Welcome to retire smart often My name is Cynthia De Fazio and I’m joined today by Philip DiNardo. Capriotti, senior of Empower Wealth, LLC, Phillip, how are you today?
I’m marvelous, and yourself?
I am doing fantastic. Thank you so much for asking. I’m always excited when we’re together in the studio. It’s going to be a great show today. But I want to talk to you about something the name and power wealth LLC. Let’s talk about that for just a little bit because it’s kind of new.
Yeah, it is. So, I’m glad that you brought it up, we’re kind of getting a little bit of I want to say blowback, some folks thought that I sold the company to another company. And no, we didn’t do that. So. So basically, the whole idea behind changing our name, after 18 years of being in business, is we’ve decided to expand the company expand the services, to reach a broader area, in the city of Austin and throughout North, South, East and west. So, in addition to hiring experienced financial advisors and licensed fiduciaries, we now put them through our rigorous training to help them understand the tax planning part of it, the retirement income planning, the social security planning. And with all of that being said, many of these advisors who have come from big box retailers that everybody knows and some love, some do not. We’re making the more complete advisors. So, we wanted to empower and advisors to empower our clients. So, the name came up, it was available, so we took it. So senior tax and insurance advisors is now in power, your retirement LLC, and DiNardo. Wealth Management is now in power, wealth management, it comes under the Empower Wealth, logo or parent company, really kind of nice. These advisors are not employees, they are actually part owners. So, they share an ownership in the company, we’re making partners, so we can grow our services and our company horizontally. So hence the change in the name.
I love that. And empower encompasses everything because everyone wants to be empowered with their knowledge empowered with their financial savvy, if you will. And so, it basically covers everything. It’s a phenomenal name.
Yeah, it’s really great. I was actually surprised it was available, very happy. And at first, I was a little on the fence about it, you know, changing the name after 18 years. I mean, why? And, and actually, it was basically all about branding, marketing and growth. And so, the powers that be the people who really know about the marketing and that type of thing. I don’t claim to be a marketer. All right, you know, I’m a recovering, recovering CPA, we’ll say, and so, uh, but I always take advice from people who know more than I do, just as our clients take our advice with respect to retirement income planning, and so forth.
Sure, sure. And a lot of things have changed. Obviously, we were talking before the episode started. This is our 97th episode. I can’t believe it. I can’t either. I remember back to our very first one. Which by the way, I did not need glasses then. But now I do because we have a viewer question that I want to get into. But congratulations on 97 shows Phil, it’s amazing.
Yeah. And thanks to the viewing audience. And also, thanks to you, because you’ve been with me really from the start. And it’s been great. It’s been a wild. It’s been a great ride, and we look forward to another 90 Plus episodes that have yet to follow.
Most definitely. And I feel so blessed to be on the show with you. So, thank you so much, Philip. We have a viewer question. Actually, this is Mary Ellen calling in from Austin. How does your company structure the perfect tax efficient retirement income plan? The perfect one.
