SPEAKER 03 : 0:01

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.

SPEAKER 02 : 0:24

Welcome to another program of Retirement Unpacked. I want to thank you for tuning in. I know there’s other things that you could be doing, but hopefully you’ll enjoy and appreciate some of the information that I’ll be handing out today. And one of the things that I thought is when I meet with people or get emails or have conversations and so forth, There are a lot of different things that they have concerns and questions about. And I thought for this show, I might address some of the more frequently asked questions that often come to my attention, whether it’s at a meeting in my office or a phone conversation or an email. Not long ago, someone asked, who he was waiting to file social security until he was age 70. And the gentleman asked me, well, if I wait until I’m 70 and my wife, who’s done a stay at home, she’ll be getting half of my social security. Well, she get half of my social security at 70, which is the higher amount. And, um, The answer to that question is no. The spousal benefit for someone who postpones filing Social Security benefits at age 70 is half of that person’s full retirement age benefit, which is in the ballpark of age 67, depending on people’s age. People born after 1960 All of them, it will be age 67 or so. So the answer to that is no, the benefit is based on full retirement age, which is approximately age 67. So the benefit is half of that. And the gentleman also, we took it to the next level, and he said, well, what would her survivor benefit be if I died? And the answer to that is the same. It would be the benefit he would have received had he filed for Social Security at age 67. So the benefit of postponing to age 70 is useful for the primary worker, but not for the spouse for either spousal benefits or survivor benefits. And that is something I think that is good to know because we do know the benefits are larger if you postpone to age 70. They go up about 8% each year after full retirement age. But the benefits, the spousal benefits do not increase. Now, another question that I often get, and the answer is a bit more complex than we can go into enormous detail on a radio show, but people often ask me, should I convert my traditional IRA to Roth? Well, as far as the answer to that, of course, like the answers to many questions I hear, it depends. There are a lot of other factors that need to be taken into consideration before it becomes wise to convert a traditional IRA to Roth. I had a meeting earlier today with some folks who were a little further up in years and And for them, it would not be wise to convert their traditional IRA to Roth because they would be paying a lot in taxes. And to benefit from that, there has to be a certain length of time for the Roth IRA to grow. And as it grows, it becomes more and more attractive. So Paying that all at once does not make sense because it puts someone in a definitely higher tax bracket if they converted the entire amount. So that is unwise. However, I think a plan where conversions can be made over time, I think that makes a lot of sense. But some things to consider, if someone is already retired and they are paying taxes, of course, and they’re leaving Medicare, then the Medicare, there is a tax called an IRMA tax. And basically what that is, if your income goes up to a certain level, you end up paying more for Medicare. And as a result, if someone is over 65 and they’re collecting Medicare, I think it’s important not only to consider what your regular tax bracket is, but also consider if converting traditional to Roth will affect how much you’re paying for your Medicare. So the answer, should I convert my traditional to Roth? becomes a little more complex because we need to take a look not only at the various tax brackets, but also if someone is over 65, take a look at If that amount should be converted, we’ll push them into the next bracket as far as how much they’ll be paying for Medicare. And that particular tax is called IRMA or MA. I don’t have the names of the acronyms, but it’s something definitely to pay attention to, no question. Other question that I am often asked is, When is the best time to draw Social Security benefits? And that is a question that I am often asked. And like many questions, I already mentioned this, the answer is it depends. A lot of factors go into determining the best time to collect Social Security benefits. one of the main obvious questions is do you need the money? Because sometimes people get heavily involved in looking at the benefits at various ages and so forth. And if you’re currently not working, and there are limited resources that you have in your nest egg and so forth, then the obvious answer is it is probably wise to file. Now, if you file earlier than full retirement age, which is approximately age 67, a little bit earlier if you were born before 1960, but The benefit can be reduced as much as 30% if you’re filing at age 62. And in addition to that, it’s limited the amount of money that you can make before your Social Security benefits are reduced. And don’t hold me to the number, but it’s very close to $23,000 a year. and when you earn more than that every two dollars you earn you will lose one dollar of social security now one of the things to consider in addition to reduction in your social security benefits if you file early and you’re still working one thing to consider is your longevity. If a lot of people in your family die relatively early, and if you have some health conditions of your own that you believe may make your life expectancy shorter, then I would say it’s probably wise to file for Social Security. A single person, for example, Let’s say if he or she wanted to wait until full retirement age or even age 70 to get larger benefits, and if that single person does not have a divorced spouse or something like that, and he or she died before filing benefits, let’s say the plant age 70, then that Social Security benefit will benefit no one. If you were never married and you died before collecting Social Security benefits, those benefits go to no one, not to children or anyone else. So that is certainly something to consider. Now, one of the things people talk about is, well, if I wait and it’s a larger benefit, how long would I have to wait before, you know, the number crunching makes it worthwhile? Well, if one were to look at filing Social Security at about age 67 and compare that to filing at age 70, there’s a break-even point, which doesn’t consider the time value of money, but just the hard dollars. And that break-even point is about age 81. So if you think it’s very unlikely you will make it to age 81, then I would suggest filing for Social Security at your full retirement age, which, again, is very close to age 87. The other things to think about, not only do you need the money or do you have concerns about your life expectancy, is what is this going to look like with a spousal benefit. If both you and your spouse have worked, if there’s a difference in age and one of the parties is going to be retiring sooner, then it might make sense for the retiring part of the couple would collect Social Security earlier, and the younger person, if he or she is going to work a little longer, maybe file a few years later. So a lot of things to take into consideration. And some other things to take into consideration, of course, is what do your Social Security benefits look like when combined with other sources of income? How much income are you going to need in retirement? Will the Social Security benefit be needed right away if you have other alternative sources of income maybe rental income maybe pension uh income uh the income from the sale of um property or something like that or an inheritance so there are a lot of moving parts the answer to that question now when is the best time to collect social security but if that’s something that you’re kind of thinking about yourself, give my office a call and we can have a conversation. My number is 303-744-128. And one of the things I often talk to people about is how Social Security fits into your overall retirement because many people, Social Security represents a significant income in retirement. And unlike other sources of income, Social Security does have a cost of living benefit, which is very, very helpful. And certainly after the break. We’ll be talking about some other questions that I am frequently asked when I sit down with people or when people call me on the phone or send me an email or something like that. It’s often that I get questions, and I’m happy to answer those, whether it’s in person, on the phone, or whatever. If you have a question, you’re thinking about yourself, Later today, give my office a call, and I’ll be glad to answer that. And if I don’t have the answer, I will find the answer. Talk to you again soon, right after the break.

