Coasting in Retirement Ep 10: Nervous About Your Money? Try These 4 Steps

Segment 1 (Show Open):

Good afternoon everyone and welcome to Coasting in Retirement! I am your host, Josh Null, and I’m joined by my co-host, Michelle Lee Melton. Michelle, how are you doing? It’s great to be back in studio with you, we are taking a quick break from our Daphne studio, recording this episode in Coastal College’s podcast studio, located in downtown Fairhope and actually right across the road from our Gulf Coast Financial Advisor’s office.

Michelle and I are here today to discuss financial topics relevant to those in or near retirement living their best life along our part of the coast. If you’re just tuning in – you’ll want to stay tuned in – we’ve got a great show for you today. We’ll kick the show off with a discussion about our main topic, then about 15 minutes from now we’ll dive into recent headlines with our “Michelle with the News of the Week” segment, then about 30 minutes in we’ll get to poke a little fun at me with the “Where Josh Nailed It; Where Josh was a Little Off” segment, then, finally, if we have time we’ll finish up with our Living the Gulf Coast Life segment where Michelle and I get to talk about all of the cool stuff we get to do down here in Lower Alabama.

For those new to the show, a little background on me. Again, my name is Josh Null, I am a fee-based fiduciary financial advisor, I hold my FINRA Series 65 securities license and I am the owner of Gulf Coast Financial Advisors, an independent investment management and financial planning firm based out of downtown Fairhope, Alabama. You can find more information on me and Gulf Coast Financial Advisors by visiting our website gulfcoastfa.com or feel free to give us a call at 251-327-2124. We will repeat our contact info several times throughout the show!

Let’s get to our main topic. Michelle, let me ask you a question – have you or anyone you know been a little more nervous than usual about their money lately? Maybe even the last several months or couple of years? Yes, it’s been a little unsettling out there. But we are here to help! Today we are going to lay out 4 simple steps for those nervous about their money to take, especially for those in or near retirement. Let me repeat that – for those of you feeling a little uneasy regarding your retirement savings and investments – we’ve got a couple of solutions to consider. Got it? Good. Alright, in no particular order, here we go with our 4 simple steps:

If you don’t have a financial advisor, consider using one – but only after you interview them first. Advisors come in many flavors – some are investment management focused, some do financial planning, some are brokers, some are insurance agents – we’ll going to give you tips on how to decide later in this episode.
Consider getting a comprehensive financial plan and possibly forming an estate plan, if appropriate. This is really important if you haven’t started taking your social security yet, because a good financial plan can help you optimize the timing of that decision.
Get an analysis performed on your existing investment portfolio. We will talk more about the tools we use to help folks do an “MRI” of their portfolio, including tools such as Riskalyze to see if your investments are truly matched up to your goals and your time horizon. We also use a tool called RetireUp to look at retirement income solutions. I’ll explain more later in this segment.
Get basic tax planning services. Not tax preparation, that would be the job of your accountant or CPA, of which I am neither. What I’m referring to forward-looking tax planning, particularly if you are using the sale of a business or property to fund your retirement. One of the tools we have available is called Holistiplan, we use it to take a deeper dive into your tax returns to make sure you are keeping as much of your hard-earned dollars in your pocket as legally possible. We will also discuss more later in this episode.

We recently did a comprehensive financial plan proposal for a business owner looking to transition to retirement in his early 60’s. This plan included both a lot of specialized software offerings but also the expertise and experience of our team at GCFA, so I wanted to share it with you all. If you’re interested in having a conversation about working thru a similar plan, be sure to give us at call at 251-327-2124 or you can email me at jnull@gulfcoastfa.com. Here’s the basics:

A Comprehensive Financial Plan utilizing EMoney Financial Planning software for assembly, presentation, and ongoing adjustments, including a potential client central “hub” for the Pierce’s to keep evergreen digital copies of their most important documents.
Basic Tax Planning services utilizing Will Steih’s CPA background and Holistiplan software, including a review of existing tax returns to identify any potential tax savings and available phase-ins and phase-outs to make forward-looking tax recommendations. Note: this does not include tax preparation services.
A Risk Tolerance analysis utilizing Riskalyze software and Josh Null’s investment experience to conduct a “MRI” of the Pierce’s current investment holdings and determine how those positions match up with the client’s actual investment goals and time horizon.
A Customized Income Plan utilizing RetireUp planning software that uses portfolio data and actuarial modeling to provide a solutions-based, visual road map for the Pierce’s income planning.

