Ask An Adviser - January 2022 - Level 5 Financial

Ask An Adviser – January 2022

Transcript

Jan 13, 2022 . 8:59 AM . ID: 439840397

00:00 – 00:02
[speaker unknown]
This conference will now be recorded.

00:06 – 00:11
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Are just about at the top of the hour, so we’re gonna give everybody one more minute before I start.

00:14 – 00:15
[speaker unknown]
Good morning.

00:16 – 00:17
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Good morning, everybody.

00:18 – 00:19
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Hello, cairn.

00:19 – 00:22
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Hello Jamie Cations Hussein.

00:25 – 00:32
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I was just saying this morning that I, or the other day, that I might switch this to a different platform so people can be incognito if they want to.

00:33 – 00:34
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I don’t know if you have that ability.

00:36 – 00:40
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Hey, Kenny, I see in the background, Look like you’ve been outside.

00:42 – 00:43
Karen Hager Martinez
Little.

00:45 – 00:46
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Nice to see you.

00:48 – 00:48
Karen Hager Martinez
Yeah.

00:51 – 00:54
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You must not be teaching if you’re you’re here.

00:55 – 01:00
Karen Hager Martinez
Actually at meetings that started attended last night before last, OK?

01:05 – 01:06
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I’m glad you may get.

01:06 – 01:07
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Hey, Sandy.

01:07 – 01:08
sandy
Hey.

01:12 – 01:14
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You might have to show us the view of Pikes Peak.

01:14 – 01:14
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
From that window.

01:14 – 01:18
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I think that’s the window next year is the one that faces the peak, right?

01:19 – 01:21
sandy
Yeah, let me, let me go over there.

01:26 – 01:29
sandy
You should have seen the Sunrise this morning that was beautiful.

01:30 – 01:30
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Oh, I’ve.

01:30 – 01:31
sandy
Done.

01:31 – 01:31
sandy
I.

01:31 – 01:31
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Bet.

01:33 – 01:35
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Well, good morning, everybody.

01:35 – 01:38
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
It is the top of the hour, nine o’clock.

01:39 – 01:45
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Welcome to 20 22, for those who don’t know me, Todd Smith, the owner of Level five Financial.

01:46 – 01:51
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
This is what has, only 20 21 was arc, kinda coffee chat.

01:51 – 01:53
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
We did some happy hours.

01:53 – 01:58
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
We’ve now rename this, too, ask or ask an advisor.

01:59 – 02:01
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I think that’s a little bit more telling to what this format is.

02:01 – 02:04
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, I couldn’t see the peaks, and sorry.

02:04 – 02:05
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I was starting to talk when.

02:05 – 02:07
sandy
No lock in it.

02:08 – 02:08
sandy
Yeah.

02:09 – 02:12
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, yeah, so welcome to ask an advisor.

02:12 – 02:12
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I.

02:12 – 02:13
sandy
Think we’re telling.

02:13 – 02:14
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
To what this format is.

02:14 – 02:23
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
This is not, for those of you who’ve never been here before, This particular format is really just a channel for people to drop in and ask questions.

02:23 – 02:30
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
If you don’t have questions, be what I call the proverbial fly in the wall and learn from other people’s questions.

02:30 – 02:35
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
If there aren’t questions, it’s nothing I’m gonna force and we’ll just drop off and get on with our day.

02:35 – 02:52
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I typically have some questions that other folks sent to me that couldn’t make it, or have come up recently, and just conversations day to day, so, so welcome, and feel free to jump in with any questions you may have.

02:52 – 02:56
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You can also put it in the chatbox box if you’re a little shy.

02:57 – 03:06
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
But as a pretty laid back, kind of format here, it’s not, like, I said, our formal webinar or education or anything like that.

03:06 – 03:15
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So typically, I’m here as you can see Tracy here, and I usually have another advisor or two, if they show up.

03:16 – 03:20
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So we’re just here as a team to support you in any way that we can.

03:21 – 03:23
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So So welcome.

03:23 – 03:24
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
It’s hard to believe.

03:24 – 03:27
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
It’s already mid January, where is the time going?

03:27 – 03:27
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Right?

03:28 – 03:29
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yeah.

03:31 – 03:33
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Well, let’s let’s kick this off.

03:33 – 03:39
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Does anybody have any questions or thoughts that they want to bring up to begin with?

03:40 – 03:49
Jamie
Just before we get into the questions, Todd’s wondering if you can hear me if I’m connected back and I couldn’t hear you originally so I dropped back out to make sure as I can OK.

03:49 – 03:51
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Ken Jeremy, Yeah, thank you.

03:51 – 03:52
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Can you hear me?

03:52 – 03:53
Jamie
Yeah.

03:54 – 03:56
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Sunny, sunny California.

03:56 – 03:58
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, Hey, Jason.

03:59 – 04:05
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So you’re muted if you’re trying to talk, but I can see you talking there, Jason, just so you know.

04:09 – 04:10
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So we have Utah.

04:10 – 04:16
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
We have Florida, and it looks like everybody else is probably Colorado, so we have a couple of states represented.

04:17 – 04:18
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So that’s good.

04:19 – 04:25
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Jamie, I’ll be in Florida again next month, but I’ll be up north, so one of these times, I’ll make it down closer to you, so we can visit.

04:26 – 04:28
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So anyway, does anybody have any questions?

04:29 – 04:32
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Any pressing questions or thoughts for the new year?

04:33 – 04:35
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Don’t make me choose somebody to speak.

04:36 – 04:37
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
What do you do, Karen?

04:37 – 04:41
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, Karen to Can I say this, Karen, that your professor to teach?

04:41 – 04:44
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
What do you do when your participants don’t participate?

04:44 – 04:47
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I guess participants participate or students?

04:47 – 04:48
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Do you call on them?

04:48 – 04:49
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Do ask probing questions?

04:51 – 04:59
Karen Hager Martinez
I do different things, and usually, I tell them I’m going to demonstrate wait time, which I don’t know if it’s funny to you guys, but it is funny to them visitor teaching thing.

05:00 – 05:01
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So how do you do that?

05:02 – 05:03
Karen Hager Martinez
I just wait farm.

05:05 – 05:07
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So awkward silence.

05:08 – 05:13
Karen Hager Martinez
And people get uncomfortable, somebody LTAC, but usually it is.

05:13 – 05:14
Karen Hager Martinez
And this is weird.

05:14 – 05:19
Karen Hager Martinez
Because it’s not a group that’s always together that makes it a little mess counter about preferably.

05:20 – 05:21
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Ok, well, that’s good.

05:21 – 05:25
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I don’t think I’ll put people through that, but I’ll take that into consideration.

05:25 – 05:28
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
The awkward silence might not go over too well.

05:29 – 05:32
Karen Hager Martinez
Quickly, somebody else speak, because people do not like it.

05:35 – 05:49
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Ok, well I have some questions and some topics I think we can talk about today, or remind you at the end, but we have another event next week on Thursday, week from today, at four o’clock PM Mountain Standard Time.

05:50 – 05:59
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
We have the agent in charge coming from the Colorado Bureau of Investigation to talk about cybersecurity, and all things fraught.

05:59 – 06:03
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So I think it should be very interesting and formative.

06:04 – 06:10
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
It’s one of those topics that is always timely, it never seems to change where we see things in the media.

06:10 – 06:14
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, that format is more educational.

06:14 – 06:16
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Should be about 45 minutes to an hour.

06:16 – 06:18
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I think we’ll have Q&A at the end.

06:19 – 06:21
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So hopefully, you can join then.

06:21 – 06:33
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I will also record that just like this, so I try to push these recordings out, either on YouTube or in an e-mail, for people that missed the question, or want to watch it separately.

