Retirement Planning Is Harder Than It Used To Be (Part 2)

Every generation likes to talk about how much harder things used to be when they were kids. Like all of the people who used to have to walk five miles to school, in the snow, uphill both ways. But they had at least
one thing that was EASIER…and that was retirement planning. Let’s continue our conversation about why on today’s episode.

 

Important Links: Website: http://www.yourplanningpros.com

Call: 844-707-7381

 

Transcript: 

Marc Killian  00:00

On the prior podcast we talked about every generation likes to talk about how things were harder for them than it is now. And we're gonna continue our conversation with retirement planning. Is it harder than it used to be? Here on this episode of planet tax man with Tony Morrow? Look up in the sky? It's a bird.

 

Announcer 2  00:19

It's a plane. No, it's the tax man. He may not be a superhero. But Tony Morrow has saved many retirement plans with his extreme knowledge of tax planning strategies. It's time for a plan with the tax man. Hey,

 

Marc Killian  00:33

folks, Welcome to part two here have a conversation on is retirement planning harder today than it used to be? And I think in a lot of ways, we've certainly in the first half, we've ascertained that Yeah, it definitely is. But there's also some things that do make it easier. And I'm sure that's going to continue to be the theme throughout this episode, as well. But we certainly appreciate you and welcoming you into the podcast. And if you did not check out the prior one, feel free to do so you don't have to listen to one day to enjoy the other. But it's certainly not a bad idea. And of course, you can do so by simply subscribing to the podcast playing with the tax ban on Apple or Spotify or Google whatever platform you like to use a simply just stop by Tony's website to find those links and to take yourself right there and check out the tools tips and resources at your planning proz.com. That's your planning proz.com. Of course, you can always just type playing with the tax man in the search box of whatever app you like using as well. Funny, my friend what's going on, buddy? How are you this week?

 

Tony Mauro  01:30

I'm doing good, you know, in the throes of tax season and dealing with a lot of that, you know, but so far, it's been rough, smooth filing? Yeah,

 

Marc Killian  01:39

yeah, for sure. And it's late February. So did you were you good? Did you to take care of things for Valentine's Day, get your wife something nice or give her some flowers or anything?

 

Tony Mauro  01:49

We did do that. And we went out to eat this year, which was a little bit of a change. And so we enjoyed it. Yeah, it was but pretty pretty laid back and casual. Yeah,

 

Marc Killian  01:57

for sure. Well, I hope everybody had a good holiday or good Valentine's Day. I don't know if it's, I guess it's a holiday at this point. But but let's get into our conversation here on the next five of our conversation around, you know, is retirement planning harder. So let's go with number six here, healthcare costs, man, this has to be a no brainer, it's clearly back then it had to be a lot easier. Now we're facing massive escalating costs here. But we do have better technology for longer life, which is going to tie into another one here in a little bit. But, you know, again, it's all kind of this weird, double edged sword, we have way more tech and way more stuff. That's good, you know, for our healthcare side, but it is not cheap.

 

Tony Mauro  02:36

It's not cheap. You know, and I forgot to mention this on the last episode, but I thought about it after we had gotten off. But now that we're talking about, you know, we're in our 50s is, do you ever stop and think about? Boy, I'm so glad I'm not, you know, young and just starting out anymore, you know, because you always feel like after they got it, they're gonna have it really hard. And I wonder if our parents thought that two way back in their day, but we we survive, you know, and we adapt. But yeah, I think today, with the health care costs, I've just had a meeting with my benefits guy for our group health. And, of course, costs are going up again, they always do. He always acts like he's scared to tell me and I already know, you know, costs are going up. And I think it's, you know, a byproduct of, you know, we're living longer. We've got all this technology. And it does allow us probably, if it's not abused to live a healthier life. But yeah, the costs are just astronomical. And I think, as opposed to our parents who weren't living that long, and there wasn't, it always seems like there's a lot of different weird elements. I'm going to talk about cancer and things like that, that nobody seemed to have back 50 years ago. But nevertheless, I think that healthcare becomes a big issue in financial planning, especially as you're nearing retirement, once you get into it. You've got the whole Medicare thing, supplements and making sure you're covered. And it's a big cost for a lot of these retirees. So I think it's harder today than it was a long time ago. Yes. Yeah. And

 

