Retirement Answer Man

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

Even when life throws you a curveball you still have to figure out how to move forward. This Retirement Plan Live series is a bit different than the previous ones. We are working with Emma and Luca who are dealing with an unexpected hitch in their retirement. On the last episode, we learned about their situation. On this episode, we’ll discuss their needs, wants, and wishes. And in the following episode, we’ll look at the numbers and discuss how they plan to pay for it all. Listen to this episode to hear how to move forward when life throws you a curveball.

How to move forward with the 5 stages of grief

There are different kinds of loss. Loss of a relationship, loss of a child, loss of a friend loss of trust, and loss of identity are just a few. Whenever we experience any kind of traumatic loss we experience grief. And everyone handles grief differently both outwardly and inwardly. There are 5 stages of grief: denial, anger, bargaining, depression, and finally acceptance. These stages aren’t necessarily linear and many people never reach the acceptance stage. Some people never move past their grief and they get stuck in one of the stages for the rest of their lives. 

7 Tips that have helped me when dealing with grief

  1. Lean into your feelings. Don’t wallow in your feelings but do allow yourself to feel your feelings.
  2. Act out safely. It’s ok to act out, you can rant and rage, but don't burn bridges or hurt others when acting out your emotions. 
  3. Don't be so hard on yourself. Give yourself grace. It's ok to have negative thoughts just don’t nurture them.
  4. Reach out. You're not an island your friends and family are there for you. 
  5. Try journaling. Even if you aren’t a journaling type of person, give it a try.
  6. Affirm that you are going to create a great life. You can still have a great life regardless of your situation.
  7. What can you do next? Think about how you can improve your situation

What are their base needs?

Emma estimates that they need about $65,000 to cover their base needs excluding healthcare. Healthcare has been a big expense for them since the diagnosis. She estimates they spend about $12,000 per year on insurance, premiums run between $12-20,000 per year, and drugs are another $12,000. Thankfully they have always been savers and had money set aside. They also have a sinking fund for home repairs. At the moment they don’t spend much on entertainment but they will begin to travel soon. Sign up for 6-Shot Saturday to get all the updates on Retirement Plan Live 2019.

Their wants and wishes

Travel is a big part of their retirement dreams. They love camping and being outdoors and have bought a camper. They didn’t travel much in the past due to lack of free time, but now they have the time to do it. Emma estimates that they will probably spend $10,000 a year on travel. Some other wishes are home improvement projects, a fun sports car, and a garage to restore an old car. Make sure to listen to next week’s episode to find out how Emma and Luca plan to pay for all of their wants and wishes. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:05] What are the 5 stages of grief?
  • [8:20] Tips that have helped me when dealing with grief

PRACTICAL PLANNING SEGMENT

  • [11:45] Emma has plans to dream big
  • [14:56] What are her base needs?
  • [19:26] What are Emma’s wants?
  • [27:42] How does Luca feel about their circumstances?

THE HAPPY LAB SEGMENT

  • [31:44] It’s important to take action

TODAY’S SMART SPRINT SEGMENT

  • [33:36] Think about someone you know that is dealing with something

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: RAM290.mp3
Category:general -- posted at: 6:00am CDT

Welcome to a new Retirement Plan Live. If you this is your first time listening to one, be sure to sign up for 6-Shot Saturday to get all the updates. On this Retirement Plan Live, we’ll be working with Emma and Luca. Life has thrown them a curveball and we’ll see if they can still make their ideal retirement a reality given their current situation. Week by week we’ll walk through their situation. On this episode, you’ll hear what happened and what their retirement goals are. Next, you’ll hear about their financial resources. Then we’ll discuss how they can remain agile given their situation. We’ll also discuss their opportunities and the risks that surround them. Each week you’ll get an update in 6-Shot Saturday. Then in October, we’ll have a webinar where we lay it all out on the table to see if they can make their revised retirement dreams a reality. Make sure to listen to the whole series and sign up for 6-Shot Saturday to get all the updates.

Even with the best-laid plans, things can go wrong

Even for those of us who plan and plan and try to prepare for everything, things can go wrong. Life can throw us curveballs from out of nowhere. Your friends, your parents, your kids, your partner and even you can get sick. Death is another curveball that can derail your plans. Divorce, addiction, depression: these can all disrupt our best-laid plans. How do you rock retirement if you don’t even want to get out of bed? Over the next few episodes, we’ll be exploring how you can learn to change your plans to adapt to a new reality. 

Who are Emma and Luca?

Emma and Luca have been married for 40 years. She is turning 65 soon and he is 66. They envisioned their retirement to be a combination of work with a bit of flexibility. Travel was a big part of their retirement plans. They enjoy camping and are avid cyclists. Luca is a bit of a workhorse and could never imagine stopping work completely. They are good savers and their ideal retirement didn’t seem too far-fetched. But then one day Luca got sick. 

What derailed their retirement plans?

Luca has always been very healthy and was never one for doctors’ visits. But after he got sick and became jaundiced Emma convinced him it was time to see a doctor. Pancreatic cancer was the diagnosis. They didn’t realize it but their retirement plans had changed overnight. With his illness surgery and extensive chemotherapy would be necessary. And even if all went well there is still only a 10% 5-year survival rate. It took them both a while to realize that things would never be the same and their retirement plans would need to change drastically.

How do they deal with all this?

Luca tried returning to work briefly this year but it didn’t last long. Emma’s employer has been considerate of their situation and she has taken some time off as well. It is hard for a man who values work so much to suddenly stop working when he isn’t ready to. Your outlook can become very negative in this situation. They know they can’t go back and change the past so now they must consider what they can do next. They have to balance whether to spend or regret not spending. Emma knows that her retirement plans now must include 2 different versions. Find out what will happen with Emma and Luca by listening to this Retirement Plan Live.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:49] Even with the best-laid plans, things can go wrong

PRACTICAL PLANNING SEGMENT

  • [10:57] What were their previous retirement plans?
  • [14:36] What derailed their plans?
  • [19:32] It took them a while to realize that things will never be the same
  • [20:54] How do you plan for retirement in this situation?
  • [26:50] They need to create 2 sets of plans

THE HAPPY LAB SEGMENT

  • [29:10] It’s only when we cannot change the experience that we look for ways to change the view of the experience

TODAY’S SMART SPRINT SEGMENT

  • [30:27] Apply that quote to one situation 

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: RAM289.mp3
Category:general -- posted at: 6:00am CDT

Over the past month, we have been exploring an important topic in creating your retirement. We have been discussing you. Retirement is another giant life change that can be compared with ending school or beginning a career. This momentous occasion is a great time to give pause and think about who you really are. If you haven’t listened to the previous episodes in this series, you’ll want to go back and listen to episodes 285, 286, and 287. On this episode, you’ll learn 5 steps for creating your retirement identity. 

Steps for creating your identity in retirement

Retirement is a long time. You’re starting an entirely new step in life and walking away from the life you once had. This is a great time to think about who you really are and who you want to become. Here are steps you can take to help you create your new identity

  1. Acknowledge who you currently are. What is your current identity?
  2. Reconnect with who you really are via self-examination. Discover what makes you tick.
  3. Examine the past and all the things you built up. Decide what to keep and what to let go.
  4. Begin to test. Play with new ideas and hobbies to discover which ones are a good fit.
  5. Choose. Lean into a new reality that revolves around your interests. 
  6. Enjoy the process. Don’t put pressure on yourself to choose, this isn't a race. 

What are you going to be when you grow up? 

We are asked from the youngest age, what are you going to be when you grow up? People have been focused on their career for so long that once they come to retirement they don’t really know what to do. If you have focused solely on your career then retirement will really be a challenge. It’s time to start focusing on the right things and becoming more self-aware. Get to know yourself better and find your passions so that you know what you want to do when work isn’t there anymore. 

How can we become intentional about finding our passions?

Most people aren’t proactive about discovering themselves. Life moves quickly and work, family, and other things get in the way of discovering who you really are. Think beyond money. What motivates you, what makes you tick? What are your drivers? Do you want to belong, to be valued, to be recognized? Start thinking about how you can lead the life that you really want.

How do you build your tomorrow today?

Once you discover what motivates you then you can start to fulfill yourself. Take some time to sit down and analyze your life. Use today to build your tomorrow. Think about how you want to fill your time. Doing the prework of understanding yourself will lead to a fulfilling retirement where you retire towards something, rather than away. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:49] A framework for navigating the new you in retirement

PRACTICAL PLANNING SEGMENT

  • [10:00] People don’t focus on the right things
  • [18:49] What kind of framework can we use to become intentional about passions?
  • [26:20] Where are you going to get your fulfillment in retirement?

THE HAPPY LAB SEGMENT

  • [36:56] Fall is coming!

TODAY’S SMART SPRINT SEGMENT

  • [38:58] Part A: Use the framework to figure out who you will be in retirement   
    • Part B: Sign up for 6 Shot Saturday

Resources Mentioned In This Episode

APP - Carrot Weather

BOOK - Atomic Habits by James Clear

BOOK - Love Does by Bob Goff

BOOK - The Book of Mistakes by Skip Prichard

BOOK - Necessary Endings by Henry Cloud

PODCAST - The Enneagram in Your ReaLife with Teresa McCloy

BOOK - The Longevity Economy by Dr. Joe Coughlin

BOOK - Don’t Retire, Rewire by Jeri Sedler

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: RAM288.mp3
Category:general -- posted at: 6:00am CDT

Do you know what’s next for you in retirement? We continue our exploration of self-reinvention and self-discovery today as we have during this whole monthlong series. On this episode, you’ll learn an important step in the process of self-discovery, which is how to close the book on the past. Before you retire you will want to ask yourself who you really are and who you want to be in the coming years. I interview Skip Prichard, author of The Book of Mistakes, to learn tools we can use to help reinvent ourselves. Learn how to close the door on the past and create your new identity for that new season in life on this episode of Retirement Answer Man. 

A booklist to help you determine what’s next for you

  1. The Longevity Economy by Dr. Joseph Coughlin. Dr. Coughlin approaches the subject of longevity with an economic spin. This help will help you deconstruct your internal narrative on growing old. 
  2. How to Live Forever by Martin Freedman. This book helps you to ponder what life is really about. It connects great stories and gives examples of how to create a meaningful life. 
  3. Halftime by Bob Buford. This book is about changing your game plan for success. It will help you reset your new vision and connect with what's driving you. This is an excellent framework to help you reflect on what you can do next. 
  4. Don't Retire, Rewire by Jeri Sedler and Rick Miners. Jeri and Rick provide exercises throughout the book to help you find work and a life that is fulfilling in retirement. 
  5. Love Does by Bob Goff. This treasure of a book is a call to action to lean in to do amazing things.
  6. The Book of Mistakes by Skip Prichard. You’ll hear more about this one in the Practical Planning segment.
  7. Necessary Endings by Dr. Henry Cloud. We all know that there are different seasons to life, but finding closure can be a challenge. This book will help you identify and navigate the difficult conversations and actions to help you close out seasons of your life.

How do we define success?

The subtitle of Skip Prichard’s The Book of Mistakes is 9 Steps to Creating a Successful Future. But how do we define success in retirement? Making money is no longer a factor. What are other ways we can define success? Skip believes that success can be defined by the maximization of all of your God-given talents. He thinks the trickiest part of success is finding a balance between peace and aspiration at the same time. We’re not meant to be stagnant. We need to continue to aspire for more but still have peace in our lives. 

What is your why? 

There is so much you can do in retirement. You are no longer bound by the confines of work or family life. Now it’s time to work on your why. One idea is to take a year just to try new things. Learn an instrument, go to shows, look for the things that really drive you. This is your opportunity to design your life to your specifications. But before you do that you need to stop and reflect. Is this really where you want to go? The most important thing you can do in retirement is move toward something, not away from something. 

How do you define yourself in retirement? 

As a society, we have attached ourselves to our labels of what we do for work. But what do you do when you stop working? You don’t want to refer to yourself as a retired lawyer for the rest of yourself. Think about creating your own mission statement. What do you want to be known for? How do you achieve those things? It’s important to plan how you will go about achieving your goals and define the true you. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [1:58] A book list for the new you in retirement

PRACTICAL PLANNING SEGMENT

  • [10:55] Why did Skip choose to write The Book of Mistakes in parable form?
  • [14:05] How do we define success in retirement?
  • [23:44] What is Skip working towards?
  • [28:48] How do you define yourself in retirement?
  • [32:54] How do we limit distractions?

THE HAPPY LAB SEGMENT

  • [39:34] Sometimes we think things are mistakes when they really aren’t

TODAY’S SMART SPRINT SEGMENT

  • [42:22] Identify what you need to do to give yourself closure

Resources Mentioned In This Episode

BOOK - The Longevity Economy by Dr. Joseph Coughlin

BOOK - How to Live Forever by Martin Freedman

BOOK - Halftime by Bob Buford

BOOK - Don't Retire, Rewire by Jeri Sedler

BOOK - Love Does by Bob Goff

BOOK - The Book of Mistakes by Skip Prichard

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: RAM287.mp3
Category:general -- posted at: 6:00am CDT

As you approach retirement, take time to reconnect with your authentic self. We continue with the ‘who are you in retirement’ series by learning how to connect with your authentic self using the Enneagram. Today we welcome Teresa McCloy from the Enneagram in Your Real Life podcast. Teresa is here to show you how the Enneagram can help you rediscover your authentic self. Teresa is an Enneagram expert that teaches people how to apply the Enneagram intentionally to create a better life. Listen to this episode to learn how to use the Enneagram to rediscover your authentic self.

Do you have many low stakes casual friendships?

Low stakes casual friendships are those relationships with people that we see in passing. Consider the barista from the coffee shop, your hairdresser or the waitress at your favorite restaurant. They are the people you know a little bit about but you wouldn’t call at 3 a.m. with a problem. A recent study was done on the importance of low stakes relationships in our lives. We need social attachments. We feel comfortable when we go places where we are known and recognized. As you create your deeper social network don’t forget the community around you. You never know where these casual friendships may lead

How can the Enneagram help you discover your authentic self?

The first step in rediscovering your authentic self is to do some self-examination. This will help you to create your identity in retirement You need to identify what drives you and gives you pleasure. There are plenty of personality assessments you can take like the DISC assessment or Meyers Briggs, but the Enneagram can be an even more powerful tool for self-discovery. The enneagram is different from the rest because it speaks more to the heart. It gives us insight into becoming our best selves by connecting the head, heart, and gut. 

How can the Enneagram help you in retirement?

When you retire you may be at the top of your game in whatever it is you do to earn money. But that area may not be where your authentic self lies. Retirement gives you another opportunity to reconnect with your true self. The Enneagram gives us insight into becoming our best self through these three centers: the head, the heart, and the gut. With this tool, you can reconnect with all three. The Enneagram gives you the language you can use to connect with others as well. It can also help give you grace and empathy to understand how to communicate with those around you. 

How can the Enneagram help you connect with your spouse?

The divorce rate for couples over 50 is at an all-time high. Once you and your spouse are home all day, every day you may have trouble connecting. Many people find that when they retire they no longer feel a connection to their significant other. The Enneagram can help you discover your authentic self but it can also give you an understanding of how you relate to others and understand that others communicate differently. It can give you the language to use with your spouse and help you have grace and empathy. After you listen to this episode check out Teresa’s podcast and give the Enneagram a try. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:49] The importance of the low stakes relationship

PRACTICAL PLANNING SEGMENT

  • [7:46] Teresa McCloy discusses how to use the enneagram intentionally to create a better life in retirement
  • [20:14] How can the Enneagram help you find your authentic self?
  • [28:16] How does the Enneagram help couples?

THE HAPPY LAB SEGMENT

  • [31:49] Who are your low stakes friends?

TODAY’S SMART SPRINT SEGMENT

Resources Mentioned In This Episode

PODCAST - Enneagram in Your Real Life with Teresa McCloy

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: RAM286.mp3
Category:general -- posted at: 6:00am CDT

How are you going to redefine yourself in retirement? Retirement means making the life transition from a full-time career to full-time living on your own terms. Although this is exciting, it can also be scary. During this series, you’ll learn how to create a framework to do this successfully. Learn how to figure out your identity and who you want to become. Are you ready to redefine yourself in retirement? Listen to this episode of Retirement Answer Man to begin to make this huge transition in your life. 

Who are you? 

We get so wrapped up in our professional titles that now in retirement you have a void to fill. Not only do you have to figure out the logistics of money, healthcare, where you’re going to live, now you’ll have to figure out your identity. Some people can lose direction when they retire. They think about who they were rather than who they want to become. Creating an identity from a completely blank slate can be a challenge. People don’t do well with blank slates. We prefer multiple-choice questions and don’t have the skills required to choose from such a broad palette. Do you know who you are? Do you know who you want to become?

Why did I shift the focus of this series from finding your purpose?

I had originally planned for this month to be all about finding your purpose in retirement, but then Mike the listener had an objection. Mike feels that there is too much pressure in finding your purpose of retirement. You probably won’t solve the problem of world hunger. Retirement is like the start of college, it’s the beginning of another round of self-exploration. Unfortunately, the analogy ends there since college has a structure and pressure. A well-funded retirement is free of pressure and structure. How will you grow and change in the absence of pressure?

How can you hack longevity?

It used to be that you might get 10 years of retirement in to simply sit on the park bench. Nowadays ⅓ of your adult life consists of retirement. The pattern written by previous generations doesn’t hold up for this new generation of retirees. This new stage of life has to be reinvented. Just because you stopped working doesn’t mean that you stop everything. People are beginning to hack their longevity by identifying their interests early on in retirement. These interests will carry them for the years of their retirement. 

Are you ready to redefine yourself in retirement?

When you retire, you can’t just run away from work, you need something to run to. It's not the absence of work that people desire in retirement, it’s the flexibility. Before beginning your retirement it’s time to start thinking about who you really are. What’s your reason to get up in the morning? What will be your storyline? How can you use the skills you have accumulated over a lifetime and translate them into the new game of retirement?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:45] We get so wrapped up in our professional titles
  • [8:14] Blank slates can be a challenge
  • [9:00] Why we aren’t searching for a purpose this month
  • [17:55] What is going on in the Rock Retirement Club this month?

PRACTICAL PLANNING SEGMENT

  • [19:08] Dr. Joseph Coughlin is the director of the MIT Age Lab
  • [25:22] People are hacking their retirement
  • [31:55] How can we build support networks in retirement?

THE HAPPY LAB SEGMENT

  • [34:44] Axe throwing is really hard to do

TODAY’S SMART SPRINT SEGMENT

  • [36:56] Identify your identity right now

Resources Mentioned In This Episode

BOOK - The Longevity Economy by Dr. Joseph Coughlin

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: RAM285.mp3
Category:general -- posted at: 5:00am CDT

You may still have some questions about annuities so in this episode I answer your annuity questions. We have had several listeners ask some great questions which will help clarify how annuities work. After diving deep into annuities during this 5-week long month, we can all look forward to the next series where you will learn how to figure out who you will be in retirement. But before that, listen to this episode to get all of your annuity questions answered. 

Why can’t people just self-annuitize?

Ryan asks: why don’t individuals self-annuitize by using the IRS required minimum distribution (RMD) tables. This way they can keep control of their assets with the additional benefit of being able to leave the assets as an inheritance. 

This is actually a great idea and the idea that the IRS has behind the RMD. The primary difference between this example and an annuity is the risk factor. In an annuity, the risk has been removed in exchange for your loss of control of assets. So in this example, you would still maintain control of the assets but you would still need to factor in market risk and execution risk. Would you prefer to use your IRA in this way or get an annuity?

Do RMD’s play a factor in annuities?

Another listener is curious about the role that RMD’s play in annuities. Her husband recently bought an annuity and was told that he would have to begin the annuitization phase at age 70 ½ due to the RMD. 

The reason that he has this stipulation is that he must have bought the annuity using tax-deferred assets. If you have other tax-deferred assets you could postpone the annuitization period as long as you are still taking the RMD from other sources. If you have bought an annuity, did you use pre-tax or post-tax assets?

Why do insurance companies handle annuities, and how do they make money?

