Make It Last – Ep 127 -Building a ‘Financial’ Home


This week Victor & Mark discuss building a financial home to get you through retirement. Victor knows a lot about building/restoring homes as he worked to restore his own home built in 1878! Also in this week’s episode is a walkthrough of “5 Things Your Kids Don’t Want,” & the practice of decluttering.

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Make It Last with Victor Medina is hosted by Victor J. Medina, an estate planning and Certified Elder Law Attorney (CELA) and Certified Financial Planner professional (CFP). Through his law firm and independent registered investment advisory company, Victor provides 360º Wealth Protection Strategies for individuals in or nearing retirement.

Full Transcript Below

Mark Elliott:  Welcome to “Make It Last,” with Victor Medina. I’m Mark Elliott. Victor has two companies, the Medina Law Group and Palante Wealth. Medina Law Group started back in 2006. You can find out more on our website medinalawgroup.com.

Palante Wealth came from the clients of Medina Lager going how we can help us with all of our retirement stuff? The hence, Palante Wealth came to be in 2014 palantewealth.com. P‑A‑L‑A‑N‑T‑E palantewealth.com.

Victor also is the author of three books on retirement planning under his acclaimed Make It Last series has been featured on national television, “The Wall Street Journal,” “The Huffington Post,” “US News” and “World Report.”

Look Victor’s going to say some things today that you’re like, “Wow, I didn’t know that. I’d like to learn more, or wait, I don’t have a retirement plan. I don’t know how to build my financial house. What do I do? How do I come up with some help in this area?”

Well, it’s easy. You just call the team 856‑506‑8300. There’s no cost, there’s no obligation. There’s no pressure, there’s no judgment. 856‑506‑8300. Glad you’re with us today.

Victor, there’s a lot of moving parts when it comes to retirement, and most of us think about our investments, that’s our retirement world. One of the things I think is a cool analogy, is to compare our retirement planning with building our home. We’re going to build a financial house today on the program, and I know you told your kids the story. The fairy tale, the three little pigs and the big bad wolf, right?

Victor Medina:  Yeah.

Mark:  Back in the days, the wolf would huff and puff and blow every house down, except for the last one. What was it made of? We had straw…

Victor:  We had a straw, we have sticks, and then we ended with a brick.

Mark:  Exactly. The brick house, the wolf couldn’t blow it down, because it was strong. That’s what we’re talking about today. How do you build a financial house to get you to, and even more importantly, through retirement?

Let’s get into this Victor. I think it’s an easy way for us to understand what you do, how you help people when it comes to retirement planning is it really starts with building that strong, sturdy financial house, doesn’t it?

Victor:  It does. It’s interesting too, because those people that know me and clients have heard me talk about the story that was me rebuilding the house that we live in, because the house that we live in is an old home built in 1878. We took the thing down to the studs, and we actually found brick in between the studs.

That was part of the reason why it was so quiet and stable. The people that were building the houses that reason why this thing doesn’t move left or right is because they put bricks in between it before they had any plywood.

It is important to have a sturdy house for retirement because, unlike opportunities to rebuild things, when you’re facing retirement, it’s super important to make sure that the plan that you have in place is one that can withstand time because you can’t go back to work, and you can’t go in and add to the pile.

This decision is a crucial decision, and one that needs to factor in all these things about what happens if the stock market takes a tumble in the future. What happens if your care costs increase?

All of these elements that they’re factoring into their planning that everybody needs to be thinking about, they need to build it to withstand the threat of the big bad wolf of retirement, and it’s important to make sure that they’ve got a sturdy house.

Mark:  All right. You think about it, we want to build a strong fiscal financial house for our retirement. Where do we start?

Victor:  First of all, I think that the idea that someone is thinking about this as something that you should do, rather than just going into it blindly, or just assume that they’re going to pull money from some account when they need living money, that needs to be congratulated, and needs to be rewarded and just heralded because the idea that you want to put a plan in place or wants to build a house around it.

This isn’t land for everybody, not everybody recognizes the need for a way of creating the retirement that is stable, and can withstand the rest of time that they need to live. It first begins with the decision that they care more about creating a plan than they care about the specific products that are involved in there.

We have a way of approaching it with our practice that supports that because for everybody that comes through the process, we create a plan for them. The plan is a page document that goes through income investments, taxes, and estate planning, each of those four elements, and I think that they are all of equal value.

I want to make sure that you have great income, and I want to make sure that your investments are supporting the income and I want you to avoid paying taxes, you have to have your state plan in place, each one of them has a role. It really is the idea that they are all in one place for you to look at.

The plan is this eight‑page document that reviews all these areas. What it does is help you understand how you can gain a successful retirement. What that means for you is that you have the opportunity to rest easy knowing that you have a great plan in place.

Where do you start, you start by making an assessment of where you currently are identifying where you want to get to, which by the way isn’t as simple as saying, “Well, I don’t want to be poor or I want to vacation.”

It is about outlining your goals for retirement, and then being able to determine the way that you’re going to get there, which dovetails into another concept around building homes. You need a blueprint. You need some way of building this so that you know how to create it competently in a way that it will stand up.

You’re going to have the inspectors of life come in and give you your approvals or not. You definitely need that plan to be able to know how to put these things together, because that’s the way that you create and make all of these elements work together.

Mark:  Yeah, you don’t start with the roof when you’re building a house, you better start with the foundation, we’re going to talk about what goes in the foundation, what goes in the walls, what goes in the roof, and all those kinds of things when you’re building that sturdy fiscal financial house for your retirement.

Here’s the deal if you want to talk more about this, your retirement income plan investment strategies, tax efficient strategies, healthcare, legacy estate planning, Social Security’s in the income part, Medicare’s in the healthcare part.

A lot of moving parts are like, “Well, I’ve never done planning like that. I’ve just looked at my investments and tried to figure out, ‘Hey, could I do what Victor said?'” To start with, pull out that 30, 40, 50 60 thousand dollars out of my accounts every year, and I shouldn’t be good. That is not a plan.

Palante Wealth is about holistic planning for your retirement. If you’d like to call the team and say, “Hey, I’d love to get started. I’d like to hear where you think I am? Am I on the right track? Do I need to make a tweak here or there. I like the idea of actually having a written plan for my retirement,” call the team.

