Retirement Answer Man (general)

Many people are concerned about markets and inflation right now, but rather than focusing on this in today’s episode, I’ll answer your investment strategy questions. I choose to focus on strategy because if you can create a feasible, resilient retirement strategy, you’ll be able to weather all kinds of economic uncertainties.

Make sure to stick around until the end to hear an interesting interview that may challenge you to rethink your preconceived ideas. You won’t want to miss it if you are open to hearing different perspectives. 

If you are looking for a fast pass to get your retirement question answered, record an audio question at RogerWhitney.com/askroger.

Unfortunately, you won’t win retirement

I have some bad news for you. You aren’t going to win retirement. There is no way you will figure everything out because there is no right answer. 

Despite this fact, you will be okay. By intentionally working through your decisions you’ll be able to enjoy retirement to its fullest. Not everything will turn out the way you want, but if you work through the decision-making process with the spirit of a scientist, you’ll continually improve. When faced with the results of a poor decision, take time to dissect what went wrong so that you will be able to improve your decision-making the next time around. 

Learning from your mistakes instead of stressing over them will help you improve your decision-making process so that you’ll achieve better results in the future.

How to account for uncertainty in retirement?

When creating a retirement plan, any room for error is scary. Even a 1% uncertainty can be unsettling. So what kind of market returns should one anticipate when using retirement calculators?

The problem with retirement calculators is that you can’t believe the calculator. None of the scenarios that the calculator proposes will actually happen. This makes long-term planning hard to predict. 

It doesn’t matter how much you analyze your future spending, more accuracy will not improve precision. 

You can’t know what your spending will be in 10, 20, or 30 years, which means that you can’t make life decisions based on an imagined future. Rather than trying to completely remove uncertainty, make reasonable assumptions to manage that uncertainty. Managing uncertainty is the essence of retirement planning. 

A feasible, resilient plan will see you through retirement

Once you figure out the basis that you need to live a great life in retirement then you can organize a feasible plan around that great life. Give yourself optionality by making your plan resilient. With your feasible, resilient plan you can use long-term calculations to plan for the short term. 

By creating a resilient plan you’ll create slack in the system so that you can change your mind as you change over time. Managing uncertainty instead of trying to eliminate it will give you agency and build confidence in your retirement plan.

Listen to the answers to all sorts of retirement strategy questions and make sure to listen until the end to hear the riveting interview with Amy Bloom. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

LISTENER QUESTIONS

  • [4:50] Should Jennifer count on an average market in retirement?
  • [13:52] Should I worry about poor investment returns or look for alternatives?
  • [23:42] What about using laddered ETFs rather than a bond ladder?
  • [25:07] On my language usage
  • [26:40] On using a 72T before age 59.5
  • [30:45] Should Dan continue to hold a life insurance policy if his house is paid off?
  • [35:03] How to leave behind your life story

INTERVIEW WITH AMY BLOOM

  • [40:16] Why did Amy choose to share her story?
  • [43:00] When did Amy and Brian approach this topic?
  • [50:25] How to be helpful with a life-changing diagnosis
  • [51:27] On how to approach this situation
  • [54:30] How they navigated the logistics
  • [1:01:26] How did the family react?
  • [1:04:43] What did Amy learn from this experience?

TODAY’S SMART SPRINT SEGMENT

  • [1:09:19] Reassess your relationship with the internet and news

Resources Mentioned In This Episode

LTCI Partners

Dignitas

BOOK - In Love by Amy Bloom

Episode 441 - How to Leave a Lasting Legacy

Fidelity Retirement Calculator

Fidelity 72T calculator

Dan Miller

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Direct download: RAM442.mp3
Category:general -- posted at: 2:00am CDT

If the market outlook has you feeling uncomfortable, you are not alone. This discomfort may cause you to want to change course, but consider that moments of extreme discomfort are often reverse indicators. Extreme discomfort can mean that you are on the right track to grow in a new direction. 

On this episode of Retirement Answer Man, I answer your questions about choosing a financial advisor, how to weather tumultuous financial markets, and using a Roth 401K. Learn what you can do in the midst of an uncertain future by pressing play. 

Is this the big one?

Weathering market downturns can be like weathering a storm. When you are in the thick of it you may wonder if this is the big one that will wreck your home and change your life. Should you just hold on tight and hope that everything will all work out? 

No. No one can hold your hand and assure you that your finances will recover.

The rules of investing change in retirement

The rules of investing when you are in the accumulation period of life don’t work the same in when you are decumulating assets. 

Since you are nearing or already into retirement you don’t have a 40-year investment timeframe to work with, so you may not be around for the next market upswing. You're in a period of life where you will need money from your investments in a short time frame. 

This is why you’ll need a well-thought-out strategy that can help you to stay agile. As the situation unfolds, you can make little adjustments as needed. Staying agile will help you maintain flexibility and retain agency. 

In a situation that feels out of your control, it is important to find ways to retain agency to do what you have to do to control the things that you can. You don’t want to feel powerless, so focus on what you can control. 

Watch out for false prophets

No one can predict what will happen in the future. However, there are many out there that claim that if you follow them they will lead you down the right path. 

We have to accept our own uncertainty and refrain from trying to figure it all out. Instead of trying to predict the future or following false prophets, it is important to create a plan that you can follow to actively navigate through these tumultuous waters which will see you through any eventuality.

How to know when it is time to switch advisors

How can you know if your financial advisor is doing a good job? What are some red flags that indicate that you should reevaluate your relationship with your advisor?

One listener is concerned about his financial advisor since they had two misunderstandings in the last two years and is wondering if he change advisors.

When researching financial advisors look for a specialist that can advise you through your specific financial situation. Consider whether they have the skillset and expertise to handle the problems and opportunities of your specific situation. Do they focus on what you need?

Is your advisor an active thinker that makes decisions or do they simply follow a checklist? Since the decisions that you are making aren’t crystal clear, it is important to have a process to think through decisions in an organized manner. Does your advisor help you with this? Do they walk you through the pros and cons of each decision?

Is the advisor product-focused or process-focused? If they are product-focused then this is a red flag. Another red flag is if they focus on trying to predict what the markets will do. Since no one can predict the future, it is important to find someone who will focus on the things that are within your control. 

Listen in to hear what else you should consider when choosing a financial advisor and when to consider finding a new one. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [3:23] Moments of extreme discomfort are reverse indicators

COACH’S CORNER

  • [7:38] Kevin wants to give to the kids while they're still here
  • [12:15] On giving money without strings attached
  • [17:25] Kevin is relearning to show his true colors

LISTENER QUESTIONS

  • [19:39] How to know when it is time to switch advisors
  • [34:05] What gives us the confidence that we will recover this time?
  • [41:50] Should Jen switch to a Roth 401K?
  • [48:23] What to use as a yield for net present value calculations

TODAY’S SMART SPRINT SEGMENT

  • [50:07] Experiment with digital minimalism for a week

Resources Mentioned In This Episode

BOOK - The Checklist Manifesto by Atul Gawande

Boomer Benefits

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Direct download: RAM441.mp3
Category:general -- posted at: 2:00am CDT

We all want to leave a legacy to those we love, but leaving a legacy doesn’t mean simply making a will. To create a lasting financial and nonfinancial legacy you need to have a strategy that you can rely on. Today you’ll learn the steps to take to create a lasting legacy.

Leaving a legacy is different from estate planning

Often times we read about a hot investment or retirement planning tip in an article or hear some equally savory advice in a podcast and we jump to take action on it rather than thinking about how it could fit into our overall plan. I call this letting the tail wag the dog. 

Instead of letting the tail wag the dog, think about your actions first. Stop for a moment and think about how that new shiny idea or product would fit into your overall retirement plan. When you have a goal-based plan in place, it allows you to think through decisions in an organized way. You’ll want to use similar methods to build a plan to create the most impactful legacy that you can.

How to begin creating your legacy plan

There are a couple of steps you can take to begin creating a strategy that will allow you to develop a lasting legacy. 

The first step is to consider what you can afford to do. You can do this by determining how much excess capital you have. This can be a tricky number since there are so many unknowns to consider. These unknowns make it hard to determine how much you will have at the end of your life. 

Consider what is feasible considering your resources and your projected spending. You can gain a better understanding by using a plan of record. If you have never used a plan of record, keep your eyes open for this week’s 6-Shot Saturday newsletter to get a free template. If you aren’t signed up for the newsletter, head on over to RogerWhitney.com to fill out the form and subscribe. 

What are your legacy goals?

Now that you have determined what is feasible given your life vision and resources you can move on to step 2. Consider what kind of financial and nonfinancial impact you want to have. What do you want to accomplish?

Do you want to be able to contribute to your children’s retirement savings? Or maybe you want to help them buy their first home. 

Do you want to create a nonfinancial impact by developing the tradition of having a weekly family dinner? Do you plan on being an exemplar and coaching them through tough choices?

Create intentionality with your legacy strategy by framing it in financial and nonfinancial ways and considering the impact you want to have during and after your life. 

After these first two steps, you can begin to create your strategy. You’ll want to think about maintaining flexibility with your strategy since markets won’t always cooperate with your plans. Your legacy should be built with discretionary money. The tactics will come easy if you focus on creating a strategy first. Listen in to hear how to build your lasting legacy. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [2:43] Doctors don’t want you to engage and ask questions
  • [8:00] Leaving a legacy is different from estate planning
  • [13:17] What impact do you want to have during your life?
  • [18:09] Take time making large stake decisions
  • [25:50] The tactics are easy if you take these previous steps first

LISTENER QUESTIONS

  • [27:22] The differences between the representative payee program and advanced designation in Social Security
  • [32:20] How to create a discount factor using a household balance sheet
  • [40:09] My thoughts on taking Social Security at 68 instead of 70
  • [41:25] How the IRMAA brackets work
  • [45:30] Reimbursing your Medicare Part B premiums from your HSA

TODAY’S SMART SPRINT SEGMENT

  • [47:05] Map out what kind of financial and nonfinancial legacy that you want to leave

Resources Mentioned In This Episode

BOOK - Retirement Planning Guidebook by Dr. Wade Pfau

SSA.gov/payee

SSA-44

How to Be a Better Advocate for Your Health

LTCI Partners

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Direct download: RAM440.mp3
Category:general -- posted at: 2:00am CDT

When you think about leaving a legacy do you immediately think about passing on your assets? 

What may be more important than passing on money is leaving behind a nonfinancial legacy to those that you love. Have you considered how you will do this? 

If you would like to leave more than just a trust fund to your family then you won’t want to miss this episode of Retirement Answer Man. You’ll learn about setting a nonfinancial legacy objective, plus strategies, tactics, and more.

Should you panic about a bear market?

I just want to acknowledge that it can be challenging to have confidence in your retirement plan right now. We are now in a bear market which means that stocks are down 20% from their highs. That can give you plenty of anxiety, but since that bear market is paired with decreasing bond prices, this can lead to outright panic. 

Now is the time to reflect on your retirement plan. If you have created an objective-based agile retirement plan you will be able to weather this storm. Have confidence in your strategic plan. 

What is the objective of leaving a nonfinancial legacy?

It will be nice to leave money for your loved ones but wouldn’t you like to leave more? 

To truly leave a legacy you need to be an exemplar. An exemplar is defined as one who serves as a role model or an example. 

Even if there is a gap in where you are in life and where you would like to be, your children and grandchildren are learning how to navigate the world based on your example. They emulate you, so being an exemplar is the best nonfinancial legacy that you can create. 

The more you can encourage others the better exemplar you will be. To encourage means to give courage to someone else. Give your loved ones the courage to lead their best lives. Help them on their journey to be their best selves. You can use finances to help others on their journey but encouragement is even more important.

Strategies to use to leave a nonfinancial legacy

Life is full of the mundane, the day today. But the peaks, pits, and transitions are the flagship moments that we remember. These are the moments that influence how we view the world. If you can help someone during one of these moments in their lives, it may go a long way in transforming their future. 

You can help your community by looking out for these moments in their lives and accentuating them. During the peaks, help them to put an exclamation point on that moment in time so that they can look back and reflect on that high. 

You won’t be able to fix their pits, but you can show up and help them through. 

An encouraging word can help mark transitions in ways that you may not predict.

Fill in the pits. Mark the transitions. Celebrate the peaks. This is how to leave a lasting legacy.

Listen in to hear how you can help your loved ones be the best versions of themselves through your nonfinancial legacy. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [3:22] What is the objective of leaving a nonfinancial legacy?
  • [9:05] Strategies for leaving a nonfinancial legacy
  • [17:55] Tactics for creating a nonfinancial legacy

LISTENER QUESTIONS

  • [20:52] How to use a solo 401K
  • [28:28] Should you buy one $10,000 Ibond or multiple smaller amounts?
  • [31:02] The pro-rata rule and Roth conversions
  • [35:35] How can non-sporty people add exercise into their lives?

TODAY’S SMART SPRINT SEGMENT

  • [39:37] Listen to somebody with full presence

Resources Mentioned In This Episode

BOOK - The Power of Moments by Chip Heath

BOOK - Giftology by John Ruhlin

BOOK - Tiny Habits by BJ Fogg

IndividualK.com

Check out Boomer Benefits, their services are free to you!

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Direct download: RAM439.mp3
Category:general -- posted at: 5:37pm CDT

We all want to leave a legacy behind after we pass. The legacy you chose to leave is up to you. This episode is part of a 5 part series on leaving a lasting legacy. Today’s episode focuses on leaving a financial legacy. Make sure to look out for the next episode so that you can learn how to leave a non-financial legacy. 

Subscribe to 6-Shot Saturday

We also have the answers to several listener questions on this episode and many others. To submit your own questions for me to answer on the show simply hit reply to the 6-Shot Saturday newsletter. If you aren't subscribed, consider signing up to receive a weekly summary of the show along with any helpful links or tidbits that I find interesting and want to pass along. 

The difference between estate planning and financial legacy 

Estate planning and leaving a financial legacy are not the same. There is a difference between the two. When you pass away you will leave behind property, financial assets, and maybe some liabilities. Estate planning is the official process of closing the books on your financial life. If you leave behind more assets than liabilities then those assets will have to go somewhere. The probate process spells out how that will work. 

You get to decide how to distribute your assets. When deciding who will receive your assets it is important to analyze the outcomes you are trying to achieve. This process is the way to leave your financial legacy. 

Planning the outcomes 

If you are married, it is important to ensure that your surviving spouse financially secure. That is usually the first consideration in leaving a financial legacy. 

Those that have children often choose to leave their legacy to their children, others choose to leave their bequeath to friends or charitable organizations. It is important to remember that if you don’t approve of the financial trajectory that one of your children is on, you don’t have to enable their poor behaviors. You get to choose who to bless with your assets and how. You do not have to support behaviors that you don’t want to support. There are strategies you can use to help your family while at the same time protecting them from themselves. 

There are obstacles that could stand in the way of achieving the financial legacy outcomes that you desire. Our culture makes discussing money a taboo subject. This could stand in the way of the outcome you seek. Many people avoid planning their legacy and choose to ignore this type of plan. A lack of planning will mean that you won’t achieve the outcome you seek. 

Strategies and tools to leave a financial legacy

When you pass you’ll want to transfer your assets as efficiently as possible. While a will is the first tool that you should have in place, many people are surprised to realize that a will is not that efficient since it must pass through probate. There are other ways that you can pass your assets on to those you love without having to go through the probate process. 

A living trust is a revocable trust that bypasses probate. The trust document not only states who receives the assets, but it can also define how those assets are managed.

Another way to efficiently manage your financial legacy is through beneficiary designations. By designating your beneficiaries in your IRAs and 401Ks these assets will bypass probate and flow to your chosen beneficiaries. Make sure that you revisit your beneficiaries regularly to ensure that they are up to date.

Listen in to hear tactics you can use to leave your legacy both during your life and beyond. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [3:20] Estate planning and leaving a financial legacy are not the same
  • [6:13] What outcomes do you want?
  • [10:45] Obstacles to the outcomes
  • [12:14] Strategies and tools to use to leave your legacy
  • [17:48] Tactics to use to leave a legacy during your life
  • [23:12] The ways you could give

LISTENER QUESTIONS

  • [26:08] Dave’s question on investment classes
  • [35:44] What exactly is the market?
  • [40:11] Carl’s question on selling a large position in one stock

TODAY’S SMART SPRINT SEGMENT

  • [44:15] Be courageous. Act in the presence of fear

Resources Mentioned In This Episode

LTCI Partners

Make sure that you are signed up for the 6-Shot Saturday newsletter!

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Direct download: RAM438.mp3
Category:general -- posted at: 10:00pm CDT

Have you considered the legacy you will leave to those whose lives you touch? Does leaving a legacy need to be financial or something more? 

This month we explore how to leave a lasting legacy in an organized way. You’ll learn the ways that you can leave an enduring legacy during your life and beyond. 

Today we are defining legacy and noodling on what that means both financially and non financially. Next week, we’ll discuss the different strategies that you can use to leave a financial legacy, the following week we’ll explore non-financial legacies, and in the 4th episode of this series, you’ll learn how to create your own legacy strategy. 

Live a life true to yourself

Some people are spurred into retirement because they have trouble compartmentalizing work and so it bleeds into other areas of their lives. They choose retirement to escape the pace of a grueling work life.

However, many high performers experience a lot of guilt upon retirement. They may feel an obligation to their team or their clients to continue working and feel held back by other people’s expectations, but living a life true to yourself means letting go of others’ expectations. 

Learn how to not just survive retirement, but gain the confidence to rock retirement. Sign up for the 6-Shot Saturday newsletter to receive a weekly email with a summary of the answers to the questions from the show, plus links, tools, books, and other resources that will help you on your retirement journey

What do you think of when you hear the word legacy? 

When you hear the word legacy do you simply think of money or does legacy mean something more? 

My mom died young–she was only 48 when she passed. When I think back on her legacy I don’t consider the check I received from the lawyer a few months later. Instead, I am reminded of our conversations and debates on how best to live life. You could say that this podcast is an indirect result of her legacy. 

Mom insisted on living a life of delayed gratification so that she could save for the future–a future that she never got to enjoy. I argued that living life in the present was the way to go. However, finding a balance between living well today and delaying gratification is the best way to live a life without regret. Ultimately, that is what this podcast is all aobut. 

What does legacy mean? 

The dictionary defines legacy as money or property given in a will, or something handed down from an ancestor. 

When you die you will leave a legacy. What you choose to leave behind is up to you. 

A nonfinancial legacy includes lessons, memories, and experiences that you share with others. How are you actively working to build a nonfinancial legacy in retirement? 

A financial legacy could be money, property, or other mementos that generally come to your loved ones in a sterile way. A financial legacy could give your heirs the financial fuel they need to get started or continue on their journey through life. Make sure to tune in next week to hear what tools you can use to build your financial legacy. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [5:35] What do you think of when you hear the word legacy?

LISTENER QUESTIONS

  • [14:48] A Daily Stoic blog post
  • [16:14] Responses to Wendy’s question about postponing travel
  • [19:03] A Roth conversion question from Joel
  • [22:22] Joe’s question on planning for inflation
  • [27:12] What should Joe’s CFP be doing in response to the current market conditions?
  • [33:02] Where I learned to fly fish in Colorado

TODAY’S SMART SPRINT SEGMENT

  • [34:17] Expand your thinking on legacy

Resources Mentioned In This Episode

Legacy Is Not for You from the Daily Stoic blog

Boomer Benefits - check out their FREE 6-day mini-course!

Episode 429 - Should I Retire Earlier If I Have Health Issues?

IRS Publication 505

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

 

Direct download: RAM437.mp3
Category:general -- posted at: 2:00am CDT

Navigating the healthcare world in this day and age can make your head spin. It is hard to understand what to believe and what not to believe since there are so many voices telling you their interpretation of the facts. 

This is why it is important to build a healthcare framework from which to operate. Your healthcare framework will ensure that you get your questions answered so that you can make the best decisions for your health. Building a healthcare decision-making framework is similar to the framework we build for making financial decisions. 

Dr. Bobby Dubois joins me again today for the last episode in the Functional Health to Rock Retirement series to discuss how to approach medical problems both conceptually and with your doctor. You won’t want to miss this important conversation, so press play to listen. 

Building a relationship with your primary care physician can help you feel confident in your healthcare decisions

Whether you are dealing with a small, medium, or large medical problem it is important to ensure that you receive the right care. The right diagnosis leads to the right procedure, but that all begins with ensuring that you have the right healthcare provider. 

Many of us don’t have relational currency with our doctors anymore. Gone are the days of the doctor who has treated us and our family for ages. These family doctors have been replaced by the managed care model. 

Even if you haven’t been seeing your primary care doctor for long, you can try and build a relationship with them that puts them in the quarterback position of managing your overall health care. Listen in to hear how.

If this isn’t a possibility you may want to look into finding a concierge doctor. Concierge medicine is an emerging industry that may be beneficial to retirees. For an extra yearly fee, these doctors offer personalized care and direct access since they limit their patient load.

Use a systematic way to build a healthcare decision-making framework

We all want to embrace life physically for as long as possible; however, at some point in our lives, we are all going to face medical challenges. How you choose to confront those challenges could be critical to overcoming them. This is why it is important to have a framework in place for dealing with health issues. It is important to approach medical problems in a systematic way so that you can organize your decision-making.

Building a strong framework starts with asking the right questions

To ensure that you get the right care you must be more than just a passive patient you need to be an active consumer that asks the right questions. 

Rather than creating a list of 100 questions, try to boil them down to 2-4 questions. Understand that doctors operate on a tight schedule, so it can be helpful to let them know that you have questions in advance. You can do this by sending them an email or handing your typed questions to the nurse at the beginning of your appointment. This way you are being proactive yet respectful of their time.

After receiving a diagnosis ask your doctor these questions:

  • How long will it last?
  • How severe is it?
  • How resilient am I?

After discussing treatment options you can ask these questions:

  • Why do I need this (procedure, surgery, medication…)?
  • What happens if I don’t do it?
  • Are there alternatives?
  • What are the risks associated with this treatment?
  • What is the (out of pocket) cost? 
  • What are the costs of the alternatives?

Asking your doctor, how often do you see this? can help you to decide whether you should get a second opinion.

Remember when putting together your framework for answering questions that a good theory is not evidence. Make sure that there is evidence that the treatment will work. A great question to ask is what is the evidence that supports this theory?

The journey of rocking retirement starts with your feet–take that baby step in the right direction now to continue toward your goal of rocking retirement.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING WITH DR. BOBBY DUBOIS

  • [4:06] How to approach medical problems with your doctor
  • [12:25] Ensure that you get the right treatment
  • [19:43] Questions to ask to build a framework
  • [25:50] Randomized trials vs observational studies
  • [31:12] A case study to understand how to talk to your doctor
  • [40:02] A summary of functional health to rock retirement

LISTENER QUESTIONS

  • [43:33] How to characterize home equity in planning
  • [49:27] On using an advisor for money management vs. keeping assets in a 401K

COACHES CORNER WITH KEVIN LYLES

  • [56:47] 4 questions to consider to 

TODAY’S SMART SPRINT SEGMENT

  • [1:10:30] Brainstorm a few of these steps to integrate into your life

Resources Mentioned In This Episode

Galleri Cancer test

Oura Ring

WHOOP

Dan Miller 48 Days to the Work You Love

BOOK - Younger Next Year by Chris Crowley

BOOK - The Expectation Effect by David Robson

Andy Panko at Tenon Financial

LTCI Partners

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Direct download: RAM436.mp3
Category:general -- posted at: 2:00am CDT

All this month we have been discussing functional health so that you can ensure your body works well enough to rock retirement. Last week we learned how finding the right exercise plan can help you stay strong enough to do all the things that you want to do when you retire.

Today, we learn about the opposite side of the functional health coin: nutrition. You probably know that nutrition should be an important part of your overall health plan, but with so many conflicting diets out there how are you supposed to know what you should eat? 

Listen in to hear what functional health expert, Dr. Bobby Dubois recommends to maintain proper nutrition in retirement. 

It’s easy to fall into a nutrition rabbit hole

If you head to the bookstore or ask a question on Google, you’ll quickly realize that there are tons of rabbit holes that you can fall into when it comes to nutrition. How can there be so many different ’right ways’ to eat?

Before starting the cantaloupe diet or another such extreme measure it is important to understand the science that goes into nutrition. 

Why evidence-based nutrition is important

Many fad diets are based on strong emotions and faux science rather than evidence-based science. 

Science is a process by which scientists answer questions. First, they come up with a hypothesis and then design a study to prove or disprove that hypothesis. Next, they test their study.

Just because a scientist may come up with a beautiful theory doesn’t mean that they have any evidence to back it up. For years scientists figured that people with high cholesterol should restrict their cholesterol intake, but science has recently shown that the cholesterol we eat has little effect on the overall cholesterol in our bodies. 

Unfortunately, nutrition is a field that has been based on a lot of bad science. It has had plenty of strong theories but little evidence to back up those theories. 

Scientists all agree that obesity can lead to heart disease

One area of nutrition that scientists can agree upon is that being overweight or obese can lead to heart disease and, ultimately, death. This is why it is important to maintain a healthy weight. 

Maintaining a healthy diet can help you stay at a healthy weight and help your body move more easily. Taking control of your diet can give you agency and help you make a change in your life.

Rather than focus on the small details of what you should eat or not eat, it is more important to plan a basic diet. Since every person’s body works differently, a great way to choose the ‘right’ diet is to test it out for yourself. What works for someone else may not work for you. 

How to construct the ‘right’ nutrition plan

It is important to have some humility when it comes to understanding nutrition. Scientists don’t know as much as they should and no one has the perfect nutrition plan, so you should be skeptical of anyone that claims to have the perfect nutrition plan. 

What we do know is that obesity is a big issue. This is why maintaining a balanced diet of ‘real’ foods is important. Try to shop around the rim of the grocery store to avoid the processed foods that lie in the middle. 

Next week, you’ll learn more about how to build a functional health framework so that you can rock retirement. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT WITH DR. BOBBY DUBOIS

  • [7:10] There are many rabbit holes you can chase surrounding nutrition
  • [14:13] What to focus on in nutrition
  • [16:37] How to know what kind of nutrition is good and what’s bad?
  • [26:58] How the placebo effect can affect diet
  • [31:28] Having proper weight is important
  • [41:20] Takeaways

LISTENER QUESTIONS

  • [44:10] A Windfall elimination program question
  • [47:20] A retirement regret observation
  • [50:26] How to prepare a ‘death manual’ for a spouse

TODAY’S SMART SPRINT SEGMENT

  • [57:30] Start preparing a nutritional framework using guiding light principles

Resources Mentioned In This Episode

EverPlans

BOOK - Checklist for My Family by Sally Balch Hurme

Dan Miller

BOOK - How to Lie with Statistics by Darrell Huff

Boomer Benefits

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Direct download: RAM435.mp3
Category:general -- posted at: 2:00am CDT

You may think that having saved a nice nest egg and having a purpose will ensure that you are all set to rock retirement. Unfortunately, you need to think again. Without functional health, you may not be able to enjoy your retirement savings and purpose. 

Creating a specified exercise plan can ensure that you develop the functional health necessary to do all the things you want to do so that you can rock retirement. Listen to this episode with Dr. Bobby Dubois to learn how to cultivate an exercise plan that will help you accomplish your goals. 

Don’t let the economy derail your retirement plan

Watching the news these days can derail your confidence in rocking retirement. A combination of continued inflation, rising interest rates, and falling stock prices are downright scary when you’re in or approaching retirement. Uncertainty is not something that pairs well with carefully thought-out retirement plans. 

Some of us think that more data will help us better our plan for the future. However, no one knows what the future holds. Is this all just a blip on the economic radar or is it the start of something bigger?

The only thing that remains consistent over time is our values. We can use our values as a guiding light to help us make decisions–especially when everything else is so unpredictable. Basing your decision-making on your values will help you stay agile and apply the protocols you have laid out that will see you through troubling times. Your values are the key to bolstering your confidence in your plan so that you can relax and rock retirement. 

Why is exercise important to retirement?

You already know that you have to have financial means and meaning to rock retirement, but you won’t be able to enjoy either of these things if you don’t have the ability to do everything you want to do in retirement. 

Your body changes as you age. It starts to deteriorate and that deterioration is noticeable in the blood vessels, bones, and muscles. The depressing reality is that you are fighting a losing battle with your muscle mass. However, you can get ahead of this decline with exercise. 

Many people are familiar with the concept of doing crosswords and puzzles to keep their minds agile and you can use exercise much in the same way. By starting the aging process with more muscle strength, flexibility, and cardiovascular endurance you will be ahead of the game once mother nature kicks in. Regular exercise protects your body and makes it more resilient so that you can maintain function as you age. 

Steps to take to form your exercise plan so that you can rock retirement 

Developing the right exercise plan starts with envisioning where you want to be in 10-20 years. Think about what you want to be able to do in the future so that you can understand the body that you will need. Consider the muscle groups, strength, balance, and aerobic stamina you will need. Next, analyze what kind of exercise you are doing now to help you reach this goal. Lastly, consider how you can fill in the gaps and start working on the specific movements that will help you achieve your goals. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT WITH DR. BOBBY DUBOIS

  • [9:25] Why is exercise important to retirement?
  • [18:44] Think about where you want to be in 10-20 years
  • [24:44] Generic exercise helps improve the length of life
  • [32:05] Balance is an important area to work on
  • [33:55] How intensely should you focus on this?
  • [36:13] How to factor in limitations to our exercise plan
  • [39:20] Anaerobic strength requires a different set of muscles
  • [42:42] Steps to take to form your exercise plan to rock retirement 

LISTENER QUESTIONS

  • [45:09] You can withdraw your Roth contributions any time without penalty
  • [47:14] Questions to ask your financial planner as you approach retirement
  • [58:09] My thoughts on the pros and cons of closed-end mutual funds

TODAY’S SMART SPRINT SEGMENT

  • [1:12:45] Evaluate your exercise regimen

Resources Mentioned In This Episode

Don’t miss out on the live webinar on May 19! Register at LiveWithRoger.com

Anna Greenberg Yoga

LTCI Partners

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM434.mp3
Category:general -- posted at: 2:00am CDT

Purpose and finances are two important legs of the retirement stool; however, a stool needs 3 legs. Finances and dreams don’t mean anything if you can’t function well enough to enjoy them. 

The often-overlooked leg of the retirement stool is functional health–which is why this month we are focusing all 4 episodes on how to improve your functional health in retirement. 

Since I am not a health expert, I have invited Dr. Bobby Dubois to join me for this relevant discussion. This week Bobby helps me define exactly what functional health is and why it is important to retirement. In week two we’ll explore exercise and movement followed by week three’s examination of nutrition. 

On the last episode of this series, you’ll learn how to create your own functional health plan to help you navigate this essential part of your retirement plan. Press play to learn how important functional health is in retirement. 

What is functional health?

We have seen a tremendous increase in longevity over the past 50 years. Now, it is not uncommon for people to live 90+ years. While longevity gives people quantity of life, functional health gives quality of life. Without investing in your functional health you will live longer but your life will suck more. 

When you are young you can do anything–play a round of pick-up basketball, hike up a mountain, or paint your house. But as you age you quickly learn that you aren’t in shape for everything anymore. Since you lose 1-2% of your muscle mass each year starting in your 30s, by the time you reach your 60s you may not be able to do these same activities with ease. 

The happiest retirees are those that have a high quality of life and the ability to do the things they want to do. Functional health doesn’t train you to run marathons or win bike races–unless those are goals that you have for your retirement. Instead, functional health can help ensure that you can pick up your grandkids, lift carry-on luggage over your head and into the compartment, or climb ancient cobblestone steps in Europe. 

How to set up a framework for functional health

The best part of functional health is that you have control over how healthy you want to be. Setting up a functional health framework is much like the rest of retirement planning. You will begin with the end in mind. Who do you want to be in your last decade of life? What do you want to be doing when you are 90? Do you still want to be able to golf or hike? Or do you just want to be able to make it to the bathroom by yourself? Whatever your goal is, start from there. 

Be precise in setting your goals and creating your plan. Just like with a financial retirement plan, you’ll want to personalize your plan based on your goals. Traditional advice, like working out 30 minutes a day 3 days a week or walking 10,000 steps, isn’t the way to achieve your functional health goals. A one size fits all plan won’t work for your health plan just like it won’t work for your retirement plan. 

Next week, we’ll explore ways that you can use exercise and body movement to achieve your functional health goals. If you have a question or thought regarding functional health respond to the 6-Shot Saturday newsletter or hit the Ask Roger button at RogerWhitney.com to leave a voicemail question. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING WITH DR. BOBBY DUBOIS 

  • [4:56] Why Dr. Dubois volunteered to discuss functional health on the show
  • [9:54] You have to put money in your physical bank to enjoy the life you want to live
  • [13:05] What is important to physical health?
  • [15:34] What is functional health?
  • [19:07] How to set up a framework for functional health

LISTENER QUESTIONS

  • [28:18] When to convert from tax-deferred accounts to Roth
  • [34:45] An SIPC protection question
  • [37:45] Use the Social Security detailed calculator to personalize your earnings
  • [40:07] To pay or not to pay off the mortgage

TODAY’S SMART SPRINT SEGMENT

  • [44:37] Think about how well rounded your health regimen is

Resources Mentioned In This Episode

Register for the live webinar on May 19 at LiveWithRoger.com

Boomer Benefits

Social Security detailed calculator

Episode 407 - Retirement Planning Guidebook With Wade Pfau 

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM433.mp3
Category:general -- posted at: 2:00am CDT

Does inflation have you worried about retirement? If so, you’re not alone. A couple of listeners are looking for ways to inflation-proof their retirement. Can you inflation-proof your retirement?

I’ll answer these questions and many more on this episode of Retirement Answer Man. But before we get to our current listener questions we’ll take a look back at a question that was asked earlier this month. I asked you all to help me answer it and today you’ll hear the responses.

Listeners’ responses to Wendy’s question 

On episode 429, Wendy asked for my thoughts on increasing her savings with the goal of retiring early or whether she and her husband should enjoy life now and travel more given her husband’s recent bout with cancer. After giving my thoughts on the matter, I turned the question over to all of you and I received many responses. 

One listener remarked that their 1 million dollar savings wouldn’t be enough to fund an early retirement when considering long-term care and health costs. 

Another listener, Craig, retired early at 62 and regrets not working longer. He feels bored and wishes that he had worked longer while slowing his savings rate. 

Joe took 3 months off of work, then started back to work part-time. He reminds us that we don’t have to choose between work and retirement. By working a flexible or limited schedule you can take advantage of pretirement and enjoy the best of both worlds. Retirement doesn’t have to be binary. Retirement isn’t about getting to a date–it’s about making the most of the time you have.

Kate retired at 56 and is bored. She advises planning how you will create your new life and spend your time in retirement. 

Choices don’t have to be black and white–find a way to work with the grey areas

While Wendy’s question was posed as a choice between two options, it is important to remember that you can go back and forth between the two. Things don’t have to be black and white. You can increase your savings a bit while increasing travel and living life to its fullest now. Don’t wait until retirement to enjoy life since no one is promised tomorrow. We must all live for today while doing our best to make the most out of tomorrow. 

Listen in to hear Kevin Lyle’s ideas on how to blend work into your retirement plans. 

Can you inflation-proof retirement?

Since inflation has continued to rise more and more people are looking for ways to inflation-proof their retirement. Dave is looking at taking a mortgage on his house so that he can buy rental properties and another listener is curious about using gold as an inflation hedge. 

A couple of months ago we did a month-long series on inflation in retirement. You can start the first episode of the series here. In episode 423 we explored several inflation-fighting tactics you can use to enhance your retirement strategy. Some of those were I bonds, TIPS, money market funds, and utilizing debt instead of cash to make large purchases. 

It is important to understand that no retirement plan is inflation-proof. What you can do is ensure that you have a sound retirement strategy in place before rushing into any major decisions. Walkthrough your process and see how the choices align with your values and fit into your retirement plan. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [3:40] Looking back at your responses to Wendy’s question from earlier this month

LISTENER QUESTIONS WITH KEVIN LYLES

  • [11:27] A blended retirement question

LISTENER QUESTIONS WITH NICHOLE

  • [20:44] Should Dave take on a mortgage to buy rental properties?
  • [24:30] Is gold a good way to fight inflation?
  • [27:55] The 5-year rule and opening of 2 separate Roth IRAs
  • [29:41] Moving a 401K to a Roth IRA before retirement
  • [31:43] Should Roy liquidate his stock options into cash and buy a 2nd home?
  • [35:55] A rule of 55 question
  • [39:03] Sally wants to consolidate accounts and buy crypto how should she do that/

TODAY’S SMART SPRINT SEGMENT

  • [44:26] When trying to decide how to balance life today with saving for tomorrow remember that tomorrow isn’t promised to anyone

Resources Mentioned In This Episode

Don’t miss the live webinar on May 19!

Episode 423 - What Investments Help Protect Me from Inflation?

LTCI Partners

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM432_1.mp3
Category:general -- posted at: 2:00am CDT

Today we are continuing our month-long series of listener questions. On this episode, you’ll hear questions about Roth conversions, interest rate-hedged ETFs, pension payments, and the value of dividends as a source of income in retirement. If you are ready to gain the wisdom that you need to rock retirement, press play now.

Time to pull out your May calendars

Next month we will be focusing on functional health in retirement. You’ll learn what you can do now to get your body in the right place so that you can do all the things that you have dreamed of in retirement. You won’t want to miss the interview we have lined up with a functional health expert, so be on the lookout for this series coming up in May.

While you’re planning what to listen to in May, mark your calendar for May 19 at 7 pm CDT for our live webinar. During this interactive session, we’ll be chatting about the market and inflation, I’ll answer some retirement questions, and we’ll discuss the Rock Retirement Club’s open enrollment of the spring 2022 cohort.

In this live webinar, you’ll learn more about our inclusive online community of more than 800 members where you can create your financial plan, take masterclasses, and attend online meetups on financial and non-financial topics. If you are looking for a way to meet new, like-minded people in the same situation as you and supercharge your retirement, don’t miss out on the May webinar to hear more about the Rock Retirement Club. 

How to calculate a pension on a net worth statement

One listener has a question regarding pensions on their net worth statement. A net worth statement is a financial statement that lists your assets in one column and liabilities in another. By subtracting your liabilities from your assets you can calculate your net worth.

