Amy: Tonight, where do you fall on your road to retirement compared to others? You're listening to "Simply Money," presented by Allworth Financial. I'm Amy Wagner, along with Steve Sprovach. Before we even start to talk about this, I feel like I need to say, I understand that we all like to compare ourselves to others, right? Benchmarks.

Steve: Sure.

Amy: I'm someone who, if there's an article about it, I'm like, hmm, how do I, how am I, how are we? Am I ahead or behind or whatever? We're gonna get into that. But I also want to say that we don't believe that when it comes to retirement, you can only look at benchmarks of how much other people have saved or how much someone says you'll need to work for you. Because it's just such a personal, unique situation.

Steve: Well, and it could get depressing because, Amy, there's always somebody with more money than you or me.

Amy: Of course.

Steve: I mean, I don't care how wealthy you are.

Amy: Warren Buffet for starters.

Steve: Well, yeah, that's a good start. But, you know, it's normal. You know, if you've never had a financial plan drawn up, or you just go about your business, life is crazy, you don't have two minutes to think about anything other than what's screaming at you at the moment, you know, you wonder, am I on track? Do I have enough? Can I retire when I want to? And so let's get out some numbers. If you've got more than 700 grand socked away in retirement accounts and savings, guess what? You're in the top 20%. I mean, that might surprise a few people.

Amy: And that number is for those who are 65 and older.

Steve: Exactly.

Amy: So, if you've got $700,000 and you are in your early 60s, your 50s, your 40s, man, you are way ahead of the curve. You're way ahead of a lot of other people. And 2 out of 10 have more than $700,000. One out of 10, so, 10% have a million or more when they get to that 65-year-old mark, you know. And I think for a lot of people, that million-dollar mark is something that's thrown out there often. You know, how much is enough?

Steve: Yeah, exactly. What's your number?

Amy: Yeah. For some people, $700,000 is actually more than enough. For some people, a million dollars doesn't even begin to cover what you will likely spend in retirement, right? And we see all of those people everywhere in between that come into our offices.

Steve: Yeah. And again, if you're 65 or over, the average is a little over $400,000. So, if you're above that mark, congratulations, you're better than half the people out there. If you're below that mark, okay, you just gotta make it work. It's not the end of the world. I think what you said, Amy, is spot on. I mean, everybody is different. I have seen people that swear up and down, no, I need $9,000 a month. That's what we do. I've gotta spend money on this, that, and the other thing. And, you know, you walk away saying, well, okay, they justified what they just said they needed. I guess they need it. And I have seen other people, and especially in Cincinnati, I make more money than I do when I was working and I'm actually saving money every month, you know. Because if you retire with no debt and you go on maybe just one decent trip a year, and otherwise you're living on Social Security and maybe a pension, and a little bit of savings, that's kind of Cincinnati in a nutshell right there. So, yeah, you got more than a million dollars socked away at 65, top 10%. Congratulations. But most people don't, and if you can make it work, good for you.

Amy: It's funny that you say that. I just came back from New York, and you're right. This would be an entirely different conversation...

Steve: Oh, can you imagine?

Amy: ...entirely different show. If you're in New York, if you're in California, I mean, the numbers that we, you know, use here work in the Midwest. That's probably it. And we're really lucky that the cost of living is so low here. For those who are looking at moving in retirement, that's definitely something worth taking into account. How much do you need? Well, maybe you're thinking about it in Cincinnati dollars. Do you need to think about it in Florida dollars? Or are your kids in Connecticut? Connecticut dollars, right? So, that's one thing to think about here. So, as we compare ourselves to how much other people have saved, there's also, of course, another part of the equation, and that's Social Security benefits. About 90% of people claim their benefits by the time they turn 65. And I would imagine a huge percentage of them, it's when you turn 62 on that very first day. Yeah.

