Welcome to Retire Smart Austin. My name is Cynthia De Fazio, and I’m joined today by Phil Capriotti senior of Empower Wealth and tax to our viewers at home, we’re going to talk about something very important today. We’re going to talk about what the modern retirees are concerned about. We know the face of retirement has changed through the years, obviously, since parents and grandparents have retired. So, what are you thinking about today? What is bothering you? What are your concerns? We’re going to dive into those. Phil, How are you?
Good. Good morning. Cynthia, how you doing today?
Good morning, my friend, I am doing wonderful. Blessed to be with you in the studio today. It’s going to be a great day.
As am I. Yes, it certainly is. We have some interesting topics to talk about, and this is really a pretty unique topic. It’s something that I don’t believe we’ve actually done a show on, but I think it’s very, extremely important to be able to discuss these things openly. There are so many concerns that folks have, and literally, from interview to interview, many clients that come into the office calling in from the show or the radio show, I get different concerns from all of them, so I thought, why don’t we do a show on concerns and folks, if you have a specific concern that you may have in retirement and that we haven’t covered by the end of the show, please write in and let us know, and we’ll cover it on a future episode.
Most definitely fill and obviously, I know you’ve been so extraordinarily busy. We’ve talked about this every week. We deliver such amazing information to the viewers at home, and the phone calls come in. The QR code gets snapped a ton just by opening up that camera on your smartphone and clicking on that QR code, it takes you right to the landing page for Empower Wealth and tax and people have been taking advantage of that.
I think what’s happening? Maybe this may be a variable. We only take the first five callers, so I think a lot of folks figure will slip right in there by hitting the QR code, and that could, and that might be something, I don’t know, that might be something to look at, but at any rate, we’ll see as many folks as we possibly can, because this is all about educating, and it’s all about advising, again, from an independent, licensed fiduciary, which is what we are. So, bring them in. It doesn’t matter. Come one come, all.
Absolutely. Well, Phil, correct me if I’m wrong, but when I think back to retirement in the I want to say olden days, but definitely years past, if you will. You used to think about people retiring and sitting on the porch having their lemonade. It was simple then, because most people had pensions, you had social security, and that was really all that people needed. It was simpler, but wow, let’s fast forward to where we are today. The world is complicated. There’s problems right now. Everywhere you turn this is driving people up late at night. People can’t sleep right now.
There’s lots of drama, and it seems every time you turn on the any of the news networks, even when it comes to turning on the weather, it’s more drama after drama. It’s like negative cells. Now it’s extremely important to be aware of what’s going on modern day events. I think that if we were truly aware of everything that’s going on, we really would have concerns, but many of the concerns, like back in my parents’ day, when they retired, mom didn’t have a pension, but dad was a Teamster. He had a pension. They both had social security. They had sufficient savings. Back in my Grandparents Day, they didn’t have pensions. They really didn’t have social security, but they had big families. We had like, nine aunts and uncles on my mom’s side and seven aunts and uncles on my father’s side, so the children would coalesce around their parents. And again, that was your retirement security being with your family. I love that now, yeah, nowadays with baby I mean, with us, with us baby boomers, there’s a whole different scenario. Our kids are they. They’re in the rat race. Both of them are working in many cases. They had their own lives. They had their own children. And not only that, we’re a self-sufficient generation. We want to do it on our own. We don’t want to depend on anyone, because we never did. And so, with that being said, one of the number one top issue that folks come in is financial security. And the amazing thing Cynthia is folks that have literally seven-digit retirement accounts are concerned about financial security. Ever since we have seen the runaway inflation between covid 2020, runaway inflation as soon as these policies basically affected everything, transportation costs, everything, when we see inflation of 8.7% which is really adjusted towards the old way of calculating inflation, would be close to 17% it reminds us of back the late 70s, when Mr. Carter was in and again, when we had the oil embargo. They all revolved together. We have an oil shortage or an oil crisis. We have it for different reasons. Nowadays, folks are concerned that inflation, it