Retirement Answer Man

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

Over the past few weeks, we have talked about the different pieces that make up our Medicare system. Medicare is a fairly complex system with a lot of nuances to be aware of. One of the things you may have noticed is that there are some gaps in Medicare coverage. Today Danielle Roberts from Boomer Benefits is back to help us understand these gaps and what we can do to fill them. 

Medicare isn’t the only place we see gaps in retirement. Often time there are other places where we have gaps in our retirement planning. Listen in to discover how to fill these gaps in Medicare and elsewhere in retirement. 

Analyze your gaps in retirement

In project management, there is something called gap analysis which helps project managers identify gaps. Gap analysis has 5 basic steps. 

  1. Identify the area to be analyzed and identify the goals to be accomplished in that area.
  2. Establish an ideal future state. What is the ideal outcome?
  3. Analyze the current state. What is it like now? 
  4. Compare the ideal state to the current state, 
  5. Identify the gap between the current state and the ideal state so that you can begin to close that gap.

Gaps in retirement planning

In retirement planning, people often skip step 2 when analyzing their own gaps. Rather than identify the ideal state for their retirement, they only analyze their current state. I argue that the project management method of gap analysis is a much better way to approach retirement. 

When you first establish what your ideal retirement will look like and then figure out the rest you start with a blank slate. Isn’t that what you are looking for in retirement? Learn how you can start your retirement off right. Start with a blank slate rather than limit yourself by where you are currently. 

Filling the gaps that Medicare leaves

If you have been listening to the past few episodes, you probably noticed that there are some gaps in the Medicare system. If you have been wondering how to fill those gaps, then you’ll definitely want to listen to one of the top Medicare experts in the country, Danielle Roberts, from Boomer Benefits. 

Medigap and Medicare Advantage plans

There is a difference between traditional Medigap plans and newer Medicare Advantage plans. Medigap plans are generally more expensive but they offer more flexibility and a wider variety of plan choices. Medicare Advantage plans cost less and sometimes they are even free, however, these plans come with many more limitations. These plans are gaining popularity over the past few years. Listen to Danielle’s expert analysis of these different types of plans to help you decide the best way to supplement your Medicare coverage. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT’S THAT MEAN?

  • [1:48] What is a gap?

PRACTICAL PLANNING SEGMENT

  • [6:43] Check out Danielle’s new book!
  • [8:22] How does Medigap insurance work?
  • [14:29] What you need to consider when choosing a Medigap provider
  • [19:08] What do Medigap plans cost?
  • [25:30] What is a Medicare Advantage plan?
  • [31:16] How does Medicare work while traveling?

Q&A SEGMENT

  • [35:25] You could lose your coverage if you are still working
  • [36:52] A Roth 401K question

TODAY’S SMART SPRINT SEGMENT

  • [45:49] Let me know if you are experiencing challenges in unexpected retirement

Resources Mentioned In This Episode

BOOK - 10 Costly Medicare Mistakes You Can’t Afford to Make 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: RAM343.mp3
Category:general -- posted at: 12:19pm CDT

Medicare Part D has similarities and differences to Parts A and B. On this episode of our How Does Medicare Work? series, we’ll explore Part D. We’ll also discuss what Medicare doesn’t cover. How much do you know about Medicare and how it works? Are you trying to figure out how this new type of insurance will be different from what you are used to? Make sure to listen to the whole series to help you understand the changes that enrolling in Medicare will bring to your life. 

Live a life without regret

The number one regret that people have upon death is that they say they wish they would have had the courage to live a life true to themselves. During most of our lives, we have a series of obligations that make it hard to really live a life true to ourselves. Retirement is a time when we can finally shed those obligations. What will it take for you to live a life without regrets? Think about what living a life that is true to yourself really means for you. 

What is Medicare part D?

Danielle from Boomer Benefits joins me again today to help us understand Medicare part D. Danielle has a knack for explaining the complexities of Medicare in a way that laypeople can understand.

Medicare part D is the prescription drug coverage portion of Medicare. It actually wasn’t rolled out until 2006. Since prescription drug coverage wasn’t typically covered in the 1960s, it wasn’t included in the original Medicare plans. Can you imagine what Medicare was like before Part D?

How does Medicare Part D work?

Medicare Part D is a bit different than parts A and B but it does have some similarities. It’s a voluntary plan that you have to opt into. But unlike parts A and B, you don’t enroll in part D at the Social Security office. Each state has private insurance companies that offer Medicare part D. 

Just like Medicare parts A and B, there are 4 stages to the plan. The first is the deductible. There is a deductible set by Medicare each year and the drug companies are allowed to build that into their plan how they choose as long as it is within the parameters. After your deductible has been met then you’ll move into the second stage of the plan which is the copay. Listen in to discover how Medicare part D works and why your choice in pharmacy could really affect your drug costs. 

Where are the gaps in Medicare?

Medicare isn’t perfect, there are still gaps to consider. We are often used to our employer-sponsor health plans covering dental and vision, but along with hearing, these services aren’t covered under Medicare. In a subsequent episode, we will discuss the Advantage plans that can help you bridge these gaps. 

It’s also important to remember that Medicare doesn’t pay for long-term care. To ensure that you are fully prepared, you’ll have to plan on how you’ll handle a long-term care event. Discover why it is important to review your Medicare plan each year by listening to Danielle on this episode of Retirement Answer Man.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT’S THAT MEAN?

  • [1:32] Let’s define regret

PRACTICAL PLANNING SEGMENT

  • [5:24] Part D is a relatively new option
  • [7:12] How does Medicare Part D work?
  • [15:34] What is the total out of pocket you could pay? 
  • [19:32] Are there drug assistance programs within Medicare part D?
  • [20:33] Where are the gaps in Medicare?

Q&A

  • [29:12] How to fund a special needs trust?
  • [31:31] What is the benchmark for decide when there is a gain or loss to fill your bucket?
  • [35:52] How to easily settle an estate

TODAY’S SMART SPRINT SEGMENT

  • [38:35] What does being true to yourself really mean?

Resources Mentioned In This Episode

The Pie Cake episode

Long term care episodes - Start here

MyMedicare.gov

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: RAM432.mp3
Category:general -- posted at: 6:00am CDT

I cannot believe that this is our first time doing a monthlong series on Medicare! Thankfully, this is a five-week month, so we can really dive deep into this complex topic. Let me lay out the month for you. This week we’re talking about Medicare Part A and B. During the next episode we’ll discuss part D and all the things that Medicare doesn’t cover. Following that episode, we’ll discuss Medigap and Medicare Advantage as well as mistakes we can make with Medicare. Finally, we will dive in deep to help build a framework that we can use to best serve ourselves when it comes to Medicare. Are you ready to start your Medicare learning journey? Press play to start your Medicare education now. 

How does Medicare work?

Danielle K. Roberts is a Medicare expert from Boomer Benefits. She helps people educate people on their Medicare journey all the time and she has even helped out in the Rock Retirement Club. I have invited her on the show to help all of us better understand Medicare. Today she is helping us learn about Medicare Part A and B. Medicare benefits can be so confusing, especially since most of us are coming from a completely different system of insurance. Are you ready to hear what is covered, what is not covered, what requires copays, and if you can ever fully exhaust your benefits? Well then, start listening now.

What is Medicare Part A?

Medicare Part A started in the 1960s and was modeled after the old Blue Cross Blue Shield health insurance. Part A covers inpatient hospital stays and outpatient medical care related to a hospital stay. Included in Part A coverage are the hospital room, doctors, nurses, drugs, nursing facility visits, and hospice care. Medicare Part A does have its limits in coverage which could result in expensive copays and eventually exhausting the benefits fully. Listen in to find out what those limits are. 

What is Part B?

Whereas Medicare Part A covers your hospital stays, Part B covers all that other stuff. For example, Part B covers chemotherapy, radiation, blood work, and doctor visits. However, Part B has a completely different deductible and coinsurance setup than Part A. The good news is that the deductible is only $198. The bad news is that there is no cap on the 20% coinsurance. 

Who do you pay? 

Doctors’ visits can be so confusing. Should you pay the doctor at the time of your visit? Should you wait for the bill to come in the mail? What about those statements that Medicare sends? Danielle’s advice is to wait for Medicare to process the doctor’s bill before you pay. The doctor will then bill you if there are any excess fees. She also advises to ask plenty of questions and become an advocate for yourself. Even though Medicare can seem confusing at first, this system has been in place for a long time and actually runs quite well. 

If you are interested in receiving resources to help you make your own Medicare decisions, sign up for 6-Shot Saturday at RogerWhitney.com

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [1:13] What is fear?

PRACTICAL PLANNING SEGMENT

  • [5:05] Our plan for the month
  • [7:14] What is Medicare Part A?
  • [11:30] What should people be aware of?
  • [13:32] What is Part B?
  • [16:12] Who do I pay?

Q&A SEGMENT

  • [26:58] Place yourself in the future when making a decision
  • [31:02] A Social Security survivor benefit question
  • [33:34] Comparing a first position HELOC instead of a mortgage

TODAY’S SMART SPRINT SEGMENT

  • [43:09] Sign up for 6-Shot Saturday at RogerWhitney.com to get a Medicare resource packet

Resources Mentioned In This Episode

Boomer Benefits

MyMedicare.gov

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: RAM341.mp3
Category:general -- posted at: 6:00am CDT

This whole month of August we have talked about improving decision making. Retirement brings about hundreds of choices. If you aren’t well-prepared to make those decisions you might simply revert to the default choice. Do you really want your retirement to be set to default? In this episode, you’ll learn how to create a framework to make tactical decisions. If you’re ready to learn how to make decisions that will help you rock retirement then press play now.

What is the difference between strategy and tactics?

A strategy is an overarching plan to help you achieve the kind of life you envision for yourself. Strategies don’t change very often. Tactics are the specific actions or steps you take to accomplish the strategy create an amazing life. This sequence can be hard to achieve because we often jump straight to the tactical decisions without thinking about the strategy first. It’s important to keep in mind your strategy first. Have you thought about the strategy that you want to use to create the retirement of your dreams?

Retirement changes the trajectory of your life

The trajectory of your life is changing in retirement. Your life is coming off autopilot and so that leads to hundreds of small decisions. It can be hard to adjust to making all these new decisions, we often just resort to the default choice. But if you can change the way you make decisions it can have a huge impact on your life. Think about the butterfly effect that has led to the life you live right now. One tiny change in the state of your life can really make an impact in the long term. If you are wondering how you can improve your decision-making press play to hear how. 

Use a process-strategy-tactics approach

Before learning to make tactical decisions it is important to have some other things in place before jumping into making decisions. It is important to start with your values. Once you have a clear vision of your values then you can set goals that align with those values. After you have clear goals in place then you can develop a strategy to achieve your goals. Finally, within that strategy come the tactics. You’ll use these tactics to execute the strategy to achieve your goals that are in line with your values. 

How do you make tactical decisions?

Once you have your goals and strategy in place you can make the most of your decisions by using this decision-making framework. Ask yourself these questions before making any decisions. Try it out on small decisions first before jumping into the bigger ones. 

  • What is your objective? 
  • What does success look like after you make the decision?
  • What is the ideal outcome if you make this decision? 
  • What is the worst-case scenario?
  • What are the consequences of the decision? 
  • What are the effects of this decision? Test it out. Use first-order and second-order thinking tease out what those effects might be.

Listen in to hear how some real-life retirement decisions could play out using this framework. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [1:20] What is the difference between strategy and tactics?

PRACTICAL PLANNING SEGMENT

  • [5:50] If you can get just a little better at making tactical decisions it can have a huge impact on your life
  • [9:52] How do you make tactical decisions?
  • [16:45] A framework for tactical decision making

COACHES CORNER

  • [24:44] Choosing leisure activities to add spice to your retirement

TODAY’S SMART SPRINT SEGMENT

  • [35:31] Test out this decision-making framework

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: RAM340.mp3
Category:general -- posted at: 6:00am CDT

We’ve been talking about decision making for the past several episodes and today I want to help you build a framework to rely upon when making decisions in retirement. This framework for better decision making will help ensure that you are living the life you really want. If you are ready to create a strategy that reflects your values so that you can rock retirement then press play now. 

Why do you need to build a decision-making framework?

Have you really thought about your values? A person’s values are their principles or standards of behavior. Values are what you feel is important to your life. If you want to build a retirement and a life that you love then you need to live a life that reflects your values. The life that you lead is based on the decisions that you make. So if you want to enjoy a life that stays true to your values you need to put some thought into the decisions that you make. Having a decision making framework in place will help you stay true to your values. 

How to create a strategy that reflects your values

So now you know why you need a decision-making framework, but how do you build one? You can create a strategy that reflects your values in just 4 easy steps. 

  1. Step one is easy to remember. Start with your values! Before you can begin to build your framework you need to establish what is important in your life. What are your values?
  2. Create a vision of what you want your life to look like. This may sound a bit cheesy, but try and picture what you want your life to look like. It doesn’t have to be perfect. It just has to be important to you. Try asking yourself this question: at the end of your life what would make you think that your life was amazing?
  3. What’s your mission? This question leads to the how. How you are going to achieve your vision? 
  4. Create strategic objectives that follow your mission. What strategic objectives will you focus on first? How will you focus on your mission?

Build your decision-making framework today. 

That’s it! Your framework can be as detailed or loose as you need it to be. But if you start taking these 4 steps you can build the strategy to make decisions that will reflect your values. Stay true to yourself and rock your retirement by creating a decision making strategy that you can implement. The ideal framework will reflect your values and set you up to live a life you truly love.

Some real-life examples

If you are curious about how these steps play out in the real world listen in to hear a couple of examples. You’ll discover how I started my firm and how my values are reflected in what I do. You will also hear how this strategy can be applied to life in retirement. You also want to listen in to hear Tanya Nichols help me answer some listener questions. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT’S THAT MEAN?

  • [1:31] Values are your judgment of what is important to you

PRACTICAL PLANNING SEGMENT

  • [4:31] Build your framework
  • [6:30] Some examples of building a framework
  • [9:44] An example of how you can build your framework in retirement 

Q&A SEGMENT WITH TANYA NICHOLS

  • [12:28] What is the best and worst decision Tanya has made
  • [15:21] Does it make sense to have a trust as a beneficiary?
  • [17:52] How to predict taxable investment income from year to year
  • [26:55] What is a good strategy for asset allocation after taxes?

TODAY’S SMART SPRINT SEGMENT

  • [34:12] Sign up for 6 shot Saturday to help you figure out your top 10 values

Resources Mentioned In This Episode

Holistiplan

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: RAM339.mp3
Category:general -- posted at: 6:00am CDT

What is your retirement strategy? Do you have one? A strategy is born from a process and tactics are born from that strategy. This is why it is so important to make sure that you have a process and strategy in place when planning for retirement. Your strategy will help you drive those important decisions. 

Your decisions during the accumulation phase of life were much different than they will be in retirement. This is why I’ve got Dan Miller joining me to discuss his book 48 Days to the Work and Life You Love

Why did Dan decide to change the title of his book?

Dan Miller recently changed the title of his best-selling book from 48 Days to the Work You Love to 48 Days to the Work and Life You Love. He changed the title to reflect the fact that work is just one tool in a successful life. What people really want is a successful life. His book can help you discover what drives you and how to dig in and strive toward building a life you love. 

Why 48 days?

Dan mentions that although 48 is a somewhat arbitrary number, it is enough time to get you on the road to change your life. No, it isn’t scientifically tested, but if you work at it those 48 days can give you a roadmap to build a life you love. It is enough time to assess where you are, create a plan, and act on it. When making decisions and changes in your life it is important to have constraints. It is much too easy to sit back on your heals and wait for changes to act upon you. By setting a deadline of 48 days you are able to take control of your life. 

How do you deal with your identity when you leave your work behind? 

Our identities are so wrapped up in the titles of our jobs. In retirement or upon leaving any job, it can often feel like we are leaving our identity behind. But this shouldn’t be the case. Who you are should include more than just the work that you do. I

t is important to realize the difference between these three things: vocation, career, and job. Your vocation is who you want to be remembered for, this should include your mission, your purpose, your destiny, and your calling. Your career is simply a subset of that vocation. Your job has an even smaller role; it is just what you do from day to day. 

So, what is your identity? How do you define your vocation?

There are 3 main problems in retirement

In retirement, three of the biggest problems that people experience are no friends, no money, and no purpose. The lack of money and friends can easily be changed, but what about the lack of purpose. It’s important to really define what your purpose is and what it will be in retirement. You can use your background, training, and network to help you figure out what you really want to do, who you really want to be in retirement. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [7:31] Why did Dan Miller decide to change the title of his book?
  • [12:12] Why is there a deadline of 48 days?
  • [16:20] How do you deal with your identity when you leave your work?
  • [27:32] Procrastination is the enemy of change

Q&A SEGMENT WITH FRITZ GILBERT

  • [34:07] Fritz’s spending process in retirement
  • [40:40] An planned early retirement question
  • [52:35] Should they stop saving in pretax assets
  • [57:30] A five year ladder strategy question

TODAY’S SMART SPRINT SEGMENT

  • [1:09:45] Do you have a strategy in place?

Resources Mentioned In This Episode

Episode 45 - Can Carl Retire?

Retirement Manifesto Resources

48Days.com/Roger

BOOK - 48 Days to the Work and Life You Love by Dan Miller

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: RAM338.mp3
Category:general -- posted at: 6:00am CDT

I’m excited to share with you this next series of episodes. Over the next 4 episodes, we will explore how to make better decisions for yourself in retirement. Today we’ll examine what a decision is and think about all the different choices you have to make in retirement. Learn how to evaluate your decision-making process and discover how to make better retirement choices on this episode of Retirement Answer Man.

Decision fatigue can wear you down

Every day we are faced with so many choices. Have you ever looked at the number of different kinds of toothpaste there are to choose from? Even that small choice is overwhelming. 

If you don’t have a framework in place to help you make decisions you can easily get worn down. This type of exhaustion is called decision fatigue. The more decisions you have to make the more your willpower becomes depleted. When decision fatigue sets in people often turn to the choices they have always chosen in the past. What do you do when you become overwhelmed by choices?

There are so many decisions you face in retirement

Think about all the decisions you need to make surrounding retirement. 

When are you going to retire? Will you retire fully or ease into it? What will your spending look like? How will you create a paycheck for yourself? How will you protect against inflation? How will you pay taxes? Who will you spend your time with? Where do you want to live? 

The list goes on and on. 

And with each of those big decisions a decision tree with massive roots and limbs sprouts with new questions. It becomes easier to simply ignore all of those retirement choices and stick with the status quo.

Is there a better way to make decisions? 

The goal of this series is to help you build a framework to harness decisions. You’ll learn how to make good incremental decisions so that you don’t become overwhelmed. You’ll discover how to focus on the right decisions, the ones that really impact your life. You will develop a structure to get to the result that serves you the best. As a result, this framework will help you improve the quality of your life in retirement. 

Are you ready to learn how to start making better decisions? Don’t miss this series, it could change the course of your life in retirement!

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT'S THAT MEAN?

  • [2:16] What is a decision?