They’re here to help 856‑506‑8300, 856‑506‑8300 again, no cost for this at all, because the team, they’re here to help, they just don’t know if they can help till they hear your situation. Why not call? Find out, let’s get started. 856‑506‑8300.

We’re building your strong, sturdy financial house for your retirement. As you said, it starts with a blueprint. The retirement plan that you create for your clients an Palante Wealth, starts with a blueprint. Doesn’t mean you don’t come in and say, in 10 minutes, you’re done. Here’s your plan, good luck to you and hope everything works out.

Victor:  Not at all Mark, because it’s showing up with lumber and a hammer, just start swinging things and say, “I think that there should be a room over here, why don’t we just start building a square.”

Nobody would go about doing that, but it’s this idea that a lot of people start with the end of that element of like, “I want to go pull money out, or I just want to start moving forward or whatever else without even taking an opportunity to assess, but you’re right. What we do in our practice is we help people create their blueprint.

These blueprints are not uniform, they’re not cookie cutter, they are built to the specifics of the clients that we have in mind, because they’re each going to have different goals, or you’re going to have starting resources that are different, they’re going to have different obstacles that they’ve got to overcome.

For that reason, each blueprint is sort of custom‑tailored for them. Each plan that we create is something that is specific to the client that we are working with at that time.

While there are some general principles that needs to be followed, in order to have a successful plan, you have to understand physics. You have to understand that it needs plumbing, and here’s how heating works. All of those are uniform in the way that you would build a house, the way that they get implement is going to change from clients to client.

We want to follow some principles, we want to make sure, for example, that people have enough income to get through all of their days, they’re able to afford the lifestyle that they have or recognize that they’ve got to make some adjustments in those areas. The blueprints always consist of the HVAC, the plumbing, the electrical and the framing off of it.

This is the similar in the way that we would do our plan. We’ve got the income and the investments, and we’ve got the tax planning and the estate planning. None of these can be ignored. None of them can be overlooked. It can be just be passed aside, you can’t just look at a house and say, “That house doesn’t need electricity. I don’t want any put that in a part of the blueprint.”

It’s an essential part of making all of these things work together. We do that for all of our clients. It’s the base part of how we create a plan. It’s also important to know that things change.

When I was rebuilding my home, because it was an older home, as you start to do a little bit of the demolition, you figure out that there are some areas that weren’t what you expected, when you start to peel away the onion.

We had a window that was missing underneath a patio that all of a sudden it was going to rain that evening, we had a patch that thing quickly. We need to be able to have some flexibility built into that.

The idea of the plan isn’t that you just follow it without regard to what you find, but it is a guiding principle to making sure that you create something that is structurally sound, is stable and sturdy and gets you through retirement.

Mark:  All right, this you were mentioning the HVAC, I actually have a friend of a friend and this is a true story. They’re building their second home, and they thought, it’s not going to be as nice as our full time home, but we want a nice place we can go get away.

They said, “We’re not going to hire anybody to do it. We’re just going to get the contractor to do this, HVAC people to do that. We’re just going to separate it. We’re going to be in charge.” They get it done, because nobody was talking to anybody. They get done and they found out oops, we did forget heating and air.

They had to go in and do it on the outside of the house because it would cost a fortune to go back in and tear through and build it in. When it comes to retirement planning, all those areas we’ve talked about, the income, investments, taxes, the legacy planning, and all of that, the estate planning. If we overlook any of these areas, there could be major problems, couldn’t there?

Victor:  Yeah. It really can. I’ll relay my true story as well, which is when we had the plumber coming in and looking at what was going in. I talked to my general contractor, whose name was Eric. I said, “Eric, your guy, Theo,” because it was his plumber, “your guy, Theo, comes in and he just stares for about an hour and then he walks out of the house.”

Mark:  [laughs]

Victor:  I said, “I don’t know if he’s doing any work and he comes back in, and he looks up, and he looks left, he looks right, and he walks out.” Eric says, “You do realize the medium that he’s working in, right? He’s creating the stuff that’s going to handle your toilets and your shower.

“There can’t be any detail that he overlooks. He needs to understand where all of this is going to be flowing and the directions are going.” It’s a good jumping‑off point to undersquare this idea that no, details can’t be overlooked and part of the planning that you do, and it’s one of the reasons why you need an expert in that area to help.

There’s a reason why the general contractor brought in his own demolition team to do that stuff. He brought in a master plumber to do the plumbing and a master electrician to do the electrical work and didn’t try to handle on their own, because he recognized the risk involved if there had been a detail overlooked that would have been identified by somebody that was an expert in the area.

To anchor it back into the way I built my home, the experts that this contractor brought in were experts in dealing with older homes, because I already said that our home was built in 1878, so they were people who were accustomed to dealing with construction in that time. Similarly, you need somebody who’s an expert in retirement if you want retirement planning.

In other words, the home that you’re building isn’t a vacation home or isn’t a second home that’s going to be on the shore or someplace else that is completely different. You have a very specific kind of home that you’re trying to build in retirement, and so it makes sense that you bring in people who are really versed in those areas.

You ought to be in a situation where you’re like, “I know exactly what this looks like, and we can help guide you the way.” You need somebody who does that in your financial work, specifically to retirement.

Mark:  The Medina Law Group and Palante Wealth served the Pennington, Greater Mercer County, as well as Bucks County. Victor has clients in New Jersey and in Pennsylvania as well. If you would like to learn how the team might be able to help you, don’t know if they can because they don’t know your situation, they’d love to find out.

They’re here to help. The Medina Law Group, Palante Wealth, they’re here to help you. Give them a call. Let’s get started. There’s no cost for this. 856‑506‑8300 is the number. Again, 856‑506‑8300.

We’re talking about building your fiscal financial house comparing it to building your house that you live in, and that’s what we’re talking about today. Well, one of the most important pieces of the house is the foundation.

Mark:  Not the most exciting to think about when it comes to retirement, but it might be the most important piece. That’s where we’re headed next. Stay with us. This is Make It Last with Victor Medina of Medina Law Group and Palante Wealth. We’re back in one minute.

Mark:  Welcome back to Make It Last with Victor Medina of the Medina Law Group and Palante Wealth. Victor is a practicing estate planning and Certified Elder Law Attorney. You can find out more about Medina Law Group just by going through their website medinalawgroup.com. M‑E‑D‑I‑N‑A, medinalawgroup.com.

