Financial Decisions Through the Ages & Stages

Our 2 Cents – Episode #138

Financial Decisions Through the Ages & Stages

During this week’s episode of Our 2 Cents, we dive into the complex world of financial decision-making during some of life’s most pivotal moments. From exciting times to challenging ones, we share tips to help you make informed decisions during these different ages and stages of life.

1. Financial Decisions Through the Ages & Stages:
   • Marriage and Remarriage
     • Combining finances or keeping them separate
     • New living arrangements and setting up new budgets
   • Divorce
     • Turning a joint plan into new separate ones
     • Dividing assets and liabilities
   • Job Changes
     • Plan changes due to unexpected layoffs and forced early retirement
     • Assessing new job offers or increased income or benefits
   • Birth or Adoption
     • Budget changes for new expenses
     • Needs for life insurance, wills, trusts, guardianship plans
   • Winning the Lottery
     • Sudden windfalls of money require new ways to manage assets
     • Where to put an influx of cash
   • Retirement
     • The time you’ve been planning for all this time is finally here
     • How to ensure you’re putting that plan to work efficiently
   • Severe Medical Issue or Disability
     • What an unexpected diagnosis can do to a plan
     • Important updates to documents and policies
   • Death of a Spouse
     • Reevaluating plans, goals and budgets
     • What to do if the one who passes was the one who handled the finances

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Podcast Transcript

Announcer: You are listening to Our Two Cents with the team from SGL Financial, building wealth for life. Steve Lewit is the President of SGL Financial, and Gabriel Lewit is the CEO. They’re here to discuss all the latest in financial news, trends, strategies and more.

Gabriel Lewit: Good morning. Good morning. Welcome to Our Two Cents. Welcome back, I should say. This is Gabriel and Steve, here live on the sunny Wednesday.

Steve Lewit: Magnificent. Magnificent Wednesday.

Gabriel Lewit: Magnificently sunny. Yes.

Steve Lewit: Yeah.

Gabriel Lewit: Which it feels like summer is about here. I was out on the yard this weekend with the sprinklers on. My kids were running through them like crazy kids.

Steve Lewit: Like kids do.

Gabriel Lewit: Like squirrels.

Steve Lewit: Like little squirrels.

Gabriel Lewit: Jumping through the sprinklers. So that was kind of fun to watch. I got videos of it too. I’ll spare them and I won’t post them anywhere.

Steve Lewit: I’m sending-

Gabriel Lewit: But I’m enjoying the warm weather. Hopefully you guys are out there enjoying them as well. The nice warm weather days that we’ve got, and with many more ahead here for the summer.

Steve Lewit: You bet. You bet.

Gabriel Lewit: Yes.

Steve Lewit: Well, perfect time to buy a new car.

Gabriel Lewit: Yes, you did. Yeah, you did buy a new car.

Steve Lewit: Folks, I bought a new car after six months of debating.

Gabriel Lewit: Lengthy deliberation, and he owes me a hundred dollars. He does.

Steve Lewit: No, I don’t. I don’t owe you.

Gabriel Lewit: I bet him that he wouldn’t buy one of the cars he said he was going to buy early on in his deciding process. He said, “Gabe, I’m going to definitively buy this car. This is the one.” I said, “Let’s make a hundred dollar bet.”

And folks, he’s trying to reneg on the bet right now.

Steve Lewit: No, no, no. Here’s the story. You be judge and jury. Hey, do you see that? What I did? Here’s the story. So-

Gabriel Lewit: So folks, Steve’s in a very special mood today, rhyming.

Steve Lewit: Rhyming.

Gabriel Lewit: All sorts of phrases.

Steve Lewit: So, here’s the story. Wait a second, wait a second. Here’s the story. We made a bet, I was going to buy a certain car. But then that car is not available. And that’s like, if I can’t buy the car, I can’t buy the car. I don’t owe you a hundred dollars. Folks, we’re going to vote on this. Ok, Katie, whose side are you on?

Gabriel Lewit: Well, let me put it this way. You need to hear the other side of the story. There are multiple models of the car, right? The SS plus whatever, multiple levels.

Steve Lewit: Not the 2024.

Gabriel Lewit: And when I made the bet, he had mentioned just the car. I’m going to buy this car. And I said, “No, you’re not.” And he did not buy that car. I think it’s very black and white. A hundred bucks right here on my desk next week.

Steve Lewit: I’ll think about it. Well, I don’t think I’m reneging on a bet that I can’t fulfill.

Gabriel Lewit: You’re backing out of the bet.

Steve Lewit: Folks, do not go out and buy a car now because the prices are ridiculous. I paid an obscene price for this car, but that’s my one downfall as a financial advisor.

