Ken Moraif  

Hello everyone, and welcome back to Money matters with Ken Moray. And of course, I am your host. And this is the show where we talk about everything and anything in the world of retirement planning. We talk about income taxes, Social Security, estate planning, you name it, we talk about it, and we try to have more fun than a human being should be allowed to have when talking about all this financial stuff. Well, thank you, Paul. That’s very nice of you. And this week’s gonna be no exception. We have a show that is chock full of just incredible stuff. I mean, I’m looking at this and I’m going, Oh my gosh. Are we really gonna Whew? We’re gonna actually give you more than we even should be allowed to give you. So number one, we’re going to answer the burning question, what makes people truly happy in retirement? Okay, so we’re going to answer that question, and then Paul, I’m going to put you on the spot. I want you to start thinking right now. Okay, because I’m going to ask you, of all the groups of retired people, which group of people is the happiest? Okay, do you have to answer it now? And ladies and gentlemen, you can kind of think about it. I’ll tell you the answer will make you laugh. I’m laughing about it right now, but it will also surprise you, so we’ll have that for you also this week. Want to talk with you about 10 things you should know about the greatest financial enemy that we think you have to your financial security when it comes to your retirement. Yeah, and I’m not even gonna tell you what it is, you’re gonna have to stay tuned for that one. But at the same time, we’re gonna It’s kind of like know thine enemy. So if you know your enemy, if you know what it’s about, then you’re far better off trying to protect against that. Also, as we do every week, we’re gonna talk about Social Security, because for most of our clients, it is the single largest source of income that they have when they’re retired, other than their investments and so and Social Security is so complicated. You know, Social Security Administration themselves have said there’s over 9000 combinations of how and when to take Social Security. So if you pick the wrong one, you could be leaving hundreds, if not 10s of 1000s of dollars on the table over your lifetime. And you do not want to do that, not a good idea. So we’re going to talk about this week, why wait until 70 so last time we talked about why take it at 62 now we’re going to talk about why wait until you’re 70 to take Social Security. And there are some reasons to do that, so we’re going to talk about that with you. And then finally, as we do every week, we’re going to talk about how to pass on the fruits of your labor to your greedy, unwashed, undeserving heirs. And that’s also known as estate planning. And this week, we’re going to talk about, and this applies to everybody, rich or poor. You know, we think everybody should have this. And these are your power of attorney documents. Okay, so these are the documents that you should have, in our view, even if you don’t die, and, in fact, especially if you don’t die, because power of attorney is for when you’re alive. So we’re going to talk about three important Power of Attorney documents that we think all of you right now you need to have those. Okay? So we’ll be talking about that. So we have a fantastic show, and I know you’re going to stay tuned for the entire program. You’re not going to miss one juicy drop of this. And I also know that as the host, my appointed task is to talk about all of that. But before we go one step further, I do want to introduce myself. I am Ken Moray. I’m the founder and CEO of retirement planners of America, and we are a firm that specializes in retirement planning. That’s all we do. We work with people who are over 50, who are retired or retiring soon, and if that’s you, that’s what we are all about. We’re here to help you. Okay, so as Tom Cruise said, The only what is it we said, you know, help me to help you. All right, so how do you do that? What I didn’t hear? Play it again. Yeah, show me the money. So if you go to our website, it’s rpoa.com and you can go there, you can you can binge all kinds of stuff, meet with one of our advisors, sign up for a seminar. We got tons of stuff on there just for you. So let’s get started. Let’s talk about the first topic of the day. What makes people truly happy in retirement. Okay, so basically, what makes people there are three things that make people truly happy in retirement. And so, you know, the first thing you might think is that it’s money right, and you’d be right, but there’s a nuance to it, which I’ll get into in a moment. The second thing that you have to have, in our view, to be happy during your retirement is a social life. You can have all the money in the world you want, but if you’re a miser over there living at home by yourself and you know, then you’re not going to be as happy. You won’t live as long, et cetera. So you have to have a healthy social life. You. And then the third thing that you should have is your health, because you can have all the money in the world, the best social life in the world. But if your health is bad, then everything else is out the door. So let’s talk about the money. First, that kind of goes without saying. And you know, one of the things that we believe is happiness when it comes to your money is a positive cash flow. So one of the things that we do with our clients is we build what we call a retirement cash flow plan, an rcfp. Okay, and in the rcfp, we want to look and see, you know, are you going to overspend? How much can you spend? We’re going to take into account taxes, inflation, your cost of living, you know, things that are becoming going maybe you’re selling a house, maybe you’re inheriting money, maybe you’re paying for college, whatever it may be. Want to build all of that into the plan and make