Business Innovators Radio - Interview with Dan Saccal, President of Vision Wealth Management Discussing Preparing for the Unexpected in Retirement

Episode Date: March 14, 2024

Dan graduated in 1988 with Honors from the University of Florida with a degree in Finance and has served clients as an independent financial advisor since 1994 providing peace of mind through guarantees so that they can enjoy their best years worry-free.Learn More: https://vwminc.com/Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-dan-saccal-president-of-vision-wealth-management-discussing-preparing-for-the-unexpected-in-retirement

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of Influential Entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have back with us Dan Saccal, who's the president of Vision Wealth Management, and we'll be talking about preparing for the unexpected in retirement. Dan, welcome back to the program. Hi, Mike. I appreciate you having me back.

You're welcome. Hey, it makes me think preparing for the unexpected, like the old saying, you know, expect the unexpected. Well, if you expect it, then it's not unexpected. So it's like that whole, you know, conundrum. But we know that there's unexpected things that come up in retirement, no matter what the great plan that you put into place, there's always going to be some hiccups or some bummer. jumps in the road. So talk a little bit about where you start the conversation with your clients in helping them prepare for, okay, here's some things that can be unexpected and here's how

we're going to handle them. Well, that's exactly correct, Mike. We, you know, it's all about the conversation. And, you know, I think people realize life can throw them curveballs, but they just don't know because they're, you know, this is their first time going through it. You know, don't necessarily know which curveballs that might come up on them. And, you know, when you're retired, you might get hit with additional taxes. You know, you might have a long-term care situation, whether it be at home or in a facility, the dollar, you know, sometimes inflation is a lot worse than some years and others. And, you know, if you're living on a, quote, fixed income, that's a big curveball to hit.

So we help our clients plan and our discussions for all of these potential situations that come up. And if none of them do, then it's, you know, they're just on the bonus plan. But, you know, we plan for it in case that it will happen. Yeah, you know, you mentioned several things like taxes and nursing home and all of these kind of things. Let's kind of briefly talk through a couple of those like taxes. I think that it's cliche to think like, oh, well, you know, when I retire taxes, I'm going to be in a lower tax bracket. But that's not necessarily the case and there's no guarantee of that. So where does your view on where taxes will go and how to plan for them ahead of retirement?

Well, it starts with a previous conversation. You and I had Mike and that, you know, we teach our clients to segregate their money. So, you know, some for income and some for growth. And these situations are exactly why, because these things do happen, that's exactly why segregating that money and having some of that growth money is so important. In taxes, let's look at a couple dynamics facing your typical, you know, retiree or somebody nearing retirement. You know, they have IRAs, most of them, or 401Ks or 4.03Bs.

And they have to take distributions from those. plans, and those distributions are automatically ordinary income, no matter what happens, that's ordinary income. And then they have Social Security benefits. And depending on their adjusted gross income, and then remember you have to add back any municipal bond interest, depending on that income, 50 to 84 or 85% of their Social Security benefits will be added to their taxable income. So, you know, in those situations, that's where most, you know, seniors are.

And then we add in some micro factors or some macro factors. And it may not seem that way, but currently, tax rates, they're not at their lowest, but historically it are still pretty low. And so we have lower tax rates on average and now look at our national debt situation. You know, we have $34 trillion in debt. The interest on that debt is going to be almost a trillion dollars this year. So where is that money going to come from? I don't see, you know, Republicans and Democrats putting their swords down and working across the aisle to tackle all the issues plaguing our country and solving this debt crisis by balancing budgets.

I think it's more likely that they're just going to raise taxes to help offset this debt. And here you have your typical retired person who's just been cruising along, enjoying their lives. And all of a sudden, they're sitting ducks because they've got IRA distributions they have to take. They've got, you know, Social Security benefits that may be taxable now. And they have no control over the tax rates. And, you know, because they have to take the income. And that's where, and that's the problem. And what we do to help here is we offer our clients comprehensive tax analysis that looks into raw conversions and other ways to produce tax free income so that they have control over their taxes, both present and future.

