Mark Rowlette and Damon La Tanzi lead a compelling conversation centered on financial planning tailored for high-net-worth individuals. They highlight the importance of classifying life insurance as an asset class, optimizing tax-efficiency, and ensuring the diligent execution of estate plans. The episode stresses the important need for personalized financial guidance to navigate the complexities of wealth management, and the importance of ongoing education.
Segment 1. Introduction
Segment 2. The Role of Life Insurance in Estate Planning:
Segment 3. Personalized Financial Planning:
Segment 4. Asset Transfer and Generational Wealth:
Segment 5. Estate Planning and Trust Funding:
Segment 6. Charitable Giving and Tax Implications:
Segment 7. Strategies for Tax-Efficiency:
Segment 8. Differentiating Retirement Assets and Investments:
Segment 9. Second Opinions and Estate Planning Review:
Segment 10. Focus on Education and Client Relationships:
Jordan Rich [00:00:03]:
Welcome. This is the retire South Shore radio podcast produced by South Shore Retirement Services, inviting you to get started on the path toward your dream retirement today. Here's the founder and president of South Shore Retirement Services, Mark Roulette.
Mark Rowlette [00:00:18]:
And the theme of today's show is really kind of geared towards what high net worth people should potentially be thinking about doing, not so much for their retirement income, but for just positioning things that they may be leaving to the next generation. That's how I started in this industry. Damon, I'm telling you, like, you don't know that it was estate planning, right? I mean, helping people pass assets from one generation to the next as tax, efficiently as possible is part of what we do here in the office. But it's the only thing that I did right at the beginning of my career. So I have a lot of experience with helping people look at their overall portfolio, not just their investments, their homes, everything that they own and how. How they're going to transition that to the next generation at the path of least resistance. Right. Less taxes, more money going to the people that you love, as opposed to going to the federal government and the commonwealth.
Damon La Tanzi [00:01:09]:
Right. And I think as you move up the net worth ladder, things do get more complicated. It's not that you're not worried about things, just those worries start to change from, will I have enough money for myself to, gosh, am I going to overpay in taxes? And how do I make sure that I can really accomplish the goals that I want? I want to help my grandkids go to college. I want to help my kids buy a house. I want to be able to do this or do that. You know, how do you do that in an efficient way? And of course, people are always happy to get money, right? If someone's giving you money, you're not going to turn it away. But there's right ways or wrong with maybe good ways and bad ways or more efficient and less efficient ways to transition that money. And there are unique challenges that high net worth individuals face.
Mark Rowlette [00:01:48]:
Of course, they still face many of the same challenges that everybody faces, which is, I don't want to pay more in taxes, you know, want to make sure that I have a plan in place to do this or do that. What happens if I get sick? Right. All these things are out there in people's minds, and ultimately, we help our clients navigate through that. Whether you're at the very high end of the spectrum, we have clients like that. Or whether you're, you know, you're more worried about, do I have enough money to make it through retirement. We have clients like that. So I think, Mark, to your point of having the experience in all of these different areas really allows us to bring a unique perspective to it, which we're going to talk about on the show today.
Mark Rowlette [00:02:19]:
We can share stories and share concepts of things that we've addressed or discussed with other individuals that may or may not make sense for you. But if they do, how do you apply them, and what's the financial impact going to be in a positive way for you? Because there's a lot of stuff that people are not even aware of. We have a client that I sat with who has some real estate in and around the Boston area, and he'd never heard of estate taxes. He'd never heard of death taxes. Like, what do you mean? I said, well, if you're worth over a certain amount of money when you pass away, the commonwealth will take x amount as a death tax, and the federal government will take x amount as a death tax. And those numbers can be 40% going to the federal government and 16% going to the commonwealth of Massachusetts. So if you're sitting there with $25 million thinking that I'll use whatever I need, and then my kids or my family or whomever you're leaving money to will get the rest of it, you might want to take a second look at that and look at how your plan is structured, how your estate plan is structured, and really quantify how much money potentially, you're going to push off the table to people that you've never even met. Meaning the tax man. Right? The government, Uncle Sam. So if you haven't had a chance to look at your estate plan, or if you're unsure if your estate plan is up to date, that's why we have this radio show. That's why we have these strategy calls. That's why we have these live events. So pick up the telephone. We have a dedicated number for Wrko. It's 781-579-8224 that's 781-579-8224 retiresouthshore.com is the website. You can register for an event.
