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 [00:00:30] licensed 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 Counselors, [00:01:00] LLC 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. [00:01:30] Each year we will be talking with scene.
Speaker 2: Good morning, Chris. How are you? Good morning, scene. Doing well. How about yourself? I can’t complain. How was your trip? It was great. First time flying. Where’d you fly to? Las Vegas. Sin City, <laugh> and I I gambled. You did? Yeah. I spent $2. Oh really? And I lost a dollar 99 <laugh>. So that was my, uh, the extent I said if I’m going just a couple of dollars and that was as far as I went, you know, had a good time. Good first time flying [00:02:00] and really enjoyed it. That was, did you make your uh, way out to Hoover Dam? I certainly did. Isn’t that unbelievable? Unbelievable. That’s what America needs. Something gorgeous to, to get our arms around to go and build. Oh, it was awesome. We took the, uh, the tour inside and everything and it was just unbelievable. Really. Had a good time with it.
Speaker 2: Pretty unbelievable that man made that it is. Mm-hmm. <affirmative>. We didn’t really have a lot of time because the other stuff was going on. We had basically three hours right from the time they dropped us off at the tour bus. [00:02:30] And lines were long Right. Trying to get through there. So we made it back to the bus with about five minutes to spare before they left us. Well, that’s, that’s alright. <laugh>. They made it. They were waiting on us. They’re like, hurry up. So it was, it was a lot of fun. First time flying. Had a really good time with that. I was afraid I was gonna be nervous. Okay. And I Was you ready to go again? Oh, definitely. After, after I got in the air. Yep. You know, I have nose to the window looking out. I took more pictures on my poor iPhone than I think I’ve taken. I’ve, I have 267 pictures I’ve taken from [00:03:00] the time I left Atlanta till I got to Vegas and back just on the iPhone.
Speaker 3: That’s pretty neat. It’s pretty
Speaker 2: Good. I killed a battery. <laugh> <laugh>. But yeah, it was, it was great. Had a, uh, really good time this past week out there. Good. So glad to be back home though.
Speaker 3: Well, let’s jump into it, what you got. All right. This week we’re gonna talk about investment strategies for uncertain times. Definitely there is some uncertainty with the upcoming election with the European debt crisis, the Iran controversy. Um, so [00:03:30] we can hopefully help some listeners out this week to give ’em some strategies to increase their investment income. But last week we also talked about, um, some observations that we’re seeing in the practice. But again, Chris gotta initiate and, you know, move people off the dime to get their estate plan in order. Um, again, the numbers basically say 50% of all individuals out there have new estate plan in place. And if you don’t have an estate plan in place, the [00:04:00] state laws will dictate who receives your property and when. Right. Those are probably not the most favorable to our listeners out there. Mm-hmm. <affirmative>. So again, you know, call the office at 1-877-654-NINE 7 9 8.
Speaker 3: That number again, 8 7 7 6 5 4 9 7 9 8 and have Tina send you how to unlock the ultimate estate plan. It’s free, it’s complimentary. That will get you started to getting your estate plan in place. [00:04:30] And a lot of listeners out there may say, well, I, I’m okay, I have a will. But if that will was done five or more years ago, definitely Colleen, get this, how to unlock the ultimate estate plan. Uh, you’d be surprised how many things that are not covered that need to be updated in their estate plan. Right. So definitely take advantage of that. But last week we looked at seven observations that we’re seeing in our practice, Chris, and, you know, these things are just coming up time and time again and they’re [00:05:00] just underlying concepts. And the first one is sustainable income in retirement. You wanna make sure you have sustainable income. And if you are the lucky recipient of a defined benefit plan, meaning the company’s gonna pay you a pension for the remainder of your life and possibly a portion of that for the remainder of your surviving spouse’s lifetime mm-hmm. <affirmative>,
Speaker 3: Then that is a sustainable income source as long as that benefit is fully funded. Right. [00:05:30] So we have some risk that the pension is gonna run outta assets, but hopefully that, uh, the pension guarantee fund will support that in case that happens. So that’s one sustainable income source. Another one would be social security. Um, another one would be investment or interest income. But that is not a sustainable income source at the level which people started retirement with if they retired six years ago. Mm-hmm. <affirmative> because interest rates have fallen dramatically [00:06:00] and therefore they have less investment income coming through. And then we look and see, you know, if you have some rental property or you may have some royalties or some dividends that come in, we look and see what is your sustainable income resource in retirement. So we can plan for that. So we identify those with clients and help them manage those or even enhance those.