Gabriel Lewit: I was just going to say, you sound like not giving good advice here.

Steve Lewit: I’m not giving good advice. Do not follow my car buying advice. I give better advice than I follow myself. I just like new cars.

Gabriel Lewit: Mm-hmm. All right. Well, let’s move on with our show, Mr. Lewit.

Steve Lewit: This is very important.

Gabriel Lewit: Oh, all righty. Well, we’ve got a different deeper dive topic for you here today. We want to talk a lot about various life changes that you could experience and how they should be approached from a financial planning or investment perspective.

Steve Lewit: Well, buying a car is a life change. It’s equivalent to marriage.

Gabriel Lewit: Well, let’s see. Since you overpaid for the car.

Steve Lewit: I did.

Gabriel Lewit: Then you need to-

Steve Lewit: I did.

Gabriel Lewit: … cut other areas of your budget accordingly to pay for the increases to the car. There we go. There we go. Number one.

Steve Lewit: Okay.

Gabriel Lewit: But yeah. That’s what we’re going to talk about today and we’ll see how much time we’ve got left after that. We’ve got a couple of other segment ideas in case we’ve got enough time, but if not, this may carry us through our show here for you today.

Steve Lewit: Well, there are so many life changes that happen that we just kind of work our way through them, but we don’t identify them.

Gabriel Lewit: Yes. And now, folks, we have a wide range of listeners on the show of all ages and demographics and life stages. Ages and stages, there we go. I’m rhyming just like you now.

Steve Lewit: Mm-hmm.

Gabriel Lewit: So, some of these may or may not apply to you, but we don’t know exactly who’s out there listening. So we’re going to just cover a wide range here today, starting with marriage.

Steve Lewit: Well, this is really interesting because I have two sets of clients right now, who are older, they’re in their 60s. And they’re in new relationships, and they’re trying to figure out is it better to get married or stay single, or get married and file separately or jointly? How do we handle the money, my money, her money? What is the best way to approach it? And it’s complicated.

Gabriel Lewit: Well, it is. And there are many options, but let’s just assume for a second that the typical route is you get married and you file jointly on your taxes.

Steve Lewit: Yep.

Gabriel Lewit: For most people that’ll save you some money. But questions abound like, should we combine our finances? Should we have joint bank accounts? Do we have a new shared budget? Are we previously not living together, now we are living together? Or maybe you were living together before but hadn’t combined finances. Now, you’re married. Should you combine finances?

Steve Lewit: Does one person sell their apartment or house, and live in the other person’s house? Or they both sell and buy a new house?

Gabriel Lewit: Yeah. And then there’s, although not super common necessarily with many folks, is a prenup needed within the overall financial planner picture? So these are some of the questions that tend to pop up here.

Dad, what do you think? Married couples, do they typically combine their finances together from your experience? What would be the pros and cons of keeping finances together or separate? And it’s interesting because I do have many clients of all ages that fall under both camps.

Steve Lewit: Mm-hmm. Yeah. So it kind of changes over time, but in the beginning, most of my remarried couples keep their finances separate. And they establish a budget. He pays for this and she pays for that. And they do have a common account. But the finances, the money is separate.

And in the planning, they’re always asking me the same question. And I’m always concerned about the same question is, what if it doesn’t work out? How do they work out the money if it doesn’t work out? Because I’m more, it’s great you get married. And a year goes by, two years go by and then it’s not working out. We’ve all, not you, Gabriel, but I’ve been down that road and so have many other people.

So now, we’re going to split up. How does that money get handled? And that all has to be predetermined. And that’s why trust become important. Different documents become important. Maybe a prenup becomes important. Because getting together is easy, separating is always, always difficult.

Gabriel Lewit: So, I felt like that was a very political answer to the question, which is, should families that get married have combined finances or separate finances-

Steve Lewit: Well-

Gabriel Lewit: … in your opinion?

Steve Lewit: … it depends. In my opinion, if I’m getting married, what’s mine is hers and hers is mine. I want to smush everything together. Because to me, marriage is all or nothing. So, I don’t like the idea for me of keeping things separate.

But if I were remarried and a woman said, “I want to keep it separate,” I understand that. I understand that. But personally, I think, go. If you’re going to get married, go all in, man.

Gabriel Lewit: Well, yeah. And there’s definitely two versions of getting married. There’s married and remarried. I know you said remarried here.

Steve Lewit: Remarried. Yeah.

Gabriel Lewit: So depending if it’s your very first time getting married, maybe hope springs eternal and you assume you’re going to be together forever, which many people are of course. And then, there are some that are getting remarried that have a little bit more, what’s the word, pragmatic view of the situation where, “Hey, maybe this won’t work out.”

