How to unlock the Ultimate Estate Plan
When you find your critical financial decisions warrant professional counsel and advice.
Speaker 1: From the Clear Channel Studios, a Professional Edge by scene G Todd Tax Attorney CPA and Certified Financial Planner is providing general information related to taxes, investments, and estate planning. This information is not to be perceived as providing individual legal, tax or investment advice as each individual’s circumstances are unique. Being a listener does not create an attorney slash CPA or an investment advisory client relationship. Each individual’s personal situation is different and seeking one-on-one advice, whether a licensed [00:00:30] professional is recommended, securities and fee only investment council is provided through Schwab Institutional Member S I P C. This is Professional Edge, a program designed to help you understand the importance of getting counsel and advice from a licensed professional and help you appreciate the significance of being able to integrate your investments, tax planning, and estate planning into one cohesive plan to prevent an unintended consequence. We will be talking with Scene G Todd of Estate Management Counselor’s, llc.
Speaker 1: Estate Management Counselor’s, LLC [00:01:00] is an independent fee only investment management firm based in Atlanta with a satellite office in Columbus, Georgia that serves select clients throughout the country. Their goal is simple to make sure their clients feel confident and secure about their financial future. Seen is a truly qualified professional. He is a licensed tax attorney, a CPA and certified financial planner. He is also an adjunct income tax professor at the University of Georgia. One unique thing you might not know about scene, he attends the National Rodeo Finals. Each [00:01:30] year we will be talking with scene.
Speaker 2: Good morning, Chris. How are you today?
Speaker 3: Hey, good morning, scene. Doing well. How about yourself?
Speaker 2: I can’t complain. All
Speaker 3: Right. Ready for another great show today?
Speaker 2: I am. I’m glad we’re not in New York or New Jersey.
Speaker 3: Yeah, it’s a mess up
Speaker 2: There. Tremendous. Mm-hmm. <affirmative> amount of damage. Um, casualty losses, just, uh, insurance companies are trying to figure out how much is covered, how much is not covered. Exactly. So, um, you know, hards go out to those people up there, [00:02:00] you know, they’re gonna have a lot of, uh, trials and tribulations mm-hmm. <affirmative> going forward. And, you know, we’re into the colder season.
Speaker 3: That is true. You know, winter just around the corner and getting ready for all that to, uh, pile on top of what just happened, so, right. It’s gonna be gonna be rough.
Speaker 2: So, um, that’s a little bit, uh, of a great segue into, you know, the listeners out there and, you know, it might be a chance for them to actually call their property and casualty agent mm-hmm. <affirmative> [00:02:30] and say, what if a flood happened down here? What’s covered? Right. Because a lot of homeowner’s insurance, if you know Chris, they do not cover flood insurance. Mm-hmm. <affirmative>, you have to have a separate policy for that. And, you know, most homeowners are under the belief that that would be covered, but unfortunately it’s not. Right. So this might be, you know, a candid conversation that you have with your PNC agent and ask them what would actually be covered. Mm-hmm.
Speaker 3: <affirmative> better to check it out
Speaker 2: Just to Sure. Yeah. Be, [00:03:00] be on the front side, be proactive on that. So thanks for tuning in this week and, um, we’re gonna look and see how we can create a safe and secure retirement. And again, stay tuned because we’re gonna have a free giveaway during the show. And as always, Chris, I gotta get on my soapbox and stand here and say, you know, for estate planning, make the challenge. Mm-hmm. <affirmative>, because half of all our listeners do not have any estate plan in place. And [00:03:30] if they do, they may have drafted their will and signed it seven to 10 years ago. And you and I both know things change. They may not even be married to the same person. Exactly. Or they had a couple extra kids, uh, from the time they drafted the first one and signed it. So that needs to be updated.
Speaker 2: And the other thing is, um, people change decision makers also. Mm-hmm. <affirmative>, you know, something might have happened or your best friend who you named in the document moved away, so they’re not available. So [00:04:00] that’s a great opportunity to sit back, pull the document out, or if you don’t have any, then take the steps to implement an estate plan. Right. So, you know, if you don’t know where to begin, that’s why we created the special guide. How to unlock the Ultimate Estate Plan. We send out free to all listeners, they can request that 8 7 7 6 5 4 9 7 9 8. That number again, 8 7 7 6 5 4 9 7 9 8. And we would be glad to hand that, you know, out to you, [00:04:30] uh, take a look at it. That’ll at least get your thoughts started in the right direction. Mm-hmm. <affirmative>, get some in place. Exactly. So that is on my soap box. I’ll step back off of that, Chris <laugh>.
Speaker 2: And, you know, before we get going on this week on how to create a safe and secure retirement last week, if you weren’t able to tune in mm-hmm. <affirmative>, we talked about how to avoid common estate planning pitfalls. And the number one is, you know, no will or no estate plan in place. And if you don’t have anything in place, then [00:05:00] the state has its own plan of distribution. Mm-hmm. <affirmative>, and just real simply, if there’s husband and wife and two kids, there’s nothing in place. The husband passes away. Wife is gonna get half of everything automatically, then whatever’s left is gonna be split between the wife and the children. And if there’s no trust language in place for the kids, then they get it at the age of majority. And that’s 18 in Georgia. Mm-hmm. <affirmative>. So at age 18, [00:05:30] they get a check and they can do whatever they want.
Speaker 2: They’re not required to spend that for college tuition. So that’s sort of a tragedy, um, that a, the surviving spouse is not gonna get everything. Right. That’s number one. And number two, um, the minor children might receive a large lump sum when they least need it. Mm-hmm. <affirmative>, so that’s one thing that we talked about. A common estate plan pitfall. Another one that I see all the time, Chris, is kids on accounts. Uh, mom and dad come into the office [00:06:00] and they will have, you know, their selves as joint tenants, and then they’ll add one of their children mm-hmm. <affirmative>, let’s say their daughter that lives in town with them. And I ask ’em, why do you have your daughter’s name on your account? Did she put any money in the account? And they say no. And I said, okay. Mm-hmm. <affirmative>, why do you have her there?