Marc Killian  04:09

then think about some of the issues with facilities, right. So you know, facilities. On the one hand, we have nicer better facilities now, especially for seniors, right, or, or for folks with advanced seniors than we did you know, in the 80s or so. But, again, it also cost a ton like these continuing, whether they call them continuous care communities. I mean, these things are pricey, right? So if you're not talking about it, which many people like to avoid the conversation of, of aging and needing some sort of long term care, then you really put yourself even more behind the eight ball when the event happens. And now where you where you get the money from right now you're at a time to even plan or strategize. So, gotta talk about it right got to figure out what to do, because it is affecting more of us because of number eight, which we'll get to in just a second is that the longer you know, the life expectancy, but before we get there, let's talk about number seven. which is the sandwich generation, which many of us are, I was in this mode for a little while, I had my senior, my elderly mother living with us, and our daughter was still home, you know, before she went off to college, you know, now both have moved on to, you know, daughters in the Navy, and mom's got herself in a senior apartment complex, kind of, like we just talked about. But you know, that's tough, right. And especially right now, in this environment, we're in financially here in 2024, Tony, you know, I mean, everything is costly, you know, so if you're trying to take care of three generations in the same house, boy, that's rough, it

 

Tony Mauro  05:33

is rough, and it ties into what we just talked about with health care. And then what we're next going to talk about, with people living too long is, and I see it every day, and I you know, luckily for me, and my dad is still alive, and he's going to be 83. But II, we have planned for him. And he knows that. And it his biggest fear is, you know, obviously, they don't want to go into a full fledged nursing home. And they want to be able to live on their own as long as they can. But luckily, you know, for him, it's got the planning that was done and the means to do it. But I think a lot of people, I would just had somebody in here yesterday as well, he's in his 50s. And he is mom and dad didn't plan, they have dementia, he doesn't know what to do with them, it's really taken an emotional strain on him to try to take care of his aging parents, they're in their late 80s. And, you know, he doesn't know what to do with it. And not only consumes a lot of money, but a lot of emotional stress as well, if you will. So I think it's very, very challenging today. And many, many are going through it. I mean, I talk with friends my age, and they're, you know, they're, they're either their parents are aging, you know, or they need full time care. And it's, I only think it's probably going to get maybe a little worse, but because I don't think people are planning enough, like we were talking about the last topic for that, that eventual need of, you know, long longer term type of care.

 

Marc Killian  07:06

Well, and think about, you know, obviously, you've got the cost of aging care, right, so advanced age here, and you've got the cost of college, right, and then you get the cost of all these things out of control. So you end up with your college age kids at home, your parents, you know, elderly parents at home with you, as well. And it's just, you know, and then the grocery bills up through the roof now, because you got all these people there, and you know, groceries are out of control, you know, things have got to shift, and I'm not sure how we're going to make some of these changes from from our leadership standpoint, they just, they just seem to be, you know, comfortable with, again, kicking the can down the road, we'll we'll just make minor adjustments to my bring temporary ease, but it just makes for harder problems later on. So it's very tough, right? I mean, you're gonna have to have a, you've got to think your way through some of this stuff, instead of just kind of reacting in the moment. And I think that's certainly something that all of us have got to do in different walks of life. And you find yourself thinking, hey, look, I didn't get all the way to this point to have to keep making these hard decisions. I'm, you know, I'm getting close to retirement, I just want to relax. And it's like, well, that's how you get there to relax as you gotta make some of the hard decisions along the way. And certainly long term carriers and things of that nature are one of those. So good points, for sure. So life expectancies, well, we were living shorter, right, my dad passed away at 63. Back in the early 90s. You know, and so, you know, most of the men in my family have passed away early, but it doesn't mean that I'm going to so I've got to plan on being around longer, because we do have all these medical advances that we talked about a minute ago.

 

Tony Mauro  08:41

Yeah, we do, you know, and would our parents were alive. I mean, I still have one parent alive. And you know, he's 83. And, but earlier generations, you know, they didn't need as much because they weren't living as long. So the retirement didn't have to last. Now, when we plan with, with our clients, we're planning out to 90 for sure. And then if they've got some longevity in in the family, even a little longer, believe it or not, and then if it doesn't, is not needed, that it's not needed. But with that, and the fact that medically in some of the technology that we've already talked about, are keeping people alive longer, that are going to need their funds for a longer period of time versus 5060 years ago, generally. And so it all comes back to like you were talking about is is getting the proper plan and making sure that, you know, this plan is going to work for you, which all this stuff, people look at advisors saying, well, all you're doing is just picking investment. No, it's It's this kind of stuff that's more important than what you actually have your particular portfolio in, per se, you know, and so this is kind of stuff that I don't think you can overlook, and that's