Jordan Rich [00:03:54]:
You can schedule a time to chat to us or come down here into the office and Hingham and sit for an hour and see if there's something you could do to put yourself in a better position.
Damon La Tanzi [00:04:02]:
You know, I think we've been using this word high net worth, and I think people are out there listening, probably, and many people who are high net worth think like, that's. That's not me, they're thinking, you know, Bill Gates level of net worth and really how we would define it is very simply, if you are likely to have more money than you need to meet your expenses and do everything that you want to do, then you're probably starting to get to that high net worth category. If you're likely to leave some assets to your kids, grandkids, whomever, charities, then these topics and these issues apply to you. You don't have to be sitting out there thinking like, well, I'm not wealthy. A lot of our clients, Mark, are the kind of the millionaires next door who just worked, husband, wife, both worked hard, saved, saved, saved. They've built up a bunch of investable assets. Maybe they've got a house, a vacation home. Right. It doesn't take all that much in terms of that to then really be tipping over into. I have special considerations I need to be thinking about.
Mark Rowlette [00:04:50]:
Yeah. I think it's so important to look at your unique situation. And sometimes people don't know what they don't know.
Narrator [00:04:56]:
Right.
Mark Rowlette [00:04:57]:
And that's why people like us, Damon, myself, Erica, and the entire team here at Southshore Retirement services, are able to share those ideas and the wisdom of having done this for 25 plus years of what we've helped other people do. And this may be something that's applicable to you, and let's talk about it. Let's talk about the good, bad, and indifferent about this sort of planning. But having that conversation is really the key to knowing if there's something you should do. Damon and I both, we have that client that he said at the end of every business meeting he was ever at during his career, he would say the same question. He said, what question should I have asked that? I didn't ask, or nobody asked that. You think is important at this very moment in time. And it's an open ended question. That's the conversation we want to have with clients, because we're not expecting people to sit down here in the office and know what they don't know.
Mark Rowlette [00:05:47]:
We're expected to sit with them and educate them on, here's a concept that may apply to you, and here's how it works, and here's what the positive impact could be to you and your family. And do we want to implement that? Do we want to continue to discuss that? And that's a lot of the conversations around it.
Damon La Tanzi [00:06:04]:
Let's first start the conversation around your asset allocation and your investments and this idea of kind of the financial junk drawer that we see.
Mark Rowlette [00:06:12]:
Yeah. I posed this question to someone the other day and said, you know, if I gave you a check for a million dollars, would you want it? They said, absolutely. I said, if I gave you a check for a million dollars, but you had to die the next day, would you want it? And they said, absolutely not. I said, well, time is more important than money, right? And I said, if I gave you a million dollars in the next day, you had your health deteriorated for the rest of your life, would you want it? And she said, no, absolutely not. I said, well, health is more important than money. And I said, well, if I gave you that same million dollars, but the next day you were not allowed to talk, meet, see your family or friends for the rest of your life, would you want that? She said, absolutely. That's crazy. I said, so relationships are more important than money.
Mark Rowlette [00:06:51]:
So there's a lot more things that are more important than money. But the ability to know that really the amount of money that you need to do the things that you want to do in retirement is not this huge, big $5 million portfolio. It's the monthly money that you're taking. It's the check that you're taking that you're creating the lifestyle that you want. And when you start evaluating your investments, if you're in a position to be able to see, oh, my goodness, based on what my life is going to look like between now and the time that I pass away, there's going to be x amount, millions of dollars left. How do I best position that investment portfolio for the people that I'm going to leave it to? So you don't have to necessarily take all your chips off the table and stick your money in the bank.
Narrator [00:07:33]:
Right.
Mark Rowlette [00:07:33]:
You might be able to look at your portfolio and say, a certain portion of this money is never going to be used by me, so why don't I just invest it like it's already the kids or it's already the grandkids, right? I still have it. I still have that wait and see approach of not giving away the farm, but why not invest it so it's already like their money now, and that's kind of reevaluating your investment junk drawer that's re evaluating your overall portfolio designations or, you know, allocations to know what money you're going to need for you and what money's not going to be needed for you. And maybe look at it differently. And don't just assume all eggs in one basket.
