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One’s Retired. One’s Not. How to Survive the Retirement Transition.

Rhythm plays a big part in successful marriages when both Partners work or even when one works they have lives outside of their relationship together and these Separate Lives become part of their identity even if one of the spouses is a stay-at-home partner they usually by now have had routines that work really well both in the home and outside of the home and when One retires the Rhythm is a bit disrupted to say to the least it could be a tornado the peaceful Harmony is gone and replaced by some chaos and stress you know it's funny we just started watching a new show on TV called shrinking husband and wife are in the kitchen life's been a stay-at-home she's got a routine she she does rocks what does she do polishes she's all this stuff the husbands I don't know I forget what he is a lawyer or something like that but he's just about to retire and he's in the kitchen and the wife looks at him and says hey look it or more like this hey look it Derek Derek before you retire you need to find something to keep you out of the house each day I've been running this house for 30 years and I don't want my life disrupted and it's funny because his response was no I've been out of the house for 30 years and now I think you need to find something outside the house it's my time to be home that was actually pretty fun it was pretty funny but you can see without some tools this could be a rocky start to the retirement phase right so there's a way to smooth this transition and let's get into some ways that people can do this so that you don't find yourself really in a tough spot and the first way without a doubt is like those two just did communicate expectations well I don't think they did that very well well they started a conversation they started a conversation there's got to be verbal conversation about this you can't hope things are going to work out you've got to say what your expectations are because there's going to be a lot of difference of opinion on what they want to do yeah a lot of change is coming right and you know 50 percent of couples differ on what they want to do in retirement and that can impact them in a lot of ways and even financially so way before you retire five years before you need to start talking about this as a couple right right and even even ask yourself ask your partner as ask yourself first maybe and ask your partner some questions you know what do you dream about in retirement you know where do you want to live yeah how about downsizing do we want to downsize which is a big one yep and if you have kids where do they fit in right and grandkids these are all important issues that you need to talk about as a couple really in the initial phase or pre-retirement would be a great time to talk about it right and I know during our career we had a tough time fitting in date night with the responsibility of the kids and all of that I think date night and retirement's almost just as important if not more important to have a little bit of time to check in well because a lot of people feel you're spending 24 hours a day seven days a week together now there's no real reason to create that special time to check in but we're saying there is and what's our special time we have coffee every morning markets up super early I do not I get up at six and we have about 30 or 45 minutes every morning before we start well you've already started your routine but before I really started every morning we do that and we talk about you know how are we feeling we check in with each other what are our dreams for today this week this month we plan our day it's just it really gives us a chance to always check in which is really helpful for us and maybe that's something you want to try so communicate and communicate often and stay in touch is one big piece another big piece is finances you know finances are an area of disruption in marriages and certainly an area of disruption in retirement who is going to deal with the money matters who's going to pay the bills and do you agree on Money Matters yeah well it's true there was a study we found by Fidelity Investments from 2021 that said 25 percent are couples 25 percent of couples are irritated by their spouse's pen spending habits and relationship with money and that's before retirement right so that irritation enhances even more once you retire because many of you are retiring and you've already built your nest egg and many of you are working with a financial planner which is great so you have knowledge of your finances but when you retire it takes getting used to not having that steady paycheck right and when it stops there are some areas you need to focus on and adjust yeah I mean there's things like taxes your monthly expenses you know do you still need you know all the fancy cable travel plans do we really want to do that big trip or not but you need to save for it right you know downsizing dreaming of a second home you know one of the big ones that our financial planner has really pushed on us is this idea of withdraw stress strategies right making sure that you know before you could just hit the ATM and you know you had income coming in you could withdraw whenever you wanted now it's a little different well also the 401K right Social Security optimizing that when's the right time to do that and having a rainy day fund for unexpected medical expenses right right so okay so the third broad category is establishing boundaries right so this is again this is your bread and butter no it isn't this is again under the big topic of topic of keeping Harmony As you move into retirement right you have to find a way to ex to respect each other's time especially if one's still working and the other isn't you know your space you know one house with two separate schedules potentially if you're retiring at different times you know how you're going to spend your down time you know your TV time your reading time your cooking time yeah because even your cleaning time if one of you is working and you're working from home and one of you is like bound and determined to vacuum the whole house every morning at nine it's just not gonna work you know so you have to adopt each other's schedule you know for me it's important to find a place and a time for a long time time for separate friends outside of the house and all of these need boundaries and agreement so you don't find yourself banging up against each other doing each other's activities it creates stress and you don't need that you know we have friends who are actually clients of ours and she was a teacher and he's run his business a sports marketing firm out of their home for years she was a teacher so she was gone from seven to five every day let's say and now she's home and she's doing everything she's she loves to do she's hosting Mahjong and swim parties and lunch with friends she's taken a cooking class well all of that is happening in their house which is giving her really good fulfillment because she's amazing amazing he's like what's going on but he's trying to run a business in the same space so that's an example of where boundaries and communication really needs to come in you really want to respect each other's activities and priorities and space so you don't again step on each other's toes yeah so that the fourth big category of advice that we have in this in this in this arena is what what is your division of labor now that one of you is retired how do you split the chores who's going to cook who's going to shop who's going to pay the bills this is a whole new conversation I think at this point you can't make Grand assumptions that now that you're retired you're going to do all of that yeah and that's true and the other and I think what you want to make sure you do is do what you pick the things that you're good at and you like to do I love to cook I don't really like to shop well hangout I'm good at shopping I don't love it no but but I'm good at it yeah I'm good at cooking and you love it I do love it you don't love shopping who loves grocery shopping I'll take the shopping over too oh cooking and shopping cooking and shopping wow that's a win for me today here's the other thing and I don't I don't know what it's like in your house but I'm the I'm the guy that fixes stuff yeah so what I don't want to get from Jody every morning is a list of things that have to get fixed home repairs house maintenance car repairs you know there there are things that have to get done your car needs to go in and that's my responsibility I need I need to do it but I don't want a list right to put under my nose every day but this idea of talking about who's going to do what and it's not just about chores and cooking and bills but even who's responsible for scheduling activities who's a social butterfly that's right or me right so I end up doing you know golf dates pickleball dates dinner arrangements travel arrangements and that's fine I do actually like doing those things so that helps us stay in our Rhythm you know in the beginning we talked about how couples find a natural Rhythm that will take them through many years of their marriage and maybe the one that you had worked and worked well but the newly retired person shouldn't get a free ride on being engaged in the Rhythm yeah you know we've we have clients that get in trouble with this because you've got that example on the TV show shrinking uh where you've got someone who's in charge of the house and has her routine and everything's going really well and then the retired spouse comes in and says all right so what are we going to do all day right and they're like well no you do your thing I'll do my thing I'll meet you later for dinner so you have to be really careful you do but the other big thing is this whole idea of one person retiring before the other it's going to create a lot of change in your life and you need to understand that the change is going to come it's going to create friction and stress so if that's happening the right thing is happening you just need to walk your way through it and talk about it the person who's retiring you know the person who retired earlier stayed home has interest hobbies and groups and friends the new person retiring needs to create new interests new hobbies new groups and new friends we think so right because that's the way you build community and you stay active what you want to make sure that you're doing is if one is working and one is retired and the retiring spouse is crushing it in all those areas you want to make sure you're looping in the working spouse so people you know don't feel left out you all of a sudden have new friends and new interests and new hobbies which is awesome but remember to Loop in the working spouse too and I think the other thing is you've got to keep your relationship alive and healthy it's really important when one of these changes takes place that you're dedicating enough time to each other to show you care about them you're concerned about them and you love them back to your point on date night don't I do that well you do you always feel loved I do oh good good so look retirement is something we all look forward to and we deserve to find ways to make it the best years of our life and we really want to be able to live in harmony with our partner and if you've just retired or it's coming up soon make sure to follow some of our advice here and importantly make sure you're starting to talk about this phase of life with your partner or spouse to share your dreams and aspirations now if you enjoyed this video check out this next one the truth about early retirement what they don't tell you this is a great video we talk about the endless opportunities that exist and you aren't getting any younger now might be the right time to retire so check out this video next

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Type of Friendships in Retirement and Why They’re Important

you have heard us talk about the importance of relationships in your life as you age and today we're going to specifically spend some time on friendships because the reality is as human beings we all need good healthy connections and at this phase of life in retirement it's probably even more important than ever before and really really new research is coming out showing so many benefits to healthy relationships and friendships in your life lowering your risk of depression uh feeling a little more satisfied with your life you know the other thing that good healthy relationships do is it improves your longevity it helps you with cognitive function in Elder years right I know that and it gives you me us a sense of belonging so it really is important to have good friendships you know in our your retirement game plan course we help clients differentiate the types of friendships they currently have in their life and the types that they want we have them put them into buckets you know invest and grow maintain even fade and dissolve and that's an important exercise for our clients it is and when you think about your different types of friendships in your life you can determine how much and what types of Investments you're going to make there's a great book that we both just read by Marissa Franco called platonic how the science of attachment can help you make and keep friends and she goes on to say that these mindsets and behaviors are going to help you develop new friends and keep relationships healthy and long lasting and the first mindset is what um initiative initiative right because initiative really ignites the Friendship if you think about it right and she talks a lot about taking the initiative in your friendship and once you have friends you have to be authentic you need to be vulnerable both of these are going to help you sustain Relationships by allowing us to show up as our true selves and then you know getting into generosity and affection to deepen your friendships you know verifying to your friends just how much you love them yeah sometimes you surprise people by saying you should and we should put this we will put this book in the link because it's a great read if you really and it's it's all over the internet now it's being talked about a lot so definitely put the link in there but let's talk about the eight really different types of friendships right yeah well the first type I guess who would call best friends you're my best friend right you're my best friend right we all have best friends these are the strongest most intimate probably the most important friends in your life you talk to them all the time you love spending time together and these friendships stand out in your mind and heart and these are the people you can be honest and vulnerable with right especially without any fear of being judged right these are the people that create that space for you yeah my dad always had the saying if you can count the number of best friends on one hand you've got a full life yeah that's interesting I never heard him say that not two hands one the second group of friends are your social friends right these are the people that are just fun to be around you spend a fair amount of time with them when you're in the mood to really socialize and have a good time often especially for you they pull the extrovert out in you because you're naturally an introvert I am but your social friends really pull the extrovert out in you they make you laugh you create memories you know they're couples maybe you go to dinner or play golf or pickleball with yeah you know for us being down in Florida now in the winter we really went out of our way this past winter to meet new people and we did it by meeting couples playing golf really a lot of social neighborhood uh friends we really went out of our way to meet new people and it really has helped us a lot and and finding the kind of people we want to hang out with so you have your best friends your social friends and the third one is well you came up with this low-dose friend right so people you like to take in low Doses and you know it's okay it is okay maybe you want to see them once a month they're still friends but but you know it's not always like just all fun all the time maybe they have different Lifestyles um you know you can take them and their personality in small amounts and you don't and I think that's good yeah but I think low dose I think a low-dose friend is important to have you can still get you know it's still a friend yeah a good amount of social connection there you know the fourth the fourth uh category is group friends you know people you share friends with in kind of a friend group you know maybe you don't see them often or you don't see them on a regular basis or even one-on-one and if you or they weren't in the group maybe you wouldn't even be friends you know it's more of a Social Circle so here's what I'm thinking if you got this group friends yeah within the group yeah you can have best friends good friends low dose friends and there might even be a toxic friend or two in there because the group friends friends bring their friends along so it's not it's not a group of friends oh it's not it's actually a category called group friends like we went to play Pickleball every Tuesday and Thursday right and those people that we saw there if you saw them at the grocery store or maybe at the movies you might not even recognize them you only really recognize them as part of the group why am I struggling with this I don't know but you are let's move along okay what do you think what about situational friends and you talked about this all the time because the greatest example of situational friends I think are work friends right that's another whole category but situational friends are friends that are confined to certain circumstances I mean it could be pickleball friends it could be dinner friends um it also could be relatives in-laws so so I'm thinking these are people like if you went to a Big Ten school right you went to Penn State or Ohio State or Michigan these are friends you see at that one tailgate every year okay and it's situational based on you're connected in a meaningful way around a certain situation around this cat I do and I didn't go to a Big Ten school but my kids did and I know that they have this type of friendship well I the the best example for me are work friends which is really they are situational and the thing that you and I both found and it is a whole nother category too it is because you can get best friends out of work of course but what happens is at work you're with them every single day they're your work family but when you leave your career you do leave many of these people behind and you just have to be prepared for that right we've done other videos on this and people's comments are like I never thought about this and you're right I really did leave a lot of people behind and that's hard it is hard but work friends are unique because you do spend so much time quantity of time together may not necessarily be quality but it is quantity at times all right so the seventh type of friend that we came up with is lifelong friends these are you and me nope these are childhood friends or high school friends or college friends friends that you may grow apart with but then you stay connected around holidays or there's something unique about the friendship and they've known you through many stages of your life I have nothing to add I think you covered that really well good how about this one life stage friends so growing up you have high school friends you have college friends when you first get married you meet other young couples who are married trade I should have Kit if you have kids you meet other parents of kids so these are life stage friends right and for us now in retirement we are finding and this is what we did this winter we really went out of our way to talk to other retirees who are in the same boat we're right they're all looking investing in retirement life stage friends yes they're all looking to do that right so anyway I think that was good so those are types of friends now we want to talk a little bit quickly about the types of friends to avoid yeah because the ones we just spoke about are actually types of friends that add to your connection and you want to investigate absolutely but there are groups of people that you want to just fade and dissolve and just you know call them up and say hey we're not going to be friends anymore but these are the kind of people we want you to think about in your life and does it really make sense to keep continuing a relationship because they're not always the best but one one kind of friend is a one-sided friend yeah and and you know we all know this kind of friends where you do all friend just kind of just sits back and takes and if you still have a good time it's okay but you know maybe you need to have a chat with them like hey why don't you guys plan the next time we go out to eat because I think that's that's important well at the end of the day those types of friends can ultimately deplete you they can if if there's no reciprocation right I guess another kind of friends to think about whether it makes sense to continue with are friends who you are ambivalent about you know the opposite of um uh the opposite of Love is in hey hey what is it ambivalence you're indifference indifferences typically these big words I struggle with but if you are indifferent about the people or ambivalent then maybe you shouldn't be hanging out and really you know an ambivalent Fringe you know these are people that you sometimes have a lot of fun with and other times you know they leave you feeling awful you know many people think toxic relationships are the unhealthiest but those are sometimes easiest to spot right you know really these ambivalent relationships are more draining and I think the point here is is the reason we wanted to cover this is that you want to make sure you have enough time for the friends who are important so if you have other friends in your life who are maybe dragging you down then you need to think about where to invest your time and these are just good things to keep top of mind right so there's you know um there's codependent friends um you know maybe need to put some boundaries in place there's toxic friends I mean these are the ones that really you and I you know we're doing a much better job figuring out how we're going to deal with people that when we're around they just suck the energy well you know what's hard about toxic friends at this stage of life is sometimes you have a couple right and you guys might all have couples where you know you as the wife are just really connected to the other wife and they are really a good positive healthy friendship but maybe the husband is toxic or vice versa and you know they make you feel bad about yourself and sometimes they drive wedges in between you and other people and it's just it's just really hard to be around well the last kind of friend category came up with fake friends what is a fake friend well people who call themselves friends and you know this kind of feels a little high schooly but um it happens throughout your whole life right people who call themselves your friends but they're not looking out for your well-being they're constantly putting you down okay they're talking about you when you're not there they never make you feel welcome right they kind of laugh the qualities qualities that good healthy friendships have like loyalty support and closeness yeah because we all need good healthy absolutely that's right that's the point of this video today is to talk about that and you know at this time of life with friends this really feeds your soul it is the time to feed your soul yeah for sure so we hope you guys enjoyed this and if you did enjoy this video look at this next one invest in your friends in retirement the importance of having honest and trust with your friends and we also give you tips for creating or growing your Social Circle so watch this video next

