Welcome to How to Retire On Time, a show that answers your questions about all things retirement, including income, taxes, social security, health care, and more. The show is an extension of the book, How to Retire On Time, which you can get a free digital copy today by going to www.howtoretireontime.com, or you can grab a physical copy on Amazon. Just search for How to Retire On Time. My name is Mike Decker. I'm the author of the book, how to retire on time, but I'm also a licensed financial adviser, insurance agent, and tax professional, which means when it comes to finance, we can pretty much talk about it all.

Now that said, please remember this is just a show. Everything you hear should be considered informational as a not financial advice. If you want personalized financial advice, you can request your wealth analysis from my team today by going to www.yourwealthanalysis.com. With me in the studio today is mister David Franson. David, thanks for being here.

Yes. Always happy to be here.

David's gonna read your questions, and I'm gonna do my best to answer them. You can always text your questions in to (913) 363-1234. Again, that number (913) 363-1234, or you can email us at heyMike@howtoretireontime.com. Let's begin.

Hey, Mike. What's the story behind your company name?

They probably didn't even spell it because people get that wrong all the time.

Yeah. I'm like, what's the story behind, never mind, your company name.

Yeah. I don't wanna get it wrong. Oh, so the company name is Kedric. We made up the word. K, k e d r e c, but there's a story behind it.

I mean, you know me, if you've been listening in now, there's always a story behind something. So Kedric is my last name Decker Reorganized. And the whole idea is people actually have they have the right resources, they're just in the wrong places.

Okay.

And so frankly, what we do here day in and day out isn't saying, hey, you need to invest in the market. Most people get that. It's that, hey, maybe you shouldn't be taking this much risk, or hey, maybe you're not taking enough risk or calculated risk. Maybe you can keep all your assets in CDs, but maybe you shouldn't. Maybe you keep half your assets in CDs or CD equivalents, and you put some assets in the markets that you don't need to touch for ten years.

It's about aligning what do you want your money to do for you? And then what's the portfolio that supports the vision? See, too often, people fall into this trap of, hey, I wanna invest my money, what should I do? And they get some sort of stock bond fund portfolio, or they buy some insurance product from some insurance agent that they think is a financial advisor, or whatever it is. The portfolio shouldn't dictate the plan.

The plan dictates the portfolio. So here's an example. There was a guy that called a while ago, and he said, look, I think I'm doing okay, but everyone says I should be doing something different. What's going on? I said, well, what do you want?

He says, I'm gonna live off my pension. I have social security, which is more than I need. I wanna grow things for legacy. And everyone I'm talking to, he was like in his mid sixties, wants to put most of his money in bond funds. And he says, I don't want bond funds, I don't wanna touch this money.

I want it to grow as much as I can, so I can give the most possible to the kids. And maybe I'll spend a little bit of it, but I don't need it. Yeah. I'll never touch this stuff. I'm already I have more cash flow than I need.

I can't see myself spending more money. This is a clear example of, okay, his assets were being recommended by a cliche portfolio, which for some people makes sense, but other people didn't. Yeah. So it was an easy conversation. Okay.

Well, here's the equities. Here's how you can invest for growth. Here are some things to be aware of. All was well. And then a lot of his assets were in pretax accounts.

So he was going to have RMDs as issues.

Oh. And he said what's an RMD?

RMD required minimum distribution. So at 73 years old, or whatever it ends up being in the future, because they keep changing it.

So stay tuned. Yeah. But he goes, look, I don't wanna do IRA Roth conversions, my kids, they only make a reasonable salary,

so I'd rather them pay the taxes. Yeah. And if I live a long time, whatever, if I don't, I don't, but people are hounding me on this, I need IRA to Roth conversions. Like, okay. Well, for your situation, that actually doesn't make sense.

Preserve principal, grow it as much as possible. And then when you have an RMD, a required minimum distribution, you can either donate it to a charity, church or charity of your choice, and pay no taxes on that, or just pay the taxes and put it into the stock portfolio because he was buying and holding stocks with the intention of getting a step up in basis. I'm sorry. The jargon's so so Yeah.

Here. I'm just looking at

you explaining this, and you're like, yeah, Mike, they're not getting this. Okay. Stepping up to where? Let me say

all that differently. So at age 73, 70 four, anytime after that, if you have assets in

the IRA account, you're gonna be forced to take a portion out of it. Okay? Alright. When you take the portion out, it's gonna get taxed. K?

So whatever your income tax is, that's what it's gonna get taxed at. You with me so far?

Yes. K. At that situation, you could either say, I

don't wanna get pay the taxes. I wanna donate all of it to a charity. K? So your tithings, for example, if you want your arm to be a part of your tithing?

Yeah.

Great. You wanna donate to a charity, Red Cross or whoever, right? We're not affiliated with Red Cross, everyone seems to know Red Cross, right?

So you can do that.

Now let's say you don't wanna donate to a charity, you're just gonna pay the taxes. You're just paying the minimum taxes while your overall principal is growing. It's easier to grow more money than less money, because it's all based on percentages, and his intention was legacy. Yeah. So when he is forced to pay the taxes, he didn't need the money, so what does he do?

He would turn around, and he would buy a stock. When you buy

a stock and you hold it, it should hopefully over the

long term period of time have great growth potential.

Mhmm.

Remember, his intention was legacy.

Yes. So in that situation, he wants to grow because when he dies, his kids get what's called a step up in basis. That means that they don't pay taxes on the gains of that position. It resets at zero

according to current tax law.

Okay. So he's setting himself up to where he's doing a very tax efficient growth and legacy portfolio or a plan.

