NEWSLETTERS-2023
BI-WEEKLY NEWSLETTER
Happy Thanksgiving
As we gather around the table with family and friends this Thanksgiving, our thoughts are filled with gratitude for the incredible journey we’ve shared this year. We extend our heartfelt thanks to each member of the K Financial community for being an integral part of that journey.
This year, we find ourselves reflecting upon the milestones and successes that have defined our year. Your trust and loyalty have been the cornerstones of our achievements, and for that, we are truly grateful. Your trust in our services motivates us to continually strive for excellence.
When you gather with loved ones this year, we hope your Thanksgiving is filled with laughter, warmth, and moments of reflection. Take this time to appreciate the people and experiences that bring you joy. In the midst of the holiday hustle, may you find moments of stillness to recognize and cherish the abundance that surrounds you.
Thank you, from the bottom of our hearts, for being a part of the K Financial family. Your stories make every day a rewarding experience. Your feedback, experiences, and successes are the driving force behind the services we provide, and we are excited about the opportunities that lie ahead. As we approach a new year, we are committed to further enhancing our offerings and providing even greater value to you, our valued clients.
We look forward to continuing this journey together. Wishing you and your loved ones a Happy Thanksgiving.
Greg & Jill
Greg Korn, CFP® President & Investment Advisor Representative
Toll Free: 833-788-0404
Fax: 814-357-9070
Important Disclosures Regarding Email Communications
Advisory services through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. K Financial LLC and RWA are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Retirement Wealth Advisors, Inc. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.
Copyright (C) 2021 K Financial. All rights reserved.
Segmenting Your Investments into Buckets
The unknown. One of the most difficult things to do as a retirement planner is to make tough decisions with incomplete information. These decisions would be so simple if we knew things, like how long we were going to live, what our health will be like, how the economy is going to be and whether there will be any major events that will cause the world to go into another lock down. Unfortunately, that’s not how life works and we have to make the best decisions with the information we have in front of us. One area that most of us struggle with, is the thought of losing money in future. We don’t like our accounts to go into the negative, especially when we have had major gains and are starting to make plans on how we are going to spend that money. It’s a kick in the gut when we give back those gains. As investors, this is our reality and we have to find a way to become a little bit comfortable with volatility, when it comes to our financial assets. However, being an investor and saving for retirement, is a different mentality than being an investor in retirement. Where I have landed to help clients with their mentality, regarding volatility with their investments, is to use a bucket system.
Retirement income comes from many different sources. However, those sources might not be enough to cover your daily needs, which leaves a gap. That gap can be filled by your financial assets. I like to have a combined ten years of funds in two buckets; the War Chest bucket and the Core bucket. Let’s start with the War Chest: This is going to be the most conservative of all the buckets. These funds are not going to risk your principal and are where cash is going to be kept to fund your gap. However, we don’t need five years of funds today. Therefore, I like to use investments that protect the principal but still might gain interest during a short period of time, say two to three years. With interest rates where they are, CDs can be a great option here. Multi-year Guaranteed Annuities are another great choice in this bucket. Currently Sentinel Security Life is offering 5.60% on a three year MYGA. What if you don’t want to miss out if the market does take off? This is where a Principal Protection Note comes into play. Your Principal is protected for a set period of time, say 13 months or 24 months. If the market goes up, you get a piece of the growth, but if the market goes down, you still receive your principal back after that set period of time. The goal of this bucket is to protect your assets in short-term investments with some potential for growth.
The Core bucket is where we have another five years worth of income. However, these funds are invested in the market, based on your risk tolerance. I am a believer in the U.S. economy and the markets. Therefore, I believe it is a place to have funds that you want to grow. We use several models to help accomplish this with our clients. The War Chest and Core buckets work together to provide you income for the gap. During growth times, we are going to use your Core bucket. However as we know, markets are volatile and we probably do not want to take funds out during a down period. This can create a downward spiral and reduce your principal as the markets also reduce your principal. Now you have less principal available to you when the markets turn around. Therefore, during this period, we use the War Chest to get us through, allowing our funds to grow back. Down markets can last for a while, which is why we have five years of funds in the War Chest to help handle this.
I hope your retirement is going to be longer than ten years, in which case, we need to plan for the future. This is why we have the Long-Term bucket; to grow your assets for later in life. The grocery store has given us a big lesson on inflation over the last couple of years. How we fight the inflation risk, is to have investments that will historically outpace inflation. Time is your friend when you have funds in more volatile investments, like the S&P 500. In the article, Time, Not Timing, Is What Matters, they state that the longer you hold funds in the S&P 500, the more likely you are to have a positive outcome. The chances of growing your funds after one year are 73% and the chances after ten years are 94%. Therefore, this is the place we are looking to for growth. However, I am a very diverse investor and we are still going to put your money to work in many different ways. Some examples are a Growth Annuity, ESG (Environmental, Social and Governance focused), basket of growth or dividend stocks, technology and structured notes. All of these come with the objective of growing funds, to build a pot to refill your income buckets in the future. I also like to carve out a portion I call, Fun Money. This is because you never know when an opportunity might come up in your life that you simply cannot pass on. As I reinforce over and over, we are here to live life to its fullest and must be ready to take advantage of opportunities that will give us a little more juice in our steps.
What we are trying to accomplish is to give your funds a job and a goal. A portion of your funds are to provide you with income, but just because you are retiring, doesn’t mean you are landing the plane and need all of the funds tomorrow. We hopefully have twenty to thirty years of life in front of us, and need to invest with that mentality. However, we also have to sleep at night and don’t want the market to determine our spending patterns. We need a system that gives us peace, but also plans to support our future needs. I feel the bucket system does that for my clients. More thoughts from behind my desk in a couple of weeks…
These newsletters may be shared! If you know anyone that might be interested in this information, feel free to pass it on. As always, if this resonates with you, reply to this email and we will set up a time to discuss your situation in more detail.
Greg Korn, CFP® President & Investment Advisor Representative
Toll Free: 833-788-0404
Fax: 814-357-9070
Important Disclosures Regarding Email Communications
Advisory services through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. K Financial LLC and RWA are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Retirement Wealth Advisors, Inc. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.
Copyright (C) 2021 K Financial. All rights reserved.
Planning for 2024 Healthcare
This is the most painful newsletter I write every year; it is regarding the annual enrollment for healthcare. I’ve written several in-depth newsletters about Medicare in the past that are still relevant today. You can check them out on our website. The reason these newsletters are so painful is because there is only so much you can say about healthcare before you feel like you’re repeating yourself. And who wants to read about healthcare over and over again? Therefore, I am going to do my best to actually make this newsletter about healthcare, somewhat enjoyable. Let’s dive in.
My parents can attest to this fact: I have been very competitive my whole life. Even to this day when we play family games, I want to win. As an advisor, I want to be the best in the area and will put in the work to try and attain that. Why does this matter when we are talking about health insurance? I am glad you asked. First, let’s talk about PENNIE; the Pennsylvania Insurance Exchange. This is health insurance for individuals that are under 65 years old, who do not have insurance coverage from an employer. The insurance companies’ “game” is to make as much profit as possible. This is evident when the annual enrollment period comes around. Every year they add new health insurance plans to PENNIE for you to choose from. However, what is funny about these new plans, is that they look very similar to the plans from the last few years. Why would they do this? This is what I’ve noticed; last year’s plan, which is almost exactly the same as the new plan, costs more because they are banking on people being lazy. You’ll generally get a notice that states if you want to stay on your plan, it is going to cost x number of dollars more this year. No worries though, you don’t have to do anything, you will simply roll right into next year on the same plan. This is where I put on my Superman cape for my clients and say “no” to that. We re-run your information, which is realistically about 10-15 minutes of work, and we sign you up for this year’s new plan (almost identical to last year’s plan), saving you money. I have seen clients save over $100 a month, just by signing up for the new plan. That’s a win for us over the insurance companies. The moral of this story is, re-run your PENNIE plan every year.
