What percentage of retirees are happy | TRANSCRIPT

Speaker 1:
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Speaker 2:
Stay tuned for On The Money, Central Florida’s most listened to financial call-in show. Brought to you by Certified Financial Group in Altamont Springs. It’s the only show hosted exclusively by certified financial planner professionals. Monday through Friday, their CFPs provide financial planning and investment advice for a fee. But on Saturdays, the advice is absolutely free and has been for more than 30 years for their WDBO listeners. If you have a financial question you want answered by real fiduciaries, the lines are wide open. Call (844) 580-WDBO, that’s (844) 580-WDBO, and enjoy the show.

Laurel Lee:
Well, welcome to another edition of On The Money here on WDBO 1073 FM and AM 580. I’ll be streaming in that WDBO app as well. My name is Laurel Lee and I’m fortunate enough to be joining you this morning with another edition of On The Money with Chris Toadvine and Matt Murphy, a couple of certified financial experts with the Certified Financial Group. This is your chance to pick the brain of the experts. All you have to do is call (844) 580-9326. Write that number down, remember it because as you’re listening through the show today, a question might pop up in your brain or maybe you’ve heard something on the news already or questions already been bouncing around in your mind that you want to ask the financial experts. Just call (844) 580-9326. That’s (844) 580-9326. Or you could always leave a question under the open mic feature in the WDBO app. Well, good morning guys. How are you doing today?

Chris:
Good morning, Laurel. How are you doing?

Laurel Lee:
I’m hanging in there. A little bit cloudy today, but that’s okay. We’re going to have a little bit of a cooler day I think.

Chris:
Well hopefully so. And Labor Day weekend, so the unofficial end to summer. So Matt and I are kind of book ending summer here and have some exciting things to talk about today. But Matt and I are here on behalf of the 14 other certified financial planners that make up the Certified Financial Group to take your questions related to personal finances, retirement planning, investment planning, IRAs, 401Ks, 403Bs, charitable giving, estate planning and whatever that might mean, beneficiaries, all the different things that come under the umbrella of personal finances.
So Matt and I are here to take your calls today. As we said at the beginning of the show there, Monday through Friday, we do this for a fee, but today, this morning, Matt and I are here for free to take your calls. And we also have Charles Curry standing by for those that might have something a little more involved, don’t want to get into on the air. Charles will take your calls offline at (407) 869-98000. Again, (407) 869-98000. But we want to help you get to and through retirement. And I think, Matt, a lot of times the financial media anyway talks about getting to retirement. There’s a lot of excitement, buzz and probably opportunities to market products to get to retirement. Sometimes we don’t think about getting through retirement as much. But Laurel, one more time for our listeners out there if they have questions, what are those magic numbers that they would call?

Laurel Lee:
Absolutely, those are (844) 580-9326. Again, (844) 580-9326. And guys, this is our topic today. What percentage of retirees are happy?

Matt:
Well, I just want to say before we get started, Chris, this is our first time doing the radio show together.

Chris:
Indeed, it is.

Matt:
And I’ve been looking forward to this very much so. As the listeners may know, Joe is on vacation this weekend so it was my turn to host the radio show and Chris was kind enough to raise his hand, get up early on a Saturday morning and come out and join me. So really glad to be here.

Chris:
Yeah, well, it’s good to be here. We gave Joe the weekend off, Labor Day weekend, very fitting that Joe would have the weekend off. But we’re ready, willing and able to take those calls and we’ve got some interesting things to talk about here.

Matt:
We do. So you mentioned getting to and through retirement, so one of the aspects of getting through retirement is not just the numbers and the financials, and this is one of the reasons the topic that I wanted to talk about today with you in particular, Chris, because I think you and I share a lot of similar philosophies in terms of how we work with clients and talking to clients and prospective clients about things that are beyond the numbers. Planning is a pretty broad concept, and of course that’s a hallmark of what we do here at Certified Financial Group is planning.
Well, planning is not just your investments and your rates of return and your Roth conversions and your 401K contributions, it also takes into account your life in retirement. What your life will look like. And so I’m always particularly interested when I run across either blogs or articles or newsletters that talk about that side of retirement and how people are handling maybe the more subjective side of retirement. I ran across an article this week that mentioned interestingly enough that 72% of retirees claim to be happy.

