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Big Problem With Fidelity Index Funds – Zero Fee Funds Explained

– Fidelity offers zero fee index funds. Can you believe it? They're such a kind,
privately held company that's willing to give
up a bunch of profit to help out the little guy
investor like you and me. – So you're telling me
there's a chance? Yeah. – Ah, not so fast. – What?!
– As with most things, there's a bit of a catch, and the Fidelity zero fee
index funds are no different. So, let's go through what you need to know about these things, then we'll stack up each one
to its fee based competitor. Before we get too deep into it, I need to say that I am by no means implying that you should
sell these index funds if you currently hold them. You could be investing in
much worse financial products, like anything that Cathie
Wood has her name attached to. I'm basically going to be giving you a peak behind the curtain of
these zero fee index funds to show you what isn't so
obvious on the surface, In 2018, Fidelity started offering four different index funds where they charge you $0 to own them.

These four funds consist of
a large cap, total US market, extended market and
international index fund. At first glance, this seems
like an odd thing to do, because they already offer
an S&P 500, total US market, extended market and
international index fund where they charge you to own them. Yes, the fees for these funds
are extremely cheap as it is. But by offering these zero fee funds, they're in direct
competition with themselves.

I can promise you they're not doing this out of
the goodness of their hearts. To help uncover why they're doing this we just have to follow the money, but not the money that they
don't make from these funds, the potential money that they could make in other areas of their business by offering you these zero fee funds. These funds are what you would consider to be a loss leader for Fidelity. Kind of like how Costco sells their rotisserie chickens for a loss to the tune of being out $30,000,000 to $40,000,000 per year. The goal for Costco, and
Fidelity in this case, is to get you into their ecosystem so that they can sell you on more profitable products and services. If you are already through
the doors of Costco to buy your unhealthy, corn-fed,
GMO, rotisserie chicken, then you're more likely
to buy additional items. If you are already investing
in Fidelity's zero fee funds, then you're more likely to use them first if you are looking for
a financial advisor, annuity, life insurance
or more expensive funds. This of course won't
work for every customer.

But the lost leader business model doesn't need to have a 100% success rate. They just need a small portion of people to buy these more expensive
products and services. Once Fidelity has you in the doors and investing into their funds, they lock you into
their umbrella even more by penalizing you if you wanna move to a
different investment platform. These Fidelity zero
fee funds are exclusive to their investing platform and cannot be bought on or transferred to any other platform. With their other fee based index funds, you can transfer those out of Fidelity and onto any other platform like Vanguard, Charles
Schwab or any of the others. They'll usually come with a transfer fee, but this is par for the
course no matter where you go and which fund you decide to move.

With these zero fee funds,
you have to sell them if you wanna move your
investment somewhere else, which means that you might
have to pay capital gains taxes if they're held within a
taxable investment account. It might not be a big
deal to you right now, but if for some reason
at a point in the future you become unhappy with
Fidelity, then you're screwed. Before I tell you my biggest issue with these zero fee funds, please help and support this channel, and my dog, Molly, who
actually just tore up her leg and had to get stitches, by
hitting that thumbs up button.

The word index fund
gets thrown around a lot by these large investment
institutions nowadays because of how successful
they've been over the years. At this point, a lot of people understand the power of investing in index funds. But not all index funds
are created equally, and it's not so obvious unless
you know what to look for. Technically, you could create your own custom stock market index. And if I wanted to create a
fund that tracks your index, then I could call it an index fund. The problem is that you are
most likely an unknown person with an unknown track record
and an unproven process. There's a couple levels of trust that need to exist
within this whole process between the financial index provider, the index fund and the investor. My fund needs to trust
your indexing process, and the potential investors within my fund needs to have some level of trust in how my fund attracts your index. There's a few different well-known and trusted
financial index providers that index fund creators like Fidelity, Vanguard and Charles Schwab pay a licensing fee to to create their fee based index funds.

The Fidelity zero fee index
funds are a lot different in that they don't want to
have to pay the licensing fee to these trusted index providers because they need to cut corners to reduce the cost to run their funds. Because if they're still
doing a bunch of work and you are not paying
them to do that work, they're gonna cut corners
wherever they can. But they still need to
track some sort of index to be able to call
themselves an index fund. To do that, Fidelity has created
their own internal index, which is what their zero fee funds track.

This might not seem like a big deal, but their indexing methods haven't been around for very long, which means that they are unproven. I'm also not sure how
I feel about Fidelity creating the index that
their zero fee funds track. Having an unassociated
third party index provider at least gives a little
bit of separation of power within the whole process. To show you why I'd prefer 75% of the fee based Fidelity index funds over the zero fee index funds, let's compare them against each other so I can show you the biggest differences. For the total market index we have the zero fee index fund FZROX and the comparable fee
based index fund FSKAX. The stock style for both are pretty close so there's really no issue there. Next, we can look at the
total holdings for each one. The zero fee fund holds 2,655 stocks, while the fee based fund holds 3,998. For me, I want my index funds, especially my total market index funds, to hold as many stocks as possible.

The zero fee fund fails to do this. Lastly, the portfolio turnover
for each is different. This is important to know because the higher portfolio turnover means more stocks are
being bought and sold which is going to cost you money. The zero fee fund is at 4%, while the fee based fund is at 3%. Not a huge difference, but for me, I prefer to keep
this as low as possible. I also like the option
of investing in the fund that charges 0.015% to track
a larger number of stocks, instead of only sampling 2,600 stocks like the zero fee fund does. For the large cap index, we have these zero fee index fund FNILX, and the comparable fee
based index fund FXAIX. The stock style for both of these are pretty darn close as well so there's nothing too concerning here. Since both of these are large cap only we see that the total
holdings are about the same, which it should be. For the portfolio turnover, we see that the Fidelity
S&P 500 index fund is at 2%, while the zero fee
large cap fund is at 5%.

I personally choose to
pay the extra 0.015% to hold the true S&P 500 index fund. We see the biggest divergence with the extended market index funds. For this comparison we have these zero fee index fund FZIPX and the fee based index fund FSMAX. As you can see, the stock
styles are way different. The stock style for FSMAX is more in the mid and small cap range with a tilt towards growth. FZIPX is more in these small cap stocks with a tilt towards value. The sector breakdown
for the fee based fund has more money going into technology, while the zero fee fund has more money going into
everything else except tech. Once again, the fee based
fund holds more stocks, which I like, at 3,703 of them, while the zero fee fund
only holds 2,143 stocks. The turnover ratios make me
sick just looking at them. 18% for the fee based fund
and 25% for the zero fund. I am not a huge fan of
any extended market funds, so I prefer to stay
away from both of these. The last zero fee fund that we have is the international index fund FZILX. We'd wanna compare it to the fee based international
index fund FSPSX.

Stock style for both
are basically identical. The sector exposure between them both are all over the place. So, I'll throw up a screenshot so you can pause the video
to see it for yourself. The holdings are a lot
different than you'd think. The zero fee fund holds 2,377 stocks, while the fee based fund
only holds 832 of them. One of the big reasons the
zero fee fund holds more stocks is because it encompasses both developed and emerging markets, while the fee based fund
excludes emerging market stocks and only focuses on developed market. Believe it or not, I kind of like the zero fee
international index fund a little bit more because I prefer developed
and emerging market stocks to get more diverse exposure. The only things I don't like about it is the 8% turnover ratio, as well as the fact that you're kind of stuck
in the Fidelity ecosystem if you hold these zero fee fund. Make sure to hit that thumbs up button to support the channel before you go. If you wanna see my preferred
Fidelity index funds or Vanguard ETFs that you can purchase on the Fidelity platform, then watch these videos to your left next.

I'll see you in the
next one, friends. Done..

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Inequality – how wealth becomes power (1/3) | DW Documentary