 

Marc Killian  09:49

one of them. Yeah, definitely. You know, and so you think about the, you know, the aging process, right? So we, we tend to kind of do that thing and say, Well, you know, I don't have longevity so You know, just like I was referring to myself, I don't have longevity. So I'm not going to worry about it and think about what's happening to the younger generation right now. They see all these things, we're constantly being hit with this information and stuff saying, Yeah, you know, we're going, the world's going to collapse and blah, blah, blah, and you're not going to be 20 years from now, and so on and so forth. And so you've got younger people. And when I say younger, I mean, into the 30s, you know, doing this whole YOLO thing, right. And I know, it's a little bit of a dated term, but you know, you only live once, kind of deal and they're, they're kind of, they're not thinking about the future in we have to still do that. Because it seems like every time we turn around, Tony, there's always something where, oh, it's, we're not going to make it another 40 years, or this, that the other and then 40 years goes by in the blink of an eye and you're like, Wow, I'm hungry. And I have nothing. I know it. It's a, it's a weird spot.

 

Tony Mauro  10:46

It's a weird spot, I actually have a living uncle who is right in that spot. You know, he's 80 years old, that basically just living on Social Security. And it's not much because they were self employed. And they, you know, they didn't really put a lot in. So, you know, it's just not a very good existence, you know, to go all that time. But I agree.

 

Marc Killian  11:09

Well, you know, so let's talk about Social Security. Because that is, obviously that wouldn't change, you know, it same kind of conversation we were having, you know, our leaders just go I don't want to deal with that thing, punt it down the road, let somebody else deal with it. And we're out here going, you know, what's it gonna do to us? Look at what happened in France last year, right. So they, they call it pension air program there, right. So they changed their pension air program, all they did was right, move it to yours. And you had riots in the streets from people that which made no sense to me that people in their 20s and 30s, really, two years, you're 40 years away from being 60 in your writing over something that's going to maybe have you worked two years longer, you know, so it's kind of crazy. But again, to that point, we've kind of brainwashed people, or allowed them to kind of go down this path

 

Tony Mauro  11:57

of, of, you know, I don't want to have to make things any harder than they already are. And unfortunately, that's just how life goes. And if we keep making these short term decisions financially, life is going to be harder, it'll be harder. And I think social security, we could do a whole prior to our podcast, on this topic, and all kinds of things. But what what the deal is today really is because some of our older people, obviously they're living longer, don't have as many people in the workforce as we once did. And the families that, you know, we're going to be running out of oil, the trust fund is going to be depleted, I think, by the year 2034. What that will mean, and I agree with you, Congress, you know, just keeps kicking the can down roads to having meaningful, you know, talks about this and try to come up with something bipartisan to fix this. But they'll there'll be a last minute patch, like they always do, which I don't agree with. But the biggest problem with Social Security is we don't have as many people contributing, and then we got a lot of people taken. But like you said, though, you know, people in their 50s, even though I'm not counting on it, you know, you kind of feel like, well, I have been contributing for 40 years or 30 years. If you're not going to give it if if the benefits not gonna be there for anyone, just give me my money. And I'll go go my separate way. But I mean, there's a lot a lot of mixed feelings on that from people that have contributed a long time. I just read this morning, in it was an investment article about there's a proposal out from the investment community, that if they would basically take away the tax deductibility of all 401, k's and or IRAs that can that would contribute like 1.3% of the GDP, and they could use that to fund so you know, to make up for Social Security. I mean, it's, it sounds out there, but it's an idea. I don't know if I agree with it, but it just people need to come up with some ideas, you know, and on how to fix that. For the next, you know, 100 years. Yeah, so yeah,

 

Marc Killian  14:00

and it's all those little pieces, right. To your point, like, I mean, even talking about the France thing, is that gonna go, you know, we have 62 is early retirement, well, what if they just pushed that back to 64? or eliminated it, you know, you know, and just said, 66, is it or 67, depending on your age, there's talk of moving that, you know, to 70, making that the thing, so there's about a million ways they can do it. You know, there's the means testing conversation. To me, it seems like they should just grandfather things in for people and say, 50, you know, birthday 50 and younger or whatever, yeah, you're gonna probably not be eligible for early retirement, we're going to remove that 62 Altogether, or make it push it back to yours and supposedly funds it for 100 year so they just no one wants to touch it because they don't want to be the person who gets you know, labeled as either, you know, destroying it or removing it or whatever you think, Hey, if you're the one who fixes it, though that can be it can be a big win for you. So

