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A Retirement Roadmap for Your 50's · Money In Motion with Klaas Financial

0:00
Speaker 1: And our phone nines are open for you if you've
0:02
Speaker 1: got questions. Love to get you on the air this
0:04
Speaker 1: morning with CJ Closs and Eric Schwartz, our retirement planning
0:06
Speaker 1: professionals from Class Financial. You can learn more about Class
0:09
Speaker 1: Financial on their website class financial dot com. That's Coss
0:13
Speaker 1: Klaas Financial dot com. They're telephon number six so eight
0:17
Speaker 1: four four two five six three seven. No charge for
0:20
Speaker 1: that initial get to know you appointment tech Coss Financial.
0:22
Speaker 1: It will be complimentary to you again. They're number six
0:25
Speaker 1: oh eight four four two five six three seven, And
0:27
Speaker 1: as mentioned, our phone lines are open at three two
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Speaker 1: one thirteen ten. That's three two one thirteen ten. Gets
0:32
Speaker 1: you on the air with CJ and Eric. Speaking of CJEN. Eric, guys,
0:35
Speaker 1: how are we doing this morning? CJ, how's your week
0:37
Speaker 1: so far?
0:38
Speaker 2: It's been great. How about your Sean?
0:40
Speaker 1: It's going well. Great to talk with you.
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Speaker 2: Eric.
0:42
Speaker 1: How have you been?
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Speaker 3: I've been doing great. If Lex bring on the way
0:45
Speaker 3: in so you can't complain.
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Speaker 1: I would say I have fifty three for today. Wow, CJ.
0:51
Speaker 1: On's the latest you've played outdoor soccer in the winter
0:54
Speaker 1: months here in Wisconsin.
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Speaker 2: Ooh, that's a great question. I want to say. I
1:00
Speaker 2: want to say the latest I played was December at
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Speaker 2: least outdoor soccer, because even now it's you know, it's
1:05
Speaker 2: hard to assume you're going to get a day like
1:07
Speaker 2: this and plan something the ground starts getting mushy. But listen,
1:10
Speaker 2: as I walked outside today there were birds chirping. I
1:13
Speaker 2: was like, what's happening. It's isn't at the end of January.
1:17
Speaker 1: It is. It is a little different. And one of
1:19
Speaker 1: the nice things as we as we're going to talk
1:21
Speaker 1: this week, we're going to talk about approaching you know,
1:25
Speaker 1: five zero and retirement, game planning and things. One of
1:27
Speaker 1: the nice things if you plan properly, you can wake
1:30
Speaker 1: up in January in warm climates with birds chirping outside
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Speaker 1: of your window every single day. You just got to
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Speaker 1: plan for it. And that's the importance of this program.
1:38
Speaker 1: If you've got questions for c J and Eric love
1:40
Speaker 1: to have, join us phone number six O eight three
1:41
Speaker 1: two one thirteen ten. That's sixh eight three two one
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Speaker 1: thirteen ten. Cool feature of the show was the Class
1:46
Speaker 1: Quiz Question week. You have a chance a little bit
1:48
Speaker 1: later on the program to win a twenty five dollars
1:50
Speaker 1: gift card to Best Buy provided from our friends at
1:52
Speaker 1: Class Financial with the Class Quiz question of the week.
1:55
Speaker 1: And before we get rolling on this week's conversation, let's
1:57
Speaker 1: actually take a look back at LAXT week's show, Eric,
2:00
Speaker 1: and we'll get the question and answer from Klassquiz Question
2:03
Speaker 1: a week from that program.
2:05
Speaker 3: Yeah, so our question last week was what amount can
2:08
Speaker 3: you gift per person in twenty twenty five with no
2:12
Speaker 3: federal gift tax consequences? Choices were fifteen thousand or nineteen thousand,
2:17
Speaker 3: and Abby from Madison was a great listener last week
2:21
Speaker 3: and had the correct answer, which is nineteen thousand dollars
2:25
Speaker 3: per person per recipient.
2:27
Speaker 1: Fantastic and congratulations Abby. And of course you can be
2:30
Speaker 1: like Abby listen closely to the program because typically the
2:33
Speaker 1: question answer come up during the show. So it definitely
2:36
Speaker 1: benefits to pay CLO's attention for many many reasons to
2:39
Speaker 1: the program. And you know, we've talked many times about
2:41
Speaker 1: the importance of having a planner kind of like a
2:44
Speaker 1: roadmap for retirement. But what does that kind of look like,
2:46
Speaker 1: especially for folks that are getting into their fifties. CJ.
2:50
Speaker 2: Yeah, great question. Today we are diving into the big five, Oh,
2:56
Speaker 2: turning fifty and what it means for your retirement game plan.
