Amy: Tonight we've got the top questions you need to ask your financial advisor and we'll tell you how we would answer them. You're listening to Simply Money presented by Allworth Financial. I'm Amy Wagner along with Steve Hruby. I think we should start the show off by kind of level setting here, Steve, because, you know, I've been, we've both been doing this for a long time. I've had the privilege of speaking in front of a number of groups of people about money and I always ask the same question first, "How many of you grew up in a house where you talked openly about money?" And maybe in a room full of 50 people, there's 1 or 2. And then I'll ask the follow-up question, "How many of you had a class in high school or college dealing with personal finance?" Usually a couple of hands. Yeah. So most people go into, you know, adulthood and dealing with money with very little background and so you don't even necessarily know the questions to be asking the person that you're working alongside with and trusting with your money. And I don't know why that is, but I think so many people are almost like afraid to admit they don't know. So they're also afraid to ask some really good, tough, deep questions when it comes to working with an advisor.

Steve: Yeah, and it's very important to come into these meetings. The first time you're ever meeting with a financial advisor, it might be intimidating. It's crossing a new threshold that you've never been across before. In no particular order, there's a series of questions we want to go through. First one, what is your approach to financial planning? What does that really mean? Understanding what you're getting out of that relationship from 30,000 feet is extremely important because there's different kinds of advisors out there. And we've talked about this a lot over the years. If you go to a brokerage firm, a discount brokerage firm, then you're going to get the products and solutions offered by that firm. If you go to an insurance company, it's, you know, we have a size six, you wear a size eight, we'll make it work. And they'll do it using only insurance solutions. If you go to a registered investment advisory firm, this is where oftentimes you're going to be sitting across the table from a fiduciary financial planner, a credentialed advisor, CFP, CFA, there's a couple of others that you want to look for that actually dive deep into financial planning.

Amy: I love that you started there because I absolutely agree. Most financial advisors using that word or that title don't necessarily mean the same thing. And they can work for very different companies that have very different ways of helping you plan for retirement. And the fiduciary, being the one who puts your best interests ahead of theirs, I think is probably the best fit for most of us long-term. And then when you look at this question of what's your approach to financial planning, you're not asking, how are you going to manage my investments? Because we do have a number of people that come through the door and that's their only focus. What kind of return can you get me? And I don't think that if you are looking for a long-term relationship with a financial advisor, that should be the first question. The first question should be, how do you plan? What does a plan look like? And what does this relationship look like? Yes, the investment part of it is a piece of it, but it's really a small piece compared to everything else.

Steve: Yes. The financial plan is the blueprint to how your money will work for you. Your investments are the building blocks. The more building blocks you have, the more robust your financial plan can be. I'll be the first to admit, it obviously can be a little bit intimidating the first time you sit down and meet with an advisor, especially when you get the follow-up homework. Because when we're partnering, and this is oftentimes kind of an industry standard when we're doing real financial planning, because it doesn't just look at investments. It looks at estate planning. It looks at insurance. It looks at debt management, cash flow, tax strategies. The homework assignment when somebody decides that they want to partner with somebody that does holistic financial planning, is daunting because we need statements for your investments, your savings accounts, thoughts about current and future spending goals, insurance docs, estate planning documents. The more information we have, the better we are equipped to then help provide you with guidance and advice on your investments.

Amy: But when you talk about needing those things, I think it's important to say that we also understand that we are asking you to get naked financially. We're asking you to bare it all. And for some people, that's incredibly uncomfortable, right? There's debt, there's past bad decisions with money, and we're asking you to put it all out on the table. And we understand that that can feel embarrassing. First of all, like your doctor, we have seen it all. We can't really help you until we fully understand your picture, your full financial picture. So that financial plan, and you're talking about the homework, but the first few steps in this process can be a little bit uncomfortable, maybe from your perspective as you come to the table, but it doesn't have to be. If you're truly seeking help, people want to help you, but we have to have that information.

