Finding Silver Lining In Unfortunate Financial Situations

Not everything goes smoothly in your financial life. We’ll look at some negative circumstances that many retirees and pre-retirees face and help you find the silver lining in the midst of tough situations.

Important Links

Website: http://www.yourplanningpros.com

Call: 844-707-7381

Transcript Of Today's Show:

Speaker 1: Once again here on the podcast with Tony Mauro, as we're talking about investing, finance and retirement here on Plan with the Tax Man. And, Tony, hello. How are you, my friend?

Tony Mauro: I am fantastic. How about you today?

Speaker 1: I am doing pretty good hanging in there. We are in the midst of December. We are closing out on Christmas. Are you all set?

Tony Mauro: I'm not all set quite yet. I've still got a little bit of shopping to do, so I do have to get out and get it done. I'm hearing it from my wife that we need to wrap this up.

Speaker 1: Yep, yep. I'm with you. Well, at the time of this podcast taping, we're about 12 or 14, I guess, I want to do the math here, 12 days. Oh, I guess, we'd be the 12 days of Christmas now, so we can jump into that. And so in kind of sort of a roundabout way, our topic this week is actually going to be trying to find the silver lining, like holiday season, right? People like to use silver, gold or colors like that when they're decorating on their tree and so on and so forth. So we're going to try to find the silver lining, Tony, in some unfortunate financial situations. So try to put a positive, happy spin on some of these, okay?

Tony Mauro: All right.

Speaker 1: That's what we're going to do. But first, before we do that, I'm wanted to ... two email questions this week on the podcast. So if you'd like to submit your own email question, go to yourplanningpros.com, that is yourplanningpros.com, and we'll be happy to read it here on the show and let Tony answer it. Or you can just let him know you'd like to talk to him and not have it read. That's fine as well. Just let us know. Either way, we'll be happy to get it going for you. And our question, first one is from Ellie, and she says, "Tony, I'm a little worried because it seems like all my friends have more money saved for retirement than I do. Is that a bad sign?"

Tony Mauro: Yes. Well, and not yes to that question, but it depends. But I would tell Ellie, because we don't know her age here, I mean, it could be a a sign that you may need to make some changes and maybe need to ... if you feel like you're behind, first of all, I would say you can't compare yourself to others. That's tough to do.

Speaker 1: Right. I was going to say, that's a bad sign to me because you're just asking to set yourself up for something.

Tony Mauro: Yeah, because somebody always has more than you, and you can go right down the line, whether it's money, cars.

Speaker 1: Or they just live like they do, right? They can be further in debt than you are too.

Tony Mauro: Yeah, exactly. So but, I mean, if it's a concern for you, what I would do is I would talk to your advisor or you can reach out to us, and we could see based on where you're at and what you want to do, how good or bad shape you're in. But the good news is, is generally no matter where you're at, it's never too late to get started.

Speaker 1: Yeah. Well, if you're getting a little Freudian with this, and I don't know if that's the right term, but if she's saying that it seems like her friends have more than she does, Ellie, maybe you just feel like you don't have enough in general and you're just kind of using that as a way to kind of frame it. So, yeah, have the numbers ran. If you're not working with an advisor, then get with one and go in and have a conversation. You can usually get complimentary reviews. You talk with one, talk with two, whatever the case might be, and see where you stand. If you do have a plan in place, then have those numbers reran for you. And as Tony mentioned, you can always reach out to them if you'd like, at (844) 707-7381. But thank you for listening to the podcast and continue to do so, and feel free to share that with others who hopefully will benefit from it.

Speaker 1: All right. So let's get into our main topic. We're going to do one more email question on the other side of this. But first, like I said, let's talk about finding some silver lining. So I'm going to give you the situation, Tony. You see if you can give us one or two or three bullet points of a potential silver lining. So we'll start with early retirement, but in this case, maybe you're being sent out to retirement sooner than you wanted to.

Tony Mauro: Yeah. And I mean, obviously people look at that as, "Oh, my goodness. This is a real negative. What am I going to do?"

Speaker 1: Right. Yeah, I'm not ready or whatever.

