RETIREMENT MADE EASY

I recently spoke on the phone with someone nearing retirement who was questioning what their taxes would look like in retirement. Would they be lower? Higher? What strategies can be implemented to keep your tax bill lower? I share some of my favorite strategies in this episode of Retirement Made Easy!

You will want to hear this episode if you are interested in...

• [4:18] Social Security retirement income
• [6:48] Teaser: The most tax-friendly states to retire to
• [7:25] A Roth conversion strategy for Florida
• [10:44] The most tax-efficient retirement income
• [11:33] What to do with pension income
• [13:06] Take advantage of the low rate on capital gains
• [14:05] Use a 529 plan to set aside money for college
• [15:04] Come up with a forward-looking tax strategy

Social Security retirement income

Your taxable income will determine how much of your social security is subject to federal income taxes. Even the high-income earners receiving social security still receive 15% tax-free. They pay federal income tax on 85% of their benefit. Other people only pay taxes on 50% of their social security income. Why? Because their provisional income is far lower.

When you claim your benefit can change your tax planning as well. Many people claim it strategically, knowing that it won't all be taxed at the Federal level (whereas a withdrawal from a 401k or IRA is taxed).

The majority of states don't tax social security income (Illinois is one example). However, Missouri is one of the few states that may tax your social security—but it depends on your income. Is there a way to work around that? Listen to find out!

Retiring to Florida? Wait on those Roth conversions

If you plan on living in Florida for more than 6 months a year, you'll be a Florida resident. I have a few different couples who became Florida residents in their retirement. They wanted to do Roth conversions, so I advised them to wait until they became Florida residents—and didn't have to pay state taxes in Florida. They'll still pay Federal income taxes, but save a chunk of change by not paying state taxes. Will you stay in the same area when you retire? Or move away to a state like Florida, Arizona, or Texas? These things have to be considered when planning your retirement taxes.

Should you limit how much you work in retirement? I share my thoughts, so keep listening!

What do you do with pension money?

If you claim a monthly pension or annuity through an employer, that's taxable income that must be reported. It's why many people prefer to take the lump-sum option because it gives them flexibility. It's not guaranteed taxable income if you take the lump sum and roll it into a 401k or IRA.

If you don't have the option to take a lump-sum payment, find out when your pension kicks in. If you're retiring at 60 but your pension income kicks in at 65, think about doing Roth conversions while you're in a lower income tax environment. You can manipulate the taxable income that you have and utilize all the tax advantages out there.

How do you take advantage of low rates on capital gains? Listen to hear my thoughts!

Come up with a forward-looking tax strategy

You have to constantly look ahead into the coming years. You want to map out year by year what your tax strategy will be. You could move to Florida and start doing Roth conversions. You could make a donation to your church or a favorite charity. You could contribute to a donor-advised fund. As you're planning your retirement income strategy, you have to focus on taxes. You want to optimize your retirement income in the most tax-efficient way possible.

Many people know I'm a Smartvestor Pro with Dave Ramsey and I'm often found on his website as a resource. I agree with so many of his financial principles that help people make good financial decisions and begin to build wealth. So in this episode of Retirement Made Easy, I'll talk about 5 lessons we can learn from Dave Ramsey. I'll also answer questions from two listener emails. Don't miss it!

You will want to hear this episode if you are interested in...

• [1:27] What can we learn from Dave Ramsey?
• [2:58] Lesson #1: The #1 indicator of people who retire wealthy
• [6:03] Lesson #2: Sticking with the basics
• [7:39] Lesson #3: Stay away from credit card debt
• [10:01] Lesson #4: Be intentional with your money
• [11:55] Lesson #5: Live like no one else
• [13:44] Listener email #1: A "thank you" from Jerry
• [16:26] Listener email #2: Some "hate mail" from John

The #1 indicator of people who retire wealthy

What is the #1 indicator of people who retire wealthy? It's how frequently and how much someone saves or invests money for retirement. Dave Ramsey recommends people invest 15% of their gross annual income. All you have to do is save 15% of your gross income. That's it. What else should you do to ensure you retire wealthy? Make sure all of your debt is paid off and you have an emergency fund of 3–6 months of living expenses.

