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.

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

More From Eric:

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

Subscribe To The Podcast:

Apple Podcasts  -  Google Podcasts  -  Spotify  -  Stitcher  -  iHeartRadio  -  TuneIn

Check out some other recent episodes

What Is Lazy Money?

November 7, 2024

What is lazy money and why do you want to not have too much of it in your retirement portfolio? Simply put, lazy money is money that isn’t growing as much as it could be. Having your money grow and work for you is a key part of building a solid portfolio, so Eric breaks down some strategies to help get the most out of your money in this episode.

Read More

Retirement Planning Today Is Harder Than It Used To Be

October 31, 2024

Retirement planning simply isn’t the same as it used to be. From changes in life expectancy, the lack of pensions, and getting caught in the sandwich generation, there’s a lot to keep in mind when putting together your financial plan. Instead of taking advice from others who may have retired in a different era, it’s important to understand what strategy is right for you.  

Read More

Social Security Variables That Impact Your Claiming Strategy

October 24, 2024

After so many years of paying into Social Security, you might feel ready to reap the benefits. But before you get too eager, it’s best to have a thorough understanding of the different variables and how to best leverage them.

Read More

Retirement Real Estate Decisions: Downsizing, Snowbirding, and More

October 17, 2024

One of the key discussions you may have in retirement is what to do about the house. Should you downsize your home? Pay it off early? Buy a vacation home and become a snow bird? Eric emphasizes the importance of considering not just the financial implications but also the lifestyle changes each of these decisions entail. Weighing out the pros and cons of each decision can highlight what is right for you (which isn’t always the same as what your neighbor is doing).

Read More

Healthcare in Retirement

October 10, 2024

One major (yet often overlooked!) expense in retirement is healthcare. Especially if you are retiring early, healthcare can be a huge expense as you bridge the gap between your working years and when eligible for Medicare. Not only will you have an increased monthly cost, but you may need to budget for additional medical costs as time goes on or even long-term care needs.

Read More

Family Matters When It Comes to Finances

October 3, 2024

Today we talk about what happens in a family, particularly when someone has passed away and the financial impact that can have.

Read More

Water Wheels and Retirement Planning

September 26, 2024

Have you ever wondered how a water wheel can relate to your retirement planning? It might seem like an odd comparison, but in today’s podcast, Eric breaks down this fascinating analogy and its significance in maintaining a stable financial future.

Read More

Most Common Retirement Planning Mistakes

September 19, 2024

We all make mistakes from time to time. But what if your financial mistakes could be avoided with just a little insight? Eric shares some of the most common retirement planning mistakes people are prone to make and what you can do to save yourself from heartache.

Read More

Common Complaints About Financial Planning

September 12, 2024

When it comes to planning for retirement, the relationship you have with your financial advisor is crucial. Many people express common complaints about their financial advisors, from taking on too much risk to paying high fees or a lack of communication. In today’s podcast, Eric sheds light on these concerns and offers valuable insights to help you navigate your financial journey.

Read More

Navigating Spousal Disagreements in Retirement Planning

September 5, 2024

Inside a marriage, retirement planning is a journey that ideally involves both partners working together towards a common goal. However, as with any significant life decision, disagreements can arise. Eric sheds light on some of the most common spousal disagreements regarding retirement and offers practical advice on how to navigate them.

Read More

Leave a Comment