Retirement Reality Podcast

Ep 28: Understanding Roth Conversions as a Planning Strategy

With taxes at historically low levels, many people have turned to Roth conversions as a planning strategy. Is this a smart option for you? What all should you consider when it comes to conversions? Let’s breakdown the pros and cons and explain how the process would work for you.
 
Read more and get additional resources here: https://principalpreservationservices.com/ep-27-understanding-roth-conversions-as-a-planning-strategy/ 
 
Today's rundown: 
1:18 – Roth conversions are a topic we talk about a lot in the planning process.  
2:37 – What is a Roth conversion?
3:33 – Why might this be especially helpful for high-income earners?
5:04 – Mike explains tax considerations for a Roth conversion?
6:09 – What are the common mistakes people make with a Roth conversion?
7:25 – Who is someone that might benefit from this strategy?
8:48 – This is a great way for people wanting to leave money to their kids through a retirement account.
9:39 – Who else should not consider a Roth conversion?
10:49 – A common mistake we see people make relating to RMDs.                                                       
11:48 – Every situation is different and you need a personal plan.
13:16 – Mailbag question: I have several thousand in company stock that I want to cash in and put towards land to build a vacation home. Is there any reason I shouldn’t do that?

Ep 27: Coronavirus Update + Getting Lost in Retirement

With so much uncertainty in the market right now, we want to get Mike’s opinion on what we’re seeing with the coronavirus and the impact it’s having financially. We’ll then spend the rest of the show discussing ways in which you get lost in retirement. It doesn’t take much to get off track but there are always ways to regain your retirement compass.  
 
Read more and get additional resources here: https://principalpreservationservices.com/coronavirus-upda…st-in-retirement/ 
 
Today's rundown: 
2:17 – What does Mike make of the coronavirus and its impact on the market.
3:42– This is scary if you’re in retirement.
5:20 – You have to know where you are in your retirement planning process.
6:49– Long term we’re not worried.
8:07– Let’s shift to our main topic today on getting lost in retirement planning.
8:31– The first way to get lost is having bad tools.
10:13– The next way is getting poor directions from someone.
12:52– If the first two don’t get you, then you might get lost due to lack of attention.
14:36– How can we get back on track? Let’s start with determining exactly where you are.
15:51- The next thing you need to do is decide where you want to go.
17:27- Don’t be afraid to get help along the way.

Ep 26: What’s Your Level of Desire to Retire?

When you think about retirement, are you someone that pictures yourself working for as long as you can or do you want to hang it up as soon as financially possible? Everyone has a different level of desire when it comes to retiring and we’ll span the full spectrum on this episode.
 
Read more and get additional resources here:  https://principalpreservationservices.com/ep-26-whats-your-level-of-desire-to-retire/ 
 
Today's rundown: 
2:48 – Getting to Know Mike: What’s your favorite sport?
5:21 – Moving into our main topic on desire to retire.
5:41 – Level 1: ‘I don’t see myself retiring. I love what I do.’
6:49 – Level 2: ‘I guess I could retire but they pay me pretty well and I don’t hate it. So I might as well keep working.’
7:35 – Mike shares a story about a trip to California and a retirement conversation he had.
8:52 – Level 3: ‘I’d like to retire in a few years but I’m not really sure when I can.’
11:05 – Level 4: ‘I always pictured myself working for a few more years but the idea of retirement is looking better and better.’
13:28 – Level 5: ‘I want to retire tomorrow and if I don’t quit this job right now, they might have to put me in an asylum.’
16:28 – Here’s how you can start the planning process regardless of your level.                                 
17:54 – Mailbag question: It appears I’m now able to contribute more to my 401k this year than I was allowed to last year. Is it safe to assume I should put in the extra amount?

Ep 25: What Does the SECURE Act Mean For Your Retirement?

The SECURE Act took effect at the beginning of 2020 and it brought significant changes to retirement accounts. Let’s break down the new legislation and explain what it means to your plan.
 