PRACTICAL PLANNING SEGMENT

  • [3:55] There are so many choices to make
  • [9:04] Set some rules to combat decision fatigue

Q&A WITH CHAD SMITH

  • [16:10] What is the Financial Symmetry podcast about?
  • [18:12] Does it make sense to have a high yield savings account?
  • [27:45] How you can access webinar replays
  • [28:41] What about the SWAN ETFs?
  • [37:36] Jane did a direct transfer from a 401K to an IRA
  • [41:16] What’s on Financial Symmetry this month?

TODAY’S SMART SPRINT SEGMENT

  • [42:30] Premake one decision for yourself

Resources Mentioned In This Episode

PODCAST - Financial Symmetry with Chad Smith

BOOK - The Behavioral Investor by Dr. Dan Crosby

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: RAM337.mp3
Category:general -- posted at: 6:00am CDT

Have you ever had to deal with closing an estate? Mark Ross happens to have the unfortunate experience of helping to close out 4 different estates in a short period of time. Since experience is the best teacher, Mark joins me today to discuss his experience with the probate process. He’ll share how he dealt with his feelings during the process, how long it took, how he managed, and what he thinks you can do to organize your own estate. Give your heirs the gift of an organized estate by learning all you can now to help ease the probate process.

Organization can be a gift to your heirs

In helping to close out 4 different estates in a short amount of time, Mark Ross learned a lot about the differing levels of organization in estate planning. Probate is a long and complicated process that can be even more challenging if you don’t have all of the pieces of the puzzle. Mark learned that when an estate is well organized the process is so much easier. He feels like that organization was a gift that helped him through the probate process. 

How should you organize your own estate plan?

Mark’s main piece of advice in organizing your own estate plan is to get an attorney that is a good fit for you and your personality. He also recommends that you keep meticulous records of all conversations regarding your estate. 

Since family dynamics can play a role when money is involved it is important to be clear about the flow of money. 

One last piece of advice he has is to never be a coexecutor. He found that that situation could drag out the emotional journey even longer than it needs to be. An executor needs to be able to have the accountability to make difficult decisions. 

How organized is your estate plan? Is it updated to reflect your current situation?

3 things you can do to gain confidence in your financial plan in retirement

If you don’t have confidence in your financial plan you won’t be happy in retirement. There are 3 things you can do to gain more confidence in your plan. 

  1. Understand how your financial plan reflects your personality. There are a couple of different ways that you can go about planning your finances in retirement. With a probability-based or investment based plan, you will have a portfolio that generates enough income to live on. The second style is the safety-first style. This means having your basic expenses covered by guaranteed income like social security or a pension.

    These two very different planning styles optimize for different things. Make sure the style you choose to follow reflects your personality. 

  2. Educate yourself. Many families have one who invests and the other doesn’t. Both partners need to be educated to have enough understanding to be confident in the financial plan. Hope isn’t good enough. Get a plan you are both comfortable and have confidence in.

  3. Have an emergency fund and a “fun” fund. Sure, this is just a psychological trick but it could give you peace of mind. 

How confident are you in your retirement plan?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT’S THAT MEAN?

  • [2:07] What is the difference between information and knowledge?

PRACTICAL PLANNING SEGMENT

  • [7:41] How do you balance the obligations of the estate with your feelings?
  • [13:04] They have been able to learn and prepare for the estate closure over time
  • [14:36] How should you organize your own estate plan?
  • [16:54] How to deal with differing interests?

COACHES CORNER WITH BW

  • [20:27] If you don’t have confidence in your plan you won’t be happy in retirement
  • [23:01] Paying off your mortgage can mean so much to some people
  • [27:45] Have an emergency fund

TODAY’S SMART SPRINT SEGMENT

  • [33:03] Think about the past year: what were the best and worst decisions you made

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: RAM336.mp3
Category:general -- posted at: 6:00am CDT

By now you know how important estate planning is in retirement. But what is also important is to organize and communicate your wishes to your loved ones. In this episode, you’ll learn how to organize and communicate your estate planning wishes. We’ll chat with Sarah Bunnell from Everplans who will let you know how and why organization and communication are so important. Listen in to hear her expert take on these matters. And make sure you are signed up for the 6-Shot Saturday email so that you can receive an essential document checklist. 

An estate plan that is not organized or communicated correctly misses the point

Let’s say that you have just finished your estate plan. Congratulations on putting that all together! Now that you have completed this first step it is imperative that you take that next step and communicate your wishes to your loved ones. Once you get your financial assets and legal records organized then you’ll want to ensure that your loved ones know about them. The probate process is very involved so the more information that you can give them now will save them time and worry during an already stressful period. 

Who should you communicate your estate plan to?

Once you get your estate plan set up you’ll need to think about who you want to share it with. Do you have a trusted financial advisor? A CPA? An attorney? Who will be your point person? You’ll also want to make sure that you tell more than one person in your family. What would happen then if the family member that has all the information was involved in an accident with you? If you are single you’ll also want to consider who your trusted team may be. 

What about organizing your digital life?

Almost everybody knows that you should have a will and a medical directive. But what about your digital estate? How will your family access your digital files? Is your digital estate a mess? In these modern times of paperless statements, your heirs may not know what kind of accounts, insurance policies, or even properties you own. Without the passwords to the myriad online accounts, they won’t be able to make the payments or changes that they need to in the event of your passing. 

A bit about Everplans

Everplans is an online digital vault that we use in the Rock Retirement Club. This online organizational tool stores all the estate information you would need to have organized. Everplans allows you to share information on a piece by piece basis either now or after death to the important people in your life. You can store funeral plans, wills, trusts, financial statements, even recipes, and videos. Learn more about Everplans and organizing and communicating your estate plan on this episode of Retirement Answer Man.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN? 

  • [1:50] What is an emergency plan?

PRACTICAL PLANNING SEGMENT

  • [4:18] Why is the organization of your financial assets and legal records so important?
  • [6:50] What are the essential elements of an organized estate plan?
  • [14:30] How important is it to organize
  • [19:45] A bit about Everplans 

Q&A SEGMENT

  • [26:10] You can do qualified charitable distributions at age 70.5
  • [28:08] A state pension offset question
  • [29:38] Baby boomers retiring and taking money out of the market
  • [33:21] What did I end up doing for medical insurance?

TODAY’S SMART SPRINT SEGMENT

  • [39:20] Lessen the impact of loneliness in the pandemic by calling a loved one

Resources Mentioned In This Episode

EverPlans.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: RAM335.mp3
Category:general -- posted at: 6:00am CDT

Many people choose to give to charity as a way to give back to their community. If you are overfunded you may decide to give to charity while you are still alive as well as part of your estate after you pass. On this episode of Retirement Answer Man, we’ll continue the estate planning series to discuss different ways that you can give charitably now and as part of your estate. Stick around to hear the Q&A session with my esteemed guest Peter Lazaroff. 

What is a charity?

U.S. citizens are known for being extremely charitable people. Although many people help others as individuals, a charity is an organization that uses money and human capital to make a greater impact in the world. Different charities have different motivations and missions. When choosing a charity to give to it is important to look at its mission but also to make sure that the organization is a good steward of the money it receives. 

What motivates you to give?

Each of us has a different motivation to give to charity. Maybe your reasons are personal, or perhaps your life was affected by a certain event. Some people practice charitable giving as a way to model good citizenship to their family. Others are overfunded and use charitable donations to help ease their tax burden. For whatever reason you choose to give to charity it is important to make sure to find organizations that match your values. Why do you choose to give to charity?

How you can give to charity in life

There are several ways to give to charity now while you are still alive.

If you are over 72 you may find that your RMD is more than you need. You can solve this problem and reduce your tax burden by making a qualified charitable distribution. You can give to one organization or spread out your contribution among several charities. 

You can donate appreciated assets and avoid capital gains. If you donate all or a portion of appreciated assets directly to a qualified charity you can avoid capital gains. This could help you rebalance your portfolio or reposition your assets. 

Use a donor-advised fund (DAF) like your own charity. With a DAF you can donate cash or assets. It’s like a simple version of a private foundation. You can choose one or many different charities to give to. Listen in to hear how you can involve the family in your charitable giving. 

Use a trust in tandem with your charitable giving. Charitable remainder trusts or charitable lead trusts are a bit more complicated and require the help of an attorney. 

How to give in an estate after you pass 

There are basically 2 ways that you can give to charity in your estate once you pass. You can either make a bequest in your will or name the charity as a beneficiary of an asset. The most simple and direct way is by making a bequest in your will. If you chose to name a charity as a beneficiary in an IRA asset then the charity would pay no income tax on that asset. How would you prefer to give to charity? 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [3:08] What is charity?

PRACTICAL PLANNING SEGMENT

  • [7:04] What motivates you to give to charity?
  • [9:30] How to give to charity while you are still alive
  • [22:44] How you can give your estate

Q&A WITH PETER LAZAROFF

  • [26:44] Peter describes when decided to create his own estate documents
  • [30:38] Will a Roth conversion send your assets over the income limit?
  • [33:33] How to become a financial planner later in life
  • [44:30] How to navigate stock risk with your company

TODAY’S SMART SPRINT SEGMENT

  • [52:52] Examine your charitable giving to look for planning opportunities

Resources Mentioned In This Episode

XY Planning Network

PeterLazaroff.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: RAM334.mp3
Category:general -- posted at: 6:00am CDT

Retirement is often the time when people begin to think more about estate planning. On this episode in the Estate Planning series, we’ll talk about giving. You want to be able to give to your loved ones but you also don’t want to rob them of their problems. That’s why we’ll discuss how you can give without enabling and you’ll discover how to optimize the impact of your gift. You’ll also learn how to decide whether you have enough to give. When you begin to think intentionally you’ll see that there are so many ways to give. 

Do you have enough to give?

It would be amazing to be able to give to your loved ones before you pass, but how will you know whether you have enough? The first hurdle in giving is being comfortable giving away your assets. What if you need that money later on? Actually that’s not so hard to figure out. Often times you’ll see that deciding how to give is less a money question than a mindest question. To be comfortable giving away assets you need to understand your level of fundedness. Are you underfunded, constrained, or overfunded? Once you understand this then you can begin to put a plan in place for giving.

How can we give intentionally?

We give for many reasons. A gift is an item that you give someone without an expectation of payment in return. Giving is a way to express feelings and emotions and share those feelings with the receiver. You may not want your gift to your heirs to come in the form of a check from an attorney several months after your death. There are more intentional ways that you can give so that your family can feel the love behind that gift. 

Enhance don’t enable

As parents, we would love to solve all of our children’s problems for them, but then we would be robbing them of that learning opportunity. One of the best gifts we can give our kids is not robbing them of their problems. We need to find ways to help them but also allow them to figure things out for themselves. There are ways that we can give to them that enhance their lives rather than enabling them. 

There are many ways to give before you pass

Create memories - I think this is a fantastic way to give and to be able to enjoy that gift as a family. You could rent a house at the beach and help subsidize the family trip. Spend money to bring the family together. 

Annual gifting - You can give anyone $15,000 per year without reporting it. You could help fund their Roth IRA or help buy them a house. You might be surprised when you find out how much the lifetime gift exemption is. 

The gift of education - There are many ways to give for education. You can pay for college tuition directly. You could fund the grandkids 529 plan and allow the money to grow tax-free. You can also use up to $10,000 per year to fund a pre-college education if your grandkids are in private school.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [2:20] What is a gift?

PRACTICAL PLANNING SEGMENT

  • [6:50] How do you give more intentionally?
  • [10:45] We don’t want to enable we want to enhance
  • [14:55] Retain optionality
  • [16:12] Ways to give
  • [27:43] What is a trust?

Q&A SEGMENT WITH TAYLOR SCHULTE

  • [36:59] Should we be investing in ESG funds in the “new normal”?
  • [44:08] A rainy day fund question
  • [52:18] A tax bracket question

TODAY’S SMART SPRINT SEGMENT

  • [60:06] How do you want your assets to be distributed?

Resources Mentioned In This Episode

Stay Wealthy podcast with Taylor Schulte

Define Financial

CuriousHistory.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: RAM333.mp3
Category:general -- posted at: 6:00am CDT

One important aspect of retirement that not everyone is prepared for is estate planning. People avoid estate planning for various reasons, but a properly done estate plan is more than just documents. An estate plan is a way of continuing relationships and loving those people you leave behind in ways that you may not even imagine. Today we are kicking off our monthlong series on estate planning and we are starting with the basics. Listen in to hear what kind of documents you should have in place but also why they are important. 

What is estate planning?

Everyone knows they should have an estate plan, but very few have or understand what estate planning really is. Estate planning is the process of anticipating and arranging the management and disposal of your financial and legal life. The good news is that if you don’t have an estate plan the government has one for you. The bad news is that it probably won’t reflect your wishes. Done correctly, estate planning can be an important gift that you leave to those you care about. 

Why have an estate plan?

Some people may be fine without a plan and having the state doling out their worldly possessions. The purpose of an estate plan is to close out your financial life. When you pass away you probably don’t want to leave your loved ones with a financial and legal mess. Planning your estate in advance is one way to give a gift of elegant simplicity to your family. 

What does an estate plan involve?

  • Probate - When you pass away the process by which the state goes through closing out your legal and financial life is called probate. 
  • A will - A last will and testament is a document that designates where your assets will go, but there is quite a bit of paperwork involved so an executor is named to manage the paperwork and distribute the assets based on your wishes. 
  • Beneficiary driven accounts - These accounts have beneficiaries chosen when you set up the account. Beneficiary driven accounts include 401K’s, 403B’s, IRA’s, etc. The benefit of having a beneficiary listed on these accounts is that they get out of probate quickly and transfer quickly and directly.
  • Power of attorney - Another important document to have in place is a durable power of attorney. This gives a specified person the power to make decisions for someone who is incapacitated. 
  • Healthcare power of attorney - This document allows you to appoint someone to make healthcare decisions for you should you not be able to. If you don’t have one in place it could delay treatment. You can also specify specific situations in which you may not want life-saving actions. 

How often do you review your estate plan?

There is more to estate planning than just having these things in place. I am not a professional estate planner. Think about talking to an estate planner to help you plan your estate. And remember that it is important to periodically review your will and beneficiary driven accounts. Do you have an estate plan in place? When was the last time you reviewed it?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [3:06] What is estate planning?

PRACTICAL PLANNING SEGMENT

  • [4:34] An example of why estate planning is important
  • [9:14] What are the basics of estate planning?

Q&A WITH TANYA NICHOLS

  • [21:58] Should a woman seek to work with a female financial planner?
  • [26:49] Should you plan leveled withdrawals in retirement?
  • [35:09] How to factor secure income
  • [45:41] Why do we use average rather than the median in market assumptions?

TODAY’S SMART SPRINT SEGMENT

  • [51:02] Review your estate planning documents

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: RAM332.mp3
Category:general -- posted at: 4:23pm CDT

Do you think your own behavior affects your retirement investment management? If you said no, you may want to think again. The most significant risk to your finances is not market volatility or inflation, it’s your own behavior. Over the past several episodes we have explored how our own cognitive biases affect our financial choices and this episode continues that journey. On this episode, you will learn what you can do to make better decisions to ultimately protect your money from its own worst enemy: yourself. 

What is heuristic?

A heuristic is a psychological term for a mental shortcut that allows an individual to make a decision, pass judgment, or solve a problem quickly with minimal mental effort. Our brain constantly uses so much energy that it always looks for shortcuts. Renowned behavioral finance expert, Dr. Dan Crosby, calls this bumper sticker thinking. The 4% rule is a good example of a heuristic used in retirement planning. We need to learn to work around our mental shortcuts and truly think things through. 

Behavioral risk is the most significant risk to your finances

In finance, there are many kinds of risks. We often worry about volatile markets or inflation. We use diversification to help us lessen the market risk but we often ignore the greatest risk to our finances. The biggest risk to your financial security in retirement is your own behavior. If you can’t control your investment behavior especially during challenging times then your retirement portfolio will suffer. Listen in to learn how to manage your cognitive biases and set yourself up for financial success in retirement.

Tips for managing investment behavior

  • Investing is a crapshoot. That’s why we diversify, in essence, diversification is an act of humility. When you diversify you are admitting that you don’t know what will happen. 
  • Put a premium on optionality. As life unfolds you need to have the ability to make changes to your plans. 
  • Don’t white-knuckle it. If you can’t sleep during volatile times then you are taking too much risk. 
  • Listen to differing points of view. Cultivate a knowledge base with diverse opinions. 
  • Redirect your energy. Once you identify your cognitive biases, set up systems to redirect your natural tendencies. 
  • Consistently receive feedback from others with different points of view. Be careful to cultivate diverse opinions. 
  • Force yourself to consider the opposite case of any decision you make. Learn to see an issue more fully from both sides. 
  • Use personal benchmarking to compare your finances to a set standard. This will allow you to look inward at what matters to you personally 

How I manage behavioral risk with clients

When I work with my clients I have to help them manage their own behavioral risks. I do this by considering process, strategy, and tactics. Consider what you want your life to look like. What is important to you? 

Before making any decision, slow down and ask yourself some questions. If you slow down and center yourself you can think through any decision. Think about the decision from all sides. What does success look like? What does failure look like? What are some alternatives that you can consider? Listen to this episode of Retirement Answer Man to hear how you can manage your own behavioral risks.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [1:20] What is heuristic?

PRACTICAL PLANNING SEGMENT

  • [3:45] Managing behavior is the most significant risk you have to your finances
  • [7:04] Be nimble as life unfolds
  • [12:36] Create personal benchmarks
  • [14:23] How I manage behavioral risk with clients as well as with myself

COACH’S CORNER WITH B.W.

  • [21:41] What is the Rock Retirement Club?
  • [22:35] Do we make rational decisions?

TODAY’S SMART SPRINT SEGMENT

  • [34:02] Practice your decision-making framework

Resources Mentioned In This Episode

My article on Kitces.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: RAM331.mp3
Category:general -- posted at: 6:00am CDT

We all have cognitive biases that we have to account for when retirement planning. Although we can never shed ourselves of these biases we can manage them. In this episode of Retirement Answer Man, we continue to explore behavioral finance and how it affects retirement planning. Our minds like to play tricks on us and prevent us from making rational decisions. Listen to this episode to learn how to be aware of those tricks and overcome them so that you can rock retirement. 

What does bias mean? 

Before we further explore the subject of the cognitive bias we need to have a clear understanding of the term. Bias means that we prefer one side over the other. We all have our preferences for certain things, sometimes we aren’t even aware of them. Cognitive bias is a systematic error in thinking when people are processing or interpreting information. Cognitive bias can affect our judgment. It is especially important in finance to be aware of these errors in thinking. The biggest obstacle to rocking retirement is a cognitive bias. 

These 7 types of cognitive bias can impact your retirement planning

There are several different types of cognitive biases that can affect our decision making and impede our judgment. 

