5 Retirement Mistakes Most People Don't See Coming

Welcome to the inaugural episode of ClearPath Retirement Radio! Hosts Stewart Smith and Mitch Davies kick off the show by breaking down the most common retirement planning mistakes they see after 24 years of working with retirees in Greenville, Columbia, and the Upstate South Carolina area.

If you've worked hard to build your retirement savings but aren't sure how to turn those assets into reliable income, this episode is for you. 

Stewart and Mitch cut through the confusion and provide clear, actionable guidance on the decisions that matter most when you're approaching or already in retirement.

In This Episode:

• Why retirement is about income planning, not just investment returns
• The biggest Social Security mistake married couples make
• How to create a tax-efficient withdrawal strategy from your retirement accounts
• Roth conversion opportunities you might be missing
• Is Social Security really going away? (The answer might surprise you)
• Healthcare planning and Medicare premium surprises to avoid
• Mitch's Market Minute: What's driving the markets and why uranium is on our radar

 [00:00] Welcome & Introduction to ClearPath Retirement Radio 

 [06:30] Mistake #1: Thinking Retirement Is About Investments, Not Income 

 [15:45] Understanding Withdrawal Order & Creating Your Retirement Paycheck 

 [22:00] Social Security Strategy: When Should You Claim? 

 [28:30] Will Social Security Go Away? What Retirees Need to Know 

 [35:00] Tax Planning: The Roth Conversion Opportunity 

 [45:00] Healthcare Planning & Medicare Surprises 

 [58:00] What Keeps Retirees Up at Night (And How to Get Answers) 

 [66:00] Mitch's Market Minute: AI Infrastructure & Energy Sector Trends 

About ClearPath Retirement:

ClearPath Retirement Planning helps retirees and pre-retirees in the Upstate South Carolina and Columbia areas design comprehensive retirement strategies that address income planning, tax efficiency, Social Security optimization, and legacy planning.

Ready to see what retirement could look like for you?

Visit www.ClearPathRetirement.com or call (864) 775-5033 to schedule your complimentary consultation.

Ready to stress-test your retirement plan?

ClearPath Retirement Planning helps retirees and pre-retirees in the Upstate SC and Columbia areas create tax-efficient retirement income strategies. 

📍 300 Executive Center Drive, Suite 104 | Greenville, SC 29615
 📞 (864) 775-5033

Schedule your complimentary consultation today at www.clearpathretirement.com

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Important Disclosure:

Investment advisory services offered through Alphastar Capital Management, LLC, a SEC-registered investment adviser. SEC registration does not constitute an endorsement of the firm by the SEC nor does it indicate that the adviser has attained a particular level of skill or ability. Fixed insurance products are offered through Clearpath Retirement Planning, LLC and Alphastar Capital Management is not involved in the offer, recommendation, sale or management of commission-based fixed Insurance products. Alphastar Capital Management and Clearpath Retirement Plannin...

