Disinflation, Case Of The Week, Listener Questions, And Strategies For Investing After Retirement

In this episode Jeff talks about disinflation, his case of the week, answers listener questions, and strategies for investing after retirement. 

What is Premiere Retirement With Jeff Vogan?

Every week Jeff Vogan comments on the state of the market and economy as well as gives advice on retirement planning and wealth management.

When it comes to investing, retirement legacy planning, taxes, your health care the decisions you make today can greatly impact the quality of life for you and your loved ones tomorrow. What you need is straight and unbiased information on the most important issues you'll face when planning for your retirement and financial future. Good news, you found a premier retirement radio show with Jeff Vogan. Jeff is the founder of Premier retirement planning and wealth management. And he's been guiding people financially and to retirement for 30 years. So get ready for an hour of the most comprehensive financial information on the radio premier retirement with Jeff Vogan. And now here's Jeff Vogan, with Jeff Shade. Thank you so much. Welcome to premiere retirement with Jeff Vogan, the radio show that gives you the straight talk and honest answers you need to help you reach your wealth management goals through Smart Investing and careful planning. On today's show, we're going to be talking about current events in particular, dis inflation will also be talking about Jeff's case of the week in which an investment advisor didn't quite have a totally comprehensive plan and how Jeff maybe came to the rescue on that. We've also got your listener questions and later on in the program, we'll be talking about 10 strategies for investing after retirement. My name is Jeff shade, and I'm just here to ask the questions. But of course their words of wisdom is solid advice come from Jeff Hogan, founder and president of a premier retirement planning and wealth management. Jeff, how you doing today? Doing great, always good to be with you and listeners in this area. It's a fun time. That's right. Take a break and talk at sure I talk about finances your money. After all, it is only your retirement all the money that you have saved for your retirement, we want to make sure that you have a retirement which you thrive not just survive. Anyway, glad everybody could join us this week on the radio program. Jeff, let us begin with what is happening in current events today. You know, there was an article Jeff I read that said disinflation theme boosts the markets now I know that the markets have been boosted a little bit lately, but let's talk about disinflation. disinflation would be the opposite of inflation in that inflation is going backward. How do you feel about that headline? And does it really reflect what's going on with the markets? No, it really reflects where our society is and where our government has conditioned us to believe in disinformation and lies as if it's information and good stuff. I mean, you know, we can tell Biden omics. bionomics is created about 25% of locked in inflation, and it's still going up in excess of 3%, year to year. And keep in mind the summertime because I don't know why maybe people were just camping and out and about not doing quite as much stuff. But you know, the inflation level last year also, that was when you know, Biden was out there talking about how Oh, it's only up like a little bit. It's just like only up an inch. And even though it's up a lot, it's only gone up a little bit this month. And so you know, we expect this summertime to kind of cool down. The other thing is, is there's been huge information about lower consumption, consumers aren't buying stuff. Shoot Netflix's a couple of days ago, got, you know, horrible earnings. I mean, shoot, if people are deciding not to pay 10 or 15 bucks, just, you know, to have some entertainment on a regular basis, which is kind of like a no brainer, expensive, people are cutting that kind of stuff that we're Netflix revenues are suffering, and, you know, it takes the NASDAQ 2%. And, you know, Thursday morning or whatever, because it's supposedly led by, you know, Netflix and others, but there's just a lot of hype and Bs, you know, I'm starting to feel like we were back in the late 90s, when I was still kind of young in the business, you know, I'd only been in there about a decade at that point. And all I'd seen was the 90s, which were kind of the roar and 90s. And we saw this hype about the internet and anything that had a.com on it was going to the moon and the market was in a whole new space and it didn't matter earnings were fine, even though companies had no earnings potential, or they were losing money hand over fist and just you know, Merrill Lynch and other companies out there just raising 10s and hundreds of billions of dollars of bonds for companies like WorldCom, which were defunct and basically bankrupt, just you know, saying they're in the internet business, you know, throwing internet cables and fiber optics out there and pretending they had a business model and the stock was going through the moon and and stuff. I feel that's the same way with this like aI craze. I think that's probably more to do over probably, I should probably come back to that because I'm still talking about the disinflation misinformation. But you know, there's a lot of things that are making the market, throw some head fakes and make us think like, it's doing stuff that indicates that there's some great economy out here, and you know, even have some people saying, oh, there's not going to be recession. Now. I think Goldman Sachs Oh, it's official, because Goldman Sachs, you guys said it wasn't gonna happen. Well, what about the official that it was going to happen a month ago from them, you know, everybody has a chance to change their mind. So what changed? Oh, well, we got some earnings reports from a few companies that, you know, maybe banks made a higher profit than they thought because, you know, they didn't go out of business this month, because whatever, you know, a couple of companies got a few extra sales or they wrote off something against you know, their bookkeeping that made it look like they're there. Okay. But the bottom line is revenues are not growing robust. The only thing that's growing in a robust way is market prices typically on NASDAQ or tech stocks that supposedly have something to do with AI the artificial intelligence right so are the isn't really artificial intelligence. I think it's just artificial programming and they believe
Let's intelligence buy into it and let it manipulate us into believing crap. That isn't true. For example, disinflation, excuse me. It's up over 3% that is inflation inflation at 1%. Is inflation inflation at eight or 9%? Yeah, it's almost bordering hyperinflation where we were. But the fact is, is we haven't given back any of it. If the inflation was down to negative three, we go, Oh, yay, good disinflation, we're going back to the way it was. We're gonna get these 20% rate hikes on food and gas, or 40, or 50% 100%. On some stuff that we're paying more now than we were paying a year or two ago, those prices are still up, and they're still going up 3% per year, year over year to 3% above what it was a year ago. Now, that doesn't count all the other year over year gains month to month or quarter to quarter that they report that happened between July last year to July this year, that's just this month compared to last month, and the amount of increase that it made wasn't as high. So there's a lot of manipulation with the jargon. It's used the words that they use to play on people. And I don't know what it is, is these chemtrails that they've been spraying out in the air for the last 10 years has made a stupid or made us complacent or docile or made us to where we have to just believe everything we hear because it's on TV or because somebody in the government said so. Oh, my gosh, the government's the only place that you get elected to and you can start lying legally. Think about it. You didn't know that. Oh, my gosh, think about it. Every congressman, you know, you got these guys up there lying about everything. And they it's all politically bent to, you know, create their agenda and it doesn't matter what side you're talking about. They all can lie. Now if you're a Democrat, you probably believe everything they say is truth. And if you're Republican, but everything they say is lies. And guess what, on both sides are probably all lies. But jority of it is because they're trying to push agendas. The same thing with this economic crap. Oh, the economy's good. You know what, maybe we won't have a recession. Maybe we'll do a head fake. But all I know is everything is at historically overvalued rates. Everything points to a recession other than you know, current earnings boost by a couple of companies that came out but then you know, two days later, we have this like a consumer staple called Netflix. Um, it's honestly it's cheaper than any cable. Oh, right. If people are dropping Netflix