Ep: 90: Maintaining Financial Security While Adjusting Your Retirement Goals
THE X'S & O'S
The idea of retiring may seem like a distant dream, but it’s important to remember that it is never too early to start planning for it.
In this episode, RPA Wealth discusses a topic that many soon-to-be retirees are facing: how to maintain financial security in retirement while changing retirement goals.
The current economic climate is forcing many individuals and families to reassess their retirement plans and make necessary adjustments, so how do you go about making these adjustments and how can you tell when the adjustments need to be made in the first place?
Matthew, Brent, and Joshua discuss:
What steps to take when you want to change a major retirement goal
How to gauge whether your retirement goals are realistic for your situation
The different types of retirees: the big spender, the big saver, and the fearful big spender
The different stages of retirement and how to divide up your savings between them
And more
Resources:
Connect With RPA Wealth Management:
Transcript
Welcome to The Retirement Plan Playbook with Brent Pasqua, Matthew Theal and Joshua Winterswyk from RPA Wealth Management. In this podcast, we cover current events, retirement planning strategies. And provide you with the tools to help you build a successful retirement playbook in any political or financial landscape.
Join Brent, Matthew and Joshua as they navigate the issues that can make the later stages of your retirement plan challenging and help you create the best Retirement Plan Playbook. Now let's get to the show.
All right, well, welcome in the Retirement Plan Playbook. Uh, we have a great show, I think today, and I'm here with Joshua Winterswyk, certified financial planner, Matthew Theal, Certified Financial Planner. I'm Brent Pasqua, founder of RPA Wealth Management, and uh, so let's get into our show. Oh, Brent. Could we talk about your trip to Disney World?
How was that? Disney World was incredible. I thought it, my, my kids are seven and my son is soon to be nine. And it was just a perfect age to bring them to Disney World. I thought the Florida weather is incredible out there, especially at, I think probably cuz I haven't experienced a lot of Florida, but at this time of year, It was absolutely beautiful.
We had great weather. It was warm, it was hot. Was it humid? It wasn't humid. It was just more of a tropical heat, but not overly humid. You came back tan and and like very happy with the like Florida. Yeah, I liked it. I liked it, the weather more than I, I thought I would, I liked tropical weather. I felt like I was in the Caribbean, but on American soil.
And I really actually kind of liked that climate. It looked very green. It was, you sent some pictures. How many parks did you go to? We went to all four Disney World parks. We did one, we did one back to back, and then we had a day off, and then we did the next two in the next two days, over the next two days.
And it is a lot of walking. It's not a vacation, a relaxing vacation. But it is an experience and the one feedback I've always received from clients that have gone with their family or grandkids has been how, how expensive it is. It isn't cheap, like you're pulling out your credit card the entire time because you need stuff the entire time.
And then it's just like they have it set up for you to spend money. It's like Vegas for kids. Hmm. So that video we sent you before you left to the dad, like throwing his credit card in the air. Well, he was training for Disney World. That that was true. That is a hundred percent true. What was your favorite park?
My favorite park was Hollywood Studios. It's the newest, it's. To me felt the cleanest. It was just pristine. It was really on point. It was like the Disney standard that you would expect. Magic Kingdom, which is like our Disneyland. To me, it wasn't as nearly as nice as ours. I feel like Anaheim's Disneyland is really pristine and dialed in.
Like it's really looks good every time We're there. Uh, I felt like that wasn't Magic Kingdom at all. Like the, it didn't, it just didn't meet to me, in my opinion, it wasn't to that standard. Maybe they just haven't updated it as much. Cuz it's older, right? Yeah, yeah. It feels older. It feels older. Like their, the detail wasn't there.
It felt a little bit more carnival ish in certain parts. It just wasn't what I thought, but it was still nice. It was you, you know, you're there for the magical experience. How It's so big. Huh? I just remember when I first went, like, it's just massive. That whole property. Yeah. Everything in that area is massive.
It's so spread out. They just, they dominate. I didn't realize this, but. Disney dominates real estate out in that area as well. Like they own tons of property, not just commercial property, but residential property. Hmm. So it's pretty amazing to hear sort of, I didn't know how much they're involved into real estate out there.
Lots of families or. Yes. That's, I mean, that's all it is. It's families going and taking their kids. There's kids everywhere. What about retirees? You see a lot of retirees out there with the generations or No, I would, yeah, with the generations, but I think, retirees on their own, they're probably going there to be with their grandkids or their kids.
They're not probably as much going there or living there. You know, I'd probably, if I was retired, steer clear of Orlando. Yeah, yeah, for sure. Well, I think that kind of what should lead into today's show well, we're going to kind of talk about different ways that retirees can maintain financial security while adjusting their retirement goals, right?
Because we're in this new economy right now. We have high inflation, high interest rates, the stock market's down, you know, 20% from the highs, and people are still retiring. They're still going about their retirement. But like, how's that changed? How can you manage your goals? What do you think about that, Josh?
