Questions Aplenty

This Q&A episode tackles a mix of practical retirement and investing questions, starting with why spousal Social Security benefits rarely change the core advice to delay claiming. Don explains the limits of basic retirement calculators versus more robust planning tools, then reassures a late-starting saver that simple, low-cost investing (like target-date funds) often beats complexity. A listener’s story about $242 stock commissions leads into a blunt reality check on day trading (spoiler: still a losing game), while another question explores how and when to share wealth details with adult children. The episode wraps with a clear affirmation of total-market investing—and a striking demo of AI audio cleanup that turns an unusable question into something crystal clear.

0:11 Intro to Q&A format and how listeners submit questions

1:32 Social Security spousal benefits and why they rarely change the “delay” strategy

4:13 What to look for in retirement calculators (and best free options)

6:43 Late-start saver with pension: Roth strategy and keeping investing simple

10:58 $242 commissions and the fall of high-cost brokerage trading

12:00 Day trading reality: why most lose (and why firms loved it)

14:57 Sharing wealth details with adult children and choosing a financial “leader”

18:00 AI audio enhancement demo—bad recording vs. cleaned version

19:06 Total market investing: owning everything vs. chasing winners

22:22 Wrap-up and advisor offer

Transcript

SPEAKER_03 0:05

You're gone into a really great financial future. Tom and Don are talking real money.

Welcome to the Q&A Show

Social Security Strategies Explained

SPEAKER_01 0:11

Happy QA day. Hi, welcome to the QA show, which uh gets put up online every Friday. You may listen to it at another day, so or on another day, so that's why it's QA day. This is where you speak your questions into the ask a question form at talkingrealmoney.com using a mic. And then I take that question that you called in using a mic, and I actually enhance it digitally. And uh in fact, I'll give you an example later on. I'll start a question off the way it the way it came in and then enhanced. I think it's a later one, but I'm gonna do that a little later. So you send those in, and then I use them on a podcast that I put up on Friday, the QA podcast. That's this one. Hi, everybody. I'm Don McDonald, one of the two hosts of Talking Real Money, along with Tom. And uh our favorite thing to do is answer your questions. And we do that at talkingrealmoney.com on the ask a question button or the contact form. We also do it if you call in those questions at 855-935 Talk, 855-935-8255. So thanks for being a part of the program, and let's get to our very first question on what is really a busy day. A lot of questions came in, so I was able to load this one up with a few more. Here's the first one.

SPEAKER_08 1:37

Hello, Don. This is Jay from Dallas. I listen to about eight different financial podcasts, and when talking about waiting to take Social Security, I very rarely hear any of these broadcasts, including yourselves, talking about spousal benefits and how that might change the math. I'll take myself for example. My wife waited until her full retirement age and began collecting$900 a month. She will get a spousal benefit when I begin collecting. Her spousal benefit is based on 50% of my benefit at my FRA, whether I wait until my full retirement age or not. So I began to collect at 65, which is not my FRA, and her benefit increased from$900 to about$1,900 a month. That extra$1,000 a month changed our breake-even point as a couple by about two and a half years. Why do I not hear the spouse of benefit mentioned more often? Thank you.

SPEAKER_01 2:35

Well, probably because it's relatively complicated and individualized. So we would have to look at each individual circumstance. And it can make your break-even, as you found, change a little bit, but it's, as you also said, it's pretty slight. I mean, you're right. They can boost your income earlier and you know, move that breakeven point a bit. But the problem is when you claim early to trigger that spousal benefit, you're also now permanently reducing your own benefit and you're reducing your spouse's maximum benefit later on. And that can make a big difference, particularly if you go early and she switches to your benefit. She's going to be getting your lower 65 pre-FRA benefit. When if you waited until 70, she would get your full benefit, your full at age 70 benefit. So yeah, you can, it's it's kind of playing around at the edges. It's not a big, big thing, though, and that's why we don't mention it very often. Because we're big fans of waiting as long as you can to collect Social Security if you expect to have a long life. Yeah, it does, it might make a little difference, but it isn't enough for us to change our tune. Thanks so much for the question. And if you have one, send them in at talkingrealmoney.com. Just click on the ask a question button like this. Tom and Don.

Retirement Calculators: What to Look For

SPEAKER_06 4:05

Investor.gov points to Finra's ballpark estimator. Retirement calculator. Could you speak in general terms about what features to look for in a retirement calculator? And specifically, does this ballpark estimator have the features necessary to make a good calculation? Thanks.

