Financial Planning Strategies for All Ages | S.2 Ep. 18

In this episode of “Your Money, Your Wealth”, Joe and Al give you key retirement saving strategies for your 30’s, 40’s, 50’s and 60’s. As you grow older, your financial situation and life needs change. Understand the importance of saving for retirement and the steps you should be taking depending on where you are in life.

1:37 “57% of Workers have less than $25,000 saved for retirement” (Source: Employee Benefit Research Institute)

3:55 “It behooves you to start as early as you can, because that way the compound of money is going to work the best for you”

4:31 “Max out your 401(k) as much as you can or at least to the match”

5:46 “You have to take a look at paying yourself first, keeping those expenses under control, and then if you do get a bonus or if you get a raise, try to save half of that”

6:29 “This is a great opportunity for the younger generation to take control of their finances and start saving”

7:45 “According to U.S. News, when switching jobs there are three ways that you that could avoid paying taxes or early withdrawal penalties from your 401(k). First, you can leave it in your old 401(k), second, you can roll it over to an IRA, or third, you could transfer the balance into the 401(k) at your new employer.”

10:24 “I think the first thing [40-year olds should do] is setting a goal, establishing a saving goal, whatever that may be”

11:08 “Go higher than you think you’ll actually do…I think if you set it high and it’s automatic, especially if you’re saving in your 401(k), it’ll be out of sight out of mind; you’ll end up saving a lot more than you think you actually can”

12:18 “I would say there are three key things: make sure to pay yourself first, make sure to choose the appropriate investments, make sure to monitor your progress and see where you’re at”

15:00 “If you’re 50-years old or you’re 55, here are the steps: you want to start right now (can I cut some spending?), then from there you can save more, manage the assets appropriately”

15:10 “If you do not have a 401(k) plan, try to save into an IRA, or a Roth IRA, after those look into non-qualified investments or stocks or bonds…save, save, save: that’s the key”

18:23 “The younger generations are not taking the appropriate amount of risk in their overall portfolio”

18:38 “One of the things that you absolutely need to figure out is what is the retirement date? It’s not this arbitrary number; you want to make sure you have enough capital to maintain a lifestyle long-term”

18:54 “Believe it or not there’s over 500 ways to collect Social Security if you’re married”

19:16 “For people who can afford to wait, wait on your Social Security, you can wait as long as age 70 when you’ll get the maximum amount possible on Social Security, and that will last the rest of your life and it’s indexed for inflation”

23:31 “If you’re a first-time home buyer, there are special rules within the IRS legislation that allows you to take money out without the penalty”

Aired 5/2/15

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Closed Caption:

Joe Anderson alcohol find her financial
advisors have the answers to your
retirement
this is your money you are well when
should you first start saving for
retirement
it's your first paycheck of course but
who does that no one because retirement
is 200 years from now when you get your
thirties right then you start your
family and then you have a couple of
kids you buy the house then you get your
forties guess what you get a bigger
house a nicer car and then the kids are
off to school then you get your fifties
guess what the kids are back from school
on your payroll again then get your
sixties and guess what you have saved
nothing that is the cycle that is very
very common don't let that happen to you
welcome to the program because what
we're going to talk about today is
strategies that you can implement in
every section of your life if you're 30
if you're 40 if you're 50 and 60 there
are some things that you need to know to
figure it out
my name is joe anderson i'm a certified
financial planner president appear
financial advisors and with the big man
is always big alpine he's sitting right
over there
so when we dive into this you have to
take a look don't be a statistic if you
are 30 start right now if you're 60
start right now
that's what's on my mind today
so let's take a look at some statistics
here here's the problem is that we go
through these cycles of life and
everything happens but saving for
retirement
fifty-seven percent of workers have less
than twenty-five thousand dollars saved
for retirement
twenty-three percent of workers over the
age of 45 have 25,000 more but look at
this fourteen percent are think that
they can afford long-term care costs
this is an issue this is a problem
because it's a lack of planning don't
let this happen to you start right now
let's bring on the big man big yellow
pine to kind of dive in a little bit
deeper
Alan are you 30
yes I'm 40 correct are you 50 yes
so let's take a look at some strategies
and some ideas that people need to take
a look at and the earlier the better of
course but there's a lot of people in
their fifties and sixties that haven't
saved
it's never too late well that's exactly
right Joe and and so this would be a
great show depending upon what age
you're out there's different things that
you're going to want to concentrate on
and I would break it down this way
there's things that you want to do in
your thirties or forties or fifties and
sixties and so let's start with the
thirties this is when you want to make
sure you get started maybe even in the
twenties some you actually do save in
your twenties but a lot of you don't but
by your thirties make sure that you get
started in saving and then you forties
come around and it's all about you know
what we got a little sidetracked here
with the family or new home or whatever
let's get back on track then we want to
get into our fifties and which very
often is our highest earning years
let's make sure that we accelerate our
retirement savings at that point and
then our sixties let's start preparing
for retirement there's a bunch of things
that you want to do there and show when
you think about retirement
it's it's all about knowing what to do
at each stage and if you can just do
some of these things that you're
supposed to do your retirement gonna be
a lot better right yeah these are 72 I
know and it's pretty simple to implement
but it's alright it's simple to say but
very difficult to implement because the
earlier the start out that the better
off you're going to be so if you just
take a look at the compound interest
just accumulation over a long period of
time you can add up a lot of money
yeah when you look at a thirty-year-old
let's say it's going to work tell age 65
and just saves ten thousand dollars a
year over that period of time seven
percent rate of return you end up with
1.4 million dollars now if you start
this same exercise it at 40 at 630,000
if you started 50 it's only $250,000 so
it behooves you to start as early as you
can because that way the compound of
money is going to work the best for you
and Joey it really gets back to the 30
year olds it's that's when it's time you
got to get started and there's just a
few things that you want to do I mean if
you started 30 write the amount of money
that you need to see that significantly
less if you started 50 if you just look
at those dance if you just waited 10
years right a 30 year old only 40 or
they almost have half of the amount of
money accumulated with the same amount
of the same dollar invested on an annual
basis so let's get into some steps that
of thirty-year-old should be taken if
you're watching this program looking at
max out your 401 K as much as you can or
at least to the match if you have a
matching your 401k contribute to that
401k plan to that match that is free
money that's a hundred percent rate of
return then you want to take a look at
contributing to a yra so here's the
steps of saving max out the 401 k then
go to the walk and then look at of
course eliminating high-cost yet because
when you look at student loans or if you
look at credit card debt car loans
things like that that can add up
significantly and then you're just
bogged down right then you're chasing
trying to pay off this debt versus
paying yourself first yeah and and when
it comes to credit card debt in some
cases its low interest rates maybe you
get a balance transfer you know and you
you're paying really nothing and then
all of a sudden you get you notice it
