Financial Planning with Jeff & Judy

Michelle (00:30)

Welcome to Decluttering 55 Plus with Michelle Passoff. This is the place to come for news you can use to get things done. Everybody knows that too much stuff is clutter and cleaning it makes you neater and tidier. To us, it is a life management tool that helps you navigate your next steps. This is what my book Lighten Up, Free Yourself from Clutter is all about. As Baby Boomers, we have a lot in front of us that is confounding and confronting.

So we sweep things under the carpet and put them off another day or forever. That is clutter because it keeps us stuck. And my new book addresses all of that. So we’re going to bring experts, authors, and authorities here to talk with us about health, relationships, technology, finance, housing. What are you going to do next in life, passing down your life stories, and even the challenges of making final arrangements. Here we aim to learn.

open new possibilities, choose, take action and create a legacy, not a mess. So let’s get started. Today, we’re going to talk about how to get your financial house in order with Jeff and Judy Snyder. Jeff calls himself the chief certainty officer at Homestretch Financial, a company that works with an extensive team of experts to build plans for clients utilizing the best financial tools of the trade.

And Judy is a certified financial transitionist, a certified professional retirement coach, and author of the book, Becoming Retiredish, a guide for the nearly and newly retired. This book provides a guide to happiness and fulfillment, including, but not exclusive to your financial life. Judy and her husband, Jeff, are co-founders of Home Stretch Financial, a financial services practice that helps clients create certainty for their retirement.

And who doesn’t want certainty, Jeff? So let’s start with you. Let’s cut to the chase. Money, money, money first. How do we get our financial house in order? Whether we’re approaching retirement or well into our retirement years, help us.

Jeff (02:35)

Yeah, so I think the first principle that’s important for everybody to understand is that better plans get better results, regardless of when you start and regardless of what you start with. The key is to get started. Absolutely. And you need a plan. It does. And you know, you need a plan. Things don’t happen by coincidence. Things happen by plan. And so you’re going to need a plan. And so the place to start is

Michelle (02:49)

Start is always the key, right?

Jeff (03:05)

to understand where are you at financially today? What are your circumstances, concerns and goals? And where do you want to get to? And then you need to have a plan that says, how will I do that? And again, there’s a lot of people that are big into DIY, do it yourself, right? And you can certainly do that and try to educate yourself. I always believe in the principle of hiring the expert. Okay, hire the person that’s an expert at something because they can impart wisdom on you and create what we call a vertical startup.

You can try to figure this out and over time, maybe you get there or you can go right up to the place you want to be immediately. And that’s where you want to hire a team of experts. So the number one thing that I think you should look at when you’re looking at your retirement plan is do I have a comprehensive, integrated, holistic plan that’s been put together by a team of experts?

Michelle (03:56)

Can I interject something there, Jeff? You say to hire somebody, how do you know where are they? How do I know where to find them, who they are? They come with all different names. How do I choose the right person to help me?

Jeff (04:14)

Yeah, so I think you’re gonna primarily look in a couple of different directions, right? The first thing is I would ask people that you know, like, and trust, people that you respect that seem to have the success levels that you want, I would ask them for referrals, okay? Referrals is a great way to find somebody. I wouldn’t take one referral, I would get multiple referrals and then I would interview them. The most important thing is to trust your gut feeling.

Okay? And a lot of times people will end up working with somebody, but they have a gut feeling that says, is just not the right relationship for me. And again, I think it’s critically important that there’s a chemistry and a trust between you and your advisor. A lot of times people will say, Jeff, Judy, what do you guys do? And I would say, we’re in the trust business. I have to trust you and you have to trust me. If we don’t have that trust, then we can’t work together. The other thing that I would also look at is,

you know, ⁓ do the people that you’re looking at maybe working with, are they congruent with your values and with what you’re trying to achieve? So just as an example, know, Judy and I have a passion for financial literacy. for 25 years, we have taught in different type of communities. We’ve had a radio show, we’ve done podcasts, because we believe that sometimes we don’t do better because we don’t know better.

So how do we make sure that people know better? Pardon?

Michelle (05:47)

⁓ They

should teach us starting in kindergarten

Judy (05:51)

Quick.

Jeff (05:52)

They should, but too often you’re going to end up shooting all over yourself. So what they should have done is not really what they’re doing. I agree with you. I’m very pleased that the state of Florida, they passed a law that says in order to graduate from high school, you have to complete a financial literacy course. Now that’s great news. The sad news is only 33 states have that. There’s still 17 states that don’t require that.

