WEBVTT 1 00:00:02.640 --> 00:00:03.500 Hi, everyone. 2 00:00:03.500 --> 00:00:05.348 My name is Jim Daniello. 3 00:00:05.348 --> 00:00:06.414 I'm a Wealth Management Director 4 00:00:06.414 --> 00:00:09.770 and Certified Financial Planner here at TIAA. 5 00:00:09.770 --> 00:00:11.640 I'm really excited to be joining you here 6 00:00:11.640 --> 00:00:13.650 from Facebook Live. 7 00:00:13.650 --> 00:00:16.350 It's another channel for us to be communicating 8 00:00:16.350 --> 00:00:19.660 and really making sure we're conveying relevant 9 00:00:19.660 --> 00:00:21.120 and timely information information 10 00:00:21.120 --> 00:00:25.160 during these really uncertain times of social distancing. 11 00:00:25.160 --> 00:00:28.160 We at TIAA are focused on making sure 12 00:00:28.160 --> 00:00:31.165 our clients are continuing to receive the information, 13 00:00:31.165 --> 00:00:34.500 knowledge, and practical wisdom needed 14 00:00:34.500 --> 00:00:36.830 during these unusual times. 15 00:00:36.830 --> 00:00:40.970 Today's discussions center around the emotional challenges 16 00:00:40.970 --> 00:00:43.095 many of us may be experiencing 17 00:00:43.095 --> 00:00:47.370 as we're bombarded around all of this new information, 18 00:00:47.370 --> 00:00:50.830 and the information that's incredibly fluid 19 00:00:50.830 --> 00:00:53.290 in this environment that's changing markets 20 00:00:53.290 --> 00:00:57.530 on a day-by-day basis, specifically the challenges 21 00:00:57.530 --> 00:01:00.860 of deciphering perception versus reality 22 00:01:00.860 --> 00:01:04.330 and the sense of being overwhelmed and paralyzed 23 00:01:04.330 --> 00:01:07.860 with inaction at a time when taking key planning actions 24 00:01:07.860 --> 00:01:12.200 may be really critical to your planning for the long term. 25 00:01:12.200 --> 00:01:14.597 I recently posted a podcast called 26 00:01:14.597 --> 00:01:18.086 "Take Action, But Stay the Course," 27 00:01:18.086 --> 00:01:19.670 and I'd like to continue today on that theme 28 00:01:19.670 --> 00:01:23.050 because many of you are receiving that sage, old advice 29 00:01:23.050 --> 00:01:25.000 of stay the course. 30 00:01:25.000 --> 00:01:26.860 And that's really important advice 31 00:01:26.860 --> 00:01:30.710 because staying the course is critical. 32 00:01:30.710 --> 00:01:34.020 But it's important we translate it appropriately. 33 00:01:34.020 --> 00:01:35.650 Staying the course is important 34 00:01:35.650 --> 00:01:38.990 because we don't want to make emotional decisions. 35 00:01:38.990 --> 00:01:43.300 But it also doesn't mean sit still and do nothing. 36 00:01:43.300 --> 00:01:47.360 The impact of losses weighs twice as heavily 37 00:01:47.360 --> 00:01:49.130 as the impact of gains. 38 00:01:49.130 --> 00:01:51.930 So in environments where your accounts 39 00:01:51.930 --> 00:01:54.560 may have lost significantly in value 40 00:01:54.560 --> 00:01:57.790 in a short period of time cause by risks 41 00:01:57.790 --> 00:02:00.610 that were unforeseeable and uncontrollable, 42 00:02:00.610 --> 00:02:04.910 it's really easy to surrender yourself to panic and fear 43 00:02:04.910 --> 00:02:07.620 and then act with emotions instead of logic 44 00:02:07.620 --> 00:02:09.660 and science and academics. 45 00:02:09.660 --> 00:02:12.560 Look, right now, in healthcare, 46 00:02:12.560 --> 00:02:16.110 the pandemic is definitely something called COVID-19. 47 00:02:16.110 --> 00:02:18.640 But in financial services, 48 00:02:18.640 --> 00:02:20.270 we're dealing with a different pandemic, 49 00:02:20.270 --> 00:02:21.960 and it's called fear. 50 00:02:21.960 --> 00:02:24.870 And the good news here is the pandemic of fear 51 00:02:24.870 --> 00:02:28.640 is easily controlled with education, planning, 52 00:02:28.640 --> 00:02:30.690 and logical action. 53 00:02:30.690 --> 00:02:33.340 Our advisors right now at TIAA are conducting 54 00:02:33.340 --> 00:02:36.290 over 30% more meetings and phone calls 55 00:02:36.290 --> 00:02:39.290 than prior to the onset of COVID-19. 56 00:02:39.290 --> 00:02:41.240 We're working through virtual meetings, 57 00:02:41.240 --> 00:02:42.990 coaching clients on their concerns 58 00:02:42.990 --> 00:02:46.350 and helping them make their way through certain actions, 59 00:02:46.350 --> 00:02:49.150 most importantly helping them take control 60 00:02:49.150 --> 00:02:50.990 with financial planning. 61 00:02:50.990 --> 00:02:52.907 We've always said at TIAA, 62 00:02:52.907 --> 00:02:55.590 "We lead with financial planning." 63 00:02:55.590 --> 00:02:57.550 And we're leading through this crisis 64 00:02:57.550 --> 00:02:59.690 with financial planning. 65 00:02:59.690 --> 00:03:02.060 And we're operating, more importantly, 66 00:03:02.060 --> 00:03:05.610 with a heightened level of compassion and empathy 67 00:03:05.610 --> 00:03:07.850 for how you are feeling. 68 00:03:07.850 --> 00:03:10.530 The impacts of this pandemic are widespread, 69 00:03:10.530 --> 00:03:13.210 from healthcare impacts, financial impacts, 70 00:03:13.210 --> 00:03:16.690 lifestyle impacts, and emotional impacts. 71 00:03:16.690 --> 00:03:20.730 You may feel at risk, at a loss, disconnected, alone, 72 00:03:20.730 --> 00:03:25.100 depressed, fearful, and even worse, panicked. 73 00:03:25.100 --> 00:03:27.320 All of this adds up to a feeling 74 00:03:27.320 --> 00:03:30.430 like you've completely lost control. 75 00:03:30.430 --> 00:03:32.590 We've all felt the same way, 76 00:03:32.590 --> 00:03:35.870 myself, my colleagues, my clients, everyone. 