Retirement Answer Man

The cost of a financial misstep in retirement can be devastating. During retirement it is hard to "earn" your way out of poor decisions. Poor planning or a big loss during retirement can ruin your financial security. In this episode I discuss the most common retirement "screw ups" I've seen and how you work to avoid them.

7 Ways to Screw Up Your Retirement

Having unrealistic return expectations for your investment assets (too high in 1990s, too low in 2007-08)

Crazy as it sounds, in the 1990s people retired thinking they could earn 15%-20% per year and take 10% from their assets for retirement income.

Today, we see the opposite extreme. After 2008-07, people aren't so optimistic about retirement. In fact, they are down right pessimistic.

Not sticking to a spending plan and reviewing it annually

When you  retire it is essential that you become more intentional about your spending. In retirement your earnings power diminishes. You'll have less opportunities to earn your way out of poor spending choices.

Set a spending plan and review it annually. This will allow out adjust as your situation changes.

Falling in love with an investment or investment strategy

Real estate; Gold; Rental houses; Tech stocks; Dividend stocks. I've seen it all over the last 23 years. Just because you've had great success with a particular investment or strategy doesn't mean it is the be all end all.  Managing assets during your retirement years is more about consistency and protection than stellar returns. The past is littered with "sure thing" investment that have gone bust. Just look at the list above.

Financially supporting/enabling adult children

I'm not sure where the line is between occasionally helping a child out and enabling them. We've seen retired parents destroy their financial security by bailing out their children from there poor choices. A good litmus test is to ask yourself: Are you preparing your children for the path, or the path for the child?

Starting or investing in a small business

Starting a business or investing in a new venture is exciting. Be careful. They all sound exciting at the start but most small businesses fail. Retirement is not the time to invest a lot of money in an entrepreneurial dream.

Buying expensive lifestyle toys (vacation home, R.V. or land)

Go ahead and dream big but be careful about spending big money on your retirement toy. It's very common to see older retirees saddled with debt on an expensive R.V. or vacation lot that isn't used and worth a fraction of the loan amount.

Sticking your head in the sand when it comes to your financial life

Not being aware and willing to address the financial realities of your retirement is a sure way to screw it up.

Retirement Tip of the Week

Complete your estate plan. Yeah it's boring and can cause some uncomfortable conversations, but get it done. Please

Tips to getting the estate planning questionnaire done:

  • Don't try to do it at home
  • Set an appointment with your spouse outside of the house to complete
  • Have your advisor or a trusted friend interview to complete it

Tips for Keeping it up to date:

  • Review it once a year with your spouse and trusted advisor
  • Review the same time each year (like a holiday or annual family gathering)

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Direct download: PWIW_7.27.13.mp3
Category:general -- posted at: 1:17pm CDT

This week I speak with Burt White, Chief Investment Officer of LPL Financial. Burt and I discuss LPL's mid-year outlook Titled: The Investor's Almanac. 

Burt and his team do a great job simply communicating the economic and investing environment.  Their Investor's Almanac is a great tool to help us invest wisely.  No bold predictions or market calls here, just easy to understand insights you can use to make better informed investing decisions. If you'd like a free copy of their Investor's Almanac you can access it in the Retirement Answer Library

In this episode we discuss:

  • how to use investment outlooks to Invest Wisely
  • where the U.S. is in the economic cycle
  • where they see potential risks and opportunities
  • how international markets are not in sync with U.S. markets
  • why you should consider harvesting high quality bonds
  • possible alternatives to traditional fixed income
  • places to find income
  • super themes that should provide a benefit the U.S. economy
  • the importance of turning off the worry factory of financial media

Retirement Tip of the Week:  Designating a Trust as a Beneficiary of an IRA

Last week a client called requesting the beneficiary of his Individual Retirement Account (IRA) be changed to a trust. This planning strategy has become more popular over the last few years. This strategy for IRAs can has some benefits if the ultimate beneficiary is:

  • a minor child
  • someone with special needs
  • a spouse from a second marriage
  • a spendthrift with poor financial skills

The trust can help protect the inherited assets and better control how those funds are used by the beneficiary of the trust.