And that's, you know, that's the space that we're in. You know, it reminds me of one time I heard someone say regarding taxes on accounts, like IRAs and 401ks, they've, you know, you put money in pre-tax. You've not paid taxes. So at some point when it comes out, the government's going to get their due. Well, is it going to be today or in five or seven or ten years when it's close to retirement when maybe the tax rates will go up? But they described it like it's a wolf sitting on top of a, you know, a hole of a like

a rabbit hole, waiting for the rabbit to cut and then bam, it pounces on it. And that's what the government's doing in reality because they, put off taking their taxes because they let you put it in and grow it. And then all of a sudden here comes this huge event where you need the money. And it's not even just the need because someone might go, oh, you know, that 401K, that IRA, I'm just going to let it roll and sit there because I've got some money squirled away. I don't even need it. But there's a time at a certain age where you're required to pull money out, right? And then triggers the taxes. That's exactly correct. And the more money you have, potentially the worst situation is. And again,

And you have no control over it unless you take some control now before it's, you know, before anything happens and things change. Yeah. The only thing constant in life is changed. So I think that's a huge point. So another unexpected expense or unexpected thing, you know, like an expense that you mentioned was like nursing home. So how prevalent is that for people statistically like, oh, I'm probably never going to need a nursing home or will you? So what does that look like? it's a great chance that I believe it's about in a 40 to 50% chance that a senior will

need some sort of care lasting up to three years whether it be at home you know nursing skilled nursing coming to the home or in a facility I mean let's face it people aren't in nursing homes because they want to be they're there because they have to be so you know unfortunately it happens. But again, preparing for it is the key like anything else. You know, I mean, you can't be around in his life too long without seeing somebody go through that situation. And, and I think rightly so, I think seniors fear that. They don't want to put up, they don't want to go through that. They don't want to put their families through that. And it's harrowing experience. Even if you have good nursing care, it's just, it's not

something that people want to do, but we still have to prepare for it because it could happen. Again, like I said, nobody's in a nursing home because they want to be. They're in a nursing home because they have to be. So what we do, and it goes back to conversations we've had early about segregating, you know, their money. And this is one of the reasons why we have money set aside for growth because, you know, the unexpected does happen. And if you haven't been growing money safely for emergencies that pop up like this,

in situations that pop up like this, then your planning is incorrect. And we make sure, we work with our clients to make sure that that doesn't happen. And traditionally, you know, there's, you know, the long-term care insurance,

you know, or people pay a premium. And unfortunately, with insurance like that, it's like your auto insurance. You know, if you go and you pay your auto insurance premium and you don't get an accident,

you don't go back to the insurance company, and they write you a check because you didn't use it. It's the same thing. with traditional term care. You know, you pay for these policies. They're very expensive. And if you don't use them, that money's just gone.

We help our clients because there's products out there. There's contracts that have riders that will increase your income if you wind up in a nursing home. There's asset plans where your asset grows and it has a nursing benefit. So if you need nursing care, that money's available for you. And if not, you get your money back or your areas lined up with the money. So there is other ways to do, to compensate for this if it happens without throwing money away that's never used if it doesn't happen. Yeah. That's a huge point. Yeah, I love that example about the car insurance. Yeah, it really is because I wish I could call up my homeowner's agent and say I didn't have a, you know, roof claim, give me my premiums back. But that's just the cost of insuring your house or your car in your example. You know, one thing you mentioned, too, about nursing facilities, versus in home.

I think that a lot of people would feel like, okay, yeah, I would prefer to be in home, but in certain long-term care policies, I'm mandated to use, you know, from a list of these people and I don't want these people in my home. Is there provisions where with certain of these writers you mentioned, do you have the choice? Like, you know, can I choose whoever as long as they're a licensed person or how does that look like to get that in-home care? Absolutely. You get an in-home.

It really just comes down. to the ADLs, the activities of daily living. So once you can't perform a couple of those, then you can use it for home or in a facility, you know, whichever works for you. And really the thing that changes it is because, you know, most people, again, they wind up in a nursing home because they kind of wore out the in-home

because it became a 24-7 situation. So it's really, it's up to the client. It's nothing mandated by the companies that we deal with. That's huge. because I think that a lot of people would feel like, well, you know, my niece or nephew, you know, they're a, you know, nurse or I would like to have them come in. So having that control kind of gives them that piece of mind too. I think that's a big piece. And then, yeah, it's like stair step.

