Plan With The Tax Man

A little hope is good for the soul, but when it comes to retirement planning, wishful thinking can lead to serious financial mistakes. Today, we’re walking through five common examples of wishful thinking that can quietly damage your retirement and how you can build a plan that protects your future instead of relying on luck.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:    Marc: A little hope is good for the soul, but when it comes to retirement planning, wishful thinking can lead to some serious financial mistakes. So we want to talk about a few ways wishful thinking could possibly damage our retirement this week on Plan with the Taxman.   What's going on, everybody? Welcome into the podcast. Thanks for hanging out with Tony Mauro and myself as we talk invest and finance in retirement. Tony is a CPA, CFP, and an EA with 30-plus years of experience, and he is the Tax Doctor at Tax Doctor Inc., serving you all around the, well, Iowa and other areas as well. He's got clients all over the place. But we appreciate your time here on the podcast. And this week, we got a few wishful ways that, wishful thinking ways, I guess, that maybe could damage us, Tony. And there's nothing wrong with being optimistic and hopeful. Well, that's all good stuff. But you want to not kind of carry that so far, I guess, that it clouds your judgment and costs you in the end, right?   Tony Mauro: That's right.   Marc: Yeah.   Tony Mauro: Some of these topics are some we hear all the time.   Marc: All the time? Well, we'll try to tackle some of the biggest ones for you.   Tony Mauro: Yeah.   Marc: You doing all right this week?   Tony Mauro: I'm doing good. Yeah. I mean, we're getting ready to spend a little more time outside, although the weather here is cool.   Marc: I think it's cool across the country, actually, a little bit.   Tony Mauro: Yeah.   Marc: In some places.   Tony Mauro: A lot of rain and stuff.   Marc: Yeah.   Tony Mauro: Hoping for something warmer.   Marc: Yeah. Yeah, for sure. Well, that's wishful thinking, right?   Tony Mauro: That's wishful thinking on my part. Yep.   Marc: Well, let's get into a couple of these and talk about it. We got to go with a standard classic, really, financial myth, I think, and that's the wishful thinking thought of, "I'll be in a lower tax bracket once I retire, so that's going to help me out from my cost savings standpoint," or whatever. And Tony, I've been talking with you for years and lots of other financial professionals, and they all tell me the same thing, that more times than not, people are in the same tax bracket when they retire, not a lower one. What's your thoughts?   Tony Mauro: That's correct. Yeah, we find that too. It's the same or sometimes even higher depending on what they have coming in and how that is going to be taxed. And I mean, the traditional thinking is that, "Hey, my expenses are going to go way down, my income is going to go way down, and so therefore my bracket will go way down." But a lot has changed even with the brackets. There's not as big of a spread in each one, so they don't go down by that much. But a lot of times, people that have definitely planned and saved and are bringing in money, passive income from retirement sources, that a lot of times is the same or higher income than when they were working, which is a great thing, but they don't drop tax brackets, so we got to be very efficient about taking it out.   Marc: Yeah. Okay. And that's the point. So it's the income strategy, where you're pulling it from and at what time, that's going to kind of dictate this a little bit, right?   Tony Mauro: Yes.   Marc: So that's when you start getting into the, which horse are you riding? The Social Security horse or your own, the 401(k)'s over here that you have or what on pulling out the income gap, kind of shoring up that income gap. Because they don't just, getting to Medicare, when you're 65, they give you Medicare. It'd be cool if they said, "Hey, you're 65. You're automatically in a lower tax bracket." But you don't get it as a retirement bonus. So if you want to be in a lower bracket, you have to strategize for it.   Tony Mauro: You got to strategize, and you got to pull money out of the right buckets at the right time which I think is where a planner, if you're working with one, is going to really help you in that regard besides just trying to get the most return for whatever you're doing, whether you're taking some of the principal or just interest or whatever.   Marc: What's the culprit that keeps us in that tax bracket the same? Is it typically the RMD withdrawals?   Tony Mauro: I find it's the RMD withdrawals and then other income. People will go back and work a little bit. And then what they don't realize is that sneaky Social Security being taxed is that they bring in this income from other sources. And oh, by the way, now all of a sudden, a lot of my Social Security is taxed, and they weren't ready for that. They thought they were going down in income, which they are a little bit, but then that Social Security creeps back in for taxation purposes, and it screws up a lot. I just saw a lot of it this year. We had a lot of retirees that went out and had RMDs, and then they were also, a lot of them went back to work. You could look at their comparisons on their tax returns, and last year, hardly any of their Social Security was taxable. This year it was the full max, 85% of it, and all of a-   Marc: Because of the income pullout.   Tony Mauro: Yeah. Because of the income pullout.   Marc: Yeah.   Tony Mauro: And so you got to watch that. And you can plan some of that away a little bit, but that's the culprit that I saw this year with the Social Security.   Marc: And that's where, again, some of that strategy comes in. And then when you do bump that income up higher, also with the Social Security, that then also affects the IRMAA conversation, right, the IRMAA penalty.   Tony Mauro: Yeah. Yeah, it affects that. And then that obviously affects the tax bracket. And it's very sneaky because the clients, like I say, none of them realize that about the Social Security.   Marc: Well, you kind of mentioned it, so we won't dive into it, but another one that was on my list was I'll spend less money when I retire because I'm no longer going to work and stuff. But I mean, you kind of touched on that. I think I sum it up all the time with the way my dad said it to me many, many years ago, which I've shared on this podcast before. And he was like, "Hey, retirement's great. I'm digging it. Every day's a weekend." I was like, "Awesome." He's like, "Yeah, but I spend all the money on the weekends." Right?   Tony Mauro: Yeah. That's right. Yep.   Marc: So you just got to be careful. Right?   Tony Mauro: That's a good saying. Yeah, I like that.   Marc: Yeah. And he, unfortunately, passed away, wasn't retired for very long. But it's always stuck with me because I was 15 or 16, something like that. I was like, "Okay, well, every day in retirement's a weekend, and you spend a lot of money on weekends, so be careful." So don't assume that that's, and again, wishful thinking, being well, like this next one, "Well, as long as I keep getting this good return, Tony, that I've had for the last, let's say 10 years, then my plan will work." Well, that's wishful thinking. I mean, as we saw this year, obviously, we had a new administration, we had the tariffs come in, made things pretty rocky. Now it's smoothed out there. We're almost back to all-time highs, but still, don't go into things with the assumption that every single year the market's going to give you 20% returns or 12% returns or whatever.   Tony Mauro: Yeah. And I think most retirees shouldn't be looking at that like that anyway, because it's time to be more conservative. And if you're banking on that, and we have a prolonged, we haven't had a lot of it in the last, what, prolonged 15 years?   Marc: 17 years?   Tony Mauro: Yeah, 15 years. Yeah. We've had little blips, yes, and some months of-   Marc: I mean big blips, but they didn't last long, right?   Tony Mauro: No, it didn't last long. And if you're not prepared for that or worse, you're not diversified, and you've got a lot of stuff, meaning your retirement income or not income, but your nest egg in something a little more aggressive, and that particular sector has a bad three to five years, that's going to blow that whole thing right up. You won't be just fine.   Marc: Yeah. And so the wishful thinking, again, being, "As long as this and this and this happen, I'm good." Right?   Tony Mauro: You're right.   Marc: Well, you can't control this and this and this, so get a good strategy to hopefully retire in any economy. And maybe what you were talking about there a little bit, right, is sequence of risk return, right? Or sequence of return risk. Because if you literally retired in the down market, and it lasted for a couple years, obviously those accounts are going smaller, and you're pulling money out. That's what you're talking about, right?   Tony Mauro: That's what I'm talking about. As I always preach to people, I can't control what the market does. Nobody can. All we can do is make sure we're invested in the right things that, over time and depending on what your plan is, that's going to get you to where you need to go. But I definitely would not, say somebody comes in and says that to me, it's like, "Whoa, we got to change your thinking real fast here because that's going to get you into some trouble."   Marc: Yeah. Yeah, for sure. All right, so let's see. What else have we got on this list? Well, okay, let's piggyback off of that one. "Well, if things go south, I'll just keep working." The wishful thinking of, "Well, if it all goes to crap in a hand basket, I'll just go back to work." Maybe you can, but maybe you can't. Your body may not let you, your company may not want you, or you may not be able to make the kind of living that you thought you were going to make.   Tony Mauro: I agree with all of those, and what I see is the biggest ones are my health or abilities won't allow me to do that. When I was working, things were different. I don't have that skill set that a lot of people were looking for, but I do see a lot of it, even though nobody admits it, is age discrimination. Nobody wants to hire.   Marc: Right? Isn't it funny?   Tony Mauro: Yeah. A 70-year-old.   Marc: But it's easy to go, "Well, we just don't have anything." Or whatever. Even if you're sharp as a tack. Yeah, it definitely exists out there.   Tony Mauro: There's a car dealer here that the drivers that drive me back for when I have my car.   Marc: Oh, like the shuttle service thing?   Tony Mauro: Yeah. They were telling me that they are driving for this company because the last company said they have a mandatory retirement age of 70. We don't want you if you're 70 or above and you have to get out.   Marc: I wonder if that's an insurance thing because we don't want to have to cover the insurance that it's going to cost in case you have a driving, an accident.   Tony Mauro: In case you wreck. Yeah.   Marc: Because your response isn't fast enough. It's not as fast as it used to be, your motor skills or whatever. So yeah, it's a fine line. So they think they can cry safety for the public, but it's also bordering on age discrimination. So we're in a weird world.   Tony Mauro: It really is. It's very weird.   Marc: We're in a strange world.   Tony Mauro: I do see that though.   Marc: No, for sure.   Tony Mauro: If a 70-year-old-   Marc: Airline pilots. I've got a client that does a podcast, Tony, he's an airline pilot, and they have mandatory retirement. I think it's 65. They can't be in the skies anymore, right?   Tony Mauro: Yeah. For controllers it's 56.   Marc: Oh, there you go.   Tony Mauro: The only reason I know that is because I do fly, private pilot, that is, and it's funny because you're kind of in tune with all that and the whole air traffic control issues that they've got, and I don't think they pay those people enough.   And then of course they have a limited shelf life because they make them get out so early.   Marc: I guarantee it's insurance-based. What do you want to bet that some lawyers and some insurance people somewhere said, "Let's just reduce our risk mitigation here?"   Tony Mauro: Risk, yeah, very well could be.   Marc: Yeah. Interesting. So yeah, I mean, again, back to the topic, wishful thinking. I'll just go back to work is not a great strategy either. So could you? Maybe, but don't plan on it. And right along with that, Tony, is maybe we want to make this the last one is, "My kids will cover it. My kids will help me if it's bad." And a lot of us get in that situation. I mean, I help my mom. She's not living the retirement she wanted, but it was not a conversation we ever had. And she's in this position not by, well, sort of by choice, but at the same time, don't just assume that your kids are going to go, "Yeah, no problem. I'm going to help you out." Because they're probably raising their family at that point, and they may want to, but they may not be able to actually do much more than maybe drive you around or something like that.   Tony Mauro: Yes, I agree. I'm trying to think when you were talking about it, if I've had any clients that actually have ever said that my kids are going to help me. A lot of them think they're going to help them, but nobody's ever come out and said, "Yeah, my kid, he's just doing everything for me." I do think that's very wishful thinking, and I think that's a lot of burden to throw on a child.   Marc: I'm glad you said that. That's a funny, because when we do those surveys to potential retirees, what's the top five things? Almost always one of the top five, Tony, and I'm sure you'll agree with this, is, "I don't want to be a burden on my family."   Tony Mauro: Exactly. That's right up there.   Marc: Yet these wishful thinking things, folks, that we're talking about this week also come from retirees. These are actual literal sentences from retirees that we surveyed. So to say, on the one hand, I don't want to be a burden on my kids, but then on the other hand, well, if all else fails, the kids will help me. It's a weird dichotomy. So just get a strategy so that you don't have to put them in that spot.   Tony Mauro: Absolutely. And a plan will certainly help you with that. And so will certain types of insurance and understanding some of that toward the end of life, so you have options so that you're not in that situation. And then if you wishful think that and the kids aren't able to help you, well now you're in a real pickle because you've got all kinds of not probably too desirable ways to live and take it around and it's bad.   Marc: The options are not super, super fantastic. So look, wishful thinking, again, good stuff can be there, but if you don't put it into practice or if you don't put a backup plan or a strategy in practice and then the wishful thinking is the backup plan, then you're maybe setting yourself up. And a lot of these, again, are kind of normal. There's a lot of other ones. We won't spend a lot of time on it because they're very similar, but it's, "I'll be in the lower tax bracket." Or, "I'll spend less money when I retire." Or, "The kids will help me." Or, "I'll just keep working." Or, "I'll sell the house and downsize." Right? That's another one that happens sometimes. Why go with the worst case scenario if this happens wishful thinking instead of getting a good strategy into plan together and saying, "Okay, let's run some stress test scenarios if this happens, and then let's run some if that happens." And that's what you guys are doing when you're starting to build these plans.   Tony Mauro: That is, and it's much better to be in that situation rather than, "Well, if this, this, and this happens, I'll be okay." I mean, I don't like to have three or four things that have to happen and everything line up for you to be okay. We want to make sure you're okay if nothing happens. And then if some of those things do happen, that's great.   Marc: Well, and you run those scenarios. So let's say you run the scenario and, "Mr. and Mrs. Smith, it looks like, based on this, here's what you're going to need to make this goal happen." Maybe that's working a little longer. Maybe that's saving a little more. So you have all those options laid out. Or plan B is, "You do have enough, right? It is going to make it, but here's what happens if one spouse passes early." So you get all these different kinds of outlooks to structure your life around versus just hoping.   Tony Mauro: I agree. I agree 100% because again, relating it back to the real world, I've got some family that haven't done this, they haven't planned, and they're getting ready to retire, and they have a lot of these wishful thinkings going through their mind. I'm trying to set them straight saying, "You're planning on too much. You got too many things that have to go right." And we sat down, I told them the, well, it wasn't the truth that they wanted to hear, but it's the facts. And they're now, we're working to get some things in alignment according to a plan that they can handle and at least they know.   Marc: Yeah, that's good. And it happens, right? I mean, you're in the industry and you have family that doesn't listen or whatever or didn't listen for a while. So we all have that in walks of life, mechanics. It's like, "Oh, my wife's car's falling apart." And it's like, "Well, you're a mechanic." "Well, I don't have time to fix it, and she never listens to me." That kind of thing. So it happens in all walks of life.   But what do you need to do? You got to do the best things for yourself. And a lot of times that starts with sitting down, getting an analysis done, and looking at what it's going to cost you. Often it's not nearly as expensive as people think it is, and the reward and the risk reward ratio is much, much better. So if you need some help, get yourself some time with a qualified professional like Tony Mauro and his team at Tax Doctor Inc. Find them online at yourplanningpros.com. That is yourplanningpros.com.   But don't forget to subscribe to the podcast and share it with others who might benefit and enjoy the message as well. And that's Plan with the Taxman on Apple or Spotify or whatever podcasting app you like using. Again, Plan with the Taxman, with Tony Mauro. Tony, my friend, thanks for hanging out. Have yourself a great week. I'll talk to you a little bit later on this month.   Tony Mauro: All right. You do the same, and we'll talk to you next time.   Marc: We'll see you next time here on Plan with the Taxman.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

