Leverage and Protect that Legacy
So you move into retirement and there is little know-how on what you should be doing correctly in terms of planning. The whole process becomes puzzle pieces that can be mismatched easily. We can choose to focus our attention on the things we can control and start from there.
The top 3 key areas of focus retirees need assistance with are legal, financial, and tax — all of these need to work together. Today, I will discuss the correct actions and what you should be doing with your money going into retirement.
In this episode, you’ll learn…
- Chris’ positive focus for the week
- What I can share with you in my interview with Gracefully Greying show.
- My background before I went into Law and become CELA
- Plan for preservation and distribution
- Tax analysis where you can actually run numbers
- Tax Planning
- Asset-based long-term care or hybrid policies
- The right insurance set up
- VA benefit for home care
- Five different areas every retiree needs to think about
- What you can do to be prepared for change – pandemic, elections etc.
- Rethinking your retirement plan in 2020
- Looking for options to accumulate wealth
- Income planning
- Protecting your legacy
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This is the Chris Berry Show, expert information on wealth, estate, and tax planning for the second half of life, information that you can understand. Here’s your host, Chris Berry.
Hi, everyone. Welcome to the show. This is Chris Berry. And this week, just like every other week, we’re going to start with a positive focus, something positive that happened this past week. And I have one personal as well as professional. So personally, with the warming up of the weather and this hot Michigan weather we’ve had, had some great time, spending time with my family, my parents, my wife, my kids. We live on a lake and it’s been great enjoying the hot weather finally. So it’s something to do as everything else is kind of shut down, just enjoying some good summertime weather. Just cooked some wonderful ribs the other day on my trigger grill. It didn’t get much better than that for summer so that was pretty nice.
Now professionally, the positive focus would be that I was interviewed on a show called Gracefully Greying, and we were talking about money and retirement. And it was interesting because we talked about it through the lens of everything going on with the pandemic, as well as through the lens of what should we do at different ages, whether we’re in our 50s, 60s, 70s with regards to our planning. And I thought it’d be great to share just some of the things that we talked about on that show. And you can, if you do want to watch the show, we’ll have a link to it on our website. So if you go to castlewealthlegal.com, we’ve actually kind of redone our website so just go check it out, castlewealthlegal.com, and you should be able to click around and find the actual interview.
But if you don’t want to do that, then what we’re going to do on the show today is just talk about your money in retirement. And what I’m going to do is run through some of the questions or issues that we talked about on the show. And I wanted to share it with the listeners here. So one of the first things that he asked me was actually about my background, and I’ve talked about it on the show before but I thought it’d be interesting to share it again if you haven’t heard it. But I grew up in Southeast Michigan actually Farmington Hills. I went to Farmington Hills Harrison, which is a high school that had a great football program, but it is now closing. And I didn’t really know what I want to do growing up in the world.
But I did get in the Honors Program. I went to a school at Grand Valley University where I got to an honors program there, and I didn’t know what I wanted to do. And so my dad, he is a psychology professor. He taught at Oakland Community College for, I think, 47 years, and he taught psychology there. And my mom has a finance degree. She’s a finance MBA. And so when I went away to college, not being very creative, I took my dad’s psychology and I thought that was super interesting. But I didn’t want to grow up to be a psychology teacher. And I took my mom’s kind of business side, I was like, well, I need to get into the workforce somehow so I coupled them. And so I graduated with a finance and psychology degree from Grand Valley.
And as I was going through that at a business law class, I just knocked out of the park and I was like, “Let me try this law school stuff.” I didn’t know any lawyers growing up. It’s not like I loved courtroom drama movies or anything like that. But it was just something that came naturally. It’s kind of like when you find your groove. And so because of that, I ended up taking the LSAT, which is a test to be able to sit down for the bar exam, and I did very well on that, and I ended up going to Michigan State University College of Law to get my law degree.
And my first summer there I spent at the Wayne County Prosecutor’s Office and I very quickly realized that going to court was not what I wanted to do. And so I got a corporate concentration and coming out of law school, I was working for a supply chain company. And I realized that that wasn’t really where it was at for me either. I felt like I was living a Dilbert type of life. So I identified the area of estate planning as an area of interest to me. So estate planning, I thought I could use my legal background, my finance background, my psychology background to help good families kind of plan for the inevitable, the fact that we’re all going to pass away at some point.
But very quickly, I was realizing that my clients weren’t passing away, they’re continuing to age and face all the issues that go along with aging. And so very quickly, I leaned into what’s called Elder law. So if estate planning is planning for what happens if you die, Elder law is planning for what happens if you don’t, you continue to age and you face all the issues that go along with aging. So a lot of it is all about making sure that your money lasts at least as long as you do. And so in 2005, I opened my practice and by 2008, I was focusing on becoming the best Elder law attorney I could.
In fact, I became what’s called a certified Elder law attorney. So anyone can say they do estate planning or Elder law but the CELA designation, Certified Elder law attorney designation is really the gold standard when it comes to estate planning and elder law. And then around 2008 clients were starting to approach us to help out with additional issues like long-term care insurance and investments and life insurance and annuities. And so we’ve been helping clients since 2008 in all of those different issues. And we’ve been doing that for a while now, and my office originally was in Bloomfield Hills. And then I think about five years ago we moved to Brighton. So we have offices in Brighton, Ann Arbor, Lansing, Bloomfield Hills. And prior to this pandemic, we had 14 team members and we’re growing and everything was good.