Tony Mauro: I read something about a month ago. For the first time, it was a great saying by a guy and he said ... and so I think you need to keep this in mind with all of this. I've been trying to use it in my own life since I found it out. And it said this, "Things in life don't happen to you. They happen for you." And if you really think about that, that's a powerful statement. And so we all, when bad things happen, want to generally feel sorry for ourselves. But there generally is a silver lining. Generally, it's happening, sometimes we can't control it, but there's a reason. And generally, you can find some good in it and maneuver in a different direction.

Tony Mauro: I think in the case, if they're forcing you into an early retirement, hopefully you're getting some money, possibly in a severance. Maybe you can find an opportunity to do something that you might enjoy more or maybe it has a better pay. Maybe it's time you strike it out on your own, or maybe it's just time to say, "You know what? If I'm near retirement, maybe I need to think about that a little bit." And then try to make plans. I mean, life changes, and if you've been planning along the way, it's a change, but it shouldn't be that devastating.

Speaker 1: Well, and I think that's a couple of good points that, A, you could have some money due from a severance, like you said. B, it could give you the opportunity to say, I really wanted to get into this or that, or whatever the case might be. I wanted to start my own business, or I wanted to whatever. And I think, finally, yeah, a lot of people do find themselves in that situation where if they're being forced into early retirement, you go get the numbers ran and sit down and put a plan together, and you might see, "Well, heck, I'm ready to retire now. And I didn't realize it." So definitely a silver lining there that's potential. Or you may find that you are just a little bit short or whatever the case is and then it gives you something to kind of work yourself towards. So that's the first one. So all right. Very good. How about this one, you're finding out that the life insurance premiums are going up? Give us some silver linings. Yeah.

Tony Mauro: Yeah. Nobody likes that, to pay more for basically the same. And life insurance and so does the case with longterm care insurance, generally, premiums are going up. Of course, they're never going to go down. And one thing you might check if that happens is, depending on when you bought the policy, there might be cheaper options nowadays, depending on what your needs are and whatnot. So it never hurts to take a look if you haven't looked in a while. The other one is the fact that maybe you're at the point in your life and you're just now realizing it, that I've had this policy forever. I really don't need the coverage anymore. Maybe I just decided to say I'm going to terminate the policy and just skip it all together. Or in the case sometimes of longterm care, and life insurance to a lesser extent, maybe you just say, "You know what? I understand costs are going up. I like this coverage, and I feel like I need it." And it's not normally the funnest thing they have to pay more. Like I said, but it's not all that bad either.

Speaker 1: Yeah. Okay. So there's a couple of silver linings there for insurance premiums. I think definitely some good ones there. You may find you don't need it. Of course, before you take action, please check with your advisor or qualified professional. Don't just cancel because you heard someone say, "Oh, you don't need it anymore." And, B, you may be able to get better coverage at a cheaper price. Lots of things to think about there. Okay, so how about this one, Tony? The company is doing away with the pension and you're moving to just ... they're giving you just a lump sum buyout.

Tony Mauro: Yeah. And that's easy one to really feel like, "Wow, this is not a good situation." And everybody wants that pension. But a lot of companies are moving that way simply because the old-fashioned pensions are very costly for them. But assuming that nothing's gone wrong with the pension, if they're offering you a lump sum buyout, you possibly obviously could take that lump sum and maybe create more income investing yourself and to create that income to replace that. And two is, now you've got total control. It can be a good and a bad, but you've got total control of the assets to basically kind of direct and invest and/or spend how you want, which adds to your flexibility in life. So it's not all bad, but I would seek some advice before you just take a big lump sum payout, plop it in your savings account and then start spending it.

Speaker 1: Yeah, I think that's probably pretty good advice. Yeah. Even though here at the holiday season it might be tempting, but definitely don't do it.

Tony Mauro: It's tempting, yes.

Speaker 1: All right, final one and then we'll get to wrapping this thing up here. Looking for the silver lining, Tony, in the fact that the company has been bought out and you've got a whole new team to get used to. Maybe you're getting closer to retirement and you're thinking, "Oh, man, I got to learn new managers or new protocols," or whatever the case might be. What's some silver linings here?

