Latest / Money In Motion with Klaas Financial / The Importance of Planning and How to Avoid Common Mistakes

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The Importance of Planning and How to Avoid Common Mistakes · Money In Motion with Klaas Financial

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Speaker 1: Join this morning by our retirement planning professionals from Class Financial,
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Speaker 1: Malia Quavis and Kyle Kite, of course, COSS Financially. You
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Speaker 1: can learn more about them on their website colss financial
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Speaker 1: dot com. That's Colss k l aas Financial dot com.
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Speaker 1: Telephone number six oh eight four four two five six
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Speaker 1: three seven. Don't forget no charge for that initial get
0:20
Speaker 1: to know you appointment, that conversation at COSS Financial. It
0:22
Speaker 1: will be complementary to you again their telephone number six
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Speaker 1: oh eight four four two five six three seven. I'm
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Speaker 1: gonna be talking this week about some common mistakes folks
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Speaker 1: need to avoid when it comes to retirement planning. Door
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Speaker 1: for get. Also, if you have questions, whether it's about
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Speaker 1: today's topic or retirement planning in general, we've got phone
0:38
Speaker 1: lines open for you at six oh eight three two
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Speaker 1: one thirteen ten. That's six oh eight three two one
0:43
Speaker 1: thirteen ten. We'll get you right on the air with
0:45
Speaker 1: Malia and Kyle this morning. A couple great things I
0:48
Speaker 1: mentioned the website colass financial dot com. Not only is
0:51
Speaker 1: it a great place to learn more about Class Financial,
0:52
Speaker 1: you can also sign up and subscribe to the weekly
0:54
Speaker 1: Market Pulse newsletter. It's a great weekly email that arrives
0:57
Speaker 1: in your inbox with some great snapshots of what's been
1:00
Speaker 1: going on in the markets, as well as the link
1:02
Speaker 1: to the most recent podcasts that available to you at
1:04
Speaker 1: klossfinancial dot com as mentioned. Joined this morning by Malia
1:08
Speaker 1: Quavis and Kyle Kite. Melia, how are you doing this morning?
1:12
Speaker 2: Very good?
1:12
Speaker 3: How about you?
1:13
Speaker 1: I'm doing really well. Kyle? How have you been?
1:16
Speaker 3: I've been doing good. Sean, how about you?
1:17
Speaker 1: I'm doing really good and it's great to talk with you.
1:20
Speaker 1: We've got a very important conversation ahead. But before we
1:23
Speaker 1: get to this week's conversation, one of the really cool
1:25
Speaker 1: features as well about Money in Motion is a chance
1:27
Speaker 1: to win great prizes. This week you have a chance
1:29
Speaker 1: to win a twenty five dollars gift card to Amazon
1:32
Speaker 1: from our friends at Coloss Financial. And before we get
1:35
Speaker 1: rolling on this week's program, let's actually take a look
1:37
Speaker 1: back at last week's class quiz question week Malia and
1:40
Speaker 1: get the question and answer there as well.
1:43
Speaker 2: Yeah, so last week we had a really nice conversation
1:46
Speaker 2: revolving around our favorite topic. At least our client's favorite
1:49
Speaker 2: topic is when to take your Social Security and the
1:52
Speaker 2: ins and outs of that. So our question revolved around
1:56
Speaker 2: that subject, which was true or false? Once you received
1:59
Speaker 2: once you reach your full retirement age we call FRA,
2:03
Speaker 2: you are entitled to one hundred percent of your Social
2:06
Speaker 2: Security benefit. So true or false? Travis of Oregon. Congratulations
2:11
Speaker 2: to him. He called in and answered correctly true. Wait,
2:15
Speaker 2: once you reach the FRA you can receive one hundred
2:19
Speaker 2: percent of your Social Security benefit, so congratulations to him.
2:22
Speaker 2: Listen carefully for today's question.
2:24
Speaker 1: If you missed any part of last week's show, or
2:26
Speaker 1: miss any part today show, you can always listen back
2:27
Speaker 1: at colossfinancial dot com. That's class financial dot com. Speaking
2:31
Speaker 1: of the class quiz question, Leak, it pays to pay
2:33
Speaker 1: close attention to the program for a number of reasons.
2:35
Speaker 1: Great information, but oftentimes both the question and answer to
2:39
Speaker 1: the cost quiz question the league come up during the program. Again,
2:42
Speaker 1: we'll tell you all the details on how you can
2:43
Speaker 1: win that twenty five dollars gift card to Amazon a
2:45
Speaker 1: little bit later on in this half hour. So as
2:49
Speaker 1: we think about and of course this week, we're going
2:51
Speaker 1: to be talking about some of the mistakes people need
2:54
Speaker 1: to avoid with the retirement planning. And Kyle, what are
2:56
Speaker 1: some of those that we should be aware of when
2:58
Speaker 1: it comes to our own planning.