You have to stick to the basics

Don't try to get lucky with speculative investments. Stick with proven investment methods (like growth mutual funds). Dave Ramsey conducted the largest survey of millionaires in this country. 80% of those surveyed said that their primary investment vehicle was a 401k or employer-sponsored retirement plan. If millionaires are finding success with this method, so can you. Why try to do something different? Do what successful people are doing.

Stay away from credit card debt

The same study found that 40% of the general population had outstanding credit card balances. They're paying 10–20% interest to a credit card company. Even more interesting, of all the millionaires surveyed, only 6% had outstanding credit card debt. "But Gregg," you might say, "Credit cards can give you free points and help you build credit. If you pay them off every month, you won't get charged interest." In theory, that sounds great. Unfortunately, 40% of the population has a running credit card balance. That's why Dave Ramsey will never recommend using credit cards.

Be intentional with your money

Dave Ramsey offers a free budgeting app called EveryDollar. He recommends sticking to a budget so you know where your money is going. 90% of the millionaires he surveyed shop off of a grocery list. This goes to show that you have to be intentional and disciplined in the simple areas because they bleed over into the rest of your life. Dave Ramsey will always tell you to pay cash for a car and other large expenses—and I advise the same.

Live like no one else so you can live—and give—like no one else

Dave Ramsey says this over and over again. What does he mean by that? You can learn how to be happy living below your means. You can get a plan in place for your future to save and stay out of debt. If you stick to your plan and stay disciplined, you'll wake up and see the wealth that you've built. You'll be debt-free and your wealth will carry you for 30–40 years. You can give to charitable organizations and take care of your loved ones.

Listen to the whole episode for segment #2 that covers some listener questions (HINT: It's about why I don't give specific investment advice).

Resources & People Mentioned

• The National Study of Millionaires
• The #1 indicator of people who retire wealthy
• The EveryDollar app

Connect With Gregg Gonzalez

• Email at: [email protected]
• Podcast: https://RetirementMadeEasyPodcast.com
• Website: https://StLouisFinancialAdvisor.com
• Follow Gregg on LinkedIn
• Follow Gregg on Facebook
• Follow Gregg on YouTube

Subscribe to Retirement Made EasyOn Apple Podcasts, Spotify, Google Podcasts

What two things should you avoid purchasing in the near future? Why should you wait? In this episode of Retirement Made Easy, I talk about real estate, annuities, and CDs. Why do they all make poor purchases right now? Listen to this episode to learn more!

You will want to hear this episode if you are interested in...

• [2:58] Thing #1: Avoid buying real estate
• [4:48] Why home prices have skyrocketed
• [8:09] Thing #2: Avoid purchasing CDs and Annuities
• [11:48] Annuities: the good, the bad, and the ugly

Thing #1: Avoid buying real estate

There is a real shortage of supply of housing. The competition is so ridiculous that it's driving the prices of homes up 10–30% more than the asking price. People are even paying 10–30% more than what homes are appraising for. It's a bad idea to pay 10–30% more than the house is worth. Lenders are pointing out that people are going to regret making these large purchases as the inventory of homes rises in the next 12–24 months. Home prices will start to level out again.

Why are real estate prices skyrocketing?

What can the current real estate market be attributed to?

The supply shortage. Lumber manufacturers were shut down for months because of COVID, the cost of lumber skyrocketed, and building a new home became ridiculously expensive. This places all of the demand on the used home market, and the supply just can't keep up with the demand. Not only that, but some people aren't putting their homes up for sale because they're worried they'll have nowhere to go when it sells.

The other factor is that interest rates are low. Many people are getting approved for a home loan they wouldn't otherwise be approved for. You're better off waiting so you don't have to pay 30% than the appraised price on a home. It doesn't financially make any sense. Wait until the inventory of homes increases and the price of lumber decreases. The Fed plans to keep interest rates low for the near future, so there is still time.

Thing #2: Avoid purchasing CDs and Annuities

Why should you hold off on these purchases? I always recommend that you go to Bankrate.com to gather information. Simply click on "Banking" and "CD Rates" or choose "5-year CD Rates" to get an idea of what a 5-year CD would pay. Right now, a 5-year CD would pay in the area of a whopping 1%. I don't like seeing someone lock their money into a CD or annuity while interest rates are at all-time lows. What you earn is a lot less than if interest rates were a lot higher. We expect rates to be a lot higher in the future—so wait.

