Investing and Financial Planning Strategies

5:48
Hello and welcome to the quarterly podcast with WellSense. We are excited that you're with us today and taking time out of your out of your busy summer. Uh we have a action-packed show and agenda that has been really meticulously thought out so we can make sure you're getting the most out of your dollars and cents for your retirement journey. Uh, who am I? I am Mario Inigas, a wealth manager for NFP coming up on 18 years in the industry. Uh, my mantra has always been to help people build and manage wealth and make complex things seem simple. Alongside me is my colleague Susan Johnson, financial coach for NFP. Susan, tell us a little bit about yourself.

6:29
Thank you, Mario. Hi, everyone and welcome. As as Mario said, my name is Susan Johnson and I'm a financial coach here at uh NFP. I've worked in the financial industry close to 20 years. Oh my goodness, time flies. And what I do is I partner up with your HR team and of course you the employees to bring very clear, concise financial education. And some of the topics I cover are, you know, budgeting, understanding your investments. We cover retirement planning, a little bit of uh estate planning, and definitely preparing for retirement. So, we're excited about today. And before we start, Mario, give us a little overview of like the overall sentiment in the market and you know, what you see going on right now.

7:20
Yeah, that's a great that's a great question and what a whirlwind we have all experienced since the beginning of the year through April with the tariff providing market uncertainty and look where we are now. I mean, talking about the middle of the year. If if I would have told you back in April that US stocks, large cap, S&P 500 would all be positive for the year, right in the middle of all that turmoil of all that uncertainty. Most people would probably be very bearish or thinking that there's no way pessimist there's no way we'd be positive. Well, we are. Uh the S&P is six six and a half% year to date up. Uh the Russell 2000 is still down. those are smaller companies so there's buying opportunities there. So hopefully we're we'll talk about good diversification. Um the big surprise has also been international equities. So people forget that in an international port uh segment of your portfolio. If you incorporate international, you expose yourself to about another 50 countries, another 2,000 companies. And lo and behold, if you would have had international experience throughout this whole time, you would have seen great benefit.

8:26
And as a matter of fact, everybody should be checking their their Q2 statement. So that's the that's the second three months of the year after, you know, January, February, March. So look at the April, May, June statement of earnings. I bet you're going to be pleasantly surprised, especially if you have any exposure to US international equities.

8:47
So that's it's it's been amazing. I'm a forever optimist as a wealth manager and I try to help people try to with their blind spots. Susan, with with the people that you've been working with since the year to date, what's what's been some of the sentiment that you've kind of heard?

9:07
Well, you know, everyone's always concerned because they don't follow the market like we do. So I feel it's our job to keep them focused and to say forget about the news, the bullet points that you're hearing to in you know to implement whatever kind of emotion they're trying to and just realize we're in this for the long haul. You, me, and everybody out there. So you know when we get these what you just mentioned about the international market, that's a great perk because as we know it's not like it's going up forever and it's going to constantly do that. So that's why and we're going to talk about that in our next segment, you know, um the dollar cost averaging strategy.

9:42
Oh yes. Yeah. So just just to round out a few last points on the top of my head coming in today I think people should know is we got through the the big bill the big budget bill that came through and you know that's that's going to have implications obviously on national debt. We're sitting at like 36 trillion in national debt. Uh economists are projecting it's going to add about another three three and a half trillion. Um there are there are some cuts about a trillion to Medicare and Medicaid as well. The uh and and some of those the cuts to Medicare and Medicaid are actually going to take interesting enough are going to take effect after the midyear uh the midyear election. Uh so that the midterm elections also in addition to that too thinking about thinking about tariffs there's not as much uncertainty as we felt back in April.

10:28
There are still some things to be worked out. I was doing a deep dive into this. I don't know about your household, Susan, but our household, we we like oranges. We love orange juice. The US gets 70% of its orange juice from Brazil. I did not know that. And so, probably most people think Florida, right? I thought so, too. I've been thinking like, wouldn't that be Florida? But apparently, we get a lot of juice, a lot of orange juice, a lot of OJ from Brazil. So, I'm hoping that uh our household isn't as impacted with hopefully get this all squared away.

11:04
Um, the things just to think about too, I know on the last probably quarterly podcast people were thinking, oh, are there going to be any Fed cuts? G Fed cuts, federal interest rate cuts. They did project two two quarter rate interest rate cuts for the year. And it's still, you know, about a 50/50 if they get all both of them done. Uh Powell, the Fed chair, said he's not going to step in unless he absolutely has to to be able to quill any uncertainty with inflation between now and the end of the year. But again, I go back to me being a forever optimist.

11:35
This is not our first rodeo. Uh typically what you have at the end of the year, you have a big retail push. You have Black Friday, all those companies trying to get into the black. We're going to see a lot of great deals. We know inherently that consumerism, consumer spending drives a large part of the economy. I don't think that's going to slow down anymore. If anything, hopefully it picks up. Yeah. And the other thing I want to mention from the the big bill they passed is it'll probably mean more stock buybacks, too. So the last time that in Trump won when they passed uh the the tax bill a lot of companies took advantage of that did stock buybacks and then it's projected it's going to see feel some of that same thing again if not more amplified.

12:18
Uh but enough about the market. Uh let's let's get pair down more from an aerial view down to a micro level as oh and actually I almost forgot. There is a question we want to put in the prompt. How do you guys feel about the stock market? Do you think the stock market will end positive or higher for the year? Do you think it'll stay about the same? Do you think it'll be lower or D not sure or other? So, make sure you weigh in. We want to hear your sentiment out there as you're listening to us. How you think the stock market will perform by the end of the year? You heard you heard my two cents.