gets up to eleven percent you missed a
payment and you look at that it's
already twenty nine percent and you
never get ahead of it so you want to get
that high interest paid off car loans
are not too bad right now for a lot of
people but still you don't want to be
burdened by all these big payment
student loans or another one you gotta
get this debt paid off and then some
other things that you want to do you
know when you get into your 30-day you
gotta create an emergency fund for sure
yeah you want to make sure that you have
enough cash just in case of emergency an
opportunity comes around you got to keep
expenses under control i know when you
first start getting your paycheck you
want to spend span span but you have to
take a look at paying yourself first
keeping those expenses under
control and then if you don't get a
bonus or if you get a raise
try to save half of that the other half
have fun do whatever you want with the
money but trying to save half of that
raise half of that bonus because if you
start early as the number shelf you get
a five six seven percent rate of return
over the next 30 years you're going to
have a significantly more comfortable
retirement but i understand that a when
i'm 20 and 30 years old
retirement is so far off there's always
tomorrow but if he can just start right
now seeing a couple of extra bucks
because ask your parents ask your
grandparents everyone will tell you this
hey if you want to start saving when
would you first start saving would say
one first paycheck i would have started
saving then most people don't do it this
is a great opportunity for the younger
generation to take control their
finances and start saving now
yeah absolutely and as you say Joe and
in a lot of cases it's like well I can't
really say that much I i'm spending
every penny and the thing is try to
figure out cutting out maybe one thing
or two things and so then you got a
little bit money going to the 401 K so
as you say you want to make sure that
you get up to that employer match
because that means you put a certain
amount in and the employer matches that
so it's it's like free money so you want
to make sure that you do that and yes
you just saw it the compounding money
makes such a big difference and so many
people end up in their forties and
fifties really without saving that much
you
well speaking of forties and fifties
let's dive into down we gotta take a
short break but when we get back we're
going to introduce mr. Michael venir
he's a certified financial planner .
financial advisors he's gonna break some
things down and what you gotta do when
you're in your forties out break things
down when you get your fifties Big Al
and I will tackle you for those of you
that are in your 60 so you don't want to
go anywhere you don't want to miss a
second
she's got your money off we'll be back
in just a second
yeah
yeah
hi I'm Matt polished and certified
financial planner with pure financial
advisors
did you know according to US news when
switching jobs there are three ways that
you can avoid paying taxes or early
withdrawal penalties from your 401 K
first you can leave it in your old 401k
second you can roll it over to an IRA or
third you can transfer the balance into
the 401k at your new employer
hey welcome back to the program shows
called your money or well Joe Anderson
big alkaline hanging out talking finance
things that you should consider when you
are looking at retiring we got Mike near
coming up this segment so don't go
anywhere before we get to him let's go
to the true-false I'm in my thirties so
it's better for me to save for
retirement by putting money into a roth
IRA rather than a 401k since I plan to
be have a higher salary in my forties
and fifties what you think you that's
true and false a while okay because we
just went through the order right is so
if you're looking at saving some money
you can max out all plans is that you
start with the 401k first if they have a
match so go to the 401k first take
advantage of that matched that it's free
money that's a hundred percent
guaranteed rate of return on your dollar
then after the match then that's when
you go to the Roth IRA then if you have
more money after that after you max out
the Roth IRA go back to the 401k if
there is no match and you are in a low
tax bracket then yes very much so it
would be true to take advantage of the
Roth IRA but it it's a little bit more
complex you just have to take a look at
the plans of the rules and everything
else
yeah so that's one of those cases where
it actually is true or false depending
upon the situation so Joe I'm i'm
actually really excited because we're
going to introduce here momentarily one
of our senior financial planners appear
financial advisors Mike paneer with over
10 years experience that in fact i think
about 12 years experience to be exact
but at any rate I want to get into what
the forty-year-old should be doing and
Mike first of all welcome to the show
well thanks a lot thanks for having me
yeah great to have you so let's first
talk about we talked about 30 year olds
and and we know we need to get started
in our thirties but why do so many
thirty-year-olds kind of get off track
well I think it's a few different things
that you guys have touched on a lot of
changes happen you you have a family you
save for a house you buy you no more
expensive car because maybe you're
earning a little more you start raising
kids
anyone who has kids know that you know
children can be and are expensive so a
