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8-19 10am Garland, retirement investment

Aug 19, 2014|

A shocking number of Americans…one third of all working adults…have NO retirement savings. According to Bankrate – 25% of people 50—54 and 14% of people 65-plus have NO savings…68% of 18-29 year olds…and 1/3rd of 30-49 year olds have yet to start putting something away for later years. If that’s you or someone you know, don’t miss it when we talked to estate & retirement planners. Our guest: Ernie Burns, owner/President of Burns Estate Planning; and Scott Capace with the Mutual Fund Store.)

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Automatically Generated Transcript (may not be 100% accurate)

Are welcome back -- Darian Billington today. Twelve moon. After we get them talking about Padilla. Pollution situation in the -- things to George and in New Orleans. Will a lot of talk about California. Art in particular a couple of cities that are. Where Pilates. Or using pillows. They're called body -- -- sides of via. Fuel. The digital beepers we used to Wear on our results. And they've got a -- earlier reforms and the use of force by police declined by 60%. Complaints. Against the -- have declined by eight B 8%. Order to be introducing thing users -- police and Ferguson. Have these scale. And the rule the box. In the open a bit and distribute the old piglet you bet this -- Something that. When when I see retirement. All will be here. I get a little concerned human your boob we've -- from got a news story today. Shocking number of Americans have no. Retirement -- And we've got two people -- this to make a living. Advising people how to get to a point where he can retire. What I learned from one problem early birds and working with him is that you may think you haven't. But I was curious because. Compensation a couple of weekends ago. Somebody you brought up burns state planning when we were -- -- And the -- why -- -- Livni and as Saddam guests and so putting well and 72. So looked at -- and so security. And it's eighty. 44. Men in 864 win and you've viewed turned 65. Today. There's every chance. To live CD's that so I've decided on the work until -- -- then retire for a year and a welcome George Burns approaching burns state plan good talk and appreciates coming and and Scott complacency mutual funds or. I think our first value and lead to importing the review about that. Are you guys appreciate coming -- very much Scotland -- -- -- with you and we'll get into the particulars of this. But I'm curious can you guys do what you do. -- have the baby boomers. Coming out of there with no retirement and. You -- certainly can absolutely. We have to work with each person individually obviously put. The of the frame in the structure of our markets. A lot of people have fear -- what do tapped what happens with these baby boomers who don't have any thing or who can spend all their money. The frame of our market is still based on profitability. I tell people break it down to a hand something in this most simple thing in front. If you manufacture that -- and you make a profit on which you don't want own all of accompany you sell stock. And any stockholder that accompany. Is gonna profit off the Silva -- and in the and that's where money's gonna go where they can make a profit. And we do have to bring things back to those basics I think in a lot of cases for for the average person and say. There are some things and -- scary out there there are ups and downs but -- barring the profit that companies make and companies are still wanna make profit. Yet to be dynamic and where you go. You have to be willing to give up the thing its major money in the past for nothing that's gonna make you money going forward. -- Yet to be more conservative base people are caught up in the way the lifestyles. And live in certain way. And the baby boomer generation that's laws the younger generation span span span and they live by the credit cards. If they're not inheriting tons of money and Manning -- in the sort they have become -- little bit more conservative but overall in itself. And save in different ways. And we've been able to take our clientele base which is 55 and over. In the state planning firm and had them think about how they created defiance and become more conservative. And if they were our late. How many people are laid invests in their funds for the retirement. Any created different ways to do with -- more conservative based and sometimes insured based what do you mean more conservative. Well in the senses. Not spend every down that you make. And actually putting together 500 dollars a month a thousand dollars a month to decide. -- X amount dollars amount -- sat. -- to save it may be that tax free basis not in a custom bases as an NRA. Or a 43 B plan or. A step or Keogh typical typical retirement can't -- your tax. When you draw it out when you need it the most there's different ways to invest you do not have to be taxed when you -- -- -- to retire. See both of you are not considering. One of the biggest dangers. Wouldn't you have an eighteen -- -- that says daddy where's your ball and it. And you have no hope for you you you can't save -- the country. So you got good figure out content for. Eighteen year old daughters to help media. Yeah I think it's one of the biggest message that I I've had to share with some my clients as. That you you have to know where the line is we actually did show on this it's a -- you do. You have to understand your limitations. It was a big part of the show we did a few months ago were talked about. Knowing your limitations and in terms of being an ATM for your kids there is a limit. And ultimately they can do without some of the things that they don't have that they want ultimately they can finance some of that themselves. You can't really finance your retirement past a certain point you and you need to make sure you're taking care of that. If not you're just finding a way to give them money now and ask -- again later when maybe -- don't have to give. I was looking for so now we'll look inquiry or you're in. A play music break and look we've got experts appear. In your drive along and figure news -- while I'm abroad for retirement and all our. If you're one of the -- -- this number amazes -- 101065. Year old that day. In the baby boomers have a number. 