at 10 bucks a month or whatever it is maybe 20. If you have old family deal, I mean, people are pinching pennies. That doesn't sound like the economy's good. It's these little tiny, you know, membership sites he's consuming the things that the consumer buys is telling us how healthy the economy is just because a company can cook its books and make it look like they're making money or just because the AI frenzy or this you know, the hoopla that they'll talk about AI look at everybody's gonna benefit by AI look at OB got chat GPT at Microsoft, Microsoft stock goes up 50% The next few months because chat GP how much they make on chat TPT I don't think they charge anything for it. No, they don't start to do they don't charge anything for Jeff and I vast chat GPT a number of things. And if you ask it anything that is beyond 2021, it really can't answer it. And it says that I only go up to 2021 because it's sort of scouring the internet and the information that was available prior to 2021. So I guess the question to you is Jeff, you know, you talked about the Democrats, the Republicans haul this biased stuff. Is there any unbiased financial news out there that people can really count on? Or should they simply just take everything with a grain of salt? Well, I mean, there's still fundamentals. I mean, there's still fundamentals that go back and statistics and you can see what price earnings ratios are, you can see what like Shiller indexes you can see, you know, there's certain charting services and certain trends and things like that, that do show us what happens in history. If you look at what actually happens in history and base your decisions on that I think you're going to be right more often than you'd be wrong. But if you base it on what's on the news, they're thrown out so much manipulative stuff. And like I said, to get back to like chat DPT, it's old news, how are they making money on it? But how is it that the top five or six companies grow in the last six months by three and a half trillion dollars in market capitalization without more earnings, their earnings aren't going up. In fact, the earnings keep getting revised down yet the stock those stocks have grown by $3 trillion, when the entire revenue generated by the AI industry might come in around two or 3 trillion, which is less than the market cap growth in just a few months on the stock. So it reminds me of the.com era where everybody was buying stocks just because it was the thing to do and stupid money was buying it the institutions even back then I think they were kind of buying into that to thinking that the frenzy was going to continue to go but that's typically if I follow the smart money and I look at where it's at right now. There's still more investment officers that think there's too much risk to be buying into the market, but they're loving the fact that people are willing to pay $400 for a stock that should be trading at 75 or 350. For a stock that should be trading at 250. They're happy to sell that stock to you because the market makers are the inventory holders. The market makers are the Merrill Lynch's the Goldman Sachs and Morgan Stanley's Citibank, JP, Morgan's, everybody who's these big firms, these big institutions, they're the ones that hold the majority of stock, they hold inventory. That's how they're worth, you know, billions and trillions of dollars, right? If there's people out there that want to buy it are willing to pay more for the stock than the market value. They're happy to sell it to you and create a new market value because that's what somebody's willing to pay now, but the institutions are not buying stock from each other or they're not bidding up the stocks from the consumers Amen. We're hoarding invidious stuff.
Could we want to keep buying at a higher higher price? Maybe Maybe some are, because you know, the momentum says it's going to go up. And maybe it's the chip of choice in the AI world, but there's just a lot of garbage going on and a lot of noise out there that is not supported by fundamentals. And that scares me. Honestly, it makes me feel like I'm in the 90s. Again, where we're on the brink of this candidate keeps getting kicked down the road. GREENSPAN called it irrational exuberance. I think we're in the irrational exuberance. The fact is interest rates are going up, housing sales are like a third of what they used to be when interest rates were down, you know, okay, inventories not up. But people know, they can't sell a house with high interest rates, because they can't get there. Right. So there's not putting them up for sale. So you know, is that really a strong market concept? Or fundamental, maybe a little bit, but the fact is, is everything costs more than it used to nobody's buying stuff they used or not? Nobody. But you know, half the economy isn't buying stuff. They used to 75% of the people that consumers think the economy's in worse shape than apparently Wall Street tries to tout that it is and Wall Street would love you to believe that we're not going into recession. You know why? Because Goldman Sachs is no, we're not going to recession. We're all out of the woods. This earnings from three companies this week, mean that everything's hunky dory. And we're not going into recession. Well, after the yield curve inverts, which it did a year ago about what June of last year, typically between 11 and 14 months is the average timeframe that a recession hits. So they're kind of looking for it right now. But if you look at the actual stats going back, you know, over 50 years, when you know, seven or eight times this has happened, the recession happens between six and 24 months later, so it doesn't always happen between 11 and 24. We may still get something six months from now because you know, the government's still posturing Wall Street's still manipulating our minds with jargon and disinformation about disinflation, which is still hogwash. I think the Feds still gonna raise interest rates coming up, I guess any day now this month, and maybe even next month or the month after, I think there's going to be two more rate hikes just like they promised earlier in the year, I think they've discounted that as if they're not going to happen, because inflation isn't growing as fast somehow, we don't have to keep you know, monitoring interest rates and doing things to continually monitor our interest rates being so out of whack and we can't have inflation even grown at three or 4%, continually compounding on top of the 20 or 25% that we've already had over the last 25 years, and have that be a sustainable economic goal, when more and more middle class are being priced out of even the middle class markets to buy stuff. So I think it's just more crap. It's just more misinformation, you know, and they they try to censor all the stuff that we hear. But they're happy to tell us that there's disinflation when it's still going up at three, it just blows my mind that 99% of the people not just listening to the show, but anywhere no matter what party they're affiliated can't read that go, oh, inflation is up 3%. That's disinflation, they've got to know that that doesn't make sense based on second third grade English, right words. I mean, excuse me, up is up, down is down. This means down. It's just crazy. Sometimes they just want us to think that a you know a round object is a triangle. And if we sell it enough, people will believe that it is a triangle. But I think the takeaway here is don't be influenced too much by what you read in the media, what you hear in the media, I think, really what you should do is consult with a financial advisor who really can lay it all out for you. Our show is called premier retirement with Jeff volgend. And Jeff, of course founder and president of Premier retirement planning and Wealth Management here in Tucson and also up in Mesa. If all this is confusing to you, and you're interested in how disinflation or inflation is going to affect your retirement, I encourage you to call Jeff here at the office and get your premier retirement roadmap at no cost and no obligation. Jeff will cover and income plan investments that support that income plan to tax plan, health care costs and estate plan. But most importantly, answer your questions that are keeping you up at night about how you're going to retire and stay retired. There is no cost for this there is no obligation. It's simply a conversation with Jeff to get your questions answered to get yours call 5207809 59 520-780-9059. You can also request your plan online at Prem ret.com. That's PR, e m r e t.com. Once again, 5207809 e 59. One call could make all the difference. Jeff, let's talk about the case of the week. This is something that we're going to do on the show every week. And we're going to sort of recap a case that you had this week and a problem that one of your clients had or potential clients had without naming names. Can you fill us in on what you talked about with this potential client or client this past week? Oh, I got to name names as John and Mary. No, I'm just kidding. Jane Doe and John Doe. Anyway.