Insurance companies handle annuities instead of banks or investment firms because they are pooling risk from a large group of individuals to spread the risk in a similar way as that of an insurance policy. But the insurance company makes money much like a bank. They collect money from thousands of individuals and then they are able to invest it and earn a larger percentage than that of their policy payout. It’s like you going and buying a cd. It is important to remember that an annuity shouldn’t be seen as an investment but rather as a pre-purchased pension. 

What if you don’t want to know all the details surrounding annuities?

One listener thinks that annuities sound like an excellent option for her retirement but she doesn’t want to know about the fees and charges. With an annuity, it is important not just to read but also understand the contract which is no easy task. The way the contracts are written could cause you to accidentally break the contract if you aren’t careful. If you aren’t looking to be swamped by details, a fixed annuity is much more straight forward than a variable annuity. 

If you are considering an annuity you need to first think about your overall retirement strategy. Let the process drive decision making. Consider why you are interested in annuities. Are you looking to insure longevity risk, simplify your financial life, or buy a pension? Remember that you are not buying an investment. So what do you think of annuities? Do they seem like a good option for you?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:18] Who are you going to be in retirement? 

PRACTICAL PLANNING SEGMENT

  • [6:50] Why wouldn’t people just self-annuitize?
  • [8:55] Do RMD’s play a factor in annuities?
  • [10:54] Why do insurance companies handle annuities?
  • [13:40] What if you don’t want to know all the details surrounding annuities?
  • [16:06] Are insurance companies selling off their annuity lines because they feel they can’t be profitable?

THE HAPPY LAB SEGMENT

  • [20:24] I am excited about next month’s series that focuses on who you will be in retirement

TODAY’S SMART SPRINT SEGMENT

  • [21:14] Eat the frog - do the thing you don’t want to do first thing in the morning

Resources Mentioned In This Episode

BOOK - Eat that Frog by Brian Tracy

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: RAM284.mp3
Category:general -- posted at: 6:00am CDT

In this episode of the annuity series, we’ll discuss the pros and cons of variable annuities so that you can learn whether a variable annuity should be a part of your retirement plan. During the Hot Topic segment, we’ll discuss the Rock Retirement Club since enrollment just opened back up. Then in the Practical Planning segment, we jump back into our discussion on annuities. You’ll learn all about variable annuities to help you become more informed. Listen to this episode to learn the pros and cons of variable annuities. 

Is the Rock Retirement Club right for you?

The Rock Retirement Club has opened its doors once again! Now with over 200 people, the RRC was created last fall as a safe space to help others in various points along their retirement journey. The motto of the Rock Retirement Club is, “Walk with the wise and become wise.” Check out the RRC if you are interested in these 3 things:

  1. Get a world-class education on how to ‘do’ retirement. We do this by creating educational courses, workshops run by experts, and meetups on how to do specific things. 
  2. Take action. We have a monthly action plan to help you take baby steps towards your retirement goals and we give you the tools to take action.
  3. It is a safe place to walk with others along this retirement journey. 

What is the difference between a variable annuity and a fixed annuity?

There was $200B in annuity sales in 2018. Of that, $100B was in variable annuities. Since variable annuities are such a big part of the market, we should learn more about them. How is a variable annuity different than a fixed annuity? There are still the 2 phases of annuities: the accumulation period and the annuitization or distribution phase. In a fixed annuity you are paid based on a fixed rate specified in the contract. In a variable annuity, you are able to choose from a menu of mutual fund clones then when you go to annuitization you are paid based on what the portfolio was able to grow to. Basically, the case for variable annuities is that you’ll be able to potentially build a bigger pot to annuitize from. 

Pros and cons of variable annuities

Variable annuities have many riders to choose from

Another thing variable annuities have are riders. There are a lot of riders that are designed to provide you with income at some level without having to annuitize first. But the devil is in the details with these riders. You can often get a death benefit rider or a long-term care rider. There could be a guaranteed withdrawal benefit which may give you some guarantee about how much you’ll be able to withdraw. A lifetime income benefit rider can provide you with a guaranteed lifetime income. There could be a guaranteed minimum accumulation rider and so many others to choose from. Check out the Good Financial Cents website to learn more about the different types of riders you may come across with variable annuities.

What are some disadvantages to variable annuities?

Since you are investing in markets you could end up with a lower payout. If you do well and the assets grow they will be taxed as ordinary income rather than capital gains. Then there are the fees. There is a mortality expense, an investment expense, a manager expense, a surrender fee, and then, of course, the riders. There could be anywhere from 2.5% - 4% in annual fees, but if you get any riders attached then those fees could bump up to 6%. These types of products are usually sold rather than being sought out. The people that are selling annuities aren’t fiduciaries so they don’t have your best interest at heart. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:31] The Rock Retirement Club has opened its doors once again

PRACTICAL PLANNING SEGMENT

  • [10:01] How is a variable annuity different than a fixed annuity?
  • [14:20] Variable annuities have many riders to choose from
  • [16:35] What are some disadvantages to annuities?

THE HAPPY LAB SEGMENT

  • [22:45] To be happy we need to minimize confusion

TODAY’S SMART SPRINT SEGMENT

  • [24:35] What can you simplify in your life?

Resources Mentioned In This Episode

GoodFinancialCents.com/annuity-riders

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: RAM283.mp3
Category:general -- posted at: 6:00am CDT

On today’s episode of Retirement Answer Man, we’ll consider the pros and cons of fixed annuities. During this series on annuities, we are discussing whether annuities are right for your retirement. Many people choose pretirement as an income floor for their first few years of retirement to help them ease into the lifestyle and decrease financial risk. An annuity can be considered a backend floor to cover your retirement spending in your 80’s, 90’s and even 100’s. We all know that longevity is a big factor in retirement planning and a fixed annuity could help supplement your social security income in old age. Listen to this episode to help you consider the pros and cons of fixed annuities so that you can judge whether an annuity is a good choice for your #retirement.

What are the pros and cons of fixed annuities? 

What are the pros for a fixed annuity? Since an annuity is like a pension that you pay for in advance, you get a guaranteed income for the rest of your life. Once you buy it and put it in place you can‘t really mess it up. It also offers protection for your future self. You may not be as astute in your later years and an annuity can help protect you against fraud, poor judgment, etc. An annuity also gives you a kind of longevity insurance since you get payments for your entire life whether you live until 80 or 110.

Although an annuity can simplify things, you must give up some things in return. First of all, you give up your lump sum. In doing so, you lose the opportunity to use the money in a different way. You don’t really know how much you will get in return since it is gone if you die the next day. Another potential downside is inflation. By the time you actually begin annuity payments, the inflation can lower your purchasing power by 20% or more. You also give up the opportunity to leave a legacy with the money.

Why did B.W. choose to purchase an annuity?

B.W. is a member of the Rock Retirement Club and has recently retired at age 55. He has decided to dive headfirst into retirement financial planning. Since he chose a bucket strategy for retirement expense planning. He has 10 years of spending set aside until he reaches the age of 65. At age 65 he’ll receive Social Security and a pension which will cover 75% of his costs. He decided to find an annuity to cover the other 25%. B.W. chose a deferred annuity since he doesn’t need the money until the age of 65. He looks at purchasing an annuity as an insurance policy rather than an investment. Listen to this episode to hear why B.W. chose to purchase an annuity to cover his retirement expenses.

How did B.W. determine which annuity to buy?

B.W. started searching for annuities by considering the amount of money that he wanted to cover. He also knew how much he was willing to spend. This led him to explore the options that he could afford. He narrowed his selection down to one consideration: What would be the guaranteed joint life income stream from the annuity? He looked at just about every annuity there was and considered various sources. B.W. ended up choosing a deferred fixed annuity called SPDA (single premium deferred annuity). He chose an annuity that would cover both the lives of he and his wife. Are you considering an annuity as a way to provide income in retirement? Listen now to hear how B.W. figured out which annuity would work best for his goals. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [4:10] Have you considered a backend floor to cover your retirement spending?
  • [8:25] What do you give up with an annuity?

PRACTICAL PLANNING SEGMENT

  • [21:28] Why did B.W. choose to purchase an annuity?
  • [24:22] How did he determine what to buy?
  • [27:37] What class of annuity did he end up with?
  • [30:10] What were the options that he considered?

THE HAPPY LAB SEGMENT

TODAY’S SMART SPRINT SEGMENT

Resources Mentioned In This Episode

PODCAST - Total Life Freedom

Episode 280

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: RAM282.mp3
Category:general -- posted at: 6:00am CDT

This week on Retirement Answer Man, we define what role an annuity could play in your portfolio. Annuities can be a polarizing topic in the financial world but we need to think critically with a curious and open mind rather than vilify or glorify these investment tools. I’m checking my own biases at the door to bring you the most reliable information I can. Annuities may not be the most exciting topic, but we want you to rock retirement with intentionality so let’s dive in and learn as much as we can. 

Rock Retirement Club enrollment is back

Last year we opened the Rock Retirement Club as an online space where you can get your retirement questions answered and engage with people like yourself. Everyone in the club is learning as much as they can so that they can rock their retirement. You’ll also find resources to take action so that you have all the tools you need to rock your retirement. Our little club has grown over the past year and we only open enrollment during certain periods. This subscription-based club will be open for enrollment soon. Check out RockRetirementClub.com and put yourself on the waitlist so that you will be notified as soon as enrollment is open. 

In retirement, you have true freedom

Retirement is a special time because you finally have the ability to organize your life however you want maybe. You can do what you want, live where you want, and hang out with whoever you want without a job or social constraint tying you down. I recently read an article which proposed that college towns make a great place to retire. The author had 6 reasons to justify her theory: 

  1. Cost of living is generally less expensive, so your retirement fund may stretch farther.
  2. There are exciting events, museums, and culture.
  3. College towns are diverse both ethnically and politically. 
  4. There is usually great access to healthcare.
  5. You can be surrounded by youthful energy.
  6. There are plenty of opportunities to get involved in the community. 

What do you think of this idea? Would you consider retiring to a college town?

How can you make your retirement funds last as long as you?

The biggest question in retirement is how to make your money as long as you do. The problem is; no one knows how long they may live. In addition to unknown longevity, market risk, cognitive and physical decline, inflation are other unknown issues that we may experience in retirement. That is why we are exploring the topic of annuities. With the unknown of the future, it can be nice to have a certainty to help you through as you age. Let’s explore how an annuity can help you to maintain your lifestyle as you get older no matter what life throws at you.

What roles annuities can play in your portfolio?

  1. Longevity insurance. In this changing world where most people don’t have pensions, an annuity can act as a substitute for the typical employee pension. The difference is that you have to buy it yourself rather than getting it from the company you work for.
  2. Guaranteed income. We underestimate the importance of social security. An annuity can be a second source of social capital. It can replace your pretirement income and help support your lifestyle later in life. It has the added benefit that you can’t overspend or mismanage it
  3. Help to supplement your no-go years. You could plan your annuity to turn on at age 80 or so. This in addition to social security can support your needs as your life slows down. 
  4. Simplify things for your future self. You don’t know where you will be in 30 years. By buying an annuity you are securing another source of income that you won’t have to worry about or even think about. This can help protect you from fraud, cognitive decline or even greedy kids. 

Have you thought about the roles an annuity can play in your portfolio? What do you think? Do these benefits outweigh the costs? Listen in to hear the positives and negatives involved in getting an annuity in retirement

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [4:40] You have the ability to organize your life however you want

PRACTICAL PLANNING SEGMENT

  • [13:16] How can you make your retirement funds last as long as you?
  • [16:43] What roles annuities can play?
  • [36:33] What are the costs of an annuity?

THE HAPPY LAB SEGMENT

  • [40:56] I’m reading a book I really love

TODAY’S SMART SPRINT SEGMENT

  • [42:56] Check out Atomic Habits by James Clear to prepare for our series in August

Resources Mentioned In This Episode

Market Watch article - 6 Reasons a College Town is the Perfect Place to Retire

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: RAM281.mp3
Category:general -- posted at: 6:00am CDT

Do you know the annuity basics? Over the next 4 episodes, we will explore annuities to see if they have a place in your retirement journey. We’ll discover how they work and if they can help you rock retirement all the way into your 80’s, 90’s, and beyond. On this episode, we’ll start from the beginning and explore our own biases and then cover the annuity basics. By the end of this series, you can decide whether annuities are the right choice for you. Are you ready to get your financial geek on? Strap on your headphones and get ready to explore annuity basics so you can rock retirement.

Annuities: love them or hate them?

Just like in politics, finance has its own polarized camps of thinking. There is an active management camp and a passive management camp. The passive camp says that lower cost is always better and the active camp says the opposite is true. Annuities also have their own love them or hate them camps. Before we begin to have a discussion on annuities it’s important to acknowledge your own biases. I want you to come to this discussion with an open mind. Many of us use positional thinking and believe there are only 2 sides of the coin. But the downside to positional thinking there is that no curiosity remains to explore other ideas. Over the next 4 episodes try to remain open to critical discussion so that we can start a dialogue about annuities. 

Understanding annuity basics

An annuity is a contract that you make with an insurance company. When considering an annuity it is important to read and understand the prospectus. The details are extremely complicated, not just for the layman but for financial advisors as well. Every insurance company is different and so are the features and the contracts they offer. When it comes to taxes, annuities can be tricky. You’ll want to consult your tax advisor before locking yourself into an annuity. The most important consideration is that the contract controls everything. 

Annuities have 2 phases

The 2 phases to an annuity are the accumulation phase and the annuititzation phase. The accumulation period is the period in which the money that you put in is being put to work. The annuitization period is when you start to receive payments which typically occur monthly until the time of death. There is often a death benefit in the case of unexpected death if you are to pass away before the annuitization period begins. 

What are the 3 types of annuities?

  1. A Fixed Annuity earns a fixed interest rate that is predetermined. The payments will be fixed when you annuitize. These can include 2 types: an immediate annuity which starts right away or a deferred annuity. The deferred annuity starts at a later date at which time you can decide to take it all back or get an income stream from the money invested.
  2. A Variable Annuity is less secure and has a menu of investment options similar to mutual funds. These go up and down with the performance of the investment. These have higher fees and your annuity payments can vary based on performance. 
  3. An Equity-Indexed Annuity has money invested in a fixed account. You could earn additional interest based on the contract. 

The potential benefits of annuities are tax deferral, guaranteed income stream, and creditor protection. They guarantee against loss and income. Over the next few episodes, we will explore whether they are worth the cost of the extra fees, the time costs, and the lack of flexibility. Be sure to listen as we dive into the question of annuities with an engineering approach to see if annuities would be a good tool for you to use to rock your retirement.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:55] Annuities: love them or hate them?
  • [8:10] My feelings on annuities

PRACTICAL PLANNING SEGMENT

  • [12:33] What is an annuity?
  • [22:00] What types of annuities are there?

THE HAPPY LAB SEGMENT

  • [28:47] How are you doing with your chosen word of the year?

TODAY’S SMART SPRINT SEGMENT

  • [31:13] Identify a bias you have

Resources Mentioned In This Episode

Episode 252

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: RAM280.mp3
Category:general -- posted at: 6:00am CDT

How to make your money last as long as you do is the biggest question in retirement planning. And now that people are living longer lives your money has to stretch farther than ever before. Today’s retirement is a brave new world and the problems you will encounter haven’t been experienced by any previous generation. Are you ready to learn what you can do to make your money last as long as you? Check out this episode of Retirement Answer Man as we dive into this important question. 

Is there a right way to retire? 

Do you think there is a right way to retire? Do you think that there is a secret formula waiting for you? The truth is that nobody has the recipe for the secret retirement sauce. That’s because no one has done it before. You’ll live longer than ever, you’ll live more years in retirement, you’ll be more active, you’ll spend more, and you probably don’t have a pension. This is all still so new to all of us. So don’t be fooled by someone who thinks they have all the answers, because they don’t. This should challenge you to make small smart decisions since there is no big “right decision.”

How to make your money last

As you now know, there is no perfect model for making your money last. The most important thing to consider is to be agile in your decision making to keep many options open. Since there is no clear path ahead, you just have to stay agile. It's better to acknowledge that and to build a framework that allows you to make lots of little decisions correctly. That way you can react to opportunities and risks quickly as life unfolds. 

Key areas to be intentional about in retirement planning 

When you are thinking about how to make your money last in retirement there are some key factors that you can consider.

  1. Your lifestyle choices. These have a huge impact on the longevity of your money. You can examine what is a need vs. want? Think about your discretionary and non-discretionary expenses. How you define these terms is important. Lifestyle choices are critical to making money last. 
  2. Social capital. Social capital includes social security and annuities. Annuities can guarantee payment to you for the rest of your life. We’ll dive more into annuities in July so be sure to listen to episodes 280-283 when they come out.
  3. Human capital. Your human capital is you. I call this pretirement. Most people who retire really want more time freedom to pursue things they enjoy rather than simply not working. Every year that you continue to work it not only gives you some money, it also gives you socialization, purpose, and fulfillment. The longer you work the longer it takes for you to tap into your financial assets
  4. Turn your use assets into productive assets. Use assets are assets that don’t produce anything for us. They give us enjoyment instead. Your home, car, boat, and collectibles are examples of use assets. You reversible mortgage.

Agile retirement planning helps you keep your options open

Agile retirement planning is all about keeping your options open. You want to have the ability to reevaluate everything as life unfolds. Create a stress test and make small changes along the way. Find risks and opportunities to improve your plan. A bit of intentional action will take you a long way. Check out my book to learn more about agile retirement planning. If you read it and leave an honest review on Amazon I’ll even send you a signed copy!

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:40] Nobody knows the right way to retire

PRACTICAL PLANNING SEGMENT

  • [13:36] How to make your money last?
  • [15:30] There are key areas to keep in mind 

THE HAPPY LAB SEGMENT

  • [29:02] Nichole learned how to ride a bike!

TODAY’S SMART SPRINT SEGMENT

  • [31:00] Do something that you have been wanting to learn

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: RAM279.mp3
Category:general -- posted at: 6:00am CDT

Do you think that extended lifespans will have a positive impact or a negative impact on your life? We all know that people are living longer than ever before, many people see this as a negative, but have you considered the positive impact that this could be on society? Andrew Scott, coauthor of The 100-Year Life joins me to discuss longevity and adding purpose to life. He has some fascinating ideas about longevity and the role of older people in society, so grab your favorite headphones and join me on this episode of Retirement Answer Man.

The House of Representatives just passed the Secure Act

Exciting news for everyone that likes to see work getting done in Congress. The House of Representatives recently passed the Secure Act and it is now going to the Senate. If passed, The Secure Act is likely the most significant change to retirement planning since 2006. Here are a few of the details in the bill.

  1. The bill suggests repealing the maximum age of retirement contributions which is now 70 ½. Since people are working longer they would be able to save longer.
  2. It plans on increasing age of required minimum distribution (RMD) from 70 ½ to 72.
  3. It will lett long-term, part-time workers participate in 401K’s
  4. Parents will be able to withdraw up to $5000 from retirement accounts penalty-free within a year of the birth or adoption of a child.
  5. The bill will allow the withdrawal of up to $10,000 from a 529 plan to help repay student loans.

How can we discover the positive impact of longevity?

As we have seen over the past few weeks, people are living longer than ever before. There are many implications to longevity but some people only look at the downsides. However, there are many positive aspects to living longer. How do we embrace the positive aspects of longevity? Even though not all the long years are healthy ones we are, on average, living longer, healthier lives than the previous generations. When people are more forward-thinking they can have an active, healthy life. Late middle-age has become longer. A longer life also means that you need to invest more in your future. Not just financialilly, invest more in your skills, in your health, and in your relationships.

The 100-year life is a multi-stage life

When we look at having a long life we look at that life in stages. The first part is focused on learning, the next is more career-centered, and in the past the third stage was focused on resting. Today’s modern retiree isn’t necessary looking to rest, they just want more time freedom. Finding purpose in retirement is important to living a happier, healthier life. The more purposeful your life is the longer it tends to be. We now need to find fulfillment in somewhere other than the workplace. So look around you to see how you can invest in yourself and find your purpose in retirement.