77 00:03:35.870 --> 00:03:38.700 You know, my son was diagnosed with Coronavirus 78 00:03:38.700 --> 00:03:41.440 back on March 16th, and at that time, 79 00:03:41.440 --> 00:03:44.530 I found myself personally stricken with panic, 80 00:03:44.530 --> 00:03:47.460 fear, total loss of control. 81 00:03:47.460 --> 00:03:49.980 But then, I settled down. 82 00:03:49.980 --> 00:03:52.400 And at that point, I developed a plan, 83 00:03:52.400 --> 00:03:55.970 a plan for my wife and I to really prepare 84 00:03:55.970 --> 00:03:58.200 for us to get sick and to prepare 85 00:03:58.200 --> 00:04:00.360 for the household to be taken care of, 86 00:04:00.360 --> 00:04:03.180 for food deliveries to occur, for the bills to be paid, 87 00:04:03.180 --> 00:04:05.572 for my son, who at that point had fully recovered, 88 00:04:05.572 --> 00:04:08.500 to take control of the household. 89 00:04:08.500 --> 00:04:10.920 I anticipated what would happen, 90 00:04:10.920 --> 00:04:14.390 and I protected ourselves with a plan 91 00:04:14.390 --> 00:04:18.170 for any of the anticipated risks that were ahead of us. 92 00:04:18.170 --> 00:04:22.610 Now, in that process of planning, I felt control again. 93 00:04:22.610 --> 00:04:26.990 I felt like I had planned and was ready 94 00:04:26.990 --> 00:04:30.120 for anything I could possibly prepare for. 95 00:04:30.120 --> 00:04:32.780 Now, certainly my actions didn't protect me 96 00:04:32.780 --> 00:04:37.620 from the risks ahead, but they did offset any surprises 97 00:04:37.620 --> 00:04:42.620 and any risks that I was able to anticipate in advance. 98 00:04:43.210 --> 00:04:46.120 Now, let me share what we found. 99 00:04:46.120 --> 00:04:49.210 Through thousands of meetings and phone calls 100 00:04:49.210 --> 00:04:51.870 that my team and I have held with clients 101 00:04:51.870 --> 00:04:55.940 over the past eight weeks, we've observed a difference 102 00:04:55.940 --> 00:04:59.860 between behaviors of those who have a financial plan 103 00:04:59.860 --> 00:05:03.630 or are in the process of putting a financial plan in place 104 00:05:03.630 --> 00:05:05.540 and those who have not. 105 00:05:05.540 --> 00:05:09.850 Those who went into this pandemic having fully outlined 106 00:05:09.850 --> 00:05:11.640 their specific life goals, 107 00:05:11.640 --> 00:05:14.650 collected a full inventory of their assets, 108 00:05:14.650 --> 00:05:18.700 assessed their risk tolerance for market volatility, 109 00:05:18.700 --> 00:05:21.690 and adjusted their asset allocation accordingly, 110 00:05:21.690 --> 00:05:24.863 those who have diversified their investments 111 00:05:24.863 --> 00:05:29.863 and relocated their accounts based on their purpose 112 00:05:30.760 --> 00:05:34.310 and their tax exposure, and especially those 113 00:05:34.310 --> 00:05:37.232 who have stress tested their ability 114 00:05:37.232 --> 00:05:39.260 to achieve their goals through various market scenarios 115 00:05:39.260 --> 00:05:42.450 just like the ones we've recently endured, 116 00:05:42.450 --> 00:05:45.760 those are the clients that feel more in control 117 00:05:45.760 --> 00:05:48.720 and much less stressful and much less emotional 118 00:05:48.720 --> 00:05:50.960 than the ones who have not. 119 00:05:50.960 --> 00:05:55.680 Bottom line, planning is your way to take back control. 120 00:05:55.680 --> 00:05:59.810 And more importantly, it is never too late to plan, 121 00:05:59.810 --> 00:06:02.463 not even in the middle of this storm. 122 00:06:03.851 --> 00:06:07.315 The actions that come from planning 123 00:06:07.315 --> 00:06:12.230 are your way of offsetting anticipated risks 124 00:06:12.230 --> 00:06:14.820 while taking advantage of opportunities 125 00:06:14.820 --> 00:06:17.423 that may present themselves during this crisis. 126 00:06:18.280 --> 00:06:21.450 The three steps to take back control 127 00:06:21.450 --> 00:06:24.513 during this emotional time are as follows. 128 00:06:25.840 --> 00:06:30.840 First, stay positive by focusing on your goals. 129 00:06:32.250 --> 00:06:36.270 Second, take advantage of opportunities 130 00:06:36.270 --> 00:06:38.993 presented by market volatility. 131 00:06:40.010 --> 00:06:45.010 And third, empower yourself by taking action. 132 00:06:45.160 --> 00:06:47.633 Now, I want to get into these three categories. 133 00:06:50.860 --> 00:06:53.180 And let's start with staying positive 134 00:06:53.180 --> 00:06:54.490 by focusing on your goals. 135 00:06:54.490 --> 00:06:57.167 Now, Yogi Berra once said, "If you don't know 136 00:06:57.167 --> 00:07:00.720 "where you're going, you'll end up somewhere else." 137 00:07:00.720 --> 00:07:02.370 Now, even though we think we know 138 00:07:02.370 --> 00:07:04.230 where we want to go in life, 139 00:07:04.230 --> 00:07:06.950 we really have to take the time. 140 00:07:06.950 --> 00:07:09.600 We really have to take the time to know where we want to go 141 00:07:09.600 --> 00:07:11.360 and define it and plot 142 00:07:11.360 --> 00:07:14.541 and have a well-planned course of action. 143 00:07:14.541 --> 00:07:17.960 I know that this is a time of social distancing, 144 00:07:17.960 --> 00:07:20.850 and all of the events we would normally be going to 145 00:07:20.850 --> 00:07:22.600 have probably been canceled, 146 00:07:22.600 --> 00:07:24.070 and we're not really going anywhere, 147 00:07:24.070 --> 00:07:25.810 and a lot of the space on my calendar 148 00:07:25.810 --> 00:07:28.130 has been pretty much cleared off. 149 00:07:28.130 --> 00:07:30.783 It's been giving me a lot of time back. 150 00:07:31.689 --> 00:07:34.060 And this pandemic has, at the same time, 151 00:07:34.060 --> 00:07:38.130 put things in a new perspective for so many of us. 152 00:07:38.130 --> 00:07:41.310 Perhaps our view on life has changed a bit. 153 00:07:41.310 --> 00:07:44.160 Perhaps our goals have changed. 