Ep. 209 - Retire in Style: Navigating Wealthy Retirement

[00:00:00] Good day. This is Gabriel Shahin certified financial planner and your host of more knowledge, more wealth here 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. Now I'm the president of Falcon Wealth Planning. We are fee only non commissioned true fiduciary folks.

[00:00:21] go over everything that involves the dollar sign folks and would love to help. If you want help relating this show to your specific situation, please give us a call. Our phone number is (855) 963-2526. That's 8 5 5 96 Falcon like the Bird, or visit our website@falconwealthplanning.com. That's falcon wp.com for sure, where we'll give you one to two meetings, one to two hours of our time.

[00:00:46] Folks at no cost to answer those questions that you have. About your situation, whether it's about retirement, taxes, investments, estate planning, insurance, folks, you name it, anything that involves that dollar sign, we would love to help folks. And we've got offices all over, by the way, and we can help through Zoom as well.

[00:01:06] But we are actually even opening up a second headquarters over in Chicago, Illinois. We already got a Chicago presence over there. But the point is, folks, we can help, doesn't matter where you are. Give us a buzz. We can add value to your situation, give you those lay hanging fruit to enhance your situation because here's the thing you may be fine With or without our help you could be fine But because you respect money right and would probably prefer the money for yourself or your heirs versus you know the IRS That's why we're recommending getting help a professional help and just making sure if nothing else to validate what you're doing because you may have an Advisor right now, but are they fee do they work with people like you on a daily basis?

[00:01:50] Are they going to be able to help on tax advice? Because remember, most people in this industry do not give tax advice folks. They're not allowed to do so. So at least on our end, we're allowed to tell you where we can add value because that is the most important piece of financial documentation that you have to your name.

[00:02:06] And part of the reason we also do investment management, because heck, my understanding of your tax. Bracket, you can purposely and effectively manage your money where capital gains is tax free for you. Qualified dividends is tax free for you versus putting it into a private debt fund or a bond fund or a treasury that is fully taxable.

[00:02:25] Are they invested in the right accounts? Should that be invested in a brokerage or a non brokerage, a qualified or non qualified? These are the things that people struggle with on a daily basis, which is why we offer our services. I mean something as simple as just where you should live, like there's simple concepts to that and that's part of today's segment.

[00:02:46] I'll tell you this, I spoke to a very prominent attorney recently. He does class action settlements left and right and massive cases. I mean this guy does fantastic. He was told, by the way he has multiple millions in multiple different banks, and he was told to write a 13 million dollar check. for estate planning, taxes for insurance, life insurance.

[00:03:08] Listen, I get it. When you start to be like ultra uber wealthy, it makes sense to do life insurance, but you're working with a commission based advisor. That's only intention is to get their payday here in fucking wealth. We don't get that commission actually States in Florida and California actually allowed to rebate the commission back to the client.

[00:03:28] That's the value. So let me give you an example. Instead of running check for 13 million, maybe only red check for 10 million. Assuming the 3, 000, 000 was commissioned, that 3, 000, 000 could be applied to your policy. Now, I'm sure there's a billion better ideas. How about this? 13 million better ideas of what you could do for estate planning reasons versus putting into a life insurance policy.

[00:03:47] Especially, this individual actually is highly liquid. You get what I'm saying? This industry is tricky. It's manipulative. You see the movies, Boiler Room, Wolf of Wall Street, Glen Gary, Glen Ross. It's all about trying to sell you and make a commission. Now, hey, you're at Falcon Wealth. I'm not trying to say we're a non profit company, but we sell brain at the company.

[00:04:11] We don't make commission. All our advisors are salary. We just, we get a profit sharing at the end of the year. The idea is, their salary is not increasing. by signing you. They don't get a commission, a payday by working with you. The goal is to build relationships here. And I talked about it last week.

