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We've built each lesson in a manner where you’ll receive the education you need to help make the best decisions possible for you and your family.

-Foundation for Financial Wellness

Video Transcript:

Hi there and welcome, we're glad you're here! I'm Brent. I am one of the educators here at the Foundation for Financial Wellness. We’re an educational non-profit, and we’ve been delivering financial wellness education inside many of the world’s largest corporations for more than a decade now. In this series though, we've built each lesson in a manner where you’ll receive the education you need to help make the best decisions possible for you and your family.

Also, before making any financial decisions, be sure to take advantage of the Foundation's private counseling sessions. They are included with your participation in these classes, they're private and confidential, and they’re with one of our Certified Financial Wellness Counselors. Bring your questions, concerns, and be sure to bring your spouse or significant other as well. We'd love to help. It's what we do! 

To schedule a counseling session, simply click on the “Request Counseling” button at any time during your participation in this series. 

Now, with all of that being said, let’s get started!

When you pass, do you want your children to receive your investments and money? How about a religious organization? Your college alma mater? For this to happen, your instructions must be clear and in writing.

Some people avoid the conversation [about death] because they feel intimidated by their complex family situations. Some can feel quite overwhelmed by trying to identify all of their assets (both financial and items of personal importance) and liabilities.

-Foundation for Financial Wellness

Video Transcript:

All of us have a different reaction when it comes to talking about “The Big Inevitable.” Here are some of the more common reasons that we hear from people for why they prefer not to talk about the subject at all.

• They feel unsettled by addressing the topic of death. That’s understandable.
• They may think that their children or family members just want their hands on their money and wouldn’t be interested in a deeper conversation.
• Some still feel that money is supposed to be this taboo topic or a secret that is kept from other family members.
• Still others have a perception that only wealthy people have a need for estate planning.

Dysfunctional may very well be the new normal. However, some people avoid the conversation because they feel intimidated by their complex family situations. Some people can sometimes feel quite overwhelmed by trying to identify all of their assets (both financial and items of personal importance) and then also liabilities.

But we have got to get over this. We call it head-trash, and we’ve got to build a plan that leaves a legacy rather than a burden to those who we love.

So a quick review on this topic for you to decide again any decisions to make or actions to take.

Have you thought through your eventual estate, final wishes, funeral, where all your legal, tax and financial documents are located and if your loved ones can make any sense of it without you there? There is so much behind this topic, but don’t let it overwhelm you. Just get started. Start sketching out what you want from your legacy, who you want to know and how best to inform them. We’ll keep going from this point deeper and deeper, but for now, just get the ball rolling.

As always, don’t forget to take advantage of your private counseling session. This is a really popular topic. They’re included. They’re private. They’re confidential, and it’s always with one of our Certified Financial Wellness Counselors. To schedule that counseling session, simply click on the “Request Counseling” button.

You've worked hard to save through your 401k, but saving is only half of the equation. When and how to take distributions are an underappreciated part of the story.

Most people just simply take distributions out of the 401k. However, please be aware that it will be treated as ordinary income, and if you are not age 59 ½ or older yet, it will also incur a 10% federal penalty.

-Foundation for Financial Wellness

Video Transcript:

OK, so the most common form of retirement savings in this country happens inside of our 401k accounts. So, the first question is normally, “So, how can I use the money from my 401k?”

You basically have three options. Most people just simply take distributions out of the 401k.  However, please be aware that it will be treated as ordinary income, and if you are not age 59 ½ or older yet, it will also incur a 10% federal penalty.

The other two options for distribution – They’re a little more complex, so let’s talk about those now. (IRS rule 55 and IRS Regulation 72(t))

IRS Rule 55 is a little-known gem to people aged 55 or older. If you are 55 or older, you have a one-time opportunity to take a distribution. It will be taxed as ordinary income, but it will not be subjected to the 10% federal penalty.

Many people will tell you that this is a great way to take money out of your 401(k), but it is an irrevocable decision that has long-term significant tax consequences. So, make sure that you are well-prepared and well-informed before doing that. Under IRS Regulation 72(t), you elect to take substantially equal payments under the latter of reaching age 59 ½ or five years. So, these distributions will be taxed as ordinary income again but will not incur the 10% federal penalty. You should think it out carefully. It’s not a magic bullet by any stretch, but it could be a strategy worth considering.

So let’s do a quick review here for you to decide at this point do you have any decisions to make or actions to take.

What might be the most tax efficient and retirement-planning-friendly way for you to take income from your 401k. Is it a traditional distribution, an IRS Rule 55, or an IRS Reg. 72(t)?

If you don’t know, then the action to take from this lesson may be to reach out and schedule a call with a tax or financial professional. Or as always, don’t forget. You can take advantage of your private counseling session. It’s included. It’s private and confidential, and it’s always with one of our Certified Financial Wellness Counselors. To schedule your counseling session, simply click on the “Request Counseling” button.