Yeah, I think it's a great topic. Like you said, there was a great article in the Wall Street Journal and I, I think I recommend for anyone out there to go check it out. It gives I think what Matt, three or four stories of retirees in America, um, that have retired with less than a million. Is that the, is that the number, Matt?
Yeah. And it just kind of tells their story and we see a lot of these same stories, um, when we meet, you know, new people coming into our office. So I think that today's going to be, just a, a really good kind of overview in, in how we're going to reevaluate, the current economic climate.
Yeah, so I guess we'll kind of start by like, when you guys are working with your clients, how do you tell them, Brent, like maybe this retirement goal isn't quite what it is. How, how do we, manage this within their retirement plan? Yeah, so I think one of the things is, the thought of retiring can be a scary transition, right?
Because you've worked your entire life and you've been working probably towards retirement. And then actually making that jump from working to retirement, no longer having working income and then going on and thinking that, Hey, did I save enough? How is my money supposed to last me the rest of my life?
What's happening? If I run out later, I probably can't go back to work again. And if I go back to work again, I won't be making nearly as much. So when I commit to return, then I've really gotta be retired. You, you first have to overcome and know how you're going to get through and, and really by creating a plan, I think that's obviously step number one.
Like you gotta know the details of your number. And nowadays people don't really have access to the software that advisors use. Or if they do, it's in limited capacity or they would have to go through a huge learning curve on how to use it. But once you start to create the plan, then I think that the scariness of that kind of starts to go away.
But when you're starting to, to create that plan, I think that's what, where the goal part comes in, that you have to be realistic with yourself on what your goals are, when you're going to retire, what you're going to do in retirement, how much you want to spend in retirement, what sort of is most practical for you to live a comfortable lifestyle.
Yeah. How had another financial planner talking about this and he did a really good job of framing it and he was basically like, you know, when I, when I work with retirees, I try to get them to think, Hey, what are you actually retiring to? Or what are you retiring from? Right? Because if you've been working that high grind corporate lifestyle for a long time, like dude, retirement might be kind of boring for you.
Uh, especially, if you're just retiring to your house, there's no grandkids around. It's, it's you and the wife. Does she like you? I don't know. Like, probably not that much anymore, to be honest. Because then a lot of times they're coming into your domain, like if you're a wife and you've been, you're either retired or staying home for a while, and then the male retires, then you know, they're, you're coming into something that they've adapted to their own schedule.
Yeah. She went from seeing you, you know, three hours a night before you went to bed, when you got home to seeing you, eight, nine hours a day. I mean, that's going to get old real fast for the wife. And I think we can forget like how important setting or reevaluating these goals are. Cause that's like, to me, what I hear you say too is like, what is your ultimate goal?
Right? What is it that you're retiring from? Like you had mentioned Matt. So I think for retirees, the nervousness around the numbers can easily dominate, like the discussion and the conversation. Without actually thinking about what's to come next, just with life and your hobbies and your goals. And so this is a very important step in my opinion, whenever we have like differences in economic climates or just different, changes in retirement of you have to take time separately to just think about your goals and reassess them.
Yeah, absolutely. And you know, when I think about like retirees, when they come and tell me like, oh, I want to spend time with their grandkids, that's one of my goals. That's actually one of my, the, when I hear that, that's not my favorite goal. They say, because that's like contingent on their grandkids, right?
And they might think they're retiring to see their grandkids, five days a week. But you know, are you really, your grandkids are probably in school. You know, do your kids really want to see you? Some of my more favorite ones are travel. Right. Pick a trip. I, you know, I want to do these five or six different dream trips.
Oh, great. That's something we could plan for. And you could go spend for it right away. Yeah. I think, you know, travel's the obvious one, but no, there's so many people that don't want to travel. Or if they do want to travel, they want to travel in like some kind of limited capacity. Mm-hmm. But travel is an obvious one.
That's a great goal. I think that's an enjoyable one, but I think the one that I hear the most, Is that people want independence. They don't want to be subject to having to get up to an alarm clock. They don't want to have the stress of the workday. They don't have to do want to deal with that boss. They want the luxury and freedom to do whatever they want on any given day.
That's the number one goal. I can understand that because like when I think about how nice a my Saturday morning is when I don't hear an alarm blaring in my ear and it's dark and cold outside, like, it's a pretty happy Saturday. Yeah, that, that is a happy Saturday. But I think that, part of this whole financial planning conversation is having the question answered of are you able to do that?
Right? And you have, that does have some sort of calculation or some sort of number behind it. So without like setting the actual number of years into retirement, knowing the actual dollar amounts, are you ever going to like, alleviate all of that stress without answering those questions and setting those goals?
I don't think so. Probably not. When you guys look at working with your clients how many of 'em actually end up like, spending through their money, or do they end up leaving a lot of it to the kids and then it just, you know, the kids blow it. Like what do they do with it at that point? What do you guys see?
