Bogleheads® on Investing Podcast 004 – Christine Benz, host Rick Ferri (audio only)

00:00:00.000 | [MUSIC]

00:00:10.000 | Welcome, everyone, to the fourth edition of Bogleheads on Investing.

00:00:15.000 | In today's episode, we'll be speaking with Christine Benz of Morningstar.

00:00:20.000 | Christine is a certified financial planner

00:00:24.000 | and is the director of personal finance at Morningstar.

00:00:28.000 | [MUSIC]

00:00:38.000 | Hello, everyone. My name is Rick Ferry.

00:00:40.000 | I am the host of Bogleheads on Investing.

00:00:43.000 | This podcast is brought to you by the John C. Bogle Center for Financial Literacy,

00:00:51.000 | a 501(c)(3) corporation.

00:00:54.000 | Today, our special guest is Christine Benz, who holds a certified financial planner certificate

00:01:00.000 | and is the director of personal finance at Morningstar.

00:01:04.000 | Christine has been with Morningstar for over 25 years.

00:01:08.000 | She started as an analyst and an editor.

00:01:11.000 | She serves as the director of Morningstar's mutual fund analysis

00:01:16.000 | and is the author of several books.

00:01:19.000 | So with no further ado, let's get to Christine.

00:01:23.000 | Today, we have with us Christine Benz, who is a Bogleheads favorite.

00:01:27.000 | I want to welcome you to our podcast, Christine.

00:01:30.000 | Thank you for being on the show.

00:01:32.000 | Well, Rick, it's my pleasure, and it's my pleasure to have gotten to know you

00:01:35.000 | through the great Bogleheads organization.

00:01:38.000 | Great. Thanks.

00:01:39.000 | I have a lot of questions for you today,

00:01:41.000 | and I'm looking towards you to be my go-to person for what to do year-end 2018.

00:01:50.000 | There's been a big tax law change that took place that affected a lot of things we do in 2018.

00:01:57.000 | The first thing I'd like you to do, if you could, is talk a little bit about the tax law changes,

00:02:02.000 | how it affects investors, and then what should we be doing this year,

00:02:08.000 | year-end tax planning, based on these tax law changes.

00:02:12.000 | Yeah, all good questions.

00:02:14.000 | There is a lot that is different about the tax laws for 2018 and beyond.

00:02:19.000 | The biggie I think probably affecting most investors is that many fewer of us will be itemizing our deductions

00:02:27.000 | than was the case in the past because we have a higher standard deduction.

00:02:31.000 | So if you're a single taxpayer, single filer, your standard deduction is $12,000 for 2018.

00:02:39.000 | It's $24,000 for married couples filing jointly.

00:02:42.000 | So that means that your itemized deductions may not exceed that standard deduction.

00:02:49.000 | So it feels a little weird.

00:02:51.000 | If you've been in the habit of making charitable contributions, as my husband and I have over the years,

00:02:56.000 | we've always got this file on our desk, whether we write a check or donate something to Goodwill,

00:03:01.000 | we put some supporting documentation in that file.

00:03:04.000 | Well, it's kind of weird knowing that our tax advisor has told us that we probably will be

00:03:09.000 | standard deduction people this year that we're not necessarily having to keep that paperwork.

00:03:15.000 | So that's a really big thing and a big change.

00:03:18.000 | You have heard it mainly in the context of charitable contributions.

00:03:22.000 | I think that's true because I've done the same thing.

00:03:25.000 | I've looked at my taxes for 2018 and I've said I'm going to be doing standard deduction.

00:03:30.000 | I know I have a small mortgage payment on my home.

00:03:33.000 | I make charitable contributions, but it's not going to add up to $24,000.

00:03:38.000 | My medical expenses, because I'm a military retiree, are pretty much paid for.

00:03:43.000 | So I look at, you know, will I even get to $24,000 with the property tax on my home and such?

00:03:50.000 | And the answer is no.

00:03:51.000 | So I've stopped keeping track of charitable contributions as well.

00:03:55.000 | I go to Salvation Army with a box of things and they say to me, "Do you want a receipt?"

00:04:00.000 | And now I say no.

00:04:02.000 | I can't stop saying yes for some reason and I'm still keeping them, but I think it's just sort of --

00:04:08.000 | I'm just so anchored on the ways of doing things.

00:04:10.000 | Another big thing related topic is that there's now this cap on state and local tax deductions, which includes the property tax.

00:04:20.000 | So if you were in the past in excess of $10,000 in all of those deductions, well, you could deduct them.

00:04:28.000 | Now there's a $10,000 cap on how much you can deduct in state and local taxes, including property taxes.

00:04:35.000 | So that's kind of a blow for folks like me in a state where we do have --

00:04:40.000 | or certainly in an urban area where we have very high property taxes.

00:04:45.000 | Those will be capped at $10,000.

00:04:47.000 | So that'll put a lot more folks into that standard deduction camp as well.

00:04:53.000 | So aside from deductions, I mean, what other things should we be thinking about when it comes to year-end tax planning?

00:05:00.000 | Well, one thing I would point out before we leave this whole idea of deductions is seniors who are taking required minimum distributions from their IRAs

00:05:09.000 | have a nice way of still being able to get a tax benefit from charitable contributions,

00:05:15.000 | and that's by using what's called a Qualified Charitable Deduction, or QCD.

00:05:21.000 | And the basic idea there is that you send a portion of your required minimum distribution directly to the charity of your choice.

00:05:30.000 | And I always advise people to have their investment provider, whether it's Vanguard or Schwab or whatever,

00:05:37.000 | work directly with the charity of their choice or the charities.

00:05:41.000 | It doesn't need to be just one to enact this Qualified Charitable Distribution.

00:05:46.000 | But the beauty of that strategy is that the amount that you steer to charity through this QCD, it doesn't affect your adjusted gross income.

00:05:56.000 | So it's as if you never took the income.

00:05:59.000 | And the beauty of lowering your adjusted gross income is that you are eligible for more credits and tax deductions than you otherwise would be.

00:06:08.000 | So it's very advantageous, even if you're not a high roller in terms of making charitable contributions,

00:06:14.000 | even if you're just, you know, making a $500 contribution per year, or if you're a very large contributor,

00:06:21.000 | send it through that QCD if you're subject to RMD.

00:06:25.000 | So that's one point I would make on that front.

00:06:28.000 | Let me get some clarification on that because I've always been a little bit confused.

00:06:32.000 | So I haven't paid taxes on the money that's in an IRA.

00:06:35.000 | So let's say I've got $500,000 in my IRA, and I'm over the age of 59 1/2.

