Brett Johnson [00:00:01]:
We are looking forward our way. Hi. This is Brett. It's in the news daily. The stock market's down and up Ben down and up and maybe down and up and up again. Each of us are reeling as we anticipate how our financial future is changing. Interest rates on savings remains low, interest rates on borrowing remains high. Four zero one k plans and retirement systems are losing money.
Brett Johnson [00:00:23]:
What can we possibly do to protect ourselves? Well, today, we're going to discuss what steps an individual can take to cushion the blows and possibly stabilize the future retirement. Let's welcome our expert guest, Benjamin Hoeger, director with the Hedley Hoeger Group at Baird Private Wealth Management. Thanks for coming back on the on the podcast.
Ben Hoeger [00:00:42]:
Yeah. Hi. Thanks for having me back. It was almost exactly a year ago I was here, so it's great to be back. Thank you.
Carol Ventresca [00:00:48]:
It's wonderful to see you, Ben. And, audience, you probably remember that, Brett and I always have this ongoing competition. And, we got Ben It
Brett Johnson [00:01:00]:
doesn't count when you bring back the same person. It's gotta be fresh blood.
Carol Ventresca [00:01:03]:
Yes. It does. It does.
Brett Johnson [00:01:05]:
It's your contest. Obviously, it's your
Carol Ventresca [00:01:07]:
It's my contest. My rules. Plus, I I count I count how many times we bring Phyllis back from the, from Miami.
Brett Johnson [00:01:15]:
That's true. Okay. I didn't know you did. I didn't know you did.
Carol Ventresca [00:01:18]:
Ben and I are both Otterbein grads. So, I I enjoy bringing back my Otterbein and Ohio State connections, and we and we, use and abuse them well.
Ben Hoeger [00:01:31]:
That's true. That's what I'm here for.
Carol Ventresca [00:01:32]:
Good point. Here he goes. Good point. Okay. So, Ben, heads are spinning. We're all looking. You know, I have a lot of people saying I don't dare look at my financial reports because I just don't want to know how bad it is. But we are going to provide some very interesting and wise tips that people can do to smooth their financial paths.
Carol Ventresca [00:01:55]:
Before we do any of that, we always ask our guests, tell us about you and how you walked into this incredible career.
Ben Hoeger [00:02:03]:
Yeah. So, it it was interesting, at Otterbein. I met my now, business partner, Jeff Headley. So it's been over twenty years ago now that I started with him as an intern. It was my junior year. So that was in 02/2005. And so the interesting thing was worked with him for a couple years there and then went on, at the same firm, but obviously different different roles and lived through 02/2007, '2 thousand '8. So I've been through a lot of these roller coasters, over the years and seen the evolution of of making your way through these unknown events.
Ben Hoeger [00:02:40]:
And, you know, I'd say the one truth that has continued to evolve in my career as far as how I feel about what it is I do, You know, when you first get in and you're you're coming out of the book stage of getting into this career, you feel like everything should be black and white and one plus one equals two. And quickly, you learn that that is not even close to the reality of this situation. And so, you know, as time has continued to pass on, you know, my really, my desire to educate, my desire to be a guide for people and really just trying to make an impact is is what drives me to do this every day. You know, it was probably a couple of Sundays back and and there could be some delay in this recording, but a couple Sundays back from now, I had a call. It was a Sunday night at 8PM, and I was on a conference call. And my wife, we've been together for almost sixteen years. She said, in sixteen years, I haven't seen you take a call at 8PM on a Sunday. I said, well, it maybe speaks a little bit to the environment we're in at the moment, not to, you know, sensationalize it.
Ben Hoeger [00:03:44]:
But times, you know, come and change. Right? But it's it's that desire to show up and make an impact and guide and help people over time that just it's what keeps you going. It it fuels the fire. Right? It gives me a lot of meaning in what I'm doing.
Carol Ventresca [00:03:59]:
And I think the message that we've got today really is the more information you have and the better planning that you do, the less of a blow you're going to have.
Ben Hoeger [00:04:08]:
Absolutely.
Carol Ventresca [00:04:09]:
And as you mentioned, many of us have been through two recessions at least Mhmm. In the market, and we've seen those four zero one k's become two zero one k's. And and and then they suddenly are, you know, bursting at the the seams and things are are going well. So but I think that, we have Brett and I have learned in all of the different topics that we cover that the one thing that we have to our advantage is a lot of information, resources, and experts in our community that can help us. And so the trick is to utilize those resources, experts, that knowledge as much as you can. Right.
Ben Hoeger [00:04:48]:
Abs absolutely. We we talk a lot about you know, many years ago, our our industry, the financial industry was here to provide information to people. Now it feels like our job every day is to filter through the information because we're hit with so much information on our phones, TV, everywhere. It's like, good lordy. How how do we, you know, keep up with this? And what am I supposed to listen to? Because for every, you know, piece of information that says do this, I'm gonna find 10 other pieces that say do that.
Carol Ventresca [00:05:13]:
Right.
Ben Hoeger [00:05:14]:
So it's, you know, it is a, it and again, I think that's where it comes back to me. Those are the things that keep us going. Right.
Brett Johnson [00:05:21]:
Right.
Carol Ventresca [00:05:22]:
Thank you.
Brett Johnson [00:05:22]:
Yeah. Well, regardless of the situation, we've talked about this before when you were here, you know, a financial plan. Mhmm. It's essential. We're never too old. We're never too young to create that plan and begin to save. Doesn't a plan really outline the best methods for savings, really? I mean, given our own personal situation. I think we really have to keep that phrase in mind too, a personal situation.
Brett Johnson [00:05:43]:
I mean, how do you start with this process with your clients and refine those savings strategies that's gonna work for them over time?
Ben Hoeger [00:05:51]:
Yeah. I I think, first of all, each family situation is gonna be different. Obviously, income levels, how they're impacted by tax, what their goals are, and what their lifestyle looks like. I'll tell people all the time when when I sit down with the family for the first time and they share kinda where they're at and what's going on, we'll get to the end of the conversation. They'll say, so do you think I'm gonna be okay? It's like I I I can't tell you today. I I gotta do more work. You simply telling me how much money you make or how much you saved is not the entire story. I'll tell people all the time.