Be careful using this strategy though. Done incorrectly, the strategy could conflict with IRS rules and possibly create big tax problems. It is important the attorney drafting the trust be familiar with certain aspects unique to inherited IRAs.  

Some things to consider are:

  • Make sure the beneficiaries of the trust are people. They cannot be non-persons (like a charity)
  • Consider adding language specifically prohibiting distributions to non-persons
  • Make sure it is a Conduit Trust. It should include language that requires the distribution from the trust to the beneficiaries of the Required Minimum Distributions coming from the inherited IRA.
  • If there is more than one beneficiary, consider having a separate trust for each. This will also each trust beneficiary to use their own age for required minimum distributions
Direct download: PWIW_7.2014.mp3
Category:general -- posted at: 5:35pm CDT

In this episode, I'll show you how to come to terms with your worry and the uncertainty about retirement.

"I worry"

I talk to a lot of people about retirement. Not only clients but most everyone I meet over age 50.  I'll always ask them what their #1 thought is on retirement. I've learned a lot from this exercise. The most important thing I've learned is that people worry about retirement....alot!.

They worry about:

  • all the uncertainty
  • living without a paycheck
  • inflation
  • running out of money
  • maintaining my standard of living
  • my health and healthcare costs
  • being a burden to my children
  • long-term care costs
  • losing money in the markets
  • the economy
  • my country

In this episode, I'll show you how to come to terms with your worry and the uncertainty about retirement. Once you've done that, you'll be free to build a system to manage through the uncertainty in your life. I discuss:

  • Market uncertainty
  • Economic uncertainty
  • Uncertainty in your life

How to begin to manage it by:

  • Scheduling "little conversations"
  • Using checklists
  • Making lots of little adjustments as your life unfolds during retirement

Building this structure is really what this blog, the Retirement Answer Library and podcast is all about. 

Retirement Tip of the Week

The importance of tax diversity on your balance sheet as you near retirement. If you're within 5 years from retirement, why it may make sense to significantly lower the amount you save in your 401(k) retirement plan. 

Resources Discussed

Enjoy the Podcast?

A big THANK YOU to Dean for sending me your kind note, thanking me for the podcast and Retirement Answer Library. So glad it's been helpful to you. It really means the world to me.

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Direct download: PWIW_7.14.14.mp3
Category:Finance -- posted at: 7:15am CDT

“How do I understand Social Security and Medicare?”  This is a question I hear most often from people planning for retirement. It's understandable. Social Security and Medicare benefits will play a big part in your retirement. 

In this episode we begin to unwrap both and begin to build a framework for you make decisions about your Social Security and Medicare benefits. I say we “begin” intentionally. These are BIG subjects. In future episodes, we’ll continue to improve your understanding of your Social Security and Medicare.


  • If you enjoy the podcast, I would consider it a great favor if you subscribed in iTunes and leave a review. This helps others discover the show. 
  • Last week I announced my Retirement 2.0 project. This is an initiative to redesign the retirement planning process to serve you better.  To help, go here and share your thoughts on retirement.

Retirement Tip of the Week

I suggest you visit and explore our government's Social Security website. It is an easy to navigate, useful resource to help you manage your Social Security benefits. YES, I just said “useful” and “government” in the same sentence. They did a great job designing the site.

 You can easily:


  • Apply for benefits,
  • Check the status of an application
  • Set up direct deposit
  • Estimate your Social Security
  • Estimate your spouse’s benefit
  • Sign up for your Social Security benefit
  • Set up direct deposit
  • Access their Retirement Toolkit (a great PDF document that outlines key dates for Social Security and Medicare)


Unwrapping Medicare: The Basics

This week I talk with Misty Kimbrough, a local insurance expert about the basics of Medicare. She outlines the basic parts of Medicare and the 3 most common missteps people make when planning medicare benefits for retirement.

Part A “major medical” coverage covering health care costs at hospitals 

Part B Covers the costs of health care outside of a hospital. Doctor visits, outpatient procedures, x-lab test and related services

Medicare Supplements (Medigap)

Part C Medicare Advantage Plan

Part D Prescription Drug Plan

3 Common Medicare Missteps 

Resources Discussed

Direct download: PWIW_7.7.14.mp3
Category:Finance -- posted at: 7:06pm CDT