Retirement Rumors
Sep 2, 2020
People say a lot of things, but that doesn’t necessarily mean they know what they’re talking about. So when people say they heard something about a financial decision they should make, there’s a good chance that what they heard isn’t actually what they NEEDED to hear.
Here are just a handful of the things that we'll discuss:
THIS WEEK’S OFFER:
Transcript
John Stillman: You're listening to Wright Money Tips with Isaac Wright, chartered financial consultant and the president of Financial Dynamics and Associates. I'm John Stillman, alongside Isaac, who you can find online at financialandestateplanning.com, or you can reach him by phone or texting (804) 777-9999.
Isaac Wright: Or you can Google me.
John Stillman: You could do that-
Isaac Wright: You can do that today.
John Stillman: Let's be honest, we give out all this contact information, ways to reach you, 95% of the people that want to get in contact with you are just going to Google Isaac Wright, financial advisor, Richmond. Right?
Isaac Wright: Basically.
John Stillman: That's really what happens. I'm guilty of doing this.
Isaac Wright: I will say this though, John, to be fair, the phone number is pretty doggone simple.
John Stillman: It is.
Isaac Wright: 777-9999. So I would say under most circumstances you're right, but considering the phone number is three sevens, four nines, we're making it as easy as we can.
John Stillman: It's amazing how much we rely on Google. I will find myself, if I want to go to homedepot.com, instead of just typing in homedepot.com, I'll go to Google and Google Home Depot so that I can click on it through Google. I don't know what this is that makes me do it that way, but I think a lot of people behave that way.
Isaac Wright: Google, Amazon, they're all big brother now, aren't they?
John Stillman: That's right. So we're going to talk today about things that people say, "Well, I heard this or I heard that." And usually when somebody says, "Well, I heard..." fill in the blank, usually what comes out of their mouth is not necessarily the wisest statement ever, but I'm going to throw out some statements to you that people may say they've heard from a friend or another advisor, or they heard in the media or whatever. And you tell me if it's a legitimate thing or not.
Isaac Wright: Yeah, I mean it's probably good timing, again we're heading into the fall and let's call it the end of the road here for this crazy year we're in. So sometimes people hear and kind of ascribe answers to things that can be a little goofy. So this one should be a good little quick hit program, but hopefully get some good knowledge out there.
John Stillman: So here's one. "Well, I heard that you have to have at least a million dollars to retire these days."
Isaac Wright: Yeah, John, there's still people out here that feel like they have to hit that number. If y'all remember, and I know we've talked about this before, but those commercials with ING back in the day where people had these orange numbers over their head, and for whatever reason, people assume that if they hit a seven figure net worth they're gold and ready to retire, and if they don't hit it somehow they're a loser.
Isaac Wright: And that's not the case because a lot of you here listening have income coming in, maybe potentially from multiple sources already. So you may have social security that you can collect, or you are already collecting. You have a pension plan. That pension plan may also be a benefit to your spouse, if you're married, if something happens to you. You also maybe have rental income. You may have part time income coming in from a job that you've taken after retirement or leading into retirement, you plan on doing something part time. And then on top of that too, you have your investments, but necessarily based on those income streams, you may not have to pull a lot of money from your investments to make ends meet.
Isaac Wright: Now, there is obviously the flip side of that, where you may need a lot of money from your investments, but again, there's no such thing as, "Hey, if I have a million dollars I'm going to retire, or I'm in a great place, or I'll be in a good spot." I mean, I've worked with people that have a $200,000 in savings, but they have two huge pensions and they have social security and they have no debt. And I have other people that have met that have $2 million in the bank, but they're spending money like they're on the Lifestyles of the Rich and Famous.
Isaac Wright: So you have to realize that the only way you're going to get an answer to this is actually have a financial plan, and then from there reverse engineer, what that looks like, and that's what we're here to do. So again, feel free to talk to me anytime. You can call here, again you can Google me. (804) 777-9999. But again, those are things that we talk about each and every week, year. I just think that right now, people sometimes are a little bit worried about how much money they actually are going to need to retire. So it's a good thing to bring up.
