High Yield Retirement Income | Retire Sooner Podcast

Wes Moss [00:00:02]: Hi, Christa Debias.

Christa DiBiase [00:00:04]: Wes Moss, headline maker.

Wes Moss [00:00:07]: It’s interesting to make some headlines.

Christa DiBiase [00:00:09]: It is. And so one headline that involved you, you’re gonna talk about today and we’ll find out if it’s truth or fiction made up to get clicks, right? Yeah. As we often see.

Wes Moss [00:00:20]: That included Jim Cramer, who I watch every day. Mm-hmm. Like twice a day.

Christa DiBiase [00:00:26]: Wow.

Wes Moss [00:00:26]: So it’s cool to be in that same headline. I was like, Jim Cramer and Wes Moss. What?

Christa DiBiase [00:00:32]: And then a listener recently questioned your stance on HSAs, and you’ve changed that now. So you’re gonna talk about that as well.

Wes Moss [00:00:38]: Yeah. Thank you to the listener.

Christa DiBiase [00:00:40]: Lots of questions.

Wes Moss [00:00:41]: And you, and you.

Christa DiBiase [00:00:42]: We’ve got lots of questions, and you can go to wesmoss.com/ask to submit your question. W-E-S-M-O-S-S.com/ask.

Wes Moss [00:00:53]: So I am not chasing dangerous stock yields. There’s an article that was published this past week and I found it a couple different places. Yahoo Finance. I think it was 247 or 24/7 Wall Street that originally published it. And the headline, when I read it, I thought, wait a minute. I didn’t, I didn’t say that, Christa. Did I say that? But here’s the headline. Cramer, as in Jim Cramer, he’s the guy on CNBC.

Wes Moss [00:01:20]: He does a morning show and then he does an evening show. I don’t know. Gives the most energy of any human on the planet.

Christa DiBiase [00:01:27]: He gets exercise.

Wes Moss [00:01:28]: He is, literally on TV 6 hours a day, 5 hours a day. Anyway, here’s the headline. Cramer says high yields are dangerous. Wes Moss says that’s where retirement income lives. And I thought, wait a minute. Uh, did I say dangerous high yields? Where is this coming from? And here’s the problem with that very, very misleading headline. And I think, I think the article itself did try to explain it more, But what’s happening in that headline, and this is really important for all of us to understand, when you hear the word yield, it is a percentage an investment is paying you. But a yield can be from a rental property.

Wes Moss [00:02:09]: What is my rental yield? It can be a dividend from a stock. Well, what is my stock yield? That’s from a dividend. If I own bonds, I’m getting a yield. It’s really coming from the interest rate of the bond. So this word yield is technically correct, but it’s encompassing any investment that is paying you money. And where interest rates are today, what I’ve talked about over the last couple of months, as rates have gone up, now we see bond yields that used to be 2%, and now for a similar bond from the United States government, a Treasury is yielding 5% or 5.25%. So pretty recently we’ve updated what I call the yield ladder. And that yield ladder is a way for you to visualize as an investor, hey, if I want to get income and not just rely on the growth of the portfolio, but I want to get some cash flow, which I think gets really important as we get into retirement or closer to retirement, you can get quote yield or income on these different rungs of the ladder.

Wes Moss [00:03:13]: And yes, if, because the S&P 500 yield today is only around 1.25%. And a utility stock might be yielding dividend yield of 3%, and an energy stock maybe 4%. If we’re going beyond that in the stock category, those stocks do get to be a little dangerous because you’re worried about the company having to cut the dividend, or the reason it has a high yield is the stock price has fallen dramatically. So when we’re going up this yield ladder in the world that we live in today, that now Government bonds are paying in the 5% range. What I was talking about this yield ladder is that I think I’m very comfortable, or am very comfortable getting a 1% and a 2% and a 3% and even a 4% yield from stocks. But above that, that’s when we switch to interest, which would be coming from bonds. So it’s a totally different animal. It’s apples are stocks, oranges are bonds, totally different way of getting income.

