[00:00:38] Andrew: Welcome, everybody, to a new episode of Your Wealth & Beyond. I am your host, Andrew Rafal, the founder of Bayntree Wealth Advisors. And as many of you know, this podcast have really built from the ground up to help a multitude of you whether you’re a business owner, you’re an entrepreneur or you’re an executive, you’re a young professional climbing up the corporate ladder or you are retired, this show is going to have a little bit of everything. In the past, we’ve brought on and we will continue to bring on business owners and entrepreneurs and learning from them, trials and tribulations, successes and failures but I know a lot of you out there you’re just not business owners but you all, all of us, have a need to build a retirement plan. And so, what we’re going to do in this episode and in the future, we’re going to pivot back and forth.

Today, we’re going to dig in on a very sexy topic, one that I know a lot of you spend ample time dreaming about and that is of course how to maximize your Social Security. I know that was a little tongue-in-cheek there. Hopefully, my sarcasm, my Seinfeld-esque presentation there came off appropriately but here’s the deal. It doesn’t matter if you’re 62 or you’re 52 or you’re 65. Now, those of you that are 30 may not really want to listen and tune in today to Social Security optimization strategies but guess what, you’re probably going to want to let your mom and dad know, your business owner, somebody who can benefit from it because here’s the situation is as a planning firm who manages assets and works with about 350 select families in helping to plan their retirement, one thing was often overlooked is how Social Security can fit in as a piece of the retirement puzzle.

[00:02:44] Andrew: And many times, and we find it more often than not, that individuals spend less time determining when to take their benefit than they do planning a vacation. We also find that a lot of “financial advisors” and I did the quotes, air quotes, just make sure everything’s, yeah, we’re not video here but just making sure you understand what I did there, or CPAs they didn’t go through the pros and cons, the benefits, how Social Security can be utilized within hedging against longevity, against healthcare costs, against inflation, how it works with spousal benefits. Either they didn’t spend the time to learn or they look at it and say, “Well, we’re not getting paid for that so let’s move on.”

So, what we’re going to do today is uncover some of the strategies, some of the myths and some of the questions that I get continuously when working with clients or new potential clients or in our workshops and we’re going to talk high level. Now, as always, if you have questions, please make sure to email questions@bayntree.com. That’s B-A-Y-N-T-R-E-E.com. We’ll be able to get back to you whether you’re a client or not and at least have a candid conversation. So, when you think about Social Security and let’s take a double earning couple. The question I always ask is how much do you think a two-earner couple who’s in their mid-sixties paid into the system, the system I mean Social Security and Medicare? Well, the answer and again this isn’t fact but it’s approximately between $600,000 and $800,000.

[00:04:41] Andrew: Now, I don’t know about you but to me that’s quite a bit of money and by not taking into account how Social Security income fits in with the rest of your assets, your retirement income, understanding the tax code, and how Social Security is ultimately taxed as well as the inflationary factors that are tied into it, I think you’re doing yourself an injustice and inevitably there’s a lot of misinformation out there. So, the key is before you make any decisions, make sure you spend the time, you do your research, you talk to a professional that really knows it because one thing that the Social Security department they are not going to do is give you advice and if you say one wrong word then you could be setting yourself up for the opportunity loss of losing tens if not hundreds of thousands of dollars.

Now, the laws that have changed just took effect really in 2016, the Bipartisan Budget bill they snuck something in in November of 2015 which really surprised a lot of us and inevitably cost us to go back to a lot of clients that we were working with and had to revise some of the planning. And what they took away and we’re not going to get in too much on it, but they took away what’s called the file and suspend, and they took away what is called the restricted spousal application. Now, the file and suspend is gone. You had to have done that by the timeframe and this was a few years ago so let’s not even get into that. The restricted spousal application, those of you that were 62 or older at the end of 2015 you’re going to be grandfathered in.

