1 00:00:00,040 --> 00:00:02,120 Hi, I'm Ed Slott and I'm Jeff Levine. 2 00:00:02,510 --> 00:00:06,119 And we're two guys who just love to talk about retirement and taxes. 3 00:00:06,160 --> 00:00:10,039 Look, our mission is simple to educate you, the saver, so that you can make 4 00:00:10,090 --> 00:00:14,170 better decisions because better decisions on the whole lead to better outcomes. 5 00:00:14,210 --> 00:00:15,830 And here's how we're going to do that. 6 00:00:15,929 --> 00:00:20,040 Each week, Jeff and I will debate the pros and the cons of a particular 7 00:00:20,040 --> 00:00:21,939 retirement strategy or topic. 8 00:00:22,300 --> 00:00:25,950 With the goal of helping you keep more of your hard earned money. 9 00:00:26,030 --> 00:00:29,270 At the end of each debate, there's going to be one clear winner. 10 00:00:29,520 --> 00:00:29,870 You. 11 00:00:30,230 --> 00:00:33,160 A more informed saver who can hopefully apply the merits of 12 00:00:33,160 --> 00:00:36,280 each side of the debate to your own personal situation to decide 13 00:00:36,290 --> 00:00:38,199 what's best for you and your family. 14 00:00:38,229 --> 00:00:39,159 So here we go. 15 00:00:39,180 --> 00:00:41,360 Welcome to the Great Retirement Debate. 16 00:00:43,894 --> 00:00:46,754 So Jeff, I'm not retiring anytime soon. 17 00:00:46,835 --> 00:00:48,475 You are never going to retire. 18 00:00:48,875 --> 00:00:49,805 Yeah, that's a given. 19 00:00:50,184 --> 00:00:53,584 I'm pretty convinced that my next job will be wheeling you on stage 20 00:00:53,585 --> 00:00:55,355 in a wheelbarrow at some point. 21 00:00:55,705 --> 00:00:56,455 Whatever it takes. 22 00:00:56,514 --> 00:00:57,195 That's it. 23 00:00:57,245 --> 00:00:58,345 Gotta get the message out. 24 00:00:58,504 --> 00:00:59,764 Get that information out there. 25 00:00:59,814 --> 00:01:05,425 Let's say You know, uh, the Met's Win the World series, uh, Right. 26 00:01:05,425 --> 00:01:07,795 This podcast grounded in reality, Ed. 27 00:01:08,245 --> 00:01:08,775 Yeah, right. 28 00:01:09,125 --> 00:01:11,125 Uh, you know, and other things like that. 29 00:01:11,135 --> 00:01:11,154 Uh huh. 30 00:01:11,155 --> 00:01:12,684 You know, man walks on the sun. 31 00:01:12,684 --> 00:01:13,024 Yes. 32 00:01:13,055 --> 00:01:13,295 Yeah. 33 00:01:14,604 --> 00:01:16,605 Uh, so let's say I retire. 34 00:01:16,974 --> 00:01:21,365 At that point, should I change financial advisors? 35 00:01:22,965 --> 00:01:23,755 Good question. 36 00:01:24,395 --> 00:01:26,315 So, is that the topic for today's discussion? 37 00:01:26,315 --> 00:01:29,014 Should I change financial advisors when I retire? 38 00:01:29,014 --> 00:01:30,045 What changes? 39 00:01:30,600 --> 00:01:31,970 Well, let's start with that. 40 00:01:31,980 --> 00:01:32,990 That's a good question. 41 00:01:33,060 --> 00:01:34,450 A lot changes, right? 42 00:01:34,610 --> 00:01:34,830 Right. 43 00:01:34,830 --> 00:01:38,500 When you retire, it is a completely different ballgame. 44 00:01:38,510 --> 00:01:43,659 The accumulation phase of financial planning versus the distribution 45 00:01:43,659 --> 00:01:46,209 phase are incredibly different. 46 00:01:46,639 --> 00:01:49,200 There's different tax planning considerations. 47 00:01:49,260 --> 00:01:52,089 There's different investment considerations. 48 00:01:52,149 --> 00:01:55,440 There's different health care considerations for most individuals. 49 00:01:55,720 --> 00:01:59,630 Um, there's different, uh, you have new income streams that you didn't 50 00:01:59,640 --> 00:02:01,279 have to be concerned with before. 51 00:02:01,550 --> 00:02:06,410 I, I, there are more differences, I think, than there are similarities 52 00:02:06,420 --> 00:02:07,559 between the two phases. 53 00:02:07,559 --> 00:02:08,359 Not to mention. 54 00:02:08,870 --> 00:02:15,810 There is a huge change in the, uh, the, the, the behavior of individuals, you 55 00:02:15,810 --> 00:02:19,379 know, while individuals are working and they know they have that paycheck 56 00:02:19,389 --> 00:02:21,140 coming in, everything stays the same. 57 00:02:21,160 --> 00:02:21,649 Yeah. 58 00:02:21,649 --> 00:02:23,690 I mean, total inertia. 59 00:02:23,859 --> 00:02:27,259 You can be a longterm investor a lot easier when that's not 60 00:02:27,259 --> 00:02:28,495 your source of income, right? 