Latest / Money In Motion with Klaas Financial / From Paycheck to Portfolio Income

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From Paycheck to Portfolio Income · Money In Motion with Klaas Financial

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  Speaker 1: This week're going to be talking about going from your
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  Speaker 1: paycheck to your portfolio for income. We'll get the details
• 0:05
  Speaker 1: from CJ. Claws and Eric Schwartz of Class Financial. Don't
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  Speaker 1: forget though, it doesn't matter what the uh what the
• 0:10
  Speaker 1: topic at hand is. If you've got a question about
• 0:12
  Speaker 1: our retirement planning, we've got the go to folks here
• 0:15
  Speaker 1: with us. We'd love to get you call this morning.
• 0:16
  Speaker 1: Six oh eight three two one thirteen ten. That's six
• 0:19
  Speaker 1: oh eight three two one thirteen ten. Of course, you
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  Speaker 1: can learn more about Class Financial on their website coss
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  Speaker 1: financial dot com. That's coss k l aasfinancial dot com
• 0:30
  Speaker 1: is the website. A lot of great information about Class
• 0:33
  Speaker 1: Financial right on the site, including an opportunity to start
• 0:35
  Speaker 1: a complementary chat right at classfinancial dot com. Or you
• 0:38
  Speaker 1: can give a call six oh eight four four two
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  Speaker 1: five six three seven. No charge for that initial get
• 0:43
  Speaker 1: to know your appointment at Class Financial. It will be
• 0:46
  Speaker 1: complementary to you.
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  Speaker 2: Again.
• 0:47
  Speaker 1: Their number for the office six oh eight four four
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  Speaker 1: two five six three seven and the number to get
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  Speaker 1: on the air six oh eight three two one thirteen ten.
• 0:54
  Speaker 1: That's six oh eight three two one thirteen ten. As
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  Speaker 1: mentioned joining us this morning our CJ Closs and Eric Schwarz.
• 1:00
  Speaker 2: C J.
• 1:00
  Speaker 1: How you doing this morning.
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  Speaker 2: I'm doing great, Sean, how are you doing?
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  Speaker 1: Really good? Great to talk with you. Eric, how have
• 1:06
  Speaker 1: you been.
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  Speaker 3: I'm doing, Sean. I'm really excited for today's show because
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  Speaker 3: this is actually a little behind the scenes here. This
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  Speaker 3: is a client requested topic we're gonna cover for real.
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  Speaker 2: That's great.
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  Speaker 1: Yes, yes, I feel like at the end of the
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  Speaker 1: show we need to like almost like credits at the end,
• 1:24
  Speaker 1: like have a some kind of radio scroll. Thanks everybody,
• 1:27
  Speaker 1: So it is. It's a great conversation. I got a
• 1:30
  Speaker 1: chance to preview our show notes for today, and I'm
• 1:33
  Speaker 1: definitely one you're gonna want to pay close attention to
• 1:35
  Speaker 1: for a number of reasons. One great conversation, a lot
• 1:38
  Speaker 1: of great information, also a chance to win a fantastic prize.
• 1:41
  Speaker 1: With the Class Quiz Question Leak. This week, our friends
• 1:44
  Speaker 1: from Class Financial have provided a twenty five dollars gift
• 1:46
  Speaker 1: card to Starbucks. Little tip listen closely. Oftentimes just about
• 1:50
  Speaker 1: every show, both the question and answer to the Class
• 1:53
  Speaker 1: Quiz Question Leak come up during the program and before
• 1:56
  Speaker 1: we start talking about how to create a reliable cash
• 1:59
  Speaker 1: flow in retire Let's actually look back Eric at last
• 2:02
  Speaker 1: week's program and get the class quiz question and answer
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  Speaker 1: there as well.
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  Speaker 3: Absolutely So, last week we talked about investment strategy and
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  Speaker 3: our question was a true or false one. One of
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  Speaker 3: Klass Financial's core investment beliefs is that participation matters more
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  Speaker 3: than prediction. And I can tell you from the show
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  Speaker 3: notes and also from talking to Josh here that the
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  Speaker 3: answer to that is true.
• 2:29
  Speaker 1: Yes, yes it is, Yes it is. And Eric, I
• 2:32
  Speaker 1: will encourage you as well as everybody else. I know
• 2:34
  Speaker 1: you had the week off last week. Listen back to
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  Speaker 1: the show was a really really good one. As always
• 2:38
  Speaker 1: said on over to class financial dot com. That's Coss
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  Speaker 1: k l aas financial dot com. Listen back to the
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  Speaker 1: previous show's podcast. Also this program, we'll be posted there
• 2:47
  Speaker 1: later this morning. Again that's Cossfinancial dot Com. And again
• 2:51
  Speaker 1: you have a chance to win with class quiz question
• 2:53
  Speaker 1: A week a little bit later on the program a
• 2:54
  Speaker 1: twenty five dollars gift card to Starbucks. So today we're
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  Speaker 1: going to be talking about how to build a retirement
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  Speaker 1: page check using multiple income sources working together. And CJ,
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  Speaker 1: why is this transition so important for retirees to understand.