3:00
Speaker 2: Some of you may already have a solid strategy in place,
3:03
Speaker 2: and if so, you know, good for you. But others
3:05
Speaker 2: might be feeling a little bit behind, and that's totally normal.
3:09
Speaker 2: But turning fifty. Eric and I have found that when
3:12
Speaker 2: we meet with people when people turn fifty, there's kind
3:14
Speaker 2: of an aha moment that happens right where you go.
3:18
Speaker 2: My body's not quite feeling as good as it did before.
3:21
Speaker 2: I'm recognizing that I've been working for a long time.
3:24
Speaker 2: Maybe in some circumstances, I'm not feeling quite as motivated
3:27
Speaker 2: at work, and there's this the aha moments is like,
3:31
Speaker 2: I better get my act together to make sure that
3:35
Speaker 2: I am planning appropriately for retirement. Because when you turn fifty,
3:38
Speaker 2: many times you know that window to retirement is ten
3:42
Speaker 2: to fifteen years away. So often we hear people saying
3:45
Speaker 2: things like, gosh, have I done enough? What else do
3:48
Speaker 2: I need to do to kind of sure up my retirement?
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Speaker 2: And so you know, this is where we help out. Now,
3:54
Speaker 2: even if you feel behind, there is still plenty that
3:57
Speaker 2: you can do to set yourself up for success and retirement.
4:00
Speaker 2: And so we're we're going to take together this this
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Speaker 2: retirement roadmap journey through our discussion today. So the first
4:09
Speaker 2: stop in our retirement roadmap journey is number one, save
4:13
Speaker 2: more and maximize your retirement. So one of the perks
4:17
Speaker 2: of turning fifty is the ability to save more into
4:21
Speaker 2: your retirement account. The IRS gives you a boost known
4:24
Speaker 2: as a ketchup contribution. So in your four oh one
4:27
Speaker 2: K four oh three B four fifty seven, so I
4:29
Speaker 2: think primary employer sponsored retirement plan under most circumstances, the
4:34
Speaker 2: contribution limit in twenty twenty five is twenty three thousand,
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Speaker 2: five hundred dollars. But once you hit fifty, you can
4:42
Speaker 2: add another seven thousand, five hundred dollars as what's called
4:45
Speaker 2: a ketchup contribution, bringing your total contribution up to thirty
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Speaker 2: one thousand dollars. So again in those kind of traditional
4:54
Speaker 2: employer sponsored retirement plans four to one K four oh
4:56
Speaker 2: three B fourty seven, once you turn fifty you get
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Speaker 2: that seventy five hundred dollar catchup contribution, bringing up the
5:02
Speaker 2: total that you can save. Also, we've talked about this
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Speaker 2: in prior shows, but a new thing in twenty twenty
5:08
Speaker 2: five is for individuals age sixty to sixty three. You
5:13
Speaker 2: have a we'll call it a Ketchup plus a Ketchup accelerator.
5:17
Speaker 2: So your Ketchup contribution limit is more than that seventy
5:20
Speaker 2: five hundred dollars. It's actually eleven thousand, two hundred and
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Speaker 2: fifty dollars, which brings your total contribution amount up to
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Speaker 2: thirty four thousand, seven hundred and fifty dollars. Now, listen,
5:32
Speaker 2: for some of you listening right now, you're saying, you're insane.
5:36
Speaker 2: I can't save three thousand dollars a month into a
5:39
Speaker 2: retirement plan, tuche. If that's you, I completely get it,
5:43
Speaker 2: and no, you know, no shame in that. I one
5:46
Speaker 2: hundred percent understand. But for others of you, you go, well,
5:51
Speaker 2: I could if I wanted to, right, And those those
5:54
Speaker 2: are the ones that we would say, hey, it's important
5:56
Speaker 2: for you to know the upper bounds. I actually, Eric
5:58
Speaker 2: will testify. What I often say is I want to
6:01
Speaker 2: know the size of the pool I'm swimming in and
6:03
Speaker 2: the depth of the pool. Right, And so what we're
6:06
Speaker 2: telling you is, here's the size of the pool, and
6:08
Speaker 2: here here's the depth of the pool. It's up to
6:10
Speaker 2: you if you want to be in the shallow end
6:12
Speaker 2: or the deep end. But what we're getting at here
6:14
Speaker 2: is it's important for you to know the maximums. So
6:17
Speaker 2: for some of you who are in your peak earning
6:20
Speaker 2: years in your fifties, these are the years to take
6:23
Speaker 2: advantage of those catch up contributions. And then for those
6:26
Speaker 2: of us who have like rays so individual retirement accounts.