lot of money is going towards that and
they don't necessarily focus on
retirement
yeah and so yeah so family we want to
have family
wanna give sure one of kids we might
have a nice home so all these things
kind of get in the way of our savings so
we wake up we're in our forties we
haven't saved that much we got to get
back on track so what's the first thing
that forty-year-old should be doing
think the first thing is setting a goal
right establishing the savings goal
whatever it might be maybe it's fifteen
percent of my income twenty percent of
my income depending on where you start
maybe it started a certain point and
then every month or every quarter every
year you plan on increasing at a certain
increment maybe next year I'll save an
additional five percent but you have to
set those goals
otherwise there's going to be no way to
actually achieve the goal right yeah I
think that's well said because a lot of
people at cycle way two minutes
I can't really say that much more but at
least start with something right or even
if it's one or two or three percent of
your pay and then each year as you get
raises bonuses whatever add a little bit
more to where you get up to saving 10 15
even 20 percent and then you're gonna be
in a much better position exactly and
what I like is go higher than you think
you can actually do right because it
takes effort to then change it and
adjust it down i think if you set it
high and it's automatic especially for
saving your 401k will be out of sight
out of mind you'll end up saving a lot
more than you think yeah I mean it's all
about saving money because that's what's
going to help you retire right so okay
so set of saving goal right yeah and
then where should you save
well I think you want to definitely like
Joe and said you know max out or
contribute towards the 401k to at least
get the match you know potentially
continue to contribute to a roth IRA and
then look at saving outside of
retirement accounts
you know those can be pretty
tax-efficient pools of money as well
just saving into a non-retirement
brokerage account might give you a lot
more flexibility and more control over
your taxes in the future so it's just
planning ahead and deciding you know
where how much should i save and you
know where should I be saving it
depending on your individual
circumstance yeah of course part of this
is what tax bracket your hand exactly if
you're younger and you're lower tax
bracket you might want to get more money
into a roth IRA or maybe a rough
provision of a 401k sure because the tax
deductions that is important for you and
that money grows tax exactly especially
if you're in your thirties or forties
you've got a lot of time for tax-free
growth if that makes sense right
ok what else should forty-year-olds be
focusing on i would say there's three
you know other key things you make sure
to pay yourself first you know don't do
what most people do that they focus on
let me get the children through school
all right okay now we've got kids in our
thirties now I'm in my forties maybe
they'll go to school let me get that
wrapped up then I'll start saving for
retirement you really want to focus on
saving for retirement as early as
possible because children can get loans
they can get scholarships but
unfortunately there's no loans or
scholarships for retirement right
the next thing is making sure to choose
the appropriate investments you know
sometimes people are taking two little
risk especially if you're in your
forties you've still got a good amount
of time on your side you need growth
especially when interest rates are as
low as they are right now you need to
take some risk and then monitoring right
making sure to monitor the progress and
see where you're at if you set something
up in the early forties and as you get
to your late forties you need to change
the plan change how much for saving
where you're saving it
so you just need to continue to assess
where you're at yeah no question I think
those are good things and where can
people go for more information yeah if
you want more information or if you want
to sit down with a certified financial
planner with pure financial you can
visit our website at pure financial
dot-com that's pure18 an shal dot-com
and we'd be happy to give anyone a free
assessment see where they're at and help
them achieve their goals
great well that's a great offer it now
let me now switch gears a little bit
jarring and turn it back over to you
because now in your forties you get back
on track what about your fifties what do
we need to be doing our fifties you got
a lot to do in your fifties out I know
and I mean but i'm in my fifties so give
me help me out tell me what to do right
let's get down to business
so let's figure it out here because
here's the problem is that when you look
at people in their fifties a lot of you
haven't saved but then you get this
hopelessness feeling right it's like all
my gosh I'm 1560 don't have anything
saved retirement is going to be forever
from now I'm just gonna I'm just gonna
work forever
here's a recent statistic is that fifty
percent of you are going to get forced
into retirement early even though you
want to work as late as you can
now is the time to start let me walk
some three-alarm if you're 50 or 55
alright so a couple of things that you
want to do first of all you want to cut
spending as much as you can I know it's
hard but you have to try cut your
spending look at maximizing your 401k
plan if you can maximize this plan if