00:06:42.000 | By the way, do I have to be over the age of 59 1/2 to do this?

00:06:46.000 | You have to be over the age of 70 1/2 to do this.

00:06:50.000 | So you can start pulling your money from your IRA once you're post 59 1/2.

00:06:55.000 | But you have to be subject to required minimum distributions, which kick in at age 70 1/2 to be able to take advantage of this QCD.

00:07:03.000 | So unfortunately, Rick, I think you've got a little bit of time before you can take advantage of this maneuver.

00:07:10.000 | But folks who are subject to RMDs can take advantage of it.

00:07:13.000 | So that's the key. That's the key I didn't understand.

00:07:15.000 | I have to be subject to the required minimum distribution.

00:07:18.000 | And then let's say instead of taking $50,000 out and paying taxes on the $50,000,

00:07:27.000 | I could have, say, $10,000 of that go directly to the charity.

00:07:32.000 | The charity would get $10,000. I would not have to pay taxes on that $10,000.

00:07:37.000 | Exactly right.

00:07:38.000 | And then I only have to take out $40,000. That's a great deal.

00:07:42.000 | That's right. It is a great deal.

00:07:44.000 | So it's something that people who are very charitably inclined to making huge contributions should take advantage of as well as smaller donors.

00:07:51.000 | It's really a no-brainer.

00:07:53.000 | So it's a way to earn a tax win in this era where many fewer of us will be able to get a deduction from our charitable contributions,

00:08:03.000 | which is not to say you shouldn't be charitable, but just that you'll probably get less bang from your charitable contributions.

00:08:09.000 | One point I would make, though, is I've been hearing a lot about this concept of what's called charitable clumping or charitable clustering.

00:08:17.000 | And the basic idea is if you aren't able to take advantage of this qualified charitable distribution because you're too young,

00:08:25.000 | you can potentially aggregate your charitable contributions into a single year and deduct them in that year.

00:08:34.000 | So when you think that you will make a lot of charitable contributions, you will be over that standard deduction threshold.

00:08:41.000 | So that's an idea to consider rather than making a lot of smaller contributions.

00:08:47.000 | Maybe save them for a single year when your itemized deductions will exceed that standard deduction.

00:08:53.000 | Or save them until you're 70 and a half.

00:08:56.000 | Right. Or you could use a donor-advised fund, too, for this purpose.

00:09:01.000 | Vanguard offers donor-advised products, but the idea is that you could steer your charitable contributions into that donor-advised fund.

00:09:11.000 | Maybe take advantage of this bunching strategy where you're making a sizable contribution in a single year.

00:09:19.000 | And the beauty of the donor-advised fund is that the money does not have to get doled out to charity all in one go.

00:09:26.000 | That you can actually take your time to distribute it over a period of years.

00:09:31.000 | Do your due diligence on the quality of the charities and so forth before you actually make the contribution.

00:09:37.000 | So those are very neat tools for people who are charitably inclined and not subject to RMVs.

00:09:44.000 | And as with all taxes, consult your tax advisor first.

00:09:48.000 | Absolutely.

00:09:49.000 | Could you talk a little bit about health care and how that works into this new 2018 tax law?

00:09:58.000 | Well, the biggie there is, again, it gets back to deductibility.

00:10:03.000 | So many fewer taxpayers will be deducting their health care costs because they will not be in excess.

00:10:12.000 | Their itemized deductions will not exceed the standard deduction.

00:10:16.000 | So there again, if people have some latitude to maybe delay procedures or speed up procedures,

00:10:24.000 | elective medical procedures, and try to bunch them into a single year,

00:10:30.000 | perhaps that same year where they make sizable contributions and will be deducting, doing itemized deductions,

00:10:36.000 | that can be a good strategy.

00:10:38.000 | I think that's another area to get some tax advice.

00:10:41.000 | Of course, it can be difficult to really time your health care costs.

00:10:46.000 | A lot of these things are out of our control.

00:10:48.000 | But if you do have procedures where you know you'll have high out-of-pocket costs

00:10:52.000 | and you can potentially aggregate them into a single year when you'll be an itemizer, that can be a good strategy.

00:10:59.000 | One other area that I'd like to talk about before we get into investing is the cash flow out of your portfolio.

00:11:06.000 | If you're retired and you're taking or you need to take money from your portfolio, you've got IRAs,

00:11:12.000 | you've got personal accounts, you've got Roth accounts.

00:11:15.000 | Could you give us some guidance on how the tax law changes have affected that strategy?

00:11:21.000 | Well, I think the general rules of the road still hold up where when you think about tax-efficient withdrawal sequencing,

00:11:29.000 | you generally want to think about spending taxable assets first because they have fewer long-term tax benefits associated with them,

00:11:38.000 | followed by tax-deferred accounts, which have some tax benefits so you want to hang on to them perhaps a little bit longer,

00:11:45.000 | followed by Roth IRA accounts, which you usually put in the save-to-later camp

00:11:51.000 | because they have the greatest tax benefits associated with them and they're also the best assets for your heirs to inherit.

00:11:59.000 | So typically, we would put them last in the withdrawal queue.

00:12:03.000 | And I think that that strategy generally still makes sense.

00:12:07.000 | Of course, if you're subject to required minimum distributions, you have to put those in the front of the queue,

00:12:12.000 | the traditional tax-deferred account RMDs, because if you don't take them, you'll pay a big penalty.

00:12:18.000 | So I think that that general calculus still makes sense under the tax laws.

00:12:24.000 | There are a couple of neat things, though, that people can think about holding significant taxable accounts.

00:12:32.000 | So people who are in a temporarily or maybe permanently low tax bracket.

00:12:38.000 | So for 2018, that's single filers who are earning less than $38,600

00:12:44.000 | or married couples filing jointly who are earning less than $77,200.

00:12:51.000 | People in that tax range or below can actually take advantage of what's called tax gain harvesting.

00:13:00.000 | And this strategy basically entails that if you have these appreciated holdings on your books,

00:13:06.000 | if you have positions in your taxable accounts that have appreciated since purchase,

00:13:11.000 | you can sell them and even rebuy them the next day because there's no wash sale that applies to appreciated securities.

00:13:20.000 | You can sell them and essentially wash out the tax burden associated with those securities.

00:13:28.000 | So if for whatever reason taxes go up or if you are in a higher tax bracket in the future than you are today,

00:13:35.000 | you can wash out the tax burden associated with the securities.

00:13:41.000 | And this is the part that I forgot to mention. You're in the zero percent bracket for long term capital gains.

