Common Sense Financial Podcast

In this episode, Brian Skrobonja sheds light on the complex and often overwhelming process of managing an estate after the loss of a loved one. This is a step-by-step guide from the initial steps you need to take after a loved one passes, to the intricate details of settling an estate. Brian offers valuable advice and practical tips to navigate this difficult time with grace and efficiency. Having a clearly defined process in place for managing an estate can help avoid the emotional drain of making important decisions through the loss of a loved one. Friends and family may wish well and provide advice on what to do, but without a proper plan in place, that can lead to more financial problems in the future. Setting expectations for yourself and the beneficiaries of the estate is a great first step to help minimize the confusion and questions around how long it will take to settle an estate. This process can take anywhere from two months to several years depending on the type of assets that are owned and the size and complexity of the estate. A funeral home director will often help obtain death certificates, which will be required before making any claims. It's a good idea to request 10 to 12 original documents because, once submitted, you may not get them back. It's important to first locate the deceased's will, trust, or other estate documents they have on file. If none of these exist, you could have difficulty settling a person's estate which will most likely require an attorney to assist you through the probate process. Check to determine if the person may have left a letter of instruction behind as well. A letter of instruction is not a legal document, but it's a letter that can provide more personal intentions and information regarding an estate. The next step is to begin gathering an itemized list of all known financial institutions where money is held and life insurance companies for filing a claim. It's a good idea to put the list together before jumping into making calls because you'll want to keep track of phone conversations and other instructions. Tip: A really good practice is to keep a journal or Excel spreadsheet of all the conversations to keep track of everything. You'll want to avoid writing on the back of envelopes or scrap pieces of paper as that can become really unmanageable. Checks made out to the deceased will require a bank account to deposit them. Avoid closing bank accounts too early because of this. You will have to notify Social Security that a death has occurred as well as any pension provider to have payments stopped and any eligible benefits paid to the estate. If your loved one served in the military, you may be eligible for veterans benefits. You can get more information about these benefits by visiting va.gov. Over the next one to three months, you will want to screen incoming mail, both physical and email, to look for and gather bills, statements, and notices relating to various types of accounts and insurance policies. You will want to review credit card statements to identify subscriptions or other recurring charges to follow up with the service providers about cancellation. Next, notify creditors and credit card companies that were a part of your loved ones credit history. You can notify the big three credit bureaus; Experian, Equifax, and TransUnion, of their passing, which can usually be done online over the phone or by letter. You will also want to locate where they filed important documents to find deeds, titles to real estate, car titles, or lease agreements as well as storage space keys and account records. Look for a computer file or printout with digital account passwords so you can disable any active social media accounts. If the person was still working, contact the human resources office at their place of work to inform them of what has happened, the HR officer may need you to fill out some paperwork pertaining to retirement plans, health benefits and compensation for unused vacation time. If your loved one owned a small business or professional practice, a discussion with business partners and clients may be necessary as well as consulting with the company attorney who has advised the business. If there was a child in college, it may be a good idea to contact the Financial Aid Office to inform them of what has happened. Depending on the school and the financial situation the surviving child may qualify for more assistance. Before rushing into this process, you should consider speaking with a financial advisor and attorney. There are so many areas where you can make expensive mistakes, working with a professional through this difficult time is usually the best decision. Mentioned in this episode: BrianSkrobonja.com SkrobonjaFinancial.com Common Sense Financial Podcast on YouTube Common Sense Financial Podcast on Spotify va.gov Securities offered only by duly registered individuals through Madison Avenue Securities, LLC. (MAS), Member FINRA &SIPC. Advisory services offered only by duly registered individuals through Skrobonja Wealth Management (SWM), a registered investment advisor. Tax services offered only through Skrobonja Tax Consulting. MAS does not offer Build Banking or tax advice. Skrobonja Financial Group, LLC, Skrobonja Wealth Management, LLC, Skrobonja Insurance Services, LLC, Skrobonja Tax Consulting, and Build Banking are not affiliated with MAS. Skrobonja Wealth Management, LLC is a registered investment adviser. Advisory services are only offered to clients or prospective clients where Skrobonja Wealth Management, LLC and its representatives are properly licensed or exempt from licensure. The firm is a registered investment adviser with the state of Missouri, and may only transact business with residents of those states, or residents of other states where otherwise legally permitted subject to exemption or exclusion from registration requirements. Registration with the United States Securities and Exchange Commission or any state securities authority does not imply a certain level of skill or training. Investments in securities are subject to investment risk, including possible loss of principal. Prices of securities may fluctuate from time to time and may even become valueless. Gas and oil investments are speculative in nature and are sold by Private Placement Memorandum (PPM). Carefully read the PPM before investing. Certain accreditation requirements may apply. The appearances in Kiplinger were obtained through a PR program. The columnist is not affiliated with, nor endorsed by Kiplinger. Kiplinger did not compensate the columnist in any way. Our firm does not offer tax or legal advice. Consult your tax or legal advisor regarding your situation.