Steve: Yeah, and we use that information to help with the investments. So the next thing you want to do, you want to have an understanding when you're working with a financial advisor what their investment philosophy is because there's obviously a ton of different ways to build a portfolio. Again, from 30,000 feet, strategic asset allocation looks at your long-term financial needs and goals, finds the optimal asset allocation for you based on your risk tolerance, and doesn't typically make a whole lot of shifts. We're not trying to time the market. A lot of advisors believe that the market's already efficient. So using low-cost exchange traded funds, for example, to cast a wide net and maybe some small tactical shifts here and there, as opposed to some people are expecting their advisors to have a crystal ball, pull them out of the market, put them back in the market, pull them out, put them back. That's not typically how it works, but there are those out there that will say they can do it.

Amy: Yeah. Well, and I think if those people are saying they can do it, you probably want to run fast in the other direction. I mean, I've heard from people who've worked with advisors who've said, "They promised me a 12% return every year and no downside." And then they later find out that's actually a Ponzi scheme and that doesn't really exist. Right? So anyone making promises like that, you need to run fast in the other direction. But I'll tell you too, you know, at Allworth, we kind of look at it like we're trying to figure out if we're a good fit for you and also if you're a good fit for us. And if you're someone who's constantly chasing returns and you want to time the market, that's not what we think is the best thing for you. So we probably, it's not going to be a great fit for us because we think that the long-term financial plan makes the most sense.

And for anyone who listens to the show very often, one of the huge benefits that we have is we have, truly, I mean, I really think he's pretty brilliant, Andy Stout, our Chief Investment Officer, who's making these decisions on investments and he's taking in like reams and reams of information every week and, you know, and digesting it and figuring out what the best investment philosophy for our investors are. But, you know, he'll tell you every Monday when he's on the show, regardless of whatever the economic data is coming in that week, we're not making huge changes in anything that we invest in because we don't think that's the answer for the investors that we work with.

Steve: Yeah, that's a good point because pulling in and out of the market, it's not the way to get it done. Nobody has that crystal ball. You know, Andy Stout and the investment committee behind them, they make the hard decisions about the investment strategies. Building the financial plan will tell us how much is at the end of the day, the financial plan, we want to help protect your net worth, grow it and make sure that you can live the lifestyle that you've grown used to, continue to live that lifestyle to and through retirement and make sure that your money lasts longer than you do. Obviously, the investments are part of that, but it's not the only thing to help us achieve that.

Amy: You know, and there's also some groundwork that you can do here before you sit across from someone. And I say the first place you go is brokercheck.org because you can have, you know, someone coming to you saying, "Oh, I work with this advisor, they're great, great returns," blah, blah, blah. And they might actually have some past issues that they've been disciplined for that you have no idea about that, you know, aren't necessarily going to be disclosed to you if you're sitting across from them. So I think that's where you start when you're looking to work with an investment advisor because you would be shocked, I mean, you know, how many people out there in our industry, unfortunately, aren't necessarily always operating on the up and up. So I think that's kind of where you start. And then you can ask some additional questions about their credentials and how they operate and their philosophies.

Steve: Also understanding what the relationship will really look like moving forwards. For example, how often are you meeting? When we're building a holistic financial plan, I'm pretty honest with the folks that I begin relationships with. I say there's six to eight meetings in the first year, two years where we're covering all of your bases, making sure you have that solid financial foundation. From there on out, it's maybe two meetings a year, minimum of one. If you're a really busy person and it's hard to get away from your job because you're still working, sure, we can get away with one meeting a year. But ask how often you're going to meet so that everybody is on the same page.

