Hello, and welcome to the Life By Design podcast, brought to you by Strategic.This podcast is all about helping you live your great life.Hello, and welcome back to the Life By Design podcast.This week, I'm joined by Laura Powers, a senior advisor and partner here at Strategic.Hi, Jay.How are you?I'm fantastic.Good .Um, you know, we had you on before talking about the LG- LGBTQ+ community and m- just general kinda like financial planning and insurance, stuff like that.Uh, this podcast, in particular, we're gonna focus on retirement planning, estate, that sort ofSounds great.Great.So I know that in the community, there's definitely challenges with employment and job security.Yeah.And so one of the questions I had was, you know, how can that affect retirement planning for these folks?Yeah.Um, that's a good question.In addition to job insecurity, there's also the concern th- they have oftentimes less mobility.Mm-hmm.Um, what that means is, for example, uh, if they have a hard time finding somewhere else to work, they may very well stay in, you know, a position or with a company that they're not happy with.Mm-hmm.Um, that's the less mobility part, uh, and that can limit them significantly from being able to go on to other, um, you know, other layer- layers within that company or within being able t- or being able to move out and onto another, uh, another endeavor.With job insecurity, that poses a different set of challenges because if you don't have a job that offers a 401, for example, or offers health insurance, it's extremely difficult to meet your day-to-day needs, let alone plan for retirement.Right.Mm-hmm.And if you don't have the ability to save in a retirement plan like a 401or a 403, for example, you know, th- you're missing out on a tremendous savings opportunity for the long term to get you to that retirement goal.Yeah.And I, I think, you know, not just this community but I think everyone too, one of, uh, things that we see sometimes is, uh, people forgetting that they even had a 401- Yeah.like at another company, like, you know, 'cause it was- I find that sometimes with folks, yes .Yeah, yeah.Like years ago, right?And then you're like- Uh-huh."Well, what e- what other stuff do you have?"So, so what's something, um, that, you know, let's say I'm gonna be moving on from a job, like what's something I can do to make sure I'm tracking that and, and keeping- Mm-hmm.that on the forefront of my mind?Well, number one, uh, I would always go to check the beneficiary.Before you even worry about consolidating or rolling that money out or whatever it is, make sure you're checking the beneficiary on that.You mentioned estate planning.Um, that, that's Estate Planning 101 right there is your beneficiaries.Make sure that they designate, name who you want.Mm-hmm.Um, you know, next of kin might not necessarily be recognized in some states.Mm-hmm.And we just don't wanna leave anything up for interpretation when it comes to those things.Um, so, you know, when you're getting into, um, things like retirement planning and you're moving, you're changing a job, you wanna make sure you don't forget about that 401because, well, I guess an easy or a, I guess a low-hanging fruit reason is you wanna make sure that your money is managed properly over the long term.So, you know, you, you invest it in one manner, you leave a job- Mm-hmm.and then it's been sitting out there for 5 years, 10 years.You've forgotten about it.You haven't taken the time to look into your options, haven't made any investment changes.There's a good chance you missed out on some really decent opportunity to change how that investment account is structured- Mm-hmm.and then making sure that it aligns with your goals and your risk tolerance.Yeah.A- and I think, you know, sometimes, uh, depending on where you're going, you have opportunity to like roll it over into your next one.Mm-hmm.But there's also, you know, I think one of the big things sometimes, uh, people forget about is these 401s, these IRAs, those are- Mm-hmm.those are assets, right?They are.And, and depending on the timing and where you are in your life, they can be investable assets.Mm-hmm.And for a lot of people, that's the largest asset that they have, maybe outside of a home.Yeah.If they own a home.Um, and that is not something that you wanna lose sight of.I know, I love, I love that 401s, for example, are such an easy savings opportunity.Yes.Set it up through payroll.You put in your percentage.It goes through like clockwork.Wonderful.That said, oftentimes they don't get the attention that they need, so it goes back to your point of, well, what happens when you change jobs?Right.Well, you wanna make sure that you're not leaving your 401behind as an afterthought .You wanna make sure you're addressing it, you're partnering with a financial advisor to talk about what those options are and make the best decision you can for yourself.Yeah.And so, so I guess back to retirement planning.Mm-hmm.Uh, what are some, what are some good tips for the community in, in that regards?Again, those