What habits is Andrew working on to create a long, healthy life?

Andrew Scott is in his 50’s so he knows that it is important for him to invest in physical and mental health as well as in relationships. He approaches life with curiosity and is focused on growth and exploration. He knows that since age is more malleable than ever before that he needs to be forward thinking. He sees retirement as a time to create a vision to see what all the possibilities are. He thinks that the future is exciting and that once again the baby boomers are here to blaze the trail ahead. What do you think? Are you excited about the prospect of an extended life?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [6:25] The House of Representatives just passed the Secure Act

PRACTICAL PLANNING SEGMENT

  • [10:06] Dr. Andrew Scott is the co-author of the book the 100-year life
  • [14:53] Longevity is not just about how long you live but about how well you live.
  • [23:11] What kind of habits is Andrew working on to create a long, healthy life?
  • [26:04] What is different about the newest generation?

THE HAPPY LAB SEGMENT

  • [32:14] My biking accident caused me to be thankful

TODAY’S SMART SPRINT SEGMENT

  • [37:44] See if you can react positively to a negative situation

Resources Mentioned In This Episode

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

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: RAM278.mp3
Category:general -- posted at: 6:00am CDT

Are you creating healthy habits so that you can age well? Since we are going to live longer lives we want to make sure that we live well not just live long. On this episode of the Longevity and Retirement series on Retirement Answer Man we dive into how to create great habits so that we can age well. What kind of healthy habits have you created to ensure that you age well? Find out which 8 habits can help you improve your life as you age by listening to this episode of Retirement Answer Man.

Are subscription services helpful or a waste of money?

What kind of subscription services do you have? Subscription services are a great way to pay money for things that you truly value. But they can add up if you aren’t careful. Many of us have several different kinds of subscription services ranging from Netflix to gym memberships to the Rock Retirement Club. If you aren’t careful subscribing to multiple services can get out of control and you can even forget that you signed up for something. It's a good idea to periodically review your credit card and bank statements for these recurring charges. Learn 3 steps you can take to ensure that you aren’t paying for services that you don’t use by listening to the Hot Topic segment.

Habits make us who we are

What habits are important to you? The idea of creating good habits becomes much more important as we age. Habits make us who we are but they can also prolong your life. As we age we can experience a cognitive and physical decline. But if you create healthy physical, mental, emotional, and relational habits now they can serve you in later years and help you age well. Some habits can even help you lengthen your lifespan. These 5 habits have been proven to help you live longer.

  1. Not smoking
  2. Moderate alcohol intake
  3. Regular exercise of 30 minutes or more per day
  4. A healthy diet
  5. Maintaining a healthy normal weight

These 8 habits can help you live better and help you age well

Most people don’t have a goal of living to be 100. The thought of living 20 years or more in old age can be frightening. You don’t have control over how long you will live but you do have control of how well you can live. Consider these 8 habits to help you age well.

  1. Exercise. Your exercise habit should include stretching, strength training, and endurance training.
  2. Have a purpose in life. Do something that is meaningful to you whether it is volunteering or even being a fantastic grandparent. Make sure you have a reason to get out of bed in the morning. What is your purpose? Cultivate a purpose
  3. Train your mind. Training your mind is just as important as training your body as you age. Challenge yourself to learn something new.
  4. Maintain a healthy weight. Eat well.
  5. Cultivate a positive mental attitude. Seniors that think of a time of wisdom and satisfaction are 40% more likely to recover from a disability than those who see aging as synonymous with helplessness.
  6. Improve your mood. This can affect so much more than you realize.
  7. Stay social. Create positive social networks that go down the age spectrum. You can keep the friends your age of course, but try to befriend those younger than you as well.
  8. Be a participant in life, not a spectator. Stay out and about, don’t just watch other people do things.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:53] Subscription services are a way to pay money for things you care about

PRACTICAL PLANNING SEGMENT

  • [14:41] Habits make you who you are
  • [17:50] 5 habits that could help you lengthen your lifespan
  • [20:11] 8 habits to live and age well

THE HAPPY LAB SEGMENT

  • [35:04] Create an environment that brings people to you

TODAY’S SMART SPRINT SEGMENT

  • [36:38] Pick one of the 8 habits to help you age well

Resources Mentioned In This Episode

Wall Street Journal Article about subscriptions

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: RAM277.mp3
Category:general -- posted at: 6:00am CDT

How long will you live is one of the trickiest questions in retirement planning. During the Longevity in Retirement series, we will take a look at this question and try and figure out if we can come up with an answer. Chances are it’s longer than you think! Learn how you can try and calculate your longevity, what other wild cards might factor into longevity, and discover some money misconceptions on this episode of Retirement Answer Man.

What are some common misconceptions about money in retirement?

There are plenty of misconceptions about money in retirement. Let’s jump in and find out what some of them are.

  • The average return on the S&P 500 has been about 10%. Sure this is true, but if you look at the past 93 years you will only find 6 instances where the returns were actually within 2% of that 10%. So although 10% is the average return that is a bit misleading. The S&P 500 is actually up and down and all over the place.
  • We spend consistently in retirement. The problem with retirement planning is we don’t spend consistently. Our spending is lumpy. You need to plan out your cash flow management in retirement. We overestimate inflation. Front load
  • Using average returns in planning. We often base our projections at 6% or 7%. But it’s dangerous to make decisions based solely on that. There are better ways to plan for retirement.
  • Depleting your portfolio is the worst thing that can happen. It’s surprising, but there are worse things than running out of money
  • You're going to be fulfilled by not working. You need to be retiring toward something not away from work.
  • You won’t be tempted to by an RV. Just listen to the RV Virus series to understand that’s not true!
  • Taxes will be lower. Sorry, but that’s not typically the case
  • Retirement is purely a financial decision. There is so much more to consider
  • Your portfolio needs to be more conservative.
  • Medicare is free. Sorry, that’s only true for part A. You’ll still have part B and copays.

How long will you live?

This question is one of the oldest questions we have. But it becomes more important in retirement planning. You want to plan so that you won’t just survive retirement, but rock retirement. A person that has already reached the age of 65 is expected to live until 84. Surprisingly, the older you get your life expectancy actually increases. There are many factors that influence longevity. Of course, there are genetic factors, and everyone knows that women live longer. But did you know that prenatal and childhood conditions also have an impact on your longevity? Married people live longer. Socioeconomic status, education, ethnicity, and lifestyle choices are all considerations for calculating longevity.

What are some wild cards that may affect your longevity?

You may have heard that the human lifespan is getting longer. Right now the maximum human lifespan is 125 years, but where do the wild cards fit in? Science is continually coming up with new ways to extend our lives. How quickly will scientists extend the human lifespan and how long will humans live in the future?

Gene therapy can knock out 2 genes that are affected by aging which can cause you to live longer. There are now rejuvenation technologies and artificial reconstruction. Scientists are trying to grow our own body parts so that we don’t have to get transplants. But until then there are already robotic replacement parts like artificial knees and hearts. Improvements in diagnostics help doctors detect diseases early. How long do you think you’ll live?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:01] What are some common misconceptions about money in retirement?

PRACTICAL PLANNING SEGMENT

  • [15:25] How long will you live?
  • [21:09] What are some wild cards that affect longevity?

THE HAPPY LAB SEGMENT

  • [28:04] How will Nichole adjust to becoming old?

TODAY’S SMART SPRINT SEGMENT

  • [31:30] How will you handle the natural progression of getting older?

Resources Mentioned In This Episode

Livingto100.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: RAM276.mp3
Category:general -- posted at: 6:00am CDT

Do you feel like you can harness technology in this brave new world? All month we have been discussing how technology can help you in retirement and on this episode of Retirement Answer Man we’ll discuss how you can harness technology without it harnessing you. This can be a tricky task in this age of the attention economy. There are so many forces that vie for our attention. Learn how to use technology to its fullest without it taking advantage of you on this episode of Retirement Answer Man.

How can you harness technology without becoming a slave to it?

I recently read a book called Digital Minimalism that really helped open my eyes to the distractions in my life. There are so many forces that are vying for our attention in today’s society. There has even been an increase in anxiety and depression. This book gave me some great ideas on how I can continue to harness technology without letting it take advantage of me. Here are a few:

  1. Dumb down your smartphone. Take all the social media apps out. You can engage in the apps when it serves you rather than becoming distracted by all of the notifications.
  2. Keep your phone on the do not disturb mode. This removes the temptation for distraction.
  3. Turn your devices into single-use machines. Multitasking and multi-purposing are a myth. When you switch between tasks constantly you can never give anything your full attention.
  4. Try the Freedom App on your computer in your Chrome browser. This app can block access to time-sucking sites like Amazon, Twitter, etc.
  5. Use social media like a pro. Social media pros are those that use it from time to time to check in on family, friends, and news. The goal is not to use social media as entertainment, instead be intentional about it.

How can you use technology to help you in retirement?

When choosing which technology to use to help you in your retirement think about what it can do for you. What technology will you use to be more social? What technology will you use to be healthier? What will help you with transportation? Having intentionality about how you use technology will help you a lot. I recently permanently deleted my Facebook page, I even deleted the Retirement Answer Man Facebook page. This is shocking to some, but it wasn’t that hard for me. I have more time to focus on what I want and I’m happier because of it. How will you choose technology wisely in your retirement?

How will AI help people as they age?

Richard Caro from Tech Enhanced Life joins me to discuss how we can harness technology as we age. Tech-Enhanced Life evaluates technology to help people decide what they can use to best help them in their life. He has found that the myth that older people are slower to adopt technology is not true. He thinks that people are happy to learn something that will help them out if someone can teach them. AI is an example of that. Alexa is the most recent mainstream form of AI technology. Alexa has become very popular in the past couple of years now that people understand its capabilities.

How can Alexa and other technology help combat loneliness?

The Echo Show has Alexa as well as a screen which can be used for video chatting with friends. Alexa is easy to use and many people enjoy using it to turn on the lights, listen to the weather, or play music. Wearable gadgets are beginning to replace medical alert technology. Many people hesitate to wear medical alert necklaces since they seem bulky or unattractive. Devices like the Apple Watch are cool and trendy. They have evolved to be able to help in an emergency.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [5:46] How to harness technology without becoming a slave to it

PRACTICAL PLANNING SEGMENT

  • [18:10] Meet Richard Caro creator of Tech Enhanced Life
  • [21:43] What is the power of Alexa and AI as people age
  • [25:32] How can AI help to combat loneliness?
  • [35:40] How do you choose what is worth the time and money to learn?

THE HAPPY LAB SEGMENT

  • [39:20] I permanently deleted my Facebook page

TODAY’S SMART SPRINT SEGMENT

  • [42:05] Try putting your smartphone on do not disturb for a while

Resources Mentioned In This Episode

BOOK - Free to Focus by Michael Hyatt

Tech-Enhanced Life

Freedom App

BOOK - Digital Minimalism by Cal Newport

BOOK - Deep Work by Cal Newport

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

 

Direct download: RAM275.mp3
Category:general -- posted at: 6:00am CDT

What will the future of retirement look like? Like it or not we will live longer than any other generation that has ever lived. If you aren’t investing in your health now you may still live a long time, but it probably won’t be very fun. If you want to have a greater quality of life in retirement you have to take your health seriously now. The good news is, there is loads of technology that can help you stay healthy. Listen to this episode to hear about the latest in health technology and how you can use it to live a healthier life as you age.

What technology do I use to stay healthy?

I use technology every day to help me stay healthy and keep fit. Here is a list of my favorite healthy tech items:

  1. Bicycle - You may know that I’m an avid cyclist. My bike provides me with mobility, socialization, physical health, and mental health. But you may be thinking that a bike is not very technologically advanced. Bikes today are quite advanced. I just bought a new bike that was fitted for me that sits me more upright and allows me to ride more comfortably while still being fast and efficient.
  2. Massage chair - My massage chair is a bit of a luxury but it allows me to work out the knots after a long day and to loosen my muscles. If you don’t want to spend as much, try using rollers. There are a lot of great exercises you can do with them to keep your muscles loose.
  3. Yoga studio app - This is a great app for those of us that want convenience and don’t want to go all the way to yoga classes or feel a bit self-conscious about going to classes. The app has different focuses and levels and can be customized to meet your needs.
  4. Standing desk - The standing desk is a game changer. It allows me so much mobility throughout my day. I’m constantly adjusting it as I change positions. Mine is adjustable,it goes up and down from standing to sitting, I can even use a stool. Since switching to the standing desk I have experienced fewer problems with my hip flexors and back
  5. Online networks - The Rock Retirement Club is an example of how connecting with people in the same season of life can provide you with an encouraging attitude. Technology can connect us through distance.
  6. Dog leash - Ok, this may be low tech, but walking the dog each day keeps me active, connected with my wife, and provides me an opportunity to be social.
  7. Apple Watch - There are numerous ways the Apple Watch can help you stay healthy. There is a pedometer and there are even settings to remind you to stand up or breathe. It encourages you to work out and can even track your heart rate.

What are the different kinds of advances in the future of health technology?

Technology is advancing at an astounding rate everywhere including in different areas of health technology. Obviously, we have advanced a great deal in medicine from genome sequencing to knee replacements. The 6 million dollar man is here. But there are also advances in telehealth and telemedicine. You can now call a doctor or health professional and get advice over the phone without having to leave your house. Many people use pacemakers and defibrillators. Remote monitoring allows healthcare professionals to be alerted if there is a sudden change. Electronic health records allow doctors to share information with each other and you can keep the records to have on hand for yourself. Health technology will have a huge impact on our lives as we age.

Brain health is just as important as physical health

To age well in the future, it is important to pay attention to cognitive health as well as physical health. We can use different exercise, movement, and nutrition apps to help us stay fit and build healthy habits. But its also important to do what we can to exercise our minds. We can use technology to improve our cognitive skills and keep dementia or Alzheimers at bay. We can learn new languages through apps and personalized online classes. You can even take online music lessons. There are games that get progressively harder to keep your mind engaged. What kind of mental exercise are you using to grow your mind?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:45] What technology do I use to keep myself healthier?

PRACTICAL PLANNING SEGMENT

  • [21:18] What is some technology for investing in your health?
  • [25:30] Genome sequencing will allow for more personalized healthcare
  • [28:25] There will be cognitive advances as well

THE HAPPY LAB SEGMENT

  • [33:51] Nichole and I both have recent graduates at home

TODAY’S SMART SPRINT SEGMENT

  • [36:15] Do 1 thing to invest in your health

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: RAM274.mp3
Category:general -- posted at: 6:00am CDT

The decisions you make now can affect how you age. Most people would prefer to age in their own home. There’s something about living in our own homes that provides comfort and peace and we want to hold on to that for as long as we can. On this episode, we will explore how technology can help keep you independent longer. We will check out the different technologies that exist already as well as what is in store for us in the future. Join me to discover the exciting world of technology and learn how it can help you rock retirement.

What is it about owning a home that makes us feel independent?

Do you remember when you finally bought your own home? You could finally paint it however you wanted (with your wife’s permission, of course!). Having our own home creates a sense of privacy, self-determination, and control over our environment. Living alone ensures that we are not a burden to anybody else. Nobody wants to be institutionalized. We don’t want other people to control our routine and invading our space. Listen to this episode to discover how technology can help keep you in your own home longer.

What are some benefits of aging in place?

Living out your golden years in your own home is not only preferable to you but there are added benefits that you may not have considered.

  1. Aging in place can cost less than assisted living, nursing home or a retirement community.
  2. It’s more comfortable. You are surrounded by all of your favorite stuff and you know where things are.
  3. It helps slow the advancement of memory loss. Since you know where everything is already you are less apt to forget things.
  4. Living at home strengthens your social network. There is a comfort in seeing those you know around you. Not just your friends, but neighbors and others in your community as well.
  5. You have a higher sense of self-determination. 40% of baby boomers expect to remodel their homes in the future or near the time of their retirement.

If you are considering remodeling your home or updating it, listen to this episode to hear how to harness technology to set yourself up for aging in place.

How can you harness technology now to set yourself up in the future?

We are living in exciting times. There has been an explosive growth in technology since the revolutionary “I’ve fallen and I can’t get up” commercial. Grocery delivery or curbside pickup allows you to skip the trip to the grocery store if you aren’t feeling up to it. If you feel insecure about living alone you can get a camera security system around your house complete with a video doorbell system. The Nest or programmable thermostat can understand your habits and keep your home comfortable. The Roomba vacuum can help you tidy up. When you are considering updating or remodeling your house consider the upgrading to the latest technology, whether you get an easy loading washer and dryer, a smart refrigerator, smart lights and activity sensors. You may not need it now but this technology can help you age in place.

What does technology have in store for us in the future?

Robotic lawn care will be like a Roomba but for your lawn. Can you imagine that they are creating mirrors that assess your health? They will look for warning signs of illness. If that’s not crazy enough, they are creating toilets that analyze the contents! Pill management can be confusing especially if you have more than one prescription. They are creating pill bottles that can help you keep track of when they have been used. In Japan, there is a large aging population already and they have developed carebots. Carebots are robots designed to help older people. They can do many things from carrying you, to turning from a bed to a wheelchair, to fetching things for you. Listen to this episode to hear what the future may bring to help you age in place.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:20] Most people would prefer to age in their homes
  • [6:12] What are some benefits of aging in place?
  • [12:06] The decisions you make now will affect your future

PRACTICAL PLANNING SEGMENT

  • [14:56] How can you harness technology now to set you up in the future?
  • [23:54] What technology is coming in the future?

THE HAPPY LAB SEGMENT

  • [30:05] Prioritize your happiness

TODAY’S SMART SPRINT SEGMENT

  • [32:25] What can you do to prepare your home to age in place?

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: RAM273.mp3
Category:general -- posted at: 10:20am CDT

On this episode in the Retirement of the Future series, you will learn how technology will help keep you connected and strengthen your social networks in your retirement. We also discuss why it is important to stay socially connected, how to stay connected, and how to use technology to help you find your tribe. Listen to this episode of Retirement Answer Man to learn how to stave off loneliness and stay connected to your social circle in person and by harnessing the power of technology.

Why is it so important to stay connected?

We all know that loneliness sucks. But did you know loneliness can actually cause health problems? A vibrant social network can reduce the odds of addiction, Alzheimer's, and even early death. Studies have found that loneliness is actually a predictor of poor health. As you age it can become more challenging to stay connected to your social network. Many elderly become more isolated due to physical restraints or even because they have become the last person standing.

How can you continually renew your social circle?

Maintaining a vibrant social network takes work. But it is important to continually renew your social circle to include people younger than yourself. Having younger people in your group of friends helps you to stay fresh and allows you to bestow your wisdom on another generation. When you focus your friendships on common interests those connections transcend chronological age.

There are many ways to stay active and connected. You can take classes, join a club, volunteer, and attend church or music practice. These activities help you to broaden your circle of friends and often include people from many different age brackets.

How can technology help you maintain your social networks?

Technology allows people to stay connected in ways that we had never imagined. Who would have thought years ago that your phone would become such a powerful tool that you carry in your pocket? Today we can use Facetime, Zoom, or Skype to connect face to face with people from around the world.

Social media sites like Facebook, Twitter, and LinkedIn allow us to connect with people we know or have known years ago. Through these sites, we can have conversations with friends in a digital way even if we aren’t able to connect with them directly. Those digital conversations can spill over to create offline conversations as well. With social media, you can feel like you are a part of someone’s life even over great distances. Even texting is a powerful tool that helps you stay connected. Group texts are a fun way to keep us connected when everyone is too busy for real conversation.

How do you find your tribe?

Years ago it used to be that you were only able to create friendships with those who lived nearby. Long distance phone calls cost a fortune and conversations with those far away had to be kept short and sweet. Nowadays you aren’t relegated to friendships with only those who live in your neighborhood.