So I’m very much with you about education, but the point I was trying to make earlier is that we’re passionate about financial literacy. And one of our areas of really deep passion is about the whole retirement planning space, which is why we belong to SOFA, Society for Financial Awareness, and we teach classes that are basically about the financial literacy. We do classes at local universities, at six hours of education.

to teach people what are all the aspects of retirement planning that they need to be aware of to have a successful plan.

Michelle (06:55)

So can you give us a short course here today? What are the top three things we should, when should we start retirement planning? And if you haven’t started by the time you say to start, how can you catch up?

Jeff (07:11)

Well, number one, you can only demonstrate where you’re at. so it should have been 10 years ago. mean, what’s the old Chinese proverb? When is the best time to plant a tree? 20 years ago. When’s the second best time? Today, right? I mean, so again, I don’t think it really matters when you should start. It says get started. But it’s It’s never too late. We work with people in their 30s, okay? And there’s a little bit of a different aspect for them than maybe people in their 50s.

Okay? But still, it’s the same process, right? And so I think that the number one thing is get started and bring in somebody that can have that team of experts to help you develop your plan because no two people are going to have the same circumstances, concerns or goals. But in terms of what really people should be worried about, you said, is there three three nature things, right? The first thing that I would say is tax rate risk.

And this is probably new for people because they’re not even thinking about tax rate risk. So let’s look at the facts. The facts are in 2023, the US government spent 101 % of the tax revenue on four items. Social Security, Medicare, Medicaid, and interest on the debt. The debt is now over $34 trillion and going up every year.

And for a number of years, we were historically low interest rates, which meant the interest on the debt was lower. Well, as the debt continues to increase and interest rates go higher, we’re gonna have to pay more interest on the debt, okay? But think about that, 101%. So we spent all the tax revenue money and more on those four items. And Michelle, the number of other agencies that needed to be funded, defense, know, welfare.

All those other agencies had to get funded by borrowing or printing money. Okay. And as that continues to happen, there’s only one thing that we can do and that is going to be raise taxes. Four ways to deal with this deficit, right? I can cut spending. Do we think Congress is going to cut spending? Probably not, right? We can borrow it, but our credit rating just got downgraded. We probably can’t borrow in the future. We can print the money.

But there’s serious repercussions of printing the money, which we’ve already experienced, which is inflation, or we can raise taxes. And so a lot of experts are saying tax rates have to go up substantially, and most likely they have to double by 2032. Okay? So if tax rates are doubling, and I happen to have my money in a tax-deferred account, like a 401k IRA 403b 457 plan,

And with those types of plans, I got a tax deduction for putting the money in. It grew tax deferred. But when the money comes out, it has to be treated as ordinary income. Well, if I’m in a much higher tax bracket later, I have tax rate risk. And it’s leading to this confusion. You mentioned this whole thing about certainty, right? If you have a million dollars in your IRA account today, how much money do you really have? You haven’t paid taxes on the money.

You’re not to pay taxes, but who gets to decide how much tax you’re going to pay? The government. And they can change it anytime they want in the future. maybe you have a million today and you’re in the 22 % tax bracket. You say, really have $708,000. Well, what if it’s the 44 % tax bracket? You just lost a ton of money because of tax rate risk. Now we all got sold. I’m going to say it’s fully a scam, but we got sold on a

paradigm that said, put your money in tax deferred because two things will be true in retirement. You’re gonna spend less money and you’ll be in a lower tax bracket. Okay? If those things were true, then the best place to invest your money would have been tax deferred. But if it’s not true, if I’m gonna spend the same amount of money or more, I don’t know about you, but I don’t plan on taking a lifestyle when I retire.

But if I’m gonna spend the same amount of money or more and taxes are gonna be significantly higher, then tax deferred is a ticking tax time bomb and it creates a lot of uncertainty in your life. And so one of the things that you can do is start saying, wait a minute, can I now contribute to things to be tax free? And can I convert what’s already in tax deferred to tax free? And the good news is there’s a one word that everybody needs to take away from this around ⁓ tax rate risk and that word is

Roth. Because with a Roth IRA or a Roth ⁓ 401k, you’re contributing money after tax, it grows tax to bird. And when you take it out, it’s tax free. Okay, so this is really, really critical. And so what what can you do? I can ask at work, am I allowed to contribute to a Roth ⁓ 401k? Most plans allow you to contribute to Roth.