154 00:07:44.160 --> 00:07:47.040 Now is the time to sit down and really define 155 00:07:47.040 --> 00:07:49.570 what matters in our life. 156 00:07:49.570 --> 00:07:51.190 We've got the time back. 157 00:07:51.190 --> 00:07:53.460 We've got the perspective back. 158 00:07:53.460 --> 00:07:56.600 Write down your goals, define them, prioritize them. 159 00:07:56.600 --> 00:07:59.050 Your journey to and through retirement 160 00:07:59.050 --> 00:08:01.763 has so many stops along the way. 161 00:08:02.620 --> 00:08:04.880 It's important to understand each stop, 162 00:08:04.880 --> 00:08:07.018 what it means to you, 163 00:08:07.018 --> 00:08:09.750 how important those stops really are to you. 164 00:08:09.750 --> 00:08:14.710 You need a GPS that sets the right expectations 165 00:08:14.710 --> 00:08:18.680 and gives you a number of alternatives and detours 166 00:08:18.680 --> 00:08:22.600 should traffic jams and road closures exist ahead. 167 00:08:22.600 --> 00:08:25.740 A goals-based planning process first begins 168 00:08:25.740 --> 00:08:29.770 by defining your personal objectives in life 169 00:08:29.770 --> 00:08:32.910 and then categorizing them and prioritizes them 170 00:08:32.910 --> 00:08:36.380 in the form of needs, wants, and wishes. 171 00:08:36.380 --> 00:08:38.320 Needs, wants, and wishes are essentially 172 00:08:38.320 --> 00:08:41.900 all the stops along the way in your journey. 173 00:08:41.900 --> 00:08:43.990 Now, let me define needs, wants, and wishes. 174 00:08:43.990 --> 00:08:48.630 Needs are the things that make you feel secure in life. 175 00:08:48.630 --> 00:08:51.750 They're the non-negotiables, the must-haves, 176 00:08:51.750 --> 00:08:53.930 food, shelter, clothing. 177 00:08:53.930 --> 00:08:57.500 Wishes are the things that make, I'm sorry, 178 00:08:57.500 --> 00:09:00.263 wants are the things that make you feel happy. 179 00:09:01.450 --> 00:09:05.340 And wishes are the things that make you feel complete. 180 00:09:05.340 --> 00:09:09.090 Now with goals-based planning, 181 00:09:09.090 --> 00:09:12.820 you're going to basically have to take an inventory 182 00:09:12.820 --> 00:09:14.580 of your assets. 183 00:09:14.580 --> 00:09:18.490 This, the inventory of assets, is the fuel 184 00:09:18.490 --> 00:09:20.763 that's going to get you through the journey. 185 00:09:22.230 --> 00:09:24.990 Based on your personalized risk tolerance 186 00:09:26.059 --> 00:09:29.250 and an assessment, your goals-based planning 187 00:09:29.250 --> 00:09:32.730 will provide a methodology of your asset allocation, 188 00:09:32.730 --> 00:09:36.780 your diversification, your ongoing monitoring. 189 00:09:36.780 --> 00:09:39.690 All of this will help assess confidence 190 00:09:39.690 --> 00:09:42.890 in achieving all of your needs, your wants, 191 00:09:42.890 --> 00:09:44.520 and your wishes. 192 00:09:44.520 --> 00:09:47.013 Most importantly, goals-based planning 193 00:09:47.013 --> 00:09:49.940 will stress test your ability 194 00:09:49.940 --> 00:09:52.030 through hundreds of market scenarios, 195 00:09:52.030 --> 00:09:55.700 including markets like we've seen recently. 196 00:09:55.700 --> 00:09:58.650 And perhaps this is why those who have planned 197 00:09:58.650 --> 00:10:03.390 in advance of COVID-19 are experiencing less stress today 198 00:10:03.390 --> 00:10:05.400 and more confidence. 199 00:10:05.400 --> 00:10:08.898 Now of course, there's never any guarantees of success, 200 00:10:08.898 --> 00:10:13.240 but planning certainly gives us the perspective we need 201 00:10:13.240 --> 00:10:16.970 to feel more confident and more in control. 202 00:10:16.970 --> 00:10:20.650 And additionally, it'll allow you to dynamically test 203 00:10:20.650 --> 00:10:24.285 for other unforeseen scenarios to demonstrate the impact 204 00:10:24.285 --> 00:10:27.160 of higher than expected inflation 205 00:10:27.160 --> 00:10:29.883 or unexpected healthcare events. 206 00:10:30.750 --> 00:10:33.370 So let's go to the next category 207 00:10:33.370 --> 00:10:36.090 that's going to give back control 208 00:10:36.090 --> 00:10:37.870 when you feel like you've lost control. 209 00:10:37.870 --> 00:10:41.223 And that's taking advantage of opportunities 210 00:10:41.223 --> 00:10:44.063 that are presented by market volatility. 211 00:10:46.600 --> 00:10:51.080 Now, planning through goals-based planning 212 00:10:51.080 --> 00:10:52.790 is a critical starting point, 213 00:10:52.790 --> 00:10:56.320 but the most important step that you can take right now, 214 00:10:56.320 --> 00:11:01.320 as I highlighted in a recent article on tiaa.org 215 00:11:01.610 --> 00:11:03.930 is to do an asset location review. 216 00:11:03.930 --> 00:11:08.550 Asset location is the action plan that goes in lockstep 217 00:11:08.550 --> 00:11:10.480 with your goals-based planning. 218 00:11:10.480 --> 00:11:13.220 When conducting an asset location review, 219 00:11:13.220 --> 00:11:14.830 you'll be able to take action 220 00:11:14.830 --> 00:11:16.960 on a number of key opportunities 221 00:11:16.960 --> 00:11:20.170 that market volatility is presenting to you now. 222 00:11:20.170 --> 00:11:21.550 Now, let me emphasize, 223 00:11:21.550 --> 00:11:25.710 the asset location is different from asset allocation. 