Through apps like MeetUp, Our Time, and Connected Living you can find people that share similar interests with you. Meeting people online makes it easy to spark up friendships with people who love what you love. You can build deep connections with people regardless of distance. We have more power than ever before to connect with people in meaningful ways. And technology is just becoming more advanced. Who knows how technology will advance in the future. Listen to this episode to hear how technology is advancing and sign up for 6-Shot Saturday to get a list of online resources to help you find your tribe and stay connected.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:28] Loneliness should be targeted in ad campaigns
  • [5:58] Focus on renewing your social circle

PRACTICAL PLANNING SEGMENT

  • [8:07] How can technology help you maintain your social networks?
  • [12:28] How do you find your people?
  • [16:54] What will the future bring?

THE HAPPY LAB SEGMENT

  • [22:15] Seek out your crowd

TODAY’S SMART SPRINT SEGMENT

  • [25:31] Reconnect with someone and create a budding friendship

Resources Mentioned In This Episode

Connected Living App

Our Time App

MeetUp App

BOOK - 48 Days to the Work 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: RAM272.mp3
Category:general -- posted at: 6:00am CDT

We are surrounded by technology, but do you really think technology will benefit you in retirement? During this month-long series, we will look into the future to see how technology will change the picture of your retirement. Will it add years to your life? Will technology help you live a richer life in your golden years? How will technology serve you in your retirement? Find out by listening to this episode and this entire series as we explore the retirement of the future.

There is freedom in mobility

Driving gives you a sense of freedom. Remember when you first learned how to drive? It was a milestone in life that gave you access to the whole country. The first big step you took toward independence as a young adult was learning how to drive. But as you get older your vision, hearing, and reaction times worsen. Medications can also inhibit your reflexes. Older drivers are more fragile and much more likely to be killed in crashes. Everyone wants the ability to move where they want to go when they want to go. And losing your ability to drive can greatly diminish your sense of freedom.

Automotive technology is changing the way we drive

Self-driving cars are no longer a pipe dream. We are well on our way to seeing self-driving cars on the road. As a matter of fact, we will probably live through that transformation. Technology in the past 10 years has greatly enhanced the driving experience to make driving much safer. Think about it. Your car may not be driving itself yet, but many cars have blind spot sensors, automatic emergency braking, adaptive cruise control, and even self-parking. These incredible advances can help people stay more mobile longer. Because of this current technology and technology we haven’t even thought of yet, you will probably be able to stay on the road longer.

What are other ways that technology will help you stay independent longer?

Lyft and Uber ride services allow people to get a ride for a fairly reasonable price. The ride will come to pick you up quickly and you can choose the level of ride service you want. You can even choose whether you want to share a car with someone else. The benefit of these services is that you can get a reliable ride in minutes without having to bother someone you care about. So when you start feeling unsafe or uncomfortable driving you can still stay independent. Another benefit of affordable ride services is that you can give up the cost of owning a car. You’ll no longer have to pay for insurance or upkeep.We associate the freedom with driving but technology can provide us with freedom without the burden of driving.

What will the future bring?

Self-driving cars are coming. We’ll probably see them in the commercial realm first. They could be here in the next 10 years. Other exciting transportation technologies include flying cars, floating trains, and hyper loops. We may see a road system that talks to cars. All of this innovative technology is being tested in some way or another. The most exciting part is that people will be able to maintain a sense of control over where they go and when they go. The pace of change is happening so quickly that we don’t even really notice it. How do you think technology will change your retirement?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:38] How technology is changing so rapidly

PRACTICAL PLANNING SEGMENT

  • [12:10] How will technology transform your mobility?
  • [18:22] How ride-sharing apps can keep you independent longer
  • [22:50] Meals on Wheels story
  • [25:54] What will the future bring?

THE HAPPY LAB SEGMENT

  • [31:35] Technology is a tool, but don’t let it become a distraction

TODAY’S SMART SPRINT SEGMENT

  • [34:55] Put your phone away and say hello to someone

Resources Mentioned In This Episode

BOOK - Digital Minimalism by Cal Newport

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

 

Direct download: RAM271.mp3
Category:general -- posted at: 6:00am CDT

IRA, Roth and 401K management can be confusing, that’s why I answer listener questions in the Practical Planning segment of this episode. This is the last episode of the How to Use Your Accounts series. You’ll definitely want to go back and listen to the entire series to help you familiarize yourself with the different types of retirement accounts and how to finally use them in retirement. Next month we’ll dive into how technology improves retirement. But for now, listen to these listener questions about account management in retirement.

How to make money simple for someone in your life

Peter Lazaroff joins me on the Hot Topic Segment. He recently wrote a fantastic book called Making Money Simple. Since graduation season is coming up, I highly recommend this book for any graduate. Many financial advisors and Wall Street bigwigs want you to think that saving money and building wealth is complicated, but that’s not true. It’s easy to make good choices with money if you can just get out of your own way. Peter teaches how to build a system that works around our human nature to complicate money choices. He shows that finding small sustainable habits that you can automate will lead to financial success.

What do you do if you miss taking the RMD?

One listener asks what would happen if you forget to take your required minimum distribution (RMD) one year. You really don’t want this to happen! The IRS imposes a 50% penalty on the amount you didn’t take. For instance, if you have an RMD of $20,000 but you only took $10,000 the penalty would be $5,000. The first thing you need to do if you miss your RMD is talk to a tax advisor. Then take the distribution as soon as you figure out your mistake. Do it alone and maintain records. You will need to file the form 5329 for the year in which there was a shortfall either with your tax return or separately. If you missed it multiple years then you need to file a form for each year. The IRS has grated redemptions from this so it is important to keep records and let them know why it happened and how it was remedied.

Are there any options for tax-free growth investments if your income is a bit higher than the Roth income eligibility?

One listener is looking for options on tax-free growth investments. Since he lives in Minnesota he feels that the 403B isn’t his best option because the state loves to tax retirement accounts.

One option is a back door Roth IRA. The way to do this is to make a nondeductible contribution to an IRA and then immediately convert it to a Roth. Saving money in an HSA is a good option as well. When you save in an HSA this money is pretax. You can allow it to accumulate and even invest it. It comes out tax-free as well but it can only be used for medical expenses. However, if you keep a record of your expenses you can submit an expense for reimbursement several years later. One last option to ease the tax burden is to move to a different state in retirement.

Basic retirement tax tips

  1. Start diversifying your balance sheet between taxable, tax-free, and tax-deferred accounts as early as you can.
  2. Dial in what it costs for you to live comfortably. You can better control your taxable income when you understand your costs.
  3. Consider delaying taking your pension (if you have one) to do Roth conversions.
  4. Consider taking distributions from tax-deferred accounts.
  5. Move to a lower tax state.
  6. Be charitable.
  7. Build your balance sheet in a way to give you options. Maximize how you withdraw money.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:56] Peter Lazaroff discusses his new book Making Money Simple

PRACTICAL PLANNING SEGMENT

  • [21:17] What do you do if you miss taking the RMD?
  • [26:05] Mike wants to know how to hide his money from RMD’s
  • [27:56] Are there any options for tax-free growth investments if you are a bit higher than the Roth income eligibility?
  • [31:41] When does it make sense to roll over a traditional IRA to a Roth while still working?
  • [34:15] Basic retirement tax tips

THE HAPPY LAB SEGMENT

  • [36:55] Play your own game and set your own rules, don’t be worried about what others are doing

TODAY’S SMART SPRINT SEGMENT

  • [38:32] Have an awesome week!

Resources Mentioned In This Episode

Morningstar article about the missed RMD

BOOK - The Elements of Investing by Burton Malkiel

BOOK - 30 Minute Money Solutions by Christine Benz

BOOK - The Richest Man in Babylon by George Clason

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

The Retirement Answer Man Facebook Page

Direct download: RAM270.mp3
Category:general -- posted at: 6:00am CDT

You may be wondering, should I convert my IRA to a Roth? It’s hard to know when the time is right for a Roth conversion. So today we continue the discussion on how best to use your retirement accounts and plan your tax strategy. But first, in the Hot Topic session, you’ll learn how important vision is to planning your retirement. So many people are stuck in the prison of their mindset. Listen to this episode to hear more about how important tax strategy is, whether you should convert your IRA to a Roth, and how to break free from your institutionalized mindset and really rock your retirement.

Do you have a lack of vision about your retirement?

When many people make their retirement plans they are still institutionalized. We have been working our whole lives. That every day 9-5 stunts our creativity and many can’t really visualize what to do with all the time freedom that retirement entails. To simply stop working takes much more forethought than you think. This is why so many people change their retirement plans drastically after they retire. You are only limited by your creativity and your resources. Do you have the vision to dream big?

A Roth conversion can help you balance your tax equilibrium

At this point in your life, you have probably accumulated plenty of assets in tax-deferred IRA’s and 401K’s. You have set yourself up well for retirement, but you know there is a big tax liability looming ahead of you. At the age of 70 ½, you’ll have to take the required minimum distribution (RMD). If you have a lot saved in tax-deferred assets your tax liability could be significant. This is why proper tax planning could lessen your burden significantly. One possible solution to balance your tax load could be to do a Roth conversion.

Should I convert my IRA to a Roth?

If you have money in an IRA that you haven’t paid taxes on you can take all or part of that and convert it into a Roth IRA. The catch is, you have to pay taxes on the income the year that you do the conversion. Then the money can grow tax-free for the rest of your life and you won’t have to worry about the RMD. In effect, you are pre-paying your taxes. That is what a conversion is.

Taxes are at an all-time low and many believe they will only increase in the future. Some people choose to do a Roth conversion all at once but others choose to do a partial Roth conversion. By studying your modified adjusted gross income with an online income calculator you can choose the amount of money in your IRA that you want to convert that will not push you into the next highest tax bracket.

Careful tax strategy can be even more effective than an investment strategy

When deciding how to convert your savings into a Roth you need to consider your tax strategy. Do you want to be aggressive about converting the money into tax-free assets? Or do you want to do rolling Roth conversions and think about your tax burden year by year? Here are some things to consider when planning your tax strategy:

  • How will your income change impact your ACA premiums?
  • Use an online calculator to realize your effective federal income tax.
  • How might your savings impact your social security?
  • How will it affect your tax rate
  • What is the time frame for your money, is it multi-generational wealth?

If you plan well you can save a significant amount in taxes. If you can convert and save 10% of a million dollars that’s $100,000! Talk about your tax strategy with your financial advisor to decide what the best choice is for you to start planning how you will begin filling your retirement income buckets

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:10] Do you have a lack of vision about your retirement?

PRACTICAL PLANNING SEGMENT

  • [9:15] A Roth conversion can help you balance your tax equilibrium
  • [13:19] What are some strategies you can use?

THE HAPPY LAB SEGMENT

  • [19:10] Treat yourself even if it is spontaneous

TODAY’S SMART SPRINT SEGMENT

  • [20:45] Start looking at potential Roth conversions the year after you retire

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

The Retirement Answer Man Facebook Page

Direct download: RAM269.mp3
Category:general -- posted at: 6:00am CDT

You have been diligently saving in tax-deferred accounts for years and you finally have enough squirreled away to fund your retirement. But we need to discuss the elephant in the room. You have a looming tax burden that if not handled correctly can really mess up your retirement plans. On this episode, I’m going to teach you how to come up with a withdrawal strategy to help you fund your retirement. Are you ready to learn how to withdraw from your retirement accounts without Uncle Sam getting more than his fair share? Then listen to this episode of Retirement Answer Man to help you plan your retirement withdrawal strategy.

The looming tax burden

Your money has been growing tax-deferred year after year. This is a great way to get you to save for retirement, but now it’s time to pay the piper. Do you know what your tax liability is? If you have $1 million in tax-deferred accounts and you take it all out in one year then you’ll have to pay 30% in taxes. Your million dollars just shrank to less than $700k. The good news is that you can minimize your tax liability in how you withdraw from your accounts. The great thing about retirement is that you have more control than ever in deciding which tax bracket you will fall under. You can manage how much you take out and where that money comes from.

You need to be more tax aware than ever before

How do we take advantage of the tax system to maximize the amount of money that we put in our pockets? Early on in retirement is when you start to think of spending in big ways. You may want to buy an RV or a vacation home or remodel your current home. Many people spend on these extraordinary expenses with little thought as to how they should withdraw the money for these projects. You want to be aware of the tax brackets when you decide how you withdraw your income. Thinking about tax strategy is not nearly as exciting as when you think about investment strategy. It’s not glossy and sleek, but having the right tax strategy is even more important at this point in your life and having the right strategy to fund your retirement can save you thousands of dollars down the line.

What are your income sources in retirement?

There are usually 3 sources of income to fund your retirement. There is social capital like pensions and Social Security. Next, you have human capital, which is the income that you may earn in pretirement. Lastly is financial capital or the money you have saved in various accounts. Your financial capital is then broken up into 3 categories. The money you have already paid taxes on, money from tax-deferred assets (401K’s and IRA’s), and tax-free assets (Roth IRA’s). You have to have a strategy on how to manage all of these buckets of differently taxed assets. Having the 3 buckets gives you some flexibility on how to pull money out of these accounts.

What can you do to frame your withdrawal strategy to fund your retirement?

Retirement tax strategy can get really complicated. That’s why it is so important to have a plan. Follow these steps to help you minimize your tax burden.

  1. Know your income sources. Figure out what your social capital, human capital, and financial capital are and identify where you have control.
  2. Know your planned spending. This sounds simple but you should understand the sequence of your spending and plan for the lump sum expenses. Decide how you will pay for them.
  3. Model how to find tax equilibrium. You need to look at your tax bracket and plan year by year.
  4. Think about where to put your investment assets.
  5. Think dynamically to stay agile and flexible each year.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:20] That looming tax burden
  • [6:33] Be aware of your tax bracket as you withdraw your income

PRACTICAL PLANNING SEGMENT

  • [9:25] A correction from a previous episode
  • [10:53] Have a withdrawal plan
  • [16:45] RMD is waiting for you
  • [19:02] The ACA adds another element of complexity to your withdrawal strategy
  • [23:12] What can you do to frame your withdrawal strategy

THE HAPPY LAB SEGMENT

  • [26:02] Human connection is awesome to see

TODAY’S SMART SPRINT SEGMENT

  • [28:05] Outline how you will withdraw money in your first 2-3 years 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

The Retirement Answer Man Facebook Page

Direct download: RAM268.mp3
Category:general -- posted at: 6:00am CDT

You have been saving into your IRA’s, Roth IRA’s and 401K’s for years. But once you retire how should you get money out of them? Over the next few episodes, we are going to dive into your different retirement accounts so that you can fully understand them. It’s important to understand the difference between these accounts so that you can create a withdrawal strategy to minimize the tax implications. Are you ready to learn about the different types of retirement accounts so that you can rock retirement? Listen in to this episode of Retirement Answer Man, to hear the basics of IRA’s, Roth IRA’s, and 401K’s so that you can understand how to create a sound withdrawal strategy.

To click, or not to click?

The secret your financial advisor doesn’t want you to know. . . With all the uncertainty in the current markets. . . Massive returns with no risk at all. . . Do these sound like headlines you’ve seen on the internet? We are all looking for the secrets to investing. Although we are all looking for the best return on our investment and we understand that there is no such thing as no risk, it can be hard not to click just to see what they are talking about. There must be some secret to what the rich are doing, right? But once you click on these ads you are put into a hard push sales cycle. If you see these catchphrases, run in the other direction.

What are the basics of IRA’s?

You’ve been contributing to an IRA for years, but what is it exactly? When you make a contribution to an IRA you can deduct it from your taxes. This money is tax-free when you put it in the account. It grows in the tax-deferred account for decades. At age 59 ½ you can take the money out, either a little bit at a time or all at once. This is when you will pay the taxes on the money. This type of account works well because you are usually in a much lower tax bracket once you retire. But the taxes can be tricky if you have been a great saver. The IRS wants you to take the money out eventually so that they can tax it. This is why they have a Required Minimum Distribution at age 70 ½. The Required Minimum Distribution is a certain percentage that you are required to take out of the IRA each year. And each year the percentage goes up. So if you are overfunded the RMD can be a tricky tax issue.

What is the difference between Roth IRA’s and IRA’s?

With an IRA you get the tax benefit when you put money into the account, with a Roth IRA you have already paid taxes on the money. The beauty of the Roth is that all the growth that the money earns in the account over time does not get taxed. It’s a great deal.

Before you take money out of the Roth IRA it’s important to understand the 5-year rule. The 5-year rule states that 5 years must have passed since the tax year that you have made your first contribution before you can withdraw any earnings from the account tax-free. If you don’t follow the rule and you are under 59 ½ then not only is the growth taxable, but you have a 10% penalty as well. Another important difference to understand about the Roth IRA vs. the IRA is that there is no Required Minimum Distribution.

What is a 401K?

A 401K is an employer savings plan. Again you must be 59 ½ to withdraw from your 401K without a penalty. You can roll it over or transfer it into an IRA. You may want to look into starting a post-tax Roth 401K. These are bound by the same 5-year rule as the Roth IRA. Listen to this episode to learn more about the rules surrounding 401K’s, Roth IRA’s and traditional IRA’s.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:46] Should you click on that ad?

PRACTICAL PLANNING SEGMENT

  • [12:08] What are the basics of IRA’s?
  • [17:46] What’s so great about Roth IRA’s?
  • [21:15] Understanding the 401K

THE HAPPY LAB SEGMENT

  • [25:35] What are your spring vacation plans?

TODAY’S SMART SPRINT SEGMENT

  • [27:40] Get your tax papers to your CPA now

Resources Mentioned In This Episode

Retirement Starts Today with Benjamin Brandt

Mark Lehman 228Main.com

Wealth Care for Women

Money for the Rest of Us

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

Direct download: RAM267.mp3
Category:general -- posted at: 6:00am CDT

After this month’s RV virus series, I’m sure you are all ready for a road trip! Ty and Larry join me on this episode to share their wisdom from more than 7 years on the road. This couple is truly inspirational and will have you rethinking your purpose and what it means to retire. Listen to Larry and Ty discuss what it means to retire with purpose and how their life looks after 7 years on the road.

Are you planning a retirement with purpose?

Retirement is a dream that comes after years of hard work and planning. You wait so long for that magical day to come. But what if all of a sudden the day comes and you discover that you don’t have a reason to get up in the morning? So then what are you going to do? You can only golf or fish or ride your bike for so many days. Ty and Larry realized that a lack of purpose in retirement leads to a lack of meaning in their lives. They found purpose in getting out of the house and helping others. Have you thought about what your purpose will be in retirement?

Modern retirement isn’t about spending your golden years resting on a park bench

The modern retiree has so much time, capital, and wisdom to share with the world. Retirement isn’t about finally reaching the day where you have nothing to do with your life. It is a major life change where you get to redefine what life is all about. This is the opportunity for you to redesign your life around what you are passionate about. What will be your purpose in retirement? Will you volunteer? Devote time to the grandkids? Write your memoirs? It doesn’t matter what it is, it just matters that you have a purpose. Think about what your purpose will be and who you will spend your time with.

An RV road trip with a purpose

Larry and Ty quickly realized after they retired that they needed a purpose. It was important for them to serve others. 7 years ago they discovered Habitat for Humanity and have been active Habitat RV Care-a-vanners ever since. With the Care-a-vanners they have a mobile community where they can be of service to others. Their purposeful road trip takes them all over the country building homes and serving different communities. They love the work they do and find that it helps to keep them young.

What is the cost of living their RV lifestyle?

Ty and Larry drive a 38 foot Class A Winnebago diesel. These rigs can run anywhere from $250,000-$2 million when purchased new. They found a good deal on a lightly used model. Their rig is self-contained and has a washer and dryer and even a satellite dish for watching tv. They spend about 250 nights a year on the road and maintain a home base in Illinois. They find places to stay through their work with Habitat for Humanity and often stay 2 months at a time in a single location. Often these sites are discounted or even sponsored by generous donors. They also utilize a senior pass that allows them discounted rates at national parks and Army Corps of Engineer sites

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:46] Some comments about purpose in retirement

PRACTICAL PLANNING SEGMENT

  • [11:08] How Larry and Tai have lived the RV lifestyle and coupled it with purpose
  • [21:01] What is the cost of living?
  • [26:07] Working keeps them young

THE HAPPY LAB SEGMENT

  • [28:43] What can you do next to improve your health?

TODAY’S SMART SPRINT SEGMENT

  • [33:44] What sense of purpose will you have in retirement?