06:34 – 06:35
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So tune in for that.

06:36 – 06:43
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Also, but I just want to give you a heads up, that we have letters going out here in the near future for you remember, every year.

06:43 – 06:47
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
For those of you that are clients of ours, we sent out a beneficiary letter.

06:47 – 06:58
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So that beneficiary letter is important just to make sure that all your beneficiary designations are correct for the accounts that we manage, as well as all accounts, insurance policies, et cetera.

06:58 – 06:59
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So it’s just another.

07:00 – 07:02
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
It’s a habitual thing we send out every year.

07:02 – 07:10
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Just as a reminder, that’s one of those things we don’t think about, until it’s too late, frankly, and that’s really the common theme in estate planning.

07:10 – 07:20
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, we will also be reminding you that if you haven’t done your estate planning, or you need help with estate planning, that’s something that we can facilitate and will need to set another meeting for that.

07:20 – 07:24
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, beginning of the year is kind of getting our affairs in order.

07:24 – 07:31
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, as your kind of advocate and coach, we’re kind of pushing things out kind of in that realm.

07:31 – 07:37
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
We’ll also be sending out an IRA letter for those of you that are looking for shelter’s before tax season.

07:38 – 07:41
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You’re getting all your tax documents, so you’ll be seeing your accountant soon.

07:42 – 07:57
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Don’t forget that you can still make an IRA contributions, should you wish to get another deduction or shelter some money, all the way up to tax filing deadlines, so it doesn’t have to be before 12 31 the previous year, so you have until April.

07:58 – 08:01
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Actually have until april plus extensions if you do exter.

08:01 – 08:03
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So a letter will be going out for that.

08:04 – 08:05
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So just a heads up there.

08:06 – 08:07
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, estate planning.

08:10 – 08:14
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You know, again, it’s, it’s a habitual thing I’m always going to recommend.

08:14 – 08:24
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
We talk about it during our one-on-one meetings but also it’s a call to action for our organization has one of our themes each quarter or each year, I should say.

08:25 – 08:34
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, one of the questions that came up recently was about a living, well, does everybody know where the living will is?

08:35 – 08:38
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yeah, OK, does everybody have a living will pretty much.

08:38 – 08:40
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yeah, OK.

08:40 – 08:41
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Now, OK.

08:41 – 08:44
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, if you don’t have Olivia and will, you probably should.

08:44 – 09:00
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So the main estate planning documents typically are your will your power of attorney for medical, power of attorney, for, for financial decision making.

09:00 – 09:09
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And then, you have the Living Will, or your advanced directives kind of call it two different things and that’s really expressing your wishes should something happen.

09:09 – 09:09
Jason B
To you.

09:10 – 09:10
Jason B
Ok.

09:11 – 09:15
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, I invited them today, but I don’t think they’re going to be able to make it.

09:15 – 09:21
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Maybe they have and they pro mind me sharing, but I do have a client that is having some medical issues.

09:23 – 09:25
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And that was one of their questions.

09:26 – 09:39
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
The she realized that they have directives or a living well, that they executed several years ago, did not really suit what the circumstances.

09:40 – 09:49
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So this particular person needed a feeding tube, but in the advanced directives or the LivingWell, that’s where you designate.

09:49 – 09:54
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I do not want to be given nutrition or I don’t want to be resuscitated.

09:55 – 10:03
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Well, they had indicated that they didn’t want He did not want to be given artificial, new nutrition.

10:04 – 10:10
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So you can imagine, He was in the hospital, and in order to come home, we had to have a feeding tube.

10:11 – 10:14
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And she got our estate planning document, and it was pretty clear.

10:14 – 10:19
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So she called me and said, Todd, what do I do?

10:19 – 10:22
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Can I just cross this out and and re-elect this?

10:22 – 10:24
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And I said, Unfortunately, you can’t.

10:24 – 10:27
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Um, but also, I’m not an attorney.

10:27 – 10:30
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So let me tell everybody that I’m not an attorney or and I don’t.

10:30 – 10:34
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I can’t give you legal advice, we don’t draft documents.

10:34 – 10:46
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
But the reality is when you have something in an executed document like that, you’ll have to redraft, You’ll have to avoid any previous documents and have it redrafted.

10:46 – 10:56
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So if you wanted to make a change on something, that you can’t just cross it out and initial it, so you typically have to go back to your, back to your attorney.

10:56 – 11:15
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
But the important part of this particular case was that her situation, I should say, was that the client was fully conscious, fully aware, and for fully capable of making medical decisions on his own behalf.

11:16 – 11:29
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So you need to, what was confusing, I think, to them, is that the advance directive in the medical power of attorney really doesn’t go into effect until, at which point, he could not make those decisions.

11:30 – 11:34
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So all he had to say was, teller’s medical providers.

11:34 – 11:38
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yes, I want Feeding Tube.

11:39 – 11:40
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
This is the medical care I want.

11:41 – 11:47
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, that doesn’t really go into effect unless he was highly medicated, which is a possibility or to, you know, you’re or is unconscious.

11:47 – 11:52
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And that power of Attorney or medical power of Attorney Springs into effect.

11:53 – 12:04
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Because what happened is that power of Attorney Springs into effect in this case, The wife would be making the medical decisions and then she uses the advance directive or living Will is a guide to make those decisions here where his wishes.

12:05 – 12:15
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And, it’s a hard thing, but that’s the job of the power of attorney, to really follow the wishes I was outlined in that the living world.

12:15 – 12:16
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Does that make sense to everybody?

12:18 – 12:21
Karen Hager Martinez
It does, but I have a question just because there’s something A friend told me recently.

12:21 – 12:27
Karen Hager Martinez
So that’s a guide for them, but they’re not legally bound to do what it says in there.

12:27 – 12:28
Karen Hager Martinez
Is that true?

12:30 – 12:40
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
They do have a responsibility to follow it, and that the medical community has a copy of it, They, they pretty much are, as far as I know.

12:41 – 12:45
Karen Hager Martinez
Ok, That’s interesting, because my friend said, the doctor basically said, You don’t have to follow this.

12:45 – 12:47
Karen Hager Martinez
And we don’t think should shed right now, and they didn’t.

12:48 – 12:55
Karen Hager Martinez
So maybe that’s the, the difference between theory and in practice, in that particular case.

12:55 – 12:59
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
It could be, was it was it here in Colorado, is in Utah?

12:59 – 13:01
Karen Hager Martinez
We think, Colorado, yeah.

13:02 – 13:04
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Well, I don’t know for sure.

13:04 – 13:05
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Like I said, I’m not an attorney.

13:05 – 13:07
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I will check on that, because I’d like to know, too.

13:08 – 13:13
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I talked to the attorney for my clients about this situation.

13:14 – 13:17
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And he seemed to think it was pretty binding.

13:19 – 13:19
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
No.

13:19 – 13:24
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
But who’s to say, Ameen, the client, in this case was talking about?

13:24 – 13:25
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Not just saying, I don’t know have.

13:25 – 13:31
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I don’t have a living Well, I don’t have, I don’t know, where it is now, so then that becomes moot.

13:31 – 13:32
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Like who’s going to prove that right.

13:32 – 13:37
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So I suppose you could go to court whatsapp.

13:37 – 13:43
Karen Hager Martinez
It’s just a hard thing I mean that the daughter in this case was like, What am I supposed to do?

13:43 – 13:48
Karen Hager Martinez
I mean it put her and probably an even more uncomfortable situation when the doctor said yeah, yeah.

13:51 – 13:56
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I’ll double-check on that, but my understanding is pretty binding, because what’s the point of having it?

13:57 – 13:57
Karen Hager Martinez
Great, yeah.

13:59 – 13:59
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I know my.