Steve: Yeah. And full retirement age technically is 67 for most people listening, you know. The number kind of surprised me, but then when I think about it, it doesn't really surprise me. By the way, let's talk about full retirement age. Full retirement age for most people is age 67. That's not when you get your full benefit. You know, I don't think of it that way, at least. Full retirement age at 67 is really the threshold of when you can make more than $21,240 without reducing your benefit. Yeah. So, that's really all full retirement age means to me. Yeah, the longer you hold off, the more money you're gonna get out of the system. But you know what, the first question, if you're thinking about drawing Social Security, really should be, am I gonna continue to work? And if so, am I gonna make more than about 21 grand? If you answered a yes to both of those questions, you probably don't wanna draw Social Security until you're 67. Because if you're 67, 68, 69 years old, you can make a million bucks a year and not have a reduction in your Social Security benefit.

Amy: Well, and first and foremost, if you need it, you need it, right? I mean, if you get to 62 and you need that money and you have no other options, well, then you've gotta take it. But there's another consideration here, and that's your health. Because, you know, for a lot of people, the longer that you wait to claim it, right, the higher the benefit's going to be. But there's a lot of people who say, but what if I, you know, don't make it past the age of 75? What's the breakeven point? Well, for most, most studies that I've seen, it's the early 80s. If you live past the early 80s, you're better off to delay taking that benefit because you're gonna come out far ahead, you know, if you live into your 80s or 90s. If you're sick now or you've been sickly, or you're not taking care of yourself, or, you know, have some ongoing chronic issues, well then maybe you claim it on that very first day that you can knowing that you're trying to get as much out of the system as you can. And I hate to put it that way, but I think that's a really, kind of, normal way of thinking about it. Which way do I come out ahead? By claiming earlier, by putting off? And the answer has a lot to do with how long you live.

Steve: You're listening to "Simply Money" on 55KRC presented by Allworth Financial. I'm Steve Sprovach, along with Amy Wagner, and we're talking about things you should be thinking about as you approach or are in retirement. And, Amy, I think that's a good point about health expenses. You know, it's crazy. If you're 65 or older, at least according to the Bureau of Labor Statistics, you're gonna spend about 7 grand a year. I know a lot of people that are in that age group, that seems kind of low to me. I mean, part A...

Amy: I agree.

Steve: ...of Medicare right there is 174 bucks a month. That's, you know, 2 grand a year. Most people buy some sort of Medigap insurance to cover the copays and whatnot. That's another 1500, 1800 bucks. Never mind, you know, okay, get sick, you're gonna get a bill. You know, so it can add up to a whole lot more than that. That to me is a given.

Amy: Well, and the average couple, we know there's a fidelity study that comes out every year, and it's actually, I think, one of the best studies that's out there when it comes to healthcare expenses. In every year, it kind of goes up substantially. I mean, when you look at the rate of inflation and then you look at the inflation rate for healthcare expenses...

Steve: It's a whole different inflation rate.

Amy: It is. It's like two completely different measures because healthcare expenses just go up so much year over year. But I think the last number I saw was about $350,000 the average couple will need retiring at the age of 65 over the course of retirement. That's a lot to plan for. And I also think it's really hard to wrap our head around healthcare expenses. Because when you're working, when you're in your working years, most of the time your company covers the cost of your health insurance. You pay us a tiny, tiny portion of that monthly premium. And then your whole family is on that plan. When you get to retirement and you get to Medicare, you and your spouse are on different Medicare plans. Different Medicare plans might make sense, you know, depending on one of you is on one medication, one of you sees a different kind of specialist. So, it's an entirely different ballgame when it comes to healthcare in retirement.

Steve: And you're talking about if you're Medicare eligible. If you retire at 64, you wanna have an eye-opener. If you haven't talked to HR, just ask him what the cost of COBRA is. COBRA is the law that says, yeah, you can keep your company health plan, but you just have to pay for it yourself. You mentioned you pay a fraction, it's usually less than 10%. So, you know, if you're having 25 bucks a paycheck coming out for healthcare and you think, oh, I'll just...you know, 25 bucks every 2 weeks, I can handle that. No, it might easily be 250 bucks every 2 weeks. It could be a lot more than that as a matter of fact. So, yeah, health costs are high.