101000. For the next thirteen years in our news today interviewed Google looted so whole lot more field. Shocking number of Americans have no retirement savings here here's an example would get them into the weeds of the report. A personal finance and -- ago that found that 26%. Of people fifty to 54 years Ole. And 14% of those age 65. And older have who states. Reverted burned joke or president. Birds as they -- planning of -- who's got comparing Cuba mutual fund store. At all elected some of our questions. The person is what is the point of no return. Wind is it too late to start saving for -- -- A scout around -- with the. Taking though what's the point of no return there really is no point to no return you people don't invest money to make zero. But you have to be willing to live through periods of time. Where the markets flat where the market's negative in order to get that return. If you have a portfolio that consists of 60% stocks and 40% bonds. It based on the index performance there's never been a rolling ten year period. Where those returns were negative. People -- it's a little bit caught up in the emotion of investing when they invest. In 2000 and you have 2002001. And 2002 their negative and then they see the downturn 2007. Through 2008 the beginning of 2009. And they use those disabled investing so rigged I don't make any money -- -- the small -- can't make any money. The plain fact is if you look at a ten year number the S&P is average somewhere around seven point 4%. Per year average. That's big numbers that's good return you had to live through those downturns you had to invest through those downturns to make that averaged. So. The point of zero or turn as some years that's what's market's gonna give you. But overall over the course of time which we invest for long term you have to be in the market for more than five years that that's got to be. Ground real ground rule number one has this money belongs. Invested for five years or more and not spent. And you can live through downturns and flat years and make great return or. When is it too late when you retire. When you retire you don't have any income coming in. It's a little bit too late then this say OK what do I do now. We have many retirees that call us up and talk about this and already all the time in the sense of pre retirement post retirement. If you -- retired the next five years and my colleagues agree with me. You want to be Kumble the more conservative he can afford 20012008. Occurring when your retirement just retired. Yet to become more conservative but we see a lot of people when they come into adorns -- have 101000 dollars -- 20000 dollars. To invest former retirement what can -- build upon that and that's who we are very successful in doing. And Patrick Kelly wrote a book a tax free retirement. You don't have to retire than all dissent pay these taxes available. Well because the IRS says -- this RA is that you have to pay taxes on it's been tax deferred for all this period of time. This 41 K we have on Friday different ways that you can retire tax free. But -- today in a baby boomers especially coming to us -- -- -- have a small manor retirement how to build it. And there's different strategies you can used to do that it's a three buckets system this tax for strategies but you don't always have to have a huge lump sum. It's systematic. Consistent. Building your assets up for retirement it is always just locked sounds. You don't have to have a lot -- come to a facility and a half half million dollars tattoo on how to invest it. That's nice. But it's more more comic today people come with a very small amounts how to build for the future and we have several different ways to do that's just different strategies. A list both of these groups. Where and when you talk about tax free retirement. One of things and aggravates me is double taxation on Social Security. Is through and where you grew bored. There's but we'll go -- -- Who some taxes year you're gonna pay half think Social Security is is one of those. There are few strategies that we'll get you to avoid every tax out there. That are. Within the letter of the law and Social Security's one of those things that. You have to just plan around you have to plan for. Well make thing is sitting down a decline look withering comes common end. And you're going to be taxed on income overall -- break out attacks statement and you look at the strategies but basically the the interest -- -- -- yet they have too much interest in tune it from places -- dividends. Maybe that the other tax deferred growth our tax -- another way so therefore there and comes not attack any income them and I need to be using. Therefore they can plant the best obscurity when the draw you -- start at 62 and a half in max's that seventy. And if you wait till seven is a 132%. You