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Cleaning Out the Financial Junk Drawer

Financial Symphony / John Stillman
The Truth Network Radio
September 18, 2019 5:00 am

Cleaning Out the Financial Junk Drawer

Financial Symphony / John Stillman

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September 18, 2019 5:00 am

We all have one. You can usually find it in the kitchen in one of the bottom drawers. It's that place where we toss rubber bands, paper clips, batteries, chip clips, and any other random item we don't have any other place for. It's our junk drawer and we'd rather avoid it then trying to get it organized. Believe it or not, our financial portfolio has a junk drawer filled with old 401(k) plans, old life insurance plans, and other products we bought years ago but haven't done anything with since. 

In this episode, we'll look at some of those items you'll find in your financial junk drawer and give you some options for where to move the investments to better fit your needs. 

You can read more about this show by clicking here.

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Ready for another episode of Mr. Stillman's opening assignment George alongside the man John Stillman. John was new with what's happening could I get to see you anything new in your office or in your life know what is trying to adjust to your vibrant personnel.only office still. I like to begin this officer sure I'll take that that I appreciate the compliment.

I guess what I has been fun so far and glad to be on the show with you again for another episode Mr. Stillman's opus and I like the topic today because we can all relate every single one of us can relate with the junk drawer in your house and will call this in the financial junk drawer. Just think about that junker you have that you do everything I'm talking paperclips you know that we when you untie the bread you grab that tile Brent going in there.

It would actually have three junk drawers offering data that's a little too much as he assesses because I can't find the stuff I needed anyway you never once pointing out will. So what what's typically in your junk drawer batteries which you now, though he's a whole lot of any more rubber bands, vans, paperclips, wine stoppers, probably some coupons are mixed in there somewhere that expired and right probably Matthew 97 yeah even further. Yeah, a lot of stuff that's not really of use anymore, but maybe could be repurposed or put somewhere else and we get value out of NSE ideas really get a bunch of different financial products or investments that you might have made throughout your life that you just kind of sat on and haven't done anything with and will see if we can make some sense out of them and figure how to put them to better use. So before we get into this will linger on you about Johnny's president and founder of Rosewood well it's you find them online@rosewoodwellmanagement.com also on Facebook as well where he can call 800-545-2991.

He also texted of these is millennial so he takes care of that side yet. I'm right on the border yeah like Tivoli I don't claim to be millennial, though technically I think I am, you will blending 8181. You're probably yeah like you could easily be the youngest of the Jerry's pictures and I'm probably the oldest of the millennial's I was born in 83 so Molly argues with me about this all the time because she's convinced that she's not millennial only know you were born 85 you deftly, I don't care which demographer you ask 85. You are among the older millennial's, I don't relate like if you look at the younger millennial's letter I think is a 96 you have anything, was not one morning in the midnight dwelling in his will. Molly points out is that there is a very distinct difference between people who have always known life with the Internet right versus those of us who knew a time without the Internet.

I remember the first time I ever use the Internet was in middle school and my French teacher wanted me to check the weather in Paris and so I said there for the computer and watched as this map slowly opened up and I could see the radar for the weather in Paris and that was then probably find that it is very accurately back to floppy disks.

Pop and Amanda play games and have type and some coda action farm up so so this is early siblings and that interpersonal skills that exist with those of us that lived before that time, all different, frightened, millennial's. Yeah, I guess we are exactly I was getting today's topic financial junk drawer number throughout a number products to you that have been, left behind, had really been thought about for Wallace to repurpose these in the something that might be useful for somebody so start off with a really old life insurance policy yeah so a lot of times we'll see. People have these whole life policies that they bought years ago, maybe when they were going in their 20s and just getting started in the working world. In some cases it's something their parents took out on them when they were born and just wanted to establish some sort life insurance policy on them so we see a lot where you have a policy that you had for years and you been faithfully paying on it for 10 or 20 or 35 years and in some cases you build up a nice little cash value in their and it might be smart to use that cash value for something else. Whether it's paying off debt or just investing it in a different way. Maybe you don't need that particular life insurance policy anymore and the cash value could be more valuable. He could be that we be better off to take that cash value and move it to a new life insurance policy because unlike everything else in the world which is gotten more expensive life insurance has actually gotten cheaper.

Okay so let's explore the actuarial table reason for so you just said you were born in 1981, so your life expectancy your outcome, you're expected to live. Okay until the early 80s near your early 80s now if you like it if you'd been born 30 years earlier, in 1951 your life expectancy would be early 70s and so because life expectancies of gotten longer life insurance got cheaper because life insurance companies can now collect payments from you for more years before you die, they have to pay up that death benefit. So as life expectancies increase life trajectories deeper so you could very likely let's say a metal policy that you bought in the 80s you have $100,000 death benefit will you could probably get that same hundred thousand dollars death benefit in a newer policy much, much cheaper than what you currently pay and sells its deftly worth looking at those old policies and seeing if a is worth doing anything with the cash value that would be more efficient or if there's not much of a cash value there can we just get the same death benefit the same coverage more cheaply somewhere else, or maybe just outgrow that policy. Maybe your kids are grown and gone. Your house is paid off and you don't really need it for life insurance anymore. Maybe just scrap it altogether and stop paying on so there's deftly a lot of things to look at on makes a lot of sense.

I what about an outdated will will or or an estate plan. This seems like something should be evaluating fairly often anyway. But if you have a look at this in a while which we do with that outdated will will so it could be outdated for one of two reasons.