3:01
Speaker 3: Yeah, absolutely, Sean. These are obviously with us being retirement planners,
3:04
Speaker 3: we want to help people avoid these mistakes. So hopefully
3:07
Speaker 3: when you hear us go through these, if you think
3:10
Speaker 3: you're making one of these mistakes or haven't thought about them,
3:13
Speaker 3: bells should go off and you should proceed with caution
3:15
Speaker 3: and probably reach out to the financial advisor. So the
3:18
Speaker 3: first one is staying too aggressive in your portfolio. So
3:22
Speaker 3: this is where you know, this is hard to bounce
3:25
Speaker 3: back from if you're too aggressive right before retirement. So
3:29
Speaker 3: the famous one that I remember is from two thousand
3:31
Speaker 3: and eight, we had a client come in and they
3:33
Speaker 3: were almost in tears, and they had a really nice portfolio,
3:36
Speaker 3: and we asked them, you know, what was the issue,
3:38
Speaker 3: and he said, well, before last year, I had double
3:41
Speaker 3: this amount. So they stayed too aggressive too late in
3:43
Speaker 3: their portfolio. Basically had cut in half because of one
3:46
Speaker 3: bad year in the market. And so that is very,
3:49
Speaker 3: very hard to recover from because obviously if you lose
3:51
Speaker 3: fifty percent, it takes one hundred percent to get back
3:53
Speaker 3: up to where you were. Obviously, one hundred percent return
3:56
Speaker 3: to get that back. So it's very, very easily avoidable,
3:59
Speaker 3: which is why we kind of harp on it a
4:01
Speaker 3: little bit that the last thing you want to do
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Speaker 3: is you get close to retirement is just have too
4:04
Speaker 3: much left in the stock market and have something go
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Speaker 3: against you. It can be almost basically hard to come
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Speaker 3: back from so and so many people try to time
4:13
Speaker 3: the market to get in and get out at the
4:15
Speaker 3: right time and trying to make up for lost years
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Speaker 3: if they didn't start investing early enough, and this is
4:20
Speaker 3: just not a good idea like that, Managing that risk
4:23
Speaker 3: is the most important part as we get close to retirement.
4:25
Speaker 3: Tier The second mistake and the one that people are
4:29
Speaker 3: very very familiar with, is retiring without fully considering health
4:32
Speaker 3: insurance costs. So many people, as you know, will say
4:35
Speaker 3: that I'm working just for the insurance. If you've got
4:37
Speaker 3: friends or family members to say that, and it's because
4:39
Speaker 3: it is one of the biggest concerns for a lot
4:41
Speaker 3: of people. But there are some options out there. So
4:45
Speaker 3: many people would be eligible for Cobra continuation health coverage,
4:48
Speaker 3: which allows you to remain on your employer's planes for
4:51
Speaker 3: a certain amount of time. Generally, it's about eighteen months,
4:55
Speaker 3: but you may be required to pay up to one
4:56
Speaker 3: hundred and two percent of the planing cause, so what
4:59
Speaker 3: you see taken out on your check each week, or
5:01
Speaker 3: each every two weeks, whatever it is, you may have
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Speaker 3: to double that because you'll have to cover for what
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Speaker 3: the employer is currently paying. And generally, COBRA applies to
5:09
Speaker 3: all group health plans maintained by private sector employees with
5:13
Speaker 3: twenty or more employees, So again, this is one that
5:16
Speaker 3: many people will be eligible for, but it doesn't mean
5:19
Speaker 3: that it's cheap or it's going to be your best
5:20
Speaker 3: option or anything like that, so you should definitely speak
5:22
Speaker 3: with your employer for details. Another option when it comes
5:27
Speaker 3: to health insurance is if your spouse is going to
5:29
Speaker 3: continue working and if you can continue to be covered
5:32
Speaker 3: under their coverage. That obviously solves for this as well,
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Speaker 3: because generally, when you're working carrying insurance through an employer,
5:38
Speaker 3: it's obviously going to be a lot less expensive than
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Speaker 3: if you were to pay for it on your own.
5:42
Speaker 3: And then some people will have the Veterans Health Insurance
5:45
Speaker 3: or VA benefits, so if you're a veteran, you may
5:47
Speaker 3: be eligible to enroll to the or go to the
5:49
Speaker 3: VA for healthcare. And finally, the one that gets a
5:52
Speaker 3: lot of buzz is the Affordable Care Act. So if
5:55
Speaker 3: you're retiring more than one year before you turn sixty five,
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Speaker 3: you may be looking at justing a major medical insurance
6:01
Speaker 3: to the Affordable Care Act. And so this one, they
6:04
Speaker 3: actually have a website healthcare dot gov. You can actually
6:07
Speaker 3: go through and look at different options for health insurance
6:10
Speaker 3: costs and also plans that are available in your area,
6:13
Speaker 3: check networks, that kind of stuff. And this is really
6:17
Speaker 3: tied to your income. So if you're have a lower income,
6:21
Speaker 3: you may be entitled to some pretty good subsidies from
6:24
Speaker 3: the government to keep this health insurance and cost pence
6:26
Speaker 3: the name the Affordable Care Act. So, like I said,
6:29
Speaker 3: insurance is one of the big ones that people are
6:32
Speaker 3: concerned with, and with good reason, but there are some
6:34
Speaker 3: options out there for most people. Talk and the third
6:37
Speaker 3: mistake is cool.