Get the show notes and additional resources here: https://principalpreservationservices.com/ep-25-what-does-the-secure-act-mean-for-your-retirement/ 
 
Today's rundown: 
0:56 – Here’s what we plan on talking about today.  
1:34 – Most of our clients don’t know the details of the SECURE Act and we’re discussing it with them quite a bit.
2:32 – In the News: Study shows student loans have tripled since 2006 and now stands at $1.6 trillion. How serious is this problem?
6:00 – The SECURE Act got passed at the end of 2019. Here’s an overview of what it means to you.
8:26 – How does the delay in taking your RMDs impact retirees?
9:45 – Two more big changes that came with the SECURE Act involving contributions and Stretch IRAs.
12:17 – If you plan on leaving money behind to your children, what’s the best way to do it?
13:54 – A couple extra tidbits involving the SECURE Act.                                                                         
16:04 – This is significant legislation and it’s a great idea to meet with an advisor.  
16:47 – Mailbag question: I’ve worked with a couple different advisors over the years and like them both. Should I stick to just one or is okay to work with both?

Ep 24: Retirement Planning and Farming

We spend a lot of time we researching and gathering information but some of the best guidance for retirement planning can be found right in front of us. We’ll show you that’s the case by taking farming and extracting five lessons that you can apply to your planning strategy.
 
Show notes and additional resources: https://principalpreservationservices.com/ep-24-5-retirement-lessons-you-can-gather-from-farming/ 
 
Today's rundown: 
1:02 – Mike and his family own a hobby farm with multiple animals.
2:20 – Let’s take farming and relate it to retirement planning.   
2:33 – The first lesson is understanding liquid vs non-liquid assets.
5:08 – The second lesson we can find in the chicken and the egg. 
8:13 – The third lesson is protecting yourself from risk like predators on a farm.
10:34 – Long-term care is another predator people don’t always consider.
11:53 – Hidden fees is the last one that can attack your ‘chickens.’
12:30 – The fourth lesson is a diversity of crops to make sure your business isn’t too reliant on any one asset.                                                                                                                                                            
15:39 – The final lesson can be taken from the rooster.   
17:31 – Mailbag question: I’d really like to meet with a financial advisor but my husband says we’re fine handling our investments ourselves. Is that okay to do on our own?

Ep 23: Lies Learned in Broker School

A lot of financial professionals will tell you things that just aren’t true. That doesn’t mean they do it intentionally. Many times these professionals have been given talking points, which they might even feel to be true themselves. We want to talk about the statements you should be cautious of if you hear them from an advisor.
 
Show notes and additional resources: https://principalpreservationservices.com/ep-23-lies-learned-in-broker-school/ 
 
Today's rundown: 
1:28 – Minnesota winters have brought below-freezing temperatures once again.
3:55 – In the News: A recent CNBC article points out that an older retirement age is becoming the trend around the world. Is Mike seeing this in Minnesota and Wisconsin?
5:53 – Why we’re talking about broker lies today.
6:26 – Lie #1: ‘We have experts who can accurately predict market movement.’
7:42 – Here are the investments we see people come in with all the time.  
9:10 – Lie #2: ‘Just look at our past investment returns and you can see that we have a system that works in all markets.’
10:43 – Lie #3: ‘Your tax rate is going to be much lower in retirement.’
12:30 – Most people we work with have the majority of their savings in pre-tax accounts.                 
13:23 – The SECURE Act will have a big tax impact as wealth gets transferred from the Baby Boomer generation.
15:09 – Lie #4: ‘It’s just a paper loss. Hang in there and you’ll be fine.’
17:03 – The difference between working with a fiduciary versus the alternative.
19:49 – Mailbag Question: I told myself that if I ever hit $1 million in my portfolio, I’d move it a lot of it to cash. Now that I’m there, I feel like I can get to $1.2 million. What do you think?

Ep 22: Is Having ‘Cash’ Good or Bad

Of course we all want to have a healthy bank account and feel the security of knowing we have money at our disposal. Having plenty of cash on hand can help in the event of an emergency but building up your account too much can actually be a detriment to your retirement. Let’s talk about the situations where cash can be a benefit and the times when it can hurt you.
 
