Why Values Based Planning Is Essential

Putting together a solid retirement plan isn’t just about dollars and cents. We need to determine what really matters to you.

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Transcript Of Today's Show:

Speaker 1: Hey, everybody. Welcome into another edition of Plan with the Tax Man with Tony Mauro and myself, talking, investing, finance, retirement, and why values-based planning is essential. We often talk about the Xs and Os, Tony, but it doesn't always have to be just about the dollars and the cents, sometimes it's other things that really matter to you in retirement. That's going to be the topic today. How are you doing, my friend?

 

Tony Mauro: I'm doing well. Looking forward to the spring here, coming up. It's going to be right around the corner.

 

Speaker 1: Hopefully. Right? Yeah.

 

Tony Mauro: Hopefully.

 

Speaker 1: Yeah. And now, at the time we're dropping this, this will be shortly after Valentine's Day. We are taping this before Valentine's Day, so Tony, you've got plenty of time to get something put into place there for yourself.

 

Tony Mauro: Yes, I do.

 

Speaker 1: Are you working on something good for Valentine's Day this year?

 

Tony Mauro: I am. I've got a couple of things. I can't say, just in case my wife is listening.

 

Speaker 1: Sure. Right. Yeah.

 

Tony Mauro: But yes, I do have a couple of things.

 

Speaker 1: Got some stuff up your sleeve. All right. Well-

 

Tony Mauro: [crosstalk 00:00:53].

 

Speaker 1: ... hopefully, folks, when you listen to this, hopefully, you had a lovely Valentine's Day, if you go in for that sort of thing. So, thanks for hanging out with us. Let's talk about some values-based planning. What is that?

 

Speaker 1: Well, what's important to you, right? Not just the dollars, not the normal, "Well, I want to make sure my money lasts as long as I do" kind of thing. But some of the other aspects. Maybe it's family. That's typically number one. That's a kind of an easy, low-hanging fruit for us, Tony, to talk about. Everybody is probably going to say what's important to them is their family.

 

Tony Mauro: That's right, and for most, that comes up number one. And I think even, well, for myself, is you want to take care of your family. You want to make sure that your heirs ... I think, as most humans, you want them to have it better than you had it-

 

Speaker 1: Sure. Right.

 

Tony Mauro: ... without spoiling them. That's always number one, I don't think we give it enough thought on the family, because I think to plan properly, there needs to be some discussions with your advisor on that, not just say, "Well, I'd like to just take care of my family."

 

Speaker 1: Yeah. Right.

 

Tony Mauro: Well, what does that really mean to you?

 

Speaker 1: Yeah, because then I think that also brings into the mortality questions, right, and the mortality conversations.

 

Tony Mauro: Yeah.

 

Speaker 1: And you're like, "Well ..." We talked about it on the last podcast. We are typically reactionary versus proactive, so whatever happens, happens, and whatever's left is left kind of thing. Versus, "Let's do a little planning," or "Hey, whatever's left, we're going to leave to the kids. That's great, but they can deal with the taxes," where a little bit of planning on your end early on, it may not even cost you anything, could save them a ton of taxes down the way. Right? Again, what's your values when it comes to your retirement planning conversation? If it's family first, then how can we be as efficient with our money with that as possible? Correct?

 

Tony Mauro: Yeah, that's exactly it.

 

Speaker 1: Okay. Maybe it's faith. Right? I'm going to link two together. I'm going to move them around a little bit, Tony. Maybe it's faith or charitable giving.

 

Tony Mauro: Mm-hmm (affirmative).

 

Speaker 1: There's some people out there, and I know I've talked with advisors, and I don't know if you have a story or anything to share or something along those lines, but people will say, "Hey, I'd like to make sure my portfolio is investing in companies or doing things that align with my morals." Right?

 

Tony Mauro: Yeah.

 

Speaker 1: Maybe I don't want to have different kinds of companies, because I don't like what they stand for, or something like that. Do you come across that, where their values in life also affect how they want to talk about their financials?

 

Tony Mauro: I do. I get it a little more in the clients that are ... And I don't have as many, this is as high on the list as some of the others [crosstalk 00:03:34].

