What goes into a successful strategic planning meeting? In this episode, Tommy, John, Ben, and Michael dive into their strategic planning meeting season, sharing valuable insights and lessons learned. They discuss the importance of holding these meetings to ensure everyone is aligned in their financial plans for 2024. You'll learn why it's crucial to plan for your future early and avoid letting retirement sneak up on you, as well as the significance of having a consistent and smooth approach to retirement planning.
They also explains why FinCEN is particularly relevant in 2024 and the necessity of proactive financial planning, much like replacing a roof before it leaks. Listen in to hear about the benefits of their firm’s approach to tax returns and the value of providing ongoing support to their clients. By the end of the episode, you'll understand the hardest parts of financial planning and what to look for in a financial planner to ensure you get the most value from your planning efforts.
Listen to the full episode here:
What you will learn:
- What strategic planning meeting season is. (4:35)
- Why we hold all the meetings at the same time. (5:30)
- The importance of planning for your future as early as possible. (7:30)
- Why FinCEN is so applicable in 2024. (12:05)
- Why you shouldn’t wait to hire a financial planner. (18:00)
- Why we do tax returns in our firm. (26:40)
- The benefit of having an ongoing plan. (33:30)
- What you should be searching for if you want real financial planning. (36:00)
Ideas worth sharing:
- “The reason we hold strategic planning meeting seasons is because we want everyone to be in the same place, at the same time in their financial plan.” - Mason & Associates
- “Don’t let your retirement creep up on you. You want to have a nice, steady, smooth stride into retirement.” - Mason & Associates
- “You can’t wait until you need a financial planner before you hire one, just like you can’t wait until your roof is leaking to replace your roof.” - Mason & Associates
Resources from this episode:
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Read the Transcript Below:
Congratulations for taking ownership of your financial plan by tuning into the Federal Employee Financial Planning Podcast, hosted by Mason & Associates, financial advisors with over three decades of experience serving you.
John Mason: Welcome to the Federal Employee Financial Planning Podcast. I'm John Mason, president and certified financial planner at Mason and Associates. And today we have the usual crew, Tommy Blackburn, Mike Mason, and Ben Raikes. And folks, if this is your first time tuning into the Federal Employee Financial Planning, we're all certified financial planners.
We have a CPA, we have an IRS enrolled agent, and Mike also has the CHFC and CLU designation. So we can't say we're the most qualified and credentialed financial planning podcast out there, but we're certainly qualified and we're certainly credentialed. And we're speaking directly to you, the federal employee.
So in this episode, we are recording on May 28th, 2024, and we just finished our strategic planning meeting season. And if you haven't listened to what that is, we have other episodes that talk about hat a strategic planning meeting is, how long we've been doing them, how we execute them. We'll do our best to link those in the description below, but we just finished it.
So this is 2024 strategic planning meeting season “It's a wrap”. And this is going to be a fun episode because what we're going to do is we're going to take you through kind of like the lessons that we learned over the last six to eight weeks. We're going to take you through some of the conversations that we've had with clients over the last six to eight weeks.
We're going to actually take you through some of like the value-adds, or like the discussion points that were applicable for many of our folks as we look at 2024 action items. So a lot to unpack in this episode, we're going to do our best guys to stay right at that. 25 to 30 minutes. And how's everybody doing? Are we feeling great after strategic planning meeting season?
Tommy Blackburn: Feeling good. Actually. I'm curious how you and Ben are feeling. You guys just ran five miles about, I believe. So hopefully y'all aren't too sore and you're feeling, rested and athletic, feeling pretty good. Honestly, personally, it was nice to have a long weekend.
Doesn't feel like it's over. And part of that is this, I feel like we're now into what I kind of call the echo boom. So you had the boom of strategic planning and meeting season, and then there's all of these other items on the tail end, whether it's follow-ups or things that you put off. Still probably a couple busy weeks here as we catch up on the echo boom.
Michael Mason: Yeah, I'm kind of invigorated, you know, six weeks, seventeen appointments a week. Many, many times my friends at the country club, they know I can't play as much golf, you know, during that six-week period. And they say, we know this is your tough time, Mike. And I'm, I'm like, it's really not tough time. I think it's like five family reunions a day for the next six weeks.