Up until now he has included the lump sum of his wife’s pension in the assets column, but she will soon start collecting her monthly pension, so he no longer knows where to calculate the pension. 

Once you start collecting your monthly pension, you no longer have an asset. Instead what you have is social capital–similar to your Social Security benefit. Social capital doesn’t belong on a net worth statement; rather, it can be included on a household balance sheet. We use household balance sheets in the Rock Retirement Club when calculating projected retirement budgets. 

Are interest rate-hedged ETFs a good idea?

Interest rate-hedged ETFs trade like stocks and hold like bonds. However, rather than being organic financial products, interest rate-hedged ETFs use derivatives to hedge price movements as interest rates rise. 

While these ETFs are a great idea, in theory, one problem is that much of your cost in buying these funds goes to the derivatives. Since these ETFs are manufactured and don’t naturally occur, they can be quite costly. Try to avoid these synthetic tools in your investments. 

Instead of using interest rate-hedged ETFs, you can look at purchasing TIPS (Treasury Inflation-Protected Securities) or I bonds. Another way to achieve the same goal is to build a bond ladder. Listen in to hear how a bond ladder works to see if that would be a good solution to building the bond portion of your pie cake. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [2:47] My recent win
  • [4:46] My morning routine

LISTENER QUESTIONS

  • [7:52] Calculating a net worth statement
  • [10:45] Are interest rate-hedged ETFs a good idea?
  • [15:40] Where to put a lump sum payment so that you wouldn’t have to pay the taxes all at once
  • [17:35] Does the 5-year rule apply in a backdoor conversion?
  • [20:12] The value of dividends as a source of income in retirement

TODAY’S SMART SPRINT SEGMENT

  • [24:20] Write it out – Today is the day…

Resources Mentioned In This Episode

Boomer Benefits

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM431.mp3
Category:general -- posted at: 2:00am CDT

This is a fantastic time to enjoy a pretirement tailwind. If you have ever considered using pretirement as a gateway into full retirement, the job market is desperately searching for experienced talent. Listen in to discover how this cultural shift in the workplace could benefit your retirement plans. 

On this episode, you’ll also hear the answers to a number of questions from listeners like you. If you are worried about how to shift from saving to spending, wondering how to plan for taxes in retirement, or how RMDs work for married couples then make sure to press play to hear the answers to these questions. 

Retirement is not binary

Traditionally, retirement is considered to be the opposite of working. You work 40 years or so then one day you stop and retire. However, in today’s world, this does not have to be the case.

There are plenty of ways that people can incorporate a pretirement phase before retiring fully. I like to call part-time work, consulting, or working a flexible schedule before full retirement pretirement. Pretirement can be a great way to ease into retirement while still benefiting from staying engaged in the working world.

Companies are more flexible than ever before

The pandemic reframed the way people work. Companies experimented with remote work and flexible schedules and many corporations that tried to reinstate traditional office work ended up seeing pushback from employees.

This shift has created a talent shortage in many fields which has led to a desperate need for qualified, accomplished individuals to fill various positions. Since corporations are struggling in their search for skilled labor, many are rethinking their cultural rigidness and becoming more flexible. 

Many companies have realized that employees can be just as productive or even more so by working from home or on a flexible schedule. This corporate cultural shift has led to a huge opportunity for those that are seeking alternatives to traditional retirement. 

How to explore pretirement

If you have been considering retirement, but aren’t sure if you are ready, consider exploring the boundaries with your current employer. You may be able to negotiate a 3 day a week schedule or a 100% remote position. 

If you have already retired and would like to enjoy the stimulation of working without the limitations of a full-time schedule, now is a great time to cash in on your career capital by reaching out to your network to explore your options. 

You may discover the right part-time, consulting, or contract position that allows you the time freedom of retirement while enjoying the mental stimulation and income of the working world. 

How to go from being a saver to becoming a spender?

Since you have been saving for retirement your entire working career, making the transition to spending that savings takes a huge shift in mindset. One reason for this is the money scripts that we have ingrained in our minds since childhood. Money scripts are the stories we tell ourselves about money. Changing your money scripts will not happen overnight. 

In retirement, you will have to transition from saving to spending, but this isn’t as easy as flipping a switch. It is a process that you will slowly become comfortable with as you ease into your new life. It will take time, but slowly you will lean into the changes in your life and you will become comfortable with your new life rhythm. Listen in to hear how you can make the shift in mindset from a saver to a spender. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [1:30] Enjoy the pretirement tailwind

LISTENER QUESTIONS

  • [7:08] How to go from being a saver to becoming a spender
  • [12:55] Why Bob is lamenting being born in 1960
  • [15:41] How to access a solo 401K plan
  • [17:56] Deciding whether to keep a group universal life plan after retiring
  • [21:10] How to include taxes as future liabilities
  • [24:33] RMDs for married couples

TODAY’S SMART SPRINT SEGMENT

  • [25:27] Reframe the idea that retirement is binary

Resources Mentioned In This Episode

 

LTCI Partners

BOOK - So Good They Can’t Ignore You by Cal Newport

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM430.mp3
Category:general -- posted at: 2:00am CDT

Making retirement decisions brings plenty of questions and over the next month, I’ll be tackling your retirement questions. While I love answering your questions, I also enjoy hearing your thoughts. In today’s episode, there are a couple of questions that I’d love to hear your feedback on. If you have any thoughts to share with other listeners please respond to the 6-Shot Saturday newsletter. If you’re not signed up, head on over to RogerWhitney.com and scroll down to the bottom of the page to get weekly tips, news, and resources in your inbox every Saturday morning.

Deciding to spend large sums of money in retirement can be unnerving

Early on in retirement is when people want to have the most fun, but it can also be the most daunting time to spend money. Even if the numbers say that you’ll be ok financially, you can never be certain if you may need that cash when you’re 90. Making the decision to spend large amounts of money in retirement can be daunting.

I got to thinking about decision-making recently when I wrote the biggest check I have ever written. This check will (hopefully) be an investment in my business, but it was still a difficult decision to make that took a lot of thought and counsel from others. 

How I employ my own decision-making tactics

I actually practiced what I preached and used the same decision-making process that I teach on the show. I started with my vision by projecting where I want to be in the future. I thought about how this decision fits into my long-term goals for myself and my company. Then, I got to thinking about the result that I hoped for as well as the worst-case scenario. 

I seek the counsel of others

Since I know I have blind spots in my own decision-making when it comes to myself and my business, I enlisted the help of others to bounce my ideas off of. I started with my wife, Shawna, then sought counsel from Nichole, and others that understand my situation. I encouraged them to challenge my assumptions and poke at my blind spots. We walked through alternatives and discussed opportunity costs. Ultimately, it was up to me to make the judgment call. I won’t know for quite some time whether I made the right decision, however, I know that the process that I used to make this decision was sound. 

With the right process, you can be secure in your decision making

I share this with you, because you may be wondering if you should spend $30,000 to take an epic family trip next year, buy that vacation home, or RV across the country. The memories you create may be well worth the money, but you won’t know if you made the right choice until you reach the end of the road. Nobody can tell you what the correct decision will be for you, but if you work through your decision in an organized way starting with your vision then you’ll know that you made the best decision that you could. 

Speaking of big decisions, Wendy is trying to decide whether to increase her savings now that she and her husband will be empty nesters. Or should they continue to save for retirement at the same rate while taking time to travel and enjoy more of life now while they are both still healthy? Listen in to hear the details of her situation and then let her know what you think by responding in our 6-Shot Saturday newsletter. What would you do if you were in her shoes?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [1:32] My process as I work through a big decision

LISTENER QUESTIONS

  • [11:05] Daniel’s comment on needs, wants, and wishes and my response
  • [14:22] A consideration on relocating in retirement
  • [17:10] Travel now or increase savings and retire early?
  • [20:50] Bond accrual structural strategy
  • [22:24] A Roth conversion question
  • [26:06] On retirement regret

TODAY’S SMART SPRINT SEGMENT

  • [31:46] Check out our decision-making worksheet in 6-Shot Saturday

Resources Mentioned In This Episode

Boomer Benefits

PODCAST - Deep Questions with Cal Newport 

Episode 402 - The Tax Toolbox with Andy Panko

Episode 416 - Retirement Plan Live: Why We Moved

Episode 426 - How to Plan Your Agile Retirement: A Feasible Retirement Strategy

BOOK - Wooden: A Lifetime of Observations and Reflections by John Wooden 

BOOK - Born Standing Up by Steve Martin 

BOOK - So Good They Can’t Ignore You by Cal Newport

BOOK - Unstoppable Teams by Alden Mills

BOOK - Antifragile by Nassim Nicholas Taleb

BOOK - The Way I Heard It by Mike Rowe

BOOK - How to Decide by Annie Duke

BOOK - Grit by Angela Duckworth

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM429.mp3
Category:general -- posted at: 2:00am CDT

“In preparing for battle I have always found that plans are useless but planning is indispensable.” Dwight D. Eisenhower

Ike is reminding us that the plan is not as important as the process. It is the practice of planning that is critical to success. You’ll never have everything figured out since the perfect retirement plan doesn’t exist, but by planning and staying agile you will be able to correct your course along the way. 

This month we have gone from theory to practice to mastery. On this episode of the Retirement Answer Man show, you’ll learn how to optimize your feasible, resilient plan so that you can rock retirement. 

Have a feasible, resilient plan in place before trying to optimize

Most retirement planning blogs and articles focus on optimization since optimizing retirement plans is the bling of financial planning. 

However, without first having an inspiring goal for your retirement, you wouldn’t have the hope of rocking retirement. It is important to start with a goal at the beginning to ensure that you build a feasible, resilient plan before trying to optimize your retirement plan. Remember that you create a retirement plan to help you focus on achieving the life outcomes that you have envisioned for yourself in retirement not to find the best Roth conversion strategy or qualify for ACA credits. 

Retirement tax planning is the best way to optimize your retirement plan

There are so many ways that you can optimize your retirement plan that it can end up being an infinite pool of possibilities. So you may be wondering what the best way to enhance your retirement journey is. The biggest way you can optimize your retirement journey is through tax management. 

In retirement, you have more control over your taxes than at any other time in your life. This means that instead of planning your taxes from year to year, you now have the capability to plan for lifetime tax savings. Retirement tax management is not about avoiding taxes, instead, it's about timing your taxes

You can plan your withdrawal strategy to optimize for taxes not just for this year but in the future as well. By forecasting your tax rate over the next 5-8 years using a traditional withdrawal approach you can gain an idea of what your RMDs will be once you turn 72. 

From there you can work backward to see if it would make more sense to do Roth conversions and pay more in taxes now so that you don’t have to withdraw so much later on in life. Listen in to hear how working backward can ensure that you focus on where you are going rather than where you are now.

Timing your Social Security benefit is another way to optimize your retirement plan

Social Security timing is another area that is important to think through in an organized way. Once you understand your withdrawal strategy then you can analyze where your Social Security benefits fall into your pie cake structure. 

Establish a retirement plan of record

Once again it is important to start with the end in mind. As you revise your retirement plan it is important to create an abstract with a summary of all the decisions you have made so that you can have a log of how everything plays out within the context of your thinking. This method will give you the framework to see how your decisions fit together over time. 

Every 6 months you’ll want to revisit your plan and ask yourself what has changed. Are your goals still the same? If not, then you can realign as needed. By revisiting your plan you can focus on the risks and opportunities that lie ahead. Try to set action items that focus on 1 or 2 of these risks and opportunities. This will give you an inspiring goal to work toward, the agency to achieve it, as well as the confidence to rock retirement. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [5:53] What can you do to enhance this journey?
  • [6:12] Tax management is the biggest thing you can optimize
  • [14:42] Should you try to get ACA healthcare subsidies?
  • [16:21] Take a look at Social Security
  • [20:55] The little conversations

LISTENER QUESTIONS

  • [23:37] Why should you use your house on your net worth statement?
  • [25:46] On using the strategic assumption of no inflation
  • [28:17] A Social Security timing question
  • [30:08] An observation on inflation
  • [33:23] Using caveats on Roth conversions
  • [36:34] How to report decreased income to Medicare

TODAY’S SMART SPRINT SEGMENT

  • [41:04] Map out the process that you want to take to walk through your strategy in a fresh way

Resources Mentioned In This Episode

Form SSA-44

Episode 402 with Andy Panko - The Retirement Tax Toolbox

LTCI Partners

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM428.mp3
Category:general -- posted at: 2:00am CDT

Now that you have come up with a retirement vision and learned to create a retirement plan that reflects your vision it’s time to make your plan agile. On this episode, you’ll learn why you need to have an agile retirement plan and how to make your plan resilient to the unexpected forces that could derail your retirement plans. Make sure to stick around until the end of the episode to hear BW talk about why it’s so important to master the fundamentals of retirement planning.

Don’t get overwhelmed by retirement planning

Over fast few months I’ve been working with a project manager to create an SOP (standard operating procedure) for Agile Retirement Management. This is such a huge project and it can be easy to get overwhelmed. But just like planning your own retirement can be complicated and overwhelming when you break the giant project into smaller actionable steps, it becomes more manageable. Walking through baby steps one by one takes away a bit of the overwhelm that can come with such a grand project.

Creating a resilient plan will help you prepare for the unexpected 

In the last episode, you learned how to turn your retirement vision into a feasible plan. But just like with any plan, it can be easy to knock your retirement plan off course. This is why it is important to create a resilient plan. Incorporating resiliency into your plan will help you to prepare for the unexpected. 

What could knock you off course on your retirement journey?

There are many things that could derail your retirement. Sequence of return risk is one. The markets don’t provide the same returns each year and these ups and downs can greatly affect your retirement–especially if there are a few bad years at the beginning of retirement. Those bad years could easily knock your retirement plans off course. 

Inflation is another issue. As we discussed all last month, inflation over time can put a dent in your purchasing power. 

Unplanned life events have a way of sneaking up and catching us off guard. Illness, death, long-term care events, or children in need are further events that could impact your retirement plan. 

The most common disruption of retirement plans is you. You may simply change your mind. Since you are always changing your needs, wants, and wishes change over time. 

Listen in to hear how you can make your retirement resilient against all of these bumps in your retirement road. 

How to develop slack in your retirement plan

It is important to have slack built into your system. Similar to the way that a very taut rope may break if you try to adjust it, we need to ensure that there is a bit of slack in the line of your retirement plan so that you can ensure that your desired life outcomes are feasible. When you press play you’ll hear how building a pie-cake can help you create slack in your retirement plan. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [3:08] You don’t need to get overwhelmed by retirement planning
  • [5:05] You need to create a resilient plan to prepare for the unexpected
  • [7:10] Why you need slack in your retirement plan
  • [12:12] The difference between the return on your money and return of your money
  • [14:32] How to build resilience into your retirement plan
  • [25:27] How the pie cake can help you build resiliency in your plan

COACHES CORNER WITH BW

  • [32:45] Kevin’s experience with pivoting in retirement

TODAY’S SMART SPRINT SEGMENT

  • [40:39] Understand how much liquidity you have on your balance sheet

Resources Mentioned In This Episode

Boomer Benefits 

DISC assessment

Enneagram

RISA retirement profile

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM427.mp3
Category:general -- posted at: 10:50am CDT

“Our mind is dyed with the color of our thoughts”--unknown. If this is true, then how are you thinking about retirement in the right way? To have confidence in your retirement plan you need to be thinking about the things that you can control and focusing on what has the biggest impact on your life. 

On this episode of Retirement Answer Man, you’ll learn how to create a feasible retirement strategy by analyzing your goals against where you are now. You’ll then learn about the three types of capital and how to build a net worth statement so that you can create a retirement plan of record. You won’t want to miss this important stage in developing your retirement plan, so press play now. 

Contrast your goal with where you are now 

According to the latest goal-setting research, merely setting goals alone isn’t that empowering. It is important to cast your vision; however, you also need to contrast your goal with your current state of affairs. This way you can see where the gaps lie. These gaps may make you uncomfortable, but acknowledging the incongruency will help you understand how far you need to go to reach your goals. This way you can also start collecting the little wins that inch you closer to your goals. 

The 3 types of capital to fund your retirement 

To create a feasible plan of record, you have to examine the resources that you have to fund your spending. To do this, you need to understand the different types of capital available to you in retirement. 

The first resource to consider is your social capital. Social capital is the payments you receive from a collective program like Social Security or a pension. These are guaranteed payments for the rest of your life. You’ll need to have a good estimate of what those payments are and when they start.

Human capital is next. You may not realize it, but you have used human capital as your primary resource for your entire working life. Human capital is the work you use to create income. 

Traditionally in retirement, this resource is absent, but many people now choose to work differently during, what I call, pretirement. You may choose to do a bit of consulting, open a small business, or do some part-time work for a few years. No matter how small the income may be, include it in your plan of record. Project when will it start, when will it end, how much you plan to make. 

Whatever human capital and social capital don’t pay for has to come from your financial capital. Your financial capital is simply your money. You will need financial capital to fill the gap between your retirement goals and your projected income. 

You can gain a better understanding of your financial capital by creating a net worth statement. Make sure you’re signed up for this week’s 6 Shot Saturday newsletter to receive a net worth statement template that you can use to create your own. 

How to know whether your plan is feasible

To understand whether your plan is feasible you’ll need to create your net worth statement by listing your assets and your liabilities. Even if you have no debt, you’ll want to list your future consumption as a liability to understand how your assets and liabilities balance out. By comparing both sides of the net worth statement you’ll understand your fundedness level. 

Listen in to hear how I use two ways to calculate fundedness to see whether a financial plan is feasible. On next week’s episode, you'll learn how to make your plan resilient, so make sure to check it out.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [3:38] Contrast your ideal retirement with your current situation
  • 6:35] How to create a feasible plan of record
  • [14:28] Your assumptions will be incorrect
  • [18:03] How to know whether your plan is feasible
  • [28:20] What does feasible mean?

LISTENER QUESTIONS

  • [30:10] Jim’s question on Social Security
  • [34:05] Moving from a balanced fund to a stable value fund
  • [38:30] Mark’s question about using I bonds in bond ladders

TODAY’S SMART SPRINT SEGMENT

  • [41:52] Take baby steps to create micro wins

Resources Mentioned In This Episode

Social Security detailed calculator

LTCI Partners

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM426.mp3
Category:general -- posted at: 2:00am CDT

Retirement is a journey into the unknown that can be intimidating. This is why you need to build up confidence in your plan so that you can rock retirement. To build your confidence it is important to master the fundamentals which simply means that you must practice them over and over again. 

Last week you learned to let go of the things that are out of your control and how to concentrate on working with the controllables by using an agile approach. This will give you the agency you need to prosper in retirement. 

Today we’ll focus on developing an inspiring goal for your future. Over the rest of the month, we'll explore the pathways to get you to your goal. If you are ready to learn how to rock retirement press play now. 

4 roadblocks that could hinder fulfilling your vision

With retirement on the horizon, you are ready to jump right in, but there can be some things that could hinder your progress. 

The paradox of choice

Who do you want to be when you grow up? This is a challenging question when you are already in your 50s or 60s. You have competency and interest in many domains at this stage of life, so it can be hard to choose what you want for your future. Or you may feel that when you set your goals they are set in stone since there's not a long time to change course. Don’t worry about this because you will change your mind. Life unfolds in twists and turns and plans will change. Don’t let the paradox of choice paralyze you. 

Start retirement with a clean slate

If you are like most of us, your life has been organized around your work or children. When you retire, your commute disappears and your kids are will have been sprung. You can now design your life any way you want. Think about how you can start your new life fresh from a clean slate. 

The accumulation mindset 

You have been a good saver your whole life and at this point, you have built up your net worth. Having these assets is comforting, so it can be challenging to begin to use your savings. However, you chose to defer that income to provide for your life in retirement. Eventually, the balance in your retirement accounts will level off or go down. You’ll have to overcome the fact that your savings are no longer growing. It is important to get over your frugality mindset to enjoy all that you have accumulated. 

Tomorrow is the day

We often plan retirement thinking about tomorrow. We think that tomorrow is the day that we will start x, y, or z. But it is important to remember that we are not guaranteed any tomorrows. To truly rock retirement you have to live for today. Today is the day to show up and pay attention to your life. Life is happening now, so rock your life today.

How to create a vision for your future

Before you begin to financially plan for retirement you need to create a vision for your future. One way to do that is to use the wisdom from those at the end of their lives to make the most of your own. Listen in to hear the top 5 regrets of the dying to help you make the most of your own life.

Have you given much thought to your values? Spend some time establishing your values so that you can envision building a life that is true to yourself. Once you have created a vision for your future you can create a plan to make it feasible. Don’t miss next week’s episode to learn how to create the pathways to reach your retirement vision.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [3:57] Who do you want to be when you grow up?
  • [6:05] Your life is organized around your work
  • [9:07] Tomorrow is the day
  • [12:02] A 3 step process to create a vision for your future
  • [19:10] How to bring these goals into a financial perspective

LISTENER QUESTIONS

  • [25:57] A question on the 4% expected return used in the Retirement Plan Live webinar
  • [29:43] Why use a 5% expected return rate?
  • [33:35] A question on delaying taking RMDs
  • [35:50] How I pick case studies for Retirement Plan Live
  • [40:03] What to do with an inherited IRA

TODAY’S SMART SPRINT SEGMENT

  • [44:08] Create a compelling vision for your retirement

Resources Mentioned In This Episode

Check out Boomer Benefits for all your Medicare questions!

BOOK - Wooden by John Wooden

BOOK - The Top 5 Regrets of the Dying by Bronnie Ware

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM425.mp3
Category:general -- posted at: 10:05am CDT

 We can be easily distracted by the bright shiny objects of retirement planning which is why it is important to master the fundamentals first. Understanding the fundamentals of retirement planning will help you to create a solid foundation so that you can cope with all of the uncertainty that retirement brings. 

Here on the Retirement Answer Man show, I typically dive into the foundational concepts of retirement planning in bits and pieces by answering questions. However, I haven’t taken a deep dive into teaching the fundamentals here on the show.

Over the course of this 5 week segment, we will start at the beginning and explore the fundamentals of retirement planning in greater detail so that you gain a working knowledge that will give you the confidence to execute your plan. If you have been wondering what Agile Retirement Management is this is the perfect time to press play.

Areas where traditional retirement planning is lacking

There are so many uncertainties surrounding retirement, but most people are worried about just one thing: running out of money.

Traditional retirement planning methods help people build a financial plan to ensure that they don’t run out of money. In conventional planning, retirement becomes a one-dimensional math problem to be solved with investment products. Retirees are asked to place all their trust in the numbers of long-term returns and hope that all will be well.

These planning methods focus solely on the financial future and without considering the person’s life goals. While it is important to plan for the future, life exists now. Retirement should be about living life to the fullest extent that you can. An agile approach to retirement helps you balance the future while living a great life today.

What is an agile approach to retirement?

I designed the agile approach to retirement planning by using a project management methodology. Agile retirement management focuses on achieving an objective by focusing on one thing at a time without trying to figure everything out all at once. With this approach, people are able to quickly iterate as needed as their situation changes. 

The key to an agile methodology lies in understanding the fundamentals of retirement planning so that you can increase your agency and control the controllables. This ensures that you can refine your goals and dreams based on what you can control. 

The principles of an agile approach to retirement planning

An agile approach accepts that you can’t figure out everything. There is no way to predict what will happen with inflation, markets, or even your life in the future. This is why it is important to try not to dial in exactly what will happen 20 years from now. By staying agile, you’ll be able to quickly respond to any shifts in life or the markets and consider how to improve your reactions.

These are the principles to developing an agile approach to retirement: 

Collaboration - It’s important to collaborate rather than delegating someone to plan your retirement. Use your strengths to inform your decision-making. Being creative together allows you to discover joint solutions

Flexibility - You can't figure out everything at once, so value optionality and flexibility.

Prioritize - Try as you might, you can’t do everything at once. With so many levers to pull, it can be easy to focus on the wrong thing. Prioritize to improve focus and find the areas that will make the biggest impact on your life. 

Communication - Even if you do it on your own, you still need to have the right communication. Use a series of little conversations to check in with your plan to make sure that you are on the right track. Take action then review the action once it is complete. Periodically evaluate risks and opportunities in your plan.

Traditional retirement planning doesn't allow you to explore the things that matter in life. You don’t want to miss out on the ride of life, so master the fundamentals of retirement planning. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [2:55] Why it is so important to master the fundamentals of retirement planning
  • [9:40] What is an agile approach?
  • [11:50] Principles of an agile approach

LISTENER QUESTIONS

  • [19:34] Worries about the long term stability of Anne’s annuity
  • [23:29] Chen was relieved to hear Dom’s story
  • [24:45] A life insurance question
  • [26:41] How to determine payout options when the female has the pension

TODAY’S SMART SPRINT SEGMENT

  • [30:28] Review the controllables that were discussed in your last retirement plan meeting 

Resources Mentioned In This Episode

Episode 422 - with Don’s interview

LTCI Partners

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM424.mp3
Category:general -- posted at: 2:00am CDT

Welcome to the last episode in the 4 part series on inflation in retirement. If you are just now joining in, consider heading over to the first episode in this series which covers what inflation is and how to measure it. The second installment discusses the ways that inflation impacts retirement and the previous episode helped you build a framework for combating inflation in your retirement plan. 

I create these deep-dive series as a way to sharpen my own skills as a financial advisor and to refresh my thinking on a topic. The order of the episodes allows me to think through a subject in an organized way. This is why I encourage you to listen to the series in order so that you can understand the progression of the subject at hand. Press play now if you have already listened to the preceding episodes so that you can learn the tactical ways to fight inflation in your retirement plan. 

Strategy vs. tactics

Before we dive into the tactical ways to fight inflation, it is important to understand the difference between strategy and tactics. A strategy is a framework for how you achieve a long-term goal. Tactics are the smaller steps that have a shorter time frame. Unlike strategy, tactics are easily started and discarded. They are a means to an end that complement and enhance the strategy. 

Your overall long-term goal is rocking retirement, and hopefully, after the last episode, you have begun to create your strategy to combat inflation so that you can rock retirement. Listen in to learn tactical measures that will enhance that strategy. 

The current tactical situation regarding inflation

We are all wondering where this inflation is taking us. Are we experiencing a monumental shift away from the low inflation and low-interest rates of the past 20 years? At this point, we can’t say for certain that inflation is here to stay, but we can analyze the current situation. 

In January, we experienced 7.5% inflation. If this trend continues, we will see rising interest rates as a result. Rising interest rates can lead to changes in the financial dynamics across the board. Bond and money market rates will rise, but on the flip side, the cost of borrowing money will rise as well. Rising inflation has a financial impact on every part of the economy and we will see a shift of capital across the world. 

It is important to understand that we don’t know for certain what will happen in the future. All we can do is educate ourselves and have a sound strategy in place.

Tactics to use if rising inflation becomes the new trend

If inflation continues to rise there are many ways that you can adjust your tactics in line with your overall retirement strategy. 

  • Buy I bonds - These bonds adjust the amount of interest-based on inflation to preserve the purchasing power of the dollar over time
  • Check out Treasury inflation-protected securities (TIPS)- TIPS are more like a traditional treasury bond. They adjust the principal balance of the bond based on an inflation factor to achieve the same goal. The price fluctuates based on interest rates and other factors.
  • Hold money market funds - Hold more money market and cash assets. As interest rates rise you can lock in at higher interest rates. 
  • Use more debt to buy things - take advantage of the current low-interest rates to purchase things that are likely to rise in price in the future
  • Buy in bulk - Buy at today’s prices rather than tomorrow’s. 
  • Change jobs - The labor market is tight right now and wages have not kept up. This means that companies are starting to bid up.
  • Invest - Investing in real estate, companies with pricing power, and commodities have historically been a good idea during times of inflation.

Although there are many tactics you can use to fight inflation risk, it is important to do so with a sound strategy in place. Listen in to hear why you shouldn’t take extreme measures to tackle inflation.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [4:20] Coming next month…
  • [6:30] Where to go if you can’t afford a full-time financial advisor
  • [8:42] Strategy vs. tactics
  • [12:38] What is the current tactical situation regarding inflation?
  • [20:20] Tactics to use if rising inflation is the new trend
  • [26:55] What I am doing tactically to fight inflation

COACH’S CORNER WITH KEVIN LYLES

  • [35:05] How retirement calculators treat inflation
  • [39:34] What else inflates in retirement?

TODAY’S SMART SPRINT SEGMENT

  • [43:05] Define the guardrails for your tactics

Resources Mentioned In This Episode

Check out the Stacking Benjamins book tour–I’ll be at the Dallas event with Joe Saul-Sehy on March 1

Episode 417 with Joe Saul-Sehy

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM423.mp3
Category:general -- posted at: 8:11am CDT

Inflation will affect your retirement one way or another. It’s up to you to create a strategy to manage that risk. On this episode of Retirement Answer Man, you’ll learn how you can build your own strategy to deal with the creeping risk of inflation.

In the past two episodes, you learned what inflation is and how it can affect your retirement. Next week you’ll learn how to use tactics to tweak your strategy to optimize it for specific situations, but first, let’s go learn how to come up with your own plan to combat inflation. 

Data vs noise

It is important to understand the difference between noise and signals when coming up with a strategy. It’s easy to be distracted by the everyday noise that surrounds us and fail to heed the signals that we should actually be watching for. 

In today’s overly connected world, we have access to information that is being transmitted instantly. Rather than learning from the signals that can help us create a course of action, we get distracted by the constant noise. As data flow increases, we tend to get overloaded with information. 

According to Nassim Taleb in his book, Antifragile, data is toxic in large and even moderate quantities because it increases our tendency to overreact to the noise. This is an important factor to recognize when coming up with a risk management strategy which is what a retirement plan really is. 

Strategies start with vision

Coming up with a strategy for retirement planning is like checking a recipe before you go to the grocery store. You want to make sure that you have all the ingredients so that you can put them together in the correct portions to create a meal. If you don’t plan before your trip to the supermarket you could come home with plenty of food but nothing that will help you prepare a healthy meal. To ensure a healthy retirement, make sure that your retirement starts with your vision for life.

How to create a strategy to manage inflation

Now you understand that you need to have a goal in mind before you create a retirement strategy. The two risks that you must balance in retirement are sequence of return risk and inflation risk. Sequence of return risk is a near-term risk that occurs when your stocks go down in value shortly after you begin withdrawing from your accounts. The risk of inflation means that the value of your dollar decreases over a longer period of time. 

Your retirement strategy needs to balance these near-term and long-term risks. Listen in to hear how you can manage inflation risk while at the same time considering sequence of return risk.

If some of the terminology I use confuses you, make sure to listen in the month of March. I plan to explain the fundamentals of retirement planning in greater detail. You’ll learn about the pie cake, agile retirement planning, and the retirement plan of record.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [3:29] Noise vs. signals
  • [5:35] What is a strategy?
  • [12:57] How to create a strategy to manage inflation

LEARNING FROM DONALD’S SITUATION

  • [20:40] Learning from Donald’s retirement plans
  • [25:46] What happened to Donald’s wife
  • [29:15] How Donald’s perspective has changed
  • [33:08] How Donald’s financial plans have changed
  • [35:20] Use the technology you have to record your loved ones

TODAY’S SMART SPRINT SEGMENT

  • [36:47] Evaluate your reaction to inflation

Resources Mentioned In This Episode

LTCI Partners

WSJ article - The Trouble with a Stock Market Bubble by Jason Zweig

FILM - The Social Dilemma

BOOK - Antifragile by Nassim Taleb

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM422.mp3
Category:general -- posted at: 2:00am CDT

Inflation is on everyone’s mind these days. If you have been wondering how inflation will affect your retirement, you’ve come to the right place.

This is the 2nd episode in a 4 part series on inflation. Last week we defined inflation, today, we’re discussing the impact of inflation on retirement, next week we get strategic, and in the final episode, we’ll get tactical and answer your questions on inflation.

Press play to learn what you need to know about the effects of inflation on your retirement. 

Just choose a number

Inflation is nothing new. It has been affecting us over the course of our entire lives. This is important to remember when planning retirement so that you don’t overthink how you plan for inflation as you build your retirement plan of record.

When building your retirement planning model, you’ll need to assume some number to plan for inflation. This number can be chosen based on history or another method. You don’t need to worry too much about where the number comes from as long as you’ve done a bit of research to get it. The most important thing to remember when choosing a number to assume for inflation is to leave it alone.

It’s important to stay agile

You’ll be consistently iterating and tweaking your retirement plan of record as your lifestyle changes from year to year. Even though inflation rates will fluctuate over the course of your retirement, leave your assumed inflation estimate alone.

You won’t get any more accuracy from your model by tinkering with this number. Instead, you’ll end up tilting the numbers one way or another based on your proximity bias. Iterate based on the reality of your lifestyle rather than some projected assumption. Let your spending habits change based on your life choices. 

How does inflation impact your retirement?

The best way to understand how inflation can impact someone over time is to crunch the numbers. 

If you spend $9,000 per month today and assume a 3% inflation rate, in 15 years your standard of living will decrease by 36%. If you change the inflation rate to 7%, the standard of living will worsen by 64%.

Although these numbers can seem scary, you will have a bit of optionality in the way you spend your money. If inflation is high, you may choose to scale back your spending in many areas. 

Areas where you can’t scale back

There are a couple of areas in life where you won’t be able to scale back spending. A healthcare event is not a choice and will need to be cared for whether you are ready or not.

Unfortunately, due to the healthcare renaissance in medical technology, inflation in the medical field has risen by 3 times the average of other goods and services. Healthcare and long-term care are two areas that have higher than average inflation and you have little control over your need for them.

Even though inflation will cause prices to rise, you will have a safety feature built into your retirement by way of social capital. Social Security has a cost of living adjustment built into the system based on CPI-W. Listen in to hear how these adjustments in addition to your human capital can help you combat inflation in your retirement. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [3:30] Be careful with your assumptions
  • [10:01] How does inflation impact your retirement?
  • [21:48] How stocks and bonds react to inflation

LISTENER QUESTIONS WITH TANYA NICHOLS 

  • [28:40] How Frank can decide if he can continue with his early retirement
  • [35:20] Where can someone with modest means go for retirement advice?
  • [40:02] What is the role of bond funds in a retirement portfolio with a low-interest rate environment?
  • [47:28] Clarification on signature requirements for IRAs

TODAY’S SMART SPRINT SEGMENT

  • [51:17] Review your inflation assumptions

Resources Mentioned In This Episode

Episode 405 - Don’t Let Perfect Be the Enemy of Good

Lutheran Social Services Financial Services

XYPN

Align Financial

BOOK - So Good They Can’t Ignore You by Cal Newport

BOOK - The Good Entrepreneur by Nick Kennedy

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM421.mp3
Category:general -- posted at: 4:56am CDT

Inflation is quite the buzzword lately. Every news network reports that inflation is on the rise which is apparent at the grocery store, the car dealerships, and even in the housing market. If you are planning on retiring soon, worries about inflation could keep you up at night. This is why over the next 4 weeks, we are going to study how to manage inflation in retirement. 

Today you’ll learn what inflation is and how it is measured. In week two of this series, we’ll discuss how inflation affects retirement, the following episode will study how to manage inflation from a strategic level, and our last episode on this topic will explore the investment vehicles that are available to help protect our portfolios against inflation. 

What is inflation?

Everywhere you look you can see that inflation is on the rise which is why we are studying this topic in depth. Before we can learn how to battle it, we must first understand what it is.

Inflation is the decline of purchasing power of a particular currency over time. This means that over time, your dollar will buy less of a particular good or service. 

We often reflect on the good ole days when a gallon of gas was less than a dollar, but we can see how inflation occurs across the board. Today a gallon of milk costs $3.59, but in 1995 it cost $2.50. A dozen eggs are $2.80 today, whereas, in 1990, that same dozen was only $1. This is inflation.

The way we see inflation from a retirement perspective is that the purchasing power of your dollar buys less over time. 

A look at average historical inflation rates

Since the 1920s, the average rate of inflation has been 2.88%. However, this does not mean that each year the inflation rate has been the same inflation fluctuates from year to year. The highest inflation rate was in the 80s and was 15.61%. 

In the past 20 years, the inflation rate has been lower than that 100-year average at 2.06%. Over the past 10 years, we really haven’t worried about inflation and we have had the added benefit of enjoying excellent return rates from the market, so if you retired in 2011, there hasn’t been much to worry about. But this isn’t always the case. 

In the 1970s, inflation was at 7% per year which was coupled with a rough decade in investment returns, this perfect storm could cripple retirements. Inflation risk can be compared to sequence of return risk as you enter into retirement. 

How inflation affects retirement planning

When you are planning your retirement you want to understand how much things cost so that you can predict how much money you will need each year. If you spend $9000 per month now, in 20 years you’ll need much more to have that same purchasing power. 

No one can predict what will happen in the future, but if you study the past and take measures to protect your portfolio, you can hedge against this ever-present risk. Learn how inflation is measured why that is important to plan your retirement on this episode of Retirement Answer Man.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [5:00] What is inflation?
  • [12:10] How inflation affects retirement planning
  • [13:46] What causes inflation?
  • [19:00] How do we measure inflation?

LISTENER QUESTIONS WITH ANDY PANKO

  • [26:30] Is it better to do a Roth conversion or take advantage of a 0% capital gains tax rate?
  • [34:55] The difference between Roth conversions and Roth contributions
  • [39:59] How to adjust the Social Security calculator for early retirement
  • [46:45] Is inflation risk higher when one retires early?

TODAY’S SMART SPRINT SEGMENT

  • [56:55] Think about your optimization to see if you have enough slack in your system

Resources Mentioned In This Episode

Taxes in Retirement Facebook group with Andy Panko

Tenon Financial Group

LTCI Partners

Watch the Retirement Plan Live replay here!

BOOK - Antifragile by Nassim Nicholas Taleb

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM420.mp3
Category:general -- posted at: 8:17am CDT

We learned in the first episode of Retirement Plan Live that Joelle and her husband Mike had moved to a new area to pursue their retirement dreams. Joelle and Mike are now learning how to build community and purpose in their new home. Listen in to learn how Joelle plans to make social connections and find purpose in retirement as she creates her new life.

