Welcome to Retirement Unpacked with Al Smith, owner of Golden Eagle Financial. You want a retirement plan that alleviates your fears about the future, so you know your money will last. As a chartered financial consultant, Al Smith will help you find a balance between the risk and reward of the market and the safety of your retirement income. And now, here’s your host, Al Smith. Welcome to another program of Retirement Unpacked. I want to thank you for tuning in. I believe I have some good information for you again this afternoon. But I want to talk about one concept, one habit that some of us have that I know I occasionally do it myself. I try not to do it, but it’s called procrastination. And I know I’ve heard the joke in the past, the group that meets periodically, the procrastinators anonymous, we’re going to have their meeting, but they just decided to put it off. Wow. But in any event, procrastination, when it comes to doing things that maybe you know you should do as far as your finances, that can have a significant effect. I have crunched some numbers before. And when I look at the difference of people beginning to save for retirement, maybe at age 28 versus age 30. And I might show people setting aside, oh, two, three, four, five hundred dollars a month for a long period of time. And the difference in starting a couple years earlier, even saving the same amount of money is truly significant to the point where by the time they’re 65 years old, the person who starts a year or two earlier will have a significantly greater amount when it has a long period of time to marinate and to grow and so forth. So it’s like the Chinese proverb the best time to plan a tree is 20 years ago. But in any event before I dive into my main topic, I wanted to talk a little bit about encounter I had recently where some people asked about, well, an individual asked about social security and the individual had participated in any still working in an economy where a great deal of his income was the result of cash and things of that nature, a lot of tips and things that don’t show up on a W2. It’s very, you know, it’s totally legitimate, but it’s not this typical go to work for the Postal Service or UPS or exo-energy and you get your W2 and your statements and your retirement and so forth. And this gentleman was married and he was a little bit unsure about if he was able to collect his wife’s social security. So we sort of went over that and the gentleman was very happy to hear the result because if you are married to someone for 10 years or longer and that person passes away, if your own social security benefits are limited, you can collect the full benefit of your deceased spouse and how much you get in that benefit will depend, well, obviously on what the deceased spouse’s benefit was, but it will also depend on the time at which you begin collecting it. I think it’s around age 60 for a deceased spouse, but if it were postponed all the way to full retirement age, which is between 66 and 67, it would be substantially greater between 25% and if it were postponed to age 70, it would be a significantly greater amount. So those are some things to think about. Now I know there are a lot more people who are probably divorced than people whose spouse passes on before they retire and with that there is a benefit also. There are some caveats to that in order to collect social security from a spouse with whom you were married. I believe you have to be married. And I don’t believe I’m certain you have to be married to that person for 10 years or longer. And I think that other party has to file for social security himself or herself first. And of course the amount you get will be based not only on how much the spouse earned, but also if that would be better than collecting your own social security benefit from your own record of earnings. They’re entitled to 50% of an ex-spouses social security, but you cannot re-marry because that would negate the benefit so to speak. And the other thing that’s interesting about this, if someone had been married three times and each of those marriages lasted 10 years or longer and then this person retires when those three ex-spouses retired, each one of them would be able to collect 50% of his primary social security amount that he would be eligible for or she would be eligible for between age 66 and 67. And of course depends on what the other party was collecting and the amount also depends on what age you would file for that benefit. So just a few notes about social security because that’s for many people that’s a significant part of retirement and it needs to be incorporated in our planning. If you haven’t sat down with an advisor to take a look at not only your social security, but if you’re on track with respect to the saving you’re doing for retirement, I would highly encourage that. You can reach me at my office, 303-744-1128 and there’s never any charge for an initial consultation and often when we have done initial consultation, there’s a lot of things that we remember that people may or may not have known about so to speak. So that’s quite important. The rest of today’s show, I have a special guest on and I think you’d all heard of him. He’s a published author. He is the author of 18 Holes to Retirement. His name is Al Smith and he has a new book out. The book is titled The Christian Path to Retirement. And before we interview Al about the Christian Path to Retirement, we’re going to ask him a little bit about his previous book, 18 Holes to Retirement. Well, thanks for joining us, Al. Well you’re welcome and a little bit about my previous book. I enjoy golf. I’m not very good at it, but I thought a little bit about some of the similarities about planning for retirement and the challenges of playing golf. And I incorporated those two together. There’s a younger man playing golf with an older man and they both work at the same company. The younger man is like 30-ish and the older man is landing the plane for his retirement. So he’s in the final few months of work at the same company where they work. And the book is essentially about their golf game and the other half of the book is split kind of half and half. The other half of the book is about the questions the younger man asks, the older man about what kinds of things he is doing as he’s making that transition from working to retirement. And the older gentleman says that he has an advisor that he and his wife have worked with for a number of years. And a lot of things that they had concerns about were addressed by their advisor, which