In the news today, credit card debt has reached over 1 Trillion dollars. In addition, we have 1.2 Trillion dollars in auto debt, 13% above the previous record. Impulse shopping is easier than ever, and this can be bad news for your retirement! On this episode of The Retirement Answer Man Podcast, I talk about spending and some safeguards you can put in place so that you don’t overspend on things you don’t need and may not even really want. Listen in and learn to differentiate between needs and wants, and get some great tips to help you avoid unnecessary impulse spending.

You don’t want to be one of those people who are over-leveraged on their debt

As you are heading into your retirement, you don’t want to get over your head into debt because of personal spending. Lifestyle choices are crucial. In retirement, how much money is needed for your needs, wants, and wishes? On this episode, I describe how you can avoid unnecessary debt and save that money for the things that really matter to you. The happiest clients I have seen are those who value experiences over things. Listen to today’s podcast and start thinking clearly about what you value most and how your spending reflects it.

To prevent overspending, differentiate between needs and wants

We have grown into a society where things that technically are wants are considered needs. On this episode, I talk about defining for yourself what is a need and what is a want. Keeping this distinction clear can help a great deal with reducing unnecessary spending and credit card debt. Listen in to start thinking about needs and wants and how they affect your spending and your retirement lifestyle.

To prevent overspending, build friction into your ability to do transactions

Shopping used to be more difficult. You had to plan out how to get what you wanted, get in the car, drive to a store, find what you wanted, and write a check for it. Now, all you have to do is click and you can have it in an hour. Marketers are experts at taking away the friction and making impulse purchases seem normal. On this episode, I suggest several ways that you can build friction back into your shopping so that you have more opportunities to make wise spending decisions as you approach your retirement. Listen in and take back control of your spending.

The Retirement Answer Man Responds to Listener Questions

Today in the Practical Planning Segment, I respond to questions sent in by listeners like you: Should I pay off my mortgage first, or max out my 401K first? What are the pros and cons of rolling over a 401K to an IRA upon retirement? Should I include my home equity in the asset pool for tapping living expenses in retirement? On this episode, I clarify the considerations that need to be taken into account when making these decisions for your retirement. Listen to today’s questions and answers and then feel free to send in a question of your own.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

• [0:40] Shopping used to be more difficult.
• [3:22] Don’t take financial advice from me on this show. Consider it as helpful tips and education.
• [3:50] The 5-minute retirement makeover

HOT TOPIC SEGMENT

• [4:48] In the news today, credit card debt has reached over 1 Trillion dollars.
• [6:43] You don’t want to be one of those people who are over-leveraged on their debt.
• [7:44] To prevent overspending, differentiate between needs and wants.
• [9:06] Build friction in your ability to do transactions. Here’s how.
• [12:22] Value experiences, not things.

PRACTICAL PLANNING SEGMENT

• [13:35] Answering listener’s questions today.
• [14:20] Current plan is to hit the mortgage hard and pay it off in two years, then transfer that effort into maxing out that 401K. Is that the right thing? 
  [19:46] What are the pros and cons of rolling over a 401K to an IRA upon retirement, vs keeping it in the 401K?
• [29:46] Should I include home equity in the asset pool for tapping living expenses in retirement?

TODAY’S SMART SPRINT SEGMENT

• [37:05] 7-day challenge: Come up with one way you can increase some friction in your life of commerce.

THE HAPPY LAB SEGMENT

• [37:55] Listening to the audio book Steve Jobs, by Walter Isaacson. Commencement story. “Remembering that I’ll be dead soon.” We’re all going to leave this world. Be as intentional as possible on how we live our life, invest our assets, and make little decisions. We don’t want to wake up and say we didn’t follow our heart because we were living for other people’s expectations.

RESOURCES MENTIONED IN THIS EPISODE

TheStreet.com

Book: Steve Jobs, Walter Isaacson

Ask a question

Work with Roger

3-Video Series: 5 Minute Retirement Makeover

Roger’s retirement learning center

The Retirement Answer Man Facebook page

Passive investment management has taken over the world. Nine of the top ten mutual funds are based on passive investing. On this episode, I explain what passive investing is and how it works, the top two indices that most funds are based on, and the advantages and disadvantages of investing based on those indices. I also take some time today in the Practical Planning Segment to answer listener questions. Listen in to expand your understanding of passive investing and hear answers to questions that you might be asking.

The two indices that most passive investment portfolios are trying to model

Eight of the top ten passive investment funds are focused on the S&P500 and the Total Market Index. On this episode, I describe asset allocation within these funds and how the funds are weighted. Is this model an efficient way to for you to implement a passive investment strategy? I’ll fill you in on the advantages and some of the questions around these funds on today’s episode of The Retirement Answer Man.

