This Simple Strategy Can Save Retirees Thousands (or More) | Julia Lembcke

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People have after tax brokerage accounts, pre-tax accounts, maybe a little bit of a Roth account and the way that they withdraw those funds, the sequence with with which they withdraw the funds um has a huge impact on their total lifetime taxes. Also, once you hit uh 65 or even 63 with the Medicare income related means adjusted amount penalty, there starts to be like hidden taxes in retirement that you're not used to. Welcome to Thoughtful Money. I'm Thoughtful Money founder and your host, Adam Tagert. And I'm very excited for today's video. We're going to try something new today, folks. Something I've been wanting to do for a while. So, as regular viewers of this channel know, I produce five videos a week. Um, interviewing top experts on the markets and the economy, and we're largely reacting to what has just happened and trying to make sense of it. Um when I can I really also like to have discussions around the fundamentals and the best practices for wealth building because at the end of the day that's what this channel is for. Mission of thoughtful money is to help you increase your odds of funding your life goals and I want to be able to make sure that we impart you know again the best and most timehonored practices for doing so. So that's where today's guest comes into play. Uh today we're very fortunate to get to talk with Julia Lama. She is a certified financial planner and managing director at URS Advisory, which services high- netw worth clients. Um, Julia has a very successful YouTube channel of her own, where she does zero in on a lot of these best practices for wealth building, and we're hoping to inject a little bit of that here in Thoughtful Money. So, we're going to do this as a pilot. We're going to talk about uh a topic that uh has definitely proved very popular amongst her audience. I think you'll find it very relevant. And if you decide you'd like to see more content like this going forward, let me know in the comments section below and we'll try to put together some sort of regular rotation of that. But with all that laid this groundwork, Julia, thanks so much for joining us today. >> Adam, thank you so much for having me. >> Oh, it's a real pleasure. I'm really looking forward to today's discussion. Real quick before we get into the nuts and bolts um about the topic we're going to talk about, which folks is account withdrawal order. Um, and that might sound a little wonky, uh, but this is basically how to take withdrawals from from your, uh, funds that you've saved up for retirement as you enter retirement because it actually makes a big difference. And interestingly, Julie, if I'm if I followed your work correctly, the majority of people kind of do this backwards. True. >> They do. Very true. >> All right. So, we'll get into, you know, what what to avoid, what to do, right? uh and the mechanics of it all. But really quickly, Julia, can you just give us like a 30 secondond background uh about yourself and how you came to be such a public sort of personal finance wealth building guru? >> Yes, thank you. Um so I graduated in 2009 from the University of Florida. All of you know watching this channel that that was right in the middle of the great recession. There were really no jobs. So I had to work in a, you know, a sales commission job. And so I started doing Medicare planning for folks turning 65. Um and a you know as the years went on they started asking me more and more questions about their retirement accounts. You know back then 09 to 2011. People were retiring right around 65. Now everyone's retiring a lot earlier. It seems to be a newer trend. Um so I just sort of got fascinated with financial planning and uh started to get more certifications. I wanted to sort of stimulate my mind more. you know, Medicare is great, but it's it's a little bit boring. Uh, you know, with all due respect, so I was really fascinated with the financial planning side. I got my certified financial planning um degree in 2015 and I started an RA with my husband who I work with. Um, and you know, we actually had a client who has we have a client who has a very successful retirement travel YouTube channel. And so they inspired me uh to start my own because I have a little bit of a teaching style. And so I'm just very honored and and I feel very grateful to have the platform that I have now. It's just it just all sort of happened if you will. >> All right. Well, you're making a very big difference in the world, which is wonderful. You mentioned something. I'm just curious. Um you said there sort of a new trend of people retiring earlier, and this is just where my mind went. You tell me if this is accurate at all or not, but um you know coming out of the great recession, we had unprecedented intervention in the financial markets by our central planners, >> which largely >> has been fantastic for assets. And so I'm presuming that people basically just have a lot more money earlier in life than they did before largely due to this intervention. would do that. >> I absolutely agree. Yeah, I absolutely agree with that. I also feel like there's a lot more education out there. You know, YouTube being a huge resource, right? >> So, you know, people are sort of getting sick of doing jobs that they don't love and they want to get to retirement as quickly as possible. So, I think it's a definitely a combination of higher asset prices and more education, more information out there. >> Okay. All right. Well, look, there's probably similar to your channel, but twothirds of my audience is basically 50 and over. Um, so, you know, these are people who have been working um generally saved up a fair amount or on are on track for a good retirement. And then, of course, there's younger folks that are that are hoping to be able to retire well. So, they're getting in early, which is, I think, a very smart thing to do to try to educate themselves early in the process, make right decisions early on. So, I think a lot of what we're going to talk about today is going to be of great interest to them all. So, all right, let's start with this whole topic about withdrawal sequence. Um, what prompted you to to make your very popular video about this and why is it so important? >> That's a great question. So, withdrawal planning is sort of a niche specialty within retirement planning. It's very easy to find an adviser to invest your money, right? There's tons of them down the street, but >> tons that'll take it. Yep. >> Right. it's harder to find an adviser that specializes in retirement tax planning. And the more I started learning about tax and retirement, the more I realized, wow, you know, people have after tax brokerage accounts, pre-tax accounts, maybe a little bit of a Roth account. And the way that they withdraw those funds, the sequence with with which they withdraw the funds um has a huge impact on their total lifetime taxes. Also, once you hit uh 65 or even 63 with the Medicare income related means adjusted amount penalty, there starts to be like hidden taxes in retirement that you're not used to. Medicare Irma being one. Um net investment income tax and AMT always apply, but certainly because net investment income tax applies to investment income, it becomes a bigger issue once you're on a fixed income. So, I think that it's a topic that isn't talked about enough. And so I definitely wanted to shine light on the subject with the video. >> Okay. And presumably uh if you flight your your withdrawal sequence well, you end up being able to save on taxes and have more money left over day. That's why you want to care about this, right? >> Yes. All that good stuff. Bigger legacy, less lifetime taxes, more flexibility in spending, all of it. >> All right. Um I mean, should we just roll up our sleeves and dive in? like what what in your mind is the recommended withdrawal sequence? >> Well, so there's, you know, no kind of right answer to that. It completely depends on your situation. Okay. So, everybody has a different puzzle, as I like to call it. Um, what I see most of the time is that the pre-tax accounts, whether they're 401ks or IRA, self-employment, um, retirement accounts, that they're, uh, the dominating, uh, share of the tax type, right? So maybe somebody has 60 to 70% of their wealth in the pre-tax accounts, maybe 20% in after tax, and maybe 10 or less percent in Roth accounts. Sometimes, unfortunately, I see that the pre-tax is 90% or more of a person's net worth. And that's going to create a big issue, especially if you're