  • Confirmation bias is when we look for information to support our conclusions rather than looking at all the arguments in an objective way. Our minds are often overloaded with information and use confirmation bias to make decisions easier. Confirmation bias provides the mind with a quick shortcut to come to an answer that you already ‘know’ to be true.
  • Loss aversion explains people’s tendency to avoid loss rather than seek a gain. Psychologically the pain we feel when we lose outweighs the joy we feel when we gain. 
  • Oversimplification tendency helps us to find simple explanations for complex matters. Retirement planning is one of those complex problems. It takes a lot of energy to think out complex solutions to complicated issues. We love those rules of thumb to help us simplify matters, but the truth is we need to seek to understand the complexity. Only then can we discover the elegant simplicity of our own unique retirement plan. 
  • Memory bias impairs us from understanding past lessons. Instead of looking back in the long-term, we look to more recent decisions to guide our plans. 
  • Recency bias is similar to memory bias. Recency bias is the reason most people buy high and sell low even though they ‘know better’. When the markets are up we become more optimistic about life. 
  • Information bias brings out our tendency to continually seek out information even when it doesn’t affect the action. It becomes a way of procrastinating to delay making decisions.
  • Parkinson’s law of triviality means that we spend more time focusing on trivial details rather than the important issues at hand. 

Good investments plus good behavioral habits will help you rock retirement

The worst part about these biases is we don’t even realize that we have them. The first step in overcoming a problem is to realize that the problem exists. None of us have this retirement thing all figured out. But if you can create good behavioral habits and pair those with good investments you will rock retirement. Be sure to tune in next week to learn how to create a framework to manage your cognitive biases and become a better critical thinker.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [1:52] Check out the Grandpad to stay in touch with elderly family members

WHAT DOES THAT MEAN SEGMENT

  • [4:35] What does bias mean?

PRACTICAL PLANNING SEGMENT

  • [6:40] You have so much information coming to you
  • [13:43] The goal of retirement planning is to find the elegant simplicity
  • [16:48] We become optimistic when the markets is doing well
  • [21:21] Good investments plus good behavioral habits can help you rock retirement

Q&A SEGMENT

  • [23:44] What can you expect to pay as an individual for Medicare?
  • [26:55] The number of publicly traded companies has declined over the past few years
  • [34:10] Be cautious of booking travel due to the potential of travel company bankruptcies

TODAY’S SMART SPRINT SEGMENT

  • [35:40] Examine a past investment decision you have made to look for one of these biases 

Resources Mentioned In This Episode

Grandpad

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: RAM330.mp3
Category:general -- posted at: 6:00am CDT

Life planning is one of the hardest things about retirement. Deciding when to retire can be challenging and is a decision based on more than just money. There are various types of mind tricks that we play on ourselves to talk ourselves out of making life big changes. In this episode of Retirement Answer Man, we continue the behavioral finance series by taking an in-depth look at rational decision making. Come join me to learn how you can make more rational decisions so that you can rock retirement.

Our biases often get in the way of our life planning

There’s a difference between being rational and rationalizing. We, humans, tend to choose the latter. Our minds often play tricks on us. Instead of making simple choices, we tend to complicate things by letting our biases get in the way. We use different types of biases like status quo bias, anchoring bias, information bias, and sunk cost fallacy to guide our decisions. 

Many times you know that change is coming, you can see it a mile away, but you still have a hard time navigating that change. Retirement is one of those changes. You have been preparing for it all of your life, but leaving the safety of what is known and what is easy can be hard to do. Don’t let yourself get lulled into the status quo.

Has anchoring bias got you stuck in the same place?

Anchoring bias is another common bias seen in retirement. People often don’t know how to live a life without constraints so they simply choose to stay in place. They choose not to see the myriad possibilities that are out there. Embrace the total freedom of retirement by exploring all of your options. Listen in to hear an interesting parable to help you understand all the opportunities you have waiting for you on the other side of retirement

Are you waiting for more information?

Other people are always seeking information to guide their choices. While making informed decisions is important, some keep delaying their decision to retire due to their lack of information. They think that once they have all the information they will finally be able to pull the trigger and retire. But the reality is, we will never have all the information. There is always a gap between the known and the unknown. 

Do you want to create memories or regrets?

The sunk cost fallacy is another way people tend to rationalize themselves out of making good decisions. At your age, you have a lot of sunk costs. Don’t let those get in the way of living your life to its fullest. 

In the Rock Retirement Club, one of the first things that we discuss with new members is the 5 most common regrets from people on their death beds. Those regrets are:

  1. I wish I had the courage to live a life true to myself.
  2. I wish I hadn’t worked so hard.
  3. I wish I had the courage to express my feelings.
  4. I wish I had stayed in touch with my friends.
  5. I wish I had allowed myself to be happier.

You don’t want to die thinking about all of those things you wish you had done. Using rational thinking and consciously stepping away from your biases can help you live your life to its fullest so that you can look back at a life full of memories rather than regrets. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [1:58] The more difficult the decision the more likely you are to choose the status quo
  • [9:02] Sunk cost fallacy can also influence our decisions

Q&A SEGMENT

  • [13:24] The transition from an employer-sponsored account to your money can be scary
  • [17:20] Do you still need an emergency fund in retirement?
  • [22:00] The difference between Medicare and Medicare Advantage
  • [25:05] Concerns about municipal bonds 

TODAY’S SMART SPRINT SEGMENT

Resources Mentioned In This Episode

PODCAST - Retirement Starts Today with Benjamin Brandt

BOOK - Who Moved My Cheese? by Spencer Johnson

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: RAM329.mp3
Category:general -- posted at: 6:00am CDT

This month on the Retirement Answer Man show we are diving deep into behavioral finance. Do you consider yourself a rational person? Most of us think we are rational people, but according to Frederick Nitzsche rationality is impossible. However, without rationality, we are bound to make poor financial decisions. That’s why today we’re going to explore our humanness and focus on how we can make better decisions. Listen in to learn how to make better financial decisions so that you can rock retirement.

What is behavioral finance? 

Behavioral finance is an area of finance that attempts to understand and explain observed investor and market behaviors. One question behavioral finance seeks to answer is why do investors sell during bear markets and buy during market peaks? Behavioral finance tries to explain how our humanness affects the markets. When we study behavioral finance we have a better understanding of those things about investing that don’t make sense. 

How do traditional finance and behavioral finance differ? 

On the flip side, traditional finance assumes that investors are rational, optimizing market players. Modern portfolio theory is based on the premise that every investor is going to try to maximize returns and minimize losses in their portfolio. The sweet spot that every investor seeks is called the efficient frontier. So, according to traditional finance thinking, an investor would never deviate from the efficient frontier. Traditional finance assumes that an investor can filter information and assess the tradeoffs in order to maximize utility. But the reality is, self-deception and social influence have a huge impact on our decision making. 

What does Maslow’s Hierarchy of Needs have to do with finance?

Maslow’s Hierarchy of Needs plays a role in our decision making as well. Many of us have learned how quickly we can move down the pyramid from self-actualization to base needs during the recent turn of events in the world. Our own pessimism and optimism have so much to do with where we lie on this psychological chart. We use self-deception, irrationality, and bias to block our ability to make rational decisions. This month my goal is to help you learn to make reasoned decisions even with all of your cognitive biases. 

Should market volatility affect plans to rebalance?

A listener asks if she should continue her plans to rebalance her portfolio amid the recent market volatility. There are two different ways to approach rebalancing. Some choose to rebalance according to a date on the calendar. Others choose the threshold approach which means they rebalance when their portfolios begin to tip too far in one direction or the other. David Stein recommends choosing one approach and sticking with it. Listen to this episode to see what he has to say about rebalancing, taxes, and other listener questions. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [1:11] What is behavioral finance?

PRACTICAL PLANNING SEGMENT

  • [2:05] Why is behavioral finance important to understand?
  • [8:12] Maslow’s Hierarchy of Needs

Q&A SEGMENT WITH DAVID STEIN

  • [16:25] David Stein thinks that loss aversion is the most prevalent bias that people have
  • [18:54] Should Wendy take a lump sum or payments?
  • [23:40] A rebalancing question
  • [27:22] What could John do to lower his capital gains tax?

TODAY’S SMART SPRINT SEGMENT

Resources Mentioned In This Episode

BOOK: The Behavioral Investor by Dr. Daniel Crosby

BOOK: The Laws of Wealth by Dr. Daniel Crosby

Money for the Rest of Us podcast with David Stein

BOOK: Fix This Next by Mike Micalowicz

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: RAM328.mp3
Category:general -- posted at: 6:00am CDT

It’s easy to say don’t live your life based on assumptions. But how can we do that in retirement when assumptions are our way of managing uncertainties? Assumptions are basically just guesses at things we don’t know. And we need to make some assumptions to create a retirement plan. So today we’ll finish off the setting your retirement assumptions series by exploring 5 rules for setting and managing retirement assumptions. Join me to learn how you can make good assumptions so that you can rock retirement.

5 Rules for making and managing assumptions

  1. Recognize the assumptions you need to make. Even if you don’t like to make assumptions, you still have to make some to effectively plan your retirement. It’s important to recognize the assumptions that are important to retirement planning. There are obvious ones like inflation, rate of return, and longevity. But some may not be as obvious. Spending rhythms are difficult to understand in retirement and challenging to predict. You also may not understand how to live a life without the boundaries that have constrained you for your whole life. 
  2. Investigate the data surrounding your assumptions. Don’t just assume blindly. Do your research. It’s good to start with historical data, but you can also think about more personal factors. One example is with longevity. You should consider your personal health and family history when estimating your own longevity.
  3. Beware of making extreme assumptions. This one can be challenging in the times of COVID-19. We tend to start believing in extremes when faced with extreme situations.
  4. Determine which assumptions have the biggest impact on your life. Next identify which ones you can control. Where those two meet is precisely where you want to focus your time and energy.
  5. Don’t trust your assumptions. Although we need our assumptions to help plan for retirement, we can’t trust them fully. This is where being agile comes into play. When you are agile you can find the blips on your dashboard and then readjust your model accordingly. Agile retirement planning can help you keep your model up to date and relevant as life changes.

Why is identity such a big issue for retirees?

When you retire you lose your work identity and your identity as a wage earner. It can be easy to become lost. But instead of lamenting the loss of what was you can instead take this opportunity to create a new identity that you choose. You can create this identity based on who you really are. So give it some thought, who do you want to be in retirement?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [3:00] 5 Rules for making and managing assumptions

COACHES CORNER

  • [16:10] Why is identity such a big issue for retirees?

TODAY’S SMART SPRINT SEGMENT

  • [28:00] Go through these rules think about how you will manage your retirement assumptions

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: RAM327.mp3
Category:general -- posted at: 6:00am CDT

Once again we are tackling your retirement assumptions on Retirement Answer Man. This week we’ll discuss market assumptions. You are modeling 30 years out, so the market assumptions that you make can easily overestimate or underestimate the amount of money you will need. What kind of market assumptions have you been making with your models? 

What are capital market assumptions?

Capital market assumptions are the assumptions that investment managers or asset allocation software use to design your pie chart. It will include what the expected returns are for the asset class. The factors include what the return assumption is, what the standard deviation is, and how each ingredient reacts with each other. We can refer to these factors as return - volatility - correlation. We try to manipulate these assumptions and put our own views on top of them. It is important to note that these are the components of your pie chart asset allocation forecast. 

It’s different this time…

We always think that this time is different. Each major crisis has been unique. The Great Recession of 2008 hit us all hard and changed paradigms. During The New Economy of the 90s, many threw caution to the wind because they just knew that returns were always going to be 20%. But this time is different, right? This pandemic, it’s personal. The safety of our families is at stake. You can’t leave your house. But this time just like all the rest one thing stays the same. It is difficult just to try and be reasonable. 

What kind of historical market assumptions do you use to plan your retirement?

Many people like to use the 10% number to plan their retirement model. But why do they choose 10%? Is it a nice round number? The last 5 years’ stock market returns were 7.7%. During the past 10 years, they were 15%. Over 50 years that number drops to 8.4%. And over 94 years it averages 10%. We often use these historical numbers in our models, but these numbers don’t factor in the lumpiness. These numbers vary wildly from year to year which is why linear models fall apart over time. 

Find the answers to your retirement questions

In our Q&A segment, you’ll hear the answers to questions like, should you consolidate all of your assets in one place? How should you rollover your pretax and post-tax dollars? How hard is it to get a mortgage in retirement (even if you have a pension)? Should you use withdrawal strategies in retirement? Listen in to the end to hear all of these questions answered on this episode of Retirement Answer Man. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN? 

  • [1:02] Capital market assumptions

PRACTICAL PLANNING SEGMENT

  • [2:50] It’s different this time…
  • [7:05] What are your assumptions that the stock market will do going forward?
  • [10:32] It is easy to overestimate the viability of your plan

Q&A SEGMENT

  • [19:15] Should you consolidate all of your assets in one place?
  • [23:30] Is qualifying for a mortgage in retirement challenging with a pension?
  • [29:16] Should you use withdrawal strategies in retirement?

TODAY’S SMART SPRINT SEGMENT

  • [31:20] Reexamine your market and inflation assumptions

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: RAM326.mp3
Category:general -- posted at: 6:00am CDT

One of the biggest assumptions you can make in retirement is in your spending. Spending is one of the greatest financial pieces of retirement planning. On this episode, we’re talking about spending. How do you track your spending? How do you know how much you will spend in retirement? Will your spending change after you retire? Listen in to hear how to break free from your retirement assumptions so that you can not just survive retirement but rock retirement. 

Americans want to keep working remotely

American views are changing amid this Corona disruption. According to a recent study done by IBM, 54% of Americans would like to continue working from home and 70% would like to retain the option to work at home. Major events like the one we are experiencing accelerate social trends. We are all learning a new rhythm of life and many of us like it. If you are enjoying working from home it’s time to consider, what does this make possible? Would working from home give you access to more time freedom? Would it cut down on your wardrobe and commuting costs? Listen in to brainstorm with me how you can use this new trend to perhaps extend your working life. 

You can’t rely on averages to plan your own spending

There is a rule of thumb in retirement spending. People who make close to $50,000 per year spend about 70-80% of that in retirement. But conversely, as your wages go up your retirement spending goes down. Those making over $100,000 per year spend only about 55% of that in retirement.

Another generalization about spending in retirement is household spending by age group. People under 55 spend about $57,000 per year. Ages 55-64 spend approximately $59,000 each year. But then the numbers begin to go down once people reach ages 65-74. This demographic spends $47,000 and finally those in their golden years who are 75 and older only spend $35-37,000 per year. 

We can look at averages and facts and figures all day long but they don’t mean anything. These averages aren’t yours. The data is a good place holder to use as you plan far into the future but in the short-term, the only figures you should be concerned with are your own.

We all have different categories of spending

Everyone has different ideas about what essential spending entails. I like to customize retirement spending into 3 categories: needs, wants, and wishes. Obviously the needs category includes food, clothing, shelter, and healthcare. But it is important to include a bit more than the basic rice and bean budget. Your needs category is your firewall. You want to make sure that you can really live your life on this level. The wants category may include more travel and discretionary spending. The wishes category is where you get to dream big. I encourage you to create different retirement budgets based on these 3 categories. 

Two ways to estimate your budget

There are two approaches to create a retirement budget. If you are still a way out from retirement, one easy way to project your spending is to do a top-down budget. A top-down budget is where you estimate all of your income sources and then subtract the money you save. This will give you a ballpark figure for your current budget. 

As you get closer to retirement you’ll want to create a more accurate model. You can do this by forming a bottom-up budget. This is where you will get a real handle on each category of your spending. This type of budget takes a lot of work, but it’s important to be as accurate as you can as you approach retirement. 

One way you can really dial in your budget is to live on your projections for a year and see how that works for you. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [1:21] Americans want to keep working remotely

PRACTICAL PLANNING SEGMENT

  • [10:45] Spending assumptions
  • [15:56] You can’t rely on averages to plan your own spending
  • [17:20] Health care costs vary per age as well
  • [23:45] We have different seasons of life
  • [35:36] Healthcare assumptions
  • [39:35] Two ways to estimate your budget

Q&A SEGMENT

  • [43:49] An asset dedication question
  • [47:41] An IRMAA correction
  • [49:02] RMD’s for 2020

TODAY’S SMART SPRINT SEGMENT

  • [52:33] Revisit your retirement cost assumptions

Resources Mentioned In This Episode

Jasnon Aten’s article in Ink magazine

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: RAM325.mp3
Category:general -- posted at: 6:00am CDT

 What retirement assumptions do you have? In retirement planning, we rely on assumptions for just about everything. This may seem like a small thing, but this topic is so big that we are taking the whole month of May to talk about it. Today we tackle the life assumptions: how much you plan to spend, how long you plan to work, how long you think you’ll live. Join me as we consider the different assumptions we all make when planning for retirement. 

What is an assumption? 

Your assumptions are your windows on the world. An assumption means assuming something is true, taking it for granted. In retirement planning, we must make assumptions. Assumptions must be made to plug into the models. We assume for inflation, spending, costs, markets, longevity, and health. As you plug these numbers in, the range of potential outcomes gets wider and wider the farther out you project. And often in retirement planning, we plan as far as 40 years out. You can never get the assumptions just right but you can try to get as close as possible.

We often have incorrect assumptions about how we will spend money

We need to make assumptions about how we will live in retirement to be able to plan accordingly. One of the biggest inputs into the retirement plan is spending rhythm. Many people assume that they will continue to spend in retirement as they do now. But retirement spending is lumpy. It doesn’t have an even flow. In the go-go years at the beginning of retirement, we often spend a lot, then that spending slows down as life slows down. It’s hard to imagine yourself at age 70 or 80. But try to think about how you’ll be living your life at that age. 

We assume that retirement is like turning off a light switch

One day we’re working and then the next day we stop. Right? Wrong. Retirement doesn’t have to be that way. Most people actually work for a period of time in retirement. You can take that light switch and make it a dimmer switch. If you are willing to rethink work and rethink income then you can still work and have the time freedom that you seek. You can choose pretirement and slowly But oftentimes it’s not that way. And it doesn’t have to be that way. 

How will longevity affect your plans?

Be careful with statistics, they can fool you. We often look to statistics to plan our longevity outlook. But your health is not average and it’s not based on statistics. You need a more personalized plan. Consider where you really fall on the longevity timeline based on health, fitness, and family history. We also often assume that our mental capacity will remain the same. You may want to factor in some kinds of systems to help keep your finances running smoothly if your mental function begins to diminish. These aren’t things we have fun thinking about but they are important. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT’S THAT MEAN SEGMENT

  • [2:54] What is an assumption?

PRACTICAL PLANNING SEGMENT

  • [6:00] We often have incorrect assumptions about how we will spend money
  • [10:02] We assume that retirement is like turning off a light switch
  • [14:32] Is your plan dependent upon you working in retirement? 
  • [17:07] Will helping your kids impair your retirement plans?
  • [18:38] How will longevity affect your plans?
  • [23:44] You also need to consider your mental capacity
  • [26:02] Consider your assets

Q&A SEGMENT

  • [29:20] A super backdoor Roth question

Resources Mentioned In This Episode

John Hancock longevity calculator

Nova Article by Kate Becker

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: RAM324.mp3
Category:general -- posted at: 6:00am CDT

Beachwalker, the rockin’ retirement coach is in the house today. He joins us once a month on the show to give some helpful tips on how to create an awesome retirement. Today we’re talking about attitude. Attitude makes a huge impact on your retirement, your health, and even your longevity. Listen in to hear how a positive attitude can affect your life and stick around for the Q & A segment to hear the answers to questions you didn’t even know you had. 

Attitude isn’t everything, but...

It’s a huge component of rocking retirement. Attitude is an important determinant of the quality of your life now and it will be so even more in retirement. The definition of attitude is a settled feeling about someone or something that is reflected in behavior. So what comes first the chicken or the egg - a great retirement or a positive attitude? What do you think?

