Ep. 215 - Mastering Your Wealth: Top 10 Retirement Planning Exercises (Part 2)

  📍 📍 Today, this is Gabriel Shahin, certified financial planner and your host of more knowledge, more wealth. You're on every weekend talking about all important topics of personal finance. My job is to go over the knowledge you need to increase your wealth. Not to the listener. You can always reach out to myself or any one of our colleagues here at Falcon Wealth Planning.

Our phone number is eight five five and 9 6 3 25 26. That's 8 5 5 96 Falcon like the Bird, or visit our website@falconwealthplanning.com. That's falcon wp.com for short. Or you can get this episode or any one of our previous episodes and you can get on our knowledge center as well where you can get fantastic financial planning strategies that can help you through our YouTube channel and Spotify and podcasts.

You can get this episode as well. Now, I'm a president, the president of Falcon Wealth Planning. We are a fee only, non commissioned, true fiduciary folks, and we go over all important topics of personal finance. That's where you are today. How are your retirements going to look and all the variables there.

Going over taxes. Investments, estate planning, insurance, folks, you name it. Anything that involves a dollar sign, we can help you with. We're offering one to two meetings, one to two hours of our time folks at no cost. And we have offices all over. We can help. It doesn't matter where you are across the country.

Give us a call. We would love to be able to answer those questions, especially the ones that are keeping you up at night. Our phone number, 855 963 2526, that's 855 96 Falcon, like the bird, or visit our website at falconwealthplanning. com. That's falcon, WP. com for short. We can go over those questions that you have to go over.

And so now let me, let me just take a step back here last week, and by the way, hopefully everybody had a fantastic Thanksgiving. Uh, I want to go over the top 10 strategies that you could be doing retirement planning exercises. So we just went over the first five last week and that was, if you missed it, feel free to go to our podcast and get the previous week's episode.

Are you on track for retirement? Understanding longevity, understanding inflation. That was number three. Number four, understanding use of debt. Number five, compound interest. and growth. And we gave some examples there. This week we're going over new comments and recommendations. So the number six thing we're going over for top 10 retirement planning exercising is keeping your costs of investments low.

Okay. So this is very important here and we'll talk about investment strategy a little bit later. But actually understanding what you're investing in, are you choosing individual stock here or are you choosing funds? If you are choosing funds, what type of funds? Are they actively managed funds? Are they loaded funds?

Are they index funds? Are they low cost funds? Are they liquid funds? Are they closed ended funds? You get what I'm saying? So the first one is controlling your expense ratio. A lot of investments out there and especially on funds, especially large cap fund, mid caps, small caps, international, they all are investing in like the same stuff.

So why would you pay 1 percent for a mutual fund when there's others out there for maybe 4 basis points, which, by the way, is 10 percent of the cost of the other one or 20 percent or. Yeah, well, 5 percent of the cost of the other one. So why would you do that? Well, most people just don't know. So controlling costs is important and the type of investment you have, it's different if you have money in a Roth IRA versus a brokerage.

Investing in maybe an exchange traded fund can make sense to control capital gain distributions. Looking at index versus active, which means looking at the turnover ratio. Of the fund that causes forget unnecessary taxes, but costs of the fund as well. The fund quality and the star ratings are important as well.

Now I can argue that maybe investing in a five star fund may not make sense for many reasons, depending on the asset class and how it performed. You don't want to buy high. Sometimes you want to buy low. Does that mean buying a one or two or three star fund makes sense? Maybe depending on your situation and the asset class you're looking at.

Liquidity is crucial. Sometimes people jump on a ETF and they don't look at all the details. They might only be 50 million in that fund and you want to drop what 500, 000 into it. That's crazy. You're 1 percent owner in it. You know, it doesn't make sense. It's hard to sell. There's not enough people buying that fund.