Damon La Tanzi [00:08:08]:
Right. It's really letting your goals drive what your investment strategy is. And by goals, it might not just be one goal, it's, hey, we know we need income for ourselves. We know we need income in ten years. We want to buy this asset, we want to buy this property, we want to leave money to our kids. And really, when we're setting up plans for clients, we're first trying to understand what are you trying to accomplish, what's important to you? And then building out an investment strategy. Building out a plan to accomplish those goals. And from an investment side of it to your point.
Damon La Tanzi [00:08:36]:
Yeah. Money you need to spend today, tomorrow, in a couple of years, that should be more conservative. Money that's likely to go to your grandkids, let's invest that like it's more your grandkids age and be more aggressive on. And if the market goes down, yeah, no one likes that, but it's not going to change your current consumption one little bit. And because you've got a long time horizon, those investments can come back. So what's about having the right plan for the right bucket of money, or the right part of your money to match up with your goals?
Mark Rowlette [00:09:02]:
Yeah. I mean, the industry's one size fits all and everyone is universally the same based on their age is not. Right. I mean, I disagree with it. Right. If you google, how should a 65 year old invest their money, it'll tell you, but it hasn't got the first clue who you are. It doesn't get the first clue how you're going to use that money, how much money of that is going to need it for your income, versus how much of that money is going to just be an investment. Right.
Mark Rowlette [00:09:24]:
So that old, you know, rule of 100, Damon, doesn't really fly with us. Right. 65 years old, 35% of your money should be in the market. 65% of it should be safe. Well, what if you never need that money? Then that asset is no longer a retirement asset. That's an investment. Right. Retirement asset is money that you need to use during your retirement to fund your lifestyle. An investment isn't the same thing. Right. So looking at your unique individual situation is part of the initial conversations that we will have with the people that we serve. So if you haven't had that conversation with someone, or if you're just in this boilerplate standard, this is how I should be investing, based on how all 65 year olds or 70 year olds or 55 year olds, whatever age you are, that's a reason to pick up the phone, because maybe you're not getting complete, more detailed, in depth advice. So please give us a call at 781-579-8224 that's 781-579-8224 that's our WRKO phone number. And set up a strategy call. You can come down into the office to one of our live events. I know we got a couple coming up next week in Tosca and Hingham on the 23rd and the 24th.
Mark Rowlette [00:10:33]:
Damon. I think as a Tuesday and a Wednesday. Normally they're Tuesday Thursday. They start at 6:30. They're always great events. They're always a good time. We try to keep it light, but I think everyone is on the same page, that this is really, really important stuff. And how you position yourself today could have a massive impact on how you live your life tomorrow. So please reach out and make that call.
Damon La Tanzi [00:10:55]:
Right. And we talk about this at the live events, which is we give a lot of second opinions. People come to us, and let's face it, in this neck of the woods, in this part of the country, in this part of Massachusetts, people have done a great job saving. They've built up substantial wealth, many people. But just because you have a financial person or had a financial person, that second opinion can be critically important. Right? Maybe nothing's wrong with your plans. We see plans from time to time. We're like, hey, this looks really good.
Damon La Tanzi [00:11:19]:
Tweak that or tweak this, and we'll send people on their way. But if there are one or two or three key areas where you really do need help, whether you want our help specifically or not, the point is you'll at least know where you need to focus your attention in terms of, okay, we're doing this, or we're going to leave money here, or we want to buy this property. Whatever your particular goals are, just identifying what do you need to do about it, and then taking some action around it, you'll ultimately feel better for that.
Mark Rowlette [00:11:44]:
And generally, it starts with, like you said, Damon, having the conversations around what the money is going to be used for and then looking at how the portfolio should be designed. And if you're looking at your portfolio unsure about that, well, maybe you do have an investment or a retirement junk drawer. It doesn't mean that the stuff you have is bad, doesn't mean that the amount of money you have is inefficient or insufficient to support your lifestyle. It just means that if it doesn't have a purpose in the stage in life that you're in now, change it to something that does. Right. How you invest when you're 20 and 30 years old generally isn't how you should invest. When you're 50, 60 and 70 years old. But quite honestly, if you're a high net individual and you're looking at your portfolio saying, yeah, I want to continue to grow my wealth, I'm going to live on the dividends and I'm going to do this and that and the other, and I'm going to pass on the money to the next generation.