Are market indices focused on a smaller segment of the market than it first appears?

The S&P 500 and the Total Market Index have, respectively, 500 and 3600 individual equities. So at first it appears that passive investments that mimic these indices would be spread out among those equities. On today’s episode, I explain how the equities are weighted and the percentage of the indices that are in large or giant companies. Listen in to get a clearer picture of these two popular indices and to think about whether or not that is an efficient way for you to implement a passive investing strategy.

Index rebalancing on fixed dates is like the Nike store on Black Friday.

Have you seen the videos, or experienced in person, what it is like to shop for great deals on Black Friday? When the indices rebalance on fixed dates three times each year, any funds invested to mimic the index will be moved as quickly as possible. Everybody is running in the exact same place at the same time. Kind of like the Nike store on Black Friday. On this episode, I talk about this downside of passive investing based on the two most popular indices. Listen in to learn why I’m a fan of passive investing but wonder if there could be a more thoughtful way of doing it.

Answers to listeners’ questions

I’m always glad when listeners send in their questions. On the Practical Planning segment of today’s episode, I respond to questions that have recently come in. “What about the ‘Equal Weight’ S&P 500?” “What happens with a 401K loan if your company switches you to independent contractor status?” “Should I adjust my asset allocations as I head into retirement?” and “Should I empty my retirement account to pay off my credit card debt?” Listen in for answers to these questions and an invitation to send in questions of your own.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

• [0:24] Black Friday madness
• [2:33] Disclaimer - Don’t take advice from me on this show.
• [2:50] Today’s topic: Mutual Funds that mimic indices

HOT TOPIC SEGMENT

• [3:22] Passive investment management has taken over the world.
• [5:13] What hypothetical portfolio is a passive investment trying to model?
• [7:13] If we accept that passive investing makes sense, what passive investment strategies make the most sense for us?
• [8:00] Understanding the Total Market Index
• [9:45] Understanding the S&P 500 Index.
• [11:46] Index rebalancing on fixed dates is like the Nike store on Black Friday.
• [14:43] Does passive investing have to track one of the most popular indices?

PRACTICAL PLANNING SEGMENT

• [16:24] The “Equal Weight” S&P 500 index gives you broader exposure, but here’s why I’m not a fan.
• [19:31] Be aware of 401K loan penalties if you leave employment or change to independent contractor status.
• [22:00] A balanced approach to taxable and non-taxable asset allocations for retirement.
• [27:53] Paying off credit card debt without dipping into your retirement account.

TODAY’S SMART SPRINT SEGMENT

• [31:16] Go to RogerWhitney.com and ask a question.

THE HAPPY LAB SEGMENT

• [32:09] Do what’s right for you, not what’s expected of you.

RESOURCES MENTIONED IN THIS EPISODE

Ask a question

Work with Roger

3-Video Series: 5 Minute Retirement Makeover

Roger’s retirement learning center

The Retirement Answer Man Facebook page

Pre-tirement is that phase between full-time work and what we think of as traditional retirement, and it could be the key to you having a great retirement. Traditional retirement planning that focuses only on investing just doesn’t work. It doesn’t inspire much confidence or clarity about what your future could be. On this episode, I explain the advantages of pre-tirement and give you some ideas to get you started thinking about it. Listen in to learn why you should consider pre-tirement before retirement!

Why is pre-tirement important?

Saving and investing for retirement is extremely important. But it is not all of the story. Your nest egg cannot be all of it. It just doesn’t work. As you think about your retirement, consider pre-tirement as part of your plan. It takes some pressure off of the saving mentality and allows you to build a better life when you do reach full retirement. On this episode, I give you a number of reasons why pre-tirement is important, explain the advantages, and suggest ways you can go about it. Listen in and get started on planning your pre-tirement!

Pre-tirement offers numerous financial benefits

Pre-tirement (thinking of retirement like a dimmer switch) offers numerous financial advantages over full retirement (the on-off switch). On today’s episode, I will explain how pre-tirement benefits you in terms of preserving investments, delaying Social Security, reducing health-care costs, and moderating spikes in post-retirement spending. Listen in to learn what you need to know about pre-tirement and how it could save your retirement!

Pre-tirement offers qualitative advantages that you could miss out on with full retirement

As you are planning your retirement, qualitative considerations are as important as financial ones. When you treat retirement like an on-off switch, you miss out on a number of qualitative advantages that come with treating retirement like a dimmer switch, by embracing pre-tirement. Join me on this episode to learn about the difference that pre-tirement can make in your social network, your sense of purpose, and in your mental and physical health and motivation.

What can I do to start exploring pre-tirement?