[00:04:31] There's very few people in the world that want you to succeed. The planner's goal is to do that, not just focus on the investments, assets going up. How about working on a strategy where you can increase your social security or realizing that, Hey, maybe you should get married because you're a widow six months later after 60 versus now, because now you can click on your survivor social security.

[00:04:55] You get what I'm saying, there are different factors. How about, we have a client, he retired at 55 years old, he has yet to pay a ridiculous amount in health insurance. He was able to get subsidies by controlling his income by living off his brokerage account and Roth accounts, where he has saved, on an annual basis, 25, 000 a year.

[00:05:12] The gentleman is 62 years old, he lives in Florida now, he moved from Arizona. He has saved over 200, 000 just in health insurance. You get my point? There's more to it than the X's and O's. You gotta be smart about this. Work with someone who's done this multiple times. You wanna work more than just with a one man shop, even a five man shop.

[00:05:33] You wanna work with a woman too, by the way. We're not saying. You know why I didn't say woman? Because, uh, one woman can do what two men can do. So, uh, but the idea is here is you want to make sure you have a, an idea of multiple people because there are specialists. I specialize in tax planning because high income people do tax planning.

[00:05:58] It seems to be my niche has lately have been the eight and nine figure net worth individuals because more money, more problems. Now, what is that 15 percent of our business at Falconwell? Me and a couple advisors do that. Well, there's 17 advisors. So, majority of the advisors handle the majority of the every other clients.

[00:06:19] And here's the beauty, something may happen in your life, and we have experience from all angles. Whether it's from real estate, estate planning, high net worth individuals, windfalls. People sometimes sell a business, inherit a lot of money. We can help, and yet again, that's why we're offering that free financial assessment, folks.

[00:06:38] Give us a call, we would love to help. Our phone number is 855 963 2526. That's 855 96 Falcon. Like the bird, by the way, if you're just joining us, you're listening to Gabriel Shane certified financial planner and your host more knowledge, more wealthier on every weekend talking about all important topics of personal finance.

[00:06:57] And today I wanted to talk about where wealthy retirees like to live. And I'm going to give you those, the reasons for that. And I'll be more specific with that. There are core items, almost 10 different things that are important for what people feel of value in retirement. Now, most people want to live maybe close to family or friends.

[00:07:20] Most people don't want to move in retirement. But there are some people that are just sick of the state. I'll give you an example. California. Yeah, you heard it. Our headquarters is here in California. There's a reason we're opening up out of state. But the idea is that California has multiple issues.

[00:07:38] Choose your... Problem, right? Problem with the P, you could start with politics. You could start with pollution. You could start with traffic. You could start with cost of living. You could start with taxes. You get what I'm saying? Not just taxes, but sales tax, property tax. and state tax. You get what I'm saying?

[00:07:56] There's a lot of issues. My point is people move and it's not just that. You got people in the midwest do that all the time. People in the northeast do that all the time. Where do they go? They move to Florida. It's a very popular retirement area. So the idea here is let's go over some of the variables that people just aren't aware of because sometimes they move and retire in a state where maybe their grandkids are.

[00:08:20] And why is that important to note? Because those states might have certain Issues that may affect you and your retirement. Something as simple, for example, if retiring in the state of Utah and Colorado, they tax social security income or majority of states, including the crazy state of California, they do not tax that income.

[00:08:42] So the first thing to take into an account is taxation on retirement accounts and social security. Cause as I said, you do know, uh, Illinois, the state of Illinois does not tax your IRA income. Your retirement income is tax free over there. So, yet again, example, other example is Utah and Colorado tax Social Security.

[00:09:05] Now, most of us get taxed on our retirement income when we take out our IRAs or 401ks. We have to pay federal and state taxes. So, this is a consideration for people in retirement. So, that is number one, just the taxation on assets. I consider Social Security an asset. Why? It pays you income. You get what I'm saying?

[00:09:26] Now, number two, housing prices, right? People want to retire in California by the beach. Great, but that's expensive. Yeah. Versus you go to states like now, all states now average home price nationwide is over 400, 000. But historically speaking, Texas is lower cost. Florida is lower cost. Arizona is lower cost.