Attitude has an even bigger factor on longevity than your health

People are living so much longer than they used to. 80 is the new 60. With this newfound longevity, it’s important to create a positive mindset. You can’t let every ache and pain get you down, find a way to deal with that so you can move on and make the best of your life. Studies have shown that a positive attitude impacts your balance, your mental health, and even your longevity. Aging is inevitable, being old is a choice. 

Robo advisors and target-date funds in retirement

If you are young and accumulating your savings, target-date funds are totally fine (even though I like allocation funds better). And robo advisors are able to put your portfolio on autopilot by automatically rebalancing whenever you need it. But these tools are not set up for managing your assets in or nearing retirement. In retirement, they can lead you astray since they are not geared for distribution. 

How do you determine whether to take a lump sum or an annuity?

Choosing between taking a pension or a lump sum is a tough call. There are many factors to consider. One factor you should think about is what other assets do you have? A pension offers flexibility if you have other assets in place. But if you are underfunded for retirement taking a lump sum would create investment risk at a time when you need to have guaranteed income sources. When planning for retirement, I like to first create a process, then a strategy, and lastly, I choose the tactics to use. You can create your own model at home using your own process, strategy, and tactics. Try modeling both choices and see where you end up. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN SEGMENT

  • [3:00] Attitude isn’t everything

COACHES CORNER SEGMENT

  • [5:22] People who have a more positive perception of aging live longer

Q&A SEGMENT

  • [10:30] Robo advisors and target-date funds in retirement
  • [12:43] Why isn’t catastrophic long-term care a thing?
  • [14:30] Lump sum or annuity?

TODAY’S SMART SPRINT SEGMENT

  • [19:27] Ask yourself, what does this make possible?

Resources Mentioned In This Episode

BOOK - Younger Next Year by Dr. Henry Lodge

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: RAM323.mp3
Category:general -- posted at: 6:00am CDT

Retirement planning will never be the same. Actually there are many aspects of our lives that will never be the same. The Coronavirus disruption has been exactly that, a disruption of our everyday lives. It has affected everything from education, to work life, to retirement planning. Find out how staying intentional and agile will help you rock retirement on this episode of Retirement Answer Man. 

Disruption causes trends to accelerate

Normally we see new trends happening but they take time to really take root. But once some kind of disruption takes hold those trends begin to accelerate. Remote working and online learning were two trends that were coming along in the world but they never really took hold until the Coronavirus disruption. These two trends have been fueled by this disruption and education and the workspace will never be the same. 

How do you define retirement?

If you look retirement up in the dictionary it can mean several things. But none of those ring true for most people in the various stages of retirement planning. We all have our own definitions, our own versions of how we want to spend our golden years. Many of us feel that the most important thing to consider in retirement is time freedom. We want to have control over our own schedules. Plenty of people want to continue to work, but for a different purpose. The compensation may not be the same. Instead, they choose to work to give or to make an impact in the world. So what does retirement mean to you?

5 ways retirement planning is changing

School and work aren’t the only aspects of life that are changing. Retirement planning is changing as well. This field has its own trends that will be accelerated by the Coronavirus disruption as well. Here are 5 trends that I see changing retirement planning.

  • I think we were all starting to value experiences over things and that will continue to accelerate when all this is said and done. 
  • Retirement planning generally starts out as a mathematical formula and we often forget life outcomes. I think retirement planning will become less investment-focused, and more focused on creating the outcomes that are right for you
  • Matching our assets with our liabilities will increase in importance in retirement. This is what retirement planning actually is.
  • People will become more focused on short-term volatility risk and may forget about long-term inflation risk and decreased buying power. Since inflation has been so low for so long we frequently ignore its risk. 
  • Pretirement will boom. Pretirement is an excellent bridge between full-time work and retirement. It doesn’t just give you cash flow in retirement it also gives you:
    • Time freedom
    • A purpose or something that interests you
    • A way to help mentally ease into retirement
    • A transition in your social network
    • Agency and a sense of power 

What trends do you think might accelerate from all of this? Let me know by responding to the 6 Shot Saturday email. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [0:40] Disruption causes trends to accelerate

WHAT DOES THAT MEAN?

  • [3:20] What does retirement mean?

PRACTICAL PLANNING SEGMENT

  • [5:35] 5 trends in retirement planning

Q&A SEGMENT

  • [20:28] How should Mitchell roll his pension so that he doesn’t get taxed for the lump sum?
  • [22:00] What kind of stress tests can we do to prepare for retirement?
  • [25:38] How to prioritize what’s important in stressful times
  • [30:28] How to pursue a second act

TODAY’S SMART SPRINT SEGMENT

  • [33:24] What can you do to treat 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: RAM322.mp3
Category:general -- posted at: 6:00am CDT

So, we’re not in a recession yet, but these are definitely challenging times. Now is a great time to learn how to navigate a recession in retirement. A recession is a temporary economic decline with a fall in the gross domestic product over successive quarters. Although we technically aren’t in a recession right now, we can stay agile by preparing ourselves for what is to come. Join me today to learn how you can navigate a recession in retirement. You’ll learn 6 areas in which you can play offense or defense to help you be prepared for what may lie ahead. 

6 areas of defense or offense to prepare yourself for a recession in retirement

  1. Maintain a mental edge - What do you do to stay mentally agile? Self-care is so important during challenging times. Exercise and journaling are 2 great ways to practice self-care. Find a healthy way to vent if you need to let off steam. It’s also important to limit the news you watch and avoid the bait of commercials and sales pitches. Be careful with those sales pitches, everyone is trying to take advantage of the situation to make a buck. 
  2. Evaluate what is important to you - Right now we are experiencing unprecedented times where we have an opportunity to really think about what is important to us. So give it some thought. What are your life goals? What is important to your life? 
  3. Consider your cash flow - Another opportunity presents itself to stress test your retirement plan. Review your liquidity. Do you have enough laid out in cash reserves? Take this time to evaluate the sustainability of your retirement plan. Build a cash floor, moderate your wants and wishes
  4. Look for opportunities - Since interest rates are at an all-time low, consider refinancing your mortgage. Now is also a great time to find flexible travel deals look for travel deals. 
  5. Examine your portfolio - This is a good time to simplify your investments in a tax-efficient way. Examine your asset allocation. Is your portfolio doing what you expected? You don’t need to take action right now if you want to change, just make a note of it for better times. Examine your risk tolerance. We’re used to riding risk while accumulating assets, not while we’re in the decumulation stage of life. You also have an opportunity to do some tax planning this year. You may be able to take advantage of tax loss harvesting. Also consider whether it makes sense to do some Roth conversions. 
  6. Help the family - Now is a great time to gift shares of stock or cash. Many people are experiencing challenging times with job losses. Remember you can gift $15,000 per person. You could also consider making an interfamily loan to someone who just needs help weathering this storm. These loans have no requirements other than you must charge a minimum applicable interest rate which is low right now. 

How will you stay agile?

You may never be 100% prepared for a recession in retirement, but you can be agile. Think about the ways you can maneuver and look for opportunities. Although it is important to consider how to defend your assets it’s also important to stay on your toes and be proactive. So what will you do to stay agile in the coming weeks and months?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [2:00] What is a recession?

PRACTICAL PLANNING SEGMENT

  • [3:22] 6 areas to help you navigate a recession 

THE Q&A SEGMENT

  • [24:30] Where should you invest a chunk of money?
  • [28:40] Evaluate the things you own
  • [31:55] How to best utilize tax brackets
  • [34:33] No one knows how to file for unemployment as a contract worker

TODAY’S SMART SPRINT SEGMENT

  • [38:00] Do something to manage your stress and anxiety

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: RAM321.mp3
Category:general -- posted at: 6:00am CDT

If you are nearing retirement you may be hyper-aware of the corona disruption. With all this extra time on your hands, you may want to spend more time planning your retirement. But don’t overthink this. Listen to this episode to hear my take on 6 years of Retirement Answer Man plus hear the answers to several listener questions. 

6 lessons from 6 years of Retirement Answer Man

Thanks for 6 years of Retirement Answer Man! Last week I entitled the episode 6 Retirement Lessons from 6 Years of Retirement Answer Man and then I forgot to mention the lessons or the fact that 6 years have gone by. So here are 6 of my takeaways after 6 years of producing the show.

  1. It’s all about the money. Many think of retirement as being a math problem, but it’s not. There are too many unknowns for retirement to be as easy as a math problem. Retirement is the problem that cannot be solved that easily. 
  2. Going from accumulation to decumulation is hard. After saving your whole life, switching gears is a challenge. Not only are you no longer earning, but so much else in your life is changing as well. Your social networks, your purpose, your relationship are just some of the things that change alongside transitioning from being an earner to living off your savings. 
  3. Your attitude is critical to your success. Attitude is everything. You can have the attitude: what does this make possible? Or, why is this happening to me? Don’t let the circumstance determine the attitude, let the attitude interpret the circumstance. 
  4. The traditional system of retirement planning is broken. This system is based on sales of products and investment portfolios. Financial planning is evolving though
  5. Little actions are critical. What can you do next? Create the momentum to take advantage of opportunities and mitigate risk. Agile financial planning is a journey. 
  6. Trust that everything will be ok. Take action, but understand that your path will be revealed. 

What retirement lessons have you learned on your journey? Let me know!

How to time the bottom of the market

One listener writes in with a question about timing the bottom of the market. He had the foresight to pull out when the virus hit China. But now he wants to get back in near the bottom. He is worried that he might miss the upswing. 

Planning the bottom of the market is pretty challenging. I am not a market timer. I prefer to have a process and strategy where I develop my tactics. Without a process, our choices are fueled by emotion rather than logic. Do you have an investment process? Listen in to this episode to hear more listener questions

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:45] 6 lessons from 6 years of Retirement Answer Man

PRACTICAL PLANNING SEGMENT

  • [13:43] Recommendations on buying gold
  • [19:12] How to time the bottom
  • [23:40] How to build a fixed income source for your pie cake

TODAY’S SMART SPRINT SEGMENT

  • [28:02] What are you going to learn over the next 7 days?

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: RAM320.mp3
Category:general -- posted at: 6:00am CDT

Making the choice to retire and actually stepping away from the comfort of your long-time career can be so difficult. It takes a lot of courage to make that leap. On this episode of Retirement Answer Man, we’ll be analyzing how you can create a strategy to step off that train and get started on your retirement. Listen in to hear how to start planning for the retirement that you know you want. But first, let’s talk about this stimulus package. 

What does the CARES Act mean for you?

In a landmark piece of legislation, the CARES Act was recently signed into law. Roughly 90% of the population will be receiving a direct deposit into their bank account courtesy of Uncle Sam. The qualifications will be based upon your most recent tax return. If you are married and made less than $150,000 then you will qualify. Another perk of the CARES Act is that in 2020 there will be no required minimum distributions. Listen in to hear about 401K loans and hardship distributions which were also covered in the bill. 

It can be hard to retire

Sure retirement sounds exciting, but actually stepping away from a longheld career and living off your savings can feel like jumping off a cliff. At this point in your life, you are probably at the top of your game. You are probably making more money than ever before. You are the captain of your universe. How can you step off that money-making train and into the unknown? 

Some strategies to help you prepare to retire

So how do you garner the courage to give up your income, live off your savings, and step into this unknown world? There are some tactical strategies that you can use to help you prepare for this change in life. 

  • Set a deadline for retirement - not just in general, set a specific date to pull the plug.
  • Create a compelling vision of where you want to go - Use process strategy tactics to prepare and organize your resources.
  • Pretire - set yourself up to make a little bit of income. Now is a great time to prove to your employer that you can work remotely. Pretirement can be a great way to gain time freedom without giving up all of your income
  • Flock with birds of the same feather - get to know people that are walking the same path but a bit ahead of you in their journey. The Rock Retirement Club is a great way to share ideas and conversation with people in the same boat. 

Now more than ever it is important to remain agile in your retirement planning. Listen in to hear listener questions and to find out how you can prepare to retire. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [1:18] What does the CAREs Act mean for you?

PRACTICAL PLANNING SEGMENT

  • [7:41] It can be hard to retire
  • [13:43] Some tactical strategies

LISTENER QUESTIONS

  • [17:10] This whole month is dedicated to your questions
  • [18:00] Will the stimulus package end up causing inflation?
  • [21:54] How to rebalance at this time

TODAY’S SMART SPRINT SEGMENT

  • [28:35] This is the perfect time to get ready

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: RAM319.mp3
Category:general -- posted at: 10:01am CDT

We chat with Fritz Gilbert, founder of the Retirement Manifesto blog and author of Keys to a Successful Retirement, Staying Happy, Active and Productive in Your Retirement Years.

Direct download: RAM_Special_Edition.mp3
Category:Finance -- posted at: 7:13am CDT

Choosing where to live in retirement can seem daunting to some and exhilarating to others. On this final episode of the Where to Live in Retirement series, we hope to teach you how to take steps to navigate a transition to create the retirement and the life that you really want. If you listen to this show that means that you are preparing to rock retirement. Listen in to this episode to hear how to take intentional action to plan where you really want to be in retirement. 

Let’s acknowledge the crazy things going on

We can’t begin this episode without acknowledging the crazy life-changing events that are happening all around us as we live through this Coronavirus disruption. I have talked to so many worried people in the past few weeks; clients, Rock Retirement Club members, and listeners who are all concerned about the effects of the Coronavirus. They want to know what they can do to mitigate the financial damage. To address everyone’s concerns, share tips, and answer questions, I’m hosting a town hall tomorrow 3/26 at 7 pm central. You can sign up for this webinar at my website: rogerwhitney.com just click the ad at the top of the page to register. 

How to avoid bad decisions during the Coronavirus disruption

Stop! Don’t do that! It’s important that you don’t make large, rash decisions in the middle of a crisis. Unfortunately, the Coronavirus has disrupted many aspects of our lives. Although you shouldn’t make big decisions at this time, you can take small actions. Cut some discretionary expenses, have a positive attitude, bring in some extra income. Most importantly, ask yourself what does this make possible? Find out what is possible during this challenging time and lean into it. 

Open your mind to the possibilities of where to live in retirement

How to begin to decide where to live in retirement? First of all, you need to open your mind to the myriad possibilities. The world is your oyster. Where can you envision yourself living? Try this exercise separately from your spouse. Have a seat and write down 3 places to live or even styles of living that you would enjoy. List the pros and cons of living in each place. Then each of you can present them to each other. This is an exercise in healthy communication. 

How can you have the best of both worlds?

You and your spouse may not have the same lifestyles or places written on your list of places to live. Think about how you can have the best of both worlds. Could you rent a place a few months out of the year? Buy a second home? It’s important that both of you make your voice heard. Think about the creative ways that you can live your ideal retirement. Listen in to hear how you can navigate the transition into retirement and decide where to live. You’ll also hear listener questions that could help you up your retirement game. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

COACHES CORNER

  • [3:30] Open your mind to possibilities
  • [7:45] How to avoid bad decisions

Q&A SEGMENT

  • [12:10] How to verify expense ratios?
  • [15:24] Should he track information in a spreadsheet?
  • [19:35] Cash value or pension?
  • [20:34] An unusual retirement plan

TODAY’S SMART SPRINT SEGMENT

  • [28:58] Realize you have choices to create the type of environment you want

Resources Mentioned In This Episode

Dan Crosby

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: RAM318.mp3
Category:general -- posted at: 6:00am CDT

Direct download: RAM_Special_Episode.mp3
Category:Finance -- posted at: 12:25pm CDT

Over the past several episodes we have been discussing how to decide where to live in retirement. After listening to the previous episodes in this series, you have been able to acknowledge your own status quo and build a framework to decide the kind of place that you want to live in retirement. Now is the time to experiment and decide what makes the most sense for you and your situation. Listen in to hear different ways you can experiment and choose the right place to retire.

Is the grass really greener somewhere else?

All this talk of packing up and moving can get you ready to pack your bags and drive across the country to start a new life. But before you do that, think about if that is what you really want. Our thought experiment is really meant to get you thinking. So now examine where you are right now. What would happen if you decluttered the house or even remodeled it? Would it feel more liveable? What if you reexplored your own city? Check out the museums, parks, and trail systems. You may find there is more to love than you thought. 

How to experiment and decide where to live in retirement

How do you know where to even begin? Deciding the right place to retire can seem like a daunting task, but just like any other research project, you can start with the internet. Think about the aspects of a place that are important to you to get a profile of what you are looking for. Country or city? Beach or mountains? North or south? You’ll also want to think about factors such as affordability, proximity to airports and family. 

Keep your ear to the ground

Once you find a place that intrigues you start chatting with friends and colleagues about that location. Keep your ears open and you’ll hear plenty about that place. Another way to investigate places to live in retirement is to test the waters. Use your vacations to explore the places you are thinking of. Instead of buying a new place right away consider renting for a year to see if it’s somewhere that really suits your needs. 

Test the waters

Remember the whole point of this exercise is to have you analyze your status quo to see if it will still fit your desires in retirement. After doing this you may find that you are exactly where you want to be. So build your framework and put it to the test. Test the waters to see what may work for you. Continue to flush out your living profile to research and experiment on where you are thinking of settling. Try booking a vacation there or testing the waters. This will help you decide what is right for you. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [2:00] What is huzzah?

PRACTICAL PLANNING SEGMENT

  • [3:00] Is the grass really greener somewhere else?
  • [7:44] How do you research and explore
  • [11:45] How these decisions are made in my home

Q&A SEGMENT

  • [17:45] How to evaluate when you will be ready to retire
  • [25:35] Should you hold onto a stock?
  • [30:55] How to protect yourself against identity theft when working with a planner?

TODAY’S SMART SPRINT SEGMENT

  • [38:15] Continue to flush out your profile to research and experiment

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: RAM317.mp3
Category:general -- posted at: 6:00am CDT

In this episode, I share some perspective to help you navigate this crazy market

Direct download: Special_Edition_on_Bear_Market_3.13.20.mp3
Category:general -- posted at: 9:12am CDT

Creating an ideal living profile will help you build a vision of your retirement. On the Where to Live in Retirement series, we’re not giving you a list of top places to retire, instead, you will learn how to build a framework to help you understand where is the right place for you. On this episode, you’ll consider questions to ask yourself and your spouse to create the ideal living profile for your retirement. Listen in to learn how to build a vision of what you want your retirement environment to look like.

Would you move across the country if it meant you could retire 2 years early? 

Moving can often lead to a completely different lifestyle. If you live somewhere with a high cost of living then moving to a state with a lower cost of living could completely change when and how you retire. Some people are completely happy with where they live and even identify with that place, and if that is you, then great! But for those that may be considering a change, make your decision intentionally. Don’t base your choices on the status quo. Consider your right answer. 

How to create your retirement living profile

How do you feel about your living environment? Our living environment sets us up for success and happiness. To create an ideal living profile there are many things that you can consider. Consider the climate. Do you like consistency or do you like change? Are you someone that wants to see the seasons change or would you prefer warmer weather all year long? Would you prefer to live in the city, suburbia, or out in the country? Would you enjoy the conveniences of a planned community? What kind of amenities do you like to be near? Listen in to hear what you should consider when creating your ideal living profile. 

What tools can you use to create your ideal living profile for retirement?