Mark Rowlette [00:12:28]:
Maybe it is how you should be investing. Maybe in your seventies, you should be investing like you were investing in your twenties and thirties, because you've done so well in your investments. More power to you, I think it's great. But positioning your money and your investments to be able to not only achieve the stuff that you want to do, but maybe massively impact your family for generations is something that should be continuously looked at and evolved and addressed if there's tweaks and changes that should be made. And that's why South Shore Retirement Services is here, to help you to be able to at least know what you maybe didn't know before you get on the telephone with us. So a lot of the things that we think people maybe don't look at is updating their estate plan, right? And it's easy to say that be like, hey, every five years you should look at your wills and powers of attorney and all the rest of that stuff and update it. And people are like, well, nothing's changed, so why do I need change it? But one of the things that I find fascinating or alarming is that I've sat with so many people who have really good, comprehensive estate plans. They've got their will in place, they've got their trusts in place.
Mark Rowlette [00:13:29]:
But guess what? They haven't directed anything to the trust. So all they have is a really expensive piece of paper that they paid an attorney to draft. But the attorney, sometimes it's not even in the attorney's role to say, let's fund this thing, right? And it doesn't mean you have to put all your money into the trust, but at least take a look at your beneficiary designations. If you're leaving money to a trust, you have to tell the money that it's going there, right? Because it's not just going to happen automatically and time and time again, I've seen people with fabulous estate plans don't need to be updated, don't need to be changed, but they're not directing anything.
Damon La Tanzi [00:14:00]:
Nothing's going there, right?
Mark Rowlette [00:14:01]:
Nothing's going to happen. And it's just as simple as helping avoid probate on probatable assets. But it also gets more complicated, especially when your net worth gets up a little bit. Right. In the early nineties, if you had an IRA and your net worth was $675,000 or more, which really wasn't that hard to do, right? If you owned a house and you had some money, any IRA money in excess of that was taxed at 86% to the next generation. Right.
Mark Rowlette [00:14:25]:
Between federal and state income taxes and between federal and state estate taxes, people are blown away by that. I'm like, hey, if you have $1.675 million and a million of that is IRA money, your family's going to get $140,000, and the government and the state is going to get 860. Now, that's not the current code, and I'm not suggesting that it's going back to that, but there's trillions and trillions of dollars in these IRA accounts. Folks have, and they've done really well, and they're very proud of how much they've been able to accumulate during their working lives and during their, you know, lives in general. But you want to make sure that you really stay focused on. It's not about how much you have. It's about how much you and your family get to keep stealing your.
Damon La Tanzi [00:15:06]:
Thanks for stealing my. And you, you say this, I'm going to steal yours. You know, an IRA is an IOU to the IRS, right? There's sort of in the. In the world of assets being passed on to other people, there's good assets and bad assets. Now, of course, at the end of the day, people are happy to get money, but you want to make sure you're leaving the right assets to the right individuals. And think of this example. Let's say you have a son and a daughter, Steve and Stephanie. Right? And Steve is a school teacher, and Stephanie is a surgeon.
Damon La Tanzi [00:15:30]:
And Stephanie is obviously making a lot more money. If you left your IRA asset sort of 50 50 to each of them, Stephanie's paying a lot more in taxes than Steve as a schoolteacher is. Meaning you're trying to give them equal money. Stephanie is not going to get to keep equal money. So the idea might be, leave Stephanie a different asset than Steve. Right. Leave Stephanie a house, leave Steve the Ira. That way, at the end of the day, they'll each get roughly the same amount of money, which is what you wanted to have happen.
Damon La Tanzi [00:15:55]:
So when we're looking at beneficiaries and estate plans, it's not just, okay, yeah, 50% here, 50% there. It's what assets are you leaving. And is that the best asset to leave to that particular person?
Mark Rowlette [00:16:06]:
Yeah. And, you know, when you're getting up to what lots would consider the high net worth or the ultra high net worth individuals, if you're planning to leave money to charity. David, I said it earlier on today on WBZ, on our other show where, you know, I met with a couple who were leaving, you know, about 30% of their money to charity and then the rest to their kids. But the 30% that they were leaving was a property. Right? It was a piece of property they were leaving to a charity that that charity can go around and sell.
Mark Rowlette [00:16:33]:
And then we were leaving the rest of the money, Iras was most of it, and another house to their kids. And I said, well, let's look at this a little differently, right? I mean, why would you leave? Let's say that property was worth $2 million and the 401K or the IRA was worth $2 million. Well, there's no harm. And leaving money to people, right. It's all good, but there's better assets to leave to different types of people. So leaving an IRA to your kids is fully taxable to the kids. Leaving a property to the charity is tax free. Right. Because the charity doesn't pay taxes. RIght.