[00:06:38] Andrew: So, this is an important component which allows you to utilize some of the provisions. We call them the creative strategies that were there. I guess the government came in and said, “Hey, these are loopholes.” Whatever way you look at it, it was the law and it still is the law for many of you. Now, it is so much more in-depth than just Excel Spreading Sheet things out but inevitably the spousal benefit is there for some of you. We’ll dig in a little bit later on today on that. So, I get the question a lot too and you may be thinking, and this is where somebody who hits their first year that they can start taking benefit at 62 and they say, “You know what, it’s time. I’m going to start getting my benefits because it’s not going to be there as I get older.” Now, the one thing as an advisor, we can’t guarantee anything. We don’t know what the future looks like and you do hear the stories and the studies that at a certain point between 20, 30, and 34 that inevitability the Social Security trust fund is going to start not having enough in there and start having to dig in.

Now, that is factual right now but think about it. What can we do to continue making sure that Social Security is funded? Well, there’s a couple of things that we look at. One is extending the full retirement age. So, this is a very important item, the full retirement age, FRA is when you can get your full benefit and there are many reasons this is important. For some of you it’s 66, for some of you it’s 66 and 4 months, some of you it’s 67, and there are other dates in between there but one of the things that we foresee is that the government continues to extend that so those of us that are younger and my daughter who is 12, now yes, I don’t know if Social Security will be there in the same format but I do believe the full retirement age will continue at some point to expand which means that potentially those of us in our 40s may have to wait until 71 to start collecting our full retirement.

[00:08:44] Andrew: Also, the amount of money that we pay into the system has continually increased but remember there’s a certain limit on it in regard to when your taxes that you pay be, well, an employer pays at 12.4% and you’re paying half of that so extending that and potentially making it where all of your adjusted income whatever it is that you earned, you will be paying into Social Security similar to Medicare so that’s another caveat that we could see. Additionally, they could change the way that it’s taxed when the money comes out. So, for many of us we kind of moan, “Hey, I got to pay taxes on Social Security?” and the answer to that is maybe. Social Security with taxes on the way it comes out is really based on a formula and this is where when you’re working towards building an income plan you really have to understand how that works.

But nonetheless, they could change the way that taxes are paid on Social Security when you take it out. So, there are many different avenues in what we can look at and ensuring that that money is going to be there. The other thing we think about is those that are receiving Social Security usually are in the highest quadrant of voters. So, when you think of the constituents and Congress and so forth, keeping those that actually vote happy, well, that’s one thing that they can’t just pull the rug out of Social Security. So, again, we can’t guarantee anything, but we know that they’re going to continue to monitor it and probably make some changes to it to assure that there will be some left. Now, the other reason we know that Social Security is an important asset and when I ask questions in our workshops and I say, “Who here has a pension or will have a pension?” And it is normally on average 20% to maybe 30% will raise their hands.

[00:10:42] Andrew: Now, if I would’ve done that same study in the 80s, it would’ve been more in line with 80% to 90% but since the late 70s when the law changed, and defined contribution plans became more prominent meaning 401(k) plans, what employers looked at and says, “Well, instead of us having to take all the risk and pay out these pensions, we can now put the risk on our own employees.” So, what we’ve subsequently seen since the early 80s is the pension plans going by the wayside. And if you look at some of the older companies that have been around, they’re the ones that are having in some cases some of the biggest issues. Look at for instance Sears and JCPenney, these top companies have been around, and they were the behemoths of their day back in the 50s, 60s, 70s.

Well, now as they’re trying to compete with companies like Amazon and other newer companies that don’t have pension plans on the books, it’s almost a losing battle that they can never come out from. It’s like think of the boat that has leaks in it and we’re trying to get that water out of there but then more leaks spurred up and it just causes these companies the inability to be able to evolve. And so, what we’ve seen a lot of, those that are fortunate to have a pension, we’re seeing a lot of these companies come in and say, “Hey, we’re going to give you a lump sum option and you should take it.” Now they don’t necessarily say, “Take it,” but here’s the thing. As a planner, if you get a lump sum option and you can take that, enroll it to an IRA, is it always the best option? Well, as an advisory firm, if we’re getting paid by managing those dollars, one would say, “Well, yeah, it’s always the best option.”

[00:12:38] Andrew: But from our standpoint and advisory firms that are doing their clients justice, we always look at it and say, “Let us take a step back and look at many factors.” We need to look at of course your age, your health, the spousal situation, how old are the kids, and what other assets you do have because in many situations it becomes a very, very negative approach to take that money out and now you try to create that same type of income. So, there are many things that we look at there but if you do have a pension, if you’re fortunate to have it, fantastic. That also allows you to build in Social Security strategies understanding when that pension will come. Again, if you do have a pension and it’s just a payout option, you want to really run the numbers to see what are the options available. Was it a single life? If you’re married, do they give you a joint life? Do they give you a guarantee for a certain period of time? Or do they give you 10, 15 different choices?