continues through the next decade and further decades, because of the increasing debt, a couple million is not going to be enough in retirement. And folks are concerned with that. And so, with that being said, we’re going to talk about that other things with financial security. Some of our clients that come in are concerned that their pensions are going to go bankrupt. Wow. They’re concerned that when you take a look at everything since covid folks are working at home, we see a downgrade of commercial real estate. We take a look at the teachers and federal government employees and state government employees, they want astronomical raises, and the fact of the matter is, it’s all taxpayer funded. So, they’re concerned. They’re basically concerned, as far as I’m concerned, they have a right to be valid concerns. Yeah, between cost-of-living increases. And will Social Security be here? What are they going to do with social security? I think the number two, I’m going to say highlight, or the second concern is health care. I would agree with that, yeah. And so, we talked about health care. You know, I have Medicare, and we have, I have a regular supplement. I have what’s called Original Medicare. I don’t believe in the HMOs, because, again, I want to be in control. But whether you have Medicare or an HMO, one of the biggest health care concerns that you have is long term care and home health care. So, for many of you folks who think that Medicare will cover home health care and long-term care. I have news for you. It does not. If you have the financial resources to pay for it yourself, you will be you will have to. It’s never covered that. Now I also have folks conflating Medicare and Medicaid. I have Medicare and Medicaid. I hear people saying that folks are two separate programs. Medicaid is a welfare program and that will cover limited home health care and long-term care going in a government funded facility. But for those of us that have our own resources, if we do not have long term care insurance or coverage, we have to make allowances for that. That would be the number two concern.
Okay, that makes sense. And Phil, correct me if I’m wrong, but Medicaid is something that you don’t want to rely on, because that means that all of your resources are gone, correct? That’s the way that I understand that.
Yeah, you qualify for Medicaid when you’ve gone through the spend down process, which means the only money you have left is your last 2000 or so dollars? Yeah, yeah, yeah, and so. And then I have folks that say, Well, you know, I’m not worried about that. I’ll, you know, stay in my home. And that’s right, they can’t take your home right now, but they’ll put a lien against your home. But again, we don’t need to concern ourselves with that. We need to put the retirement plan that covers the concerns together Absolutely, and so that’s what we specialize in. The other thing that we see a concern is longevity list, risk, I’m sorry, living too long. So, one of the workshops we do our retirement master class, we talk about Social Security benefits and mortality rates. So, one of the unbelievable mortality, I’m going to say data points, is that most of us men pass away before you women. Okay, true, sadly So, and yes, sadly so. I don’t know. Maybe it’s divine intervention, it’s all it’s all good. But here’s the bigger divine intervention, women tend to live an average of 14 years on average after their husbands or counterparts pass on 14 years. Know that? Wow, yeah. And one of the other data points, which I was shocked with it was, was that 98% of Social Security recipients, okay, that are survivor recipients are women. Oh my gosh. So basically, yeah, 98 out of every 100 people getting a survivor. But. Benefit from Social Security are women. So, what’s the point? The point is, when we structure your retirement income plan, we have to do it past the death of the first spouse. We need to make sure that our spouses are taken care of, tax efficiently, and making sure, again, it revolves around the Secure Retirement
Well, Phil, we have to take our very first commercial break. I don’t want to do that. I know this is so interesting, but we have to our viewers at home, there’s a number to call on your screen, 888-818-6557, and if you’re in the viewing audience today with a cup of coffee and you’re asking yourself, do I have real peace of mind when it comes to my retirement plan? Do I have some of these modern-day concerns? As you can see, some of those are valid concerns. So, what Phil and his team have decided to do is open up the phone lines today. 888-818-6557, they have room for only five callers today to claim your spot with Phil and his team. If you don’t have a pen handy, that’s okay. You can grab your smartphone click on that QR code at the bottom corner of your screen that will take you right to Empower Wealth and tax landing page you can claim your time accordingly with Phil. We’re talking all about the modern retiree and some of the concerns that you’re facing. We have so much more when we return.