Steve Lewit: I have a couple in California right now, they’re going through a prenup getting married and they need to.

Gabriel Lewit: Yep.

Steve Lewit: And it’s the right thing to do for them.

Gabriel Lewit: Well, the challenge is, I do have a couple clients that really do keep their money very, very separate. And it sometimes does create, well, let me clarify. Is it totally separate, as in they don’t even want to share it? Or is it separate, as in just they keep their money in separate accounts? Very big difference between the two. But I was referencing a couple where they literally didn’t want to talk jointly to me together.

Steve Lewit: That’s different. Yep.

Gabriel Lewit: That was very, very separate. Which, of course, is kind of a red flag.

Steve Lewit: Yeah. And that’s hard for you too, because they’re living together.

Gabriel Lewit: Married, living together.

Steve Lewit: And you can’t tell the other one what the other one is doing.

Gabriel Lewit: Not telling each other what they have for their own money. It seemed very odd to me. So that’s kind of unusual.

But by and large, folks, if you get married, you’re going to have to work through those conversations of who’s going to be kind of the point person. Typically, there’s one point person that manages the budget, maybe pays the bills. Maybe individually do it. You pay one bill, she pays the other, vice versa.

So those are some of the conversations. And as you jokingly, or not so jokingly say sometimes, Steve, we often act as financial therapists.

Steve Lewit: We do.

Gabriel Lewit: Right? For our clients, so we can give you some guidance on here if you’re falling into the married or remarried camp.

Steve Lewit: Yes. Especially, Gabriel, where it really gets complicated if it’s a remarriage and each of the couple have their own children. So then, the problem is if one predeceases the other, does the money go to the spouse or does the money go to the children and things like that.

Gabriel Lewit: Yes. Yep.

Steve Lewit: Very complicated.

Gabriel Lewit: Yeah. So those are some of the first two life changes here, or life events that we wanted to talk about here, marriage and remarriage.

Another one, of course, the natural progression here, if you think of this as, well, hopefully not for many, but divorce, right?

Steve Lewit: Well, for many. Well, 50% of people.

Gabriel Lewit: Yeah. So after marriage, for some comes divorce. So that of course presents its own unique financial challenges depending on every couple of course. Some are amicably split, others are far less amicably split. So, what are some of the challenges here, Pops, when someone’s thinking about or in the process of getting divorced?

Steve Lewit: Well, one of the challenges for us, Gabriel, as an advisor, is that you’re counseling this couple and we have a responsibility to the couple. But one of the couple comes in and says, “You know, I’m going to leave him,” or, “I’m going to leave her, and I want your counsel.”

Now, it’s like uh-oh, what do we do now? But the challenge is very, very simple, is each side believes they should have more of the money, that’s what. And if they hire a attorney, if it’s not amicable and they hire an attorney.

Gabriel Lewit: And they’re more often than not, not amicable.

Steve Lewit: That is correct.

Gabriel Lewit: Yes.

Steve Lewit: So, if they hire attorneys, those attorneys in the divorce world are bulldogs. They’re coming after everything they can possibly get. They want to make arguments between the couples. So it gets more animistic. No, that’s not a word. It gets more, I don’t want to say difficult again. Antagonist.

Gabriel Lewit: What was your… Animistic?

Steve Lewit: Yeah.

Gabriel Lewit: Was that your… Antagonistic.

Steve Lewit: Very poetic. Antagonistic. Once you hire attorneys, it gets very antagonistic.

Gabriel Lewit: Yes. Oh, certainly can. And we’ve heard those stories, unfortunately.

Steve Lewit: And now, just as a side comment, I think it was in the Secure Act that, let’s say you have an amicable divorce, that still needs to be approved by the court and the judge. But if the judge doesn’t like the divorce, he can change the ratios of who gets what.

Gabriel Lewit: Hm.

Steve Lewit: So, it’s not even in your hands. So it won’t, “Well, okay, we agreed on this.” And the judge says, “No, that’s not fair.”

Gabriel Lewit: Hm. Well, the biggest, I think, logistical challenge is a single path now splitting into two.

Steve Lewit: Yep.

Gabriel Lewit: Right? So, regardless of all the individual financial details that shake out, you know, you had a joint plan at one point, and then that now becomes a solo plan, and that really upends the apple cart. So you start thinking, “Hey, I was going to retire and we were going to count on each other’s pensions or social securities.” Now, you maybe have just one. You have individually half the money that you had jointly together before. Budgets change substantially when one or the other couple moves out into a new environment, new rentals, new utilities, new cars.

