RETIREMENT MADE EASY

Are you in your sixties and thinking about your impending retirement? What does your dream retirement look like? Will the money you have allocated for retirement help you accomplish those dreams? In this episode of Retirement Made Easy, I share the #1 thing you can do to live the retirement you've been dreaming of. I share how you can define a successful retirement and how to set goals to determine the path of your investments. If you're nearing retirement, this will give you peace of mind about your future. Don't miss it!

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

• [1:51] What do Arnold Schwarzenegger and retirement goals have in common?
• [5:47] How to define a successful retirement (HINT: set goals)
• [12:52] Set goals to live the retirement of your dreams

What Arnold Schwarzenegger can teach us about setting goals

What is your vision for your future? I encourage you to get on YouTube and watch this video: The Speech that Broke The Internet. In this video, Arnold Schwarzenegger delivers one of the best speeches I've heard in my entire life. Arnold defines the rules of success. The #1 rule? Have a vision for your future.

For those of you who are unfamiliar with Arnold, he was an interesting guy. He came to the US from Austria and didn't speak English well. He became a body-builder and won Mr. Universe at the young age of 20. It came with fame and fortune. He then took acting classes and was in a movie called "Stay Hungry" which was a complete flop.

In an interview with Sports Illustrated, he was asked what was next for him. He responded: "I want to be the biggest movie star ever." The interviewer started laughing. But Arnold was 100% serious. So they asked what his next steps were to reach that goal. His response? "All I have to do is do exactly what I did to win Mr. Universe. I have to see a vision and work to create that vision until it comes true." What a powerful statement.

Arnold Schwarzenegger went on to become one of the biggest movie stars in the US. He eventually married a Kennedy and became the governor of California.

How to define a successful retirement: set meaningful goals

Setting goals that are meaningful to you is one of the best things you can do to have the retirement you dream of. It gives you a detailed plan to work toward. What are some ideas for goals?

1. Do you have family? You may want to financially impact your children and grandkids in a meaningful way. Perhaps you want to fund a grandchild's college education so they don't graduate with thousands in student loan debt. According to a Forbes Article, We've reached a record $1.6 trillion in student loan debt. The greatest gift you can give is a college education.
2. Another popular goal is to pay off your home by retirement. Who wants a mortgage payment hanging over their heads? Not only will retirement cost you less without a mortgage payment, but it gives you a sense of freedom as well.
3. If you're accustomed to living on $6,000 a month, perhaps a retirement goal is to maintain the same lifestyle you're accustomed to.
4. Do you want to travel more? Do you have aspirations of traveling to national parks or taking your family on vacations? What about taking your grandkids to Disney?
5. Do you want to plan for your future medical needs? If you may need long-term care, many retiring couples don't want that burden to fall on their children. We can plan for that.
6. Retirement is a time when you can spend more time on the things that you love. Do you want to start a small business in your retirement? Can you turn a hobby or passion into a small business? Do you want to golf or fish in your retirement? Everyone has different things they want to pursue in retirement.
7. Do you still want to work part-time in retirement? I link a great book in the resources that you can read about the new era of retirement.

Write your goals down. If you don't write them down and plan for them, they won't happen. You don't want to think back on your life with regrets.

You deserve to live the retirement you've been dreaming of

Overall, I've found that people are looking for a comfortable retirement without financial worries. You want to do the things that you've always wanted to do that bring meaning and joy to your life, right? A financial advisor can help you make sure you have a sound retirement plan.

After the financial side is taken care of, make sure your retirement brings you joy. Ask yourself this question: If I could spend my time in retirement doing any three things that would bring me happiness, what would they be? Only YOU can answer that question. The next 3 or 4 chapters have blank pages. YOU get to decide how your story will end. After all, you deserve to live the retirement of your dreams.

Resources & People Mentioned

• VIDEO: The Speech that Broke The Internet
• ARTICLE: Student Loan Debt Statistics In 2020
• BOOK: The New Retirementality

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

There's a lot of negativity in the news. It can weigh on your mind and impact how you view your life—and your investments. The turmoil of the current political climate paired with uncertainty in the economy and then magnified by the Coronavirus has us all questioning the future. Where do we stand today?

I believe the path forward is bright. I believe what we have been through can shed light on our future. So in this episode of Retirement Made Easy, I share a look into the past 45 years of investing. If you're looking for an optimistic take on the future, don't miss this episode.