I wanna talk a little bit, Amy, about what your day is like in retirement. And this sounds really dumb and maudlin to maybe more than a couple of people out there. But, you know, most people approach retirement thinking, "Wow, I can't wait. No, I'm gonna throw the alarm out the window. I don't have to get up anymore. Nobody has to tell me what to do anymore. I'm gonna be able to play golf and do everything that I couldn't do when I was working." I can vouch, from personal experience with my own father, that's not the way it necessarily works. And this is something you've gotta take a hard look at, I think before you retire, of what you're gonna be doing during the course of a day.

Amy: The average person, right, according to some research by the Bureau of Labor Statistics, spends nine hours a day sleeping, six hours of that relaxing and leisure time. Maybe that's playing your golf, right? Hanging out with grandkids, whatever that is. Four-and-a-half hours watching TV, two hours eating, drinking, getting ready. The rest is spent on housework, caregiving, exercising, any kind of additional work.

Steve: I'll save that [inaudible 00:10:17.509]. I can get rid of the exercise, work, and housework. Okay, I'll use that for some other...

Amy: Don't need that.

Steve: ...purposes.

Amy: I can spend that time for something more fun. But I think that's just like the average person. But I don't know that we ever think of our days and the chunks of time and how we use it. But when you get closer to retirement, it makes a lot of sense. You know, for many of us, Monday through Friday, whatever your workday was, 9 to 5, 8 to 4, whatever it looked like, that's what you're used to. Five days a week, and you're used to being around people and having those conversations. And maybe you've got a really tight group of friends at work, or there's coworkers that you go to lunch with every day, or you're used to being in charge of meetings and running things in a really fast pace of life. This goes to show, things can change drastically when you get to that point where you're no longer going to work.

Steve: Well, they can. And most people...and this is something I coach people as they're getting ready to retire. Yeah, I mean, they come to see me on the financial side, but I bring up things like, "Okay, you got some projects around the house. What are you gonna do when they're done? What are your hobbies?" You tell me what they are. Don't let me tell you how to fill up your day. Because if you retire...and again, I mentioned my dad, he retired with no hobbies, a wife who had passed away and moved to Florida because it was warm there. He thought that would be perfect. Two years later, moved back because his friends weren't in Florida, still had no hobbies, you know, had to figure out how to fill up his day. And it took him about three years to get back on track.

Don't do that. Be intentional. There are some great groups you can volunteer. I'm sure you can find a group of friends that have similar interests, but make those decisions, be intentional. Look into what your day is gonna be like, just as hard as you look into how much money you spend in budgeting as a need for part of your retirement plan. Because if you go into retirement thinking you're gonna be busy and you're gonna be happy, about three weeks later, you're gonna be looking for something to do. And that's not a good place to be.

Amy: Here's the Allworth advice where stats are gonna allow you to compare yourself to others, right? Let you know kind of where you stand. But your retirement goals and financial plan, they are all yours, which is why you need to be thinking ahead. Coming up next, how to save tens if not hundreds of thousands of dollars when you get to retirement. You're listening to "Simply Money" here on 55KRC THE Talk Station.

You're listening to "Simply Money," presented by Allworth Financial. I'm Amy Wagner along with Steve Sprovach. If you can't catch our show every single night, but you don't wanna miss a thing, we've got a daily podcast for you. Really easy to find. Just search "Simply Money." It's on the iHeart app or wherever you get your podcasts. Straight ahead, what retirement looks like for those who don't have children. Lots of differences. I'm gonna tell you one of them right now, you probably have more money than those of us who had children. Am I right?

Steve: Yeah.

Amy: Can I get an amen? You know, it is common for us as you get older and as you make more money for lifestyle creep to come in. And if this is someone who you're sitting there thinking, ah, this is probably us, have you ever thought about shopping at a dollar store? More and more people are doing it now.

Steve: Yeah. And there's a company called InMarket. They track retailer foot traffic. It's an industry magazine. They measured a 4% increase in the share of dollar store visits, and get this, Amy, among those that are making more than $100,000 a year. People, regardless of income, are saying right now, you know what, inflation is starting to cost me. Maybe it's time to look for some bargains out there.