00:13:46.000 | So you won't owe any taxes on having made that change. So that's a neat strategy to consider.

00:13:53.000 | Let's get into more investment side of this.

00:13:55.000 | And one thing I want to talk about is the difficult year for active funds,

00:14:04.000 | not only because the performance has not kept up with the indexes,

00:14:09.000 | but also because active funds tend to distribute their embedded capital gains as they turn over their portfolio.

00:14:17.000 | So it appears that we're going to have a year where the funds lost money and people are going to have to pay taxes on distributions.

00:14:28.000 | It's a double whammy. I have been tracking these mutual fund capital gains distributions for us just because I think maybe no one else wanted to do it.

00:14:36.000 | But it's been really eye opening to see that in a year like 2018,

00:14:41.000 | where not only have many active funds underperformed, but many funds have losses or at least some funds have losses.

00:14:49.000 | And yet we're seeing these huge capital gains distributions because we're seeing redemptions on active funds.

00:14:56.000 | So investors are fleeing active funds.

00:14:59.000 | That means that the managers are having to sell securities to pay off departing shareholders.

00:15:06.000 | That leaves a smaller base of shareholders who are holding the bag and left to pay taxes on the distributions.

00:15:14.000 | It's been kind of a terrible spiral for people in active funds where they have had to pay capital gains taxes for several years running,

00:15:25.000 | including in 2018, where we've had kind of a volatile to lousy market year.

00:15:30.000 | So this does illustrate one of the issues with actively managed funds where you have higher turnover,

00:15:39.000 | where you can see these big distributions come at a time that isn't especially opportune.

00:15:45.000 | It wasn't such a big deal in the year like 2017. The market was great.

00:15:49.000 | I think many investors, while they might not have loved paying taxes on the distributions,

00:15:54.000 | they at least had strong returns to show for themselves. But in 2018, it's kind of slim pickings on the return front.

00:16:01.000 | And investors are going to be getting sacked with these huge capital gains bills.

00:16:07.000 | So let's explore this a little bit. You know, we talk about this thing called asset location,

00:16:12.000 | where you want to take your less taxable assets and put them in your personal account, like municipal bonds.

00:16:20.000 | Right. And index funds. And index funds. Right, exactly.

00:16:24.000 | And more taxable assets, the ones that you'll have to pay taxes on, like corporate bonds, into your retirement account.

00:16:34.000 | But now we can actually go a step further.

00:16:37.000 | If you have actively managed equity funds and you have index funds, index stock funds,

00:16:44.000 | you have a combination, call it Coren Satellite or Coren Explorer, whatever you want to call it.

00:16:50.000 | And I don't hear a lot of people talking about this, but from a tax location perspective,

00:16:55.000 | it seems better to put those actively managed funds, equity funds,

00:16:59.000 | if you're going to have them in your IRA accounts and put your index funds in your taxable accounts.

00:17:05.000 | Does that make sense? Absolutely. That's that's such good advice, Rick.

00:17:10.000 | And another related point I would make is you don't have to go out of your way to own tax inefficient funds in your tax deferred account.

00:17:20.000 | So just because you're getting a tax break doesn't mean that you need to own actively,

00:17:24.000 | actively managed funds there, that if you like index funds,

00:17:28.000 | you can just as easily own them in your tax deferred accounts and you're not really giving anything up.

00:17:34.000 | So I think that is really important concept, asset location, what you're putting where.

00:17:40.000 | I would say individual stocks are another place. If to the extent that you own individual stocks,

00:17:46.000 | taxable accounts are generally a good place to house them because you have more control over capital gains realization

00:17:54.000 | than you do with a fund where you get that distribution, whether you have sold a share or not.

00:18:00.000 | In the case of individual stocks, the only way you are going to trigger some sort of a capital gain situation is if you yourself sell.

00:18:08.000 | Well, let's talk about that, too, because now we can differentiate the difference between using mutual funds,

00:18:14.000 | open and mutual funds and exchange traded funds.

00:18:18.000 | Exchange traded funds are more like an individual stock where you don't get taxed until you sell the fund because ETFs,

00:18:28.000 | given the way that they are managed and they're created and redeemed, there's very little,

00:18:34.000 | if no capital gain distributions from an exchange traded fund. Now, there's a lot of caveats around that,

00:18:41.000 | but I'm talking about seasoned ETFs versus opened and mutual funds where you could have capital gain distributions.

00:18:51.000 | And that even includes index funds as well.

00:18:54.000 | It does, except I would say that, in my opinion, Vanguard's index funds are a notable exception

00:19:02.000 | and that the ETFs are share classes of the index funds.

00:19:05.000 | So in practice, Vanguard's equity index funds have been quite tax efficient alongside their ETF counterparts.

00:19:15.000 | But that's an exception. Generally speaking, you're right.

00:19:18.000 | I think that ETFs are a better mousetrap from the standpoint of limiting taxable capital gains than our index mutual funds.

00:19:28.000 | So if you really want to solve for this capital gains distribution situation,

00:19:34.000 | the best way to do it is to gravitate toward some type of an ETF.

00:19:39.000 | A key caveat I would make is that the income distributions, dividend distributions are not solved for with the ETF format,

00:19:47.000 | that you still will owe taxes on those income distributions as they're made.

00:19:52.000 | So it's not something that you can necessarily get away from entirely by being inside the ETF wrapper.

00:19:59.000 | And by the income distributions, you mean dividends and interest income that comes off of the securities that are in the account.

00:20:05.000 | That's right.

00:20:06.000 | As opposed to capital gains that are created within a mutual fund.

00:20:10.000 | That's right. The ETF doesn't provide you any shield against receiving those distributions and owing taxes on them.

00:20:17.000 | So even if you're reinvesting them, it doesn't matter.

00:20:19.000 | You'll still owe taxes if you own the holding within a taxable account.

00:20:24.000 | Christine, I want to shift now to portfolio management because you have a rather unique view on portfolio management strategy.

00:20:35.000 | And it's called the bucket approach. And you've written a lot about this.

00:20:39.000 | First of all, could you explain what it is? And then we can get into some questions about it.

00:20:44.000 | Sure. I always take pains, first of all, to say that I did not invent this idea.

00:20:50.000 | The person who was most influential to me in terms of wanting to work on this bucket strategy and talk about it to investors was Harold Davinsky, the financial planner in Coral Gables.

00:21:01.000 | And Harold told me probably 12 years ago that this bucket strategy was one that he used with his clients.

00:21:09.000 | And basically, the idea was he would manage a long term portfolio for them.