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

• [2:12] What the past 45 years can tell us about the future
• [6:48] The secret to most investors accumulated wealth
• [11:54] The DALBAR study and correlation with investing

What the past 45 years can tell us about the future

I chose to look at a 45-year timespan because 45 years is a lifetime of investing for most people. All of the information referenced in this episode is from J.P. Morgan's Guide to the Markets and the Guide to Retirement. I'm referencing the S&P 500 index as a gauge of the US stock market as a whole.

Since 1975 we've been through wars, terrorist attacks, assassinations, Y2K, hurricanes & tsunamis, the 2008 financial crisis, and more. But since 1975 the global population has grown 80%. The US economy tripled (measured by GDP growth) during a time where we only saw 50% population growth. In 1975, the S&P 500 index was 90. January 1st, 2020 the S&P 500 was 3,257. That is a 4,278% increase in 45 years. That 45 year period has been the greatest accumulation of wealth in this country's history.

The S&P 500 averaged almost 9% per year for 45 years. In 1975, there were only 4 billion people in the world with over half in extreme poverty. Today, there are more than 7 billion people and only 1 in 10 live in poverty. Those people's lives got better and moved into the middle-class.

You can look back and see we have come through a lot. Yet there are so many reasons to be optimistic about the future. In my eyes, pessimism doesn't line up with reality. The world has evolved and things have gotten better. Many lives have gotten better. People have been able to accumulate wealth. Why? Because they've focused on their long-term goals.

The secret to accumulating wealth: Invest for the long-haul

Most investments are meant to be held long-term, and that's what many people forget. All of the successful investors I've known have focused on the long-term rising trendlines and have ignored temporary and short-term discomfort. When the market pulled back and corrected in 2008, they held strong.

Failed investors lost sight of the long-term potential of their investments. It ruined their investment plan. Don't mistake a temporary decline for a permanent loss. If your home value drops 20%, that's a temporary loss. If it burns down and you don't have insurance, that's a permanent loss. I'm not worried about a short-term value reduction of 20% when my home is a long-term investment.

Can you stomach the volatility in the market?

A famous portfolio manager named Peter Lynch said "It's not the head that determines investment success—it's the stomach." Can you stomach the volatility in the market? Can you handle the roller-coaster ride? Being able to handle the volatility in the market determines success. I believe in buying quality investments long-term and sticking with them. If you can't stomach the temporary declines, don't invest aggressively or in volatile assets. You have to decide what side of the fence you sit on.

The DALBAR study further emphasizes WHY long-term investing is necessary

In the DALBAR study, mutual funds averaged a 2.5% return per year from 1999 through the end of 2019. A measly 2.5%. The same study showed the S&P 500 did over 6% per year. Home values went up an average of 3.4% per year during that same period.

Mutual fund investors did worse during that time period—but why? What led to the poor performance? The reason their return was so low is because they were buying and selling when they saw volatility. They weren't investing long-term—but they'd be much better off if they did. Instead of investing in mutual funds, invest in the companies inside them where value can be found—and do it long-term.

The other day, Dave Ramsey said that panic is not an investment strategy. The price of your portfolio may be down 10% and your investments may be in the red, but hold on tight and remember your long-term goals. Don't sell long-term investments in the middle of a recession or a pandemic. Selling your long-term investments at the wrong time says you're giving up on your long-term goals. You must embrace patience and give them the time that they need.

Resources & People Mentioned

• J.P. Morgan's Guide to the Markets
• J.P. Morgan's Guide to Retirement
• DALBAR

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

How can you turn a challenge like a pandemic into an opportunity? How do you thrive in this kind of environment? In this episode of Retirement Made Easy, I share 4 financial opportunities that arose because of the Coronavirus pandemic. It hasn't been an easy time for anyone but taking advantage of these opportunities could potentially help your financial situation. Learn more by listening!

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

• [0:22] The 4 opportunities arising from the Coronavirus pandemic
• [1:57] Opportunity #1: the drop in interest rates
• [5:35] Opportunity #2: A lower tax-rate
• [8:32] Opportunity #3: The CARES Act
• [11:41] Opportunity #4: Investment Opportunities
• [16:29] A great resource for listeners

Opportunity #1: the drop in interest rates

In March 2020 the federal reserve announced an emergency decrease to the federal funds rate. After that, banks started decreasing interest rates. Mortgage lenders dropped their rates drastically. Unfortunately, your money markets and CDs are getting next to nothing in interest. However, millions of Americans are refinancing existing home loans to take advantage of historic low interest rates.

