[laughs]

So I advise you that the first step you should do when you leave your employer is to either roll that into your new plan or if you're working with an advisor, someone like Lawrence or myself, or you, or you already have an IRA set up somewhere else to roll that into an IRA because the options that you have inside of an IRA versus a 401[k] are a lot more endless, um, as far as investment choices, tax planning, and kinda changing those investments to work towards your goals at that time.

Um, I kinda consider myself a m- a master consolidator.

[laughs]

Yeah

... all of these RMDs, are they getting done? And I had basically offered to her one day, you know, like: "Look, I know you don't work with us on the investment side, but just for just the ease of the stress, you know, just consolidating them into one single IRA for you and one single IRA for him, then you can have someone like us who takes care of the RMD for you so that you don't have to worry about that, and then you're making sure you're withholding enough tax." Um, another situation I kind of come across in the last couple years is I had an elderly client that was, um, a parent of one of my existing clients, and her husband was kinda showing signs of dementia as well.

And she was very sharp when it came to finances.

She kept a spreadsheet and everything, like in her 90s, of all of her accounts.

Which ones?

I'm going to start with, well, I agree with one and three.

I feel like you should definitely diversify your income beyond one retirement account.

We're big believers in specific buckets of money having specific goals for your retirement.

And I'm going to use one of my clients as an example.

She's a little bit on the younger side of clients that come to me.

She was in her early 40s.

We're not going to drastically reduce our spending, right?

[laughs]

Yeah.

And, and the thing that I just wanna mention about this, this scenario too is, okay, if you're using, if you're taking the million dollars cash and using it to generate the income that the $60,000 income that you're foregoing, you can't touch that million dollar asset because you need it to generate that $60,000 in income.

Right.

So whether you have a million dollars cash or not, you know, to Ryan's point, rather, rather have the money coming in, you know, as being deposited irrelevant of interest rates, irrelevant of the stock market, irrelevant of real estate.

You know, if you bought a house around 2008, you, you know, the value of it probably went down 30, 40, 50% from 2008, and let's say you wanted to retire in 2018 and downsize, well, you're upside down on your house.

So there's all these different scenarios where at the end of the day, people want that paycheck, kind of back to the last, you know, question that we were kind of talking about, at the end of the day, where's my paycheck coming from? If you're using that million dollars to generate that $60,000 a year paycheck, you can't just go spend the million dollars 'cause you're gonna lose the paycheck.

Is that the answer? What is the runway to get us out of this? How long does it take? How complicated is it? Let's talk a little bit about that.

Yeah.

I mean, again, it all comes down to your specific situation, what your income needs are in retirement, how much your income is, et cetera, et cetera.

But it's basically a formula that, you know, Lawrence and I and the team know very well that we look at, you know, what does it look like if we do nothing in this guy's case? Now he's faced with this larger tax bill.

Or what does it look like if we strategically do some tax planning along the way? So again, it's looking at, you know, where's your sources of income coming from? And you said something earlier about, you know, being excited about 401ks because you could basically create your pension.

You're kind of in charge of it.

It's almost better for us to do tax planning when you don't have a pension because that allows us to get you tax free quicker.

Yeah.

that you set out for us that says we were gonna retire at age 63, we were gonna delay our social security for one year, claim it at 64, turn on the other sources of income that you've set up at that exact time, that way we're only coming out of pocket about $40,000 for that first year of retirement because that gives us a big enough nest egg to where we feel comfortable for our emergencies and extras account for the rest of our lives.

No, I was just to say, I just had the same kind of conversation with a client where they've kind of moved the goalpost on retirement themselves.

And this person just happened to be a government employee.

She retired from the federal government, so she was getting her pension from OPM.

And we had had several conversations about when to take Social Security and, You know, again, same kind of conversation as a cash flow issue.

She does have longevity in her family.

So I had kind of just said, hey, you know, let's just take it now, you know, because it's not really going to benefit you to wait rather than take that money out of your portfolio.

Catherine, I'll give you the last word on this one.

Mm-hmm.

So we wanna look at how much do we need to set aside to cover that, that, that difference, the donut hole of $35,000 a year for the rest of your life.

And when you're retired, we're talking for 30 years for most people, 'cause most people are retiring in their 60s and are living into their 90s.

So, you know, you've, you've worked all these years, but you need to make sure you have this income to protect you for that next 30 years in retirement.

So when we look at that, you know, if that number...

There's different ways to produce income.

So, you know, you can transfer the risk to an annuity company where they can, they can protect your income.

Mm-hmm.

[laughs]

E- exactly.

So, you know, um, we get a lot of questions about Medicare when people are getting to that age, and most people are working longer because they want to, not because they have to.

But then the, the Medicare question comes into play.

So for people that are delaying Social Security 'cause they're either, A, still working, or B, they have the nest egg to support it and they wanna delay Social Security longer, th- they, they're asking what are more tax a- advantage ways to pay for Medicare premiums.

Um, so one of the things that we've discussed with, uh, one of my clients who, they've retired out in Pennsylvania, um, she had a, a high, um, deductible plan where she had an HSA.

So the couple, the few years before she retired, we basically max funded her HSA, and then once she retired, we used the HSA to pay those Medicare premiums-

Right.