The same goes for Medicare. You have the ability to change Medicare Advantage plans every year. This has become such a competitive market, that we, as consumers, end up getting better benefits every year. The insurance companies want your Medicare dollars so badly that they keep adding features. Here is a list of features they have added over the last nine years, since I first started working with clients on Medicare: increased dental and vision coverage, flexibility to see any dentist, cards to purchase over the counter products, transportation benefits, food benefits after hospitalization and flexible cash benefits. What I have also noticed, is that there isn’t much of a difference in the copays and coinsurance between companies. It is starting to come down to the cost of the medications you are taking and the network of doctors, as the decision drivers. There usually isn’t as much switching going on in the Medicare Advantage world as in past years. However, I always encourage my clients to have a discussion about their current plan, if there is a need to switch or if there is something new in the area.
For you Medicare supplement users, this comes down to price. If your price has shot up, it’s time to shop. I tell every new Medicare supplement client, expect to switch your plan in four or five years because we will likely be able to significantly improve your cost. Of course, we have to go through underwriting for you to get approved, to be able to make the switch. In the end, however, it can be well worth it. Again, a win against the insurance companies.
I see the biggest difference in the overall cost of health insurance in the drug plans. To me, this is the most important thing to do every year–run your prescriptions and the pharmacies you use against all the prescription drug plans in your zip code, to find out which is the best for you. This could be thousands of dollars saved over the course of the year. More money in your pocket and less in the insurance companies’ pockets is another win.
Insurance plays a huge role in our lives. However, I’ve learned over the years how the insurance companies play their game. Therefore, we have to play our own game and know their approach to take advantage of getting the best insurance for us, at a lower overall cost.
Thankfully, that painful newsletter is done for this year! More thoughts from behind my desk in a couple of weeks…
Greg Korn, CFP® President & Investment Advisor Representative
Toll Free: 833-788-0404
Fax: 814-357-9070
Important Disclosures Regarding Email Communications
Advisory services through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. K Financial LLC and RWA are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Retirement Wealth Advisors, Inc. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.
Copyright (C) 2021 K Financial. All rights reserved.
Vision
Every year Jill and I take on a major project around our house. We are trying to make long-term improvements that build upon one another to improve our quality of life and increase the value of our property. The unfortunate thing is that Jill really doesn’t understand the scope of my visions when it comes to our landscaping. This year’s project was a large fire pit area next to our pavilion. I am the driver of the landscaping and outside work. It goes back to wanting to be some type of architect or landscape designer, once upon a time. I am always checking in with her, telling her what I am thinking and wanting to know if it makes sense to her. Then I get the go ahead and I begin diving in with my vision. Well, sometimes you find out your vision doesn’t exactly match reality. This can also happen with your retirement vision.
I am always trying to grow as an advisor and improve my practice to help clients live their best lives. Part of that growth has been really understanding your vision for your retirement. When you daydream about what your retirement is going to look like, what do you see? What’s awesome about this career, is that I get to hear about many different visions of people’s ideal retirement; traveling, hunting, fishing, camping, painting, volunteering, working part-time, selling their home to live in an RV, golfing, hanging out with grandkids, gardening and so on. The list is endless, and I love hearing about new ideas.
Well, I dug out the space where I am building our fire pit and moved a ton of dirt and rock to get it set for the next stage. Then, when Jill and I went looking at our options for the pavers, fire pit and retaining wall, we found what we liked and it matched the vision I had about how I wanted the area to look. I did all the calculations for the materials we were going to need and sent it off the sales rep to get an estimate. POW!! My vision blew up. The estimate came back at $11,700. To put this in perspective, we had roughly budgeted for $4,000 to $5,000. As always, when it comes to these projects, I recruited my dad into helping. He’s great at the details and making drawings to match my vision. He is also not a bad laborer for being 74, but my mom told me I sent home a tired puppy this past weekend. Anyway, when I let him know the cost, he asked, “Didn’t you price this out before you started?” Of course not, I didn’t want the cost to get in the way of our vision and our dreams.
I feel the same way about an individual’s vision of retirement. I don’t want you to have any limitations on your visions for what your life will look like when you retire. I want you dreaming to the max; I want you pushing yourself to get every bit of life out of your dreams. If we start with cost, then that limits your vision and walls off opportunities. Yes, the reality of this particular vision of our fire pit wasn’t something we could accomplish. And yes, there are going to be ideas in your initial vision of your retirement that might not be realistic. However, let’s not let that possibility stop your relaxing evening on the back porch dreaming about your future. That’s too much of a downer. What if our budget for the fire pit was $15,000? Then that $11,700 quote was a bargain. I never want to hamper our big ideas and never want to hamper your big ideas about your retirement.
Now, this is where the real work begins. How do we accomplish our visions and dreams with the resources we have? This is some of the most enjoyable work I have–helping clients accomplish their vision without them worrying about running out of money or cutting back on their lifestyle. One of my favorite stories about this involves a couple that wants to be able to do one major vacation every other year. After diving in and talking through things, we found a way that they could do a major vacation every year. It is so enjoyable for me when they call and tell me about where they are going to go each year. It’s a great feeling to know I am helping clients live out their visions.
So I made some adjustments to the fire pit, pavers and retaining wall material. However, the cost was still coming in around $7,000 to $8,000. Jill dove back in, looking at different ideas and found what became our final plan, using decorative pebbles as our walking surface instead of pavers. I found a different place to purchase materials for the retaining wall and we went a slightly different direction for the fire pit. We love the look and can’t wait to spend many evenings relaxing next to the fire. Oh, and the total cost came in around $4,000.
Don’t stop daydreaming about your ideal vision of your future. It may not be entirely realistic but there is a foundation in that vision that we can make happen. You never know; you might end up with something that is a little different than you thought you would end up with, but you end up loving where you landed anyway. More thoughts from behind my desk in a couple of weeks…
Greg Korn, CFP® President & Investment Advisor Representative
Toll Free: 833-788-0404
Fax: 814-357-9070
Important Disclosures Regarding Email Communications
Advisory services through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. K Financial LLC and RWA are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Retirement Wealth Advisors, Inc. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.
Copyright (C) 2021 K Financial. All rights reserved.
The little things
I’m back. I’m taking a couple of days away from the daily grind to focus on other things and recharge the batteries before our busy season begins. I say that with a half smile on my face because this summer has been its own busy season. We purchased an old, run down building in downtown Philipsburg for our new office. Therefore, we have been going through the process of planning, getting permits, gutting the place and solving a water issue in the basement. On top of that, we are putting in a new fire pit at our house and of course, we can never just do something simply. We have big visions and it takes a lot of work to accomplish those visions. I know our family and friends look at us as crazy people that never stop adding to the things we already have on our plates. We just laugh and keep moving forward because this is who we are. All that to say, what I really want to talk about today, are all of the little pleasures in life that we tend to miss. But without those little things, we are not able to accomplish the big things.
