Broadcasting from the top thirteen seventy studios. You're listening to financial lives with your host Suze said Blackburn and Elizabeth Jane's three nightmares you want to have bullied. With your 401 case as fiduciary is Blackburn and James are required to work in your best interest. Helping you to own retirement in today's economy so stay tuned as they bring UN informative approach to your retirement. Each and every week and now your host Suze at Blackburn. I know Elizabeth James. Welcome to financial lives unlike us who got a good show for you I'm season Blackburn. I'm owner of caps are financial. And go to our website capstar financial dot com. And I hold a series 65 fiduciary. Financial planners license them also an insurance agent independent firm. And I also holding mortgage license. Elizabeth James he's mine co host. And she has a charter retirement plan specialist designation. Along with they series 66. Financial planners license a fiduciary is well. With all that said my gosh we handle. A select family. In the Austin area for their retirement planner there retirement planning. And what this show is about aren't some of the nightmares frankly that we see walking in the door. When they want us to help them with retirement and it's too late Elizabeth they've waited too long the coming in and they're like okay were retiring next month can you help us. And is like uh huh we should come in like ten years ago we get it done some magic. And the three main things that we are gonna talk about. Is how you invest them number two would be. My gosh you know the purpose. Of the 401K. It compared of believed to woody used to be. And number three what would that be just the limitations. That. You might be constrained to you with in a worked provider employer sponsored plan. And so really do you need to explore other options besides. Is it borrowing K or your work plans at the end all be on the yum chili. Well here's some of the main problems I see in Elizabeth gonna talk to this is issue with her designation. Because being a charter retirement plan specialist she actually has then someone that has created that for companies. And so with that designation Elizabeth. One of the things that we see under if you pull the curtain. On fees and administrative costs. On the limitations. Of the employees. It's built to protect the employee error. And just the lack of understanding. I have seen in my past and and currently. I just a lack of understanding that a participant or an employee has. For the plan and I wanna highlight a recent article from US news money magazine and the title of that is. Article why 401K plans are a source of financial stress them and we hear that all of the time with our clients they might. Have 41 can't work and we hear all the time what I just don't know what to do with it you know can you help me. And because there's been a huge shift. In recent years there where there's more and more responsibility pushed on TV employee. The good old days where a pension and and a gold watch when you retire and you didn't have to worry about anything. Because the way pensions were designed the advantage of them. Where it's automatic there's a setup man out contributed for each worker. And that's gonna guarantee a good income in retirement and the investments were professionally manage me but fast forward to today. And as most of your familiar you have a 401K okay. And it's just the opposite it's anything but automatic you have to you as an employee decide whether or not participate. Then how much do I contribute. And then which investment Stephen G use I am I doing the right thing. And so this shift and the employer bearing their risk in this longevity risk not running out of money. Is now totally shifted TU as the employee. And you have to figure doll out this is gonna last your entire life. And as you said before those of you they're listening right now you don't have a lot of help. You know you can pay for some help but my goodness how you know that's exactly and then there's target dated funds that have all kinds of mess and they airman again Elizabeth to talk about that. But you're investing is something that literally tracks the market like a dog and only each. And common stock mutual funds passive. They're not actively managed they don't have. All the components of a very. Fast moving the cyclical market I mean my goodness we got a new president new interest rates rising interest rates market. Many viewers sitting and you know. 2015 funds that are. The highly weighted in bonds. They're not going to be favorable at all the going to be very high risk in a rising interest rate market you don't even know that is there's no when he talking about it. And just said to a. Expand on that a little bit. We see both ends of the spectrum we see you know. Collection and mutual funds way too risky. Because I just don't you know I don't know what to choose are really have a sophisticated. Asset allocation or mix with and your investments and its diversified. And then on the other end of the spectrum we see. Everybody's sitting and Ian mainly cash or the stable value or money market selection of their former UK. Again because they don't know what to do and the lack of advice. That you can actually get from. Your employer yet they're not allowed to advise you on your plan. Or that some lack of reference representation and for your retirement plan is just not there. And is shocking when you think about it your 401K. Or 43 B or any of those employer sponsored plans. They make up the majority of your retirement assets it is or largest retirement asset and sometimes it goes ignored. Until you're ready to stop working then it's what I did OK so let's take the average person listening right now. You open up the window in your fidelity and investment account and