Steve S.: Tonight, Congress staves off financial disaster, the dos and don'ts of life insurance, and why women are about to inherit trillions. You're listening "Simply Money," presented by Allworth Financial. I'm Steve Sprovach, along with Steve Hruby. Hey, this is the 79th time since 1960 that Congress has voted to increase the debt ceiling. Allworth Chief Investment Officer Andy Stout is joining us, as he does every Monday. Andy, you kind of knew this was gonna happen, but it's nice to see it actually done, isn't it?

Andy: Yeah. I mean, markets didn't really get too nervous when it came to the debt ceiling because you had House Speaker Kevin McCarthy, President Joe Biden, they were both sending out some positive signals, some positive messages, saying, "We're not going to default. We'll get this passed." And so I think that allowed there to be only a minimal amount of volatility associated with that. And when you just think about the debt ceiling in general, you just mentioned, you know, how many times it's been passed. But, I mean, it would've been catastrophic, to put it mildly...

Together: Yeah.

Andy: ...if they did not reach, or extend the debt limit. Now, fortunately, it's extended through January 1st, 2025. Republicans appear to be the big winners from what they got out of the debt ceiling negotiations, specifically capping discretionary spending for the next two years. Still have some defense spending, more than pretty much any other area. And there's also work requirements now for some government assistance. What the Democrats got out of it, and specifically President Biden, was that the timetable. It's January 1st, 2025...

Steve H.: Doesn't have to deal with it again.

Andy: ...meaning it will not be an issue during his reelection campaign. So that was the big thing that they got out of it.

Steve S.: So, were you surprised that the market took off the way it did it on Friday? I mean, was that because the debt deal was done? Or was it because of the jobs numbers or the wage inflation numbers, or all the above?

Andy: It had nothing to do with the debt ceiling. I mean, that was... All of last week's movements, the debt ceiling, once the House speaker and the president came to an agreement, it was just a matter of time before it made its way through the House and the Senate, and to President Biden's desk. What moved the markets on Friday, when you saw the Dow soaring 700 points, was the jobs report. And it gave people a little bit of hope that the Federal Reserve would be able to pause at their next meeting, when they set policy rates, on June 14th.

Steve H.: So, is this a good news is good news type thing?

Andy: No, it's more of a bad news was good news type of thing, because the bad news was, and the reason... I mean, if you looked at the job report, there's two parts to it. You had the number of new jobs employers added. That just took off. Three hundred and thirty-nine thousand, plus there was 93,000 in upward revisions to the prior two months, so the net change was, like, 432,000. That's a big, big number. That would actually argue for more rate hikes. However, what the market gravitated toward was more the unemployment rate, which jumped from 3.4% to 3.7%, as basically, there was a drop in employment of 310,000. Now, that might seem different...because I just said there was 339,000 new jobs, but yet now I'm saying there's a drop in employment of 310,000. It's important because the government actually does two different surveys. The number of new jobs comes from when the government asks businesses about the jobs they've added.

The unemployment rate comes when the government asks households about their employment situation. So, it's a big difference between the two. And what's notable is that the increase in the unemployment rate certainly gives the Fed room to pause at the June meeting. Plus, in that jobs report, Steve, you mentioned wage inflation just a second ago. We saw that average hourly earnings, they increased 0.3% in the last month. That was expected. But what was better was that the prior month got revised to down from 0.5% to 0.4%. So we're seeing a drop in average hourly earnings. And on top of that, the weekly hours worked per week, on average, fell from 34.4% to 34.3%. So, when you put that all together, it's suggestive of lower wage pressure for employers, which allows the Federal Reserve to allow more data to come in, in order to assess the situation before a move, likely in July, if [crosstalk 00:04:58]

Steve S.: You're listening to "Simply Money" on 55KRC. I'm Steve Sprovach, along with Steve Hruby. And if it's Monday, we must be talking to Andy Stout, Chief Investment Officer at Allworth Financial. Okay, Andy. So, the news that came out on Friday was good, over and above the debt ceiling. We got good jobs numbers and wage inflation numbers. Talk to me about a recession then. Is it still likely? Or are we kind of working our way out of the woods?