About a year and half ago we were on vacation in Florida with Jill’s family. One of those days we were walking around the local shops of St Petersburg. We stopped in the Naples Soap Company to look around. The saleslady insisted I use a salt scrub with beeswax in it. I humored her and washed my hands. That was the exact moment that quadrupled our soap budget because that is the only soap we use now. That soap was also the spark for this newsletter because as I was grabbing a new bar the other day, it started me thinking about the little pleasures in life. We just enjoy this soap. We get new scents all the time and it is a small thing that starts our day right. There is no need to spend the extra money on this soap. I could easily get just as clean with a bar of Dove, but it doesn’t bring me the same joy. So that has sent me on a quest to look for all of those little pleasures in life that bring me that joy throughout the day. What that has also done is made life a little more enjoyable because I am opening myself up to see the good in my day and not just focusing on the things that aren’t going right.
We need this more than ever right now. The next year and a few months are going to be intense, as we vote again for the next president. There is so much negativity and hatred in the world right now. The internet and social media allow people to fire off awful things across the country at each other from behind their phones. How do we not feel that negativity each day and allow it to drag us down? We need to focus on the little things in life that give us joy. What’s neat about those little things is that they are unique to you. You just need to be looking for them. You need to be aware of them so you can enjoy those moments and help combat the negativity in the world around you. Mindset is a huge factor when it comes to how your day is going to go, and what we choose to focus on has a major impact on our mindset. I know my mindset has been improving as I focus on those little things in my life that I am happy to have.
Jill and I used to get up, workout on the weekdays and then I would make coffee and we would have it as we got ready. I drank a lot of coffee in the shower or while I was ironing clothes. On the weekends we would sit and drink our coffee together before getting ready. Then we recognized how nice it was to start our day that way, taking fifteen to twenty minutes for each other before diving into the day. Therefore, we added it to our weekday routine. It’s coffee; it’s just a drink but it is now one of those little joys we get every day that makes life so much easier. I encourage you to pay attention throughout the day and look for those things in your everyday life that give you joy. Take a moment and really cherish those. They will make your day better. We know the world doesn’t want to let you have them because it wants you to rush through life, onto the next thing. But those moments can have a compounding effect on your enjoyment of life. And if we are not here to enjoy life, then why are we here?
Well, we had our first tragedy with the chickens–a fox got one of them. How does my family respond to tragedy? We bought more chickens. That’s how. Now we are up to eight. We call Asher the chicken whisperer because he spends time watching them and keeping them from wandering into dangerous areas around our property now. And the chickens follow him when it is time to put them back in the coop. Without him, it takes a three person team to get them back. Have a great couple of weeks and more thoughts from behind my desk soon…
Greg Korn, CFP® President & Investment Advisor Representative
Toll Free: 833-788-0404
Fax: 814-357-9070
Important Disclosures Regarding Email Communications
Advisory services through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. K Financial LLC and RWA are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Retirement Wealth Advisors, Inc. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.
Copyright (C) 2021 K Financial. All rights reserved.
Rising Interest Rates and Raising Chickens
I am an 80s child; neon clothes, girls with big hair, rock bands and the Giants winning their first Super Bowl are big memories of mine. Some things you may remember from the 80s are the high inflation, high interest rates on loans and high interest rates on savings. What you might also remember is those saving rates going down and never really bouncing back. Since we’ve been going through a year of higher inflation, the Feds have worked on raising interest rates to slow it down. When lending rates go up, so do savings rates. At the last two meetings, the Feds only raised rates by .25%, after raising them by .50% and .75%, the last six times. Therefore, it seems like they are slowing down on raising the rates. What could we be doing now to reap some of these benefits? We may want to lock in some higher savings rates on our funds that are currently sitting in investments, with a very low rate of return. Here are some current returns on a Multi Year Guaranteed Annuity, with a minimum premium of $20,000:
Oceanview Life and Annuity Company 2 years 4.05%
Delaware Life 3 years 4.80%
Sentinel Security Life 5 years 5.45%
These Multi Year Guaranteed Annuities work very similarly to CDs, in that they have a fixed time period in which you must keep the funds in the account. If you take the funds out earlier, you will have a surrender charge. Therefore, you don’t want to put funds in an annuity unless you know you won’t need them prior to the maturity date. These can be a great addition to your overall plan, if you know you won’t need the funds for a couple of years, but do not want your principal at risk. You can have the funds mature at one year, two years, three years, etc. *
I’ve talked about this in the past–how I have lost control in our home. Maybe I should come to realize that I never really had any control in the beginning. During one of our Sunday dinners, the topic of having chickens came up. Jill and the kids (and even I) were joking around about having chickens running around our yard. Suddenly, red flags start popping up in my brain–more work for me, chickens and dogs getting along, the foxes that roam through our property will have a field day, on top of the fact that my dad says the worst job on the farm is cleaning the chicken coop. I am literally starting to sweat because this is what happens in our family; Jill gets an idea and all the kids get on board. It is like a freight train and I am no Superman so there’s no stopping that train. I am in the anti-chicken crowd (population of one), hoping this is just everyone joking around about it and it ultimately will not go anywhere. My little glimmer of hope died one day when Jill tells me Austin is going to Tractor Supply to get some chicks. You guessed it; we now own four chicks and to this day, we don’t know how many hens we have and how many roosters. I am really hoping for just one rooster.
I guess my Missouri farming roots are coming back to get me. We have four dogs and four chickens. Very fortunately, none of the dogs have gone after a chick…yet. It is interesting to watch them together though, Elvis and Priscilla don’t care much about the chicks but Sunny and Cher are obsessed with them. I really don’t know what to do because the idea of a pot belly pig is now being tossed around. What about a cow or a horse? I have no idea what is coming down the road, but Jill and the kids are talking about what animals we are going to add to our ever-growing farm. Send help.
Enjoy the great weather we’re having. I will have more farming tips from behind my desk next time.
*Index or fixed annuities are not designed for short term investments and may be subject to caps, restrictions, fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer. Please refer to our firm brochure, the ADV 2A Item 4, for additional information..
Greg Korn, CFP® President & Investment Advisor Representative
Toll Free: 833-788-0404
Fax: 814-357-9070
Important Disclosures Regarding Email Communications
Advisory services through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. K Financial LLC and RWA are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Retirement Wealth Advisors, Inc. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.
Copyright (C) 2021 K Financial. All rights reserved.
It's Never Too Late
You may have thought to yourself, many times, or know someone who has said something like this; “I am too old to start this now. Years ago would have been a great time, but it’s too late to make it happen now.” However, to me, that’s just an excuse to prevent you from doing something that you might really want to do. We like putting roadblocks in front of ourselves or finding ways to avoid pushing ourselves to do something that might be difficult. The reality though, is that it is never too late to begin something.
A couple of individuals have inspired this newsletter–Jill, and a prospect that I recently met with. Jill has bounced around the idea of becoming an attorney since she was 28 years old. She, at one point along the way, had even registered for the LSAT. Long story short, life got in the way and she went in a different direction. The problem was that this has always been sitting with her, since that time. I am happy to say that this year, she finally pulled the trigger and took the LSAT. She began studying and “quit” several times in the months leading up to the exam. Despite her doubt, she rocked the LSAT and was offered admission to Cleveland State Law School! I am so proud of her and so excited that she gets to pursue her dream. You will be receiving future newsletters from Cleveland, as she has several residencies that she must attend, and I will get to hang out there, while she works hard in school.