12:55
What are you know? Let's hear the audience two cents. Um, so as they're answering that, kick us off with talk a little about investing, Susan. Yeah. Well, here's the thing. Whether you think you're investing or not, guess what? You are. And most people don't realize that. They kind of try to think outside like, "Oh, my friend has this account over here and he's doing that. My neighbor's doing this." But you know what? If you are in an employer sponsored plan, such as a 401k, 403b, or any other type of employer sponsored plan, you're investing. So that's what most people fail to realize. And the thing is is what we're going to talk about in this next moment here is that we want to get you to be familiar with that and just understand some basic concepts so that you don't feel like the what I get is, "Yeah, I'm in something. I don't know what it is." So, we're going to take a moment and go through and we have um you know a few things to share. So, number one is in your retirement plan right now. The beautiful thing is that it's all coming in via contributions and the average person decides whether what percent. Sometimes you could do a dollar amount but for  most people it's a percent. And from there you are then indicating is it going to be pre-tax or after tax?

14:12
And Mario, as you know, after tax is the Roth because people are like, "Well, what's the Roth? Do I have to do it outside of my plan?" And the answer is no because most uh employers have that incorporated in their plan. So, that's a beautiful feature. We like that. And um you know, Mario, I just was looking at something the other day and I was trying to say I was saying to myself, when did the Roth become, you know, in existence? And it was 1990, but it didn't hit the retirement platform until like 2006. Oh yes. And most people think it was like maybe five, seven, eight years ago, something like that, right? Because we're not here. Oh yeah, that's a good point that people tend to It's like a little bit of a recency bias that Yeah. So in the 90s it first came to IAS and it wasn't until about 2006, you're right, that it could start coming into qualified plans like 401ks. So, people tend to know pre-tax really well, but then they start to get a little bit confused or not sure how they could implement it in their retirement strategy with the Roth.

15:18
Yeah. Yeah. Should we take a minute just to touch on that before I go into the next segment, which is going to be our investment types? Do we want to stress that, you think? Maybe. Yeah, we could give like a back of the envelope view on it. So, pre-tax, we all should have a very familiar uh intimate relationship how that works. It's all the contributions that come off the gross part of your paycheck. And so if you're doing 5% into your 401k plan as a contribution, that 5% is coming off the largest part of your paycheck before deductions and before taxes. And that actually lowers your income, that pre-tax amount. So when you get your your uh you get your W2 from your employer, box 12D of that document actually shows the pre-tax amount that actually lowers your income.

16:04
Now, the Roth is the opposite. It's the contribution off your net take-home. And then this is where people kind of get like, oo, should I incorporate it or not? Well, the nice feature of the Roth, obviously, since you're paying, you're making the contribution already having  paid the taxes, now that money grows taxfree. And I will tell you a thousand times over as a wealth manager, I do like people having pre-tax and Roth in their nest egg at retirement because it gives people options. We're living longer. uh what people want choices in retirement. Even if you had only $30,000 in a Roth account 65, that could be property taxes, a deductible, a car, a trip, and anytime you take money out of that 30k, it would be essentially tax-free. Uh so those that's that's my quick 45se secondond maybe. Um yeah. No, I think that's so important because you know if we if I you know depending on your age, but like if I look at my parents, they did not have that option. everything was 100% pre-tax. Some of the younger um younger employees, and when I say younger, I'm saying anywhere from 20 to 30, their parents most likely had that.

17:13
So, yeah, I just had a conversation yesterday with someone who was just starting out in their career and they were in the pre-tax and after explaining it, they're doing 10%, they're going to do 5% in pre-tax, 5% in the Roth just so that later in life they have that option. So, good point. So now once you determine where that money is going, pre-tax, after tax, what have you, it then has to go somewhere and we your fund has many selections. So I'm going to ask to if you could put up the slide for the uh type of investment funds because most of you have seen these types of funds when you're looking at your menu. And it might look confusing, but I just want to break it down. It's like going to a restaurant and maybe a French restaurant when you're seeing all these categories and you're knowing, all right, what's that? I don't know what's that. But they all work together and they all have a certain meaning, so to speak.

18:05
So, we're going to kind of break this down a little bit so that again just to put in the back in the back of the toolbox so that someday, you know, you'll be like, "Oh, I I remember that." So, our money markets are going to be our basics. Um, we're not worried about mun bonds in in retirement accounts, but you definitely have income funds and then there could be categorized as growth funds and then you have growth in income. We have balance funds, international funds, global sector and aggressive growth. And underneath each of those are various types of also funds and you know we we'll we'll mention a few in a moment but what I wanted to mention is that once you determine and select a various type of in uh fund so for example I'm going to go with the balance fund because under the balance fund category most people will be familiar what that entails and that's going to be a style what's called the target date funds and most of our people out there are in these target date funds and those are the ones that have the number the 2040 the 2060 2065.

19:12
Another category in in under the balanced or just as a quote style would be are you conservative, are you aggressive, are you moderate? Those are all going to be the style of whatever type of fund you choose. Mario, you have any thoughts on that and what you see when you're talking to people and what they know about this or don't know about it? This is a great question. So, obviously like if our parents they had pensions and pensions, you didn't know what you're invested in, but you got a guaranteed monthly payout. And now since pensions don't really exist anymore, we have to take on the responsibility. How much are we contributing and what are we investing in?

19:55
And I do see it, Susan, where people are need help need help as far as understanding and navigating what different types of investments to have. You make a great point that the target date fund is often the default fund in the plan and that's the fund that gives gives you the most protection with the least amount of effort. Right? So it it basically it's like a catchall. So if you were born in 2000 and it would put you in the 2065 fund because approximately in 2065 you turn 65 and then throughout the you throughout the entire life of that fund that you'd be investing in it it's diversifies you.