Mark Rowlette [00:17:02]:
But leave the property to the kids, guess what? They get stepped up basis. They don't have to pay capital gains tax on that, and they can turn around and sell it the next day. And if you leave the IRA to the charity, they don't have to pay taxes on it either because they're a 513. So you've accomplished the same goal, but you've left much more efficient assets to the people who actually pay taxes, meaning your children and grandchildren. So it doesn't necessarily always be a situation that, hey, you've got to massively change your investment portfolio. It's just looking at the big picture of what's the smartest way to put my portfolio or my estate plan together and leave the money that I want to leave to the right people at the right time and have the better tax impact on those dollars. Updating your estate plan is critically important, but also looking at how you're distributing money and what assets you're leaving to whomever you're leaving money to is probably more important than that itself.
Damon La Tanzi [00:17:53]:
Right. And there's legal strategies, financial strategies and insurance strategies that we look at, and it's a very challenging area, Mark. Right. There's no perfect solution. But just because there's no perfect solution doesn't mean we should just ignore the problem and like, hope for the best, right? You've got to hope for the best, but prepare for the worst. So if something does happen and you have a plan in place around it, and one element of that plan for many people is insurance. And that's really one of the areas that we both came from in the past. And I think in our industry, insurance is sometimes a dirty word.
Damon La Tanzi [00:18:24]:
If you ask other advice like, oh, I don't, I don't do insurance. I don't use life, I would never use life insurance. And to us, it doesn't make any sense. It's a tool and there's a time and a place for every tool. If you're changing a light bulb, a hammer is a lousy tool, but if you're hanging a picture on the wall, you need a hammer. So it's just right tool, right situation to make sure that you're getting covered in the way that you need to be.
Mark Rowlette [00:18:43]:
Let me give you an example of a couple that I chatted to about this very thing. So, you know, in our live events, we talk a lot about maxing your tax out, right? So maxing your tax bracket out every year. And why would you do something like that? Well, if you're taking, you know, Social Security and you've got a pension plan, and then you need an extra $45,000, let's just say, to supplement those two things to do the stuff that you want to do, and you take that money from any account that's taxable, right? IRa, 401K, whatever it might be, the last dollar that you take out is taxed at your highest marginal tax bracket, right? But if there's headroom in that marginal tax bracket that inevitably you're going to be in for the remainder of your life, maybe you want to take more money out of the IRA or the 401K, get rid of the taxes now. And we do that a lot via a Roth conversion, taking that, if there's an extra $60,000, it doesn't mean you have to, but you could pay taxes on that $60,000 and put it into a Roth IRA. And let's say you're paying the taxes with a bank account. So now you've got 60, 1 hundred, 80, so on and so forth each and every year, right? But if you're looking at the Roth IRA and saying, listen, no, we're never going to need to use this, right? Well, maybe it makes sense. And this is the conversation I had with this couple to say, let's put $30,000 into a Roth IRA. Let's take the other $30,000, and let's buy another asset class.
Mark Rowlette [00:20:02]:
Let's buy life insurance. It's just dollars when you might need them, right? And we're able to buy about $1.1 million of insurance on each of those individuals for the benefit of the other person. So we know that if one of them dies, the other person gets $1.1 million in a life insurance policy. But if one of them gets sick, the insurance industry has evolved, and they added long term care riders to these policies. That $1.1 million will start paying you $44,000 a month tax free, towards your care. Right
Mark Rowlette [00:20:31]:
4% of the death benefit, and it drives the death benefit down. The benefit of that is, it's a better use of money. You're leveraging up your health now to buy dollars down the road for something that you might need. But if you don't need long term care, unfortunately, we know you're going to pass at some point, and that's a tax free benefit going to your spouse or your kids.
Damon La Tanzi [00:20:48]:
It's really shifting the mindset around life insurance, your example from an expense or income replacement, like, oh, I've got young kids, and I need to pay off my mortgage if I die, to life insurance as an asset class. And we're not saying this fits all of our clients. Many times it doesn't fit, it doesn't work. But where it does fit and it does work, work, it can be a powerful strategy, Mark, to protect against long term care, to provide some assets for the next generation if you don't end up needing it. Right. No matter what happens, there's value in that strategy.