John Stillman: All right. How about this one, Isaac? "Well, I heard that you should start social security as early as you can because the whole system is going to go bankrupt and you need to get your money now."
Isaac Wright: Unfortunately, that's another thing that people are making decisions based upon fear without really other than hearing, maybe some fringe report or talk about some craziness with social security. I think it's well known that we are underfunding the social security program in general as an entitlement, but it doesn't mean that it's going to completely go away. And I also think, this was actually something that was confirmed, that if you take all the revenue currently being paid into our system currently, it's still enough to pay about 75 cents on the dollar when it comes to social security benefits.
Isaac Wright: But you got to realize too, there's going to be probably a lot of tax code changes over the next 10, 20 years. And that obviously is going to have an effect on how social security is going to be collected. There also can be other rules about when you can collect your full benefits. There's a lot of different ways that they can tweak social security. Please do not claim social security because of the fear tactic of it's going away, because I don't sense that will be the issue. I think it's more about making tweaks to the program to continue the program. But again, we can walk through some of the things that allow you to make a solid well-informed decision, not a fear-based tactic like that.
John Stillman: Far be it for me to make a well informed decision about something, but that does actually sound appealing now that you mention it.
Isaac Wright: Lo and behold.
John Stillman: All right. How about this one? "Well, I heard that the market is going to tank if Trump loses, so I should get my money out now."
Isaac Wright: That's what people always talk about during an election season. Granted maybe to a degree where we've had significant shifts and who's going to be running the show, let's call it. But if you think about past, and I'm talking about 20, 30, 40 years, if you look at some of the statistics there, it really doesn't come down to the pipe of exactly if it's a Democrat or Republican in the office. I mean, there's other factors that come into play.
Isaac Wright: Do I think we're in a great tax situation now? Economically are we doing okay? Sure. Even if you look at where the market is, it's kind of un-... And I don't think anybody would expect it to hit all time highs coming out of the end of the summer. And here we are. I don't think we're out of the volatility range by any degree, but I do not anticipate a complete meltdown of the market. Because right now I think people are starting to what I would say, behaviorally understand and feel a little bit more at ease with the pandemic we're in and eventually we're going to have some breakthroughs, and I think, hopefully, that'll be sooner than later.
Isaac Wright: I'm not saying that people are still not going to be scared, but again, the level of fear is going to continually subside in my opinion, because unless something drastically changes, people are going to want to eventually, they're going to tap out. I mean, most people eventually are going to tap out from being fear and concern over and say, "Hey, I have to at some point live my life." And again, everybody's going to have a degree of what they feel that's going to look like.
Isaac Wright: But make sure that you are, when it comes to your investments, we have had a great rebound in the market. Maybe it's a good time to consider how much money you think you're going to need for future goals, and we can be here to assist. So again, reach out. Isaac Wright, Financial Dynamics, (804) 777-9999. These are things that we do here where people sometimes do get a little bit more into what I call the Enquirer magazines, some of these fringe thoughts, and I just want to make sure people have a little bit more of a solid base to make a decision.
John Stillman: Very good. Okay. How about this one? "Well, I heard that I should try and keep my house in the divorce because it will comfort me emotionally to not have to uproot myself."
Isaac Wright: I've been on both ends of that fence working with couples, and I will say in some degree I've had a couple of spouses that have actually, I would agree with that. Have enjoyed staying in their home, it's one less thing for them to worry with. They're able to work through any negative thoughts or connotations based upon where they're living. And I've gone the opposite end, where I've had people who wanted to get the hell out of dodge, just because of the past history of that home. But granted, even with that being said, you don't want to sit there and have a fire sale on your house. You want to do it financially responsibly, but I just want you to know sometimes the definition of uprooting doesn't mean necessarily that you have to move out of the home, but other people based upon how tough things may have been through a divorce proceeding or even leading up to that, I can fully understand wanting to set up kind of a new place in a new life.
