 Welcome back. It's the nine o'clock clock going to give in Monday. This is Community Matters. We have a special panel for you here today. My co-host is Jean Fidel, who is my brother and an adjunct professor at NYU Law School. Hi, Jean. Say, say, hi, smile. Hello. Hello. Nice job. And our special guest is Don Wynn, and she's a financial planner. She's with Westpac Wells partners right here in Honolulu at 677 Alamoana. Welcome to the show, Don. Hi. We're going to talk about retirement strategies today, Don. And we're going to talk about, you know, how COVID has affected what might have been your previous retirement strategy. So can you give us a handle on how COVID has changed retirement strategies in general here now in the spring of 2021? Hi, Jay. Thank you for having me here today. I'm really appreciate the opportunity to share some information. So in general, what we do is to help people plan ahead of time. It's always hard to, it's got to be proactive and not, you know, to react to things like, if you don't have any plan ahead, or before COVID happened, then obviously it's really hard to, you know, you have to go into buy borrowing or max out your credit cards to pay for things. But if you did have a plan, and if you follow advice and be a little bit conservative and prudent, then it's possible that you could, you know, if the COVID financial disaster per se. But there's not really like a magical plan that you should have. It's pretty much just the old things, the same retirement accounts. There's full 1K plan that you could participate at work if they offer it to you. You can max out your contribution, which is $19,500 for our populations that are 50 or under, or if you're over 50, then you could do a catch up of $6,500. That's also the Roth. If the company offer a Roth full 1K you could contribute into people that cannot do full 1K, they could open traditional IRA or Roth IRAs. And so all these accounts help you save money for the future. And of course, when you invest in the market, that's potential, you know, ups and downs of volatility. So generally anything about the market per se with the interest and the rising and the, you know, up and down the market, but you can increase your savings, percentage of savings is only something that we talk about all the time. When you start it out, you wind up with a lot of young professionals who started out and they always like, well, what's the percentage if I should start saving? How much should I start to save to save out of my income? I always recommend 20% savings and, you know, allocate them into different paths of money and don't put everything in. No, no, all eggs in one basket will be not everything into the full 1K, but not everything into investment or just don't leave everything in cash. So diversification of portfolio would be very helpful as well. And also have backup plans. Of course, you need to have emergency funds. So just in case you lost your job and you don't have or you're waiting for unemployment and the state has been taking a while for that, not having unemployment benefits. So it makes me have a lot of savings. What we usually recommend at least six months to a year worth of expenses and savings. So that way you don't, you know, scramble when things happen and you're not sure where to pick the money out, pay for things, expenses and whatnot. But so for retirement, it's mostly long term for a lot of people. So it depends on where you are in life. If you're near retirement, it might be a little bit hard. Right now, you have to probably be aggressive in contribution into your retirement plan. But if you're younger, then you don't have a little bit of time. But it will always advise in like diversification into an asset class, just because the market risk is really big. But we're having money just in real estate. It could be pretty illiquid cash. You can't catch up with inflation because, you know, cost of things going up. So yeah, well, I'd like to take you on a time, time travel done. Hey, let's go on a trip together. Jane, you can come along. We're all going to go on a time travel here. We're going to travel back to January 2020. Okay. And we haven't forgotten anything that happens since January 20th, January in 2020. We know it all. We know what followed. So if I was an Akamai investor, knowing everything that would follow January 2020, what would I do? What would you do if you knew about January 2020? Probably put as much money that you could as possible into savings. Like I said, the diversification, put money in your retirement account, keeps a lot of savings, a liquid money, increased your health insurance. If you, your company offer HSA health savings program, you have that in place and just have a lot of savings just because you knew this is going to happen. You may lose your jobs and you're going to need to withdraw money out of somewhere. And I wouldn't recommend to put all the money into V4, 1K or the IRA because when you take those money out and under 59 and a half, then you have to pay penalties and taxes. So have money in non-taxable accounts, maybe investment accounts or just cash in the banks or some people have whole life insurance and they take money out of that too. But I can't really say what else. You have goals held. Well, I'll tell you, if I knew what I know now and I own a restaurant in January 2020, I would sell the restaurant immediately before the rest of those guys caught on. Jean, what are your reactions to all of this? Well, a couple of things, just a funny story. You know, hindsight is always 2020 or better, but I remember just before COVID hit, there was a sweet little house about eight doors up from us in Stockbridge, Massachusetts