David Scranton:<\/strong> I agree completely. And Chris, we need to leave it there for this segment. Like to have you back one more time. You stay with us also, we’ll be right back with more from Chris Hogan.<\/p>\nOdds are that you’ve already heard the term \u2018the sandwich generation\u2019, and for many of you, it certainly might apply. It’s another byproduct of the fact that people are living longer than ever before. Not only do you have to plan for up to 30 years of your own retirement, but you may also have to consider that your parents, they end up depending upon you at some point for some level of financial support during that time or before that time. Oh, and by the way, you may end up having adult children still depend on you financially at the same time. So there\u2019s your sandwich you have your parents on one side your children on the other, and you’re in the middle. According to the Pew Research Center, about one in seven middle-aged adults, income generation members, that’s about 15%, are providing financial support to both an aging parent and the child. And while the number of adults living in the sandwich generation has increased only slightly in recent years. The financial burden for those for whom it does affect for caring for multiple generations of family members have increased significantly, and it continues to mount.<\/p>\n
As we discussed earlier, healthcare and medical expenses increased at a faster and higher rate than the overall rate of inflation. It means that if your aging parents have significant health issues, and you’re helping to cover these costs, those costs are just going to keep rising. In some cases, baby boomers have had to postpone their own retirements because of the added financial obligations of aging parents and grown children. This can create resentment and a lot of family strife. It can also add to the stress that might already be a tricky situation. You know, we love our families, of course, and we don’t ever want to be in the position of seeing someone we care about as a burden. But, by the same token, none of us would ever want to be a burden to our children or to any of our loved ones. The sad truth is, it does happen. Even if you’ve done an excellent job of building your nest egg. Even if you’re convinced you to have \u201cplenty of money\u201d. That\u2019s because again, it’s about that number. But it’s also about protecting yourself from these other contingencies. The financial number is important for sure, but not everything. Even millions can end up being insufficient, if you haven’t made that paradigm shift from the growth and accumulation stage of retirement planning to the protection and income stage. That’s a stage where you work to develop actual strategies to help make sure you won’t end up being a financial burden to your children, or to better ensure that helping care for your own parents won’t force you to postpone retirement or cause resentment or bad feelings between family members.<\/p>\n
I said at the top of the show that was going to share some actual practical steps that you can take to help become prepared. So I want to share these with you and some of the related challenges of the sandwich generation because it’s an issue that I’ve dealt with more and more with my own clients over the last several years.<\/p>\n
The first thing is to get all the parties involved as early as possible and talk openly about it. You heard Chris Hogan, talk about that just a few moments ago. If you don’t know much or anything about your parent’s financial situation, for goodness sake, find out. Don\u2019t be shy. Even if you think you’re sure that they have plenty of money, don’t be complacent about it and make sure that they haven’t fallen into that trap either. By the same token, re-examine your own portfolio to make sure that you made that paradigm shift from growth to protection and income. Sit down with a qualified financial advisor. Ideally, one who specializes in income and protection and helping people in that stage of life. Provide him or her with all the details of your situation and share your goals and concerns. If that person is the right advisor, he or she will start seeing seven moves ahead on your behalf and helping you be prepared.<\/p>\n
Next, talk specifically with that person about required minimum distributions. Make sure your allocation is right for our RMD\u2019S and that you won’t end up on that slippery slope toward depleting your principal.<\/p>\n
And lastly, talk to your advisor about estate planning if you haven’t already done so. He should be able to put you in touch with a good estate planning attorney to help get you started in this process, which is especially important if you’re part of the sandwich generation.<\/p>\n
But now guess what? It’s time to welcome back Chris Hogan. So, Chris, I know that you’ve been around for a while doing this as I have a teller income generation members about what are what are some of the challenges that you’ve seen that maybe people didn’t have 30 years ago, or maybe even 20 years ago?<\/p>\n