I think for a majority of people, they find commonality to the way that they spent money while they were working. So if they were working and they ha were big spenders, most people don't change their spending habits when they retire. So if you probably didn't save enough for retirement, it's probably because you were spending too much before retirement and you're going to spend too much during retirement.
For those who are good savers and saved really good money, are going to be very financial, financially secure in retirement, which will ultimately lead them to leaving money to their kids and to their family members, but not because that's their goal. It's just because they, they're financially astute. They know how to manage their money.
They know how to be comfortable. They know how to live within their means. So I think there's kind of two ends of the spectrum there. There's really no middle ground, so either you're really good at spending money and in that case you're going to spend your retirement assets super fast or you're really bad at spending money and you're probably going to struggle to spend your retirement assets.
I've seen one other example of this, though, like high, the high spender then is very afraid in retirement. Correct? Yes. And it goes to like the extreme, which I've, I, I'm afraid I didn't save enough. I'm, I know I need to retire or I'm forced to retire, and now I'm so afraid to spend my lump sum, you know, or my nest egg that I just don't do anything now.
Yeah, we see that a lot. We see that a lot, and I think my goal as an advisor is to be able to get them to spend it, to teach them two, because if not, then what else is the purpose of saving all of that money? That's, that's the part that I try to get people over the hump. If your goal isn't, if you know, if you come in and say, Hey, I want to leave as much money as possible to my kids, that's one thing that's different.
Then don't spend your money and then that's your goal, that's your priority. But if your priority is not, that's not your priority, that's not your top goal, then what are you saving your money for? If we already taking care of like how you're going to get through long-term care, if that ever became an emergency, then why are you building all of this money continuously throughout retirement when literally it's just going to be passed on?
If their goal is to leave the money to their kids, Shouldn't they start that now? Like ultimately they're like, Hey, I, Brent, you know, I only need a hundred thousand in income or you know, whatever number make believe. Um, and I got, two, 3 million bucks, but I want to leave this to my kids. And you know, by the time that I, I die, I'll probably have six or six or seven, 8 million.
Cause I'm not going to spend a penny and it's going to be invested the whole time. Yeah. But it's the underlining factor that Josh was just saying. It's just fear. So what a behavior, a good financial planner would be like, Hey, you should probably maybe gift your kids 20,000 a year or help them get that house or put the grandkids through private school for them.
Yes. If you can help them get over the ho obstacle of the fear, how do you do that? Continuously working with them on their planning and, you know, like fear isn't something that you can even numbers, you could show someone numbers all day long. But that doesn't mean that's going to make them that much more comfortable to start passing out checks of, $17,000 a year to each kid.
And it might take time, right? It, it, it might not be. You go meet with the financial planner and, and to be honest, you could do this yourself if you took the steps and created a financial plan and actually set. Your goals in line, but it could take a year. It could take multiple years before you actually feel comfortable to do that.
And that's okay too. Well, personally, I hope my parents are listening to this podcast because I could use a new car. That's why you asked the question, you know, I was thinking about myself. Do you try to get people to cut though their spending before they retire or during retirement? I, I don't, um, I'm not big on having people cut spending.
I try and be as realistic as possible. Most of the time I'd say we get a lot of clients who are probably savers, right? That's just, who's going to hire someone to be their financial planner in retirement? Um, they probably have already saved a lot. That said, I think the easiest way for someone to cut spending in retirement is looking at the expensive line item, and that's going to be the house on the car.
Those are the two areas. Yeah, it's, it's the boulders. It's not the pebbles. We see that even with younger clients, with clients preparing for retirement, A lot of like the, the bad financial decisions is because their biggest expenses weren't accounted for properly. They couldn't afford it before. They still can't afford it.
And then now you're probably going to be in a situation where you're going to be forced to make a decision on one of these big items like housing or a car, or not get the car you want. And I think that just setting a, a balance and focusing on those big tech items is, is very, very important. I've been working with retirees.
For 20 years and I've successfully watched hundreds of people retire, go from working to retirement. I've yet to see somebody change their daily spending habits from when they were working to when they retire. I've never seen it. Most people will spend exactly the same way in retirement as they did before, whether it's dining out.
Whether it's going to the coffee shop, whatever that normal, normal spending habits are, they're going to continue to do that during retirement. They don't want anybody discretionary spending stop. Yep. Discretionary spending will remain the same because some of that's habitual, right? Like, it, it's just, it's natural habit.
Like you're you're doing it. What, what's going to force you to change that? Nothing. Yeah. So like if you're driving a Mercedes while you were a top executive at a corporate firm, You're probably not going to switch down to like a Toyota or a Honda in retirement. You're going to keep wanting to drive that Mercedes is what you're saying?
Not unless you're forced to, but it's not just that it's frivolous spending. It's the discretionary stuff. It's, you know, if you go to a restaurant and you go, you frequent these restaurants, you know, let's say two or three times a. A week, you're going to still go to those restaurants, retire. You're not going to say, well, I gotta cut out restaurants outta my budget, or I'm going to go get eat fast food instead of going and dining out.
