Retire Smarter

Ep 74: Modeling Real Estate & Business Values In Your Retirement Plan

One of the beginning steps in every retirement plan is to value your assets and project their values into the future. Valuing assets like stocks and bonds is easy (though making accurate projections becomes more difficult.) Complexity increases even more when you consider illiquid assets like real estate and business ventures.

Hear Kevin discuss how to model illiquid assets in your retirement plan. Learn why focusing on rental income is shortsighted and how scenario analysis with low to high values can be helpful for business owners.

If you ever plan to sell real estate, this episode will be helpful. And the more of your net worth is in illiquid assets, the more you need to understand these key concepts to have a well-constructed retirement plan.

 

Timestamps:

3:34 - Illiquid Assets

8:04 - What’s Caused More Interest In Real Estate?

10:00 - Common Mistakes In Real Estate

16:09 - Treat It Like A Business

19:47 - Incorporating This Into A Retirement Plan

21:47 - Projecting Illiquid Assets

 

Contact:

True Wealth Design Website: http://www.truewealthdesign.com/

Call: 855-893-7526

Schedule: http://bit.ly/calltruewealth

Ep 73: What Age Should You Get Serious About Planning For Retirement?

Hear Kevin describe a conversation he recently had with a podcast listener aged 57. He's planning on working for several more years and was wondering if now is too soon to get serious about planning for retirement.

Kevin discussed the qualitative and quantitative benefits clients often get from the Retire Smarter Solution as well as some time-sensitive issues you need to address well before you retire.

While it's never too early to start, as your time becomes more valuable, your assets accumulate, and the cost of a mistake becomes larger, it tends to make sense to hire an expert. This way you can make sure you're making the most of what you have.

 

Timestamps:

1:24 - Ray’s Call With Kevin

4:54 - Getting Clarity

6:37 - Putting Together A Spending Plan

10:08 - Concrete Information

12:22 - Are Clients Better Off The Earlier They See An Advisor?

17:26 - Make The Most Of What You Have

 

Contact:

True Wealth Design Website: http://www.truewealthdesign.com/

Call: 855-893-7526

Schedule: http://bit.ly/calltruewealth

Ep 72: How Your Retirement Spending Is Likely To Change With Age

In the last episode, Kevin answered a listener question on inflation. He explained why retiree spending patterns in part combat inflationary risk retirees face.

Now hear Kevin delve deeper into retiree spending patterns. If you don't want to work longer than you have to or want to spend more in retirement, this is an episode you'll want to listen to.

Traditional retirement advice of having a steadily increasing income for life is wrong for most. Rather, spending tends to decline with age at a real rate of 1% yearly although increasing healthcare costs at the end of life are common.

Carefully modeling these age-related changes and monitoring your plan over time will help you Retire Smarter.

 

Timestamps:

2:14 - Different Stages Of Spending In Retirement

8:42 - Chase Bank’s Retirement Spending Data

14:02 - David Blanchett’s Health & Retirement Study

17:06 - Getting Accurate Spending Data Into Your Plan

 

Contact:

True Wealth Design Website: http://www.truewealthdesign.com/

Call: 855-893-7526

Schedule: http://bit.ly/calltruewealth

Ep 71: Inflation Expectations & Implications On Your Investments & Retirement

Your money today will buy less next year. This decline is due to inflation, which is often believed to be the silent killer for a retirement income portfolio over time.

After all the 4% spending rule had it's worst result starting in 1966 -- a time when inflation began to rise and peaked in the 1970s while economic growth was choppy at best. Might the future resemble this difficult time?

Hear Kevin answer a listener question on inflation and whether the high levels of government spending and rising deficits are likely to lead to high inflation. And, if so, what changes should be made to your planning and investing strategy?

 

Timestamps:

1:07 - Dan’s Question About Inflation

2:53 - Fundamentals Of Inflation

10:00 - What Can We Expect?

13:09 - Why Inflation Has Been Low In Recent Years

16:51 - Measuring Inflation

24:05 - Closing Thoughts

 

Contact:

True Wealth Design Website: http://www.truewealthdesign.com/

Call: 855-893-7526

Schedule: http://bit.ly/calltruewealth

Ep 70: Free Money? More Stimulus Checks & Larger Healthcare Tax Credits

The government's money-printing machine is ripping. Here comes round 3 of stimulus checks and larger healthcare tax credits for many pre-Medicare retirees.