Chris:
Was that surprising to you?

Matt:
It was surprising to me. Now, there’s a corollary to that and where this article came from was the author had put together a study that preceded this particular study that showed that 28% of retirees were actually depressed.

Chris:
Well, I’m glad you went there, Matt, because I also read this when you shared it with me and just anecdotally, and interestingly enough, I am seeing more and more around the whole idea and concept of longevity, whether it’s Blue Zones, I think I shared with you, I’m reading a book called From Strength to Strength, which kind of deals with what the author calls the second arc of life. This transition from your productive working years into other things that have meaning.
So I’m seeing more and more about this because I think maybe as a culture and a society, we’re realizing that yeah, finances are important and we’re going to talk about that here today, but at the same time, your life is also important. And this article, I thought did a great job. And I think the article came out of the author getting bashed a little bit for focusing on what was perceived as negative. But he did that because I think he made the comment that 10% of the overall population is considered depressed, and yet it’s three times that for retirees.

Matt:
That’s exactly right. That’s where it came from. So one of the things I thought that I would mention this morning were the takeaways that this particular author had from the study that he did. And of course, he identified both financial and non-financial traits of happy retirees. So I really wanted to touch on what the non-financial traits were of happy retirees, and we can dig into these a little bit more, but the six non-financial traits of happy retirees were number one, curiosity.

Chris:
Now, what does that mean, Matt?

Matt:
So curiosity, yeah, and you and I had a conversation about this yesterday, curiosity really being, he gave a quote here, I’ll read it verbatim. “We hear that curiosity killed the cat. A lack of curiosity kills the happy retiree, plain and simple.”

Chris:
Yeah. I think the way I interpret that is it’s the willingness to continue growing and learning.

Matt:
That’s right. Yeah, exactly. And so one of the things you mentioned yesterday when we were talking about this, Chris, was unfortunately, I think a lot of people spend 40, 45 years working in their job, saving money, hopefully, kind of keeping their head down, being focused on their work. Then they get to retirement and maybe even they’ve planned adequately financially, but they wake up one day and say, man, what the heck am I going to do now?

Chris:
That’s right.

Matt:
And so the idea behind the curiosity is finding other interests outside of your work that really either you have a passion for or that you’re just very interested in pursuing if you had some more free time. And I think your point yesterday was well taken, Chris, what you mentioned to me was I think in the book that you were reading was that you shouldn’t wait until six months before you retire to start pursuing some of those.

Chris:
Yeah, that’s exactly right. Find those things now that have meaning and purpose and begin to engage with them and see if they really do kind of light your fire, so to speak, if it’s something you enjoy and engage early. Because a lot of times I think when people wait to retirement, and we’ve seen it in our work, we have seen this probably countless times, and also see folks who have plenty of financial means who are missing that secret ingredient that really lends itself to a really fulfilling, I think, second chapter.

Matt:
And I think the way that you can look at this, if you’re in a pre-retirement phase, maybe you’ve got 10 years until you’re going to retire, just like you don’t want to wait until the last couple of years to start socking away money for your retirement-

Chris:
Good point.

Matt:
You want to start contributing to these pursuits. He calls them core pursuits, whatever interests, whatever curiosity you have. It could be charitable work, it could be your church, it could be coaching a kid’s athletic team, whatever that pursuit may be, start contributing, making deposits, if you will, into that account early on so that when the retirement date comes, it’s an easy transition out of your work and you’re not left one day just waking up and saying, geez, what am I going to do this week?

Chris:
That’s right. That’s right. Yeah, you wake up, I think he talked about every day being Saturday, what do I do today, kind of things.

Matt:
That’s right. So one of the things that he identified was that the happiest retirees have an average of about four core pursuits. Again, those would be kind of the outside activities. And the unhappiest retirees have only about two core pursuits, as he said it. So again, just the idea being start pursuing some of your passions outside of work, the earlier the better.
The second one was purpose, the third one was social connections. The fourth was retiring at your planned time. The fifth was your personal health. And then lastly, planning for a happy retirement, which we sort of touched on a little bit. But I wanted to touch on just for a minute, Chris, this concept of retiring at your planned time, because I think obviously we don’t always have control over that. And more and more it seems like in the last few years, I don’t know if you’ve experienced this, but I certainly have with clients that I work with, a lot of times they do wake up one day and find out they’re going to be out of work soon.