Speaker 3: So number two would be portfolio risk that we’re [00:06:30] seeing a lot of older listeners out here in Columbus, Phoenix City, they have too much investment risk. They need to switch from being an investor to being a conservator of their assets. Mm-hmm. <affirmative>, because investing is taking more risk than what you should take, especially being a retiree because you’re at 70 years old, you’re probably not wanting to go back in the workforce if something happens to your investment portfolio. And you know, [00:07:00] some of the concentration on past winners, and we all know that, you know, past performance is no predictor of future results. But, you know, this used to be a great winner. And if you take a look at the hometown favorite Aflac, a lot of our listeners out there have Aflac. And you know, if you look at the five year rate of return, it’s negative.
Speaker 3: It’s negative 1.3%. Mm-hmm. <affirmative>. So, you know, there’s a difference. Um, I like the hometown team. I think Aflac’s a great company, but their stock [00:07:30] performance over the last five years has not been stellar. Right. Do I think they’re gonna come back? Probably. But you gotta be able to disassociate yourself from the emotional tie of I wanna own the hometown company. Exactly. You know, this is about investing and having a rate of return on your investments. Right. So we look at that and then we look at number three, the inflation risk. Um, we all know as a listener out there that things are getting more expensive. Gas, bread, groceries, utilities. [00:08:00] So is your sustainable income going to sustain inflation? Mm-hmm. <affirmative>. So we look at that and that’s where we utilize some software in the firm and we say, if we need $3,000 per month today, what is that going to be 10 years from now at 3% inflation.
Speaker 3: Right. And are we gonna be able to sustain our purchasing power? And that I think is the power of the software that we utilize. Um, it just runs the numbers for us so that way we [00:08:30] can plan accordingly. The number four is longevity risks that we’re seeing. People don’t appreciate that they’re going to live as long as they’re projected to. Mm-hmm. <affirmative>. So they retire at 60, 65. Right now they’re projected to live to be 78, so that’s 13 plus years in retirement. But we just got done talking with a client this week. She is approaching 30 years in retirement that her portfolio Wow. Has supported her in [00:09:00] retirement being her pension, social security income, and her investment income. It’s really good. It it’s really good. But that’s 30 years. So therefore you gotta be sensitive to, you know, you can’t put all your eggs in the safety basket.
Speaker 3: Let’s say CDs that are paying 1%, you will outlive your money. Right. So we look at that and so there’s longevity risk, and then we look at and see where we can assign a risk. And that would be, do you have the proper coverage on your property [00:09:30] and casualty insurance, your homeowner’s insurance, your car insurance? Um, make sure that you’re assigning that risk at the right amount. And no, we don’t do property and casualty. We’ve recommended to the listeners that they definitely review their policies with their current agent. Um, number six is a long-term care risk. A lot of people say, well, I’m not gonna need that, so therefore why do I need that insurance? But you know, the numbers say differently because there’s a one in two chance that you’re [00:10:00] gonna need that care. And if we run an average stay of 36 months, average cost $5,200, we’re looking at about $187,000 commitment in today’s dollars.
Speaker 3: And it’s not that the first spouse can’t afford that care. It’s what happens with the surviving spouse after that first spouse passes away. So we’ve taken $200,000 out of the portfolio, now we have less assets to generate portfolio [00:10:30] income. So therefore the surviving spouse has put underneath a little bit of what we call financial stress. And then we look and see, you know, how tax efficient is the client actually being. Right. And no, you can’t run on April 15th to go to h and r Block or your tax preparer or even your CPA and say, well I need to reduce my taxes or do some tax planning here at the very end. Mm-hmm. <affirmative> and the the cat’s out of the bag. You, you, what you the [00:11:00] listener needs to do is arrange for tax planning now today. Right. It’s October, we need to sit down and see if there’s anything that we need to do in 2012 mm-hmm. <affirmative> before 1231 hits for the tax plan. Exactly. And we look and we say, okay, is there any way to create a tax asset? That’s our verbiage that we use in the practice to create that tax asset to be most tax efficient. And these are just some of the things. So if any of these raise a concern, that’s where you gotta reach out. [00:11:30] Give Tina a call, get on our calendar. Come see us at Columbus at the Cunningham Center. That number 8 7 7 6 5 4 9 7 9 8. Be sure to stay tuned for retirement income planning. All right, sounds
Speaker 2: Good. More of the professional edge coming up. Keep it right here.
Speaker 1: 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 [00:12:00] 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, CPA 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, 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. [00:12:30] That’s 8 7 7 6 5 4 97 98. 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 seen, Todd with a state management counselors has completed over 1000 estate plans during his 15 years of professional practice. He can help you implement an effective state [00:13:00] 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 seen Todd help you implement an effective estate plan. Call 8 7 7 6 5 4 97 98 today.
Speaker 2: [00:13:30] Hey, welcome back to Professional Edge with scene. Todd, I’m Chris East. Hey, thank you so much for taking out some time the Sunday to join us for the show. A lot of good information headed your way. Want you to stay tuned with us. If you wanna get in touch with scene 8 7 7 6 5 4 9 7 9 8, 8 7, 7 6, 5, 4, 9, 7, 9 8. Be sure to check out the website too. There you will find a lot of info at your fingertips. Just a couple of clicks on over to emc advisors.com.