In this milestone 100th episode of the Common Sense Financial Podcast, host Brian Skrobonja delves into the critical topic of managing taxes in retirement. The episode focuses on strategies for minimizing tax liabilities, especially for retirees with tax-deferred accounts facing potential hefty tax bills. Brian emphasizes the importance of sustainable income creation during retirement and the role of tax optimization in this process. Most people envision their retirement to be built from predominantly tax-free income, but after many years of deferring taxes, retirees are facing a sizable tax bill on distributions taken from their retirement accounts that could be a third or more of what has been accumulated. When you're saving for retirement, growth of your assets is the priority. But many people don't realize that once they retire that's no longer true. The priority is actually creating sustainable income to support you through retirement while minimizing taxes. A common issue I've seen is future retirees knowing they will owe taxes on their deferred accounts, but not realizing the extent of the problem since the rules change once they retire. Many retirees we work with tend to have the same income goals in retirement, yet with fewer deductions. They no longer have children or mortgage interest to help them offset their tax burdens, which makes the situation more complex. Delaying distributions isn't an option either. Required Minimum Distributions will eventually force your hand. There are two tax problems facing retirees: taxes you will have to contend with today, and taxes that you will have to contend with in the future. With the national deficit continuing to rise, do you expect tax rates to go down in the future or go up? The most likely answer is that tax rates are on the rise, so we should be planning accordingly. There are two possibilities to help minimize the level at which you participate in paying your fair share towards the government's future revenue increases. You can either complete a Roth conversion or through tax deferred withdrawals contribute to an overfunded permanent life insurance policy. Making the decision of which strategy to implement is the easy part. The trick really is completing this process with minimal tax liabilities, which requires specialized knowledge. The progressive nature of the code makes understanding your tax burden complicated and miscalculating this could result in having a larger tax liability than anticipated. Depending on your income level, a taxable distribution can subject your Social Security to additional taxes. This is a separate calculation from the income tax brackets and uses a two step process to determine how much of your social security will be subject to taxation. This is important to know because a taxable distribution may not only push you into a higher income tax bracket, but it could trigger additional taxes on your social security, which could result in a higher effective rate. You should also be aware of the impact a taxable distribution can have on Medicare premiums. The impact of any possible premium increase is typically delayed by two years. This is one of those things that often comes as a surprise when people make decisions about distributions. The antidote to taxable income is deductions, credits and losses which can help reduce the net income subject to tax. There are a few options that can help offset the burden of taxes and make the transition from tax-deferred to tax-free easier, but they don't work for everyone, which is why we recommend working with a professional. The first thing is a donor advised fund or DAF. This allows you to contribute future charitable donations into a fund that you control when distributions are made that can also receive the tax benefit of the donation in the year you make the contribution into the fund. By making multiple years of donations in a single year into that fund, you have the potential of helping offset a taxable distribution from your retirement account in that year. The second is a Charitable Remainder Trust (CRT), where you can contribute future charitable donations into the trust and receive the tax benefit of the donation in the year you make the contribution. You can also receive income from the trust while you're living within IRS limits. A CRT is a more complex arrangement than a DAF with many options and requires an attorney to draft the trust. The third is a qualified charitable donation or QCD, which allows for anyone over the age of 70 and a half to make a direct donation from a qualified account to a charity. The fourth is something known as IDCs, or intangible drilling costs, which allows accredited investors to participate in the drilling expenses of an oil and gas company that could provide reportable tax losses that can help offset all forms of income, as well as the potential for cash flow back to the investor once the wells are operational. Mentioned in this episode: BrianSkrobonja.com SkrobonjaFinancial.com Common Sense Financial Podcast on YouTube Common Sense Financial Podcast on Spotify Brian's article - From Tax-Deferred to Tax-Free: Navigating Taxes in Retirement References for this episode: https://www.usdebtclock.org/ https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2024 https://www.irs.gov/newsroom/irs-provides-tax-inflation-adjustments-for-tax-year-2024 