The Fiscal Blueprint: Retirement Built Right w/ Financial Coach Jeff Montgomery

Practical Planning segment: What is an Annuity? An annuity is a contract between you and an insurance company in which you make a lump-sum payment or series of payments and, in return, receive regular disbursements, beginning either immediately or at some point in the future.

I believe annuities are the most misunderstood retirement vehicles and there are many misconceptions about how these work. We cover the most common types of annuities in this episode, as well as the pros and cons of each one.

Some history: In ancient Rome, Roman soldiers were paid annuities as a form of compensation for military service.

Pay attention to where the guarantees are coming from, they are backed by the claims-paying ability of the company. So, make sure you choose a highly rated company

A major source of confusion is that they can be IRA and Non-IRA accounts. Think of IRA as a vehicle that can hold different types of investments or products such as, stocks, bonds, annuities, etc.

Common characteristic of all annuities… the growth is tax deferred. So, in an IRA it's already tax deferred. But a non-qualified annuity (i.e. let's say you have some cash lying around, we call this lazy money') the interest earned or growth is tax deferred.

Modern Day: 3 major types. I titled this the good, bad, and the ugly. That's probably not fair in recent times. Probably more like, worst, better, best. The 2nd two in my opinion MAY have a place in an overall Retirement Plan. Not the entire plan, but a place for some.

(10:00) Variable Annuities (VA's): The 'worst.' Companies have evolved over the years. Pros:

• can grow over time
• sub-accounts
• in the market (can also be a con, because the account value can drop too!)

Cons:

• Since it's in the market, it's not safe
• high fees!!

Not all VA's are exactly the same; we are starting to see VA's with low flat fees called fee-based variable annuities, but they still will have underlying fees to be aware of. They are typically sold by brokers and have high commissions (fees) and surrender charges. Additionally, income riders can be very complex.

(17:15) Immediate annuities: The 'Better.' They have a purpose and I have seen them be useful for very specific circumstances. They are structured similarly to a classic pension. Pros:

• guaranteed stream of income
• For life only, life w/ period certain, life with joint payout
• Can be used for estate planning or LTC situations
• actuarially sound

Cons:

• irrevocable
• loss of control

(22:30) Fixed and Fixed index annuities: The 'Best.' These make the most sense when you look at specific needs for someone. Fixed annuities are just like they sound: the account value is fixed and typically pay a fixed amount of interest. Like a CD, term, rate. There are typically penalties for early withdrawal and they are tax-deferred.

Good for situations where folks have "Lazy money" lying around and typically offer a higher rate than a bank CD and there are little to no fees.

(26:01) Fixed Index Annuities (FIA's): Fixed, but the growth is tied to an external index.

PROS:

• Grow based on the performance of an index
• Considered safe from market loss- claims-paying ability
• Gains are credited tax-deferred; cannot be taken away because of a market drop
• Can be used for guaranteed income payments at a later date
• Little to no fees comparted to VA's

CONS;

• Lack of Liquidity- for all annuities
• Opportunity cost is the tradeoff for safety

Coachable Segment: The best advice is to get educated on the various types. Don't simply dismiss annuities because you heard they were BAD. Look at them in context of your overall goals and risk tolerance of the WHOLE Plan.

So as most things in life do your research, right! Get help w/ your decision from a professional that is going to lay out both sides PROS and CONS. I tell folks all the time; there is no perfect financial product out there. It does not exist!

• Growth, Safety, and Liquidity
• Sounds too good to be true it probably is. They all have pros and cons

Disclaimer: Please do not take specific advice from me on this show. As a licensed Fiduciary I am only allowed to give advice to clients. So unless you're a client I can't give you advice because I don't know you. So think of this as helpful hints and education only. And please before implementing any information or ideas you hear on this show always consult your legal adviser, your tax adviser, and your financial adviser………….right? that's just common sense.

So as a final word, if you have any questions on today's topics there are three ways to get questions to us which we will be glad to answer on a future podcast!

#1 record a question directly from our podcast page at FiscalBluePrint.com……….you'll see an orange button that says "start recording" at the bottom of the page. Simply click that button and you can record a question and send it directly to us.

#2 send us an email directly to [email protected] again that's [email protected]

#3 you can always give us a call at 855-97Coach which is 855-972-6224.

Final Disclaimer:

"We appreciate you joining us today for this episode of The Fiscal Blueprint.

Fiduciary Disclaimer

Remember it's not about the money but about your life!

Having a mindset and living a life of abundance rather than scarcity will change the direction of your life forever!! Enjoy the Journey!!!

"Opinions voiced in this recording are for general information only and not intended to offer specific advice or recommendations to any individual. All performance references are historical and no guarantee of future results. All indices are unmanaged and not available for direct investment."

Are you an experienced investor? What does that even mean? Does experience mean that you have been through many ups and downs of the markets and you have learned a few things from all your years of investing?

Well, from my real-life experience working with hundreds of investors over my career, even the most experienced investors are likely to feel FEAR, ANXIETY, PANIC during market volatility and recessions. But it is critical to make financial decisions without EMOTION.

So, on today's show we are going to explore the top 7 worst financial decisions you can make during volatile times.

(1:00) Practical Planning Segment: Sometimes (not always) new investors perform better than experienced investors during recessions and market volatility.

And I believe the reason is that new investors often come to me with a blank slate.

Meaning they "they don't know what they don't know". They have no preconceived ideas floating around in their head and are less susceptible to panic and all the fear-based information they get from the news.

They are just getting started and fully understand that with risk comes return. As a matter of fact, without any risk there would be very little or almost no returns!

Strange Irony! When it comes to money often our life experiences do not help very much. Money and finances are extremely personal.

Part of the problem is the older we get generally the more money we obtain! Our accounts grow over time. We save more and we see these accounts start to build up over time. And this is not always the case but many times from my experience working with all sorts of investors… I have seen the money becomes a burden rather than a blessing.

I distinctly remember the story of an advisor friend of mine and his wealthiest client at the time. She was a single lady in her mid-70's whose husband had passed away. Her Net worth in various accounts was well over 5 million at the time. Everything was paid for and she spent very little money on basic living expenses.

She had enough to live; certainly, for the rest of her lifetime and possibly for generations to come.

But something strange happened……the larger her account became, the less POM she had.

She started worrying about everything, the markets, the economy, politics, anything, and everything on the news.

She worried her kids were going to steal her money, her lawyers were going to steal her money.

Her biggest fear was that she was going to be a bag lady living on the street!

So, the money became a burden! AND I THINK how this relates to todays topic is those emotions contribute to POOR FINANCIAL DECISION MAKING.

THE TOP 7 WORST FINANCIAL DECISIONS YOU CAN MAKE IN A RECESSION OR DURING VOLATILE TIMES:

(5:20) Stop contributing to retirement plans.