And going into 2020, we were very excited about a name change because our firm was called The Elder Care Firm. For about 10 years, the problems I had were, first of all, people didn’t necessarily identify as elders and they got kind of offended by the term, plus it didn’t fully encompass everything that we do. So with that, as we’re going into 2020, we were super excited to talk about the launch of our new brand. It’s not like the same team and everything but the new brand, Castle Wealth Group Legal. And the reason we chose that is that the feeling of protection, it further encompasses everything that we do, plus we have a trademark asset protection trust called the Castle Trust. And so it just really made sense.
So that’s a little bit about my background and how I got to the point. At the end of the day what we do is we just help good families plan, protect, and preserve what’s important to them. And really, when we’re talking about this, we’re thinking about really, five key areas as it relates to retirement. So there are five key areas that we really focus on when we’re helping people plan for their retirement and legacy. And the first area is income planning. So as you move into retirement, you need to understand that you’re moving from an accumulation phase where it’s all about accumulating as much wealth as possible, you’re collecting these paychecks, but then all of a sudden, the paychecks are going to go away.
So you need to have a plan for preservation and distribution. What is going to be your plan to maximize your income in retirement because it’s a completely different skill set than while you’re working? While you’re working, it’s all about accumulation as much as possible. Get that big pot of money. But when you move into retirement, now it’s all about distribution. How do you make sure your money lasts as long as you do? It’s kind of like climbing a mountain. As you get near retirement it’s like getting near the top of the mountain. It’s a very important time. And then equally important is figuring how are you going to get back down the mountain. And so the first thing is having a plan for income in retirement.
And then the second thing is, is now that you have that income plan, how are we going to manage your assets in such a way that you’re comfortable? So it’s all about having a second and investment plans, especially with all the market volatility that we’ve had this past year. We’ve been on a 12-year bull run since about 2008, and everyone was comfortable saying, “Yeah, I want to take on growth.” Every broker or advisor seemed like knocking out of their park. But as the tide went out, now we see the kind of maybe we weren’t really willing to take on as much risk as possible.
So one of the things I would suggest is that if you’re listening out there, and this market volatility has you a little bit concerned or maybe now it’s time for a second opinion, give our office a call at 844-885-4200. And what we’ll do is we’ll figure out how much risk you’re willing to take on, how much you’re willing to lose, and then we can put together a portfolio for you that helps you meet your level of comfort, or at least get a second opinion. What I find is as we walk people through our risk tolerance exercise, their portfolio might be at one level. But in reality when I sit down and ask them, “How much are you really willing to lose?” That might be at a much different level. So we need to make sure those two things are in alignment. And that’s really what investment planning is all about.
The third thing that we focus on at the firm is tax planning. And this is one of the biggest opportunities right now. And we just recently wrapped up a webinar we had with an actuary talking about how this CARES Act, an additional $2.2 trillion we’ve added on to the federal deficit, what effect that might have on taxes moving forward in the future plus on your retirement. But we’ve had three major tax law changes within the last couple of years. We had the Tax Cuts and Jobs Act, which has artificially lowered marginal tax rates from 2018 to 2025. So we have this window of opportunity where taxes are on sale.
And then we had the SECURE Act, and the SECURE Act was big news coming into 2020. And I think a lot of people forgot about the SECURE Act and how it pushes back the RMD age from 70-and-a-half to 72. And then also how it limits those inherited IRAs where they can’t be stretched out over a beneficiary’s lifetime. And I think a lot of people have forgotten all about the SECURE Act because of the pandemic and the market volatility and everything that’s going on. And so if you take one tidbit from the show today, think about not having a micro plan for taxes, just minimize taxes in one year, but look at a macro plan for how are you going to navigate taxes in retirement, and how are you going to navigate taxes leaving it to the next generation to your beneficiaries.
And one of the things that we’ve been doing for a lot of our clients recently, is running a tax analysis where we can actually run the numbers. Should we be thinking about things like Roth conversions? How much should we convert? And if you want some assistance in navigating the tax maze, especially over the next five years, because there’s this unique window of opportunity to do the Tax Cuts and Jobs Act, the SECURE Act and the CARES Act that just passed, give our office a call at 844-885-4200 and ask for a tax report. This is complementary to any listeners out there. Just give our office a call again at 844-885-4200. We can take a look at what effect taxes are going to have on your retirement, and we can even run some different scenarios for you as well.
So the third thing is having that tax plan, which again, is one of the biggest opportunities right now. The fourth thing is having a healthcare plan. So what is that plan for medical expenses? And even more importantly, what is your plan for long-term care costs? And this is really where Elder Law plays a big role. And it’s something that differentiates us where if you’re not working with a certified Elder Law attorney, you might be missing out on some unique opportunities. For example, with how you have your trust structure. So if you’re listening right now and you have an estate plan, think about whether you have a trust. Do you have a revocable living trust? Or do you have a Castle Trust, which is an asset protection trust that can protect your investments, protect your assets, protect your real estate, protect your business from lawsuits, and long term care costs?
