Control Your Retirement Destiny

By: Dana Anspach
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  • Summary

  • A step-by-step guide on how to align finances to support a comfortable retirement lifestyle.
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Episodes
  • Chapter 13 – “Estate Planning"

    Chapter 13 – “Estate Planning"
    Jul 5 2019
    In this episode, podcast host and author of “Control Your Retirement Destiny”, Dana Anspach, covers Chapter 13 of the 2nd edition of the book titled, “Estate Planning.” If you want to learn even more than what there is time to cover in the podcast series, you can find the book “Control Your Retirement Destiny” on Amazon. Or, if you are looking for a customized plan for your retirement, visit us at sensiblemoney.com to see how we can help. Chapter 13 – Podcast Script Hi, this is Dana Anspach. I’m the founder and CEO of Sensible Money, a fee-only financial planning firm. I’m also the author of Control Your Retirement Destiny, a book that shows you how to align your finances for a smooth transition into retirement. In this podcast episode I cover the material in Chapter 13, on “Estate Planning.” If you like what you hear today, go to Amazon and search for Control Your Retirement Destiny. And, if you are looking for a customized plan, visit sensiblemoney.com to see how we can help. ----- Even if you have never been to an attorney or drawn up a will or a trust, you have probably still done some type of estate planning- and not even known that’s what you were doing. How could that be? If you have ever opened a bank account or named a beneficiary on a retirement account or life insurance policy, that’s estate planning. It’s a legal document that specifies where your assets go when you pass. For example, if you open an account titled jointly with a spouse, friend or child, when you pass, that account belongs to them. It doesn’t matter what your will says – the titling of that account overrides any other documentation. The same thing occurs with beneficiary designations on retirement accounts. The financial institution must disburse the funds to the beneficiaries you have listed – it doesn’t matter if you have a trust or will that says something else. Many people don’t know this. And it can get you in trouble. I saw this first-hand with George and Faye. George was referred to me shortly after Faye passed away from pancreatic cancer. This was a second marriage and Faye had two children from a previous marriage. When Faye was diagnosed, they had wisely visited an attorney and had a trust drawn up. Faye wanted 1/3 of her assets to go to each of her two children and 1/3 to George, so that is what the trust said. However, nearly all of Faye’s assets were in her company retirement plan. And Faye never changed the beneficiary designation on this plan to the trust. George was named as the beneficiary. Unfortunately, George and Faye thought the trust document would take care of this. They did not realize the trust has no legal authority over her retirement plan unless she took the next step of filing updated beneficiary paperwork. Now, George was in the awkward position of inheriting the entire account. Luckily, George is a good guy, and continues to honor Faye’s wishes by taking withdrawals and then sending the appropriate after-tax amounts to Faye’s children. However, this has unfortunate tax consequences for George, forcing some of his other income into higher tax rates. Overall though, this case has a happy ending because George is doing the right thing. But not everyone would. The type of estate planning error that happened to George and Faye could have been avoided if the estate planning had been coordinated with the financial planning. Many attorneys don’t ask clients for a detailed net worth statement. I’m not sure why. They should and they should look at the types of accounts that someone has so they can make recommendations that will work. An attorney can draft the best documents in the world, but if they don’t make sure the client follows through on all the other paperwork that is needed, those documents can become pretty ineffective. In this podcast, I’m going to cover a few basic things you need to know about estate planning. However, I am not an attorney. Nothing I say should be considered legal advice. Rules vary by state and you will always want to get advice that is specific to your situation. With that in mind, the four topics I want to cover are titling accounts, setting up beneficiary designations, trusts, and I’ll briefly touch on the topic of estate taxes. First, account titling. You have retirement accounts, and pretty much everything else. When I say retirement accounts, I mean IRAs, Roth IRAs, 401ks, 403bs, SEPS, SIMPLE IRAs and any other type of company sponsored retirement account like a pension or deferred compensation plan. Retirement accounts must be in a single person’s name. We are frequently asked by married couples if they can combine their retirement accounts, or title an IRA in a trust. The answer is no. A retirement account must be owned by one individual. The way you specify where your account goes upon your passing is by the beneficiary designation you put on file. With non-retirement accounts you have more choices. ...
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    21 mins
  • Chapter 12 (Part 2) - “Interviewing Advisors and Avoiding Fraud"