Amy: I'm raising my hand right now. I discovered this several, several years ago. You know, like when you're giving gifts, gift bags and tissue paper and cards, you go to a store and that can be insanely expensive. You can pay 15 bucks for a card and the bag or whatever. A dollar at the dollar store. So, I go there...

Steve: I know.

Amy: ...and I stock up on those kinds of things.

Steve: Batteries.

Amy: Yes, exactly.

Steve: Yeah, that's what I find.

Amy: Yeah. So it was really...If you've never been to a dollar store, it's been a long time because you haven't had to worry about it, now that inflation is higher, go in, walk around, see if there's anything that's worth stocking up on like we're talking about here. My kids, it's funny, are more interested in dollar stores now than they've ever been because they're trending on TikTok and a lot of social media platforms. They're saying, listen, like this is a dupe or there's a really expensive hair care product or facial product or whatever, and this is a dollar store product that I like that works just as well. So, you know, if you're looking for a way to save, this could actually be one that makes a lot of sense. You know, someone said there is nothing that's certain in life, of course, but death and taxes, and that is, of course, always right. Uncle Sam's gonna come calling no matter when they're going to make sure that they get that money. But there is a way that when you get closer to retirement, you might be able to hold off Uncle Sam a little bit, or at least not have him knocking on your door every single day, and this all comes down to planning.

Steve: Well, it does. And, you know, when people say, okay, I'm retired now and I'm gonna need this much money a month, how does this work? How do I figure out where the money comes from? They're really asking me a tax question. You know, if you've got the money and you're comfortable to retire and you've had a planner tell you, no, you can afford it. You're good. The next question is, okay, why would I take it from this account to the other? This is where you can get the government to work for you because the government is notoriously shortsighted when it comes to taxes. And, of course, I'm talking about Roth IRAs. One of the best planning tools that if you haven't used it before retirement, you may wanna use it after retirement.

A Roth IRA is basically after-tax money. The government wants to tax it today and they're willing to let you grow that money so that when you need to draw it out, you can take it out tax-free. So, the longer you've got money sitting in a Roth IRA, the more you can use that shortsightedness of the IRS and the government to your advantage. If you're in your 30s or 40s, Amy, oh my goodness, put money in a Roth IRA. So maybe you've got a couple of hundred grand in retirement, tax-free available to you. What a planning tool. It's awesome.

Amy: I've got another great planning tool, a health savings account.

Steve: Oh, I knew you were gonna jump on that.

Amy: You know, I'm going there.

Steve: I knew you were gonna.

Amy: I'm a huge fan. Here's the thing. We're saying, you know, this is certain in life, death and taxes, yet this is money that if you plan it well is absolutely never taxed, right? You make the money in your paycheck, it goes straight into a health savings account. It can grow tax-free. And then as long as you're using it for qualified healthcare expenses in retirement or before, tax-free.

Steve: Completely. Yeah.

Amy: You will never pay taxes on that money. It is a gift for the government. I don't know how long we're gonna have this around truly. At some point they're gonna say, we're onto you guys. Until then, if a high deductible healthcare plan makes sense for you or your family, I highly recommend looking into these. And I'm gonna take it one step further. If you can pay out-of-pocket healthcare expenses now, you put it in that account, you make sure that that money is invested and it grows, and you are just sending it forward to retirement and you take it out tax-free. If you don't need it for healthcare expenses in retirement, it's like a tax-deferred account. It's like another 401(k) for you.

Steve: You know what I didn't know about HSAs? And I thought...you know, because we've been doing this show together for a while now. I thought you taught me everything there is to know about health savings accounts.

Amy: I missed something?

Steve: I did not know you can roll over an IRA to an HSA. That's fairly new. And you talk to your tax advisor before you do it. But, you know, the short version is you can roll over up to the limit of your IRA contribution. You can roll money over into an HSA from your IRA. Again, check with your tax accountant before you consider doing it. But I didn't even know that was an option.