Names. What are some names just their fictitious but this is a real case. I actually it's funny. You said yeah, we're gonna do a case study. What was your case? So I actually this week was actually a vacation week and I decided based on whether or not to go on vacation. Just hanging around here. I ended up having a few emails and I got this email from a client that I was meant to be just under you're basically finished up the first year. Now let me back up a little bit. Just kind of a lot of people say gosh, Jeff, you know, you don't have that many people in your office. But man, you do this huge amount of work and you have so many clients. How do you do this? Well, we outsource a lot of that. We have a trading team. We have management teams. We have compliance people we hire that, you know, they work out of different offices. We outsource a lot of that
stuff. So we don't have to have 100 employees here to babysit. But organizations like mine that are independent that are fiduciaries, there's about 500 of us that have bonded together through a particular organization that's based in the Midwest. And we share best practices. And so we basically talk to each other about, you know, how we diversify how we use more than just portfolio management. Because when you get to retirement, you know, the people in our business, we're very retirement focused. And so we talk to other people that do similar business like us, there's probably 10, or 12 of us in Arizona, there's five or 10 in every state, and we got about 500 of us nationwide. I mean, we've got just on the portfolio side with over 20 billion under management, we've got probably another 50 billion in annuities and life insurance products, because they create safety. And we have an estate planning team and help us do trust if they're, you know, beyond the scope of what we do in our particular office. So there's these teams of support organizations that are so good at what they do, I can't even hire those people. So instead, I just share my fees with them. And we also share best practices and have meetings several times a year. So let me back up from that. So that might just help other people understand why you know, I do most of the talking and why I'm able to visit with you know, almost everybody that comes in I you know, have a couple of systems of servicing agents that take care of some menial tasks. I have some admin I appointment setters and things that just basically manage operations here in Tucson, and then a staff in Mesa, but we have access to so many things, you think that we're a huge company, what we are when you combine all those different assets. So anyway, this client comes to me about a year ago, they moved from a different state, I happened to be working with one of the people in our network, which is kind of well, not that we don't try to steal other people's clients or protect them. But here's the deal. We're all independent, they wanted to move and they wanted to have somebody a little bit closer, I said, Well, let me just look at what your situation they had been from another state. And with some of the stuff that we talked about in these, what we call best practice meetings is you know, how we diversify how we don't just use stocks, bonds, and cash how when you get to a retirement standpoint, you like some predictable and guaranteed income. So we might use income annuities or an annuity with an income rider or index annuities that keep your money safe and protect principle so that you can rely on that for your income and withdrawals for the next five or 10 years in case the markets a little ugly, you can wait on that money, we use life insurance products for tax free income or for that little slush bucket money. That's a Roth alternative. But it's like a Roth on steroids because you can borrow from your death benefit, tax free, and it never shows up as income and never gets 1099 to you like Roth income does. It never increases the amount of income you show the IRS or you show the Medicare people to charge you more for your Medicare premiums, et cetera. And I go on into a lot of stuff. And hopefully, really all I'm doing is creating a lot of questions for the listeners and my advisor, as I'm talking to you about that, should I be thinking about this. And if you should, you should be dealing with somebody that does more comprehensive planning like us. So again, like we all do this comprehensive planning. So they went to this comprehensive plan, I go, Oh, I know that person, they go to some of my meetings, and I looked at the plan. And sure enough, they had diversified. This particular case was about just shy of $2 million, without counting the home. And they had you know, about three quarters of it's still in market stuff. And these people really didn't have a risk tolerance. Most of the money was the wife's color Jane. And I said, Well, why do you only have this tiny little loop life insurance policy that might generate 10 or 15,000, in tax free income in a few years, when you're done funding it when your taxable incomes over $150,000. And your gross income that's showing up on your tax returns is around 200. You know, when you're in a 200 income level, and even if it's not all taxable, if it's your income, Medicare will increase your Medicare premiums. So that's one it's like an extra tax just because you make too much as a married couple. And there's some things that they can't really do away with, because they've got pensions and Social Security, they're just getting close to that age where you know, in a few years, they're gonna have to start taking the required minimum distributions out. And when I looked at their situation, I said, Man, if you want to keep living on 150, you're gonna have to keep all this income up. And this little tiny life insurance plan is not working for you, we need to accelerate this and you should have had maybe $100,000 going into a loop every year at least putting maybe a third of the 2000 maybe six or 700,000 Total into a plan where your money is now stealth. And by the way, you don't actually use lert money life insurance retirement plans principle protected use life insurance just to get a tax break, essentially, you're borrowing from your death benefit, you're living on your death benefit, why you live, you typically can get two to three times what you put into it out in income that never shows up on your tax return. So instead of having 15,000 a year, we had to bump it to where it's more like 45 or 50. So that now that income that shows up anywhere near a tax return grosses out at less than 150. And the taxable income is down around 100. So basically what the case was was they had dabbled into a comprehensive plan but didn't do enough. We revitalize the plan and said, Hey, by the way, oh gee, and they weren't very happy that we're down about what 350 or $400,000 in market losses last year, which they although it didn't derail their plan, because they had a sheet particularly had saved quite a bit and they had some good pension money, some other things that were you know, helping solve their income problem. I mean, they they live Okay, so it didn't totally ruin the problem, but it made him sick and they don't want to lose money. I said, Well, okay, well, why don't we take another 500,000 or so and put it in some principle protected asset that can't go backwards anymore? Oh, and if the market goes up like it has, it'll gain I mean, she's on an annualized rate.