Now that you know what kind of questions to ask yourself, it’s time to actually build your living profile. There are many different ways that you can do this. One way is to create a vision board. A vision board is a way to use pictures, words, and ideas and arrange them in a visual way. You could also use a mind map to help you create your retirement living profile. I use a mind mapping app called Mind Node that helps me create mind maps. Make sure you’re signed up for 6 Shot Saturday to receive a mind map example. 

Create a conversation

When considering where to live in retirement it is important to check your status quo at the door. As you work through this exercise of creating your living profile make sure to do it separately from your spouse. Define what is important to you individually. After you have both created your living profiles you can use them to spark an ongoing conversation. You want to make sure that both of you express your feelings. Use this exercise as your Smart Sprint this week and start the conversation with your spouse.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [1:40] What is a bond ladder?

PRACTICAL PLANNING SEGMENT

  • [3:38] Would you move across the country if it meant you could retire 2 years early?
  • [7:07] How to create a living profile
  • [15:44] What are some tools you can use to create your living profile?
  • [19:42] Next week: how do you experiment with your decision?

Q&A SEGMENT

  • [21:50] Roth conversions and making use of your tax brackets
  • [27:15] What are the pros and cons of using a bond fund vs. using a bond ladder?
  • [31:15] Target-date funds

TODAY’S SMART SPRINT SEGMENT

  • [35:06] Start thinking about the environment where you want to retire 

Resources Mentioned In This Episode

The Pie Cake episode

Mind Node

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: RAM316.mp3
Category:general -- posted at: 12:59pm CDT

Retirement is one of those life changes that gives you the opportunity to reevaluate and set yourself up for the next stage of life. On this monthlong Retirement Answer Man Series, we’re going to think about how to decide where to live in retirement. This will not be a list of the top ten places to go, but instead, I want to help you build a framework to weigh your decisions. In this episode, we’ll get you thinking about your own status quo so you can evaluate whether it’s right for you. Listen in with an open mind and really think about whether your in the right place or if you’re just comfortable. 

The Coronavirus and market corrections

I can’t sit by and ignore the recent market correction due to the Coronavirus. The whole situation can seem scary, While I can’t assess the health risk of the illness, I can discuss the market risks. Nobody knows how this event will slow down our economic system overall or how it will affect the profits, growth, and earnings of individual stocks. What you can do is consider whether you have the right structure in place. If you have done your planning then you need to sit down and remember that the money you have in the market right now won’t be touched for 5+ years. Relax and remember that this too shall pass. 

Are you getting trapped by what is?

The status quo can be quite comfortable. But instead of sitting back and letting life pass you by you can use the status quo as a baseline to help you consider what could be. How did you come to live where you do? Think about what that journey was like. Have you lived there long? What ties you there now? Retirement is a unique time in life where you don’t have the ties of work or kids to influence where you should live. Acknowledge your status quo but don’t simply accept that life must remain the same. Consider whether a change would improve your life. 

What are the pros and cons of selling stock by specific shares?

I recently got a great question about selling individual stocks by specific shares to manage one’s tax bracket. If you are looking to manage your tax bracket when selling stocks that were bought at different periods of time then it’s a good idea to do multi-year tax projections. Think about what your spending will be like and what your income will be. Where will you obtain that income? What will your tax bracket be? Map it out and model it. Listen in to hear the full explanation of how you should handle selling stocks by specific shares. 

What can average people do about long-term care?

Another listener sees long-term care insurance as a luxury since prices range from $3000-$7000 per year. He is wondering what people with average incomes can do to help with long-term care. Unfortunately, there is no good answer. First off you need to really consider if it is a luxury for you. Can you exchange a different expense like life insurance for long-term care insurance? Is there a way you can mitigate the odds and make some lifestyle changes? You’ll also need to begin discussing this issue with your family. Find out why having this discussion sooner rather than later is important by listening to this episode of Retirement Answer Man. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:53] The Coronavirus and the markets

WHAT DOES THAT MEAN SEGMENT

  • [10:00] What is status quo bias

PRACTICAL PLANNING SEGMENT

  • [11:02] How did you come to live where you do?

THE Q & A SEGMENT

  • [17:08] What are the pros and cons of selling stock by specific shares?
  • [23:50] Buying long-term care is a luxury, what can average people do?
  • [27:55] The goal is to not use long-term care insurance

TODAY’S SMART SPRINT SEGMENT

  • [29:44] Start having this conversation about where to live with your spouse

Resources Mentioned In This Episode

Ask me a question! - 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: RAM315.mp3
Category:general -- posted at: 5:00am CDT

Today as we close out the long term care planning month, Steve Cain returns to the show to discuss hybrid long-term care insurance policies. On the previous episode (#313), Steve Cain gave us the key facts about traditional long-term care insurance and today we explore some alternatives to the traditional long-term care insurance route. This episode will help you understand different options in the long-term care insurance realm. I’ll also answer some listener questions and have our retirement coach, B.W., 

The subject of long-term care can be a tough one to address

This entire month we have discussed how to cope with long-term care risk. While this is not the most exciting or even upbeat topic to learn about it is something to consider. It’s important to address potential risks while we are still of sound mind rather than while we are dealing with them. Examining your options now will lead to better decision making and peace of mind. Listen to this conversation with Steve Cain to arm yourself with knowledge so that you can better weigh your options when it comes to long-term care. 

Hybrid long-term care insurance policies manage risk from a different angle 

The long term care insurance industry has had a lot of trouble in the past and they don’t have the best reputation. But the hybrid long-term care insurance policies are an alternative to the traditional long-term care insurance policies. These policies don’t really have a proper name and can be called a number of things like; hybrid, life with long-term care, asset-based long-term care, or combination long-term care. Even though they don’t have a decent name in place they are an exciting change from traditional long-term care insurance. These policies are life insurance-based products with long-term care riders or additions. Unlike traditional long-term care policies, with these, you are more likely to get something in return for your money. 

There are different types of options in hybrid long-term care

There are many different types of hybrid long-term care options on the market. One is a long-term care solution that is actually rolled into a life insurance policy. Essentially it is whole term life insurance with a separate long-term care component. This insurance has separate buckets of money designated for different purposes. It is a bit more expensive than a traditional long-term care insurance policy but the benefits are guaranteed. Listen in to hear more about this type of hybrid long term care insurance policy and a few others. 

Who needs long-term care insurance?

Long-term care insurance isn’t for everybody. There are some who are affluent enough to be able to self-insure, many more won’t be able to afford this type of insurance. But there are plenty in between those extremes that can consider this type of insurance. There are many different types of insurance and ways to plan for your potential long-term care needs. The key is to have a plan. Be sure to include your family in this discussion, since long-term care is an issue that affects the whole family. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

  • [3:05] Hybrid policies approach long-term care insurance from a different angle
  • [6:30] The long-term care solution atop a life insurance policy 
  • [16:38] What is the return to the premium option?
  • [19:22] Can you repurpose your traditional life insurance policy?
  • [24:35] Who needs long-term care?

COACHES CORNER

  • [27:25] What to do when you are thrown into the role of caregiver

LISTENER QUESTIONS

  • [36:00] A question about annuities
  • [44:10] How to handle holding onto stuff in retirement
  • [49:44] How to evaluate a portfolio manager

TODAY’S SMART SPRINT

  • [60:03] Think about your potential long-term care needs 

Resources Mentioned In This Episode

BOOK - Winning the Losers Game by Charles Ellis

To check out the annuity series start here

Steve Cain

Steve Cain on Twitter@SteveCainLTC

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: RAM314.mp3
Category:general -- posted at: 6:00am CDT

You may know that I am not a fan of traditional long-term care insurance. But that is why we are exploring this topic together. It is important for me to reexamine my biases periodically to see how they hold up. On this episode of Retirement Answer Man, Steve Cain, from LTCI joins me to examine traditional long-term care insurance. I have plenty of questions for him so that we can learn how traditional long-term care insurance works and examine our own risks. Join me by listening to this conversation to learn more about long-term care insurance so that you’ll have the tools to determine if it is right for you. 

How to plan for risk 

There are 5 basic strategies to address a risk and shockingly, ignoring the risk is not one of them. No one likes to think about long-term care, but instead of burying our heads in the sand we need to think about how we will confront this risk. These are the 5 strategies that risk management professionals consider. 

  1. Retain the risk - this means dealing with it yourself
  2. Avoid the risk - not really a possibility in this situation
  3. Mitigate the risk - lower the odds of the risk
  4. Share the risk - use insurance to help to share the risk
  5. Transfer the risk by using insurance to own all of the risk.

Keep these strategies in mind as you listen to the show so that you can begin to consider which one you’ll want to use to consider long-term care.

Is traditional long-term care insurance right for you?

Deciding whether to use traditional long-term care insurance is a difficult decision. The long-term care insurance industry is still in its infancy and there are many factors to consider as a consumer. The industry doesn’t have the best reputation, but Steve Cain is here to help us consider whether traditional long-term care insurance is the best option for our potential long-term care needs

Will the long-term care insurance company be around when we really need it?

We’ve all seen the headlines, long-term care insurance companies raising their rates, or even worse, companies going out of business. How do we know if the insurance company is going to be around when we really need it? Despite the history of problems in the industry, Steve Cain feels that the newer generation of long-term care insurance policies are more stable than the first generations. He feels that the industry has evolved and adapted by learning from the mistakes of the past. Find out why Steve feels the newer insurance policies are more stable than those of the past. 

How are the policies structured?

To get a long-term care insurance policy you’ll have to go through several steps. The companies want to ensure that you won’t need long-term care for a number of years, so they do check your medical history. There are many factors to consider when choosing your policy. The amount you can afford is an important factor. But you’ll also want to consider your lifetime maximum benefit, the maximum benefit amount per month, and you’ll also want to factor for inflation. Find out what else you should consider before you think about getting long-term care insurance. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN SEGMENT

  • [3:00] Lifetime maximum benefit

PRACTICAL PLANNING SEGMENT

  • [7:53] The long term care insurance industry is in its infancy
  • [14:40] What happens to a policy when the company becomes insolvent?
  • [20:30] How does a long-term care policy get crafted?
  • [29:17] The elimination period used to be bigger than it is now
  • [37:14] What is the average premium?

LISTENER QUESTIONS SEGMENT

  • [40:44] Tax diversification in retirement
  • [47:44] A sequence of return risk question

TODAY’S SMART SPRINT SEGMENT

  • [51:30] Consider your long-term care risk

Resources Mentioned In This Episode

Steve Cain

Steve Cain on Twitter @SteveCainLTC

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: RAM313.mp3
Category:general -- posted at: 6:00am CDT

There is a 50% chance that you’ll need long-term care at some point in your future so let’s learn how to mitigate your long-term care risk. Sure, you can always try the long-term care insurance route, but with it being an emerging industry, the underwriting doesn’t have enough data to provide the insurance that you need at a consistent cost you can afford. Long-term care insurance policies still aren’t as robust as home owner’s insurance policies. If you plan to self-insure against long-term care you’ll need to know the risk factors and what your personal risk of needing this type of costly care will be

How to determine your long-term care risk and build a financial framework

One of the scary parts about needing long-term care is that your resources are finite. At that point in life, you won’t be able to fill the gap by working if something happens to you. When self-insuring for long-term care you’ll need to start with the worst-case scenario. The worst-case scenario in a long-term care situation generally means dementia or Alzheimer’s. 

Alzheimer’s care can cost up to $350,000. So this worst-case scenario is how we’ll start to build our framework to self-insure. Next, you need to consider your risk factors to determine the likelihood of the worst-case scenario happening to you. After that, you’ll want to build a plan and stress-test it. Listen in to hear how I simulate financial plans and stress test them. 

What is the difference between dementia and Alzheimer’s? 

For years, Alzheimer’s and dementia were terms that were used interchangeably, but finally, we have gotten to the point where we clarify them. When discussing dementia, we are describing symptoms. But there are more than 200 diseases that can cause symptoms of dementia. Alzheimer’s is a specific disease that presents with symptoms of dementia. 

How to lower your risk for Alzheimer’s

Everyone wants to know what they can do to minimize their risks for Alzheimer’s. The good news is that dementia and memory loss doesn’t happen overnight. Since it is a long, slow process there are little changes we can make to combat the risks. Unfortunately, no one knows what to believe since there is so much fake science on the internet. That’s why Dr. Marc Milstein has joined me today. He is here to give us some actionable items that we can implement to lower our risk for Alzheimer’s. 

5 keys to lower your risk for Alzheimer’s

  1. Sleep is an essential piece of the puzzle. Without proper sleep, our brains build up a type of trash. Proper sleep washes away that trash build up each night. But constant disruption impedes the brain’s ability to get a good cleaning. 
  2. Learn difficult things. Any learning is great, but when you learn something difficult your brain really gets a workout. Challenge your brain in a different way: try learning a foreign language, a new sport, or a new instrument. Train your brain the way you would your muscles at the gym. 
  3. Hearing is important too. If someone is not hearing they are not learning and they are not engaged. Over time the person becomes isolated without even realizing it. Hearing loss is easily treatable with a hearing aid. It helps you stay engaged. 
  4. Stay engaged. Social interaction is good for the brain. 
  5. Treat inflammation. Inflammation is like a fire in the body. Many of us experience inflammation due to poor diet or autoimmune conditions. This inflammation can cause the brain to become inflamed and damaged as well. If you have an autoimmune condition then do whatever you can to lessen the inflammation. 

Listen to this fascinating interview with Dr. Marc Milstein to hear more about what you can do to lessen your chances of getting Alzheimer’s.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN SEGMENT

  • [1:30] What is underwriting?

PRACTICAL PLANNING SEGMENT

  • [3:33] Let’s build a framework
  • [8:45] Long-term care insurance is still an emerging industry
  • [12:43] How powerful is the Alzheimer’s gene?
  • [15:33] What is dementia?
  • [19:00] What can you do to take action to lower our risk of dementia and Alzheimer’s
  • [31:25] What is a good implementation plan?

Resources Mentioned In This Episode

DrMarcMilstein.com

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement

Direct download: RAM312.mp3
Category:general -- posted at: 6:00am CDT

Long-term care is an issue that is really hard to grapple with and talk about. Yet it is an important one that we all need to think about. You may have dealt with it with your own parents or you may be dealing with it now. On this episode, Christine Benz, director of finance with Morningstar and author of 30 Minute Money Solutions, joins me to discuss long-term care, long-term care insurance, and what’s in store for the baby boomers who are now living longer than anyone in history. 

What are ADLs?

When discussing long-term care and long-term care insurance you may hear the term ADL thrown around. Checking someone’s ADLs is a great way to assess if someone is really up to independent living or if it is time to seek assisted living. ADL means activities of daily living. They include tasks such as; personal hygiene, dressing, eating and preparing food, maintaining continence, and mobility. Not only are these indicators an important way to decide if you or a loved one needs long-term care, but they are also used by insurance companies in the same capacity. 

What is a long-term care event?

Often when we think about long-term care we may immediately jump to thinking about dementia, but the reality is that long-term care is needed by people in many different situations. Since the daily care of an ailing elderly male is often shouldered by his spouse, women tend to have more need for long-term care than men. We also tend to think of a long-term care event as being a sudden thing, but more often than not, people graduate up through different levels of care. 

Let’s talk long-term care insurance

The obvious answer to the exorbitant costs of long-term care is to purchase insurance. But the reality is that it’s a broken marketplace. Long-term care insurance holders can suddenly find their rates increasing by 30%-50% or more after paying in for many years. Long-term care insurance is still a relatively new product and the insurers discovered that they initially underpriced their product. Learn about what the future of long-term care insurance may look like and some long-term care insurance alternatives by listening to this interview with Christine Benz. 

Long-term care is scary

Yes, the thought of needing long-term care is scary on many levels. The thought of becoming vulnerable and losing control of your functions at the end of life scares the wits out of us all. But the financial ramifications can be just as scary as well. One way to help ease your mind into this fearsome territory is to plan for it in advance. Listen to this series on long-term care to help you prepare for any eventuality. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [2:45] What are ADL’s?

PRACTICAL PLANNING SEGMENT

  • [5:44] Christine Benz joins me to discuss long-term care
  • [8:07] What is a long-term care event?
  • [16:35] Let’s talk long-term care insurance
  • [19:40] We’re at the beginning of the wave of baby boomers

LISTENER QUESTIONS SEGMENT

  • [26:45] How can Charlotte minimize health insurance costs before Medicare kicks in?
  • [29:21] Can the inherited IRA RMD amounts over 10 years be different or do they have to be the same over that stretch of time?

TODAY’S SMART SPRINT SEGMENT

  • [31:56] Check out the link in 6-Shot Saturday that contains all the data that Christine Benz refers to

Resources Mentioned In This Episode

Healthcare Before Medicare (If you have questions about this topic, start here!)

BOOK - 30 Minute Money Solutions by 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: RAM311.mp3
Category:general -- posted at: 6:00am CDT

Investing in retirement is different than any investing you’ve ever done. The asset allocation that you’ve been doing your whole life won’t cut it in retirement. On this episode, you’ll learn what comes after asset allocation. You’ll also learn how to manage market risk. And BW joins us in the Coaches Corner to discuss how to survive bear markets in retirement. You’ll definitely want to listen in to hear my pie-cake analogy, don’t miss it!

What is asset-liability matching?

Have you ever heard of the term asset-liability matching? This is a term typically used in the pension management world but we can apply it to our own retirement. Asset liability matching is the process of investing in a pool of assets so that cash is available when you need it to cover consumption. It is when you take a pool of assets to cover the short-term but you also need that pool to cover expenses in the long-term as well. This is a good term to refer to how we must cover our retirement expenses. 

Asset allocation is not the only way of investing in retirement

You’ve been told your whole life that you need to focus on your asset allocation when investing. Asset allocation is so important to the accumulation stage of retirement planning. But in retirement, asset allocation is not the only thing to consider. Rather than sowing your seeds for growth, in retirement, you are now reaping the rewards from a lifetime of hard work. So now is the time to rethink your asset allocation strategy. 

The pie-cake analogy

We often refer to asset allocation as a pie. You’ve seen all of those pie charts with different percentages of stocks, bonds, and cash. But instead of a pie, in retirement, what you really need is a cake. One of those big, multi-tiered cakes, like a wedding cake. But the cake you need is actually made of pies. Yep, that’s it! A pie cake! You’ll want to create your cake with 3 or 4 layers and the pies will be made of different things. You really need to listen to hear how amazing this analogy is. 

What should your pie-cake look like?

So you’re all ready to build your pie-cake, but what should it look like? Sure there are layers, but layers of what?

  • Layer 1 - this bottom layer is full of funds that are to be used in the next 2 years so it needs to be made of cash or cash-like investments
  • Layer 2 - this second tier will be funding years 3-6 You’ll want some stability in this layer, but also some income. It could be made of bonds that will be maturing, stable value funds, and some cash.
  • Layer 3 - this layer will have a very different looking pie than the bottom layers. The time frame of this layer is 6-10 years. There will be growth but it will be moderate growth. The objective here is income. A good mix could include bonds, real estate equities, but also consider growth. 
  • Layer 4 - now we are talking 10-15+ years ahead. This is the pie where you can get aggressive. You’ll want this pie to be growth-oriented with more risk and less bonds and cash. 