maybe a higher spender and especially when RMDs are due. So the right withdrawal sequence completely depends on your uh age, your spending, your income, your investment, you know, tax profile and your goals. So it totally depends. >> It totally depends. Okay. So why don't we come up with a couple of common cases and maybe you can kind of walk us through, okay, if you're someone who's kind of like this, this is how you would think about it. And of course, >> none of what Julia is saying here, folks, is personal financial advice. This is why you want to work with a planner who is skilled in this because they can look at your exact, you know, unique situation and come up with the right sequence for you. But on a generalized basis, let's let's try some of these case studies. >> Yeah, that's a great great question. So, let's say that somebody has, you know, 90% pre-tax and 10% after tax and and very little to no Roth. In this scenario, if you're retiring early, you're going to want to do what you can. early I mean late 50s early 60s you're going to want to convert maybe a little bit okay maybe do a little bit of Roth converting between late 50s and you know depending on how much you spend age 63 because that's when the Medicare Irma look back starts so you're going to want to convert a little bit but the reality is >> you don't have enough cash on the side to do significant conversions when you're doing a Roth conversion you're taking pre-tax money and you're moving it over to the taxfree bucket and you have to >> So taking money from like my corporate 401k and putting it into a Roth IRA. >> Exactly. And when you do that, you have to pay ordinary income tax on every dollar amount that you know, every dollar that you convert, >> right? Because you've never paid tax on that on that money. >> So you you know, ideally you have cash outside of that to pay your living expenses, to pay the tax so that you can convert 100% of that pre-tax money. So, if you don't have cash and let's say you're converting $100,000 and you're in the 22% tax bracket, instead of withholding 22% and only being able to, you know, put in 707 78% into the Roth, right, 77 $78,000, you can actually take your outside cash to pay the tax and pay the living expenses so that the full $100,000 conversion can grow taxfree over here. >> Okay? So, it's a little bit difficult to do significant conversions when the lion share of your assets are in pre-tax. I don't want to, you know, say give up hope on distribution planning, but in terms of Roth conversions, that is the reality. Now, there are some exceptions to that. Let's say that we have a great recession market crash, right? Let's say the market loses 50% of its value. Mhm. >> You may because of the market being down because of you being able to convert a larger percentage share with that low value, you may want to convert some and just withhold taxes if you don't have the cash on the outside because of that great opportunity to grow your money taxfree from a market low, right? That's going to be much more impactful. >> Um, also there are other things you can do. You can fill up your, you know, 12 or 22% marginal tax bracket with those pre-tax withdrawals. Now, while taxes are historically low, because they are historically low, so we want to take advantage of that. So, instead of them draining their 10% brokerage account first and then moving to their IRA, they can actually start to spend down their IRA while their income is low before they file for social security or take required minimum distributions. >> Hm. Really interesting. Okay, so a couple of things. First off, um, we're talking about doing Roth conversions and, uh, I don't want to presume here, but I'm guessing you probably, all things being equal, prefer assets in a the percentage of your assets in a Roth account being as large as possible because you get to withdraw those taxree later on. And there's there's nothing better than taxree, >> right? There is nothing better than taxree. But I will say that brokerage accounts, after tax brokerage accounts are more flexible and they allow you to do Roth conversions at retirement when your income is lower than it ever has been. >> Right? So I I love after tax brokerage and of course I mean Roth tax wise are the best account, but brokerages are the most flexible. You can withdraw from them any time and they allow you to do Roth conversions when it makes the most sense, which is like, you know, if you're working and you're in the 32 or 37% tax bracket, it may not make sense to do Roths, right? You might not want to do conversions when you're in the highest bracket, but once you retire and now you're in the 10 or 12 or 22% bracket, now you have the cash on the side in the brokerage to actually pay your living expenses and pay the tax on those conversions. >> Right. Right. And so, um, okay, lots lots to walk through here and and help me keep it just straight and relatable for people. But let's say I'm in my 50s, um, and I'm thinking about retiring, not too far from here. um presumably and if I wanted if Roth conversions is something I'm trying to kind of do and maximize um the benefits of uh let's say I'm I'm I'm in the the 20% tax bracket. Um, does it make sense for me to think about converting some for my um my pre-tax retirement accounts and and convert that into my Roth um up and but not quite until the next tax bracket. So, I'm still working, but as I'm approaching retirement, I'm I'm I'm slipping some of this stuff into the the the Roth without increasing my overall tax rate. >> Yeah, I love that question. That is an excellent question and I would say that that sounds like a great idea. In other words, to kind of optimize your current tax bracket, right? Do just enough to not to not breach that tax bracket. >> But I do think it's important to look at what your future tax rates are likely to be based on your goals, right? So, right now, if you're in the 20% tax bracket, but you're going to be in the 12% tax bracket upon retirement in one or two years, >> wait. >> Yeah. It makes sense to wait um to do those conversions in most cases. Okay. And so is this all just a math exercise in terms of like when to convert? Um do you do like would you sit down with a client and literally build a spreadsheet or maybe you already have a software program that does this but basically just looks at where they are where they expect to expect to be and then says okay great and this year you should withdraw convert this much and do it this much this year. Is that how it works? >> That's exactly how it works Adam. um it's it's softwarebased. Of course, you know, there are, you know, flexibility issues within software that I have to then model in my tax software sometimes. Um but for the most part, we're looking at tax brackets and trying to determine how can we take advantage of low tax brackets when that income drops upon retirement to make sure that they save off as much Medicare Irma, net investment income tax, alternative minimum tax, not to mention hedging against possibly higher future tax rates. >> Yeah. Um Okay. And to your point, you know, as much as we all hate paying taxes and we've just made it through tax season and people are probably still smarting from that, um, you are saying, look, folks, it could be a lot worse and it might be a lot worse in the future. Um, no guarantees, but we should just be aware that we are we are in a historically low tax environment. Um, and this administration is is more in favor of that than probably many previous ones. That doesn't mean that this administration is going to continue after the 2828 election. we might have a very different administration and tax rate could go in the other direction. Again, we don't know, but just be aware that you're it's probably not going to get too much better than it is right now. >> That's my opinion, right? And of course, anything could happen. I think the issue with tax planning with most people is that I I like to think of it as like small ball, right? They're trying to minimize their taxes in the current year. And unfortunately, CPAs are of that same mindset of like, okay, how can I be the hero for my client and save them, you know, a couple thousand dollars in taxes this year, not even thinking about what retirement looks like 10, 15, 20 years down the line. So, you want to make sure that you're looking at taxes from a lifetime perspective within reason, right? That doesn't mean that you should convert everything or go up to the 32% bracket for conversions, but it does mean that you should look at the facts of your projections and have enough information