Ben Hoeger [00:06:23]:
We we might work with a family that has $10,000,000 and and I'm worried about them every day. And then I might work with someone who has, you know, $300,000 and I'm not worried about them at all, one bit. And so it's more about what is that end destination look like, that that really drives a lot of a lot of those discussions ultimately. So, yeah, every situation is gonna be entirely different as far as driving what that savings method looks like. What makes sense for one person isn't gonna make sense for the next. So, you know, what that really looks like and how we start to process start that process with our clients and and building that saving strategy for them, it's really getting to know the person. It there's a lot of, science behind, that relationship and how financial decisions are shaped. I I heard at one point, I'm sure the science kinda changes and shifts a little bit depending on who you're reading, who's done the research.
Ben Hoeger [00:07:17]:
But somewhere between, like, age seven and 10 is some of the most formational years that impacts how you make financial decisions. So what you saw when when basically my kids' age right now is what's gonna shape their financial decisions in their life. So you might find someone who's extremely successful at this point of their career, but maybe their upbringing was kinda tough. Well, the way that they're gonna make decisions and how they feel about money is gonna be far different than the next person that on paper looks identical. Right? Right. So I can't do my job. In our opinion, we can't do our job effectively unless really we we learn about that person. We learn what that that history looks like for them.
Ben Hoeger [00:07:56]:
And and really a lot of that, we believe the beginning is rooted in their values as a person and their purpose. And the reason we say is because, generally, a goal is is a financial outcome. Right? You're saying I'm trying to save up x. But it's kind of then the question needs to be, to what end? Right? So, you know, we do need to establish what that end destination is, but also that values and the purpose of the why behind that end destination. And and the reason we spend so much time on that is much like anything that you're doing or a goal you're pursuing, you have to be able to come back to what's your why. Because for sure along the way, and we're gonna talk about this here soon, but for sure along the way, you're gonna you're gonna, encounter some life changes that are gonna maybe make you question, is that the right goal for me still? That goal might shift or change a little bit as life circumstances change, but usually your values as a person are not changing. What is most important to you, your why isn't changing. And so we spend a lot of time upfront anchoring that because that will get us through some rough days and some storms, kinda like we're going through right now.
Carol Ventresca [00:09:05]:
Right. Well, in with trying to say this maybe, softly, it's really we are talking a lot about savings, but that whole notion of the why and your values, also, it's how much you spend.
Ben Hoeger [00:09:22]:
Absolutely.
Carol Ventresca [00:09:22]:
And so the the $300,000 family who doesn't spend frivolously
Ben Hoeger [00:09:28]:
Mhmm.
Carol Ventresca [00:09:29]:
Is in good good stead where the $10,000,000 family who has five houses and a boat or a yacht or something, you know, are gonna be in could be in trouble. Absolutely. So it's it really is that that bigger picture. When I first got a financial planner, we didn't talk about what I was saving. We talked about, do you have long term health care
Ben Hoeger [00:09:52]:
Yeah.
Carol Ventresca [00:09:53]:
Insurance.
Ben Hoeger [00:09:53]:
Absolutely.
Carol Ventresca [00:09:54]:
And which is a huge expense for me every year. Mhmm. But it was he felt that it was absolutely necessary that I have that due to my family situation.
Ben Hoeger [00:10:05]:
Yeah.
Carol Ventresca [00:10:05]:
And so I've been paying for it forever, but, you know, it'll be there when I need it.
Ben Hoeger [00:10:09]:
Well, and that and that's part of those long term plans. We we tell a lot of people, a lot of families we work with, every you know, there's always at some point, this discussion comes up that we all inevitably have to have a end of life type plan where inevitably it it's not everybody just gets to leave this world peacefully. Right? And sometimes that's drawn out and those long term health care discussions come up and and not every time is it an insurance solution, but what we tell everyone is is at the bare minimum, you have to have a plan. Everybody's plan is gonna look different, but what is our plan? Because the last thing you wanna do when you face that scenario is what do I do now? Mhmm. Like, oh, gosh. What do I do now? I I you know, and a lot of times where this comes up with us, with the families we work with is it's mom or it's dad needs help. And and the kids are coming to us and saying, what do we do now? It's like, oh, boy. You know? Yeah.
Ben Hoeger [00:11:02]:
That's
Carol Ventresca [00:11:03]:
Little little late. Little late. But never completely too late. Right. So this goes kind of into my next question. Mhmm. When you're looking at a plan, it's really not just retirement for twenty, thirty, forty years down the line. We also need to look at what do we need today just to pay our bills? What do we need tomorrow when we need a new furnace or a new refrigerator? And then what do we need for those retirement years, when we are not able to work every day? How can we possibly project today's needs, what we need decades from now, and when we're gonna be able to afford to take vacation?
Ben Hoeger [00:11:46]:
I'll be honest with you. That it's a tough it's really tough. And and I you know, and again, this has been a, a I would say a maturing and aging process on my part, is understanding as I've grown up, I've had family, is how I'm talking with families about the planning that we're doing and understanding that there needs to be a balance in everything. What good is it for me to sit here and tell you you need to max out your retirement plans and you need to do this and this and this for this goal that's twenty, thirty plus years away Ben at the same time, either you're just not taking vacations because you can't because I'm telling you, you need to save all this money. Well, that's tough to keep going to work every day and keep committing to the saving strategies when when there's nothing that you can really look to as far as joy in life. Right? So we, you know, we we talk a lot about what's the balance. What are the rewards? You're doing hard work. What are the rewards? And how do we balance that with the work that we need to do? Right? Right.
Ben Hoeger [00:12:42]:
So that for sure is a part of that. But I, you know, I would even say that your your question, Carol, really reminds me of it's like our family road trip. We just got back from spring break and we went down to to Destin for a few days. And, you know, it's it's never so much the trip there. It's the trip back home. Right? That's the tough part. Right? And, you know, why that reminds me of this is you are sure to encounter detours along the trip. Right? That is part of planning.