returns just in the last few months about 1212 and a half 13% per year is something that has no risk of principle. Well, that's pretty good upside even though you know if you go year to date the market NASDAQ's a little bit better that the markets up about that. But you know if you take last year's losses into consideration which this would not have lost anything you would have been adding gain. So we just basically took a plan that had started looking, it basically dabbled in the realm of comprehensive and we tweaked it to where now the taxes are going from, you know, 35 to 40,000 a year in taxes. And as soon as we get done funding in the next four or five years, the taxes are going to be under $20,000 a year. So you're saving somewhere between 15 and $20,000. In taxes on income, if you just do the plan. Now, here's the rub, people forget why we make plans and why sometimes tweaking a plan might seem a little weird at first. And here's the thing, there is a million and a half dollars in qualified funds that are going to be taxable at age 73. And these two people are about 68. So five years from now, they're going to be forced to take out 60 or $80,000. That's if it doesn't grow probably 80 to $100,000, in forced income as required minimum distribution have to pay tax on it when they need it or not. Now, they're already living on about 30 to 40 of it anyway, well, why not lock that in at 30 or 40 for the rest of your life, but move all the rest of your money to something that's tax free and can still generate 40 or 50,000. More in tax free income. What that means is over the next five years, you're going to pay an extra 15 or $20,000 in taxes for five years. But remember, we just dropped the tax levels $20,000 For the rest of these people's lives. So in five more years, so all you have to do is make it to 78. And they break even anything after seven, eight, they're saving taxes. Now if Jane who was very healthy, very healthy, in fact, she got more alert, she's 68 years old, got a super preferred rate. So she's really healthy. What if she lives to 100, if she lives to 100, that's over one and a half million dollars in tax free income, still about a half a million or more in tax free legacy money, what's left are the death benefit. And if you look at that, from a taxable standpoint, had she left it in her IRA, in order to net that type of income, she would have had to pay a lot more than 500. Out I shouldn't say he they because even though it's her IRAs, predominantly, he has a pension and he didn't get Ira just got a pension. So he's got income that we can't really do anything about. But her situation, we've got to change and manipulate. But we've got to do the whole thing, we've got to do the math, we got to show it on a spreadsheet. That's what we do on our roadmap. So we find out okay, by paying $15,000 more in taxes. So pay 75,000 more in taxes now, for the next five years, you'll save about 500,000 in taxes over the course of your retirement. Is that a good trade? I mean, where can you invest $75,000 Right now, and know you're gonna get a return of four or five times that or more? You can you can do it on tax planning, though, if we know what the tax code is, we already know that we're in the 25 or 28 bracket for the rest of their lives. Why don't we 00? And by the way, what if they could save about 1500 to 2000 a year just on Medicare premiums? Oh, and what if down the road, they adjust Social Security based on your income and instead of their adjusted gross income being around 200. Now their adjusted gross incomes around 130? Well, I would anticipate that they'd be seen as maybe less of a rich person, even though they're living on more spendable money than they would if everything was coming in and the tax column as the tax adjusted gross taxable income. So again, the case of the week is just somebody who had dabbled in it thought they were doing okay, but the only reason they thought they weren't. They weren't even think they weren't doing okay, they came in bragging about the plan and just said, they just wanted more of a local guy to look it over. I said, Yeah, I can look it over. And I could do the same stuff, we're just going to do the complete plan, they never saw it on a spreadsheet, they never saw what they were doing now how it was gonna affect them five, or 10 or 20 years down the road, they never saw the full picture, what I do is I put it on a full picture. And if what they're doing doesn't make the perfect picture, we paint a better one, and we tweak it a little bit to make it better. So again, the reason I got a call is Why are my taxes going up? 20,000 I think I want to go back to the old guys, because my taxes were low. I said, Well, wait a minute. No, no, no, no, over the course of your retirement, you got to save about half a million more in taxes. And you would have if you've gone the other way. Oh, okay, that's a pretty good investment. Yeah, tax planning is an investment, you may have to pay a little bit now on less money than you will later over the course of your lifetime over the next couple of decades, three decades, maybe more on more money, because you're gonna have to pay as you go as that income comes out at full tax rates. That's the case of the week. And Jeff, that is a great example of the sort of comprehensive plans that you do. They're a premier retirement, how you really lay things out and help people understand their taxation strategy. Also their investment plans. If you've listened to this conversation, and you're saying to yourself, you know, I really need somebody to show me how this works, and to lay it out in a manner that I can really understand it and I want a comprehensive plan. I invite you to call Jeff at Premier retirement and sit down and talked with Jeff it's called our premier retirement roadmap, the number to call is 5207809 8059. Now keep in mind, there is no cost. No obligation is not going to cost you a dime, no judgment five to 780 9059. Shall you gather some basic information from you and put you on Jeff's calendar? It'll be a brief conversation. It'll be about 30 minutes or so but it could be the best time investment that you have.