I personally refinanced to a 15-year mortgage in the low 2% range. I saved $250 a month on my payment. They're looking more at credit score than they have in the past (if your credit score is 720 or higher). My mortgage lender got someone a 15-year refinance of 1.95%. Incredible. It's a great time to refinance your debt.

Opportunity #2: A lower tax rate

Those who were laid off or furloughed are finding themselves in a lower tax environment in 2020 (because they didn't have regular earnings). If you're someone who would normally make $100,000 and was furloughed for 6 months, you only have $50,000 of household income. If you're in that position, you could consider converting part of your retirement account(s) to a Roth IRA. You'd be paying the taxes now in a lower tax environment. You only convert up to the exact dollar amount you need to stay in a lower tax bracket (i.e. 12%). Don't convert a dollar more.

Opportunity #3: The CARES Act

One of the provisions in the CARES Act allows you to—if you have to take a required minimum distribution from your 401k or IRA—skip that required minimum distribution. Plus, you won't have to pay taxes on it. It might put you in a lower tax bracket. You can take advantage of this to harvest some gains in your portfolio or do a Roth conversion (it doesn't count toward your RMD).

It also allows those directly impacted by COVID-19 to take a distribution from your IRA—up to $100,000. If you take advantage of that, you can stretch the tax burden out over 3 years. (i.e. you pay the taxes on the $100,00 over three years, even though the money was received in 2020). Check with your financial planner to see if this is something that could work for your situation.

Opportunity #4: Invest when possible

The market declined in the month of March and bottomed out on March 23rd. The S&P 500 was down 31% from January 1st, 2020. The Dow Jones was down 35%. But the market has recovered. But the opportunity was available for anyone to add to their investments during the low. If you buy-in to an investment that follows the stock market and it's undervalued, you're getting a steep discount.

You like buying your groceries and clothing while they're on sale—why not your investments? You can't time the market. We don't know when the next pandemic is coming. But if you're contributing consistently, you can purchase into investments, while they're fluctuating in price and discounts are to be had. Where there are challenges, there are opportunities.

Resources & People Mentioned

• The CARES Act
• 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

I received a call a few weeks ago from someone who wanted to interview financial advisors to help with their investments. This person asked, "Do all of your clients outperform the S&P 500?" This person assumed that outperforming the S&P 500 was the main objective of a retirement strategy. That is NOT the case. It shouldn't be your primary financial goal and certainly isn't the key to a successful retirement. So what is the ONE crucial key—the biggest factor—that leads to a successful retirement strategy? Listen to this episode of Retirement Made Easy to find out!

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

• [1:47] The #1 key to a Successful Retirement Strategy
• [6:07] Why you NEED to write your goals down
• [9:11] How to determine your retirement goals
• [12:29] The market WILL fluctuate: So what do you do?

You NEED to set clear financial goals

The person I spoke with worked with a stockbroker whose expertise was picking stocks that would outperform the S&P 500. That was his value-add. But outperforming the S&P 500 is not a financial goal. You need to be clear about what your financial goals are. If you don't know what a successful retirement looks like, how do you gauge your success? When you're working with a financial planner, all of the planning you do should seek to maximize the probability of accomplishing those goals.

Write your goals down—with pen and paper

It is crucial that you write down your goals on paper. Doing so increases the likelihood of accomplishing them tenfold. A study that tracked Harvard MBA graduates showed that 84% of the graduates had no written goals. 13% had written goals but no plans. Only 3% had written goals and plans. That 3% were taking 10x than the other 97% of the class.

Writing down your financial goals is the #1 key to a successful retirement strategy.

It's not finding the lowest cost portfolio. It's not minimizing taxes. It's not the most well thought out trust. It is having clear and meaningful written goals.

A Winter Olympic athlete was training with other athletes. A development coach asked the athletes who had goals to work toward. They all raised their hands. 85% had written their goals down. But only two of the athletes had their written goals with them. Those two athletes medaled in the next Olympics. Listen as I walk you through a thought exercise on how to determine your retirement goals!