Transcript

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Welcome to ClearPath Retirement Radio. From retirement income and tax planning to protecting the savings you've worked a lifetime to build. This is real world financial talk designed for real people, people who want clear answers, not sales pitches, so you can make informed decisions and plan for retirement with confidence. Now, here are your hosts, Stuart Smith. And Mitch Davies. Good morning and welcome to ClearPath Retirement Radio. I'm your host Stuart Smith, and I'm joined by the co-host Mitch Davies here. This is our inaugural show. We are very excited about this, and this show is going to be a lot of fun. We're gonna bring you a lot of great information. And, um, mostly about retirement planning. We're gonna talk about other things from time to time, maybe have some guests on, but this is gonna be a lot of good information about how to plan for retirement and how to stay retired once you get there. Mitch, how you doing this morning? I'm doing great, Stuart. Doing great. Like you said, we're, uh, we're excited to be here. We're excited to get this started and I kind of wanna just open up talking about, you know, why this show exists. I mean, Stewart, you've spent 24 years now, you know, sitting across the table from retirees. People who did everything right, they saved diligently, they worked hard their whole career. And then once that paycheck kind of stops, you know, they felt unsure. They didn't really have a path. That's right Mitch. And most of them it wasn't because they made bad decisions. It was 'cause no one ever helped them connect all the moving parts into a clear plan. And, you know, that's, that's the biggest thing I've learned working alongside you, Stuart. I mean, retirement's not about one decision. It's not about one investment. You know, it's about how the income, picture, taxes, social security, healthcare investments, all kind of interact and come together over time. Exactly. And Mitch, you bring something important to the show as well. You've worked next to me now for almost three years, um, and you recently passed the CFP exam, which um, is a very big deal, and thank you. Very proud of you for doing that, and he brings a fresh perspective and a fresh set of eyes to the planning process, which is very beneficial to the firm, and we really appreciate you for that. Yeah. Thank you. I really appreciate that. I excited to be here. And you know, that's what I've learned again, quickly working alongside you, is that retirees don't need, you know, predictions or this big investment philosophy. They need clarity in retirement. They do. And that's why we were, we, we started this radio show. That's why we're gonna be here every week to walk through the decisions that matter most in retirement, calmly, clearly, and without any hype. And later in today's show, we're gonna be introducing a segment we're gonna do every week. I'm super excited about it. It's gonna be called Mitch's Market Minute, where we're gonna talk about what's happening in the markets and more importantly, what actually matters if you're retired or getting close to it. So we're really excited to bring that up. Yeah, I'm looking forward to that, Mitch. So today for our first episode, we're starting with something foundational. The retirement mistakes that most people don't see coming until it's already cost them a piece of. Their peace of mind. So let's start here with mistake number one. One of the biggest mistakes we see is people thinking that retirement is not about in income. It's about investments. So Stuart, would you say that's the most, you know, common misunderstanding you see in your office over the last 24 years? I think it is Mitch. And you know what people think is that in retirement, you know, it's about the, the double digit returns on their investments. And what we see is really at that point, once you have worked so hard to accumulate the assets and to really. You know, stay focused on growing those assets to a certain point, and now you're ready to transition from that accumulation phase, as we call it, where you're really focused on that and, and with a growth mindset. Into the next phase, which is the distribution phase, where now it's not really about growing assets anymore. It's about protecting and preserving the assets you've worked so hard to grow and to turn those into income in the most tax efficient manner possible. So what you're saying, Stuart, is, you know, once that paycheck stops, once that working income, you're so accustomed to stops, it's about a plan stepping in and actually replacing it. Yeah. I mean, most people get real nervous when they start to think about the idea of that paycheck ending. Right. You know, I mean. It's, it's a scary thought. It's, it's, you know, but what, what they don't understand is if you worked hard enough and you have accumulated, and most people have accumulated enough. Right, right, right. We see that all the time. I mean, people come in and they're scared to death. They don't have enough. And when we do the analysis, we take the deep dive and we really, really run the numbers for them and we show'em how inflation's gonna impact it. We show 'em how, you know, a major market. Correction could, could impact them or a very expensive, skilled nursing care stay. Um, all of those things, you know, impact and, and, and we can model through those things and show 'em that we can actually manage through that with the assets that you've accumulated. And where most people get confused, Mitch, is that they don't see where the paycheck's gonna come from. Right? Right, right. They, they, they're used to getting the paycheck, you know, put into their bank account every couple weeks or so, and they don't see like, how are we going to replace that? And typically the way that happens is we choose a withdrawal order. Yep. Right. On the assets. So we take a look and let's say you have IRAs, you've got a brokerage account, you've got bank accounts, you've got a Roth IRA. You've got, you know, all of these different assets that you've accumulated. What we're gonna do is we're gonna be able to determine. Which, what would draw order, which one of those assets should we start tapping for that paycheck first? And what makes the most sense? When we do that, and we've seen that, that withdrawal order can, man, it can really impact, you can change everything. I mean, change everything. And so you have to be real careful. I think that's the, the, you know, the second biggest thing that people think about is what accounts do I access when. And you're absolutely right, Stuart. I mean, we, we were sitting with a client just the other day, you know, we were talking about a different, some Roth conversion strategies and some different things and, you know, she looked at us and said like, that's great, but where am I getting the money? Right? Right. Like, how, how am I paying for this? Show me, can I get it from this account? How do I get it? And that's, you know, that's some of the most satisfying work we're able to do is, you know, show people on a written plan, right on the, you know, 86 inch smart board. Like, Hey, look like, here's where it's gonna come from. Here's the order that. We're gonna take this money and that how it's actually gonna affect you in the long run, if we take from here versus this. And it, it's crazy the benefits it has just by changing some of those things, right? And I think they get real