ever make once again five to Oh 70 to 9059 No cost no obligation for that. You can also request your plan online at Premier att.com pr EMR e t.com. Time for a big Jeff, we come back we've got listener questions later on in the show. We'll be talking to you about why it's important to invest all the way into and three retirement. All that and more when our show continues here on 790 K in St. Tucsonans most stimulating tone
Welcome back to premier retirement with Jeff Logan, founder and president of primary time planning and wealth management in Tucson and also up in Mesa. If you're just joining us. Remember, we are a podcast. If you've missed any part of the show, or you want to hear it all over again, for clarification, simply go to wherever you get your podcast and search Jeff Bogan premier retirement podcast you will find this show and others right there. And we do post a new podcast every week for you. If you want to make it simple, just simply Google Jeff Hogan premier retirement podcast and you'll find many different places that you can hear this program. And once again, if you'd like your premier retirement roadmap, no cost no obligation, the number to call 520 70 to 9059 520-780-9059 or online at Prem red.com pr EMR e t.com. Jeff, questions of the week this week, we'll start off with Steve in our valley. And he says Hi, Jeff, I've been listening for the last couple of years, I would thank you for providing insights and helpful guidance. As I approach retirement, we're trying to get a grip on family legacy. We have two great daughters, both in their late teens. One is on the autism spectrum. We hope that you'll thrive and be self supporting but the jury's still out on that. Do you have any guidance on family legacy? Now I'm not looking for legal advice. I'm more curious if you've had any observations from the collective wisdom of your clients and yourself that you've gained in your walk in life. Thank you for your advice. Yeah, well, thank you, and welcome to the autism community. But it's a trip, I think, you know, the more I realized that and I think you but based on your question, you probably know that I have a daughter with dodge that ICC just passed away. I don't know if I haven't announced that on the radio, but made it to her 24th birthday, but I'm gonna get a little tender talking about autism and bless her and my daughter here. But anyway, one of the things that, you know, I think is important to do with anybody who's on the spectrum. And you know, we do participate in Autism Society here in Tucson quite a bit with a title sponsor on almost all their activities. And because of that a lot of people have come to us for not legal advice. But for our estate planning advice. I'm a certified estate planner, I'm not an attorney, and I'm not gonna try to get you out of some legal mess, but I can tell you how to set up a trust that would protect your daughters of shares, you know, one of the things that, you know, most people do that have any type of special needs children, whether it's a, you know, high functioning spectrum, or low functioning spectrum, your daughter might be very high functioning in some ways, but be really horrible with money. And you still want to protect that asset from creditors, creditors, and just her own inability to manage money. So you can do what's called a special needs trust. And that can be just a section for her benefit in a regular living trust, where you could put the more I guess, functional daughter, the one that's not on the spectrum that maybe has a little bit better focus on and handle on managing money that could actually take care of sister Hopefully, they're, you know, they get along, you know, our kids, I gotta tell you, I was blessed that every one of our children's just love making to death, right and would have done anything, it would have totally been their caregiver, you know, had Megan outlived any of them or us. But you know if that's the case with you, and bless her if she is willing to do that, because it is a burden and is troubled in many cases. But it's also a blessing to be able to serve one of those special children or Father in heaven. So try to stay out of the emotional realm here. Back to that, you know, a special needs trust, you can put as bad as many provisions as you want on how that money would be paid out. But here's a big key. And that is if there's any benefits. For example, my daughter was in a care home and she had a lot of ddd and state benefits that kind of helped cover some of those expenses. Because she was an adult, we did still have guardianship and oversaw all of our care. But there were certain programs that were available to her that took basically her disability, Social Security paid for some of them. And then there was a little bit of discretionary cash that we managed. But if we ever died and left her million dollars, or whatever, as her share of the estate, or whatever it comes out $100,010 or 10 million, whatever it is, if she would have access to it, if it were not to be protected by a special needs trust, or a trustee would have the ability to pay for any care that she needed, then no state or government entity would be required or obligated in any way to take care of her until that money was spent. So you know, given the fact that you and I and all of us have been faithful taxpayers, we've had the extra workload of Ave maybe deal with somebody on the spectrum that needs a little bit extra help. And yet we still paid into the system and other very willing people have paid tax money and I'm willing to pay tax money, I have no problem with my tax money going to people that can take care of themselves in a full benefit or even totally disabled to whatever they are in the spectrum. So I have no problem with you wanting to take advantage of making sure that those government benefits at you and every other taxpayer that's willing to pay for those benefits.