Are you saving so much for retirement that it’s squeezing your life today? In this episode, we’re answering a smart viewer question about finding the right balance between preparing for the future and living fully in the present.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:    Marc: Are you saving so much for retirement that it's squeezing the life today out of you? And in this episode, we're going to answer an interesting question from a listener about the right balance between future savings and living in the moment. Am I saving too much for retirement? Let's find out this week here on Plan With The Tax Man.   Hey, everybody. Welcome into the podcast. Thanks for hanging out with Tony and myself as we talk, investing, finance and retirement. Of course, Tony is a CPA, CFP, and an EA of 30 plus years and the big kahuna over there at Tax Doctor Inc. And if you guys got questions and need some help, reach out to him at yourplanningpros.com before you take any action from something, from our podcast or any others, you always want to check with a qualified professional with the experience to help you get to and through retirement. And that is Tony. So yourplanningpros.com or 844-707-7381. Tony, my friend, is there such a thing as saving too much for retirement? And let's talk about it. How you doing?   Tony Mauro: I'm doing good. It's post tax season and I figured this would be a good topic because we don't hear this that much, but it is possible to be doing too much of this.   Marc: Okay.   Tony Mauro: And normally we're always talking about saving more, saving more.   Marc: Right. Yeah, yeah. That's why I thought it was kind of an interesting question. So here's the question from the listener. He says, "My wife and I bring in about $200,000 a year." Very nice. I'm assuming obviously that's combined, wife and I.   Tony Mauro: Yeah.   Marc: And he says, "We max out our two 401Ks and HSA, a 457B and still put some into brokerage accounts." Very cool. Right? He's doing a very good job.   Tony Mauro: That's good.   Marc: Yeah.   Tony Mauro: Yeah.   Marc: He said, "Yet I still feel like, honestly, sometimes we live paycheck to paycheck." Very interesting. "We also are not living in our dream home, just FYI, because I've prioritized retirement savings versus a bigger chunk down for a down payment or a mortgage or whatever. So my question is are we saving too much for retirement? I feel like it would be nice to live a little bit more in the moment." So that's the question, Tony. So, I mean, the first thing that jumps out to me is does this gentleman have a plan because... or is because we've been kind of beat up in the head to say save, save, save, like you just said a minute ago... Has he been doing all that without really truly knowing what his numbers look like?   Tony Mauro: Exactly. And that's what comes to my mind, is if you're asking this question, obviously you must not have a plan other than-   Marc: Save.   Tony Mauro: ... the only plan is I'm just saving, saving, saving.   Marc: Right, right.   Tony Mauro: And I think if we zoom out a little bit, the thing is, well, there's not a whole lot of risk for over-saving, but there can be some because you're feeling like you're feeling.   Marc: Yeah.   Tony Mauro: In other words, you feel like you're not living enough, you're making maybe too many sacrifices. And so it's not maybe a financial risk, but it's an emotional one for sure.   Marc: Right. Okay. Yeah, yeah. That makes sense. Well, we've got this... and let me know what you think about this. So I guess the question for the listener would be how can you tell, right? Without coming in, sitting down with a qualified professional, obviously running the numbers. That's certainly going to be the easiest way to do it.   Tony Mauro: Right.   Marc: But how can you tell if you're ahead of schedule financially? What do you think about those online benchmarks and online things that you can use? Like we've got one from T. Rowe Price here. We'll throw a link into the show notes description this week if people want to go check that out for themselves. Just click on the link. But it gives you that... How much do you have from your salary going here and there and that kind of stuff. Do those things, are they helpful?   Tony Mauro: I think they're helpful. I mean, if somebody's just asking me off the cuff, I point them to those types of things just as a benchmark.   Marc: Okay.   Tony Mauro: I always tell them, keep in mind benchmark means benchmark and if you really want to narrow it down for you specifically, that's when I think you need a full-fledged plan because I think that's what's really going to help you the most, but at least it can get you started.   Marc: Yeah, I mean, it's like the back of the napkin math when you're doing how much withdrawal rate and that kind of thing. It gets you kind of a launching pad. And, Tony, you and I are about the same age. We heard growing up we needed to put 10% away in order to be ready for retirement. Generations now. I mean, my daughter, she's 28, so she's being told 15% and even any kids that are like 20 now are being told maybe 20%. Right?   Tony Mauro: Right. Yeah.   Marc: So how do you kind of balance that paycheck to paycheck feeling in life? I mean, it's tough.   Tony Mauro: It is tough. And that's why having a moving and active, live, plan is going to help you the most because everybody's going to be different. I think that depending on what you want, long term, is going to determine that percentage.   Marc: Right.   Tony Mauro: And I think just throw a blanket out there, it's probably a little too presumptuous there. But I think with the younger people, 20% seems awfully strong to me.   Marc: Well, it seems tough to do, right?   Tony Mauro: Yeah. And very tough to do for the young people if we told them that, they'd really have to... I mean they would definitely be feeling like this if they were trying to save 25%, something like that.   Marc: Right. Yeah. And live. Right? Of course.   Tony Mauro: And live, yeah.   Marc: Yeah. Well, all right, so for the listener here... So he's got a lot coming in, he's putting a bunch into different accounts. Right? If you're saving too aggressively, right? I mean, given into the fact that we take a plan... Let's say this person came in, you ran the numbers for them, okay? And we'll try to put some context to this. And you could certainly see that they were on target to be just fine based on the numbers he's already put away. How would you then counsel things. All right, let's kind of back this down? Or do we want to start looking at tax efficiency because we've saved so much or where would we go?   Tony Mauro: Well, where we would start would be what their end game is and what the number looks like for them. And then start working backwards and use the planning software to basically show them, okay, well you're already going to hit what you just told me and then some.   Marc: Right.   Tony Mauro: So if that's still going to be your mark, let's start talking about some of your other goals that you feel like you've missed and let's prioritize those and let's start backing off the savings a little bit and put some towards those.   Marc: When you say number, Tony, do you mean income? Do you mean what their assets would generate monthly for an income?   Tony Mauro: That's what I mean there, yeah.   Marc: Okay. Yeah.   Tony Mauro: I mean, we'll start with what do you want monthly when you retire and then based on what you have in your nest egg now and forecast out what it's going to grow to...   Marc: It could generate that, right, okay.   Tony Mauro: It could generate that easy.   Marc: Right.   Tony Mauro: And then start going from there. And I would actually at least suggest to them if these other goals are important to you, you already know you're going to be okay when you hit the distribution stage in retirement. Let's start knocking some of these things out a little bit.   Marc: Yeah.   Tony Mauro: Because the thing I always point to... And I'm going through it right now with my sister-in-law who just retired at 65. And she's got a lot of health problems and she just had a recent bout in the hospital on dialysis, on a breathing machine.   Marc: Oh no.   Tony Mauro: Almost to a point where you don't know how long, of course, you're going to live is where I'm going with that.   Marc: Right.   Tony Mauro: And if you save it all to the end and something does happen like that, or worse, you pass away, what was it really all for? So I'm one of those guys that I like to balance, hey, you got to live a little now and take care of the future as well. But I think some people go the other way and this guy sounds like he's gone maybe too far the other way because he's asking a lot of questions   Marc: Yeah and he's obviously interested in and maybe living a little bit more. And so that's kind of where I wonder. It's like, okay, well how do we go about breaking that down? Now, granted, obviously coming in and running the numbers, but for the sake of the podcast, sharing that with other folks, how do we go about accomplishing that? So do some analysis. Right? So I guess what you say. What's your current income level and then what's your current spending level? And is that where you want to be in retirement as well? Let's say it's $10,000 a month, just for an easy number.   Tony Mauro: Yeah.   Marc: Well, does what you've generated create $10,000 worth a month in income, which you were just talking about. And then of course people... We hear that, well, you're only going to need about 80% or 85% in retirement, but if you don't want to go backwards in lifestyle and you feel like you've not been living enough anyway, then I would say you want to keep it higher, correct?   Tony Mauro: High. Yeah. I'd keep it at 100%.   Marc: Okay. Yeah.   Tony Mauro: And just keep it high and we can always adjust it downward, but I find that most of the time... And we've talked about it before, that your expenses and living don't go down quite as much as you thought when you were young and dreaming about it. When you get there, you don't want to back that off too much.   Marc: No, for sure. So determine if you're saving too aggressively, right? Look at your rates, look at some of the things that you're bringing in. Again, that monthly income. What's it generating. Then start looking at... I don't know, maybe that's where you can use some of the automation, right? If this person is still working, then maybe you can back down contributions-   Tony Mauro: Back down.   Marc: ... or does that make sense because you want a dollar cost average still too? Right? So it's an interesting math question.   Tony Mauro: It's an interesting math question. And there's also got to throw in taxes there because obviously if you back down some of this pre-tax stuff, if he's got it. His taxes are going to go up a little bit. So it's a delicate balancing act, but I think it can be done in a tax efficient manner with some help and planning.   Marc: So if you were going through and trying to help this person, they came into the office, the first thing you would do is start running the numbers, put all these things in play into your software that he's got because he's got a lot, which is very cool.   Tony Mauro: Yeah.   Marc: And then see where they're at and then what? Tax efficiency would be next, and then what's after tax efficiency? Maybe the legacy side or what?   Tony Mauro: I would say after the tax efficiency, I would ask them about the legacy side, what their plans are there and if we're still in good shape with what they want to do there. And then I would make them list their goals of some of the things they want to do between now and the time they do retire and let's start tax efficiently trying to make that happen.   Marc: Well, he mentions the dream home. He mentions the dream home. So that could be interesting too, right? So it's like is that still high on the list?   Tony Mauro: Right.   Marc: Let's say this person is in great shape, they have saved maybe over amount to what their goal, their target, was. Not that, I guess, there's such thing as being over. But they've hit their target, but they kind of want to take the dream home into account. So, again, you got to factor that in, right? Because we know that pricing is still high for homes. Interest rates are higher, what are you going to get for the old one? What's it going to cost you for the new one? And, again, this is where that whole, complete, financial analysis is really going to come into play.   Tony Mauro: It really will. I don't know anything about this couple, but I would ask them strongly, depending on what their age is, about that dream home unit. Is that really high on the list? Because that that's a large, large expenditure and maybe the home you're in is fine, especially if you own it. And maybe you want to take that money and do something else with that. But who knows. They might be dead set on something like that and then it's up to us try to help them make it work.   Marc: Right, yeah. So plugging in a lot of numbers, doing the X's and O's trying to get it all there. So I guess to kind of circle back to the whole initial thing, can you save too much for retirement? I mean, it's probably not... I feel like fundamentally you got to say no, right? Because if you save too much, all you're going to be able to do is either enjoy yourself more in retirement or leave a nicer legacy to your kids, right?   Tony Mauro: Yes. Yeah. And the true answer is no. I don't think you can ever save too much. I do think though that what we've just talked about and with him, he's feeling it... is don't neglect enjoying life a little bit along the way.   Marc: Yeah, yeah.   Tony Mauro: And that's where a plan is going to come in for sure because he's just -   Marc: It was a while back, Tony, we did a... God, it's been a while. We did a personality type podcast and we talked a little bit about, I can't remember all of them, but one of them was the miser, right?   Tony Mauro: Yeah, yeah.   Marc: Not saying that this person's a straight-up scrooge or a miser, but the person that just got into such a groove and a rhythm of saving and being so aggressive that they forgot to enjoy life. Right? And I don't know that this person's that far, but he kind of framed his question that way. How do you work with people like that? How do you help them kind of see that it's okay to spend some of that money?   Tony Mauro: I think the biggest thing for us is showing them, in real numbers, that they are going to be okay so they can wrap their head around it. Because, for many of them, depending on how they grew up and were raised, it's tough for them to change that. And it takes a little work and it takes some real discipline going the other way to spend some money. And most of my clients, it seems like, especially on the distribution stage, when they get older, they tend to automatically start wanting to not spend as much. And so if you're already there and then you go into retirement, boy, I would hope you wouldn't do that because you're even going to be worse off than you are now.   Marc: Yeah.   Tony Mauro: And, in other words, you're going to have all this money and you don't want to even go enjoy a penny of it.   Marc: Yeah.   Tony Mauro: Defeats the whole purpose of planning.   Marc: Well, I mean, this is really where the black and white helps. The old rubber meets the road kind of thing, right?   Tony Mauro: Yeah.   Marc: Because no matter what your emotional mindset is, if we see the data, then our brain sometimes goes, okay, all right, now, all right, I see this now all laid out. Tony, you could run a stress test for this individual and go, okay, based on what you've saved, based on the goals we've talked about, the things you want to accomplish, this is when you would roughly expect to run out of money, age 100 or whatever.   Tony Mauro: Yeah. Yeah.   Marc: And then that gives, I think, that peace of mind to people to go all right. All right, maybe I can loosen up the purse strings now a little bit and go enjoy myself.   Tony Mauro: Yeah. At least let them know that. And if they choose-   Marc: Not to. Right. Yeah.   Tony Mauro: ... not to, then that's their decision at the end of the day.   Marc: The good thing too is the spouse... He mentioned his spouse, obviously, you got the other person who also gets to see it and go, wait a minute now. Stop being so tight.   Tony Mauro: Yeah. Right.   Marc: I want to go have some fun too, or whatever.   Tony Mauro: Yeah. Yeah. It's fun with when you have the spouses in there because, yeah, you might have a different personality there or somebody that says, I've worked all my life and now I want to go enjoy some things before something happens.   Marc: Yeah. Yeah, don't be such a penny pincher or whatever. And again, not that any of that is wrong. Everybody's going to be different. Just based on this person's question, he seems like he's realizing, Hey, we've done a really good job saving, but I'd like to kind of enjoy life a little bit more. The thing that worried me a little bit most was I feel like I'm living paycheck to paycheck and it's like you're making a good salary. So, yeah, I mean, run the numbers. Look at what you're spending each month. Look at what you're saving because, I mean, there could be some expenditures that are out of control too, right? And it's not hard to do in today's world, right? It seems like Amazon shows up at everybody's house every other day.   Tony Mauro: Yeah. Right. I just ordered some stuff before this podcast.   Marc: Well, there you go. Proved my point.   Tony Mauro: Yeah. Yep. Yep.   Marc: So run the numbers. Come in, sit down, have a conversation with a qualified professional. Make sure you're talking with somebody like Tony. Again, he's a CPA and a CFP and an EA with 30 plus years of experience. So he's looking at the tax side of things, he's looking at the investment side of things, he's looking at the whole puzzle piece. And if you need some help, reach out to him. Yourplanningpros.com. That's yourplanningpros.com for that complimentary consultation and review. And don't forget to subscribe to us on whatever podcasting app you enjoy using. Apple, Spotify, and the like. Tony, thanks for hanging out, my friend. Always appreciate you.   Tony Mauro: All right. We'll see you next time.   Marc: We'll see you on the next episode of Plan With The Tax Man with Tony Mauro from Tax Doctor Inc.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

April Fool’s Day is all about jokes and pranks, but when it comes to retirement planning, getting fooled can cost you real money. Today, we’re uncovering the beliefs that fool retirees and pre-retirees into making bad financial moves.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Speaker 1: It's time once again for another edition of Plan With The Tax Man. And April Fool's Day is around us, all about the jokes and the pranks, but when it comes to retirement strategies, we want to make sure we don't get fooled in a way that can cost us any real money. So let's talk about that this week here on the show.   What's going on everybody? Welcome into the podcast. This is Plan With The Tax Man, with Tony Mauro from Tax Doctor Inc. Serving folks all around the Iowa area. If you've got some questions, some concerns, need some help, please check him out and go talk with a qualified professional like Tony online. You can get some time on this calendar@yourplanningpros.com. That's yourplanningpros.com, or you can call him at 844-707-7381. We'll have information of the podcast if you'd like to click on those as well. Tony's got 30 years of experience helping people get to and through retirement, and a great resource for you to tap into. So, Tony, it is April Fool's Day-ish at the time we're dropping this. I think we're dropping this like maybe a few days beforehand, but are you a big prankster?   Tony Mauro: I'm a huge prankster.   Speaker 1: Are you?   Tony Mauro: It's my second favorite holiday, yeah.   Speaker 1: Oh, okay. All right. So does your wife get tired of it?   Tony Mauro: My wife gets tired of it, my son, my dad, everybody.   Speaker 1: Okay.   Tony Mauro: But they play them on me too, so yeah, we have a lot of fun with April Fools.   Speaker 1: Good. That's good. Yeah, my dad was pretty bad about it when he was with us. He was always pulling something on his family members, so it was like, all right, now you had to be on guard whenever it rolled around.   Tony Mauro: Absolutely.   Speaker 1: You knew he was up to something. But let's talk about a few categories here from a financial standpoint where we don't want to get fooled, Tony. We want to make sure, and look, it's super easy right now. Right. I mean, between the news headlines, social media, the polarization of people, whether you're left or right, you like the administration, you don't like the administration. Everybody's got an opinion every six seconds of the day. Right. And so it's very, very easy to see a bunch of stuff that maybe kind of gets you all worked up. Right.   So we want to make sure that we're not just stepping in something just because we're having a visceral reaction to some sort of media bombardment or whatever. So let's start with the high returns since obviously right now, Tony, we had a choppy March, right? So the markets were choppy. I think it's easy when we find it, we all love it when it's high, right? So we all love the market when it's doing well, and we've had a pretty good market for, let's be honest, we haven't really had a prolonged downturn, right? Since 08, 09. If you think about it, we're closing in on 20 years since we've had a sustained prolonged downturn.   Now we've had blips, we've had the COVID downturn, and we had different things. 22 was rough for a little bit as well, but it's not been sustained more than a couple of months, right? So I think people that are kind of get lulled into the, Hey, the market's beating you up, let's get you into this product that's got guaranteed high returns. Be careful of that, right? Make sure you're really doing your diligence and reading the fine print.   Tony Mauro: Yeah, you do have to have that, because it is, and I always know when maybe the markets are possibly too high, when everybody, especially people that are just tax clients, aren't wealth management clients are saying, "What do you think about this stock? What do you think about that stock?"   Speaker 1: Right.   Tony Mauro: And,-   Speaker 1: Or should I get into an annuity or whatever?   Tony Mauro: Yeah.   Speaker 1: Yeah.   Tony Mauro: All that kind of stuff, because they think that because where we've been for the last 20 or so years, returns are easy and there's some foolishness to that, I would say.   Speaker 1: Some fool, yeah, fool's goal, I think that's a good way. Yeah.   Tony Mauro: Because you got to look at it this way. High returns do come with volatility and some risk. And so whether it's in a stock or you're locking yourself up in an annuity, which is a whole different type of product, then you certainly got to understand what those risks are and have that explained to you. And if that's not your appetite for obtaining that return, which we always work off, we're trying to get you the best return based on how you want to get to point B, so to speak, with the least amount of volatility and the least amount of potential tax consequences. Now that may not be, and even come close to say S&P 500 returns, but for you that might be good, but for somebody else,-   Speaker 1: Good point.   Tony Mauro: It might not be.   Speaker 1: Yeah.   Tony Mauro: But don't just say, well, I want the highest return out there because there's always something new. Nobody, in my opinion, can accurately predict what the market is going to do tomorrow in the short term. Now, a lot of them, obviously, it's pretty easy to say, well, over the long term, that the market's the place to be.   Speaker 1: Oh, the market always comes back, right? I just saw this earlier today. We were just chatting about it, you and I, before we jumped on the podcast, and it was like, people are freaking out. "Oh, I'm losing my retirement because of this 10% correction we've had in March." And it's like, okay, first of all, and the immediate comment from someone is, "Well, don't worry. The market comes back." And they freak out and they go, "Well, I don't have time to wait for it to come back." Well, if you didn't have a strategy in place and you were planning on retiring and a 10% correction crippled you, then you weren't in good shape to begin with anyway.   Tony Mauro: No.   Speaker 1: Right.   Tony Mauro: And you shouldn't have been in the market if you're ready to retire or you should,-   Speaker 1: Not at 10%. Yeah. Yeah.   Tony Mauro: Not there. So it is,-   Speaker 1: Exactly.   