0:00:00 - Speaker 1
Discussions in this show should not be construed as specific recommendations or investment advice. Always consult with your investment professional before making important investment decisions. Securities offered through registered representatives of Cambridge Investment Research Inc. A broker-dealer member, finra, sipc Advisory Services through Cambridge Investment Research Advisors Inc. A registered investment advisor Cambridge and Greenway Wealth Advisory are not affiliated.

0:00:20 - Speaker 2
It's time to dive into some insider secrets of investing and retirement planning To make your retirement as smart and as elegant as possible. This is Money Chic with Sherry Rash. Hey everybody, thanks for tuning into the podcast. It's another edition of Money Chic Women and Retirement with Sherry and myself Talking investing, finance, retirement and email questions. This go around from you folks out there listening. We certainly appreciate that.

You can stop by the website and drop an email if you'd like, whether it's to the show or just in general, to get some questions answered. But go to GreenwayWealthAdvisorycom to find all the things you might need. There's a lot of good tools, tips and resources. You can contact Sherry. You can schedule some things. You can find out if you can unlock your money blocks. I think you've got a lot of different cool things on the website there, sherry. You can also drop us a line and we'll take some of those from time to time here on the show. Don't worry, we don't give out too much information. We just take the genesis of your question and see if it might help other folks like you in the same scenario. So, sherry, what's going on? How are you doing?

0:01:19 - Speaker 3
Doing alright. How are you?

0:01:21 - Speaker 2
Doing pretty good Hanging out where we are at the end of March. So we are inching closer and closer to full spring April Fool's Day just around the corner, a few days after we do this. Are you an April Fool's kind of person?

0:01:33 - Speaker 3
I am not, but here's a fun story. I actually went into labor on April Fool's Day.

0:01:38 - Speaker 2
Oh, wow.

0:01:39 - Speaker 3
And I said to my husband if I call you and tell you I'm in labor, do not ask me. If it's a joke, it's not going to go over. Well, if you do that, and sure enough, I went into labor and he did not ask me.

0:01:54 - Speaker 2
Well, that's good. It definitely would have been a tough one, right? If you go, is she messing with me or not? She didn't warn me, however, so well, that's good. I'm glad he didn't do that. Listen, let's take some of these email questions in and see if we can help some folks out a little bit. As always, if you've got questions, definitely always check with a qualified professional before you take any action, like Sherry, who is the financial advisor and the money coach. Of course, most of you know that already. Stop by the website greenwaywealthadvisorycom. Let's see what Mary's got for you. She says, Sherry, I'm 62 and I have about 1.4 million saved for retirement. I know you can't give me an exact number, but how much can I spend yearly without running out?

0:02:33 - Speaker 3
So this is a long answer to a short question. Okay, rule of thumb says you can take 4% a year and that puts you in a pretty good position to not run out of money. It's a reasonable enough withdrawal based on annual returns. You can make up for it plus some. But so that's out of her 1.4 million. That's about $56,000.

0:03:01 - Speaker 2
Okay, annually.

0:03:03 - Speaker 3
Annually, annually. But what I will say, though, is I have more questions back to Mary. Mary, is your 1.4 million all in retirement money meaning? Have you not yet paid taxes on it?

0:03:15 - Speaker 1
Oh, that's great.

0:03:17 - Speaker 3
Using that $56,000 number, 4%. That's pre-tax, so taking another 30% of that away is that enough? For you to live on.

0:03:28 - Speaker 2
Yeah, there's that sound of partner waiting right, Exactly Uncle Sam says hello, yeah, that's right.

0:03:34 - Speaker 3
That's right. And also, if it is all qualified money, rmds start to kick in when you're 72. So in 10 years and RMDs are more than 4% a year, rmds are essentially designed to have your account go down to zero. So Uncle Sam can get all of that money back in tax revenue that he's let you defer all of these years and they change right, sherry.

0:03:58 - Speaker 2
Annually the RMD amounts change. It can be 3%, 4%. It fluctuates.

