The X’s & O’s

Planning for retirement can feel like a daunting task to complete. The financial landscape is constantly changing and learning how to navigate the problems that come up can be challenging. But starting the retirement plan might be easier than you think. Today Brent, Matthew, and Joshua discuss some initial questions you should be asking yourself if you plan to retire in the near future.

The Hosts:

Brent Pasqua, Matthew Theal and Joshua Winterswyk

 

Transcript:

Brent Pasqua: Welcome to the retirement plan playbook. I’m Brent Pasqua, host and founder of RPA Wealth Management. And today we really have an excellent show. Today’s show is the steps people should take if you’re considering on retiring next year. And whether you’re planning on retiring next year or two years from now, I think it’s important you really spend some time and listen closely. If you’re not driving, maybe you could take some notes.

Brent Pasqua: But I’m also here with Matthew Thiel, certified financial planner, and Joshua Winterswyk, certified financial planner. It’s been an anticipated show that we’ve kind of planned for as we round out the end of what has been such a crazy 2020. With everything that’s happened this year, if you’re getting ready to retire next year, or thinking now even closer about retiring, I think we have some good tips.

Brent Pasqua: But as we get started with that, curious on what your guys’ thoughts are. What’s your favorite Thanksgiving food?

Matthew Thiel: Hey, Brent, how you doing today?

Brent Pasqua: Good. How are you?

Matthew Thiel: I’m doing well. Getting ready for the holidays. Winding the year down.

Matthew Thiel: Great question. I like Thanksgiving. It’s fun. You get to watch football, obviously, maybe you put a little side wager on some of the games to make them more exciting. Usually a couple beers, maybe good wine, whatever.

Matthew Thiel: But my favorite is the mashed potatoes and gravy. I don’t know what it is about that homemade turkey gravy. But as long as it’s not coming out of a can and it’s made with the drippings, it is so good.

Brent Pasqua: Is that what you’re always going back for seconds for?

Matthew Thiel: Oh yeah. No, definitely my plate is a third mashed potatoes and gravy.

Brent Pasqua: Those pillowy mounds of mashed potatoes?

Matthew Thiel: Yeah, exactly.

Brent Pasqua: And you’re not a carb guy, so you’re omitting the roll? You’re just going for the mashed potatoes?

Matthew Thiel: Well, as I’ve got older, it’s more of the breads I was trying to stay away from. I see no reason to have a dinner roll. That’s just wasted calories, but the potatoes are okay. They come from the ground, they’re at least natural.

Brent Pasqua: What about you, Josh?

Joshua Winterswyk: I’m a big guy on the sides too. I’m not as excited about the turkey and the ham. I don’t know why. I’m more green bean casserole. My grandma makes these great deviled eggs, and I’m just ready to smash on all of the sides that are there like yams, mushrooms, all of the different fixings that go with it, stuffing. So that’s what I’m looking most forward to.

Brent Pasqua: Is there people that are really excited to eat Turkey?

Joshua Winterswyk: I don’t know. You know what I actually like? The next day, if you take the Turkey, put it in a corn tortilla and fry it as a taquito, get some avocados, make some guac. That’s how I like my turkey the next day that I’m really excited for. But I don’t know. It’s not my favorite dish I’m looking forward to on Thanksgiving.

Brent Pasqua: Yeah. I would have to say my favorite is definitely green bean casserole.

Joshua Winterswyk: Love it.

Brent Pasqua: Yeah. That’s my favorite side. And if I’m going back for seconds of anything, it’s definitely going to be that. But my plate looks mostly like sides and maybe just, to not be rude, having a little bit of the turkey.

Joshua Winterswyk: Yeah. That’s how I am too.

Matthew Thiel: Turkey’s hard to cook. A lot of people swing and miss. Or one year the turkey’s really good and then other years it’s not so great.

Brent Pasqua: But deep frying’s become really popular. And I think that’s kind of stepped up the Turkey game a little bit.

Matthew Thiel: I’ve never done that. I would love to try it.

Brent Pasqua: Yeah. All right. Well, let’s get into the hot take headlines. We have a couple of really good headlines here.