Amy: I think we're kind of burying the lede here a little bit. And as a journalist, I never liked doing that. But I think one of the most important questions you can actually ask when you're meeting, especially with an advisor for the very first time, is how do you get paid? That has to be one of the biggest questions because you can learn so much from that question. If they're kind of tap dancing around this one and, oh, you know, no, you need to be very direct. How do you get paid? How does the company you work for get paid? If I take these recommendations, right, that you're making to me, you need to know if they're trying to sell you a commission product, you know, or if it's fee-based where, okay, they take a percentage out of what they're managing for you in fees, but hey, you're also a little bit aligned here because when your investments are doing well, they're going to make a little more and when your investments aren't doing as well, they're not going to make as much. So really understanding that question, I think, is a huge one.

Steve: This can be uncomfortable for people to sit down and ask an advisor across the table, "How do you get paid?" But you need to ask that question. Do you get commissions? Do you get bonuses? What do those commissions look like? What drive those commissions? Because with that insight, you're able to uncover the behaviors that you can expect from the advisor that you're working with. When again, and I've worked at these places that, you know, I started my career in a big brokerage firm and you know, they train the heck out of you. I got five securities licenses, became a certified financial planner, but my hands were tied. I wasn't really doing financial planning. It was financial sales and that's frustrating.

Amy: You don't feel like you were really helping people.

Steve: You know, I did help people, but my hands were tied to help in the way that I feel like people deserve, which is with their best interests front and center. And when you're with a bank financial advisor, I've been there too, you're forced to sell the solutions that your own company offers, as opposed to a registered investment advisory firm. You know, Allworth isn't the only one. There's many out there where you're working with credentialed advisors and it's fee-based financial planning and you pay for assets under management. And then they can help you find the best solution that's available out there. Your hands aren't tied. So having that understanding of how people are paid, not shying away from that question, it can give you a lot of information.

Amy: Yeah, if they're not being upfront, right, if you feel like they're not being upfront with you, run fast in the other direction. I've been shocked so many people through the years when I've asked, you know, "Oh, the advisor you worked with before, how were they getting paid?" "I didn't pay them. They liked me." You know what I'm saying? It's like, no, no, no, no. It just wasn't ever clear to you how you were paying. They're never really...

Steve: So commission.

Amy: Exactly. Exactly. Here's the Allworth advice. Once you feel comfortable with the answers to these questions, we would say, okay, then you've found an advisor that you can feel safe working with, then you start building that comprehensive financial plan. Coming up next, the steps to take if your advisor tells you, you finally found a good one and they're retiring, what do you do next? You're listening to Simply Money, presented by Allworth Financial here on 55KRC, The Talk Station.

You're listening to Simply Money presented by Allworth Financial. I'm Amy Wagner along with Steve Hruby. If you can't listen to our show every night, you do not have to miss a thing. We've got a daily podcast for you. Of course it's called Simply Money. Just search Simply Money on the iHeart app or wherever you get your podcasts. Coming up, we've got a lot to tackle, a 401(k) transfer, mutual funds and fees, and much more in our Ask the Advisor segment that's coming up at 6:43. You know, I think taxes for everyone. It feels like it should be kind of the great, it's just fair across the board to everyone, but you think, okay, well, the more money you have, right, the more you pay in taxes, but we know that's just not how it works. There's a bunch of millionaires out there and huge corporations that really don't seem to be paying their fair share. And the IRS now is trying to crack down.

Steve: Well, they're successfully cracking down. Since 2022, the IRS actually up their enforcement on businesses and super those that are super wealthy and delinquent on their taxes. And they've actually managed to collect a half billion dollars from these people.

Amy: The IRS is notorious for being understaffed. You try calling and you expect that you're going to be on there for about 22 hours waiting for someone to come through. And so, yeah, so the U.S. government has thrown a lot of money their way and said, "Listen, we know we have issues bringing in money to the federal government and here we have large corporations and really rich people who aren't paying their fair share and to go after them, we need more boots on the ground." And so, they're paying for more boots on the ground and to your point, it's working.

