Retirement Answer Man

I'm convinced that the most stressful part of planning for and living in retirement is that we don't know how to balance living well today, while not sacrificing tomorrow. As a result, most of us live out of balance.  Some of us are so worried about tomorrow that they sacrifice their current life in order to be "prudent". Others "live for the day", assuming without a thought for their future.  both are wrong. In this episode, I talk about my #1 retirement planning tool to help other find this delicate balance.

Invest Wisely--Investing Potholes in November and December

If you're planning on making large investments in your taxable accounts be careful. 

In December, most pooled investments, like mutual funds, distribute to shareholders the capital gains and dividends they've accumulated throughout the year. If you buy one of these products in a taxable account before this distribution, you could have a tax liability for capital gains that were realized before you even owned the fund. 

In this episode, I discuss how this works and some things you can do to avoid a potential nasty tax surprise.

Plan Well--My #1 Retirement Planning Tool to Help People Find Balance

  • Can I afford to retire a year earlier?
  • Do I need to change my spending plan after this market correction?
  • Can I save less now and still retire comfortably?
  • Do I need to take so much investment risk?

These are some of the frustrating questions that people struggle with every day as they plan for retirement. About 16 years ago, I discovered a tool to help me help people answer these questions and confidently live a more balanced life.It's called Monte Carlo engine. 

Today, I've integrated it into my Plan Well process to help other make smarter financial decisions and find some balance between living well today without sacrificing their tomorrow.

Like most tools, some are better than others and much of it's usefulness is dependent upon the skill of the user.

In this episode, I use a planning example to demonstrate how I use it and some of it's advantages and drawback. 

Note: Normally just read these show notes, it's best to listen to this one. Just click on the audio play at the bottom of this post.

Here is the Fact Set for John Smith

  • Age 55
  • Retirement goal 60
  • Investment assets $2,000,000
  • Retirement lifestyle goal, $100,000 annual 
  • Retirement lifestyle goal #2, $70,000 RV at age 60
  • Life expectancy, age 90
  • Target Portfolio, balanced II

To see the full report that I discuss, click here.

How Not to Use It

  • It's not a one time evaluation tool (you can't set it and forget it)
  • It does not determine or predict results
  • It can't overcome bad inputs or assumptions

How to Use It

  • As a important part of your annual financial review
  • As a tool to help you prioritize competing goals
  • As a tool to help you evaluate tradeoffs between competing priorities
    • Spending/Saving
    • Working/Retiring
    • Risk/Reward
    • College/Retirement
    • Giving/Investing
  • As compass to help evaluate and correct course as your life unfolds
  • As a guide an warning system to help you know when your plan may be unsustainable
  • To provide more color on the long-term impact of today's financial choices

There is no tool that will solve for all the uncertainty in your life or the world. 

The best we can do is acknowledge what we don't know (can't know) and use a sound compass to help guide our life's journey.


"He who is enslaved to his compass, will enjoy the freedom of the seas"

Ken Davis

Are You Confident in Your Compass?

Direct download: 38_Retirement_Answer_Man.mp3
Category:general -- posted at: 9:18pm CDT