Mark Rowlette [00:21:14]:
Yeah, absolutely. And to your point, Damon, it is a unique thing. It doesn't work for every single situation. But how would you know if it works for yours?
Damon La Tanzi [00:21:22]:
You won't know.
Mark Rowlette [00:21:23]:
You wouldn't. But one way to start that is have a conversation with somebody who does know how that applies and how that could apply to your overall situation. So call the office at 781-579-8224 that's 781-579-8224 set up a strategy call, come over into the office, sit down for 45 minutes or an hour, no cost, no obligation. And let's talk about what you're trying to do and see if what you're doing today is exactly what you should be doing and nothing needs to change. Right. One of two outcomes. We say that all the time, live events. You either find that you're on point, you feel good and confident, about your decisions and your planning, or there's something that you could tweak that would, would put you in a more positive situation, and surely everyone would want to know about that.
Damon La Tanzi [00:22:06]:
Right? And most shows we talk about our trademark process, the all hands analysis, which covers the five key areas that people are thinking about. And we're not specifically going through it step by step, but all of these elements that we're talking about are covered as part of our process because it's not enough to just look at income. It's not enough just to look at your investments. You've got to blend all of that with the tax strategies, with the healthcare, with the legacy and estate planning. And really we're doing that as part of one comprehensive process versus, hey, go figure this out on your own. Go find a tax person and maybe they can help you with that. I think that's doing a disservice to people because they do want to simplify their lives in terms of how many people do I have to explain my situation to all over again to make sure that I get done what I want to have get done? Well, we're really able to do that for our clients as part of that all hands analysis process.
Mark Rowlette [00:22:54]:
Yeah. No, it really has been something that the people that we serve love because it's like a team approach. Right? You're not working with one financial advisor, you're working with a whole team. Everyone knows your situation. Everyone's able to help you. And bringing financial professionals, bringing other people who are professionals in their various fields to the table and helping the client know that it's a, it's like you're the quarterback here. You are the one that's... terrible sports analogy.
Mark Rowlette [00:23:21]:
The most important person on the team because they're probably not, I don't know. I'm Irish so I can get away with it.
Damon La Tanzi [00:23:25]:
That's a good, that's a fairly good analogy, though. I think you got it.
Mark Rowlette [00:23:28]:
But have that team around you because you can't do it on your own. Right. There's too much at stake. There's too much to do. And it's overwhelming for a lot of people. And the easiest thing to do is to do nothing. But that could be the worst thing to do. So please reach out, come to the live event, sit down with someone, sit down with your people that are doing it for you now and make sure that they've addressed everything, that they're not being complacent and they're asleep at the wheel.
Mark Rowlette [00:23:49]:
I think when people start looking at their retirement plans, there's that initial, oh my goodness, I'm going to stop working. How am I going to provide myself with a paycheck? And I think that's part of the income puzzle. Like, what are your goals? What are you going to do in retirement? And once you feel confident and comfortable that you're going to have enough resources in place to do the things that you want to do and not have to worry about running out of retirement, the conversation starts to change, right. Because we talked about investment portfolios, and I often say to clients, you know, like, if you have enough money and you don't need to take the risk that you're taking, what's the point? Like, how is that going to materially change your lives? Well, it probably wouldn't materially change your lives in a positive way, but it could in a negative way if you lost a bunch of money. So if the goal is, I know I have enough money, I know that I can do the stuff that I want to do. And so now I'm thinking about the kids, and let's put some plans and some ideas in place, implement those, and you can see, all right, there's going to be x amount of money going to the next generation. I don't know what it is, 2 million, 5 million, 10 million, whatever you're leaving to the next generation. But if you're able to see it, maybe you want to let them see it, too.
Mark Rowlette [00:24:53]:
Right? It doesn't mean that you're having a conversation with your children and grandchildren to make them lazy. It just means that maybe the pressures that they're feeling in life wouldn't be so much pressure if you were having that conversation. And I've had that conversation with clients of ours saying, why don't you tell them, you know, one person's thinking about, oh, my goodness, I can't retire until x date. And really you start looking at it more from the perspective of, I don't need to have enough money to fund a 30 year retirement for me if my parents are leaving me x amount of money, because 20 years from today, my parents would be 110 years old. So the probability of them being around is probably pretty unlikely. So I'm going to get this cash infusion from inheritance, which is wonderful, but a lot of the clients, Damon, you talked about it the other day. These clients that are up in Vermont, you know, they retired, wanting to spend more time with their sons. And, you know, they found in one of our review meetings, they were like, you know, the kids are working so hard, we barely get to see them.