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The Truth about our Early Retirement in Bali

at one point or another we've all dreamed about 
what life could be like if we could spend our   time doing whatever we want whenever we want 
maybe it's vacationing to all sorts of exotic   places maybe it's lying around on the beach 
all day reading perhaps we'll finally pick   up that hobby we've always admired for many 
of us that sort of Freedom happens when we   Achieve Financial Independence and retire and 
that's exactly what we did I'm Jean that's my   husband Vitali we're in our late 30s and in July 
2021 we retired to Bali Indonesia we get a lot   of people questioning our early retirement with 
comments like you're too young to retire isn't   it boring but the truth of our lives in Bali 
could not be further from what people think our   retirement lives alike so today I thought I'll 
show you the raw and real deal with us here in   Bali by taking you through a typical week in 
our lives here I want to give you an honest   standing of the alternative lifestyle we've 
designed for ourselves at a relatively young   age so you can consider how you are designing 
and planning your own life your own retirement   the options you truly have at your disposal 
and what really might be the best fit for you   hello most days here in Bali starts slow and 
easy we wake up early have morning tea quiet   time maybe a little meditation or journaling and 
we check the self conditions actually to maximize   each day's potential usually the night before 
I would have already planned off the to-do list   and the structure for today's activities and now 
looking at the surf forecast now it's too high for   surfing in the morning so that I'll just have 
to wait till later today in the meantime this   is a great moment to head over to our Pasa 
to pick up some fresh supplies so let's go the meat and chicken ladies closed shop by 10 30 
am so it's best to hustle over there early [Music]   a lot of our freedom retirement life here in Bali 
is also eating well and staying healthy and after   more than a year of living here we've actually 
settled into the pattern of trying to have at   least one home-cooked meal a day we absolutely 
love eating out and eating local here in Bali   especially street food like this what did you 
buy I buy Mullen right banana so everything obviously it can also be really calorific 
and high cholesterol home cooking gives   us the freedom to go more plant-based or 
alternatively for Vitali to enjoy creating   his barbecue Delights very conflicting I know but 
really food is one of the main joys of life no so we've got fruits and vegetables and meat 
for us and bones for the doggy so now it's   time to go back off home but first we make 
another stop [Music] yeah so the pastries   here are really really good so we come here quite 
often to pick up something quick for breakfast so we don't actually work any kind of salary 
employment or do any business here in Bali   instead our living costs here are covered by a 
modest amount of monthly passive income hence   our categorization as technically retired 
if you're interested in the financial side   of things to our life here we actually made 
two videos about it so once about our monthly   living costs here and the other one is about 
how we actually reached retirement I'll link   them down in the description below if you want to 
check them out anyway so the beauty of our setup   here is that our time is actually free from the 
constraints of having to make money for survival   and we get to choose what to keep busy with and 
it's completely not about lazing around every   day doing nothing that gets old really fast it's 
an amazing feeling to you know keep busy and be   productive every day with stuff that you actually 
truly believe in and one of these things for us is   the weekly Youtube upload commitment so Vitaly 
and I started this channel like over two years ago   and for the longest time now it's been 
one video every week every Saturday and   sometimes it's about what we do here 
in Bali like a little live update and   sometimes it's about some thoughts 
that I'd like to share with you guys   we are starting work on a brand new video this 
week so right now it's going to be script writing   for me for the next two to three hours I usually 
work way in advance so I already have my idea   all set up I just have to articulate my thoughts 
around it and think about how to execute the shoot   whilst I'm doing this Vitali is often on his 
guitar or busy with his other responsibilities   he's often managing our rental properties 
and solving small issues that crop out with   the tenants here and there remotely from Bali he 
also spends a lot of time learning new technical   stuff on YouTube and skillshare because that's 
his areas of Interest photography videography   Etc right now with the tide dropping it's just 
about the right time for us to start heading   over to the surf so it's time to pick up Bali 
is our Dream Paradise particularly post Italy   and I both love surfing and it's a luxury to 
live in a place with quality ways like Bali   has and we try to get as much of it as possible 
if not every day then every other day at least okay super nice there are some ways available 
we're gonna suit up and head in the thing is   kind of our daily sport but it's also 
actually something we really love so   to us surfing is not just about exercise 
it's kind of like an art and both Vitaly   and I want to progress in it it does take 
up a considerable amount of time though   between traveling to the spot checking 
for good conditions surfing getting a   coconut to rehydrate driving back showering off 
that's at least three plus hours of each day foreign [Music] all right now so it's a couple of days later 
I've returned a halfway decent script after a   few rewrites that I'm actually happy to 
go shoot with so today is lights camera   and action this usually takes a couple 
of hours or so depending on the type of   video and I need to look tidy so usually 
shoot days are never surf days instead we   usually couple it with errands that we have 
to run there's always stuff each week that   requires us to venture a bit further out of 
our quiet Village Life into more civilization right so now we are at the Bali art supply 
store it's actually a great little place   for arts and crafts Hobbies you know if 
you need supplies they have got a lot   of things especially for watercolors 
acrylics all sorts of painting really   we've got a lot of really great stuff here but 
they actually also sell this stuff off tokopedia   right okay so now we're done here and it's off 
to the next stop this is one of bali's home   renovation Mega stores our bathroom tiles need 
replacing so we checked out some options [Music]   on the way home this is one of 
our favorite stops for lunch so I'm not having rice today but 
this is what I've got another nicely Nasi champor is like the best deal here ever of 
living here in Bali or in Indonesia in general I   mean it's cheap it's always tasty and you know 
you get to choose what you want to have it's   like really easy to go vegetarian or like just cut 
out the meat and yeah super awesome after if I'm   feeling energetic and in the flow I'll set up the 
easel and go outing for a little bit good morning   so now the shoot's all done and for this next 
few days it's just going to be production time editing color grading adding music usually   takes about three to four hours 
each day until the video is done so we love living close to bali's Nature 
it's one of the biggest privileges of being   here in Bali so we keep the house as open 
as we can most of the time but that also   means it gets really really dusty plus 
doggy runs in and out as she pleases so   we do have to clean every day there's a lot of 
upkeep required for the house and the garden so living like this also means we can take 
rest whenever we need and usually this is   just taking a day out of our normal swing of 
things where we can just unplug and stop going Sam Dogan also known as the financial Samurai 
turned living like this fake retirement he himself   stopped working full time since 2012 but after a 
year of the traditional doing nothing retirement   he got bored and he went back to keeping busy with 
his family his Finance website writing books and   managing his Investments including investments 
into art through platforms like today's video   sponsor Masterworks if you two are retired or 
planning for that Investments invariably form   part of the picture in the U.S most Americans 
now believe they need 1.25 million US dollars to   retire comfortably a good 20 up from last year 
traditional investing has been far from enough   with the stock Bond portfolio that Millions rely 
on down 34 this year if you're worried know that   historically in times like these professional 
investors seek out real assets because they can   still deliver gains and help fight inflation not 
just oil gold or real estate but also Fine Art   while stocks and bonds are going down the average 
artwork is selling at auction for 26 more than   this time last year outside of 2022 investing 
in art has outpaced the S P 500 over the last 26   years by 131 obviously for most of us investing in 
art has always been a tad Out Of Reach I certainly   can't spend three million dollars on a painting 
but luckily there's Masterworks Masterworks   allows us to invest in multi-million dollar 
artwork high-class paintings from legendary   artists like Picasso and Banksy for a fraction of 
the cost in 7 out of eight sales Masterworks has   delivered over 17 net returns to their investors 
over 550 000 people have signed for Masterworks   and as the economy tumbles there's a growing 
wait list but my subscribers can get Priority   Access using the link in the description people 
have pushed back saying that living like this   isn't truly retired since we're still doing 
some sort of work and getting money in return   I disagree I think the point of our retirement is 
not that we can sit around and do nothing all day   long but that we have the freedom to choose 
what to visit ourselves with and if some of   those Pursuits happen to bring in extra money 
it's not a necessity but it is a nice bonus   the point of our little body life is we chose an 
alternative lifestyle design we chose to content   ourselves with a simpler more economical life 
here one that may even seem perhaps a little   poor or name to some people but it allows us the 
freedom to pursue what we believe in to learn new   things and to live each day slowly with gratitude 
and spend time with the people we love every day   because these are the things I won't want 
to miss out on or defer to much later in   life because having all the free time in the 
world will be pointless without all these   I've always wondered if the traditional retirement 
that Society paddles to us is a bit of a mirage an   endless and aimless vacay gets old pretty quickly 
for many people and Truth yet that is the very   same picture of traditional retirement that's 
painted for most of us to hold in our Mind's   Eye whilst We Trust through layers of toil and 
endure unfulfilling work to reach that Promised   Land then sadly the reality of traditional 
retirement pans out differently for many   people these same people who spend most of their 
lives working so beautifully and will have been   conditioned to live their life around work as 
their dominant priority they never took time off   to develop themselves or develop other interests 
outside of work work was all they need work had   become their identity their purpose in life and 
their social network and in retirement these very   same people often seem to become lost lonely blue 
some even find a way back into a retirement job   personally I thought the whole thing looked a 
little bit like a sub-optimal trade-off and a   lousy lifestyle design after all you can never 
get that lost time in your life back can you   I'm just so grateful that Italia and I achieved 
this together earlier rather than later in our   lives and there are fake retirement in Bali 
is as productive and meaningful as it is to us   I will forever want to be spending our lives 
this way this is a life I will never want to   retire from in the traditional center of the 
world I've learned that it is a misconception to   drive towards unlimited Freedom with our time it's 
really what we do with our free time that counts   if you're still striving out there you may wish 
to consider redesigning your own life to optimize   it to serve you better in the long run I believe 
that by making more conscious choices about how   we want to use the time in our life and how we 
truly want to live we don't need to wait until   retirement to live closer to our true selves 
we are all definitely different people with   different perspectives and priorities so so I know 
my choice may not always be the same as what you   will achieve but I'll be very interested to know 
what you think of our design for life and your   ideal plans for your retirement so let me know 
in the comments below I would love to hear it   thank you so much for watching today's video 
and I guess I will see you next Saturday bye [Music]

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What Do You Do With Yourself After Retirement? – Dr. Devi Shetty with Sadhguru

Devi Shetty: Sadhguru, I am constantly torn between my senior colleagues, who are extremely skilled surgeons. Sadhguru, the… on the heart there are some procedures, which are done by very few people on this planet. I’ll give an example – I do an operation called pulmonary endarterectomy that’s the blood clots from the leg goes to the lung arteries and it clogs up all the arteries. So twenty… twenty-five years ago there was no cure for this. And once you are diagnosed, you are destined to die within a year. Today people who are on home oxygen for two years, three years you do the operation they can go back to skydiving or they can go to scuba diving. That’s the transformative effect but there are only fifty surgeons less than fifty surgeons in this world who can operate. And like this we have some of my colleagues who are extremely gifted surgeons. They are in their fifties now.

And some of them are constantly talking about retirement. Especially one surgeon he is a extremely gifted surgeon who can fix any damaged valve. He is single, he has no other commitments every other day he talks about going to Banaras or somewhere and retire and I keep telling him that God didn’t create him to retire and meditate. He has to be fixing all these problems So he gives me extension every six months Guruji. So at the end of six months the usual rigmarole starts, he talks about retirement and everybody is depressed in the hospital. So how do you deal with this kind of people? Sadhguru: You must you must give him a one year sabbatical with me Yes, because the need or the idea of retirement enters anybody’s mind because of the monotony of what they’re doing, whatever it may be. Somebody else may think it's a great thing but in your experience somewhere it's becoming monotonous or stagnant. Stagnation is one thing that human intelligence and human system cannot take. And most of the ailments are because of stagnation stagnation of life.

They may be… they may be getting their you know once in three years promotion. They may be making little more money. All these things may be happening but somewhere experientially there’s a stagnation, which could be a major cause for many of the complex ailments that people manufacture within their systems. The more complex they get you try to create more talented surgeons. I am saying we are manufacturing the problems, we are trying to manufacture a solution. I think as we offer solutions people who have adl… already gotten into problems, they need solutions. But it's very important that we teach people how not to create these problems, so that instead of fifty, you have to produce five thousand expert surgeons to attend to all these people who are on self-help to illness. So I would say a surgeon who is who has a certain competence and who has worked through his life, if he wants to explore something of his own nature, that will be the greatest thing to do because he is not a man without commitment nor competence.

When competence and commitment is there, you should not run him through the rig ram role (rigmarole?) and destroy that possibility. It’s important that he explores something of his own nature, which will make him We don't know what he’ll come up with. You cannot even estimate what he may come up with. I think a sabbatical is good. He may come up with something that you have not thought possible. Devi Shetty: I will… I will convey your message Sadhguru. I am sure he is watching this program.

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How I retired at 38 to live in Bali – 5 Money Concepts that helped me get there faster

Hi, I’m Jean. At the age of 38 years old, 
I retired and moved with my husband to the   island of our dreams, Bali. Our passive income 
covers the relatively modest living costs here,   so we don’t need to work a 9-5 or any kind 
of salaried employment, but we keep busy   with stuff that’s meaningful to us. Surf, 
painting, music, Bali dogs, making videos … For the friends who have been 
with us from some time back,   you’ll know my back story but for those who don’t… once upon a time I was an unhappy Big Law 
corporate lawyer and after almost 7 years I   quit and got off that hamster wheel.