So we need to think about long-term care costs, and this was a lot of what our interview was about was thinking about different ways to plan for long-term care as you move into retirement. And we’ll talk some more about that on the show today. So healthcare as being number four. Number five, legacy planning. What are you leaving for the next generation? How can you leave it to them as efficiently and effectively as possible? How can you make sure that whatever you’re leaving to them will be managed in the way that you want? How can you make sure that you’re leaving the money to your loved ones, not to the Internal Revenue Service, not to probate courts, not to the in-laws who might go out there and remarry, but making sure the money stays in the family?
And really, the best way to do that typically is with some type of trust. Now, I’m not saying everyone needs a trust. There are certain times where a will-based estate plan with something like a ladybird deed to make sure the home avoids probate makes sense. But if you are looking at making sure that your beneficiaries kind of receive those assets in the manner that you want then a lot of times we look at trust. But not always. A will-based estate plan certainly may make sense in certain situations. Both will avoid probate and that’s probably most people’s number one goal as it relates to their legacy planning is they don’t want to send their loved ones or whoever their beneficiaries are through the probate court because it’s time-consuming, it’s costly, it’s a big mess.
But you don’t necessarily need a trust to avoid probate. You could do that with a will-based estate plan and just make sure you have beneficiary designations on everything. But a lot of times if you do want to make sure the money stays in the family, you want to protect your beneficiaries from divorces, lawsuits, creditors, bankruptcies, then you’re going to look at a trust-based estate plan. And one of the things, as it relates to legacy planning that I want to bring up, is final expenses. And this is something that I think a lot of people when we sit down, they’re not really thinking about this is, is how are we going to cover the final expenses.
And I’m not just talking about funeral costs, but talking about beneficiaries having to travel. I remember when my mom or my grandfather passed away, I was in high school. My mom was named as a personal representative and she had to fly down to Florida to take care of his affairs. She had to take time off of work. And there’s a lot of expenses that she had to eat initially before she was reimbursed from the estate. And wouldn’t it be nice if there was a way that we could ensure that whoever you’ve named as a trustee or personal representative within 24 or 48 hours from the time that you pass, there’s a way to make sure that they have funds to cover all of those things?
Well, the nice thing is there is a way and this is something we call a liquid estate. So it’s one thing to have your estate plan, your trust, your will, your financial power of attorney, your medical power of attorney. Make sure real estates handled properly, make sure we avoid probate, make sure stuff goes where it’s supposed to go. But even if you have a well-drafted estate plan, there’s going to be a lag time before those assets get moved, because we have to wait for things like death certificates, work with a financial institution, et cetera.
So the concern is how will someone handle your affairs in the meantime? How will they cover the final expenses? How will they be able to take time off work? And we’ll talk a little bit more about that as we move into the next segment. But it’s something to think about when we’re talking about legacy planning. Not just where you’re leaving things in the end, but making sure that your loved ones can take care of your affairs as quickly, efficiently as possible. So stick with me as we continue the conversation.
Hi. We’re Madison and Ryan Berry.
Our dad is Chris Berry from the Castle Wealth Group.
The Castle Wealth Group used to be The Elder Care Firm but dad wanted the company to be broader in its scope of services.
To not only protect and preserve assets but to help people grow their assets to prepare for retirement.
As a certified Elder law attorney and fiduciary financial advisor, our dad and his team at Castle Wealth Group can help you with lots of important things.
To tell you more, here’s our dad, Chris Berry.
Thanks, Maddie and Ryan. Here at the Castle Wealth Group, we can help you put together an estate plan to avoid probate, work with you on a tax plan to keep more money for your family and less for Uncle Sam and protect you against the devastating cost of long-term care. Our team is here for your family. I invite you to learn more about the Castle Wealth Group at our next free workshop where you will learn the three steps to create a legal, financial, and tax plan for the second half of life. Call us today to register at 844-885-4200.
The Castle Wealth Group formerly The Elder Care Firm.
Learn more at the castlewealthgroup.com today.
So we’re talking about a recent interview I did talking about your money in your retirement as you go through the aging process. And we were talking about the five key areas that every retiree should analyze as they’re moving into retirement. First, income planning, second, investment planning, third, tax planning, which is a huge opportunity right now, fourth, healthcare planning, and we’ll spend some time talking about that. And fifth, we’re talking about legacy planning.
And I was talking about the issue of what happens when someone passes away. Well, now a successor trustee has to be appointed. A certificate of trust has to be done. But the biggest thing is that you need to wait for the funeral home or to get all the death certificates, and usually, that takes a week or two. And so in the meantime, the question is, how is the funeral going to get paid, how our travel expenses going to be handled, sometimes attorney fees even, and that’s where this concept called a liquid estate comes in. The idea is that you want to have some money available to whoever your trustee or personal representative or whoever is going to wrap up your affairs within the next 24 to 48 hours.