Now is also not the time to put money into an annuity. Insurance companies move the interest rates down as interest rates go down. March 15th, 2020 is when the Fed cut interest rates to zero. Banks and insurance companies cut the interest rates they were paying a lot lower, immediately. They aren't in the business of losing money. Insurance companies base annuities off the 10-year treasury, which plummeted to 0.05% interest in March 2020.

Annuities: the good, the bad, and the ugly

I think annuities tend to be misrepresented and confusing because they can be complex. Annuities are offered through life insurance companies in the form of a contract. They send you a booklet that explains the annuity. Another disadvantage is that they're meant to be long-term investments, ranging from 5–15 years. If you don't hold the annuity for that length of time, you have to pay a surrender penalty.

Annuities can also be very expensive. You can add riders that add extra expense (such as a lifetime income benefit, return of principal benefit, or even a death benefit). The more bells and whistles you add, the higher the price will be.

You need to understand what you're getting (or what you own) and why it's appropriate for you. Do you want lifetime income? An annuity can act like a pension that's guaranteed by the insurance company. That means you need to understand the longevity and the strength of the insurance company. Fixed annuities can pay an interest rate, almost like a CD. You might be able to earn higher interest than a CD.

What is an advantage of annuities? Most offer tax deferral. So as the money grows in the annuity, it is all tax-deferred. Annuities are becoming more and more popular inside of banks.

If you do want to make an annuity part of your overall portfolio, make sure you understand what you're getting yourself into. Annuities are a tool—you just need to make sure the tool is appropriate for the job. Learn more about the topic in this episode of Retirement Made Easy.

Resources & People Mentioned

• Bankrate

Connect With Gregg Gonzalez

• Email at: [email protected]
• Podcast: https://RetirementMadeEasyPodcast.com
• Website: https://StLouisFinancialAdvisor.com
• Follow Gregg on LinkedIn
• Follow Gregg on Facebook
• Follow Gregg on YouTube

Subscribe to Retirement Made EasyOn Apple Podcasts, Spotify, Google Podcasts

What is causing inflation concerns? What does it mean for the average retiree? What should you be doing to counter inflation? The cost of living is higher than ever. Unfortunately, inflation is here to stay. You need to be able to survive and pay for the increased cost of living. So you have to plan for it. What is the best way to do that? Learn more in this episode of Retirement Made Easy!

You will want to hear this episode if you are interested in...

• [2:41] Inflation: the cost of living
• [4:53] How inflation can be measured
• [7:47] Why inflation is higher than anticipated
• [13:31] The economy is playing catch-up
• [15:03] The biggest mistake people make

What inflation means for you

When people hear the word "inflation" they just think it's an economic term that doesn't apply to them. That couldn't be further from the truth. Inflation is the rising cost of living. Over time, goods and services will cost more.

Inflation can be measured in a couple of different ways. The most common is the Consumer Price Index (CPI). The CPI measures a basket of goods that a household may buy, housing costs, and energy costs. In April 0f 2021, it increased 4.2% from April 2020. The average household's expenses went up 4.2%—which is a lot.

Did you get a 4.2% increase in earnings during the same time? Unlikely. Many retirees live on a fixed income, such as a pension. The most dangerous retirement risk is trying to use a fixed income for 30+ years of retirement. Your cost of living will double if not triple. It's financial suicide.

Your electric bill, utilities, groceries, healthcare, etc. all rise 2–4% every year. But your income stays fixed. The huge challenge is to come up with a retirement income that exceeds the cost of living. People are finally starting to see the impact on their lifestyle. It's becoming so expensive to live and pay bills. You have to be aware of this. It won't change, it will always be there.

Why is inflation higher than anticipated in 2021?

We currently have record-low interest rates because the FED cut interest rates throughout the pandemic. Doing this results in higher inflation and a higher cost of living. Throughout the pandemic, many factories and manufacturers shut down production because of COVID. It's a supply and demand issue.

Brendan Murray, in the article "The World Economy is Suddenly Running Low on Everything," said that everything from copper to cardboard to coffee is running low. A cardboard shortage restricts packaging, which can impact numerous products. These items are in low supply but high demand, which increases the price of everything. Hefty has already increased the price of their garbage bags a 3rd time in 2021 because the cost of plastic, rubber, and chemicals have all increased.