(7:30) Move investments to cash or fixed income.

(10:00) Focus on short-term returns.

(12:00) Borrow to invest in the stock market.

(13:20) Focus on aggressive debt repayment

(15:40) Not seeking assistance

(17:27) Coachable Segment: The 7th and final mistake is that folks make panicked choices instead of proceeding slowly.

DISCLAIMER: Please do not take advice from me on this show. As a licensed Fiduciary I am only allowed to give advice to clients. So, unless you are a client, I can't give you advice because I don't know you. So, think of this as helpful hints and education only. And please before implementing any information or ideas you hear on this show always consult your legal adviser, your tax adviser, and your financial adviser…………. right? that's just common sense.

Final Disclaimer:

"We appreciate you joining us today for this episode of The Fiscal Blueprint.

Fiduciary Disclaimer

Remember it's not about the money but about your life!

Having a mindset and living a life of abundance rather than scarcity will change the direction of your life forever!! Enjoy the Journey!!!

"Opinions voiced in this recording are for general information only and not intended to offer specific advice or recommendations to any individual. All performance references are historical and no guarantee of future results. All indices are unmanaged and not available for direct investment."

Occasionally I get a question asking me what is better: Dollar Cost averaging or lump sum investing?

Maybe you just got a big bonus at work, or maybe you recently received an inheritance and are wondering what to do with it. When you start to think about investing it you might wonder:

Is it better to buy a little at a time or plunk in the entire amount and put it in all at once?

As usual, we are going to look at what the DATA and FACTS say!

So with all this being said the answer is not that simple. Why? Because that space between your ears (called the human brain), often gets in the way.

Our expectations of the outcome along with our hindsight bias throws most folks a curveball when it comes to making this type of financial decision

(1:00) Practical Planning Segment:

Based upon August 10th, 2020 article by Dimensional Fund Advisors. Click here to view the full article!

Coachable Segment:

Understanding the relationship between expectations and results is crucial to experiencing peace of mind about investing. No matter what it is in life, expectations about the outcome of some event play a deciding factor in how we feel about the eventual outcome. If we never expect anything, then we are never disappointed. Realistically, however, it is clear that most of us develop expectations about nearly all aspects of our lives, and perhaps nowhere is this as pronounced and as potentially devastating as it is with investing.

The first way in which expectations may break down is known as hindsight bias. Hindsight bias is the tendency to believe that we knew all the time what was going to happen. An example of this phenomenon appears often in the world of sports–we know it as of Monday Morning Quarterbacking.

Learning the outcome of an event can make it easy to delude ourselves that we could have predicted the outcome accurately, before the fact. In postgame sports talk shows, the hosts and callers often appear to have convinced themselves that they knew, in advance, that a particular game strategy would succeed or fail. Endless hours are spent on the air second-guessing the coaches and teams because, in hindsight, these "Monday Morning Quarterbacks" have such a clear perspective of what the winning strategy should have been. Does anyone really believe these people had a clear idea of what the strategy should have been before the game? Of course not. Otherwise, one of these "experts" would have been hired as the coach.

You can see hindsight bias at play whenever you hear someone say, "I knew that was going to happen." It is a commonplace tendency, and we've all done it. However, the fact of the matter is that none of us can predict actual outcomes in the future with any level of certainty. Only in hindsight does it become crystal clear.

Hindsight bias focuses on past events and lulls us into believing we had it all figured out. The phenomenon of hindsight bias is dangerous in investing because it sets up unrealistic expectations for the future.

So the lesson here is simply "Don't do it". Resist the urge of the self-talk that begins any sentence with the following:

"I knew"

"I told you so"

And "I should have"

Self-talk like:

"I knew the market was going to go up or I knew the market was going to go down.

"I knew so and so was going to get elected"

Quit lying to yourself!

"I should have bought that stock"

"I should have gotten out of the market" and that is typically followed by the "I Knew " phrase.

The FINAL reality check for Hindsight Bias is that if you had really known what was going to happen, you would have taken different actions.

FOR EXAMPLE; If you really knew in advance that a particular stock was going to do well, you would (and should) have borrowed money to "bet the farm" on what you knew would happen.

Hindsight bias is an extremely dangerous human perception error because it leads us to believe that we have power and control and insight that we don't – we cannot accurately predict the future.

Hindsight bias leads us to believe that we can win at Vegas, that we can pick all the best stock-pickers in advance, and that we can do all sorts of things that, in reality, we can't do. When it comes to investing in the market, this is an especially dangerous belief.

Disclaimer: Please do not take advice from me on this show. As a licensed Fiduciary I am only allowed to give advice to clients. So unless you're a client I can't give you advice because I don't know you. So think of this as helpful hints and education only. And please before implementing any information or ideas you hear on this show always consult your legal adviser, your tax adviser, and your financial adviser………….right? that's just common sense.

Final Disclaimer:

"Opinions voiced in this recording are for general information only and not intended to offer specific advice or recommendations to any individual. All performance references are historical and no guarantee of future results. All indices are unmanaged and not available for direct investment."

In this week's episode, we covered a few different topics based on some of the many questions we have been receiving lately! Question #1: Coin shortages. What's up with the conspiracy theories surrounding the U.S. coin shortage? Question #2: What could happen because of the upcoming election, how will it affect our economy and more specifically, our portfolios? Question #3: Depending on who gets into office, how could it affect our future tax rates? Do tax rates have any effects on market return?

(2:40) Question #1: Coin shortages. What's up with the conspiracy theories surrounding the U.S. coin shortage?

There was a recent social media post that went viral claiming that a coin shortage in the U.S. was a sign of an impending one-world government. The false claim included a photo of a grocery store asking customers to pay in exact change or use noncash payment methods. The post went on to profess that this coin shortage was done intentionally and that the mint was no longer printing coins into circulation. Thus, implying that this is the beginning of a plot to instill a cashless society where they would be able to track every single private transaction.

So, let's tackle this. Why did the coin shortage actually take place? The reduction of workers in the U.S. mint was the initial catalyst for the shortage. "The reduction of workers at the U.S. Mint because of social distancing resulted in a 10% decrease in production in April and a 20% decrease in May," according to U.S. mint spokesperson Todd Martin.

Because of coronavirus fears, many people have switched to using credit cards and mobile payments to avoid handling money. Meanwhile, the shutdown also forced some businesses to close that would normally help keep coins moving. "With establishments like retail shops, bank branches, transit authorities, and laundromats closed, the typical places where coin enters our society have slowed or even stopped the normal circulation of coin," Michael White, a spokesman for the U.S. Mint, said in a statement. The organization has since gone to full production starting in June. On June 30th, the Fed announced that they created a task force to handle the shortage. Meanwhile, the U.S. Mint returned to full production in mid-June and expects to produce 19.8 billion coins by the end of the year—7.4 billion more than last year. (according to yahoo finance)

Beware of those touting that the dollar is worthless in an attempt to sell gold and silver. They are in high gear and marketing solely based on fear.