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  Speaker 2: Yeah, we're really excited about this topic today, not only
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  Speaker 2: because of what Eric just said. It was a client
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  Speaker 2: requested topic, but honestly, when it was brought up to
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  Speaker 2: us by the client, we said, gosh, we do have
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  Speaker 2: a lot of people that ask this question, which is
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  Speaker 2: kind of this notion of, Hey, I have spent thirty
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  Speaker 2: forty fifty years of my life generating working income, right,
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  Speaker 2: and that's something I'm used to. I'm paid every two
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  Speaker 2: weeks or twice a month, you know, twenty six or
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  Speaker 2: twenty four pay periods a year, and literally everything in
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  Speaker 2: my life is built around that, right when my bills
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  Speaker 2: come due, when I make payments for things. Everything is
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  Speaker 2: built around this notion. And so there's a huge amount
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  Speaker 2: of fear that enters people's minds when they start recognizing
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  Speaker 2: that in retirement it might be different. Now, as many
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  Speaker 2: of you are going to hear throughout this show, we
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  Speaker 2: generally suggest that when you make that shift from working
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  Speaker 2: in income to portfolio income, that you try to keep
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  Speaker 2: it similar in frequency and structure to what you had
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  Speaker 2: while you were working. And one of the reasons we
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  Speaker 2: generally say that is because don't try to, you know,
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  Speaker 2: replace a forty or fifty year habit with a new
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  Speaker 2: strategy that that's fraught with problems. So we find that
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  Speaker 2: this is one of the biggest mindset shifts that retirees face,
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  Speaker 2: and it often catches people off guard. So during your career,
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  Speaker 2: income is centralized and it comes from your employer, so
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  Speaker 2: it shows up like clockwork, and you know, raises or
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  Speaker 2: bonuses or anything just kind of show up consistently. And
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  Speaker 2: in retirement income isn't quite so simple. Instead of one paycheck,
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  Speaker 2: you're pulling from maybe Social Security, your investment accounts, maybe
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  Speaker 2: a pension, and possibly like part time working income or
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  Speaker 2: seasonal income. The key here is recognizing that retirement income
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  Speaker 2: isn't about finding a single replacement for your page check.
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  Speaker 2: It's about intentionally coordinating several income streams so they function
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  Speaker 2: to kether together like a paycheck. So we see this
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  Speaker 2: all the time. People can save diligently and still feel
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  Speaker 2: uncertain if they don't understand how the income comes into
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  Speaker 2: their checking account. Once they do understand that, then retirement
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  Speaker 2: feels much more manageable.
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  Speaker 1: Talk this Morning with CJ. Closs and Eric Schwartz our
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  Speaker 1: retirement planning professionals from Class Financial. Don't forget. If you've
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  Speaker 1: got a question for Eric and CJ, we'd love to
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  Speaker 1: have join us this morning. Get you on the air
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  Speaker 1: six oh eight to three two one thirteen ten. That's
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  Speaker 1: six oh eight three two one thirteen ten. Learn more
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  Speaker 1: online the website colss financial dot com. That's Closs Klaas
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  Speaker 1: Financial dot com. Topal number for the office right here
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  Speaker 1: in Madison. Six oh eight four four two five six
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  Speaker 1: three seven. No charge for that initial get to know
• 5:47
  Speaker 1: your appointment tech Lass Financial. It will be complimentarach you
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  Speaker 1: again their number six oh eight four four two five
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  Speaker 1: six three seven. So Eric, when when you get a
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  Speaker 1: chance to sit down with clients and kind of start
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  Speaker 1: mapping this stuff that CJ was talking about out, Oh,
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  Speaker 1: how do you then frame it the difference retirement income sources.
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  Speaker 3: Yeah, it's a good question, and you know, I think
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  Speaker 3: it's something that took us a little bit of time
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  Speaker 3: to kind of understand how clients received this because we
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  Speaker 3: have lots of you know, sophisticated software and things that
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  Speaker 3: help us make really good decisions for clients and provide advice,
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  Speaker 3: but at the end of the day, the client is
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  Speaker 3: kind of looking at you like, hey, my paycheck's going away.