So you still need liquidity in them. So be careful. I like saying whatever, finding something that matches the index the best. Sometimes that's what keeps the cost the lowest. And if it is matching the index the best, then why are you paying 1 percent for it when you could just go straight to an ETF or other low cost index trading costs, just your own, whether it's at Fidelity Schwab, Uh, e trade, whatever it's out there, avoiding commissions in general.

Those are loaded funds. I mean, some of these things do have commissions, so be careful. Uh, and I would say in that conversation, if you're working with the Merrill Lynch, Morgan Stanley, Edward Jones, UBS, or whatever, understanding just, do you have access to the full investment universe that's out there?

Because those firms are offering things to you, either number one are commissioned or number two have 12 B1 fees or kickbacks. So you want to be careful. And the last one is just access to advice. That's something you need. Buying a mutual fund on a Merrill Edge platform, you don't have access to advice, so maybe you do need advice of where to invest that money.

Is it a bond fund? Should you invest it in a Roth, an IRA or a brokerage account? That's important to understand and decipher those. So looking at those are going to be important of keeping costs low. And yet again, people often overlook that. I'm going to go number seven. And that is understanding taxes.

This is a big thing here because I don't know where, I mean, listen, if I were a betting person, I would say taxes are going to go up. I don't even need to bet anymore because in 2026, the tax rates are going to revert back to what it was. Tax rates are going up. As Albert Einstein says, the hardest thing in the world to understand.

Is the income tax code. And so looking at all the changes that has happened and just looking in general, what tax rates you're in, you want to make sure you do what's right. Because some people, this is what they do. They take their cash first brokerage money second and their IRAs and 401ks retirement accounts last.

Well, you could be creating a ticking tax time bomb and issue with what you have by not strategically withdrawing your money. And depending on you knowing what tax bracket you're on, you may want to strategically withdraw a little from each account to keep you into a certain bracket. So I joke saying that's why people are grumpy old men.

Why? Well, because they're over here not ever touching the retirement money, touching their cash and other assets, and all of a sudden they turn 72, 73 years old, and now they have required minimum distributions that just jack up their rate, which maybe causes taxation on Social Security, qualified dividends, and capital gains.

Understanding it is going to be crucial. Uh, by the way, folks, if you're just joining me, you're listening to Gabriel Shaheen certified financial planner and your host of more knowledge, more wealth here on every weekend, talking about all important topics of personal finance. We're talking about some really important concepts here, folks.

Uh, and if this is something that you need help with, or just sounds like it relates to you, because this is, this is going to be a fantastic webinar that we're doing. And if you have interest in that, please email us at radio at falcon, wp. com. That's radio at falcon, wp. com. And we can get you on that webinar, but it's pretty much going to be very similar to what we're discussing today.

And what I'm telling you is it's extremely. Important to get this help because these are fantastic exercises that only helps you. And if you want to help customizing this and relating this webinar to your specific situation, give us a call. Our phone number is 855 963 2526. That's 855 96 Falcon, like the bird where we can help answer those questions for you because a lot of people don't understand when they're going through items like this.

That there is, it's so specific, the advice that I give to use could be very different than the one that I give my neighbor, especially with taxes. Let's say you and your neighbor each have a million bucks. Okay. Well, you may have, uh, uh, let's, uh, a home each worth a million bucks, right? Cause they're a neighbor as well.

What if you have an 800, 000 mortgage and they have nothing? Hmm. You're probably spending differently. What if you have 10 rental properties? Each giving you a couple thousand a month net profit and your neighbor doesn't. Or let's say you both have 10 rental properties or you have 10, they have 8 but they have no debt and you have a bunch of debt.

You get what I'm saying? Everything is relative. Let's just say you're 62 and they're 66 and you stop to pay for your health care. Yet again. Different things to take into consideration. Understanding taxes is crucial, because let's just say you are 62 years old, you don't have to worry about maybe a capital gain messing up your Social Security and Medicare premiums.