And now some people say, “Well, you know what, I’m just going to name my kids joint to a checking account or savings account.” But that’s one of the big mistakes that we see for a variety of reasons. Because now if you’ve named one of your kids joint to a bank account, what happens if they get divorced? Guess what, you might lose that account. If the kid were to get in a car accident, sued, again, you might lose that account. If you named them joint and there’s a falling out, understand they could take all the money and run. Plus, if the kids were to have child support issues or a tax lien, guess what? They can come after your funds.
So joint ownership is great for a married couple but I wouldn’t recommend naming anyone else joints on your assets. You might be thinking, “Well, I have life insurance or brokerage accounts.” Well, that’s great, but unfortunately, usually it takes about anywhere from two weeks to sometimes 30 to 60 days to be able to transfer the funds because you have to wait for fidelity to send the paperwork and then send out a death certificate, that type of thing. But there is a way to do that and it’s with what’s called a liquid estate plan. And it’s a way that we can set aside money that could be protected from lawsuits, protected from Medicaid, and can pay out within 24 to 48 hours to cover final expenses or credit cards, medical bills, car loans, mortgages, alimony, child support, all of these different things.
Like for example, in my mom’s situation, it would have been great if she had the funds right then to pay for the funeral and pay for her expenses to get down to Florida but unfortunately, she had to pay out of her own funds. But there is a way and we call it a liquid estate plan. If you want some more information on that, give our office a call at 844-885-4200. Again, 844-885-4200. And again, it’s a way that we can ensure that within 24 to 48 hours, that there’s going to be funded to cover all of those immediate expenses. So that’s something just a lot of people don’t think about when it comes to legacy planning. So those are the five areas that really we focus on at Castle Wealth Group is the income planning, investment planning, tax planning, healthcare planning, and legacy planning.
Now, as I was part of this interview, which again, you can go to our website, castlewealthlegal.com, click through and you’ll be able to see that interview. But one of the things we talked about was long-term care planning, and all the issues that go along with long term care costs. And from a financial or insurance standpoint, really, we have two ways to pay for long-term care or two kinds of strategies. We have the old traditional pure type of long-term care insurance. That has a lot of problems with it. The first big problem is you could pay on this for 20 years, and then all of a sudden, they could increase your premiums.
I had a family come in, and they’ve been paying $4,000 a month, and then all of a sudden, this past year they increased … 4,000 a month, that’d be ridiculous. $4,000 a year, and then all of a sudden, they increased the premium to $10,000 a year. And then they’re stuck with an idea or the question, do you pay the higher premium? Which is difficult when you’re in retirement. Do you take a reduction of benefits right when you need it? Or do you let the policy lapse? And then the second big problem with it is that what happens if you pass away without using it? All of a sudden, all those funds are going to go away. All that money’s going to the insurance company and nothing gets paid out. It’s like homeowners’ insurance. If your home doesn’t burn down then it wasn’t really a good return on investment, right?
So, in answer to that, that’s where what we call asset-based long-term care or hybrid policies come into play. And there’s a lot of different ways that we can structure it. But let’s say, just making up numbers, let’s say you have a million dollars in your IRA right now, okay? And understanding that the cost of long-term care, especially a nursing home right now is about 10 to $14,000 a month. Sure, you might be able to self-insure, but if there is a way to maybe carve out 200,000 from that IRA, but now it’s $400,000 worth the long-term care benefits, or if you pass away peacefully in your sleep without needing it, it might be a $400,000 tax-free death benefit to your beneficiaries, shouldn’t that be something that we explore?
So it’s a way that we can look at leveraging your funds, must build in a moat around the rest of your assets, because if you’re to have a stroke and need long-term care for the rest of your life, that IRA could be exhausted. But now if we build in some leverage, some protection, you can have peace of mind to know that you can use the rest of your IRA to travel, to retire, do all those things you like but now you’re shielded, at least to a certain extent, from the devastating cost of long-term care. So that’s what we call an asset-based long term care strategy.
And if you want some more information on that, that’s something that we can certainly help you with. Just give our office a call at 844-885-4200. Probably talk to Sarah or Shelby from our office and just say, “Hey, I listened to the program and I want to learn more about that asset-based long term care.” And what we can do is schedule a short little phone call and I can go over it with you. But this is something that a lot more people are gravitating to, because A, they understand the devastating cost of long-term care. Maybe they’ve seen it with a loved one or their parents, and they don’t want to put their family through that.
And then B they understand all of the problems with traditional long-term care and once they’re ready educated on this asset-based long term care strategy, if you are concerned about long-term care, it’s a great way to go. Now, it’s not the only way that we can go. Another way is we can go from a legal standpoint. So instead of looking at a specific investment option or insurance option, we can look at building a legal structure to protect your assets. And we’ve been doing this for years, and other attorneys have as well. And we’ve seen this on the business side where you would set up, if you’re going to run a business or maybe have a rental property, you would set up what’s called a limited liability company, an LLC. It limits liability.
But now we also have the ability to do that from a trust standpoint for individuals. So instead of a basic revocable trust that avoids probate and controls the distribution upon death, we could set up what we call a Castle Trust, which is a form of asset protection trust, where the assets that we’ve moved into the trust are immediately protected from lawsuits. I’ll tell you what, this appeals to a lot of individuals, especially if you’re driving around in Michigan right now with the changes in the auto insurance.