Mark Rowlette [00:25:52]:
And, yeah, we babysit the grandkids but we want to spend time with the kids. I'm like, tell them that you're leaving the money. Just have a conversation around it, because maybe they're trying to put money away for college, their own retirement. And if they knew that this was coming down the pike, maybe that would take a little pressure off.
Damon La Tanzi [00:26:05]:
Absolutely. If you raise good kids, which of course, most of our clients, if not all of them have done, it's not going to make them into your point. Kids who are wasting the money, it's just going to take a little bit of the pressure off of them. And I think to the point of there's really two ways you can leave money to your family while you're alive or when you're dead. And the reality is many people do a little bit of both. But think about education and the cost of college for your grandkids. If you have them out there, it's gotten so crazy. Well, you have.
Mark Rowlette [00:26:32]:
Terrifying.
Damon La Tanzi [00:26:33]:
You've got two daughters in college or about to be in college. I've got a son who's about to be in college. And, you know, when you look online and on the website, at the cost of it, it's mind blowing. If you were able to help your kids, help their kids, so to speak, that would be a huge thing. But there's good money to use. There's bad money to use. There's right ways to do it. There's wrong ways to do it. And people sort of default to what they've always done, which isn't necessarily the best way. And I know you've talked about this on our other shows and our live events. How can people approach the education idea?
Mark Rowlette [00:26:59]:
Yeah, I mean, I have a client that, you know, was gifting money to the kids to, to their kids. And their kids were taking that money and then paying for college.
Damon La Tanzi [00:27:08]:
Right.
Mark Rowlette [00:27:09]:
Which is awesome that they were able to do that, but they were doing it as an annual gift. And I said, listen, what about if you just write a check directly to the university that your grandkids are going to. Right. Do it now, right. This year, rather than giving your son an annual gift and using that annual gift, and you only have one annual gift per person that you can give it to. If you write a check directly to the university, it doesn't constitute. Right. And it's just little things, I suppose, like my background started in estate tax planning.
Mark Rowlette [00:27:34]:
So it's not tax advice, it's tax preparation. It's tax planning. It's tax strategies around it. It's not, it's not actual filing of the taxes. It's just if you're going to give them the money anyway and it's going to be for university and, you know, where they're going or they're already, you know, enrolled, then give it directly to the university so you can use your annual gift for something else.
Mark Rowlette [00:27:53]:
Right.
Mark Rowlette [00:27:53]:
And for this particular individual, it would have had a big positive impact on them, and they had no idea that that even existed because nobody had told them about. And really, that's, you know, the theme of today's show is to educate people. High net worth, whatever your net worth is, is that there's different ways to look at doing the thing that you're already doing and that might positively impact your bottom line. And how do you know that is talk to people about it. Give us a call. 781-579-8224 781-579-8224 and get the ball rolling, right. Set up a 15 minutes strategy call with myself or Damon or Erica or anyone here in the office that you'd like to talk to about those things. And if the concept that you need is not wealth management, it's, hey, I want you guys to help me with my retirement money.
Mark Rowlette [00:28:40]:
But this is the thing that's really concerning me. That's what we would talk about, right. I don't want to just assume that we know what people's goals and needs and stresses and issues are. That's why we ask those questions on those calls.
Damon La Tanzi [00:28:50]:
It's funny, I met with a couple the other day. They'd come in from one of our live events, and I'd met with them one week and talked about tax strategies and a whole different kind of approach than their existing advisor was talking about. And they had a subsequent meeting with their existing advisor, then came back in to see me after that. And I said, well, how did that meeting go? And the wife said, you know, I waited the whole time for the advisor to basically bring up all this stuff that you had brought up. And I didn't want to prompt her, but I was sort of teasing into the topic, like, what do we do about distributing the money? And it was kind of like, well, we'll just keep doing what we're doing. And that was an eye opener for her, that our industry is just not helping people in the way oftentimes that they need to be helped. It's always like, we'll just keep doing what we're doing. We'll keep doing what we're doing.
Damon La Tanzi [00:29:29]:
And that might be fine, but in their case, you know, she was retiring? That wasn't going to work. And to your point of, oh, we've always just gifted money to our kids. Well, okay, but what if we looked at it like sending the money to the college, just to use your example. It's just a different set of eyes, a different opinion. Because you say this at the live events, you cannot get a second opinion from the person that gave you the first opinion.