Uh-huh. That goes against all conventional wisdom, but it was what was right for him. So we had a fun conversation. It made sense for him to do it himself. And so he was one of those we did an analysis, made a few adjustments, and he was on his way happy as a clam.

Yeah. Do you see how people have the assets they want, but they're often not aligned with what they want them to do for them? Your money is supposed to serve you. What is that purpose? What is it supposed to do for you?

And too often we get in these cookie cutter cliche, you know, rule of thumb, this mindset that becomes very limiting.

Uh-huh.

And so we wanna get away with that. So that's, Kedric, the idea is you probably have what you need to get what you want, it just may be in the wrong places. Okay, yeah. We are very much an optimization company, an efficiency company. So like when we do an analysis or a plan, it's to our core, you put the plan together first, then you explore the strategies, and then you pick out your investments and products to support all of that.

Let me do one more example. Okay. People want guaranteed income for life, I have no problem with it. My book, How to Retire on Time, was written against this. I do not believe guaranteed lifetime income is financially in people's best interest, if the plan is built right.

There's a lot of caveats in there. I'm not saying go out and just throw it all caution to the wind and put in the market. Yeah. Your plan has to be built correctly, but I do believe that growth and flexibility is better. But there are people out there that want guaranteed income for life.

It just helps them emotionally, and I have no problem with that. I do have a problem though when someone takes their four zero one k, all pretax, buys a bunch of annuities, and turns on guaranteed for life income. Because now if inflation gets out of control, that income stream becomes less valuable. Inflation goes up, your power of spending goes down.

Because the income is locked into a certain

I mean, yeah, if you got if let's say you get $6,000 a month Yeah. K, net of tax. Okay. And all your groceries just increased by 20%. You're not changing your income, the expense just increased.

That's a tough thing to work through. Mhmm. So that's why I have heartache with the oversimplified, everything should be just be, it's okay to have some. I get when people want it. This is a concern.

But the other thing too is when it comes from risk mitigation, if taxes were to go up and all of your income was pretax, then you've got less income, less net income. So that's why, again, it's you have to have flexibility and efficiency to be able to get more out of your money. Mhmm. Markets go up, you would implement certain things. If markets go down, you need to have this flexibility.

Yeah. Have we ever talked about the original name of the company? I don't admit this often.

I no. This is going deep into the archives.

Have I ever

told you this? I this is gonna be news to me as well. This will be fun.

Before Kedric Yeah. And now we call it Kedric Wealth, so people know, oh, Kedric's a financial planning wealth management company. Yeah. Honest Okay. As can be.

Yeah. Let's put your hand on a bible here.

Yeah. The original name of the company was going to be Jellyfish Wealth.

Tell us tell us what the story is

behind that. So I love the scuba dive. Right? I love the ocean. I'm not a marine biologist like George Costanza or anything,

but Right.

Right. It's fun to go scuba diving. Anyway Yeah. The immortal jellyfish is a specific jellyfish that is the only animal that can biologically live forever. And the reason is when times are tough, it goes back into its original form, the the seed form or the embryonic form.

Really?

It goes back into the ocean floor. It cements itself on the ground while the ocean currents and storms are just going ablaze. And then when things calm down, it can eventually go back to its normal jellyfish form. I'm not a scientist. I don't know the technical terms here, but because of that, it is the only animal that can biologically live forever.

Now that concept, which I learned about years ago, is what stemmed the research into then creating the reservoir strategy, which is having some of your assets to be protected. So when markets go down, you're grounding yourself Right. Into principal protection, so that you can take assets while your other accounts have time to recover. It was this interesting study on the animal that led to an unconventional approach to retirement portfolio management that based on my research and running Monte Carlo's gives people the highest probability of success in retirement.

It's very interesting.

And so that's why we don't put all of your assets at risk. That's why we don't buy a bunch of annuities and turn on income streams like probably the majority of the industry does. We have a very specific philosophy that was built around how the jellyfish can live forever. The problem is, when you hear jellyfish, you don't really wanna be a part of that company. It didn't test, so I asked people, hey, what do you think about this?

They said, well I love the concept, the story's cool, but no, that's a weird name.

Yeah, don't they sting you sometimes too when you're in the ocean? Yeah, You don't wanna get stung. Yeah.

Watch out for man of war if you go to Hawaii. They're they're horrible. But anyway but that was the original the idea is you need to have flexibility based on the financial future.

Mhmm.

And we don't know the future, so the ability to dynamically adjust what your portfolio is doing, how you're taking income, what efficiencies, and what strategies you're gonna implement, is how you can focus on overall growth, while protecting from the various amounts of risk. Yeah. It's a beautiful story, but yeah, the name just didn't go well with people. So when we officially launched, we used Kedric because that was a little bit easier for story, and Yeah. You know, Kedric was available as a domain too.

Anyway That always helps.

But isn't that interesting? Yeah.

It really is.

It's all about paradoxical balances and running dualistic or multi plans at the same time, multiple strategies, so that you are prepared for the best and the worst because no one knows the future. If anyone thinks they can outsmart the market, oh, man. I'm just waiting for the other shoe to drop with that person. That's all the time we've got for the show today. If you enjoyed the show, consider subscribing to it wherever you get your podcasts.

Just search for how to retire on time. Discover if your portfolio is built to weather flat market cycles or if you're missing tax minimization opportunities that you may not even know exist. Explore strategies that may be able to help you lower your overall risk while potentially increasing your overall growth and lifestyle flexibility. This is not your ordinary financial analysis. Learn more about Your Wealth Analysis and what it could do for you regardless of your age, asset, or target retirement date.

Go to www.yourwealthanalysis.com today to learn more and get started.