beneficiaries, number one.Yeah.Number one.Um, also, you wanna make sure when you're looking at retirement planning, it's not just acquiring wealth.It's not just that.It's not just growing your, your net worth.It's also about finding a place where you feel like you belong.Mm-hmm.And so, you know, for example, I've helped clients navigate going into retirement, um, wanting to be in a community that is friendly to LGBTQ.Um, also, uh, there are healthcare nuances with the community, and those folks wanna make sure if they're retiring and they're relocating, for example, that they are going to a place that has healthcare available that they would need or want.And then also, you know, you wanna make sure that you are surrounded by a community that-appreciates you, and has things there for you to enjoy.That's the other part too, it's lifestyle, right?We wanna- Mm-hmm.if we retire and we can go relocate somewhere, you wanna go where you're gonna feel that you are living your best life.Yeah.And, and, and I think, you know, because we may have more of an audience here when we've repeated this before, uh, but one of the biggest things I always like bringing up is that, 'cause for me, I, I, I was always like this where like I just think of retirement as the day I retire.Yeah, yeah.Right?Do you know what I mean?I know.And I don't really, I'm not, like, I'm like going, "Okay, when I have, when I'm 65 or 70, I'm gonna have this much money."Yeah.Um, and, you know, it's just a good reminder for everyone at home that there's a chance you could live to 90.And so like you, you're gonna want to have enough money for whatever that lifestyle or those choices are to- Yeah.to make sure you're gonna be able to afford everything- Mm-hmm.through your full life, not just- Yeah.the couple years after retiring.Exactly.It's not a hard line in the sand, which, you know, w- and we talk to a lot of clients about this is, "Well, when I retire, then I need to, I need to become very conservative in my portfolio."And the response most times is, "No, you probably don't."Yeah.Um, we do wanna be sensitive to risk profiles for our clients, but we also wanna approach it responsibly and make sure that- Yeah.we are guiding them to a strategy that actually offers them the long-term growth opportunity that they need- Yeah.based on their spending.So, that gets into having a spending plan put in place, understanding budgets, and then also, you know, making sure that anything that they want to accomplish in, between now and retirement, so this is, you know, take this back to somebody who's just starting out in the working world.Um, there are going to be a lot of goals that precede retirement.Mm-hmm.Uh, could be building a family, could be buying a home, any of those things, and you wanna make sure that you're creating a path that you can follow.Also, you wanna think about whether marriage is involved or not.There are a lot of LGBTQ couples that choose, for whatever reason, not to become married.So, that's important because if you're building a life together and you don't have that legal union of marriage, you wanna make sure that you're looking at things properly from a tax perspective.Mm-hmm.So, I think of this because we were talking about the 401s and employment, you know, there's a big difference between Roth and pre-tax IRA monies, or pre-tax 401monies.And if you are not married and you are filing independently of each other from a tax perspective, you wanna make sure that you are still taking your planning in at the household level.You don't wanna look at it, you know, too singularly, even if, as a couple, they choose to have their finances separate, no joined ownership on things and all that.You just wanna make sure you're not leaving any opportunities off the table for your long-term union goals- Mm-hmm.to be able to take advantage of some of those, those tax incentives.And understanding the difference between Roth monies and pre-tax monies is a pretty big deal, particularly when you get into retirement and you need to start spending those dollars.Yeah.'Cause, uh, you know, I think, I think a lot of times, um, not just with the savings vehicles- Mm-hmm.but also, you know, one of the big things I've heard, uh, particularly in our retirement master class that we had last year was, uh, folks don't even know that Social Security is taxed.Mm-hmm.So, like- Yep.there's some st- you know, taxes are a huge, uh, uh- Huge.e- part of the equation, uh- Mm-hmm.during retirement as well that you still need to be a p- 'Cause I think for me, this is me.It's wild.No one at home.This is me.I really, that was all wake-up calls to me too.I'm like, "Oh, man.This is, I still have to deal with taxes when I retire?"Like, I think, in your head- Sure do.you're just like, "Retire.I'm done with, like-being a grownup.I'm gonna go-" "I'm gonna go to retirement and be happy now."Oh, it'd be so nice- Yeah.wouldn't it?Yeah.Just stop adulting.Um, no, you're right.Uh, depending upon your earnings in retirement, I mean, you could have up to 85% of your Social Security benefit