting tax bracket. I have several other clients that are now subject to this new rule. So imagine those who plan to leave their large IRAs to their children. That means the children will have just 10 years to take out the funds, and most likely these distributions will occur when the beneficiaries are in their late 40s 50s, or even early 60s which is often some of the highest earning years. That means, that while you are earning the most money in your career, you are required to take large amounts out of your beneficiary IRAs as well. You’ve got to hand it to Congress, it is an incredibly stealthy way to raise tax revenue by making the inheritors pay the taxes. Because who feels sorry for beneficiaries inheriting money and having to pay more taxes? But with proper planning, more of that money can be spent by the actual beneficiaries and not by the government. So what’s a person to do to plan better to avoid such a situation? Well, there are a host of strategies one can consider.The first is to max fund the Roth 401k. You will pay taxes now but you will do so at historically low tax rates. It is likely these tax rates will move higher because we also have a historically high Federal deficit. Both can’t continue. Now with an inherited Roth IRA, your children will still have to take the money out within 10 years, but none of it would be taxable. The second best option is similar to the first. But instead of contributing to a Roth 401k, you can complete Roth conversions of your traditional retirement accounts.Roth conversions work just as they sound, you convert portions of your not-yet-taxed retirement accounts to never again taxed Roth accounts. There are no income limitations but since you will be paying income taxes in the year of the conversion it makes the most sense to complete Roth conversions in the years when your income is lower. For example, if you work part-time in the years prior to retirement that is a great time. Another fantastic time to consider Roth conversions is during the years just after you retire and before you have to take RMDs. You will want to have savings in the bank to live on, to make this possible but during those years you could have really low income which would be ideal to begin some Roth Conversions.I do these for many of my clients. Using my tax return analysis software coupled with my financial planning software I determine what their income is now and what it will likely be in the years to come. This will include income from social security, pensions, rental properties, etc. From that, I determine what their tax rates will be both now and in the future and we convert amounts up to a pre-determined tax bracket.There are a lot of factors to consider so I would refer you to episode 49 for more details. The third best option is to put the money instead in a high-yield savings account so you can build up an account that you can live on during the first few years of retirement that will allow you to have low income and complete even more Roth conversions.The fourth best option is to fund a non-retirement account. This is a great way to build a taxable account that has some advantages over a retirement account. For one they don’t have RMDs, and two there is a step-up in basis when the owner passes so all the account passes to the beneficiaries tax-free. A fifth option is Life insurance: Taxpayers age 59½ or older could use the net proceeds from pretax retirement account withdrawals to purchase...

Welcome to episode 81 of the One for the Money podcast. I am always glad and grateful you have taken the time to listen. There are a host of options when it comes to investing and there is an order of priority in which these should occur. In this episode, I’ll share my thoughts on that order. In the tips, tricks, and strategies portion, I will share a tip regarding 401k contributions for those nearing retirement.In this episode...Cash Flow Management [1:58]Emergency Fund [4:17]Contributing up to Company Match  [5:51]Paying Down High-Interest Debt [6:20]Funding an HSA [7:50]Saving Further into a 401(k)/IRA [9:03]Extra Savings [10:12]I recently re-read the classic book, The Richest Man in Babylon. It’s a great story on how simple steps can help one build wealth, even those who are mired in debt. The truths contained therein are conveyed so well through the story that I’m having my oldest two boys read the book.  In the book The Richest Man in Babylon, its emphasis was more on savings than investing. Presently there are almost countless ways one can invest. For that reason and others the investment world can be overwhelming and as a result, many choose not to participate. And that is literally and figuratively unfortunate as far too many fail to make small changes that over time have massive results. This episode is meant to help demystify which investments one should select and in what order. But of course, before we can even think of investing we need to ensure we are monitoring our cash flow. That is the money coming in and the money going out. Some call that a spending plan others call it a budget. I’ll go with the former as it seems more palatable and less restrictive than a budget.The general rule of thumb when it comes to spending plans is pretty straightforward. One should allocate ~20% of your spending plan to your savings. Those savings can include an emergency fund as well as your retirement and non-retirement savings vehicles. I mention savings first as you should always get in the habit of paying yourself first. It’s an absolute game-changer. As Warren Buffett said so well, Do not save what is left after spending but spend what is left after saving.Approximately ~50% of one’s budget should be spent on their needs. This would include housing (be it a mortgage or rent), groceries, electricity, transportation, etc. Finally, ~30% of your budget should be allocated to your wants such as a gym membership, eating out at restaurants, travel, etc. However, this should only be the case if all one’s higher interest-rate debt is paid off. I would define higher-interest debt as over 6% which is not your mortgage.  Now some might argue that one’s health is paramount and that you should devote money to gym memberships, etc.  I agree that one’s health is critical as I recently shared in episode 78 how the first wealth is health, but one can work out without the need of a gym. Additionally, one can eat without the need to go to a restaurant. For those reasons, these are considered “wants instead of their needs” expenditures. Now that I’ve set a framework regarding cash flow planning the next step is to consider what should be the order of where one puts their money. This may seem similar to the baby steps that Dave Ramsey has made famous. I will share a few key differences between those steps. Dave’s Ramsey’s Baby Steps are great as a general rule and the impact he has had on thousands upon thousands of Americans is nothing short of remarkable so I’m in no way trying to belittle his steps. The first step, which I will call 1a, which is similar to Dave Ramseys, is building up an emergency fund.  As JP Morgan notes in its Guide to Retirement - Life is uncertain –spending shocks and/or job losses can happen at any time. Emergency savings can help pay for these uncertainties and keep retirement savings intact.The resource also notes that Workers typically encounter spending shocks more frequently (about once every three months) than income shocks (about once a year) and that one should consider setting aside 2-3 months of pay. If your spouse isn’t working you will want to increase that to 4-6 months of pay as you only have one income to rely on. It’s much like a single-engine vs twin-engine plane. If the engine goes out on a single-engine plane, drastic action needs to take place, but if one engine goes out on a twin-engine plane, you have a few more options. The same goes with households with 1 income vs 2 incomes. Those with 2 incomes can have fewer funds allocated to an emergency fund.JP Morgan also notes that Retirees encounter more spending shocks in larger amounts than workers, likely due to unpredictable costs such as health care, and that retirees should consider setting aside 3-6 months of income.  The next step I would call step 1b, which is contributing to your company retirement plan up to the company match. For instance, if your employer matches 4% of your contributions to your retirement plan, you should contribute up to the company match as that is a risk-free and simple way to double the money going into your retirement account. This should happen simultaneously while you are building your emergency fund. Hence I call these steps 1a and 1b. Step 2 is building up a more significant emergency fund. Now this is where my advice and Dave Ramsey’s advice will differ. He advocates building a $1000 emergency fund and then paying off any high-interest debt before you contribute money to receive the company match. His reasons are all about maintaining momentum in getting debt-free, but given that a company match is free money that doubles your contributions, I don’t think one should pass it up. Now, if you have higher-interest debt to pay off you shouldn’t contribute beyond what the company will match. Most companies match in the 3-4% range, although I have seen some contribute in the 10% which is remarkable. I also generally recommend that people build up a slightly larger emergency fund initially than a $1000 starter fund before starting to pay off higher-interest debt. That way a larger emergency fund could cover 2 to 3 months worth of expenses. Building up a slightly large fund is a great way for people to strengthen their savings muscle and as their savings continue they can in turn use portions of this emergency fund to help pay down higher-interest debt. The challenge of having a small, $1000, emergency fund is that it doesn’t provide much of an emergency cushion, especially in 2025, and if there is a job loss. Step 3 I’d recommend is paying off higher interest rate debt. This would be debt that has an interest rate above 7% that is not mortgage-related. Step 4  would be contributing to a Health Savings Account before contributing further to a 401k or individual retirement account like an IRA. The HSA has many more advantages than a traditional retirement account. I have spoken on these in many episodes.  These are the only investment vehicles that are triple tax-free. Yes triple!  The contributions are tax-deductible, and both the growth, and distributions (if used for a qualifying medical expense) are tax-free and so with HSAs, you pay $0 taxes. However, not all people are eligible to invest in an HSA.  You must have a qualifying high-deductible medical plan.  Additionally, the contributions are limited to the following amounts in 2025: Individual $4150, and Family $8300. For those 55 and older you can contribute an additional $1000.You can use the money in the HSA at any time to cover health care expenses. That’s why they are ideal for early retirement. But if you don’t need to use these then you can really see the benefit when you let the money grow and pay for current health care expenses from other sources of personal savings when possible.But what if you don’t need all of the money for Healthcare Expenses?  It essentially becomes just like a Traditional IRA.  Distributions are taxed at ordinary income rates.For my clients who are younger or “youngish” who think they can wait until later, remember that the earlier you invest your money the longer it has time to grow, and that growth can be significant. Just $2000 invested in an HSA each year for 30 years that earns a 7% rate of return would grow to over $200,000. That would go a long way to help offset health care expenses in your early retirement.Step 5, would be further contributing to your 401k/IRAs to get to that 20% level of savings. For those who don’t need the savings for other goals (such as a house down payment) and if they are planning to retire after 59.5 you can put 10-15% of that money into a retirement account such as an IRA, Simple IRA or 401k, etc with the remainder in a non-retirement investment account. For those anticipating needing some of those funds before age 59.5 (for a house downpayment or even early retirement), I’d generally recommend saving 10-15% in a non-retirement account and the remainder in a retirement account.Whether one contributes to a Roth vs a Traditional account depends upon their income tax rate. The 6th step has numerous options. You can use these extra savings to enjoy extraordinary experiences. Better seats at concerts or sporting events, and more immersive travel experiences. It’s important to have these travel experiences while you have the health to enjoy it. For others who may want to invest in RE, they can build up funds to purchase these assets. For those wanting to become completely debt-free, they can use these funds to pay off their mortgage.If your mortgage is fixed at around 4% or less, mathematically it mostly...

TRAILERWelcome to episode 80 of the One for the Money podcast. I am always glad and grateful you have taken the time to listen. This episode is part 2 of a 2 part series on Medicare, which is the Federal health insurance program that helps pay for the health care costs of retirees. In episode 79, which was part 1 of this series, I shared what one needs to understand about Medicare and in this episode I’ll share the most common Misunderstandings and Mistakes people make with Medicare.In the tips, tricks, and strategies portion I will share a tip regarding choosing between Medicare Advantage and Medicare Supplement Insurance.In this episode...Medicare Isn't Cheap [2:23]Late Medicare Enrollment [4:47]Skipping Part D [5:46]Enrollment isn't One-time [6:48]Ignoring Pre-existing Conditions [7:50]MAINIn Episode 79 of the One for the Money podcast, I shared how expensive healthcare can be in retirement, even with Medicare covering a lot of the expenses. According to a survey released by the investment company Fidelity in August of 2024, most individuals expect healthcare costs in retirement to be~ $75,000 per person or $150,000 per couple but the actual expenses are $165,000 per person or $330k per couple. That is more than double what people estimate they will have to shell out. Medicare will play a major role with regard to their health care in retirement. However, the Medicare system itself can be challenging to fully comprehend given the various coverage options, expenses, and deadlines involved.Due to these misunderstandings far too many American’s make critical mistakes regarding their Medicare coverage. Here are five of the most common mistakesFirst, many Americans might assume (given that they've paid into the Medicare system through payroll taxes throughout their careers) that Medicare coverage is completely free. Whereas, in reality, several parts of Medicare (e.g., Part B medical coverage (doctor visits) Part C, and Part D (which provides prescription drug coverage) require you to pay premiums. Further, even if one understands that they will have to pay premiums, they might not be familiar with Income-Related Monthly Adjustment Amount (IRMAA) surcharges (aka IRMAA), which apply to retirees with higher incomes in retirement which can increase their costs further. And so the Mistake people make is thinking Medicare is inexpensive or free but Medicare does not cover 100% of your healthcare  costs.  Medicare part A covers inpatient hospital care, skilled nursing facility stays, hospice care, and some home health care,Part A Deductible and Coinsurance Amounts for Calendar Years 2024 and 2025by Type of Cost Sharing20242025Inpatient hospital deductible$1,632$1,676Daily hospital coinsurance for 61st-90th day$408$419Daily hospital coinsurance for lifetime reserve days$816$838Skilled nursing facility daily coinsurance (days 21-100)$204.00$209.50Medicare Part B (Medical Insurance):.Part B is optional and available to anyone who qualifies for Part A. It requires a monthly premium, regardless of work history.Part B covers doctor visits, outpatient care, medical services like lab tests, and most preventive services.Premiums for part B in 2025 as low as 185/mo or as high as 628.90/month based on your income from the previous years. Those higher premiums are a result of the IRMAA charges I mentioned previously.Medicare parts C and D also have premiums. In 2025, the average monthly premium for Medicare Advantage (Part C) is projected to be $17, but it can vary from $0 to over $200The average projected premium for 2025 for all Part D plans is $47/monthHealthcare in retirement is much less expensive with Medicare but it certainly it isn’t close to being free. The second Mistake people make with Medicare is  Enrolling in Medicare late Speaking of costs, one mistake that can increase your monthly costs is Enrolling late in Medicare incurs penalties that result in higher premiums — for life. The later you enroll, the heavier the penalties.  There are different enrollment periods, depending on your  situation.   For example are you working past age 65 and will you be covered by an employer healthcare plan?It is  important that you know which period applies to you, so  you  don’t  enroll late.  Late penalties apply mostly to Parts B and D of Medicare.The important enrollment deadlines (e.g., the 7-month-long initial enrollment period, which includes the 3 months before they turn 65, the month they turn 65, and the 3 months after they turn 65), which, if missed can lead to penalties on premiums for the rest of their life.A third mistake people make with Medicare is assuming they don't need to sign up for a Part D prescription plan because they currently don't take many prescription drugs. Not signing up for a prescription drug plan  You may think, “Why should I pay for a prescription drug plan if I don’t take prescription  drugs?” Things change, unfortunately, and you might need to take them in the future. Without prescription drug insurance, you could be paying a great deal for medicine. If you wait to sign up until you need coverage, you must wait until  the next open enrollment period  and  pay late penalties for life. All Rx drug plans have a catastrophic coverage provision, an out-of-pocket threshold above which you have no copays or coinsurance. Even an inexpensive drug plan is better than none. Mistake #3A: Enrolling in the same prescription drug plan as your  spouse just because your spouse is enrolled in that plan.  Given that you will likely have different prescription needs, each might benefit from different types of plans (e.g., how different drugs are covered).The fourth mistake Americans make with medicare is assuming that Medicare enrollment is a one-time task and that they will remain on the same coverage for the rest of their lives; however, the annual open enrollment period offers the opportunity to make a range of changes to coverages (given that premiums, deductibles, and/or coverages for certain plans can change each year).Don’t do  that! Unless the plan adequately addresses your own health needs, too. Mistake #4A: failing to review your Medicare Advantage also known as Medicare part C coverage annually . When you enroll in a Medicare Advantage plan, you will receive an Annual Notice of Change (ANOC) every September. It is critical to review this document each year to be aware of any changes to your plan. Mistake 4B is not understanding the difference between Medicare Advantage or Medicare Supplement. One is not required to enroll in Medicare advantage instead one can enroll in a Medicare Supplement Plan which are also referred to Medigap plans. I go more into the differences at the end of this episode.  The 5th mistake people make with Medicare because of their misunderstandings is  assuming pre-existing conditions don’t matter.Pre-existing conditions  don’t  matter when you  first  enroll in Medicare.  When you first enroll in Medicare Part B, you have  six months  to enroll in a  Medigap plan, or switch plans, with “no questions asked”.  This initial six-month period is called the  Guaranteed Issue (GI) period . It occurs only once for most people; it is  not annual! There are a few exceptions where your guarantee issue period can be renewed but those tend to be rare.What I have just shared are 5 of the more common misunderstandings that lead to mistakes regarding Medicare. Now, if all of this information regarding Medicare, has you confused, It’s completely understandable. Most every9one thinks you retire and you get free health care provided by the government. But when you start getting into all of the details it can get incredibly overwhelming. For example there's Medicare parts A part B part C part D there's Medigap and then there's Medicare supplement and then there's Medicare advantage it can make your head swim. And while healthcare in retirement can be expensive even with Medicare (165K per person or $330k per couple) and can be even more expensive than that if you don’t plan well when selecting your Medicare options.  I strongly recommend my clients and others to engage with the specialized Medicare experts that understand this information. There are companies out there that provide this such as boomer benefits, or health pilot. I'm not endorsing these necessarily but wanted to give you an idea of what you can use to help you make some of the most important decisions you will make in retirement.TIPS, TRICKS AND STRATEGIESWelcome to tips, tricks and strategies portion of the podcast where I will share a tip regarding choosing between Medicare Advantage and Medigap also known as Medical Supplemental Insurance.Medigap vs Medicare...