Brent Pasqua: COVID vaccines. Since our last podcast, we have seen three COVID vaccine makers release positive news. Now it seems like a vaccine may be live in 2021. We had Moderna complete a more than 30 person trial in the US. Pfizer completed more, a 43,000 person trial in the US, and then AstraZeneca completed a 23,000 plus person trial in both Brazil and UK.

Brent Pasqua: And so far, the vaccine results have posted a 90% efficacy rate. Studies were done on all different people, ages and races. And I was looking into the studies and I don’t believe anybody under 18 was actually tested. So it’s people of all ages above 18, but distributions really should begin for high risk and healthcare workers sometime, hopefully in December. And then to the general public, hopefully in January and February. What are your guys’ thoughts on these new releases from the vaccine?

Matthew Thiel: Yeah, I’ll go first. It’s great to see, science, technology, all these companies and people working together to get this out, to keep the high-risk people safe. I’m not going to be one of those selfish people who’s trying to cut to the front of the line. Let’s save it for the people who are at serious risk of COVID.

Matthew Thiel: The numbers say I am not at risk, so I will not be trying to cut in line. But yeah, really great news. Exciting.

Joshua Winterswyk: I agree. I think it’s pretty amazing how fast these vaccines, and how well they’re doing. We’re really not even a whole year into this pandemic and we have three very promising looking vaccines that are going through these trials. So I think it’s pretty amazing news. I think it’s something to be very excited about and congrats to these companies for developing them so quickly for us.

Brent Pasqua: I feel like there’s three different groups of people here. There’s the ones that are rushing out to go get it. And then there’s the ones that are, let’s wait and see what happens. And then there’s the, anti-vaxxers are who are like, I will never actually take a vaccine.

Brent Pasqua: I’m curious to see how the data plays out over time if cases really substantially drop. There’s a lot riding on these vaccines.

Joshua Winterswyk: Yeah, absolutely. And then just how fast the distribution is. I know they’ve talked about having things in place already, but how many they can produce and distribute and how that’s all going to pan out. It’s going to be an interesting few months.

Brent Pasqua: I just hope that people who deserve to get it first should. Those are essential workers who’ve been in the middle of this, this last nine months who have taken risk every day, who haven’t had the luxury of working from home. I really hope those people, if they want it, they can get it first.

Joshua Winterswyk: Right. Me too. Definitely.

Brent Pasqua: So the second headline, Tesla has been added to the S&P 500. Several stocks are actually added to the S&P 500 every year, but Tesla will be the largest company to ever be added. Similarly to the additions of Berkshire Hathaway in 2010 and Yahoo in 1999, Tesla will automatically be one of the top 10 largest companies of the index. It’s market value has just reached nearly $500 billion. And because of that, I think Elon Musk is a 20% shareholder, has now surpassed Bill Gates as a second richest person in the world.

Brent Pasqua: Really what’s your thought or take on Tesla getting added here? Because there was a lot of question whether or not they would get added.

Matthew Thiel: Isn’t it crazy that they weren’t in it in the first place? Is that kind of mind-blowing? This is a company that’s been really dominating in the last 10 years of stock market performance. One of the greatest American successes ever, and it’s not in the S&P 500? That should blow everybody’s mind.

Brent Pasqua: There was a lot of questions on bankruptcy, what, two or three years ago. Is that could have what prevented it?

Matthew Thiel: Yeah, but GE and Ford are in the S&P 500 and I feel like they almost go bankrupt every other year.

Joshua Winterswyk: That’s a good point.

Brent Pasqua: But now they have record profits from Tesla. But for a while that’s what we did talk about is that they didn’t have any profits. They weren’t making money for a very long time.

Matthew Thiel: That’s true.

Brent Pasqua: And now they’re finally, quarter after quarter, breaking their record profits. So really cool to see though. I think a lot of people can be excited about Tesla. And especially when we talk about indexing and investing in the index, now that you get exposure to Tesla. So for a lot of index investors, I think that’s exciting news.

Matthew Thiel: Yeah. Great for index investors. Good one for them.

Brent Pasqua: What pushed it over the edge because there’s a lot of talk from the S&P 500. I think it dropped the stock pretty tremendous in I think what, October, that they weren’t going to get in and all of a sudden they did get in.