Speaker 2: And they say, well, in case something happens right then she can have access to that account. And I say, okay, I understand what you’re trying to accomplish, but we can draft a legal document, a [00:06:30] financial power of attorney to have her have access to that account when needed. Mm-hmm. <affirmative>, but let’s not put her on the account because the putting her on that account actually exposes that account to her creditors. Right. So if she causes a car accident, it’s not covered by insurance, then that lawsuit can actually attach that account of mom and dad’s. Hmm. So if you’re out there listening and you have your kid on the account, uh, please don’t do that. There’s other mm-hmm. <affirmative> proper ways [00:07:00] of allowing your child access to that account without jeopardizing the actual account value to the kids’ creditors. Right. So there was that one then we talked about, and then we looked and said, okay, if one of the major bread earners could be husband or wife, uh, passes away unexpectedly, how are we gonna replace that income stream?
Speaker 2: Mm-hmm. <affirmative>, because every two weeks we get a paycheck coming into the household and that’s used to pay the electric bill, the gas bill, um, [00:07:30] all the other expenses that go on each month. So if they pass away, there’s no check coming in. Right. So that’s when we sit down and say, how are we gonna replace that income stream? And we look at it, and the simplest one being is life insurance. Mm-hmm. <affirmative>, are you adequately, adequately protected with the proper amount of life insurance. So we look and make sure that that’s in place. And you know, it’s not the same for each listener out [00:08:00] there because each individual’s monthly expenses are different. So we have to take a look and see how much it actually is, and then go get the proper insurance for that. Mm-hmm. <affirmative> put that in place, then we say, um, a common estate plan pitfall is on the life insurance beneficiaries.
Speaker 2: Mm-hmm. <affirmative>, um, it’s amazing. They will name their spouse first, nothing on the contingent beneficiary. Gotcha. So now it’s gonna be paid to the estate. Well, if it’s paid to the estate mm-hmm. [00:08:30] <affirmative>, then it’s subject to the estate creditors, then they go after it. Huh. Then they go after it. And remember that large medical bill that dad had when he passed away mm-hmm. <affirmative>, he was in the hospital for those 30 days before he passed away mm-hmm. <affirmative>. And they exceeded the policy limits. They’re coming after that aren’t, yeah. They’re coming after life insurance. So that’s why we walk through that and make sure the life insurance beneficiaries are correct, being the primary and the contingent. Then we also take a look at another common pitfall that we see is, [00:09:00] well, dad passed away and dad always promised me his gun collection. Mm-hmm. <affirmative>, he always said that I was gonna get it.
Speaker 2: I’m the oldest boy, I am entitled to it. Well, mom’s still alive. And she says, sorry, everything is to go to me, but dad promised me that. Well, if dad wanted that to be given to you, the oldest son mm-hmm. <affirmative>, then he needs to write it down. Right. So oral promises don’t hold any weight. No out door. So out the door, they don’t [00:09:30] have any legal significance mm-hmm. <affirmative>. Um, then we see another pitfall is proper asset titling. Uh, we will see where, um, dad and son bought that hunting property and they put it together because son put some money in, dad put some money in, and now it’s joint tenants, rider of survivorship because dad wants it to go to his son when he passes away mm-hmm. <affirmative>. And low and behold, they end up constructing a house on that property and mom and dad live there now.
Speaker 2: Well, [00:10:00] son and mom don’t get along too well. So dad passes away that house on that hunting property goes to son. Hmm. It does not go to mom, even though dad’s will said everything to mom. And that’s why we gotta look and make sure that we have proper asset titling on the things when you do a proper estate plan. Right. And then we talk about, um, another estate planning pitfall. It’s the second largest asset. Usually it’s the largest investment asset, and [00:10:30] that is the qualified accounts, the 401ks and the IRAs. Mm-hmm. <affirmative>, we’re seeing this being missed time and time again, Chris, where they named the primary beneficiary as wife or spouse. Okay. And then the contingent beneficiary, they’ll say the estate of account owner mm-hmm. <affirmative>, well, unfortunately, that forces that IRA to be distributed within five years date of death. Oh, okay. So there is no tax planning strategy or tax deferral strategy that we can work [00:11:00] with if that goes into the estate.
Speaker 2: Mm-hmm. <affirmative>. So that’s another thing that we look at. And, you know, if you’re doing your estate plan, that’s a comprehensive plan because we understand the financial instruments, the 401K accounts, the brokerage accounts, real estate titles to make sure that the estate plans coordinated. Right. Um, then we talked a little bit about not working with a qualified attorney. Any attorney licensed can draft a will [00:11:30] mm-hmm. <affirmative>, but, um, I’m a licensed attorney, Chris, but you would not see me representing a medical malpractice claim. Right. I, I, that’s not what I do. Mm-hmm. <affirmative>. So you wanna make sure that the attorney that’s drafting your estate planning document is qualified. This is not the first one that they did this year. Mm-hmm. <affirmative>, it’s not the second one they did in their career. Right. So you want them to be able to show you or tell you that they’ve drafted 10 15 of these this past week alone mm-hmm. <affirmative>. [00:12:00] So that was just some of the major estate planning pitfalls that we see. Um, and they’re coming into play when people are trying to do this themselves and not putting all the puzzle pieces together.
Speaker 3: Right. And that can be tricky to do.
Speaker 2: It is mm-hmm. <affirmative> and it’s not a simple check the list or check the box type of program. So that was just a recap of last week. And then this week we’re gonna stay tuned because we’re gonna create a safe and secure retirement when we come back, Chris.