He also is a certified financial planner professional, a registered investment advisor. Palante Wealth works in the holistic planning side for your retirement. The two companies go hand‑in‑hand. palantewealth.com to find out more in that area. P‑A‑L‑A‑N‑T‑E, palantewealth.com.

Easiest probably is just to call. “Hey, I’d love to have an estate plan. I’d also love to have a retirement plan.” Well, the companies work together. That’s how this works. 856‑506‑8300.

We’re talking about building your fiscal financial house or retirement and comparing it to building your actual house. Victor, you talked about your 1870s house that you guys lived in, stripped it down to the nuts and bolts and the studs and all of that, and rebuild it. What’s your favorite part of the house?

Victor:  I tell you of my favorite part of the house, of course, is the kitchen. I love to host things in the kitchen. It’s the last thing that went in. It’s our favorite parts to live in.

Mark:  What’s your favorite thing to cook?

Victor:  Well, [laughs] I am known in the neighborhood. We host them on a regular basis, as the guy that can cook a mean paella. We have paella parties on Saturday nights, and it’s everybody else’s responsibility to bring everything else.

I have this 22‑inch pan that I have to buy a special grill for it to fit inside of, because it wouldn’t fit. The grill I own when I got the paella pan, I changed the grill to fit the paella pan, not the other way around. Paella is my thing.

Mark:  Well, I’d say so if you’re going to get a special grill to make it great for the neighborhood. Everybody has their favorite part of their house. I have a little golf room in my house. I got the golf channel on, I’d play with my putters and all that stuff. I mess around in the golf room. I love that part of the house.

When you think about the most important part of your house, is the foundation. When you took your house down to the studs, the foundation was really the key to the rest of the work, [laughs] I would guess, isn’t it?

Victor:  It was. When we bought the home, the home sat on the market for about a year and a half, because visually it was not appealing. There was wallpaper that was really old. There was terrible rugs. It looks like, from the outside, a complete money pit. It sat on the market for about a year and a half.

The reason why we weren’t bidding at that time is because we weren’t looking to change the home. Deals way into too much detail, but by the time we were looking in a home was when Dylan was born. He’s our youngest, so we needed to get a bigger home because we were getting a bigger family. When we look at that home, we’d always love older…

In fact, Mark, this is the second old home that we’ve owned. We’ve lived in Massachusetts. We owned and rehabbed one that was built in 1880, couple years younger. When this one, we walked through, I brought in an inspector.

I said, “I’m not really concerned with the outside, the way it looks, but tell me about the foundation. Tell me about the bones.” Because at the end of the day, this thing’s been around for around 140 and I want to know, is it just sticking around and it’s about to break, or is this thing really built for the ages? It turns out that it was built for the ages.

The guy who owned it before me was a medical doctor that ran his practice out of the home and he didn’t like to spend money. When he spent money, you know what I’m talking about, he spends money. He replaced the roof with slate.

Now, to the foundation, he dug out two feet on the bottom of the foundation, poured concrete and ran ‑‑ and I talked about this in the other segment because it was my own house ‑‑ he ran steel I‑beams down the center of this thing to make sure it was the most rock‑solid foundation you have ever seen.

The guy said, “I’ve never seen 18inch steel I‑beams in residential building but, your house has them. It’s not going anywhere.”

Mark:  That’s made you feel pretty good, to now make an offer and now you’re in your home and its redone and there you go, you’re having paella parties. I mean you can’t…

Victor:  Exactly.

Mark:  …and you think about it, when we think of the foundation, we’re not thinking that’s our most exciting place to hang out, but it’s the most important part of the house. Let’s take our foundation of that holistic retirement plan that you help people create, what are the most important foundational pieces you would say, of that fiscal financial house?

Victor:  Yeah, you’re right. When we do the paella parties we go downstairs to the basement to show them the steel I‑beams. When we think about the foundation, we’re thinking about safety and stability. For me that is most linked to the idea of creating income in retirement, because when you retire, you’re essentially creating your own paycheck.

This is no longer a function of you working, and then being able to get paid for that work, you are now in charge of creating your own paycheck and that paycheck that you’re creating that income that you’re generating, from what you have saved, that is the safety that you’re looking for.

That is the way of feeling like you’re going to be OK, as part of us that rock solid component. I would put income as making up the foundation of a retirement.

Mark:  When you think about all of this, when it comes to the holistic planning that you do for your clients Palante Wealth, and you have a planning process for those that come to the Medina Law Group or the estate planning and all that, sometimes it can start with a checklist. “Hey, we need to check this often and check this often.”

I know, you’ve got a special website, for people to, “Hey, you want the checklist for retirement? We’ve got it, right.”

Victor:  Yeah, and you know what you’re doing, it’s a great idea Mark, we’re going to give this away. We have a website we’ve created. It’s called the 920checklist.com.

What we’re going to do, it’s absolutely free. If you go there, you are going to download our checklists challenge, which you get an opportunity to get into my head and look at the things that we would examine, is to try to figure out whether or not you are prepared for retirement.

It’s about 31 different items that you can just go through saying, “I’ve gotten that taken care of, I need to take care of that. I’ve got that one taken care of.” Go through the essential parts of a retirement checklist to know that you are ready, or that you’re in a good position.

It’s a great opportunity, as I mentioned, just get into my head, because those are the things that we’re examining to make sure that people are successful.

You may not be able to fix everything, that’s what you might hire us to do or meet with us to create a plan around or maybe investigate what our ideas are, but it will help you identify what those issues are, getting the inspection for your home, you’re going to get the inspection for your retirement, it’s 920checklists.com.

Mark:  Great opportunity for you to find out more about where you are, when it comes to your road to retirement. We’re all in different places, some have won the game, don’t even realize it, some still have some work to do. This is a great starting point, the 920checklists.com website to get the report and the checklist, you download it, there’s no cost at all, there’s no pressure.

Just because you went there doesn’t mean that team’s going to be hounding you all the time. That’s not how it works. This is for your information. 920checklist.com.

Now, we’re building that fiscal financial house, and you talked about the safety areas, the foundational pieces, so I’m thinking, “OK, if I’m lucky enough to have a pension at my job that’s in the foundation, Social Security would be in the foundation.” Is that what the foundation is about is the reliable guaranteed income sources for our retirement?