Tony Mauro: We constantly battle that with tempering and making people understand and get their whole plan in front of them, just so they're not so focused on what's going on today,-   Speaker 1: Right. Right. Yep.   Tony Mauro: In the news.   Speaker 1: Yep. Which is the point of this podcast this week is, the April Fools, not that it's April Fools that they're pulling a prank, so to speak, but it's just kind of being fooled into things because of the constant bombardment of the media. You and I talked on the last podcast that in the course of the same day that we were chatting, the news cycle ran from the sky is falling earlier in the morning with the market to, oh, the outlook is looking pretty good because the inflation numbers came in and were down a half a point or a point.   Tony Mauro: Yeah.   Speaker 1: So they just run with whatever's going to get them eyeballs. So just make sure we're, I think we all know that, but whenever we start to panic a little bit, that's when that little devil on our shoulder kind of creeps up and taps us and says, Hey, be worried. So let's talk about the next one, which is the tax time bomb. Getting fooled into underestimating taxes on your account. And here's the angle I wanted to take on this, Tony. So again, regardless of what your political slant is, if you find yourself, and here's, let me set this up. It's going to take a second, folks, but I think it'll, hopefully it'll make sense.   I'm one of those people, Tony, that my personal health and the family history says I'm going to probably pass away young, right, in my 70s. Now I could totally plan to liquidate and blow through all my money and have big fun and spend it all by 72 when I think I'm going to croak. But if I'm wrong, right, I'm going to be screwed. I'm going to be screwed, right, because I'm not going to have anything. Well, if you're right now, if you're all excited about the no tax on social security, no tax on tips or the conversation about abolishing the IRS or getting away with, great. Look, if that happens and they get rid, I think I'm sure we'll all be dancing in the street if they get rid of the IRS.   However, if they don't, don't you think you should have a strategy for dealing with the tax time bomb that you're probably sitting on, right? And that's my point, right? If you've got a million dollars sitting in a 401K, don't just kind of like go fool's gold and think, Hey, Trump's going to eliminate all the taxes and Bob's your uncle and you're going to get to keep all that money. Be smart in the event that you still have to pay your RMDs or whatever.   Tony Mauro: And I mean, you look back through all of history. Now, keep in mind what I tell people when they start talking like this is, tell me where you think that this, the biggest arm, the only arm almost for collecting the accounts receivable for the US government is, which is the IRS. They're going to go away. How do you think the government will function? Now, maybe they'll, like you said, maybe they'll come up with something over time.   Speaker 1: Sure.   Tony Mauro: And,-   Speaker 1: Maybe the tariffs will be the end of the solution, whatever, right?   Tony Mauro: Maybe it will.   Speaker 1: Right.   Tony Mauro: But history points to, it's probably not. And many, many of us, I can't remember how many trillions is probably in the 401Ks right now, but we have,-   Speaker 1: That's a lot. Yeah.   Tony Mauro: We all have an IOU.   Speaker 1: Oh, yeah. It's almost 40 trillion, Tony. I'm glad you mentioned that.   Tony Mauro: It's 40 trillion?   Speaker 1: Yeah. Because the debt's 36 trillion, and they're always talking about the target that is, the retirement accounts is about 40 trillion out there.   Tony Mauro: We got 40 trillion. It's all in traditional 401Ks and of course,-   Speaker 1: A lot of tax money.   Tony Mauro: A lot of tax money. The IRS wants it. We all have an IOU to Uncle Sam with that money. And they know that and they want pieces of it. Hence, they're changing rules as we speak, that nobody seems to pay attention to when somebody dies and you inherit some of this stuff because they want their money.   Speaker 1: Yeah. Oh, yeah. And look, regardless of your stance, if DOGE does a good job and gets rid of some of the debt and some of the spending and our national debt's able to come down, maybe we don't have to tax ourselves into oblivion. Maybe that's the upside, right? Instead of going, we're in historically low tax rates, right, with the TCJA.   Tony Mauro: Just going to say that. Yeah.   Speaker 1: And at the time we're here taping this, Tony, we still don't know if that's going to get extended or not, right? Maybe it does, that's the prevailing wind, but maybe it does, maybe it doesn't. But at least if nothing else, if it does, then we don't have to necessarily go up in taxes. But you're still going to have to have a strategy for being tax efficient, because that's a big chunk of your retirement money.   Tony Mauro: And that's what we focus on, is trying to be as tax efficient as possible, especially from the tax angle side, from being tax people that we want to make sure that they're not getting any more than they have to.   Speaker 1: Right.   Tony Mauro: And so you have to, especially on the distribution stage, really be strategic about it and make sure you're following the rules and that you're not overpaying just because you don't know any better. And I think that's really the gist of it. And I would also encourage anybody go out and google the history of the tax rates. And you're right, we're at historically low tax rates compared to where we were just even in the 80s.   Speaker 1: Oh, yeah.   Tony Mauro: And so,-   Speaker 1: Well, even during the prior administration. If the TCJA expires, right, we're going back to what it was under Obama administration tax code. So even that goes up a little bit, so.   Tony Mauro: But that goes up. Now one could say, well the way to fix all this is just raise taxes. Well,-   Speaker 1: And nobody wants, I mean, look how we whine about,-   Tony Mauro: Nobody's going to do it.   Speaker 1: Yeah. I mean, we get all bent out of shape about the stock market dropping 10%. You want to pay 10% more in taxes? Of course not.   Tony Mauro: Yeah. No. Nobody wants that. Nobody politically seems to want that. And of course, if you can't, it's like in business, if you can't control your spending, it doesn't matter how much you bring in.   Speaker 1: Yep. That's what,-   Tony Mauro: Right. I mean,-   Speaker 1: Right.   Tony Mauro: You got to do something.   Speaker 1: Isn't it wild where we're at as a society? We all know we got to control spending, yet when you get somebody in there that starts doing it, they start screaming foul and going, why are you cutting spending? It's like, because we have to. We're $36 trillion in debt. That's crazy.   Tony Mauro: That whole thing is,-   Speaker 1: We're in the goofiest time period.   Tony Mauro: Hours.   Speaker 1: Yeah.   Tony Mauro: Yeah. It's just crazy. But we have to, as advisors and as the public, we got to work with what we have.   Speaker 1: Right. You got to play by the rules. Yep.   Tony Mauro: We got to make it try to work for us and I think that's importance of planning.   Speaker 1: Yeah. I've said forever and a day, that it's their chessboard. We have to play by the functioning rules of the chess piece, right? If we're that chess piece is able to move one step at a time, then that's all we can do, right? So,-   Tony Mauro: We're done.   Speaker 1: We have to do those different pieces. So again, no matter what your political slant is, the point of this is you don't want to kind of fall for any one thing, one side or the other. You want to have a good strategy in the event that it does come through, or the event that it doesn't come through. Because you want to make sure that you can hopefully retire as efficiently as possible in any administration or any economy or whatever the case might be. So final one, we'll wrap it up this week just on a couple of things to be careful with, because we knew these were going to be some big ticket items Tony, is Medicare misunderstanding.   We'll switch gears and go to this one. Especially for the folks that are getting close to retirement, their first time stepping into it. My brother just got to 65. He's trying to get his bearings with understanding Medicare and the different things that it does. My mom's 80, in her mid 80s and she's quite used to it, so she's trying to school him on some things, but there's a lot of miscommunication out there on what it covers and what it doesn't.   Tony Mauro: There's tons of it and it's very complex. And then you add on to the top of it the federal government bureaucracy, and it makes it kind of a nightmare for a lot of retirees. But I can tell you this, it certainly doesn't, do not be fooled, it does not cover everything in retirement.   Speaker 1: Correct. Right.   Tony Mauro: You've got to make sure that you have some of these gaps and things covered.   Speaker 1: Yeah.   Tony Mauro: And that's where what I do is I have a Medicare specialist that I consult with for clients because I can't keep up on all those rules and he helps me with clients. And now of course, if he ends up selling them some insurance they need, well, obviously that's how he gets paid. But nevertheless, he really has the ins and outs of what it does and doesn't cover. And then also, okay, if something's not covered, are you willing to spend X to get it covered? And,-   Speaker 1: Good point.   Tony Mauro: Like everything else, you got to make a decision. Do you want to keep that as a gap and take that risk, or is that risk too big? But boy, Medicare, I mean, it serves a good base, but it does not cover everything and you really need to be on that.   Speaker 1: Yeah. Even within the same category too. And don't forget that they changed the way it's set up and providers can shift too. Like my mom recently, I think in the last couple of years she's gone through three different dentists because something happens with the program and the dentist she was going to says, "Well, we no longer accept it." Right. So, which is, I didn't think you could do that, but apparently you can. So different places can accept different things at different levels. So you have to kind of see who's in network, right, and who's out, all that kind of stuff.   Tony Mauro: My dad's like that. And like I say, he's 83 and he is over insured in this area because he like buys everything just because he doesn't want any gaps. And I think he, we tried to get him not to do that and because he's actually kind of wasting a little money.   Speaker 1: Sure. Sure.   Tony Mauro: But sometimes it does work in his favor.   Speaker 1: Makes him happy, right? So,-   Tony Mauro: Makes him happy.   Speaker 1: He walks in and he's covered, I guess, so.   Tony Mauro: He's covered. Yeah, I mean, he's got coverage, but to your point, sometimes it changes and then he sees a lot of different doctors and whatnot, not because he wants to, because like the plan change covered and they say, "Nope, you got to go over here now."   Speaker 1: Yeah, exactly. She sees the same thing. So a lot of misunderstandings when it comes to Medicare as well. So just make sure that you're working with some professionals who can help you. Most advisors, offices, if they don't have a Medicare person on staff, they usually have someone they refer people out to so they can kind of, especially someone who does this in and out every day, they kind of know the nitty-gritty a little bit better. So if you need some help with that, as always, make sure you're reaching or any of the stuff that we talk about, make sure that you're talking with a qualified pro like Tony and his team at Tax Doctor Inc. You can find them online at yourplanningpros.com. That is yourplanningpros.com.   Don't forget to subscribe to us on Apple or Spotify here at Plan With The Tax Man. Simply type the name of the podcast into the search box. You can find it that way. Or just go to the website, make it easy on yourself, yourplanningpros.com. We'll have links in the descriptions below. And as always, we appreciate your time. Tony, thanks for hanging out my friend. And don't be too hard on folks when you pull some pranks on them in April.   Tony Mauro: Oh, no. No, I'll just get my family and we'll see what happens. I'll let you know on the next podcast.   Speaker 1: All right. Let me know how it goes. Yeah, my dad was crazy. He would pull something that got a little mean-spirited sometimes. It's like, all right, now you need to back it off a little bit there, bud. So have yourself a good one, folks. We'll see you next time here on Plan With The Tax Man.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

Ever wonder what other people talk about with their financial advisors? Well, we're going to discuss that this week here on the podcast, from a new survey of nearly 400 experienced advisors and what they see in their offices, and we're going to share that with Tony and see how that relates to and what he thinks about it, compared to his practice.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:    Speaker 1: Ever wonder what other people talk about with their financial advisors? Well, we're going to discuss that this week here on the podcast, from a new survey of nearly 400 experienced advisors and what they see in their offices, and we're going to share that with Tony and see how that relates to and what he thinks about it, compared to his practice. Let's get into it here on Plan With The Tax Man. Hey, everybody, welcome into the podcast. Thanks for hanging out with Tony Mauro and myself, as we talk investing, finance, and retirement, and we're going to break down this new survey. Well, it's not new. It actually came out December of '24, Tony, but we're going to run through this from Financial Advisor Magazine. So they did this interesting survey, so I'm going to get your thoughts on this, and we'll break down some data and see what you think. How you doing, bud?   Tony Mauro: I've been doing good.   Speaker 1: Yeah?   Tony Mauro: Spring is here   Speaker 1: Yeah, baby,   Tony Mauro: As we're recording this, it's staying light a little longer. It's kind of nice.   Speaker 1: Yeah. I know, right? So, everybody's just constantly with the time change thing, "Keep it. Don't keep it. Keep it. Don't keep it." All I know is seven o'clock, it's still light outside, and I'm happy.   Tony Mauro: That's right. I like it. Yeah.   Speaker 1: And you and I were just chatting at the time we're taping this podcast. In my neck of the woods, it is quite warm today, so I am totally digging it, so hope everybody has a good day and a good week. And don't forget to subscribe to us on whatever podcasting app you like using, by the way. Apple or Spotify or whatever, you can just simply type in Plan With the Tax Man in the app, or of course you can find the information at yourplanningpros.com. All right, Tony. Are you familiar with Financial Advisor Magazine?   Tony Mauro: I read it regularly, so yeah, I'm familiar.   Speaker 1: Okay. Well, they've got this new survey in there, like I was saying earlier in the tease there. 400 experienced advisors revealed biggest concerns, challenges, things of that nature from their clients, and everybody had an average of 20 plus years in business, so these are folks that have been around for a little while, so they've seen some ups and downs, so I'm going to give you some data here. Let's just talk through it a little bit. So seeking out a financial professional. Advisors in the survey said about 52% of their clients are looking for financial advice when it comes to retirement strategies. The other 34%, I know that's not totally 100, but 34% said they were just looking for someone to build wealth with. So, does those numbers strike you as interesting at all?   Tony Mauro: For us, I'd say our numbers are a little more skewed towards most of our clients are coming to us for retirement planning. Whether they're in the accumulation stage, that would be the accumulation stage, but I mean, the distribution stage, obviously, they're already there, but most of our clients, I mean, 34% sounds high for just-   Speaker 1: For just for wealth, yeah.   Tony Mauro: ... Building wealth. We're just asking them, "Well, okay. If you want to build wealth, and the next question is for what?" Then, of course they always say retirement, so maybe I'm just beating that a little wrong.   Speaker 1: Right, right. Well, now, to be fair, this is a wide range of ages, so it's not just retirees only that answered these questions, so it could be some younger folks too, right? So, that would make sense if you're in your thirties or forties, and you're just looking for wealth building, but I think if you find yourself in a position where, even if you're in your forties or even in your early fifties, if you're not starting to feel the need to discuss other things than just the wealth building, are you maybe working with the right person, right?   Tony Mauro: That's correct, because as you get, especially in the forties and, of course, in the fifties, there's other questions about the end game, which is retirement, but there's many, many other things that we tend to ask them and they started thinking about some of these stuff, anything from taking social security, to healthcare costs, to long-term care costs, where they want to be and how do they feel about it? There is ways to protect yourself and do things, and then as long as we give them that information and we feel like we help them understand for some of these upcoming big decisions they've got to make.   Speaker 1: Yeah, like RMDs, right? I mean, they'll be coming down the pike. What are you going to do with them? What does it do to your taxable situation? All those little things that we talk about often here on the program, so interesting that, again, 52%, about half the people surveyed, were looking for someone with help for retirement planning, which is good. I think maybe those numbers should be a little bit higher, but again, depends on the age of the person answering. Now, we often hear about people are woefully under-prepared for their future life, their elderly selves, but in the survey, over half of the advisors said the average client they see has around $760,000 saved for retirement, so three quarters of a million bucks, that's not chump change, so that's kind of encouraging to hear that there's over half the people that come in to see financial pros like yourself, Tony, are in pretty good shape.   Tony Mauro: Yeah, they are. I mean, for us, I would say our assets average is probably around that, but I would say it's a little bit skewed on the top end, because some of our clients end up having a lot more than that. Normally though, if you take the bulk of our clients, have assets well below that. Mostly what we're seeing, again, we're here in Iowa, but anywhere from $100,000 to $400,000, $500,000 is what they have saved at the time we end up talking about it, but we are generating a lot of interest from young people that really don't have much, and they're just starting out in that wealth building stage, and we don't turn them away. We don't have minimums that we require for assets. We just try to set the expectations of, your planning is going to be a little different than somebody that might come, that has more, one, because of the complexity, and two, because of just that you don't need that much hands-on advice.   Speaker 1: And every demographic. I mean, there's different cities, different demographics, but I think just in general it's good to see that on average, again, people are a little bit better, in pretty good shape, and I think that's what winds up happening often, Tony, when people do come in to see financial pros like yourself, most of them come in, going, "I don't know if I have enough," or "I don't know if I can retire." Then, when the numbers are ran, more times than not, and I talk to advisors all across the country, hundreds of them, and they all say the same thing. More times than not, people are in better shape than they realize.   Tony Mauro: I think so. Depending on their situation, we find that too, when we start running the numbers is, depending on what your goals are, as long as they're not outlandish-   Speaker 1: Right, right.   Tony Mauro: ... You're better off than you think, especially when you put the numbers to it and explain it to them, because generally, nobody does. If they want to do more, then that's when the planning comes in.   Speaker 1: And a lot of people, I do think they feel like, "Well, I got to get to the million." We've talked about that millions of times, as it is, but depending on what your situation is, as a couple, maybe somebody's got a pension, maybe you've got a good numbers in social security, maybe a million doesn't need to happen. Maybe $700,000 does get it done or $500,000 or whatever, but on average, I think it's still pretty good encouraging to see that people's asset totals are a little bit better than I would've thought, so that's nice to see. Top concerns, check this out. Surveyed advisors say their top concern, no surprise here, Tony, 38% outliving their assets. That's always the top dog, right?   Tony Mauro: For us, yeah. Well, actually, for us, it's the second one here, the reliable income streams.   Speaker 1: Oh, really?   Tony Mauro: Yeah. Just for us. Then, it's outliving the assets, but those two are the top two by far.   Speaker 1: Well, it was 38% for outliving their assets. 31%, right? So, pretty close for the reliable income streams. I mean, they kind of go hand in hand, right?   