Resources Mentioned In This Episode

Habitat for Humanity

Winnebago Group WIT club

Habitat RV Care-a-vanners

National Parks Senior Pass

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

Direct download: RAM266.mp3
Category:general -- posted at: 6:00am CDT

So are you still curious about how to see America but maybe a bit worried about jumping into an RV? All month long we have been discussing the RV lifestyle. In the first episode of the series (263) we discussed how to diagnose the virus. The next covered how to afford it, and on this episode, we discuss the alternatives to RV’s that are out there. If you have the RV virus you might be overly focused on the romanticized dream of owning an RV and you may not have considered any alternatives. We’ll also chat with Fritz who comes with experience in RV ownership and he shares his expertise with the RV lifestyle. Listen to this episode to discover if there may be an antidote to the RV virus lurking inside of you.

Do you have tunnel vision?

Once we get this RV virus it can be hard to think of much else. It starts with an innocent RV show. It’s just a fun weekend activity, you think. But that innocent day out plants a bug inside of you. You start getting the magazines, reading the blogs, watching the YouTube videos and pretty soon you are eating and drinking RV’s. When you have this kind of tunnel vision it can be hard to picture a future that doesn’t involve an RV. But before you jump in with both feet (and all your money!) consider some alternatives.

How to see America without an RV

You may think that there is no cure other than getting an RV but that’s not the case. There are other alternatives that you need to consider before going all in. I offer you these 4 antidotes to see if they can cure the RV virus:

  1. Rent an RV for a month. There are plenty of RV rental sites that you can check out so that you can rent the dream RV that you have romanticized. This way you can really see if the romanticized version you have in your head matches the actual experience.
  2. Rent or borrow a friend’s RV. We all know people that have RV’s sitting in storage that they never use. Do both of you a favor and borrow theirs. This is a great way to test the waters.
  3. Start small. Try buying a used smaller RV, maybe even a pop-up to see if the lifestyle really suits your vision. This way if it doesn’t work out you won’t be out an arm and a leg. Frequently you can sell these for what you paid for them.
  4. Rent a home instead. Sometimes it’s not really the RV virus you have, but maybe it’s just an itch to travel more. Think about how to see America without an RV. Try renting a home somewhere you have been wanting to visit for a month. With VRBO and AirBnB finding a vacation rental has never been easier.

I’m not saying that you shouldn’t get an RV, but that it’s important to make the right decision. It’s ok to go all in but be intentional about your choices. You need to be honest with yourself about the cost of ownership and the way you will use the RV.

Why did Fritz choose a 5th wheel?

Fritz and his wife have had a love of camping since childhood. They also enjoyed camping with their daughter and have enjoyed backpacking, car camping, and they had a small trailer for years. The decision to buy a 5th wheel was not one they took lightly. They visited RV shows for years to really understand the features of all the different types of RV’s that are out there. They ultimately chose a 5th wheel based on comfort and the realities of having an engine in your house. Fritz also knew that he wanted to have a truck in retirement, so a 5th wheel was the obvious choice for them.

What are their RV plans?

Fritz has been retired 8 months now. They took some short trips over the past summer and really got comfortable in their 5th wheel. This summer they are taking a Great American Road Trip with their 4 dogs. They are planning to head from Georgia up to Seattle and back. They are in the planning stages right now securing campsites and mapping out how to see America. They understand the logistics of this epic journey and are planning to take it nice and slow traveling no more than 300 miles a day. Listen to Fritz discuss the excitement of how they are creating their plans on this episode of Retirement Answer Man.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [4:25] What are some antidotes to the RV virus?

PRACTICAL PLANNING SEGMENT

  • [14:16] Fritz’s journey with the RV virus
  • [17:38] How did they get to the 5th wheel?
  • [22:14] Why did he get a 5th wheel?
  • [28:20] What are there plans?
  • [33:22] Do they have any concerns?

THE HAPPY LAB SEGMENT

  • [36:22] Are you happy about getting checkups?

TODAY’S SMART SPRINT SEGMENT

  • [38:23] Get a health screening or take an antidote for the RV virus

Resources Mentioned In This Episode

RV Share

RV America

Outdoorsy

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center


The Retirement Answer Man Facebook Page

Direct download: RAM265_2.mp3
Category:general -- posted at: 1:13am CDT

Now that the thought of the RV life has fully got you hooked. It’s time to figure out how much this life will cost you. This episode is the second in the RV virus series. On episode 263 we diagnosed the symptoms of the RV life, and over the next 3 episodes, we will delve in deeper to this potentially costly yet fun virus. If you are ready to jump into the RV life with both feet, you’ll want to listen to this series first to arm yourself with as much knowledge as possible before you ‘brake’ the bank.

Do you know all of the different types of RV’s?

Before you rush off to buy the first RV you come across you’ll want to learn a bit more about the different types of RV’s that are out there.

  • Class A - This is the big daddy of RV’s both in size and in cost. They can run from $100,000-$1 million. The class A can be around 45 feet long and can come full of all the amenities you didn’t know existed. These are the ones you see with the flat front ends often towing a car behind.
  • Class B - This one is more of a camper van. It has a van-like chassis with a sleeping space above the cab. Although the living space is much smaller, this one is much easier to drive than the larger class A. And in general, it is easier to set up than the class A.
  • Class C - The class C is more of a combination between the class B and A. Like the class B, it has a van-like chassis. But there is lots of room for extra sleeping. This is a good option for families since it usually has several sleeping spaces. It is easier to drive than class A and is not as small as the class B.
  • Travel trailer - Travel trailers are the ones you hitch up to truck or an SUV. This is a nice option because you still have a vehicle to drive around town. Travel trailers are much easier on the budget maintenance-wise. Since the vehicle is separate from the camper part the maintenance is easier and not as costly
  • 5th wheeler - This option is similar to the travel trailer in that it is towable. But unlike the travel trailer, it has a gooseneck connector. You need a pickup truck with a 5th wheel connection. The 5th wheeler has more space than a travel trailer and is more expensive.
  • Pop-up - The pop-up trailer is often referred to as the gateway drug of RV’s. This is often the first step people take to get into the RV life.

How much does the RV life cost?

The costs of RV’s vary greatly both between the classes and within the different classes themselves. The class A can average $280,000, a class C can be around $65,000, and a class B can be $100,000 and. A travel trailer can be as little as $13,000 and a 5th wheeler can be around $50,000. It is important to remember that smaller doesn’t necessarily mean cheaper in the RV world.

Another important thing to consider is the additional costs. If you go with a trailer, then you will need a vehicle to pull it. While you aren’t using your RV the storage can cost between $50-$500 a month. Gas mileage can be between 5-8 mpg, so you need to consider extra fuel costs. It is important to think about maintenance costs as well. The quality of build in an RV is not like that of a house and with all the movement things get jostled around. And don’t forget those campground fees while you can find free places to camp, you may pay as much as $50 per night for some campgrounds.

Where to begin?

Start your RV life journey by checking out RV shows. These are great places to begin to dream. Although dreaming is a lot of fun, it is extremely important to do your research. You need to know what you are getting into so that you don’t make costly mistakes. Don’t jump right in and buy the first RV you see. You may want to consider renting for a month or so first. There are sharing platforms for RV’s similar to VRBO. These are a good place to start. It may seem costly to rent an RV since this can cost between $5000-$8000 for a month, but when you consider the fact that you will be spending $100,000-$200,000 this could be a good investment to ensure you are doing the right thing.

Learn from Josh’s full-time RV experience

Josh and his wife have been full-time RVers for more than 2 years. He was initially not excited about the thought of RVing, but a weeklong trip in an RV for his wife’s birthday was all it took to catch the virus. He and his wife like to boondock. This is self-contained camping where the RV isn’t hooked up to anything. Boondocking is also referred to as dry camping. Before transitioning to a full-time RV life he and his wife downsized considerably and unburdened themselves from a lot of stuff. He attributes their ease at transitioning to the RV lifestyle to downsizing first. Learn more from Josh’s experience as a full-time RVer by listening to his story in the Practical Planning segment of this episode of Retirement Answer Man.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:42] A review of the different classes of RV’s
  • [9:38] What are the costs of these RV’s?
  • [13:35] Where to begin?
  • [17:18] How do you buy one?

PRACTICAL PLANNING SEGMENT

  • [19:51] How long has Scott been RVing?
  • [26:21] What kind of gear does he have?
  • [31:58] How did he plan it out?
  • [34:44] What has brought the most joy?
  • [38:04] When do they think they will settle down?
  • [39:07] How do they stay connected with friends?
  • [41:38] How did he start researching?

THE HAPPY LAB SEGMENT

  • [44:18] Do something silly

TODAY’S SMART SPRINT SEGMENT

  • [45:20] Be a bit more intentional about counting the costs

Resources Mentioned In This Episode

BOOK - Spark Joy by Marie Kondo

BOOK - The Life-Changing Magic of Tidying Up by Marie Kondo

Campendium.com

FreeCampsites.net (to learn about boondocking)

RV-Dreams.com

CamperReport.com

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center


The Retirement Answer Man Facebook Page

Direct download: RAM264.mp3
Category:general -- posted at: 6:00am CDT

Direct download: RAM_Bonus_3-8-19.mp3
Category:general -- posted at: 6:00am CDT

Has the retirement RV virus infected you? This virus is very dangerous; it could cost you tens of thousands of dollars, but it could be a lot of fun too. Are you a baby boomer contemplating retirement? Are you excited by the thought of freedom and travel? If so, then this series is important for you. Over the next 4 weeks, we will cover how to diagnose the virus, what to do if you succumb to the virus, and what are some alternative treatments other than buying an RV. You’ll also learn from the experience of others living with this virus. Are you ready to learn more about this potentially fun and exciting virus? Then listen now to this episode of Retirement Answer Man.

Why do so many baby boomers have the retirement RV virus?

The retirement RV virus is spreading like wildfire among baby boomers. 75 million households across the country are active campers. And the fastest growing group of RV owners are baby boomers. If you read any article on retirement, you’ll discover that freedom and travel are the top priorities among new retirees. This is what makes the retirement RV virus so contagious. Do you have the itch to set out on the open road? Find out all that you can about the RV life before jumping in with both feet by listening to the retirement RV series here on Retirement Answer Man.

How do you diagnose yourself with the retirement RV virus?

So how do you diagnose yourself with this potentially expensive virus? First, you need to understand what is driving you. Is it the lifestyle that you are looking for, or do you just want to travel more? It is easy to romanticize the RV lifestyle. If you go to any RV show you can start dreaming big. Next, you need to understand that there are different strains to this RV virus. People have different ideas when they think of RV life.

  • There are the weekend warriors, those looking for short weekend getaways
  • Others would like to travel a week or so a few times a year
  • There are the long-term travelers that would like to travel for an extended period, perhaps a few months at a time.
  • Then there are the full-timers. These are the ones that give up their home and hit the road permanently.

So which prognosis best describes you? Learn how you can live with this virus especially if you have the right treatment plan in place, by listening to this episode of Retirement Answer Man.

Michael and Mona explain firsthand what RV life is all about

Michael and Mona have always been the outdoorsy type, they even camped on their honeymoon. They loved taking their grandkids for weeklong trips in their pop-up trailer, but they soon discovered that 2 weeks a year wasn’t enough for them. They recently set out on a long-term trip to test the waters to see if the full-time life might be in store for them. He loves the idea of full-time living, but she prefers having a home base. Learn what Michael and Mona wish they had known before they bought their RV as well as what they love about the RV life on this episode of Retirement Answer Man.

What is the true cost of RV living?

Costs between RV’s vary greatly. You can jump into a new RV for as little as $60,000 or you can go all out and spend upwards of $200k. Campground costs are another factor that can quickly add up. Some can cost $30-40 a night or more, but there are less expensive options if you stay in a place long-term or become a part of a membership program. Even with today’s low gas prices, at 6-8 MPG fuel costs can quickly add up. Other costs to consider are maintenance issues, they tend to pop up when you least expect them and they can be expensive.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:19] The RV virus is particularly acute among baby boomers
  • [6:03] There are different kinds of RVers
  • [7:05] How do you diagnose yourself with the RV virus?

PRACTICAL PLANNING SEGMENT

  • [10:24] Learn from Michael and Mona firsthand what the RV life is all about
  • [18:39] What is the true cost of their RV?
  • [23:25] What have they enjoyed the most so far?
  • [28:00] What would they have done differently if they had known more?

THE HAPPY LAB SEGMENT

  • [31:02] The RV virus is a vehicle for you to create happiness

TODAY’S SMART SPRINT SEGMENT

  • [31:54] Take a self-exam. Do you have a bit of the RV virus?

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

The Retirement Answer Man Facebook Page

 

Direct download: RAM263.mp3
Category:general -- posted at: 6:00am CDT

How can building an income floor ease your worries about life without a paycheck? If you are worried that having a 2-year cash reserve won’t give you enough security then you may want to build an income floor to help ease your concern. Over the past few episodes, we have been discussing how to live life without a paycheck and you have learned how to build a bucket system. But some of you may feel that this isn’t quite enough to help you weather the times of market uncertainty. Listen to this episode to hear how building an income floor can give you more peace of mind.

8 ways to make retirement too complicated

Do you like to make easy things difficult? We often make retirement more difficult than it needs to be. Here are 8 ways people often complicate retirement.

  1. We make decisions in isolation. We don’t think of the broader perspective of our financial lives when making a financial decision. We focus on tactics rather than the big picture. It’s important to have a process that follows a system that creates a strategy that leads to tactics rather than the other way around.
  2. You have too many accounts. People collect things over time and that includes 401K’s, and IRA’s and various other retirement accounts. Make life easier by consolidating your accounts.
  3. You may have too many investments even in one account. Having too many investments makes managing the risk/return allocation too difficult. Think, does this extra investment add value? Does it serve a purpose in the overall scheme of things?
  4. You may have too many advisors.
  5. You chase the markets. Are you chasing investments as the market fluctuates? It creates a lot of unnecessary activity. It may feel like you are more in control, but it actually makes things more complicated.
  6. You change your process too much. The key to having a solid process is to only have one. You can’t hop around. Stick with one process. It can evolve but don’t change gears completely.
  7. You think more information will give you more clarity. But more information can actually be very distracting.
  8. Overplanning and analyzing are not giving you more clarity.

How do you refill your bucket in bad years?

After listening to this month-long series on how to live life without a paycheck you know how to fill your bucket with 2 years of cash reserves. But is 2 years really enough? What do you do in the bad years? What happens if the markets take a turn for the worse? Here are 3 ways that you can adjust your approach.

  1. You could batten down the hatches. Slow down in your wants and wishes categories to reduce discretionary spending. Fund your base lifestyle only.
  2. Ramp up pretirement. Focus on your human capital until the markets bounce back.
  3. Readjust your long term goals. Agile retirement planning is all about making adjustments along the way.

What is an income floor?

What if you want more clarity? If you still feel that 2 years of cash reserves won’t be enough to give you the peace of mind you need then you can create an income floor for the following 3 years. An income floor overlays on top of your cash reserves. The income floor is built by bonds that mature like a ladder or it can be created by ETF’s or other funds. An income floor can give you more room for success by reducing your risk of overspending and reducing your behavioral risk.

How do you determine whether you should add this income floor on top of regular cash reserves?

Do you feel like you need an income floor? You can think about the level of your base needs that are funded by social capital. Social capital is guaranteed income sources like social security and pensions, income sources that don’t depend on the markets. The higher amount you have here the more confident you may be with only 2 years of cash reserves. You can also consider what level of human capital do you have like income from consulting or royalties. It is also important to consider how well funded you are. If you are underfunded then you will definitely need human capital. Learn how to create your system and keep your rhythm on this episode of Retirement Answer Man.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:55] Do you like to make easy things difficult?

PRACTICAL PLANNING SEGMENT

  • [14:52] Is 2 years enough cash?
  • [19:10] How do you refill your bucket in bad years?
  • [20:44] What is an income floor?
  • [23:24] How do you determine whether you should add this income floor on top of regular cash reserves?

THE HAPPY LAB SEGMENT

  • [28:01] How do you maintain sanity in the chaos?

TODAY’S SMART SPRINT SEGMENT

  • [29:15] Identify 1 thing that you are overcomplicating

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

 

Direct download: RAM262.mp3
Category:general -- posted at: 6:00am CDT

You may have heard me talk about the bucket system on previous episodes. People often wonder how they will tap into their funds when they retire. They wonder if they should just sell assets when they need some money. Well today, I teach you how to live life after your paychecks stop coming. You’ll learn the process on how you create your own bucket system so that you can create your own steady paycheck. Are you ready to learn how to set up your retirement paycheck so that you can be intentional about creating a great life? Listen to this episode to learn how to build your own bucket system so you can rock retirement.

5 retirement tidbits that I have picked up along the way

Working with retirees causes me to do a lot of research about retirement. Here are 5 tidbits I have learned over time.

  1. Our perception does not always line up with reality.
  2. Loneliness will shorten your life as much as smoking and drinking. Loneliness is scary because it creeps up on you. It is so important to continue to generate new friendships and connections. Friendships increase the quality of your life.
  3. Transitioning from the accumulation phase of life to the decumulation phase can be a challenge. You can look at the decumulation period like a vegetable garden. You have watered your garden over the years and now it is time to harvest.
  4. Spreadsheets can’t give you the whole picture. Many of you are orderly people that like to research and plan. Just remember that the art of all of this planning gets lost in spreadsheets. Retirement is so much more than just numbers on a page.
  5. Extensive social media use can lead to depression. Remember that what people post on social media is a fictionalized version of their life. Its like looking at the cover of a fashion magazine, all glossy and perfect. This is not the reality of people’s lives.

What is a bucket system?

In the past people just sold assets as they needed when they retired. But there is a better way to organize your finances. A bucket system creates cash reserves to fund consumption over and above what you keep in your normal emergency fund. It is the process by which you create your own paycheck in retirement. You create a payroll ‘bucket’ funded with 2 years of spending needs. You set up a way to pay yourself on a regular basis into your checking account. Creating a bucket system gives you clarity when you wonder where the money will come from in retirement. It can help you navigate this major change in your life. Listen to this episode of Retirement Answer Man to learn more about creating a bucket system to fund your retirement.

What are the advantages and disadvantages of the bucket system?

The bucket system has both advantages and disadvantages. Having this system in place can help you control your spending. Oftentimes when people retire they have a lot of liquid assets on hand, maybe even more money than they have ever had access to. Couple that with newly acquired free time and you could run into a big problem. The bucket system helps control a natural flow of money into your checking acount. It helps you work in an automatic fashion. The bucket system also provides visibility in a volatile world. It can give you some leeway to make adjustments as you need them.

If you have a growth mentality the bucket system may seem inefficient. When the markets are hot you can feel like you are missing out. This cash flow system can force you to be more conservative that you may want to be. On the other hand, 2 years of cash reserves can feel a bit tight in a major financial crisis like that of 2008.

How do you set up a bucket system?

How do you put this bucket system together? First of all, you need 2 years of your base needs that you have already counted the cost for. You also need 1-2 years of your wants and wishes. When setting up your bucket, remember your social payment and your income from other sources. You can subtract these from how much you need in your account.

Step 1 - to identify the deficit after adding up your various income.

Step 2 - fund your cash reserves by creating a payroll account. Pro tip- don’t have it in the same place as your checking account.

Step 3 - set up a payment system from your cash reserve payroll account to your checking account.

By creating a bucket system you recreate that rhythm you get from having a paycheck. You want to have that rhythm in place so that you don’t have any missteps.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:02] 5 Retirement tidbits that I have picked up

PRACTICAL PLANNING SEGMENT

  • [14:37] What is the bucket system?
  • [16:55] How does a bucket system help you control spending?
  • [18:34] What are the disadvantages to the bucket system?
  • [20:44] How do you set up a bucket system?

