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Getting Prepped with Klaas Financial · Money In Motion with Klaas Financial

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  Speaker 1: And our phone lines are open for you right now
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  Speaker 1: at six oh eight three two one thirteen ten. That's
• 0:07
  Speaker 1: three two one thirteen ten. If you have questions for
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  Speaker 1: our retirement planning professionals from Class Financial, joined this week
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  Speaker 1: by Eric Schwartz and CJ Closs. As mentioned, they are
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  Speaker 1: our retirement planning professionals. You can learn more about Class Financial.
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  Speaker 1: They've got a great website coss financial dot com. That's
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  Speaker 1: coss k l aa S Financial dot com and their
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  Speaker 1: telephone number six oh eight four four two five six
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  Speaker 1: three seven. No charge for that initial gets to know
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  Speaker 1: you appointment tech Class Financial. It will be complimentary to
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  Speaker 1: you again their number six oh eight four four two
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  Speaker 1: five six three seven. CJ, how you doing this morning.
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  Speaker 2: I'm doing great, Sean Happy New Year.
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  Speaker 1: Happy New Year to you as well. And I'm looking
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  Speaker 1: at class financial dot com right now. And you've got,
• 0:45
  Speaker 1: of course the winter scenes up on your up on
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  Speaker 1: the thing and gets you're thinking about fun things to do.
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  Speaker 1: And I saw some gingerbread houses and I realized you
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  Speaker 1: had a little competition for folks that I didn't.
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  Speaker 2: Know you knew about that.
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  Speaker 1: I saw you post something on this How did you
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  Speaker 1: do with the gingerbread competitions.
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  Speaker 2: I lost this yere Sean, I've I've had like a
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  Speaker 2: five year wind streak. Yeah, and I lost because I
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  Speaker 2: decorated with my youngest and we decided to go with
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  Speaker 2: kind of a weird theme. We'll call it a scary
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  Speaker 2: house theme. And people didn't like it.
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  Speaker 1: Oh and for folks that don't know you, you go,
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  Speaker 1: there's a little competitive streak in yours slightly slightly Well,
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  Speaker 1: better luck next year, and uh and uh it's it's
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  Speaker 1: really good to talk with you again. We mentioned the
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  Speaker 1: website two class financial dot com. Really good resource.
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  Speaker 3: Eric.
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  Speaker 1: How have you been, Eric Schwartz? How's how's your new
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  Speaker 1: year so far?
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  Speaker 3: You know, it's it's going pretty well. I can't complain yet, Sean.
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  Speaker 1: You haven't lost any gingerbread contests, have you? No?
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  Speaker 3: No, But CJ's not lying. He's been on a pretty
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  Speaker 3: good winning streak recent.
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  Speaker 1: He is, Yes, he has. And it's always fun to
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  Speaker 1: you know, as we look forward to the new year,
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  Speaker 1: and always fun to talk with you guys about about
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  Speaker 1: some important conversations and fun conversations as well as you
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  Speaker 1: talk about hitting retirement goals and how you kind of
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  Speaker 1: make that a reality and it's a big deal for folks.
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  Speaker 1: It's one thing to have kind of high in the
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  Speaker 1: sky thoughts, is another thing to really start working on
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  Speaker 1: that plan and working to achieve that goal. And we'll
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  Speaker 1: get into that in just a moment. A couple of
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  Speaker 1: things I mentioned, of course, the phone lines are open
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  Speaker 1: six oh eight three two one thirteen ten. That's six
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  Speaker 1: oh eight three two one thirteen ten to get on there.
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  Speaker 1: You can learn more about Class Financial on their website
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  Speaker 1: class financial dot com and there telephone number six oh
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  Speaker 1: eight four four two five six three seven. And before
• 2:25
  Speaker 1: we get rolling on this week's conversation, another great feature
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  Speaker 1: of the program is the Class Quiz question Leak your
• 2:30
  Speaker 1: chance to win a fantastic prize. This week no exception,
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  Speaker 1: our friends from Class Financial provided a twenty five dollars
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  Speaker 1: gift card to I Hop for the winner of the
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  Speaker 1: Class Quiz question Leak. I'll tell you a bit, a
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  Speaker 1: little bit later on the program how you can win
• 2:41
  Speaker 1: that little tip. Don't listen closely to the program, oftentimes
• 2:44
  Speaker 1: question and answer come up during the show. And before
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  Speaker 1: we start talking about this week's conversation, let's actually roll
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  Speaker 1: back to a couple of weeks ago and take a
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  Speaker 1: look at class quiz question Leaku get the question and
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  Speaker 1: the answer there as well. Yeah.
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  Speaker 3: So, as always, thank you to everyone for listening. From
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  Speaker 3: a couple weeks back was Dean of Middleton and the
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  Speaker 3: question was true or false. IRA contribution levels in twenty
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  Speaker 3: twenty five will remain the same at seven thousand dollars
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  Speaker 3: if you are under the age of fifty and the
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  Speaker 3: answer to that is true.