My other inspiration is a woman that is starting a new business at the age of 67. That’s right; when the majority of individuals are usually starting into their retirement or in the prime of it, she is beginning a new adventure with huge responsibilities. That reminded me that we are here to live out every stage of our lives in a fulfilling way. We are here to do the things that make us want to jump out of bed in the morning and attack the day. Jill is so pumped about this opportunity to do something she always saw herself doing. We all have that thing that has followed us throughout our lives, and we continue to utter that famous word, “someday”. But life seems to take over and before you know it, you feel like it is too late. These women have just reminded us that it’s never too late to go for it. On top of that, history is littered with individuals that made a massive impact on the world later in life: Julia Child, Sam Walton and Martha Stewart, to name a few. Martha Stewart did not publish her first cookbook until the age of 41. Now, 40 years later, she is on the cover of Sports Illustrated swimsuit edition!
No more ‘someday’ for us! We need to stop thinking that just because we have let time pass, that it’s too late to accomplish our dreams. This is especially true if we are in retirement or planning to retire. It doesn’t have to be a new career; it could just be a hobby or something new that has interested you for years that you haven’t pulled the trigger on. I was just thinking about this yesterday: Of all the things I have wanted to do in my lifetime, we were in wine country a few weeks ago and I decided that I want to start a small vineyard on our land. Making our own wine, that is probably going to be awful, would be so much fun. What’s funny and perhaps a bit ironic, is that Jill just called and told me she bought a couple of grape vines, so…no “someday” for us. Truthfully, I don’t have much knowledge of winemaking, short of the questions I asked a couple of winemakers. My thought is that it would just be cool to just have grapes growing across the front of our yard that we turn into wine. I want to build several river tables for our offices out of the red oak slabs we got from our last house. Unfortunately, I watched a couple of chef movies recently and they have inspired me to want to cook a gourmet dinner once a week. Let’s not forget to mention the frisbee golf course that my dad and I have designed for our property. The point is, there should never be the word ‘someday’ in our vocabulary, in that context.
You’re probably wondering what type of attorney Jill is going to be. That has yet to be determined. However, I have asked if she can make Elder Law a part of her practice so we can help our clients get their important Estate planning completed. She’s all in.
Now, the moment you’ve been waiting for–some updates from the Korn farm: Chickens are getting larger and we have determined that we do indeed have a rooster. The dogs are obsessed with them and can no longer just go outside without a long stop in front of the coop. We have also added two cats to the mix. And finally, what would a farm be without a small tractor to complete all those farming tasks? I guess my farming roots are coming out in a small (big) way. Now go out there and start something new that you’ve always wanted to do because ‘someday’ ought to be today.
More thoughts from behind my desk in a couple of weeks…
Greg Korn, CFP® President & Investment Advisor Representative
Toll Free: 833-788-0404
Fax: 814-357-9070
Important Disclosures Regarding Email Communications
Advisory services through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. K Financial LLC and RWA are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Retirement Wealth Advisors, Inc. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.
Copyright (C) 2021 K Financial. All rights reserved.
Retiring to or retiring from?
I know it has been a bit since my last newsletter; my time blocking skills need a little improvement because it certainly wasn’t for lack of ideas. I have a ton of thoughts in my head that I need to get out. One of those thoughts came up a couple of months ago and it really hit home. I have touched base on this topic before in different ways. It comes down to one question: Are you retiring to something or from something? The answer to this question could have an effect on your overall happiness in retirement and therefore, on the rest of your life.
We have all had jobs that were a huge drag on our everyday lives–dreading Sunday evening and as soon as the week started, we were already thinking about Friday. That makes for a very difficult week, as you drag yourself through the days just to get to the weekend. Therefore, if this continues, as we get older, we start dreaming of the day when we can “take this job and shove it”. We simply can’t wait for the day we can call it quits. It seems like 62 can’t come quick enough so we can start Social Security and stop showing up. One of the problems with this, is that it might not be in your best interest to retire at 62. Your future income could suffer because of that decision. Maybe your situation isn’t as extreme, maybe you don’t hate your job, you just don’t love it. Again, you start thinking every morning, “It sure would be nice to not have to go to work today.” In either instance, you’re making the decision to retire from your situation.
Retiring from work might not lead to the happiness you were hoping for because the reasoning behind your retirement was just to get away from the daily grind of the job. When you close that job door, remember, you suddenly have 40 plus hours to fill. I have a client that had several projects around the house, but they didn’t last forever. A year later they had completed most of the work. Maybe you’ll hang with the grandkids and help out your kids. Unfortunately, those cute, young grandkids get older and they don’t need you as much. At first it will be great to not have to get up in the morning and go to work, but that greatness might not last long. With nothing planned, you’re getting up just to get up, which can lead to sleeping in more and no motivation to do much at all. There is a definite concern about depression in retirement and if you don’t have a purpose, there is an increased possibility of this happening to you.
This is why it is so important for you to retire to something. We need purpose in life; something that drives us every day and gives us a sense of connection to this world. You can definitely like your job but still be excited to get away from it because you have something to retire to. That can be an encore career, hobbies that you will now have time for, volunteering or even traveling to interesting places. The world is your oyster now. It is wide open to whatever you want it to be but you have find what it is that you truly want from the world, so that when you walk out that work door, you are skipping because you’re going to something else that excites you. It is a huge difference each day when you have something to get up for, versus just getting up because the rooster is crowing. I see it all the time when clients are excitedly talking about their plans versus just wanting to be done working. The energy level just isn’t the same and we want you to live your best life. Find your passion before you walk out the door or at least have a list of things that give you excitement about the future. That way you can try them all and find out what works for you.
Yes, relaxation is great and needs to be a part of your life but you’ll find that boredom will set in soon if there is nothing to fill your time. As I have said and will say, many times, retirement is not only about not having to work every day; it’s about finding our passion and living our lives to the fullest.
I will work on time blocking for this newsletter and get back on schedule. Everyone, enjoy the dog days of summer and let’s remember to live our best lives every day. More thoughts from behind my desk in a couple of weeks…
Greg Korn, CFP® President & Investment Advisor Representative
Toll Free: 833-788-0404
Fax: 814-357-9070
Important Disclosures Regarding Email Communications
Advisory services through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. K Financial LLC and RWA are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Retirement Wealth Advisors, Inc. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.
Copyright (C) 2021 K Financial. All rights reserved.
Be the Exception
The path we choose in life is on us. We have many different directions we can go, but I believe we should choose the path that makes us the exception. I know that a lot of us are already the exception, because I have met with you and talked to you about how you have lived your lives. Just the fact that you have met with me, makes you the exception. You have recognized that you need to do some planning and find out where you stand. According to a CNBC report, 99% of individuals do not use a Financial Advisor to help navigate the world. You, however, understand that there are things out there that you may not know the answers to, and want to make sure you’re making the best choice for you. Therefore, you seek help in those areas; you are the exception.
It doesn’t end there—we can seek input and gather advice that resonates with us, that will improve our lives. However, implementing that advice and putting plans into action to get things moving in the right direction, is the second part of that equation. This is where many of us, myself included, fall short. I do a lot of reading and listening to information that could improve my overall quality of life, but starting to implement those things can be difficult. I have fought with this all year when it comes to my health. I want to be the exception in this world, that thinks about health as a long-term play and recognize that what I do now, will have an impact on my future self. I had to face the fact that I know what to do but now I need to implement what ought to be done.