that was for sale. There was an elderly woman who was living in it and it was really a bargain price. It had the backyard printed on the Pusatonic River. It's a lovely spot. The house needed a lot of work, but I just decided, I don't want to do this. And of course now you cannot buy anything in Berkshire County, Massachusetts. Everything that was ever for sale has sold because of all the people that fled New York and Boston and so forth. That's just one thought. But an interesting question has occurred to me. We years ago had a financial advisor who was a wonderful guy and we really had great confidence in it. One of the things that he urged us to do was set aside a certain amount of cash. I'm talking about literal cash. I'm talking about $20 bills and his nightmare scenario was that the ATM system would fail, whether through hacking or whatever. And that struck us as a little strange. But does that make some sense? It doesn't have to be a lot of money, but enough to get you through, let's say an ATM outage that might last a few weeks. Are people doing that, Dawn? I think it's hard to say. I think culturally we don't really carry cash around or save a bunch of cash in the closet. I'm Asian, actually. It's a bit different move. We have a little bit different culture. I don't have cash in my wallet all the time, but I know people that carry thousands in their wallets. They do that. Whether they just don't like using ATM cars or credit cards or whatever, they just pay things with cash. I think that that might be good to have. Just in case something does happen, or if it depends on where you live, maybe if you're in an area where there's not a lot of technology and something happened, power outage, you cannot get cash out of your ATM machines and we're only going to accept cash and nothing else. Or back in the apocalypse, you can only use cash to pay for things. But yeah, I think maybe what he meant is just to be a plan for everything, just in case, plan for the worst, which that is, I think in my opinion, that's good planning because you never plan enough. You don't know what may happen. Nobody knows the pandemic is going to happen. Nobody knows an unemployment rate will be 30, 40 percent. So it's always good to kind of think ahead and have that plan. Just one other question. In your client base, are people revising their estate plans? Are they writing new wills? Are they updating their wills? I take it this, we all know people, very sophisticated people, people with real wealth accumulation who don't have a will, which is odd, but there it is. So what are you seeing in terms of what people are actually doing on the grant there? Thank you. That's a very good question and I plan to cover that part as well. Estate planning is part of have a wealth of very well written financial strategy plan. Estate planning is part of it. A lot of people think that in order to have the estate planning done to have a will and trust you must have a lot of money, you have to be a high net worth individual. In reality, that's not really true. The estate planning attorney told me that as long as you have $150,000 in your assets, then you should have a trust because or if you have a property, you should have a trust because something happened to you and you don't have any will or trust. What is your family going to do? They don't know what you want your assets to, how you want to divide your assets and you don't want your family to suffer or have this disagreement. So definitely have and then usually when you have your trust or what it's done, it's recommended that you look at it for five years or so or when you have something happen in your family, somebody passed away or if you have a really severe medical conditions or if you add more property or acquire more assets, then that makes it to have them updated. So contact your estate planning attorney and have them look at the trust with the will for you. I always tell my clients to have the full estate planning done. Having a short will is definitely not enough. I mean, unless if you're like a 20, 30 year old don't really have anything, but if you do have property, if you have more than $150,000, you should have a whole package of estate planning documents done. It will be your attorney will help you to set up a trust. I will healthcare directive to let your family know what to do with you. If you got the bit you're in a coma, cannot make a decision, how attorney to have all that done. And you're right, like after the pandemic and there's so much death around and everywhere over the words, we'll start looking at the will and the trust and they're like, okay, maybe we should update us to keep things in place and make sure that something happens and family wouldn't, okay, what should we do now and get into that situation chaotic? Are you are you doing a lot of rewrites of financial plans? In other words, are people coming to you now and saying, you know, I really have to talk to a financial planner. I really have to take stock of this. I haven't been attentive. And now I see how volatile things are could be some people feel we're only entering volatility now, and it's going to get much more valid. Some people feel that way. So the question is, are they coming around? Are they are they talking to you? Are they saying, I don't know, I got to, I got to change my situation. I got to take stock of this. Are you giving new new plans after them? Sure. So we, I during the pandemic, I call my clients to make sure they're doing okay. Some people, it depends on what what industry you're in. If you're, I think that essential business you're you always you don't, unfortunately, you don't get to get a drop and keep