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Jim Sloan on how baby boomers can retire comfortably by not drawing Social Security until it's necessary
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Exactly.
So for more tips anatomy rich in retirement let's get into the nitty gritty about exactly what you should do we have Jim Sloan and author of the financially informed the boomer.
Joining us from Houston.
Hi Jim.
I don't and -- thanks for comment on how does a great nice are you very well nice to see you so happy as short answer -- -- -- -- Good it's -- very big question -- does one become rich and I -- -- Well room I think the first the first place Lauren is going to be to become informed.
Become informed about the financial decisions that you make -- -- OK so -- becoming us when -- -- BB -- -- very very good question.
Becoming informed basically is just understanding the decisions that you make in in what we have found and over fifteen years of -- with baby boomers and retirees is simply that the many that come into our office basically to have really no clue on a lot of the financial matters that they should be having answers to such as when should you begin Social Security.
What kind of investments.
Fees am -- paying.
And you know -- that that's a couple that we could start with right there when -- Social Security -- You know that that would be one I went age sixty to 6670.
Would it.
Well it's really gonna depend on each person's individual financial picture specifically how well here's what we know.
If you begin receiving Social Security at age 62.
And you live -- two -- ninety's you'll end up -- hundreds of thousands of dollars on the table.
Now that said it doesn't mean that you should not start at age 62 because if you have a limited assets or resources.
Or no income for the you may need to begin that however only on the flip side if you're currently working and you have substantial assets that you may want to -- and delay as long as you can -- more you delay and -- they'll continue to grow for you -- -- -- bigger benefits are not just yourself but your spouse if you're married as well.
Okay.
You know people are obviously living a lot longer.
I think the retirement age tearing US CS 65 to 65 great.
This is 66 now for retirement age for most baby boomers today okay to -- -- -- heard some big executives like Robert -- Wednesday.
Magazine say at least seven B -- -- even heard eighty.
Longer people you work.
That's a good question because you know it just it's.
And really to open in question because we're you know I just talked to retirement community just this week and they told me because of some of -- bad decisions that they -- was summoned advisors and Ponzi schemes and things we now have people that are 707580.
Years old.
Going back to work now.
I just because they have to make that up.
I'm so glad you brought that up -- because what happened during the financial crisis and people who are also closer retirement they -- their savings -- for a long case patent.
Dwindling if they thought they had eight equity in their house -- Or whatever and there in -- real estate there real assets those have disappeared.
So if you're on the verge of retiring isn't the time.
-- -- that's exactly right and and and that's a good point in the let me also point out the folks that lost 4050%.
Of their -- stake in 2008.
I'll go on record as saying that -- -- never.
Happened and it but it did across the nation it absolutely happened because I've visited with.
Untold amounts of retirees and have -- -- so -- -- had a million dollars now have a half -- why can't last you know two million now have a million okay.
-- you you mean navy took the money out prematurely HA just let everything rebound is that what you're saying why that temperature it happen all didn't.
No not at all not -- on -- on what happened was they basically had a buy and hold philosophy they called their broker they called advisor.
In the end the broker -- said just leave it alone don't panic -- that is gonna come back and here we are you know 44 years later and most of them are still not back to where they work so the answer is this not a buy and hold philosophy today if you take that posture that strategy it absolutely would destroy portfolio.
And change your financial future probably for ever so we believe in actively managing your accounts and here's the key right here.
There are certainly places did you could have earned income -- a nice return in the past decade were.
What's what's happened really is people that have invested for growth.
Have aren't nothing because you get that you know you get the upside in you have to get it back and you get it back again you give it back it's the roller coaster -- However if you invest for income that is a much different play you're going in and you looking to generate yields grabbed dividends grabbed.
Different yields that certain.
Master limited partnerships are.
A publicly traded reits are or are putting out their 67% or so -- that getting out but that takes actively managed accounts to do that.
So what I'm saying is I don't have clients that lost significant chunks of their -- any time in the last sixteen years because we don't subscribe.
To the buy and hold philosophy on growth stocks that's -- Got you okay what are some of the top mistakes -- -- -- that people.
Well one album would be here's a common one that we see folks come in and let's just say we have a hot merit a married husband and wife and I have a couple of children.
Well it's normal for most people that think -- guess guess what we're gonna do we're gonna name these spouse as the primary beneficiary the children as the contingent beneficiary.
And that's okay.
In some instances however becoming informed about the long term consequences of those decisions are very important.
And what we would say is considered this.
Instead of naming the wife -- primary and naming the children as contingent how about lending that children as primary.
And then take you know 23% of -- IRA -- withdraw that every single year to a 3% pay the taxes on that amount and -- life insurance policy that's equal to the amount of the IRA so that means if the husband passes away first what's gonna happen is the spouse will get the tax free death benefit proceeds that are equal to the IRA and the children will inherit that higher -- and they can stretch it over their lifetimes.
And that will that's basically a much better financial picture than just leaving this ticking tax time -- alone for somebody to deal with in the future.
Wow that is definitely.
Thought provoking.
OK and last question fast -- -- you have a will -- through this state plan in place.
I think people come out most of the people to come into see me I would say 80% do not have a will or trust.
And you would need -- will.
For basic things but -- understand what will does not cover and that is life insurance annuities and retirement accounts they have beneficiary designations so he could have a will but it does not apply to those three items and then as far as a trust the only time you would wanna trust is if you have complex situations multiple marriages multiple children's you know maybe financially financially incompetent children etc.
That would be a good time to have a trust.
Jim -- thank you so much for joining us have a great day there -- gonna pull up your website.
And people -- more information you are definitely a source to ask thank you so much for coming on.