In many cases, we have clients that come in and it’s usually 5 to 15 different choices which can make your head spin so that’s part of where we can’t just blanket on and say, “Hey, make that choice,” choice number C there without understanding the whole picture. So, when you’re working with an advisory firm, hopefully, you guys are digging in and it’s not just on the investment side and really understand how this fits in with the rest of your retirement assets. The reason we’re getting into this is because that’s also going to affect how Social Security works. For those of you and the majority of you who don’t have pensions, it’s why we have to look at Social Security as an even more important asset because you can think about it. Close your eyes and think of an asset that will have an increase in your overall payout of 8% per year all the way up to age 70. When you turn it on, there’s the potential of a cost of living adjustment. Historically, that’s been over 2.5%.

[00:14:40] Andrew: Now, over the last 12 years or so, really since the great recession, we’ve seen a very minute if not any increase to social starting to see that now and if you think about the 80s, those of you that remember the stagflation, late 70s, early 80s, remember you had a mortgage at 15%. Remember, you could get CDs at 14%. You could lock in a 10-year treasury at some ridiculous number but the other core component there of Social Security had these big increases some as high as 13%. Now, did that mean that that was real money in your pocket? Not really because if everything was worth so much more expensive with inflation, it just kept you up nominally, but the key is think about that hedge against the eventual inflation.

So, again, thinking of these assets and then lastly imagining the same connotation that you’ve got an asset when you pull the money out it’s not taxed as your 401(k), your IRA which 100% of that is taxable. Social Security up to the maximum amount is 85% of your benefit is taxable but just like your taxes, there’s marginal and then there’s the effective tax rate. So, it’s not all or nothing. So, understanding how Social Security and taxes work it’s very important there because there are and there is the ability sometimes when we’re working with clients to look at what their income need is, what assets that they do have, and if we understand how Social Security is taxed, there are many times where we can pull out money from the retirement, from non-retirement, and then have a Social Security benefit and effectively have their effective tax rate under 5% and potentially have 0% of their Social Security taxable.

[00:16:36] Andrew: Now, again, we’re not giving you tax advice. It’s just understanding that using software, working with the CPAs and really making sure you understand where to pull money from. The key component is if you don’t understand that and let’s say you needed $25,000 for repair on you want to do a remodel or you buy a new car, there was a health issue and if you had a couple of different buckets of money and you pulled it from the wrong bucket, all of a sudden that money comes in, its taxable, and then that makes your Social Security jump up and be taxable, whereas if you had other monies that was more tax efficient, what if we pull it from there or a combination to provide you that same income but then less money to Uncle Sam? Ultimately, when we look at tax strategies, minimization strategies, if we can be proficient there, that can ultimately save your portfolio or start each year a couple of percentage points ahead of the game.

And that’s why advisors that really understand this and work with you to teach you and understand how to use your pre-tax dollars, what to do in retirement, those are the type of advisors you want to work with. I spent a few times each year with Ed Slott and his Elite IRA Advisory Group and this is three days out of my life that those of you who came to these types of workshops would probably fall asleep. But we look at it as advisors and these are investment advisors and CPAs and fiduciaries. This is the type of learning where we come together and we learn how to maximize our clients’ retirement dollars, understanding the tax code, understanding some of the provisions and the changes and the strategies that can be there to help you along the way. These are the important components that you would and should look for in your advisor, those that are continually educating themselves.

[00:18:40] Andrew: The majority of clients of ours that are not business owners have 70% to 80% of their money in pretax and that goes back to the fact of this 401(k) and being diligent and putting money away and it’s fantastic that you did that and a lot of you will look at in your mid-60s and say all of a sudden, “I got a million-and-a-half in pretax money. How did I get there?” And it was all about being efficient, putting money away, being diligent, maybe getting an employer match, not making emotional decisions when the market change and those of you that maybe only averaged to 80,000, 90,000 a year, you can walk away with seven figures in your 401(k). We’ve seen it time and time again but now here comes the problem is that you hit retirement and now all of a sudden, you’ve got all this pretax money.