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  Speaker 1: Yes, fantastic. Congratulations to Dean. You two can be like
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  Speaker 1: Dean pay coals attention to the program a chance to
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  Speaker 1: win a little bit. Later on in the show, as mentioned,
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  Speaker 1: of course, we are going to be talking about successfully
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  Speaker 1: hitting your retirement goals, and I guess Cejy that you
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  Speaker 1: might want to discuss how much we need to save
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  Speaker 1: today to make that a reality. Don't you want to
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  Speaker 1: do that?
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  Speaker 2: Yeah? Absolutely, So we're excited to share strategies for ensuring
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  Speaker 2: you're on the right path today to achieve the retirement
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  Speaker 2: you dream about tomorrow. So visualizing the bullseye and systematically
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  Speaker 2: working towards your goals is essential, and as we move
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  Speaker 2: into twenty twenty five, this is a perfect time to
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  Speaker 2: reassess your goals. So for many of our listeners over fifty.
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  Speaker 2: Retirement that once seemed far away may now just be
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  Speaker 2: five or ten years away. And the big question is
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  Speaker 2: am I doing what I need to do to retire comfortably?
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  Speaker 2: You know, how much will you need in your retirement
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  Speaker 2: and investment accounts when you retire? These are questions you
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  Speaker 2: might be asking now. According to Bank Rates twenty twenty
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  Speaker 2: four Financial Regrets Survey, thirty seven percent of baby boomers
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  Speaker 2: ages sixty to seventy eight say their biggest financial regret
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  Speaker 2: is not saving enough for retirement. Pretty interesting. So darn
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  Speaker 2: near forty percent of retirees sage sixty to seventy eight
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  Speaker 2: say their biggest retirement regret is not saving enough for retirement.
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  Speaker 2: So we generally advise that while some people need call it,
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  Speaker 2: seventy to eighty percent of their pre retirement income to
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  Speaker 2: maintain their lifestyle, others may not. So you'll often hear
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  Speaker 2: us on the show talk about what we call rules
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  Speaker 2: of thumb, and often people say, hey, our household brings,
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  Speaker 2: you know, has one hundred thousand dollars a year of income.
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  Speaker 2: How much of that will I need to live comfortably
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  Speaker 2: and retire? I'm sorry retirement, And we will often say
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  Speaker 2: seventy to eighty percent of that. The issue is rules
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  Speaker 2: of thumb are terrible when you try to make individual
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  Speaker 2: applications because if we were to take all the data
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  Speaker 2: and average it up, that seventy to eighty percent number
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  Speaker 2: might be true. But listen, Eric and I work with
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  Speaker 2: people who need thirty percent of their working income in retirement.
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  Speaker 2: We have others who need one hundred plus percent of
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  Speaker 2: their retirement income in retirement or sorry, their pre retirement
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  Speaker 2: income in retirement. So be cautious of the rules of thumb.
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  Speaker 2: One good place to begin if you're thinking about how
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  Speaker 2: much you need to replace would be just see what
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  Speaker 2: your current take home income is, i e. What is
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  Speaker 2: hitting your bank account. That is a good place to
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  Speaker 2: start for building out what you might need in retirement. Now.
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  Speaker 2: Maybe you started saving late or other financial responsibilities have
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  Speaker 2: delayed your progress, but the key is to act now
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  Speaker 2: so that so that you can move closer to your
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  Speaker 2: target with every step. So what Eric and I are
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  Speaker 2: going to do today is we're going to look at
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  Speaker 2: five action steps you can take to help hit your
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  Speaker 2: retirement bullseye in the future.
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  Speaker 1: Dokoin's Morning with CJ. Closs and Eric Schwartz our retirement
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  Speaker 1: planning professionals from Class Financial, the website class financial dot
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  Speaker 1: com that's coss k l as financial dot com and
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  Speaker 1: their telephone numbers six soh eight four four two five
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  Speaker 1: six three seven. So CJ. Let's get started on some
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  Speaker 1: of those action steps and some of the areas that
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  Speaker 1: you should be really focusing in on today.
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  Speaker 2: Yeah. Action step number one would be to shore up
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  Speaker 2: your retirement and other savings accounts, So thank you know
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  Speaker 2: four oh one K, four oh three B accounts. Question
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  Speaker 2: you should be asking is are you maximizing your contributions.
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  Speaker 2: We suggest that households save somewhere between ten to fifteen
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  Speaker 2: percent of their gross household income towards retirement and take
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  Speaker 2: full advantage of any employer matching that is available to you.
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  Speaker 2: This is what we call free money towards your retirement.