I first got in the financial world in college the first year, summer, I got a position as a laborer underground, and about 110-degree heat. After that first year, I realized there’s no way on God’s good green earth that I’m going to be a laborer for the rest of my life. So, it made me really buckle down to my studying. Second year, a friend of mine got his insurance license and worked with a company called the Palm-Ross agency. So, my very first week, I’m broke, I go in, they give me 50 leads that been worked by about seven different agents. So, I’m thinking, I think they don’t want to give me the new leads because I’m green. But okay, I’ll go on it. I had made more in that first week that I made in an entire month as a laborer. I did that my sophomore year, my junior year, in my senior year, I got ready to graduate, well, graduate on top of my class my senior year. So, I’m getting offers now, and I have another offer from banker’s life occasionally, to go into their entry level management program. I was the very first branch manager, the youngest branch manager with anchors life, and casually, I was running the Philadelphia office. By the time I was 25 I was running the Toms River New Jersey office, and I was running the reading office. So, my wife was none too happy with me at that point. So about three years later, I started my own company, and that’s when I actually decided to become independent, and then the rest is history. I’ve been in this industry for quite some time.
Welcome back to Retire Smart Austin. My name is Cynthia De Fazio, joined today by Phil Capriotti senior of Empower Wealth and tax and we’re talking all about some of the concerns that the modern-day retiree is facing. What’s keeping you up at night? We’re going to keep going on this very important topic. Phil, obviously, this next one we talk about quite a bit, but I can understand why this is on the list, market volatility that’s keeping our retirees up at night. Those that are in the concerning that haven’t come into the office yet, I should say. But let’s talk about that, market volatility.
Many of- and that is a serious concern, okay? And the reason it’s a serious concern is because many advisers, and I’m going to talk about big box retailers, nothing against them, but they’re not really concerned, overly concerned with market volatility, one of the one of the excuses, or one of the terms you hear, is, don’t worry about it. The market will come back, right? Well, when you’re in distribution planning mode, no law, no longer working, getting a paycheck, when we see a 2008 another a financial crisis and another one is right around the corner. Everybody knows it. No one wants to talk about it, but it’s going to be, it’ll be stem through commercial real estate and also other variables. But with that being said, one of the problems in retirement with market volatility is you do not have a stepping off point. Many advisers simply don’t say, Look, if we see, God forbid, a terrorist attack, God forbid, or we see some sort of a major meltdown war, we have no idea who is coming over the border. If we see something that causes global markets and local markets, domestic markets to crumble, we will move your portfolio into cash at a certain level, so they don’t have a specific drawdown. Number one of the things I like to talk about, and this refers to tactical and strategic asset management, so one of the things I want to assure a client is that. God forbid if something major happens, we have a stepping off point. How much is it? Well, not just a percentage. I want a numerical value. I want a numerical percentage and value. You have $2 million if the market drops 10% and you lost 200,000 Are you okay? Should we stay in? Okay? Many folks will tell me when you’re moving your money out, Phil, I want you to move mine out as well. I can understand that, right? But what we want to do is we want to take layers of risk off when we start to see turmoil in the market, when we want to do that actively and tactically, so we include that in our portfolios when we manage that because that we really want to take that risk out many folks that retired in 2008 with from October 15, ’07 through the beginning of March ’09, saw the S&P 500 drop 52% guess what history is. Tend to see the repeat itself, and I’m sure it will true. So, we put fail safes in our portfolios to prevent that.
And I love that, Phil, because obviously everyone’s tolerance for what they can lose is different. And so although I think it’s amazing that people say, let’s move money when you do, but that’s not everyone’s threshold, right?
That’s correct. Everyone’s risk tolerance is different, everyone’s suitability, everyone’s net worth, everyone’s goal, retirement income spending limit, is different, but that’s a concern, and we put that to rest one of the other well, there’s so many different concerns. What do you have on your list next?
The big one: Social Security, and I think basically tying into the fact that there’s such a scare around that right now, is it going to go away entirely? That’s a worry that people are having.