One thing that I do know is that, at K Financial, we pride ourselves on being the exception. We are talking weekly about ideas and things we can do to improve and go beyond expectations. I think because we have that mindset, we come across a lot of individuals that also have that mindset. It’s hard to be the exception in the world, but that makes sense because there wouldn’t be exceptions if everything came easy. Being the group that looks beyond what everyone else is doing, allows us some great opportunities that the majority of individuals do not have. You made a choice to live on less throughout your lives, to build up a foundation of assets that will take care of you for the rest of your lives. Unfortunately, this is the exception. I can’t tell you how many times I have heard throughout my career, individuals saying, “I just can’t put money into my 401(k)/IRA/savings because I need the money now.” Not recognizing the choices they are making now, is setting these individuals up for a major problem when they get to retirement.
How can we be the exception in retirement? First, we make a plan and look at all of your income sources. We figure out the best time to turn on your pension, Social Security, annuities, when to take funds out of retirement accounts and taxable accounts. When I was doing Medicare planning daily, I ran into so many people that would be retiring in three to six months because they were eligible for Medicare, but had no idea what they were going to get from Social Security. By taking the time to set up an income timeline, you are preparing yourself for a solid foundation of income throughout your lifetime, which to me, seems like the exception. Now that money will be flowing in retirement, you need to recognize that you are going to get taxed on those funds, which are different from W-2 or self-employment income. Developing a lifetime tax plan puts you way ahead of others, again making you the exception.
Life is full of risk and retirement is no different, so you have a plan to mitigate the risks that you might face. A major health problem can change your whole direction pretty quickly and if you don’t plan properly, you could end up with some pretty large expenses. Reviewing your life insurance, to make sure it will do what you were told it would do, and developing a Long-Term Care strategy are things that make you the exception. Doing Estate planning and having updated Estate documents in place to match those plans, has become a huge area of focus for me. You guessed it—by getting those things in place, you are the exception.
For some of us, these things are just part of proper planning in life. However, we are the oddballs in the world that work daily to improve our lives now and into the future. I am ok with being an oddball because I know that this approach will set me up for success. So, let’s continue to be the exception. It seems like a great way to live.
Have a great couple of weeks and we finally received some rain for those gardens. More thoughts from behind my desk in a couple of weeks…
Greg Korn, CFP® President & Investment Advisor Representative
Toll Free: 833-788-0404
Fax: 814-357-9070
Important Disclosures Regarding Email Communications
Advisory services through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. K Financial LLC and RWA are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Retirement Wealth Advisors, Inc. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.
Copyright (C) 2021 K Financial. All rights reserved.
Proactive Tax Planning
It’s not a holiday, but it’s a date we all know too well–April 15th. I’ve sat across from Jill over the course of the last month, as she has worked through our taxes. Let’s just say there were a few long days of stress to get everything completed. Being a Financial Advisor has really been an eye opener to me when it comes to lifetime taxes. The government has done a great job in contributing to our lack of awareness, when it comes to what we really pay in taxes. All you hear around tax time is whether someone got a refund or if they had to pay additional taxes. Does everyone really know the total amount they paid in taxes or the tax bracket they are in? I would venture to guess that the greater majority of us don’t realize the actual amount we paid in taxes last year. Many just know the refund amount, if there was one. We could have paid more in taxes than the year before, but wouldn’t really know that if we only focus on whether or not we get a refund. However, my guess is that the folks that do pay attention to taxes, will pay much lower taxes over their lifetime than the majority of people that do not pay attention. The government likes us sleeping at the wheel, so let’s not be those people. Instead, we should aim to be the people that focus on having the lowest possible LIFETIME taxes.
Sleeping at the wheel is what many of us have done since 2018, when the Tax and Jobs Act of 2017 blessed us with historically low tax rates. Guess what? Those tax rates sunset in three years and a majority of the tax brackets will go up. Looking back, one of the things we could have been doing to take advantage of this and to better prepare for retirement, is putting as much money as we could have into our Roth accounts through contributions and conversions. I don’t like predictions about the future because the majority of everyone’s predictions are going to be wrong. However, if you made me bet on which way the tax rates are going to go in the future, I would bet it all on them going up.
I started writing this on 3/22/23 at 12:42 and according to the US National Debt Clock our national debt was $31,632,440,678,212, at that exact moment. Six days later, when you are receiving this newsletter, the national debt is $31,647,110,365,145, a growth of $14,669,686,933! This is a problem because it never stops growing and there is no solution on the table to reverse this trend; not even so much as a solution to slow it down. Personally, this makes me nervous because one day this problem is going to come due and we don’t have a plan on how to deal with it. Bank bailouts to help prevent an even worse crisis don’t help. The government has been writing a lot of checks over the last 15 years to help stabilize the economy, on top of all the other obligations we have already agreed to: Social Security, Medicare, Military, etc. Remember, this debt is ours. One of the ways to help cover it all is by taxing us, which means increasing how much we owe.
Biden’s most recent budget proposal has increased spending, along with increased taxes on corporations and the wealthy. It does state that this should reduce our debt. However, doesn’t every budget proposal say that? That being stated, the big question is, why does our debt continue to grow? From where I sit, this is a government problem, not a party problem. Neither party can take the high road on the increase in our debt and claim responsibility. I believe at one point in the future, they will be knocking at our doors, asking for more money from all of us. Your future wealth and standard of living could be at stake. You have two choices, as I see it; you can sit back and wait or you can be proactive and set yourself up as best as possible with the options available to you now. What is your biggest concern? Is it your 401(k) and traditional IRAs, perhaps? These are funds that have never been taxed.
According to Congressional Research Service, there is $24 trillion dollars out there in a combination of Defined Contribution Plans, (401(k)s, 403(b)s, 457 and Thrift Savings Plans) and IRAs. That is A LOT of untaxed money, sitting out there, with such a large debt to pay. Congress already made a change to speed up getting these funds taxed, with the Secure Act. Before the Secure Act, an individual that inherited an IRA could stretch out the withdrawal of these funds over the course of their lifetime. However, now you must withdraw all funds within ten years of inheriting those IRA funds. Congress took out their eraser and changed the law on the Baby Boomers and their children, finding a way to increase tax revenues faster. The problem is that the laws are all written in pencil and you never know when their eraser will come out again to switch the rules. One of your options now is to work on converting those IRA funds to Roths over the next few years, while we still have historically lower rates. As I tell all my clients, these tax deferred assets are going to be taxed at one point; the questions are when and how much? You are in control of that answer.
Yes, taxes get me fired up! I read this quote this week from the book, The New Holistic Retirement, that drove it all home for me. It read, “The uninformed taxpayer will pay much more in taxes than the informed taxpayer.” My goal is to be an informed taxpayer and help my clients become informed taxpayers, as well.
Now, on a more enjoyable note…my mother-in-law and I enjoyed mimosas this weekend and started planting our seeds indoors, for our vegetable garden. We are pretty excited that we will have a full garden this summer. It has been about 15 years since I had a vegetable garden and I can’t wait to enjoy the fresh food we’re going to grow. More thoughts from behind my desk in a couple of weeks…
Greg Korn, CFP® President & Investment Advisor Representative
Toll Free: 833-788-0404
Fax: 814-357-9070
Important Disclosures Regarding Email Communications
Advisory services through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. K Financial LLC and RWA are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Retirement Wealth Advisors, Inc. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.
Copyright (C) 2021 K Financial. All rights reserved.
Time to Dream
I have spent the last three newsletters talking about positioning your future self and your legacy for success. Enough talk of your future self; time to focus on now and living your best life today. I am going to be asking you to dream again, but not just to dream; rather, to develop a plan to make that dream come true, year after year. When we were younger, many of us spent a lot of time dreaming about places we would like to visit in this world. However, there are so many barriers that prevent us from executing those dreams; kids, work, trying to establish yourself and just plain old daily life, to name a few. Now it is time to dream again–where on this earth do you want to see? This planet has so many cool places to see, and we only get one chance to see as much of it as we can.