to make an educated decision on whether or not saving $2,000 this year is more important than saving 10, 15. I mean, we save our clients hundreds of thousands of dollars in lifetime tax through these strategies. >> Okay. Um, and I'm sure people's ears just picked up and saying, I would love to save hundreds of thousands of dollars in taxes. Um, all right. Let me let me flip the script on you for a second. So, let's take somebody who's in the top tax bracket. So, you know, very successful professional. We have a number of them watching this channel. Um, they're probably dutifully putting their money in as much as they can. Um, they they they probably have long not been able to contribute directly to a Roth um just because they're above the income limit. Um, but they're, you know, probably have a lot of money in pre-tax as well as after tax um, accounts and they'd probably love to to do Roth conversions, but they've got the problem of, well, it's going to get taxed at the maximum tax rate here. How would you help that person think through this? >> Great question. So, if you're in the one of the top tax brackets and you're, you know, deferring all of your 401k, putting that all into pre-tax, um, I would think of a few different, uh, questions for you. The first question is, is your health insurance considered a high deductible health plan? And for 2026, I believe the family deductible is 3,200 and the individual is 1,600. Don't quote me on that, but it's something around there. >> If you have that level of deductible or higher, you should be maxing out a health savings account, which is an above the line deduction. So, let's say that you have a family insurance uh high deductible plan and you're going to put in the maximum of I think it's 9500 this year for 2026. >> So, if you can get an above the line deduction for 9500 and you have the option within your 401k to do a Roth 401k as opposed to a traditional 401k, which by the way, >> Roth 401ks do not have income limits. So, you can make millions of dollars a year and still contribute to a Roth 401k. But let's say that you you get that deduction, the 9500. Well, then you can split your contributions. You can put 9500 into the Roth, you know, and the other 22,000 or whatever that is into the pre-tax so that you're getting sort of a little bit of each. You're hedging your bets. Okay? So, that's one option to not, you know, pay more in current taxes. >> Another option is don't rule out a backdoor Roth IRA. So, you know how there are income limits to directly contribute to a Roth IRA and they're not that high, right, for a high earnner. >> So, there is something called a backdoor Roth and there are rules around it. Basically, what that is is it's a loophole where you can contribute to a traditional IRA and the very next day convert the funds and invest in a Roth. Okay? You can only do this though if you don't have outside IRA accounts. So that means that if you have a traditional IRA outside of your employer plan or any other plan, you cannot do a backdoor Roth IRA in most cases if it's any substantial amount of money due to what's called the PRTA rule. I won't get into that. It's not important. The point is is that if you can roll your traditional IAS into your current 401k, your employer plan, then you can do a backdoor Roth IRA every year. Okay? So, let's say that you're 50 and you can put in, you know, $8,600 is the the Roth IRA and regular IRA limit this year. If you can do $8,600 a year for the next 10 years, right? That's over $100,000 going into a taxfree account. You're not paying any more in tax and that's growing taxree for the rest of your retirement. Not to mention the fact that let's say that the husband or the wife, whoever's the bread winner, is working and they have a stay-at-home spouse. you can actually fund it for them too, provided they do not have an outside IRA account. So, the moral of the story is when you're working, move all of your old 401ks into your new 401ks. Don't roll it out to an IRA if you're a high earnner because it's going to prevent you from doing the backdoor Roth. >> Got it. And um that backdoor Roth you can literally do every year. Correct. >> Every year. Well, every year that you have earned income, right? So, once you're retired, you can no longer do that. But just FYI, you can contribute to a health savings account even if you're retired up until Medicare age. So some people think if they're not working anymore, I can't do an HSA. That's not true. >> Okay. Um and let's let's just take a second and explain the health savings account for people. Um I think a lot of people probably have heard of it but haven't really worked with it before. So essentially, is it a pre-tax account that you put money into that um as long as it's spent for health related means? Um you're spending it's not taxed. Um so you can pay for your medical bills and stuff like that uh through it. Um a am I correct so far? >> So do you want me to just explain it? >> Just explain it. >> Okay. So, a health savings account is actually a tax-free account. It is the only tripleexempt tax account that exists. It's one of my very favorite accounts. >> So, what you do is when you contribute the money into the account, you get a deduction, right? Y >> and you invest the funds and it grows taxree for health expenses. So, it's a Roth IRA on steroids, right? You don't get and >> when you spend it, it's taxree. You're not you're not paying tax. When you spend it on qualified medical expenses, it is taxree. >> Okay. Once you reach the age of 65, if you have to pull money out for any other reason than a qualified health expense, there is no penalty and it acts like a traditional IRA. So you have to pay ordinary income tax on any withdrawals. All right? So it is very flexible in that you can use it taxree for health, which is the ideal scenario, right? And there's plenty of things to spend the money on. Medicare doesn't cover dental, vision, uh you know, places that don't take insurance, right? There's plenty of medical expenses in retirement that Medicare doesn't cover, but if you needed the money for any other reason once you're 65 years old, you can do that without penalty. >> Great. So, I think the fear, and it's probably not a super rational one that people have, is well, all right, I'm putting money into this health savings account, but what if I don't spend it, right? What if I what if I am lucky and I don't have a lot of health expenses? You know, have I lost out by putting all this money into quot an account for health? And you're saying no because by the time you're after 65, you can take it out for anything and it kind of operates like a >> like all of your other pre-tax accounts, >> right? >> Yes, that's exactly what I'm saying. >> Yeah. So, fantastic. And of course, and it's reducing your taxable income along the way because >> Right. while you're contributing. >> Yeah. Exactly. All right. So, kind of like almost everybody should have an HSA uh if it's available to them. Correct. >> That's my opinion. unless you have serious medical issues with which you need a, you know, a higher level of insurance. But other than that, yes, everybody should be on a high deductible plan and max funding an HSA. And one of the tricks that I like is that you don't actually touch it while you're working. You let it grow taxree for as long as possible and you use it for retirement. >> Okay? >> As opposed to using it every year, you know, putting money in and then, you know, reimbursing yourself. Don't do that. Let let that be an itemized deduction or you know something while you're still working and have the income. Let those investments grow taxree for as long as possible. >> Okay. So again, just to be super specific, you got a dental bill, ideally pay that yourself. Don't touch the HSA because you keep your value of the HA if you have the ability to. >> Yes. >> Yes. >> Okay. Um fantastic. at the risk of derailing derailing this and I I I I'm just going to ask this question for to plant the seed of a future conversation we might want to have. >> Um and I'm a little bit personally invested in this question. Um so as a self-employed uh person um you know I have I feltful money runs inside of an LLC. Um, I have created a pension plan for the company which allows me to put a lot more away. Yes. >> Uh, on a on a um well, there's a couple different option or there's a couple different components to it. Um, one is a Roth 401k, one is the uh defined pension plan. Um, one's a profit share plan. Um, but basically it it allows me to put a lot more away in a retirement plan than I would be able to do with