We pride ourselves in putting out as much content as possible to assist people with their financial planning so today we’re going to highlight some of the best questions from our Money Wisdom Question Series.
Want to save time? Click the timestamps below to jump ahead to specific spots in the episode.
What You’ll Learn:
One of the things we work really hard to provide for both clients and those interested in learning more about financial planning is a variety of content that can be accessed and used by everyone.
You see that here on our weekly podcast but have you looked around the JohnsonBrunetti website? We feature a number of different resources, but the one we wanted to highlight today is our Money Wisdom Question Series. Very similar to our podcast, Joel answers the top retirement and financial questions our office receives and answers them on video for anyone to learn from.
On this episode, we decided to feature five of the best ones we’ve received.
Pension: Lump Sum or Guaranteed Monthly Check?
For those fortunate enough to have a pension, you might face the decision of whether to go with the lump sum payment or get a guaranteed monthly check for as long as you live. It’s great to have that guaranteed income but the downside is you lose control. By taking the lump sum, you can roll it over and control how much you take each month. You even have the option to start it and stop it as you need. So that’s the choice, guaranteed income versus flexibility and control and you’ll want to discuss that with a professional.
What does it cost to work with a financial advisor?
It’s pretty simple. There are three ways advisors will get paid:
1. Fee by the hour
2. Fee based on the size of the portfolio they’re managing.
You also might get additional services under option number two so check with the advisor to see what they offer.
What is my retirement age?
That question could mean Social Security or pension plan. Let’s start with Social Security. If you were born after 1954, your full retirement age is 67 but you can trigger your benefit between 62 and 70. Pensions are different and specific to the company you work for but most people base their benefit on retiring at age 65. All of this needs to be factored into the money you have saved and how much you’ll need to truly determine when you can retire.
There are two standards in our industry. The first is suitability, which means a stockbroker or insurance agent is required to sell you a product that’s suitable for you. The second is fiduciary, which is a higher standard. It means, from a legal standpoint, the person you’re dealing with has to act in your best interest.
What to do with an old 401k?
When you leave a company, what happens to your 401k? Well you basically have two choices: to leave the money behind in the 401k with the old company or roll it over into an IRA. There are benefits to each, but rolling it over gives you a lot more flexibility, control, and investment options. For most people that come to us, we prefer to roll that money over.
If you enjoyed these questions, please check out our Money Wisdom Question Series by clicking here. You can also subscribe to our YouTube channel to receive real-time updates when the next episode is live.
[0:34] – Pension: Lump Sum or Guaranteed Stream of Payments
[2:01] – What does it cost to work with a financial advisor
[4:06] – What is my retirement age?
[6:45] – Define Fiduciary
[8:28] – What do I do with my 401k when I leave my company?
Thanks for listening to this episode. We’ll be back again next week for another show.
“If you’re relying on your saving for retirement income, you can trigger that anytime.”– Joel Johnson, Money Wisdom Podcast
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- On Financial Instruments and Financial Advisors
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- 2020: A Busy First Half of the Year for Financial Legislation
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