You may be fortunate to have a pension. You’re going to have most likely Social Security and now it becomes a ticking tax time bomb especially once you hit 70 ½. That’s the magic number when the government requires that you start taking out monies from your pre-tax whether it’s a 401(k), an IRA, a simple IRA, a 403(b), a TSP, a 457, this is where now all of a sudden you got to start pointing out the first year is just under 4%, about 3.65%, but then every year you got to start pulling out a little bit more and, yes, it is a good problem. It’s a very good problem to have if somebody’s saying, “I don’t need this money. What do I do with it?” But what if you were being proactive and in your 60s especially with where we are in the Tax Cuts and Job Act where we’ve got probably, again no guarantees, but probably the lowest tax we’ll see in our lifetime.

[00:20:33] Andrew: Now, again, I can’t guarantee that but these next seven years or so what we call the Golden Age of being able to potentially position pretax money and move it to Roth IRA account or using those monies to live and taking it out and maybe only paying an effective tax rate of 12% on it. So, there’s this arbitrage potential and that’s again looking at your income, where you are in your lifecycle, and is there a way to convert some of that to a Roth, pay a little bit of taxes now so there’s going to be paying. In most cases, we can’t do a conversion without any taxes but in some cases we can and doing that systematically over the course of several years all of a sudden you hit 70 ½ and you’ve now repositioned 50%, 60%, 70% of your pretax money to a Roth IRA and as most of you out there know, the beauty of the Roth is that not only does it grow tax-deferred and when the money comes out, it’s tax-free and it goes to your heirs tax-free but there is no required minimum distribution.

So, what you’ve done there is you’ve taken control of your tax destiny and that’s something that we can’t control what the government will do. We can’t control what taxes will be but if we can take control of our own destiny by understanding the laws today, wouldn’t that make sense to at least review and look at? And these are the type of strategies with financial planning software and understanding both assumptions and looking at where we are in tax brackets and with standard reductions or itemizations and so on and so forth, you can make some really good choices and there’s never going to be a clear-cut best answer. Same thing when we revert back to Social Security and I know I’ve gone off a little tangent here but ultimately in any decision we look at, when to take Social Security, when to delay, what to do with IRAs, when to retire, there’s no perfect answer. There are many factors involved and that’s there’s an emotional standpoint of retirement. There’s what’s my purpose in retirement.

[00:22:42] Andrew: My latest book, The Heartful Retirement, that I co-wrote with Melissa Hart really digs into the emotional side of retiring along with the financial side so imagine marrying those together and focusing on a pregame in a sense of what retirement will look like. And in today’s world, retirement is so much different than our parents’ generation 20, 30 years ago where you retired, you maybe lived to 77, and then you were done. Now, we’re living and we have to think about the fact that a couple, one of them there’s an over 50% chance that one of them will live past 95. So, that’s where understanding how Social Security can be a hedge against inflation and understanding how it fits into that framework is so valuable. Again, there are things that a lot of us, you know, breakeven point.

What’s my breakeven point? By delaying, because obviously if you wait to collect your benefit you’re going to have no money coming in. So, would you be better off collecting a benefit and then investing it? Potentially. The real big issue comes in too if somebody files early and early mean 62 all the way up to their full retirement age and that full retirement age for those that were born in ‘43 to ‘54 at 66, 1955 at 66 in two months and it goes up each year by two months and then ultimately those after ’60, that were born 1960 and later was 67. So, that is important because here’s a couple of factors that you may have heard of. If you file early, first and foremost, you get a reduced amount for the rest of your life. Overall, that amount would reflect about the first year at 62 about a 25% reduction and when you look at that and you produce those numbers over the course of time, you can see that that can lead you missing out on tens of thousands of dollars.

[00:24:44] Andrew: The other factor is if you are working, if you’re earning income, and one of the factors there is earned income, not if you’re pulling money out of investments or you have passive income but anything over 17,000 you will have one out of every two of your benefit dollars deducted meaning you won’t receive it. So, in this example, if somebody who’s 62 that’s making $30,000 and they turned their benefit on early, and let’s say their benefit’s going to pay them $14,500, they’re going to get about $6,500 reduced from that benefit meaning they won’t collect anything until they hit that $6,500 number and then they’ll start collecting benefits. Those that are making 50,000, 60,000, 70,000 in most cases they will not earn anything. So, not only have they reduced their amount forever, they’re not going to collect.