this is the airfield for private jets at düsseldorf Airport entrepreneur Christoph gröna is one of Germany's super-rich people who have a lot of say in this country but a rarely heard in public corner is worth millions and private assets and company shares all of it and self-made [Music] let's say you have 250 million you could throw it out the window and it'll come back in through the door you can't destroy it you can buy cars and they go up in value you buy houses and real estate is worth more you buy gold and the gold prices go up you can't destroy money by consuming we've been following coasts of Kona for six months through him and many others this film takes a look at inequality in Germany a first glance Germany is a rich and powerful country full of opportunities but if you look closely you'll see wealth is more unevenly distributed here than in just about any other industrialized country success often depends on your background [Music] why is that do the differences threaten social cohesion and democracy to find some answers we go around the world and speak to a Nobel Prize winner and other experts who have looked deeply into the issue of inequality the world is at a crossroads today people sense that the control of their nation is being stolen from inequality is the most pressing social problem facing us today welcome to the land of inequality [Music] it's almost 8:00 in the morning in Berlin good longer my house the driver is already waiting when the boss comes he has to get moving right away Christophe Colonna a teacher son has made his way to the top often working 20 hours a day he's what's called a high achiever I don't have a driver because I'm lazier I think I'm too good for that on the contrary I like driving I'm a passionate motorist but the question is what does my company pay me for for sitting behind the steering wheel or for working corner earns his money with real estate hardly any company in Germany builds as much as his cg group does and in the housing market the prices only go in one direction upwards his company has just bought a very special building the developer wants to turn their Stieglitz a Keisel office block into the tallest residential tower in the city custom governor is always up for a challenge he wants to run all the way to the top in less than five minutes a race against himself 30 floors 120 meters 600 steps an employee times him with a stopwatch it's half a minute faster than the last time angry well it was pretty perfect but I could still do it better I could still remember back when I was finishing high school I watched Boris Becker when in Wimbledon and I thought just you wait I'll be right up there with you you know today's an apartment here will cost between five and ten thousand euros a square metre from up here corner can look down on many of his construction projects you can actually follow the trail of the last 20 years here in Berlin nearly 4,000 apartments and another 3,000 are under construction we've played a big role in housing construction here one stop this is Coronas headquarters in Berlin every company like this is a realm with the boss at the top and the staff beneath him corners company now employs 500 people they all have good contracts he says the 2015 tax statement from your brother there's a lot to pay one of his most important employees is his personal assistant Angelique Lisa you still in Dusseldorf then he'll be going on to Zurich then tomorrow he'll be back in Berlin Friday and Leipzig and then he'll be away over the long weekend and what about sleep not a lot there are rumors of between four and six hours I also don't think it'll be much more depending on how busy he is or whether he's traveling you can tell from when his emails arrive I'm an assistant like her has at least the same level of stress I have the boss is only as good as his assistant you don't notice it with her she's only been in the job for a few months so she's still fresh but she also has the Constitution for it Mario Lauterbach guards the door downstairs he's had a permanent contract as a security guard for half a year benzine outside gets in yeah but I went to school for 14 years I speak two or three foreign languages so if I ever got the opportunity again and had the initiative I could imagine becoming a lawyer or a judge that's something that interests me a lot latter Bach earns about 2,000 euros a month gross that's enough for a modest life but not much more his boss on the other hand has been able to build up millions of euros and assets can the guard live on what he earns from me that's what counts if he can then I've done my job as an employer if I pay a guard so little that he can't live off a salary then I've done something wrong so you think comparing him with you is nonsense of course it's nonsense I've stayed home from work due to sickness three times in 30 years ask my guard how many times he's been out sick if I have a slipped disc I come to work if I have a 40 degree fever I come to work if my wife quarrels with me and keeps me up all night I still come to work ask my security guard comparing us isn't fair or correct justification is miscarriage dismissed fish dish will he ever be able to afford a house with a pool of course not but he does not want that I know my security guards I know my caretakers would you like to trade places with her groaner didn't say yes right away I guess if I had to answer spontaneously my first answer would be no and I believe if I thought about it for a long time it would still be no that's actually got a lot less to do with him as a person or what he does it's just a question of my own attitude I wouldn't want to have that much responsibility would you like to have a house with the pool yes but then maybe not here in Germany where in Greece so whereas the one can only dream of a house with a pool the other can afford several properties Kristoff corner has a villa in Berlin and a penthouse in Cologne with a view of the cathedral but little time off how much distance should there be between those in the middle and those at the top and how big is the gap in reality there's a lot of data about poverty in the poor but very little about the rich estate asset registry would help but there isn't one and so a team from the German Institute for Economic Research is trying to find out more if you try to represent the wealth distribution in Germany in a graphic way you can do it quite simply on an a4 sheet of paper and a few look you can imagine a coordinate system like at school with an x-axis and a y-axis and with the y-axis this here I show the amount of wealth you can easily display ninety-five percent of the population on this sheet here in the – area because a part of the population is in debt or even insolvent and then there's a relatively broad area where assets are virtually zero until it finally starts to increase exponentially at the outer edge instructors this describes 95 percent of the population but the question is of course how far away is the richest person from this manager magazine puts the Reimann family business at the top of its rich list for Germany the family's estimated worth thirty three billion euros so if 95 percent of Germans are graphed on an a4 sheet that aemon's would be a whopping six point six kilometers further away every era has its mother lode in the past car makers made big money earlier still the families who owned the big trading houses became hugely wealthy now real estate developers have joined them gustaf corners rice began here in leipzig 20 years ago he invested when prices below it was all ruins or scrap [Music] I love everything you see to the left and right has been redeveloped built and rented out by us his company says it now builds one in three new apartments in the city but coast of Cavanaugh's Korea has been unusual he was not born a boss he used to work on construction sites himself every other stone has been replaced here with expertise with a sense of proportion to create an entirety and it helps if you have worked on scaffolding like this yourself I can do masonry I can lay concrete I can lay steel I can plaster walls lay tiles put up the sods that was my career the company started out as christophe grew nabokov Steen's to building services then we took on specialized construction then contractor work and project development until we became the company that we are today Kona has also invested in this former industrial district this is the class family Thomas and Kirkland with their two children they live in a rented apartment around the corner they wouldn't mind having one more room well you have to say it's an oasis in a built-up environment each building has nine classic apartments and two penthouses one large and one small at the top I'd like to show you all the floor plans in the trailer so we're about where the woman is right no the house is next to that the houses themselves or at least 20 meters further back to the penthouse apartments there we have a four room 123 square metre apartment with a 60 square meter roof terrace I think we need to be realistic the penthouse isn't what we need or what we can afford I take a classic four-room apartment with a balcony or shared garden I think that's what we'd be looking for that would interest us then let's take a look at a floor plan parents would practically have a separate wing here a sandpit playground and recreation area so in general the target group is young families yes typical young families give me some idea of the scale I'd be interested in a four-room apartment first floor would come at three thousand four hundred fifty euros the foreign apartment would cost four hundred and fifty thousand euros to buy the classes are a typical middle-class family they both have good jobs buying property used to be the way to start building up assets was a Matthias tarbush at the spoke we were 30 before we could even start to think about our old age and accumulating wealth to date now I'm almost 40 and we still haven't managed to put away much in terms of reserves I even come up with the minimum amount of capital so that banks will be able to give us a loan a sticking point the screens not food the other fueled 94 percent of buyers here aren't from Saxony that means this is currently a market where normal Saxons can't participate even each Michi encode the class family isn't the only one with little chance of owning their own place in all the richest 5% of Germans own half the apartments and houses every second person owns no property at all most Germans rent and are having to pay more and more for living space the purchase price of an 80 square metre apartment has soared in the last 10 years leipzig is an extreme case only 10% of the people here own real estate 60% of all new buildings and 94% of refurbished all buildings have gone to bias from out of town [Music] don't you want to get your shoes dirty mister I can feel pretty fastidious while the Klaus family hesitates others are snapping up the houses on the market did he make a killing again he did did he get another bargain we keep getting repeat offenders here they buy one house after another this is the third right it's his second his second complete one and the apartments before we went for a meal and I said it won't cost less than 4.5 and he got it for 3 well I'm crazy right today the time is ripe for us to make money here with the standard and my company urgently needs it that's not a crime no I don't think it is such a bad thing the real estate market is symptomatic it enables those on top to make more profits while others can hardly afford to live in their own city anymore behind this is the more basic question does profit for the one mean loss for the others today's typical property buyers are rich people well-off retirees yes and investors the others like Thomas Klaus and his colleagues can only look on [Music] honestly when I look at what's being built in the sluicey district I need a practical apartment to live in and I don't think they're building them to be lived in they're building them as investments and I can't join in that game none of my colleagues can't either that probably also creates housing that doesn't meet the needs of the city and most of the population scary because many people are being left behind banks digna there are many parts of life see who are nowadays you find one place with high priced apartments and another where the people who just couldn't afford to live in them anymore had to move to it's a crappy situation when you say that for whatever reason you have to get out of your apartment but you'd like to stay in your neighborhood but that's not possible [Music] in a neighborhood in the eastern part of Berlin bigger schlosser has been the scene of an escalating conflict between residents who are afraid of losing out economically and the man they accused of making the deal of his life here Gustov kkona arrives and his security guard stays close by when he's here he usually gets police protection I'm going to be disturbing your lunch break today so let me at least say good morning Korea has been the focus of an angry backlash his opponents filmed the first encounter with residents and protesters let me ask you is this a dialogue it was nice whether they were meeting me for the first time we could call it the birth of the boogeyman they got to see an entrepreneur who has arguments on his side and won't back down and it's precisely this stupid thinking that prevails in society there's always a direct connection he makes money and he's become wealthy so we must have stolen it from someone it's all about politics he's charging 12 euros a square metre nobody can afford that well we have smaller apartments 35 40 50 square meters which any nurse can afford even at 14 euros a square metre as long as it's well made has great light she'd love to live there instead of in 60 square meters over there for 8 euros a square metre Clara knows that many of his workmen or the police officers who protect him had difficulties finding affordable housing but he says his millions of square meters are not the cause of the problem but part of the solution [Music] how do you strike the right balance between rewarding achievement and letting everyone share in it what consequences does inequality have for society the real general finding is that inequality being a way of making people feel more distance from one another stretches the social fabric it phrased the social fabric it pulls us apart from one another physically experientially and psychologically there's nothing necessarily wrong with inequality of course people have an unequal endowments of intelligence and beauty and they have different parents and where I start to worry as a sociologist is when people accumulate dynastic wealth and dynastic wealth means a lot of money that gets transferred down through generations because that starts to stabilize systems of inequality across society and that constricts the opportunities available to everybody else coast of Ghana may have worked his way to the top but even for him there's still a glass ceiling you can't buy your way into the world of dynastic wealth you can only be born into it Kirsti on fly – best all-time traces his family tree back to the year 1135 he's a descendant of the fogers one of the richest families of the Middle Ages you can always use a winch to pull in the deer and you've killed a stag which normally weighs well over 100 kilos then you need mechanical help to get it into the vehicle would look a bit odd when you drive around towing a dead deer in a trailer people sometimes find that a little strange the car he's is to transport dead stags as an old Austrian military vehicle when bechtolsheim uses it in the 300 hectares of forest he owns somewhere in central Germany we're not allowed to say exactly where back was his condition for letting us film him discretion is everything why had some visits in the morning a forest is a wonderful feeling because you have the run of it so to speak Keltie I think it was the publisher of deed site countess den Hoff who once said you always have to own everything you love I can comprehend the question philosophically but if I answer according to my natural instincts I'd say yes I like owning things that I find beautiful man rush to gardenia demonize Shirin imprinted by citizens not Eagles it had the great inequality that exists room on your folks is wanted for the economy and it's unavoidable obviously if you're an entrepreneur and you have inherited something and keep it running properly you will have more than someone who's just an employee do you think that things are by and large fair in Germany yes by and large I do I don't sense any real feeling of injustice and the part of most people on the street lights Lord after stars it can be not having during the week from best Hawthorne works with a view of the main river in Frankfurt he heads what he calls the family office this exclusive establishment is essentially what used to be known as a private bank perhaps you should add that this is one of the few old Frankfurt patrician houses that survived the Second World War intact this old terrazzo floor or this handle this banister you don't often find them in Frankfort today these display cases you can see the remnants of what once made patrician dining culture so special Oscar Moffitt you have to imagine a family office as just that an office that takes care of the interests and all the financial needs of a single family or an individual that ranges from let's say five or ten million to several hundred million not even the employees know all the names of the bank's clientele the wealthy come via personal recommendations they know that from battle time will offer them something that normal savers can't get from a bank these days interest and returns on their money we've done work together to create an asset structure one for the future let's say you want to invest so and so much in real estate and with real estate you also have apartments and commercial buildings and maybe even logistics stick stocks it's maybe thirty percent you might put 10% into pensions and 10% in cash the rest is invested in other things private equity forestry and so on we help families to maintain their fortunes for generations that is what we aspire to the legend surrounding germany's post-war economic recovery sometimes and evokes the notion of a kind of monetary zero-hour when everyone supposedly had to start from scratch if you wanted to get rich you had to work your way up according to the myth what's photomask Noveck shortly before the first world war a former interior ministry official published an almanac of millionaires in buda Shanda in these books you still find numerous names that look very familiar today if you look at the lists of the wealthy you get the impression that old money plays a huge role among the big fortunes today I'm hiding guns awesome for moving our biases line the ups transition dean dean the gap between those who only have work do you and those who belong to the upper class has increased enormously if i took for clue such i think if people understood how how deeply unfair economic competition was in the modern global economy they really would be up in arms [Music] it's the end of Thomas class's shift after visiting the construction site he and his wife considered the real estate agents offer at the moment the family lives essentially from his income his wife has reduced her workers to take care of the children [Music] the children are eager to tell their father about the events of the day they visited their grandmother once the children go to bed the parents talk about buying the apartment in the middle of the city when this dish walked on join us mommy first you are all enthusiastic and a bit dazzled by the idea and the beautiful project and by the question about whom the project is aimed at well at young families like you on the one hand that's flattering but on the other hand when you then hear the price and think about it again these are dimensions where I say that a family like us are out of it we aren't expecting an inheritance or any other sources of outside money we have to earn it on a monthly basis four hundred fifty thousand euros I don't even know how many annual incomes that would be as I income in the severan so at some point you start to worry that the step downwards into the lower middle class is much closer than the step up into the upper middle class I think everyone has the same feeling I'm lucky I have a big employer I feel like I have won the jackpot in Leipzig but that doesn't mean that we can keep up with the developments in the real estate market being mauled the classes are not poor but they belong to a group that has come under pressure in recent years the middle class the people who have no fortunes but have to work for prosperity in recent months thousands have sent in comments online for this film project under the hashtag on Graceland for example they've reported their salaries an industrial clerk in the car industry 1600 euros net a social worker in a rehab clinic 1648 net a civil engineer nearly 2000 net a medical specialist work 12 years of training 2768 net a net income of 3500 euros puts a single person in Germany's top 10% of earners accumulated wealth is particularly unequal half the population has less than 17 thousand euros in reserve that would let them buy a base-model VW Golf all shoes and clothing for 1.6 children from birth to the age of 18 or just 3.3 square meters of a newly built apartment in Frankfurt the vast majority of the gains and income have gone to people at the very top of the income distribution in the top 1% of the income distribution and incomes for people in the middle class and below the middle class have essentially not increased or have even fallen at the bottom very large middle class is necessary for peaceful and democratic societies and if you now have polarization in rich countries and if you have shrinkage of the middle classes then you really have a problem or you are really moving to a new territory that is just unexplored yet in u.s.