Isaac Wright: Either way. I've gone through both sides of that fence. Doing this 20 years, John, I mean really I've run across almost any type of scenario you want to think about, and I'm honest enough when I haven't. These are just things where, I know you and I talked about this a little off the air, but I did have somebody that just was very adamant about moving because they were in a situation that was not very, let's call it healthy. So please know that we walk through a lot of those types of scenarios that sometimes not necessarily buying the next hot stock, it's just making sure that you're in a place to enjoy your life.
John Stillman: Well, speaking of hot stocks, I'm going to give you a one more and we'll wrap it up for today. "Well, I heard that this pharmaceutical company is going to be heavily involved with the coronavirus vaccine. So their stock price is going to go."
Isaac Wright: We've had that, and maybe not necessarily as much to an extent as we had earlier in this whole process, let's call it spring, early summer. But a lot of these pharmaceutical stocks are really maybe not doing as well as what was anticipated. And now you see how Amazon, Apple, some of these other stocks, and we get asked recommendations about purchasing some of these stocks. And I'll say this, regardless of whatever speculative stock that you want to look at, if it's not going to be a situation that's going to be a lifestyle change for you if that stock takes a big hit, then potentially moving forward in owning some stock, if you can afford to hold onto it for the good and bad, so be it.
Isaac Wright: But if you're a day trader or if you're trying to think about day trading, some of these stocks that can have great runs like Tesla and Apple and Amazon, and you look at some of the pharmaceutical stocks, Pfizer, Gilliad and a few others that I think a lot of people thought they were going to double in price. And some of the things that they were talking about based on vaccines, and you're still seeing that today. You got to be ready and understanding that, "Hey, if those stocks take a hit, have you put too much money in one basket?"
Isaac Wright: So again, some of the times when we talk about this, we love having the ability for our clients to have speculative stocks, if they want to go out and do what they want to do, but I think a core plan is always diversification. And of course with that, I think we term and manage, I think, portfolios pretty well, relative to people's goals.
Isaac Wright: So if you have any questions about anything that we've talked about today, these are things that we are hearing and have heard for the last several months. And I told John, let's kind of have a summary thought on the podcast today about some of these crazy things that are sometimes said, and if you think through them a little further, may not necessarily be all that it's cracked up. So I'm Isaac Wright. John, I think it's been a good kind of summary of things that we're trying to provide some value on and it's been a good run.
John Stillman: So if you're one of those people who isn't going to Google Isaac and find him that way, the easiest thing to do is just call or text (804) 777-9999. Again, the website is www.financialandestateplanning.com. Or yeah, let's be honest, just Google Isaac Wright. You know what? I'm going to do it right now, Isaac Wright. And a lot of people misspell Isaac, by the way. It's I S A A C.
Isaac Wright: Yeah, we get the double s's going.
John Stillman: A lot of people spell it with two s's and one a. So if I just Google Isaac Wright, I get this guy who is... Well, he looks nothing like you, put that way. He's interviewing Kim Kardashian here. Well, different Isaac Wright. Anyway, you'll find him. Google Isaac Wright, Financial Advisor, that will probably get you there.
Isaac Wright: John, there's an Isaac Wright that's an actor.
John Stillman: Yeah, that's who I'm looking at here. It's definitely not you.
Isaac Wright: Okay, yeah I was going to say, I know that pops up. It has been a bit, probably should look at myself on Google more often, but hopefully if you put in Richmond or adviser, you'll find a litany of hopefully reasonable things about me.
John Stillman: If Isaac Wright, financial advisor, I get to you. So there you go. Again, (804) 777-9999 or on the Google machine. We'll talk with you again next time, right here on Wright Money Tips. Have a great one.