Ben Hoeger [00:13:08]:
You need to plan for the fact that's gonna happen. We thought we'd make it home in twelve hours. Instead, we made it home in fifteen hours. But you know what? The reality is Ben when we hit hour twelve or thirteen, we couldn't just pack it up and say, well, we're done.
Carol Ventresca [00:13:19]:
We still had to get home. Yep.
Ben Hoeger [00:13:21]:
Right? Kids had to go to school and I
Carol Ventresca [00:13:22]:
had to go to work. Kids had to go
Ben Hoeger [00:13:24]:
to school. I had to go to work. Absolutely. So, you know, you gotta power through that. And what's that plan look like? How do we, you know, how do we continue to muster through? Well, our our plan was throw more chips and snacks at the kids and say, we're we're going. Right? That was our plan. But you have to have a plan of how do you keep making it through this? And, you know, I do believe that that's where the reality is is life is a journey and is sure to be riddled with detours along the way, just like a good road trip with your family. So I think those things have to be understood.
Ben Hoeger [00:13:51]:
Now as far as dealing with today, again, I think that's where a good plan is built to account for today. Because, again, what good is it if you're making mistakes along the way today because you're just focused on the future? The other thing that I preach with a lot of families that we work with is if we have a good savings plan that's keeping us on track, I don't so much say that we need to hit those goals as far as savings, but families will then come to me and say, is it okay if we go and do this? If is it okay if we go and do that? And I always come back to them. My wife and I have the same discussion. It's like if we're doing our goals and we're doing our job that's keeping us on track with our plan today, that's our permission to go and spend money on things we want to spend money on at that point. Right. It kinda gives us a good guide at that point. So I I think all those things need to be taken into account. But, absolutely, I mean, change is gonna happen.
Ben Hoeger [00:14:45]:
You have to accept that and be flexible. When you when you go to your your point of how do we possibly project this all the way through these many decades, you have to accept the fact that change is gonna happen. And that's where we come back to this idea of anchoring decisions and navigating those changes by focusing on your values and your purpose. That's gonna help us through this stuff, that ultimately, we we know we're gonna face these changes.
Carol Ventresca [00:15:08]:
Right.
Brett Johnson [00:15:09]:
Yeah. Well, you know, let's talk about changes and kinda going back to our thought a minute ago about that unexpected debt, the family, mom and dad having a problem or something like that. Medical, or life threatening disease or natural national a natural disaster. I'll get that out. Or job loss. That that can cause an an increase in in income very quickly. All these situations are unplanned, but can decimate that financial situation. How does a financial plan that details both savings and spending support a family through those difficult times?
Ben Hoeger [00:15:44]:
Yeah. I, you know, I I think of this as it it really helps make those, decisions in difficult situations. The the moments of uncertainty, what are you gonna look to to prioritize or make decisions. Right? And having a plan in place helps you at least with a starting point of that conversation instead of just spinning in a circle and saying, gosh, what do I do next? Right? You're already in potentially a moment of chaos. So having a place to start with your plan that's already there and you can revisit that and say, well, let's just go back here. That's that's a really good starting point. It's really thinking of it as a guide. When I when I was thinking about some of these questions, you know, the land on the Hudson? So they reference this in that and and this is where I got this reference from, and I I talk about families with families all the time about this.
Ben Hoeger [00:16:35]:
They reference something called a quick reference handbook pilots. Right? So when you get in a moment of chaos as a pilot, the first thing you're trained to do, presumably, I'm not a pilot, but based on this movie. Right? They pull out this manual. It's their it's their QFH or QRH, quick reference handbook. And it is there basically to identify and say what steps do we need to take next? What do we need to prioritize to get ourselves out of this disaster or get ourselves into a safer position? And I think of our planning that we're doing for the families we work with as that is our QRH. Our plan is our QRH. When we hit a moment of disaster, what do we need to do next? And it and it really allows us to prioritize and navigate that situation so that we can get ourselves back on track without major detours.
Carol Ventresca [00:17:24]:
You know, one of the things I used to tell students, they would do their resume, getting ready to graduate, look for their first job, and they would do a resume and they'd come in and say, I'm done. And I go, well, guess what? A resume is a work in progress. It's never done. It until you actually literally walk out of the workforce in fifty years, it's not done. So really a financial plan is the same kind of thing. It it is a guide, and I'm not saying to not put all the information in there, but we shouldn't look at it as being a done document because every day something's going to happen that could not just force you to make a change, but guide you to make changes because something in your environment has changed. For instance, somebody, who may not have been married, not thinking about getting married when they had a financial plan, but maybe ten years later, suddenly, they're married. Yeah.
Carol Ventresca [00:18:29]:
It it and it there's there are things that are going to happen. Yeah. So I think that people don't do a plan because they're afraid of that it's a done document.
Ben Hoeger [00:18:40]:
Yeah. It's it's probably the the worst thing that could happen in in I I hope we don't go that direction as an entire financial planning industry, if you will, of making it feel like a plan is a commodity. It's a thing and that you buy this and then it's done. That I don't think that's gonna serve anybody purpose. Honestly, and I share this with families when we're working with them. If I could keep the watermark of draft on every plan I did
Carol Ventresca [00:19:06]:
Mhmm.
Ben Hoeger [00:19:06]:
I would. Because we are constantly in a state of draft with our plans. And back to your point, Carol, I mean, yeah, you know, I I tell everyone I I've always I I feel like I do a nice job at at planning. I've always been a planner. But even I can't plan everything that happens in my life. I I had no idea we're gonna have twins.
Carol Ventresca [00:19:26]:
Right. Surprise.
Ben Hoeger [00:19:28]:
Yeah. Right? Yeah. No no no one gives you that option to check that box at the hospital Yes. Unbeknownst to me.
Carol Ventresca [00:19:33]:
So Yes. It yes. Talk about, no time to save for the second kid going to college.
Ben Hoeger [00:19:40]:
No. It's just it's here it's here and it's happening. So here we go. Right?
Carol Ventresca [00:19:43]:
Mhmm. Yeah. Very true. So, you know, we're we keep talking about putting this plan together. And needless to say, we've all need to take a look at at our plans with all the shifts in the market today. Are there steps that we should have already taken or can take to protect our financial situation when these drastic shifts happen. Are I guess I'm looking for maybe more specific ideas. Mhmm.