Matthew Thiel: I don’t know what made them do it. Maybe it’s the fact that it’s one of the top 10 largest companies in the world now. I don’t know. I haven’t really followed the story that closely, but honestly, if I was on a trivia show and you asked me if Tesla was in the S&P 500, I probably would have said yes.

Brent Pasqua: Yeah, me too. All right. So let’s get in the retirement planning corner. I think obviously this is a critical aspect of if you’re starting to really think about, I want to retire in the next year, I want to retire in the next two years, but I really don’t know how to begin to prepare just with the initial steps of knowing, even if I can retire.

Brent Pasqua: Let’s talk a little bit about what some of those beginning steps are and what can you do to actually start getting mentally prepared, financially prepared, so that you know that that can possibly take place?

Brent Pasqua: First thing that you’re probably going to want to know is really how much money do you need ongoing monthly, annually, to maintain your lifestyle? How do you determine that?

Joshua Winterswyk: That’s a great question. I think it’s extremely important if you’re planning to retire in the next year, that you really take some time to lay out what your expenses have been. Not only last year, but in the years prior, and bring some awareness to that spending. And we start with discretionary versus non-discretionary, or if you want to just make it simple, your wants versus your needs to making sure we calculate how much you absolutely need to maintain that same lifestyle that you’re living. And then also, how much money you need on the extras.

Joshua Winterswyk: So the splurge expenses, all of the other expenses that come with you retiring. And let’s just say it’s upgrading a house, or you need a new roof, or you need a new car. All of these expenses are going to add up as you enter this new phase of life, you’re going to have a lot of different wants. So really sitting down and determining these expenses, laying them out and calculating them is just a really great first step to starting planning for that next stage of life.

Brent Pasqua: So I guess then, if you’re breaking up wants and needs, needs would be your mortgage payment or your grocery bills. Where some of your wants would be your luxuries or your things that you don’t necessarily require.

Matthew Thiel: Yeah, absolutely. That’s a good way of putting it. Needs is pretty much what you need to survive. Want is that stuff you could probably do without.

Matthew Thiel: Let’s throw some examples for the want bucket, maybe your cable TV, maybe that trip you’re planning on going on, the RV, that motor home, that’s probably more in that want bucket than an actual need. Sorry people. And then what else? And even here’s one that hurts a lot of retirees as well is, helping those kids that are still kind of clinging on, right, who may be in their twenties to forties and still come to mom and dad asking for help. That’s a need, you don’t have to… Or a want, you don’t have to pay for your kids anymore. They should be able to be sustainable.

Brent Pasqua: Yeah. That’s a conversation that you need to maybe have with them that retirement is going to be different than when you had more income. And it’s maybe time that that separation has to take place of being able to spend all that extra money monthly on that.

Brent Pasqua: What are some steps that people can take to get to that point, to really determine what their expenses are? The initial thought would be, you print out your bank statement, you print out your credit card statement, but that sounds like a really tedious task. What are some options on how you figure that out?

Joshua Winterswyk: I think now technology has really helped a lot of people with tracking expenses, creating budgets and creating awareness to your spending. So there are a few softwares out there. The first one that comes to mind is like mint.com. It’s free. You can link all of your accounts up there and it’s going to track your budget and you’re going to have all of your transactions categorized.

Joshua Winterswyk: Matt, do you have any other recommendations on tools you can use to help track expenses?

Matthew Thiel: Yeah. People like You Need a Budget. I’m not a fan, though, of all the different budgeting softwares. They do a good job of categorizing your expenses right off the bat, but sticking with it for a long period of time is rather difficult with the way they’re set up and designed.

Matthew Thiel: Let me give you an example. So say you put a $500 eating out budget on your mint. Well, what happens when you spend more than $500? It splurges over. And then technically it doesn’t take away from another category, which isn’t how money works. It’s much, much easier to track your expenses and get an initial idea budget by just using an Excel and splitting your money like Josh said into your needs versus wants bucket. And then you lump all your wants into one big pile. Meaning, your wants should be, a thousand, $2,000 a month. And who cares what you spend it on. That’s what you have to spend on your want purchases.

Brent Pasqua: Yeah. See I’m more in the camp of you sync up to You Need a Budget, or Mint, or Quickbooks, or Quicken, and you use one of those, and then you can create an Excel spreadsheet to give yourself the mental time to spend and going through and creating what your discretionary and non-discretionaries are.