Wes Moss [00:04:12]: And to get a 5% yield now, or interest rate from a bond, is not stretching and is not in the danger zone at all because these are US government Treasury bonds. So to intimate that I’m leaning into these dangerously high levels is missing the point. Yes, if you’re looking for stocks that are yielding 6% and 7% and 8%, a stock itself paying that much in a dividend can flash some warning signs, some danger. But then there are other categories as you go up that yield ladder that are, let’s say they use options or covered calls, or they’re designed more for current income. And it’s actually taking away from the growth, but that’s okay because you really value getting a steady paycheck in retirement from an investment category that cannot be out on a limb either. So I just think it’s really important to explain a headline that if on the surface seems like I’m advocating for really high-yielding stocks, and that is not the case. The yield ladder starts to move into other areas, bonds and other specialty, specialty categories, so that we’re not leaning in on these ultra-high-yielding stocks. I think I just wanted to make the record straight.

Christa DiBiase [00:05:28]: I like it. All right, well, I’ve got questions for you. This one’s from Trey in Georgia. Wes has mentioned the difficulty of transitioning From saver mode into retirement mode, so I hope he can help me overcome my trepidation. I just turned 54 and I’m considering retiring early at age 56. I have $1.2 million in a high-yield savings account with most of it earning nearly 5% interest, which generates about $54,000 per year. I also have $1.6 million in my 401. My home is worth $1 million and has no mortgage.

Christa DiBiase [00:05:59]: My spouse is 11 years younger and plans to keep working, that we would like to sell the house and downsize in the next few years. My spouse has their own 401. We have no kids, no car payments, and no debt. I’m a conservative spender and my annual expenses are $25,000. I believe that—

Wes Moss [00:06:16]: Whoa, annual expenses $25,000?

Christa DiBiase [00:06:18]: Yes.

Wes Moss [00:06:19]: Whoa, okay.

Christa DiBiase [00:06:20]: I believe the $54,000 per year in annual interest income can bridge me to 62 to start Social Security. My dad died at 56 and my grandfather at 59. So my own mortality is a factor in not waiting for full Social Security. And my interest in seeing if an early retirement would be feasible in 2 years. Should I go for it and retire super early at 56?

Wes Moss [00:06:43]: Let that be a lesson to all of us coming from Trey in Georgia. And what’s the lesson? No kids. No debt.

Christa DiBiase [00:06:52]: Too late for some of us on that one.

Wes Moss [00:06:53]: Equals spending of $25K a year. God bless you, Trey. If you had a bunch of kids running around like I do, $25K just doesn’t cut it. But that is, again, that’s the choice we make. And you’ve been able to keep your expenses super low. And I’m looking at your net worth here, doing the quick math outside of your home, million dollars paid off, no mortgage. You’re at $2.8 million. And the 4% rule says that you could take how much per year? $2.8 million times 4%, even at a young age, is $112K a year, Trey.

Wes Moss [00:07:33]: And right now you’re getting that just from high yield savings. So you’re not really even having to dip into anything. So I look at it this way. You’ve got a range from $25,000, what you’re spending today, all the way up to $110K. You’re at the totally low end of that. Even if you doubled your spending need, Trey, I don’t see why there’s any reason at all why you couldn’t be in the early retirement zone. Your house is paid off. You’re hitting all the green zones.

Wes Moss [00:08:02]: You’re hitting the money green zone, housing check. Yeah. Liquid money, check. Liquid money, check. Income, check. And yeah, you’re a little young to start tapping the 401 because you’re only 54, but that’s okay. Because A, you maybe have the rule of 55 if that’s all in the employer where you’re going to leave, even if it’s not, no big deal, because you’ve got this $1.2 million in high-yield savings that can totally bridge you to age 62 to start social if you want. And notice, Christa, he’s really, leaning in on talking about his own mortality.

Wes Moss [00:08:35]: If he said, hey, I’m going to live to 100, maybe you don’t retire today. But if you’re saying maybe being just upfront about you don’t have a ton of longevity, why not try to get some of those years back now? And that’s why I’m a big advocate of retire sooner. Retire Sooner Method is about that. I think you’re on the right track.