These are the things people just don't know and don't think about. Because they're not allowed to give tax advice. Because the saying is, please consult with a tax advisor. Heck, some of you guys have tax professionals that you come with, like, you come to them, and right there on the spot, they do your taxes.

That's not, that's not even tax planning, that's data entry. Like a tax preparer should like get your information, put it in, analyze it, review your information versus just whatever you have in front of you he's submitting, he or she. I mean this industry is more than just data entry, it's more than just choosing stocks, it's more than just choosing investments.

It's how do you stay proactive. Find opportunities, see value, and know where you're going. This is where building rapport and relationship is important. And people complain sometimes that they fall into these tax traps and retirement traps. I'm going over this webinar and this conversation with you, remember last week I went over the first five, this week I'm going over the second five, of just understanding the things that you should be doing.

A lot of people mess this up, I'm telling you, a lot of people do it. My comment to you is, just be wiser. With it. So we're going to go on a quick break. And when we come back, I'm going to talk about how you can be controlling your taxes. I mean, there are ways to do it. And we talked about strategies in the past, but yet again, what makes sense for you may not make sense for your brother or sister or neighbor or coworker.

The idea is customization. And so looking at this, we will be discussing strategies that can help you when you factor the different accounts that you have and investments that you have. With those Roth IRAs or taxable brokerage account folks, we're going to be right back after a few words. 📍 📍

Welcome back folks. This is Gabriel Shane certified financial planner and your host of more knowledge, more wealth here on every weekend talking about all important topics of personal finance. We're talking here about just the top 10 different retirement planning exercises that you could be doing. I'm going to relist them off to you as we're going toward a number eight.

Um, but the first one was, are you on track for retirement? Understanding longevity, understanding inflation, which is number three. Number four is, uh, understanding use of debt. Number five, compound interest and growth. Number six, keeping your costs of investments low. Number seven, understanding taxes.

Number. Eight is controlling taxes. So we talked and we discussed how there are different ways by understanding the tax bracket you're in. Now the tax brackets go from 10, 12, 22, 24, 32, 35, and 37. You have to know which bracket you're in. Depending on the bracket you're in means how much capital gains are going to be paying, which could be nothing on your dividends and on your capital gains.

Obviously there's long term and short term and ordinary and qualified, but the point is, is you have to know. Like if your advisor has never asked you, like how are, quite frankly, they're supposed to be managing your money if they don't even know that. For example, we purposely sell things for a gain knowing it's tax free for you.

You don't have to pay taxes on that gain. So this is what I'm saying about how to control your taxes. Instead of just investing something for 10, 000 and God willing in 30 years it grows to 100, 000. Okay. Just because that happens, well now you have this gain. We sell it, you pay 20, 000 of capital gains tax, which depending on your tax situation could be.

Six, seven grand, or you could be selling it as you go and pay no taxes along the way. So when retirement happens, 30, 000, take that 30, 000 and you can go buy whatever you want with it. Not even having to worry about taxes or maybe seeing that you put money into a Roth instead to a brokerage account. Why pay taxes on interest, dividends, capital gains, depending on your, depending on your situation.

Maybe you should be in a Roth where you avoid taxes on all of it. Not just the growth, but the principle, but the growth as well, all tax free, federal, state, simple. These are the things, well, you don't know that, your accountant's not making that recommendation. Which is weird, because you can see it on your taxes, that you have some dividends and interest somewhere, but not to a Roth.

Well, they might say you make too much, you might say you make too much. Well, yeah, but that's why they have created something called the Back to a Roth IRA. That was created in 2009, that was implemented in 2010. Or it allows you to put money in to a Roth through a backdoor mechanism, filling out an 8606 tax form to talk about the basis.

Yet again, things people don't think about. And by the way, I'm going to stop there because if what I'm saying sounds like, Hey, this sounds pretty cool. Hey, I should have been doing this. Hey, what else do I not know? Which is podcast with this guy who's talking really fast that maybe that can help you folks.