Steve Lewit: It’s very much like one spouse passing. Not quite as difficult financially, because the money is there. But when one spouse passes, the other life changes. The financial life changes. Everything changes.

Gabriel Lewit: Well, so what I find, folks, is if you ever get to that point where you’re thinking this is a possibility, that you might end up getting divorced or in the middle of that, there’s so many different things on the financial front to start to get into, that while there’s a big emotional component, you also want to plan for that very factually, very strategically, from a financial perspective.

Steve Lewit: Right. So, you should-

Gabriel Lewit: Not that you should stay in an unhappy marriage just for the money, but you-

Steve Lewit: Well, some do. Some people do.

Gabriel Lewit: But I’ve also-

Steve Lewit: It’s expensive to get divorced.

Gabriel Lewit: Yes, some people do. But others don’t think twice about the money, just up in divorce and then realize, “Oh my gosh.”

Steve Lewit: “What did I do?”

Gabriel Lewit: “What did I do? And maybe we should have tried to work this out.”

So, it’s one of those things where it’s tricky. Obviously, anything to do with divorce is very tricky, but especially so on the money side.

Steve Lewit: Yeah. It’s very, very personal. It’s very emotional. And I think you’re right, Gabriel, we invite people to talk about things that are happening in their lives because we’re just not money managers. We’re really life managers, holistic and life managers.

So if something’s going on, a lot of our clients feel very comfortable in terms of not only divorce but, “My husband can’t remember things,” in dementia. Or, “My wife just was diagnosed with cancer.”

I just had a call with a client in California, that’s very sad. To share these things with us really helps us be good fiduciaries for them or for you, folks.

Gabriel Lewit: Yeah. Well, you keep leading into all these other life changes-

Steve Lewit: I’m sorry.

Gabriel Lewit: … that we’re going to get to. In the midst of the one we’re talking about, you keep talking about the other ones.

Steve Lewit: I’m sorry. It’s just the way my brain is so global.

Gabriel Lewit: So, you’re stealing all the thunder, man.

Steve Lewit: No. When you’re a global thinker, that’s the kind of things that come out. It’s not you, it’s not like-

Gabriel Lewit: He’s stealing the thunder, folks. For our future topics here in just a minute or two.

Steve Lewit: It’s a thunder stealing mind.

Gabriel Lewit: All right. Well, I’m going to move on to-

Steve Lewit: You should be proud. I’m your dad with a thunder stealing mind. This is just a great thing to be.

Gabriel Lewit: All right. So just to recap, we talked about marriage, remarriage, divorce. Okay. Well, let’s talk about other changes here that often are difficult.

Job changes. I just had a client the other day got laid off.

Steve Lewit: Yep.

Gabriel Lewit: Okay, those are perhaps the most difficult of job changes because it’s oftentimes unexpected. Now, if you’re shifting jobs and you get a new promotion at another firm with a higher salary level, those ones are a little less difficult. But oftentimes, it is good to review your plan. You have excess money, should you save more X, Y, or Z?

But, dad, how about when somebody loses a job unexpectedly? What kind of guidance do we typically provide in those situations?

Steve Lewit: Well, if you’re our client, you have a plan. So in that plan, oftentimes we’ll run scenarios, as you know, Gabriel, where one spouse loses a job or death happens to one spouse, just to stress test it. Did I bring it up again?

Gabriel Lewit: You keep bringing up.

Steve Lewit: It’s that what a mind I have.

Gabriel Lewit: Focus, my friend. Focus.

Steve Lewit: Yeah. So if someone loses a job, surprisingly, the counselor says, “Okay, let’s go through your plan.” Now, if you’re not a client and you lose a job, it’s like, okay, you probably sit down with a pen and paper and say, “Let me figure this out.”

I think the worst case is, my first question is, can you get another job?

Gabriel Lewit: How quickly? Yes.

Steve Lewit: How quickly can you get another job? And what’s really unfortunate is folks that are getting downsized at 55 or 60 or 65, they ain’t finding another job.

Gabriel Lewit: Much, much harder. Yes.

Steve Lewit: There’s no age discrimination out there, right?

Gabriel Lewit: Well, one of the common stress tests, if you will, that we often run on a retirement plan, is the unexpected early retirement, right?

What if you lose your job a couple years sooner? Now, sometimes we just run a plan where you would retire sooner, but that retirement may be either optional or forced. Okay? And so, that’s one of those things where if you’re thinking about your work and your work feels maybe a little unstable or possibly uncertain, that would be a good exercise for you to run in your planning, is that what if scenario if I lost my job?

Steve Lewit: Yeah. And if you’re really unhappy with your job, so one of the scenarios, in fact, this was yesterday, a client, miserable, really hates her job. She just doesn’t like it. I said, “Well, why don’t you retire now?”