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  Speaker 3: Where am I going to get money every month?
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  Speaker 2: You know?
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  Speaker 3: So really I kind of look at it as you know.
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  Speaker 3: Once we figure out how much money they need every
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  Speaker 3: month to live on, then it's just about stacking different
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  Speaker 3: income sources on top of each other to get to
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  Speaker 3: that that needed amount every month to live on. So
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  Speaker 3: we'll usually start by categorizing income into three distinct buckets.
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  Speaker 3: Each bucket plays a little bit of a different role
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  Speaker 3: in the retirement paycheck. So first, the first one we
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  Speaker 3: would look to would be guaranteed income. This could include
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  Speaker 3: Social Security pensions. These are predictable and recurring payments that
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  Speaker 3: are not impacted by market fluctuations, and generally they are
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  Speaker 3: lifetime income sources. The second bucket is portfolio based income.
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  Speaker 3: So this includes withdrawals from your four o one k iras,
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  Speaker 3: brokerage accounts, your bank accounts, maybe you have a larger
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  Speaker 3: savings account that you've been building up in preparation for retirement.
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  Speaker 3: Portfolio income adds flexibility and control to your retirement income. Now,
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  Speaker 3: it also introduces risk, right because market performance can matter.
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  Speaker 3: But it's the flexibility of portfolio income that allows you
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  Speaker 3: to be more agile with your retirement income. And then
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  Speaker 3: the third is what we would call supplemental income. So
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  Speaker 3: this could be part time work, consulting, maybe rental income,
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  Speaker 3: or business cash flow. This type of income is often temporary,
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  Speaker 3: but it can be pretty powerful when when you use
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  Speaker 3: it strategically. The retirement paycheck is created by coordinating these
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  Speaker 3: three sources. So just like just like CJ was saying earlier,
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  Speaker 3: we're not looking for one one source to replace your
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  Speaker 3: working income. We are looking for to coordinate multiple different sources.
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  Speaker 1: Really good information, great as we talk about this stuff,
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  Speaker 1: great things I think a lot of people may not
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  Speaker 1: have thought about. Don't forget, by the way, So we
• 8:26
  Speaker 1: have our conversation with CJ and Eric. You can always
• 8:29
  Speaker 1: learn more about Class Financial on their website. You can
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  Speaker 1: also schedule a complementary conversation listen back to this previous
• 8:34
  Speaker 1: shows podcast as well as learn about Class Financial, the
• 8:37
  Speaker 1: team and the separate divisions at class Financial how they
• 8:40
  Speaker 1: can help you or if you're an employer, they've got
• 8:42
  Speaker 1: some great great information for you right at class financial
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  Speaker 1: dot com. So CJ, let's talk a little bit about
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  Speaker 1: that guaranteed income part. I think a lot of folks said, wait, well,
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  Speaker 1: let's hear about that. What is that? Why does that
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  Speaker 1: make such a strong foundation when it comes to us
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  Speaker 1: putting together that retirement paycheck?
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  Speaker 2: Yeah, good question, Sean. For our cynics out there, which,
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  Speaker 2: by the way, I can tend to be one at times,
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  Speaker 2: we go we go, Is anything in life really guaranteed?
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  Speaker 2: And we would say Tooche, Tooche, we understand that, you know,
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  Speaker 2: to say guaranteed feels almost disingenuous, right, But what we
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  Speaker 2: would say is you have to separate in your mind.
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  Speaker 2: You know, is there a difference between say, a State
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  Speaker 2: of Wisconsin Department of Employee Trust Funds pension versus versus
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  Speaker 2: my four oh one k income? And the answer is yeah,
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  Speaker 2: there's a big difference. There's a big difference. The State
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  Speaker 2: of Wisconsin pension has I believe, billions of dollars inside
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  Speaker 2: of it, and your four oh one k is just
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  Speaker 2: for you and if you mismanage it, it can go away.
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  Speaker 2: So so we call these guaranteed incomes things like again,
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  Speaker 2: your state of Wisconsin pension. If you're in Illinois, it's
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  Speaker 2: your TRS pension if you're and then there's Social Security
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  Speaker 2: as well. But these guaranteed incomes give retirees an element
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  Speaker 2: of peace of mind because it shows up consistently regardless
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  Speaker 2: of what's happening in the economy or the markets. Social
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  Speaker 2: security and pensions provide income that doesn't depend on interest rates,
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  Speaker 2: market returns, or investor behavior. So these are key essential
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  Speaker 2: kind of like covering your core living expenses. Now again,
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  Speaker 2: going back to my cynics out there, what's interesting is
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  Speaker 2: when you're making this pivot from working income to retirey
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  Speaker 2: income or to retirement income, if you actually think about it,
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  Speaker 2: While nothing in life is truly guaranteed, social security and
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  Speaker 2: attension is a heck of a lot more guaranteed than
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  Speaker 2: you're working income, Like a heck of a lot more guaranteed, right,
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  Speaker 2: and they have large funding sources behind them. So if
• 10:44
  Speaker 2: you actually in your mind think about that, when I
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  Speaker 2: am pivoting from my working income to my retirement income,
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  Speaker 2: I have a lot more stability, at least in consistent income.