So I'm kind of invigorated by that: catching up with our clients, watching their successes, letting them know that, life is like we had planned for it to be. So for me, it's invigorating. And now, again, like Tommy said, we get to wrap things up and then, make sure we get all of our promises done, you know over the next couple of weeks and then we have some downtime, which I'm gonna greatly enjoy.
Ben Raikes: It's hard to believe John; April 16th seems like it was yesterday. It always strikes me how fast strategic planning meeting season goes, how quickly we get through those six or seven weeks or however long it is this year.
And I think I'll echo what Mike said. It's because it's a lot of work and there's a lot of prep that goes into it, but it's also a ton of fun. It's our one-time year to catch up with our clients, a dedicated time to catch up with our clients, hear how their lives are going and catch up on how retirement is going. What can we celebrate for them? What can we make sure that we're doing for them? So I can't believe we're, we're almost at the end of May here. It's crazy.
John Mason: Well, you said Ben and you're right. Like we, I think we should share just in case people haven't listened to those other episodes on strategic planning meeting season. It's our one time where we kind of like mandate that everybody needs to come hang out with us for an hour or so. And we typically do these via Zoom. So we do them video conference with clients across the country in Virginia. And it's our one like mandatory check-in, but it's very common that clients will email us throughout the year, or we'll have one-off appointments as necessary.
And then it ebbs and flows, right? Like some years, if you have activating Social Security, turning on Medicare or retirement, it's not uncommon to have five, six or seven meetings or touch points if we have to. But this is our one mandatory time where we all need to get together. And the reason we do it in the season, because historically we used to do it in the birth month, is we want everybody to be in the same place at the same time in their financial plan.
And if we wait to have a strategic planning meeting until November, we're in a way different place than we are in February, March, April, which is why we try to bunch everybody in these six weeks. And we get really good at it. You know, let's also make sure we remind the audience of that.
My first strategic plan, it's typically the same client every year. They're very good at booking it. I feel like I do a good job on that one. Weeks two and three, I'm crushing it. Week six, I've got it down. You know, it's that first one. You've got to shake the jitters out a little bit. it's like the first pitch of a baseball game, but then you get into your groove for six weeks, and you're really, we're doing a good job crushing it.
And Ben, congratulations to you and me for completing the 8K yesterday, the Memorial Day Freedom Run that we sponsored and decided to run in. And we made that call three weeks ago. So I got eight days of training in, you know, official before the race and we have a lot to celebrate. One, that we were able to sponsor the event; two, that we were the only sponsor that actually ran in the event. Three, that we both finished the event, and just connecting with the community was really cool.
I want to just say one thing on that race, which I think is directly applicable to this podcast. So not a tangent, then kind of like sprinted into the finish line - because he's more of an athlete than I am at this point in life. I kind of like limped in a bit, you know. I made it, I finished. And as I was running this race, I had nothing else to do but think about financial planning.
And I was thinking about like, if you wait until you're 60 to do your financial plan, you're going to make it through retirement. It may be a little more painful. You may limp in. You may only have social security, like you'll, you'll finish the race. You don't really have a choice, but to finish like you will do it, but it's going to be painful and you're going to limp in.
The earlier you can start training, the earlier you can start making those health deposits, the earlier you can start making your TSP contributions and start planning for your future, the more likelihood that you'll be able to finish strong. The more likelihood is that you'll be able to run five five-minute miles instead of five eight-minute miles, right? So we're always looking for things in life that can help directly relate back to financial planning and this race was one of those for me.
Tommy Blackburn: It's an interesting analogy I was just thinking about John as you went through it. It's also if you waited till later in life almost like training for the race. And now you have to put in a herculean effort to get your retirement in shape. You may die when you get across the, I know that's the extreme, but like, if you haven't trained or you haven't built up to it, and now it's a sprint at the end, it's a very different picture than if you've been planning and working at it for some amount of time. So think more, just a little bit more to that analogy, I think it's a good one.
John Mason: And then thinking through also, you know, when you're, when you're 18 years old, 20 years old, 35, 40, I don't know the exact date and we're not doctors on this podcast. But like, let's just say at 40 years old, you start losing the ability to increase your muscle mass.