Starting a Roth IRA at 45

SPEAKER_01 4:34

The FINRA calculator is a little basic, but I mean it's fine. It'll get you in the ballpark. And it's really fine. I'm I'm I've got no gripes. There are better tools. As a matter of fact, most advisory firms have really great tools that get into complex Monte Carlo simulations. That's when you're getting into a real financial plan and you pay for it. Probably the best one. There have been a couple of them I've looked at in the past. Umguard has a simple one, a pretty good one. Schwab has a pretty good one. They're pretty basic. Fidelity, I think they have a good one too. Uh, I looked at once, and I'm not a big fan of Empower as a place to get retirement help, uh, retirement planning help, but they do have a pretty robust retirement planner uh at Empower, the Empower retirement planner. And it it's free, but you have to give them your email information and then they'll start bugging you. Um there was another one. Oh, yeah. There are a couple of others. Uh, projection lab has the public version, and then if you want more, you can pay$100 a year. So there are some out there that are more robust, but the most robust you're going to get is probably with a true fiduciary fee-only advisor, because they can get into really complex Monte Carlo simulations. The other thing you might want to try, if you aren't expecting them to ask the questions and you're willing to kind of prompt it, is using a Chat GPT or a Claude or a Gemini or something, because they can do some kinds of Monte Carlo simulations. You might want to try them. But uh the ones that I mentioned, the free, the truly free ones, will give you a pretty decent basic idea of where you might want to be or where you might end up being in the future, where what you need to do to get there too. But for really specific stuff, someday you'll need an advisor for that. Thanks for your question. Let's go to the next one.

SPEAKER_04 6:42

Hello, Tom and Don. My name is Edgar. I'm in Texas, um, 45 years old. So I've kind of gotten into the financial and retirement uh game a little bit longer, uh, a little bit later in life, but the last few years, y'all have changed my financial future for the best. So I want to start off by saying thank you to that. Um, so my current situation is I do have a pension um through teacher's retirement. So that's my job. Um, about 15 years in, and so I'm hoping to probably at least do 20 and you know, maybe 25. So I'll be uh getting you know, drawing that pension in retirement. Uh I have a rollover IRA, which is about$60,000. Um, I just rolled it over into a self-directed chase. Um and then I have a brokerage account. Um, all of those are in a target date 2045 uh Vanguard. So that's what I have right now. But I guess my question is is that because the security, the pension, and then the IRA are gonna be taxable. Um, what I'm looking at doing is just kind of starting Roth, uh a Roth IRA, um, trying to max it out every year. And uh, so that's kind of my goal there. I do have a pretty nice size emergency fund, and it's just me. Um, I just kind of like to have a little bit of cushion there. It's in a brokerage account. So um, I mean again, my question is, you know, Roth IRA, start investing now in 45, that'd be 20 years. You know, my goal would be to max it out every year. Um, and then you know what funds you would recommend. I know you're uh you're a big Avantist uh guy, so uh kind of looked into that. Or if you what do you think if I just should just keep it in the Vanguard uh Target Date fund? Uh that way I don't have a lot of different accounts. Um, again, I do appreciate everything that y'all do. A little bit longer questions, so uh thank you very much and keep on doing the great work. You really do help a lot of people.

The Costly Past of Trading

SPEAKER_01 8:49

Wow, those those comments really mean a lot. Thank thank you so much for for appreciating what we're trying to do here. Uh at this point, you why make it more complicated than it needs to be? You could go with Avantus funds, you could go with an AVGE and add it in there or something, and that might give you a little bit more longer, might, might, but it complicates the process, and there's a lot to be said for keeping it easy, particularly earlier on. So I would not be opposed to you keeping it in that 2045. Maybe you go a little crazy and you go 2050, you know, if you want to be a little more aggressive, but 2045 is fine. Uh there's no real great reason except for the possibility of having a little higher return. And and that's a possibility, it's not a guarantee. Uh actually, it's a probability based on at least past data. But is it worth the effort? That's something only you can say. If it is, then you could throw an AVGE into the mix and you'd also keep that money in the Vanguard target date that's a little bit more broadly diversified and a little bit more conservative than going the other way. And I love the fact that you're doing both a pre-tax and a post-tax retirement account. Funding the Roth is really a smart move right now. Um because you're not probably not in the highest tax brackets as a teacher. So I think this is a great strategy. I commend you for doing it. Keep doing it because in the long run, doing it is more important than doing it exactly right. It's just the fact that you're saving and you're saving in good vehicles, and you're doing it with low-cost products. That makes all the difference. Thanks so much for your question and for listening and participating. And let's keep going with questions that came in through talking realmoney.com on the contact form or the ask a question button.

SPEAKER_02 11:01

Hi, Tom and Don. I was shredding old papers from my father who died years ago. I ran across some trade tickets from the year 2000 from his full service broker. I looked at 10 trades he made, and the average commission charge he paid was$242 per trade. His average trade cost total was about$25,000 per trade. He looks like quite the day trader for these few months that he was was making the trades, and now I think I know why he complained that he couldn't make good money trading stocks. He would hold them for a day or two or up to a few weeks and then sell them even if there was a small gain. Sometimes he would sell at a loss if he got nervous. Still had a commission each way in and out. My question, what happened to the firms that were making all this money on trades? Those guys had a gold mine. How the heck did they let eTrade or Americrade succeed? Somehow I couldn't convince my father back then that buying and holding low-cost mutual funds was the way to go. Thanks.