Listen in to discover how you can build your cake-pie and eat it too!

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN SEGMENT

  • [2:12] Asset liability matching

PRACTICAL PLANNING SEGMENT

  • [3:55] Why asset allocation is not the only way to invest in retirement
  • [6:46] How to figure your asset-liability matching

COACHES CORNER SEGMENT

  • [12:50] How to survive a bear market in retirement
  • [16:26] How we live our life can reflect how we react to a bear market
  • [19:22] What can we do in a bear market?

TODAY’S SMART SPRINT SEGMENT

  • [22:00] Relisten to the pie-cake analogy and think about the tiered approach

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: RAM310.mp3
Category:general -- posted at: 6:00am CDT

Protecting your retirement lifestyle is an important part of retirement planning. You want to know that if everything falls apart you’ll still be able to live the life you want. Well, unfortunately, nothing is absolutely certain and there is no way to protect yourself against everything. However, proper planning can help give you peace of mind. If you’re wondering what on earth you’ll do in the event of a bear market or market crash, listen to this episode to help you understand how to set yourself up for success in retirement.

Retirement is asymmetrical

The 4% rule looks great on paper, but it really isn’t practical when applied to life. Retirement is lumpy and asymmetrical and returns on investment are asymmetrical as well. There are always going to be unexpected expenses. Sometimes expenses will come in the form of opportunities and sometimes the expenses won’t be as much fun. The only thing that is certain is that life is always uncertain. So it is important to prepare for the unexpected. When planning your retirement, you need to remember that life will get in the way. 

It’s all about finding balance

In retirement, you need to find that balance. On one end of the spectrum, you have that near-term market loss and on the other end, you have a loss of purchasing power. 

Let’s learn how to keep the tension between the two of them. 

  1. Know what your spending forecast is. Understand your needs, wants, and wishes. Build a model retirement budget and then categorize your spending in those 3 different categories. 
  2. Determine your fundedness. Are you underfunded, constrained, or overfunded? Know where you fall on this spectrum. The strategies you take will depend on how funded your retirement savings are. Listen in to hear the different strategies to use based on your fundedness. 

The best way to protect your retirement lifestyle

How can you protect your retirement lifestyle? Try using your superpower longer. What is your superpower, you ask. Your human capital. The longer you can continue to bring in income the better off you’ll be. Retirement doesn’t have to be like a light switch. You don’t have to simply turn off the work button. Try pretirement to gain time freedom and flexibility while still maintaining a bit of an income. Pretirement is the best strategy you can use to protect yourself from whatever life throws at you. 

How much is enough?

A listener writes in with a question, how will he know when he has enough to retire? This is such an important question and one that we all struggle with, but it’s not only an external question of how much you have in the bank. You need to go through a process to determine the retirement that’s right for you. Here are some steps you can follow to help:

  1. Determine how much the retirement lifestyle you want will cost.
  2. Create a model retirement budget based on your needs, wants and wishes.
  3. Know what your resources are and strategize from there. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [1:06] Retirement is asymmetrical
  • [3:03] How do we balance near term market loss on one end with loss of purchasing power on the other end?
  • [10:28] Tips to protect yourself

LISTENER QUESTIONS SEGMENT

  • [13:44] BC is wondering whether he should pay off his mortgage
  • [16:50] How much is enough?
  • [24:02] Should gold be a part of your portfolio?

TODAY’S SMART SPRINT SEGMENT

  • [28:05] Revisit your premise that retirement is binary

Resources Mentioned In This Episode

BOOK - Stillness is the Key by Ryan Holiday

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: RAM309.mp3
Category:general -- posted at: 6:00am CDT

Market crashes are black swans. No, not those black swans, unpredictable events beyond what is normally expected with potentially severe consequences. You can probably name all of the market crashes in the past 100 years since they have had an impact on the way we invest. On this episode of Retirement Answer Man, we’re learning about market crashes and the lasting impact they can leave on our psyches. 

Market crashes can leave you with emotional scars

Even though market crashes are not as important to worry about in retirement as bear markets. The real problem with market crashes is the effects they leave behind. Whereas bear markets are long and drawn out, market crashes are sudden and devastating. Similar to a car crash, a market crash can leave emotional scars. We haven’t had many market crashes in recent history, but the ones we have had have left an imprint on our collective memory. 

Market crashes are certainly memorable

You may have seen the long-lasting effects of the 1929 market crash on your parents or grandparents. It changed the way people thought and behaved. The ‘Black Monday’ crash of 1987 drove the market down by 23% in one day. The NASDAQ fell from 5000 to 1000 during the bursting of the dot com bubble in 2001-2002. And of course, more recently, there was 2008 of which many of us still haven’t recovered. 

In retirement, market crashes can be even more traumatic

Does your retirement plan prepare you for a market crash? In retirement, we need to build a system to where a market crash won’t derail our lives. That system should give us enough emotional currency to help us understand that we will be okay no matter what. You don’t want to let a market crash derail your decision making. Does your financial plan account for market crashes?

How would I design a high school finance course?

One listener who is a high school teacher asks, how I would design a financial literacy course for high schoolers. This was a fun question to answer. I hope that financial literacy becomes a course that every high schooler can take. There are several fabulous resources out there that teens can enjoy and learn from. I don’t necessarily think that teaching stock market training is as important as building healthy financial habits. Find out which resources I recommend by listening to the Listener Questions segment of this episode.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

  • [2:20] What is a black swan?

HOT TOPIC SEGMENT

  • [3:30] Let’s talk about market crashes
  • [9:37] In retirement market crashes can be even more traumatic

LISTENER QUESTIONS SEGMENT

  • [11:10] A listener correction about Social Security and COLA
  • [13:08] A question about all Roth contributions
  • [16:20] How would Roger design a high school course?

SMART SPRINT SEGMENT

  • [21:40] Increase your savings rate (or lessen your spending rate) by 5%

Resources Mentioned In This Episode

BOOK - Atomic Habits by James Clear

BOOK - The Richest Man in Babylon by George Clason

BOOK - The Black Swan by Nassim Nicholas Taleb

Episode 306

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: RAM308.mp3
Category:general -- posted at: 6:00am CDT

The thought of bear markets in retirement can be so scary, but they can be a bit less frightening if you have a plan. That’s why we’re taking this month to discuss market downturns and how they affect retirement plans. Every couple of years there will be a 10% correction in the market but this isn’t a bear market. A bear market is at least a 20% decline in the markets. The more you learn the more you’ll be prepared for any eventuality in retirement. Listen in to learn more about bear markets and how they could affect your retirement investments. 

What is a bear market? 

You may have heard the term bear market thrown around loosely, so before we dive in to discuss how they’ll affect you we need to define what a bear market really is. A bear market is a condition or period of time when securities fall 20% or more from recent highs. There is usually a lot of negative sentiment surrounding bear markets. The stock market is usually what we’re talking about when we discuss bear markets but we could be discussing any kind of securities. 

There are 2 types of bear markets that we usually talk about. The cyclical bear market is the more common type. This signifies a short term downturn. There is also a secular bear market which refers to a long-term timeframe of below-average returns. 

A history of bear markets

We have had 12 bear markets since 1945. The average drop was 33%. The most famous bear market was during the great depression and suffered an 86% decline over a 34 month period. The most recent bear market is still fresh for many of us. The 2008 crash lasted 17 months and saw a 56% decline in values. Unfortunately, bear markets don’t all perform the same since past performance is not an indicator of future results. But there are some things we can learn by looking back at history. Listen in to find out what you can learn by looking at bear markets throughout history. 

Bear markets and investing for retirement

The 4% rule is talked about all the time as a retirement strategy. It’s popular because it works very well in a spreadsheet. On this episode, I’ll compare how the 4% rule holds up throughout different bear markets throughout history. Listen in to learn how the 4% rule holds up through various historical models. You’ll learn what you can do to reduce your risk and lessen the impact of a bear market in retirement. 

When to dial back risk

Cathy has an audio question for me. She has enough assets to cover her retirement expenses already, so she wants to know when is the right time to dial back her risk. Obviously, this is a matter of personal opinion and risk tolerance. But there are some things you can consider to gauge how much is enough. First, you should consider if you really have enough. Enough for what? Think about how you could live your best life. Next, you should isolate the excess. During the listener questions segment, you’ll hear the full answer to Cathy’s question as well as 2 more listener questions. Discover whether you should pay off the house or do a Roth conversion and how to assess when it’s time to consider a long term care facility. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN SEGMENT

  • [2:20] What is a bear market?

PRACTICAL PLANNING SEGMENT

  • [4:20] A history of bear markets 
  • [8:02] what does this mean for you in retirement?
  • [15:50] what lessons can you learn from history?

THE LISTENER QUESTION SEGMENT

  • [17:41] When to dial back risk
  • [25:14] Pay off the house or do a Roth conversion?
  • [29:35] Bill asks how to assess when to enter a long-term care facility

TODAY’S SMART SPRINT SEGMENT

  • [32:33] What is your asset allocation?

Resources Mentioned In This Episode

Morning Star’s Instant X-Ray tool

WealthOfCommonSense.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: RAM307.mp3
Category:general -- posted at: 6:00am CDT

The way you invest changes in retirement. Rather than being in the accumulation stage of life, now it’s time for the decumulation stage. But how do you flip that switch? How should your investment strategy change to reflect this new period in your life? During this monthlong series, we’ll be learning how to deal with bear markets and crashes in retirement. You may be thinking, why should I worry about bear markets when 2019 was so hot? Well, that is precisely why you should begin to consider how you would handle a bear market or a crash in retirement. Learn to be prepared for any eventuality by listening to this episode of Retirement Answer Man now. 

Are you trying to fit a square peg into a round hole?

Certain decisions are larger and more important than others. Retirement is one of those high stakes decisions. You’ve got a lot to learn if you are going to get it right. 

Investment strategy is typically built on the idea of accumulating wealth. That’s what you’ve been trying to do your whole life, right? But investing in retirement is quite different than any other kind of investing. When investing in retirement people often try to fit a square peg into a round hole. Listen in to learn why investing the same way you have for your entire adult life won’t work in retirement. 

5 ways that investing in retirement is different than any investing you’ve ever done

  1. The math changes. You have had plenty of time to invest which has allowed you to outperform by investing your money consistently. Unfortunately, retirement turns the tables. Now, instead of investing systematically, you are taking money out of the market systematically. 
  2. You have lost your superpower. You no longer have the ability to earn income. This can really affect you psychologically. When you were working you could simply earn your way out of many financial missteps. 
  3. Fear of missing out. Do you feel like you're missing out on the next best thing?
  4. Statistics are good at lying. We tend to think in statistics, but unfortunately, statistics aren’t very good for decision making.
  5. You only get one shot at this. Unlike the accumulation phase of life, there are no do-overs. 

The Secure Act passed!

In a rare act of unity Congress actually got something done! We’ve discussed what the Secure Act might mean for you in previous episodes, but now it has officially become law. This means that there are changes coming to a retirement near you. This bill has changed RMD’s, IRA limits, 401K’s, and done away with Stretch IRA’s. Find out what the Secure Act could mean for your retirement by listening to this episode of Retirement Answer Man.

What does sequence of return risk mean?

When researching retirement you may have heard the term sequence of return risk thrown around. But do you really know what that means? You may plan on getting 5% returns, but steady returns on investment rarely happen. You could get 0% one year and 12% the next. Find out how bad returns at the beginning of your retirement can impact the viability of your overall retirement plans. Make sure you’re signed up for 6-Shot Saturday to see plenty of examples of sequence of return risk. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [4:28] 5 ways that investing in retirement is different than before 

PRACTICAL PLANNING SEGMENT

  • [18:05] Our words for the year
  • [23:06] The Secure Act passed!

LISTENER QUESTIONS

  • [27:48] How to maintain a balanced portfolio in a bear market

WHAT DOES THAT MEAN?

  • [34:43] Sequence of return risk

SMART SPRINT SEGMENT

  • [37:25] What is your word for the year?

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: RAM306.mp3
Category:general -- posted at: 6:00am CDT

This is the episode to listen to if you are looking for hacks to save money on travel. You’ll hear my personal travel tips, as well as tips from the Rock Retirement Club, and international travel hacks. BW also joins in for the Coach’s Corner segment to enlighten us on his own views on how travel can benefit your retirement. You won’t want to miss this episode. Make sure to take notes on these travel hacks that will save you money. 

Hacks to save money on your retirement travel

Where will you go in your retirement? Have you already started planning your retirement trips? Planning the logistics of travel can be tricky but I like to use Google Flights to help me search for the best prices. Google Flights can be dynamic and your flexibility can really save you money. Use the alert function to set price alerts for places you want to go. 

I also use my network of friends and acquaintances to get tips on where to go and what to do when I’m planning a trip somewhere. The people you know can really enhance your travel experiences. You never know who has been to the places you want to go. 

Travel tips from the Rock Retirement Club

The Rock Retirement Club is an amazing hive of knowledge. I love tapping into this invaluable resource. The members of this club have some great tips to share with you. Here are a few. 

  1. Utilize Costco Travel, Scott’s Cheap Flights, or your favorite airline’s credit card.
  2. If you visit a place annually make a checklist to make it easy to remember things you want to do or places you love to go.
  3. Sign up for TSA Precheck or Global Entry to fly through those lines
  4. Plan ahead, especially for popular national parks
  5. Don’t overschedule your time. You need downtime and flexibility.

Learn how to improve your travel experience in retirement by listening to this episode to hear all our collective travel tips. 

Hacks for international travel

Retirement is a great time to finally experience the world. But planning international travel can be daunting. You’ll be in a foreign place where you don’t understand the language or customs. Some of these travel tips can ease your worries about international travel. 

  1. Purchase travel insurance. You never know when you’ll need to use it.
  2. Get your cell phone service in order. Listen in to find out how I ended up with a $1000 phone bill after one international trip!
  3. Sign up for the Smart Traveler Enrollment Program through the U.S Embassy.
  4. Check the CDC for vaccine information and health risks if you plan to go to some exotic locales.
  5. Get a medical pack from your doctor to be prepared for any situation

This episode is chocked full of travel hacks and you’ve got to listen to hear them all.

What will the Secure Act mean for you?

It looks like the Secure Act will pass and become the law before the end of the year. This will mean significant changes are coming to retirement planning. This Act contains 29 provisions, some of which will be big changes, but others won’t have much of an impact. Here are a few changes you might see in the coming year. 

  1. Required Minimum Distributions will move from age 70 ½ to 72. 
  2. The RMD life expectancy table will change as well. 
  3. The Secure Act will repeal the maximum age to contribute to an IRA
  4. The new law will get rid of the Stretch IRA. Find out what that means for you and your heirs by listening in! 
  5. I’m so excited that it will be easier for small businesses to offer 401Ks to their employees. 

You’ll have to listen in to hear the rest of the ways that the Secure Act will change saving for retirement.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:33] Tips on how to save money on travel 
  • [7:45] Why it is important to tell your network of your travel plans
  • [9:23] Tips from the RRC
  • [14:30] International travel tips

WHAT DOES THAT MEAN SEGMENT

  • [19:40] What will the Secure Act mean for you?

COACH’S CORNER SEGMENT

  • [27:00] The anticipation of travel can be a lot of fun

TODAY’S SMART SPRINT SEGMENT

  • [35:15] Think about the person you want to become next year

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: RAM305.mp3
Category:general -- posted at: 6:00am CDT

Where will your journeys in retirement take you? Now that you’ve learned about dreaming up your retirement travel plans and how to pay for it all, it’s time to get to work mapping out your journeys. On this episode, I’ll walk you through how to choose where to go for those initial travels in retirement. You’ll also find out why you shouldn’t lump all of your 401K contributions into the first few months of the year. And finally, I answer a listener question on a topic that I thought I covered but hadn’t. We’ve got lot’s of fantastic information for you so grab your headphones and press play!

Why does travel always get pushed aside?

There is always something more important than travel. Even when we have the time, money, and opportunity we still sometimes miss out on traveling. Sure, we all have good reasons for doing so, but we may not have this window of opportunity again. The beginning of retirement is the ideal time to pursue your travel dreams. This is the perfect time! You have the time, the money, and the opportunity. Go now! Don’t miss out. 

How do you prioritize your journeys?

Hopefully, after listening to episode 302, you’ve already created your bucket list separately from your spouse. Now it’s time to get together and create a master list and prioritize the trips that you want to do together. The first thing you need to think of is, which places are physically strenuous? You’ll want to put those places at the top of the list since you are as healthy and mobile as you are going to get. 

Next, think of creating a list of places that you want to go together with your spouse. Then create another list of places you want to go, but your spouse doesn’t. You can choose to go to those places on your own, with friends, or with other members of your family. 

Finally, pick which one you want to do first and book it! Seriously, put the dates on the calendar now. Block out those dates and begin creating a research folder on that location. Listen in to hear why you’ll want to start chatting with your friends immediately about your next trip. 

Reflections on our word of the year

If you have been a long-time listener, you know that Nichole and I chose a word at the beginning of each year to be our guiding light throughout the year. That word becomes the focus of our energy, and we try to keep it at the forefront of our minds. Now that 2019 is coming to a close we’re taking a moment to reflect on how we did with our words. The word I chose for this year was Embrace. I chose this word so that I could embrace the moment of life that I am in right now. Nichole chose Flow since she wanted to learn how to go with the flow. Did you chose a word this year? Let us know how you did with it, we’d love to hear!

Why you should consider Roth conversions

A dear listener commented recently on the fact that I didn’t really touch on Roth conversions during the Retirement Tax Management Series. The bad news is: I was wrong in thinking that I had already covered Roth conversions in depth. The good news is: we will have a whole monthlong series on Roth conversions in 2020. But if you can’t wait that long then you’ll want to listen in to find out 2 reasons why you should consider Roth conversions. By listening you’ll also learn how to avoid a costly mistake with your 401K contribution. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT 

  • [3:30] There’s always something more important than travel 
  • [7:56] Making connections is important in travel planning

LISTENER QUESTIONS

  • [18:30] How did we do with our words of the year?
  • [24:53] It’s not wise to max out your 401K contributions
  • [27:40] I haven’t deeply covered Roth conversions on the show

TODAY’S SMART SPRINT SEGMENT

  • [39:25] Decide on your word for 2020

Resources Mentioned In This Episode

Michael Kitces Podcast

Surfin bird video

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: RAM304.mp3
Category:general -- posted at: 6:00am CDT

If you want to travel in retirement then you’ll have to go about creating a budget first. In this episode of Retirement Answer Man, I’ll walk you through the basics of creating a travel budget. You’ll learn how to categorize the types of travel you envision and then you’ll discover how to break down your expenditures. Check out this episode to get into the traveling mindset so that you can travel without the worry that you’re doing something you can’t afford.

How can creating a budget for retirement travel allow you to travel without regret?

You know you want to travel in retirement, but how much should you spend on travel? One way to begin to budget for travel is to divide your retirement travel into separate categories. First, you have car trips, plane trips, and weekend getaways. Next, come the annual vacations. Then you have your extraordinary trips or bucket list items. Once you have your travel categories laid out then you can take a SWAG (A sophisticated, wild, awesome guess!) at how much they may cost. At this point in time, there is no need to dive too deeply into counting the cost. 

Top-down or bottom-up?