6:30
Speaker 2: These are not employer sponsored retirement accounts, but just individual plans.
6:34
Speaker 2: The standard limit that you can put into an IRA
6:37
Speaker 2: is seven thousand dollars. But again, if you're over fifty,
6:40
Speaker 2: you get a catch up contribution of an extra one
6:42
Speaker 2: thousand dollars for a total of eight thousand. So again
6:46
Speaker 2: if you are in those peak earning years once you
6:49
Speaker 2: turn fifty, we would just highly suggest that again the
6:52
Speaker 2: first step on our roadmap here is save more and
6:55
Speaker 2: maximize your retirement plans.
6:57
Speaker 1: Going through our retirement roadmap with our retirement planning professionals
7:00
Speaker 1: from Coss Financial CJ. Coss and Eric Schwartz, don't forget
7:02
Speaker 1: you learn more online the website costs Financial dot com.
7:05
Speaker 1: That's Coss k l aas Financial dot com. There twelve
7:08
Speaker 1: for what number six? Soh eight four four two five
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Speaker 1: six three seven. So Eric, what about adding money to
7:13
Speaker 1: your health savings account a smart move that's available, And
7:18
Speaker 1: wond er two about emergency savings Do we need to
7:21
Speaker 1: have that as we approach retirement.
7:24
Speaker 3: Yeah, we get a lot of questions about about both
7:26
Speaker 3: of these topics, and so we're gonna we're gonna dive
7:29
Speaker 3: into both of them. Let's start with the HSA though,
7:31
Speaker 3: the health savings account. So if your health plan allows it, right, So,
7:36
Speaker 3: if you have a what's classified as a high deductible
7:39
Speaker 3: health plan, you are potentially eligible to have a health
7:42
Speaker 3: savings account. Okay, So this is a tax advantaged account
7:46
Speaker 3: that helps cover out of pocket medical costs now and
7:49
Speaker 3: in retirement. So that's important. You can use it now
7:52
Speaker 3: or in the future. And we'll talk about that more
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Speaker 3: in a second. But in twenty twenty five, you can
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Speaker 3: contribute up to forty three hundred dollars as an individual
8:01
Speaker 3: and for a family you can do eighty five and fifty.
8:05
Speaker 3: Now when you hit fifty five, so not quite fifty
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Speaker 3: but fifty five, you can also contribute an extra thousand
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Speaker 3: dollars as a catch up contribution. Now, the best part
8:14
Speaker 3: about this, especially with the rising cost of healthcare is
8:18
Speaker 3: any funds that remain in your HSA at the end
8:20
Speaker 3: of each year, you can roll them over to the
8:22
Speaker 3: next year basically for as long as you'd like. So
8:26
Speaker 3: it becomes a really good long term savings tool, like
8:30
Speaker 3: I said, especially as healthcare continues to get more expensive,
8:34
Speaker 3: and depending how much money you have in the HSA,
8:36
Speaker 3: it might be an option to actually invest some of
8:39
Speaker 3: the dollars for longer term growth. So hsas are a
8:43
Speaker 3: really I think we would say underappreciated tool. They allow
8:47
Speaker 3: you to deduct your contribution going in and then as
8:50
Speaker 3: long as you use it for healthcare expenses, you don't
8:53
Speaker 3: have to pay any taxes on the way out, so
8:55
Speaker 3: it's you know, double tax exempt money here that also
8:58
Speaker 3: actually has the ability to accumulate from the time you
9:01
Speaker 3: put it in until you take it out. So HSA
9:05
Speaker 3: really really important thing, really really important. So the other
9:10
Speaker 3: the other thing that comes up when we talk about
9:12
Speaker 3: hsas is something called an FSA or a flex spending account.
9:17
Speaker 3: So this is something that employers offer similar to an HSA.
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Speaker 3: They it's for out of pocket you know, medical expenses
9:25
Speaker 3: and related items. But an important distinction here is that
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Speaker 3: f sas are employer sponsored plans, while hsas are owned
9:35
Speaker 3: by you. Okay, so if you change employers, you can
9:39
Speaker 3: take your HSA with you since you you can open
9:41
Speaker 3: an HSA even if it's not offered by your employer. Now,
9:45
Speaker 3: with an f s A flex spending any funds contributed
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Speaker 3: to the to the FSA generally must be spent in
9:52
Speaker 3: the year that they were contributed. Okay. Some some plans
9:55
Speaker 3: will give you a grace period of you know, to
9:57
Speaker 3: two and a half months after the first of the year,
10:00
Speaker 3: but it's generally a kind of use it or lose it.