Tony Mauro: They do, because whether you're young or in your forties or fifties, that's the most important thing, because it's the end game of, do you want to spend every cent of your retirement income? And if so, that's a crapshoot a little bit because, depending on what you do, you could outlive them, and then you could end up with not a whole lot, but most of our retirees want to make sure that their assets, they've worked so hard to accumulate, that they can get a reasonable income stream from them, and then it goes hand in hand with so they don't outlive their assets, because they want to live off the income mostly.   Speaker 1: Well, think about, we were just talking about the number, the pot of money, the $760,000 or the million or whatever you put your number at, and the big bucket pot is not as important as the income streams, right?   Tony Mauro: That's correct.   Speaker 1: So again, $500,000 might get it done if the income streams are there that you need, so if you're both got a pension, maybe both got good social security or something like that, then you probably don't need as much, again, back to that point.   Tony Mauro: Back to that point of it all working it together, which comes back to the financial plan and knowing what those numbers are. My wife just got her, here in Iowa they have IPERS, so guess it's the government funded pension, which she's been in for a long time. I went and ran my own numbers again the other day, just about, here's the number that she's going to have that's going to come in when she's X age, and then what I wanted to know was, "Well, I want the number that we both can't outlive," and then I factored that in with social security and what else we have and say, "Okay." I mean, it was just a quick math, because I do it all the time. We're still in good shape.   Speaker 1: Nice, nice.   Tony Mauro: We're going to hit our goals.   Speaker 1: Nice.   Tony Mauro: So, that's what the planning is all about, but most people don't have even that starting point, because they've never taken the time to figure it out, and I think that's where the planner can help out a lot.   Speaker 1: Yeah, I would agree. Yeah, definitely. Now, the next one on here, Tony, pretty interesting. Again, keep in mind this survey was done December of '24, but future stock market downturns was only 12.5% as a concern. Now, today, if that was done this week, that we're taping this podcast, it might be a little different; however, I do want to bring up at the time we're talking right this second, Tony, the market's been about down about 10%. You and I were just chatting about that at the time we're taping this podcast, but at the time, I just pulled it up while we're chatting, it's up right now 1% today on the news that the inflation numbers were a little bit better than expected.   They came in a little bit better, and it's funny because I was looking at the news articles. Just type in S&P 500, and you get the immediate news responses, right? And this morning it was all the sky is falling doom and gloom. Here, this afternoon, and this is just after one o'clock. We're taping this eastern time, and the inflation numbers came out, and now all the news stories are, "Outlook, much better. Market wraps. Three things that could spark a quick recovery." All the news is positive, so you got to be really careful with that stuff, right? Because they're just in it to kind of capitalize on whatever the thing at that moment happens to be.   Tony Mauro: It is. With the news, as fast as it comes out, that's exactly what it is. Really, a lot of this, of course, we try to explain to our clients, take the long-term view. This is very short-term.   Speaker 1: Yeah. 10% is a normal correction. If that's all it winds up being, right? That's not a big deal in the grand scheme, right?   Tony Mauro: It is, and I just sent out, basically, a chart that I just got out of one of the research magazines, and you've probably seen them before, but I just sent it out to all of our clients, just the old cost of timing the market, and they have a chart, January of 3 to now, "You just invested $10,000 and just left it in a S&P 500 ETF. You would have $64,000, and now if you missed the 60 best days in all those 10 years, you would actually have lost money and only have $4,205," so-   Speaker 1: It is a long-term proposition, right?   Tony Mauro: It's a long-term proposition. You miss the 10 best days, and you only have $29,000, so you can't afford to try to say, "The market's coming to an end. Let's get out. Let's go all to cash." In my opinion. We tend to try to keep clients focused on that long-term goal, because short-term Fluctuations are just part of it.   Speaker 1: Yeah. Not to get too political or get off on a tazza, but I feel like sometimes we kind of give people a little bit of both sides of the coin. I was just watching somebody talking, who typically they're slant when they're interviewing or they're asking questions is typically right leaning, but they decided to kind of jump on the market downturn and said, "Hey, listen. With a lot of the layoffs that are happening in the government, people are obviously concerned about retirement, and now the market's been falling. It's kind of hard to factor in, kind of feel confident that you could even retire."   They took it from that angle for people being laid off, and it just occurred to me, through all the years of talking with you, and it's like if people being laid off today are worried about the stock market, like this week, they probably didn't have a good strategy in place, because typically your market monies are your later monies, right? So, if you're thinking about early retirement, and this was the conversation piece, was the early retirement buyout, should that be a factor, Tony? Should the market monies be a factor if you're thinking about an early retirement buyout? Because it's still going to be later money. God willing, you're going to be retired for 20 or 30 years, right?   Tony Mauro: It is, and I think you have to keep that retirement type money in that mindset. There's a lot of people. Obviously, it's getting a lot of news in the federal government.   Speaker 1: Sure, and nobody likes it when it goes down. I get it. Right.   Tony Mauro: And nobody likes to see people in masse losing their jobs, let alone in the private sector, but the bad part is it's part of life, and we have to kind of wait and see how all this is going to shake out. It's kind of only been going on for, what? 2, 3 months here?   Speaker 1: 30, 40 days. Yeah.   Tony Mauro: Yeah, and so we just have to kind of wait and see, and hopefully, at the government level, if things get to a point, they've got the mechanisms in place to help turn it around. That's what they're all they're, supposed to be doing.   Speaker 1: Right, and I guess my stance on that was, really my question more was I think people, sometimes it's when we have downturns, we immediately focus on the negative.   Tony Mauro: Oh, yeah.   Speaker 1: And again, it's a human reaction, because nobody likes to see it go down, but if you have a plan and a strategy in place, you do realize that these are your later monies. It's a little easier not to completely freak out, right? At least hopefully, and again, 10% is a normal correction. Now, we don't know if this is the end. We don't know if it'll continue to drop or not at the time we're taping this, but it's just simply pump the brakes a little bit and realize that we were super over-weighted anyway, so some kind of correction was due anyhow.   Tony Mauro: It was, and you look at most individual company stocks, valuations were really high.   Speaker 1: They're all high, all the PEIs are high.   Tony Mauro: Oh, boy.   Speaker 1: And tech, really. Tech was really bad.   Tony Mauro: Really bad, and if you're in mutual funds, and that's their objective to go buy those, they're buying these at high valuations, and all this stuff kind of comes into play. But I agree with you. I think that this is all the more reason to have a plan, number one, and keep an eye on it, mark, watch it, and work with your advisor.   Speaker 1: Sure. Yeah. If you need to de-risk a little bit, hey, nothing wrong with that, right?   Tony Mauro: Yeah, no.   Speaker 1: But we've also been saying that for a while now. I mean, you're talking about the S&P. That's usually the average. That's the index that people cut and your industry use. The all time, 52-week high was at 6,100, and it's at 56 and some change right now. So, again, it's only about 500 points off of that. So again, not a massive downturn, but it's all about perspective and maybe peeling some risk off, which again, a lot of advisors have been saying for a while now, "Hey, the market's been up 22 plus percent the last number of years. Maybe it's time to take a little bit off the top there, just to kind of think about that."   Tony Mauro: Right.   Speaker 1: So, anyway, I won't beat that horse any longer. We'll move on. Healthcare costs was only an 8.5% as a top client concern, Tony. 8.5% on a healthcare cost; however, the advisors, themselves, feel like it should be more like 50% of their perspective client base should be thinking about healthcare costs. What do you think about that?   Tony Mauro: I think, for me, most of our clients that we work with are really concerned about healthcare costs and what it's going to be when they retire, and I think many clients, my older clients are starting and they think about it in their fifties, but I think even the young, which are not thinking about it, and they're still in the accumulation stage, should at least make that part of their plan as that boogie man, so to speak, is out there, from what we know today and make sure that you're factoring that in. But yeah, some of these costs are, as we always say, nothing goes down, but it seems like healthcare costs, and of course cost of education seem to go up way more.   Speaker 1: They always stay up. Yeah.   Tony Mauro: And so, I think it's a big concern, because you got to factor that in when you get off your company's healthcare plan or whatever you've got, and you've got to make it work. It seems like most of these people, like my dad included, who's now 83, boy, he uses the healthcare system a lot, because he's constantly at the doctor.   Speaker 1: For sure, and if you're not having the conversation, only eight and a half percent find it to be a top concern, then you could be setting yourself up for some heartache a little later on when an incident does happen, or if not to you, to your spouse, right? Because that's oftentimes what happens when we talk with advisors, is they don't get a plan together, especially for long-term care. One half of the relationship gets nailed with it, and the other half winds up suffering at the end, right? So got to have a strategy. You at least got to be talking about it. I know it's no fun.   Tony Mauro: At least talking. Yeah.   Speaker 1: Yeah. I know it's no fun, but you at least got to start putting some things together in that grouping. One more thing here, and then we'll wrap it up this week on the podcast for this, Tony, but working in retirement. According to the survey, excuse me, an average of 63% of clients surveyed that are age 55 or older, plan to work beyond age 65. They plan to work into their seventies. Interesting, right? So, 63%, more than half, want to work or are going to work past 70.   Now, the reasons are not necessarily because they were panicked about the market, because again, this was done last year, the December of last year, but I think there was two main things that stuck out. They felt like they didn't know if they had enough to totally feel comfortable retiring. 48% of those clients felt that their savings maybe weren't quite enough to live on, and the other 40% said, "Well, they were doing it for the health insurance," to our point a second ago. So this is where, again, a plan and the strategy's got to come into play, get the numbers ran, so you can even find out where you stand.   Tony Mauro: Yeah, because if you don't, then you are really just grasping at straws there, and you're just hoping that it works out.   Speaker 1: And you want to keep working, but what if your body goes new?   Tony Mauro: Yeah, your body goes new. And then, I would say, for us, probably on average, our percentage of clients, 55 to 65 that say they want to work for us, I would say it's probably around 35, 40%, but our clients that are 65 and older, our average is well above this 30% that are actually still working. Ours is probably closer to about 45%, but it's because they want to. They have a plan.   Speaker 1: Which is totally great, yeah.   Tony Mauro: And they just want to get out of the house.   Speaker 1: Sure.   Tony Mauro: So, they actually love it. They don't have to work for the money. They just want to do something and just stay involved in the world a little bit.   Speaker 1: Right, and I think that's where we want to be, right? That's where we'd like to be, having that work optional decision, but I think finding out that a lot of people are doing it for the health insurance coverage, certainly a little daunting there to think about, or they just don't know that their numbers are good enough to retire, like we started out with.   Tony Mauro: Yeah. I always wonder, when I see an older retiree working somewhere, if they're there because they want to or they have to, especially if they're at somewhere where you'd see, I don't know, maybe an extreme example in maybe the fast food industry.   Speaker 1: More physically demanding job? Yeah.   Tony Mauro: Yeah, yeah. More physically demanding. It's like maybe you just always wanted to do this, and just have no stress and just wanted to get out of the house, or are you really working because you have to?   Speaker 1: Now, that's an interesting point. Now, I've got a friend of mine who retired from a very stressful, big corporate position, managing a lot of people, so on and so forth, and he took a job at a supermarket, stocking the shelves, right? Literally, goes in, six o'clock in the morning, something like that. Works for four hours a day. They grab the baskets of stuff he needs to refill, and he goes out and stocks the shelves, and he said, "Dude, I am so happy. I don't have to manage anyone. No one's reporting to me. I know what I'm supposed to do. They trust me to just grab my stuff and do it."   I said, "But it sounds like such a," sometimes we have this stigma. It's like, "Oh. He must be working stocking shelves because he has to, because he's in his late sixties."   Tony Mauro: Right, right.   Speaker 1: And it's like, no, he's doing it because it gets him out of the house. He's like, "For me, the menial tasks helps me free my mind up," because he didn't have to think. He just does, so everybody's got their thing, right? It's like, don't judge somebody, just because you see them doing something.   Tony Mauro: Absolutely not, yeah. That's why I always want to ask them, because I don't want to judge them, but from what I hear from our clients, those types of work, which is most of the clients that I have, that's what they do is that kind of stuff. It is just menial stuff, because the one on one thing is I don't want a lot of pressure, I don't want to have to think.   Speaker 1: Right.   Tony Mauro: I just want to get out, do something, feel like I'm contributing, and talk to people.   Speaker 1: Your body gets to move. He gets to talk to people. Yeah.   Tony Mauro: And they enjoy it. The same type of retiree, he drives for the shuttle at my car dealer, and he absolutely loves it. He's like 78. He works for about five hours a day. He drives people around and talks to them, and he goes home. He loves it.   Speaker 1: No stress, no fuss, no muss, right?   Tony Mauro: Nope, nope.   Speaker 1: So yeah, so interesting stuff in today's conversation around this survey done from Financial Advisor Magazine. We'll put a link into it in the show descriptions if you'd like to check it out for yourself. That way, you can read the online survey as well, but at the end of the day, Tony, you just got to see what it is that you have and what it is that you need for your situation, because everybody's situation is different. Tony's is different than mine, and mine's different than yours, and so on and so forth, right? So, get yourself onto the calendar folks. Have a conversation with Tony at Yourplanningpros.com. That is Yourplanningpros.com. He's got more than 30 years of experience helping folks. He's a CPA, CFP, and an EA. He's got all the credentials there. So if you've got some questions, reach out to him and get started today. Don't forget to subscribe to us on Plan With the Taxman. I know we went a little long this week. Thank you for your time, folks. We always appreciate it. Tony, my friend, have yourself a great week.   Tony Mauro: All right. We'll see you next time. Thanks.   Speaker 1: Yes, sir. We'll see you next time here on the podcast. We'll catch you later here on Plan With the Tax Man with Tony Mauro.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

If you’ve spent years successfully managing your own investments, do you really need a financial advisor? That’s the question Bob, one of our listeners, sent in. He’s got an MBA, knows the markets well, and has always handled his portfolio solo. So, is working with an advisor just an extra expense, or could it actually add real value? In this episode, we break down when and why even experienced investors might benefit from professional guidance and when they’re probably fine on their own.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:    Speaker 1: If you've spent years successfully managing your own investments, do you really need a financial advisor? That's a question that one of our listeners sent in, and it works really well, because earlier this month, we had a similar question, but from a business owner's standpoint. So let's tackle it now from the other side and see if we can help you break it down here on Plan With The Tax Man.   Hey everybody, welcome to the podcast. Thanks for hanging out with Tony and myself as we talk investing, finance and retirement. Of course, Tony here is the star of the show, if you will. He's the CPA and the CFP, he's the big kahuna. He's an EA with 30-plus years of experience helping folks get to and through retirement. And Tony, we had an email question that came into the website, yourplanningpros.com, you get lots of emails for things, and this one was based off the podcast. But either way, it was still interesting this month, so we tackled really two of them this month, in the month of February, thinking about the business owner's standpoint from our last episode for a question that had come in about, hey, I've built a nice business, but how do I make a retirement plan out of that? So if folks didn't check that out, feel free to go check out that prior episode, Plan With The Tax Man, on whatever app you like using. You can also find that information on his website at yourplanningpros.com.   And this week, we're going to do a similar question, but this is from Bob, and it's more the DIY, just do the normal thing retirement planning yourself. So Bob's question, Tony, says, "I have an MBA and I understand investments well. I've always handled my portfolio myself instead of having professional help, and I've done pretty good at it, if I'm being honest. So in your honest opinion," he says, "Is there really any reason for someone like me to work with someone like you, an advisor?" So we get a lot of this, and the DIY movement's been very popular the last couple of years.   Tony Mauro: It has, yeah.   Speaker 1: And so, it's certainly a fair question, because a lot of people definitely have taken this route. And Tony, I'll set you up this way, I'll let you just jump right in and tackle it how you want to with his question. But to me, the biggest piece is, is it the accumulation phase he's been working on or the distribution phase? Because it sounds like the accumulation, just based on this question, and that is a whole lot easier, I think, than the preservation, distribution, AKA the retirement phase. But anyway, what do you think?   Tony Mauro: The honesty is it depends, because if he truly is savvy enough that he thinks he is and basically doesn't have a lot of worries about what he's doing and how he's progressing and he feels good about it, we would tell him, "Hey, look," if we were sitting... What we do, the first phase of our whole planning process is we sit the client down and have them basically answer 10 extremely easy questions and we score it, and if they don't, based on their own responses, show some anxiety or worry or need for help, I tell them, "I don't really know why you're here in this meeting because it looks like you've got it under control." So then you have a conversation from there, "Tell me why you are here," and let it go from there.   But I think that where we can lend value, even in the accumulation phase... Because I try to convince people right off the bat, it's not about what investments or whatnot we pick, it's basically about setting a plan, let's make sure all the bases are covered, whether it's accumulating to a certain amount, your estate plan, making sure we're doing it with some tax efficiency, whatnot, and then let's check in regularly and let's make sure that this plan's still on track, and that's really what you're paying for. The investments we choose, we tell them, "Look, if you want to go choose your own, you go ahead. You'll just pay us a fee, just like you would your attorney." If you want us to help you manage that a little bit and you want to give us an asset-based management fee, we do it, but it's fee-only, no matter what. And so, we leave it to the client.   So I do think there's some benefit to a good financial advisor, but you have to understand as a client, any financial advisor that's worth their salt wants to do more than just give you ideas for investments.   