Speaker 3: All right. Scene sounds good. [00:12:30] If you wanna join us on the show, we’d love to hear from you. Just send the, uh, email. You can email any question to info@emcadvisors.net. You can also give them a call. They can answer any questions that you may have. 8 7 7 6 5 4 9 7 9 8, 8, 7, 7, 6, 5, 4, 9, 7, 9 8. And be sure to check out the website too. Lot of good information there. EMC advisors.com, we’ll have more of the show coming up. Stay with us
Speaker 1: [00:13:00] As a tax attorney CPA for over 15 years. Scene. Todd has implemented over 1000 individual estate plans. He has recently authored an especially helpful guide, how to unlock the Ultimate Estate Plan. This guide has helped many individuals to understand the benefits of an estate plan and how to avoid unintended disasters. Scene has made every attempt to write this in plain English to receive this valuable guide how to unlock the Ultimate Estate Plan, call 1 8 7 7 6 5 4 97 98 [00:13:30] and request your complimentary copy today, or by emailing your request to info emc advisors.net. Do you wanna feel more confident about making the right investment, tax and estate planning decisions today? These decisions are more complex than ever. Have you thought about working with a professional advisor and not sure who to turn to? Not sure what qualifies one to be an advisor. C Todd is more than qualified as a tax attorney CPA and certified financial planner seen is with estate management counselors. Estate management [00:14:00] counselors operates as an independent fee only investment advisory firm. They’re dedicated to gaining a personal understanding of their client’s objectives and implementing professional counsel and advice to achieve those objectives. So take a second to talk with Scene Todd, to learn how you can benefit from their multi-disciplinary practice where they coordinate their clients legal, tax and investment strategies into one comprehensive and integrated plan to enhance and protect their client’s financial security. You can reach a state management counselors and [00:14:30] speak with scene Todd by calling 1 8 7 7 6 5 4 97 98. That’s 1 8 7 7 6 5 4 97 98.
Speaker 3: Welcome back to Professional Edge with scene. Todd, I’m Chris East. Thank you so much for joining us today. The first weekend of November, and it feels like it too.
Speaker 2: <laugh> Halloween was great. Yes,
Speaker 3: It was ate too much candy.
Speaker 2: [00:15:00] Yeah, we had a, still had a
Speaker 3: Lot left though.
Speaker 2: <laugh>. We had a Harry Potter mm-hmm. <affirmative> and we had a, uh, Goldilocks.
Speaker 3: Very nice. Yeah,
Speaker 2: It was a good time.
Speaker 3: I don’t dress up for Halloween anymore.
Speaker 2: Uh, well you
Speaker 3: Shouldn’t. I wear the costume. You’re around <laugh>. It’s, it’s always on. So I never <laugh>, I never do that, but I, I’m getting too old to trick or treat anyway, so I just go to the store and it’s buy the candy and Right. Hey, that’s my Halloween present for myself right there. <laugh>. There we go.
Speaker 2: And buy about three or four
Speaker 3: Bags. No, two [00:15:30] for one special. Yeah.
Speaker 2: All right, let’s jump into creating a safe and secure retirement for our listeners down here in Columbus and Phoenix City. Um, number one thing we gotta do when we start off for working with clients, we have the client put together a budget. Mm-hmm <affirmative>, most of the individuals out there have never really sat down and put a budget together on how much their monthly expenses are. And we have them factor in things such as vacation. If they’re gonna replace their car, [00:16:00] are they gonna remodel their house? Um, when are they gonna have their house paid off? Uh, any consumer debts, you’d be surprised Chris. Uh, some people come in the office and they’ll have 45 or $50,000 of credit card debt. Wow. And they say, well, uh, I wanna retire in a couple years mm-hmm. <affirmative> and I’m, you know, looking at ’em saying, well we gotta get rid of this credit card debt. Exactly. So we gotta come out of your investments somewhere mm-hmm. <affirmative> to pay this off so that way we don’t have this monthly obligation [00:16:30] continuing.
Speaker 3: Right.
Speaker 2: So we have them put together that budget for all the expenses, the cable bill, any yard maintenance that they’re gonna have. Mm-hmm. <affirmative>, any kitchen upgrades, any bathroom upgrades, things such as that. And they’re surprised how much it actually is. Yeah. It’s never less. Mm-hmm. <affirmative>, it is always more when you start detailing it and they’re like, oh yeah, I never thought about that. So once you get the real number, then we know [00:17:00] what we gotta have going forward. Right. And then at that point we say, okay, we’re gonna pay off the mortgage in, you know, three years, four years. So that helps us establish what the retirement date is. Mm-hmm. <affirmative>, because a lot of people out there, they’re 55 and they’re like, you know, I wanna retire at 62. Well what plan do you have in place to get ready to go at 62? Right. And, and people don’t plan for their retirement.
Speaker 2: They just sort of wake up and say, I’m gonna retire at 62, 66, [00:17:30] whether they’re ready or not, which is crazy. Mm-hmm. <affirmative>, I mean, they spend more time thinking and planning their vacation than they do working on their retirement plan each year. Right. So that’s why people get in trouble. So we’re trying to help people not get in trouble. So we outline budget for all their expenses and anticipated expenses and you know, it would be surprising when, you know, they say, well do you wanna help your grandchild with college? Oh yeah. We were planning [00:18:00] on giving $5,000 a year. Mm-hmm. <affirmative> is that in the budget? It never is. You have to count that in too. You got gotta count that in. If you’re gonna make these large gifts. Right. Then it has to be part of that real budget. Mm-hmm. <affirmative>. So we keep them honest is what we’re doing.
Speaker 2: Right. And then once we have that amount of monthly out go sort of firmed up, then we sit back and work with the client and understand all their income sources and you know, for the older workers out there, they would have a defined benefit plan. [00:18:30] Mm-hmm. <affirmative>, which their employer is going to guarantee them a certain amount every month. And then we look and see if the plan has a COLA adjustment, a cost of living adjustment mm-hmm. <affirmative>. So that’s gonna help them out. We factor that in to see if that’s gonna sustain the purchasing power. Right. But if it doesn’t have a cost of living adjustment, then we sort of got a plan for that because we gotta make up that additional spending power from somewhere else. Mm-hmm. <affirmative>, then we sit down and we analyze their social security income, [00:19:00] you know, and a lot of people are, you know, opting to take it when they’re 65 or 66 Now, uh, some have opted to take it at 62, some have taken it at 62, and then there’s a little known advantage which you can actually repay your early social security distributions.
Speaker 2: Mm-hmm. <affirmative> then wait till 66 and now requalify and start and become eligible for a full retirement benefit. Huh. So sort of the uh, restart. Right. [00:19:30] But you gotta come up with all that money to restart the full retirement benefit. Mm-hmm. <affirmative>. So a lot of people might not know about that. And then we look and see what investment income you’re gonna have, uh, that would be from your stocks, bonds, portfolios, um, any limited partnership interests that you own, any rental property that you own, is that gonna be paid off? Do we have to replace the roof on that? And any IUs that people owe you that are [00:20:00] actually gonna be paid mm-hmm. <affirmative>, um, you know, a lot of clients come in and they say, yeah, my daughter owes me $60,000 and she’s gonna repay that to me Right. When <laugh> Yeah. And, and, and 50 years, a hundred years tomorrow would be nice.