Hear Kevin discuss the 3 rounds of checks, income phaseout ranges, and planning strategies to get yours. In some cases, you may want to file your 2020 tax return sooner and in others, you may want to wait. For many retirees, we are modifying our tax-smart distribution plan midyear 2021, lowering our taxable income targets and reducing Roth conversions, to reap benefits. Otherwise, you may lose out on thousands.

As the saying goes, there is no such thing as a free lunch. We're all paying for this in the long run. May as well try to get yours now.

 

Timestamps:

3:49 - Tax Season Is Upon Us

6:07 - Eligibility & Phase Out Threshold For All 3 Stimulus Checks

19:20 - Short Term Solutions

22:07 - More Changes To Be Aware Of

27:02 - Healthcare Tax Credits

 

Contact:

True Wealth Design Website: http://www.truewealthdesign.com/

Call: 855-893-7526

Schedule: http://bit.ly/calltruewealth

Ep 69: Interview Questions To Ask A Financial Advisor

It's not easy to hire a professional service provider. Even the most astute consumer only scratches the surface of truly understanding a profession they are not part of. The information gap is huge.

So how do you ensure you find a competent and trustworthy advisor?

Hear Kevin nine questions to ask your advisor. He will unpack some of the industry gobbledygook, share disclosures from brand-name Wall Street firms that will surprise you, and help you become a more informed financial-advice consumer.

Whether you currently have an advisor or are considering hiring one, this episode is a worthwhile listen.

 

Timestamps:

5:05 - Questions To Ask A Financial Advisor

11:13 - Are You A Fiduciary Legally Acting In My Best Interest 100% Of The Time?

15:49 - How Do You Get Paid?

25:19 - What Are Your Qualifications?

32:44 - Planning Process

34:21 - What’s Your Investment Philosophy?

39:45 - How Many Clients Do You Have?

43:32 - How Will Our Relationship Work?

48:06 - Will You Require Me To Sell All My Investments To Work With You?

49:36 - Who’s Your Custodian?

 

Contact:

True Wealth Design Website: http://www.truewealthdesign.com/

Call: 855-893-7526

Schedule: http://bit.ly/calltruewealth

Ep 68: My Journey As A Financial Planner

Fish mislabeling was once rampant in the US. Thought you were getting Red Snapper? Surprise! You get porgy or tile fish. Deceptive marketing for profits at best and exposing consumers to serious health risks, including food allergens and heavy metals in pregnant women at worst.

Sadly, many 'financial advisors' are similarly mislabeled and may cause financial harm. After all, you just need a 70% on a multiple-choice test and a high school diploma to become registered (and the high school diploma is optional.)

So how do you ensure you're hiring a true professional: one who is both competent and trustworthy?

Listen to Kevin Kroskey, CFP® and special guest Tyler Emrick, CFP® share a behind-the-scenes conversation on the training (or lack thereof) they received when entering in the profession. Hear Tyler describe his journey from starting a top-10 firm (in terms of advisor headcount) where sales were prioritized over clients, and then spending a decade at one of the largest custodians where having in excess of 500 customers precluded personal relationships and quality advice. And learn why being a CERTIFIED FINANCIAL PLANNER Professional is the minimum competency to be a professional, but is just the minimum and not indication the definition of a good advisor.

This inside-baseball-type conversation will shed light to help you become a more informed consumer and help you get your Red Snapper throughout your retirement.

Tyler's Bio: https://www.truewealthdesign.com/team/tyler-emrick/

 

Timestamps:

1:45 - Tyler’s Background

5:14 - Fish Mislabeling

9:09 - Large Firm Experiences

15:17 - Lack Of High-Level Planning

20:48 - Seeking More

24:46 - Biggest Surprise When Working With Clients

 

Contact:

True Wealth Design Website: http://www.truewealthdesign.com/

Call: 855-893-7526

Schedule: http://bit.ly/calltruewealth

Ep 67: Beyond Diversification: Terminal Wealth Dispersion

Putting the odds of investing and retirement success in your favor should be a given as is being diversified. But what does diversification really mean? Ten stocks? One hundred stocks? Two asset classes or ten?

Building on the concept of standard deviation -- or degree of variability -- in investment returns, hear Kevin take the idea of diversification farther. Diversification is not just minimizing variability or owning the S&P 500. It's also reducing the risk of underperformance by owning the stocks and assets classes that will deliver higher returns and reducing the variability in dollar outcomes from your portfolio.

Miss just a few of the best performing stocks each year or abandon an underperforming asset class whose future returns are now higher, and your portfolio will deliver more disparate results that are more likely to put you into the poorhouse. And that's no way to run a retirement portfolio to last your lifetime.