https://www.ssa.gov/benefits/retirement/planner/taxes.html https://www.ssa.gov/benefits/medicare/medicare-premiums.html#anchor5 https://www.irs.gov/charities-non-profits/charitable-organizations/charitable-contribution-deductions https://www.irs.gov/charities-non-profits/charitable-remainder-trusts https://www.irs.gov/newsroom/qualified-charitable-distributions-allow-eligible-ira-owners-up-to-100000-in-tax-free-gifts-to-charity https://www.investopedia.com/terms/i/intangible-drilling-costs.asp https://www.crfb.org/blogs/tax-break-down-intangible-drilling-costs Securities offered only by duly registered individuals through Madison Avenue Securities, LLC. (MAS), Member FINRA &SIPC. Advisory services offered only by duly registered individuals through Skrobonja Wealth Management (SWM), a registered investment advisor. Tax services offered only through Skrobonja Tax Consulting. MAS does not offer Build Banking or tax advice. Skrobonja Financial Group, LLC, Skrobonja Wealth Management, LLC, Skrobonja Insurance Services, LLC, Skrobonja Tax Consulting, and Build Banking are not affiliated with MAS. Skrobonja Wealth Management, LLC is a registered investment adviser. Advisory services are only offered to clients or prospective clients where Skrobonja Wealth Management, LLC and its representatives are properly licensed or exempt from licensure. The firm is a registered investment adviser with the state of Missouri, and may only transact business with residents of those states, or residents of other states where otherwise legally permitted subject to exemption or exclusion from registration requirements. Registration with the United States Securities and Exchange Commission or any state securities authority does not imply a certain level of skill or training. Investing involves risk, including the potential loss of principal. This is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual's situation. A ROTH Conversion is a taxable event. Consult your tax advisor regarding your situation. Investments in securities are subject to investment risk, including possible loss of principal. Prices of securities may fluctuate from time to time and may even become valueless. Gas and oil investments are speculative in nature and are sold by Private Placement Memorandum (PPM). Carefully read the PPM before investing. Certain accreditation requirements may apply. Donor Advised Funds represent an irrevocable gift of assets from the donor to the fund. Contributions made to the fund are irrevocable and cannot be returned or used for any other individual or used for any purpose other than grant making to charities. The gift is not an investment or a security. When evaluating a contribution to the fund, carefully consider the terms and conditions, limitations, charges, and expenses. Depending on the tax filing status, DAF contributions may or may not be tax deductible.

In this podcast episode, Brian Skrobonja takes us on a thought-provoking journey through the evolving concept of retirement. As we dive into the past, present, and future of retirement, Brian helps us unravel the complexities of this modern-day concept which, though deeply ingrained in our society, is relatively new in human history. This episode is essential for anyone planning for retirement, offering a fresh perspective on how to approach this significant life stage in the context of rapid societal shifts, economic developments, and increasing human longevity. We start off by exploring the concept of retirement and its transformation from ancient societies to the modern era. The Industrial Revolution marked a significant shift from agrarian societies to industrial ones, influencing how people viewed work and retirement. It even shaped the way that families and communities lived together. The change in how work was done over the centuries resulted in the creation of a retirement system based on pensions, which was the precursor to modern-day retirement benefits. In the 1900's, Social Security was introduced which shifted the responsibility from families and communities onto the government. In a relatively short period of time, the concept of retirement has changed drastically, and the pace of change is continuing to accelerate. Based on the way technology and healthcare are developing, it's very likely that retirement will look very different in the future as well. As the Baby Boomer generation progresses toward retirement, it will put tremendous strain on programs like Social Security and Medicare due to a considerably lower worker-to-retiree ratio than ever before in history. The programs and retirement paradigm will change, similar to the way that pensions underwent change. Pensions used to be the default vehicle for retirement but have become scarce and relegated, mainly for those with government jobs. According to the Social Security Administration, benefits are projected to run negative by 2033. And according to the Congressional Budget Office, the national debt is projected to reach $52 trillion in 2033. Life expectancy also continues to rise, which puts pressure on the current retirement paradigm from another angle. With new breakthroughs in human longevity, the concept of retirement will have to adapt. Retirement was once considered a necessary transition when a person was no longer productive in their work and had a short life expectancy once retired. Today, people retire