Andy: Well, if you look at the leading economic indicators, which are data points that move before the broad economy does, yeah, they still do point to a slowdown. So, I mean, there's risk out there. There's no question about that. On top of that, if you look at what the average economist is predicting, the average economist is predicting negative growth in the third and fourth quarter of this year, suggesting that a recession would start basically in roughly a month or so. Now, to be fair, you can go back to last November and look at what the average economist estimate was, and they were expecting a recession to have begun in January. That obviously didn't take hold, because we had growth in the first quarter of around 1.3% on the annualized basis.

And right now, growth is expected in the second quarter when you look at not only what economists are predicting, which is around 0.6% or so, but also if you look at where the data's tracking at. So, the data that's been released so far is suggesting that our economy's growing at about a 2% rate of growth.

Steve S.: But does this even matter? I mean, if we do have a recession, and everybody's already expecting it, wouldn't that already be priced in, baked in to current stock and bond prices?

Andy: To a degree. I mean, the market's pricing in...it's not just one scenario. It's basically, I don't wanna get into the weeds too much, but it's a weighted average of many different scenarios. That's the collective market thoughts. Now, that certainly does suggest there is some pricing in of a recession. But if you think about it, there's also many people who believe that there won't be a recession, that we will have a soft landing, and be able to keep the economic expansion going, at a slower rate, albeit, but still growth nonetheless.

Steve H.: So, what about the Fed's next move? We're at a point where we finally get to stop talking about the debt ceiling, which is really exciting.

Steve S.: Yeah, I'm happy.

Steve H.: I know, right? But we still have to talk about inflation. So, what do you think the Fed is gonna do at this point, Andy?

Andy: Well, right now, if you just look at where our market pricing is, the market has only a 25% chance of a rate hike when the Fed meets on June 13th and 14th. So, as of right now, not gonna happen. If you look out to the next meeting, that's when they would set the next policy rate, would be on July 26th, there's almost an 80% chance of a hike by then. So, that's what the market's pricing in. I wouldn't be shocked if we do get a hike. But I also think, with the headwinds the economy's facing, I think there's a good chance we get maybe a rate cut, in maybe November or December of this year.

Steve S.: So you think that's still a possibility? You know what surprises to me is, we're talking about, is the Fed gonna pause at the next meeting in June? And usually, when they're out giving their talks at different venues across the country, they're all pretty much on the same page. We're seeing some dissension in the Fed, aren't we? I mean, that's unusual.

Andy: Yeah. It actually is really unusual. So, if you rewind about two weeks ago, there was about a 70%, 80% chance of a rate hike on June 14th. You know, again, that's down to 25% now. What changed that was comments from vice chair nominee Philip Jefferson. He talked about skipping a June hike. Literally, within one minute, last Wednesday, it was at 1:17 p.m., there was a 70% chance of a hike. By the end of that minute, on 1:17 still, that had dropped all the way down to 25%. That's a [inaudible 00:09:24].

Steve H.: I sure am glad that what we say doesn't move the market like that. That's a terrifying thought.

Andy: Would be a little. But that just shows you the power of a word. Now, Philip Jefferson has a big voice on that committee. He's a voter. He's the vice-chair, basically second in charge, if you will, behind chair Powell. Now, there were some other Fed members out last week talking, and they were talking a much different book. We had, you know, it was four people, basically, came out talking about, "We need to have tight policy. We need to be prepared for more rate hikes." Two of those four members are voters, because not everyone on the Fed votes, by the way. But two of the members, that's Michelle Bowman and Lorie Logan, they were talking about raising interest rates to keep inflation under control. And what that means is you could see some dissension, for the first time, under Powell's regime. In fact, there hasn't been one dissenting vote since 2005. So, when you think about it from that perspective, this discord is a bit unusual in recent times.

Steve H.: Does that mean anything for the markets when we have these different opinions within the Fed?

Andy: You know, it does a little bit. I mean, it adds to the layer of uncertainty. And markets typically don't like uncertainty. What the markets would prefer is the Fed to be done with the rate hikes, and actually get to cutting eventually. And so, when you have people who have votes, like Lorie and Michelle, talking about raising rates because they're more worried about inflation than maybe Jerome Powell is, it does raise that level of uncertainty out there, and that's when you tend to see a little bit more volatility in the markets.

