Powell and Sprung discussed how future fiscal policy might impact retirees, the Tax Cuts and Jobs Act (TCJA), the current housing market, how small business owners can plan for retirement, "finfluencers" and AI's impact on personal finance, and much more.
Inflation-protected securities and role in retirees' portfolios (02:20)
Sprung provided his thoughts on inflation-protected securities and their role in retirement portfolios. "It's important to understand what those goals and objectives are, what your time horizon is and what investment vehicles are going to work best for you," Sprung explained. "Now it's going to be important as we start entering potentially a lower interest rate environment to start putting (together) that game plan and being prepared for that lower rate environment."
How small business owners can plan for retirement (14:35)
Planning for small businesses gets more and more complicated every day. Sprung discussed the challenges of being a small business owner and how they can improve their financial security. "There are other things that business owners really should be thinking about in terms of their own retirement, setting up potentially a retirement plan," Sprung said. "Trying to think outside of the box of just what needs to be done for the day-to-day of the business is helpful and could help their retirement as well as the financial future of their employees."
Social media misinformation – Are 'Finfluencers' and AI a problem? (18:35)
'Finfluencers' are individuals who leverage social media platforms—like Instagram, TikTok, and YouTube—to share advice and information about personal finance, investing, budgeting, and other financial topics. "When you're scrolling and looking at some of these folks that are giving the advice, you have to be very careful about who you're taking the advice from," Sprung explained. "We've seen in recent years people giving out and espousing this advice, and people following it, and two weeks later, their TikTok handle is gone, evaporated, because the information they gave was wrong or hurtful to those followers. So you have to be careful."
"I've run questions by (AI) to get topics for blog articles and things like that, and I've noticed really several inaccuracies there. So I think you have to be very careful there as well," Sprung said. "Have an expert or somebody that is a professional double-check to make sure that what the AI is telling you can be done or the way to do it is actually something that would work for you."
Ask Bob (13:45)
In our special segment, Ask Bob, Bob answers the most common retirement and investing questions from our listeners.
Question:
I’m looking to buy a long-term care insurance policy. One policy has a reimbursement option and the other an indemnity option. What’s the difference between the two?
Answer:
The reimbursement option pays back the policyholder for approved long-term care expenses they have paid during the month. The care provider can either bill the insurance company directly, or the policyholder can pay upfront and then submit receipts to get reimbursed.
With the indemnity option, the insurance company sends the policyholder a fixed monthly payment, no matter how much the care actually costs. To qualify, the policyholder must receive approved long-term care services. The policyholder then uses the money to pay for the care themselves.
Which is better? Scott Olsen, co-owner of LTCShop.com, offered up the following: "Most of my clients buy reimbursement policies. Reimbursement policies are usually less expensive than indemnity policies. The only time an indemnity policy is better is if someone wants to use a non-qualified caregiver to provide their care... Like a family member or an unlicensed home health aide."
Ask Bob (22:50)
Question:
When do I need to file Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return?
Answer:
You need to file an Estate Tax Return (Form 706) if the total value of everything the deceased person owned, plus their taxable gifts and any gift tax exemptions they used, is higher than the filing limit for the year they passed away.
The filing limit for 2024 is $13,610,000. And 4,000 people had to file that form in 2023. So, only the estimated number of total and taxable estate tax returns are 7,600 and 3,900 for 2022, and 7,100 and 4,000 for 2023. And given that there were 3 million deaths in the US in 2023, your odds of having to file such a return are quite small, 750 to 1.
If you've got questions about money or retirement, email us at [email protected].
Video highlights:
00:30 - Inflation and its impact on retirees
02:20 - Inflation-protected securities and role in retirees' portfolios
05:35 - Personal income spending and implications for retirees
06:30 - Future fiscal policy adjustments and effect on retirees
07:50 - Tax Cuts and Jobs Act
09:40 - Savings rate and impact on retirees
10:25 - Importance of emergency savings fund
12:40 - Housing market and retirement
13:45 - Ask Bob - What's the difference between a reimbursement and an indemnity option?
14:35 - How small business owners can plan for retirement
18:35 - Social media misinformation - Are 'Finfluencers' and AI a problem?
22:50 - Ask Bob - When do I need to file Form 706?
Retirement planning doesn’t mean locking up your money for a rainy day and forgetting about it. Planning your future means reacting to events today. Decoding Retirement gives you the tools to navigate the years ahead, and take action now!
Yahoo Finance's Decoding Retirement is hosted by Robert Powell, and produced by Zach Faulds and Alexander Frangeskides.