P.S. Over the last 10 years, the ROI on gold has been 7.2%. In comparison, the S&P 500 was up 180.39%. Just remember, if their sales pitch is that we are heading into a cashless society/the dollar is worthless ask yourself this: what are they accepting in exchange for gold? THE US DOLLAR… which they were just touting as 'worthless.'

(11:11) Question #2: What could happen as a result of the upcoming election, how will it affect our economy and more specifically, our portfolios?

Questions like this are basically a recurring theme every single Presidential election! Let's talk about change… there is always going to be something that is scary or threatening to folks when it comes to investing in the market. This fear can brutally affect any prudent investment strategy if acted upon.

Lets' take a look at some facts & data! From 1927-2018, the Republicans held the House (majority) 27 of those years. During those years, the stock market had an annualized gain of about 6.59%. The Democrats held the House majority for 65 of those years and the market was up 11.11% on average.

What about the Senate? The Republicans controlled the Senate for 30 of those years during which the market averaged a 9.4% increase per year. The Democrats held the Senate for 62 years and averaged 9.94% increase each year.

What about the White House? Republicans have been in the oval office for 45 years with an average stock market gain of 4.95% per year. Democrats have been in the oval office for 47 years with an average stock market gain of 14% per year.

Now, although there are some differences, did you notice that all the percentages were positive? The point is that on average over time, the market grew regardless of who was in office or who held the House/Senate majority.

(19:30) Question #3: Taxes: Depending on who gets into office, how could it affect our future tax rates?

What happens if Joe Biden gets into office and he raises taxes as he mentions in his plan? Do tax rates have any effects on market return?

Again, let's always look at the data! From 1927-2018 we're going to look at the entire market (small, mid & large cap) performance. (CRSP) When the top tax bracket has been greater than 50%, (50 years) the average annual return in the market was 12.58%. When the top tax bracket was less than 50% (42 years) the average annual return in the market was 10.65%.

When capital gains rates were over 25% (49 years) the market returned 13.89%. When the capital gains rate was less than 25%, (43 years) the market returned 9.2%.

Disclaimer: Please do not take advice from me on this show. As a licensed Fiduciary I am only allowed to give advice to clients. So unless you're a client I can't give you advice because I don't know you. So think of this as helpful hints and education only. And please before implementing any information or ideas you hear on this show always consult your legal adviser, your tax adviser, and your financial adviser………….right? that's just common sense.

Welcome to our 4th and final episode of this series Smart Women Smart Wealth! We have focused this series on the financial power of women and the unique challenges they face in retirement planning. Let's wrap up the series by talking about Security and what all goes into the Security Basket. And in the coachable segment today we'll talk about why this is important and what it means to fulfill your Dream Basket. Let's go see what this all means and how it relates to your retirement. ​

Disclaimer: Please do not take advice from me on this show. As a licensed Fiduciary I am only allowed to give advice to clients. So, unless you are a client, I can't give you advice because I don't know you. So, think of this as helpful hints and education only. And please before implementing any information or ideas you hear on this show always consult your legal adviser, your tax adviser, and your financial adviser…………. right? that's just common sense.

(2:30) Practical Planning Segment: The Security Basket – we call this "The What If Basket"​ 3 Steps to develop this basket. It holds the things you need to do or consider helping protect yourself and your family. ​Let's start by asking this tough question.

If your husband or partner dies today – sorry, I'm not trying to kill them off – but go with me for a second here. Let's say your husband passes away today. What do you need to know tomorrow about the money? The answer is, "Everything!"

(3:30) STEP 1: Make a list of what you need to know. Then, make the list longer. So, what does "everything" mean. The first thing it means when you reach retirement is you need to truly know where all the money is. In other words, you need to know where you stand financially.

The financial inventory planner begins on page 15 of the workbook which you can download by clicking here!

Most people, by the time they reach retirement, have money and accounts everywhere. We call it the kitchen drawer approach to money management. There are IRAs, old 401(k) plans, annuities, insurance, mutual funds, brokerage accounts, bank accounts. Often, there are dozens of these accounts. What happens when you lose your spouse? All of this must be found! And if it is not found, it is lost. Additionally, once it is found, to get the accounts into your name, you need to get a death certificate and then go to each financial service company and fill out paperwork to have the money transferred to you. Imagine having to deal with this dozens of times after you have lost your spouse. ​ Finding the money is where you start. The financial inventory planner begins on page 15 of the workbook which you can download by clicking here!

It is impossible, by the way, to implement or run a financial plan without knowing where you stand today financially. This is where all financial planning starts, and it will help protect you by having this all organized in one place.

(6:00) STEP 2 is to have a Will or Living Trusts. You need to have a will or living trust to protect your family in case something unforeseen happens. A living trust is a legal document that does two things: First, it allows you to transfer ownership of any of your assets to a trust while you are still alive. Second, it designates who should be given those assets after you die.

The main advantage of living trust over a will is that if you create a living trust properly, your assets won't have to go through probate, which can save your family thousands of dollars in legal fees and allow you to maintain your estate's privacy. (Once an estate goes through probate, all details become a matter of public record.) ​

There are a few basics here to remember. Make sure your will or trust is up to date. If you have not had it updated in the last five years, there is a good chance it's out-of-date. Chances are, when you go home and check, some of you will find wills that have not been updated in 20 years. Sometimes, clients will go and look at their wills and see there's a provision in it about who's going to take care of little Johnny if anything happens to them, and you ask how old little Johnny is, and it turns out he's 42.​

Make sure your family knows where your will or trust is located. This may seem obvious, but a lot of times it's in a safety deposit box or safe. If it's in a safety deposit box and your family doesn't know where the key is, it could take months and a court order to get it out. Think this can't happen? It happens every day. Sometimes people never find the key to the safety deposit box, and the will stays hidden.

HIRE AN ATTORNEY TO SET UP OR REVIEW!

The next thing to be sure of is making sure all beneficiaries are up-to-date, especially if you're in a second marriage. All too often in second marriages, we see old beneficiaries on the husbands' retirement accounts, 401(k) plans, insurance policies, etc. Guess who the old beneficiary is? You guessed it! The ex-wife! How did she get left there? By accident or complete neglect of the previous financial advisor who didn't force the issue of the update. This is obviously a situation you never want to be in, so it's critically important that you review these. ​

(12:00) 3RD STEP: Finally, in the security basket, we have insurance. There are obviously several forms of insurance. There's health insurance, long-term care insurance, disability insurance, life insurance, INCOME INSURANCE IN THE FORM OF ANNUITIES

Whenever we're considering insurance, we need to start by asking a few key questions: First, do you truly need the coverage you're paying for? Are there areas in your planning where you are not covered or lacking coverage?