The Rock Retirement Club is open

The Rock Retirement Club will be open for enrollment for ten days starting on 1/27. If you have been thinking about joining, this is the right time to act. 

We have implemented this short-term enrollment window so that new members can make connections with each other while working to build their retirement plan of record. This way, RRC freshmen can come in as a cohort and fully participate in their membership by taking full advantage of everything that the club has to offer. New members will participate in meetups and have access to the masterclass, retirement planning tools, and the private RRC podcast. 

Even if you are too late to join this enrollment, fill out the application and get on the waiting list so that you will be first in line when enrollment opens again. 

What will Joelle do with her time in retirement?

Once you finally reach retirement you have to figure out what to do with all of your time. When Joelle moved to her new home in Washington she knew that she would need to find a way to fill 40 hours of her time that was previously spent working. 

Joelle has found a new yoga and pilates class to keep fit and connect with others and through these exercise classes, she was even able to connect with a hiking group. 

Exercise and connecting with others are important components of retirement. However, finding a purpose in retirement is even more important. Joelle understands that the success of her retirement hinges on finding a purpose which is why she sought out a nonprofit organization to volunteer with shortly after moving to her new home. Listen in to hear how Joelle found this organization and what she plans to do with her time in retirement.

Making friends in a new place

Moving to a new place can be challenging and when you do so upon retirement it is important to get involved in the community. Without workplace interactions, making friends is even more difficult than in the working years. Joelle has thrown herself into participating in her new exercise classes and volunteering with the nonprofit organization. Although she still doesn’t have anyone that she can truly call a friend, she has several acquaintances with whom she is looking forward to making a deeper connection.

Do you have any strategies for making friends in a new place? How will you expand your friendship base in retirement?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

RETIREMENT PLAN LIVE WITH JOELLE

  • [1:30] What will Joelle do with her time in retirement?
  • [10:18] Making new friends can be a challenge
  • [16:09] Volunteering will give her a sense of purpose

LISTENER QUESTIONS

  • [19:13] Greg is worried that the Social Security system will run out of money
  • [25:04] Strategies to improve the longevity of the Social Security system
  • [27:20] How to find a retirement financial planner
  • [29:58] Roth conversions vs. earned income
  • [30:53] Where to find a retirement plan of record template
  • [32:14] Using human capital and financial capital to retire early and receive ACA credits
  • [36:07] Health savings account beneficiaries

TODAY’S SMART SPRINT SEGMENT

  • [38:44] Think about your strategy to create community and connections in retirement

Resources Mentioned In This Episode

RetireAgile.com

LiveWithRoger.com

BOOK - How to Begin by Michael Steiner Bungay

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM419.mp3
Category:general -- posted at: 2:00am CDT

As you embark on your retirement journey, life’s question changes from what can you do to what will you do? You have so many choices that are available to you that the question of what to do next can be daunting. I explore these questions with Michael Bungay, author of the new book, How to Begin

Michael’s interview isn’t the only thing that’s in store for you today on the Retirement Answer Man show. This is the third installment of Retirement Plan Live with Joelle. Last week Joelle shared her dreams for retirement, so today we crunch some numbers to see how she will create her retirement paycheck. Make sure to sign up for the webinar on January 27 to see whether Joelle’s retirement will be feasible. 

What will you do next?

Often in midlife, you reach a crossroads where you have to decide what’s next. At this age, you have experience, contacts, and resources which opens a wealth of opportunities. So, how can you figure out what you should focus on in your next chapter? Think about what will bring out the best in yourself.

Should you create You+ or You 2.0?

Michael likes to compare this process of reinventing yourself to technology. You have the choice of creating You+ or You2.0. 

You+ is like getting a new app on your phone. It will improve your life for a while, but then you begin to plateau and you have to think about what is next. You 2.0 is like getting an entirely new operating system that can last for decades. Take this time to think about what your You version 2.0 will be. 

Michael’s book, How to Begin, lays out the process to help you figure out how to create You 2.0. You’ll learn how to set a worthy goal and make a difference that lights you up all while moving you towards the edge of what is possible. 

How to begin the process with fresh eyes?

Systems start breaking down once you reach the next level in anything that you do. The same holds true for reinventing yourself. To begin again you need to start by thinking about who you are so that you can set a worthy goal. Your first guess won’t be the best one, but as you work through the process it will help you to polish and refine your goal. 

The next step is to commit. Before you commit yourself to your goal, you’ll want to weigh your choices. Think about the prizes and punishments for completing or not completing your goal. 

Finally, it is time to make progress on your worthy goal. Goal setting is a challenging process, that is why it is important not to waste your time on the wrong goals. Your goals should be important to you and make the world a better place. What impact do you want to make on the world? 

If you are trying to figure out who you will become in the next phase of your life, check out How to Begin by Michael Bungay to help you get started. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

RETIREMENT PLAN LIVE WITH JOELLE

  • [3:37] Joelle feels content with her retirement dreams
  • [7:18] Looking at Joelle’s social capital
  • [12:40] Joelle won’t have any human capital
  • [16:16] Let’s look at Joelle’s financial capital

MICHAEL BUNGAY INTERVIEW

  • [25:25] Who is Michael Bungay?
  • [29:36] Michael’s second mountain
  • [32:50] The difference between Michael+ and Michael 2.0
  • [35:38] How to begin the process with fresh eyes

TODAY’S SMART SPRINT SEGMENT

  • [53:46] Challenge yourself to see whether you are improving yourself or can you reimagine a new operating system

Resources Mentioned In This Episode

BOOK - How to Begin by Michael Bungay

BOOK - The Coaching Habit by Michael Bungay

PODCAST - 2 Pages with MBS 

BOOK - The Second Mountain by David Brooks

BOOK - From Good to Great by Jim Collins

Erin Weed - The Dig

Retirement Plan Live Webinar January 27

LTCI Partners

Social Security Detailed Calculator

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM418.mp3
Category:general -- posted at: 2:00am CDT

Welcome to the second installment of Retirement Plan Live. This is the episode where we run the initial numbers for Joelle’s retirement. We’ll walk through the 3 categories to define Joelle’s base needs, wants, and wishes and put number values to each of these areas. 

In addition to the interview with Joelle, you’ll hear listener questions about how to feel comfortable about retirement, converting 401Ks to Roth IRAs, and how my personal journey finding health insurance has turned out. 

As a bonus, you’ll hear an interview with Joe Saul-Sehy from the Stacking Benjamins podcast who has written a new book called Stacked. Listen in to hear if it is worth the read. 

Check your email this weekend to receive a free retirement planning worksheet

If you are following along with Retirement Plan Live and creating your own retirement plan, make sure that you are signed up for the 6-Shot Saturday weekly newsletter. In this Saturday’s newsletter, you will receive a link to a simple worksheet that will help guide you through your own retirement plan the way that I am walking through Joelle’s retirement plan. 

6-Shot Saturday is full of tips, news, listener questions, and more, straight from the Retirement Answer Man to your inbox. Simply head on over to RogerWhitney.com, scroll down to the bottom of the page, and enter your name and email address to sign up. 

Financial behavior is at the heart of all money management issues

Have you ever listened to the Stacking Benjamins podcast with Joe Saul-Sehy? If so, you’ll want to check out his new book, Stacked. If you haven’t heard his podcast, check it out on your favorite podcasting app. Joe joins me today to discuss why he wrote his new book, how he wrote it, and why it’s important. 

Did you know that 150 million Americans have cried about money? This number doesn’t only include people who live paycheck to paycheck, people who earn more are also concerned about money. These people aren’t crying about the loss of the mega backdoor Roth or cryptocurrency. They are crying about their financial behavior.

Many people who are educated about money and finances still struggle with their financial behavior. Mastering your finances isn’t about what you know, it's about what you do. 

Stacked helps readers take action to improve their financial situation

Traditional finance books often overcomplicate finances or hype certain complicated financial strategies. Stacked helps readers understand what they should be thinking about when it comes to financial matters and why they should think about them.

Since Joe discovered that people need actionable items to complete to successfully change their financial behavior he decided that his book should help readers change their financial behavior through action. The book is based on achievements that are built on micro-actions. Its format is award-based, similar to the way that many educational apps gamify learning. 

Joe begins financial planning with the end in mind

Joe’s book begins with the end in mind. It is goal-based and helps readers create a timeline to put their goals in perspective. Since most of us are visual learners, the book helps to plot things visually so that readers can begin to work on their financial problems. 

As you read, you’ll be able to visualize your goals so that you can put a list together to understand what you truly value and how that applies to your financial plan. Check out Stacked if you are interested in a light-hearted approach to a serious subject matter that gives you actionable items to get you closer to your financial goals. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

RETIREMENT PLAN LIVE WITH JOELLE

  • [3:04] Joelle’s base spending needs
  • [8:50] Joelle’s future expenses
  • [20:25] Budgeting will be a new experience for Joelle and her husband
  • [23:49] Joelle’s aspirations
  • [29:35] They plan to age in place

LISTENER QUESTIONS

  • [34:25] A 401K to Roth transfer question
  • [38:39] How to help Tracy’s husband retire again
  • [43:04] My health insurance journey
  • [46:10] Reverse mortgages

JOE SAUL-SEHY INTERVIEW

  • [47:09] Money management can be stressful
  • [51:22] How Joe wrote his book
  • [59:23] Begin with the end in mind
  • [1:07:00] Joe’s goals for his book

TODAY’S SMART SPRINT SEGMENT

  • [1:10:19] What will you wish you would have done at the end of this year?

Resources Mentioned In This Episode

BOOK - Stacked by Joe Saul-Sehy

BOOK - How to Begin by Michael Bungay Stanier

BOOK - Half Time by Bob Buford

BOOK - The Second Mountain by David Brooks

PODCAST - Stacking Benjamins with Joe Saul-Sehy

NeuYear.net

Powell’s Books

Direct download: RAM417.mp3
Category:general -- posted at: 2:00am CDT

A new year means a new Retirement Plan Live! Over the course of the next 4 episodes, you’ll hear about Joelle and Mike and their plans for their recent retirement. Then, at the end of the month on January 27, we’ll wrap RPL up with a live webinar that you can participate in. Head on over to LiveWithRoger.com to register.

On this episode, you’ll learn about Joelle and Mike’s thought process on moving to a different state for their retirement. You’ll also hear from Kevin in Coach’s Corner as he explains his Zero Based Budgeting process. This episode is jam-packed with information including one correction to an answer that I recently gave to a listener question. Press play to listen now. 

Coach Kevin’s Zero-Based Budgeting process

Creating your financial plan in retirement shouldn’t only include dollars and cents. It is important to build a plan that encompasses your life goals. Most people tackle their retirement budget from the wrong direction which is why Coach Kevin came up with his own budgeting process.

  • Step 1 - Start with 2 major retirement questions. Where will you live? Will you work or generate an income? Both of these questions can drastically change your retirement budget. Think about whether you’ll move somewhere new or whether you’ll stay local and how that decision will affect your budget and your retirement plans. If you choose to work a bit in retirement, that choice won’t simply change your budget; it will also change how you spend your time.
  • Step 2 - What activities will you do? Think about 3-5 activities that bring meaning and purpose to drive your life in retirement. Which activities would you like to build your life around? Set yourself up to do the things that you love to do. 
  • Step 3 - What would make retirement special for you? This is where you get to think big. What are your retirement dreams? Would you like to travel to distant lands, buy a boat or RV, or maybe renovate your home? 

Once you work through these 3 steps then you can begin to create your retirement budget. It is important to start with these steps rather than the money first so that you can ensure that you are making the most out of your retirement. 

  • Step 4 - Continue creating your retirement budget by planning your day-to-day activities in retirement. These activities could include gym memberships, golf fees, sporting event tickets, theater tickets, and other areas where you will spend your time in retirement.
  • Step 5 - Finally, you can add in all the other expenses like food, utilities, household expenses, and healthcare.

Leaving your comfort zone is always a bit scary

Remember that the type of life change that retirement brings can be scary. Any time you disrupt the status quo you leave your comfort zone. The good news is that if you start acting out your retirement plans and they don’t measure up to your vision, you can always change the plans. The trick is to develop a plan where you can pivot. With this Zero-Based Budgeting process, you can iterate as needed rather than being stuck with the same plan over the next 30 years.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

A CORRECTION

  • [2:20] An HSA question correction

COACH’S CORNER

  • [3:52] How to create a retirement financial plan that encompasses your life goals

RETIREMENT PLAN LIVE WITH JOELLE

  • [19:50] Why Joelle volunteered to be the new Retirement Plan Live subject
  • [24:24] Joelle and her husband have different money styles
  • [29:38] How Joelle’s life was different living in L.A.

TODAY’S SMART SPRINT SEGMENT

  • [37:42] Give yourself grace about beginning again

Resources Mentioned In This Episode

Register for the Retirement Plan Live webinar on January 27 at 7 pm CST

LTCI Partners

Retirement Manifesto

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM416.mp3
Category:general -- posted at: 2:00am CDT

Do you own any cryptocurrency? First introduced in 2009, Bitcoin and other cryptocurrencies have exploded in popularity over the past few years. 

On this episode of Retirement Answer Man, we’ll discuss what cryptocurrency is, how it is revolutionizing the banking system and the drawbacks of this new type of currency. Listen in to learn whether you should add a bit of crypto to your retirement portfolio and you’ll also hear the answers to listener questions about IRA contributions and IRMAA surcharges.

What is cryptocurrency?

Nan is curious about whether Bitcoin or other cryptocurrencies would be good investments to add to her retirement portfolio to hedge against inflation. Before we get into the answer to that question, we need to understand exactly what cryptocurrency is. 

Stemming from the word cryptography, the word cryptocurrency means it is a currency that is encoded. This digital currency is secured by cryptography technology which prevents it from getting hacked. 

Why is cryptocurrency such a big deal?

Cryptocurrency is separated into denominations called coins or tokens which are actually cryptographically protected codes. These new currencies are atypical in that they are issued by non-centralized networks or entities and not issued by any government. 

The value of a cryptocurrency coin or token is stored digitally and managed by a blockchain network that facilitates transactions. Blockchain is basically a digital bank replacement that is virtually frictionless. Transactions are instantaneous and can be confirmed quickly. 

The promise of cryptocurrency could revolutionize currency transfers and remove the need for a banking system. With encrypted digital currency there is no need for a bank. Transactions bypass the third-party gatekeepers that are typical of traditional banking transactions, so there is no need for any extra fees. 

How could cryptocurrency help combat inflation?

Inflation occurs when a currency loses value over time. We have seen the inflation rate spike over the past year and the more money that comes into the system the less value the dollar will have. Since the US government is printing currency faster than ever, many people are worried that the dollar will continue to lose its value.

New crypto coins or tokens can only be released by mining, so the value of the currency is based on a degree of scarcity. The finite supply of the currency’s structure is designed to retain its value over time.

What are some concerns over cryptocurrencies?

With all the benefits that come with this revolutionary financial technology come some drawbacks. Since it is so new, cryptocurrency has become a craze with new currencies being released each day. Much like the internet craze of the early 2000s, no one knows which currencies will come out on top. 

The novelty of this new trend has also created volatility in the values of different cryptocurrencies. Currency values can spike up or down 10%-20% in one day.

Investing in cryptocurrency is a bit like heading out to the wild west to pan for gold. Since it is so new, there is little to no government regulation which, paired with the anonymity that these currencies provide, can attract bad actors and lead to money laundering and tax evasion.

Listen in to hear whether I recommend adding cryptocurrency to a retirement portfolio to hedge against inflation. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

LISTENER QUESTIONS

  • [5:05] Is investing in cryptocurrency a good way to combat inflation in retirement?
  • [11:51] Why is cryptocurrency such a big deal?
  • [17:01] What are some concerns over cryptocurrencies?
  • [22:10] Contribution limitations in the year that you retire
  • [24:41] Appealing the IRMAA surcharge
  • [26:27] What counts as income when calculating ACA credits?

TODAY’S SMART SPRINT SEGMENT

  • [28:16] Finalize your 2021 net worth statement

Resources Mentioned In This Episode

Episode 300 - Medicare and IRMAA

Form SSA-44 - Medicare Income-Related Monthly Adjustment Amount - Life-Changing Event

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM415.mp3
Category:general -- posted at: 2:00am CDT

Do you have a system for estimating what your future RMDs will be? Should you keep a mortgage or pay off the balance of your house in retirement? What should you do with the money that you withdraw to fill up your tax bracket? These are just a few of the questions that will be answered on this episode of Retirement Answer Man. Press play to check it out!

My word of the year

The end of the year is always a good time to think about beginning anew in the next year. I’m not big on celebrating New Year, but I enjoy the renewal process that comes with the start of the new year. 

If you have listened to the show in the past, you have heard me discuss my word of the year. I choose a word each year as part of my own process of renewal. I try to use my word of the year as my guiding light to help me stay focused on my goals for the year ahead. Have you ever chosen a word of the year to help you focus on your goals? Listen to this episode to hear what my word is this year. 

How do you calculate what your future RMDs will be?

You know RMDs are coming at age 72, but how can you estimate what they will be? To calculate your RMDs you can create your own spreadsheet to get an estimation. Once you have a feasible retirement plan in place and you know how you will fund your retirement you can use this fantastic exercise to help you optimize your retirement plan. 

To estimate future RMDs, I set up a simple spreadsheet with these columns: your age, the year, the RMD ratio, the end of the year account value for the prior year, estimated withdrawals, and the year-end value. Once you have these values in place you can take the total and divide it by the value provided by the IRS uniform lifetime table to estimate your future RMD. 

How estimating your RMDs could benefit your retirement plan

One way that this exercise can benefit you is by allowing you to project the risks that you might encounter in retirement. You may realize that you won’t need this much money to live on and decide that it is a good idea to fill up your tax bracket by withdrawing from your IRA sooner so that you can lower your RMD in the future. 

What to do with the money that you withdraw from your IRA to fill up your tax bracket 

If you do decide to withdraw from your IRA or 401K to fill up your tax bracket you will have the benefit that you know what your tax rate will be, but what should you do with the money? The way I see it you have 5 options. You can spend it, save it, give it away, invest it in after-tax vehicles, or convert it to a Roth IRA. The most important thing to do when making these arrangements is to think through your process in an organized way. What would you do if you decided to fill up your tax bracket?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [1:30] My word of the year

LISTENER QUESTIONS

  • [6:55] How do you calculate what your future RMDs will be?
  • [15:33] Is it a good idea to keep a mortgage in retirement?
  • [21:34] What do you do with the money that you withdraw from your 401K?
  • [26:20] A suggestion from Mike
  • [28:21] The efficacy of using balanced funds

TODAY’S SMART SPRINT SEGMENT

  • [36:18] What will be your word of the year next year?

Resources Mentioned In This Episode

LTCI Partners 

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM414.mp3
Category:general -- posted at: 2:00am CDT

Do you have a net worth statement that you update regularly? Whether or not you do, you’ll want to learn about the psychological benefits that this exercise can create. In this episode of The Retirement Answer Man show, we’ll discuss what a net worth statement is and how you can gain from creating one regularly. 

You’ll also hear several listener questions that range from inherited IRAs to I-bonds, to SPIA annuities. If you are interested in rocking retirement, you’ll need to arm yourself with the knowledge to help you navigate this change in life. Listen in to get started on your retirement education journey. 

A Rock Retirement Club announcement

If you are looking to join the Rock Retirement Club you can sign up for the waiting list until we open enrollment again in late January. We closed enrollment in early December to restructure the club a bit and introduce periodic enrollment so that new members can be a part of a cohort. This will help freshmen members to take full advantage of their membership as they work their way through all the benefits that the club provides. If you are interested in checking out the Rock Retirement Club, head on over to the website and join the waiting list to receive the latest email updates. 

What is a net worth statement?

If you have listened to the Retirement Answer Man show in the past, then you already know that a net worth statement is a statement of the resources you have accumulated with your wealth. 

Your net worth statement lists all of your assets and their values and your debts and their values. Assets like your retirement accounts, investment accounts, or property are listed on the left side of the net worth statement. These assets can be categorized by whether they are tax-deferred, after-tax, or tax-free accounts. On the right side is the debt column. Total each column up to see the value of each. Once you do that you’ll subtract the debts from your assets and have your net worth. 

Creating this valuable financial tool is a way to understand the cumulative impact of the financial decisions you have earned. Do you have a net worth statement that you update regularly? 

The 5 ways you can use your income

Since there are only 5 things that you can do with your income, your net worth statement reflects those financial decisions that you have made. These are the 5 ways that you can use your money:

  1. Spend it. 
  2. Pay down debt
  3. Give it away.
  4. Save it as cash in an emergency fund.
  5. Invest for the future.

For every dollar you have earned you have made a decision (whether consciously or unconsciously) to do one of these 5 things, so your net worth statement is a reflection of these choices. 

Creating a net worth statement provides a psychological impact

By updating your net worth statement periodically you’ll be able to compare how your finances reflect your values and whether you are using your finances to stay in line with your goals. If you identify any incongruencies then you can address the behavior before it gets out of hand. 

Have you ever put together a net worth statement? When was the last time you updated it? As a rule of thumb try revisiting it every 6 months.

Make sure to listen to the next episode to hear my word of the year!

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [1:56] What is a net worth statement?
  • [4:50] Creating a net worth statement provides a psychological impact

LISTENER QUESTIONS

  • [11:21] You can work with LTCI Partners directly
  • [14:45] Mike asks if I-bonds are a no-brainer
  • [20:12] Examples of how people have blended retirement with meaningful work
  • [24:28] A comment about SPIA annuities
  • [32:25] Alternatives for the fixed income portion of assets in retirement 
  • [35:27] Navigating the changes to the inherited IRA RMD rules

TODAY’S SMART SPRINT SEGMENT

  • [37:51] Consider creating experiences rather than giving gifts for the holidays

Resources Mentioned In This Episode

BOOK - Retirement Planning Guidebook by Wade Pfau

Wade Pfau - Retirement Researcher

TreasuryDirect.gov

LTCI Partners

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM413.mp3
Category:general -- posted at: 2:00am CDT

You have probably heard me refer to a retirement plan of record in the past few episodes, but you may be wondering what exactly this is. I have had several listeners reach out and ask me to define this term, so in addition to hearing listener questions, today you’ll learn exactly what a retirement plan of record is and how it can help you plan your retirement. Press play to check it out.

What is a plan of record?

The retirement plan of record is something that I work on with my clients and I am in the process of developing a template that will be available in the Rock Retirement Club masterclass. This plan of record will help you create a current representation of your decision-making framework so that you can walk through a decision-making process in an organized way. 

Why is it important to have a plan of record

There is so much to consider in retirement planning--asset allocations, withdrawal rates, Roth conversions, IRMAA, taxes, not to mention who your friends will be and what you’re going to do all day. With all of these considerations, it is easy to become overwhelmed by the choices if you don’t have an organized way to make decisions. Without a clear direction, your decision-making process could have you bouncing around like crazy. 

The 3 pillars of the agile process

When creating a retirement plan of record, it is important to organize your financial goals into 3 pillars so that your plan can remain agile. First, develop a feasible plan, then, make it resilient, and lastly, optimize your plan. If you can arrange your decisions under these 3 pillars, then you can think through the process in an organized way. 

A retirement plan of record can ensure that your decisions reflect your values and goals. You’ll be able to create feasible spending goals based on your resources. Your plan needs to be resilient so that you can manage risks. 

Once you have your plan of record in place then you can work through each decision while referring to your plan. You’ll be able to see the changes you are considering within your organized process and create a what-if scenario by making a copy of your plan of record and adjust accordingly. This way you’ll be able to flush out the implications of this new variable so that you can examine the decision in a thoughtful way. 

The plan of record is a useful tool to accomplish organized thinking that you can execute in a consistent rhythm so that you can stay agile and make the most of your life regardless of what happens. Your plan of record allows you to focus on what you can control.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [3:50] What is a plan of record?

OUR SPONSOR

  • [12:22] Check out LTCI Partners for your long-term care insurance needs

LISTENER QUESTIONS

  • [13:31] Lee is worried about inflation--should she work longer?
  • [22:05] Thinking about Social Security claiming strategies
  • [28:18] How IRMAA surcharges work each year
  • [33:26] How to deal with switching from an HSA to Medicare
  • [35:32] Filling up tax bracket buckets

TODAY’S SMART SPRINT SEGMENT

  • [39:03] Review your retirement contributions to make sure you are hitting the numbers you want

Resources Mentioned In This Episode

Episode 385 - The 4% Rule

Episode 395 - Retirement Risk Basics

Check out LTCI Partners for your long-term care insurance needs

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM412.mp3
Category:general -- posted at: 2:00am CDT

Rocking retirement doesn’t mean getting your Roth conversions right, it means minimizing your regrets. At the end of your life, you don’t want to think “yay, I paid fewer taxes!” you want to think “wow, my life was awesome!” Overcoming the frugality that stems from a lifetime of saving is one way to live a life free of regret in retirement.

To ensure that you can live life to the fullest, create a retirement plan that can iterate as life unfolds. When you have a feasible, resilient retirement plan that utilizes the resources you have you’ll be able to build the life you want. You’re already well on your way to rocking retirement by listening to the Retirement Answer Man show. 

On dialing back

Recently I committed publicly to publishing 2 episodes per week in an effort to improve the show. However, very shortly after making this change, I realized that it wasn’t a good change for me. For this reason, I decided to pivot back to one episode per week. I realized that it is important to live my life true to myself rather than base my choices on the expectations of others. Have you ever made a decision that you quickly had to undo? 

Should Gene pay off his house from a pretax retirement account?

Gene is considering paying off his house from his 401K account. He owes $200,000 at 2.5% on a 25-year loan. He would like to know what the best course of action would be in his situation. 

As with any major retirement planning question, my recommendation is to refer to your retirement plan of record. (To get a more detailed understanding of the retirement plan of record, make sure to listen to the next episode!) After walking through that plan with the mortgage in place, then you can create a what-if scenario in which you pay off the mortgage. This way you can compare each choice side by side to see which one would best serve your overall goals.

Listen in to hear why I wouldn’t take the funds from my 401K to pay off my house and hear what I would do instead. 

How to move from accumulation to distribution phase of life

You have saved for decades, so when the time comes to start spending that savings it can be a challenge to loosen the purse strings. Retirement is not simply about spending money: it’s about living your life to the fullest. 

Think about why you chose to save your money and act frugally for so many years. Chances are, you did so to achieve financial security and to pay for the best retirement lifestyle that you could afford. Achieving financial security means that you feel comfortable with your retirement plan. If you don’t have faith in your plan, consider having a professional look over your plan to bolster your confidence so that you can rock retirement. 

How to improve your life and overcome frugality

If you are a naturally frugal person, you may think that you have everything you need at this point in life, so there is no reason to spend more than you do. However, there are many ways that you can improve your life by spending money. Consider whether these activities would enhance your life.

  • Eating out with friends more frequently
  • Attending physical therapy
  • Getting regular massages
  • Hiring a personal trainer to improve fitness
  • Hiring a nutritionist to help you plan meals

Overcoming frugality can help you live your life to the fullest and rock retirement. Think about how you could increase your spending to maximize your life. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

LISTENER QUESTIONS

  • [4:00] A correction on QLACs
  • [5:05] Social Security and Cola
  • [9:25] An urgent inherited IRA question
  • [12:30] On dialing back
  • [15:08] Whether or not to pay off the house from a 401K
  • [20:48] One listener appreciated learning about Roth conversions 

COACH’S CORNER WITH KEVIN LYLES

  • [26:18] On overcoming frugality
  • [29:42] Spending guaranteed income is much easier
  • [31:26] How you can improve your life by spending
  • [34:25] 3 tips to incorporate to spend your money

TODAY’S SMART SPRINT SEGMENT

  • [42:55] Look for ways to enhance your life today

Resources Mentioned In This Episode

Start here to listen to the Retirement Tax Management series with Andy Panko

Brian Johnson’s Optimize.me

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM411.mp3
Category:general -- posted at: 7:05am CDT

How do you pivot from a moderately aggressive portfolio in the accumulation stage of retirement planning to the decumulation stage? In today’s episode, we tackle two listener questions about the mechanics of decumulation in retirement planning. You’ll also hear a question about using QLACs to reduce RMDs. If you are wondering about the details on how exactly you are going to make this retirement thing work then be sure to press play. 

Retirement plan live is coming soon to a podcast near you! 

In January we’ll be hosting the next edition of Retirement Plan Live. Retirement Plan Live is an extremely popular series that we run each year where I walk out the logistics of creating a retirement plan over the course of 4 episodes with a listener. At the end of the series, we host a live webinar where we analyze whether that particular plan is feasible. Our last Retirement Plan Live series dealt with Trish and her unexpected retirement. 

If you would like to be the next subject of RPL, make sure you are signed up for the 6-Shot Saturday newsletter so that you can access the link to the application form. We’ll choose one listener from the dozens of applications we receive. We will make sure to change the name and details of your situation while at the same time keeping the generalities in check. Listen in to hear the details. 

How to get the most bang for your buck in your retirement portfolio

Steve has invested moderately aggressively, but as he turns 65 and enters retirement he is looking to become more conservative while at the same time getting the most bang for his buck. He is trying to figure out how to structure his portfolio conservatively while providing a bit of growth and income through dividends.

The best way to approach this or any retirement planning question is to take a top-down approach. If you start at the bottom and work your way up you miss out on how your question fits into the big picture. 

Retirement planning starts with your overall goals for retirement. Then you need to understand how this particular question fits into your retirement plan. Once you have a feasible plan, then you can build a cash flow model which plans out your spending over the next 5 years and beyond. Once you have this cash flow model in place then you can make that model resilient. This is where your question comes in. How would you make your plan resilient? 

Do you want to optimize your portfolio for more money and higher returns or do you prefer to have a high level of confidence in your spending no matter the market? Rather than getting the most bang for your buck, consider what kind of outcome you would prefer to secure. 

How to simplify retirement accounts without taking a huge tax hit

Karen is planning on retiring at age 61, but before she does she would like to simplify her retirement accounts. Currently, she has over 50 different investments. She wants to simplify the accounts into as few funds as possible and rebalance them without taking a huge tax hit. 

Once again, we must approach this problem in an organized way. When you consider what you are trying to accomplish by simplifying your accounts then you can see how this exercise will fit into your overall retirement plan. How would you approach this question? 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [1:30] News on the show

LISTENER QUESTIONS

  • [6:25] Using QLACs in retirement planning to reduce RMDs
  • [11:35] Rita is interested in another series on long term care
  • [12:46] Steve’s question getting the most bang for his buck during decumulation
  • [30:20] Karen’s question about simplifying her portfolio

TODAY’S SMART SPRINT SEGMENT

  • [40:14] Go beyond the normal thankful things--think about the things that warm your spirit

Resources Mentioned In This Episode

Retirement Plan Live 2021 - start here

Decumulation series - start here

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM410.mp3
Category:general -- posted at: 2:00am CDT

We often have monthly themes to guide the topics of this show, but this month on Retirement Answer Man we are doing a bit of a mishmash. Today I want to share some thoughts I had on retirement in general and answer a few retirement questions. As you listen, think about which topics apply to you and your situation and see if you can come up with actions that can get you closer to your retirement goals. 

Overcoming frugality can be a challenge

After decades of saving your money and delaying gratification, suddenly letting loose to spend money on the things that make you happy may not come easy. If you have been a diligent saver over the years, you may find it challenging to shift from a saving mindset to a spending mindset especially when that mindset shift is timed with the loss of income from your human capital. 

The good news is that shifting to a spending mindset doesn’t need to happen like flipping on a light switch. This is a gradual change that can occur slowly. One way to help yourself become more open to spending is to construct a framework to help you make decisions.

Becoming a new version of yourself takes time. Give yourself grace and time to make change happen. 

Retirement planning is complicated

If anyone ever tells you that they have all the answers to retirement planning, run in the other direction. This is because no one can ever have all the answers to something so complicated as retirement planning. The way I like to go about planning is by organizing decisions under 3 separate categories. 

  1. Are your dreams feasible? Consider the life you want and whether it is feasible given your resources. This means that you need to consider your values and what you really want. Next, you’ll want to discuss it with your spouse if you are married and run the numbers to see if your dreams are truly feasible.
  2. Is your plan resilient? The winds of change will come and they could take many forms. They could come in the form of inflation, uncooperative markets, death, or healthcare bills. Having a resilient plan will help you stay the course that you set. Ways that you could make your retirement plan resilient could be through cash flow planning, matching your assets, and managing your risks in an organized way. 
  3. Can your plan be optimized? Optimization is a way to enhance your journey. Tax planning, asset allocation, Roth conversions, ACA credits, and Medicare decisions all fall under the category of optimization. These are ways that you can enhance your plan to improve it. However, it is important to remember that these are the extras, not the plan itself. 

Organize your retirement planning to stay on track

By organizing your retirement planning under these 3 pillars you can ensure that you aren’t letting the tail wag the dog. Having an organized way to deal with your retirement plan will ensure that you aren’t missing out on an aspect of retirement that could have a major impact on your life. 

Make sure to stick around for the listener questions segment of the show. You’ll hear me answer questions on how to calculate modified adjusted gross income to include capital gains and I’ll even respond to a recent critique that I had from one listener. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

REFLECTIONS ON RETIREMENT

  • [4:35] Overcoming frugality is a challenging thing for many recent retirees
  • [6:50] Retirement planning is complicated

LISTENER QUESTIONS

  • [13:07] Modified Adjusted Gross Income 
  • [16:33] My response to Janet’s critique
  • [18:57] Otto’s comments on a recent question I answered

TODAY’S SMART SPRINT SEGMENT

  • [22:28] Think about something that you need to undo

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM409.mp3
Category:general -- posted at: 8:21am CDT

Ever since listeners enjoyed our Retirement Tax Management series with Andy Panko we have received an influx of questions surrounding taxes. I’ll answer several questions today about filling up your tax buckets. 

I’ll also respond to queries about planning when to take Social Security when you will have excess RMDs and how to incorporate balanced funds into your asset allocation. Don’t miss this episode if you still have burning tax questions left over from last month’s series on retirement tax management. 

The Rock Retirement Club has so much to offer

The Rock Retirement Club recently hosted the Retirement Rodeo Round-Up in Fort Worth, Texas. I was so impressed by the levels of motivation and excitement that I saw from the participants. Everyone who attended was excited to share their knowledge and learn from each others’ journeys so that they could make the most out of their retirement. 

Have you considered joining the Rock Retirement Club? If so, or even if you just want to learn more about it, check out the virtual open house that we’re having on November 16. At the open house, you’ll get a sneak peek of the Club’s Retirement Master Class and preview member tools like Everplans and the New Retirement Planner Plus calculator. The open house will be a great way to decide whether the RRC is right for you. Register for this event at LiveWithRoger.com.

Are you having trouble overcoming frugality?

One common concern from the participants at the Retirement Rodeo Round-Up conference was the challenge of overcoming frugality. Like many Retirement Answer Man listeners, RRC members are amazing savers, but after saving and delaying gratification for so many years it is hard to break the habit. 

There is a mental shift that must take place to switch from saving to spending and shifting your mindset can be difficult. Instead of watching your accounts grow, you now see them stay stagnant or decrease over time and this can set off alarm bells in your mind. Have you experienced difficulty navigating this change? What did you do to shift your mindset from saving to spending?

When should Jenny claim Social Security?

Jenny has been a diligent saver and will end up having excess RMDs. This issue has caused her to think about the most beneficial time to claim Social Security. She is considering taking Social Security at age 62 to lower her income, but I have another strategy for her to consider. Listen in to hear my thoughts on what you should do if you have substantial projected RMDs. 

How to fill up your tax bracket bucket in retirement

One of the strategies that Andy Panko and I talked about last month in the Retirement Tax Management series was filling up your tax bracket. When filling up your tax bracket you'll want to take funds from your IRAs or other tax-deferred accounts and either spend that money, invest it in after-tax assets, or convert it to a Roth IRA. Work out the best situation for you by creating a retirement plan of record and then test different outcomes. Have you created a retirement plan of record yet? 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

LISTENER QUESTIONS

  • [2:40] It takes a big mental shift to stop saving and start spending
  • [4:01] How much to allocate to asset allocation if you have balanced funds in your portfolio?
  • [7:05] How Social Security works with RMDs
  • [13:10] How to fill up the tax bracket bucket
  • [15:15] What to do with the money that you fill up your tax bracket with
  • [16:26] Scott really enjoyed the episodes with Tanya Nichols

TODAY’S SMART SPRINT SEGMENT

  • [17:10] Calculate your projected income for 2021

Resources Mentioned In This Episode

Register for the Rock Retirement Club’s virtual open house at LiveWithRoger.com

Tanya Nichols with Align Financial

Check out Tanya Nichols in the Women in Retirement series - Start Here

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM408.mp3
Category:general -- posted at: 2:00am CDT

Do you wish you could find a comprehensive guidebook to help you plan your retirement? If so, you won’t want to miss this interview with Dr. Wade Pfau. Wade is the founder of the Retirement Researcher website and a retirement income professor at the American College. He is also the author of several books and his newest, the Retirement Planning Guidebook, was recently published. This book is the most detailed retirement guide that you will find, so don’t miss out on this interview to hear what to expect from Wade’s guidebook.

There is no one way to plan for retirement

Unfortunately, there isn’t a simple answer to how to plan your retirement. The way that works for you may not be ideal for your next-door neighbor. This is why it's important to come up with a strategy first. That way you can build your retirement plan according to your strategy. If you can come up with a flexible solution then you can make iterations based on changes in the world around you. Retirement planning is all about preparing for uncertainty. With the right strategy, you can make educated decisions to carry you through those uncertain times. 

Retirement choices cause a ripple effect throughout other areas

The choices you make in retirement have a ripple effect in many areas and one decision can create unexpected consequences in another part of your retirement plan. This makes it challenging to make any choices and can lead to analysis paralysis. 

Let’s see how one decision could lead to a domino effect. Say that you are trying to diversify your portfolio. If you sell a major position that you hold then you could end up with capital gains which could push you into another tax bracket which could eliminate the possibility of using ACA credits and so on. 

Rather than be paralyzed by the fear of making the wrong decision, you need to think in an organized way about what problem you would like to solve. If you are trying to lessen your market risk you will need to sell to diversify your portfolio. However, if you are trying to focus on getting ACA credits the decision to diversify all at once may not be the best strategy. 