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  Speaker 2: And in twenty twenty five, you can defer up to
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  Speaker 2: twenty three thousand than five hundred dollars into your four
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  Speaker 2: to one K or four h three B think employer
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  Speaker 2: sponsored retirement plan for the most part, and if your
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  Speaker 2: age fifty, you can add another seventy five hundred dollars
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  Speaker 2: to that. Twenty three thousand, five hundred for a total
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  Speaker 2: of thirty one thousand. So again keeping it simple, four
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  Speaker 2: O one K four h three B. If you're under fifty,
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  Speaker 2: it's twenty three thousand, five hundred. If you're over fifty,
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  Speaker 2: the maximum you can put in this thirty one thousand,
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  Speaker 2: and beginning in twenty twenty five, here's interesting little factor.
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  Speaker 2: If you are between the ages of sixty and sixty three,
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  Speaker 2: you can contribute another eleven thousand, two hundred and fifty,
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  Speaker 2: totaling thirty four thousand, seven hundred and fifty. Pretty interesting stuff. That.
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  Speaker 2: By the way, that eleven two hundred fifty is your
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  Speaker 2: catch up instead of that seventy five hundred we were
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  Speaker 2: talking about before. But you get the idea. You want
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  Speaker 2: to pause and say, am I contributing enough to my
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  Speaker 2: retirement accounts to hit that ten to fifteen percent of
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  Speaker 2: gross household income? And am I maxing out if I
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  Speaker 2: have the capability of doing so? Now, IRA accounts are
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  Speaker 2: a little bit different. If you're eligible, you can contribute
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  Speaker 2: at least seven thousand dollars if you're if you're fifty
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  Speaker 2: and younger, and then you have an extra thousand dollars
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  Speaker 2: catch up if you're over the age of fifty for
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  Speaker 2: eight thousand dollars total. Also consider funding a spousal IRA.
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  Speaker 2: If you're married and your spouse isn't working, you can
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  Speaker 2: contribute not only to yourself, but also to your spouse's
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  Speaker 2: retirement account. And then, of course, depending upon your total
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  Speaker 2: income and taxability of income, you may want to consider
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  Speaker 2: wroth irays or WROTH for a one case, because that
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  Speaker 2: offers tax free growth in the future if you leave
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  Speaker 2: it alone long enough and if you get to retirement.
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  Speaker 2: I would caution you we did a show on this
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  Speaker 2: a couple of weeks ago in that probably too many
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  Speaker 2: people are in our opinion, too many people are trying
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  Speaker 2: to contribute to roth accounts because they don't understand how
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  Speaker 2: the tax code works. But WROTH account especially if you're
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  Speaker 2: looking at conversions or depending upon your age, can be
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  Speaker 2: really great. And finally, if you're not contributing enough, a
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  Speaker 2: lot of times Eric and I, just saying you should
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  Speaker 2: contribute more is is not encouraging. And so one thing
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  Speaker 2: to think about is just to say, hey, each time
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  Speaker 2: you get like a cost of living adjustment or a
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  Speaker 2: raise each year, as you flip into the new year,
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  Speaker 2: consider increasing your contribution by one percent per year. This
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  Speaker 2: will help you to slowly, over time build up to
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  Speaker 2: that ten to fifteen percent target.
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  Speaker 1: Last time you and I spoke in person, CJ. I
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  Speaker 1: had mentioned to you since doing the show and getting
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  Speaker 1: regularly reminded, it's been quite I've taken that advice and
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  Speaker 1: I've been I can't say enough about about how rewarding
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  Speaker 1: that's been. When you see that, you see that statement
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  Speaker 1: at the end of each year, you going, oh my goodness, nice, nice, nice, nice.
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  Speaker 1: So it's really really good to hear from CJ, CJ.
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  Speaker 1: Closs and Eric Schwartz, our retirement planning professionals from Class
• 9:55
  Speaker 1: Financial speaking up Class Financial. Yeah, haven't been to the
• 9:57
  Speaker 1: website yet, Head on over there. Check them out class
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  Speaker 1: dot com. That's COSS k l A A S Financial
• 10:02
  Speaker 1: dot com and their telephone number six O eight four
• 10:05
  Speaker 1: four two five six three seven. No charge for the
• 10:07
  Speaker 1: initial get to know you appointment at COLSS Financial. It
• 10:09
  Speaker 1: will be complimentary to you again their number six oh
• 10:12
  Speaker 1: eight four four two five six three seven. Talk with
• 10:15
  Speaker 1: Eric a bit about things like CDs or bank savings,
• 10:18
  Speaker 1: other cash council, get some of those details and so
• 10:20
  Speaker 1: much more. Next as Money in Motion with COSS Financial
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  Speaker 1: continues right here on thirteen ten. W I B A.
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  Speaker 1: I answers to retire, talking this week with our retirement
• 10:36
  Speaker 1: planning professionals CJ. Closs and Eric Schwartz. They come to
• 10:39
  Speaker 1: us from Colass Financial, the website Coss Financial dot com.
• 10:42
  Speaker 1: That's Coss k l a a s Financial dot com
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  Speaker 1: and their telephone number six O eight four four two
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  Speaker 1: five six three seven. Talking with CJ and Eric this
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  Speaker 1: morning about thinking ahead to your retirement in ways and
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  Speaker 1: things you can do right now to reach those goals
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  Speaker 1: and to make it a reality.