THE HAPPY LAB SEGMENT

  • [25:43] Understand how to communicate with those you love

TODAY’S SMART SPRINT SEGMENT

  • [28:02] Go tell your loved ones that you love and appreciate them
  • [28:41] Fund your emergency fund

Resources Mentioned In This Episode

BOOK - The Noticer by Andy Andrews

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

Direct download: RAM260.mp3
Category:general -- posted at: 3:00am CDT

Now that you have your buckets full do you think the retirement planning is over? Sorry, but no, it’s not. 6 months later you have to do it all over again. The problem is life keeps changing. Expenses keep changing. So how do you overcome this? How do you constantly adjust? Constantly adjusting to new conditions is what retirement is. Agile retirement management means you can’t put financial management on autopilot. Learn how to set yourself up for success so that you can make the best of the only life you have on this episode of Retirement Answer Man.

How to set yourself up for success in managing change

Working with an advisor is like working with a doctor who is trying to diagnose an ailment. The doctor is really smart and well trained to try and figure out what is wrong and what the best course of action may be. But only you know your body. The same is true with your finances. A financial advisor is very well trained and can help you plan your future, but only you know what is truly right for you. When you abdicate everything to an advisor it can lead to poor solutions that aren’t in your best interests. Financial advisors have never dealt with the baby boomer generation before, so they are working with a blank slate.

Delegation vs. collaboration

One way to take more control of your finances is to collaborate with a financial advisor rather than delegate all the financial decisions. Collaboration means that you aren’t handing over all the control. It means that your retirement planning is an ongoing project. The client works alongside the advisor in a collaborative role. You are the expert in you. You know what your needs, wants, and fears are. And only you understand your changing priorities. An advisor has gained wisdom over time. They are the expert in the journey, you are the expert in you. Don’t delegate your retirement planning, collaborate.

What happens once you begin to drain the cash reserves that you have set up?

It is important to make sure the wind is at your back. Your cash reserves don’t have to be just sitting there doing nothing. They could be in a high-yield money market account, CDs or high-quality short-term bonds. You should also think about the different tax types of accounts from which you will fill your bucket. You have much more control now over which tax bracket you will be in. Filling your buckets from the right sources is important in controlling how much you will pay in taxes, not just now, but in the years to come as well.

How do you refill your buckets?

It is important to refill your buckets twice a year. Its good to revisit your finances in retirement every 6 months since this is all new to you. After a while, you might find your sea legs and fine tune your spending. But life has a way of throwing us curve balls just when we think we have things all figured out.

How do you refill your buckets if the markets are performing poorly? If the markets take a nosedive it is important to mitigate the damage. There is a reason that you count the costs as needs, wants, and wishes. If the markets aren’t doing so hot you can slow down your discretionary spending. You can also decrease how often you refill the buckets in order to let the markets bounce back. Learn how to manage your money in retirement so that you don’t just survive retirement, but rock retirement on this episode of Retirement Answer Man.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [5:23] How to set yourself up for success in managing change with an advisor
  • [9:50] Delegation vs. collaboration

PRACTICAL PLANNING SEGMENT

  • [12:40] What happens once you begin to drain the cash reserves that you have set up?
  • [17:32] You have much more control now over which tax bracket you will be in
  • [21:14] When should you refill your buckets?
  • [23:00] How do you refill your buckets if the markets are performing poorly?

THE HAPPY LAB SEGMENT

  • [25:56] Add some time in your calendar

TODAY’S SMART SPRINT SEGMENT

  • [28:17] Schedule sometime next week to work on you

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

Direct download: RAM261.mp3
Category:general -- posted at: 6:00am CDT

Everyone’s biggest worry is if they will have enough money in retirement. Are you prepared to live life without a paycheck? Over the next month, we will explore how to get you ready to live your life without a paycheck. A paycheck can be like a security blanket and learning to live life without it can be scary. That’s why it’s important to prepare for life without a paycheck now. Learn how to make sure you have enough money in retirement by listening to this episode of Retirement Answer Man.

Is your paycheck your superpower?

Do you remember your first paycheck? Do you remember the power you felt when you had that money in your hands? Your paycheck equals power, so what happens when it disappears? With a paycheck you earn money, you can save money, and watch your wealth grow. Once your paycheck disappears it can be like stripping away a superpower. Your wealth begins to dissipate as you withdraw from your savings each month. This can scare anyone. Learn how to gain your powers back by planning for life without a paycheck.

Don’t fall for the scarcity mindset

Many people enter a mindset of scarcity even if they have plenty of money tucked away for retirement. A scarcity mindset can zap away all your fun retirement plans. There is a tipping point at which you realize that you won’t run out of money. Unfortunately, by the time this usually happens, most are too old to really enjoy their money. Learn how to manage your money in retirement so that you can partake in all the retirement fun on this episode of Retirement Answer Man.

Is your systematic withdrawal strategy your behind the times?

The first step in learning how to live without a paycheck is to plan how you will pay for your lifestyle. In the past calculating your retirement was a simple math equation. Figure out how much you have and divide equally to plan your yearly withdrawal amount. This system of retirement planning is one-dimensional and antiquated. It may not serve your ideal retirement lifestyle very well. A one-dimensional withdrawal strategy could lead to underspending in the go-go years. Is your withdrawal strategy set up to ensure that you can make the most of your retirement?

Why you need an agile retirement plan to manage money in retirement

With an agile retirement plan, you don’t have a set withdrawal ratio each year. Some years you may have a 10% withdrawal ratio and then there will be others in which you have a 2% withdrawal ratio. Gone are the days when you simply sell stocks when you need the money. You can now create clarity on how you will pay for your retirement lifestyle. With an agile retirement plan, you can plan each year differently. Do you want to take all the grandkids to Disney World, or plan an epic trip around the country? Will you have a low key year after a year of spending big? With an agile retirement plan, you can take advantage of the go-go years to spend big when you have the opportunity.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:02] Your paycheck equals power

PRACTICAL PLANNING SEGMENT

  • [10:05] A systematic withdrawal strategy can be dangerous
  • [15:19] We need a withdrawal system that gives us more clarity
  • [20:13] Over the next few episodes we’ll be talking about creating these systems

THE HAPPY LAB SEGMENT

  • [21:28] Find people that you resonate with

TODAY’S SMART SPRINT SEGMENT

  • [22:25] How will you pay for retirement?

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

Direct download: RAM259_1.mp3
Category:general -- posted at: 6:00am CDT

On this last episode in the counting the costs series of the Retirement Answer Man Show, the Rock Retirement Club steps in to provide some tips on how to make the best of all this work. Counting the costs of retirement can be intimidating. It can cause stress and worry. In this episode, those that have counted the costs of retirement and thrived step up to provide tips on how to handle this stressful part of retirement planning. Listening to the experience of others who have not only walked the walk but done so successfully can ease some of the worries that come with crunching the numbers while planning for retirement. Listen to this episode to hear tips from members of the Rock Retirement Club.

Don’t let the stress of retirement planning overwhelm you

There are so many unknowns to retirement, it is easy to become overwhelmed by the enormity of it all. But worry, stress, and fear can become debilitating. Allowing yourself to become overwhelmed by the enormity of the financial side of retirement planning can lead to poor decision-making. Stress can further impact your financial planning by influencing how you make decisions. You may think that it is easier to stick your head in a hole and ignore the counting the costs step. Or you may try and patch together an easy financial solution together rather than implement a well-thought-out retirement plan. Don’t let worry overwhelm you. Planning your retirement costs will pay off in the end.

What can you do to combat the stress of retirement planning?

  1. Regain perspective - Change the conversation in your head. It’s easy to dwell on the enormity of planning for retirement. It’s easy to lose your mental game. Coach yourself to make it to the next step rather than concentrate on the big picture. This helps you feel as though you have made progress.
  2. Realize there are many adjustments to make in retirement, but you don’t have to make them all today.
  3. Everything you worry about you create yourself. Your big worry might not be a big deal if you are intentional.
  4. Surround yourself with the right people. Having a supportive crowd surrounding you can help you celebrate the small wins along the way. It helps to talk with people that are on the retirement journey. There is something to learn from those ahead of you in the process as well as those that are behind you.

Some tips from the Rock Retirement Club

Rock Retirement Club members have an Intentional spirit and are community-oriented. The club motto is “Walk with the wise and become wise.” We have had many productive and active conversations. Here are some tips from others that are on the same journey as you:

  • Estimate your expenses in Excel. Look for variances year to year.
  • One RRC member helps the elderly plan their budgets. This volunteer has created a win-win situation. Budgeting with the elderly helps her learn from others while teaching them. Not only does it help her get a handle on her own financial situation. She can also learn what the costs are from others that are further down the road.
  • One member has realized that spending can increase from before retirement. More free time equals more opportunities to spend on entertainment, shopping, gas, and eating out. How will you spend your time once you retire?
  • Another member is trying to live on his proposed retirement budget before he retires to get a feel for what that would be like.
  • Jon created multiple spending scenarios through a flexible retirement planner

Listen to this episode to hear all the tips from our Rock Retirement Club members and discover which ones can help you on your own journey in counting the costs of retirement.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:53] Don’t let the stress of retirement planning overwhelm you
  • [8:35] What can you do to combat the stress of retirement planning?

PRACTICAL PLANNING SEGMENT

  • [16:20] Advice from Rock Retirement club members

THE HAPPY LAB SEGMENT

  • [27:15] Thanks to Nichole

TODAY’S SMART SPRINT SEGMENT

  • [28:30] Listen to the tips and figure out which one fits your life

Resources Mentioned In This Episode

Flexible Retirement Planner

Good Budget App

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Ask Roger a question

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

Direct download: RAM258.mp3
Category:general -- posted at: 6:00am CDT

Over the past few episodes we have been counting the costs of your wants and wishes in retirement and on this episode, we get down to basics. What are your needs? You may think that defining your needs is the easy part: food, water, shelter, clothing, and healthcare, right? Well, it’s actually a bit more complicated than that. As a matter of fact, defining your needs can be much more complicated than coming up with your wants and wishes. Everyone has different needs in their life. What one may consider a need, someone else may scoff at. Listen to this episode of Retirement Answer Man to help you count the costs of your true needs in retirement.

How do you decide what your needs are?

Defining your needs is not as easy as it seems. To define your needs you have to consider what the deal breakers are. What can you really not live without? Everyone has different needs. For example, consider a golf club. Many would consider a golf club membership a want or wish, but for others, this is their primary social outlet. For these people, a golf club membership is a need. On one hand you need to be practical and consider what you truly need, but on the other hand, you don’t want to build a cage around yourself. Complicating your needs can actually lead to a very sad life so think carefully about what is important for you to live a happy life.

Why do we break things down this way?

You may be thinking, why do I need to define my needs, wants, and wishes? You may think that moving through these exercises is a waste of time. But defining these categories is a way to help when you come to a crossroads. When it is time to dial things down as you take away income sources, or maybe when the markets are performing well and you have a bit extra you can examine these categories and decide how to negotiate with yourself. Having everything broken down into categories allows you to consider more choices. Defining your needs, wants, and wishes is an important first step to rock retirement.

What is your baseline?

To consider what your needs are you have to think about your baseline. There are 2 ways to determine your baseline. You can look at it from a top-down perspective. To do this, take your income and subtract your savings. This equals your consumption. You can also come at it from a bottom-up point of view. With the bottom-up way determine what your costs will be for healthcare, housing, taxes, utilities, food, transportation, and basic fun. You can either jot these costs down on paper or make a spreadsheet. Having an idea of what your baseline costs will be can really help you gain perspective on how you will rock retirement.

What are the average costs of basic needs in retirement?

The costs of basic needs change quite a bit from state to state and from lifestyle to lifestyle. The costs of taxes also vary greatly between the states. Some states are trying to become more baby-boomer friendly to attract retirees. These states have low taxes on things like pensions and property. Here’s the breakdown of average costs in other categories:

Housing: $1322/month

Transportation: $550/month

Healthcare: $500/month

Food: $500/month

Entertainment $200/month

Whether you use a top-down approach or a bottom-up method, begin to calculate the costs of what your basic needs will be in retirement. Don’t worry about getting it perfect, costs will change over time. Counting the costs is an important step in learning how to rock retirement.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [4:28] How do you decide what your needs are?

PRACTICAL PLANNING SEGMENT

  • [12:25] Never take a risk that will jeopardize your baseline
  • [14:24] What are the basic needs?
  • [22:34] What are the average costs of needs in retirement?

THE HAPPY LAB SEGMENT

  • [25:20] Get your body moving to make you happy

TODAY’S SMART SPRINT SEGMENT

  • [27:09] Go dance!

Resources Mentioned In This Episode

Healthcare Before Medicare Series: Episode 211, Episode 212, Episode 213, Episode 214

BOOK - Good to Great by Jim Collins

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Ask Roger a question

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

Direct download: RAM257.mp3
Category:general -- posted at: 2:31pm CDT

How are we supposed to dream big when we are so unsure of how to provide for ourselves in the future? The future seems so unsure after the terrible month of December. Some may be tempted to give up and just put all their money into a safe money market account or cd. You know for certain that you will get 2.5%-4% returns and life wouldn’t seem so scary. On today’s episode, you’ll learn why you want to have an agile retirement plan in place to help you through the rough patches so that you can rock retirement and get back to dreaming of those retirement wants and wishes.

Finally, we get to the wishes

On the previous episodes this month we discussed how to budget for your needs and wants in retirement and on this episode we finally tackle the wishes. Wishes can seem extravagant whether you are overfunded or underfunded in your retirement. Those that are overfunded may find it hard to dream big after years of being good stewards of their money. Those that are underfunded may balk at the idea of having so much leftover that they should shoot for the stars. Whichever category you fall into you should still go through this exercise as an expression of your values and to really shoot for the stars. Whether it's leaving an inheritance, gifting your grandkids with a college education, planning an epic trip, buying a home for your whole family to enjoy, or setting up a charitable foundation, dreaming big can be a wonderful way to start rocking your retirement.

Inheritance planning

There are many ways that you can leave money at the end for family members that you care about. A trust can be formed that will help protect the money after you pass. For instance, if you leave someone $500,000 it could be misspent, lost in a divorce, or lost by a spouse that overspends. By setting up a trust the money is protected in these cases. Another way to leave a legacy to those you love is by gifting it now. You can gift $15,000 each year without any tax consequences and your spouse can gift the same amount. You can even gift your child’s spouse an additional $15,000 without tax consequences as well which brings the total to $60,000 per year of tax-free gifting. Another way to give to those you love is by setting up a 529 savings plan for your grandchildren. These plans are highly flexible and you can even switch the beneficiaries or split it between multiple grandchildren. Have you thought of the legacy that you want to leave your loved ones?

3 Protips on dreaming big

  1. There is a fine line between helping someone that is doing well continue on their path and enabling someone that is not heading in the right direction. They need to learn to own their own problems. Think about whether you are supporting or enabling before you give. Make sure you are giving your loved one fuel to go the right direction.
  2. It doesn’t have to be fair. You don’t have to be consistent with your giving. One child may be heading in the right direction and the other one may be making poor choices. Trust planning could help make your giving more equitable or it can be a smart choice to have an intermediary. You don’t have to give 15 k a year. Don’t lead them to expect. These things could gain momentum as you age.
  3. Giving unexpected gifts can be fun. Don’t lead your heirs to believe they will be getting yearly gifts if that is something that you can’t provide.

Gifting to charity

Just like there are many ways to give to your heirs, there are several ways that you can give to charity. One way is to create a donor-advised fund. This is a fund that you can create where you can help manage the investments and annually you can decide what you want to give and to which organizations. You can even use it as a foundation and plan the distributions as a family. With the new tax rules consider lumping your gifts into specific years to get the maximum tax write-offs. There are so many ways that you can leave a legacy behind. It all depends on your values and the kind of legacy you want to leave. So how will you dream big?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:23] How can we dream big when we are so unsure of how to provide for ourselves in the future?
  • [9:52] How do you count the costs of the things you want and need?
  • [11:19] Evaluating performance can be tricky if you don’t have the right perspective

PRACTICAL PLANNING SEGMENT

  • [20:56] Finally we get to dream big and focus on wishes
  • [22:34] Inheritance planning
  • [28:55] How can you help grandkids plan their college education?
  • [31:23] How can you create experiences with those you love?
  • [33:05] 3 Pro tips
  • [37:02] Gifting to charity
  • [39:42] Other considerations

THE HAPPY LAB SEGMENT

  • [42:25] What are some things that can make you happy that don’t cost any money?

TODAY’S SMART SPRINT SEGMENT

  • [45:15] Start to brainstorm what the spice of your life would be

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Ask Roger a question

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

 

Direct download: RAM256.mp3
Category:general -- posted at: 6:00am CDT

What are your wants and wishes in retirement? This generation is redefining retirement. In the past retirement meant sitting on the park bench of life and taking it easy in the golden years. Today’s retirees are active and involved. They are living longer than ever and usually doing so without the safety net of the pension plans that were common in past generations. Since today’s retirees enjoy a longer period of health, retirement is an excellent time to live it up. How will you rock retirement? Discover ideas on how to pursue and fund your retirement dreams on this episode of Retirement Answer Man.

Think big when planning your wants and wishes

Whether your retirement fund is tight or grandiose, don’t be afraid to dream big. Living big shouldn’t be confused with spending big. Think about what you do for enjoyment now. How would you like to spend your time when you have more of it? Do you want to travel, learn to play an instrument, take cooking classes, or go back to school? The options are limitless and they don’t have to be costly, there are usually many different price points to having fun with your hobbies. How will you dream big to rock retirement?

You don’t have to be trapped in your current life

Our lives are arranged a certain way due to the limiting factors of our lives. But now those limitations may no longer be there. Upon retirement, you can rearrange your life the way you want. Think about what you want to be doing on a daily basis in retirement. Who will you be spending time with? Perhaps you want to be near grandkids, family, or maybe you want to move to a place with a certain type of people. What is your ideal climate? What is the size of your ideal town? Is it rural, urban, or suburban? You don’t have to be trapped by what is. Do you dream of a change of scenery with your retirement?

How do you define what is important to you?

You have been toiling in the fields of the workplace during your entire life, but retirement is your harvesting time. This is your time to define what is really important to you. To really rock retirement you need to give some thought on how to make the most of it. Travel is a goal for many retirees, but travel itself is too broad. You need to define it further, how exactly will you travel? Internationally, throughout the U.S., or locally? Once you start narrowing down what is really important to you-you can plan to rock retirement. So what do you envision for yourself in your retirement?

4 pro-tips on planning your wants and wishes

  1. Figure out how to make your hobbies more social. You can increase your social activities and make friends of all ages with similar interests. Think about joining a cycling club, a knitting group, or a book club.
  2. Plan for the seasons of retirement. Many of the activities you may have in mind are best-suited for the go-go years while you are still healthy and active. When financially planning your retirement think about how long you will want to be involved in your hobbies. How long can you realistically travel internationally? Will you need a country club membership for your entire life?
  3. Be creative in how you want to go about attaining your wants and wishes. Instead of buying a second home think about renting for a season instead. If you are considering RV travel rent one for a month and see if you still have the itch afterward. There are many creative ways that you can fulfill your dreams without breaking the bank.
  4. Think about how you can set yourself up to enjoy your wants and wishes before you retire. If you do buy a second home, a motorcycle, RV, or boat do so while you still have the income from your job.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:35] This generation is redefining retirement
  • [4:25] When planning your wants and wishes think big

PRACTICAL PLANNING SEGMENT

  • [10:30] Retirement is your harvesting time
  • [15:34] How to define what is important to you
  • [20:00] Pro tips on planning your wants and wishes

THE HAPPY LAB SEGMENT

  • [24:24] Retirement planning can be scary, take a cue from Nichole and laugh more!

TODAY’S SMART SPRINT SEGMENT

  • [26:23] Start to define your costs for retirement

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Ask Roger a question

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

Direct download: RAM255_1.mp3
Category:general -- posted at: 6:00am CDT

As the markets worsen and the talk of recession begins are you wondering if you will have enough money in retirement? Are you wondering what you should start doing now to ensure that you can live the life you want? On this episode of Retirement Answer Man, I encourage you to take intentional action so that you can rock retirement. Today you will learn to count the costs so that you can know how much it will cost to live the life you want after you leave full-time work. Listen to this episode to hear how you can start planning now to rock your retirement.

