Ever wonder what other people talk about with their financial advisors? Well, we're going to discuss that this week here on the podcast, from a new survey of nearly 400 experienced advisors and what they see in their offices, and we're going to share that with Tony and see how that relates to and what he thinks about it, compared to his practice.
Important Links: Website: http://www.yourplanningpros.com
Call: 84...
Ever wonder what other people talk about with their financial advisors? Well, we're going to discuss that this week here on the podcast, from a new survey of nearly 400 experienced advisors and what they see in their offices, and we're going to share that with Tony and see how that relates to and what he thinks about it, compared to his practice.
Important Links: Website: http://www.yourplanningpros.com
Call: 844-707-7381
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Transcript:
Speaker 1:
Ever wonder what other people talk about with their financial advisors? Well, we're going to discuss that this week here on the podcast, from a new survey of nearly 400 experienced advisors and what they see in their offices, and we're going to share that with Tony and see how that relates to and what he thinks about it, compared to his practice. Let's get into it here on Plan With The Tax Man. Hey, everybody, welcome into the podcast. Thanks for hanging out with Tony Mauro and myself, as we talk investing, finance, and retirement, and we're going to break down this new survey. Well, it's not new. It actually came out December of '24, Tony, but we're going to run through this from Financial Advisor Magazine. So they did this interesting survey, so I'm going to get your thoughts on this, and we'll break down some data and see what you think. How you doing, bud?
Tony Mauro:
I've been doing good.
Speaker 1:
Yeah?
Tony Mauro:
Spring is here
Speaker 1:
Yeah, baby,
Tony Mauro:
As we're recording this, it's staying light a little longer. It's kind of nice.
Speaker 1:
Yeah. I know, right? So, everybody's just constantly with the time change thing, "Keep it. Don't keep it. Keep it. Don't keep it." All I know is seven o'clock, it's still light outside, and I'm happy.
Tony Mauro:
That's right. I like it. Yeah.
Speaker 1:
And you and I were just chatting at the time we're taping this podcast. In my neck of the woods, it is quite warm today, so I am totally digging it, so hope everybody has a good day and a good week. And don't forget to subscribe to us on whatever podcasting app you like using, by the way. Apple or Spotify or whatever, you can just simply type in Plan With the Tax Man in the app, or of course you can find the information at yourplanningpros.com. All right, Tony. Are you familiar with Financial Advisor Magazine?
Tony Mauro:
I read it regularly, so yeah, I'm familiar.
Speaker 1:
Okay. Well, they've got this new survey in there, like I was saying earlier in the tease there. 400 experienced advisors revealed biggest concerns, challenges, things of that nature from their clients, and everybody had an average of 20 plus years in business, so these are folks that have been around for a little while, so they've seen some ups and downs, so I'm going to give you some data here. Let's just talk through it a little bit. So seeking out a financial professional. Advisors in the survey said about 52% of their clients are looking for financial advice when it comes to retirement strategies. The other 34%, I know that's not totally 100, but 34% said they were just looking for someone to build wealth with. So, does those numbers strike you as interesting at all?
Tony Mauro:
For us, I'd say our numbers are a little more skewed towards most of our clients are coming to us for retirement planning. Whether they're in the accumulation stage, that would be the accumulation stage, but I mean, the distribution stage, obviously, they're already there, but most of our clients, I mean, 34% sounds high for just-
Speaker 1:
For just for wealth, yeah.
Tony Mauro:
... Building wealth. We're just asking them, "Well, okay. If you want to build wealth, and the next question is for what?" Then, of course they always say retirement, so maybe I'm just beating that a little wrong.
Speaker 1:
Right, right. Well, now, to be fair, this is a wide range of ages, so it's not just retirees only that answered these questions, so it could be some younger folks too, right? So, that would make sense if you're in your thirties or forties, and you're just looking for wealth building, but I think if you find yourself in a position where, even if you're in your forties or even in your early fifties, if you're not starting to feel the need to discuss other things than just the wealth building, are you maybe working with the right person, right?
Tony Mauro:
That's correct, because as you get, especially in the forties and, of course, in the fifties, there's other questions about the end game, which is retirement, but there's many, many other things that we tend to ask them and they started thinking about some of these stuff, anything from taking social security, to healthcare costs, to long-term care costs, where they want to be and how do they feel about it? There is ways to protect yourself and do things, and then as long as we give them that information and we feel like we help them understand for some of these upcoming big decisions they've got to make.