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  Speaker 3: Do forget.
• 10:59
  Speaker 1: If you miss a part of the program, you can
• 11:01
  Speaker 1: always listen back online at class financial dot com. That's
• 11:04
  Speaker 1: Class k l a a s Financial dot com. Also,
• 11:07
  Speaker 1: while you're there, you can sign up for the weekly
• 11:08
  Speaker 1: Market Pulse newsletter. It's a great weekly snapshot of what's
• 11:11
  Speaker 1: been going on in the markets and some other great
• 11:14
  Speaker 1: information delivered to you in your inbox every other week
• 11:17
  Speaker 1: or so. It's again something I subscribed to a number
• 11:19
  Speaker 1: of years ago, and I love getting it. Also as
• 11:20
  Speaker 1: a link to the podcast again that available to you
• 11:22
  Speaker 1: at class financial dot com. So, Eric, as we kind
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  Speaker 1: of break these these these action steps down, what about
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  Speaker 1: things like bank saving CDs or other cash accounts. What
• 11:32
  Speaker 1: are what are some of the areas there that we
• 11:34
  Speaker 1: need to need to be aware of when it comes
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  Speaker 1: to action steps.
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  Speaker 3: Yeah, so something you know, we'll talk about having an
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  Speaker 3: emergency fund and making sure that you have that call it,
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  Speaker 3: you know, six to twelve months of savings in the
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  Speaker 3: bank just for a rainy day, right, we know, things happen.
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  Speaker 3: But one of the things that's become important here over
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  Speaker 3: the last few years has really been making sure that
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  Speaker 3: we're being cognizant of the interest rates or receiving on
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  Speaker 3: those dollars. At moderate levels, it erodes your purchasing power
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  Speaker 3: over time. So when you're looking at where your emergency
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  Speaker 3: fund is currently sitting, think about options like a high
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  Speaker 3: savings account, a money market account, or or CDs. Now
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  Speaker 3: I knows as interest rates fluctuate, the CDs and things
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  Speaker 3: like that require a little bit more maintenance and making
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  Speaker 3: sure you're you know, hitting the right timeframe and things
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  Speaker 3: like that. But just really beyond making sure you have
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  Speaker 3: money set aside, make sure it's sitting in a place
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  Speaker 3: that's going to get you them some return in the
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  Speaker 3: short term. Another really really important thing is is looking
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  Speaker 3: at reducing or in some cases even eliminating your debt. Okay,
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  Speaker 3: so debt can undermine your financial security and retirement really,
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  Speaker 3: really easily. I think a lot of people here, you know,
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  Speaker 3: especially in today's day and age, when you when you
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  Speaker 3: buy something, it's not how much does it cost, but
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  Speaker 3: it's how much is it per month? Right? People think of, oh,
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  Speaker 3: I can finance it, and you know, over time it's
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  Speaker 3: not even really that much money. Well, when you do
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  Speaker 3: that enough times, it does become a lot of money,
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  Speaker 3: and when you're trying to manage your monthly cash flow,
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  Speaker 3: it becomes it becomes a lot more difficult. Currently, if
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  Speaker 3: you look at the baby boomer generation, which is you know,
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  Speaker 3: either in retirement or rapidly approaching, depending where they kind
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  Speaker 3: of fall in that in that timeline, the average mortgage
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  Speaker 3: for a boomer right now is about one hundred and
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  Speaker 3: ninety one thousand, credit card debt is a little over
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  Speaker 3: sixty five hundred, car auto loan or car debt is
• 13:40
  Speaker 3: over twenty one thousand, and there's you know, an average
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  Speaker 3: balance of about forty three thousand dollars in student loans,
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  Speaker 3: So plenty of debt out there stealing cash flow from
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  Speaker 3: from folks, what can we do about this? So the
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  Speaker 3: biggest I think the first step in most cases is
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  Speaker 3: paying off your credit cards. So, especially as interest rates
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  Speaker 3: over the last two to three years have begun to rise,
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  Speaker 3: those interest rates are the first things to shoot up.
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  Speaker 3: So tackle that high interest debt first. You can use
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  Speaker 3: something like a credit Karma or annual credit report dot
• 14:17
  Speaker 3: com to kind of monitor your your accounts and stay
• 14:21
  Speaker 3: on top of that and make sure you're tracking your spending. Okay,
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  Speaker 3: so create a budget. There's apps out there, like you
• 14:28
  Speaker 3: know y nab Stance where you need a budget. Personal
• 14:32
  Speaker 3: Capital is another one, I know, popular one for a
• 14:35
  Speaker 3: while with Mint that's been sort of absorbed into credit Karma,
• 14:39
  Speaker 3: so it still kind of exists at some level. But
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  Speaker 3: find a way to make sure that you are tracking
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  Speaker 3: what you're spending and that the biggest part is that
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  Speaker 3: you're doing something. So I often talk to people and
• 14:52
  Speaker 3: they say, yeah, I have this app and you know,
• 14:54
  Speaker 3: it connects to my credit card, and I kind of
• 14:57
  Speaker 3: kind of watch it and see if I can, you know,
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  Speaker 3: find some patterns or trends or whatever it might be.