Carol Ventresca [00:20:16]:
We're already in the midst of this turmoil. What do we do?
Ben Hoeger [00:20:19]:
Yeah. Here's where it again, this is, I would say, one of the challenges of having so much information at our hands, having the, you know, the Internet, having ChatGPT that you can plug questions into and basically just talk to it like you would your adviser. My biggest concern about this evolution is ChatGPT doesn't know you. And you can feed it more information about what about if I am this, what about if I am that, but it's still not gonna know your personality traits, how you handle things emotionally, etcetera. So I do again, I come back to the idea that there's gonna be some basics, but I also think it's very important to understand, that a lot of this is gonna be dependent on who that person is. Goes back to even some of those early in life, impacts that come around to how you make decisions on your financial situation. Right? So I would even just break it simply apart for the conversation today. I break it simply into two major buckets of saying, are you, like, early in your career into, like, the mid kind of the meat of your career, or are you in the late part of your career transitioning into retirement or kind of into those golden years.
Ben Hoeger [00:21:25]:
Right? So I would think of it into those two major buckets when thinking about what do you do when an environment like this comes up. And and the reason I say is because if you're in your career, and I I didn't come up with this. It's like all things. There's no original ideas out there. But I read this the other day when when going over some of the changes happening, and they said, today's crisis can become tomorrow's opportunity. And where I saw someone expand on that idea is they said, if you gave someone, let's say, in the middle of their career, they're earning, you know, they're they're taking care of their family, they feel pretty comfortable, but you do hit this moment of kinda chaos or uncertainty in a market and you have some drops in your four zero one k's, etcetera. And they said if you gave that person $10,000 and pointed on a long term market chart and said, where would you wanna invest this $10,000? You know where almost everybody's gonna point? They're probably gonna point to, like, a time like 02/2008 or February where you saw the market drop precipitously, but then you saw the outcome afterwards, which was this huge recovery. Right? And that's what I mean by today's crisis is tomorrow's opportunity.
Ben Hoeger [00:22:31]:
And so I think it's really putting these things into perspective and understanding where you're at in your career and what's the significance of this, you know, quote, unquote, today's crisis that we're going through? And how is this going to impact you? And what can you do to turn this into a positive? So I think that, you know, for those people that are in that part of their career, absolutely, it feels horrible. But how can we turn this into a positive? How do we find our way out of this? The conversation's a lot different, and we work with a lot of multi generation families. And I'll talk with I'll go from talking with the child of one family to talking to the parents on, you know, an hour later or the next day. And I'll tell them, you know, the conversation I'm having with you, if you go to say, oh, I talked to Ben on the phone today. Here's what he said. Well, your mom and dad are probably gonna hear different guidance from me. Right? And again, it's because their situation is different. So, you know, that focus of late career and retirement, the conversation changes from an opportunity to to we are really worried about how are we gonna cover income replacement.
Ben Hoeger [00:23:35]:
And so Dominic on our team, Dominic Monk and myself, we do a lot of the day to day planning with the families, especially for those in retirement. How are we covering this income? And we talk about it as far as building moats around the castle. The castle is your home. Right? The castle is your income, your protection, that value of wanting to feel financially secure. How do we how do we build moats around that? And it's things like, cash and these safer vehicles, right, that you don't expect to see much volatility out of. And how do you build those things around it to say, that's okay. My plan understands again that I'm gonna see markets ebb and flow. I don't need those dollars.
Ben Hoeger [00:24:15]:
That bucket of money that is ebbing and flowing today is okay. I can let it I can leave it alone and let it do its job because I have these moats to protect me and get me through the next Hoeger many years, and I can leave it alone and let it do its job.
Carol Ventresca [00:24:27]:
Mhmm. Right.
Brett Johnson [00:24:29]:
Alright. Well, older adults are warned to plan for taxes. They need to understand their accounts, how this distributed funds are taxed, and how yearly income may be affected. Or an individual may have a unique situation occur. I mean, both Carol and I have dealt with inherited IRAs, yet we have to manage situations differently because of tax code changes.
Carol Ventresca [00:24:53]:
Mhmm.
Brett Johnson [00:24:53]:
How does a financial plan keep us flexible and protected?
Ben Hoeger [00:24:58]:
Yeah. You know, the the reality is is I mean, taxes are a big piece of the discussion. I I often use the phrase of it's not just about how much you make, but how much you keep. Right? And so, you know, a part of, that tax planning really needs to go along with this planning idea of this this constant evolution. It's ongoing. It's gonna encounter some changes, but it has to be a longer term mindset, in in accounting for these tax decisions today that may not feel like an immediate win today. But oftentimes, this could be mom and dad paying some taxes on some dollars today that feels, not as proactive today, but rather we are doing things proactive for the next generation potentially, just as a as an example. You know, it is very much a long term plan and, again, you know, across multiple generations with, which is really a specific specialty of our team.
Ben Hoeger [00:25:49]:
So the multi generational legacy planning and tax is a big part of that, that I think is is crucial to being a part of the plan and and that's creating efficiency with your dollars. When we find someone, maybe we meet a family and they've already made it through the bulk of their career, they're at retirement, and that's when we meet them. A lot of times, they're already in a good place of saying, yep. You're good. You can you can you're you're in a good place for, retirement. Income is is met, etcetera. And then it's our eyes quickly turn towards efficiencies. Right? How are we gonna create more efficiency? And that is entirely a conversation around tax.
Carol Ventresca [00:26:26]:
You know, I think, I was more aware of dealing with tax taxes when IRAs first came out. Mhmm. So I was working at the for the state and for the university, so I didn't have the four zero one k traditional Mhmm. Type of vehicle. We had five twenty seven b's or whatever they were. So but the whole notion was to keep our taxes down then. Yep. It didn't hit me until the Roth IRA started coming out, and I'm like, yeah, I kept my taxes down Ben, but boy, am I gonna pay
Ben Hoeger [00:27:03]:
them out
Carol Ventresca [00:27:03]:
the ones who Yeah. Later. So it didn't it it's like that didn't hit me right away.
