Today’s Prep:
What kind of costs are you paying that you might not even realize? Eric identifies some hidden fees to look out for when planning for retirement.
Equipping Points:
Are your investments as efficient as possible? A lot of times there are hidden fees in things we might not expect. Even if you can’t see it plainly, that doesn’t mean it isn’t there. On today’s show we talk about a few categories where you might be paying more than you realize.
Mutual funds have a prospectus with an expense ratio. This shows how much it takes to operate the fund, but it does not show you how much the expenses are as they do the trading. Buying and selling the stocks costs money that you might not even realize you are paying.
Variable annuities are notorious for expenses. The only reason to go into a variable annuity is for the riders they can provide. Eric talks through a metaphor to help us better think through how a variable annuity works.
Up until recently, inflation is something that often got overlooked. In retirement it hits especially hard when you only have so much income. In order to combat inflation, you have to pull more money out of your retirement accounts. What you do have in retirement is time, which might allow you to look for deals and find creative solutions to fulfill your needs.
Finally, taxes have a huge impact on your net income. If they raise, do you realize the difference it could make from one tax bracket to the next? Being tax conscious as you approach retirement and understand how taxes are going to affect you in retirement is huge. Every dollar you save in taxes is another dollar you get to spend and enjoy.
Listen to the entire episode or skip ahead using the timestamps below.
1:47 – Mutual funds often have hidden fees.
4:42 – What are variable annuity fees like?
7:42 – Inflation is typically overlooked.
9:18 – Taxes impact your overall net income.
Today’s Takeaway:
“Being tax conscious as you approach retirement and understand how taxes are going to affect you in retirement is huge.”
-Eric Peterson
Subscribe To The Podcast:
Apple Podcasts - Google Podcasts - Spotify - Stitcher - iHeartRadio - TuneIn
Check out some other recent episodes
Mailbag: Should I Fire My Broker?
Navigating life’s financial crossroads can be tricky, especially when it involves your financial future. In this episode of Retirement Ready, Eric addresses these complex issues head-on. How do you best evaluate your broker and your investment performance against the S&P 500? Eric says a lot of that comes down to setting expectations and understanding the risks. Then, Holly wants to know what to consider before making a midlife career change.
Read More
Putting It Off
We are all guilty of procrastinating from time to time. Financially speaking, though, this can get you into a lot of trouble. Let’s talk about the areas where it might feel better to kick the can down the road.
Read More
Common Scams to Avoid
Americans over 60 have lost more than $3.1 billion in various forms of fraud and scams in the last 12 months! Today we talk through some of the common scams people unfortunately fall for and how you can stay vigilant against it.
Read More
Financial Strategies: Agree or Disagree?
There are a number of financial ideas that people have differing opinions on. Eric shares today which of these he agrees with or disagrees and why.
Read More
Divorce Mistakes
Unfortunately, divorce happens. When it does, no one wants to make costly financial mistakes amidst an already stressful time. Today, we talk about the mistakes that can happen and how to avoid them when it comes to dividing up your assets with a spouse.
Read More
Villains of the Financial World
Just like some of these cinematic villains, some of these financial elements may have a bit of nuance and history that can make it hard to label them all good or all bad.
Read More
Uses for Life Insurance
When you’re younger, life insurance is often thought of as an income replacement as needed. But as you get older and into retirement, you might find other uses for life insurance. When thinking ahead for your estate and how it passes to beneficiaries, life insurance can prove to be a useful tool. Currently, the proceeds from life insurance are tax-free. How does that change how you include it in your financial plan? Eric outlines some of the options and benefits life insurance can provide.
Read More
Understanding Financial Risk
What kind of risks do you take in your financial life? As you get less comfortable with things like climbing up ladders and riding on skateboards, you might also become less financially risky. When you enter retirement, how you view your money in the market changes significantly from your working years. It’s important to look at your portfolio to ensure your investments match your risk tolerance.
Read More
Mailbag: What Financial Advice Should I Share with My Grandchild?
Why is retirement planning different than the “good old days” that our parents and grandparents experienced? Things like pensions, Social Security, and even RMD age have changed. Is your financial plan set up accordingly or is it in need of some changes to match?
Read More
The Good Old Days
Why is retirement planning different than the “good old days” that our parents and grandparents experienced? Things like pensions, Social Security, and even RMD age have changed. Is your financial plan set up accordingly or is it in need of some changes to match?
Read More