Speaker 1: And so, let's look at it from that standpoint, Tony, because yeah, Bob sounds like a very smart gentleman, sounds as though he's able to handle things himself just fine, and many people are in that same boat, and that's great if you're thinking about one section of your finances, your money. So I want to look at it from a couple of different places to give Bob some reference. So the questionnaire and the thing you talked about, that's fantastic, helping people break it down. Is it just the portfolio? Because that's what he mentions, the portfolio. Okay, fine, you've got investment skills, you've done well managing your portfolio, but what about all the other pieces, Tony? So the stuff that we talk about here on the show quite often that maybe a lot of DIY people, A, don't consider, or B, really have much knowledge in or even thought about, like estate planning, just that piece of it, or tax efficiency, retirement income, any of those pieces. Wherever you want to go next, just jump in there. But I feel like those are a lot of things you go, whoa, I didn't even think about that.   Tony Mauro: All those things make sense as far as us as advisors being able to help with. And I think a lot of other things too, as far as somebody brings us their portfolio and they're all chest out and pumped up about look how good I did, and we try to run it through some computer models, just to maybe address some of their risks that they didn't think about maybe. It might be they're overly concentrated in a few securities that doesn't really line up with their overall goal or risk assessment. And then, most of the time, the people that do it themselves generally are trying to time markets to an extent.   Speaker 1: Or match the market, right, they're trying-   Tony Mauro: Or match.   Speaker 1: Yeah, I got 22% in the last two years, so I want to make sure I get that 22%, but your risk exposure is awful high.   Tony Mauro: It's awful high. So we always ask them, "In order to get that, what did you have to do, what did you have to risk to get that, and is that really truly what you want?" And then, the other thing is, let's take taxes into that. If you're investing inefficiently, are taxes knocking down your returns? So a lot of it goes into that, especially on the technical side. But let's say he passes all that and he still thinks he's in good shape and we say, "You know what? You are." And then it's up to the client to say, "Am I going to get some real value out of working with this guy or gal?" And hopefully, it's something that they can definitely do and be better off with us than without us.   Speaker 1: Yeah. And as a CPA, I would imagine, Tony, that one of the things, if the DIYers... Again, accumulating your wealth is a little bit easier nowadays, technology is very helpful, there's a lot of just some good stuff out there. Let's be honest, we've had basically a 16-year bull run. Yeah, we've had a couple of blips through the... But we haven't had a prolonged downturn since '08/09, right?   Tony Mauro: Correct.   Speaker 1: Not a long one, no more than a couple of months. The COVID thing was pretty short-lived, it was a little down in 2021, 2020, obviously, shortly there after COVID as well, little blips here and there. But for the most part, we haven't had a prolonged downturn. But let me get back to the CPA point, from a CPA standpoint, if you're doing really well as a DIYer on the accumulation, have you thought about the tax advantages or disadvantages that you're just not aware of? Especially as you get closer to retirement, pulling your money out from what income sources and what that does to your income, and maybe that triggers IRMA, that's another one that people don't think about often. So there's all these little nuances that we're just not normally aware of.   Tony Mauro: Yes, that's true. And I think another big one that we hear a lot of clients talking to us about is they think that they are doing themselves a great favor by, they hear something on TV or the internet and they'll start pulling money out of their IRA and transferring it to a Roth or their 401(k) into the Roth conversion, but what they don't realize is it's much more tax efficient to just fill up your current tax bracket bucket and then postpone the rest until the next year, because you're needlessly costing yourself taxes when you could spread this out a little bit, and sometimes that can add up to large amounts of money.   Speaker 1: Oh, yeah. And we've talked about Roth conversions here, and I think we think they're a good idea, I don't want to speak for you again. But you've got to Roth it correctly, not just wholesale Rothing, but Rothing over time, for example.   Tony Mauro: Over time, yeah. Because I think a lot of people miss, and certainly outside the tax community, the tax efficiencies or inefficiencies that you can do in investing. Now, is it going to kill you? No. But why leave money on the table, so to speak, and give it to the government, when legally you may not have to?   Speaker 1: Yeah, for sure. All right, Bob, so here's another thought process for you to go through, to work on. Is this what you want to do in retirement? I think that would be another piece. Or even let me go one more, what about Mrs. Bob? Is this what she wants you to do in retirement, or does she have plans? So I think that's the other thing about the DIY side of things. It's great, we can do a lot of wealth accumulation a lot easier, Tony, than we used to could. But when it gets to the preservation phase, which is retirement, A, it's more complicated, B, do you want to spend your time doing that, or do you want to be with your grandkids and your spouse and fishing and golfing and whatever it is that's on your list?   Tony Mauro: And if you don't like it, and I mean really like it, you're going to end up putting it off, and then you're going to miss some things, both in the accumulation stage and definitely in the distribution stage. That's where, like you said before, it does get tricky, especially as you age. And then, you've got to think about long-term planning and some things there, and of course taking an income and distributing properly. And so, I always say it's two stages in life, like you said, it's accumulation, distribution, and each are vastly different.   Speaker 1: Yeah, for sure, totally different animals. And boy, the first time you miss your RMD, you're going to be real mad about that.   Tony Mauro: Real mad about that, and you're going to have to beg the IRS to forgive the penalty.   Speaker 1: Right. One of the other questions that we posed in the earlier podcast this month when we were talking about the business side was the succession plan. So I'll ask Bob, and people like Bob, the same question here, Tony, what is your succession plan? Now, by that, you say, "Well, what do you mean? I don't need a succession plan, I'm my own advisor." Yeah, but you're going to die, we're all going to die, and if you pass away first, which statistically is the case, and again, Mrs. Bob, she might not want to do any of this, she might not have any interest whatsoever, so what is your succession plan for having her taken care of, or vice versa, whatever?   Tony Mauro: Yeah, vice versa. And even if you have this all laid out, whether it's on the computer or a life book, she may not have the same enthusiasm that you do with this and it's going to be difficult for her. I've had clients with this, the husband dies, the husband did it all. Most of the cases, the wife has no idea, not what's going on, but how to manage it and whatnot, nor do they want to. And so, I think that's where an advisor could certainly lend a lot of value in that case as well, and you want to start that relationship before something happens to you preferably, not after.   Speaker 1: Yeah. When you're grieving, it makes it easy to know, hey, when I'm gone, reach out to Tony and his team, they're going to help you.   Tony Mauro: Yeah.   Speaker 1: That kind of thing. Or whoever it might be, but that's the idea. So I'll wrap it up with this. So look, you started off by saying if you're just picking items in your portfolio. And it's still funny, because the term advisor is so loose now across different kinds of fields, many investors believe advisors do just that, Tony, that the only thing that they do is help them pick stocks. And so, what would you say to folks who think, well, I'm going to do it myself because I can pick my own stocks? Because as we've touched on, there's so much more to what you do than just that. But what's your final thoughts?   Tony Mauro: I think my final thoughts there is that I would challenge anybody out there to try to not only match but beat the S&P 500 over long periods of time, and/or match what professional advisors can do. Now, that term is loose,, yes, I'm an advisor, but I'm not an investment advisor out sitting in a mutual fund researching individual stocks and bonds all day.   Speaker 1: Right, not run a broker, right, yeah. And you're not day trading, right?   Tony Mauro: No, we're not doing that. I would challenge you though to see if you can match those things year in, year out, when they're sitting there, who have much more knowledge and access to information than we do as Joe Public. And so, I would say that I don't think you could do it, I really don't, I haven't met anybody yet that can do it over long periods of time. And so, the idea for having someone like us is to keep you on track and get you where you want to go outside of the investment portion of it. If you want to go choose your own investments, again, that's great, but I think you need somebody that deals with the planning portion, day in and day out, to keep you on track.   Speaker 1: Yeah. And think about a company like Vanguard, which is a very low-cost option for people who want to buy and do their own thing, they even talk about the value that advisors bring, they rounded about 3% annually. And they also talk about, from the behavioral analysis side, one of the big pieces that they even talk about that advisors bring to the table with working with folks is that behavioral modification, because we are our own worst enemy.   So Bob might be doing a great job, but what if, all of a sudden, he's been reading a while about some new tech thing or some new cyber coin or whatever, and all of a sudden, you want to risk too much? Having that sounding board is a great idea, not only for Bob, but for Mrs. Bob as well, because it could be like, hey, we're on two different pages when it comes to leaving money to the kids. Bob wants to balance his last check so that him and the Mrs. can spend it all and have a great time, but she wants to leave a bunch to the kids or whatever, or the grandkids. So it's all those other pieces that, I think, having that... Well, Tony, basically that sounding board, sometimes you're like a counselor as well as an advisor.   Tony Mauro: We are, and I can't mention how many times... I like to mention it to the clients who will call up and say, during the good times, "Well, we don't feel like we got as much return as we needed in the previous year," or something. Or the best one is a client or a prospect will say, "Well, I'm going to divide up my between you and another advisor, we're going to see who does the best." And I'd say, "We're not in that game." Not that we're not focused on returns, we are, but I like to tell clients, "Our job is to keep you grounded, especially when the bad news comes out." Because clients, it's inevitable, bad news starts coming out, the markets go down a little bit, they're calling, "Maybe we should go all to cash." And I said, "Based on what? Who said that? And then, when do we get back in? Who's going to tell us, the news?"   And so, just keeping them from blowing themselves up, which they don't really ever see, but I like to sit in the background and say, like you said, "The last, what, 15, 16 years, we kept you in the markets, when many times..." Pick the subject that came out, COVID was the big one, we've got to get out, the markets going to hell and we've got to go all to cash. And it's proven that that didn't need to be the case. We did take a little blip, but they're so far ahead of that now that it's crazy.   Speaker 1: Well, and look at the turmoil that we're in right now too. So we've got a new administration, they're doing things that have never been done before, whatever the side of the aisle you find yourself on, there's a lot... We're $6 trillion in a deficit, that's annual, so we're $35 trillion in debt, but we operate at a $6 trillion annual deficit. You can't run your house that way. If you were running your house, Tony, that every year, you were losing $60,000, let's say, you wouldn't survive real long, unless you're mega, mega rich. And the government's been operating like it's mega, mega rich, and it's not.   However, I digress, point being is that there's a lot of things happening, and the market is reacting fast. There's all this AI stuff, there's this new DeepSeek version of AI from China that says they can do it cheaper and less energy and so on and so forth. Then you've got the fact that tech markets are massively overweighted, and they have been for a number of years. It feels very much like there's a bubble, similar to '08/09 with the housing bubble, and we've got all this stuff happening, and to your point about the markets, people can be edgy and they can be like, "Well, I'm going to panic and jump out." Well, okay, well, if you're 40 years old, that's insane.   Tony Mauro: Yeah, that's absolutely insane.   Speaker 1: Because you've still got plenty of time. And maybe even if you're 55 years old, it's insane. But how do you know if you don't have a plan?   Tony Mauro: Yeah, you don't. I just had a client, he's 55, for example, we've done well, and basically, he watches too much TV. I always get the little hairs on the back of my neck stand up when he's calling, because he's calling now saying, "You know what? I want to be more aggressive. I really think that the markets are going to be booming." I'm like, "What? You're starting to get where I'm thinking maybe we should go a little bit of the opposite, not all, but as you get a little closer to retirement, let's give up some of that risk for more steady returns." And so, it's weird, because when people want to get in, generally, if you ever read anything about it, of course, that's the time to be a little bit spooked. And then, when everybody's euphoria or when the market is tumbling and the blood's in the water, that's obviously when you want to be going like gangbusters and putting money in. But that's short-term stuff. Really, the plan is to stay long-term-focused.   Speaker 1: Yeah, and that's a great point. The market's about the longevity in it, not jumping in and out and so on and so forth. And I get that it's been booming for a while and that's very enticing, so all that stuff we talked about, comes back to having that ear to lean into, "Hey, Tony, what do you think about this? Is this a good idea, bad idea? And could my portfolio handle this, or could it handle that?" And so on and so forth. "And what does that do to my retirement?" And so on and so forth. And then, we didn't even touch on long-term care, so that's another whole piece there, Bob.   So again, you may be doing a great job, but it also may be worthwhile to sit down with an advisor and have an hour conversation and say, "Hey, what are some things that could be missing?" To Tony's point, they can walk you through those steps. They can put you through a questionnaire and just see where you're at. You may be doing a great job, in which case, they're going to pat you on the back, shake your hand and send you on your way. But you may be shown some areas where there could be some improvement, or maybe you just, at some point, decide you just don't want to deal with all of it anymore.   Either way, if you've got some questions, you need some help, hopefully you enjoyed the content this week, we certainly appreciate it, reach out to Tony and his team at yourplanningpros.com. That's yourplanningpros.com. You can find all the information in the show links below of the episode, and you can find us on Apple or Spotify or whatever platform you like using. Just subscribe, the Plan With The Tax Man, with Tony Mauro, from Tax Doctor, Inc. Tony, thanks for hanging out and breaking it down, my friend.   Tony Mauro: All right. We'll see you next time.   Speaker 1: Always appreciate you. We'll catch you guys a little bit later on in the next month. We'll be back in March for more with Tony Mauro.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

You’ve built a successful business, but now the big question is, how do you turn that into a retirement plan? If you’re like many entrepreneurs, you’ve spent years reinvesting in your business, but what happens when it’s time to step away? Can you sell it? Can you create passive income from it? Or should you start saving in other ways right now? In this episode, we’re breaking down strategies for business owners who need to turn years of hard work into long-term financial security.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:    You've built a successful business, but now, the big question is, how do you turn that into a retirement plan? If you're like many entrepreneurs, you've spent years reinvesting in your own business, but not in yourself. This week on Plan With The Tax Man, let's talk about that. Let's get started. Hey, everybody, welcome into the podcast. Thanks for hanging out with Tony and myself as we talk investing, finance, and retirement. Of course, Tony Mauro is the man to turn to here in the Iowa area at Tax Doctor, Inc. He's a CPA, CFP, and an EA of 30 plus years experience, and a great resource for you to tap into if you've got questions about this week's topic, for example, which is what to do now, if you've sunk all of your efforts and your money into your business. And Tony is a business owner. I know you can probably relate, as many of us can. So it's a great question was we actually got a question in from a listener who's also a business owner kind of posing this, and you and I thought it'd be a good idea to have that conversation. How you doing? I've been good. Well, there's been good here, and just getting ready for tax season as we tape this. Yeah, yeah. It's coming fast and furious, so of course, as you're aware, but I'll share it with the listeners so they can kind of set the table for them, if you will, Dan, a longtime listener and a business owner sent a question that might sound familiar to others who are in the same situation, Tony. He says, "I haven't saved much for retirement, because I'm self-employed and I've always pumped most of my money back into the business. But now, I'm not sure how to turn that into retirement income, as it's creeping up on me fast. Have you worked with folks in a similar situation?" And obviously, Tony, I'm sure that you have. So let's talk about some of the key aspects to that. First of all, what'd you think about the question? I think it's a good question, and almost every one of our business owners are in the same predicament or if we're doing, whether it's just their tax return or their monthly accounting for them, they all face this. And so, it is something on business owners' minds. And what happens to us all as owners is, as we get into our... It's our baby, right? We pump everything into it. They pump everything into it, but I kind of rebut that. Because what they say is, "All my money is in my business." And then, I start asking questions to them when we're trying to do some planning and say, "Well, what's your business worth?" "I don't know," they say. And I said, "Well, even if it's worth, let's say, X, you may not get all of that money up front for it and you may not get what you think." Everybody, since it is our babies, thinks it's worth well more than it actually is. Our kids better looking than anybody else's kid, right? So it is difficult, and we also try to put some numbers to it and tell them, "Well, if your business is worth," I'm just going to use an example, "a million dollars, could you live on that?" And number one. Number two is is, "What if it took 10 years to get that million? Maybe you better start doing some other things in lieu of. Because I think the business itself is icing on the cake, but I wouldn't just count on it for your retirement." Again, everybody's different. No, for sure. And we've got several things kind of in that line and some other stuff. So I'll dive into some of these thoughts here. So what are some smart strategies for turning a business into an asset? So to that point that you just made, Tony, should Dan and people like Dan, should they look at selling? Should they transition to passive ownership? Or is there another approach? I think this is the biggest reason to be talking to your advisor on something like this, because I think all three of them could have merit. Sometimes business owners get burned out and then they want to sell, but basically, it kind of depends. Without knowing more about his financials, it's hard to say. But let's take, for example, if he's fairly successful, earning a good income and still wants to stay in the business, probably, he might want to make sure, and again, this is a more business owner talk than financial talk, but make sure his business is running on systems, so that it is going to be very sellable when he sells it, not just reliant on him. Because they're generally not worth as much if you're doing all the work. And most of these business owners are, they get to be self-employed, and really, they become an employee in their own business and they're slaves to it. That's