Retirement Answer Man

Many people choose to save money for their kids and grandkids in a 529 account, but one listener wonders if there is a better way to give. Learn the answer to this question and more on this episode of the Retirement Answer Man show. 

Make sure to stick around until the end to hear the Coach’s Corner segment with Kevin Lyles. Kevin and I discuss growth and accepting challenges in retirement. Find out why it is so important to continue to challenge yourself in retirement.

What is the best way to save money for the grandkids?

Like many people, Kathy saves money for her grandchildren in a 529 account, but she wonders if this is the best way to save for them. What if they choose not to go to college?

Before analyzing the best way to save for the grandkids, consider how you should think through this issue. What are your goals in saving for the grandchildren? 

What do you want to accomplish? Do you want them to graduate from college without debt? Do you want to help them get launched to give them a great start to adult life? Do you want to buy them their first car or help them put a down payment on their first house? Think about your ultimate purpose for giving.

Various methods that can be used for giving

If you would like to ensure that the kids graduate without debt, then, the 529 is an excellent vehicle to accomplish this goal. It’s also important to note that by keeping the 529 in your name you can change the beneficiaries from one child to another. 

Another way to save for the kids is by creating a separate account in your name that you earmark for a specific child in mind. Then later on if that child veers down a wrong path, you can choose not to support their bad decisions. This option also allows for you to have control and you ensure that you aren’t making decisions for them too early. 

The Uniform Gift to Minors Act provides a way to transfer financial assets to a minor without establishing a formal trust. A UGMA account is managed by you until the minor comes of age, at which point they assume control of the account. At this point, you relinquish all control over the funds.

If part of your goal is to help your kids while they raise their kids, then paying for private school or university directly is one way that you could do this. You can even pay directly for medical expenses as well. As long as you are paying the provider directly then you can give unlimited funds. 

If your goal is to gift your assets as a part of estate planning, remember that you can give up to $16,000 to anyone you want each year.

Before gifting anything, understanding your motivation for the gift is essential.

Find purpose with action to propel yourself forward

Thinking about things is, oftentimes, an avoidance behavior. The only way we discover who we are or the things that we enjoy is by doing them. 

“A sense of purpose doesn’t come from thinking about it. It comes from taking action that moves you towards the future. The moment you do this you activate a force more powerful than the desire to avoid the pain of loneliness or inactivity. We call this the force of forward motion.” Phil Stutz.

Continue to challenge yourself physically, socially, and intellectually. By continually expanding you prevent rigid mindsets from setting in. Without challenge, the status quo sets in and while we may feel comfortable with our lives, before long we may discover that our lives will actually shrink without growth. 

How will you challenge yourself in retirement? 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING

  • [1:10] Find purpose by doing things

LISTENER QUESTIONS

  • [2:45] Giving to grandkids
  • [10:44] Is there a list of the major retirement benchmarks?
  • [15:00] Who does the RRC consist of?
  • [17:22] Social Security claiming

COACH’S CORNER WITH KEVIN LYLES

  • [24:27] Try new things in retirement

  • [31:55] Developing new routines can help

TODAY’S SMART SPRINT SEGMENT

  • [34:10] Do what needs to be done not what you feel like doing

Resources Mentioned In This Episode

Rock Retirement Club

The Retirement Manifesto blog

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Direct download: RAM454.mp3
Category:general -- posted at: 7:11am CST

Life is about events, the challenges we overcome or not, our successes and failures, but, even more, it’s about how we touch and are touched by the people we meet. 

Nicole is back! She is here this week to help me answer your listener questions. In this episode, we discuss the challenges of making friends in retirement, the value of international diversification, contributing to a Roth 401K vs. a regular 401K, the 4% rule, and much more. 

I created the Retirement Answer Man show to help you, not just with the business side of retirement, but also to help you build a successful life so that you can lean in and really rock retirement. This month we are answering your retirement questions. If you have a question to submit, head on over to RogerWhitney.com/AskRoger to proffer your questions. Remember, if you want to get bumped to the front of the line and use our fastpass option by recording an audio question. 

Check out these resources to learn more about inflation in retirement and the RRC

Have you been thinking about joining the Rock Retirement Club? If so, sign up for our updates so that you can be the first to learn about the next online open house. We’ll be opening enrollment at the end of October and plan to have a few open house opportunities between now and then. These open houses will be an informative way to for you to learn more about the club so that you can decide whether it is right for you. 

Are you worried about inflation in retirement? If so, we have created a resource to help you navigate this worrisome hurdle. Check out DoRetirementRight.com to get this FREE information to help you think strategically about inflation in retirement. 

Trying to make friends as a single person in retirement can be a challenge

In many 55+ communities, it is pretty easy to make new friends. Everyone is a transplant from somewhere else and there are endless opportunities to join activities and clubs. 

However, if you are single it may not be as easy as it is if you are married. Many retirement activities are geared toward couples so single people can have a harder time getting invitations. 