How much should we consider tax policy in retirement planning

Taxes are one of the great unknowns in retirement planning. No one can say for certain how tax policy may change in the future. So how much should you try to predict tax policy changes when planning for retirement?

It is always good to start with a basis and then test different outcomes. The current tax rates are a good starting point for building your retirement plan of record. Once you build this foundation, you can tease out different outcomes as you learn more information. 

Retirement tax planning isn’t made on a yearly basis, rather you should plan to try and reduce your overall lifetime tax bill.

Learn how to utilize Social Security, plan for the unknown, and lower your lifetime tax bill on this episode of Retirement Answer Man with Wade Pfau. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WADE PFAU INTERVIEW

  • [3:30] One decision you make in retirement affects others
  • [10:21] There is no one way to plan for retirement
  • [13:31] How much should we consider tax policy in retirement planning?
  • [16:45] Social Security considerations
  • [25:53] Consider the premium cliffs that are out there
  • [31:31] How to factor in a cognitive decline
  • [34:58] How to navigate the lump sum vs. lifetime income decision

Resources Mentioned In This Episode

BOOK - Retirement Planning Guidebook by Dr. Wade Pfau

Retirement Researcher website

The American College

BOOK - How to Decide by Annie Duke

BOOK - Because a Little Bug Went Ka-Choo by Rosetta Stone

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM407.mp3
Category:general -- posted at: 2:00am CDT

Do you understand what you need to do to build a happy retirement? My guest today has studied the data to tell the story of happy retirees in his new book, What the Happiest Retirees KnowWes Moss is not only an author of multiple books, he is the host of the live radio show, Money Matters, and the Retire Sooner podcast. Learn the habits to develop now to create a happy retirement by listening to this interview with Wes Moss. 

Are you retiring to something or away from something?

The real-world data shows that 70% of people don’t like their job and 20% of people actively hate their job so much that they want to hurt the company they work for.

These sad statistics lead to people thinking that retirement is the answer to their unhappiness. However, it isn’t enough to retire away from something. We must retire towards something to find happiness in retirement. Is your objective to retire away from your job or towards happiness? Think about what you would like to retire towards. 

Do pre-retirees have misconceptions about what a happy retirement really is?

Most people have a preconceived notion about retirement. They believe that once you reach a certain level of financial security, you’ll stop working and then the skies will open up and the world will become a happy place. They feel like retirement will be some version of heaven.

However, the reality is much different. There is a period of transition and not an instant magical change. Preparing well in advance will help to create a happy retirement and avoid disappointment. 

It only takes $75,000 per year to be happy

One of the biggest worries in retirement is having enough money, but research shows that it only takes between $70,000 and $80,000 per year to create a happy life. Having more money won’t increase levels of happiness. 

It doesn’t take as much as you think to avoid an unhappy retirement. Even though many people feel the loss of a sense of purpose and increased loneliness once they retire, with a bit of preparation, anyone can create a happy retirement.

Habits to develop to create a happy retirement

Wes describes ten categories in his book that contribute to happiness in retirement. These habits include: 

  • Money habits
  • Curiosity habits
  • Family habits
  • Love habits
  • Faith habits
  • Social habits
  • Home habits
  • Health habits
  • Investing habits

Within these categories, only a few areas actually have to do with money. If you can build up a solid foundation of healthy habits before you retire, you will have a greater chance of creating a happy retirement. 

What the Happiest Retirees Know can even be used as a workbook. As you read through, find the habits that you want to improve and see how you can stack them to work on 3 or 4 together at the same time. Listen in to hear how golfing is a way that I habit stack areas that I am actively working on in my own life. What are you working on to ensure that you create a happy retirement? 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WES MOSS INTERVIEW

  • [2:30] The data tells the story
  • [3:55] Do pre-retirees have misconceptions about what a happy retirement really is?
  • [11:54] It only takes $75,000 per year to be happy
  • [15:14] If your base is in place then you don’t need to worry so much about money
  • [21:45] How to use Wes’s book as a workbook

Resources Mentioned In This Episode

BOOK - What the Happiest Retirees Know by Wes Moss

BOOK - You Can Retire Sooner Than You Think by Wes Moss

Retire Sooner podcast

Money Matters

BOOK - The Top Five Regrets of the Dying by Bronnie Ware

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM406.mp3
Category:general -- posted at: 2:00am CDT

Do you let perfection get in the way of progress? Trying to reach perfection could prevent you from reaching your goals. Retirement coach, BW joins me to discuss forward movement and setting realistic goals. 

In this episode, you’ll also hear listener questions about claiming spousal Social Security, preparing for retirement after divorce, and annoying financial surprises. You won’t want to miss the differing points of view on benefit protections, so make sure to listen until the end. 

What can Hazel do to prepare for retirement?

Hazel is 51 and going through a divorce. She doesn’t plan to retire until she is age 65 even though she is eligible for a pension at age 55. She is looking ahead to what she should be doing to prepare for her retirement in the midst of her divorce. 

The first thing that she needs to do is to get through this divorce. Divorces can be messy or they can be amicable. While no one wants to create a messy divorce, it is important to make sure to take care of yourself first. Don’t mistake being nice with sacrificing your own interests. 

The next thing to do is to continue to save in a 401K. Even though Social Security and the pension will be Hazel’s main income streams in retirement, it is important to continue to build her retirement savings. 

The last thing that Hazel and you can do to prepare for retirement is to head over to DoRetirementRight.com and download this guide that will walk you through the steps to take in the years leading up to retirement. 

How to time the spousal Social Security benefit

Mike has a question about the timing of his wife’s spousal Social Security benefit. He is considering taking his benefit early at age 62, but his wife is 3 years younger than him. If he takes his benefit at 62, his wife will still not be eligible for her benefit until she turns 62. However, if he waits until full retirement age at 66 then she could take her benefit at age 62. 

A great way to begin to plan this out is to create a retirement plan of record using the full retirement age as the basis and then to create different what-if scenarios. You can use the Spousal Social Security calculator to help calculate the percentage that your spouse would receive. Check out this recent interview I had with Wade Pfau to hear just how important Social Security is to retirement plans. 

An annoying financial surprise or spousal protection?

Rhonda doesn’t have a question but rather a comment on annoying surprises that she has discovered in her finances. She has a pension and has to decide how she wants to take it. Recently, she discovered that if she decides to take the maximum benefit that only covers her own lifespan then her husband has to sign off on the form to approve this benefit selection. 

This isn’t the only thing that she has noticed that she needs her husband’s notarized signature for. If she chooses to change her beneficiaries on her retirement accounts she must also get approval from her husband. 

Rhonda feels like this is one more obstacle for women to overcome to live life in a man’s world, but I have another perspective. These rules (which vary state by state) were actually created to help protect women when men were the main breadwinners. 

How do you see these rules? Do they protect women or make it more challenging for them to keep their hard-earned money?

Don’t let perfect be the enemy of the good

As we finish off the month-long series on retirement tax management it can be easy to get caught up in the details of optimizing your situation. However, trying to get something perfect can lead to analysis paralysis. Sometimes we just have to point ourselves in the right direction and move ahead. It is important to be realistic about what is possible. There are so many unknowns when it comes to future tax planning that it is hard to be precise. The most important thing to do is to get the big things right and let the small things take care of themselves. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [2:30] What can Hazel do to prepare for retirement?
  • [8:30] Mike’s Social Security question
  • [12:36] You don’t need to feel dumb
  • [15:12] Rhonda discovered annoying surprises to deal with as a woman

COACHES CORNER WITH BW

  • [21:07] Don’t let perfect be the enemy of the good

TODAY’S SMART SPRINT SEGMENT

  • [29:18] Have a safe Halloween

Resources Mentioned In This Episode

Start listening to the Women in Retirement series here

Spousal Social Security calculator

Wade Pfau interview

DoRetirementRight.com

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM405.mp3
Category:general -- posted at: 2:00am CDT

Over the past several episodes you have learned so much about tax planning in retirement. You learned why tax planning is important, all about the hidden tax bombs, and tools that you can use to defuse those tax bombs. Now it’s time to incorporate all of this newfound knowledge into your retirement plan.

Andy Panko from Tenon Financial joins me once again to discuss how to incorporate tax planning into your retirement plan. Press play to hear how you can create a retirement plan that incorporates tax planning.

How to become comfortable with uncertainty

Oftentimes people are looking for a hard and fast rule to follow to make their retirement plan foolproof; however, there is no magical number or rule to create an iron-clad retirement plan. We can’t predict the unknowable, so we have to become comfortable with the uncertainty that retirement brings. 

To help you conquer that uncertainty, it is important to build a process that will help you make better decisions. The way that you can do this is by creating a retirement plan of record and testing projections and what-if scenarios. By setting up a decision-making framework, you will be able to manage your retirement finances in an uncertain world. 

Tax planning is a way to optimize your retirement plan

Before you can start tax planning you need to ensure that you have the basics in place. As long as you can first map out the fundamentals of retirement planning like your expenses, your retirement paycheck, and your asset allocation you will then be able to optimize your retirement journey with tax planning. Remember that tax planning isn’t the main part of retirement planning, it is simply a way to enhance your retirement experience and financial plan in retirement. 

Choose a retirement planning tool and stick with it

There are plenty of tools on the market that can help you create your retirement plan and projections. In the Rock Retirement Club we use the paid version of the New Retirement Calculator, but there is also a free version that you can use. You may be happy by creating a simple spreadsheet to help guide you.

Just like there is no perfect retirement plan, there is also no perfect retirement planning tool. Whatever you decide to use, stick with that tool the way that you stick with the same scale to check your weight. You don’t want to flip flop back and forth between different calculators since the numbers may not look the same. 

Make an educated guess

Even though you can’t predict what will happen in the future with tax legislation, you can make educated guesses about what would work best for you based on your own situation. Educated guesses are not just guesses. By using your retirement plan of record and modeling what-if scenarios you know that you are doing your best to make the best decisions for your retirement. Your decisions won’t always be the ‘right’ decisions, but that doesn’t mean that you shouldn’t plan in the first place. 

By creating a retirement plan of record and making projections you will be able to create a model that you can work from. Staying agile is the most important way to establish a successful plan so that you can rock retirement. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [4:30] Build a process to make better retirement decisions
  • [7:52] Create a resilient plan
  • [11:11] What if scenarios are important to creating a retirement plan
  • [17:35] Educated guessing is a big part of retirement planning
  • [24:24] Action items
  • [30:05] How to choose a financial advisor or tool to help you plan

TODAY’S SMART SPRINT SEGMENT

  • [31:40] Start the process of getting a plan of record in place

Resources Mentioned In This Episode

Tenon Financial

BOOK - Thinking in Bets by Annie Duke

BOOK - How to Decide by Annie Duke

The New Retirement Calculator

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM404.mp3
Category:general -- posted at: 2:00am CDT

Roth conversions, HSAs, pension choices, risk management: these are the topics of today’s listener questions. 

Susan, Gina, IM, and Daniel all submitted their questions to me via RogerWhitney.com/AskRoger and you can too! If you have any retirement questions, or even if you simply want to leave a comment about the show, click on the link to present your question. 

Whether you are looking to learn more about HSAs, Roth conversions, or evaluate your pension choices, listening to other listeners’ questions can help you learn how to frame your own questions and consider your options by always keeping your goals in mind.

How to evaluate the best way to take a pension?

Susan recently asked her financial advisor how she should take her pension and wasn’t satisfied with his answer. 

There are several options to choose from when deciding how to take a pension. One choice is to take the pension for a larger monthly sum for the duration of the pensioner’s life. Another option is to take a smaller amount over the course of the lives of both the pension holder and their spouse. A third option is to opt for a lump sum payment and forgo the monthly payments altogether.

When making this decision there are a few ways to evaluate your choices. Create a what-if scenario to help you compare all the options. Then evaluate them next to your retirement plan of record. Listen in to hear how I perform this exercise with my clients. 

HSAs after age 65

HSAs are amazing tools that can help you reach your retirement goals. Gina’s question is about HSAs after age 65. She is still employed and plans to continue working for a few more years. She would like to continue to stay enrolled in her high deductible insurance plan so that she can continue to contribute to her HSA, but she isn’t sure how that would affect her Medicare choices. 

This is a great idea but navigating these waters is tricky since the rules surrounding Medicare are so complicated. Making a mistake could lead to a gap in coverage or even a lifetime penalty on parts B and D premiums. 

You’ll first want to check the rules surrounding your Medicare eligibility with your employee health insurance provider. Next, you should contact a Medicare navigator like Boomer Benefits

Should IM roll over her 401K to a Roth if she is worried about financial protections?

IM writes in with a question about rolling over a 401K to a Roth IRA. She is worried about losing ERISA coverage when transitioning this money. ERISA stands for the Employee Retirement Security Income Act which was put in place to protect workers’ retirement plans. 401Ks are covered under this federal law; however, the protections for IRAs vary wildly from state to state. 

The first thing to do when considering this question is to check on the rules governing Roth IRA protections in your state. Next, you’ll want to evaluate your personal financial risk and how important this kind of coverage is to you. 

Make sure to scroll down to the bottom of the show notes to check out all the links to the resources mentioned in this episode.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

LISTENER QUESTIONS

  • [4:41] Which pension choice best suits Susan’s needs?
  • [13:40] A question about HSAs after age 65
  • [17:23] Do the risks associated with Roth IRAs outweigh the benefits?
  • [22:12] Daniel has a few Roth conversion questions
  • [30:22] Daniel has a few HSA questions

Resources Mentioned In This Episode

YouTube episode with Andy Panko on retirement tax bombs

Boomer Benefits

BOOK - Retirement Planning Guidebook by Wade Pfau

Interview with Wade Pfau

The Retirement and IRA Show

NeuYear.net

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM403.mp3
Category:general -- posted at: 2:00am CDT

Are you worried that you won’t be able to live the life of your dreams in retirement? This is one of the main issues facing many people on the cusp of retirement. That’s why I created the Retirement Answer Man Show. I want to help you find the confidence to truly rock retirement.

One way that you can become more confident in your retirement plan is by utilizing the tax planning tools that are available to you. Andy Panko from Tenon Financial is here to help you identify all the tools available in your tax toolbox. Press play to open up your tax toolbox and see what is inside.

Opening your tax toolbox 

Before you can pick up a tool from the tax toolbox you must start with a broad understanding of your tax situation both now and in the future. This means that you’ll have to do some educated guessing to figure out what your future tax situation will be.

Projecting your tax situation out 10 or 20 years down the road won’t be an exact science, so don’t try to make it so. More accuracy doesn’t mean more precision in future tax planning; there are too many factors at play.

Simply because your tax situation won’t be exactly the way that you estimate it to be doesn’t mean that you shouldn’t take the time to map it out. You must take this step to get the framework you need to make educated decisions. This framework will be your basis for making practical decisions.

4 useful tools in your tax planning toolbox

  1. Fill up your tax brackets. If you retire before you start taking Social Security you may find yourself in an unusual situation. You may not have any income and therefore you won’t have a tax bill! Rather than marveling at this newfound freedom from the taxman, you may actually want to realize enough income to stay within the 12% tax bracket. By paying a bit in taxes now you could be utilizing an opportunity to lower your lifetime tax bill. Remember that those tax-deferred accounts are sitting there waiting for you to pay taxes on them when you reach age 72. 
  2. Do Roth conversions. While you’re filling up the lower tax brackets you can convert your tax-deferred assets to Roth. The money will continue to grow, but you’ll be able to rest easy knowing that the taxes have already been paid. By performing Roth conversions you'll ensure that you won’t have all of your assets in tax-deferred accounts waiting for your RMDs. By converting some of your assets into Roth you’ll provide yourself with more flexibility, control, and optionality. 
  3. Tax-loss and gains harvesting. Tax-loss and gain harvesting is a little-utilized tool that applies to brokerage accounts when you sell a position and realize a gain or a loss. You can use these gains and losses strategically to optimize your tax situation. Listen in to hear how this tool could work for you. 
  4. Qualified charitable donation. If you are charitably minded QCDs are a great way to give to your favorite charity and save money on taxes at the same time. The trick with QCDs is that they must transfer directly from the IRA custodian to the charity. 

In retirement, tax planning isn’t the same as in your working years. You need to plan ahead so that you can optimize your lifetime tax bill.

Next week you’ll learn how to incorporate all of these tools into your retirement plan so that you can avoid those tax bombs. Don’t miss that episode so that you can build a retirement plan that will give you the confidence to rock retirement. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [1:30] Financial planning should be a collaborative process
  • [7:25] Opening your tax toolbox 
  • [13:29] Filling up your tax brackets should be your first tool
  • [21:44] Roth conversions
  • [29:39] Tax-loss and gains harvesting
  • [39:36] Qualified charitable donation

TODAY’S SMART SPRINT SEGMENT

  • [42:03] Map out your future income and build a net worth statement

Resources Mentioned In This Episode

Tenon Financial

Jordan Peterson

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM402.mp3
Category:general -- posted at: 4:27pm CDT

Do you feel like you are late to the ball game in saving for retirement? Have you ever wondered if an annuity could take some of the stress out of writing your own retirement paycheck? Are you trying to figure out the best way to self-fund long-term care for you or your spouse? 

All of these questions come directly from listeners like you. If you have questions about retirement, Fridays are a great time to tune in. We are now releasing 2 episodes a week: one focused on the monthly theme and the other focused on listener questions. 

If you have a query of your own question head on over to RogerWhitney.com/AskRoger to submit your retirement questions. 

How to maximize retirement savings after getting a late start

Catherine writes that this podcast has helped her get over the shame and frustration of not prioritizing her retirement savings earlier. Now that she has worked her way through those feelings she wonders what the best way to increase her retirement savings would be after getting a late start.

Catherine is maxing out her 401K, and her husband has a simple IRA and no access to a 401K. However, if he could convince his partners to switch to a 401K he could max out the contributions and begin to expand their savings. 

Another way to get plenty of bang for your buck is to use an HSA. Many people don’t consider the HSA as a retirement account, but it can be a great way to help play catch up. You can contribute up to $7200 per year to your health savings account if you are enrolled in a high deductible insurance plan. Not only do you get to use pre-tax assets, but you can invest those assets to use in retirement. If you invest your HSA aggressively, it can become like a supercharged Roth IRA.

Would an immediate annuity be a good idea for Mary?

Mary is considering purchasing an immediate annuity with the proceeds from the sale of her house. She would like to receive between $1000-2000 per month from the $300,000 profit.

A single premium immediate annuity (SPIA) could provide this kind of stable return, but before she jumps into such an arrangement she should consider the pros and cons of this type of annuity.

The pros and cons of purchasing a SPIA

One of the main reasons that people consider purchasing an annuity is their ease. With the SPIA Mary won’t have to manage her investments or worry about the markets. She’ll be receiving a guaranteed income for the rest of her life. There is definitely an advantage to this kind of simplicity. 

On the other hand, if she passes away shortly after purchasing the annuity then the money will not be hers to pass on to her heirs. By giving up her $300,000 and committing to an annuity she loses out on optionality. One way to combat this would be to make sure to have liquid assets on hand in case of an unforeseen event.

Press play to hear my thoughts on purchasing an annuity and to learn how to self-fund for long-term care.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

LISTENER QUESTIONS

  • [2:57] Getting over the regret of not saving better sooner
  • [10:06] Tom wonders if there will ever be an audiobook version of Rock Retirement
  • [11:46] Would an immediate annuity be a good idea?
  • [17:34] How to best self-fund for long-term care

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

 

Direct download: RAM401.mp3
Category:general -- posted at: 2:00am CDT

Have you been incorporating tax management into your retirement plan? If you have, you won’t want to miss this series, and if you haven’t, you definitely won’t want to miss this series. 

Last week we set the stage for this retirement tax planning series when we discussed how planning for taxes can work within your retirement plan. This week we’ll make you aware of the hidden tax bombs that could wreck your retirement plan. In next week’s episode, we’ll learn which tools you can use to defuse those tax bombs, and then in the last week of this series, we’ll learn how to integrate those tax tools into your retirement plan.

My goal is to give you an organized way to incorporate tax planning into your overall retirement plan which is why I have invited retirement tax expert Andy Panko from Tenon Financial to join me to discuss the nuances of retirement tax planning. If you are ready to learn about the hidden tax bombs that are awaiting you in retirement then press play now. 

Required minimum distributions, the tax bomb that begets other tax bombs

When you contribute your taxable income into a 401K, 403B, or other tax-deferred accounts your taxable income is reduced in the year that you make that contribution. However, many people forget that they are simply deferring that taxable income until later. Remember that taxes are never a question of if you will pay them, it's always a matter of when. Required minimum distributions (RMDs) are the government’s way of insisting that you pay the piper. 

RMDs begin at age 72 and at that time you must take 3.9% out of your tax-deferred accounts at this time. The percentage that you must take from these tax-deferred accounts grows each year.

The best way to defuse this bomb is to project the total that your tax-deferred accounts will grow to so that you can get a feeling of how much you will need to withdraw when the time comes. 

Yes, Social Security can be taxed!

Did you know that Social Security is taxable? It has been since 1984 and up to 85% of your Social Security benefit can be taxed. Just how much is taxable depends on your other sources of income. The more gross income you have, the bigger percentage of your Social Security benefit will be taxed. If you are curious about the percentage of your Social Security income that could be taxed then make sure that you are signed up for the 6-Shot Saturday newsletter. 

Do ACA subsidies fit into your retirement plan?

If you are in need of health care before the age of 65 you may want to use Healthcare.gov. The way the marketplace works is by using a tax subsidy system. If a person makes between 1-4 times the poverty level ($17,000) then they can qualify for tax subsidies on a sliding scale.

If you can keep your income below the threshold, then you could qualify for the ACA tax credits. Keeping your income low needs to be balanced with the rest of your retirement goals which is why it is important to have a retirement plan of record. 

There are several more tax bombs out there ticking away. To learn what they are you’ll have to press play to listen.

If your interest in retirement tax planning has been piqued by this series and you want to learn more, check out Andy’s Taxes in Retirement Facebook group. With over 16,000 members, this group is a great way to exchange ideas with others who are on the same journey. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [2:50] RMDs are the first tax bombs
  • [11:30] Social Security is the next tax bomb
  • [15:46] Will Social Security go broke?
  • [21:41] Taking advantage of the ACA subsidies
  • [31:00] When you need to watch out for IRMAA
  • [37:50] Do you need to be careful of NIIT?
  • [38:55] A change in marital status could surprise you

TODAY’S SMART SPRINT SEGMENT

  • [44:29] Understand the important numbers sheet in the 6-Shot Saturday email

Resources Mentioned In This Episode

Tenon Financial

Andy’s Taxes in Retirement Facebook group

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM400.mp3
Category:general -- posted at: 2:00am CDT

Are you a bit behind on your retirement savings and wondering how you’ll ever be able to retire? One of our listeners feels the same way. In this Listener Questions episode, I’ll answer his question as well as how to handle net unrealized appreciation (NUA), how to shift retirement savings after a job loss, and we’ll wrap it up by discussing the ramifications of taking Social Security early.

We’re trying a new format this month and releasing 2 episodes a week. On Tuesdays, we’ll release the main segment which focuses on the theme of the month, and on Fridays, you’ll hear listener the questions. Make sure to check out all the episodes and let us know if you like the new structure.

Change is hard!

October has been a month full of change for me and change doesn’t always go smoothly. Not only am I publishing 2 episodes per week, but I’ve stopped drinking alcohol and started exercising in the mornings rather than in the afternoons. 

Any time you bring about changes to the rhythm of your life it can be a challenge. This is why the transition into retirement can bring such trepidation. Even if something new seems daunting, with practice over time the situation will improve. The more you practice the bigger your muscles will get.

With a bit of research, planning, and action, you can learn how to create a paycheck for yourself in retirement, how to tackle your taxes, and how to navigate the healthcare system. Listening to retirement podcasts like this one is a great way to get started. 

How to go from zero to retired

Not everyone has a 7 figure retirement portfolio, in fact the majority of the population finds themselves wondering how they’ll ever be able to stop working. One listener asks how he’s supposed to be able to catch up on retirement savings at age 50. 

The first thing you need to do if you feel behind in your retirement savings is to acknowledge and accept where you are. The next thing you need to understand is that there is only so much catching up that you can do at this point. 

Social Security will be a large part of your retirement equation

After you realize that there is only so much you can do it is time to figure out how to maximize your Social Security benefit. There are a couple of ways that you can do this. The first one is to work longer so that you can increase your benefit. 

The next idea is to navigate when would be the best time for you to file for your Social Security benefit. If you take it early at age 62 you may see your benefit decreased by 30%. Waiting until the full retirement age at 66 or 67 will ensure that you get your full benefit amount, and each year that you wait to file your benefit will increase by 8%. The beauty of Social Security is that it is adjusted each year for inflation and it lasts for the rest of your life.

Retirement is about living out the best version of yourself

To create a retirement plan you can live with, you’ll want to increase your income and decrease your monthly obligations as soon as possible. Identify which bills you can pay off and try using the debt snowball method to pay down your debts. The less you can live on the more prepared for retirement you will be. Try to create a living environment that doesn’t require a lot of money. 

Remember that rocking retirement isn’t about spending loads of money, it’s about creating an environment where you can live the best version of yourself. 

If you have a question to ask head on over to RogerWhitney.com/AskRoger to send a written question or leave a voice message. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

  • [5:00] How to go from zero to retired in 10 years
  • [12:08] How to handle net unrealized appreciation (NUA)
  • [20:23] How to shift retirement savings after a job loss
  • [25:25] The ramifications of taking Social Security early

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM399.mp3
Category:general -- posted at: 2:00am CDT

Tax planning in retirement isn’t the same as in your working years. This is why we are dedicating an entire series to helping you understand how to manage your taxes in retirement. To help me navigate this complicated topic, I’ve invited retirement tax expert Andy Panko to join me for the whole month-long program. Over the course of this series,
you’ll learn why tax planning is important in retirement, which tax land mines to look out for, what tools to include in your tax toolbox, and how to integrate tax planning into your retirement plan. Are you ready to dive deep into retirement tax planning? Press play now to learn why tax planning in retirement is so important.

How does tax planning change in retirement?

In your working years, tax planning isn’t that complicated. Since your income is based on your wages, you don’t have much control over your tax bracket. However, in retirement, you can control your tax bracket from year to year.

Chances are, you have been contributing to tax-deferred accounts like 401K, 403B, or IRAs for much of your life. These have been wonderful vehicles for retirement savings that has allowed you to defer a bit of your taxable income. Now that you are coming to retirement age, it is time to pay the tax man. These retirement distributions will be taxed, but when you decide to take them is up to you--up to a certain point.

Use long-term tax planning to save money in retirement

In retirement, there are multiple tax planning opportunities that you can take if you plan for the long term. Since you have more control over your sources of income, you have a tax advantage that you didn’t have in your working years. This can make planning complicated and challenging; however, with a bit of research and practice you could end up saving thousands of dollars over the course of your retirement.

Taxes aren’t the only thing to consider in retirement

Don’t let the tax tail wag the dog. Even though it is important to consider your taxes in retirement it is also important to remember that taxes are not the end all be all of retirement planning. What Andy and I are trying to do is to help you build a framework so that you can consider your tax planning in an organized way. When you come up with a strategy to guide your decisions it will help make the complicated world of tax planning a bit easier to digest. 

Check out this episode on YouTube

Did you know that we are now recording the Retirement Answer Man as a biweekly show? Make sure to check back in on Friday mornings to hear the Q&A part of the show. You can also watch this episode in a video format on YouTube so that you can see the charts and tables that we share. When you are done listening head on over to RogerWhitney.com and scroll down to the bottom of the homepage to sign up for the 6-Shot Saturday newsletter so that you can receive the worksheets mentioned in this episode

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [2:33] What are the changes in taxes in retirement?
  • [7:00] Think long-term when tax planning in retirement
  • [11:36] Taxes are important but not the end all be all
  • [17:17] Trying to understand the tax system

TODAY’S SMART SPRINT SEGMENT

  • [28:26] Pull out your tax return to find your AGI

Resources Mentioned In This Episode

Tenon Financial 

Andy’s Taxes in Retirement Facebook Group

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM398.mp3
Category:general -- posted at: 2:00am CDT

If you are the non-planning type, it can be easy to worry about whether your retirement plan is on track. How are you supposed to know what is going on and whether you should have the confidence to know if your plan is working?

On this episode of Retirement Answer Man, you’ll learn 5 things that you can check periodically to give you an idea if your retirement plan is on the right track. If you are wondering how to investigate whether or not your retirement plan is on track, then make sure to listen to this episode to learn what you need to know. 

Where does confidence come from?

The whole point of retirement planning is to give you the confidence to live life in your retirement without worry. Before you create your retirement plan you need to understand what it is that will give you confidence in that plan. 

Confidence comes from understanding. To understand your plan you need to first set your goals. What is your vision? Once you have a vision of your ideal retirement then you can deconstruct that vision to map out your journey. That journey will take you from the current version of yourself to the future you. To map your journey you need to have clear action items to lead you along each step of the way. 

There is no need to look around at others on their journey since each one is personal. Your retirement journey is yours alone. 

5 things you should track to feel confident in your retirement plan

  1. Have your goals changed? Assess your goals with your significant other or advisor to make sure they still reflect what you really want. Are you still aiming for the same target? Is this still the life you want to build or has anything changed? 
  2. Check in with your spending. How is your current spending relevant to your overall plan? Track your spending goals to see if they are still relevant. At the end of each year look back at what you actually spent your money on. You’ll want to make sure to track how you did relative to your plan. Sometimes you may deviate from the plan a bit, but by tracking you can identify trends over the long term. Tracking can help you to tease out opportunities and risks
  3. Is your plan still feasible? Should you make a change? Big expenditures can pop up, the market could go down, expenses could go up: all of these things could change your plan’s feasibility. One way to check to see if your plan is still feasible is to track your withdrawal ratio. This is the percentage of your assets that you take out of your portfolio each year. Tracking your withdrawal ratio can help you recognize whether your retirement plan is sustainable. Listen in to learn what else you should consider to ensure that your plan will actually work.
  4. Make sure your retirement plan is sustainable. Is it resilient? Do you have enough financial nutrients in the near term, midterm, and long term? Check out last week’s episode to hear more about how to plan for the short-term, mid-term, and long-term in retirement. 
  5. Focus on the WHAAM. Think about what you should do next. Then figure out how to do it, get accountability, take action, and finally, achieve momentum. In your retirement planning, think about how you can shift your focus to best serve yourself.

If you want to ensure that you will rock retirement, then continually check in with these 5 areas.

Are you ready for more Retirement Answer Man?

For the past 7 years without fail, we have brought the Retirement Answer Man to your earbuds on a weekly basis. That is about to change.

Starting in October we will be splitting the podcast into two separate parts released on two different days. Coming on Tuesdays you’ll hear the Q&A part of the show. On Fridays, we’ll focus on the monthly theme. 

This split will allow us to dive a bit deeper into our monthly topics and answer more of your questions. It will also allow you to decide to listen to what you want to hear. We value your feedback, so please let us know what you think of this new setup. 

 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [6:25] A triathlon story to illustrate how humans overcomplicate things
  • [14:40] Where does confidence come from?
  • [16:13] 5 things you should track to feel confident in your retirement plan

LISTENER QUESTIONS

  • [27:00] How does Josh designate pretax and post-tax contributions when they are commingled
  • [33:26] How to understand the options to deal with precious metals

COACHES CORNER WITH BW

  • [37:31] What do people need to know about retirement planning the non-financial side of retirement?
  • [39:26] How will you spend your days in retirement?

TODAY’S SMART SPRINT SEGMENT

  • [43:34] Get answers to the 5 things we covered

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM397.mp3
Category:general -- posted at: 2:00am CDT

As the non-planner of your family, you may not be interested in all the nitty-gritty details of retirement investments, but it is important to know the basics. That’s why today we will cover the main concepts about investing your assets. Hopefully, my nutrition analogy will help make these financial concepts more understandable. Press play to hear what you need to know about investment basics for the non-planner. 

Investing in retirement is all about solving for risk

Last week you learned how inflation and market volatility are the two risks to overcome when investing in retirement. Solving for these risks are the most important part of creating a retirement portfolio. 

To explain retirement investing, I like to think of nutrition. When you eat you solve the problem of being hungry now, but you also solve the problem of getting nutrients to your body to help ensure that you stay healthy in the future. Investing also serves to help you in the short and long-term.

How are you nourishing your investments in the short-term and the long-term?

With every meal you eat you are investing in your short-term energy. The vitamins and minerals that you may take help you invest in your long-term health. We keep enough cash and bonds on hand to sustain ourselves for the next 1-5 years and protect from market risk. 

Stocks and real estate investments can have ups and downs which can be scary in the short term but in the long-term they help to hedge against inflation. 

Ask your financial planning partner how you are nourishing your investments in the short-term and the long-term.

The building blocks of investment

It is important to learn the building blocks of retirement investing. Building a retirement portfolio is much like building a meal. There is the salad, the main course, and the dessert. Short-term investments are the funds that you plan to use within 1-5 years, mid-term investments will be used within 5-10 years, and long-term investments are funds that you don’t plan to use for more than ten years. Listen in to learn how these different investments are like building a meal.

Be sure to join us in October for the Taxes in Retirement series

Make sure to join us next month as we dive into taxes in retirement. We have certainly covered this topic before, but a lot has changed since the last time we discussed taxes. We’ll explore proposed tax law changes and discuss how that could affect you and your retirement. 

Andy Panko from the Taxes in Retirement Facebook Group will join me over the course of the entire series. If you are really looking to nerd out on taxes, then don’t miss the episode with Wade Pfau who joins me to discuss his tax management academic research. If you are a part of the RRC you’ll get the added benefit of having both of these guests in the Clubhouse for meetups. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [3:30] An investment analogy
  • [10:04] How to invest for the short and long-term
  • [18:25] The building blocks of investment

Q&A WITH NICHOLE

  • [22:51] What are some solutions to the Social Security funding problem
  • [29:19] The Rock Retirement book has been helpful to Steven
  • [33:32] Why I haven’t covered the sale of a business to fund retirement
  • [35:25] Will Jim’s retirement strategy work?

TODAY’S SMART SPRINT SEGMENT

  • [40:24] Think about how you will pay for life in the short-term, mid-term, and long-term

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM396.mp3
Category:general -- posted at: 2:00am CDT

Are you the person in your family that stays away from financial planning? Do numbers and financial jargon put you to sleep? If so, this is the right retirement planning series for you. This episode is the third in the Retirement Planning for Non-Planners series. In this series, I explain what you need to know without all the financial lingo so that you can understand the most important aspects of retirement planning. 

In this episode, Fritz Gilbert from The Retirement Manifesto blog joins me to discuss the basics of retirement planning risks. Listen in so that you can understand what to look out for in retirement planning.

This is a financial jargon-free series

If you aren’t interested in finance it can be difficult to discuss retirement planning with someone who is. They start throwing terms like RMD, sequence of returns risk, and the 4% rule. When people start using these terms it can be easy to become overwhelmed. The purpose of this series is to empower you so that you can have an understanding of what is happening with your money to help make better choices. My goal is to explain retirement planning in a non-geeky way that anyone can understand.

What are the financial risks in retirement?

Retirement brings different types of risks for your money. Essentially there are two types of risks to be aware of: short-term and long-term risks.

Think about a teeter-totter. On either side of the teeter-totter, you have your short-term risk and your long-term risk. The short-term risk is losing money today and the long-term risk is losing money in the future. You need to come up with a solution that balances both of these risks without tilting too much to one side. 

We lose money in the short term through market risk. If the market takes a tumble, you could lose a significant portion of your savings. The solution to that is to take all of your money out of investments and have it sit in cash. Unfortunately, this solution to the short-term risk doesn’t work in the long term. 

The long-term financial risk is inflation. You may have noticed gas prices or food prices increasing over time. This means that your dollar today won’t be worth the same as your future dollar. As prices increase the value of your money decreases. We combat long-term inflation risk with investing, however, this solution puts us at risk in the short term. 

How to balance retirement risk

To balance both sides of the risk spectrum it is important to think about how much money you will need to support your lifestyle in the near future. You’ll want to consider how much cash you should have on hand if the market drops. This will help you mitigate the short-term risk while at the same time leaving the rest of your savings to grow in the long term. The goal of balancing these risks is to have the confidence to have money to spend next year and also to spend when you are 80.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT WITH FRITZ GILBERT

  • [2:30] Financial lingo can be intimidating
  • [6:37] Short term risks
  • [10:47] Inflation is a long term risk
  • [18:37] How to deal with spending shocks
  • [25:55] Understand what types of questions to ask
  • [28:39] Catching up with Fritz in retirement

LISTENER QUESTIONS WITH NICHOLE

  • [38:24] 6-Shot Saturday drama
  • [42:15] Should Shari take the lump sum or an annuity?
  • [48:20] How do I feel about LIRPs?
  • [54:36] What are the non-financial boundaries of a fiduciary?
  • [1:00:24] A question about my pronunciation of words
  • [1:02:47] A proposal for changing the GAA acronym

TODAY’S SMART SPRINT SEGMENT

  • [1:04:34] Organize the strategy that best works for you

Resources Mentioned In This Episode

Retirement Manifesto

Retirement Planning for Non-Planners - start with this first episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM395A.mp3
Category:general -- posted at: 11:22am CDT

When you hear financial lingo do you immediately begin to tune out? Does retirement planning make you nervous? If so, this is the right series for you. You’re listening to a 5-part series on retirement planning specifically designed for non-planners. 

The goal of this series is to educate you on retirement planning without all of the confusing lingo. We’re going to keep it simple and focus on teaching you the most important aspects of retirement planning. If you haven’t listened to episode 393, go back and check it out so that you can understand how to begin planning for retirement. 

You only need to focus on the important aspects of retirement planning

There are many retirement planning geeks out there that love to focus on the economy, markets, and business cycles. They relish mapping out different Roth conversion scenarios to reduce their RMDs. But if you aren’t a planning geek, talking to those people can make retirement planning seem overwhelming. 