a great point. And sometimes, even if you're thinking about selling it, maybe you are the business. What happens when you leave? Would it do as well? Yeah. Would it do as well? And if the clients are only used to dealing with you and you leave, well then, that, again, that doesn't bode well for money coming in for you. But I think the way to turn it into a retirement asset is to get it systemized, get it into something, where maybe you can go into passive ownership. Because then it's worth a lot more. Good points. What about just going ahead and maybe, okay, if you're aware of it, you get to this situation, Dan sent this message in, other people are getting there, he doesn't say how far away his retirement is, just that it's nearing, is it maybe time to stop pumping everything into it and look at some 401k options or something for yourself? Maybe if selling it's not on the horizon, is it time to start feeding what, like a SEP, things of that nature? I would definitely say that. That's one of our biggest key planning points with business owners is that whole retirement area, because a couple things can happen. One, they can cut their taxes while they're doing it, and then, the other thing is they can track better employees. And then, of course, the whole, we've been over it time and time again, about saving for the future allows them to pile up massive amounts of money that the ordinary guy sometimes can't do. And I think they need to do both. We try to get them to definitely do one of those things once we talk about how much money they want to try to put aside. Okay, because there's what? SEP IRAs out there? Solo 401ks? Yep. Simple IRAs. You've got the old fashioned type of pension plans, which are expensive, but very good if you've got a ton of cash flow. So there's like 5, 6, 7 options out there, depending on how much flexibility and how much you want to try to sock away, which you can find something that fits you. Yeah, yeah. Well, so obviously, he prioritized reinvesting in his company over traditional savings, which many people do. So to my question a second ago about, hey, it's time to maybe make a change and start paying yourself and your future self, how do you guys help people kind of prioritize that, right? Because I know that that's probably the concern, if left to his own devices, Dan may just keep pumping into the business, does it require maybe that third party person like yourself to say, "Okay, you need somebody to kind of help you stay accountable?" Or what's your thoughts? I think it definitely does, and I think this kind of bodes to some of the facts of monthly accounting and making sure that you understand, each and every month, exactly what happened in the business and then, year over year, of course. And that generally comes somebody else doing your accounting, because most business owners either don't do it at all or don't do it correctly. And then, of course, it's hard to make good decisions. But once that's done, then yes, it's extremely important for your advisor or your accountant, like in our case, to be trying to tax plan with you and retirement plan at the same time. So it all kind of blends into one for us business owners. So that you're seeing that you're not hurting the business, but you're also seeing, "Hey, I'm actually doing something for me too." Exactly. Yeah. And having, I think, a third party or a second set of eyeballs, whatever you want to call it, kind of helps a little bit, because we do get blind... With all the other conversations we have, Tony, typically, we're our own worst enemies, right? That's right. When it comes to just about anything. So, all right, so if Dan wants to eventually sell the business as part of his retirement plan, what's some things for people who are looking to kind of step out of it? Because like succession plan is important. We don't know what kind of business it is, Tony, but I imagine, for your own business, you probably have a succession plan or you're working on one for sure. Exactly. Yeah. In my own business, my succession plan now is my son, who is in the business and learning. So that's my succession plan, and then, I have a plan B from there. If he decides to change his mind, what's going to happen? But business owners need to have a succession plan of some kind. And if you're in business with a partner or a brother, sister type thing, you better have a buy sell in place, so in case somebody wants out would be another one. The other one would be, like I said before, is trying to make sure that your business is running on as many systems as possible, and it's just not reliant on you. Because I think that's going to basically maximize its value. And then, of course, on top of that, if you could show that you're steadily growing the business, you've got good accounting records and processes in place, that's going to bode very well for a particular buyer to come in and buy themselves an income that they can replicate what you're doing and make money, all while possibly paying you off. That makes sense, Tony. And is there a value in, obviously, getting your company evaluated, evaluated for what it's worth, what they call that evaluation, right? Evaluation, yeah. What's a window for that? Should you do that just anytime, just so you know where you stand? Or if you're thinking about selling it, should you do that a year ahead of time or six months? Or what's your thoughts? My thoughts when people ask me that are a year to two ahead of time, so that you can basically start out the easy way and just try to use some free resources for that. And then, as you get a little closer, you've got to go from basically just looking around at what's selling in your industry, basically from the internet or brokers, to really maybe going out and get a professional evaluation done of the business. And there are companies that do that and they charge a fee and then they go out and do that, kind of like an appraiser would for real estate. And you can find mid range and upper range, just kind of depending on what you're looking for, they can get a little bit pricey, depending on the situation. But then again, maybe not, you may not feel it's pricey at all, so it could be worthwhile. So yeah, I think you got to start getting your ducks in a row, just like anything in retirement, whether you're self-employed or working for somebody else, right? It's all about having a plan and a strategy. So reach out to somebody like Tony and have a conversation, who is a CPA, right? And a CFP. So kind of thinking about both sides of the aisle there, taxation as well as financial planning for the future. And if you've got those questions, need some help, reach out to Tony at yourplanningpros.com, that's yourplanningpros.com, to get started today, get some time on the calendar. Or call him at 844-707-7381 if you're not already working with us. And if you're listening to the podcast and you work with Tony, that's great. If you're not and you're just catching this, feel free to consider subscribing to the podcast, so you can catch future episodes when they come out, on Apple or Spotify or whatever platform you like using. We'd certainly appreciate the support as well. Tony, anything else that I didn't catch on this? Any thoughts you might have? Other than just, like you said, if you need anything, to the listeners, reach out, because this is something for business owners. We love to work with them and make sure that they can get to where they want to be in their financial lives. For sure. So yeah, don't hesitate. Yeah, it gets a little more complicated, I suppose, sometimes than just the normal straight approach. But still, you got to have a plan, no matter what side that you're working with, whether you work for somebody else, like I said, or for yourself. So get on the calendar, and we'll see you next time here with Tony Mauro. Plan With The Tax Man, that's the name of the podcast. We'll catch you a little bit later on.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

Financial mistakes can happen at any age, but they can have a particularly significant impact in your 60s. This episode offers five common financial blunders to avoid during this pivotal decade.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Marc Killian: Welcome into another edition of Plan With The Taxman. We're going to talk about financial mistakes to avoid in our 60s. Financial mistakes can happen at any age, but certainly have a bigger impact in our 60s. So let's get into it this week here on Plan With The Taxman. Hey, everybody, welcome into the podcast. Thanks for hanging out with Tony and myself as we talk investing, finance and retirement. And we got a list of a few financial blunders we want to try to avoid in this very pivotal decade for us when it comes to retirement. So Tony, we'll dive right in this week. I hope you're doing well, but I'm just going to kick it off and get us rolling. So unnecessary spending, let's just start right there. If we're into our 60s at this point, we want to be focused on making sure that we're getting remaining debt down and things of that nature. We're probably not necessarily looking to be on a budget per se, but let's just not be doing anything super crazy, right? Tony Mauro: I would definitely say that this is the best time to make sure that you're on the same page as your advisor with your spending and with how much you've got coming in. And definitely try to avoid some of the unnecessary things. Not saying you can't go out. We talked a little bit about on the last podcast, going out and spending a little bit. Marc Killian: Sure, yeah. Live it up a little bit, because that's what it's there for. Tony Mauro: Right. But you want to definitely limit and avoid that type of stuff that might be unnecessary. Now, how do you do that? Well, we talked a little bit about that on the last one. Marc Killian: Well, you go to number two. Tony Mauro: Yeah. Marc Killian: Well, number two on my list is ignoring retirement planning, right? Tony Mauro: Right. Marc Killian: So how do you avoid unnecessary spending? Well, you don't have a plan. Tony Mauro: You don't have a plan. So yeah, ignoring retirement planning, if you're already in your sixties, you better get something together quick, even if it's just a snapshot of where you're going to be. Marc Killian: Yeah, true. Tony Mauro: You may not have as long obviously, as somebody that's younger to plan, but at least you've got an idea to what you are going to have coming in. Because then you can certainly try to avoid the unnecessary spending if you know what you have coming in. Marc Killian: Well, Tony, if you're 60 and you're thinking that retirement is on the 65, 66, 67 radar for you, is it too late? I mean, I don't think so. I don't think it's ever really too late, it's just you have to be realistic, in the fact that options will be more limited the longer you wait and the closer you get to retirement. Tony Mauro: That's it. I agree totally. I always encourage people to start saving. And we will get that from clients that say, "Well, it might be just too late." It's never too late, but it's managing your expectations like you said. Marc Killian: Yeah, start planning. Tony Mauro: Because as long as you're realistic and start planning, you're going to know what you have. Now, it's not going to be the same as if you've been doing it for 35 years, but that's beside the point now. Marc Killian: Sure, you're there. But don't wait any longer, right? Tony Mauro: Yeah, don't wait any longer. Marc Killian: All right, number three, overlooking healthcare costs. Again, the topic being mistakes to avoid in our sixties. Hopefully, we're not overlooking these, but there's more of them coming. Maybe you're dealing with other little things that you didn't realize and insurance costs going up, whatever it might be. Tony Mauro: And depending on what your health situation is, you start with just the insurance costs and all the [inaudible 00:03:24] that's coming down the pike with that. And as you get to 65 with Medicare and all its supplements and whatnot. But I think you got to look beyond that, especially if you have some ailments and things like that of what other out-of-pocket costs you might have and the cost of care to help you with those. If you don't look at that, again, and it goes back to the other one, if you don't have a plan and budget that in, it's going to be very eye-opening if you need some of that care. Marc Killian: Oh, for sure. Yeah. And we all know healthcare costs are continuing to climb, so you've got to make sure you're having those conversations, looking at social security, the different options there, what that's going to all look like and so on and so forth. Number four, is going to certainly be right up your alley, Tony, one that I'm sure you stress quite often. And that's failing to utilize the tax benefits and being tax efficient. Again, in our sixties, and this could be a big make or break for your retirement strategy, is how tax efficient you are. Tony Mauro: And it's one of the biggest things we stress for ourselves compared to maybe some of the other types of advisors, is we basically being tax people first, definitely the backbone of everything we do is tax efficient investing and tax efficient withdrawals. Because boy, you can cost yourself a lot of money if you just haphazardly take from the wrong pots of money at the wrong time. And so we're constantly trying to work with clients in their sixties about taking money the most tax efficient way to minimize that. Because if you're doing that over 20 years or so, that could be a big number. Marc Killian: Oh yeah, for sure, right? And so tax efficiency, whether it's for you while you're here or even how you leave a legacy, that can be a big make or break piece. And there's so many little facets and parts to the tax efficiency, Tony, that's not even funny. We don't even really realize what it is as lay folks, because we don't do this every day. But you obviously know all the different pieces that you're looking at and it can stack up. I mean, whether it's IRMAA issues when it comes to that tax issue, just the Medicare tax, depending on how you're taking your social security, so on and so forth. Just a lot of little moving parts. Tony Mauro: I think that's one of the biggest areas. I mean, it all fits together. And if you continue to overlook that tax stuff, like I say, you're really going to do your heirs a disservice, I think. Marc Killian: Yeah, for sure. Well, speaking of social security, so that's the next one on my list here. Number five, delaying social security benefits without a plan. So now I said delaying, not turning it on. A lot of the times we hear people say, "Hey, I'm going to turn it on right at 62," and that's a conversation we have. But this is delaying social security benefits without a plan. So if you're trying to max it out at 70, and that may be fine, but have you run the numbers to see what makes the most sense? What's your break-even point? Things of that nature. Tony Mauro: And I'm going to put in a shameless plug here, because we do- Marc Killian: Go for it. Tony Mauro: For ourselves. If you're listening and you want to be on one of our webinars that we do about social security planning and when you should take social security, just shoot me a line and we'll get you on the list for the next one. But we do about four of them a year. But really we go over this in detail in this webinar. It's about 35 minutes. There are a lot of calculators. We have one that we use, and basically, it runs a client through every facet of that, based on their age, what other money they have, their life expectancy based on just their family history and things. So we can give people options of when to maximize that. Because a lot of people just get it stuck in their head of, "Well, I'm going to take it at 62, the earliest, or I'm going to take it at 65 or whenever my full retirement age is." And sometimes it's better to be in between one of those, or maybe even delaying out till max retirement age at 70, when they make you take it. So it's good to have all that in front of you. Social security's not going to give you all that. They are going to give you a report, which is nice, but they don't know the rest of it. They're just going to give you a report on what your benefit would be. But we take that along with everything else we gather, and give you a nice discussion about what is the best time to take that. So at least you got all of your options and you understand it. Marc Killian: And if somebody wants to get involved with one of those, what's the easiest way to do that? Email the office, go to the website, yourplanningpros.com? What's the suggestion there? Tony Mauro: Yeah, I would say go to yourplanningpros.com, my site, and just in the contact me thing, type in your email address, say, "Hey, I want to be included on the social security benefits webinar." Marc Killian: Okay. All right. So again, go to yourplanningpros.com and they're right there under contact. There, you can just click on the box there. You can fill out the information. You can also email Tony, his email address is on there as well. So just let him know that you want to attend. But filling out the little contact form, it's probably be the easiest way to attend one of those and get that webinar information. All right, let's see, what else can we do here? We'll do one or two more and then we'll wrap it up this week, Tony. So underestimating your longevity. Okay, so if you've made it to your sixties, there's some interesting stats out there that you have a pretty high percentage of making it to your eighties, which is wild. Tony Mauro: That's right. Yeah, if you've made it into your sixties, there's a very good chance, and you could just do a Google search just for fun and watch what it pulls up based on male or female. And it may or may not be that accurate, but it's going to give you an idea. But most of the time, we're trying to plan for at least 20 years in retirement and sometimes it's even more than that, based on family history. Because most people, once they get into their sixties, have a really good chance of making it another 20 years. And if it falls short and something happens before then, well at least you've got a great plan that you could pass on to your heirs. But I think most of us when they're in the planning stages, especially early on, don't think they're going to live that long. And the statistics point to otherwise. That's just raw data there. So I don't think you can underestimate that or ignore that. Marc Killian: Yeah, no, for sure. Social Security Administration projects that 69% of people who survive to age 65 will live to 80. So basically, almost 70% of people, if you make it to 65, you're going to make it to 80. It's another 15 years, right? So thinking about longevity and planning for that is an important piece as well. And we'll wrap it up with this final one, and that is just don't forget to work on and build an estate plan, a legacy of some kind. If you're in your sixties, I know we just talked about longevity being there, but there also still is the probability that something could happen and you could pass away. We see a lot of people passing away in their sixties and seventies as well. So just make sure that you've got those estate documents and those legacy documents and things taken care of. Tony Mauro: And most people think of estate planning, it's only for the ultra wealthy. Marc Killian: Right. Tony Mauro: They're not going to have estate tax problems, and you may not. But even without that, like you're saying, a will, you want to have that. You want to have some medical directives, some power of attorneys, things like that, so that you can rest assured that your estate will be handled efficiently and the way that you want it, let alone if you want to really do some planning and start talking about trusts and some other things. I think a lot of people overlook that, thinking they don't have enough and then they leave a mess for their heirs. But I think another thing too, is we didn't really even talk about it, but planning your estate, especially if you need long-term care later on, and that's a whole different discussion. But I think to do that, even people here in Iowa, what a lot of them don't realize, is they may escape federal estate tax, but Iowa has an estate tax with fairly low limits. And if you don't pass everything to a direct heir, anything above $25,000, there's an Iowan inheritance tax. And a lot of people get blindsided by that. So depending on what state you're in, you got to check your state laws too with some of those taxes. Marc Killian: Definitely, definitely. So again, some financial mistakes to avoid in your sixties. Hopefully, that we've got a good plan by the time we get to 60, we've got a good strategy in place, and we can definitely benefit from that. But if you don't, again, don't wait any longer. It doesn't mean you've done anything necessarily wrong. You do have limited options. They're going to be a little bit reduced, but so many people still get a good financial strategy in place, even at 60. So reach out to a qualified pro like Tony today, at yourplanningpros.com, that's yourplanningpros.com, to get started with Des Moines Professional Alternative at Tax Doctor Inc. You can reach out to Tony and his team at yourplanningpros.com. And don't forget to subscribe to us on Apple, Spotify, and YouTube. Tony, thanks for hanging it out and breaking it all down for us. As always, we appreciate your time. Hope everybody has a great week and we'll see you on the future episodes of Plan With The Tax Man. Speaker 6: Securities offered through Avantax Investment Services SM, member FINRA SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.  

