This week we did things a little differently. Brian Ramsey and Aaron McAndrew got to answer calls from real people with questions and concerns that they have experienced while going through their financial journey. Many of you may have some of the very same questions! We will have phone lines open as well during and after the show if you want to speak with one of our advisors or would like more information on any of the topics we talked about today.

Speaker 1 [00:00:20] And welcome to the money puzzle, my name is Cynthia DeFazio, and I’m joined today by Brian Ramsey and Aaron McAndrew of Family Wealth Planning Partners. Brian, how are you today? I’m doing very well. It’s so good to see you. It’s good to see you. Thank you so much, Aaron. How are you?


Speaker 2 [00:00:34] Very well as well.


Speaker 1 [00:00:35] Good. I’m so excited to meet you as well. See you today. Show I love. Obviously, it’s all viewer questions and a call in show with very with variety of topics, if you will. But Aaron, right out of the gate, I want to talk about the money puzzle and what’s behind us and how those pieces fit together. What’s the money puzzle?


Speaker 2 [00:00:56] You know, I love shows like this when when viewers or clients or whoever gets to call in and and ask these questions because we get these types of questions all the time. And the nice thing is, is these types of questions are they’re not just one piece of the puzzle. So you can see several puzzle pieces behind us there. Each one of these questions that we’re going to get, or more than likely going to be a different piece of the puzzle and what we do as financial planners is help these clients and help our clients put their their pieces that they come in with into an actual puzzle and put it together.


Speaker 1 [00:01:32] Nice. So a lot of times people are coming in and they’re not even sure where to start because they’re confused, but you show them how to put the pieces in to make a beautiful, cohesive puzzle, if you will. Wonderful. Well, this is one of my favorite shows. I love viewer questions. So Brian, do you mind if I guide the first one to you? Sure. OK. So this is a great one. This is a caller. His name is Jim. He’s a teacher from New Albany. How much should I be contributing to my own retirement since I have a pension?


Speaker 3 [00:02:01] Mm-Hmm. Well, I tell you what, let’s do this. Aaron is an expert with pensions and something, especially with southern Indiana. He does a lot of work over there. OK, so he’s asked me what I know about pensions. He’s really the resident expert in that perfect because again, he does a ton of stuff with schools over in southern Indiana, so I’ll let him jump in and take that one.


Speaker 1 [00:02:21] Sure. Well, Aaron, the question was how much should I be contributing to my own retirement plan since I have a pension?


Speaker 2 [00:02:27] OK, that’s that’s a great question. I do get that one quite a bit. While pensions are great because either the school districts funding it for the teacher or in Kentucky, the teachers also help fund the pension. So whilst pensions are great and they provide that guaranteed income benefit down the road, they still you can’t control that pension. There’s a number of factors that go into that pension payment, which one’s a multiplier that’s set by the state of Indiana or whatever, whoever the the the pension organization is that’s just running at. There’s a multiplier. There’s there’s a number of factors that they can’t control on the pension. So what I usually go by is control, which you can control so that you can control how much you’re saving into retirement so that this teacher may be able to save into a three B plan. They may have a Roth IRA plan, they may have something that they can that they can save. So putting a good portion of the income and usually typically where 10 to 15 percent of the total, whatever their total retirement savings is, so including that pension, what goes into that pension, including any district match or anything that that the district or the company or whatnot might provide them, then add their number in and getting anywhere between 10 to 15 percent range is where we would typically look at. And again, that’s not the same for everybody. I mean, it depends on how long you started, you know, how long you’ve been saving. So, you know, if you were if you were right out of the, you know, started teaching and you’re, you know, twenty to twenty three years old looks different than somebody who’s starting to save at 40.


Speaker 1 [00:04:02] OK. All right, Erin, thank you so much. Brian, you’re next in the hot seat. Are you ready? I’ll take


Speaker 3 [00:04:08] this one. OK, I’m going to fertilize one, but I’ll know.


Speaker 1 [00:04:10] That’s good. I love that you do that, actually. So this is and from Middletown, she’s calling in. She would like to know. I recently went to a dinner seminar and I felt like all of my investments should be in annuities. Do you guys use annuities?