just sort of a traditional SEP IRA. Uh, and of course at some point in the future if I want to do a Roth conversion off of that, I should be able to at some point too. Uh, is this I think this is something that a lot of sort of small business people might want to learn more about. A, do you like this vehicle? And B, are you knowledgeable enough on it that if there's enough interest, we could maybe do a video just on that vehicle itself. Absolutely. Yeah, I'd love to do that. >> Okay. Um All right, great. Well, I'll I'll mark that down and if there's enough interest on the comment section, folks, we'll prioritize that one in the future. Um Okay, so uh we've talked about um the general schedule. We've talked about um obviously the attractiveness of of trying to get as much into the Roth as makes sense for you. Tell me about how people screw this up, right? You say most people end up doing this backwards. So what do most people actually do? >> Right? So most people follow what I call conventional wisdom and that's where they pull from their cash or after tax brokerage first. They drain that >> and then they finally get to their IRA when that's done. Right? So I call pre-tax accounts tax bombs. It's a little dramatic, but you know, so am I a little bit. And I just think of them as creating big tax problems down the road. So, when you're in a lower bracket, when you've just retired, instead of draining your cash, you're supposed to exploit those lower brackets, right? >> Because if you're spending a couple hundred,000 a year and you have to start pulling from your IRA at 73 or 75, depending on your year of birth, if all you have left is pre-tax money, you're so, right? You're going to be above the Medicare Irma limit. you're going to be in the 22 or 24% tax bracket for, you know, many years and then going up to the 32 or 35 or 37% tax bracket. So, you really sort of uh put yourself with your back against the wall a little bit and lose all flexibility instead of taking advantage of these historically low rates and either spending down uh your pre-tax money to reduce future required minimum distributions at unknown tax rates or in doing Roth conversions or a combination of both. Okay. And and I guess that's where the the science really comes in here, right? Is to determine, hey, G, given what you have, maybe the right thing to do is a blend of your pre-tax and after tax savings. And exactly the software, the software helps you figure out what that exact blend is. >> Exactly. >> Okay. All right. Um >> Okay. Well, so I I think kind of the the key takeaway of this folks is, you know, be mindful of how you are amassing your wealth right now. What type of vehicles is it in? Um are you doing what you can to try to get as much into the Roth as possible and leverage um vehicles like the HSA? And then as you start to look towards your retirement, have a sense for what you think your income levels are going to be in those retirement years and um come up with the right sequence to fit that well. And and even as you're approaching those retirement years, as Julie and I talked about earlier, you know, you may want to use strategies where you're doing some converting to Roth without triggering the next uh tax bracket. And so it just sounds like there's just a, you know, we should all get comfortable with spreadsheets here and just run the numbers. >> Exactly. Yep. You have to know what you're going to spend and you have to be able to project your future tax brackets in order to make the best decision. >> Okay. Um I want to I want to switch gears here in just a second real quick. Um is there anything else to say about this topic of the account withdrawal order that I haven't thought to ask you about yet? >> I don't think so. But for the younger viewers watching, I'd like for you to start diversifying your tax landscape, right? Start putting into Roth 401ks where you can, brokerage accounts. Don't just focus on those pre-tax retirement accounts. Think about having more flexibility when you finally get to enjoy what you've worked so hard for. >> Okay, let me >> That's my PSA. >> Let me ask a younger person's question here, which is all right, Julia. Well, look, I just I work for company X and they have a 401k or whatever is they offer to me and I I just do that. Am I just limited to that or what else should I be thinking about? >> Right? That's a great question. So, a lot of people think that they're limited to whatever their employer offers, right? It's it's a natural sort of assumption. However, you can certainly do a backdoor Roth IRA if you're a high earnner without another traditional IRA out there. >> Or if you're a low earner, you can just create a Roth IRA. That's right. And your money should go there first, right? >> Um yes, you should. As long as you have an emergency fund, right? 3 to six months of living expenses in cash. Absolutely. It should go to the Roth first. Let me give you an order. So, first, if you have a Roth 401k through work, you should be doing that, right? Because you might get a match. Okay. So, that's better than the Roth IRA because you you might be getting a match. >> Yeah. >> Second is um HSA, right? If you're eligible, do the HSA because it's going to reduce your current taxes and your future taxes. It's a magical account. >> Third, the backdoor Roth IRA. And fourth, an after tax brokerage account. So ideally you're getting say 70% of your money into Ross and 30% into that after tax brokerage. >> Okay. Fantastic. Um and if you're if you're able to get a Roth 401k through work, are you as an individual also able just to open a traditional Roth IRA or is that Roth 401k? >> Absolutely. You can have an outside Roth IRA. You can start it at Schwab or Fidelity or Vanguard and just max fund that every year and invest it. >> Okay, great. Uh, all right. So, um, just kicking up to a high level here. Um, and and again, I I I hope folks are finding value in all this and if so, we'll have you on again hopefully number of times as a regular in the future. um what are just at a high level with retirement besides maybe getting this account withdrawal sequence order backwards like what are the just what are some of the most common errors you see people making that sort of sabotage their retirement prospects? >> Yeah, that's a great question. So I would say that I want to talk about spending first. Um spending is a huge driver of success or failure in retirement. If you're spending too much, then you have, of course, a higher chance of running out of money, right? Especially if we have market downturns, which is why we run the stress test for that. But there's also the risk of spending too little, right? Where you're leaving where maybe you say, you know, yeah, I'd like for my kids to get what's left, you know, but I'm not planning on this massive legacy. Well, if you're underspending, you're going to leave multiple millions of dollars to those kids or, you know, and if that's your prerogative, that's great, right? That makes sense. it's it's you know you're reaching your goals, but for most of my clients that's not the primary goal. Okay? But they're so nervous to spend you know what they actually can can spend prudently. They're trying to underspend and they're still in that mindset of save save, >> right? >> And they're not able to switch over to that withdrawal phase, that cracking open of the nest egg very easily. Okay. >> And I'm sorry, sorry to interrupt, but I just want you to include this in your answer. Like what's wrong about that? I is it that they just don't get to live life to the fullest because they're being too conservative or their actual financial >> in my thing is why are you going to have financial anxiety when there's no reason for it? Why are we taking on anxiety that that is not based in reality? Right? If you have plenty of money to reach your goals, to leave your kids enough money, to pay for long-term care, to donate to charity, why are we stressing about spending a prudent amount? Why are we trying to spend less and restrict ourselves and worry worry worry? That that's not helpful. And let me say this too because my mother is like this. She's very >> she was head of household in terms of finances and she saved and invested and she was always super tight with her spending. And um you know her transition to spending it's still a struggle two years three years into retirement. She still struggles with it. And the reason for that is because these sorts of people don't get a lot of joy through spending, right? That's not what makes them happy. Okay. So, there is a certain degree of that. >> Your mom sounds a lot