61 00:02:28,495 --> 00:02:31,769 But all of a sudden when a lot of people retire, even people who were. 62 00:02:32,429 --> 00:02:37,859 You know, the most stalwart of investors who weren't phased at all by, you know, 63 00:02:38,120 --> 00:02:43,130 2008 or nine in the crash and who, who looked at, you know, the pandemic drop 64 00:02:43,130 --> 00:02:44,899 in in value as a buying opportunity. 65 00:02:45,049 --> 00:02:47,699 All of a sudden they retire and they're frozen. 66 00:02:48,804 --> 00:02:52,445 The shortest and the littlest blip in the market creates that anxiety 67 00:02:52,445 --> 00:02:53,674 that was never there before. 68 00:02:53,674 --> 00:02:57,694 So beyond all the, the dollars and cents, the math behind this all, 69 00:02:57,905 --> 00:03:01,435 I think it is a huge change just behaviorally for people when they retire. 70 00:03:01,734 --> 00:03:04,924 Another thing that we always talk about when we talk about retirement 71 00:03:04,924 --> 00:03:09,535 accounts, we always use that analogy of climbing up to Mount Everest and, 72 00:03:09,714 --> 00:03:13,504 Everybody knows, I think everybody knows, people that get to the top, most 73 00:03:13,504 --> 00:03:17,654 of the people that, that climb Mount Everest who die, die on the way down. 74 00:03:17,664 --> 00:03:17,974 That's right. 75 00:03:18,004 --> 00:03:19,844 More people die on the way down than die on the way up. 76 00:03:19,855 --> 00:03:20,224 Right. 77 00:03:20,314 --> 00:03:23,754 So maybe they should have had a better advisor on the way down. 78 00:03:23,765 --> 00:03:24,274 Indeed. 79 00:03:24,295 --> 00:03:27,575 By the way, here's another random fact for you about Everest. 80 00:03:27,624 --> 00:03:28,075 Alright. 81 00:03:28,144 --> 00:03:32,484 Did you know that it is so, uh, commercialized today? 82 00:03:32,820 --> 00:03:36,130 That you actually, so many people walking up, you have to actually walk around 83 00:03:36,140 --> 00:03:38,030 the bags of poop that people live on. 84 00:03:38,070 --> 00:03:39,120 And the dead bodies. 85 00:03:39,150 --> 00:03:39,959 And the dead bodies. 86 00:03:40,120 --> 00:03:42,940 I did see a line, I saw that in a magazine, they were actually 87 00:03:42,940 --> 00:03:44,389 dead, mostly on the way down. 88 00:03:44,389 --> 00:03:45,250 It is, it is, it's odd. 89 00:03:45,259 --> 00:03:49,849 They don't, uh, the air or whatever, I'm no, I'm never, um, that's not for me. 90 00:03:49,849 --> 00:03:54,924 But, it's a good analogy because they get, You know, the right advice. 91 00:03:54,924 --> 00:03:56,825 You got to get up to the next level, whatever it is. 92 00:03:56,825 --> 00:03:57,464 I don't really know what it is. 93 00:03:57,504 --> 00:04:00,075 Well, you think you've reached the top, that you've reached the summit 94 00:04:00,075 --> 00:04:01,474 and that it's all over, right? 95 00:04:01,834 --> 00:04:03,104 Like, I made it to retirement. 96 00:04:03,104 --> 00:04:06,075 I hit my number, whatever that is, but you know, there were those 97 00:04:06,075 --> 00:04:07,184 commercials years ago, remember? 98 00:04:07,184 --> 00:04:08,134 Like, what's your number? 99 00:04:08,184 --> 00:04:08,834 Well, that's great. 100 00:04:08,834 --> 00:04:10,784 You hit your number, but what about the next 30 years? 101 00:04:10,804 --> 00:04:11,914 Who cares what that number was? 102 00:04:12,144 --> 00:04:15,954 So, maybe, or it's that book, I forget the title, the, the, what 103 00:04:15,954 --> 00:04:17,755 got you here won't get you there. 104 00:04:17,765 --> 00:04:18,075 That's it. 105 00:04:18,195 --> 00:04:18,435 Yeah. 106 00:04:18,544 --> 00:04:19,464 Is that the book? 107 00:04:19,505 --> 00:04:19,875 I think so. 108 00:04:19,875 --> 00:04:20,204 Yeah. 109 00:04:20,274 --> 00:04:22,704 And it's like that maybe with financial advisors. 110 00:04:22,705 --> 00:04:26,134 The person to help you make all that money to get to the top of the mountain may 111 00:04:26,134 --> 00:04:31,224 not be the, the person that will help you when you start distributing that money 112 00:04:31,224 --> 00:04:33,215 and taking the money out in retirement. 113 00:04:33,804 --> 00:04:35,085 I think you hit on a point, right? 114 00:04:35,114 --> 00:04:36,905 It may not be the person. 115 00:04:37,275 --> 00:04:38,825 Who, uh, who will help you? 116 00:04:38,825 --> 00:04:42,065 I think the answer, of course, is, is it depends, right? 117 00:04:42,085 --> 00:04:45,414 The answer is should you change advisors, uh, when you hit retirement? 118 00:04:45,424 --> 00:04:46,714 To me, the answer is it depends. 