Chris:
Yes, yes.

Matt:
And so that can be a shock to the system, obviously, both financially and psychologically. So I think what we help our clients do here early on in the process is to plan for that. And the planning for that isn’t always just financial. If you’re 50 years old and you’ve got a good job, but down the road, maybe your company downsizes or whatever the case may be, to start planting those seeds now for, hey, if something happened with my work, what would be the next step for me?

Chris:
Well, and it’s interesting, he gave the statistics somewhere around 56% of people end up retiring earlier than they think they will. And so, again, I think this definitely ties into, so there are some, I’ll say qualitative and then quantitative things. And we do the math part here. We help people with the technical and the math and construct portfolios and are you saving enough, are you invested in the right places? Do you have the right kinds of insurance and the right amounts and all those kinds of things. And if we don’t wake up tomorrow, then are my assets going to go where I’d want them to go? All these kinds of technical things. But then it’s like you say, the more subjective things that I think ultimately are worthy of some consideration and some thought and being prepared for that sooner rather than later just so you know, you’ve got a game plan.

Matt:
And I think this speaks to also to the idea that there’s two different types of advisors that you can work with. I think we’ll get to that maybe at the end of the next break.

Chris:
Yeah, we can get to that. I hear some music coming up, but hey, if you’re retired and you consider yourself happy or unhappy and you want to share your secrets with us, we’d love to hear those. But we will be back, Laurel, right after this break.

Laurel Lee:
That’s right. If you want to call in right now with your story or with any of the questions for the Certified Financial Experts, that’s (844) 580-9326, (844) 580-9326. We’re planning tomorrow-

Chris:
Today.

Laurel Lee:
With the Certified Financial Group.

Speaker 6:
(Singing).

Laurel Lee:
Well, thank you for joining us for another edition of On The Money here on WDBO. We’re answering all of your questions about your money, whether that be stocks and bonds or retirement. Are you a happy retiree? That’s what we’re really talking about today. And you can call us at (844) 580-9326, (844) 580-9326. We’re always taking your questions in the open mic feature of our WDBO app. If you have a question, but it’s a little sensitive and you don’t really want to say it on air, you can always call Charles Curry at (407) 869-9800. He’s taking calls there at (407) 869-9800. And guys, we just wanted to give a little shout out there to Jimmy Buffett since he just passed, right?

Matt:
Yeah. It’s kind of hard not to feel a little bit of happy vibes when you hear Jimmy’s music. I was telling Chris, for the listeners that don’t know, Jimmy passed away yesterday, apparently. Supposedly it was peaceful. But one of the first concerts I ever went to, Chris, was Jimmy Buffett back in my teenage years.

Chris:
Coral Reefers, huh?

Matt:
Yeah, that’s right.

Chris:
Exactly. Nice.

Matt:
Exactly. So we wanted to call a little audible there and pull a tribute to Jimmy here.

Chris:
Tribute to Jimmy. And on this weekend, there’s a lot going on this weekend, Labor Day weekend, of course.

Matt:
Football.

Chris:
Football, yeah. FSU playing here in Orlando. So go Knowles. And then also one of the big things, and Joe alluded to it there in one of the commercials on the break, was that TD Ameritrade is going away this weekend, Matt, and rest in peace, TD Ameritrade. But they’re transitioning over to Charles Schwab who bought them years ago. So I know we may have listeners out there that have questions about that. If you do, give us a call or certainly call the office next week. But that’s a big deal when these big organizations, sometimes it’s as I’ve told my clients, this is really capitalism at its finest. This is the way it works. They see a business opportunity. But we will still be here working on behalf of and serving our clients regardless of who the custodian is, who’s holding the assets, but a lot of big organizations out there like that. And change is inevitable, right?

Matt:
That’s right. And again, for the listeners, if you have any questions, I’m sure there’s lots of people out there that are going through this transition with TD and Schwab right now. If you do have any questions or need some clarification or need some help throughout that process, give the office a call right now. Charles Curry’s taking calls offline at (407) 869-9800, or you can give our office a call on Monday and talk to any of the 16 certified financial planners that we have.