like me, just FYI. >> Yeah. She's from that generation, right? She grew up poor and you know, they didn't have money and so she wants to hang on to every last bit of it even though she has more than enough, right? And then some. Um, so I realize that I mean these people are not going to just start, you know, going gang busters with their spending, but certainly you don't need to have so much anxiety and angst around your spending. You should be able to enjoy that money, which was the whole reason you saved it, >> right? We can't leave with it. So enjoy what you can within reason. >> All right. Great. And I know you have other answers to my my main question there. Let me just squeeze a few related to this in. Um, some people think in retirement you want to burn through all your assets by the end. Um, so that you can qualify for, you know, for example, so you can qualify for things like um, >> Medicaid, >> Medicaid and whatnot when it comes to your last years and the hospital bills are crazy and all that type of stuff. Um, do you have an opinion one way or the other on that strategy? Well, you know, I'm not an estate planning attorney, but I know enough to answer the question. And basically, you don't know when you're going to need care. Okay. So, that whole mindset operates on you having some sort of control over when you end up needing long-term care, right? Which >> the danger is is you run out and you're still healthy for 10 more years. >> Exactly. And then where's your money? Right. The government doesn't care if you're still healthy. Okay. So, there's there's one problem with that. Number two is, you know, going on if you're married, right? And let's say one spouse is healthy, one spouse isn't. To qualify one spouse to go on to Medicaid means that that sur that you know healthy spouse has to let go of some assets, right, that they may not be ready to let go of. >> Okay. Yeah. >> So, there's that. You know, if you're single, well, gosh, it's a whole different story. If that can work out, that's ideal, right? You spent your money on fun stuff and then you get to spend the government's money on the unfunded stuff. That's that's perfect. >> As long as you have family somewhere that can help you if you need help. But yes. >> Right. So, yeah, an advocate, somebody to take you to the attorney, all that. So that's not really I mean I wouldn't call that a strategy. That's more like hopebased. >> Okay. >> Um I you know and also there are a lot of of um sort of legal instruments that you can use to protect some assets from that Medicaid um you know threshold. But that's also expensive too, right? You have to pay for those legal instruments. So there's a lot to say about that. I don't want to get too in the weeds on it, but I wouldn't call that a strategy. >> Okay. Um great. Great. There's exactly the type of answer I was looking for. Um, kind of on the other end, and I'm sorry I'm ping ponging all around here, but it is tied to what you said. So, let's say you're one of those people who is, you know, you've saved up a lot and your intent is to not burn through all that much of it so you can pass a big chunk onto your your kids. Do you have an opinion on the dangers of giving too much to your kids? >> Yeah, absolutely. That's a great question. And I mean, you know, there's certainly uh our generation, especially if they're, you know, not working or maybe they're just a big spender and they're unrealistic. You definitely don't want to give those individuals a lump sum of money to blow, right? That money you worked hard for and you want it to go to good use. >> So, the best recommendation I can make in this uh case is to get a revocable living trust where your money can funnel into at your death, which is paid out per your stipulations that you wrote into that trust. So whether that's health maintenance, um you know, education, things like that, you can basically draft a trust to do whatever you'd like it to do, right? It allows you to control your money from the grave, so to speak. So that's my advice. >> All right. And so basically, you're saying you're that that revocable trust will let you set it uh put conditions, correct allocated to your heirs, and you can put incentives in there like, well, you got to get a college education or be working or whatever. Yeah. Okay. >> Right. >> All right. Great. Um, love it. All right. So, um, I I think you you mentioned one of the common mistakes and then I took us down all these other side questions. >> Oh, yeah. So, the other the other right the other mistake with spending is spending too much. Right. So, I I find that I either have one of two clients. I have the first one probably 70% of the time the underspender and then 30% of the time I run into the overspender, right? So, let let's say they're earning, you know, seven figures, right? And they're used to spending five to 700 to a million dollars a year. Okay. >> Mhm. >> Most of those folks have not quite saved enough to, you know, get an a million dollar income in retirement. >> So, they have to either work longer, right, to save more or they have to spend less. Okay? So, that's just to say that spending is again the driver of success or failure in most cases because the stock market market is going to do what it's going to do, right? We're all invested in the same stuff, right? So, what we can control is our spending. >> Mhm. Got it. Um and you know presumably there are things that we can do while the income is coming in um to reduce our cost footprint in the future. Like a good example would be you pay off your mortgage, >> right? >> So that you don't have a mortgage payment. Um so I I'm imagining you've got some uh you know definitely some advice about what to do there. But I'm also curious. So when people retire, I mean that's kind of the mindset is that's the start of the golden years, right? That's where we get to travel the world and do all the things that we we wish we had. How often do you see people kind of getting into trouble spending on that side where maybe maybe they were pretty good at budgeting while they were planning for everything, but then once they actually get a chance to just kind of enjoy themselves, they they kind of party a little too hard, if you will. >> Yeah, that's a great question. So, you know, I will say that when we run a plan, we ask them for their current expenses and then their projected retirement expenses, right? And I always tell them, you know, do expect to spend 10 to 15 to 20% more once you're retired because you're no longer working full-time. You have a lot more time. And I don't know about you, Adam, but every time I leave my house, I spend money, right? Everything is expensive. >> So, I asked them, you know, to do that exercise. And many times it it turns out that they're spending a lot more than they anticipated, right? they're calling saying, "Hey, we need more than that, you know, monthly stipen that that is sent to us uh from Schwab." So, what what I do is with our clients that meet a certain minimum, we meet twice a year and we go over their guardrail report. And their guardrail report gives us exact spending parameters, the max possible spend to keep them on track to reach their goals, you know, not run out of money, leave a legacy, whatever those goals are. And so, I do have conversations where I am the bad guy, where I'm like, "Guys, you have to rein it in. you know, this is it's just becoming too much or you're going to have to, you know, spend less next year, right? Whatever you decide to do, >> you have to spend less, right? One way or another. So, because we keep such a close eye on our clients, we can kind of we save off crisises, right? Um, and just sort of keep them in line and remind them that they're no longer pulling in a paycheck and here's what you can do. >> Okay. Um, all right. And this this may be a self-s serving question for you, but you know what I what I'm definitely getting from you is you should look at your financial advisor, especially entering retirement, maybe even while you're still in it as more like a therapist relationship versus an accountant relationship. In other words, most people see their account talk to their accountant once a year, right? Let's just chat. You tell me what I need to do and great, I'll see you in a year from now. Whereas what you're doing is not only helping them build a plan or a strategy, but then you're helping them execute it and you're checking in with them to make sure that everybody's staying in the right parameters and >> curveballs come up, you adjust the plan for that. So am I largely correct in that assumption? >> Absolutely