Christa DiBiase [00:08:54]: Plus, I mean, if you can only spend $25,000 a year, mortality or not mortality, you can absolutely retire if you want to retire.

Wes Moss [00:09:02]: Well, here’s the other part of the reason he— another reason, and I’m joking about no kids and having low cost in that way, but also when your mortgage is gone, that check that was $2,500 a month or $3,500 a month, that doesn’t happen anymore. And you see spending come down dramatically when mortgages go away. And that’s another thing that he’s done at an early age. So awesome job, Trey.

Christa DiBiase [00:09:27]: Okay, this is an anonymous question. What percentage of bonds should be in TIPS for a retired couple? Background, 100% of our TIPS are individual bonds held in an IRA. 50% of our portfolio is in stock mutual funds and ETFs, and 50% individual Treasury products and CDs. Thank you for all you do.

Wes Moss [00:09:46]: Anonymous in Georgia, the short answer is that TIPS are Treasury Inflation Protected Securities. Again, they’re issued by the, the US government and they have an inflation kicker on them, which sounds awesome. Right? I’d love to have bonds, get interest, and whatever inflation goes up, so does my TIP, my Treasury Inflation Protected Security. So they sound really good, and I would say they are good, but I don’t have a particular percentage of your fixed income that needs to be in TIPS. And here’s why. You pay for that inflation protection with lower yields. If you have a regular Treasury bond that’s paying you 5%, Do you really think you’re going to get a 5% yield from a TIP plus inflation? The answer is no. So you’re getting less interest because you are expecting it to go up by inflation.

Wes Moss [00:10:39]: And I’ve owned TIPS and I’ve looked at TIPS for, for many, many years. And if you look at a chart of a, let’s say XYZ TIP ETF, and there’s lots of them, and you track that against a total bond market index, You’re going to see that on a total return basis, they’re really, really similar. On a year-to-date, a 1-year, a 3-year, even a 5-year, there’s very little difference between what you’re going to end up in total return out of a TIP versus a Treasury. And there are certain nuances to that depending on the environment in any given month or quarter, but in general, they perform very similarly. Total bond market and a total TIP type investment. With that being the case, I don’t think that there is a mandate to have a certain amount in TIPS. So I don’t think it’s a bad thing if you have some of your fixed income in TIPS, which would count as dry powder. But I also don’t think it’s needed either.

Christa DiBiase [00:11:36]: All right, this one’s from Paul in Pennsylvania. I was recently laid off after 6 years in pharmaceutical manufacturing, and I’m deciding what to do with a $64,000 Fidelity Net Benefits pension. Should I roll it into a retirement account with no tax penalty or elect 100% joint and survivor annuity that pays $363 per month for life? Admittedly, I’m no expert on annuities, so I may be oversimplifying things. I listened to your podcast on the 6% rule. The monthly payment is at 7%, and while I’m not nervous about dealing with the lump sum, The answer to your other 3 questions is yes. Background, my initial reaction was, I’m a Clarkie, annuities are bad, roll over the pension. I’ve already rolled my 401 into my IRA, but the appeal of another guaranteed monthly check has me reconsidering. We currently receive about $12,800 per month, $153,600 annually after federal withholding from 3 passive income sources.

Christa DiBiase [00:12:37]: My 26-plus-year Army pension. Thank you for your service. My 100% P&T VA disability benefits and interest on $560,000 in a 4% high-yield savings account. We always lived below our means. We have roughly $1 million in retirement accounts and another million in Fidelity brokerage accounts. Our last 3 years of expenses suggest we could easily break, essentially break even if I treat the layoff as an early retirement. Future major costs include our son’s car insurance and any college expenses not covered by my post-9/11 GI Bill. Our $3,000 monthly mortgage will be paid off in 2035.

Christa DiBiase [00:13:16]: I’m work optional now and hope to volunteer more while I look for work that brings renewed purpose. Given our situation, would you take the rollover or the annuity?