Mary Ellen, that’s a really nice question. It, there’s a lot to unpack. But let’s just take the basics. Okay. So, the very first thing that we do, and I’ve said this in previous shows, we really need to structure we need to look at first of all income coordination and tax planning. Okay, they really go hand in hand. So, for many folks, many of advisors and fiduciaries that are in the business, they may or may not understand the income coordination although a Believe it or not, many don’t. But many times, they don’t even want to touch the tax planning. So, it’s really a happy family, you have to really put both of them together. So, we’ll start with the income coordination. So, in retirement, you have to understand, first of all, while we’re working, we’re in our accumulation years, we are earning a paycheck. We’re spending, we’re saving for retirement, we’re raising our children, some of us even grandchildren involved. Sure. All right. in retirement, we go into our distributions phase. So, it’s accumulation while I’m working distribution, two totally different planning scenarios and situations. Now the paycheck stops. So, what we need to be cognizant of and we really need to focus on is where is the income coming from? So, the first thing we’re going to want to look at is Okay, how about did I pay into the Social Security and Medicare system? That’s the very first question. Okay. So, for 90 plus percent of us, the answer is yes, we have. So okay, so that’s your first and primary income, that’s your green money income, that’s the income that will always be there. And it will always be there for us baby boomers, they may tax it, to sort of give with one hand take with another. But that’s a whole nother issue that comes under the tax coordination. So, we want to start with Social Security. We want to run a Social Security Maximization report and counseling session with all of our clients who have not elected Social Security yet. Understand you’ve paid into this system for 30-40 years. Now it’s time during the accumulation here. Now it’s time to look for distribution. So, there are 81 different possibilities and claiming strategies. Wow, I tell people there 81 Different claiming strategies, depending on where you’re set, you know, where your assets set, where, where’s the money coming from? And they look like really, I didn’t know that. Well, the fact of the matter is there are so what we want to do is run the report to see number one, when are you going to retire? How much did you pay into Social Security? What can you receive at each and every age and how to coordinate it with other income? So that’s first, okay. All right. The second thing that we want to look at is we want to take a look at other sources of income. So, Mary Ellen, do you have a pension? Or have you been saving in a 401? K, a traditional 401k? My next question is, have you over the last five years contributing to a Roth IRA or a Roth 401 K? And we’ll get into that dig into that a little deeper. All right. Do you have other sorts of income? Do you have an investment portfolio, a taxable investment portfolio? Aside from your government tax deferred account? Where that you receive dividends from oil, royalties, gas royalties? Do you have rental properties? Are you receiving rental income, so we want to structure all of the same come together. The next thing we want to do is we want to organize it in a written plan. And then we want to apply inflation, what type of inflation we want to plan for over the next 510 30 years during retirement. All right, we want to plan for tax increases. Alright, so there’s a lot of planning that goes into it. Next thing we want to do is we want to make sure that you have a position to yourself to save in several different types of accounts. Okay, it’s the old I don’t want all of my eggs in one basket. And many of the folks that we see today one of their biggest problems, not problems challenges, who are good savers, hard workers, and they put money away for their retirement is they know we’re never explained the three different types of accounts. The government taxable tax deferred account where you have to take RMDs, the tax-free account, it might be life insurance, and provides tax free income, or my favorite Roth, IRAs or conversions. Okay. And then we want to look at other income, taxable income. So, we want to coordinate your social security around other types of incomes that we expect to take in as we retire once we retire. It’s a very deep question I would recommend, you’d be one of our first five callers today. I would call the 888-818-65577 number. Everyone’s retirement income plan is different. We have done 1000s of them just over the last 10 years. I’ll just take the last 10 years since we started. We’re doing income retirement planning workshops in libraries. So, we want to take a look at this we want to take a look at your specific plan. We want to build the perfect retirement income plan around what your income goals are, and what your major priorities in retirement are as well.
Well, Phillip, I can’t think of a better time to open up the phones. Would you agree? I would agree. All right. To our viewers at home, the number to call is on your screen. That number is 888-818-6557. We know that you have a lot of questions for Phil about how to plan your perfect retirement. He has the answers for you. Remember, if you’re one of the first five callers today, you can book a complimentary consultation with Phillip and his team. That number again is 888-818-6557. And if you have your smartphone close by, go ahead, grab it, click on the QR code at the corner of your screen. That’ll take you right to Phillips landing page. We’re going to take a very short commercial break, but don’t go anywhere. I have a special treat for you. We have more viewer questions and one of those today could be yours. Stay tuned.
Hello, folks. This is Philip Capriotti, senior President CEO of Donato wealth management and senior tax and insurance advisors, you know life’s about choosing where we want to go and mapping out a financial path to get there. Of course, things don’t always go according to plan. An experienced financial advisor and licensed fiduciary can help you avoid potential hazards and find alternative routes along the way. The right financial advisor is there for the journey to help you plan for what’s coming up next, and to make adjustments along the way. The idea is to keep us on track to reach her specific financial goals. Are you on the road to success? Call us today for a complimentary review. And let’s find out together and thanks for watching.