224 00:11:25.710 --> 00:11:29.020 Asset allocation refers to the general mix of assets 225 00:11:29.020 --> 00:11:30.440 that you're investing in. 226 00:11:30.440 --> 00:11:33.030 Asset location is the process of collecting 227 00:11:33.030 --> 00:11:36.180 and organizing your assets all on one page 228 00:11:36.180 --> 00:11:39.900 and categorizing each count by how they will be used 229 00:11:39.900 --> 00:11:41.920 and when they will be taxed. 230 00:11:41.920 --> 00:11:44.170 Let me walk you through the three steps. 231 00:11:44.170 --> 00:11:48.850 The first step is picture a page with three columns. 232 00:11:48.850 --> 00:11:53.850 The first column is labeled taxable or tax now. 233 00:11:53.980 --> 00:11:56.200 Now, these accounts would include anything 234 00:11:56.200 --> 00:11:59.280 that is currently taxed, for example, your bank account 235 00:11:59.280 --> 00:12:01.030 or your brokerage account. 236 00:12:01.030 --> 00:12:03.670 They're currently taxed, so they land under the tax now 237 00:12:03.670 --> 00:12:06.240 or taxable account column. 238 00:12:06.240 --> 00:12:08.810 The second column is the tax later column. 239 00:12:08.810 --> 00:12:11.000 Now, these would include accounts 240 00:12:11.000 --> 00:12:13.960 such as your 403b or your 401k. 241 00:12:13.960 --> 00:12:16.480 They're currently tax-deferred, 242 00:12:16.480 --> 00:12:17.570 and they'll be taxed later 243 00:12:17.570 --> 00:12:19.860 when you take withdrawals from them. 244 00:12:19.860 --> 00:12:22.470 And the third column are accounts 245 00:12:22.470 --> 00:12:25.840 that are tax exempt or tax never. 246 00:12:25.840 --> 00:12:29.260 They would include accounts such as your Roth IRA 247 00:12:29.260 --> 00:12:31.630 or maybe a 529 plan. 248 00:12:31.630 --> 00:12:36.090 They're accounts that, if used according to IRS guidelines, 249 00:12:36.090 --> 00:12:37.443 will never be taxed. 250 00:12:38.440 --> 00:12:41.470 Now, in step two, we actually look very closely 251 00:12:41.470 --> 00:12:45.100 at these accounts, and we assign a purpose to them, 252 00:12:45.100 --> 00:12:49.540 essentially tying your goals to each account listed. 253 00:12:49.540 --> 00:12:52.450 And the third and final step is the analysis 254 00:12:52.450 --> 00:12:55.130 and the action, the mobilization side of it. 255 00:12:55.130 --> 00:12:58.050 And we question, is there a more advantageous account 256 00:12:58.050 --> 00:13:00.520 where we may be able to take advantage 257 00:13:00.520 --> 00:13:03.350 of existing new opportunities that have presented themselves 258 00:13:03.350 --> 00:13:05.670 in today's volatile markets. 259 00:13:05.670 --> 00:13:07.810 There are several opportunities that come to mind, 260 00:13:07.810 --> 00:13:10.710 and I'm gonna walk you through six of them right now. 261 00:13:10.710 --> 00:13:13.490 The first one is, for those who are retired right now 262 00:13:13.490 --> 00:13:16.710 and actively taking required minimum distributions, 263 00:13:16.710 --> 00:13:21.250 the newly-enacted CARES Act allows you to avoid taking 264 00:13:21.250 --> 00:13:24.273 your required minimum distribution in the year 2020. 265 00:13:25.120 --> 00:13:28.470 Now, you have an opportunity 266 00:13:28.470 --> 00:13:32.500 to preserve you 2020 RMD by not taking it 267 00:13:32.500 --> 00:13:36.560 and allowing it to stay within your qualified plan. 268 00:13:36.560 --> 00:13:40.430 In doing so, if your qualified plan has been impacted 269 00:13:40.430 --> 00:13:42.970 negatively by market volatility, 270 00:13:42.970 --> 00:13:46.330 you're able to give that account time to recover 271 00:13:46.330 --> 00:13:48.240 and not impact it more negatively 272 00:13:48.240 --> 00:13:50.740 by taking another withdrawal from it. 273 00:13:50.740 --> 00:13:54.340 In that sense, we're hoping it will have time to recover. 274 00:13:54.340 --> 00:13:55.793 No promises, hoping. 275 00:13:57.060 --> 00:13:59.300 Are there other accounts that we can look to 276 00:13:59.300 --> 00:14:02.330 through the asset location review to pull from, 277 00:14:02.330 --> 00:14:04.200 accounts that have not been impacted 278 00:14:04.200 --> 00:14:06.750 from a negative downturn in the market? 279 00:14:06.750 --> 00:14:09.630 For example, your emergency account. 280 00:14:09.630 --> 00:14:11.310 This is an environment that we would say 281 00:14:11.310 --> 00:14:13.000 is an asset emergency. 282 00:14:13.000 --> 00:14:14.640 The reason you have an emergency account 283 00:14:14.640 --> 00:14:16.520 is for this very event. 284 00:14:16.520 --> 00:14:18.676 Can we pull from an emergency account 285 00:14:18.676 --> 00:14:23.260 in order to get more time for other accounts to recover? 286 00:14:23.260 --> 00:14:25.790 It is the perfect time to leverage an emergency account 287 00:14:25.790 --> 00:14:27.160 for that reason. 288 00:14:27.160 --> 00:14:29.970 So, working with your tax advisor 289 00:14:29.970 --> 00:14:32.100 and your wealth management advisor, 290 00:14:32.100 --> 00:14:35.430 you'll have an opportunity to talk through these strategies. 291 00:14:35.430 --> 00:14:38.850 Another opportunity: Roth conversions. 292 00:14:38.850 --> 00:14:42.188 The markets have been trading at similar levels 293 00:14:42.188 --> 00:14:45.190 as they've been trading back in 2017. 