If you wanna 
check out the details behind that here it is. So many of you have been curious about how did 
I go from then to our present life in Bali.   There are so many misconceptions, like people 
thinking I quit law and to replace my lawyer’s   income I did YouTube – that’s absolutely not 
the case – and people thinking that between me   quitting and us ending up here in Bali, being able 
to live simply but comfortably without working,   was a quick and easy transition – 
again, no it took us years to get here. The early retirement formula is generic, 
isn’t it? Make more money than you spend,   then grow your wealth to hit the 
target retirement income you need. In my case, we didn’t actually make big money,   but because our target retirement 
income goal is so modest,   with planning and discipline, we still managed to 
make it happen within a matter of about 4 years. So how did I make money? Well, after I quit, I 
didn’t have significant savings and I needed to   replace my lost income.

My dream was to live on 
a beach somewhere, surfing, so I quit my big law   job. But all my official livelihood skills, law, 
compliance, blah blah has zero relevance to my new   direction. So, to get to my dream life, I moved 
somewhere cheap to live – Vietnam, and I started   re-skilling myself. I spent a couple of months 
training, took exams and got certified as a surf   instructor. The day after I got my cert, I walked 
down the beach where all the surf schools were,   and – I remember this so clearly – 26 rejections 
later, I got my first job as an in house surf   instructor at a nice resort. Yay – my first 
new alternative income stream in my new life! So of course, the pay is peanuts compared to 
my lawyer’s salary, but fortunately the living   costs in Vietnam was so affordable that it was 
still easy to live comfortably.

I spent the next   5 years traveling Asia, surfing, teaching, and 
picking up more skills and certifications. Yoga,   zumba, personal training… I taught language 
classes. I did freelance remote legal and   compliance work assignments. I worked part time 
as a guest relations manager at a high end resort.   Along the way, I started 4 businesses. I sold bean 
bags, I sold luxury Brazilian swimwear, I started   a yoga studio…. Heck, in between when I had to 
return to Singapore for some time for personal   reasons I even went back to a corporate stint for 
a while. Finally, after I met and married Vitaly,   we started the 4th business together, a 
boutique surf school in Vietnam that did   quite well. The starting years were slow going 
but with time, momentum really picked up. What about spending and expenditure? From the moment I quit the law, I knew I had a 
long road ahead, so I reduced my expenditure to   only basics and essentials & switched into 
full on savings mode.

If you’ve tried it,   it’s just so immediately clear that society’s 
just been peddling us the wrong message all our   lives – things clearly don’t bring happiness, it 
is great experiences that make for a good life.   Ain’t nobody got time for fancy clothes and 
branded things when there was good surf and   adventures to be had. And living light 
and minimally means spending very little,   which means any extra money can 
be saved, and put to investment. Vitaly’s and my happiest times was always 
when we spent summers in Bali surfing,   so then it became our dream to live in Bali 
permanently.

But it was hard to abandon an already   profitable business in Vietnam and we didn’t 
want to have to take up 9-5 jobs to be in Bali.   We aren’t ready now as rookies to start new 
businesses in Bali that would require deeper   capital injections with the uncertainty of 
return as well. So then it seemed the answer   is to try to get enough passive income so 
we can start life here without much risk. We knew from experience that our 
monthly living costs in Bali would be   about 1,500 to 2000 dollars – if you wanna 
check that out in more detail go here.

So $2000 became the target to hit. With that 
in mind, we committed to saving and building   wealth in a variety of ways. We’re no financial 
wizards, but we both have a conservative stocks   portfolio – mine is mostly US growth stocks, 
some cryptocurrency – I personally find that   very volatile so its only a very small fraction 
of my holdings, and finally, rental property. It came as a surprise to us 
ourselves, but within about 4 years we   actually reached our goal for passive 
income. Maybe that’s not surprising to you,   given how modest our goal was, but for me 
it was a total surprise! At the same time,   the pandemic meant that our business in Vietnam 
had came to a halt, so there wasn’t anything   holding us back anymore from acting on our 
dream and moving to Bali so… here we are! With all that said, if you were to 
take something away from our story,   I hope it would be the following 
realizations about money and retirement.

First, if you want to do something similar, 
I think the most important thing is to   first have a specific and realistic plan and 
understand the money you need to achieve that. Having a specific target gives you 
a number to work backwards from   and this was absolutely crucial in us reaching 
this target within only a matter of years,   as opposed to grinding away indefinitely, 
chasing an undefined point in the future.   We’ve all have been so groomed by society to 
have this guilt complex about not working,   we feel bad if we’re not constantly striving, 
but if you don’t set an actual reachable point,   you might never move from the striving part to 
the part where you actually retire and enjoy life.

Second is to understand that the power of each of 
your daily little actions and choices compounds   to something amazing over time, and to use that 
in building your wealth to achieve your dreams. So living a minimalist lifestyle comes pretty 
easily to me and Vitaly – we’ve built our lives   around activities we love as opposed to 
accumulating things which we can’t carry   around with us anyway whenever we travel. 
We’re easily contented with great food and   comfortable lodgings, even if it isn’t posh or 
luxurious. And we’re quiet introverted people,   so we usually live away from cities, which also 
means we’re not constantly being bombarded with   advertisements and temptations of “You only live 
once!” and “buy that so you can be happier”. I know it can be challenging, especially if 
you live in fast paced urban settings and   you’re a big fan of social media. 
There’s always pressure to spend.   Temptation is always there to impress others 
with your success or …. keep up with the Joneses,   or grab that takeout because you don’t 
have the time to cook your own meals. But the next time you’re reaching 
for an overpriced Starbucks latte, or   more clothes you don’t need, or that 
branded watch to add to your collection,   you might wanna pause to consider whether the 
instant gratification of those purchases is worth   you delaying reaching your dream life by another 
couple of hours, or days, perhaps even years?   This is the eternal struggle right? 
Constantly having to choose between   instant gratification vs attaining FIRE – 
financial independence early retirement.

Third is to make good money by 
working smart for sufficient value.   This whole model only really works if you are 
able to generate income sufficiently in excess   of your expenditure so you can save and invest 
and accumulate and compound quickly enough. If your sole income stream is working a low 
hourly wage job its going to take a long time   before you get anywhere. I personally believe that 
we all need to create multiple income streams in   today’s world, if only to hedge against job loss. 
And whatever you choose to do, work hard but work   smart too. Make sure its something in demand by 
others, do it well, and get paid well for it.   When we ran our business, we actually 
charged more money than our competitors,   but we provided far better quality, and 
people were always happy to come to us.   Instead of just being a yoga instructor 
teaching classes, I created a brand and   registered a yoga business myself, which meant 
I could harness other instructors and canvass   for big events and projects etc. and bring in 
revenue on a bigger scale. You get the idea.

Fourth is to educate yourself 
on financial management. I never learnt about managing money and 
growing wealth whilst I was lawyering away, cos   I was too busy and my fat paycheck every 
month made me think I don’t need to grow   my wealth in other ways, cos heck, I make good 
money! But then that means once I quit my job,   my only income stream, my salary, was lost and 
there was nothing else other than that. Not great. We all need to know about money. How to make it, 
how to manage it advantageously, how to grow it.   Even if you love your job and want to 
work at it forever, there’s no telling   one day you may lose it. So we all need 
to know this, and its shocking that they   don’t teach this at school and you have to 
learn it yourself on your own initiative. Books are great as a starting point to learn about 
managing money and growing wealth.

Financial news,   world current affairs and stock market 
developments affect your investment portfolio so   you must react accordingly, or at least it’ll 
just help you avoid scams out there. There’s   many amazing Youtube channels out there that 
discuss personal finances and investments which   I myself keep up with and find really useful…. 
I’ll leave some of the books and Youtube channels   on finance which I like down in the description 
below, if you’re interested to check them   out. Knowledge is power, in this case, the power 
to help you reach your dream of retirement faster. Five is that our story in particular couldn’t 
have been possible without the advantages of   what they call geoarbitrage, 
or international arbitrage,   the concept very clearly summarized in the 
following quote by Tim Ferriss’ – Fun things   happen when you earn dollars, live 
on pesos, and compensate in rupees.” This wasn’t an intentional part of our 
retirement plan but it certainly was   a huge advantage in speeding up our 
journey to reach financial freedom.   But arbitrage is simply the concept of taking 
advantage of different prices in different   markets – it doesn’t necessarily mean you must 
uproot your entire life to live overseas if you   don’t want to.

It could be as simple as simply 
changing neighborhood in the same city or moving   from city to suburbs to lower rent & 
grocery costs, sometimes even local taxes. I hope my story has given you some food for 
thought and hopefully some inspiration regarding   your own personal hopes and dreams. All of us are 
so different, and we all have our own dreams and   amazing life visions to pursue. I hope what 
I shared today can help you a little more   in getting there. And remember that, whichever 
chapter of your life story you’re in currently,   don’t forget to enjoy the journey whilst 
you’re working your way towards your goals. Thank you so much for watching and for all your   support. If you liked this video 
do subscribe to join our community   and stay tuned for more of my thoughts on 
life in bali, early retirement and more. Speak to you next Saturday, bye!

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6 Retirement Essentials (Most people only prepared 2 or 3)

I'm planning for retirement most people focus 
mostly on marshaling together enough money you   know Financial Resources so that they can last 
the distance and then maybe at the back of their   heads they have some vague plan right perhaps 
two or three things to fill the time with a lot   of the times this is stuff like travel family 
well unfortunately I'm gonna say that's not   quite nearly enough for Preparation we ourselves 
have been retired for two years and going looking   back on the past two years I kind of see like 
six essential things that if you prep for it   beforehand before your retirement starts I think 
this can really make such a positive difference   to your retirement so that's what I wanted 
to bring up and discuss with you guys today   number one first and foremost of course we have 
to talk about money most people's concern is the   amount of money that they have in retirement 
whether it will last them till the end come   comfortably and allow them to afford the Hobbies 
like travel good food Etc but I actually think   after going through the last two years building up 
our financial Acumen is just as important if not   more so what do I mean by Financial Acumen I mean 
stuff like budgeting tracking projecting investing   I mean if you think about it the money in your 
bank account can always be squandered we all   know that story I think more importantly what's 
going to make your retirement more fireproof is   having an ability to generate more money where 
it came from in the first place so the second   essential thing that you can prepare for so that 
you have a wonderful retirement it's definitely   the ability to be self-directing and disciplined 
self-direction definitely helps so much with   spending your retirement days meaningfully right 
after all there are no more like work schedules   or like demands from colleagues or bosses to help 
shape your days anymore you have to be the person   to take charge in retirement there's a study out 
there actually that shows that for happily retired   folks most of them actually have about 3.6 core 
Pursuits that's what they say and the unheably   retired folks tend to have less than 3.6 corporate 
suits coming in at about 1.9 call Pursuits that's   what the study reflected I guess it kind of just 
shows in retirement you really need to fill your   life to the brim and keep busy with activities 
you love and that is a really great formula for   happiness and self-direction will help you 
to achieve that state as well as discipline   because if you think about it like discipline 
directly affects the state of your finances right   it affects whether you stick with your retirement 
planning whether you keep fit and active and you   get to maintain your health in retirement even 
whilst you're left up to your own devices even   to find your cover suits if you don't have any 
when you're starting or in your retirement so   discipline and self-direction will be like 
the building blocks for enjoying your life   in retirement the third essential thing you might 
want to work on and cultivate or happy retirement   is people skills right so studies and research 
have reflected very consistently that the main   determining factor for happiness and Longevity 
for most of us is actually relationships Human   Relationships friendships relationship with 
your spouse and with your family I guess if   you look at most of us you know we all have 
a little need of work on some social skills   in some aspect I mean some of us are a bit shy 
paper hats or graph or maybe socially anxious   working on our people skills really will help us 
to get along and live happily with our spouse and   family members and also importantly to make 
new friendships at whatever age we all know   that making new friends gets a lot more difficult 
as we get older I mean I haven't heard anyone say   otherwise for me personally making new friends 
as I get older is the biggest challenge there's   this huge feeling that nothing can replace 
friendships with people who have known you   all your life but it is also a challenge as I 
have chosen to exercise through Arbitrage in   our retirement and we've moved away from home 
so those friends aren't with us in our present   I find that it takes a lot of intention I have 
to consciously push myself to broaden my Social   Circles and make the effort to get to know people 
on a more intimate basis I am also very happy   to be able to say that it has paid off in that for 
the last two years in Bali I have actually made   two or three new friends that I'm happy to say are 
kindred spirits and not just social acquaintances   so that's very nice and it's a huge Comfort to our 
daily life here in a foreign land away from home   now before we move on a big thank you to 
Mumu Singapore for sponsoring this video   Singapore is an online trading platform for 
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just for using the Momo app so if you're actively   investing anyhow I recommend checking out the 
MooMoo ad using my link in the description below   now back to the video the fourth essential 
thing that you can definitely work on and that   will benefit your retirement tremendously it's 
actually courage you're definitely gonna need lots   of courage in retirement and I guess this isn't 
a skill exactly it's kind of more of a quality   but in retirement you need a lot of courage 
to even plunge into retirement you need the   courage to you know take that leap of faith to 
stop putting it off due to fear of the unknown   feel or financial insecurities so then it's all 
about courage at that stage not let fear and   insecurity rule your life and your decisions it 
is also the courage to recognize that in life at   the start at the end in the middle the Domino's 
you need are never all nicely lined up you know   at some point you just got to jump into it and 
then learn to cross the obstacles as they come   so for retirement long term I guess the 
biggest issue most commonly is always money   but my perspective on this is that hey budgets 
can always be reduced money can always be earned   or recouped or whatever happens so I still 
think that you know it is actually beneficial   to Advocate an approach whereby you get to 
a point where you feel that you have most of   your Ducks lined up you've planned well you've 
prepped for it grab hold of your courage with   both hands and then take the plunge people tend 
to think of retirement as the end but it's not   it's the start of a new phase where you should be 
trying so many new things new Pursuits new ways   to live and for each of these new adventures 
you're gonna need courage to take action and   once you have taken the plunge you'll find the 
next fifth thing very very useful and that would   be a mentality of resilience especially in early 
retirement there are a lot more decades ahead of   you you know and therefore a lot more chances that 
they things can go wrong whether it be down to bad   financial planning or perhaps an unexpected Health 
catastrophe or even sometimes natural disasters   whatever comes I guess you will always need that 
strength of Will and the resilience so that you   can roll with the punches and then get back up 
you want to know that you have the mental strength   that even if things go pear-shaped you won't just 
give up and lose hope and certain Corner you've   got to Marshall what you've got inside you go out 
there find Solutions perhaps if necessary you've   got to go back to work but know that later on 
you can return to retirement and try again so the   sex essential thing that I believe will benefit 
everyone in retirement is to cultivate an attitude   of gratitude we all know life is a very long 
journey hopefully at least and so much of what   we Chase using most of our years actually doesn't 
really matter in the big picture once you have   taken a step back and then at that point is when 
you start realizing the earlier you cultivate and   attitude of gratitude and that appreciation for 
the simple little things that are probably around   you everywhere every day the happier you probably 
will be and it sounds silly but it's not really   automatic I mean we all live and grow up and 
work and go to school in a society that kind of   innovates us with messages that we need to reach 
for more have more ambition gives us you know that   High definitions of success in life that we 
have to try to jump to reach and nobody sings   the Praises of the pleasures of a simple cup of 
tea you know the importance of family time with   your loved ones or or just the pleasure of being 
able to take an evening walk on the beach with   your dog so I think that it's very important that 
somebody reminds you that you know you can not   overload what you already have what you're already 
surrounded by growing that muscle of appreciation   so that in each and every moment you are present 
in your own life you see all the little Joys that   you're surrounded with every day and if you 
live life like that I think that will help   you achieve contentment with just the small stuff 
around you and that's what majority of your life   in retirement may be about is just a small stuff 
every day but in my own retirement here in Bali it   is what makes me so grateful and so happy every 
day that I am surrounded by my loving husband   and very interesting and independent little dog 
that's very very cute you know that we have very   comfortable a bit simple house we have the ability 
to enjoy good food even if it's simple stuff   from the war rooms locally we have a garden and 
beautiful things are growing around us every day   the weather is great you know stuff is good yeah 
I think this is one of the most essential simple   things that's often overlooked simply because it's 
a matter of mentality but I believe this essential   quality or characteristic could make all the 
difference for you so these are the six essential   things that I believe are very very important for 
you to cultivate and prepare for in the leader to   actually taking the plunge into a return then I 
think that if you have these six strong skills and   qualities going for you you will be in a position 
much more well placed to make the best out of your   retirement however long that period may be let me 
know what you think of my suggestions whether you   agree or if you think they suck let me know why 
but in any event I really appreciate you tuning   in and sharing my thoughts for this week and 
wherever you are in the world I'm wishing you   a happy Saturday evening and let's speak again 
next week till then you take care and bye for now