Show Notes and Additional Resources: https://principalpreservationservices.com/ep-22-is-having-cash-good-or-bad/ 
 
Today's Rundown: 
2:12 – In the News: IRS increased contribution limits for retirement accounts. How significant is this news?
4:14 – It’s all about the Benjamins. Let’s talk cash.
4:47 – What are some of the reasons you want to keep cash on hand?
7:20 – Then when is it counterproductive to have too much cash?
8:56 – How we work with clients on determining how much cash they need to have.
11:23 – Does fear drive a lot of those decisions to hold onto cash?
13:28 – What are some of the other investments outside of the market that people can put their cash in?
15:56 – Mailbag Question: I can sell my house right now for $500,000 and I only owe $100,000. I’m only 57 so I could sell the house and use that extra cash to retire early. Is that a good idea?

Ep 21: Be Aware of Bias in Financial Media

We live in an era where everyone has a platform and it’s more profitable to be entertaining than to be informative. That’s led to bias in media and finance is no exception. Let’s take a look at the most common places you’ll find bias and how to make sure you’re getting information that’s accurate for your retirement plan.
 
Show Notes and Additional Resources: https://principalpreservationservices.com/ep-21-be-aware-of-bias-in-financial-media/ 
 
Today's Rundown: 
2:06 – In the news: The Stretch IRA is going away as part of the SECURE Act. Here’s what you need to know.  
4:40 – Why did this change happen? Is it specifically a tax play for the government?
6:18 – Let’s talk ‘Fake News’
6:43 – First place to find bias: Sensationalism
9:17 – Second bias: Paid Placements
11:18 – Another bias: Wrong Audience
12:50 – An example of a common investment that doesn’t usually make sense for pre-retirees.
14:19 – Final bias: An Axe to Grind
17:58 – Mailbag Question: I have about $50,000 in cash value in an old life insurance policy. I don’t need it before so should I just cash it out and invest it somewhere else?
19:30 – There are a couple options for what you could do with that money.  

Ep 20: Do You Need to Be Debt Free to Retire?

Do you believe you need to be completely debt free to retire successfully? Or are you okay carrying some balances beyond your working years? There are many opinions about the best way to handle debt and retirement planning, so we’ll tackle them all on today’s show.
 
Read more here: https://principalpreservationservices.com/ep-20-do-you-need-to-be-debt-free-to-retire/ 
 
Today's rundown: 
2:12 – In the News: President Trump changed his state of residence from New York to Florida for tax purposes. How often do our clients consider moving in retirement?
5:01 – Our main topic today is debt heading into retirement.
5:22 – Clients can consistently create more wealth when they don’t have debt.  
7:30 – Do you have to be debt-free heading into retirement or is that able to be managed?
8:55 – Does Mike believe there’s such a thing as ‘good debt’?
10:40 – What are some examples of bad debt?
12:04 – Car debts aren’t the best but it could make sense in certain situations.
13:38 – How do you work with clients to develop a plan to become debt-free?
15:42 – Mike and his wife overcame a lot of debt earlier in their life.
17:09 – That client Mike helped was able to retire, which was great to see.

Ep 19: The Ins and Outs of Mutual Funds

Nearly everyone invests in mutual funds at one point or another, but is that the best strategy for your retirement plan? As the landscape continues to change, we wanted to look at the ins and outs of mutual funds to give you a better understanding of what you’re buying into. We’re joined by advisor Kasey Byrd to talk about our strategy when it comes to this investment option.
 
Read more on this topic here: https://principalpreservationservices.com/ep-19-the-ins-and-outs-of-mutual-funds/ 
 
Today's rundown: 
1:12 – Welcoming on a guest today, Kasey Byrd.
2:57 – What percentage of our clients own mutual funds when they come to see us?
5:02 – Understanding expense rations and the three classes of mutual funds.  
8:14 – Explain what the term ‘loaded’ means?
9:07 – Even though they’re actively managed, mutual funds still don’t have much flexibility when downturns occur.
10:14 – What tax considerations do we need to make with mutual funds?
12:04 – So what’s the future of mutual funds? Do they have a purpose?
15:25 – Mailbag Question: My husband’s military pension is a nice benefit but I won’t get any of it when he dies. That was a mistake in retrospect but how can we address this problem moving forward?
18:08 – Mailbag Question: Because of a mutual friend, I have the opportunity to work with an advisor who works primarily with people who have $5 million or more. Do you agree that this is a great opportunity for me?