Steve S.: Great perspective, as always, by Andy Stout, Chief Investment Officer of Allworth Financial. Here's the Allworth advice. With the debt ceiling drama over for at least the near future, expect the fight for lower inflation, yep, gonna take center stage again. Coming up next, why women are about to control trillions of dollars of assets. You're listening to "Simply Money" on 55KRC, THE Talk Station.

You're listening to "Simply Money," presented by Allworth Financial. I'm Steve Sprovach, along with Steve Hruby. If you can't listen to us every night, very next day you can get us on podcast. If you think your friends could use some financial advice, tell them too. Just search "Simply Money" on the iHeart app, or wherever you get your podcast. Straight ahead at 6:43, we're gonna break down the instances when you should and should not have life insurance.

All right. So, Saudi Arabia caught everybody off guard again over the weekend. They're cutting oil one more time. Third time that they've cut oil. This time, it's another million barrels a day being cut.

Steve H.: Yeah, in previous cuts, they failed to push oil prices higher. So, they're gonna give us one more, and this is gonna start in July. And what does that mean for us? That means...probably means...

Steve S.: Well, it usually means higher prices.

Steve H.: Yeah, probably higher prices at the gas pump.

Steve S.: But here's what I'm thinking. I mean, they already cut 1.6 million barrels a day, 2 million barrels a day in addition to that, and now another million. Now, I'm not necessarily that great with numbers. I'm kidding. I'm kidding, by the way. But that's about 4.6 million barrels a day. I mean, that's a huge cut, and yet the price of a barrel of oil is still around 72 bucks a barrel. Nowhere near... I mean, that's about half where it was at about a year ago.

Steve H.: Yeah.

Steve S.: That tells me maybe they don't have the influence they used to have.

Steve H.: Well, it would be nice, but I think it's still gonna affect us at the gas pump, isn't it?

Steve S.: It'll affect us. But, you know, we're going through a whole de-globalization right now. I think we're not taking for granted that we can get stuff from other countries whenever we want. And all of this tension does have a good outcome, in my view, because it makes us realize, "Hey, we need to be a little bit more independent in a lot of areas."

Steve H.: And not depend on Saudi Arabia for gas.

Steve S.: Exactly. You know, they're our friend as long as they wanna be our friend and it's to their advantage to be our friend, and the day that they don't wanna be our friend, they're doing stuff like this. So, we'll see how this shakes out. But even the most negative experts are saying, you know, this might mean a marginal increase in gas prices.

Okay. So, when we throw out numbers like the national debt is $30 trillion, that's a big negative.

Steve H.: Oh, yeah. You don't say?

Steve S.: Yet, it's a big number, but that's a big negative when you're talking about debt. But I'll tell you when it's a positive, and we're looking at a number right around that area of $32 trillion, where it can be in a positive way.

Steve H.: Yeah. So, older women are about to get a lot of money. This is, according to the consulting group McKinsey, $30 trillion is the amount of assets that single women, mostly widows, are gonna be inheriting by the end of the decade.

Steve S.: That's three times where it was at three years ago. This is a huge amount of...

Steve H.: Yeah. Triple from 2022.

Steve S.: ...wealth transfer. Exactly.

Steve H.: Yeah. That's a lot of sugar mamas, Steve.

Steve S.: Okay. Well, wasn't necessarily expecting that, but, you know, women outlive men by, you know, on average, five years, so, you know.

Steve H.: Yes. This is the why behind it.

Steve S.: And here's what, to me, is really important about this, is, you know, in our industry, as investment advisors, and anybody in the financial industry, if you go back 30 or 40 years, it was not only a male-dominated industry as investment advisors, but generally, and this is a big generalization, and I'm talking about past generations, more often than not, the husband in the household made the big financial decisions. That's not necessarily the case now, and if you wanna have an influence on the couple you're talking to, you better include the female, the wife in the conversation, because this is a huge amount of money that's being transferred.