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Single Retirement (7 Tips to Ward off Loneliness)

there's 10 000 people turn in 65 every day and one half of this population is reaching this age on their own so you're not alone in this phase you need to know that you aren't alone but retiring solo does increase your risk of actually being lonely which can have detrimental impact on your health today we're going to talk about retiring alone or the new buzzword of solo retirement so if you're watching this and you say well that doesn't apply to me and you're a woman stay tuned the reason i say that is unfortunately seven out of ten or seventy percent of baby boomer aged women actually outlive their husbands what are you gonna do with that why are you laughing what are you gonna do without me i don't know what i'll do with that party anyway there's 10 000 people turning 65 every day and one half of this population is reaching this age on their own so you're not alone in this phase you need to know that you aren't alone but retiring solo does increase your risk of actually being lonely which can have detrimental impact on your health so this idea of emotional loneliness you know that people over 65 who suffer from that they have an 18 increase in their mortality rates which is scary so today we'll give you seven strategies to help ward off loneliness and overcome isolation to live a more fulfilling life as a solo retiree so here's the first strategy and this is really important overcoming your financial insecurities now if you are a single woman now or a single person and you're retiring and you don't really have a handle on your finances that's a problem and you're going to be stuck and stifled and not be able to move forward so you need to hire a financial planner and understand your finances and frankly if you're a couple watching this and one of the two of you really gets finances well and the other one doesn't that's not a good place to be no if you're listening to this both of you should pay attention and share the financial information as well as the financial burdens now because ultimately if you listen to that first statistic if you're a woman 70 of us will end up as a solo retiree outliving our partner that's just the medical history that's just the facts you know there are friends down the street who purchased the house from this elderly couple and unfortunately her husband passed away and she decided she wanted to downsize she went to sell the house they got all the way down the road to the closing right and realized he had never changed the title of the house so it took another three months to close and it's just because she had no idea they weren't really sharing the information so it is really important yep so get your finances in order we're not financial planners but definitely find one that was strategy number one strategy number two create a small support group of peers like mark said you're not alone there are many other people in the same place and you want to be able to share your struggles and successes with them yeah because it's it's tough to be alone and it's tough to really be alone but if you can be alone with another person who's alone then you're not alone anymore right that makes sense right kind of yeah good theory i mean you could do weekly coffee you know pick up a class or do some exercise or even just take a long walk it's important to make sure that you connect and have a group of peers yeah relationships are key and having a support group really helps so strategy three is along the lines of that but we're really suggesting that every day you talk to someone on the phone and person whatever it might be make sure you have a conversation with another human being every single day and it might make sense to make a list of people that you can call absolutely makes sense you know friends and family and neighbors you know and never feel like you're imposing and like mark said don't let a day go by that you're not involved in a conversation now it's always better in person because it feels better but if you can't be in person bad weather you know covet kept us all locked up a little bit at least call but be there and frankly what's helpful is not only for you to reach out to get some communication help but be the one supporting other people that's a great way to start having some conversations in a peer group that you're leading it so connect with someone every day strategy number four have a daily plan and a schedule something that adds structure to your life so that you're not always wondering what am i going to do today what's the morning going to be like how am i going to make it through the afternoon really set the tone from the day in the morning now good habits and routines are important and i know a lot of people that like to get up they've worked their whole life and they're retired now and they want to get up and just have a cup of coffee and watch tv watch a little more tv have some more coffee but before you know it it's 11 o'clock and you haven't talked to anybody and you really haven't done much so setting some schedule and some time some self-care time with friends and frankly limit tv i mean i you know watching tv every morning from 7 a.m till noon it's not healthy no but you could even schedule some time to learn to pick up a class to go to the library to read to children to find things in your community that you could do to be helpful and that makes you not alone and isolated so here's the fifth strategy and you've heard this from us so many times and it just makes so much sense this one does come up in a lot of our videos because it helps in so many areas of your life the fifth strategy is exercise every single day move your body move it get up and move it do you know that if you walk 20 minutes a day every day for 20 minutes you can add five years to your life so what about walking with a friend and 20 minutes that's easy walk for 30 minutes with someone and have a chat and catch up so you're now you're exercising and you're communicating with someone you know as we all age movement does become harder but you need to be as active as you can and just know that you can do 20 minutes a day so we hope you do that take it seriously so now let's talk about strategy number six volunteering you know there's so many benefits with volunteering and it's become such a huge part of our retirement transformation program and you know we do bring it up a lot volunteering sharing your wisdom creating your community you know providing yourself with fulfillment sharing and searching your passions we bring that up a lot but it does help with this loneliness and the potential for isolation you know you instantly can find a community of people when you start to volunteer and it could be as basic as working at the local food bank or the library or something but you're going to find dozens of other people in the same position you are in looking for communities so it's really important to give this a shot absolutely strategy number seven would be to try new things learn technology mark and i did a talk one day and there was a bunch of people in the room and one lady raised her hand talking because we were bringing up this strategy about learning technology her name was ava she raised her hand and she talked about the world that technology opened to her allowing her to connect with her family over in italy and how they structured it how she learned face time how she learned zoom how she learned to be able to work all of the technology in her house to really ward off that loneliness and you know how she did it remember her story she got one of her grandchildren to sit with her and work on the iphone with her to learn how to do face time she couldn't believe in her mind that it could happen and then in the end how easy it was for her right so but it really made her feel connected and less lonely and i think utilizing technology in that way is really smart and learn from a younger person it's nice in a community to have people your own age and people younger so and while you're learning technology look for online courses that are out there look for some online learning that can engage you i did that when i went to the university of pennsylvania and i took an entire online online course and i got to zoom in with other kids college kids college kids and i was the old lady but that was great and i made a lot of great contacts doing that no a big thing to remember is you're not alone you can ward off this loneliness but you need to be proactive work on the seven strategies we just mentioned above and listen if you enjoy this please share with your friends and also please subscribe by clicking the subscribe button below don't forget to join our free facebook community the link is down below and it's very interactive where jody and i go live each week you get to ask questions and we can communicate with each other and thanks for listening and we look forward to seeing you again

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CPF Retirement Sum & CPF Life

In this video, I will explain the 
concept of Retirement Sum and CPF Life  One of the main goals of CPF 
is to ensure that Singaporeans   can meet their basic retirement needs.  The CPF Lifelong Income for the Elderly, also 
called CPF LIFE, is a national annuity scheme   that will provide us with a monthly payout no 
matter how long we live, starting from age 65.  To fund the premiums of CPF Life, a new 
account called the Retirement Account,   will be created when we turn 55, the Retirement 
Account compounds at up to 6% interest rates  The amount set aside at 55 in Retirement 
Account is called the Retirement Sum   and there are 3 tiers called the Basic 
Retirement sum (BRS), Full Retirement Sum (FRS)   and Enhanced Retirement Sum (ERS)
The Retirement Sum is form by   drawing funds from your SA followed by your OA.
You can watch the video on the top right corner   on how you can optimize your Special account 
using SA Shielding hack just before turning 55  The question you may ask next is what determines 
the amount of monthly payouts we will receive?  the more you set aside in your Retirement Account 
at 55, the higher the monthly payout will be.  For example, if you are turning 55 in 
year 2021, you will need to set aside   BRS of $88K , or FRS of $176K which is 2 times 
of BRS or ERS of $264K, which is 3 times of BRS.  And correspondingly, the projected monthly payouts 
from age 65, based on CPF Life Standard Plan,   will be around $800 per month if 
you set aside BRS, $1500 for FRS   and $2100 for ERS.
You can also use the CPF   Life Estimator, which I have provided the link 
below, to project your monthly payouts after 65.  Due to inflation, Retirement Sum has 
been increasing at about 3% every year.   Do watch my next video which I will be 
sharing more about Full Retirement Sum   and a calculator to project 
your FRS when you turn 55.  I hope this video gives you an idea of 
how retirement sum relates to CPF Life   which eventually determines the lifelong 
monthly payouts when we retire.

This will   allow us to plan for our retirement in advance.
Thank you for watching. If you find this video   helpful, please Like and Subscribe to 
my channel for future notifications..

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Mailbag…Ask Andy Anything (Facebook Live, November 24 2021)

Hello, everyone. 8 PM Eastern on a Wednesday which means it is taxes and retirement live. I am Andy Panko, owner of Tenant Financial and moderator slash admin of the Facebook group, Taxes and Retirement which you all obviously are part of since you're watching me now. Thank you for joining. Um tonight is another fun mailbag edition which is open Q&A. Feel free to ask me anything. Um typically about financial planning, tax planning, retirement planning, but could be whatever. I am more or less an open book, I like to think. We do have one question that was sent in ahead of time. So, I will get to that but otherwise, there's nothing on the agenda so far tonight. No precinct questions. So, feel free to plop questions in the comments. I'm just looking here. Okay, yes. Happy Thanksgiving to you too.

Whomever this is. So, I see comments are working. Mark, happy Thanksgiving. Thank you for for joining. and there's a question here, okay? So, yeah. So, so dump your questions in and as always with these, normally, you know, I encourage folks to feel free to chime in and reply to other people's comments or questions but for for tonight's sake, for these mailbag things, I just ask that you don't reply to other people's questions even if you know the answer simply because it I I with my streaming software, I can't see who replies to what.

I see every comment or reply. It it they just stack on top of one another so I can't tell what's attached to what so it makes it a little clunky for me to figure out Someone's already you know, addressed or answered the question. So, anyway, let Rip with your questions but please refrain from answering other people's questions if that's okay. Thank you. Um quick update for those of you who care. I feel like maybe a lot of time to fill tonight. So, I'll kind of ramble a bit. Uh weight loss update. So, I forgot last week to mention where I was at as as you know, I was away for a few weeks, one week on vacation, one week on a at a conference right after that. Both of those weeks involved complete disregard for weight loss. I did go running a few times in each place but otherwise, ate much more than I should, ate much worse than I should, drank more than I should have.

So, no surprise. I was expecting to gain some weight. All said and done. Uh I was this Monday. I was 169 and a half which is two pounds higher than what I was 4 weeks prior which is kind of what I expected. I I ate and drank like a like a sailor on leave for the for those two weeks. So, I was expecting to gain some weight which I did and now, parlay this into Thanksgiving. I'll probably take down three quarters or maybe even a whole pumpkin pie on top of some sides So, we'll see but otherwise, you know, barring tomorrow and excessive eating more or less back on track with kind of eating well and and working out well.

So, things are are getting back to where they should be and just to recap, I started at one 1. I don't remember how many weeks ago it was. I was averaging about a pound and a quarter of loss per week which is which is my goal and as I mentioned, you know, few weeks ago, I got derailed from from two weeks away. Now, slowly getting back to it. So, so all is good for those of you who care, for those of you that don't, sorry for that.

Um dad for the evening. Oh, I do have one that's Quasi Thanksgiving related. Uh what do you call a herd of giggling cows? Laughing stuck. The earth is 70% uncarbonated water. Therefore, the earth is flat. You get it? Know what I'm saying? So, maybe the flat earther is running something. Maybe they were just referencing the fact that the water does not have fizzy bubbles in it and finally, this is the one that's sort of Thanksgivingish. Something great but it at least mentions a Thanksgiving food food commonly eaten at Thanksgiving. Uh what's the difference between a sweet potato fresh out of the oven and a pig thrown off a balcony? Anyone? Anyone? Bueller? One is a yam and the other is a yated ham. I'll be honest, I didn't know what yeeted meant.

Y E T E D Uh so so to yeet means to like hurl or throw something with with force and velocity. So, yielded ham means throwing a pig off a balcony with some force and velocity. So, that's that. That's my dad jokes and before we really get rolling, let me just hit you all with the disclaimer if I can find it. Here we go. This video is only General Explanations Education. It is most definitely not specific tax, legal, or investment advice before considering acting on anything you see in this video. First, consult with your tax legal or investment advisor, which I'm not. I'm just some guy here on the Wednesday before Thanksgiving answering your questions. Hopefully getting them right. Maybe getting them wrong. But I'll try my best to get them right to the best of my knowledge and abilities.