20:32
It's aggressive in the beginning. It goes more conservative over time. It's rebalancing year to year. It's it's getting you set up for retirement. So there's there's controls or parameters built in. And I'm glad you put this slide together because it highlights a factor that beyond the target date fund, there are other investments that people can pick from to get a personalized portfolio. Yeah. And many of, you know, we see this in our selection of funds. Most of you out there, you're going to see things like, oh, well, I have a u midcap growth fund. I have a large cap growth or small cap. Well, guess what? they go under that category, the fourth one down that says growth fund or a growth in income. What are our growth in income funds going to be? The income would be a type of a dividend fund. So you see how now it all they all have like a a category underneath this type of investment which would be considered their style and how they're under the global fund or actually under the uh international fund we have things called emerging funds. Same thing under the global, you know. So, it gets very interesting.

21:38
Again, we don't all want to be I mean, some people, you know, this is not their thing. That's why they like the balance fund. They like the target fund. And I I have a little term I call the target fund the no-brainer fund because all you have to do is figure out when you're going to retire, figure out your percent, and it's basically going to be done for you. But the people out there that like to take a little more active then now you know you can see there are other things that you might choose to invest in. So the the last thing I wanted to mention on this was um there's various strategies because once we now pick our fund what is our strategy and uniquely to retirement accounts they're kind of already laid out for you and that is we we touched upon it in the beginning the dollar cost averaging and that's a strategy and that just means a various time that you are putting money into the market and for us you know in the workforce it's usually every pay period. period and whether it's bi-weekly, monthly, you know, however it is, that's what we call dollar cost averaging. 

22:44
And and we love that, Mara, because we do we just what you talked about the market now. When that market goes down, we don't have to look at it and say, "Oh my god, the world's ending." Because we know, how do we know the saying? Buy low, sell high. Well, it's going into buy low at that point because we're not really retire. We're not retiring tomorrow. We've got another 15, 20 more years. So the dollar cost averaging is definitely already implemented in in a retirement account and then it's basically another strategy is that it's passively managed because these funds are all you know mutual funds and ETF funds and we'll explain that in a moment.

23:27
Um and it's also a buy and hold strategy versus somebody who might be investing on their own outside of retirement where they have an actively managed portfolio and they're doing it themselves. So, just kind of shed some light. I I love it. Yeah, the you highlight a lot of great points that I wish people would uh really listen to and and incorporate in their portfolio. Uh one, if you're not in a target a fund, get good portfolio construction, a diversified approach. I know you got a slide coming up here that talks about that. Um I would I would en encourage people try not to day trade their 401k or their retirement account. I would encourage people try not to microwave their retirement plan. It's really this long-term steady as you go, one foot in front of the other, brick by brick approach that really wins out over trying to do a lot of effort in a short amount of time to try to outpace.

24:16
So you got to think on your retirement plan where you work. That is not Wall Street. That's not day trading. That is a long-term, like Susan said, that's a buy and hold approach that can really benefit you. I'm seeing sentiment here. There's a lot of people that are positive about the market. I love that. Good. I love that. So, by and large, I think most people are positive. You have to have a little bit of blind spot to know that it's not always going to go up. Um, you know, go ahead. I see Michelle says, "With your 401k, there are no instructions available on how to invest."

24:47
Well, Michelle, that's why we're here at NFP. you can always reach out to uh we're going to show you the information at the end on how to reach out and if you ever want to talk to myself or Mario but I think for your question you know it'd be appropriate I you know for me to help you with that or you know whatever plan provider you have whether it's Fidelity or Empower or whatever they will certainly be able to help you do that but again we're here for you at NFP and that's specifically you know my department as a financial coach So, hope to hear from you. Um, so Mario, going back to what you said on that.

25:25
Okay. So, we discussed contributing, we discussed does it go pre-tax or Roth, we discussed style, we discussed strategy, and now let's talk about the asset classes because once we pick any of these funds, guess what? Inside those funds is a whole another world. And it's going to combo comp comprise of stocks, bonds, and let's include cash with that. Okay? Mostly stocks and bonds, but we'll we'll include cash. And that's how you get your quote diversification because, as you know, we don't we're we're not we don't like to put all our eggs in one basket. This is not back in the day where you took the newspaper and you said, "All right, threw a dart. What stock do I uh invest in to get rich?" No, this is a we're deal with diversification. So, let's see the other slide uh the kaleidoscope. And Mario, I want to hear your thoughts on this. So, when I first saw this slide about 20 years ago, I was like, what am I looking at? Someone please break this down for me. I'm seeing all these rectangle boxes and their colors. I go, how am I supposed to make sense of this?

26:33
Over time, I started to realize how important it is to have gives you it gives you perspective. So, for example, at the very top of each column, there's a year. So this one goes all the way back 2014 and you actually have through Q1 data through March of this year 2025. The color that's on the top of each column is the winning asset class or sector for example. So for if you look at 2024 large growth companies, the big companies, Nvidia, Tesla, Alphabet, Meta, Microsoft, etc. like the Mac 7, they're a part of those large growth companies. They won. They won hands down. I'm almost need my readers to read that, but it's I think it says like more than 33%. So, we got 33% they were the hands down winner. At the bottom at the bottom of the column, you see who fared the worst. Right now, you can see now here's here we want here's this one of the points that Sus and I we want you to get from this.

27:27
There is no consistent winner every year. Sure, large gra large large cap growth has really done well over the last 10 years, but it has not won every single year. Your thoughts, Susan? Yeah. No, very good point because um I like to use the beginning of COVID as an example because so many people including myself, you know, thought, "Oh my god, the world the market is crashing. It's going to be another 19 29." But the iron and the beautiful thing about it is that it clearly demonstrate what happens in the market and most people do not realize it and that is within a month later those returns were starting to go back up. Not to mention how the S&P 100% rebound back by the fall the fourth quarter. So um that's very important because what if you didn't know that and you went in and you're like oh I don't know what I'm doing. I I got to get out of it. I got to get out.