Steve: Yeah, it is. And, you know, I guess better going after them than the little guy. Because I've certainly had folks I've worked with over the years that had no reason for them to be audited. It was frustrating to see the situation that they found themselves in. And it's like, come on, you know, there's, there's these big companies that aren't paying and I guess this is a good thing. I don't like the IRS like anybody else, but if they're going to go after somebody who may as well be some of these big companies that are paying their taxes.

Amy: Well, and you see the headlines, right? There's a company, ginormous company, they make X millions or billions of dollars a year. And then you're looking at like the percentage they pay in taxes, you're like, how is that even fair? Well, they have floors, literally floors of tax accountants and attorneys and things like that, that know how to, you know, work the system. And so I like now that, okay, we're going to try to, you know, balance the playing field out there for all of us that maybe do not have, of course, the whole team of people helping us figure out how to best pay our taxes.

Steve: It is a little funky when Jeff Bezos' secretary has a lower effective or higher effective tax rate than Bezos himself.

Amy: Right? A few red flags there. A few red flags. And I'm glad they're doing this. Yes, you're right. The IRS doesn't always have the best reputation, but I think this is something that should be moving the needle in the right direction. You know, we've been talking a lot during this show about the relationship that you should have with your advisor and the questions you should be asking in order to find the right fit for you. But once you've found that fit, and especially after you've been working with someone for years, gosh, I think about, you know, the clients and investors that we get to work with that come in and they open up their lives to us and they're showing us grandkids' pictures and, you know, my son or daughter just, you know, graduated from the school and they really led us into their lives. And then all of a sudden it's time for one of us to retire. You know, the advisor that you're working with, now what do you do?

Steve: Yeah, I mean, there was a research study done recently that showed that almost 4 in 10 of advisors are going to retire in the next decade. That's a big number. That's a nice chunk of people planning on retiring. So having an understanding of what your advisor's succession plan is, is important. You know, I myself, unfortunately, I'm not one that will be retiring in the next decade, but I do appreciate it when folks I work with ask me about it. My doctor retired last year. And, you know, there's people that we trust to have our backs. And yes, it's fair. People retire. I help people retire every day. That's what I do for a living. So I get it. But making sure there's that plan in motion and understanding what that transition is going to look like is very valuable for you.

Amy: Yeah, and I think regardless of how old you are, whether you're, you know, 45 or 65, when you start working with an advisor, that could be one of the questions that you ask. What does the succession plan look like around here? Especially if it's a really small firm and you're not seeing all these other advisors there, right? If that person leaves, what's going to happen next? And you know, we just got to see how Steve Sprovak, right, the former co-host of the show after working for decades for the same company, and he has, he had some clients that had been with him since close to the very beginning. And so he started planning this transition more than a year before he actually left. He started having conversations with them. And then because he had been working, or he had been working with so many of these clients for so many years, he knew them so well. So then he was handpicking the advisor that they would work with based on their individual needs to make sure that it was a really good fit. And a lot of time and planning and thought went into that process. And on the other side of it, I haven't heard from anyone who hasn't been happy. And of course, we all miss Steve, you know, but he's helped everyone else retire, well, now he gets to retire.

Steve: I was front and center in a lot of these meetings. So it was one of the reasons why I was brought on with Allworth as a company is because we had a couple of advisors that had been here for 20-plus years retiring. So I've been in part of a lot of these meetings helping transition these client relationships over the past couple of years where the expectation had been set by Steve, for example, "Hey, Mr. and Mrs. Client, you know, I've worked with you for 20 years, I'm retiring, but you know, we have young Steve, new and improved Steve."

Amy: Steve 2.0.

Steve: Yeah, Steve 2.0 that's stepping up to the plate as a CFP. He's going to continue the relationship in the way that you've grown used to. So having an expectation with your advisor when the time comes about what that transition might look like is important. The same study that we talked about here a moment ago, it showed that advisors with less than 10 years left in the business, 1 in 10 planned for an external sale, meaning when they retire, they're going to sell their book of business, their client relationships to another firm. Three in 10 identified a successor within their practice, case in point, like Steve. Another 3 in 10 had no formal plan at all.