Now, what happens at full retirement age is they do throw that back in there, but they don’t give you a lump sum check but your benefit would go up. So, it’s a big no-no if you’re working not to understand that rule. If you are not working, of course, that’s something we have to look at and say, “Okay. If you don’t have income coming in, you don’t have a pension, you don’t have other assets, well, then we kind of have to look at taking that benefit early.” In the year you turn full retirement age which is again 66 to 67, you can earn as much as 45,000 that year. Anything over that, one out of every three of your benefit dollars will be deducted so a lot more of leeway in that year that you turn full retirement and then after full retirement age, you can earn as much as you want and there’s no reduction to that payment. So, again, thinking in terms of turning it on early, at 62 it’s a 25% reduction and then as we get to full retirement age and then beyond, remember that you get an 8% increase every year.

[00:26:39] Andrew: So, ultimately, when you look at 62 to 70, we’re talking about huge, huge numbers. Now, it’s a balancing act. It doesn’t mean it’s right for everybody. We have to look at health. We have to look at assets. We have to look at longevity. All of those things take into account. It’s not just as easy as showing a breakeven point of seven years and saying turn that on. Now, inevitably, when we were looking at some of the creative strategies, those of you that will still qualify a real quick overview of how the restricted spousal benefit works. When somebody turns full retirement age so just let’s use a Joe and Jane Doe both just turned 66 and Joe wants to grow his benefit to age 70. That would allow him to get the maximum amount, the 8% increase which would be there for both of them and then what’s very important is if somebody, if a husband or wife or an ex-spouse passes away, the survivor gets to collect the greater of the two.

So, what’s happening here is by understanding how Social Security works for both the short-term and long-term, what you’re able to do there is construct the game plan to protect both parties. Now, back to the spousal benefit, what happens is if Jane, in this case, starts collecting her benefit and let’s say her full retirement benefits was $2,000 a month, Joe can file the restricted spousal application. Why? Because he’s still grandfathered in. He’s not claiming his own benefit. He’s getting half of hers. So, all of a sudden, Joe gets to continue delaying his benefit to age 70, getting an 8% increase and he gets free money along the way. In this case, this simple example, he’d be collecting $1,000 a month with no effect on his overall benefit.

[00:28:35] Andrew: So, you think about free money and why so many people who really don’t truly learn and understand this and give up thousands and thousands of dollars, it’s something that you got to take ownership of but you got to understand how it works and if you do have questions on how it fits into your plan, we have a fantastic software that we utilize as part of our financial planning where we can plug in your numbers in real-time. We can look at dozens of different options. If that is something that you would be interested in, just email us at questions@bayntree.com and we’ll be able to then walk you through what that process looks like. Okay. So, we’ve talked through on spousal benefits and going back to the example with Joe, all now he’s getting free money, free money, free money and at 70 now they turn on his benefit. It happens automatically. He can’t delay any longer. Why? Because he’s reached that magic age of 70 and all of a sudden now his benefit which would’ve been maybe $2,400 a month starting at 66 is now $3,300.

So, there’s clearly a breakeven point of money he missed along the way but in this example with the free spousal benefit, its many cases six, seven years at breakeven point and then remember the cost-of-living adjustment will be on that higher number. Also, if he passes away his wife Jane will get that higher amount. So, now what we’ve done is we’ve really utilized a strategy to help them protect against longevity and what if they didn’t have a pension? Well, now this can act as that pension. So many factors involved. Do they have assets? Do they have other income? What are their expenses? It’s not just cut and dry and says, “Everybody should do what Joe and Jane did,” but it’s worthwhile to understand all of these different specs. There’s so much into it and if you can spend a year studying it, we’re continually learning about it, those that work in Social Security are learning about it.