Damon La Tanzi [00:29:50]:
Right?
Damon La Tanzi [00:29:50]:
You're not gonna bring your stuff back and say, like, this is all garbage, we shouldn't do this anymore. People don't do that. So getting that second opinion is huge.
Mark Rowlette [00:29:57]:
Listen, there's a lot of great financial advisors out there, and I'm nothing, not disparaging any of them. But if you're at a different stage in life and you need different things out of your portfolio, out of your life, out, you know, of being able to give money to people that you want to give it to, or charity, or whatever it might be, then talk to people who help people with that on a daily basis. Don't assume that just because somebody's in the financial services world, that one size as an advisor fits all. Because there's different types of advisors, there's different types of doctors, there's different types of lawyers. And making sure that you're in the right chair with the right individuals could be the difference between leaving your family $300,000, or could be $3 million. Right? And I'm not saying that I'm a magician and I can create that money, but certainly looking at it from the perspective of it's not just about growing your portfolio. Dale Carnegie said, it's not just the most important thing to have money. It's sometimes more important just to be able to control the money. Right? So having it inside your estate, outside your estate, all of these conversations are things that are really important to high net worth people, but they're not being addressed by every single individual.
Damon La Tanzi [00:31:03]:
We covered a wide range of topics. We talked about making sure your investment plan and your asset allocation matches what the goal for that particular bucket of money is. We talked about updating your estate documents to reflect not only current tax laws and rules and regulations, but what your goals and wishes are. We talked about health care costs, long term care. We talked about looking at your insurance and making sure that's current and accurate and up to date. And probably most importantly, we talked about having that conversation with the people in your life that matter to you most. And maybe your ability to help them financially will take some of the pressure off of them and wouldn't that be nice if, if they knew that and you could then, you know, build some goals around that desire.
Mark Rowlette [00:31:44]:
Yeah. Listen, nobody wants to worry about running out of money in retirement, and that's obviously the first thing that you should be doing. Right? Don't give away the farm to the detriment of your own retirement plan. But if you start looking at your retirement plan and you see that there's going to be money left or a significant amount of money left, then try to position things so you're able to leave the money to the people that you love as tax, efficiently as possible. And that's through proper estate planning, proper development of your overall portfolio and a lot of the things that we talked about today. But it's not going to automatically happen. You have to take that first step.
Mark Rowlette [00:32:19]:
Right.
Mark Rowlette [00:32:19]:
You have to pick up the phone, call your existing advisors, ask them the questions that if there's something that you should be doing differently to leave money to the next generation, you want them to tell you about it. And if they don't, then call us. Sit down with one of the advisors here at South Shore and let's talk about it. Right. We have clients that are wanting to leave lots of money to their families. We have clients that are wanting to give lots of money to their families. And there's a huge tax differential between those two things, especially in Massachusetts. But how would you know about it? Because so many people, you don't know what you don't know. That's right. So pick up the phone 7815-7982-2478-1579-8 thousand 224 and make that first step.
Disclosure [00:33:00]:
Investment advisory. Products and services made available through Aewealth Management, LLC, a registered investment advisor. Insurance products are offered through the insurance business. Roulette and Associates, LLC DBA South Shore Retirement Services Roulette and Associates, LLC DBA South Shore Retirement Services is also an investment advisor advisory practice that offers products and services through AE wealth Management, a registered investment advisor. AEWM does not offer insurance products. The insurance products offered by Roulette and Associates, LLC DBA South Shore retirement services are not subject to investment advisor requirements. Investing involves risk, including the potential laws of principal. Any references to protection, safe safety or lifetime income generally refer to fixed insurance products, never securities or investments.
Disclosure [00:33:53]:
Insurance guarantees are backed by the financial strength and claims paying abilities of the issuing carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individuals situation. Mark Roulette and Associates, LLCDBA South Shore Retirement Services is not permitted to offer a. No statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the us government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed. By Mark Rowlette and assigned associates, LLC DBA South Shore Retirement Services, thank you for.
Disclosure [00:34:44]:
Subscribing and downloading the Retire South Shore radio podcast. Feel free to leave a review and a rating, and tell your friends about us. For much more, visit retiresouthshore.com. that's retiresouthshore.com. discover how South Shore retirement services helps individuals and their families achieve their ideal retirement pyramids.
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