taxed.Yeah.And so, you know, and putting that together, um, putting that plan together and structuring it for a couple that is married is a bit more straightforward than a couple that is not married.Mm-hmm.And so, that's another, again, that, that's something else we need to be mindful of with LGBTQ retirement planning.Yeah.So the, I think the last kind of topic that I had that I wanted to talk about is, you know, uh, we, we had an episode talking about LGBTQ+ and a lot of other topics.And, and one of the things was kind of like estate planning.And, you know, and you talked about with the 401, like making sure youSo, what if I don't have children or anyone- Mm-hmm.that I want that money to go to?Like, what, what can I do as far as, like, legacy planning and, and thinking about that?Yeah.Well, the last thing you want to do is let the state decide for you.Mm-hmm.Um, and that goes for any individual, right?You wantY- y- we spend our whole lives building toward these goals, and then the one thing we all know for certain is we will ultimately pass away.So, how do you structure your legacy to flow in a manner with which you can be proud of and that goes along with your values and your family dynamic and all of those things?So, with estate planning, say for example you have a couple that they do not have children, but they are very charitable.You want to make sure that you have those charities, all of their information up to date.You want to make sure, again, that's not just on beneficiaries, but also within a will.And you can be very specific within that will.Um, you want to make sure that you're taking advantage of charitable strategies as well, even if it's outside of traditional estate planning.So, ge- going back, all of these things dovetail together, right?So going back to needing to spend monies in retirement.If you have pre-tax monies, for example, in an IRA, you know, you get to a certain age, into your 70s, you're going to be required to spend a good healt- I shouldn't say spend.To withdraw or distributeYeah.a good amount of that account every year for the rest of your life.Yeah.Um, it generates tax revenue for the government, and you don't have to spend the proceeds.You can reinvest them, you can, you know, use them to pay off debt.Whatever it is.You can gift them to a loved one.ButAnd y- and, and you're talking about- Yeah.uh, the RMDs, right?Yes.Required minimumRequired minimum distributions.Look at you!Go, Jay!Hey, I'm learning, I'm learning things.I love it.Using acronyms andTh- through the podcast.You're right.That, yes.So those are called required minimum distributions.Um, but what's really nice about those is there is a, um, there is an al- allowed provision by the IRS allowing us to f- to use another acronym, QCD.Do you know what that is?Nope.Qualified charitable distribution.Okay.Um, so what that does is it allows you to send monies directly from your IRAMm-hmm.to the charitable organization.Um, there's tremendous tax benefits from that versus, um, simply taking monies from an IRA, put them into your checking account, and then making a gift.Hmm.So, um, and, you know, places like, um, places like any nonprofit that you're interested in.It could be, you know, schools.It could be anything.You, uh, just charitable intents, uh, to the extent of the law.And that is actually a function that, and a strategy, that I think a lot of people kind of overlook, 'cause they just get so focused on, "I need to take out- Yeah, yeah.this certain amount."Um, and yes, you do, but there are ways that it can be done that satisfy your charitable intent while also satisfying the IRS requirement.Yeah.And I, you know, I think one thing, uh, too, that, you know, we have heard, uh, is, over, you know, a few times, is that making sure your intentions are within your will and updated- Mm-hmm.at, you know, I don't know the, you know, maybe you have the, like, kind of how often that should happen.But, but because you can think that everything's in order, but, you know, maybe something changed in your life or you found- Mm-hmm.a different charity that you like, or, and something happens and you never ended up making those updates.Mm-hmm.And that's one of the huge benefits of working with a financial advisor is we watch over that with you.Um, certainly not executing the documents.That's why we have our lawyer friends.Yeah.Um, but making sure that it's not a set it and forget it because- Yeah.life for anybody is dynamic.And as your life changes, your goals may change and your plan needs to change along with it.And that estate planning portion that you mentioned is incredibly important.And also, a charity that's here today might not be around in 5 years.Hmm.You know, f- things change for organizations and agencies as well.Yeah.Yeah, so, uh, thanks Laura.I think that was all great information.Thanks for joining me again, and hopefully see you soon.Yeah, absolutely.Thanks so much, Jay.This podcast is for educational and informational purposes only.Please see the full disclosure in our show notes for more information.