The strategies we use are designed in part to help you with income production as well as inflation and longevity risks. Not only are we trying to match your risk tolerance with your investment holdings, we want to help make sure you don’t end up outliving your retirement savings. Again, f you’re interested in having that conversation, give us a call at 251-333-5151, or find us at gulfcoastfa.com. That’s gulfcoastfa.com.

Alright folks, coming up next - There’s always a lot going on in the world! Particularly the world of finance- this past week was certainly an example of big news in finance! Every week Michelle and I scour the interwebs for helpful financial articles related to our topic of the day, especially articles that pertain to those in or near retirement. Join us after the break to hear Michelle and I discuss this week’s relevant headlines in our “Michelle with the News of the Week” segment. Stay tuned!

Segment 2 - Michelle with the News of the Week:

Josh: “Welcome back to Coasting in Retirement, your host Josh Null here! As we discussed before the break, every week Michelle and I scour the interwebs for helpful financial articles related to our topic of the day, especially articles that pertain to those in or near retirement. Michelle and I are going to help you all understand and decipher the deeper meaning of those headlines, or at the very least, provide context. So with out further adieu, here’s “Michelle with the news of the week”!:

1. Michelle: Alright Josh, I’m going to start us off with an article related to your suggestion that folks should consider using a financial advisor, but interview the advisor first. The headline comes from CNN Business: “4 Things to Ask Before You Hire a Financial Advisor”. This article talks about all the different kinds of “financial advisors”, including how they get paid and the type of work they do, and how investors should be pretty blunt when asking certain questions. When someone is looking for a financial advisor, what do you think is most important in their search, and do you think investors should be as bold with their questions as this article suggests, Josh?

Josh: Yes, investors should absolutely be bold with their questions. The problem with my industry is that so many people get to use the term “advisor” and the regular everyday investor probably doesn’t know how to tell one advisor apart from another. Josh – talk about fee-based and fee-only advisors, dually registered agents, brokers, insurance agents, etc. Also point out some people will make a big deal about how different “advisors” are paid, and that there is some importance to that, but what is really matters is if the advisor is being incentivized to perform the task your need. Are you a buy and hold investor, say like a Dave Ramsey system with American funds? Then maybe a commission based broker is fine. Do point out how the industry has migrated to fee-for-service model. If you are listening to this and want to learn more about the fee-based financial advising world, give us a call at 251-327-2124.

(https://www.cnn.com/2021/04/19/success/how-to-hire-financial-adviser-feseries/index.html)

2. Michelle: Alright Josh, let’s pivot to your buddy Chuck Schwab. They have a recent article titled “5 Ways Financial Planning Can Help”. So, first, great job with the even numbers Chuck. Second, the article states that only 1/3 of Americans have a written financial plan, and in a survey of those that didn’t, the 3 primary reasons were all related to folks thinking they didn’t have enough money to make plan, or enough time, or it is too complicated. As someone that helps people write last will and testaments, I’m going to say that the 1/3 number seems a little high to me. What say you?

Josh: That sounds really high to me. I would guess more along the lines of 5-10% for all Americans, and maybe 15-20% for folks that have done a good job of accumulation and are looking to retire. So let’s first tackle the reasons why people don’t, starting with not enough money. There is no magic number with this, and what one person views as a huge pile of money, another person may view as not nearly enough to be taken seriously. I can tell you from experience that most people don’t have as much money saved as you think, the big house and fancy car may be misleading, so as Michelle says, stop comparing your insides to someone else’s outsides. Now, to answer the question on time and complexity. Josh – talk about how tools like EMoney and RetireUp make it relativity easy process to gather and sort data into an ongoing, dynamic plan. We can absolutely help with comprehensive financial planning at Gulf Coast Financial Advisors, take the first step by calling us at 251-327-2124.