Sharing Wealth with Adult Children

SPEAKER_01 12:08

The real question is, how did the high commission, uh niche, very specialized brokerage business continue as long as it did without disruption? It was ripe for disruption and it finally got disrupted in a very big way. Nobody, nobody, well few, pay three-figure commissions anymore for anything. And smart people don't even day trade because finally people started paying attention to the evidence. There are fewer day traders, I believe, now than there have been. And that's because day traders don't make money. They just don't. Uh in the US, the numbers are somewhere between 80 and 90 percent of day traders, based on a number of different analyses, uh lose money in just a single year of trading. And of the winners, very, very, very few of those, of that twenty ten to twenty percent, sustain profitability over three to five years because it's a luck game. It's not a it's not a skill game. There was a there was a really detailed study done of day traders many years ago in I thought it was Korea, but it may have been I think it was Taiwan. And uh less than one percent, less than one percent showed profits after several years. And I think a similar study was done in in uh Brazil, and it was like three percent made money. And less than one percent. Look at this. This was an interesting number from that Brazilian study. Less than one percent of day traders made less than minimum wage for the time they spent day trading. So it it was a dumb idea. Your father learned it was a dumb idea. It was really good for the brokerage firms, though. And even today, at a few dollars a transaction, day traders are still really good for the brokerage firms. That's why Robinhood loves them. They want to convince you to day trade because it's good for Robinhood, not for you, for Robinhood. Questions can come in a variety of ways. You can call anytime, like on your phone, 855-935-Talk, or you can go to talkingrealmoney.com, click ask a question, and then speak the question in. They come to me for the Friday podcast or type them in, and then they go to Tom for all kinds of different podcasts through the week. So it can be the other four days if you type them or if you call 855-935 Talk. Let's get our next question.

SPEAKER_07 14:59

Hi there, Don. My wife and I are in our mid-60s and have done well living below means and investing the difference for 40, 45 years. What's your opinion on when, how, if to share our financial circumstances with our adult children, all of whom are very successful. I don't have huge concerns about their uh any kind of entitlement mentality creeping in. Um, but we do have uh an eight-figure net worth recently, cracking that number. And uh I played the role of financial gatekeeper for both my parents and in-laws, and that proved to be very helpful to them as well as helpful in handling estate matters after they all passed. So would love your opinion on this issue. Thanks.

AI Enhancements in Podcasting

SPEAKER_01 15:49

Aaron Ross Powell, this is another one of those questions that doesn't have an absolute answer. Uh in your you're very lucky because you have children in whom you can confide this information and who will very likely not let it go to their greedy heads. So you should probably just do it now. I mean, that that would be the best time. Do it now. Talk to them about it, show them what you have, give express your wishes, tell them what you need to have done with it. That's great. Uh because you you don't have a situation that might lead to interfamily rival, or sorry, intrafamily. You don't have a situation that is likely to lead to intrafamily rivalry and jealousy and greed. So you're in a great spot. But there are others, and you know who you are, who have kids that would. I mean, it's here's a dateline. There are cases where people learn their parents have a lot of money and they kill them. I mean that's really, really out there and rare, but there are degrees of greedy behavior. So I think each family needs to decide that based on their own situation. And then what you probably want to do, and you know who this kid is, you've got one who's going to take the lead. Every family has one who will take the lead. Maybe a second one who's there as a backup, but there are some who are just really well organized and capable of handling those affairs after you guys are gone or you're older, who ends up getting that power of attorney. Because you don't want four people if you have four kids, or three people if you have three kids making decisions by committee. They can have input, but somebody ends up having to make that final decision. So in your case, the time is probably right about now. This would be as good a time as any. Or a year from now, whatever that might be. But yeah, you're you're there, you know it, or you wouldn't have asked the question. Now, I want to show you something. This is a call that came in, a question that came in with really bad equipment and a really bad connection uh to the online venue. This is just to show you how much this AI system can clean up your question and make it sound really good. So here's the beginning of the question before I used this AI service uh called Waves Regen to fix it.

SPEAKER_03 18:28

Hey, Tom and Don. Thanks for continuing the podcast. My philosophy is that uh I own the whole stock market, so whenever I hear about an individual software.

SPEAKER_01 18:41

There that's the the quality as it came in. And I honestly I was going, I don't know that these guys can handle this one. This one I may not be able to answer because nobody will be able to understand it. It was hard to understand, right? I had a hard time understanding it and I listened multiple times. But here's what happened after I ran it through this AI repair program.