14:00 – 14:09
Jason B
Sister husband wouldn’t go through with my sister’s wishes in the well and so, she ended up having to go I mean, they’re in love.

14:09 – 14:16
Jason B
They’re you know, they’re married for a long time, but he refused to go with her wishes, so she had to go through another person.

14:16 – 14:27
Jason B
So, you really have to kind of almost like corner that person and say, this is truly what I wish and maybe even recorded on video and Stuart somewhere, something, you know, I don’t know.

14:29 – 14:39
Jason B
You know, I told my, my, my beneficiaries that exactly what I wanted and how I wanted it, and recorded on a video then we got it stored on both of our files.

14:41 – 14:44
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yeah, if you actually brought this up last spring, I think Jason, you.

14:44 – 14:45
Jason B
Asked this.

14:45 – 14:46
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Question and one of the sessions.

14:46 – 14:47
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yeah.

14:47 – 14:50
Jason B
I got all of this year or last year, I guess, now.

14:51 – 14:52
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yeah, it.

14:52 – 14:53
Jason B
Was a big It was a stressful situation.

14:53 – 14:55
Jason B
But it was good.

14:55 – 15:02
Jason B
I felt really good when I was done, but it was, it was, you know, something you just don’t think about.

15:02 – 15:06
Jason B
There were a lot of questions, like, oh, I don’t know, you know, let me think.

15:07 – 15:15
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yeah, I quoted you actually maybe a month or so ago in a meeting and I said I had a friend and client say, I didn’t know.

15:15 – 15:16
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
There’s so many different ways to die.

15:17 – 15:18
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Right.

15:18 – 15:24
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You’re telling me that after you’ve met with the attorney, you’re overwhelmed, like all of the potential scenarios, Right?

15:24 – 15:25
Jason B
Exactly.

15:25 – 15:27
Jason B
But, I mean, it was good.

15:27 – 15:35
Jason B
It was, it was something that I was, you know, I had anxiety about, but when I was done, it was like, OK, I feel good about this.

15:35 – 15:39
Jason B
I’m actually more comfortable about dying now than I was before.

15:39 – 15:46
Jason B
Because knowledge is, It was really good, I didn’t know, and I had anxiety about what I did not know.

15:47 – 16:00
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I think it’s a great point, Jason Ashworth, worth mentioning that, all things in life and financial, it becomes stressful when, we don’t know what we don’t know, or we don’t have our affairs in order, when we have met in order.

16:00 – 16:02
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
We get that clarity and sense of control.

16:04 – 16:04
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
It’s less.

16:04 – 16:09
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You know, we’re less anxious about it, so that’s, that’s my job.

16:09 – 16:11
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
In a nutshell, is really coaching people.

16:11 – 16:13
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
They get the things done that they need to do.

16:14 – 16:15
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So I’m glad you did that.

16:15 – 16:15
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
That’s good.

16:17 – 16:28
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
If we did, I think that I think the statistics are still pretty dismal I think like, I want to say, I can’t remember, 70% of households don’t have any estate planning documents, or something like that.

16:29 – 16:40
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So that’s why it’s a call to action, you know, the better years to remind people, If it’s not you, then it’s your family, or your friends, or your colleagues.

16:41 – 16:46
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
That’s why we partnered with a firm to make it easier for people and less expensive.

16:46 – 16:54
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So for people that don’t go to the traditional attorney, we do have a solution that we can help people at least get it down.

16:54 – 16:56
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You know, because it’s important, it’s important.

16:57 – 17:00
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
But, that’s good, Karen, I’m going to check on that.

17:00 – 17:03
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You have me curious what the real legality?

17:03 – 17:08
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And so I’m going to call an attorney, or e-mail him on that big Israeli finding and how does it how does that work?

17:10 – 17:10
Karen Hager Martinez
Yeah.

17:10 – 17:21
Karen Hager Martinez
It would be interesting to know, and I have to say, I’m gonna say this because maybe don’t embarrass me and defined through I still have the packet that you send us last year kitchen, but we’re gonna do it.

17:21 – 17:22
Karen Hager Martinez
This time pressure.

17:23 – 17:27
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Ok, I’m gonna hold you to that yeah, this is a recorded, by the way, Karen, I have proof.

17:30 – 17:31
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Now, that’s great, That’s good.

17:32 – 17:35
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I don’t want to be a broken record, but it is important stuff.

17:37 – 17:44
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Know, I’ve been in the business, not long enough, I don’t want to be the advisor that gets that call, That we never did it.

17:44 – 17:45
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
No, never did.

17:45 – 17:51
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
What we said Todd, nor now are faced with this circumstance, so I don’t want to see that.

17:51 – 17:54
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
For any of my clients and their families, it’s can be pretty ugly.

17:56 – 17:57
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, good.

17:59 – 18:01
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Any questions around estate planning at all?

18:03 – 18:05
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Any thoughts about that?

18:07 – 18:11
Jason B
What, what is the limitations on a Roth IRA?

18:11 – 18:17
Jason B
That’s still, you know, for financial, the maxed out for for adjusted growth?

18:18 – 18:19
Jason B
No, you remember what that is?

18:20 – 18:22
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
It’s 196 when.

18:22 – 18:23
Jason B
96 were single.

18:24 – 18:24
Jason B
I.

18:24 – 18:27
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Think it went back up on me, I can pull it up for a while we’re talking.

18:27 – 18:28
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
But yeah, mm hmm.

18:32 – 18:34
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I will send you the workflow.

18:34 – 18:37
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
There’s a, there’s a checklist on that that I will send you?

18:38 – 18:39
Jason B
Yeah, that would be good?

18:39 – 18:43
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
That I think, is probably a pretty good depiction of that.

18:44 – 18:45
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You have to have earned income.

18:46 – 18:52
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So be aware for those that are getting passive income, it has to be considered earned income.

18:52 – 18:55
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I think you do, Jason, the way of saying structured, even though you’re kinda retired.

18:56 – 18:59
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Um, so, just be aware of that.

19:00 – 19:00
Jason B
Ok.

19:01 – 19:07
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Everybody understand the difference between Roth and a traditional IRA?

19:10 – 19:16
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Nobody wants to admit whether or not, I think most people probably do, but I’m going to mention, anyways.

19:17 – 19:23
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So a traditional, when we talked about making an IRA contribution before tax filing deadline, I said where you could get a deduction.

19:23 – 19:36
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
There’s limitations in terms of, um, how much you can deduct each year, and how much you can contribute to it, based on whether you’re covered by 400 K or a retirement plan to work, et cetera.

19:37 – 19:43
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
But, money that goes into a traditional IRA is deductible in the current tax year.

19:43 – 19:44
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Any money.

19:44 – 19:48
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Once that money goes into the account, the money grows tax, deferred, show.

19:48 – 19:54
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Any earnings, interests, capital gains, etcetera, It’s all deferred until you start taking distributions on the back end.

19:56 – 20:09
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So it gets a little goofy, like I mentioned this, you have one set of rules, if you don’t have an employer sponsored plan through a job, but the forward carrier through your own business, you have one set of rules for that.

20:09 – 20:16
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
If you’re not covered, then you have another set of rules, um, for that scenario.

20:16 – 20:19
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, something to keep in mind.

20:19 – 20:20
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Now, Roth.

20:20 – 20:26
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
On the other hand, there’s really just kind of a traditional IRA on its head.

20:26 – 20:33
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So money that goes into a Roth is not tax deductible in the current year, so you don’t get to write that off on your taxes.

20:34 – 20:40
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Any growth inside of the account still is not taxed year to year, so you don’t get attended a nine or anything like that.

20:41 – 20:43
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Um, and.

20:44 – 20:44
sandy
Once.

20:44 – 20:46
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
The money comes out, it’s all tax free.