294 00:14:45.190 --> 00:14:47.500 This is like being able to take a time machine 295 00:14:47.500 --> 00:14:51.870 back two years ago and look at converting 296 00:14:51.870 --> 00:14:56.380 those account levels back then to a Roth IRA. 297 00:14:56.380 --> 00:15:01.110 The great silver lining here is your depressed account value 298 00:15:01.110 --> 00:15:04.061 and converting it, depressed account value now, 299 00:15:04.061 --> 00:15:07.847 is going to give you a lower tax liability today. 300 00:15:07.847 --> 00:15:12.450 Also, normally you would have had to have taken an RMD 301 00:15:12.450 --> 00:15:15.610 prior to being able to convert into a Roth. 302 00:15:15.610 --> 00:15:19.460 You don't have to do that this year in 2020. 303 00:15:19.460 --> 00:15:21.370 So this is a great opportunity to again 304 00:15:21.370 --> 00:15:25.480 work with your tax consultant and your financial advisor 305 00:15:25.480 --> 00:15:28.440 to explore if this is a good opportunity for you. 306 00:15:28.440 --> 00:15:32.372 Number three, securing income. 307 00:15:32.372 --> 00:15:35.850 Through market volatility, we're recognizing 308 00:15:35.850 --> 00:15:39.450 that many of our clients are questioning the security 309 00:15:39.450 --> 00:15:41.550 of income and coming to us with questions 310 00:15:41.550 --> 00:15:43.973 regarding do I have enough secure income. 311 00:15:45.490 --> 00:15:47.970 This is an opportunity to explore options 312 00:15:47.970 --> 00:15:51.400 beyond social security and any pension income. 313 00:15:51.400 --> 00:15:54.300 This is an opportunity to look towards lifetime 314 00:15:54.300 --> 00:15:57.000 income options that are available to you 315 00:15:57.000 --> 00:16:00.020 and to really look towards your risk tolerance 316 00:16:00.020 --> 00:16:03.950 and understand how much secure income is needed. 317 00:16:03.950 --> 00:16:07.730 Your advisors have the tools to explore that with you 318 00:16:07.730 --> 00:16:09.800 and to look towards your options. 319 00:16:09.800 --> 00:16:13.023 Definitely explore and get educated on this topic. 320 00:16:14.010 --> 00:16:17.200 Fourth, tax loss harvesting. 321 00:16:17.200 --> 00:16:20.890 This is an opportunity to take advantage of losses today 322 00:16:20.890 --> 00:16:22.860 without exiting the market, 323 00:16:22.860 --> 00:16:27.240 lock in some losses for tax benefits this year. 324 00:16:27.240 --> 00:16:29.310 You don't have to leave the market in doing this. 325 00:16:29.310 --> 00:16:32.330 Tax loss harvesting is selling a security, 326 00:16:32.330 --> 00:16:34.760 locking in a loss for tax purposes, 327 00:16:34.760 --> 00:16:37.940 but still staying invested in a similar security 328 00:16:37.940 --> 00:16:41.800 that is correlated in the same way with market movements 329 00:16:41.800 --> 00:16:46.800 and being able to lock in those losses for tax purposes. 330 00:16:47.000 --> 00:16:49.230 Talk to your tax consultant 331 00:16:49.230 --> 00:16:50.730 and to your wealth management advisor 332 00:16:50.730 --> 00:16:52.577 about opportunities there. 333 00:16:52.577 --> 00:16:54.653 Fifth, rebalancing. 334 00:16:55.780 --> 00:16:58.610 Rebalancing is typically done on a scheduled basis, 335 00:16:58.610 --> 00:17:00.540 quarterly or annually. 336 00:17:00.540 --> 00:17:03.512 But the market movements we've seen recently 337 00:17:03.512 --> 00:17:07.490 have moved on a daily basis in some cases 338 00:17:07.490 --> 00:17:10.570 in the same pace that we've seen the market move 339 00:17:10.570 --> 00:17:12.693 on an annual basis in a normal market. 340 00:17:13.610 --> 00:17:16.240 This may be an opportunity to look more frequently 341 00:17:16.240 --> 00:17:19.990 towards rebalancing, come up with a different process. 342 00:17:19.990 --> 00:17:23.280 Your wealth management advisors may have a better approach 343 00:17:23.280 --> 00:17:25.710 to rebalancing to make sure you stay within 344 00:17:25.710 --> 00:17:29.670 your target allocation and don't veer off too far 345 00:17:29.670 --> 00:17:31.200 from what your risk tolerance is 346 00:17:31.200 --> 00:17:34.700 and what your portfolio is currently demonstrating. 347 00:17:34.700 --> 00:17:36.870 And then finally, interest rates. 348 00:17:36.870 --> 00:17:39.270 Interest rates are again at a historical low. 349 00:17:39.270 --> 00:17:41.710 This may be an opportunity to manage the other side 350 00:17:41.710 --> 00:17:46.130 of your balance sheet by possibly refinancing. 351 00:17:46.130 --> 00:17:49.200 Again, something to explore for the liability side 352 00:17:49.200 --> 00:17:50.700 of your balance sheet. 353 00:17:50.700 --> 00:17:53.050 It looks like we have some questions coming in. 354 00:17:54.200 --> 00:17:57.947 The first question, "How can I control my emotions 355 00:17:57.947 --> 00:17:59.320 "with regard to my money?" 356 00:17:59.320 --> 00:18:00.153 Great question. 357 00:18:01.112 --> 00:18:06.112 This is where what we call advisor alpha comes into play. 358 00:18:06.840 --> 00:18:10.870 Emotions are where the consultation 359 00:18:10.870 --> 00:18:14.370 with your wealth management advisor is most important. 360 00:18:14.370 --> 00:18:17.240 The value that the wealth management advisor 361 00:18:17.240 --> 00:18:21.030 is most demonstrated is with walking through, 362 00:18:21.030 --> 00:18:24.550 talking through the emotions that you feel. 363 00:18:24.550 --> 00:18:28.490 I would say we play more of a role of a psychologist 364 00:18:28.490 --> 00:18:30.780 these days than anything else. 365 00:18:30.780 --> 00:18:33.010 And just talking through those emotions, 366 00:18:33.010 --> 00:18:34.450 walking through the logic, 367 00:18:34.450 --> 00:18:37.160 demonstrating the logic of history, 368 00:18:37.160 --> 00:18:39.760 but really, feeling that connection 369 00:18:39.760 --> 00:18:42.440 and understanding what you're feeling 370 00:18:42.440 --> 00:18:44.283 and then helping you through that. 371 00:18:45.310 --> 00:18:49.420 You are incredibly emotionally connected to your money. 