Victor:  They are, and making sure that they match, Mark, what your needs for are in retirement, how you’re going to have a match a guaranteed income for what you can expect to be guaranteed expenses for what you’re doing.

What people will find is that they don’t have enough to meet what they would like in retirement, their Social Security isn’t enough. If they have a pension these days, it’s probably a small one, unless they’re a school teacher, where they’re a cop or they work for the state, they’re really going to be in a situation where it’s nearly not going to match what they need for.

The goal is then to create additional guaranteed retirement income sources, and being able to take maybe a portion of what you save, and convert that into a way to get a paycheck that you can’t ever outlive.

The only way that you’re going to feel safe about this is knowing that you don’t have to die in a certain date for this plan to work out that you can live as long as you want and still have enough money to go grocery shopping, have enough money to travel if you want make sure that you’re meeting your property tax expenses.

With that you have filled the cup of what are going to be necessary guaranteed expenses through retirement with guaranteed income sources just in the same way.

Mark:  The average Social Security for Americans in 2020, the average was $1,500 to $2,300 a month, then the cost of living bump for 2021. Social Security recipients bump that up as a 1.3 percent cost of living adjustment. Now that 1,523 you had to get by with last year, now it’s all the way up to 1,543 a month. That’s the average Social Security.

Social Security is a big decision and I know when you’re sitting down with people and talking about Social Security, it’s not a Social Security question. It’s not about if you wait till 70, you get the most. If you take it at 62, you get the least because it’s got to be tied in with everything else. Social Security is not a question by itself. It’s how it fits in with everything else, isn’t it?

Victor:  It’d be the same thing as saying, “I’m going to go tile that room over there without looking at anything else I have to do. You focusing on one area, diving into one area. You have to see it in relationship to everything else.

Mark:  You don’t have a purple room and an orange and a lime green room.

Victor:  [laughs] Exactly.

Victor:  At least not in my house, you’re not. Not if you’re married to my wife, you don’t have a purple room. I would say that it is important to think about Social Security within the context of everything else. Think about it, not just a matter of maximizing it or minimizing it and saying do it early, do it late.

You have to take it in relationship to all of the other parts of the plan. It’s a moving part to everything else that works in there. If I’m talking about my plumber friend again, he’s not looking at one drain of how things are going to flow out, but he’s looking at everything tied together.

We’re thinking about the heating element of it, they’re not only thinking about the heat that’s being generated but the cool air or the fresh air that’s being as part of the exchange. You have to take it in consideration of the entirety of it to make the best decision.

Mark:  I think a lot of people have questions. Hey Victor, when can I retire? Do I have enough? Will my money last as long as I do? I know you remember the commercials that were on, I don’t know is it a and g or somebody, AIG? I don’t even remember who it was. They’re sitting on the bench or they’re standing in the backyard with their number under their arm, they’re looking at the big wall.

Where do I line up? What do I need to retire? Kind of the rule of thumb, what you need a million dollars to retire. There are people that could retire with 200,000 dollars, there are people that need two million or five million or whatever.

Everybody’s income needs are different. I suppose we have a number but it’s all specific to our…You could have five couples come in in one day. Every one of them needs a different income amount, I would guess.

Victor:  Not just that. Mark, you’re right. Everyone’s going to have a different income amount because they going to have different lives that they are bringing into that situation. What I find more interesting is that the answer to the question about how much I need is going to depend often on what kind of person you’re talking to, who you’re asking for that advice.

What I mean about that is that many times people who are saying, “You need five million dollars to retire, three million dollars to retire.” Part of the reason why they’re doing is that they’re brokers that are mostly invested in the market and have to take into consideration their ups and downs of volatility, downed periods of time.

They say, “Listen, in order for my calculations for you to be safe, you need a lot more money” because they have so much more at risk. Other times where you’re talking about somebody that is a little bit more balanced, is independent the way that I am, and has access to any investment that you could want and can choose the best ones for your needs, specifically, the things that you’ll need in retirement, we can arrive at a different answer.

Typically, lower answer to say what it is. [inaudible 26:13] we could say you can retire with less. The reason why we’re doing that is we’re able to draw from a menu of options that in the way that we construct things makes it easier for you to retire, makes it more likely for you to retire.

Not only, is it going to be a different number because five different couples are going to have five different income needs. It’s going to be a different number because you’re finally getting advice from people that understand how to create an income plan, not just an accumulation point. It’s different when you shift from accumulating assets for retirement to distributing them in retirement.

You need a different strategy at that point in time and I think that’s a concept that a lot of people understand is that when they make a move for having somebody help them for their retirement. Often if they’re moving away from somebody. They’re not moving away from somebody that has done them a bad job.

It’s that that’s not their expertise and they need to work with someone that focuses exclusively in the area of the thing that they need. In my case, I worked with a general contractor who worked with subcontractors that were specifically experienced with working with older homes.

What I needed wasn’t somebody that could throw up a new home quickly as part of a development, but was somebody that was used to fitting together what would needed to be great updates to a home that had been around for a 150 years and could be around for another 150 years and that was the advice that I needed.

Mark:  Victor mentioned Dylan, his young son, he’s eight. 8 and 17. Lucas is 14. His wife Jennifer’s a school psychologist. They don’t go to the same doctors. Jennifer’s not going to the same doctor as Dylan, for example. We move through the medical field as we age and it’s the same thing in the financial world.

We understand what we’re in our 20s, 30s and 40s. We want to grow our money. A stockbroker might be the perfect person to talk to. But in retirement, it’s different than that. It’s a different psychology about it because there’s different answers that are needed.

We would need our money in the foundation of our fiscal financial house to be safe, guaranteed. How much of that can we create? How much more? What we’re going to do now is we’re going to move to the walls and the roof. What are in there? If you think about it, the foundation is the strength of your home, but it’s also the strength of your retirement plan.

The teams are here to help if you just give them a call. They’re ready to do it. 856‑506‑8300. Again, you can go to the website, 920checklist.com if you’d like the retirement checklist that Victor and the teams have put together for you to find out where you sit.

Mark:  920checklist.com. You can always call, 856‑506‑8300. What goes into the walls? What goes into the roof? That’s where we’re headed next. This is Make It Last with Victor Medina of the Medina Law Group, and Palante Wealth.