can draw outage so security. That being a factor some people are waiting longer -- you're guaranteed to make around and additional 7% a year the longer you wait. It's retirement planning and you -- and defer the taxes for the future. And you can do different things as 567. Wage you can -- -- security or weight or options and so security skis and options -- take. But you have to know that the income in different ways to do -- and estate planners retirement planners specialist like Scott lamb. There's different ways to do it if you have to sit with somebody. That knows the business and estate planning. One of the things of people overlook is they want to wait until they're seventy which is fine because they're gonna get a bigger lump sum they -- need that money. Which I can appreciate but a strategy like file and suspend. Where they file for Social Security but they suspend taking benefits. It gives them the flexibility to change their mind and -- -- all of the payments that they could have received over the course of time. As a want some this often this is a strategy will tell people to use and the low -- -- acts that you stone attacks on but. But let's say you come down with an illness and year you've waited from 62 and now you're 68. And Neeson walks off the profile now maybe get a few months worth of that income. Yes you are tax on that money which you can go recoup all the payments should have received from 62 to. That day. And it just makes good sense to file and suspend in a case like that it doesn't -- harm but it gives you. I always tell people when when you're investing when you're working with your finances you wanna try and and put the cards in your favor and that's just simply switches things around it and then gives you a little more control over your finances. ARP did a study in 2001. That husband wife their 65 years old -- and nanny percent chance one of them would live to be in an -- That means once you retire your retirement has the last thirty years so therefore. It's. Look at you we we sit down with a quiet defiance and analysis look at their debts. Look at income -- coming in what do they need and a lot people never ask yourself that question. How much money per month when I retire with -- -- income need to be we said don't mean clients never never been asked that question. It done you -- thousand mile 101000 a month 5003000. What income and do I need to supplement my income. So. If that income has the last thirty years after you pass on you have to think in a different manner in that post retirement -- retirements are very important. Because of the corrections in the market. And because of the the variations are happening in the world today it's a different era. Aren't here's a question for both of -- As your -- slow when the average change your do that you recommend -- -- retirement accounts. Every person every person's. Retirement situation is completely different -- and I don't think it's fair to put someone in that average bucket. And say this is average I've met with people who have retired in their early fifties and -- met with people who simply can't retire until there. Mid to late 60s70. When their maximum Social Security. You have to individually look at your situation how much is it require that you live off of how do you manage finances up too retirement. I mean with people who have paid off their house who have no -- who aren't into buying new cars and we can have them live happily retirement. On far less money than people who wanna buy new cars every three years who have the big mortgage still. Who have other expenses like putting kids through through school. You have to really understand he stopped comparing yourself to what the average is to what others are doing. And start looking at what you need to live a successful happy life now and in retirement. Been an estate planning retirement firm our clients are opted to and over we see people average they retire right now around 67. Much older than we did twenty years again and open the company at the 1993. People back then in a sense would retire sixty years old now we've seen around 67. It's taking more to retire inflation is really set in the last six years. Price of its resources are really surge. That being a factor that the incoming had annual plan on using. Now it's taken twice as more to supplement income for the future twice and twice as much I mean think about it -- guess in 2008 -- -- dollar -- and and a gallon. Now it's 350 -- that cost a disservice to go up -- gallon milk was 2000 gallon back in 2008 now. It's for a house again so -- gets his service is going up everything so. Mom and dad went to a forty years old kids are going off their -- they graduate at a college in May. Start thinking about OK mom and there were forty let's start save their for a term they made their plans. And now it's taken twice as much so. As an estate planning retirement firm we see people return much later and now round 67. Americans without -- retirement briefs and does he gives them put Poland and about 70% were -- Americans are finding -- hard -- you've been saved for retirement at all. They get bills they get their basic living expenses and they just can't buy in the money. To better understand -- -- more importantly. Come up with the answers to what looks like a potential nightmare. Reverted burned Zoellick president of burns they planned Scott completion of the mutual love for each door. A little restart it was so Libya called we're getting a reverse mortgages and we've we hear a lot about that would you coach thank -- We get this column out once