20:47 – 20:49
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So that’s a nice benefit.

20:49 – 20:50
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I like the Ross.

20:50 – 20:52
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I’ve been around since 97.

20:53 – 21:05
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
But they’re probably underutilized, because most people kinda follow the mantra of the duct and defer to doctor, refer your earning on the money to deduct what you can each year and defer to a later date.

21:06 – 21:12
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
The problem is a lot of people are ending up in retirement with sizable amounts of money that is yet to be taxed.

21:13 – 21:27
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So we look at contributing to raw type vehicles instead, And not only is that a, an income stream, that’s already been tax, It will be tax free at the back end is really good for air.

21:27 – 21:35
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, if and the new rules for inheriting an IRA, make it even a little bit more favorable for us.

21:35 – 21:38
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So maybe we’ll just cover that real quickly here.

21:39 – 21:41
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
But let me show you the, the checklist.

21:44 – 21:46
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Real quick and I misspoke, I think.

21:46 – 21:46
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
It’s.

21:49 – 21:53
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Me show you this here, Jason, change.

21:55 – 21:57
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So there’s thresholds.

22:00 – 22:09
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Per single, always thinking married, filing jointly, the thresholds went up and there’s kind of a tier, but I will send you this, but I will show it to everybody.

22:10 – 22:19
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Now, as a visual depiction of how you determine whether you can contribute to a Roth IRA or not.

22:21 – 22:24
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, everybody see that?

22:24 – 22:25
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
He’s here, OK.

22:25 – 22:26
Jason B
Yes.

22:27 – 22:29
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I’ll shoot this off to you, but you started here.

22:29 – 22:31
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Do you or your spouse have earned income?

22:31 – 22:32
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yes.

22:32 – 22:33
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Did you make any?

22:36 – 22:37
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yes or no.

22:37 – 22:40
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Then it asks your tax filing status.

22:40 – 22:41
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
In your case, you’re single.

22:42 – 22:42
sandy
Then.

22:42 – 22:43
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
It looks at.

22:43 – 22:43
sandy
Modified.

22:43 – 22:45
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Adjusted gross income.

22:45 – 22:50
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Essentially, it’s you’re just, I hear a vicious dog or is that wind over there, Sandy?

22:51 – 22:54
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
She has a lab, I can’t imagine, a vicious dog.

22:55 – 22:59
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yes, so, that It’s, actually, if you’re less than 120, you can make the full contribution.

23:01 – 23:04
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Then, you have partial contributions of the ones.

23:06 – 23:07
sandy
Yeah.

23:08 – 23:09
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So that’s sort of single filers.

23:10 – 23:12
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
For joint.

23:12 – 23:14
sandy
What.

23:14 – 23:17
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Used to be 196?

23:17 – 23:19
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I was a number that stuck in my head.

23:21 – 23:25
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
This is the threshold you can make for Roth IRA contributions.

23:25 – 23:32
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Up to here, it’s a partial, and then over the over the 214, you can’t make any IRA or Roth IRA contributions.

23:35 – 23:38
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Then, on the right here, it talks about what the limit is.

23:39 – 23:47
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
For those over age 50, you always have a catch up contribution, um, over one thousand dollars that you can make.

23:49 – 23:56
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Now, it’s worth saying that those, those of you are people out there that are self-employed, or have self-employed income.

23:57 – 24:07
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
There, you can always contribute to a Roth through your, your own company plan without any limits, So I’ll use an example.

24:07 – 24:09
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
If you have a soul, OK.

24:09 – 24:19
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
A lot of times we create a solo quotes, and what’s called an individual, or Solo 400 K, it’s very similar to a 403 beer for one K plan, sponsored by big corporations.

24:20 – 24:22
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
However, you can sponsor it for yourself.

24:23 – 24:36
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, for a lot of small business owners, typically, that it’s just one person, or it’s husband and wife, will, will establish a 4 1 K plan for them, and they can contribute as both an employee and an employer.

24:37 – 24:41
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, OK, it can have a Roth component to it.

24:42 – 25:03
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, just like you can contribute on a pre-tax basis for both pre and post tax, or pre, pre-tax, and Roth, or, I’m sorry, for, Let me back up, just like you can, contribute, as an employer and an employee, on a pre-tax basis, you can also do the employee portion as a Roth.

25:04 – 25:14
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, that is a, that is not a loophole necessarily, But that’s a workaround for those that have self employment income, because you’re not subject to these income limits.

25:15 – 25:32
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Like to point that out, the other, the other one, the other kind of technique that maybe some of you heard about, if you are, if you’re bumping against these income limits, but you want to put money into a Roth, you can do what is called a backdoor Roth strategy.

25:32 – 25:34
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Anybody hear that before?

25:35 – 25:40
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So a backdoor Ross was say, let’s just use this example over here.

25:41 – 25:44
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And my income is 150, I’m a single filer.

25:46 – 25:51
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Based on the rules are ineligible to contribute to a Roth the backdoor Roth.

25:51 – 26:07
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
There’s there’s some nuances to it, of course, but essentially, the backdoor Ross strategy is you you, instead of contributing to a Roth, because I can’t, I contribute to a traditional IRA deductable type IRA.

26:07 – 26:10
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Then I immediately do what’s called a Roth conversion.

26:11 – 26:18
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, I make the contribution, too, the, the traditional iron that I immediately converted to a Roth.

26:18 – 26:24
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Now, when you can do a Roth, what’s called a Roth conversion, there’s no income limits, so that as a loophole, kind of.

26:26 – 26:32
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Way for people want to get money into raw, don’t have maybe self employment income, Their income is too high.

26:32 – 26:34
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
There is a way to still do that.

26:34 – 26:36
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, just be aware of that.

26:37 – 26:39
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Um, that makes sense.

26:39 – 26:40
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I explain that, OK?

26:47 – 26:49
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
All right, Jason, so you’re good.

26:49 – 26:50
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Any others?

26:50 – 26:54
Jason B
That’s what we’ll talk later on on a little more details on some of that stuff.

26:55 – 26:59
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I’ll send you this, and I’ll send you stuff on conversions and things like that.

26:59 – 27:00
Jason B
I appreciate it.

27:01 – 27:09
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yeah, we’ll talk about personal items off of the call for anybody that has something specific to them, or their situations.

27:12 – 27:14
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Ok, I think Frank just joined us.

27:17 – 27:17
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
It’s a.

27:18 – 27:27
Karen Hager Martinez
Question about that, so if you’re going to do, when you say, You didn’t have to do it by december 31st, but you have to do, Before you file this year, right, By.

27:27 – 27:29
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
The filing deadline, yeah.

27:29 – 27:30
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
But you have to April 15th.

27:33 – 27:34
[speaker unknown]
Yep.

27:34 – 27:35
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Now that That’s different.

27:37 – 27:37
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
That’s different.

27:37 – 27:47
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
If you’re using a self-employed type account, but for on the individual type retirement accounts, yes, you always have until your tax filing deadline.

27:51 – 27:53
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
It gets goofy with the employer plans.

27:54 – 27:56
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
It depends on the contributions.

27:56 – 28:08
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I don’t know that I want to go down that rabbit hole, but I’m happy to answer that for any, typically any individual retirement type account you have until April 15th, or even the deadline in October, if you extend.

28:11 – 28:17
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Ok, so, I will send you that, I will stop sharing my screen.

28:18 – 28:19
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Hmm.

28:31 – 28:31
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
All right.

28:31 – 28:35
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, we have, we have about a half an hour.

28:37 – 28:41
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I thought there was two questions that came up recently that I would.

28:44 – 28:48
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I guess, I guess, really one issue that was asked frequently.