when they're still fully capable of working. That reality is widening the chasm between the number of workers and retirees, as well as the financial resources needed to sustain retirement for longer periods of time. Retirement needs to be redefined, since the reality of shorter lifespans is no longer the case for most people. There are three factors that contribute to success in retirement. The first is contribution. The longer you contribute, the better. Perhaps redefining expectations after the age of 60 and looking toward a second half of life with a meaningful career or business may be called for. The second is prevention. The longer your retirement is, the more risks are amplified and can have a significant impact. Finding ways to move things into your control helps prevent unforeseen problems that put your retirement at risk. Examples of this include: insurance, annuities, and tax-free investments. The third is delegation. Retirement planning is a team sport. You can delegate the heavy lifting of a retirement plan to financial advisors, attorneys, insurance agents and CPAs and then use that collective wisdom to implement the actual plan. Mentioned in this episode: BrianSkrobonja.com Common Sense Financial Podcast on YouTube Common Sense Financial Podcast on Spotify References for this episode: https://www.washingtonpost.com/technology/interactive/2023/aging-america-retirees-workforce-economy/ https://www.ssa.gov/OACT/TRSUM/index.html https://www.cbo.gov/publication/58946 https://www.econlib.org/library/Enc/IndustrialRevolutionandtheStandardofLiving.html#:~:text=On%20the%20other%20hand%2C%20according,come%2C%20it%20was%20nevertheless%20substantial https://www.ssa.gov/history/lifeexpect.html#:~:text=Life%20expectancy%20at%20birth%20in,and%20paid%20into%20Social%20Security https://www.macrotrends.net/countries/USA/united-states/life-expectancy#:~:text=The%20current%20life%20expectancy%20for,a%200.08%25%20increase%20from%202020 https://www.diamandis.com/blog/mark-hyman https://www.kiplinger.com/taxes/what-to-do-before-tax-cuts-and-jobs-act-tcja-provisions-sunset Securities offered only by duly registered individuals through Madison Avenue Securities, LLC. (MAS), Member FINRA &SIPC. Advisory services offered only by duly registered individuals through Skrobonja Wealth Management (SWM), a registered investment advisor. Tax services offered only through Skrobonja Tax Consulting. MAS does not offer Build Banking or tax advice. Skrobonja Financial Group, LLC, Skrobonja Wealth Management, LLC, Skrobonja Insurance Services, LLC, Skrobonja Tax Consulting, and Build Banking are not affiliated with MAS. Skrobonja Wealth Management, LLC is a registered investment adviser. Advisory services are only offered to clients or prospective clients where Skrobonja Wealth Management, LLC and its representatives are properly licensed or exempt from licensure. The firm is a registered investment adviser with the state of Missouri, and may only transact business with residents of those states, or residents of other states where otherwise legally permitted subject to exemption or exclusion from registration requirements. Registration with the United States Securities and Exchange Commission or any state securities authority does not imply a certain level of skill or training. Our firm is not affiliated with or endorsed by any government agency.

In this episode, Brian Skrobonja goes over the three main retirement mindsets that could negatively impact your retirement plans. He sheds light on what most retirees get wrong about retirement planning, why being confident doesn't eliminate investment risks, and what to consider when hiring a financial planner. Brian goes over three retirement mindsets that have the potential to derail even the best-laid retirement plans. He starts by explaining that there is more to the conversation around retirement than just having a permanent vacation. Retirement is not a destination; it's a transition into a new stage of life. The different mindsets you need when saving money and growing a nest egg versus spending and withdrawing money from your retirement accounts. Mindset #1 - The Idea That Annuities Are Bad. For Brian, retirement is about having a steady stream of income you can rely on no matter what Wall Street throws your way. Brian reveals that most retirees want consistency and predictability in retirement--they want to know exactly how much money they have coming in each month. Annuities are designed specifically to deliver this predictability and remove guesswork out of producing income for retirement. Remember, stock market risks are real and they don't disappear just because an investor is optimistic about what could potentially happen. Mindset #2 - The idea of the status quo of the stock market in retirement. Some people believe that a well-diversified portfolio will predictably turn out enough profit to sustain them throughout retirement. According to Brian, what is missing from this ideology is that the market doesn't go up in a straight line. If you experience a 50% loss, 50% in earnings will not get you back to even; you need 100%. And if you're making withdrawals, that only compounds the problem. Brian reveals why the stock market is a great tool for wealth creation--but only if you allow the money to grow and aren't making withdrawals for income purposes. Mindset #3 - Fee anchoring. What