sure, to the extent that we can, that you have positive cash flow for the rest of your life. And if you have that, then you know, as I say, if you have more money coming in than going out, you literally can never run out of money. So the set the so that’s how we kind of address the money part. The second thing, then, is your social life. And one of the things that women are way better at than men is the social life part. You know, men tend to make their entire social life work, and so when they retire, they tend not to have a social life anymore. They got to build it from scratch. You ladies, you’re way better at it. You know, you have a social life, you have friends, you’re doing all this stuff. So when you retire, then, you know, it’s almost like nothing happened, right? You just stopped working, but now you got more time for all that social life you built. So ladies tend to be happier in retirement than men at first anyway, but your social well being is super important. People who are socially not happy tend not to live as long and therefore not enjoy their retirement. So it’s important for you guys out there, if you’re thinking about retirement, you need to start thinking about the fact that you need a social life when you retire. And when you do retire, you know all the people that you worked with probably you’re not going to be talking to for very much longer. You know, those relationships kind of, you know, they go by the wayside, and now all of a sudden, you know, you got to find something new. So start making friends if you don’t have them, or, you know, build those relationships. So men, you’re especially bad. Women, you are pretty good at it. And then the third thing, of course, is your health. And you know, all three of these things we look at as investments. It’s an investment, okay, you’re investing your money. You’re investing in a social life. And you should also invest in your health. Your health is super important. The healthier you are. You know, I was talking to a client just the other day, 85 years old. You know, they’ve been clients now for 25 years, since they were 60 when they first retired. And so what they what’s really important to them is their ability to walk and be, you know, a healthy Walker. Because, you know, their plan is to go to Prague, and Prague requires a lot of walking around, and they want to be able to do that. So, you know, he’s staying fit. So investing in your health is super important, because if your health goes south, then you know, it’s hard to enjoy your retirement. So there’s three legs to being truly happy. So let me go back to the financial side. There’s an interesting dynamic beyond, you know, just the cash flow thing, and that is that happiness when it comes to your finances, is how you compare to your peers. It’s a weird human dynamic, but if you have more money than all of your friends, you’re happier than if you have less money than all of your friends. So, so, so my advice to you is, have poor friends. Okay, make sure your friends are poorer than you, and you can, like, be the lead dog in the hunt, if you will. And if you have more money than them, then you know you’ll be happier. So here comes the question, Paul. So tell me which group of retirees are the happiest of all the retirees. Divorced females. Wow, yes, you’re right. Divorced females between the age of 60 and 65 you nailed it. So they’re finally jettisoning those guys. They’re divorced 60 to 65 year old, women are the happiest of all the retirees, according to a study by who made that study, American College of financial services, 16 experts had to do that to figure that one out. So you, ladies, if you want to be the happiest group, get a divorce when you turn 60 and and don’t remarry till you’re 65 and he’ll be very happy. I hope my wife’s not listening to this. Okay, so, yeah, so that’s all, that’s all we have to say about that, as Bubba Gump once said, so it’s time for a jingle, Paul, can you play it? Oh, wait, this is the jingle. So you guys know where to go to find all our good stuff, where our website is. Okay? Can you play it? Go man, I love that jingle, isn’t it catchy? You can’t get out of your mind, and that’ll help you to remember where you need to go for everything you need to help you to do your retirement planning and to get together with us if you want to. In fact, I’ll just say real quickly that if you do visit with one of our retirement planners, we’ll build a plan for you at no charge or obligation, and if you like what you see, that’s great. And if not, that’s fine too. Either way, there’s no charge or obligation, and we will part friends, so take advantage of that. Rpoa.com, all right, let’s talk about 10 things you should know about your greatest financial enemy. Now, you know, when I ask people, What is your greatest financial enemy? Yeah, well, the answer that I normally get is, you know, that I’m going to run out of money, or that I’m going to, you know, inflation is really a big one, and that’s my biggest financial enemy. When I’m retired, I got to make sure that my money keeps up with that. You know, my health maybe as a financial enemy. Those are all true, but they’re not the greatest financial enemy in our opinion. Because you know, your health, presumably, if you take care of yourself, that should not be as big of an issue as it might be if you didn’t the inflation you can we’ve talked about this on other podcasts, but there is a, there is a tool you can use that is the best tool to fight inflation with. So we don’t consider inflation to be a big, bad enemy. And then, of course, you know. So what is it? What is it that we think is the biggest, baddest, worst enemy you have to your financial well being, and that is bear markets. And a bear market is a drop in the stock, in your investments of more than 20% okay, once it, once it crosses that threshold, is called a bear market. And