Speaker 3: Here we go. We’re gonna put on the certified financial planner hat. Chris, we’re gonna park the tax [00:14:00] attorney hat and put on our planner hat. You have
Speaker 2: The big suitcase to carry all these hats with you.
Speaker 3: That’s right. <laugh>. I’ll tell
Speaker 2: You, drag it around every time you come in.
Speaker 3: <laugh> remember more letters after my name than in my name. Exactly right. <laugh>, here we go. We’re gonna talk about, uh, investing for retirement income. Here’s some, uh, interesting stats for our listeners out there, Chris, for since August of 2009, the s and p 500 index is up 39.6%. 39.6% [00:14:30] since August of oh nine. Mm-hmm. <affirmative> been on a pretty good tear. Yeah. Even with the uncertainty in the marketplace. Mm-hmm. <affirmative>. But um, surprisingly over that same period in time, investors have taken from the US stock mutual funds, 34.7, no sorry, 347 billion. So the market’s been going up 39.6% and investors have been withdrawing [00:15:00] 34 or 347 billion from the same stock mutual funds. The outflows have been consistent time and time again. Only six of the last 36 months have seen net inflows. Six of the last 36. What’s that telling us Chris? There’s a tremendous amount of uncertainty out in the marketplace.
Speaker 3: Exactly. Even though the market’s been returning positive results, investors are just, what they have said is stock [00:15:30] market fatigue. Mm-hmm. <affirmative>. So they’re just done, they’re cooked. They want less risky investments. Yeah. They see things coming. So people are a repositioning their assets to less risky investments. Here’s another thing, A demographic shift. We’re seeing the first group of baby boomers starting to retire and now retirees are starting to reposition their investments so they can receive retirement income. [00:16:00] Not so much the outright growth that they’re trying to attain. Again, they’re changing from being an investor to being a conservator or of their retirement assets. Mm-hmm <affirmative> then it’s estimated right now that half of the investments in the stock funds sit in 401K or qualified accounts. That’s okay. But we gotta remember that you gotta still manage those assets. They’re not on autopilot. You need to reallocate those as [00:16:30] the environment changes.
Speaker 3: Then when a client shifts those assets out or a listener shifts those assets out out of the stock mutual funds, where do they go? They usually set in cash right now. Well a one year CD we know is 1% 1.01. Mm-hmm. <affirmative>. So that’s not gonna get ’em anywhere. We have a 10 year treasury sitting at 1.72% that says if you give me your money and put it in the treasury, they’re gonna give you 1.72% [00:17:00] annualized rate of return where inflation is running north of 2%, it’s close to 3%. Yeah. So you’re losing 1.3% safely even in a treasury. Hmm. If you leave your money in a savings and checking account, you’re getting 0% rate of return on those dollars. So, okay, let’s increase your retirement income. Here’s strategy number one. Let’s look at municipal bonds. We want to in, you [00:17:30] know, incentivize the listeners out here not to buy just individual issues.
Speaker 3: We want them to buy municipal bond funds. The reason being you have greater diversification. With more diversification, you have less risk. Mm-hmm. <affirmative>, it would be like having a hundred stool legs underneath your stool if one goes bad, that stool’s pretty steady. Right. The easiest way to understand diversification. But if I buy one municipal bond itself, that’s my [00:18:00] one stool leg. So if something happens to that, I may crash down to the floor. Don’t want that. I would rather have a hundred legs underneath my stool, not just one. So that’s diversification in the simplest sense. Here’s one, uh, fund that we look at. The yield on a municipal is 4.54%. That’s tax free. 4.54% in a 25% federal tax bracket. Chris, that’s the equivalent burning 6%, [00:18:30] 6.05%. Mm-hmm. <affirmative>, that’s a 600% increase over just holding cash at a 0% rate of return. Wow. Pretty tremendous. Yeah.