Are you single in retirement? What strategies have you implemented to help you make friends? Reply to the 6-Shot Saturday newsletter with your suggestions. 

Why keep international equities?

Many people wonder what the point of keeping international equities in a portfolio is. It seems as though global equities fall at the time when we need them to be stable or growing, so why bother to include them in our portfolios? Traditionally, they do poorly as compared to other markets, yet including international equities is recommended as a part of having a diversified portfolio strategy. 

I tend to recommend international equities, not for diversification, but for the fact that many fantastic companies aren’t based in the U.S. Think about Toyota, Mercedes, Glaxo, Novartis, and even Ikea. Rather than considering a different asset class to add to your portfolio, choose the best worldwide companies to expand your portfolio to include top-notch mid to large-cap international companies. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [5:23] On making friends
  • [8:23] The value of international diversification

LISTENER QUESTIONS

  • [12:05] Should I contribute to my Roth 401K or just a 401K near retirement
  • [16:12] Are investment advisor fees worth it?
  • [26:00] Why haven’t I heard back from the IRS?
  • [29:06] Where do my 401K profits go when inflation goes up?
  • [32:33] How does the 4% rule apply to dividends?
  • [35:22] Is 15% enough to save for retirement?
  • [37:20] Why is there a disclaimer about indices at the end of the show?

TODAY’S SMART SPRINT SEGMENT

  • [40:43] Be inclusive make an effort to reach out to new people you meet

Resources Mentioned In This Episode

Rock Retirement Club

DoRetirementRight.com

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Direct download: RAM453.mp3
Category:general -- posted at: 2:00am CST

We’re back again answering your retirement questions! On the docket for today are questions like whether should you consider taking on a mortgage in retirement, whether it’s feasible to hold only ESG investments in retirement, and if you need life insurance in retirement.

In addition to answering these listener questions, I’ll also share several book suggestions that I got in response to the 6-Shot Saturday newsletter and reflect on insights I learned from my time in Colorado. 

Don’t miss out on upping your retirement game. Press play to hear answers to questions from listeners like you!

Dealing with inflation in retirement

Have you been worried about how you will deal with inflation in retirement? If so, you are not alone. That is why my team and I created an Inflation in Retirement Guide to help you understand and navigate inflation as you approach retirement. In this FREE guide, you’ll learn 6 tactics to consider and practical ways to help you think through the issues that rising inflation brings to retirement. 

6 insights from my time in Salida, Colorado

My goal with the Retirement Answer Man show is to help you navigate not just the financial side of retirement, but also the life side. You need to have both sides in order to really rock retirement. 

If you have listened to the show in the past you may know that my wife and I go to Salida, Colorado, and rent a house for about a month each summer. We love it up there which is why we purchased a lot there last year with the intention of building a home and eventually splitting our time or relocating in the future. 

We just returned from our most recent trip, so I thought I would share a few insights that I gained from my time there. 

  1. Set yourself up to experience the things you enjoy. I realized that one of the reasons that I love Salida is that it sets us up to easily do the things we love to do. We love hiking and mountain biking and these activities are easily accessible as opposed to our home in Fort Worth where partaking in these activities requires more planning. In retirement, consider moving closer to the things you love to do. 
  2. It’s easier to make friends in Salida. This smaller town has a slower pace and lacks the hustle and bustle of Fort Worth. People are more open to having conversations, so it is easier to make connections.
  3. Just do it! Just do the things you enjoy doing. Acting is better than (over)thinking. It is easy to think about doing things rather than acting upon them, but the only thing that will move you forward is actually doing the thing you want to do.
  4. It is harder to make decisions when your heart is involved. It is difficult to gain perspective on your own life. Oftentimes, your head goes along with what your heart wants. Listen in to hear how a recent decision backfired on me when I pulled the trigger and acted with my heart. 
  5. Home is an important base to have. As much as we enjoy our yearly trips to Salida, a month in a rental never feels like home. 
  6. Spend big on the important things and be ruthless about everything else. It is important to strike a balance in life, so make sure that your spending is aligned with what you care about. 

Should we take a mortgage to build our retirement dream house?

This listener is careful with money and has been mortgage and debt free for over a decade. They are looking to build their dream home their “castle in the sky” and are considering whether they should take a mortgage out to build this home. The mortgage would only take 20% of their retirement pension. Is it worth it or should they pay cash for the home? What do you think? Listen in to hear my answer.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [3:30] Insights from my time in Colorado
  • [12:38] Listener book suggestions

LISTENER QUESTIONS

  • [14:45] Mortgage in retirement
  • [22:00] How challenging is it to control where your retirement investments come from?
  • [32:03] On the necessity of life insurance in retirement
  • [38:41] On credit in retirement
  • [42:12] If relying on a dividend approach they need to be diverse

TODAY’S SMART SPRINT SEGMENT

  • [45:54] Think about your affluence - are you protecting it? 