But again I'm not your adviser. I'm just some dude on Facebook. If I am your adviser then I wouldn't be answering your questions here. You know we'd be having our conversations offline and whatever. But for purposes tonight I'm not your tax legal investment adviser. Alrighty. Uh comments. Comments. Comments. I see we got some more questions here. Cool. Thank you all. Um Mark Troutman did ask the tax one of the 2022 tax info getting updated. Sent that out when it was and also farted along the 2022 summary tax sheet in the group the other day. There's another one as I mentioned that comes out from the College for Financial Planning which is not yet available but I will share that when that's out. That that one I actually like a little better. Than the one I already shared. I don't make that one. I just I buy it from some place. I slap my label on it and send it out. I have no control. It's actually in that summary that I shared with you all the other day.

But hopefully you enjoy it. None Okay. Questions. First question is, there was, from Gale. Gail asks, can you talk a little bit about IBONs and your thoughts? My thoughts about Ibons, my thoughts in general. No, I I assume about IBons. Why are we hearing so much about them right now? Great question, Gail. Um So, they they've been discussed in a group a few times and I did share, I don't know, couple weeks ago, a summary that I that I wrote and sent to my clients.

I I'd shared in the group as well. Just kind of explaining my thoughts about iBon. So, I'll try to try to summarize that succinctly. So, basically, in Ibond is a it's kind of more so like a savings account than a bond per se but it is a security you buy direct from the Treasury, United States Treasury. You can only buy em through Treasury Direct.gov right from the Treasury website or you can buy some with your refund and your tax return. If you have a refund on your tax return but outside of that, you can only buy em direct through Treasury Direct.gov.

You cannot buy them through a bank, through a brokerage, whatever. It has to be a treasury website. You can buy per taxpayer up to $10, 000 per year. So, if you're married, that's twenty thousand. Um if you do have a a tax return refund that you want to use to buy some iBons, you can take up to $5, 000 of tax return refund and buy more eye bonds that way. So, I have most married couple can get 10000 per person. So, that's 20 plus maybe another for your tax returns. That's twenty-five. Now, here's a little more complicated.

If you have a trust, specifically, that trust has a different tax return, a different taxpayer ID than you, like a like a irrevocable trust. That trust can also buy up to $10, 000 of iBons per calendar year. So, you buy it and then, so, what's the magic? Why is everyone talking about it? Well, the interest rate they pay changes every six months and that rate is reset based on actual, realized inflation over the prior six months six months, it takes a snapshot of what the change in inflation was and and that's the interest that it pays for the six months. Well, since inflation has has spiked in the last year, specifically in the last like six months, it it really, really, you know, went up. The interest rate is currently really high on iBons. Specifically, for any iBon you buy between now and May first 2022. For the first six months, you hold that bond, you will get an annualized, guaranteed interest rate of seven point 12 percent.

Guaranteed. No risk of loss. You put ten thousand in. You will get an annual rate of 7. 12 over six months. So, you know, over six months, it's it's actually 3. 56% of interest that you're in over six months. Again, annual rate just simply means take this, you know, taken what you would get in a year, divide it by half, that's the amount you actually earn on your first six months. The second six months, you have this bond, we don't yet know what the interest rate will be.

We have to wait until May, first, twenty twenty-two When we realize what inflation there is between now through then, the treasury will then set what the six-month interest rate is at that point and that interest rate is what's what's going to apply on the subsequent 6 months of your bond. So, anyway, so every six months, your your interest rate keeps resetting to whatever inflation is at the time. If inflation stays high or keeps going up, these things are going to keep paying pretty high interest and guaranteed interest.

There's there's no variability, no risk of loss. If and when inflation goes down, the interest rate is going to come back down. So, so that's kind of eye bonds in in nutshell. Now, there's some caveats to know when you make a purchase, you cannot redeem it at all within the first 12 months. It's completely locked up. There's zero option to to get out of it in the first 12 months. After the first year but before the five years is up from when you bought it, you can redeem it but there's a relatively small penalty. The penalty is the the most recent three months worth of interest that you recruit. You have to give that up.

If you sell out of this bond within the first five years, between one year and five years. After five After five years, completely unrestricted ability to redeem. There's no penalty. There's no whatever. Um these bonds throw off interest for, I think it's 30 years. Join a blank. It's either 20 or 30 years. So, you can hold these bonds for 20 or 30 years. They'll keep paying you whatever this inflation-based interest is every six months. After the 20 or 30-year period, they stop accruing interest. At that point, it's just done. There's kind of no point in keeping it. Now, honestly, I don't know if the Treasury Force redeems them on you and just like, no, gives you back your money or if they just sit there doing nothing until you consciously request it. I I'm not entirely sure honestly. So, so, that, that's That's the big buzz about iBons. Um compared to high-yield savings accounts or checking, you know, checking accounts pay interest of literally point zero one percent Typically high-yield savings accounts pay about half percent, maybe a little more.

If you're lucky and you're a member of a of a credit union or something that has a high rate, maybe you're getting, you know, over a percent but for the most part, cash at traditional bank accounts is earning nothing. Now, let me just share with you the history of iBond rates here we go. So again, every six months, they they reset. It's every May 1st and November 1st, they reset based on the actual realized inflation, you know, for each six-month rolling period. Um so, on November 1st, 2021, the six-month rate is 3. 56. So here I and this is right off the Treasury Direct website.

These columns A and B. Here, I just simply took the six-month rate and doubled it just so you all can can look at this on the annual rate because most interest rates are quoted on like an annualized basis. So, seven point 12% is the guaranteed rate of interest you'll earn over, you know, annual interest, you'll earn over six months.

That's high. That's really high. Uh but again, it changes every six months. Who knows what it's going to be after that? You can't redeem at all in the first year. You can only put in $10, 000 per taxpayer plus a little more in a tax return. So, it's not like you can take, you know, $200, 000 of cash that you have sitting in a checking account and swing it on to I bonds. You you just you just can't. So, while the interest rate is really high on these, there's there's kind of like limited value and limited use cases for where they make a lot of sense. Uh if you don't already have a lot of eye bonds, is it worth it now to start piling in to the tune of 10000 per year? I don't know. It's not going to hurt. I don't think but you gotta be careful again of the lack of redemptions in the first year but you're not going to mass a fortune starting to buy eye bonds now because it's going to take you forever to to to keep buying in, you know, ten grand per year per person to get a really big amount of eye bonds but anyway, just just so you can see quickly and and I'll wrap it up here.

So, as of November 1st, the annualized rate was 7. 12 guaranteed. Six months prior is three point five four, one point six eight, 106 202 140 So you can see. So, interest rates have been, you know, for the last sample of years, fairly high, you know, higher than savings account. savings account interest rates have been well under a percent for a while. Um whereas I bonds have been, you know, two ish, maybe a little more. Uh you know, it's flat 2016. It was actually negative in 2015. Now, fun fact, eye bonds will never pay you negative interest even if the actual inflation is negative, meaning deflation, the rate you'll earn will never be less than zero.

So you cannot lose money in these in these I bonds So, anyway, so so the interest rates have been higher than cash. I never thought they were that compelling enough to to tell people, yeah, you know, stop putting money in savings, put in eye bonds, just simply again, because of the restrictions around how much you can buy in the redemption periods, I was like, yeah, for for, you know, for that one or 2 percent, it's not really worth it but now, Shazam, when Guaranteed Interest is 7%, it's like, yeah, I'm, I, I start to notice now and and I feel obligated to tell clients, it's maybe something worth looking to.

Again, it's not going to change your life because you can't put a lot of money into it but at this level I'd be remiss if I did not, you know, point this out to people like, hey, this is a lot of interest. Alright, so that's IBons, Gail. Hopefully, that answered the question. Let me stop the screen share. Um and I got new lights over me. It's a little more washed out and white and future than I was hoping. Uh there there's two big fluorescent overhead fixtures and I didn't realize how the one over me had two bulbs out.

That was kind of dim. So, I went to Home Depot, got some new ones and I put em in. It's like, wow, these are really, you know, bluish and washed out whereas the other light I have is a little more warm and and orangeish. So, I may go try to find from Bobs because I'm already pretty pasty and washed out as it is. I don't I don't need this. Making me look transparent. Alright, let's questions. What do we got here? Craig Root, in preparation for moving, we are selling everything in the basement and barn through online platforms. They have contacted us saying a tax form will be generated.

This is old stuff that we are selling for much less than we paid years ago. We have no receipts. I'm sure we will break the $600 barrier next year. How do we prove we didn't buy this at a yard sale and sell out for a profit as many people are doing? Oh, that's a good question. So, technically, anything you sell is supposed to be reported to the extent you have a gain on it like even I don't know. Yeah. Why am I drawing a blank? You buy a refrigerator five years ago and you and you sell it today. If you have a gain on it, you're supposed to pay tax on it. Now, realistically speaking, nobody does. So, let's assume you bought a used refrigerator a few years ago for a hundred bucks. Someone's unloading it for for dirt cheap. You turn around, you sell it today on Craigslist for 300 bucks. Um you made $2 hundred dollars. You're supposed to report that to the IRS and practice, nobody does. I'm not saying it's right. I'm just saying nobody does. Um because there's no real paper trail especially if you did it as a cash sale through text or whatever.

It's not like the person you sold it to issued you a 1099 But now and I'm not that familiar with this but I did read some some quick headlines that like Etsy and eBay are going to start if they didn't already start issuing 1099s to report people's sales through those platforms. I guess this is what you're getting at Craig. So now how do you prove that the proceeds for what you sold as reported to the IRS on the 109-9s. It sounds like these places will be sending. How do you prove that wasn't more than what you paid for it and that you don't have reportable taxable gains. Man, I don't know. Um I'm going to say the honor system. I mean, realistically speaking, if if you sold, you know, an old desk for fifty bucks. Um and he sold a whole bunch of stuff that was like $1, 000 in total and you get this ten ninety-nine saying you had a thousand dollar in proceeds. I honestly don't know what the form going to look like if any on the tax return, it may just be on our system for you to detail yourself, what you sold, and what the what the basis, what the cost was.

So, I don't know. Um realistically, I don't I I doubt the IRS is going to give people trouble over this if it's only, you know, a thousand bucks, few hundred bucks or whatever. If you, if you have tens of thousands of dollars of reported sales, then, it's probably an issue that then you would want receipts or some sort of substantiated documented However, you can cobble it together of what your original cost was but my guess is for a few 1hundred, a thousand bucks, especially if it's sporadic, you know, every every year or so, you're selling some stuff. I doubt you're going to raise a flag. Unless you're at higher audit risk for something else, I don't think this in and of itself, again, unless it's a lot of transaction, you know, a lot of dollars. I don't think this interview itself will be likely to trigger audits for folks but if you're already high audit risk, self-employed, you know lots of other deductions or you know, what are other audit risk things or you fail to report some things that the IRS gets 10 ninety-nine for, you know, cross all your Ts.all, your Is to try to limit your your audit risk but otherwise, you should be okay.

Uh if they do come asking, just just be honest, be like, I don't know. This is a bunch of random stuff we had from decades ago. I I don't know what we got it for but guarantee now, it's worth less than it was then. Um that's the best I can come up with. Good question, Craig. Sorry, I didn't have a better answer. Mario Sitman, rule of thumb on when to stop collision and or comprehensive coverages on auto insurance. I don't know. This made to mm I was going to say, does it depend on state? I I I don't know. I'm not an insurance expert. I mean, I know enough about property and casualty insurance to to to know what it is, how it works. Maybe some states require you to have a minimum amount of collision and or comprehensive. I don't know. Uh I think most if not all states require liability at least but outside of that, the best I can say is the the the overarching approach with insurance is you really only want to buy and share, I forget what the exact title labeling is but you really want to only buy insurance for things that the probability of them happening are relatively small and if and when they do happen, the financial impact is large and large enough that you can't safely absorb it yourself.

That's why I buy homeowners insurance. Chances of your house blowing up or getting knocked over, burning down, or really slim But if when it does happen, it's hundreds of thousands of dollars and most people can't absorb that. That's something you insure. Life insurance, you're young, you're in your peak earning years, you got young kids, you got people that depend on you financially, you die, that would be bad for your, for your, you know, for your family, chances of you dying, relatively small, financial impact quite large.

That's something you want to insure. Car insurance, kind of the same thing. Um you know, for a lot of people, if a car gets scrapped and they gotta pay 40 grand out of pocket for a car, you know, that's that they can't really do that. So, do the math and figure out. You know, if you have older, not so expensive cars and if it does get scrapped in an accident, not a big deal. You got 20 grand lying around to go out and buy a comparable, you know, replacement used car. Maybe you don't need the coverage Now, I'm not going to tell anyone drop insurance because as soon as I say that, guaranteed you get into an accident the next day but that that's just sort of things to consider with insurance in general. Um again, if it's low probability of happening in large financial impact, it's something you you probably want to insure with a car, you determine, you know, could you comfortably fund the replacement of a car if something happened with collision.

Now, again, you have to check like damage to others and people sue you for liability and pain and suffering like that's something you want insurance for because that can be a lot of money but simply replacement cost of a car or even replacement cost damage to someone else's car. Um that that's that's kind of for you to figure out that the math if you're comfortable ensuring that yourself or funding it yourself as opposed to paying for insurance for it. So, no, no rule of thumb but just food for thought. You know, me personally, I I'd sort of rather just keep insurance. It's relatively low cost.

I mean, I'm in New Jersey. So, it's it's expensive, I guess. But low cost, enough, and I think I have a 000, dollar deductible maybe more just because like I'm comfortable paying for that out of pocket even when there's something big, you know, tens of thousands of dollars. Yes, I'd lean on insurance at that point but otherwise, I see always keeping it just just because. I don't know. I'm also fairly conservative in in in many aspects. So, but that's me. Everyone's answer is going to be a little different. Uh good question. I feel like not a great answer but hopefully at least pick some some things to think about. When making financial decisions, would you discuss good enough versus optimization and how to decide which is better? this kind of sums up tax planning really well.

Good enough is is what people want to shoot for. If it's not good enough, you have problems. Um good enough will suffice. Optimization, it all depends. Are you interested in doing yourself? Do you have the time, the knowledge, the willingness to to figure stuff out yourself. If not, are you willing to pay someone for it? And if so, how much are you willing to pay? Um good advisers that they know stuff about taxes and and what not shouldn't be cheap or or aren't cheap and probably shouldn't be cheap.

Is it worth it to you It all depends. My my thought about optimization whether it's tax location, whether it's tax-efficient distributions and things like that. You probably heard me say this before. Tax planning and getting tax planning right in most cases will make a good plan better but it's not going to derail a plan that's already good enough as long as your expenses are under control, relatives, to your other income sources, and you know, asset size. If your expense is under control, if your overall allocation is right, if you're, if you're of keeping your fees down where you can in your investments and such. that, that's, that that's the big stuff.