You’ll be happy to learn that to successfully plan for retirement you don’t need to have a degree in economics, you just need to make sure that you focus on the most important things. That is what we are doing here today. I’m here to help you understand what the most important aspects of retirement planning are. 

Can your retirement dreams come true?

During the previous episode, you created a vision of your ideal retirement. Now it’s time to see if you can make your retirement dreams a reality. The biggest question everyone has in retirement planning is will I run out of money? 

The answer is, no one knows. The economy, life’s surprises, and people’s perpetual habit of changing their minds make it impossible to be sure. There are too many unknowns to be certain about the future. However, it is okay to have that uncertainty. 

If you can get a good approximation of a retirement plan then you can make adaptations to your plan as life unfolds. I use agile retirement management to help my clients make adjustments to their retirement plan when life shocks or bad markets disrupt their plan. 

Where will your retirement income come from?

When planning your retirement you’ll want to consider the income you will receive from Social Security, pensions, or even part-time work. The rest of your retirement income will need to be covered by your retirement savings. 

There are many software tools that can help you plan your retirement. It is important to use a retirement calculator to estimate how much money you will need to live out your retirement dreams. In the Rock Retirement Club, we use the New Retirement Plus Calculator. A retirement calculator can give you a long-term projection of your retirement income needs. 

Have your first 5 years of retirement income readily available

While retirement planning software can help you plan out the long-term, you’ll want to understand where your money is coming from in the near term. You should have the next 5 years of spending readily available in accounts that aren’t exposed to the winds of the economy like money market accounts or CDs. 

Listen in to learn what the most important aspects of retirement planning are so that you don’t get worried about getting caught up in the small details that don’t matter as much. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [3:51] Can you safely pay for your dream retirement?
  • [6:55] Where will your retirement income come from?
  • [13:45] Recheck your retirement compass periodically

LISTENER QUESTIONS

  • [19:31] Does it make sense to make after-tax 401K contributions?
  • [23:14] How to estimate MAGI for an IRMAA appeal?
  • [28:12] Can you start Social Security benefits from one spouse early and then wait for the other spouse’s benefit?
  • [29:35] Should I open a non-retirement account?

TODAY’S SMART SPRINT SEGMENT

  • [33:45] Understand the resources you have available to use in retirement

Resources Mentioned In This Episode

NewRetirement.com

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM394.mp3
Category:general -- posted at: 2:00am CDT

Do your eyes glaze over when your significant other starts talking about money? Or maybe you are single and you know that retirement is coming soon, but you simply can’t get motivated to plan it out? Or perhaps you are the planner of the family and you would like your partner to take an interest in what lies ahead in retirement? If so, then this is the series for you!

Those of us who are into retirement planning can quickly overcomplicate things, but to someone that is new to all this or not really into this planning stuff, retirement planning can be overwhelming. In this Retirement Planning for Non-Planners series, I will introduce you to retirement planning in a lingo-free way that won’t put you to sleep. 

The objective of the Retirement Planning for Non-Planners series

My goal for this series is to give you the power to participate in the retirement planning process. If you are planning your retirement on your own I want you to understand what you need to take care of and understand the basics without becoming overwhelmed. You’ll learn the fundamentals and be able to discuss retirement planning in an educated way. Are you ready to get started? Press play now!

What do you envision yourself doing after your working life?

What do you want for your life after work? Have you thought about this question? This is actually one of the most difficult questions to answer, but it is also the basis for retirement planning.

It can be challenging to consider your life after work. There are so many options to consider and you are starting with a clean slate. Many of us treat this question the way we chose a major in college or our first job. But you don’t have to take this so seriously. Your life will not be ruined if you don’t get this question right. Since we use an agile approach to retirement planning, if you want to switch gears you can. Consider your future life after your working years. What can you imagine?

The retirement fundamentals

Once you know what you want to do in retirement, the next question is can you afford it?

After you discover whether you can afford your dream life then you need to learn how to pay for it. You’ll want to find out how you actually create a retirement paycheck. The last question we’ll consider is how to gain the confidence to make it all work. You must have confidence in your plan to rock retirement. 

Over the course of this series, we’ll be taking a look at these questions so that you can build a retirement plan that works for you. 

Set your retirement goals

To prepare for your retirement you’ll need to forecast your spending. To do so, can create different levels of spending. Your must-haves are things like housing, electricity, water, gas, and food. These barebones expenses are nonnegotiables.

In the next category, put the things you would like to do in retirement. Maybe you would like to play golf once a week, travel once a year, or eat out a few times a month.

The last level is your unspoken dreams that you like to think about but you may have never written down. This is your opportunity to think big.

You’ll want to group these different types of spending so that you can have an idea of how much money each type of retirement would need. 

Listen in to hear why this type of exercise is so important in your retirement planning. You won’t want to live a life of regret thinking about what you might have been able to do had you thought bigger when planning your retirement. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [2:55] What are the fundamentals of retirement planning?

PRACTICAL PLANNING SEGMENT

  • [5:49] What do you want?
  • [8:34] Setting retirement goals
  • [13:45] Don’t let someone else dictate your life
  • [18:51] What will you do every day in retirement?

LISTENER QUESTIONS

  • [22:29] When to apply for Social Security
  • [23:32] How to reduce the effect of inflation in your 5-year income floor
  • [27:48] How to get started early in retirement planning and saving
  • [34:30] My own plans for retirement

TODAY’S SMART SPRINT SEGMENT

  • [39:48] Think about your must-haves, like-to-haves, and cool-to-haves

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM393.mp3
Category:general -- posted at: 2:00am CDT

You may notice that this is an extra episode this month. I wanted to make sure that we mark a special ending to the August Women, Money, and Retirement series, so at the beginning of the month I reached out to some amazing female financial professionals. I asked them all for a piece of financial wisdom to share with other women. You can hear their fantastic insight by pressing play now. 

Cristina Guglielmetti’s words of wisdom

Cristina Guglielmettti from Future Perfect Planning offers suggestions about making 401K contributions. She recommends that you update your contributions regularly, especially if your salary has increased. 

Set a goal for yourself. How much would you like to save each year? Are you reaching that goal?

If your goal contribution is more than your current contribution then changing it immediately could eat into your take-home pay and disrupt your budget. Instead of trying to achieve your goal contribution all at once, try increasing your contribution rate a little at a time. 

Then set a reminder for yourself to increase your contribution quarterly until you reach your target percentage. This way you won’t feel the decrease in take-home pay all at once. 

Small, repeatable changes are easier to keep up with which makes it easier to maintain your financial plan. Listen in to hear what else you can do to increase your retirement savings. 

Jane Mepham shares financial advice passed down from her mother

Jane Mepham from Elgon Financial Planning grew up in a different country in a male-dominated society which meant that she had to learn a lot to get ahead in life. When she was young, her mother shared financial advice that she uses even to this day. She knows that attitude is the key to mastering money and it will determine the strategies and tactics that you will use to plan your retirement. Enjoy these words of wisdom from her mother. 

  1. Make sure you can support yourself financially. You don’t ever want to have to rely on someone else to support you. 
  2. Don’t eat your future today, however enticing it is. Regardless of how tight your budget is, prioritize saving for the future. 
  3. If something affects you on a daily basis it is important. You need to know enough about it to make independent, smart decisions. 

The way you spend your money should align with your values

Stephanie Sammons from Sammons Financial and Stephanie McCullough from Sofia Financial have similar advice. They want you to identify what is most important to you. They both stress that you need to define your values so that you can align your spending to reflect what you value the most. All your money decisions should be in alignment with your values and your life. 

Many people often separate their financial decisions from the rest of their life, however, money is connected to everything we do. By aligning your financial life with the rest of your life you will give meaning to your money. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WORDS OF FINANCIAL WISDOM FROM THE EXPERTS

  • [1:20] Cristina’s recommendation
  • [3:13] Jane Mepham’s words of advice
  • [6:25] Stephanie Sammon’s proactive step to improve your financial life
  • [9:26] Stephanie McCullough 

Resources Mentioned In This Episode

BOOK - How to Be Here by Rob Bell 

Retirement Money Gal podcast

Take Back Retirement podcast

Sofia Financial - Stephanie McCullough

Sammons Financial - Stephanie Sammons

Elgon Financial Planning - Jane Mepham

Future Perfect Planning - Cristina Guglielmetti

Rock Retirement Club

Direct download: 8-30_RAM_Special_Episode.mp3
Category:general -- posted at: 2:00am CDT

We have given the entire month of August to the ladies! Since this is the last Wednesday in August, it is the last episode that we are dedicating to the theme of Women, Money, and Retirement. However, that doesn’t mean we’re going to stop taking questions from women. This is simply the last episode to focus solely on women’s questions. We want to ensure that no matter who you are, you have the confidence to rock retirement. 

Make sure to come back next month for the series, Retirement Planning for Non-Planners. This series will speak to those who have little interest in retirement. That means we’ll take out all the jargon and focus on the basics of what you need to know. Even if you don’t want to dive into the day-to-day details, it’s important to have an understanding of how to build a retirement plan. If you have any questions related to this theme please ask them at RogerWhitney.com/AskRoger

What does it mean to put the “I” in retirement?

We’re closing out this month with an episode titled, How Do I Put the I in Retirement? But what does the I in retirement really mean? 

Over the course of the retirement planning process, most people focus on their financial situation, but it is more important to understand what you want to do in retirement.

When planning your retirement, you are planning the next stage of your life and you have the opportunity to remake yourself to be anything you want. This is a fantastic time to uncover your deepest desires and make your voice heard. 

Live a life true to yourself

The most common regret that people have at the end of their lives is that they wish they had lived a life true to themselves. Many people simply do what is expected of them without ever thinking about what they want for themselves. 

Retirement is a fantastic time to set aside what others expect of you and explore what you genuinely want to do. 

Since the human condition tends to work in moderation, sometimes you have to peel away the layers to get to the bottom of what you want. Don’t stuff down your needs, dig deep to discover your true self.

Have you lived a life true to yourself or do you have a hard time voicing your desires? 

How to define what you really want

Peeling back the layers can be a challenge, but to live a life true to yourself you’ll have to define what you want out of life. If you don’t voice your desires you’ll never be able to achieve your dreams. 

Think about what you have always wanted to do that you haven’t had the time or space to think about. If you don’t have a clear vision yet, that’s okay, take the time to consider this question with wide-eyed curiosity. Retirement is a time of experimentation, so if you haven't completely defined what you want you’ll soon have an opportunity to further explore your desires. 

If you have a partner, explore this question with them in little conversations over time. Those little conversations can lead to big ideas and create the space to open up a world that you might not have dreamed of before. 

Once you have dreamed up your ideal retirement then you can see how your financial situation fits. You don’t want to go at this from a different perspective. First dream big, then work your retirement plan around your dreams. 

Why join the Rock Retirement Club?

The Rock Retirement Club has everything you need to create your retirement plan. When you join the club, you’ll gain access to education and tools to help you build your own plan. 

Not only that, the club gives you access to a team of professionals that are dedicated to helping you rock retirement. 

Last, but certainly not least, you’ll become part of an amazing community. The RRC is filled with a community of like-minded people who all want to rock retirement. When walking through a huge life change it helps to connect with those who are a bit ahead of you on the same journey. Come check out what the Rock Retirement Club is all about. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [5:40] What does the I in retirement mean?
  • [13:15] You have to speak up and voice what you want

LISTENER QUESTIONS WITH TANYA

  • [19:20] What should you be doing within 6 months of retirement?
  • [20:55] Making decisions immediately after the loss of a spouse
  • [22:52] How to balance the load of caregiving
  • [28:14] How to divvy up parental support between siblings
  • [33:22] How to bring up retirement planning without the jargon
  • [35:13] How to deal with an unexpected divorce in retirement

TODAY’S SMART SPRINT SEGMENT

  • [43:35] How will you put the “I” in retirement?

Resources Mentioned In This Episode

Thinking Ahead Roadmap

BOOK - Moving Forward on Your Own by Kathleen Rehl

BOOKS - Suddenly Single

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM392.mp3
Category:general -- posted at: 5:00am CDT

Women ask many types of questions that men don't, which is why we’re dedicating this entire month to a series on women, money, and retirement. This series gives you the space to dig in, have your voice heard, and your questions answered. 

You’re listening to the 3rd episode in this series and today we’ll be answering so many of your questions. Tanya Nichols from Align Financial joins me once again to add her womanly input and expertise. 

There are a lot of women out there with similar concerns. Are you one of them? Find out if your burning questions about retirement have been answered on this episode of Retirement Answer Man.

The Rock Retirement Club can help you build confidence in your retirement plan

Are you looking for a way to build your confidence in your retirement plan, or maybe you're just looking for ways to create a retirement plan. If so, the Rock Retirement Club is the right place for you. 

The RRC provides you with everything you need to educate yourself to build your retirement plan, allowing you to rest easy. By joining the RRC you’ll have access to on-demand courses, education, and tools so that you can learn what you need to know to rock retirement. 

Join now to gain access to this information and our knowledgeable team of experts. In the clubhouse, you can ask questions from our experts and enjoy conversations with hundreds of more people who are riding the same retirement wave. The Rock Retirement Club is a great place to share inspiration and get ideas to create the retirement of your dreams. 

Should single women with no children consider long-term care insurance?

Several women have asked about long-term care insurance. Navigating long-term care is a major concern for women that have no close family or children. They see long-term care insurance as a way to help pay for their care when they may no longer have the capacity to represent themselves. 

When looking for a long-term care insurance plan, be sure to specifically look for a plan that features a care navigator. Another possibility is to hire a care navigator out of pocket who only works for your interests. This representative can help you navigate the system so that you know that you will be cared for. 

Long-term care navigators are an emerging field, so it can be hard to find someone that specializes in this industry. One way to find this type of representative is to talk to long-term care providers or even your state health department. Have you ever considered hiring a care navigator for your declining years?

What kind of questions do you have about retirement? 

In this episode, we answer many of your listener questions like what is the difference between a trust and an estate, how to prepare to deal with financial issues during cognitive decline, where to get cash from during the go-go years, the best way to navigate healthcare before Medicare, and many more. Listen in to hear if your pressing questions have been answered.

If you have any more questions that weren’t answered in this episode, make sure to join the live meet-up on August 26 at 7 pm CDT. This live webinar will be about an hour long and I’ll be joined, once again, by the lovely Tanya Nichols. We’ll answer your questions live in real-time. These webinars provide a relaxed atmosphere where you can learn the answers to your questions and maybe even hear answers to questions that you haven’t even thought of yet.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

LISTENER QUESTIONS WITH TANYA NICHOLS

  • [5:30] Don’t miss the live meet up on August 26 at 7 pm CDT
  • [6:37] Long term care insurance for those with no close family
  • [11:00] Trust vs. estates
  • [11:50] How to deal with financial issues during cognitive decline
  • [16:11] Where to take cash from in the go-go years
  • [19:02] How to navigate healthcare before Medicare
  • [26:35] How do you calculate the 4% rule?
  • [30:28] Spend less money than you make
  • [32:07] What to look for in a bond

TODAY’S SMART SPRINT SEGMENT

  • [37:22] An update on my smart sprint from last week
  • [41:13] Look at your net worth statement history

Resources Mentioned In This Episode

Align Financial

Don’t miss the live meetup on August 26 at 7 pm sign up here

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM391A.mp3
Category:general -- posted at: 6:00am CDT

Welcome back to the 2nd episode of the Women, Money, and Retirement series. All month long we will be discussing issues specific to women in retirement. Since I am not a woman, I have invited Tanya Nichols from Aligned Financial to co-host the show with me throughout this series. Tanya is here to provide a woman’s perspective and to help me answer your questions. If you are a woman you won’t want to miss this series that is created especially for you 

What does it mean to rock retirement?

If you have listened to the show before, you know that I frequently use the phrase rock retirement. I even wrote a book called Rock Retirement and I created the Rock Retirement Club, but what do I mean by rocking retirement? 

When you are rocking retirement that means you are using your resources to live your best-imagined life. I want you to use the assets you have to design your ideal life in retirement.

There are so many decisions to make in retirement. Many people mistakenly think that their financial decisions are separate from their life decisions, but life and money are never separate. Your money should be helping you to create the best life that you can imagine. 

How do women excel in retirement planning?

Men and women have different strengths and weaknesses in just about every area of their lives. This is no different in financial planning.

As financial advisors, Tanya and I see the differences between the sexes every day. These differences are generalizations, but we have noticed that women excel in several areas of financial planning. 

Women are more comfortable with vulnerability; they don’t try to control the uncontrollable.

Women look ahead toward the outcome.

Women realize the value of collaboration. 

Women are more thorough and take more time to make decisions. 

Women don’t mind speaking openly about their worries.

Think about yourself. How do you excel in financial planning? Is it in one of these areas or in another way?

How to confidently plan for retirement when you don’t have much to start with

Debbie is worried about retirement. As a single woman without a huge retirement portfolio, she feels overwhelmed and doesn’t know where to start. She feels that financial advisors are only for the wealthy, but she knows that she must start learning about her finances somewhere. 

The good news is that Debbie is listening to a financial podcast! That means that she has already started educating herself. Unfortunately, the financial planning industry hasn’t done a good enough job of successfully reaching average income earners. However, this doesn’t mean that financial planning is only for the wealthy. 

In addition to listening to retirement and financial podcasts, there are other ways that people can educate themselves in these matters. Garrett Planning Network and XY Planning Network are 2 networks of more affordable financial planners that work on a monthly subscription basis. Listen in to hear more resources that can help you gain the confidence to truly rock retirement. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [1:10] What does rocking retirement mean?

PRACTICAL PLANNING SEGMENT

  • [3:34] What do women excel at in retirement planning?

Q&A SEGMENT

  • [11:04] Women are less prepared for retirement than men
  • [17:12] How to tackle the feeling you aren’t good enough
  • [19:15] How to generate an income stream in retirement
  • [22:20] Are there common pitfalls for women in transition periods?
  • [27:27] A Social Security planning question
  • [33:14] Who gets to keep a death certificate?
  • [36:28] Make sure spouses communicate regularly about finances

TODAY’S SMART SPRINT SEGMENT

  • [38:43] Chat with your spouse about your net worth statement and financial plan

Resources Mentioned In This Episode

Episode 310 - The Pie Cake

Social Security Calculators

Aligned Financial

Garrett Planning Network

XY Planning Network

BOOK - The Power of Habit by Charles Duhigg

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

 

Direct download: RAM390.mp3
Category:general -- posted at: 5:00am CDT

With the financial industry being dominated by men, it makes sense to dedicate time to focus solely on financial issues related to women. Since I am not a woman and can’t speak personally about these issues, I have invited my good friend, Tanya Nichols from Align Financial, to help me tackle this month-long series on Women, Money, and Retirement. Tanya is one of Investopedia’s Top 100 financial advisors and she and her firm work mainly with women. 

I’m excited to have Tanya help me explore this area further. We can tackle your questions and you can gain the confidence you need to live the life you want in retirement. With a bit of education, anyone can learn how to manage their finances in retirement.

3 financial power moves women can take now

Women often have their own set of issues surrounding money due to traditional gender roles and a misogynistic financial services industry. But once women face these issues head-on they can trample these hurdles and take control of their own financial situation. Learning these 3 power moves can help you take charge of your financial life.

  1. Anyone can learn about money. In years past, finances were often left to the husband to control, so the financial industry has typically been dominated by men. The financial services industry likes to make money sound much more complicated than it is, but financial planning is actually a lot like project management. Learning about money is just like learning about anything else and you can learn about money just as well as you can learn about fitness, nutrition, or child-rearing. You can learn to plan your finances regardless of your background. So if you have an interest in your money, then dig in and start learning. 
  2. Think of yourself first. Do you often put your family’s needs ahead of your own? Women often sacrifice their entire lives for the ones they love. If you can acknowledge that you should consider yourself first when it comes to finances then you can begin to plan a life that is true to yourself. Before making financial decisions think to yourself: is this at the expense of something that is important to me?
  3. You have a rightful seat at the financial advisor’s table and an equal seat at the financial table of your marriage. It is no secret that the finance industry is dominated by men and even has a history of misogyny. You should never have to earn your seat at the table to talk about your money. That seat is already yours. Don’t put up with anyone diminishing you or dismissing your concerns. 

What to do if someone diminishes your questions or concerns

Unfortunately, women’s questions and concerns are often dismissed in financial settings. If this happens to you make sure to address the situation immediately and clearly state how and why you feel diminished or dismissed. 

If the professional you’re working with doesn’t respond in a satisfactory manner then go somewhere else. It is important to find a financial professional that you can trust. They need to be able to listen to you and hear what your priorities are. Have you ever felt slighted by a financial professional?

If you can’t find the right person to work with, don't be afraid to DIY your finances. With a bit of education, managing your own finances is totally doable. Own your awesomeness. You can plan your retirement just as well as the next person.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [3:30] A disclaimer
  • [6:33] 3 power moves for women
  • [14:50] A 3 step process if someone diminishes your role

LISTENER QUESTIONS

  • [19:45] How do bond funds work?
  • [23:22] What to do if almost all your cash is in a 401K
  • [29:30] Should she consider putting her dad in a nursing home?
  • [32:47] Decisions that couples make in their 50s and 60s will affect the women later
  • [35:37] How will I be cared for if my husband dies first?

TODAY’S SMART SPRINT SEGMENT

  • [39:11] Plan your seat at the table

Resources Mentioned In This Episode

Align Financial

My Fitness Pal

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM389.mp3
Category:general -- posted at: 5:00am CDT

Choosing the right withdrawal strategy is a big part of rocking retirement. Knowing how you will withdraw your money each month will ease the pressure that comes with leaping into retirement and boost your confidence. The right retirement withdrawal strategy for you may not be the same as the one your friend uses, the one you just read about, or even the one your advisor recommends. 

On this episode of Retirement Answer Man, we are wrapping up our 4 part series on retirement withdrawal strategies by learning how to build a framework to find the strategy that fits your individual needs. Press play to hear how to piece together the information you have learned in the past 3 episodes to create your own income distribution plan so that you can gain the confidence to really rock retirement. 

Changing the language you use could change your mindset about retirement

Planning retirement can be like planning to have kids. You don’t often think of the sticker shock that comes with it. Learning that a comfortable retirement might cost you $5 million might give you heart palpitations. But just like with having kids, you don’t have to pay that amount all at once. This amount is spread out over the years and you have control over how much you may spend. This is why it is important to get into the right mindset. 

One way you can change your money mindset about retirement is to reframe the way you word things. Yes, you are choosing a retirement withdrawal strategy, but the word withdraw means to take away. That isn’t the most attractive thought. 

A better way to think about your financial capital is to realize that it is simply deferred income. You have been deferring this income for decades and the time has finally come to access the income that you have already earned. A simple change in wording can completely change your mindset and help you rock retirement.

To choose the right withdrawal strategy, first, consider your financial situation 

The first step to take to build your retirement withdrawal strategy is to consider your retirement situation. Think about whether your retirement is overfunded, constrained, or underfunded. To do this, compare your retirement liabilities to your resources. Consider all of your sources of income including your social capital, human capital, and financial capital. 

Next, you’ll want to consider the different withdrawal strategies that you have learned about over the past 3 episodes. If you consider each of those retirement withdrawal strategies as being on a dial from 0-10 you can then place your financial situation on that dial. Chances are you land somewhere in the middle of the dial rather than on either extreme. This means that you may want to take a moderate approach to income distribution. Listen in to hear where each withdrawal strategy lands on the dial and how that could affect your personal income distribution plan. 

Don’t ignore the qualitative aspects of retirement

Not everything in life is about numbers and this is true for retirement as well. This means that you’ll need to consider more than just your finances to create your retirement withdrawal strategy. You’ll want to consider your age, life expectancy, and health. Do you need to fit as much living as you possibly can in the next few years? Or do you need to make your money last on the chance that you live to be 100?

In addition, you’ll need to consider your family situation. Are you single or married? Do you have children? These external factors will also play a role in your income distribution plan. 

One last consideration is your personality profile. You may need more security even if you are overfunded. Every person has their own risk tolerance threshold. Whichever way you choose to distribute your income in retirement, you need to feel comfortable and confident so that you can rock retirement. Press play now so that you can learn what you need to know to develop your retirement withdrawal strategy. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [4:00] How do you find the strategy that fits for you
  • [7:31] The language you use to describe things really matters
  • [10:00] Think about this in an organized way
  • [17:55] What to take into account to help you evaluate all the aspects
  • [24:01] How does your social capital fit into the equation?

ANDY PANKO INTERVIEW

  • [30:21] Why do people have so many questions about this?
  • [34:20] How does Andy approach this question with his own clients?
  • [36:54] How does Andy deal with tax planning in retirement?
  • [44:46] Don’t let the internet scare you into doing something you don’t need

COACHES CORNER WITH BW

  • [48:38] Choosing the right strategy can give you the permission to spend
  • [52:08] How BW chose his withdrawal strategy

TODAY’S SMART SPRINT SEGMENT

  • [59:35] Map out how you think about your quantitative and qualitative aspects of retirement

Resources Mentioned In This Episode

Check out the Facebook Live in Andy’s Taxes in Retirement group 

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM388A.mp3
Category:general -- posted at: 5:00am CDT

When it comes to creating your retirement withdrawal strategy there is no one-size-fits-all solution. You have to determine what is right for you. That’s why we have been exploring different withdrawal strategies this month on the Retirement Answer Man show. 

If you missed the last couple of episodes go back and listen to learn about the safety-first strategy and safe withdrawal rates. On this episode, we are digging into asset-liability matching. Press play to learn more about this hybrid approach to withdrawing your assets in retirement. 

What is asset-liability matching? 

Asset liability matching is a term that is used in the pension planning world, but you can use it to describe your own assets and liabilities. Your liabilities are your spending or the debts that you need to cover. Your assets are your financial capital. If you prefer, you can also think of your 401K as deferred income rather than as your investment assets if that helps you come to terms with spending it. 

Basically, asset-liability matching is when you match up your deferred assets with your consumption to make sure that you have your spending covered in retirement. 

Where does this strategy fall among the retirement withdrawal strategies?

On one end of the spectrum, the safe withdrawal rate strategy skims along the top of your investments. It only dips into them as needed. On the other side of the coin, the safety-first approach prefunds all or the majority of your retirement journey. 

Asset liability matching falls somewhere in between these two extremes. I may be biased towards this approach since I use this structure coupled with agile retirement management with my own clients. Since I value flexibility in retirement, this withdrawal strategy fits my ideology. 

Start thinking about which way you lean on this spectrum, so you can begin to build your retirement withdrawal strategy framework in the next episode.

What's your baseline?

To execute the asset-liability matching strategy, you’ll first need to establish a contingency fund or a standard emergency fund as a buffer. The next step is to plan your spending over the first 5 years of retirement including your tax estimates. 

Once you isolate how much you’ll need from your financial capital, then you can build an income floor. The rest of your assets can then go into a core, growth-based investment portfolio. With this strategy, you’ll get a mix of protection against sequence of return risks in the near term and a hedge against inflation in the long term. 

What are the benefits of asset-liability matching? 

This is a good strategy to use if you value optionality. Since retirement is such a big life change it is nice to have a lot of liquidity early on. Retirement does not simply mean that you stop working. Your entire life changes and it can be difficult to understand how it will change when you are in the planning stage. Having this liquidity in the income floor can give you confidence and flexibility as you navigate this momentous life change. 

Another benefit of asset-liability matching is that you mitigate the sequence of return risk. Having an income floor in place can give you many options if the world falls apart early on in retirement. 

You may want to pivot to a safety-first approach or safe withdrawal rate as you age, but asset-liability matching gives you plenty of room to adjust while you are figuring this whole retirement thing out. 

I am naturally biased towards matching assets to spending since this is the strategy that I use with my clients, but there is no single best withdrawal strategy to use in retirement. You’ll need to consider what is right for you. Make sure to listen to all 3 Retirement Withdrawal Strategies episodes to consider which strategy fits your needs and come back next week so that you can learn how to create a framework to navigate this crucial piece of retirement planning. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [2:30] What is asset-liability matching?

PRACTICAL PLANNING SEGMENT

  • [6:39] Where does asset-liability matching fall in line with the other withdrawal strategies?
  • [9:20] What is a baseline?
  • [12:50] How will you find adjustments along the way?
  • [13:43] What are the benefits of this strategy?

LISTENER QUESTIONS WITH NICHOLE

  • [19:15] How to calm the worry about retirement
  • [25:21] Do I take the pension or the lump sum? 
  • [29:55] What happens if your money management platform gets hacked?

TODAY’S SMART SPRINT SEGMENT

  • [35:42] Do you know of a void in your first year of retirement?

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM387.mp3
Category:general -- posted at: 5:00am CDT

One of the biggest questions of retirement is how to withdraw your money. You can’t have a successful retirement without first planning how to withdraw your money. That is why we are discussing different retirement withdrawal strategies this month. Last week we covered the infamous 4% rule and today you’ll learn about the safety-first approach. In our next episode, you’ll hear about a hybrid approach and in the last episode of this series, you’ll discover how to build a framework for your own retirement withdrawal strategy. Are you ready to educate yourself on the various ways that you can withdraw your money in retirement? Press play to get started. 

What is the safety-first strategy?

In the previous episode, you learned about a safe withdrawal strategy using the 4% rule. Whereas the 4% rule is a portfolio-based strategy, the safety-first strategy takes the opposite approach. Safety first ignores safe withdrawal rates and asset allocation. Instead, it focuses on creating income sources via various guaranteed income vehicles. The idea behind the safety-first approach is that retirement is too important to have variables like sequence of return risk that could ruin your retirement. 

How to implement the safety-first approach 

Since you only get one shot at retirement, the safety-first method secures a base income by using the assets you have. Prioritization is a key component to safety first. The first thing one must do to utilize the safety-first approach is to calculate your base needs over the span of your lifetime. Once you have this number, then you’ll subtract the income from your social capital so that you can see what’s left. With safety-first, you will secure your base needs by utilizing bond ladders or income annuities. After creating your income floor, then you can focus on building your contingency fund to help with life shocks. Once both of these bases are met then you can focus on any other retirement goals you may have. 

What are the advantages to safety-first?

The first advantage that comes to mind with safety-first is peace of mind. By using the safety-first approach you won’t have to worry about the markets because you know that no matter what happens your base needs will be met. Another advantage is that this approach is easy to manage. There is not much to do after you have the plan in place but collect your monthly paycheck which makes this plan ideal for later in life. One more advantage is that since your needs are met you can focus on being more growth-oriented with the rest of your portfolio. 

The disadvantages of this approach

The main disadvantage that I see with this approach is the lack of flexibility. If you have listened to the show before, you know that my methodology is all about staying agile. People change their minds a lot and life can completely change after retirement, so tying up your assets in an annuity can take away the power to change your mind. Another downfall to safety first is increased inflation risk. Most annuities do not adjust for inflation, so if there are any spikes in inflation you could be at risk. Listen in to discover if the safety-first approach is the right one for you. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [1:30] What is the safety-first strategy?
  • [4:35] What are secure assets?
  • [8:06] When to implement the safety-first strategy
  • [10:20] Advantages and disadvantages to the safety-first strategy

LISTENER QUESTIONS

  • [17:55] How should I incorporate an inherited IRA into my retirement plan?
  • [20:10] Taxes and Roth conversions
  • [23:45] Does the 4% rule take into account social capital? 
  • [24:54] How do bonds work?
  • [28:38] A pro-rata question

TODAY’S SMART SPRINT SEGMENT

  • [30:40] Do a basic calculation to figure how much of your base needs will be covered by guaranteed income sources

THE FEEDBACK BOOTH

  • [32:43] Women run the finances too
  • [34:35] My 3rd attempt to discuss financial planning fees

Resources Mentioned In This Episode

Wade Pfau

BOOK - Safety First Retirement Planning by Wade Pfau

Michael Kitces

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM386.mp3
Category:general -- posted at: 5:00am CDT

Have you considered what kind of withdrawal strategy you plan to use in retirement? There are more to choose from than you may realize. Over the next 4 episodes, we will focus on different withdrawal strategies and how to choose one that fits your needs. 

On this episode of Retirement Answer Man, we’ll cover the most notorious retirement withdrawal strategy: the 4% rule. In week 2 of this series, we’ll discuss the safety-first strategy. In the 3rd episode of the Retirement Withdrawal Strategies series, we’ll learn how to utilize matching liabilities to spending, and finally, in the last week of July, you will learn how to create a framework to help you decide which retirement withdrawal strategy will work best for you. 

This episode is packed with information and even includes an interview with Jamie Hopkins, author of Rewirement. Get ready to buckle down and learn what you need to start the decumulation phase of life. 

There are 3 big rocks in retirement planning

It can be easy to get sidetracked when planning for retirement. There are so many different areas that you need to consider. You don’t want to focus on the wrong thing, but how are you supposed to know what the right thing is when there is so much information out there. I believe that you need to focus on the 3 rocks of retirement planning.

  1. Feasibility - This means what is possible given your resources. You’ll want to figure out how to squeeze the most life out of the assets that you have to create the best life that you can. 
  2. Resiliency - You don’t want to get thrown off course by inflation, bad markets, or life. This is where choosing the best withdrawal strategy comes into play.
  3. Optionality - This covers the tools you can use to enhance the journey - tax planning asset allocation etc

What is the 4% rule?

The 4% rule was created by William Bengen in 1994 in a landmark academic article. Mr. Bengen wanted to know if there was a fixed amount of money that you could pull from your assets safely each year and never run out of money. To investigate, Bengen looked at historical data and ran models to search for a percentage rate that one could withdraw safely over a typical lifetime. He learned that 4% is the amount that you could withdraw from a portfolio to stay ahead of inflation yet never run out of money. Over the years the paper has gained momentum until it eventually became a rule of thumb.

What are the advantages and disadvantages of the 4% rule?

As with any withdrawal strategy or general rule, there will be advantages and disadvantages. One advantage of the 4% rule is that it provides you with a safe withdrawal rate. You can be confident that your portfolio is secure and you won’t run out of money. Another advantage is that this rule is simple. 

Simplicity is nice because it is easy to follow, however, everyone is different and what works for everyone may not work for you. The 4% rule may be too simplistic and too unbending. The 4% rule also doesn't account for changing market conditions, inflation, and life surprises. Another disadvantage is that you are likely to die with more money than you would like to. This could lead to regret. 

Please leave a review!

If you have been enjoying the show, make sure to leave an honest review on your favorite podcast app. Reviews help to ensure that those who are walking the same path of life can find this podcast easily. If you’d like the resources that go along with this episode and future episodes, make sure to sign up for the 6 Shot Saturday newsletter.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [2:40] There are 3 big rocks in retirement planning

INTERVIEW WITH JAMIE HOPKINS

  • [7:40] Going from accumulation to decumulation can be a challenge
  • [13:30] How to get in the right mind frame to spend in retirement
  • [19:53] Set boundaries at work to create balance
  • [22:45] What can you do to feel better about a decreasing balance sheet

PRACTICAL PLANNING SEGMENT

  • [29:48] The 4% rule is a safe withdrawal rate
  • [32:31] Advantages of a safe withdrawal rate

LISTENER QUESTIONS

  • [38:15] Mountain bike questions
  • [42:22] Assumed portfolio investment returns
  • [51:24] Can you do Roth conversions if you plan to retire early?
  • [54:44] Does home equity help when considering net worth?

TODAY’S SMART SPRINT SEGMENT

Resources Mentioned In This Episode

BOOK - Rewirement by Jamie Hopkins

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM385.mp3
Category:general -- posted at: 5:00am CDT

Welcome back to the last episode in this Listener Questions series. From time to time I step away from our usual monthly themes and dedicate an entire month to answering your questions. This week I have requested help from friends to answer your burning retirement questions. Press play to learn more about the rule of 55, Social Security, using HSAs before Medicare, and more. 

Will I regret not paying off my mortgage?

Mark and his wife are planners. Most of their life has gone according to the plans they made; including their timeline for retirement. However, recently their retirement plans changed. Instead of paying off their house in preparation for retirement, they decided to buy a new home by the beach with a mortgage. After careful assessment, they realized that they have enough money to live comfortably on their pensions with this mortgage payment, but Mark wonders if he will eventually regret the decision to keep the mortgage and not pay off the house. 

Have you grappled with the decision of whether to pay off your mortgage or not in retirement? Listen in to hear Chad Smith from the Financial Symmetry podcast answer this question. He may provide some insight that you hadn’t considered. 

Should you use a 3-4% increase in Social Security benefits when planning your retirement?

You may have noticed that many financial planning tools default to increasing Social Security benefits 3-4% per year in their projections. While a 3-4% increase is the average cost of living adjustment for the program, it does not increase at the same rate each year. As a matter of fact, There have been many years in recent history when Social Security hasn’t risen at all. 

Taylor Schulte from the Stay Wealthy podcast prefers to be more conservative in his predictions. He uses a 1% average increase in projected Social Security benefits when helping his clients create their retirement plans. He has found that it is better to be conservative when making assumptions so that his clients are prepared for extreme, unpredictable situations. In retirement, you don’t want to be caught off guard. 

Meaning and purpose in retirement

To have a successful retirement, you must have meaning and purpose in your life. You may agree with this statement, but have you ever defined these terms? 

Meaning is an internal concept that is important to you and gives you pleasure. Meaning allows you to use your unique gifts and talents to feel useful. Since meaning is internal, it doesn’t matter whether society thinks something is meaningful, meaning can only be defined by you. 

Purpose is an external concept that involves looking outside yourself to make a difference in the world. It doesn’t matter if that difference is earth-shattering or whether it is as simple as bringing joy to your grandkids. 

The key to a successful retirement is to find activities that provide both meaning and purpose. Decide which activities are meaningful to you. Look around to see how you can make a difference in your world so that you can attain a sense of fulfillment.

What will you do to find meaning and purpose in your retirement? 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

LISTENER QUESTIONS

  • [1:30] A rule of 55 question
  • [4:10] The ramifications of the decision to not pay off the mortgage
  • [8:38] A Social Security question
  • [11:27] Using health savings accounts vs. health reimbursement accounts before age 65

COACHES CORNER WITH BW

  • [14:04] Defining meaning and purpose in retirement

Resources Mentioned In This Episode

Andy Panko, Tenon Financial Group

Andy Panko’s Taxes in Retirement Facebook group

Chad Smith from Financial Symmetry

Taylor Schulte Stay Wealthy podcast

Tanya Nichols, Align Financial

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM384_1.mp3
Category:general -- posted at: 6:38am CDT

Welcome back to the Retirement Answer Man show. This month we have stepped away from our typical monthly themes, and instead, we are tackling your listener questions regarding retirement. Make sure to listen in July as we discuss retirement withdrawal strategies and join Tanya Nichols and me in August to discuss women in retirement. 