10:05
Speaker 3: The situation with the flex spending account. So both both
10:08
Speaker 3: are really good options for covering health expenses. HSA does
10:12
Speaker 3: give you a little bit more flexibility long term.
10:15
Speaker 1: Talking this morning with Eric Schwartz and see a coss
10:17
Speaker 1: our retirement planning professionals from Class Financial online costs Financial
10:20
Speaker 1: dot com. And they're telephone number six So eight four
10:22
Speaker 1: four two five six three seven. So Eric, what about
10:25
Speaker 1: that third stop?
10:27
Speaker 3: Yeah, our third stop is building an emergency fund. So
10:30
Speaker 3: this one, I think a lot of times when we
10:32
Speaker 3: talk to people about this, it feels really obvious, like, yeah,
10:36
Speaker 3: I know I should you know, I should have money
10:37
Speaker 3: set aside and in a savings account for an emergency.
10:41
Speaker 3: But it's it's often one that we seem missed a
10:44
Speaker 3: lot because it's it's easy not to do it, but
10:47
Speaker 3: you know, unexpected expenses can derail even the best planned
10:51
Speaker 3: out retirements. So when people are working, generally will recommend
10:56
Speaker 3: they have somewhere from you know, six to twelve months
10:59
Speaker 3: of expenses in their emergency fund. And when we say
11:03
Speaker 3: emergency fund, we don't mean just in your savings account.
11:05
Speaker 3: We do mean any separate account that you only access
11:08
Speaker 3: for an emergency. In retirement, some people like to kind
11:15
Speaker 3: of build that up a little bit more, maybe in
11:17
Speaker 3: the twelve to eighteen months worth of expenses in that
11:21
Speaker 3: type of account that's liquid, accessible and able to be
11:25
Speaker 3: to be accessed pretty quickly. The reason for the larger
11:28
Speaker 3: buffer is, especially as people move into retirement, there's generally
11:32
Speaker 3: a concern about, well, I'm not working anymore. It's not
11:35
Speaker 3: like I can pick up an extra shift or you know,
11:38
Speaker 3: just put more more effort in. Maybe if you're in
11:41
Speaker 3: like a sales role, there's less flexibility, so they like
11:44
Speaker 3: to have a little bit more available in the liquid savings.
11:50
Speaker 3: The last thing is health care costs. As we've talked about,
11:52
Speaker 3: they tend to rise as we age, and you know,
11:56
Speaker 3: if you have a large out of pocket expense, it's
11:59
Speaker 3: nice to have money set aside to cover that.
12:04
Speaker 1: Talking this morning with CJ. Closs and Eric Schwartz. They
12:07
Speaker 1: are our retirement planning professionals from Class Financial. The website
12:11
Speaker 1: Class financial dot com that's coss a l aas Financial
12:14
Speaker 1: dot com. Great website and resource learn more about Class Financial.
12:17
Speaker 1: You can, of course get to know the team. You
12:19
Speaker 1: can learn about the separate divisions. You can also sign
12:21
Speaker 1: up for the weekly Market Pulse newsletter as well as
12:24
Speaker 1: listening back to podcasts all online. Class Financial dot com
12:27
Speaker 1: that's class k l aas Financial dot com. They're twelf
12:31
Speaker 1: number six o eight four four two five six three seven.
12:34
Speaker 1: No charge for the initial get to know your apployment
12:36
Speaker 1: tech Class Financial, that'll be complimentary to you again. They're
12:39
Speaker 1: telp for number six oh eight four four two five
12:41
Speaker 1: six three seven. As we work our way down the
12:43
Speaker 1: retirement road map, you may be wondering what about debt.
12:45
Speaker 1: We'll get the details on that and so much more.
12:47
Speaker 1: As Money in Motion with Class Financial continues next right
12:50
Speaker 1: here on thirteen ten WIBA talking with our retirement planning
12:56
Speaker 1: professionals CJ. Closs and Eric Schwartz. Of course they come
12:59
Speaker 1: to us from Clause Financial. Their website Coss Financial dot com.
13:03
Speaker 1: That's Coss k l aas Financial dot com. And the
13:06
Speaker 1: telephone number six oh eight four four two five six
13:10
Speaker 1: three seven. No charge for the initial get to know
13:12
Speaker 1: your appointment det COSS Financial. It will be complementary to
13:15
Speaker 1: you again their number six oh eight four four two
13:18
Speaker 1: five six three seven. Talking this week about a retirement roadmap,
13:22
Speaker 1: especially as you get into your fifties and you can
13:24
Speaker 1: see retirement right on the horizon. It is so close
13:27
Speaker 1: and of course there's so much excitement, but there's also anxiety.