Are you experiencing the not-so thrifty 50’s?

I read a study recently where a group of people in their 80’s and 90’s were surveyed. The age most said they would like to return to is their 50’s. Your 50s can be a time of great abundance. Many of us are earning the highest income we’ve ever had. In addition to that many in their 50’s are left with empty nests as our children transition into adulthood. Is all this extra money going to fuel your retirement fund or are you buying all the toys of adulthood? Have you stopped budgeting now that you know that you’ll have enough money to cover it all? Be wary of creating a financial cage for yourself.

What can you do now to ensure you have enough money in retirement?

I have a few tips for you to act on now to ensure that you’ll have enough money to rock your retirement.

  1. If you’re married make sure both voices are heard. Usually, one spouse takes over the financial management of the household and this is the spouse that leads the retirement planning as well. Oftentimes we think we know what our spouse wants, but what they really want is much different. Ensure that both of you get some of what you want by having open discussions. Give each other space to express yourselves.
  2. Don’t confuse wants with needs
  3. Budget. Many of us have fallen out of the habit of budgeting. It’s time to flex your budgeting muscle.
  4. Look backward first, then forward. Look back at your last 3 months of spending and analyze it. Now you can look forward. After analyzing your prior 3 months of spending make a budget for the year. Understand which payments are fixed, which are, variable, and which are discretionary. Label these accordingly.
  5. Map out your spending with spreadsheets until age 92. Having a guide to help you will ensure that you are more focused and in control of your spending.

Act now!

If you are ready to rock your retirement then now is the time to start. Start out by analyzing your spending so that you can create your budget. Count your costs now and identify your wants and needs. This way you can know how much it will cost to rock your retirement. Your most valuable asset, human capital, is starting to diminish. So it is important to know exactly how much you need to live the life you want. One more thing you can do to help you on your retirement journey is to join the Rock Retirement Club. Enrollment is open until January 3, 2019, so make sure you get in before it closes!

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:08] Are you experiencing the not-so thrifty 50s?

PRACTICAL PLANNING SEGMENT

  • [11:35] Make both of your voices heard
  • [14:40] Flex your budgeting muscle
  • [15:35] Map out your spending
  • [18:54] What will we be talking about over the next few episodes?

THE HAPPY LAB SEGMENT

  • [20:23] Join the Rock Retirement Club!

TODAY’S SMART SPRINT SEGMENT

  • [22:30] Do a 3-month study on your spending

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Ask Roger a question

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

Direct download: RAM254.mp3
Category:general -- posted at: 6:00am CDT

What age are you using to plan retirement? When we think of age we usually think of the number of years that we have lived and not the physical state of our bodies. But maybe we should rethink the way we use age to plan retirement. I recently attended a fascinating seminar about the science of aging that has me rethinking age and retirement. During the Practical Planning segment, I discuss the merits of telomere testing while in the Hot Topic segment we talk about the Baader-Meinhof phenomenon. Listen to this episode to discover whether you are using the right age to plan retirement.

Is your glass half full or half empty?

The Baader Meinhof phenomenon is what we call our tendency to see things with uncommon frequency after we start thinking about something. Internet advertising has begun to take advantage of this and now repeatedly shows us all the things we have been thinking of buying. I liken this to our tendency to see the glass half full or half empty. You will find what you look for. People that are always looking for negative things to happen end up finding negativity. How are you viewing your retirement plans? Are you hoping to just scrape by and survive retirement or are you preparing to rock retirement?

Are you ready to rock retirement?

What are you doing to prepare yourself for retirement? Are you setting yourself up to simply survive retirement or are you ready to rock retirement? The Rock Retirement Club is now open for enrollment for a short time only. Head over to the website to take a peek. We have events and tours of the clubhouse that you can take before the enrollment period ends on January 3. The 60 founding members are all ready to welcome you and spread their knowledge. Joining the Rock Retirement Club is a fantastic way to gain insight and really connect with others on the same journey. Check out the Rock Retirement Club now before the enrollment period ends.

What is biological age?

The entire system of retirement is based on thinking about chronological age. We use chronological age to tell us when to take social security and our chronological age decides when we can withdraw from our Roth IRA without penalties. But what if you are physically much younger than the years that you have lived? Would that affect your decision on when to collect social security? If you knew that your body was that of a 55-year-old when you are 65 would you delay in taking social security? Your biological age may be different than your chronological age. Listen to this episode to hear more about the difference between the two.

How can knowing your biological age help you plan retirement?

There may be a better way to measure age. Scientists have developed a new test that measures the length of your telomeres which can help determine the biological age of your body. This could be very useful in your retirement planning. Living a long life would be a blessing, but it is one that you need to be prepared for. The older you become the more money you will need. If there is a probability of living a long life then you may want to use your human capital for a longer period than you thought. Are you curious about your biological age? Do you think knowing your biological age would change your views on pretirement?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:58] What is the Baader-Meinhof phenomenon?
  • [5:53] Are you preparing to survive retirement or rock retirement?

PRACTICAL PLANNING SEGMENT

  • [10:15] What is biological age?
  • [11:45] Is chronological age the best way to make retirement decisions?
  • [13:22] A better way to test longevity
  • [17:54] How long should you use your human capital for?

THE HAPPY LAB SEGMENT

  • [20:25] Finding out my biological age will make me happy

TODAY’S SMART SPRINT SEGMENT

  • [21:28] Find the word that will be the guiding light for you for the next year

Resources Mentioned In This Episode

Teloyears.com

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Ask Roger a question

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

Direct download: RAM253.mp3
Category:general -- posted at: 6:00am CDT

Each year I choose one word to be my guiding light throughout the year. On this episode of Retirement Answer Man, I will help you understand why choosing one word can help you rock your retirement plan in the upcoming year. Many people choose the New Year as a time to make resolutions for the year ahead. But narrowing your resolution to concentrate on one word can help you improve your focus so that you can stay on track to reach your goals. Listen to this episode of Retirement Answer Man to hear how choosing one word can help you narrow your focus and achieve your retirement goals. So what’s your word going to be?


Why choose one word?


Many people make resolutions at the start of each year. I have found that the problem with New Year's resolutions is that no one seems to keep them. We often set the bar so high or focus on goals that are too far ahead that the resolutions become impossible to keep. They seem to always result in failure. Instead of making a resolution this year try shifting your focus to choosing one word to serve as your guide over the next year. This word can really help better yourself or help you plan to rock your retirement. What’s your word for the new year?


How do I choose my word for the year?


I say I choose a word each year, but really it chooses me. A few years ago I quit the practice of making a New Year’s resolution each year. My whole life was really changing. I wanted to become more intentional and focus my skills in a new way. I began to focus on agile retirement management and I started this podcast. I realized that God was never going to come down and hold my hand through my life changes. I knew that I had to simply trust that I was doing the right thing. That is how trust became the word of the year that first year. Are you shifting your focus toward retirement? How will you choose your word? How will it impact your retirement plans?


What’s your word?


Think about your own life. Has your focus begun to shift? What do you want to work on over the next year? If you think about these things your word will naturally find you. Use your word as your guiding light throughout the year. I try to ensure that it naturally comes into my consciousness each day. One year I had my word stitched into my sports coats. Another year I used it in the signature line of my emails. Think about what your word will be and how you will remind yourself of your focus. Let your word become a filter for all the opportunities and situations that come up throughout the year.


What’s my word for the upcoming year?


Last year, Nichole’s word was simplify. She wanted to simplify her life a bit more and not get bogged down with so many commitments. She didn’t feel that she did the best job with her word this year. Maybe next year she will do better, she chose flow as her focus for next year. Hopefully, she can learn how to go with the flow. This past year my word was celebrate. I often don’t pause to celebrate my accomplishments, especially when it comes to working. I am always driven to focus on the next thing. I did celebrate my life more by taking some big trips and doing more things with my wife. Listen to this episode to hear the word I chose for the upcoming year.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:11] The importance of one word to narrow your focus
  • [4:09] How I began my one-word focus
  • [9:37] Tips for keeping your word relevant in your life

PRACTICAL PLANNING SEGMENT

  • [11:50] How did I do this year with my word?
  • [14:15] How did Nichole do this year?
  • [18:06] What are their words for 2019?

THE HAPPY LAB SEGMENT

  • [21:32] Reflect on what made you happy in 2018

TODAY’S SMART SPRINT SEGMENT

  • [23:10] What will your word be in 2019?

Resources Mentioned In This Episode

Parenthood Movie

The Trashmen Surfin’ Bird

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Ask Roger a question

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

Direct download: RAM252.mp3
Category:general -- posted at: 6:00am CDT

Welcome to the Retirement Answer Man show. On episode 251 we discuss what you can do to battle Alzheimer’s in the Hot Topic segment and Dan Crosby joins me to discuss behavioral investing in the Practical Planning segment. This is the podcast dedicated to helping not just survive retirement, but rock retirement! One way to really rock retirement is to surround yourself with people that are in the same boat. If you are surrounded by people that are motivated and intentional and working toward the same goal then that is a great way to ensure that you will rock your retirement. Join the Rock Retirement Club waitlist to arm yourself with the best retirement resources and community.

What can you do to keep Alzheimer’s at bay?

Increasing longevity is a scientific marvel. While it is exciting that people are living longer and longer, longevity can be a source of worry as well. Alzheimer’s disease is now battling heart disease for the rank of the top killer of the elderly. One way that you can combat this scary disease is to keep learning. People that are continually learning are exercising their mental muscles. Work is another fantastic way to keep the mind active. Work actually creates a type of cross-training for your brain. Find out why work could be just what the doctor ordered to combat Alzheimer’s disease on the Hot Topic segment.

Why don’t we talk about the behavioral aspects of investing?

People are always discussing active vs. passive investment strategies, but no one ever brings up the behavioral side of investing. Making better financial decisions depends on much more than just whether one is passively or actively investing. Behavioral investing actually requires something more from people. You have to stop and consider how your behaviors really affect your choices. Debating passive vs. active is a much easier debate. Considering investor behavior requires sacrifice and introspection. Listen to Dan Crosby describe why it is not easy for us as humans to change our behaviors even when it’s for the best.

What are the 4 tendencies that impact investor behavior?

There are 4 tendencies that impact investor behavior. They are conservatism, attention, emotion bias, and ego. Conservatism is an overreliance on the status quo. We as humans love to stick with the way things already are. Attention means that we tend to confuse sensationalism and the lure of the improbable with the probable. Emotion bias means we think that things that we like must be safe. Ego means that we have a tendency to be overconfident. We think that we are smarter than we are, and we think that we are luckier than we are and we also think that we can be more precise than we actually can. Find out why intelligence is not a factor in good investing.

The decumulation phase of investing is the least understood

Pending retirement means you are going from the accumulation phase of investing into the decumulation phase. This can be a scary and disempowering feeling to go from saving to withdrawing assets. Not only that, but retirees entire life purposes are changing and they are no longer generating income. This shift in mindset can cause people to feel out of control. Dan feels that you have to be just as diligent as putting your psychological realities in order as your finances. Discover how the PERMA model for happiness can help you prepare for the psychological realities of retiring by listening to Dan Crosby on the Retirement Answer Man show.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:21] Alzheimers and longevity can be scary thoughts
  • [4:45] What can you do to lessen your chances of Alzheimer's

PRACTICAL PLANNING SEGMENT

  • [8:17] Dr. Dan Crosby is here to discuss the behavioral aspects of investing
  • [10:05] Why don’t we talk about behavioral aspects of investing enough?
  • [14:14] The 4 tendencies that impact investor behavior
  • [21:55] The decumulation phase is the least understood
  • [24:46] The PERMA model for happiness

THE HAPPY LAB SEGMENT

  • [29:24] Acknowledge that stress can cause a temporary decrease in intelligence

TODAY’S SMART SPRINT SEGMENT

Resources Mentioned In This Episode

BOOK - The Behavioral Investor by Dan Crosby

BOOK - The Laws of Wealth by Dan Crosby

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Ask Roger a question

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

Direct download: RAM251.mp3
Category:general -- posted at: 6:00am CDT

On episode 250 of Retirement Answer Man we investigate the investment strategy of global diversification. With the U.S. stock market on a tear, is global diversification really worth it? In 2018 international investing has been a drag on our portfolios. As with everything, there are positives and negatives to investing internationally, but it is important to diversify your portfolio. David Stein, from the podcast Money for the Rest of Us, and I discussed the pros and cons of holding international stocks at FinCon recently and I share a bit of our conversation with you all. Listen to our discussion and hear some interesting facts about longevity on this episode of Retirement Answer Man.

Longevity is here to stay

Longevity is a big issue if you are approaching retirement since you will probably live longer than you think. This increase in longevity is important to consider when planning your retirement. Longevity has grown so much that the fastest growing population is that of centenarians. Between 2001 and 2015 deaths due to heart disease decreased while Alzheimer's deaths increased. As of now, the natural life expectancy seems to peak at 120 years old, but scientists are constantly looking for ways to increase it. The truth is we are getting healthier and staying productive for a longer time. Listen to the Hot Topic segment to find out what increasing longevity means for your retirement.

Pretirement is a great way to redefine retirement

Gone are the days when you can just stop working and do nothing. If you may live another 40 or so years after your retirement then pretirement is a great way to gain time freedom and it combats your feeling of having little or no control over your income and your time. If you simply stop working it can be much harder to jump back into the workforce if you ever need or want to. Pretirement helps to keep the mind active which is an important way to combat Alzheimer’s disease. Learn how to redefine retirement by listening to this episode of Retirement Answer Man.

Why do we need global diversification in our portfolios?

The S&P 500 has been on a roll over the past ten years while developed international markets have performed quite poorly. So if global markets are doing so badly, why should we even have them in our portfolio? There are positives and negatives to global diversification. There are quite a few quality companies that are traded overseas, like BMW, Shell and Volvo which you may want to invest in. Limiting your portfolio to companies that are only traded in the U.S. limits the reach of your portfolio. While holding international equities can be more complicated and take more research they can be a great way to bring balance to your portfolio. Discover the pros and cons of global diversification on this episode of Retirement Answer Man.

A conversation with David Stein on the pros and cons of global diversification

I recently chatted with David Stein from the Money for the Rest of Us podcast. We discussed whether global diversification is really worth it. The question of holding international investments is important to consider since the U.S. market has been outperforming global markets for over 10 years. David pointed out that if we want to hold a truly diverse portfolio then it should reflect the fact that over 40% of companies are held abroad. With a diverse portfolio it can always feel like you are missing out on something and that you have holdings which are dragging you down. How do you feel about your portfolio? Is it globally diverse?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:42] Longevity is a reality
  • [8:33] Why is pretirement so important?

PRACTICAL PLANNING SEGMENT

  • [12:10] What are the positives and negatives of holding international equities?
  • [16:07] Some data from the MSCI-EAFE index
  • [22:26] Why you still should hold international investments
  • [24:08] What does David Stein think of international diversification?

THE HAPPY LAB SEGMENT

  • [27:55] Longevity can lead to loneliness--so make some younger friends

TODAY’S SMART SPRINT SEGMENT

  • [29:10] Review your asset allocation and identify your exposure to global markets

Resources Mentioned In This Episode

David Stein Money for the Rest of Us

BOOK - The 100 Year Life by Andrew Scott

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Ask Roger a question

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

Direct download: RAM250.mp3
Category:general -- posted at: 6:00am CDT

The end of days is coming! Well, at least the end of days in 2018. This can be a time of year of frantic holiday spending, but you shouldn’t let holiday shopping blow the budget. On this episode of Retirement Answer Man, you’ll learn how not just to rock retirement, but to rock the holidays as well. In the Hot Topic segment, I’ll give you some strategies on how to control your holiday spending. And in the Practical Planning segment, we’ll go over an end of year checklist to help you plan for the end of the year. If you’re ready to rock the holiday season listen to this episode for tips on how to prepare for the end of days in 2018.

You can’t let Christmas shopping blow the budget

Not surprisingly, Americans will be spending more on Christmas gifts than they did last year. The average holiday spending amount is between $800-900 per family. We seem to spend more and more on the holidays every year. There always seems to be the next new thing that you just have to buy. People (especially kids) have gift expectations that can really blow the budget. Do you have a Christmas budget? How do you plan your holiday spending? Listen to this episode to hear 5 ways you can prepare your budget and rock the holidays.

5 things you can do to prepare for the holidays and save your budget

  1. Avoid temptation. When you are out shopping a lot you tend to see things you want to buy. Shopping online and staying out of stores can help ease the temptation to buy more.
  2. Think personally. just buy to give, a random gift. Try and think of a gift that is meaningful for the recipient.
  3. Avoid the fallacy of the deal. Black Friday, Cyber Monday, the day after Christmas sale--these are all just ways to get you to spend more money. You’re not saving any money if you weren’t planning on buying that thing to begin with.
  4. Pick one splurge. The splurge will depend on your specific financial situation. Choose where to spend your money. You can splurge, but do it in a meaningful way specific to your financial situation.
  5. Make a list of people you want to buy gifts for. Once you know who you’re buying for then set a dollar amount that you want to spend this year. Deposit that money in a separate account for Christmas. And be intentional on how you spend the money.

An end of year checklist to take advantage of time-sensitive opportunities

The end of the year is a wonderful time to take advantage of time-sensitive opportunities that can save you money and leave you more financially prepared for retirement and the coming year. This is the perfect time of year to revisit y our retirement contributions to your Roth IRA, 401K, and HSA. Analyze whether you can add a bit more. If you have a student in college now is the time to reimburse yourself for those approved college expenses from your 529 plan. You’ll also want to take advantage of your flexible savings account dollars. You need to listen to this episode to hear the entire checklist and learn more about donor-advised funds, tax harvesting, and tricks for the self-employed.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [1:56] Gift giving expectations can really blow the budget
  • [3:03] What can you do to control your budget and still rock the holidays

PRACTICAL PLANNING SEGMENT

  • [7:43] Time sensitive opportunities for the end of year checklist

THE HAPPY LAB SEGMENT

  • [14:56] What can we do to make interactions with people more enjoyable

TODAY’S SMART SPRINT SEGMENT

  • [17:32] Create a list of those to buy for and preplan what you want to buy

Resources Mentioned In This Episode

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Ask Roger a question

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

Direct download: RAM249.mp3
Category:general -- posted at: 6:00am CDT

Is thankfulness the key to a happy life and retirement? It seems like everything I read about happiness contains the common theme of gratitude. Being a thankful person can greatly increase your happiness and the Thanksgiving holiday is a wonderful opportunity to give thankfulness a try. So this Thanksgiving edition of Retirement Answer Man focuses on being thankful to help you create your best life and retirement. If you are trying to maintain a thankful perspective in this harsh world, this is the episode to listen to because I’ll give tips on how to be more thankful. So listen in while you prepare that holiday dinner or get ready for the onslaught of holiday guests.

3 forces that pull us away from the spirit of thankfulness

You have to maintain constant vigilance on your spirit of gratitude. Society always seems to be pulling us away from thankfulness by encouraging us to want the next best thing. Marketing messaging constantly tells us that we are inadequate in some way. The news media exposes us to the horrors of modern society which can lead us to be less appreciative of our own good fortune. Social media compels us to compare ourselves with others in a way we can never measure up to since people only post the best version of themselves. Although it can be challenging there are ways to become more thankful.

Tips on how to become more thankful

Surrounding yourself with positive people makes it easier to maintain a thankful attitude. I know it can be hard to be thankful if you are truly depressed, but sometimes if you fake it until you make it, this can lead to an attitude of gratitude. Volunteering or attending a group activity where people share information about themselves is a wonderful way to gain perspective of what others go through and can really increase your level of gratitude. Journaling is a powerful way to channel your thankful thoughts. As a matter of fact, you can go to RogerWhitney.com/thankful and tell us what you're grateful to enter to win a free journal.

What are Nichole and I thankful for?

Nichole joins me to discuss thankfulness and share what she is thankful for. We both have God at the top of our lists. I have so much to be grateful for including family, health, and an amazing work life that I don’t have to separate from my home life. My work gives me a way to connect with wonderful people and gives me a creative outlet. Plus I get to work with Nichole! Nichole is also grateful for family and work, but she has a female spin on her gratitude list. If you’re curious to hear her gratitude list listen in to this Thanksgiving edition of Retirement Answer Man.