28:26
Well, guess what? You now just created a loss because you just sold that, you moved it, whatever you did. But if you were just took a breath and said, you know what? I remember in that presentation they said, you know, don't worry about it. This is what happens. And you took a deep breath, by year end, you were back to normal, if not, you know, definitely sooner than that it started rebounding. So, I think that's really important. And that's what this chart, you know, shows you. Yeah. The absolutely. So if you look at every column, there's a balanced rectangle which is basically the diversified approach. And you can see it gives you a more even smoother experience over time as far as performance. It's not going to be the big big winner. It's not going to be the big big loser, but it gives your portfolio.

29:12
It doesn't have to endure as much volatility, the eb and flow, the peak and valley. Uh so I mean there's obviously if you're if you're listening to this and you're in your 20s, yeah, you're 100% stock market exposed. you don't have any cash core fixed bond income in your portfolio probably and as a result you're going to see more volatility but you also have more time to absorb that volatility.

29:35
Um I I think we also had a had a question too for for the investment. Um when's the last time you made an investment change? This could be to your retirement plan, an IRA, a brokerage account. When's the last time you made an investment change? So, we'll put that up on the screen and ask you there's some choices to pick from as far as wanting to get from you.

29:55
When is the last time you made that investment change? Was that in the past year, within the past year or was it uh never? Um was it more than a year ago? We're just curious. We're curious. Obviously, if you're targeting changes, the thing is is that if if somebody was maybe early in their career, like maybe ear mid20s, late 20s to say mid-30s, I would say, and I tell my clients this, there's really no need to be making changes because hopefully you've taken the time to get into it properly. But for everybody else who's kind of midway towards the end, by all means, and that's when we encourage you to, you know, based on the assets that you have maybe elsewhere and even that you have here, touch base with a financial advisor to see if you are on target because you might just be in something because your uncle told you or your neighbor told you and it doesn't really fit to what your internal game plan is. And I feel like to that's what Mario does. That's what I do with people.

31:02
Match you up to what your game plan is long term and make sure you're following that. So, um, yeah, I like that. I like this question a lot because I think at least once a year people should be going in and just looking at what they have. But I want to answer a question on here and it said Mary asked, "Is there a class that we can take that would help us manage our funds?" And if you touch base with your HR department, they will touch base with our with the Wellsense department and WellSense has various classes like we have an investment class and a budgeting class, you know, various topics and your HR might take a little survey to see what everyone is interested in or they might set you up annually to have one, you know, twice a year or what have you. So touch base with them and see. But we definitely have that available. So thanks for the question. I love it. I love it. The uh I I know we were we're going to look at day-to-day management kind of tips and dos and don'ts.

32:04
Anything anything last comments on the investing side that comes to mind, Susan? No, I think that's it. And I think one of the things, yeah, we're just kind of stressing is yeah, people take a look, see what you have, get familiar. I mean, sometimes people have not even logged into their account. And that's really important because you want to make sure number one, your beneficiaries are updated that got, you know, what if you're going to buy a house and they ask for documents. They're going to say, "What is in your 401k?" You're going to need to print that up. And many people are like, "Wow, I've never logged in before." So, make sure you can at least get into your account. Yes, that's that's a great point. I I remember with working with record keepers over the years that it used to be thought that if you never registered your account, it was safe. But now they're actually encouraging the opposite. They want you to go in, claim your account, create the user ID and password because that makes it harder for nefarious actors to try to claim that account for them. Yeah. To get in there and do stuff.

32:58
So this it's um so yeah. So another question we want to as we lead into day-to-day money management, we want to post everybody that's listening to us or or watching us or maybe in the washing dishes or driving around. Um, if you were given $5,000, so if you again, if you were given $5,000, what would you do with it? And we have some options here. One, or A, pay off debt. B, save for emergencies. C, invest it. D, other, I I didn't see a river cruise on there or a trip to Sicily. Uh, I'm one of those weird people where I actually enjoy saving almost as much or more than I do spending. Lo and behold, I'm a wealth manager. So, that's kind of how it worked out. The We're curious to hear what you guys have to say on this question. Yeah, that's posed. We're mid year. Remember, Christmas is in six months. Hanukkah, Quanza, all the retail season. Are people going to be thinking about that?

34:01
Um, I wish I could have been at the MLB All-Star game last night and at the whole thing in Atlanta. That's probably where I be would have put took some of that money and trying to have a better relationship with money. I can't I don't want to have to save it all. You got to enjoy it a little bit, right?

34:13
You got to enjoy it a little bit, right? Like my grandpa would say, there's there's no hearse pulling a trailer, you know? So, so I have I have a question here from um Oh, Kina or Karina maybe. Ross is Oh, no, wait. I'm sorry. Um Nico, I'm sorry. I'm gonna come back to your question. Nicole asks, "Is it recommended to to convert a 401k into annuities when retiring?" Are annuities tax higher? I'm going to refer that over to you, but I would say that's going to definitely you're going to have to dig deeper to see a lot uncover a lot of things before we It's not a yes or a no thing. What's your take? Yeah, I I would agree with that. I'll go  the same sentiment and say this that there's no oneizefits-all, right? Annuities don't apply to everybody.

35:01
The way I look at annuities, it has to resolve a solution. It has to resolve an issue. Has to create a solution for an issue. Has to fix the problem. Maybe we've done a really good job investing and growing a nest egg. And we have the investment portfolio, but maybe we're looking to combat inflation. And if we're looking to combat inflation, maybe a piece of the nest egg goes to an annuity to help combat that. There could be a a tax efficiency that could be very attractive on annuity for generational wealth. But I am of the mindset, remember within an IRA or a 401k, they're already pretty darn cheap. We are in a such a reduced fee era for 401ks and qualified retirement plans and IAS and investments. You can get the same benefits, right?