You want to start planning your pre-tirement sooner than later. On this episode, I describe several steps you can take to get started and provide a few questions you can begin thinking about. Should you stay in your same industry or do something different that you love? How do you go about building a new network? What opportunities should you consider? Listen to this episode of The Retirement Answer Man Podcast for answers to these questions and more.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

• [0:24] What is pre-tirement?
• [0:33] Why do I need something different than traditional retirement planning?
• [2:23] Disclaimer

HOT TOPIC SEGMENT

• [3:04] Why Americans are still not confident or ready for retirement.

PRACTICAL PLANNING SEGMENT

• [5:38] What excites you most about retirement?
• [7:30] What does pre-tirement look like?
• [12:24] Why is the pre-tirement phase important?
• [14:57] Transitioning into retirement is a period of significant change.
• [15:35] Pre-tirement preserves your savings.
• [17:29] Pre-tirement allows you to delay Social Security and keep your full benefit.
• [19:49] Pre-tirement can reduce health-care costs.
• [21:34] Pre-tirement can help you moderate post-retirement spending.
• [23:45] Pre-tirement helps you maintain a robust social network.
• [26:42] Pre-tirement can help you maintain a sense of purpose.
• [28:25] Pre-tirement supports your mental and physical health.
• [29:10] Getting started tip #1 - Start planning earlier than later. Questions to ask.
• [31:09] Getting started tip #2 - Build your networks.
• [32:19] Getting started tip #3 - Be open to opportunities.
• [32:50] A few ideas for pre-tirement work

TODAY’S SMART SPRINT SEGMENT

• [34:17] Think about what you might do in a pre-tirement phase. (Share it with me so I can share the ideas on another show).

THE HAPPY LAB SEGMENT

• [35:12] Want to be happy? Focus on how you respond to things.

RESOURCES MENTIONED IN THIS EPISODE

Book: Built to Sell, by

Book: The One-Hundred Year Life by Lynda Gratton and Andrew Scott

Martin Miller, Career Pivot

Episode 98 with Michael Kitces

Ask Roger a question

Abe & Louie’s Steakhouse, Boston

3-Video Series: 5 Minute Retirement Makeover

Contact Roger

Joe Saul-Sehy of Stacking Benjamin’s - hosting podcast meet-up at McFadden’s Anaheim on Tuesday, August 22 at 7:30 pm

Six-shot Saturday (Scroll down to a box on the right to subscribe to this weekly e-mail).

Roger’s retirement learning center

The Retirement Answer Man Facebook page

If you want a great retirement, you don’t need better answers, you need better questions. Pretty much everyone in financial advice and the media want us to stay with tactical questions like “How should I allocate my investment account?” “Are interest rates going to go up soon?” and “Am I saving enough?” These tactical questions are like tools in a toolbox that can’t be used well until after you decide what you are building! On today’s episode, I’m going to suggest some better questions that will help you make better decisions. You’ll learn to start with the design and work your way down to the tactical decisions for a great retirement.

Address the incongruence between your financial worries and what you are actually doing

A recent Gallup poll pointed out the top three financial worries in America. On this episode, I’ll share those with you and point out the ways that our actions tend to be incongruent with what we are concerned about; how we often are not actually doing anything that addresses the concern about not having enough money for a great retirement. Listen in and get motivated to take specific steps that can actually help to mitigate the financial worries that you have.

Power questions you can ask when you’re feeling stuck on a decision

When you’re feeling stuck on a decision, it’s important to be able to step out of the immediate moment and ask questions that will help you move forward. On today’s episode, I’ll share a couple of power questions that can help you get unstuck and get a clear vision of what really matters to you. Don’t look for better answers, listen in and start asking better questions so that you can move forward towards a great retirement.

Key questions to ask when you’re thinking about your future

When you are thinking about your future and a great retirement, it is important to ask yourself some good questions that will help you envision what you really want. On this episode, I’ll give you some key questions to ask, not only as you are planning your retirement, but also along the way into and through retirement as your goals and priorities change. Listen to learn the questions that matter far more than just what you should do with your portfolio.

Keep good questions in front of you to help you make better decisions

Asking good questions is essential to a great retirement. On this episode, I’m sharing what I think are the important questions to have in front of you. This week’s Smart Sprint is to write those questions on a card and keep them top of mind for a week so that you can refer to them whenever you are in a quandary and use them to help you make better decisions. Listen to today’s podcast to start asking yourself good questions and taking steps to get out of the tactical world and start taking intentional action to build the life that your 90-year-old self is going to be proud of.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

• [0:27] Tactical, transactional questions are great, but should never be discussed first.
• [2:32] Disclaimer. Don’t take advice from me on this show.

HOT TOPIC SEGMENT

• [3:02] The 5-minute Retirement makeover - not your parents’ retirement planning.
• [3:53] America’s top three financial worries.
• [5:09] The incongruence between financial worries and what people are actually doing.