Ben Hoeger [00:27:08]:
Yeah. We we have this conversation a lot about the idea of, you know, our our industry will preach diversification of your investments. Mhmm. Dominic and I will spend a lot of time talking about diversification of your tax buckets.
Carol Ventresca [00:27:19]:
Right.
Ben Hoeger [00:27:21]:
You know, inevitably, through your retirement years, you're probably gonna buy another car. Right? You retire, your same car is not gonna last you for thirty years. You're probably gonna replace a roof, price some furnaces. You're gonna have some big expenses along the way. And And one of the things that we wanna do is manage part of managing our tax brackets is making sure that we don't have these unforeseen major swings in your income. And if all you did was saved all your money into this pretax bucket, which I will which I will say, you know, over the last probably three or four decades, I would say it is a little bit of a fault of our industry that we pushed everyone to save pretax. Pretax. Just max out that four zero one ks and just keep doing all of that.
Ben Hoeger [00:27:58]:
And and I would say it's led some families astray to now you walk into retirement and everything is pretax. When you need to replace that roof or buy a new car and you take a lump sum of $4,050,000 out, that's gonna move your tax brackets. It could have other domino effects, like now all of a sudden you're paying a higher Medicare premium. Exactly. So on and so on. It's it's a major ripple effect across your entire finances if we're not managing those taxes, and and that usually starts early on. So we're having a lot of conversations, again, with those kids across multi generations of, look, you you have a very bright career, but your income isn't really high now. But I anticipate it's gonna grow massively.
Ben Hoeger [00:28:38]:
So why don't we, you know, just rip the Ben Aid off today and pay some tax on these dollars, use that Roth feature. And maybe way down the road Ben you're in a much higher earning role, that's when we think about maxing out some of those pretax buckets.
Carol Ventresca [00:28:52]:
Right.
Ben Hoeger [00:28:53]:
So it's it is being thoughtful. And and, again, it's the, I always share with people, it's the fortunate position of the world I get to live in and, obviously, and then the experiences that I'm building over many, many years of doing this that I get to share this with families. Right? It's it's not just information. It's the wisdom that I've acquired over time.
Carol Ventresca [00:29:09]:
Well and all the folks that I have worked with over time, we're now, at the, wonderful stage of having more Social Security because they got rid of the WEP penalty
Ben Hoeger [00:29:21]:
Yeah. Huge change.
Carol Ventresca [00:29:22]:
Great, but I keep telling everybody, be prepared because you have to plan for that higher income Yep. Which could affect your Medicare cost. But, also, they they, Social Security hasn't told us that lump sum they gave us for 2024. What exactly is that gonna mean on our taxes?
Ben Hoeger [00:29:41]:
Yeah. I just had
Carol Ventresca [00:29:43]:
gonna get killed.
Ben Hoeger [00:29:44]:
Just had that conversation with, with the with the lady that she worked for the city of Gahanna, and she said, why? Why, this is great. I got this lump sum. She said, do you think I'll pay taxes on this? I was like, I I don't I don't think they're gonna let us off the hook. Oh,
Carol Ventresca [00:29:55]:
no. No. No. No. We are not gonna let us off the hook by any stretch of the imagine. I said it's all we have enough money to worry about, not enough to go and live in Hawaii.
Ben Hoeger [00:30:04]:
Yeah. There you go. Right? Yep. Yep.
Carol Ventresca [00:30:08]:
So we're we're realizing all these problems, with a plan. How do we go about making changes without overcorrecting, which I think, so far, the news is saying people aren't panicking and dropping completely out of the market. But there are possible possible situations in which people overcorrect and and, try to beat the market, which is almost impossible. Mhmm. So much is unknown. How do we hedge our bets?
Ben Hoeger [00:30:38]:
Yeah. Not to keep coming back to the same idea, but I think this is really where our specific process of focusing on those values and purpose. A story I like to share with people is maybe along the way, you had a conversation of I really want to, let's say, buy a vacation Hoeger, and and there's a strong why behind it. It's to spend time with my family. I did this growing up. I built a lot of memories. I wanna do the same thing. Right? And maybe that's that's a goal.
Ben Hoeger [00:31:07]:
And because of that, you're making certain financial decisions, and then something comes up and it changes along the way. How do you pivot? Well, if if we really understood that that your values of family first and your purpose of I wanna build memories with my family, if we didn't understand that is at the heart of you wanting to buy this vacation home, could we necessarily be in a position to advise and pivot that conversation to, well, maybe we don't buy that place. But can we rent a place and still build those same memories and go back to the same place many, many times? Maybe we can fit that in a plan, but we can't we don't have it in the budget to now buy a place. Right? So, again, those those values and purpose, I think, keep us grounded in times of uncertainty and chaos that we can come back to it and say, what's the purpose of this money? It it really keeps us focused on that why and to what end are we making that decision. I I think the other thing as far as, you know, hedging against, you know, these major changes that can come about, this is really continuing to update your plan and deal with the changes. You know, the tweaks or detours along the way as life comes at you, again, based on your values that that's really what's important to you. We can't we can't get away from that because, again, I'd rather make small tweaks along the way as opposed to massive and radical changes. We we talked about this a little bit earlier, just a few minutes ago, but I I do believe this is where the idea of financial planning needs to move from a noun to a verb.
Ben Hoeger [00:32:41]:
Right? It it it it's this ongoing activity, not a one time stale document. And and the reason I say that because that really is what alleviates, you know, the pain that, you know, coming from changes in a in a plan left stale for too many years. If you leave it stale and it just sits on the shelf and then you pull it out, but so many things have changed, is that really still valid to get you through when you have a major moment of chaos? And and the reason I share all those things, it really comes back to this idea of how do you, eliminate the chances of you overreacting. You eliminate those chances of overreacting by having this solid plan in place, remembering what your values and your purpose are, really your your why. Why am I investing? Why am I saving? And if you can continue to answer that in a very simple way, when when you feel this inclination of, this feels really bad. I think I'm gonna stop saving into my four zero one k for a little bit. And I've had a lot of questions like that over the years of should I pause my four zero one k savings? No. If anything, now is the last time you want to because we're just continually adding and buying at lower and lower prices.