35:52
You you are getting you are getting the the platform for which whether whatever record keeper your employer has the investments all at the lowest cost ever in the history of investments and ETFs which are exchange traded funds they're available in IAS they're incredibly skinny as well. So we but what I'm trying to say by kind of adding to this emphasis about how everything's so inexpensive nowadays, there's been such a fee compression over the last 15 years that when you do get an annuity, they are more costly. They they do cost you more. And so yeah, I would just be very do your homework.

36:30
Talk to the financial the other big thing about the annuities is again like you said, if you're going to put a piece of the your your f your situation into it. Okay, maybe. But once you put that money in there, you're locked in. That's it. So, let's just say, god forbid, you you said, "Oh, I'm going to take my whole account and put it into an annuity." And you needed money more than you were getting monthly. Well, guess what? You can't take that. And if you do, there's a huge penalty involved. So, that's why it takes more than this type of conversation that we're having here. So, that's something you would definitely want to meet with a financial advisor and discuss. Now, here's another question. Uh Teresa asked, "At age 59, and Mario, you touched on this, I have a 401k. Should I also have a Roth?"

37:15
Oh, so this kind of goes to a time horizon question. Let's say this person retires 65. They have about five plus years to invest in a Roth, which they've never done before. And then you got to break it out. What is that? Is that one, two, 3,000 a year for five years? you can quickly do the math and how much the the contribution cost basis would be the growth we can extrapolate based on a calculator what the return would be the ROI but is that going to be significant enough for that individual to do to have Roth now in in their uh with the remaining years for work I will say I want to add one more point to this too most Americans most not all but most most Americans when they retire they actually retire into a lower tax bracket meaning they're living off less income when they were both gainfully employed. Right? So, that's something to think about as far as what's your income going to be, what's your income now, and what does it look like in retirement.

38:16
And the reason why that's important is because if most of your assets are pre-taxed, it's possible when you when you run the numbers that these pre-tax withdrawals that you'd be taking in retirement will be taxed at a lower rate. So, that's something you probably want to know now and kind of start true figuring out what that would look like. So, that's that's a great point. But also, too, um, uh, Teresa, if you feel like, hey, you're going to be working till 67, maybe 70, then, okay, maybe you don't contribute to the pre-tax anymore, depending on what your balance is, and and now go, if you're doing 10% in the pre-tax, you want to just start contributing to the uh, Roth after tax and build that bucket.

38:57
you know, that could be a strategy, but again, I think there's we need more information to the puzzle, but uh that we're just giving you some kind of food for thought. So, I'm loving these answers. So, I'm seeing a lot of pay off mortgage people how they would use the $5,000. I'm seeing pay off the mortgage would be a big one from one individual. Let's see here. A lot of answers. Would pay off debt or save it. That's good, too. I would say just like Susan said earlier and how what I'm working was struggling with as a how how I'm built genetically how I handle money. It is important to to have fun and to reward yourself for the hard work that you're doing. So if you're paying off debt, for example, and you're setting a budget when you pay off those debts, mark the flag in the sand and uh and then really kind of do a little celebration and then get back on the horse and get back to work. 

39:50
Some people, like myself, I just want to run through the wall and rip off the band-aid as quickly as possible. However, doing this for as long as I have, I'd realize that I'm probably very much in the minority of how I tackle problems. So, when I'm working with my clients and individuals, incorporating that psychological behavior rewardment, that uh gamification is very important, too.

40:10
Yeah. Um I I saw a question here I wanted to answer. Um this is interesting. What about an older 401k plan that holds a lot of cash rather than investments? You know, I had this situation previously with some clients who they had an older retirement plan and they were stuck in the cash account because at the time it was guaranteed rate of like a 3% situation. And guess what happens at that point? people at that time, you know, we're going back 10 15 year years or so or more and they went in for the that 3% and never moved it. So those are the people that are now saying why hasn't my fund performed because it hadn't had exposure to the market. It wasn't diversified. So what I would say to the person who posed that question, not enough information to give you a concrete answer, but touch base with it. Speak with Mario. he can look and see what's the balance of your portfolio, what are your other options, how much more time, as you mentioned, your time horizon do you have to retirement to try to maybe make up for how much has been sitting in cash and not performing maybe the way you would have liked it.

41:24
So that's a great point. So, like on this day-to-day money management topic that we're on, where I see people needing the most help is understanding where their money is going and being able to put a self-control parameters on what where the spending is. Because think about it, there's a finite amount of money coming in each month. And if you're just going through monthtomonth and everything just somehow works and you survive, we can do better than that, right? So I I what I do is we sit I sit down with individuals and we start to track spending the I like to make it visible for individuals. So when you write it out total amount of income you're going to receive telling each dollar where it's going to go. That's a zerobased budget.

42:06
You may have heard that in some financial circles. That's a really good starting block because it shows you what your overhead is for the month like what you absolutely need to get through a month in your life. And then you can start looking, okay, if I have anything left over, margin, discretionary income, what am I going to do with that? Pay off debt, increase retirement, save for the holidays coming up, say for that bucket list item. But if you never actually look at the data, it's really hard to to stay on track of where your goals are.

42:36
So I even have individuals when they put their budget, I haven't put on the fridge. I haven't put on the vanity in their bathroom. I haven't put the app on their any app on their phone that's decent. It's just the way it's constantly reminding them of what the goals are because all this stuff pulling out our at our attention on a day-to-day basis. Any thoughts or comments on that, Susan? Yeah. Um, when I asked that question because it seems so simple like, oh, all right, I'm going to have a a a presentation on budgeting. All right, I know I know budgeting. Everyone kind of thinks they know, including myself. I'm I'm putting myself in this category until I sat down and did the nitty-gritty. So, one one thing I would recommend I'm a big notebook person all over my house. I have notebooks. I just love notebooks. So, get yourself a notebook. Can be any size you want. And just start jotting things down. Maybe you heard ear earlier like, "Oh, I'm thinking about the Roth. All right. 