00:21:15.000 | And then he would bolt on this cash bucket, which would encompass maybe one to two years worth of the client's living expenses.

00:21:25.000 | And that money would not be invested in the market, but would be held separately.

00:21:31.000 | And the idea, even though perhaps it did not deliver an absolutely optimized portfolio result because the portfolio wasn't fully invested,

00:21:41.000 | but the basic idea was that the clients, knowing that they had a couple of years worth of their living expenses set aside in cash,

00:21:50.000 | kept them on board with the long term plan because they knew that disruptions in their cash flows wouldn't cause them to stop being able to go out to dinner

00:22:01.000 | or they'd have to really cut back on their food budget or whatever the things that qualified or constituted quality of life for them.

00:22:10.000 | They knew that those assets were safeguarded.

00:22:13.000 | So that was the simple bucket concept that Harold talked to me about.

00:22:18.000 | And I've expanded on it in my work where I've talked about using a three bucket strategy where you have that cash bucket and you're there.

00:22:27.000 | You're just thinking about, well, how much in portfolio withdrawals will I need over the next couple of years to maintain my standard of living?

00:22:36.000 | And then stepping out from there on the risk spectrum.

00:22:39.000 | So for the next, say, eight years worth of portfolio withdrawals, well, there you're taking more risk with the money,

00:22:47.000 | with the expectation that you'll earn a higher return and you are stepping out on the risk into short and intermediate term high quality bonds,

00:22:57.000 | mainly with that portion of the portfolio.

00:23:00.000 | So the idea is that you have enough set aside with that cash bucket plus the second bucket,

00:23:06.000 | which is primarily high quality, short and intermediate term bonds that you could encounter Armageddon with the equity.

00:23:14.000 | So stocks could go down and stay down for a good long time, for as long as a decade.

00:23:20.000 | And yet you'd still have more or less stabilized your standard of living through that front end of your portfolio being in high quality instruments and cash,

00:23:32.000 | which is not to say that people will necessarily spend from their portfolios in precisely that that sequence.

00:23:41.000 | So you won't necessarily blow through your cash holdings and then move on to the short and intermediate term bonds.

00:23:46.000 | But in a worst case scenario where you encounter that terrible equity market environment right when you embark on retirement,

00:23:54.000 | that's what I think this bucket strategy nicely solves for.

00:23:58.000 | Let me throw out an example.

00:24:00.000 | So I've got two million dollars and I need to withdraw from that fifty thousand dollars a year to live the lifestyle I want to in retirement.

00:24:11.000 | Add that to Social Security and maybe some pension money and that gives me enough.

00:24:16.000 | So I pay my bills and I can live the lifestyle I want.

00:24:19.000 | I would put, say, a hundred thousand dollars in a money market fund or maybe a CD or something very, very secure, very safe.

00:24:29.000 | And that is my two years worth of living expenses that is set aside.

00:24:34.000 | In addition to that, I would put another, say, eight years of money or four hundred thousand dollars into intermediate term bond fund.

00:24:46.000 | That, you know, good quality, high quality intermediate term bond fund.

00:24:51.000 | So that's another eight years worth of money that's there.

00:24:56.000 | So that's a total of 10 years worth of money.

00:24:59.000 | And then I would have.

00:25:00.000 | Exactly right.

00:25:01.000 | I would be free if you think about it that way.

00:25:03.000 | That's only.

00:25:05.000 | Five hundred thousand dollars.

00:25:07.000 | So I could, using the bucket approach, justify putting.

00:25:13.000 | The other one point five million or 75 percent of my assets into equities.

00:25:20.000 | Correct.

00:25:21.000 | Exactly right.

00:25:22.000 | And that's the that's what I love about this strategy, Rick, is that I think it helps people take something like asset allocation, which frankly, I think can be incredibly black boxy.

00:25:33.000 | And it helps them back into, well, what is the same asset allocation given my spending from my portfolio?

00:25:42.000 | And so in the in the case that you just discussed, where you've got someone who's using quite a modest withdrawal rate, the net effect of that is that the portfolio is quite aggressively positioned.

00:25:54.000 | So a big related caveat is, is that person going to be reasonably comfortable with the gyrations in the long term portfolio and the equity piece of the portfolio?

00:26:05.000 | So even knowing that the money having that having 10 years worth of portfolio withdrawal set aside may not provide all the peace of mind that everyone needs to be comfortable with such an aggressive asset allocation in retirement.

00:26:18.000 | But I like it in that it does help people get in the right ballpark of what their asset allocation should look like in retirement.

00:26:26.000 | And the other key thing I like about it is that behaviorally, I think it makes sense.

00:26:31.000 | So you kind of see the light bulb go off with people that if you have a 10 year runway of relatively safe investments to spend from, you should be able to put up with market volatility like we've had so far in 2018 or even worse.

00:26:49.000 | So it should help you stay in your seat with whatever asset allocation mix you've decided makes sense for you.

00:26:56.000 | And this whole idea ignores the income that's actually coming in from that $2 million.

00:27:02.000 | I've got the $100,000 in CDs, which might be yielding maybe $3,000 in income at 3%.

00:27:10.000 | Then I've got intermediate term bonds that's let's say I get 4% off of that.

00:27:16.000 | And that would be on $400,000, that would be another $16,000.

00:27:20.000 | It's almost $20,000 right there.

00:27:22.000 | And then I've got $1.5 million in equity, which is yielding 2% in dividends.

00:27:28.000 | So that's another $30,000.

00:27:30.000 | And pretty much my $50,000 a year is coming in from cash flow from the portfolio.

00:27:36.000 | That's such a good point that this bucket one, the idea is that you're spending from it as the years goes by.

00:27:44.000 | So you've got to find a way to refill it.

00:27:46.000 | And I love the idea of people doing exactly what you're talking about where that bucket one, the cash bucket,

00:27:51.000 | it's kind of organically getting refilled throughout the year from these income and dividend distributions as they occur.

00:27:59.000 | And then say if there's an additional need above and beyond what's organically being generated through these income distributions,

00:28:07.000 | then perhaps you can do some rebalancing.

00:28:09.000 | So you definitely have to have a plan for refilling that bucket one,

00:28:13.000 | because the last thing you'd want to do is sort of come through year two of retirement

00:28:17.000 | and find that you haven't done anything to refill that bucket one.

00:28:21.000 | You need to have a strategy in place for keeping this whole thing up and running.

00:28:25.000 | It won't manage itself.

00:28:27.000 | But the income distributions for most retirees get them at least halfway or maybe even more to whatever withdrawal they're seeking from their portfolio.