I found to be very interesting. It makes the book interesting. What’s also interesting is that the younger man, he hits the ball a long way, but he sometimes gets in trouble. The older man hits it not as far, but he stays out of trouble and he probably scored a little bit better. The next book I wrote is called The Christian Path to Retirement. And I started working on this. Gosh, I think it was as far back as last spring. And I would put together information. And now I would get busy with my business and then return to it and so forth. And I decided over the summer, especially as I got later in the summer, that to release it. And essentially the book has several different phases. And I’ll read a little bit about to whom the book is dedicated. It’s dedicated to all my clients with whom I’ve had the privilege of knowing and doing business. It’s been a blessing learning something from each one of them. And I also want to thank them for allowing me to share much of what I’ve learned with the readers of the book, which is available on Amazon. It’s titled The Christian Path to Retirement. I will have some hard copies very soon that I’ll be able to give out to people who want to have a meeting with me in my office. And if that is you, my number 303-744-1128. And in the introduction, I kind of point out that as Christians we’re not really promised comfort or fulfillment or peace or an easy life after we leave the workforce. But we’re kind of directed to learn what God would have us do once we build up a nest egg and move beyond our working lives. And the book basically describes some helpful ideas and things that would be good to know that go way beyond a bucket list or a list of new hobbies or activities that you might enjoy as you move closer into retirement. And essentially the path to a comfortable retirement, it has some common elements for everyone. And for example, people like myself who provide guidance and encourage people to maximize their 401k contributions and things of that nature. But essentially certain guidelines that we can follow that would make our retirement as Christians better, which is pretty much what the book guides into. And it talks quite a lot about some of the very basics in financial planning and retirement planning. Some of those same basics are included in my previous book, “Aceen Holes to Retirement.” But it’s put together in a little different fashion as we read the Christian path to retirement. Because I put it in the context of how we want to live as Christians and how our lives are guided not only by our own discipline, but what God would have us do as we move through our lives and make that transition into retirement. And as we move further, we talk about preparation for retirement. And essentially with stock market volatility and increased life expectancy and so forth, it’s pretty important to save almost sacrificial. And I think that’s quite important as we get closer to retirement. And I also want to make sure that the phone I’m using has not died because it’s a phone and it’s been making some noises so I’m hoping that everyone can hear me because we have some good information. “Ace Myth of Golden Eagle Financial” as a fiduciary will act in your best interest. Many people misunderstand that it is critically important for your financial advisor to be a fiduciary. Like Al Smith, with retirement planning you won’t know you have problems until it’s too late. That’s why you need Al’s extensive knowledge and years of experience to strategize with you, taking into consideration your individual circumstances. And you’ll have Al’s cell phone number. If you have a concern or question no need to press one for English, just call him personally. If you need to make a change or have a question about something, you can reach him directly. Most importantly, financial advisors are typically fee-based. Al doesn’t charge anything up front. Rather an industry standard rate based on your portfolio’s performance. So there’s no upfront cost. Find out more with a free consultation. You can reach Al by clicking on “Golden Eagle” on the klseradial.com Advertisers page. Investment advisory services offered through bookstone capital management LLC are registered investment advisor. BCM and Golden Eagle Financial Limited are independent of each other. Insurance products and services are not offered through BCM but are offered in soul through individually licensed and appointed agents. Welcome back to retirement unpack. And I was interviewing myself about my new book, “The Christian Path to Retirement.” I was in that segment of the book where we talked about preparing. And one of the most important components about preparing is starting early. At the beginning of the show I talked about procrastination. Somebody who starts saving pretty heavily at age 28 will have a significantly larger nest egg than someone who starts only a few years later. So I think it’s highly important that people who work for a big company are they maximize their 401k, not necessarily with the largest amount available but at the very least the amount that your company matches. And if your company doesn’t match I still recommend you participate but possibly not to the very maximum. Because people can also participate and establish a 401k and even one to their spouse. And if people are younger I highly recommend that and this is in the book that the IRA that they start at a younger age be a Roth IRA. Because then you are paying the tax ahead of time and do you want to pay tax on your contribution which may be $7,000 a year which is the maximum right now. But if that 7,000 grows as we hope it does that could end up being 30, 40, even 50,000 because of compound interest. So do you want to pay the tax on the 7,000 or on the 50,000? So that’s a pretty easy question so to speak. The other major thing is that what we talk about as people get closer to retirement is social security which I talked about earlier in the program and essentially social security for many people is a significant amount of their nest egg and their retirement income. It’s not really a nest egg because you don’t have a lump sum social security benefit. You have a lifetime income which is like a pension or an annuity. And the other thing I talk about as we prepare people to get closer to retirement when we talk about having more of our income be tax free. So that not only means contributing to a Roth IRA but it may mean if you have a traditional IRA or a 401k that over time you convert that to Roth. For a couple of reasons, the obvious reason is then the income