It's still there and available for your daughter when the time comes. Now there are people that I think milk welfare and cheat and finagle. And you know, this wouldn't be the case. But anyway, do a special needs trust. So you can protect those assets so that your other daughter and other family members and other entities that you want to leave money to are taken care of, but also that you leave that asset set aside so that if ever something happened, where government benefits were reduced, if the trust funds of the state that she's in go broke, and they're not able to supply those benefits, that that inheritance you leave for her is in the trust and available for her future needs, should she need them or not have them covered, you know, if you don't do that, and the government ends up spending your money, and then you get back on the disability, you know, department aid, and then they just own the plan, or somehow it falls through and there's no money there or in your trust, and you basically blow money you didn't have to blow so again, as a certified state planner, and as somebody who's helped people through a lot of special needs trusts, including for my own daughter, which now we don't need but we happy to help walk you through that situation. I mean, it's not rocket science, it's just putting in the disclaimers that say, Hey, this money is interest is set aside for my daughter's benefit, but she will not receive any money in an amount that would take her off of any particular government benefits that she receives period. And so you know, that disclaimer, language allows your trustee the other daughter, I assume, or whoever you choose to withhold those assets and not make them available in order to have her bumped off of benefits that she would otherwise be receiving, you know, as an adult. Steve, thanks for that question. You've definitely touched our hearts here with Jeff and I and we invite our listeners to check out the Autism Society of southern Arizona, they definitely need your help. And the website is a S dash az.org That's a S dash az.org They're doing some wonderful work. Our next question comes from Charlie in Oro Valley related to Roth conversions. Charlie says, I've been listening to your shows for years. I look forward to our walks together every Saturday. Thank you, Charlie, my wife and I are both 62 and have recently retired, we're blessed to have a resilient plan in place with assets over $10 million. Now that I have some spare time, I started looking at optimizing our plan relative to taxes and estate planning. Like many baby boomers, we have a lot of money in pre tax assets about three and a half million dollars that'll lead to some large required minimum distributions in the future or to large tax burdens to our two children and seven grandchildren. Due to some deferred compensation I received for the next five years, I don't see our tax rate dropping below 32%. We have a donor advised fund, it'll be all of our charitable plans for the future. My question is that given our tax rates, should we be using Roth conversions or just wait until we start taking required minimum distributions? My main concern is I really would like to avoid leaving a big tax bill for the family but also cringe at April tax time. I know that was a long question, Jeff. So I'll let you answer it. Well, let's just say there's a bigger picture than the one you're presenting here. I mean, tax wise, you haven't even talked about the biggest tax you're going to suffer. And that is the estate tax. Maybe you've thought about it, but Roth conversions aren't going to save you from the estate tax is a different plan that I'm going to have you consider. Now if you're both 62, you've got probably let's just say you lived in it does three decades, and generally speaking $10 million will generate if you want it to about 30 million in cash flow, if you want to use it all up. Now you probably don't spend a million dollars a year, I'm guessing that because you saved 10 million unless you were CEO of Amazon or something, but you haven't probably spent anywhere near above or even at your means of expenditure. So I'm guessing you're going to acquire, you're going to grow that asset base. So let's say you only spend a couple 100,000 a year because you've got all your bills paid. And when RMD comes in 10 years, maybe that three and a half million dollars is now if it only grows by 7%. And let's say it does it just for the sake of purpose of this conversation, you're gonna have $7 million in pre tax assets. And those are going to be forced upon you at approximately 4% The first year and it's gonna grow to 10%, then 20% and 25%. By the time you're 100. So let's just say you're at 4% 4% of $7 million, what $280,000 On top of your Social Security and other things. Yeah, you're gonna be in the 32% tax bracket forever. Oh, and it just goes up from there. What if right now, if our top tax bracket is 37% for the next three years, what have you paid 37%? Now on all that money, you got, wow, I'd have to come up with a million dollars. Yeah, you come up with a million dollars. But what if that $7 million, that's going to be 7 million in the next 10 years becomes let's say $10 million in forced income and another seven to 10 in leftover assets for the kids to pay tax on? Oh, by the way, and I haven't talked about estate taxes yet. That's a 40% tax rate. We'll talk about that later. So I think in 20 or 30 years, you know, you're gonna end up if you don't pay a million now. I mean, let's just say that to do either a Roth conversion over the next three years as a screw it, man, I'm in the top tax bracket, but I guess I'd almost be willing to bet a significant amount of money, I mean, serious amount of money. The top tax bracket will not be 37% or even 39% 10 or 20 years from now. It's not going to happen. It's it can't they can't do math that way and keep our government functioning the way they print money. So it's just not going to happen. So for you, yeah, look at 40% or better as your future
tax rate and look at paying taxes. Now, if you can on as much money as possible, by the way, you can pull out 340,300 $50,000 in taxable income per year for the next three years and only pay a marginal tax bracket of 24. Right now that 32 that you're talking about, I think is what you considered, you'd never be below that 32 going forward in the future. So plus you got some deferred compensation for the next five years, that's probably an accelerated payout of a pension, which by the way, may be available to actually put into either an IRA converted to a Roth later, or here's another thing, if you got three and a half million in pre tax dollars, you know, maybe you've got a few million dollars in real estate, another few million after are already tax dollars, which you know, may generate dividends may generate some capital gains taxes, maybe mutual funds that generate, you know, trading gains that you don't even know what's going to be until the end of the year. So you have this surprise tax bill, what if you could put this all in a plan where you know, within a reasonable maybe 10, or 20, or $1,000 or so what's your worst and best case tax situation will be pre planted out and keep yourself in a low tax bracket, give your kids a tax free estate. Now here's what I'm talking about. If you're let's say you only spend a few $100,000 a year to live on he that's plenty because you have all your bills paid on that $10 million estate in 30 years, let's say it's, it doesn't even double twice, or three times, if it doubles three times, you realize that at 7% annualized rate of return, if you didn't spend money, it would be about $80 million, you realize that if it doubles three times, so if you spend half and only doubles, only half of that money doubles, you're still looking at 30 40 million potential dollars, that's a lot. Now, you can do a couple of things. You can either leave those IRAs, take the minimum amount, pay taxes on or whatever the bracket is, leave all that money to a charitable remainder trust and have the trust, keep 10% as their actual charitable remainder, but give 90% out to your heirs over you know, the next couple of generations. So you've got, you know, nine heirs between the kids and grandkids, right. So, you know, that's one way to do it. Or what you could do is pre plan your estate plan by moving into something called an eyelet, irrevocable life insurance trust. Let me just back up here. If you have $40 million in taxable assets, when you die based on what they're planning to do, right now, there's about $23 million, you can have in a state value and get out of estate taxes right now. But that's