Mark:  Right here with us today for Make It Last with Victor Medina, the Medina Law Group and Palante Wealth. Victor is a practicing estate planning attorney, Certified Elder Law Attorney. Medina Law Group certainly is going to help you with estate planning, those types of things, legacy planning, estate planning.

Especially with the tax changes that are coming our way, there’s a lot of moving parts there. Medina Law Group is here to help. In 2006, when Victor started that company, the clients were going, “How come he can’t help us with the rest of our retirement planning?” Well, I don’t know. If the answer was, “Yes. Could I actually do that?” Then what do I need to do?

Victor decided, “OK, I’m going to become a certified financial planner professional. A registered investment advisor. Now we can put the holistic retirement plan together for you. You need help in the estate world? We’re here. He’s got two companies ‑‑ Medina Law Group, Palante Wealth.

They’re here to help you whatever areas of your retirement planning, your legacy planning, your estate planning that are needed. You have questions, you can always give them a call, 856‑506‑8300.

Today we’re building our fiscal financial house. Make it last, right? When it comes to make it last, it starts with the foundation. We’ve built our foundation. Those are the reliable income source if you’re lucky enough to have a pension, your Social Security. Those things that are guaranteed fall into that category.

Now we’re to the point where you said, “Victor, hey, Social Security is probably not going to be enough. Your pension might not be enough.” Most of us don’t have a pension anyway.

Now we’re moving to the parts of the house that are not necessarily guaranteed but are important to the success of our retirement. Let’s start with the walls and we’ll move our way up to the roof. What goes into the walls of our fiscal financial house?

Victor:  We’re finally being able to see walls in a way that we weren’t able to see the foundation. We weren’t showing it off. We might actually be able to figure out how it is that we’ll be building drywalls and plaster, whatever else. I’ve always thought about the walls of your “fiscal house” as being the investment choices that you are making.

There are a lot of us that come into retirement with this sort of junk drawer of investments. It’s just been this accumulation of stuff. By the way, before started doing this, my wife was no different. My wife had a tax‑sheltered annuity from one employer, and a 403(b) from another employer. She never really had created a way of joining all these things together.

This is one of the reasons why I think about the walls as being the investments because they all have to connect together. They are all parts that shield you from making sure that the elements don’t come and attack.

That is a really good analogy because once you get into retirement, it is important for you to have a way of closing your investment world in. a way of closing your retirement planning world in so that you are protected from the outside. That means, basically, often changing the way that your investment approach has been.

Back in the past, when you were accumulating assets, it really never mattered what the account values were, if they were up or down, because you weren’t going to be using that.

You had enough time in what you were…The time [inaudible 32:50] for your savings that the ups and downs of the market really never affected it. Once we get into retirement, investment strategy has to change. It has to change because…First of all if we had 40 years to accumulate assets…We start working at 20, retire at 60.

If we had 40 years to accumulate assets, most of us don’t have 40 years to be spending all that assets. We need to be thinking about the idea that it needs to last for a period of time. The investment ups and downs are not necessarily going to…We can’t ride them out in the same way we could before.

What it means for a lot of people is that they have to shift a portion of their investment strategy to something that’s a little bit more conservative, a little bit more secure, that isn’t swinging for the fences. The reason for that is because they’re going to start to use this money.

They’re going to be looking to convert it out of these retirement vehicles and actually have it something available to spend. If we think about the market as this roller coaster that goes up and down…

If we’re on the way down…If the market’s going on the down and we take away some of that momentum, meaning we withdrawal some money from the market at that point in time, we typically won’t have enough momentum to get back up to the top again. The same thing would happen if we were withdrawing money from accounts that are down because the market happens to be down at that point in time.

One of the things we want to do is shift to more conservative investment and financial vehicles that we’re choosing to put our money in because it’s a smarter way to allocate your money for actual use in retirement.

Mark:  There’s basically different worlds of money. There’s the banking world, checking and savings account. Back in the day, we used to use CDs to retire on because we get laterim, but the interest rates are not there now. The banking world is one area of money. The insurance world ‑‑ annuities, life insurance ‑‑ can really be a key part of your retirement.

Of course, the investment world is a big part of our retirement. There’s three worlds of money. How much of our savings, Victor, should we put in more conservative financial vehicles? Where can we afford to take more risk? I suppose, really, the name of the show, instead of Make It Last, should be It Depends, because everybody’s situation is different.

[laughter]

Victor:  There are some guiding principles to this, Mark, that we can give listeners in terms of…I don’t want this to come off as specific advice for them. I will explain to you what some of these principles are and why we choose to use them. You’re right that there really are these three worlds of money. The banking world, the insurance world, and the stock market world.

What I think is problematic for people is that, depending on who they talk to, what they will hear is that one world is better than the other. That’s usually because they are talking to somebody that works in one of those worlds and wants to talk badly about the other world. I don’t feel that way. I feel that they all have their place as part of someone’s overall retirement planning.

There’s a place for the banking world products. There’s a place for the insurance world products. There’s a place for the stock market products. The real question is, what kind of percentage should we be using it? Do we have great choices in there? Best quality of that? Why are we making decisions about what goes where?

Let’s kind of get into this some of the numbers for, and I’ll share a little bit about our approach off of it. We think that we as a company, as retirement planners, as people who work in this world creating successful retirement plans for people, we believe that you should have about 10 percent of your money in the banking world.

The reason why we want about 10 percent is to actually that banking world is…Nothing to do with the banking world per se. It’s because that banking world is safe and it’s liquid. What we want is like one or two years worth of your spending money in there. It makes it easily available for us to use and spend and we don’t care what’s going on anywhere else. We know that we’ve got that cash available to kind of use as part of our income.

In the insurance world, where we have stuff that is safe and has the potential to grow. That’s generally how we think about the insurance world. We tend to want about 40 percent of our money there. Now, why? Why are we linked to that money?

By the way, that leaves 50 percent for the stock market world, which we’ll talk about in a second. Why? Why are we doing that? The reason why we’re doing that is that most people live on about four percent coming out of their saved money. It works as long as that four percent is never going to go down meaning you didn’t lose any value of it.

What we’re doing in keeping about 40 percent in the insurance world is we’re saying, “Look, we’ve got about 10 years worth of living money.” That’s assuming that the stock market is down for 10 years and we can’t take it from there.