372 00:18:49.420 --> 00:18:51.800 And that can oftentimes be very dangerous 373 00:18:51.800 --> 00:18:56.660 as you look to make moves that you really should 374 00:18:56.660 --> 00:19:00.210 be seeking advice and assistance from an expert on 375 00:19:00.210 --> 00:19:03.470 instead who's not emotionally connected to your money. 376 00:19:03.470 --> 00:19:05.630 So the best way you can remove your emotions 377 00:19:05.630 --> 00:19:08.340 is to seek professional guidance. 378 00:19:08.340 --> 00:19:10.900 And again, we are playing the role of a psychologist 379 00:19:10.900 --> 00:19:13.316 these days more than anything else. 380 00:19:13.316 --> 00:19:14.887 Another question just came in. 381 00:19:14.887 --> 00:19:17.047 "I was planning on retiring next year. 382 00:19:17.047 --> 00:19:20.430 "How do I decide if that's still viable?" 383 00:19:20.430 --> 00:19:22.433 So, good news on this front. 384 00:19:23.470 --> 00:19:27.421 We do have this question come in often. 385 00:19:27.421 --> 00:19:30.070 This is where we can model this out for you. 386 00:19:30.070 --> 00:19:31.990 Meet with your wealth management advisor. 387 00:19:31.990 --> 00:19:34.270 Go through that planning process. 388 00:19:34.270 --> 00:19:37.090 Bring the inventory of assets that are available, 389 00:19:37.090 --> 00:19:40.130 that fuel that's gonna bring your through retirement. 390 00:19:40.130 --> 00:19:42.760 We can model out all of the scenarios available 391 00:19:42.760 --> 00:19:44.600 to bring you through retirement. 392 00:19:44.600 --> 00:19:47.010 We need to identify what the goals are. 393 00:19:47.010 --> 00:19:51.110 We need to understand what your income expectations are 394 00:19:51.110 --> 00:19:53.220 and what your needs, wants, and wishes are. 395 00:19:53.220 --> 00:19:54.670 We can model everything out. 396 00:19:54.670 --> 00:19:56.310 We can stress test it. 397 00:19:56.310 --> 00:19:59.100 We can even test against scenarios of concerns 398 00:19:59.100 --> 00:20:02.307 around healthcare events, inflation concerns, 399 00:20:02.307 --> 00:20:05.010 and then we can build that out 400 00:20:05.010 --> 00:20:07.320 so that you have a confidence level. 401 00:20:07.320 --> 00:20:08.900 And we can demonstrate exactly 402 00:20:08.900 --> 00:20:12.170 where your confidence level is so that we can give you 403 00:20:12.170 --> 00:20:14.280 the advice of whether it makes sense 404 00:20:14.280 --> 00:20:16.270 for you to have the ability to retire or not. 405 00:20:16.270 --> 00:20:18.100 And then we can also project out the amount 406 00:20:18.100 --> 00:20:21.460 of guaranteed income that we can provide you 407 00:20:21.460 --> 00:20:24.010 based on what options are available to you as well. 408 00:20:25.050 --> 00:20:28.970 Good news is, most people that we meet with 409 00:20:28.970 --> 00:20:31.110 don't think they can retire, 410 00:20:31.110 --> 00:20:32.960 and then after we model things out, yes, 411 00:20:32.960 --> 00:20:37.470 in some cases, we deliver some unfortunate news 412 00:20:37.470 --> 00:20:39.503 of maybe there's another year or two 413 00:20:39.503 --> 00:20:41.670 that we have to ask you to continue to work, 414 00:20:41.670 --> 00:20:44.780 but in many cases, it is really pleasant news 415 00:20:44.780 --> 00:20:46.840 that you can continue to move forward 416 00:20:46.840 --> 00:20:49.303 with what your original retirement plans were. 417 00:20:50.440 --> 00:20:52.057 And a question from Gail: 418 00:20:52.057 --> 00:20:55.720 "Does one have to sell in order to harvest taxes?" 419 00:20:55.720 --> 00:20:57.710 And the answer is yes. 420 00:20:57.710 --> 00:20:59.960 In order to do a tax lost harvesting, 421 00:20:59.960 --> 00:21:03.550 you would actually have to sell a depreciated asset. 422 00:21:03.550 --> 00:21:08.260 But you would immediately buy a similar security, 423 00:21:08.260 --> 00:21:11.941 but not the same security, just one that's similar. 424 00:21:11.941 --> 00:21:16.660 And so in a sense of if you sold a tech stock, 425 00:21:16.660 --> 00:21:19.757 you may buy an exchange traded fund 426 00:21:19.757 --> 00:21:23.890 that has similar attributes to that tech stock, for example. 427 00:21:23.890 --> 00:21:26.280 That way, you're not out of the market. 428 00:21:26.280 --> 00:21:30.180 But you'd be able to then take a loss on that tech stock, 429 00:21:30.180 --> 00:21:33.910 you'd still be in the industry and able to participate 430 00:21:33.910 --> 00:21:36.860 in any future growth that may occur there, 431 00:21:36.860 --> 00:21:39.992 future fluctuations, and you'd be able to take the loss 432 00:21:39.992 --> 00:21:42.110 on that stock in particular. 433 00:21:42.110 --> 00:21:45.297 Another question, "Should I stay the course 434 00:21:45.297 --> 00:21:46.850 "like everyone says to do?" 435 00:21:46.850 --> 00:21:51.850 Okay, like I previously said, the answer is absolutely yes. 436 00:21:51.970 --> 00:21:55.686 Stay the course, but take key actions. 437 00:21:55.686 --> 00:21:59.530 Stay the course doesn't mean sit still and do nothing. 438 00:21:59.530 --> 00:22:01.960 There are key actions that you can take advantage of 439 00:22:01.960 --> 00:22:04.270 right now working with your wealth management advisor 440 00:22:04.270 --> 00:22:06.570 on what I had just mentioned, 441 00:22:06.570 --> 00:22:08.250 the key actions that may benefit you. 442 00:22:08.250 --> 00:22:10.170 They're unique to everyone. 