We're offering a free financial assessment where we're giving you one to two meetings, one to two hours of our time at no cost folks that we have offices. All over. We would love to help. Give us a call. Our phone number is 855 963 2526. That's 855 96 Falcon, like the bird or visit our website at falconwealthplanning.

com. That's falconwp. com for short, where you can put an inquiry on our site, we'll reach out to you to help answer those questions. So as you can see, there are multiple different strategies here. That you could be implementing yourself, but there's also multiple strategies here that you are going to need guidance.

You're going to need help because you probably meet with your accountant once or twice a year. Well, that's not a tax planner. That's a tax preparer here at Falcon Wealth. We are tax planners. This is why you can't just do that annual investment review meeting. There's more to your situation. Meet with you early in the year before you even submit taxes, late in the year, obviously, to see where you're at for the year prior to doing your taxes.

This is crucial for wealth management, which is what we are, a wealth management firm. And so with wealth management is wealth planning. And this is where I think most people underestimate taxes. It's your biggest expense, maybe your biggest expense now, biggest expense in retirement, whether people realize it or not.

Our job here is to have you identify it. And there are multiple strategies you could do. We talked about backdoor Roth, realizing capital gains, there could be Roth conversions, there could be deferrals, there could be charity, there could be multiple things that you could do to save. We're going to continue.

Number nine is understanding markets. Now, this is interesting because, uh, let me talk to you like if you were my brother or sister. Just put your money, invest it, shut up. Don't worry about if it goes up or down. If it drops, even buy more. As long as you're buying indexes, if you're buying the index, who cares?

You're going to be fine. Now, obviously you can't guarantee it. But remember, I'm talking about my brother and sister here. Which I have a brother and sister. Two brothers and an older sister. So I would just say, shut up, you'll thank me in 30 years. Okay? That's a shout out to my older sister, Vicki. She knows I'll talk to her like that.

My two younger brothers, Andrew and Matthew. They know I talk to them like that now. So the idea with this of course is markets go up. So shut up. You're welcome. Now, I can't talk to you like that, even though I indirectly just did. So because I can't, I have to be a little bit more knowledgeable. I have to talk about the times the markets dropped, like in the early 2000, 2008, 2022.

And so how markets are resilient, how we are in capitalistic society and the markets always go up. Not always. It's not like you guarantee you're going to make money every single month and every single year goes up and down. But it's, I always say it's like playing with a yo yo, walking uphill, right? It goes up and down, but it makes money long term.

And the thing is people think like, Hey, just because the market dropped like in 2022 or in 2008 or in the early 2000s during the dot com bubble that everything lost money. Now, that's not true because 2000 and 2009, that 10 year period, if you were invested in the S and P 500 and you invested a million dollars, you only had 900, 000 after 10 years.

How annoying is that? Could you imagine being retired pulling 4 percent 40, 000 a year? That's 400, 000 over 10 years. Are you kidding me? You'll only have. 500, 000 left after your first 10 years of retirement. That makes no sense, but people think that's the only thing that lost or people think everything lost money.

That's not true. You have small cap value that was up over 200 percent large cap value that was up 50%. You have the REITs that was up almost 200 percent you have international is up 30 percent and international value up 130 small cap international up 130 emerging markets up almost 200 emerging market value up over.

400 percent and bonds up 50 to 80 percent respectively for the different types. So not everything lost. And are you just in large cap? Because when you look since pre great depression, you have that small cap has significantly outperformed large cap by almost three times as much. And when you look at also the randomness of returns, no asset class is consistently amazing.

Year over year over year, just doesn't work like that. By the way, folks, if you're just joining me, you're listening to Gabriel Shaheen, certified financial planner and your host to more knowledge, more wealth here on every weekend talking about all important topics of personal finance. And today I'm just talking about investment and understanding how markets work.