TRAILERWelcome to episode 79 of the One for the Money podcast. I am always glad and grateful you have taken the time to listen. This part 1 of a 2 part series on Medicare. Medicare is a significant part of every single American’s retirement planning. Knowledge of Medicare is critical to making the most of your retirement. In this episode I’ll share what you need to understand about Medicare and in Episode 80 airing on February 15th, I’ll share the Misunderstandings and Mistakes people make with Medicare.In the tips, tricks, and strategies portion I will share a tip regarding Medicare enrollment.In this episode...Rising Healthcare Costs [1:53]Medicare Basics [2:57]Importance of Annual Medicare Reviews [12:03]MAINIn Episode 79 of the One for the Money podcast, I shared how the first wealth is health. I also shared the importance of exercise and nutrition and how they can increase not only one’s life span, but their health span, which is the years one has good health.  Because healthier retirees incur fewer health related expenses it really is in retirees long term financial interest to INVEST in their health because health care related expenses in retirement are WAY higher than what most people anticipate.In fact last August, the investment company Fidelity released its Fidelity's latest Retiree Health Care Cost Estimate, which surveyed retirees. Most individuals surveyed expect their share of health care related expenses in retirement to be ~ $75,000 retirement (or $150k per couple), but current retiree healthcare expense data shows that each individual should expect to pay $165,000 or $330k/couple in retirement for health care expenses. That is more than double what people estimate they will have to shell out.  Now these estimates assume that these individuals have health care coverage through Medicare. This might have many scratching their heads wondering what Medicare actually pays for. Quite a lot actually, it’s just that health care is incredibly expensive especially as one ages.I’ll first explain what Medicare is and what it takes to be eligible before explaining why health care costs in retirement are still expensive even with Medicare. Medicare is health insurance for retired Americans. According to usdebtclock.org, the the US government spent ~ $1.8 Trillion dollars on Medicare/Medicaid in 2024 which accounts for over 25% of the annual Federal budget. Some of Medicare is paid for through payroll taxes. Employees pay 1.45% of their income and employers pay another 1.45% of their employees income to the government to help fund Medicare and Medicaid. These are part of the Federal Insurance Contributions Act or (FICA) taxes that we pay on our income. Social Security is funded with a tax of 6.2% paid by the employee and another 6.2% paid by the employer. However this is only paid on the first $176,100 of income. Any income earned above that level is not subject to the SS tax, and that’s because there is an upper limit on the social security benefit one could receive.  However, the 1.45% medicare tax has no income limit so whether a person earns income of $10,000 or $10 million  the Medicare taxes are applied to the entire amount. Now Medicare has been around for a long time. In 1935: President Franklin D. Roosevelt’s New Deal included the Social Security Act, which provided retirement benefits but did not include health insurance. Efforts to include health coverage in the program were unsuccessful due to political opposition.By the 1960s, about half of Americans over 65 had no health insurance, as private insurers found them too risky to cover.1965: Medicare was established under President Lyndon B. Johnson as part of the Social Security Act amendments. It aimed to provide health insurance for Americans aged 65 and older, regardless of income or medical history. Former President Harry S. Truman was the first enrollee, symbolizing his earlier advocacy for national health insurance.Initial StructureMedicare initially had two parts:Part A (Hospital Insurance): Covered hospital stays, nursing facility care, and some home health services.Part B (Medical Insurance): Covered doctor visits, outpatient care, and preventive services.Since then there have been several notable Expansions and Changes1972: Medicare expanded to include people under 65 with long-term disabilities and individuals with End-Stage Renal Disease (ESRD).1997: The Balanced Budget Act created Medicare Advantage (Part C), allowing private insurance plans to offer Medicare benefits.2003: Medicare Prescription Drug Improvement and Modernization Act added Part D, a prescription drug benefit, which became available in 2006.2010: The Affordable Care Act (ACA) expanded preventive services coverage and reduced costs for beneficiaries in the Part D.Today, Medicare covers over 65 million Americans and consists of four main parts: Part A: Hospital insurance; Part B: Medical insurance; Part C: Medicare Advantage, a private insurance alternative to traditional Medicare; Part D: Prescription drug coverage.While Medicare has improved healthcare access and affordability for millions of Americans, it continues to face challenges, including rising costs, the aging population, and calls for reform to ensure long-term sustainability.Eligibility for Medicare is based on a few factorsEligibility by AgeAge 65 or older:Most people qualify for Medicare when they turn 65 if they meet one of the following conditions:- They are U.S. citizens or permanent residents who have lived in the U.S. for at least 5 consecutive years.Medicare part A covers inpatient hospital care, skilled nursing facility stays, hospice care, and some home health care,They or their spouse have worked and paid Medicare taxes for at least 10 years (40 quarters), which qualifies them for premium-free Part A. Those who don’t qualify can still buy Part A by paying a monthly premium. If they have at least 30 quarters of coverage, it will be $285/month in 2025, fewer than 30 quarters of coverage, $518 a monthMedicare Part B (Medical Insurance):.Part B is optional and available to anyone who qualifies for Part A. It requires a monthly premium, regardless of work history.Part B covers doctor visits, outpatient care, medical services like lab tests, and most preventive services, essentially differentiating between "hospital insurance" (Part A) and "medical insurance" (Part B)Medicare Advantage (Part C) and Prescription Drug Plan (Part D):Eligibility for these plans requires enrollment in both Part A and Part B.Non-citizens:Legal permanent residents (green card holders) are eligible if they meet the 5-year residency requirement and have worked enough to qualify for Social Security benefits (or have a qualifying spouse).By meeting one or more of these criteria, individuals can enroll in Medicare during specific enrollment periods to avoid penalties or coverage delays.Enrollment Process:Some are enrolled automatically (e.g., those already receiving Social Security benefits).Others must apply through the Social Security Administration, especially if not receiving Social Security benefits or living in Puerto Rico/abroad.Specific Enrollment Periods:Initial Enrollment Period (IEP): A 7-month window around the person’s 65th birthday or 25th month of disability benefits.There is a General Enrollment Period (GEP) and Special Enrollment Period (SEP) which is available for those with group health coverage from current employment.Employer-based coverage from current employment may allow delay of Part B enrollment.COBRA coverage does not qualify as current employment coverage, so delaying Medicare may result in penalties and coverage gaps.it’s hugely important to enroll into Medicare at the right time as there will be a monthly penalty for life if one does not. Now back to the healthcare expenses in retirement. On average people expect to pay $165,000 or $330k/couple in retirement for health care expenses even with Medicare. Parts A, B, C and D. Of that $165k/person 43% of that will be Medicare Part B and Part D premiums, out-of-pocket prescription drug costs account for 10%, and other medical expenses (e.g., co-payments, coinsurance, and deductibles) make up the remaining 47%.Part A Deductible and Coinsurance Amounts for Calendar Years 2024 and 2025by Type of Cost Sharing20242025Inpatient hospital deductible$1,632$1,676Daily hospital coinsurance for 61st-90th day$408$419Daily hospital coinsurance for lifetime reserve days$816$838Skilled nursing facility daily coinsurance (days 21-100)$204.00$209.50Beneficiaries who file individual tax returns with modified adjusted gross...

TRAILERWelcome to episode 78 of the One for the Money podcast. I am always glad and grateful you have taken the time to listen. In this episode I’ll share why the first wealth is health. In the tips, tricks, and strategies portion I will share a tip regarding Health Saving Accounts.In this episode...The Holiday Season [0:57]Health vs. Wealth [1:57]Health Expenses in Retirement [4:04]Exercise and Long-Term Health Benefits [5:38]MAINThis episode airs on January 15th when we get a pretty good sense on how well we are doing on the resolutions we made a few weeks back. Often times, those resolutions focus on our health, which makes a lot of sense given all the delicious food we at during the holidays.According to one medical JournalSeveral studies suggest that the holiday season, starting from the last week of November to the first or second week of January, could be critical to gaining weight. But it’s not just the holiday foods to blame. As noted in an article by the University of Rochester Medical Center Shorter days, longer nights, cold weather, decreased exercise and changes in sleep habits all contribute to winter weight gain. When you add in the abundance associated with holiday meals and our tendency to overeat at special occasions, many of us enter the New Year a few pounds heavier than we were before Thanksgiving.This may seem like unusual financial planning advice, but as the great American author Ralph Waldo Emerson said,  The first wealth is health. And as Bronnie Ware noted in her Regrets of the dying essay, that health brings a freedom that few realize until it’s gone. Years ago, I read an article that featured several prominent financial planners who worked with financially wealthy clients and when asked what was the most important advice they gave their clients, all of them emphasized the importance of health. One of the advisors recommended that for those over 50 you should plan to spend at least 1 hour a day on their physical health. Now some might think, of course these clients were already wealthy so they could in turn focus on their health, but it just goes to show that wealth isn’t anything unless one has their health. Many think you should exercise so you can have a longer enjoyable life but often times, your life can be just as long, but just not enjoyable, as I’ve seen in my own family.  Many in my family have a long life span but sadly a poor health span which are the years in which you have good enough health to enjoy it.According to growwellthy.com, which is for an exercise physiologist that helps financial planners stay healthy, 96% of retirees say health is more important than wealth. The website includes a health check quiz that goes over key elements of one’s health; namely: Nutrition, regular and appropriate exercise, good sleep, ie more than 7 hours a night, taking more than 7000 steps a day, strength train at least 2 times per week, there were also questions regarding one’s physical fitness such as: are you able to get down and up off the floor easily, Can you hang from a bar for at least 30 seconds, do you eat protein at most meals, drink alcohol sparingly and do you drink lots of water? I heard a great quote a while back “A man’s health can be judged by which he takes two at a time — pills or stairs.” And it’s not just about feeling great, it’s having more money to spend on other things that you would enjoy. It really is in your long term financial interest to INVEST in your health and to keep exercising. Because health expenses in retirement are far higher than what most people anticipate.According to Fidelity's latest Retiree Health Care Cost Estimate, while individuals expect to incur $75,000 of healthcare costs in retirement, the actual average is $165,000 (assuming the retiree enrolls in Medicare Parts A, B, and D), that’s a large difference. Medicare Part B and Part D premiums are responsible for 43% of this total, out-of-pocket prescription drug costs account for 10%, and other medical expenses (e.g., co-payments, coinsurance, and deductibles) make up the remaining 47%. And while 63% of Americans approaching retirement say they plan to review their Medicare options annually, a separate survey found that retirees aged 75 and older are the least likely to review their coverage each year (despite the potential for savings by comparing plans, given greater medical needs at this point in their lives).Assessing your medicare options on an annual basis is a hugely important part of your financial planning. I strongly recommend you invest the time and the experts to help you with that decision each year.And it’s imperative that we continually invest in our health. In episode 29 of this podcast, I shared information from Dr. Peter Attia, a physician whose medical practice focuses on increasing his clients health span. This doctor doesn’t treat the ill, but helps people get healthier. Something that is sorely needed in our society.Dr. Attia shared that longevity and life span were impacted through major modifiable behaviors such as exercise, sleep, nutrition, and emotional health. But that Exercise is in a league of its own both on its ability to extend life and reduce all-cause mortality. Dr. Attia shared information from Dr. Mike Joyner an exercise physiologist to further demonstrate his point of why exercise is so critical. Dr. Joyner shared a fascinating study regarding the impact of exercise on life expectancy. This study was conducted by a Dr. Jerry Morris in the UK after WW2 where he studied employees that worked on the iconic red double decker buses you see in London. They compared the health of the persons driving the bus vs the conductor, who was on the same bus, that had to walk up and down the stairs getting tickets. These individuals were followed for years and it was determined that the conductors had about a 50% lower levels of drivers of cardiovascular disease. Dr. Joyner said that when they studied healthy people that they had a 4-5 year extension in life expectancy but even more interesting is that they also had a 4-5 year extension in health span, meaning how disability free you are. They had 4-5 extra good years and lived a long time and died quickly with minimal disability. Sign me up. I’ll put a link to the podcast in the show notes for those that want to learn more. But suffice it to say, exercise doesn’t just buy your more time but it buys you more quality time as well. In conclusion, exercise can extend your life and health span, and may greatly reduce the money you have to spend on healthcare during an early retirement. A great quote I read was  this, “Those who think they have not time for bodily exercise will sooner or later have to find time for illness.”Jim Rohn the entrepreneur, author, and motivational speaker also  said “Take care of your body, it’s the only place you have to live.”TIPS, TRICKS AND STRATEGIESWelcome to tips, tricks and strategies portion of the podcast where I will share a tip regarding how best to pay for health care expenses.  While staying healthy you may be able to avoid many of these costs when you do have healthcare costs there is a clear advantage on how to pay for them. Wouldn’t it be great to get a 20-30% discount on medical expenses? Well the great news is that you can with flexible spending accounts and health savings accounts. Both of these are available regardless of your level of income. Between the two, Health savings accounts have the clear advantage as they don’t need to be used up each year, but if FSA is all that you have, like my wife with her health care plan, it’s still a great way to get a “discount” on any healthcare related expenses. HSAs are a powerful tool, especially for early retirees as eligibility for medicare doesn’t begin until age 65. Here are why HSA are so great. These are the only investment vehicle that are triple tax free. Yes triple!  The contributions are tax deductible, and both the growth, and distributions (if used for a qualifying medical expense) are tax free and so with HSAs you pay $0 taxes. But not all people are eligible to invest in an HSA.  You must have a qualifying high deductible medical plan.  Additionally, the contributions are limited to the following amounts in 2025: Individual $4150, and Family $8300. For those 55 and older you can contribute an additional $1000.You can use the money in the HSA at any time to cover health care expenses. That’s why they are ideal for early retirement. But if you don’t need to use these then you can really see the benefit when you let the money grow and pay for current health care expenses from other sources of personal savings when possible. But what if you don’t need all of the money for Healthcare Expenses?  It essentially becomes just like a Traditional IRA.  Distributions are taxed at ordinary income rates.For my clients that are younger or “youngish” who think they can wait until later, remember that the earlier you invest your monies the longer it has time to grow, and that growth can be significant. Just $2000 invested in an HSA each year for 30 years that earns a 7% rate of return would grow to over $200,000. That would go a long way to help offset health care expenses in your early...