443 00:22:10.170 --> 00:22:11.760 Definitely meet with your advisor 444 00:22:11.760 --> 00:22:13.263 to go through what those are. 445 00:22:16.460 --> 00:22:18.660 And as a reminder, you can ask questions 446 00:22:18.660 --> 00:22:21.580 through the Facebook app. 447 00:22:21.580 --> 00:22:24.447 So, I see a number are still coming through. 448 00:22:24.447 --> 00:22:27.277 "Should I be changing my investments 449 00:22:27.277 --> 00:22:30.140 "in light of the market volatility?" 450 00:22:30.140 --> 00:22:31.380 Great question. 451 00:22:31.380 --> 00:22:33.010 Depends. 452 00:22:33.010 --> 00:22:36.760 Depends on how your original investments were structured. 453 00:22:36.760 --> 00:22:39.410 So this is gonna depend on whether they were 454 00:22:39.410 --> 00:22:43.900 properly allocated to your risk tolerance or not. 455 00:22:43.900 --> 00:22:45.820 So what you want to do is you want to go through 456 00:22:45.820 --> 00:22:47.570 a risk tolerance questionnaire, 457 00:22:47.570 --> 00:22:50.910 make sure that your investments are abiding 458 00:22:50.910 --> 00:22:52.910 by what your risk tolerance is. 459 00:22:52.910 --> 00:22:55.640 If you are out of alignment originally, 460 00:22:55.640 --> 00:22:57.860 then the answer is gonna be yes. 461 00:22:57.860 --> 00:22:59.310 But if you were perfectly in alignment 462 00:22:59.310 --> 00:23:02.377 and you were staying in alignment with a regular rebalancing 463 00:23:02.377 --> 00:23:05.980 and you're currently aligned to what your risk tolerance is, 464 00:23:05.980 --> 00:23:07.500 the answer is gonna be no. 465 00:23:07.500 --> 00:23:12.500 So, this all comes down to do you have a process in place, 466 00:23:12.500 --> 00:23:15.190 do you have a process for investment selection, 467 00:23:15.190 --> 00:23:17.280 do you have a due diligence process, 468 00:23:17.280 --> 00:23:19.870 do you have a rebalancing process, 469 00:23:19.870 --> 00:23:22.430 do you have a process if these assets 470 00:23:22.430 --> 00:23:26.240 are outside of retirement plans for managing taxes. 471 00:23:26.240 --> 00:23:29.670 If you're in retirement, do you have a process 472 00:23:29.670 --> 00:23:32.640 for managing your income strategy? 473 00:23:32.640 --> 00:23:36.450 So, it's a loaded answer for a loaded question, 474 00:23:36.450 --> 00:23:39.650 but unfortunately, it's gonna depend 475 00:23:39.650 --> 00:23:41.100 on what your situation is 476 00:23:41.100 --> 00:23:43.690 and how you originally started off. 477 00:23:43.690 --> 00:23:45.067 Question from Jennifer: 478 00:23:45.067 --> 00:23:47.947 "How long should it take to get a financial plan 479 00:23:47.947 --> 00:23:50.410 "after meeting with an advisor?" 480 00:23:50.410 --> 00:23:51.840 Our financial plans are turning around 481 00:23:51.840 --> 00:23:52.920 fairly quickly right now. 482 00:23:52.920 --> 00:23:54.973 Now, we have a team of financial planners 483 00:23:54.973 --> 00:23:59.000 that actually do a lot of due diligence behind the scenes. 484 00:23:59.000 --> 00:24:01.050 So, it's just not one individual 485 00:24:01.050 --> 00:24:02.230 running your financial plan. 486 00:24:02.230 --> 00:24:03.530 It is an entire team. 487 00:24:03.530 --> 00:24:06.420 We turn those financial plans typically around 488 00:24:06.420 --> 00:24:08.130 within a week. 489 00:24:08.130 --> 00:24:10.610 But we do that to be absolutely thorough. 490 00:24:10.610 --> 00:24:13.290 We collect a lot of information from you. 491 00:24:13.290 --> 00:24:17.370 We go through an incredibly thorough process of questioning. 492 00:24:17.370 --> 00:24:19.280 Be prepared for that. 493 00:24:19.280 --> 00:24:20.400 We want to be thorough. 494 00:24:20.400 --> 00:24:22.710 We want to know who you are. 495 00:24:22.710 --> 00:24:25.060 The questioning is deep, 496 00:24:25.060 --> 00:24:28.570 but the plan is thorough and accurate. 497 00:24:28.570 --> 00:24:33.570 So, to be safe, make for a two-week turnaround, 498 00:24:33.620 --> 00:24:37.240 but know that the accuracy and the thoroughness 499 00:24:37.240 --> 00:24:38.533 is going to be there. 500 00:24:39.450 --> 00:24:42.670 And let's jump to the 501 00:24:44.290 --> 00:24:48.210 third final point here. 502 00:24:48.210 --> 00:24:52.820 And that is to empower yourself by taking action. 503 00:24:52.820 --> 00:24:56.010 And I'm gonna get to more questions shortly after that. 504 00:24:56.010 --> 00:24:59.690 So, empowering yourself to take action. 505 00:24:59.690 --> 00:25:01.780 I just want you to think about the last time 506 00:25:01.780 --> 00:25:04.200 you did anything when you were feeling panicked. 507 00:25:04.200 --> 00:25:08.500 Sometimes just the action or the movement itself 508 00:25:08.500 --> 00:25:11.150 of taking action empowers you. 509 00:25:11.150 --> 00:25:13.470 It's really important to remember that as we plan 510 00:25:13.470 --> 00:25:18.030 through this pandemic, it's a process, not an event. 511 00:25:18.030 --> 00:25:21.700 As we plan for a recover, it's a process, not an event. 512 00:25:21.700 --> 00:25:25.760 As we plan for the stops along our way for our plan, 513 00:25:25.760 --> 00:25:29.610 it's a process, not an event. 514 00:25:29.610 --> 00:25:34.080 This is a journey, and it's always a process, not an event. 515 00:25:34.080 --> 00:25:35.650 I couldn't say it enough. 