Do you plan to stay in your home as long as possible? What happens when you can no longer climb a ladder, and you need to change a light bulb?

Look for help from community organizations. Many areas of the country are served by nonprofit orgs that can help retirees obtain affordable or even free home maintenance assistance.

-Foundation for Financial Wellness

Video Transcript:

Ask most retirees where they want to live, and chances are they'll say they want to age in their home. It just makes sense. Recently, an AARP survey found 87% of those age 65 and older said they would prefer to remain in their current home and community as long as they can as they age.

However, as we age, living at home comes with challenges. Homeowners who in previous years would have easily climbed ladders to change light bulbs or cleaned gutters, may not be advised to do things like that any longer. It’s just too dangerous. However, when retirees try to hire out these and other tasks, they often find it difficult to find dependable and fair-priced work.

So, we have a few ideas where you may look to find people you can trust to do a good job at a fair price. Here’s a few in no particular order:

This may sound surprising but ask your financial professionals - your accountant, financial advisor, attorney, etc. Oftentimes they have relationships with a lot of people across a variety of industries, and they know many other retirees who are having the same issues. 

Do a little online research. Angie's List – like those types of websites. Consumers can search company profiles, read reviews, and use that information to select the right people for the jobs.

Or, you can look for help from community organizations. Many areas of the country are served by nonprofit orgs that can help retirees obtain affordable or even free home maintenance assistance. Get creative!

So at this point do you have any decisions to make or actions to take?

Have you begun to think through the years remaining while living in the home? It may be a lot of years. It may be a long time from now, or it may be something you’re dealing with in the present.

Once you do, begin thinking through it thoroughly, begin writing those expenses into your retirement budget! Don’t ignore it. Don’t just hope it’s not an issue. Plan for it. It’s much less stressful to do this on the front end, and you can begin to build your supporting cast in the meantime.

Don’t forget - take advantage of your private counseling session. You can talk about these things. It’s included. It’s private. It’s confidential, and it’s always with one of our Certified Financial Wellness Counselors. To schedule that counseling session, simply click on the "Request Counseling" button.

We all experience three distinct phases during our financial lifetimes.

Whether you are nearing retirement and just starting a budget, or you began retirement planning early in life, these timelines provide a reference point for you to work from.

-Foundation for Financial Wellness

Video Transcript:

Probably the question we hear most often in Counseling Sessions is “How much will I need to retire?” Of course that’s different for every person.  But it’s a great starting point to talk about the phases of life that lead to retirement. There are three phases of a financial lifetime.

Accumulation is first where we start, save, grow, and protect our wealth, keeping as much of that wealth as we possibly can. For most of us, we spend about 50 years of our life in this phase.

Then we enter the spend down phase. This is where we enter retirement, and we spend down all that money that we saved in our accumulation phase. Of course, we still are out to preserve as much as we can for the next phase which is when we give money away. Assets - to leave a legacy for others. We might give away our assets to organizations or important people in our lives.

While these stages roughly align with our age, many of us put our financial house in order at various times in our lives. Each phase on this timeline lasts for a period of years and builds on the previous one.

Whether you are nearing retirement and just starting a budget, or you began retirement planning early in life, these timelines provide a reference point for you to work from. 

OK, now a quick review for you to decide if you have any decisions to make or actions to take.

Looking through this new lens of the Three Phases of a Financial Lifetime, what phase are you in, and how well are doing at retaining alignment between your values, your vision and your financial plan?

As always, don’t forget to take advantage of your private counseling session. It’s included. It’s private and confidential, and it’s always with one of our Certified Financial Wellness Counselors. To schedule your counseling session, simply click on the “Request Counseling” button.

Long-term financial goals are important early in your working career to ensure a solid nest egg. As you near retirement, adjusting those goals to match your new stage in life can be equally important.

As we approach our expected retirement years, many of the goals that we set in those younger years have passed (and hopefully we crushed those goals by the way), and now we become laser focused on retirement-specific goals.

-Foundation for Financial Wellness

Video Transcript:

To get started, let’s get a quick recalibration done here. Remember back in an earlier lesson when we talked about the principles and importance of solid goal setting? Well, the same applies at this stage of life. As we approach our expected retirement years, many of the goals that we set in those younger years have passed (and hopefully we crushed those goals by the way), and now we become laser focused on retirement-specific goals. So, our one-, three-, and five-year goals should be consistently updated as we course correct and maintain control.

Like we talked about before in an earlier lesson, we are hopefully living by our budget. It is very difficult (and probably unrealistic) to build a retirement budget out of thin air and expect it to be accurate. 

Yes, our retirement budget is best built on the foundation of our pre-retirement budget. Some expenses will go away entirely, other expenses may actually go up (hopefully some fun ones!), and some new expenses altogether may need to be added. 

Regardless, the budget in retirement is mission critical. It should be aligned with your vision and values, and it essentially becomes your playbook for what is hopefully the most fun-filled, joy-filled years of your life.