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  Speaker 2: I'm not talking in growth of income, but consistent income.
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  Speaker 2: A lot more stability than I had while I was working.
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  Speaker 2: So when guaranteed income is matched to your core expenses
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  Speaker 2: like housing, food, insurance, and healthcare, it reduces stress and
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  Speaker 2: anxiety significantly. People know that their basic lifestylisis is supported
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  Speaker 2: no matter what the markets do, and this foundation allows
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  Speaker 2: retirees to think more strategically about how and when to
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  Speaker 2: use their portfolio assets instead of reacting emotionally to short
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  Speaker 2: term market movements. So listen, everybody, if you actually think
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  Speaker 2: about it, making that shift from working to retirement income
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  Speaker 2: is scary. We get it. We go through it hundreds
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  Speaker 2: of times in a year, so we get it. However,
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  Speaker 2: what we would say is once your mind gets around
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  Speaker 2: that shift and you start to recognize, oh wow, in
• 11:47
  Speaker 2: the long run, I'm going to have a really nice
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  Speaker 2: kind of guaranteed base to cover some of my core
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  Speaker 2: living expenses, my portfolio will only supplement. You start to
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  Speaker 2: realize that actually, retire an income can feel more comfortable,
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  Speaker 2: not less comfortable, than your working income.
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  Speaker 1: It's a lot of effects for a lot of folks,
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  Speaker 1: a great relief too when they kind of realize that
• 12:10
  Speaker 1: kind of come to come to grips with some of
• 12:12
  Speaker 1: the some of those changes and some of those great
• 12:14
  Speaker 1: great opportunities. Talking this morning with CJ. Closs and Eric Schwartz.
• 12:17
  Speaker 1: They are our retirement planning professionals from COSS Financial online,
• 12:20
  Speaker 1: Cossfinancial dot com. That's cost k l a a S
• 12:23
  Speaker 1: Financial dot com. So, Eric, how should folks think about
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  Speaker 1: income from their investment portfolios portfolios when it comes to uh,
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  Speaker 1: the retirement paycheck?
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  Speaker 3: So to say, Yeah, this tends to be another point
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  Speaker 3: of confusion for clients. I think they look at their
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  Speaker 3: retirement savings like they're you know, their four oh one
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  Speaker 3: k for example, and they say, Okay, there's a there's
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  Speaker 3: a lump sum of money here, a pile of money.
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  Speaker 3: What does that actually mean in terms of in terms
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  Speaker 3: of income? Right, that's how I live my life. I
• 12:50
  Speaker 3: don't just draw off of a big savings account. And
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  Speaker 3: portfolio income is really really important because it's the most
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  Speaker 3: flexible part of the retirement paycheck. So unlike Social Security
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  Speaker 3: or your pension, which arrives in fixed amounts every month
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  Speaker 3: or whatever the frequency is, portfolio income can be increased,
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  Speaker 3: it can be decreased, it can be temporarily paused. You
• 13:15
  Speaker 3: get to control it as your life changes, okay, and
• 13:19
  Speaker 3: that flexibility becomes extremely valuable throughout retirement. Now, just like
• 13:24
  Speaker 3: I said earlier, there is an additional factor of risk
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  Speaker 3: when it comes to portfolio income because you can increase
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  Speaker 3: it whenever you want to theoretically, so again this is
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  Speaker 3: where it's going to be important to not mismanage it.