I had a lot of calls about people concerned with if I get in a car accident and we don’t have the right insurance set up, or they don’t have the right insurance set up, what can I do? What can I do to protect myself? And that’s where an asset protection trust like a Castle Trust can protect you from creditors or lawsuits potentially. But a big reason why a lot of clients are gravitating towards the Castle Trust is it can protect against the devastating cost of nursing home care. Now, we haven’t talked a lot today on the cost of long-term care but understand that people go through what we call the eldercare journey of initially they start out living at home independently, but then they might need assistance at home. And that might be a spouse or family member.
Then they might need to bring in a private duty home care company. Well, that home care company is going to run your 20 to $30 an hour is probably one to $4,000 a month, assuming you’re buying a couple of hours per day, couple times per week. Then you might transition to independent or assisted living, which is running anywhere from two to $5,000 a month, or assisted living with memory care is five to $8,000 a month. And then nursing home care is eight to 12, 13 $14,000 a month. And I know the current statistics, so you might be listening and saying, “Chris, I’m never gonna go into a nursing home.” Well, that sounds great. But I know current statistics say that one out of every two individuals will need nursing home care. Three out of four will need some form of long-term care.
The average stay in a nursing home is two-and-a-half years and the average cost of a nursing home is about eight to 12, 13, $14,000 a month. So the question is how are we going to go about paying for all this? And really, at the end of the day, there are only six ways to pay for long-term care. We can privately pay, just pay out of our own funds. We can have the kids pay. A lot of times they don’t pay financially, but they pay in terms of their time, or they’re taking time out of their day to visit an elder law attorney or they’re putting their life on hold to become a full-time caregiver.
Third, we have long-term care insurance, and we talked about the different types of that already. You have the old traditional pure long-term care insurance, which a lot of people are shying away from. And then we have the new asset-based long term care that appeals to a lot more families these days. Fourth, we have Medicare, but Medicare doesn’t really pay for long-term care. What Medicare pays for is a short-term rehab. So if you fall, break your hip, you’re admitted to the hospital, you might be admitted hospital for over three days. You can be discharged to a nursing home, where one to 20 days will be paid by Medicare, 21 to 100 will be paid by Medicare as long as you have a supplemental plan. But then after 100 days, Medicare runs out, so we can’t rely on that.
Fifth, that brings us to the VA benefit. So the VA benefit is a great way to pay for home care or assisted living but for a veteran or surviving spouse, it’s going to max out at no more than $2,000, or just over $2,000 a month. So if we’re talking about nursing home care, we’re not going to rely on the VA benefit. Instead, we’re going to talk about Medicaid. Now Medicaid will pay for nursing home care. It won’t pay for assisted living or home care. And to qualify for Medicaid, a single individual can only have $2,000 worth of countable assets. Countable assets are everything other than a home, small cash value of life insurance, personal belongings, prepaid funeral, and an automobile. Everything else is a countable asset for Medicaid purposes.
So that’s where the term Medicaid or nursing home spend down comes in. As you just spend down your money until you run out. And then you can have Medicaid pay your base level care. But this is where if you create a legal structure like a Castle Trust, we can build in asset protection. Where now because Medicaid looks back five years to see if we moved any money around, now if we set up a Castle Trust, move the assets into the trust like your real estate, your investments, business interest, and then you make it five years 100% of what you put in that trust is protected from that nursing home or Medicaid spend-down.
So what that means is you can have Medicaid pay that base level of care and then you have a pot of resources to pay for additional services to improve your quality of life. And if you’re married, ensure that if one spouse needs long-term care, that healthy spouse isn’t completely impoverished having to pay for it. So it’s a great way to leave more money for you, leave more money for your spouse, leave more money for your family, versus giving it over to the nursing home. And that’s through a legal structure called a Castle Trust.
And that’s how Medicaid works, and that’s really the long-term care journey of home care, independent/assisted living, nursing home care, how are we going to pay for it? Private duty, kids paying, long-term care insurance. We have to have that in place already, utilizing Medicare when available, veterans benefits if we’re a veteran or surviving spouse, and then looking at Medicaid ideally setting up a Castle Trust making it five years before we need nursing home care to protect our assets, not just for ourselves, but for our spouse and for our family.
And if you’re concerned about long-term care costs, or you have a family member who’s going through that long-term care journey now, give our office a call at 844-885-4200. We’re here to help. We’re here to help you navigate this long-term care journey. It’s something we’ve been doing for the past 15 years. This might be your first time with a loved one needing home care, need assisted living, or needing nursing home care. And we’re professionals with this. As I said, we’ve been helping families navigate this long-term care journey for the last 15 years. So give our office a call at 844-885-4200.
So I talked about the five areas every retiree needs to think about as it relates to retirement planning. You need to think about income planning, investment planning, tax planning, healthcare planning, as well as legacy planning. And at the end of the day, there’s really three pillars, three areas that you need expertise, and this is something that we help our clients with is all three of these pillars. So the legal plan, the financial plan, and the tax plan, these all need to work together. Too often we feel or we see that it’s spread out where you have a tax preparer or HR block or a CPA trying to minimize your taxes in any given year.