Remember, if helpful, don’t forget to download the Foundation’s budgeting tool for this step.

OK - quick review again for you to decide if you have any decisions to make or actions to take.

Think through and then write down your first draft – it can be rough - of what a one-, three-, and five-year retirement goal might look like for you and your family.

As always, don’t forget to take advantage of your private counseling session. It’s included. It’s private. It’s confidential, and it’s always with one of our Certified Financial Wellness Counselors. To schedule your counseling session, simply click on the “Request Counseling” button.

The future of Social Security is as clear as mud. Many believe it will take care of them in retirement, while others believe the benefit's insolvency is just around the corner.

Unfortunately, only a small percentage of financial advisors describe themselves as very knowledgeable about Social Security (less than 25%!).

-Foundation for Financial Wellness

Video Transcript

Ok, so what might the future of Social Security look like?

The good news - This so-called “Echo Boom” will make up for the current system imbalance. There’s 80 million new contributors. These happen to be the Boomers’ kids.

However, recent changes in Washington will impact how you can file.

The bottom line is there are hundreds of ways to claim Social Security. You can’t afford to ignore the opportunity to strategize, optimize, and make your Social Security claim wisely.

The 2016/2017 Budget Bill made significant changes to Social Security. The intent was to close “unintended loopholes” that lawmakers claimed only benefited the wealthy. As we will see, these changes have already impacted everyone in one way or another.

Other changes are made every year that have an impact, so a big recommendation here - get some guidance.

You would think that you could ask the Social Security Administration for some guidance.

Great idea, but to quote from a survey of married couples age 60-66:

“We found that 77% of people expect to receive advice from the Social Security Administration (SSA) on how to maximize their Social Security Retirement benefits. In reality, most Social Security Administration personnel are not trained or equipped to dispense anything more than monthly benefit amounts at different election ages, and the SSA actually prohibits its representatives from dispensing advice.” 

So, find a financial professional. Unfortunately, only a small percentage of financial advisors describe themselves as very knowledgeable about Social Security (less than 25%!). Many financial professionals are not interested in giving advice to their clients to strategize or help maximize their benefits because it does not fit into their plan or business model.

So a quick review – How about any decisions to make or actions to take at this point?

One straightforward question for you on this one - Who are you going to engage to help you with the considerations, calculations, and your overall planning for your Social Security selections?

Is it your financial advisor, your accountant, your know-it-all brother-in-law? Just kidding, don’t ask him.

As always, don’t forget. You can take advantage of your private counseling session with us. It’s included. It’s private. It’s confidential, and it’s always with one of the Certified Financial Wellness Counselors here at the foundation. To schedule your counseling session, simply click on the “Request Counseling” button.

Can you believe that when Social Security was created during Franklin D. Roosevelt's Administration, the average life expectancy was 59, and people couldn't draw benefits until age 65? Now average life expectancy is nearing 80, and the focus of the entitlement retains many of its original tenants, goals, and funding mechanisms.

Social Security was created in 1935 after the Great Depression and widespread bank defaults were the reality at the time. It was originally called “Federal Old-Age, Survivors, and Disability Insurance.” Talk about politically incorrect.

-Foundation for Financial Wellness

Video Transcript

Ok, how about some quick history of Social Security? Social Security was created in 1935 after the Great Depression and widespread bank defaults were the reality at the time. It was originally called “Federal Old-Age, Survivors, and Disability Insurance.” Talk about politically incorrect.

At that time poverty rates for seniors were more than 50%, and this social program was an attempt to mitigate the dangers of modern American Life (old age, poverty, unemployment, widows, and orphans).

It was designed to be more than just a check. Primarily it was meant to be a guaranteed lifetime income indexed to inflation with spousal and survivorship benefits. It was given preferential tax treatment. It was never designed to be a beneficiary's sole source of retirement income.

Most retirees were expected to have at least three primary retirement income pillars. We talked about this in other lessons – One being Social Security – Two being your employer pension plan – Three being your personal savings.

Now, present day Social Security realities – People are living much longer and claiming much sooner.

Originally Social Security was reserved for the minority – people who “beat the odds.” When the Social Security Administration was founded, life expectancy – get this – was 59. Benefits could not even start until age 65!

So today, it’s expected that retirees will draw from Social Security for a very long time! Now, life expectancy is nearing 80! Many claimants start taking benefits as early as 62. That’s almost 20 years.

So, a quick review for you to decide – any decisions to make or actions to take.

Are you maybe making some assumptions about Social Security that you shouldn’t be making? Have you requested your Social Security estimate? And, more importantly, are you confident that you know all of the considerations that you will need to make before making the decisions specifically on your Social Security benefits? It’s much more nuanced.

So, as always, don’t forget. Take advantage of your private counseling. This could be something that you bring to that session. It’s included. It’s private. It’s confidential, and it’s always with one of our Certified Financial Wellness Counselors. To schedule your counseling session, simply click on the “Request Counseling” button.