confused about those very small details about where the rubber meets the road, right? So let's say we are gonna take, you know, money from an IRA first, and, and you know, a lot of times that's the case, but let's say we take money from an IRA, we can actually. You know, take money out of that IRA on a monthly basis, we can go ahead and send the tax money, you know, pay the taxes for you to the IRS for you. Go it just like your paycheck does. Yep. Right? Yep. And then deposit that into your account every month or every two weeks, whatever works for you. And, and actually replace that paycheck much in this exact same manner that you're used to. So you really don't skip a beat there. And a lot of people just don't really understand those fine details when it comes to retirement planning and how they're going to continue that income stream. Absolutely, Stuart. And that's, you know, that's one of the best things we're able to do for people is they, you know, as you get further into retirement, that stuff gets confusing, man. That stuff gets tricky to try to think about holding taxes at the end of the year, so we're literally able to just make it feel like they're still working. Right, and manage all of that for them so they don't have to worry about that. Yeah, and I mean, that takes a lot of pressure off because, you know, it's not only, you know, managing assets, but it's actually. Money management down to the, the finest details of, of making their life easy. And you know, a lot of times people are, you know, they want an emergency fund. They want so much money that they want to carve out and keep aside, you know, maybe in their bank account and that sort of thing. And, you know, we can even kind of, you know, advise you on that. Yeah. And a lot of times that just comes down to what, like. Pure comfort level, right? It does, like different people are comfortable having access to different amounts of money. I mean, we have clients who want six months cash in their bank account, you know, enough to pay expenses for six months. We have some other clients who, who, you know, want, uh, three months or yeah, or one month. And again, that comes out to your comfort level because we can also help you manage through, you know, uh, those emergencies and get you cash. Pretty quickly and, and any type of emergency that you might see, um, typically within about a 24 to 48 hour period, um, on those. And a lot of times one of the mistakes that we see people do is they keep too much cash. Right. Definitely, definitely. Especially, you know, as we've seen over the last few years, we've been in a, you know, higher interest rate environment, right? Yeah. And that's a time where it's, you don't want to keep, you want to have more cash invested in, you know, things like high yield savings account. Things like bonds. We have some great, you know, fixed income portfolios that inflation these days, man, you can't keep cash sitting around. You're just, you're losing purchasing power too quick. And that's a really common mistake we see. Yeah, and I mean, those people who keep a lot of cash, that's not earning any interest or very, very little interest, you know, that's setting you back whether you realize it or not. You know, we have, I understand that it's a comfort level for you, but you know, if you can earn five, 6% on that cash, you know, while it's sitting around waiting to be used, that can majorly impact you on the long term. And you know, you have to have some exposure to earning higher interest rates and maybe even a little bit of risk on some of those assets because listen, inflation's not slowing down. No. And if you don't have some exposure to, to earning some decent interest rates on that money, then inflation will eat your lunch over time. Right? It absolutely will. And you know, that's one of the biggest things people see when they come over to, you know, sit with us, is they are used to just getting investment advice, but we're looking at the whole picture, right? And we're looking at, Hey, I see this 30, $40,000 cash in here. In a checking account, right? How can we take that and maybe earn that five, 6% and we can actually link it to the bank account with, you know, these secure technologies These days we can have it back in the account, you know, in 24 hours. Yeah. Well, listen, we're running to the end of this first segment here. And we really appreciate you guys tuning in and, and to our inaugural show here. Um, if you're interested in more information, you wanna sit down and talk to us, have our team look at the big picture for you, please, uh, go to ClearPath retirement.com or call our office (864) 775-5033. Hey, are you approaching the distribution phase of life where it's time to turn the assets? You've worked so hard to accumulate into a reliable retirement income, and are you unsure how to do that in the most tax efficient way possible? At ClearPath Retirement Planning, we help retirees and pre-retirees design income strategies that aim to reduce taxes, manage risk, and create confidence in retirement. Visit ClearPath retirement.com to schedule a complimentary consultation. Thanks for tuning in to ClearPath Retirement Radio with Stuart Smith and Mitch Davies. Let's get back to the show. Hey guys, welcome back into ClearPath Retirement Radio. I'm Stuart Smith here with your co-host Mitch Davies. And, um, we're having fun today with this. Right? We're having a blast, man. And you know, the next thing we want to talk about is, uh, social security. Yeah. I mean, this is something everyone's gotta deal with and it's, uh, it's actually one of the most. Common retirement, you know, decisions we see people mess up. There's a lot of moving parts and it's often it can be rushed and you can actually make a decision that not only affects you, but you know your spouse if that's in the picture. Absolutely. I think one of the things we see, Mitch, is that, you know. What people don't think through a lot of times is the, the higher earner when it comes to couples, the, the person to married couples, the higher earner is making the decision for both people, right? Yeah. Yeah. The, you know, what happens to social security for a married couple? If one of them passes away, the, they get the higher of the two. The, the survivor, the remaining spouse gets the higher of the two. The survivor gets the higher. Income of the two social securities and the smaller one goes away. Right? And so. When what you have to realize is if you are the higher earner in the marriage and the, and the couple, and you're choosing to take your benefits early. Yep. And you are taking a reduced benefit. Let's say you decide you want to go at 62 where the benefit is reduced by what? About 25 to 30%? 