Speaker 1:
Yeah, like RMDs, right? I mean, they'll be coming down the pike. What are you going to do with them? What does it do to your taxable situation? All those little things that we talk about often here on the program, so interesting that, again, 52%, about half the people surveyed, were looking for someone with help for retirement planning, which is good. I think maybe those numbers should be a little bit higher, but again, depends on the age of the person answering. Now, we often hear about people are woefully under-prepared for their future life, their elderly selves, but in the survey, over half of the advisors said the average client they see has around $760,000 saved for retirement, so three quarters of a million bucks, that's not chump change, so that's kind of encouraging to hear that there's over half the people that come in to see financial pros like yourself, Tony, are in pretty good shape.
Tony Mauro:
Yeah, they are. I mean, for us, I would say our assets average is probably around that, but I would say it's a little bit skewed on the top end, because some of our clients end up having a lot more than that. Normally though, if you take the bulk of our clients, have assets well below that. Mostly what we're seeing, again, we're here in Iowa, but anywhere from $100,000 to $400,000, $500,000 is what they have saved at the time we end up talking about it, but we are generating a lot of interest from young people that really don't have much, and they're just starting out in that wealth building stage, and we don't turn them away. We don't have minimums that we require for assets. We just try to set the expectations of, your planning is going to be a little different than somebody that might come, that has more, one, because of the complexity, and two, because of just that you don't need that much hands-on advice.
Speaker 1:
And every demographic. I mean, there's different cities, different demographics, but I think just in general it's good to see that on average, again, people are a little bit better, in pretty good shape, and I think that's what winds up happening often, Tony, when people do come in to see financial pros like yourself, most of them come in, going, "I don't know if I have enough," or "I don't know if I can retire." Then, when the numbers are ran, more times than not, and I talk to advisors all across the country, hundreds of them, and they all say the same thing. More times than not, people are in better shape than they realize.
Tony Mauro:
I think so. Depending on their situation, we find that too, when we start running the numbers is, depending on what your goals are, as long as they're not outlandish-
Speaker 1:
Right, right.
Tony Mauro:
... You're better off than you think, especially when you put the numbers to it and explain it to them, because generally, nobody does. If they want to do more, then that's when the planning comes in.
Speaker 1:
And a lot of people, I do think they feel like, "Well, I got to get to the million." We've talked about that millions of times, as it is, but depending on what your situation is, as a couple, maybe somebody's got a pension, maybe you've got a good numbers in social security, maybe a million doesn't need to happen. Maybe $700,000 does get it done or $500,000 or whatever, but on average, I think it's still pretty good encouraging to see that people's asset totals are a little bit better than I would've thought, so that's nice to see. Top concerns, check this out. Surveyed advisors say their top concern, no surprise here, Tony, 38% outliving their assets. That's always the top dog, right?
Tony Mauro:
For us, yeah. Well, actually, for us, it's the second one here, the reliable income streams.
Speaker 1:
Oh, really?
Tony Mauro:
Yeah. Just for us. Then, it's outliving the assets, but those two are the top two by far.
Speaker 1:
Well, it was 38% for outliving their assets. 31%, right? So, pretty close for the reliable income streams. I mean, they kind of go hand in hand, right?
Tony Mauro:
They do, because whether you're young or in your forties or fifties, that's the most important thing, because it's the end game of, do you want to spend every cent of your retirement income? And if so, that's a crapshoot a little bit because, depending on what you do, you could outlive them, and then you could end up with not a whole lot, but most of our retirees want to make sure that their assets, they've worked so hard to accumulate, that they can get a reasonable income stream from them, and then it goes hand in hand with so they don't outlive their assets, because they want to live off the income mostly.
Speaker 1:
Well, think about, we were just talking about the number, the pot of money, the $760,000 or the million or whatever you put your number at, and the big bucket pot is not as important as the income streams, right?
Tony Mauro:
That's correct.
Speaker 1:
So again, $500,000 might get it done if the income streams are there that you need, so if you're both got a pension, maybe both got good social security or something like that, then you probably don't need as much, again, back to that point.
Tony Mauro:
Back to that point of it all working it together, which comes back to the financial plan and knowing what those numbers are. My wife just got her, here in Iowa they have IPERS, so guess it's the government funded pension, which she's been in for a long time. I went and ran my own numbers again the other day, just about, here's the number that she's going to have that's going to come in when she's X age, and then what I wanted to know was, "Well, I want the number that we both can't outlive," and then I factored that in with social security and what else we have and say, "Okay." I mean, it was just a quick math, because I do it all the time. We're still in good shape.