Speaker 3: So, um, does it increase your risk? Yeah, it increases the risk more than what a CD is. CDs guaranteed by the F D I C insurance. But having that guarantee is costing you because you’re basically going backwards very safely. Cuz again, a 1% rate of return, you gotta pay income [00:19:00] taxes on that at 25%. So you’re not really getting 1%. Mm-hmm. <affirmative>, you’re getting 70.75% of a return. So three quarters of 1% where inflation is 3%. So you’re losing two and a quarter percent purchasing power. Mm-hmm. <affirmative> safely. Yeah. Well you can’t do that as a retiree. You should understand that. So that’s where we help, um, our clients understand that risk return, taking this step into municipal bond [00:19:30] fund is not that risky as long as there’s, you know, underlying due diligence on the fund itself, which we do. So we have that. But here’s the other kicker year to date, and this is as of, um, June 30th mm-hmm. <affirmative>
Speaker 3: Of 2012, the fund is up 7.89% and you say, okay, that’s probably good enough. But then if you look up to August 31st, it’s up 10.37%. That’s [00:20:00] incredible. Mm-hmm. <affirmative>. But when you think about it, just based on the exit from the stock equity funds mm-hmm. <affirmative>, that money’s gotta go somewhere. Well, clients are moving towards less risky investments. So therefore if more people are buying these more conservative investments, right? Then that’s gonna bid up the underlying price. If the price goes up mm-hmm. <affirmative>, then we get a greater rate of return. And that’s where that 10.3%, it’s just in the numbers right here, says Yes, there is a greater demand for this fund [00:20:30] just based on the rate of return because the underlying interest payments are not gonna change in those bond funds. Right. Those are set based on the term of the note in that bond. Mm-hmm <affirmative>.
Speaker 3: So the demand, it’s showing true because 7.89 from June and now August 31st, we’re up to 10.37. People are bidding these up. Yeah. So we’re having a greater demand for these. So you say, okay, I want some of my money in municipals. What’s the other strategy that I can do to increase [00:21:00] my retirement income? But we’re not going to Vegas like you did Chris, and bet on red or black on the roulette wheel. My whole $3 <laugh>. Right. So we want to shift and move into preferred. Basically they get a preferred rate of return, they get paid first and they’re also up the liquidation ladder in case something happens to the company. Right. But again, we’re not buying the individual preferred, were buying a fund of preferred mm-hmm. <affirmative>. So [00:21:30] the one that we look at, um, yields 5.8%, that’s taxable. Okay. That’s real close to the 6.0% tax free equivalent.
Speaker 3: Mm-hmm. <affirmative>, um, year to date as of 10 0 5, this fund is up 15.5%. Now, again, all listeners past performance is not indicative of future performance. Exactly. Yeah. But again, this is another safety asset class, which we utilize with [00:22:00] our retirees and our practice at a estate management counselors. And this is one which we, you know, a 5.8% yield on that investment. You know, you put a hundred thousand dollars here, that’s close to $6,000, that’s $500 a month. Mm-hmm. <affirmative>. So that’s one tool that we use, uh, you know, piece in the puzzle for retirement income planning. And you know, you gotta ask yourself, are you holding the right investment in your right account? [00:22:30] Now as a listener, you may be driving down the road heading to the grocery store and you say, I don’t know if I have the right investment in the right account. Mm-hmm. <affirmative>, you know, I know I have some investments.
Speaker 3: And that’s where we ask the clients to bring in their account statements. We look at ’em, we review ’em, and you’d be surprised, Chris, how many people have the wrong investment in the wrong account. Right. They have, um, high dividend paying stocks in brokerage accounts [00:23:00] and they’re not spending that money mm-hmm. <affirmative>. So they’re paying tax on those dividends every year and therefore they’re actual net rate of return has to go down based on the tax in which they’re spending. Right. So we, you know, take a look at that and that’s where, you know, as a certified financial planner, we analyze that and then as a CPA we analyze and say, do you understand the real net rate of return? So we’re actually licensed to give tax advice mm-hmm. <affirmative> and as a listener out there, it’s the [00:23:30] net spendable dollars that you have at the end of the day that really matters. Right. And you know, again, stockbrokers, you know, the little fine print at the end of every statement, we’re not licensed to give tax advice. Mm-hmm. <affirmative>, well part of financial planning is making tax efficient decisions with the portfolio and that’s the professional edge difference that we have at the estate management counselors. Right. And if that makes sense, to bring in your statements, put things together to get a second opinion, give [00:24:00] Tina a call to the office. (877) 654-9798. This is scene Todd, with a professional edge.
Speaker 2: You got it. Stay with us. We’ll have more of the show coming up.
Speaker 1: 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 [00:24:30] to turn to? Not sure what qualifies one to be an advisor. Seeing Todd is more than qualified as a tax attorney. CPA and certified financial planner seen 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, to learn how you can benefit from their multi-disciplinary [00:25:00] 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 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. As a tax attorney CPA for over 15 years scene, Todd has implemented over 1000 individual estate plans. He has recently [00:25:30] 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 and request your complimentary copy today or by emailing your request to info emc advisors.net.