Speaker 2: Right. So, you know, you, that’s all we’re doing is making them be honest, is your daughter really gonna pay you back at a thousand dollars a month when she gets outta school or is that just sort of a gift and you might as well not even count it. Right. [00:20:30] So that’s just being honest. And then, you know, a lot of listeners might be out there and they say, you know, I’m not gonna fully retire. I’m gonna stop working full-time, but I’m gonna get a part-time job somewhere. Mm-hmm. <affirmative>, you and I both know the labor market is pretty tight right now. Exactly. And it’s going to remain tight for some time. So I don’t know if we’re relying on a part-time job, income should be part of the income source plan that’s gonna be guaranteed to be there. Mm-hmm. <affirmative>, it could be [00:21:00] extra, but let’s not put it in the plan.
Speaker 2: Then we look at your IRA distributions and most people out there are gonna wait until they’re age 70 and a half to take out IRA distributions, but it might make more financial sense and have more spendable dollars if we tap the IRA before reaching age 70 and a half mm-hmm. <affirmative> and take that money out. Now it’s out of the income tax system because you and I both know that income [00:21:30] tax rates are probably going to go up to pay back some of this debt and sustain some of these eligibility and entitlement programs. Mm-hmm. <affirmative>. So we look at that and run that math also. And if you’re eligible for a pension in that company, what election should you actually make? Because the election might be I want a hundred percent benefit, therefore I’m gonna receive, for example, $2,200 per [00:22:00] month for the remainder of my life, but if I pass away and I’m marrying my spouse doesn’t get anything.
Speaker 2: So that’s a hundred percent benefit. Right. Then there’s a 66 and two thirds and then a one third benefit. So you would get a reduced amount each month. Mm-hmm. <affirmative>, but if you pass away, then your spouse is going to at least get a third of what you got. Right. And then there’s a 50 50 split. Instead of getting $2,200 a month, you would be eligible for $1,300 a month and she [00:22:30] would get $1,300 a month mm-hmm. <affirmative> for the rest of her life once you pass away. Okay. So these are all things which they come in probably a 60 page booklet and the person needs to make that decision. And these are irrevocable decisions, meaning there is no redo. Right. So when they’re making this decision, you have to factor in longevity. What are the other sources of income to be able to understand the gravity of him passing away or her [00:23:00] passing away if it’s her pension mm-hmm. <affirmative> and then what is the survivor gonna have available going forward? Right. People don’t run that math. Chris is a tragic situation when um, yeah, I lost my husband and his pension that was $2,100 a month. Mm-hmm. <affirmative> I don’t have anymore.
Speaker 3: You just gotta figure out what you don’t know what to do
Speaker 2: Well mm-hmm. <affirmative>. Right. So now it’s okay, you know, drop back five yards, maybe even 10 yards in this case. Mm-hmm. <affirmative> and, and come [00:23:30] up with a new plan mm-hmm. <affirmative> because the facts have changed. So that’s where we sit down and say, you know, sir, if you pass away, is your spouse gonna be okay? Yeah. And they say, I don’t know. Well before we make this election on this pension, let’s go ahead and run those numbers mm-hmm. <affirmative> to see which one is gonna allow her to be more. Okay. That’s planning. Yeah.
Speaker 3: And you got to
Speaker 2: Do it. Yeah. And you gotta [00:24:00] do it and not do it. Very cavalier of saying, well I’m gonna get the most money outta the company, but if you die 90 days later, you left a lot of money on the table. Mm-hmm. <affirmative>. So we run those numbers forwards backwards and try and make the best educated guess on which way is gonna benefit the client. Right. And then we say, okay, what is actually gonna be the spendable dollars that you’re gonna have and can you imagine if I have to try [00:24:30] and get $3,000 a month, Chris Okay. Of spendable money mm-hmm. <affirmative> and the only asset that I have is an ira. Mm-hmm. <affirmative>, I have to pull down $4,347 a month. Wow. Just to get $3,000 spendable. That’s why we have to identify what’s an after-tax account. Mm-hmm. What’s a pre-tax account? Because that $3,000, if it’s coming from an after-tax account, it’s only three on the poll. Mm-hmm. So that’s 36,000 mm-hmm. Versus [00:25:00] 4,300 poll. Mm-hmm. <affirmative>, you’re close to $50,000. Wow. Little bit different, right?
Speaker 3: Just a little bit. Yeah.
Speaker 2: <laugh>. So we’re gonna decrease the portfolio by 50,000 versus 36,000. Mm-hmm. <affirmative>, you run those numbers going forward for 10 years, 12 years, 15 years in retirement. Dramatic difference. Mm-hmm. <affirmative>. So that’s why putting these different accounts and putting a plan together to have a safe and secure retirement is a big task. And [00:25:30] a lot of people don’t want to do this task. Right. That’s why we a have done this 300 plus times. We know what we need to look at to help the listeners out there have a safe and secure retirement. Then the other big thing, Chris, that we’re seeing, there’s two big risks for retirees out there. Mm-hmm. <affirmative> and they’re not planning for it. It’s longevity risk because people are living so much longer. Right. I just met with a client, she was 91 years old. [00:26:00] Wow. 30 years in retirement.
Speaker 3: She’s been in retirement as long as I’ve been alive. <laugh>. Right.
Speaker 2: Wow. So 30 years in retirement. Mm-hmm. <affirmative>. So there’s longevity risk. Is the portfolio gonna sustain itself a number two inflation risk. Mm-hmm. <affirmative>. So stay tuned as we continue to try and have a safe and secure retirement. All
Speaker 3: Right. Saying Sounds good. And of course you wanna get in touch with soon. You can call 8 7 7 6 5 4 9 7 9 8 8 7 7 6 5 4 97 98. Be sure to check out [00:26:30] the website too. EMC advisors.com and if you have a question you’d like to email in, you can send that to info EMC advisors.net. More of the show coming up. Stay with us.