[00:30:38] Andrew: One thing that we’ve seen with the changes to the law is you have to go in equipped with exactly what you want to have happened, word for word. If not, they may take it and give you the wrong benefit and we’ve actually had cases where we had to go with the client or the client calls us on their phone. We’ve got to talk to a manager over there indicating that this client does qualify for the restricted spousal application or if it was dealing with an ex-spouse and do they qualify for some of their benefits. So, there are so many factors involved. Those of you that were married for at least 10 years, you can potentially file on your divorced spouse’s record even if he or she is remarried. Also, if he or she passes away, you might be able to qualify for a higher benefit. So, many things when we look at ex-spouse, survivor benefits, filing early, filing late, do you have young children? In that case, it may make sense to file earlier because then they qualify for a benefit.

These factors so many of them we could spend a whole three-hour podcast going through them but I think, number one, you’ll probably fall asleep on me. I may fall asleep on the whole deal. So, what we want to just talk about today is high level that there is no perfect solution but treat Social Security as an important asset, one that has tax efficiencies, cost-of-living adjustments, the ability to hedge against inflation, the ability to protect a spouse, and also if we end up delaying Social Security, that may allow you to do some tax strategies like converting IRAs into Roth. Again, don’t do any of this until you talk to a licensed advisor or CPA. We’re not giving you the advice to do it. We’re saying why not look at it and have an asset now that becomes a tax-deferred asset that’s tax-free when you pull it out?

[00:32:41] Andrew: You can also pass to your family as an inherited Roth account which means they can continue delaying it for their lifetime. The only caveat is they have to start pulling out the required minimum distribution. They don’t have to pay taxes on it, but they still have to pull it out, so the Roth is a great instrument. A lot of our plans will take more risk in the Roth because it’s money that they’re going to let grow and compound and take advantage of that tax deferral and the ability that you don’t have to touch it and then it’s tax-free later. Also, if you haven’t looked at your true benefits, here’s the other things we recommend, those who remembers and I’m asking I know nobody’s going to answer because I’m talking in a sense to myself but who remembers getting the benefit statement, the white and green page that showed what your full retirement would be now, what would be at 66, what would it be at 70? It also broke down what you paid into the system.

Well, they stopped mailing those out to the majority of Americans around 2011. That saved the government tens of millions of dollars. So, in most cases now and some of like 65 they’ll get it mailed to them but the majority of us we do not get it mailed to us so here’s what you need to do. You need to go to the SocialSecurity.gov website and you need to create a user ID and account and once you have a user ID and they’re going to ask you some questions to make sure it’s you but then you can find your most updated benefit statement and you better log in anytime and review it year after year. So, not only is that important to fully understand what your benefit this but the other, it’s an audit. What we always want to look at it is you want to look at how much and when you look at that third page, it’s going to show you how much you paid into Social Security and Medicare, basically, your income since you started working.

[00:34:37] Andrew: And why this is important is because your Social Security benefit is based off of the top 35 working years and it’s an average. So, overall, the working years and a lot of us make more in our later years than we did in our earlier years but you also beyond that you want to make sure that if you paid into the system that those numbers are right, so we can’t just take it as fact that those numbers are always going to be right. There are many examples of clients where we look at that together with them and they say, “Hey, I made more in 2001 or I made more in ’97,” and so then what you have to do is show the proof of course that you did that. That becomes somewhat of a challenge if you don’t have ample proof of that. That’s why you want to keep track or at least keep electronic copies of your couple first pages of your tax return but overall, you can always go back to the employer that you worked at. They should have a record of your W-2, your 1099, and it’s important that you keep track of those things.

So, one thing today, go to SocialSecurity.gov, create your user ID and your password, create your account, make sure that you check that out. That’s the number that we need if we’re going to help you look at some of your choices, your Social Security choices, or if you have questions on it so it’s always good to have that information because, without that, we are kind of dead in the water. We got to start from square one. Those of you that are divorced, one thing that you need to do is to look at how your benefit may have the ability to increase by getting or filing off of your ex-spouse or doing some of the creative strategies or if your ex-spouse passed away. You’re going to have to go to Social Security in most cases armed with your ID and proof of the marriage and/or divorce and then that should allow them to provide you some of those numbers. When you have those numbers then you can work with your financial planning team to make the decision there.