And welcome back to retire smart Austen. My name is Cynthia De Fazio I’m joined today by Philip Donato Capriotti senior of Empower Wealth LLC, Phillip a wonderful show we’re having today talking about of course, the name change to Empower, which I love, and also tackling some really good viewer questions. Are you ready for question number two?
I certainly am. All right.
This is wonderful. Now this is a caller. Actually, his name is David. And he called in from Cedar Park. His question is, what a- put, okay- saying-. I’m sorry, put your plan in writing and updated to review it annually. That’s the question from David, should he have a written plan? Or is it okay that he has something just in his mind?
Yeah, never fly on the cuff. So, David, it’s not only it’s not only important to have a written plan, it’s important to have a professionally well thought out and plan put into writing. It’s tax efficient. The other thing, David is when you put this plan in writing what many folks do, first of all, 90% of the folks that come into our office never even put a plan in writing, nor had their financial advisor actually put a retirement income plan, let alone even talk about social security planning, other than a maybe a brief overview. So, with that being said, it not only has to be put in writing, David, it has to be reviewed and updated minimum at least once a year, once a year. And the reason for that is number one, portfolio values change, retirement income goals change, market volatility changes. Most importantly, tax laws change. And remember, in retirement, you have to have a written plan. But we have to look at the culprits that attack or actually consume our retirement income funds. And that would be taxes, inflation, market volatility, and of course distributions for our own personal consumption. So that’s a great plan. I would call this a great question. And what I would say is, if you’re working with a financial advisor, that has not put together a structured a comprehensive professionally, well thought out retirement income plan, with you being the captain of the ship, meaning asking you the questions, it has to be your plan, not my plan or their plan. I would recommend that you call the 888 number, come in dial 888-818-6557. We take five appointments each week, and please be one of them. We’ll sit down and we’ll show you how it’s done. Whether we work together or not, these appointments are complimentary. I’d love to visit with you and explain it in more detail.
Phil, thank you so much. So again, it’s so important to have that in writing not just have it upstairs. So, thank you so much. Our next question is Ellen from Horseshoe Bay, she would like to know, Philip, I’m concerned about market volatility in my retirement income portfolio. How do you protect against it?
Wow, we’re gonna do a whole segment on this. And was this, Margaret?
This is actually, Ellen from Horseshoe Bay. Okay. All right. motility
Ellen from Horseshoe Bay, love Horseshoe Bay, isn’t it nice out there Ellen, I wonder how long have you been there? Love the golf course is love the people love the whole lake environment. It’s a beautiful thing very calming out there very calming, tranquil, very tranquil. You don’t hear a lot of sirens. It’s not like living in the city where I grew up. So, it’s very, very peaceful. We love being out in the lake. With respect to your question, it’s important to have several different retirement accounts that provide for several different retirement situations. So, the first thing with respect to market volatility, always, always have a professional Morningstar report done by a certified financial analyst, not by yourself, not by something on the internet, meet with a certified financial analyst, we have them in our office, make an appointment and sit down and have it professionally done. We want to use institutional software. Now, it’s not enough just to do the Morningstar report. Then after it’s finished, after it’s complete, sit down with your financial advisor or your analysts, and talk about the different types of accounts. How many are extremely market volatile, what type of bond funds that I have, that are maybe less volatile, we’re going to do a whole segment on this next week, actually. But we want to take a look at this. The last thing is I want a portfolio review and analysis. And what that means in English, is after we’ve run this report on your portfolio, to understand how much risk we have, what the fees are, what is the return over the course of the last 20 years. Take it in segments, we want to we want to know what changes should I make today to protect me against excessive market volatility in 2022, we’ve seen just craziness in the market. Absolutely. I mean, it’s up one day, I mean, today we’re doing this show it’s up 800 points last week was down 1200. It’s really crazy, and but we seem to be trending downward. So, it’s important to limit the risk, limit the volatility in your portfolio, run the Morningstar report, make sure it’s done by a financial analyst, not a salesperson per se. And make sure it’s reviewed or critiqued with you, to give you the answers that you seek, in order for it to have to truly accomplish a safe retirement plan.