13:30
Speaker 1: So we're kind of working through some of the things
13:32
Speaker 1: to get in line and be prepared for as you
13:35
Speaker 1: work down the road towards retirement. And CJ, I know
13:37
Speaker 1: another area that you often suggest when it comes to
13:40
Speaker 1: your retirement strategy is reducing debt, isn't.
13:44
Speaker 2: It It is? Yeah, So this is our fourth stop
13:47
Speaker 2: on our retirement planning roadmap. As you hit your fifties,
13:50
Speaker 2: the Big five oho some things to be thinking about,
13:53
Speaker 2: and so we're thinking about the fourth stop on our
13:55
Speaker 2: on our kind of path here, our journey towards retirement,
13:58
Speaker 2: and it is tackling debt. Retirement just cannot suggest this enough. Now,
14:03
Speaker 2: I have to admit, even as we go through this,
14:06
Speaker 2: there's this recognition of wait a minute, you told me
14:10
Speaker 2: I should max out my four to one K at
14:12
Speaker 2: thirty six thousand dollars a year, and you want me
14:14
Speaker 2: to eliminate my debt, Like, come on, you guys are
14:17
Speaker 2: living in the clouds. Fair enough, touche, You've got to
14:20
Speaker 2: This is why ultimately we can give you a roadmap
14:23
Speaker 2: with important stops on it. But often you have to
14:26
Speaker 2: end up meeting with somebody that doesn't have to be us,
14:29
Speaker 2: but meet with some advisor to say, can you help
14:32
Speaker 2: me prioritize because I listened to these crazy people on
14:34
Speaker 2: the radio show and they just gave me too much
14:36
Speaker 2: at once. So that's tongue in cheek, by the way,
14:39
Speaker 2: But you guys get the ideas. Hey, it is difficult
14:42
Speaker 2: in practice to decide what has a higher priority. But
14:47
Speaker 2: if you've listened to our show for any period of time,
14:50
Speaker 2: one thing you have learned is that as retirement planners,
14:53
Speaker 2: we are big fans of you being debt free by
14:56
Speaker 2: the time you get to retirement. That's not a must,
14:58
Speaker 2: but it's a pretty big step and really reduces not
15:02
Speaker 2: only risk but stress in your life. So we would say,
15:05
Speaker 2: take a hard look at your income and expenses and
15:07
Speaker 2: any outstanding debts that you have, and then prioritize eliminating
15:11
Speaker 2: some of those highest interest debts, maybe some of the
15:14
Speaker 2: low balances, to clip them off and start doing what
15:17
Speaker 2: we call a debt snowball. But listen, credit cards alone,
15:21
Speaker 2: the average interest rate around the United States is somewhere
15:23
Speaker 2: between twenty to twenty two percent. So often we'll have
15:27
Speaker 2: people come in and they'll say, hey, I'm I'm trying
15:29
Speaker 2: to increase my four to one K contribution because I
15:31
Speaker 2: heard what you said, and so like, I'm doing it.
15:34
Speaker 2: I'm doing it, And then they go, but yeah, I
15:36
Speaker 2: also have twenty thousand dollars a credit card debt. I'll
15:38
Speaker 2: be frank with you, there is no world in which
15:41
Speaker 2: your four oh one K account is going to grow
15:44
Speaker 2: more than twenty percent a year on average. It's not
15:46
Speaker 2: going to happen. And therefore, to prioritize increasing your four
15:51
Speaker 2: ROH and K contribution while you're sitting on a bunch
15:53
Speaker 2: of unsecured high interest credit card debt. You get the
15:56
Speaker 2: idea it would be wiser to go a different direction.
16:00
Speaker 2: I have to mention because we'll often hear this, well,
16:02
Speaker 2: but my interest rate is so low, and so here's
16:04
Speaker 2: what'll happen. People will go, oh, my gosh, it's amazing.
16:07
Speaker 2: I'm getting three percent four percent on my money market
16:11
Speaker 2: account at the bank, but they'll never pay off their mortgage.
16:15
Speaker 2: So think about this with me, everybody. If I pay
16:17
Speaker 2: off my mortgage with excess cash that I have, and
16:20
Speaker 2: it's say at four percent, that is a guaranteed four
16:24
Speaker 2: percent return on that money, right, because if I don't
16:28
Speaker 2: pay it off, I still am paying the four percent.
16:32
Speaker 2: Not to mention, I have reduced my risk. So we
16:36
Speaker 2: are just huge fans of as you get into your fifties,
16:39
Speaker 2: prioritize tackling debt, try to get it rid of that mortgage,
16:42
Speaker 2: and just kind of simplify.