Chris:
Actually, they probably should wait until Tuesday because we’re closed Monday due to Labor Day.

Matt:
Good call.

Chris:
But nonetheless, and I think one of the things that you began to touch on, Matt, before we went to the break was the fact that this more subjective area of planning, these are the kinds of things that we consider and we know from experience in talking with folks who are now our clients and coming from other places. That that’s not always the case.

Matt:
That’s right. And so particularly I look at the advisory world and the advisory world just being kind of the world that Chris and I and the other CFPs here operate in, there’s kind of two types of avenues that you can go down. You can be with a big large national firm. We all know the names there, don’t need to pick on anybody. But the reality in those types of firms is that oftentimes the quantitative side, so the numbers, the planning in terms of your performance and your investments and your rates of return and that type of thing, they do a good job with that.
What oftentimes they don’t take the time to do because they don’t have the time to do, is the types of things that we’re talking about here this morning, which is really diving into what are your passions in life, what are your core pursuits, as the author mentioned, what are your curiosities? What’s your purpose? What are you going to do once you retire? And so I think in order to have a real meaningful conversation with your advisor about that, your advisor needs to have the time to dedicate to that and that’s not a 15-minute conversation. Oftentimes, that’s a multi-year conversation and hours and hours of exploration really, what your interests are.

Chris:
It’s rooted in a relationship, Matt, and we have not thrown out the F word yet this morning, but we need to do it. We are fiduciaries, and that’s a big distinctive between us and a lot of the national firms. We are fiduciaries who work on behalf of our clients only and do what’s in their best interest. So we’ve got a lot more to say about this topic, but I think we’re already up on another break, but we’re going to come back and share a lot more good information with you. If you have calls, please call us at these magic numbers.

Laurel Lee:
(844) 580-9326, (844) 580-9326, where we’re taking all of your financial questions. We’re planning tomorrow-

Chris:
Today.

Laurel Lee:
With the Certified Financial Group.

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Speaker 2:
Welcome back to On The Money, Central Florida’s most listened to financial call-in show. Brought to you by Certified Financial Group in Altamont Springs. It’s the only show hosted exclusively by certified financial planner professionals. Monday through Friday, their CFPs provide financial planning and investment advice for a fee. But on Saturdays, the advice is absolutely free and has been for more than 30 years for their WDBO listeners. If you have a financial question you want answered by real fiduciaries, the lines are wide open. Call (844) 580-WDBO, that’s (844) 580-WDBO, and enjoy the rest of the show.

Laurel Lee:
Welcome back to On The Money here on WDBO. My name’s Laurel Lee. I’m here with Chris Toadvine and Matt Murphy, and the financial experts are taking your calls at (844) 580-9326. Again, that’s (844) 580-9326. And in the open mic feature on the WDBO app. And those numbers are what Robert called… Guys, our topic was how many retirees are happy, and Robert actually has a tip on how to be a happy retiree.

Chris:
Hey, good morning, Robert.

Robert:
Yeah, I had more of a comment. With all retirement plans, I think the most important thing is to establish the habit of paying yourself first. I’m self-employed, so as soon as my checks come in, the first thing I do is put the set amount into my SEP.

Chris:
Yeah, that’s awesome. So you’re not retired yet, you’re just looking in that direction.

Robert:
Right. Because otherwise, it’s too easy and if you put it to the back I think to make a purchase, or even before I pay bills, first thing I do is pay myself and then watch it grow. But if you get in the habit, then you don’t even feel like that’s part of your paycheck to allocate to other areas.

Matt:
Yeah, I was just going to say, Robert, don’t you just notice once you do that, you don’t even miss that money. It’s just like it just goes straight into the retirement account and you live on whatever else you have, right? I mean, it’s not even a conscious effort.

Robert:
I’m not paying tax on it.

Matt:
And you’re not paying tax on it.

Robert:
I’m not paying tax on it.

Matt:
That’s right.

Robert:
Yeah.

Matt:
That’s right.