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  Speaker 3: But sometimes it's just like, hey, I have an Excel spreadsheet,
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  Speaker 3: and I put my expenses in there because.
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  Speaker 2: It keeps me accountable, so it doesn't.
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  Speaker 3: Have to be super complicated. Make sure you're doing something
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  Speaker 3: to manage your expenditures.
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  Speaker 1: Talking this morning with Eric Schwartz and CJ. Closs, they
• 15:19
  Speaker 1: are our retirement planning professionals from Class Financial getting a
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  Speaker 1: list of some great action steps. Of course, as we're
• 15:24
  Speaker 1: into the new year, a lot of us focusing in
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  Speaker 1: on bettering ourselves and bettering our future. Some really good
• 15:29
  Speaker 1: tips this morning. Don't forget if you miss any part
• 15:32
  Speaker 1: of today's program, I want to listen back to this
• 15:34
  Speaker 1: or other shows. You can always head on over to
• 15:35
  Speaker 1: class financial dot com. That's coss k l Aasfinancial dot com.
• 15:40
  Speaker 1: There twelve for whatever six oh eight four four two
• 15:43
  Speaker 1: five six three seven, No charge for the financial'll get
• 15:45
  Speaker 1: to know you, apployment dech colss Financial. It will be
• 15:47
  Speaker 1: complimentary to you again their office number right here in
• 15:50
  Speaker 1: Madison six oh eight four four two five six three seven.
• 15:53
  Speaker 1: We will talk a little bit about a little bit
• 15:55
  Speaker 1: more about action steps well. Also do the Money in
• 15:57
  Speaker 1: Motion listener question corner as well as the Lost Quiz
• 16:00
  Speaker 1: question a week we will do all of that coming
• 16:02
  Speaker 1: up next as Money in Motion with Class Financial continues
• 16:04
  Speaker 1: right here on thirteen ten, WIBI talking this week with
• 16:08
  Speaker 1: our retirement planning professionals CJ Closs and Eric Schwartz. Of
• 16:11
  Speaker 1: course they come to us from Class Financial online colssfinancial
• 16:15
  Speaker 1: dot com. That's k l aas Financial dot com and
• 16:18
  Speaker 1: they're telephone number six. So eight four four two five
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  Speaker 1: six three seven, talking to this week about some action plans,
• 16:24
  Speaker 1: some steps to take when it comes to working towards
• 16:27
  Speaker 1: and achieving your retirement goals. Things you can do now,
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  Speaker 1: things you can do today, things you should be checking
• 16:32
  Speaker 1: off your list. And CJ, what about paying off our
• 16:36
  Speaker 1: more mortgages before retirement? Is that something we should be
• 16:39
  Speaker 1: aiming for.
• 16:40
  Speaker 2: Yeah, great question. But before I answer that, so to
• 16:44
  Speaker 2: remind you were looking at five action steps. First on
• 16:46
  Speaker 2: was shoring up your retirement accounts and savings. Number two
• 16:49
  Speaker 2: that Eric just went through here a moment ago was
• 16:51
  Speaker 2: keep an emergency fund, and then number three that Eric
• 16:54
  Speaker 2: reviewed was eliminate or reduce debt. The reason I wanted
• 16:58
  Speaker 2: to go through that is because now we are to
• 17:00
  Speaker 2: number four, which is planned to pay off your mortgage,
• 17:03
  Speaker 2: which falls right in line with Eric's original comment of
• 17:07
  Speaker 2: reduced debt. So here's why eliminating your mortgage reduces your
• 17:12
  Speaker 2: required cash flow to fund your retirement. Now, listen, everybody,
• 17:17
  Speaker 2: I live in the real world just like you, and
• 17:20
  Speaker 2: so I understand that sometimes life can throw your lemons
• 17:25
  Speaker 2: right and you do your best to make lemonade out
• 17:27
  Speaker 2: of that. But goodness, can you pay off your mortgage?
• 17:29
  Speaker 2: Sometimes it's not possible, that's okay, but if it is
• 17:34
  Speaker 2: within your control, we would suggest that you do so.
• 17:38
  Speaker 2: The second way I see this whole mortgage elimination play
• 17:41
  Speaker 2: out in the real world is a bunch of misinformation.
• 17:46
  Speaker 2: Misinformation Number one would be but CJ, it's good to
• 17:50
  Speaker 2: have a mortgage because you can deduct the interest. Listen, everybody,
• 17:55
  Speaker 2: Oh my goodness, that is such terrible guidance. If you
• 18:00
  Speaker 2: are holding onto a mortgage that could be paid off
• 18:03
  Speaker 2: because you want the interest deduction, then you're really bad
• 18:08
  Speaker 2: at math. You're just really, really really bad at math.