a week or once every couple weeks it's reverse mortgages. Or. A selective situation. The only time we think they're in our opinion the only time we think they're appropriate. Is if you've already left the children are prepared to children for there's going to be -- parents. And at the same time the bills are stacking up the income -- two is not enough to sustain your lights down the next twenty years. And you're not worried about the home after you pass on if you're not planning on leaving your state to anyone. And many clients aren't but at the same time you know plan on ever moving. Okay. It could be a selective situation if you need the income to pay the bills to sustain your lifestyle. It can work now the average. You would get for your home is around fifty to 60% Max. And you do get the stain your home. We're not in that business but we get that -- all the times we've researched it and we have a few clients and actually have done this but it's very selective. When we talk about baby boomers which has been a pretty big topic we have with talked about today you have the same people who. Their first mortgages in the seventies were eighteen and 19%. And they became. Really. Passionate about no debt that's how they chose to say if they chose to put all their money into getting out of debt paying off that high mortgage rate. And because of that sadly their biggest. Piece of investment there there biggest place they can draw funds from his house. But houses are there they're not something you can sell pieces of outside of so they're not a typical. They're not the first thing you go to when you're planning for someone. But for people who have done nothing else for people who. Have no other way to get the income they need because that puts so much into their home it is that go to solution is that last. Resort. Of what someone can do who simply hasn't done enough outside of paying down that debt. Here's an -- which boy and his better for a one K or 456. Beat. And and report it to six -- There are actually very similar types of plans the difference is that that with. With the all the other beat plans whether it's a 403 BR 457. They're typically don't have a match. And the where you can invest is usually pretty limited. A 401K is in my opinion usually superior in this is just the average if you could have a great plan in one of these other investments. But you tend to get diversify choices and for a one case so you tend to get choices from. Funds. In multiple different fund families. And I and different styles of investing and with 43 B 457 -- tend to have a little bit more captive. And a group of funds last choice there. And the match also helps in the 401K if you're lucky enough to have -- company has the match. It is. Great to take advantage of free money. They're not very popular. It's the 43 b.s in the past or the 41 -- jury would like Scott as a senior picture below them more often. Aimed at -- paces and yet the matching abilities and -- 401K and more popular. Many retirees from state organizations or teachers -- Hospitals things of that nature these in war. Well no plans. They're limited. And that's the thing in in many people last liberal malware onto an hour -- -- -- capacity to invest as you wish you were talking about retirement investing let's go back to impose our third urine governor bill boards. Think it on the pretax several employee at about Matt and the mallet and they've been in the elk. Could cut Dubya. Yes absolutely you can do better. And the biggest reason I say you can do better is because you have way too narrow window what you're invested in the in in the -- fund. The thrift savings plan is purely index base which is fine it. Index investing is what I consider to be an okay strategy it's never gonna be awful and there's a lot of awful choices to make -- a world of investing. But it also is not going to be as as rich as you'd like it too it's not gonna be as. -- full and complete there are a lot of different ways you can invest specifically like right now and fixed income in fixed income there is just and we're talking bonds here. There's a lot of different ways to properly invest in bonds and you don't have the ability to be really dynamic inside that plan you're retired. You can do the same thing with an IRA through -- one of the big -- -- vanguard Schwab. Scott trade and have more control or you can take a more dynamic approach to management which is something that we do with mutual fund source is -- we actively managed portfolios. To try and make sure you're always position where we think you should be and we have thousands of choices to choose from I think that's just a better way to have. You're set. -- The question a perceptive the Jonas or you drawn finds out or you are you drawn from that that plan male or you need you to draw income from any immediately. -- Okay there are other opportunities Pekingese in. The first thing is as Scott was saying that it is drawn into an IRA. And look at your income needs for the future but there are other opportunities you can use. The biggest thing is don't limit yourself lecturing in and at the same time make sure since that that's probably a large scale -- sounds like. Make sure it's not a risk for the future because it doesn't sound like -- -- seven hours a month you can afford to lose it from another correction. All right Lou it's good to good James in Covington. Are no good during its. By an -- guy -- -- about it on 66 amendment out of body and I got to open save and that an end. The pain in the law and I Lebanon under the -- -- here so it's never been a