you've gut. Large cap growth large cap value mid cap growth they can't value the Contra fund he gets some different things in there. How do you even know what that is Elizabeth. Well and that's another good point because today defines their name doesn't necessarily. Tell you what they do. And some other sneaky tricks that mutual funds do. They might have by the air perspective yes you know that big huge book that you now the legalese about what the fund disposed to do in the cost Obama black. They have a very narrow window of time in a year when they do they're reporting that they actually have to be within there. Target of their investment objective after that they can vary greatly. From there investment objectives where it large cap growth fund. After. You know reporting they might. Dipped down and disseminate camper small cap because they're all trying to get more return they're also competitive. Well what does that do for you as a investor increases your risk and you may not even know them. And the other problem with mutual funds in your plan in Contra fund. What is that is that growth isn't valued as at large cap is it small cap. Yeah again we can help you uncover look under the hood NC leader shrew. Our risk is what you're shrew asset allocation across. You know growth value. On the different asset classes are well only talk about this in our retirement elevated class which frankly he'll stay tuned we're going to be. Talking more about that later on in the in the months. In March were going to be teaching that class but. We have. You know you you probably are aware this that mutual funds trade at the end of the day. So we have a crash. It's in progress right now guess what you're stuck in it likened. Elevator at the top floor falling free falling you can't get out it can't push a button and self. Medalist took. That's right there are lots of limitations on mutual funds and then even more so. In their round an employer sponsored plan because not only are those. End of day half hour restrictions but. You might have depending on your play man. You might have Hersh frictions on how many times a year that you can even make a change in and says that's a big deal. So that the limitations that you have within your investments your 401K. Are worth taking a look at well if you call our office at 51. 22159. 401K. Helps you to diversify. Two do some things that will aid in your full picture. Of retirement planning were offering today the Red Line report which is a full blown retirement plan including. Everything else including Social Security timing report. If you have a pension how that plays into it which account when the risk pitcher in the cost of the investments so call us 512. 2159. Some folks are financial lives. And Nebraska are otherwise. If you're planning for retirement you have lots of questions how long moment money last. Would even need to support long term here got away VoIP unnecessary taxes that the most important question is bids. Can I get retirement planning and advice I can trust. Is that the lectern a cancer financial is the answer to all these questions and more you see her on TV TV and listen to her show financial eyes you're on talk radio present lantern is more than a financial advisor she's your unbiased financial and the kids because she's independent big bucks blustery corporations don't influence your suggestions about what to buy sell or offer you is that in camps our financial specialize in personal conservative retirement plans that provide delightful and security you winds and a personal service you in your money deserved it Suzanne lanterns and -- to work I'm your retirement planning to dean can't -- financial data. Come investor advisory services offered through global financial broke Capitol Hill seem SEC registered investment advisor. Welcome back to financial wise with C said Blackburn and Elizabeth James. Welcome back the financial life and seize up Blackburn. Owner of caps are financial. And my co host is Elizabeth James we're both fiduciary financial planners we both hold. An independent insurance license and I am also in mortgage loan officer and we're talking today. About my goodness the disasters that happen within four rolling k.'s. Because people are just kind of asleep at the wield their working their make a living the contributing to their Farley came and they think that's it I'm done I'm doing everything I can't. Well willow Nellie when you re tired let me tell yeah Elizabeth. I don't know shyly left for only came my employer in just ride the storms and takes and in come and 4% and. Don't hurt me. Well great question and I want youth. Dean meth act and come at on borrowing k's today because. We hear all the time from clients. Well it's you know it's I don't pay anything in my 401K it's free. Well we all know there's no such thing as a free lunch and I want to highlight any of recent article. From cnbc.com. Hit and 401K. Fees can destroy your retirement gee I'm trees. And again just mentioned. In this article it talks about a recent industry survey showed that 67%. Of Americans believe. They pay no fees and their 401K plan you. And in fact. It's such a common misconception. And you last year at the Obama administration announced. That hidden fees and act our payments were costing Americans about seventeen billion a year wow. And you ask what are these backdoor payments. And there are. That revenue sharing agreements and about 99%. Of plan providers so your 401K or employer sponsored plans. Except payments from mutual funds that they offer in your 401K plan. And it's called revenue sharing. Or more actually paying to play. And so when you take a look at your investment menu you have to wonder. Why are they being offered on the plan is that really the best investment firm me or is in the best interest