• 18:11
  Speaker 2: And I don't want to get into the actual math
• 18:13
  Speaker 2: of this, but especially nowadays under the Tax Cuts and
• 18:17
  Speaker 2: Jobs Act. This could change in the future. But under
• 18:19
  Speaker 2: the Tax Cuts and Jobs Act, you're limited on how
• 18:22
  Speaker 2: much mortgage interest you can deduct in the first place,
• 18:24
  Speaker 2: and the number of people who use that mortgage interest
• 18:27
  Speaker 2: deduction and get a huge tax benefit out of it
• 18:29
  Speaker 2: are few and far between, not to mention just the
• 18:32
  Speaker 2: risk it adds to your future retirement. And finally, another
• 18:36
  Speaker 2: kind of real world application that I see as it
• 18:39
  Speaker 2: relates to this whole payoff your mortgage or I should
• 18:41
  Speaker 2: say a kickback I receive, is people say, why would
• 18:45
  Speaker 2: I ever pay off my mortgage when it's three percent?
• 18:47
  Speaker 2: Then everybody knows I can get four percent on my
• 18:50
  Speaker 2: money market and savings account. Listen, if you want to
• 18:54
  Speaker 2: play the interest rate arbitrage game, that's up to you.
• 18:59
  Speaker 2: But I would say to you if we again survey
• 19:02
  Speaker 2: our clients and say, like in practice, when you are
• 19:05
  Speaker 2: in retirement, what do you like the most? Really high
• 19:09
  Speaker 2: on their list is being debt free because the cloud
• 19:12
  Speaker 2: is gone, right, the cloud over your head of like, oh,
• 19:14
  Speaker 2: I got to make sure I have three thousand dollars
• 19:16
  Speaker 2: a month coming in otherwise I can't meet my mortgage payment.
• 19:20
  Speaker 2: When your debt is gone, whether you've got an interest
• 19:22
  Speaker 2: rate arbitrage opportunity or not, you suddenly find that just
• 19:26
  Speaker 2: the cloud that was over your head is gone. So
• 19:30
  Speaker 2: long story short, pay off your mortgage. That is action
• 19:33
  Speaker 2: step number four.
• 19:35
  Speaker 1: Talking this morning with CJ. Closs and Eric Schwartz, our
• 19:38
  Speaker 1: retirement planning professionals from Class Financial, always fascinating conversation, of course,
• 19:44
  Speaker 1: So we work through these action steps. We got one, two, three,
• 19:46
  Speaker 1: and four, which brings us now CJ to action step
• 19:50
  Speaker 1: number five.
• 19:52
  Speaker 2: Yeah, so action step number five would be to automate
• 19:55
  Speaker 2: your retirement savings and focus on your goals. So when
• 20:00
  Speaker 2: we say automate retirement savings, We've talked about this on
• 20:03
  Speaker 2: the show quite a bit, but we have found that
• 20:06
  Speaker 2: people succeed or fail in reaching their goals not for
• 20:12
  Speaker 2: lack of knowledge, but for lack of execution. So let
• 20:16
  Speaker 2: me repeat that people succeed or fail in achieving their
• 20:19
  Speaker 2: financial or retirement goals not for lack of knowledge, but
• 20:23
  Speaker 2: for lack of execution. So what do we mean by this, Well, listen,
• 20:28
  Speaker 2: we all live, as I just mentioned before, in the
• 20:31
  Speaker 2: real world, and in the real world we have companies
• 20:33
  Speaker 2: marketing the heck kind of things to us, right, and
• 20:36
  Speaker 2: if you say to somebody, hey, you've got one hundred
• 20:39
  Speaker 2: dollars in your hand, you can either save that and
• 20:41
  Speaker 2: never see it again until you're sixty, or you can
• 20:44
  Speaker 2: take that one hundred dollars and buy the bright, new
• 20:46
  Speaker 2: shiny object that just got marketed to you and your
• 20:48
  Speaker 2: family a billion times through the TV. What do you
• 20:51
  Speaker 2: think people are going to do, well, They're going to
• 20:53
  Speaker 2: buy the object. So when we say automate your retirement savings,
• 20:58
  Speaker 2: one of the best ways to save for the future
• 21:01
  Speaker 2: in terms of like building out your goals is to
• 21:04
  Speaker 2: pay yourself first. And what we mean by that is, hey,
• 21:07
  Speaker 2: before that money ever hits your bank account, you deduct
• 21:11
  Speaker 2: it right out of there into your retirement account. Or
• 21:14
  Speaker 2: let's say you don't have a company sponsored retirement account.