The question can really a successful democracy exist with very polarized of citizenship with lots of people who are rich but also lots of people who are below the middle-class level the world is at a crossroads today that if it doesn't try to write a new social contract those who have been hurt the many many people who have been hurt will repel [Applause] there are a few places where all social strata come together but even where they do exist it doesn't mean that the pool the rich and the middle classes actually meet how are they doing they're playing tactically Costa Fiona has paid for a place in a luxury suite in Leipzig main soccer stadium we in the luxury area of paying for their cheaper tickets through our high contributions everyone makes their own contribution maybe that guy pays 20 years for a ticket I'm actually paying 2,000 for mine there's a certain justice there now at the family office in Frankfort the bank's own Forester has come to call I brought all the figures let's start with Finland Christian fund bechtolsheim has been using his clients money to buy up forests in Finland New Zealand and Uruguay what's benefited us you can see it here in the timber prices in Finland the development last year spruce and pine have seen a huge increase since 2016 and that works to our advantage the Sweden solution copy mm-hmm authorities German forests are just insanely expensive there are very few areas available and when an area opens up people jump on it like crazy surprises a double tripled quadrupled over the past 10 or 15 years of course this is also due to the low interest rates that we currently have people are looking for everything they can find where can you invest money where can you safely invested or invested very profitably it's an intrinsic conflict can we briefly talked about Uruguay how does the return look relative to our plans we're doing quite well Uruguay is our most conservative projects this is a new global form of capitalism financial capitalism to find out how the system works sociology stat Brooke Harrington first trained as an asset manager it's a global profession and that's why I had to go to 18 different countries you know from the Cayman Islands and the BVI all the way out to the Cook Islands in the middle of the South Pacific to the Seychelles and Mauritius to New York and London and Switzerland all over one of the things you learn in wealth management school is to regard the world as kind of a legal financial shopping mall and you go to each different state in the world the way you would go to shops in a mall picking out the laws and the conditions that are most favorable for what you want to do or what your client wants to do with a particular asset so what you have to know is a wealth manager is where's the best place to get the laws that you need to do what you want to do with the art collection or the yacht or the family business the family office is the starting point of a global investment chain the wealthy entrust from best all time with their money among other things he invests with these fund managers they send it all around the world ensuring it earns much more interest than say a normal savings account I'm glad that you're here to say it at the outset we are really satisfied with the performance you have achieved so far currently we are at nine point three percent since the beginning of the year they say the secret of their fund is automated investment they have an algorithm that scans the global economic situation and converts it into traffic light signals green means the computer buys a lot of shares and when the signal jumps to yellow will read fewer yeah the curve is flat and you can see it because the signal isn't dark green we do the market timing we are the ones who ensure that a customer can re-enter the market because we operate without emotion we have no emotions our entire set up our entire algorithm is purely quantitative normal geopolitical upheavals such as those in Syria or Ukraine none of them has such a global economic dimension that it could really knock the world economy out of sync and that's our benchmark where we would intervene in the traffic light it has to be an event that knocks the world economy off-balance and at least in history no conventional war has done that many people would now say here are six well-to-do people sitting at the table and all they're doing is trying to increase their wealth for many you are kind of an economic bloat what would you say to them frankly nothing because no one ever asks net I think it's pretty tricky in Germany everyone thinks he can join Deutsche Bank as a trainee at 18 then become an authorised signatory and then eventually a department head and then retire at the age of 65 as a class-b director with a palm tree in the office and a chair with arm rests that world is definitely over that's for sure in the context of modern investor capitalism there's been this massive shift of power from labor to investment it's called financialization dissonance cloud these are very clear elements of an artificial world for which only an abstract amount of money counts a vanished but not the quality of life locally among the peoples in the markets in society now you can get rich from being a rentier capitalist that is not from your work not from the sweat of your brow as they say but from putting your money at the right place and at the right time the right things Tomasz class has been working as an engineer for siemens for nine years he sits on the works council and could imagine staying here until he retires with or without a palm tree we have employees who have been trained here they've worked here all their lives it's like a family it's not just work it's a bit of family and a bit of life the staff and I are very attached to what we do here together during the day good mind some – just recently Siemens posted six billion euros in annual profits but then worrying rumors began circulating investors were reportedly putting pressure on the company saying this plant wasn't fit for the future actually nothing is secure even everyday life living in a rented apartment is insecure we're currently secured by a single income and that is now on very very shaky legs you suddenly realize that when you get a situation like the one we're in now students really insist [Music] a few streets away from the Siemens plant cassava corner has invited all his staff to the company Christmas party he just bought this old post office railway station his wife Anna and his youngest daughter are the first to show up then the boss arrives a lot is riding on him his employees are also worried for much the same reasons as Thomas Klaus in recent weeks the financial Press reported that investors have taken over 50% of the company's shares [Applause] before though dear friends family it's amazing to be able to stand among you you are my motivation seasoned minam will to pursue is easy where my strength yeah I think you have been convinced by a letter from the management perhaps signed by me that we are still the same family no matter who owns the shares no matter who will have a say and so forth yes we do Capital Markets yes we have to refinance ourselves yes we have to reposition ourselves I will also be doing that no matter in what post I will be available to you in the future what we have achieved so far as to be a truly great and big family have a nice evening and thank you at some point every company reaches a certain size where its banking and financing structures are no longer sufficient I have to deal with the financial institutions and all that if I have that under control then I will remain in my post but if I don't then I'll be voted out faster than you can possibly imagine [Music] it looks like the whole world is being shaken up by big money it's a game that few can play and even fewer can win but when those at the top stopped a jump ship and those below have to worry about a crash what effect does that have on a country today and in the future [Applause] [Music] [Applause] [Music]

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3 Retirement Savings Tips Before Year-End (Full Webinar)

Welcome, everyone, thank you for joining us today. My name is Ewelina Caplap, Wealth Management operations manager at Coastal Credit Union, where we bank better to live better. Today, we will be sharing with you three retirement savings tips before year end. So hopefully today you will come out of this session with some great action items. Joining me today are David Burk, CFS financial advisor, and Drew Snider, CFP, director of financial planning here at Coastal Credit Union. Welcome to you both. So before we get into our exciting conversation, we will very quickly cover our disclosure slide. Coastal Credit Union contracts with CUSO Financial Services to offer investment products to its members, which can fluctuate with market activity and potentially have some risk. So getting into our exciting conversation today about three retirement savings tips for year end. At this time, let's talk about tip one. Tip one, Roth IRAs. We hear about Roth IRAs quite a lot and the potential tax free income they provide. David, why don't you start us off with a little bit about what this tip is? Thanks, Ewelina.

A Roth IRA is an IRA that you're actually using after-tax dollars to invest in a credit union or an investment Roth IRA and letting that grow tax deferred so that after age 59 and a half, you'll be able to withdraw money out of that account that is 100 percent tax free. That's a huge financial and tax benefit that you should certainly consider before year end. Why don't you add a little bit more to that, Drew? Yeah, the Roth IRA is is definitely the greatest savings tool we have for retirement. As the illustration shows, the seed for our tree is what's getting taxed. And then you grow this beautiful tree with all this great money on it and you get to take the money off and you don't pay taxes on the money.