Brent Pasqua: I think it’s like a cross-reference of being able to sync everything up and see it rather quickly, but then also doing the exercise of doing an Excel spreadsheet to really calculate out… And to be able to put things in categories yourself, you really get a good idea of what you’re spending, and I think it creates mental awareness of what am I actually spending? Did I actually need that in the past? And am I going to need that in the future?

Matthew Thiel: Yeah. That’s a good point. On the Excel spreadsheets, don’t make it complex. What you need to do is you put your mortgage or rent payment if you have it, you put your insurance costs, you put your taxes, you put all those expenses that you have to pay. And then you look and see what’s left. Okay. Well, maybe with my social security and withdrawals or whatever I’m getting five, six grand after I pay all my expenses, I have two to three grand left. Okay. Well, that’s your want bucket.

Joshua Winterswyk: Two things that stand out to me too, is like you said, making it more simple because there’s no substitute of the effort of actually tracking it and budgeting. Whether if you’re using software, an Excel spreadsheet, there’s still that human element that you have to stay on top of it. And making it easier will lead you to be more likely to continue to track it and do a good job and stay on top of it.

Joshua Winterswyk: So I do agree with you guys, both in that sense, but making it really easy. And then my second point that I think of too, is being really honest with those wants and needs. That extra dinner you could think as a want because you need to eat, but could you have spent more money at the grocery store, which would have been cheaper, right?

Joshua Winterswyk: Or that extra dinner, even like you talked about Matt with kids, helping them out by paying for their dinner, right? So just be really, really honest with those wants and needs when you are calculating that, regardless of which way you’re doing it.

Brent Pasqua: I think that’s a great point because I think what you also need to be honest with too, is what’s going to make you happy and live a really good lifestyle in retirement? Because you don’t want to create a budget that is so skimmed out of the things that you actually enjoy, that you’re just trying to get retired, that you’re not going to be able to do those things either, right?

Joshua Winterswyk: Right. No, totally.

Brent Pasqua: And my feeling is, is that really, this has to be the initial step. You literally probably can’t retire unless you know the answer to this question.

Joshua Winterswyk: Oh totally.

Brent Pasqua: You have to know how much you’re spending. That’s step number one, figure out how much you’re spending and know if your income is going to be sufficient enough to support it.

Brent Pasqua: And the last question I have on this before we move on is just really how do you make sure you aren’t leaving out any really Important expenses that you may not know of right now? Whether they’re medical or anything else to be prepared. I don’t know what’s to come in the future.

Matthew Thiel: That’s why you got to have an emergency fund. We always talk about it. When I broke into the industry, I just saw a lot of retirees who just had their IRA set up. That’s it. They didn’t have any cash set aside. They were just living off those social security checks and the IRA withdrawals. That’s the generation, now they’re probably in their eighties or nineties.

Matthew Thiel: But I will say the boomer generation has done a much better job at having cash in a savings account that’s for emergency purchases like you’re talking about.

Brent Pasqua: I think those are such great points and things to spend time on.

Brent Pasqua: And I’ll tell you, spending your time on expenses is going to be a lot less hours than it’s takes you to work. So when you’re retired, continue to take that time to work on that.

Joshua Winterswyk: Yeah. Great point.

Brent Pasqua: The second step, I think when you’re starting to look towards retirement in the next year or two are really starting to determine what your income sources are going to be. What I guess are some of those examples of what the income sources are going to be?

Matthew Thiel: Yeah. So most people in this country are going to have a few fixed retirement sources. The first mainly is going to be social security, or you’re going to have a government pension if you don’t have social security. If you didn’t qualify for social security, that means you probably didn’t work, or you are from another country, which in that case probably makes this a moot point. But for 99% of the people listening to this podcast, your main source of fixed retirement income is going to be social security.

Matthew Thiel: After that, maybe if you worked for a corporation that had a pension, there’s quite a few people who are in their fifties and sixties who have a corporate pension still. Whether they work for a car company, or an engineering company, aerospace, those places all had pensions in the eighties and nineties. So, that’s something.

Matthew Thiel: And then you have your portfolio withdrawals. Those are the three main sources, right? So your 401k, your IRAs, 403Bs, whatever you have.