conventional -- And -- -- right now at 1001. Stick you can you know take all of that out here a 151000 -- -- rules until -- I'm not a long time. For the program to -- -- seven -- -- I don't -- drawn down at seven with the law violate. You'd think that would move. -- absolutely any time needed to released the taxes to Haitian military and that now what can grow Aiken compound this attacks three retirement account you can go after orient. Drop from later when you need it not -- when the -- so therefore. In the town he could basically have attacks retirement that's a win win situation to watch on taxes when you trotted out every year but the more you can roll over to that -- the better. Absolutely the other piece out as just make sure it's invested really the way you need to be whatever and the right amount -- risk you're taking. -- return you're looking for. It's a great tax Reggie you seem to be doing all the right things there with the structure of the plan just make sure the investments are doing this hard work is as you are and doing the right thing. Or -- go to Sylvia's Sylvia -- -- with Scott and Ernie. Thank you and told them you know a huge -- and -- deal. And so scared I am. -- patient -- Not cool and they're. Still working in my high. And I still slip into our security. I don't want and they'll. See it and I can't. Are -- -- it -- -- it would catch. -- I'm a little -- she says she was drawn it and now she's asked initially. And it's time. And now which I say I'm sorry my -- anarchy each house. OK. Yes ma'am OK then the question is that seventy they have yet to start join your required minimum distribution. And is based in your agent now minus and there are so government formula it's around three point 8%. But it setting have to garments were. Requiring jobless funds out however there are some limitations if you're still working. That you king and extended and a longer period of time. And that's really not much to be fearful of a lot of people that seventeen have distribution. And I've heard at all and I heard people coming and saying well you know Scott here for take all the money within ten years and if it is it's just round three point 84% depending on on exactly how old you are -- it's not a big piece in the portfolio at all. And you do have the ability to other things with that money the government doesn't say you have to spend a lot of people take that's -- have to should be should and continued to invest a. And on -- right. Strength question for him. Were were seeing indications of Washington and short of money pushing down the responsibility. To government to state. Big counts too emotionally constricted. In what they can spin in Gibbs says it is approaching the cost to cities and parachutes. With that thought in what looks like call whole lot more taxes were -- they just for basic services. Isn't it good idea to buy a house in this city or keep now in this. -- Well many many many years ago pre Katrina. We all lives in Saint Bernard and my -- to decide to move out they moved to the north and the Slidell and they several were worried about the storms coming. Who knows they're in groups of what they did move to the north side of -- so they -- okay but it. For the for the rest of us we were really scratching -- things that really necessary and I think it's kind of the same thing but you're talking about. It depends your personal situation if I buy term life insurance I spend that money freely hoping I never. Get a return on that money. And if it if you have the funds is. That's the lifestyle it's important to you. Then it's something you -- -- do but I think your concern is a really good concern you look that your complete whole picture. And that you act before things get more expensive. You don't wanna wait until our house is more expensive for the next I own because they're gonna take that out of the value they wanna pay you. There -- Even though. Does the right things yet to look at. The best investment in Lincoln make is about their own home that there is still the American dream. So there for us interest rates are low capture that. That venturing -- capture that train. Where is very particular you look at your schools and your family in the city that you ran in the taxes are definite. And have we can pick on different cities but overall in itself is still the American -- so bad at home. Grab that equity that you do have making gains for the future. And hey could always move if taxes or increase special property taxes to had a future got about a minute final thoughts -- -- It's never too late to start. You -- can't get to that 50000 that 500000. That five million mark in the chiefs are five dollars. That first dollar of investing is super important it's the one that will -- the most over the course of investing. Start when you can. And understand that towards -- later years in life you may have to invest three times as much but you'll probably be able to you'll be making more and you have a lot of things paid off. They committed custom way investing for the future for retirement as. You have to be taxed Picchu when you draw these fires out there's different losses in different ways and strategies to invest in the future. And we can do that artistic planning we've done it for 21 years. At the same tennis when Taylor about him and we make an announcement we're now proud sponsors and LSU tigers to win attack after Altai and Tiger Stadium it was a regular. You would -- artistic planning signing Tiger Stadium now. Guy loses the support and interest and will do it again pretty huge company and look for to. -- -- --