is a fee anchor? It's the amount someone has in their mind for what they should pay for financial related advice. When considering a fee for an advisor, it's important to understand that it's less about the fee and more about what you're getting in return. A fee is only an issue when there is a vacuum of value. For Brian, if you try to get an advisor to cut their fees, the more experienced and valued advisors will not take you as a client. Brian explains why finding the right advisor can be invaluable, especially when it comes to navigating complex financial products like annuities, private markets, or selling a business. Fees are important and you should understand them, but Brian encourages people to not use them as the primary consideration for making a decision. Mentioned in this episode: BrianSkrobonja.com SkrobonjaFinancial.com SkrobonjaWealth.com BUILDbanking.com Common Sense Financial Podcast on YouTube Common Sense Financial Podcast on Spotify Securities offered only by duly registered individuals through Madison Avenue Securities, LLC. (MAS), Member FINRA & SIPC. Advisory services offered only by duly registered individuals through Skrobonja Wealth Management (SWM), a registered investment advisor. Tax services offered only through Skrobonja Tax Consulting. MAS does not offer Build Banking or tax advice. Skrobonja Financial Group, LLC, Skrobonja Wealth Management, LLC, Skrobonja Insurance Services, LLC, Skrobonja Tax Consulting, and Build Banking are not affiliated with MAS. Skrobonja Wealth Management, LLC is a registered investment adviser. Advisory services are only offered to clients or prospective clients where Skrobonja Wealth Management, LLC and its representatives are properly licensed or exempt from licensure. The firm is a registered investment adviser with the state of Missouri, and may only transact business with residents of those states, or residents of other states where otherwise legally permitted subject to exemption or exclusion from registration requirements. Registration with the United States Securities and Exchange Commission or any state securities authority does not imply a certain level of skill or training. The views and opinions expressed here are those of the authors and do not necessarily reflect the official policy or position of Madison Avenue Securities, LLC This material contains forward looking statements. Forward looking statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Actual future results and trends may differ materially from what is forecast. Investing involves risk including the potential loss of principal. Consider your risk tolerance and specific situation before investing. Investments in securities are subject to investment risk, including possible loss of principal. Prices of securities may fluctuate from time to time and may even become valueless. Carefully read all of the relevant investment product's offering documents and information before investing. Seriously consider investment suitability by referencing your financial position, investment objectives, and risks profile before making any investment decision. Annuity guarantees rely on financial strength and claims-paying ability of issuing insurance company. Annuities are insurance products that may be subject to fees, surrender charges and holding periods which vary by carrier. Annuities are not FDIC insured.

In this podcast episode, Brian shares his remarkable journey from his parents' middle-class immigrant background to achieving financial freedom through decades of learning and building businesses. He recounts his early aspiration for an opulent lifestyle and the pivotal moment when he realized the importance of creating income-producing assets. Through content creation, including three books and the Common Sense Financial Podcast, Brian's financial wisdom and expertise have garnered recognition and awards, providing valuable insights into wealth, financial freedom, and the pursuit of life's true riches. Join us as we explore Brian's wealth-building principles, the significance of faith, family, and relationships, and the pursuit of genuine financial freedom. It was over 30 years ago when Brian got started in business and he's spent this time building his knowledge while building teams and companies. Brian begins by telling the story of his parents and how they came over from Croatia and lived a middle-class life. His father worked evenings and weekends as a lab engineer while also running a business on the side. His work ethic greatly inspired Brian as he grew up. As a teen, he always dreamed of having expensive things, but his only model for getting that done involved trading time for money, which is exactly what he did throughout his early 20's. This led to him working harder to keep up with his increasingly expensive lifestyle. After doing it wrong for years, Brian had an epiphany where he realized he needed to create income-producing assets that would pay for his lifestyle. He set out to create a passive income stream to support his lifestyle and successfully accomplished it. That's when his focus for what he was really trying to do for his clients came into clarity. Brian began producing content back in 2010. And out of that came three books: Common Sense, Generational Planning, and Retirement Planning, which can all be found on Amazon. This led to the beginning of the Common Sense