28:48 – 29:02
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And maybe we will talk about, in general terms, what issues we should be looking at just going into 2022 and kinda tax season in general, just as a conversation piece.

29:02 – 29:03
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So.

29:06 – 29:09
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Some of you either asked, Are You, actually, have purchased?

29:12 – 29:15
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
An annuity, and the question is, does that fit into your financial plan?

29:15 – 29:18
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, I see that in popular media.

29:18 – 29:24
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
People asked me about it and I just thought we would address that really quickly.

29:26 – 29:29
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Does everybody know what an annuity is on the call?

29:30 – 29:31
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Pretty much.

29:32 – 29:32
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yeah.

29:32 – 29:39
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Ok, so, some of you have heard me say this, that I was kind of anti annuity for many, many years.

29:40 – 29:52
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And the reason was, there is very good salespeople out there, and they get very nice commissions by selling them, and they run around with the proverbial hammer.

29:52 – 29:56
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
That’s their only tool that they have, and everything looks like a nail, right?

29:56 – 30:02
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, the, the expenses, and the inherent conflict of interest.

30:02 – 30:13
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Um, because of that, a lot of the major insurance companies has had this Salesforce going on and pushing, and I show a lot of people put in the news that never should have been.

30:14 – 30:28
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So for many years I was trying to get people out of annuities and save them, you know, anywhere from 1.5 to 3% of expenses a year because they were just put in a new lease incorrectly.

30:29 – 30:36
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You’ve probably heard me make the joke that it’s, you know, saying all annuities are bad or like saying, all pitbulls are bad dogs, right?

30:36 – 30:38
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
It’s, that’s not true.

30:39 – 30:51
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
There’s good annuities and there’s bad annuities and it depends on the circumstances, your particular circumstances, et cetera, So there’s two broad camps of annuities.

30:51 – 30:53
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
One is a variable annuity.

30:53 – 30:54
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
One is more on the fixed.

30:55 – 30:56
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
The Virgo.

30:56 – 30:59
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Anyways, I tend to tell people to stay away from their soul.

31:02 – 31:08
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
A regular investment with stocks and bonds, but they have a tax wrapper and insurance wrapper around them.

31:10 – 31:18
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
In my experience, those, they’re just expensive investment products, but they’re really insurance.

31:18 – 31:20
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
People really don’t need that insurance component.

31:20 – 31:21
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
They’re sold as well.

31:21 – 31:22
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You have a bottom.

31:23 – 31:27
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You have downside protection with upside potential.

31:28 – 31:38
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
But the numbers really don’t work out because when you peel back the layers a lot of those variable annuities, you have, the death benefit is about 1.5% per year.

31:39 – 31:52
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You have some riders that might be another half a point, or three quarters of a point, and then the underlying investments themselves, the mutual funds that they use, can be well north of 1%.

31:53 – 31:55
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, think about this way.

31:55 – 32:04
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
If your internal expense of an annuity is 3%, you’re making, even in a good market year, you’re making 8, 9, 10%.

32:04 – 32:11
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You’re you’re losing your home, you’re taking a big haircut, And that takes it takes its toll over many years.

32:12 – 32:13
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, that’s a variable.

32:13 – 32:19
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Usually, shy away from the other type of annuity is a fixed annuity type.

32:20 – 32:24
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And fixed annuity is, think of it as a step up.

32:24 – 32:26
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
From money markets and CDs.

32:27 – 32:30
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
There aren’t subaccounts, necessarily, with investments.

32:31 – 32:33
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
They’re much more cost effective.

32:34 – 32:42
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
But they’re there nudity where it’s not pay to the performance necessarily of any economic market.

32:43 – 32:51
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So those are ones that I think people should consider only in the realm of maybe the retirement space, OK?

32:51 – 32:59
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So for those getting into, either you’re approaching retirement or you’re in retirement, I think there’s two considerations.

33:00 – 33:06
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
This is, this is how I start the conversation, anytime separate talks is one.

33:06 – 33:11
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
There’s the investment component, then two, there’s the longevity component.

33:11 – 33:20
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Ok, so in retirement, there’s, there’s a host of risks that we try to reduce And those are two of them, the investment risk.

33:21 – 33:25
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Sometimes it’s seek, what they call sequence of return risk.

33:25 – 33:29
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And then the other is that longevity risk.

33:29 – 33:41
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So as you know, if you think of back till 708, now kind of the worst-case scenario, hopefully we don’t see that again in any of our lifetime.

33:41 – 33:50
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
But we may, really, any type of asset class, other than cash, were significantly down kind of an economic meltdown.

33:50 – 33:53
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So there was really no place to have your money.

33:54 – 34:05
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, but even in a more tempered kind of bear market, you can easily look at, in a well diversified portfolio, double digit negative returns.

34:06 – 34:13
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So if you’re an investor who most people are, you really can’t diversify away from that economic risk, right?

34:13 – 34:15
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Or we’re always gonna go through cycles.

34:16 – 34:29
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, the only way to avoid the relay is to be not to be an investor and sit on the sidelines, but we all know that the time that I’m figure out when to be an investor, when not today, is pretty much impossible.

34:29 – 34:37
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, something that’s middle of the road is an asset class that really is not linked to that economic cycle.

34:38 – 34:45
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
An annuity fits into that from an investment standpoint because it’s really just a covenant or a contract between you and an insurance company.

34:46 – 34:54
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, whatever happens in the economic landscape, really doesn’t affect a portion of money that you have in that.

34:55 – 34:57
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, it minimizes the investment risk.

34:57 – 35:02
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
If you think you have stocks, bonds, real estate, Precious metals, whatever.

35:03 – 35:09
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
That’s just another asset class to add to the mix to give a little bit more buoyancy to your portfolio.

35:09 – 35:13
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, especially when you’re in the spending mode, you’re not.

35:13 – 35:16
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You’re not experience a hugely depressed portfolio.

35:17 – 35:23
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You can imagine if, know, people in the nineties that were invested incorrectly, or even over 708, they’re invested incorrectly.

35:23 – 35:25
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
They were down 40 or 50%.

35:26 – 35:31
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Can you imagine if you’re retired and spending from a portfolio that was depressed 50%?

35:32 – 35:35
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So there’s a place for that type of annuity just from an investment standpoint.

35:35 – 35:48
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I think if it’s, if it’s the right company and it’s cost effective and so forth, then there’s the longevity kind of risks that we see in retirement and longevity risk really is, am I going to run out of money?

35:49 – 35:50
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Am I going to outlive my money?

35:50 – 35:52
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, that’s a big concern for a lot of people.

35:53 – 36:03
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And that kinda ties into that, where we can, what we see, statistically, overall, a huge data set over a century of data.

36:03 – 36:14
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
If you compare portfolio with traditional asset classes, and then you add a fixed type component, similar, doing …

36:14 – 36:19
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Apples to apples in the same timeframe over the same period.

36:19 – 36:25
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
The longevity actually has increased by having that type of component.

36:25 – 36:35
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, for those, where that’s a concern, and that’s really my concern, is making people, making sure people don’t run out of money that can make sense from that vantage point.

36:37 – 36:40
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I mentioned sequence of return or assets part of it.

36:40 – 36:44
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, Say you retire in 20 22.

36:44 – 36:47
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
We’re overdue for a probe pullback, right?

36:47 – 36:50
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
We haven’t had a really bad market for a long period of time.

36:53 – 36:56
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You retire in 20 22, and it’s just bad luck.

36:57 – 37:06
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
The economy goes into a tailspin, and now all your investments are down, right at the time that you’re turning on your distributions.

37:06 – 37:14
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You can imagine, hopefully, it’s not as drastic as a 40% drop, but even a depressed portfolio in your spending.

37:15 – 37:18
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
There’s going to affect that longevity, possibly, right?

