Welcome to today’s CT Buzz. I’m Rachel Lutzker. Many people think that they know everything they need to know about planning for their retirement and beyond, but in reality, it’s not uncommon to discover that you’ve made some incorrect assumptions and a lot more organization and documentation needs to happen with your financial affairs. Ben Fuchs, founder of Fuchs Financial, is here to talk about some common misconceptions that people have about retirement and your financial affairs once you pass away. Not to sound gloomy, but we love being more proactive now. In addition to being a Certified Financial Planner, Ben is also a Certified Private Wealth Advisor professional. So Ben, let’s talk about misconception number one, which is that your spouse will understand things when you pass. Not always the case. This is tough. We have a lot of examples of this, and it’s unfortunate, but recently we had a client come in with pages and pages of handwritten notes. Basically, it was almost like a “find your own adventure” scavenger hunt. We had passwords missing, we had everything going all over the place. It’s tough because you’re grieving with death, and at the same time, here you have to figure out where all the money is and understand something that you’ve never had to take care of your entire life because somebody else took care of it. Yeah, in some situations, you have one partner that kind of handles all of the financial portion and the other doesn’t, and that’s where things can be a little tricky. In our business, it’s always the person that handles all the financial stuff that goes first, leaving the person that has no idea what’s going on. We’ve had other scenarios where people who have been handling things and are still alive all of a sudden start to lose some of their faculties, and again that makes it even more difficult because now children have to try and take over those accounts without having the proper authority. Things have to get signed, but are they legal? That’s a kind of a mess. So that’s my second misconception: that your kids will have no problem taking care of things. Yeah, absolutely. Sometimes it’s even more difficult when you have people that are having early onset dementia or other issues trying to get power of attorney when not all there—it can be very tricky and very difficult. We had a scenario recently where somebody was trying to get a hold of their dad, someone to help pay for their care, but the financial advisor, even though they had the proper documentation, wouldn’t give them access to the assets. It was very difficult and stressful because you’re worried about taking care of your parents and then you’re not able to actually take care in the way that you’d like to. Misconception number three is understanding how things are taxed. Oh man, this is brutal because you have Social Security—it’s taxed differently from capital gains and dividends, and it’s taxed differently from ordinary income, money that you draw from your 401k or pensions. All those things are taxed totally differently, and the way that you can combine them can either mean that you pay very little in taxes or way more than you ever expected. The goal for us is to plan ahead, make sure that you know exactly what you’re going to be paying in taxes, and when we can position things the right way, make sure that we’re planning appropriately for that. Pensions are also a common misconception. How many people have pensions nowadays? They used to be a big deal, but now most people need to plan for their own retirement income and make sure they’re taking control of their own investments. We do that by creating a plan. With all of these misconceptions, professionals like Ben are here to help you get it right. Whether it’s preparing for your retirement or preparing for your spouse or your kids to take care of the money you work so hard to earn after you pass, you can help them later by the planning you do now. It can be done. We’re here to take the mystery out of financial planning for retirement, answer our clients’ questions, and listen to their goals. As the saying goes, you don’t know what you don’t know, and that’s where we come in to help you in your retirement and sometimes beyond. If you need guidance, reach out to Fuchs Financial for a complimentary, no-obligation consultation, or get a second opinion on your existing retirement plan from our top-notch team of experts at Fuchs Financial. Our offices are located in Middletown, West Hartford, Middlebury, and Mystic, and we do appointments by phone and Zoom, so really there’s no excuse. Just visit our website at taxesandincome.com or call 860-461-1709 to set up an appointment for your complimentary consultation. Ben, thank you so much, and thank you for joining us for today’s CT Buzz. I’m Rachel Lutzker, and we will see you next time.