Speaker 2: [00:26:00] Welcome back to Professional Ledge with scene. Todd, I’m Chris East. Thank you so much for taking out a little bit of time today to join us for the show. Lots of good information and as always, if you want to get in touch with scene 8 7 7 6 5 4 9 7 9 8 8 7 7 6 5 4 9 7 9 8, you can always check out the website too, emc advisors.com [00:26:30] and keep this email address handy info and EMC advisors.net because we’ll be going to the email bag, answer a couple of questions coming up a little bit later on during the show and we might have a little surprise for you. All right. Everybody likes free
Speaker 3: Stuff. We
Speaker 2: Do. Yes we do. So I’ll tell you, uh, how you can maybe get something free here in just a little
Speaker 3: Bit. All right. So stay tuned. Sounds good. Scene. All right. So let’s jump back into investment strategies for these uncertain times. Um, here for our women listeners out there, if [00:27:00] you are age 65, a woman can expect to live on average in additional 20 years. And like I said, sort of a recap of last week’s program. We have longevity concerns when we do retirement investment advice in our practice, Chris mm-hmm. <affirmative> and this just sort of solidifies that and it says, you know, again, at age 65, women can expect to live on average in additional 20 years. Um, in addition, many women will live into their nineties. That means that women [00:27:30] should generally plan for a long retirement that will last at least 2230 years. Um, that’s substantial because now we can’t, uh, assume that we’re gonna pass away within 10 years. And this is based on the US Department of Health and Human Services a 2010 study.
Speaker 3: So longevity risk is on the women’s side. Mm-hmm. <affirmative> in their planning because then they gotta say, okay, the man passes away, [00:28:00] what’s gonna happen to their resources? Right. And that’s where we sit down and work with clients and say if he passes away part of his defined benefit pension would go away, we would only now get half of his pension. Or it may totally evaporate what’s gonna happen with the social security benefit, meaning wife doesn’t get hers and his anymore, she may be able to elect to take the decedents amount, which may be higher [00:28:30] than what they have. But then our sustainable income sources are definitely affected. And that’s where, you know, we utilize the software and, and, and terminate clients at different times, Chris. Right. And then we say, okay, you’re only gonna live five years, what’s the scenario gonna look like? And I’m sure
Speaker 2: They like that right?
Speaker 3: <laugh>, <laugh>. But you know, it gives us some real numbers to at least make some educated decisions and plan for that just in case happening. Or we may say, you know what, what’s [00:29:00] gonna happen if you both lived age 95? So will this sustain itself so that we gotta make sure that the assets are going to be diversified enough but yet not safe enough that they’re not gonna earn any rate of return? Because what unfortunately people think is day one of retirement, I gotta have all my money in the bank in CDs and that’s it, I’m done. Mm-hmm. <affirmative>. Well, unfortunately we know 1% CDs aren’t gonna generate enough retirement income to sustain [00:29:30] a 20 or 30 year withdrawal period. So therefore we’re gonna have some in the safety bucket mm-hmm. <affirmative>, we’re gonna have some in a growth bucket and then some more in a more long-term growth bucket.
Speaker 3: Not speculative, because again, these are retirees that need to be conservators of their investment portfolio, not investors. Right. So that’s sort of the theme that we’re trying to get across this week is, you know, as a retiree, you gotta conserve your assets, not [00:30:00] continue to try and get the next Apple, the next, uh, home Depot that comes out the gate, the next Oracle, things like that. Mm-hmm. <affirmative>. So, you know, again, what happens if the husband passes away? What are we gonna do with the home? What are we gonna have to do with healthcare costs? And then, you know, are we gonna have enough interest income and dividends to come in to sustain that if the pension portfolio goes away? Right. Meaning the defined benefit, um, [00:30:30] a lot of people are hearing this 4% number, which says if you withdraw 4% of your assets, uh, you should be able to live in retirement.
Speaker 3: Sort of put it on autopilot. Mm-hmm. <affirmative>. And unfortunately a lot of people start reading readers to digest the Money magazine and the other, you know, Kiplinger and cnbc and they hear this 4% number. So if I have a million dollars, I take 4% of it, I spend $40,000 a year mm-hmm. <affirmative>, I should not, uh, run outta money. Right. Well, unfortunately that [00:31:00] number is coming not true because of the sustainability of the income stream of that million dollar portfolio. Mm-hmm. <affirmative>. So again, uh, autopilot plans are not advisable to our listeners out there. If, um, you want some help on that and you know, there is no magic number that you need to accumulate, you’re seeing, you know, some ads on, what is your number? Right? Well, it’s different for everybody because some people may have a defined benefit pension, [00:31:30] some people have more social security than others.