43:29
I want to do that contribution." Uh oh, budgeting. Okay. So, with the budgeting that you mentioned, Mario, um there's a couple apps out there that I really like. And number one, Credit Karma has a good one, and it's so basic, but they have really good things. And these are free, so you can go on it and um just look through and see what you know, what f tickles your fancy as far as getting started. But guess what? Even Google Docs has many templates on a weekly budget, a monthly budget, quarterly, however. find one of those and and do it. Um I know um you probably know Dave Ramsey out there. He's a big financial guy. He likes to account for every dollar and he used to have that envelope theory like once you get paid and you get your net it every single dollar should be accounted for. Um x% for you know your main things, your entertainment and your savings.

44:28
And so that works for some people. Some people that's a little too stringent, but to find a plan that you know fits with your personality, your family's personality can really help you clear that up, you know. Oh, absolutely. One of the biggest budget busters that I've seen when working with individuals and families on their budgets, it's food. And so what we do to be able to put a parameter on there and and this is like what great grandma used to do because she didn't have access to an MX card is she would put the the groceries uh the grocery spending as a cash envelope. And so every time that she went to go to the meat market or she went to go to the produce and she and she bought stuff, it came out of that one envelope that that was earmarked for groceries until they got paid again. And this is from an era where mason jars were still really good. And for some reason they ran out of they ran out of that that cash envelope.

45:26
Then great grandma what was she doing? She was open up the the pantry to see what food was there which it was a different it was a different era and they were they already had builtin constraints because money wasn't as liquid and you couldn't borrow as much but with that you also weren't in debt as much and you also had a really nice it gave you that discipline through it. So I I again I encourage people to and there's obviously a couple merchants out there either for your coffee or for your restaurant of choice that maybe are pay or are cashless right at POS the point of service but if you can that's a really good way how much grocery spending do you need for the month how much eating out that could be another cash envelope that's a great way to make inroads the and then we'll get to the questions in a second we might have time just to kind of speed through we had a little thing about near retirement and we have another our last question today and we'll make sure we'll try to get through as many Q&A as as possible.

46:15
Our fourth question was, "What's your biggest concern going into retirement?" What's your biggest concern going into retirement? And we have a couple of multiple choice here to pick from. So again, what's your biggest concern going into retirement? So we we'll put that up on the screen so you have a chance to weigh in on that as well. Uh but as we're doing that, a couple housekeeping items. Oh, here it is. So, not having enough money to retire, rising health care cost. C is losing employer provided benefits. That's a good one. Thank you, Kelly.

46:52
She's running all this right now as the producer. Lacking a sense of purpose or direction. And E, market volatility impacting investments. And while you guys are looking to weigh in on that, a quick checklist here, and this this also for your 20- year olds, your 30somes out there, make sure that there is some type of parameter on the investment side that if you're not in a target a fund, that you're speaking to a financial pro to making sure that your risk appropriate. And what that means is that you're not too aggressive or you're not too conservative. We have tactics or measures when we look at rebalancing to making sure we're keeping the the investments what they should be doing. beneficiaries. How often, Susan, do we see people not put beneficiaries on the call?

47:35
Yeah, that I mean, because you think automatically it's on there or I did it once, but especially if let's say you're with a plan provider and they got a new plan provider and there was a transaction, you know, a couple years ago to a new plan provider. you were at Fidelity, but you went to Vanguard or you went to Empower, whatever it is, always check because sometimes that information doesn't necessarily go over.

48:00
So, yeah, good, good one. I'm seeing some interesting answers here. So, uh running out of funds, losing employer benefits, I'm seeing another running out of funds, health care costs, not having enough money to retire. So yeah, it does weigh on our minds because now more than ever we're living as as long as we have ever lived as as humans and that's in part because of hopefully have healthier lifestyles and and healthc care advancements and technologies for example. Um so we talked about the investment risk portfolio that's important. Hey Mari, I want I want to just ask you something. I see a question that says um have you have you used the do department of labor search function to find prior 401k accounts and does it work? I honestly didn't know that they had that quite frankly. I mean I I'm aware that various states have what's called like unclaimed assets and sometimes they pop up there. Sure. Um I didn't know the do had that. Did you were you aware of that?

49:01
I have not used that. I have not used I'd be curious to see how accurate it is. Yeah. I think what it's going to be dependent on the data that it gets from employer sponsor retirement plans plan sponsors. So business is sharing data of where they have unclaimed accounts or basically what you have is if people leave and your old employer does not have your new address or new contact information that account's going to sit there if it's especially over $7,000 until you come back out and talk to them and reach out to that HR department. I have a question for you. Um, we can both discuss this.

49:42
Is it a good idea to move part of your 401k once you are 59 and a half to another type of account? I would first off say not necessarily because of the fact that let's say you have an account of 300,000. Maybe you have a million, whatever it is. Maybe you only have $10,000. Whatever. The point is is that you're still working and it's still in there accumulating and growing based on your strategy. And if you have a good person that you're working with, then why move? But I find most people are not getting any kind of service from where they're at. So, they do want to move. But if you were to have it just because you're 59 and a half, I it depends.

50:24
Again, it depends on the situation. And so Mario, what are you finding with some of your clients at 59 and a half? It definitely has to be a good fit. So for example, there there's some real advantages going to an IRA. So you have the whole investment universe to pick from. You can get incredibly tactical and efficient on tax efficiencies, tax strategies. You have complete access to ETFs, exchange traded funds. You could create a portfolio as skinny as less than a tenth of a percent. So point, you know, 07. So seven basis points. not even a tenth of a percent of portfolio would cost you. And and then all of a sudden you're that if you're working with a financial advisor, you get all of the like the deep software that we use in analytics like NFP for example where we're running income portfolio projections. You can be a little bit more nimble maybe taking money out on an IRA as well.

