Today’s Prep:
Which of these financial opinions are really worth paying attention to? Eric shares ways to reframe and better understand these financial opinions and how they work in your financial plan.
Equipping Points:
Sometimes as a financial advisor, Eric’s job is to tell clients something they might not want to hear. What are some of the unpopular financial opinions people might have that a fiduciary should be able to address given your own unique situation and then be able to give a good recommendation?
Anytime someone dies, there is a financial obligation and a financial hole left behind. If you die younger in life and have a house and kids, there is a bigger financial hole. Life insurance is a tool, not the ultimate tool, but a great tool with benefits. Life insurance in retirement is one of the only asset classes that is still tax-free. This can make it a great way to leave money to people you care about.
Is it better to pay off the house sooner or not? Don’t let the house be the only thing stopping you from retirement. The mortgage will be paid off at some point and it doesn’t change if it’s on a fixed rate. Eric does not recommend pulling the money out of your 401(k) to pay off the house in a lump sum because you have to figure in the taxes. Not to mention, you can’t easily get the money back out of the house.
Annuities are also tools that can be a part of your financial plan, but they aren’t for everyone. There are several types of annuities, so it’s important to determine which one might be right for you. One aspect of an annuity is tax shelter. There may be safety or guaranteed income elements that provide what you want.
Listen to the entire episode or click on the timestamps below to skip ahead to a particular financial opinion.
2:23 – What is the appropriate use of life insurance?
5:25 – Should you pay off the house early?
8:45 – How should you use annuities?
Today’s Takeaway:
“A financial salesperson is going to try to sell you the best stuff that they have. Where a fiduciary is going to take all your measurements and then make recommendations based on what you need.“
-Eric Peterson
Related Resources:
Retirement Planning Rules of Thumb
Subscribe To The Podcast:
Apple Podcasts - Google Podcasts - Spotify - Stitcher - iHeartRadio - TuneIn
Check out some other recent episodes
Retirement Planning Statistics
Retirement is closer than you think, but are you ready? With a staggering number of people lacking confidence in their retirement savings, Eric shares the misconceptions people have and what mistakes can derail someone’s financial future. Many people feel inadequate when it comes to what they have saved in their nest egg, uninformed about the pitfalls of target date funds, and unprepared about the reality of leaving the workforce earlier than expected.
Read More
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