30%? Yeah. It's 30. You're making that decision for both. People, right? So if something happens to you, the other person is, is, you know, stuck with that reduced benefit. Now they're still gonna get the cost of living adjustments Sure. And all of that good stuff. But they are going to have that reduced benefit for the rest of their life. Um, starting from that 20 to 30% less money. And, you know, something else people don't account for a lot is, you know, social security, you know, after full retirement age is actually. It's a pretty good investment. If you think about it. I mean, you're getting an 8% compounding roll up rate, which in, you know, in the market in retirement, when you're trying to invest, you know, more conservatively and you're trying to think about your cash flow. I mean, that, that can be tough to beat. Absolutely. So when you're absolutely what we like to do, you know, one of the most important things you need to do when. Looking at social security is put it in the big picture. Again, this is where we sit down and go through every asset, every expense, and what we find is we can use it strategically. We can maybe lean on some pre-tax money, some different assets that you've built up over time in the first few years, to let that kind of roll up to, you know, for one to help. Both spouses and have that higher benefit, but two, I mean an 8% rolling up at like an income stream that also is gonna get cost of living adjustments is extremely beneficial and can be hard to beat consistently. Yeah, and just to clarify, there. What Mitch is saying is from age, you know, your full retirement age. Yeah. Whatever that is. And for most people it's around 67. 67 notice. Yeah. You know, to age 70 where you have to claim Yeah.'cause it doesn't go up after age 70. So, but in that three year period, let's say your, your full retirement age is 67. In that three year period, you're getting 8% more income each year. You wait. To claim your social security benefit plus cost of living adjustments, which is huge. Huge because at 67 to 70, there's not a whole lot of investments that we would probably feel safe putting you in at that point. That's gonna guarantee you, you know, a. 24% return over three years plus cost of living adjustments. So a lot of times, you know, having that different strategy where you use some other assets to bridge, you know, that period and you lean on those other assets and claim social security later at age 70 makes a lot of sense. It does. And you know, this is, this is something we see, I mean, it feels like almost every week where we've got, you know, a prospect client comes in, right? And they've. Done the break even. You know, they've gone online and they've said, all right, if I have X life expectancy, say I'm gonna live to 90 and I've got, you know, here's my social security at each age. Where does it perfectly cross over? And that's, that's great. But there's a lot of things people miss when they're calculating that. Right. They miss inflation, they miss. The other aspects, you know, that that calculation, that break even analysis isn't considering what other assets you have. It isn't considering what kind of impact we can have with Roth conversion. What does our income look like? What does possible estate problem? You know, there's a lot of factors and it doesn't account for all those things. So, you know, one thing we really like to do is. The break even's great and you know, the math I'm sure can check out, but we like to really sit down and again, understand that whole picture when we're looking at this stuff. And it helps a ton to understand the most optimal way to not only claim the social security, but potentially delay it and use other assets to help get to that point. Absolutely. And I think, you know, there's some other factors that come into play that, that we see a lot of where, you know, we have people come in and sit in our conference room and sit across from us and, and they're wondering when to take social security. And we have the. The, you know, how's your health talk, right? Yeah, that's a big one. And you know, they say, well, you know, hey, I've got some pretty major health issues going on and don't really have longevity in my family. And, and most people are gone, you know, in their early seventies and that, so we hear it all the time. I don't think for that individual, this is a hard decision. Right. If you are one of those people, then you probably want to go ahead and elect it at 62 and get as many checks as you possibly can. Um, so that kind of trumps a lot of this other stuff that you don't need to even really think about. It's like, hey, if you've got major health issues, you don't expect to live that long, then we want to start this as soon as possible. And you know, it's kind of that old adage, do I want. Smaller checks for a longer period of time, or larger checks for a shorter period of time, and you know, everybody's answer is different on that. Everyone's is. And you know, another question, Stuart, you know, we hear this all the time and you know, I've heard you speak about this a ton is, you know, people will come in and say, Hey, I'm in great health, but I'm worried about social security. Right. I'm worried that what if it's gone? You know, what if they're just all of a sudden stop paying? And, you know, what, what do you generally say to that? Well, you know, I've had a lot of thoughts about this over the years and they've changed a, a good bit. But I would say nowadays, one of the thoughts that I have. Is, Hey, you know, I, I get it. Like I understand that, that, you know, you don't feel like, you know, we have a pretty huge national debt. You don't feel like that. There's a lot of stability with the government shutting down here from time to time and those sort of things. But, you know, I, I would say this. Yeah, understanding what I understand now about, you know, over the last two and a half decades of helping people retire, what I do understand is how much of the US economy is actually based on social security. If social security stopped. Tomorrow. I mean, Mitch, how, how many mortgages wouldn't get paid, right? How many people wouldn't be able to put food on the table? How many, you know, very critical services wouldn't be able to be provided to folks. I mean, our economy is, is very, very dependent. On Social Security, and for that purpose, I would say social security is not going anywhere. What I would think would happen, and this is just my personal subjective take on it, is that. You know, they'll chip away, right? Yeah. They'll chip away over time and you know, as you know, as generations age into, into that picture of social security, they're going to, you know, maybe they'll bump. The, the full retirement age up another year, maybe they will, um, make it at some point where you can't elect at 62, you have to wait till you're 64. You know? Yeah. They're gonna do some, some small things over time, but especially for those folks who are, you know, either near Social Security or already drawing social security, I really don't see that that could ever change whatsoever. Based on how much of the economy is actually based on those monthly payments. I completely agree. And we've just, we've seen those fund, you know, technically the fund that runs all this is called the old, old age survivors fund. And we've, we've seen this for, you know, years where they, you see the headline, it's gonna run outta money in what, 20 32, 20 33. Mm-hmm. All these things, things, and again, we're of, we're of the mind that it's just they can't just stop paying it. Right. I mean, we have this debt and we've seen that we continue to just. Climb into the debt to make things work almost. So it's not gonna stop paying like we always say. I mean, if you are planning for social security in 20, 30 years, expect maybe a reduced benefit. Expect some of these, you know, hiccups to happen, but it's not gonna go away for people that are already on it. It would just cause too much problems. I agree. Yeah. And, and again, I mean, we, we see. You know, with, with the advances that we're seeing in technology with artificial intelligence and quantum computing and a lot of the things that are coming