Speaker 3: It basically depends on what you as a listener are gonna need in retirement. Mm-hmm. <affirmative> and we put together what’s gonna be needed, healthcare, uh, real estate taxes, home costs, automobiles, insurance, things like that. And that’s your number. Then we put that number and compare that against your portfolio and resources of income mm-hmm. <affirmative> and see if there’s a difference. Right. And that again, is [00:32:00] a individualized approach. It’s not a blanket approach. So, you know, definitely take the time, call Tina, schedule an appointment and find out what it’s gonna take for you as a listener to have a successful retirement. And that way we can allocate and help you understand if you’re short, if you’re 50 years old as a listener mm-hmm. <affirmative>, well you still have time, you have 15 years and you can make up a lot of headway Yeah. On that. [00:32:30] But if you wait until you’re 65, 70 years old mm-hmm. <affirmative>
Speaker 3: To try and figure out how much you need to get around and accumulate and save each month. Well, time’s too late. Exactly. So that’s why, you know, make that plan because a lot of people, for some reason spend more time planning their vacation than planning their retirement. Mm-hmm. <affirmative>, which is, uh, amazing to me. Dumb founding, put it that way. Mm-hmm. <affirmative>. So those are some of the things, you know, if a spouse passes away, what’s gonna be the financial [00:33:00] impact. If you are not sure, don’t have a clue. That’s why you gotta give Tina a call to get a second opinion and just see what is going to transpire. That way you got a second set of eyes looking at what you’re trying to do and she can easily schedule a meeting. 8 7 7 6 5 4 9 7 9 8. That number again. 8 7 7 6 5 4 9 7 9 8. And let’s go ahead and turn to some emails that we got in Chris.
Speaker 3: Sounds good. All right. Here’s the first one from Alan [00:33:30] and it says, my CD matures in October. What should I do? The renewal rate is 1.07%. Um, we know that inflation’s running at 2.7%. So Alan, if you wanna lose money slowly mm-hmm. <affirmative> about 1.7%, go ahead and renew that CD <laugh>. So, um, we would definitely recommend to take a look at some municipal bond funds that we talked about a little bit earlier, and those are definitely yielding a lot more than what a CD would. [00:34:00] Are they riskier than a cd? Absolutely. They’re not F D I C insured, but I think, um, you’re okay to step out on that ledge with the right municipal bond fund. Correct. Then uh, Diane writes in and she says, I never heard, or I never hear from my stockbroker, but you keep telling everyone to review their portfolio risk. What do I need to do to do this?
Speaker 3: What do I need to look at? Mm-hmm. <affirmative>, um, Diane, that’s why we offer a second opinion. You bring [00:34:30] in your account statements, we look at it. If your stockbroker’s not calling you call us, reach out on the stock broker. It’s literally <laugh>. Yeah. Um, act with your own initiative. So call Tina, bring your account statements in, we review it, and then based on what you’re trying to accomplish being a fee based advisor, we give you an objective recommendation. Mm-hmm. <affirmative>, if it makes financial sense to you, then you get to decide who you wanna work with, continue working with your stock broker, [00:35:00] or move over and work with a fee-based registered investment advisor. Right. So that way that would be a lot different. Um, not hearing from somebody. That’s ridiculous, especially in this environment because things are changing very quickly. Mm-hmm. <affirmative>, next one comes in from Sally.
Speaker 3: I’m receiving my husband’s social security. I’m worried that I will run outta money before I die. What is the best thing that I can do? Sally, here’s the best thing you can do is again, [00:35:30] come in, put some information in front of us, how much social security you’re getting, what your current investment is, what your current investments are, your budget on what it’s gonna take you to sustain your current living, and therefore we can put that in and apply inflation to that to see how much it’s gonna be, whether it’s sustainable or not. Mm-hmm. <affirmative>. And that way we can get a better gauge on what it’s gonna be 10 years, 15, 20 years out. Right. To make sure that [00:36:00] you’re gonna be okay, because I would rather cut my expenses now a hundred dollars per month mm-hmm. <affirmative> and that way know that I have a level of safety. Yeah. If that’s what it takes.
Speaker 2: Exactly. Yeah.
Speaker 3: And then Shelly writes in, how do I know if I’m being, uh, what is called tax efficient? Well, Shelly, bringing your 10 40 tax return as a cpa, I’ll put that hat on and we can look through and analyze whether we can add any real spendable dollars to your bank account instead of sending those to Washington [00:36:30] to the irs. And that’s what I mean by being tax efficient and that’s having the right investments in the right account. Right. Makes a dramatic difference. And again, listeners out there, if you need a speaker at an event, uh, be sure to give me a call or Tina a call. We can do anything from asset protection to tax efficient, efficient investment, or even a Swiss Army knife for retirement planning. Mm-hmm. <affirmative>, this is scene Todd here at the Professional ed. Stay tuned. We have more to go.
Speaker 2: [00:37:00] Hey, before we do that,
Speaker 3: Yes.
Speaker 2: Got a little gift for
Speaker 3: You. All right. How
Speaker 2: Everybody likes free stuff, including myself. <laugh>, how about this scene? Got a, uh, uh, copy of the book, the Big Retirement Risk.
Speaker 3: Excellent read
Speaker 2: First 15 callers. We’re gonna give you a copy of that book absolutely free. All you have to do is just call Yep. First 15 callers, the big retirement risk, a copy of the book absolutely free just by calling 8 7 7 6 5 4 9 7 9 8 8 7 7 6 5 4 9 7 9 8. [00:37:30] Stay tuned. We’ll have more of the show right after this.