Speaker 1: We’ve all thought about it, everyone listening will need one. Not having one can cause untold heartache, family conflict escalating to the point of a lawsuit. One simple thing that avoids [00:27:00] all that an effective estate plan. As a practicing tax attorney seen, Todd with estate management counselors has completed over 1000 estate plans during his 15 years of professional practice. He can help you implement an effective state plan, coordinate your financial accounts, and make sure you have named the proper beneficiaries to maximize your tax savings. Call 8 7 7 6 5 4 97 98 today and let tax attorney sing Todd help you implement an effective estate plan. Call 8 7 7 6 5 4 97 98. [00:27:30] Today with today’s financial markets, are you getting the personal and professional attention you and your money deserve? Clients of estate management counselors benefit from having one set of professionals advise them on their tax estate planning and investment advice. We call that the professional edge scene. Todd is a tax attorney, c p a and certified financial planner. With over 15 years experience, he welcomes the opportunity to assist you in preparing for retirement, implement effective tax planning strategies, [00:28:00] and to help you properly plan your estate. His radio show the Professional Edge is aired weekly on Sundays at 9:00 AM If you are interested in meeting with scene, call his office at (877) 654-9798. That’s 8 7 7 6 5 4 97 98.
Speaker 3: And welcome back to Professional Edge with Scene Tide. I’m Chris East as always, you get in touch with us at 8 7 7 6 5 4 9 7 9 8. [00:28:30] Be sure to check out the website too. There you will find a lot of good information. EMC advisors.com and if you’re a little bit shy about talking on the phone, have a question, you can email that in to info@emcadvisors.net. All the important stuff outta the way. Now,
Speaker 2: Did you know that uh, public speaking creates a moosa anxiety for most people? Really?
Speaker 3: Yeah.
Speaker 2: I got most, more than anything else. <laugh> public speaking. Huh? Pretty crazy.
Speaker 3: We do it all the time here and doesn’t bother [00:29:00] me.
Speaker 2: No. Doesn’t bother
Speaker 3: Me either. Of course, we’re not in front of the crowd.
Speaker 2: True.
Speaker 3: I’ve gotten, I have gotten over that fear, I’m sure over years ago when you walk on stage to introduce an artist or Right. Something like that. The first couple of times. Yeah, I was
Speaker 2: Little butterflies sweaty
Speaker 3: <laugh>. Yeah. I was stuttering and had the bright spotlight shining on me and I’m like, every time I move, the light is following me. I can’t get away from him. <laugh>, but finally get over that. So,
Speaker 2: So just, uh, [00:29:30] something for our listeners out there, public speaking mm-hmm. <affirmative> one of the highest anxieties that brings upon, you know, a bunch of angst Yes. And people. It does. All right. So let’s get back to helping our listeners create a safe and secure retirement, Chris. All right. And we ended, and we were talking about two of the major risks for our listeners out there, that people are not heating. And that is number one, longevity risk because people are living so much longer. And like I said, I [00:30:00] just met with a lady, she’s 91 years old and she’s been in retirement 30 years mm-hmm. <affirmative>, if you can imagine that. So her portfolio has to sustain 30 years for her retirement. Right. And if she runs outta money mm-hmm. <affirmative>, it’s not like she’s gonna go back out and get a part-time job, but being 91 years of age.
Speaker 2: Exactly. So that is one thing that we’re seeing that you have to understand how that risk applies to the retirement plan. Mm-hmm. <affirmative>, then we also look [00:30:30] and see inflation risk. We all know and sense that a, a loaf of bread is not a quarter anymore. Right. Like gallon only gas is not 70 cents anymore. I wish it was <laugh>. Yeah. So that is inflation risk. And when you say I need $2,000 per month in retirement income mm-hmm. <affirmative>, well that $2,000 needs to be 2,500 needs to be 3010 years, 15 years down the road when we have 4% [00:31:00] inflation or 3% inflation. Right. So are you going to have the same purchasing power going forward? And that’s where our financial planning software, Chris, we put those numbers in mm-hmm. <affirmative> and we show the client that your $2,000 you need now is gonna be $3,100 12 years from now.
Speaker 2: Okay. Will the portfolio sustain that withdrawal rate to have the same purchasing power? Right. Kind of a little bit of a look into the future. Yeah. And then we’re seeing, [00:31:30] you know, people, they take their portfolio value and they say, well if I get a 6% return on my portfolio and let’s say it’s a half a million dollar portfolio, multiply it by 6%, that’s $30,000 a year. Mm-hmm. <affirmative>, uh, that’s more than enough. That’s $2,500 a month. Right. Well, you and I both know we don’t get 6% every year. Mm-hmm. <affirmative>, there’s where the mistake happens because we can average 6%. Right. [00:32:00] But you and I both know it goes up violently and it falls violently. Mm-hmm. <affirmative>, we just got done having a 50% correction in oh seven and eight and nine when we came out of it finally. Right. So we run the scenarios and again, this is the power of the computer mm-hmm. <affirmative>,
Speaker 2: It does a thousand scenarios on random rates of return on the portfolio. And then it says, what’s your probability of success [00:32:30] of sustaining $30,000 of withdrawal power over the next 30 years? Hmm. That’s pretty incredible what that program does. Yeah. So now we don’t just assign a 6% rate, we’re looking at the probability of success on all these thousand different variations of returns, random rates of return in that portfolio. Because if we start off, when we go negative, negative, negative, the first three or four years [00:33:00] of retirement mm-hmm. <affirmative>, that dramatically affects the retirement plan. Right. Cuz we have a lot less money to work with. So that’s one thing that we look at. And then we look at the survivorship options to make sure that if one spouse passes away, the surviving spouse is gonna have enough funds and capability to sustain their retirement. Mm-hmm. <affirmative>
Speaker 2: Instead of being forced back into the workforce at let’s say age 70, 70 and a half. So those are some of the things [00:33:30] to create a safe and secure retirement, you have to put the plan in place and analyze your different options because when you make a choice, Chris, that becomes an irrevocable choice, especially on defined benefit plans. Mm-hmm. <affirmative>, but having a plan in place and say, you know, I’m not gonna wait until eight 70 and a half, it makes more sense to start withdrawing this money outta my IRA at 68 because here’s my plan to get there. Right. People don’t have that plan. Mm-hmm. [00:34:00] <affirmative>, but I’m gonna challenge the listeners to get that plan in place. They sort of wing it. Mm-hmm. <affirmative> and I’m sorry, you know, how how successful are things that you wing? Yeah. <laugh> not much, right? Not much. Mm-hmm. <affirmative> even to bake a cake. Do you look at a recipe <laugh>? No. Or you just wing it? I I mean
Speaker 3: There’s, I just try to wing it.