Robert:
Yeah. Another thing we did was one of our friends said we established our young daughters as authorized users on our credit card to establish their credit. What’s your thoughts on that? Because they told us that when their daughter graduated college, she had an 800 credit score. It made it much easier for her to purchase her house.

Chris:
Well, look, I think there are different schools of thought on that. Ironically enough, I got something in my email yesterday. I’ve got a daughter who just moved off and has an apartment at one of the major universities here in Florida, and I got an email offering to connect her rent payments to the credit bureaus so that she can establish credit that way. So there are different schools of thought on having credit and buying things on credit. Of course, when you want to buy a house, that’s a big thing that you do need credit for.
So I think with credit cards, it’s just a slippery slop, Robert. That’s my personal opinion. You got to be real careful, and particularly in the hands of children, really, even if they’re 18, 19 years old. And I know when I was at Florida State University, they used to have something we call the hippie fair on Wednesdays, and it was kind of just a cornucopia of vendors and things, and they always had the credit card companies there, and they would offer you a T-shirt or a soda or something to get you to sign up. And I think for a responsible kid who’s getting coaching from their parents, I think it can be a good thing. But I think just left unattended with a credit limit, kids go out and spend not realizing that they’re going to have to pay that back one day, and that can really compound their stress when they get out of school. So you got any thoughts on it, Matt?

Matt:
Yeah, I mean, I would echo that. I also think, like you said, the flip side of that is it’s a good way to teach a child some responsibility if they’re kept on a relatively short leash and held accountable for the spending and the activity that they engage in. A lot of kids, it’s kind of like the whole thing with the retiree getting to age 65, retiring and not knowing what to do. It’s like this huge shock to the system. A lot of kids that are just set free once they go to college have never had to manage anything financial in their life before. To the extent that they’ve had some experience before that with being financially responsible, I think that’s helpful.

Chris:
Yeah, I agree. I agree. Good stuff, Robert. We appreciate you calling in and sharing your wisdom with us. I think paying yourself first is probably one of the smartest things you can do. Get in the habit. It’s kind of like working out. You just exercise that muscle and over time it grows. And as Matt said, you really don’t miss it once you grow accustomed to it.

Matt:
And I bet Robert, you’ll be one of the 72% when you retire that’s happy, my man.

Chris:
We’re hoping so.

Robert:
Hope so. Shooting for it.

Matt:
All right. Thanks for the call.

Chris:
Fighting a good fight, Robert.

Robert:
Have a great day.

Matt:
You too.

Chris:
All right, very good. So Laurel, did we have an open mic question as well?

Laurel Lee:
We sure do. So let’s go ahead and play this one.

Mike:
This is Mike from Lockhart. When we met with you a couple weeks ago, I’ve been looking at Sallie Mae CDs. They seem to be paying the highest. Last week they were at 5.5, now they’re down to 5.15. How do I go about opening up a CD with Sallie Mae before the rates drop any further? And do you think they’ll be going back up? Thank you very much.

Chris:
What do you think, man?

Matt:
I think there’s a few ways to do that. So most of the custodians that we work with, so for example, Schwab and Fidelity, we can open up what we call brokerage CDs for our clients where you’re not buying the CD directly from the bank, but rather, kind of getting technical here, but you’re buying it on the secondary market. And there’s some pros and cons of doing it that way, but that’s one way of doing it. If you have an account with us, we can search the market for available CDs, not limited to one bank, but really to the whole network of banks that are available out there for CDs.

Chris:
Yeah. Yeah. And I think, look, we think about this in the context of a properly constructed portfolio too, in that we would not generally advise someone to just load up on CDs because I think that that question, he indicated the rates were up and they came down. And we can speak to maybe why that is, Matt, but it makes me think of I bonds. I think I shared with you the other day that about this time last year, we were hearing a lot about I bonds and they were paying over 8%. Well, today they’re paying 4.3%, so less than T-bills and cash, less than that CD that was just referenced.
And so I think that the big idea here is that things change and interest rates go up and they go down. Right now, they’re up compared to where they’ve been the last 15 years, but they very well may come back down. And so with a CD, you’re locking in your money for a period of time. To our caller’s question, you should be able to go directly to Sallie Mae Bank and open an account with them and purchase the CD that way. Probably do it all online, if you want. But there’s a danger in that, isn’t there Matt, when you begin to go out there to different institutions and open accounts.