Speaker 3 [00:04:24] This is a really good one. I’m glad. I’m glad I called in. Yes, we do. But I’m going to set the scenario and say that I’m we use an analogy and I won’t compare going to a dinner seminar type situation versus how we approach it. So we use a typical golf bag. OK. So in golf, you have 14 clubs and in one of our partners case, Chris, he’s over there. He’s got like 90. That’s a whole different story. But typically, you have 14 clubs in your bag, the most popular club you use in the bag as a putter. OK, you’re going to use that about 30 40 times the average golfer. The next most use club is typically your driver, and you’re going to use that 15 or so times around. OK, now what are the clubs that you don’t use that often, let’s say, is a foreigner? There’s times where I go play golf courses where I may never use it, but there’s times where I go play and I may hit it a couple of times. OK. Typically, when? You’re going to a dinner seminar and say, hey, come and listen to our and we do them as well. But most of the time when you go, you’re going to go and they’re going to pitch annuities. And that’s pretty much all they’re going to pitch. Those folks that you go see pretty much are using annuities like a putter. Everybody that walks in the door is going to get one, whether you need it or not. And it’s pretty good. It’s going to be a significant portion of your portfolio. That’s just how they work. We know because we know some of these guys, right? Yeah. And we know how it works. I would say how we use annuities. This is kind of like a form we applied to come in that it’s not necessarily a strategy that we’re going to use, but it could be that we use it. And so that’s how we view it is really not every client needs it, but in some cases they can be a great fit. But again, I must say it goes back to creating your financial planner, putting together your money puzzle and determining how that particular annuity would fit into your portfolio. Does it make any sense? Hmm.


Speaker 1 [00:06:17] So it’s not one size fits all, it’s not. It’s going to be very individualized and very customized. Correct. All right. Perfect. Thank you so much. This is a great question. Aaron, I’m going to guide this to you. This is Cathy from Anchorage. I am sixty three and retiring this year, and I’m wondering if I should turn on Social Security before my full retirement age and drowned from my 401k or turn on or draw. And it is drawdown from my 401k and turn on Social Security earlier. What are your thoughts?


Speaker 2 [00:06:48] I’m glad Cathy called in because we do get this question quite a bit. In fact, one of our other shows, we talked a little bit about this. So the answer to that question really is it depends. So, you know, it depends on a lot of things when it comes to when they turn on Social Security. We would take in consideration health, family health history. What kind of current health are are they in? We take in consideration. Are they planning on working any longer so they might be retiring from this job? Or are they planning on doing anything else that they that they may get income from? Because if they turn a Social Security on early, they are penalized for making over a certain dollar amount. So we also the biggest piece of it is the income plan. So we would ask, we want to figure out, OK, what is that dollar amount they’re going to need in retirement? And what is that if they turn Social Security on at whatever the age may be 63, 64, 65 early? What does that do to the overall income plan? Not just right now, not the immediate needs, but what does that look like 20 years down the road? So so that there’s not a real clear answer there? We’ve had clients do it both ways, but again, it comes down to the planning.


Speaker 1 [00:08:02] I have a question, and if you turn it on to early, do you get a redo?


Speaker 2 [00:08:07] Do you get a redo?


Speaker 1 [00:08:08] No, no. So once it’s on, it’s very


Speaker 2 [00:08:10] difficult to get to get the redo. So it’s a it’s a it’s a permanent decision again, makes it a real reason why you want to consider this as a as it’s a heavy decision when it comes to the income plan.


Speaker 1 [00:08:24] Absolutely. Want to get it right the first time? Well, Brian, I know that you and Aaron have a very special offer to present to the viewers at home today. Let’s talk about what that is before we open the phone lines.


Speaker 3 [00:08:34] Sure. Yeah. So today’s offer is we’re offering anybody that calls in today and schedules an appointment with us an opportunity to come in to get a complimentary retirement plan. And with that, retirement plan consists of these three things. Number one, we’re going to look at what your retirement income sources are. We talked about this on another show. We look at your sources for permanent, predictable income, your sources for nonpermanent non predictable income. We look at strategies around timing and when to turn those income sources on. And then we also want to make sure that the probability is great, that those income sources will provide you the lifestyle that you want from the day you retire until the day you pass away. So it’s sitting there. One number two, we’re going to do a full risk assessment and this is first we’re going to look at risk transfer strategies, which are things like life insurance, property and casualty insurance, disability insurance. That’s where we’re transferring the risk to someone else to cover. But then we also need to look at risk mitigation strategies, things like asset titling and beneficiary designations. Really, we’re just trying to overall mitigate risk of loss of assets. And then lastly, we’re going to look at your state plan. So we’re going to make sure that one, you have all the documents that you need. And number two, we want to make sure that those documents reflect what it is that you ultimately want to see happen to your assets, meaning you’re going to name who you want to receive the assets when they get it, how they get it. And lastly, we need to make sure that all your assets are tied up properly and your beneficiaries reflect those estate documents. And so we’re we’ll look at all three of those things. So if you find yourself in a position where you’ve not done this yet and you’ve not gone through this exercise of making sure of all three of these aspects are in place and and ready. Then give us a call. You got the number at the bottom of the screen, it’s eight four four nine zero zero five two one zero. And give us an opportunity to walk with you down that path to financial freedom. And as I always say, the path to financial freedom starts with completing your money puzzle. And that’s what we’re offering an opportunity for you for us to help you with.