Announcer: Information is for illustrative purposes only and does not constitute tax, investment or legal advice. Always consult with a qualified investment, legal, or tax professional before taking any action.
Announcer: Advisory services offered through JW Cole advisors, Inc. JWCA, Financial Dynamics and Associates, Inc. And JWCH are unaffiliated entities.
Isaac Wright: Or you can Google me.
John Stillman: You could do that-
Isaac Wright: You can do that today.
John Stillman: Let's be honest, we give out all this contact information, ways to reach you, 95% of the people that want to get in contact with you are just going to Google Isaac Wright, financial advisor, Richmond. Right?
Isaac Wright: Basically.
John Stillman: That's really what happens. I'm guilty of doing this.
Isaac Wright: I will say this though, John, to be fair, the phone number is pretty doggone simple.
John Stillman: It is.
Isaac Wright: 777-9999. So I would say under most circumstances you're right, but considering the phone number is three sevens, four nines, we're making it as easy as we can.
John Stillman: It's amazing how much we rely on Google. I will find myself, if I want to go to homedepot.com, instead of just typing in homedepot.com, I'll go to Google and Google Home Depot so that I can click on it through Google. I don't know what this is that makes me do it that way, but I think a lot of people behave that way.
Isaac Wright: Google, Amazon, they're all big brother now, aren't they?
John Stillman: That's right. So we're going to talk today about things that people say, "Well, I heard this or I heard that." And usually when somebody says, "Well, I heard..." fill in the blank, usually what comes out of their mouth is not necessarily the wisest statement ever, but I'm going to throw out some statements to you that people may say they've heard from a friend or another advisor, or they heard in the media or whatever. And you tell me if it's a legitimate thing or not.
Isaac Wright: Yeah, I mean it's probably good timing, again we're heading into the fall and let's call it the end of the road here for this crazy year we're in. So sometimes people hear and kind of ascribe answers to things that can be a little goofy. So this one should be a good little quick hit program, but hopefully get some good knowledge out there.
John Stillman: So here's one. "Well, I heard that you have to have at least a million dollars to retire these days."
Isaac Wright: Yeah, John, there's still people out here that feel like they have to hit that number. If y'all remember, and I know we've talked about this before, but those commercials with ING back in the day where people had these orange numbers over their head, and for whatever reason, people assume that if they hit a seven figure net worth they're gold and ready to retire, and if they don't hit it somehow they're a loser.
Isaac Wright: And that's not the case because a lot of you here listening have income coming in, maybe potentially from multiple sources already. So you may have social security that you can collect, or you are already collecting. You have a pension plan. That pension plan may also be a benefit to your spouse, if you're married, if something happens to you. You also maybe have rental income. You may have part time income coming in from a job that you've taken after retirement or leading into retirement, you plan on doing something part time. And then on top of that too, you have your investments, but necessarily based on those income streams, you may not have to pull a lot of money from your investments to make ends meet.
Isaac Wright: Now, there is obviously the flip side of that, where you may need a lot of money from your investments, but again, there's no such thing as, "Hey, if I have a million dollars I'm going to retire, or I'm in a great place, or I'll be in a good spot." I mean, I've worked with people that have a $200,000 in savings, but they have two huge pensions and they have social security and they have no debt. And I have other people that have met that have $2 million in the bank, but they're spending money like they're on the Lifestyles of the Rich and Famous.
Isaac Wright: So you have to realize that the only way you're going to get an answer to this is actually have a financial plan, and then from there reverse engineer, what that looks like, and that's what we're here to do. So again, feel free to talk to me anytime. You can call here, again you can Google me. (804) 777-9999. But again, those are things that we talk about each and every week, year. I just think that right now, people sometimes are a little bit worried about how much money they actually are going to need to retire. So it's a good thing to bring up.
John Stillman: All right. How about this one, Isaac? "Well, I heard that you should start social security as early as you can because the whole system is going to go bankrupt and you need to get your money now."