Steve H.: Yeah. Currently, women, they control, and this is women in the U.S., they control about $11 trillion in assets, which is 31% of the overall assets. Men control about 70%. But you better believe, folks that I'm working with, that I want both spouses in the room when we're going through a financial plan. Part of what we do as advisors is to help people understand that we want their money to live longer than both of the people in the couple. And making sure that we're having these conversations with women is extremely important, to keep them in the loop as to what to expect when they survive their spouses. Because yes, the reason why we're talking about this is, on average, women live longer than men.

Steve S.: Well, and I think what you wanna do, in the case of a married couple, is you want both parties to be involved in financial decisions. Maybe one makes the final decision, but there has to be good communication between the two. I don't care if it's the old school, male/female, maybe just live-in partners, or same-sex marriages, or whatever the case is, you want both people involved, because what you don't want is what I experienced about 10 years ago, where, in this case, the husband made literally every decision, every financial decision, and he passed away suddenly. And the wife came in with the proverbial shoebox, and it was a shoebox, full of statements, and bills, and crying her eyes out. "I don't even know where to start. I had never been involved in anything money-related." And it wasn't that she was dumb. I mean, she was a sharp woman, but the husband insisted on making those decisions. Not a good situation.

Steve H.: No, it's not. And that's a big part about what we do, is making sure that people are prepared for the inevitable. And it's a bummer of a conversation, but the reality of the situation here is that there are going to be a lot of women inheriting quite a bit of wealth over the next several years.

Steve S.: You're listening to "Simply Money" on 55KRC. I'm Steve Sprovach, along with Steve Hruby, and we're talking about a massive, record amount of wealth being transferred to women over the next year, according to a recent study, three times what we saw just three years ago. The number is $30 trillion. So, it's not just the wealth transfer, but this translates to even health costs.

Steve H.: Yeah. That's a big one. So, a lot of the women that I meet with, and this is silly to me, but the same survey said that high-net-worth women, divorcees, widows, they found them knowledgeable of and focused on things like critical issues of long-term financial planning, long-term care insurance. There's plenty of people, men, women, sometimes the man handles the finances in the house, sometimes the woman. But you do need to think about this if you're a woman, because you could end up spending more than men on your long-term care.

Steve S.: Yeah, exactly. If you're gonna outlive males by five years, well, this is generally in your declining years, where health issues are gonna last a lot longer, and be much more costly. Okay. So, why don't we see more advisors that are female? I mean, the number's only 15% of advisors are female.

Steve H.: You know, I think that what we're talking about here could impact the industry in a positive way. With a lot more women coming into control of so much money, I think that that's gonna open the door up to more females entering the industry, so that they can work with some of these women that want to work with females. And I hope so.

Steve S.: And that's fair.

Steve H.: Yeah, I do. I mean, here at Allworth, we work as a big team. So, having female advisors to partner with some of these women inheriting incredible wealth is a major benefit.

Steve S.: That would be a very positive development out of this study by Fidelity. Here's the Allworth advice. Death or divorce can railroad financial independence, regardless of what sex you are. It's critical that you seek out a qualified financial professional when these situations arise. Coming up next, some important financial tips for those who have kids who recently graduated from college. You're listening to "Simply Money" on 55KRC, THE Talk Station.

You're listening to "Simply Money," presented by Allworth Financial. I'm Steve Sprovach, along with Steve Hruby. You know, graduating college, it's a huge accomplishment. Fun, exciting time. But I'll tell you what, it could be scary too. A lot of these grads are coming out with financial pressures that, you know, they went from party central to, "Okay, now I've got student debt. I don't have a job yet, or it's not gonna pay for everything that I wanna do." This segment is dedicated to the parents who are listening, because, at least I hope they pass this advice to their children. This is a tough time.

Steve H.: Yeah. So, don't believe those out there that say there's both good and bad debt. This comes from a recent meeting at Berkshire Hathaway shareholders meeting. Billionaire Warren Buffett was asked by a 14-year-old which financial concepts he would give young people who still have time to implement them.

Steve S.: And he was probably thinking a stock tip.

Steve H.: I know, right?

Steve S.: Yeah, yeah. How should I invest my, 14 years old, my lawn money or something like that?