Speaker 1 [00:10:37] Brian, thank you so much. Aaron, thank you so much to the viewers at home. The phone number to call is on your screen. That number is eight four four nine zero zero five two one zero. We’re going to take a very short commercial break, but remember this show is your show today. These are all viewer questions. The next one that we address might be yours. Stay tuned to the money puzzle. We’ll be right back.


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Speaker 1 [00:12:36] And welcome back to the money puzzle, my name is Cynthia DeFazio, and I’m joined today by Brian Ramsey and Aaron McAndrew of Family Wealth Planning Partners. Gentlemen, a wonderful show we’re having today. Obviously, it’s all about the viewers and I love their questions because they’re very diversified and they’re coming in from all over. So, Brian, you’re up next. Are you ready? I’m ready. All right. You can always pass it, Aaron, if you want.


Speaker 3 [00:12:59] No, we’ve already done that. We’re good.


Speaker 1 [00:13:01] I love it. OK. This is a great caller. Actually, this is Mike from Crestwood, OK? And he says, I’m getting older, and I’m wondering if I should add my daughter to my checking account.


Speaker 3 [00:13:12] Yeah. So we get this a lot. So great question. So the answer is, no, we shouldn’t do that now the proper strategy. We see that a lot. And of course, we ask why? Why would you? Why are you adding your kids to your account? We usually get two answers. Number one, they say, Well, if something happens to me and I’m incapacitated, I want my kids to be able to continue to pay the bills and have somebody on my account. They can, you know, they can do that. And number two, they say, Well, if I pass away, I just want that money to go direct to my kids and not have to go through probate and all that other stuff. OK. So there are two strategies that we put in place. One is not to add your kids to your checking account, but the first thing we’re going to do is we’re going to address what happens if you become incapacitated. There’s a financial power of attorney that allows your children to act on your behalf in if you become incapacitated. So we’ve we can solve that issue by just having a simple document called the power of attorney. OK. Number two, to address the if you pass away question, what we want to do is we want to add your children or your trust to wherever you want to go as a beneficiary to your checking and savings accounts. Now will tell you, we did show a couple of weeks ago talking about this very subject, and they still do a very good job of adding beneficiaries to account. So you need to go in on your checking savings and add those beneficiaries. And it’s called a transfer on death or today or sometimes referred to as a pod, which is payable on death. But that’s the two provisions you can add to any individual or joint checking your savings account to add beneficiaries to it. So that’s what you need power of attorney and adding beneficiaries and you’re all set.


Speaker 1 [00:14:49] Brian, thank you so much. Excellent response to that question. And this is a great caller as well. This is Kyle from Louisville. He’s concerned about increasing taxes and not sure if Roth conversions are smart. What advice do you have?


Speaker 2 [00:15:02] Yeah, that’s that’s another good question. Roth conversions are one of those strategies that don’t make sense for everyone, OK? They do make sense in certain situations. One, it depends on the tax bracket that they’re in the time and then kind of how they how much leeway or room they have left in this current tax bracket that they’re in before they move to the next tax bracket. Because when you convert traditional IRA money to Roth IRA money, you have to pay taxes on that. So the other thing is is the other important item is do they have cash on hand to pay for those taxes? So it doesn’t, you know, if you take the taxes out of the traditional IRA or withhold the taxes on it, that gives you less amount of money into the investments, obviously, so it’s not as powerful. So if you’ve got cash on hand, that allows you to pay for those taxes, that makes that strategy a little bit more powerful. One benefit of it is as well because again, we do use it for some of the clients. Where it makes sense is the Roth money doesn’t require any require required minimum distributions when you get to the age 72. And then if something was to happen to somebody with a Roth IRA, you know, and they pass away, the money gets passed on to their heirs. If it’s a, for example, a a son or a daughter or whatnot, they there’s no requirement on how long they have to draw that money out and it’s tax free.