SPEAKER 01 : 14:05

Al Smith of Golden Eagle Financial can help you protect the estate you’ve built so your assets don’t disappear in paying for long-term care. As people are living longer, there’s a 40% chance you’ll need care later in life. That’s more likely than your house burning down. Yet we all buy homeowners insurance without question. Life insurance is useful for much more than paying for funeral arrangements. People don’t talk about life insurance because they assume it doesn’t apply. But in retirement, your income may literally depend on you staying alive. What happens to the pension, Social Security, or your overall plan if you pass on? Al Smith at Golden Eagle Financial is not just a financial advisor. He knows how to evaluate your specific needs and build a plan that takes the right steps at the right time. He’ll ask questions you haven’t thought of and help you leverage what you already have. Sign up for a free no-obligation consultation with Al Smith of Golden Eagle Financial on the kozradio.com advertisers page. Investment advisory services offered through Brookstone Capital Management, LLC, 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 and sold through individually licensed and appointed agents.

SPEAKER 02 : 15:28

Welcome back to the second half of Retirement Unpacked. I appreciate you tuning in. And we’ve been talking about what are the most frequent questions I am asked, whether it’s in a conversation on the phone or when people come into my office and take a look at their retirement, see if they’re on track, see if there’s improvements that can be made. There are a lot of questions that I’m asked with considerable frequency. One of them, which you could certainly expect, is, How do I know that I will have enough money to last throughout my retirement? None of us really knows how long we’re going to live. So that is kind of up in the air. And that’s a frequent question that I am asked. It’s sort of like, how do I know if I’m on track? Am I saving enough money so that if I lived into my 90s, I would have adequate amounts? Well, we don’t leave this to chance. There is a program that we use, a software program that is specifically designed to determine if people are on track in saving for retirement. And it’s not only useful if people are five or ten years before retirement, but it can be also used just as easily if people are in retirement. Maybe they’re a few years into it and they have concerns. Maybe they’re spending money. and there might be concerns that they’re spending maybe a little bit too much money, we can plug the information into the software, and it uses what’s called a Monte Carlo program, which gives a large number of different scenarios about the return on investments and after we have plugged in the information about your investments and where they are allocated we add additional information like obviously how much do you need to live on comfortably We use an inflation factor that you are comfortable with, often in the neighborhood of 2.5%. And there are certainly times when inflation is considerably higher, but we use that because it’s useful over time. When we do this analysis, we can use a higher level of inflation if that’s something that you would prefer. But once we do this, The end result is an analysis and a projection that will let us know what is the likelihood that you will have adequate resources to move in and through retirement. And what I really like about it, it gives a percentage, like 80%, 90%. I’ve even seen some that show 100% likelihood that someone will have enough money in retirement. It’s often more like 80 or 90, which means it’s very likely that you’ll have enough in retirement. And in those different scenarios, It will often also show the amount of money left over after about 30 years into retirement. So it’s a very useful analysis, and a similar analysis can be used to determine if people’s assets are allocated where they’re working as hard as they can be. And so that’s, again, that’s a question that I’m often asked, am I saving enough? Will I have enough to last me in and through retirement? If that’s something that you have a concern about and you’re, let’s say if you’re driving, get in touch with KLZ because they will put you in touch with me. And that’s an analysis that we can prepare to determine if you’re on track for your own retirement. Another one that I am sometimes asked, especially if it’s on a first meeting, sometimes I meet with people who have maybe an adequate amount of financial resources, but they’re spread in a lot of different places. it’s not unusual for me to work with someone who has maybe two 401ks from previous employers and they may not involve large sums of money but they’re still spread out at different places and they may have spouse may have 401k from a previous employer And someone may also have an inheritance or something that’s sitting in the