Matt:
Well, not only that, but to me playing the CD and just the fixed interest rate, whether it’s bonds, CDs, treasury bonds, it’s kind of a game of whack-a-mole. So you’re buying a six month or a 12-month CD. Well, in six or 12 months, guess what? You got to do that all over again. And there’s a lot of… I think a lot of times people don’t think about that. There’s a lot of work involved with that. There’s a lot of maintenance involved.

Chris:
And that was really my bigger point, is we have both seen folks who over time chase those rates. I can get a 10th of a percent higher over here, so I’ll open that account. Or the I bond, you have to open it online. And next thing you know, you’ve got a collection of accounts online and who’s coordinating that and are they all titled properly? And if something were to happen to you, then what? And does everyone know your passwords? And so you can end up creating some other issues for yourself.
And to boot, I don’t know if you’ve ever seen this, but I have a client who, who’s a pretty big fan of one of the credit unions in town, and it’s a fine institution, but they were offering a… It wasn’t local, actually. It was one that was out of the DC mid-Atlantic area, but they were offering a really compelling rate. But when I dug into the fine print, it was only on the first $10,000 or something.

Matt:
A lot of that is marketing, a lot of it’s smoke and mirrors. The other thing I would just mention there when it comes to CDs, I mean, if you think about, I don’t know, three years ago where were interest rates? For all intents and purposes, they were at zero. Where was government reported inflation three years ago?

Chris:
For all intents and purposes, very low, 2% or less, right?

Matt:
So I’m hearing this from clients and I understand it. I mean, I feel some sense the same way. But I’m hearing this from clients a lot right now that, oh, geez, rates are up at five, 6%, four, five, 6% on cash or on CDs. And geez, this is a chance of a lifetime to get these higher interest rates. We haven’t seen this for 25 years. Well, keep in mind now those rates are at four, five, 6%. What’s inflation at now?

Chris:
Well, inflation is marginally below according to the feds, right? But I think your point is that things are always changing,

Matt:
That’s right. Things are always changing, and it’s not like now we’re getting 6% interest rates with 0% inflation. The interest rates tend to run in conjunction with inflation, so it’s not really like you’re making out a bandit so much, like a lot of people, I think, think that they are. So moral of the story there is the most important thing you can do when evaluating how your investment portfolio should be constructed, whether it’s CDs, whether it’s treasury bonds, stocks, mutual funds, is going back to our original plan, which is to have a plan.

Chris:
Yeah, have a game plan. That’s right, Matt. That is the main thing. And again, a properly constructed portfolio, and this is what our clients pay us for. We’re fiduciaries. We do this work on their behalf. We do what we genuinely believe to be in their best interest and apply the wisdom of not just the 16 certified financial planners that make up Certified Financial Group, but also we work with outside companies who have a deep bench in expertise in helping us build resilient portfolios that stand the test of time and not reacting to the whims of the day.
We have made some adjustments to our portfolios in light of the higher rates. We’ve made some adjustments in light of the lower rates. So it’s not that we’re just blindly adhering to something and never adjusting it. We do adjust the sails, we make changes to the wind that’s blowing. But at the same time, we don’t want to be reactive. And a lot of times, that’s what I see. Things are different now. It is great. And some have even questioned, well, why would I want to be in the market if I can clip coupons at 5%? But a lot of folks were surprised this year by the market, and so I think that’s why having a properly constructed portfolio that does stand the test of time, not just for the season and the moment that we’re in, but again, to and through retirement. Before we get to our break, I think we have some workshops coming up, Matt.

Matt:
Yeah, we do. So the next workshop that we have will be on Wednesday, September the 6th, and that’s hosted by Charles Curry here in our office, 1111 Douglas Avenue in Altamont Springs. That workshop will be from 6:30 to 7:30. Again, it’s college planning for high school students, what parents should know.

Chris:
That’s this Wednesday.

Matt:
That is this Wednesday. I know. Gosh, it’s crazy.

Chris:
Right around the corner. And for those who are in this camp I just mentioned, I have a freshman up in Tallahassee, and I can tell you that it is none too soon to begin thinking about this. We’re in September now. It is none too soon. So if you have a student in high school, even a junior, certainly a senior, you would do yourself a favor by coming to this workshop.