What are you grateful for in your life and retirement?

As you prepare for the holiday madness try and maintain a spirit of gratitude. Really give a thought about what you have to be thankful for not just on this Thanksgiving, but throughout the year as well. One important key to happiness is maintaining a spirit of gratitude. Let us know what you are thankful for at RogerWhitney.com/thankful and you’ll have an opportunity to win a free gratitude journal.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [1:55] Thankfulness seems to be the key to happiness
  • [3:43] 3 forces of anti-thankfulness
  • [6:55] 5 Tips on how to be more thankful

PRACTICAL PLANNING SEGMENT

  • [12:10] Some things Nichole and I are thankful for

TODAY’S SMART SPRINT SEGMENT

  • [19:58] Don’t beat yourself up about what you eat today

Resources Mentioned In This Episode

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Ask Roger a question

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

Direct download: RAM248.mp3
Category:general -- posted at: 6:00am CDT

November is that time of year when we gear up for the holiday season. Although the season seems to start earlier and earlier each year. Now that we’re in full consumerism mode, it’s great to have some gift ideas to help ease the stress of the holidays. So this year, we’ve come up with 10 gift ideas for gifts that keep on giving. They are not too expensive and have a personal touch that you can apply. I have found that the best gifts aren’t the ones with a high dollar value but that are personal or have experiences attached to them. Listen to the Hot Topic segment to hear our 10 gift ideas for gifts that keep on giving then stick around to hear the answers to listener questions in the Practical Planning segment.

10 personalized gift ideas that keep on giving

  1. Fracture Me is a company that mounts pictures on glass. It is a beautiful way to display photos, you could send photos of a race or event, or maybe a vacation memory. Just send them your high-resolution photos and they will mount it directly on the glass.
  2. The Yootech wireless charger can wirelessly charge your phones. It works with both Android and iPhones. Your loved one will never have to look for their charger again.
  3. Cutco knives are a lovely gift for anyone that appreciates a quality knife set. You can add a personal touch by having them engraved.
  4. Do you know someone that is approaching retirement? My book, Rock Retirement, is a great gift to help guide their transition.
  5. Tom Podnar from Tennessee makes gorgeous barn wood signs. A handmade personal gift is always something special.
  6. Do you have a meat lover in the family? Perini Ranch has an amazing mesquite-smoked peppered tenderloin that you can have delivered to your door. Try it out, you won’t be disappointed.
  7. Booking an experience like tickets to a show, a weekend getaway, or a golf outing is always meaningful for the recipient as long as you consider their tastes and you actually book the experience. (Don’t simply give them a note that you plan to do it!)
  8. Board games are fun for the whole family. Board games are ta great way to spend time with those you love. Stick with simple ones that everyone can enjoy like Sequence, King Domino, or Stockpile. Even a deck of cards with a book of card games is a fun gift idea.
  9. Do you always mean to go on a date night with your partner but never find the time? One idea is to buy a gift card to a favorite restaurant and plan regular weekly date nights. If you have already spent the money on the experience then you’ll be less likely to skip it.
  10. Are you curious about the last one? It’s really a good one and a gift that keeps on giving. Nichole joins me to share this fantastic idea to share with your family. Listen in to hear the best one on the list and let us know what you think. Which one is your favorite?

On the Practical Planning segment, I answer listener questions on social security, how to withdraw your money, and leveraged ETF’s. You’ll want to listen in as I describe how retiring early can affect your social security benefit and how to plan the best way to withdraw your yearly expenses during retirement.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:22] 10 personalized gift ideas to help you through the season
  • [15:56] Nichole joins me for the last awesome gift idea

PRACTICAL PLANNING SEGMENT

  • [19:42] A social security question
  • [22:10] A question on withdrawal rules
  • [26:15] An aggressive investor wants to know more about leveraged ETF’s

THE HAPPY LAB SEGMENT

  • [32:23] Less materialistic gifts are more fun to give and more fun to get

TODAY’S SMART SPRINT SEGMENT

  • [33:17] Share your gift ideas

Resources Mentioned In This Episode

BOOK - When Genius Failed by Roger Lowenstein

Social Security Administration detailed calculator

Story Worth

Perini Ranch - the mesquite smoked tenderloin is the best!

Tom Podnar The Furniture Guy - he makes beautiful barn wood signs

Cutco knives

Yootech wireless charger

Fracture Me

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Ask Roger a question

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

Direct download: RAM247.mp3
Category:general -- posted at: 6:00am CDT

With the holidays coming up shortly it can be a troubling time of year for many as they gather together with family that they may not see often. One way to make family time less stressful is by trying to understand differences in personalities. Everyone approaches life differently and it can be a challenge to understand why some people make the choices they do. Gretchen Rubin is the author of the book The Four Tendencies and joins me on episode 246 to discuss the four personality types that she outlines in her book. Understanding these can help you understand family around the holidays and even help prepare you for your retirement planning.

What are the 4 tendencies?

There are many personality tests that people and organizations use to help understand personal behavior. These can be great tools to help inform us of our own behavior and that of others. Gretchen Rubin has laid out 4 tendencies that help explain why people behave the way they do. The 4 tendencies are the upholder, the obliger, the rebel, and the questioner. Upholders meet outer expectations and inner expectations they set for themselves. Obligers meet outer expectations but struggle to meet inner expectations. Rebels resist both inner and outer expectations, and questioners question all expectations, even their own! Listen to this episode to help you understand which tendency you are.

How do the 4 tendencies differ from other personality tests?

Each personality test is different and can teach you something about yourself and others. They all have their own vocabulary and pinpoint different aspects of people’s nature. Each one can tell you something about yourself. They will all tell you something but none of them will tell you everything. Understanding your tendency can help you understand how to achieve a goal or decide what type of accountability you need to get things done. When creating your retirement plan you can use your tendency to help you harness your strengths and understand your weaknesses.

How can understanding the 4 tendencies help your retirement planning?

Planning your retirement is really planning a change in your lifestyle. Attaining more time freedom leaves you time to pursue your dreams. But having more time freedom doesn’t necessarily mean that you will achieve all of your hopes and dreams. Understanding your tendency can help you meet your retirement goals. For example, obligers often feel that they will be able to tackle everything once they have more time. But then they find that they disappoint themselves because without external accountability they often have a hard time attaining their goals. Have you ever set a goal for yourself that you didn’t achieve?

Should you moderate your tendency or own it?

Each tendency comes with its strengths and weaknesses. Understanding your strengths and weaknesses as well as those of your family members can help you relate to others. Learning how to harness your strengths can help you achieve your goals. Once you understand more about yourself then you can find tools that help you move forward to achieve your goals. You will still have weaknesses but knowing how to navigate them and create solutions will help you do all the things you want to do. Listen to this episode to hear how to apply the 4 tendencies to your life and relationships and rock retirement.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:24] People approach life and their problems differently
  • [5:45] Nichole and Roger took the personality test

PRACTICAL PLANNING SEGMENT

  • [9:49] How do the 4 tendencies differ from other personality tests?
  • [13:37] What are the 4 tendencies?
  • [15:47] Understanding these can help you better yourself
  • [17:43] How can understanding the tendencies help someone navigate change?
  • [22:08] Should you moderate your tendency or own it?
  • [24:53] Know yourself and your partner

THE HAPPY LAB SEGMENT

  • [27:48] What are you going to do to be happy over the holidays?

TODAY’S SMART SPRINT SEGMENT

  • [29:56] Learn more about yourself and your spouse

Resources Mentioned In This Episode

The Four Tendency Quiz

BOOK - The Four Tendencies by Gretchen Rubin

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Ask Roger a question

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page



Direct download: RAM246.mp3
Category:general -- posted at: 6:00am CDT

Welcome to the Halloween edition of Retirement Answer Man. On this spooky episode, I regale you with 4 scary retirement stories that will haunt you. You’ll want to make sure that you don’t end up living one of these retirement nightmares. You can begin by listening to the Hot Topic segment to discover what solutions you can begin implementing if you are behind in your retirement savings. Listen to this episode now to hear 4 scary retirement stories to use as a cautionary tale for you to avoid a similar fate.

Are you one of the many that are behind in saving for retirement?

1 in 3 people has less than $5,000 saved for retirement! The ‘experts’ recommend that you have 1 million in savings by the time you reach retirement age. If you are in your 40s and 50s and you are behind in saving for retirement, then you know its too late now to really take advantage of compound interest. You may feel doomed, but there are ways that you can begin to turn your nightmare into an amazing retirement. If you are feeling a bit behind the retirement 8-ball then make sure to listen to this episode of Retirement Answer Man to hear 3 things you can begin doing right now to prepare for an awesome retirement.

What is the best investment that you can make?

Many couples get divorced in the empty nest cycle of life and even more wait until the retirement phase. Once they realize that they have 20-30 long years ahead with their spouse they head for the hills. As bad as a divorce is, it is even worse later in life. Not only is there the huge emotional toll but the older you are the bigger the financial ramifications are as well. Your earning power is quite limited and having to split your savings can bring about financial ruin. Invest in your relationship now to ensure a happy retirement is in your future.

Have you built yourself a financial cage?

Our economy is scientifically designed to suck money out of your wallet. Advertisers manipulate your emotions to get you to spend money. With the ease of Amazon Prime and Apple Pay, there’s no more distance between the thought of buying something and actually doing it. Many buy the toys to create all the fun right before retirement. You then have to end up working longer because you become a slave to your stuff. Vacation homes, outdoor kitchens, and RV’s bring about dreams of good times, but make sure you can actually afford them before you end up trapped in a scary retirement story of your own.

Natural savers are used to delaying gratification, but for how long do you delay?

Automatic savers sometimes have trouble easing themselves into retirement. When you are used to constantly saving and delaying gratification, making the transition to spending your savings can be scary. Many natural savers end up working longer because they can’t bear the thought of dipping into their hard earned savings. But then they wake up one day and realize they won’t be able to spend all of their money. It can be a challenge to find the right balance between saving and spending, but in order to rock retirement, you’ve got to learn how. Listen to all the spooky retirement stories on this special Halloween edition of Retirement Answer Man.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [3:38] Do you have the ‘recommended’ amount saved for retirement?
  • [5:51] How to turn your nightmare into an amazing retirement

PRACTICAL PLANNING SEGMENT

  • [9:24] Many get divorced in the empty nest cycle of life
  • [14:56] Have you built yourself a financial cage?
  • [19:07] Baby boomers have student loans 
  • [21:54] Vacation homes are something people buy right before retirement
  • [23:59] Natural savers are used to delaying gratification

THE HAPPY LAB SEGMENT

  • [26:08] Eat some Halloween candy to cheer up from those scary stories!

TODAY’S SMART SPRINT SEGMENT

  • [27:07] Spread your candy eating out over the next 7 days

Resources Mentioned In This Episode

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Ask Roger a question

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

Direct download: RAM245.mp3
Category:general -- posted at: 6:00am CDT

As exciting as it is, the thought of retirement can be a scary one. By the time you reach retirement age, it seems like you have life all figured out. Now you’ll have to start all over again in the big, scary unknown. Why should you leave the comfort, income, and respect that you have in your career for a life of instability and the unknown? Listeners share their worries as well as their hopes for retirement in the practical planning segment and I discuss the sunk cost fallacy and how it pertains to retirement on the hot topic segment. Listen to this episode of the Retirement Answer Man to ensure that you don’t fall for the sunk cost fallacy.

What is the sunk cost fallacy?

Have you ever held onto a stock that was tanking? Even though you knew you should sell, you just couldn’t let it go for pennies on the dollar. Sometimes we feel that because we put money, time, or effort into something that we value more than it is really worth. The truth is we only have what we have today. What something was worth yesterday, last week, or last year doesn’t matter anymore. Listen to this episode to hear what the sunk cost fallacy has to do with you and your retirement.

How sunk cost bias can color your decisions to retire

We all have a sunk cost in where we live, where we work and in our status quo. It can be hard to let these things go and embrace the unknown of retirement. It's easier to just keep working, it’s the known thing, people respect and like you, and you have a steady paycheck. When you retire you give up a great income, friendships, and the respect of your colleagues. Don’t let the sunk cost bias influence your decision on retirement. Position your life so that it is where you want to be. Even though you’ll never feel 100% ready, retirement awaits.

Are you worried about increasing life expectancy?

Increasing longevity brings about an interesting paradox in retirement planning. On the one hand, living longer would be great, but on the other hand, how are you going to pay for it? Increasing life expectancy is actually one of the main concerns for many that are about to retire. People are worried that their money will run out before they do. Another concern for future retirees is health care, if you are interested in retiring before 65 then figuring out how to pay for health insurance is a big consideration. Many have even opted to just wait to retire until they are eligible for Medicare. What is your biggest retirement worry?

Pretirement can be a solution to many retirement worries

Increasingly people are looking to find a pretirement solution to ease their worries of too much freedom, not enough money, or health care woes. Pretirement appeals to those looking for more flexibility yet who are not ready for full-on retirement. One listener mentions that he’s not looking to retire by sitting on a beach in Florida. Retirement in this day and age is a whole different ball game. That’s why it’s comforting to have a tribe of people that are walking the same walk. Be sure to hop over to the Rock Retirement Club and get on the waiting list to join the club to help you ease your retirement worries.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:12] The sunk cost bias
  • [8:14] You’ll never feel 100% ready to retire

PRACTICAL PLANNING SEGMENT

  • [10:56] Wendy is in the pretirement phase of life
  • [13:36] Pretirement is a great way to ease retirement worries
  • [17:01] What do people miss about working?

THE HAPPY LAB SEGMENT

  • [22:27] The Rock Retirement Clubhouse construction is going well

TODAY’S SMART SPRINT SEGMENT

  • [24:31] Who is in your fab 5? Give them a call!

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Ask Roger a question

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

Direct download: RAM244.mp3
Category:general -- posted at: 6:00am CDT

Have you ever wondered what recent retirees wish they had known before they retired? Recently I asked a group of listeners what kind of resources they would get the most value from to help them prepare for retirement. I am creating an online club that will help you Rock Retirement. On this episode, I share with you conversations that I had with listeners about retirement hopes and fears. These listeners are close to retirement or recently retired. They discuss what they are most excited about and what their retirement worries are. Listen in to hear about retirement hopes and fears from real listeners as well as the exciting news about the Rock Retirement Club.

What is the Rock Retirement Club?

Coming in January 2019 is the Rock Retirement Club. This club is created for people just like you, people that like to do things for themselves, but don’t want to go it alone. This will be a premier platform where people can talk freely about retirement. Rock Retirement Club will be a community of like-minded people that share their dreams, aspirations, and fears about retirement. The Rock Retirement Club is meant to be an inspirational community where you don’t have to worry about a sales pitch at the end of the deal. Check out the website and entire your email to get on the waiting list for the open enrollment period to join the club.

What are people looking forward to in retirement?

In my discussions with newly retired folks and those that aren’t quite there yet I always wonder what they are looking forward to the most in their new phase of life. Ray is excited about the freedom it will bring. Stephanie is looking forward to following her passions. Paulette can’t wait to spend more time with family. Lee is simply looking forward to not having to manage people all the time. Listening to others’ excitement is so contagious. What are you looking forward to in your retirement?

What are people anxious about as they approach retirement?

Retirement is a time to live it up, enjoy freedom, and fulfill lifelong dreams, but it can cause a lot of anxiety too. Many people worry about how to make their money last. A huge worry for those that would like to retire early is healthcare. It’s such a big worry that some simply continue working. Lee worries that he will have too much idle time on his hands and be bored. Do you have any worries about retirement? Listen to this episode to hear if you can learn from others as they share their hopes and fears about retirement.

How do you know when enough is enough?

One question I ask those that I meet is: how do you know when you have enough? One of the biggest worries among retirees and future retirees is if their money will last them their lifespan. So how do they figure out when the right time to retire is? Some people are very calculated and have their savings and spending all mapped out. Others simply hope for the best. Figuring out how much you need to retire is a huge aspect of retirement. What about you? How will you know when enough is enough?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:22] What is the Rock Retirement Club?

PRACTICAL PLANNING SEGMENT

  • [4:21] Gary shares what he wishes he knew before he retired
  • [6:47] George discusses what surprised him about retirement
  • [10:07] Ray is excited about the freedom
  • [12:05] Stephanie can’t wait to follow her passions
  • [13:49] Paulette is looking forward to spending more time with family
  • [16:50] Susan is looking forward to more flexibility
  • [18:25] Lee is excited about not having to manage people anymore

THE HAPPY LAB SEGMENT

  • [21:12] Nichole has a fun fall tradition

TODAY’S SMART SPRINT SEGMENT

  • [23:25] Spend a bit of time acknowledging what you might be anxious about or excited about in retirement

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Ask Roger a question

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

Direct download: RAM243.mp3
Category:general -- posted at: 6:00am CDT

Debt is not a new invention, it has been around for thousands of years. But the modern idea of debt really came into being during the baby boomer generation. The availability of credit has made it so easy for anyone and everyone to get into debt. It comes as no surprise then, that debt among the 65 and over crowd is on the rise. The age-old question of whether you should pay off your house before retirement remains. On this episode, I attempt to answer this question to the best of my ability. If you have been wondering whether you should pay off your house, then you will definitely need to listen to this episode of Retirement Answer Man.

Debt has become the new norm

The availability of credit skyrocketed during the baby boomer generation. Suddenly everyone could buy anything they wanted on credit. People began to finance houses, cars, electronics, and education. Once you reach your 60’s your timeline of earning potential decreases and it is important to become intentional on how you use debt. Managing debt wisely can have a huge impact on your life. You don’t want to become one of the rising population of 60+ that has filed for bankruptcy. Listen to this episode to hear how to become intentional about debt.

Should I pay off my house?

Paying off the mortgage is a dream for many, but why? Many people have finally paid off all of their debts when they reach retirement age, so this leaves them with the question: should I pay off my house? On the one hand, there is one less payment to make each month. On the other hand, paying off the house takes away your savings. If there is a catastrophic event, then you may have to go back into debt to pay for it. Why do you want to pay off your house? Can you really afford it? Where will the money come from? Listen to this episode to hear what you should consider if you are thinking of paying off your house.

Should you pay down your mortgage and refinance?

Craig has come up with a strategy to pay down his mortgage and then refinance his home in the next 4 years. He is 62 years old and knows that there is no way he can pay off his house in the next 4 years, so he thinks that this could be a good plan. Some things he should consider are: what kind of house is it? Could he resize his house and maybe relocate? Does he have a decent amount in a tax-deferred account? He also needs to consider that he needs to refinance before he retires to make sure he has an income. Listen to this episode to help you develop your strategy for paying down your mortgage.

If an asset is tapped for providing an income stream, is it removed from your net worth statement?

Once an asset is tapped to provide an income stream it still has the potential to provide wealth. It should not be removed from your net worth statement. Part of agile retirement planning means that you should be tapping different assets to help you manage your pretax and post-tax assets. Another listener asked a great question about whether you should reinvest dividends, capital gains, and interest or leave them as cash in retirement. Listen to the answer to this question and more listener questions on this episode of Retirement Answer Man.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

HOT TOPIC SEGMENT

  • [2:22] The availability of credit skyrocketed during the baby boomer generation

PRACTICAL PLANNING SEGMENT

  • [6:56] Paying off the mortgage is a dream for many, but why?
  • [9:40] Should Craig pay down his mortgage?
  • [14:17] If an asset is tapped for providing an income stream, is it removed from your net worth statement?
  • [16:03] Texas teachers plan question
  • [18:02] Should you reinvest dividends, capital gains, and interest?

THE HAPPY LAB SEGMENT

  • [20:00] The 2018 annual pumpkin carving contest announcement

TODAY’S SMART SPRINT SEGMENT

  • [21:05] What is your mortgage pay down strategy?

Resources Mentioned In This Episode

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Ask Roger a question

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

 

Direct download: RAM242.mp3
Category:general -- posted at: 6:00am CDT