00:28:38.000 | Are you physically setting up three separate accounts?

00:28:41.000 | How does that work?

00:28:44.000 | I don't think you need to.

00:28:45.000 | I think you could easily just hold a single account.

00:28:48.000 | But it does get more complicated because most of us are bringing necessarily multiple accounts into retirement, right?

00:28:56.000 | So we might have Roth accounts.

00:28:58.000 | We might have our company retirement plan assets, which might be all traditional tax-deferred.

00:29:04.000 | We might also have a taxable account.

00:29:06.000 | So it's not quite as simple as it seems at first blush when we talk about this three-bucket system,

00:29:12.000 | because you are sort of overlaying the bucket strategy over whatever accounts that you have to maintain because of your tax situation.

00:29:23.000 | It gets a little more complex.

00:29:24.000 | But I don't think you need to set up three separate accounts for each bucket.

00:29:29.000 | I think that that's probably unnecessarily cumbersome.

00:29:32.000 | I like the word you used, an overlay, because to me that's a great way of presenting it because you've got all this stuff underneath.

00:29:42.000 | You've got Roth accounts, IRA accounts.

00:29:44.000 | You've got 401(k), maybe rollover IRAs, traditional IRAs.

00:29:48.000 | You've got trust account.

00:29:50.000 | You've got all this stuff, all these different accounts.

00:29:52.000 | If you've got a married couple, you might have all of that stuff times two.

00:29:56.000 | So it's not as simple as just three buckets, unfortunately.

00:30:00.000 | And then the asset location portion of it, these types of securities go better in these accounts,

00:30:05.000 | and those types of securities go better in those accounts.

00:30:08.000 | So you've got all this stuff.

00:30:10.000 | And to be able to put a simple overlay over the top of it where using the bucket approach and saying,

00:30:18.000 | really, this is what you've got from a very simple standpoint, you've got three buckets.

00:30:22.000 | You've got this one, this one, and this one.

00:30:24.000 | Yes, within the buckets, there are things everywhere within each bucket, perhaps.

00:30:29.000 | But really, this is what you've got, one, two, three.

00:30:32.000 | I think that would be very comforting for a lot of people.

00:30:35.000 | I think it is.

00:30:36.000 | And another point I would make on this topic is from a practical standpoint,

00:30:40.000 | many of us are coming into retirement with most of our assets in traditional tax-deferred accounts.

00:30:46.000 | And so by the time we hit 70 and a half and we're subject to required minimum distributions,

00:30:51.000 | it's a good bet that those withdrawals that we have to take from that account are going to meet most of our living expenses.

00:31:00.000 | So I think for most people, if they want to think about enacting a bucket strategy,

00:31:05.000 | concentrating on those traditional tax-deferred accounts is a good place to do it,

00:31:10.000 | because by the time you hit 70 and a half, most of your withdrawals will probably be coming from those accounts anyway.

00:31:16.000 | Very good information.

00:31:18.000 | I want to ask a question here about hiring an advisor to do this for you.

00:31:24.000 | What are your views on hiring an advisor to do this?

00:31:27.000 | Yes, the more I focus on retirement planning, the more I am convinced that this is an area where most investors would benefit from some element of professional advice.

00:31:39.000 | So as much as I try to write about retirement planning concepts and do it in a straightforward and easy-to-digest way,

00:31:47.000 | there are just so many moving parts to all of this, and it also requires a certain amount of comfort with tax matters.

00:31:55.000 | So I do think that most people would benefit from at least some element of advice.

00:32:01.000 | So I would say for the super-comfortable, sort of the bogal-head super-users,

00:32:07.000 | maybe it's just a check on their plan with a good hourly certified financial planner,

00:32:13.000 | where you just kind of say, "Well, here are the assumptions I'm making. Here's the withdrawal rate I'm looking at."

00:32:19.000 | Just get another set of eyes on your plan.

00:32:22.000 | And another advantage of hooking up with someone like that is that you have someone who can serve as kind of a receptacle for all of your information.

00:32:30.000 | So they're sort of a backup source for what accounts you have.

00:32:35.000 | If something should happen, you've got sort of a backup plan in place.

00:32:39.000 | So I think that that is just sort of a baseline type of advice that I think almost anyone embarking on retirement should consider.

00:32:49.000 | If someone feels like they need more hand-holding and more ongoing advice,

00:32:54.000 | maybe they have something really complicated going on, perhaps a family business or something like that.

00:33:00.000 | Perhaps paying someone in a different way where you're paying ongoing advice,

00:33:06.000 | either through some type of a retainer fee or a fee that is based on your assets under management, that might be money well spent.

00:33:15.000 | So it's very individual-dependent, but I do think that most people would benefit from some type of advice.

00:33:21.000 | And I would use myself as an example.

00:33:24.000 | There are a couple of areas where my husband and I just felt like we needed a little extra help.

00:33:29.000 | One was in a tax issue, and the other was in relation to long-term care insurance, whether we should buy it,

00:33:35.000 | whether we had assets to support ourselves for long-term care, whether we needed the insurance.

00:33:40.000 | So we sought out an hourly advisor this past summer, and it was a tremendously beneficial relationship.

00:33:47.000 | It was not cheap, I will say that, and writing the check for service is definitely something that you feel viscerally

00:33:55.000 | when you write the check for that advisor.

00:33:58.000 | But for us, it was money well spent, and I think many individuals could benefit from some type of advice.

00:34:04.000 | I also think it's crucial to distinguish between whether you're looking for financial planning guidance

00:34:10.000 | or whether you want investment advice.

00:34:13.000 | A lot of people, I think, embark on some sort of a quest for advice without really being clear about where their need is.

00:34:21.000 | So I think that introspection, sort of stepping back and saying, "Where are the areas where I'm super comfortable?

00:34:27.000 | Where are the areas where I'm less comfortable?" I think that's a necessary step, too.

00:34:31.000 | I've used financial planners, and I've used tax planners personally as well.

00:34:37.000 | I don't have knowledge about the various health care plans.

00:34:41.000 | Before I went on the military TRICARE system, I had to buy my own insurance.

00:34:46.000 | So I use the services of a financial planner to help me ferret out what's available and what's not available.

00:34:52.000 | Same thing with tax planning.

00:34:54.000 | I pay a tax consultant to help me with my taxes above and beyond doing my taxes.

00:35:01.000 | So we, the people in the investment industry or in the financial services industry,

00:35:07.000 | use a lot of the same people that we're recommending people out there use.