Many folks that filed for Social Security early and didn’t get 100% of their primary insurance amount, or 100% of what they paid into Social Security, which is the amount you get when you file it, full retirement age, your specific full retirement age, are in all probability, going to see cuts in Social Security, regardless with of whether if you were born 1954 or earlier you and you filed a 62 you’re going to get 75 cents on the dollar. What we’re going to see is means testing Social Security benefits. They’re going to an all and Congress is already talking about it’s behind the scenes. You’re not going to hear it on CNN. You will hear it on our show or any of the news networks, not to choose any specific one. But what they’re probably look what they are looking at is dropping benefits approximately 20% as we go further into the red. Not right now, it will be after an election, when that talking point is too much of a hot potato to deal with. But with that being said, it’s extremely important now to maximize your social security, to hedge against that potential reduction. The other thing they’re doing with Social Security is they’re taxing the dickens out of it. So based on the amount of your RMD or distribution from your qualified retirement accounts, that affects how your Social Security is taxed. If you come into one of our workshops, whether at the Horseshoe Bay Yacht Club or any of the local libraries, we talk about this in very in detail, you may want to call the office and come in for our personal consultation. We’ll do your portfolio review. We’ll also do a portfolio analysis, and we’ll talk about this social security and pensions also being cut. They’re going to means test tax it, because right now, we have too many folks on Social Security that haven’t really paid into it like we have.
Wow, all of these topics are so incredibly important. Phil, we have to take our second commercial break. There’s an offer that you have. Let’s talk about what that is.
Yeah, snap that QR code over there in the left-hand corner, or give us a call at 888-818-6557, come in and let’s see what your limit to risk in the market is. We want to run a professional Morning Star Report. They’re done by our certified financial planners and analysts in our home office in Phoenix. Let us explain it to you, give you a copy, and then also help you understand what is your return, what are your internal fees, how much volatility is in your portfolio, and what changes we would recommend you make, whether you work with us or not in the portfolio, to reduce that. Dial, 888-818-6557, or click the QR code and come on in and let’s sit down have a conversation together.
Phil, thank you so much to our viewers at home, that number to call is on your screen, 888-818-6557, as you can see from today’s show, we are well aware that you have concerns about your retirement plan. Those are valid concerns. The times that we’re in right now are so turbulent, why not have peace of mind? At night when you’re going to go to sleep and know that you’re going to be fine in the retirement years, you just have to do one thing, call in to 888-818-6557, and claim your spot with Phil and the team accordingly. If you don’t have a pen handy, as Phil mentioned, grab your smartphone, click on that QR code at the bottom corner of your screen. That will take you right to the landing page for Empower Wealth and tax we’re going to take a very short commercial break. Don’t go anywhere. We’re talking all about some modern-day retiree concerns. We have more to get through when we return.
The work never seems to end until the day it finally does after nearly a lifetime on the job, you should be rewarded for all the time you spent working, whether that’s crossing off items on your bucket list, learning a new passion, or rekindling the love of an old one. After all, life isn’t over when you stop working. It’s the start of an all-new chapter, the one where you’re the writer and you get to choose how your story will go. A way to achieve that is by having a clear financial plan to sustain your golden years. The biggest fear most retirees have is if they’ll have enough money to maintain the lifestyle they’ve always enjoyed. Having a plan to help protect you against the curveballs life often throws will help to maintain your lifestyle. Call today to get your free written financial plan so you may live every day to the fullest and enjoy the retirement of your dreams.
Welcome back to Retire Smart Austin. My name is Cynthia De Fazio, joined today by Phil Capriotti senior of Empower Wealth and tax. And we’re talking about some modern-day retirees’ concerns. What are you thinking in the audience today? To keep going on this same vein, we’re going to jump right back in Phil. Let’s talk a little bit about this one. Because this is something that you’re passionate about. You’re so extraordinarily knowledgeable about, knowledgeable about, and you have the tax office as well. Taxes, huge concern for modern day retirees. Taxes.