Matthew Thiel: And then on top of that, maybe there’s part-time income coming in. If you’re going to continue to work. Or even for rentals, that’s another source of retirement income, but those are really the five main sources.

Brent Pasqua: So I guess, how do you become even more prepared to figure out what the amounts are you’re going to receive from these sources?

Joshua Winterswyk: I think the first step, like Matt said, the social security is probably going to be your largest fixed income. So if you haven’t received your social security report recently, logging on to ssa.gov, we’ve talked about that website in the past. Downloading that report, that’s going to tell you how much social security you’re going to get. It’s going to detail how much you would receive if you were to collect social security at 62, at your full retirement age, whatever that’s going to be. And then also at 70. And so this will give you a better idea of what you’re actually going to get monthly from social security. And that’s probably the first step.

Joshua Winterswyk: Then if you also have a pension now is a good time if you’re planning to retire to request those pension estimates. So getting with your employer, whoever the department is that handles the benefits and actually requesting how much you would receive if you were to retire next year. If you haven’t done that, that’s also very important.

Joshua Winterswyk: And then creating a balance sheet. So going over all of the accounts that you have that are deemed for retirement or investments and laying out your liabilities. So that way, you know what that nest egg actually is. So Matt talked about portfolio withdrawals for income. Well, we first got to know of how much money’s in the portfolio. And so if you have a couple different 401ks, or IRAs, or Roth IRAs, making sure that we’re putting all of that data together to knowing exactly how much you actually have to pull from.

Matthew Thiel: Real quick on the pension strategies. If you have a corporate pension, they’re most likely going to give you a juicy offer that is going to be in the form of a lump sum. Because they want to bet that paying you out is better than paying you over your life. And it’s becoming really, really popular. And since I’ve started with interest rates going lower, those pension payouts are getting a lot better in the lump sum form. So, that’s something to look at.

Matthew Thiel: And one reason why you’re going to want to most likely contact a professional, if you have a corporate pension and they’re offering you a lump sum because there’s detailed calculations that go into whether or not you should take that option.

Brent Pasqua: I think that is such a critical point right now because when we’ve been recently looking at client’s lump sum offers on these pension plans, our recommendation over the last several years prior to this year has usually always been collect a monthly pension with guaranteed income. But rates have changed, and now it’s really changing it and making it even more difficult to figure out.

Brent Pasqua: And that lump sum looks attractive, but that doesn’t mean that’s always the best decision for you. There’s risk in taking that lump sum. Income that’s giving you guaranteed income for life is very beneficial. That really should be looked at very calculated and carefully.

Joshua Winterswyk: Yeah, I totally agree. But with the climate changing when interest rates slow, I think it just puts more emphasis on doing your research and analysis on that decision going forward if you’re going to retire for anyone that has that corporate pension.

Brent Pasqua: And I think what that also does is brings up another challenge, right? Which is let’s say you retire at 61, you can’t collect social security till 62. So you’re going to have a break in income, and then maybe you’re not planning on collecting your pension until 64. So you have all these different staggering times where income would start versus stop and your work income stops.

Brent Pasqua: How do you sort of plan for these gaps in potential incomes and this change in cashflow, because some years you’re going to require more withdrawals from your portfolio versus others? How do you prepare for that?

Matthew Thiel: Well if you’re not reaching out and hiring a financial planner to do it for you, then your probably only other option is use an Excel sheet and do it year by year, right? And target out these income sources and write the amounts you’re going to need because you’re right.

Matthew Thiel: And especially in your sixties, your retirement income is going to be very lumpy. It’s not going to be the same every year. It’s going to be coming from different sources. It’s not as straightforward as it’ll be in your seventies and eighties.

Brent Pasqua: How do we do it when we build it into a plan and a client can visually actually see those?

Joshua Winterswyk: Yeah, great question.

Joshua Winterswyk: Whenever we’re building a plan, we create what’s called a cashflow statement, or a cashflow report for the client. That’s actually going to detail when incomes do start and stop. So, that starts with your salary and if you’re receiving any bonus or any other compensation while you’re working. And then it shows you in transition. Let’s say next year, you’re retiring, for example, it’ll show your salary stopping, what your estimated income is going to be from let’s say your social security or pension, and how much were projected to take from let’s say your investment portfolio.