And she says, “Well, I think I got to work another two years.”

I said, “Well, no. We ran the numbers and you could retire now.”

And she’s like, “Really?” And then that scared her because now she has an option to really retire.

Gabriel Lewit: Big, big change.

Steve Lewit: It’s a big, huge change. Very emotional.

Gabriel Lewit: Yeah. Now, other things that can occur here, guys and gals, is severance packages, money being paid out from unused vacation. I think I had one client that had 365 days of unused vacation or something crazy like that. They never took a vacation in their entire life, and they actually got paid out for that. That was kind of cool. It wasn’t 365 days. I’m exaggerating.

Steve Lewit: Yes.

Gabriel Lewit: But it was a very large sum.

Steve Lewit: Mm-hmm.

Gabriel Lewit: You’ve got unemployment, if you’re looking for new jobs. You’ve got the right amount of emergency funds, savings that you can then tap into bridge the gap. So all sorts of different components here.

Rollovers of old investment accounts. If you’re no longer working there, can you move that in, consolidate as part of the rest of your plan and employ that in a better way? So, lots of different facets to changing jobs or losing a job.

Steve Lewit: Well, any change is going, I think, Gabriel, will bring all of those things in. Remarriage, oh, here I go again. I better not say life, death, sickness. That’s the next one, right? Sickness.

Gabriel Lewit: I’m trying not to steal the thunder from ourselves.

Steve Lewit: Medical. Yeah. Okay.

Gabriel Lewit: Yes.

Steve Lewit: You get it.

Gabriel Lewit: Yes, I get it. I get it. Yes.

So, okay. Guys, let me just pause here and just say, if you have questions on any of these topics so far, marriage, remarriage, divorce, losing a job, retirement, forced retirement, give us a call 847-499-3330, or go to sglfinancial.com, or you can email us at info@sglfinancial.com.

And there are I’m sure many other aspects of all of these that we’ve talked about so far, that for time purposes, we don’t want to spend six hours on this topic here today. We’ve got a few others to get to, but there’s a lot of different life changes as you’ve hinted at here. There’s an unlimited amount, honestly, that we could probably dive into. So, we’re just going to focus on some of the other bigger ones here that we see.

Steve Lewit: Sure. I would just add to what you said, Gabriel, is that if you all have something on your mind, like there’s nothing on the radar, but it’s like, gee, they’re firing other people maybe, that your job is secure, but what if I really do get fired?

Folks, we run a lot of what if situations for you all, and don’t hesitate to let us know if something’s on your mind. We can run the numbers for you.

Gabriel Lewit: We can.

Steve Lewit: Yep.

Gabriel Lewit: Indeed.

Steve Lewit: Indeed. Surely.

Gabriel Lewit: There you go, waiting for it.

Steve Lewit: Okay.

Gabriel Lewit: All right. So, how about something a little more positive?

Steve Lewit: Shoo, I was getting depressed. Depressed all of a sudden.

Gabriel Lewit: All those are too negative. There are good things. We’re going to switch to-

Steve Lewit: Well, marriage. We did marriage.

Gabriel Lewit: Well, we did do-

Steve Lewit: And remarriage. That’s positive.

Gabriel Lewit: We did do marriage. Yes.

Steve Lewit: You should not classify that as-

Gabriel Lewit: Marriage is positive?

Steve Lewit: … isn’t positive, right?

Gabriel Lewit: I think it’s positive.

Steve Lewit: It is. Yeah.

Gabriel Lewit: So, how about birth of a new child?

Steve Lewit: Ah.

Gabriel Lewit: Or adoption of a new child?

Steve Lewit: Wonderful.

Gabriel Lewit: Very happy time in life. Not so much for sleep, but for other reasons you’re very happy.

Steve Lewit: Yeah. Yeah. It’s a whole change.

Gabriel Lewit: Yeah. You’ve got another human now to take care of. You’ve got a future to plan for. You’ve got those college bills to pay for.

Steve Lewit: It’s like buying a dog.

Gabriel Lewit: No, it’s very much not like that.

Steve Lewit: Well, it’s a big responsibility.

Gabriel Lewit: What’s wrong with you?

Steve Lewit: I don’t mean to equate children with a dog. I meant from the point of view, from the point of view of gaining responsibility.

Gabriel Lewit: Folks, I can’t. I don’t know what to say about that.

Steve Lewit: Hold on. Katie, how many dogs do you have?

Producer Katie: Three.

Steve Lewit: Katie has three. Isn’t that a big responsibility? Three dogs?