Amy: Yeah, it's a one-time deal. You can't do it every single year, multiple times a year. You can do it once. It's a tool though. And there's also strategies that these things come down to. If you have some money in retirement in Roth accounts, and you have money in tax-deferred accounts, looking at how much you're making in any given year can tell you, okay, in a year where I'm making more, I'm gonna pull money out of a Roth account, right? Because I've already paid taxes on it. But maybe in a money where my income is down for some reason in that given year, then I pull out of a tax-deferred account because I'm going to pay less in taxes at that time. So lots of great ways that you can kind of strategy. Having your money in different kinds of accounts with different tax treatments is the key there.

Steve: And I think it's a good reason to also have a joint taxable account if you're married. Because when you are retired, money coming out of an IRA is gonna be taxable income. Money coming out of a taxable joint account, you may or may not have taxes on it. It depends on your tax bracket. And you're only gonna pay tax on the profit, not every dollar that comes out. And in a given year, it might not be much if any tax due on that distribution.

Amy: Here's the Allworth advice. If you wanna save yourself tens, maybe hundreds of thousands of dollars in retirement, make sure you're working with a qualified tax professional who understands how you can benefit from these different kinds of strategies. Coming up next, we're talking about estate planning, and a nuance of it that could impact maybe you or a family member. We'll get into that next. You're listening to "Simply Money" here on 55KRC THE Talk Station.

You're listening to "Simply Money," brought to you by Allworth Financial. I'm Amy Wagner, along with Steve Sprovach. You know, something that happened to my family years ago, which still comes up with other people that I'm talking to, is my grandparents had worked really, really hard for years, and they had built up a pretty good nest egg for themselves. And then my grandpa got sick with Parkinson's. He was about 86 years old. And all of a sudden, he needed skilled care. And then my grandma wanted to be near him. And they were literally blowing through thousands and thousands of dollars every month trying to just keep up with their bills and my grandpa's needs. And it was really difficult as a family member because they had always talked about how they wanted to have this legacy that they passed on to my dad and then me after that. So, joining us tonight is our estate planning expert from the law firm of Wood and Lamping, Mark Reckman. Mark, I'm sure this is a very familiar tale. You've seen it many times. What can we do? Is there anything we could have done in that situation to have protected any of that money? Because I can tell you that by the time my grandparents passed away in their 90s, there was almost nothing left.

Mark: Well, and this is a very, very common situation, as you mentioned, and it will become more common, of course, as the baby boomers reach...I mean, the baby boomers at this point are all in their 70s and 80s and is the largest bubble of population in this country. And so we're only gonna see more and more of it over the next 20 years. It's a real issue. And to go with that, Amy, the government does not have unlimited funds. And we do not have a system in our country in which the government or the health insurance companies pay for the kind of long-term care that you're talking about it. We do have Medicare, which is a federally subsidized health insurance program, but that's for medical care.

And in my world, we make a distinction between medical care and custodial care. Custodial care means room and board. It means room and board for people who have limited physical abilities or limited mental abilities. Medical care is treatment which benefits someone medically that they improve, that they get better, and that they're going to eventually get well enough to be on their own. Medicare is common. Everybody over 65 and people with disabilities are eligible for Medicare. And it's a wonderful program. It's part of The Great Society, which was set up by Lyndon Johnson back in the '60s. Medicaid, however, is different. Medicare is for everybody who signs up and pays the premiums. Medicaid is not. Medicaid pays the nursing home bills, the room and board kind of bills, not the medical bills, but the room and board expenses of people who have no money. It's a welfare program. It's for people who are, in essence, broke.

And so what we're talking about here is, is it possible for you to set aside some money and still qualify for that program? And to do so is somewhat controversial because the government does not have unlimited funds. And so when we talk about this, we need to be very sensitive to the fact that it's an area where there can be abuse. And certainly, no one in this program is interested in advocating abuse. Having said that, there are rules and if you follow the rules, there are ways that you can, in essence, tuck away some limited funds for children and grandchildren.

