The Prosperity Gap Podcast

The fiscal gap is the difference between the unrecorded liabilities, America is responsible for the expected assets the government plans to have available when these liabilities come due. These are liabilities that are not currently included on the financial statements of the government. And when you take into consideration liabilities, such as Social Security, Medicare and the national debt, the fiscal gap is almost incomprehensible...

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I will be talking about state taxes. What you can do to choose the right state in retirement to help you reduce your overall tax rate risk.

When it comes to picking a place to live in retirement taxes very seldom hit the top five reasons of any published list. 

In fact, the top five reasons most people choose to live where they do in retirement are the following. Number one is neighborhood safety. Retirees want to make sure they live in a place they can feel safe. They're at a point in their life. They don't need any more drama and drama often comes with many of the unsafe neighborhoods. Number two is familiarity. retirees want to live in an area they feel comfortable getting around, and this is why most retirees will choose to retire in the same place they live during most of their working years. Number three is healthcare. As we age healthcare needs increase and we all want to make sure we're getting the best care we possibly can for the health issues we're facing. Retirees will choose to live in an area where they feel comfortable that the local health system will meet their needs. And number four is access to shopping and activities. Retirement is all about getting out and enjoying your life. Therefore retirees pick areas to live in, that have the amenities they enjoy. And number five is social opportunities. We're social beings we're created to be around other people. And retirees want to be in an environment where they're surrounded by like minded individuals. This is why there's so many retirement communities build up across the country. 

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In this episode we are talking about Roth Conversions and what you should consider before you do a Roth Conversion. 

To get to the point..do it sooner than later. 

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A long term care event is one of the biggest risks most people will face in retirement. You may be asking, Is this really true? And if so, why? The answer to the first question is yes, it is true. Over 70% of retirees who lived the life expectancy will be faced with some type of long term care event. Now to question number two, the reason why.

The reason so many retirees will be faced with a long term care event is because of longevity. Now, the great news is we're living longer today than our parents or even our grandparents did. But the bad news is that this longevity isn't always because we're in great health. It often is because doctors are better trained to help keep us alive, even though our quality of life might not be as good as we would like it to be.

My goal today is to help you better understand long term Care and the effects of long term care event can have on your retirement. So you can start addressing the issues now rather than waiting where it's too late, a long term care event happens when you get to a point in your life, you can no longer perform two to three of the six basic activities needed for daily living. 

These six basic activities are
1. Bathing - Bathing yourself, shaving and brushing your teeth.
2. Dressing - Dressing yourself without struggling with buttons and zippers.
3. Toileting - The ability to get on and off the toilet.
4. Transferring - Being able to move from a bed to a chair or walking without any help.
5. Continence - This is the ability to control one's bladder and bowel functions.
6. Eating - Your ability to feed oneself. 
If you cannot perform two to three of these tasks, you're deemed to be in need of long term care. 

Now why do I say two to three of these six basic tasks because depending on what company you're working with, to try to determine your long term care need some will use two and others will use three.

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Episode 12 is all about annuities. Yes, you heard me right. I did just say one of the most hated words in all of retirement.

For those of you who have had a bad experience with annuities in the past, or have misgivings towards them, I invite you to listen to the show and give me a chance to help you better understand why even many financial planners who have been against annuities for decades are finally changing their tune. And I'll give you a hint. It has a lot to do with the fact we're all living longer than our ancestors did, and that interest rates are in the toilet...

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In today's show, I'm going to be talking about 10 myths that exist regarding the US national debt. Now the general theme for this podcast was derived from a video that was done by Antony Davies of Duquesne University. It was done about two and a half years ago. But be aware that this podcast has been adapted to meet the issues that we're currently facing. 

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We are talking about the two main risks of Social Security today. #1 is the risk of taking your social security too early and #2 is that your social security will be taxable.

In fact today we're going to focus on the second risk that faces you regarding your Social Security and that is that your social security will be taxable.

Now, when it comes to talking about Social Security tax, this is an area that many people often say why it's one of those taxes very much like an estate tax. Why do we have to pay taxes on an estate? When we paid taxes on all the income that we earned during our lifetime that created this estate? Or maybe why do I have to pay taxes on a used vehicle that I purchased when the taxes were paid when the vehicle was sold brand new to the first person who purchased the car? When we talk about social security taxation, it brings about a lot of ways people do not understand why taxes would be applied. But hopefully as we go through the podcast today, maybe you can get a better understanding of why this is the case.

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We are talking about the two main risks of Social Security today. #1 is the risk of taking your social security too early and #2 is that your social security will be taxable.

In fact today we're only going to focus on one of the risks that it faces you regarding your Social Security. Next week's show will be a follow up show to address risk #2

It is very important to understand the history of Social Security. 

Social Security was brought about in 1935 by President Roosevelt as part of the New Deal with America, at this time, it was a insurance against living too long. At that time, the average life expectancy was only age 62. And you could not start taking benefits until age 65. Also, at this time, we had 42 people working for every one person receiving benefits. 

But if you fast forward to 2020, we see that what we've ended up with is a very expensive retirement program and instead of having 42 people working, now it's down to only having three people work for every one person receiving benefits and over the next 10 years, that number is going to drop from three down to two people working for every one person receiving benefits. 

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I'm here to tell you that if done correctly, life insurance can be a very important part of your retirement. And it can also be a great way to transfer assets if you want to to your beneficiaries or to some type of charity. 

Well, today we're going to be talking about the life insurance retirement plan. Now what is this this is a permanent insurance policy that is put in place not net Essentially for the death benefit, although there is a death benefit available, but the primary purpose of the life insurance retirement plan is to provide tax free income during retirement, it's going to be a part of your regular income stream once you hit your retirement years.

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We're going to be talking about risks that face your retirement, I'm going to focus primarily on eight main risks.

1- Social Security Risk
2- Lack of Income Diversity Risk
3- Tax Rate Risk
4- Longevity Risk
5- Sequence of Return Risk
6- Withdrawal Rate Risk
7- Long Term Care Risk
8- Inflation Risk

So how do we solve all these risks? This is a huge laundry list of risks that are facing your retirement. Well, how do you solve These, it's by putting together a well organized plan and focusing more on getting through retirement rather than focusing on getting to retirement. 

What could possibly happen to cause taxes to go up? 
Here are three main things.
1- social security is one of the big ones, 2- Medicare even bigger than Social Security, and it's turning out that 3- the national debt may become bigger than any of these.

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