the problem with bear markets is, and if you look at the big bad bears going back 100 years, the Great Depression, the 60s, the 70s, the 80s, the 90s, didn’t have one. But the 2000s had two of them, y, 2k in 2008 we haven’t had one for a really long time, since 2008 so don’t kid yourself this rubber band is getting stretched, and when it snaps, it could be a big one. So don’t kid yourself. Bear markets, in our view, are your single worst enemy. You have to your financial well being. And the reason why is, as a screaming lady you just heard expressed very well, I think, is that, yeah, it should be scary. Because, you know, if the market goes down like in a big, bad bear, the the, you know, for example, in y 2k the market went down 49% this s and p5, 100 index from peak to trough, 49% it lasted about two and a half years, and then 2008 what happened there was from peak to trough, they went down 57% and it lasted one and a half years. So basically, you’ve got to serve your money has to survive if it’s supporting you during your retirement during these a long period while your investments are dropping, and if that happens, you’re doing what farmers call eating your seed corn. So in our view, protecting your retirement from catastrophic losses that are created by bear markets is this. That’s a single worst enemy you have, because they come out of the blue. I always think of these big bad bears. You know, I’m a big fan of boxing, and I can tell you that if my wife has told me many times that if she knew I was a boxing fan, she never would have married me. She thinks it’s like this brutal sport that these people are wailing on each other, and nothing good comes from it. There’s more to it for those of you who follow boxing. But anyway, that’s her opinion. But the thing about boxing is, you know, you can have a fight where these two guys are wailing on each other for 16 rounds. I mean, they are just pounding each other, and nobody gets knocked out. Why? Because they see the punch coming. These guys are slow and, you know, they may be all beat up, but they still, they see the punch coming. They brace for it. What knocks them out is the punch they did not see coming. You know, when they are not ready for it and it hits them that knocks them out. Maybe the most famous punch is Muhammad Ali or Cassius Clay at the time when he knocked out Sonny Liston. You know, many people watch that video and they go, Wait a second. He didn’t even hit him that it came out of the blue. It was so fast, Sonny Listen, went down and he didn’t see it. So it’s that. And the problem with these big, bad bears like Y, 2k in 2008 is you don’t see them coming. They’re a surprise or a shock to the system, and that’s why they’re so bad. And so in our view, having a strategy or a process by which you protect yourself from that we think is super, super important, because without it, if you lost half your money in the next big bad bear, that could be detrimental to your financial well being, would it not am I? Am I alone here on this so let me go over with you a few stats when it comes to big bad bears, just so you know thine enemy. So the first thing is. Is, as I mentioned, they’re over 20% the other thing is that the average, this is, according to Ned Davis research, the average Big Bad bear is a 36% loss. So take whatever money you’ve got right now and take 36% away from it, lose a third, just to make it easy, and ask yourself, what would you have to change if that happened. The other thing is, they’re normal. Okay, since 1928 we’ve had 33 of them. So basically, you know, we have one every three years. And guess what? The last one was 2008 that was, you know, 18 years ago. We’re due the next thing is that they tend to last about two and three, quarter, 299, days. So, you know, about 10 months. But the thing is, that can be very damaging, and we can illustrate that for you, if you want. If you come in, we’ll show you why, even it’s only 10 months, big deal, right? No, it’s a big deal. If you’re retired and living on it, you’re doing what farmers call eating your seed corn. And if you eat enough of that. When growth season comes, guess what’s going to happen? You got no no seeds to plant anymore. It can be very detrimental. Number five, well, I already told you, they average about every 3.6 years. Bear markets have been less frequent lately, as you can tell the but, but, you know, the way I look at it, even though they’ve been less frequent, it’s kind of like flipping a coin, you know, yeah. So you get heads, you know, six times in a row. It doesn’t mean that it’s not going to be a 5050, thing. You’re probably going to end up getting a lot of tails to make the averages work out. Number and I’m going to 10. So this is number eight. We’ve had big, bad bears, where we’ve had no recession. Okay? Y, k was a, not a recession. It was very mild. What made it fall was the technology stocks and that stuff, right? So that’s not a normal thing. It’s not a it’s not always a recession. And then the other thing about it, of course, is number 10, and that is that if you plan for it, in our view, you know, if you have a strategy to address it, if you have a process by which you know you have you can take steps to protect your retirement. We think that even big bad bears are manageable. And so I’ll say number 10 is they’re manageable if you have a process, if you have a plan to address those. And in our practice, because we specialize in retirement planning, our clients are mostly over 50, retired or retiring soon. That’s who we work with. That’s who we want their money to last as long as they do, and that’s what that’s all about. So yeah, that’s nice. Thank you, Paul. So that’s what I all I have to say about your greatest financial enemy, bear markets. Beware. And you know in French, there’s an expression that says, An homme averti en vogue deux. What that means is a man forewarned, or a woman forewarned is worth two. So now you are forewarned. So okay, so we’re going to, in the next segment, we’re going to be talking about, why wait until you’re 70 to take Social Security, but before that, I want to invite you to visit with one of our retirement planners and have them we’ll go over our invest and protect process, and we’ll go over how we plan to protect your retirement from catastrophic losses. And Paul, can you play our jingle for us one more time? Just