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  Speaker 3: And you know, early in retirement people might spend more. Frankly,
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  Speaker 3: they frequently do. You may travel more, spend more on
• 13:46
  Speaker 3: your hobbies. Maybe you have children that you are that
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  Speaker 3: you are supporting to some extent, and all of these
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  Speaker 3: are increasing your cash flow needs. The other thing that
• 13:57
  Speaker 3: is really common is retirees often and defer their Social
• 14:01
  Speaker 3: Security benefits beyond age sixty two. So that means that
• 14:04
  Speaker 3: they may need to draw a higher amount from their
• 14:08
  Speaker 3: retirement savings for a number of years until they can
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  Speaker 3: add in that guaranteed income source of Social Security. Right,
• 14:15
  Speaker 3: so maybe for the first five years of retirement they
• 14:18
  Speaker 3: are they're drawing more from their portfolio equal to maybe
• 14:23
  Speaker 3: what their their potential social Security benefit would be. And
• 14:26
  Speaker 3: that portfolio income it just allows retirees to adjust their
• 14:30
  Speaker 3: paycheck to match those changing needs rather than being locked
• 14:34
  Speaker 3: into a fixed income level forever. And then another key
• 14:38
  Speaker 3: role portfolio income plays is it acts as a buffer. Okay,
• 14:42
  Speaker 3: so when unexpected expenses show up or markets create opportunities challenges,
• 14:48
  Speaker 3: portfolio income it gives retireing options and when you use
• 14:53
  Speaker 3: it thoughtfully, it helps smooth income over time and it
• 14:56
  Speaker 3: prevents people from having to make drastic changes if life
• 14:59
  Speaker 3: does and go exactly as we as we planned. Now
• 15:03
  Speaker 3: keep it really know what I just said. They're used thoughtfully, right,
• 15:07
  Speaker 3: so make sure that we are being responsible with the
• 15:10
  Speaker 3: distributions and thinking not only about today but in the future.
• 15:15
  Speaker 3: And when we combine this with guaranteed income, portfolio income
• 15:19
  Speaker 3: becomes kind of the adjustable lever that helps the retirement
• 15:22
  Speaker 3: paycheck stay aligned with with real life and your current
• 15:25
  Speaker 3: cash flow needs.
• 15:26
  Speaker 1: Talking sporting with Eric Schwartz and CJ. Loss or retirement
• 15:29
  Speaker 1: planning professionals from Class Financial, we touched on the first
• 15:32
  Speaker 1: two buckets. What about that third one, supplemental income. We'll
• 15:35
  Speaker 1: get the details on that in just a moment. In
• 15:37
  Speaker 1: the meantime, if you haven't been to the website, head
• 15:39
  Speaker 1: on over to class financial dot com. That's Class k
• 15:42
  Speaker 1: l aas Financial dot com. They're tellphon number six O
• 15:45
  Speaker 1: eight four four two five six three seven No charge
• 15:48
  Speaker 1: for that initial get to know your appointment dech loss Financial.
• 15:50
  Speaker 1: It will be complimentary to you again. The number six
• 15:53
  Speaker 1: oh eight four four two, five, six three seven. We'll
• 15:56
  Speaker 1: continue our conversation with CJ and Eric and take your
• 15:58
  Speaker 1: call next as Money and with Class Financial continues right
• 16:01
  Speaker 1: here on thirteen ten, Wuiba talking with our retirement planning
• 16:04
  Speaker 1: professionals CJ. Closs and Eric Schwartz. They come to us
• 16:07
  Speaker 1: from COLSS Financial online Colssfinancial dot com. That's COSS k
• 16:12
  Speaker 1: l AAS Financial dot Com telph number six So eight
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  Speaker 1: four four two, five, six three seven talking this week
• 16:18
  Speaker 1: about going from paycheck to portfolio income and CJ. The
• 16:23
  Speaker 1: last category of course, supplemental income. How does that fit
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  Speaker 1: into this into this process.
• 16:31
  Speaker 2: Question Sean So. As a reminder to our listeners, when
• 16:34
  Speaker 2: we talk about supplemental income, we mean more like non
• 16:37
  Speaker 2: traditional retirement income sources. These would be things like part
• 16:41
  Speaker 2: time work or maybe a rental property that provides rental income,
• 16:45
  Speaker 2: you know, net of a mortgage or net of any
• 16:48
  Speaker 2: any taxes or costs that you have. So supplemental income
• 16:51
  Speaker 2: adds flexibility and breathing room, especially in the early years
• 16:55
  Speaker 2: of retirement. Even temporary income like part time work or
• 16:59
  Speaker 2: can insulting can meaningfully reduce portfolio withdrawals that can help
• 17:04
  Speaker 2: portfolios last longer and give guaranteed income sources more time
• 17:08
  Speaker 2: to grow. Eric hinted at this previously when he was
• 17:11
  Speaker 2: talking about the intersection between guaranteed income and portfolio income.
• 17:16
  Speaker 2: Where often in the early years, if somebody wants to
• 17:19
  Speaker 2: retire a little bit quote unquote earlier, and we would
• 17:22
  Speaker 2: call early retirement, by the way, for our listeners, anything
• 17:25
  Speaker 2: before sixty five. Okay, So if you want to retire
• 17:28
  Speaker 2: a little quote unquote earlier, call it anywhere before sixty five.