Companies are also struggling to hire because so many people are collecting unemployment on the sidelines. An insufficient workforce, expensive supply, and demand that's through the roof lead to the necessity of increasing prices. They're having to offer hiring incentives such as bonuses and higher wages which will increase prices even more.

The economy is playing catch-up

Overall, the economy is in catch-up mode. Manufacturers are trying to get back up to speed. Until lumber yards get their supply up to meet the demand, the prices won't come back down. Who will suffer the most? The consumer. The consumer picks up the tab for all of this. Grocery bills will go up. Trips to Home Depot or Lowers will increase.

While you're working, you need to be in a profession that can allow you to keep up or stay ahead of the rising cost of living (through raises, bonuses, promotions, etc.). Inflation is here to stay. Your earning ability needs to keep pace—including your retirement accounts.

The biggest mistake people make

Many people have bonds or CDs paying 0.05% to 1%. They're trying to protect their principle. The problem is the purchasing power of that $10,000 is buying less and less every year. You're slowly going broke. The goal is to have a retirement income that keeps up with the rising cost of living. Social security doesn't keep up well. You can't trust that it will keep up step by step with inflation.

Because social security only represents 30–40% of your retirement income, you have to come up with the rest. It has to come from pensions, retirement accounts, rental income, or business income. I have some clients with pensions that are fixed monthly pensions. They don't have inflation protection. Your benefit will not increase with the cost of living.

What should you do? Listen to the whole episode for my recommendations!

Resources & People Mentioned

• The World Economy is Suddenly Running Low on Everything

Connect With Gregg Gonzalez

• Email at: [email protected]
• Podcast: https://RetirementMadeEasyPodcast.com
• Website: https://StLouisFinancialAdvisor.com
• Follow Gregg on LinkedIn
• Follow Gregg on Facebook
• Follow Gregg on YouTube

Subscribe to Retirement Made EasyOn Apple Podcasts, Spotify, Google Podcasts

I worked with my life coach and business coach to come up with a solution to help you plan the retirement of your dreams: the retirement blueprint. A retirement blueprint is something that very few financial planners talk about, but it's absolutely crucial to the success of your retirement. It helps you plan for the retirement of your dreams. If you're ready to design your retirement—and not just retire by default—check out this amazing resource. Listen to this episode of Retirement Made Easy to learn more!

You will want to hear this episode if you are interested in...

• [2:38] You need a vision for your future
• [5:19] Setting short-term and long-term goals
• [7:37] Why you want to write down your goals

Why you need a vision for your future

Warren Buffet and Bill Gates are very good friends. When they were at a dinner together, someone asked them what the #1 key to success was. They both said "vision." If you don't have a vision, you don't have a chance. You'll never be as successful. Planning for the next chapter of your life starts with coming up with a compelling vision for your future. What are your goals and values? What will give you purpose?

Some people love retirement and they're enjoying every part of it. Other people haven't been able to adapt and are living a life without meaning and purpose. They're not accomplishing the goals they've always dreamed of. They may be struggling emotionally and psychologically. This blueprint for the retirement of your dreams would be extremely beneficial to you.

Why the blueprint to a dream retirement?

This blueprint walks you through both short-term and long-term goals. A study found that the people who write down their goals—with pen and paper—enhanced the probability of achieving those goals by 1,000%. The blueprint also includes questions that you should walk through.

One section includes three questions Dr. Frank Luntz asks to learn what's most important to someone that he's never met. He asks you to imagine life at perfection:

1. Where are you?
2. Who are you with?
3. What are you doing?

I ask my new clients these questions to better understand them and get a sense of who they are. Go ahead and ask friends and family members those three questions. It will tell you so much about them. Listen to learn some other questions that the retirement blueprint includes that are eye-opening.

Write down your goals and get a plan in place

A study done by Harvard MBA students in 1979 looked at graduates. It asked them: Do you have written goals with a plan of action to accomplish them? Only 3% had their goals written with a plan to achieve them and 97% had nothing. This study tracked these students for 10 years. The 3% who had written clear goals were making 10x the income of the other 97% of students.