16:44
Speaker 1: Talking this morning with CJ. Coloss and Eric Schwartz retirement
16:46
Speaker 1: planning professionals. I'll weur retirement planning professionals from Class Financial
16:50
Speaker 1: website Class financial dot com that's k l aasfinancial dot
16:54
Speaker 1: com and following along CJ. Step four leads us to
16:56
Speaker 1: step five. Stop five, Oh, what do we need to
16:59
Speaker 1: know when it comes to retirement itself?
17:02
Speaker 2: Yeah, so step five is knowing what you'll actually need
17:05
Speaker 2: in retirement. Many people assume they'll spend much less in retirement,
17:10
Speaker 2: but the truth is most retirees spend somewhere between eighty
17:14
Speaker 2: to ninety percent of their pre retirement income. Now, I
17:17
Speaker 2: will just warn you all, I really, as much as
17:21
Speaker 2: I love giving you rules of thumb, this is one
17:23
Speaker 2: of the rules of thumb that I get really queasy about, Like,
17:27
Speaker 2: how much of my working income am I going to
17:29
Speaker 2: need in retirement? Goodness? Rules of thumb would say about
17:33
Speaker 2: eighty percent, but in practice, I've seen it as low
17:36
Speaker 2: as thirty percent, and I've seen it as high as
17:38
Speaker 2: one hundred and ten percent, And it's not the It's
17:43
Speaker 2: common to see it range that high. So an example
17:46
Speaker 2: of this would be, if you pay off your mortgage
17:48
Speaker 2: right before you retire, well, my goodness, you're going to
17:51
Speaker 2: need way less income to live the same lifestyle than
17:55
Speaker 2: you did when you were working. You get the idea,
17:57
Speaker 2: or you pay off a large student loan, or you
18:00
Speaker 2: have a grandchild that was living with you, that moves
18:02
Speaker 2: on or whatever it might be, you could end up
18:06
Speaker 2: needing substantially less. Not to mention, retirement income is actually
18:10
Speaker 2: taxed differently than ordinary income, So even if I needed
18:14
Speaker 2: the exact same net income, I would actually need less
18:19
Speaker 2: gross income in retirement. Don't want to bore you with
18:22
Speaker 2: the details of that, but just trust me. Taxes are
18:27
Speaker 2: different on sources of retirement income than they are while
18:30
Speaker 2: you are working. So long story short, you really want
18:34
Speaker 2: to sit down and say, all right, what would my
18:36
Speaker 2: Social Security be when I get to retirement? Am I
18:39
Speaker 2: going to draw it? Sixty two, sixty seven, seventy? Do
18:42
Speaker 2: I have any pensions? So to find benefit pension plans
18:45
Speaker 2: from current or prior employers. How much do I have
18:48
Speaker 2: in investments? What are my liabilities? And just take a
18:51
Speaker 2: look at that overall cash flow to make sure that
18:53
Speaker 2: you will have enough to live a similar lifestyle. We
18:57
Speaker 2: often will just say, hey, keep it some look at
19:01
Speaker 2: what hits your bank account on a monthly basis prior
19:04
Speaker 2: to retirement. Assuming there's no major changes in like elimination
19:09
Speaker 2: of a mortgage, then you're probably going to need a
19:11
Speaker 2: similar amount of net income in retirement. Right, So people
19:15
Speaker 2: will say, well, I can make one hundred thousand dollars,
19:17
Speaker 2: and I go, I know that, but what hits your
19:20
Speaker 2: bank account after the four oh one K, after the
19:22
Speaker 2: health insurance, after the you know, dental vision, uh FIKA tax,
19:29
Speaker 2: federal tax, state tax, right, And often people go, oh,
19:32
Speaker 2: well that number is like fifty thousand dollars a year.
19:35
Speaker 2: Well that's probably going to be the number that you're
19:37
Speaker 2: going to need to try to replace the majority of
19:40
Speaker 2: when you're in retirement. So there you go, some some
19:43
Speaker 2: food for thought. The fifth stop in our retirement planning
19:46
Speaker 2: roadmap is know what you'll need in retirement.
19:48
Speaker 1: Talking this morning with CJ. Class and Eric Schwartz, our
19:51
Speaker 1: retirement planning professionals from Class Financial website, Class financial dot com.
19:55
Speaker 1: That's coss k l a as Financial dot com. They're
19:58
Speaker 1: twelve number six, so eight four four to two five
20:01
Speaker 1: six three seven, no charge for the initial gets to
20:03
Speaker 1: know you appointment tech costs financial It will be complimentary
20:06
Speaker 1: to you again their number six, so eight four four
20:08
Speaker 1: to two five six three seven. So, as we've been
20:11
Speaker 1: talking this morning with that retirement roadmap, the age in
20:14
Speaker 1: the fifties kind of came up, and I know a
20:16
Speaker 1: lot of folks in their fifties, start thinking should I
20:18
Speaker 1: have saved more? And Eric, what do you say to
20:21
Speaker 1: those who maybe feel that they're behind?