of the plan provider. Paid to play. And where I heard that before I don't know something about the election night and I'll pay to play. And they're doing in our early days. Turn that's it's not good Elizabeth. But more importantly Natali talked about. The fear. Well I don't want to move out of my 41 K because it such a low cost. But I wanna talk about an even bigger problem of why you don't wanna leave your 401K. Your money in your 41 okay. And that is because you cannot put together our proper. Retirement income plan. Yeah by leaving in the form located just does not have the assets. Available to structure. A retirement income plan and what I mean by that in the beginning of the show I talked about the shift from. He defined benefit or pension world news today the responsibility being put on to you as the employee. And so wit that shift your now bearing the longevity risk which is just a fancy way of saying. That you are running out of money to risk of running out of money knicks if you think about it in a pension and you're going to be receiving a paycheck for the rest of your life no matter how long you live. And with a 41 K that longevity risk is all on your shoulders today and the problem is do you know. How long you're gonna lift. Or how the markets are gonna perform throughout your retirement years and mean and wish you have a crystal volume nobody has answered these questions. And what's even more shocking or just the statistics. A recent article. Business by Stephen Bloomberg how not to die hungry. Not turn your 401K into a pension. And just as I mentioned and I'm not knowing how you're gonna live in today a healthy 65 year old man. Now has a 25%. Chance of dying by age 78. But guess what he has the same chance of living to age 91 or beyond. Does he have enough money to last on nine blown and that's exactly the point so are you gonna be the 25%. The dies early and we hope not. I'm an if you're the 25%. That has a long life. While are you now have access to provide that so back come back you know follow me to this forum and K problem. So if you have to invest your assets encrypt attributed not send haven't invested that are gonna provide enough. Return to make to make the last night your retirement. You have to have. Your financial house built we talk about this a lot on the show. But you have to have some foundation assets which are gonna provide GA pension like income stream this rate in you're gonna have to have those. I'm in com producing walls sort of structure and your financial house. And then you're also gonna have to have the growth or a risk component. That's going to provide income for later. Com for an inflation. Hedge. And see one you cannot accomplish. Your financial house. Leaving your assets your forum in K so forget about fifteen math and you can't build your financial house in your 401K so call us. Today 5122159. And you can take advantage of the Red Line report we're gonna teach you. In that first appointment about your assets and find out if you know you are exactly where you need to be. Because if you're like most people listening you know you're an expert near field and you've saved in you've done well the chair expected. When your 401K to be here on financial planner you kidding me. Mean that's what you're expected to be and by getting professional advice you'll find out number one it's very cost effective for you you're gonna win in that one. It's 5122159. B thirty and remember some folks. Our financial lies. And the rest are otherwise. If you're planning for retirement you have lots of questions how long moment money last wouldn't even need to support long term here I don't I avoid unnecessary taxes that the most important question is dance. Can I get retirement planning and advice I can trust. Is that the lectern a cancer financial is the answer to all these questions and more you see her on TV TV and listen to her -- financial -- here on talk radio present lantern is more than a financial advisor she's your unbiased financial and they can't because she's independent big bucks blustery corporations don't influence -- suggestions about what to buy sell or doctor you Suzanne in camps our financial specialize in personal conservative retirement plans that provide delightful and security he winds and a personal service you when your money deserved it Suzanne lanterns and Alec Stewart I'm your retirement planning to dean can't see our financial data. Come investor advisory services offered through global financial broke Capitol Hill seem SEC registered investment advisory. Welcome back to financial wise with C said Blackburn in Elizabeth James. Welcome back to financial wise and we are having a great show about Brinkley the disasters of 401K planning and retirement. And why your working you know Elizabeth and I are retirement planners and. Why are you working in accumulating assets it's wonderful because what they do. Is a four early k's just say it's just kind of hidden in the background you make a paycheck and and there's money going into this account. Building building building which is great but if you're within ten years of retirement. You need to get when they specialist for retirement. So that we can help you and bill. Our am I doing that the same way is there some things and he be doing differently because growth at all cost. Buy and hold mutual funds have risk that's basically the track and the market like a dog and a leash. And as you know if you've got a big Furlan K unlike us Celeste fifteen months suspend. A roller coaster. Right. Not yes and I wanna highlight that because towards in the year. We are you know haven't had great ride on the roller coaster. And we you know you might have had experience in your 401K or Europe cannot. Why don't hear all this like hoopla about the trump rallies and