00:35:12.000 | Right. You definitely want your portfolio manager to be conversant in tax matters and planning matters,

00:35:19.000 | but it's very rare to find someone who does all of those things.

00:35:24.000 | So I think it's important to identify where your potential issues are

00:35:28.000 | and make sure you're seeking out the right type of advice.

00:35:32.000 | Christine, I put a post up on bogleheads.org that I was going to be speaking with you,

00:35:38.000 | and I asked people for their input if they had questions for you, and I got a number of responses.

00:35:43.000 | I'm going to go over some of those questions now.

00:35:46.000 | Some of them are a little bit of what we talked about already,

00:35:50.000 | and maybe you can elaborate on them, and others are new.

00:35:55.000 | So the first question I had was about aging parents,

00:36:00.000 | and there are those of us who are dealing with our aging parents or becoming aging parents ourselves.

00:36:08.000 | What specific financial advice can you offer people who have aging parents or they're becoming aging parents?

00:36:16.000 | And I have to tell you, I'm right there in the middle of this right now with my parents.

00:36:20.000 | My mother is in her late 80s, and my father is in his early 90s,

00:36:24.000 | and we're right in the middle of that.

00:36:26.000 | What words of wisdom can you give us about aging parents?

00:36:30.000 | Yeah, this is something I've talked about at the Bogleheads conference.

00:36:34.000 | I was the youngest of six girls and actually always loved having older parents

00:36:40.000 | because they were so battle-tested.

00:36:42.000 | They really had seen it all.

00:36:44.000 | They'd been through it all, and they were very laid-back, fun parents and great friends.

00:36:48.000 | I could not have adored them more.

00:36:51.000 | And I had the great good fortune of living very close by and seeing them through their last years.

00:36:59.000 | My dad passed away in 2014 and my mom in 2016.

00:37:03.000 | And so there are so many different dimensions of caring for aging parents.

00:37:08.000 | There's just a hands-on dimension for some of us who are our family's first responders

00:37:14.000 | where we're doing kind of basic blocking and tackling for the second household

00:37:19.000 | in addition to our own, where we're making sure that the grocery shopping gets done

00:37:24.000 | and that our parents should still be driving cars and all of that kind of stuff.

00:37:29.000 | And then there's the whole aspect of watching their finances.

00:37:33.000 | The story I sometimes tell is of my own mom and dad who I think had been advised

00:37:37.000 | to not purchase long-term care insurance.

00:37:40.000 | And ultimately they didn't run out of money, but they did need long-term care

00:37:45.000 | toward the end of their lives where my dad developed dementia

00:37:49.000 | and had in-home caregivers for several years.

00:37:52.000 | And then we ultimately moved him to a facility for care.

00:37:56.000 | But in the meantime, my mom had more physical ailments,

00:38:00.000 | and she needed full-time in-home caregivers.

00:38:03.000 | So for a period of time, we actually had the two situations going

00:38:07.000 | where we were paying for the care in the facility as well as paying

00:38:11.000 | for the 24-hour caregivers at home for my mom.

00:38:14.000 | And as you can imagine, that gets very costly in a hurry.

00:38:18.000 | So I guess one thing I gleaned from that is when you hear of sort of these

00:38:23.000 | one-size-fits-all asset thresholds, that if you have $2 million,

00:38:27.000 | you don't need to worry about self-funding long-term care

00:38:31.000 | or you don't have to worry about purchasing insurance for long-term care.

00:38:34.000 | I think that's an open question.

00:38:36.000 | It depends on how much you're spending from your portfolio,

00:38:40.000 | from when you're well.

00:38:42.000 | It depends on variables like the ones I just discussed,

00:38:46.000 | where if you're part of a married couple, both of whom need long-term care,

00:38:50.000 | that that can be very costly as well.

00:38:53.000 | So helping parents oversee their finances later in life is a challenge.

00:38:59.000 | If you don't feel like you're -- if you're someone who's watching your parents

00:39:03.000 | and trying to help but don't feel like you can give that the hands-on attention

00:39:07.000 | that it needs, helping them identify a financial advisor who can work with them

00:39:12.000 | I think is a great service that you can provide as an adult child of aging parents.

00:39:17.000 | I often speak to groups of people who love overseeing their portfolios.

00:39:24.000 | They're really into their investments.

00:39:27.000 | It's a hobby for them.

00:39:29.000 | Oftentimes they're the main person in their household who's interested

00:39:33.000 | in this particular hobby.

00:39:36.000 | They've got a spouse perhaps who isn't at all interested.

00:39:39.000 | So I always tell people that they need to develop some sort of backup plan

00:39:43.000 | in case they can't manage their money themselves.

00:39:47.000 | I always think about how I was my dad's sort of de facto backup plan

00:39:52.000 | because he and I had always talked about investments.

00:39:54.000 | He was the person who got me interested in investments in the first place,

00:39:58.000 | and I was there to oversee his investments.

00:40:01.000 | I was on all of his accounts and could watch what was going on.

00:40:05.000 | But if you don't have an adult child or a spouse who's particularly interested

00:40:10.000 | in financial matters, I think having a financial advisor is particularly --

00:40:15.000 | especially appropriate in that situation as well.

00:40:18.000 | Let me speak to that because I've been an advisor for 30 years.

00:40:22.000 | That relationship with the advisor has to be solidified,

00:40:27.000 | has to take place before there's an issue where the person who is managing

00:40:32.000 | the portfolio can't manage it anymore or isn't around to manage it anymore.

00:40:37.000 | The relationship with the advisor has to already be in place,

00:40:41.000 | and I'll tell you why.

00:40:42.000 | I have had a countless number of people come up to me and say to me,

00:40:48.000 | "If something happens to me, my spouse is going to call you."

00:40:54.000 | Well, I always say to groups of people, "Before you leave the room today,

00:40:59.000 | you should come up and say that to me because everyone who has ever said

00:41:04.000 | that to me, no one has ever called me."

00:41:08.000 | There is no relationship there.

00:41:10.000 | So even though something happened to a lot of these people over the last 30 years,

00:41:14.000 | their spouse or their children are not going to call somebody they don't know,

00:41:20.000 | somebody where there's not already a relationship.

00:41:23.000 | There has to already be a relationship established or they're not going to call.

00:41:27.000 | So even though there's a lot of good intentions that you pick out the advisor

00:41:32.000 | that you want your spouse or your children to work with when you're gone,

00:41:37.000 | if that relationship isn't already in place, it's not going to happen.

00:41:41.000 | You made that point at a Bogleheads conference, and I have repeated it,

00:41:45.000 | the importance of solidifying that relationship.