If you start within home and then it progresses in years to come to where you need the next step, then at least it's there. But it's your decision to make that choice. That's exactly correct. And that's what we do for our clients. So you mentioned, too, about like inflation and the dollar losing its purchasing power. That would definitely be unexpected, you know, hit because, you know, taxes are unexpected in that we don't know what it's going to be, you know, in years to come. But talk a little bit about, you know, the purchasing power of the U.S. dollar and inflation. How do you, what does that look like?

And then how do you plan for that? Well, there is a couple factors involved there. And none of them are good, it seems. You know, we get back to conversations we've had before about budgeting in our federal government. You know, the main reason why we have this inflation is because, you know, we spending all this money over these years and, you know, going into debt is finally catching up to us. You know, we printed all these dollars, you know, printing all these dollars that the Fed does. It's kind of like, you know, if you Mike had a drawer full of diamonds, you'd be very happy. But if everybody had a drawer full of diamonds, then they wouldn't, you know, they wouldn't be worth as much.

And that's what they've done with our dollar, unfortunately. They keep printing them and printing them and printing them and then buying debt with them. And it just, it's finally caught up to us. And that's why we have this inflation. And unfortunately, I don't see really how it ends. really well without making some decisions, you know, and some hard decisions that, you know, we have to make as a country that says,

hey, we have to balance these budgets. Otherwise, pretty much nobody's going to want our debt. You know, you see it out there in treasury auctions. You know, they, you know, the treasury sells their securities through auctions. And each time over its last year, you know, other governments around the world don't want our debt as much anymore because they're, starting to back off of it. Then you had this whole Ricks thing going on where, you know, countries are actively trying to help the dollar lose its status as the World Reserve Currency.

And it's because of that, World Reserve Currency status, that we were able to accumulate all this debt in the first place. So it's a very real issue. I don't know how it gets solved, but as clients, you know, we work with them. And again, that goes back to segregated in our money and having growth, having growth to pay for these higher taxes that result from this purchasing power loss and having more money for purchasing power. And we even have conversations with our clients about gold because that's certainly something that they can look at. And we help them have that conversation to look at alternatives to see, okay, if this finally does erode too much, I'm going to protect myself from it, even though, you know, as best I can, because we're certainly not getting

help from our government in this situation. You know, it's almost like a seesaw. When you push down on one side, the other side automatically, what, goes up? So, you know, when you want to fix something, you print more money. But if you print more money, then this happens. And then, you know, so like it thinking about like the rising interest rate environment, how does that impact the income of clients that are in retirement, especially if they rely on fixed income? You know, like, you know, hey, the CD today is X, but all of a sudden the rate environment

changes and when that CD matures and I've got to get another one, ooh, did that change? So what do you do about that and how, what are some considerations that way? Well, unfortunately, they don't generally keep pace with inflation the rates. So you might get rate increases. But again, it's not keeping pace with inflation. So, and the best thing to do is position yourself so that you're getting the growth because generally like the stock market's been okay. So you need that growth to help offset it.

And again, you need to take. look at gold and silver and other investments like that that helped to offset, you know, not going crazy with it, but a small amount in there can help offset these losses that we're getting on our purchasing power. It's all about taking a well-rounded approach. Again, we don't know what the unexpected is, but we expect it and we plan for it. We're in better shape for when it does happen. And that's what we help our clients do. So then, again, it's all about peace of mind. peace of mind and comfort knowing that we put the right plan in place and then we watch it. We don't just assume it stays the same.

We just double check and verify it. So I think that is such a great approach. And these were not fun topics to talk about like unexpected events, but they need to be talked about. And I just like your approach of being cautious and careful and planning for them so that if they come up, you're handled. If they don't, you're ahead of the game. So that's so great that you take that approach, Dan. If someone is interested in learning more about what you do and also reaching out and connecting with you, what's the best way that they can do that?

They can reach me directly at 561, 3104, or get on my calendar through my website at VWM Inc. Inc.com. Excellent. Dan, thank you so much for coming back on. It's been a real pleasure talking with you. My pleasure, Mike. Thanks so much. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes,

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