TRAILERWelcome to episode 77 of the One for the Money podcast. Happy New Year as well as this episode is airing on Jan 1st, 2025. Crazy how time flies. I am both glad and grateful you have taken the time to listen. In this episode, I’ll share the biggest lessons I have learned in over 25 years as an investor.In the tips, tricks, and strategies portion, I will share a tip regarding setting financial goals.In this episode...The Importance of Starting Early [3:27]The Power of Paying Yourself First [4:19]Market Timing is a Fool’s Errand [5:36]The Need for Proper Planning & Tax Strategy [8:02]Spending While You Are Healthy [12:11]MAINI’ve been investing in the stock market for a little more than 25 years and I’ve learned a lot about investing and building wealth during that time so I thought it might be helpful for me to share the biggest lessons I’ve learned at my silver jubilee investing anniversary. But first, I should share that I was introduced to the stock market by accident. I was told by a university guidance counselor that graduate schools and future employers expected those they accepted to be well-read and that one should read the paper every day. After that guidance every day I would grab our local paper and read the current events in the world which would feature such things as natural disasters, politics, wars, etc. I would then skip over the business section to review the sports section. However, as I turned the pages on the business section I often wondered what all of these abbreviations and numbers represented. I learned later that these represented companies that the general public could invest into. Well, one day the newspaper advertised a free investing seminar at the public library in the city closest to my small town. I attended the presentation and it was incredibly interesting. The gentleman who presented spoke of one Warren Buffett and how the stock market was the way to build wealth. At the time of this investing seminar, Warren Buffet’s company Berkshire Hathaway had a stock price of a whopping ~$60,000 per share. If you think that’s amazing today a single share of Berkshire Hathaway stock is over $700,000.A short time after I was introduced to investing, it seemed the rest of America became interested due to the dot com era. At the time the World Wide Web was a new phenomenon and the stock market rocketed higher. The stock market eventually crashed down to earth, but despite the volatility, I became very interested in investing. These experiences started my journey into investing and here a little over 25 years later are the biggest lessons I have learned about investing and building wealth. The first lesson I’ve learned in my 25 years is that little actions have massive consequences when given time. In other words, it is WAY more important to start investing than the actual amount you have to invest. Every little dollar can grow to mind-boggling sums given time. One of the best examples I share with clients is that of an apple seed. It’s hard to conceive that this tiny little seed could grow into a large tree that could produce thousands of apples, and yet that’s exactly what it can do, of course, given the critical ingredient of time. But your wealth can’t grow if you don’t plant the seeds to start with.As the old proverb goes - The best time to plant a tree was 20 years ago; the second best time is now. As you get older you usually can make more money but you can never get more time!The second lesson I’ve learned in my 25 years is understanding how paying yourself first makes all the difference. As Warren Buffett said so well “Do not save what is left after spending; spend what is left after saving.” People who know how to manage their cash flow have the best life in the future. They have more freedom, more experiences, and way less stress. As a certified financial planner, I’ve seen this firsthand. I’ve met with 50 and 60-year-olds who have accumulated millions and are excited about retirement but I’ve also met 50 and 60-year-olds who have minimal to no net worth and are scared of what the future holds. These are sobering meetings when I tell them that they have to work for way more years than they want to and their retirement will still be challenging. My heart aches for them. It’s the reason, I teach financial literacy classes in the community and why I teach financial literacy to the teenagers and young adults of my clients. Just doing for them what I wished was done for me. I like to remind people that you will turn 65 regardless of what planning you put in place.The good news is that many already pay themselves first with their automatic contributions to their 401ks, IRAs, and HSAs.The third lesson I’ve learned in my 25 years is an investor is that no one can accurately predict the future and despite such an obvious statement, we continue to digest the predictions about the economy, the stock market, or even who will win the Super Bowl for American Football fans or the Champions League for those European football fans.And yet many investors try to time the market based on certain predictions. The famous investor Peter Lynch explained the fools errand of market timing best when he said- “More people lost money waiting for corrections and anticipating corrections than the actual corrections.”Another great quote regarding predictions is from Warren Buffet when he said “We've long felt that the only value of stock forecasters is to make fortune tellers look good. Even now, we continue to believe that short-term market forecasts are poison and should be kept locked up in a safe place, away from children and also from grown-ups who behave in the market like children.”In a fabulous and equally free resource from JP Morgan entitled Guide to Retirement, it highlights the perils of trying to time the market and why it doesn’t work. The guide uses a 20-year investment period for the S&P 500, from Jan 1, 20004 to December 31, 2023. During that time there were over 5000 trading days. And if you were invested for all 5000+ days a $10,000 dollar investment in the S&P500 would have grown to over $63,000. But if you would have missed just ten of the best days of those 5000+ days. Your investments would have only grown to just over $29,000 instead of over 63,000. In other words, if you were invested for 99.8% of the days your investments would be 54% less. If you had missed just the 20 best days of approximately 5000 trading days, your investments would have only grown to just over $17,000. Too many people believe they can time the market and know when to sell and when to buy, but it’s impossible. Here is why seven of the 10 best days occurred within two weeks of the 10 worst days and Six of the seven best days occurred after the worst days. This leads to the fourth lesson I’ve learned in my 25 years is an investor. Which is fear is not your friend. As the famous investment Advisor Nick Murray has said so well "All successful investing is goal-focused and planning driven. All failed investing is market-focused and performance-driven.”All successful investors are continuously acting on a plan. All failed investors are continually reacting to the markets. Everything else is commentary.”The reason why planning-driven investing is so important is because it takes the emotions out of investing. Those emotions can have a huge impact. Nick Murray also said, “Wealth isn’t primarily determined by investment performance, but by investor behavior.” How true that is I know this from personal experience when very early in my time as an investor, I purchased a stock that then dropped 50%. I sold out only for the stock since that time to increased over 7,900%. that’s right, instead of selling I should have bought more and enjoyed a nearly 8 thousand percent gain. For more details on this painful lesson see episode 18 of this podcast entitled, When Life Gives You Lemons, Stay Invested.Another fairly recent example, was during the Covid correction. Fidelity who manages over $4 trillion said that one third of their investors over 65 got out of the market during that correction. Since that time the market is up over 137%. The fifth lesson I’ve learned in my 25 years as an investor is that no one has their stuff together. Almost everyone needs help when it comes to investing. I was a do-it-yourselfer myself before I became a financial advisor but now that I have been investing for over 25 years and have been a financial planner for nearly 10. I’ve realized that no one is coming close to optimizing their investments. I’ve seen literally hundreds of portfolios and most were not in alignment with the clients' goals. Here are just a few examples:During downturns in the stock market, I’ve kept clients in the market. This increased their returns by hundreds of thousandsI have had numerous clients with hundreds of thousands and in some cases millions of dollars sitting in cash at the bank making hardly any interest but investing these funds I’ve been able to help them earn tens to hundreds o thousands more than they would have.   So many clients had the wrong allocations in their portfolios, too much allocated to a single company, or a single sector (technology for example) or a single country (the US) or in the wrong size (too much small cap or too much large cap)Too many clients weren’t pursuing the right type of retirement plans. Instead of saving $50-60,000 on a pre-tax basis, I’ve helped clients save hundreds of thousands on a pre-tax basis through Cash balance retirement plans.Another example leads to the sixth lesson I’ve learned in my 25 years as an investor and that is...

TRAILERWelcome to episode 76 of the One for the Money podcast. I am both glad and grateful you have taken the time to listen. In this episode I’ll share how you can use a drop in the stock market to your advantage.In the tips, tricks, and strategies portion I will share a tip regarding year end planning strategies.In this episode...Opportunities in Down Markets [0:59]Investment Strategies During Market Declines [2:55]The Historical Behavior of the Stock Market [11:10]MAINBetter Planning Leads to a Better Life, and that can especially be the case in down markets. Many people fear stock market downturns but hopefully at the end of this episode you are able to see the silver linings amongst the rain clouds. In fact that reminds me of a fantastic quote by one of the worlds most famous investors, Mr. Warren Buffett. He said and I quote ““Big opportunities come infrequently. When it’s raining gold, reach for a bucket, not a thimble.”This speaks to the tremendous opportunities that a down market can present, but you have to have the stomach to handle them. During such times it’s easy to get gripped by fear and I don’t blame people as losses are incredibly hard to stomach. In fact losses are twice as impactful for investors than equivalent gains.  Studies have shown that a 10% loss hurts twice as much as a 10% gain. I know this from personal experience when very early in my time as an investor, I purchased a stock which then dropped 50%. I sold out only for the stock since that time to increase over 7,900%. that’s right, instead of selling I should have bought more and enjoyed a nearly 8 thousand percent gain. For more details on this painful lesson see episode 18 of this podcast entitled, when life gives you lemons, stay invested.With a pessimistic mindset, you can make really poor decisions and miss incredibly once-in-a-generation type of opportunities, like I did, but with the right mindset you can see the economic rain storms and instead of running for cover you grab a bucket as Warrant Buffett said so well. And when you employ these better investment strategies it will make for an even better life.Here are the strategies to consider based on how far down the market is. I’ll use each calendar year, January 1st, as the starting point.Here is what one should do when the stock markets are down 5%.If the stock markets are down 5% from where there were on January 1st, there really is nothing one should do other than stay the course. Drops in this magnitude are far more typical than one might imagine. In fact in the last 44 years, the stock market has been down on average 14.2% at some point during the calendar year. So at one point between January 1st and December 31st of every year since 1980, the stock market was down around 14% on average and yet, 33 of those 44 years, the markets ended up higher on December 31st than where it had started on New years day. Most times the best thing you can do is nothing at all. Here is what one should do when the stock markets are down 10% , the definition of a correction. Your first option is to do nothing and stay the course but there are also some ways to take advantage of these likely temporarily lower prices. The first consideration is to rebalance your accounts. For example, let’s say you have identified a portfolio of 80% stocks and 20% bonds to be your ideal portfolio to help achieve your goals.  Now let’s also say there is a drop in the stock market of ~10% and this causes the stock holdings to go down to 70% from 80%.  Alternatively the bonds portion of your portfolio rises by from 20% to 30% in this hypothetical example. Rebalancing merely, shifts your portfolio back to it’s initial distribution, so 10% of bonds or bond funds are sold and 10% stock funds are purchased to get back to your original ratio of 80% to stocks and 20% to bonds. This enables you to buy stocks while they are lower priced. This was a huge win for my clients during the Covid crash because I rebalance client accounts on a quarterly basis. We were fortunate in the market low just happened to occur on March 23rd. Stocks had crashed as much as 34% on that date and so when clients accounts were rebalanced on March 30, they were able to purchase stock at these very low prices. In fact stocks, represented by the S&P500 were up 50% at the end of 2020 from the low point on March 23rd, 2020. Other strategies you can consider when markets are down 10% that are specific to retirement accounts are as follows. You could accelerate retirement plan contributions. Instead of spreading contributions over the year, you could increase those contributions when markets are down 10%. Of course the stock market could go down further so you could also keep your recurring contributions as they are. However, one additional consideration is to initiate partial Roth conversions. Roth conversions work just as they sound, you convert portions of your not-yet-taxed retirement accounts to never again taxed accounts. There are no income limitations but since you will be paying income taxes in the year of the conversion it makes the most sense to complete Roth conversions in the years when your income is lower. For example if you work part time in the years prior to full retirement that would be a great time to consider Roth Conversions.There are many factors to consider so be sure to speak with the right CFP. For those with Non-Retirement Accounts  you can consider Tax Loss Harvesting. That’s where you sell investments with gains to offset those with losses. For example, let’s say you purchased stock ABC for $5000 and it’s now worth $10,000. Let’s say you also purchased stock DEF for $7500 and it’s now worth $5000. You could sell both stocks and the $5000 gain in ABC would be offset by the $2500 loss in DEF so you’d only be taxed on $2500. Please note, that you have to wait more than 30 calendar days before you purchase stock DEF otherwise it would negate the offset due to wash sale rules.  I usually conduct tax loss harvesting in the fall each year and occasionally during the year if conditions allow for it. What strategies should one consider if stock markets are down 20% or more, which is the definition of a bear market. Generally they are the same strategies you would consider when the stock market was down 10%. If the stock market was down 20% from where it was on January 1st again you will want to definitely consider Rebalancing to increase your exposure to stocks. In retirement accounts it’s straight forward as there are no taxable implications but with non-retirement accounts those need to be considered. Also regarding retirement Accounts  you will want to further expedite Roth Conversions and/or accelerate retirement account contributions (Roth or Traditional). Again for those with Non-Retirement Accounts  you will want to consider tax Loss Harvesting.And for those that are already retired, you will want to assess if you need to make adjustments to your income distributions and only take distributions from dedicated income sources (ie conservative investments). We implement income guardrails for our clients and adjust their income lower or higher based on market events. Clients are often surprised how much their investments drop before they would have a drop in their income. What if stock markets are down 30%, One of those rare moments when it can rain gold.If markets are Down 30%, this may surprise you but it really is more of the same. Rebalance your stock and bond ratio to increase your exposure to stocks. With Retirement Accounts - Expedite Roth Conversions &/or Contributions and with Non-Retirement Accounts - Tax Loss Harvesting. For those that are Retired take distributions from dedicated income sources and Confirm one hasn’t hit your Income Guardrails.All of this of course is easier said than done. When markets drop, especially when they do so steeply it can be a challenging time. For this reason one should always invest according to ones goals and in alignment with time-tested investment principles but that shouldn’t prevent you from taking advantage of when the market provides opportunities. As Warren Buffett also said, when people are greedy get fearful but when people are fearful get greedy or better yet, get planning for a better life. This is a way better option than the alternative, which is selling your stocks. The last few years have offered more than enough unprecedented events, the stock market included. Back in 2020, with the global pandemic shutting the world down we had the fastest bear market which is more than a 20%, it just took 16 days for that to happen and then dropped further still. But only a short time later the stock market rocketed higher with the fastest 50 day rally in history, and later still with one of the fastest 100 day rallies in history. But it was those that reacted to the losses that really were impacted financially. Fidelity manages over $4 trillion dollars and they found that close to one-third of their investors over the age of 65 sold all of their stocks during the Coronavirus meltdown*.  Unfortunately because they sold, their investments missed out on these significant rallies to the upside. Here’s a great quote from the WSJ article at that time “people tend to sell after an economic downturn is already priced into equity markets, By selling at this time, investors are locking in their losses”Maybe these facts regarding stocks will be helpful to people to take advantage of stock market downturns:Over the...