Joshua Winterswyk: So year by year over the next, let’s say 25, 30 years, you can see all of the different changes in income projected in your life. And in that way, we’re not guessing of what your income’s going to be in year 2021 or 2024. We can actually visually and calculate how much that income’s going to be. That way we’re more prepared for the rest of your retirement.

Brent Pasqua: And I think also what is critical with those with social security and pensions is if you say, well, I don’t know if I should take it at 63 versus 64. We could do a cross comparison what the withdrawals would look like versus one, versus the other, getting a higher benefit. There’s just so many benefits to being able to see that number and numbers really don’t lie.

Joshua Winterswyk: Yeah. They don’t.

Joshua Winterswyk: And then also, like you just said, visually. A lot of us are visual. I’m a visual learner in a lot of ways. So being able to see it will just help also make those difficult decisions like you were talking about. Like when should I be collecting these incomes and at what time?

Brent Pasqua: And how should people prepare for what their withdrawal strategy may be from these investments in years where income is starting or stopping and so forth.

Matthew Thiel: That’s a great question. You’re going to want to do a comparison on your tax rates. You should hopefully, like we were saying, have some money set aside in savings. So that would be money you already paid taxes on.

Matthew Thiel: But in addition, you’re going to have your retirement funds, which is usually taxable, unless it’s in a Roth. If it’s taxable, it’s taxed at ordinary income rates, and then you got to play with the tax brackets and find out how much you could pull from each bucket before hitting the next bracket and getting taxed more.

Brent Pasqua: It seems like this is another area that is so important, along with expenses, just knowing where your incomes and withdrawals are going to be and where the sources are going to be, and what the taxation is going to be. Just really know what you’re going to have coming in monthly.

Brent Pasqua: The next question, and last one here on the list. Step number three would be is, what is your plan for your 401k or your IRA qualified account? What are some of your options you have with that? You’ve been saving a long time in those accounts, what should you actually do?

Joshua Winterswyk: I think that there’s a couple of just really key questions you have to ask yourself when we’re looking at these investment accounts and your retirement accounts. And one is, is are you going to leave it at the employer, what we call the custodian? Or are you going to roll it over into, let’s say your IRA, that’s one big question you have to answer. Do you want it professionally managed? Or are you going to manage it yourself?

Joshua Winterswyk: Another one is also really important. Your allocation to stocks and bonds, what is going to be that allocation? Have you answered that question or have you looked into it? And then also within the accounts, are you going to use mutual funds or ETFs? What is also going to be, we just talked about it, what’s going to be your withdrawal strategy? And should we be doing any sort of tax strategy, like a Roth conversion too before you retire before you roll it over? And do you have any other company’s stock? There’s all of these questions that need to be answered before we actually make that final decision on what you’re going to do with these retirement accounts.

Brent Pasqua: If you are getting ready to retire, and a majority of your money is in your 401k plan, and you call the custodian, or the 401k plan, and say, “I’m looking at retiring.” Should you just roll your money over with them or into their IRA? Or if they suggest, leave it there? Is that a feasible option?

Matthew Thiel: It depends. It depends on the situation, depends who the company is. If it’s one of the more reputable ones I’d consider it. Most of the time though, what we see with these 401ks is, especially if you’re with a small to mid-size employer, it’s not that great of a plan. So it is going to be more beneficial for you to roll it over to a bigger custodian, like a Charles Schwab or Fidelity. They’re really the only two that are left in the game, but really it’s a fee comparison. Like Josh said, are you going to manage this yourself, or do you want to hire someone to manage it?

Matthew Thiel: We have a job and we’re in business because people hire us to manage money for them. And there’s a reason they do it. And it’s because they want peace of mind in retirement. They don’t want to be worrying about the ups and the downs of the stock market. They don’t want to be glued to CNBC, actively managing their retirement portfolio. They want to go out and actually enjoy their retirement.

Joshua Winterswyk: Yeah, and if you start looking at it like a three point process that we’ve created today to see if you could retire… Which there’s so many other aspects to doing financial planning, but you start to look at this three point process, income, expenses, withdraws. What you have coming in, what you have going out and what you’re going to need from your savings account or your investment accounts.