you're 50 or 55 there's a lot of things
that you can continue continue to do
it's easier for me to say then if you
get that match in your 401 k plan
look at this so instead of
tired at 65 you push it out to eat 67 so
let's say I'm 50 i want to contribute to
401 k plan i get a matching that 401k
plan i invest those monies i get a
7-percent hypothetical radar return may
look at this
865 thousand bucks that's a huge sum of
money that you can have a very
comfortable retirement with if you're 50
years older you're 55 here's the steps
you want to start right now you want to
look at ok can I cut some spending then
from there you can save more manage the
assets appropriately now if you do not
have a 401k plan a lot of you don't try
to save into an IRA or a roth IRA if
after you find those look at
non-qualified investments or just mutual
funds stocks or bonds outside of
retirement accounts save save save
that's the key now let's walk it down
there's really four steps that you want
to take a look at here number one
maximize your retirement plans if you
have them there Sookie you get a tax
deduction grows tax deferred then cut
expenses you have to take a look at what
you're spending make sure that you can
cut expenses so you can maximize these
retirement accounts then you want to
look at creating this financial plan
most people do not have any strategy so
if I'm taking a trip from right here San
Diego to New York if i do not have a
roadmap it's gonna take me forever to
get to my destination if you have a role
map if you have a clear concise
financial plan knowing how much money
that you should save when should you
take your social security benefits and
pension how much should you take what is
the tax consequence there's so many
things that you have to take a look at
that's creating this financial plan and
that finally you want to create or
update your estate plan got the bib two
things are certain life taxes and death
when you die what you want to make sure
that all of your stuff all of your
belongings go to where you wanted to go
those are the steps that you want to
take please do this right we gotta take
a break when we get back
for those of you that are in your
sixties I know you've been waiting this
whole show
what are they going to talk about us
we're going to talk about us all right
after the break we're going to talk
about what you should do in your 60 so
don't go anywhere shows called your
money
it's your call
ok
yeah
yeah
welcome back Joe Anderson here alongside
ellen confine your money your wife is
the television show you watching me
we're talking about getting things
together for your overall retirement if
you're 30 40 50 or 60 before we dive
into the 60 year olds let's go to the
true-false question to see how you did
here now if i want to retire at 65 I
said choice should switch to low-risk
investments in my forties so I do not
put my nest they get risk and the answer
to that I'll take a first-year the
answer is no absolutely not you're
probably not gonna retire for 20-25 even
30 years you've got plenty of time to be
a little more aggressive i'm not talking
about being crazy aggressive but make
sure you have different classes of stock
large company stock small-company stocks
international make sure you stay
invested you'll be able to write out
different cycles as you get closer to
retirement then maybe you want to get a
little bit more conservative but maybe
that's only a few years away from
retirement
yeah that's that's probably the easiest
true-false question I think we've ever
had you told us you program you're
probably right now if I'm 20 should i
take more risk bless you
yeah but you know you know what their
the 20 year olds are taking very little
risk because they don't understand the
market right now in that that's that's
very real because what they've
experienced was the great recession and
write the dot-com bust and so they don't
have trust in the overall market so the
younger generation are not taking the
appropriate amount of risk in their
overall portfolio so i just take
everything back so let's talk about
instead of in your twenties or thirties
or forties what should you do if you're
in your sixties
ok so now retirement is knocking on the
door
one of the things that you absolutely
need to figure out here is what is the
retirement date it's not as arbitrary
number it's like I want to retire 6465
you want to make sure that you have
enough capital to maintain a lifestyle
long-term also security cleaning
strategies is a big thing to well it is
and and believe it or not there's over
500 different ways to collect Social
Security if you're married in other
words you can collect in different
months you're one spouse can collect the
other spouse can collect different times
there there's the the spousal benefit
and you want to make sure you understand
how this works because if you screw this
up your it's there's no reduce you kind
of have the same income for life and in
many cases joe i would say this for
people that can't afford to wait wait on
your social security you can wait as
long as age
70 you'll get the maximum amount
possible and social security and that
last the rest of your life and it's
indexed for inflation right there's a
break-even of course because if i take
it at 6266 or 70 right i would receive
more income earlier than if i wait to
leave 70 couple of other things that you
want to make sure that it considers
healthcare costs right health care costs
are on the rise in the making sure that