right, so let’s dive into the burning question. Okay, so this is a question, ladies and gentlemen, that I bet that you’ve been staying up at night wondering, okay, and I’m all about you getting a good night’s sleep, and so I want to make sure that I answer this question, because it’s just been bothering you so much you probably haven’t slept in like, a month, because you just want to know the answer to this question. And the question is, why don’t I just wait until I’m 70 to take Social Security see that I’m right, aren’t I? You were worried about that. It was something you were worried about now, you know, in our last podcast, we talked about taking Social Security when you’re 62 right, which for most of us is the first time you can take it right 62 but you can wait until you’re 70. So why would you want to do that? Well, there’s several reasons. One is that the if you wait, then for each year that you wait, they increase the amount of the Social Security benefit you’re going to get by 8% okay, now people confuse this because they think that that 8% means it’s like a return on investment that you’re going to you know you’re earning like you invested and you were no it’s that the benefit itself will increase each year by 8% now the thing about here that you need to be aware of is that it maxes out at age 70. There is no reason ever that anybody’s come up with that you should wait beyond the age of 70 to get your Social Security. Okay, so once you turn 70, take it. Don’t wait any longer, because there’s no more increases. Now let’s talk about why else. You’d want to get it well, because it is the maximum your benefit will increase, and it’ll be the maximum amount you could get. Okay. And so the decision about, should I wait till 70 to take it a lot of times is dependent, or actually, we view it as, what is your longevity? You know how long you’re going to live, because if you wait from age 66 to 70, let’s say four years to get your Social Security, you’re giving up that monthly benefit for those four years. So let’s just say that you’re going to get $2,000 a month from Social Security. So if you give that up for four years, you’ve given up 24,000 for four years. So about $100,000 of Social Security benefits that would have come to you, you’ve now given that up. So the question is, now you get to age 70, you’re going to get a higher benefit, but that higher benefit has to refund you the $100,000 that you gave up in the four years that you waited. So how long does it take to get back to even so in most cases, depending on rates of return and all that good stuff. It’s around age 83 Okay, so the question then is, are you going to live long enough for this to be a profitable endeavor? Okay? Because if you, if you die before that, then it’s not going to work out for you. So the important thing to remember is that your life expectancy is going to be a big driver of whether you wait to age 70 or not. Okay, so that’s one thing. The second reason why you may want to wait till you’re 70 is from an estate planning standpoint. Okay, and what do I mean by that? Well, when you die, your spouse has the option of getting their own social security or yours, whichever is the higher. Okay, so if you wait till age 70, and you’re now getting the highest amount, and let’s say that your your your spouse, has a lower amount than you, and you want them to switch over to yours upon your death, then the highest possible amount they’ll get is when you’re 70. So if your health isn’t that great, you know, then you may want to wait till 70, even though I what I said before, was the break even point. But if your health is not that great, and you think you may not live very long, terrible thought, but you know, it’s a fact of life, then what you may want to do is think, from an estate planning standpoint, how can I benefit my wife by getting the maximum benefit, and that way, upon my death, they could switch over to my age 70 benefit and get it for the rest of their lives. So there are several things to think about when it comes to your social security, and those are the two main the three main ones, I guess when it comes to waiting to your 70 years old. Now, as we said last week, you know, for most of our clients, it is the single largest source of income that they have. And you know, Social Security is super complicated. Don’t make these decisions by yourself. Talk to a professional please. If you go on the Social Security website, they’ll even tell you there’s over 9000 combinations of when and how you should take Social Security, which one’s right for you. There’s no way that we train our people on social security so that they can help people make that decision. I wouldn’t rely on it. I wouldn’t make that decision on your own. So I would talk to a professional about it and make sure that you don’t leave money on the table. So that’s our discussion on Social Security for you this week. Again, if you want to visit with one of our advisors, we’ll talk. We’ll build a plan for you. We’ll incorporate when and how to take Social Security into that plan. We’ll build a retirement cash flow plan for you, and we’ll do all of that at no charge or obligation. And if you like what you see and you want to work with us, that’s fantastic. And if not, that’s fine too. Either way, we will part friends, and there’s no charge or obligation. Okay, so Paul, can you play our jingle one more time?