It could be because circumstances have changed in your life like as an example, I know people who had a will done when they had two kids and thought they were done having kids. Years later they have the loop seat third child and never occurs to them until many years later all you know what we need to update our will to include all three kids instead of just to so that can be one thing. It could go the other way where you not willing to add people to the will.

You're willing to take you out so I know the client has three kids. She's got all three of the will that they made years ago.

Her husband has since passed away and she's not on great terms with one of her daughters and doesn't really want that daughter still in the will. There will be some things that that daughter is a beneficiary on just so she gets something but she doesn't want her estate split equally between three kids. She wants one of only a little bit so she needed to update her will. Because circumstances are changed sometimes is just that you moved. I have people who help will that they got drafted when they lived in Ohio and the laws are different in Ohio than they are here. You need to have a will drafted that reflects the fact that you live in North Carolina.

Same thing if you move from a state like New Jersey or New York or Pennsylvania where the state itself has an estate tax will have an estate tax North Carolina you only have the federal estate tax to worry about. And that's only if you have like a $12 million or more estate.

Most people aren't ever going to deal with staff to ask, but if you moved from New Jersey where there is an estate tax in the state as well as the federal level will then your will probably needs to be changed to reflect the fact you live here now so a lot of reasons you might want update that will that you have looked at in in some cases decades makes sense were going to the financial junk drawer with John Stillman next up is a Social Security estimate that may be originally received during the Clinton administration is outdated, so it's probably a lot of people will bring in their Social Security statements that they have for years and years ago and want me to look at it and say if I think it still accurate.

Well, your income has probably increased a lot. Hopefully since 1994, so that's probably had an effect on your Social Security benefit yet.

Let's look at a more updated statement.

Now what is happened with this is that the Social Security Administration is basically stop sending these out you used to get one every year. Now I and I can't figure out the rhyme or reason behind it because some people do actually still get one in the mail.

Most people don't.

So it's not like they find out that across the board. It's just that they've mostly stopped that. But for some reason. A few people are still on the list and get what you can still get your statement what you do is you go on the Social Security website which is SSA.gov/my account SSA.gov/my account.

You can set up an account. Now the Laskey all the security questions so you can prove that your you and some of them are pretty tricky like you know what make and model car was parked in your driveway for 45 minutes.

In August 1998 seen this, but you have to get all is right and you can get your new statements. The same statement they would've mailed you. It's just that you get it online and you get updated numbers that reflect what your current benefits look like, which is very helpful and crucial in the retirement planning process so we don't want to be trying to construct your income plan based on the statement that you got 10, 15, 20 years ago and you'd find it will put that that website in the show notes you can track down your Social Security estimate, you find that a rosewood well.com will put therefore you leave it there so you can track down right next up would be a 401(k) statement from your last three employer employers that is just sitting in that financial junk drawer yes so generally rule of thumb is when you leave the company you want to take your 401(k) with you. Don't leave your money behind and way too often we see people that have left the job and they just kinda leave their 401(k) over there. Not really paying much attention to it know in some cases there still making adjustments to it. But in a lot of cases, they just kinda forget about it altogether.

I had actually three different cases where people left the job years ago in the 80s and 90s left the 401(k) behind stop getting statements for that account. Along the way and years go by. They forget they even had some had three different people on the verge of retirement who, as we're going through the inventory and thinking about all their assets have suddenly realized weight know what I have an account from company X from years and years ago. Although it wasn't much, was only about $25,000 okay will that was 30 years ago. So we check it now as 150,100 track it down. And this is $150,000 a fell money so obviously it's nice to get that surprise but probably could have a lot more that account. If you had it been paying attention to it and managing it over the years. That's one reason, do not leave it behind because you won't forget about it and a lot of people say well I'm forget about an account have okay well still your better the role that money to an IRA where you have more flexibility and control over your assets instead of just that menu of 13 mutual funds that they give you work you move that money to an IRA and you can invest in whatever you want, stocks, bonds, mutual funds and ETF's.

What have you. So just give you a lot more flexibility and control while speaking personally amount know it's easy to forget about that stuff because not that have account you significant about that.

I forgot about but you'll get into what if you have an advisor, that's you checking up with an kinda refreshing plan. It's easy to forget about that from making changes. I had something that I've had to deal with like listed in this sort of off and and just see where we are and make it just as we need to do one thing I have learned from this new job goddess. I have rolled over and allowed 401(k) into an IRA have made that move since I've gotten really proud of you.

Yeah, that's one thing I picked up, so for now just gotta make the adjustments inside yeah but I think the first step. One thing at a time right exactly what the cool thing was I rolled over, I forgot that some that money was Roth 401(k) money so moved in my Roth IRA. Now it's still pretty good about that tax-free money that's where you will be three want to be so yet that's got to go one step at a time and I'm trying to do that.

I done that here in this job one step you can take towards clearing out your financial junk drawer which is important for all of us as we learn today is to contact John Stillman Dubai card by phone or text 800-545-2991. You can catch them online@rosewoodwell.com's team is ready to help you out.

Answer the call and set up a time to come in and just see him and speak with him about some these items because they are important and they can be repurposed and put you in a better position toward your retirement so John thanks Rob was cleaned out then hopefully we will get organized reviewer doing our best to keep it straightened out well do it for this episode of Mr. summa's opus talk to you next time Carolyn went towards doing business as a rosewood well amendment is a registered investment advisor. Instead for Carolina. The material presented is intended to be general information and should not be construed by any consumer is the rendering of personalized investment advice


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