Be prepared: The market WILL fluctuate

These are your financial goals but they're also your life goals. Every decision you make should be made with these goals in mind—in the timeframe you establish. The hardest part about planning is the uncertainty of the world we live in. But your goals will not necessarily change. There will always be something that will change the world around you. So your plan may have to adjust over the years.

The reality is that the market will fluctuate. The economy will have peaks and valleys. The down markets are what throw people off course. I'd like to encourage you: don't lose focus on the reason that you're investing in the first place. That's where people make the biggest mistake. Don't allow a temporary setback to make you lose sight of your goals.

If an olympian sprains their ankle, they don't stop training. They don't give up on their goal of an Olympic medal. Their goal is what gets them through the rehabilitation and the training. Focus your vision on the destination. Know that there will be setbacks along the way and don't allow yourself to be surprised by them. Stick with your long-term plan and keep your eyes on the prize.

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

Chris Hogan with Ramsey solutions recently surveyed and interviewed over 10,000 millionaires—the largest study ever conducted to this date. It was spurred by the research of Thomas Stanley. But the study really digs into what makes millionaires different. How do they become millionaires? What are their habits? How do they spend—or not spend—their money?

Success leaves tracks. If you can figure out how someone else does it and follow in their footsteps, there's no reason why you can't be just as successful. You can replicate success as long as you have the recipe. Listen to this episode of Retirement Made Easy to learn some of the simple habits you can adopt to reach millionaire status.

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

• [3:28] The success habits of millionaires
• [4:51] The primary residence of millionaires
• [6:24] Important wealth-building tools
• [7:45] How many millionaires inherited their wealth?
• [9:21] The education level of millionaires
• [10:04] Other fascinating statistics about millionaires
• [11:58] Wealth-building vehicles responsible for net worth
• [16:46] Get a good retirement plan in place

Millionaires care about debt

According to the survey, the average home size of a millionaire was only 2,600 square feet. Only 4% of millionaires had homes that were 5,000 square feet or bigger. The average millionaire also paid off their house in 11 years. Only 30% had a mortgage balance at all. Only 6% had any type of credit card balance versus 40% of Americans and only 18% of millionaires had a car loan versus 35% of the general population.

Millionaires do not believe in carrying debt—they're looking to build wealth. Debt is not a wealth-building tool. What contributes to their million-dollar net-worth portfolio? Listen to hear some of the top reasons (hint: inheritances are NOT the #1 reason).

Millionaires and inheritances

I had a friend that would point out someone that he knew was a millionaire and would quickly say "Oh, but they inherited all of their wealth." But inheritances aren't the #1 contributing factor to most millionaire's wealth. Inheritances ranked 7th on the list of contributing factors. 79% of millionaires had received no inheritance at all. Only 3% inherited $1 million or more. That's a very small percentage!

What was one of the higher contributing factors? Education level. 87% of millionaires had at least a 4-year college degree or higher. 13% had a PH.D. The studied millionaires were well-educated—but their parents were not. 47% didn't have a parent that graduated from college. Only 1-in-4 came from homes where both parents earned a college degree. What are some other fascinating statistics about millionaires? I share a few more, so keep listening.

Building wealth begins with investing and saving

8/10 of the millionaires surveyed invested in an employer-sponsored plan (401k or 402B). They also invest their money outside of employer plans (like a Roth IRA). Lastly, they all saved money outside of a retirement account.

What should you invest in? What do successful people do? Investing in retirement accounts and growth-oriented investments are the biggest keys to building wealth. Millionaires don't buy lottery tickets. Very few inherit their money. Instead, they are disciplined. 48% of millionaires save 16% or more of their income every month. 30% save 20% or more.

The biggest contributing factor to retiring wealthy is how much you save and invest. That's why I believe you should construct a retirement or financial plan that incorporates your financial goals. You need to have a vision for your future so you can gauge your course, make adjustments, and reach your destination: retire a millionaire.

Resources & People Mentioned

• Everyday Millionaires by Chris Hogan
• The Millionaire Next Door by Thomas Stanley
• The Millionaire Mind by Thomas Stanley
• Dave Ramsey Website

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 do you do if you inherit your Mom's IRA? What if it's a Roth IRA? How does it have to be distributed? What's the best way to handle the resources? In this episode of Retirement Made Easy, I'll let you know how you can handle an inherited IRA (and how the SECURE Act comes into play).