Amy: The key is, right, you find someone you like, ask them what their plan is. Here's the Allworth advice. If you do trust your current advisor, you should feel good about who your next advisor will be. So make sure to ask the tough questions. It's your life savings after all. Coming up next, we've got a deep dive into estate planning documents, what you really need. You're listening to Simply Money presented by Allworth Financial here on 55KRC, the Talk Station.

You're listening to Simply Money presented by Allworth Financial. I'm Amy Wagner along with Steve Hruby. Okay. So you go through the financial planning process. We've been talking about that a lot during the show, what that looks like, who you're working with, one part of it is, okay, maybe you've built up some wealth, what happens with that money after you're gone? Well, you need a solid estate plan. And we would say it doesn't matter how old you are. This, these are, there's key components of this that you need to have.

Steve: Yeah, everybody needs to have an estate plan. There are too many curveballs that life can throw us that can derail our financial situation. Something unexpected happens. We want to know what happens with our money if we are gone. And this is how you get your head wrapped around it. So first of all, again, in no particular order, power of attorney. This is a legal document allowing somebody else, this is the power of attorney, that's who that person is to make financial decisions if you become incapacitated. This is something that goes away at death. It is only in life. A lot of folks that I work with, I will ask them, the older folks, I will ask them to bring in children or a trusted friend, somebody that they know has their best interests in mind and establish that power of attorney in the event that I need to talk to somebody else on behalf of the client.

Amy: It's important to understand what these are and how these work because it's not even necessarily if you become incapacitated. Like I think about a friend of mine who had adult sons who were actually going out to hike the Appalachian Trail. So it was two sons who were doing that together and they had already graduated from college, they had jobs, they had their own places, they had bills coming in. They made their father their power of attorney because they were on this trail for a couple of months. A couple of bills came in, a couple of inquiries financially that could have really impacted their credit score in a negative way and he was able to take care of those. So you know sometimes it's just having this because anything could happen and life circumstances could change or you could actually plan to kind of be out of a pocket for a while and it gives someone else the ability to make sure that nothing kind of falls through the cracks.

Steve: Yeah, that's a great point. So again, power of attorney, they terminate in death. So something that doesn't start until after you die is your will. Now we draft this in life. It's a piece of the estate plan that appoints an executor that will distribute your assets to your beneficiaries, as noted in the will per your direction. So it's a way to make sure that the property that you have, for example, goes to the people that you want it to go to. But it doesn't avoid probate. So this is something that we typically want to avoid because that's a public process that's open, available, that information is out there. And there can be added costs associated with it. But at minimum, we do want to have that in place so that our wishes are met if something were to happen.

Amy: And understand this about your will, this is not a one and done situation. I always, you know, I'm always like, oh, every time I ask someone, you know, "Do you have a will?" "Yes. Yes. We absolutely have a will."

Steve: Twenty-five years ago.

Amy: Twenty-five years ago, exactly. And I'm like, okay, so your children were three and five at the time, right? Now they're almost 30, you know, things have changed. And so this is something I would say that every five years you kind of revisit it. Some years you're going to say, "Oh, okay, everything is the same. We don't need to update it." But in some cases you will want to update it. And you want it to reflect your current situation. And right along with the will, I would say also very important, a healthcare directive, have this conversation with your family, but also make sure that you have someone set up that is legally this person if you are incapacitated, you know, very ill in the hospital, someone who can help make decisions for you about your treatment. And you know, if this is an end-of-life situation, decide, or make the call for you, do you want extraordinary measures done in order to try to keep you alive? You know, those are the kinds of things that you have to have these conversations with someone because it's an incredibly emotional time, right? And so not having that conversation with the, you know, and you can have it set out in a legal document as well, but also identifying who that person is because I've seen far too many times you'll have a number of kids and they're not on the same page. One of them, "Let's do everything we can to keep dad here." And the other one is, "Well, I just don't think Dad would want that," right? Make it very clear. This is actually, I think an act of love for your loved ones.