correct. Yeah. I mean, money is very psychological. It's very emotional. And you know, your CPA is not giving you spending guidance, right? They're not giving you investment guidance. They're they're giving you tax guidance, and that's once a year. A financial planner should be that sort of coach or, you know, person that you bounce ideas off of and check through things twice with to make sure that you're on the right track. >> Okay. And it's interesting because I don't know if everybody really thinks they can have that kind of relationship with an adviser. Oh, I'll be bothering them or, you know, whatever. But but that's really what a a good financial adviser is there for, right? Is almost a member of the family. >> Yes, it should be a member of the family. And you know, you you have to also kind of think about how these advisers are being compensated. You know, in our firm, we require an upfront one-time planning fee and then we have our management fee through Schwab, which is very competitive. But that upfront fee covers the thoroughess of the plan. And it also, you know, kind of allows me to feel like we're compensated enough to where we can spend that extra time with the client that other adviserss don't spend. So sometimes adviserss don't offer that because they're truly, you know, they don't feel that they're being fairly compensated. So, you know, everybody needs to earn what they think they deserve and be compensated for their time. And so, you want to find somebody that takes their job seriously, that believes in their fee structure, that believes in the power of maintaining a financial plan. And then you'll have a better, you know, you'll have an easier time uh achieving that, >> right? And and this is why I I like financial advisors and as as our regular viewers, Julia know, you know, Stole Money's got relationships with several um I I I like the asset under management um structure because it puts the incentive in the advisor's shoulders to grow the assets. >> Exactly. Exactly. So you want to it's you know if it's if it's an hourly rate Yeah. Well, then the less hours you can devote to a client, the more profitable that client is. That works against the client's interest. So, to your point, getting the incentives right with that relationship, super important. >> Um, sorry, just jumping back to our saving to a little too much uh topic. Um, I just want to give you a chance to comment on any thoughts you have on um, you know, when to save for retirement versus when to deal with an immediate uh, or important life expense. And so, you know, obviously if you're going to lose your house at the end of the month if you don't make rent or your mortgage payment, you got to prioritize that first. But I think a real common one that people who are saving for retirement face is things like child's education, >> right? And understandably, I think people feel like, well, gosh, I love my child. I've really got to help them out here in life. I don't want them to graduate saddled with student loans. let me basically steal from funds that I would normally be putting in retirement and giving it to my kids. And I I say this because I' I've seen it happen in real life. Um what can often happen with that is that the parent doesn't put enough away for retirement, runs out of money, and then becomes a financial burden on their children. Uh where >> which defeats the purpose >> which defeats the whole purpose. And I think if everybody was given a chance to Monday morning quarterback it, they would have said, "Oh, much better for the kid to graduate with some student loans. He's young. he can pay that off in time. You know, it'll probably make him more studious and serious about what he's going to study and whether that's marketable and whatnot. And everybody would be long-term better had the parent actually save for retirement. So, curious to hear your thoughts both on that specific example, sounds like maybe we're like-minded, but clarify if not, but also are there any other examples like that of of people making kind of maybe a a a decision that makes sense from the heart, but but really doesn't work in their long-term best interests? >> Right. Yeah, that's a those are great questions. So, I'll start with the college question, the education question, and I'll take a a page from my parents. My parents are um they believe in the value of hard work. You know, when I graduated college, there were no jobs, right? And they said I said, "Oh, you know, poor me. There's no jobs that I, you know, that are interesting to me." And they said, "We don't care. You can live with us for one year if you have a job and then you're out. Like, figure it out." You know, which is how I started selling Medicare. That wasn't what I dreamed about doing, right? And when it came to college, they did the 529. I live in Florida and I went to the University of Florida. So they did the 529 like college credit plan and I had, you know, a certain number of credits every year. And by the way, they're both doctors, so they have they had money, okay? They could have they could have helped me go to private school. They could have helped me pay for more things in college, but instead they said, "Here's the money we have for you. Anything else, you're gonna have to figure that out on your own." Right? Right? So, I had to work through college and you know, I don't they're very generous. They're great parents and I love them for it. But that was their mindset. That's how they were treated and they felt that it gave them a leg up in terms of hard work, ethics, success, all of that good stuff. >> So, I think that a lot of parents today get carried away with making their children happy all the time. Oh, you want to go to this private school even though you could go to a public university and we could save, you know, hundreds of thousands of dollars. Okay. You know, I won't put in my 401k and I'll pay for that. That's just unwise, right? I mean, that's just not smart. Okay, so at the end of the day, this is a math equation. Like like we were talking about earlier, you only have a finite amount of assets and saving power in years to save. So, if you're going to, you know, grant all of your children's wishes, however unrealistic they are, then you're going to find yourself in trouble by the time that you reach retirement. In Florida, we had a bright future scholarship, so I had to maintain a certain GPA. I had to volunteer a certain number of hours. And I had a scholarship on top of the 529 plan because my parents said, "If you want to have any spending money, you're going to need to do that, right? You're going to need to have you're going to need to, you know, maintain that GPA and get this scholarship." Every state has a different program, right? So, >> don't be so quick to want to send your child to a private university because they think it's cool or because you want to tell people that you sent your kid to a private university. It's not cool when you're sitting at retirement underfunded. So that's my soapbox speech for today. >> Okay. And I would just add to that, by the way, I I like your parents very much. And I think I'm I'm very much cut from the same cloth. And I have daughters that um one of which is now through college and one is in college and they're getting very similar treatment. >> Um >> Oh, congrats. But but in addition to just sort of the math, right, which we just talked about there, but you save hundreds of thousands that otherwise, you know, would would go into or that go towards retirement that could be I don't want to say blown on on education. Education is very important, but right >> um uh think of all the personal development that you know the child goes through. >> Exactly. Character building. >> Well, exactly. And just think about had they paid for everything for you and then you graduated into the Great Recession. I'm going to guess you would have had a much harder time. I'm sure it wasn't easy finding, you know, the job you finally did, but I'm sure it would have been much harder, much more overwhelming if you hadn't already built up all that ability to deal with adversity and be your own champion and all that type of stuff. >> Absolutely. I mean, I was lucky enough to already love sales, have internships where I succeeded in sales, and I'm just not a I'm not a shy wallflower type of girl. So, I was very lucky to have that. And you know, I had friends that had that experience you were just talking about where their parents covered everything and they sat without a job, you know, living at their parents house for years. And that's just not I don't know. I