You have an investment person that’s helping you maybe with your investments, whether they’re a fiduciary or act in your best interest or not, that’s another question, and then maybe you have a basic revocable trust. Well, those three things together need to work together. They can’t be in their separate lanes. And that’s something that we really excel with is that we have all of this all under one roof, where we can do the legal plan, the tax plan, the investment plan to make sure they’re all done in your best interest. We have the technology and the teamwork and the relationships to be able to do that to put together one consolidated plan for you. So if you’re interested in that, give us a call at 844-885-4200. This has been Chris Berry. Stay with me as we continue this conversation.
Hi. Madison and Ryan Berry here from the Castle Wealth Group formerly the Elder Care Firm.
Our dad is Chris Berry.
He’s an attorney and fiduciary financial advisor, which means he helps families plan, protect, and preserve their assets.
The entire team at the Castle Wealth Group can help you with lots of important things. To tell you more, here’s our dad, Chris Berry.
Thanks, Maddie and Ryan. Here at the Castle Wealth Group, we can help you put together an estate plan to avoid probate, work with you on a tax plan to keep more money for your family and less for Uncle Sam and protect you against the devastating cost of long-term care. Our team is here for your family. I invite you to learn more about the Castle Wealth Group at our next free workshop where you will learn the three steps to create a legal, financial, and tax plan for the second half of life. Call us today to register at 844-885-4200. 844-885-4200. Or visit us at castlewealthgroup.com.
The Castle Wealth Group, formerly The Elder Care Firm.
Learn more at the castlewealthgroup.com today.
So we’re talking your money, your retirement. And the three key areas that retirees need assistance with are the legal, financial, and tax, and all of these need to work together. It reminds me when I took my kids back prior to the pandemic, I took them to the Ann Arbor Symphony for Star Wars night. And it was the first time taking them to the symphony. They’re nine and seven. And we get there early as they’re practicing and warming up and it sounds horrible. And my son turns me he’s like, “Did we sign up for this dad?” I was like, “No, no, no. Wait, they’re just warming up.” And then all of a sudden, the conductor walks out, waves his hands and all of the sudden sweet music happens, right?
So that’s what I find a lot of people’s retirement plans are like is they have kind of all these mismatched pieces. The puzzle pieces don’t all fit together. Don’t really have a tax plan, the tax isn’t fitting with the investments, and you’re missing opportunities. And our role as a conductor where we want to link everything together, and especially we see this with the taxes and investments where no one is talking to clients about this window of opportunity that’s closing from a tax perspective. Really, if you’re not looking at what is your … Everyone, if you’re listening to this you should have a tax strategy for the next five years because granted, we’re going into an election year, you never know what’s going to happen. It might be less than five years.
But our current tax structure is going to last for the next five years unless something else changes. And in five years, taxes are going up. So if you’re not aggressively looking at some type of tax planning strategy, then to be blunt, if you’re working with professionals, they’re failing you. And so if you want some assistance from a tax planning standpoint, looking at taxes, not through a microlens, but through a macro lens, give our office a call at 844-885-4200. Offering a complimentary second opinion, we can run a qualified tax report to show you how to minimize taxes over the next five years. Very easy for our team to put together for you.
But all you have to do is give us a call at 844-885-4200. We’ll schedule a short little phone call, figure out how we can help you and how we can help you move forward. Because I’d rather put more money in your pocket and put money into the Internal Revenue Service pocket. So with that, now, with all of the news going on in the pandemic, a question that was asked to me was what about the impact of COVID-19 upon those who are planning to retire later and now have no work? And this has really thrown a monkey wrench into people’s plants, whether they had a plan or not. I find a lot of people don’t have any plans for retirement.
And I was thinking because it’s my son’s birthday is coming up and a number of years ago we went to Disney World. And of course, with the pandemic, that wouldn’t be something we’re doing now. But we planned a trip to Disney World. I remember sitting in our big 20 person conference room, the whole family was there, my parents, wife, kids, we had a computer hooked up to the big screen and we must have spent like three to four, maybe five hours working on what our plan was for Disney vacation. Like where are we going to eat? Which parks are we going to go? Which Fastpass we’re going to hit? My daughter wants to do a princess thing. My son wants to do a Star Wars thing. How do we coordinate all this?
And when we got done, I was exhausted. But I was just thinking that we probably spent more time planning this vacation than most people planned, spending their retirement and legacy putting together a plan for that. So the number one thing is to have a plan. But understand that whenever you have a plan, things are going to change. No one predicted this for 2020. We thought there’d be a lot of volatility going into a 12-year bull run with the presidential election coming up. But no one expected this pandemic. And so having a plan gave you something to rely upon.