Speaker 2: There’s some flour, some sugar, some baking soda. But
Speaker 3: I can tell you from experience when you, when I try to wing it and cook a cake, you can use it as a wheel. <laugh>, where’s your car? You can get 300,000 miles out of it.
Speaker 2: So let’s not wing it. Okay. [00:34:30] So that’s why it may make sense, you know, to give Tina a call. Mm-hmm. <affirmative>, you know, sit down, put this in writing and she can be reached at 8 7 7 6 5 4 9 7 9 8. Set a time together, we meet one-on-one, we analyze what you have and come back to you and say here’s some of the risks that we see or you know, if you need assistance on making that pension distribution election mm-hmm. <affirmative>, um, we’d be glad to help. Better to have [00:35:00] the advice and counsel, cuz remember we’ve retired 300 plus times through our clients. Right. Most people are only gonna retire once Chris mm-hmm. <affirmative>. So let’s make sure that they retire correctly. Right. Then, uh, to continue on to create a safe and secure retirement, a lot of individuals need a certain amount of monthly income and that’s where it may make sense to position some of your money out of any risky investments [00:35:30] and just put it in a cash account.
Speaker 2: That way we know whatever the market does in the next two, three years, that you’re gonna get X dollars every month and one thing underneath the internal revenue code of section 72, we can actually increase your monthly income and reduce your taxable income. Mm-hmm. So let me say that one more time for listeners. Don’t wreck the car <laugh> is we can increase your monthly income and [00:36:00] actually reduce your taxable income. Okay. So if we reduce your taxable income, that’s the same as increasing your spendable income. Right? So we do that through code section 72 and when we do this Chris, then it actually impacts the amount of social security that is subject to tax mm-hmm <affirmative>. So, but just by putting this plan in place, we can maybe reduce the amount of social security that’s subject to tax. If that’s the case, we’re [00:36:30] reducing your taxable income for reducing your taxable income, we’re increasing your spendable income.
Speaker 2: Right. So we have that way. Another way to have a safe and secure retirement is, you know, get a little bit better rate of return on your money. Mm-hmm <affirmative>, a lot of individual listeners out there have CDs, they came due in October or November, they’re coming up and the renewal rate is about 1.02% on a one year cd. Mm-hmm. <affirmative> [00:37:00] transition that or a portion of that to an investment grade bond currently yielding 7.82%. Um, or we could do a corporate grade bond and that is at 3.9. So we have investment grade 7.8, another one, little bit less risk. Mm-hmm <affirmative> 3.9%. You know, think about that. Chris has 4% versus 1% on a hundred thousand dollars, [00:37:30] it’s 1000 or 4,000.
Speaker 3: Mm-hmm. <affirmative>, I’d rather have the
Speaker 2: 4,000, I’d rather have the 4,000 mm-hmm. <affirmative>. So a little bit different. Um, another one which might make more sense, uh, which is a high yield investment and that’s at 8.06% and year to date, um, it’s approximately 6.8% in value mm-hmm. <affirmative>. So when you look at that and you say, okay, I’m getting [00:38:00] 6.8% on the yield versus 1%, that’s dramatic. Very, that adds some security to your retirement income mm-hmm <affirmative> because if I’m getting retirement income, I’m not having to spend my capital.
Speaker 3: Exactly.
Speaker 2: So that’s another thing that we look at to have a safe and secure retirement is are these investments actually performing the way they should
Speaker 3: And if they’re not, get ’em where they need to be performing.
Speaker 2: Right. Go ahead and make that transition or make that move. [00:38:30] Then we look and we see is there any income replacement that we need take mm-hmm <affirmative> And that is if that spouse elected for only a spousal option on the defined benefit plan and when they pass away that that benefit is gonna go away, then do we need or to create a income pool to replace that. Right. And the easiest way for the listeners out there, it’s an insurance policy. Mm-hmm <affirmative> 800,000, $150,000 [00:39:00] to replace that income stream for the surviving spouse. Hmm. So these are all the things that we’re looking at to create a safe and secure retirement for our listeners out there, Chris.
Speaker 3: Sounds good. And of course if you wanna give the call 8 7 7 6 5 4 9 7 9 8 8 7 7 6 5 4 97 98, be sure to visit the website too. EMC advisors.com and if you have a question you would like to send in via email, they can take care of that for you too. Just send your email question into info@emcadvisors.net [00:39:30] and scene we’ve got a giveaway.
Speaker 2: Absolutely.
Speaker 3: I’ll always like this part of the show. Alrighty, you’re gonna give something away. How about this first five callers got a free book, the Big Retirement Risk if you the first five callers, we’re gonna give you a copy of that book absolutely free. How about that?
Speaker 2: What’s
Speaker 3: That number? It’s 8 7 7 6 5 4 9 7 9 8 8 7 7 6 5 4 97 98. First five callers got the free book, the Big Retirement Risk [00:40:00] Stay with Us. More Professional Ledge coming up
Speaker 1: As a tax attorney C P A for over 15 years scene, Todd has implemented over 1000 individual estate plans. He has recently authored an especially helpful guide, how to Unlock the Ultimate Estate Plan. This guide has helped many individuals to understand the benefits of an estate [00:40:30] plan and how to avoid unintended disasters. Scene has made every attempt to write this in plain English to receive this valuable guide how to unlock the Ultimate Estate Plan. Call 1 8 7 7 6 5 4 97 98 and request your complimentary copy today or by emailing your request to info emc advisors.net. Do you wanna feel more confident about making the right investment, tax and estate planning decisions today? These decisions are more complex than ever. Have you thought about working with a professional [00:41:00] advisor and not sure who to turn to? Not sure what qualifies one to be an advisor. Seeing Todd is more than qualified as a tax attorney.