Steve H.: Yeah. And Buffett's first, number one tip was avoid debt.

Steve S.: Yeah. And he didn't say, "Avoid bad debt. Mortgages are great." You know, he just said debt is, and basically, debt's a killer. I agree with him.

Steve H.: Yeah. I mean, I came out of college with $40,000 in debt, back in the early 2000s. That's like starting with a mortgage. But you don't have a home over your head. It's rent at that point. There's no way you're getting a mortgage when you have that.

Steve S.: So, you've got 40,000 in debt. Did you get a job right out of college?

Steve H.: I did, but not in my industry. I may have worked at a restaurant for a little while, had some fun.

Steve S.: So, that was a big number.

Steve H.: It was. So, that certainly couldn't last too long, that hiatus, because that was a lot of debt on my shoulders. But again, and I've talked about it before, I was the first in my family to go to college. It was kind of going in blind, but I came out with that debt, and that was a burden for many, many years. It's behind me now, luckily, but not a lot of fun.

Steve S.: So, if you've got a graduating senior, you can't really tell them, "Don't get into student debt," because they already did it. They already have it. But if you've got a kid that's just getting ready to go to college, maybe think about how can we avoid as much, and hopefully all, student debt as possible, to keep that stress from being over their head, hopefully four years down the road, not seven or eight years down the road, because that would be an even big number. So, okay. That goes back to don't listen necessarily to what "they" say. And I'm hesitant to say this because we're part of "they." You know, we're so-called financial experts. But "they" say, "If you're just getting out of college, maybe you should buy a house." Well, when "they" would be a Realtor, yeah, the Realtor wants you to buy a house.

Steve H.: Absolutely.

Steve S.: But that's not necessarily what your first decision should be coming out of college.

Steve H.: Yeah. And in certain high-cost-of-living areas, it's not a chance. There's no chance you're buying a home at that point. And we wanna make sure that people understand that that's okay. If you need to rent while you're getting established in your career and getting used to paying some of these bills that you've never had to pay before as a recent college graduate, it is okay to rent while you're paying down your debt. That's the key there of not listening to the collective "they," in quotations.

Steve S.: Yeah. I think the key is, a lot of the people who are "they" have a vested interest. I mean, you know, a Realtor's gonna tell you, "Yeah, you need to own a home." Well, let's talk about fiduciaries who don't care how you invest your money. They're just looking out your best interest, and whatever the industry is, look for somebody who is a fiduciary, and not going to make money based on your decision.

Steve H.: Yeah, you're young. You still have time to invest.

Steve S.: Exactly. You're listening to "Simply Money" on 55KRC. I'm Steve Sprovach, along with Steve Hruby, and we're talking about parental advice for graduating seniors. And, you know, we're talking a lot about student loans. Maybe instead of waiting as long as possible to pay it back, maybe you should think about how you're going to tackle it even if you're in the deferral period.

Steve H.: Yeah. So, these...borrowers can log online, and they can see what their payment structures are gonna look like after that six-month deferral period. You can use that time period to practice.

Steve S.: It's a good practice time, yeah.

Steve H.: Oh, you better believe it. Because if you need to start making those payments, and you didn't write that into your budget, what are you gonna do?

Steve S.: Yeah. Yeah. And you mentioned the B word, but let's talk about that. Budgeting, it doesn't have to be something that you fight with. It doesn't have to be an adversary. It's a good thing, especially as you're getting close to graduating, or maybe have just recently graduated and looking for that job, hopefully even already have a job. Budgeting should be a worksheet, a work in progress. Just, okay, let's just start fleshing out how much is coming in and how I'm gonna pay myself, where the money's gonna go, and just having a realistic expectation. Don't do what I did. What I did was I kept two bank accounts, one blank check in my wallet, so when I unintentionally overdrew that account, I can start writing checks on the other. Not a good budgeting system.

Steve H.: No, not in the least bit. And keep in mind, this segment today is for our listeners to pass this information to your children. The budget for a child is much more simple than it is for you.

Steve S.: Oh, yeah.