So it's fantastic and everyone should consider if they can do it or not. The beauty of looking at a Roth IRA going into December is you have a vision of what your income is for the year and you have limitations on contributions based on what your income was for twenty twenty one. So if your income is basically under about one hundred twenty five thousand dollars as a single person or one hundred ninety eight thousand dollars as joint filers, you should definitely be looking at a Roth IRA and coming into the credit union and talking to us to see if it'll work for you. That's excellent. What a great first tip to consider taking care of before the year end. So we're now going to move over to tip number two, and we're going to talk about some 401(k)s. What can you tell us here, David? 401(k)s are offered typically through an employer or as an employer sponsored retirement plan. They've been around for quite some time now, and many employees should be taking full advantage of this retirement savings.

And again, since we're now getting towards the end of the year, it's always a benefit to evaluate your income at this year, like Drew mentioned in the previous slide. But then also what your income will be next year and give yourself a savings raise of trying to increase your savings. Drew, I'll let you expand more about the comparison of Nick versus Maria and what their savings has done over time. Sure, I'd be happy to. This is a very simple graphic of two individuals who make the same amount of money and started off saving the same amount of money, the same percentage to their 401k plan. Nick maintained that savings rate, whereas Maria, each year, increased her savings rate by one percent or her contribution rate by one percent to her 401k plan until it maxed out at 15 percent.

And you can see that over time, Maria had quite a bit more money. This is after 30 years. She had twice as much money for retirement as did Nick. And you know what? You don't really need to concentrate on anything other than the fact that that right bar looks a lot bigger than the left bar. So with proper planning, we can help our viewers get there. Yeah, just one more comment here. Before year end, everyone should take a look at their 401k statement and see if they maximized. If they're trying to maximize the amount that they can contribute, they should take a look at that and see if they've been able to do that this year, because a lot of people may think that they are maximizing their contributions when in fact they haven't.

Right? Good point. And another thing, I'm not sure if we mentioned it, if you have a Roth 401k option on your plan, if we're talking about a Roth IRAs, certainly Roth 401k option is something that our viewers should be looking into. Can either one of you speak to that for a minute? Yeah, that's an interesting comment, Ewelina, because that's still relatively new in the marketplace and offered through employer 401k plans, but the numbers are astounding how few people are really taking full advantage of that Roth opportunity in their 401k. And what that means is, you can actually contribute more towards your Roth 401k than you can a Roth IRA outside of your employer-sponsored plan. Plus, your income is not a restrictive factor in being able to contribute to the Roth 401K plan. And just add to that, I would encourage anybody, even high income people who really do like the tax deduction that they're getting from their traditional 401k contributions. It's not an either/or situation. You know, if you're not doing either traditional or Roth, you can do some in both.

Personally, I do some in both of mine. I do some in the traditional and I do some in the Roth in my contributions. I do the same thing on my own planning as well. Well, certainly a lot to take in and consider for year end. So we're going to move on to our final tip. Tip three. Health savings accounts, right? HSAs. And who doesn't like the sound of triple tax savings? So, David, what don't you tell us a little bit about that first? The triple tax saving on a health savings account is phenomenal, and many people have completely overlooked this opportunity for their own household and and being able to save tax free money. So what ends up happening. If your employer offers you a high deductible health account, then you can participate in an HSA.

And what you're able to do is contribute on an individual basis or as a family, and that money can be tax deductible as far as the contribution. Once that money is in your HSA, it grows tax deferred. And then when you're ready to start withdrawing money from an HSA for a qualifying medical or health care expense, it's one hundred percent tax free as a distribution. And I want to comment here. As as you come to the year end, some employers are going to contribute some money to your HSA for you. You can add the rest up to the maximum. And you have until April 15th to do that. But the year end is a great time to take a look to see how much your employer has put into that plan for you. And then what is the calculation? What's the amount that you can add to it? Because you can reduce your taxes in your 2021 tax return, you get tax deferral and you can take the money out tax free for qualified health care expenses.

Excellent. So it sounds like there's a lot to get done here working with Team Coastal. So who are we right? Who is Team Coastal? Drew, can you talk to us about how we can help our viewers in meeting these three tips? Putting them into action? Yeah. Whether you're talking to Coastal Wealth Management about these concepts that we talked about today, or if you go into the branch, the credit union, you're going to get a team of experienced people that are going to be able to help you make your contributions, maximize your retirement. At Coastal, they're going to talk to you about your savings account options and Wealth Management.

If you have a more longer term perspective, we're going to show you some investment options for your IRAs. And then, you know, one thing about Coastal Wealth Management is, you know, we have lots of options to help you to find a great solution that you're comfortable with. That fits your risk tolerance and your needs, and we're all working together. So whether you talk to someone at the branch and you tell them, Hey, I'd like to get a better rate of return, than you're offering in that savings account, they're going to bring us into the conversation with Wealth Management so we can talk to you about how we can help. So we're all working together at Team Coastal. And then obviously, if you want to do a financial plan with us, we'd be happy to help you with that. Absolutely. And speaking of that financial plan, for our viewers, if they are not aware, it is a complimentary financial review to meet with our team and discover all the options available to you with Team Coastal, whether that be something that our retail team can help you or our Wealth Management department specifically, we all work together and can hopefully help you reach your goals.

Schedule your complimentary Financial Review with us today. You can call us at 919-882-6655. You can certainly send us an email [email protected]. And of course, you can find us online as well. There are some action items to take here with these three tips before year end. We're happy to help you with that. Thank you again… David Burke, CFS financial advisor, one of our dedicated advisors for being with me here today, and of course, Drew Snider, our financial planning director here at Coastal Credit Union. Thank you for your time today and thank you to our viewers for joining us.

And reach out to us. We'll be happy to help you..

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401K To Gold IRA Rollover

in a volatile Financial landscape imagine having an asset that's been a beacon of stability for Millennia gold are you amidst a career shift or contemplating your retirement security you're not the only one many of us are haunted by the uncertainty of our financial future but there's a gleaming Ray of Hope a gold Ira as you contemplate career changes or even setting up a regular Ira think about the potential of diversifying with gold transitioning from a 401k to a gold Ira is more straightforward than you think especially when you align with the industry's best leading gold Ira providers are not just reliable pillars they're equipped with a myriad of irs-approved precious metals ready to ensure a seamless rollover experience isn't it time to offer your savings the Golden Touch and shield them from the tempestuous tides of the stock market what's a gold IRA rollover ever wondered what a gold IRA rollover is let's dive deep and simplify it for you you can invest in physical gold gold provider stock a gold growth fund or an exchange-traded gold fund the gold must be stored with an IRS approved trustee away from your home thinking about rolling your existing retirement assets into a gold Ira that's a bit more complex and might cost you a bit more you'll need a self-directed IRA for that this special account allows you to invest in a wider range of assets bits then comes the custodian a trusted entity to help set up and manage your gold account they should be federally and state approved and importantly able to store that Shiny Gold for you and lastly to actually get your hands on physical gold you'll need a broker your trustee might know a few good ones picking a broker is crucial they ensure that the gold meets all necessary government standards for inclusion in an IRA at a minimum you want your broker to have the following characteristics certifications ensure your broker is equipped with all vital licenses bonds and insurance to protect your investment record reputation is key look for positive reviews check if they're endorsed by the Better Business Bureau and ensure they have minimal complaints attentiveness your broker should prioritize your needs familiarity with tax laws governing IRAs and a willingness to work closely with you are Essentials the truth about a gold IRA rollover a gold IRA rollover is your Bridge it allows you to transfer your retirement savings steering them into the radiant domain of precious metals here your Investments take a tangible form from gold and silver coins to magnificent bars and bullion but it's not just about ownership it's about security every precious item you invest in Finds Its place in an IRS approved depository safeguarded for your future can I roll my 401k into gold Ira an existing 401K can indeed be converted into a gold Ira or another precious metals Ira to make the switch there's one primary step leaving your current job is essential before making that 401k leap into a self-directed IRA with your newly rolled over funds you can invest in a glittering array of gold and silver assets diff difference between a gold IRA rollover versus gold transfer when diving into the world of gold Investments it's essential to understand the difference between a gold IRA rollover and a gold transfer a rollover is specific to certain situations maybe your employer's retirement plan administrator has shifted or perhaps you've left the company managing your finances even significant changes to your company's pension can trigger a rollover but not all rollovers are made the same there's the direct rollover and the indirect rollover direct rollovers involve assets moving seamlessly from a qualified retirement plan like a four on one k straight into an IRA it's like a relay race passing the Baton directly from one Runner to the next you don't touch the asset until it lands safely in its new home the indirect rollover sometimes called the 60-day rollover to technique has a bit of a detour here the investment reaches your IRA within 60 days of its withdrawal think of it like a layover on a long flight the investment might first be sent to your checking or savings and from there you'll transfer it to your new IRA benefits of rolling over a 401k to an IRA one strong choice is rolling over your 401k into an individual retirement account or IRA it offers flexibility and a wide range of investment options transfer your 401k to your new employer's plan if they have one it's a straightforward path but may limit your investment choices feeling tempted to cash out think twice taking the money now means paying taxes and facing a withdrawal penalty or you could just let it be if your previous employer allows it's the do nothing approach but remember to keep tabs on those funds lower fees with each step on the 401K Journey the byte of management and administrative fees can slowly diminish the green of your savings as these funds can be pricier than the average the money you hoped would grow might just trickle away add to this storm the general annual costs from the Giants who manage these plans of course the Majestic fortresses of 401K plans armed with Millions can access exclusive corridors with fewer costs with an IRA while there will still be expenses you're in the driver's seat you get to choose how where and what to invest in all while having greater control over the fees you shell out lower fees greater control your Investments your way take the key to a brighter financial future more cash incentives these financial institutions with open arms and eager eyes might tempt you with a golden handshake to transfer your retirement funds to their vaults and if Hard Cash isn't the song they serenade you with watch out for the melodious offers of free stock transactions and more relaxed rules on the other hand the Internal Revenue Service or IRS has standardized rules for IRAs this means that an IRA from One bank will have the same rules as an IRA from another another advantage of controlling your tax withholding with an IRA is that your retirement money isn't depleted faster than necessary this allows your Investments to continue to grow compounding tax deferred more investment options ever felt limited with your 401K investment options most 401ks offer only a handful of mutual funds often from just one supplier imagine a world with more freedom in your investment choices from Individual stocks to bonds to exchange traded funds ETFs the possibilities are almost endless more options mean more flexibility to tailor your portfolio to your unique needs and aspirations easier estate planning there's a high chance that after you're gone your hard-earned 401k might just be handed over in a single transaction a lump sum convenient but not necessarily tax friendly most companies prefer the quick Handover primarily so they don't have to manage the account of an employee who's no longer with them on the flip side inheriting an IRA isn't tax-free either IRAs come with more distribution choices it's like being handed a menu giving your beneficiaries options looking for more information with a team dedicated to finding the latest news and information for gold and precious metals IRAs the retired veteran is your 12 son One Source to help you with your investment Journey Don't forget to check them out you can find the link below

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Retirement Planning in Your 50s and Beyond

Your 50s are an excellent time to get serious
about retirement planning, and that's because at this point in your life, you may have figured
a couple of things out. You might have a decent idea of where you
spend money, what your preferences are, the things you don't care for so much, and you
might also have some financial advantages at this point in life. Perhaps you've paid off a lot of debt maybe. If you had kids, they're out of the house
or almost independent. And you might be in your peak earnings years
because you have gained some expertise and some knowledge in whatever it is you do for
a living, and one big reason to get serious is you might have more money than you've ever
had before saved up so now it really counts.