Resources Mentioned In This Episode

DoRetirementRight.com - check out our FREE inflation guide to retirement!

BOOK - Red Teaming by Bryce Hoffman

BOOK - Building a Second Brain Tiago Forte

BOOK - My Dear Hamilton by Stephanie Dray

BOOK - Path Between the Seas by David McCullough

BOOK - All That Moves Us by Jay Wellons

BOOK - Five Presidents by Clint Hill

BOOK - The Boys in the Boat by Daniel James Brown

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Direct download: RAM452.mp3
Category:general -- posted at: 2:00am CST

Are you nearing retirement and wondering how you should pay for large out-of-pocket expenses? Should you dip into your emergency fund, take from your retirement savings, or is there another way? 

We’ll consider this question, hear how Larry is living intentionally, learn how visual aids can help when trying to discuss finances with elderly parents, and discuss dollar cost averaging a lump sum payment on this episode of Retirement Answer Man.

All month we’ll be answering your questions. If you have a question that you would like to submit head on over to RogerWhitney.com/AskRoger and type in a question or use the record a question function to shorten the wait. We love audio questions so we bump those to the front of the line!

Tune in to hear these listener questions plus a summary of what was on my summer reading list. Make sure that you are signed up for the 6-Shot Saturday newsletter to learn all the details about the books I read this summer.

How to pay for big-ticket expenses as you approach retirement 

One listener would like to know the best way to pay for large expenses as she approaches retirement. She has already retired from her career and is now working (for minimum wage) as a teacher’s aide while her husband still works. They live in a high-cost of living area, and while their home is paid for, it requires a bit to keep it up. 

Digging into cash reserves for big-ticket expenses can be scary since it is a drain on the assets, so she would like to know if her husband should decrease his 401K contributions so that they can increase their cash flow. 

This is a good time to ensure that you have enough cash reserves in your after-tax bucket. While you are in the middle of dealing with a large expense it can be challenging to look ahead. But while it is important to meet those immediate needs, it is also essential to plan ahead. 

Take some time to map out your plans for the near future. How long does your husband plan to work? Do you plan to stay in your high-cost-of-living area? Do you plan to downsize? This way you can explore the options you have to discover how to get on a sustainable path for the future. Building a decision-making framework can empower you to improve your situation and your future.  

How I approach reading

Before I share the books that I’ve been reading over the past couple of months, I wanted to share with you my approach to reading so that you can better understand my system and where I’m coming from.

  1. I try to make reading my default activity. Instead of looking at my phone or turning on the TV, if I have some extra time, I grab a book and read.
  2. The books I read vary based on my interest at the time, but I mostly read nonfiction books about business and retirement. 
  3. I always have more than one book going on at a time. I generally have an audiobook and a few different physical books around the house. 
  4. I learned a few years back that I don’t have to finish a book and that changed my life! Sometimes I don’t read a whole book, rather, I use certain books like reference books and pick and choose what I want to get out of them. 
  5. I prefer physical books to ebooks. I also write, highlight, and underline in my books so that I can easily refer back to them. 

Books I’ve been reading

Now that you understand how I use books and reading in my life you can check out my summer reading list. 

The Lost City of Z by David Grann

Hero of Two Worlds by Mike Duncan

A Tale of Two Cities by Charles Dickens

On the Shortness of Life by Lucius Annaeus Seneca

The Second Mountain by David Brooks  

The How of Happiness by Sonja Lyubomirsky

Originals by Adam Grant

Red Teaming by Bryce G. Hoffman

I’d love to hear any book recommendations that you have. You can simply reply to the 6-Shot Saturday newsletter to let me know what you have enjoyed reading this summer.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

BOOK RECOMMENDATIONS

  • [3:30] How I approach reading
  • [6:22] What I’ve been reading this summer

LISTENER QUESTIONS

  • [14:32] On making your portfolio an all ETF IRA
  • [20:21] How Larry is living intentionally in retirement
  • [22:39] Dollar cost average or a lump sum
  • [27:02] Using a visual aid to help elderly parents understand overspending
  • [29:15] Large expenses approaching retirement

TODAY’S SMART SPRINT SEGMENT

  • [33:54] Instead of taking big actions find tiny actions that you can do consistently

Resources Mentioned In This Episode

Rock Retirement Club

The Pie Cake episode

Cal Newport

BOOK - The Lost City of Z by David Grann

BOOK - Hero of Two Worlds by Mike Duncan

BOOK - A Tale of Two Cities by Charles Dickens

BOOK - On the Shortness of Life by Lucius Annaeus Seneca

BOOK - The Second Mountain by David Brooks

BOOK - The How of Happiness by Sonja Lyubomirsky

BOOK - Originals by Adam Grant

BOOK - Red Teaming by Bryce G. Hoffman

Michael Connelly books

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Direct download: RAM451.mp3
Category:general -- posted at: 5:41pm CST

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