Speaker 1: CPA and certified financial planner seen is with a state management counselors, a estate management counselors operates as an independent fee only investment advisory firm. They’re dedicated to gaining a personal understanding of their client’s objectives and implementing professional counsel and advice to achieve those objectives. So take a second to talk with Scene Todd, to learn how you can benefit [00:41:30] from their multidisciplinary practice where they coordinate clients legal, tax and investment strategies into one comprehensive and integrated plan to enhance and protect their client’s financial security. You can reach a estate management counselors and speak with scene Todd by calling 1 8 7 7 6 5 4 97 98. That’s 1 8 7 7 6 5 4 97 98.
Speaker 3: [00:42:00] Welcome back to Professional Ledge with scene. Ty, I’m Chris East. Thanks so much for taking out some time to join us today. As always, we wanna get in touch with scene 8 7 7 6 5 4 97 98, 8 7 7 6 5 4 97 98. If you have a question you would like to email that in, just send that to info EMC advisors.net and be sure to check out the website too. A lot of good information right there. The address for that is EMC advisors.com seeing last segment of the show. [00:42:30] So let’s jump right back into it.
Speaker 2: All right, so this week we’re focusing on creating a safe and secure retirement for our listeners out there. And we were talking about income replacement. So if the surviving spouse passes away and their defined benefit plan ends when they pass away mm-hmm. <affirmative>, we run the analysis and say what is it gonna take to replace that income stream? And then it might make sense financially to have a insurance policy replace that [00:43:00] when the surviving spouse is there because when the first spouse passes away, that pension goes away. So if it doesn’t make financial sense or they can’t afford to a engage a life insurance policy or put one in place, at least they know that risk of loss. Right. So they can address that going forward mm-hmm <affirmative>, but knowing a, how much it’s gonna cost to replace it and maybe that first spouse is not insurable, they they’re unhealthy.
Speaker 2: [00:43:30] Mm-hmm. <affirmative>. So at least we run through that scenario to know the what if, if they do pass away. And then the other thing, which a lot of people sort of forget about is if there’s husband and wife and now one of them passes away, then the social security amount of benefit gets adjusted. Mm-hmm. <affirmative>. So that’s less money that’s coming into the household. And again, Chris, that’s sort of the power of, you know, putting this in a financial planning software package and doing some what [00:44:00] if scenarios. What if he dies two years from now? Right. What if she dies two years from now? Mm-hmm. <affirmative>. So we have the ability to terminate our clients at different points in the program. Right. But that gives us a lot of decision points and say, okay, he’s gone at 72 mm-hmm <affirmative>, his pension disappears if we elect his option only. Right. What are you gonna do with your life? Mm-hmm.
Speaker 3: <affirmative> let’s income give you some a good idea of what it, what could
Speaker 2: Happen. What, what could happen. Exactly. So we look through that [00:44:30] and then another thing that we need to look at for a safety and secure retirement is, you know, what account are you gonna withdraw funds from mm-hmm. <affirmative> to fund your monthly needs. Right. Are we gonna withdraw the money from your brokerage account first? Are we gonna withdraw from your IRA account or are we going to utilize the Roth IRA account and withdraw the funds because at the end of the day we have to have X dollars of spendable money. Mm-hmm. <affirmative> part of that is pre-tax money and that’s why I say [00:45:00] an IRA account is an internal revenue account because every time we withdraw that money from there, we have to pay the IRS their share, state of Georgia, their share. Mm-hmm. <affirmative>, Alabama. No, we get away with that mm-hmm <affirmative>. But we have to understand which account we’re actually gonna draw from and how much we’re gonna have to withdraw to have the spendable dollars. So that’s a different calculation on each one of those accounts. And then to have that safe [00:45:30] in secure retirement, a lot of older listeners out here have too much portfolio risk. Mm-hmm <affirmative> meaning they’re all in the stock market or 80 or 90% in the stock market. And one common question I oppose to them, Chris mm-hmm <affirmative> is if your account value doubles because you’re a savvy investor, is that gonna change your life?
Speaker 3: More than likely It would
Speaker 2: Most of the time. Not really. No. Hmm. Because they’re retired, they’re not [00:46:00] gonna buy the new fancy sports car, the new boat, they’re sort of set mm-hmm. <affirmative> in their ways. Will it allow them to count more money? Yeah. Yeah. But I ask the question again and I say, if this account drops in half mm-hmm <affirmative>, would that affect your life?
Speaker 3: Yes.
Speaker 2: The answer is yes. Yeah. So therefore why take all that risk to try and double it in value? Mm-hmm. <affirmative> instead of just being [00:46:30] secure in what you have.
Speaker 3: Right.
Speaker 2: Big difference. Mm-hmm. <affirmative> it, it’s a different mindset and that is shifting that mindset from being an investor to preserving what you have. Mm-hmm. <affirmative>, it’s a different mindset because they’ve always been savers their entire life. Right. Saving, growing, saving, growing. That’s all they’ve learned about and that’s all they’ve invested towards. Now it’s make it work, give me what it earns. [00:47:00] Mm-hmm. <affirmative>. So that’s a different mindset that we look at and you gotta shift that mindset to have that safe and secure retirement. Right. Okay. So that’s another thing we look at. Now for listeners out there that have the IRA and they have other assets available to them, look at this one strategy that we’ve went over with other clients and if their strategy is to only take their rmd, their required minimum distributions at age 70 and a half mm-hmm. <affirmative> [00:47:30] because they have their defined benefit, they have social security and, and they’re gonna leave that IRA to their surviving spouse.
Speaker 2: There’s a lot of listeners out here that’s doing that. Well, they haven’t put this strategy in place, Chris, and here’s what the strategy is. Basically it says that number one, we wanna leave exactly what that IRA is mm-hmm. <affirmative> to the surviving spouse. Okay. But we all know at age 70 and a half we have to take out a required [00:48:00] minimum distribution. Mm-hmm <affirmative>, well if we reposition their IRA and we set the strategy in place, the R M D required minimum distribution is roughly 4% of the account value each year. Okay. That’s where it starts at. Mm-hmm. <affirmative>, when we set this program in place, there is a death benefit which will apply and it will grow the death benefit 4% per year guaranteed. [00:48:30] Okay. So if I’m withdrawing 4% but my death benefit is 4% mm-hmm. <affirmative> and I do this for 10 years, has my death benefit actually grown in value?