Yeah, you're still going to shop at the same grocery stores. You're still going to buy the same things. You're still going to buy the same clothes. You're still going to buy and do the same things that you were doing before. But like you said, if you're, if you're thinking your mind, okay, I don't know if I have enough money or, or number two, like, I want to drop spending or I want to retire early.
Then you gotta move boulders That's downsizing your home, that's moving to another state that's making a lot of changes with the boulders that are going to make it actually more comfortable. Cuz your, your daily habits are going to stay the same. Because I have a question for you, like, how many people come into your office and say like, Or ask the question, can I really afford this home in retirement?
Not very many. Or, can I really afford this new lease on the Mercedes? Yeah, not, not very many. They're going to do a lot of that anyway. But the question should be there is, Hey, if I want to keep spending like I do, should I move to a new home? And we don't get that question a lot. No. And how many of these clients though, come to you?
You know, with a four or five bedroom home, it's. And it's like how, how many of those bedrooms are being used? Cuz I know your kids don't live in the state anymore, or I know they have their own thing going on. Correct. And you see that a lot where people have a tremendous amount of equity. The house is mostly paid for or paid for, and if they downsize to a house half the size, at half as much of equity that you're going to have, they're going to sit on another big pocket of money that they can live off of and live and even more comfortable.
But a lot of people don't want to move. Yeah. And it's fear, it's change, again, just like retirement or downsizing at home, a lot of this is based off of fear. But if we can show them right, even as financial planners that there's greener pastures, we can do this with limited. Kind of casualty.
Let's do it because it's going to benefit you and you can still spend like you want to, like Brent just said, do you see many people that will go and do part-time work or o other jobs where they make money? No. I have a few clients that have, but they're more on kind of the hobby side or like, My job is, you know, pretty easy.
They called me back. I, I'm doing a little part-time here and there to make ends meet or to keep spending like I'm spending. In my opinion though, I think that that's a great option. I do too, for so many people, like there is so much work out there that like people can find that can still bring them joy and create a little income.
But me personally, with my clients, I don't see too much of it. Or even the question of like, should I be whenever I do see it, at least for the most part when I've seen it. It's for a shorter period of time than you would think. It's four months, six months, eight months, maybe a year, maybe two years at the most.
But it's not extended. It's not very long. It's like a very short term thing. Do you get kind of your work fixed and you're like, well, retirement's actually really good. Why am I doing this? And I hear a lot of people say to piggyback on that too, which is I'm more busy now that I'm retired than when I was working.
Yeah. Like I, I don't have a time to do a bunch of other things. Yeah. And it's, there's not enough money in this freelance work for me to be, spending my wheels doing on this and taking away from all these other things I've just picked up on. Yeah. So to summarize for this topic, you know, in a way, if you are a retiree and you, and you're spending too much, it's really hard to cut your spending.
It is, but I would say this too though, and I think this is one, important point that is, is not really thought of as much when you think about retirement spending, is that if you're working with a really good advisor, and we do this a lot with our clients, I think people should really highly consider.
Their withdrawal percentage that they're taking out of their money, and they should break it into three chapters of retirement. The first chapter, which is the Go chapter, that's you're going out and traveling and you're doing things, you're being with your grandkids, you're active. That's your active chapter, and then you get into the second chapter, which is much more passive, right?
You're slowing down a little bit. Maybe in your late seventies, you're not as wanting to be as active. You're not as much go-getter out there. You don't want to get on a plane as much. And the activities that you're doing with your grandkids is maybe less expensive, right? Because you may not be taking 'em to Disney World now.
And then you get into the third chapter where you just, for a lot of clients that have gotten this chapter, they just kinda exist and they'll tell you that, I'm just here, I'm just existing managing their health more. That's it mostly. Yep. They're just, their body's still there. And if you think about that, the first chapter's, the one that you've worked hard for, that's the one you deserve.
That's the one you should be spending the most money in. Not the last chapter. You're not saving your money for your last chapter. You're saving your money for your first chapter. And from a time standpoint, you want the first chapter to last the longest. Right, of course. Because that's the, that sounds like the best one to me.
Absolutely. I mean, existing, that kind of sounds boring. Yeah. And it, you know, you're just, you know, you're not spending very much, there's not much to do there. And then, and in that second chapter, that passive chapter, yeah, maybe that's when you're doing a little gifting or you're, you're maybe making a little bit more convenience for certain things.
But you're doing it less frequently. And so things are a lot of more auto. So I think again, a good advisor will teach young retirees in that transition for that first 15 years or 10 years. Go do the things that you love. It's like a smiley face. Yep. Yeah. There you go. So like when, when we're looking at helping clients, is there anything we can move the needle on?