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

• [1:43] How to handle inheriting your Mom's IRA
• [5:27] Should you take a withdrawal?
• [6:30] The impact of the SECURE Act
• [10:01] Is inheriting a Roth IRA different?
• [14:11] Other important factors to consider
• [15:48] Why you can't transfer to your own IRA

How to handle inheriting your Mom's IRA

If your mother passes away and you're the beneficiary of her IRA, where do you start? I recommend that you contact the custodian of the IRA (Fidelity, Charles Schwab, i.e. whatever name is on the statement). You call the 800 number and let them know that your Mom passed away and ask what your next steps are.

They'll likely give you some forms to submit to them with a copy of the death certificate (I always recommend getting a few extra copies of the death certificate—you'll probably need it). When you submit the paperwork, they open a Beneficiary IRA in your name. At that point, the assets are transferred from your Mom's IRA to yours. Be absolutely sure that you're designating beneficiaries for your account.

These forms are tricky and a pain-in-the-neck. If you have a financial advisor, get their help to make sure you're handling it correctly. It often requires a medallion signature or notary stamp. Once it's set up, you'll be able to invest this account however you decide. Since it's an IRA you can change the investments to suit your goals.

How withdrawals from an inherited IRA work

Do you have debt you want to pay down? Maybe you want to pay off your home earlier? An inherited IRA brings more resources to the table that you can draw from to pay off other debt such as school loans, auto loans, or credit cards. You can take a withdrawal from this account, and will simply pay income taxes on the withdrawal(s). If you inherit a Roth IRA, any withdrawals are absolutely tax-free. The nice thing is, if you're under 59 ½ the early withdrawal penalty does NOT apply to inherited IRAs. But if you take it out of your own IRA, you get hit with the 10% early withdrawal penalty.

How the SECURE Act changed everything

If you inherited your Mom's IRA in 2019 or earlier, you'd have what's called a Stretch IRA. You'd have to take required minimum distributions throughout your lifetime. You'd be forced to take money out, 3–4% a year, sometimes a lot higher. That all changed with the SECURE Act.

If you inherit an IRA in 2020, you have 10 years to take all of the money out of the account and pay taxes on it. Anything that's left after 10 years must be completely withdrawn. When and how you distribute it is completely up to you and your financial advisor. Your situation will dictate what makes the most sense.

Other important factors to consider

One important factor to remember is that you may likely inherit other assets as well (checking, savings, CDs, home, etc.). Luckily, as long as your mother listed beneficiaries, the account will NOT go through probate. Secondly, you can't transfer or move your Mom's IRA into your own IRA. They must be kept separate. It's how the government tracks the ten years that you have to remove the money from the IRA.

Listen to the episode as I share some client examples and ideas for how you can distribute the money—or continue to let it grow.

Resources & People Mentioned

• Get my SECURE Act Summary

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 the mistake that 60% of American adults are making? According to a 2019 study by Caring.com, nearly 60% of American adults don't have a will in place. You may be thinking, "Why is that such a big deal?" In this episode of Retirement Made Easy, I share WHY it's a HUGE mistake—and what you can do about it. Check it out!

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

• [1:23] The HUGE mistake that 60% of American Adults Make
• [2:03] Celebrities that passed away without a will in place
• [4:30] Estate planning is all about the details
• [7:13] Why the beneficiary is so important
• [12:34] Get the proper documents in place

Celebrity examples of poor estate planning

Numerous celebrities have passed away without proper wills in place. Jimmy Hendrix passed away in 1970. 34 years later, there was still a court battle happening over his estate. Bob Marley also died without a will. Dozens of claimants have come forward—from the US, Jamaica, and England—asking for an inheritance from his estate. It was left to the courts to vet them. Steve McNair built a house for his mother and it was taken away from her because it wasn't bequeathed to her in his will. Probate court is NOT a quick process for large estates. It can become a nightmare for your family and will cost a fortune—even if you're a celebrity.

Estate planning is all about the details

Years ago there was a news story about a man named David Sandler. He was about to get remarried and had children from a previous marriage. He wanted to make sure his assets were left to his children. So before he got married, his wife-to-be Debbie signed a prenuptial agreement. She waived her eligibility from inheriting the retirement pension.