You start losing the ability to do these things. Like as we get older, it gets harder to build or maintain muscle. And it's just interesting that in financial planning, time is on your side and on the health thing, time is on your side and you want to be so strong at 60 years old so that you can kind of carry that weight and muscle mass throughout your, your last three or four decades of life, just like in your financial plan.
Michael Mason: Yeah. Ken Mason used the analogy many times - and this is not just towards financial planning. I mean it's a financial planning goal, but Ken would say, you know, try buying that $500,000 house or that $1,000,000 house and doing it over 10 years versus 30.
You know, it's a whole lot easier to do it over 30 years. I'll remember the poem that I wrote one time. I don't have it all in my head, but thank you guys for sparking it - it has something to do with, you know, the changes. And I remember the middle line was, start it or stop it or throw them away. Which is if it's something bad, stop it.
If it's something that's good, start it. And the ‘throw them away’ is, you know, in reference to cigarettes. So I'll remember that poem, but you get the point. Start it or stop it or throw them away. If it's worth doing, it's worth doing today.
Ben Raikes: Last point, John, and we can get off the 8K. The reason that I was sprinting at the end was because I had passed someone a mile down the road and then I'm within a hundred yards of the finish line and I hear everyone at the finish line saying, “Hurry up, he's going to get you.” And it was a guy that I had passed five minutes ago and he was all bore, full-out sprint trying to beat me to the end.
And the last analogy is, Don't let your MRA creep up on you. Don't let age 65 creep up on you. Don't let your retirement creep up on you to where you're looking back and you're going, “Oh my gosh, what have I done. In order to make it, in order to make my goal, I've got to run until I can't run any faster and I'm going to pass out.”
You want to have a nice smooth stride going into the finish. You don't want to be limping. You probably don't necessarily want to be sprinting either. You want to have all your ducks in a row. You want to have a nice, steady, smooth stride into retirement. But I think we've played the 8K analogies to death here. So I'll stop there.
John Mason: Well, not yet, because you were actually - I saw the video, you were in front of me, so I didn't see it live, but you're running like this, Oh, I'm the man, I'm the man. And then you were like, I'm going to lose this race. So I guess the audience should know, don't celebrate.
The planning's never done. The planning's never done. The race is never done. That's why we do these strategic planning meetings every year with our folks, because we have to continue planning. We have to continue running the race. It's not over till it's over. So that's why these meetings are so important.
So 2024 SPM season, strategic planning meeting season, it's a wrap. Let's talk about some of the common things that we talked about this year. And I think one of the great ones would be the FINCEN, F-I-N-C-E-N. Financial Crimes Enforcement Network Beneficial Ownership, the B-O-I. And so Tommy, if you can walk us through what that is, why we were informing clients and why this is so significant in 2024, where in 2023 it wasn't applicable.
Tommy Blackburn: So Congress passed a law a year or two ago that went into effect at the beginning of 2024. And Congress kind of just sat back and said, we have all of these business entities that are registered at state levels. So this could be things as simple as a single-member LLC, which is most of the time how these businesses are organized.
Could be a C Corp, could be any type of business entity registered at the state level. So for us, we're in Virginia, registered with the Virginia State Corporation Commission. They want to know who owns these because they're not registered with the federal government. So they said under the guise - whether it's true or not - of money laundering, terrorist-type things.
We want to know who's behind these entities So they're going to be required to file these reports with us now, just disclosing the beneficial ownership interest in these entities. So if the entity was in the business - your LLC, for example, was in existence before 2024 - you have until the end of 2024 to comply with this.
And the penalties, as we understand them, are pretty steep if you don't comply, and this stays in effect, and they're able to police it. And it's $500 a day for being out of compliance. It's not that difficult to do if it's a simple ownership structure, at least you just Google FINCEN BOI, and it'll take you right there.
Upload a driver's license, and just disclose that you own it. and get that knocked out of the way. Of course, things could be more complicated for you. so you may want to consult with the appropriate professional depending upon what you're dealing with. But a lot of folks, you know, they, they do self-employment work afterwards or they have some type of side business or they have some rentals that they have in an LLC.