Yes, you invest in Radio Shack, you can lose and you did lose all your money. Same with WorldCom, Barrett Stearns, Lehman Brothers, Washington Mutual. I get it, right? You could lose money with the individual stock, but we're not talking about that. We're talking about an index. Like the S& P 500 is 500 of the largest U.

S. companies. Obviously, that's a little bit more safe. Wouldn't you agree? Of course you would agree. Everybody would agree. And so, and when one goes out of business, there's another one that's outperforming. Right? There's defensive stocks. There's companies, like during the COVID crash, tech companies did really well during that time.

Why? Because you had to use tech companies. Cause you were stuck at home. And so just understanding that there is more to your portfolio than just winning or losing. How come you can only be a winner and only a loser? It's not binary where you invest in something, you're either going to lose all your money or it's going to make a bunch.

It's get rich slow. Proper investing is for people who want to get rich slow. Warren Buffett gets asked, I feel like every six to seven years, how come more people don't do what you're doing? Because nobody wants to, his response consistently wants to get rich slow. Simple as that. So opportunity is there.

Just be disciplined. Understand what you're investing in. Some people just invest in real estate. Well, how did that go in 2008? Even right now, real estate is struggling a little bit. Especially if you had commercial office. That's not doing as well. Not everything is great forever. Hence the diversification.

Last item here is emotional investing. Emotional control. People freak out always. That's just human nature. People being worry warts. Part of the negativity of today's society with social media is people are quick to react. And they instantly see maybe with something they want today. They freak out when they say markets are going down, everything's happening, and they freak out and sell.

On the contrary, as I've quoted Warren Buffett I feel like a couple times in the past two weeks, and that is, when those are fearful, maybe like now, by the way, that's when you are greedy. That's when you should be greedy. And when those are greedy, be fearful, like how it was last year. The idea with this is you have to learn how to control your emotions in investing.

And most people don't. Some of the mistakes they make in their personal life is due to not being able to control their emotions. I look at myself, forget investing. You make mistakes with friends, family members, spouses, significant others. You know, it's funny, when a lawyer gets in trouble, they don't represent themselves.

Too emotional, they hire another attorney to do it. A surgeon typically doesn't operate on their child. You get what I'm saying? You want to be able to remove that from the equation, which is why so many people have a financial professional, a trusted advisor. This is why we're offering a free financial assessment to take a look at your system, your situation, and point out the things that you're probably not aware of.

And if you are aware of them, aren't you doing them? Are you too busy? That's another reason you probably shouldn't be doing it on your own. Let's just say you weren't aware of them. Do you know how to do it on your own? Let's say you do. Do you even like it? These are the things that we can help you with.

We're offering one to two meetings, one to two hours of our time folks at no cost. Folks give us a call. Our phone number is 855 963 8255. 2526 that's 855 96 Falcon like the bird or visit our website at falconwealthplanning. com. That's falconwp. com for short. We can help put together a personal assessment that can answer these questions.

That you have folks that was over two weeks long over an hour almost an hour of Going over the top ten retirement planning exercises. I'm gonna recap it again number one Are you on track for retirement number two understanding longevity number three understanding inflation number four? understanding the use of debt number five compound interest Number six, keeping costs of investments low.

Number seven, understanding taxes. Number eight, controlling taxes. Number nine, understanding markets and number 10, emotional. Investing and control. That was a fast, fast show guys. Hopefully you enjoyed those. Feel free to comment on them if you liked them and you can always get this episode or any one of our episodes on Spotify or on podcasts and don't feel free to visit our YouTube channel at more knowledge, more wealth and Falcon planning where you go to our knowledge center on our website is a direct link and you can get so many more fantastic strategies for you folks.

I want to thank you for tuning in with us. You can always reach out to myself or any one of our colleagues. At 855 963 2526, that's 855 96 Falcon, like the bird. Folks, hopefully you had a fantastic Thanksgiving. Hopefully you enjoyed the holiday season coming up. I want you to have a great week, and God bless.