Like what about social security? h how does that work? Can we help people maybe pull a little bit more out of the social security coffers? Yeah, I'm, I'm going to kick this topic to Brent just because he has been our social security expert for so long. And he is my go-to for everything, social Security, but yes.
Um, just to kind of intro the topic, social security is not only a, a huge decision but there are techniques and strategies that we implement for our clients to maximize social Security. And for a lot of people, this is their only fixed income. That they're going to have in retirement. So getting this decision correct, is very, very important to your retirement success.
Yeah, I think that's a great intro into it. I think, people have two really important questions when they're thinking about retirement, is social security going to be around for the rest of my life? Cuz that's income that they're going to be counting on. And, and part of that question is, if so then like when do I begin to collect it?
But then in addition to that, If I'm retiring before 65, what do I do about medical insurance? And even if I do retire by 65, what do I do about medical insurance and Medicare and like, how do I manage that? So my healthcare is kind of figured out because chance to start, if you've been working with the employer, your healthcare is your, you know, you've had the same health insurance are similar to it for a period of time.
Social security can be very tricky. A person can elect multiple times during their life. If, but once you elect, you're committing to that election and. Timing it to take the social, your social security at the perfect time is absolutely critical because that's the amount that you're going to get for the rest of your life.
There's a lot of factors involved that have to do with husband and wife's ages. Your earning history when you're going to go to collect taxes on social security. Yes, social security is tax. There's a lot of factors with it. Pinpointing when you're going to collect social security could literally be one of the most critical decisions you make as you transition from work to retirement.
I feel like most people collect at 62 or if they're full retirement age. But also like my aside to that would be if you're sitting here and you're listening to this podcast, you know, you've made it 25 minutes in today, you're probably not the type of person who's going to collect at 62 or you're full retirement age.
You're probably looking for more of a detailed plan. Like that we do for our clients. Maybe you're collecting at 68 in a few months. Maybe you're collecting at 70, maybe you're collecting early at 64, but it's not 62 and it's not full retirement is, and do you know that? Do you know the answer to that question?
Right? Based off longevity, at which time gives you the most benefit? Can you answer that question? If you can't, you should be able to. And your retirement assets too, right? Like if you got two, two and a half million dollars saved in retirement assets. Might be better for you to wait on social security and start using some of your retirement assets if you retire early.
Yeah, and how we do that as advisors is essentially again, software, software, software. We stick all of the data into software. It has all the algorithms in there, it has all the filing options, has all the amounts that you can collect and all the different periods of your from 62 to 70. As you know, you put the husband's life, wife, uh, agent, the spouse's agent, and now you're getting all of these different spit outs and options of when to collect social security, when your break even points are, and now you can make an extremely educated decision on when to collect social security because you ain't probably going to go back once you start collecting.
Yeah. You have all of that answered and now you can relate it to your goals. Yep. Like we just talked about, if you're reevaluating it and make a very, very good decision, you're going to be comfortable with. Have you guys seen what's going on in France with all the rioting? Yeah. Over their pensions. Yeah, that's, and they've only wanted to extend a retirement age out two years, right?
Yeah. Like, I feel like here in the US they're changing social security all the time and nobody, riots. Yeah. Y y but they basically, they're on a pretty extensive pension system from my understanding, right? Yeah. And they're basically now saying that, You know, you thought you were going to retire at whatever age.
Now you're going to have to wait two years longer before you could retire. I feel what gets overshadowed with Social Security is the headlines about the fun running out, not necessarily the changes in like full retirement age. Like we get more questions about that than we do. Like what's my full retirement age now?
Right. And I think part of that is, is because they haven't extended social security out from still being able to collect at 62. You can still collect it at 60 C. You want it to, no. You don't know how much less you're going to get from it by collecting early. Right. Okay. I mean, but it's kind of hidden between the complications of social security.
Yeah, that's a good point. But I think one thing that does happen though is when you decide to collect social security, From that point, you can start adjusting your strategies and risk tolerance in your portfolio. Yeah. And, and that's a good pivot to talking about how you are invested, right?
Because that makes a difference. That's how you're going to get return in retirement. And what I tell a lot of my clients when we're going through their financial plan, we're looking at how we should set up their portfolio, is we're just trying to hit a rate of return. We want five, we want six, we want eight.
We want predictable. Yeah. We want exactly. We want predictable returns. If we know that we could easily predict your retirement. What we don't want is a bunch of mutual funds that one year do 20% the next year do minus 10. Now we're creating unpredictability for your retirement plan, and you're creating the chance of failure.
You're increasing the margin for error. Exactly. So when I look at it, what I say to everybody is, if you're a retiree, you might have been able to get yourself to retirement, right? Like you saved the one five, the one six, the million bucks, whatever it is. You did a great job saving. But to actually get from the one six to the income that takes professional help.
Would you agree, Brent? Yeah, and and I think you have to go through that, the that withdrawal strategy and you have to go through a withdrawal plan and you have to look at optimizing your withdrawals and where you're taking it from and how much you're taking it from, because one other major factor that's involved in all of that is a good advisor is going to tell you between your post-tax money and your pre-tax money, Those two portfolios are probably going to be allocated and invested.