0:04:03 - Speaker 3
It goes higher each year essentially. Yep. Every year that factor, that's the RMD goes up and that's a painful one if you miss it out too right.

0:04:13 - Speaker 2
So let's just say it's $40,000. She has to take out in 10 years. If you don't do it it's a 50% penalty. That's a big 5-0.

0:04:21 - Speaker 3
Correct. So not only do you have to take out what you were supposed to take out, what you missed, you have a 50% penalty on what you forgot to take out. Plus, you still have to take out that RMD for the current year.

0:04:33 - Speaker 2
Yeah, and the taxes. That's a big chunk of money. Yeah, and the taxes. So let go my arm, uncle Sam, that hurts right.

0:04:40 - Speaker 3
Right, right, so there's more to your question, some more things we have to figure out. But I would also say have you figured out how much you need to live off of in retirement? We spoke about this last episode about figuring out how much income you need or how much you have to live off of. How much do you have coming into you from social security or a pension? So you're not going to be relying solely on this $1.4 million to live off of in retirement. So how can we get everything working together to make sure you don't run out of money, because obviously longevity risk in retirement is a real concern, especially for women.

0:05:18 - Speaker 2
Yeah, I think, if I'm not mistaken, once you get to 60 or 65, the tables say the state that she has like a 70% or 80% chance of making it to 85. I think as a woman above the age of 60. So, yeah, so, even if you kind of factor some of that stuff in, but that's a good point because she's probably in pretty good shape, which sounds like how Mary's feeling, because she may, you know, she could turn on social security, she may have a pension, but that whole, how much can I pull out? That's why that rule of thumb, that 4% rule. It's just kind of a quick reference tool versus really finding out the actual number, correct?

0:05:52 - Speaker 3
Correct, yes.

0:05:54 - Speaker 2
All right, well, great question, mary. Thank you so much for listening to the podcast. Hopefully that helps. Of course, you know Sherry will reach out to all the people that have and has already in many of these cases with the emails, but we're just kind of using them for the show to share some examples with other people who might be in a similar situation. So thanks so much for listening. Keep listening and we appreciate it. All right, let's see what let's see Georgia has for you. She says I have all of my retirement savings in one IRA. Should I move some of it someplace else to be more diversified, or even with another?

0:06:24 - Speaker 3
That's a good question. It's an interesting thought and I get it. As far as getting more diversified, moving it somewhere else, maybe bringing in another opinion, another advisor, that can just further the diversification. It's okay to have one IRA. You can be very, very diversified within one account and oftentimes I find if your money is spread out over different places there's actually way more overlap when it's spread out then if it's all in one place, because when it's all in one place everything's talking to each other, you can see how it's allocated. But a growth and income mutual fund at Firm A could have a different name at Firm B, but they do the same exact thing.

0:07:12 - Speaker 2
And the same companies are in there. Yeah, exactly, Exactly.

0:07:15 - Speaker 3
Exactly so. There's not more diversification just because it's somewhere else. There's actually less. So what I would instead suggest doing is making sure that it is set up appropriately for retirement. I'm not sure how old you are, but it may make sense to start creating a strategy with your retirement savings. My bucket strategy, for example, is what I do with my clients that are about five years away from retirement to get them diversified but also protect them against the risks of retirement retiring in a down market, inflation risk and longevity risk living longer than your money.

0:07:54 - Speaker 2
Great points Again. Another good question and a lot of times people do get confused with that. The smorgasbord, if you will, is available to you. Through that one IRA you can invest in all kinds of things to be diversified. So many times people get that confused and think they just need multiple types of accounts. So great question. Thank you so much for submitting it. Hopefully that helps you along the way as well.

And we've got one from Mark this time. He says I feel like I need to reduce the risk in my portfolio, Sherry, but I don't know where to turn, because I looked at bonds, not liking those. I looked at annuities and I looked at moving to cash and I just don't like the options of many of these things. They have drawbacks to all of them. So what is a person supposed to do?