6:39
Speaker 1: Oh, it's just because I was gonna mention talking this
6:40
Speaker 1: morning with Kyle Kite and Malia Quavis, our retirement planning
6:42
Speaker 1: professionals from Class Financial online Coss Financial dot com. That's
6:46
Speaker 1: Closs k l a A S Financial dot com. They're
6:48
Speaker 1: tel for number six, So eight four, four, two, five, six,
6:51
Speaker 1: three seven, And Kyle, sorry about cutting you off there.
6:54
Speaker 1: You're going to tell us about mistake number three.
6:57
Speaker 3: Yeah, number three is not being tax wise. So this
7:00
Speaker 3: is kind of a big thing that you'll hear us
7:02
Speaker 3: talk about a lot on the show, is you know,
7:04
Speaker 3: there's no getting away from paying taxes, but we want
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Speaker 3: to pay them as smartly and as efficiently as possible.
7:08
Speaker 3: So some people, you know, their big goal is I'm
7:10
Speaker 3: going to pay off my house before I retire, and
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Speaker 3: they've saved up a nice mess egg and they're going
7:15
Speaker 3: to pull money out of their flour one K to
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Speaker 3: pay off the mortgage to retire. And by doing that,
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Speaker 3: if you do that with all pre tax money, that
7:22
Speaker 3: could crush you as far as taxability. So if you
7:24
Speaker 3: pull out one hundred and fifty thousand dollars from your
7:26
Speaker 3: four oh one K to knock out your mortgage, that
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Speaker 3: whole one hundred and fifty thousand could be income taxable
7:31
Speaker 3: to you. They want to be very, very careful and
7:34
Speaker 3: that might not be the best option for you.
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Speaker 1: And you know what, I'd say, it's a great point
7:38
Speaker 1: that you bring up there as always Kyle, and I
7:40
Speaker 1: know we've done shows as well, where we kind of
7:43
Speaker 1: talk about heading into retirement with you know, with debt
7:47
Speaker 1: free and some of the calculations need to be made
7:50
Speaker 1: and the imports those conversations, Jevick. You can always listen back
7:52
Speaker 1: to previous shows those podcasts at class financial dot com.
7:55
Speaker 1: That's coss k l aas Financial dot com. Great website there.
8:00
Speaker 1: Not only to listen back to the podcast, you can
8:01
Speaker 1: even subscribe to the podcast online learn more about the
8:04
Speaker 1: Class Financial team again. That all at classfinancial dot com.
8:07
Speaker 1: They're tough for number six oh eight four four two
8:09
Speaker 1: five six three seven. No charge for the initial get
8:12
Speaker 1: to know your appointment tech Loss Financial. It will be
8:14
Speaker 1: complimentary to you again the number six oh eight four
8:16
Speaker 1: four two five six three seven. So, Malia, let's talk
8:20
Speaker 1: about choices when it comes to taking a pension if
8:22
Speaker 1: you have one of those, are there mistakes folks can
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Speaker 1: make with that decision?
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Speaker 2: Yeah, And you know, we were just sitting with some
8:32
Speaker 2: clients this week who are looking both of them husband
8:35
Speaker 2: and wife, are looking to retire both in February, and
8:39
Speaker 2: one of them is gonna have the option for a pension.
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Speaker 2: And this is where things get kind of nerve wracking.
8:45
Speaker 2: It's like, well, I'm not really sure how much it'll be,
8:48
Speaker 2: which choice should I take. I mean, they're giving me
8:51
Speaker 2: those preliminary numbers, and there's a lot of anxiety around this,
8:55
Speaker 2: and honestly there should be, because this is usually an
8:58
Speaker 2: irrevocable decision. Once you mark the little box, it kind
9:02
Speaker 2: of stays like that for the rest of your life.
9:04
Speaker 2: So it is a very important thing to look at
9:08
Speaker 2: with your financial planner before you just mark the box
9:10
Speaker 2: and send it in. And we have unfortunately had situations
9:13
Speaker 2: where that did happen and it wasn't the best option
9:16
Speaker 2: for the client. So you want to slow down, look
9:19
Speaker 2: at the options. Make sure you understand the difference between
9:24
Speaker 2: if I were able to take it out as a
9:27
Speaker 2: lump sum, a lump sum would mean it's all available
9:30
Speaker 2: to you right now. You typically would go ahead versus
9:34
Speaker 2: annuitizing it as a pension. You could actually take it out,
9:38
Speaker 2: roll it into your own IRA, and then you could
9:41
Speaker 2: create your own systemized distributions which are kind of like anneutized,
9:47
Speaker 2: but it could be shifted however you wanted to. However,
9:50
Speaker 2: if you take the traditional pension, which we talk about
9:54
Speaker 2: single joint or other choices, single or joint and there's
9:59
Speaker 2: several others that will be determined. You know what works
10:04
Speaker 2: in your situation. Do you need more income now? Does
10:08
Speaker 2: your spouse have a pension perhaps that's been turned on,
10:11
Speaker 2: and looking at those those amounts per month, what that
10:14
Speaker 2: will do for you. Perhaps the pension is worth more
10:19
Speaker 2: to you for the future if you know you have longevity,
10:22
Speaker 2: and that might be the best choice for you along
10:25
Speaker 2: the way. So just slow down, make sure you know
10:28
Speaker 2: what you're signing up for, because this is not going
10:31
Speaker 2: to be your only income source. Likely you're going to
10:33
Speaker 2: have Social Security. Likely you'll have a nest egg to
10:36
Speaker 2: draw off of as well. So we want our clients
10:40
Speaker 2: to have the most flexibility when it comes to retirement income,
10:43
Speaker 2: and of course we want them to have some type
10:46
Speaker 2: of reassurance that they will have monthly income coming in
10:49
Speaker 2: regardless of what the market may or may not do.