Joshua Winterswyk: And then what you’re going to need from those investment accounts is going to really determine, how much in stock and bonds versus mutual funds and ETFs, and should you leave it at the custodian? Should you have it professionally managed? Should you do it yourself? And should you do Roth conversions?

Joshua Winterswyk: We do a whole presentation on withdrawal strategies and you can start to really get a good idea based on the amount of money you have, how much you’re going to need and how much you’re going to be able to take from those portfolios.

Brent Pasqua: If you start to look at, and you say, okay, well, I don’t know how to answer those last questions by myself, but you want to pick an advisor. And you want to just know you’re going to the right advisor. Where would you actually look? Because if I wasn’t in the industry, I wouldn’t know where to look. I’d probably go to my bank. That would be my initial thought or somewhere I see on a commercial on TV.

Joshua Winterswyk: Or ask your neighbor.

Brent Pasqua: Yeah. Or ask a family friend or a family member, but I wouldn’t really know really where to go. You guys work in the industry, where would you go?

Matthew Thiel: Just a little joke, you could ask the person at your Thanksgiving dinner who has the nicest car, what they do, right? No, that’s just a joke. I would do some internet research, but what you should ultimately come across is, how is your advisor getting paid? Are they making a commission from a company? Or are you paying the advisor?

Matthew Thiel: I just have gone through the process of purchasing a home. It’s almost done. We’re getting signatures done in the next couple of days. I’ll tell you what, I would rather pay everyone flat fee than this whole commission thing because it’s really hard to tell who has my best interest. So I would personally look for an advisor who you could pay a flat fee to, and that does not charge commission because they are going to be incentivized to sell you the product that gives you the most commission.

Matthew Thiel: There’s a few different organizations out looking to where advisors who don’t charge commissions hang a shingle or do business with. The best is NAPFA. N A P F A. There’s also the Fee-Only Network. And those are two sources for fee-only advisors who don’t accept commissions, who charge flat fees for you to work with.

Brent Pasqua: And I think, we have episodes that we’ve talked a lot about working with fee-only advisors, and it’s truly the only fiduciary standard in the industry because there’s no conflict of interest. We don’t make any commissions or compensation from the back end. It is just true, straightforward. The clients compensate you to do a job.

Brent Pasqua: I think for me, and you could tell me if you would be different, Josh, I have found myself now, as I’ve gotten older, going to more of these representation, designation areas of other industries. If I need a doctor, or if I need any other type of professional, I’m usually going to these boards to find out who’s really certified, who doesn’t have complaints, who’s done a good job. That’s where I want my verification from.

Joshua Winterswyk: Yeah, and I agree. Whenever we’re researching, even if it’s things we need for our business, right? We’re looking at hiring someone that does have our best interest. And that starts with is it experience, is it designation? Are they helping people, do they have good reviews out there, and doing all of that research.

Joshua Winterswyk: And like Matt said, a couple of those associations, if you are looking for an advisor, are really helpful because they give you all of that information about the person and their designations and everything else. So I definitely agree that research is just going to help you even more, having someone on your team that has your best interest is just truly important. And I just think when we’re always talking about this topic is when that question gets brought up of just asking your advisor how they get paid, if there’s any sort of confusion or any… You can’t understand the explanation, we know there’s red flags there, right?

Joshua Winterswyk: And so just that one simple question can really help guide you on picking the right advisor if that’s what you’re looking for.

Brent Pasqua: One thing that I think clarifies it, and it should be helpful for a lot of people about how do I actually know that a fee-only advisor is working in my best interest? Let me just make one point clear. If a fee-only advisor wanted to make more money, they would just go work in a different part of the industry. They’d be a broker, they’d be an insurance agent. They would be an investment advisor that sells insurance.

Brent Pasqua: A fee-only advisor is the least compensated type of advisor in the industry because there’s no commission and commissions just like in real estate or any other type of commission world run wild. And so why would you trust a fee-only advisor? Well, because if that advisor wanted to make more money, they would become a broker. They’d become an insurance agent. They would go do something else in the industry that they can make a ton more money on. Go check out the designations. I think those are just really great tips. And I’m glad that we brought that up.

Brent Pasqua: All right. So let’s get into the last part of the show. Let’s go into RPA recommends, what do you have for us today?