Steve: And making sure that you find the person that you trust to make that decision on your behalf.

Amy: Is key.

Steve: Yeah, that is key because it can be, it can put the person that is named in your healthcare directive as in a difficult place. So trusting that they're going to make your wishes come true is important. Speaking of trust, that is another document that is an important part of estate planning. Thank you. I appreciate that. So, you know, it's an optional document just like everything else. You know, you can get a lot, you can get a lot of your estate plan handled via will and establishing appropriate beneficiaries. A trust document goes into a little bit more depth. And in my opinion, when I see this as a major benefit is when you have minor children, for example, if you have a family member with special needs that you are overseeing, if you are remarried and have children from previous marriages. So this is a way that we can have more complex financial planning needs met via that trust document.

Amy: And as someone who's part of a blended family, my husband and I redid our estate planning once we got married a few years ago. And it was, some people say, "I don't know, do you have to work with an attorney that sounds so expensive?" No, I guess sometimes you don't. There's things online that are available to you, but a trust is something that is more complex. And also I found a huge benefit in working with an estate planning attorney who's been doing this with so many other families. I had never been in this situation before. We were a blended family. And what are the nuances of that? And what are the things that we need to think through? And there was some just fantastic advice and things that, honestly, I wouldn't have thought about that came to the table because of that. And I left that meeting feeling really good about where we ended up, but we would have never gotten there if it was just my husband and I trying to figure these things out.

Steve: Yeah, the more complex the situation, the more you benefit by actually partnering with an attorney. But obviously, the expenses get a little bit higher when you're working with an attorney, when you're putting together a trust. Can you do this all by yourself? Sure. I mean, you don't need a lawyer to do a will. There are websites online that can help guide you through creating some of these estate planning packages. If you're not going to meet with an attorney, start there. Please do something. Yeah, there are too many situations where people haven't had proper estate planning done. And, you know, this happened to my own family. I had bugged a family member for years to do this stuff. She didn't. She passed. And everything went through probate. And I was the one that dealt with it. And I know, you know, people that have had similar experiences. It's all too often that people just put this conversation on the back burner because it's it's hard to have. It's confusing. You don't know who you want to help you make these decisions when you're unable to. But it's important. At minimum, at minimum, make sure that your beneficiaries in your accounts are up to date. This is where other horror stories have happened, where beneficiaries supersede what is named in your will. That is what is the number one determining factor on who you leave assets behind to. And I have seen situations over the course of my career where people had to leave assets to those that they didn't want to, access, for example.

Amy: Yes, wasn't originally part of the plan. They just over kind of look that part. And you made a point earlier about the health care directive to choose wisely. Right? In that situation, you want someone that maybe remains level-headed during a time that's incredibly emotional. But also when you're thinking about who you want your executors to be, choose wisely there as well. This is someone who needs to be detail-oriented that doesn't get overwhelmed easily. Right? So if you've got several children, it's not like you're picking your favorite child. You would just be picking the one that you think has the best sort of gifts and talents that align with these things. But I think the best thing that you can do in any situation, once you have your estate plan set up, is to communicate with your loved ones. Right? It is the best thing that you can do.

If you don't care after you're gone if they're biting each other's heads off, don't say a word to them. Let them figure it out all later. But for most of us, that's not what we want. We don't want to surprise our kids when we're gone. So make sure that there are no surprises when you're gone. Here's the Allworth advice. Creating an estate plan, this is just a crucial part of the financial planning process. Please, please do not underestimate it or put it off. Coming up next, you've got questions. We've got answers. We're going to ask the advisor. You're listening to Simply Money presented by Allworth Financial here on 55KRC, The Talk Station.