bank. And it’s not an unusual scenario for me to sit down with people where the goal is to simplify things. And that is certainly something we can do. I often end up making a recommendation where we will move assets from where they are presently, which could be Five, six or seven different places down to where they’re only in about two different places and it’s much easier to keep track when you have assets in fewer buckets, especially some of those buckets, for example, old 401ks. If people pay attention to those, sometimes they can actually be forgotten about and end up in Colorado’s, I’m not even sure what it’s called, but there is a place where there is lost money, old bank accounts, old retirement accounts, and things like that. I don’t have the details of the amount of money in there, but it is truly significant. So keeping your financial resources in fewer buckets makes a lot of sense. And it also makes sense to let other family members be fully aware of where your assets are parked because it’s not that unusual for people to leave this world and then not have enough information to other family members about where their assets are. And the place you can learn more about that is the Great Colorado Payback. I believe that’s a website that identifies where those lost assets are. And besides retirement accounts, there are many, many bank accounts, many of them small, but some of them significant. So it’s important that you have your assets in fewer places to keep it simple and also let other family members know where your assets are. So if you’re up in years when you leave this world, that’ll be far easier to keep track of that. There’s a gentleman I worked with a number of years ago. He and his wife worked many years for the government. They had pretty significant assets and they were in enough different places that The gentleman had a great big book he used to call his croak book. And it had all of his assets listed and the particular representative who could be reached to learn more about those assets. And he had then passed on and his estate was handled very smoothly because he had everything extremely well organized. So simplifying your circumstances in retirement is something I’m often asked about. And that is a common goal when I sit down and work with people. If they have money in a lot of different places, let’s keep things a bit simpler for your own benefit. And if you end up leaving that in your legacy, it makes it easier for other family members. In addition to simplifying things, sometimes I will run into circumstances where people believe that they don’t have adequate resources in retirement. And I’m sometimes asked, what can I do to fill in the gaps? Because it appears that neither I nor my spouse have quite enough income as we’re moving into and through retirement. Well, there’s a lot of different ways to save a little bit once you’ve moved into retirement, certain choices and that sort of thing. Sometimes people will consider downsizing, getting into a smaller dwelling. I think that makes sense in retirement. One of the things I would check out very carefully is if you’re thinking of a condominium or a townhome, make certain that your bills aren’t going to actually be the same, even though you’re in a smaller dwelling. Because you may be living where there’s little or no HOA fee, and you may be moving to a place where they might mow the lawn, but you might be paying $500 a month for the swimming pool that you never use. So if you’re thinking of downsizing, And be real careful about what the HOA dues are because that can be significant when you move into either a condominium or a townhome. In order to make money last longer, sometimes people will give up a vehicle. If neither of the retirees is working, then having one vehicle rather than two We’ll certainly save on tags, on all the other associated expenses that come along with the vehicle ownership. Sometimes when people retire, depending on the nature of the work they did, there’s opportunities to remain active in the business they were in as a consultant. And depending on the kind of work that you did, I know engineers and software engineers and people like that often have opportunities in retirement to make money where they’re only working about 15 hours a week instead of 40 or 50 to bring in extra income. Sometimes people can use a hobby that they’ve had for years and turn that into a a part-time job. So these are just a few of the questions that I had asked. If you have a specific question yourself, give my office a call. And again, if I don’t have the answer, I will find the answer. And if we want to have a longer discussion about that, give the office a call. We’ll arrange a time to come in. My number is 303-744-1128. Thank you for listening. God bless you and have a great day.

SPEAKER 03 : 27:31

But are offered and sold through individually licensed and appointed agents.