37:18 – 37:27
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You’re just that’s different than if you started retirement and as positive, you know, a couple positive years, and then there’s a negative, that’s what they call sequence, or return risk.

37:28 – 37:29
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, we can’t control that.

37:29 – 37:42
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
However, if you carve out some, and your emergency reserves are fixed type bucket that minimizes the risk a little bit, and then enhances your eventual income stream, is, of course, your life.

37:43 – 37:47
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I just want to address that, I have that question quite a bit.

37:48 – 37:52
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I won’t say I still love it the race, but some of them make sense.

37:53 – 37:57
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I’m a dog lover so you know, pitbulls aren’t so bad about that.

37:59 – 38:00
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Any questions?

38:00 – 38:00
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Anybody know?

38:01 – 38:20
Jason B
If, if, if apple, Apple, if you had the stocks through you and that pay dividends of, you know, if you were, if you were concentrating most of your investment on a dividend versus concentrating the same amount into an annuity, What do you think would be the difference with that?

38:21 – 38:21
Jason B
No.

38:21 – 38:27
Jason B
In a down cycle, what would a dividend payout a little bit more or would be a safer bet.

38:28 – 38:30
Jason B
What’s your opinion on that?

38:30 – 38:33
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Well, I think dividends are going to pay better.

38:33 – 38:40
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Typically, it just depends where interest rates are because the annuity annuity payments are based on the prevailing interest rates.

38:40 – 38:43
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, low interest rate environment, annuity is going to pay less.

38:44 – 38:53
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Then dividend paying stocks, potentially, but dividends are only going to pay or be paid based on the profitability of the company and what they declare, right?

38:53 – 39:06
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, it’s not totally apples to apples because there’s no guarantee that the company is going to pay dividends And what that would be where an annuity is guaranteed contractually guaranteed by the insurance company.

39:08 – 39:09
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, it’s a little hard.

39:10 – 39:18
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Furthermore, I typically don’t recommend dividend stocks as an income stream for in retirement.

39:20 – 39:30
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So if you look at the, if you look at the research, and I have decades of real life experience that that shows, there’s two.

39:30 – 39:44
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
There’s, there’s two bending approaches, and that’s one of the incorrect things that are retirees do in my opinion but thurs there’s finding yield or finding dividend to create an income stream, which you’re kind of alluding to JSON.

39:44 – 39:48
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And then there is what’s called a total return income stream.

39:49 – 39:52
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Ok, so I’ll compare the two.

39:52 – 39:53
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So.

39:56 – 39:58
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Dividend yield is exactly what you’re talking about.

39:58 – 40:02
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
It could be a bond that’s paying yield, Ryan, that’s giving you an income stream.

40:02 – 40:04
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
It could be a stock that’s paying dividends.

40:05 – 40:10
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So if you have a stock that’s a 4% or 3% dividend yield, that’s the income coming out to you.

40:13 – 40:19
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
The problem with that is it’s not really keeping up with and there’s no inflationary hedged there.

40:20 – 40:29
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And what I see a lot of people end up doing is that they have because they need more income to keep up with inflation or to give them a lifestyle.

40:29 – 40:32
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
They want they become yield chasers.

40:33 – 40:39
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And they don’t they don’t fully understand the underlying risk associated with that particular investment.

40:40 – 40:50
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, I can go find you, a high yield bond, paying 8% right now, but I don’t think you’d want that, because it’d be a jump on that could default.

40:51 – 40:51
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
All right.

40:52 – 40:59
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, I can look at a new client, or perspective clients, portfolio that’s in retirement, and that’s how they’re doing it.

40:59 – 41:05
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I can guarantee that the underlying investment, that they have, the yield looks OK.

41:06 – 41:10
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Um, so, that usually doesn’t work particularly well.

41:10 – 41:17
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
It doesn’t work particularly well in a low interest rate environment, where bonds really are dealing very much at this point, right?

41:18 – 41:29
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
A total return, nobody can talk more about those to Jason at some point, but a total return approach really, is using all components of return to satisfy the income you need you want.

41:30 – 41:41
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, you’re actually, if you look at any investment, you have three components of potential return, there would be interest dividends and capital appreciation.

41:42 – 41:46
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Then you’re using a portion of all lows to actually create an income stream that you need.

41:47 – 41:53
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And that is a much more sustainable way of providing income over a long period of time.

41:53 – 42:02
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And it also enables you not to risk chase, you know, our yield chase, and you’re minimizing risks from an investment standpoint at the same time.

42:03 – 42:09
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, we have always advocated the total return spending approach where you’re taking a little bit of both.

42:09 – 42:22
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
What we’re more concerned about is that, and that kind of conversation is not what is the yield, but what is a sustainable spending rate over a 20, 30 year period?

42:23 – 42:24
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
All right.

42:24 – 42:35
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, if you’re if you’re getting income, dividends, interest, capital appreciation on a number of different type of investments around the world.

42:36 – 42:46
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
What is a sustainable rate distribution that you somebody could reasonably take year in and year out and never run out of money?

42:46 – 42:47
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So that’s where our focus is.

42:48 – 42:52
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And that retirement conversation, that makes sense.

42:53 – 42:53
Jason B
Thank you.

42:54 – 42:57
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And I will just go one step further.

42:58 – 43:06
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Some of you will recall from our periodic meetings, we’ll have when this spring coming up, so hopefully you all sign up.

43:08 – 43:16
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
But you’ll recall that I initiated or kind of showed you the guardrail P slash here, that ring a bell to anybody.

43:18 – 43:36
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So the guardrail piece is really of a way, it’s a scientific way of establishing that optimal distribution rate so that you don’t run out of money, but you also pass on, or the mattress stuff full of cash.

43:36 – 43:36
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Right?

43:36 – 43:40
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So it’s, it’s trying to find that happy medium.

43:41 – 43:43
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And the scholarship really was interesting.

43:44 – 43:46
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Gosh, it’s probably been 30 years now.

43:46 – 43:48
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
It started at 4%.

43:48 – 44:01
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And it was, the concept was, you can spend 4% over a year adjusted for inflation, and that will last no, 30 years, with a high probability of success, regardless of what happens in the markets.

44:02 – 44:03
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
That’s evolved a little bit.

44:04 – 44:09
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Two more enlists, instead of a static kind of distribution or a more dynamic.

44:09 – 44:12
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
We’re monitoring that and adjusting it every year.

44:13 – 44:26
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, so that you avoid, because 4% could be too conservative, and then you have retirees not really living the life that they want because they’re not spending enough, right?

44:26 – 44:33
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, you know, then you can ratchet it up by, you know, five, know, maybe up to 5%.

44:34 – 44:45
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
But then the annuity ties into that, because I have I’ve seen annuities with a yield, know, at 5 or 6 percent the income stream and 5 6 percent.

44:45 – 44:46
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Even in this market.

44:47 – 44:48
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So you kinda Cabo.

44:48 – 44:49
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
All that together.

44:49 – 44:58
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
They kind of arrive at a more dynamic approach to spending, not yield, and then you revisit kinda re, you know, rinse and repeat every year, right?

44:58 – 45:02
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So when we hit that next economic cycle, we might have to adjust downward.

45:04 – 45:12
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
In good years, like 2021, most most of us have had, you know, 20 plus rates in return.

45:12 – 45:14
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You would be able to spend maybe a little bit more.

45:14 – 45:15
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Right.

45:17 – 45:18
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
That makes sense.

45:21 – 45:27
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Ok, Can you should sit down, are you at a standing desk like me, move my standing desk?

45:28 – 45:28
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yeah.

45:30 – 45:31
Karen Hager Martinez
Content.

45:32 – 45:32
Jason B
I.