Wes Moss [00:13:27]: Paul in PA, I love that you’re looking for the next cycle of purpose and you’re, uh, and even though we don’t find it, we can create it. And I think that’s what you’re really saying. And if you’re in search of it, You end up creating that next chapter for you, life-wise, work-wise, purpose-wise, because the money part is really very much taken care of. It’s $2.5, over $2.5 million in liquid assets. Your house is going to be paid off in a few years. You’ve got 3 different income streams, $12,800 a month. That’s amazing. And it sounds to me, Like if you go down the checklist, which is, this is how we think pension versus lump sum now, which is lean towards the lump sum right out of the gate.

Wes Moss [00:14:13]: And only if 3 other questions are answered, yes, yes, yes. Should you even consider taking the monthly amount? And the first one is yes, because it’s over 6%. I did the quick math here. $363 times 12 divided by $64,000 is 6.8%. Pretty good. You win on the 6% test. So at least that’s a decent amount of return on the money that you’re, you’re handing over for the rest of your life. You don’t get it back, but you get an income stream and almost 7% is pretty good.

Wes Moss [00:14:45]: You also, it’s small enough that the PBGC would protect it if something happened to the company. Mm-hmm. So that’s another check. You have plenty of liquidity and that would lean towards saying, yes, you can take the income amount instead. And the other piece of the equation here, we, you didn’t mention longevity, but that’s the hardest question for anybody to answer. We don’t know how long we’re gonna live. The earlier question said he had early mortality in the family, so he’s balancing that.

Christa DiBiase [00:15:16]: Mm-hmm.

Wes Moss [00:15:16]: I don’t know what it is for you, but you, you do answer yes to all those questions that say, take the monthly amount. And there is also, in some respect, the calculate— just the size of this relative to the rest of your portfolio. I mean, you’re getting $12,800 a month already. Is $363 per month— is that gonna— are you gonna even feel that, or is it gonna feel like it’s kind of going into the abyss?

Christa DiBiase [00:15:48]: Mm-hmm.

Wes Moss [00:15:49]: But listen, if I’m looking at my decision tree, Everything points to take the monthly. So you pass, you say yes to all the main questions on that. So I, so you’re fine to take the monthly. If it were me, I still would lean towards rolling it over into a, into an IRA, just because it’s now yours for life. Something happens, your heirs get it immediately. So it, it, the pension these days, and this is the other thing, Christa and Paul, that I would bring up. You know, I developed the 6% test and it’s, and it’s been great for 20 years, but it was also back when rates were really low.

Christa DiBiase [00:16:29]: Mm-hmm.

Wes Moss [00:16:30]: It’s a different story today where a treasury bond yields 5.25%. So you, with taking essentially no risk or the lowest risk you can take, just putting it in a treasury gets you over 5. So does the 6.8, is it that enticing? It’s less enticing to me these days. So you can’t go wrong either way. And yes, Monthly would make total sense here, but I’d still lean towards the rollover.

Christa DiBiase [00:16:57]: All right. We’re going to take a quick break and when we come back, we’re going to talk about HSAs and we’ll get to more of your questions.

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Wes Moss [00:17:30]: That’s yourwealth.com. I’m updating the way I’m thinking about HSAs, and it’s because of Christa, and it’s because of a listener question. You gotta remember, we get just thrown so many questions every single week. It’s not as though I have the perfect or right answer to all of them. I mean,

Christa DiBiase [00:17:51]: we’re all works in progress.

Wes Moss [00:17:53]: We’re works in progress. And so here’s what I’m doing, updating how I think about HSAs and what I’ve been answering over the past year, I’d say is good, but there’s a much better way to skin the cat when it comes to HSAs. And we had a listener question a week or two ago that said, hey Wes, why aren’t you stacking HSA money and waiting for the long term. And I—

Christa DiBiase [00:18:16]: Because you mentioned you have 4 boys and that you guys end up with high medical expenses, so you usually go through it.