Steve H.: When you have multiple competing financial priorities, at the stage in your life that you're in, that's gonna be trickier than it is for your kid to break up their first couple of paychecks and divvy that out to make sure that they're able to make payments on their student loan debt, for example.

Steve S.: Yeah. Okay. Now, here's the tough love part. Okay? This is where, with fantastic intentions, a lot of parents, they've been enabling their kids, maybe credit cards, paying cell phone bills. And when you say to the kid, "Okay, how are you gonna start doing this on your own as the graduating senior?" "I don't know" is not an acceptable answer. This is the time in their lives where you need to make sure that they start taking a little bit of responsibility, because the longer they don't, the tougher road they're gonna have in life. It's time for them to start manning up and saying, "Here's how I'm gonna figure out how to get this done."

Steve H.: Yeah. You can help them create a plan, but let 'em leave the nest, for their own good.

Steve S.: Yeah. Yeah. Some are personal responsibility, probably, in my view at least, the most important lesson in life, I think, financial independence starts when you first get out of college, and the parents don't help you to do everything.

Here's the Allworth advice. If your college grad makes financial mistakes here and there, give them some grace. They're gonna make mistakes. Give them a little bit of grace, a little bit of space, because they have something the rest of us don't have as much of, and that is time. Coming up next, when having life insurance is a necessity. You're listening to "Simply Money" on 55KRC, THE Talk Station.

You're listening to "Simply Money," presented by Allworth Financial. I'm Steve Sprovach, along with Steve Hruby. Hey, if you've got a financial question you'd like us to answer, just hit the red button on the iHeart app. Record your question, goes straight to us. We'd love to hear from you.

All right. So, if you wanna sell your home for more money, and who doesn't, well, there's one thing people are doing that doesn't involve spending money on renovations. We'll explain that straight ahead.

All right, Hruby, one major part of financial planning has nothing to do with investing, or what index funds you should be putting some money into. This is even more boring. We're gonna talk about life insurance. And I'm kidding about the boring part, because this is something that everybody has to make a decision on. Some people need it, some people don't.

Steve H.: Yeah, that's a good point. Some people need it, some don't. And we're gonna talk about the six times when you might. So, life insurance, at its foundation, when you break it down, really what it is is an agreement between the policyholder and the insurance company, where you pay premiums as that policyholder, and if you die, the listed beneficiaries is typically going to be family, but it could be a business partner, they receive that death benefit.

Steve S.: Yeah. I mean, I'm gonna summarize it by, you know, you need life insurance if somebody is depending on your income that you're not gonna be able to provide if you're dead. I mean, that's really what it boils down to. And the biggest problem I've got with life insurance is it's a commission-driven industry. You don't find many fiduciaries there. And when somebody gets a big fat paycheck if they can convince you to sign on the dotted line, they've got a reason where they may, and I'm not saying that all agents are like this by any stretch, but there is a financial incentive for you to buy a large life insurance policy.

Steve H.: Exactly. And there's so many different types of life insurance policies, with riders and features that are confusing and expensive, that most of the time, you don't need. What we're talking about right now is mostly term policies. So, if you have somebody that depends on your income, most commonly a spouse, and you make significantly more than they do, this is one of those areas where you might wanna have a term policy, where the term ends around the time of your anticipated retirement...

Steve S.: Exactly.

Steve H.: ...or maybe when all of your major expenses fall off, mortgages, any kind of debt that you might have. That's the first one. What about children?

Steve S.: Well, yeah. I mean, obviously, if you have young children and you're the breadwinner in the family, or at least the more significant income, you need a lot of life insurance, because those kids not just need that income for your now widow or widowed spouse, but, you know, college will be coming up. That's a big number. So, you've got young kids, you may need to buy a whole heck of a lot of life insurance. Don't be surprised by the numbers that are being recommended to you that you may need for those kids.

Steve H.: Yeah. And you can start with whatever benefit you receive through your employer, but one of the issues there is those plans lack portability. If you were to leave your job, that's typically not gonna come with you. So, this is term policy, with the help of, ideally, a fiduciary financial planner, that's gonna put your best interest ahead of their own.

Steve S.: Yeah. I mean, I'm not gonna sell life insurance to somebody, but I'll identify the need.

