Two Things You Should NEVER Do, Ep #108

<p>I recently had a conversation with someone who retired a year ago. Sadly, his financial advisor gave him <em>the</em> <em>worst </em>advice I’ve heard in a long, long time. So in this episode of Retirement Made Easy, I’ll share why it was such poor advice and the two things you should <em>never</em> do. I’ll also answer a couple of listener questions at the end. Don’t miss it!</p> <h2>You will want to hear this episode if you are interested in...</h2> <ul> <li>[3:20] The worst retirement planning advice I’ve heard</li> <li>[10:11] Being armed with knowledge leads to confidence</li> <li>[11:14] Listener Question #1: Why can’t I roll over my 401k? </li> <li>[16:05] Listener Question #2: Why I won’t work with Wells Fargo </li> </ul> <h2>Never get a home equity line of credit to live on</h2> <p>I was talking with this prospective client about <a href= "https://retirementmadeeasypodcast.com/why-i-love-the-retirement-bucket-strategy-ep-24/" target="_blank" rel="noopener">the bucket approach</a> to retirement planning. The first bucket is your emergency fund (3 months to two years of liquid assets). The second bucket is dedicated to producing an income that will supplement your social security income. Bucket number three is your “growth” bucket. The cost of living and healthcare expenses will continue to grow. Bucket #3 helps you keep up with those costs.</p> <p>His financial advisor advised him—while the stock market is down—to get a home equity loan to draw the income he needed to live on for the next 2+ years. The goal was to spend the equity in the home and avoid dipping into bucket #2 to let it recover. This is <em>terrible</em> advice. I never recommend getting a home equity loan to live on. Why? Because bucket #2 is <em>designed to provide you income</em>. </p> <h2>Never get cash value life insurance to borrow money</h2> <p>It’s just as bad as using cash value life insurance to borrow the cash value. When you take a withdrawal, you’re taking a loan from your policy and paying the insurance company an interest