Speaker 1: 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. [00:38:00] We call that the professional edge scene. Todd is a tax attorney, CPA 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, 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. [00:38:30] 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 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 [00:39:00] 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.
Speaker 2: Welcome back to Professional [00:39:30] Edge with scene. Todd. And I’m Chris East. Always give us a call 8 7 7 6 5 4 9 7 9 8 8 7 7 6 5 4 9 7 9 8. You probably think that’s the only line that I say during the show
Speaker 3: <laugh>.
Speaker 2: And the reason why I say that because all the other information I’m leaving to the expert.
Speaker 3: There we go. Seeing Todd, here we go.
Speaker 2: Because I don’t wanna lead you down the wrong road, <laugh>, I’m just gonna give you the phone number, the website, the email address to get in touch with the professional athlete, professional lit.
Speaker 3: I appreciate that, Chris.
Speaker 2: All [00:40:00] right. Sing last segment of the show. Let’s, uh,
Speaker 3: Let’s continue on with, uh, investment strategies during these uncertain times. And here was a quote which um, pretty much says a lot of things problematic reluctance to sell because of loyalty to the company. Hmm, I gotta repeat that one more time. Yeah. Problematic reluctance to sell because of loyalty to the company. Hmm. So where does that apply? Yeah. All right, let’s look at it. All right. If we take and [00:40:30] look at older clients, they come in and we, you know, again, time and time we see too much risk in the portfolio and they have too much invested in the stock market. And they say, well, you know, I’ve owned these stocks for forever, again, problematic reluctance to sell stock. So they say, no, I can’t afford to get out. And we say, well, let’s see what the real numbers say. So we gotta put on our CPA hat and our certified financial planner hat.
Speaker 3: And [00:41:00] let’s say, um, the individual hat invested a hundred thousand dollars and through time it’s grown to $200,000. And we run the numbers, it’s long-term capital gains, current rates are 15% mm-hmm. <affirmative>. So if we sell out everything, we’re gonna pay a 15% long-term capital gain on $100,000. So we’re gonna have a long-term capital gains tax of $15,000 that we gotta send off to the irs. So we’re gonna have a net of $185,000, [00:41:30] which is gonna be out of the market. So now we’re, we are holding cash, but we know as a listener you’re not gonna hold cash for forever because it doesn’t pay any rate of return. But if we compare that and we say the client stays in and they have their $200,000 investment and for some reason the stock market has a correction of 20%, then now their account value is $160,000. So that’s a difference of [00:42:00] $15,000, no, $25,000.
Speaker 3: So we compare, do you want $185,000 out of the market cleaned up, no more tax on it, or do you want to keep your $200,000 investment in the market subject to market risk? And if the market corrects, it goes down to $160,000. So again, clients have too much risk. And again, running the numbers, we can cash that out. That’s a [00:42:30] hundred thousand dollars gain to remove that market risk. Mm-hmm. <affirmative>, that’s part of effective conservation of the portfolio for retirees. And then, um, we look and say that might make a lot of sense because again, the quote that we started off this whole session with is problematic reluctance to sell because of loyalty to a company. Right. So, you know, they, they had a pass winner, it’s accumulated [00:43:00] great, but if you can’t secure those winnings, it doesn’t matter. Mm-hmm. <affirmative>. So let’s cash it out, remove that market risk and do a little things a little bit more conservative going forward. And again, we talked about municipal bond fund, we’re yielding about 6% tax equivalent, it’s about 4.3%. Um, that’s pretty safe and secure as a retiree. You want to conserve your assets, not be an investor in your entire portfolio. [00:43:30] Um, Chris, how, how many books we got left on the call in,
Speaker 2: Let’s see, five.
Speaker 3: We have five.
Speaker 2: Five
Speaker 3: Books. All right. How do we get hurry? How do we get those books? Chris, pick up
Speaker 2: That phone. Dial carefully as I might add. Okay. 8, 7, 7, 6, 5, 4, 9, 7, 9, 8, 8, 7, 7, 6, 5, 4, 9, 7, 9, 8. So start dialing five books left and they’re gonna go fast. Okay. If not, I’ll take ’em
Speaker 3: <laugh>
Speaker 2: And won’t [00:44:00] let you have ’em.