10:52
Speaker 1: Really big decisions being made when it comes to pensions,
10:54
Speaker 1: and of course you want to make the right ones,
10:56
Speaker 1: the best ones for you. As we talked this morning
10:58
Speaker 1: with Malia Quavis and Kyle Kai, our retirement planning professionals
11:01
Speaker 1: from Class Financial website Class financial dot Com. That's Closs
11:04
Speaker 1: k L aa S Financial dot com. So, Malia, what
11:08
Speaker 1: is mistake number five?
11:10
Speaker 2: I know Sean's writing these down, so he doesn't make
11:12
Speaker 2: any of these. So an important one here is not
11:16
Speaker 2: maxing out a company match if your company offers that
11:20
Speaker 2: in your retirement plan. So if your company offers it,
11:24
Speaker 2: we would suggest you should be signed up maximizing the
11:27
Speaker 2: amount you can contribute to take advantage of the entire
11:31
Speaker 2: employer match if available. So the match is typically a
11:34
Speaker 2: percentage of your salary. So for example, if you contribute
11:38
Speaker 2: six percent of your salary, your employer might match up
11:42
Speaker 2: to three percent. And so what we like to look
11:46
Speaker 2: at is every single year for our clients, when they
11:50
Speaker 2: can do this financially, we like them to try to
11:53
Speaker 2: max out those retirement plan contributions. So in twenty twenty four,
11:58
Speaker 2: this is the bogie. If if you're under the age
12:01
Speaker 2: of fifty, that numbers twenty three thousand that you are
12:05
Speaker 2: permitted to put a way into this tax deferred plan
12:10
Speaker 2: through your employer, whether it be a four to one
12:12
Speaker 2: K or four h three B. And if you are
12:15
Speaker 2: over fifty, there's an additional seventy five hundred dollars ketchup
12:20
Speaker 2: that you can do for a total thirty thousand, five
12:23
Speaker 2: hundred dollars per year combined. So you know, if you
12:28
Speaker 2: and your spouse spouse are both working, that's a lot
12:31
Speaker 2: of money you're able to not pay taxes on today,
12:34
Speaker 2: allowing for it to grow tax deferred. So we want
12:36
Speaker 2: to get get into that situation where you're maxing those
12:39
Speaker 2: contributions out. Now, I want to mention something, but I
12:43
Speaker 2: want to confuse people. I want to mention something exciting
12:46
Speaker 2: that in twenty twenty five. So starting in January next year,
12:51
Speaker 2: there's going to be the opportunity for what's called a
12:53
Speaker 2: super ketchup, and a super ketchup will be for employees
12:58
Speaker 2: who are age sixty to sixty three, and instead of
13:02
Speaker 2: that extra additional seventy five hundred for employees who are
13:07
Speaker 2: sixty to sixty three, they'll be a ketchup of eleven thousand,
13:11
Speaker 2: two hundred and fifty dollars, which means that you in
13:14
Speaker 2: twenty twenty five can actually store away as much as
13:16
Speaker 2: thirty four thousand, two fifty. So, as Kyle said, we
13:20
Speaker 2: don't want people to be too too risk oriented as
13:25
Speaker 2: they approach retirement. Flip side is we want you to
13:28
Speaker 2: take advantage of being able to defer as much because
13:31
Speaker 2: these are typically your higher earning years, so when the
13:35
Speaker 2: IRS permits things like this, we are all about taking
13:38
Speaker 2: advantage of. Let's get an in as much as we
13:41
Speaker 2: can to grow tech deferred for you.
13:44
Speaker 1: Great opportunity there this morning as we talk with our
13:46
Speaker 1: retirement planning professionals from Class Financial, Maleia Quavis and Kyle Kite.