earning comes but some other industry like the restaurants, you know, or hospitality, a lot of people fall into hard times. So I would call them and ask them if they were doing okay, they needed anything. So for businesses, the PPA loans and whatnot, those help them as well. But a lot of people do want it to update their financial plans, you know, have not just the will but protection planning. They start thinking about insurances, you know, what's going to happen if they pass away, and then savings wise, because the people that focus more on the long term saving, which is three times and put all the money into those retirement account. Of course, if they are younger than 59 and a half years away, now they have don't have any other savings to start pulling those money out and paying taxes and penalty, that would be a waste of money or your money that's saving for. And you have to pull it out early because you don't have anything else, you know, before you go if you go through or you go through all your cash. So that's not really the financial planning. So that's why I would always tell them like, also start when we first met, like, have your reserves, your emergency fund and your middle bucket of money, and then your retirement plan. Then you don't have to pull out those money. I have a question that maybe you can shed some light on. It has to do with cryptocurrency. There are people who have been gold bugs, you know, who want a physical asset, precious metals of various kinds or diamonds, and more, you know, in this digital era, we have the cryptocurrency phenomenon. Has that generated any interesting issues from the standpoint of the advice that you're asked for by your clients? Is it something that has implications that have not yet been explored that should be? So our company and the investment side of the company, we're not yet, we're still not regulated in the outside that we are not allowed to open any cryptocurrency account for clients. But if somebody asked me, then I would, you know, it depends on what kind of cryptocurrency and they're going to have to do their own research to make sure that it is very volatile. Going pretty crazy. But in the future, I think that is probably the future. So, you know, we are going to grow and we're probably going to evolve. We're not going to be staying the same and using paper money anymore. That's probably will be in the future, we'll use digital currency. So kind of that thing to look into it. That's assuming that you make a that's assuming that you make a note somewhere of your password. Are people, are your clients actually investing in cryptocurrency? Some do. I would say like I some some are not very sure because I have people who are aggressive in terms of investing and some are a little bit more on the conservative side and risk averse and cryptocurrency is a little bit on the risky side right now. So it's really hard for them. But, you know, like, whatever you're investing in, if you diversify and not like putting everything in one type of investment, it's always better. It's always safer to leverage your risk. But you have to have a concept at least your own personal vision of, you know, future volatility. And I wanted to ask Gene his his feelings about future volatility. And nobody wants to ever commit to themselves on predicting future volatility. But what are your thoughts about it, Gene? Well, I think that, unfortunately, there are so many, I don't want people to be jumping out the window when I say this, but there are so many things going on in the world that are quite concerning. And if, like me, you believe there is actually a connection between like things that happen in the real world and what the market does, it could be very concerning, you know, whether it's continued turmoil in our democratic institutions here, which, you know, that's another show, or foreign developments that are beyond our control, continued aggressiveness on the part of China, for example, you know, the pandemic, which, unfortunately, we have no reason to believe has run its course, particularly in the third and fourth world. There are the rise of disturbing autocracy in Russia, the persistence, I don't mean rise, let me change that, the persistence of autocracy in Russia. And it is an unfortunate fact that autocratic countries tend to be troublemakers. And we are seeing that right now. And there's no reason to believe things are going to get better, whether it's there, or Iran, or Pakistan, or other sources of turbulence. So I think there are good reasons for people to give serious thought to conservative approaches. This is not financial advice, I hasten to add. But, you know, an observer could realistically say, gee, things could really go into the tank. And, you know, what you make of that is a matter of your age, your health, your personal circumstances, your marital or family situation, and your other values. For example, what is your position on philanthropy? You know, is there, are you going to set aside anything for philanthropy? Are you going to give it all to your children? What if your children or some of them are irresponsible or not of an age or disabled? You might have a disabled child, God forbid, it could happen. And so there's an enormous number of variables. But the one thing that's not variable, I think, is that people have to give it their best thought, their best thinking, find an advisor who has the credentials and the maturity and is able to give disinterested advice. That, of course, raises yet another issue, which is, do you go for a fee for financial advice and a percentage of your assets that are under advice? Or are you more in a trading situation? And that's, you