Dying Rich?

You know, it always seems like things come in trends. My mom always says things come in pairs of three sets, not pairs, but come in three, but effectively. Kind of seems like when you hear something, it comes repeatedly for a while. And one of the things that seems like we’ve seen quite a bit at the office with our advisors here is folks coming in, and we’ve been having these conversations about spending money, and there’s been a resistance for those folks to want to spend money.

And so we kind of start having these conversations and we learn. Is it bad to die rich? Yeah. That’s a great question, Art. I mean, it’s one that, people are always concerned about running out of money. I mean, that’s one of the number one fears that’s out there in the world today is “I don’t want to run out of money”.

What if I need it? And so that’s where again, I sort of look at this as there’s tools available that can help us sort of navigate through that to best try and predict what your retirement looks like as long as you give us some of the information needed to start building that plan. And so if you can have a plan in place where you know, okay, comfortably, I shouldn’t be running out of money, I’ve got, you know, money set aside.

I think one of the bigger fears that’s out there now for folks is as they get older and everything as well, what about a long term care situation that could, you know, eat up all of my money, you know, instantaneously? And that’s where, again, try and try and look at it from a certain perspective to see, well, what are the averages and what are the, expectations that you might actually have to spend out of pocket in that type of situation?

So again, you can’t you can’t know all the variables, but you can try and figure out as many as possible. Absolutely. And I think that’s having that plan. Right. One of the other common things we hear about is resistance is spending. Some of their money is folks don’t want to pay taxes, you know, very commonly we see folks coming in and near the end of their working career or even after they’ve retired, and the bulk of their assets are in their 401(k)s or IRA pretax accounts.

So every dollar likely they’re going to take is a distribution is going to come in some form of taxable income in conjunction with maybe their pensions or their Social Security or other forms of income they have. So there was a resistance to want to create taxable income to have to pay the IRS and taxes. Right. So again, not going to spend it.

They’re not going to tax it on me. Well there’s some required minimum distribution rules later in life for most people that you’re going to have to start taking it out at some point. But again, kind of to your point, you know, again, that fear of running out there, there’s kind of a fear of paying taxes, I think contributes to some of it as well.

Yeah. One of the things that I think of is this concept of legacy and, and how you may want to leave a legacy, and with that, one of the greatest gifts that you could potentially do is during your lifetime, if you’re able to build a plan that comfortably shows that you shouldn’t be running out of money, well, what about being able to start gifting some of that money during your lifetime so that you can see your family and maybe friends or different charitable organizations benefit from the gifts that you’ve given to them.

And so again, there’s strategic ways you can go about that. A lot of times too, from a tax perspective, ways that it could, it could benefit you and benefit them in the long run. And so you want to take those different ideas into consideration. I know you had a client recently that you’re having sort of this same conversation with.

Right. Absolutely. Yeah. She had called in from the television show a few years ago. We’ve been working together. She’s finally got to that retirement point. And down here in kind of in the Central Michigan area. And, you know, and she’s just struggling, wanting to spend money, single individual and has a very nice Social Security because she worked later into life and delayed Social Security.

And it’s really her needs are met and she’s done a fantastic job saving. But what I’ve learned with her over the years is there’s a mental hurdle from the fact that she’s worked 50 plus years working, saving, putting money in a plan, and now all of a sudden that paycheck has stopped. The savings, per se has stopped. And now we’re in this distribution phase of life.

And there’s a huge mental hurdle. That’s just the fact that we’re going to start spending some of this money now. Again, she’s done a phenomenal job saving. So just the interest alone is growing, right? Even though she’s not making contributions, she’s enjoying seeing that account balance grow. But again, just that mental hurdle of receiving money versus putting money in.