So it's more applicable than you would think or applicable to a friend. and most people were unaware that this was out there. So we wanted to pass that word along and just make sure if it applied to you that you knew. It was an administrative task that needed to be taken care of.
John Mason: And it wasn't just active LLCs that were so important. And I'm sorry, Ben, I'm talking over you a bit here - but we had one client who left an LLC open, pays the annual filing fee just in case they want to do something with it in the future. So it's not revenue determined on whether or not you need to do this. It's just an active business, right?
Tommy Blackburn: Yeah. And actively registered.
Michael Mason: Ben, how crazy is it that if - and I'll let you tell the story - one of our clients, retired FBI, decides to open his own business, and he does it the right way, and he goes to attorney to open the business in January, and you can finish the story.
Ben Raikes: Yeah. It goes to the attorney, “Hey, help me figure out this LLC”. It goes through the entire process, sends us the articles of incorporation from Virginia, thinks he's checked all the boxes, and then we mentioned beneficial ownership interest to him in our meeting. And he said, yeah, I haven't done it yet.
And you know what, that attorney didn't mention anything about it. And so, Mike and I was in some meetings with Ken as well in my own meetings - we mentioned this, I'd say to probably 99 percent of our clients, just because that penalty is so egregious. It's not $500 fine annually. It's a $500 fine per day that the form is not filled out, and you'd be surprised how many clients we talked to that said, you know what?
I don't think I have any issues, but my brother has an LLC, or my son is self-employed. He might have something to do. So here's your call to action on this podcast. Spread the word, Google FinCEN, F-I-N-C-E-N, Beneficial Ownership Interest, B-O-I. Look it up and make sure that this is a form that you do or do not need to fill out by the end of this year.
John Mason: How many times did we hear that it was like, how do people even find out about this if it's not from Mason and Associates? And Mike, recently we've talked to some local people in our community, centers of influence in Hampton Roads, Virginia, where the attorney - I don't know why I'm doing this so much. The attorneys, the people who are supposed to add value is probably better, have made the decision - legally they said, do not tell your clients about BOI.
Michael Mason: I think the exact words, and it's okay to say the profession, a CPA, a tax preparer. And I asked him, are you talking about it? And he says, well, our attorneys advised us not to give advice on it. I said, well, not giving advice is different than talking about it. How about you advise them to look into it and make their own decision, but at least let them know it's $500 a day fine if you don't do it.
And to your point - and then, I won't filibuster - but to your point, we got better as the time went on, cause Ben and I didn't just ask him, we did a lot together, Ben. We didn't just ask the question, do you have it? We expanded that question, so maybe we weren't as great with the first two or three, but then we learned to expand that question and say, how about your loved ones? And we ended up sending the link so that they could forward it to their loved ones.
Tommy Blackburn: And I was going to say, that's a beautiful thing. I think that we do is, it's almost like Medicare. We don't just say, “Hey. That Medicare is out there.” It's like, “Hey, here's, here's some references. And if we need to help get a supplement in place, here's Brian Gay of Boomer Insurance.”
So FINCEN, here's the website. Here's the FAQs, we've gone through it. We can coach you as to what that process looks like. And to Mike's point, maybe we have to be careful about giving advice, but we can certainly make you aware of it and walk you through; this is what that process looks like. And honestly shame on whoever that CPA professional you are, because I can tell you ones that I've seen, they at least disclose it and say, “There is this requirement out there and you need to be aware of it.”
And for whatever legal, you know, the world we live in, they don't want to give advice, but at least made them aware. So that's concerning that, whatever professional was taking that position of “Just don't even talk about it”.
John Mason: Well, I know we're going to talk more about some of the actions and observations from 2024 season. But this just brings to a point, and it'll be a future podcast episode as well, that it's like, you can't wait until you need a financial planner to hire one. You should not wait till your roof is leaking to replace your roof. And like, if you pay for a new roof five years before that roof is leaking, you didn't waste money. Right?
You had the peace of mind and you had value five years earlier. So this is a classic example of BOI; maybe you didn't think you needed a financial planner in 2024, but maybe you're going to find out you did need one. And there is going to be value - just don't wait until there's some like catastrophic event.