20:26
Speaker 3: Well, Sean, if I had a dollar for every time
20:27
Speaker 3: I heard a new client say that I might be
20:29
Speaker 3: in that retired in that one climate you were talking
20:32
Speaker 3: about earlier. But you know, I think a lot of
20:35
Speaker 3: people have this this feeling that they know I haven't
20:39
Speaker 3: saved enough, I haven't been doing the right things, because
20:41
Speaker 3: I think a lot of people hear these kind of
20:43
Speaker 3: rules of thumb that CJ was referencing earlier. You know,
20:46
Speaker 3: I need X million dollars or I can't retire, or
20:49
Speaker 3: you know, if you if you haven't paid off your
20:52
Speaker 3: mortgage and reinvested those dollars, you're not You know, it's
20:55
Speaker 3: all this kind of comparison game, but it is such
20:59
Speaker 3: a normal feeling. We hear it all the time. And
21:03
Speaker 3: my direct response would be, well, doing nothing about it
21:07
Speaker 3: is not going to help, and it's it's not too
21:10
Speaker 3: late to make to make meaningful progress. Slow down, start
21:15
Speaker 3: where you are, and focus on what you can change now,
21:18
Speaker 3: because they're you know, even in your fifties, there's a
21:20
Speaker 3: lot of things you can do to make sure you're
21:23
Speaker 3: set up to retire, and you know, maybe you've had
21:26
Speaker 3: bad financial habits in the past or you know, can't
21:30
Speaker 3: change any of that. Let's let's start where we are,
21:33
Speaker 3: work with a with a trusted advisor and figure out
21:38
Speaker 3: where you go from here. And really, as CJ mentioned
21:41
Speaker 3: this earlier as well, working with an advisor can allow
21:46
Speaker 3: you to kind of get past some of those rules
21:49
Speaker 3: of thumb and really understand what it is that you need,
21:53
Speaker 3: because what you need and what somebody else needs are
21:56
Speaker 3: are completely different. You know, we can have a client
21:58
Speaker 3: who's saved as much as another client, but they spend
22:02
Speaker 3: twice as much, so maybe they're not ready for retirement,
22:04
Speaker 3: but the one with the lower balance is right. So
22:07
Speaker 3: it's really really something that needs to be customized to you.
22:11
Speaker 3: So what I would just leave you know, listeners with
22:14
Speaker 3: this morning is you know made if for those in
22:16
Speaker 3: your fifties, you've made it, You're you're ready to take
22:19
Speaker 3: control of your retirement. So no matter where you are
22:22
Speaker 3: on your roadmap that we went over today, there is
22:26
Speaker 3: still time to set yourself up for success and great retirement.
22:30
Speaker 1: Wise words, that is for sure. Talking this morning with
22:33
Speaker 1: Eric Schwartz and CJ Closs our retirement planning professionals from
22:36
Speaker 1: Class Financial the website classfinancial dot com. That's Klaas Financial
22:40
Speaker 1: dot com. There tellphone number six, So eight four four
22:42
Speaker 1: two five six three seven. We'll check in the Money
22:45
Speaker 1: and Motion Listener question corner as well as you get
22:47
Speaker 1: the Class Quiz question week. We will do that next
22:49
Speaker 1: as Money and Motion continues right here on thirteen ten.
22:52
Speaker 1: WIBA talking this morning with our retirement planning professionals, Eric
22:57
Speaker 1: Schwartz and CJ. Closs. Of course they come to us
22:59
Speaker 1: from Class Financial the website Coss Financial dot com. That's
23:02
Speaker 1: cost k l aasfinanci dot com. Great website with a
23:06
Speaker 1: lot of great information. A great feature on the website
23:08
Speaker 1: as well is to submit a question for our Money
23:10
Speaker 1: in Motion Listener question corner. And this week Joe wrote
23:13
Speaker 1: and he says, I'll begin drawing my Social Security benefit
23:16
Speaker 1: in September, and I'm trying to understand if this income
23:20
Speaker 1: is taxable or not. Eric, I'll let you take this one.
23:26
Speaker 3: Such a good question. And when we hear a fair amount,
23:29
Speaker 3: as you can imagine, so as always it depends, but
23:34
Speaker 3: generally about forty percent of people who get Social Security
23:38
Speaker 3: will have to pay federal income tax on their benefits.