    Chapter 12 (Part 2) - “Interviewing Advisors and Avoiding Fraud"
    Jun 22 2019
    In this episode, podcast host and author of “Control Your Retirement Destiny”, Dana Anspach, covers part 2 of Chapter 12 of the 2nd edition of the book titled, “Whom To Listen Too.” Part 2 covers "Interviewing Advisors and Avoiding Fraud." If you want to learn even more than what there is time to cover in the podcast series, you can find the book “Control Your Retirement Destiny” on Amazon. Or, if you are looking for a customized plan for your retirement, visit us at sensiblemoney.com to see how we can help. Chapter 12 (Part 2) – Podcast Script Hi, this is Dana Anspach. I’m the founder and CEO of Sensible Money, a fee-only financial planning firm. Fee-only means no commissions. I’m also the author of Control Your Retirement Destiny, a book that shows you how to align your finances for a smooth transition into retirement. This podcast is an extension of the material in Chapter 12, on “Whom To Listen To”. I’ll be covering the topics of avoiding fraud and how to interview potential advisors. If you like what you hear today, go to Amazon and search for Control Your Retirement Destiny. And, if you are looking for a customized plan, visit sensiblemoney.com to see how we can help. ----- We’ve all heard the saying “if it’s too good to be true….” So why do we fall for fraud, over and over? I think I know the answer. To recognize if something is too good to be true, you must know what truth is in the first place. And when it comes to investing, a lot of people have no idea what is realistic and what is a fantasy. By the end of this podcast, you will not be one of those people. I’ve got several real-life stories to tell – stories about fraud and why people fell for it. You are about to learn what to watch out for. And as a side note – for the personal stories I tell I change names and details for privacy reasons. Although details are changed, the substance of each story is true. Let’s start with the biggest financial scam in U.S. history – what is known as the Bernie Madoff scam – a 65 billion-dollar Ponzi scheme. If you haven’t heard of him, Bernie Madoff was the former chairman of the NASDAQ stock market. Naturally when he started his own investment firm, people trusted him. His scheme came unraveled in December 2008 and many families lost their entire life savings. One of the men credited with bringing down Madoff’s scheme is Harry Markopolos. He tells his story with his co-author Frank Casey in their book called No One Would Listen: A True Financial Thriller. How did Harry Markopolos figure out Madoff’s scheme? Markopolos said, “As we know, markets go up and down, and Madoff’s only went up. He had very few down months. Only four percent of the months were down months. And that would be equivalent to a baseball player in the major leagues batting .960 for a year. Clearly impossible. You would suspect cheating immediately.” Maybe Markopolos would suspect cheating immediately, but would you? Harry Markopolos was in the investment business. He knew what is and is not possible. But what about the average person who walked into Bernie Madoff’s office and was told that they could consistently earn 12% returns each year? Any one of us in the investment business would walk out and head to the authorities. But the average investor? They think that sounds great and that someone has the magic formula to make it happen. They don’t know that they should suspect cheating immediately. How can you assess what is realistic and whether someone is lying? First, you must understand that safe investments earn low returns. If a proposed investment pays more than a money market fund or more than a one-year CD, than there is risk. If someone doesn’t explain those risks and tries to assure you that your money is completely safe, they aren’t telling the whole story. You also must know that volatility, or ups and downs, are a normal part of investing. If someone tells you it will be a smooth ride with great returns, watch out. Something is not right. Despite the publicity that the Madoff scandal received, Ponzi schemes continue and people continue to fall for them. Most recently, a New York Times article chronicles “The Fall of America’s Money Answers Man” which is the story of Jordan Goodman, a well-known finance guru who has books and radio shows. As Goodman’s work became more popular, he began touting all sorts of investments and was being paid to promote these investments. That is not illegal, as long as it disclosed. But he wasn’t disclosing all these relationships. And, on one of his radio shows in about 2014, Goodman began talking about one particular investment where you could safely earn 6% returns. He was quoted as saying “There’s a way of getting 6 percent and not having to worry about capital loss. It’s very safe.” This investment he was promoting turned out to be a Ponzi scheme. How could you recognize that this was a scam? After all,...
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    21 mins
  • Chapter 12 (Part 1) - "Whom To Listen To"