45:32 – 45:34
Karen Hager Martinez
Said, Yeah, I’m in and out.

45:36 – 45:37
Karen Hager Martinez
Yeah, so.

45:38 – 45:38
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You’re basically.

45:39 – 45:40
Karen Hager Martinez
Getting on.

45:40 – 45:40
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
My bike.

45:40 – 45:42
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You get now, you’re getting on the.

45:42 – 45:53
Karen Hager Martinez
It just took the fat, like, yesterday, and that’s the next place I’m going after I do the laundry is to take that idea, and again, it’s gonna be a day to day and snow tomorrow.

45:54 – 45:55
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Are you getting snowed?

45:56 – 45:56
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I didn’t know.

45:59 – 46:01
Karen Hager Martinez
And really hoping for.

46:01 – 46:04
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
That’s beautiful here today to phone springlike, so it was nice.

46:05 – 46:06
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Well, good.

46:06 – 46:09
Karen Hager Martinez
It has felt like Spring, What’s.

46:09 – 46:09
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
That?

46:10 – 46:11
Karen Hager Martinez
And I just felt like Spring.

46:12 – 46:13
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yeah, that’s nice.

46:14 – 46:23
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, OK, I think that’s all I had, I had a couple other issues, but we’re running out of time, but does anybody have any thoughts or questions before we go?

46:26 – 46:30
Jason B
Mean, nobody else does, I’d love to have your opinion again on that.

46:30 – 46:37
Jason B
The 529 A plan versus, you know, just setting up you saved my grandson.

46:37 – 46:55
Jason B
You know, I wanna, I wanna find out if a 529 a plan is the right sequence, or would possibly a direct account on the stocks and bonds In a, you know, an 18 years from now, What would be the better pay out, better options.

46:55 – 46:59
Jason B
You know, if he doesn’t go to school, or if he does go to school, you know, college or whatever.

46:59 – 47:02
Jason B
You know, how, how, that would all work.

47:02 – 47:04
Jason B
Because I’m right in the middle of that right now.

47:04 – 47:05
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Finding out.

47:05 – 47:06
Jason B
What we’re gonna do.

47:06 – 47:11
Jason B
And, I know somebody probably going to be giving you a call, Todd about that as well.

47:11 – 47:12
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yeah, yeah.

47:12 – 47:18
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Happy to be a resource for your daughter, or whatever, the new family, And I mentioned that to everybody.

47:18 – 47:19
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
That’s why we’re here.

47:20 – 47:24
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You know, am I might call this year for 2022 is how do we create better content?

47:24 – 47:31
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You know, contribution, you know, we want to contribute more, too, Our clients and the community as a whole.

47:31 – 47:33
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, always happy to be a resource.

47:34 – 47:45
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
But, yeah, that the answer probably the quick answer, and you and I can, can spend a little bit more time on this JSON, too, is probably both the 529 Plan and something else.

47:45 – 47:48
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, he’s so young, right.

47:48 – 47:49
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
How’s he now?

47:50 – 47:52
Jason B
Here are two days ago?

47:52 – 47:52
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yeah.

47:52 – 47:53
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
That’s why I thought.

47:53 – 47:53
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So.

47:54 – 47:58
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Who knows what the heck the little ****** will be doing in 18 years, right?

48:00 – 48:00
Jason B
So scares me?

48:02 – 48:02
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
All right?

48:02 – 48:05
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, so, that’s the problem.

48:05 – 48:17
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, from a tax and a wealth accumulation standpoint, 529 can be nice because the tax benefits as it has, right?

48:17 – 48:20
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, you can put money into a 529.

48:20 – 48:25
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You don’t pay tax size, kinda like a Roth, but in for education, right?

48:25 – 48:27
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, money goes into it.

48:28 – 48:32
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You can get a state deduction typically to some degree, Utah has not much.

48:33 – 48:41
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Think it’s like $50 or something you get some $50 credit or something, so it’s silly, I’m like, what kind of incentive is that?

48:42 – 48:49
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
But anyway, um, so money that goes into it, you don’t pay, it doesn’t show up in your tax return, all right?

48:50 – 49:00
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So any growth over time is tax free, just as long as the distributions eventually are used for qualified education costs, right?

49:01 – 49:02
Jason B
So.

49:02 – 49:03
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
It’s very much a rock.

49:03 – 49:10
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And what I mean, how that accelerates the the accumulation because that snowballs, right?

49:10 – 49:15
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You can roll all those earnings back in and re-invest them, and that snowballs without tax.

49:15 – 49:21
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So that grows much faster than, typically, just a regular investment account without that shelter.

49:21 – 49:21
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Right.

49:22 – 49:22
Jason B
So we.

49:22 – 49:26
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Compared the two side by side over that period of time.

49:27 – 49:29
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
529 is generally going to grow faster.

49:30 – 49:32
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Well, thanks, Think Sumer.

49:33 – 49:36
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
The problem is exactly what you mentioned.

49:36 – 49:37
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
What if he does not?

49:38 – 49:42
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Go to school, or not use it, or does not have a qualified?

49:45 – 49:46
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
No.

49:46 – 49:47
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Educational expense.

49:47 – 49:49
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Now, I’d have to check with Utah.

49:49 – 49:58
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
A lot of 520 nines now allow you to use them for like, high school and other purposes.

49:58 – 49:59
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So I would have to check.

50:02 – 50:08
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, that just changed, They didn’t do it in Colorado, Colorado, I believe, still has to be used for higher education.

50:09 – 50:14
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Uh, but, the Utah plan, I haven’t looked at it in a while, Jason, let me, let me look, Let me note.

50:16 – 50:27
Jason B
Possibly part of Arizona, because that’s where they live, But they may be moving to Michigan, so, you know, I mean, I don’t know what is it based on what I would contribute or where they live.

50:28 – 50:32
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Now, you can, you can contribute to any plan and the union doesn’t matter where they live.

50:33 – 50:36
Jason B
Ok, La La.

50:36 – 50:45
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yeah, so, I used to, like, when I was living in Arizona, and I had clients all over, I always recommending, and I knew your plan at the time.

50:45 – 50:50
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Just because it was sponsored by Vanguard, it was very low cost.

50:50 – 50:53
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
The Utah plan at that time was a pretty good plan, too.

50:53 – 50:55
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So you can choose any plan you want.

50:56 – 51:04
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
If you’re that, if you’re that donor, you want to typically do it in a state that obviously makes sense from an investment standpoint and expenses, et cetera.

51:04 – 51:10
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Just or I mentioned, but also, if I were doing it out or I wanted to do it where I’m gonna get a deduction.

51:10 – 51:23
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, I have it nice and in Utah, as you know, so I contribute to a 529 on her behalf, but it’s in Colorado, I get a state tax deduction for that contribution.

51:23 – 51:24
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Doesn’t matter where you live.

51:24 – 51:25
Jason B
Ok.

51:25 – 51:33
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, so for you, I guess the short answer is you’re just, you just want to do a comparison of which plan makes sense for you, and then?

51:33 – 51:33
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Exactly.

51:34 – 51:40
Jason B
I mean, what benefit for, for my grandson, you know, more than me?

51:41 – 51:48
Jason B
But, yes, it’d be nice to have benefit both, but I would lean more towards it benefit in 18 years.

51:49 – 52:00
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yep, yeah, so, you know, two things about whether he goes to scored on one would be, are there going to be other grandkids or their family members or could use the 529?

52:01 – 52:01
Jason B
Yeah.

52:02 – 52:04
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Because you can always change the beneficiary, as you know, right?

52:04 – 52:09
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So you start at 529, he’s the beneficiary.

52:09 – 52:11
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
He goes to live in a vain in Europe.

52:13 – 52:14
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You change the beneficiary to somebody else.