Speaker 2: Yes. Yes. Okay. So we have that. Next thing is when we put this program in place mm-hmm <affirmative>, it doesn’t matter what the stock market does because we’re not in the stock market anymore. So there’s no risk of capital being eroded [00:49:00] due to market fluctuations. Okay. So we’re definitely gonna take out our 4% per year and we’re gonna have the benefit, which goes to the surviving spouse grow at 4% guaranteed. Mm-hmm. <affirmative>. Okay. So let me put some numbers to it here real quick. Here’s the 67 years old gentleman, he deposits $159,641. A nice round number. Yeah. Okay? Mm-hmm. <affirmative>. So with that, the death [00:49:30] benefit, the very first year is gonna be 166, do $166,027. Okay? Okay. If there is zero growth, meaning this does not grow at all, it just stays at 1 66. So 27, yeah. Well no on the account value, the 1 59 6 41 never grows. Okay. Okay. We have zero growth. The client is required every year to take out his required minimum distributions. Mm-hmm. <affirmative>, so 17 years [00:50:00] later, he’s age 84 and he is withdrawn a total of 83,000 out of his 159,000. Okay. And now that account value is 75,000. Okay. Okay. The client passes away at age 84. Okay. Most people surviving spouses would receive the remaining account value. Mm-hmm <affirmative> 75 7. 79. Okay. Underneath this program, remember that death benefit [00:50:30] mm-hmm. <affirmative> that’s continuing to grow 4% per year. Mm-hmm. <affirmative>, she would receive $194,880.
Speaker 3: Okay.
Speaker 2: Think about that. All right. He’s taken his RMDs mm-hmm. <affirmative>, he’s already taken 83,000 of his 159,000. Okay. He dies, she inherits an IRA that’s worth 194,000. He only started way back at age 67 with 159,000 [00:51:00] might be something for the listeners out there to consider mm-hmm. <affirmative> because a lot of individuals out there, their idea is to only take their required minimum distributions out of their ira. Right. Here’s a way to take your required minimum distributions, but guarantee that the death benefit going to the surviving spouse. Mm-hmm. <affirmative> increases 4% per year every year. Right. So quick numbers, again, he deposits 1 59, [00:51:30] he withdraws 83, the account values down to 75, he dies. Mm-hmm. <affirmative> surviving spouse gets 194, that’s $119,000 difference. Wow. That’s $120,000 Chris.
Speaker 3: Hmm. That’s a lot of money.
Speaker 2: That’s a lot of money. That’s how we help clients create a safe and secure retirement. Mm-hmm. <affirmative>, because this little step right here is gonna guarantee that the surviving spouse [00:52:00] has an additional $119,000 Hmm. For their life. Mm-hmm. <affirmative>. Now again, it applies to the IRA rules. She has to take out required minimum distributions. Right. But this is with zero growth, worst case scenario.
Speaker 3: Hmm. Now if you get growth, obviously there’s gonna be more
Speaker 2: Gonna be even more. Yeah. Right. So,
Speaker 3: But this is with zero growth. Over the
Speaker 2: Zero growth. Hmm. Quick numbers, again, deposit 1 59 takes out 83 count value 75. [00:52:30] But when he dies, his surviving spouse receives 194. Not bad. That is the professional edge being put in play.
Speaker 3: That is true.
Speaker 2: All
Speaker 3: Right. And if you wanna get in touch with scene and learn how to do something just like that, I think it’s pretty good, give them a call. 8 7 7 6 5 4 9 7 9 8 8 7 7 6 5 4 9 7 9 8. Before we wrap up the show, wanna mention that you do speak at events, don’t you?
Speaker 2: Yes, I do. Mm-hmm. <affirmative>, I speak, um, anywhere from 15 minutes to an hour to 90 [00:53:00] minutes. Chris
Speaker 3: And Tina can help set that up. Yep. Free by calling the number
Speaker 2: Right and is free of charge
Speaker 3: 8 7 7 6 5 4 97 98. Be sure to check out the website to emc advisors.com. And as always, if you have a question, feel free to send that in via email to info emc advisors.net scene. Enjoy the show today. I learned a lot of good information.
Speaker 2: Absolutely. And next week, Chris. Mm-hmm. <affirmative>, tune in to see if you are a statistic. Oh, oh, <laugh>. All
Speaker 1: Right. [00:53:30] We’ll be awaiting that one.
Speaker 2: All right. Have a good week, Chris. You too.
Speaker 1: We’ve all thought about it. Everyone listening will need one. Not having one can cause untold heartache, family conflict escalating to the point of a lawsuit. One simple thing that avoids all that. An effective estate plan. As a practicing tax attorney, seeing Todd with estate management counselors has completed over 1000 estate plans during his 15 years [00:54:00] of professional practice. He can help you implement an effective state plan, coordinate your financial accounts, and make sure you have named the proper beneficiaries to maximize your tax savings. Call 8 7 7 6 5 4 97 98 today and let tax attorney sing Todd help you implement an effective estate plan. Call 8 7 7 6 5 4 97 98. Today. Do you wanna feel more confident about making the right investment, tax and estate planning decisions today? These decisions are more complex than ever. Have you [00:54:30] thought about working with a professional advisor and not sure who to turn to? Not sure what qualifies one to be an advisor scene.
Speaker 1: Todd is more than qualified as a tax attorney, CPA and certified financial planner. Scene is with a state management counselors. Estate management counselors operates as an independent fee only investment advisory firm. They’re dedicated to gaining a personal understanding of their client’s objectives and implementing professional counsel and advice to achieve those objectives. So take a second to talk with scene Todd, [00:55:00] to learn how you can benefit from their multidisciplinary practice where they coordinate their client’s legal, tax, and investment strategies into one comprehensive and integrated plan to enhance and protect their client’s financial security. You can reach a estate management counselors and speak with scene Todd by calling 1 8 7 7 6 5 4 97 98. That’s 1 8 7 7 6 5 4 97 98.