The geek alert is sounded again for this episode but you don't have to be an investment geek to get significant value from this one.

 

Timestamps:

6:41 - Terminal Wealth Dispersion

11:23 - Reducing Risk

14:20 - Bill Bernstein’s Studies

18:32 - How This Impacts Retirement Planning

 

Contact:

True Wealth Design Website: http://www.truewealthdesign.com/

Call: 855-893-7526

Schedule: http://bit.ly/calltruewealth

Ep 66: Proper Investment Expectations & Standard Deviation

If your head is in the freezer and your feet in the oven, on average you may feel quite comfortable despite suffering from two extremes. San Diego type weather on the other hand will leave you consistently comfortable over time.

Averages are commonly used to discuss investment returns, but they are an oversimplification. You don't receive average returns. Compound returns drive your dollar growth and the variability in returns -- or standard deviation -- causes the compound return to always be less than the average return.

Listen to Kevin discuss this core building-block concept and how it relates to your investments, risk, diversification, and retirement planning success. You may hear the geek alert on this episode, but having an understanding of standard deviation can help you be a better, more disciplined investor and put the odds of retirement success more in your favor.

 

Timestamps:

3:54 - Re-Cap On Topics From Episode 65

6:28 - Bell Curve

10:49 - Health Analogy

15:00 - Proper Expectations

 

Contact:

True Wealth Design Website: http://www.truewealthdesign.com/

Call: 855-893-7526

Schedule: http://bit.ly/calltruewealth

Ep 65: Should You Continue To Hold An Underperforming Investment?

Inevitably you will have some investments perform better than others in your portfolio. A normal, human response is to seek pleasure and avoid pain or sell the underperformer and buy what has done well. But does that make investing sense?

Listen to Kevin discuss critical concepts of diversification and probability and why process matters more than outcomes. Hear an example of this being applied in professional basketball and playing probabilities in blackjack.

In sticking to a good process, good outcomes are more likely to result. In focusing on outcomes, you are more at risk of stampeding over the cliff with the uninformed herd and wrecking retirement.

 

Check the four-part Your Investing Process Series, mentioned in this episode:

https://www.truewealthdesign.com/your-investing-process-part-1/

https://www.truewealthdesign.com/your-investing-process-part-2/

https://www.truewealthdesign.com/your-investing-process-part-3/

https://www.truewealthdesign.com/your-investing-process-part-4/

 

Timestamps:

0:43 - Defining Underperforming Investments

2:12 - Is The Investment Or Asset Class Underperforming?

4:32 - Metrics To Consider When Choosing Investments

6:57 - Getting Rid Of Underperforming Stocks

8:35 - Terminal Wealth Dispersion

12:32 - People Don't Invest Rationally

14:47 - Using Probability In Your Favor

20:38 - Planning For Different Outcomes

 

Contact:

True Wealth Design Website: http://www.truewealthdesign.com/

Call: 855-893-7526

Schedule: http://bit.ly/calltruewealth

Ep 64: Investment Lessons To Learn From 2020

What a year 2020 was. Pandemic. Contested elections. Civil unrest. Rollercoaster investment markets.

As Churchill wrote, "Those that fail to learn from history are doomed to repeat it." Listen to Kevin discuss investment lessons you can learn from 2020 to be a smarter investor and keep your retirement on track for years to come.

 

Timestamps:

2:04 - What Stood Out In 2020?

8:02 - The Market Is Forward Looking

11:53 - Make Sure You Are Diversified

13:22 - Politics & The Market

21:57 - Sticking To The Plan

 

Contact:

True Wealth Design Website: http://www.truewealthdesign.com/

Call: 855-893-7526

Schedule: http://bit.ly/calltruewealth

Ep 63: 3 Ways To Tax-Optimize Your Charitable Giving

Most Americans donate to charity and many have distinct goals in their retirement plan to meet annual charitable donations. Most also give cash ...the easiest but also least tax-efficient way to give.

Hear Kevin discuss three ways to tax-optimize your charitable giving. Whether through in-kind transfers of appreciated stock, using a donor-advised fund, or via Qualified Charitable Distributions, each can help you gain a bigger tax break and meet your charitable goals in the Retire Smarter way.

 

Timestamps:

6:48 - Making Direct Gifts Of Stocks, Or Shares Of Mutual Funds

10:58 - Navigating Donor-Advised Funds

22:05 - Using IRA Money

26:29 - Two More Considerations For QCDs

 

Contact:

True Wealth Design Website: http://www.truewealthdesign.com/

Call: 855-893-7526

Schedule: http://bit.ly/calltruewealth

Ep 62: Pension Lump Sums: 2021 May Be The Best Year Ever

Pension lump sums will be much higher in 2021 than 2020. Listen to Kevin discuss timing considerations on how to optimize your pension benefits by understanding the key variables that determine your lump sum. Company pension plans specifically discussed include Akron Children's Hospital, Bridgestone, FirstEnergy, Goodyear, Mercy Health, and Rockwell Automation.