119 00:04:46,715 --> 00:04:51,854 There are certainly some advisors and some companies that focus much, you 120 00:04:51,854 --> 00:04:55,155 know, that focus much of their time and much of their effort and their 121 00:04:55,155 --> 00:04:57,245 education on the accumulation phase. 122 00:04:57,445 --> 00:04:57,828 And that's fine. 123 00:04:57,828 --> 00:04:58,755 Because that's how they would train. 124 00:04:58,755 --> 00:04:58,814 That's right. 125 00:04:58,815 --> 00:04:59,815 Make people more money. 126 00:04:59,815 --> 00:05:01,684 Everybody likes people who make them more money. 127 00:05:02,155 --> 00:05:02,955 I like more money. 128 00:05:03,085 --> 00:05:03,534 Right. 129 00:05:04,594 --> 00:05:09,125 But, where I said the person that got you here may not get you there, if you lose 130 00:05:09,125 --> 00:05:11,455 it on the way down, what have you done? 131 00:05:11,455 --> 00:05:13,354 You built a savings account for the government. 132 00:05:13,375 --> 00:05:14,214 Yeah, that's no good. 133 00:05:14,215 --> 00:05:17,074 Whether it be taxes, or poor investment decisions, etc. 134 00:05:17,075 --> 00:05:17,755 Matter of fact. 135 00:05:18,380 --> 00:05:20,380 I just happen to have, where'd that come from? 136 00:05:20,719 --> 00:05:24,469 This book of mine, I have one, it's called the Retirement Savings Time 137 00:05:24,469 --> 00:05:27,859 Bomb Ticks Louder, but there's one line that I put on the back cover. 138 00:05:27,859 --> 00:05:31,939 It says, Unlike losses in the stock market, money lost 139 00:05:31,949 --> 00:05:34,190 to taxes never recovers. 140 00:05:34,190 --> 00:05:34,789 It's true. 141 00:05:34,870 --> 00:05:38,539 And that's where you may need a different kind of advisor to help you 142 00:05:38,539 --> 00:05:41,349 get that money out and manage the taxes. 143 00:05:41,530 --> 00:05:45,739 You manage the investments generally on the way up, on the way in, and 144 00:05:45,739 --> 00:05:47,549 you manage the taxes on the way out. 145 00:05:48,175 --> 00:05:53,265 Yeah, I think, I think the key point is that it's a different phase and whether 146 00:05:53,265 --> 00:05:56,914 you change your advisor or not, you have to make sure that that advisor 147 00:05:57,275 --> 00:06:03,175 has the knowledge and or the resources to turn to, to understand the nuances 148 00:06:03,345 --> 00:06:05,205 of the decumulation phase, right? 149 00:06:05,205 --> 00:06:09,715 If you start asking questions about, uh, you know, Hey, you know, how do 150 00:06:09,715 --> 00:06:11,865 you manage taxes on the way down? 151 00:06:11,865 --> 00:06:14,185 Transcribed What do you think about social security planning? 152 00:06:14,185 --> 00:06:16,815 And your advisor looks at you with kind of like that, uh, you 153 00:06:16,815 --> 00:06:19,675 know, deer in a headlights look, it's probably time to change it. 154 00:06:19,705 --> 00:06:23,865 Or if the advisor says, whatever you said, here's the next stock to buy. 155 00:06:24,024 --> 00:06:24,274 Yes. 156 00:06:24,545 --> 00:06:24,825 Right. 157 00:06:24,835 --> 00:06:27,764 Like there's not that that's, you know, not that the investments aren't 158 00:06:27,764 --> 00:06:31,595 important, but that, you know, That's almost the table stakes, right? 159 00:06:31,595 --> 00:06:34,805 It's like you have to have a good investment portfolio, but beyond that, 160 00:06:34,805 --> 00:06:38,764 you need all the specialized knowledge of the tax planning, the, the, the 161 00:06:38,764 --> 00:06:42,915 decumulation phase of life, how to manage the portfolio so that it doesn't run 162 00:06:42,915 --> 00:06:44,725 out of money before you run out of life. 163 00:06:44,775 --> 00:06:45,125 Right. 164 00:06:45,165 --> 00:06:48,885 And I've had clients that hit, just like you said, I hit my 165 00:06:48,885 --> 00:06:51,765 number or whatever it is, got all the money I need for retirement. 166 00:06:52,015 --> 00:06:55,465 And they would tell me, they say, I'm not looking for the next hot 167 00:06:55,465 --> 00:06:57,075 stock or next hot fund anymore. 168 00:06:57,075 --> 00:06:58,715 I just don't want to lose money now. 169 00:06:59,300 --> 00:07:03,300 Alright, so let's talk about like, if we're, if someone's out there and they're 170 00:07:03,300 --> 00:07:05,450 thinking, do I need to change advisors? 171 00:07:05,470 --> 00:07:07,400 Am I okay with my same advisor? 172 00:07:07,610 --> 00:07:11,079 What should I be looking for for someone to help me in the 173 00:07:11,079 --> 00:07:12,980 decumulation phase of life? 174 00:07:13,079 --> 00:07:17,465 What are like, three, you know, two or three things that someone 175 00:07:17,475 --> 00:07:18,635 should look for in an advisor. 