Change: The Only Constant

In this episode of the How to Win Podcast, hosts Kyrk Davis and Rick Gregory discuss the inevitability of change and its impact on both personal life and finances. They share personal anecdotes, including Kyrk’s recent experiences with moving and unexpected home repairs, and provide insights on how to manage financial changes such as job transitions, retirement plans, healthcare costs, and unexpected life events. Additionally, they highlight recent legislative changes affecting social security benefits for teachers, emphasizing the importance of staying informed and planning ahead. The episode underscores the value of having a clear financial goal and adapting slowly to changes to minimize their impact.

Kyrk Davis is a Registered Representative offering Securities through The O.N. Equity Sales Company, Member FINRA/SIPC, One Financial Way Cincinnati, Ohio 45242 (513) 794-6794. Kyrk Davis is an Investment Advisor Representative offering Investment Advisory services through O.N. Investment Management Company. Estate planning services provided in conjunction with your licensed legal professional.

Chapters

• 2:09 Can we plan for change?
• 6:39 Retirement planning changes
• 10:43 Changes in legislation

Transcript

0:02

Welcome to the How to Win Podcast. I'm Kyrk Davis. And I'm Rick Gregory. Want to know how to win in life and in your finances? Then you're in the right place. On this podcast, we'll be talking about everyday topics and how they relate to your overall financial picture. Hello everyone. It's Kyrk and Rick back again with the How to Win Podcast. You'll have to excuse me, I have a cold. I've had a cold for two weeks. I might cough, I probably sound weird. I probably always sound weird, but that's beside the point. And Kyrk and I are gonna talk about things today that happen to everybody. And the main thing is change. Change happens in everything in our lives and me getting a cold, not feeling good. In our hobbies, everything. So Kyrk, what do, what do you think about change? Change is change is always coming. We've made my wife and I have had a lot of change over the past several months here. We've we've moved houses. We then moved back into the old house to get to, to change the floors at the, the new house, and now moving back in again you know, just changing the weather. Yeah. Thank God that changing. The weather's nice today. Excuse me. The weather's really nice today. It's making me feel better, but. Yeah, change. Change always happens. Like we had to hide a drain clogged up last week. Well, guess what? The plumbers came and they said, Hey, you got a pipe broken under your floor. So now after just redoing the downstairs, guess what? We're gonna take it all apart, dig it up and change it. So that's the kind of things that happen and that also happens in our financial lives. We get a job that has a 401k, you know, we have a old 401k that we need to take care of. We got more of a match at our new job. So things change for everybody and it's all the time insurance changes. So how does, how do we adapt Kyrk to change? You know, is it something that we should put on a list or when it comes up we just say, Hey, you know, this is what we're gonna do. Just roll with it. Or is there a plan that we can. Put in place for change? Well, kinda all, all of the above to, to some degree. I think the, the important thing to be able to adapt to the change is to have a pretty clear picture of what we want the, the end goal to, to be.'cause that will, you know, like you, like you're saying, maybe there's a we have a different, you know, 401k, there's different investment options, there's different matches. Maybe there's, there's Roth money in there versus, versus traditional. If we have an idea of we want, what we want our finances to look like and how we need to get there, then when we have that change come up, it's, it's very easy to start adapting those different elements to, to fit the, the overall plan there. So. Some of it's gonna be reactionary to the things that we can't necessarily foresee. Others we're gonna be able to kind of have on a list just waiting for that change to happen. And then other things will just be, Hey, this is the, the changes and this is how we adapt to changes to the, you know, the rd. Established plan. Okay? So if we're sitting down and looking in reality, we can't plan on lots of things ahead of time, but some things that you can plan at least get a little bit like change, like your family is gonna have a child. Mm-hmm. So. We can plan for things, even though that comes up and maybe it's gonna be nine months down the road if we do something, but what are the kind of things that we can plan for, like for a child, for college, for our children, things like that. Because all, obviously that's in the change program. So, you know with us being a financial firm and if we're your financial advisor and you call, said, Hey, we're gonna have a child, or you know, Hey, I need to save some money for college. Are those first steps we, that we take. Ahead of time. You know, do we do that now or do we wait down the road and do that? No, no. Absolutely. The, the, the further ahead what we can plan for something like that, and the further ahead, what we can, you know, adapt our lives to fit that, you know, potential change in the, in the future, the better is gonna give us just a longer runway is gonna make that transition just that much smoother, that much easier instead of just something that's big and jarring to our lives. So for like the child example. Well, we