What You’ll Learn:

00:41 – A Quote Of The Week

“Economists report that a college education adds many thousands of dollars to a man’s lifetime income, which he then spends sending his son to college.”

Bill Vaughan

• Joel has sent four sons to college. Therefore, he’s qualified to speak on the subject.
• America has always been about one generation standing on the heels of the last generation.
• Every parent wants to put their children in situations where they can learn and gain opportunities to succeed in life.

2:30 – A Question On Roth Conversions.

• Abe is 60 and will be retiring in five or six years. He wants to know whether to convert his IRA to a Roth IRA.
• Joel explains the difference in a Roth IRA and an IRA. He also covers the concept of Required Minimum Distributions.
• Roth conversions can help you to alleviate a potential tax burden. If you have a million dollar IRA, you could pay a lot of money in taxes when you go to withdraw money from that account in the next few years. However, if you pay the taxes on that account now, and convert that money to a Roth IRA, then your money and any subsequent growth will be tax-free forever.

5:37 – Control Your Risk Exposure

• You can’t control Wall Street, and you never know which way it’s going to move. However, Joel explains you can control the amount of risk that’s in your portfolio.
• As a friendly reminder, don’t try to time the market. It doesn’t work.
• Determine the rate of return you need to thrive in retirement, and adjust your risk exposure accordingly.

7:44 – Build A Lifetime Income Stream

• You can’t control how long you’ll live. However, you can develop a lifetime income stream to make sure you never run out of money.
• This doesn’t mean you have to put all of your money in an annuity either. There are multiple ways to generate income in retirement.

9:50 – Tax Planning Is Crucial

• Tax rates are at historic lows, and who knows whether they’ll increase in the future. If they do increase, it’s impossible to say how much they’ll increase.
• Tax planning could help to alleviate your tax planning in the future.
• Some of your money needs to be put into a tax-free “bucket.” Give yourself options when it comes to how your money will be taxed in the future.

11:20 – You Can’t Control The Fate Of Social Security

• We don’t know what the Social Security system will look like in the future. Regardless, we don’t want you to have to rely on Social Security.
• If you focus on income planning, you’ll be able to declare financial independence from Uncle Sam in retirement.

14:06 – A Question On Inheritance

• Steve received an inheritance from his mom who passed away last year. He recently received a letter telling him he’d have to withdraw money from the account. He wants to know whether that’s accurate?
• Steve, if you have a retirement account, you don’t have to take money out of your retirement account until you turn age 70 and 1/2.
• However, you have an inherited retirement plan. It’s probably an inherited IRA. You’re forced to take money out because that person you inherited the money from was older than you. It’s all based on a special formula.

15:40 – The Unique Challenge Of Age Gaps

• Joel tells the story of a couple he worked with who had a significant age gap between the two of them.
• The husband was about to retire, the wife was still working, and the kids were still in school. Age gaps like this require significant planning.

18:05 – The Unique Challenge Of An Early Retirement

• If you want to retire in your fifties, you need to make sure your money will last that much longer.
• Inflation will eat into your retirement savings. How are you accounting for inflation?
• Consider how you’ll receive health insurance if you’re retiring before Medicare kicks in.

19:10 – The Unique Challenge Of Illiquid Wealth

• If you have a lack of liquidity, you probably need more income. Sure, you have wealth, but you can’t get to it. You need to create income from your wealth.

20:30 – The Unique Challenge Of A Divorce

• Divorces are a serious challenge. In addition to the emotional implications, you’re seeing your assets get cut in half.
• You have to find a way to replace the income you lost in the divorce.
• Your tax situation could change should you get a divorce as well.