Wes Moss [00:18:21]: Right. And we’re new. So I’ve had in my, uh, the company that I’m with, we’ve always had a regular healthcare plan that wasn’t high deductible. And it’s only been very recently, the last 2 years or so, that we switched to a high deductible plan so that we can have HSAs. And we, you know, Because of that, the company, we give some HSA money for free to supplement these higher, uh, deductibles, et cetera, and a slightly more expensive plan. But now we also have HSAs. And I think that for a lot of years as a parent with many, many children, number one, and two, some, a couple of health issues that were recurring in the family. We were always spending lots of healthcare money right out of the gate.

Wes Moss [00:19:10]: And as soon as we got an HSA plan and the convenience around having an account and having a card that when my wife went to the pharmacy, she could use that. And it was kind of a nice upgrade from what we’d been doing before. And the money goes in pre-tax. We get some of it is matched or is, is technically a benefit from the company. It grows tax-deferred and then it comes out tax-free. So it’s win, win, win, win, win. It is the only account that does that. It’s better than a Roth.

Wes Moss [00:19:40]: I mean, I know Clark loves Roth IRAs, but he’ll admit that this is one step better. You don’t get a deduction when you put money into a Roth. It’s after-tax money. Here, you’re getting a deduction off of your income when you put money into HSA. So that’s a tax win. Grows tax-deferred. That’s a tax win. Comes out tax-free.

Wes Moss [00:19:58]: That’s a tax win. So it’s triple, it’s a triple tax-free vehicle, as long as you’re going to use it for healthcare. And the vast, vast majority of us, and when I’ve discussed this with other folks, the number one thing they say when I say you should be now stacking your HSA money is, well, I got it. I still have to use it for healthcare. What if I don’t need it for healthcare? Well, who doesn’t need it for healthcare?

Christa DiBiase [00:20:23]: Well, also you can save your receipts. You don’t have to, do your, your claims in the year that you incurred the medical costs. You can save your healthcare receipts for years to come and then go back and claw that money back if you don’t need it.

Wes Moss [00:20:36]: And a friend of mine I was talking to this about pulled up his HSA receipt account and he has receipts now for the last year and a half. And he said, every time my wife goes to the pharmacy or the doctor, she sends me the bill. I scan it. I put it in my folder. Hasn’t used it yet.

Christa DiBiase [00:20:52]: Mm-hmm.

Wes Moss [00:20:52]: But is going to use it at some point in the future. So I guess what I’m doing is I, it is still a good thing if you have a high deductible plan, you have an HSA, your money goes in pre-tax and then you can spend it. And if you can’t afford to pay out of pocket today and wait for that HSA money to compound, then I get it. And not everybody can afford to HSA stack and put your money and, and save it and wait and wait and wait to use it when you’re in your 60s. But if you can afford to pay your current medical bills as you go along year after year, then there is great power in taking your HSA money and putting it into the HSA account, investing it for the long run. Here’s an example. Age 45, you do this for 20 years if you’re single. And again, these are today’s numbers and the HSA limits will probably go up over time, but let’s say it’s $4,400 a year.

Wes Moss [00:21:48]: You contribute $88,000 over that 20-year period at a 7% rate of return, it would be worth around $180,000. And that should be able to, once you start taking and spending it, it should last you for your retirement. Family, $87,500, uh, age 45, 20 years, 7%, you’re going to end up with $350,000, $360,000. Again, needs to be spent on medical care in order for it not to be taxed or penalized. But if you can afford to do it, banking your HSA money, letting it grow, investing it in either a, uh, an equity-based account or even a balanced account to get 7, 8% a year for the long run, I think is an absolute home run strategy. which I’ve already switched to doing. We do have HSA money left right now. So that’s what I’m doing.

Wes Moss [00:22:45]: And I appreciate a listener question that kind of woke me up to saying, hey, that’s what we should be doing.

Christa DiBiase [00:22:51]: Right. I mean, we hear—

Wes Moss [00:22:52]: And Christa. And Christa.