• 17:32
  Speaker 2: Often there can be good empirical reasons to not start
• 17:40
  Speaker 2: your social security as an example, And so then what
• 17:44
  Speaker 2: ends up happening is you have this larger withdrawal on
• 17:46
  Speaker 2: your portfolio, and if it's too large, that can actually
• 17:50
  Speaker 2: submarine your ability to retire early. So a lot of
• 17:54
  Speaker 2: times people will go, oh, well, that stinks. I always
• 17:57
  Speaker 2: wanted to retire earlier, and I guess I just have
• 17:59
  Speaker 2: to work. Eric and I will often chuckle at that
• 18:02
  Speaker 2: and go, no, no, no, no no. We didn't say you
• 18:04
  Speaker 2: can't retire from your full time job early. We just
• 18:07
  Speaker 2: said you can't only have portfolio income. So maybe think
• 18:12
  Speaker 2: about generating some income from that rental property, or maybe
• 18:15
  Speaker 2: think about working part time at low's as a stocker
• 18:18
  Speaker 2: in the back, Like I think the public would be
• 18:22
  Speaker 2: shocked by how flexible and customized retirement planning can be
• 18:28
  Speaker 2: if they're just willing to be ever so slightly flexible.
• 18:33
  Speaker 2: So again, these supplemental income streams, especially the early years
• 18:38
  Speaker 2: in retirement, can take you from maybe retirement at sixty
• 18:42
  Speaker 2: five down to a retirement at sixty getting you out
• 18:45
  Speaker 2: of your super stressful full time job and getting you
• 18:49
  Speaker 2: into something that is much less stressful. So also, supplemental
• 18:53
  Speaker 2: income can be used more creatively. So sometimes retirees use
• 18:57
  Speaker 2: it to fund like travel or hobbies so that again
• 19:02
  Speaker 2: those investments don't get disrupted. Others use it to bridge
• 19:06
  Speaker 2: the gap as I mentioned, between between retirement from their
• 19:09
  Speaker 2: full time gig into social Security. But here's the key everybody,
• 19:13
  Speaker 2: when it is used strategically, supplemental income strengthens the overall
• 19:18
  Speaker 2: retirement paycheck. A lot really.
• 19:20
  Speaker 1: Good perspectives this morning from CJ. Colss and Eric Schwartz.
• 19:23
  Speaker 1: And Eric, let's talk about you know, we've covered guaranteed,
• 19:26
  Speaker 1: We've talked about portfolio income, talk about supplemental income each individually.
• 19:31
  Speaker 1: Let's kind of put those gears together and make it
• 19:34
  Speaker 1: all work. What do we do then it comes to
• 19:37
  Speaker 1: coordinating for a retirement paycheck.
• 19:40
  Speaker 3: Yeah, coordination is kind of what we've been We've been
• 19:43
  Speaker 3: talking around here for most of the show, and it's
• 19:46
  Speaker 3: basically taking multiple income sources and using them to create
• 19:51
  Speaker 3: a consistent income for clients. And I think the important
• 19:55
  Speaker 3: thing to remember is that is talking about flexibility, but
• 19:59
  Speaker 3: the source of your income over time will very likely change.
• 20:03
  Speaker 3: Right It's not like you're going to retire and it's like, Okay,
• 20:06
  Speaker 3: I have my pension coming in, I have my Social
• 20:09
  Speaker 3: Security and then I'm going to take this much for
• 20:11
  Speaker 3: my portfolio every month for the rest of my life.
• 20:15
  Speaker 3: Your needs change, the timing or strategy around social security
• 20:20
  Speaker 3: may be such that you're not taking it right away.
• 20:23
  Speaker 3: So while the goal is to provide consistent income, it
• 20:26
  Speaker 3: is going to change over time. Right now, things like
• 20:29
  Speaker 3: your guaranteed income sources, your social Security pension if you
• 20:33
  Speaker 3: have it, these are serving as the base and obviously
• 20:36
  Speaker 3: these in general do not change over time by their
• 20:39
  Speaker 3: very nature. Portfolio income is essentially filling the gap on
• 20:44
  Speaker 3: top of those guaranteed income sources to provide the amount
• 20:48
  Speaker 3: of income that you need to live on now supplemental
• 20:51
  Speaker 3: income is obviously something will consider, but it is not
• 20:56
  Speaker 3: something that every retiree has, so will generally kind of
• 21:02
  Speaker 3: include that as a not an afterthought, but you know,
• 21:05
  Speaker 3: just an additional source. So basically, we're saying, okay, you
• 21:08
  Speaker 3: have your fixed income sources, and then let's say you
• 21:10
  Speaker 3: need an extra two thousand dollars a month, Well, that's
• 21:13
  Speaker 3: your portfolio income covering that going forward. And then you know,
• 21:18
  Speaker 3: in the early years of retirement, as I've as I've
• 21:21
  Speaker 3: alluded to here, the flexibility of that portfolio income is
• 21:26
  Speaker 3: important because you may say, hey, I want to I
• 21:29
  Speaker 3: want to travel a lot more while I'm young and
• 21:31
  Speaker 3: feel feel like I, you know, feel healthy enough to
• 21:34
  Speaker 3: do it. Great, we can. We can have increased income
• 21:37
  Speaker 3: for the first five or ten years of retirement to
• 21:40
  Speaker 3: account for that, right, but then we have the ability
• 21:42
  Speaker 3: to back off that later when your your activity decreases.