That's the stuff you have to get right. Um, and, and to get that at least good enough. Tax planning, getting tax planning wrong, you know, not getting your asset location right, meaning you don't, which asset types you have, which accounts, getting that wrong isn't going to sink an already good base, solid plan. Getting it right. Can make it better and optimize it. So, I don't know. Um, some, some people sweat every detail. Some people want to answer these things to the penny and we'll run simulations and analysis all day long, every day for the rest of your life just because that's who they are.

Always seeking this, this never ending kind of elusive, perfect model, optimized model. It it doesn't exist. You you can always make things a little better but there's never going to be, yes, this is it. This is the perfect. No ifs, ands, or buts. This is the optimize. I don't think that exist. So, this is up to you. Some people are like, I don't care. Just get me good enough. I want to I want to be happy. I want to not run out of money. As long as you say I'm okay there, fine.

Whatever. The rest of it is just gravy if it goes well. If it goes a little wrong, I'm still okay, I don't care. So, it depends on the person Uh good question. Interesting question. Do you have any opinion on real estate syndication including funds or the need especially in retirement to diversify outside of soccer bonds? I don't know. I mean, like any other asset class that's not a traditional stock or bond, traditional financial investment, sure. There there's a case to be made for diversity. Um you know, uncore related to cash flows and or the the the changes in price are reasonably uncorrelated to traditional asset classes like stocks or bonds. In that sense, yes, completely get it. Um but the the things you have to weigh, the trade offs are less liquidity. When you own real whether it's physical real estate like you bought a rental, you can't get out of that quickly. You know, it's going to take you a minimum few weeks to sell it. Uh there's going to be friction cost between realty transfer taxes, legal fees, recording fees, stuff like that.

So, it's not a quick sale and it's not a cheap sale either. So, there's that to consider. Um that's if you're by yourself. With the syndication, you have even less control. You know, you you basically, I guess there's different ways to syndicate. You can go through like a crowdsourcing. You can do a private syndication but the point is you you pull up money with others and this pot of money goes out and buy real estate. You then own a slice of it.

So, I I get it. There there's there's there could be value to be had. I don't I I won't tell clients who want or have real estate get rid of it but I don't personally, my investment approach, I I don't go out and seek every possible combination of alternatives and non-traditional asset classes to tweak things. My approach it's worth is traditional investments, you know, low cost, simple, passive base, control what you can. You can control fees, diversification to some extent taxability. That's it. Um that's what you can control. So, focus on that. I have some clients that have quasi private investments or interval funds, you know, things they, they, they no longer want but can't get out of without selling little portions every quarter.

Real estate's kind of the same thing, right? If and when you want out, well, guess what? You might be stuck depending on this indication set up or depend on the rear, you're in, maybe a private real estate investment trust, you simply can't get out of when liquidity dries up. So, you have to weigh those things in but whether it's real estate or anything else, dare I say crypto. I'm not recommending crypto. I'm just saying it is more or less uncorrelated to traditional assets. Yes, there's a case to be made for any uncorelated or low correlated asset to to potentially enhance not just returns but safety and stability of of a portfolio.

So, that's my opinion a like anything. It could work. Uh maybe it will, maybe it won't but it's, it's all, it's all possible. It's not something I personally focus on, but yes, I, I can see where real estate can play, coming to play for folks. Okay, what else do we have? Does reading the tax code ever make you want to yeet your computer across the room? Ha, yes. Uh sometimes, reading reading like legislation, the reading these bills, like to build back better act, trying to trying to comb through that.

That's hard to read. So, the tax code is hard enough to read. These legislation, these bills and these legislative changes are even harder because a lot of what they do is they reference specific codes, specific sections, and the tax code. So, it'll say like section 807 dash C dash three dash four, add to the end of the last sentence, or the greater of or so, I'm making this up but the point is like you you need to reference a tax code itself with a lot of these bills to see what they're actually doing. These bills don't just say there. We are increasing the tax rate from 5% to 100% blah blah blah. No. You have to dig in the tax code. Look at what they're referencing and and do that. So, yes, sometimes that makes me want to yeet my computer across the room. Um just because they make it so hard to read. Oh, they don't intentionally do just the nature of how the code is but anyway, yeah, interesting question. Do I know of a good resource that compares current tax rates with what they will revert to in several years, inflation adjusted, relevant to making Rothhurst traditional decision.

Um So no, well, I have a few thoughts. So, we know we know what the tax rates will be in 2026. that's easy. It's what they were pre 2018. Um we're we're going back to those same rates. What's changing is the the dollar amounts of the brackets where those rates start and stop. Then, simply just adjust it by inflation. So, every year, those things go up a little bit. Every year, there's inflation I should say. So, no noone really knows what exactly those will be the future in several years. It's anyone's guess what inflation is going to be. So, I'm sure there's sources out there that that make projections and predictions but that they're not necessarily any better or worse than you coming up with your own assumptions of what you think inflation may be and therefore, what you think the you know, the income brackets themselves may may rise to over the years.

So, I don't know. I I did for what it's worth. I kicked around a trial, the software owned by Bloomberg called BNA. It used to be called BNA. It's called something else now but it's this really robust, really like not user-friendly tax software that lets you do different what ifs but it doesn't let you assume tax rates and stuff like that. It's kind of stuck. It has its own inflation assumptions built in but that's it.

You can't add like new taxes to it and things so I didn't find it very useful and I am trying to find this, you know, holy grail of how exactly or what is the best process and software to try to quantify Roth versus traditional and this something doesn't exist, frankly. I'm I'm I'm convinced nothing exist to do this, right? Because there are so many variables and and we don't know what those variables will be. We don't know how high tax rates change. We don't know how high or low stock and bomb markets will go. We don't know what inflation is going to be. We don't know what your own longevity in life's going to be. Maybe you die in two years and all these conversions were for not. You know, you don't get to live long enough to benefit from the the growth and the Roth. Perhaps. So, no. I I don't know of a good software that that really helps the answer which is frustrating because probably the most common question in this group is should I do Ross conversions or how much or when and there's no good way to quantify that the best I can sort of say is like I know a problem when I see it.

You know, if you got three million bucks in an IRA and you're 10 years out from RMDs, and you're in really low tax bracket now because you just retired. Like, you got a problem. Don't let that three million sit there and continue to grow. Take some out now whether it's through distributions or conversions or whatever just just because we know it's going to be an issue. How big of an issue we don't know. That's like, that's pretty obvious to see.

Outside of that, it's really hard to to to try to precisely pin down what is the right amount of rough money to have. What is the right amount of conversions? Should I do conversions? Should I do Roth contributions or traditional contributions? The best I can say which is kind of a cop out answer but it's really the best you can do in the absence of these big ginormous variables that we don't know what they're going to be is just to try to ultimately get to retirement with your assets, spread around in a nice, healthy mix between tax deferred, rough, and like regular like brokerage or cash.

Um what exactly is a healthy mix? I don't know. Third to third a third, 20, percent, twenty percent, 40%, whatever. Just ideally not like 95% of your assets and tax deferred. Cuz then you don't have a lot of control or flexibility around the taxation of that stuff. So the more you can diversify your sources of of a account taxation the better, but there is no right answer as to what's the the best amount or right amount. Alright, kind of got off on a tangent there but man, these are tough questions from you all. These are all things that that don't have clean, concise answers. I don't know if that's coincidence or if I'm just tired.

Um anyway, so anyway, I I apologize for this long, not specific answers but this is kind of the best I can come up with for these for the questions you all are throwing. Here's another one. When considering Ross Conversions, what return expectations on a converted money are generally used. Uh almost, I'm almost afraid to touch this. So, it really depend, it depends how you're going to invest it. Generally, the conventional logic is leave your Roth to be invested with your most aggressive stuff and don't plan on touching the money for a long time.

Let that aggressive stuff build up a lot, hopefully build up a lot of gain over time and all that gain will be tax free because it's in the Roth world. So, with that said, assuming your Roth assets are going to be, you know, your stock funds are most or all of your stock funds. The question is, what rate of return do you want to assume going forward for stock funds? This is where things can get hotly debated and some people may start throwing punches depending who, you know, who you ask and how how passionate they are about it Some folks will say stock market since we're it's been running up so much in the last 10 years.

It simply can't sustain this level of growth going forward. And has to at least kind of stall out. Maybe not crash but has to stall out for a while. So those people are going to say I don't know. Maybe expect four or 5% annual return going forward out of stocks. Uh there's other folks who are eternal optimists and and perennial bulls will say nope. Party's going to keep going. Maybe not as high as it's been. But yeah we still expect 78% Sto returns going forward. And then you have the doom and gloom pessimists who they're just you know always saying the end is near. They're going to tell you no stock market's going to **** out and you know it's going to be negative returns for the next 10 years.

Absolutely nobody knows. So take all that noise and throw it out the window. You pick a figure you think you're comfortable with. If you are invested in stocks and assumed average annual long term return of anywhere from four to eight or 9% is defensible. Not to say it can't be higher. Not to say it can't be lower. But just throwing out a very very broad range. Mid single to maybe high single digits for a well-diversified, you know, globally diversified equity portfolio is probably a fair assumption but it's just an assumption.

You know what happens when we assume things. Um so, anyway, Thanks, Mark. I bonds are thirty immaturity, not twenty. Good, good. Yeah. So, this person, I don't know who this is but some older I bonds have a base interest rate. I I forgot to mention this. So, I bought the interest Ibonds pay technically have two interest rate components. One is a fixed rate and then one is the you know, inflation-based rate that changes every six months. The fixed rate has been 0% for the last few years.

It used to be three plus percent, 20 years ago and then it kind of trickle down over time, bumbled around zero to oneish percent but the last few years, the fixed rate has been zero. If you did buy an eye in like 2000 or roughly, you had a fixed base rate of 3%, meaning that I bond was always paying at least three percent. Then, on top of that, it was paying whatever the inflation is. So, if there's, you know, if you owned an iBon from 20 years ago, you get this base rate of like 3% and you're getting this seven percent inflation on top of it. That's a lot of interest on an eye bond but that, you know, hindsight's twenty 20. If you knew 20 years ago to stock up on these things in advance of interest rates, you know, plummeting twenty in the future, IE now and inflation spiking, then, yeah, you'd you'd be a genius but outside of that, you can't go back in time and and go buy one of these 3% in base rate iBons.

They simply don't exist anymore. Base rate has been zero for a few years. how it continued high inflation with regards to cost of living adjustment payments impact the Social Security Trust Fund. hey, that's a complicated one. So, there's a bunch of moving parts. Um all else equal, higher cost of living adjustments means social securities, paying more benefits out of the system which means the trust fund will will deplete sooner. On the flip side and this is where it gets complicated. As inflation goes up, the wage, you know, a national average wages go up and the wage amount on which people pay social security tax also goes up.

So, there's more money getting paid into the system. That helps offset it but that that's not free lunch. The more people pay in, the more you pay in over your life, the more anyone pays in over their life, the more benefits it ultimately accrue. So, I I don't know the answer is what I'm saying. Um I I don't know which directionality in which inflow and outflow is larger or smaller than the other and which one more or less offsets the other. So, it's tough to say. The best I can respond to say, wait till next June, I think it is when they come out with the next annual Social Security Trust Fund projection.

Then, we'll see in hindsight. what this you know, what they think these cost of living adjustments have done to the trust, or, or will do to the trust fund, but prior to that, I, I really don't know if it's going to help or hurt it. I would assume on net, it would probably hurt it a little bit, but I, I really don't know. It's, it's not that simple. The way the formulation of Social Security works. What do I think about inflation protecting mutual fund to park some cash in for the next several months? Uh Uh I don't know what you mean by inflation protecting mutual fund.

You mean like a mutual fund that invests in treasury, inflation protected securities or is there some other product I'm not aware of that somehow has an inflation-based return in a in a mutual fund. But whatever, that aside, in theory, if it's something that's index to inflation, then then sure that by itself sounds good on paper but it depends what what you give up without looking at the security and the mutual funder knowing exactly what's in it and how it functions. Um you know, it may or may not help.

So, treasure tips, treasury, why am I drawing a blank? Treasury, inflation, protected securities, our bonds, treasury bonds where the interest rate is fixed but the principal amount on which that interest is pays, paid, adjust with inflation. So, so that's how they kind of pay you more interest. If you own these bonds as inflation goes up, the principal value that you own goes higher and so therefore, you're getting a more dollar amount of interest but those don't pay a lot of interest to start with.

The interest rate is is really close to zero on those So, in real terms, you're not really getting a lot of money for it. Plus, because they're bonds, this this gets a bit technical but they trade in the secondary market. There's going to be supply and demand forces that can swing things. So, you can lose money on these bonds. So, you know, you may buy it at one price if the market decides they lose favor in inflation bonds, the price of those bonds may go down, you may actually lose money on these. So, they're not, they're not, they're not riskless, they're not foolproof. Unlike iBons where you cannot lose money in an eye bond because your prince value will never go less than what it was and you can never get negative interest in an ibond. Um so, iBonds and Treasuring Inflation Protected Securities are are different animals. They're both treasury-issued things but the mechanics of how they trade and how they credit interest are very different. So, anyway, it it depends. Um I'd have to know more about the particular security to say whether or not, you know, I think it could make sense.

Oh, thank you, Jeff. I'm no more washed out than usual. Yeah, I'm usually pretty washed out. So, it's good to know. I don't look more washed out. Thank you. Uh what is this? knowledge of IRS enforcement of crypto transactions and gains. I am self-reporting gains, spreadsheeting it. I spreadsheet a lot of my life. Um ain't no shame in that game. Any idea if sites like Coinbase is generating any info to the IRS that would need to match. Just don't want higher chance of audit due to crypto transactions. No, I I don't know. I do know this is a level an area of increased scrutiny from the IRS and and rightfully so, it should be.

Um there's no reason why crypto assets should be any less trans reported than stocks and bonds other than the market simply isn't as developed. The players in the market aren't as developed. The custodians, if you will, you know, these virtual banks aren't as develop so they don't have the pipes and plumbing and reporting infrastructure yet but in theory, yes, crypto should be transacted and reported to the IRS just the same as stocks and bonds and major brokerages. So, I I I don't know if Coinbase and and you know, crypto banks of its ilk are starting to to produce things that they send to the IRS.