0:08:34 - Speaker 3
I would first need to understand why you want to reduce the risk. Is it because you're concerned about market volatility? What's going on in the markets right now obviously can be concerning and a little bit unsettling. And bonds and annuities and cash, like you said, they all have their pros and cons right, but it doesn't have to be one or nothing. If you want to reduce risk, you don't have to move all your money to bonds. But also bonds have their own risk and right now, in the inflationary period that we're in, bonds may not be the best place to reduce risk in your portfolio, because if interest rates are rising, bond prices are going down.

Annuities are good because they provide the G word guaranteed income. But then the cons of annuities is that there may be surrender charges and you don't have complete access to your money at all times. Everything is pros and cons. Cash with inflation you're essentially paying the bank to hold on to your money. So first we need to understand why do you need to reduce the risk? Are you solely nervous about market timing or the performance of the market at this time? Are you retiring soon and you don't want to work any longer? So I think we need to dive a little bit deeper in what you're striving to achieve and then the different options to get you there.

0:09:56 - Speaker 2
Yeah, a lot of times that's what happens. So people get, we start to see these volatile times and people just I don't, you know, don't feel comfortable when to reduce the risk. Again, understandable human emotion, but we know we go through these ebbs and flows and these cycles and the market has been a little well, not a little. It's been quite kind over the last couple of years in a lot of ways. So it's easy to get lulled into that feeling of it's just going to continue to go up, but it's, you know. We have to accept the reality that it just doesn't always do that. This 12 year bull run we've been on has been pretty extraordinary for the most part. It's had some dips along the way and we're seeing another one of those now. So understandable, but definitely make sure you're turning to a professional and doing some of the things that Sherry was talking about. Great questions. We appreciate all of these so far. On the podcast this week Again, stop by GreenWheelWealthAdvisorycom.

That's GreenWheelWealthAdvisorycom if you'd like to submit your own. We'll see if we can squeeze in maybe one or two more before we go. Sherry Doug says I don't like my 401K investment options, but the company says I'm not eligible to roll the money out. I know people who have moved over their 401K in the past. So what am I missing?

0:11:00 - Speaker 3
First, it depends on how old you are. If you are 45 years old, it's correct You're not able to roll the money out of your 401k, but there is a rule of 55. If you're 55, you can withdraw funds from your current jobs 401k or 403b with no 10% tax penalty If you leave that job in or after the year you turn 55. So there's that option, but then of course you're paying taxes on that, so not the most desirable option. But then once you hit 59 and a half, you are able to roll funds out of your 401k into an IRA, and that's a rule that's allowed in 401ks in general. So those are two options.

Another option is what's called a self-directed brokerage window. This depends on the plan, but it may allow, depending on how your plan has it set up. It may allow your advisor to manage your 401k for you. So most large companies offer this option. So take a look at that and see if that's an option for you, Because then that way you can work with your advisor to have your assets managed still within your 401k. But maybe you'll like those investment options a little bit better.

0:12:23 - Speaker 2
Awesome, Well, great question Again. Thank you so much Good. Some some good tips there from Sherry to think about and ponder. So we appreciate that, Doug. Let's finish off with the last one here from Claire. She says Sherry, my husband simply refuses to retire because he says he can't imagine life without his paycheck. But he's approaching 70. And I really think it's time for him to walk away. What can I do to convince him that it's time to retire?

0:12:46 - Speaker 3
Well, life without the? So there's a lot here right? So if he can't imagine life without a paycheck, does that mean an employer provided paycheck or just a paycheck in general? It probably. It sounds like he doesn't have a plan for retirement, he doesn't have a plan to shift from accumulation to distribution. So by having a plan that might alleviate some of his concerns, because it sounds like right now he's just not confident in their financial situation and maybe unnecessarily having this anxiety. So I would say what you can do is work with an advisor to get a plan together to create your own paycheck. Use your money to turn it into a paycheck for yourselves. So then that way you're not dependent on an employer paycheck. You're now responsible for your paycheck and you're the advisor can set you up with a strategy so you have confidence in the paychecks you're going to be providing yourself in the future.