not going to last forever. Nobody believes that everything in the green book, everything in any proposals, say that they're looking at moving that estate tax limit to about 4 million per spouse, or about 7 million combined. For single our spouse, kind of as a household basis, let's just say it's $8 million, you don't have to pay tax on the first $8 million of the 40 when you die when you're 90, but you have to pay tax at 40%. On the remaining 32 million. Okay, even if it's in Roth IRAs, even if it's in life insurance, even if it's in real estate, even if you get a stepped up basis on income tax on any of it, there's still a 40% estate tax, what is that $12 million? Are you ready to pay $12 million to the IRS when you die, you're complaining about paying an extra What 20 or 30, or 100,000. Now by doing a Roth conversion, wait till you're dead, and you can't even do anything about it. And your kids can either Oh, and they only have nine months to come up with the money, they have to sell real estate at fire sales or sell stock when the markets down or other things like that, you can be put in a situation where you lose even more money based on just market cycles that you might be in when you and your wife end up passing away. So again, you have a lot more problems. And this income tax issue is it's a future state taxes. So what if you took some of that maybe few million dollars that you have in non qualified or in other words, non IRA assets, let's say you converted, since you have to take the RMDs out anyway. And you just started taking $300,000 out of your IRAs per year just pay taxes on them out of your after tax money. But use that $300,000 That you take out of your IRAs now and called it gifts to your kids and grandkids. Now you and your wife both can give a little over 15,000 a year per kid or per err and call it a gift and be exempt from the gift tax, which is basically an estate tax that you would have to pay on any amount over and above that. So that puts you close, you're pushing about 300 grand. So if you could come up with 272 80 or 300 grand somewhere in that range, this is round it into an islet, you can move that asset outside of your estate, and by perhaps, oh, let's say probably eight or $10 million in death benefit outside of your estate, which means now you give $10 million tax free outside of your estate. Instead of that, let's say over the next you know, several years, you have to take IRA money out and you ended up taking out six or $7 million out of it, you pay almost half of it in taxes between state and you only have a few million of that left. And then your kids have to spend 40% of that in taxes. So you know 10 million in actual assets becomes you know, two or 3 million net Well, in this case, you can actually move assets out of your state not have to be included in your state and save yourself what's probably 40% of that you're looking at the equivalent of about $6 million in future taxes by paying taxes now on money, you're gonna have to pay taxes at a similar rate over the rest of your life anyway, and you get to reduce your estate by paying taxes. Now, a bottom line is when you put it out at the spreadsheet, I could probably show you 10 or $20 million in taxes saved over the course of your lifetime. If you want to do a plan, is that worth spending an hour or two with me actually, it probably be more than more than a few hours. But is that worth it? Oh heck yeah. Why not? What are you
could just say, Well, I just want to build a really big estate, I want to have $100 million. And I don't care if I give 40 or 50 million to the IRS, or maybe 60 or 80 million because they're going to estate tax me even at a higher level in 30 years, because they have to balance the budget. And they don't really care about my money because they think it was all because the government was my friend that I acquired all these assets anyway, now it's because of you. And you should be able to keep your money. That's why our slogan of our company is it's your money. Keep it that way. For x sake. It's your money, keep it that way. It's your money. It's not the IRS money, you've earned it, keep as much of it as you can. Now, Hey, it's okay to pay your fair share. But would you rather pay now when rates are lower on less money? Or would you rather pay later at a higher rate on more money? I mean, that logically says you should pay now right? Pay Now pay me now pay me later. Bottom line is you got to do a plan. Charlie, thanks for that question. We're gonna be sending y'all Jeff's book retirement the road ahead. If you would like to get that book, you can do it two ways. One of which is to send us a question. If we answered on the air, of course, we will send you out that book, that's very simple, you can send us your question, simply go to Prem red.com PRE. Mr. et.com, you can contact us from there. The other way that you can read that book is simply go to Prem red.com. upper right hand corner, there is a Resources tab and under that you will find book, you can download your free copy of Jeff's book retirement the road ahead right there. We appreciate you listening to us. And we'll have more questions for you next week. In the meantime, if you've got questions like Steve and Charlie had, and you didn't have a chance to get them answered on the air, you can do that by getting your premier retirement roadmap. And you can do that by calling 52078 o 9059. It's not going to cost you a dime, it'll take about an hour of your time. But it could be the best time investment that you'll ever make. Once again, 5207809 59, no cost for this. There is no obligation whatsoever, just a friendly conversation between you and Jeff. So you can ask Jeff, your individual questions and get the answer is tailored specifically for you. You can also request your plan online at Prem red.com. That's PR EMR e t.com. Jeff, let's talk about strategies for investing after retirement. I guess the first question is, why is it important to continue to invest once you're retired or continue investing on into retirement? Well, it may or may not be it may not be your cup of tea and may not be a fit for you. Some people do really fine with just guaranteed income that, you know takes care of all their bills, and they don't really care to have to watch the market. And it's just, you know, a stomach ache for other people really liked the rush that they get from having some money exposed to the market, the upside, they like to be aggressive on some of their money. Some people have so much guaranteed income, that they can risk all of their money. Everybody has a different risk tolerance, a different value system and a different reason for investing. But I believe that you know, unless you just want to stick your money in cash and spend it down to nothing, which honestly, some people can do. And you can do that in an immediate annuity. They're kind of old school and he basically buy a pension and it dies when you die. And that's it. Well, old pensions were like that, that those annuities kind of give annuities a bad name, to be honest with you. But there are a lot of ways to buy principal protected products that are strategies that are available in products that are available through insurance companies that have guaranteed principal, but still rely on the market upside to generate the gains on those products. So I think investing even though maybe some of these products that I'm talking about the strategies I'm talking about for people that don't really want a lot of risk, because they don't want downside still have the ability to make money on the upside. I think making money on the upside is important because you know whether it's fixed interest at three or 4%, I mean, shoot, I didn't like bonds at one or two and CDs zero. But I kind of like the world we're in right now where people pay a fair rate of interest to borrow. And they also get a fair rate of interest, you know, when they park money someplace and save without taking risks. So again, investing is basically parking money to hopefully get a return. Right? Isn't that what we're doing? Sometimes people an investment is just an investment in peace of mind where you just want to park money and no, it's there for an emergency. So I don't consider an emergency fund a non investment, that's an investment, it's an investment in part of the needs that you need to consider for your portfolio and for your total plan. But as far as the upside goes, you know, I think to the extent that you can afford to take a loss or to not freak out if the markets down if it's a third of your portfolio, a quarter of your portfolio, whatever investors have that has long term