Phillip, you’re very passionate about three different colors of money. You’ve mentioned red money, yellow money, green money, can we spend a little bit of time talking about what that is?
Sure, sure. So, it’s kind of like a traffic light. Okay. And you know, this is really old school technology, it almost goes back to the old three buckets, you know, you use this bucket in the first five years, and so forth, and the next 10 and we’ve isolated it down to red, yellow, green money. So red money is money that you can afford to lose. Okay, I’m gonna just say that if you lose this in the market, or the Wall Street casino, or whatever, you want to refer to it as it’s okay. It’s not going to affect your, your retirement income plan. Okay. So, how do you know whether it’s read money, we have to run a Morningstar report, it goes right back to the Morningstar report, because this will isolate it. So, we want to make sure that red money, your entire portfolio isn’t in the market volatility it isn’t. It isn’t exposed to market volatility. So, we want to take a look at it again, random morning. Sorry, point yellow money, on the other hand, is money that goes up or down basis based on the Azure coming to the red light, you know, it goes yellow, you might have to stop, or you can just kind of coach through it because it wasn’t quite right. All right. So, I look at that as like a bond portfolio. The red is more of a total stock portfolio. It may be small caps, mid cap, large cap internationals doesn’t matter. That’s all in the red money section. Yellow money would be more bonds. So, with the yellow money, what you are concerned with is interest rate fluctuations, and default risk. And what that simply means is give me an example. We’ve had several companies, big companies, fortune 500 companies go bankrupt. Well, what happens to the bondholders when they go bankrupt? If you’re holding one of these bonds, and you may get 10 cents on the dollar, you may get zero on the dollar, you may get 50 cents on the dollar. It’s yellow money. You’re depending on for most of these folks, they’re depending on the interest rate that the bonds that the bonds provide. But as interest rates go up, bond values dropped normally about 6% reduction for every 1% increase in interest rates. Now, the reason I bring this up, it’s extremely important because what have we seen this year, folks? We’ve seen the Fed raise interest rates 75 basis points three times and getting ready, probably by the airing of this show. They will have raised it a fourth time, looking to raise it one more time in the seventh December. So, some of my clients at WIPO straight bond portfolio. How did I lose 18% this year? Well, that was yellow money, follow the money. We’re in bonds and it really wasn’t reviewed properly, my opinion. Many folks think bonds safe, bonds green. Not necessarily true.
Well, we’re gonna take a very short commercial break when we come back. I definitely want to talk about green money would that be okay, green money is good. All right to our viewers at home, there’s a number to call on your screen and that number is 888-818-6557. What you’re calling in today for is a complimentary consultation with Phillip and his team. He has available five spots this week. He’s very busy doing a lot of live events and just booking other consultations but he has set aside five appointment times all you have to do is call in today and be one of the first five callers if you have your smartphone next to you go ahead grab it click the QR code in the corner of your screen. That’ll take you right to Philips landing page. Now don’t go anywhere. We have to take a very short commercial break. We’re going to talk about green money when we come back, and we have time for one more viewer question. It could be yours. Stay tuned.
Hello, folks, this is Phil Capriotti, senior president and CEO of Donato wealth management, and senior tax and insurance advisors. You know, I’m often asked what’s more important in retirement, having a great plan or working with a great financial advisor? And the answer is obviously both are vitally important to you and your family. To ensure your retirement success, it is imperative that you work with a competent financial advisor, one who is a licensed fiduciary and who will adjust your plan yearly. One who has your best interests at heart. Retirement Planning is not just a one and done. Even the best plans will need to be adjusted. And that’s exactly why you need an experienced partner to guide you through your journey. How confident are you? Call us today for a second opinion. We look forward to visiting with you at our office.