This blueprint can enhance the enjoyment you experience in retirement and even your mental and spiritual health. Don't like back on your life with regret and say "I wish I would have." Planning and being intentional helps you find those things that will bring the most satisfaction to your life in retirement. You want to be able to say, "I'm glad I did."

Resources & People Mentioned

• Blueprint to a Dream Retirement
• Dr. Frank Lutz

Connect With Gregg Gonzalez

• Email at: [email protected]
• Podcast: https://RetirementMadeEasyPodcast.com
• Website: https://StLouisFinancialAdvisor.com
• Follow Gregg on LinkedIn
• Follow Gregg on Facebook
• Follow Gregg on YouTube

Subscribe to Retirement Made EasyOn Apple Podcasts, Spotify, Google Podcasts

Should you roll over your old 4101k into an IRA? Or should you just leave it where it is? What are the advantages and disadvantages? What should you watch out for? If you've recently left an employer, you may be questioning what you should do. So in this episode of Retirement Made Easy, I'll shed some light on the subject. Hopefully, you can take this information and make a better decision for your retirement.

You will want to hear this episode if you are interested in...

• [4:00] Should you roll over your old 4101k?
• [7:06] Option #1: Leave your 401k where it is
• [10:48] Option #2: Roll your 401k over to an IRA

Rolling over a 401k

The Employee Benefit Research Institute conducted a study in 2018 that found that 41% of 14.8 million people cashed out their 401k and paid the taxes and penalties that applied when they left their job. In most cases, you have a 10% early withdrawal penalty and federal and state taxes. It's painful to hear that 41% of people cashed out their 401k's. I think you should leave it where it is—or roll it over into an IRA. Let's dissect those two options.

Option #1: Leave your 401k where it is

Many 401ks are cost-effective and your fees might be lower if you leave it at your former employer. If low fees are important to you, that might be an advantage. But the #1 reason I'd leave it? If I was separating from my old employer after between age 55 and 59 ½. A special rule dictates that you can leave those funds and withdraw them without a 10% early withdrawal penalty.

So if you retired at age 58, you could take distributions from your 401k without being penalized. If this same person rolled over the 401k into a self-directed IRA, the penalty would apply. Once you reach 59 ½, the 10% penalty to withdraw from an IRA no longer applies. Lastly, if you have a loan from your 401k, you only get 60 days to pay it off when you leave your employer. And, you can't roll it into an IRA without paying it off first.

Option #2: Roll your 401k over to an IRA

The #1 reason to rollover your 401k is because it gives you more control. You can invest it however you want, whereas most 401ks have a list that you must choose from. Having a wide investment selection is a huge advantage. Secondly, it gives you the ability to work with a financial advisor. If you have a question about your 401k, you dial an 800-number and talk to someone who knows nothing about you and your retirement goals. You don't get a personal touch.

The next advantage of a rollover is the ability to consolidate your accounts. Many people have an old 401k, an IRA, and it equals too much going on. It's hard to make sure they're all invested properly. But if you roll over your 401k into an IRA, you can consolidate your accounts.

You can also bring a Roth IRA into the picture. Not many 401ks offer a Roth 401k. Having that available can be valuable. Lastly, with many 401ks, they only allow you to list a single primary beneficiary. You can't list contingent beneficiaries—but a rollover IRA allows you to.

Having choices is the most important thing that I can think of. If a bagel shop has 29 different varieties, I can find something I like. If they only have three options, I might have to settle for something I don't want. You want a portfolio that's aligned with your goals. Which one of these options does that for you?

Resources & People Mentioned

• Employee Benefit Research Institute

Connect With Gregg Gonzalez

• Email at: [email protected]
• Podcast: https://RetirementMadeEasyPodcast.com
• Website: https://StLouisFinancialAdvisor.com
• Follow Gregg on LinkedIn
• Follow Gregg on Facebook
• Follow Gregg on YouTube

Subscribe to Retirement Made EasyOn Apple Podcasts, Spotify, Google Podcasts

When should I retire? How much money do I need? Can I afford to retire?

Are these questions rolling through your mind? In this episode of Retirement Made Easy, I share some statistics about retirement savings and what various experts think you need. I share some resources to help you determine where you should be, and what I think you should base your retirement goals on. Check it out!