 

Speaker 1: Sure. Of course.

 

Tony Mauro: It probably should be, but everybody's got their own goals. But most of mine come, and they'll say ... And you could tell because they're extremely passionate about it, is ... "They don't come to me about investing in certain companies.

 

Speaker 1: Okay.

 

Tony Mauro: It's more of, "I want to make sure this bunch of my estate goes to this particular charity-"

 

Speaker 1: Gotcha.

 

Tony Mauro: " ... because I'm so passionate about it that I want to make sure that that happens. And how do we make that happen?" They're very into that. I have a client who's extremely into feeding the hungry here in this city.

 

Speaker 1: Okay.

 

Tony Mauro: And he is just-

 

Speaker 1: That's great.

 

Tony Mauro: ... really wrapped up in that. It gives him a lot of purpose, a lot of cause, and he does devote a lot of his retirement to that, but he's planned it so well that he's got plenty of money for him to live.

 

Speaker 1: Right.

 

Tony Mauro: And this is what he likes to do, and he can depart knowing that the rest of his money is going to go there.

 

Speaker 1: That's [inaudible 00:04:36].

 

Tony Mauro: He has no heirs.

 

Speaker 1: Yeah.

 

Tony Mauro: [crosstalk 00:04:37]-

 

Speaker 1: Okay. Yeah. Yeah.

 

Tony Mauro: ... so that's a little different.

 

Speaker 1: And we see that often. Right? A lot of the times we will see that with folks who maybe don't have any heirs, they want to leave a chunk, or even if they do have heirs, they want to leave a chunk of their nest egg after they're gone to their church, or a favorite animal group, or maybe they were affected by some sort of an illness. They want to leave it to The Heart Association-

 

Tony Mauro: Yes.

 

Speaker 1: ... or cancer research, or something along those lines. Again, where does that fall on your values based planning system? Or does it? Right?

 

Tony Mauro: Yeah.

 

Speaker 1: It doesn't mean it's wrong if it doesn't, it just means that there's some other things that are more important to you.

 

Tony Mauro: Yeah.

 

Speaker 1: Everybody's a little different. Maybe it's career, Tony, that seems a little different now in light of the pandemic. I think maybe-

 

Tony Mauro: Yes.

 

Speaker 1: ... from 19 and on earlier, I should say sometime before the pandemic happened, maybe it was a love of career that was a bit more dominant. Right now. I think because of the world changing so much, we're kind of like, "Hey, this is what really matters more to me," but maybe it was career. Maybe it still is. Right? They don't see themselves ever retiring. I mean, I guess, small business owners ... Tony, like yourself, would probably fit into this category pretty good, because the big business is like another child.

 

Tony Mauro: It really is. And for most of us, it's all we do. And you're just so passionate about it that you can't turn it off.

 

Speaker 1: Right. Yeah.

 

Tony Mauro: Yeah. A lot of us business owners, or my clients, especially, and I talk to them about it, about what's the end game for you? I mean, and a lot of them say, "Well, I'm just going to keep working, because I really don't have anything else that I like to do." And I try to at least introduce them to something just like we talked about in the last podcast, is there are some other things maybe you want to do in your life as you get older, but at least maybe organize things in the systems in the business to make it as sellable as possible. So, if you ever want to call it quits, you can. I know for myself, I mean, assuming people still want to deal with you, and you have a viable business-

 

Speaker 1: Right.

 

Tony Mauro: ... maybe it's something you just work part-time, which I could seem myself doing is [crosstalk 00:06:39].

 

Speaker 1: You're the senior consultant at that point. Right?

 

Tony Mauro: Yeah. And the staff deals with as much as they want, maybe they're even buying you out, but you're working maybe 10, 15, 20 hours a week. I could see that. But people do tend to, especially as business owners, want to just keep working. Of course, we're all complaining right now, and you can pick on the millennials a little bit, but maybe they have it figured out and we don't, as far as, you can't find anybody that wants to work.

 

Speaker 1: No. It's still a problem.