That’s a pretty safe assumption because the longest period of recovery after a recession has been about six and a half years. We know that we have really covered that area by leaving about 40 percent into that account.

In the last account for the 50 percent in the stock market, that’s the stuff that’s our long‑term money. That’s our 10‑year‑plus money. A lot of people are going to have more than 10 years in retirement. In fact, we do need that to continue to grow.

The nice thing about only allocating about half of your money in that account is that you don’t have to look at that, up and down, worrying about the financial news, having headaches about what’s going on in today’s market.

None of that really matters because your measure of that is 10 years from now, is at a long‑term horizon. We’re looking at this with a lot of patience towards it growing over the long term. It’s not any of the money that we’re going to need right now. That we put in other worlds that have no risk of losing that money.

It’s either in the banking world, which is completely safe, or it’s in the insurance world, which is safe. Those are both worlds that help us create income in retirement.

Mark:  All right, so we’ve talked about the foundation of our fiscal financial house, we’ve talked about the walls of our fiscal financial house, what goes into the roof.

Victor:  It’s funny. The roof is that way of making sure that we would stand the rain and the elements that keeps our head dry, right.

I think that the best way to think about that is in diversifying your investments, because what we want to do is we want to make sure that no single event can cause financial ruin, we want to make sure that no single snowstorm or rainstorm can cause the ruin to the walls and the foundation of your house, and that for me is making sure that you’re properly diversified.

Now, when we think about proper diversification, a lot of people think about you simply the difference between stocks and bonds, or making sure that they are in a ratio of 60:40. That was here, that you take your age minus 100, and that’s how much you should have in your stocks.

I think about diversification not only within the investments themselves, like stocks or bonds, or using mutual funds, but also in products themselves. Again, that diversification is part of diversifying amongst the banking insurance in stock market world.

When we think about diversification, it’s not just owning four stocks or thinking about it within a particular sector, we really want to think about diversification over the entire market of what is available.

What does that look like in hard terms? When you think about making sure that you’ve got some in real estate, you want to make sure that you’ve got things inside of stuff internationally, stuff in emerging markets, the debt of companies that are international, as well as the debt of companies that are here in the US.

This would be fixed income, or bonds that are international or domestic. What you want to do is spread that risk around, and by doing that, you’ve created the shield over you so that no particular event can cause you to have financial ruin, and that diversification really is the closest thing to creating a solid roof over your financial home.

Mark:  Very few people, Victor, build a house on their own. My step brother tried it, he decided to be his own general contractor, and there were issues that lead to lawsuits. Most of the time we hire a contractor to make sure that it’s done the right way. How do we find the right contractor when building our fiscal financial home?

Victor:  Yeah, I did the same thing I found a great contractor that was somebody that was used to building an old homes and I had a lot of confidence in and it’s probably the same thing in retirement as well.

You want to be finding a financial professional that can help guide you in retirement because they have all of the experience that you need in the specific areas that you need it in.

If you think about retirement, and specifically working with our firm, the ability to have both the legal side and the financial side handled with somebody that understands both of those and can handle it under one roof, you’re thinking about a contractor that has the expertise in this specific area that you want.

I would look at retirement planning and specialization with that legal area as being some of those things that you’re looking at, and I would also look at the standards that they have to operate by. There’s something in the financial world called the fiduciary standard which means that you have to put your client’s best interests ahead of your own. That’s our usual, and shows independence.

Those two things I think are essential components because you want somebody that is obligated to work on your behalf, statutory, legally, ethically, but you also want somebody that is independent, meaning they can choose from everything that they want out of there, they don’t just have to use the lumber from one yard but can choose the best lumber for you in the way that they build your home.

Those elements, fiduciary, independence, retirement, focus, and even having the legal component that for me would be a great financial contractor in your life.

Mark:  Victor has two companies. We’ve talked about it every week on the program. Medina Law Group, estate planning, certified elder law attorney, a lot going on in the estate world. Palante Wealth, your holistic planning for your retirement that goes through the income needs you have.

Where’s it going to come from? The investments. What’s our strategy? Is it changing from one where we’re working to now we’re getting closer to retirement? Now we’re in retirement. Now, how are we investing? Then what about taxes? We know that taxes, more than likely are going up. How are we going to plan for that moving forward?

It’s about having the plan, the income plan, the investment plan, the tax plan, the estate plan. We need all of this, and they’re all tied together. We don’t want to miss any of these areas, and that’s why we’re talking about building the fiscal financial house today.

It’s a lot like building your home because there’s a lot of moving parts and you don’t want the foundation to not be strong. It’s got to be strong. Well, it has to be strong in your retirement as well. If you’d like to talk with Victor and the team and find out where you are, what do you need to do, make that checklist, 920checklist.com and get that report.

That checklist, you can go through it with you and your spouse, or you and your family members, or just you, because you need to understand this. Call the team. They are here to help. It’s 856‑506‑8300, no cost for this, no obligation, no pressure, 856‑506‑8300.

We’re going to go to our final segment of today’s program, and maybe you’re holding on to something to give to your kids. Well, Victor’s got old homes. My guess is that him and Jennifer probably have some things they are hanging on to. These kids want it.

That’s where we are going next. Stay with us. This is Make It Last with Victor Medina of the Medina Law Group and Palante Wealth. We’re back in one minute.

[background music]

Mark:  We have with us today for Make It Last with Victor Medina. I’m Mark Elliott. Victor of course has two companies, Medina Law Group, which is about practicing estate planning, Certified Elder Law Attorney, Victor is as well, but that’s your estate planning world. We know there are changes coming in that world. Are you ready for it? Do you have a plan?

We’ve talked about it before. If you don’t care about your family at all, then don’t do any estate planning, don’t do any legacy planning because you’re going to leave them a major headache. Most of us, I think love our family and our loved ones or our favorite charities or whatever.

We need a plan in place. Medina Law Group is here to help you with that because that is a big part of retirement planning. We don’t want to forget the last stage as how you could look at that when we’re no longer here. We don’t want to leave headaches behind. We want them to look fondly at us. The Medina Law Group, you can go to the website medinalawgroup.com to find out more.