Steve H.: Yeah, same.

Steve S.: Yeah. So that if the answer is, "Yeah, you need a million dollars of life insurance." Okay. They heard it from somebody who's got no financial incentive, and then they can go out and shop for the best deal on a million dollars. But if somebody walks in and says, "You need $2 million," they're gonna question, why did that person come up with twice the number that the guy who gets no compensation for it came up with? I think that's important.

Steve H.: Yeah, exactly.

Steve S.: All right. How about if you just cosigned a loan?

Steve H.: Yeah, that's a big one, because debts don't vanish when the primary borrower passes away. If you cosigned, that's the key here, if you cosigned a loan, then you could be on the hook for that. So that's where the other borrowers might wanna have a life insurance policy that named you as the beneficiary, to cover you in the event of them leaving us earlier than anticipated.

Steve S.: Okay. And I'm not in this category, I would love to be in this category, but there are estate taxes. They don't kick in at the federal level unless your estate is close to $13 million. But I'll tell you what, the federal government taxes pretty heavily if your estate does exceed $13 million. That's a surprising reason that you may need life insurance.

Steve H.: Yeah. Once you reach that point... So, what you quoted, the $13 million, that's for a single individual.

Steve S.: Good point.

Steve H.: The married couple is actually about $26 million, for 2023. So, if you're going to owe more than that, or if your estate is gonna be worth more than that when you're gone, then there are strategies where you can use a life insurance policy to help cover some of the inevitable estate tax, or "death tax," that you've heard of before.

Steve S.: Yeah. And that's where you would buy the life insurance, only if you want your heirs to receive every dime of your inheritance. If you say, "You know what? I don't care. They're getting plenty of money. And you know, if the government takes a piece of that, that's just the way it is," then you don't buy life insurance.

Steve H.: Yeah, yeah. Exactly. And again, this one, this is for your ultra-high-net-worth individuals. There's trust strategies that you can use to help pay that death tax, using an insurance policy, to ensure that you're finding a way to poke Uncle Sam in the eye from your grave, essentially.

Steve S.: You're listening to "Simply Money" on 55KRC. I'm Steve Sprovach, along with Steve Hruby, and we're talking about when you need life insurance. And I'll tell you one, and I've seen this with a couple of people, you just wanna throw a heck of a party.

Steve H.: Yeah, right.

Steve S.: And you wanna make sure there's plenty of money, so everybody has a good time. All right. But there are times when you don't need life insurance, and, okay, my estate is not $26 million as a married couple, or $13 million as an individual, but I'm retired. I'm not making any money, so why should I replace income if I'm not working any longer? I would argue that that's a reason that maybe you don't need life insurance at that stage of your life.

Steve H.: Oh, yeah. Absolutely. A lot of folks that I work with, we have an honest review of insurance policies that they hold, and I give recommendations as to whether or not it's something that they truly need, or if they can get rid of, and if they do get rid of it, what does that look like? Because if it's a whole life or universal life, there could be cash balances attached to it, which could create a tax event. There's also opportunities to save money on premiums if you don't need that insurance policy anymore.

Steve S.: Yeah. And I think you really do need to sit down with a fiduciary to understand the different types of life insurance. We're just talking in broad concepts about do you need any type of policy? But there are major differences between term life insurance, universal life, variable life, an employer-sponsored plan, and that's where you need to sit down with a fiduciary and understand which type of life insurance works in your case if you do need life insurance, because the cost differences between those policies are huge, massive changes.

Steve H.: Yeah, oftentimes, and I don't like to speak in generalities, but oftentimes, a term policy is more than enough. There are insurance sales reps out there that try to convince you that you need a whole life or a universal life to start building wealth outside of investment portfolios, but that's oftentimes stacked with hidden fees and features that you don't need and will never use.

Steve S.: Here's the Allworth advice. Whether or not you need life insurance, that's a question that should be answered not by a salesperson, but by a full-time fiduciary financial advisor. Coming up next, do you wanna boost the selling price of your home? Yeah, there's something pretty unique that we haven't talked about much. We'll do that next. You're listening to "Simply Money" on 55KRC, THE Talk Station.