Ben Hoeger [00:33:49]:
So, you know, again, I I think that's where being able to come back to answer simply why am I investing? I'm investing for this that's really important to me, financial freedom or safety for my family, etcetera. And and that's gonna be the thing that keeps you on track.
Carol Ventresca [00:34:03]:
You know, there are so many articles out there because I get a lot of emails that are targeted to older adults. Mhmm. And it's all that how much money should you have saved by the time you're 30, by the time you're by the time you retire? And and I always sort of get a chuckle and open those up and going and it's either like, oh my gosh. I'm not even close to that or, oh, thank you. I'm I'm good. You know? But those are those are just a bare number.
Ben Hoeger [00:34:34]:
Yeah.
Carol Ventresca [00:34:35]:
It's really not a a y Yep. Or or any of your value based on that. I mean, if if I open it up and it says I should have $10,000,000, I'm in trouble. Well, and and And and confused.
Ben Hoeger [00:34:47]:
Yeah. And there's this old commercial. I think it was ING back in the day. There's this old commercial of, a a guy cutting the hedges, and he'd have a dollar floating above his head. It'd be like 500,000, a million, whatever. And their tagline was, what's your number? And and we've really, tried to challenge that idea. And the reason we say it is because when you when you get to that number,
Carol Ventresca [00:35:09]:
well
Ben Hoeger [00:35:09]:
Ben what?
Carol Ventresca [00:35:10]:
Mhmm. Right. Alright.
Ben Hoeger [00:35:12]:
So you reach that. Now what? Alright. So does that make you feel good? Okay. Maybe. But now what do you do?
Brett Johnson [00:35:16]:
Does that
Carol Ventresca [00:35:17]:
mean I get to spend down?
Ben Hoeger [00:35:18]:
Right. There's there's just so much more to that conversation of, you know, if if your number is saying this is what you need for retirement, that's great. But there's so much more to living a fulfilling retirement than just having that number.
Carol Ventresca [00:35:30]:
Right.
Ben Hoeger [00:35:31]:
And so if we just focus on what that number is, I think that it's, like, maybe one fourth of the conversation of what a fulfilling retirement looks like.
Carol Ventresca [00:35:39]:
That that you've brought up a topic that I didn't include in our list of questions. But do you often get folks come in and say, I really want to retire. I can afford to retire, but I don't have anything to do.
Ben Hoeger [00:35:50]:
Oh, it's it's a major focus of of what we do. I'd say we could probably do a whole separate podcast just on this idea of retirement readiness.
Carol Ventresca [00:35:57]:
Mhmm.
Ben Hoeger [00:35:58]:
Right? And what what we mean by retirement readiness, this is something that our team practically does. We're in the middle of, embarking on our next every spring, we do a retirement readiness course. And our target for it is folks that are approaching retirement, not necessarily already in retirement. I mean, it can fit there too, but it's folks approaching it. And the idea of the retirement readiness, courses that we go through is all about preparing for that transition, getting your mind right for what's my life gonna look like. And the reason we say this is if I could put it fairly simply and say that really retirement comes down to, like, four major things that you have to have, I would say, somewhat figured out to say that you're you're living a fulfilling retirement. Finances are one of those. And that's why I say it's maybe a quarter of it.
Ben Hoeger [00:36:44]:
But then you gotta have your health. Mhmm. Right? You gotta have a purpose and you gotta have relationships. If you don't have your health, relationship, or purpose, you're gonna wake up every day and just kind of feel lost. And you can't just look at your bank account every day and feel fulfilled. Right.
Carol Ventresca [00:37:01]:
I I a friend of mine is looking to retire out of, a k through 12 education and I told her that one of the hardest things I had to deal with was no longer having a title. And, so thank goodness Brett convinced me to be a co host of a podcast. There you go. So I have a title. But it it it really does it's that notion of purpose.
Ben Hoeger [00:37:23]:
Yeah.
Carol Ventresca [00:37:24]:
When I left my last job, I hadn't intended to retire, and then COVID hit.
Ben Hoeger [00:37:30]:
Yep.
Carol Ventresca [00:37:30]:
So I just changed my plan Yeah. Completely. But I I just needed to come up with a title. So thanks.
Brett Johnson [00:37:36]:
Sure. No problem. Easy easy solution. Easy.
Ben Hoeger [00:37:39]:
Yeah. Easy.
Brett Johnson [00:37:40]:
Yeah. Right. Didn't even know I was doing it. Yeah.
Ben Hoeger [00:37:43]:
Happy to oblige. Exactly. Exactly.
Brett Johnson [00:37:46]:
Well, you know, what we've been talking about seems to be encapsulated in that, you know, a professional financial planner seems to be key to a successful portfolio. I mean, and and I I even put the portfolio in quotations with that portfolio. Yep. Like you said, it's really kinda money, but it's a lot that portfolio could be the the health, the friendship, and and your where where you're going next to.
Ben Hoeger [00:38:07]:
Yeah.
Brett Johnson [00:38:07]:
So finding a planner you're comfortable with and who understands your situation can be difficult though.
Carol Ventresca [00:38:13]:
Mhmm.
Brett Johnson [00:38:13]:
First, what do we need to consider when searching for an individual such as their certifications, backgrounds, you know, years in the field? Ben, what questions should we ask when we interview them? And then most importantly, how much weight do we give to the advice we receive from our friends and family on their financial planner? Like, hey, my neighbor dude, Joe. Yeah. I gotta talk
Carol Ventresca [00:38:35]:
to him.
Brett Johnson [00:38:35]:
Yeah. He's the dude. You know, that sort of thing. Yep. How do we balance all this out?
Ben Hoeger [00:38:39]:
Yeah. Great questions. You know, yeah, I think some some of the basics you pointed out, you know, look for certifications. And it's not so much that I wouldn't even necessarily say that that means someone is very well equipped to help you. I would say more than anything to me, because I I've met folks with the CFP, which I have, a certified financial planner. And there's a varying degree of skill sets. You could boil that down to saying you figured out how to pass a test. Right?