And I know we have another episode that we're going to, that we're going to record this, going to talk directly about that too. So the next topic is this year we also talked about Series I savings bonds and Series I savings bonds were all the rage, what was it, Tommy? Back in 2022? When? When initial rates were probably 9.5% to 9.6% I guess it was?
Tommy Blackburn: Was it ‘21 when inflation began?
Michael Mason: 21 is my guess, yeah.
Tommy Blackburn: Yeah. Maybe end of ‘21. Yeah, once inflation kicked. Yeah, it was like 9.6% there for a little while and up in the mid to high seven. So they were great interest-bearing securities, bonds, pretty much cash during that period of time.
John Mason: So for two or three years, or at least two seasons, we were actively talking about encouraging folks to take money from a savings account or a bank account at like Wells Fargo that was paying zero and get it making north of 5% in a Series I savings bond. The negative with the I bond is that the money was locked up for 12 months.
The benefit of the I bond is you made a lot more money. So we did this for one or two strategic planning meeting seasons. And then what's happened is interest rates have gone up during that time. So we had high inflation, which yielded high I bond rates. And then now all of a sudden we have high interest rates.
So bank accounts have gotten more competitive, and don't quote me exactly on this folks, but essentially Series I bonds and a high-yield savings account are earning about the same at this point. So we are not actively recommending I bonds as much as we were one or two seasons ago. And in turn, now we're also using those I bonds to fund vacations or initial distributions and retirement.
So they serve their purpose really, really well. And what we were finding during this season is that we're actually starting to liquidate those and use them to serve us in whatever capacity that may be; either a high-yield savings account or actually spending it in retirement. Maybe Ben, you can talk with the audience a little bit about the taxation of a Series I savings bond. Like do people pay taxes along the way? Do they pay taxes at the end? How do the states tax the I bonds when they're cashed out?
Ben Raikes: Yep. And that's where this, I think I bonds for 99% of our clients when they were earning north of 9%, it was as close to a no-brainer in financial planning as you can possibly get. I think we probably recommended it to almost every single one of our clients. The taxation side is where this math gets a little bit muddy in that I bonds are not taxed, the interest is not taxed until you redeem them. So they’re essentially a tax-deferred product.
So what you want to look at in, “Hey, should I redeem these I bonds? Should I not redeem these I bonds?” is actually your after-tax rate of return on a CD versus an I bond. And since everyone's tax rates are different, that's going to be a different answer for everyone. The other important note is that I bonds are not taxed in the state of Virginia, so they are completely state tax-free as well.
So, John, I think maybe you or Tommy were mentioning before this podcast, since they're pretty much on par with each other this year, it is a great place to go to your I bonds to say, Hey, do I have a vacation coming up? Do I need to buy a new car or a new roof? Why don't we go ahead and get rid of those I bonds?
They're harder to track than they are your bank accounts. And when we get rid of them, we can forget about them. And now we don't have a second or third or fourth place to go check whenever we're gathering all of our cash accounts for you guys for these strategic planning meetings.
John Mason: Yeah. Financial planning, minimalism is like some oversimplifying or simplifying your life. I'm not typically a fan of having seven different CDs at seven different credit unions. So anytime you can kind of simplify your life a bit, that seems to be a good opportunity. And redeeming these I bonds is super easy: treasurydirect.gov, redeem and then it's in your bank account within two or three days, I think.
Ben Raikes: The amount that is shown on that - sorry, Mike - the amount that's shown on treasury direct is the amount after you've paid your three-month, I'm using air quotes here, your “penalty” for purchasing the I bonds. Is that correct? So what you redeem is - actually what you see on the website is what you actually get.
Tommy Blackburn: Yeah, that's your actual cash in value, and I was did want to add Ben a little wrinkle to your tax answer.
Ben Raikes: I know what you're going to say.
Tommy Blackburn: You could elect to report that interest every year. So just in case anybody's curious out there and says, “Oh, they didn't talk about it”. You do have the option to report that interest as you go versus waiting until you cash them in. That would be unusual, but that is certainly an option.
Michael Mason: We definitely had a client that will still be in the 12% tax bracket and in the future won't be so making that election was good. And John, the other thing about minimizing the amount of accounts that are out there, all things being equal, it's nice to be able to name beneficiaries and contingent beneficiaries on accounts, and the I bonds don't let you name contingents. So all things being equal, it's time to get it out when you're not getting 9% where everything else is getting 1%.