Isaac Wright: Unfortunately, that's another thing that people are making decisions based upon fear without really other than hearing, maybe some fringe report or talk about some craziness with social security. I think it's well known that we are underfunding the social security program in general as an entitlement, but it doesn't mean that it's going to completely go away. And I also think, this was actually something that was confirmed, that if you take all the revenue currently being paid into our system currently, it's still enough to pay about 75 cents on the dollar when it comes to social security benefits.
Isaac Wright: But you got to realize too, there's going to be probably a lot of tax code changes over the next 10, 20 years. And that obviously is going to have an effect on how social security is going to be collected. There also can be other rules about when you can collect your full benefits. There's a lot of different ways that they can tweak social security. Please do not claim social security because of the fear tactic of it's going away, because I don't sense that will be the issue. I think it's more about making tweaks to the program to continue the program. But again, we can walk through some of the things that allow you to make a solid well-informed decision, not a fear-based tactic like that.
John Stillman: Far be it for me to make a well informed decision about something, but that does actually sound appealing now that you mention it.
Isaac Wright: Lo and behold.
John Stillman: All right. How about this one? "Well, I heard that the market is going to tank if Trump loses, so I should get my money out now."
Isaac Wright: That's what people always talk about during an election season. Granted maybe to a degree where we've had significant shifts and who's going to be running the show, let's call it. But if you think about past, and I'm talking about 20, 30, 40 years, if you look at some of the statistics there, it really doesn't come down to the pipe of exactly if it's a Democrat or Republican in the office. I mean, there's other factors that come into play.
Isaac Wright: Do I think we're in a great tax situation now? Economically are we doing okay? Sure. Even if you look at where the market is, it's kind of un-... And I don't think anybody would expect it to hit all time highs coming out of the end of the summer. And here we are. I don't think we're out of the volatility range by any degree, but I do not anticipate a complete meltdown of the market. Because right now I think people are starting to what I would say, behaviorally understand and feel a little bit more at ease with the pandemic we're in and eventually we're going to have some breakthroughs, and I think, hopefully, that'll be sooner than later.
Isaac Wright: I'm not saying that people are still not going to be scared, but again, the level of fear is going to continually subside in my opinion, because unless something drastically changes, people are going to want to eventually, they're going to tap out. I mean, most people eventually are going to tap out from being fear and concern over and say, "Hey, I have to at some point live my life." And again, everybody's going to have a degree of what they feel that's going to look like.
Isaac Wright: But make sure that you are, when it comes to your investments, we have had a great rebound in the market. Maybe it's a good time to consider how much money you think you're going to need for future goals, and we can be here to assist. So again, reach out. Isaac Wright, Financial Dynamics, (804) 777-9999. These are things that we do here where people sometimes do get a little bit more into what I call the Enquirer magazines, some of these fringe thoughts, and I just want to make sure people have a little bit more of a solid base to make a decision.
John Stillman: Very good. Okay. How about this one? "Well, I heard that I should try and keep my house in the divorce because it will comfort me emotionally to not have to uproot myself."
Isaac Wright: I've been on both ends of that fence working with couples, and I will say in some degree I've had a couple of spouses that have actually, I would agree with that. Have enjoyed staying in their home, it's one less thing for them to worry with. They're able to work through any negative thoughts or connotations based upon where they're living. And I've gone the opposite end, where I've had people who wanted to get the hell out of dodge, just because of the past history of that home. But granted, even with that being said, you don't want to sit there and have a fire sale on your house. You want to do it financially responsibly, but I just want you to know sometimes the definition of uprooting doesn't mean necessarily that you have to move out of the home, but other people based upon how tough things may have been through a divorce proceeding or even leading up to that, I can fully understand wanting to set up kind of a new place in a new life.