You're listening to "Simply Money," presented by Allworth Financial. I'm Steve Sprovach, along with Steve Hruby. So, if you're selling a house, you wanna know what helps and what doesn't when it comes to getting top dollar. You know having an updated kitchen, neutral wall colors, all that kind of stuff, yeah, they're gonna help sell your house quickly. But, you know what, maybe just making a video is gonna get you even more money.

Steve H.: Yeah, I know. This is fascinating to me. So, according to "Mansion Global" magazine, creating a video of your home is more important than ever. And it's not just a video that shows the layout of the house. The goal here is to show the mood of the house. Isn't that something?

Steve S.: Do houses have moods?

Steve H.: Apparently they do.

Steve S.: I was not aware of that.

Steve H.: Depending on how you direct that video, that could certainly be the case. An example that the magazine shares is about a house, it was an upscale home in Los Angeles, and the owners, they produced a video of, get this, raindrops in the pool, trees blowing softly in the breeze, and a deer pausing on a narrow road that leads to the private home.

Steve S.: Yeah. It sounds goofy, but they got a million dollars over list...

Steve H.: I know.

Steve S.: ...probably because of this. I mean, the numbers are staggering, that the average number of views are four times, 400%, with a video, more than without a video. I mean, you gotta do a video.

Steve H.: Yeah. In this day and age, too, just think about everybody that sits around and watches videos on their phone, and if something goes viral, just think of the attention that gets. So, this video specifically, from this home in LA, interested buyers from around the world saw it.

Steve S.: Well, pretty much everybody. I think the number's over 90%, everybody's gonna start their search online.

Steve H.: Yeah. Exactly.

Steve S.: You're not gonna just grab a Realtor and say, "Hey, show me what you like." I mean, you don't wanna get sucked into that right away. You wanna just sit there, look at Zillow, look at Redfin, whatever the case is, and if there's a video, yeah, I'm definitely gonna be a lot more interested than, in some cases, some horrendously bad pictures.

Steve H.: Oh, yeah. Those ones go viral too, for the wrong reason. The people lived with some kind of crazy decorations throughout the whole house.

Steve S.: Yeah, yeah. And a Realtor, there's a pretty hefty commission. We sold our house two and a half years ago. I mean, 6% of, as an example, $500,000 or $600,000, you're talking $25,000, $30,000, $35,000 of commissions. I think you should be able to take a few hundred dollars and a little bit of time and make a good-quality video if those are the numbers.

Steve H.: Have you seen one of these videos before?

Steve S.: Not one of the ones with the deer.

Steve H.: I have. No, not with a deer. So, I knew somebody that was looking at a house in Hyde Park neighborhood here in Cincinnati, and it was near the observatory. And this drone was flying through the house.

Steve S.: Get out.

Steve H.: Yes, through the house, I guess, showing the mood of the property. And it comes out the front door, and it flies slowly into the sky, giving you this breathtaking view from above of what the property looked like next to the observatory.

Steve S.: I would think that would help sell it. You know, I'm used to, when we sold our house and they said they were gonna, and this was two and a half years ago, so, the way technology changes, yeah, it's changing rapidly. But we had an aerial view with a drone, basically to show the property lines of our house. That was it. It was just a picture from above, not a flying video.

Steve H.: That's a boring mood. [inaudible 00:37:48] your property lines. [crosstalk 00:37:49]

Steve S.: But too, don't forget, I'm ancient. You know, this was ancient technology. This was two and a half years ago.

Steve H.: Yeah. I mean, the last house I sold wouldn't fit this bill. This is mostly for your big, fancy homes, where I guess mood is important. And keep in mind, homes that include the aerial view, they're 68% more likely to sell a listing than those that don't have the look from above.

Steve S.: Well, that makes sense. If you're selling a house, especially if it's a more expensive house, tell your Realtor you want a video of the house, and maybe take a look at that agent's other listings, to see if they've done videos for those houses.

Thanks for listening. Tune in tomorrow. We're gonna talk about why some are more worried about their money than dying. You've been listening to "Simply Money," presented by Allworth Financial, on 55KRC, THE Talk Station.