A 10 % loss in the markets, for example, hurts
a lot more than it did when you were 22 years old. But whether you're just getting started saving
for retirement or you've been doing it for decades there are some important things that
come up in your 50s that can help you pave the way to a smoother retirement down the
road. The first thing to watch for is catch-up contributions,
and this is not the condiment, this is a catch-up contribution that allows you to put extra
into your retirement accounts each year once you reach age 50. The IRS sets maximum limits on how much you
can contribute to those accounts, but at 50, you can do a little bit extra and that helps
to boost what goes into those accounts each year for example in your 401k or 403 b or
governmental 457 you can put in an extra six thousand six hundred dollars per year as a
catch-up contribution on top of the max that you had back when you were 49 years old and
your knees didn't hurt as much. For traditional and Roth IRAs, for 2022 that
number is a thousand dollars of extra catch-up contributions.

Of course, this is assuming that you have
the cash flow to make the maximum contribution and put the catch-up contribution on top of
that, and if you don't, that's okay, it's not feasible for everybody, just do what you
can. But if you are really trying to maximize your
account balances at retirement, those catch ups are a powerful tool. The next thing to do is to look at your Social
Security and pension benefits. It's a good time to start getting a realistic
expectation of what you might get, and that's because you might assume that you're going
to get a lot more or a lot less, but it's really helpful to start figuring out how those
systems work and how much you can expect each month.

If you're eligible for Social Security, you'll
want to go through your earnings history and make sure that that is accurate because if
any years are missing you may end up with a smaller monthly retirement benefit. Your benefit is based on your 35 highest earnings
years, so you want to make sure that those good earning years are in there and that you
don't have any unnecessary zeros in your history. Keep in mind that you may be able to get some
retirement benefits from a former spouse or your current spouse, so if you're widowed
or divorced, for example, you want to research those potential benefits and you might also
be able to get income on your spouse's earnings record if you are still married and there,
are some strategies you'll want to look at as you go through that process. By the way, I'm Justin Pritchard, and i help
people plan for retirement and invest for the future. So, there will be some resources down in the
description below that cover this in more detail and give you some other pointers.

Another smart move is to manage your debts
or make a strategy for them. So, if you have consumer debts like credit
cards for example, you definitely want to plan to eliminate those debts and make sure
that your spending stays within your income limits so that you're not digging yourself
a hole during retirement or as you head towards retirement. But what about so-called "good debts" in retirement? For example, a mortgage. There's a lot of benefit to being debt-free
and not having a mortgage payment when you're in retirement a lot of people really focus
on getting rid of that loan before their retirement date but it's not necessarily the end of the
world to have a mortgage in retirement, and paying it off quickly out of your retirement
funds can cause some problems.

As long as you can fit that monthly payment
into your income maybe that's your Social Security, pensions, and some withdrawals from
savings accounts, and you can manage that debt comfortably, then again, it's not the
end of the world, and remember that that loan payment will eventually go away someday which
frees up cash flow for other expenses maybe health care expenses later in life. Speaking of expenses, how much are you going
to need to spend? Well, that's something to start figuring out
and there are a couple of different ways to do that this video that's going to pop up
above will give you some pointers on that but basically you can look at your spending
today and maybe adjust that for inflation or you might look at an income replacement
ratio and say maybe I just need 80 percent of what I'm earning now that might or might
not be right for you or you can target a certain level of spending such as $50 or $100,000
whatever the case may be, and with those numbers you can set a goal to start heading for once
you have an idea of your spending and your retirement income sources and your assets
then you can run some calculations and again we're setting your expectations so that you
know if you're on track or not and this can alert you to some potential shortfalls or
maybe let you know if you could retire earlier than maybe you expected there are a lot of
helpful online calculators out there they can do a decent job of getting you in the
ballpark but make sure you understand what their limitations might be so they don't necessarily
get super detailed and you might not be able to adjust all of the assumptions but again
you can get some basic ideas of if you're sort of close or if you're way off on what
you expected another good move in your 50s is to refine your investment strategy so up
to this point you may have been doing some great things to get you to the point where
you are you've built up some nice assets but if you've been using high risk strategies
maybe speculating maybe day trading that sort of thing it's time to ask yourself if that's
something that you want to continue doing at this stage in life it is difficult to consistently
get good results with those high risk approaches and you might have more to lose now than you
did previously.

I'm not saying you can't do it or definitely
don't do it but I would say proceed with extreme caution and maybe just say hey I've done a
good job up to this point maybe I'll reevaluate what I'm going to do going forward. At 50 it's time to start thinking about long-term
care if you haven't already been thinking about it there's a 70 percent chance that
you might need some type of long-term care and that might include everything from somebody
helping you out at home maybe this is a loved one assuming you have somebody at home who
is willing and able and remember it could be physically and emotionally difficult and
it might require expertise but it could include somebody helping you out at home who you know
or you going into a skilled nursing facility and paying those higher costs that are associated
with that higher level of care there are several ways to deal with the costs and that might
include a long-term care insurance policy but those are kind of problematic so definitely
look into them but consider some other alternatives as well maybe instead of maybe to supplement
or maybe you just go with insurance but some other options include saving up assets and
earmarking those for a long-term care event or maybe looking at your home equity as a
safety net to cover some of those big expenses that's not necessarily a fun way to spend
your time so one of the other things you can do is envision how you want your retirement
to unfold and this is a really important step that a lot of people skip it's important to
have something to do with yourself once you stop working you might have gotten a lot of
your social engagement a lot of your meaning and some of your identity out of your work
and you might want to not necessarily admit that but for a lot of people that's the case
it's easy to say that the main thing you're looking forward to in retirement is not going
to work but you probably want to have some ideas on how you're going to fill your time
and that way you're going to number one enjoy it more and number two there might be some
real benefits in terms of your mental and physical health if you are retiring to something
as opposed to just retiring from work, so ask yourself how will you fill your days? What are you most excited about and interested
in? What can you do to find some meaning and some
purpose during that time? And who might you spend time with, and what
are your plans for keeping your physical health as good as you can possibly keep it? So, I hope you found that helpful.

If you did, please leave a quick thumbs up,
thank you, and take care..

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2 Early Milestones in the Game of Retirement Life

Loren the Game of Life it came out 
in 1960. A board game that you had   in your household growing up? Most definitely we  played lot of games growing up and this is one 
of them. Okay so today what we want to do is we   want to go through the milestones of life we're 
kind of going to do it in numbers. So in a way   we're taking some liberties here the board game is 
like a series of numbers as you move through life.   And as we specifically talk about moving to and 
through retirement what we want to do is give   you strategies give you tips gives you things you 
should be talking to a retirement planner about.   And we'll have a little fun with the Game of Life
along the way. But we should first talk about how we look at every retirement whether you come 
talk with you Loren if you're 55 or 75. We apply five guiding principles to your retirement 
to help you win the game of life.

Yeah there's two   distinct phases of life there's accumulation years 
then there's the retirement years. And when it   comes to those retirement years that's when it's 
important to really start to get organized in the   form of retirement plan. And in that retirement 
plan there are five guiding principles. When   you retire you still need income your W-2 wages 
go away where's the income going to come from?   When you take income you're still going to have to 
pay taxes there's long-term care Medicare planning   legacy planning and then of course the fifth one 
is the investment planning principle. Okay so we   have our cars this is the cutest little thing I've 
got six people in my car because I've got four   children and my husband in here.

Loren has his 
daughter Jace and the little dog Coco no Mocha,   Mocha is in the car with Loren. So Loren like I 
said we're gonna have a little fun with this. Why   don't you spin once for the first time and then 
we won't spin to continue. But we'll get started   on our game. Oh two, alright Loren gets started on 
two. Would you like me to take the, goes he goes   two. And let's draw a card just fun so we can kind 
of refresh ourselves on what the cards are for the   Game of Life. I'll draw the card, I'll answer the 
first one. Alright you go first. Ah get a pool,   I like this first card you probably like that 
Jace would like to get a pool as well. So it says   pay the bank $50,000. Wow, pools are expensive. 
Well, that sounds a lot like today's prices. So   that's the first stop or the first card that we've 
picked on the game of life.

Now the first stop on   your journey to and through retirement as we 
pull the numbers kind of on your board game   is age 50. So you're going through the game of 
life you hit age 50. What should you be thinking   about in terms of retirement? From a retirement 
planning standpoint age 50 is a milestone.   A big portion of this milestone is now you're able 
to contribute more towards your retirement savings   than what you've ever been able to do before. 
If you're under age 50 into your IRA the max   you can contribute is $6,000 but at age 50 you 
have a thousand dollar catch-up contribution.   So a total now of $7,000 but here's 
where the real fun comes into play.  At age 50 is through your employer sponsor plans 
your 401k plans.

Before age 50 you could only   contribute up to $19,500 you get an extra $6,500 
contribution bonus if you will. Once you obtain   age 50 for a total contribution of $26,000. So 
now if you're age 50 or beyond you can actually   contribute the max to your 401k plan. And if you 
qualify from an income standpoint also you can   contribute the max to your IRA. So, the 7,000 plus 
the 26.5 now you can start saving for retirement   and accumulate that wealth a lot more quicker. 
And you ever have conversations with people about   you know is it usually a no-brainer contribute 
that 6,500 or do they have to look at all the   other moving pieces in their life too. Because at 
50 I know I'll still have kids at home, a lot of   people still have kids at home so that 6,500 feels 
like a lot of money. It does feel like a lot of   money and so it's different for everybody. In each 
one of these milestones that we talk about here on   this on this show. The outcomes or the strategies 
that you incorporate with it will be different   for everybody. And that's the necessity of a 
customized written plan as you make the transition   from the working years to the retirement years. 
Your life your circumstances your resources that   you have your cash flow is different than most 
other people.