know, opinions vary on what makes most sense. Some investors are very capable or good at it and are willing to take a hit of a certain degree, if that's the way things unfold. Others may be better served by getting a professional, even though it may cost you some money out of pocket. And if your advisor is smart, the chances, what you're banking on is that your advisor, you will be better off with an advisor who charges a fee than if you or the advisor are merely trading stocks. That's the major choice that people have to confront, I think. Yeah, so I'm telling you, what are your fee structure? What is your fee structure? How do you charge your clients at Westpac Wealth Partners? So it's going to be based on the type of accounts that we help them with. Well, usually I help with setting up a sort of, I usually ask them what they want to accomplish, what people want to do. We offer full financial planning, but some people kind of come and just say, oh, well, I have this already with somebody else and I just want to focus on maybe an IRA account or some kind of an investment account or insurance or whatever, you know, portion of the plan. I usually recommend to do full financial planning, but if people are different then you can't put weight on them, but not everyone will listen to you. But it will be just based on the assets to say, if I take over a plan it will be percentage of the assets. Gene was talking about, you know, the one thing that's important is to, what was your point, get a good advisor. But you know what, the one thing that's really constant that rides throughout this is the fact that it's changing, it's dynamic. You cannot assume that what you decide today is going to continue in that way. And so I don't think we should leave people with the assumption that you go, you pivot and you're done, all finished. You've made your snapshot choice of new actions and you're done and you're finishing and you don't turn back on it. I think it's got to be a dynamic ever, ever observant, the price of liberty, eternal vigilance, right? Right. Let me say this though. I think one thing that, and I imagine Dunn will agree, but if not, please correct me. I think it's quite important that the interaction between the customer and the advisor be such that the customer is not afraid to pick up the phone and say, you know, I'm feeling a little antsy this week. And just do a reality check. And, you know, your advisor is going to be watching circumstances, conditions, carefully for you. That's one of the things that you're paying for. And it's, you're not going to get charged more if you make a phone call and you get five, 10, or 15 minutes or more of your advisor's time. And you certainly be meeting periodically with your advisor. Maybe it's by Zoom in this current environment, but that should be part of the deal. And I think that's industry practice now, industry standard. Yes, that's totally correct. We do quarterly review, semi-annual annual reviews. I mean, I call my clients all the time. And sometimes it depends on if they're like, Oh, well, nothing has changed in the past three months, but you know, then don't need to update anything. But that is client relationship important, very important to us. And that's what I think that, you know, I offer to be able to help them talk to them on the phone if they need anything or any questions. And of course, that's very healthy. That's part of the business model also, because I'll speculate that many of Dunn's firms' clients are referrals from other clients. And, you know, that's the way it is. That's the way it is in most professional services, actually. It's word of mouth. And if you have a satisfied customer, that customer is going to mention it, you know, on the golf course or at work or in a social, you know, over dinner. And that's the way firms thrive. It's a service business. And the guy who offers the best service is the one who has, who has the clients. I want to go into one other area before we close, you guys. And that is this, you know, even before COVID, we had both a disparity of wealth. Some people, they were landed and they had a lot of money in the bank and other people were homeless or had, you know, very little money in the bank. And that's kind of changed now. I mean, that I think the middle class has taken a big hit. They've lost their jobs and businesses. The people who invested in the stock market have done pretty well. It's almost, you want to tell me, Jane, $35,000 today, almost $35,000. And, you know, that's remarkable in a sense that here we are with all the challenges that you mentioned, and the market still goes up. It's hard to find a connection there. But so some people are, they've gained a lot of money, people in real estate, as you said, they gained a lot of money this year, not only in, you know, in Connecticut or Massachusetts, but, you know, but here, for sure. So, and then, you know, a lot of people lost their jobs. And despite, you know, the CARES Act and the Family Act and all that, they're still in the dumps. So I'm wondering about disposition of assets. I'm wondering about whether health insurance, whether you, if you don't have a job, how you get health insurance, I'm wondering about what you do with your retirement fund, pull it out, or leave it, sit and then not eat well. Life insurance, you cash in your life insurance, and you take out a reverse mortgage. So where are we for people who are in trouble? Where are we for people who COVID has injured financially? And what is the discussion about what they do for health insurance and what they do with the assets they could liquidate? Well, that's a huge set of questions. We have roughly 60 seconds