don't think anybody wants to really raise a child with that mindset. So, aside from just the money, as you said, it's character building. It's personal development of the child. >> Yeah. Yeah. I mean, in my opinion, it is it is an investing style that um yields a much higher return um on your child and their life, you know, over the the course of their life. So, anyways, I'll get >> your kids not your friend, you know, they're your child and you're raising them to be an adult. So, it's okay to disappoint them sometimes. >> Okay. Um you you just to go back to the original question I asked that I I keep asking you to kind of go these side quests on with me. Uh, but of common mistakes that people make at retirement, you probably have a few others. I want to ask you about this specific one though, which is um maybe you do a good job of of of saving a bunch for retirement. Um, but they may be misallocated. Um, and what I mean by that is right now I believe retirement accounts have the highest percent exposure to equities, right, than they ever have. Yes. Um, so how big of an issue is this? >> So having majority equity upon retirement is a huge issue. And I say that because of the sequence of returns risk. So the sequence of returns risk has to do with the fact that while you're accumulating and growing money and not touching your accounts, it doesn't matter what order the stock market returns in, right? You could lose a whole bunch at first, you could gain a bunch at the end. At the end of the day, it's multiplication. It's the same number. But when you start to withdraw from retirement accounts and you lose a bunch of money early in retirement, your chances of running out of money are exponentially higher. >> So you need to make sure that upon retirement, you're bucketing your portfolio. That means fixing 3 to 5 to 7 years depending on your risk tolerance and ability of portfolio withdrawals and basically cash equivalents, ultrashort-term bonds. Making sure that you don't have to draw from your stock portfolio for at least 3 to 5 years in case we do have another crash, which at some point we will of course, right? those are cyclical. >> Um, and so you have to do that, but >> you don't want to be overexposed. But I'll say this, too. I run into a lot of folks that are underexposed that have 30% stock in their portfolio and 70% bonds and cash. That's equally as dangerous, okay? Because the majority of your money is not going to outpace inflation over the long term. And if you're retiring at 58 and you live until you're 90, you're not going to be able to outpace inflation. You can also run out of money being too conservative, too afraid. So, it's really about having that perfect balance of however much you can keep in equities. And when I say equities, I mean index funds, broad, you know, let's keep it simple. I'm not talking individual stocks. I'm talking S&P, technology, what, whatever, you know, broad-based sector you prefer. Um, but keeping, you know, 50 to 60% in equities at all times, I think is really important, right? So, it there's there's two problems. There's being too aggressive and then too conservative. >> Okay. All right. And obviously this is something that you sit down and you work with, >> right, >> in advise to determine what's the appropriate balance given where somebody is and their risk tolerance and all that stuff. Um, okay. Um, I got one or two other questions for you, but again, let me hand it back to you. Are there any other kind of big common mistakes that are worth talking about here? And again, if this video goes the way that I I hope it goes and I think it's going, um, you'll have plenty of time to come back on and talk about any other points that we don't get to quite in this conversation. Yes, that would be great. Um, other mistakes I would say with the with the demographic that I work with, people work too long. They're working too long. They don't need to work that long. They already have enough money. They're not giving themselves enough years to do some strategic tax planning and they're just working because they don't know what they're going to do afterwards, right? They they can't think of anything better to do. So, that's a mistake that I see. Um, I also see the mistake of with Medicare joining a Medicare Advantage plan. Um, that can be a real issue, especially if and when you get sick. Depending on what state you live in, some states are better than others. So, I'm just speaking for Florida here. Um, you can't go where you want to go. You have to get everything approved. You end up spending more than you would if you just had original Medicare with a Medicare supplement. You know, health care costs, I would say, are a big sort of the elephant in the room when you retire. That's what's inflating at five, six% a year. And that's what could really get you into trouble, >> right? You just don't know, >> right? You have no, you know, people think, "Oh, I've been healthy my whole life." We've had clients retire with no medications that are diagnosed with cancer two months later. >> You know, you just don't know what's going to happen. You can't be that proud to not prioritize your healthcare in retirement. You're never going to use your health insurance more than you will in retirement. So, make sure that you take advantage of that open enrollment period when they don't ask health questions to get into these really great, you know, Medicare supplement plans. >> Okay. Um, you're making me think that maybe another video for us to do would be just how to best manage health options in retirement. Is that something you think we could talk about in the future? >> Yeah, sounds great. >> All right. because I I I sense that that is a much more complicated topic than just two or three minutes of talking about it can can do justice to. >> Right. >> Okay. Um uh again another topic in the future maybe but um how about uh you know another big decision to make as we approach retirement age is when to take social security. >> That's a huge decision. >> Yeah. Um I'm curious, do people generally make the right one or is this one where people could use a lot of guidance on too? >> Yeah, I think people could use a lot of guidance on that. Um some people think that taking social security early and then investing the funds and sort of outperforming social security is the way to go. And I would say, you know, the past 10 years in the market, sure, you could you could do that. But the issue is that social security between 62, the earliest you can take it, unless you're a widow or widowerower, >> Mhm. between 62 and full retirement age, which is 67. Now, those five years, your benefit, what's paid to you is increasing by 8 to 10% a year, guaranteed, right? >> If if if you wait >> if you delay. Okay. >> Um so, I certainly think that if you're still working, if you don't need the income, you definitely want to delay that. You don't want to take money, pay tax on it, and try to outinvest it in the stock market. That's it. Your your social security is a pension. It's not supposed to be an investment, >> right? It's supposed to be a foundation of income in retirement, >> right? But it's keeping you from starving basically. >> Right. Exactly. That's about all it does. Um, and another mistake I see, you know, aside from people taking it too early is sometimes people take it too late. They want to wait until 70 and get that full, you know, amount. And when I run the calculations, that's almost never. It's certainly not both spouses taking it at 70. maybe one, but usually it's between full retirement age and and 70 years old is the ideal time to take it from a maximization standpoint. >> Um, you also want to make sure that if you do, you know, really want to pull a benefit early, that you pull the lower benefit first. >> The reason I say that is because when one spouse passes away, you're only left with one check and it's the higher of the two. So, if you blow that high check early and you know you're left with one check, it's going to be lower a lower survivor benefit than if you take that lower one and let that bread winner's benefit grow. >> Okay. Uh fantastic. Well, this may be a whole other uh video to do as well together. So, as as we're talking, I just keep coming up with more and more questions here, which is a fantastic sign, but I'm looking at the time here. We're near the end of the hour. This has been a great discussion. Julie, I've really enjoyed um both just meeting and getting to know you here a little bit, but I think you've done a fantastic job of taking a lot of these concepts that, you know, maybe people haven't