Christa DiBiase [00:22:55]: We often, you know, we’re hearing about the lack of long-term care policies, certainly that are, they’re not written like they used to be written. And so this is one more way to help with that potentially. We’ll go to questions. Darryl in Georgia says, Wes, when selling an asset, Vanguard offers several ways to list the sale. You can do FIFO, HIFO, minimum tax, or average cost. How do I decide which one to choose?

Wes Moss [00:23:20]: Darryl, there’s—

Christa DiBiase [00:23:23]: I don’t know if I said those right, by the way. FIFO.

Wes Moss [00:23:24]: Yeah, so it’s HIFO, FIFO. I think, did he say LIFO too? I don’t know if there is. Nope.

Christa DiBiase [00:23:30]: Minimum tax or average cost.

Wes Moss [00:23:32]: Okay. So what do, what do these stand for? What is Darryl trying to do? Darryl, you’re trying to reduce your tax bill when selling in an after-tax account. And if you, your after-tax account is $100K and one stock that you bought for $50,000 is worth $90,000 and another stock that you bought for $10,000 is still worth $10,000. So you have $100,000. If you sell anything in the stock that’s $90,000, you’re going to have a big tax bill. If you sell the $10,000 that’s still worth $10,000 and there’s no gain, there should be zero tax bill. And HIFO is a way, or highest cost first out, that’s what HIFO means, is that if you have a stock that you’ve been reinvesting in and you had 100 shares originally and now you have 200 because you’ve reinvested dividends, dividends, dividends, dividends, what you end up with are these lots. So when you click on your position and look at the unrealized gain, you’ll have a gain if it’s up on the original 100, but then you’ll have a different gain for every single time and every single other lot that you were able to buy with the dividend reinvest.

Wes Moss [00:24:45]: And the closer we are, the more recent ones probably have a much higher cost basis, meaning there’s less tax. So HIFO, if you set your withdrawals or your sales to HIFO, it’s always going to take the highest cost basis, which means you have the least amount of gain.

Christa DiBiase [00:25:02]: Mm-hmm.

Wes Moss [00:25:04]: And that’s a really good option if you’re trying to manage your gains, if you have to take money out. The min tax that Vanguard, I believe, has Does that for you, but it’s even a little more complicated. The min tax option, immediately, I believe it, they sell the short-term capital losses first, then they go to zero gains, then they go to long-term capital losses, et cetera, et cetera. So it’s a little more complicated in how they do it either way. And they, they’re not going to work out exactly the same. either the minimum tax option or the HIFO option, in my opinion, is the way to do it. Now, if you do average and it’s a mutual fund, most companies, if you choose average, you’re locked into selling average.

Christa DiBiase [00:25:56]: Mm-hmm.

Wes Moss [00:25:57]: So you’ve got to watch for that. So the reality here is that I probably, the way I would look at it, they’re both good. The min tax option is probably good. I like to look at HIFO. But again, I, the way I typically am doing this is I’m looking at the different lots and choosing. But if you’re, if you have to pick a formula, you’re fine with HIFO or MINTAX.

Christa DiBiase [00:26:22]: Okay. I’m going to go to Janet from Kentucky. She says, I have $1 million in my IRA and my security advisor wants me to put 35% into an OptiBlend fixed indexed annuity for 7 years. There’s no cap and no management fee. Would it be— I would— it would be invested in the S&P. He would then put 45% in the stock market and 15% into different bonds. What do you think?

Wes Moss [00:26:45]: Run, Janet, run! Just the name of this is silly to me. The OptiBlend. What you just mentioned is all— I’ll politely say it’s all misguided. Another way to say for that, it’s totally wrong. Because you said it’s going to be invested in the S&P 500. Incorrect. And again, you’re just hearing this from your advisor, so it’s not your fault. That’s false.

Wes Moss [00:27:13]: There’s no cost. That’s false. There is no penalty. That’s false. And it’s all of those are wrong. And that’s why annuities get sold. That’s why they get a bad— that’s one of the reasons they get a bad rap because they say, They’re invested in the S&P 500. That’s not true.