13:49
Speaker 1: Learn more online the website class financial dot com. That's
13:52
Speaker 1: Coss k LaaS Financial dot com. There telephone number six
13:56
Speaker 1: so eight four four two five six three seven. Don't
13:59
Speaker 1: forget no charge for the initial gets to know you
14:01
Speaker 1: appointment ach Loss Financial. It will indeed be complementary to
14:04
Speaker 1: you again their number six oh eight four four two
14:07
Speaker 1: five six three seven. We haven't mentioned social security. We'll
14:10
Speaker 1: get the details on that from Malia and Kyle. We
14:12
Speaker 1: will do that next as Money in Motion with Coss
14:15
Speaker 1: Financial continues right here on thirteen ten, WIBA talking with
14:19
Speaker 1: our retirement planning professionals from COSS Financial, Malia Quavis and
14:23
Speaker 1: Ben Cossfinancial dot com. That's Coss k l aas Financial
14:28
Speaker 1: dot com. Great website and resource to learn more about
14:31
Speaker 1: Coss Financial. Also an opportunity there to sign up for
14:33
Speaker 1: the weekly Market Pulse newsletter that available to you at
14:36
Speaker 1: Cossfinancial dot Com. Telph number for the office right here
14:39
Speaker 1: in Madison six oh eight four four two five six
14:42
Speaker 1: three seven. No charge for that initial get to know
14:44
Speaker 1: your appointment Tech Loss Financial. It will be complementary to
14:47
Speaker 1: you again the number six oh eight four four two
14:50
Speaker 1: five six three seven. Talking this week with Malia and
14:53
Speaker 1: Kyle about mistakes to avoid when it comes to planning
14:56
Speaker 1: for retirement and Malia, we haven't touched on social secure.
15:00
Speaker 1: I've got to guess that there is a mistake involving
15:03
Speaker 1: social security, isn't there?
15:05
Speaker 2: Yeah, And you know last week we did a whole
15:07
Speaker 2: show I'm looking at social Security, but we definitely bring
15:10
Speaker 2: this up as a potential mistake that you need to
15:14
Speaker 2: make sure you are looking at your income figures properly.
15:19
Speaker 2: As far as future dates when you could start social security,
15:24
Speaker 2: there are pros and cons to taking it too early,
15:27
Speaker 2: you know. Sometimes. You know, again, we're looking at longevity.
15:31
Speaker 2: None of us quite knows where that will lie for us.
15:34
Speaker 2: But what we want you to take away today is
15:36
Speaker 2: you need to remember that the earliest you can draw
15:39
Speaker 2: us age sixty two and I'll be honest, most people
15:41
Speaker 2: know that because they're like, hey, I'm going to start.
15:44
Speaker 2: But full retirement age is probably age sixty six or
15:48
Speaker 2: sixty seven for the majority of our listeners. So the
15:51
Speaker 2: question is how soon do you take your benefit? And
15:53
Speaker 2: as I said, there's a difference between when you can
15:56
Speaker 2: first take it or when it actually will be your
15:58
Speaker 2: full retirement age. Again fro according to Social Security, if
16:03
Speaker 2: you're born between nineteen forty three and nineteen fifty four,
16:07
Speaker 2: according to them, your full retirement age is sixty six.
16:11
Speaker 2: If you're born between fifty five and fifty nine, your
16:13
Speaker 2: full retirement age is sixty six plus some months. And
16:16
Speaker 2: then born after nineteen sixty we're looking at age sixty seven.
16:20
Speaker 2: So that is the full retirement age at which you
16:23
Speaker 2: can collect one hundred percent of your benefit. Now we've
16:26
Speaker 2: talked later, we've talked before. Obviously, if you wait from
16:31
Speaker 2: full retirement age to age seventy you can accumulate an
16:34
Speaker 2: extra eight percent per year. So that's very enticing for people.
16:39
Speaker 2: But again, if we make that decision, I just want
16:41
Speaker 2: to start Social Security been paying into it for years.
16:44
Speaker 2: You know what's that going to look like? Well, you
16:47
Speaker 2: can go to SSA doc Gov and get a calculation
16:50
Speaker 2: for that. But just know that age sixty two you're
16:53
Speaker 2: only going to receive about seventy four percent seventy four
16:56
Speaker 2: point two percent of your monthly benefit, so about a
16:59
Speaker 2: thirty percent reduction, and that's a permanent reduction. And age
17:03
Speaker 2: sixty five you're going to receive about ninety two point
17:06
Speaker 2: two percent of your full benefits. So you really want
17:09
Speaker 2: to carefully look at this. When does it when? When
17:12
Speaker 2: are you maximizing this? Even though we know your benefit's
17:16
Speaker 2: going to grow the longer you wait. Though, the fact
17:18
Speaker 2: is Social Security data shows us that the average age
17:22
Speaker 2: most people begin benefits is around sixty five, and that's
17:25
Speaker 2: gradually increased from age sixty two over recent years. So
17:29
Speaker 2: what's important is that you figure out what works in
17:32
Speaker 2: your scenario, not your neighbors or your brothers or anything
17:35
Speaker 2: like that, what is going to make the best sense
17:37
Speaker 2: for your family's income as you enter retirement. So sit
17:40
Speaker 2: down with someone and map this out.
17:42
Speaker 1: Really important decisions to be made. As we talked this
17:44
Speaker 1: morning with Malia Quavis and Kyle Kite, they are our
17:47
Speaker 1: retirement planning professionals from Class Financial. Of course, we talked
17:50
Speaker 1: to as Malia mentioned we did talk so security in
17:53
Speaker 1: depth last week. If you missed any part of that program,
17:55
Speaker 1: you can always listen back online at clossfinancial dot com.
