The Prosperity Gap Podcast

Dave Hall answers several questions all about social security, medicare and reverse mortgage.  CR Thelin Producer joins the show. 

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I have received several requests from many of you regarding bad or incorrect information found online about retirement. So I have decided to tackle some of these issues head on in my recent podcast. "Debunk Week"

To start I wanted to break down the article from the Financial Samurai entitled, "Disadvantages of a Roth IRA". 

There are a lot of great resources for financial information and my job is to make sure you get the best advice for you and your retirement. 

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If you were to look at the retirement plans of most Americans, what you would find is that 95% of them are out of balance. 95% of these plans have the majority of their assets in the tax deferred bucket, which means the majority of their retirement is subject to tax rate risk. with federal spending skyrocketing and more baby boomers coming on to Social Security and Medicare each day. 

All we have to do is look at the math to realize taxes cannot stay where they are today. And America be able to continue to meet their debts and obligations. Which is why I believe if you are one of the 95% of Americans who has their retirement assets and traditional tax deferred accounts like 401 Ks and traditional IRAs, you're overdue for a rebalancing of your assets. And the power of zero paradigm retirement planning is as simple as the three bucket system, the taxable bucket, the tax deferred bucket and the tax free bucket. 

Very few people have the right amount of money in their taxable bucket, the rich, they almost always overfunded and the poor, well, they almost always underfunded, the bucket should be filled with liquid assets you can use to bail yourself out in case of an emergency. the appropriate amount you should have in this bucket when you reach retirement is about six months of basic living expenses.

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I want to talk about five things that I believe we all should be grateful for as we approach retirement. 

 The number one thing on my list for things that I believe we should all be thankful for, especially as we approach retirement, is the Social Security program. It may seem strange that I'm thankful for a government program, but when you look at it, it’s been able to give a much better life to retirees, and it has been helping them live a more safe and secure life. 

 The program was brought about back in 1935 by Franklin Delano Roosevelt, and it was set up for two main purposes. The first one was to be an insurance against living too long as average life expectancy at that time was only 62, and you couldn't start getting benefits until age 65. The other one was to help alleviate poverty in retirement. At that time, about 50% of retirees were living below the poverty level, and so they put the program in place to hopefully help those individuals have a much better life....

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Proposed Tax Changes by Joe Biden

Everything i'm talking about is a proposed change, it has not yet happened and some or all of it may never happen. Second, we don't have all the details on how some of the proposed changes will actually work. 

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A self directed Roth IRA is a retirement plan that allows for alternative investments for your retirement savings. Although this type of retirement plan has been around for decades, they've struggled to gain popularity. There are many reasons for this, but the biggest one is because the big brokerage firms that spend billions of dollars marketing retirement investments have nothing to gain.

If you decide you want to do a self directed Roth IRA, self directed retirement accounts do come in various shapes and sizes. But I'm only talking about the self directed Roth IRA. I'm a strong believer that tax rates will have to be higher in the future, or the government will not be able to meet all of their liabilities. Therefore, it's in the best interest of most Americans to pay the taxes. Now, while we have historically low tax rate, rather than waiting until a time in the future, when tax rates could be double, and create major havoc on your retirement plan, it's important to know that self directed Roth IRAs are not for everyone. 

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I know so many of you are having issues with your retirement plans. I have decided that I'm going to be talking about why I believe you should get a prosperity advisor involved with your retirement. 

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The longer your retirement lasts, the more risk your retirement will face. We call this situation longevity risk. 

longevity risk is any potential risks attached to the increased life expectancy of an individual. 

 Life is full of fears. But there's one that is outpacing any other when it comes to retirees. And that is the fear they're going to live too long. It was only a couple of years ago that their three greatest fears were death, taxes and public speaking. So why did things change? The reason is because of longevity. Retirees are realizing retirements going to be much longer than what they had originally prepared for. It's not uncommon for retirement to now last up to 35 or 40 years. As a result, 68% of retirees are afraid they're going to run out of money before they run out of retirement. And when a retiree runs out of money, it creates major issues. 

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If there's a retirement product out there that has gotten a bad rap because of unmet expectations, it's the reverse mortgage. Therefore, it's my plan to help you better understand what you can expect from a reverse mortgage, so you can make a better decision on whether or not a reverse mortgage is the right product for your retirement. 

When you hear the word reverse mortgage, what comes to your mind? For many of you, it may be the thoughts that it's just a program created to steal your home. And then for others, you might be thinking how grateful you are for your reverse mortgage, because it has helped you have a more safe and secure retirement. 

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