Check out this episode to hear how you can create your retirement lifestyle framework, how to source your retirement paycheck, and whether it is best to keep the cash or pay down the mortgage. 

Finding a retirement lifestyle framework

A big part of beginning your retirement planning is finding a retirement lifestyle framework that you agree with. Many are drawn to the simplicity of the 4% withdrawal rule, but it doesn’t take into account your retirement lifestyle. 

One member of the RRC explained that he was looking to maximize his lifestyle given his assets. This is what we are all looking to do, but it’s not as easy as you think. Many people think that you can simply come up with a base number that you can spend each year, but this is based on the assumption that your lifestyle will not change over time. 

How to design your retirement lifestyle framework

Without a framework in place, people tend to grab onto any random retirement planning strategy and that will drive all of their retirement decision-making. 

Instead of asking yourself, how much do I need? A better way to design your retirement framework is to ask yourself how much do I need for this lifestyle?

To define this you’ll need to ask yourself more questions. Where do you want to live? Define the location where you will be the happiest. What activities do you want to do in retirement?

Asking yourself these questions will help you to create a plan of record. This is a more organized way of considering your life after work. You won’t get it perfect, but it will put you in a much better position to be able to iterate and change your course as needed.

How to source your retirement paycheck 

One listener wants to know how to source her retirement paycheck. Traditional retirement planning dictates that you drain your after-tax assets first, then move to Roth, and lastly, tax-deferred assets. 

I don’t think this is a very efficient way to source your paycheck. First, determine how much you need from your financial assets over the next 5-10 years. Then, estimate what your required minimum distributions will be. (Check out the 6-Shot Saturday newsletter for a handy RMD calculator. Next, look at your 5-year income estimate. What kind of income will you have each year? You’ll always want to consider multi-year tax planning in retirement.

Keep the cash or pay down the mortgage?

Another listener wonders whether he should keep the $100,000 in cash that he has or should he pay down his mortgage. It is common to think of these decisions by themselves, however, you should build your retirement framework first. This will help you create a feasible plan for retirement. After creating your retirement framework, then you can create a what-if scenario. Creating the process first will allow you to be able to see the question from a big picture perspective. Listen in to hear why you may not want to zap all of your liquidity. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

RANDOM THOUGHTS

  • [2:30] Find a retirement lifestyle framework that you agree with
  • [8:02] Questions to ask yourself

LISTENER QUESTIONS

  • [12:33] Sourcing your retirement paycheck
  • [16:27] Keep the cash or pay down the mortgage?
  • [21:22] Is 3% average return on investment a good conservative average?

TODAY’S SMART SPRINT SEGMENT

  • [23:45] Go take a purposeful walk to think about what you want out of life over the next 3-5 years

Resources Mentioned In This Episode

Cal Newport

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM383.mp3
Category:general -- posted at: 5:00am CDT

You’ve got retirement questions; I’ve got answers. This month I’m tackling your listener questions. I’m also taking time to reflect on random thoughts I have about the retirement scene. Join me for this laid-back month with no set theme to learn the answers to questions from listeners like you. 

Random thoughts on the retirement scene

  • Retirement planning is not about optimizing returns. It is about securing outcomes so that you can feel confident that you can live the life you truly want.
  • You can accomplish anything if you can just get over yourself. 
  • Life happens in the inefficient moments. 
  • Building long-lasting relationships requires making deposits along the way. 
  • “If you don’t change direction you may end up where you are heading.” -- Lao Tzu
  • There are quality, highly competent, and collaborative financial advisors out there. The industry is changing away from a salesy, male-centric attitude to becoming a true profession.
  • Life changes, so it is important to stay agile. Make sure to adjust your plan accordingly so that you can adapt.

Should you get more conservative with your portfolio as you enter retirement?

Conventional wisdom dictates that as you approach retirement you should become more conservative with your investments. In investment speak, this means having a bigger portion of your asset allocation in bonds or fixed income than in equities. 

However, not every person needs to follow traditional wisdom. Rather than consider your retirement portfolio from an asset allocation standpoint, consider the time frame. In retirement planning, your time frame matters. Think about how to match your assets to your retirement liabilities or yearly expenditures.

You’ll want to be more conservative with the money you need in the short term but you can let your long-term assets run wild. Listen in to hear how a bucket or pie-cake strategy can help you plan your asset allocation in retirement. 

How to calculate pension on a net worth statement in retirement

Getting a good overall idea of your financial assets is an important part of the retirement planning process. To help you do so, you’ll want to create a net worth statement so that you can better understand where you stand financially. One recent listener asked where his pension should go on his net worth statement. The answer is nowhere. 

Since your net worth statement is a list of your assets and liabilities, a pension would not belong. A pension is neither an asset nor a liability, instead, it can be described as social capital. The 3 sources of income in retirement are social capital, human capital, and financial capital. A net worth statement only takes into account financial capital.

Rather than include your social capital on a net worth statement, you can instead put it on a household balance sheet where it can be classified as the net present value of cash flow. You can download a household balance sheet by clicking on the resources tab at RogerWhitney.com. While you’re there check out the other resources we have available to help you get started on your retirement plan.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

RANDOM THOUGHTS

  • [2:46] Retirement planning is about securing outcomes
  • [6:22] Have you had a bad experience with a financial advisor?
  • [9:07] If you don’t change direction you may end up where you are heading

Q&A SEGMENT

  • [10:26] A withdrawal rates and returns question 
  • [21:20] Should you get more conservative with investments in retirement?
  • [27:22] How to calculate pension on a net worth statement in retirement

TODAY’S SMART SPRINT SEGMENT

  • [32:50] Go do something fun!

Resources Mentioned In This Episode

Tanya Nichols

Andy Panko

Taylor Schulte

Benjamin Brandt

PODCAST - Wild at HeartSummer Recovery Plan episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM382.mp3
Category:general -- posted at: 5:00am CDT

This month on the Retirement Answer Man show, we are tackling your listener questions. Although we don't have a monthly theme like we usually do, I am also sharing my random thoughts from the retirement scene. If you miss the monthly theme, you can look forward to July and August. 

In July we’ll be discussing your withdrawal strategy for retirement and August will be a month dedicated to women in retirement. Since I can’t speak to being a woman, Tanya Nichols will join me then to share her wisdom. Make sure to join us for those month-long topics. 

If you have been enjoying the show, please head over to your favorite podcast app and leave a review!

Random thoughts on retirement

  • Real financial planning takes time and isn’t scalable.
  • Should is a dangerous word. Be careful how you use it. 
  • Generating income to live off of is not a good retirement strategy. Rather than thinking about generating income in retirement, think about total return instead. 
  • In retirement, taxes are all about timing. Limit your taxes by choosing whether to pay them sooner or later.
  • You can't actually control your emotions, desires, fears. However, you have the choice of whether to nurture them or let them drift by. 

What about rental properties in retirement? 

Where do rental properties fit into a retirement plan? Rental properties can be fantastic for generating income, but they can also be a lot of work. Of the many people that have rental properties, some choose to continue renting their properties well into retirement. Whether or not you choose to continue as a landlord in retirement should be based on whether you enjoy the work. If you opt to continue having rentals in retirement, they will have their place in your retirement plan just like any other business. 

Keep the books in order

Just like any business, rentals have revenues and expenses. Make sure to keep a separate set of books on your rentals to understand their cash flow. Keeping the books in order will help you understand the income they generate and how the rental properties fit into your net worth statement. This practice will help you explore how lucrative the properties are and whether you would like to keep them as a way to generate income in retirement. When you understand where you stand with your rental properties you can be more strategic in building your retirement plan. 

Incorporating rental properties into your retirement plan

With the books and net worth statement in order, you can start building your retirement plan. Consider how your retirement plan would look with the rental properties in place and also what it would look like if you sold them.

When creating your retirement plan, you’ll want to consider your social capital, human capital, and financial capital. Since the retirement properties are a business that generates income they are considered human capital.

This type of planning will give you a framework to consider whether to sell the properties or keep them. You should also consider your experience.

Do you enjoy keeping rentals or is it work that you dread? What kind of experience have you had with rental properties? Do you plan on keeping your rental properties in retirement?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

RANDOM THOUGHTS

  • [2:20] Real financial planning isn’t scalable

LISTENER QUESTIONS

  • [6:52] What about rental properties in retirement?
  • [12:39] Is it better to buy slower growth dividend stocks now or in retirement?
  • [16:05] What to do with RMDs that are more than you need?
  • [21:05] If you have twice the assets, why pay an advisor twice as much?

TODAY’S SMART SPRINT SEGMENT

  • [33:30] Estimate what your RMDs will be with our RMD calculator included in the 6-Shot Saturday newsletter

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM381.mp3
Category:general -- posted at: 5:00am CDT

Over the next several episodes I’ll be answering your questions. Rather than having a central topic for the month, I am dedicating each episode to tackling your burning retirement queries. You can head on over to RogerWhitney.com/AskRoger to leave a voicemail or you can send an email. Enjoy hearing my response to questions like where do I start and how do I max out an HSA in the same year that I retire? Press play to discover the answers. 

5 tips from the retirement scene 

Consistency is key. Do you feel like you jump around from one process to another in your retirement planning? Whether you are changing your financial planning or investment management process, if there is no consistency in your decision making it’s like you have no process at all. It’s one thing to tweak your process a bit to adapt and stay agile, but don’t change the process completely. 

Trying to estimate future market returns is a fool’s game. It’s impossible to tell what future returns will bring. There is no reason to try and guess what they might be. Instead of trying to predict the market, focus your time and energy on the things you can control. 

Retirement planning shouldn’t revolve around your investments. Instead, your life should be at the center of your retirement planning. 

Learn to say no. It’s okay to say that doesn’t work for me. Don’t allow many different things to put demands on your time. 

Don’t depend on the 4% rule. People tend to focus on the 4% rule since it estimates a sustainable withdrawal rate, but if you base your retirement planning on this rule you’ll likely end up with way more money than you had expected. Not only that, but you’ll miss out on life experiences in the process. 

Where to start?

One listener recently started listening to the show and was wondering where she should start first. It’s hard to say since that all depends on what you’re looking for. One way to begin is to listen to the Retirement Plan Live series. These case studies can help get you thinking about what you should do first in your retirement planning. Do you have any suggestions on where she should begin? Send me an email so I can let everyone know where they should begin listening. 

Learn from my cautionary tale

I have shared the tale of the RV that I purchased with my brother-in-law several years ago on past episodes and now I can finally bring that anecdote to a conclusion. I share my experience with you as a cautionary tale of keeping something around simply because I wasn’t in urgent need to sell it. For 7 years I have been paying to store this RV and not once has it been used. Listen to my story to learn how to recognize the changing seasons of life so that you don’t end up spending $6300 to store something you’ll never use again.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

RANDOM THOUGHTS

  • [3:20] Random thoughts on the retirement scene
  • [9:04] Learn to say no

LISTENER QUESTIONS 

  • [12:34] What do I do first?
  • [16:10] Steve is excited and scared at the same time
  • [17:17] HSA plans in the year of retirement

LESSONS LEARNED

  • [22:20] I just got rid of the RV that I bought 7 years ago
  • [28:25] Lessons learned from my cautionary tale

TODAY’S SMART SPRINT SEGMENT

  • [32:37] Identify one thing to clean out this week

Resources Mentioned In This Episode

Episode 259 - How to Live Without a Paycheck 

January’s Retirement Plan Live episodes start here 

BOOK - Basic Economics by Thomas Sowell 

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM380.mp3
Category:general -- posted at: 5:00am CDT

Life is like a river that flows and changes over time. There are gradual twists and turns that we make in life and retirement is one of those. To ensure that your retirement flows in the right direction it is important to plan ahead. 

In this episode, we explore how to create the direction of the new flow of your life in retirement. You won’t want to miss hearing BW from the Rock Retirement Club as he defines the 6 arenas of life that require our time and energy. Listen in to check it out.

What does it mean to rock retirement?

I am always talking about rocking retirement here and in the Rock Retirement Club, but I haven’t ever defined what that actually means. 

On a recent live meet-up with 600 of you, we were able to piece it together and create a working definition of what rocking retirement means. Rocking retirement is a verb--an action word that describes a way of being. 

Rocking retirement is a state in which you work towards aligning your resources to create your best-imagined life. Money is important to rocking retirement, but decisions about money and life are always intertwined, so It’s important to create a retirement plan that helps you create a rocking retirement!

What you need to ask yourself to get into the right groove

Your life has created a well-defined groove that you have followed for decades and work has been essential to helping create that groove. Now that your working years are slowing down or coming to an end, it’s time to create a new groove that is different from the old one. Think about the direction you want your new life to take. What will your lifestyle look like? What can you afford? When can you start this new journey? What can you afford to do? Defining the answers to these questions is integral to creating the rhythm of your new life in retirement. 

The phases of retirement

There are several stages to retirement and right now you are probably in the planning stage. This is the time when you are trying to get it all figured out. You are trying to envision your retirement journey. 

The second step of retirement is the honeymoon phase. This stage is a celebration of your new life. Everything you do in this stage is exciting and you will probably be actively enjoying your life. After the honeymoon phase, many retirees reach stage 3 which is a point of inflection. They start to question their choices. They may atrophy a bit and wonder if life will be like this forever. However, this is when it is time to rock retirement! Listen in to learn how you can really rock this sometimes challenging stage of retirement

Design your life energy

To get intentional about retirement planning you need to consider the 6 life arenas. The first one is labeled career, but this doesn’t have to be a traditional career. It can be whatever gives your life purpose or meaning. Think about what you are trying to accomplish. The next stages are family, relationships, self, spiritual, and leisure. Think about where you are spending your life energy. Is it in line with your priorities? Sit down and think about the direction of your life. Listen to this chat with the RRC head retirement coach, BW to learn how you can get your retirement moving in the right direction. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [5:03] What is rocking retirement?

PRACTICAL PLANNING SEGMENT

  • [6:55] The steps to creating your new journey in life

COACHES CORNER WITH BW

  • [11:35] The 6 life arenas
  • [18:35] Think about how you are spending your life energy

Q&A SEGMENT

  • [21:22] A question on the Rule of 55
  • [24:25] How dividend aristocrats can be integrated into your retirement plan
  • [30:10] Share your retirement wisdom

TODAY’S SMART SPRINT 

  • [31:31] Pick one area of your non-financial life to improve

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM379.mp3
Category:general -- posted at: 5:00am CDT

Our theme this month is your non-financial retirement plan and in this episode, we’ll explore how relationships and play fit into that plan. These are two key components to a happy, fulfilled life.

You guys know how important this subject is which is why we had more than 500 people join the webinar last week. If you missed out on that webinar you can watch the recording at RogerWhitney.com/resources. Press play to hear how important people and play are to your non-financial retirement plan. 

Have your relationships suffered over the last year?

Covid has tested many of our relationships over the past year. If you are like me, your family relationships have thrived, yet your friendships have suffered from the lack of in-person connection. With grey divorce at all-time highs, the spousal relationship is essential to remain happy, but friendships matter too. Hopefully, the change in lifestyle that we have all experienced this past year has given you time to reflect on the relationships that matter the most to you.

Loneliness disproportionately affects the elderly

Loneliness is a major contributor to depression and it disproportionately affects the elderly. As people age, they tend to spend more and more time alone. A recent study showed that time spent alone increases as people get older. People in their 20s and 30s generally spend 4 hours a day alone whereas those in their 60s spend 6 hours a day alone. People in their 80s tend to spend 8 hours a day by themselves and may only spend 1 hour with friends. 

Cultivate relationships with a younger crowd

One way to pursue new friendships is by forging relationships with those that are younger. Not only do younger people tend to be more active, but a younger crowd will likely not leave you as the last man standing as you age. 

If you don’t have younger friends it is easier to do less and less each day. It can become harder to leave the house and stay active without the motivation of others to help you stay engaged. This can lead to atrophy--mentally, physically, and emotionally. Retirement isn’t a time to just sit around waiting for what is to come. You’ll likely have 30+ years ahead of you. The more you get out and play now the better quality of life you’ll have in the years ahead. 

Retirement isn’t an event, it’s a transition

Our relationships evolve over time, and retirement can change the friendships that you have. Some friendships may fall away as the season of your life changes. However, it’s important to recognize the relationships that are worth preserving. Some friendships should be fostered through the changes in life.

Retirement isn’t a single event, it’s a transition. This is a time in life when you can cultivate new relationships. Think about who you choose to associate with foster friendships that will challenge you to be your best self. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [2:30] As we age our network of people decreases over time
  • [9:40] It’s harder to get out of the house as you age

COACHES CORNER WITH BW

  • [12:35] 6 essential characteristics of a healthy relationship
  • [26:02] Grey divorce is more and more common

Q&A SEGMENT

  • [30:15] Should Richard take Social Security
  • [31:56] Navigating Medicare after moving to a different state
  • [34:03] Security surrounding online money management platforms
  • [39:07] A word of wisdom from Cynthia

TODAY’S SMART SPRINT SEGMENT

  • [42:40] Let what you learned about relationships and play marinate this week

Resources Mentioned In This Episode

Ted Lasso

Boomer Benefits

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM378.mp3
Category:general -- posted at: 5:00am CDT

How do you introduce yourself at parties? Do you use your job title or do you define yourself in other ways? Oftentimes, our work becomes part of our identity and we begin to think that our job is who we are. This can lead to an identity crisis in retirement which is why it is important for you to define your identity and purpose outside of your career. 

In this episode of Retirement Answer Man, we continue to focus on the non-financial retirement plan while homing in on your identity and purpose. Are you ready for some self-exploration? Hit the play button to learn how to define your identity and purpose outside of your career.

Does your business card reveal your identity?

Do you remember when you got your first business card? That card with your job title let the world know your role in the company and in society. Your business card along with the degrees and certifications that you may have hanging on your office wall can say a lot about what you do for a living, but do those items really reflect your identity? 

In the work world, titles are important to understanding people's roles that we often never think beyond the traditional symbols of identity. However, when you retire, you’ll leave that work world behind and need to find other ways to express who you really are. 

How do you define yourself?

When you retire you no longer have your career tied to your identity. Your career is no longer the focal point of who you are. If you define your worth by your job title, that can leave you feeling lost when your position changes or disappears. 

Have you ever thought about who you really are? Think about how you can separate your identity from your job title. Dig deeper to really discover who you are. How do you define yourself? You don’t want to lose yourself when you lose your business card. 

What is your purpose?

One way to begin to identify yourself outside of your career is to define your purpose. Think about what is your purpose now. How will your purpose change once you leave your career behind? 

To define your purpose, think about what is important to you. Your purpose doesn’t have to be momentous or world, rather, it should be something that is significant to you. Do you want to be an amazing grandparent, an explorer, a creator? Identifying your purpose is a fantastic way to ensure that you don’t get distracted by all the things that can pull you away from your goals. 

Express your identity to have lifetime growth 

Retirement can be whatever you want to make of it. If you want this transitional time to be one of growth then think about your identity and purpose. Who do you want to be in this new stage in life? What role will you now play in the world? As humans, we continue to grow and change over time, but to ensure that you are changing in the direction that you want you’ll need to understand your true identity and define your purpose. Once you do, you will be ready to rock retirement. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [2:00] Separate your identity from your title
  • [9:32] How do you define your purpose? 

Q&A WITH NICHOLE 

  • [17:25] An after-tax catch-up contribution question
  • [24:22] How to save for a child’s upcoming education
  • [29:34] Tips on TIPS

TODAY’S SMART SPRINT SEGMENT

  • [32:44] How do you identify yourself?

Resources Mentioned In This Episode

BOOK - Effortless by Greg McKeown

BOOK - Essentialism by Greg McKeown

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM377.mp3
Category:general -- posted at: 5:00am CDT

Retirement is about much more than finances. Money is important to mastering retirement, however, it isn’t everything. To have a successful retirement you must start with a strong financial plan and then begin to consider everything else.

Over the next 4 episodes, we will discuss your non-financial plan. You must have a strong understanding of what is important to you before you begin retirement because someone or something is sure to fill your time when you retire. 

Make your retirement count by identifying your purpose to help you determine your new rhythm of life. This 4 part series will help you realize the importance of your non-financial plan in retirement. 

Start by getting your money right

The key to beginning any non-financial plan is by first ensuring that your finances are in order. You can’t begin to focus on the rest of your retirement without having your financial plan in place. 

The first step to any financial plan is by separating your desires into needs, wants, and wishes. Think about what a fulfilling life would look like to you and then consider how you will pay for it. 

There are 3 ways to pay for life in retirement: social capital, human capital, and financial capital. After identifying how much money you will have from those first 2 areas you can then understand how much of your savings--your financial capital--you’ll need each month. The key to creating a financial plan in retirement is by staying agile. 

What do you lose when you leave full-time work?

When you leave your full-time job to retire you lose more than just a paycheck. Many people don’t consider this, but a lot of the anxiety over planning for retirement is about the void that is created by stepping away from the professional world. 

You will need to learn how to create a paycheck in retirement but you’ll also need to learn how to create structure, social connections, and how to establish an intentional rhythm to your life. Have you considered how you will fill the void that your work life will leave behind? 

What are the elements of life that will help you rock retirement?

What do you need to live a good life? I’m not referring to the material things that surround you, I mean the non-tangible elements in life. Relationships, congruency, self-growth, gratitude, and agency are all examples of these intangible elements that are so important to living a fulfilling life. You’ll need to consider these intangibles if you want to create an amazing life in retirement. Listen in to discover why the intangibles are so important to your non-financial plan. 

Join me for the live webinar!

If you found this episode helpful, be sure to check out next week’s webinar. On May 13 at 7 pm CDT I’ll be hosting a live webinar where you will learn what it takes to build your own non-financial retirement plan. Not only will you learn all about how to use the pie cake retirement investment plan, but you’ll also learn the elements to consider on the non-financial side of retirement. Additionally, you’ll get a sneak peek into the RRC. Click here to register now!

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [6:02] What are the elements of life that will help you rock retirement?
  • [8:45] What do you lose when you leave full-time work?
  • [13:20] Start by getting your money right

Q&A SEGMENT

  • [16:58] A question about a 457 plan
  • [18:31] What are the pros and cons of listing your estate as a beneficiary?
  • [21:30] The pro-rata rule

TODAY’S SMART SPRINT SEGMENT

  • [23:43] What non-financial elements of your life will change in retirement?

Resources Mentioned In This Episode

LiveWithRoger.com

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM376.mp3
Category:general -- posted at: 5:00am CDT

As you start retirement planning you’ll want to think about using various types of retirement vehicles. This is why we are exploring different asset allocation ingredients in this series. I want you to understand the basics of these investment vehicles so that you can make an educated decision on what to include in your retirement portfolio. 

Today you’ll learn about closed-end mutual funds, UITs, and structured notes. Listen in and learn why it’s important to keep your investments simple. Don’t need to overcomplicate your investments. 

What is a closed-end mutual fund?

The biggest difference between a closed-end mutual fund and an ETF or open-ended fund is they issue a fixed number of shares. Because of this, closed-end mutual funds act more like individual stocks. They even have an initial public offering just like a stock does. Sometimes they will even roll out a secondary offering. Since there are a limited number of shares, that means there is no more money coming in or out of the fund. Closed-end funds also use leverage as a way to improve returns. 

What are the advantages of closed-end mutual funds?

Open-ended funds and ETFs always trade at net asset value, however, closed-ended funds can trade at a premium or at a discount. They aren’t typically purchased at the net asset value. 

Closed-ended funds don’t experience cashflow issues since they have a fixed amount they are investing. They don’t have to sell securities just because someone needs the money. People usually buy closed-end funds because of the distribution yields they payout. But it is important to remember that the high yield is usually due to the leverage they use. Discover the disadvantages of closed-end funds by pressing play. 

What is a unit investment trust (UIT)?

A unit investment trust (UIT) is a fixed portfolio. You’ll get a basket of securities in certain percentages that stays consistent over time. At a predetermined date, this trust matures like a bond and you’ll receive the cash value. The benefits of UITs are the costs and the lack of yearly capital gains. Since the trust matures at a certain time you will only need to worry about capital gains taxes at that time. They are also low in cost due to less management. Discover why I haven’t used UITs and why I really don’t like structured funds by listening.

Check out the Rock Retirement Club

The Rock Retirement Club is our online university that will empower you to rock retirement. The online courses will teach you how to build your retirement plan step by step. You’ll learn how much is enough and when you can retire. In addition to being part of the amazing community of like-minded people walking the same journey, you’ll also gain access to retirement calculators, spreadsheets, and other tools to help you rock retirement.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [4:38] What is a closed-end mutual fund?
  • [8:31] What are the advantages and disadvantages of closed-end mutual funds?
  • [12:57] What is a unit investment trust (UIT)?

Q&A SEGMENT

  • [19:17] How much is too much for a 5-year plan?
  • [25:03] A healthcare before Medicare question
  • [30:34] Self-funding long term care insurance using your home

TODAY’S SMART SPRINT SEGMENT

  • [37:13] Think about what you can accomplish between now and the end of the year

Resources Mentioned In This Episode

Check out the long term care insurance series by starting here

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Direct download: RAM375.mp3
Category:general -- posted at: 5:00am CDT

Retirement planning takes many different forms, but to effectively manage your money in retirement it is important to know the types of investment accounts that are available. This is why I am hosting the Asset Allocation Ingredients series. 

Over the course of this series, we explore what goes into your investment mix. This episode focuses on separately managed accounts. You’ll learn what they are and their advantages and disadvantages. 

Make sure to stick around for the listener questions segment to hear answers to questions from listeners like you. 

What is transformation?

Transformation means a dramatic change in form or appearance. However, there are many transformations we can make in life that aren’t physical. Common life transformations occur when we leave school and enter the professional world, go from single to married life, and of course, from working to retired. 

A transformation can be triggered by a few different things. It could be triggered by a life event, or it could be a gradual change over time, or simply by you looking for a change in your life. Are you working towards any transformations in your life? 

What is a separately managed account?

A separately managed account is a portfolio managed by a third party. Essentially, you are assigning the management of funds to a money manager who is implementing the portfolio that you have hired them for. 

A separately managed account is different from an ETF or mutual fund in that you open an investment account at a firm and the account manager will build the portfolio based on the strategy you choose. It’s like a mutual fund that is completely unwrapped. You own each individual position in that account rather than in a bundle. 

What are the advantages and disadvantages of separately managed accounts?

Some advantages to SMAs are: 

  • You have access to institutional managers that don’t manage mutual funds.
  • You can customize your account by setting restrictions on what is allowed. 
  • You maintain better control of the realization of gains and losses.

There are a few disadvantages:

  • There are fewer options to choose from.
  • The baseline to open an account is higher.
  • Fees are generally higher than other types of accounts.
  • They add more complexity to your portfolio.

Are separately managed accounts a part of your portfolio? What do you like about them?

What’s coming up next on Retirement Answer Man

Make sure to check out the next episode where we will explore UITs and structured notes. After this deep dive into the financial aspect of retirement, next month our focus will shift to the non-financial side of things. You won’t want to miss out on building your non-financial retirement plan.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [2:10] What is transformation?

PRACTICAL PLANNING SEGMENT

  • [5:49] The basics of a separately managed account
  • [10:08] Disadvantages to this kind of structure for investments

Q&A SEGMENT

  • [14:24] A thank you from Dennis
  • [18:21] How to choose mutual funds
  • [21:38] The tax deductibility of long-term care 
  • [23:52] How did I calculate the discount rate in the Retirement Plan Live webinar
  • [31:11] What do you do with tax liability on a net worth statement?

TODAY’S SMART SPRINT SEGMENT

  • [34:05] Think about a transformation that you are working toward

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM374.mp3
Category:general -- posted at: 9:44pm CDT

This month we are discussing the ingredients that make up your retirement portfolio--your pie cake. In the previous episode, we took a deeper look at ETFs, and in this episode, we explore mutual funds. 

You probably have mutual funds somewhere in your portfolio, but you may not know exactly what they are. On this episode of Retirement Answer Man, we will take a look at what a mutual fund is so that you can determine if you should have one in your retirement toolbox. 

Is the Rock Retirement Club right for you?

To truly rock retirement you need to do 3 things. 

  1. Build a solid retirement plan that will act as your decision-making framework to help you implement an agile process throughout your retirement. 
  2. Find a safe place where you can get unstuck whenever you get stuck building your retirement plan. You need a place where you can keep your momentum going and you can get answers to the questions you have.
  3. Surround yourself with people who are intentional about living this part of their life. Get inspired by others and inspire others so that you can all rock retirement together. 

You can find all 3 of these things in the Rock Retirement Club. If this sounds like it could help you plan the next chapter of your life check out RockRetirementClub.com.

Have you collected investments and accounts?

As you approach retirement, you may notice that you have a lot of financial clutter. You have probably worked a few different jobs and over time, you may have collected retirement investment accounts in various places. You may also have several types of investments in different accounts. 

When you are approaching retirement this can be a problem. These investments can be a financial mess. The complexity can be confusing and overwhelming. When building a retirement investment portfolio take the time to make it simple. Determine what kind of portfolio you want to build to support your retirement.

What are open-ended mutual funds? 

Mutual funds are similar to ETFs which we discussed in the previous episode. However, in a mutual fund investors pool their money together into an existing portfolio. Mutual funds are priced only once per day based on the net asset value and they are traded only once per day based on that price.

What are the advantages and disadvantages of open-ended mutual funds?

Just like any other investment, mutual funds are neither good nor bad. They are simply a tool to add to your investment toolkit. One advantage of mutual funds is that there is no tracking error since it is priced on the net asset value. They are easy to invest and there is a huge menu of investment options. Open-ended mutual funds are extremely liquid so you can get in and out of them easily. Listen in to hear what the disadvantages of mutual funds are. You’ll also hear me answer several listener questions with Nichole. Press play now.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [4:38] Have you collected investments and accounts?
  • [7:25] What are open-ended mutual funds?
  • [9:51] What are the advantages and disadvantages of open-ended mutual funds?
  • [19:07] Open-ended funds are neither good nor bad 

Q&A WITH NICHOLE

  • [21:52] How to use a set portfolio to build your pie cake?
  • [26:41] Should your withdrawal strategy change if you don’t have kids?
  • [30:37] What to do with a 457B plan?

TODAY’S SMART SPRINT SEGMENT

  • [34:36] Question what you are doing--what else could you be doing?

Resources Mentioned In This Episode

Episode 370 - The recent episode with Fritz Gilbert

Episode 372 - Start here if you want to learn more about building your pie cake

Episode 363 - The beginning of the Let’s Get Physical health series

BOOK - Atomic Habits by James Clear

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM373.mp3
Category:general -- posted at: 5:00am CDT

If you have listened to this show for a while you know that I like to create a retirement withdrawal strategy based on the pie cake. However, we haven’t discussed what goes into the mix. 

Over the next several episodes, we’ll dive into the details of asset allocation. You’ll learn a bit about ETFs, mutual funds, separately managed accounts, and UITs. On this episode, in addition to answering listener questions with Andy Panko from Retirement Planning Demystified, you’ll learn about ETFs and their pros and cons. 

Building your pie cake

In retirement, your portfolios need to reflect when you plan on spending those funds. I separate these portfolios into what I call the pie cake. The basis of the pie cake, is of course, the plate. Your plate will contain your contingency fund and emergency fund. The first layer of your pie cake contains the money that you will use to fund your life over the next 4-5 years. The next layer will contain funds that have a different asset allocation. It may contain funds that are more of a mix of stocks and bonds. In your last layer, you have your long-term assets which will consist mainly of stocks. 

What are the ingredients of the pie?

Now that you have the cake set up you’ll need to consider what you’re going to put into each pie. Each layer of the pie cake is different and must be made separately. You’ll want to consider what ingredients you want to add.

How many ingredients do you want to have in your mix? I like to have as few ingredients as possible. Try adding complexity to your ingredients by diversification rather than simply adding more ingredients. What would you prefer in your pie--simple ingredients or complex ones with names you can’t pronounce?

What is an exchange-traded fund?

An exchange-traded fund (ETF) is an instant portfolio. It is different from traditional mutual funds in that an ETF trades like a stock--you can buy call options or put options. They can be highly managed or not depending on what you buy, so pay careful attention to the fees attached. 

One unique mechanism ETFs have is that the managers buy stocks that represent the portfolio you are trying to match. They track very closely to the net asset value. Learn more about ETFs by listening to this episode of Retirement Answer Man--make sure to stick around for the listener questions with Andy Panko.

What are some advantages and disadvantages to ETFs?

ETFs aren’t all good or all bad. They have their pros and cons. One advantage to an ETF is that you have an instant portfolio. Another advantage is the clarity. You know what is inside the fund at all times. They are also transferable between different brokerage houses and are quite tax efficient. 

On the flip side, if you buy an ETF that is focused on an index you may get less diversification than you think. So make sure to dig under the hood a bit to understand what it is that you are buying. ETFs can also be more expensive if it is more actively managed. Press play to hear the difference between an organic and manufactured ETF.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [1:50] How to build your pie cake
  • [3:23] What ingredients do you need to create your pie?
  • [7:48] What is an exchange-traded fund?
  • [11:28] What are some advantages and disadvantages to ETFs?
  • [15:31] There are organic and manufactured ETFs

Q&A SEGMENT WITH ANDY PANKO

  • [19:23] Tax planning in retirement
  • [23:40] Can you use one spouse's HSA to pay for the other spouse’s medical expenses?
  • [26:55] How to balance retiring with college expenses ahead of you
  • [31:30] Roth conversions and the pro-rata rule
  • [38:32] Andy gives me some tax advice
  • [42:28] Can I recommend a First Pen?

TODAY’S SMART SPRINT SEGMENT

  • [43:45] Take a look at your portfolios and ask yourself if they are too complex

Resources Mentioned In This Episode

Taxes in Retirement Facebook group

Retirement Planning Demystified on YouTube

BOOK - Thinking in Bets by Annie Duke

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM372.mp3
Category:general -- posted at: 5:00am CDT

Do you know what you should be doing in the 5 years leading up to retirement? Are you doing everything you can to get yourself retirement-ready? 

This is the last episode in a 5 part series that expands upon what you need to do in the final push before retirement. If you’d like to start at the beginning of the series click here

Today we’ll hear from the audience. I have asked those that have already retired to share what they wish they would have known before retirement. Listen in to hear their words of wisdom so that you can make sure to rock your retirement. 

Your mental model can determine your success

How do you envision your retirement? Are you stressed about the logistics? Can you visualize yourself living out your retirement dream?

Many of us get caught up in the numbers side of retirement planning. And although it is important to have a good financial plan in place, what can be even more important is your model of what is achievable. If you don’t think your goal is achievable you’ll never be able to realize it. 

One way to adjust your mental model is to hang out with and learn from people that are already there living the way you want to live. Learning from them can help you evolve your own mental model. Listen in to expand your vision of what is possible in retirement. 

Words of wisdom from current retirees

Over the past month, I have been asking listeners who are recent retirees to chime in with pieces of advice that they wish they had known before they retired. I got some fantastic responses via email and voicemail. 

Chase wishes he had talked with others about their Medicare plans before choosing his own. Even after all his time researching, he felt like he made a poor choice of plans. During his next enrollment period, he’ll go with a different plan that a friend uses.

Kyle wishes he had paid more attention to tax brackets. He was a fantastic saver over the years, but didn’t focus on the different types of accounts he was saving in. This won’t be helpful when it comes to tax planning in retirement. 

On the flip side, Doug is very pleased that he laid out an income strategy in his retirement plan. Tax planning was a big part of the way he planned.

Glen recommends paying off the mortgage in the years leading up to retirement. Not only did it feel great to pay off, but this also allowed him to test drive his retirement budget. Listen in to hear how Glen did that.

Create your retirement plan and stay agile

Looking at the big picture and creating your retirement model will help you envision the life you want. Engage with your spouse if you are married and discuss what life could be like. Knowing where you want to go helps create the mindset you need to move forward with confidence and to live life without regrets. 

Organization is power, so have a game plan and be ready to execute it. You can always make adjustments as the retirement game unfolds. If you stay agile then you can adjust your plan as needed. 

Don’t miss out on all the words of wisdom from our listeners. They have some fantastic advice to get you moving on your retirement journey.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [3:30] Your mental model of what is achievable is just as important as everything else
  • [4:42] Ask others about their Medicare plans
  • [6:36] Building out a retirement helps to picture what could be
  • [8:31] knowing where you want to go creates the proper mindset to move forward with confidence
  • [10:02] Kyle wishes they had paid more attention to tax brackets
  • [11:53] It’s important to have nonwork friends
  • [16:09] You will lose your life insurance if it is through work
  • [18:44] Wishes he put more 401K into Roth
  • [22:02] Allow yourself to relax

Q&A SEGMENT

  • [24:29] A long-term care buyout question
  • [30:35] A MYGA fixed annuity question

TODAY’S SMART SPRINT SEGMENT

  • [33:11] Think about your mental model -- is it holding you back?

Resources Mentioned In This Episode

Long-term care series - Start at episode 311

Breaking the 4 Minute Mile from Harvard Business Review 

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM371.mp3
Category:general -- posted at: 5:00am CDT

Are you within 5 years of retirement? If so, it’s time to start training. Retirement is like a marathon, and you need to be ready to run it. This episode is part 4 of a 5 part series on what to do in the 5 years leading up to retirement. Today you’ll learn how to properly train for the marathon that is retirement so that you can enjoy the run when you get there.

Are you signed up for the 6-Shot Saturday newsletter? Make sure to get on the email list so that you can receive a comprehensive guide that lays out what you need to focus on in the 5 years leading up to retirement. Next week you’ll hear tips from current retirees who are a few steps ahead of you on this journey, so don’t miss it!