into play as, as we speak, I think that what's probably gonna happen is we're gonna see major efficiencies coming through in, in government and major efficiencies, you know, starting to really make a difference in the bottom line. And I think those will be the things that help us. To maintain, you know, the, the. You know, solidify social security as we move forward and make sure that, you know, even as this fund supposedly is exhausted in 2032 or 33 or whatever the current, um, estimations are, that, that, you know, we, we are able to make sure that we're able to continue to pay a hundred percent of those benefits. Um. And again, you know, if, if we couldn't for some reason, I think they would, they would alter it slightly. Yeah. And, and order to accommodate, you know, shortfalls. But, uh, it, it, it's just not going away. I agree. I agree. And you know, another one more point here with social security is we've, we've heard a lot of headlines about. Social security taxes have gone away. Right, right. You know, this is something with the one big beautiful bill I'm sure you guys have all heard about, and to clarify what's happened there is essentially for anybody over the age of 65 in this country, they've added an extra $6,000 standard deduction. On top of the already raised standard deduction for seniors, which is extremely beneficial. And what that did is shifted a lot of people who were close to that social security taxation level out of the range to do that. Right. Which is extremely helpful. Right. And they do phase that out at. About 75,000 for an individual, or 150,000 for a couple. But that is a huge change coming through here. When you go to file your taxes in April, you're gonna be really shocked. A lot of seniors that 65 and older just haven't been able to mentally digest that yet, and that's gonna be a really good thing. Hey, we're coming to the end of our second segment here. Um. We'll be back here in just a few minutes and continue these great conversations. Can't wait. Retirement planning isn't just about growing money. It's about using it wisely. Generating income, managing taxes, planning for healthcare costs, protecting your legacy. At ClearPath Retirement Planning, we specialize in helping retirees and pre-retirees transition from accumulation to distribution with confidence and clarity. If you're approaching retirement and want a plan, not just opinions. Discover the clear path difference. Visit clear path retirement.com today. Welcome to Clear Path Retirement Radio. From retirement income and tax planning to protecting the savings you've worked a lifetime to build. This is real world financial talk designed for real people. People who want clear answers, not sales pitches, so you can make informed decisions and plan for retirement with confidence. Now here are your hosts, Stuart Smith and Mitch Davies. All right, welcome back to Clear Path Retirement Radio. We are so pleased that you join us today. I'm Stuart Smith again. I'm here with my co-host Mitch Davies, and we are talking retirement today. We're talking about mistakes and, and things that we see in the firm every day that that really, you know, um, we're able to bring value and help our clients avoid. And you know, one of those that we see quite a bit of has to do with ignoring taxes in retirement. That's absolutely right Stuart. And you know, we see a lot of people come in and they've, you know, they've saved a lot of pre-tax money, say, and they think, Hey, look like I want to save this as much as I can.'cause when I'm in retirement, I'm gonna be paying lower taxes. Right. I'm gonna be in a lower tax bracket. Yeah. Yeah. We hear it all the time and, and what we've seen over and over time and in time again as we do the analysis and we really take a deep dive on these things is, you know, sometimes they do, often they don't. Right require minimum distribution, social security taxation, Medicare premiums, you know, the widow tax status, surprise people. Uh, the biggest missed opportunity in is the early retirement window before RMDs begin. So, you know, Mitch, we ask this question a lot. Do you think taxes are going down in the future? Definitely not. You know, this is something we ask every time we speak in front of anybody and we never get anybody raising their hand. Right. Right. And that's just like we've mentioned. I mean, we're $38 trillion in debt at this point. It's a deficit that has been increasing, you know, substantially over the last few years. And it's, it's hard to make a case if you look at historical rates, especially in the highest. You know, tax bracket. I mean, we've had back in the early to mid 19 hundreds, we've had a 90% tax rate on the highest bracket. So there's a lot of room to run. So we we're of the mind that taxes are only gonna go up in the future. Absolutely. And you know, like you say, every time we do a workshop on this stuff, we ask that question and nobody raises their hand. And so what it tells us is we're all pretty much of the same mind that taxes are not. Going down in the future. And especially with the, with the deficit that you just spoke about. And you know, the other thing is, is you know, when they passed the one big beautiful bill act, it gave a lot of tax breaks, which was great. Like wonderful. Like I'm glad to have 'em. It really is gonna help our clients. Um. Handle retirement and save money on taxes, but you know, at the same time, that cost us. Right. It does. That cost us, you know, does I've, I've seen estimates in the $5 trillion range Yeah. To, to, to give those tax breaks and, and listen eventually. This stuff has to be dealt with. And what that tells me is eventually we're going to have to raise taxes in order to, to, to, you know, get this deficit down. Uh, if we can't get GDP just through the roof, right. Which maybe we can. Yeah. And I hope we can. Um, we are gonna have to do it through raising taxes. So a lot of times, you know, and we'll talk about this as far as, you know. Tax planning. Um, the most tax planning that we've been doing, uh, in the firm over the last three or four years, without a doubt, is looking at Roth conversion strategies. No doubt for our clients. So, you know, if we're all of the same mine, that taxes are only going to go up in the future. Then, and most of you people out there listening have money, pre-tax money saved for retirement in an IRAA 401k, a 4 0 3 B, on and on and on. If it's pre-tax money, right? You've never paid taxes on that money, you're enjoying tax deferral. For now, then would it make sense if you think taxes are only going to go up in the future, would it possibly make sense to start taking some of that pre-tax money and biting the bullet? Right, and going ahead and paying the taxes on that money now? And getting it over into a Roth account where you can enjoy tax free growth once you get it into the Roth account and you never pay taxes on that money again. It's, it's a beautiful thing, Stuart. And you know, this is one of the most common misunderstandings we see about the Roth account. You know, there's all these different things people hear about the five year rule and, oh, well, don't I need to have a certain income to contribute? You know, when you are still working, when you have. Earned income. You can contribute, you can contribute up to, you know, $7,000 a year. You get an extra 1000 after you turn 50. But as far as you know, a conversion goes as far as, like Stuart mentioned, taking that pre-tax