Steve: Mark, I wanna back up a little bit. Because I think the number is only about 7% of people have some type of long-term care insurance. And it's fairly common that when somebody is close or needs nursing, full-time nursing care, they just assume Medicare covers a nursing home. It doesn't. And that's when they say, oh, wait a second. So, the government's gonna make me spend my own money? That's not fair. But that's the way the rules are. If you have any assets of...well, any appreciable assets.

Mark: Right. And fairness is a funny concept, Steve. And, you know, what the government has agreed to do is to provide subsidized health insurance through the Medicare program. They've also agreed to cover people who are broke. So, they're not people who cannot take care of themselves or living on the streets, that much the government...But the truth is, they don't have the financial capacity to pay the nursing home bills for everybody in the boomer generation.

Amy: Sure.

Mark: They simply can't afford it.

Amy: And you're in a situation, Mark, where there is some accumulated assets, they're spending them down, but the family sees on the horizon the fact that Medicaid is coming, but there is some money left, right? And, of course, yes, we wanna do this legally. And one of the things that my family learned during that time was my grandparents couldn't just gift my father money because it looked like probably within the next year he was going to be on Medicaid. And there's actually that five-year look-back window. So let's talk about that and what that does.

Mark: Well, over the decades of my practice, we've always had a look-back rule. And what that means is that Medicaid is a welfare program. It pays the room and board, the nursing home bills of people who have no money, people who are broke. It's certainly possible for a person to give away their money and claim that they're broke. And so there's always been a rule that says, you cannot qualify for Medicaid by giving away your money. And over the years, there's been, we call that the look-back, the transfer penalty. And the essence, the most important piece of the transfer penalty is this look-back concept. The idea is that if you make transfers before you qualify for Medicaid, and if you do that in order to qualify for Medicaid, and there are some exceptions, but unless you meet one of those exceptions, if you transfer money and apply for Medicaid within a certain window, you'll be penalized, and the penalty means that you'll be disqualified.

In essence, it's a disqualification. They don't fine you. They don't put you in jail. They just simply disqualify you from benefits. That look-back window today is five years. And it's been five years for who the best decade and I suspect it'll stay that way for a while. So, bottom line is that if I give my money away, if I give away $250,000 and I turn around and apply for Medicaid a year later, Medicaid's gonna bounce me. They're gonna say, you're not eligible for Medicaid because you made a gift a year ago, and that's during this five-year look-back window.

Steve: So, what can you do? What tools are available?

Mark: Well, the one thing we hear about all the time, Steve, which is something I sort of wanted to get out on the table. There are people out there who will tell you that using an irrevocable trust and putting your money into an irrevocable trust is a great strategy. Understand, of course, that to do this, you've gotta do it five years ahead. Because if you do it during the five-year look-back period, you're gonna be disqualified. But if you act five years or more earlier, you can put your money into an irrevocable trust. And this is a technique that I have seen and I have used on a few occasions. I'm not a big fan of it for reasons we'll talk about in a minute. But I do know that there are planners out there who use irrevocable trusts. So what does that mean?

Well, a trust is a legal entity. It's a document that we sign, and it creates a legal entity in which one person called the trustee holds money or property for the benefit of someone else who's called the beneficiary. The trustee has to follow the rules that are listed in the trust document. They have to do what the trust document says. And whether the assets in that trust are counted by Medicaid depends on the terms of the trust and depends on who created it. Now, trust can be irrevocable or they can be revocable. A revocable trust is one in which the person who created it can change it or take the money out or put money in, or terminate the trust altogether. Revocable trusts don't work for Medicaid planning at all, period. That's not what we're talking about today.

We're talking about the irrevocable trust, and, of course, the word irrevocable sends shivers down the spines of every estate planning lawyer because you only got one shot to get it and you only got one shot to get it right. But in Ohio, you can create an irrevocable trust in which you say, I'm putting my money in this trust, I'm gonna put someone else in charge of it as the trustee, and I'm only entitled to receive the income that that money creates. I'm not allowed to touch the principle. And if I then wait five years, and if the trust terms are appropriate, then the trust has gotta be exactly correct. If that trust is correct, then in theory, the principle of that trust doesn't count when I apply for Medicaid, only the income.