(https://www.schwab.com/learn/story/5-ways-financial-planning-can-help)

3. Michelle: Very well. So Josh for our next headline, I decided to go with something that sounded aggressive, and I think it speaks to some of the reasons that people are nervous about using, or even meeting, with a financial advisor. I pulled this from MoneyGenius, and it’s titled “Trusting Your Financial Advisor – 11 Signs They May Be Ripping You Off”. Now, both the title and the article are ridiculously long, and I know this is a subject near and dear to you, so I’m just going to let you riff for a minute about your thoughts on this article:

Josh: I think this article was actually written in Canada, correct? Yeah so some of the terms they use are a little different than the US, but the same basic principles apply. There’s pretty good meat on the bone in this article, and a lot of it irritates me just as much as the average investor. I’ll remind everyone that I got into this business in my mid 30’s, after I was already a full grown man, and I came in with a healthy skepticism of some of the promises and nonsense I would hear. Here’s some things from the article that get in my craw: Your financial advisor doesn’t explain how they get paid, Your financial advisor boasts they can “easily” beat the market, Every time you talk to your financial advisor, they ask you to buy something, Your financial advisor hasn’t offered you a written financial plan. Offering a financial plan is one of the first things we will discuss, give us a call at 251-327-2124.

(https://moneygenius.ca/blog/11-signs-your-financial-advisor-is-robbing-you-blind-and-how-to-stop-it)

4. Michelle: Alright Josh let’s pivot to our 3rd step in our opening segment, the one regarding getting an analysis of your investment portfolio. I hesitated to include this article and commenting on it because it’s probably going to sound like I am picking on the author some, but I swear I am not, she seems very, very sharp and well written. The article is from Morningstar.com, and it’s titled “A Year-End Portfolio Review in 7 Easy Steps”, but I got to tell you Josh, I only counted 2, maybe 3 “easy” steps in her list. “Assess your asset allocation”…ok, I kind of get that. “Check the adequacy of your liquid reserves”…um, is water involved? And then this doozy, “Assess suballocations and troubleshoot other portfolio-level risk factors”…I’m out! What the heck does that even mean and how in world would that be considered “easy”?

Josh: Ha! I think it’s fair to say that my industry likes to use big and sometimes obtuse terms, maybe even to sound smarter than we are, which to be fair, I do NOT think the author is doing with this article. She makes a couple of points that most folks would understand, such as Conduct a wellness check, Assess your asset allocation, look at inflation protection – which is something we talk about on this show a lot – but the Check the adequacy of your liquid reserves, Assess suballocations and troubleshoot other portfolio-level risk factors are things that are important but probably point to need to have a qualified financial professional help you. Talk about how these are important steps but have an advisor do that for you, Riskalyze, etc. And of course we can do these things at Gulf Coast Financial Advisors! We’re kind of math and numbers nerds but in a good way! Give us a call at 251-327-2124.

(https://www.morningstar.com/articles/839091/a-year-end-portfolio-review-in-7-easy-steps)

5. Michelle: Well, I’m totally worn out now, so I’m just going to do one more headline. I’m going deep this time Josh! We usually reference news sites that the general public would visit, or at the very least, serious investors would read, such as Barrons. But this time I’m going to a site that I believe is probably read more by financial advisors like yourself versus everyday savers like me. I’m talking about Michael Kitce’s site “Nerd’s Eye View” and a blog he wrote called “Systematizing Reviews of Client Tax Returns by Building Software to Automate Them”. I know this blog is mostly about tax planning software Holistiplan, so Josh why don’t you explain who Michael Kitces is and why what he has to say about Holistiplan is useful to our listeners?

Josh: Michael Kitces entire bio would take up way too much time on this show, so let me try to sum it up this way. If there ever was a need for CNN, or FoxNews, or MSNBC, or anyone like that to bring on “the” expert in what financial advisors and planners do and are thinking, Kitces would be the guy. He’s as plugged in as anyone to our industry, he’s started a bunch of great platforms for advisors like me, and he was a first mover with his blog and podcast. I believe Kitces is affiliated with Holistiplan but the guy has such as reputation as a straight shooter that I don’t think that matters.

