3 Listener Questions that I CAN’T Answer, Ep #94

Yes, you read the title right—there are some questions that I can’t answer. In this episode of the Retirement Made Easy podcast, I dissect questions submitted by Jerry, Dean, and Jean. All three asked great questions that I just can’t answer. So in this episode, I’ll explain why I can’t answer them, the information I would need to give an informed answer, and things each listener needs to question for themselves.

You will want to hear this episode if you are interested in…

• [4:28] Speculative investments are never the answer
• [10:40] Retirement decisions must be made with your significant other
• [15:50] How age differences impact retirement planning
• [16:57] Why joint ownership can be dangerous

Speculative investments are never the answer

Jerry expects the price of a barrel of oil to soon be over $200. He’s wondering if he should shift part of his portfolio to energy stocks and mutual funds to take advantage of the opportunity. It’s a great question that I can’t answer. Why? I need to know more about Jerry’s situation.

• What is a portion of your portfolio?
• What is your risk tolerance?
• What is your overall goal?

I don’t like speculating on things that might happen. I design a portfolio based on each person’s unique situation and what they’re trying to accomplish. How is your portfolio designed to get you to your retirement goals? If you can’t answer that, you need to rethink things.

I met with a potential client who wanted to take half of his portfolio and invest it in GM and invest the other half in Ford. It was his entire life savings from working for 40 years. I told him that I couldn’t work with him. GM went bankrupt and the stock went to zero. Half of his portfolio was gone. Fortunately, Ford stock rebounded. But that was a risk he should NOT have taken. His decisions were based on speculation.

Retirement decisions must be made with your significant other

Dean, a listener from Indiana, is 63-years-old and his wife is 53. He’s retiring in December of 2022. He’s wondering when he should claim his social security, which choice makes the most sense for a pension election, and if he should pay off his house if he has the cash to do so.

There’s so much more I’d need to know to answer these questions. When I look at a husband and a wife, they are a team. Decisions must be made that benefit both of them. If Dean’s wife has great genes and will live far longer than him, he should consider taking the joint survivor option for his pension. Dean didn’t provide lump-sum details (if they exist). Does his wife have a pension? Does he have life insurance? But the key is that a couple needs to make decisions together. So many factors must be discussed with a fiduciary to make the best decision possible.

If you have the cash available and paid off your house, what does it leave in an emergency fund? Generally speaking, I like to see people retiring without a mortgage. Retiring debt-free can be a huge weight off of your shoulders. Then you can spend money on things that will enhance your life in retirement.

How do age differences between spouses impact retirement planning? Listen to hear my thoughts!

Why joint ownership can be dangerous

Jean has recently experienced some sad changes in her life. To make sure that her son is her sole beneficiary, she put his name on her house and all checking and savings accounts. She also changed her will to name him as the sole beneficiary of everything. She’s wondering if she made the right choice.

My answer? I don’t know. You’ve made your son the legal owner of half of everything you own. If he was a rotten person, he could write checks and spend through your accounts. Whenever you name someone as a joint owner of any account, you run that risk. Secondly, if he has debts, someone could come after all of your assets. While hypothetical, these are risks you must be aware of.

What else do you need to be mindful of? Listen to the whole episode for some more thoughts you should consider!