51:16
And then when you do retire at 65, you could just move whatever's left and and typically the advisor is helping you through that, helping you prepopulate the form, checking up and making sure the checks, you know, being applied and received. It's it's definitely merited a conversation to talk to somebody if you're thinking about that. Uh, you know, the last thing I'll recommend on near retirement people is whatever your time horizon, if it's five or 10 years, try to eliminate some of that debt. the less debt you have going into retirement is the less that's swimming around in your brain.

51:46
Now you can actually enjoy retirement more. There's like le one less payment, two less payments a month and that really helps clear the psyche. So if you can structure your time horizon and making sure we're eliminating debt as much as possible, that's really going to make sure you're getting the most out of your early years of retirement, which tend to be the most fruitful because that's when we feel the best. Yeah. the u you know you we we did have one more question. I actually lied. I thought that was our last question. Our fifth question, if you want to put it up, Kelly, it's what percentage of people have spoken with a financial adviser?

52:22
So, just in general, how often what percentage of people you think have spoken with a financial adviser? And we have four different choices there. And we'll we'll get we'll go straight into uh the Q&A as you guys are populating this. So, whatever we see in there, Sus, let's make sure we answering people's questions. Yeah. No, I see a question here. Um, uh, again, the annuity, some of the annuities offer 20 to 30% bonus for transferring from other retirement accounts seems to be too good to be true. And I'm saying in my head, yeah, big red flag. Stay away or investigate further? Absolutely. What are your views on 457 uh B plans? do you recommend?

53:02
Okay. Well, there's two types of if we're talking about 457b in the sense that you're a governmental employee, city, state, local government, that's kind of similar to like a 401k or a 403b. However, uh when you're an executive and you have a compensation plan, they have what's called a 457b.

53:21
So, I'm not quite sure which one he's talking about. Sure. So maybe that would require contact one of us and you know to further decipher it. But it's not like oh you can just go get that. They have to be offered to you through your employer. Definitely the 457b for an executive and then the other one if you're an employee. So Sus is making a great point here. A governmental employ plan for a while. They had a 457. It's a voluntary retirement plan. Works very similar to a 401k. Also it's becoming increasingly more common for non-qualified plans.

53:52
Those are also under the same 457 which are typically given to highly compensated employees, seauite employees. It's seen as a kind of like a golden handcuff benefit. Um seeing a lot of people here guessing I see three A's.

54:06
Uh 25% of people they thinking that have actually spoken with a financial advisor. I'm seeing one D. I'm seeing another A. I'm seeing four A's. I we'll come back to it in a second. We'll give you the answer in a bit because there's an answer to this. Uh Robin asked, "Do you handle wills and trust?" We do provide strong guidance on wills and trusts. A trust is typically handled by an attorney. They help you create that trust. So myself, like I'm not an attorney, so we would help you to the extent of our expertise and then we would invoke an attorney to help get across the finish line. Kathy guest C.

54:43
I'm going to give it 30 more seconds and we'll tell you the answer. It is important to have wills and trust uh to making sure that your loved ones know exactly your intentions of of your assets and material possessions. So, we do provide good guidance on there. Um we have another question from Paul. Speaking of beneficiaries, I had younger children that I don't want them to get their hands on a sizable amount of money if I passed away within the next few years. When does a trust come into play versus a will? It's a great question.

55:12
So, what here's how to handle this. So, you do not have to name your children as beneficiaries. Uh, a trust does put more stipulations on how the money is to be handled and who it's going to. Remember, on a on a will, it is subject to probate, meaning people could actually see in a public record. A trust you can't. That's kind of nice about a trust. They can actually see where it was allocated to or who it was allocated to, company, person, whatnot. Uh, so that I had individuals I had a client that had four sons and I was reviewing the beneficiary paperwork and like I'm like, "Hey, Charlie, you left off his son." He goes, "Oh, no. I meant to leave that son off on on his 401k." I'm like, "Hey, that's that's his 
right. That's his right." Speaking of most retirement plans, your spouse, if you're married, tends to be your your primary, unless they sign off with a notary, they don't want to receive the money.

56:08
And then there's contingents upon that that in case the primary is unable to receive the money or elects not to receive the money, the contingency is where the money then flows to. Next, let's see here. What else are we looking at here? I wanted to answer this question. Um Anna said, uh, "My husband and I are 37. How do we know how much we should contribute each paycheck? Also, would you recommend we open a Wroth or increase our contribution per paycheck?" I get that question a lot and I could sit here and say, "Well, you should do the max."

56:40
Now, the max is 23,500 if you're under age 50. That's a lot of money. So, this is how I like to approach it. Again, I don't know obviously her situation or her husband. So, off the cuff, I would say, you know, make an appointment with us with me and um but in the meantime, look at what you have disposable, what you can comfortably afford. I mean, the minimum is like say 10%, but even that could be a lot if you're just starting out. So, if that's too much, then you start out 3%. And then maybe the next year at the end of the year, the beginning of the year on your birthday on Valentine's Day, you go, I'm going to increase it a little. Now, I'm at 5%. And then next year, I'm going to go to 7% or 10. But try to get to 15%. I'd say that's what most financial professionals would recommend. I would, this is great.

57:36
I would add one more thing that 15%. I would I always say in the vein of 15% per household. So, whatever your spouse is doing and you're doing, if it combines the 15%, you've met the target or at the very least 15% is the target to kind of move to with you yourself, it's just you or you and your spouse moving together towards that number. I I'm seeing here a follow-up question. Why move your funds if they're already being matched by your employer? I think that's to the earlier conversation regarding if once you hit 59 and a half, you can roll out money.