upside potential, you know, I think AI does have upside potential, I just think the potential has already been more than priced into the stocks that are going to be the players in the AI space. I think the players that are going to end up doing really well in the AI space are companies we haven't even heard about yet companies that are you know, niche products that build stuff for these bigger companies that are getting all the market attention right now as far as AI we got the Microsoft's the apple that even Tesla and Amazon are getting the AI space considering, you know, AI companies, you know, Nvidia being their chip but you know, Nvidia is not the only chip maker yet shoot their market cap would suggest that they're the only ones going to ever sell a chip to anything AI. So you know, are we willing to pay, you know, three or four times what a stock should be worth now because it might be worth that in five or 10 years, I don't know what that means is you're going to probably have to wait till it's really valued at that and I don't think it's going to be overvalued for such a long time that you're going to be happy by an end right now if you're not already in kind of a buy and hold scenario. Now some of our clients are buying hold for some of their assets when the market got over the last year the vast majority of our
clients, they would trust me to measure the risk reward. And if the market is more risky than reward oriented, then we go on the sidelines and make fixed rate of interest until the market looks a little bit more promising, the market looks promising if you look at the trend that is going up, but the market doesn't look promising. If you look at the underlying fundamentals that earnings really aren't growing, they might have bounced higher than their downward revised estimate from a quarter ago. But that doesn't mean that they're thriving, they're still maybe not on track of what they were two years ago, when they were on a growth trajectory, yet, sometimes the price of those stocks have gone back to what they were before the market crashed, yet earnings are last price earnings ratios are higher, you know, can we really, you know, with a credit cycle the way it is, with higher interest rates and less people buying things? Can we really get that robust economy where people are buying so much that the GDP grows at a rate that's much higher or at least as good as the growth rate on the inflation? I mean, if inflation is higher than the GDP growth rate, then really, it's really just inflation is not really growth, right? It's because they're using the actual revenues in terms of what GDP growth is. They're using actual costs of different things to determine what our inflation rate is, and we're still having inflation. So, you know, are we really in a good place to start jumping in the market when it's already priced higher than it is historically, ever? Again? Do we want to buy into the.com? Boom, in 1999? No, the time to buy in the.com, boom, would have been 9096 or 95, right? And write it up for four years and get out in 1999, before it crashed? 80%. So you know, I think this AI, there's probably going to be some shake up, there's probably still room for, you know, the, I guess the actual definition of recession to occur, still have almost a year left before that window of opportunity. And probability disappears, even though the highest probability is right where we're sitting now. And because one big brokerage firm says, Oh, we got good earnings in banking in the XYZ sector, and some company bought a bunch of tractors, so the Dow went up, that means we're not having a recession. Well, that doesn't mean anything's when you look at people that are canceling their Netflix, yeah, 20 bucks a month or 10 bucks a month because they can't afford food, because inflation is still growing at 3%. That's still a problem. So again, I think you have to look at the whole picture, you have to look at timing, if you want to be a long term buy and hold investor just buy good solid stocks and just ride them in but don't get freaked out and call me go oh my gosh, Jeff apples down 20 bucks, what should we do so no, if you bought apple because you want to hold it till you die, then hold it till you die, you know, and let that be your stock portfolio, your buy and hold portfolio if you're trying to time the market. So you can make a little bit of money, but you don't want to lose money in the bad markets. And we need a little bit more of a tactical approach, we'll be in the market, when it looks like we have a better opportunity for growth and the pricing is fair, if the pricing is high, and it looks like the odds are against us, then let's not be in the market, even if other people do drive it up. You know, just because you can run across the freeway full of cars and you might not get hit doesn't mean it's a wise idea. Because there's a really good chance you're gonna get squashed. And more often you will. So again, you know, you don't want to be you know, playing with fire playing in a you know, in a dangerous area. And I think the stock market is a little bit dangerous right now unless you can afford to ride it out for a while. So again, everybody's different. Everybody's got a different style of investing. Everyone's got a different risk tolerance. Some people are learning what their risk tolerances right now last year and this year, because it's the first time they haven't had a job with a paycheck that paid all our bills, they've been relying on their investments, and it actually cased and visit with your financial advisor, come see us and we'll put a plan together so that you can at least get to a level of where you're only risking the amount of money you can afford to risk and you're living on the money that will pay all your bills and give you the peace of mind knowing that no matter what happens in the market, you're gonna wake up next year to a mailbox full of checks that will pay all your bills that month. If you have questions about whether or not you should invest in retirement, once again, call Jeff at Premier retirement 520-780-9059 and ask for your premier retirement roadmap. Again, no cost and no obligation for that it's 5207809 at 59 or you can request it online at Prem red.com prmret.com. Jeff, we're out of time for this week. I want to thank you for your time but most of all, thanks to fine people here at the Greater Tucson area for listening to us for Jeff Vogan. I'm Jeff Shade get out have a great weekend. We'll talk to you again next week with another edition of Premier retirement right here on 790 k and S T Tucsonans. Most stimulating investment advisory services provided through premier Wealth Advisors LLC and Arizona state registered investment advisor securities transactions are placed through TD Ameritrade insurance and annuity products are offered through premier advantage Inc. DBA. Premier retirement planning and wealth management investing involves risk including the potential loss of principal any reference to protection, safety or lifetime income generally referred to fixed insurance products insurance guarantees are backed by the financial strength and claims paying abilities of the insurance carrier this show is intended for informational purposes only not to be construed as advice or recommendations do to show format accuracy and completeness cannot be guaranteed by Premier or urine its representatives do not provide legal or tax advice and they only conduct business with residents of states and jurisdictions where they're properly registered.
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Jeff Logan from premier Wealth Advisors and we specialize in helping high net worth individuals build on the success that they've already created. We want you to keep your lifestyle forever and that's why we're relentless when it comes to protecting what you have will help you combat unnecessary fees that higher net worth investors pay through overlapping investments and keep you from paying too much in taxes. Although most of the families we serve have saved a million dollars I take a blue collar approach to financial planning. Like many of you, I was not born with a silver spoon and can understand just how hard you work for your money. So whether you've saved a modest amount or over a million dollars premier Wealth Advisors exist to help you grow your nest egg and to provide everyone the service and advice they need to feel like a millionaire. Call now. 520-780-9059 or visit us at Premier att.com That's p r e m r e t.com investment advisory services offered through premier Wealth Advisors LLC and Arizona state registered investment advisor