When David passed away, Debbie and David's children went to court over his estate. David's children had a copy of the prenup. Unfortunately, it wasn't good enough. According to ERISA regulations, only spouses can wave their eligibility to inheriting their spouse's retirement plan.

But Debbie couldn't legally waive the right to his retirement pension because she was his fiance when the prenup was signed. So Debbie got everything and the children got nothing. The details matter.

Why the beneficiary is so important

There was a mother (let's say Nancy) who was married to someone (Gary) for a couple of years before they got divorced. They didn't have children. She got remarried to someone (Tim). Tim passed away before Nancy did. Nancy wanted her estate split evenly between her two daughters. But she forgot about a life insurance policy—it was still listed under Gary. When the daughters discovered the mistake, they brought Gary to court. The probate court decided that Gary got the money.

Beneficiary designations will trump whatever is in your will. Look at who you have listed as the beneficiary of life insurance policies, retirement plans, Roth IRAs, and your 401K. Check and double-check the beneficiaries. Make sure it's right. If you don't make the changes, you can unintentionally disinherit your children. What if you don't have children? You can make your beneficiary a trust, an organization, a church, a charity, or even the Federal government.

I share a cool story about a gentleman in Wisconsin who was creative with his will. Listen to hear what he did!

Get the proper estate planning documents in place

Planning out your will may not be the most exciting thing you can do, but it is important. Because of COVID-19, estate planning attorneys have been busier than ever. People are rushing to take care of the "what-ifs" in life. The pandemic has brought end-of-life planning to the forefront.

What about you? Do you already have the proper documents in place? If so, does it need to be amended? Do you have the proper beneficiaries in place? Does your trust need to be amended? It's a good idea to re-evaluate everything because our personal lives are in constant flux. Don't put your friends, family, or heirs through probate court. Don't be part of the 60% living without a will.

Resources & People Mentioned

• 2020 Estate Planning and Wills Study
• Employee Retirement Income Security Act (ERISA)
• ERISA Regulation Trumps Prenuptial Agreement
• Dennis Valstad's Will

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 happens if Trump gets reelected? What happens if Biden gets elected? How will your investments and retirement be impacted? We are living in an interesting time in history. The Coronavirus pandemic has shaken up our economy, the stock market, the job market, and life in general. On top of that—it's an election year, which historically comes with volatility in the market. So what does the election mean for your investments? Listen to this episode of Retirement Made Easy to hear my thoughts!

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

• [2:27] How will the 2020 US presidential election affect markets?
• [5:25] Presidential Politics and Stock Returns
• [7:10] Stock Market Performance in Presidential Election Years
• [10:17] What if Joe Biden is elected as president?
• [16:50] Should we bail out of the market if Biden is likely to be elected?

How does a presidential election affect markets?

This J.P. Morgan article points out that since 1932 an incumbent has never failed to get reelected—unless a recession occurs during their time in office. The article goes on to say that ¾ of sitting presidents have been reelected. Those are good odds for President Trump, despite the COVID-19 related recession.

Secondly, the S&P 500 volatility has been higher in election years. So we can expect a lot of volatility between now and election time. It's interesting to note that markets often react positively immediately following the election of a Republican president. Their policies are thought of as more market-friendly.

Another article by Rob Arnott and Vitali Kalesnik sought to answer this age-old question: Does the market perform better with a republican or democractic president? The answer? There's no relationship between the political party in power and actual stock market returns.

Stock Market Performance in Presidential Election Years

Michael Townsend found that the 3rd calendar year of a presidential term ends up being positive 82% of the time. Trump's 3rd year was 2019 and the market had a wonderful year. Townsend also points out that market returns are influenced by far more factors than who is in the office (business cycles, corporate profits, and globalization).

The better the company's earrings, the better the market will do overall. If profits exceed expectations, the market will thrive. Companies will shift and pivot no matter what policies are put in place so they can thrive in any environment.

If you look at the stock market in the 3 months preceding the election (Aug-Oct), the S&P 500 predicts the result of the stock market. If it's positive, 87% of the time the incumbent is re-elected. Does the current state of the market and economy point to the president deserving to be reelected?

What if Joe Biden is elected as president?