So your plan needs to be customized   to your circumstance. Okay I have to spin I 
know I cannot spin a two that's not hard to do,   I got three okay I'm gonna take the bus here 
go with me and the four kids we got three. Alright here we go, promotion! 
Your hard work paid off spin again.   So a promotion obviously is a real piece of 
retirement and the nice thing about a promotion is   maybe you can contribute a little bit more to 
that 401k or or do a little bit more retirement   planning as those promotions come along so. Let's 
talk about our next stop on the game of life   retirement style and it's age 55. What do we need 
to know there? Age 55 is an important milestone   because now if you separate service from your 
employer and you have an employer-sponsored plan   now you have penalty free withdrawal privilege. 
And this is a very little known loophole as it   relates to these employer-sponsored plans. So, 
if you're working with your employer you're 56   years old you retire or you get laid off or you 
just decide hey i'm going to go somewhere else   if you take your distributions from that employer 
plan you will not have to pay that 10% penalty   even though you're under age 59 and a half.

So a 
lot of people think 59 and a half I take money out   of my retirement plan I'm going to be imposed 
that 10% penalty but if you take it after you   separate service post 55 from that employer plan 
you don't have that 10% penalty. And when you say   take it can you take it all at once is that the 
best strategy typically or do you want to spread   that out? Well there's a couple different things 
that goes into that. Let's say you can take it   all once so if you have $200,000 underneath your 
employer plan your 56 you leave that employer.   You can take that full $200,000 out but if it's 
pre-tax money meaning it's never been taxed before   it's going to jump you up into a tax bracket that 
is ugly.

So even though you can, you may not want.   So you can't put it in an IRA or something right 
away? You can put it into an IRA but once you do   so now that money lives underneath the IRA rules. 
Which means you cannot take it out until 59 and   a half without the 10% penalty so here's where a 
lot of the planning will come into play especially   if you want to retire prior to 59 and a half. 
Is you may choose to leave that $200,000 there   maybe you have some other IRA money that you know 
you're not going to use until post 59 and a half   or you can say between 56 and 59 and a half you're 
only going to need a 100,000 of that so many times   the employer's plan will allow you to roll the 
100,000 keep a 100,000 there and then you can   use that for the penalty free cash flow.

Thank you 
for watching this clip of retiring today and don't   forget to subscribe. If you have questions
about your retirement plan, take advantage   of the complimentary 15-minute 
retirement checkup phone call..

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How to Invest With a Gold IRA | Madison Trust

Are you looking to invest in something tangible, 
like Gold, Silver, or other precious metals?   Madison Trust's Self Directed Gold IRA 
gives you the freedom to do just that!  Madison Trust works with FideliTrade to 
ensure that you're investing at a fair price.   You can have peace of mind knowing your 
metals purchased through FideliTrade are   securely stored in Delaware Depository's vault.
You can get started investing in the precious   metals of your choice in 6 simple steps:
1. Open a Self Directed Gold IRA Account   with Madison Trust by filling out our easy 
online application and fund your account.  2. Next, you'll open an account online with 
FideliTrade, a Delaware Depository Company.  3. Then, you'll visit FideliTrade's 
Products & Prices page   to pick what you'd like to invest 
in and call to lock in your price. 4. After locking in your price, you'll fill 
out the Trade Confirmation from FideliTrade   and Investment Authorization 
form from Madison Trust.  5. Once all of your paperwork is received, 
Madison Trust Wires your funds to FideliTrade.  6. Last, but most certainly not least, Delaware 
Depository will securely store your metals.

It s that easy! Are you new to self-direction? We re here for you!  Our dedicated Self Directed IRA Specialists will 
provide step-by-step guidance from account set up   all the way to placing your investment.
It s time to give your retirement funds   the golden opportunity to grow with 
a Madison Self Directed Gold IRA..

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Generation Wealth – Official Trailer | Amazon Studios

– If I wanna work 100 hours a
week and never see my family and die at an early age
that's my prerogative. – I would have money as big as this room. And kiss it. – 33 pounds of gold and diamonds
given to me by superstars of the world. – I love money. Come to me. – I've been a photographer for 25 years. With my lens focused on wealth,
I noticed that no matter how much people had, they still want more.

I wanna figure out why our
obsession with wealth has grown. It seemed to be a shift
in the American dream. – I know the name's of the
Kardashians better than I know the names of my neighbors. – This fictitious
lifestyle fuels this sense of inadequacy. – I have the classic Birkin
in almost every color. – The bags start $20,000 and go up. – I realized wealth was
much more than money. It was whatever gave us value. Fame, sex, even plastic surgery for dogs. – It's kind of like the end of Rome.

Society's accrue their greatest
wealth at the the moment that they face death. – If you look great and
you have a nice car, I'm all for it. But at the expense of what? – [Woman] You sell your soul to the devil. – You're so hungry for it you're blinded. – I am on the FBI most wanted list. – All of us are following the toxic dream. – If you think that money
will buy you anything and everything, you've
never ever had money. – Dollars, dinero, money is what it takes..

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How To Invest 2 Million Dollars For Retirement

2 million dollars can pay out $200,000
a year of income. In this episode,
I'm going to address the question that you wouldn't believe how many times is
asked. "How to invest 2 million dollars for
retirement?" Well, the answer is similar to how can I invest a million or 5
million or 20 million or recently a billionaire asked me,
"How can I invest 400 million dollars to have tax-free income?" So, get ready. I'm
going to show you the power behind creating
predictable rates of return that can give you 10 payouts tax-free
for as long as you live.

Hi, I'm Doug Andrew. I'm in my radio
studio right now. I have broadcast a radio show every
single week for the last 12 years. It's called 3-dimensional
wealth radio. And that is also the name of my YouTube
channel. 3-Dimensional Wealth. See, 3 dimensions has to do with the
financial dimension where I've helped people for 46 plus years
optimize their financial assets, minimize taxes and
not outlive their money in retirement. But also there's two other dimensions
that have to do with the wisdom and the experiences you gain in life and how to leave behind your heritage and
how to fish instead of dumping fish to your kids and grandkids laps.
And this is actually a concern for many people
that have several million dollars because they don't want to ruin their
children. So, whenever people come to me and ask,
"Golly, Doug. How to invest 2 million or 5 million or
10 million? A huge lump sum for retirement?" Usually i'm impressed
because they have that much money.

And it's not because they need that
money to generate income but they would like to have the ability,
the option to be able to take income out and not deplete that nest egg.
And so, many times when i find out their goal
and where the money came from, maybe a settlement, maybe the sell of a business,
I have counseled many dentists who sold their dental practice for 2 million

Or one time I had a jewelry store owner
that sold his jewelry stores for 2 million dollars several
years ago. It can be an electrician. Many a chiropractor did
the same thing. Hey, I have I have a couple of million dollars. So,
what advice did I give all of these people when they
asked the question? Well, first of all i wanted to know is
this your main or sole source for income
in retirement? Or is this sort of on top of what you already accumulated?
Now, many times they'd say, "Oh, no. This is like bonus money.
I don't need the money right now but I want it liquid and safe.
That's pretty nice to have an extra couple of million that you really don't
need. But I don't want them to lose that." They
don't want to lose it either. That's why they came. Because they know
that I'm very passionate about preserving principle,
safety of that principle.

They don't want to lose this 2 million.
Many people came across a lump sum like that from an
inheritance where they've been going along and they were responsible and
accountable. And they saved 2, 3, 4, 5 million in their
accounts. Maybe IRAs and 401Ks. But then
all of a sudden they inherited 2 million or more. And they would come
and say, "Golly, Doug. Where can i invest this 2 million in retirement?" So,
whether you need the money for income immediately or not or whether
you want to preserve it so if you did need it in
your lifetime, or you want to pass it on to your
children, you want to maximize what you leave behind,
i know the answer where to put it regardless of which of those goals you
have for a lump sum like 2 million dollars.
You want to hear the answer? If the 2 million
in this example is a lump sum, a windfall or a settlement or something like that,
an inheritance. And they tell me they don't need the money, I go, "Well, I could
show you how to safely set aside that 2 million so it will
double about every 7 years.

Probably at the worst return I've ever
achieved it would double every 10 years. Does that sound pretty good?" They go, "Well,
what rate of return is that?" "Well, rule of 72. If it doubles every 7.2
years that's a 10% rate of return." "Really? You can do that?"
And I said, "Well, Ii can't guarantee it but I've averaged 10.07 for the last 25
years by putting money into a max-funded, tax-advantaged
indexed universal life insurance contract if it's structured correctly.
Where you take the least amount of death benefit
allowed under the IRS guidelines and you put in the most allowed.

In this case 2
million dollars." So, you're taking the least amount of
insurance you can get away with. If you were 60-years old, the least
amount of insurance to accommodate 2 million would be 5 million of insurance.
If you're 70 years old, the least amount of insurance for
2 million might be just over 3 million. Because
the objective isn't to get a bunch of insurance. It's to get the least amount
of insurance the IRS will let you get away with and
put in the most they will allow. In this case the most would be 2 million,
in this example. That's called the GSP. It stands for
guideline single premium. Very few advisors understand this
terminology that's why it's critical you go to somebody
who understands how to do what i'm talking about. So, when you do that,
then the money will grow very safely at internal rates of return of 7 to 10

Bery uh predictable based upon some of the
worst periods since the great depression like 2000 to
2010. I averaged 7.23% just using
indexing. By adding rebalancing, I was able to earn
over 10%. So, your money can double every 7 to 10
years. 2 million will grow to 4 million, to 8 million, to 16 million every 7 to 10
years. Now, if the person said, "You know what?
I want this uh two million dollars to generate
income for me within 5 years from now." I go, "Okay, great." So, then i comply with a
tax citation called Tamra. Tamra is an acronym that stands
for the technical and miscellaneous revenue act
of 1988. This is a strategy that we're the number 1
experts on this part of the tax code in America. We teach very
savvy, sophisticated CPAs and tax attorneys
about TEFRA, DEFRA and TAMRA and section 72 E,
7702 and 101 A of the internal revenue code.
This is where money inside of a properly structured insurance contract
will accumulate tax-free and allow you to access or take tax-free income when
you comply.