TRAILERWelcome to episode 75 of the One for the Money podcast. I am both glad and grateful you have taken the time to listen. They say wisdom is learning from the mistakes of others and in that spirit, this episode will feature the mistakes a retirement expert made about her own retirement and I’ll share ways to avoid these same mistakes. In the tips, tricks, and strategies portion, I will share a handy rule of thumb regarding knowing if you are on track for retirement.In this episode...Who Is Alicia Munnell? [1:45]Mismanagement of Investments [2:47]Failure to Utilize Roth 401(k) [5:24]Premature Government Pension Withdrawal [8:14]Using Retirement Funds Early [10:07]MAINMost people really only have one shot at retirement so you want to be sure you get it right and you will want to be sure to avoid any mistakes. They say wisdom is learning from the mistakes of others and in that spirit, there was a recent article in the WSJ on the ways a retirement authority got it wrong. This can serve as an example of what not to do. The Oct 12, 2024 article states in its opening line “Alicia Munnell spent decades trying to improve how Americans retire. Even she made mistakes in her retirement planning.”First, let me share more about Alicia Munnell. She is an economist who served as an assistant secretary at the Treasury Department under President Bill Clinton. Her time in the Treasury Department was preceded by 20 years at the Federal Reserve Bank of Boston. After her time in the public sector, she established Boston College’s Center for Retirement Research, a think tank in 1998. Alicia, who is 82 years young, has been steeped in finance for many decades and her work covered everything from improving the 401(k) to whether the U.S. faces a retirement crisis.(Her Answer: Probably yes, since she and her colleagues calculate about 40% of the working population isn’t saving enough to maintain their lifestyle throughout retirement.) And yet despite the focus of her life’s work, she made some basic mistakes about her very own retirement. Here were some of her mistakes along with my thoughts on how she could have avoided them. One mistake she repeatedly made was not regularly monitoring her investments.  Like many people, she said that she lacked the time and interest to manage money. What she would do would rely on the occasional advice from her son, who works at a financial firm.In her words “Every now and then, he tells me to send him my asset allocation and then he tells me how to adjust it. If I had to figure out what to invest in, I’d have no clue,” said Munnell. “People have busy lives. Retirement planning should not be something they have to put a lot of effort into.”This boggles the mind. I am shocked a retirement authority, who highlights the importance of 401ks handles her retirement investments so carelessly. First, she doesn’t have a set schedule to review her investments on a regular basis, instead, she said that “every now and then” she reaches out to her son who works at a financial firm for changes she should make. And because she approached things so haphazardly, she or her son never consider her overall goals or taxable implications regarding her investments as demonstrated by the other mistakes that she had made.  Here’s how Alicia could have avoided this investment management mistake. She should have spent the time with her husband outlining their specific goals for retirement. These goals would then be used to align her investments with those specific goals. She then should have had regularly scheduled meetings to confirm their goals and re-align their investments if necessary. She should have assumed this responsibility herself or delegated it to a financial planning professional who was aware of her goals and could meet with her regularly.Alicia admitted she didn’t have the time and yet still was personally making the changes to her investments based on the occasional advice she solicited from her son. Since she lacked the time and desire to manage these investments she most likely would have benefited from the right CFP that would have taken the time to understand her and her husband’s goals and manage their investments accordingly. It’s a real shame that she didn’t engage in this type of guidance. What we have learned about our clients in our goal meetings is often surprising and is only a result of taking the time to have our clients go through the exercises to help them better articulate and prioritize the goals that are most important to the life they want to live. Using these goals, we then create and implement the best investment strategy to achieve them and we meet and speak with our clients regularly to re-confirm their goals and adjust their investments when needed.Alicia said another mistake she made about retirement is that she didn’t move any of her money from a traditional 401(k) to a Roth 401 (k) and Neither did her husband. She said as a result that they are required to take more withdrawals (via Required minimum distributions) than they need right now and have to pay more taxes as a result. She said and I quote “someone should have said, “If you’re going to work until 82, you might not want to put all your savings into a traditional 401(k). Put some into a Roth.” Again, it’s really surprising that a “retirement expert” would say “Someone should have said….put some in a Roth”. My first question is who does she think this “someone” should be? Her co-worker, her husband,  or her son? Talk about taking zero personal responsibility. And if she is expecting “someone” to tell her this information, why didn’t she seek out professional advice? Again, it’s strange that someone so steeped in retirement readiness was so unready for retirement. Here’s how she could have avoided that mistake. She could have spent the time to project her income, retirement balances, RMD requirements, and the potential taxable implications. Years and even decades prior she then could have modeled different scenarios such as Roth conversions, Roth Contributions, or Back Door Roth strategies to determine what the most effective way she could have created tax-free forever funds. It’s unclear how “someone just saying something” would have put her in the best possible situation. It also seems as if she, her husband, or their son didn’t have the time or inclination to conduct such an analysis so she should have delegated this task to the right CFP because many CFP don’t go to these lengths of tax and income projections. At my firm, we really enjoy helping our clients navigate their approach to taxable, tax-deferred, and tax-free funds to ensure they will pay fewer taxes in retirement. Everyone has to pay taxes so it all comes down to having clients pay taxes when it is to their advantage. For our clients with lower income years that means Roth contributions or Roth conversions. For clients in higher earning years that means having them make the maximum pre-tax retirement contributions.  This type of planning is some of the greatest value we provide clients where we can help them save literally millions in taxes by implementing the right strategies at the right time and project the results and making adjustments in the subsequent years. She would have benefited tremendously from working with a CFP that models current and future tax rates, account balances, and required minimum distributions.Another mistake she made that was noted in the article was regarding her government pension. She said, and I quote “When I left the Federal Reserve at age 50, I listened to someone who said I should take my monthly pension benefit early because I’d be so much better at investing the money than the Fed. So I took my monthly checks starting at 50 and didn’t invest a penny. Very quickly, my pension check became part of my spending. The monthly payment would have been meaningfully higher had I not taken it early.”There are those words again, “I listened to someone”. What qualifications and analysis did this “someone” provide to determine that it was better to take the pension early and invest it than take a higher pension later?  This still may not have been a poor decision, but why did Alicia Munnell follow the first part of the “advice” and not follow through with arguably the most important piece of advice, investing the pension instead? Clearly she didn’t have the inclination, time, or knowledge of why it was so important to invest these proceeds instead. Here’s how she could have avoided that mistake. She could have spent the time to project what her pension benefit would be at 65 and compared that to what her benefit at 50 + investment returns would be and project these further throughout retirement.  It’s again mind-boggling that a “retirement expert” listens to the advice of a random coworker but doesn’t once advocate the need to sit down with a planner who could have modeled such a scenario for her to make the best decision.I’ve modeled these scenarios for many of my clients and in almost every instance you want to delay your pension for as long as possible. The only time it makes sense to take a lump sum or take it early is if you have a shortened life expectancy. Alicia Munnell said another mistake was taking money out of a retirement account to help with a child’s wedding, which she said, and I quote “probably not a smart thing to do”. Again, I’m not sure if that was or was not the right decision. But what is clear, is that she never analyzed this financial decision in the context of her entire financial plan and how this related to her goals. Here’s how she could have avoided that mistake. She could...

Welcome to episode 74 of the One for the Money podcast. I am so very grateful you have taken the time to listen. In this episode, I will share when you should max out your retirement plan such as a 401k, and when you should not. In the tips, tricks, and strategies portion, I will share a retirement saving tip for those who don’t have access to a retirement plan through their job. In this episode...1978 Revenue Act [1:05]When Not to Max Out Contributions [3:03]When You Should Max Out Contributions [6:46]1978 was a watershed moment in the history of retirement for Americans. That was the year that a Revenue Act was enacted by congress and established 401k and 457b retirement plans. 401k retirement plans are for the private sector and 457b plans are for state and local government employees, as well employees of certain tax-exempt organizations. These plans now allowed employees to defer some of their income and avoid taxes on that income until they take it out later in retirement. This was huge. People could now save for retirement in tax advantaged ways.  Prior to that, most American’s relied on pensions from their employers for income in retirement. With a pension, the employer is committed to providing a specific amount of money to the employee for life during retirement. And that was feasible when people worked for several decades for the same employer and didn’t live that long in retirement. But as individuals started changing jobs more frequently for better opportunities and peoples life expectancy increased significantly, the pension system became untenable for both the public and private sector. 401ks are for companies government employees use 457b plans and public school employees (teachers) and non profits use 403(b) plans. Specifically regarding 401ks, 68% of private sector American workers currently have access to an employer sponsored retirement plan.For those Americans who have access to a retirement plan at work be it a 401k, 403b, 457b, SEP IRA or Simple IRA some wonder whether it makes sense to max it out every year. As with any financial planning, it depends upon your unique situation and circumstances.When you should NOT max out your 401k/403b/457b/SEP or Simple IRAThere are times when you shouldn’t max out your retirement account. One of the most obvious reason is if you have high interest debt that needs to be paid off first. However, I would recommend in this scenario that you at least contribute to the company match as that is free money. No higher contributions should be made until after your high interest debt is paid off. You need to pay down high-interest debt, for example credit card debt. The average credit card currently has an APR of more than 20%, which is well above the amount you could reasonably expect to earn on a diversified portfolio in any given year. That’s why it is always better to funnel extra cash toward paying down high-interest debt instead of maxing out retirement plan contributions.Another reason not to max out contributions to your work retirement plan is if you don’t have a sufficient emergency fund. As a reminder, you should have 3-6 months of your minimum expenses in savings to cover a potential financial emergency. We learned this first hand a few months ago when our eldest son nearly drowned while surfing. He was rushed to the hospital and was released the next day, but I was glad we had the savings to cover the incredibly high costs we have incurred as a result.A third reason why you shouldn’t max out your company retirement plan is if you haven’t yet funded a Health Savings Account or HSA. As a reminder, HSAs are available to individuals with qualifying high deductible medical plans. HSAs are incredibly powerful as they are the only triple tax free retirement account and they have the added advantage of early accessibility. You should max out your HSA before maxing out a retirement account. Another huge advantage of HSAs is that they can be accessed at any time without penalty for qualified medical expenses, whereas 401ks it can be as early as 55 and IRAs its as early as 59.5. See episodes 2 and 49 for more on HSAs.  A fourth reason why you may not want to max out your contributions to a retirement plan is if the plan has high costs and/or poor-quality investment options. Across the retirement industry, the majority of plan participants pay less than 80 basis points in combined costs (including administrative fees for the plan plus expense ratios for the underlying investment options). But costs span a wide range. If you work for a smaller employer, you’re more likely to be saddled with a higher-cost plan. In episode 73, I shared an example of a client that had hugely expensive investments. One had a management cost of nearly 2% and it had inferior performance. A final reason not to max out your work place retirement plan is if you plan to retire before 55 as you cannot access your money without a hefty penalty. If you roll your money to an IRA then you won’t be able to access your money without a hefty penalty until 59.5. Keeping your money in a 401k has that advantage over an IRA. When you invest in a 401(k)/403b/457b plan, your contributions are effectively off-limits until age 59½ (or 55 for retirement plan participants who have separated from service).Here are reasons when you SHOULD max out your 401k/403b/457b/SEP or Simple IRAIf someone is behind on saving for retirement, it’s imperative to stuff as much money as you can into a 401(k)/403b/457b as these allow you to put away the most amount of money in tax beneficial vehicles. In 2024 people can contribute $23,000 and if you are 50 or older you can take advantage of catchup contributions and contribute an additional $7500 or $30,500 in total.I recommend when you are young that you put in as much as you can in retirement vehicles because the longer your money is invested the greater the potential growth. I didn’t start saving in my 401k until I was nearly 30 and I didn’t make great money, but through budgeting, maximizing my 401k and selecting the right investments, and following a sound financial plan we are on track to have a great retirement. Another compelling reason to max out contributions to your pre-tax 401(k)/403b/457b is if you expect to be in a lower tax bracket after retirement. Most retirement savers have less taxable income after they stop working. Of course, tax rates can change in the future, but given American government’s reliance on income taxes and that lower incomes pay at lower tax rates you can benefit from contributing as much as you can to pre-tax 401(k)/403b/457b account. Contributing to a pre-tax retirement 401(k)/403b/457b account can also be used by early retirees to greatly lower their taxes in retirement by employing Roth conversions during their first few years of early retirement. There are a lot of factors to consider, but have employed these for my clients and it will save them hundreds of thousands of dollars in taxes. See episode 49 of this podcast for more details.Another reason to max out your retirement plan contributions is if you think your tax rate will be higher in retirement. Of course this time the recommendation is to contribute to a Roth retirement plan account as it will allow you to put away way more money in a never-taxed-again retirement account, allowing it to compound and grow tax free for as long as possible. I hope I was able to provide better understanding of when and when not to max out your work retirement plan such as a 401k, 403b or 457b. There are many factors to consider when making these decisions and having a certified financial planner provide guidance can be a tremendous help. Feel free to schedule a no cost or obligation meeting with me on my website at betterplanningbetterlife.com Thank you again for listening and I hope you found this helpful, now on to the tips tricks and strategies portion of the podcast.TIPS, TRICKS AND STRATEGIESWelcome to the tips, tricks and strategies portion of the podcast where I will share a saving tip for those that don’t have access to a work retirement plan such as a 401k, 403b or 457b. There are a few reasons why you may not have a work retirement plan. If you are a small business owner, these can be expensive. In episode 35 of this podcast I highlight the different options available to you. The options mentioned in that episode include IRAs, Sep IRAs, Simple IRAs, Solo 401ks and defined benefit plans. A great option if you don’t have access to a retirement plan is to save in a non-retirement account. These accounts have a few advantages over retirement accounts. The first is that they can be accessed at anytime (no having to wait until age 55 or 59.5). The second advantage is that for investments held for longer than a year, the taxation will be at the generally lower long term capital gains rates than the generally higher income tax rates. Now you will be required to pay taxes annually on any dividends and interest received but this annual taxation has less of an impact than most people think. I will share an example where $10,000 contribution is made each year into a Roth 401(k) versus a $10,000 invested each year into a taxable account (i.e. brokerage) for over 30 years. This analysis is courtesy of Nick Maggiulli of Dollars and Data.For this comparison, it assumed that both accounts grew at 5% a year and that the taxable account had to pay the long-term capital gains rate of 15% on a 2% annual dividend and when the portfolio was sold (in the last year). This means that no sales were made in the taxable account until...

Welcome to episode 73 of the One for the Money podcast. I am so very grateful you have taken the time to listen. In this episode, I will share why investors should look beyond investing in just the S&P500. In the tips, tricks, and strategies portion, I will share a tip regarding mutual fund and ETF management fees (also known as expense ratios). In this episode...Cost Considerations [2:39]Growth Limitations [4:55]Diversification and International Exposure [9:49]Years ago, I spoke with a gentleman who had his own company. He learned I was a wealth manager and expressed his frustration that the advisor who was managing his company’s 401k plan had made some poor predictions about the economy and consequently grossly underperformed the stock market. He then asked me an interesting question: why not just invest everything in the S&P500 and be done with it?This gentleman isn’t the only one with that same question and some, in fact, follow this philosophy by investing only in the S&P500 believing it is a wise investment strategy. Here are several significant reasons why investors should look beyond investing in just the S&P500.But first, it must be noted that the possibility of this discussion is entirely thanks to the pioneering work of Jack Bogle of Vanguard. He deserves so much credit for what he accomplished in ensuring people could invest in passive index-based funds. Before him, you couldn’t inexpensively invest in the 500 stocks of the S&P500. There wasn’t an option, but because of the index funds he created, he made it possible to do so incredibly inexpensively. It will cost you just $3 a year for every $10,000 to invest in the 500 companies of the S&P500 index. That is remarkable. Now many think one can solely invest in the S&P500 and be done with it. But historical analysis has shown that there are compelling reasons to invest in more than just the stocks listed in the S&P500. Indexing vs Indexing plusThe first reason is that investing in an index can actually be more expensive. Many think it is a really inexpensive way to invest and from a cost of management perspective, it is. But you have to consider more factors than just the cost of management. I’ll explain. The S&P500 is an Index. An index is just a publicly available list of stocks. It’s sort of like an investment recipe. But unlike grandma’s tried and true chocolate chip cookie recipe, the “ingredients” of the S&P500 change from time to time. In a dynamic capitalist-based economy, companies grow bigger and others grow smaller. This requires changes to be made to the list of stocks, or in other words, changes to the investment recipe. And whenever changes are made to the index, it’s announced so everyone knows the stocks that will be added, the stocks that will be removed, and the date when it will happen. Consequently, everyone knows what all of the indexes are going to buy and sell. As one can imagine the costs can increase as a result. There are passive investment strategies, like factor investing which I featured in episode 68, where they employ more flexibility in what they buy and sell. Buying stocks whenever one else is, is a lot like buying roses on Valentine's Day. It’s a more expensive way to buy both roses as well as stocks. We have a very recent example. On September 6 of this year, 2024, it was announced that the company Palantir would be added to the S&P500 Index starting on Sept. 23, 2024, and you will never guess what happened, The stock rose 13% in the next trading session. By the time all of the indexes add this stock to their investment list, the price of the stock will likely be much higher. That’s an expensive way to buy stocks.Another reason why the index can be more expensive is because they only buy and sell a few times a year when the changes are announced. The S&P 500 rebalances on the third Friday of March, June, September, and December. This process involves changing the weightings of companies in the index and sometimes adding or removing companies. That can lead to buying stocks at higher prices. But with other types of passive investing, it allows managers to buy and sell every day the market is open and take advantage of more favorable prices.Large cap vs small capThe second reason why the S&P500 index isn’t necessarily the best option is because it only represents the largest companies in the United States, namely those with a market capitalization of at least $10 billion. You might think that’s a good thing but it’s wise to remember that every company started out as a small one. Amazon and Apple and Microsoft are what’s called MegaCap companies because they have a valuation of over $200 billion. In fact, Apple and Microsoft have a larger value than the GDPs of Canada, Russia, or Spain. But at one time Amazon, Apple, and Microsoft were operated out of a garage or small office and would then grow to become small publicly traded companies and later mid-sized companies, then large companies, and now mega-sized companies. By investing only in the S&P500 you missed out on the most significant aspects of their growth. Take Shake Shack vs McDonalds. When it comes to investing, you want the company you are investing in to grow rapidly and smaller companies will grow faster. Shake Shack from a percentage perspective will be adding a lot more restaurants than McDonalds will. That doesn’t mean we don’t invest in McDonalds and larger companies. In fact a good amount of my and my clients’ investments are invested in large companies, however, we also have a good amount invested in smaller companies because that’s where the most explosive growth can occur. But if people only invest in the S&P500 you are only investing in the American companies after they got really large and you will miss out on buying the Apples, Teslas, Nvidia, and Microsofts when they were smaller. Again, using Palintar as an example. In the two years prior to joining the S&P500, the stock soared 350%. Those who invested in mid/small caps could have enjoyed that growth but those who solely invested in the S&P500 missed out on all of it.To further my point as to why investing in small company stocks is important. For the period between 1926–2016, the compound annual growth rate of return was 11.4% for the Small Company Index and it was 10.0% for the Large Company Index. That may not seem like a significant difference but over that 90-year period, $1 invested in small caps would have grown to over $20,000 where as $1 invested in Large cap would be just over $6k.  And since 1927 through December 2023 small stocks outperformed large stocks and 68% of the time after 10 years. Another reason to invest beyond the S&P500 is because of valuations.Some stocks are more expensive than others. Confusingly, this has nothing to do with the price of the stock but rather the price of the stock relative to the earnings of the company. This is known as the P/E ratio.  Companies for which you pay a higher price for earnings are called a growth stock whereas companies for which you pay a lower price for earnings are called a value stock. The difference can be significant.  Historically, value stocks have outperformed growth stocks in the US, often by a striking amount. Data covering nearly a century backs up the notion that value stocks—those with lower relative prices—have higher expected returns.The S&P500 at times has become overvalued and some of that overvaluation can be concentrated on growth stocks. For example, in September 2024, the top 10 companies of the S&P 500 are 36% of the index. That’s right 2% of the companies make up 36% of the value. And as of July 31, 2024, the top 10 companies had a price-to-earnings ratio of 31.4 times earnings whereas the bottom 100 had a ratio half that, 15.3%. No one can predict where the market goes from here but historically growth stocks at these high valuations tend to come back to earth. In fact value stocks have outperformed growth stocks by 4.4% annually in the US since 1927. Since 1926 through December 2023 value stocks were higher than growth stocks 70% of the time after 5 years and 78% after 10 years. Another reason to look beyond the S&P500 is it doesn’t focus on a company’s profitability. That may seem like a captain obvious type comment but factoring in companies with higher profitability can make a significant difference for investors. Since 1963 through December 2023 high profitability companies were higher than lower profitability companies, 67% of the time after one year, 82% of the time after 5 years, and 92% of the time after 10 years. The S&P500 doesn’t always reflect the most profitable companies.Domestic vs InternationalA final reason to invest beyond the S&P500 is because you miss out on investing in great international companies. The S&P500 is composed of solely large American Companies, but there are a lot of great companies beyond our nation’s borders. Some of those companies reside in more developed countries such as Great Britain, France, Taiwan, or Japan while other up-and-coming countries, defined as emerging market economies have great companies as well. An additional reason to consider international stocks is sometimes they zig while the S&P500 zags. In fact there was a period of time where an investment in the S&P500 was down 9% after ten years. so if you had invested $10,000 in the S&P500, ten years later your investment would have been worth just shy of $9100 dollars. That’s a poor return after 10 years time. That period of time was from January 2000 to December 2009. January 2000 was the height of the