Speaker 1:
Nice, nice.
Tony Mauro:
We're going to hit our goals.
Speaker 1:
Nice.
Tony Mauro:
So, that's what the planning is all about, but most people don't have even that starting point, because they've never taken the time to figure it out, and I think that's where the planner can help out a lot.
Speaker 1:
Yeah, I would agree. Yeah, definitely. Now, the next one on here, Tony, pretty interesting. Again, keep in mind this survey was done December of '24, but future stock market downturns was only 12.5% as a concern. Now, today, if that was done this week, that we're taping this podcast, it might be a little different; however, I do want to bring up at the time we're talking right this second, Tony, the market's been about down about 10%. You and I were just chatting about that at the time we're taping this podcast, but at the time, I just pulled it up while we're chatting, it's up right now 1% today on the news that the inflation numbers were a little bit better than expected.
They came in a little bit better, and it's funny because I was looking at the news articles. Just type in S&P 500, and you get the immediate news responses, right? And this morning it was all the sky is falling doom and gloom. Here, this afternoon, and this is just after one o'clock. We're taping this eastern time, and the inflation numbers came out, and now all the news stories are, "Outlook, much better. Market wraps. Three things that could spark a quick recovery." All the news is positive, so you got to be really careful with that stuff, right? Because they're just in it to kind of capitalize on whatever the thing at that moment happens to be.
Tony Mauro:
It is. With the news, as fast as it comes out, that's exactly what it is. Really, a lot of this, of course, we try to explain to our clients, take the long-term view. This is very short-term.
Speaker 1:
Yeah. 10% is a normal correction. If that's all it winds up being, right? That's not a big deal in the grand scheme, right?
Tony Mauro:
It is, and I just sent out, basically, a chart that I just got out of one of the research magazines, and you've probably seen them before, but I just sent it out to all of our clients, just the old cost of timing the market, and they have a chart, January of 3 to now, "You just invested $10,000 and just left it in a S&P 500 ETF. You would have $64,000, and now if you missed the 60 best days in all those 10 years, you would actually have lost money and only have $4,205," so-
Speaker 1:
It is a long-term proposition, right?
Tony Mauro:
It's a long-term proposition. You miss the 10 best days, and you only have $29,000, so you can't afford to try to say, "The market's coming to an end. Let's get out. Let's go all to cash." In my opinion. We tend to try to keep clients focused on that long-term goal, because short-term Fluctuations are just part of it.
Speaker 1:
Yeah. Not to get too political or get off on a tazza, but I feel like sometimes we kind of give people a little bit of both sides of the coin. I was just watching somebody talking, who typically they're slant when they're interviewing or they're asking questions is typically right leaning, but they decided to kind of jump on the market downturn and said, "Hey, listen. With a lot of the layoffs that are happening in the government, people are obviously concerned about retirement, and now the market's been falling. It's kind of hard to factor in, kind of feel confident that you could even retire."
They took it from that angle for people being laid off, and it just occurred to me, through all the years of talking with you, and it's like if people being laid off today are worried about the stock market, like this week, they probably didn't have a good strategy in place, because typically your market monies are your later monies, right? So, if you're thinking about early retirement, and this was the conversation piece, was the early retirement buyout, should that be a factor, Tony? Should the market monies be a factor if you're thinking about an early retirement buyout? Because it's still going to be later money. God willing, you're going to be retired for 20 or 30 years, right?
Tony Mauro:
It is, and I think you have to keep that retirement type money in that mindset. There's a lot of people. Obviously, it's getting a lot of news in the federal government.
Speaker 1:
Sure, and nobody likes it when it goes down. I get it. Right.
Tony Mauro:
And nobody likes to see people in masse losing their jobs, let alone in the private sector, but the bad part is it's part of life, and we have to kind of wait and see how all this is going to shake out. It's kind of only been going on for, what? 2, 3 months here?
Speaker 1:
30, 40 days. Yeah.
Tony Mauro:
Yeah, and so we just have to kind of wait and see, and hopefully, at the government level, if things get to a point, they've got the mechanisms in place to help turn it around. That's what they're all they're, supposed to be doing.
Speaker 1:
Right, and I guess my stance on that was, really my question more was I think people, sometimes it's when we have downturns, we immediately focus on the negative.