Slightly different. Different, they probably should be, right? Yeah. They're, they're two different buckets of money. They're completely different. And if it's being withdrawn properly, then you're probably going to be able to predict exactly how much you're going to have to take out because you're managing your tax effectively that way.
Mm-hmm. The, the more effective you are with withdrawing money from the right buckets of money. Then the more effective and the less you're going to have to be taking out because the less you're going to pay in taxes. Yeah. You're, you're keeping more of what's yours. If you're, you're planning out your income effectively, saving money in taxes, meaning more money into your pocket, and even to take it a step back to piggyback on that thought, it's like you have to understand that predictability or what that expectation for return is because then you're never going to have clarity of, am I going to run out of money?
So if, you know, and, and I think in the story Matt of the Wall Street Journal, they had all those stories and one of the stories in there, the gentleman, you know, lost money in 2008 and nine, went into a stable value fund. Ooh, never put the money back invested and earned 1% over the last, you know, so many years.
And now if you're taking out 4%, and that's just in a stable value fund, only earning one, or let's just say three now, that's a pretty big discrepancy and. I think the market's up like 200% in that timeframe, maybe even more. Yeah. And we, we see that here, right? I mean, that's not just a story that was in the Wall Street Journal.
I related to that one. I think part of the challenge too is when people start taking out their money, they don't know what funds to sell off, when to sell it, because, right. Unless you're keeping a substantial amount of money in a stable value fund or the money market fund in your portfolio, you're having to sell some investments as you're taking out money throughout the year.
And you probably need professional help to tell you what to be selling, when to be selling it, how many quantities of shares you should be selling to keep your predictable income stream coming in. Or else like you, we've had volatility the last couple years. That can mean major trouble. Mm-hmm. And then you're being forced to sell at the wrong time too.
If you're not selling enough or properly having a plan on what to sell to create that income, and now your hands being forced at a bad time. Yeah, we have a lot of really good shows on retirement income. You know, I think where interest rates are, today is, April, 2023, it's probably one of the best times to retire in the last 25 years.
But it's just about getting that professional advice, getting that portfolio set up and structuring your income out. Yeah, I, I think I've seen more people retire with a higher net monthly income than they do when they're working. Yeah, I just had a client in here today and we're, we put his final numbers in through the e-money financial plan based on what he's going to be withdrawing from his retirement.
And he's making more than he was working, paying less taxes. He's about to go buy a, a trailer, I think for his for his retirement. He's, he's living, he's having a good time. Yeah. And the reason why that they're. Able to make a higher net monthly income. Again, one of the things you touched on is no more reduced taxes, potentially.
Number two, you're not making these large contributions or these contributions into your 401k retirement plan. And then you have some, a little bit of work expense drop off. Now, now you calculate it all out. You have a higher net, net income. It could even be cheaper healthcare, right? When you go into Medicare.
Yep. So it's another reason, another variable that's going to close that income gap more than people think. Let's move on and talk a little bit about healthcare. Um, so we had Marissa on the podcast. That was two podcasts. Go. That was a great show. I really enjoyed hearing Marissa's thoughts on staying healthy in retirement, kind of your healthcare options.
I've known, I know we have Gosh, what was her name? Brent, the Medicare expert. I'm drawing a blank. Laurie Boatman. Laurie Boatman on. And that was a popular show. That's a really good show too. But I think it's really important for, at retirees to stay healthy live that active lifestyle. And I think about myself, like when I was in my twenties and early thirties, like I could drink a ton of beer, eat a cheeseburger, and I'd wake up the next morning feeling fine.
Now if I do that on the weekends, like I got like a hangover in my gut for like a, you know, a week. Right? So like as retirees, man, managing and maintaining your health is a really important part of retirement. It's actually, very overlooked. Yeah, I think it's a part of retirement that's most concerning or one of the most concerning parts of retirement cuz none of us know how this part of our life is going to end up.
We don't know if we're going to be in a nursing home. We don't know if we're going to need home healthcare. We don't know if we're going to die suddenly. We don't know if we're going to, what type of illness we might get. And it's probably the most concerning cuz you want to make sure that you live out the rest of your life a certain way.
But it is also I think, part of the planning process that a, a lot of people will either neglect or not want to talk about. But as long as it's addressed and planned for, you'll be managed through it. I've never seen a client. Have an unsuccessful time at this part of their life, meaning that they ran out of money, never, never seen it through a healthcare event.
Correct. Right, and and I feel like it's actually a concern of a lot of people who might hire us. They'll say like, Hey, I, I'm concerned about healthcare expenses, their retirement, and I'm sure if I have enough money saved. It's like, well, how do you want me to really fully predict that? But you can't have assumptions, right?