How will a Joe Biden presidency impact you? Brittany De Lea summarizes Biden's tax plan in this article. Trump's 2017 Tax Cuts and Jobs Act reduced taxes for corporations and individuals. The article points out that Biden's proposal repeals a lot of these changes. The top income bracket would be taxed at 39.6% instead of the current 37%. He also plans to increase corporation taxes from 21% to 28%.

I analyzed these proposals, and I'm strongly opposed to Biden's plan to get rid of the Step-Up in Basis upon death. What is that? Let's say my father bought $10,000 worth of Apple stock 30 years ago. When he passed away, the stock was worth $100,000. Whatever it was worth on the day of his death is my basis. If I wanted to sell it for what it was worth, I would pay no capital gains. If it increases in value since the day of his death, I'd only pay tax on those capital gains—not from the $90,000 increase during my father's lifetime.

Joe Biden would get rid of the Step-Up in Basis. Anyone that inherits money or land would pay a LOT more in taxes. On top of that, the tax policy center estimates his tax proposals would increase federal tax revenue by 4 trillion dollars between 2021 and 2030.

What do I recommend doing with your long-term investments if Biden is elected? How do I feel about market timing strategies? Listen to the whole episode to hear my thoughts!

Resources & People Mentioned

• How will the 2020 US presidential election affect markets?
• Presidential Politics and Stock Returns: Is the Relation Real or Spurious?
• Stock Market Performance in Presidential Election Years
• Joe Biden's 2020 tax plan: The key points
• Time, not timing, is the best way to capitalize on stock market gains
• Step-Up in Basis Definition

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

Are there good reasons to NOT work with a financial advisor? Have people had poor experiences? Is it a complete lack of trust? People have shared their reasoning with me when I find out they've chosen to avoid working with a financial advisor. In this episode of Retirement Made Easy, I share what those 4 common reasons are—and whether or not I think they're valid.

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

• [0:21] 4 Reasons to NOT work with a financial advisor
• [2:27] Reason #1: Investment management is a hobby
• [5:55] Reason #2: The cost is a roadblock
• [7:39] Reason #3: A lack of trust
• [10:10] Reason #4: You don't have the money
• [15:55] The cost of working with a financial advisor

Reason #1: It's your hobby

This is the most popular reason I've heard when someone chooses not to work with a financial advisor. We are in the information age where you can research almost everything online, so some people prefer the DIY route. But remember—information is NOT wisdom.

You need a firm idea of what you're doing before you implement your plan. There are a lot of people who want to manage their own portfolio. If you enjoy it and succeed, that's perfectly fine. It's like a car enthusiast who likes to work on their own car as a hobby. It brings them fulfillment. If you're one of those people, keep doing what you enjoy.

Reason #2: The cost is a roadblock

Some people aren't comfortable with paying for the cost of a financial advisor, whether it be an advisory fee or an hourly fee. It's similar to someone who wants to do their own taxes to save money. If they can do the same work on TurboTax or H&R Block online, they'll do it to keep their expenses low. They're also the type of person that invests in index funds, stocks, or bonds that don't have annual fees associated with them. Many brokerage firms are low cost these days. But I believe paying a financial advisor for their advice, ongoing support, and advocacy can be fairly reasonable.

Reason #3: A lack of trust

Some people are completely unable to trust financial advisors with their money. I spoke with someone who was involved in a business deal where his partner embezzled money from the business. It ruined him financially. As a result of the incident, he'd never trust another individual with his financial affairs.

I understand that it can be hard to trust a stranger or another person to be a financial advocate for your family. I would agree that it's probably not a good idea to work with a financial advisor that you can't trust. But it is possible to find someone who is trustworthy that has your best interest at heart.

BrokerCheck by FINRA is a great resource you can use to find a financial advisor. You can enter their name and find out how many years they've been licensed and if any regulatory actions have come up while they've been in business.

Reason #4: You don't have enough money

I recently spoke with a gentleman that wanted to work with his brother's financial advisor. But he was told the advisor would only work with people managing $10,000,000 or higher. His area of expertise was financial endowments, nonprofits, and corporations. This gentleman was under the impression that only the wealthy could have a financial advisor. This isn't true. Everybody starts somewhere. Everybody's retirement plans are different. Everyone has different resources.

Some financial advisors may have a minimum asset requirement to work with them. But financial advisors can specialize and serve whatever market they prefer. Some advisors might prefer to work with millennials who need help with paying off student loan debt or buying their first home. There are plenty that focus on working with clients 50 years or older who need help transitioning to and through retirement.