176 00:07:18,635 --> 00:07:20,635 Well, first, it depends where your money is. 177 00:07:20,635 --> 00:07:23,384 Now, we're assuming, since this is retirement, the money's in an 178 00:07:23,384 --> 00:07:25,585 IRA or a 401k or even a Roth IRA. 179 00:07:25,585 --> 00:07:25,890 Yeah. 180 00:07:25,890 --> 00:07:28,025 Where most retirement money is these days. 181 00:07:28,025 --> 00:07:31,684 But some people have it in regular taxable accounts, so that's different. 182 00:07:31,684 --> 00:07:37,520 If most of the money is in an IRA or 401k, 401k or even a Roth IRA, you need 183 00:07:37,520 --> 00:07:42,230 somebody that's educated on the tax rules, especially RMDs, beneficiary 184 00:07:42,230 --> 00:07:46,549 rules, tax planning, using the brackets, getting that money out, especially in a 185 00:07:46,549 --> 00:07:51,569 traditional IRA where generally all that is coming out taxable and it's forced out. 186 00:07:51,569 --> 00:07:55,970 You don't even get a choice after age 73, you're forced to take that money out. 187 00:07:56,090 --> 00:07:56,350 All right. 188 00:07:56,350 --> 00:07:59,230 So number one thing we're looking for is education. 189 00:07:59,230 --> 00:08:03,495 So a fair question to an advisor would be, How do you maintain your education? 190 00:08:03,545 --> 00:08:04,145 Yes. 191 00:08:04,185 --> 00:08:07,115 Changes going on in the, uh, you know, in the tax world. 192 00:08:07,295 --> 00:08:10,915 How do you stay on top of your game when it comes to managing the taxes 193 00:08:10,915 --> 00:08:12,375 that will apply to my account? 194 00:08:12,415 --> 00:08:15,595 Not only for me, maybe, but also for my heirs when I no longer. 195 00:08:15,654 --> 00:08:18,075 Well, it's a fair question to ask your advisor. 196 00:08:18,075 --> 00:08:22,245 And in fact, in some of my books, I have, uh, think 10 questions to 197 00:08:22,265 --> 00:08:26,605 ask your financial advisor, but they all revolve around the taxes today. 198 00:08:26,615 --> 00:08:28,815 Even the rollover rules, moving money. 199 00:08:29,045 --> 00:08:30,845 Uh, some people might just say that. 200 00:08:30,995 --> 00:08:34,424 didn't have the tax knowledge or financial, I might just say, Oh, roll 201 00:08:34,424 --> 00:08:38,674 it to an IRA and they miss a company stock tax break or something like that 202 00:08:38,674 --> 00:08:40,905 because they didn't know the nuances. 203 00:08:40,905 --> 00:08:44,894 I'm not going to get into it here of the NUA net unreal, uh, and 204 00:08:44,894 --> 00:08:46,785 net unrealized, appreciate it. 205 00:08:46,785 --> 00:08:48,844 Uh, net unrealized appreciation. 206 00:08:48,874 --> 00:08:50,975 I appreciate that you, uh, got that out. 207 00:08:52,535 --> 00:08:54,245 Uh, see, it's even hard to say. 208 00:08:54,380 --> 00:09:00,339 But you need to have an advisor that has education, and that, to me, that's 209 00:09:00,339 --> 00:09:06,189 critical because if a lot of that money is in a 401k, that may be rolled to an IRA. 210 00:09:06,194 --> 00:09:09,670 Mm-Hmm . Or you're leaving a job, you're about to retire yet, you 211 00:09:09,670 --> 00:09:11,319 now have distribution options. 212 00:09:11,319 --> 00:09:12,519 Do I leave it in the plan? 213 00:09:12,550 --> 00:09:12,729 Yep. 214 00:09:12,729 --> 00:09:14,259 Do I roll to an IRA? 215 00:09:14,259 --> 00:09:16,060 Do I take a lump sum distribution? 216 00:09:16,060 --> 00:09:18,969 Do I convert to a Roth IRA, that advisor? 217 00:09:19,110 --> 00:09:23,360 has to be educated on the pros and cons, benefits, drawbacks, whatever you want 218 00:09:23,360 --> 00:09:29,140 to call it, of each option and be able to explain it to you clearly because these 219 00:09:29,140 --> 00:09:33,650 rules are not only, and this is the tough part of all the tax rules revolving around 220 00:09:33,650 --> 00:09:39,400 IRA distributions, they're among the most complex in the tax law, but to make it 221 00:09:39,400 --> 00:09:41,209 worse, they're also the most obvious. 222 00:09:41,360 --> 00:09:43,030 Rigid and unforgiving. 223 00:09:43,030 --> 00:09:45,310 You don't get a lot of second chances. 224 00:09:45,310 --> 00:09:45,580 No. 225 00:09:45,610 --> 00:09:47,580 Very punitive Right. 226 00:09:47,880 --> 00:09:51,900 You have to have an advisor that gives you the right answer the first time. 227 00:09:51,929 --> 00:09:52,299 Alright. 