You will want to hear this episode if you are interested in...

• [3:25] The Retire Inspired Quotient
• [5:50] Fidelity's rule of thumb for retirement
• [8:10] The average 401k balance
• [11:38] An example where the rule of thumb doesn't fit
• [13:33] What you need depends on retirement goals

The Retire Inspired Quotient

Dave Ramsey has a YouTube video entitled, "How Do I Know When I Have Enough Money to Retire?" In this video, Dave does a good job explaining that retirement isn't one-size-fits-all. What you want in retirement is unique to you.

What lifestyle do you want in retirement? Do you have goals to travel and see the world? You might need a larger nest egg. Rules of thumb aren't for everyone but are a great place to start. Dave Ramsey's "Retire Inspired Quotient" helps you determine the number you'll need to have saved to retire comfortably. The RIQ tool is free and helps you get off to a great start.

Fidelity's rule of thumb

Fidelity's rule of thumb is that by age 67, you need to have saved 10x your annual income. If you make $50,000 a year, you need to have $500,000 saved to retire. You need to have 8x your income saved by age 60. This sounds a lot easier than the $1 million people think they must use as the benchmark. But the problem is that you can't always choose when to retire. Your health can dictate when to retire. So can job availability. There is certainly age discrimination in this country, and opportunities can be slim pickings.

The average 401k balance by age

NerdWallet looked at Fidelity's investment report when they wrote their article, The Average 401k Balance by Age. According to this article, in 2018, the average balance was $103,700. The median was just $24,500. People are very behind on saving for retirement. Looking at the age band, of ages 60–69, the average 401k balance was $195,500 and the median was only $62,000.

The Bureau of Labor Statistics published a study in 2020 that said the average American annual earnings was $51,168. If a 60-year-old needs $400,000, but the average person doesn't have that much saved—it's a problem for a lot of people. Do you have money saved elsewhere? Were there other accounts not included in the total?

Missouri teachers break the mold

Missouri public school teachers have one of the best pension systems in the country. Their pension makes up 70%+ of their salary when they were teaching. Teachers don't typically have 401ks, but they have 403B plans.

Fidelity's retirement formula wouldn't work for a teacher because they depend on a pension—not a 401k. They contribute 14.5% of their salary toward their pension plan. Other workers in the public sector—like firefighters and police officers—will have a nice pension they've been paying into for years to use in retirement.

You might not need 10x your salary, you might need 12–14x your salary. The retirement of your dreams will dictate what you need to retire. Listen to the whole episode for my full thoughts on when you can retire.

Resources & People Mentioned

• Dave Ramsey YouTube Video
• The Retire Inspired Quotient
• Fidelity's article on Retirement
• The Average 401k Balance by Age
• U.S. Bureau of Labor Statistics

Connect With Gregg Gonzalez

• Email at: [email protected]
• Podcast: https://RetirementMadeEasyPodcast.com
• Website: https://StLouisFinancialAdvisor.com
• Follow Gregg on LinkedIn
• Follow Gregg on Facebook
• Follow Gregg on YouTube

Subscribe to Retirement Made EasyOn Apple Podcasts, Spotify, Google Podcasts

What is long-term care insurance? Who needs it? How many types are there? How does it work? In this episode of Retirement Made Easy, I want to give you the information you need so YOU can determine whether it's a good fit for you now or in the future. If long-term care is something you've been worried about, don't miss this episode!

You will want to hear this episode if you are interested in...

• [2:20] Is long-term care insurance necessary?
• [3:51] Option #1 for long-term care insurance
• [8:56] The 6 activities of daily living
• [10:37] The big mistake that many people make
• [12:53] Option #2 for long-term care insurance
• [14:45] A surprising fact about long-term care insurance
• [16:27] Some employers offer group long-term policies

Option #1 for long-term care insurance

The first type of long-term care insurance available—that you must medically qualify for—is similar to life insurance. You pay a monthly or annual premium and once you need care, you start receiving the benefits of the policy. But what if you never use the care you've paid for all these years?

Let's say someone at age 60 buys the policy and it costs them $3,000 a year. They pay it for the next 20 years for a total of $60,000 total. If they die of natural causes without needing the care, the insurance company keeps the premiums and the policy is null and void. That's a lot of wasted money.