[00:09:50] Nevada is lower cost. So these are popular areas because let me give you an example. You have a house you buy in California, average house here is about 800, 000. Now let's say you do go through your working career, 800, 000, let's say you bought it at 50, you want to retire at 65, you still have a mortgage on that.

[00:10:08] But two things, your home appreciated the value and you paid down that mortgage. Assuming you put 20 percent down, you might have 400, 000. Home is now worth a million. You sell it, you pocket 600, 000 tax free. You can go buy a house cash. Now, whether that's the right thing to do is debatable, but in this high interest rate environment, I'm not going to be mad at you for doing that.

[00:10:28] So, those are just a couple of things to take into consideration. Another thing is just state taxes in general. And by the way, there's a handful of these. Like I said, we have nine of them and these are items we're going to talk about also in our next segment here. But the state taxes, you have states like California, that's the highest at 13.

[00:10:48] 3%, depending if you're a millionaire versus states like Washington state, Nevada, Texas. Florida, you know what I'm saying, right? You know, you've heard of these states, right? They don't charge a state tax. So if you are in fact in retirement and blessed enough to be making 100, 000 a year in pension, retirement, investments, rental income, whatever the case is, well, you could save potentially 10 percent of that depending on the state that we're comparing to in state taxes.

[00:11:18] If you were to live in a Texas, a Nevada, a Florida and so on. And there's other states like Arizona that reduce their tax silently by 70%, went from four and a half to about two and a half percent. So by the way, folks, there is much, much more of this here that we're going to talk about. We still going to talk about estate tax, sales tax, property tax, safety, weather, proximity, and so on.

[00:11:41] So we'll be back.

[00:12:25] Welcome back, folks. This is Gabriel Sheen, Certified Financial Planner and your host of More Knowledge, More Wealth. Here on every weekend, talking about all important topics of personal finance. And today, I just thought, let's talk about where the wealthy people like to live. Where they want to live, not just now, but in retirement.

[00:12:42] And, you know, I can go over after this. I'll talk about Forbes. Forbes has an article, and I'll tell you, they have the top 25 places to live. And this one's as of 2022, right? 2023 isn't done yet. So I'll go over that a little bit later here. And these are specific cities and so on and so forth. I bet you the villages Florida will be one of them.

[00:13:02] I'm just telling you. Retirement capital of the U. S. I feel like. So let's continue the conversation. The next part of this I'm gonna go over is estate. Taxes, the state tax is very important guys. State of California does not have an estate tax versus states like Washington and Oregon do and many others throughout the country as well.

[00:13:21] So there are things you have to be aware of where you might only have a million dollar exemption. What are you talking about, Gabriel? Well, what that means. Is if you have 2, 000, 000, they'll tax on that extra 1, 000, 000 of estate tax. The state taxes that saying you can only have so much money. The state might tax 1%, 5%, 10 percent up to 16 percent depending on the state and how much you have.

[00:13:44] So a funny thing is certain states like Washington, that's one of the more popular ones is you, there's actually no gift tax. So other states. Do you have a gift tax? So you have to look into that. That's extremely important. Folks. And yet again, if what I'm saying is resonating things that you weren't even aware of, things you want to talk about, give us a call.

[00:14:01] That's why it's important to have offices all over the place where you specialize in different regions because each state is different. You can't just specialize in California. That's different than New York. That's different than Texas, Illinois and Washington and so on. So we would love to help.

[00:14:15] Remember our phone numbers, 855 963 2525. That's 855 96 Falcon, like the bird, where we can help relate the show to your specific situation. Give you a couple meetings, a couple hours of our time at no cost. Now, uh, that was a little bit about estate taxes. That's huge. That's a whole conversation by itself, folks.