0:13:47 - Speaker 2
Yeah, you know, Sherry, a lot of times it comes down to that, right. I mean more times than not. I talked to advisors all across the country and more times than not, when people come in for that initial consultation, they are pleasantly surprised to find out that they're in better shape than they realize, and it's usually Just a lack of confidence in what they've accumulated or built to this point and they just don't know how to Activate it and turn it on and make it go and all that kind of stuff.

0:14:09 - Speaker 3
You were never taught how to retire. We were just taught you retire and your company gives you a pension and you don't have to think about it. And then we made the switch from pensions to 401ks, but we were never taught how to navigate that. What does that now mean? So you know it's the American dream to retire, get a pension and a gold watch. Well, you don't get those things anymore. Now you get a pile of money that you've been saving into and you don't know what to do with it, so you need to just create a plan around it instead of having someone else create the plan for you.

0:14:42 - Speaker 2
Now it's up to you to do it exactly so, claire, I think you're in the right, you're on the right path, you're you're working on it. But sometimes another great value to speaking with a professional like Sherry and an An advisor in your area or a money coach or whatever that might be, is that third party. You know it's that mediator to, because you could probably tell him till you're blue in the face that you guys are in good shape, but he might not listen to that. Right, husband, spouses, all that kind of stuff. We tend to sometimes not listen to one another, but that third party aspect that Sherry provides and that people in her industry provide is can be really helpful, kind of just highlighting these things and saying it is okay, you are in good shape or, if not, then finding out what you need to tweak and shore up so that he can get to retirement as soon as you know you'd like, or as soon as possible as he would like. So reach out, get on the calendar, have a conversation, just check with an advisor in your area.

If you'd like to talk with Sherry, you can stop by the website Greenway wealth advisory comm. That's greenway wealth advisory comm. And don't forget to subscribe to the podcast. Whatever platform you like to use Apple, google, spotify, whatever the case might be. You can find all of it there again, ed Sherry's website. We're gonna finish off a little something fun here, sherry. As we go this week a little getting to know you From time to time, we'll do these.

0:15:56 - Speaker 3
What's something you do that just makes you feel old not only recently have I forgotten how old I am, but but when they, then I. If I have to say how old I am to someone, or if I remind my children I am such and such years old, I think I know what I'm doing. I got this under control. I make myself two to three years older.

0:16:19 - Speaker 2
Oh.

0:16:20 - Speaker 3
That makes me feel very old, that I don't even know how old I am.

0:16:24 - Speaker 2
I got you that you know and so before I get you know any emails or things that saying how dare I ask you know? That question on the podcast. Sherry and I briefly talked about this before we kick things off because I was chatting the fact that I have to wear Glasses more often now and of all the time you know I'm over 50 and of all the things that bothered me, Glasses really bothered me for some strange reason, I don't know why. I know most a lot of people in my family wear glasses Not a big deal, but it's just like one item that some for some reason made me feel old. So you just never know what it's gonna be right. It's always something so that's right.

Aging yourself was not what I expected, though. So there you go. It could be worse, right it could be. It could be any number of things. So that's our getting to know you. That's our podcast. Thanks for hanging out with us. As always, we appreciate it. For Sherry Rash, I am the co-host. Mark Killian, we'll see you next time here on money, chic women and retirement with Sherry Rash from Greenway wealth advisor.

0:17:23 - Speaker 1
Discussions in this show should not be construed as specific recommendations or investment advice. Always consult with your investment professional before making important investment Decisions. Securities offered through registered representatives of Cambridge Investment Research Inc. A broker dealer member. Finra SIPC Advisory services through Cambridge Investment Research Advisors Inc. A registered investment advisor. Cambridge and Greenway wealth advisory are not affiliated.