I've never personally bought crypto so I don't know. They should. If they don't, they should really soon for everyone's interest other than those trying to hide but whatever. Um with that said, I think spreadsheeting it for now is fine. You know, as long as you keep decent records and you're you're honest about reporting gains and losses, nothing wrong with that. Uh and you know, if and when there these these coin bases and places like it do start to develop formal tax reporting and then you'll need to rely less on spreadsheets because that's going to be the proof. Unless they're flat out wrong in the reporting, in which case, yeah, maybe you want your spreadsheet to try to prove them wrong but otherwise, the source will be whatever form they send you especially copy that get sent to the IRS as well.

Yeah and I don't know whether or not crypto transactions will lead to higher audit risk. Maybe, I guess because it is more of an IRS focus, I don't know what the, you know, how high or how much more of a risk it is. If it goes from negligible to slightly less negligible or if it goes from like, you know, you go from 1% risk to 10% risk. I really have no idea.

My guess is it also be a function of the size of the transactions probably like anything else. Sides, you know, size matters. With the IRS, the the larger is, the larger reported transactions, I think the more likely they are to question things. All else equal but with that in mind, I would think crypto would lead to higher audit risk but I frankly have no idea how much more. Murphy's Law. Here we go. Here we go. I ended collision and comprehensive on my old truck worth about 5000and then it was stolen. Yeah, go figure. Like I said, I don't want to tell people to drop insurance because you know, as you're driving Thanksgiving tomorrow, guaranteed your car gets smacked up. Uh Anyway, I stopped telling him owners insurance 30 years ago. Present value of savings is probably sixty K. Yeah. It could work. Like like any insurance. I I don't want to call insurance a gamble because it it's it's not.

It's insurance. You should lose you should lose money on insurance. You you shouldn't get something insured with the hopes of having to need it. If when you do need it, you'll be glad you have it. But like life insurance for example, you shouldn't be if you buy a 20 year term policy and you live. So, after 20 years, they're like, darn, I just spent whatever, 1000 bucks a year for 20 years from nothing. It's been 20 grand for what? I got zero return. You should get zero return. You you want to live. Well, most people, you should, you probably want to live. That's how to view insurance. Don't view it as a as a people do and I don't know. I'm not knocking you, Perry. I don't know why I got it from this tangent but homeowners insurance, car insurance, life insurance, even to some extent annuities because not not annuities or grossly misold. So, not a great example but I'm I'm saying annuity in the sense of like buying yourself a stream of income is in effect, longevity insurance. Ensuring against if you do outlive standard life expectancy, you're helping ensure you're not going to run out of money because you have this annuity that's going to that's going to you know, that's going to pay off.

It's going to pay monthly as long as you live. That's a form of insurance. It's longevity insurance and like any insurance, you don't buy it to try to make money. You buy it if and when. The unwant event happens, you're at least somewhat protected. That's what insurance is and homeowners is is no different. You don't buy homeowners insurance, hoping your house burns down so you get to make a claim to get paid out. No. You buy it and you spend that how much you, you know, it is, thousand bucks, 2000 bucks, depending where in the country you live and how big your house is, I guess.

Um you you have that expense every year, hoping and not expecting to have to use it but if when you do, you're glad you have it because it's going to cover, you know, 400, 000 bucks, 600, 000 bucks, however much your housing policy is but yeah, if if you Want to take the gamble of of of not ensuring and saying, yeah, I'll I'll save myself a thousand bucks a year, whatever it is and just deal with, if when I have an event, that's completely fine. You know, that that's your prerogative. Um and maybe chances are you probably will win that bet, right? Just because how many people actually have a complete home disaster home casualty? Not many, you know, or not most at least.

Majority of people don't ever in your life. So, people from from a pure odds perspective and I'm not, I'm not advocating this but from pure odds perspective, most people probably need home insurance because they're not going to have a massive home event but if and when you do and that event cost you $500, 000, if that's going to bankrupt or otherwise really break your financial life, you don't want that.

That's something that you should ensure because you can't withstand the loss. So, that's my thoughts on insurance. Karen, assuming you have about the same amount in retirement and brokerage account. What do you think about just rebalancing your retirement account to avoid paying capital gains in the brokerage account. That's what I do in practice, Karen. Um so, for people I manage money for, a lot of them have brokerage accounts that they may have had for a while. If they had it for a while, basically, is up. So, everything's at a taxable gain. So, what we do is generally, just keep the stuff they have in the brokerage account, don't rebalance it, whatever it is, we just fold it into their broader allocation and then, back into the rebalancing we need by way of rebalancing their IRAs or Roth IRAs or 401 (k) s or whatever because there's no no tax implications, rebalancing those.

Now, it doesn't mean we sit in the brokerage stuff forever. This is where it's a little more work involved and a little more function of what's going on in the world in the markets. We look for to sell things either because client needs income and part of the tax plan for that year is okay. We're going to get you 100000 bucks out of your brokerage account. It's going to be at you know, whatever long-term capital gain. You guys paid 15, 000 bucks in taxes versus if we pull 100 grand out of your IRA, it's going to be taxed at 20%.

So we kind of do this analysis every year to see what makes sense. Also, depends what the markets are doing. If things are up or down, what the tax implications of that but yes, generally speaking, I I do this in practice. Don't touch the brokerage account. Only rebalance the other stuff because there's no tax implications to to doing it. So, nothing wrong with not not say nothing wrong but completely valid approach. David Fultz, how frequently should someone check their investments? Do you think that the more we check, the more our behavioral biases come into play.

No doubt, yes. Um quarte rly ish. You know, when you look at it daily, that that that does more likely than not prompt you to feel the need to want to or to have to take action. Action is usually not good. Action means emotions, action means knee-jerk reactions. Um get your allocation right in the first place. Now, what exactly is right? You know, there that's a bit subjective whether it's 60/ 40 or 6535 or 8020. Depends on your stage of life and your emotional use towards risk and your financial assets and what you need them to do for you blah blah blah. Get your outlook right and and again, control what you can't control. Fees, diversification, allocation to some extent taxability. Outside of that, no.

Don't be looking at it. Daily, you know, frequently. Um I look at stuff because I'm in the business and I have to do it because I I you know, I have a fiduciary obligation of clients to make sure the world's not ending or whatever and if it is to, you know, maybe have to do things in their accounts but otherwise, I sit on it as well. Once a quarter, I go in, I rebalance everyone's accounts methodically, emotionally, is that a word? Without Um Yeah. I take all the subjectivity and guesswork. I do not market time. I simply, if a client's allocation was 60 forty, stocks drifted up. Now, they're at sixty-two, 38. I'll go in and I'll rebound. I'll sell some stocks, buy some bonds, or whatever, get them back to 6040. I do that quarterly like clockwork, the middle of every March, June, I had three to June is what? September and December. That's when I rebalance. Um if and when there is a major market move, Intracorder, a huge run up or a huge drop such that, you know, that may really skew the allocations, then, yes, then, I'll go and intercord it and rebalance but otherwise, if their allocations float around a few percent from the target, that's fine.

You know, getting too fancy and you want to rack up a lots of transactions and bit **** spread and stuff like that by rebalancing daily or even weekly. So, just pick a cadence and stick to it. Um whether it's quarterly, semi-annual, I'd say at least once a year, people should rebalancing and looking at statements just to know what's going on but you shouldn't be touching it and around trying to rejig or too frequently because because that's that's probably you know, more likely to not good isn't going to come out of that. Uh thank you, David Fultz. I moved 20, 000 from a 43 B to a traditional IRA I then plan to convert that over to Roth and pay income tax, okay? Is there any rule on the funds has to stay in traditional IRA for any period of time before I'm allowed to convert to Roth? Easy answer, no. Next, no, just kidding. Not to be rude. But no, there there's not. Once the money's in your IRA, you can you can convert it in theory that same day.

As soon as it lands there. Now, in reality, the custodian, the IRA will probably let make the money sit there for a few days to fully settle in in banking only once that cash is actually settled, can you then, you know, convert it out of the account, probably, but no, outside of that, there's no restriction, no IRS rule that says the money needs to sit there in season for a certain amount of time before you can convert it. Uh, good question. how to help a friend who says, I don't trust stocks. I'm keeping my money in cash. Just leave it alone.

I feel like it's dangerous even suggesting that all cash may have inflation risk and is not the best move long term. Do you think I can help if I heavily caveat that stock can do significant value due to volatility and highlight risk or still losing bet? Um I don't know. It depends on your friend and how how stubborn and close minded. He or she is and I don't mean those as as like derogatory mean terms. Just that's kind of the best way I can think about it. If their mind is already made up, I don't trust I don't care what you tell me, then, no. It's like trying to, you know, convince someone on one of the extreme ends of the political spectrum to change their mind and and see the logic in in some of their dumb views. Um it's just, it's pointless. You're going to get yourself angry over it. So, don't bother. Now, sure, if if you love the person, if you're genuinely concerned, I guess you can try.

You know, I don't know the dynamic between you too. So, I'm not a therapist nor do I play one on Facebook. This could be terrible advice for all I know but if you genuinely care about the person and you think he or she, maybe even mildly receptive to listening or at least won't cut you out of their life for trying, then sure that then I guess you can try to make a you know, casual kind of conversation with without getting judgmental or angry at the person but I don't know. It depends what your history is with this person and how he or she responds. Maybe it's just pointless. You're not going to get anywhere and just cause everyone a bunch of undo Ajida or maybe you can actually move the needle a bit.

So, I'm not sure. Good question though. do you find with your clients spending the go go, slow go, and no go phases of retirement? Do you do you find with your clients spending the go go and no go? Um not sure entirely what you're asking defaults. Do you find with your clients spending the go-go silver? Oh, okay. Yeah. So, yes. There's three phases of retirement commonly known as the go go, slow, and no go years or phases.

You can probably figure out what they mean. You know, go go is typically depending when you retire and your your general health but let's just assume, you know, it's your 60s into your mid 60s probably. Everyone's going to be a little different but this is when you're still healthy, vi you know, mobile good mind and body. You can still do travel. You can still physically move around. You don't have any, you know, restrictions physically or or mentally. That's the go-go years. That's when you often spend a lot on discretionary stuff doing those big once in a lifetime trips you wanted to do, doing, you know, massive amounts of pickleball.

Um doing whatever, hiking, and then the mind and our body starts to slow down typically seventy -ish, you know, into your late 70s or mid eighties. I don't know. Everyone's a little different again. That's the slogo years. Um you know, you could still do some travel. You're probably not climbing up mountains at this point. You're probably not paying playing aggressive pickleball. Now, maybe some slower pace pickleball.

Um so, you may spend a little less money on discretionary stuff and then the no go phase is kind of as as it implies, you know, the mind and or body are are kind of losing steam, whether it's physically, you can't climb stairs or you know, you you can't do any sort of real meaningful travel at this point or maybe your mind isn't quite whether it's demand just setting in or or or what it may be. You're not really doing much. You're you're probably unfortunately, not necessarily bedridden per se but you don't really leave the house and do much.

That's the no-go years. In which case, the discretionary spending is in effect nonexistent. Um so, the spending, at least in discretionary stuff is usually highest in the beginning, you know, the go go years starts to taper off in the slow go and the no go years. It it's virtually zero. Uh but that maybe somewhat, you know, or fully offset by increases in in medical expenses. Um but the point is spending in retirement is not linear. And this is why rules of thumb like the 4 percent rule are just super super back of the envelope. Quick sanity checks. They're not a distribution strategy. No one spends and lives exactly linear and even amounts. Life happens. Financial markets happen.

Things change. Typically you do spend more early you know early on and then it does taper off. So for what it's worth you can kind of give yourself permission to spend a little more early with the expectation that you can or you will be spending less as your years progress. Uh with the caveat that maybe, you know, medical expenses really ramp up. So, just another thing to further complicate. All this retirement planning stuff is is the unknown about stages of life, stages of spending, but but yes, I I do see that people want and should spend more in the go go years.

Enjoy it while you got it. Enjoy it while you can still do it and then spending will will typically taper off. Do you feel that a preferred stock exchange trader fund is a good proxy for a corporate bond fund? Is it safer than a stock fund? So, for those who don't know, preferred stock is it's it's like part stock, part bond It's technically stock but it's not common stock. It's it's it's more you know, doesn't have may not have the same voting rights as common stock. The dividend it pays is senior to common stock. Meaning, if and when the company cuts dividends on its preferred stock, it can't pay dividends to the common shareholders typically. Uh it can, you know, only if it is paying out, this preferred dividend to these preferred stockholders, can it then pay out common divide ends.

So anyway, in that sense, it's kind of like more like a bond and that it does typically have this stated annual dividend payment. Um yeah, I don't know. I I can't I don't say it's safer. I mean, what does safe mean exactly? But it definitely is more corporate bond like than traditional stock but it is still stock. Not, it's not formally a form of, it's not technically a form of debt. So, it's not completely a bond proxy. There's a place for it. Um again, preferreds those that do pay dividends are more stable of dividends typically than common stocks. So, so there, from income perspectives may be good. Uh preferreds are often convertible.

Meaning, the company can convert them into orange journal blank into shares of the stock into common shares of the stock. So, that's, you know, that that's a risk that may not exist with stock in the first place. You think you have preferred all of a sudden the company converts it or you know, force converts or maybe you can convert if you want into shares of common stock. So, it's a little more complex Uh god, again, not a great answer from me but it it's not, it's not a simple answer to say whether or not they're they're better or worse or that it's necessarily safer than a stock fund. All is equal. I think it's probably lower risk generally like lower volatility, little higher ongoing dividend but I don't want to necessarily say it's safer because there are some stocks like Melwether stocks that have always done fairly well and will likely continue to do fairly well and fairly consistent and that sense, those stocks can be safer than some, you know, higher risk preferred stock ETF I want to make a generalization to say, one is more or less safe than the other but sure, point is the preferred stock is quasi like a bond or at least more so than a common stock.

Alright, nine o'clock. Well, still a lot of questions. More than I thought. Thank you all. I I thought there'd be like two questions here. Me sitting here, making like like turkey hand signs or something. Uh trying to kill time. We'll wrap this up not too, not too long. I saw your mailback video on ETF versus mutual funds. It seems like ETF is better in mutual fund for passive investment in both regular brokerage and Roth account. So, can you think of any reason why someone can benefit more from mutual funding ETF. the best I can say is check out the video. I mean, that there are potential pros to to mutual fund. One is you always buy it at net asset value.