Matt:
That’s right. Yep. And so again, go to our website, financialgroup.com, financialgroup.com. Go to the workshops tab, you can sign up and reserve your spot right there online. So I think I hear the music rolling in. Laurel, why don’t you take us away?

Laurel Lee:
If you’ve got another question for the certified financial planners here, we got a few more minutes before the end of the show at (844) 580-9326. That’s the number to call in right now, (844) 580-9326. We’re planning tomorrow-

Chris:
Today.

Laurel Lee:
With the Certified Financial Group.
Thank you for listening to On The Money here on WDBO, brought to you by Certified Financial Planners from the Certified Financial Group. If you want to call their office Monday through Friday, well, this week, it’s Tuesday through Friday, (407) 869-9800 is the number to call in. Or you can call that number right now to talk off-air to Charles Curry who will speak to you about your financial questions. And guys, before we wrap up here, we have another quick caller.

Chris:
Yeah. Hey, good morning, Thomas.

Thomas:
Yes. Good morning. Quick question.

Chris:
Sure.

Thomas:
2010, [inaudible 00:34:22] has the clause in there that banks have the ability to bail in with a bailout. In other words, they can take your deposit and use it if they have a run on the bank. Now everything above $250,000 is open to the banks to take the bail in. My question to you is, as you know, you can have a joint account, have a couple beneficiaries, you can run the FDIC coverage up to a million bucks. Do you know, is it just the 250 or is it what FDIC covers total?

Chris:
Yeah, good question. I will have to confess, Thomas, if you’re saying that the banks can somehow confiscate your funds over that amount, I’m not familiar with that provision. That is the current stated FDIC insurance coverage amount. That said, there is precedent, at least this year, for better or worse, that the FDIC would bank stop the full amount and I think they did that because they want to instill confidence in our banking system. So I think any kind of confiscation, if that’s what you’re getting at here, would undermine confidence in the banking system. And I think that would be very problematic, so I’m not sure if I’m answering your question. Matt, you got anything to add to that?

Matt:
No, other than just that does speak to the benefit of spreading out if you’re going to do CDs or bank accounts, spreading them out over multiple registrations, individual, joint, CDs, IRA, I mean, et cetera.

Chris:
Yeah, that’s right. And I think the bigger question, Thomas, is if you have more than $250,000 in cash, why? And so there are other ways to achieve safe comparable returns. In today’s world, it wouldn’t have been there maybe a couple years ago, but today it’s available. So does that help Thomas?

Thomas:
It does. It doesn’t answer for the question because everything I read still goes to that anything over 250, it never says anything covered by FDIC. And that was the whole heart of the question. You’re not in the majority, most people have never heard about a bail-in as opposed to bailout. And of course, everybody was in an uproar when they bailed out the banks using taxpayers money. So they said, hey, we came up with this idea. Let’s use depositors money and we’ll give them some warrants or some watered down bank stock in return. So really, a lot of people just aren’t aware of that.

Chris:
Yeah. Well, and I would confess to being one of those, Thomas. I tend to be an optimist, a glass half full kind of guy, and I am going to believe that that is not going to happen. Not that it could never happen, I think Greece did something similar several years ago where they took a couple percent of bank deposits. But I am going to believe that our system will do the right thing, that we’re a nation of laws, and maybe that’s the law, I don’t know.
But we do appreciate your call and it’ll give us something to further research and learn about. And that’s how we continue to grow here at Certified Financial Group, man. It’s folks like Thomas who bring things to our attention, and we continue to grow. Nobody knows at all. It’s a complex maze of a financial system that we live in, and lots of different rules apply to different areas of planning. But that’s why we’re here, to help our clients Monday through Friday, come up with financial plans that work for them.

Matt:
That’s right. And if you have any questions, anybody else wants to call in after the hour’s over, (407) 869-9800. Charles Curry’s taking calls, or give us a call on Tuesday.

Chris:
Tuesday. There you go. And we do have some workshops we hit on. Charles has a college planning workshop coming up this Wednesday. Matt, I know you have one coming up Saturday the 16th. So a couple weeks out from today, savvy-

 

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