Financial Podcast, which has since been recognized by Forbes as a top 10 podcast by financial advisors. Brian also became a regular contributor for Kiplinger magazine locally in St. Louis. He's gone on to win numerous awards for his work. After 30 years of helping clients create the passive income they need to create real financial freedom, Brian regularly hears clients say that his process has really opened their eyes about how money works and how to think about wealth. In his personal life, Brian has been married to his wife Carrie for 30 years and has three kids, who have also grown up and had families of their own. Throughout their lives, Brian and his wife have taught their children two main things. First, most importantly, for them to pursue a close personal relationship with Jesus Christ and to live out their faith in their daily walk. Second to that, is to understand that a worthy pursuit in life is the things money can't buy: building relationships, investing, and creating memories and experiences with people that you love. A key lesson that took Brian a long time to figure out is that the pursuit of things never brings satisfaction. Real wealth is not found in things but in the freedom to live your life free from having to work for a paycheck or trade your time for money, which is another lesson he tries to impart to his kids as well as his clients. Mentioned in this episode: BrianSkrobonja.com Common Sense Financial Podcast on YouTube Common Sense Financial Podcast on Spotify SkrobonjaFinancial.com SkrobonjaWealth.com BuildBanking.com Common Sense: YOUR Guide to Making Smart Choices with YOUR Money by Brian Skrobonja Generational Planning by Brian Skrobonja Retirement Planning: Have A Plan So You Can Live Your Life by Brian Skrobonja Investing involves risk, including the potential loss of principal. This is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual's situation. Securities offered only by duly registered individuals through Madison Avenue Securities, LLC. (MAS), Member FINRA &SIPC. Advisory services offered only by duly registered individuals through Skrobonja Wealth Management (SWM), a registered investment advisor. Tax services offered only through Skrobonja Tax Consulting. MAS does not offer Build Banking or tax advice. Skrobonja Financial Group, LLC, Skrobonja Wealth Management, LLC, Skrobonja Insurance Services, LLC, Skrobonja Tax Consulting, and Build Banking are not affiliated with MAS. Skrobonja Wealth Management, LLC is a registered investment adviser. Advisory services are only offered to clients or prospective clients where Skrobonja Wealth Management, LLC and its representatives are properly licensed or exempt from licensure. The firm is a registered investment adviser with the state of Missouri, and may only transact business with residents of those states, or residents of other states where otherwise legally permitted subject to exemption or exclusion from registration requirements. Registration with the United States Securities and Exchange Commission or any state securities authority does not imply a certain level of skill or training.

Discover the importance of key performance indicators in retirement planning beyond just investment performance. Dive into crucial metrics like passive income, tax efficiency, and cash flow ratio. Learn how to bridge gaps in your financial plan by focusing on banking capacity and horizontal asset allocation. Explore the misconception of solely relying on ROI and the necessity of a comprehensive approach to retirement planning.

Exploring the nuances of buying Certificates of Deposit (CDs) as investments in a rising interest rate environment, understanding the impact of inflation and interest rates on wealth creation, and delving into how government strategies influence the attractiveness of CDs. Discussing the importance of looking beyond CD rates, the role of the federal funds rate, and the influence of the Federal Open Market Committee.

Financial expert Brian Skrobonja discusses alternative investments and retirement strategies, highlighting the shift towards private investments, the importance of long-term vision, and the challenges of funding retirement in an era of extended lifespans. He explores the benefits of an endowment-like approach and the implications of the traditional 4% rule for retirement savings.

In this episode, we delve into the link between overall retirement quality and the confidence you have in your financial plan. We emphasize how a well-designed retirement strategy tailored to your needs, not solely reliant on market performance, is pivotal for boosting confidence and making your retirement plan a reality you can rely on. Addressing common fears, exploring emotional extremes, and understanding the evolving landscape of retirement planning, will help you discover the significance of income-focused strategies and a diversified asset approach in building confidence in your retirement plan. When it comes to retirement, your quality of life in these golden years is often predicated on the level of confidence you have regarding your situation. A poorly-designed retirement plan can often cause emotional confusion, which leaves you feeling insecure and lacking confidence. Confidence is typically at its peak when a plan is optimized and is designed around meeting the needs of the client and not relying entirely on market