And then with 2020 now we need to think about adjusting that plan. And so I’m going to throw that out to you. Maybe you already have a plan and you think everything is all set, but 2020 this is a time to readdress that plan, readdress that legacy plan, readdress that tax plan with a pass of this CARES Act. Make sure your income plan is sturdy. Make sure your investment plan you’re comfortable with it. Because now this was a gut punch to a lot of people within the last 12 years kind of joke around but a monkey could have thrown darts at a dartboard and picking stocks and probably done okay because the markets going up the last 12 years.
But now we’ve seen some volatility this year and it’s a gut punch. And now you might be thinking, “You know what, I’m not really comfortable with this volatility. I’m not comfortable with the amount of risk in my portfolio.” Or maybe you don’t even know how much risk you have sitting in your portfolio, maybe you don’t know the fees that are in your portfolio, the hidden expenses, the expense ratios inside of your portfolio. Now’s the time to get a second opinion. And the biggest thing is, is having a plan A, to get through the pandemic, and B, coming out the other side in the best position possible. Because again, 2020 has changed everyone’s plans.
I’m very big on goal setting, I had goals for 2020. Basically, at this point, you can tear that up. My goals are to get through this both just from a family standpoint, make sure my clients get through this from a business standpoint. And then I want to make sure that my family and my clients, which are like my family are in the best position possible moving into 2021 and beyond. Because we’re going to get through this. We’re resilient. My kids are nine and seven, they didn’t have school, we had to homeschool, and they head a lot of change. They’re resilient. If they can do it, we can do it, too. So we’re going to get through this. But we want to make sure that we’re in the best position possible.
So now’s the time to maybe rethink your planning. And maybe the people that got you here, the plan that got you to 2020, maybe it’s time to make a switch. Maybe it’s time to get a second opinion at the very least, to make sure that you have an income plan, an investment plan, a tax plan. And again, if your professionals aren’t talking to you about the tax planning opportunities, you’re really missing this window of opportunity that’s available. Healthcare planning, having a long-term care plan, the best time to plan for long-term care was probably five years ago, the second-best time is now. And then legacy planning.
So if you do want that complimentary second opinion, give our office a call at 844-885-4200. We’ll set up a short phone call, get to know you, get to know me. And we’ll figure out if we can help you. Again, 844-885-4200. So, now, if we have a plan, we need to readjust it or take a second look at it with the pandemic to make sure A, we can get through the pandemic, and then B put us in the best position coming out of this. And I think that plan will look different depending on how old you are.
And so think of it as breaking into the 50s, 60s, and 70s. So in your 50s, you’re probably still working hopefully, or if you’ve been laid off, you might be looking at getting back into the workforce. If you had been laid off. It might be time to think about an IRA rollover to pull that money out of that employer, especially if you don’t have a lot of faith in them. But the other thing to think about is having at least a very basic estate plan, making sure if you pass away, you’re leaving things to your beneficiaries in the way that you want. You should be looking at long-term care planning. This is going to be some of your healthiest years before you get into your 60s, 70s, and 80s. There’s going to be some more options there.
But the biggest thing is, and again, it falls back to that tax planning, which again, is the biggest issue right now, is looking at where you’re still accumulating wealth. So if you’re in your 50s, and you’re still accumulating wealth, you need to think about where are you saving that money. And what I would suggest is that if you think taxes are going up in the future, maybe you shouldn’t put all of your money in those pre-tax accounts. Maybe you shouldn’t overfund the traditional 401(k), the traditional 403(b), the traditional IRA, because that money will be taxed at ordinary income tax rates when you pull it out. And if you think taxes are going up in the future, then it doesn’t make sense to pay the tax sooner rather than later.
So if I was accumulating wealth right now, maybe I would take the employer match, if there is a match, because that’s free money. But then the rest of your savings should be going somewhere else, maybe to Roth IRAs that grow tax-free. Maybe to Roth 401(k)s if your employer offers a Roth 401(k). Maybe to Indexed Universal Life, which some people call the rich man’s Roth. Maybe the 529’s if you’re looking at paying for education for someone. Maybe Health Savings Accounts if your insurance allows you to contribute to an HSA. Those are all things that grow tax-free. And so the difference is you paid the tax now, but then in the future, when you pull the money out, the money comes out tax-free.
Or even a taxable bucket just putting it into an investment account or checking your savings. We get 1099. From a tax perspective, that’s probably going to be better than over-funding those tax-deferred accounts. Because I’d tell you what, I sit down with a lot of retirees who bought into the deferred, deferred, deferred paying taxes long as possible. And then we get to retirement age and they look around and they look where taxes are going, and they’re like, “Holy cow, what am I going to do with this ticking tax time bomb?” And that’s where we diffuse it and there are certain strategies we have.
But the best thing to do is stop accumulating money in that ticking tax time bomb of a 401(k) or traditional IRA. Look at other strategies. And this is something that we can help you with and we can run the numbers to show how this will prove effective. Just give our office a call at 844-885-4200. Now, what if you’re in your 60s? Well, then you’re going to be thinking about a little bit closer to retirement. Now you’re probably what we call the retirement Red Zone, which is five years prior and five years after retiring when it’s very important how we manage the risk in our portfolio because of something called the sequence of return risk.