As we kick off 2025, a lot of people consider what they want the year to look like and how to put their best foot forward, especially financially. Think: “new year, new me!” To figure out what the new “you” is all about, sometimes it helps to reflect first on what you’ve done in the past and what you want to change moving forward. Today, we’ll talk about the financial decisions and habits you’ve maybe had in the past and what changes you can make this year to embrace the new you.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Speaker 1: New year, new me is the topic of conversation this week on Plan With The Tax Man. As we get firmly into 2025, let's look at ways where we can put the old self to bed and work on our new self from a financial standpoint. Since everybody likes to do that as a New Year's resolution, let's do that financially as well. Let's get into it here on Plan With The Tax Man. What's up, everybody? Welcome into the podcast. Thanks for hanging out with Tony Mauro and myself as we talk investing, finance, and retirement with the big dog, the big kahuna over there at Tax Doctor Inc. Tony Mauro, what's going on, my friend? How are you? Tony Mauro: I'm doing good. Coming off the new year and getting ready for tax season. Speaker 1: Yeah, I bet. Yeah. Tony Mauro: Very relaxed. Yeah. Speaker 1: Yeah. Well, I'm glad you're relaxed, because I'm sure it's going to get hectic right soon-like, you know? So it'll be all up in your business with all that good stuff, but that's all right, because that's what you do. You've been doing this for 30 years, man. You've got a lot of experience. So you ready to go? Tony Mauro: I'm ready to go. We got some good topics to start out this new year. Speaker 1: Yeah. So are you a resolution-y kind of guy? Tony Mauro: Yeah. I have a few, but I tend to write them down, so- Speaker 1: Okay. That helps. Tony Mauro: Yeah, does help. Well, for me, it's a few financial, few personal, and try not to make too big of a list, because otherwise, we don't get it done. Speaker 1: Exactly. Yeah. I spent most of my life not being one, got into my 50s, and then decided last year to write down four, to your point. I only did four, and I was able to accomplish all four, and it made a difference, so I was like, "All right, not bad." You know? But I did forget, actually, there was a lot of things going on, and I didn't do it this year to walk into 2025, so I'm going to see if starting late makes a difference. But I am starting, I just started 10 days late. But there's this thing called Quitter's Day, which you can look up. People make resolutions and then they quit. I want to say I think it's the 16th, which I think is when we're dropping this podcast if I'm not mistaken. So I thought it would be interesting for us to go ahead and continue that trend by saying, okay. We're not going to do the Quitter's Day thing because we're going to launch this after maybe people have kind of weeded themselves out, and do this podcast on new year, new me. So what I'm going to do here is I'm going to give you the old you financial kind of statement, Tony, somebody who might find themselves in one of these categories, and then I want you to give us the new you spin, like what you should try to focus on if you're trying to go in a more positive direction. Okay? Tony Mauro: Sounds good. Speaker 1: All right. So the old you might say, for example, "I overspend, and I know it, and I live beyond my means." Well, kudos, first of all, if you can get yourself to admit that, right? Because that's a tough step right there. But if you are living beyond your means, that's the old you in 2025, the new you should be doing what? Tony Mauro: I think the best thing for the new you really should be to, number one, you have to track your spending so that you know what you're spending money on, so again, so you can prioritize and maybe purge out some of this overspending. But you have to identify what you're spending on first, otherwise you have no idea. And so rather than trying to just come up with that word that I hate, but you think most accountants like it, is budget, I like to just call it a spending plan. And basically, you've got to prioritize and list what you value most and what you can cut out because that is going to be the biggest thing to help you curb that spending. And I'm guilty of it too. I'm kind of an impulse buyer as well from time to time. And you just have to keep that in check because I think that's why so many Americans run up their bills or credit card bills and everything else because they just keep spending thinking that they're going to pay for it later. That doesn't bode well for a good financial plan and good financial health, if you will. Speaker 1: Yeah. And I know people don't like the B-word, but again, you can do a list of wants versus needs or whatever, something to where you can kind of see what it is. Is it still aligning with your priorities? Do you really need it, or is it just a want, right? And try to curb some of those impulse buys. That'll certainly help on that living beyond our means. So good job. All right. Good job with that one. How about this one? That last one could be anybody, people that are a little younger listening to our podcast, people that are a little bit older, whatever. This next one maybe fits a little bit more, Tony, with people who are getting really close to retirement or even in retirement, and they've been saving really, really well for a long time, to a fault, even. The old you is saying, "Look, I saved to a fault, and now I'm afraid to enjoy it," right? And I know that's a real hurdle for some people. They build this nest egg, they get to retirement, and then they don't want to spend it. They don't want to touch it. And so part of your job as an advisor is to go, "Hey, go enjoy yourself. You're going to be okay." Tony Mauro: You're going to be okay. And I've actually said this to clients before that have told me this, and jokingly, but really getting them to think a little bit is when they say that, that they don't want to go spend any of their money. And we keep telling them, "Look, we've been planning and doing a lot of the right things, and you're going to be okay. The numbers say you're going to be okay." What I tell them is, "You know what? As soon as you leave here, go to a nursing home, and just ask if you can walk the halls. And take a look around, or go to a hospital, and look at the people that are sick," and they'd give anything to have their health, number one. But the point of it is, someday it could be taken from us. We don't know. We don't have a magic card that says when we're going to basically be at the end. And so I think I try to get them to understand and prioritize again with some of the things that are most important to them that they want to do before they die, and let's pick off one or two here and there. And it's challenging for them, but most of them end up doing it if they only have to do one at a time. But I do think that sometimes it can be a fault. We're always trying to get people to save, save, save. And for the people that really save, most people are looking at them and saying, "Well, gosh. That doesn't sound like a problem to me," but it is for them, because they save it all and then they can't enjoy it. And that's the whole purpose of having it, right? Is to somehow enjoy it a little bit. I mean, that's what life's about. So a little more psychological, but yes. That's a big one. Speaker 1: Yeah. And I get that it's tough, right? And that's where we're seeing the stuff written form. Coming in and doing the reviews, Tony, that's where you can kind of see, look, all right, maybe you got to take somebody who's in this mode, and you say, "Okay. Spend just a little bit, and then let's see how that happens." "And then we will do the review. We'll do that annual review, and you'll see that you're still in good shape," and maybe that helps them start to learn it's okay to enjoy some of this money that you work so hard for. And as the fun, old saying goes, if you don't fly first class at some point in your retirement, in your life, your kids will, right? Tony Mauro: That's right. Yeah. Speaker 1: They're going to enjoy it. Tony Mauro: That's exactly right. That's a great saying, because that's what's going to happen. Yup. Speaker 1: So that's the importance, that's the value. Well, one of many values really of working with a financial professional. So don't beat yourself up. It's understandable, you worked hard for it, but you also got to enjoy it. You got to have a little bit of fun there as you get into retirement. All right. So next old you statement might be, "I don't know what I have or really where I have it." And that sounds weird to people to think you don't know where your money is, but there's a lot of folks out there, Tony, who maybe don't quite understand what it is they have and where they have it, so what should the new you be doing if this is where you find yourself? Tony Mauro: Well, the short answer is you need to work with a financial pro. But what I mean by that, because that's self-serving a little bit, I understand, is most advisors are now working throughout their plans that they work with clients on, one of the things they do, and it's all online on a portal now, as long as you as the client help the advisor as to everything you have, they're going to create for you a list of where all your accounts are, the amounts, and basically put together a net worth statement for you that's always updated. And you'll want to review that with them once a year to kind of go over it, so at least you can see here's where we were at last time when we talked, here's where we're at now. Now, if you have your investments with that advisor, that's going to update automatically. But you would, in other words, if you're working with an advisor, you don't have to go out and try to create that on your own. You certainly can use a spreadsheet, you can use some personal finance software, that sort of thing. But if you don't want to do that, you certainly can have your advisor help you with that. But the reason it's important, like you said, is you've got to know what your net worth is, or at least close at all times, especially in retirement, when you get on that fixed income, which will help you identify if maybe you are overspending and some things like that, and your balances are going down. Maybe you can pinpoint some of those things, where that money's seeping out. But I do think it's important, and I don't think it has to take a lot of time to create that. You just got to figure out which way you want to go with it. Speaker 1: No, that's a good point, and there's some good things to think about there. And again, it's understandable sometimes because we're so busy with life, and people say, "Well, it's not my thing, finance and math," or whatever, but you got to have a good working knowledge of what you got going on. So this is the new year. It's a good time to take some of those lessons that Tony just gave and put that plan into action. And what about folks that find themselves like this, Tony? That are in this category, the old you saying, "I'm going to pause my investments until things settle down." Saw a lot of email questions come in. The last three or four months of the last year of 2024, people saying, "Well, until the election happens, or this, that, or the other, I'm not going to pump in." Maybe you're still working. "I'm not going to continue to pump into my 401k until things settle down in case the market has a downturn." And to me, first of all, that's just crazy, right? Because there's a couple of reasons why you shouldn't do that. But if anything we've learned in the last five years, Tony, when the hell does anything settle down, right? There's always something- Tony Mauro: It's never settled. Speaker 1: ... going on, right? Tony Mauro: Yeah. I was just at an investment conference with a couple of colleagues over the weekend, and it was interesting that one of the assistants there, so this is an investment advisor's colleague, or assistant, excuse me, that actually said, and so I'll give you both sides of the political spectrum here for a second. She said that she was moving out of Massachusetts because there's too many liberals and she can't stand it. So one advisor on the other hand said he has a client that said they want to move to Portugal because of the current political situation, so both kind of sides of the fence there, but to your point, doesn't really matter who's president. We're not going to get into all of that. They don't really have direct control of your life. So to plan your life around something like that or something similar, I think, is crazy, especially when you're talking about your finances. Because I looked it up, and I shared this stat with them over the weekend, and I'll share it here, but people that want to try to time the market usually don't have good success. Who's going to say when to get back in? And then I always show them my old cost of timing since '03 to about '23, if you missed even the 60 best days in the S&P, I mean, your return is 93% lower than if you just stayed invested the whole time. And we've had a lot of weird stuff happen, if you think about it, since '02. Speaker 1: Since 2000, really. Tony Mauro: Yeah. Since 2000. You start naming off the big events, and yes, the market goes down at times and then it comes back. So I think by pausing, you or your advisor, I would challenge you. You're not going to beat the market. If anything, you're going to lag it, and then when you miss the best days, I think it's really going to cause you harm. Speaker 1: I mean, even just the basic principles, Tony, your dollar cost averaging, right? So yes, the market's going to dip down. But if you're still working, for example, not only are you not getting the company match because you've paused it, so you're losing money there, but you're also not buying whatever it is that you're set up in on the dips, right? So, yeah. I mean, it's scary, I understand that, but it's a bad strategy. There really is no positive spin on saying, "I'm just going to pause things until it settles down," because nothing ever really settles down. That's why you have a plan. That's why you have a strategy. Then you don't have to necessarily worry about things settling down. And that really feeds to our last one, Tony, which is the old you just says, "My parents didn't have a plan and it worked out for them. I don't have a plan. I'll just hope for the best," right? That's just silly too, because your parents probably had a wholly different set of circumstances than you do, first of all, and hope is not an option. Tony Mauro: I don't think hope's an option in today's world, you know? When our- Speaker 1: Not from a financial standpoint, no. Tony Mauro: Yeah. From a financial standpoint, for sure. Back when the parents, people worked for the same employer generally for 30, 40 years, many had pensions that they can't outlive. Those days are all gone now, and it's up to us. Can't depend on the government or anybody else to finance our retirement. And so I think if you don't have a plan, yeah. There's a chance that you could make it, but I think the risk is there that you may not have the kind of retirement that you thought you would've, and why not just plan? It's not painful. It just takes a little bit of work. Especially if you have an advisor, they're going to kind of guide you and tell you what you need to give them. And then if they're good, they're going to say, "Hey, look. We want to meet once, twice a year, we want to go over this, we want to make changes, so you'll always know where you're at." I wouldn't want to risk my retirement with no plan. I mean, if you do, who knows? Speaker 1: Yeah, exactly. That's the whole point, right? You're kind of just playing with those things that you don't need to play with. I mean, in today's era, there's just really kind of no excuse for it, right? So get yourself a strategy put together. The days of thinking you have to be uber rich to have a financial advisor are long over, and most people are in better shape than they realize when they do sit down for an initial consultation with financial professionals. If you've done a modest job of being a responsible financial steward of your money, you're probably in better shape than you realize. I think a lot of people find themselves in that category. So do yourself a favor, get a plan, get a strategy, focus on the new year, new you financially, and reach out to Tony and his team at YourPlanningPros.com. That is YourPlanningPros.com. He's got 30 years of experience in the industry. He's a CPA, a CFP, and an EA, and a great resource for you to tap into. Don't forget to subscribe to the podcast on Apple or Spotify or whatever platform you like using. It's Plan With The Tax Man with Tony Mauro, and again, you can find all that information at YourPlanningPros.com. Tony, my friend, thanks for hanging out and breaking it down as always. I will see you in a couple of weeks. Tony Mauro: All right. Talk soon. Speaker 1: We'll catch you next time here on Plan With The Tax Man.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

Today, we’re unveiling the 2025 Method to transform your money mindset. Whether you’re overwhelmed by debt, stuck in a savings rut, or simply stressed about money, this episode is packed with actionable strategies to help you think differently and achieve financial comfort.    Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Speaker 1: Today we're going to tackle the money mindset transformation method. Hopefully to get us on the right path for thinking in 2025, some positive thoughts and some resolutions maybe, if you will, here on Plan With The Tax Man.   What's going on everybody? Welcome into the final episode of the 2024 calendar year of Tony and myself's podcast here. Plan With The Tax Man. Of course, Tony is the tax man, Tony Mauro. He is Des Moines professional alternative at Tax Doctor Inc., of course, he serves clients all over. So if you've got some questions, need some help, reach out to Tony and his team at Tax Doctor Inc., online at yourplanningpros.com. That's your planningpros.com. He's a CPA, a CFP and an EA of 30 plus years experience in the industry. So great resource for you to tap into.   And Tony, you and I were talking about trying to eat better and get healthy and so on and so forth. And it is that time of the year, right? The end of the year going into the new season where we all want to do some sort of resolution or mindset change. And so we thought it'd be a good idea to maybe talk about that from a money standpoint. How to take some of the negative thoughts that kind of permeate our brains and find a positive better way to spend those. And so I thought that'd be fun this last episode. How you doing?   Tony Mauro: I'm doing good. Coming off Christmas and yeah, everybody's thinking about the old New Year's resolution, so this is perfect timing.   Speaker 1: Do you consider yourself a glass half empty or glass half full kind of person?   Tony Mauro: I'm the glass half full for sure.   Speaker 1: Okay, good.   Tony Mauro: And I do spend some time every year just kind of going through what I want to do for the upcoming year, both my wife and I, even on a personal level, whether it's vacations or just stuff needed around the house to financial moves. It's a time of year to put them down and see what happens.   Speaker 1: Yeah, for sure. Yeah, so if you've got any tips on how to change your mindset along the way and building new habits, well obviously it's a great time to share them. So what I'll do, Tony, is I'll give you kind of the negative thought that we tend to hear in the industry and then you give us maybe the more positive upbeat way of thinking about it, try to change that mindset. Okay?   Tony Mauro: Okay.   Speaker 1: All right. So we'll just jump around on my list here because Lord knows there's plenty of them. So let's start with a negative thought that's certainly been bothering people this past year with inflation being so high and the cost of living going up and credit card debt got a little out of control. People will say, "Hey, debt, it's ruining my life." They can't see past some of the charges they've ran up. What's a way to reframe those negative thoughts, if debt is ruining your life or you feel like it is?   Tony Mauro: You feel like it is, yeah. Well, and you hear that a lot and most of the time people say that because they look at their credit card statements because that type of debt can be ugly to start looking at. Certain types of debt really aren't as bad as people think. Mortgages are something most of us need. We can't buy our houses for cash. Student loans with low interest rates allow us to get further ahead and make more money with our educations. And so both of these generally are paying for assets that you can use in the future to hopefully help you increase your wealth and get to your goals. Now, the happy-   Speaker 1: It's an investment in yourself, right? Yeah.   Tony Mauro: It's an investment in yourself. If you do have the bad debt though, you need to work with somebody, even if it's bad, there are ways that you can tackle that bad debt. So eventually you're not going to be having that bad thought of it's ruining your life. You got to take action and do something about it.   Speaker 1: Yeah, it's true. So looking at the other types of debt and saying, "Hey, these are an investment in me," that's a positive way of doing that. And maybe that flows right along with this one too, which is the negative thought is, well, because it's so expensive right now, I don't earn enough to save, let alone invest. I'd like to, right? I'd like to save more. I'd like to invest, but God, I'm just living paycheck to paycheck. I don't earn enough to do so. And that's a tough one, especially when we're younger, so when we're in our twenties or even thirties, but we've got to find a way to turn that negative positive.   Tony Mauro: You do. And really the easiest way is to start very small. Well, I should back up a minute. The easiest way is you need to work with somebody I think, to figure out what you've got coming in and what you've got going out every month and literally detail it out. Because there are some small, small cuts that we all can make on things we blow money on to at least divert into some savings. I mean, if it's 20, 30 bucks a month-   Speaker 1: Exactly.   Tony Mauro: ... or 50 bucks a month, it gets you on the road to saying, okay, I can do this. And for most of us, whether it's a pack of cigarettes, a case of beer or Starbucks, whatever, once you start itemizing some of that out, you're thinking, oh gosh, we spend a lot of money on that.   Speaker 1: Amazon orders, right?   Tony Mauro: Amazon's another one. And so I think you got to take that mindset of surely you can find a couple of bucks, especially if you sit down and analyze it. Because if you start young enough, even small amounts can add up to big numbers over 20, 30, 40 years.   Speaker 1: Oh yeah, well think about something, I don't know, let me go with something as simple as like Netflix. It's a $30 a month subscription. So do you really need it? How much do you actually watch it? Now, I'm not saying that budgets are fun, but if you find yourself in that negative thought, out of that, I can't put anything away, $30 a month. If you're younger, well even if you're a little bit older, that adds up. 30 times 12. And putting in that something that's growing a little money, well then that's even better. So that's how you get that way.   And actually I'll use that one to jump to the next one. I'm going to jump around on my list here, Tony. But budgets, right? People are like, oh, budgets suck. They're restrictive. I don't want to have to live that way. And you could look at this whether you're a pre-retiree, which is a lot of our demographic, or retiree or even a little bit younger, you've probably lived on a budget throughout every stage of your life, but for some reason, retirees, they hate this word. They feel like, oh, I've worked really hard. I want to be able to enjoy myself in retirement. A budget doesn't mean necessarily that you can't enjoy yourself.   Tony Mauro: That's right. And everybody thinks that. If I create a budget and actually detail it out, that I can't go over this budget. That is so far from the-   Speaker 1: It's restrictive.   Tony Mauro: ... truth.   Speaker 1: I don't want to have to live on a plan. But you've always lived on a plan.   