performance. Retirement confidence is in direct correlation with how well your plan is designed to manage your exposure to risk and its ability to fulfill cash flow requirements. A plan built on hope and optimism can lead to very emotional times when the market doesn't work out the way you'd hoped. Many client conversations relating to retirement are often centered around insecurities the client is working through. Common fears include running out of money before running out of life, market crashes, having a health crisis, missing opportunities, or simply making mistakes. There are typically two emotional extremes, no confidence or complete overconfidence. A lack of confidence leads to avoidance behavior and avoiding decisions, which often makes a person vulnerable to the very things they are afraid of. Overconfidence leads people to underestimate their vulnerabilities. Being skittish or practicing decision avoidance or fearing the idea of making a bad decision are all confidence killers, and the ultimate irony of this behavior is actually preventing the solution from being implemented, which can turn your fears into a reality. Confidence is about being able to rely on your retirement plan to do what you need it to do. If your retirement plan is anchored to the stock market, your confidence level relies entirely on the performance of the market. Most people's retirement plans involve a stock market portfolio they plan to liquidate over time, Social Security, and a pension, but that's really just the start. This paradigm seems to be rooted in watching our parents or grandparents work for decades in the same job and then retire with their pensions and Social Security benefits. However, circumstances have changed, and what worked back then isn't going to cut it now. Pensions and company-provided retirement plans have been on the decline since the 1980's. Baby Boomers started putting their money into retirement plans starting in the 90's, which caused a growing stock market. 2016 was the first year that Baby Boomers started taking out money from those accounts. Those who ran the markets up are now the same group that is putting selling pressure on the markets, but there are other influences as well: government spending and policy, Fed policy, pandemics, interest rates, inflation, and more. When you lack certainty in the market, algorithms and a 24/7 news cycle can exacerbate the situation. There are two fundamental things that can have a profound impact on your retirement confidence. First is solving for income using income products. The foundation of a retirement plan is to generate consistent income, and unfortunately, consistency is not synonymous with the stock market. Separating your assets between long-term growth in public investments and income-generating private and fixed assets is a crucial component of being confident in your overall retirement plan. Mentioned in this episode: BrianSkrobonja.com Common Sense Financial Podcast on YouTube Common Sense Financial Podcast on Spotify Common Sense: YOUR Guide to Making Smart Choices with YOUR Money by Brian Skrobonja Brian's article - 'Five Common Retirement Mistakes and How to Avoid Them' References for this episode: https://www.dol.gov/general/topic/retirement/erisa https://www.thestreet.com/personal-finance/baby-boomers-could-cause-market-crash-12117996 https://www.forbes.com/sites/lizfrazierpeck/2021/02/11/the-coronavirus-crash-of-2020-and-the-investing-lesson-it-taught-us/?sh=17701bd846cf https://www.marketwatch.com/story/u-s-stocks-would-be-much-lower-if-it-wasnt-for-excessive-government-spending-morgan-stanleys-mike-wilson-says-1b8e65d2 https://www.nasdaq.com/articles/what-does-the-fed-do-and-how-does-it-impact-the-stock-market https://thefga.org/blog/president-biden-is-wrong-about-esg-heres-why/?gclid=CjwKCAjwvfmoBhAwEiwAG2tqzIhc3F2QbmLEygcbkIg9eV7bhXUz3dzXhO1A_hTNE3hNsMbTug59txoCPcwQAvD_BwE https://centerpointsecurities.com/stock-market-algorithms/#:~:text=The%20main%20thing%20traders%20need,because%20you%20may%20lose%20fast. https://www.statista.com/statistics/191077/inflation-rate-in-the-usa-since-1990 https://www.bankrate.com/banking/cds/historical-cd-interest-rates Securities offered only by duly registered individuals through Madison Avenue Securities, LLC. (MAS), Member FINRA &SIPC. Advisory services offered only by duly registered individuals through Skrobonja Wealth Management (SWM), a registered investment advisor. Tax services offered only through Skrobonja Tax Consulting. MAS does not offer Build Banking or tax advice. Skrobonja Financial Group, LLC, Skrobonja Wealth Management, LLC, Skrobonja Insurance Services, LLC, Skrobonja Tax Consulting, and Build Banking are not affiliated with MAS. Skrobonja Wealth Management, LLC is a registered investment adviser. Advisory services are only offered to clients or prospective clients where Skrobonja Wealth Management, LLC and its representatives are properly licensed or exempt from licensure. The firm is a registered investment adviser with the state of Missouri, and may only transact business with residents of those states, or residents of other states where otherwise legally permitted subject to exemption or exclusion from registration requirements. Registration with the United States Securities and Exchange Commission or any state securities authority does not imply a certain level of skill or training.