• 21:17
  Speaker 2: Then is soon as it hits your bank account, literally
• 21:19
  Speaker 2: the next day is transferring out to your IRA. If
• 21:23
  Speaker 2: you don't do this, I will just warn you, the
• 21:26
  Speaker 2: likelihood of your success drops precipitously. So said another way,
• 21:31
  Speaker 2: if you are relying on what is left in your
• 21:33
  Speaker 2: bank account at the end of a month to save,
• 21:37
  Speaker 2: it's unlikely that you will meet any long term financial goals.
• 21:41
  Speaker 2: So we would suggest automating your retirement savings, automating the
• 21:46
  Speaker 2: building of your emergency reserve funds, and then finally within
• 21:50
  Speaker 2: that it's kind of like know thyself. And what I
• 21:53
  Speaker 2: mean is there's some people on the air right now
• 21:55
  Speaker 2: that are listening to me going, I have no idea
• 21:57
  Speaker 2: what he's talking about. I have no problem not spending money.
• 22:00
  Speaker 2: Like CJ, what are you even saying? I always have
• 22:03
  Speaker 2: money left in my bank account at the end of
• 22:04
  Speaker 2: the month. Great, God bless you. That's amazing. But there's
• 22:08
  Speaker 2: a lot of you listening to me right now who
• 22:10
  Speaker 2: are kind of like looking over your shoulder being like,
• 22:12
  Speaker 2: is he looking at me? Because you know exactly what
• 22:15
  Speaker 2: I'm talking about. You're the one who's like, if there's
• 22:18
  Speaker 2: money in the bank account, it just goes. I don't
• 22:20
  Speaker 2: know why, but it just goes. It's gone. You put
• 22:22
  Speaker 2: cash in my hand and it's gone. So know thyself
• 22:25
  Speaker 2: would just be know how you function and operate and
• 22:28
  Speaker 2: learn to build rules and systems and automation to make
• 22:32
  Speaker 2: sure that you still meet your goals within your bad
• 22:35
  Speaker 2: emotional financial patterns. Hope that makes sense.
• 22:38
  Speaker 1: It makes perfect sense. Fantastic information and really good perspective
• 22:41
  Speaker 1: from CJ. Closs and Eric Schwartz, our retirement planning professionals
• 22:45
  Speaker 1: from Class Financial. It's a great day to start that conversation.
• 22:47
  Speaker 1: Of course, you can make an appointment with Class Financial,
• 22:49
  Speaker 1: not going to charge you anything for the initial gets
• 22:51
  Speaker 1: to know you appointment till I gotta dock bone get
• 22:53
  Speaker 1: a call. Six oh eight four four two five six
• 22:55
  Speaker 1: three seven. That's for the office right here in Madison.
• 22:57
  Speaker 1: Again that number slower six oh eight four five six
• 23:00
  Speaker 1: three seven. Learn more online COSS Financial dot dot com.
• 23:04
  Speaker 1: That's Coss Klaas Financial dot com. Also, while you're there,
• 23:07
  Speaker 1: you can always email a question in our Money and
• 23:09
  Speaker 1: Motion listener question corner, And this week Chris took the
• 23:13
  Speaker 1: time to write it. He says, I've heard that if
• 23:15
  Speaker 1: I wait to begin my Social Security until I'm aged seventy,
• 23:18
  Speaker 1: I will get a bigger benefit. Does it make sense
• 23:21
  Speaker 1: to plan for that if I'm unmarried? And I will
• 23:24
  Speaker 1: put that on your shoulders, CJ.
• 23:29
  Speaker 2: That's a great question, Chris. I guess let's begin with
• 23:32
  Speaker 2: first off, thank you for submitting that question. And then
• 23:34
  Speaker 2: number two, just remind everybody that you can submit a
• 23:36
  Speaker 2: question online as well. But yeah, great question. If I
• 23:41
  Speaker 2: am unmarried and I've heard that social Security will go
• 23:43
  Speaker 2: up until I'm aged seventy, should I wait to do that?
• 23:47
  Speaker 2: And the answer is maybe, maybe, what do we say?