Speaker 1 [00:16:29] OK. All right. Excellent, Erin. Thank you so much. Brian, we have time for this next question before we head over to the phones again. This is a great question. This is Suzanne from Louisville. I’m starting to consider my retirement, and I recently use an online source to see if I could retire. Are there some resources that are better than others?


Speaker 3 [00:16:49] Oh, great question. Yeah. So the online, there are tons of resources out there. However, here’s the issue that we find when clients do this or prospective clients, our clients don’t. But prospective clients, right? Okay. What they do is they go in and it’s up to that individual to input the information. So what they may forget is they have other assets that they really need to to put into that formula. So that’s the limitation of an online is you’re up to the person inputting that information. And sometimes that information is not always that accurate. So when you go to a professional that does financial planning for a living, we’re very thorough in making sure that we account for every single scenario. It’s not just putting money in or out and putting the information. About what assets you have is also looking at different scenarios that might play out in your life. And that’s where the limitation comes in with the online resources and they’re great and sort of a what if? But you really need to go to a professional and then, you know, come to us and say, Hey, I really need to get a financial plan done. What is this look like? What is my retirement look like? And we can look and say, OK, this is how all the pieces of the puzzle fit together and then determine whether that plan is going to be successful. So there is some limitation with online resources.


Speaker 1 [00:18:05] OK, Brian, thank you so much. Aaron, I know that you and Brian have a very special offer to present to the viewers at home. Let’s talk about what that is. Before we reopen the phone lines.


Speaker 2 [00:18:14] Thanks, Cynthia. We’ve been talking about a lot of things on this show, and these questions that have actually come in are right in line with the questions that we receive every single day. So again, we’re offering a complimentary retirement plan. Take a review of the plan. See what you currently have in place. If you’re somebody who has a plan in place, will be happy to look at it and compare it to what give you any suggestions or whatnot that we may have. See how we can make it better. If you’re somebody who doesn’t have a plan in place or there’s just different, you know, you have a couple of these pieces that we’re talking about, do you have questions on what we’re happy to go and take those pieces that you have put it together in the puzzle? So it is an efficient plan that you can use going forward. And again, when it comes to planning, it’s not, you know, one one size fits all here. So it’s an ongoing process. But the first step is to pick up the phone and call, have a meeting and sit down and go through the process. So the phone numbers at the bottom of the screen is eight four four nine zero zero five two one zero.


Speaker 1 [00:19:15] Aaron, thank you so much. Brian, thank you so much to the viewers at home. The phone number to call is on your screen. That number is eight four four nine zero zero five two one zero. If you’re wondering where your pieces of the puzzle are going to fit, Aaron and Brian have the answers for you. Don’t miss the opportunity to call in today. That number is eight four four nine zero zero five two one zero. Don’t go anywhere. We have more viewer questions. The moment we return, the next one could be yours. Stay tuned.


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Speaker 1 [00:21:11] And welcome back to the money puzzle. My name is Cynthia DeFazio, and I’m joined today by Brian Ramsey and Aaron McAndrew of Family Wealth Planning Partners. Gentlemen, a wonderful show today obviously dedicated to the viewers at home because they’ve been calling in asking questions and they’re anxious for the answers. Aaron, you’re up next. Are you ready? I am ready. All right. This is James from prospect. I’m 60 years old, retired. Do not have a mortgage if there’s a need for me to have. Is there a need for me to have life insurance?


Speaker 2 [00:21:42] That’s it. That’s a good question. So no mortgage life insurance. A lot of times the misconception is people think that they have life insurance just to help pay off debts or whatnot that they have. There’s multiple uses to have a life insurance. And again, the question I can’t without knowing more about this scenario or about the situation, I can’t make any type of recommendation. But at the same time, there’s a lot of times people carry life insurance because it’s a tax free benefit to pass on to their heirs. So there’s a couple of factors that come into that decision is is. Are you currently married? Do you have any type of income such as pension income or something that your spouse may lose if you were to pass away so life insurance can be used for income replacement? There’s people who carry life insurance policies for final expense policies, just so nobody has to worry about, you know, paying for final expenses. There’s a whole lot of different strategies that we use life insurance to help in the financial plan. So OK, not just one, not just to pay off a mortgage or whatnot when somebody has. So that wouldn’t be the only factor that I would consider.