for it. Well, I'll quickly squeeze in one fact, which is even though so-called Obamacare, the Affordable Care Act program, has been controversial in Washington, it's not controversial throughout the country. It's a very popular program. Nobody wants to repeal Obamacare any more than they want to repeal Medicare or Social Security. So at least some of this has come to rest. But there are political dimensions to some of the options as well. You mean unpredictable dimensions? Well, I would say irrational dimensions in some respects. Thank you. So, Don, what do you think? What do I do for health insurance and what do I do with the cash in my retirement fund, my life insurance, and in my house under the possibility of a reverse mortgage? So for health insurance-wise, I agree with Jean. I think that Obamacare, even though it's a lot of controversy, it does help if we need one because you can fill out the application and they'll ask you for your income and then they'll assist you with the fund that you pay for the premium. So you have some assistance there. I mean, it depends on the family of how many people, three, four, five or whatnot, where you get some help with that. Otherwise, you would have to, the state has a Medicaid program here in Hawaii that you may want to visit and I'll call, give them a call and ask them questions. They also help with low-income families. In terms of pulling funds out of your either retirement account or cash value from life insurance, whichever one that does not result in tenancy and taxes, you want to take out first. So cash value life insurance that you can borrow as the long, no taxes, but retirement help. It depends on your age that they have from tenancy if you were younger than 59 and a half. And of course, that's why it comes to planning ahead of time. I always recommend to have a lot of cash, I mean, some cash reserves just in case it happened. You know, whatever retirement account you liquidate, there might be a couple of gains in the long term. It's been there over a year for a term that you have to pay taxes and income taxes. So again, have different type of investment accounts as a class so you can liquidate in times of need like this. Gene has a question. Let's stop there for a minute. No, no, no. It's basically a footnote more than anything else. I think two programs that really everybody should build into their thinking and planning are the Social Security and how to maximize your Social Security benefits. Congress has provided that. The country, that's our social insurance program. And in my experience, the Social Security Administration staff is extremely helpful, user friendly. Maybe you have to be a little patient, but those are rights that people should exercise and exercise them with some advice. I mean, there are some decisions that have to be made. The other is for people who have served in the armed forces, the Veterans Administration, of course, administers a number of programs that can play an important role, particularly if you don't have a lot of other sources of financial support. There are things that can be taken care of. I mean, if you are eligible, Veterans Medical Care is a very valuable benefit. And there are other benefits as well, including home ownership assistance and so forth. So some of these things, those two things are so obvious that you might not think of them. But they should be if you're eligible, they definitely should be part of your long range financial planning. Okay, we have only a minute left here. Well, it's an extensible minute. Don, you want to talk more about life insurance and reverse mortgages? Should I look at pulling cash out of those? Because I'm not earning any money now. I'm digging into my savings. I've used my savings up. So what about those possibilities for me? Yeah, definitely those are some options if you don't have any other resources. Life insurance has the cash value portion that you can borrow against as a loan. But you want to talk to your advisor. I mean, before you go into all of this, you may want to talk to your advisor to say, okay, what else do I have? What are my other options? But yeah, definitely life insurance is that you can borrow the cash value as a loan. And that's an interest where you want to pay it. Otherwise, you're going to eat up and see a death benefit or it will be reduced if you were to pass away before paying back the loan. Reverse mortgages is also another option. But also, you want to discuss with your family before you do this because it will affect your children or whoever that will eventually inherit your house or property. But it wouldn't, in my opinion, do it in terms of your qualify. Of course, you have to be a certain age and other things to consider. But it's not a bad option to do as well. Yeah, social security though. I think yeah, you need to be qualified in order to start drawing out the security. And then if you do early, then you you kind of lose out and some people want it to wait. But then if you don't have anything else, then I guess like what's quite waiting. But yeah, well, I think, you know, it's an interesting time to look at what you have. Even if you've never had a financial plan before, this would be a good time to look down the road. And everyone has a different view of the future. It may be fine to light at the end of the tunnel in August. Or it may be a real disaster for the country and the world. We don't know. But it's a good time to look at your situation. Don't win, Jean Fidel, would you guys please say farewell to each other? And then we'll close the show. Thank you. Nice to be here. Nice to meet you, Don. Thank you, Jean. Nice to meet you. Thank you, Don. Thank you, Jean.