Welcome to episode 72 of the One for the Money podcast. I am so very grateful you have taken the time to listen. Estate and tax planning are critical aspects of better financial planning so your beneficiaries can have a better life. In this episode, I’ll discuss the individual states with the highest estate and inheritance taxes. You’ll learn why you don’t want to die in Oregon or Maryland or a few other states. In this episode...Federal Estate Taxes [1:49]Estate Taxes vs. Inheritance Taxes [3:04]Considering Your State [3:38]Benjamin Franklin famously said “In this world, nothing is certain except death and taxes” and in this episode, my focus is on a combination of the two, namely estate and inheritance taxes which are levied at one's passing. A reminder, your estate is the sum total of all your assets at death. It would include retirement accounts, your home and other real estate, vehicles, jewelry, your classic 23-window van, and other valuable items. For a number of Americans, their estate will be worth millions of dollars. Many wonder if it would be taxed. As a reminder, there are often two categories of taxes you have to consider, namely Federal and State taxes. The good news is that most won’t have to worry about Federal estate taxes because the Tax Cuts and Jobs Act which was passed a few years ago, doubled the amount of an estate that won’t be taxed.  Now only those estates that have a value over $13.61 million for an individual or $27.22 million for a couple will be taxed. Those are 2024 numbers and each year it is adjusted for inflation. It should be noted that starting in 2026, if the TCJA does expire then those numbers will be halved. But even in half, those are pretty large values that an estate would have to exceed for that amount to be subject to tax. Consequently, only a tiny percentage have to factor federal estate taxes into their financial planning, and those that do can pay lawyers and accountants to minimize or eliminate most of the Federal estate taxes. But just because we don’t have to worry about Federal taxes, doesn’t mean that our estate won’t be taxed because our state residence may apply a tax or even two. The two types of taxes are estate taxes and inheritance taxes. Estate taxes are paid by the estate of the person who died before assets are distributed to the heirs of the estate. Inheritance taxes are paid by heirs on the gifts they receive. There are twelve states and the District of Columbia that impose estate taxes and six states impose inheritance taxes. Maryland is the only state to impose both an estate tax and an inheritance tax (spouses are usually exempt from the inheritance tax).Now most states have reduced or eliminated their estate and inheritance taxes over the past decade to dissuade well-off retirees from moving to more tax-friendly jurisdictions. But even if you don’t consider yourself particularly wealthy, the value of your home and funds in your retirement savings could exceed the estate tax threshold in some states. With that in mind, if you live in a state that imposes an estate or inheritance tax—and you don’t plan to move—you may want to talk to a certified financial planner or tax professional about steps you can take to reduce the size of your estate.Just so you are aware here are the states that tax your estate and those that tax the heirs of your estate.The Estate tax states are Washington, Oregon, Minnesota, Illinois, Vermont, NY, Maine, Mass, Connecticut, RI, Maryland, and DC.The Inheritance tax states are Nebraska, Iowa, Kentucky, Pennsylvania, NJ, and Maryland.As noted previously, the state of Maryland is on both lists as they tax both the estate and those who inherit it. While most individual states that tax Estates or Inheritance will have a high threshold, there are some that do not. In most states, estate taxes are progressive: the tax rate increases with the total value of the decedent’s assets. Two states, Connecticut and Vermont, have flat estate taxes with a single tax rate. Hawaii and Washington have the highest top rates in the nation at 20 percent. Eight states and the District of Columbia are next with a top rate of 16 percent. All states impose certain exemptions that prevent smaller estates from being subject to these taxes. Oregon has the lowest exemption at $1 million, and Connecticut has the highest exemption at $12.92 million.Of the six states with inheritance taxes, Kentucky and New Jersey have the highest top rate of 16 percent. Iowa is phasing out its inheritance tax, with full repeal scheduled for 2025, with the tax’s top rate at 6 percent in 2023. All six states exempt spouses, and some fully or partially exempt immediate relatives. Compare state estate tax rates and state inheritance tax rates below.Here are a few of the states with the highest estate taxes in the U.S. as of 2024:Oregon: Oregon’s top estate tax rate is 16%, with a relatively low exemption amount of $1 million. The Beaver State is the worst place in the U.S. to die if you’re concerned about estate taxes. Oregon has resisted the trend to raise its estate tax exemption or even adjust it for inflation. In addition to taxing estates valued at as little as $1 million, Oregon imposes a relatively high minimum tax rate of 10% on even the smallest of qualifying estates. Massachusetts: The top rate in Massachusetts is 16%, with an exemption amount of $1 million. Washington: With a top estate tax rate of 20%, and threshold is $2.193 million.Minnesota: Minnesota imposes a top estate tax rate of 16% with an exemption amount of $3 million.Hawaii: Hawaii also has a top estate tax rate of 20%. The threshold is $5.49 million.New York: New York has a top estate tax rate of 16%. The exemption amount is $6.58 million. How impactful inheritance taxes can be really depends on the heir’s relationship with the deceased. For example, Kentucky has no estate tax but it does have an inheritance tax with rates ranging from 4%–16% As with other states with an inheritance tax.  The tax isn’t an issue for spouses, parents, children, grandchildren, and siblings. They’re all exempt from Kentucky’s inheritance tax. However, the Kentucky tax can be a nightmare for other heirs. Nieces, nephews, daughters-in-law, sons-in-law, aunts, uncles, and great-grandchildren are taxed at rates ranging from 4% to 16%, depending on the value of the property inherited. Estate and inheritance taxes can be burdensome and should be considered if you live in the state mentioned. While Benjamin Franklin is right that there is nothing certain except death and taxes, with better planning, you can limit or even eliminate their effects. Tips Tricks and Strategies Welcome to the tips, tricks and strategies portion of the podcast where I will share a simple yet important estate planning tip when it comes to your beneficiaries. We often look at our estates being divided in terms of percentage but it may be more helpful to look at it from a dollar perspective. For example an estate divided equally amongst two children would yield 50% to each. But rather than look at it from a percentage perspective, it can be helpful to look at it from a dollar perspective. For example if a person had an estate of $5 million split between their two children it would give them each $2.5M. Looking at it this way can help you decide if you want your children to receive all $2.5m at your passing. Maybe it would be better for certain individuals to receive certain amounts distributed over time, especially if someone in their late teens or early 20s is to receive that kind of money. too many sad stories of young people blowing their inheritance. ReferencesEstate and Inheritance Taxes by State, 202318 States with Scary Death TaxesConnect with Jonny Westhttps://BetterPlanningBetterLife.com Connect with Jonny on...

Welcome to episode 71 of the One for the Money podcast. I am both glad and grateful you have taken the time to listen. In this episode, I’ll share about an estate plan checkup, for those that have one and for those that don’t.&nbsp;In this episode...Importance of Estate Planning [1:03]Review and Update of Estate Plan [2:34]Consequences of Not Having an Estate Plan [4:38]An estate plan is an absolutely crucial part of one’s financial plan. Over a lifetime you accumulate assets—real estate, investment accounts, a classic VW van, etc. When you pass away, there needs to be an orderly way for these assets to be distributed to those people you want to receive them. An estate plan is the way to carry out your wishes. Otherwise, the state of your residence, i.e. California, Hawaii, Texas, etc, will decide how it is divided up amongst your family. And if your estate is of significant value, you’ll have a lot of people claiming to be your family.&nbsp;Because estate planning is a critical piece of better planning it is one of the five financial planning domains I focus on with my clients. These five domains are investments, income (aka cash flow), Insurance, taxes, and Estate planning.&nbsp;Of those five domains, estate planning is the one most often ignored and that makes sense for a few reasons. We usually have a long time before we have to worry about it so it’s easy to put it off and the second reason is that no one wants to consider their own death. It’s rather depressing. But despite these facts, it’s incredibly important that any adult who owns real estate and or has children must have an estate plan.&nbsp;For those who already have an estate plan in place, I say well done! You should commend yourself for doing what far too many do not.&nbsp;But even if you already have one it’s important to complete a periodic check-up of your plan. Here is when to consider a checkup:First, When was the last time your estate plan was reviewed? If it has been ten years or more you will want to review it to ensure it reflects your current desires and circumstances and that the people who are assigned as the decision-makers are the people you still want.The second reason to consider a check-up is if there have been substantive changes in your life or the life of your beneficiaries. For example: marriages, divorce, births, adoptions, or even challenges faced by your beneficiaries (such as health events or substance abuse) all of which can change how you might wish to distribute your assets. Additionally, moving to a new state can affect your estate plan due to differing laws, so a review is advisable when relocating.Now if you have reviewed your estate plan and everything reflects your current desires and circumstances the next thing you need to do is ensure your loved ones know about it. Do they know where to locate the documents in the event they are needed? Do the people who will make the financial and medical decisions on your behalf, know they have that responsibility?It would be helpful to rehearse such a scenario to see how it plays out. The military practices scenarios to ensure they have made the necessary preparations as do firemen, policemen, lifeguards, and other professionals. It would be wise to consider what would happen if you and your spouse were incapacitated and couldn’t make a decision-what would happen then. Would the person named in your durable power of attorney documents know they are making the decisions and what you wanted them to decide? This is especially relevant for those of you in the later stages of life (70s and above). An older family member of ours recently had a health event, that put our preparations to the test. For a year before we had expressed the need to get the estate planning documents in the hands of the decision makers only until this recent scare had this been remedied. It’s wise to consider the what-ifs, as painful as such a thought may be.&nbsp;Now for those who don’t have an estate plan, there is work to do. Yes, you do have a default plan. In fact, every state in the United States, from Alaska to Wyoming has a default plan in place. BUT YOU ABSOLUTELY DON’T WANT it. It will take way longer and is way more expensive.&nbsp;Now you may be thinking, that sounds like something I’d want to avoid. And you would be right, but as I’ve shared in previous episodes you’d be surprised by the number of people that didn’t have an estate plan when they died. Here are just a few of the famous people you would know that sadly did just that: Pablo Picasso, Sonny Bono, Aretha Franklin, Prince (the artist formally known as), and the actor Chadwick Boseman (he played Black Panther in the Marvel Studios film). He did a phenomenal job in that role. Maybe you can’t entirely fault those who died suddenly, such as Sonny Bono and The Artist Formerly Known as Prince, but Aretha Franklin and Chadwick Boseman both had longer-term illnesses and still didn’t have an estate plan. Not a lot of R-E-S-P-E-C-T for one’s loved ones.Speaking of Aretha Franklin’s estate, her own sons had a five-year legal battle, before they were finally awarded real estate. A judge made the decision based on a handwritten will from 2014 that was found between couch cushions.It took 44 years to settle Jimmy Hendrix’s estate. Hendrix died in 1970 without a will. Without a will, Jimi Hendrix’s estate passed to his father. When his father died in 2002, he left behind his son’s estimated $80 million estate to Janie Hendrix, Jimi’s sister, cutting out Leon Hendrix, Jimi’s brother Leon Hendrix contested his father’s will in 2004, but it was upheld in 2007. Even when there isn’t lots of money there can still be a lot of drama.&nbsp;&nbsp;There are so many advantages to an estate plan as it allows you to name who gets to receive what, and also when they receive it and on what conditions.&nbsp; For example, you could say, I want money to go to my kids at 25, 35, and 45 years of age, rather than a lump sum of money at age 25. Most people in their early 20s wouldn’t make a great decision if hundreds of thousands were dropped into their lap.&nbsp; But without an estate plan, the State of your residence will be making all of those decisions for you because that’s the default estate plan, which isn’t great, but at least it’s better than the State assuming ownership.You might reason - but I’m already dead, who gives a rip, let my family sort things out when I’m gone. That’s a great strategy if you want your family’s last memory of you to be one of stress, expense, and struggle and you want your legacy to include family members fighting over your fortune, however small. If this isn’t enough reasons here are three additional reasons why you need one:First, it will take a long time without one - Even if you don’t have a huge estate like Aretha or Jimmy. Because the courts are backlogged, it can take 9 months before you can schedule just an initial hearing and likely several more years to finalize it (depending on the size of the estate and number of people who want to benefit).Second, It’s dang expensive - Without a trust, your family would need to pay all of the legal fees, namely court filing fees and the billable hours of an estate planning attorney. It’s WAY less expensive to pay for one before.The third and final reason you need an estate plan is that without one it is open to the public. That’s why we know about Aretha and Jimmy Hendrix's estate. It’s all played out in public. With an estate plan, it can be handled privately. But without an estate plan, your beneficiaries' names will be listed for the public to see and for the scammers who specialize in taking money from them.&nbsp;In conclusion, when it comes to estate planning it’s imperative that you complete a check-up. For those that have one, well done, but be sure it reflects your current circumstances and values and that all of the affected parties are notified and aware of the location and details.&nbsp;For those who own real estate or have minor children and don’t have an estate plan, get on it. You can complete these quickly and easily and inexpensively online. As you get older you can meet with an estate planning attorney to complete a new estate plan as you will have a better idea about your and your beneficiaries' situations.&nbsp;Tips Tricks and Strategies&nbsp;Years ago, I spoke with another advisor and asked how everything was going. He said he was in the midst of a challenging time because one of his clients in his early 50s had died unexpectedly. The good news was that this client had life insurance. The bad news was that his ex-wife from over 10 years ago was still listed as the only beneficiary on the policy, and his current wife wasn’t too happy about things. The advisor told me that he didn’t facilitate the purchase of the original policy so hadn’t thought to review that policy to ensure the beneficiaries were up to date.Things will transfer first by title, then by beneficiary designation, and finally by probate. In this case, there was a legal battle because the beneficiary was the ex-wife and her being the beneficiary of the life insurance wasn’t a part of their divorce agreement. Needless to say, this caused a huge issue for the widow.&nbsp;This is an example of exactly why we review clients' estate plans and regularly conduct beneficiary reviews. We always want to ensure everything is in alignment with your wishes, and we’ve made more than a few updates to beneficiary designations. None as drastic as the example just shared, but we’ve still made changes.References<a href="https://www.fidelity.com/life-events/estate-planning/basics" rel="noopener noreferrer"...