Michelle (12:08)

Nice.

Jeff (12:20)

Now that’s gonna be a tax impact today because you’re gonna pay your taxes today on the contribution. But doesn’t it make sense to pay taxes today on the seed of your investment, a smaller amount, at a known and lower tax rate, rather than waiting until later to pay taxes on the harvest of your investment, a larger amount of money, and an unknown but most likely higher tax rate?

Michelle (12:46)

It makes total sense to do it that way. One of the things I hear in what you’re speaking, saying, is you have to make that plan, but you have to revisit that plan because the world around us is ⁓ changing all the time and we have to kind of don’t, it’s not stuck forever the way that it is. You have to keep revisiting, I think. Is that right?

Jeff (13:11)

No, absolutely. And we talk about retirement planning as being a ⁓ trip, an airline flight from New York to Los Angeles. And most people don’t realize that for a good part of that trip, that plane is off target. But because they come back on target very quickly and do it very often, you end up in Los Angeles. If you’re off by one degree, you end up in Mexico City.

And I’m not saying Mexico City is a bad place to end up. It’s not where you want it to end up, which was Los Angeles, right? And so basically you have to have that annual review to make adjustments so that you end up in Los Angeles because things do change.

Michelle (13:52)

OK, retirement counselors or planners or advisors ⁓ are not the only part of our retirement. Is that right, Judy? We have to only worry about money when we get. Hope for ourselves.

Judy (14:02)

That is correct.

⁓ There

is hope. And I think for many people, we’ve never considered what our personal values are, like ever, right? We just kind of went into school and went out and got jobs and then we, you know, went along. You’re on automatic. And, you know, one of the things I

Michelle (14:23)

You’re on automatic.

Judy (14:28)

I like to say, and Jeff even talked about it a little bit, we need to understand what our personal values are because that is going to drive our decisions. It’s going to drive our decisions about our relationships, our health, but even our money because there are so many people we would see come into our practice and say, you know, I’m totally against this and that and whatever. And then you look at their investments and they’re invested in companies that do all the things they’re against. Well,

That’s in direct opposition. You’re not going to make money or keep money with that. So I think understanding what your values are is going to be uber important when you get into retirement and you have to start making some choices that are going to take you into the rest of your life.

Michelle (15:12)

not only about your money, but what are you going to do next? We’re not living longer. ⁓ So you’re not going to have six months to live. Once you have that retirement party, you have 30 years to live and what are you going to do with that time? you know, that’s kind of retirement. You can even keep working. A lot of people keep working.

Judy (15:33)

You know, it’s a different, it’s not your grandparents, it’s not your parents retirement anymore. You know, we’re living longer and we’re healthier and we’re more active. I personally don’t want to stop working, but it really bothers me when people say, you know, you’re not going to need that, that money. Let me tell you the reality. You move into retirement, you’re in your go-go years. We call it the go-go years. You’re spending a lot more money because you finally have the time now to do the things you never were able to do when you were younger and in your career working 16 hour days.

Then you get into the slow go years, which you’re still doing things, but maybe not as many. Then you get into the no go years and people think, well, you’re not going to spend any money in the no go years. No, you are. But now you’re going to spend it on health care and long no care and, you know, assisted living and things like that. So you are always going to need more money than what you had in your working years. And then you have things like inflation and world events that change the complexion of

of the financial markets.

Michelle (16:34)

You

have to you have to navigate that plane. You’re talking about Jeff not only for with the money, but you have to keep navigating your life and reassessing who you are and what you want to be doing and how you want to be expressing yourself. You know, a lot of people will volunteer or they’ll go traveling or they’ll start a new business that’s completely not in the fields in which they’re working currently. So all things are on the table and.

⁓ Somehow it seems like what the two of you are saying is that you want to not only balance the budget, but you want to balance ⁓ your life. that what we’re aiming for?

Judy (17:10)

So

Mindset is the driver. We can help you with money, but if your mindset isn’t congruent with the plan, it’s not going to work.

Michelle (17:21)

In your, in your book, ⁓ becoming retired ish, you talk about beliefs. Can you, so what we’re talking about here, I think is kind of giving up the olds and bringing in the new. Can you say something about letting go of old beliefs and, ⁓ re-ins, re-crafting? Absolutely. I have to be consistent with where you want to end up, right? Jeff in Los Angeles and not in Mexico city.

Judy (17:41)

always.