money, paying those taxes and getting it over, there's no limit. You know, we always say the limit is as much as you can stomach paying taxes on. Right? Yeah. Yeah. So. There's no limit. And you know, it's like he said, it's a beautiful thing. It's one of the last real tax quote unquote loopholes we have left where you can get that tax free growth. And you know, sir, it doesn't just affect you. When you get that money to the Roth, it also affects the next generations. Right? Yeah. Absolutely. I mean, if you get that money into a Roth and you're able to grow it significantly before you try to pass it on to the next generation, then you have passed on tax free money and that is a beautiful thing. Now, if you leave it in, in an IRA, we, we know the secure act changed the rules. Yep. On, on that. As far as if you leave the money at an IRA and you leave it to a nons spousal beneficiary, right? So anyone other than your spouse, and they inherit that money. Then there is the new 10 year rule that we have to mention, and basically the way that works is the person who inherits that money now has to move that money to a designated, what we call beneficiary, IRA, or inherited IRA. That money has to be out of that account within 10 years of the date of that person's death and all the taxes paid on it Now. That's, you know, most people say, well, inherited money. I, I, you know, I get it over 10 years. What's the problem? Well, it can be an issue when most the time what this, the scenario that this happens in is a scenario where, uh, a parent is leaving this to a child, right. And so if a parent is leaving their IRA to their children and they pass away at around their normal life expectancy in their eighties, that child is typically what in their fifties? Yep. Right? Your typically in your highest. Earning years Absolutely. In your fifties. Yeah. Um, I know I am. And so, you know, I would say that if you are in your highest earning years and you're in the highest tax bracket you've ever been in making good money and you inherit. Money and an IRA and now you have to take money out of that every year on top of the money. Good money you're already making and pay a higher tax rate on it when you take it out. No. That's not ideal tax planning, right? No, it's not. And it's still, you know, it's still benefit like, like Stewart mentioned, I mean, it's still money or inheriting, which is great, but you know, this is the kind of planning that we're doing every day for clients. This is, you know, we try to look 10, 15, 20 years down the road and it's like we mentioned more important now than ever to be looking at this kind of stuff because taxes are going up. It's, it's a problem on most people's mind, and a lot of people are coming over from, you know, firms that are just doing investment advice. They're just taking the assets, trying to grow 'em, which is awesome, and they're making great returns. But we're really looking at the macro tax picture and saying, how can we optimize this for the next generation, for the grandkids, whatever it is. And we're. Really try to do that. And I think that's probably the area we're bringing the most value right now. Absolutely. And you know, one other thing I'll put on people's radar is if you are a beneficiary of the extra $12,000 standard deduction for that, the one big beautiful Bill Act incorporated for seniors, again, age 65 and older. Um, under the income thresholds of 75,000 for an individual and 150,000 for, uh, couples, which is probably, uh, most of America. Um, then what a better time to be considering over the next three years while you're getting that extra standard deduction to be converting IRA money to Roth money and using that standard deduction to help. Cover the offset, the taxes that you would be would be due on that money. Um, if you haven't considered Roth conversions as part of your retirement plan, then you are missing out. No doubt. And you know, one of the things that we hear constantly when people come into our office is, you know, hey, I've been working with a financial advisor for 30 years. They have given me extremely good investment advice and they have made me a lot of money, and there's nothing wrong with that, right? Um, I did that for, for many, you know, first 10 years of my career, but. They're, you know, they're in a different place now and when you get to retirement, it's not just about good investment advice. No. You have to understand that what we do as retirement planning firm is way more. Than give you just investment advice. We are, you know, doing income planning. We're doing long-term tax planning, right? We are looking at the big tax picture. We are also looking at how healthcare needs fit into that picture. You know, healthcare planning is retirement planning and it has to be up. Part of the big picture. So we are also, you know, in our office we're doing a ton of, you know, estate planning now. Yeah. We are, you know, we are building trust for clients that are helping them avoid probate, helping their heirs avoid probate on their, you know, the. The assets that they wanna make sure they pass cleanly to the next generation. We are doing, you know, we can talk you through if a will is suffice or if you need a trust. Yeah. If you want a living revocable trust, which is an unbelievable instrument to have, um, and can help tremendously with doing estate planning for you. And we can determine, looking at, again, looking at the big picture. You know, when you get to retirement, it's, it's all about all these moving parts and how they work together. You have to understand if you're gonna do Roth conversions, you know, there's something that you have to consider called Irma, which is, you know, most people don't realize that your Medicare Part B premiums are income based. Right, not just your part B, but your part D premium. So if you do a major Roth conversion right before you get to Medicare, um, specifically two years before you get to Medicare at 63, um, then you have to understand that that Roth conversion is considered income in the year that you do it. And so when Medicare looks back two years at your tax returns, which is how they do it, they look every year. They look two years back at your tax returns. To determine whether you're gonna have to pay a higher Part B premium than than you would've because you made a lot of money right? Then you're gonna cause yourself to have to pay a much higher Part B Medicare premium than you might have otherwise had to pay and listen that. Catches people off guard. You have to un again, this is part of what retirement planning does for you. This is part of what we can do for you, is we can keep you from making these type of mistakes. Yeah. Right. We can keep you from, you know, really, um, we can look at the big picture, how all the puzzle pieces fit together, and we can help you to make sure that you're being as tax efficient as possible. We can model through different scenarios, like I say, inflation, um, you know, uh, a major correction in the market, um, you know, an expensive healthcare event, all of those things. Hey, we're coming to the end of this segment, and if you want more information or you'd like to sit with us, please visit clear path retirement.com. Are you a business owner with an email list you are not sure is actually growing your business? Most business owners are just guessing, sending emails, hoping for a click. At Kathy Fair Consulting, we take guesswork out of your email