Finally, we want to consider issues of legacy planning, meaning how might you be able to use insurance, such as life insurance, to plan for the legacy you want to leave loved ones? ​

(16:45) Coachable Segment: We've talked about how to look at your values and what matters most to you. And we've looked together at what you need to think about when it comes to retirement planning and your financial independence. Now we are here for our last basket of the three – your dream basket. ​

All of us have dreams of doing things if only we had the time and money.

The beauty of retirement is that now you have the time, and we find, in most cases, many of you actually do have the money.​ The key is that now you use that money you've worked so hard saving and enjoy it. ​That is what this Dream Basket is all about. ​

Many of you have heard about ROI but what about ROR (return on retirement)? Most financial services companies focus on the former – not the latter. They want YOU to focus on returns too. Will you earn 4%, 5%, 6%, 8%? We think it's sad and a complete disservice to you to focus completely on ROI. Returns are meaningless if your returns don't help you live your best retirement.

Remember Helen a little earlier? She had a decent return of 5% on her CDs at the time, but her financial advisor at her bank never once asked her what a great retirement looked like to her. He never asked her about what was really important to her. He simply focused on her CD rate and called her when it was time to renew it. ​That is not financial planning. That is, sadly, just about making a "sale." ​

We happen to think the conversation about retirement needs to be elevated. "ROR" stands for return on retirement – in other words, how you get the best return possible on the best years of your life.​The truth of the matter is that all of your years in retirement are not the same. ​

(21:55) Retirement really can be the best years of your life. A recent study by Merrill Lynch shows this to be true. The survey found most retirees are happy to be free from the daily grind, the pressure of juggling family and work, alarm clocks, deadlines, and never-ending emails. Nine out of ten (92 percent) say retirement gives them the freedom and flexibility to do whatever they want, and on their terms. Link Article

(22:30) Let's look at the stages of retirement because they are not all created equally. ​

​

The first stage of retirement is what is often referred to as the "The Go-Go Years" within the financial stages of life. It is widely believed that these years are the happiest. Why? The first reason is time. The greatest benefit that retirees often talk about when they retire is, they have what is called "time affluence." It's the beauty of having the time to do what you want to do when you want to do it.

The second thing retirees enjoy early in The Go-Go Years is health. You will often be much stronger and healthier in your 60s and early 70s then you will in your late 70s, 80s, or 90s and beyond.

The third thing many of you might have in your 60s and early 70s is you often have grandchildren who still want to do things with you and you have friends who are also healthy and ready to enjoy activities with you. ​

The next stage of retirement is what is referred to as "The Slow-Go Years." Now, this isn't always the case, but it's often the case. Often by age 75 to 85, people are traveling less, have more health issues and, unfortunately, often have more funerals to attend. ​

The next stage is "The Won't Go Years." In this stage, health issues become more acute, and the simple reality of retirement at this age is it's often not as active as "The Go-Go Years" or "The Slow-Go Years

We think it's important to get both clear and honest now with what you want to do in retirement – not a decade or two from now. We find that many of those we sit down with are afraid to spend money in retirement, and worse yet, they are afraid to spend money while they have their best health. ​The whole reason to have a written financial plan where you know where you stand financially in black and white, and how your money works for you, is to make sure your money works for you.

​

Many people often think, "I will go meet with a financial planner, and they are going to tell me I can't spend money." This fear leaves many people never wanting to hire a financial planner or get a second opinion. ​ We might be a little different. My goal is to help my clients spend more money once we know they can!

So, remember ROR is the most important principle a good plan can give you.

Final Disclaimer:

"We appreciate you joining us today for this episode of The Fiscal Blueprint.

Fiduciary Disclaimer

Remember it's not about the money but about your life!

Having a mindset and living a life of abundance rather than scarcity will change the direction of your life forever!! Enjoy the Journey!!!

"Opinions voiced in this recording are for general information only and not intended to offer specific advice or recommendations to any individual. All performance references are historical and no guarantee of future results. All indices are unmanaged and not available for direct investment."

Remember that great phrase when you were a kid – "don't put all your eggs in one basket?" Well, that adage could not be more true when it comes to retirement! From taking on too much risk by having too many "eggs" in risky investments to having too many "eggs" sitting in low-risk investments not keeping up with inflation ​

Most people make financial planning complicated. We think it deserves to be simple. So today we will break all of retirement planning and financial planning into three core baskets: Your retirement basket, your security basket, and your dream basket. Which one do you think is your favorite one?

Disclaimer: Please do not take advice from me on this show. As a licensed Fiduciary I am only allowed to give advice to clients. So, unless you are a client, I cannot give you advice because I don't know you. So, think of this as helpful hints and education only. And please before implementing any information or ideas you hear on this show always consult your legal adviser, your tax adviser, and your financial adviser.

(1:00) Practical Planning Segment: Continuing our theme for this series of Smart Women and Smart Wealth… on today's episode, we are going to start to discuss the 3 baskets of Financial planning: Retirement, Security, & Dream. On today's show, we are mostly talking about the retirement basket. Candidly, there is a lot to discuss when it comes to your retirement basket. What all comes to your mind when you think about your finances and retirement? Social Security, Inflation, Health Care, Market Risk, Taxes, Income/Pension?

If you find yourself confused or concerned about any of these things, you are probably not alone. Having Stress about "retirement" is probably one of the single biggest things we face as we head into the second half of life. There's just so much to discuss and think about. We could spend 8 hours today going through each of these in detail. When it comes to your retirement, what do you really need? Income!

The beauty of working is you earn income. But when you stop working, do you still need a paycheck? And by the way, do you want that paycheck to come regularly? Because you like to eat right? Seriously for a moment - let that sink in.

What really matters when you retire is: "Where is your income going to come from?" and "How will you get your income to be consistent, and stable?"

(5:00) We know that for most folks, Social Security and we get a lot of questions about when you should take SS. Should you wait or take it early? What happens to your SS if you wait longer until age 70? If you wait to take Social Security, the value of your benefit increases by 8% annually. So, wouldn't it make sense to wait? Not necessarily.

The truthful answer is – it depends. The truth about real financial planning is that it is "personal." For many of you listening who are not dependent on Social Security and you do not need the money, you might want to consider taking it early. It also depends on your health.

Consider this example – a wife age 66 and a husband age 68. Their combined Social Security benefits were over $30,000. They are not taking their Social Security yet. Why not? Because they know if they wait until age 70, the annual payout will be higher. Well, that's fine, but, what if their goal is to travel more while they are healthy, but they are also concerned about spending down their existing assets? If they had an extra $30,000 a year, do you think they would travel more?