Tamara says you can throw in
2 million bucks in one fell swoop into a maximum funded insurance contract
and it will grow tax-deferred at those rates of return.
But if you want tax-free income that tells me, "Hmm, okay.
So, instead of maximizing what you leave behind….
In other words you put in 2 million and you don't need the money.
And when you die you want it to leave behind 5 million.
You don't have to worry about Tamara." You put in 2 million
and when you die, it leaves behind 5 million.
And you can tap into income but it would be taxable income.
So, if you wanted to maximize what you left behind
and you put in 2 million dollars, you don't have to worry about Tamra.
The minimum death benefit is 5 million.

So when you die,
you're leaving behind 5 million totally income tax-free.
But if you want to preserve the right to have tax-free
income, then you want to comply with Tamra.
That means 2 million would allow you to fund it
in 4 years in one day with approximately 20% a year. What's
20% of 2 million? It's 400 000. So, you create
a plan to take 400,000 of the 2 million
every year and put it into the insurance contract.
The first day of the first year, you put in the first 400,000.
The remaining uh million six hundred thousand, we
we find a place to temporarily uh keep it so that it's safe.
And there when we transfer the next $400,000 on the first day of the second year.
You do that for 4 years and 1 day and now you've got 400 000
in there 5 times.

That's 2 million. Now,
after 4 years and 1 day, 2 million dollars can
easily generate $200,000 a year of tax-free
income because 10% payouts are extremely
common with people that we've been helping for more than 45 years.
Especially with indexed universal life insurance contracts. So,
the concept here is if you want it to grow tax-free, it's the
same answer. You just structure it maybe
differently. If you want to maximize what you leave behind when you die,
you don't have to worry about compliance with Tamra.
If you want to grandfather yourself to be able to tap into it totally
income tax-free, you comply with Tamra by funding it over 4 years in one day.
But if you're wondering what to do with a lump sum like 2 million
bucks, I would make sure it is grandfathered to be tax-free.
Not only as it accumulates but if you want
income to be tax free, you make sure it complies with Tamra.
If you want to maximize what you leave behind when you die,
then you take more death benefit and you make sure that when you pass away based
upon your life expectancy, that 2 million can leave
behind 5, 6 or 7 million.

So, let me connect the dots by
sharing an actual story with a client with you right now.
After teaching a seminar, a gentleman who was aged 70 ½
came to me and he had 500,000 which was a lot of money years ago. But
this man was had a net worth well in excess of 5 million. And I was
talking about strategic rollouts where i tell
people to get money out of your IRAs or 401Ks over a 5-year period.
And so, 500,000 would mean that we would transfer 100,000 a year out
of his IRAs each year for 5 years. And then he
would have his 500,000 that could double every 7 to 10
years. And then a 500,000 could generate 50,000
a year of tax free income. He said, "Doug, I don't need this money.
But I know i have to start withdrawing it. I'm going to be penalized 50
by the IRS. I will never be in a lower tax bracket.
I want to pull out the whole 500,000 in one fell swoop."
In a 40-percent bracket, he had done the math.

"I will pay 200,000 in tax. I want to take
the net of 300,000 in one lump sum and maximize what I
leave behind because I don't need the money.
I don't need the income." He said, "I could spend 4 times
what I need to live on and never outlive my money."
What a great blessing that was. So, in that case,
knowing that he did not need it for income,
we took 300,000 and we didn't maximum fund to contract.

I calculated his life
expectancy and we were able to get 1.5 million of
insurance. Sure enough because of his health, he
died in less than 10 years. The 300,000 which was only what it was
worth after tax in his IRAs left behind 1.5 million tax free.
Once he told me his goal, he wanted to maximize what he left behind,
I could have taken his 300,000 and only had about 600,000 of insurance if
he wanted income. He wanted to maximize what he left
behind so I didn't have to comply with Tamra.
And i got 1.5 million for his heirs (which they were grateful for) by
taking the money out of his IRAs which he
already decided to do. 300,000 blossom to a million and a half dollars about a
year later totally tax-free. You analyze what is it that is the greatest
objective when you have a lump sum and taking all things into consideration.
The best solution, the miracle solution in almost every
case is a maximum-funded, tax-advantaged
insurance contract.

So, if you want to learn more about what
that is and how it works and make sure that you structure one
correctly with the right advisor that knows what they're doing, I
would recommend you read this book. This is my 11th book. It's a bestseller.
It retails for $20. But I want to gift one of these to you absolutely
free. So, to claim your free copy, go to L-A-S-E-R, fund, ".com".
You simply pay $5.95 shipping and handling. I'll pay for the book, you pay
for the shipping. You'll have options to get an audio version
if you want. There's also video master classes.
Once you get educated, I can point you to somebody who knows how to do it
correctly if you would like. There's a chapter in this book that
talks about all of the questions you should ask an advisor.

if they can't answer those questions, you'll know they don't understand how to
do it correctly. Empower yourself. You will learn more by reading this book.
The 99% of financial advisors know about what I
just talked about..

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Episode 16: Our top 10 retirement questions answered

Hello and welcome to Super
Insider, where we chat about all things you need to know to make
the most out of your super. I'm Anne Fuchs and I'm the Executive General Manager
of Advice, Guidance and Education at Australian Retirement Trust. Before we begin, I'd like to acknowledge
the traditional owners of the land and waters where we're recording
this podcast today. Now, it's important also just to let you
know that this is general advice only and you'll need to decide
if it's right for you. Now, as part of our Q&A series,
we have some of the team from Member Education joining us,
April Smith and Kane Everingham. And they've got a whole list of
questions that you, our members, and in the community, ask about
what you need to know so you retire well with confidence. So, it's over to Kane and April.

Well, thank you Anne. So, as you heard, you've
got Kane and April here and we're from the Member Education
Team at Australian Retirement Trust. Last financial year, for example, just
to let you know, we did almost 2000 education events across the year and
that was to almost 100,000 people. So we get out and about quite a bit. We get to hear a lot of the questions. And in today's session,
we're going to cover off a lot of the questions that we get around
retirement and planning for retirement. So very popular field, very engaged
people that we come across when we're out and about. So, I want to start with
the first two questions I'm going to start with and I'm
going to say, look, I'd be retired if I had a dollar for every
time these got asked April.

So, the first one there,
what age can I retire? Has anyone asked you that before? Oh yes. I would be have a full
piggy bank by now as well. Beautiful. So, that's a very commonly asked question
and technically the answer to that, when can I retire, the answer is – any time you want. There is actually no set
retirement age in Australia. So, for example, I could retire
right now. I know I don't sound and look it, but I'm actually 47.
I know look like I'm 23, but I'm 47. I could retire right now,
but could I afford to? So, if I had rental
income from properties, if I had money in the bank,
if I had income from shares, inheritance money, I could
technically retire right now.

But, it's like, what are
my sources of income? What am I going to live off? I don't get access to my superannuation
until a certain age. I don't get access to any Age Pension help
till a certain age. So these are the things
you need to think about when it comes to planning your retirement. So, as an ex-financial adviser, a
client always springs to mind here. It's probably the most stark example
I have where she came to see me, and, as you do – hey, you know,
what are you here for today? And she said, I want to see
if I can afford to retire. And I'm like, okay. So I started asking the usual questions.
When you're looking to retire? And she said, well, I'm looking
to retire in two weeks. I've already handed in my notice.
So she was just looking for justification that
she was okay to retire. And so when we did the exercise,
looked at her assets, what she had, what she wanted to do in

When we did the calculations, it showed that
she could only actually do what she wanted to do for the first
6 or 7 years of her retirement. Then she would have spent all her super
and then she would have been subject to whatever the Age Pension
was going to pay her. So that wasn't the lifestyle
she wanted in retirement. After 6 or 7 years, she didn't have enough
super to do what she wanted to do.

So, I wanted to share that
because it really leads me to the next commonly asked question. And I'm sure you've
seen this in the media. How much super do I need to retire on? Now, everyone groans when I give them my
answer, but the answer is – it depends. And just like you heard me share that story with the client, it
depends on what you want to do. So a common example or an exercise I would have taken my clients
through was, you know, travel. What do you want to do with
yourself in retirement? I'll pick on April here. So, April's married to an Englishman. So I imagine, April when you retire, you want to be able to go
home to England and visit. Visit your hubbie's rellies. Yes, yes. I will need to save up
to travel to England. But unlike yourself, luckily your
family all live in Australia, so we might be saving for different things.

That's it. So very big difference. So as April said, my family are
all in South East Queensland. So I don't even have to leave the state. So for April, to visit the family,
she needs to factor in flights, accommodation, hire cars and how often do
they want to go overseas. Versus myself, I've only got to put in half a tank of gas and the furthest I've
got to go is Bundaberg. So very different needs
for how much super we need just on that topic alone.
It can also be cars. Am I looking to upgrade my car regularly? New car, second hand car.

Even things like where I go out to eat. Do I like to go to five star dining
and get my favourite bottle of wine? Or is fish and chips at the local takeaway. Is that what I like to do? So these are the kinds of
things you need to consider when it comes to your retirement
and how much super you need. What does a day look like? What does a week look like
for you in retirement? And you need to have a really good
picture, and that's a fun thing to do. Sit down with your favourite
drink and just dream. What would you like your
retirement to look like? Now, once you've done that, though,
you need to put a price tag to it. So April, could you help us with that? You do need to put an annual
price tag on that dream, Kane. And how can you do it? Well, there's three types of
ways you could actually look at finding how much you need in retirement. So, one of them might be the budget. So you're writing down,
what does electricity cost? What does my travel cost? What does my car cost? What bills am I needing to pay? Now we know, being in those seminars,
we'll have 300 people in the room and maybe about 3 people put their hands up loving that
idea with the spreadsheets.