Tony Mauro: Well, I think this happens a lot, especially in the bigger companies, and I mean, so it's not as uncommon as it used to be. And some of the things, really, I would give it some time and say, "Hey, I'm going to try to get used to this. Let's see what they have to offer." Maybe it could be better than the old management. You might have options you didn't have before. I know some people, and it's a big thing in the workplace now, even with a small companies like mine, is flexibility in people's work schedules and being able to work from home possibly. And it could be some new benefits that weren't offered before. There could be, who knows, maybe different type of bonus structure type of thing. You also could be able to, maybe they're going to bring in their own retirement plan. Maybe you have more options there and more flexibility there. So I would give it a chance before you just jump ship.

Speaker 1: Yeah. Yeah. And I think that's kind of the idea is that look for the silver lining, folks, here at the end of the 2019. Look for that brass ring, if you will. We can change colors, I guess, from silver to brass. But either way, you get the idea. Look for something that's just a little bit more positive in what could maybe be a seemingly unfortunate financial situation. Hopefully there is a silver lining there for you and all that good stuff. So there you go. So hopefully you enjoyed that. And we're going to take one more question before we get out of here and let everybody enjoy the remainder of their holiday season. But this one is from Randall, and Randall says, "Tony, I'm in my mid-50s, I don't have much saved for retirement and all, but I do own my own business and I have had a really big year this year. Best I've had by far, so I'm going to have some big profits I can invest for retirement. Can you give me some places to start?

Tony Mauro: And I would tell Randall, if he hasn't already and if he's not working with an accountant and/or advisor, to definitely get some advice. But we hear this a lot from on our accounting side of the business. And what we hear generally is, "I don't need a retirement plan because I have my business. That's the big one. And I'm just going to plow all my money back into my business and this is going to take care of me forever." But that could be a big mistake depending on what kind of business it is. And the business, as soon as you stop doing the work, sometimes can't generate that income if you were the business itself. So I would say that be careful there, but it's nice that you're looking at, you had a good year and you're thinking about, "Hey, I need to take some of this profit and start investing for retirement."

Tony Mauro: And small business owners, there's a lot of plans available to utilize and stash this money away, either a pretax or post-tax using Roth type of contributions. So I always encourage the clients we work with on the accounting side, one of our number one tax savings goals is, why don't you have a retirement plan through the business, because they're so flexible for us. And so you want to get with somebody and learn the ins and outs and learn which one is best for you because they all have their pluses and minuses. But you really can use it to stash a lot of money away.

Speaker 1: All right. Well, great email question. Great podcast this week here on Plan with the Tax Man, with Tony Mauro. As always, do us a favor and subscribe to the podcast on Google or Apple or Spotify, whatever platform of choice that you use. You can find it on those sites by just searching out Plan with the Tax Man, or you can go to yourplanningpros.com, that's Tony's website. Check out Tax Doctor Inc there. Check out Tony and the team, a lot of good tools, tips and resources. And again, subscribe to our podcast. Get future episode updates as well as past episodes if you want to go back through those, and hopefully find a useful nugget or two that helps you along your path towards retirement. And of course, Tony's been doing this for quite a few years, over 23 years in the industry. He's an EA and a certified financial planner and a great resource for you at Tax Doctor Inc here in central Iowa.

Speaker 1: Give him a call if you do have any questions. Before you take any action, we always strongly suggest that please don't just run out and do something that you hear on any show, let alone just ours. Always check with a qualified professional about your specific situation. (844) 707-7381 is how you do that, (844) 707-7381. And, Tony, my friend, have yourself a fantastic Christmas. I hope our listeners do as well. And I hope everybody just enjoys and has a nice safe holiday.

Tony Mauro: You do the same.

Speaker 1: And we'll talk to you next time here on Plan with the Tax Man. So go get that shopping done. Don't be a last second person and be pulling your hair out.

Tony Mauro: That's right, like me.

Speaker 1: Because the traffic will be insane, and so will the people. So have yourself a great holiday, folks. We'll see you in 2020. Wow, that sounds weird. We'll see you in 2020 on Plan with the Tax Man.