Isaac Wright: Either way. I've gone through both sides of that fence. Doing this 20 years, John, I mean really I've run across almost any type of scenario you want to think about, and I'm honest enough when I haven't. These are just things where, I know you and I talked about this a little off the air, but I did have somebody that just was very adamant about moving because they were in a situation that was not very, let's call it healthy. So please know that we walk through a lot of those types of scenarios that sometimes not necessarily buying the next hot stock, it's just making sure that you're in a place to enjoy your life.
John Stillman: Well, speaking of hot stocks, I'm going to give you a one more and we'll wrap it up for today. "Well, I heard that this pharmaceutical company is going to be heavily involved with the coronavirus vaccine. So their stock price is going to go."
Isaac Wright: We've had that, and maybe not necessarily as much to an extent as we had earlier in this whole process, let's call it spring, early summer. But a lot of these pharmaceutical stocks are really maybe not doing as well as what was anticipated. And now you see how Amazon, Apple, some of these other stocks, and we get asked recommendations about purchasing some of these stocks. And I'll say this, regardless of whatever speculative stock that you want to look at, if it's not going to be a situation that's going to be a lifestyle change for you if that stock takes a big hit, then potentially moving forward in owning some stock, if you can afford to hold onto it for the good and bad, so be it.
Isaac Wright: But if you're a day trader or if you're trying to think about day trading, some of these stocks that can have great runs like Tesla and Apple and Amazon, and you look at some of the pharmaceutical stocks, Pfizer, Gilliad and a few others that I think a lot of people thought they were going to double in price. And some of the things that they were talking about based on vaccines, and you're still seeing that today. You got to be ready and understanding that, "Hey, if those stocks take a hit, have you put too much money in one basket?"
Isaac Wright: So again, some of the times when we talk about this, we love having the ability for our clients to have speculative stocks, if they want to go out and do what they want to do, but I think a core plan is always diversification. And of course with that, I think we term and manage, I think, portfolios pretty well, relative to people's goals.
Isaac Wright: So if you have any questions about anything that we've talked about today, these are things that we are hearing and have heard for the last several months. And I told John, let's kind of have a summary thought on the podcast today about some of these crazy things that are sometimes said, and if you think through them a little further, may not necessarily be all that it's cracked up. So I'm Isaac Wright. John, I think it's been a good kind of summary of things that we're trying to provide some value on and it's been a good run.
John Stillman: So if you're one of those people who isn't going to Google Isaac and find him that way, the easiest thing to do is just call or text (804) 777-9999. Again, the website is www.financialandestateplanning.com. Or yeah, let's be honest, just Google Isaac Wright. You know what? I'm going to do it right now, Isaac Wright. And a lot of people misspell Isaac, by the way. It's I S A A C.
Isaac Wright: Yeah, we get the double s's going.
John Stillman: A lot of people spell it with two s's and one a. So if I just Google Isaac Wright, I get this guy who is... Well, he looks nothing like you, put that way. He's interviewing Kim Kardashian here. Well, different Isaac Wright. Anyway, you'll find him. Google Isaac Wright, Financial Advisor, that will probably get you there.
Isaac Wright: John, there's an Isaac Wright that's an actor.
John Stillman: Yeah, that's who I'm looking at here. It's definitely not you.
Isaac Wright: Okay, yeah I was going to say, I know that pops up. It has been a bit, probably should look at myself on Google more often, but hopefully if you put in Richmond or adviser, you'll find a litany of hopefully reasonable things about me.
John Stillman: If Isaac Wright, financial advisor, I get to you. So there you go. Again, (804) 777-9999 or on the Google machine. We'll talk with you again next time, right here on Wright Money Tips. Have a great one.
Announcer: Information is for illustrative purposes only and does not constitute tax, investment or legal advice. Always consult with a qualified investment, legal, or tax professional before taking any action.
Announcer: Advisory services offered through JW Cole advisors, Inc. JWCA, Financial Dynamics and Associates, Inc. And JWCH are unaffiliated entities.
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