The best way for me to help explain what I am talking about, is to show you how I go through the process. I love visiting new places in the world. The travel part can be exhausting, but can also be well worth it. Have you noticed when you leave your tv on, it starts flipping through random pictures of beautiful places in the world? This inspires me even more. On the top of my list of places to visit is Hawaii. I could definitely spend a couple of weeks checking out the islands. That might be a little too long for a flight, so heading south to Aruba might be the ticket. I’ve heard so many good things about that island. To avoid making Jill fly over a large body of water, there are cities that I would love to visit, as well; Nashville, Chicago, San Diego, Savannah and Toronto. I would enjoy spending time getting the vibe of a place and living a little differently than I do now…in the middle of PA. Now, my big dreams are to head international. I would love to see Greece, Spain and Portugal. However, the ultimate trip for Jill and I would be to Italy. I went to Rome with my mom and sister when I was a teenager and have dreamt about going back, my whole life. I don’t know why, but I also want to see the China Wall.
These are my dreams. Of course, I will have to make sure they align with Jill’s dreams or find places that both of us want to check out. However, we are still limited in our ability to get away and the amount of time we can spend away. You are not as limited, as retirement gives you the freedom to set your own schedule. If you’re not yet retired, then this is the perfect time to dream about those places you would want to visit. I would love to follow what two of my clients did–they planned a retirement trip. A week after her last day of work, they set out for a two-week adventure that included a cruise in the Caribbean. I believe it involved a stop in Aruba, as well! (If you are reading this while you’re on your trip, I hope you’re having an amazing time!) Their trip, and a book I am reading, Reimaging Retirement, inspired this newsletter. My clients are celebrating a lifetime accomplishment of hard work, by rewarding themselves with time together to live out their dreams. They put their dreams into action. That is what I call, living your best life.
One of the biggest problems we have is that we let our dreams just sit as dreams. We don’t do enough to live out those dreams. It takes action, every day, to squeeze every ounce of enjoyment out of our time here on earth. To me, checking out different places can give us a ton of appreciation for how cool this world really is. We all have different inspirations and places that we want to see, but I feel as though we do not put enough effort into visiting these places. It is easy to find excuses why not to make it happen. Instead, let’s start from the place of making our dreams come true. We are going to crush any barriers that stand in our way.
I have several clients that have told me of their dream vacations after retirement, but they just have not made those trips happen…yet. So guess who is going to be working to get these trips on their calendar and eliminating any barriers in their way at our next meeting? That’s right–ME. It is important to us that our clients live their best lives. We want to be inspiring you to live out your dreams.
Right now, take five minutes to write down five places you would like to see. Once you have the places, it’s time to make it happen. I would love to hear where everyone wants to go, so drop me an email of your list, if you’d like.
Leave it up to the banks to ruin a great newsletter about dreams, with the reality of failing banks. Here are some thoughts and information on the Silicon Valley Bank collapse.
Have a great couple of weeks and more thoughts from behind my desk soon… |
Greg Korn, CFP® President & Investment Advisor Representative
Toll Free: 833-788-0404
Fax: 814-357-9070
Important Disclosures Regarding Email Communications
Advisory services through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. K Financial LLC and RWA are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Retirement Wealth Advisors, Inc. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.
Copyright (C) 2021 K Financial. All rights reserved.
Successful Estate Planning
I spend a lot of time in my car and over the years, to pass this time, I’ve developed a habit of listening to Podcasts. I try hard to pass this habit on to my kids, but they all make fun of me instead; “Dad and his podcasts…I don’t want to ride with him.” Regardless, I credit my habit to Zig Zigler, who pointed out, if you use the time wisely, you can get the equivalent of a college education in a couple of years, by listening to educational material while you’re driving. I am living in the right time to make this happen, with phones that can download podcasts, cars that work with bluetooth and the endless subjects on podcasts to completely fill my brain with information, as I drive. One of the many subjects that interests me, that I listen to on a regular basis, is Estate Planning. I recently listened to a Podcast on this and felt that the information was important to pass on to you. Attorney Tim Sechler released a weekly show called Life & Legacy Show, and had an episode on, The Criteria for a Successful Estate Plan, that I wanted to share. He named four criteria that he believes will make your Estate Plan successful and I agree with him so much that I am including his criteria in my One Page Financial Plan, going forward.
1: Needs to Honor Your Life. When we compare our time on earth to the amount of time that earth has been here and is going to be here, it equates to a drop in a giant bucket. However, how do we honor the time we have been here and create a piece of history that reflects our presence here on earth? Our lives are our stories; very few people are going to know that story, but it’s being written every second of the day. Your Will and Estate documents are the last documents that will be a record of your story and wishes after you have passed. It will be a part of history and records forever. Remember, this is your life demonstrated in this plan; nobody else’s. It needs to show the world your impact on humanity and society. It needs to protect what you valued and needs to pass those values on to your next generation.
2: Protect Your Resources. I love the opportunity this country has given to me, but I also want to make sure that what we have built goes to those who we feel will best protect our legacy. That means developing an Estate plan to keep taxes as low as possible, protecting our resources from future events that could put stress on our assets and educating the individuals we have asked to execute our vision. The law has developed tools that everyone can use to do this. Currently, Austin is working on refinishing our cabinets in our kitchen. We could say, here’s a hammer, a screwdriver and sandpaper–good luck. Instead, we provided him with all the tools he needed to make the finished product a work of art. It is coming out great so far. Why not use the tools available to you to protect your resources for yourself, your spouse and your family, while you are alive? This plays into number three, below.
3: Set Your Family up for Success. Do you want your legacy to be, “Dad didn’t do any planning and we don’t know what he has or where it is. Now we are left to deal with the court and it is a nightmare.” Of course you do not want that, but many individuals do exactly that. Let’s have an Estate Plan that takes care of our spouses and families, and makes it easy for them to follow and execute. However, don’t wait until it is too late to discuss these things with your family. They need to know who is going to be in charge and you need to explain to the person who is in charge, what their responsibilities are, by educating them now. We want our families to be successful throughout their lives, as we get to enjoy watching them grow. Therefore, we also want them to be successful long past our time here on earth, and what we do now can help make that happen. That might mean not just dumping a load of money on their plate; it might mean setting up parameters that will help them to be successful with their inheritance.
4: Plan Needs to Work Today and Tomorrow. We blame Jenna for losing our crystal ball, so I am just as blind about the future as you are. With this limited knowledge, we have to develop a plan that will work if something happens to you in the future, whether that is soon or if it is 30 years from now. Those needs are not the same so our Estate plan has to prepare for both. Jill and I are in the process of updating our Estate plan. I am not so naive as to think that once we complete this that we are done for the rest of our lives. However, we’re going to do our best to reflect our wishes and values in this plan that will work for the short-term, as well as the long-term. In doing so, we know we’re going to have to revisit the plan several times throughout our lives to make sure it keeps up with changes in our beliefs and in the laws.
This year I have started out discussing Long-Term Care and Estate Planning because these are two areas that I believe a lot of retirees are weak in. A chain is only as strong as its weakest link, so it is time to take care of these areas and build a strong chain that can handle whatever is pulling on it. Time for me to figure out something to chat about next time. More to follow in a couple of weeks…
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Greg Korn, CFP® President & Investment Advisor Representative
Toll Free: 833-788-0404
Fax: 814-357-9070
Important Disclosures Regarding Email Communications
Advisory services through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. K Financial LLC and RWA are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Retirement Wealth Advisors, Inc. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.