 

Tony Mauro  14:51

yeah, and it's not going to be an easy and not everybody's gonna be happy. No, for sure. So they just they've got to, they've got to come up with something because I don't think Until let let it just, you know, eventually fail. But there'll be some. I just Yeah, I don't want to get into that

 

Marc Killian  15:06

and get to right. Yeah, we as they were definitely, we're definitely already soapbox a little bit on these episodes right now. So yeah, it's hard not to write because our lines have blurred so much, how do you talk about just simply the X's and O's of finance without looking at the bigger picture of what's going on in our world, with our leaders, and so on and so forth. So it's, it's tough, right? We're in this interest? Well, and that actually works really well, for this last point, Tony, number 10, is, you know, easier to achieve financial literacy. You know, in the past, I don't think a lot of individuals felt they needed to be highly financially literate, to get it done, because it was easier. But nowadays, you really do need to be well versed in so many things. I mean, right. I mean, if you turn a blind eye to what's happening politically, that's not smart. But then again, you don't want to go too far in because then people get so opinionated. And so they shut down and they get so frustrated, or they, you know, I mean, we just fight or whatever the case is. So you gotta have a good knowledge base, I think on a lot of things. Now, in our world, in our society, no matter your age, and certainly financially, that's gotten much better, it is way easier to get a lot more information and context. Now you can get that overload a little bit. But you can certainly find a lot more information to kind of build your knowledge base, and then take that to a pro like yourself, who you find that you is the right fit for you that you want to work with and say, Okay, now help me make it all make sense and, and understand them when they're talking to you.

 

Tony Mauro  16:25

That's it right there is, you know, there's, there's so much information out there, that you shouldn't just turn away from it, you should learn something on your own. But I caution people to when they go overboard, like you were talking, it's because it's it's at us 24/7 Now that you go down rabbit holes, like you would when you're maybe spending too much time on Facebook or something, and you get yourself all confused. And then sometimes either a you're gonna make bad decisions, or you're paralyzed and make no decisions. And so you need to maybe not just take whatever your advisor is telling you, you know, and never pay attention or outside wrap, right? I'm saying, you know, take some time learn about things. And then it's best to bounce it off an advisor, I would say this is where advisors earn, what they get paid if they're if they're doing their jobs properly. Because this is I mean, it's a relationship that, you know, the advisor, hopefully is trying to take you from wherever you're at to wherever you want to be. And everything in between, and all these stuff. These things

 

Marc Killian  17:28

we've been talking about, well, especially if it's a if it's a sip, what's the word I'm looking for a typical, is that right? relationship, right? Where it's not something where you're just saying, Okay, I'm giving, you know, this person money, and they're giving me advice, but I've given them money, they've given me advice and a plan, but they also generally want me to succeed because when I succeed, they succeed. You know, that kind of thing, right? So it's trying to build is trying to find that right? person, that right firm, that get that chemistry going so that you can work through all these more complicated things that do affect us in today's world. And so that's gonna wrap up our podcast series over the last two here. Is retirement planning harder than it used to be? Yeah, because I think society right now is a little harder than it used to be. It's also easier than it used to be so you know, just like anything is it's a double edged sword. We know life is not. What did I say? Relief was roses and thorns. There you go. That's right. It can be both of well, Tony, thanks for hanging out my friend. We got a little deep here. We got a little interesting, but sometimes you got to do that. Right. So we'll be back with more episodes in the future. Don't forget to subscribe to us here on playing with the tax man on Apple, Spotify, YouTube, all that good stuff. And of course, if you need some help reach out to Tony and his team at your planning proz.com. He is a CPA CFP and an EA have 30 plus years experience helping families get to and through on this journey. So give him a call and reach out to him. You're planning proz.com And we'll see you next time. Thanks, Tony.

 

Walter Storholt  19:00

Securities offered through a van tax investment services SM Member FINRA SIPC, investment advisory services offered through advanced tax advisory services insurance services offered through an event tax affiliated Insurance Agency investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional