Navigating Information Overload: Retirement Planning in the Digital Age, Ep. 256

Welcome to another insightful episode of the Capitalist Investor podcast! This week, our hosts Dave, Derek, and Tony delved into some pressing issues surrounding retirement planning and information overload. As financial advisors with a wealth of experience, they tackled these topics with clarity and expertise.

1. Information Overload in Retirement Planning
In today's digital age, the abundance of information available at our fingertips can be overwhelming, especially when it comes to retirement planning. Tony highlighted how easy it is to get lost in the world of online advice. You might start with a simple Google search about Roth conversions, only to end up confused by conflicting articles and opinions. The key takeaway? Not all information is relevant or accurate for your specific situation. It’s crucial to sift through the noise and focus on reliable sources or consult a professional.

2. The Transition from Accumulation to Retirement Mode
One of the major hurdles many people face is the mental shift from accumulating wealth to drawing down on those assets in retirement. Derek discussed how this transition can often pose a significant mental block. Many people struggle to visualize what their retirement paycheck will look like and how to manage their income streams, taxes, and healthcare costs post-retirement. Financial advisors can play an essential role in navigating this shift, providing clarity and peace of mind.

3. Misleading Online Financial Advice
The internet is flooded with financial advice, but not all of it is trustworthy. Luke emphasized that much of the content found online might be sponsored or biased, often designed to push specific financial products. He pointed out that some articles are tailored towards a specific demographic, such as individuals earning around $80,000 annually, which might not apply to everyone. It’s vital to critically evaluate who is behind the advice and whether it suits your unique financial situation.

4. The Importance of a Comprehensive Financial Plan
Tony stressed the importance of having a robust and detailed financial plan. A good financial plan takes into account all aspects of your finances—from spending habits and income sources to your long-term goals and risk tolerance. It's not a one-time event but an ongoing process that requires regular updating, especially when you encounter significant life changes like marriage, retirement, or moving to a new state. A comprehensive plan helps ensure you’re prepared for whatever life throws your way.

5. Education and Comfort in Financial Decision-Making
Both Tony and Luke concluded the discussion by emphasizing the importance of education in financial decision-making. It’s essential to understand the recommendations you receive and be comfortable implementing them. A good financial advisor should act like a partner, educating you on the pros and cons of each decision and tailoring their advice to your comfort level. Remember, it’s your financial future, and you need to be confident that the path you’re on is the right one for you.

Navigating the complexities of retirement planning and financial management can be daunting, especially with the deluge of information available online. This week’s episode of the Capitalist Investor has underlined the importance of critical thinking, personalized financial planning, and ongoing education. By focusing on these key areas, you can build a more secure and comfortable financial future. Keep listening to Capitalist Investor for more insightful discussions and expert advice.

Feel free to reach out with any questions or comments at info@swpconnect.com. Until next episode, happy investing!