228 00:09:52,480 --> 00:09:53,419 I think that's important. 229 00:09:53,440 --> 00:09:55,590 I also think no one can know everything, right? 230 00:09:55,599 --> 00:09:55,839 Right. 231 00:09:55,870 --> 00:10:01,200 So to me, another step in that is, when you don't know an answer, what do you do? 232 00:10:01,280 --> 00:10:03,400 Like, where do you turn to as an advisor? 233 00:10:03,745 --> 00:10:05,055 What are your resources? 234 00:10:05,345 --> 00:10:08,945 What are, like, what, what sort of, you know, I don't want to say back 235 00:10:08,945 --> 00:10:13,115 office, but effectively, like, what, when you don't know an answer, how do 236 00:10:13,115 --> 00:10:14,615 you go about figuring out that answer? 237 00:10:14,645 --> 00:10:15,715 Because no one knows that. 238 00:10:15,775 --> 00:10:20,384 Look, Ed, you and I spend our lives going through the tax code. 239 00:10:20,545 --> 00:10:21,534 And training advisors. 240 00:10:21,535 --> 00:10:22,354 And training advisors. 241 00:10:22,405 --> 00:10:24,655 And half the time when some, well, not half the time, but there are 242 00:10:24,685 --> 00:10:27,055 often times, it's not unusual for someone to ask a question. 243 00:10:27,055 --> 00:10:27,805 We go, you know what? 244 00:10:28,175 --> 00:10:29,515 That's a really good question. 245 00:10:29,995 --> 00:10:30,305 Right. 246 00:10:30,325 --> 00:10:31,395 Let me take a look at it. 247 00:10:31,405 --> 00:10:35,375 So, I think that's an important point too, is like, what are your resources 248 00:10:35,395 --> 00:10:36,195 when you don't know what to do? 249 00:10:36,195 --> 00:10:39,014 Well, you have to, you know, I always say you shouldn't invest with an 250 00:10:39,015 --> 00:10:43,314 advisor that doesn't invest in their education, especially in the tax area. 251 00:10:43,384 --> 00:10:46,206 You shouldn't invest with an advisor who doesn't invest in their education. 252 00:10:46,206 --> 00:10:46,674 What did I say? 253 00:10:46,965 --> 00:10:48,015 I just wanted to clarify. 254 00:10:48,015 --> 00:10:53,605 You should not invest your funds with an advisor that hasn't invested his or 255 00:10:53,995 --> 00:10:59,225 her own funds in their own education for tax planning, especially if most of your 256 00:10:59,225 --> 00:11:04,634 money is sitting in a taxable IRA tax deferred, but eventually taxable IRA. 257 00:11:05,914 --> 00:11:06,285 I agree. 258 00:11:06,325 --> 00:11:06,565 All right. 259 00:11:06,565 --> 00:11:07,095 So that's two. 260 00:11:07,105 --> 00:11:07,675 How about one more? 261 00:11:07,675 --> 00:11:12,315 What's one more thing that someone should look for in a decumulation advisor? 262 00:11:12,600 --> 00:11:16,580 Well, somebody that knows the whole picture, too, because your IRAs, 263 00:11:16,660 --> 00:11:22,009 you may not, you might not only have IRAs and Roth IRAs, and it 264 00:11:22,009 --> 00:11:24,330 may tie in other professionals. 265 00:11:24,330 --> 00:11:26,000 You may need to use more than one. 266 00:11:26,200 --> 00:11:29,500 It may, you may want to be interested now in estate planning. 267 00:11:29,500 --> 00:11:33,255 You know, as you head to retirement, you start looking beyond the horizon. 268 00:11:33,255 --> 00:11:36,605 So you might want to talk to an attorney and you may want 269 00:11:36,615 --> 00:11:38,555 people working together for you. 270 00:11:38,705 --> 00:11:43,315 So I still think the big item is going to be tax planning. 271 00:11:43,315 --> 00:11:48,315 But there's also you need somebody that understands where you're coming from. 272 00:11:48,544 --> 00:11:51,335 The relationship is important, but you still need somebody 273 00:11:51,445 --> 00:11:53,375 that's educated on the tax rules. 274 00:11:54,055 --> 00:11:56,445 I can't think of anything more important than that. 275 00:11:57,120 --> 00:11:57,240 Yeah. 276 00:11:57,439 --> 00:11:59,310 If the money is sitting in an IRA. 277 00:11:59,540 --> 00:11:59,750 Yep. 278 00:11:59,939 --> 00:12:03,290 Well, listen, even when it's not, we see lots of, you know, times where people 279 00:12:03,290 --> 00:12:07,250 will, you know, in a taxable brokerage account, they, uh, you know, will sell 280 00:12:07,250 --> 00:12:10,599 an investment at an inopportune time and either trigger more of a surtax or 281 00:12:10,600 --> 00:12:12,930 Alright, the tax planning outside the IRA. 282 00:12:12,989 --> 00:12:13,189 Sure. 283 00:12:13,389 --> 00:12:14,369 There's plenty of that to be done. 284 00:12:14,370 --> 00:12:15,100 Absolutely. 