Expert advice from those who have walked the walk

Many of you have wondered how our Retirement Plan Live case study participants have fared in retirement. A few years ago, our first participant, Carl, came out of the closet to let everyone know that he is actually Fritz Gilbert from The Retirement Manifesto

Fritz joins me today to share his experience in writing his blog and what he learned from planning his retirement. Now that he has a few years of retirement under his belt he can reflect on what worked, what didn’t, and what were the integral parts of his retirement planning. Come listen to those who have already walked this walk. Let’s see what we can learn from them. Listen in to hear Fritz’s story. 

Fritz’s takeaways from his retirement planning

So, what did Fritz learn from his retirement planning? He did so much to plan for retirement, but certain things that he did proved more helpful than others. During his one phase of planning for retirement, Fritz created a pre-retirement checklist. 

He had never made a budget before but knew he had to have an understanding of how much he and his wife spent each month. They successfully tracked their spending by category for 11 months so that they could break those expenditures down into necessities and discretionary spending. 

After having a better understanding of his spending he was able to lay everything out in a cash flow timeline. Fritz projected his cash flow for the first 5 years of retirement which helped him understand how and where he needed to put his money. 

What was the biggest adjustment for Fritz in retirement?

One thing that people don’t plan for is how they will move from the accumulation phase of investing to the withdrawal phase. This stage of investing requires a completely different approach to managing a portfolio. 

Your new investment plan must be in place from day 1 of retirement, so it will need to be planned out a few years prior to retiring. Have you considered hiring a financial planner as a consultant to check your retirement plan?

The non-financial aspects of retirement are just as important as the financials

When people talk about the changes of retirement they are referring to the non-financial aspects of this stage of life, yet most people focus solely on planning the financial part of the puzzle. Your best chance for a great retirement is finding out what gets you excited about life. What will give you purpose when you retire? 

When you retire you’ll leave your network of friends, the structure, routine, challenges, and rewards of your work life behind. This freedom can be liberating or paralyzing. Think about ways that you can give back and focus on others. Listen in to find out how Fritz’s 10 commandments of retirement helped him stay focused on rocking retirement. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [1:56] What is a marathon?
  • [4:25] Retirement is like a marathon
  • [12:03] Your marathon should be enjoyable

PRACTICAL PLANNING SEGMENT

  • [15:10] Fritz Gilbert aka Carl reflects on his retirement planning
  • [18:12] Fritz was never a budgeter
  • [21:15] Were there any spending surprises?
  • [27:50] Get your investing plan in place
  • [32:14] The non-financial aspects of retirement can be a source of anxiety as well 
  • [46:07] Define your values 

Q&A SEGMENT

  • [49:09] Are there any tax consequences to consolidating your retirement accounts?
  • [51:19] How will Social Security work with a disabled child?
  • [54:30] What are you trying to optimize for in your planning?

TODAY’S SMART SPRINT SEGMENT

  • [58:22] Start to put your plan together

Resources Mentioned In This Episode

Retirement Manifesto

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

 

Direct download: RAM370.mp3
Category:general -- posted at: 5:00am CDT

Have you ever tried Googling your specific retirement questions? Chances are, those Google searches gave you more confusion than clarity. We all want to rock retirement, but there is a long road from where you are today to the retirement of your dreams. 

My goal with the 5 episode What to Do in the 5 Years Before Retirement series is to teach you what you need to focus on in those years leading up to retirement. I want you to have the knowledge and power you need to truly rock retirement. If you want to learn what it takes to fulfill your retirement dreams then press play now. 

Identify your values

Many people think that they are most worried about the financial aspect of their retirement but they don’t want to acknowledge the fact that they are worried about other areas of retirement as well. Instead of recognizing these worries, they redirect their worries to the financial areas. 

One way to begin to get started planning the non-financial side of retirement is by identifying your values. Think about who you want to be. What do you want your life to represent? You can create a new identity for yourself in retirement that reflects your true self. 

Once you identify your values you can then create your mission statement. Take some time to reflect on what you really want as you work through these exercises.

Get off the career treadmill

In your career, you have been focused on achievement for decades, but in the last 5 years of retirement, you need to mentally separate yourself from your career. Work has always come first, but it won’t be that way for long. Since you are no longer trying to get that next promotion it’s time to start setting boundaries. 

Try taking a retirement rehearsal. Think about where you want to live and what you want to do in retirement and take a month off of work to go there and do what you would be doing. 

Expert advice from those who have walked the walk

Listen in to this episode to hear this interview with the Rock Retirement Club’s very own retirement coach, Kevin (Beachwalker) Lyle. He’ll share his experience from his own retirement as well as the wisdom he has learned from others in his time coaching with the RRC.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [6:39] Acknowledge the stress you feel
  • [8:02] Identify your values
  • [13:22] You need to get off the career treadmill
  • [19:05] Book recommendations 

Q&A SEGMENT

  • [22:34] Why don’t more planners use a fee-only structure? 
  • [33:30] Annuities are now offered in 401K and 403B plans, are there any plans with lower fees?
  • [35:47] Stop looking for a deeper meaning to everything
  • [37:05] Can you use an HSA plan for healthcare premiums?

TODAY’S SMART SPRINT SEGMENT

  • [40:23] Think about the non-financial changes that will happen in retirement

Resources Mentioned In This Episode

BOOK - Halftime by Bob Buford

BOOK - Boundaries by Henry Cloud

BOOK - The New Retirementality by Mitch Anthony

Annuity series

Rock Retirement Club

 

Direct download: RAM369.mp3
Category:general -- posted at: 5:00am CDT

Are you trying to gain the confidence you need to rock retirement? If so, you’re in the right place. Welcome to the Retirement Answer Man show, you’ve joined the second episode in a 5-week series geared toward those who are within 5 years of retirement. If you’d like to listen to the first episode of this series head on over to episode 367

The purpose of this series is to get you to start thinking about the things in the financial realm to prepare yourself for this monumental life transition. Most blogs, podcasts, and other retirement resources focus on the retirement sizzle -- this series will serve you the steak. Press play if you are ready to build a strong foundation to rock retirement. 

How to build your foundation so that you can rock retirement

When you are within 5 years of retirement it's time to start thinking about your retirement plan. This is not the time to get fancy, instead, it’s time to start building your foundation. You can do this by creating your initial plan of record. This is the plan that balances all the cool things you want to do in retirement with all the resources you have available to make it happen. 

Your initial plan of record will help you start to make decisions. You can use fancy charts and tables to help you build your success ratios, but what is missing is what you can do to make it so. You want to know exactly how your plan is going to work. Where are you going to get your paycheck? Your plan of record is the chart that helps you get into the specifics of how to make retirement work. 

Is your plan feasible?

Once you get it all laid out in your plan of record, then you’ll want to map out your first 5 years of retirement to help you make decisions on where to allocate your resources. 

It is important to stay agile. You may have to change your plan based on external factors like the markets, your dreams, your health, or whatever obstacles pop up. 

To check the feasibility of your plan you’ll need to dial in your needs, wants, and wishes and your 3 sources of capital. Once you have determined these things then you’ll begin to build your process to determine the feasibility of your plan. Listen in to hear how. 

Use the right tools

You probably know about many of the retirement planning spreadsheets and calculators that are out there. It can be tempting to jump around and use different sources, but once you find one you’ll want to stick with it. Find a scale that you can use to dial in your information that you use consistently over time in an agile way to make decisions. 

Map out the first 5 yrs of retirement

Now it’s time to think about your income sources and projected spending for the first 5 years of your retirement. Look back at your 3 sources of capital: social capital, human capital, and financial capital. Will you use social capital like a pension or Social Security? Will you work part-time or start a small business? If so, what is your projected income from those sources? Will it cover your spending? If not, the deficit that remains will be covered by your financial capital. Listen to this episode to really dig in and discover how you can build your retirement plan for those first 5 years. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [3:31] If you are already retired please share your wisdom at RogerWhitney.com/askroger
  • [4:37] Create an initial plan of record
  • [9:12] Is your plan feasible?
  • [12:44] Map it out
  • [16:36] Now is the time to check on your Social Security benefit
  • [22:33] Where do you put your excess cash flow?
  • [25:41] What is liquidity?

Q&A SEGMENT

  • [29:57] Isn’t there an exception to the 5-year rule of Roth conversions?
  • [30:35] Are real estate syndications good or bad?
  • [36:14] Pay off the house or make a Roth conversion?
  • [41:00] Are there examples of Retirement Plan Lives with people who have fewer resources for retirement?

TODAY’S SMART SPRINT SEGMENT

  • [41:44] Create a simple spreadsheet that maps out the first 5 years of your retirement

Resources Mentioned In This Episode

SSA.gov

If you are already retired please share your wisdom at RogerWhitney.com/askroger

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM368.mp3
Category:general -- posted at: 5:00am CDT

Do you want to have the confidence to truly rock retirement? Are you within 5 years of retirement? If so, this is the series for you. Over the next 5 episodes, we’ll explore what you should be focused on in the years leading up to retirement. 

Today we’ll explore the opportunities and risks that come within this time frame. Next week, we’ll start setting the stage to prepare you for retirement. After that, we’ll explore the financial and non-financial aspects of preparing for retirement. In the 4th episode of this series, you’ll learn how to put it all into a plan. And lastly, you’ll hear an episode full of wisdom from people who are a bit ahead of you in this retirement journey. Are you ready to get started? Press play now!

Preparing for retirement is much like prepping for an adventure

In the 5 years leading up to retirement, you need to get ready. It’s as though you are preparing for an adventure. I liken it to a backpacking trip I took a few years back. First, my partner and I had to decide where we wanted to go. Then we had to arrange the logistics. Next, we had to assess whether we had the right equipment for our journey. Then we had to consider both our physical and mental readiness. After that, we had to acquire the things we needed. Once we finally got to our destination we had to assess the trail ahead. We even had to add extra supplies based on those trail conditions. We had to remain agile throughout the course of our journey. 

The opportunities and barriers to preparing for retirement

At this point in your career, you are probably making more money than you ever have before. You have a reputation and a vast professional network. You may even be at the tail end of the various financial engagements that come with raising a family. Now is a good time to evaluate your life. 

There are some barriers that you may need to overcome as you prepare for retirement. I often refer to the 50s as your not-so-thrifty 50s. It’s easy to save more and spend less now that you are earning more. It’s also easy to create a financial cage for yourself. Be careful of financial obligations like 2nd mortgages, RV or boat payments, or even that adult child that you continue to subsidize. These obligations could force you to work longer than you would like. Listen in to hear about more barriers you might face as you prepare for life in retirement. 

What can you do now to set yourself up for retirement?

There are several steps you can take to begin to set yourself up for retirement. 

  1. Start to assess your risks and opportunities by dialing in your income, expenses, and savings. Think about your expenses. What does it really cost to live your life? Separate your discretionary and non-discretionary spending to realize what it takes to live a good baseline life.
  2. Create your net worth statement listing your assets and liabilities. 
  3. Assess your boundaries at work. You have worked hard to build your career, but have you built up boundaries between work and home life?
  4. Assess your social life. Who would you call to have coffee with tomorrow? Do you need to broaden your social network?
  5. Assess your purpose. If you had 2 weeks to not think or talk about work what would you do each day?

It’s a great time to join the Rock Retirement Club!

Are you signed up for the 6-Shot Saturday newsletter? You’ll want to make sure that you are so that you can get our free net worth and expense worksheets.

Have you been on the fence about joining the Rock Retirement Club? Now is a great time to join because on March 16 we are starting a 3-week sprint to assess your needs, wants, and wishes. You can try it out for 30 days with a money-back guarantee. Go ahead and join now to see whether it is right for you. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [3:30] A Rock Retirement Club update
  • [4:04] The five years leading up to retirement is much like prepping for an adventure
  • [7:27] You have opportunities that you don’t want to miss in the 5 years 
  • [11:37] What can you do now to set yourself up for retirement?

Q&A SEGMENT

  • [21:51] Using a Roth IRA to fund long term care
  • [27:11] Roth IRAs and the 5-year rule
  • [30:04] Roth IRAs and Game Stop

TODAY’S SMART SPRINT SEGMENT

  • [31:57] Start to dial in your expenses and update your net worth statement

Resources Mentioned In This Episode

Share your wisdom with future retirees! RogerWhitney.com/askroger

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM367.mp3
Category:general -- posted at: 5:00am CDT

Over the past 3 episodes, we have been talking about different ways that you can improve your health in retirement. Today you’ll take action. Choose the habits you want to build and learn how to actually build these habits and set yourself up for success. Learning about health and nutrition is one thing, but taking action is something else entirely. Press play so you don’t miss out on these tips to learn how to create and stick with healthy habits.

Do you need to redefine your fitness identity?

When we are young it can be easy to take on a fitness identity. I’m a mountain biker. He’s a basketball player. She’s a swimmer. But as we age we can face a fitness identity crisis. Our fitness becomes more about mobility and nutrition. 

To help yourself create your new fitness identity think about what you want to accomplish. What do you want to improve about yourself? What new version of yourself would you like to see? Think about your motivation. Why do you want to have a healthy body? This is how you can define yourself. Listen in to hear my new motivation for good health.

Choose the habits you want to build

The power of good (or poor) health comes from habits. Positive and negative habits compound over time so to begin a healthy lifestyle you have to start by building healthy habits. You could start by building a huge meal plan or exercise routine, but that could also set you up for failure. Rather than creating a strict workout routine try tinkering with your movements to explore healthy activities that you really enjoy. 

How to build a habit and make it stick

You may already understand the importance of building healthy habits but some of us don’t know how to make them stick. Many of us try to create a routine but then struggle to maintain the habits we have created. Luckily, starting and keeping up healthy habits doesn’t have to be as complicated as you think. Try using these tips to help you create and maintain your healthy habits. 

To create healthy habits:

  1. Set yourself up for success. Make the habit simple to do. 
  2. Create friction. Take a bad habit and make it hard to do. 
  3. Start with a small habit. Plan on starting with 5 or 10 minutes a day. 

To maintain and build up your new habits:

  1. Over time increase your routine in small ways.
  2. As you build up your routine, split it up into separate times each day. 
  3. When you falter restart quickly and don’t beat yourself up about it. 

You have the opportunity to change your health

Retirement gives you the freedom to change your lifestyle. You have the opportunity to structure your day in a more purposeful manner. Think about who you want to be in retirement and get started building the habits you need to become that person. Listen in to the Coaches Corner segment with BW to hear how movement and mindset can shape your retirement.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [3:30] Most of us have to redefine our fitness identity as we age 
  • [7:25] How to build a habit
  • [15:32] Two stories to demonstrate different life views 

COACHES CORNER WITH BW

  • [19:45] Movement and mindset can help keep you young
  • [26:52] Use technology to improve your health

TODAY’S SMART SPRINT SEGMENT

  • [34:36] Start to make a change to improve your health

Resources Mentioned In This Episode

Streaks app

Noom app

Peloton app

Oura Ring

James Clear Habit Guide

BOOK - Atomic Habits by James Clear

Stride app

Leave me a comment! 

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM366.mp3
Category:general -- posted at: 6:00am CDT

If you are interested in living a healthy life you have to consider the food that you put into your body. The food you consume fuels your body and shapes your life. On this episode of Retirement Answer Man, you’ll learn 5 tips for ensuring excellent nutrition. You’ll also discover a few resources that can help you improve your thinking around nutrition. Grab your headphones and dive into this episode so that you can rock retirement by living a healthy life. 

What is diet?

Americans have an interesting relationship with the word diet. The word often invokes thoughts of failure and restrictions and no one likes to feel restricted. 

However, there are two definitions of the word diet. A diet is a special course of food to which one restricts oneself either to lose weight or for medical reasons and it also means the kind of food a person or animal eats.

As we’re discussing diet today we should consider the second definition rather than the first. This definition encompasses our whole lifestyle rather than considering the short term. To rock retirement, we want the cumulative benefits of a healthy diet rather than a short-term fix. When you consider the word diet I encourage you to think of it as a way to reset your eating habits to a healthier version. 

What is your relationship with food

We all have a relationship with food and often that relationship was built when we were young. But you may not want to continue eating the same way you did when you were in your teens and twenties. When we were young we could eat anything without seeing much of a change in our bodies. This is because our metabolism was high. But as we age our body chemistry changes and we don’t burn through calories like we did in the past. Think about your relationship with food. Do you still eat like you did in your twenties?

Modern food is made for convenience, not health

Everything about modern, industrialized food is created for mass production, shelf life, and consistency of flavor. As a result, modern food is high in fat, sodium, and sugar which makes it unhealthy. Added to the lack of nutrition, our portion sizes have gotten bigger in recent years. It is no wonder that our bodies haven’t adjusted to the modern diet. 

How to build a healthy diet

To create a healthy diet you want to make sure to eat food - not food products. This means eating fresh foods that don’t have a shelf life. Add colors to your plate by eating fruits, leafy greens, and whole grains.

Eating well means that you’ll have to plan your meals and give up on convenience food. Are you ready to change the way you eat? Listen to this episode of Retirement Answer Man to learn 5 tips you can use to improve your nutrition. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [1:30] What is diet?

PRACTICAL PLANNING SEGMENT

  • [7:27] We all have a relationship with food
  • [10:02] Modern food is produced to be unhealthy
  • [16:16] Understand how to read labels

Q&A WITH TANYA NICHOLS

  • [22:21] How to save later in life
  • [27:55] Feedback on the Parent Project series

TODAY’S SMART SPRINT SEGMENT

  • [32:44] Start reading the labels in your pantry

Resources Mentioned In This Episode

BOOK - The Mind Diet by Maggie Moon

PODCAST - The Doctor’s Farmacy by Dr. Mark Hyman

Noom App

The Parent Project series

Align Financial

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM365.mp3
Category:general -- posted at: 6:00am CDT

To rock retirement, you have to have the right tools, and the most important tool you have is your body. To keep up your strength and mobility your body needs to be fine-tuned. On this episode of Retirement Answer Man, we continue discussing your physical health. You’ll learn what you can do to maintain your strength and mobility so that you can rock retirement. 

What is mobility?

Mobility means having healthy muscles, bones, and joints so that you can freely move about. In retirement, it is important to have the mobility to do all the typical things you have to do and also so you can enjoy your favorite hobbies.

Staying healthy and fit isn’t the same now as it was in your 20s. Back then you exercised to keep up your good looks, but now, exercise is critical to maintaining mobility so that you can rock retirement and do all of the things you want to do.

Health and fitness can be your job in retirement

Many people struggle without the routine of work to keep their life in balance in retirement. In the book, Younger Next Year, the author, Chris Crowley, makes the argument that you should make health and fitness your job in retirement. 

This is an interesting idea that I want you to consider since exercise can provide you with not only structure but goals and rewards as well. When you devote time to your health you can see measurable results. Added to that, exercise can provide you with a social outlet and an ability to connect and work with other people. It can even draw you closer to your partner as you both work to attain your goals. 

This important job can become the center of your life now that you won’t have the busyness of work life. It may even help give you a new identity to help you transition from your work-related identity. What do you think about making health and fitness the center of your life in retirement?

How to build a body to support you to do all the things you want to do

You may have heard that you can lose up to 50% of your muscle mass by the time you are 50. However, the aged muscle can be repaired if you are willing to work to maintain it. It is important to build a plan with your doctor and you may want to include a personal trainer and nutritionist to help you build that plan. 

You’ll also want to work on increasing your flexibility. Your muscles get shorter as you get older causing your flexibility to decline. This can reduce your range of motion and lead to back pain, joint issues, and bad balance. Listen in to hear what apps you can use to help you maintain your exercise plan in retirement. 

Be sure to check out this week’s 6-Shot Saturday email newsletter!

Make sure that you are signed up for 6-Shot Saturday this week. Not only can you complete our annual listener survey, but we’ll have a link to a study guide for you to follow while you read the book, Younger Next Year. This study guide will give you a good idea of the kind of work we do in the Rock Retirement Club.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [1:30] What is mobility?

PRACTICAL PLANNING SEGMENT

  • [3:45] You should make health and fitness your job in retirement
  • [7:25] Use exercise for functional health

Q&A WITH TANYA NICHOLS

  • [20:36] Tanya exercises to stay sane
  • [21:44] Can you roll over only part of a retirement account?
  • [25:16] The pros and cons of multi-year guaranteed annuities
  • [32:21] Do I take the pension or the lump sum?

TODAY’S SMART SPRINT SEGMENT

  • [38:10] Go buy the book Younger Next Year

Resources Mentioned In This Episode

Align Financial

BOOK - The Power of Zero by David McKnight

Episode 310 - The Pie Cake

Daily Burn app

Apple Fitness Plus

FitBit Coach

Peloton app

Strava app

BOOK - Younger Next Year by Chris Crowley

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

 

Direct download: RAM364.mp3
Category:general -- posted at: 6:00am CDT

Good health is not something you can buy, but it can be an important savings account for your future. Over the course of the next 4 episodes, we will focus on how to stay healthy and fit in retirement. We’ll discuss exercise, mobility, and nutrition. In the final episode of the Let’s Get Physical series, you’ll learn how to create an action plan to build and maintain healthy habits throughout retirement. Press play to get started on creating a healthy life.

What is the difference between hurt and harm?

The difference between hurt and harm is somewhat obvious but it may not be readily apparent when it comes to making decisions. You may put off going to the dentist to get your tooth fixed because you know it is going to hurt. We generally try to avoid hurt, but hurt can be beneficial. Hurt itself, isn’t a bad thing. Eating junk food and choosing not to exercise doesn’t hurt, but it does harm you. It is important to recognize the difference between hurt and harm to help you stay healthy.

Modern medicine provides longevity, not quality of life

Modern medicine is amazing, however, there is a dark underbelly to our healthcare system. Longevity is the goal of modern medicine, not quality of life. If you are unhealthy, medications can keep you alive much longer than you would have ever been alive in years past. You may even be able to live as long as a healthy person. But those additional years that drugs and doctors’ care provide you will not be high quality and productive, instead, life will be painful and stagnant. 

The costs of being unhealthy

Choosing an unhealthy lifestyle ends up being costly. The more unhealthy you are, the more you will pay for healthcare. And although this number can be quantified in dollars, there are other costs as well. These social costs aren’t easily quantifiable, but they will certainly be felt. 

Rather than being an active participant in life, an unhealthy person becomes a spectator. Their mindset changes and they tend to break from the person they once were. They shift from a growth dynamic to a decaying dynamic. Are you willing to take the risks that come with an unhealthy life? You can’t change the choices you made in the past, but you can change your unhealthy habits now. 

Good habits compound over time

Small habits make us who we are. Just like saving money, our habits (good or bad) compound over time. You can’t buy good health, but you can invest in it. Building healthy eating and exercise habits doesn’t have to be about your weight or how you look. The purpose of creating healthy habits in retirement is to build energy and increase functionality. Listen in to learn how to create healthy habits so that you can rock retirement. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [1:30] What is the difference between hurt and harm?

PRACTICAL PLANNING SEGMENT

  • [4:48] The goal of modern medicine is longevity, not quality of life
  • [8:18] Healthy habits compound over time

Q&A SEGMENT

  • [12:20] The keys to ETFs and mutual funds
  • [15:11] A health savings account question
  • [19:11] My thoughts on the 4% rule
  • [22:37] Can Gary’s 401K annuity be moved within the 401K?



TODAY’S SMART SPRINT SEGMENT

  • [25:18] Pay attention to your eating and exercise habits

Resources Mentioned In This Episode

Episode 310 - The Pie Cake 

BOOK - Atomic Habits by James Clear

BOOK - Younger Next Year by Chris Crowley

BOOK - Boundaries by John Townsend

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

 

Direct download: RAM363.mp3
Category:general -- posted at: 6:00am CDT

This is it -- the last episode of Retirement Plan Live 2021! We have walked Trish through her unexpected retirement to see if she has what it takes to build the retirement of her dreams. Over the past 4 episodes, we have gotten to know Trish and her situation. We have taken an in-depth look at her goals, resources, and net worth to help her assess whether she is ready to retire. If you would like to start this series from the beginning, head back over to episode 359, if you’ve already listened then press play now. 

Don’t miss the live webinar!

Please join us tomorrow, January 28 at 7 pm CST, for the live webinar where I’ll help Trish discover if this dream of hers is attainable. We’ll identify the risks and opportunities she has to create a feasible plan to rock retirement. During this live webinar, you can ask questions and have them answered. You can even use Trish’s example as a case study to help you build your own retirement plan. 

What is identity?

Identity encompasses everything about you. It is a mishmash of your memories, experiences, values, and relationships. All together this big pot creates who you are. 

Consequently, identity is not fixed -- it changes over time. There are pivot points in your life, like those transitions from high school to college, college to career, marriage, and family. We can use these points in life as opportunities to start with a fresh slate and remake our identities. 

Retirement is another opportunity to start over and remake your identity. If you haven’t spent enough time creating your identity outside of work it can feel scary to think about who this new you is going to be. Have you thought about who you want to be in retirement? 

Trish lost her sense of control after getting laid off

Trish had worked at her job for 29 years. We don’t see that very often anymore. She truly thought that she would work there until she chose to retire at age 55. So when she was laid off unexpectedly this past October, it was like a kick in the gut. She is still reeling from the effects. 

Every day she keeps the same routine, she gets up, goes for a run, gets dressed, and heads to her home office to search for work from 8-5. Will coming up with a retirement plan help ease her worries?

What does this make possible?

When we are in the midst of a problem it can be easy to lose perspective. This is why it is important to slow down and make purposeful decisions. One question to ask yourself when dealing with the unexpected is: what does this make possible? Can Trish begin to see the possibilities? Can she start looking ahead? What about you? Do you know how you can create a meaningful life after retiring? Listen in to hear from retirement coach, BW, he has helpful advice for Trish that may resonate with you as well. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [2:11] What is identity?

PRACTICAL PLANNING SEGMENT

  • [7:25] Trish wasn’t happy to get laid off
  • [14:35] Would not needing a job help her relax?
  • [20:53] What is she doing to help herself get through this?

COACHES CORNER WITH BW

  • [25.11] Slow down and be purposeful
  • [31:03] Trish can find the balance

TODAY’S SMART SPRINT SEGMENT 

  • [35:05] Let yourself be happy

Resources Mentioned In This Episode

Register for the live webinar on 1-28 at 7 pm CST

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM362.mp3
Category:general -- posted at: 6:00am CDT

Last week in Retirement Plan Live, Trish dreamed up big dreams for her retirement. In this episode, we are going to outline her resources to see if she has the ability to fund those dreams. Organizing your resources is an important step in retirement planning. Listen in to learn how important it is to plan what you want to use your resources for, and let’s see if Trish has what it takes to build her retirement dreams. 

What is a resource?

A resource is a natural source of wealth or revenue. It is also a natural feature that enhances the quality of life. It’s what you do with your resources that matters.

If you are listening to this show you are probably over 50 which means that you have spent decades building your resources. You’ve built up all 3 categories of resources -- human capital, social capital, and financial capital. Human capital includes your skillset and reputation. Social capital includes pensions and Social Security. Financial capital doesn’t only include your money, it also includes houses and boats in addition to your retirement accounts. 

What will you use your resources for?

When you look at your resources in retirement you have to ask yourself to what end are all these resources for? What is this money for? In retirement, your resources are meant to be used to express your values through your goals that you live out in the season of retirement. 

Dying with too much money is poor stewardship. It means that your resources were never harvested to live out your values. Think about what you want to do with your abundance. Be intentional and create the life that you want. Explore the options you have now so that you don’t leave your resources like a neglected crop left to be absorbed back into the earth. 

What kind of capital does Trish have?

In our last episode, Trish dreamed big -- European vacations, a second and maybe 3rd home, a convertible, the works. Now that we’ve got her thinking big, we have to see what she can afford. It’s time to take stock of her resources. 

Just like you and I, Trish has social capital, human capital, and financial capital. She will collect Social Security when the time comes and would like to use her human capital in some capacity until she is 59. Listen in to hear how I walk her through her balance sheet and organize her resources.

Check out the Rock Retirement Club to help you organize your own resources

Have you been enjoying Retirement Plan Live? Would you like to have guidance as you organize your resources? In the Rock Retirement Club, we have a Retirement Masterclass that does just that. We walk you through all of this planning with worksheets and trainings and there is even an entire module that helps you organize all of your capital. Check it out at RockRetirementClub.com.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [1:30] What is a resource?

PRACTICAL PLANNING SEGMENT

  • [11:02] What kind of social capital does Trish have?
  • [15:32] Trish plans on using her human capital
  • [25:35] We organize Trish’s financial capital

Q&A WITH NICHOLE

  • [36:10] How did we do on our words for 2020?
  • [37:32] Lisa asks how the 4% rule changes if you retire at 55
  • [40:35] Should Jackie stop saving in her Roth IRA since her husband got laid off?
  • [44:53] Can Jim’s mother transfer an IRA to him?

TODAY’S SMART SPRINT SEGMENT

  • [48:43] What is your word for 2021?

Resources Mentioned In This Episode

BOOK - So Good They Can’t Ignore You by Cal Newport

Social Security Detailed Calculator

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM361.mp3
Category:general -- posted at: 6:00am CDT

Welcome to week 2 of Retirement Plan Live 2021! Last week, in episode 359, you got to meet Trish who was unexpectedly laid off last year. She had been hoping to retire within 5 years, but with this layoff, she is exploring the idea that maybe she can retire now. Over the next few episodes, we will walk her through the steps I take with clients to create and test a retirement plan. 

“You are never too old to set another goal or dream another dream,” -- C.S. Lewis.

What is a goal?

Before we begin, let’s examine what a goal is. Simply put, a goal is something you want to achieve in the future. We often have larger goals and smaller, more immediate goals. They should be a stair step to your bigger vision. 

All of my goals stem from my values and vision. Before coming up with your goals, it is important to have a clear understanding of your values -- articulate them and define them. The idea is that your goals help you to live out your values. Have you defined your values, vision, and goals?

Needs and wants

Let’s talk about needs, wants, and wishes. I like to create 3 categories of spending when creating a retirement plan. This way we can determine a person’s level of fundedness. 

The first category is the needs category. This is what a person needs to live their baseline life. However, it doesn’t mean simply eating rice and beans every day. Trish estimates that she needs $10,000 per month to live comfortably. 

The next area is the wants category. One of Trish’s wants is a convertible when they move south. What kind of wants would you put under this heading?

Can Trish dream big?

The last section we examine is wishes. This is where you dream big without holding back. Some people struggle with this, but others take on this challenge whole-heartedly. Are you able to dream big? What are your most extravagant wishes? Listen in to hear what Trish includes in her wishes, and maybe you’ll find some inspiration for your own planning. 

Create your own retirement plan

If you would like to follow along and do these same exercises on your own, be sure that you are signed up for the 6-Shot Saturday email newsletter to receive worksheets each week to examine your own retirement readiness as we work through this Retirement Plan Live with Trish. 

Are you curious to discover whether Trish has what it takes to retire? Sign up for the live webinar with Trish on January 28 at LiveWithRoger.com. This is when we put Trish’s retirement plan to the test to see if she can retire now or if she needs to continue working for the next few years. Don’t miss out!

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [2:30] What is a goal?

PRACTICAL PLANNING SEGMENT

  • [9:10] Trish lays out her needs and wants
  • [20:47] I help Trish dream big

Q&A WITH NICHOLE

  • [29:14] An asset allocation question
  • [31:40] Robert asks if he should cash out his mother-in-law’s annuities
  • [35:18] A pie cake question

TODAY’S SMART SPRINT SEGMENT

  • [38:25] Think through your spending for the year

Resources Mentioned In This Episode

Episode 310 - The Pie Cake 

Sign up for the live webinar with Trish on January 28 at LiveWithRoger.com

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

 

Direct download: RAM360.mp3
Category:general -- posted at: 5:00am CDT

Welcome to the Retirement Answer Man show, this month we’ll be doing a Retirement Plan Live! The Retirement Plan Live series allows you to take an in-depth look at a person’s goals, resources, and net worth to determine whether they are ready to retire. At the end of the month, on Thursday, January 28th, we will wrap it all up with a live webinar that you can join to see how it all works out. Register for that event at LiveWithRoger.com.

Make sure you are signed up for the 6-Shot Saturday newsletter which will have a summary of my conversation with Trish each week and it will also include worksheets to help you organize your resources to create your own retirement plan. 

Begin with the end in mind

On your last day on earth, the person you become will meet the person you could have become. Will those two people know each other or will they be strangers? 

When you retire you finally get to organize your life to express the person that you are and want to become. 

You have worked for decades saving and investing as you built your career. Now you can use those resources to become who you really want to be. You get to magnify your best self.

Who is Trish?

Trish is 51 years old and her spouse is 60. Her plan was to retire at age 55, however, that plan was foiled since she was recently let go from her job. Trish worked for the same company for 30 years and despite receiving almost 1 year of severance pay, she feels lost. Losing her job has been devastating and she feels like she has lost her identity. How would you feel if you suddenly lost your job? Is your identity tied to your career?

What would Trish like to accomplish?

Everyone has a dream of retirement, and Trish is no different. She and her partner hope to get a house in a warmer climate and be snowbirds for a bit before finally settling down in that location. She pictures herself going to the beach every day and drinking fancy drinks with umbrellas in them. 

But Trish doesn’t only think of herself. She and her spouse are very family-oriented and love to take trips with their siblings and nieces and nephews. The real question is how big can she dream? We’ll tackle that question in the next episode.

Do you wish you could do your own Retirement Plan Live?

The Retirement Master Class in the Rock Retirement Club mirrors what we do here in the Retirement Plan Live series. This master class walks you step by step and helps you build your own retirement plan based on who you want to become. You’ll learn how to identify your goals, organize your resources, and discover what is feasible. We teach you how to dream with the end in mind by focusing on who you want to become. Check out the Rock Retirement Club to learn more.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [2:14] Beginning with the end in mind

RETIREMENT PLAN LIVE SEGMENT

  • [3:44] The Retirement Master Class helps you build your retirement plan
  • [7:28] Who is Trish?
  • [13:08] Losing her job has been like losing her identity
  • [18:10] What would she like to have accomplished at 80?

CATCHING UP WITH SAM

  • [22:57] Sam retired early with no regrets
  • [26:58] She has made time for the things she enjoys
  • [30:37] Have her spending estimates been accurate?
  • [35:09] What is she excited about?

TODAY’S SMART SPRINT SEGMENT

  • [36:57] Have the courage to live a life true to yourself

Resources Mentioned In This Episode

LiveWithRoger.com

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM359.mp3
Category:general -- posted at: 8:19am CDT

Today we finish up The Parent Project. This has been an important theme to tackle and fortunately, we had 5 weeks to spend learning how we can help our parents age gracefully. If you haven’t listened to the other episodes in this series you can start here

To wrap up The Parent Project, Christine Benz from Morning Star joins me to discuss how you can help manage your parents’ finances. Not only is Christine a financial expert, but she has had firsthand experience taking the reins of her parents’ finances. 

Stick around until the end to hear how our very first Retirement Plan Live test subject is faring all these years later. 

What does gracefully mean?

At the beginning of this series, we talked about the stages of aging: independence, interdependence, dependence, crisis management, and end of life. We will all go through these steps as we age, but some will pass more quickly than others. Unfortunately, none of us can predict which of these periods may be drawn out over time. As children guiding our parents, we can strive to help them age gracefully.

Gracefully means in a respectful and dignified way. A gift we can give to our parents or elders is to give them the opportunity to pass through the stages of aging gracefully.

Communication is key

There’s that word again: communication. Communication has been a common theme throughout The Parent Project series. The value of communication cannot be overstated when it comes to helping your parents as they age. 

Christine Benz finds it challenging to find one-size-fits-all advice for everyone when it comes to caring for their parents since every family is so different. The only common thread is communication. 

Christine feels that it is important to open a dialogue with your parents and siblings as your parents move through the stages of aging. Have you opened a dialogue with your parents about their finances? If you haven’t started yet, listen in to hear a fantastic tip that Christine shares with us. 

Who will be in charge?

When there are multiple siblings involved sometimes you may wonder who will take the reins when mom and dad need help. Oftentimes there is an obvious choice, but the best option may be to divide and conquer. This way you can divvy up the duties. One sibling could be in charge of doctors’ appointments, another in charge of day to day finances, and yet another could handle the investments. Keep the lines of communication open to respect your parents’ wishes and to keep all interested parties up to date. 

How has The Parent Project helped you?

What have you learned in this series that you want to take action on? Have you begun talking to their parents about their wishes? Do you think you have learned something that you can apply to your own retirement? 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [2:30] What does gracefully mean?

PRACTICAL PLANNING SEGMENT

  • [4:58] Christine Benz shares her views on managing the parents’ finances
  • [10:23] Have you considered having 2 financial managers?

CATCHING UP WITH FRITZ GILBERT AKA CARL

  • [23:02] Fritz Gilbert, aka Carl was the first Retirement Plan Live test subject
  • [25:08] Is Fritz rocking retirement?
  • [31:02] You leave your identity behind when you retire

TODAY’S SMART SPRINT SEGMENT

  • [40:29] Let’s just get through tomorrow!

Resources Mentioned In This Episode

The Retirement Manifesto blog

Christine Benz

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

 

Direct download: RAM358.mp3
Category:general -- posted at: 6:00am CDT

There may come a time in your parents’ life (and in your own) when they begin to lose their agency. They may no longer have the ability to act upon their own path. Do you know what steps to take if that happens?

In this episode of Retirement Answer Man, we’ll investigate when, what, and how to take over when the time comes. Today, I have 2 guests joining me who will share their firsthand experience with the process of caring for a parent. 

Join me for the 4th installment of the Parent Project series. If you haven’t listened to the first 3 be sure to check those out when you’re done with this one. 

What does guardianship mean? 

Guardianship is a legal process used to protect individuals who are unable to care for their own well being due to incapacity or disability. The way it works is that the court appoints a legal guardian to care for a person who needs special protection. 

First, an attorney must petition the court, and then they must provide evidence as to why the person needs to have a guardian appointed. Then the court decides if the person is sufficiently incapacitated and also if the person requesting guardianship meets the guidelines. Listen in to learn whether having a power of attorney could eliminate the need for guardianship. 

Is there a better option?

Gaining guardianship over your parents or aging family members should be a last resort. Hopefully, your parents have planned ahead and made your situation a bit easier by setting up a legal plan including a power of attorney. Listen in to hear whether joint accounts, power of attorney, or a traunch would be the best course of action when the time comes.