Chris Hogan<\/strong>: Well, I think one of the biggest challenges when you start to think about your future and your dreams, I think one of the biggest challenges that has really grown over the last 20 to 30 years is the threat of debt. Debt is one of those things that it steals not from your now but it also stills from your future. We’ve all seen and heard about that credit card situation, the trillions amount of dollars that are in debt, they’re the mortgage situations, but there’s a newcomer on the scene here in the last 10 or 15 years, and that\u2019s student loan debt. And so, with all these debt types, we’re talking about bigger chunks of debt, but going to really require people to get intentional and focus to be able to attack those, you don’t want to allow those debts to sit around and hang around for 10 or 15 years for the sheer fact that you’re giving up so much future income opportunity by throwing it away by paying interest. And so looking at that, and understanding that threat, and that is that the requirement for you to be able to have a plan and to understand how the market is working. The stock market and how you can best take advantage of 401 k \u2019s and 403 b’s, these are tools that we as individuals have as opportunities through our employers to prepare for a future because pensions are long gone, but writings are very few. And so we have to take that responsibility upon ourselves.<\/p>\nDavid Scranton:<\/strong> Yeah, I love to hear what you say about debt. This is great because I get people coming in all the time. Well, I should keep my mortgage during retirement right days because, you know, I need the tax deduction. So if they have a 4% mortgage, I say, Okay, well, if I could get you a 4% bank CD right now FDIC insured. Would you want to put some of your money in and of course, everyone says, well, of course. Well, if you pay off your mortgage, a penny saved is a penny earned. It’s just like having that CD at 4% you know, but what’s interesting is you and your entire group has been preaching this for decades now. I think that that the tailwind is finally now behind you with this. I was telling somebody earlier today I had one of the first right out of college I had to get a house and I had one of the first what’s called liar loans over 30 years ago. Where if you put down 30% you tell them you make $7 billion a year they don’t even question you and they give you the loan. So we’ve had this cheap money lenient lending policies now for over three decades. But what\u2019s \u00a0finally happening now is it’s getting fixed from the root right the average investor, today is now realizing after two major stock market dropped since the turn of the century that, you know what, I\u2019ve got to be careful, I have to pay down debt, and I’ve got to do the right things with my money. So, are you seeing a philosophical shift is I am now with people after the shellacking they took in the stock market, two of them since the turn of the century?<\/p>\nChris Hogan<\/strong>: Well, I can tell you, you know how Americans are, we are tough, and we’re not scared, right? We’ll keep going. The other problem is, is we also have a short-term memory we tend to forget. And so this, this preaching the message of the threat of debt, and the importance of planning for your future, I think it’s a drum we’re all going to have to continue to beat just so people start to understand and really learn the lesson. And so looking at this, I think is an opportunity for people, especially Millennials and Xennials out there to truly jump in and get intentional on the front end. I would also caution baby boomers and Gen Xers and Gen Yers to really start to be smart as you make these real estate decisions. People will start to make home buying decisions emotionally, instead of with their business mind. These are business decisions that can impact your future. So, you want to go and do with your eyes wide open and understanding and knowing the numbers.<\/p>\nDavid Scranton:<\/strong> Well, I guess maybe I was being overly optimistic. You know, I kind of hope that the headwind was turning into a tailwind, but you’re saying that you and I can’t take our foot off the accelerator. We have to keep preaching the message as long as we possibly can. So, with that in the last 45 seconds or so we have in the segment, what would you say are the top two piece of advice that you want to hear our income generation members, those Americans over the age of 50, that you want to have them here come right from your lips?<\/p>\nChris Hogan<\/strong>: Well, that’s a great question. The first great piece of information I want for them is to understand regardless of where you are, right now, you’re not done yet. It is never too late for you to still chase down progress and to make some realistic changes. You have that opportunity. The second tip is, don’t go it alone. It is so vital and important for you to reach out and find people that have answers to questions that you have. To be able to help you to get on a game plan and understand that game plan is going to put you in a position to not only win for yourself but to be able to provide for your family. So, it’s never too late and seek help as you need it.<\/p>\nDavid Scranton:<\/strong> You know, Chris is so true. So many people have, you know, they try to go it alone and very few people have a combination of the ability to have the proper knowledge, but also the proper stomach for it. As you know, that’s where people make the most mistakes is, they make emotional decisions with their money. So, Chris thanks so much for being with us on the show today. I’d love to have you back if you’re willing to come to join us to some point.<\/p>\nChris Hogan<\/strong>: Well, I sure would thank you again for having me and I look forward to having another conversation with you.<\/p>\nDavid Scranton:<\/strong> Chris. Thanks again, we’ll be back in just a minute with more on the income generation.<\/p>\nToday’s message bears repeating, complacency can lead to disaster. And that movie never gets old, no matter how many times you see it. And no matter how well we may think that we know the road ahead curves and bumps and even clips can indeed pop out of nowhere. And again, all of this is especially true for our generation, the income generation. And again, this for several reasons that we’ve discussed.<\/p>\n