But now we need to start thinking about very hard about that income plan. How are we going to create income in retirement as it can be? So security, pensions, a drawdown portfolio strategy. So having that income plan, reassessing our investment strategy, maybe it’s time to get a little bit more conservative. And I’m not just saying rush out to put more money into bonds, which aren’t really performing in this low-interest-rate environment. But there are different strategies to minimize risk in retirement. And then if you haven’t already, you really need to think about long-term care planning. Are you going to look at long-term care insurance? Are you going to look at asset-based long-term care? Are you going to look at a legal strategy like a Castle Trust to structure that?
And then also, this is the prime opportunity for social security timing. So how are you going to claim social security in retirement? As well as tax planning, because those two things are hand in hand. If we turn on social security too early, that’s going to handcuff some of our tax planning strategies. So really, in your 60s, this is really when most of the retirement and legacy planning work should be getting done. Because we need to have that income plan looking at social security, your pension rollovers, having that investment plan.
Okay, now we need to worry about sequence return, we’re going to have to start drawing on these assets soon. Tax planning, especially if we’re getting at retirement age, how can we minimize taxes over not just a single year, but the rest of your life? Healthcare planning, we need to think about Medicare and long-term care insurance and long-term care strategies, maybe a Castle Trust. And then legacy planning. And our kids are probably adults, they’re getting married, maybe we have some grandkids. We’ve met the in-laws. We’re not a big fan of the in-law who we call an outlaw. How can we structure a trust to make sure the money stays in the family?
So in the 60s, typically, this is when a majority of the work, as it relates to the retirement legacy planning, gets done. And it really is that retirement red zone where we need to think about the income plan, the investment plan, the tax plan, the healthcare plan, and the legacy plan. And if you need assistance with all of that, you need assistance with a piece of that, you just want a second opinion on any one of those pieces, give our office a call at 844-885-4200. Sara Shelby from my office, if you don’t get ahold of us, we’ll reach back out to you, figure out how we can help you, figure out the best way to help you because really, we’re energized by providing service to great families.
Now, what about in the 70s? So now we’re a little bit older, we’re in our 70s. Chances are we’re retired at this point. Maybe we’re taking those required minimum distributions. It’s still not too late. There might be some long-term care strategies available specifically a Castle Trust. Tax planning if it’s still … I was talking to a client who was 81 and we’re talking about tax planning not just for his life but what he leaves to his spouse who’s a little bit younger, and what he leaves to the kids, especially with the SECURE Act. So even in the 70s, there are still tax planning issues that we can address to make sure we’re leaving more money to your family versus leaving it to the Internal Revenue Service.
Your income plan is probably figured out because you probably already claim social security so that should be in place. Likewise, your investment plan should be kind of figured out by now. But if not, make sure that you have the right amount of volatility in your portfolio that you’re comfortable with. Maybe think about are you going to use the money in your retirement? Are you going to leave it for the next generation? Maybe you can get a little more aggressive if you’re not planning on using the money. And then the big one is legacy planning. What can we do to leave the money to the next generation, versus leaving it to the Internal Revenue Service, versus leaving it to in-laws, versus the inheritance being lost to divorce?
And there are different things that we can do to try to leverage that legacy or protect that legacy. But for sure, it would be a time to review that estate plan. Make sure that we have the financial power of attorney, the medical power of attorney. Make sure that we’re leaving things for our beneficiaries in the way that we want. So yeah, so hopefully that was helpful. Just talking about your money, your retirement through the ages, how to gracefully grey, how to gracefully age, running it through the filter of the three pillars of investments, tax, legal, so that the five key areas of your retirement are taken care of.
Having that income plan, having that investment plan, having that tax plan, having that healthcare plan, and having that legacy plan. And if you’re not completely confident in all of those areas, if ever there’s something that you’re a little bit concerned with that you don’t quite have peace of mind, give our office a call at 844-885-4200. We’re really, I tell people we’re in the peace of mind business. And if we sit down and review your situation or we do it over a Zoom call or a phone call, however, you’re comfortable. And if we review everything at the very least you have peace of mind that everything looks great.
But if there is a hole in the plan, a hole in that bucket, it would be our pleasure to help you fill that hole to get you in the best position possible, A, to make it through this pandemic, and B make sure that you see the other side and you’re the best position possible. So again, give our office a call. We’re here for you, 844-885-4200. Visit us online at castlewealthlegal.com. This has been Chris Berry, make it a great week. Take care.
Learn more about Chris Berry and how he can help your family by visiting online at thechrisberryshow.com. That’s thechrisberryshow.com. You can also call Chris Berry at 810-355-2584. That’s 810-355-2584. This program content reflects the opinions of Chris Berry and his guests, not The Elder Care Firm, Prosperity Capital Advisors, or the Castle Wealth Group, and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment or legal advice or as a recommendation regarding the purchase or sale of any security or to follow any legal or tax strategy.
There is no guarantee that the strategist’s statements, opinions, or forecasts provided herein will prove to be correct. Past performance is not a guarantee of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses, which would reduce returns. All investing involves risk including the potential for loss of principal, there’s no guarantee that any investment plan or strategy will be successful. We recommend that you consult with a professional dedicated to your needs. This program is furnished by The Elder Care Firm.