Social Security is a real key part of retirement, and unfortunately, most advisors do not spend enough time, if any, on when to take it. This is something we spend a lot of time on with clients. It is an important decision and definitely not a "one size fits all"

(9:00) Next up under Retirement Income are "Pension Plans." If you have a pension plan, you need to decide again when and how to take it. We cannot tell you how many times I have encountered a situation like the following:

A woman brings her husband into our office with a pension plan. He is planning to take his company pension with a higher monthly income based on his life expectancy. He had simply looked at the math and said to himself "Well, Option A = more monthly money." The problem with option A was if he died tomorrow, the pension plan benefits died with him. He was getting ready to select an option that left his wife out of his pension benefits when he died. This could cause a massive disaster when he dies, and, by the way, that decision is irreversible.

(10:50) Next, up are 401(k) plans and 403(b) plans. One of the biggest decisions here with these plans is first "what to do with them?" With your 401k plan, you have 2 Questions to Answer.

• What will you do with them – leave them behind or do an IRA rollover? (I will explain this in a moment)
• How will you use that money to create an INCOME stream?

Most Americans have saved in some cases in these plans for up to three decades! The whole point of saving in these plans was to get money from them later – when you retire. Some folks have more than one plan floating around. In fact, with the number of jobs we now have – we very often see 2, 3, 4 old plans when people come into our office. And with married couples, when you include the husband it can be 4, 5, 6, or more old 401k Plans. The technical term for this I think is a "mess."

Why is it a mess to have old 401k plans left behind when you leave an employer? Well, first let's talk about your husband leaving these plans behind if you are married. And then we will talk about you. Let's say your husband had money that he's left with an old employer. We had one recent couple come in and the husband had four previous employers with 401(k) plans. All the money was sitting in old plans left behind.

First, do we think he is paying attention to these old plans? Of course not. Does he have a clear idea about how to now get income from these old plans? What happens if he dies? What does his wife need to know and do? His wife needs to know first, where are these old plans? Second, she needs to now go back to all these old companies where she does not know anyone and get the old plans transferred to her.

Here is the painful process. She needs to first get death certificates and go through the process of proving her husband has died, and she must prove she is the beneficiary (which she hopefully is). Married women: You need to make sure you are the beneficiary of your husband's retirement plans. We, unfortunately, do find couples in second marriages where the husband has not removed the ex-wife from his 401(k) plan. Did he do that intentionally? Of course not, he simply forgot to deal with this.

Back to the death certificate… Once she brings these things in and proves she is the one who is entitled to these accounts, she needs to make sure the money gets transferred into her IRA account. If this gets done wrong, the account can become instantly taxable. Take a $300,000 old 401(k) plan and do this incorrectly and pay taxes on it and now you have lost $100,000 potentially to taxes.

What is a better option than going through this potential mess? The better option can be – both for your husband and for you – doing what is called an "IRA Rollover." This is where you move these old 401(k) plans into an IRA account or accounts that you control completely.

(18:00) POTENTIAL BENEFITS OF AN IRA ROLLOVER:

• Your money is transferred from your 401(k) plan to an IRA account in your name.
• You will not be limited to the investment choices in your old plan.
• You have more control over the allocation of funds and underlying investments/financial products.
• You can do this all without paying taxes on the money until you take it out.
• And then you can create from your IRA an income stream.
• You will have increased beneficiary options (i.e., you can add your children as contingent beneficiaries)
• You can simplify your life. ORGANIZE

Disclaimer: These are not specific recommendations. Your personal situation must be looked at, including fees. The government takes this single issue the most seriously in seminars that advisors present.)

Why did I say SIMPLIFY? Because when you take all these old 401(k) plans and consolidate them into IRAs under the management of one firm/advisor you can see all the money in one place. It is easier to manage – AND the fees may even go down. And again, if your husband does this, if he dies first and you're working with us as your advisor, you simply bring one death certificate into our office and the switch can be made in days and the money moved into an IRA with your name on it.

(20:00) Why does this stuff matter? Saving in 401(k) and 403(b) retirement plans are about accumulating money for retirement. When you reach retirement, it's time to get it all organized so you can now work on a plan to spend and enjoy this money. So now we just need to figure out how to spend it, enjoy it and not run out of money.

The biggest thing many retirees face is an INCOME GAP. You worked all your life, and now the question is, where does the income come from in your retirement? Most people have an income gap at retirement because when you stop working now you need a retirement paycheck, right? Trust but verify. And for the single women, you can now trust yourself - you simply need a plan. We all need a plan: Married, Single, Widowed, Divorced – you all need a RETIREMENT PLAN.

(22:25) Coachable Segment: How many of you are old enough to remember that old Wendy's commercial about "Where's the Beef?" There were three old ladies at Wendy's asking, "Where's the beef?" Great commercial. Totally hilarious. We all remember it, right? Well those of us over age 50. This ad ran in 1984. Here is the thing … when it comes to your RETIREMENT PLAN – it is similar. Instead of where's the beef – It comes down to three things.

Where's the money? = the money is more than likely everywhere and doing a retirement plan pulls this all together– seeing all your money in one comprehensive plan will allow you to have complete clarity over your finances so you can stop worrying about your money. Just doing this will help you feel better about where you stand financially.

Where's the income? = once it's all pulled together and clarified, the goal is to create an income stream for life that you cannot run out of. Again, knowing where your income will come from, how you will receive it, and how much you will receive will allow you to live your best life in retirement with confidence.

How long will it last? = The entire purpose of the retirement plan is to be able to spend your retirement money and not be worried about whether you will run out. So, we must stress test the plan: Run a test with over 1000 trials and see if it holds up under good times and bad!

We will get into this in a little more detail on next week's show where we finish up our retirement basket and talk about the Security basket and the Dream basket.

Final Disclaimer: "We appreciate you joining us today for this episode of The Fiscal Blueprint. Remember it's not about the money but about your life!

Having a mindset and living a life of abundance rather than scarcity will change the direction of your life forever!! Enjoy the Journey!!!

"Opinions voiced in this recording are for general information only and not intended to offer specific advice or recommendations to any individual. All performance references are historical and no guarantee of future results. All indices are unmanaged and not available for direct investment."

Today we are continuing our 4-part series on Women and Wealth by climbing the Values ladder! What does that mean? We believe living a life in alignment with your values may be the most important ingredient in creating POM, Joy, and happiness not only in retirement but throughout your working years as well.

There are many ways to gain clarity of your core values and today we are going to do a neat little exercise called THE VALUES LADDER.

Disclaimer: Please do not take advice from me on this show. As a licensed Fiduciary I am only allowed to give advice to clients. So, unless you are a client, I cannot give you advice because I don't know you. So, think of this as helpful hints and education only. And please before implementing any information or ideas you hear on this show always consult your legal adviser, your tax adviser, and your financial adviser.

(1:00) On last week's podcast, we set up our discussion for this 4-part series by examining the good news surrounding women and wealth and the not so good news! We mentioned that there is a lot of good news and that women are an absolute economic powerhouse today.