Transcript

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Hello, and welcome to this week's episode of the Capitalist Investor. As always, you have me, diamond hands D, and we got Tony the tiger and back again, Dave Abate. How we doing? Great to be back. Great to be back, man. By, by popular demand. Absolutely. Yeah. Ratings went through the roof. Give the people what they want. That's right. That's right. I'm not a stubborn man. I'll give people what they want. So. All right, so for this week, we're gonna do our, you know, our educational corner, our retirement education corner, and today's topic, we're gonna talk about information overload. You know, I know when we teach our classes and stuff, we talk about Napoleon Hill and the, the most common retirement mistakes is procrastination. Okay, well, I'm not going to procrastinate anymore. I'm going to hop on the Google machine and type in retirement. And then that's where the procrastination comes, because there's just information overload. If you want to look up a topic like Roth conversions, by the time you get to the third or fourth page, reading everyone's articles, you probably don't even know what to do anymore. You're so confused with everyone's opinion that you're stuck, stuck in the mud. Right. So when it comes to retirement, things that we could or should be thinking about are, what are your investments doing? How about taxes? How do I make an income? When to start Social Security? How does healthcare work? How about long term care? Do I need it? Can I afford it? Do I care? And then estate planning, those are kind of the key elements come to mind when we focus with our clients and start taking a look at what are the most important topical things that I just mentioned, and they could be different for a lot of people. Everyone's not built the same, especially financial plans. I've said it once, and I'll say it again, is I'll look at somebody's financial situation on paper for five minutes, and I'm like, hey, how am I doing? What do you think? And I'm like, I have no idea. I've built over 500 financial plans in my career, and, you know, sometimes the results still boggle my mind. I'm like, how does that fail? Or how in the heck did that work? Right? Like, so what are your guys thoughts? So one of the biggest things that I hear over and over again when we sit down with clients is just the mindset change from when they're working in accumulation mode and then looking ahead two, three, five years when they plan to retire, transitioning into retirement mode and what that looks and feels like. That seems to be a big mental block for people, like understanding how this is all going to work. And I think one of the biggest things that we help prospective clients with is getting that nailed down, getting a game plan put together, helping them understand what that retirement paycheck is going to look like so that when they do, you know, coast in that last stretch before, you know, before retirement, they feel good about where this thing is headed. Yep. You know, I would say, you know, this is a great topic, by the way. We see it all the time when we talk to people. Because nowadays, if you have a question on something, you can just hop on the Google machine and get the answer right. Anything around the house, I can watch a YouTube video. If my vacuum cleaner breaks, I can watch a video. The answers to your personal financial situation just aren't on the Internet. And it can actually make you more confused than when you first started or. Just provide bad advice. Yeah, for sure. Because I think what a lot of people don't. Well, I think two main points that people don't realize. Point number one, most of that information is being paid for to be put there in some manner. So whether it's an ad that you get served up on Facebook or Instagram or whatever the case may be, a lot of those articles are actually just written by the insurance company or that financial firm just to try to push you towards a certain product. So that's point number one. Point number two, I think when you first sit down and start to, like Tony said, not procrastinate, we need to get this taken care of. How are we going to get this done? When you go out there and look for information, the, the information that you are seeing might not even be directly, you know, might not directly be provided for you. So, for example, if you go watch or if you, if you're reading Money magazine, right, or Money Inc. Or whatever the case may be, the articles in that magazine are specifically designed for a certain income range. And that's usually around $80,000 a year. It's probably a little bit more now since that number is a little bit old, but that median income, they're kind of serving you up articles that might be just for that certain demographic. And if you're not in that demographic, that information in that magazine might not apply to you at all. Yeah. So I mean, for a good example is we always make the example of like Susie Ormandeze, right. Had a marathon this last weekend, and she talked about municipal bonds and how awesome they are and how you should be involved in them. And I said, okay, well, let's take a look. You know, like, my, as soon as I peel that back, I'm like, okay, what tax bracket are you in? And she's like, well, she didn't talk about tax brackets, Tony. She just said, this is awesome. It's tax free. I'm like, oh, cool. All right, what kind of money? Where's your money? Is it in cash? Is it in an IRA? Is it in a roth IRA? You know, because then we need to, like, actually figure out, like, the tax implications sometimes of the investments you're in or the tax moves we're about to make. Because if you can find a three and a half tax free municipal bond, but you can find a 5%, you know, investment grade bond after tax, well, obviously municipal bond is 3.5%. But maybe because you're in a lower tax bracket, that corporate bonds that's yielding five is actually yielding four on a net basis. Guess which one's higher? The corporate bond, not the municipal bond. So again, it comes down to a lot more than just a cookie cutter, surface level information that you get on different mediums. And the parallel that I draw is like, is kind of like when you're in that with your health, right. You go to the doctor and you present some symptoms, and the doctor really needs to, and they do this. They need to have a holistic view of your entire health picture. Right. You can't just go in there and say, hey, you know, I was watching tv and saw this ad for, you know, this particular pill, you know, on the, on the tv, and I decided to start taking it because it treats this one symptom. But you, you know, you need to know how it impacts and relates to all the other medicines that you're taking. Right. And your whole health profile, because what you could be doing is exactly the opposite of what you should be doing based on your whole picture. Yeah. And that example, your body's a chemistry set. Yeah. So it's like, how does, how does your body react to this? Because it's going to be different for. A lot of finances, to your point, Tony, is similar. Right. You need to know what tax bracket you're in, your income situation, a lot of other moving parts are in place, and you really need a qualified person to understand how that particular strategy relates to your situation. Right. And so at the end of the day, to kind of wrap this up, it comes down to building a plan, getting all of your information into some planning software with somebody giving it some more than an hour's worth of thought. You know, our planning software is pretty robust, and it takes several hours to build a plan because we're trying to, you know, I guess, lay out everything that you're doing from your spending to, like, what you want to do when, before you retire. What do you want to do after you retire. What do vacations look like? Hey, I want to, you know, ramp up my vacations in my go go years and ramp it down in my not go go years and sometime in your mid to late, you know, mid to late seventies or whatever it may be. So it comes down to building that roadmap. Let's roll over every rock and really see what you're doing and also make sure that you're working with somebody who educates with you. You know, I always like to use the analogy like, I don't run a dictatorship, right? I build a financial plan. I have my recommendations. I have what I think makes sense. But I if you're not comfortable with your recommendations that are rolled out, don't do them, because there's probably an option b or c that you're going to be more comfortable with, whether it's better for your plan or maybe makes your plan slightly worse. But at the end of the day, you need to be able to sleep at night. So with that being said, build a plan. Educate yourself. And just know that when you build your plan, it's not an event, it's a process, because things change. I might be working the next three years and, okay, ho humdous. And then something happens. I retire. So anytime there's a life event, I'll say, refresh your financial plan. So whether that's a birth, a death, a marriage, a divorce, quitting a job, retirement, moving from state to state, just anything can actually change the path that you're on with your plan. And those major life events are big deals to get it all refreshed. Absolutely. Well, so that was a good episode. There's a lot of truth behind what we just said, especially about seeking out information on the Internet in the financial industry. So like Tony said at the end there, make sure you educate yourself. Make sure you understand the sources that you're reading from. And if you're working with someone, make sure that, that you are comfortable with those recommendations after that education process. So thanks for listening this week. If you guys have any questions, comments, hit us up@infoconnect.com. and we'll talk to you next week. The opinions expressed in the podcast are for general informational purposes only and are not intended to provide specific advice or recommendations for any investment, legal, financial or tax strategy. It is only intended to provide education about the financial industry. Please consult a qualified professional about your individual needs.