00:41:49.000 | If you've selected an investment advisor for your spouse who's going to handle

00:41:54.000 | things when you're gone, well, go ahead and make that introduction.

00:41:58.000 | Make sure that your spouse has a comfort level with that person

00:42:01.000 | because you're exactly right.

00:42:03.000 | And oftentimes, the surviving spouse who's not that into financial management

00:42:08.000 | might meet someone in the interim.

00:42:11.000 | Someone will show up or is recommended by another person that he or she knows,

00:42:15.000 | and maybe it's a person who has great soft skills but is not great on the

00:42:21.000 | investment front for whatever reason, and that relationship will get solidified

00:42:26.000 | before the intended one will.

00:42:30.000 | So I think that's such an important point because oftentimes the person who isn't

00:42:35.000 | particularly investment savvy will respond to softer skills.

00:42:38.000 | So the person has to be kind of the complete package or at least know that you

00:42:42.000 | have a comfort level with them.

00:42:44.000 | I'm going to jump to another topic.

00:42:46.000 | I'm going to lump three different questions from Bogleheads together

00:42:49.000 | and it has to do with active management.

00:42:52.000 | You appear to be an advocate for mixing active and passive funds together.

00:43:01.000 | Could you elaborate on why you like both active and passive

00:43:06.000 | or maybe one or the other?

00:43:08.000 | Maybe you like all active because I've noticed you have talked about that a lot

00:43:12.000 | of what you write is about active management.

00:43:16.000 | So if you could get into is Christine Benz an active believer, a passive believer,

00:43:21.000 | or are you down the middle?

00:43:23.000 | Yeah, good question.

00:43:25.000 | I think it depends on the investor.

00:43:27.000 | If I had to put myself into one of those three camps,

00:43:29.000 | I would probably say down the middle.

00:43:31.000 | Certainly the data are compelling for index funds where we look at our active/passive

00:43:37.000 | barometer that my colleague Ben Johnson and his fellow passive strategies

00:43:42.000 | researchers put together every quarter.

00:43:45.000 | Certainly the case is very compelling for index funds outperforming the average

00:43:50.000 | active fund.

00:43:52.000 | But I will say that I have some active funds in my portfolio.

00:43:56.000 | I also have passive funds.

00:43:58.000 | The reason I have a comfort with active funds is that I think I'm a pretty good

00:44:02.000 | selector of active funds.

00:44:05.000 | All of the active funds that I've owned, I've owned for many, many years,

00:44:09.000 | so I think I'm good at choosing them,

00:44:11.000 | and I think I'm also good at staying on board through their inevitable

00:44:16.000 | performance weakness.

00:44:18.000 | So I do think that if someone wants to own active funds,

00:44:21.000 | they need to have that, A, understanding of the strategy,

00:44:25.000 | and, B, understanding that there will be periods when an active fund

00:44:28.000 | underperforms.

00:44:30.000 | But a key point I would make about active funds is all of the data we have

00:44:35.000 | about active fund performance points to low cost being very, very important.

00:44:40.000 | So to the extent that you have active funds in your portfolio,

00:44:43.000 | you want them to be good and cheap as well.

00:44:46.000 | So you'd want to focus on, say,

00:44:48.000 | the cheapest quartile subset of active funds to give your fund a fighting shot

00:44:53.000 | at outperforming.

00:44:55.000 | But I don't think that it's something that investors necessarily --

00:44:59.000 | certainly if they are dogmatic about it, about having only index funds,

00:45:03.000 | that's absolutely fine,

00:45:05.000 | and I think that that's certainly a great tax-efficient way to build a

00:45:08.000 | portfolio.

00:45:09.000 | But I'm not disturbed if investors want to have a component of active funds

00:45:14.000 | in their portfolios as well.

00:45:16.000 | Low cost is the key point I would make on that front.

00:45:20.000 | A couple more questions with the time we have left,

00:45:23.000 | and these have to do with your job over at Morningstar.

00:45:26.000 | One of the Bogleheads was interested to know about all of the interviews that

00:45:32.000 | you gave -- or not gave, but actually you interviewed people like me.

00:45:37.000 | You've interviewed me several times, interviewed John Bogle several times,

00:45:41.000 | and a lot of other folks.

00:45:43.000 | They wanted to know in your interviewing experience,

00:45:46.000 | what has been some of your favorite interviews,

00:45:49.000 | and what have been some of your not-so-favorite interviews?

00:45:52.000 | And if it's me, then don't say the name, but if it's me.

00:45:56.000 | Could you -- just asking about interviewing and your favorite interviews

00:46:03.000 | and your most challenging interviews over the years,

00:46:05.000 | because you've done so many.

00:46:07.000 | Oh, gosh, that's a good question.

00:46:09.000 | Well, certainly my annual sit-down with Jack Bogle rates is one of the

00:46:13.000 | highlights of every year for me, and one of the highlights of my career,

00:46:17.000 | is just feeling like I've gotten to know Jack a little bit.

00:46:21.000 | And I love interviewing him.

00:46:23.000 | He's very much on message, as everyone would not be surprised to hear.

00:46:28.000 | He tends to be quite consistent in terms of his thinking.

00:46:32.000 | But I just find his sober thoughts on the markets,

00:46:38.000 | his honest take on the industry to be just so refreshing.

00:46:43.000 | I think of him as the conscience of the financial services industry.

00:46:47.000 | So that's been a consistent highlight for me in terms of things that haven't

00:46:54.000 | gone so well.

00:46:55.000 | One that ultimately did go well, but was a little bit stressful,

00:46:58.000 | was I was interviewing the author, Michael Lewis,

00:47:01.000 | at our investment conference a couple of years ago,

00:47:04.000 | and my colleagues know me as the Michael Lewis super fan.

00:47:07.000 | So when I heard that we had hired Michael Lewis to appear at the conference,

00:47:10.000 | I think they felt sheepish about asking anyone else to do the interview with

00:47:14.000 | him. It had to be me.

00:47:15.000 | So I had been preparing for this interview for a long time.

00:47:20.000 | I'd get out of the shower and turn on a Michael Lewis podcast.

00:47:23.000 | It was just like a couple of months leading up to nonstop Michael Lewis.

00:47:27.000 | So I had this short list of questions that I had written on a piece of paper,

00:47:31.000 | and he and I were getting mic'd up and set to go on the stage.

00:47:34.000 | And I think there were, you know, well over a thousand people in the audience.

00:47:37.000 | And I walked out and I had something in front of me that was not my list of

00:47:42.000 | questions. It was, I don't know what it was.

