Today’s Prep:
Join us for a game of Agree or Disagree. Discover whether Eric agrees with popular statements about finances and retirement planning.
Equipping Points:
1:08 – Agree Or Disagree: You Should Always Pay Off Your House ASAP.
- You could really go either way with that argument. If you’re sacrificing your savings just to pay off your mortgage, we would disagree with that. We do agree that having no debt is the best policy, but if you’re going to have debt, mortgage debt is better debt to have. Furthermore, if your house is paid off, then your money is tied up in your house. You want be able to get it unless you sell your house. Therefore, if you’re paying yourself first and saving, then by all means, pay the house off ASAP. However, don’t sacrifice your retirement along the way.
4:45 – Agree Or Disagree: Individual Bonds Are Better Than Bond Funds.
- We absolutely agree with that statement. Bonds are a diversification tool because you tend to use them as you approach retirement in order to wean off your risk in the stock market. However, there’s a huge difference between owning a bond and a bond fund. When you own a bond, you’re not particularly concerned with changes in interest rates as you’re going to hold that bond until maturity, get back your initial investment, and collect the interest along the way. However, bond funds contain hundreds if not thousands of bonds. Every time interests rates change, the prices change inside that fund. Especially if interest rates are rising, you could lose value in that bond fund.
8:25 – Agree Or Disagree: You Don’t Need Life Insurance Once You Retire.
- We’ll put this one somewhere in between agree and disagree. You probably don’t need life insurance for the reasons you bought it while you were working. While you’re working, you buy life insurance in order to pay your bills and your mortgage if something happens to you. However, by the time you retire, you’ve hopefully accumulated some money. You should be prepared to enter permanent unemployment and replace your income with your savings. In that situation, you would no longer need life insurance as an income replacement. However, you could continue to use life insurance as a tax-free asset. While you won’t need it as an income replacement, it could become a useful tool for tax arbitrage.
Other Preparation:
- 7:43 – Agree Or Disagree: Rates Are Low, Bonds Grow. Rates Are High, Bonds Die.
- 11:23 – Agree Or Disagree: Are Annuities A Ripoff?
- 14:55 – Agree Or Disagree: Differ Taxes Now, And Pay Them Later.
Today’s Takeaway:
” There are many investment vehicles and strategies out there. Rather than viewing them as absolutes, see them instead as tools to be used as part of a larger retirement strategy. – Retirement Ready“
Subscribe To The Podcast:
Apple Podcasts - Google Podcasts - Spotify - Stitcher - iHeartRadio - TuneIn
Check out some other recent episodes
What 400+ Advisors Say Really Keeps Retirees Up at Night
What are Americans really concerned about when it comes to retirement? In this episode, we unpack the results of an insightful survey from Financial Advisor Magazine, which was completed by over 400 financial advisors. We’ll also compare these answers with the real-world concerns we hear every day from the clients in our own practice.
Read MoreBracket Busters and Stock Flops: The Risky Game of Picking Winners
March Madness is here, and just like filling out a bracket, picking individual stocks can feel like a thrilling gamble. But the odds of winning big are slim. In fact, history shows that most stock picks, like most brackets, end up busted.
Read MoreAre Hidden Fees Draining Your Retirement Savings?
In this episode, Eric reveals the true cost of investing and how to protect yourself from unnecessary financial drains.
Read MoreWhat Game Night Can Teach Us About Financial Planning
In this episode, Eric breaks down the surprising financial lessons hidden in classic board games, offering valuable insights to help you navigate your retirement strategy.
Read MoreMailbag – Upsizing, Financial Advisors & Business Owner Planning
Join us as we answer questions about the challenges of downsizing, the emotional aspects of planning for family gatherings, and the realities of transitioning into a financial advisory career.
Read MorePlanning for Kids, Grandkids, & Your Future
As many nearing retirement age are discovering, adult children and grandchildren can significantly influence financial strategies, making it crucial to understand how to navigate these relationships effectively.
Read MoreFinancial Planning Conversations for Couples
This episode is focused specifically on that planning we do with couples with insights on how we help them navigate tricky conversations about money and retirement.
Read MoreIs Your Retirement Based on Wishful Thinking?
Many people fall into the trap of wishful thinking when it comes to what they expect will happen in retirement, but a successful retirement isn’t built on hope and assumptions.
Read MoreSpending With Confidence in Retirement
Eric shares strategies to help retirees enjoy their savings while ensuring financial security.
Read More