don't just magically pop out a child one day. That's Yeah. Snap your fingers. Yeah. That, that takes time to, you know, for, for the child to actually get here. So what I always recommend when we start having that conversation with clients is, you know, maybe we're just now getting to a point where we're gonna start trying to conceive so we have, you know, potentially a year or so to start making these, these adjustments. So. We can kind of ex look at some potential expenses. Maybe there's, you know, childcare, maybe there's, you know, just additional insurance. Maybe there's one spouse is going to stay home and raise the child for a period of time. Those are all things that we can talk about and kind of have a plan for. So instead of waiting till, you know, the, the due date to really start changing our lives, let's ease into it. Let's go ahead and if the plan is to maybe live off of one spouse's income and while the other spouse stays home and raises his children. Well, let's ease into that. Let's you know, let's go say, Hey, starting today we're gonna take 20% of, you know, that's stay at home spouse's income, and we're just gonna tuck that away and pretend that we don't have it, and start adapting our budget to that. And then give that a couple months and maybe, you know, reduce it some more. But with the end goal of, we've kind of slowly worked our way into. Living on a budget that only has the one spouse. And then we got the added benefit too, of now we've socked away almost a whole year's worth of worth of income as the emergency fund, if you will, that will help just kind of supplement where needed or, you know, hopefully. Yeah, diapers are expensive. Yeah. Di diapers can be, can be expensive there. But the, the whole idea is if we can make our changes relatively slow. We're gonna feel them a lot less than some kind of big jarring jarring event there. Okay. So changes. There's changes in rules for your 4 0 1 Ks or whatever kind of retirement program you have. 4 0 3 bs, five, two nines, all that stuff. There's always changes in that. Mm-hmm. Like I can remember, you know, when I was working at, at Toyota, you know, it seemed like every year. That there was a change in how much money we could put in our 401k. You know, it went up and up and up and I think it's gonna change again. And there's even like some makeup rules where you can even make up some more, you know, are, are, those are things that we deal with every day and we know about. And when people come in, those are things that, you know, that we can tell 'em about that they may not ever know unless that we tell 'em about it. Is there any special things that you know right off the top of your head that are coming? Yeah. There. Well, there's some, some, some big ones. So. And we won't get into exact numbers with this 'cause the numbers are always gonna change, but the concepts are, you know, relatively stable. So once you turn 50, you're allowed to make catch up contributions into retirement accounts. So in other words, that's just a little bit more money that you're allowed to save into your 401k or into your IRA. Those numbers are always changing to begin with, typically going up just because, you know, cost of living is going up. So it only makes sense to. For the IRS to allow you to save more money there. But those kind of things are, are definitely changing. They're even in some 401k plans you know, not all of 'em, and this is a pretty new thing, but some of your match can, can also be Roth money now. So that's a kind of a, a, a big change. Most employers aren't, haven't adopted that yet, but we are starting to see it on, on a few. Well, I know that when I was at Toyota, we didn't have the Roth option in our 401k. And they do now, which, you know, obviously that was a change that I missed out on, which I wish I hadn't of because man, that's a great way to, I mean, it's just, it's awesome to have that Roth option in there. But another thing that changes is obviously, you know, people's lives as they get older. Like, so once you get to 65 or whatever the number is now, then your insurance is gonna change, you know? Is that something that we plan for also? Yeah, a absolutely. So, you know, healthcare is gonna be one of the, the biggest expenses that, that retirees face. Healthcare is also the, the big reason why a lot of people can't retire before the age of 65. When, when Medicare comes into, into play. Now for like Toyota workers they got some some great benefits that after they're there for, for 25 years now, they're. Basically their health insurance is, I think they changed it at the 30, now is a 30 now. Another change. It was 25 when I was there, but that was another change. Perfect, perfect example. Yep. So but, but the, the concept is, you know healthcare is a big, is a big thing. So we can start, and we model this in all of our financial plans. If somebody's wanting to retire, you know, maybe at 55 or maybe at at 60 or 62 or sometime before, before Medicare, well, we have to account for some place that. That healthcare is gonna be gonna be covered in there. So we may model in, you know, looking at buying our own individual policy and having that added expense for, for a period of time. We may look at one spouse working just to, just to have the, the healthcare there. Yeah. And how does that affect the, the overall budget and. You know, oftentimes we've we've had clients that say, Hey, I, I'm at a point where financially I can't retire but I can't figure out the, this health, this healthcare piece, and I don't necessarily