Gabriel Lewit: You can try to dig out of this hole, but-

Steve Lewit: You’re interpreting-

Gabriel Lewit: Your first comment to having a new baby. It’s like buying a dog.

Steve Lewit: Not.

Gabriel Lewit: It’s very different.

Steve Lewit: Folks, you know what I was aiming at? I wasn’t. You get it. I know you all understand.

Gabriel Lewit: Well.

Steve Lewit: You can write Gabriel. Straighten it out.

Gabriel Lewit: I’ve recently bought three dogs then, because I’ve had three kids in the last seven years.

Steve Lewit: Yeah. I love your little puppies.

Gabriel Lewit: All right. Well, yes, folks, you have things like life insurance to think through. Okay, what if something happens to you or your spouse, will there be enough money to take care of the kids?

Many times, this is when families start to think through some preliminary estate planning. Okay, do I have a will, a trust, powers of attorney? Those are very often kicked to the back burner. Why? Because you have no sleep and you’re tired. You’re not thinking about-

Steve Lewit: Exactly.

Gabriel Lewit: … your will or your trust. But eventually, you get to a point where you’re like, “Oh, yeah. I really should do that.” Guardianships and things of that nature.

You’ve got college savings. There’s always a discussion with my clients that have kids, how much do you want to have saved? How much are you saving towards that goal? What does the game plan look like there?

And then, you’ve got just other budget changes, big budget changes. More expenses, more food, bigger vacation budgets. Maybe switching your house in the future, because your house or condo is too small. So, so many things can get kickstarted with the birth of a child, or a new adopted child.

And similarly, if you’re a new grandparent, you might be thinking of some of these similar things. But I will say, from my experience, most of the time grandparents are interested in maybe funding some college.

Steve Lewit: Definitely.

Gabriel Lewit: Cost for their grandchildren. That’s a very big one. So, there’s some ideas there that you can explore. But also maybe, as a grandparent, you want to take your family and grandkids to Disney when they’re a little older. Or you want to do a nice family… I just had a client that took all their kids and grandkids, 14 people in total, to Hawaii for a week and a half. She didn’t invite me.

Steve Lewit: I didn’t get one either. No invitation there.

Gabriel Lewit: That sounded really nice.

Steve Lewit: Yeah.

Gabriel Lewit: I was a little jelly there.

Steve Lewit: Hm.

Gabriel Lewit: Yeah. So there’s lots that can go on in this very special and cool time of life.

Steve Lewit: Yes.

Gabriel Lewit: Yep.

Steve Lewit: Yeah.

Gabriel Lewit: So, I’ll give another positive one here before we maybe switch to one or two other maybe more challenging situations. And I’m just throwing this one in just for fun, even though it doesn’t pop up too often. What if you win the lottery, Steve?

Steve Lewit: Oh my goodness.

Gabriel Lewit: You’ve talked about this on the TV show, I think on WGN before.

Steve Lewit: I have. I have. Well, what the topic was, why do most people that win the lottery go broke? And the reason is they think they have limitless money and they spend it on everything. It’s like, how do you spend $300 million? Well, people do.

Gabriel Lewit: Well, and I’ll give a smaller case. It wasn’t the lottery, but I had a client that won $200,000 on a parlay, a crazy parlay sports bet. And a very similar conversation, “Wow. Windfall of money. What do I do with this?”

So maybe we’ll talk more about windfalls of money here. Unexpected. Whether it’s, “Wow, I just got some equity in my company and then just sold for huge amounts.”

“I’ve just won the lottery, a million, 2 million, 300 million.”

Or, “I just won a big sports bet.”

Steve Lewit: Yep.

Gabriel Lewit: What do you do with this cash-ola that you now see staring at you in your bank accounts?

Steve Lewit: Yes. That would be fun. It would be.

Gabriel Lewit: It’s a good problem to have, no doubt.

Steve Lewit: Yep. Or if you don’t, what if you lose money on a big… What if you have a gambling problem?

Gabriel Lewit: Well, that’s a big challenge. Yes.

Steve Lewit: Yep. Yep.

Gabriel Lewit: You want to avoid losing lots of money gambling. Gambling is not a great way to make lots of money, folks, as if we didn’t have to say that.

Okay. How about the one that we won’t spend too much time because pretty much every topic we ever talk about is based on this, but the big retirement.

Steve Lewit: Now, how do you… Be more specific, how would-

Gabriel Lewit: Well, that’s a big life change.

Steve Lewit: Oh, for sure.

Gabriel Lewit: It’s a big life event.

Steve Lewit: Yes.

Gabriel Lewit: Everything you’ve been saving for is now here.

Steve Lewit: Yes.

Gabriel Lewit: A planned retirement.