What is a reasonable amount you can expect to spend over life’s normal expenditures? And just how do you go about budgeting for a trip you have never taken? Well, there are 2 ways you can choose from. The top-down approach is taken when you find an amount that you are comfortable spending and you fit your trip into that financial constraint. The choices you make will be influenced by the amount you decide is right. 

If you like a more detailed analysis you may prefer the bottom-up approach to budgeting. This involves estimating your expenses for each individual line item. You consider the costs of transportation, lodging, eating, and entertainment and then build your budget around those factors. The advantage of this method is that it is specific and you will understand how much you spend on each. How do you traditionally budget for vacations?

How do you pay for vacations in retirement? 

So now that you understand how to create a budget for your retirement travels, how do you actually pay for it? In retirement, the only paycheck you have is the one that comes from your savings. There are a few ways you can go about paying for your trips in retirement. You can add the amount you need for next year’s travel to your cash reserves. Some people opt to do part-time work with their paychecks earmarked for travel. This gives them peace of mind that they aren’t dipping into their nest egg. How will you fund your retirement travel?

What do you do if you suddenly come into money?

On our new listener questions segment, one listener asks what she should do now that she has suddenly and unexpectedly come into a large amount of money. People are quick to offer advice and want to help you decide what to do if you come into newfound wealth. But my first piece of advice is to take some time and breathe. Just let the money sit in the bank until you are ready to decide what to do. When you’re ready, then you can choose a team to help advise you on taxes and finance. Check out 6-Shot Saturday to find the questions you should be asking when you interview potential candidates. And listen in to find out why you need a fiduciary on your side to help you come up with a financial strategy that matches your goals. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:12] How do we budget retirement dreams to travel without regret?
  • [14:00] How do you pay for the trip?

LISTENER QUESTIONS SEGMENT

  • [21:10] What do you do when you suddenly come into money?
  • [29:11] Fund 401K each year?
  • [30:00] How to determine the value of a pension?

WHAT DOES THAT MEAN?

  • [34:45] What is the difference between social capital, human capital, and financial capital?

TODAY’S SMART SPRINT SEGMENT

  • [37:00] Start thinking about your ‘word’ for 2020

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: RAM303.mp3
Category:general -- posted at: 6:00am CDT

Is there anything more exciting than planning your travel in retirement? During our recent listener survey, we asked you what you were most excited about in retirement. Number one on the list was time freedom and number two was travel. December is the perfect time to plan your travels for the next year which is why we decided to explore travel in retirement over the course of this month-long series. Learn how to dream up your ideal vacation on this episode of Retirement Answer Man. 

What is our most precious resource? 

Do you think money is your most precious resource? What about time? We always feel like we have an endless supply of time until we get sick or someone around us passes away. When we are young time feels infinite, but as we age we realize that it’s not. Time is something we always feel we don’t have enough of, we can’t store it, rent it, or buy, it. Yet we all seem to waste time in different ways--from watching TV, to browsing social media, or aimlessly searching for distraction. Do you value time over money? Do your choices reflect your values? Would you walk away from a million dollars to gain more time with family?

How to create your ideal vision for travel in retirement

Sure you know you want to travel more in retirement, but how do you begin to plan what you want to do? First, you need to discover what you want to do. You need to get a good idea of your vision. You can think creatively about what it is you really want to do to create the rich life you envision for yourself in retirement. 

There are 2 types of travel people usually think about: the normal yearly vacations and the bucket list travel goals. Learn how to plan both by listening in and learning the questions you should be asking yourself about how you want to travel in retirement.

Define your travel goals

Think about how you want to travel. Where do you want to go? Do you prefer rural or urban locations? Sun or snow? Beaches or mountains? Do you prefer to travel with a group, alone, or just you and your spouse? Do you need to have everything planned out for you, or do you prefer to just go with the flow? Do you crave leisure, activity, or fitness? You can use these questions to create a vision for where and how you want to travel in retirement. Learn what else you can consider when mapping out your travel goals in retirement. 

What tools can you use to help you plan to travel in retirement?

Now that you know what to consider when dreaming up your ideal vacation, you need some tools to help you plan. I love my giant NeuYear wall calendar, it helps me quickly see where my vacations fall amidst the rest of my year. One way to begin brainstorming is to create a mindmap. This allows you to take an idea and then expand upon it by adding new layers and ideas. If you are a visual person, you may enjoy creating a vision board. How will you begin to plan your retirement travel?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:02] What is our most precious resource?

PRACTICAL PLANNING SEGMENT

  • [8:44] How to create your vision for travel in retirement
  • [11:00] What kind of travel suits you?
  • [23:12] Tools you can use

TODAY’S SMART SPRINT SEGMENT

  • [26:50] Start mapping out your retirement travel

Resources Mentioned In This Episode

MindNode

NeuYear Wall Calendar

BOOK - The Effective Executive by Peter Drucker

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: RAM302.mp3
Category:general -- posted at: 6:00am CDT

After all of the retirement tax management topics over the past few episodes, today we finally get to withdrawal strategies. We are wrapping up our monthlong series on retirement tax management, so make sure you listen to the previous 3 episodes to get the scoop on managing your taxes in retirement. This is a huge topic that we will definitely revisit in the future. But today you can get some great tips on how to manage income in retirement, dangers to look out for, and withdrawal strategies. When you’re done listening, head on over to RogerWhitney.com and take our listener survey to give us your input on the show. 

Christmas gift ideas for those that have everything

  • NeuYear Calendar - This is a great idea if you are within 5 years of retirement. I have this huge 5-foot wall calendar. It’s a great way to plan your vacations, your countdown to retirement, or you can use it as a jumpstart to a vision board. 
  • Everplans - This is a $75/year subscription service that is a platform where you can store all of your important documents and passwords together online. The online portal can help you organize everything you need. The beauty of this service is that you can assign delegates to see as much or as little as you choose. Or they can access it only when you pass away. *If you are an annual member of RRC you get a subscription to Everplans included with your membership. 
  • Smart plugs - These are really cool plugs that can connect to your phone via an app and you can control your lights from different locations
  • Away Luggage - Great for all that traveling you have planned in retirement.
  • Airpods Pro - A great gift for Apple enthusiasts.
  • Give’r gloves - Outdoor gloves that last, you can even have them branded for a more personal touch. 
  • Perini Steaks - Who doesn’t love a good Texas steak?!
  • Cutco Knives- Sure, we’ve all heard the sales pitch, but seriously these are fantastic knives! Get them engraved to add a personal touch.

Meet BW, our host of the new Coaches Corner segment

We’re starting a new once a month segment that includes coaching tips for the theme of the month. These tips aren’t on the financial side of things, but rather the more personal side. BW is a certified retirement coach who is also the head of the education department at the Rock Retirement Club. BW will bring research and coaching tips to help you learn to ease into and then thrive in retirement. Topics may include work reorientation, replacing work functions, life meaning and purpose, family and relationships, how to fill your day in retirement, or health and leisure. Listen to the new Coaches Corner segment to meet BW and hear his tips on tax management in retirement. 

Taxes to be aware of in retirement

Tax management in retirement is a multi-dimensional puzzle. There is so much to consider, but that’s why you’re planning ahead by listening to this show! Let’s look at some taxes you need to be aware of in retirement:

  • Social Security taxes 
  • IRMAA surcharges - Remember these reflect 2 years in the past. 
  • Income taxes and income tax brackets - Become more familiar with them since you now have more control of your income in retirement.
  • Required minimum distributions - Once it starts it never stops!

Withdrawal strategies you can use to help plan your taxes in retirement

Even though there are lots of scary new taxes to be aware of in retirement. It’s actually an exciting time, tax-wise, because you have much more control of your taxes than ever before. You are in control of your income and you can time it in ways you never have been able to before. And there are plenty of other strategies you can use to help you manage your taxable income. Consider doing Roth conversions, strategic gifting, and timing your Social Security to help you manage your taxes in retirement. Listen in to learn how to create a dashboard and plan your taxes year by year. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:30] I am thankful for all of you
  • [4:25] Christmas gift ideas for those that have everything

COACHES CORNER

  • [14:00] Meet BW, Retirement Coach Extraordinaire

PRACTICAL PLANNING SEGMENT

  • [20:38] Taxes to be aware of in retirement
  • [23:49] Dangers to be aware of 
  • [29:32] The tools we have in our toolbox to battle the tax giant
  • [33:49] Create a dashboard

THE THANKFUL LAB SEGMENT

  • [39:43] I’m thankful for the Detroit Lions

TODAY’S SMART SPRINT SEGMENT

  • [41:30] Start thinking about your withdrawal strategy

Resources Mentioned In This Episode

Perini Steaks

Give’R gloves

EverPlans

NeuYear Calendar

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: RAM301.mp3
Category:general -- posted at: 6:00am CDT

There is a lot to consider when planning tax management in retirement. You’ve got to think about RMD’s, tax brackets, Medicare, and IRMAA. You may have heard of IRMAA and been wondering just what this mysterious acronym is. On this episode of Retirement Answer Man, you’ll learn about Medicare and IRMAA and how exactly this all fits into your retirement tax management plan. You need to understand all the levers available to make the most of tax management in retirement. 

Highlights I’ve learned over the past 300 episodes

  • Consistency is so important. My daily habits keep me on track
  • You all have helped me learn how to define the agile retirement planning process. 
  • My team is amazing!
  • Listeners provide the ultimate feedback loop. We have created a safe place to interact and have discussions surrounding retirement. We have listeners from all over the world!
  • I know my purpose and I’m acting it out each day.

Can this exercise help you consider if you are ready for retirement?

I recently had a client that didn’t think he was ready for retirement. He thought there would be a huge void in his life. How would he spend his days? So to get an idea about this he decided to make a list. Not a bucket list, but a list of things he wanted to do with his time. Things like: practice playing guitar, learning to play golf, mentoring kids. These were just some of the day to day items he considered. Next, he decided to map out an ideal schedule for an entire month. Find out what he discovered by listening in!

Who is this IRMAA, and why is she in my Medicare?

In 2007 Congress passed a law allowing a surcharge on part of your Medicare benefit if you make over a certain amount. IRMAA is that surcharge on Medicare Part B and Part D. If you make over $85,000 if you are single or $170,000 if you are married then IRMAA will apply to your Medicare Part B and D. One important aspect about IRMAA is that it considers your income, not from last year, but from 2 years ago. Listen in to find out how much this surcharge is. 

What are some tax strategies you can implement to avoid IRMAA?

The number one rule of tax management is: don’t let the tax tail wag the dog! You will need to consider if IRMAA is worth all the trouble to avoid. Consider these strategies to see if they can help you avoid the IRMAA surcharge.

  • Be aware of temporary spikes in income, be more thoughtful about how you spend money as you approach Medicare age.
  • Be aware of your required minimum distributions (RMD). You’ll want to be aware, from a tax perspective, but now you can consider IRMAA as well.
  • Use Partial Roth conversions now to try and minimize your RMD later on
  • Multi-year tax planning so important in retirement because you finally have ultimate control over your taxes
  • Start to build some balance in your balance sheet.
  • Consider funding your HSA early on. You can keep the bills for years and create a tax-free slush fund. 
  • If you don’t need the extra income, but have to take it due to RMD, do a qualified charitable distribution to minimize your income.

How will IRMAA affect you? Will you jump through hoops to avoid it?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:30] Highlights I’ve learned over the past 5 years
  • [6:12] Do I really want to retire?

PRACTICAL PLANNING SEGMENT

  • [9:30] Who is IRMAA?
  • [16:00] How will IRMAA affect you?

THE THANKFUL LAB SEGMENT

  • [21:56] I’m thankful for being brave

TODAY’S SMART SPRINT SEGMENT

  • [24:02] Take our annual listener survey!

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: RAM300.mp3
Category:general -- posted at: 6:00am CDT

Nobody likes taxes, but tax management in retirement doesn’t have to hurt so bad. During this Retirement Tax Management series, you’ll learn about tools and tricks you can use during retirement to lessen your tax burden and make paying taxes as painless as possible. On this episode, we’ll focus on Social Security and how it affects your tax burden. You’ll also hear retirement tax tips from a variety of other professionals. Make sure to listen to the whole series to learn as much as you can and when you’re done be sure to take the listener survey so that we can get your opinions to refine the show to cover topics that interest you. 

Tax management tips from a variety of professionals

When looking for good advice it helps to crowdsource to hear a variety of tips. Check out these ideas to help you lessen your tax burden in retirement. 

  1. CFA, CFP and writer, Peter Lazaroff, focuses his advice on limiting your RMD liability. He encourages listeners to minimize their RMD liability early on, prior to age 70 ½, by doing partial Roth conversions. It’s important to remember all of those pretax dollars will be taxed eventually. Think about it early on so you won’t get stuck with a huge tax bill at age 70 ½. 
  2. Julie is currently maxing out her husband’s 401K to save for retirement, In addition, she is funding an HSA with pre-tax money. She is paying cash for her medical bills now and saving those receipts to withdraw from the HSA in retirement. She is using the HSA like a slush fund. Julie also uses a donor-advised fund for charitable giving.
  3. Brandon Renfro Ph.D. encourages you to consider your multi-year tax rate. In retirement, income is multi-dimensional and you can manage when you 
  4. Michael Hennessy, CFA, CFP, recommends using a qualified charitable distribution if you are charitably inclined. When having to take your RMD, if you don’t need the full amount of money, give it away. This will help with IRMA as well as help you manage your tax brackets. 
  5. Michael Molitoris suggests auto-withholding a portion of your IRA distribution for tax purposes. Make sure to also withhold taxes from your Social Security check. This will help save you from filing quarterly taxes and it will further save you from a huge tax bill. 
  6. Ashley Daniels use your tax return as a tool to help you think about tax brackets, IRMAA, and Social Security. 

What can you do to help you get ready to plan for your Social Security benefit?

As you are sitting here thinking about Social Security and retirement, you might be wondering what you can do to be proactive. There are 2 things you can do right now. First, go to ssa.gov and set up your login to begin to manage your account. Review your earnings history, give it a once over to make sure it is reported correctly. Your benefit is based on the reported earnings history so you’ll want to make sure they are in the right ballpark and act early if something is amiss. 

Secondly, check out the retirement estimator calculator. This is a great tool to help you with multi-year tax planning which is imperative in retirement. 

Are your social security benefits taxable?

Wait! I already paid taxes on my Social Security benefits, why are they taxing me again? This is why we’re learning about retirement tax management now. So there won’t be any surprises later. Your Social Security benefit is taxable but only up to a certain amount. It really depends on your adjusted gross income (AGI) and your nontaxable interest accounts. Make sure you listen to the examples I give to fully understand when and how your Social Security benefits are taxed. 

What can you do now to help manage future taxes?

In your working years, you don’t really have control over your tax bracket or how much you will owe, but in retirement, you can have a lot of control if you are proactive. Multi-year tax planning is so important and that’s why you are listening to Retirement Answer Man now. 

There are several strategies that you can think about using to manage your taxes. Consider these:

  • Delay Social Security while you take distributions from your IRA’s or earn income in pretirement
  • Start converting your IRA’s to Roth IRA’s early
  • Consider multi-year tax strategies to think about your IRA withdrawals
  • Fill your tax bracket

Make sure to listen in next week to meet our old friend IRMAA and find out how she could affect your Medicare premiums. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [4:00] Tax tips from financial advisors

PRACTICAL PLANNING SEGMENT

  • [11:40] How does the tax scheme work in retirement for your Social Security benefit
  • [14:07] Are your Social Security benefits taxable?
  • [17:45] Let’s look at an example
  • [23:22] What can you do now to plan for the future?

THE THANKFUL LAB SEGMENT

  • [26:30] I’m thankful for the listener interaction we get

TODAY’S SMART SPRINT SEGMENT

  • [28:14] Go register at SSA.gov and check out the new retirement calculator

Resources Mentioned In This Episode

SSA.gov

Retirement Estimator Calculator

IRS Publication 915

BOOK - Making Money Simple by Peter Lazaroff

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: RAM.mp3
Category:general -- posted at: 6:00am CDT

Wait, did you think that tax management would become easier in retirement? That’s hilarious! Managing your taxes in retirement can be a scary endeavor. There are new terms popping up at you from every direction. That’s why we’re taking this whole month to discuss retirement tax management. With a little bit of education, you won’t find tax management in retirement that daunting. Start your education in retirement tax management by listening to this episode of Retirement Answer Man. 

Should we all jump on Michael Kitces’ rising equity glide path?

Last month we presented Michael Kitces’ argument for the rising equity glide path. This academic theory of investing goes against everything that seems natural to an investor. The idea is that the investor should get more aggressive as they get older since that is when the sequence of return risk is the greatest and they have the longest amount of time ahead of them. A listener was wondering why we would air this on the show if we weren’t advocating that our listeners go out and try this with their own investments. Remember, I am here to present research to help you all stay informed and so that you can understand and identify risks. I am not advocating that you do anything. I don’t know you and cannot give you advice on this show. 

Don’t miss this opportunity to save money!

Retirement tax management is one of the most missed opportunities in retirement. It is commonly missed because it is so confusing to advisors. In addition, financial advisors can’t give tax advice, we can only be tax-aware. Most CPAs aren’t as familiar with all of the tax opportunities in retirement either. They are so used to recommending deferring taxes for as long as possible. And while that’s a great plan for the accumulation stage of retirement planning, once you retire you need to come up with a new tax strategy. Do you have a tax strategy that you plan to use in retirement? How is it different from your tax strategy in your working years? 

Why is multi-year tax planning important in retirement?

In retirement, it’s time to stop thinking of your taxes one year at a time. Multi-year retirement tax planning will save you money in the long run. Small things can add up to make a big difference over the long-term. One of the coolest things about retirement is your flexibility in realizing income. There are also actions you can take now to help your future self out from a tax perspective. Do you have a plan to manage your assets in retirement? Have you thought about tax planning in retirement?

Retirement tax management starts with knowing the different tax brackets

It’s important to become familiar with the different tax brackets. Retirement is probably the only time in your life where you can actively manage your income. Retirement income is usually a combination of after-tax assets, pretax assets, tax-free assets, and income. These are the raw resources you can use to create a retirement income. Once you know the different tax brackets you can understand where you want to fall and how much wiggle room you have to continue to stay in the tax bracket that you want to be in. Find out what other tools you have to manage your taxes in retirement by listening to this episode of Retirement Answer Man.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:56] A listener had a question about the rising equity glide path

PRACTICAL PLANNING SEGMENT

  • [10:25] Retirement tax management is one of the most missed opportunities in retirement.
  • [12:34] What materials do you have to manage your taxes in retirement?
  • [14:00] What are the tax brackets?
  • [17:35] What opportunities can you take to manage taxes in retirement?

THE HAPPY LAB SEGMENT

  • [19:48] It’s easy to assume the worst, but try not to

TODAY’S SMART SPRINT SEGMENT

  • [22:03] Focus on not predetermining the outcome of things. Just let it flow

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: RAM298.mp3
Category:general -- posted at: 6:00am CDT

Do you use index-based investments? There is a trend towards passive investing as people are stepping away from high fee managed funds. There are many positives in passive, index-based investments, but there are some downsides too. In this classic episode, we explore the downfalls that can come with index-based investments. If you are on the passive investing bandwagon you’ll want to discover what the negatives are to have all the information and make intelligent decisions. 