 

Tony Mauro: And I hear it in the restaurant industry. I mean, every client I have is saying the same thing. It's like, "Where'd everybody go?" But I think people are, like you said, they're reevaluating what's important to them since this pandemic. Some of them have been forced to work from home, and figured that they could do that just as well, all kinds of things.

 

Speaker 1: Oh, yeah. We talked about this a few weeks back, but situations like my brother's, for example, who is closer to retirement. Right. He's in his early sixties, and his plan calls for him to make it to full retirement age before he activates social security. Right. So, having a structure in place, he needs to go a couple more years, but he's like, "Hey, the working from home has been amazing in a lot of ways," and of course with inflation. Right? He's saving on taxes because it was like a 40 minute commute, and that's what a lot of people have been seeing, so his thought changed to, "If they force me to go back to the office, I'm probably going to retire early."

 

Tony Mauro: Yeah.

 

Speaker 1: "But if they let me keep working from home, I'll continue to do this until I hit the goal that I have for myself." A lot of people find themselves in that spot.

 

Tony Mauro: They do. My admin office manager, Donna, has been with me ... This will be her ninth year, just turned 65 in October, and even though she has always told me, "Yeah. I'm going to go until seventy." She's kind of starting to say, "Hey, look, maybe two more years or so," and I want to, again, I want to live the last few years of my life with my grandkids."

 

Speaker 1: Right.

 

Tony Mauro: "And just do some other stuff."

 

Speaker 1: Yeah.

 

Tony Mauro: How can you blame her?

 

Speaker 1: You can't. To our point, right, so her values changed. Her value based-

 

Tony Mauro: Yeah.

 

Speaker 1: ... planning for her retirement has started to change a little bit. She's been enjoying the career, still enjoys the career, and probably will for a couple more years sounds like, but family is starting to creep back up in there.

 

Tony Mauro: [crosstalk 00:08:48] creep back in.

 

Speaker 1: Yeah. Everything shifts, maybe it's education, Tony. I know some people, and I'm sure you've come across some of those that education was not something in the family and they've made it their goal and their passion to make sure that every one of their heirs that comes along has money set aside for college. Right? It's been a hot topic, obviously. The last couple years we've gone to the fact that with the price of schools out of control, and maybe it's not for everybody, but there's still those folks who say, "Hey, I don't care. I want to make sure, Tony, when you're helping me with my plan, that my five grandkids all have money for college."

 

Tony Mauro: Yes. And I can relate that to many clients, myself included, who did not have the traditional college experience because my dad didn't save, didn't have the money, and you're working your way through college the hard way. I, from the day my son was born, had been saving for him, and was able to put him all the way through college, and he didn't have to pay for it. And now it's kind of flipped. My dad is now saying, "Hey, I want to put some money aside for the grandkids, so that when I go, they can use it for education, and whatnot"

 

Speaker 1: His values changed as well. Right?

 

Tony Mauro: Yeah. His values have changed. All of a sudden now he wants to do that, and he has that in place. We have that in place. I think, yeah, for many people, and yeah, we could beat up the educational thing for a long time.

 

Speaker 1: Sure. Yeah.

 

Tony Mauro: Is it worth it or not? And I think we have in the past, but nevertheless, it's something, and I think a lot of people do tend to look at it like they want to give something that maybe they didn't or couldn't have.

 

Speaker 1: Right. If it's important to you, and it's on your list, then hey, it's on your list. Right?

 

Tony Mauro: It's on the list.

 

Speaker 1: But just, let's not forget the final one. When you're talking about the values based planning, how you're structuring your retirement, how you're structuring your plan for retirement, where is fun on that list? Right?

 

Tony Mauro: Yeah.

 

Speaker 1: For some people, Tony, all the other stuff is not as high up as fun is, because dang it, they've worked for it. They've worked hard. They've had a long, hard career, or whatever the case is, and now it's our time. Right? That's the kind of the beautiful sentiment sometimes we talk about with retirement, "Hey, it's our time to not have to worry about family anymore, to not have to worry about career anymore, to not have to worry about education. It's our time to boogie." Right?