Now, the Palante Wealth site is holistic retirement planning, your income strategies, your investment strategies, your tax‑efficient strategies. You can go to palantewealth.com to find out more there, but that is about your planning for your retirement, the income needs, investment strategies, taxes, all of that. They’re tied in with the estate planning as well.

That’s why these two companies exist. Victor started the Medina Law Group in ’06 and those clients were saying, “Why can’t you help me with the rest of our retirement?” I don’t know. It’s a good question. Why can’t I? What do I need to do?” He did it, 2014, started Palante Wealth.

We’d love for you to check out the websites. We’d love for you to give the team a call if you have questions about where you are and your road to retirement. It’s 856‑506‑8300. Again, no cost, no obligation, no pressure. 856‑506‑8300.

All right. Victor, we know you like old houses. You had an 1880s home and now, an 1870s homes. You like old stuff, I guess, huh? Fair to say.

Victor:  I like the old homes. I’m not that guy like old stuff, but I do like the old homes.

Mark:  OK, all right. Have you ever seen the Netflix hit, “Tidying Up” or maybe you’ve heard someone asked, “Does it spark joy?” The whole show is about decluttering, and that’s what we’re going to talk about for the next few minutes, because I think…All four of my grandparents are gone, my dad is gone.

I got stuff from all of them and it’s unique. My mom is 84 and she is one of those that have all the knick‑knacks around her house, and if you pick one up, there’s a grandkid’s name on it. She’s always asking me, “What do you want?” I’m like, “That’s a weird thing to talk about but, hey maybe I could use that lamp,” whatever. [laughs]

It’s interesting. There was an article about five things that your kids really don’t want, and we thought it’d be fun. Do you think you and Jennifer, because your kids are young, so you’re not at that point yet, but what about your parents or grandparents?

Did they leave you something that you’re like, “Oh, I never liked that thing anyway,” but they thought you really liked it. I don’t know. Do you have any of those stories?

Victor:  We changed that around a little bit in the order, because usually you have to have stuff left to you when somebody dies, but I actually had my parents leave me basically the contents of their home when they moved out of Connecticut and retired. It came into my home for about four or five years.

Then when we were redoing our home, which we’ve been talking about today, they went into storage for 13 months and then they went into my basement of my new home. I actually inherited this stuff way before they died.

Just last year, did we bring a dumpster over when they were over for the weekend and have a discussion and say, “I want to be clear with you, I don’t want any of this, and I just want to make sure that you don’t want any of it either, because whatever is still…we’re keeping it here, you’re taking with you when you leave today. Otherwise it should go into that dumpster.”

I have lived that in the most unusual way, which is inheriting stuff I don’t want while they’re still alive.

Mark:  Yes, so you actually could face‑to‑face, “Look, I don’t want this. What are we going to do with it?” Here’s this article. It comes from an article on forbes.com, and it’s the things your kids don’t want. There’s five different items here.

Now I think some of these are cool and probably it depends on your age, too. Number five on their list of things your kids don’t want, steamer trunks, sewing machines, film projectors. I will say this, my daughter is 20. She wanted a sewing machine, so that was perfect to pass down.

The steamer trunks are cool. It’d be a great place to store some of my golf stuff. Film projectors, I’m not sure of the need for those anymore. They’re not really valuable, you can feel free to donate those. How do you look at those? Did your parents leave you any of the steamer trunks, sewing machines, film projectors?

Victor:  Thankfully no. We might’ve had a steamer trunk in the house for a while, but my wife is actually the one that would probably take all three of those. She wants them, mostly because she wants the memories that are associated with them. I don’t think she cares about them.

I think that’s probably the same, I don’t know, if your daughter is looking for take up sewing to get cloths to it or wants to pick up a skill that knows that she should have. I know that my wife wanted her grandmother’s sewing machine, because she made her living as a seamstress, bringing over all of her siblings when she was here by herself in the States, and paying for them to come over.

There’s a link into that, but thankfully none of them are in my lives. No, I don’t want any of them.

Mark:  Yeah, my daughter likes to mess with her own clothes, so the sewing machine was so she could do her own stuff. Now number four on this Forbes’ list of things your kids don’t want, the porcelain figurine collections. Do you have anybody in your family collect those precious moments figurine?

Victor:  No, my grandmother had them. She’s passed on for at least over a dozen years now. We did get rid of those, but you’re right. Each one of them had a different grandchild’s name on them. Nobody wanted them, but she wanted them to have them.

Mark:  Because it was important to her. She liked them. I think that’s fine. Like my mom, it’s one item for the grandkids. If your grandmother had left one precious…not the whole collection, [laughs] just one, so they can look at it and remember grandma. I think that’s OK.

Now, I will tell you this. The next one on this Forbes list of things your kids don’t want, heavy antique furniture. I will tell you that I actually have some of my grandparent’s furniture, and I have this big hutch. It’s got drawers at the bottom and big doors open on the front.

That thing is…It’s terrible to try to move it because it is so heavy, but it’s really cool. They say our kids don’t want heavy antique furniture, what do you say?

Victor:  Mark, Forbes is totally wrong on this. Totally wrong. I want the heavy antique furniture, too. Not only do I want it, but my wife wants it. I’ll tell you our life, when we were living in Massachusetts, was spent going to the Cromwell antiques fair that happens four times a year.

They take over 16, 17 football fields of different vendors, and I have plenty of memories of carrying something heavy on my head for about half an acre to bring it back to our car, and I loved it.

They’re now in the house. I’ve got a camel that weighs a ton that you couldn’t get anywhere else, and then when we moved here to New Jersey, somebody had put on sale for us to pick up and we put in our trunk, a piece of furniture from France with this tiger wood that they didn’t want any longer, that they had gotten from the grandma that they paid to ship over.

We snatched that up. I don’t know what Forbes is thinking, but the heavy antique furniture give it all to me. I’ll take it if you don’t want.

Mark:  Yeah, I think it’s cool, I would be like you, I disagree with Forbes on that. Now the next one though. This is number two on the list of things your kids don’t want.

It’s the Sterling silver flatware and the crystal wine services. I will tell you, I am single. My daughter that’s paralyzed from the waist down from a car wreck in her senior year of high school three years ago at 17 ‑‑ she’s now 20 ‑‑ lives with me. It’s a lot of paper plates. [laughs] I don’t have a dishwasher.