Wes Moss [00:27:34]: They’re insurance contracts that are invested in some sort of general account that then looks at a formula that might have the S&P, but then it’ll cap it at certain amounts every single month. An insurance company could theoretically base the return that you get on anything. The number of leaves that fall off this tree in autumn. Okay, maybe it’s 10,000 leaves, but guess what you’re gonna get? We’re only gonna give you the first 2. And that’s how the formula works. So it almost doesn’t matter what the end— what it is. It’s, it’s totally there for the perception that it’s in the S&P 500 when it’s not, or it doesn’t need to be. It can be anything.

Wes Moss [00:28:21]: The number of cars that pass by capped at 2. The number of leaves that fall off a tree capped at 3. That’s how these work. So it’s not in the S&P 500. The reality is the cost is there’s a big commission in these.

Christa DiBiase [00:28:32]: Mm-hmm. So that’s false.

Wes Moss [00:28:34]: You’re locked in, Janet, for usually 7 years or more. And if you wanna get the money out, there’s big penalties to do so. And I think there’s just a lot of other ways to invest for growth and for income that doesn’t turn your money over to an annuity company that, by the way, if something happens to that one annuity company, where do you go there? What happens next?

Christa DiBiase [00:28:58]: Right. So I would definitely look for a fiduciary advisor if you feel like you need an advisor. This person clearly is not. Brian in North Carolina says, hi Wes, what do you think of carrying life insurance after retirement to protect loss of Social Security income? I always thought I would be finished with life insurance after retiring, but I saw a video where someone said they were carrying some term life in retirement in case one of the spouses dies.

Wes Moss [00:29:22]: Brian, this is why I think financial planning and investing is so hard, because there’s a video on everything. We’re guilty of it too.

Christa DiBiase [00:29:30]: Sure, there are TikToks, there are every— there’s so much financial advice, and I’m doing air quotes out there.

Wes Moss [00:29:37]: Brian, there’s no reason you should carry life insurance into retirement. Brian, there’s every reason you should carry life insurance into retirement. I mean, you can make a case either way. Here’s what I’ve just seen in the real world. If you are 50 and you end up with a term policy that’s 20 years, well, it takes you to 70. Now, the person retires at 65. So, you get 5 years and you’re paying this term policy and it’s annoying. And you say, I’m retired and I’m still, hey Wes, I’m still paying this.

Wes Moss [00:30:08]: Should I, should I still pay it? What’s my answer? To keep paying it. You’ve got, if you have an insurance policy that was for a term, 5 or 10, 15, 20 years, and it’s at a decent cost relative, then why not have the insurance? So I don’t recommend folks stopping insurance just because you’ve retired. Technically, you don’t need, you shouldn’t be needing life insurance because you’ve paid all the big bills. The kids are out of school. You’ve got your income streams, but you’re right. If one of you passes away, then the other spouse is left with one Social Security payment. Now it should be the higher payment, but you’re still left with a void and there is no problem having some term insurance that would fill that gap. I do not recommend getting rid of these policies just because you’re retired.

Wes Moss [00:31:00]: Do you need to buy a new one to solve for this? Typically, by the time you’re buying it, it’s maybe too expensive to do so. That’s why your other assets are meant to now be in place to fulfill your lifestyle. And that’s why you shouldn’t need to have insurance, but I wouldn’t be getting rid of it prematurely.

Christa DiBiase [00:31:17]: Okay.

Wes Moss [00:31:18]: Chris, I love having you here. I love these questions. So thank you as always for being in studio. You can find me throughout the week. We’re at yourwealth.com. That’s Y-O-U-R, yourwealth.com. Have a wonderful rest of your day.

Mallory Boggs (Disclaimer) [00:31:34]: Hey, y’all. This is Mallory with the Retire Sooner team. Please be sure to rate and subscribe to this podcast and share it with a friend. If you have any questions, you can find us at wesmoss.com. That’s W-E-S-M-O-S-S.com. You can also follow us on Instagram and YouTube. You’ll find us under the handle Retire Sooner Podcast. And now for our show’s disclosure.