love it. Love it, love it. Okay, we’re into the last segment of the show. I can’t believe it. It’s almost over. I’m so sad. But we’re going to talk about one of my favorite parts of the show, and it’s called our estate Tip of the Week, and this is where we talk about how to pass on to your greedy, unwashed, undeserving heirs, the fruits of your labor. Yes. And of course, in this episode, we’re going to be talking not about that. We’re going to be we’re going to be talking about power of attorney, documents that we think everybody that is watching this, and even people who aren’t should have Okay, and this is your power of attorney documents. And these are very important, because they take care of you. If you can’t take care of yourself, okay? So that’s the whole purpose behind this. And as you get older, that becomes a more and more realistic scenario. Yeah, so let’s talk about what those there are three documents that we think are very important. Number one is what’s called a durable power of attorney. So a durable power of attorney is basically the power of attorney over your finances. Okay, so somebody needs if you’re incapable of making these decisions, somebody has to pay your bills, somebody has to manage your investments, somebody has to, you know, manage your money for you, all those kind of things. Somebody has to be given the power of attorney to do that. No one is allowed to manage your money or do anything for you without that permission. And don’t think your spouse has the right to do that because they don’t without you giving them that permission. Okay? So if you don’t have that document, then potentially what could happen is that your family will have to go to probate court and get that permission, and that’s delay, and it’s all kinds of stuff that you don’t want everybody to go through. So the first document, then is the durable power of attorney. It’s the who you give the right to manage your money for you. The second one is the medical power of attorney. Now, the thing about these power of attorneys is you can make it all the same person, or you can make it three different people, because there’s three different documents here. So you know you can, you can decide that. And so depending on who’s better, you might want to have one child be the money person and one be the health person. So the next one is the medical power of attorney. So the medical power of attorney is where you give somebody the right to make decisions about what procedures you need to have, if you need to have surgery, or if this is an emergency and you had a heart attack or something and you’re incapable, somebody has to make those medical decisions for you. And again, don’t think that people have the right to do this just because they’re married to you, or they’re they’re your kids. They don’t Okay. You have to give them that right. And if they don’t have that right, then they have to go through rigor morals to get to get the right to do it. And so make sure that you also have a medical power of attorney. And then the third one, you know, I guess the easiest way for me to describe it is that it’s the pull the plug document. Okay, so the pull the plug document is also my physician’s directive. And the physician’s directive is basically where it says, you know that three independent physicians say that you know you’re terminal and there’s no point in keeping you going. And you know it hasn’t happened in a while, hasn’t been in the news, but I remember back, you know, over the years, there have been several high profile situations where this wealthy family did not have that pull the plug document, and they had a family member, and you know, you can’t pull the plug on them if you don’t have permission. You know, it’s murder if you do that. And so basically, the hospitals and all that, they’re not going to do it. And so these families were draining all their money out to pay for this their loved one that had no chance of survival. And what that did was it caused them to, you know, they were trying to, they went to court and they were saying, you know, this is, this is fatal. It’s not going to change. We don’t want to spend all this money and throw it out the window for nothing. And the court said, No, you do not have a pull to plug document a physician’s directive, and therefore you got to spend the money so save your family and again, this is up to your religious compass. You know, some religions do not allow for that, but if it’s okay, you know, I think maybe you should consider having that as well. So those are your three documents, power of attorney, documents that we believe just about every one of you that are watching this should have Okay, something for you to think about. Now also, I just want to say again, this is our compliance people. We’re not attorneys. I’m not giving you legal advice. Make sure you talk to your attorney about all of this. They may disagree with everything that I just said, but if they did, I think they’d be wrong. You can’t handle the truth. That’s right. So you know what? I can’t believe it. Paul, is the show over. It’s over. Ken, man, we’ve just gone through so fast. We had more fun than a human being should be allowed to have when wouldn’t have it when doing all this stuff. Oh, amazing. So before we sign off. I want to make sure I remind all of you that if you’d like to go to our website, you have several options there. One of them is you can subscribe to our weekly market alert video where we talk about what’s going on in the market and our thoughts about whether you know the economy is doing well, the stock market, bond market investments, it’s all about that. You can also sign up for our sign up for our seminars. Wow, easy for me to say. And also, you can visit with one of our retirement planners, if you’d like, and they’ll build a plan for you. All of that’s available for you on our website. And in case you forgot where you should go, Paul, can you please? It.

All right, folks, well, that’s our show. I hope you enjoyed it as much as we enjoyed bringing it to you. We’ll see you next week. Same time, same channel, bye, bye, everybody. You.