First, the road ahead is longer than ever before, retirees in their 60s need to plan for up to 30 years of financial security and reliable income. In some cases, more than that. Next health care costs. Yes, again, they increase at a faster and steeper rate than other expenses at the current rate, they could quadruple within the next 20 plus years. What’s more, we’re not just living longer. But so our parents, we need to prepare for the possibility that they might need extensive and expensive healthcare down the road and that some of that may fall on us. At the same time, children aren’t flying the nest as early as consistently as they used to, which might also add to our financial burden. And there’s more additional challenges that are unique to our generation that make it crucial to have a financial plan that sees seven chess moves ahead.<\/p>\n
A lot of our fathers and grandfathers probably retired with pensions, and that does still happen, but as Chris Hogan said, less and less frequently. To find benefit pension plans or other traditional retirement packages are mostly a thing of the past. Our generation much more so than our parents is on its own when it comes to creating and maintaining our own retirement accounts. You heard Chris say this just a few minutes ago. And finally, in our most critical years of saving and investing, our generation has already lived through two of the worst stock market crashes in history. The collapse of the housing market and the worst financial crisis since the Great Depression.<\/p>\n
If you think the economy in financial markets have gotten a lot more stable and secure since all that. That they’re just back to normal like the 1990s. Well, that’s probably another kind of complacency that could be extremely dangerous. As we talked about in last week’s show. The odds that a third major market correction won’t occur are extremely slim according to a preponderance of evidence and if you think depleting principal from a mutual fund during a rising or stagnant market is a slippery slope you can bet it gets a lot slippery or in a down market.<\/p>\n
With that let’s welcome back today second guest David Eissman. David is head of Eissman Wealth Management in Acworth Georgia. I mentioned Atlanta but when you’re from Florida, it’s all part of Atlanta. Like me, he specializes in working with investors who are retired or within 10 years of retirement. He’s an SEC-registered investment advisor representative and a staunch advocate of financial literacy and Investor Education. David, welcome to the show.<\/p>\n
David Eissman:<\/strong> Well, thanks for having me.<\/p>\nDavid Scranton:<\/strong> You know, you\u2019ve been in this business for as long as I have, and you’ve trained many advisors over the course of your career as I have. So how have you seen the industry change? How have you seen the financial markets change over the last 30 years or so?<\/p>\nDavid Eissman:<\/strong> Well, think, if you go back, you know, 25,30 years ago, if a client wanted to make a change to their portfolio or one to sell a stock or make a trade, they had to contact a broker. And that took a lot of the emotion out of the equation because generally, it might take anywhere from several hours to even a few days to hook up, you know, with your advisor to make that trade. Today it\u2019s just as simple as going to your computer and hitting a button. And I think that has caused a much greater amount of volatility in the markets and much more uncertainty.<\/p>\nDavid Scranton:<\/strong> Yeah, even another commercial, one of the trading companies where the lady who got a dinner date with a guy or husband, boyfriend, or whomever says, \u201cOh, I just got to make a few trades.\u201d He says, \u201cRight here right now? She says, \u201cOh, yeah. It won\u2019t take long, right here on my phone.\u201d You know, so I think that’s one thing, you’re right. That made it more, is that because it’s an emotional place in your mind that people are making less logical decisions, more emotional decisions?<\/p>\nDavid Eissman:<\/strong> Well, I think that the there’s always been emotion involved in it. But the difference in the past there was some time between the emotional reaction in the actual transaction and today, they, you know, the emotion can be acted on almost immediately. So yeah, I think there’s a great deal of emotion in the markets and I think that causes more of the volatility that we see.<\/p>\nDavid Scranton:<\/strong> \u201cWe just saw but within the last month, we saw the Dow down about 1000 points in a given day. And that’s a big number. So I think you’re absolutely correct. And you know, people do make emotional decisions. It just that now they don’t have a chance to really calm down and think through it. So I think you make a really good point there.\u201d<\/p>\n\u201cDave, stay with us we’ll be back for another segment. So, stay with us if you will, and Income Generation members you stay with us also. Want to talk to David a lot more about some of the changes we’ve seen in the financial markets over the last few years. We right back.\u201d<\/p>\n
Welcome back the Income Generation. We’re talking again with David Eissman.<\/p>\n