you're having fun in your overall
retirement because a lot of you approach
retirement you end you end up in
retirement and then it's like now what
make sure that you planted out what
activities that you want to deal what
your social circles are going to be
let's flip it over to you now let's get
to your email questions in cell let's
make sure that we can get these right
out what you got all right I got some
good ones today but i will say first of
all what's your retirement plan Joe ice
fishing is that that is it i'm going to
move back to Minnesota i'm going to sit
on a lake in the middle of winter and
fries that that's what that is about
that ok so let's get to email so here's
here's one of your email questions so
this is from Elizabeth carmel valley so
if I thought if if I file my taxes
separately from my husband can I
contribute to a roth IRA since I make a
hundred ten thousand a year my husband
earns a hundred fifty thousand dollars a
year so we're talking about a roth
contribution so that's fifty five
hundred dollars a year or sixty five
hundred dollars a year if you're 50 and
older
can you make a contribution if you're
married filing separate the answer's no
not with that kind of income in fact
your income has to be below ten thousand
dollars to make a roth contribution so
it's it's very difficult when you're
finally separate to actually be able to
make those contributions
yeah that ten-thousand-dollar threshold
is for filers that file separately so
now you've been a CPA for quite some
time
tell me what does it make sense for
someone to file separately
well it's a good question and I get this
all the time and and typically there's
almost almost no situation where it's
better to file separately in California
because in California where a community
property state which means that half of
my income is my spouse's and half a herd
come is my income so we end up with two
equal returns and the tax rates are
higher so generally doesn't make any
sense unless you come into the marriage
with a lot of separate assets producing
a lot of separate income that would be
about the only time in California but
but Joe why don't we get to the next
email question here because i know we
just have a couple minutes here
this is for market alpine he says I'm in
my forties I'm a good health
do I need disability insurance at this
age or can I wait till I'm older
well that's a good question i think it
depends upon who on your on your income
it depends upon if you're married and
you know what your spouse is making i
would say it this way mark is is if
you--if last year income is going to
make a big difference in your lifestyle
than yeah you probably want disability
insurance because it's for you it's for
your family for your spouse for your
kids and so forth what I mean if you
take a look at it like this L so someone
in their forties right but the biggest
asset that that individual probably owns
is their ability to earn an income so if
I'm 40 years old making fifty thousand
eighty thousand a hundred thousand
dollars per year
you got to take a look at rapid like
that over the next 25 someone years and
so if you get disabled you want to make
sure that you have income coming in the
first place to look is your employer see
if they have a long-term disability
program now also from a taxability
standpoint you want to be those premiums
through your employer so then when you
do receive those premiums those would be
tax-free do if you were ever to become
disabled that benefit would be tax-free
if your employer peas that premium just
know that the benefit that you would
receive would be fully taxable to you
one minute a let's see what we got
ok I think we got one more question from
steve and located
he says I'm in my thirties and the only
money I've saved in my roth IRA is he's
saying since I've already paid taxes on
the money can i use it as a down payment
on my house and Steve the answer is it
depends if it was a roth contribution
you can pull out that principal amount
tax-free no tax no penalty but the
growth itself you actually can't pull
that out until 59 and a half and if you
do pull the growth out then you have to
pay taxes on that plus penalties if it's
a roth contribution it's a little
different rule you gotta wait five years
before your principal the original
conversion would be available for a home
down payment but unless it's a
first-time homebuyer so if you're a
first-time homebuyer their special rules
within the IRS legislation that allows
you to take money out right without the
penalty
alright so you just want to take a look
at if it's a first-time homebuyer you
will be able to take some of those
dollars on your retirement account
understand that you will pay the tax if
it is in your
IRA your waffle rate you will avoid the
10-percent penalty but that's the last
place you want to take his your roth IRA
when you're that age you want to let
that money compound tax-free alright we
gotta get out of here if you have an
individual retirement account ira stick
around next week because there's a lot
of mishaps that will take half of that
IRA if you don't do this correctly i
want to thank Mike with the airport
joining us today big outcall pine
wonderful job my name is joe anderson
have a wonderful wonderful weekend you
just watch another episode of your money
your wild have a great weekend
ready to start building the retirement
always dreamed up he was one of your
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