[00:36:33] Andrew: Again, even if you have a really tenuous relationship with your ex, none of it matters. It doesn’t affect them at all and they’re not even going to know so don’t be afraid of that. You’ve got to get what’s rightfully yours. On that note, one of the gurus, Laurence Kotlikoff, he’s one that for years put out great information. He’s got a great site that he used to update on PBS. He’s also the author of Get What’s Yours: The Secrets to Maxing Out Your Social Security. I’ll have this in the show notes, but it is a book that although you may not read all 250 pages, inside of there is some great anecdotes, some stories, and it breaks down why and how most people don’t collect what’s fully theirs. So, the key component is get what yours, you paid into it, understand how it fits into the overall equation, and don’t be afraid to ask questions. If your advisory firm is not helping you understand this, it may be time to start interviewing a firm that brings all those pieces together.

Whether it’s a firm like Bayntree or another registered investment advisory firm, make sure they’re more than just salespeople trying to sell you something but planning and helping you build the roadmap so that you can feel comfortable and confident when you do decide to finally separate from service and go on to that next chapter because really what it’s all about, retirement is all about income. All the tools we use to accumulate assets whether it be 401(k)s, whether it be investing in stocks, bonds and mutual funds, gold, annuities, real estate, maybe Bitcoin, maybe not, but ultimately those are tools to have the results. Social Security and a lot of times annuities and pensions that’s for income. We buy mutual funds or we invest in a brokerage account or investment account to have diversification and growth. We invest or not invest but we position money in the bank for safety and liquidity.

[00:38:38] Andrew: So, overall, all of these are just pieces of the puzzle to get to the most important fact which is what does retirement look like and that’s the light side of things and that your family and health and traveling and hobbies and faith and all of those things because I can almost guarantee when we’re on our deathbed, we’re not going to remember that we bought Netflix back in ‘05 when they were just shelling out DVDs across the country and now we’ve seen it multiply by 10. We’re not going to remember that we lost our shirt in 2001 or that we bought Apple stock 15 years ago, but you are going to remember the most important things so your memories and life, and ultimately all of these things to generate income in retirement so you don’t have to worry about outliving your lifestyle and that you have a paycheck coming in each and every month and that is part of why does getting closer to retirement or those that are retired need to work with a firm that understands the decumulation phase.

The decumulation phase is not just understanding how to invest but how to get the money out tax efficiently and how to create an income plan where you can feel confident that you’re not having to beat the market, you’re not waking up at four in the morning, seeing what happened in China or Europe or the talking heads here or what did the executive board or in this case, our president say. Now we’ve got a game plan with a purpose to generate income and protect and make sure that that money is there for you and ultimately for your family. So, if you have questions, I know we dug into a lot today, we’re here for you. Just shoot us an email, questions@bayntree.com. You also can go to our website and hit the Contact Us page, but our team is here to help answer questions.

[00:40:38] Andrew: Whether you become a client or not, we can have a candid conversation. We may be able to offer you some guidance and then if it makes sense to work together, we can go through what our financial planning process looks like. Pass this podcast on to anybody that you think could benefit from learning some of the ins and outs of Social Security and how it fits into your plan and always provide us feedback, let us know what we can do. If you have a topic for an upcoming show on financial planning, on business ownership, on taxes, on investing, whatever it may be, let us know, reach out to us, we’re here for you. We love getting out here and doing this type of fun education. That’s where the podcast was built from, to help those of us that are working that are business owners just take a step back and look at things on a wide lens and understand that nothing’s perfect but looking at the facts, taking out the emotions and leading you to a successful retirement.

That’s where our trademark at Bayntree is You Dream, We Plan, that’s a joint effort there or joint partnership. So, hope this was helpful and we hope you found this beneficial and as always, I look forward to providing you great information and tune in later this month for another episode of your Wealth & Beyond. Happy planning, everybody. Thanks, guys. Have a great day.

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Thank you for joining me for today’s episode of Your Wealth & Beyond. To get access to all the resources mentioned during today’s podcast, please visit Bayntree.com/Podcast, and be sure to tune in later this month for another episode of Your Wealth & Beyond.

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Investment advice is offered through Bayntree Wealth Advisors, LLC, a registered investment advisor. Insurance and annuity products are offered separately through Bayntree Planning Group, LLC. Bayntree is not permitted to offer and no statement made during the show shall constitute legal or tax advice. You should talk to a qualified professional before making any decisions about your personal situation.