Amy: These things can be incredibly tricky and somewhat technical. But if you're listening tonight, I'm telling you, this is the kind of thing you're going to want to know when and if you ever get to this situation. Because in a lot of cases, it can sneak up on you, and at least you'll have the background. Great insight as always from our estate planning expert from the law firm of Wood and Lamping, Mark Reckman. You're listening to "Simply Money" here on 55KRC THE Talk Station.

You're listening to "Simply Money," presented by Allworth Financial. I'm Amy Wagner, along with Steve Sprovach. Coming up, if you are one of those people who is handed a severance package out of the blue, what do you do next? It's an incredibly emotional time, but if you are smart about it, you can maybe get more outta that package than you thought you could have. You know, younger generations aren't having as much children. You and I have talked about this many times in the show. My gosh, your wife's family. How many kids?

Steve: She's one of nine. I'm one of four. Yeah. And hers was the small family in Minnesota. I mean, you got cold winters and a lot of Irish Catholics, that adds up to a bunch of kids.

Amy: Yeah. And you had two kids, right? My mom was one of eight, and I have two kids.

Steve: Yeah.

Amy: We're doing things differently now. And if you are someone who maybe doesn't have as many children or never had children...well, first of all, if you've never had children, you've probably got money coming out of your ears. That's what I like to think. They're so darn expensive. I honestly, like, picture, like, people doing the backstroke in a pile of money in retirement if you don't have children. That may not be the case.

Steve: Yeah, but, Amy, this is where you say to your kids, "Yeah, but I'd never change a thing, kids. Don't take that too seriously." Right?

Amy: And now my kids are listening saying, "My mom would be really excited if she..."

Steve: My mom hates me.

Amy: Never, never. But listen, things are different. One is you probably look at saving and investing differently because you're just thinking about yourself or yourself and your partner. But also though, when you get to retirement as you get up in years if you need a little extra help, right, around the house, getting to doctors' appointments, you can't live on your own anymore, in a lot of cases, your children are the ones who kind of step up and help. If you don't have children, you have to have a plan in place long before you start to get to that point.

Steve: Yeah. And I don't have many, but I do know of some people that they have no kids. And yes, they tend to have a lot more money than people like you and me with lots of kids. But it is a whole different set of circumstances. I think the fun part is they tend to travel more. You know, they don't have to worry about their kids and costs, and they've got some extra money and whatnot. But a very serious concern is, yeah, we're not gonna be healthy forever, and what do we need to do later in life? And I think one of the first concerns is either if you've got tons of money and can self-insure, congratulations, but if not, consider long-term care insurance. I think it's a lot more important for someone with no kids than someone with kids.

Amy: Another thing might be your investment strategy might be different. I honestly don't know as I think about it if mine really would be. I don't know that I would be more conservative or more aggressive, or at a different kind of risk appetite. I actually think it would probably be likely the same. But I think for some people, maybe that would be different. So that is something to think about.

Here's another one. Make sure that you've done your estate planning early. Obviously, if you've got children, likely, that money's going to them, right? But if not...And I think about a good family friend who randomly, her son got a call, an estranged uncle had passed away. He had recently rewritten his will, and that money was supposed to go to a philanthropy that he really was invested in and cared about. The problem was he never signed that will. So, it went through probate. And this kid, I'm telling you, he was 20 years old at the time, inherits millions of dollars from this kind of, you know, estranged hermit of an uncle. You know, it wasn't the way the uncle wanted it. And this kid had never even had a relationship with him. It came completely out of the blue. So, not only I would say, do you need to plan this early, but have conversations with nieces, nephews, brothers, sisters, whoever might be impacted by your estate plan.

Steve: Yeah. And if it is a charity, and I've seen this where, okay, later in life you might find a charity that becomes important to you. And you might even go to your lawyer and write that into your will or set up a trust or something like that. You may have siblings and they may assume, okay, you know, she has nobody, no kids, I guess we're gonna get a substantial chunk of that estate. And then, okay, it goes to a charity. If you didn't tell your siblings that you had changed your plans, they're gonna be a little, almost upset, you know. It's one of those things, you can have it in writing and do it all correctly, but there's a lot less issues after you pass if you communicate. And this is true of a lot of things in life, just communicate. Hey, I changed my mind. These are my plans. This is what's important to me. And it solves a lot of problems down the road.