I mean, we can take average healthcare costs in in America through these ages, male or female. We can build a cost in to make sure you can self-fund your healthcare events. I mean, I think that question can be generally answered, giving you that peace of mind cuz we don't know what's to come, with healthcare.
But it can be an added expense and it shouldn't be ultimately like your biggest fear though, in my opinion. I agree. Cause I think we, we can plan for it. We have a handful of clients that are still working right now. That are annually, they've made, we've looked at, the three options. Self-insuring, getting an insurance planner or policy or just like kind of winging it, right?
Like, you know, you, you can wing and say, just, I hope I have enough money. Like, those are your three big options. But what we've decided to do with them is that, okay, well let's self-insure, but let's self-insure in a slightly different way. Here's what you were going to pay for insurance. Let's just put this in a bucket of money that's going to be saving and growing that you're going to put in annually.
And you're probably not, the average statistics says you're probably not going to need this to your mid eighties. So let's say that's 15, 20, 30 years out. A lot of people, it could be a long time away. You do that year over year for 20 years, and then you let it grow while you're retired. Like, hey, that money's going to take care of your long-term care bucket.
That's your side money just in case something happens. Yeah. And if you don't, if you didn't use, if you don't need it, You can use it and you can also pass it on as an inheritance that's still going to be there for you instead of just giving every dollar to insurance premiums. Yeah. And then if you buy an insurance policy, you restrict it half the time to the contingencies of the policy, and then they're going to control cash is king in the long-term care business.
I think sometimes, like the fear comes from the insurance company's selling fear. Mm-hmm. We see it even in commercials. We know the insurance salesman out there. Like there's just a lot of fear driven selling going on in that whole healthcare long-term care. Industry. I've seen a lot of clients who've purchased long-term care policy, and a lot of 'em were purchased again, like in the late nineties or mid two thousands when long-term care policies were really big.
But I've seen a lot of those policies not pay out the way that they were supposed to when somebody really needed it. Yeah. It's not good. Yeah. It's unfortunate. So it's probably safe to say long-term care, at least as it stands right now, is probably dead for most people. If you haven't purchased a policy, they're really hard to get, not that great.
Would you guys both agree with that? Inexpensive? Yeah. Yeah. I mean, I think there's different options to get them, but it, it, it seems like that's an area that's very still challenged. I agree. Yeah. So then I guess the best way as a retiree to, you know, to try and stay healthy and avoid kind of the, you know, four or five major things that are going to end up killing you, that kill the majority of Americans would be to maintain that active lifestyle.
Keep going out, seeing friends keeping a support group around you, keeping your brain fresh. Is there any other things you guys recommend to your clients? Stay on top of your appointments Right, as well? I don't know if you mentioned that already, but Oh, you're like your doctors. No, I didn't. Yeah, yeah, yeah.
Um, making sure you are doing all of your, your checkups and preventative care. Exactly. Yep. Yeah. Yeah. And just finding pure happiness, doing the things that you enjoy doing. I mean, that's why you're retired. Right. Any other thoughts on today's show? Any, anything we missed? I think the one thought for me is if you want to have a successful retirement life, and everybody out there who's worked as hard as I'm sure anyone in listening has deserves to have a purely enjoyable lifestyle in retirement, like, You worked really hard.
This is like the golden, this is really the golden years of your life. Like go out there and enjoy it. But the way to do that the most is to plan. Like you have to plan. You have to utilize resources out there. It's worth the money. Invest in a good advisor. Put your money into making sure your plan works and make sense, and then go and successfully enjoy it.
Like peacefully. Go enjoy your retirement. Personally, I'm just hoping I could afford a country club membership when I retire. Me too. That's a good goal. That's a great goal. That's where I'll spend my time. But going back to the kind of the original Wall Street Journal article that kind of prompted this podcast, one of the, one of the ladies that we're interviewed said, it didn't go as I planned.
We had a plan A, we had plan B. And now we're on plan D. And I think that that's a pretty good point cuz things are going to change. But if you never take the time to actually like, think about your future and, and plan that out, you don't want one change to ruin. All of your retirement and all of that joy that you just talked about.
So I think that, you know, we see it with our clients, you see it in this article as well as like planning's going to help even when things do change. You know, man, if you really want a golf membership when you're retired, I can set you up an account that I'll manage for the next 40 years till you retire.
And then you'll have your golf membership for 30 years, 40 years. Yeah. That, that put you out way too old. You are, you want to be able to swing a golf club at that age. But yeah, no, I probably have about 10 or 15 years left now. I'm kidding. Oh, there you go. No, I got a good 30 years till retirement. Yeah.
That's a good idea. Brian. I'll set up an account. We'll put the money in there, just invest it and grow it. And then here's your, your membership dues for the first 15 years of your retirement. Yeah. Um, okay. I'll start with recommends today. I'm going to start, have you guys watched Drive to Survive on Netflix?