marketing. We help you identify what's working and fix what's broken, turning your list into a reliable engine. For better leads and consistent sales, stop wondering. Start growing. Visit kathy farra.com to book your free email clarity Call today. Let's make your email marketing work smarter. Thanks for tuning in to ClearPath Retirement Radio with Stuart Smith and Mitch Davies. Let's get back to the show. Welcome back to Clear Path Retirement Radio. I'm Stuart Smith and I'm here with Mitch Davies and we are talking all things retirement today, and we are, I'm gonna introduce, uh, the segment that we're gonna do every week here and it's, um, I'm excited about it. Um, it is Mitch's Market Minute where he's just gonna kind of talk about the markets and update you guys on some things. And without further ado. Take it away, Mitch. Yeah. Uh, I'm excited, Stuart. Thank you, man. Uh, this is, you know, I love this stuff. Economics market. This is, I geek out on this stuff. And you know what we wanna do is just take a few minutes here. I want to first start, you know, where we're at today, we're at this week, and I wanna talk about, you know, what's been the. Theme of the last, you know, few months, year, what's really been going on. And then, you know, what's my favorite, what do I like the most coming up, you know, what sector, what, what are we looking at at the firm? What are we, you know, what ideas are we trying to bring to clients? And, you know, where are we at? So this is something we're gonna try to keep every week to just keep you guys informed. I'm gonna keep it as current as we can, but, you know, first exciting thing is we just broke through 7,000 on the s and p. Which is, you know, an awesome milestone. It's first time ever, all time high as of, you know, this morning here and, you know, it's been, it's been a spotty, you know, we we're pretty much where we started the year now and, you know, that's, we're kind of keeping this trend that we had last year of good economic data. Good. Earnings forecasts and growth. And then a lot of, you know, headline type dips, right? Where there's a big announcement, something's going on in the world and the market kind of runs away. You know, we lose a half a, you know, a percent percent and a half on the s and p and we quickly gain it back. That's kind of been the trend we had last year, and we seem to be carrying into this year. So we're trying to be, you know, really. Ahead of, you know, the, what's going on in the economy, what's going on in the world for our clients to, you know, help kind of ease some of the fears with this. Now, you know, looking at last year in particular, we were, we had about a 17% year on the s and p, you know, which is, which is good. And that's even considering we had that big dip in April, I'm sure you guys remember it was a 25, almost 30% dip on the s and p in a really, really short time. That's when the big tariffs were announced and they were, you know, and announced in a super dramatic fashion, which is, you know, another. Trend we've seen, and that causes a lot of fear in the markets. But what we saw quickly is, you know, buyers in the US markets continue to dominate. They continue to step in and scoop up these deals because over the last five, 10 years, this market has just dominated everything. I mean, we've seen incredible growth in 20. 23, we had a, you know, 20 plus percent year in the s and p 24, we saw the same, same sort of thing. So we've seen time and time again, even since COVID. I mean, we've seen buyers step in, in a big way and just take over any of these dips. So this is something that, you know, we've had to remind clients about a lot is, hey, look, this is, you're gonna see these headlines, you're gonna see these, you know, recessions come in, this, that, but like, look at the fundamentals. If we've got these. Positive things going on. So let's stay focused, let's stay calm. You know, we're allocating our clients the right way ahead of time to prevent a lot of these fears. But you know, this is the value, you know, a firm like us can bring. And you know, we look again at last year something, another trend we're continuing is, you know, rate cuts. We were expecting, the market was pricing in, you know, four to five last year. We were thinking, Hey, maybe it won't be that much. And it wasn't. We saw about three, which is still, you know, they all kind of came in at the end and we're expecting a few this year, you know, we'll see. But, you know, the main, I wanna discuss, you know, the main theme that's been driving the markets, and I'm sure you guys know what's coming, but over the past few years it's been ai, right? That's been the talk. That's been what everyone's talking about, and it really started out. As coming, you know, being dominated by what we call the Mag seven, which is basically just the biggest mega cap tech companies in the country. Right. And what's actually been happening recently is we're seeing a shift. We're seeing that, you know, mag seven is still dominating. Of course, you know, you've meta Apple, Google, Tesla, they're still doing amazing. But we're actually starting to see some of these smaller cap companies come in and really explode on the market. They're landing government contracts. I mean, the biggest. Gainer of the last of 2025 was Palantir in the s and p. Right. And it was, it was a big name. Everyone knows Palantir now, and it was started out as a really small company. So we're seeing a lot of these. And you know what, what that's telling us is it's not just hype in these big companies, it's trending into. A more fundamental shift, and AI is kind of everything right now. These companies, it's almost like an arms race that we're in where these, all these companies are fighting for compute power, fighting for all this machine learning, and they're trying to build all this power. And what we saw at the end of last year is a shift to, you know, data centers for the big thing, right? Everyone's. Build all these data centers that are making these deals. So what you know, I'm really focused on coming into this year is, alright, AI is great. Everyone's building all this AI infrastructure, all this stuff, but where are we powering this? How do we literally power this? All this ai. You know, an interesting stat is, you know, for right now about 4% of total US electricity today is used for data centers, and that's expected to double over the next four years. So we could be looking at almost 10% of the electricity that we use in this country is powering these data centers. So, you know, what I wanna focus on is. Uranium in particular. You know, this is something that we brought to a bunch of our clients here. It's like, look, we need to be figuring out how to power all these centers. I mean, right now 20% of US data center electricity comes from nuclear power, and this is probably the most sustainable and most, you know, consistent way of. Generate power for these things, and it's, it's hard. It's expensive. So there's a lot of money being funneled into this. So we're looking at uranium, we're looking at energy companies. We think that's a big theme coming into this year. And that's something that, you know, we're really, again, we're always trying to bring new things to clients and look at that kind of thing. But you know, at the end of the day when you're. In retirement. I mean, this is the kind of stuff that it's hard to keep up with, right? It's hard to stay on top of. So this is, you