17:58
Speaker 1: That's spelled cossk l aa S Financial dot Com. The
18:02
Speaker 1: telephone number six oh eight four four two five, six
18:05
Speaker 1: three seven. No charge for that initial get to know
18:07
Speaker 1: you appoyment at COSS Financial. It is indeed complementary to
18:10
Speaker 1: you again that number six oh eight four four two
18:12
Speaker 1: five six three seven. We'll take it down the home
18:15
Speaker 1: stretch whilst our Closs Quiz question the week with you.
18:18
Speaker 1: We'll do that next as Money in Motion with COSS
18:20
Speaker 1: Financial continues right here on thirteen ten WI b A
18:25
Speaker 1: Join this week by Kyle Kite and Malia Quavis. They
18:28
Speaker 1: are our retirement planning professionals from COSS Financial. The website
18:32
Speaker 1: Class financial dot com. That's coss k l a a
18:35
Speaker 1: s Financial dot com. Great website to learn more about
18:38
Speaker 1: COSS Financial, the separate divisions at Class Financial, how they
18:41
Speaker 1: can help you or if you're an employer, and some
18:43
Speaker 1: of the other areas that they work in at Class Financial. Again,
18:46
Speaker 1: that all available at coss financial dot com. That's Coss
18:49
Speaker 1: k l a a S Financial dot Com telephone number
18:52
Speaker 1: for their office here in Madison six oh eight four
18:54
Speaker 1: four two five six three seven. That first appointment at
18:57
Speaker 1: COSS Financial. It is complementary in the telephon number is
19:00
Speaker 1: six eight four four two five six three seven. Going
19:03
Speaker 1: hold on the teleph numbers. Welcoming up a little bit
19:04
Speaker 1: later in the segment, we'll do the Class Quiz question
19:07
Speaker 1: leak your chance to win a twenty five dollars gift
19:09
Speaker 1: card from Amazon from our friends at Class Financial. And
19:12
Speaker 1: as we're talking this week about ten mistakes folks need
19:16
Speaker 1: to avoid with the retirement planning brings us to number
19:20
Speaker 1: seven and Kyle, what are some of these other mistakes
19:23
Speaker 1: folks should be avoiding?
19:25
Speaker 3: Yeah, Sean, one big one here is planning to work indefinitely. So,
19:28
Speaker 3: according to the Trans America Center for Retirement Studies, fifty
19:32
Speaker 3: three percent of workers expect to work beyond age sixty
19:35
Speaker 3: five to make ends meet. So with that being said,
19:39
Speaker 3: you can't really count on being able to bring in
19:41
Speaker 3: a paycheck if you need it, because as you get older,
19:42
Speaker 3: obviously things come up. So while more than half of
19:45
Speaker 3: today's workers plan to continue working in retirements, the reality
19:49
Speaker 3: is that just one in five aged sixty five and
19:52
Speaker 3: over are actually employed. According to the US Department of Labor.
19:56
Speaker 3: Now this number has almost doubled. It used to be
19:58
Speaker 3: eleven percent forty years ago and we're up to, like
20:00
Speaker 3: I said, almost twenty percent now. So it has gotten
20:02
Speaker 3: better obviously with you know, medicine and people taking care
20:05
Speaker 3: of themselves, longevity, that kind of stuff. This has obviously
20:08
Speaker 3: gone up. But this could be out of your control
20:11
Speaker 3: and you could be forced to stop working and retire
20:13
Speaker 3: early for a number of reasons, one of course being
20:16
Speaker 3: health related issues. So either you your own or those
20:19
Speaker 3: of a loved one are a major factor. So maybe
20:21
Speaker 3: you have to quit to take care of aging parents,
20:24
Speaker 3: or you know, you have some unforeseen circumstance that forces
20:27
Speaker 3: you to stop. And then there's also employer related issues,
20:30
Speaker 3: so downsizing, layoffs, buyout. So this has become quite common
20:34
Speaker 3: here recently. Is you know, as people are you know,
20:37
Speaker 3: aging workforce, they tend to be higher paid employees, so
20:40
Speaker 3: those are kind of the ones that they may be
20:42
Speaker 3: able to to you know, buy out and kind of
20:45
Speaker 3: force an early retirement so that they can bring some
20:47
Speaker 3: younger people, lower paid, skilled into those positions. And then
20:51
Speaker 3: also failing to keep your skills up to date is
20:53
Speaker 3: another reason older workers can struggle to get hired. So obviously,
20:56
Speaker 3: as fast as technology is moving things like that, some
20:58
Speaker 3: people kind of get come place and don't keep up
21:01
Speaker 3: with with what's changing, and then they're kind of all
21:03
Speaker 3: behind the time. So the actionable advice that we have
21:06
Speaker 3: for everyone to assume the worst and save early and
21:09
Speaker 3: often so only twenty eight percent of baby boomers survey
21:13
Speaker 3: by that Trans America study have a backup play and
21:16
Speaker 3: to replace retirement income if unable to continue working. So again,
21:20
Speaker 3: the worst you can do is just kind of not
21:21
Speaker 3: have a plan and just get to these ages and
21:24
Speaker 3: something happens, even out of your control, when you're kind
21:26
Speaker 3: of stuck. So another one mistake number eight here is
21:30
Speaker 3: putting your kids first before your retirement. So we see
21:33
Speaker 3: this one a lot, and it's obviously understandable because most
21:36
Speaker 3: people want their kids to have the best of everything, right,
21:38
Speaker 3: best education, the biggest wedding, all that kind of stuff,
21:42
Speaker 3: and if you can afford it, that's great, But footing
21:44
Speaker 3: the bill for some of these larger expenses like college
21:47
Speaker 3: or big wedding, that kind of stuff at the expense
21:50
Speaker 3: of your own retirement savings could come back to hurt you.