• 21:47
  Speaker 3: So the key is that these income sources are not
• 21:49
  Speaker 3: meant to operate in isolation. They're coordinated, so income arrives
• 21:53
  Speaker 3: in the right amounts and from the right places. When
• 21:56
  Speaker 3: this is done well, retirees don't really think in terms
• 21:59
  Speaker 3: of pulling money from accounts. They just experience income showing
• 22:02
  Speaker 3: up to their bank account each month, much like their
• 22:06
  Speaker 3: paycheck did when they were working. And that coordination also
• 22:09
  Speaker 3: creates flexibility. Because income is coming from multiple sources, retirees
• 22:14
  Speaker 3: have the ability to adjust which income they rely on
• 22:17
  Speaker 3: as circumstances change. And that's where it king really begins,
• 22:20
  Speaker 3: especially when it comes to long term planning, and especially
• 22:23
  Speaker 3: when it comes to taxes, and.
• 22:25
  Speaker 1: We're going to dig more into taxes in just a
• 22:27
  Speaker 1: moment as we talk this morning with Eric Schwartz and CJ. Loss,
• 22:29
  Speaker 1: our retirement planning professionals from Class Financial Online Cossfinancial dot com.
• 22:34
  Speaker 1: That's Coss Klaas Financial dot com telphe number six oh
• 22:37
  Speaker 1: eight four four two five six three seven. No charge
• 22:40
  Speaker 1: for the initial gets to know the appoyment tech Lass Financial.
• 22:43
  Speaker 1: It will be complementary to you. They're number six oh
• 22:45
  Speaker 1: eight four four two five six three seven. Will talk
• 22:47
  Speaker 1: taxes and take it down the home stretch next as
• 22:50
  Speaker 1: Money in Motion with Coss Financial continues right here on
• 22:52
  Speaker 1: thirteen ten. WIBI talking with our retirement planning professionals a CJ.
• 22:57
  Speaker 1: Loss and Eric Schwartz. Of course they come to us
• 22:58
  Speaker 1: from Class Financial Online, Costs Financial dot Com that's coss
• 23:02
  Speaker 1: k l aas financial dot com Eric mentioned in the
• 23:06
  Speaker 1: last segment about taxes and CJ. How does that play
• 23:10
  Speaker 1: into things.
• 23:13
  Speaker 3: Yeah.
• 23:13
  Speaker 2: When income is coordinated, retirees gain control over which dollars
• 23:17
  Speaker 2: they use to fund their paycheck, and that's especially important
• 23:20
  Speaker 2: when it comes to taxes. So some income like social
• 23:23
  Speaker 2: security or pensions show up automatically, but portfolio income can
• 23:28
  Speaker 2: be sourced from different types of accounts, and those accounts
• 23:31
  Speaker 2: are taxed very differently. For example, what draws from pre
• 23:35
  Speaker 2: tax accounts like traditional iras or four one k's generally
• 23:39
  Speaker 2: create taxable like ordinary income taxable income, while roth accounts
• 23:44
  Speaker 2: can often provide income tax free portfolio or retirement income.
• 23:48
  Speaker 2: When those account types are coordinated intentionally, retirees can decide
• 23:53
  Speaker 2: whether they want a taxable paycheck this year or a
• 23:56
  Speaker 2: more tax efficient paycheck next year. Flexibility becomes even more
• 24:01
  Speaker 2: powerful over time. In years with higher spending, retirees may
• 24:06
  Speaker 2: lean on more more on one type of an account,
• 24:09
  Speaker 2: and then in other years they may rely on more
• 24:12
  Speaker 2: of their like guaranteed income sources and limited tax withdrawals,
• 24:15
  Speaker 2: depending upon needs, and because the income sources are coordinated,
• 24:19
  Speaker 2: the retirement paycheck can adjust as taxes, spending, needs, and
• 24:24
  Speaker 2: priorities change, which you know, helps the plan stay sustainable
• 24:29
  Speaker 2: over over long periods of time.