You're listening to Simply Money presented by Allworth Financial. I'm Amy Wagner along with Steve Hruby. Straight ahead, if you are heading out on a cruise this year, how to make the most of that trip, make sure you've got some smooth sailing ahead. If you've got a financial question you'd like for us to answer, well, there's a red button you can click on while you're listening to the show. It's right there on the iHeart app. Record your question. It's coming straight to us. We're talking about some of these questions tonight. The first one is from John in Montgomery. "I was recently laid off and I plan on moving my old 401(k) into a personal IRA, but the contribution limits for IRAs are of course so much less. I want to contribute what I was putting into my 401(k) before, so what should I do?"

Steve: I'm sorry to hear that, John. Sometimes life throws us curveballs and this is certainly one of them. You know, when you leave an employer, whether or not you've made that decision on your own, you have options with what to do with your old 401(k). Now, one of the challenges is that when we have a 401(k), it's tied to our, when we have an active 401(k), it's tied to our employer. And the benefit is that the contribution limits are much higher than that of an IRA, which we have to have earned income to contribute to anyways. In this situation, the amount that you can contribute will go down unless you get another job that offers a 401(k).

Amy: I do think though, if you are tied to say roughly the annual contribution for a 401(k), to max it out is about 20,000, right, for an individual, that's about where it is.

Steve: Yeah, a little more.

Amy: You know, so you've got an IRA, of course, which is much less than that. If you want to be putting 20,000 in, if your new job offers a high deductible healthcare plan with a health savings account, right, so they're not offering the 401(k) like your old company did, max out that IRA, then also look at maxing out that health savings account, which can go to qualified healthcare expenses. This is triple tax advantage. You put the money in tax-free, it grows tax-free, and as long as you're taking out for qualified medical expenses, also tax-free. There's nothing like it out there. So I'm a huge, huge fan, huge proponent of HSAs. I would say that's an option for you.

Steve: Way to plug in your favorite investment vehicle.

Amy: I honestly, I don't like, I think HSA should pay me. They could just pay me because I'm, but I'm legitimately a proponent of them. We've used them in our family for years. We pay the out-of-pocket expenses on the medical costs as we go and we're just putting it aside. And this is another retirement account for us. So, John, it could be a good option for you. And then it's not a sexy word, but a taxable account. You know, taxable brokerage account, it's taxed at a different way. And if you keep that money in there, invested for more than a year, you're taxed at long-term capital gains rates, which could have a huge advantage to you. So you can still be putting aside that money. And I would actually say maybe a benefit of this would be it's in different kinds of accounts with different tax treatments, which gives you more flexibility in retirement. So I love that you're saying, "I want to keep saving and investing as much as I was before." And I think maybe this will give you even a little more flexibility than you had.

Steve: Yeah, it doesn't shut the door. It doesn't shut the door and your ability to save because there are other vehicles that you can use. Great point. So Judith and Tim in Delhi Township, "We want to buy some mutual funds. What do we need to know about the expense ratios?" I would ask why mutual funds? There's A shares or C shares. The A shares are for those that are going to hold it over the long term because they have a higher upfront cost or C shares are level sales charged. So it's for those that are shorter term holdings. But exchange-traded funds exist where you can invest in the market just like in a mutual fund but at a very low expense ratio which is essentially the skim off the top before the return's ever reported. So if you want to buy mutual funds go for it but with exchange-traded funds out there and very accessible to most investors, I say go that route.

Amy: This is like an advanced investor question. I like that they're asking this because it shows that they understand that they are paying, right? There are expenses, you know, aligned with investments. And I think some people don't truly understand that. But, yeah, we just had something, a segment on the show recently talking about these actively managed accounts and how many of the times they actually don't do as well as the indexes that they're held up against. So you can invest in an ETF, an exchange-traded fund that tracks, say, the S&P 500, the 500 biggest companies that make up the American economy. And most years that fund is going to do better than someone who's in there buying and selling constantly trying to beat the index. So to your point, I would look at other options maybe beyond a mutual fund with lower expense ratios and often higher returns. They often end up being kind of a win-win. Next question comes from T.H. who lives in Warren County. He's 62, not married, no kids. "Do we need to be doing anything special with my retirement planning?"