All advisors are not the same. Just like there are different specialists with doctors, financial advisors can have different specialties. But there are plenty of competent and qualified advisors that can help you, even if you're just getting started. To hear the full discussion and my thoughts on each reason, give the whole episode a listen!

Resources & People Mentioned

• BrokerCheck by FINRA
• CFP Board

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

There have been numerous changes to the Social Security program since it was created in 1935. Just think: in 1937, life expectancy was age 63—but you had to be 65 to collect Social Security benefits. Two bills have passed since then that have dramatically changed things for the 77 million Baby Boomers that will be retiring. What are they? What impacts did they have? What do I foresee happening with the future of Social Security? Listen to this episode of Retirement Made Easy to learn more!

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

• [1:38] Social Security: What's Next?
• [2:35] The Senior Citizens' Freedom to Work Act
• [4:19] The Bipartisan Budget Act of 2015
• [6:04] Calculate your full retirement age
• [7:30] When you should claim your benefits
• [11:20] What changes are going to happen?
• [14:47] Will my Social Security be taxed?
• [16:49] Survivor benefits: can you switch to your own?
• [18:06] Survivor benefits for divorced spouses
• [19:42] How and when do you claim your benefit?

The TWO acts passed by Congress that were game-changers

The first bill that I'm going to reference is the Senior Citizens' Freedom to Work Act of 2000. This bill eliminated the retirement earnings test for someone who had reached full retirement age. What does that mean? You can collect your full social security benefit and still work as much as you want.

Your benefits will not be reduced because you're working. If you're working and NOT full retirement age but collecting social security, you can earn up to $18,240 per year without a reduction in your benefits. For every $2 you earn over that limit, Social Security will hold back $1 of your benefits.

Before 2015, we used creative strategies to maximize the lifetime social security benefit. When the Bipartisan Budget Act of 2015 was passed, they closed "unintended loopholes'' of social security—two of which were the strategies we used to maximize benefits. The biggest change was if you were born after 1953, you could not file a restricted application. What does that mean? The 2015 act cut down on your choices for claiming strategies when it came to social security.

To find out how to calculate your full retirement age—listen to the episode—and reference the resources below!

When you should claim your Social Security benefits

When should you claim your benefits? Everyone's situations are different. No Social Security benefits are alike. Why? Because the benefits you receive are based on your best 35 working years. Let's say we have a couple with children. The husband has a higher social security benefit than the wife because she took some years off of work to care for their family. Generally speaking, his benefit is going to be higher.

When I'm advising clients when to claim their Social Security benefits, I make sure they keep in mind the survivor benefit. Whenever there is a death, the higher benefit continues and the lower benefit drops off—that's the survivor benefit. So if the husband's benefit is greater, it might make sense to delay the higher of the two benefits when and if possible.

NOTE: Many variables dictate when you should claim social security (age difference, health, plans to work, the dollar amount of differences, spousal benefit, and much, much more).

Social Security: Changes that WILL be coming

Recently, the Social Security Administration completed some research where they determined, by 2035, that the Social Security Trust fund will be bankrupt. Benefits won't stop, but they'll all be reduced by 21%—If Congress makes NO changes between now and 2035. But Congress will come up with some solutions to continue benefits for ongoing generations.

The bottom line is that Congress is going to have to increase the amount of money being paid into Social Security. The working generation is already paying 6.2% of their pay into FICA taxes (with the employer contributing the same amount). That is 12.4% of what they make. 77 million baby boomers are going to depend on that money.

In 1935, you had 40 workers paying in for every 1 recipient. In 2020, we have 2.8 workers paying in for every 1 recipient. By 2035, 2 workers will be paying in for every 1 receiving benefits. Major changes to social security will be coming to keep it solvent and running smoothly. These changes are inevitable. So don't panic and be afraid that your money won't be there.

Will your Social Security be taxed? How do the survivor benefits work? How do you claim your Social Security benefit? I answer some of my most popular Social Security questions in the rest of the episode—don't miss it!

Resources & People Mentioned

• Senior Citizens' Freedom to Work Act of 2000
• The Bipartisan Budget Act of 2015
• Calculate Your Retirement Age
• Get Your Social Security Statement
• Will Your Social Security be Taxed?
• The Future of the Social Security Program

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