PRACTICAL PLANNING SEGMENT

• [8:36] Design first, and work your way down to tactical.
• [12:16] Question #1 - “If I knew the answer (hypothetically), what would it be?”
• [14:00] Question #2 - “What would my 90-year-old self want me to do?”
• [16:19] Question #3 - Do I still want to do this?
• [17:30] Question #4 - What does this make possible?
• [18:40] Question #5 - How does this help me towards my goal?
• [20:08] Question #6 - What can I do next?
• [21:24] Get out of the tactical world and start taking intentional action that to build the life that your 90-year-old self is going to be proud of.

TODAY’S SMART SPRINT SEGMENT

• [22:08] 7-day goal: Keep the focusing questions top of mind and refer to them to make better decisions.

THE HAPPY LAB SEGMENT

• [23:04] In a dinner group, try to get everyone focused on one conversation instead of all the side conversations.

RESOURCES MENTIONED IN THIS EPISODE

3-Video Series: 5 Minute Retirement Makeover

Contact Roger: http://www.rogerwhitney.com/retirementanswers/

Roger’s retirement learning center: www.RogerWhitney.com/learn

The Retirement Answer Man Facebook page: www.Facebook.com/RetirementAnswerMan

The top financial stress in America, according to a Gallup poll, is not having enough money for retirement. Some people choose to ignore it to avoid the stress, but for others, the worry is a motivator to be proactive and get moving in the right direction. In this podcast interview with Emily Guy Berkin, we will discuss why there is so much financial stress, how to get a better understanding of your relationship with money, and specific steps you can take to decrease your stress about money. Listen in and stop financial stress now!

What does money mean to you?

Money is just little green pieces of paper. It doesn’t have any meaning except for the meaning that we humans assign to it. In today’s podcast interview, Emily Guy Berkin gives us tools to help us start thinking about what money means to us, how our relationship with money changes over time, and the influence of our culture on how we think about money. Listen in and begin to identify the meaning of those little green pieces of paper in your life.

How has your relationship with money changed over time?

Your relationship with money changes throughout your life. One really big change in your relationship with money is when you retire and no longer have a job. We often don’t prepare for the emotional stress that comes with this change in relationship. Listen to this episode of The Retirement Answer Man podcast to learn to identify your relationship with money, manage the change in your relationship with money, and decrease the financial stress that often comes with retirement.

Financial security is a myth

Financial security is a myth, and pursuing it can be destructive. Find out why on this episode of the Retirement Answer Man podcast, where I talk with Emily Guy Berkin about how the idea of financial security can actually contribute to our financial stress and be counterproductive. Listen in to learn about what matters more than building a big nest egg and how you can take steps to reduce your financial stress regardless of how much money you have saved up.

How to decrease your financial stress

What would it mean to you and to your family if you could stop the financial stress that you are facing as you head into retirement? In today’s interview with Emily Guy Berkin, we will discuss how to identify what money means to you and to recognize when you are doing things that are counterproductive. Listen in to learn how to bring your mind back into the way you use money and to recognize when your emotions about money may be leading you down the wrong path. If you want to stop financial stress, then this episode is for you!

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

• [0:24] Financial stress comes when life seasons change.
• [2:37] Disclaimer - Don’t take advice from Roger Whitney on this show.
• [3:12] Getting confidence and clarity about managing your financial life in retirement.

HOT TOPIC SEGMENT

• [4:05] The top financial worry in America is not having enough money for retirement.

PRACTICAL PLANNING SEGMENT

• [6:54] Introducing Emily Guy Berkin.
• [7:26] Emily’s experience with financial stress.
• [10:00] The meanings we put on money cause our financial stress.
• [11:49] How has your relationship with money changed over time?
• [13:59] The messages of our culture influence the way we use money.
• [16:56] How to decrease financial stress.
• [19:32] Financial security is a myth.
• [22:33] How to manage the day-to-day spending.
• [24:43] Helpful tools can be found in Emily Guy Berkin’s book, End Financial Stress Now.

TODAY’S SMART SPRINT SEGMENT

• [25:21] Identify one area of your life where you have financial stress, and take one proactive action to deal with it.

THE HAPPY LAB SEGMENT

• [26:12] It’s a great feeling when you can help direct a young life.

RESOURCES MENTIONED IN THIS EPISODE

Book: End Financial Stress NOW by Emily Guy Berkin

Emily Guy Berkin on Twitter

Emily Guy Berkin’s website

Mint financial management app

3-Video Series: 5 Minute Retirement Makeover

Contact Roger: http://www.rogerwhitney.com/retirementanswers/

Roger’s retirement learning center: www.RogerWhitney.com/learn

The Retirement Answer Man Facebook page: www.Facebook.com/RetirementAnswerMan