If this person's health went downhill and they needed care, they can put a claim on their policy. The average policy will pay up to $5,000 per month for nursing care or assisted living. The benefits are also tax-free.

The six activities of daily living

Most long-term care policies have requirements you must meet to start receiving benefits, usually based on being unable to complete at least two of the six activities of daily living. What are they? Bathing, dressing, eating, transferring, toileting, and continence.

My late grandfather had Parkinson's disease. He was unable to dress and his balance was poor, so transferring was out of the question. He would qualify to receive benefits from this policy. Most policies will pay out on average 3–5 years. If you want to increase the benefits to seven years, it will increase your monthly or annual premium.

What is the big mistake that most people make when purchasing one of these policies? Listen to find out!

Option #2 for long-term care insurance

If you don't want to pay a premium for 20 years—and get nothing out of it if you don't use the care—another option exists. It's a hybrid policy that combines long-term care and life insurance. Your premium will be higher BUT there will be a death benefit in most of these policies. So if you paid in $60,000, there may be a $60,000 death benefit that is given to your spouse or another beneficiary. The hybrid policy gives you some value if you don't use the care.

Who pays more: men or women?

If you take a male and a female whose health is exactly the same and purchased the same policy for both—the premium is higher for women. Why? Because on average, women spend more money on long-term care than men do. According to the American Association for Long-Term Care, roughly ⅔ of the $6.6 billion paid out to long-term care policyholders was for the care of women. 75.7% of residents in assisted living communities are women. Women spend twice as much time needing care as men do.

What are other options for long-term care? When should you start looking for one of these policies? Listen to the whole episode to learn more!

Resources & People Mentioned

• Long Term Care Insurance Industry Pays $6.6 Billion In Benefits
• American Association for Long-Term Care Insurance

Connect With Gregg Gonzalez

• Email at: [email protected]
• Podcast: https://RetirementMadeEasyPodcast.com
• Website: https://StLouisFinancialAdvisor.com
• Follow Gregg on LinkedIn
• Follow Gregg on Facebook
• Follow Gregg on YouTube

Subscribe to Retirement Made EasyOn Apple Podcasts, Spotify, Google Podcasts

Should you consider gold as an investment? In this episode of Retirement Made Easy, I address having gold as part of your portfolio. I'll share facts, figures, and why I think gold should NOT be part of a long-term investment portfolio. I would actually exclude it if at all possible. Why? Find out in this episode!

You will want to hear this episode if you are interested in...

• [2:50] Gold is simply a commodity
• [5:05] Is gold a hedge against inflation?
• [8:15] Gold versus the S&P 500
• [10:45] Commodities are taxed differently
• [13:35] Better investments than gold

Gold is a commodity

Buying gold is buying an object. Beanie Babies were a commodity when I was growing up. People thought they could buy them at a low price and sell them for 10x what they paid. They thought they'd get rich quick. People treat gold the same way. They think gold will double in price and they'll get rich. But the only way you can make money is if the price per ounce rises.

Let's say Gold is at $1,700 an ounce right now, if it doubled, you could sell it for $3,400 an ounce. Additionally, gold doesn't pay a dividend. It's not paying you any interest while you hold it. You can't make money off of it unless you sell it.

Is gold a hedge against inflation?

Many people think that gold brings stability to your portfolio or that it's a hedge against inflation. But what does the past tell us about gold? An ounce of gold was $850 in 1980. Today, that same ounce of gold sells for $1,700—so it doubled in 40 years. But what is the annual rate of return? 1.75% over 40 years. That's not very good.

According to OfficialData.org, In the last 40 years, the annual average rate of inflation was 3.21%. The gold you were holding was not a hedge against inflation. You lost money. If the cost of living went up, you need your investment portfolio to be matching that increase. Gold doesn't cut it.

Gold versus the S&P 500

What did go up more than 3.21% annually over the last 40 years? The S&P 500 averaged a return of 11.83% per year. That's over 10% more per year than gold (at 1.75%). The S&P 500 represents almost 800% of the US stock market. If you had invested $100 in the S&P 500 in January 1980, it would be worth $9,788. Your $100 invested in gold would only be worth $200 now. The S&P 500 or mutual funds also pay dividends. Gold pays nothing.