    Chapter 12 (Part 1) - "Whom To Listen To"
    Apr 27 2019
    In this episode, podcast host and author of “Control Your Retirement Destiny”, Dana Anspach, covers part 1 of Chapter 12 of the 2nd edition of the book titled, “Whom To Listen Too.” If you want to learn even more than what there is time to cover in the podcast series, you can find the book “Control Your Retirement Destiny” on Amazon. Or, if you are looking for a customized plan for your retirement, visit us at sensiblemoney.com to see how we can help. Chapter 12 (Part 1) – Podcast Script Hi, this is Dana Anspach. I’m the founder and CEO of Sensible Money, a fee-only financial planning firm. I’m also the author of Control Your Retirement Destiny, a book that covers the numerous decisions you need to make as you plan for a transition into retirement. This podcast covers the material in Chapter 12, on “Whom To Listen To”. Meaning, when you need financial advice, who can you turn to? If you like what you hear today, go to Amazon and search for Control Your Retirement Destiny. And if you are looking for a customized plan, visit sensiblemoney.com to see how we can help. ----- Not everyone needs a financial advisor, but certainly everyone needs reliable financial advice. So where do you find it? That’s what I cover in this episode. There are three main places to find advice – the media, the product manufacturers, and the 250,000 to 350,000 people out there who go by the label “financial advisor.” I’m going to cover all three. First, the media. Early in my career in the mid 90’s, I had an experience that made me realize the impact of the media. A client called up one day, quite excited, and said, “Do you have municipal bonds?” “Yes,” I replied. “Why do you ask?” “Well,” she said, “they told me I need municipal bonds.” I was a bit confused, as I was her financial advisor, so I apprehensively said, “Do you mind telling me who ‘they’ are?” “Oh,” she said, “you know—the people on TV.” Municipal bonds provide interest that in most cases is free from federal taxes, and if the bond is issued by the state you live in, it may be free of state taxes too. That means municipal bonds can be a good choice for investors in high tax brackets who have investment money that is not inside retirement accounts. This client however, was in a low tax bracket and most of her money was inside her IRA. The TV host didn’t provide specifics—only an overview of municipal bonds and the fact that they paid tax-free interest. This woman heard “tax-free” and thought it must be something she should pursue. The media doesn’t know you. I don’t know you either. I get inquiries from strangers on a regular basis asking for advice. Most of the journalists and other media personalities I know experience the same thing. Someone emails us a few pieces of data and wants to know what to do. It’s hard, because we want to help. But we don’t want to guess. To feel comfortable giving financial advice, most of the time I need to do a thorough financial projection. To do it right, I need to know everything about someone’s financial life. Once I see the entire picture, I can answer a question about the particular puzzle piece someone is asking about. Today, the media encompasses both traditional venues, such as TV, radio and magazines, as well as numerous online mediums, like blogs and podcasts. In all forms of media, there are pay-to-play articles, spotlights and links. There is nothing wrong with the pay-to-play model, as long as it is disclosed. As a consumer, you just need to be aware that many things you see, such as certain top advisor lists, are put together because someone paid to be on the list. Many product endorsements in blogs are there because the blogger gets affiliate revenue, or advertising revenue. The other challenge with media advice is that, by nature, it is designed to be mainstream broad content. For eight years, I worked to write articles that fit within a 600-800 word count requirement. For most financial topics, you can’t cover all the rules in 600-800 words. Then I would receive emails from people letting me know which items I missed. For example, I can write about the topic of Roth IRAs and generically say that most people are better off funding after-tax Roth IRAs or 401ks instead of pre-tax IRAs, and as I write that I can instantly think of numerous exceptions. Media advice is not personal. That means you should think of it as education – but not as advice. For it to be good advice, it must be personal. By all means, use the media, books, podcasts, articles and shows as a great resource to learn from. But don’t forget that the person producing that content doesn’t know you. Next, I want to discuss the industry of financial advice. There is a big difference between a product and advice, and as a consumer, you need to be able to identify which is which. In 1995, at age 23, I started my career as a financial advisor. I studied for ...
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    22 mins

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