you’ll receive from it is tax free. But as you approach retirement and you file for social security if a great deal of your income is tax free or not taxable then very little if any of your social security will be taxed. On the other hand if you had an enormous IRA or 401k or an extremely healthy pension then a larger part of your social security up to 85% will also be taxed. And in my book the Christian Path to Retirement we give an example of somebody age 60 if he converts a $200,000 IRA and pays the tax right out of that he’d only have about 160,000 left if he’s in the 20% bracket. But then if he lives into his 80s that remaining amount of money can grow actually to $800,000. But the individual has only paid tax on the 200,000. So just like I mentioned earlier it’s the concept of tax on the seed rather than the harvest. The transitional phase of our path to retirement involves moving from the workforce to retirement. And there’s a lot of things to think about beyond filing for social security and rolling over your 401k and so forth but there are some things to think about beyond the financial picture and that is how do you want to be spending your time, what do you want to be doing and some of the financial things include rolling over your 401k. Because once you roll that into an IRA you have an enormous number of choices. You can have that in an investment account, you can have part of it in an annuity. You could have it in precious metals. You could even have it in real estate which I don’t recommend once people are in retirement because it involves administrative costs in the rules for an IRA in real estate when it comes to taking distributions. The rules make it a lot more rigid than let’s say an annuity or a retirement account or even something in the bank. And so for that reason I would recommend some of the more traditional places for your IRA and you can have more than one IRA. You could have part of your IRA in an investment account, part of it in precious metals and even part of it in a money market. The advantage there is you can have some of it your mark where it’s in a little safer account so to speak. Some other things to think about is people make out transition into retirement is taking a look at your expenses and your budget. A lot of people I’ve worked with who have very healthy incomes don’t necessarily use a budget because they live well within their means and the amount they spend each month is substantially lower than their incomes and for that reason they don’t necessarily use a budget but once that high income from a good paying job goes away then I think it’s extremely important to sit down and look at what your retirement budget is going to be like. Some people make choices of moving relocated to be closer to children or grandchildren. Some people make choices of just moving somewhere for a lower standard of living and I think that is not pardon me I didn’t mean a lower standard of living. I mean a lower cost of living. We don’t want to have a lower standard of living in retirement but certain parts of the country it’s clearly less expensive. One thing I would highly recommend is if someone moves somewhere where they have not yet lived before then I would suggest renting for the first six months or here because two reasons that way you’ll know what part of that community you want to live in and you’ll also learn if you even want to live there at all. And so that’s really significant as people make that transition into retirement and the other thing I mentioned is how you decide you’ll be spending your time. Many years ago and I read this statistic IBM Corporation had highly compensated executives and they worked right up to age 65 which used to be the age for social security and so forth. And what IBM discovered is that many of their highly compensated hard working executives once they retired they died with an average of time after that. And what they discovered is part of the reason is they had not really planned of what they were going to do in retirement. They had adequate savings and they may have even had a pension at that time but they hadn’t planned how they would be spending their time, what they would be doing. They didn’t plan for any hobbies, activities, specific travel or how they could give back to their local communities and churches and things like that. And I think it’s important not to just begin thinking about those as you move into retirement but spend some time years ahead of retirement so you can learn how you would want to be spending more of your time as you make that transition and it could be volunteering with your church going on mission trips. It could be tutoring students. I know engineers are really good in math and they can be very helpful with students who are maybe in high school and are struggling with math. Someone has a background in medical field. They can be very helpful providing care for a loved one or maybe a respite care for someone who’s been a caregiver and only rarely gets a break. So I think learning, discovering how you can give back and how you can spend your time will permit people to enjoy their retirement much much better than if you wait until retirement is already there. Otherwise I’m not saying it’s too late but you’ll get a better idea of how you want to spend your time if like everything else. You look at that as part of the planning rather than something that you’re just going to wait and decide on once you get really close to retirement or make the transition. And it looks like we’re close to the end of the show. There’s part of this book we haven’t even talked about. It’s about some people who have found their path in retirement and we will talk about that next week. God bless you and thank you for tuning in and I want to pray for the folks in Israel especially with everything that’s going on. There now we want to pray for their safety and pray also for our troops who are over there in the Middle East. God bless you. Thank you for tuning in and hopefully you’ll be here next week. Thank you for listening to Retirement Unpacked with your host Al Smith of Golden Eagle Financial. Set up a free consultation with Al today at klseradio.com/money. Find your purpose in retirement with Golden Eagle Financial. Investment Advisory Services offered through Brookstone Capital Management LLC, a registered investment advisor. Vcm and Golden Eagle Financial Limited are independent of each other, insurance products and services are not offered through Vcm but are offered and sold through individually licensed and appointed agents.