Welcome to episode 70 of the One for the Money podcast. I am so very grateful you have taken the time to listen. In this episode, I answer the question “How much should one spend on vacation?”In the tips, tricks, and strategies portion, I will share some cost-saving travel tips.&nbsp;In this episode...How Much Should You Spend [3:15]Why You Should Travel [6:21]Travel Saving Tips [8:56]MAINWhen it comes to travel, St Augustine and Mark Twain said it best in my opinion.&nbsp;St Augustine said that -The world is a book and those who do not travel only read one page.&nbsp;And Mark Twain said - Travel is fatal to prejudice, bigotry, and narrow-mindedness, and many of our people need it sorely on these accounts. Broad, wholesome, charitable views of men and things cannot be acquired by vegetating in one little corner of the earth all one's lifetime.My family and I are enamored with travel because of what we learn about the world, other cultures, and about ourselves. There are few things that create better memories than a vacation. Some have argued that life is really about collecting wonderful memories and research has shown that people tend to be happier when they have purchased experiences rather than things.&nbsp;That certainly is the case with our family. When both my children and my business were young, we traveled by car around the Western United States and Western Canada. We love the outdoors and visited over 25 national parks in both the US and Canada with Banff, Jasper, Waterton, Glacier, Yosemite, and Crater Lake being some of our favorites but there were so many others that were really great as well.&nbsp;As my business and kids grew we have been fortunate to be able to take a few international trips with Moorea and Cinque Terre being some of our favorites.&nbsp;When our family talks about our favorite memories it almost always involves experiences we’ve had together on our trips and our favorite family photos have come from our trips as well.This is why I am a strong advocate of traveling. It doesn’t have to require an airplane, because seeing a local museum or park can also provide a memorable time.&nbsp;In fact, when I was a kid our family never took an airplane on our trips. Instead, we all piled in our wood-paneled station wagon with the rear-facing seats in the back and went to the national park near our home, and a couple of times we visited family that lived in the Western States of Utah, California, and Texas. It was an incredibly long drive from Alberta, Canada but I have some cherished memories from those trips.&nbsp;One question that many ask is how much should one spend on travel.&nbsp; Some financial experts recommend that you spend 5-10% of your net income per year on vacations.For example, if your net income is $100k a year, and as a reminder that is your income after taxes and retirement contributions. then you could reasonably spend $5-10k a year on vacations.My family and I tend to spend more than 10% but we restrict our expenses in other areas of spending to compensate. We only eat out rarely and if we do it’s usually inn-n-out. Our kids don’t participate in club sports and just play AYSO soccer instead. With savings in those areas, we are able to do more on our vacations.&nbsp;When it comes to money for vacation it should be saved in advance of the year of travel and would be in addition to what you have in your emergency savings.I recommend you tentatively plan your upcoming trips for the coming years so you can anticipate the expenses. We have already planned our travel destinations for the next 2-3 years. I’ll do research on the expected expenses and create a Google spreadsheet that forecasts potential transportation, accommodations, food, activity, and other related expenses.&nbsp; As the trip gets closer, I even break it down by a daily expense. We usually save money on our trips by only eating out one meal a day and it’s usually a one to two-dollar sign place we find on Tripadvisor or like website. We also frequent the grocery stores of the country which is an enriching cultural experience to shop with and amongst the locals.&nbsp;For those who like to eat out more or at nicer restaurants, you can forecast those anticipated expenses beforehand. I always add a few extra thousand dollars to our overall travel budget just in case we have some unexpected trip expenses.&nbsp;Regarding travel, you will also want to consider the season of life you’re in. If you’ve got little kids, you will likely want to spend less of your income on vacations and do lower-key, closer-to-home trips. That’s what we did with our road trips to National parks. So many great memories from these. However, my wife and I have many more memories than our kids because they were so young they don’t remember them as well, but they do look at the photos as they play on our TV. Now that our two oldest kids are older we have justified spending more than the 10% of our net income on vacations. That was the rationale used for our recent trip to Europe. When my wife would ask about planning the trip, I’d tell her that we have 2 reasons why we should go on it, and that number represented the number of summers we have left with our oldest son Lucas before he leaves the nest.&nbsp;Now as wonderfully amazing as trips are one should never, ever,&nbsp; go into debt to go on a vacation. Instead, visit a local national or state park instead. Often the memories are just as good.&nbsp;I was reading an article on travel spending and they had a very appropriate warning which was beware of luxury creep. They said “Remember that it’s much easier to go up in the luxury level of a vacation than it is to come back down. That is, right now, you feel a 2-star hotel is perfectly amenable. However, once you stay at a 4-star property, a 2-star hotel will seem like an unacceptable comedown.&nbsp;One book that accelerated my travel was the book Die with Zero written by Bill Perkins.&nbsp;One of the most significant learnings from the book was his explanation regarding the intersection of time, money, and health and how too many worked too long to the point where they had plenty of time and money but didn’t have the health to truly enjoy it. He argued that people should be spending more money when their health is better. He argues that more money on travel should be spent in their 40s then their 50s, and more in their 50s then their 60s, and more money in their 60s than their 70s because you have the health to do it.&nbsp; Too many wait until after they have retired to travel and they just don’t have the stamina needed. For some, due to work obligations and other factors, they cannot travel until they have retired. And for those people, I strongly recommend that you pack a lot of travel in those first few years of retirement. In fact this is exactly what I encourage and help my clients to do.&nbsp;Whether it’s a trip in your car across a county or state line or a flight across the international date line, travel can create unique conditions for you and your loved ones to make incredible memories. The key is to be away from the daily requirements and to be fully present with your loved ones while you collectively experience with your 5 senses new places and things. You’ll have some incredibly memorable times as you meet with locals and read additional pages about the world, in the words of St. Augustine. You’ll also develop a broader more wholesome view of men and things as Mark Twain advised.&nbsp;&nbsp;All of these experiences will be incredibly enriching. As Bill Perkins notes in Die with Zero, one's life is a sum of your experiences and so to maximize your life you need to maximize your experiences. He notes that memories are an investment in our future selves. Buying an experience just doesn’t buy you the experience itself–it also buys you the sum of all the dividends that experience will bring for the rest of your life. Consequently, we need to make the most of whatever health we have at every point in our lifetime and see the world around us. It could be as simple as exploring a nearby museum or park and interacting with the people in that area. All told, you should be investing and spending according to a plan so you can have even more experiences.If you want to learn more about working with me to plan your ideal life, go to my website, betterplanningbetterlife.com. On the “getting acquainted page you can schedule a free introductory meeting that should be worth your time.Thank you again for listening and I hope you found this helpful, now on to the tips tricks, and strategies portion of the podcast.TIPS, TRICKS AND STRATEGIESWelcome to the tips, tricks, and strategies portion of the podcast where I will share a few tips on how to spend less on vacation.As I mentioned earlier in this podcast, when both my children and my business were young, we traveled by car around the Western United States and Western Canada visiting various National parks. I have always loved the outdoors and wanted to instill that same love in our 3 sons. One of the impetuses for visiting National Parks was that every 4 grader and their family gets into National Parks for free because of the wonderful Every Kid in the Outdoors program. This was Federal legislation that was passed that allowed 4 graders and their families to have free access to hundreds of parks, lands, and waters for an entire year. You just need to register online at everykidoutdoors.gov and print out your pass as electronic copies aren't accepted. We would present our paper and

Neither a Borrower Nor a Lender Be- Ep#69Welcome to episode 69 of the One for the Money podcast. I am so very grateful you have taken the time to listen.&nbsp; In this episode, I shared whether it is wise to lend money to family or friends.&nbsp;In the tips, tricks, and strategies portion, I share a tip regarding loans from a 401k.&nbsp;In this episode...Just Say No [1:24]If You Can’t Say No [6:06]401k Emergency Loan [9:20]MAINRecently I re-read The Tragedy of Hamlet by William Shakespeare. There are so many great quotes from this play. Just a few of these include:Brevity is the soul of witthere is nothing good or bad but thinking makes it soand one of the more famous lines - to be or not to be, that is the question.But the quote most relevant to the subject of this podcast episode comes from Polonius’ counsel to his son Laertes.&nbsp;Amongst other sage advice he provides his son, he tells him t0 “Neither a borrower nor a lender be; for loan oft loses both itself and friend.”Over the course of life, we will invariably all experience times where friends and family will ask us for money. It’s important to prepare prior to such a request as the wrong approach could ruin some of our closest relationships.&nbsp;&nbsp;Charles Barkley shared his thoughts on giving money to family.Barkley and the rest of the Team USA basketball players were in Atlanta preparing for the 1996 Olympic Games when he heard a conversation between his teammate Grant Hill and Hill’s mother. Janet Hill told her son that she was only staying in town for a few days, because she had to return to work. Barkley wondered why she was still working, considering that her son was making tens of millions of dollars playing in the NBA.&nbsp;And Grant Hill’s mom said the following:“Do not start taking care of your family and friends. They never gonna stop, and it’s gonna ruin all your relationships,” She also said. “When you start giving people money, they never gonna ask for money [just] one time. No matter what you do for them, the first time you tell them no, they hate you.”Barkley took the advice to heart and started to tell people no when they asked for money, which temporarily led to some ruined friendships.“It was a tough and painful lesson for me,” Barkley said.Some would think that professional athletes should share.&nbsp; Here is why most shouldn’t:Nearly 80% of NFL players go bankrupt or are under financial stress within two years of retirement and 60% of NBA players go broke or are bankrupt within five years of retirement. Just look at the sad cases of Antoine Walker, Bernie Kosar and others.When a family or friend asks for money, there could be a variety of reasons. Investing in their startup or helping them during a financially hard time.&nbsp;-The first thing I recommend is to thank them for coming to you and before you can consider helping them you will need to ask them for more details.For those wanting you to invest in their startup or small business, you have every right to ask for their business plan. How will they generate profits, what sort of experience do they have in that line of business, how many others have invested, what is their path to profitability, etc.&nbsp;If they can’t answer those basic business questions, they are likely doomed to failure as most businesses fail. Better planning isn’t just for a better life but for better businesses as well and you want to ensure they have robust and well thought out plans.For those wanting to borrow money to get through a hard time, that one is more challenging. But you should ask them what the money is needed for. Was it because they lost their job, had an unexpected medical expense, or did they get in a financial bind? You have a right to ask what they have done already to make ends meet. There are things they may not have considered.. There may be a way for them to cut expenses, sell some assets, etc. It can make for a very challenging conversation but if you approach it with sincere concern and a willingness to help them they will hopefully understand.&nbsp;In addition, to show your concern you can buy their groceries and/or make them meals and help with work around their house.&nbsp;For those thinking of giving much larger sums of money or providing assistance over any period of time, its often better to not provide them with assistance. People are tremendously capable but sometimes it’s only through adversity where the conditions exist to discover them.&nbsp; I worked with a remarkable gentleman a few years ago. He overcame stints in prison to eventually get his phd.&nbsp; A motto of his was “rock bottom will teach you things mountain tops never will”. It can be heartbreaking to see your loved ones struggle, but sometimes the nicest thing you can do is withholding financial help&nbsp;Lastly, for my clients I tell them to refer their friends and family to me and I can have an introductory conversation with them about their financial situation and provide recommendations. Any information shared with me, is confidential and cannot be shared with the referring family member, but it’s a way for them to provide their family member or friend with objective advice in private.&nbsp;TIPS, TRICKS AND STRATEGIESThe Internal Revenue Service has now made it easier to take a limited amount of money out of a traditional retirement account penalty-free. While previously you could tap your savings without penalty in more limited ways and often with more paperwork, (adoption, first time home buyer, etc), you can now take out up to $1,000 of your funds for any self-defined emergency.The $1,000 provision is different from other retirement-account withdrawal options because you can just say that you have an emergency, without specifying what it is. So you can get the money faster. It is one of several ways Congress keeps making it easier for people to use their retirement savings as emergency funds.You’ll still owe income tax on the $1,000 you take out if you don’t pay it back.ReferencesCharles Barkely - Don’t Give Money to FriendsJr Bridgemen - $600 million Dollar NBA ManWSJ - 401k LoanConnect with Jonny Westhttps://BetterPlanningBetterLife.com&nbsp;Connect with Jonny on LinkedInSubscribe to ONE FOR THE MONEY on Apple Podcasts, Spotify, Google PodcastsAudio Production byPODCAST FAST TRACK

Welcome to episode 68 of the One for the Money podcast. This is part 2 of a 2-part series on novel investment strategies. In this episode, I’ll review a novel investment strategy called factor investing.In the tips, tricks, and strategies portion, I will share a second tip regarding stock options this time regarding incentive stock options also known as ISOs.&nbsp;In this episode...Investment Factors &amp; Potential Higher Returns [1:15]Factor Investing - Passive vs Active [6:32]Incentive Stock Options [9:12]Factor investing is a strategy that chooses investments based on certain attributes or factors that historically have had higher rates of return. The assumption is that these same attributes will continue in the future.&nbsp;The First one is that historically, stocks have outperformed bonds. Since 1926 stocks returned between 8% – 10% whereas the bonds returned between 4% – 6%. If you invested $1 in 1926 and earned the bond average of 5% it would be $113 by 2023, but if that dollar earned the stock average of 9% return it would be $4269. That’s why for longer-term goals we invest in stocks because historically they give you more to spend in the future when things will cost more.The second investment factor is that smaller companies tend to grow faster than larger companies. Amazon and Apple all started in a garage and look at them now. But if people only invest in the S&amp;P500 which all of the large American companies then they will miss out on buying the Apples, Teslas, Nvidia, Microsofts when they were smaller. From 1927 through December 2023 small stocks outperformed large stocks, 55% of the time after one year, 59% of the time after 5 years, and 68% of the time after 10 years.The third factor to consider while investing is the price of the stocks you are buying. Some stocks are more expensive than others. Confusingly, this has nothing to do with the price of the stock but rather the price of the stock relative to the earnings of the company. This is known as the P/E ratio.&nbsp; On average, value stocks have outperformed growth stocks by 4.4% annually in the US since 1927. From 1926 through December 2023 value stocks were higher than growth stocks, 59% of the time after one year, 70% of the time after 5 years, and 78% of the time after 10 years.&nbsp;The final factor to consider is profitability. That may seem like a captain obvious type comment but factoring in companies with higher probability can make a significant difference for investors. From 1963 through December 2023 high profitability companies were higher than lower profitability companies, 67% of the time after one year, 82% of the time after 5 years, and 92% of the time after 10 years.&nbsp;Successful investing really should target factors that generate higher expected returns. Looking at average annualized returns going back decades, small-cap stocks have beaten large caps, value has outperformed growth, and high-profitability stocks have outgained low-profitability stocks.&nbsp;Unlike active investing or trend models, factor investing doesn’t use a crystal ball but instead is grounded in economic theory and backed by decades of empirical data. Of course, past performance is no guarantee of future results but investing based on science is way better than investing based on an active manager's hunch or predictions about the future.Tips &amp; TricksISOs are usually issued by publicly traded companies or private companies planning to go public. My tip regarding ISOs is whether you should take a higher salary and fewer ISOs or a lower salary and more ISOs and it really comes down to how much risk can you afford. If you are in your 20s or early 30s it can make sense to take a lower salary so you can receive more ISOs because you can live with roommates and because you have time to invest later, if this company isn’t as successful as one had hoped it would be. This approach can also make sense if you are much older and are on track for retirement. But if you are older and not on track for retirement then you will really want to consider taking a higher salary and fewer ISOs or a different job altogether. There are too many people risking their retirement on the hope that their one company rockets higher.&nbsp;ReferencesFactor investingIncentive Stock Options&nbsp;Connect with Jonny Westhttps://BetterPlanningBetterLife.com&nbsp;Connect with Jonny on LinkedInSubscribe to ONE FOR THE MONEY on Apple Podcasts, Spotify, Google PodcastsAudio Production byPODCAST FAST TRACK