There's never going to be a difference in bid ask spread because you're not buying it on an exchange like you do with an ETF. So, there's that. Um you can buy partial shares of a mutual fund. You can't always buy partial shares of an ETF. So, like you can invest to the penny in a mutual fund whereas you can't with an ETF. Um some strategies exist only in mutual fund form if you specifically want like an actively managed strategy, You almost certainly have to find it in mutual fund form, not ETF form. If you want I don't know. What else? I guess I'll leave it there for now. Those those are kind of the big ones coming to the top of my mind. So, yes, mutual funds can still make sense.

It also depends where your custodian is like if you if you want a Vanguard Mutual Fund, you probably better to buy that direct at Vanguard because if you buy that through a brokerage account at TV or Schwab or Fidelity, you can but they're going to charge you a trading fee, you know, 20 to forty depending on, you know, 20, 30, 40 buck trading fee per fund per purchase to buy or sell mutual funds there. So, all depends. Um and how I invest in where I have and where clients custody accounts. And for my relatively straightforward buy and hold passive trading style. ETFs work perfectly great both in taxable accounts and IRAs and Roth IRAs.

That doesn't mean mutual funds are bad. It really all depends. Again you know what you're looking for and why and stuff like that. But Any legislative risk of non-qualified deferred comp, non-governmental 447 plans for high-income folks going away such that rather than 15-year payout upon separation, it will all be immediately distributed in tax in one year. I thought I read that a few years ago. They were at risk. Um I have no idea.

Honestly, I haven't heard of this. Anything's possible as you can tell from the last few months attacks legislation, all the stuff that comes out of nowhere, gets kicked around, and then gets, you know, maybe gains team, maybe just dies on the vine, I I really have no idea about this, but good question. Can HSA be opened after year end? Oh, that's a good one. So, can be opened, yes. Can it be funded? Uh that I don't know. So, let let's assume it's January. You open an HSA. I guess the question is, can you fund it for twenty twenty-one still? You know, it's January twenty twenty-two. I don't think so. I could be wrong. Uh I'm almost certain you can't. Here's why I say that. The only reason why you're allowed to fund certain account types after December such as Roth IRAs and IRAs is because their your ability to contribute is based on your income and you don't know your full income necessarily until you actually start doing your tax return in February, March, or April.

That's why the IRS gives you the leeway to make a retroactive contribution, you know, in January, March or April because you need to know your income. HSAs don't have an income-based limit. The only qualifier is you have a a qualifying high deductible health plan Period. Um so that that's not dependent on your income. You don't need to start doing your tax return to know whether or not you can contribute. Either you had the plan during the year or you didn't. So very not 100%, but very confident in saying no. Well you can't open it after you're in but you can't contribute for twenty twenty-one after December 2021. Do you prefer safe bonds such as governmental, municipal, or high-grade corporate or do you believe there's a place for high-yield AKA junk bonds? I worry about a higher correlation between corporate and stocks during decline. man, I'm always hesitant to talk about investments because people may take this as investment advice.

This is not investment advice to anyone listening nor is it a solicitation, a recommendation to buy or sell security. Um my view and this is just my opinion, different people have very different views. I don't personally invest in high-yield AKA junk bonds because they're they're much more correlated to equities than higher grade investment grade, you know, lower risk corporate bond or treasury bonds are. So, what are you really getting with junk bonds? You're squeezing out a little bit of extra coupon, income, sure, because they're higher risk but the price swings are much more like those of equities. So, I don't think junk bonds have a unique enough profile from equities that it's worth the risk. For me, in my approach, the long-term growth assets, long-term risk assets for equities, low cost, low fee, diversified equities. The bonds, they're not really there for because interest rates are so jokingly small Um they're really just there for ballast instability and yes, you know, the bond funds I use throw off one and a half, 1.

6 percent interest per year currently but the price fluctuates some. So, they're not really there to make people out of money. I don't anticipate the bond fund I use is going to get four, five, 6 percent per year on average going forward. I just don't see how that's mathematically possible for interest rates are. But they're there for if and they're off a little bit of interest along the way and hopefully, the prices relatively stable. Um if and when the stock market tanks, economy probably doing poor, interest rates may come down as the Fed tries to rain things in a bit.

Um and which means the bond prices may go up or the situation I'm concerned about which I don't think anyone has a great solution against is staglation and I had this discussion on a call with client today. That's what concerns me. Stagflation it so typically when there's when there's healthy levels of inflation, it's usually good for the economy, for companies. So, stock market usually goes up when when there's healthy inflation. So, stocks are really a good hedge against inflation. But then there's bad inflation. Bad inflation is like stag inflation. Like runaway inflation without good economic growth and health behind it. So what you have is not only do stocks lose value because stocks are going down from poor economy from whatever. Yet inflations are going up. Interest rates are going up. Which means bond prices are going to come down.

That's a bad scenario. That that's when all asset classes basically drop. And that's not good. And noone has a good solution against that. Other than you know, the the fear mongering snake oil salesman that that that got some magical product to say, hey, world's going to end. Go buy this product. I get a fat commission. You're not going to make a lot but guess what? You're not going to lose a lot if when the world ends. Those are the things that people try to sell you in anticipation of stocks that are all time, you know, stock markets all-time high, fake currencies, dollars going to collapse, money's getting printed, blah, blah, blah, world's going to end, go buy my insurance product.

It'll guarantee you no loss, wink, wink. Um where am I going with this? I don't know. What was the question? Man, what am I talking about? So, I I don't know. I I I don't personally use junk bonds. I keep it separate. Equities are for growth, lower risk bonds I have for stability and a little bit of interest but they're not growth assets. They're not going to throw off a lot of money. Junk bonds kind of sit in this weird middle place. They're a bit of both. They're not, they're not different enough from equities to really be safe. They're not what am I trying to say? That that's really it. So, I I don't know.

I don't think they have an enough uniqueness of of a of a spot in there. I don't use em and and yes, there is correlation between especially corporates, even higher-grade corporates, if and when the economy struggles, even the investment grade stuff will come down a bit in price. Uh treasury should go up because treasuries are typically the flight to quality asset when when times get ugly, people flooded the treasuries for safety. So, those prices usually go up but corporate bonds, even the higher rated investment grade stuff. If the economy is hurting, those will come down some in price. So, to your point, yes, they are correlated to some extent with equities.

So, they're not ahead per se. They're just more so ballast and buffer. They shouldn't go down nearly as much as equities. Um yeah. Alright, I'll stop there with that one. How much is that? Oh man, I'm not I'm not getting through all these. Sorry. I may be able. Let's see. See if I can rip through this and stop talking so much. Step up in bases for inherited accounts that transfer ownership to your spouse. Remain invested in same stock and mutual fund.

How is record keeping done whereby the basis is correct? Um The custodian that it's at should do the step up. So, so, if you, if you're, you have a joint account with your spouse, one spouse passes, you inform the brokerage at, hey, my spouse passed as of, you know, give give the day to death. They should take care of the rest. They adjust the basis in their system. Now, the questions may come around, Is it community property? If you're in a community property state, or is it joint property? Because that's going to impact how the step up happens. So, that's a little bit on you and your attorney perhaps and maybe your CPA to figure out if you're in a Property State? Is this in fact community property? In which case it gets a full step up in basis.

Or for whatever reason, did we side to not keep a community property? In which case, they wouldn't get a full step-up basis. So, that all depends but otherwise, the answer is tell the custodian what the date of death was, they should do the rest for you, automatically just basis on their records and the rest should be good. After full retirement age, say at age 67, is it necessary or required to open a separate Roth IRA for Roth conversions or can the converted fund simply come to existing existing Roth the ladder. There's never a need, you never have to open multiple Roth IRAs. You can have just one your whole life and that'll be fine. Now, if for whatever reason, you want to track or delineate between years you contributed or years you converted just because it's easier for you to keep records up in your mind. Sure, you can open open multiple accounts but you never have to, never necessary, never required. Um especially if you're over 59 and a half, you don't have to worry about that five rule, five-year rule around every year you do conversions because you're never subject to 10% penalty at that point.

If you're sixty-five for example, you do a Roth conversion, you'll pay the tax where you convert it, you can turn around and take all that money out the next day with no penalty and no tax because you will have just already paid the tax. So, no, there's no need to open multiple Roths. You can if you want but you don't have to. Alright, wrapping up. Uh getting there. A few more. What are the big health expenses that people worry about later in life? Does it Medicare plus supplement cover a lot and above that is a dairy max out pocket per year? Is it the risk of spending up to the max or is it bigger worry health expenses not covered? Sorry, younger person here at no medicare understanding.

Yeah, a lot of ways can go with this one. So, so yes. Medicare, base Medicare, there's a lot, it does not cover. For example, it doesn't at all cover hearing aids, podiatry, dental, vision, long-term care, a chiropractor or something else big I feel like I'm missing. Did I say vision? I think I said vision. Um it could be something else but it doesn't cover those at all. Even stuff it does cover, hospital visits, basic let's say just basic preventative routine, you know, primary care visits. There's a 80 percent co-insurance, meaning whatever the bill is, you pay 20% of it. Medicare only pays 80%. So even with copays out of pockets premiums, you're still going to owe something with Medicare because Medicare only pays 80% or whatever the bill is.

So, that's why most people often do and should get some sort of supplemental coverage whether it's a meta gap or an advantage plan, that sort of tax on and and some of the rest. Even then, there's still things Medicare doesn't cover. Long-term care, that's a big one. Even if you have a really comprehensive meta gap, you know, supplemental policy, I I don't think any of them cover long-term care or maybe if they do, there's only a very small portion, you know, the first X amount of weeks or something. Um there might be some limited amount of long-term care through part A. I I forget but again, it's not going to cover three years worth. If you have like a multiple year long-term care event. So, that's kind of the big expense people worry about is is the big, what if, long-term care, multiple years, I mean, like around the clock care facility because of, you know, physical issues, dementia, whatever, memory, Alzheimer's. Um that's a big expense.

Some people have enough to take and self fund it or they're going to rely on spouse or other family members for care. So, that drastically cuts down the cost, puts a significant burden on the family members given the care but nonetheless can help saving cost. Uh there's long-term care insurance you can consider. Not cheap and it's expensive to fully insure a multi, you know, multi-year, hundreds of thousands of dollars long-term caravan but not everyone wants a needs coverage for a full event.

They may just get some. They may buy only like two or three 000 of long-term care coverage. Just a little something to take the edge off type of thing but but then fund the rest. So, that's probably the big one but just keep my Medicare again. Base Medicare does not cover hearing dental, vision, podiatry. Now, emergency podiatry like you drop an anvil on your foot and smash it, your hospital coverage will get that but just like, oh, my foot hurts. Let me go to podiatrist. That's not covered under base Medicare and long-term care is not covered. Um good question, whoever was an asset. 401 K with company stock. Over four hundred thousand in growth. Low basis. High tax bracket. Time for NUA. Oh man, I'm not I'm not chiming in on this. Um can't say. Really difficult to say. NUA stands for net unrealized appreciation. you have to look at your it's also a function of the year you do this distribution, what your taxes look like then, how much additional tax you're piling on yourself with doing it. If you got a low basis, it may not be that bad.

Um $400, 000 dollars of unrealized gains. You know, that's still a large amount of gain to pay tax on which is going to be 15 or 20 percent plus the 3. 8% net investment income tax plus state tax anyway. So, all in, the the total amount of tax savings on this may not be substantial, frankly. When when you piece it all together compared to what taxes, you might ultimately pay on this if you just roll into your IRA. So, I'm not saying do or don't do it. I'm just saying anyway is is never a black and white decision or never an obvious answer in in the handful of times that come across it. Just because the savings end up not being as much as as a you know, it it may look on the surface. With $400, 000 of growth, that may be a sizable amount of savings. Um Yeah, but it really depends. It depends how much other tax credit assets you already have. It depends how much income and what tax bracket you're in now when when you do it. So, it's more more to it than CI but worth considering at least but I definitely can't say, you should or shouldn't.

Oh, what is this? Hold on. Hold on. You have until tax filing deadline to fund your HSA, really? Okay, I'm not saying it wrong. I'm saying, I'm surprised by that. It goes against the the reason for why I thought they typically give the you know, tax return deadline to to fund like an IRA or Roth IRA because you need to know your income in order to do it but good to know whoever said this. Um I hope, I'll assume that's accurate. Uh so, whoever asked the question initially, here you go. I'm I'm still surprised it's a nice that they that they do that but that's interesting. Okay. Uh alright, final question of the night. No more questions please. Uh what do you think about using variable universal life or a tax advantage investment? go back and check the video I did with Chris Kirkpatrick on my YouTube channel, Retirement Planning Demystified. That has, he, he's an insurance expert. I'm not.

I I I know enough to have an educated conversation about it. He's the expert. He and I talked for an hour about cash value life insurance as a first and foremost, it's life insurance. It always is, it always will be. The the cash account, the cash value features, the potential growth features, the tax deferral features, our secondary, ancillary benefits of it first and foremost beyond life insurance.

So, anyway, so with that said, sure, the the cash value features can, can play out well, can have cash flow benefits to them, you know, basically, you build up cash value, take a loan against it. It's not really income per se because you're not getting income. You're simply taking a loan from the insurance company and their collateralizing it with your life insurance policy. Not to say it's necessarily bad but these, I think these things are often misrepresented to folks when when they're when they're pitched. So, it's I hesitate to call it an investment because again, it's life insurance first and foremost. Yes, you can accumulate cash value. Yes, you can take that value out or you can take loans against it. Um Sure, it it could work. It's not a slam dunk that that it's always going to be good. You need time for it to bake. Uh you know, there's going to be there there's cost of insurance that are involved because again, first and foremost, it's insurance.

So, you can't compare this apples to apples versus traditional investments because there's this insurance component that cost money. All else equals going to drag on the investment returns. You'd otherwise get inside this policy. So, I don't know but check that video. Chris Kirkpatrick is out of six, seven weeks ago probably. You'll see a lot more thoughts about cash value life insurance. We didn't specifically talk much about variable. We talked about index and whole life. but still I think a lot of the commentary and insight should apply just the same. Alright, that's it. Thank you all. Um happy Thanksgiving. Happy healthy. I will see you again next week. I don't even remember what the topic was for next week but I'll see you again.

We are wrapping up soon. Taking the last two weeks of the year off from doing these lives as we did last year. So, probably only another what? Uh three or four of these left. One more special guest. Steven Jarvis will be coming on in December to talk about how to bridge the gap between your tax return, prepare, and your financial advisor to make sure you're getting ideally getting cohesive, integrated kind of tax planning that that bridges both of those universes. So, that'll be a good one and there's one more mailbag coming up and something else, some other topic, inherited IRAs or inherited R and Bs, something, I don't remember, whatever. Point is, I'll see you again. So, thank you all. Have a happy, healthy, and I will see you in a week. Take care.

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