Steve: I mean, special, the thing that comes to mind for me is estate planning. Who will your money go to when you are gone? And maybe that's a little crass, but it's an important part of the conversation to understand what's going to happen there because at the end of the day, you still need to look at all the same things that other investors need to look at what do you need to spend in retirement? What income you're going to generate? Where's that going to come from, a pension, Social Security, investments that you've gathered? I think making sure you know where that money is going to go when you're gone is worth a look.

Amy: Yeah, also long-term care insurance planning for that with, you know, not with the not having a spouse or kids that might take care of you if something happens. Coming up next, we've got the keys to smooth sailing on your next trip. You're listening to Simply Money presented by Allworth Financial here on 55KRC, the Talk Station. Thank you for listening to Simply Money presented by Allworth Financial. I'm Amy Wagner along with Steve Hruby. Steve, have you ever been on a cruise?

Steve: Not in my entire life.

Amy: Really?

Steve: Yep.

Amy: Yeah, I have a couple of times and I learned some certain like tricks, rules of the road for these and so that's kind of what we're talking about here, ways to make that next cruise as smooth sailing as possible and it's funny because there's two different ways to look at it. One is you should book really early and the other one is that you should book at the last minute.

Steve: Yeah, so polar opposites in this situation, but the earlier you book, the more options you're going to have. You can lock in some pretty low prices there, but in the event that some of these cruises don't sell out, that's where waiting to the last minute can be in your benefit. Obviously, we need to have a little bit more flexibility when we're waiting to the last minute, because that also means that maybe you don't get on that cruise.

Amy: The first cruise I ever went on, I've only been on a couple of my life, but the first one was right after college. I had just gotten my first job, my college roommate and I decided to go. We had no money. And so we did, we waited until the last minute. We got a heck of a deal. You know, I think we went to three different islands. It was a lot of fun. One of the things though that we knew upfront was what was included and what was not included in the cost of that cruise. If you are someone who likes pina coladas or a glass of wine with dinner...

Steve: A recent college graduate, I imagine there were a few pina coladas.

Amy: A couple. What we did, and I'm not saying that the cruise ship would probably agree with me saying this, but we had no money. We bought a box of wine, put it in our luggage, and after dinner every night, we would buy one glass of wine with dinner and then go and fill it up from our box of wine. I'm not necessarily advocating for that, but I am advocating for understanding what is and is not covered in the cost of that cruise, because I have heard horror stories of people who paid more for alcohol than they actually did for the entire cruise. So doing your research ahead of time, and that also applies to the excursions, because a lot of the excursions that they're offering you on the cruise, they're getting a portion of that. They want you to do their excursions. You can work with someone and a travel agent outside, or even I have waited until we've gotten off the boat in a port and just said to some locals, "What do you guys like to do? What's a fun place to go?" I had some great experiences that didn't involve $700 to swim with a dolphin.

Steve: Yeah, "That's a nice van you have there. Can you take me on a circling excursion?"

Amy: Okay, I didn't say that. I actually did do that one time and it worked out just fine. I'm still here.

Steve: Oh boy. I'm glad you're still with us. Yeah. What about a spa on port days? I actually saw a tip about this because when you're out to sea, everybody wants the special treatment but when everybody else is going on those excursions, that's when you can book spa treatment for cheaper.

Amy: Yeah, that's a great tip. Yeah, that's a great tip as well. And another one, speaking of tips is a tip accordingly, right? You're tipping all the people that you interact with, the person who's serving you dinner and the people who are cleaning your room every day. There's two options there. You can tip upfront or you can wait until the end and see what kind of service, just don't forget that part. Thanks for listening. You've been listening to Simply Money presented by Allworth Financial here on 55KRC, the Talk Station.