Speaker 1 [00:22:48] OK, Erin, thank you so much. Brian, this is a great question. This is Justin from Louisville. My employer offers an HSA. Should I contribute to it?


Speaker 3 [00:22:59] Absolutely 100 percent. So what we often have a conversation with clients around is, you know, the taxation of accounts because that’s your biggest expense when you get into retirement is taxes. Yeah. And so what we want to do is walk through the different sources that we have to be able to save. So we look at 401Ks, such h essay’s IRAs, 401, Roths and what we want to do is look at how things are taxed. So the HSA is by far the best savings vehicle that we have because it is tax free going in. It grows tax free because those assets can be invested. OK, and then it’s tax free when you withdraw it. I will say this about agencies there. They’re widely promoted within companies, for sure, but they’re not. Employees are not educated on actually how to take advantage of them. So what they’re told is, hey, you can put twenty five dollars per paycheck into the HSA and then when you go to the store and you need a prescription or you can withdraw that money tax free and you can absolutely do that. And that’s what it’s designed for. However, when you put the HSA in your money puzzle and you look at different strategies that take advantage of the account type, often more often than not when you agree. What we find is that the better strategy is to allocate dollars into that fund because it’s tax free. Let it grow tax free and let it continue to grow tax free until you get later in life. When your medical bills and medical expenses start to go up and you can start to withdraw that money tax free. So are you better off to take money after you put it in to pay for that $25 prescription? No, you’re much better off to pay for that out of cash flow and let that money in HSA grow because it is by far the best account type that we have to invest in.


Speaker 1 [00:24:50] Wow. Excellent, Brian. Thank you so much. Erin, I think we have time for this one question here. This is Dara from HUST is it has her spawn personal yet? Thank you so much. I’ve been told I should be saving 10 percent of my income for retirement, and the most part I have is I near retirement. I’m nervous. That is not enough. So 10 percent of my income for retirement and the most part I have is near retirement. I’m nervous. If that’s not enough, does that make sense?


Speaker 2 [00:25:17] I think she’s yes, I understand. I think she’s she’s nearing retirement and she’s concerned that she hasn’t been saving enough, even though she’s been saving 10 percent. Exactly. OK, so. So again, this goes back to the scenario comes up all the time because it’s common that when people get close to retirement, they start fearing that they’re they’re not going to have enough money to live off of. They’re going to run out of money. Or they fear that there’s the stock market’s going to crash or whatnot so that these are common fears. We see this all the time. The the question is, is 10 percent maybe enough, but we need to know how much income she’s going to need to be able to live off of. We’re going to need to know situations like do you have any debts out there that we still have to be paid on? You know, are you currently married where your income’s when you want your income coming from? So there’s a lot of things that factor into this. Whether 10 percent is enough because, again, there’s not just a magic number that somebody can, you know, Hey, I’ve got to get to this X number of dollars in my retirement account and I can retire. There’s not a magic number. That’s the reason why we put the plan together and we put the pieces of the puzzle together and what we’re talking about this,


Speaker 1 [00:26:30] like the commercial, everybody had a number over their heads. Yeah, I a great commercial. Yeah, exactly. Yup. Bryan with only a minute and twenty seconds left of the show this week. Any final words of wisdom and advice you want to give to the viewers at home?


Speaker 3 [00:26:43] Yes, I would say that this this is really geared towards those that are in the accumulation phase of life. So we we a lot of these questions are sort of pre-retirement questions. And so I would just encourage you if you’re in that phase of, you know, five years to a couple of years away from retiring retirement, of course, come in and let’s sit down and you know, we’ll focus on your retirement income plan. We’ll focus on risk management. We’ll focus on your estate plan to make sure that all the pieces of your puzzle fit together fit nicely together. We’re not trying to cram something in where it doesn’t fit. And then, you know, you’ll have a wonderful retirement, but we just got to make sure that we get it right so that you can walk down that path to financial freedom.


Speaker 1 [00:27:25] Brian, thank you so much. Aaron, thank you so much to the viewers at home. Most specifically, thank you for spending time with us today. The number is eight four four nine zero zero five two one zero. Any questions about how the pieces of your puzzle will fit together? Brian and Aaron have the answers for you again. Don’t miss the opportunity to call eight four four nine zero zero five two one zero. Be safe, be happy and be blessed. We’ll see you back one week from today.