23:41
Speaker 3: This usually happens if there's other income outside of Social
23:45
Speaker 3: Security coming in. So think you know, if you're still
23:49
Speaker 3: working part time, if you have interest and dividends off
23:52
Speaker 3: of investments, or maybe distributions from your retirement accounts, or
23:57
Speaker 3: maybe even a pension, if you're lucky enough to have
23:59
Speaker 3: one of those.
24:01
Speaker 1: So it is.
24:02
Speaker 3: It does depend. But to be more specific, if we're
24:05
Speaker 3: thinking about this in two ways, one your your federal
24:08
Speaker 3: income taxes and to your state income taxes. We'll start
24:13
Speaker 3: with state because it's easier. Depends on your state. Some
24:17
Speaker 3: states do tax Social Security benefits, some do not. For
24:21
Speaker 3: our folks here in Wisconsin, the state of Wisconsin does
24:24
Speaker 3: not tax Social Security benefits. Now, at the federal level,
24:28
Speaker 3: it's more complicated. Okay, So, if if you file an
24:33
Speaker 3: individual return and your combined income is between twenty five
24:38
Speaker 3: thousand and thirty four thousand dollars, you may have to
24:41
Speaker 3: pay income tax on up to fifty percent of your benefit.
24:45
Speaker 3: If your income is more than thirty five more than
24:47
Speaker 3: thirty four thousand dollars, you will pay taxes on up
24:50
Speaker 3: to eighty five percent of your benefit. So the irs
24:55
Speaker 3: will not tax you on, We'll say fifteen percent of
24:58
Speaker 3: your benefits at the federal level. Now, for our folks
25:01
Speaker 3: who file joint returns, those income thresholds are thirty Between
25:05
Speaker 3: thirty two thousand and forty four thousand, you may have
25:08
Speaker 3: to pay income tax on up to half of your benefit,
25:11
Speaker 3: and then more than forty four thousand dollars you will
25:14
Speaker 3: pay tax on them to eighty five percent of your benefit.
25:17
Speaker 1: Really great question, don't fore You can submit your question
25:19
Speaker 1: as well online at cossfinancial dot com. That's Coss k
25:23
Speaker 1: l aas Financial dot com. Van Ben there recently head
25:26
Speaker 1: on over get to know the team at Costs Financial.
25:28
Speaker 1: Learn more about the separate divisions at cost Financial how
25:31
Speaker 1: they can help you, or if you're an employer looking
25:32
Speaker 1: for some options again, you can learn more online costs
25:35
Speaker 1: Financial dot com. Tell for number six oh eight four
25:38
Speaker 1: four to two five six three seven. No charge for
25:41
Speaker 1: that initial gets know you appointment Tech Class Financial. It
25:43
Speaker 1: will be complimentary to you again their number six oh
25:46
Speaker 1: eight four four two five six three seven. You're going
25:48
Speaker 1: to want to hold on to that telephon number now
25:50
Speaker 1: because it's time for the Coss Quiz question the week.
25:52
Speaker 1: It works like this and just a moment, I'll ask
25:54
Speaker 1: you the Coss Quiz question the week. You will then
25:56
Speaker 1: have thirty minutes from the today's program to call the
25:58
Speaker 1: Class Financial office right here at mattis So. That's six
26:00
Speaker 1: oh eight four four two five, six three seven. If
26:03
Speaker 1: you are the first call correct answer, you win this
26:06
Speaker 1: week's prize, which is a twenty five dollars gift card
26:08
Speaker 1: to Best Buy. This week's Class Quiz question the week
26:12
Speaker 1: is this true or false? If you contribute to a
26:15
Speaker 1: health savings account, your remaining funds in the account will
26:19
Speaker 1: roll over a year after year True or false? Televille
26:23
Speaker 1: number six oh eight four four two five six three seven.
26:26
Speaker 1: First qual correct answer won that twenty five dollars gift
26:28
Speaker 1: card to best Buy. Don't forget that's Closs Financials Office
26:31
Speaker 1: right here in Madison again their number six oh eight
26:33
Speaker 1: four four two five six three seven and online Class
26:36
Speaker 1: Financial dot Com. That's Coss k l aa S Financial
26:39
Speaker 1: dot Com. CJ. Eric, It's always pleasant and great and
26:42
Speaker 1: love talking with both of you guys. You enjoy this
26:44
Speaker 1: beautiful day, and CJ get out and play some soccer today,
26:47
Speaker 1: Great Eric, Eric, do you play soccer by the way
26:51
Speaker 1: back in high school. I okay, guys, I know what
26:53
Speaker 1: we're doing this afterdude, doctor Marty Green joined us next
26:57
Speaker 1: from checkout vet here at thirteen ten wib A