A rental property brings in income as long as you have tenants paying you monthly. Gold won't reward you for holding it. It's like buying real estate that you can't rent out. You make money in real estate when you buy—if you buy at a good value. You only make money when you sell it at a higher price. Unless you buy gold at a low price per ounce, you may not be able to sell it and make a profit. Gold makes beautiful jewelry, but it's not an investment.

What are some other huge negatives of buying hold? What would be a far better investment? Listen to the whole episode to learn more!

Resources & People Mentioned

• Official Data
• Macro Trends

Connect With Gregg Gonzalez

• Email at: [email protected]
• Podcast: https://RetirementMadeEasyPodcast.com
• Website: https://StLouisFinancialAdvisor.com
• Follow Gregg on LinkedIn
• Follow Gregg on Facebook
• Follow Gregg on YouTube

Subscribe to Retirement Made EasyOn Apple Podcasts, Spotify, Google Podcasts

If you're on your journey toward retirement, you're either on track, behind, or ahead of schedule. Do you know where you're at? Are you only a few years from retirement, but stuck having to work longer than planned? If you feel behind, how do you catch up? Lisa—a listener of the podcast—recently asked what I would recommend for someone who felt like they weren't on track to retire on time. It's easier to find out now and fill in the gaps than having to delay retirement. So in this episode of Retirement Made Easy, I share how I would handle this situation. If you're worried you've veered off course, don't miss it!

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You will want to hear this episode if you are interested in...

• [0:23] Are you on track to retire on time?
• [4:10] Step #1: Set a projected retirement date
• [6:10] Step #2: Determine what you need to save
• [8:28] Step #3: Get a plan in place
• [11:25] How much do you need to save?
• [15:21] Do you have competing goals?

Step #1: Set a projected retirement date

You need to set parameters around "someday." When do you want to retire? At age 70? Or 72? Or early, at age 60? You need to put a retirement date goal in place that is realistic and achievable. I want you to write it down. Why? Doing this increases your odds of achieving the goal by 1,000%. Once you have a projected retirement date/age, you need to move on to step #2.

Step #2: Determine what you need to save

How much will you need to save to retire? How do you come up with that? Dave Ramsey has a free retirement questionnaire that can give you a ballpark idea of where you need to be. A financial planner can also help you determine how much you'll need to have saved to afford to retire. That is dictated by the retirement lifestyle that you want. Do you want to maintain the same lifestyle? Or will you spend more in retirement?

Step #3: Get a plan in place

Let's say you're at a mall and you see a sign that says "You are here" but you want to go to Macy's. So you have to determine what route you'll take to get to that store. Will you take an elevator or escalator? Or would it be smarter to get your car and drive to the other side of the mall?

Retirement is an income equation. You want to have enough money to live on in retirement. For most people, you'll have income from social security, a pension, and your retirement savings income. If you're debt-free, you can live on a lot less money. Your social security and pension would be your main income sources. If they're $3,000 a month and you need $5,000 a month, that leaves $2,000 from your retirement savings to fill that gap.

What assets in your retirement savings will produce an income of $2,000 a month?

How much do you need to save?

What you need to save depends on the lifestyle you want to have and what your situation is. Will your house be paid off? For the person that wants to live on $10,000 a month in retirement, they'll need more saved for retirement.

But most people don't know where they need to be—or if they're on track. When someone tells me they're behind, I always ask how much they're saving or have been saving. Did they make saving for retirement a priority? If you feel behind, can you pay off debt? Increase your contributions? Change your investment strategy?

Do you pay off the house first? Or allocate more money toward retirement? Do you help your kids or grandkids with college? Or open a Roth IRA? You need to focus on your priorities, then determine if you're on track or behind.

The bottom line? If you feel like you're behind—you need to do something about it. If you feel behind, meet with someone who can help you get back on track.

Resources & People Mentioned

• Dave Ramsey's R: IQ

Connect With Gregg Gonzalez

• Email at: [email protected]
• Podcast: https://RetirementMadeEasyPodcast.com
• Website: https://StLouisFinancialAdvisor.com
• Follow Gregg on LinkedIn
• Follow Gregg on Facebook
• Follow Gregg on YouTube

Subscribe to Retirement Made EasyOn Apple Podcasts, Spotify, Google Podcasts