Should we all move to passive investing?

Passive based investing seems to be taking over the investment management world. In 2000 only 12% of stock market investment assets were passive based. In 2005 that number rose to 17%, in 2010 it rose again to 25%. In 2016 the percentage of passive based investments rose to 42%. Although the number of passive investments has still not caught up with active investments, the trend is heading that way. 

Over the past 10 years, the S&P 500 outperformed hedge funds. Active stock managers have failed to beat their indexes over the previous years and they continually lose money. Since they charge high fees and lose money does that mean we should all move to passive investing? 

Does index-based investing make the market less efficient or more efficient?

We know how efficient index-based investments can be. Taking out the middle man of stock managers streamlines the entire process and make investing much less expensive. But is it actually more efficient? Might passive investing be less efficient because if so much of every dollar is going into the same indices? The average buyer is buying without respect to any fundamentals of investing.

We also need to consider that all of this money is going to the same companies. The largest companies have the largest influence on the index. 20-30 companies influence the whole index. More and more money is flowing to fewer and fewer stocks as index-based investing gets bigger. 

What will happen when we enter a bear market?

We all know that markets rise and fall. After being in a bull market for so long we know that a bear market is sure to follow. But if all of our assets are funneled into fewer and fewer stocks what will happen when the bottom falls out? In bad markets investors sell. This will cause these large companies’ stocks that are tied to these investments to all even further. You’ll want to consider a solution I have for continuing small-fee, indexed based investing. Make sure to listen in to find out what you can do to protect yourself in a bear market and still passively invest. 

Should Tyler use future raises to pay down debt?

What should you do when you get a raise? How do you allocate that money to support your family? One listener is considering what to do with new income when he gets a raise. 

I encourage you to think about income from a net worth perspective. There are only 5 things you can do with money: spend it, give it away, pay down debt, save it, or invest it. It’s helpful to think of things in that order. Look at your net worth statement ot identify where the imbalances might be. Focus on what you can control because we will always be living in uncertain political times. Listen to this episode to hear more great listener questions.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:36] Should we all move to passive investing?
  • [8:00] Does passive investing make the market less efficient or more efficient?
  • [10:59] What will happen when we enter a bear market?
  • [12:45] What are the solutions?

PRACTICAL PLANNING SEGMENT

  • [16:32] Should Tyler use future raises to pay down debt?
  • [22:45] What are red flags to look for when hiring a financial advisor?
  • [32:22] Should Keith pay off mortgages or save for retirement?
  • [34:33] Timothy has an RMD question

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: RAM297.mp3
Category:general -- posted at: 6:00am CDT

Are work and retirement mutually exclusive? Here at the Retirement Answer Man world headquarters, we don’t think so. On this classic (throwback?) episode, we revisit the idea of pretirement. Pretirement is the concept that you can work and retire at the same time. If you aren’t ready to hang up your hat and sit on the park bench of life, you’ll want to explore the concept of pretirement. Listen to this vintage episode of Retirement Answer Man to ponder the idea of work and retirement and discover if this is the right concept for you. 

Hard-at-work-October is progressing beautifully

Are you ready for the most amazing, comprehensive retirement course ever created? All of us here at Retirement Answer Man HQ are busy creating a life-changing course that will help you rock your retirement. The good news is, this retirement course will be an exclusive benefit for everyone that has joined the Rock Retirement Club. If you’re not a member yet, make sure to join before November 1 to lock in your low lifetime price. 

Are you one of the millions of Americans in a sad state of retirement readiness?

Pick up any news article on retirement and you are bound to read about the fact that Americans don’t save or invest enough to support themselves over the course of retirement. We are healthier and living longer than ever before and our savings numbers just don’t work. But what is the right amount of money to have saved anyway? Whether you are worth $50,000, $500,000, or $5 million there will still be the feeling that you just don’t have enough. 

Do you think of retirement as a light switch between work and retirement?

According to a recent survey among Retirement Answer Man listeners, freedom is the number one aspect to retirement that you all look forward to. Be strategic about how to put a plan in place to slow down your working pace. Pretirement is the strategic phase in which you still earn income (maybe less than before) but you gain the time freedom that most seek from retirement. Rather than seeing retirement as an off-switch to working, pretirement is more like a dimmer switch. 

What are some benefits of pretirement?

  • It takes the pressure off of you to save everything you can
  • It takes away the worry about the economy
  • At the beginning of your retirement, your skills are still relevant and you still have a network of work contacts
  • Your longevity risk and market risk are the greatest at the beginning of retirement. Pretirement eases these risks
  • The retirement transition is a period of significant change, pretirement can ease you into that change 
  • You don’t have to dip into your savings so soon so your investments can continue to grow
  • You can delay taking Social Security which increases your benefits
  • You may experience a reduction in healthcare costs

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [6:46] Most Americans feel that they are not retirement ready

PRACTICAL PLANNING SEGMENT

  • [9:15] What excites you most about retirement?
  • [16:09] Why is pretirement important?
  • [19:42] What are the benefits of pretirement?
  • [27:22] What are some qualitative benefits of pretirement?
  • [33:28] Tips to start planning pretirement
  • [36:48] Some examples of pretirement work

TODAY’S SMART SPRINT SEGMENT

  • [38:09] Think about what you might want to do for pretirement work

THE HAPPY LAB SEGMENT

  • [38:58] You have a choice about how you respond to things

Resources Mentioned In This Episode

BOOK - The 100 Year Life by Andrew Scott and Lynda Gratton

BOOK - Built to Sell by John Warrillow

Couple Money Podcast

Stacking Benjamins

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: RAM296.mp3
Category:general -- posted at: 6:00am CDT

In all of your planning, have you planned for happiness in retirement? Many people just look at the facts and figures in their retirement and they don’t stop to think about how they will create their own happiness in retirement. On this classic episode of Retirement Answer Man, we revisit an oldie but goodie. Listen to this episode to see if you can discover why this was the one that made Nichole decide once and for all that she wanted to come work with me!

Are you ready for the most epic retirement course ever?

During this hard at work October the Retirement Answer Man team is busy creating The Most Comprehensive Retirement Course EVER! (Yes it’s that great that it needs to be capitalized!) Our Rock Retirement Course will be the most comprehensive retirement course in the history of retirement courses. This course will be your roadmap for creating a rockin’ retirement. Also, don’t forget that we are in the last few weeks for you to take advantage of the low price of the Rock Retirement Club. Starting November 1 the price for the Rock Retirement Club goes up, so sign up today to become a member of the most awesome group on the internet. 

Why planning for happiness in retirement is even more important than financial planning

When you sit down and plan for retirement most people consider the normal questions. How much do I have? How will I disperse my money? This is what we think of when planning for retirement. Most people don’t stop to think how will I be happy? Retirement is a time of great change in your life. It is much like leaving college to start your career. The trajectory of your life will completely change. So this makes it a great time to consider who do you want to be for the rest of your life? Once you know that then you can think about how you are going to build the life that you want to build. Discover how to map out a meaningful life in retirement on this episode of Retirement Answer Man.

Why you need a life of congruence

Congruence means the state achieved by coming together. It is a state of agreement. If you say you value A, B, and C are you living your life that is congruent with your values? In my younger years, my actual life did not reflect my values at all. I had a great job, wife, and kids. But I was often a jerk to those I loved the most. I had to sit down and define my values before I could begin to live a life that was congruent with them. Have you sat down to define the values in your life? Now is the time to consider your core values so that you can live a life that aligns with your values and find real happiness. 

How I define my top 10 values

  1. God - I have a strong relationship with God and talk to him every day.
  2. Quality relationships - I value deep friendships. I love listening and going deeper with my friendships rather than just brushing the surface.
  3. Adventure - I love being open to new experiences, ideas, and emotions. I always strive to experience new things.
  4. Service - I believe I was put on earth to help change the concept of retirement. This is my service to others.
  5. Continuous improvement - I don't want to have a fixed mindset, a growth mindset helps me continuously improve as a person..
  6. Fitness - Staying fit helps me not just physically but mentally. 
  7. Laughter - Although I am intense, I love to laugh. I am more engaged and optimistic when I laugh more. 
  8. Positive attitude - A positive attitude is empowering. It can help create an incredible life.
  9. Freedom - I value living life on my own terms.
  10. Bravery - Bravery gives me the strength to live out my values even when it is easier not to. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:34] Who do you want to be for the rest of your life?

THE HAPPY LAB SEGMENT

  • [13:39] What happens when you live a life congruent with your values? 

PRACTICAL PLANNING SEGMENT

  • [18:24] How I brought my life into alignment with my personal values
  • [20:02] My 10 personal values

TODAY’S SMART SPRINT SEGMENT

  • [34:15] Identify your personal values

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: RAM295.mp3
Category:general -- posted at: 6:00am CDT

Have you ever heard of the rising equity glidepath? If not, you’ll definitely want to listen in to this interview with Michael Kitces where he debunks a common retirement myth. Michael Kitces is the man behind the Nerd’s Eye View, a financial planning blog that seeks to improve your financial situation no matter where you are in life. Michael Kitces shares with me on this Retirement Answer Man classic episode recent research which debunks common retirement planning advice. You’ll definitely want to listen to this interview and consider whether his advice lines up with your own retirement asset allocation strategy.

Hard at work October

During this whole month, we are hard at work here at the Retirement Answer Man world headquarters. We are busy planning for the next year as well as working on the Rock Retirement Course. This will be the most epic course on retirement and you won’t want to miss it. We are also giving our listeners a heads up. The price for the Rock Retirement Club goes up November 1. So if you have been thinking about joining head on over to Rock Retirement Club and join now to ensure that you get your membership costs locked in at the current price. 

Do you follow the conventional wisdom regarding asset allocation?

During the withdrawal stage in life, people want to take less risk with their money. 100 minus your age is what you should have in equities. Right? That is the traditional asset allocation benchmark. As you age the amount that you own in stocks should decline, or so goes conventional wisdom. Really what this means, is that you should own your age in bonds and less in equities. This is one of those general rules of thumb that sounds great but then when you break it down it doesn’t hold water. 

Is there ever a good time in retirement for the market to head south?

The first 5-10 years of retirement are crucial to your future financial security. Markets go up and down, so your retirement savings will go one of 2 ways. The market will go down then up or up then down. The order in which the markets go up and down can drastically change your financial situation in retirement. The problem that crops up is that you take distributions out as you proceed through retirement. So if you get bad returns for a decade and then good returns and you took out too much money during the negative return years then you will run into trouble. You are much better off if you have a good market at the beginning of retirement and then it goes down toward the end of your lifespan. 

What is the rising equity glidepath?

Using the traditional asset allocation advice if you have bad returns early on in retirement you will feel a double whammy when the markets finally bounce back. Instead of using conventional asset allocation wisdom, what happens when you flip it on its head? What if you start your asset allocation at a more conservative level and then work your way up as you age? Listen to Michael Kitces explain an alternative to the traditional advice as he describes the rising equity glidepath and how it can help you achieve financial security in retirement. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

  • [3:55] How will you allocate your investment assets in retirement?
  • [8:05] You will be much better off if you have a good market at the beginning of retirement 
  • [16:34] What is an equity glidepath?
  • [20:39] The rising equity glidepath is a risk minimization strategy

Resources Mentioned In This Episode

Nerd’s Eye View

Should Equity Exposure Decrease in Retirement?

What Returns Are Safe Withdrawal Rates Really Based On?

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: RAM294.mp3
Category:general -- posted at: 6:00am CDT

Your net worth statement is the first building block for creating a great life in retirement. On this episode of Retirement Answer Man, we revisit a classic episode to reiterate the importance of net worth statements. You’ll learn the importance of having a net worth statement, how to create a net worth statement and how to determine your own net worth. Listen to this episode to find out why having a net worth statement is the foundation for creating your ideal retirement.

Have you joined the Rock Retirement Club yet?

If you have been thinking of joining the RRC now’s the time to act. Not only are we putting together the Rock Retirement Course which will be the most comprehensive course on retirement ever created, but starting November 1 the membership price will go up. The added benefit of joining now is that you can join us on November 2 for the Retirement Rodeo Round-Up. We have over 30 people joining us for fellowship and retirement education. Join before November 1 to lock in your membership price for a lifetime.

What exactly is a net worth statement?

A net worth statement is basically a statement of your financial health on one simple page. This document can provide you with a brief look at your financial situation any time you need it. You can easily see where you stand by tracking your assets and expenses. With your net worth statement in hand, you can get a real look at where you stand on achieving your retirement goals. Are you ready to learn how to create your own net worth statement? Listen in to find out how. 

Creating your own net worth statement is easy

To create a net worth statement you will list all the things you own that have value as your assets. You can further categorize those assets by whether they are tax-free, tax-deferred, etc. Then you will include your liabilities. Subtract your debt from your assets to find your net worth. With a net worth statement, your financial well-being is right there at your fingertips. Use it as a dashboard to examine your financial health. Check out the ‘Build Your Net Worth Statement’ worksheet in the Retirement Learning Center to help you get started on building your own net worth statement. 

How do you use a net worth statement to help you plan your retirement? 

Your net worth statement is a snapshot in time with which you can measure your progress. This document is your starting place. Once you understand your net worth you can then begin to plan how to rock your ideal retirement. You’ll understand just how far you have to go to achieve your financial goals. Your net worth statement won’t lie to you. It cuts through your best intentions and shows you where your values truly lie. Use your net worth statement to get intentional about your financial decisions.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [7:20] What exactly is net worth? 
  • [11:55] How can you use your net worth statement to plan retirement?

PRACTICAL PLANNING SEGMENT

  • [17:40] What does Kim’s net worth statement look like?

THE HAPPY LAB SEGMENT

  • [49:15] Be careful how you handle stress

TODAY’S SMART SPRINT SEGMENT

  • [47:10] Make a note of where you keep your important documents

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: RAM293.mp3
Category:general -- posted at: 6:00am CDT

Welcome to the last episode of Retirement Plan Live 2019. If you are new to the show, go back and start with episode 289. Retirement Plan Live is a series within the show where we take live case studies with listeners and walk through their retirement dreams and then tackle their finances to see if they can make their dreams a reality. In this Retirement Plan Live, we have met Emma and she and her husband have been facing a difficult situation. On Thursday, October 10 we’ll have their live results meeting. We’ll walk through their ideal retirement and learn if their retirement plan can become a reality. Be sure to sign up for 6-Shot-Saturday on the homepage of RogerWhitney.com so that you can get the link to the live results webinar. 

How do you move forward?

Christopher McCluskey joins me from the Professional Christian Coaching Institute as we discuss how to move forward in hard times. When life deals us a big blow we can get stuck in one place. This is when we need to think about how we approach life rather than how we control it. In hard times, our mindset becomes our reality. That is where the battle is won or lost. There is a period of grief and we should embrace that grief. Grieving is good for you, and without healthy grieving first, you won’t move forward. Eventually, you need to wrestle through to accepting. That is when you grow. 

Coping with a new reality

Coping with a new reality is hard. But none of us truly knows when our last day will be so we need to adopt a mindset of living. Live like you are dying. We can all fritter away at our own lives and sometimes our new reality opens our eyes. Focus on what you can do rather than what you can’t do. And try to discover what is possible with your new life. Try not to give in to despair since we can always hope for something. 

How does Emma navigate being the one left behind?

Emma is in a tough space since she needs to be there to care for Luca, but she also needs to prepare for life alone. She is living a life in limbo. Her support network is both near and far with a brother traveling and a sister nearby. She also has good friends and great neighbors. Emma has managed by advocating for Luca and getting her own support. She understands the importance of self-care but it can be a challenge to work on that at times. 

What would Emma like clarity on in her retirement plan?

On October 10 we’ll have the live webinar with Emma and Luca where we go over their retirement plan. Make sure you’re signed up for 6-Shot Saturday to get the link for the webinar. It is important for Emma to have an agile retirement plan that covers the different scenarios in which she might see herself. She knows there is still plenty that could go wrong. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [4:12] Christopher McCluskey discusses how to move forward
  • [11:25] How do you navigate being the one left behind?
  • [15:56] What is the difference between hope and false hope?
  • [24:20] How do you support someone with their struggles?

PRACTICAL PLANNING SEGMENT

  • [28:06] How is her support network?
  • [35:02] How does she manage it all?
  • [37:45] What could go wrong?
  • [45:05] How does she define herself?

THE HAPPY LAB SEGMENT

  • [51:45] Emma has given us some perspective

TODAY’S SMART SPRINT SEGMENT

  • [52:52] Reply to 6-Shot Saturday with a message to send to Emma

Resources Mentioned In This Episode

BOOK - Thinking in Bets by Annie Duke

Professional Christian Coaching Institute

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: RAM292.mp3
Category:general -- posted at: 6:00am CDT

Welcome back to Retirement Plan Live 2019. During this Retirement Plan Live, we look at Emma and Luca who have recently been thrown a curveball and need to adjust their retirement plans. In this episode, we will be counting what they have to see if they will be able to make their retirement dreams a reality. While they are counting what they have, take the opportunity to sit down and consider what you have. We’ll include worksheets you can use in the 6-Shot Saturday email so be sure to sign up for it at RogerWhitney.com

Counting what you have

It’s time to think about what resources you have to live the kind of life you want. By sitting down to examine where you stand you can see where there are opportunities to improve as well as looking at where your risks are. Sign up for 6-Shot Saturday to receive a summary of everything we have covered on Emma’s journey in Retirement Plan Live as well as worksheets to help you plan your retirement. Just head over to RogerWhitney.com and enter your email and you’ll receive the 6-Shot Saturday in your inbox every Saturday. 

What kind of social capital do you have? 

There are 2 ways that you can consider social capital. You can think of the traditional form of social capital which includes your family, friends, your church community, and colleagues. This sort of social capital is there when you face hard times. The other type of social capital is the financial term which means any sort of money that is a guaranteed payment to you. Social Security is the most common example of social capital. A pension or an annuity are other types of social capital. 

Do you plan to use human capital in your retirement?

Another resource we consider in retirement planning is human capital. Human capital is you. Your ability to earn an income is your human capital. Many people choose to work part-time or take a pretirement so they can continue to earn money and still have the flexibility and time freedom that they are looking for from retirement. Flexibility is a key component of an agile retirement. Are you planning to use your human capital in retirement? 

Do you have a net worth statement?

Financial capital is what we traditionally think of using when we think of retirement. This is the money you have saved up. We can measure the money you have in a net worth statement. It is important to get organized so you can figure out what you have to work with and what the biggest risks are and you can plan what to do next. Emma has enjoyed taking the time to organize her information and ideas to help her see where they stand in their retirement plans. Have you organized your information so that you know where you stand? 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:28] What resources do you have?
  • [5:45] What is the financial definition of social capital?
  • [6:39] What kind of human capital do you have?

PRACTICAL PLANNING SEGMENT

  • [10:30] What is Emma’s social capital?
  • [22:33] What human capital do they have? 
  • [27:17] What is their financial capital?

THE HAPPY LAB SEGMENT

  • [36:49] It is easy to compare the present with the past. Think about where you are and focus on what is possible instead

TODAY’S SMART SPRINT SEGMENT

  • [38:50] What do you need to reframe to think about what is possible?

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: RAM291.mp3
Category:general -- posted at: 6:00am CDT