wanna pay the, the premiums. So they actually just go back to work, you know, part-time just doing something that's that's kind of a, a fun job there. Maybe it's maybe it's being a starter at a, at a golf course. Just something where they can actually have insurance options available to them at a, you know. A pretty low price, relatively, relatively speaking. So they go to work for two days, a two days a week to to get some insurance and and call it a day there. Yeah. Yeah. I mean that, and that's the thing. So I'm gonna tell you a funny story about change. So Kyrk used to have a Subaru. What kind of Subaru did you have? Kyrk. I had an Outback, probably one of the best vehicles ever made. Oh. So here you go. So his, so he used to send us pictures. Of the Subaru going through snow and doing all kinds of crazy things. And him and Hannah would go on big trips and take the Subaru. Guess what he drives now? A Toyota. A four runner. So that tells you how good the Subaru was.'cause he changed to a four runner. So, you know, I mean change happens in everything. Our cars, our lives, all kinds of stuff. So when you guys get to where you have questions about some of these changes, if something comes up. Call me, call Kyrk, and those are things that we deal with every day. We're not gonna, we're not gonna sit here and tell you that it's easy because sometimes it's not.'cause I gotta dig up my whole basement now and that's gonna be a big change. But those are things that we deal with every day. Well, one you know, one big change that, you know, I don't know why I didn't mention it, didn't mention earlier, but some new legislation passed towards the end of last year that had to do with the, the, the, the windfall elimination provision. So essentially that was let's say for, for example, the greatest examples for, for teachers. They had worked an entire career, hadn't really paid money into the social security. You know, unless they worked a, you know, another job or had a different career there but they were, they were never eligible for, for social security benefits. Actually, even if they did work another job and paid in social security, they weren't eligible to, to get those benefits. So whether it be a spousal benefit or a benefit on their own, sorry about your luck because you have this this teacher's pension, you're, you're uneligible well that never really set right with a lot of people and quite frankly, didn't make a, didn't make a whole lot of sense either. So. They recently changed the legislation that did away with that. So now all of these retired teachers, whether they had paid into social security or, or not, and, and we're just, and we're just, you know, maybe married and had a potential spousal benefit, they can actually claim those benefits now and actually get some back pay you know, based on, you know, you know, age and, you know, when they, they would've applied and, and all of that. So if you, if you're fall into that situation let us know and kind of walk you, walk you through that and it can be a pretty good chunk of change that, that comes into your, your pocket. You know, for, for example, my mom was a, was a high school Spanish teacher for 28 years. She retired back in, I think oh six or oh seven. Somewhere, somewhere around there. Well, she's she's 70 now and hadn't got a, hadn't been able to claim a spousal benefit because of this. But now that they changed that she's able to get social security now she got a, a check for, you know, about$11,000 worth of you know, back pay and is now getting another $1,500 a month. So. Not a insignificant amount of money at all. So that was a good change. Yeah. And a lot of people don't know that yet. A lot of people you know, her included, when I first told her about it, she didn't think that she would be eligible.'cause she thought that only applied if you had a benefit of your, of your own. She didn't think it applied to kind of spousal benefits. So there another change. So we try to stay on top of all of those different. Different, you know, things that happened in the financial world and you know, bring that to, to our clients where, where it applies. Well see, here's another thing I didn't know till just now, Kyrk just told me, so now I do know, but probably those changes are things that most of us people, if we're outside of the Kyrk, the job that Kyrk does and what we do here at Family Financial. I mean, you know, those are just things that, you know, we norm, that they, we normally do here at work that most of us people that's worked at Toyota or have another job somewhere, I mean, we're not supposed to know those things. You know, we need an expert or somebody in that field that can tell us, and that's what we do. Kyrk, you wanna close it out? Yeah. Well so. Again, here's a, here's a change. Rick usually closes out the, the episode, so I'll do it this time. But thank you guys for, for listening. We really appreciate every time you, you click on our link here and listen to us ramble on for, you know, 15 minutes or so. If you guys have any topics that, that you want us to talk about send us an email or give us a call and we'll try to work that into the, into the schedule here. Thanks guys. See you next time. Thanks for listening to the How to Win Podcast. We hope you enjoyed the episode, and if you did, be sure to follow us on your favorite podcast platform so you'll never miss an episode. If you have questions about your finances, visit our website@familyfinancialpartners.com or give us a call at eight five nine two one nine one zero zero. Six.