From Kitce’s blog: It starts with a tax return, a PDF tax return. And we still have to ask our clients for that. But then we the advisor can upload that into the software. The software then is tasked with reading the tax return and extracting information that it needs from that tax return off of Schedule 1, Schedule A. Kind of going into the back and looking at some of the other more obscure forms. Then we run a set of algorithms, which I only learned recently is that's what an expert system is. It's called an expert system, where you take a bunch of data inputs and come up with some observations or outputs. Yeah, and we spit out a report that kind of says, "Here's some of the key figures on the return. Here's some..." We're not going to call them recommendations. They're observations, actionable observations to talk about with the client. And it's kind of a one-pager that really quickly gives advisors another touchpoint with their client. And we should be all doing tax return reviews anyway. That should be a staple part of our service.

And then we kind of...just because people were asking for it, we built a projection tool as well. So then you can take those observations and say, "Okay, well, now let's run some numbers for next year. Let's take that capital gain or let's not, let's do that Roth conversion or not. What's going to happen with my self-employment income?" And so really, at the moment, the idea is it's an end-to-end tax planning tool. It starts with a document and ends with a deliverable to give to clients.

For those folks interested in tax planning, I have a couple of things to say. While I am not a CPA, my p Will Steih is a CPA by training. Will does not prepare tax returns, but with this accounting background and the Holistiplan software, we are able to take a unique look at someone’s tax situation. If you are interested in learning more, give us a call at 251-327-2124.

(https://www.kitces.com/blog/roger-pine-holistiplan-zebra-smash-briaud-financial-advisors/)

Josh: Michelle, great job as always with the headlines, these are all important pieces of information that impacts those in or near retirement! Listeners – if you have questions around the topics in our headlines of the week, or questions related to your investment strategy or financial plan, why don’t you give us a call at 251-327-2124 to have a conversation or set up an appointment, or you can reach out to use via our contact page on our website gulfcoastfa.com.

Alright folks, coming up after the break, we get to have a little fun and I’ll probably get picked on a little bit by my co-host, Michelle in our next segment. We call it “Where Josh nailed it, where Josh was a little off”. As someone that has always had strong opinions, and often public opinions, I think it’s important to hold myself accountable for the things I’ve said that didn’t quite stick the landing. But to be fair we also discuss where my often-skeptical viewpoints proved to be pretty accurate. Remember I am originally from the Show Me State of Missouri, so means, don’t tell me, show me! Stay tuned!

Segment 3 - Where Josh nailed it, where Josh was a little off:

Welcome back! Your host Josh Null here, along side co-host Michelle. If you know me in real life then you know that I tend to have strong opinions, and as someone that has had a radio show and a couple of podcasts over the years, I’ve often espoused those opinions publicly. Sometimes I’ve been proven right with time, and sometimes, we’ll, let’s just say I didn’t stick the landing. So each week Michelle and I get to poke a little fun at the thoughts or opinions I’ve put out there that weren’t 100% on point. BUT, to be fair, sometimes I am RIGHT, so I also get to point at to some of my thoughts and opinions that were pretty accurate. We call this segment “Where Josh nailed it, and where Josh was a little off”. Alright Michelle, what’s first?

1. Michelle: Alright Josh, in one of our previous episodes you talked about how bond laddering had become a valid way to generate income in retirement, now that rates had risen to competitive levels after so many years of low interest rates. You also stated that the recent bank collapse of Silicon Valley Bank could have possibly been avoided if the bank’s executives had simply laddered their bond holdings instead of putting so much money into long term bonds. Nailed it or a little off?

Josh: So this is an overly simplistic way to look at it, but in general terms, yes, I nailed it. Before I describe why I feel that way, let’s remind the listeners why we are discussing bond laddering again. Mention Schwab CD rates.

2. Michelle: Josh in one of your seminars from late last year, you discussed “Sequence of Return Risk”, and how you were concerned that those retiring in 2023 were facing a similar situation to those folks that retired in 2008. The main point I think you were trying to make is that all indications pointed to a significant stock market decline in 2023, possibly even a bear market, and while maybe not as severe as 2008, a significant market dip right out of the bat could set investor’s portfolios back years. As you’ve said many times before, you’re not a soothsayer, but do you feel you nailed it or you were a little off with this opinion?