[00:14:38] Okay, so let's continue the conversation. Uh, sales tax is also very important. You got states like. Oregon that does not have a sales tax. And there's multiple others that are out there, but just fixating on that. That's nice. When you buy something for 99 cents, you give them a dollar. They actually give you a penny back versus you buy something for 99 cents and they ask for a dollar seven, a dollar eight, a dollar nine, depending on where you're at here in California and LA County, dollar 10.

[00:15:05] So the idea here is, of course, that you can save on sales tax and also focus that there are certain counties that are cheaper than others as well. So this isn't always state specific, but also county or city specific as well. Some people like to retire in states with no sales tax, especially those who like.

[00:15:24] to get toys. I know Montana is another popular one as well. The other part is property taxes. This one's a big one. Now here in California, there's Prop 13. So other states have other rules on property tax, California being the most popular one, which means you're. Property tax stays at the purchase price, uh, that's the, the Jervis, uh, law and it can only have an increase of 2 percent uh, year over year.

[00:15:50] Uh, but the other place like Texas, I just got on the phone with somebody the other day that said they're trying to fight with the county because their property tax went up by 35%. They said their home appreciated by 35%. And I, he said, I'm trying to debate that right now. I was like, really? I go, yeah, you should.

[00:16:07] I could have sworn it increased in value by 50%. I'm joking with them, of course, but you get what I'm saying, right? There's always something to focus on and other states are very difficult than other. I know the state of Illinois also has a high property tax and New Jersey and a few others as well. Next one.

[00:16:28] It's just the good old safety, folks. I mean, you've seen the stories in San Francisco, in New York, in Philadelphia, in Los Angeles. I mean, you got to look at the safety, because you know what I notice with a lot of retirees? They're actually in better shape in retirement than they were 15 to 20 years ago.

[00:16:45] Because why? They're working out. They like to walk outside. They take care of themselves. They finally have the time to do that. Well, if you're living in an area that's not safe, you do have to factor what are the safest areas and states to live in. Those that actually are comfortable prosecuting people who break the law.

[00:17:01] Uh, versus other states that are much more liberal. So yet again, this isn't a political conversation, even though there are people that do move for political reasons. Now, if you notice, I really didn't focus much on that. It is important. I have seen people do that where they move to get mostly right. My experience is California to get the hell out of California because of the political climate.

[00:17:23] I get it. But the analysis that we're doing here is wealthy people. Wealthy people know, at the end of the day, their focus on what saves them money in their pocket. Whether you're blue or red, that's not going to impact their pocket directly. I'm going to continue this conversation, uh, so, so, yet again, safety is, is vital.

[00:17:42] And that, yet again, can be town specific. I know there, any town has a bad area of that town. So, but people look at states as well. Next thing is good old weather. Now. You're in sunshiny California. I can't complain too much. You know, I lived over 20 years in Arizona. That was a hot place. It's funny. People in Arizona sometimes have two homes if they can afford it.

[00:18:03] They have the one in metropolitan, uh, Phoenix, we'll call it. Maricopa County or whatnot. And then you have up by the mountains. Payson, Heber, Flagstaff, Prescott, you know, that is another place people look at. They need two homes. People in the Midwest, I'm sorry, they need two homes. They got the place in Florida or warmer weather.

[00:18:22] Minnesota people, half Florida, half maybe in Arizona. And then you have the Northeast. Yet again, they need two homes. Some of them have three, with the Hamptons and so on. You get it. But the idea is in California, you don't. Why is real estate more expensive? Because you need most of them one home. So you have to kind of take a look at the weather in general.

[00:18:42] And another thing in retirement, people normally don't like cold weather. They like warm weather. It helps with arthritis. It helps with just overall, just comfort getting in the pool. Okay, at nights to walk, it's, it's, it's easier to walk in the heat versus the cold. It's also safer to walk in the heat versus slipping on ice.

[00:19:04] You can hurt your hip on something like that. Uh, if you know what I'm talking about. So just, these are the things you really just have to factor. Keep that in mind. And this is what a wealthy people do take into consideration because they have to factor on. All moving pieces of their situation. 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 every weekend.