John Mason: Strategic planning meeting season has its highs, has its lows. I had, unfortunately, several folks who were diagnosed or informed me that they had been diagnosed with cancer, either really close to the meeting or over the last six months or so. And one of the estate planning things that we did, thinking about these Series I bonds, is maybe we just cash it out and put it in your jointly owned checking account.
I have physically never personally been involved with an estate planning or beneficiary claim on an I bond. I'm assuming it's not that difficult, but the last thing we want to do once somebody has been diagnosed with cancer is have to figure out, “Do we want to go through beneficiary claiming of a Series I savings bond, or we just put it into a jointly owned checking account?”
So that was a sad, sad thing, but I think a good thing that we did recommending that we just go ahead and simplify. And as we review tax returns, because we do that at Mason and Associates and we provide what, what it doesn't seem like many people want to do is tax advice.
Unfortunately, I don't know how they do it in TurboTax. We hate TurboTax, not because it's a bad program, just because if you don't click the radial buttons in the right order, you don't get the right results. But I had a few clients who cashed in an I bond in ‘23, and didn't subtract it off their Virginia return for some reason.
So it gets default added to your adjusted gross income on federal. And then at least in Virginia, you have to use the schedule ADJ and then subtract it off. I even saw one tax return where it was added again. So it was like already in AGI, somehow it was added and then subtracted. So then it only ended up being added one time, but it was like, it was there then it was added. Then it was subtracted. I'm like, I don't know how we got here.
Michael Mason: And even after, in Virginia, your military pay: it started as $10,000 of it wasn't taxed and now $20,000. This year's $30,000, and next year it will be $40,000. So we're in the second year in 2023’s tax returns. And still accountants and individuals with TurboTax was still missing that $10,000 or $20,000 subtraction.
Tommy Blackburn: And that $20,000 subtraction, Mike, that's probably about what, $1,100 of tax savings in Virginia. And, you know, it'd be $1,600, $1,700 when it's up to $30,000, almost $2,000 when we get to $40,000. So that's a significant tax savings.
Michael Mason: Yeah. I mean, you're going to save twice what you probably paid somebody to do that return, right? You paid somebody $600 and they missed it. Right? So you're going to save twice what you paid.
Ben Raikes: I'm recalling a story from you. Just because you click the maximize button doesn't necessarily mean that you got the best result on your tax return.
Michael Mason: I was, yeah, that was a good story. Maybe the full story for another episode.
Ben Raikes: Yes, I think so.
John Mason: So the military subtraction for our folks, Virginia still taxes, military pensions in Virginia, other states like North Carolina does not other -I think South Carolina doesn't tax military pension.
So one of the hardest things truly that we do as federal employee financial planners and helping clients throughout the country. It's not - the federal tax law is complicated. Point blank, it's complicated. But what's also complicated is having to understand all the different states and all the different ways that these retirement income streams could be taxed.
So some states do tax military. Some don't. Virginia does. But now the subtraction allows us to per person to reduce our Virginia taxable income. And in 2024, it's $30,000 per military retirement. And then correct me if I'm wrong, guys, but in 2024, I believe Virginia also removed the age restriction. So it used to be like 55 and older could claim this subtraction. Now it's anybody who's retired.
Michael Mason: Yeah. And let's remember also that you could be a surviving spouse with a survivor benefit, you could be dual retirees, both having a military check, you both get that, that deduction. So it's important, but at the end of the day, and if I change speed a little bit, forgive me, but at the end of the day, that's bunts in singles. In the baseball analogy and, you know, where the home runs come into play - and John, you had more of these than we did, is when a client of many years surprises you with what they were surprised with: a diagnosis and now having a financial planner in your life isn't this thought process of, “Am I getting the value because they take, you know, they earn X percent of assets under management?”
Who are you going to call when life throws you a huge curve ball? And now you're wondering, what am I going to do? And I remember as many times as I've had this, a spouse dies and I can say to the client, you take care of grieving. We're going to take care of everything else.