Whether you have a pension from your company or not, you'll benefit from this episode. Why? Anyone can invest money with an insurance company and receive a lifetime income in the form of annuity payments. So these considerations are universal in crafting your retirement income plan.

Want more information on pension claiming strategies? Listen to Episode 38. https://www.truewealthdesign.com/ep-38-pension-lump-sum-or-monthly-payment/

 

Check out Episodes 12 & 13 for more details about annuities. https://www.truewealthdesign.com/episode-12-behind-the-curtain-of-annuities-and-free-steak-dinners/

https://www.truewealthdesign.com/episode-13-beating-up-on-variable-annuities/

 

Timestamps:

2:58 - What Has Changed With Pension Lump Sums?

8:56 - Why These Changes Matter

10:33 - Segment Rates

16:11 - What To Expect In The Future

20:39 - Spreadsheet Story

25:04 - Closing Thoughts

 

Contact:

True Wealth Design Website: http://www.truewealthdesign.com/

Call: 855-893-7526

Schedule: http://bit.ly/calltruewealth

Ep 61: The True Wealth Team Is Growing - Welcoming Ron Wyatt

We're excited to make a big announcement on this episode of Retire Smarter. Kevin is joined by True Wealth Design's newest partner, Ron Wyatt, who brings more than 25 years of financial planning experience to the firm. A lot of existing listeners will be hearing from Ron for the first time, so we'll spend some time today getting to know his background and professional journey. And new listeners will also get to learn more about Kevin's experiences.

The two will also cover why they've chosen to join forces now, and why it's going to be a benefit for all current and future clients. Join us as we celebrate the growing of True Wealth's footprint from northeast Ohio and southwest Florida to Pittsburgh!

 

Timestamps:

1:11 - Introducing Ron Wyatt

2:21 - Ron shares a little about his background

5:58 - Kevin gives a brief review of his background, including his time as a high school physics teacher

8:23 - Kevin tells us about one of his first clients, Tom, and the lessons learned from an emotional meeting in 2009

10:55 - Ron explains why he and Kevin are joining forces at True Wealth Design

16:56 - How does this impact clients? How will their experience change or remain the same with this transition?

24: 53 - Big picture: becoming a "bigger small firm"

 

Contact:

True Wealth Design Website: http://www.truewealthdesign.com/

Call: 855-893-7526

Schedule: http://bit.ly/calltruewealth

Ep 60: Why The Cheapest Investment Option May Not Be The Best

The purchase price of your car is one factor to consider. But the Total Cost of Ownership -- adding in costs for insurance, fuel, maintenance and repairs, as well as the residual value upon sale -- is a better way to evaluate financial aspects of a car purchase. In doing so, the cheapest vehicle is often more expensive than initially perceived.

Same too goes for selecting investments. Many solely use the expense ratio to determine what fund to buy. But while the expense ratio is important and easily observable, it does not tell the whole story. In fact, it may tell only a small part.

Listen to Kevin describe total investment costs and related factors to consider when choosing your investments. Having a more complete view will help you make smarter decisions.

 

Timestamps:

0:53 - The Election

8:55 - Kevin’s Burrito Story

12:51 - Expense Ratios

17:24 - Securities Lending Revenue

21:16 - Helping A Client Understand This Process

24:49 - How Do You Reach A Conclusion?

 

Contact:

True Wealth Design Website: http://www.truewealthdesign.com/

Call: 855-893-7526

Schedule: http://bit.ly/calltruewealth

Ep 59: Retiree Health Insurance Part 2: Pre-Medicare

Healthcare is a primary concern, especially for retirees. Transitioning from employer-provided coverage you've been on for decades is stressful. Now you have more complexity and choices than ever before. And, yes, costs may seem sky high after retiring and before Medicare.

Listen in to hear Kevin and health insurance expert Zig Novak discuss health insurance options from the time you retire to before you can begin Medicare at age 65. Should you take COBRA? What types of plans and are available for Affordable Care Act (ACA or Obamacare) plans, and how much do they cost? How do ACA tax credits work, and how valuable are they? Get informed.

Get destressed. Know what you need to about this important topic to Retire Smarter.