[00:19:28] We're talking about all important topics of personal finance today. We're just talking about what wealthy people, retirees in retirement, what they focus on. And here in this order is state taxes, housing prices, taxation on your retirement account, IRA and social security, state tax, sales tax, property tax, a lot of the tax there, uh, safety, weather.

[00:19:47] And. Last one. Just the proximity. Just to see what's close. Nobody really wants to be driving 20 30 minutes away. Most of the time, people in retirement, even though we have seen people that want to go in rural areas, those are typically people in early retirement, not mid to late retirement. And yet again, focusing on where they live in proximity, this is why some people go from having a two story house to a single story house as well.

[00:20:14] Because they know as time, uh, goes on, they just want life easier for them. And climbing a bunch of stairs may not be as easy. But the proximity of grocery stores, events, sporting events, theaters, theme parks, just in general, they want to be close to everything. We've seen that where they're even comfortable not having a car and they want to be comfortable walking everywhere.

[00:20:39] We've seen that very popular as well. This is what wealthy people in retirees, this is what they care for and what they look for. Yet again, right, wrong, or indifferent. The answer to this is. Don't create a worksheet on all of these variables and put a ranking system to your liking. Number one, it's what makes you comfortable.

[00:21:01] And number two is, what do you value the most? If it's family, you're gonna be stuck. You're gonna be with family. If it's yourself and money, go to, uh, Wyoming. You have no tax on anything outside of property tax. You get what I'm saying? So it's like, but then again, who wants to live there? You know, it has very brutal winners.

[00:21:24] So it's just, if you're somebody who always wants to stay busy, maybe the proximity to city life is something that you want to do. Each person is different. These are just the variables that people take into consideration to have a successful financial retirement. But part of the relationship that you should have with somebody is somebody who truly wants what's in your best interest at all times.

[00:21:47] That takes a look at your situation, unbiased third party and said, listen, you can afford it. Who cares about the higher taxes? You're going to be going crazy in the middle of nowhere. Just stay where you are. You know, you, you don't have a capital gains if you sell your home. You have a network of people.

[00:22:04] You're well respected. You share the same values of the region that you're in. I know for clients that have gone to Idaho and Texas, people don't really care for them. That's not, Oh, you're from California. They give them a weird look. They rush to change their plates and a driving license as fast as possible.

[00:22:22] I'm just saying. That these are the things you have to have a conversation with. And this is not a blanket statement that you can just give advice through a webcast or social media. This is something that you need to specific to your situation. To understand what is the most beneficial for you. I didn't say financially beneficial.

[00:22:42] Full on. I didn't say personally. Right. Personally. Okay. Everybody buy a 5 million house. Like, no, you can't do that either. Right. It has to make sense all the way around. This is why we're offering a free financial assessment where we give you one to two meetings, one to two hours of our time folks at no cost.

[00:22:58] We can answer those questions for you. We can help you. We can point you in that right direction and tell you what you need to 855 855 8555. 9 6 3 25 26 that's 8 5 5 96 falcon like the bird or visit our website at falconwealthplanning. com. That's falconwp.

[00:23:22] com for you and point you in that right direction. Direction. By the way, folks, that was a fast, fast show. I want to thank you for tuning in with me this weekend. Feel free to reach out to myself or any one of our colleagues here at pocketball planning. Our phone number is 855 963 2526. That's 855 963 2526.

[00:23:40] 96 falcon like the bird or visit our website at falconwealthplanning. com. That's falcon wp. com for short where you get this episode or any one of our previous episodes as well. You can join our podcast or Spotify and even on YouTube. We have video cast of this along with our knowledge center to just give you information on what can help you make proper and better financial decisions.

[00:24:00] Folks, I want to thank you for tuning in with us. I want you to have a fantastic weekend. Have a great week and God bless.