Naomi Karp shares her experience

Naomi Karp is an attorney and longevity expert that has worked on longevity for over 30 years. Her work has focused on law, aging, and policy and has included research, advocacy, and legislative work. She specialized in elder abuse and cognitive impairment and she is now getting firsthand experience in the caregiving process by caring for her mother. Don’t miss out on learning from her expertise. 

What would you like to learn about elder care?

Family members make a significant portion of elder caregivers. There is so much to learn when jumping into a caretaker role, but it mostly requires on the job learning. Listening to stories from people like Naomi and Sarah can be extremely helpful and lessen the learning curve. Have you had to learn how to care for an aging family member? What is one thing you wish you had known before you started?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [1:30] What does guardianship mean?

PRACTICAL PLANNING WITH NAOMI KARP

  • [4:46] Naomi Karp has both the expertise and the personal knowledge of caregiving
  • [9:52] How do you take over your parents’ finances without being abusive?
  • [14:59] How to choose a power of attorney
  • [20:43] What kind of duty are you taking on if you become a guardian
  • [32:20] Check out the When I’m 64 podcast

PRACTICAL PLANNING WITH SARAH

  • [43:20] Sarah started noticing problems with both parents when her dad was hospitalized
  • [46:52] How to know when to take over
  • [50:42] Make sure your siblings and the doctors are on the same page
  • [54:40] Use their tax returns to help you identify their different accounts
  • [1:00:24] Hypotheticals can take you far
  • [1:02:44] Gaining power of attorney is so important
  • [1:09:05] What she wishes she had known
  • [1:13:44] Music is powerful for someone with dementia

TODAY’S SMART SPRINT SEGMENT

Resources Mentioned In This Episode

Naomi Karp

When I’m 64 podcast

EverSafe

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM357.mp3
Category:general -- posted at: 6:00am CDT

Welcome to the third installment of the Parent Project series. As your parents age, they may need you to pick up the reins and help out a little -- or a lot. Helping your parents get older with grace and dignity can be fulfilling, but at the same time challenging. The more prepared you are for this challenge the easier it will be.

After you listen to this episode make sure that you are signed up for the 6-Shot Saturday newsletter so that you can receive all of the FREE resources to help you prepare for this next phase of life. 

What is preparation? 

The word preparation means getting ready for an event or undertaking. You prepare for trips, parties, and all kinds of things. When you prepare financially you make financial life more stable, organized, and consistent.

You don’t even know if our parents will need help so why should you prepare for it now? You may not think that you need to prepare to manage your parents’ finances but the more prepared you are the more ready you will be if an unforeseen event happens. 

How can you talk to your parents about their finances? 

Talking to your parents about finances and estate planning can be uncomfortable. No one wants to sit down and have that big conversation. So instead of having a big uncomfortable conversation try having smaller conversations over time. When you strike up smaller conversations it’s easier to keep the dialogue open. Try opening the door to a smaller conversation the next time you see your parents. 

The 3 types of aging parents

Everyone’s parents are different. Some parents don’t want to deal with any of their finances, this type of parent may need you to be a project manager. Others may want a little bit of assistance, if so, then you could take on the role of a coach. And other elderly parents may want you to take a hands-off approach. They may appreciate you feeding them small pieces of information along the way. What kind of parents do you have?

Tips for talking to your parents about their finances

  • Keep the financial conversation separate from family time
  • Don’t have too many cooks in the kitchen
  • Take an inventory of their accounts
  • Create a net worth statement
  • Set up online access for all of their accounts 
  • Use a password manager
  • Get organized and create a diagram
  • Have digital records
  • Get introduced to key people

Listen in to hear the details about how to create this dialogue so that you can get prepared to help your parents. Whether they need it or not, being prepared for the financial conversation will give you some peace of mind as your parents get older. Make sure to stick around to hear a first-hand story from retirement coach, Mark Ross and catch up with Lori from Retirement Plan Live. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [1:30] What is preparation?

PRACTICAL PLANNING SEGMENT

  • [6:17] Have little conversations
  • [8:05] What kind of parents do you have?
  • [16:30] Create an organizational diagram

AN INTERVIEW WITH MARK ROSS

  • [22:02] Mark has been on a long journey with his parent project
  • [24:50] He turned an overwhelming project into an enjoyable journey
  • [25:57] How did he manage the conversations with his parents?
  • [29:37] How did he deal with his siblings?
  • [35:47] It all works out in the end
  • [38:42] What is he doing differently now that he has learned about aging?

TODAY’S SMART SPRINT SEGMENT

AN INTERVIEW WITH LAURIE FROM RETIREMENT PLAN LIVE

  • [43:04] Bruce has since retired and Lori is still working part-time

Resources Mentioned In This Episode

Check out Lori’s Retirement Plan Live - start with episode 194

Everplans.com

LastPass

1Password

Estate Planning in Retirement episodes 332, 333, 334, 335, 336

BOOK - Built to Sell by John Warrillow

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

 

Direct download: RAM356.mp3
Category:general -- posted at: 6:00am CDT

Have you had the talk with your parents or loved ones? You know the one. Maybe it pertains to their driving or their finances, or it could be about their health or living situation. Whatever the conversation is about; it is uncomfortable for everyone involved. 

What if there was an easier way that you could address these subjects with your parents? On this episode of Retirement Answer Man, you’ll learn how you can talk to your parents or loved ones about the matters that are so important to discuss as they age. 

What is a caregiver?

Generally, when we think of a caregiver we think of a medical professional. (Someone other than ourselves.) However, a caregiver can include anyone who regularly looks after someone that needs help.

Caregiving can mean nursing, but it also means cooking, cleaning, paying the bills, etc. Most of the time the caregiver ends up being a family member. As a matter of fact, 29% of the population provides care for chronically ill family members and often those people spend 20 hours per week providing care. 

Creating an open dialogue is critical

We often wait until a big event happens to address important subjects with our parents, but that isn’t the most effective way to address uncomfortable subjects. Instead of waiting until the last minute to bring up a nursing home or another issue, try creating little conversations before a stressful situation arises.

Starting a dialogue early with your parents or family member creates an open space to address difficult subjects before they come up. Learn how to open up this conversation by listening to this episode of Retirement Answer Man. 

What should these conversations be about?

Now that you understand the need to have several smaller conversations with your parents rather than a big bombshell, it is important to think about the issues. What do you need to address? There are a number of issues that may arise: driving, finances, housing, health, safety, and cognitive abilities are all factors that may need to be addressed. Remember the earlier that you bring these matters up the better they will go. 

Tips for bringing these conversations to light

It can be challenging to bring up issues that you have never had to address with your parents or family members. Everyone is on their own journey in life and aging can impact one’s ego and sense of privacy. It is important to be empathetic and understanding of their journey. Here are some tips you can remember to help you make the most of the conversation: 

  1. Choose the right messenger.
  2. Use hypotheticals.
  3. Test the waters with little things.
  4. Bring solutions and resources
  5. Don’t give advice, guide them to the answers
  6. Listen - choose the right time and place
  7. Be empathetic, not condescending

After you listen in make sure that you are signed up for the 6-shot Saturday email newsletter to receive all the resources that go along with each episode. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [1:10] What is a caregiver?

PRACTICAL PLANNING SEGMENT

  • [4:43] Create an open dialogue
  • [7:00] What should these conversations be about?
  • [11:21] Tips for bringing these conversations to light

A RETIREMENT PLAN LIVE UPDATE

  • [21:16] An update with Emma
  • [29:20] How to say yes to things after a loss

TODAY’S SMART SPRINT SEGMENT

Resources Mentioned In This Episode

Episode 289 - Retirement Plan Live with Emma and Luca

BOOK - How to Say It to Seniors by David Solie

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

 

Direct download: RAM355.mp3
Category:general -- posted at: 6:00am CDT

Over the next 5 episodes, we’ll be tackling an important series that I call The Parent Project. No parent wants to be a burden to their children, but as longevity increases with advances in healthcare, your parents may need you to help them out as they age. Are you helping to care for a parent or an aging family member?

My goals for this series are to help you help a parent prepare for this stage of life, to help you prepare for this stage in your own life, and to share bits of wisdom along the way. You won’t want to miss this pertinent series, so press the play button now!

What is aging?

The word aging can be a noun or an adjective. Aging is both the process of getting older and a way to describe the signs of growing old. We all know that aging is a natural process that we go through, but that doesn’t mean that it’s fun. 

We are aging for a longer period of time due to health and medical advancements. We all go through 5 stages of aging -- although some may happen more quickly than others. The 5 stages of aging are independence, interdependence, dependence, crisis management, and end of life. 

6 ways that aging parents can impact your life

Diving into the parent project can have a big impact on your life. We want to honor our parents in this vulnerable part of their lives, but we also want to live our own life. Many of you are retired or on the cusp of retirement and caring for aging parents can greatly affect your retirement plans. These are 6 ways that aging parents could impact your life.

  1. Retirement date - You may delay your retirement due to your parents’ condition.
  2. Living arrangements - You may decide not to move or limit where you can live.
  3. Time - The bureaucracy of caregiving, court documents, and everything else can eat into your time.
  4. Psychologically - The psychological effects of caring for loved ones can lead to many feelings like guilt and disappointment.
  5. Finances - You may need to subsidize your parents’ care.
  6. Relationships - How are your relationships with your spouse and siblings affected?

What can David’s story teach you?

We have a saying over at the Rock Retirement Club, ‘walk with the wise to become wise.’ The RRC is a place to learn from each other to increase our understanding and gain knowledge of a topic. Since I’m not an expert on this topic, I have invited David to come on the show to share his story. 

David has recently dealt with the incapacitation and passing of his mother while also arranging for the care of his father. He learned a lot about the parent project along the way. Listen in to learn from his story so that you can start considering the different things to keep in mind as you and your parents age. 

As we work through the different topics over the next 5 episodes consider creating a file of resources for yourself. Sign up for 6-Shot Saturday to get FREE resources to help you prepare for your parents’ and your own aging process. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT’S THAT MEAN?

  • [3:07] What is aging?

PRACTICAL PLANNING SEGMENT

  • [6:39] 6 ways that aging parents can impact your life
  • [13:01] What can you do to ease the transition for your parents and for yourself?

AN INTERVIEW WITH DAVID

  • [14:37] How did David’s parent project start?
  • [22:08] How to broach the conversation of moving to a facility
  • [28:11] David knew that he needed an elder law attorney
  • [32:36] How has this event impacted his relationships?

TODAY’S SMART SPRINT SEGMENT

Resources Mentioned In This Episode

Caring.com

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM354.mp3
Category:general -- posted at: 6:00am CDT

This is a time of year when many people give thanks for what they have. On this episode of Retirement Answer Man, I explore the definition of thankfulness and gratitude with our Rock Retirement Club retirement coach, BW. He even brings us 5 tips that can help us to cultivate gratitude on a regular basis. 

Tanya Nichols joins me again to help answer listener questions. You’ll learn what you can do if you are worried about a market crash, what to do if you think you are too old for long-term care insurance, and we’ll discuss Roth conversions from a 403B. Press play now to join me to hear the answers to listener questions and more.

What are you thankful for?

The definitions of thankfulness and gratitude are very similar. Thankfulness is the consciousness of benefit received from others. Gratitude is a thankful appreciation for what an individual receives both tangible and intangible. 

One way to combat worry is to create a habit of thankfulness. I have done this personally and it has changed my life. Practicing gratitude contributes to greater happiness and it allows us to focus on what we have rather than what we lack. Listen in to hear what I am grateful for this year.

5 tips to help cultivate gratitude on a regular basis

Cultivating a gratitude practice can seem like a good idea but it often falls by the wayside after a few days or weeks. The beauty of practicing gratitude is that it shifts your mindset. You can use these 5 tips to help you become more thankful by creating your own practice of gratitude each day. 

  1. Write and send a thank you note to someone who has had an impact on your life each month.
  2. Get in the habit of saying thank you to at least one person each day. 
  3. Keep a gratitude journal. You get bonus points if you try and come up with different things to be thankful for each day.
  4. Pray. If you are religious, praying can help you cultivate gratitude.
  5. Meditate. Instead of focusing on your inner self, try focusing on gratitude in the moment.

Does sequence of return risk keep you up at night? 

The world around us seems so unstable right now. Many people worry that we could be at the start of the next big crash. What if we are at the beginning of several years of zero returns? Sequence of return risk is one of the biggest worries of those on the cusp of retirement.

Although people worry about sequence of return risk, if you look back at history and study bear markets, youĺl see that even within those years there were good years and bad years. It’s also good to remember that your portfolio won’t directly reflect the S&P 500, we simply use it as a planning tool. 

How to balance market risk against inflation risk

Why do we take market risk when we are worried about sequence of returns? Inflation! Inflation risk is just as big, but it creeps up slowly over time. You have to balance the risk of inflation with market risk. 

You can take market risk. You just have to know how much you are comfortable with. The first thing you need to do is understand the minimum effective dose of investment risk you need in order to create the life you want. Next, you’ll want to time segment your money by building your cash flow model early in retirement. Plan for statistically probable outcomes and then test for outliers. Listen in to hear the details of how you can protect yourself from both inflation risk and market risk.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [1:30] What is thankful?

PRACTICAL PLANNING SEGMENT

  • [5:02] Is Chris too old for long-term care insurance?
  • [8:11] A 403B and Roth conversion question
  • [12:12] A new learning experience as a couple
  • [14:06] What are the chances that the market crashes?

COACHES CORNER WITH BW

  • [22:09] Practice gratitude to improve your happiness
  • [26:17] 5 tips to help cultivate gratitude on a regular basis

TODAY’S SMART SPRINT SEGMENT

  • [30:16] Give yourself and everyone around you some grace this Thanksgiving

Resources Mentioned In This Episode

Align Financial

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM353.mp3
Category:general -- posted at: 6:00am CDT

There are so many things to take care of in retirement. It can all feel overwhelming. Many people worry about their jobs, the state of the world, retirement, and their uncertain future. On this episode of Retirement Answer Man, you’ll learn what you can do to ease your worries about the unknown as well as discover the answers to questions from listeners like you. Join Tanya Nicols and me as we answer questions about an early retirement package, what to do when you have a significant portion of your net worth in one stock, and how to use second to die life insurance.

What is worry?

Worry is a noun that means a state of anxiety and uncertainty over actual or potential problems. It can also be a verb meaning to give way to anxiety or unease.

Are you a worrier? Although worry is a healthy thing, oftentimes people allow their minds to dwell on difficulties or (perceived) troubles. There is a fine line between healthy worry and overwhelming worry. 

The fine line between healthy and unhealthy worry can be hard to walk

Just like how exercise creates stress in your muscles and grows them, worry can do the same to your mind. Worry can spur you into action causing you to improve your situation. However, worry taken to excess can be paralyzing. It can cause you to lose perspective so that you can no longer see clearly. You can’t let worry overwhelm you so much that it steals your life away. Listen in to hear what you can do to help ease your worries about the state of the world, life, and retirement. 

How do you perceive the wealth you have created?

It is often said that money is the root of all evil, but this isn’t true. The love of money is the root of evil. 

Do you feel guilty about the wealth you have created? Guilt is a common theme for many successful people. Many create an emotional attachment to their money. Rather than judging yourself for creating your wealth, use that wealth as a tool. How you use it is important. What will you do with your wealth to create an amazing life? 

What to do when you have a significant portion of your assets in one stock

One listener has ⅓ of her net worth tied up in one particular tech stock. She is looking for some guidance on how to handle this. 

A great question to ask is: what would happen to your net worth if that stock simply vanished? This question can get you thinking about how much you need to have a good life. Once you have thought deeply about your life then you can be methodical about this asset. Set a number to help guide you and don’t let taxes sway your decision. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [1:40] What is worry?

Q&A WITH TANYA NICHOLS

  • [10:56] How do you feel about your wealth?
  • [16:52] What to do when you have a significant portion of your assets in one stock?
  • [22:57] How to balance Social Security, taxes, and an early retirement package
  • [25:46] Second to die life insurance

TODAY’S SMART SPRINT SEGMENT

  • [30:47] Control your input

Resources Mentioned In This Episode

Align Financial

BOOK - The Daily Stoic by Ryan Holiday

BOOK - The Rational Optimist by Matt Ridley

BOOK - The Power of Agency by Anthony Rao

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM352.mp3
Category:general -- posted at: 6:00am CDT

Do you use an HSA? If not, you may want to start one after listening to this episode. Find out how you can use an HSA to help lessen healthcare costs in retirement and stick around to hear the answers to listener questions on this episode of Retirement Answer Man.

Are you trying to figure out how to deal with an unexpected retirement? Would you like to come on the show? We are looking for a volunteer for the next Retirement Plan Live coming up in January. If you would like some help in navigating your unexpected retirement head on over to RogerWhitney.com/rpl to put your name in the hat and potentially become our next case study for Retirement Plan Live. 

What is focus?

Focus is the act of concentrated activity on something. You choose where to place your focus in your life. 

What do you choose to focus on? Do you choose to focus on fear, problems, and all that could go wrong? Or do you choose to focus on the present and future excitement? 

When you focus on a problem does it seem huge and overwhelming? Or do you break that problem up into chunks so that you can determine what to do next? 

I like to say focus on the WHAM. Figure out what the problem is, how to do it, get accountability, take action, and achieve momentum. In your retirement planning, think about how you can shift your focus to best serve yourself.

Can you still contribute to a Roth IRA with only a 1099R?

One listener has a question about Roth IRA contributions. He is no longer working and receives a pension, but would still like to contribute to a Roth IRA since he is under the income limitations. 

Unfortunately, this isn’t allowed since the income must be ‘earned income’ according to the IRS. But the good news is, his wife can still contribute to his Roth IRA since he is considered a nonworking spouse. 

Learn the specifics of his question and the answer by listening to this episode of Retirement Answer Man. 

HSAs are like ‘SuperRoths’

Lynn wrote in to encourage us to discuss HSAs a bit more. This is a great idea since HSAs can be like ‘SuperRoths’. 

I knew I was missing out on having an HSA so when I was shopping for healthcare plans last year I specifically looked for a healthcare plan that was HSA compliant. With an HSA an individual can contribute $3500 per year and a family can contribute $7100. 

A great way to use an HSA for retirement healthcare costs

There are a few things that make an HSA is so fantastic. The money you put into an HSA is tax-deductible and the money you take out is tax-free. HSAs are also extremely flexible. You can pay your healthcare expenses out of pocket now and save the receipts for reimbursement any time you want to. Listen in to find out how you can use the HSA as a medical expense slush fund and grow it in the long term.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [1:42] What is focus?

PRACTICAL PLANNING SEGMENT

  • [11:26] Can you still contribute to a Roth IRA with only a 1099R?
  • [13:38] HSA’s in preretirement
  • [18:46] How valuable is 2 months of your life?
  • [22:26] Fire calc and inflation risks

TODAY’S SMART SPRINT SEGMENT

  • [29:37] Realize your focus

Resources Mentioned In This Episode

BOOK - The Rational Optimist by Matt Ridley

FireCalc.com

New Retirement Calculator

RogerWhitney.com/rpl

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM351.mp3
Category:general -- posted at: 6:00am CDT

November is finally here and Nichole is back! That means it’s time for listener questions. This month is my planning month where I take the time to map out the next year so that I’m not just drifting along. I try to be intentional about where the show is going and where my practice and life are going too. Listen in to hear what’s in store for 2021 on the Retirement Answer Man and find out the answers to several listener questions. 

How to balance enjoying life now with planning for later

A listener, who describes herself as being in the constrained category of retirement readiness, asks how she can balance enjoying her life now with saving for retirement. This is a question that everyone struggles with, even those that are overfunded. We all tend to think of saving for retirement like climbing a mountain. This climb is filled with sacrifice and denial of comfort and pleasure. 

I argue that we must change our mindset when it comes to retirement. We must stop thinking of retirement as a destination and start enjoying this never-ending journey now. 

It helps to map out your spending and separate it into 3 categories. Listen in to hear what those categories are and how you can map out your cash flow to make you feel more at ease about retirement. 

How to decide whether to take the full pension or the pension with survivor benefits

One listener is faced with yet another retirement decision. Soon he must decide whether to take a full pension or a lesser amount with survivor benefits. How should one decide what to do? Just like with the previous question, it’s important to build a model first. Map out your cashflow and test it out by using different scenarios. This will give you a good idea of how much you really need to live the life you want. 

When should my spouse collect Social Security if her benefit is based on mine?

Mark and his wife have calculated that she will collect a larger benefit it is based on her husband’s earnings rather than her own. Spousal benefits are 50% of the higher-earning partner. However, the secondary partner can’t claim their benefits until the primary spouse claims theirs. So if the primary beneficiary decides to wait until age 70 to collect their benefit, then the secondary must wait to collect as well. Listen in to discover what the secondary spouse can do in the meantime to start the cash flowing in. 

Julie is looking for a safe investment for her 5 years of cash reserves

Julie wants to have 5 years of cash reserves but would like that large chunk of money to be earning a bit as well. It is hard to find a way to do this right now with interest rates so low. High yielding money market accounts may only yield .5%. CD’s aren’t much better and range between .65% - 1%. Individual bonds also have terrible returns. I do have one suggestion if you don’t mind a bit of complexity and paperwork. Listen in to find out what it is. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [3:06] What is intention?

LISTENER QUESTIONS WITH NICHOLE

  • [11:20] How to balance enjoying life now with planning for later
  • [16:46] Deciding whether to take the full pension or the pension with survivor benefits
  • [19:40] When should my spouse collect Social Security if her benefit is based on mine?
  • [23:26] Julie is looking for a safe investment for her 5 years of cash reserves
  • [28:39] How to get a second set of eyes on his portfolio?

TODAY’S SMART SPRINT SEGMENT

  • [30:47] Look at your investment assets and see if they are giving distribution estimations so you can do some tax planning

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

 

Direct download: RAM350.mp3
Category:general -- posted at: 6:00am CDT

What do you do if you lose your job but you’re still not ready to retire? Whether it’s personally, professionally, or financially, if you’re not ready to retire then you’ll have to take action to find new employment. How do you fill that gap between this job loss and retirement? On this episode of Retirement Answer Man, we’ll brainstorm some ways that you can take action to find your next job. 

What happens to you when you lose your job?

Losing your job sucks. It never feels good to get pushed in a direction that you aren’t ready to take. It can zap your confidence even if the job loss had nothing to do with your performance. 

There are several things that happen when you lose your job. You lose your connections. You lose the rhythm of your life. You lose the intellectual challenge. And of course, you lose your income. 

Losing your job can make it feel like all your dreams have been zapped away. 

What next?

While it’s okay to have feelings of anger, sadness, and remorse, you don’t want to wallow in them. One outlet you can take is to journal. When I’m faced with a difficult situation, I like to get all my feelings out on paper. I essentially yell into the page. This form of release can even help me figure out what my next step will be. 

If you find yourself floundering and you don’t know what to do next, be sure to listen to episode 346 to discover some first steps to take when you lose your job. It’s important to start to get that forward momentum going so you don’t just sit there shellshocked. 

Ways to fill the income gap quickly

What if you are really strapped for cash and you need income right away? If you don’t have the cash reserves to wait out a lengthy job search there are several ways that you can start earning income quickly. 

  • File for unemployment
  • Register at temp agencies like Manpower. 
  • Declutter your house and sell things on OfferUp or eBay. 
  • Deliver groceries or food with UberEats or drive for Uber. 
  • Consider a job at Starbucks if you need health benefits.
  • Tutor online or teach English remotely

None of these are perfect solutions, but they can help you be proactive and gain forward momentum. 

How do you move forward in your job search?

The first step to take in your job search is to update your resume. It may have been a while since you have done so. Here are some tips for resume writing from an experienced HR professional:

  1. Look for keywords in the jobs that you want. Listen in to hear why your resume often won’t make it past the screening stage without these keywords.
  2. Have a base resume then tweak it to the specific job. Gone are the days when you only have one resume.
  3. Review resume examples for the job you want. 
  4. Make your resume simple and easy to read. 
  5. Focus on measurable accomplishments. 
  6. Put the most important information first and only use the last 10 years of your work history in your resume.
  7. Use these action verbs to help your resume stand out. 

Listen in to hear what you should do after you update your resume to help you take action and find your next job. Stick around until the end to hear the Coaches Corner segment with BW to learn about your changing relationships in retirement.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [3:52] What happens to you when you lose your job unexpectedly?
  • [10:02] Ways to fill the gap quickly 
  • [13:08] How do you move forward in your job search?

COACHES CORNER WITH BW

  • [20:20] Changing relationships with your spouse
  • [23:40] What can you do to help your relationship?
  • [28:12] Define your roles
  • [31:04] Communication is key

TODAY’S SMART SPRINT SEGMENT

  • [38:47] Pick a couple of ways to take action

Resources Mentioned In This Episode

139 Action Verbs

Episode 346 - 5 Things to do When You’re Suddenly Retired

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM349.mp3
Category:general -- posted at: 6:00am CDT

A result of the infamous year 2020 is that companies are looking left and right for ways to cut costs. One way many companies are trimming the fat is by offering early retirement packages to their most experienced team members. There are many questions you should ask yourself if you have received the offer of an early retirement package. Listen in to discover what you need to be thinking about in this situation. 

Even if you have been planning to retire you may not be ready just yet 

You may have been considering and planning your retirement for a while now. But even if you are well prepared for that future date, receiving an early retirement offer can still feel like you are being thrown a curveball. You may not feel like you are ready to pack it in just yet. Even after all of your planning, there is an internal struggle. 

What should you do if you are offered an early retirement package?

If you receive an early retirement offer you may have a limited amount of time to make your decision. The first thing you should do is seek counsel. Gather your team together. This should include your spouse and anyone whose opinion you value in these matters. Next, you’ll want to consider how the package can serve you. Will it simply move forward all the things you were planning?

Questions to consider before taking the package

There are many questions you should consider before coming to a decision. How will this package affect your benefits like pension, life insurance, and your vestedness within the company? How will it affect your healthcare options? Filling the gap between workplace provided health insurance and Medicare is the biggest challenge of early retirement. Listen in to hear all the questions to ask yourself if you are offered an early retirement package. 

What if you’re still not ready to retire? 

What should you ask yourself if you say no? Do you want to continue and stay in your role at the company? If you do, what will that look like? Will your job become harder? If you don’t accept the package will that affect workplace politics? 

Before you come to any decision you need to make sure that you have a feasible plan in place. If you aren’t sure how to create that plan, consider joining the Rock Retirement Club. We have a masterclass where we teach you how to build a plan that is designed just for you. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [5:07] What should you ask yourself if you receive an early retirement package offer?

Q&A SEGMENT

  • [16:08] A question from a listener that received an early buyout package
  • [21:24] A suggestion for a series theme
  • [22:35] How to migrate to a more balanced portfolio
  • [24:20] A bond index question

TODAY’S SMART SPRINT SEGMENT

  • [29:46] Work on your retirement planning project

Resources Mentioned In This Episode

The Pie Cake episode

The bond series - Start here

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM348.mp3
Category:general -- posted at: 6:00am CDT

Retirement brings an onslaught of life-changing choices, so one thing you can do to help you rock retirement is to become a better decision-maker. If you are wondering how you can do that, then you’ll want to listen to this interview with Annie Duke. Annie Duke is the author of Thinking in Bets and she just released a new book called How to Decide. She knows that people can improve the quality of their decisions and she’s here to teach us how. Press play to learn how you can make better decisions so that you can rock your retirement. 

There are 2 things that create a great life

There are only 2 things that determine the way your life turns out: luck and the quality of your decisions. You don’t have any control over the luck part, but you do have control over the quality of your decisions. It is important to acknowledge that luck has a role to play in the quality of your life. Once you have come to terms with that then you can focus on improving the quality of your decisions. 

Decisions are made with incomplete information

Unfortunately, this isn’t a perfect world where you have all the information needed to choose wisely. There are so many unknown factors that affect your choices, so how can you possibly choose correctly? Uncertainty, luck, and imperfect information all impact our decisions. But rather than being paralyzed by these factors, you can use probability to help you. 

Think about how you can get more information. Most of the time we are making our decisions behind a veil of ignorance. This is why it is so important to ask questions. When you ask you are doing something, you are improving your data set. Gain some information but don’t become overwhelmed with information overload. Set some parameters to help guide you in your decision making. 

Have you defined your values and goals? 

Before making any major life choices you’ll want to have a clear understanding of your values and your goals. Having well-defined values and goals can help you choose. Think about how positive or negative results of your decisions will move you toward your goals. 

Don’t just go with your gut

So many people use their guts to make decisions, but the gut is not the right tool to use. You can’t measure it. You want to make sure that you use a process, strategy, and tactics to help you decide. It’s also important to examine your decision making by going back and reflecting on your decisions. Learn why this is so important in this interview with Annie Duke. 

If listening to this episode wasn’t enough and you want to learn more about making better decisions, then make sure you’re signed up for the 6 Shot Saturday newsletter to receive a free chapter of Annie’s new book, How to Decide. You’ll also get an invite for the webinar taking place on October 29 at 7 pm CDT.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [3:32] There are 2 things that create a great life
  • [6:02] Are high stakes decisions more important than smaller decisions?
  • [12:50] How we judge decisions
  • [21:37] Don’t just go with your gut
  • [27:40] What hindsight can teach us
  • [33:48] A thought experiment
  • [44:23] Use decision tools to help you

TODAY’S SMART SPRINT SEGMENT

  • [48:03] Sign up for 6-Shot Saturday to get a FREE chapter of How to Decide

Resources Mentioned In This Episode

BOOK - How to Decide by Annie Duke

BOOK - Thinking in Bets by Annie Duke

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM347.mp3
Category:general -- posted at: 6:00am CDT

The Coronavirus pandemic has brought about so many disruptions to our daily lives. In addition to all the health precautions we must take, many of us have had to deal with job loss as well. Whether it was a furlough, layoff, or early retirement, the results are the same. You used to be working and now you’re not. During this entire month, we will discuss what you can do when you are retired unexpectedly. On this episode, you’ll learn 5 things you can do when you are suddenly retired.

What is triage? 

Triage means assigning priority to projects based on where resources can be best used in order to increase the likelihood of success. We often hear the term triage in medical circumstances, but we can use it with financial situations as well. 

The first thing to do to triage a situation is to assess where you are. Once you do that you can determine what to do first. When life throws you a curveball triage your state of affairs before reacting. 

5 things you need to do if you are pulled into retirement

When you receive notice that you’ve been laid off or even if you are offered an early retirement package it can feel like the bottom has dropped out from under you. Before you can figure out your next move you need to give yourself some breathing room to contemplate the change. You can follow these 5 steps to give yourself the structure you need to move forward. 

  1. Get organized. You need to take stock of your financial life. Understand your spending. How much money do you need each month? Take some time to map out the monthly debts you owe yourself over the next 12 months. This step will help you get back on your feet. 
  2. Check your liquidity. Next you’ll want to map out your income sources for the year. This will help you figure out the deficit between your expenditures and revenue. This is also a good time to reorganize your financial assets and refresh your net worth statement.
  3. Reassess what is important to you. Are your priorities in order? Now is a good time to revisit what those priorities are and to make sure that your life is a reflection of those priorities.
  4. Gather your team. Now is the time to seek counsel. Talk to your spouse, your advisor, your CPA, and good friends whose opinion you value. It can be hard to gain perspective from where you sit, so having another opinion can help you see things from a different point of view. 
  5. Determine what to do first. This is the step that most people get stuck on. There are so many decisions to make that it can be overwhelming. Choose one thing to do first, then move on to the next. Don’t try to do everything all at once. 

Don’t miss the upcoming webinar!

Following these steps can help you take control of your circumstances and ultimately make better decisions. If you have been unexpectedly retired recently you won’t want to miss the webinar on October 29 at 9 pm. Make sure you are signed up for the 6-Shot Saturday newsletter to get your invitation. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [4:06] What is triage?

PRACTICAL PLANNING SEGMENT

  • [7:10] 5 things you need to do first if you are pushed into unexpected retirement
  • [21:42] Figure out the next version of you
  • [25:20] Join our live webinar on October 29 at 7 pm central

Q&A SEGMENT

  • [26:35] The pros and cons of choosing a certain month to retire
  • [31:02] What to do about an early retirement package?

TODAY’S SMART SPRINT SEGMENT

  • [36:09] Try being consciously incompetent

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM346_1.mp3
Category:general -- posted at: 6:00am CDT

The retirement decisions that you make today will impact you for years to come. This can be a scary thought since we don’t know what the future holds. The Medicare decisions that you make now can affect your future self so you don’t want to take these decisions lightly.

For the past 4 episodes, we have discussed the inner workings of the Medicare system which has given us a good basis of knowledge to work from. Danielle Roberts from Boomer Benefits joins us one last time to help us understand how to make Medicare decisions. 

The retirement choices you make now will affect you for years to come

Choosing a Medicare plan is one of the most important and long-lasting choices that you will make in retirement. It’s hard to make these choices that will affect our future selves who may not be as healthy or alert as we are now. It is important to strike a balance between overanalyzing this decision and not analyzing it enough. 

How to start to make your Medicare decision

Thankfully Danielle Roberts has returned to the show with her sage advice on how we can begin to make these choices. She recommends a few things to help you narrow down your choices. 

First off, start your research early. (Listening to this How Does Medicare Work series is a good start.)

Next, you need to decide whether to choose a Medigap or Medicare advantage plan. To help with this decision, start at your doctor’s office. You’ll need to ask whether they accept original Medicare. If they do this means that they accept Medigap plans. Then you’ll want to find out whether they participate in any Medicare Advantage plans. 

There are many questions that come with Medicare

You’ll start thinking of more questions that you want to ask your doctor as you learn more about Medicare so start creating your list of questions to ask your doctor now. 

There are a lot of considerations when deciding between Medigap or Medicare Advantage. Do you have a lot of different doctors? Do you want inexpensive copays? Do you have the money set aside to afford large deductibles or hospital stays down the road? 

Consider your future self when making you Medicare decisions

It’s easy to choose what’s right for today rather than considering your future self. Ask yourself if you are going to be ok with this coverage not just now, but if you have a year where you aren’t as healthy. Don’t be afraid to ask questions. Sleep on it to see if you have a few more questions. 

You may want to consider using a broker like Boomer Benefits. Since they are a brokerage there is no cost to the consumer. All costs are worked into the insurance plans. Learn more about the whole Medicare system by listening to the entire How Does Medicare Work series. This will help you make the right Medicare decisions. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:03] The latest happenings of the Retirement Answer Man show

PRACTICAL PLANNING SEGMENT

  • [9:20] How to make good Medicare decisions
  • [15:30] Should you ask a specialist the same questions you ask your primary care doctor?
  • [21:04] Know the risks of each plan that you are considering
  • [23:08] What about dental and vision plans?
  • [25:46] What are the benefits of using a brokerage?

COACHES CORNER WITH B.W. 

  • [30:21] Don’t you let your life shrink in retirement

TODAY’S SMART SPRINT SEGMENT

  • [39:43] What are you doing to expand yourself?

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM345.mp3
Category:general -- posted at: 6:00am CDT

Danielle Roberts from Boomer Benefits joins The Retirement Answer Man Show again to help us understand the nuances of the Medicare system. She has a new book coming out soon called 10 Costly Medicare Mistakes that you won’t want to miss. In this episode, you’ll learn from Medicare horror stories, the biggest mistakes you can make with Medicare, and why you need to check your plan every year. Make sure to sign up for 6 Shot Saturday to get free resources by Danielle Roberts, our Medicare expert!

Make sure you are prepared to jump into retirement

Sometimes retirement can come at you suddenly. Are you ready to jump into retirement? You may be suddenly thrust into this whole new world. However, for others, retirement can seem like a cliff where they are standing on the edge. It can be hard to take that leap; some people end up waiting and waiting forever for the right time to jump. Educating yourself and planning ahead can help you prepare for retirement. Listening to Retirement Answer Man can help you prepare to take that leap into this amazing new world. 

Will dropping Medicare Part D help this listener eliminate IRMAA?

One listener got a notification in the mail that he would be charged an IRMAA surcharge for his Medicare Part B and D plans. Since he uses a discount drug plan apart from Medicare Part D he was just thinking of dropping Medicare Part D altogether.

He can drop Part D and forgo the IRMAA surcharge on that plan, however, doing so will mean that he has to wait until the next election period if he decides he wants back into the program. Additionally, he will then have to pay a penalty for each month that he went without the Part D drug plan. Listen in to learn how much that penalty is and discover a Medicare mistake that you won’t want to make. 

Biggest medicare mistake

Medicare is a tricky system to learn, especially if you haven’t done any research. The biggest mistake you can make is waiting until the last minute to learn about this healthcare system. Danielle shares that there are many people who are under the impression that Medicare is free and then are shocked to learn that they don’t have enough money saved to cover their healthcare expenses in retirement. Make sure that you don’t make this mistake. Listen to the entirety of the How Does Medicare Work series to help you begin to learn the intricacies of the Medicare system. 

Check your plan every year

Medicare has so many different ‘open enrollment’ periods so it can be confusing to know which ones are the most important. Your plan will change from year to year, so when you get a packet in the mail in the fall pay careful attention to the changes. You can also check your plan changes at MyMedicare.gov and use the plan finder tool to compare your plan with different plans. Don’t miss it when Danielle explains why it is so important to check the different plans that are offered from year to year. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [1:33] How retirement is similar to hang gliding

PRACTICAL PLANNING SEGMENT

  • [9:08] Will dropping Medicare Part D help this listener eliminate IRMAA?
  • [13:35] The biggest Medicare mistake
  • [15:22] Did your job prevent you from paying into Medicare?
  • [17:57] Medicare horror stories
  • [22:19] Why it is important to check your plan every year
  • [26:37] Danielle shares her biggest pet peeve

Q&A SEGMENT

  • [30:22] To an RV finance or not to finance 
  • [35:54] Renting in retirement?

TODAY’S SMART SPRINT SEGMENT

  • [39:03] What will it take to make you jump into retirement?

Resources Mentioned In This Episode

BOOK - 10 Costly Medicare Mistakes by Danielle Roberts

Boomer Benefits

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Direct download: RAM344.mp3
Category:general -- posted at: 6:00am CDT