Tony Mauro:
Oh, yeah.
Speaker 1:
And again, it's a human reaction, because nobody likes to see it go down, but if you have a plan and a strategy in place, you do realize that these are your later monies. It's a little easier not to completely freak out, right? At least hopefully, and again, 10% is a normal correction. Now, we don't know if this is the end. We don't know if it'll continue to drop or not at the time we're taping this, but it's just simply pump the brakes a little bit and realize that we were super over-weighted anyway, so some kind of correction was due anyhow.
Tony Mauro:
It was, and you look at most individual company stocks, valuations were really high.
Speaker 1:
They're all high, all the PEIs are high.
Tony Mauro:
Oh, boy.
Speaker 1:
And tech, really. Tech was really bad.
Tony Mauro:
Really bad, and if you're in mutual funds, and that's their objective to go buy those, they're buying these at high valuations, and all this stuff kind of comes into play. But I agree with you. I think that this is all the more reason to have a plan, number one, and keep an eye on it, mark, watch it, and work with your advisor.
Speaker 1:
Sure. Yeah. If you need to de-risk a little bit, hey, nothing wrong with that, right?
Tony Mauro:
Yeah, no.
Speaker 1:
But we've also been saying that for a while now. I mean, you're talking about the S&P. That's usually the average. That's the index that people cut and your industry use. The all time, 52-week high was at 6,100, and it's at 56 and some change right now. So, again, it's only about 500 points off of that. So again, not a massive downturn, but it's all about perspective and maybe peeling some risk off, which again, a lot of advisors have been saying for a while now, "Hey, the market's been up 22 plus percent the last number of years. Maybe it's time to take a little bit off the top there, just to kind of think about that."
Tony Mauro:
Right.
Speaker 1:
So, anyway, I won't beat that horse any longer. We'll move on. Healthcare costs was only an 8.5% as a top client concern, Tony. 8.5% on a healthcare cost; however, the advisors, themselves, feel like it should be more like 50% of their perspective client base should be thinking about healthcare costs. What do you think about that?
Tony Mauro:
I think, for me, most of our clients that we work with are really concerned about healthcare costs and what it's going to be when they retire, and I think many clients, my older clients are starting and they think about it in their fifties, but I think even the young, which are not thinking about it, and they're still in the accumulation stage, should at least make that part of their plan as that boogie man, so to speak, is out there, from what we know today and make sure that you're factoring that in. But yeah, some of these costs are, as we always say, nothing goes down, but it seems like healthcare costs, and of course cost of education seem to go up way more.
Speaker 1:
They always stay up. Yeah.
Tony Mauro:
And so, I think it's a big concern, because you got to factor that in when you get off your company's healthcare plan or whatever you've got, and you've got to make it work. It seems like most of these people, like my dad included, who's now 83, boy, he uses the healthcare system a lot, because he's constantly at the doctor.
Speaker 1:
For sure, and if you're not having the conversation, only eight and a half percent find it to be a top concern, then you could be setting yourself up for some heartache a little later on when an incident does happen, or if not to you, to your spouse, right? Because that's oftentimes what happens when we talk with advisors, is they don't get a plan together, especially for long-term care. One half of the relationship gets nailed with it, and the other half winds up suffering at the end, right? So got to have a strategy. You at least got to be talking about it. I know it's no fun.
Tony Mauro:
At least talking. Yeah.
Speaker 1:
Yeah. I know it's no fun, but you at least got to start putting some things together in that grouping. One more thing here, and then we'll wrap it up this week on the podcast for this, Tony, but working in retirement. According to the survey, excuse me, an average of 63% of clients surveyed that are age 55 or older, plan to work beyond age 65. They plan to work into their seventies. Interesting, right? So, 63%, more than half, want to work or are going to work past 70.
Now, the reasons are not necessarily because they were panicked about the market, because again, this was done last year, the December of last year, but I think there was two main things that stuck out. They felt like they didn't know if they had enough to totally feel comfortable retiring. 48% of those clients felt that their savings maybe weren't quite enough to live on, and the other 40% said, "Well, they were doing it for the health insurance," to our point a second ago. So this is where, again, a plan and the strategy's got to come into play, get the numbers ran, so you can even find out where you stand.
Tony Mauro:
Yeah, because if you don't, then you are really just grasping at straws there, and you're just hoping that it works out.
Speaker 1:
And you want to keep working, but what if your body goes new?