285 00:12:15,510 --> 00:12:18,619 I also think, I think there's one more that I might throw in there too, and 286 00:12:18,619 --> 00:12:21,145 that's What does continuity look like? 287 00:12:21,535 --> 00:12:21,835 You know? 288 00:12:21,835 --> 00:12:22,550 Oh, that's a good point. 289 00:12:22,550 --> 00:12:25,795 The advisor profession is enga, uh, rather, uh, aging. 290 00:12:25,795 --> 00:12:26,185 Aging. 291 00:12:26,185 --> 00:12:26,455 Thank you. 292 00:12:26,455 --> 00:12:27,470 That's the word I'm looking for. 293 00:12:27,470 --> 00:12:28,465 Yeah, that's a great point. 294 00:12:28,465 --> 00:12:29,725 That's a right. 295 00:12:29,905 --> 00:12:33,385 Uh, I know, uh, when I started out planning Mm-Hmm. 296 00:12:33,625 --> 00:12:36,115 for clients that were much older than me, I was in my thirties. 297 00:12:36,115 --> 00:12:37,315 They were in their sixties. 298 00:12:37,495 --> 00:12:37,675 Same. 299 00:12:38,095 --> 00:12:38,425 Yeah. 300 00:12:38,485 --> 00:12:41,150 They like that because I was younger and That's right. 301 00:12:41,150 --> 00:12:42,985 And they used to introduce me to their family. 302 00:12:42,985 --> 00:12:43,075 Mm-Hmm. 303 00:12:43,075 --> 00:12:46,195 Their beneficiaries and said, you'll be working with Ed and they would, 304 00:12:46,225 --> 00:12:47,756 you know, have bring in the, the. 305 00:12:47,879 --> 00:12:49,050 kids, kids are not a baby. 306 00:12:49,050 --> 00:12:52,890 I mean, they're 30, 40, 50 years old themselves, and they like that idea. 307 00:12:53,150 --> 00:12:55,930 I found most clients did not want to keep working with 308 00:12:55,930 --> 00:12:58,049 somebody the same age as them. 309 00:12:58,060 --> 00:12:58,429 That's right. 310 00:12:58,430 --> 00:13:02,759 Well, it, what's interesting is, uh, as you get older, you start to have 311 00:13:02,760 --> 00:13:05,719 that mindset of like, well, what's going to happen when I'm not here? 312 00:13:05,719 --> 00:13:06,389 I do too. 313 00:13:06,475 --> 00:13:12,144 The, uh, the, uh, most advisors, right, their, their clients are within 314 00:13:12,144 --> 00:13:13,754 about 10 years of their age, right? 315 00:13:13,755 --> 00:13:13,935 Okay. 316 00:13:13,935 --> 00:13:14,624 They're the primary. 317 00:13:14,624 --> 00:13:16,045 I don't know that for a fact, but you. 318 00:13:16,134 --> 00:13:16,444 Yes. 319 00:13:16,844 --> 00:13:17,484 Take my word for it. 320 00:13:17,524 --> 00:13:17,935 Okay. 321 00:13:17,935 --> 00:13:19,094 I'm not here to lie to you, Ed. 322 00:13:19,574 --> 00:13:22,884 So most advisors, right, they are either, they're, most of their clients are, you 323 00:13:22,884 --> 00:13:25,984 know, 10 years younger, 10 years older as you grow because it's your friends, right? 324 00:13:26,044 --> 00:13:26,644 It's your network. 325 00:13:26,644 --> 00:13:27,494 And it's people who you. 326 00:13:27,740 --> 00:13:29,050 Hang out with and so forth. 327 00:13:29,050 --> 00:13:34,910 So the, uh, that becomes effectively what your, uh, what your, your, your 328 00:13:35,050 --> 00:13:38,250 cumulative, what they call book of business, which I hate that term, but 329 00:13:38,439 --> 00:13:40,050 what your group of clients look like. 330 00:13:40,059 --> 00:13:43,209 Most of them are within about 10 years older or younger than you are. 331 00:13:43,530 --> 00:13:46,180 But if you think about that, that means when you're getting 332 00:13:46,180 --> 00:13:50,080 ready to retire, your advisor is probably not too far behind you. 333 00:13:50,080 --> 00:13:51,460 That's a, an excellent point. 334 00:13:51,470 --> 00:13:54,620 And you know, even if they live, right, they're, they may not be working. 335 00:13:54,620 --> 00:13:56,360 And what does that transition look like? 336 00:13:56,360 --> 00:13:59,269 So again, that doesn't mean that you shouldn't work with an advisor 337 00:13:59,269 --> 00:14:03,210 who's close to your age, but you need to understand what does their 338 00:14:03,210 --> 00:14:04,919 transition process look like? 339 00:14:04,919 --> 00:14:08,280 If they're not here, whether by choice or by accident, what is 340 00:14:08,280 --> 00:14:10,550 the continuity look like for you? 341 00:14:10,810 --> 00:14:12,370 Because the last thing you want is. 342 00:14:12,510 --> 00:14:16,470 To spend your life with an advisor, and then when you're 70, 75, 80, or 343 00:14:16,470 --> 00:14:20,800 even older, when you're not in the same position to go out there and vet 344 00:14:20,810 --> 00:14:25,130 new advisors, and you don't have the same mental faculties, and you don't 345 00:14:25,130 --> 00:14:28,710 want to spend all that time explaining every circumstance that you've had. 346 00:14:29,014 --> 00:14:33,295 What does the continuity look like for you as a client of that advisor? 