However, we also had to talk about the unique challenges women face regarding retirement planning that somewhat differ than the challenges of men.

• Living longer
• Financially damaged in divorce
• Out of the work an average of 11 ½- lower SS, lower pension
• Aging parents

In this episode, we are going to talk about building a retirement and income plan to address those unique challenges AND we are going to start to build this plan by focusing on (what I think is the most important aspect of planning) and that is VALUES. More specifically identifying your core values and making sure your plan is in alignment with those values.

Last week I mentioned teaching clients "How to live Rich" and that doesn't necessarily mean money ……….it means VALUES. Our saying in the office is "It's not about the money it's about your life!" What we are about to do is probably the most important thing you can do to manage your money in retirement, fortunately, it is also the easiest…

(4:50) "IT'S CALLED PUTTING YOUR MONEY WHERE YOUR VALUES ARE"

• Talking about values is not the first thing that typically comes to mind when it comes to your finances.
• Instead, I think most FA's typically talk about returns. But when you think about it, money is not an end in itself. It's a tool to help us achieve some particular goal. If the way we handle our money conflicts with our values, we are not going to wind up living happy and fulfilled lives. ​
• David calls this in his book "Purposed Focused Financial Planning" –it's the critical idea that your financial plan should be built of your core values – that which is most important to you. When your values are clear, your retirement plan becomes meaningful, more fun, and most importantly your financial decisions become easier. ​

​

(6:10) So, let's start this exercise by asking a simple question, "what's important about money to you?"

• The answers usually fall into two categories: goals and values.

• Goals are tangible. They are usually related to specific things or experiences and have a specific monetary value. Paying down debt, buying a house, traveling, starting a business, and redecorating are examples of goals you might have. ​

​

• Values are intangible desires — the things in life that you care most about. They're about who you are. Things such as making a difference, freedom, independence, spirituality, and happiness, are all examples of values. ​​
• A goal might help you toward fulfilling a value. For example, travel is a goal, but the reason you like to travel maybe because it gives you a sense of freedom or happiness, which are values. ​

• What we want to focus on our values because they make the greatest differences in your life. If you can clarify this, it will help you make some financial decisions. If you realize, for example, that being financially confident or making a difference in the world are values for you, it will be much more powerful than simply fulfilling a goal like going to Hawaii or buying a new car. It just means a lot more. ​

​

• That meaning will be much more motivating in helping you to take whatever action you need, to live that value. You'll be living a richer, more fulfilled life by using your money for your values—for what's important to you. If you can clarify your values, your goals will naturally follow, and you'll be much more likely to make them happen. ​ ​​

(10:00) Coachable Segment:

• Let's go look at how you identify your values. The truth is this is easy, and if you have a partner in your life, helping him or her do this as well can be life-changing.

• Now we're going to help you clarify your top values by building what we call a values ladder.

​

• The easiest way to learn how to do this is to take an actual example. This was done by David Bach for a real person, Helen. Helen was a 72-year-old woman who was a child of PARENTS THAT LIVED THROUGH the Great Depression, and as a result, was always taught to watch her spending and savings carefully.

• Her husband passed away six years earlier and she had been living on Social Security and a widow's pension. In addition, she had about $700,000 in CDs that at the time had been paying her 5%, or $35,000. (Obviously, this is an old story, Well Over 20 years ago since rates are nowhere near that)

• This was actually money she was not using to live, she just kept putting the interest in a savings account. When he went through the Values Ladder exercise with Helen, it started by asking her "what's important about money to her? – what's the purpose of this money?"

• These questions –"What is important? Why is it important" – are the same two questions that we'll continue to ask as we work our way up the ladder. ​

​

• In Helen's case, when David asked her what was important about money to her, what was the purpose –her answer was "security." But security means different things to different people. ​

​

• So, David asked, "What's important about security to you?" For Helen, it meant she wanted to know that she would always be financially independent. ​

• But what's important about being financially independent? In Helen's case, it was important because she wanted to be sure that she would never be a burden on her family. Her children and grandchildren meant the world to her, and she would never want to "take" from her family…she would like to be able to "give" to them. ​

​

• And what's important about giving to them? What would that mean? Helen's eyes lit up when asked this question, and she said that she had always dreamed of taking the whole family on a cruise to Alaska. To her, that would be an ideal way to enjoy life, retirement along with her family right now … which became the final rung on her Values Ladder. ​

​

• When he asked her why she wasn't taking the steps to make her dream come true, and just booking the vacation, she said it was too expensive … at least $15,000. I just don't think I can afford it. We asked her how many years had she had this dream? She said at least five. But we then pointed out to her that for the past six years since her husband died, she had been earning two and half times what the cruise could cost a year and not even using it.
• The money was sitting in a checking account earning next to nothing. Her "Depression Child" mentality was preventing her from enjoying her money and her life now. When she thought about her Values Ladder, about what was important to her in life, she decided to go ahead and take her family on vacation. In Helen's case, the Values Ladder exercise helped her use her money in the way it was supposed to be used –to make her life better. ​

​

• One thing David asked Helen was, had her advisor at her bank ever called her to discuss any of her plans? She said my advisor at my bank. I haven't talked to the "guy at my bank" in six years.

​

• The reason values matter is that they are your values. Everyone's situation is different, but the important thing to remember is that your money should be used to make your values real.

Final Disclaimer:

"We appreciate you joining us today for this episode of The Fiscal Blueprint.

Fiduciary Disclaimer

Remember it's not about the money but about your life!

Having a mindset and living a life of abundance rather than scarcity will change the direction of your life forever!! Enjoy the Journey!!!

"Opinions voiced in this recording are for general information only and not intended to offer specific advice or recommendations to any individual. All performance references are historical and no guarantee of future results. All indices are unmanaged and not available for direct investment."

Episode 35: Smart Women, Smart Wealth (Part 1)

This episode kicks off a special four-part series on women and wealth! Click Here to register for the webinar and Click here to download the workbook!

In this series, we are going to talk about the financial power of women and also the unique challenges that women face in retirement planning.

Challenges that men often don't face or don't face as often as women

We're going to start today talking about some good news and some not so good news that women face during retirement and then as the series progresses we're going to Get into some actual planning techniques that I think are going to help.

By the way, this podcast can be interactive if you like. We can send you a downloadable workbook with some fantastic information and empty spaces in this workbook that you can follow along and go back to listen to this series again.

If you are interested in downloading that workbook, we will put a link in the show notes that you can simply click and download or send us a quick email to [email protected]

Our main goal here is to teach women how to live rich and that does not necessarily mean money it means living a life in alignment with your values.

(1:30) Practical planning segment:

I mentioned in the opening segment that our goal here is to teach women how to live rich and that doesn't necessarily mean money, it means living life in alignment with your values. However, we need money to have a great retirement, and one way we express our values IS through the use of money. We still need income!