The complexity of Social Security calculations can cause some confusion around when someone eligible should file and claim their benefit. There are a lot of variables to consider and acronyms to decipher that can make Social Security feel like a confusing hedge maze. Let's cut through some of the noise and clarify some of the most pressing questions around Social Security benefits and what questions you need to consider to determine what's best for you and your family. Social Security has many layers, and the concept of eligibility can be pretty complex. It's not always clear when and how someone should begin taking their benefits because being eligible doesn't necessarily mean you should turn that benefit on. Social Security benefits can be turned on as early as age 62. Each year the benefit is delayed, you receive what is called a delayed retirement credit or DRC. These DRCs guarantee an automatic 8% increase in your Social Security benefit every year you delay up to age 70. There is also your full retirement age. This is the age when you are eligible to receive the full benefit without any offset for having earned income. Earned income being income from employment, which is different from income received from investments, pensions or annuities. For those born in 1960, or later, your FRA is age 67. Benefits are calculated by the Social Security Administration by taking 35 years of earnings that are indexed for inflation. Any years you didn't work are counted as a zero in your average earnings calculation. These annual amounts are then totaled and divided by four and 20 months to arrive at the monthly figure known as your average indexed monthly earning. This number is different from your benefit amount. The SSA then applies a formula to that number which determines your primary insurance amount or PIA and this is your monthly Social Security benefit. If you choose to take your benefit before your FRA while employed, there's an offset that can significantly reduce the benefit if your income exceeds $21,240 in 2023. This reduction is $1 for every $2 of earned income over the limit. In the year you reach your FRA, the limit increases to $56,520 in 2023, with a benefit reduction of $1 for every $3 of earned income over the limit. After you've reached your FRA there's no earning limits and you receive the full benefit with no income offsets. Provisional income comes into play after your benefits are activated. Your provisional income is calculated by taking your adjusted gross income plus half of your Social Security benefit. If that total is less than $25,000, your Social Security benefit is not subject to federal tax. If it is above 25,000, but below 34,000, 50% of the benefit is taxed, and if it's above 34,000, 85% of the benefit is taxed. If you're a government employee, there's something called a Windfall Elimination Provision, or WEP. And there's also a Government Pension Offset, or GPO. There are three common conversations we have with clients when it comes to Social Security. The first thing is determining the breakeven point. One method for deciding when to take Social Security benefits involves calculating the breakeven point, this is the future point in time when the value of one option equals that of another. For example, if your FRA benefit is $2,000 a month, and $1,400 at age 62, there's a $600 a month difference. When compared to waiting the five years and taking the full amount, the breakeven point would be 11.6 years. Something else to keep in mind is that by taking a benefit early, you reduce the amount of spousal benefit made available since the benefit in and of itself has been reduced and this could be an important consideration. The second consideration relates to one's health and longevity. If you don't expect to live past that breakeven point, taking the benefit early might make more sense. From this perspective, it could be a win-win situation if they start receiving benefits early and they live longer than expected because the payments continue. We can't know our lifespan for certain, but if you're in poor health, taking benefits early might be a reasonable option. The third consideration involves a person's retirement income requirement. Many clients we work with see Social Security simply as a piece of the retirement income strategy, and aren't necessarily concerned with breakeven points as much as they are with maximizing their assets and the resources. Many clients opt to turn their Social Security benefits on instead of tapping into their assets in order to maintain growth. Using assets to generate income in retirement also comes with variables that are hard to predict, like the conditions of the stock market and economic policy. Social Security, in comparison, is stable and easy to predict. Figuring out your retirement income requires careful planning, which is why it's crucial to work with a professional that understands Social Security and its role in your retirement plan. Mentioned in this episode: BrianSkrobonja.com Common Sense Financial Podcast on YouTube Common Sense Financial Podcast on Spotify BrianSkrobonja.com/Resources - Free Resources To Help You Protect Your Financial Future Common Sense: YOUR Guide to Making Smart Choices with YOUR Money by Brian Skrobonja SSA.gov References for this episode: SSA.gov/benefits/retirement/planner/agereduction.html SSA.gov/benefits/retirement/planner/delayret.html SSA.gov/benefits/retirement/planner/agereduction.html SSA.gov/benefits/retirement/planner/whileworking.html SSA.gov/benefits/retirement/planner/whileworking.html SSA.gov/benefits/retirement/planner/taxes.html Securities offered only by duly registered individuals through Madison Avenue Securities, LLC. (MAS), Member FINRA & SIPC. Advisory services offered only by duly registered individuals through Skrobonja Wealth Management (SWM), a registered investment advisor. Tax services offered only through Skrobonja Tax Consulting. MAS does not offer Build Banking or tax advice. Skrobonja Financial Group, LLC, Skrobonja Wealth Management, LLC, Skrobonja Insurance Services, LLC, Skrobonja Tax Consulting, and Build Banking are not affiliated with MAS. The firm is a registered investment adviser with the state of Missouri, and may only transact business with residents of those states, or residents of other states where otherwise legally permitted subject to exemption or exclusion from registration requirements. Registration with the United States Securities and Exchange Commission or any state securities authority does not imply a certain level of skill or training. Advisory services are only offered to clients or prospective clients where Skrobonja Wealth Management, LLC and its representatives are properly licensed or exempt from licensure. This website is solely for informational purposes. Past performance is no guarantee of future returns. Investing involves risk and possible loss of principal capital. No advice may be rendered by Skrobonja Wealth Management, LLC unless a client service agreement is in place. Skrobonja Financial Group, LLC provides links for your convenience to websites produced by other providers of industry related material. Accessing websites through links directs you away from our website. Users who gain access to third party websites may be subject to the copyright and other restrictions on use imposed by those providers and assume responsibility and risk from use of those websites. Any references to protection, safety or lifetime income, generally refer to fixed insurance products, never securities or investments. 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