You know, folks, next week we’re going to be doing a two-part series. Hopefully it will probably go two parts on the tax cuts and Jobs Act President Biden has vowed to end the track the Trump tax cuts. We’ll get into that next week. But folks are concerned about taxes going up, and taxes and inflation are really hand in hand. Inflation is a hidden tax. Taxes going up. Now, taxes going up. It’s going to happen because our partner, Uncle Sam, our partner in our 401K, are qualified accounts, in addition to increasing our RMDs by changing the uniform life expectancy code. And if I’m speaking Greek to you right now, pick up the phone and give us a call, because you need to understand how this is going to affect your taxes in retirement. But taxes will have to go up now if they truly revoke and do not make the track at the Trump tax cuts permanent. Automatically, every single tax bracket will have a 20% increase. Wow. So, that was the decrease number one, they took the standard deduction and doubled it. So, we got an additional deduction. That deduction, if you’re 65 now, if you’re married, foul and joint is $29,200 if in 2024 if you’re over 65 you get an additional $1,550 on top of that, okay, in addition to that, for each spouse, that’s over 65 so now we’re looking at 32 $33,000 in deductions right off of the bat that affects the lower income folks. They want to eliminate that and but again, it’s not fully being explained. So, with taxes going up, you’re going to have to raise taxes, but in addition to making those expire, so if you’re in a 10% bracket, you’re moving to 12. If you’re in a 12% you’re going to 15. If you’re in a if you’re in a 22% bracket, you’re in a 25 it continues to go up, up, up, and up. So, taxes going up in retirement, they are looking at means test taxing distributions from qualified accounts, which means, based on how much is in your qualified account, what the value is, they will charge a certain flat tax on distributions. Wow. The other thing that they’re talking about, we’ll get into more detail, is eliminating long term capital gains. So, one of the things I respect about this current administration is they’re very transparent in telling us we are going to raise your taxes. Okay, so with that being concerned for those of us who are getting ready to retire, and I’m talking about our listeners and our viewers. Yeah, we’re concerned with these taxes increasing over the next 2030, years. We’re not talking about a temporary why? Because the debt is being blown out of proportion. So, there are two different types of taxes, folks. Number one the taxes we pay each year to the government in the form of writing a check. And the other tax is the hidden tax known as inflation. So, the more the government borrows, the more the government prints. China doesn’t want our debt anymore. Can’t hardly blame them. We’re printing right now at the taping of this show, about a trillion dollars extra every 100 days, on top of the 5 trillion we take into in in tax receipts. Well, when you start printing money, it becomes worth less. That’s inflation. So, we saw inflation literally spike in 2022 21 and 22 and 22 and 23 real inflation is really up over around, it’s about the same amount as the interest rate on your mortgage. Wow, okay, it’s truly about 7% but they take out food and fuel and some other some of the necessities that we use. So, the point is, when it comes to your retirement planning, we have to look at tax efficiency. I want to buy the government out of my retirement plan. And if you have not done that yet, you need to pick up the phone, make a phone call, 888-818-6557, also, when we incorporate your retirement income plan, we want to make sure that it’s tax efficient. We also want to make sure that income increases by a minimum of 3% each and every year to keep pace with inflation. So, by buying the government out of our retirement plans, by doing exercising Roth conversions and other strategies that we use and implementing inflation increases each and every year, we can help protect you against a comprehensive retirement income plan that goes straight through to the end of your life. We like to plan it out to age 100.
Phil, tremendous peace of mind is what you’re offering our viewers today. And I don’t know how people can resist picking up the phone to our viewers at home, there’s a number to call on your screen, 888-818-6557, we realize that you’re in the viewing audience today with some very valid concerns about your retirement plan. Phil is offering you this complimentary consultation to five callers only today. 888-818-6557, or grab your phone, click on that QR code at the bottom corner of your screen that will take you right to the landing page for Empower Wealth and tax. You can schedule your time with Phil and the team accordingly. Be safe, be happy and be blessed. Most of all, we’ll see you back one week from today on Retire Smart Austin with Phil Capriotti Sr, take care.
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