know, we're trying to bring these ideas to clients so they don't have to worry about it. They don't have to be sitting there trying to study uranium stocks, you know, they're not having to worry about this kind of stuff. So those are the three biggest things I wanna talk about today. That's kind of the, the market minute for the week, and we'll, uh, we'll be excited to check in next week and see where we're at. Well, fantastic, Mitch. That's great stuff, man. Appreciate you bringing that to us. And, um, like I say, that's a segment we'll do every week and hopefully, um, you'll be able to take some nuggets from him and, and, and all of his research. Um, I wanna talk for a minute about, you know, some of the biggest issues that, that we hear when people come in and sit, sit with us and, and, um. You know, we some of the things that keep people up at night. Yeah. Right. So, you know, the first one is always, you know, questions like, have I truly saved enough for the retirement? I want, you know, we, we hear that. That's the number one, that thing that people, people say to us, and, you know, will my income be impacted by taxes and inflation? Right. Like that's a big deal and people need to make sure that they're on top of that and that they understand how those things are gonna impact them. And then again, what happens if the market makes a major correction in the first few years of my retire retirement? Can I manage through that? And finally, uh, bigger than ever, it seems like is the tax thing, right? Yeah. Yeah. Are taxes going to be an issue for me? Am I being as tax efficient as possible? Am I paying more taxes than I need to in retirement? And I tell you, tax efficiency can really make or break a retirement. Yep. Um. Every dollar you don't have to pay in taxes is a dollar you get to keep and enjoy your awesome retirement with. Right? So, um, again, should I, you know, be addressing an expensive healthcare event? Should I be saving for that? Should I have assets set aside to address that type of risk in retirement? And you know, the biggest thing that I see, Mitch, is that people. Truly come into our office and they truly don't think they can get answers to these questions. They don't, they don't at all. You know, they don't, they've never seen this type of stuff laid out in a format that makes sense. You know, they've never seen a. All the assets, all the income, all the expenses, all the tax picture for the next 15, 20 years laid out in a format that's digestible. You know, a lot of these people don't understand this stuff very well and they've been working in, you know, their respective industry for 30, 40 years, and they come in and they just want to feel like they get it. You know, they want to feel like they see it all in a way that actually makes sense, and it's not, you know, we're not trying to sit there. Bring up 30 different charts and hand you this book of crazy stuff that doesn't make sense. You know, we've got a few simple pages that we walk people through and they see, okay, here's where this income comes from. Here's how my income is gonna be taxed. Here's what money I can use to take this trip to The Bahamas next year. You know what I mean? All these things laid out in a way that clearly makes sense to them, and they walk out just feeling confident, and it's something that they haven't really felt before. Right. I don't think most people understand the, the deep dive and high level of planning that we do at the firm. And I think they're absolutely shocked when they come in and we are able to break it all down for them. And what I know is that, you know, in my career I've worked with quite a lot of advisors that, you know, are gonna kind of shoot from the hip and they're just gonna like tell 'em things like they're gonna be fine. Yep. Yep. And no one wants to hear that, Mitch. No one wants to, what they want to be shown is they're gonna be okay. Right. Don't tell them they're gonna be okay. You have to be able to lay it out in, you know, flow charts and, and you know. S you know, basically, you know, shown step by step, here's how we're gonna do this. Here's what inflation's gonna do, here's what a major correction would do. Here's what Roth conversions can do for you to give you more, you know, tax free income in retirement. Here's how we're gonna, you know, pass these assets to the next generation tax efficiently. And you know, we do that. We literally. We have, you know, four or five different softwares, um, mechanisms that we use to, to build out these plans for people. And we walk them through step by step. And as we typically go through this process with people, you can literally see the stress start to leave their body. Yeah. They start to, to smile and, and you know what I love is when we run through this, we take these deep dives, we run the analysis, we're sharing that with them. And what our, what we're telling them is, you need to spend more money. How often does that happen? Yeah. Um, it's a fun conversation to have.'cause we're like, Hey, listen, you know, based on our analysis, even in, uh, you know, worst case scenario, you're still gonna be leaving, you know, $800,000 to your children. Um, do you wanna spend that money or do you want them to. And a lot of times the conversation is, well, no, we need to spend that money, right? I mean, like, they're like, look, we, you know, helped 'em through school. We've given them, they're fine, they're making great money, they're married, they've got everything figured out. Like we, so we're like, look, you guys need to find a way to spend that money. And we can actually show them, hey, if we added another, you know, we'll throw in a travel budget, we'll throw in different budgets and we'll add it to the plan and we'll say, Hey, look, if we threw in an extra 20,000 for. Any, you know, a trip every year, what does that really look like? Yeah. Well, we are coming to the end of this segment and, um, we will pick this back up here in a few minutes. Again, if you are interested in sitting with our team and looking at the big picture for you and getting these questions answered, please visit. Clear Path retirement.com or call 8 6 4 7 7 5 5 0 3 3. Are you anxious to see what retirement might look like for you? Do you feel like you have the pieces of the puzzle but you're not sure how they fit together or where to start? At ClearPath Retirement, we help you bring clarity to retirement by organizing your income taxes, healthcare decisions, and legacy planning into one cohesive plan. Retirement doesn't have to feel uncertain, it just needs a clear path. Schedule your complimentary consultation@clearpathretirement.com. You've been listening to ClearPath Retirement Radio with Stuart Smith and Mitch Davies, helping you make informed decisions so you can plan for retirement with confidence. To learn more, visit ClearPath retirement.com. That's ClearPath retirement.com. Investment advisory services offered through Alpha Star Capital Management, LLL C at S sec C. Registered Investment advisor. SEC. Registration does not constitute an endorsement of the. Firm by the SEC, nor does it indicate that the advisor has attained a particular level of skill or ability. Fixed insurance products are offered through Clear Path Retirement Planning. LLC and Alpha Star Capital Management is not involved in the offer, recommendation, sale, or management of commission-based fixed insurance products. 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