Are You Aware of Hidden Expenses?

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.

(Click the featured times below to jump forward in the episode)

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

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The host: Eric Peterson - Contact - Call: (515) 226-1500

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