Josh: We pointed this out back in one of our February episodes, and here we are in April of 2023, and yet again you’d have to say I was a little off! At least so far. The Dow is up about 1.3% and I believe the S&P is up around 7%. Even tech, that has taken a little beating this year, is up according to the Nasdaq 100. And I’m usually the glass half full guy! Discuss market trends and describe what is sequence of return risk here.

3. Michelle: Ok Josh so you’ve openly and often encouraged retirees to delay taking social security until their full retirement age because the benefit increases by 8% annually. But recently there’s been stories about social security running out of money by 2034! So instead of waiting, shouldn’t people get all the money they can before this thing goes belly up?! Nailed it or a little off?

Josh: So I am going to say I’ve nailed this opinion, and will continue to nail it, and here’s why: explain the math behind delaying your social security (make sure to add disclaimer that if you need the money now, you need the money now), how you can use other tools to cover the gap, AND, why there’s no way US politicians are going to let SS lapse, it’s the most successful program in world history at dramatically reducing elder poverty. 1/3 of elderly in poverty in the 1960’s to less than 10% now, just need more young people.

4. Michelle: Josh, you stated that because at various points in your career you had once hosted a weekly 30-minute radio show and 2 podcasts, that starting a weekly 1 hour radio show on a major local FM station would be NO.BIG.DEAL. Nailed it or a little off? (Note: I’m being a little silly with this, make it seem like we are working our butts off with a wink at the audience)

Josh: So, on my choice of co-host for our new show, Coasting in Retirement, I nailed it big time with you. But with the rest of the show being no big deal b/c of my past experience? Way off. Our show Coasting in Retirement It’s a completely different situation that my prior efforts. Listeners you should know the great lengths and energy Michelle and I go to prep and record the show (be a little silly with this) – it’s like working in a coal mine. Let me explain – talk about how Focus on the 5 was a human interest piece where all you had to do was ask questions (talk about how you used it to get to know people) and how the podcasts could be recorded in batches for much shorter time periods, where while CIR will have some evergreen topics, we really set it up to be a timely show, particularly with our Michelle with the News of the Week segment.

5. Michelle: You’ve said often that most investors with a written financial plan tend to weather stock market volatility a little more calmly than those with just an investment portfolio or stock account. You’ve also said that the type of account an investor has often depends on the type of advisor they’ve chosen to help them. Did you nail it with these 2 related opinions?

Josh: Talk about how having a financial plan helps put the investments in their proper perspective, especially if the plan has a long term horizon, and also talk about the different kinds of advisors (fee for service, dually registered, brokers, insurance agents, etc) and the type you are.

Well listeners, once again I didn’t totally nail it with all of my opinions, but I had valid reasons for being a little off. And I’m learning to be more open minded! Impressive maturity, one would say, right Michelle? Now, to our listeners that have more questions bonds, investments, inflation, interest rates, annuities, etc., we invite you to reach out to us. Call us anytime at 251-327-2124 to make an appointment or request more information.

Folks, that’s it for us this week here at Coasting in Retirement! I want to give a huge thank you to my lovely co-host, Michelle Lee Melton, a thank you to our awesome radio station 106.5, many thanks to the provider of our show music, local band Sloth Racer, and as always my sincere appreciation for all of your out there that have been listening and joining us on this journey. We would love to be a part of your journey as well. Until we talk again next Sunday, have a wonderful and productive week. This has been Coasting in Retirement with Josh Null!

Disclosure:

Advisory products and services offered by Investment Adviser Representatives through Prime Capital Investment Advisors, LLC (“PCIA”), a federally registered investment adviser. PCIA: 6201 College Blvd., Suite#150, Overland Park, KS 66211. PCIA doing business as Prime Capital Wealth Management ("PCWM") and Qualified Plan Advisors (“QPA”). Certain services may be provided by PCIA affiliates. In this format, Josh Null provides general information, not individually targeted personalized advice, and is not liable for the usage of the information provided. Exposure to ideas and financial vehicles should not be considered investment advice or a recommendation to buy or sell any of these financial vehicles. This information should also not be considered tax or legal advice. Past performance is not a guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally inve