 

Timestamps:

4:00 - Pre-65 Healthcare Planning

8:15 - Floating Cobra

14:27 - ACA Plans

26:00 - Tax Credits

31:37 - Verifying Your Income

 

Contact:

True Wealth Design Website: http://www.truewealthdesign.com/

Call: 855-893-7526

Schedule: http://bit.ly/calltruewealth

Ep 58: Retiree Health Insurance Part 1: Medicare

Healthcare is a primary concern, especially for retirees. Transitioning from employer-provided coverage you've been on for decades is stressful. Now you have more complexity and choices than ever before.

Listen in to hear Kevin and health insurance expert Zig Novak discuss Medicare-related topics. What will it cost? How may costs change as you age? What are the pros and cons of supplemental and advantage plans, and how do you decide which may be better for you?

Get informed with useful information to help you Retire Smarter.

 

Timestamps:

2:56 - Special Guest Zig Novak

5:18 - Alphabet Soup Of Medicare

8:09 - The Costs Of The Different Parts

21:28 - Services That Medicare Doesn’t Cover

23:24 - Advantage Versus Supplemental Plans

33:25 - Switching Between Plans

 

Contact:

True Wealth Design Website: http://www.truewealthdesign.com/

Call: 855-893-7526

Schedule: http://bit.ly/calltruewealth

Ep 57: A Tale of Two Decades

Proper investment diversification works ... even when you don't want it to. With the US stock market and particularly large technology stocks having the wind at their backs recently, many are eschewing diversification to chase these high flyers.

As the saying goes, if we forget history, we are doomed to repeat it. In that spirit, hear Kevin tell a tale of two decades.

First is the Lost Decade of the 2000s when, after the Tech Bubble burst, US investors lost money for an entire decade from 2000 to 2009. Second is the recent decade from 2010 to 2019 where US stocks screamed. The two are starkly different and instructive. Combining the entire 20 years allows you to clearly see the benefits of discipline and diversification.

What will the 2020s hold? Only time will tell, but today resembles the late 1990s in some ways. Importantly, in retirement, you can't afford to have a Lost Decade.

 

Timestamps:

6:15 - The Problem With Stock Splits

13:41 - Our Current Environment Is Similar To The Late 1990’s

18:50 - Areas That Are Not Doing Well

22:11 - The Way Diversification Works

25:12 - Avoiding Recency Bias

 

Contact:

True Wealth Design Website: http://www.truewealthdesign.com/

Call: 855-893-7526

Schedule: http://bit.ly/calltruewealth

Ep 56: Should The Election Influence Your Investing Strategy?

Biden or Trump? Republicans or Democrats? Who will be better for the economy and your investments? These are questions many are asking with the election quickly approaching.

Many let their political beliefs influence their investment strategy, but should they? Hear Kevin discuss what the evidence shows and how our political beliefs may influence our perceptions of reality. Get ready to check your alternative facts at the door and get real.

 

Timestamps:

6:24 - Keep Politics Separate From Investing

10:47 - Pew Research Poll

14:33 - Perception Becomes Reality

19:49 - Peter Schiff Making The Right Economic Call, But Not The Right Investing Call

29:39 - We Have Beliefs, But 200 Years Of History Is More Insightful

Ep 55: Roth Conversion: Why 2020 Could Be The Best Year

Paying a lower tax rate today vs. what you would otherwise pay in the future on pre-tax IRA/401k dollars is a good move. They way you can do so is by converting money to a Roth IRA and paying tax in the year of the conversion.

The 2017 Tax Cuts and Jobs Act (TCJA) lowered tax rates and significantly widened tax brackets on individuals. Current law has the tax rates under the TCJA in effect through the 2025 tax year and increasing to pre-TCJA rates and brackets in 2026.

Yet, tax rates may go higher sooner. Many election models are currently forecasting Biden to win and for the Senate to flip blue. Assuming these come to fruition, the Biden Tax Plan calls for tax increases to occur before 2026. Then there are the trillions of dollars in unprecedented fiscal stimulus added to the government’s books to deal with the COVID crisis. At some point, the mounting debt has to be paid for, and various taxes are the way it must be paid.

Thus 2020 may be the last best year for conversions. Hear Kevin discuss these considerations in detail to empower you to take action to reduce your tax risk and improve your after-tax, spendable wealth.

 

Timestamps:

4:16 - Why Roth Conversions Should Be Considered Right Now

12:34 - Current Law 

16:09 - What Could Be Potentially Coming Down The Road

20:15 - Items To Consider When Tax Planning

25:55 - Sense Of Urgency

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