Tony Mauro:
Yeah, your body goes new. And then, I would say, for us, probably on average, our percentage of clients, 55 to 65 that say they want to work for us, I would say it's probably around 35, 40%, but our clients that are 65 and older, our average is well above this 30% that are actually still working. Ours is probably closer to about 45%, but it's because they want to. They have a plan.
Speaker 1:
Which is totally great, yeah.
Tony Mauro:
And they just want to get out of the house.
Speaker 1:
Sure.
Tony Mauro:
So, they actually love it. They don't have to work for the money. They just want to do something and just stay involved in the world a little bit.
Speaker 1:
Right, and I think that's where we want to be, right? That's where we'd like to be, having that work optional decision, but I think finding out that a lot of people are doing it for the health insurance coverage, certainly a little daunting there to think about, or they just don't know that their numbers are good enough to retire, like we started out with.
Tony Mauro:
Yeah. I always wonder, when I see an older retiree working somewhere, if they're there because they want to or they have to, especially if they're at somewhere where you'd see, I don't know, maybe an extreme example in maybe the fast food industry.
Speaker 1:
More physically demanding job? Yeah.
Tony Mauro:
Yeah, yeah. More physically demanding. It's like maybe you just always wanted to do this, and just have no stress and just wanted to get out of the house, or are you really working because you have to?
Speaker 1:
Now, that's an interesting point. Now, I've got a friend of mine who retired from a very stressful, big corporate position, managing a lot of people, so on and so forth, and he took a job at a supermarket, stocking the shelves, right? Literally, goes in, six o'clock in the morning, something like that. Works for four hours a day. They grab the baskets of stuff he needs to refill, and he goes out and stocks the shelves, and he said, "Dude, I am so happy. I don't have to manage anyone. No one's reporting to me. I know what I'm supposed to do. They trust me to just grab my stuff and do it."
I said, "But it sounds like such a," sometimes we have this stigma. It's like, "Oh. He must be working stocking shelves because he has to, because he's in his late sixties."
Tony Mauro:
Right, right.
Speaker 1:
And it's like, no, he's doing it because it gets him out of the house. He's like, "For me, the menial tasks helps me free my mind up," because he didn't have to think. He just does, so everybody's got their thing, right? It's like, don't judge somebody, just because you see them doing something.
Tony Mauro:
Absolutely not, yeah. That's why I always want to ask them, because I don't want to judge them, but from what I hear from our clients, those types of work, which is most of the clients that I have, that's what they do is that kind of stuff. It is just menial stuff, because the one on one thing is I don't want a lot of pressure, I don't want to have to think.
Speaker 1:
Right.
Tony Mauro:
I just want to get out, do something, feel like I'm contributing, and talk to people.
Speaker 1:
Your body gets to move. He gets to talk to people. Yeah.
Tony Mauro:
And they enjoy it. The same type of retiree, he drives for the shuttle at my car dealer, and he absolutely loves it. He's like 78. He works for about five hours a day. He drives people around and talks to them, and he goes home. He loves it.
Speaker 1:
No stress, no fuss, no muss, right?
Tony Mauro:
Nope, nope.
Speaker 1:
So yeah, so interesting stuff in today's conversation around this survey done from Financial Advisor Magazine. We'll put a link into it in the show descriptions if you'd like to check it out for yourself. That way, you can read the online survey as well, but at the end of the day, Tony, you just got to see what it is that you have and what it is that you need for your situation, because everybody's situation is different. Tony's is different than mine, and mine's different than yours, and so on and so forth, right? So, get yourself onto the calendar folks. Have a conversation with Tony at Yourplanningpros.com. That is Yourplanningpros.com. He's got more than 30 years of experience helping folks. He's a CPA, CFP, and an EA. He's got all the credentials there. So if you've got some questions, reach out to him and get started today. Don't forget to subscribe to us on Plan With the Taxman. I know we went a little long this week. Thank you for your time, folks. We always appreciate it. Tony, my friend, have yourself a great week.
Tony Mauro:
All right. We'll see you next time. Thanks.
Speaker 1:
Yes, sir. We'll see you next time here on the podcast. We'll catch you later here on Plan With the Tax Man with Tony Mauro.
Securities offered through Avantax Investment Services SM, member FINRA, SIPC. Investment advisory services offered through Avantax Advisory Services. Insurance services offered through an Avantax affiliated insurance agency. Investment strategies discussed in this episode may not be suitable for all investors. Please consult with a financial professional.