I washed them as I move, but I still use my grandmother’s China because it’s the only dishware I have. Victor, you cannot put it in the microwave, so we have some issues there. Do you think people want the Sterling silver flatware, the China from your grandparents?

Victor:  I’ll tell you, maybe my wife got lucky having an M in her maiden last name, and an M from Medina, her married name, so that way no matter what happens the M flatware can get passed on. It’d be fine if she inherited it, and we can have it, but nobody posts formally these ways.

I don’t know the last time that we put out the nice China. We’ve been using the same set of dishes that were these casual everyday dishes for the last 20 years of our marriage. We asked for them as our wedding gift and we’ve been using the bejesus out of them for 20 years.

I don’t think we’ve ever taken the crystal stuff out for eight…Where did the two times that it comes out ‑‑ Thanksgiving and Christmas ‑‑ if you’re hosting it. Maybe Easter if you’ve got those.

Probably the only time that we ever brought out the goblets, I’m pretty sure that my kids want no part of it, and I will tell you that because we have our own…I want no part of my parents. Not at all, keep them all.

Mark:  [laughs] Sterling silver flatware, crystal wine service is number two. Number one is the fine porcelain dinnerware. I do think it’s because we do things differently than what our grandparents did.

When we would go to Thanksgiving at my grandparent’s house, everything was that old China, the gravy boats, and all those. The bowls are incredibly small from back in the day, the portions must’ve been much smaller back in the day compared to today’s ballsy, but cerealy, or what have you.

Things are moving…The Medina Law Group, when you’re talking estate planning and legacy planning and all of that, I would think that this is something you do need to talk to your clients about. “Hey, what do you think your kids actually want? What should we try to sell?” How do you go about that?

Victor:  We create inside of our plan the opportunity to have people assign what they call their special stuff list. It’s their opportunity to give their special stuff.

Sometimes they don’t want it lost. They don’t want it to be sold or thrown away. There’s some value in there, and they want to be able to pass it on. It might be a card collection, a guitar, it might be a car itself. There’s maybe something that’s in there that they want to pass on.

It definitely needs to be brought in, and here’s the reason why. Not only do parents want to make sure that they give the things to their kids that they want, but they also want to avoid kids fighting about stuff ahead of time. It is the replacement for putting the grandkids name underneath the porcelain figurine.

We’ve already been talking about some of the stuff that they’re not going to fight over, but there are things that people do fight over.

Unfortunately, you get really nice people who are otherwise balanced going 12 rounds for a coffee table now that mom and dad are gone. What we want to do is we want to make sure that we avoid that, because I think that every parent who does estate planning is looking to make life easier for the people that they leave behind.

That includes not setting their kids up to be fighting afterwards, and not setting up for there to be battles about stuff. There’s two elements to that. The first element is to create the list. That special stuff list where you’re saying, “I want this to go to that person and the other thing to go to the other person.”

It’s also in the communication that you have with your family to say, “I have created a special stuff list about what goes where off of it and just want to let you know that after I pass on it’s going to be here and this is in the binder.” All that kind of stuff, so that it’s available for them and they know where to find it.

The idea is to set the expectations about where stuff is supposed to go. That’s one of the hard paper things that we do to make sure that stuff ends up where it needs to go as well as recommending the softer skills of having the conversations, so that people aren’t fighting after you’re gone. You’re right. It definitely needs to get incorporated into the estate planning.

Weirdly ‑‑ I guess it’s weird to me as an estate‑planning attorney ‑‑ people tend to be more concerned with that than any of the tax planning or other stuff that I’m putting in my estate plan. I say, “If state taxes go up or down in the future, this is going to be great. We’re going to protect it against divorce inheritance.”

They’ll say to me, “That’s all fine, but did you take care of where my guitar collection is supposed to go?” “Yeah, yeah, we took care of that. That’s in the special stuff list. Here it is on page 42.”

People are focused on it, and I think this is an important part, Mark, to kind of bring it to the serious part of the discussion. People want to pass on their values as much as they want to pass on their money. They want to pass on their values as a way of passing on their legacy.

All the stuff that we’re talking about here is about passing on the stories of who people are, the steamer trunks, the porcelain figures, the antique furniture, the crystal wine, the porcelain dinnerware. They are all parts of what journey somebody has come through that they don’t want to be wasted, and they don’t want to be deemed not valuable.

We have to find an opportunity to be able to pass on those values as much as we pass on money or anything else that we’re doing with an estate plan. It’s an essential component to having success around the estate plan you’re creating, is knowing that you’re leaving something behind more than just what the money is.

Mark:  Do you have a plan for that? Do you have your estate legacy plans in place because there’s a lot of moving parts, and maybe you do have that special guitar collection?

Maybe your thought was, “Hey I’ve always dreamed about having this car. Your grandad sat there and redid it himself and painted it and did the interior and all that, and it was his pride and joy. I imagine one of the grandkids would love to have that.”

Have you put all that stuff down on paper? People need to know your wishes, and that’s important as well. Victor, the team, they’re here to help you put this plan in place so that you have peace of mind, and that your kids and your heirs and your beneficiaries all are on the same page, and there is no end fighting. We don’t want that.

Call Victor and the team. They’re here to help. It’s 856‑506‑8300. Again, there’s no cost for this. The team’s here to help. I just don’t know if they can until they hear your situation. 856‑506‑8300. The best time to start would be right now if you haven’t started yet. 856‑506‑8300.

Glad you’re with us today for Make it Last with Victor Medina, the Medina Law Group and Palante Wealth. We’re going to be back again next week, so have a great week. We’re back with more next week. Have a great week.

Palante Wealth Advisors are an independent financial services firm that utilizes a variety of investment and insurance products. Medina Law Group is an independent estate planning and elder law firm. Investment advisory services offered through Palante Wealth Advisors, LLC in New Jersey and Pennsylvania, registered investment advisor.

Registration does not imply a certain level of skill or training. Investing involves risk, including the potential loss of principal. Any references to protection safety or lifetime income generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims‑paying abilities of the issuing carrier.

This radio show is intended for informational purposes only. It is not intended to be used as a sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual situation.

Medina Law Group and Palante Wealth Advisors are not permitted to offer a no statement made during the show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the US government or any governmental agency.

The information and opinions contained here in provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Medina Law Group and Palante Wealth Advisors.

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