And I've got a package on my desk right now, where death was a blessing. Alzheimer's early onset, and I've got the package from the federal government right now where I can, the husband, surviving husband can just grieve and take care of business. And then we have the OPM package and we're going to complete that and we're going to do everything we can.
So that's, those are home runs - not home runs you want to have, but who else is going to do it, right? Who else is going to do it at that moment? It's not going to be the CPA that takes the advice of the attorneys that say, “Don't tell them about the $500 a day fine.” If they can't tell them about that, is that they're not going to take care of the other business.
John Mason: Well, hopefully our audience is gaining from this podcast episode that we haven't talked about investments at all, and we're not going to talk about investments, because investments are just a tool and having exposure to the market makes sense. And we do that because we want to generate some sort of return.
So investments at most are a 5-, 10-minute conversation during these meetings. And as we prepare our agenda, as we get ready for these meetings, the way we ask questions to our clients is very important. So we don't say, do you have any questions? We say, what questions do you have? Because they will have a question.
And the way you ask that question will really determine whether or not you get a question back. Second thing is we have an agenda. We jointly prepared for this meeting. What's most important for you that we discuss today, or what's hot on your mind that you want to make sure we discuss, whatever the version of that.
I had four, five, six, eight meetings where it was cancer and all of a sudden this beautiful agenda that we had became completely irrelevant. It gets thrown out and we just pivot to whatever we need to do. So that's what a financial planning experience does for you is: you come in prepared, you're ready to go through your agenda, you're ready for your action items, but if you have to pivot, you pivot. And all four of us, and then throw Ken in there as well, all five of the financial planners at Mason and Associates do that really well.
Tommy Blackburn: You know, I think, the model is reminding me too, as we talk about this; the value in having us in the game already and able to pivot and to adapt with what life throws at us. That's what's really nice about our model too, as we just kind of beat up on some tax preparers, CPAs, et cetera.
When people are paid kind of point in time is what I'm thinking of here. One, it almost deters you, the client from reaching out to them because you're thinking, Oh, I'm gonna get a bill every time I reach out, and that person who's doing that billing is also not as incentivized to have that ongoing relationship because they're not getting ongoing paid.
Whereas for us, we're here. And I know in my meetings and I think in all of our meetings, that's a constant message, which is, “Hey, spend a great meeting. Here are the items we're going to talk about, but you know, we're available. We're here. We're going to be in touch. If anything comes around, please do the same. Keep in touch with us.”
And I think just wanted to drive home. I think us having that type of model with our clients is there's no friction to reaching out and letting us know what's going on in life.
Michael Mason: Tommy, you make a tremendous point. So yes, we did, you know, throw a CPA or two under the bus, but you know in their defense, they're paid to do a job, which is a tax return.
So really the ones that should. be thrown under the bus are the 90% of the people in our financial planning business that are not having these discussions with their clients; simple discussions. Your military pay is tax-free in Virginia up to $40,000. BOI. I've never known anybody that could write a will from the grave or create a medical power of attorney, you know, while in coma.
So if you're being paid as a retainer, which is a fee for service, it's a fee on your investment and all you're getting is the investment, then you may want to second guess, rethink, I guess, who you're using.
John Mason: We've talked about different financial planning models on this podcast before, and there are the fee-only people who collect a check every month, basically for their services.
Then there's the fee-only asset under management model, which is more like what we do. But then there's also hourly financial planners too: certified financial planner, really credentialed, good financial planners who charge hourly. And some of these folks pound their chest like they're holier than thou, or they're the model that makes sense.
But to Tommy's point is, whatever their charges per hour, if that is a roadblock or a speed bump or prohibitive or inhibits the client to actually reaching out in time of need, then that doesn't sound like massive value to me. So all models can work, but it's just understanding those roadblocks and making sure that that folks are getting the value.
And like we've talked about on this episode or other episodes on our radio show for decades: don't pay a traditional financial advisor 1%. Don't pay him anything if all they're doing is providing, you know, a stock model allocation, stock bond allocation in your investments, like that's not value.
Like maybe there's some value in the investment management side. Like there is. Is it 1%? Is it at 1½%? Is it 2%? Probably not. if you want real financial planning, you need to be searching out all of these things, not just a stock-bond allocation. We're getting close to wrapping up this episode.