Steve Lewit: A planned, well, what’s the goal in retirement? What’s the goal?

Gabriel Lewit: Well, the goal is to enjoy retirement.

Steve Lewit: Live a good life.

Gabriel Lewit: And not run out of money.

Steve Lewit: And have peace of mind.

Gabriel Lewit: Yeah.

Steve Lewit: So, my question is, if you are retiring, what plan do you have in place? Very simple, to give you peace of mind.

Gabriel Lewit: Yeah. Well, and obviously, many of you are clients of ours.

Steve Lewit: So, we hope you have peace of mind.

Gabriel Lewit: That is the plan. We have a plan and we follow that plan. We adjust it for many of these other life events. But, of course, I had to mention that was one of the biggest ones that we generally talk about every episode of every show. So we won’t get into too many of the weeds, specifically about developing a retirement plan.

But it usually includes income strategies, tax strategies, legacy estate planning, investment options, all the bells and whistles of your retirement plan are included.

Steve Lewit: Do you get this question? I get this question a lot. People come in, whatever age, and they’ll say, “What’s the best age to start planning retirement?”

Gabriel Lewit: Sometimes. Yeah.

Steve Lewit: Yeah. So how do you answer that question?

Gabriel Lewit: Now.

Steve Lewit: Yeah.

Gabriel Lewit: Earlier.

Steve Lewit: Earlier. Soon. Before now.

Gabriel Lewit: Before today. Yes. No time too soon. I will actually say, probably when you’re in high school it’s too soon. But once you get out and you get your first job, that’s really the right time.

Steve Lewit: Yeah. Not that it’s primary on your mind.

Gabriel Lewit: No.

Steve Lewit: But it’s back there somewhere, someday.

Gabriel Lewit: But that is the best time to start thinking about it.

Steve Lewit: Yeah.

Gabriel Lewit: The sooner, the better. And having even a preliminary game plan is very wise.

Steve Lewit: Yep.

Gabriel Lewit: Okay. But let’s say you are retired and life starts to throw you more curveballs.

Steve Lewit: Okay.

Gabriel Lewit: Okay?

Steve Lewit: Okay.

Gabriel Lewit: You’ve already hinted at these. Now you’re pretending like you don’t know what they are.

Steve Lewit: I have no idea what this is. I can’t imagine.

Gabriel Lewit: What else could possibly happen?

Steve Lewit: What else could possibly go wrong in life?

Gabriel Lewit: How about a very unexpected or more debilitating health, I don’t know, health problem?

Steve Lewit: Yeah. Condition.

Gabriel Lewit: Condition.

Steve Lewit: Yeah.

Gabriel Lewit: That’s the word I was looking for. Health condition.

Steve Lewit: Yeah.

Gabriel Lewit: What does this often do to one’s planning, Mr. Lewit?

Steve Lewit: Wreck it. Literally, when someone is diagnosed with cancer or diabetes, serious diabetes, or a degenerative disease, their whole life’s changed.

Gabriel Lewit: Hm.

Steve Lewit: It’s like the old life is over and the new life is here. And that is a new plan. It’s different expenses, it’s different traveling, or food, or equipment you need at home, or renovations at home. It’s a whole new structure.

So, the original plan doesn’t go quite out the window. But a good part of it is like, okay, let’s re-figure this thing out because you have a new life.

Gabriel Lewit: Yeah. Maybe you need more care. Your budget might shift. You may have had big travel plans and then you can’t.

Steve Lewit: You might need nursing care. You might have to go into assisted living. There are all kinds of things that could happen.

Most people do not have long-term care. And I’m not saying that’s right or wrong, I’m just saying most people don’t have it. So, that burden of the expense of a nursing care, I have a couple now that he needs 24-hour nursing care.

Gabriel Lewit: Yeah.

Steve Lewit: And they don’t have long-term care, so that’s coming out of their finances.

Gabriel Lewit: And we bring that up now because that is one of those areas that you do want to think ahead to, long-term care, and somebody gets sick or ill or can’t take care of themselves. How is this going to be planned for, both financially and non-financially, is a good thing to think ahead about. Even though these kind of last few items we’re talking about here are the ones that nobody really wants to think about. So they oftentimes don’t.

And that leads us to the last one on our list here to end, I guess, with a not as exciting topic here, a very depressing topic for many reasons, but the death of a loved one or a spouse.

Steve Lewit: Oh. Didn’t we talk about that already? Didn’t the mind bring it up?

Gabriel Lewit: I think you did reference it. Yes. We did not dive into details.

Steve Lewit: Yep.