the markets are just you know at record high days. But why is my 401K balance not doing so well or maybe I had a little dip in my account and it could be because of what you're invested then and there are so many people today. That likely talked on the first segment just don't know what to do foreign investments in their plans so what they did they do the target date retirement funds. Or risk based retirement funds are age model you know it's whatever you wanna call it they're all the same thing it is a fund of funds where you really have no idea what is inside that. Spot or your investment. And although the market has been rallying her record highs if you have you know heavy fixed income our bond position. You're not gonna experience it. In fact where we are and this interest rate environment in their rising interest rate environment. Yeah being in binds to a boy to risk. Could even be you know a worst place to be for now so the the point being here on trying to illustrate is that. If you don't know what you're invested and which is very hard to understand your 401K. We can help you out with that. Collison five point 22159030. And again Elizabeth Jane is like co host has a designation it's extremely powerful for those of you that have 401 k.s an hour. Trying to navigate these waters of my last ten years of working. You've got to come see us her and her designation is a charter retirement. Plan specialist. She actually has been the architect. Of many plans that are out there. And helped companies. Put together plans that will benefit them as employee hers. But the employees not necessarily as much. And it and like Suzanne mentioned my early career I spent. Designing. Employer sponsored plans so at the 401 k.s profit sharing pension plans. For our corporations and the their valuable tools are great tools and as an option for employees but my god they are they can be very complicated. My plan document in itself to understand the plan as hundreds of pages. So what I find today having that experience. And be able to translate that to you helping employees are participants today. On what's the value of that plan to them are really fully understanding. What their plan at work could and should do for them and let's utilize it up until that point eight. And then see what else could be a compliment. Tear plain and so not having all of your retirement eggs per say in one basket your 401K so it goes back to saying you know. Should you be only invested in retirement assets that are tax deferred like a 401K or an irony. And that is a another. Big problem with 401 k.s and everyone is familiar with B tax deduction and they get on their contribution you know everyone understands act as they enjoy that. Year after year and they contribute. But what people fall short on is the planning. On what portion of that. 401K or IRA today actually own when it's spending. Incoming retirement because they. They fall short of accounting for the taxes that they on that yeah and how exactly under affect their retirement plan in so there is also an offset whenever you start peeling Social Security. And if your income thresholds are higher than certain numbers they're going to have. 85%. Of the Social Security taxed. And another. Important thing out today with aware the retiree landscape is going the cost of different. It benefits save Medicare. Those are now means tested or yeah have you you pay a higher premium. Depending on your adjusted gross income. Well what's. You know what Sunday that a fracture Jesse person come a distribution from that for a one K or an IRA. So you not only have to account for what you're on tax consequences are gonna be here after tax income but you have to take into consideration and what may be that potential increase for eighty premiums that you're paying. On your Medicare benefits whereas is that mentioned what about any bridge further reduction in your Social Security. I'm from pulling income from those you know favored tax deferred accounts well. In big chief creole language to what you just said. That is basically wanna have. Below is the man attacks leaving you as possible. Going to Uncle Sam you wanna keep this much money in your pocket. And going to the grocery store rather than paying big quarterly. Taxes because that's what happens with people that haven't done other types of accounts besides just. For Roland case an IRA so means a great idea when your in your thirties that's great but. Man oh man it's time to do some diversity so if you are with in ten years of retiring we would like to see you. I want you to pick up the phone and dial this number. 512215. Nine. The Red Line report will go into all the things that you've done to degrade job saving. And we look at how risky is it the Leno what type of mutual funds that you have in there and if they're appropriate for where you lark. We're going to price the relationship. We wanna see what is the fee based that you're paying. And find out if that makes sense for you in your family. And then we want to start peeling at the income over thirty years and make sure you don't run out of money. Now on a perfect world with no ups and downs we'll see how that does and then Morgan shake the trees. Shake Katrina meaning when he gets sick and you need to spend a lot more. What if your spouse dies and Nelson your single tax filer or you lose half of the Social Security. You know these are things that have to be accounted for in that red line report Elizabeth so call us. 512. 2159030. Or go to capstar financial dot com. And fill out a form looked check this out we want you to know unless there's video on there about us in all different topics so. Go to capstar financial dot com and remember. Some folks are financial wise and the rest are otherwise. 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