 

Tony Mauro: That's right. That's right.

 

Speaker 1: Nothing wrong with that.

 

Tony Mauro: There's other wrong with that. And, to me, fun ranks high. I mean, family and these other ones do too. For me, it's I want to have fun before the end. In other words, you were talking about George Carlin-

 

Speaker 1: Yeah.

 

Tony Mauro: ... earlier, that if you could live life in reverse and do all the fun stuff when you're young, when your body could take it, whereas-

 

Speaker 1: Right.

 

Tony Mauro: ... at the end-

 

Speaker 1: Right.

 

Tony Mauro: ... a lot of times our bodies can't really take it, so sometimes we work too long, we wait too long, and then fun isn't quite as fun anymore. I try to encourage clients to start taking and looking at it in their fifties, even though, yes, we're still on plan to retire at X, and do things, but you need to start having some fun now, and into retirement. But it definitely shouldn't be on the back burner, because why are we doing this and putting ourselves through this for 30, 40, 45 years-

 

Speaker 1: Yeah.

 

Tony Mauro: ... if you're not going to have some fun?

 

Speaker 1: Yeah, exactly. I'll share a little bit of this real fast, tony, if you don't mind.

 

Tony Mauro: Yeah.

 

Speaker 1: Since we talked about it on two episodes, in case folks don't want to look it up, I won't go through all of it because it's George Carlin, and he definitely has some not safe for work comments here.

 

Tony Mauro: Yeah.

 

Speaker 1: But he says, "In my next life, I want to live my life backwards. You start out dead, so you get that out of the way right off the bat."

 

Tony Mauro: Right. Right.

 

Speaker 1: "Then you wake up in an old folks' home, and you get to feeling a little bit better every day."

 

Tony Mauro: Yes.

 

Speaker 1: "They eventually kick you out for being too healthy. Then you go and you collect your pension, and you enjoy some things. Then, when you start to work, they give you a gold watch and a party on your very first day."

 

Tony Mauro: Yeah.

 

Speaker 1: Because you're going backwards. Right. So, "Then you work for the next 40 years until you're young enough to enjoy your retirement. You party, you drink alcohol, and you generally act out and act wild, and then well, you're ready for high school, and then you go to-"

 

Tony Mauro: Yeah.

 

Speaker 1: " ... primary school, then you become a kid, and you just play and have no responsibilities until you're a baby, and you go back."

 

Tony Mauro: That's right. I tell my wife, in retirement, I want to be a child again.

 

Speaker 1: Yeah.

 

Tony Mauro: Because they wake up every day, and just say, "What can we do fun today?"

 

Speaker 1: Exactly.

 

Tony Mauro: Again, all these other more important things we just talked about need to be planned for first, but hopefully once that's in place-

 

Speaker 1: Yep.

 

Tony Mauro: ... you are able to do some of that.

 

Speaker 1: Exactly. Well, that's our podcast this week, folks. What is your values, and how do they affect your planning, and why it might be essential? It's not always just the Xs and Os, the dollars and cents. Yes, we want to make sure we can fund our retirement, but we also want to fund it towards the things that mean something to us, family, faith, career, education, charitable giving, fun, whatever that list happens to be and in whatever order.

 

Speaker 1: If you've got questions and you need some help, as always, if you're not working with a financial professional, like Tony, make sure you reach out and have a conversation with him. If you enjoy the podcast, consider subscribing to us on whatever podcasting platform app you might be listening to, Apple, Google, Spotify, iHeart, Stitcher, so on and so forth. You can find it all at Tony's website as well as get a hold of him at yourplanningpros.com. That's yourplanningpros.com, maybe share the podcast with those who might enjoy the show as well and the content as well. So, feel free to consider doing that. And Tony, thanks for hanging out with me, my friend. I hope you wind up having a great Valentine's Day with your lovely Misses.

 

Tony Mauro: All right. You do the same. And we'll talk to you next time.

 

Speaker 1: We'll see you here in March on Plan with the Tax Man with Tony Mauro from Tax Doctor Inc.

 

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