347 00:14:33,295 --> 00:14:36,624 What is their plan when something, or if something happens to them? 348 00:14:36,624 --> 00:14:39,545 You know, I talked about the tax planning, which is key, but this may 349 00:14:39,545 --> 00:14:41,814 be even, well, on the same plane. 350 00:14:41,814 --> 00:14:46,634 I was going to say more important, because if you want that continuity, especially 351 00:14:46,634 --> 00:14:51,104 to your beneficiaries in the full estate plan, like I was talking about, Uh, your 352 00:14:51,104 --> 00:14:54,750 beneficiaries, You should have advisors. 353 00:14:54,770 --> 00:14:56,329 They still have to have the knowledge. 354 00:14:56,329 --> 00:14:57,180 That doesn't go away. 355 00:14:57,180 --> 00:14:58,900 The tax planning, the estate planning. 356 00:14:59,220 --> 00:15:05,169 But it's probably better off somebody around the same age as your, uh, children. 357 00:15:05,339 --> 00:15:08,870 And I, again, adult children, you know, 40s, 50s, 60s, 70s. 358 00:15:08,870 --> 00:15:12,380 So the 6 year old financial advisor is not going to be taking 359 00:15:12,380 --> 00:15:13,279 over the account that he takes. 360 00:15:13,939 --> 00:15:13,959 Yeah. 361 00:15:13,980 --> 00:15:14,730 Most times. 362 00:15:15,280 --> 00:15:17,819 Although, uh, some of them could be good stock pickers. 363 00:15:17,860 --> 00:15:20,569 We could have like a Doogie Howser MD, you know, we could have like 364 00:15:20,579 --> 00:15:22,319 Doogie Howser Financial Advisor. 365 00:15:22,319 --> 00:15:23,589 No, but I did the same thing. 366 00:15:23,589 --> 00:15:28,089 Over the years, I changed trustees on my trust to younger people, the, uh, the, uh, 367 00:15:28,119 --> 00:15:30,349 successor beneficiaries, things like that. 368 00:15:30,729 --> 00:15:31,839 Yeah, I think that's critical. 369 00:15:31,839 --> 00:15:34,539 And look, again, uh, It's not to be, um, ageist, right? 370 00:15:34,539 --> 00:15:37,359 You can have your 70 year old or 80 year old even financial 371 00:15:37,359 --> 00:15:38,979 advisor or CPA or attorney. 372 00:15:39,229 --> 00:15:42,779 You just need to know if something happens to them, what 373 00:15:42,779 --> 00:15:44,624 does the next thing look like? 374 00:15:44,784 --> 00:15:48,774 How well prepared are they for their eventual either forced 375 00:15:48,794 --> 00:15:49,964 or voluntary transition? 376 00:15:49,984 --> 00:15:53,304 And as they, I'm gonna follow your same lead there, not to be 377 00:15:53,344 --> 00:15:55,064 ageist or whatever the word is. 378 00:15:55,344 --> 00:15:55,924 That's the word. 379 00:15:56,584 --> 00:16:03,054 How careful are older advisors staying up to date with all the new rule changes? 380 00:16:03,054 --> 00:16:05,264 Right, it can be very easy as you get older to get complacent. 381 00:16:05,274 --> 00:16:07,374 Yeah, yeah, I say, ah, that's not that important. 382 00:16:08,034 --> 00:16:08,884 Well, it is, yeah. 383 00:16:09,829 --> 00:16:11,229 You don't want your advisor saying it. 384 00:16:11,489 --> 00:16:12,689 it's something to consider. 385 00:16:12,699 --> 00:16:13,009 It is. 386 00:16:13,009 --> 00:16:13,729 It's that important. 387 00:16:13,729 --> 00:16:18,299 Look, we have people in our advisor training programs, uh, that have been with 388 00:16:18,299 --> 00:16:22,079 us for over twenty years that are in their eighties and nineties sharp as a tack. 389 00:16:22,619 --> 00:16:24,099 It's you know some of them. 390 00:16:24,149 --> 00:16:24,659 I do. 391 00:16:24,699 --> 00:16:24,879 Yeah. 392 00:16:24,879 --> 00:16:26,129 They are, they are incredible people. 393 00:16:26,409 --> 00:16:29,549 And, and you want to make sure that you're working with an incredible advisor. 394 00:16:29,549 --> 00:16:33,169 So whatever, you know, what, however path you go down, you just want to 395 00:16:33,169 --> 00:16:36,829 make sure that when you reach that inflection point, that retirement 396 00:16:36,829 --> 00:16:40,534 point, That you're working with someone, again, I think as we've said to wrap 397 00:16:40,534 --> 00:16:42,584 it up, is someone who's knowledgeable. 