Brett Johnson [00:39:08]:
Well, you know, it could go to the point like you you're just making. You could put a doctor for your name. That doesn't mean you're a good doctor.
Ben Hoeger [00:39:15]:
Hundred percent. And that's absolutely. And so that's where I I'd say more than anything, if you see that certification, don't put too much weight on it. But what you can put on that is saying that they're they're committed to further education and refining their craft. I I think that's what I get out of seeing someone that has accreditations after their last name.
Carol Ventresca [00:39:37]:
Is it is it true that I because there was a change a few years ago in financial planners in terms of who they're responsible to? Mhmm. And isn't that a different certification than someone who is more like a broker?
Ben Hoeger [00:39:54]:
Yeah. So so that comes down to this word, fiduciary.
Carol Ventresca [00:39:57]:
Right.
Ben Hoeger [00:39:58]:
Being a fiduciary. And and the that comes in a lot of different ways in our industry. So that's, I would say, a different topic, but that comes in a lot of different ways. But as a certified financial planner, you walk around with the hat of of being a fiduciary, meaning that you put your client's interest ahead of your own, essentially. Right? But it comes with a whole litany of things after that that are kinda, I would say, the certified financial planner credo, right, of of what what we need to follow to really provide that good experience. But, again, I I think that credentials are are good. But, again, to me, it just tells me that they're committed to trying to further their education and be better at what they do. It's like an athlete that shows up to the gym every day as opposed to the one that's like, I'll go maybe every other day.
Ben Hoeger [00:40:46]:
Right? There there there's a difference of commitment there. So to me, that means that they're committed to what they're doing and helping you. I think the other thing that I'd be looking for is a team with multiple generations on the team. Yeah. Right? And and that might not fit everybody's need. But assuming that there's a family there and you're hoping that this person can not only help you but can probably help your kids someday Or when you pass, they're gonna be there to help your kid in another situation. I I think that's where having multiple generations on your term on your team, being able to not only serve the purpose of your family, but also just giving a diverse approach to the advice. You know, how how Jeff, my partner, how he thinks about things near the end of his career, and how I think about things in the middle of my career, and how Dominic thinks about things at the very beginning of his career and how financial planning has evolved over those years, it brings a lot of different conversations when we sit around the table with the family.
Ben Hoeger [00:41:46]:
And that's you know, it's not even just behind closed doors. Like, that comes out in conversations with folks that we're serving every day.
Carol Ventresca [00:41:53]:
And succession planning for your firm is important.
Ben Hoeger [00:41:56]:
And and and that's that's obviously another knock on effect to it for sure. Right? That's knowing that, like, I hear this a lot from, some of our families that are into retirement. They're going through this phase. It's kind of odd right now. They're going through this phase and they'll ask, you know, Jeff and I, like, what what's your plan? Or they'll feel comfort in the fact that I'm gonna be here for a long time and they're not gonna have to go through a significant change of philosophy or guidance or build a new relationship. But I hear it on a regular basis, like, oh, my dentist retired. I gotta find a new dentist. Oh, my doctor retired.
Ben Hoeger [00:42:28]:
I know. You're you're seeing it. Right?
Carol Ventresca [00:42:30]:
Last year, I had found a new doctor and a new eye doctor. New dentist and eye doctor.
Ben Hoeger [00:42:35]:
Is that not unsettling? It is. That you shared so much information about yourself, personal information, and now you gotta kind of like restart to an extent. Can you imagine doing that with your money?
Carol Ventresca [00:42:47]:
Trust somebody.
Ben Hoeger [00:42:48]:
Yeah. And rebuilding that trust. And that's where, again, you know, so Jeff and I have been together for twenty years. The families that he's been working with for the last thirty, I've known him since I've been a junior in college, let's say. I mean, they've seen me grow up. So to say that my relationship is close with these people, I would say, is is is leaving it, with some more to be said there. So, so those are the things I would start to look for. Now, the questions I would start to ask, though, you know, I I think you gotta ask them who they work with.
Ben Hoeger [00:43:20]:
Does it sound like you? So for example, if you sit down, they say, I only work with doctors, and you're not a doctor. Wow. Oops. Maybe not the right fit. Right? So who who do they work work with? Does it sound like you? What's the what will the relationship be like in communication? You might have an expectation if you want to hear from, every three months. They might say we talk with you once a year. They might say we want to talk to you four times a year and you say, I don't have time for that or interest. I'm just looking for someone to help me unless maybe do an annual checkup.
Ben Hoeger [00:43:54]:
Right? So how does how does that, how does that idea line up? Obviously, how they're paid. Right? Understanding, you know, that part of the equation.
Carol Ventresca [00:44:03]:
And that's that is really a key question that people should not be embarrassed to get that information. Alright.
Ben Hoeger [00:44:10]:
Never. I mean, you you would hope honestly, you would hope that they're just gonna be forthcoming and share that and it doesn't even have to come down to you asking it. But if if they're not gonna share it, you need to ask and understand. And and the big thing that I'd be looking for is, potential conflicts of interest. Right? I'd be looking for conflicts of interest in how they get paid and the advice they're gonna be providing you and making sure that it puts them again in that capacity of being a fiduciary of that that compensation isn't getting in the way of making the right decision for you and your family. Right. So I I think those are are obviously great questions. But I would say most importantly, you know, do you think you can be comfortable talking with them and and having that feeling of trust you referenced, Carol? You you gotta have trust.
Ben Hoeger [00:44:53]:
Some someone shared this with me early on in my career. They said, let's get it very straight here. When you meet with the family for the first time and maybe you go through what you do, how you do it, your philosophy and investing, planning, etcetera, let's just assume it's a husband and wife. They are not gonna walk out and sit in their car and say, can you believe that chart that Ben showed us? Where do we sign? Right? No. They're they're probably gonna say something like, I think I can get along with him.
Carol Ventresca [00:45:22]:
Or he was just a young puppy and doesn't know what he's
Ben Hoeger [00:45:24]:
talking about. Right? Yeah. Right. So so I think I think that's again, I think those sometimes we we don't need to make it more complex than does a person give me a good feeling.
