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Redrick Terry: It’s time now for 4 Your Money. We’re joined by David Nelson, CEO of NelsonCorp Wealth Management. David, welcome back.
David Nelson: Thanks, Redrick. Appreciate it.
Redrick Terry: Absolutely. And we talked about retirement mistakes last week, and continuing on with that conversation. What are some main items that you see that people kind of routinely overlook?
David Nelson: Sure. So the chart that we brought, I think will give a really nice, uh, um, a layout as far as some of these th-the big items. Longevity, I can talk about that for an hour-
Redrick Terry: (laughs)
David Nelson: As far as the importance of that. But, again, reminder if you didn’t see last, last week, we spoke about this. Longevity, pertaining to retirement, is the average person that’s going to be in retirement. If we take a married couple, north of 20 years. So, it’s really important that we get this right. That individuals have that money as far as when they need it, as far as down the road.
Healthcare cost/long term care cost. Again, stuff that people don’t wanna talk about. But, boy, this is really crucial. We all know that healthcare costs have gone up. We all know that healthcare costs have gone up. We know that long term care expenses are gonna average between six and probably ten thousand a month. So this is a really big expense. Do everything we can to try to avoid this, but unfortunately, the statistics are what they are. Several people are going to go down that path.
Taxes. Do I wanna pay taxes today and get it over with or would I rather pay a little bit of tax over a long period of time? So we have some really boring but important conversations with people pertaining to taxes. I-I-it’s really key as far as to get that right.
And then the last one, inflation. So easy for people to look pass this. Um, I like to… My average client that I work with is roughly 70 years old. And I ask them the question all the time, as far as… What did yeah pay for your first house? And what I hear fly out of their mouth is 15 to 30 thousand. That’s kinda the range for tha-tha-that age group.
Well, $15-30,000, again, back then was a bi-big wad of money. I asked them the question today, “What’d you pay for your last car?” And guess what! They paid more for their last car than they did for their first house! And if somebody would’ve brought that up to them years ago, they’d say, “No way. It’ll never happen.” But it has happened. That’s the silent killer. Inflation is the silent killer. We have to acknowledge it. We have to plan for it. And, again, if we acknowledge it and plan for it, it can certainly, uh, be to our advantage as far as in retirement. Using the right instruments.
Redrick Terry: Certainly. And, y-you know, it’s been obvious from our discussion that retirement obviously is very complex, and it’s one bad decision really that kind of takes it to that next level. Uh, so what decisions are a must for people who want to get it right?
David Nelson: So, get it right, I guess, starts with I retired, I’ve got this block of money, as far as at work, and I wanna put it into a self-directed IRA. Ya better do it right. Because if you don’t do it right, that becomes taxable, too, as far as day one.
So that certainly can, uh, you know, uh kick the train off the tracks, as for as r-right out of the get go. Th-the second, and this is for most individuals out there, um, very high on the list, and that is get the social security decision right.
I know we talk about it a lot. People hear the chatter as far as social security. Um, this is a big asset. Whether it’s a monthly… coming in monthly, or whether they have a lump sum. This amounts to a huge sum of money, and people have got to get this decision right. The only way you can get that right is you have to factor in the other things. You have to understand, as far as the money that you have. You have to factor the tax bracket y-you’re in. The cashflow. Life expectancy. All these things come into play to try to get th-th-this decision right. And, again, social security is a biggie. Rolling your money over and doing it correctly is a biggie. Those would be the top list as far as for today’s- for today’s discussion.
Redrick Terry: Absolutely. I like what you said. So you wanna keep that train on the tracks-
David Nelson: That’s right.
Redrick Terry: When we’re talking about retirement.
David Nelson: Absolutely.
Redrick Terry: (laughs) Alright, David.
David Nelson: It’s so important.
Redrick Terry: Thanks so much for joining us.
David Nelson: Thank you, Redrick.
Redrick Terry: And if you missed any of our conversation, we’ll have it for you online at OurQuadCities.com.
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