So really, we have two goals in this series: #1 how do we identify the values that are most important to us and then live our life and alignment with those values. That is where true Peace of Mind and happiness comes from and #2 how do we develop an income that is going to sustain in the face of inflation, market turmoil, tax changes to last our lifetime.

By the way, that second goal has a lot of that has to do with getting organized and we are going to help you with that task in this series as well. In this episode, I want to set the stage of what women face in retirement that is different than men or can be quite different than that.

By the way, much of this information is derived from David Bach's bestselling book "smart women finish rich." This book has sold over 1,000,000 copies and Has spent over a decade on the bestseller list.

Some of you may recognize that name. It was turned into a PBS special that ran for years. So, I recommend if you get a chance to pick up that book it's a great read.

(5:30) Let's start today laying out some good news regarding women and money. There is a lot of GOOD (actually great) news about women's accomplishments and financial success. Let's take just a couple of minutes to look at some facts. ​

• The biggest FACT is this: YOU ARE AN ECONOMIC POWERHOUSE. ​

​

Think back to the year 1975. This was the height of Gloria Steinem and women's liberation. Take a guess at the number of women-owned businesses in 1975. I'll give you a clue; it's a six-figure number. It's 400,000. Now, women own 10 million businesses with combined revenue of over $1.4 trillion and employ over 9 million people. They are the entrepreneurs of America today. ​

• Women control over 40% of households with assets over $600,000​.
• 83% of purchasing decisions are controlled by women
• Women over the age of 50 have a combined net worth of $14 trillion​.
• Women are the primary breadwinner in 40% of families​.
• Women make up 48% of millionaires in America today​.
• Women are graduating from college at a rate faster than men in both undergraduate and graduate school.
• Women are about to inherit the bulk of what is expected to be $30 trillion in wealth transfers in the next 20 years. ​

So even with all this good news for women, financial planning is still more important for women than men, why? Because Women live longer! Here is a sobering statistic: The reality is that 80% of men die married. 80% of women die single.

This is why it's so important to start developing a plan and get organized. Because if you do outlive your spouse then it's all on you. You're left holding the bag.

(10:30) So that brings us to some of the not so good news.

• Bear with me while I share some statistics with you. ​
• You need to know that on average women live five years longer than men. The average age of widowhood is 59!
• It's probably not much of a surprise to you that nearly half of marriages end in divorce, but you should know that women are typically left more financially challenged in divorce than men. One of the key reasons (which we'll solve today for you), is if you don't know where all the money is when you're married, and you get divorced, you don't get your rightful share. ​
• Women are also out of the labor force an average of 11 and a half years for child-rearing, which means lost wages, but also means less going into Social Security and pension plans. ​
• A big new burden for women is the financial burden of parents on the daughter. We don't know why this is, but typically it's the daughter, not the son, who is taking care of mom and dad.
• Lastly, I hate to even point this out, but if you're married and your husband falls ill, many couples go through the retirement savings on the medical costs associated with supporting the husband.​
• Okay, so that hurt a bit, right? But it's important to know what we're up against. From here on out, we are going to focus on what you can do about these things and show you ways to avoid these bad situations, so you are empowered by your money and your retirement.

So that kind of sets the stage for upcoming episodes where we are going to talk about identifying your values and what's important to you in retirement and life. We're going to understand where our income is going to come from in retirement. And we're going to explain how to get organized.

(18:00) I want you to sign up for our next smart women smart retirement webinar. Click Here to register for the webinar and Click here to download the workbook! This is a webinar format that we will have scheduled times. And if you happen to miss you can always click the replay link. But don't forget to request your copy of the workbook before participating!

Final Disclaimer:

"We appreciate you joining us today for this episode of The Fiscal Blueprint.

Fiduciary Disclaimer

Remember it's not about the money but your life!

Having a mindset and living a life of abundance rather than scarcity will change the direction of your life forever!! Enjoy the Journey!!!

"Opinions voiced in this recording are for general information only and not intended to offer specific advice or recommendations to any individual. All performance references are historical and no guarantee of future results. All indices are unmanaged and not available for direct investment."

• SOURCES: ​
• Women 10 million women-owned businesses: https://www.sba.gov/sites/default/files/advocacy/Womens-Business-Ownership-in-the-US.pdf​
• 40% of households over $600,000 are controlled by women: http://shurwest.com/2017/03/14/financial-facts-womens-history-month/​
• 83% of purchasing decisions controlled by women: http://www.genderleadershipgroup.com/the-inclusionary-leadership-blog/210​
• Women over 50+have combined net worth of $19 trillion: https://www.bmo.com/privatebank/pdf/Q1-2015-Wealth-Institute-Report-Financial-Concerns-of-Women.pdf
• Primary wage earner in 40% of families: https://www.nytimes.com/2013/05/30/business/economy/women-as-family-breadwinner-on-the-rise-study-says.html​
• 48% of millionaires are women: https://www.buildbeyond.com/cornerstone-insights/women-wealth-and-investing/​
• Source: https://markets.businessinsider.com/news/stocks/americans-financially-unprepared-for-divorce-widowhood-1011393397 Accessed Aug. 25, 2018
• Source: https://www.fa-mag.com/news/serving-widowed-clients-whatever-their-age-14829.html. Accessed July 9, 2018.
• Source: https://www.psychologytoday.com/us/blog/living-single/201702/what-is-the-divorce-rate-really. Accessed July 9, 2018.
• Source: http://shurwest.com/2017/03/14/financial-facts-womens-history-month/. Accessed Aug. 2, 2018.
• Source: Family Caregiver Alliance. "Caregiver Statistics: Work and Caregiving." https://www.caregiver.org/caregiver-statistics-work-and-caregiving Accessed Aug. 25, 2018
• Women are graduating at a rate faster than men: https://collegepuzzle.stanford.edu/tag/women-exceed-men-in-college-graduation/​
• Women will inherit 70% of wealth $30 trillion wealth transfer: https://www.financialpoise.com/30-trillion-wealth-transfer-most-advisors-miss-this-critical-step/
• 80% of men die married, 80% of women die single: https://www.marketwatch.com/story/this-is-something-young-married-women-should-pay-attention-to-2017-04-28

In this week's episode, your host Jeff Montgomery is joined by co-host Joani Gursky as well as special guest, Nick Craven- Associate Advisor at Montgomery Financial Services. The crew discusses a recent article written by renowned CPA, Ed Slott.

The article addresses the numerous questions we have received surrounding the CARES ACT, congress' 2.7 trillion dollar stimulus program. Most of the questions revolve around the RMD waiver and the CRD withdraw provision. Let's dive in!

Disclaimer: Please do not take advice from me on this show. As a licensed Fiduciary I am only allowed to give advice to clients. So, unless you're a client I can't give you advice because I don't know you. So think of this as helpful hints and education only. And please before implementing any information or ideas you hear on this show always consult your legal adviser, your tax adviser , and your financial adviser………….right? that's just common sense.