58:03
You can roll out money at 59 and a half and still keep the account open and contribute to it and still get the match. So that was that'd be the thing on that. Robin asked if you're retire retiring at 62, house paid off, no debt, good idea. That's a specific question. It's a loaded question. Yeah, that's a good one. It's a good one. In theory, it sounds good, you know, but sounds good. Yeah, there's there's more to unpack there to give you a more contextual answer. Yeah. But generally, if somebody has sizable investment assets, no debt, and they see their cost of living, they can live where they where they're current living for many years, I I tend to lean maybe more towards 62. But we have to kind of unc unpack more details of the situation.

58:48
How's the health, right? Where are you living? Is it LA or rural Iowa where I'm originally from? Right? Those could be all big indicators. Okay. Uh, what else we haven't we got to yet? I'm gonna go to the very top. Yeah, we're trying to get to as many questions as we can. Um, Rebecca, I see one here, Susan. Rebecca asked, "Does that 15% include or exclude employer match?" I typically do not include the match on that 15% target. Here's why. I sometimes get I get yelled at. I get it. I understand because it's nice to add it to it, which is nice. But I don't know where you're going to be working in 5 years or 10 years.

59:22
Maybe your next employer has no employer match or maybe has more match, maybe has less match. The one thing I can count on is that you're still working and you have a paycheck. So, I I actually look at employer match like extra icing on the cupcake. I mean, if it's I get extra icing, great. But if I don't, I'm the one that's making this cupcake. What you see, Susan? Um I I I'm going to just uh sidetrack for a minute. Kathy, Karen, and Mark are the only ones that guests see on the question that you asked that. Thank you for going back to that. We got a little bit sidetracked there.

59:54
So, see, it's about one in two, depending on what study you look at. About 45 to 50%. Wow. Have actually talked to a financial pro. So, don't be one of the don't be half of the population that hasn't spoken to one. You know, reach out at the end. I know we should mention because I know Kelly prompted us at the beginning before on our huddle meeting before today's show. There will be a survey. We're having fun here in time for We're having fun

1:00:17
We could go We could go a whole another hour. There is a there's there's going to be a survey at the end. I know for wellness points there's a summer there's like a password code. Kelly, if you can remind us what that is. It's summer something. Yeah.

1:00:30
Take today's there's the Okay, there's the QR code. If if you if you want to consult with me, just mention my name, Mario. I think I'm the only Mario that works here. Ah, there it is. Summer money. So, mention in the end of the survey, summer money, you get if your employer offers wellness points, you get more wellness points if you mention that. Mention Susan's name. If you're doing, if you want to speak to Susan, mention my name. You want to speak to me.

1:00:53
Um, someone someone Oh, sorry. I'm sorry. Go ahead. Someone mentioned I forget her name. Um, she said when she goes to the grocery store, she has an envelope and she brings her three kids. That's it. She's one. You can relate to that, Mario, with your kids. I do. I do. I have a three, a five, and a 13-year-old. So, they're taking up most of the discretionary income right now, as luck would have it.

1:01:16
You don't take the kids to the grocery store, right? We both we both parents have to be there if we're going to have all three kids because I don't think one individual can handle it. Uh, that's fine. What are your thoughts on a variable annuity with a GLWB writer? Would it be wish would it be wise to move part of it to a 401k if you're about two two to four years from retirement?

1:01:35
That's a great question. I think that would merit a consult to look at the specificities of that variable annuity. There's other things attached to it. Uh the writers, those are incentives, sweeteners to annuities that in order to attract you to them and also look at your time horizon. But this is that's a very good question, very well thought out. I just think it just merits because I think you know what it is. The annuities, they they're just so kind of old school that people think of them as 100% security. And nowadays, you can create that security with the help of an whatever advisor you're working with. You can kind of create that yourself for less money.

1:02:14
But again, there's like Mario said, there's more, you know, pieces to that puzzle. So, I see that Laura asked, "I have a Roth. Can you please explain if I take out money after retirement? Is that considered income and taxes income?" So any Roth money at retirement, as long as you've had that Roth from the first contribution five years and you are at least a nine and a half, any withdrawal from the Roth is taxree. Any withdrawal is taxree from the Roth at that point. Do you see anything else, Susan, that we missed in the chat for questions?

1:02:45
Uh, yeah. Um, near the end here. No, I think we're good. And like we said, I mean, time flew. we're already at, you know, it's like one minute before, you know, one o'clock. So, please reach out to us and thank you. Everybody was so interactive today. We really love that. And um yeah, so any this has been great, Susan. It's always a pleasure. I wish we live closer. We go grab lunch or coffee. I know.

1:03:11
That would be good. I'm in Iowa. She's My heart's in Iowa. I'm actually in Austin, Texas. Susan's on the northeast side. Uh, and if you guys are wondering why I have an accent, people always say that to me. It's because I lived in New York for 20 years. So, it's like I still have that accent. So, I hope you never lose your accent. I love it because in Iowa, we all sound kind of nasly like this. So, nice. Well, I I think we're at the end. You guys have been great. Thank you for your attention today. I hope this has been helpful. Hopefully, Susan and I have been able to add some wind to your financial sale here on July 16, 2025. 

1:03:50
Look forward to August 13th at 4 PM Eastern. Don't miss it. That's the next quarterly podcast that'll be live. Uh and again, you have these great resources. You can mention myself, Mario, or Susan if you want to reach out for individual consults. We have a whole team behind us at Deep Bench of season experts. Susan, any last thoughts? No, I'm good to go. Thank you everyone.

1:04:08
Thank you everybody. Have a great rest of your day.