Copyright (C) 2021 K Financial. All rights reserved.
My Five Retirement Beliefs
Throughout the last decade, I have focused my work on clients that are in various stages of retirement, from those who are just starting to plan, to those who are already years into those retirement plans. As I continue to interact with these clients, naturally, I have developed some overall beliefs about retirement. Today I am going to discuss my five core beliefs. As I was preparing to write this newsletter, I actually began with a list that was much longer, but after some thought (lucky for you), I narrowed my list down to the five core beliefs below:
Belief #1: Retirement is SO much more than finances
When I begin working with clients, we spend a lot of time discussing various aspects of their financial views and what their financial future looks like. However, to me, this is about setting the foundation for them to be able to live their best life in retirement. Once we address this, and my clients have peace of mind regarding those financial plans, they can focus on living. They can start enjoying their freedom and exploring the things that give them fulfillment in life. That stated, I am actually going to sneak another belief inside this one, which is that you must have interests or activities that will fulfill you in retirement. We have at least 40 hours per week that need to be filled now, preferably with something other than watching the news. Life is meant to be lived to the fullest and now that you don’t have those pesky work obligations, you are the captain of that ship.
Belief #2: You don’t need a million dollars to have an amazing retirement
I’ve seen it all, when it comes to assets available to clients when they are starting their retirement. Yes, more is generally better, as less sacrifices will need to be made throughout retirement, but having more does not guarantee an amazing retirement. What I’ve discovered is that, if you have lived within your means before retirement, and developed a fulfilling life up to that point, then when you go into retirement, those habits are likely going to continue into the future. I have a ton of clients that don’t have a million dollars in the bank and are living a great life because they know who they are. They are not worried about ‘Keeping up with the Jones’s’, so to say; rather they are focused on themselves and pursuing a lifestyle of personal satisfaction. In other words, keep your eye on the prize and try to focus on fulfilling your dreams and ambitions.
Belief #3: We are horrible about planning for the future
I would say about three out of four of the clients I have met with, have no Estate plan–not even so much as a simple will, when we start planning. A majority of these same clients, when I ask them about their Long-Term Care strategy, tell me that they also do not have one. Yep, according to statistics within my sample population, we are horrible about planning for what could be, one of the single largest expenses in the future, and ensuring that what we leave behind will go where we want it to go. One of the best ways to plan is to start with the endgame in mind, so that we can take steps today to see to it that things play out how we would like them to. Therefore, no more wasting time! Let’s get these things done.
Belief #4: Do things now for your future self
We put things off constantly, when we tell ourselves, someday. Someday I will watch what I eat; someday I will exercise more; someday I will eliminate the things that cause me stress. The list goes on and on. Retirement should be a wake up call that someday ought to be now. The simple fact that I always come back to is that the amount of spins we have on this earth is becoming less and less. Health is going to be a major factor in how we get to spend our remaining time. I know, I know, “Well Greg, I am 70 and it’s too late to change now.” Change doesn’t happen overnight but it can still start now. The payoff could be huge. Personally, I would like to continue to be an active individual in society when I am in my 80’s. The only way that is going to happen for me, is if I put in the effort now.
Belief #5: Taxes matter and tax planning is necessary
Taxes are so different in retirement. Your Social Security income has its own tax rules, known as Provisional Income. The eraser keeps coming out in congress with the Secure Act and Secure Act 2.0; they like to change the rules on us. Required Minimum Distributions are coming. In 2026, our current tax laws will sunset and we will convert back to 2017 tax laws. You have control of what hits your tax return and when. Roth Conversions should be looked at annually. The question you have to ask yourself is, how much of your income and assets are going to land on your side of the ledger versus in the government’s pockets? This is on you and if you don’t plan, the government has no problem accepting your tip to them.
Of course, there are many more beliefs that I have when it comes to retirement. However, I will save them for another newsletter. Congratulations to all my Missouri family members for another championship season by the Kansas City Chiefs! More thoughts from my desk in a couple of weeks. |
Greg Korn, CFP® President & Investment Advisor Representative
Toll Free: 833-788-0404
Fax: 814-357-9070
Important Disclosures Regarding Email Communications
Advisory services through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. K Financial LLC and RWA are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Retirement Wealth Advisors, Inc. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.
Copyright (C) 2021 K Financial. All rights reserved.
Protecting Your Home
I have owned five homes throughout my lifetime. I am hopeful this will be my last one! We are excited about the plans we have for this place. However, there is a chance, for any one of us, that our final home might be a nursing home. Therefore, one must consider what will happen to the home that they will have lived in for most of their lives. This is a question that many of us will face, when the reality is that 70% of individuals over age 65, will spend some time in a nursing home. The issue here, is that our homes are an asset of ours and for some of us, it may be the largest asset. Sadly, that makes our home a resource that can be used to pay for Long- Term care costs. So how can we handle the issue of protecting this asset? The best answer that I can come up with is, by planning.
One solution to this problem that I hear a lot is, “I am putting my home in my kids’ names”. I have run across clients whose parents put their home into their names and it worked out just fine. However, there are several reasons why this may not be the greatest idea and could put your asset at risk. First, by doing this, your children now legally own your home and it is their asset. That means any legal action against them, puts your home at risk because that asset can be used to satisfy any debts they may have or suits they lose. Through no fault of your own, you could lose equity in the home, or even lose the whole home, depending on the extent of the creditors’ actions. This also means that if your child gets a divorce, that asset can be counted as part of the marital assets that are subject to being split at the time of separation. Although these are not common events, they still do happen and therefore, present a risk in transferring ownership of your home.
Another potential issue is control; you have no legal authority over the home anymore. Therefore, your child(ren) could legitimately do whatever they wanted with the home, if they are the owners. They could go so far as to kick you out of the house. Now, obviously, the hope is that you don’t have children that would do that, but the point is that you still would not have control anymore. You couldn’t even go to the bank to secure a home equity loan if you fell upon hard times or wanted to do some home improvements. From the tax perspective, you lose the step-up provision that allows your children to inherit the home without paying the capital gains. If you bought the home for $50,000 and it is worth $200,000 when you pass away, there are $150,000 in capital gains in that property. However, with the step-up provision, your kids inherit the home and don’t have to pay those capital gains. Rather, their cost basis steps up to $200,000. If you transfer that home into their name prior, that step-up provision goes away and if/when your child(ren) decide to sell the home, they will be responsible for the capital gains taxes.
Another option is an Asset Protection Trust. What you would be trying to accomplish here, is to put the home, and other assets that you want to protect, in the APT to protect against creditors, such as a nursing home. Now, you still maintain control of the home through being the Trustee, but you would not be the beneficiary of the assets in the APT. Therefore, if you end up in a nursing home in the future, you are not the owner of the home; the trust is. This makes the home no longer a part of the assets that the LTC facility can look at to pay for your care. Being that I am not an attorney and can’t give legal advice, I won’t go into too much detail on how this works, but that’s the main concept that you could consider, if you want your home to be safely passed on to your beneficiaries.