• 23:50
  Speaker 2: It depends. So here's what everybody should know. While you
• 23:54
  Speaker 2: can draw Social Security as early as age sixty two
• 23:56
  Speaker 2: on your own, what we call retirement benefit, full retirement
• 24:01
  Speaker 2: age is somewhere between age sixty six and sixty seven,
• 24:04
  Speaker 2: depending upon the year that you were born. Full retirement
• 24:07
  Speaker 2: age is just what Social Security would call your full
• 24:09
  Speaker 2: unreduced benefit. You draw before that, it's reduced, but then
• 24:13
  Speaker 2: they offer what are called these delayed retirement credits between
• 24:16
  Speaker 2: say full retirement age. It we'll call it sixty seven
• 24:19
  Speaker 2: up to age seventy, and if you wait, it grows
• 24:21
  Speaker 2: by about eight percent per year. So this is what
• 24:23
  Speaker 2: Chris is referencing. Should I wait? The answer is maybe
• 24:27
  Speaker 2: if you were married, Chris, I would say yes, very
• 24:31
  Speaker 2: very strongly, that might be a great choice, because what
• 24:35
  Speaker 2: happens everybody is if one of you can get to
• 24:37
  Speaker 2: the highest possible benefit amount, if the other one dies,
• 24:43
  Speaker 2: one of the Social Security benefits goes away, but you
• 24:45
  Speaker 2: keep the higher of the two. So if you're married
• 24:48
  Speaker 2: and you want to get one of those benefits as
• 24:51
  Speaker 2: high as possible, so that then if one of you dies,
• 24:54
  Speaker 2: you keep this really high benefit amount. It acts almost
• 24:57
  Speaker 2: like an insurance policy for the household. But given Chris
• 25:00
  Speaker 2: that you said that you are unmarried, the primary factor
• 25:04
  Speaker 2: there would be what we call break even calculations and
• 25:08
  Speaker 2: longevity calculations. So break even is just how long will
• 25:11
  Speaker 2: it take you to actually be money ahead if you
• 25:14
  Speaker 2: wait to age seventy And by the way, Chris, that
• 25:17
  Speaker 2: age is typically somewhere between eighty and eighty one. And
• 25:21
  Speaker 2: then and then number two would be mortality calculations, which
• 25:24
  Speaker 2: is just like, Chris, how long did everybody and your
• 25:27
  Speaker 2: family live? Right? And if you say, well, everybody my
• 25:29
  Speaker 2: family died at seventy two, I'd go, hmm, probably don't
• 25:32
  Speaker 2: wait till age seventy to draw your social security. Conversely,
• 25:35
  Speaker 2: if Chris says I'm healthy as all get out and
• 25:37
  Speaker 2: everybody in my family live to age one hundred, yeah,
• 25:40
  Speaker 2: then you might want to wait till age seventy because
• 25:42
  Speaker 2: as long as you live beyond eighty one or eighty
• 25:45
  Speaker 2: two when those break even calculations hit, you could be
• 25:48
  Speaker 2: money ahead. So listen. I hope that's helpful for everybody
• 25:52
  Speaker 2: to listen to me ramble through the different factors that
• 25:55
  Speaker 2: impact social security. But I will tell you be careful
• 25:58
  Speaker 2: of these rules of thumb. Again, all of you should
• 26:01
  Speaker 2: be meeting with your advisor accountant to come up with custom,
• 26:04
  Speaker 2: custom responses to these questions for your household.
• 26:07
  Speaker 1: It's always interesting getting to getting some perspective on kind
• 26:09
  Speaker 1: of how the stuff can play out and some of
• 26:11
  Speaker 1: the considerations, and it's so important to have that personalized conversation.
• 26:15
  Speaker 1: One of the great things about Class Financial is at
• 26:17
  Speaker 1: first get to know you appointment at Class Financial. It's
• 26:19
  Speaker 1: not going to cost you a thing. Oh, I got
• 26:20
  Speaker 1: to just pick up phone. Give the call six so
• 26:22
  Speaker 1: eight four four two five six three seven. That's six
• 26:25
  Speaker 1: soh eight four four two five six three seven. Learn
• 26:27
  Speaker 1: more online cossfinancial dot com. That's coss klaas Financial dot com.
• 26:32
  Speaker 1: Time now for the Coss Quiz Question the Week. It
• 26:34
  Speaker 1: works like this. In just a moment, I'll ask you
• 26:36
  Speaker 1: the Class Quiz question the League. You'll then have thirty
• 26:37
  Speaker 1: minutes from the today's program to call the Class Financial
• 26:40
  Speaker 1: office right here in Madison at six oh eight four
• 26:42
  Speaker 1: four two five six three seven. If you are the
• 26:45
  Speaker 1: first call with correct answer, you'll win this week's prize,
• 26:47
  Speaker 1: which is a twenty five dollars gift card to I
• 26:50
  Speaker 1: hop this week's COLSS Quiz Question the week is this.
• 26:53
  Speaker 1: If you are fifty five years old in twenty twenty five,
• 26:57
  Speaker 1: how much can you contribute into your retirement plan at work?
• 27:01
  Speaker 1: Is it twenty five thousand dollars or thirty one thousand
• 27:05
  Speaker 1: dollars telephone number six oh eight four four two five
• 27:08
  Speaker 1: six three seven first gart correct answer won that twenty
• 27:11
  Speaker 1: five dollars gift card to IHOP don't for good as well.
• 27:13
  Speaker 1: That's class Financial office right here in Madison. Six oh
• 27:15
  Speaker 1: eight four four two five six three seven CJ. Eric.
• 27:19
  Speaker 1: It's always great chatting with both of you, guys. Have
• 27:21
  Speaker 1: a fantastic day and happy New Year. Thanks Sean, Thanks Ton,
• 27:25
  Speaker 1: Take care guys. Doctor Marty Greer comes your way next
• 27:27
  Speaker 1: from checkout vet here on thirteen ten Wiba
• 28:02
  Speaker 3: S