Welcome to episode 67 of the One for the Money podcast. I am so very grateful you have taken the time to listen. This is part 1 of a 2-part series on novel investment strategies. In this episode, I’ll go over what is sometimes referred to as the borrow, spend, die strategy.In this episode...SBLOC Defined -[1:45]SBLOC in Practice -[4:58]Stock Options - Restricted Stock Units (RSUs) -[6:30]Most people are familiar with the notion of buying and selling investments. The goal when buying an investment is that it increases in value and then you sell the investment to enjoy the proceeds. But there is a strategy where you can spend without ever having to sell. This is much less complicated than it may sound when one realizes it’s not all that different from a home equity line of credit, or HELOC, for short. With a HELOC the homeowner will borrow money against their appreciated property and aren’t required to sell their home to do so.&nbsp; There is a similar option with stock market investments and it is called a security-based line of credit, or SBLOC for short. Here is how they work.An SBLOC (Securities-Based Line of Credit) is a special type of loan where you use your non-retirement investments as collateral. Just how can you use some of this newfound wealth without triggering a huge tax bill and not missing out on potential future gains? Why an SBLOC of course. These allow you to borrow against these shares using your stock&nbsp; as collateral.In fact this is the exact same strategy that many uber wealthy utilize to access the wealth formed in the publicly traded companies that they founded.&nbsp;The strategy is sometimes called the borrow, spend, die strategy. They borrow from their massive wealth, spend the proceeds and when they die some of their shares are sold to pay off the loans. Often this can lead to massive tax savings as when they die, there could be a step up in the basis at death and the taxes could be severely limited.Tips Tricks and Strategies&nbsp;RSUs (short for Restricted Stock Units) are a type of compensation given to employees by a company. They represent company shares that an employee will receive in the future. However, there are certain conditions, such as working for the company for a certain period of time or achieving specific performance goals, which must be met before the employee actually receives the sharesOnce your shares are granted and taxes paid, there is no taxable benefit to staying invested in those shares. For many investors, it may make more sense to sell all of the shares and diversify their investments or use the proceeds to pay of higher interest debt.ReferencesSecurity Based Line of CreditBorrow, Spend and Die StrategyRestricted Stock UnitsConnect with Jonny Westhttps://BetterPlanningBetterLife.com&nbsp;Connect with Jonny on LinkedInSubscribe to ONE FOR THE MONEY on Apple Podcasts, Spotify, Google PodcastsAudio Production byPODCAST FAST TRACK

What is one of the best ways a husband, wife, father, and mother can show their love financially? Hint it’s not diamond rings, cars, fancy trips, or a big house. It’s WAY cheaper than that.In this episode...Financially caring for family in case of an accident [1:15]5 factors that impact the price of life insurance&nbsp; [4:43]The right type of Life Insurance [7:08]If you died yesterday, how financially secure would your family be today, tomorrow, and for the years to come?This is an incredibly depressing thought no doubt, but that’s exactly why we should address this just-in-case scenario. Because if you love your family, you will want to make certain that they are taken care of financially if you are not here today. Term life insurance is the only instrument that can provide sudden wealth for your loved ones in their greatest time of need all for just a fraction of the cost of the wealth obtained.&nbsp;&nbsp;Term life insurance can be incredibly inexpensive far too many Americans lack life insurance. Too often you see, what I refer to as the worst type of life insurance, the GoFundMe page. But with term insurance being priced like a commodity, it really shouldn’t be this way for millions of families.Some people don’t bother with Life Insurance because they don’t want to “waste” money on term life insurance premiums. I can certainly relate because that’s the reason I never purchased term life insurance for many years.For those who worry about the cost of life insurance here are the five factors that impact the price#1 - A person’s Age - all things being equal, a 35-year-olds policy will be less expensive than a 40-year-olds#2 - A person's Gender - Men are more expensive than women. Men do stupid things and have a higher probability of death at all ages.#3 A person’s health rating - Think, BMI, smoker/non-smoker, etc ones driving record is also included.&nbsp;#4 The amount of the benefit - $2m of coverage will cost you more than $1m#5 How many years you have coverage - Getting coverage for 10 years will be less than 20 years of coverage.&nbsp;&nbsp;I must note that life insurance shouldn’t just be for the working spouse. If there is a stay at home parent they need life insurance as well. We cannot underestimate their contribution to the family. If they were to pass it would be devastating for the family and sure money would never replace their absence, it would help ease the tremendous burden so the working spouse can take the requisite time and have the means to help their family heal.&nbsp;&nbsp;Tips Tricks and StrategiesI absolutely love what I do but it wasn’t until after a lot of research that I finally found my dream career.&nbsp; This career has married things that I love, namely personal finance, education, and being able to have a positive impact on others and for that reason, I became a Certified Financial Planner in order to have the greatest impact on my clients.&nbsp; But that’s not actually, how it started out for me.&nbsp; Due to my naiveté, I joined a “financial services" firm that claimed to put financial planning at the forefront of what they did but in truth, they primarily pushed expensive insurance that the overwhelming majority of people don’t need.&nbsp; But, in my defense, it wasn’t anything like what I was promised during the interviews with the firm. I had interviewed a few actual CFP®s from the firm who spoke of the merits of being fiduciaries, a fiduciary is a professional that puts the interests of clients above their own, (apparently, this was in name only) and they in fact did not do comprehensive planning nor were they fiduciaries but the main efforts was to sell really expensive life insurance.What sort of expensive Life Insurance am I talking about; namely Index Universal Life (IUL), Whole life, and similar permanent life policies? Life insurance legally cannot be sold as an investment, but there are far too many instances where an IUL is sold as such. More importantly, they don’t even determine if these policies are in the best interest of the individual as permanent insurance is almost always sold and rarely bought.You might be wondering, are permanent life insurance like IUL or whole life so bad? The answer is yes because with very rare exceptions term insurance is all you need and permanent policies are WAY MORE EXPENSIVE and leave a person with way less wealth than other solutions. Jeremy Schneider compares investing in an IUL policy vs an index fund and the results are remarkable. He showed how an IUL policy could erode over 80% of your wealth compared to investing directly in an index fund.Some say I want whole life insurance because I don’t want to waste the money. You hope it’s a waste because it’s insurance.&nbsp;ReferencesIs Whole Life Insurance a Good Investment? - NerdWalletThe Statistic Whole Life Salesmen Don’t Want You To KnowIs IUL a Scam? Yes.Jeremy Schneider - Founder - Personal Finance Club

Welcome to episode 65 of the One for the Money podcast. There are two huge risks when it comes to retirement, and they are contradictory to one another. In this episode, I’ll share those risks as well as a strategy to address them.&nbsp;In this episode...Retirement is a Miracle [1:13]The first biggest risk in retirement&nbsp; [2:25]The second biggest risk in retirement [2:44]Enjoying more in retirement through planning [11:29]Before we talk about these risks, it’s helpful to first appreciate the absolute miracle that is retirement.&nbsp; A hundred years ago, three-quarters of the world’s population lived in extreme poverty. Today, it’s less than 10%.&nbsp;Interestingly, the two biggest risks retirees will face are contradictory to one another. The first is the most obvious one, running out of money. That’s really everyone’s biggest fear. But since people are so focused on the fear of running out of money they ignore the second biggest risk in retirement which is dying with WAY too much money. But, with the right retirement income strategy, you can spend WAY more money WITH your loved ones all while having a much more fulfilling retirement, and still leave your loved ones with a generous inheritance.&nbsp;Sadly way too many people go into retirement without a plan and just wing it instead. In episode 62 of this podcast, I shared the regrets of retired Americans and how more than 6 in 10 retirees say they change their retirement if they had the opportunity.&nbsp;I believe it is helpful to think of your approaching retirement as summiting your financial Mount Everest. Taking withdraws from your investments in retirement is like climbing down which requires even more guidance because the financial mistakes in retirement are WAY more costly, because when you are still working, you have the time and income to overcome most financial mistakes, but not in retirement.&nbsp;For these reasons, you need a plan that is designed to address your specific retirement needs. But not any plan will do because having the RIGHT plan is JUST as important as having a plan at all. Way too many people think they have a retirement plan when all they have is an expensive product sold to them by some salesman. Others may have a very “light” plan by following a certain rule of thumb believing that a one-size-fits-all all plan will fit their specific situation. Examples would include the&nbsp; 60/40 rule (having 60% invested in stocks 40% invested in bonds, and selling which is up for the year to provide the income. Or there is the 4% distribution rule. Neither of which accounts for how your account is invested or when is the best time to take social security or how to mitigate taxes.What people need instead is a tailor-made income model to provide an inflation-adjusted income throughout their retirement.For this reason, I create and implement a retirement income distribution plan for clients that accounts for all their income sources, pensions, social security, and rental income, and consequently we are able to maximize their income spending so that they can achieve wonderful goals throughout their retirement. With the properly structured retirement income models, we are able to help clients spend (i.e. enjoy) more in retirement.Having a dynamic retirement Income model puts clients at ease and helps them enjoy retirement. They don’t have to fear running out of money or dying with too much. aspects of the strategy include investing money differently based on when you plan to spend this money.I hope I’ve been able to convey that life in retirement turns out WAY better when you have a plan and that is especially the case when it comes to retirement income planning. Because with a plan that is designed and aligned with your specific goals, you won’t run out of money and just as tragic won’t die with too much.&nbsp;Tips Tricks and StrategiesEarlier in the podcast, I mentioned how one should review retirement as summiting a financial Mount Everest and that taking withdraws from investments in retirement is like climbing down which requires even more guidance because the financial mistakes in retirement are WAY more costly which is why you want a Sherpa to Help Guide You To and Through Retirement.Certified Financial Planners are the Sherpas that guide people through the storms and beautiful weather up and down the mountain. Adjustments will need to be made as you make your way up and down the retirement mountain.&nbsp;With the right financial planner, you can feel confident and excited about the years and decades ahead in retirement.&nbsp;ReferencesWorld Population Living in extreme povertyConnect with Jonny Westhttps://BetterPlanningBetterLife.com&nbsp;Connect with Jonny on LinkedInSubscribe to ONE FOR THE MONEY on Apple Podcasts, Spotify, Google PodcastsAudio Production byPODCAST FAST TRACK

Welcome to episode 64 of the One for the Money podcast. I am so very grateful you have taken the time to listen.While investments, taxes, estate plans, risk management and cash flow are critical aspects of a financial plan, they won’t mean anything if they aren’t aligned with what matters most. In this episode I’ll share how one can align their financial plan with exactly that.In this episode...Where does Happiness come from [1:13]Financial success and relationships [5:41]Experiences or things, what will you remember most? [12:15]A better life is a result of actions you have taken via better planning and when it comes to financial planning it’s imperative that the focus is on what is absolutely essential for happiness. The pursuit of happiness has been a recurring theme on this podcast and I have encouraged clients and listeners to pursue the things that ultimately lead to happiness. The Harvard Study of Adult Development started in 1938 has been investigating what makes people flourish. The study was launched as a result of the generosity of WT Grant and as a result is sometimes called the Grant study. and his goal for the study, using his words, was to “help people live more contentedly and peacefully and well in body and mind through a better knowledge of how to use and enjoy all the good things that the world has to offer them.”&nbsp;&nbsp;It’s the longest in-depth longitudinal study on human life ever done, and it’s brought the researchers to a simple and profound conclusion: Good relationships lead to both health and happiness. it’s not career achievement, money, exercise, or even a healthy diet that brings happiness. Rather the most consistent finding they found through 85 years of study is that Positive relationships keep a person happier, healthier, and help a person live longer. Those who scored highest on measurements of "warm relationships" earned an average of $141,000 a year more at their peak salaries.If relationships are the most important criteria for a long and happy life, than surely the most meaningful relationships have the most importance, for example, one’s marriage or one’s relationship with their children.&nbsp; Whether it’s right or wrong, good or bad, money has a significant impact on these relationships.I talk with many clients and most say that they would rather spend more time with their family then have a bigger inheritance. For this reason, I encourage my clients to spend their money having family get togethers, because this is what will help them the most. But it’s more than just having good memories, people that have better relationships do better in many facets of life, including money.&nbsp;The Harvard Study of Adult Development noted that the warmth of childhood relationship with mothers matters long into adulthood: Men who had "warm" childhood relationships with their mothers earned an average of $87,000 more a year than men whose mothers were uncaring.Interestingly, while the poorer participants had shorter lifespans than the Harvard men (attributed to more dangerous work conditions, and poorer access to health care) when it came to happiness, the inner-city men were just as happy as the Harvard men, and their families were just as happy and in some cases, happier.Tips Tricks and StrategiesI will answer the question on whether one should spend money on experiences or should they spend it on things, and provide a strategy to help you decide. Most of the research shows that experiences can provide more joy and actual things. For instance, while a vacation might only last a week, a new car can be driven for many years. However, a 'thing' might last longer physically, the enjoyment of it and the memories it creates can wane over time. On the other hand, experiences act more like appreciating assets, in that the initial experience might be short, but the value of it tends to increase over time. From my own experience that has been the case. Throughout the years, I’ve asked my kids what they remember most and invariably it’s the trips we took.ReferencesGood Genes are nice, but joy is betterWhat Makes People Happy? Decoupling the Experiential-Material ContinuumThe Grant StudyLessons from the world’s longest happiness studyConnect with Jonny Westhttps://BetterPlanningBetterLife.com&nbsp;Connect with Jonny on LinkedInSubscribe to ONE FOR THE MONEY on Apple Podcasts, Spotify, Google PodcastsAudio Production byPODCAST FAST TRACK

The Case of Optimism - Part 3 Each year I record one episode of this podcast that makes the case for why we should be optimistic. This is part 3. (Click here for part 1 and here for part 2) There are a lot of disturbing events and trends that are happening in the world at present and yet despite all of these concerns I’ll argue the case for why we should remain optimistic about our future.In this episode...The climate is actually great [6:18]How Happy Are Americans? [14:17]How Americans are missing out on billions [16:23]This episode is airing in June of 2024 and we are starting to see some market volatility of late. That can create a lot of fear in the hearts of investors. Add to that a war that continues to rage in Europe, Add to that a war that continues to rage in Europe, and finally add to that a presidential election this November where a solid majority of people overwhelmingly don’t want either candidate to be president. There is a lot we can worry about but yet despite all of these concerns we really should remain optimistic. Let’s look at some of the evidence as to what’s so great:The first is to consider the state of democracy. We are in an election year where we are told that our democracy is at stake, and you get that from leaders and followers of both political parties. For this reason the upcoming presidential election is one of investors chief concerns. there certainly has been more challenges to the pillars of democracy in the USA and also in other countries around the world but it’s much wiser to step back and take a longer view of the state of democracy. In 1976 just 23% of countries were legitimate electoral democracies but it’s 51% now. That is remarkable progress.&nbsp;The brutal terrorist attacks perpetuated by Hamas on October 7th, were absolutely sickening. Iran fired 170 drones, more than 30 cruise missiles and more than 120 ballistic missiles but due to the marvels of technology and the help of allies 99% of them were intercepted or eliminated.I recently read the book “Unsettled” by Steven E Kooning, The subtitle of the books is this “What climate science tells us, what it doesn’t, and why it matters”. Dr. Kooning notes that heat waves in the US are now no more common than they were in 1900 and that the warmest temperatures in the US have not risen in the past 50 years. Weather-fixated television news would make us all think that disasters are getting worse. They’re not. Around 1900, 4.5 percent of the land area of the world would burn every year. Over the last century, this declined to 3.2 percent. In the previous two decades, satellites have shown further decline — in 2021, just 2.5 percent burned.Here’s additional details on how far we have come:&nbsp;Global poverty rates have been reduced by 50% in the past 20 years.&nbsp; A hundred years ago, three-quarters of the world’s population lived in extreme poverty. Today, it’s less than 10%.&nbsp;Human life expectancy has doubled over the past century, from 36 years in 1920 to more than 72 years today.&nbsp;Americans fell to 23rd place in happiness, down from 15th a year ago, according to data collected in the Gallup World Poll for the World Happiness Report 2024. In the U.S., self-reported happiness has fallen in all age groups, but especially among young adults. Americans 30 and younger ranked 62nd globally in well-being. If you want to know how great you have it, you should really travel more to third world countries. What we have here in America, especially the freedoms provided by the inspired constitution are the envy of the world. There are 7.9 Billion people on planet 🌎 yet only 4.2% of us live in the USA&nbsp; 331,449,281. It’s a remarkable privilege but it’s only appreciated if you travel.Tips Tricks and StrategiesI will share a tip on how to earn more interest on your savings but oddly many Americans curiously are not doing so. This information is courtesy of a recent article in the WSJ entitled&nbsp; The $42 Billion Question: Why Aren’t AmericansDitching Big Banks? Americans are missing out on billions of dollars in interest by keeping their savings at the biggest U.S. banks.I’ve helped at least a dozen clients and even more non-clients transfer some of their deposits to online banks accounts earning as much as 5% which are also FDIC insured. These accounts were setup in as little as 20 minutes and they easily transferred funds between their traditional account and their new online bank account.&nbsp;ReferencesGood News, the World Is Getting BetterU.S. Carbon (CO2) Emissions 1960-2024Climate Change Indicators: U.S. Greenhouse Gas EmissionsAmerican Airlines Announces Agreement to Purchase Boom Supersonic AircraftRidley: Good News Is Gradual, Bad News Is SuddenIs humanity doomed? Five ways the world is actually doing better - in dataThe World has made spectacular progress2022 Was One of the Worst Years Ever For MarketsThe World Really Is Getting BetterThe $42 Billion Question: Why Aren’t Americans Ditching Big Banks?Why Climate Alarmism Hurts us AllConnect with Jonny Westhttps://BetterPlanningBetterLife.com&nbsp;Connect with Jonny on LinkedInSubscribe to ONE FOR THE MONEY on Apple Podcasts, Spotify, Google PodcastsAudio Production byPODCAST FAST TRACK