Our home has a lot of memories from our life and for our children. It is something very personal to us, as we decided what colors to paint the walls, the pieces of furniture within, who lives in which room and all of the improvements that fit our vision of our home. To me, this comes down to priorities and what is important to you. If you know that one of your children wants the home after you pass away, you would obviously want to do everything you can to protect that home from the nursing home. Even if no one is going to live there, the home will be sold and assets split amongst your beneficiaries, then this also might be a reason to do everything you can to protect that asset. If I asked you if you would pay $5,000 to purchase a Life Insurance policy that would give your kids $200,000 when you passed away, wouldn’t the greater majority of us say, ”sign me up”? Well, what if you have $200,000 equity in your home? Doesn’t it make a ton of sense to protect that asset for $5,000 (an estimate of the cost a Trust), so it gets to the people you want it to get to?
Remember, the system is broken and you have to go broke to get assistance in helping to pay for Long-Term Care. You can do nothing, get lucky and everything might work out for you, or you may find out just how broken the system is, once it is too late to do anything. As I said at the beginning, your best solution to solving this problem is to plan and that plan needs to begin today because there is a five year look back when you go into a facility.
Nothing like passing a snowy winter day by writing about Long-Term care and Asset Protection. More thoughts from my desk in a couple of weeks. |
Greg Korn, CFP® President & Investment Advisor Representative
Toll Free: 833-788-0404
Fax: 814-357-9070
Important Disclosures Regarding Email Communications
Advisory services through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. K Financial LLC and RWA are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Retirement Wealth Advisors, Inc. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.
Copyright (C) 2021 K Financial. All rights reserved.
Planning for Long Term Care
Time to take on a new year! Ironically, I will start out this year by telling you about last year. Last year, I had several meetings with prospects and clients about how to handle the future problem of Long-Term Care. As a practice that focuses on working with clients who are preparing for retirement and the journey through retirement, I think we can agree that it is important that I have an understanding of what the risks are in retirement. I will start out by stating that future nursing care is a huge concern for all retirees, both financially and otherwise. The comments I hear all the time are, “My spouse/kids are just going to take care of me at home, and if they can’t, they will ‘take care of me’ and then bury me in the backyard.” Truthfully, I don’t see many news stories about a wife ‘taking care of her husband’ because he was about to go to a nursing home and law enforcement offering any sort of leniency in the matter, so I am going to have to advise against such a plan. Seriously though, what this says to me, is that we are not being honest with ourselves about the realistic possibility of spending some time in a Long-Term Care Facility. An article by Pennsylvania Health Care Association, states that, “An estimated 70% of people, currently turning 65, will require long-term care in their lifetime, and they will receive care for an average of three years.” Unless I am the luckiest advisor alive, and work only with the 30% of people that won’t, it seems as though we have some planning to do.
I have attacked this problem from many different angles so that I can give my clients the best advice when it comes to handling future LTC needs. As humans, we tend to be less than perfect, when it comes to preparing for the future and putting things into practice that will benefit us later in life. Otherwise, we would probably all be millionaires, who are in great physical health as well, because there is just so much research telling us the steps we can take to make that happen. However, the truth of the matter is that most of us are not even close to what we could have been, had we only started earlier or practiced more discipline.
I wrote a newsletter last year, called, Time to Develop a Strategy. It was about six ways that you can approach handling Long-Term Care. I am not going to dive deep into those six ways again, but feel free to go back and reference that newsletter. What I am going to focus on, is what I believe is the best way to plan for your future LTC needs. To do this, I am using a 65 year old male, for my example, that will require $100,000 toward his future Nursing Facility costs. The question I asked myself is, which of the below strategies would make the most sense?
1. Purchase an Indexed Universal Life policy and grow the funds. This would allow you to take loans against the policy in the future, if needed, and if you don’t need the policy or only use some of the funds, your beneficiaries get the death benefit or whatever is leftover. 2. Put the funds toward a Life Insurance policy with an LTC rider. 3. Purchase an annuity focused on the LTC doubler payout in the future. 4. Put the funds in an annuity, simply focused on growing the funds. 5. Invest the funds in an S&P indexed fund or a 60/40 portfolio.
To help me solve this equation, I spoke with several individuals in the insurance industry, whose main focus is LTC, to hear their perspective. After doing so, this is where I stand and what I will be recommending to my clients, going forward, as we develop a Long-Term Strategy: Invest the money and let it grow. There are definite advantages to Life Insurance and Life Insurance focused on LTC; for starters, you know what you’re going to have at each age, to help offset LTC costs, and if you don’t use the funds, your spouse or kids will have a death benefit that is tax-free. However, one of the issues is that the death benefit is only going to be the original $100,000 (or less) that you put in, and that death benefit goes down dollar for dollar when spent on nursing care. The annuity with the LTC doubler could have a higher death benefit for your beneficiaries than the Life Insurance. However, the monthly benefit you can use for Long-Term Care is smaller than the benefit of the Life Insurance with an LTC rider. This means that you might need to use additional funds in order to make up the difference, to cover the rising cost of LTC.
That all being stated, I landed on investing the funds and letting them grow, as what I believe to be the best approach. Yes, your pool of money is unknown for the future. However, using historical returns, you have a chance of having a larger pool of money available to use, when the time comes. What I like most about this approach is the flexibility. You’re not restricted on how much you can use as a monthly benefit, and if you’re married, whatever isn’t used for one spouse is available to use for the other spouse. If you only use a portion of the funds, the rest gets passed on to your beneficiaries. This also gives you time to work on moving other funds, in the time leading up to going into a home, and also when you get there, to help you qualify for Medicaid, if you have a long stay. Now, what is important, is that when you commit to this plan, these funds are not funds that you should use to live off of. Rather, they are ‘officially’ in the LTC bucket. With that, herein lies the flexibility component again; if for some reason, later in life, you need these funds for another purpose, you do have easy access to them. This is the part where I caution you that investing has no guarantees. We have no idea what the future will bring and no idea what this investment will give you over time. However, we have to make the best decision with incomplete information and determine how much risk we are willing to take. If you have read my newsletters in the past, you understand my belief in our country and in our economy, to overcome bad times. When investing, time is your friend and when we’re talking about LTC planning, we are giving ourselves a long runway to mitigate the risk as best as possible.
A little longer of a newsletter to start the year. However, this is a vital subject and I believe it is important that we give it the proper attention. Have a great couple of weeks and some more thoughts from my desk on LTC soon. |
Greg Korn, CFP® President & Investment Advisor Representative
Toll Free: 833-788-0404
Fax: 814-357-9070
Important Disclosures Regarding Email Communications
Advisory services through Retirement Wealth Advisors, Inc. (RWA), an SEC Registered Investment Advisor. K Financial LLC and RWA are not affiliated. This Email is being sent by or on behalf of a Registered Investment Advisor. It is intended exclusively for the individual or entity to which it is addressed. This communication may contain information that is proprietary, privileged, or confidential, or otherwise legally exempt from disclosure. If you are not the named addressee, you are not authorized to read, print, retain, copy or disseminate the Email or any part of it. If you have received this Email in error, please notify the sender immediately by Email or fax, and destroy all copies of this communication. Please be advised that you may conduct securities transactions only by speaking directly with your Investment Advisor Representative either by phone or in person. Requests for securities transactions via email will not be executed by Retirement Wealth Advisors, Inc. To help protect your privacy, we strongly suggest you avoid sending sensitive information, such as account numbers and social security numbers via Email. Please be further advised that, pursuant to the Bank Secrecy Act, the USA PATRIOT ACT, and similar laws, any communication in this email is subject to regulatory, supervisory, and law enforcement review.
Copyright (C) 2021 K Financial. All rights reserved.