Gabriel Lewit: And if you haven’t followed along, folks, necessarily, we’re kind of visually here painting a picture of a life’s trajectory, right? Married, kids, retirement.

Steve Lewit: College education.

Gabriel Lewit: Yeah. So the tail end of that trajectory is one spouse often predeceases the other.

Steve Lewit: Yep.

Gabriel Lewit: And that becomes a very difficult lifetime.

Steve Lewit: Yes.

Gabriel Lewit: I’m working with a couple clients right now that are going through this.

Steve Lewit: Yes.

Gabriel Lewit: And it’s challenging from a budgetary perspective, from an emotional perspective, from an income planning perspective. Especially if the spouse that passed was the one that was handling all the financial affairs.

Steve Lewit: Right. The breadwinner.

Gabriel Lewit: Which, in these examples-

Steve Lewit: They’re so-called breadwinner.

Gabriel Lewit: Breadwinner. The financial manager of the two.

Steve Lewit: Yep.

Gabriel Lewit: Yep.

Steve Lewit: Yeah.

Gabriel Lewit: So, the best way, I think, to be prepared for this is to, as you mentioned earlier from that sort of what if, which of course is not a fun what if, but it’s an important one from a planning perspective. And making sure, if you’re not familiarized with the financial happenings of your joint, combined finances, maybe you should start to get a little bit more familiar, at least with the preliminary basics.

Where’s our money? What kind of a budget do we have? What kind of investments do we have? Where’s our income coming from? And having those conversations with your spouse can make both parties more prepared in sort of an unfortunate scenario like this.

Steve Lewit: Yeah. And it’s really interesting, Gabriel, because many people that interview us as potential financial advisors say, especially the man will say, “Well, I’m looking, if something happens to me and the wife is there, I want my wife to be able to come in…”

Gabriel Lewit: And have someone to talk to.

Steve Lewit: “Somebody to talk to and somebody to trust.”

Gabriel Lewit: Yep.

Steve Lewit: And that’s great thinking. But I agree with you. If I’m the spouse that’s not involved with the finances, get involved.

Gabriel Lewit: Either, again, just preliminarily at least.

Steve Lewit: At some level, get involved. Just don’t say, “Oh…”

Gabriel Lewit: Even though you’ll come to us afterwards, it’s still going to be an easier transition for you. Because I have a client right now that is coming, that was working with us, that is with us after her husband passed, but was still clueless as to where everything was. And it is very challenging for her right now.

Steve Lewit: Sure.

Gabriel Lewit: Trying to wrap her arms around everything.

Steve Lewit: It is. Sad time.

Gabriel Lewit: Yeah. So, folks, there are other bigger life changes here we haven’t talked about, taking care of aging parents, disability, if you are working, gosh, there’s a long, long list of them. But hopefully, what we covered here today has given you, I don’t know, maybe sparked an idea of something that you haven’t thought of yet. Or if you’re a parent, maybe sparked something to talk to one of your kids about, that they should be focused on in their life journey.

And of course, we’re here to help you or your kids. If you have kids that you think, “Hey, gosh, they should talk to Steve and Gabe about this stuff,” of course, introduce them to us. We’d be happy to talk with them, help them. As we mentioned, there’s no time too soon to get started. And if we have questions that we can answer for you-

Steve Lewit: Yeah, I think the point here is-

Gabriel Lewit: … we’re here for you.

Steve Lewit: … we don’t mean to depress you, but we’re all old enough to know that life happens, and different things happen, good and bad. And those changes, if we can help with those changes, that’s our goal, is to be part of that change and make it an easier change for you all.

Gabriel Lewit: Sure. Sure is our goal. So call us here, 847-499-3330. Email us, info@sglfinancial.com, or go to sglfinancial.com and click Contact Us, and let us know how we can help.

Otherwise, we can’t wait to have you back for our next show. Appreciate your listenership and thanks for tuning in. We hope you have a great rest of your day, week or weekend.

Steve Lewit: You want to go for a ride in my new car? Huh? Do you?

Gabriel Lewit: Maybe later.

Steve Lewit: All right.

Gabriel Lewit: Maybe later. Got some work to do today.

Steve Lewit: Stay well, everybody.

Gabriel Lewit: Stay well, guys. We’ll talk to you soon.

Steve Lewit: Bye.

Announcer: Thanks for listening to Our Two Cents with Steve and Gabriel Lewit. For any questions about your finances, give SGL a call at 847-499-3330, or visit us on the web at sglfinancial.com, and be sure to subscribe to join us on next week’s episode.

Prerecorded Voice: Investment Advisory Services are offered through SGL Financial, LLC, an SEC Registered Investment Advisor. Insurance and other financial products are offered separately through individually licensed and appointed agents.