I mean, I think a lot of people, you know, they have a belief system that they developed as a child, you know, with their familiar, ⁓ you know, ⁓ units, their families, and then they go to college and then those beliefs get compounded. And then they never really question them afterwards. And then what happens is, you know, they start to…things in their life start to not work, and then they don’t know why. It’s because…

they’re kind of at an impasse with their belief systems. I’ll give you an example. I talk about it in the book, Aunt Lucy. I went to one of my best friend’s Christmas Eve dinners, it’s an Italian dinner with all kinds of delicious food and crumbly breads and things like that. So at the end of the night, I was helping clean up and I took the tablecloth and I was gonna roll it up and shake it outside to set all the crumbs on it. And Aunt Lucy comes running after me and says,

Don’t do that, dear, don’t do that. You’ll have bad luck if you shake a table cloth at night. So I stopped, I never heard that before and I thought, okay, whatever. Well, fast forward 40 years later, I am coming home from Costco. I pull into the garage, I’m bringing all this stuff in and I notice in the laundry room, I have tracked some leaves in from outside on my rug.

Michelle (18:50)

That’s a new one.

Judy (19:12)

I roll the rug up to go shake it outside. Now it’s dark. I stopped in my tracks.

Michelle (19:17)

no, Aunt Lucy!

Judy (19:19)

Lucy and it came to my mind. Now here was the interesting thing. I never met Lucy before that dinner. I never thought about her after that dinner. And I never thought about the crummy tablecloth. But here I am 40 years later, that belief was planted in me. And I actually not only continued to believe that, but I extended it to be leaves on a rug. And so it was like an aha moment for me. I said,

You know, if you have a belief system that you heard one time and it made you make a different choice 40 years later, what happens when you have belief systems that don’t serve you, that you hear over and over and over from your people you love and you see every day? It seems daunting to think that you can change that belief system, but you can as soon as you observe it.

Michelle (20:10)

do you change that? Um, you believe I, you know, when you’re in your truck, when you were saying this about Aunt Lucy, I was thinking about my father. He always kept cash on hand in the house. To this day I have, I have a little, um, travel bag and I keep cash in it and I call it my funny money. And it’s just, uh, something I inherited from habit.

But that belief like you may have beliefs about money that don’t serve you anymore. Like you were saying, Jeff, with women, I don’t I can’t ⁓ I don’t I don’t know how to handle money. I’m not educated about money. Let somebody else do it or we hear that lot. So how do you change those beliefs?

Judy (20:55)

The first step is just observation. mean, when you start to feel uncomfortable about any decision, not just about money, but any decision, you need to take a step back and say, what, where am I feeling this first fall? Is it here or is it here?

Michelle (21:10)

This is another trust your gut moment.

Judy (21:12)

Right. And this is truth. This is ego. So I always say, take a step back, look at what it is that’s causing you, you know, the, I don’t know what you want to call it, angst, and then observe it and say, is this serving me or not serving me? You know, your father’s paradigm, that didn’t hurt you. That actually is probably a good thing.

Michelle (21:35)

Yeah, there’s some beliefs we should keep and some we should let go. you know what? The two of you are making the the two of you are making the point to keep reexamining. Navigate life, keep reexamining your money, keep reexamining your beliefs, keep keep awake.

Judy (21:44)

Examining a UFO

Right. And what’s good for one person’s belief system is good for them and other persons that might not be the case. So you can’t even go by what’s working for somebody else. It has to be coming from you.

Michelle (22:05)

Well, you heard it here. Get your financial house in order. this day and age, it’s all coping with the changes in retirement for our generation. So we all have to be sure not to put our heads in the sand and learn what we can to make wise choices, not only financially, but in all aspects of our lives. So we don’t worry.

Jeff (22:05)

Let me build a-

Michelle (22:31)

more and sleep less as we age, but instead enjoy life to the fullest. So get out there and ⁓ come alive. I want to thank you both for being here. We’re with Jeff and Judy Snyder from Home Stretch Financial. They can be reached at www.homestretchfinancial.com. It doesn’t get easier than that. So you have a great day.

and get out there and make a plan. Well, that’s all we have time for today. So let’s wrap things up with a request that you go to our website, www.decluttering55plus.com and click on the Let’s Connect button. Share your thoughts, insights and tell us the lessons you’ve learned. If you’re facing challenges or celebrating triumphs on your decluttering journey, we wanna hear from you.

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Wishing you a clutter free day.