Amy: Here's the Allworth advice. If you don't have children, you might have different needs, different goals in retirement, but like everyone else, you've gotta have that long-term financial plan, estate planning in place to make sure that everything goes smoothly. Coming up next, what to do when or maybe if an employer hands you a severance package. You're listening to "Simply Money" here on 55KRC THE Talk Station.

You're listening to "Simply Money," presented by Allworth Financial. I'm Amy Wagner, along with Steve Sprovach. This can be an incredibly emotional thing if it happens to you. Maybe you've worked at a job for years, for decades, and you find out you're losing that job and they simply come to you with a severance package. You're so overwhelmed at this time, but it's hard to figure out. And often there's pressure, Hey, just go ahead and sign this. This is what you're getting. Before you sign that package, listen up.

Steve: Yeah. And this is something most people don't realize, but it may be negotiable. Okay? There are certain things. You're not gonna get a whole lot out of it, but if you left on good terms, if you were on good terms with your company, didn't burn a lot of bridges, you may be able to get maybe some additional things like increased healthcare. That's one of the first areas that you may wanna talk about.

Amy: Also, if you have unused paid time off, sick days, whatever that looks like for you, you know, maybe you've got a bank of those that you were saving for some other time, saving them for later, first and foremost, ask about cashing those out, right? This is time that I didn't take that was promised to me. It was a benefit of working here. If you're telling me I'm no longer gonna be working here, I think I should be paid for that. I think that is an absolutely, you know, fine conversation to have. And I think it's also hard, again, because your mind is not in the right place. Many times you're not expecting this or you've been fearing it. In either case, you're not necessarily thinking, okay, if they come up to me with a severance package, I'm calmly going to ask about health insurance benefits. Being paid for my PTO, right? And that's why it's important to think about these things when you're not in this situation so you know what to do if you are.

Steve: Yeah. But that's after the fact. I wanna talk a little bit about before the fact. I mean, generally, you know something's going on at work. Things are slow. You're not getting as many orders. There are rumors, you know, in the rumor mill circulating around a little bit. And I think this just brings up the point. If there's any issues going on at work, find somebody to draw up a comprehensive financial plan, Amy. And, you know, this is not necessarily self-serving. I've seen the results. When you get some severance packages and early termination offers go out, there are two classes of people, those that have hands that are shaking, and those that have hands that are not shaking. Guess who had the financial plan? Guess who knew exactly where they stood when the unexpected news came out? I mean, it's totally, totally different. If you're prepared for any decision, you know how to handle it.

Amy: And you know what I've seen several, several times through the years is someone who is so overwhelmed when they get the severance package, right, and maybe you have a week or two weeks to sign it, they'll wait until the very last moment, call us, and it's like completely overwhelming because there's so many decisions that have to be made and they've got a day to make them. So, the minute that this comes across your desk or comes to you, make sure you're reaching out for help to help you figure out the best way to do this. Another thing to think about too is if you're maybe 63, 64, maybe you're looking at, can I go ahead and retire early? But if you're younger, can you still get a reference out of that company, right? If you're leaving on good terms, that's another really important thing to do next. If they're asking, you know, the next employer wanting to know, okay, you worked there for 20 years, what kind of a worker were you? So that's a really important part of this too.

Steve: Yeah. I know some people who have retired from human resources. This is not their favorite thing to go through either, you know. But there are classes, and you have to offer a class of employee the same offer, whether they want you to accept it or not. And, you know, HR is in a rough spot. And if you're one of the good guys, good women there that you're on good terms with everybody at work, and you're just caught up because you happen to be the same age or in the same department where they were looking for cutbacks, trust me, HR wants to work with you and they will provide references.

Amy: Thanks for listening tonight. You've been listening to "Simply Money," presented by Allworth Financial here on 55KRC THE Talk Station.