So it's not always
the most popular one. So let's look at an easy one,
which is the two-thirds rule. So what is two-thirds rule? Basically, if you want to still
maintain the same lifestyle as you are at the moment, what you're doing is you're
looking at your current income and what is two-thirds
of your gross income. So why two-thirds? It's because the average Australian will pay
about about a third per cent in tax. Okay, so there's that two-thirds rule that might make it easier for you. But
maybe you might want a bit of guidance. And how can you actually
calculate or assume how much you might need in retirement? There's a brilliant website, it's called

And what's on that website is what's
called the ASFA Retirement Standard. So what is this? It's basically a survey that
they've gone out and surveyed our current retirees to see
how much money they're spending and what they're spending their money
on. And what you'll be able to see is a comparison between
what our current retirees consider a comfortable lifestyle
versus a modest lifestyle. And this is also assuming that
you do own your own home as well. But they'll go through things like travel,
being able to afford to have two cars, you know, being able to afford private health. So those types of questions
are answered for you. So I highly recommend going
to Now once we've got our plan,
we know how to budget, how are we going to find, Kane, if we're
on track to that ideal retirement? Okay, so great question, April.

So you've thought about what
you want to do in retirement. You've put a price tag to it,
an annual price tag to it. So then we move on to how do
you know if you're on track? A great tip here is have a look
on your superannuation website. A lot of the super funds have
some great tools or calculators on their website. It might be called a Retirement
projection calculator or Retirement income calculator, but effectively
you put in your current situation, I'm 40, I'm working, this is my
pay, this is my super balance. Then, you know, you can project ahead to see, what's my balance going to be
like when I would like to retire? So they're some great tools. Have a look on your superannuation funds' website, and, again, you can
have a look at any of the funds and see what they've got on there.

That's a really useful
tool to do yourself. And, also obviously the most accurate
way is go and get financial advice. So as I shared that story,
to open with that, if you want to know am I on track, you
can go to a financial adviser. They will find out your exact situation now and project it forward to
you with a lot more in-depth calculators and tools then what
you'll get just by yourself. So, alright, I've used the calculator,
Kane, thank you very much, but it's telling me a horrible story,
you know, I'm not on track. There might be a gap. There might be a gap. Exactly.
You might get some horrible things. So this is where you don't smash the
computer, if that's what you're using. There are lots of things you can do
and I applaud anyone that's listening, This is a really great place to start. Educate yourself. So it could be listening
to podcasts like this. It could be, again, having a look
at your superannuation website. They've often got a lot of
educational material on there.

They've got articles, they've
got short videos, some really great resources on there.
Call your super fund. No question too silly. Give your super
fund a call and ask those questions. A really great place to start as well. Also, your your fund might offer
seminars or webinars. I know that's what April and I
do for a living and we love it. That's our bread and butter. And lastly, as I've also mentioned,
you've obviously got financial advice, which is that personalised
plan for yourself. But if I've done that, April, so I've
thought about what I want to do in retirement, I've put a price
tag to it and I'm not on track. What can I do? What can you do? Yeah, exactly. So you found out this gap. How can you bridge that gap? Let's talk about growing superannuation. So we're looking at three
particular things right now. So a way to grow your
superannuation is contributions. So putting money into your
account. Now there is different types of ways you can contribute
to your superannuation. So, for example, maybe a lower income
earner might look to claim a government co-contribution, maybe a higher income
earner might look to salary sacrifice or tax deductions.

Again, something
to call the superannuation fund. There's lots of different types
of contributions you can make. Find out what one's going
to be best for yourself. So your funds in superannuation
are invested. And every dollar you earn on that investment
option is being reinvested. So it's so important to choose the
right investment option for you. And maybe that option might change over
time depending on what your objectives is. Another way to grow super is
how about we reduce costs that we pay. So ask your super fund, is there a way to reduce the
costs of my superannuation? You might be paying insurance
premiums where you may not necessarily need that insurance, but
insurances are also very important. Another question we get is when
can I access my superannuation? And I remember speaking to a lady,
I just came across her in my uniform. She was 63 years of age and she
said to me, I cannot wait to retire.

And I said to her, how come
you're not retired now? And she said, well, I can only
access my super at the age of 67. And this is where there is that real misconception with
when you can access your super. When you can access Age Pension
is either 66 or 67, depending on when you were born. Okay, that's Age Pension. Superannuation is different though.

So superannuation is when you've met your preservation age
and you've permanently retired. So your preservation age, if you're
born after the 30th of June 1964, preservation age would be 60. So if you ceased work over 60,
if you're retired over 60, another age is 65. So that's a magical age
regardless of your working arrangements. But can you access your super
if you're in between? So you're over your preservation
age, under the age of 65. Can you access some of your super? Well, yes, you can look at something that's
called a Transition to Retirement account, otherwise known as
a TTR. Now Kane, take it away. What is a Transition
to Retirement account? Okay, I might take it back a step. So a question we often get asked
is, should I fully retire just working full time then quit cold turkey,
or should I ease into retirement? And that's actually why the government created this thing
called a transition to retirement. The name gives it away. It was invented so that I don't have to keep working full time.
So say I'm doing five days a week, I might want to go down
to three days a week.

I can't live on that reduced income,
so I can access some of my super through this transition to retirement
pension to top up the income I need. So that's what the government
designed it for. It's often a great way to ease into retirement so you
get a better work-life balance. And I think that's very important
because what's often not talked about is the non-financial
side of retirement. So often my purpose, my reason to get out of bed, is my
job and that's my circle of friends. You might be surprised how much
your workmates are your friends. And when you retire, they're gone. They're gone and you don't have
a reason to get out of bed. So, maybe dropping to part-time. Then I'm starting to establish new social
groups, new routines, new habits. And I've got one foot in retirement,
one foot in the work camp. And another key thing that a transition to
retirement can play is when it comes to retiring, it
might be, you know what if I had to still work full-time,
I've got one year left in me.

I just, I can't do it anymore. But if I was able to, and again you
need your employer to agree to this, but if I was able to, say, drop
back to three days a week, I've got that work-life balance. I've got a four-day weekend,
I might find that, you know what, I enjoy that balance and I might
work another 5 or 6 years rather than just one year if I was full-time. So that can actually help you stretch your retirement money because
you're not retiring cold turkey, and just living on super. You've got a bit of income, a bit
of super, so it slows the drawdown on your superannuation. So that's another great consideration to think about with this Transition
to Retirement product. Now, if I'm going to look at a TTR and sorry if I do say TTR, we are
talking about transition to retirement, it'll just shave some time off
and stop me getting tongue tied. But there is some rules around a TTR.
So can you talk to those for us, April? Yes.

So as I mentioned before, rules
and how you can access this account is once you've met your preservation
age and you're under the age of 65. So with this Transition
to Retirement account, you can access between 4% to 10%
of your superannuation account. So what happens is you be moving
that money over to a Transition to Retirement account and then you can
opt to have how that is paid to you. So what frequency? So, for example, as Kane mentioned
there, if you're not wanting to rip the band aid off. And if you're wanting to just drop
down your hours and maybe you receive a fortnightly payment. So maybe you might opt to have
a fortnightly payment sent to you to supplement that loss of income
that you might be able to choose fortnightly, monthly, quarterly
bi-annually or annually. Now as you mentioned before there,
the Transition to Retirement was designed to kind of, as it says,
transition to retirement.

But as a former financial adviser,
Kane, I know advisers actually look to the Transition to Retirement
for another answer. So, why would you maybe
open up a Transition to Retirement account if you're
actually not transitioning? Okay, so good point you raise. So once this product was
released, so it is actually a superannuation product, but
the financial advice boffins got a hold of it and they saw
a way that they could use this in what we call a Transition to
Retirement strategy or a TTR strategy.

And effectively what you're doing
is, it works particularly well if I'm 60 or over, because when I get money out of super and
I'm 60 or over, it's tax-free income. So what are effectively a TTR strategy
is, I am salary sacrificing or making tax deductible contributions into super as much as
I can up to the limit. And then what I'm doing is I'm
starting a TTR pension with my super and replacing that with tax-free income if I'm over 60. If a TTR
strategy is set up well, I'm putting more money into
super through my salary sacrifice or pre-tax contributions than
I am pulling out through my TTR. So overall, my pot of retirement money is
growing even though I am drawing on it. So that is a rather complex reason
why people might use a TTR so they are still working full-time. I don't need extra money. I'm just looking at how can I boost
or accelerate my retirement savings. A TTR strategy could be of
interest to people out there. It is a technical one.

I do recommend do some more homework
on it and I can't stress enough, if you go and see a financial adviser, they can do all the hard work and crunch
all the numbers for you and work it out to the closest dollar for you. So just something to keep in mind with
that, and that does kind of lead me to the next one. You know, talking
about doing it yourself. But is it easy to plan
retirement yourself? Well, firstly, I think you need
to plan retirement yourself. So, as you mentioned, we'll
go right to the start of this podcast, jot down what
is your goals in retirement? What do you want your
retirement to look like? Because ultimately you're the
only person that knows that.

Now, I can also appreciate that
the people that are listening to this podcast might actually be
10, 20, 30 years off retirement. So how can you actually plan
for retirement when you may not necessarily know what you
want to do in retirement? Well, think about it this way,
it's giving yourself options. So if you become engaged with
your superannuation earlier, you might be able to retire
earlier, you might be able to do more overseas travel. And that's why it's so important
to engage with your super to give yourself those options. So once you've jot down those dreams, now you can actually go ahead
yourself and work out, you know, is there any income gaps, see
any calculators, do that. But, as you mentioned, Kane, and especially if you're looking
at the transition to retirement because they can be very confusing,
trying to explain how that works, maybe you might want to seek
some financial advice.

Okay, so contact your super fund, see
if financial advice is available for you. And education is really key, isn't it? So I'm going to get you to take us home, Kane, with the types of education
that we can help ourselves with. Thanks, April. So, look, I just want to stress, if
you're hearing some of this information for the first time, it's that age old saying – the best
time to plant a tree was a year ago. The next best time is today. So with anything that
you're learning around superannuation, it's
never too late to start. Don't ever feel like
you've missed the boat. Because even just making some last minute
small changes can still make a difference to your retirement outcome. So, I really encourage you to apply some
of the knowledge you've heard today and go and find more information. Call your super fund, jump
on their website, have a look at their resources. Listen to podcasts like this,
attend seminars, seek that financial advice appointment to get
that personalised plan for you. Well, that's about all
we have time for today.

We've got some more
Q&A sessions coming up. So if you do have any questions,
we'd love to answer them. Just shoot us an email
to [email protected]. That's [email protected]. Thank you for listening to Super
Insider and we hope you can join us again next time.
Yes, thank you..

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