52:17 – 52:17
Jason B
With the people.

52:18 – 52:18
Jason B
Yeah.

52:19 – 52:21
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Or are you gonna go back to school?

52:21 – 52:26
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You know, you get your doctorate in woodworking and you could use it, right.

52:26 – 52:30
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So, that’s one, escape hatches, just changing the beneficiary.

52:31 – 52:38
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
That’s why I would typically not have multiple, 5, 29 for multiple grandkids or kids, because maybe, just have one.

52:39 – 52:46
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
The only other option really, is then to either not fund a 529 all together, or split the difference.

52:46 – 52:52
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
And that could be the proverbial cared for him, like, hey, you know, split the difference, you put some in an investment account.

52:52 – 52:59
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So I’m going to 529, but, hey, I kinda want you to at least get some college, doesn’t matter what you do with your life.

52:59 – 53:07
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
But it’s important, hypothetically, to you, that the, that he does that, that’s the proverbial cared, of knowing that there’s some money dedicated specifically for that.

53:08 – 53:09
Jason B
Ok, oh.

53:09 – 53:15
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
There’s no real science, or black and white answer for, It’s all personal decision.

53:16 – 53:20
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Like I said, it’s kind of a crapshoot, you know what, how, it’s going to be used.

53:20 – 53:23
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
But I would do some 25, 29.

53:24 – 53:33
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Now, they’re pretty cost effective, You get the tax benefits, Chances are, somebody in the family could use it beyond him.

53:36 – 53:37
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So that’s kinda my sense on that.

53:38 – 53:39
Jason B
Gotcha, OK.

53:39 – 53:39
Jason B
Thank you.

53:40 – 53:46
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Seems like we had this conversation is talked about before, so I don’t know if it’s more helpful or not, But there was.

53:46 – 53:50
Jason B
This is my contribution or will be for his one year birthday a couple of days ago.

53:51 – 53:53
Jason B
That’s what I wanted to do.

53:53 – 53:56
Jason B
And now we’re down, you know, within a week or so.

53:57 – 53:59
Jason B
Truly getting this figured out.

54:00 – 54:04
Jason B
That rather deadline now in my mind that I want to get done.

54:06 – 54:09
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yeah, also say that there’s an estate planning play in that too.

54:10 – 54:16
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Just for people that are going to potentially have an estate tax issue.

54:18 – 54:20
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
No, 5, 29 is 1 of the.

54:21 – 54:23
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
There’s an irrevocable gift.

54:23 – 54:25
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Essentially, you can take back.

54:26 – 54:28
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So it’s one of the only irrevocable gifts.

54:28 – 54:29
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You’re going to actually take back.

54:29 – 54:31
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You have to pay penalties and the tax on it.

54:31 – 54:36
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
But when you gift money to a 529, it removes it from your personal state.

54:37 – 54:42
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So the lifetime exclusion has spent eleven point five million, right.

54:42 – 54:46
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So most people in the state aren’t above that.

54:47 – 54:49
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
But that can go away.

54:49 – 54:52
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
That could be repealed, that could go back to where it was.

54:52 – 54:55
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
It was a million at one point five million.

54:55 – 54:59
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So that’s much more realistic where people as a state are now going to exceed that.

54:59 – 55:03
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So if it exceeds that, then you now have an estate tax problem.

55:04 – 55:09
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So doing things like annual gifting, 529.

55:09 – 55:11
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Those are ways to keep your state.

55:11 – 55:18
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You know, you’re still keeping it in the family, but you’re keeping your state below that threshold so that, you don’t have to pay Uncle Sam.

55:18 – 55:19
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Now.

55:20 – 55:21
Jason B
Say.

55:21 – 55:23
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
What do I care, Circles dead.

55:23 – 55:26
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
But it’s still wealth preservation for the family, right?

55:26 – 55:26
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Why?

55:27 – 55:28
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Why wasted if you don’t happen?

55:32 – 55:33
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Good deal.

55:34 – 55:39
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
She: Tracy MS Message, if you want to get on my calendar anytime soon, Jason, happy to talk.

55:39 – 55:45
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Oh, oh, That’s just the easiest way, so we’re not planned phone tagging.

55:45 – 55:47
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You know, are you available this day?

55:47 – 55:47
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
No.

55:47 – 55:48
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I’m not.

55:48 – 55:48
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Either.

55:49 – 55:55
Jason B
In the in house meeting You don’t come to Utah, know.

55:55 – 55:55
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
How?

55:57 – 55:59
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Do I want to go to a hurricane.

55:59 – 56:00
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I heard it’s pretty cool.

56:02 – 56:08
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yes, Actually, I might be there I Can’t remember what month it is.

56:08 – 56:09
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I want to say September.

56:09 – 56:10
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I might be there.

56:10 – 56:17
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So I’d love to It’s a it’s a tax deduction, right, and the whole trip would be right off, so I should.

56:18 – 56:20
Jason B
Hey, are.

56:20 – 56:22
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You are you doing your summer trip back here?

56:22 – 56:22
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Do you think this year?

56:23 – 56:30
Jason B
Oh yeah, we do at the sand, once I do the big hike in San Juan, said, I’m gonna, I’m gonna try to do the wave.

56:30 – 56:32
Jason B
In two weeks again.

56:32 – 56:39
Jason B
And also Antelope Canyon if it doesn’t close down, but I just came from Vegas this morning and Vegas was starting to shut down.

56:41 – 56:42
Jason B
Starbucks, shut down.

56:43 – 56:50
Jason B
All the Starbucks in Vegas is going to be shut down, some of the Wal-Mart’s I mean, it’s, uh, bad news there.

56:51 – 56:51
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yeah.

56:51 – 56:55
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I know where my sister lives in your state, I talked to her.

56:55 – 56:58
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yesterday, my niece got coded.

56:58 – 57:06
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
She’s 12, and she told me it was the fourth worst county in the whole country in Utah, In her county.

57:07 – 57:09
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
It says rampant, just rampant.

57:09 – 57:12
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
So I don’t know.

57:12 – 57:14
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Now, you know, I went to my gym.

57:14 – 57:16
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
They’ve been going on my gym, Aaron.

57:17 – 57:19
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Colorado Blows my mind.

57:19 – 57:22
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You wouldn’t even think there’s a pandemic going on and there’s no mass, there’s nothing.

57:22 – 57:24
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
You know, it’s like.

57:25 – 57:28
Jason B
Arizona Cardinals game the other day.

57:28 – 57:30
Jason B
And there was no mass required.

57:30 – 57:30
Jason B
Yup.

57:30 – 57:31
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Yeah.

57:33 – 57:37
Jamie
Florida where we’re AOC comes to visit from her drunk kone and state.

57:43 – 57:44
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Sure.

57:44 – 57:47
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Alright, guys, So I have a client meeting coming up.

57:47 – 57:50
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I kinda have a hard stop here, but I’d love to see you guys.

57:50 – 57:52
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
It’s always awesome to see you.

57:52 – 57:53
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Thanks for coming in.

57:53 – 57:54
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
We’re going to do this every month.

57:54 – 57:56
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I’ll have, oh, I’ll do a better job.

57:56 – 58:07
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Having better questions, In case you guys don’t dial in next Thursday at four, if you can, I think that should be cool to have an agent on board, So, be safe out there.

58:07 – 58:10
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
I appreciate you, and we will talk to you soon.

58:11 – 58:11
Jason B
Thanks, Todd.

58:12 – 58:12
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
Thanks.

58:14 – 58:15
Todd Smith, CFPÂ®, ChFCÂ®,,CTMÂ®, CLTCTM
See, Bob, I?

Ask An Adviser – January 2022

Transcript

Level 5 Financial

Join Our Next Ask An Adviser Session