Speaker 3: <laugh>, back to the statement. Problematic reluctance to sell because of loyalty to the company. Yep. Hometown favorite. Let’s look at Aflac. Mm-hmm. <affirmative>. Okay. It’s currently yielding 2.8% pretty good re yield on investments, a hundred thousand dollars portfolio, $2,800 a year. Mm-hmm. <affirmative>, it’s okay. Five year return minus 1.31% five years. Now alternative fund. Mm-hmm. <affirmative>,
Speaker 3: [00:44:30] Which is preferred stock comparing the yield 5.74%. Okay. Five year return, 2.87% positive. So you say, Hmm, that’s not that much difference, but let’s look at the numbers Chris. Mm-hmm <affirmative> for our listeners, what does the difference of 4.17% and again, per year matters because we went from minus 1.31% [00:45:00] to a positive 2.8%. That difference is 4.1% per year cuz it’s an annualized return. So the magic and the numbers the same $200,000 would generate $8,000 per year. Okay. All right. So that’s just not going to be $32,000 or it’s not gonna be $40,000. Mm-hmm. <affirmative>. Okay. Because you gotta remember it is 4.1% [00:45:30] difference per year and that’s a compounded rate of return that you have to look at. So, um, if we’re in Aflac and we have the $200,000 minus 1.31 annualized five years, you’re gonna be at $187,000 roughly in the portfolio. So it’s actually went down in value where the same $200,000 would be at $8,000 per year.
Speaker 3: [00:46:00] Mm-hmm. <affirmative>, but it grows to $245,000. So that difference, Chris is $58,000 over five years. Hmm. $10,000 a year roughly. Mm-hmm. <affirmative> again, not concentrating on the hometown favorite. Exactly. Not emotionally tied as an investment advisor, we’re not tied emotionally to any company. Mm-hmm. <affirmative>, the company’s gotta perform. So if we just look at this, in [00:46:30] this example, $200,000 Aflac investment over five years, you would have $187,000. Mm-hmm <affirmative> difference on alternative $245,325. Hmm. A $58,000 difference. Wow. And again, we go back to that statement of problematic reluctance to sell because of loyalty to the company. Mm-hmm <affirmative>, that becomes costly by owning the hometown favorite. Exactly. [00:47:00] $58,000 over five years. That that’s significant value. Mm-hmm <affirmative>, that’s spendable dollars. So as an independent registered investment advisor, we focus on investment strategies to maximize the client’s portfolio. Right. We make the recommendations to the clients. Clients don’t have to take the recommendations, Chris, but numbers like this.
Speaker 3: Make a client sit back and you’d be shocked, Chris, we show clients these numbers mm-hmm. <affirmative>, [00:47:30] they say, okay, but I’m not selling Aflac <laugh>. <laugh> not telling you, you know that as a listener you gotta sell the Aflac. Right? But these are real numbers that you have to consider mm-hmm <affirmative> what your investment portfolio is actually doing. Right. So you know, the same actually the alternative fund is less risk because it’s a preferred stock fund. It’s multiple companies, not just one company, but again, the hometown favorite people like Aflac, it’s a great company. Just [00:48:00] the historical performance over five years hasn’t been that good. Mm-hmm <affirmative> this last year done pretty well. But historically, five years not done very well. A $58,000 difference in our example. Right. So that’s where we have clients come in, bring their portfolio statements in, let us give an objective review analysis, we provide that to them and then they get to make that decision on what they wanna do going forward.
Speaker 3: Do they want to continue to manage their portfolio independently [00:48:30] or do they want to engage our services on a fee basis? And again, Chris, I gotta renew the challenge to all the listeners out there. If you do not have your estate plan in place, you’ve gotta give Tina a call to request how to unlock the ultimate estate plan. That’s free to our listeners. The number to call Tina is 1-877-654-NINE 7 9 8. That number again 8 7 7 6 5 4 9 7 9 8. And we, you know, [00:49:00] work with individuals down here in the Columbus Phoenix City area. We have our office there in Columbus at the Cunningham Center. Great location. Mm-hmm. <affirmative>, and come in, see me, introduce yourself, bring your stuff, not gonna charge anything for the initial consultation,
Speaker 2: Just wanna help you out and get you on the right path. Right,
Speaker 3: Right. Exactly. And you’d be surprised, Chris, you know, clients bring in like their will mm-hmm. <affirmative> and we review it and you know, that’s my legal hat that I have on. Yeah. And I say, you know what? There’s nothing that you need [00:49:30] to do. Everything’s fine. It’s okay. It’s a second opinion free of charge.
Speaker 2: Sounds good. Get some good information. And then before we wrap it up here, phone number (877) 654-9798. Don’t forget the website too. Emc advisors.com. And if you have a question you want to email in your question, you can do that. Info emc advisors.net. See, enjoyed it today.
Speaker 3: Absolutely. And tune in next week because we are going to go beyond IRA fundamentals.
Speaker 2: All right, sounds good. Have a good [00:50:00] week.
Speaker 3: You too, Chris,
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 a state management counselors has completed over 1000 estate plans during [00:50:30] 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. Today with today’s financial markets, are you getting the personal and professional attention you and your money deserve? Clients [00:51:00] 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, CPA 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, 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 [00:51:30] scene, call his office at (877) 654-9798. That’s 8 7 7 6 5 4 97 98.