These meetings, these strategic planning meetings turned into action meetings, which is one of the main reasons why we love doing them virtual. We help folks apply for social security. We help folks apply for Medicare. We helped folks claim their Medicare reimbursement. We helped download Social Security statements to update our financial plans. We logged in and rebalanced TSPs and 401ks. We-
Tommy Blackburn: Changed withholding at services online or DFAS.
John Mason: Updated beneficiaries when people started working at a new location. So, so much can happen from this, but you know what the common denominator is? You can't do it if you don't have a password. And one of the benefits of being at home and on your own laptop is you probably have your password that allows us to help you do all of these things. So strategic planning meetings are not only just forward looking meetings, they actually turn into action meetings as well. Guys, why don't we wrap up this episode with any final thoughts or action items for our audience.
Michael Mason: John, you hit all around it, but let me just go ahead and, and drive it home.
COVID. Many bad things happen from COVID, but one of the good ones was Zoom meetings, virtual meetings. So the fact that we've got an hour appointment. And we've got it done on Zoom. All of our clients were early to the meetings and we were able to pivot and all of us did able to pivot, open up SSA.gov, start Medicare, start Social Security.
All the things you guys just talked about. I just want to drive it home. That's because we did Zoom meetings. Clients were in the comfort of their own home and we had our technology not trying to use it across a conference room table, but in our spots where we have multiple screens on all of our technology right there. So it's not impersonal; Zoom, it's very functional.
Ben Raikes: I think just one overarching theme that we talked about with our strategic meetings is the one constant in all of these meetings is just change. So John mentioned some clients that had had a terrible cancer diagnosis, but we also had clients that retired.
We had clients that went back to work. We had clients that maybe started sending kids to school or kids said to graduate that had family members or pets die. Or they said, I'm going to work ten more years. And then this meeting, I said, you know what? I've only got a few months left. These meetings are incredibly valuable, dedicated check-ins for us.
It doesn't mean that you hold all of your changes into this meeting. We want to hear from you and we want to hear from you as your life changes. But I just think there's incredible value in these types of meetings and not just going over investment review, but going over how has your life changed, and please tell me what is top of your list. What should we talk about today?
Tommy Blackburn: I think it's well said, Ben. That was kind of my takeaway was: we should just in life take an inventory periodically and then think about what changes or what actions need to be taken. And many times, perhaps it is just continuing to stick to the plan that we've been following.
No changes need to be made this year. But many times as you hear our stories, there are changes, something in life has changed, or something in the plan needs to be adjusted. and you only do this by one, taking an inventory and then making a decision - and if we decide to stick our heads in the sand, that is a decision. And we should actually be out looking around and making sure that the current path is the correct path.
John Mason: Well, I want to thank all of our clients. You know, for an awesome strategic planning meeting season. I want to thank our listeners for continuing to support us. Many of those listeners are also clients. So thank you for a wonderful 2024 strategic planning meeting season. If you haven't already hired a financial planner, don't wait until you absolutely need one. Don't wait till your hair's on fire to hire a financial planner. Don't wait till your house is burning down to get that home insurance.
You're going to want to do this in advance and you want to be a part of something that's strategic and forward looking. So you're running the race. We're doing this. We're all in the race of life, and it doesn't stop at retirement. We keep on going. And what I know, in my brief three weeks of training for this 8K is that having the right equipment matters: my knees, my shins, my compression socks.
I sound like an old man, but like having all of this right gear and having a friend who is doing it with me, Ben - having the right gear, having that motivation, having that accountability partner, all of these got me through the race and I was able to do that in nine days, but retirement's a lot harder than running an 8K.
It is. And it's a lifetime of good planning and it's a lifetime of having the right accountability partner. It's a lifetime of having the right equipment and it's a lifetime of knowing when you need to switch strategies - and that's the value that we can provide at Mason and Associates. So those are my final thoughts.
Thank you again to the audience. Thank you to everybody who supports the Federal Employee Financial Planning Podcast and, specifically, Mason and Associates. We're a financial planning firm located in Newport News, Virginia. We help clients throughout the country with their federal employee benefits or tax planning and their financial planning.
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