David Scranton:<\/strong> \u201cYou know, Dave, it’s funny because we talked about emotions and volatility, right, we just got off a year, that was really high on optimism based upon President Trump. And many would argue that the upside we saw throughout 2017 didn’t make a lot of sense was emotionally driven. But then we’ve seen those emotions now whiplash and the other direction, it seems just over the last month. What do you make of what’s going on in the markets?\u201d<\/p>\nDavid Eissman:<\/strong> Yeah, it’s really kind of funny, David, that what\u2019s perceived as good news, you know, better employment, maybe a little bit of increase in GDP has also triggered the concern about rising interest rates of inflation. It has caused a backward movement in the markets. So, it really goes back to how unpredictable markets are, and sometimes the unforeseen causes of a pullback in the market.<\/p>\nDavid Scranton:<\/strong> Well, you know, the stock market, I can understand that the market is in the spirit of the Olympics, the market seems to have gotten a little bit over the top of its skis, maybe in 2017. So if good news comes out in the market goes down, it’s because the good news wasn’t good enough. But, you know, the interest rate thing is curious to me, even recently when the regional fed presidents came out and said that he was expecting maybe two and a half percent GDP for this year, and maybe less for next year. So, are you as concerned about inflation, as the media seems to be as of late?<\/p>\nDavid Eissman:<\/strong> You know, I’m not really concerned about it. It’s been relatively modest, and I really expected to continue to be fairly modest, we still haven’t consistently crossed the three or 4% growth rate in the economy. And I think until that happens, I think inflation is going to continue to be moderate.<\/p>\nDavid Scranton:<\/strong> Yeah, but what about those experts, all those people on TV that are saying, oh, inflation, worry about interest rates, you know, sometimes the bond market and interest rates overreact, right, we saw, you know, really, within a few weeks in trade and 10-year Treasury go up, you know, six tenths of a percent. Is that an overreaction? You think it will go further? Or do you think it doesn’t matter for most of our Income Generation members?<\/p>\nDavid Eissman:<\/strong> Well, for most of our Income Generation members, it’s not going to be tremendously significant other than we might be able to find some better yield opportunities increased their interest in dividends. You know, I do think that it’s a little bit, you know, overblown. Again, you know, a lot of our newscasts today are hype oriented, and I think you must always be cautious about, you know, how deep you get into, you know, following the trend lines, and really taking a step back and looking at reality.<\/p>\nDavid Scranton:<\/strong> Well, being a bond guy like myself, it’s kind of nice to see the rates go up a little bit. It makes it easier to buy bonds, it makes it easier for clients to get a decent rate of interest, and long-term, that’s all a good thing. So hopefully, nothing dramatic will happen. But hopefully, you’re right. We will see results, slightly higher interest rates. So David thanks a lot for being on the show. I appreciate it.<\/p>\nI\u2019d like to thank today’s guests for joining us for another episode of the Income Generation. I’d also like to thank you, our new and returning viewers. If you’ve done a good job building and growing your nest egg for retirement, you should be proud. For most people, it takes commitment, sacrifice, and good decision making. You have every right to pat yourself on the back. At the same time, though, please understand that it can be dangerous to be overconfident, it may very well be that you saved and built enough. Even more than enough to meet all the challenges you’re facing retirement and most importantly, to achieve your goals. But that might not matter if you haven’t taken the right steps to protect what you’ve grown to anticipate those changes and the creative strategy to meet them head-on. In the end, it\u2019s all about continuing what you started in the growth stage of retirement planning, being a good steward of your money for both you and your family. But being a good steward in the protection and income stage starts with recognizing that it’s a separate stage. It begins within 10 to 15 years of retirement. And it takes a different mindset, different priorities and a whole different approach to the game. I like to call it being good defensive coordinator versus offensive coordinator. It takes the willingness and ability to see seven moves ahead on the chessboard.<\/p>\n
Thanks for watching. If you’re close to retirement, and you really want to know how to protect and maximize your money, it’s essential that you stay informed and up to date and right here is where you can do it on the Income Generation.<\/p>\n
I’m Dave Scranton, your host and thanks again look forward to seeing you next week.<\/p>\n
If you’re not using someone who’s well trained in fixed income and you’re born before 1966, it may just be time for you to break up with that advisor and move on. I would suggest someone who will care for you through these important years of your life. If you need help finding someone call or write us. I’d also like to remind you of the special report entitled The Income Generation this available free to you our loyal viewers online. If you haven’t downloaded your report pick it up after the show.<\/p>\n
If you are near or in retirement, head over to the incomeenegration.com and download your special report written specifically for the needs of the Income Generation, again, those born before 1967.<\/p>\n
I’m David’s Stranton, and you’ve been watching the Income Generation will see you all next Sunday.<\/p>\n","protected":false},"excerpt":{"rendered":"