Tony Mauro: Whether you wrote it down or not, you've always had a plan. It may have been a bad plan, but if you ask anybody, in my opinion, what they.... They can kind of give you, "Well, I take in this much roughly, and I spend this much, and I don't know what I spend it on, but I know I do." That's kind of a half budget there. But if you can detail it out, all it is it points out things to help you make decisions. Do I still want to keep spending money on that or maybe I don't and want to divert it somewhere else? I have a budget. I mean, if you're really ultra into it, you need to use some financial software, in other words, Quicken, Mint, or some other ones, and have every transaction that comes in your household, every transaction goes out, detailed out in a little mini P&L or monthly saving or earning and spending report, so you can see.   For us, where we tend to spend a lot of money for example, is dining out. And sometimes we look at our thing and say, "Well, we spent a lot of money last month dining out, that's kind of over where we want to be. Maybe let's try to fix that."   Speaker 1: Reigning that in a little bit.   Tony Mauro: That's all budget is, is just reigning it in.   Speaker 1: Take that negative thought of it being restrictive and switch it to a budget is a tool for freedom. It gives me the freedom to go out to dinner, to your point you just made, because I know what my limits are. So we can go out and have ourselves a good time, but it also keeps me from getting myself into trouble. So again, taking the negative thoughts and reframing them in a positive manner. And look, you can play word association games if you want. A lot of people, instead of calling it a budget, they call it a spending plan, right? It's like, okay, fine, call it whatever you want. Call it hopscotch for all I care. But just realize that it can be a useful tool so that you don't get yourself into bad shape.   Okay, good. Good stuff. Let's see, what else could we talk about? Let's jump around different things. Taxes. So one of your favorite topics. So look, the negative thought is taxes suck. They're complicated, right? I don't get it. They eat up my income. They're taking so much of my money, right? Yes, it's hard to argue this one, Tony. It's frustrating, but how can we be a little bit more positive, at least as far as dealing with the fact that we don't have a whole lot of choice. We have to play this game.   Tony Mauro: You have to play the game. And taxes, you're exactly right, they're complicated. They are one of our biggest expenses. However, as bad, and sometimes I get on the government and everything, it's not like the old English where they just come around and say, pay us X, like to a king type of thing. They give us all kinds of laws that a lot of times, especially if you're trying to do things on your own, you don't take advantage of. Because there is some opportunities that they give you to save for retirement. They give you opportunities for deductions if you're out spending on a new house with a mortgage, student loan interest, some of that stuff we all talked about with the debt. So you've got to be able to take advantage of some of that because that is tax efficient investing and also spending. So while it's a bad thing, you got to use it to whatever laws are on the books at the time to the best of your advantage and to try to grow your wealth using that part of the game.   Speaker 1: Yeah, exactly.   Tony Mauro: It's part of it.   Speaker 1: And right along with that is the structure of the system that we have is investing. The negative thought being, man investing is so risky, it's so complicated. Same kind of feeling. A lot of people are like, I want to do it, but I don't understand it enough or it intimidates me. So we've got to be able to be positive because it's still a great way for you to grow your wealth and obviously outpace inflation. So what's the positive spin?   Tony Mauro: I think the positive spin on that is your best bet is to work with an advisor of some kind so that they can explain how over the long term, it reduces your risk over time, especially with diversification.   Speaker 1: With a strategy, right?   Tony Mauro: With a good strategy. It's one of the only ways you're going to be able to grow your wealth for the future. There are other ways. You can have your own business, you can get into rentals. There's all kinds of ways to make money, but you got to be able to save some of that money for the future. And I think that's where some people get a little intimidated, especially with the 24/7 information we have coming at us all the time. I mean, whether it's TV, internet, everything else, it's really not that complicated, especially if you have a long-term goal.   Speaker 1: I was going to say, the key I think I took from you there was the long-term approach. If you've got a straightforward long-term approach, you don't have to be trying to day-trade or be some sort of Wall Street whiz kid, but a simple longterm approach can significantly reduce the risk concerns that you have. Now, you're still going to have money at risk. That's the point. So that you can kind of grow and outpace inflation. But I think it doesn't have to be nearly as intimidating as many of us initially make it out to be. My wife says the same thing. She's like, "Oh, I don't want to mess with that stuff. It just scares me too much." So I started showing her some simpler things and she's like, "Oh, this is not so bad." So it's just a matter of coaching.   Tony Mauro: Training. It is. And really with today's, especially in the funds area, mutual funds, they make it pretty easy, and they have great portfolios, many of them, and make it very easy for a small investor to just get started and it's pretty set it and forget it. You got to have a plan in place, but you definitely want to keep a long-term approach. And I wouldn't let that get you too down about it.   Speaker 1: Yeah, yeah, for sure. All right, well I'm going to do one last one, negative thought. I'm going to combine two because they kind of work together to me. But the negative thought people have is just around money in general. I'm terrible with it. It's stressful. I make bad decisions with it. Whatever. Whatever you kind of find yourself feeling about money. Like, "This thing, I stink at it. It just stresses me out." Well, there's a simple way to think, you've got to change your mindset about money because it's obviously something that we have to use in society. So what's the positive thought about it?   Tony Mauro: I think the most positive thought that I always think about, and I tell my son this too, everybody wants to achieve whatever level of wealth that they can. But it really just is a tool, I call it a tool to use for experiences that I want to do while I'm on this planet and give me the time that I can go out and do them while I still have-   Speaker 1: Yeah, it's a tool. Exactly.   Tony Mauro: ... some decent health.   Speaker 1: It's no different than a hammer. If you're trying to build a house, you need a hammer. If you're trying to build a life, you need money. It's a tool.   Tony Mauro: It's a tool. I mean, it would be great if we all could do whatever we want and there was no money and we just did whatever we wanted and we could do it. Well, that's not the way the world works.   Speaker 1: You just showed up at Disney World and they let you go around and do whatever you want. Unfortunately, somebody has to pay for the maintenance, right?   Tony Mauro: Somebody has to pay for all that. So it shouldn't be stressful for you. It shouldn't be the root of your problems. But I think this is where some of the stuff we've talked about in the past and even today, about staying on track and having a plan and having someone help you so that you don't feel stressed out about this money stuff because it really shouldn't be stressing you out.   Speaker 1: Well, as we go into the new year, making resolutions is something we all do. So start trying to be more positive, I think, in not just necessarily making a resolution or a wish, because is it a reality if you don't act on it? Maybe write some things down. That goes a long way for people, have success doing that. Maybe write down some goals that you want to attain and then take some action steps on how to do that. And maybe for many people, the money side of things is just finally working with someone who can shine the light on the stuff that we're just not used to doing day in and day out because we're so busy living our lives. But we do need that tool, that tool called money.   So get yourself on the calendar, reach out to Tony and his team at yourplanningpros.com. Get some time to talk with them in the New Year at yourplanningpros.com. And don't forget to subscribe to us on Apple or Spotify or YouTube, whatever platform you like listening to podcasts on, and that way you catch new episodes when they come out. Tony, thanks for hanging out my friend. Have a great New Year and I'll see you in the New Year.   Tony Mauro: We'll see you in the New Year and everybody else have a great New Year as well. Stay safe.   Speaker 1: Yeah, absolutely. We'll catch you next time here on Plan With The Tax Man with Tony Mauro from Tax Doctor Inc.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.

The holiday season is here, and while you’re stuffing stockings for your loved ones, don’t forget to stuff your own financial stocking with tips that can bring you closer to a secure retirement. Today, we’re unwrapping 10 bite-sized, actionable ideas to help you save smarter, invest better, and plan for the future you deserve.   Important Links: Website: http://www.yourplanningpros.com Call: 844-707-7381   ----more---- Transcript:  Speaker 1: The holiday season is upon us. And while you're stuffing stockings for your loved ones, don't forget to stuff your own financial stocking with hopefully some tips that can bring you closer to a secure retirement. Today on Plan With The Tax Man, let's look at some financial freedom and some best stocking stuffers in 2024.   Hey everybody, welcome in to the podcast. Thanks for hanging out with Tony Mauro and myself as we talk investing, finance, retirement. We thought we'd have a little fun here. As this is our early December episode, we're going to unwrap a few action items to hopefully help you be a little bit better on your way towards retirement with Tony and just have a little fun with this concept since it's that time of the year. What's going on, my friend? How are you?   Speaker 2: I'm doing good. Just off of Thanksgiving and a quick vacation. So although it's getting cold here, it's the holidays, so. My favorite time of year.   Speaker 1: It is what it is. I mean, it's that time of the year and it comes fast and furious too. It's like soon as one starts, it just, well, snowballs, no pun intended, but it just snowballs its way through to the end of the year. But anyway, well, I'm glad you're doing well. Hopefully our listeners are also. And so let's have a little fun here. Why we might want some of these things as financial stocking stuffers, okay? Is it a good idea as a stocking stuffer? Is it a bad idea? That kind of thing. Have a little fun with it, wherever you want to take it.   Speaker 2: All right.   Speaker 1: All right, so I'll give you the item. You tell us what you think. All right, so the first one, maxing out your retirement contributions. Is this something you'd like to have in your stocking, is to max those out?   Speaker 2: I would say definitely, yes. And for those of the people listening that are in the Iowa area, I actually brought the newspaper article in to share with my staff and it was an article about people that are mostly in the central Iowa area just living on social security. And it's a sad article and I'd encourage people to read it, but the point of it was you don't want to end up just living off social security, which means that, and I tell people this literally like a broken record every tax season, you need to increase your retirement contributions to whatever you're doing. And if you haven't started, you need to start because nobody's going to be there to take care of you and social security, while it's a safety net, it's not a very good existence. And so I would definitely say that's number one on my list.   Speaker 1: Yeah, max it out. Especially as we get to 50. 50 plus, you get those catch up contribution stages, making more money than ever hopefully, kids are off the payroll hopefully. So max those jokers out. Certainly a good idea for a stocking stuffer. All right, diversifying your investments. If somebody says, "Hey, Tony, for Christmas this year, I'm going to help you diversify your investments." That sounds like a pretty good stocking stuffer.   Speaker 2: Absolutely. It goes right along with number one that you definitely don't want to have too much of your investments, of course, concentrated in one area. The old adage, and you still hear some people having it where I've got all my 401(k) wrapped up in my own company's stock. That's probably not the best, that's an extreme example. But I do think you need to be diversified. This is where an advisor can certainly help you and provide some value to make sure you're adequately diversified so that you've always got something in your portfolio that might be doing well when other sectors may not be.   Speaker 1: Yeah, yeah. And to kind of have fun and play on the holiday spirit here, again, you said you want a qualified professional, an advisor to help you. Yes, that is the preferred thing. Not just having Cousin Eddie from the Vacation movies. You don't want Cousin Eddie helping you diversify.   Speaker 2: We don't want Cousin Eddie. No, no.   Speaker 1: We don't want that. We want a qualified like Tony helping us. Same with all of these. So what about reviewing our social security strategy? So good time to think about that and say, "Hey, you know what? For Christmas, I want to make sure my social security strategy is sound as a pound."   Speaker 2: And of course all of these coming around Christmas, it's kind of coming into the new year where people start to think about this. But social security strategy and when to take it, that's always a big question on people's minds as they approach 50 and beyond. And there's some nice calculators that we have that can help you and that we can discuss that on what's the best optimization strategy for you because it's different for everybody. Yes, social security, you can take it early at 62 and then you've got a full retirement age and then of course the latest. But depending on your situation and longevity and all kinds of other things, I think it's important to review that. And believe it or not, social security administration does make it relatively easy to go out and get your report online. And if you can't get it, we'll help you get it, but I do think that's very important.   Speaker 1: Yeah, that's a great point for sure. And speaking of optimization, our next one is optimizing tax efficiency. Well, as a CPA, I know you're all on board for that one.   Speaker 2: I am. This is my big pet peeve, because I talked to a lot of people about yes, you might be working with an advisor or maybe you're not, but are you planning with a tax efficiency slant or making sure you optimize or reduce, let's put it should be, taxes because it's usually the biggest thing in our whole life is paying these taxes, whether it's now or deferred. And you really have to try to maximize your tax savings all throughout the investment life. So that's the one we hit on, is that and everything we talk about.   Speaker 1: Yeah, I mean, tax efficiency is going to go a long way. I mean, none of us want to pay taxes. We don't like the... We get taxed to death as it is, but the rules are the rules, so we have to adhere and follow along. But you can be efficient and hopefully pay as little as legally possible.   Speaker 2: Exactly, you got to use them to your advantage.   Speaker 1: That's right.   Speaker 2: Yep.   Speaker 1: Play the game as best you can.   Speaker 2: Best you can, yeah.   Speaker 1: Yeah, for sure. Okay, so another stocking stuffer idea, Tony, would it be a good thing to boost that emergency fund?   Speaker 2: I would definitely say yes. Another thing we talk about with every client that we work with is it's amazing how many people don't have emergency funds and it's never a bad idea to boost it to a level where between you and your advisor agree upon. It's a little different for everybody, the old adage three to six months of income, but it could be different for different things. But boy, it's essential to have that at least until you're at retirement age and then you can back it down some, but it's not a bad idea to even have it in the wealth distribution stage just for those things that pop up. So we do like to go over that. We do like to make sure that people, even if it's just a few bucks every month to get that boosted every year.   Speaker 1: Got you, okay. I'm going to throw a bonus one or two in here at you as well, Tony, catch you off guard a little bit. Not that you don't talk about this enough stuff, you'll be just fine, but based on what you were kind of talking about right there, it made me think about something else. Should we, at the end of the year, we're thinking this is our early December, we're talking stocking stuffers. What about rebalancing our portfolio? Is it a good idea calendar wise, maybe every December or every January to just kind of take a look at things and make sure we're rebalanced properly if we don't have someone like yourself doing it for us?   Speaker 2: I definitely think it is. If you are working on it on your own, you definitely want to go in and rebalance toward the end of the year right after the first to make sure that you're continuing with your original investment philosophy. And because what happens is is if you've got say 10 different investments over 10 different sectors, some of those sectors are going to do very well during the year and some are going to do worse.   Speaker 1: And the market's done great, the last year.   Speaker 2: Yeah, market's done great.   Speaker 1: But you may have a couple of dogs in there.   Speaker 2: Yeah, and so what you want to try to do is rebalance so that two to three years go by and all of a sudden, let's say for example, your growth sector is now 75, 80% of your portfolio, that might be out of balance with what you originally wanted to have in the overall strategy. And so by doing that, you also in essence kind of sell high and buy low, because you're going to rebalance and you're going to keep that balance so that when sectors that were doing poorly start to perform, you're adequately invested in those. So I do think that's a very, very good idea.   Speaker 1: Yeah, and it's been doing really well. The market has to give and take. The market rebalances, if you think about it, that concept of you want to rebalance your own portfolio, well, the market has to rebalance itself and we're probably going to see some volatility coming into the new year with new changes and things happening and administration changes. And I think ultimately, I think if you look at the statistics, Tony, just about every presidency, the market tends to go up, but there is going to be some shakes along the way. That's what it does. It's par for the course.   So rebalancing is a good way, especially at the end of a good run like we're seeing right now to maybe make sure you're still aligned with your risk tolerance and all those good things. So good conversation piece to have. Let's do two more and then we'll wrap it up this week, Tony. How about considering Roth conversions to reduce future taxes, especially now that we may see, we don't know yet, we'll see probably in the first a hundred days, but we may see the current tax cuts and jobs acts extended moving past '25, which it was set to expire on. So that could be a good stocking idea.   Speaker 2: It could be a real good stocking idea. I'm big on the Roth conversions to reduce future taxes. Especially what we do is basically fill up the same tax bracket of clients in, convert some tax deferred to tax-free, which is the Roth conversion, and then try to do that every year and not bump them into the next tax bracket where they're paying more taxes. But I agree, depending on what happens, whether these things are extended beyond '25 or not, it could make more sense than ever to maybe start doing that depending on the news that comes out.   Speaker 1: Because if they don't make a change, your window's pretty limited. You've got basically just a year left to do some conversions and you want to do that smartly so that you're not bumping tax brackets. But if they extend it, well now you can get back to that Roth-ing over time conversation.   Speaker 2: Exactly. And if they don't extend, going back to that's the whole optimizing for tax efficiency is making sure that you're getting enough into the tax-free bucket, but doing it wisely and not needlessly overpaying on taxes, it's not going to ruin you. But why pay more in taxes than we need to?   Speaker 1: And so many people aren't clear on how the steps work. You want to fill up the steps before you go to the next bracket.   Speaker 2: Exactly, exactly. So they don't understand. They forget about the progressiveness of the tax rates, where that comes into play and when we can show them that they can, if we only fill up this bracket, then we can save quite a bit of taxes and trying to do it all at once.   Speaker 1: If you're in the 22% tax bracket, someone's like, well, every dime I make is taxed at 22% and that's not accurate.   Speaker 2: True. Yeah, it's not accurate. And as soon as you go a dime over the limit, now everything beyond that limit is 24.   Speaker 1: Beyond that limit, exactly. So even if you did pop a bracket, it may not be the worst thing. It just depends on how much. So again, it's about filling up the brackets and doing it properly. So that's where again, you want to work with a qualified professional to help you with that stuff because it can get a little tricky. And the IRS make things tricky, no. So yeah, definitely work with someone like Tony's, a CPA and a CFP. And that brings me to my last one, which is just schedule a conversation. So for a stocking stuffer, it's a good stocking stuffer, schedule an annual financial checkup, or maybe even a first time checkup, Tony, with a qualified pro to see where you're at.   Speaker 2: I agree. And of course I have a skin in the game because what we do for a living, but obviously if you have a financial professional already, hopefully they've reached out to you or you're at least getting an annual meeting out of that, because you do need a financial checkup to see how things have gone throughout the year for you. And even if you're on your own, a lot of people will provide free financial checkups or at a small fee and you can bring them in your portfolio and everything else you've got going. And they can sit and tell you, number one, I mean, returns and diversification, some of this other stuff we've talked about, but they may hit on some things in a plan that you haven't thought about. We don't have a lot of time to talk about today, whether it be insurance, long-term care, social security planning, some things like that. Maybe a legacy and estate planning as well. So it's definitely worth at least getting an unbiased opinion.   Speaker 1: Yeah, definitely. And so certainly would be a good stocking stuffer for yourself to say, "Hey, I'm going to get off my duff and I'm going to go talk with a qualified professional and see what's going on, see where I'm at." Maybe it's a second opinion on a plan you got a couple of years ago. Maybe it's a first opinion, or maybe it's just an annual checkup with your advisor, but you haven't talked to him for a little bit and you're thinking, "I want to make sure things are all set up. My ducks are all in a row, so to speak." So that's our podcast this week. So hopefully you guys had a little fun and enjoyed the conversation with Tony and I as usual to try to highlight some useful nuggets of information when it comes to getting ready for retirement.   And as always, if you need some help, reach out to Tony and his team at yourplanningpros.com. That's yourplanningpros.com or call him at (844) 707-7381. We'll have that information in the show description links as well and you can check all that good stuff out. Tony, my friend, thanks for hanging out. I always appreciate you and I guess we'll talk right after Christmas, so I'll say Merry Christmas to you.   Speaker 2: Yeah, Merry Christmas to you and anybody listening. Have a great holidays.   Speaker 1: Absolutely. And we'll see you next time here on Plan With The Tax Man. Don't forget to subscribe to us on Apple or Spotify or whatever app you like using. Just type in Plan With The Tax Man.   Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.