SPEAKER_05 19:02

Hey, Tom and Don. Thanks for continuing the podcast. My philosophy is that uh I own the whole stock market. So whenever I hear about an individual stock going for well, um, I know we're not supposed to listen to that and tune out that noise, but accidentally hear something, then I think I own the whole stock market itself. I own that stock and I'm doing this. Is that the right philosophy?

Philosophy of Owning the Market

Closing Thoughts and Next Steps

SPEAKER_01 19:30

Enki. The difference is night and day. It's astounding. I I don't know how they do it. I I truly don't know how they do it, but they took out all the noise, all the uh distortion, and and and it came out totally understandable, allowing me to answer the question which is yeah, absolutely. As a matter of fact, I've used that argument in multiple classes I've taught on this subject. Anytime you hear anybody talking about a hot stock, even strategy, the Bitcoin stock, if you own a total stock market portfolio, you own it. You already have it. It's in your portfolio, adding or subtracting whichever way it might go from your total portfolio. And you can't, you cannot try to own the best stocks because we've talked over and over again about a study done by uh Heinrich Bessenbinder at uh Arizona State University, a professor there, who found that less than 4% of all the stocks out there account for the vast majority of the stock market's gains. So, how would you ever pick whichever 4% or the best 4% that year? That's each year. You're not going to pick the best. You might get lucky and pick one of the best once in a while, but consistently picking the best is a game you can't win. You cannot possibly do it, which is why the evidence shows unequivocally that those who try to beat the market might succeed over the short run. A few might succeed just due to luck, but the vast majority eventually end up failing. And why bother? It's not worth it if the odds are you're going to eventually fail. And you are likely to eventually fail. It is a it is a fool's game. Own the whole thing. It's easy, and the whole thing has ended up returning over the last hundred years. I mean, owning all the entire global stock market has ended up returning on average in like around ten percent per year, depending on the period where you start, but about a hundred years. So is that good enough for you? Or do you need 20 or 30? If you need 20 or 30, then you've got to be willing to accept the risk of losing twenty or thirty or forty or fifty or more. So, yeah, owning the whole stock market is a very good strategy, and it does in fact mean you own all of the hot stocks that people are talking about. Well, thanks for being a part of the QA episode. I appreciate you. And we'll do it again about a week from now. If you call in some questions, which is easy to do. Go to talkingrealmoney.com, click on the ask a question button, and then click on the microphone button and record your question. Even if your equipment is terrible, even if it's gonna sound horrible, you think I'll fix it, as you just learned. Thanks for listening. And oh, by the way, if you need uh more detailed help, you need somebody to look over your portfolio and go, yeah, you're on the right track, nah, you're on the wrong track, without a high pressure sales pitch, which you're gonna get from almost everybody else, and a 100 fiduci 100% fiduciary look, just go to talkingrealmoney.com and click the button that says meet an advisor. You can meet with one of our advisors. You can even meet with Tom. And it's free. No obligation, no high pressure sales pitch. Seriously. Just go to talkingrealmoney.com with your questions or call them in at 855-935 Talk and please tell others about the podcast. We really do appreciate your referrals, and the more the merrier, really, because we want everybody to get this right, and therefore everybody should be listening to talking real money.

SPEAKER_09 23:53

The opinions and views expressed in this podcast were current on the date recorded. Opinions, estimates, forecasts, and statements of financial market trends that are based on current market conditions constitute our judgment and are subject to change without notice, including any forward-looking estimates or statements which are based on certain expectations and assumptions.

SPEAKER_00 24:07

Although information and opinions given have been obtained from or based on sources believed to be reliable, no warranty or representation is made as to their correctness, completeness, or accuracy.

SPEAKER_09 24:16

Information presented on the podcast is not personalized investment advice from Oppello Wealth. The views and strategies described may not be suitable for everyone. This podcast does not identify all the risks, direct or indirect, or other considerations which might be material to you when entering any financial transaction. Past performance does not guarantee future results, and profitable results cannot be guaranteed. We hope you realize that the information provided on Talking Real Money is for informational, educational, and hopefully enjoyable purposes only. The podcast is not trying to get you to buy or sell any financial products or securities. Instead, the program is provided as a public service by Apello Wealth, a fee-only registered investment advisor. Apellot Capital, LLC DBA Apello Wealth, is an investment advisory firm registered with the Securities and Exchange Commission. The firm only transacts business in the states where it is properly registered, or excluded or exempt from registration requirements. Registration with the SEC or any State Securities Authority does not imply a certain level of skill or training. Apello does not provide tax or legal advice, and nothing either stated or implied here should be inferred as providing such advice. Thanks for listening, and please visit talkingrealmoney.com for more information and important disclosure related to performance of any specific index or fund quoted in this podcast.