• 24:30
  Speaker 1: Really enforces the importance of having a plan. And Eric,
• 24:33
  Speaker 1: let's kind of pull this all together, put a nice
• 24:35
  Speaker 1: bow on it, kind of some of those final thoughts.
• 24:39
  Speaker 3: Yeah, I think the most important takeaway is that retirement income,
• 24:42
  Speaker 3: while it doesn't come from a single source, it doesn't
• 24:44
  Speaker 3: have to feel unpredictable. Okay, so you can you can
• 24:47
  Speaker 3: create your own retirement paycheck by intent intentionally coordinating your
• 24:52
  Speaker 3: different income types so that each one plays a specific
• 24:55
  Speaker 3: role with our guaranteed income providing stability, our portfolio in
• 25:00
  Speaker 3: income providing flexibility, and supplemental income when it's available, adding
• 25:05
  Speaker 3: some additional options in especially early on. And when we
• 25:09
  Speaker 3: align all of these income sources, we can really create
• 25:12
  Speaker 3: clarity for retirees. They know that their essential expenses are covered,
• 25:16
  Speaker 3: they have control over how much income they take and
• 25:19
  Speaker 3: where it comes from, and then they can really adapt
• 25:22
  Speaker 3: as their life and their priorities change. And this can
• 25:26
  Speaker 3: all turn savings into a sustainable paycheck and helper teriries
• 25:30
  Speaker 3: move through retirement with confidence instead of uncertainty.
• 25:35
  Speaker 1: Really important stuff and if you miss any part todays show,
• 25:37
  Speaker 1: don't forget, you can always listen back and subscribe to
• 25:39
  Speaker 1: the podcast cost Financial dot com. That's cost klaas Financial
• 25:43
  Speaker 1: dot com. They're telephone number six so eight four four
• 25:45
  Speaker 1: two five, six three seven. No charge for the initial
• 25:48
  Speaker 1: get to know the appointment tech Class Financial. It will
• 25:50
  Speaker 1: be complimentary to you. You want to hold on to that
• 25:52
  Speaker 1: telephone number as well, because it's time now for the
• 25:54
  Speaker 1: class quiz question of the week. It works like this,
• 25:56
  Speaker 1: In just a moment, I'll ask you the class quiz
• 25:58
  Speaker 1: question the week. You will then have thirty minutes for
• 26:00
  Speaker 1: than today's program to call the Coss Financial Office right
• 26:02
  Speaker 1: here in Madison six oh eight four four two five,
• 26:05
  Speaker 1: six three seven. If you are the first call with
• 26:07
  Speaker 1: correct answer, win this week's prize, which is say twenty
• 26:09
  Speaker 1: five dollars gift card two Starbucks. This week's Closs Quiz
• 26:13
  Speaker 1: question week. Is this true or false? Portfolio income is
• 26:17
  Speaker 1: typically the most flexible part of a retirement paycheck and
• 26:21
  Speaker 1: can be increased or decreased as retirement income needs change.
• 26:26
  Speaker 1: Is that true or is that false? Tell phone number
• 26:28
  Speaker 1: six oh eight four four two five six three seven
• 26:31
  Speaker 1: first call with correct answer when this week's prize that
• 26:33
  Speaker 1: twenty five dollars gift card to Starbucks. Don't forget as well.
• 26:35
  Speaker 1: That's Coss Financials office number right here in Madison six
• 26:38
  Speaker 1: oh eight four four two five six three seven CJ.
• 26:41
  Speaker 2: Eric.
• 26:42
  Speaker 1: It's always fantastic chatting with you guys. Enjoy this beautiful
• 26:45
  Speaker 1: day and we'll do it again real soon.
• 26:46
  Speaker 2: Thanks Sean.
• 26:48
  Speaker 3: Thanks Sean.
• 26:48
  Speaker 1: News comes you way next here at thirteen ten wib I.
• 26:51
  Speaker 1: This is Money in Motion with Coss Financial Asset Advisors, LLC,
• 26:55
  Speaker 1: a registered investment advisor registered with the SEC. The contents
• 27:00
  Speaker 1: of this show are for informational purposes only and should
• 27:03
  Speaker 1: not be considered individual investment advice. Class Financial does not
• 27:06
  Speaker 1: offer tax or legal advice. Any opinion offered during the
• 27:10
  Speaker 1: course of this show is the opinion of that particular
• 27:13
  Speaker 1: investment advisor representative and not necessarily the opinion of Coss
• 27:17
  Speaker 1: Financial