It's made by the people who made the golf show. No, full swing. Yeah. You talking about full swing? Okay. Full swing. Is this the F1 series? Yeah, it's the F1 series on Netflix. It's five seasons long. Um, I think it's five. Yeah, it's five. My wife and I watched it and it is really good. Safe to say we're kind of, we've become fans of f1.
We like watching the races now. It's Formula One, right? Is that the full name of it? Yeah, formula One. But it's really cool. I enjoy the show. I highly recommend it. I'm glad you're recommending it because I've heard you talk about it a lot over the last few weeks. Yeah. Get some more of that out because you were given a hard time about like being an F1 person all of a sudden, right?
Oh yeah. He's like, he jumps all in, right? So like he came in here like, dude, you gotta watch this F1 show. Watching it every day. I woke up at three 30 in the morning to watch the F1 race on Saturday and. He goes like, full steam ahead. I'm, I'm not going to be surprised if he comes in with like a F1 hat, God or a t-shirt like he ordered or something.
Did your wife work on this show? She didn't work on the show. She doesn't work on these series, but she's really into it too, which is another reason why I like it cuz it's, you know, something we could do together, which is cool. I just don't know if it's like a fad or he's really going to like, like this going forward.
I'm not sure yet. Yeah, I mean, I've known him for a majority of his life. I would assume that he's not into f1. Like not that you quit things. I'm not saying that by no means, but it just, you don't seem like an F1 guy to me yet. But it kind of fits because he's been really into cars lately. Yeah. So, I don't know.
I, so one thing I learned about F1 though that is the most expensive sport. That's interesting. Like if you want to go to an F1 event, You're probably dropping at minimum thousands of dollars on a ticket. That's crazy. Do they hold F1 events, F1 events in the United States? Yeah, there's a few. There's one in Miami.
There's a big one in Vegas coming up, and I think there's one in Austin. Are you going to go? So we were actually looked at the one in Vegas and it looked like kind of the cheapest tickets were about 10 grand. But you, wow. That included your hotel package. They kind of packaged it all together. So it's just a, like, limited amount of tickets.
There's just not a lot of fans or, uh, I think there's a massive amount of demand. Oh, okay. Um, just based on how popular sport has become with the Netflix show. Wow. Anyways, who's next? Enough about me. I, I think about when I put a, a page together with all my recommends because I like my recommends I think.
And I'm, I am into clothing. I do like style and, and I like to recommend stuff around clothes because I think it's, if people need a good clothing recommendation, I think you, it's, you have to try things to know if it's good or not. And then that could be wasteful to money. But there's a company called Rhone, r h o n E.
They have a really good polos. It's polo time right now, like it's getting in the, the warmer weathers coming out. Is there logo like a dog? No, their, their logo is like the three X's. Oh, okay, okay, okay. Yeah. And they, they're, it's a really, really good clothing line. I think their polos are great. I think Matthew, you have a couple of their sweaters.
Um, you've worn 'em here. It's a great, it's a really good line that if you're looking for like a couple Summer Polos, great place to start. I, I've had, I've seen them on my Instagram feed, like they've sponsored, like sponsored ads on there. Uh, but I haven't ever bought anything from rum. Yeah. And I've never worn it for like golfing, but I think, you know, if you're trying to go to a, a.
And a party over summer with shorts and a nice polo. You want dress up and look nice. I mean, good fitting clothes. Well, and you only play golf four times a year. You know, there's just not a lot of polo off you for you. Yeah, I don't need, I, I just need a couple of polos, my golfing attire. You're set for the year.
Yeah. What do you have fresh Josh? Um, I'm going to recommend, I think I recommended it before in its previous seasons, but we'll just, what me and my wife are watching is, uh, Mandalorian on Disney. So this is a spinoff of Star Wars, um, world, and I think it's on its third or fourth season. It's the show with like baby Yoda that I know he's all over, but it's back and the production is just really, really good.
Um, so if you. Are even casually interested in Star Wars. To me, this has been the best spinoff from like the movies that they've done a show on, like the Disney Plus app. Um, and it's just really good. I've really enjoyed all of the seasons, and, uh, if you haven't checked that out, do so. Has your son watched it yet?
No, I don't think so. Oh, okay. That's a good, if you're going to watch something with him, it's a pretty good one for a casual watcher to, I'll have to check it out with him. Yeah, I'll have to talk about that with him. It's good. All right, perfect. Well, thanks for listening to the show today. Uh, Matthew. Brent, Josh, see you next time.
Thank you.
Thank you for listening to the Retirement Plan Playbook. Click the following button to be notified when new episodes become available. To get in touch with our team, call us at (909) 296-7977 or visit our website@www.rpawealth.com to schedule a complimentary consultation. The information covered and posted represents the views and opinions of the guest and does not necessarily represent the views or opinions of RPA Wealth Management.
The content has been made available for informational and educational purposes only. The content is not intended to be a substitute for professional investing advice. Always seek the advice of your financial advisor or other qualified financial service provider with any questions you may have regarding your investment planning.