398 00:16:42,984 --> 00:16:45,194 Someone who has access to the right resources. 399 00:16:45,404 --> 00:16:48,454 Someone who has the right, uh, succession plans for them. 400 00:16:48,454 --> 00:16:50,834 And someone who's going to continue to keep your best interest at 401 00:16:50,834 --> 00:16:52,504 heart, no matter what happens. 402 00:16:52,524 --> 00:16:56,694 I think I would add somebody who's, who's going to get along 403 00:16:56,704 --> 00:16:58,264 better with your beneficiaries. 404 00:16:58,284 --> 00:16:59,174 That's true too, yeah. 405 00:16:59,354 --> 00:17:01,754 Someone who not only can work well with you, but hopefully 406 00:17:01,954 --> 00:17:02,834 with your beneficiaries. 407 00:17:02,864 --> 00:17:07,484 Because as, as we know it, so many of those mistakes are made, uh, not when 408 00:17:07,484 --> 00:17:12,169 you're alive, But, in that moment after death, when that transition occurred, 409 00:17:12,259 --> 00:17:15,614 so many of those mistakes and so many of those irrevocable mistakes occurred. 410 00:17:15,614 --> 00:17:15,769 Oh, yeah. 411 00:17:15,769 --> 00:17:16,739 There's no question. 412 00:17:16,819 --> 00:17:21,279 If you remember when we were writing our training manuals, I had a section for, 413 00:17:21,549 --> 00:17:25,749 uh, what to do with, uh, the client, the people who have the IRAs, and then 414 00:17:25,749 --> 00:17:27,194 I would put another section in it. 415 00:17:27,274 --> 00:17:30,594 It's not good enough because the beneficiaries can mess it all up. 416 00:17:30,824 --> 00:17:32,864 Maybe they, they have their own advisor. 417 00:17:32,914 --> 00:17:35,864 Maybe it's one of their friends who once read a book about it or something. 418 00:17:36,174 --> 00:17:37,504 You know, that may not work. 419 00:17:37,504 --> 00:17:41,324 And these rules, we've had situations where beneficiaries, they didn't like. 420 00:17:41,324 --> 00:17:43,634 I remember one situation, we had a beneficiary. 421 00:17:43,934 --> 00:17:48,204 Uh, the guy had about a $600,000 IRA, very conservative, managed, built it 422 00:17:48,214 --> 00:17:52,924 up over many years, was not a wealthy person, but a little by little, $600,000.. 423 00:17:53,284 --> 00:17:56,654 The beneficiaries took over and said, Ah, my dad was so conservative, 424 00:17:56,824 --> 00:18:00,474 we're taking it out, we're gonna invest in, in really hot stocks. 425 00:18:00,769 --> 00:18:01,519 They took it out. 426 00:18:01,529 --> 00:18:03,669 They had a tax on six hundred thousand. 427 00:18:03,669 --> 00:18:07,239 They blew the whole thing because they didn't know one key rule. 428 00:18:07,239 --> 00:18:09,629 A non spouse beneficiary cannot do a rollover. 429 00:18:09,639 --> 00:18:10,479 They took the money. 430 00:18:10,599 --> 00:18:11,199 That's it. 431 00:18:11,209 --> 00:18:11,909 Fatal error. 432 00:18:12,109 --> 00:18:13,679 The whole thing was taxable. 433 00:18:13,969 --> 00:18:17,549 So, uh, the beneficiaries can get themselves in trouble as well. 434 00:18:18,109 --> 00:18:19,199 No question about it. 435 00:18:19,489 --> 00:18:22,439 Well, Ed, I think we've reached our time here for today. 436 00:18:22,509 --> 00:18:24,179 Good discussion as always. 437 00:18:24,219 --> 00:18:25,069 Thanks for joining us. 438 00:18:25,069 --> 00:18:26,109 Thank you for joining us. 439 00:18:26,129 --> 00:18:28,029 And hopefully you've taken away something. 440 00:18:28,364 --> 00:18:31,584 Of value so that when you reach that magic point you can make the best 441 00:18:31,584 --> 00:18:33,094 decision for you and your family. 442 00:18:33,094 --> 00:18:37,074 That's right Jeffrey Levine is chief planning officer for Buckingham 443 00:18:37,074 --> 00:18:40,494 wealth partners This podcast is for informational and educational purposes 444 00:18:40,574 --> 00:18:43,474 only and should not be construed as specific investment accounting legal 445 00:18:43,494 --> 00:18:46,779 or tax advice Certain information mentioned may be based on third party 446 00:18:46,779 --> 00:18:50,109 information which may become outdated or otherwise superseded without notice. 447 00:18:50,259 --> 00:18:53,459 Third party information is deemed to be reliable but its accuracy and 448 00:18:53,459 --> 00:18:54,699 completeness cannot be guaranteed. 449 00:18:55,049 --> 00:18:57,979 The topic discussed in corresponding arguments are those of the speakers 450 00:18:58,209 --> 00:19:00,749 and may not accurately reflect those of Buckingham Wealth Partners.