21:52
Speaker 3: So we see this a lot of times where parents will,
21:56
Speaker 3: you know, sign up for the parent plus loans and
21:58
Speaker 3: things like that. And unfortunately, with those student loans and
22:02
Speaker 3: parent plus loans, it's not like you have an asset
22:05
Speaker 3: that you can sell and pay that note off right.
22:07
Speaker 3: That cash has to come from somewhere. A lot of
22:09
Speaker 3: times it comes out of four to one k's or
22:11
Speaker 3: you know, the nest segg that you've been putting away,
22:13
Speaker 3: that kind of stuff, and that can really really put
22:15
Speaker 3: a damn front things. And remember that you can't borrow
22:18
Speaker 3: for your retirement living, so instead you should be exploring
22:21
Speaker 3: other avenues other than your four one K plan to
22:24
Speaker 3: help fund a child's education. So you should look at scholarships, grants,
22:29
Speaker 3: student loans of course, and even less expensive in state
22:32
Speaker 3: schools in lieu of liquidating or borrowing from that retirement account.
22:36
Speaker 3: So no one plans to run out of money in retirement,
22:39
Speaker 3: but it can certainly happen for different reasons. So this
22:42
Speaker 3: is why being prudent now may prevent you from having
22:44
Speaker 3: to move into your kid's basement later. So I do
22:48
Speaker 3: have clients tell me that that I took care of
22:49
Speaker 3: my kids long enough in the take care of me now.
22:52
Speaker 1: Yes, I have a feeling if you ask asked the kidtles,
22:55
Speaker 1: would you rather mom and dad pay for college? Your
22:58
Speaker 1: mom and dad end up living in your base and
23:00
Speaker 1: they're going to say we'll pass on, We'll figure other
23:03
Speaker 1: ways out to pay for college. That is it is
23:06
Speaker 1: for sure, not yeah, it's uh, this is all this
23:09
Speaker 1: stuff is just absolutely you know, as you guys get
23:12
Speaker 1: a chance to work with people day in and day
23:13
Speaker 1: out and see this stuff, it's absolutely amazing and I
23:16
Speaker 1: think a lot of things folks don't always think about.
23:18
Speaker 1: And it's really important. If you missed any part of
23:20
Speaker 1: today's program, I you missed any part of those mistakes,
23:22
Speaker 1: you can always listen back at Clossfinancial dot com. That's
23:25
Speaker 1: cost k l a A s Financial dot com. Artelf
23:28
Speaker 1: number six So eight four four, two, five, six three seven.
23:32
Speaker 1: I've got two left here, Kyle. What's mistake number nine?
23:36
Speaker 3: Yeah, number nine is drawn too much out every year
23:39
Speaker 3: from your portfolio. So this is that The question we
23:42
Speaker 3: get all the time is how much do I need
23:43
Speaker 3: to retire? Right? And unfortunately that number is different for everybody,
23:47
Speaker 3: and it comes down to these withdrawal rates and what
23:49
Speaker 3: you're going to live on in retirement, what kind of
23:51
Speaker 3: lifestyle you're used to, that kind of stuff. So most
23:54
Speaker 3: of the time, what you'll read out there is an
23:57
Speaker 3: appropriate withdrawal rate out of a retirement account would be
24:00
Speaker 3: four to five percent, depending on your age and circumstances,
24:04
Speaker 3: and that should replace between seventy to one hundred percent
24:07
Speaker 3: of your pre retirement income. So the reason that you'll
24:10
Speaker 3: hear that kind of replace eighty percent of your income
24:12
Speaker 3: in retirement number out there is because many people don't
24:15
Speaker 3: realize that what your salary is, you're not bringing that
24:18
Speaker 3: amount home, right, You're paying fight attack is on that,
24:21
Speaker 3: you're paying for health insurance, you're putting money into your
24:24
Speaker 3: four oh one k, all that kind of stuff. So
24:25
Speaker 3: that's always say when you're looking at what you need
24:27
Speaker 3: to retire, really focus on your net take home pay,
24:30
Speaker 3: right what hits the bank account, because that's what people
24:33
Speaker 3: are truly living on. It's not this big salary or
24:35
Speaker 3: anything like that. It's what's coming in and going out
24:37
Speaker 3: each each month. Obviously, So the five percent bogie that
24:41
Speaker 3: we talk about is a good number for most people
24:44
Speaker 3: just to get an idea, right. So if you think
24:46
Speaker 3: about everybody heard it was an old money magazine I
24:48
Speaker 3: think article back in the day that you know you
24:51
Speaker 3: need a million dollars to retire. Well, if you do
24:53
Speaker 3: the math on that, right, five percent of that's fifty
24:55
Speaker 3: thousand dollars plus in social security. You're probably in that
24:58
Speaker 3: eighty to ninety thousand and range for most people, which
25:02
Speaker 3: is obviously you're not going to be living on the
25:03
Speaker 3: street or anything like that. It is fairly comfortable. But again,
25:06
Speaker 3: depending on what your goals are and things like that.