00:47:45.000 | It was a grocery list or something like that. And I looked down and thankfully,

00:47:49.000 | I had spent enough time prepping for this that it worked out fine,

00:47:54.000 | but it was just a moment of panic that will live forever in my memory.

00:47:58.000 | I would say a consistent group of people who are tough to interview are

00:48:03.000 | college professors. Not all of them. Some of them are great.

00:48:06.000 | I got to interview Richard Thaler once, Nobel laureate now,

00:48:10.000 | and he was absolutely linear and on message and just a wonderful person to

00:48:16.000 | talk to. But sometimes college professors, I think,

00:48:19.000 | are used to not being in that format and so used to having a lot of time to

00:48:25.000 | ramble.

00:48:26.000 | And they tend just to not lend themselves super well to video interviews,

00:48:30.000 | kind of those seven to 10 minute videos that we do from Morningstar.com.

00:48:34.000 | So I would put the whole category of college professors into my less

00:48:39.000 | successful video interviews anyway.

00:48:42.000 | I would agree listening to some of those interviews that Nobel laureates

00:48:46.000 | interview and some of them are very good and some of them should just stick to

00:48:52.000 | writing.

00:48:53.000 | Right.

00:48:56.000 | Okay. One last question. I have one Boglehead who is interested through,

00:49:01.000 | because of you and because of your work and a lot of the things that you've

00:49:04.000 | done,

00:49:05.000 | is interested now in getting into the financial planning field and switching

00:49:12.000 | careers and helping people like you've helped so many people.

00:49:16.000 | Could you give them some words of advice?

00:49:18.000 | Yeah, I think it's a great field.

00:49:21.000 | I don't work with clients in a hands-on one-on-one way,

00:49:26.000 | but I love the idea of helping people in that fashion.

00:49:31.000 | And I do think that it's a field that affords a lot of flexibility to go in

00:49:35.000 | many different directions.

00:49:37.000 | One sort of blanket piece of advice is to check out Michael Kitsis' blog,

00:49:42.000 | K-I-T-C-E-S, his Nerds Eye View blog.

00:49:46.000 | He's written a lot of stuff about specializing in growing careers in the

00:49:52.000 | planning industry.

00:49:53.000 | And I do believe based on some of his writing that coming into the field with

00:49:58.000 | some sort of a specialty I think can be incredibly powerful.

00:50:02.000 | So trying to think hard about what subset of investors you would most like to

00:50:09.000 | help.

00:50:10.000 | I've latched on to pre-retirees and pre-retirees as a key area of interest for

00:50:15.000 | me simply because I recognize that people at that life stage really need the

00:50:20.000 | help.

00:50:21.000 | They're so receptive to getting advice.

00:50:23.000 | And I think the experience of helping my parents through their last years sort

00:50:27.000 | of crystallized my interest in working on that topic and with people at that

00:50:31.000 | life stage.

00:50:32.000 | But I think it's helpful to think about what segment of the population do I want

00:50:37.000 | to work with?

00:50:38.000 | Do I want to help my fellow young millennials who are just starting careers

00:50:42.000 | sort out their financial priorities?

00:50:45.000 | Do I want to work with a specific maybe occupation where perhaps that was the

00:50:51.000 | field that I worked in and I'm transitioning from so I want to help that

00:50:54.000 | particular population?

00:50:56.000 | I think that specialization can be very important in terms of trying to build

00:51:00.000 | your brand and also just trying to home in on what you're going to pay attention

00:51:06.000 | to and what you're going to tune out.

00:51:08.000 | I think that that's one thing since I've focused more on planning and

00:51:13.000 | retirement planning.

00:51:14.000 | There's a whole part of the Wall Street Journal that I really don't spend much

00:51:18.000 | time with anymore.

00:51:19.000 | So the whole area of corporate actions and what's going on at the management at

00:51:23.000 | X, Y, and Z company.

00:51:25.000 | I might be interested personally but it doesn't -- it's not must read for me in

00:51:30.000 | terms of things that I need to stay up on my work.

00:51:34.000 | So I think that focusing can also be helpful from that standpoint.

00:51:38.000 | What about the person who is changing jobs?

00:51:41.000 | They might have been an engineer or a dentist even and now as a second career

00:51:46.000 | they want to become a financial planner.

00:51:48.000 | What advice would you give to them?

00:51:50.000 | I think the key thing is to find out what you need to do to get the right

00:51:55.000 | credentials and also make sure that you are hooking up with the good guys in the

00:52:00.000 | industry because I think you might find that it's easiest to get a job with a

00:52:05.000 | firm where in hindsight after you've worked there for a couple of years,

00:52:09.000 | you don't love the business model.

00:52:11.000 | You might not think it's serving consumers particularly well.

00:52:15.000 | And Rick, I know that was kind of your personal experience,

00:52:18.000 | your own trajectory.

00:52:20.000 | But I think it's important to do your due diligence at the outset on what sort

00:52:24.000 | of business model do I want to align myself with?

00:52:28.000 | Do I want to work in a commission-based firm or do I want to be in a fee-only

00:52:33.000 | firm that more directly aligns my incentives with those of the people I'm

00:52:38.000 | trying to serve?

00:52:40.000 | So I think doing your homework on that front can be really important before you

00:52:45.000 | make the leap out of your industry.

00:52:48.000 | And the other thing I would make before we leave the topic of credentialing is

00:52:52.000 | the CFP, the Certified Financial Planner Program,

00:52:55.000 | is extraordinarily flexible in terms of allowing you to do self-study.

00:53:02.000 | So you should be able to work in the CFP program alongside your regular work

00:53:08.000 | before you make the leap into the position and into the career.

00:53:13.000 | Christine, you've been very helpful.

00:53:14.000 | Thank you so much for this interview.

00:53:16.000 | Wish you a Merry Christmas, a Happy Holiday, whichever you choose.

00:53:21.000 | And thank you so much.

00:53:23.000 | Rick, Happy Holidays to you.

00:53:24.000 | Thank you so much for including me and all the best to you and your family in

00:53:28.000 | 2019.

00:53:29.000 | Thank you.

00:53:30.000 | This concludes the fourth episode of Bogleheads on Investing.

00:53:34.000 | We hope that you are enjoying these podcasts and are able to visit

00:53:38.000 | bogleheads.org.

00:53:40.000 | And pass the word.

00:53:41.000 | Help other folks as well.

00:53:43.000 | [Music]

Bogleheads® on Investing Podcast 004 – Christine Benz, host Rick Ferri (audio only)

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