Carol Ventresca [00:45:33]:
Yeah.
Ben Hoeger [00:45:34]:
I think there's a gut check there. And then, you know, lastly, the, you know, how much weight do we put into, you know, my neighbor, Joe, saying you really gotta chat with him or whatever. I I think referrals are a great place to start. And again, I would come back to the idea of look at the person you're asking for that referral. Is it a colleague that looks very similar to you? Is it a neighbor that looks very similar to your situation? Again, don't ask your doctor for a referral if you're an accountant or some other scenario there that would be feel extremely opposite.
Carol Ventresca [00:46:09]:
There is always a potential problem that a financial planner could have made some mistakes in the past. Mhmm. There could be complaints against them professionally. Mhmm. Is there some place that if you're looking for a financial planner, one more place you really need to check and make sure this person is on the up and
Ben Hoeger [00:46:29]:
up? Yeah. It it's called FINRA BrokerCheck. FINRA BrokerCheck. You go there and and you can type in the person you're potentially gonna and I would do this on the front end. Right? Before you go and meet with them, you can look them up by their last name. Not only are you gonna see if there's any complaints, you'll see a history of what firms they've worked at, how long they've been at those firms, their licensing status, how long they've been licensed, etcetera. So that it's it's kind of I I tell people FINRA is is like, our driver's license history for our industry. It it doesn't give a lot of personal information, but it does give you a pretty good history of where this person's been and what they've done.
Ben Hoeger [00:47:06]:
So I I think that's a great place to go. And and I wouldn't if if you see something on there I I mean, obviously, give the person some credit, but just ask them for some feedback. If I saw this, like, I don't need, you know, I need to share the details, but it's a little concerning. Can you share with me maybe what happened? Because the the reality is is our industry, you you can find yourself in some litigious situations and maybe not always with good merit. It could have been someone got really upset and they wanted to prove a point.
Carol Ventresca [00:47:38]:
Ben, I'm gonna carry Brett's question one step farther. Oftentimes, we need more than just a financial planner. We may need a lawyer, a a tax accountant, or, if depending on our own particular situations. Do you have some feedback for our some tips for our audience that gives us some ideas of where to look? And do financial planners normally have those sorts of relationships also that can help their clients?
Ben Hoeger [00:48:10]:
Absolutely. So this is a role that our team takes very seriously. We we often say that we're out there doing the due diligence for you. So kinda how you we were just talking about interviewing an an advisor and what are those questions look like. We're doing this on a regular basis for attorneys, CPAs, property and casualty insurance agencies, the you know, a whole health insurance scenarios. Right? These are all all the things outside of the scope of what we personally can help you with. So we need to find partners that can help us with all these things that are inevitably gonna come up with your finances, and can, again, can create some efficiencies or, you know, the health insurance is a big one. If if you're in a position to retire before 65 Medicare age, you gotta figure out health insurance.
Ben Hoeger [00:48:55]:
And it's tougher and tougher now than it ever has been. So we need we need an expert in that field. So, you know, that is, again, big role that we take seriously in doing our due diligence to kinda have an inventory of folks that we can pull on, in those different categories. So I would also take that as one step further and saying that if if we don't make the introduction, if if someone comes to us and asks us for that referral, if we don't make the introduction, we're constantly asking who is it that you're working with, and we want to build that relationship. Because in our in our minds, the the best scenario for a family that we're working with is they are in the middle and they are surrounded by a team of professionals. Everything from, you know, your risk management with property and casualty insurance or business insurance, depending on your situation, to the health insurance, the life insurance side, the attorneys for your legal, challenges, or planning such as estate or business planning, tax, all around. And the reality is is that best team is when we're all talking together in the interest of that family in the middle.
Brett Johnson [00:49:58]:
Well, thank you for joining us. It's been great discussion. And it's Carol and I have always mentioned every episode we learn something, you know, and and I'm hopefully, we know the audiences as well too though, but, at the same time, when we end, we always ask our guests if they have any last words of wisdom, you know, suggestions, resources, or advice that you'd like to add that maybe we didn't touch on, or you wanna reinforce?
Ben Hoeger [00:50:21]:
Yeah. So I the one thing I'd say just again because of the environment we're in now and assuming as this comes out, we're probably still feeling some of this scenario as well. When uncertainty is rampant, it it doesn't always necessitate change. And sometimes, I believe, actively making a decision to do nothing is still a decision. Right? So I I think that's something that people should keep in mind because sometimes acting with some kind of knee jerk reaction of feeling like you need to do something because things are changing, that's not always the best idea. Now, obviously, you gotta be careful to not bury your head in the sand and not make a decision because you don't want to. Again, it's about actively saying, I don't need to change anything here and and feel comfortable in the fact that that's okay. Right? So I I would say that's one major thing that I'd share with folks.
Ben Hoeger [00:51:13]:
The only other thing I would share just when it comes to resources, is obviously, you know, in in the resources, from, the podcast here is, you know, following us on Facebook, LinkedIn, our website. We regularly put out a lot of resources. We have recordings with me and Jeff and Dominic, our life planning coaches, lot of resources out there. And it covers a broad set of topics. And I would say everything that we are aiming at is all about living a fulfilling life. That's what we're trying to aim at every day and trying to answer those questions of, am I gonna be okay? And how can I how can I optimize my situation here? I'm looking to improve my situation. How do I do
Carol Ventresca [00:51:52]:
it? Wonderful. Yeah. Thank you so much, Ben. This is wonderful to see you again. Oh, yes. And and as as Brett said, I always think I know a lot about financial planning, but always, you're bringing us something new, some new ideas, and and, some calmness to to the situation, which we all need to take advantage of at this point. Yeah. So many thanks to our guest expert today.
Carol Ventresca [00:52:20]:
Benjamin Hoeger is the director of the Hedley Hager Group at Baird Private Wealth Management joining us and giving us such a wonderful opportunity here to learn more. Listeners, thank you for joining us. Don't forget to check our show notes on the website for contact information and resources that we've discussed today. We'll have them ready for you at our website on lookingforwardourway.com. And we're looking forward to hearing your feedback on this and all of our podcast episodes.