The Top Regrets of Retired Americans and How to Avoid Them - Ep #62In episode 61, I&nbsp; shared the top financial regrets of Americans and how to avoid them but in this episode, I’ll share the top regrets of Retired Americans and how to avoid them. The future is unknown so no one can plan their retirement perfectly we will all have some regrets, but it’s important to be aware of what the most common regrets are for retirees so we can take action now to avoid them in the future. In the tips, tricks, and strategies portion, I will share a tip regarding how to spend more in retirement.&nbsp;In this episode...78% of retirees wish they would have saved more [2:10]Retire Earlier [13:44]Dynamic Retirement Spending Strategies [15:59]More than 6 in 10 retirees say they would go back and change their retirement planning if they had the opportunity. This comes courtesy of a survey conducted by the Lincoln Financial Group and their results reveal many of the top regrets of retirees. businesswire.com referenced this survey and also shared&nbsp; 10 ways today’s retirees say they would have planned differently.Save MoreAccording to an annual study by the Transamerica Center for Retirement Studies, a full 78% of retirees wish they would have saved more. The majority (70 percent) would advise changing savings habits by saving or investing more or earlier. Other savings regrets included not making the most of their 401(k) plan, not enrolling in the plan early enough, and not saving the maximum amount allowed by their plan. What if I told you that if you invested $5000 per year for 40 years from age 25 to age 65 ($200,000 total) you could then withdraw ~$140,000 each year for the following 30 years?&nbsp;Not having a plan for retirementAccording to a Transamerica study it found that only 18% of retirees have a written plan. This is one of my favorite things to do with clients when we plan financially. As we enter the data in their financial plan, and add their goals and wishes, it shows them everything that is possible. It’s especially great when I am able to surprise clients by telling them they can retire much sooner than they thought they could.Plan more carefully for the fun they want to have in RetirementTwo-thirds of pre-retirees (68%) have not completed a budget of anticipated income and expenses, according to Fidelity Investments. With the proper financial plan, I can show how they can spend much more in the earlier years, while they have the best health to do so. It’s highly unlikely you will run out of money.In fact, overall, the retiree finishes with more than double their starting wealth in a whopping 2/3rds of the scenarios, and is more likely to finish with quintuple, or 5 times,&nbsp; their starting wealth than to finish with less than their starting principal.Plan For Health CareMany people are surprised when they hear that Medicare does not cover everything. The annual expenses for a couple in retirement are around $12,000. One of the best things a person can do to prepare for healthcare costs in retirement is to exercise regularly. In episode 29 of this podcast I shared how many retirees can have a healthy wealthy and wise retirement.Learn more about Personal FinanceA full 66% of retirees wish they were and had been more knowledgeable about financial planning.Plan and make moves to protect money from taxesEd Slott the tax guru calls pre-tax retirement accounts a ticking tax time bomb. Every spring I hold strategy meetings with my clients that focus on strategies that ensure they don’t pay more taxes than they are required. In episode 15 I share about the ticking tax time bomb in retirement.Anticipate the unexpectedwe don’t have to look back too far to think of an example of the unexpected, namely Covid. Many retirees had planned to travel during 2020 and 2021 only to see those plans scuttled by the reactions to the pandemic.Plan for IncomeIt can be challenging on how to turn your savings into income but once you do it can provide peace of mind.&nbsp;Have less DebtOne-third of retirees regret not paying off debts sooner. In episode X I explained whether you can retire with debt.Retire EarlierIn episode 26 I shared about mini-retirement and how these can be a great way to enjoy moments of retirement sooner. Also, I shared in episodes 50 and 52 about the book Die with Zero whose title belies the true message of the book. I will always remember when a dear friend let me know after her husband had passed away in his 50s, that she was so relieved that they hadn’t waited to go on adventures and had went on many when they were younger.Tips Tricks and StrategiesWhen it comes to retirement spending there really are two huge risks which are: running out of money and dying with too much money. To combat these conflicting risks I use a dynamic distribution strategy that allows clients to maximize their level of spending but, also ensures they won't run out of money.ReferencesRetirement Regrets: Top 10 Things Retirees Wish They Would Have Done Differently7 Retirement Mistakes You Will Regret10 Retirees Share Their Biggest RegretsOver 60% of retirees wish they could get a “do-over”Connect with Jonny Westhttps://BetterPlanningBetterLife.com&nbsp;Connect with Jonny on LinkedInSubscribe to ONE FOR THE MONEY on Apple Podcasts, Spotify, Google PodcastsAudio Production byPODCAST FAST TRACK

In this episode, I’ll share the top 3 financial regrets of Americans and how to counteract them. No one manages their finances perfectly so we all have regrets, but it’s important to be aware of what the most common ones are so we can take actions to avoid them.In this episode...Emergency Funds [03:15]Investing for Growth [08:02]Buying a Home [9:57]Unconventional emergency fund options [14:25]Now no one is perfect when it comes to financial decisions. Like everyone else, I’ve certainly made my fair share of financial mistakes which I chronicled in a few different episodes of this podcast. In episode 18 I shared about a time when I sold a stock for a 50% loss because I succumbed to fear during the Great Recession only to see that stock since that time, rocket over 11,000% higher. You heard that right, I missed out on an 11,000% return. In episode 43, I shared the financial mistakes I made as a young adult and what I wished I had known about money sooner. Having financial regrets is a normal part of learning and growing, but it’s important to be aware of the biggest regrets so we can take actions preemptively to avoid them.So just what are the most common regrets of Americans so we can avoid them. These insights are courtesy of the personal finance software company Quicken, which surveyed about 1,000 Americans and found that a whopping 80% said they have financial regrets.&nbsp;The top three regrets were not having a big enough emergency fund (mentioned by 28% of respondents), not investing aggressively enough (25%) and not buying a house when they were younger (22%). A few of the other regrets mentioned were lending money to a friend and family member and not investing in stocks.&nbsp;Emergency FundAs a Certified Financial Planner™, financially speaking I know that few things can provide the peace and security that an emergency fund can provide. An emergency fund is way more than for just emergencies, instead it’s financial insurance allowing you to have way more freedom in how you choose to live your life. For example, having an emergency fund allows you to quit a toxic workplace. I recommend having three months’ worth of expenses in savings if both spouses work and if you are single or only one spouse works, then you will need 4-6 months worth of expenses saved. Sadly, far too many Americans don’t have emergency savings as nearly 6 in 10 Americans could not come up with $1000 in the event of an emergency. Far too many think their credit card is their emergency fund.How do we prevent this regret and ensure we have an emergency fund. The first step is to have a budget and ensure that you have extra money left over each month. The next step is to set aside these extra funds into an account that you don’t regularly access.Not Investing For GrowthThis had to be tied to the fact to some painful emotional memories. Maybe they succumbed to fear in the moment and sold stocks only to see the stock market soar higher. Here is why it’s so important to invest with a higher allocation to stocks. For nearly a century, stocks have provided returns of nearly three times that of inflation. As an asset class, they have been the greatest generator of effortless wealth in history. Since 1926 stocks returned between 8% – 10%&nbsp; where as the bonds returned between 4% – 6%. The best way to counteract this fear of not investing aggressively enough, is to ignore the noise and stay invested.&nbsp;Buying A Home&nbsp;The third biggest regret for American’s was not buying a home when they were younger. This one seems a bit unfair as there can be a lot outside of ones control when it comes to purchasing a home. Prices shot up by 40% in the two years of Covid and inventory is at historic lows leaving too many buyers and too few sellers so these higher prices aren’t decreasing. My recommendations to these clients have been as follows. First of all, be sure your house savings is in a high-yield savings account. There are online accounts paying over 4.5 and in some cases over 5%. You don’t want to lose out to the silent thief of inflation. The next recommendation is to confirm that they plan to live in their home for at least the next 10 years. Given the closing costs, realtor fees, and other expenses associated with the purchase of a home a general rule of thumb is that you should own the home for 10 years. My final recommendation is that they should feel proud that they have worked so hard to have so much saved and that as they exercise patience they will be rewarded when they find the right home for the right price.&nbsp;TIPS, TRICKS AND STRATEGIESWelcome to the tips, tricks, and strategies portion of the podcast where I will share a tip regarding unconventional emergency fund options, these unconventional emergency fund options can help in a pinch.401k loan - Many 401k plans have a loan provision that allows participants to take out 50% of their account balance or $50,000 - whichever is less. You will need to pay back the loan over time with interestIRA - Indirect Rollover 60-day rule - Most rollovers happen as direct transfers that go from one retirement account directly to the other. There are also indirect transfers where the individual owner of the retirement account takes the money out of an IRA that they can personally reinvest into another IRA, or they can reinvest back into the same IRA without any taxes or penalties if done within 60 days.Roth 401k/IRA Contributions - A Roth is a retirement account to which you contribute after-tax funds. What many people don’t realize is that because you have already paid taxes on these contributions, the IRS allows you to withdraw the contributed sums (not the gains) at any time without taxes or penalties.References80% of Americans Say They Have Financial Regrets - Here are the Most Common OnesHow to Use Your Roth IRA as an Emergency FundA $1,000 Emergency would push many Americans into debtAbout Half of Lower-Income Americans Report Household Job or Wage Loss Due to COVID-19UPS to Offer Employees a Way to Save for EmergenciesConnect with Jonny Westhttps://BetterPlanningBetterLife.com&nbsp;Connect with Jonny on LinkedInSubscribe to ONE FOR THE MONEY on Apple Podcasts, Spotify, Google PodcastsAudio Production byPODCAST FAST TRACK

WARNING - Why Taxes Are Going Higher for EveryoneThis episode is airing on April 15th, our tax filing deadline and a key aspect of my financial planning practice is to identify and implement tax-saving strategies for my clients. In this episode, I’ll share why it’s almost certain that everyone’s taxes will be going higher in the future because of our annual federal deficit and our cumulative national debt.In this episode...The Government Spends Worse than a Drunken Sailor [3:10]Tax Burdens by Income Level [07:12]Possible revenue streams for the US Government [11:02]Tax Saving Strategies [15:24]The National Debt&nbsp;The federal government of the United States has an annual budget. It’s the set amount that the Federal government spends throughout the year. The amount they are currently spending is much more than the “income” they receive from individual and corporate taxes. In the Calendar Year of 2023, the federal government spent $6.3 trillion but only collected $4.5 trillion in taxes. Just what happens when you add up all of this overspending year after year? That’s called our national debt. Right now that total is over $34Trillion dollars. I shared more in episode 33 of this podcast entitled Time to Pay the Piper. Our debt is steadily climbing at over $34T as of this recording and is expected to be over $5oT by 2032. you can see more at the website usdebtclock.org.&nbsp;We must get our deficits lowered because the interest costs are set to become enormous. In 2028, Federal tax revenue is expected to be $6.1T, actual spending is expected to be $11.7T and just the interest payments on the debt will be nearly $2.7T a year. In order to reduce our debt and the interest we pay on it,&nbsp; we will need to stop adding to it each and every year with the government's extra spending. &nbsp; As John Mauldin says: “Yet people continue to say we could balance the budget and pay down the debt by“making the rich pay their fair share.” I wish it were that easy. I really do. But sadly, as I’ll show you, it’s not.”Tax LoadHere’s how it looked in 2020 (the latest available data from the IRS courtesy of the Heritage Foundation).The top 1% earners in America, those that earn over $548k/year earn 22% of the income and pay 42% of the income taxes received by the Federal government.The top 5% earn more than $220K 38% and pay 62% of the taxes paid to the government. The top 10% earn more than $152K earn 49% of the income and pay 73% of the taxes paid to the government.The bottom 90% (those that make less than $152K) earned 50% of the income and paid 26% of the taxes.The US deficit will rise by an average of about $2 trillion/ year for the next decade.As John points out, to account for the extra $2 trillion of spending we will need $2T more of tax revenue. If we raised taxes by about 50% on everybody, from the bottom 1% to the top 1%, it would only get us $850 billion which is a little less than half the way there. Clearly, we don’t have enough money just to match the current projected spending of the government. Instead, they have to reduce spending and raise taxes on individuals and corporations and likely also look for additional sources of tax revenue because income tax by itself won’t cut it. The most likely option in my opinion is a national sales tax or value-added tax.Suffice it to say, we and really our children are in a heap of trouble given our debt obligations. We’ll eventually have to pay the piper for our overspending. What exactly happens is uncertain but I believe what is almost certain, is that our taxes will be going higher to pay for it in the future.Tips Tricks and StrategiesIn past episodes, I’ve outlined numerous ways to save money on taxes. The Augusta rule, where you can rent your primary residence for 14 or fewer days each year and all of the money earned is tax-free. For business owners, it’s even better as they can rent their house to their business and get a deduction on the expense from their business and transfer-tax-free income to themselves. See episodes 8 and 9 for the details. I’ve also discussed Roth contributions and when they make the most sense (see episodes 1 ), Roth conversions (see episodes 12, 26, 49), and Roth IRAs for your kids (episode 6). I also discussed Traditional and 401k contributions (Ep 1). Defined benefit plans where I’ve helped several clients reduce over $250k in a single year from the highest tax rates (were highlighted in episode 7) and&nbsp; Health Savings Accounts have figured prominently as well (see episodes 2, 8, 9, 26, 29, and 59). I also discussed tax loss harvesting and its incredibly powerful and less well-known sibling, tax gain harvesting (see ep 26).&nbsp; In episode 34 I shared about Net Unrealized Appreciations or&nbsp; NUAs which is a significant tax savings that could be hiding in your 401k if you own company stock.&nbsp; In episode 51 I shared tax-advantaged ways to give to charity through Donor-advised funds, Qualified Charitable distributions as well as donating appreciated stock and a tax saving strategy to stack contributions.ReferencesUS Budget Gap widened During Year on Rate Rise, Revenue dropResponding To Critics of Rolling Back the Retirement Tax BreakDo the Rich Pay Their Fair ShareConnect with Jonny Westhttps://BetterPlanningBetterLife.com&nbsp;Connect with Jonny on LinkedInSubscribe to ONE FOR THE MONEY on Apple Podcasts, Spotify, Google PodcastsAudio Production byPODCAST FAST TRACK