So we have received quite a few questions regarding the CARES ACT which if you don't know is the "Coronavirus Aid, Relief, and Economic Security Act" or the "CARES Act".

What type of accounts are impacted by the RMD waiver? The waiver applies to traditional IRAs and workplace plans like SEP, SIMPLE, 401(k), 403(b) and 457(b) plans. Defined benefit plans are not part of the waiver.

(4:40) Does a client have the option to take a 2020 RMD? Yes. Any withdrawal taken in 2020 will be treated as a voluntary distribution. Be aware that taxes will still apply, but the withdrawal can also be converted to a Roth IRA since it is no longer an RMD.

(7:00) OK, but if a client already received all or a portion of her 2020 RMD, can she return it to the IRA and eliminate the tax bill? It depends. While the CARES Act does not grant a free rollover to everyone for every RMD dollar, subsequent IRS guidance in Notice 2020-23 further relaxed rollover restrictions. As of this writing, anyone who takes an RMD between Feb. 1 and May 15, 2020, has until July 15 to roll over the RMD payment. Future guidance could further expand rollover relief. For all RMDs received in January 2020 and after May 15, the 60-day deadline still applies.

Under the act, the once-per-year rollover rule also still applies. If another IRA-to-IRA (or Roth IRA-to-Roth IRA) 60-day rollover was done in the previous 365 days, then the RMD cannot be put back. This means that if a person received monthly RMD payments in 2020, only one can be rolled over. Note that rollovers from employer plans to IRAs, and vice versa, do not count toward the once-per-year rule. This rule is unaffected by the rollover relief in Notice 2020-23. While the CARES Act waived 2020 RMDs from both inherited IRAs and Roth IRAs, they cannot be rolled over.

(12:00) My client passed away in January without taking his 2020 RMD. I am working with his children to establish inherited IRAs. Do they need to take his year-of-death RMD? No. Since the decedent passed away in 2020 when RMDs were waived, there is no year-of-death RMD to take. Beneficiary stretch rules under the SECURE Act will apply. Eligible designated beneficiaries inheriting in 2020 looking to stretch payments are unaffected by the CARES Act and will have their first RMD due in 2021. Non-eligible designated beneficiaries unable to stretch inherited payments under the SECURE Act are still bound by the standard 10-year payout rule. The 10-year rule does not become an 11-year rule.

(14:20) Must my client be negatively affected by the coronavirus for the RMD waiver to apply to him? There are no prerequisites for the RMD waiver. It automatically applies to everyone who has an

Do not confuse rules in the CARES Act for coronavirus-related distributions, or CRDs, with the RMD waiver — these are separate and distinct provisions. Frequently asked questions about CRDs follow.

What special tax relief is available for coronavirus-related distributions? The CARES Act allows qualified individuals to take distributions of up to $100,000 penalty-free from their IRA or company plan during 2020. Further, it allows the distributions to be repaid to IRAs or plans and permits federal income tax on those withdrawals to be spread out over three years. The three-year repayment period begins the day after the date the funds were received.

(17:10) Who qualifies for relief? Unlike IRS relief for disasters like hurricanes and wildfires, this relief is available only to qualified individuals who have been:

• diagnosed with the SARS-CoV-2 or COVID-19 virus by a test approved by the CDC;
• whose spouse or dependent is diagnosed;
• who experiences "adverse financial consequences" from being quarantined; being furloughed or laid off or having work hours reduced; or being unable to work due to lack of child care; or have closed or reduced hours of a business they owned or operated.

Can someone with both an IRA and company plan withdraw $100,000 limit from each? No. The $100,000 is an overall limit. IRA and company plan withdrawals are aggregated for this purpose.

Are there any restrictions on how the CRDs are used? Surprisingly, no.

(20:40) When must the CRDs be taken? CRDs can be taken at any time during 2020. This means that distributions taken between January 1, 2020, and March 26, 2020 — before the CARES Act date of enactment — also qualify.

Are CRDs taxable? Generally yes, but CRDs can be repaid tax free. If they are not repaid, income can be spread over three years.

(27:15) Can those age 59 ½ or over qualify for CRDs? Yes. Although those individuals would not be subject to the 10% penalty anyway. They still get to repay the CRD or spread the income.

Final Disclaimer:

"We appreciate you joining us today for this episode of The Fiscal Blueprint.

Be sure to visit fiscalblueprint.com to access the most recent content available including all past shows.

Remember it's not about the money but about your life!

Having a mindset and living a life of abundance rather than scarcity will change the direction of your life forever!! Enjoy the Journey!!!

"Opinions voiced in this recording are for general information only and not intended to offer specific advice or recommendations to any individual. All performance references are historical and no guarantee of future results. All indices are unmanaged and not available for direct investment."

On today's show, we cover a little bit of a local community update and discuss what's going on here on the Eastern Shore. Also, Jeff and Joani discuss what's been going on in the markets lately, from oil prices, to Disney to meat shortages & much more. Finally, we talk about a recent consumer sentiment survey that may have some good insights for Small Business owners out there.

Disclaimer: Please do not take advice from me on this show. As a licensed Fiduciary I am only allowed to give advice to clients. So unless you're a client I can't give you advice because I don't know you. So think of this as helpful hints and education only. And please before implementing any information or ideas you hear on this show always consult your legal adviser, your tax adviser, and your financial adviser………….right? that's just common sense.

(6:07) A discussion on current market updates[1]:

• Oil Prices took a drastic dip a couple of weeks ago, but we are starting to see them come back up as the country begins to reopen
• The markets- The stock market volatility and uncertainty has tapered off recently
• Disney reported dismal earnings yesterday. What does this mean?
• Meat Shortage- Kroger is limiting how much meat you can actually purchase!

(13:30) A study on understanding U.S. Consumer Sentiment during the Coronavirus pandemic by Win Big Media, owned by Phillip Stutts[2]

This research serves to shed light on both actions being taken and concerns being felt by consumers around covid-19 and its impacts on everyday lives.

Some interesting highlights:

~The 'Instagram economy' is essentially dead because of how egocentric it comes off

~95% of respondents were at least moderately concerned about the economic affects due to the coronavirus pandemic.

~33% of the respondents said that they would increase the amount of home improvement/DIY projects they do during the quarantine

~53% of folks are increasing the time they spend on personal hobbies

~43% of folks said they would postpone dental and/or medical appointments. From a business standpoint, that can be a huge hit!

~From where are folks primarily getting their news from? 21% of folks are consuming news from their local stations.

~Personal Values- #1 was helping and caring for your family and friends #2 was keeping your self safe #3 trust and safety

[1] https://www.morningbrew.com/daily/2020/05/[email protected]

[2] https://www.winbigmedia.com/covid