25:09
Speaker 3: That's why we want to be very, very careful with
25:10
Speaker 3: that withdrawal rate because as you know, when you are
25:13
Speaker 3: pulling out a higher percentage and you have a bad
25:15
Speaker 3: year in the market, that just can really really damage
25:18
Speaker 3: the portfolio and it may not ever recover from that.
25:20
Speaker 3: So we got to be careful of that. And the
25:23
Speaker 3: final mistake, this is the one that Molly and I
25:25
Speaker 3: joke about all the time, is that yes we do
25:27
Speaker 3: a lot with numbers, but we're also you know, a
25:29
Speaker 3: shoulder and an advisor for people and wait outside of money,
25:33
Speaker 3: So do not wait till you're retired to develop hobbies
25:36
Speaker 3: or to get fit. So begin taking steps today. So
25:39
Speaker 3: as you're able to have a healthy transition to the
25:41
Speaker 3: next phase of your life mentally and physically. So we
25:44
Speaker 3: say we don't want people retiring from something. You know,
25:47
Speaker 3: you just want to retire just because you don't like
25:49
Speaker 3: your job and you just want to get out of it.
25:50
Speaker 3: But you really don't have any hobbies or anything like that.
25:52
Speaker 3: You can only read so many books, play so much
25:55
Speaker 3: golf that kind of stuff. You've got to find some
25:57
Speaker 3: social hobbies to get out and do and things like
25:59
Speaker 3: that as well. And we want you to retirement should
26:03
Speaker 3: be that time where you are able to you know,
26:05
Speaker 3: check that bucket list, trips off, do the stuff you've
26:07
Speaker 3: always wanted to do, pick up that new hobby, whatever.
26:09
Speaker 1: It is should be should be a fun time for you.
26:12
Speaker 1: And importance of planning and avoiding mistakes. As we talk
26:15
Speaker 1: this morning with Kyle Kite and Malia Quavis, they are
26:17
Speaker 1: our retirement planning professionals from Class Financial, the website COSS
26:20
Speaker 1: financial dot com that's coss k l aa S Financial
26:24
Speaker 1: dot com and their telephone number six oh eight four
26:26
Speaker 1: four two five six three seven. No charge for the
26:29
Speaker 1: initial gets to know you appoyment at costs Financial. It
26:31
Speaker 1: will be complementary to you again their number six oh
26:33
Speaker 1: eight four four two five six three seven. You want
26:36
Speaker 1: to hold on to that telephone number now because it's
26:38
Speaker 1: time for the Class Quiz Question the Week. It works
26:40
Speaker 1: like this. In just a moment, I'll ask you the
26:42
Speaker 1: class Quiz question the Week. You will then have thirty
26:43
Speaker 1: minutes from the interday's program to call the Class Financial
26:45
Speaker 1: office right here in Madison at six oh eight four
26:48
Speaker 1: four two five six three seven. If you are the
26:51
Speaker 1: first call correct answer, win this week's prize, which is
26:53
Speaker 1: a twenty five dollars gift card to Amazon. This week's
26:57
Speaker 1: CLSs Quiz question the week is this. If you are
27:00
Speaker 1: over fifty years old in twenty twenty four, what is
27:03
Speaker 1: the maximum you can contribute into your employer retirement plan?
27:07
Speaker 1: Is it twenty five thousand or thirty thousand, five hundred dollars?
27:12
Speaker 1: Telephone number six oh eight four four to two five
27:14
Speaker 1: six three seven. First call correct answer when that's twenty
27:16
Speaker 1: five dollars gift card to Amazon. Don't forget as well.
27:18
Speaker 1: That's COSS Financial's office right here in Madison, that number
27:22
Speaker 1: six o eight four four to two five six three seven.
27:25
Speaker 1: Malia Kyle, great talking with both of you this morning. Guys,
27:27
Speaker 1: have a fantastic.
27:28
Speaker 2: Day, Thanks Sean.
27:30
Speaker 3: Thanks Sean.
27:31
Speaker 1: Take care guys, and doctor Marty Greer is in studio
27:34
Speaker 1: next taking your calls here on thirteen ten WIBA. This
27:38
Speaker 1: is Money in Motion with Coss Financial Asset Advisors, LLC,
27:42
Speaker 1: a registered investment advisor registered with the SEC. The contents
27:46
Speaker 1: of this show are for informational purposes only and should
27:49
Speaker 1: not be considered individual investment advice. Coloss Financial does not
27:53
Speaker 1: offer tax or legal advice. Any opinion offered during the
27:56
Speaker 1: course of this show is the opinion of that particular
27:59
Speaker 1: investment an advisor representative, and not necessarily the opinion of
28:03
Speaker 1: class Financial News comes your way next right here on
28:06
Speaker 1: thirteen ten WIBA