516 00:25:35.650 --> 00:25:38.500 There are plenty of actions that need to be taken now, 517 00:25:38.500 --> 00:25:41.610 but also throughout the entire experience. 518 00:25:41.610 --> 00:25:46.020 So the really first step I could encourage everyone to do 519 00:25:46.020 --> 00:25:49.550 is connect with your TIAA advisor. 520 00:25:49.550 --> 00:25:51.190 Do it as quickly as you can. 521 00:25:51.190 --> 00:25:52.830 Schedule that meeting. 522 00:25:52.830 --> 00:25:55.690 Start the planning experience 523 00:25:55.690 --> 00:25:58.563 for a more confident and controlled future. 524 00:25:59.520 --> 00:26:03.670 The second is avoid throughout this time 525 00:26:03.670 --> 00:26:07.300 any emotional decisions by staying positive, 526 00:26:07.300 --> 00:26:11.230 staying focused on your goals, using logical tools 527 00:26:11.230 --> 00:26:14.630 and coaching, that psychological coaching 528 00:26:14.630 --> 00:26:17.070 that your advisor can provide you with. 529 00:26:17.070 --> 00:26:22.070 And the third is to not use a set it and forget it approach. 530 00:26:22.387 --> 00:26:25.350 That's not what this is about. 531 00:26:25.350 --> 00:26:29.250 Your relationship with financial planning is ongoing 532 00:26:29.250 --> 00:26:33.150 and should be revisited every single year. 533 00:26:33.150 --> 00:26:36.870 Think of it as an annual check-in with your doctor. 534 00:26:36.870 --> 00:26:38.490 Your goals will change. 535 00:26:38.490 --> 00:26:40.020 Your circumstances will change. 536 00:26:40.020 --> 00:26:42.410 Your family will grow. 537 00:26:42.410 --> 00:26:43.810 We need to make sure 538 00:26:43.810 --> 00:26:46.470 that we're constantly updating that plan. 539 00:26:46.470 --> 00:26:48.970 You have a copilot that's on this journey with you, 540 00:26:48.970 --> 00:26:50.520 and it's your financial advisor. 541 00:26:50.520 --> 00:26:52.530 So, you're not in this alone, 542 00:26:52.530 --> 00:26:56.980 and we're here for you the entire way. 543 00:26:56.980 --> 00:26:58.793 Couple of more questions here. 544 00:26:59.876 --> 00:27:01.290 And I'm just gonna have to scroll here. 545 00:27:01.290 --> 00:27:02.370 It looks like 546 00:27:04.560 --> 00:27:07.930 we've got "What should I think about 547 00:27:08.832 --> 00:27:12.860 "with regard to any positives coming from the environment?" 548 00:27:12.860 --> 00:27:15.683 You know, there's a lot of mixed news coming out. 549 00:27:17.360 --> 00:27:20.880 And the information, I'll tell you this. 550 00:27:20.880 --> 00:27:24.970 The Federal Government has never been more supportive, 551 00:27:24.970 --> 00:27:27.270 especially considering the environment we're in. 552 00:27:27.270 --> 00:27:31.240 They have infused more support and more stimulus 553 00:27:31.240 --> 00:27:34.660 into the United States in the past couple of months 554 00:27:34.660 --> 00:27:38.400 than they did throughout the entire financial crisis 555 00:27:38.400 --> 00:27:41.229 of 2008 and 2009. 556 00:27:41.229 --> 00:27:44.060 So, if you look at the positives, 557 00:27:44.060 --> 00:27:46.000 the support from the Federal Government, 558 00:27:46.000 --> 00:27:50.900 the Federal Reserve, could not have been any stronger. 559 00:27:50.900 --> 00:27:52.300 The support from the community, 560 00:27:52.300 --> 00:27:55.970 the healthcare community, the efforts globally, 561 00:27:55.970 --> 00:28:00.970 coming together to find a solution on the vaccination side, 562 00:28:01.280 --> 00:28:04.170 we're looking at this from a monetary policy side, 563 00:28:04.170 --> 00:28:06.060 a fiscal policy side. 564 00:28:06.060 --> 00:28:09.858 We're seeing a lot of positives on both of those angles. 565 00:28:09.858 --> 00:28:14.858 We can't necessarily say we're seeing a strong positive yet, 566 00:28:15.660 --> 00:28:17.490 but we're monitoring on a regular basis 567 00:28:17.490 --> 00:28:19.393 on the health and safety side. 568 00:28:21.480 --> 00:28:24.090 There are positives coming out on a regular basis. 569 00:28:24.090 --> 00:28:27.733 But it's, unfortunately, we're gonna continue to monitor 570 00:28:27.733 --> 00:28:30.410 and hope for more. 571 00:28:30.410 --> 00:28:33.783 And we've got one last question coming out. 572 00:28:36.467 --> 00:28:40.187 "Is the TIAA Real Estate account a good, 573 00:28:40.187 --> 00:28:43.507 "relatively safe option for someone looking 574 00:28:43.507 --> 00:28:46.847 "to offset equity volatility?" 575 00:28:47.927 --> 00:28:51.490 I'm gonna answer this broadly. 576 00:28:51.490 --> 00:28:56.490 The answer is it always has been an incredibly great vehicle 577 00:28:57.310 --> 00:28:59.443 for diversification. 578 00:29:00.490 --> 00:29:04.760 The TIAA Real Estate account has been a uniquely 579 00:29:04.760 --> 00:29:09.018 great vehicle for finding a way to diversify 580 00:29:09.018 --> 00:29:12.183 away from fixed income, equities. 581 00:29:15.530 --> 00:29:20.530 It is not necessarily correlated with other asset classes. 582 00:29:21.650 --> 00:29:25.820 So, the answer is not yes, not no, 583 00:29:25.820 --> 00:29:28.223 but definitely a diversifier. 584 00:29:29.440 --> 00:29:34.390 And with that, I think we can say, 585 00:29:34.390 --> 00:29:36.330 I want to thank everyone for joining us 586 00:29:36.330 --> 00:29:38.860 for this Facebook Live event. 587 00:29:38.860 --> 00:29:41.450 I hope it was helpful, and we certainly look forward 588 00:29:41.450 --> 00:29:44.220 to serving you in the coming months. 589 00:29:44.220 --> 00:29:46.310 And thank you very much. 590 00:29:46.310 --> 00:29:47.710 It was wonderful being here.