And welcome back to retire smart Austin. My name is Cynthia De Fazio and I’m joined today by Philip DiNardo. Capriotti, senior of Empower Wealth LLC. Philip, let’s tackle green money really quickly because then I want to get to a viewer question. Let’s talk about green money. Okay,
well, just like that traffic light scenario that we discussed, you’re ready to go. Step on the gas coast through goes easy or as quickly as you like, as long as you pay attention to the speed limit. Okay, and the speed limit is your spending patterns. Okay. Okay. If your goal retirement income is 75,000 A year after taxes, we don’t want to be spending $150,000 a year. Okay. So, when we take a look at Green money, we want to make sure we have a well-constructed retirement income plan. And certain money falls into green categories. I refer to it as mailbox money. So, what is that? Social Security? How much am I getting from Social Security? How is it going to be taxed today and when I start taking RMDs the next thing CDs, money and CDs, green money, it’s insured. Most green money, excuse me is insured and guaranteed Social Security as green money. Your pensions are green money, if you own annuities, certain types of annuities, not variable annuities, but fixed annuities, like my guess that pay. They may pay a fixed interest rate similar to a CD like for three years, you might get 4% for five years, you might get 5% that they’re insured and guaranteed that’s green money, income annuities that also provide ancillary benefits like nursing home care, home health care, long term care, this these accounts all fall into what we determined green money. Remember in retirement, it’s extremely important not to make you have to create balance, folks, you can’t have it all in one account. It can’t be all red. It can’t be all yellow and it can’t be all green as well. We want to be able to spend today, but we want to plan for tomorrow. And so green money is safe money and is guaranteed money.
I love that. Well, Phil, thank you for explaining that so easily so cohesively I love listening to you. We have time for one more quick question. And actually, this is Mary Ellen from Austin. She says, Philip, I’m five years away from retirement, what should I do today? Five years away.
Okay. So, Mary Ellen, a few questions. First of all, how long have you been working and paying into Social Security? These, these are all first of all, Mary Allen, pick up the phone immediately, we have one more spot 888-818-6557 call and come in. And what we’ll do is put a retirement income plan for you. This is the time to do it. I tell clients, if you’re retiring five years from now, do it now. Do it right now. So, you know what to expect. You may not have to work five years, you may find you may need to work for maybe six, you don’t know. So, if you’re getting ready to retire, you’re in what we call the retirement red zone. And basically, this is where you need to get ready to start distribution planning. Where is my money going to come from in retirement? What account am I going to take it out up to make sure that my Social Security once I claim Social Security is tax efficient? Remember, Social Security can be tax free, or it can be taxable, depending on where your retirement savings are and how you take these distributions. So, if you’re getting ready to retire in five years, I’ll get more to the point and you were an average to high wage earner chances are your Social Security benefit will be somewhere between 40 and $50,000 a year, depending on your claiming age. So, we’ll want to sit and coordinate that the other thing is you may have been putting all of your retirement savings into a traditional 401 K. And if that’s been a problem with like with many of our clients, they may have 1 million, 2 million, 5 hundred thousand, 5 million in an IRA or 401K they just been dumping it in the max that they could what happens is we don’t under they don’t understand distributions through RMDs how that’s going to make your entire retirement taxable. So, we want to see where you been, where you’re gone. And talk about your goals and your priorities.
Phillip, thank you so much for another amazing episode to our viewers at home most specifically. Thank you for spending time with us today. That number is 888-818-6557 We did have one spot open, but I don’t know if Mary Ellen did take that we’ll have to double check that if you have your smartphone go ahead and click on that QR code in the corner of the screen. Again, thank you so much for watching. Retire smart Austin. Be safe. Be happy, be blessed. See you back one week from today.
Thank you, Cynthia.
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