had a ton of exposure to before and just helping them understand a why they're important, but b just helping them understand them in kind of, you know, easy to digest terms. So, thank you so much for doing that. >> Thank you so much, Adam. I'm so honored to be here and I hope it's helpful for the viewers. >> Great. Well, to that point, folks, um, if you'd like to see this channel start to do more regular videos like this where we just take, you know, a a a key topic of wealth building and dive real deeply into it. Um, I'm happy to continue doing that with a partner like Julia here. So, let me know in the comment section below and if interest is high enough, we will add that into the rotation. Um, Julia, for folks that have really enjoyed meeting you here and would like to follow you and your work, where should they go? >> Thank you. Yeah, so I have a YouTube channel. It's called Retire with Julia. Um, and so I I post a video every Saturday on there on different topics just like what we talked about today. Um, and my company's name is URS Advisory. So you can go to uradvisory.com. We're also on Instagram and LinkedIn. So please follow. Um, and I hope that you know you get over to my channel and and learn even more. >> Oh, fantastic. And folks, you absolutely should. Her channel is just great. Um, so Julia, when I edit this, I will put up the URL to your YouTube channel and to URS Advisor so folks know exactly where to go. Folks, the links will be in the description below this video as well. Um, please help show Julia how much you enjoyed this by hitting the like button and then clicking on the subscribe button below as well as that little bell icon right next to it. As a reminder, we recently passed 175,000 subs, which was great. We're building up ahead. Thank you. One YouTuber to another. So, you know, um we are um really hoping to hit uh 200,000 subscribers by midsummer. Um one because that momentum actually really does help the YouTube algorithm give this channel more attention and we're actually already seeing that in just the past couple months. Um but also the end of July is my birthday and I would love to hit that milestone by the end of my birthday. So, thank you folks in advance for hitting that subscribe button. Um, and uh, like with Julia, um, if you would like to get some help from a professional financial advisor um, about any of the topics that Julie and I have talked about here or that any of the experts on this channel and I have talked about, um, obviously go check out Julia's firm there. Um, but also feel free to schedule a free consultation with one of the financial adviserss that Thoughtful Money endorses. These are the channel the firms you see with me on this channel week in and week out. To do that, just fill out the very short form at thoughtfulmoney.com and the firms will be in touch with you right away. These consultations are totally free. There's no commitments involved. It's just a service they offer to be as helpful to as many investors as possible. Julia, really enjoyed this. I hope you did, too. Like I said, um I hope we can make a regular going out of this. Um you know, I'll just so like I said, got people watching this channel, most of whom are 45 or 50 years or older. Um, you know, it's a kind of an interesting time in the markets right now because things have been, I mean, they've been really good pretty much since the the global financial crisis coming out of it again with all the interventions. Stocks have have just kind of been on this 45 >> almost 20 years. >> Almost 20 years. Um, kind of a blink and you miss it recession in there during CO. Um so you know they've done quite well and of course not everybody has has ridden risen that ridden that rising tide. Um, but even those who have, I know there many of the ones who come to this channel watch it because they're they're nervous. um they're nervous that a things have been so good for so long, you know, might things mean revert going forward, but they're educated enough about today's markets to realize that on a historically um uh you know, historical basis, they are near or at uh the highest degrees of of uh valuation we've ever had. when you look at key valuation metrics versus fundamentals, you know, price versus fundamentals, and there's a lot of players out there, even some of the big, you know, the big financial institutions like Goldman Sachs who say historically when valuations have been this stretched, the next decade had no returns. Right. So, I'm just curious, do you have any parting bits of advice? Again, we can get into this a lot more depth the next time you're on, but parting bits of advice for people who are are riding the rising tide, but but nervous that it it may not last forever and they've got a couple decades left to still live. >> It's a great question. So, um I am a technical analyst when it comes to the stock market. That means I look at moving averages. I look at um different conditions in the market and it's basically again a math equation. I'm a math girl and I really try honestly to tune out the noise of the news because it can get in the way of a of a sound investment strategy. What I will say about fundamentals is that there are you know two threats to the stock market. One is rising interest rates. We will always have some sort of a pullback whether it's 20 you know 15 20 30 possibly more percent decrease in the market and a recession. Right? So, if we can avoid interest rates rising, if we can avoid a recession, then we'll just have that normal, perfectly normal unexpected market volatility, 5 to 10% pullbacks here and there, right? And that's what we've seen. So, I don't subscribe to, oh, you know, we're overvalued now, so, you know, we have to have a market crash. That doesn't mean that I don't think that it is possible to have a crash at any time and that possibly the next decade will not be as good as the last. But people were also saying that in 2018 and here we are in 2026 with another decade of great returns. So I think it's important to pay attention to interest rates to to recessions but also to understand that trying to time the market is a fool's errand >> and I will not mince words about it. It's just not something that 99.9% of people can do successfully. So the answer to that is to make sure again that your portfolio is bucketed, that you have enough fix to feel safe, but that even if it's a slight majority of your investments, they need to be in stocks. Stocks and real estate are the only two investments that outpace inflation over time. I have a bigger concern about inflation than I do about a market crash, but that's just me. >> All right. Um, well, look, very well said. And I presume that um an important part about the service that you offer your firm and any other good financial adviser is, you know, you're not only building the plan based upon the the idiosyncratic, you know, unique situation of the client, but you're running a whole bunch of sensitivities on it, >> right? I'm I'm trying to crash their plan, right? I'm trying to to to ruin their retirement. And if I can't do that, you know, with sequence of returns risk, with long-term care, with a really long life expectancy, with higher than expected inflation, then they're in good shape. >> Okay. Um, so I'm just going to end this with advice I I give quite frequently on this program with folks is look, whatever you decide to do in terms of managing your money, whether you're going to do it yourself or you've got a good adviser or whatever, the key advice I'm just giving you is just make sure you do the math, right? Have a plan. either put together the plan for yourself or have a professional put together the plan for you. Then run all the sensitivities on it and then don't just let it sit in a drawer and gather dust. You know, revisit it quite frequently. Update it as your personal situation changes. But again, just keep hammering it six ways to Sunday to say how can this thing fail for me and do I have am I taking enough prudent steps to make sure that I'm reducing my risk as much as possible uh you know to the probable outcomes that could could maybe you know sink my prospects. here. You're sort of nodding as I'm saying all this, but I'm I'm guessing I'm sort of singing from your song book here as a as a financial as a CFP. >> Right. Do the math. Do the math. >> Do the math. All right. Well, look, Julie, like I said, it's been so pleasant. Thank you so much for coming on. >> Thank you so much, Adam, again. >> All right. And I hope we see you on the channel again soon. And everybody else, thanks so much for watching. >> Me, too. Bye.