Matthew Thiel: So on Netflix, the new season of The Crown recently came out. It’s great. I’m a big Crown fan. If you haven’t seen it, get caught up on it. It’s really cool. It’s well done. It’s awesome to see the history of the Queen of England. And she has had such a long rule if you really think about it. I believe she took over in the 1940s during the war and has been in charge of the monarchy or the country ever since. This latest season they’re rolling out, it starts in eighties and Princess Diana gets introduced, so it’s kind of cool because it’s modern and we all can remember it. So fun season. I highly recommend it.

Joshua Winterswyk: You started from season one on that show?

Matthew Thiel: Yes.

Joshua Winterswyk: Okay. So it’s worth the watch since season one?

Matthew Thiel: Absolutely. I like it.

Matthew Thiel: There’s some slow parts. My wife’s family’s from Britain, so they love the monarchy. They love the queen. So it’s fun for her.

Joshua Winterswyk: Awesome. I think I’m going to go Netflix too. I haven’t actually finished the series, so I can’t talk about the ending and maybe next episode I will. But Queens Gambit, have you started that Matt?

Matthew Thiel: No, I haven’t. It was between that and The Crown and The Crown was hands down the one to start just because we’re so invested in it already.

Joshua Winterswyk: Sure. And I’m not done with it all, but really good show. And so it’s another one on Netflix. Shout out to Netflix for giving us some good content through these quarantine days. But Queens Gambit, good recommendation for a show if you’re looking to start one.

Brent Pasqua: That’s great. My recommendation for this holiday season would be to get a dumpster. I am all about getting rid of stuff, throwing stuff out. If you’re not using it anymore, just get a dumpster. It should be on everybody’s to do list. Every six months, get a dumpster, get rid of as much stuff that you’re not using as possible because what I had found myself doing over time is you want to clean something out, but all you do is actually organize it and clean it. And you put everything back, but nothing ever really gets thrown out. You’re just really shuffling stuff, right? You’re not actually cleaning. You’re organizing it, but you’re not actually getting rid of things. You want to get rid of stuff.

Brent Pasqua: You’re not using it. Chances are Goodwill doesn’t want that stuff. They’re just going to throw it in the dumpster anyway. If you’re looking and being like, oh, I’m going to take this to Goodwill. There’s probably a good chance that Goodwill’s just going to throw it out. Get yourself a dumpster over the holiday season. Before you put your Christmas decorations back, figure out what stuff you’re going to use next year and what you’re not, and anything else you don’t need for 2021. And let’s go into this 2021 season just really starting fresh. It’s been a tough year for everyone. I think it’s a good year to get rid of a bunch of stuff.

Joshua Winterswyk: My grandpa told me growing up, he said if you don’t touch the item you’re thinking about throwing away or the clothes or anything like that in over a year, to throw it away.

Joshua Winterswyk: And I was always admired how neat his garage was and his house because he lived by that. And that goes along with what you’re saying. So that’s a good rule in my mind. If I haven’t touched it in a year, it’s going out. Whether I’m donating, giving away, whatever, but it needs to be gone.

Brent Pasqua: Yeah. And I told Matt that as he gets into his new house, that if you’re not using it or there’s a question Mark on whether you’re going to use it or not, chances are just get rid of it. Don’t even bring it there because bringing it there just means it’s going to get stacked up and you don’t want to start like that.

Matthew Thiel: Yeah, I’m actually really good at throwing stuff away. But your point goes to another point Brent. It’s a great one for the holiday season. Buy people less stuff, everybody. We don’t need a million gifts at Christmas, give someone something that they really want and they’re going to keep, and they’re not going to throw away in a year.

Brent Pasqua: Completely agree. I love the RPA recommends too. All right. So as we finish off the show, we just want to wish everyone a blessed and happy Thanksgiving. And as advisors, we truly do love helping people and that’s why we do it.

Brent Pasqua: If you would like to schedule an appointment with any of us, please go to rpawealth.wpengine.com and schedule a complimentary consultation. You could also download our ebook on our website. If you’d like more information on the show or the show notes, please go the retirementplanplaybook.com.

Brent Pasqua: As always, we’re thankful for our listeners. We’re thankful for our following and the people who reach out to us. It’s been a tough and crazy year, but there’s still so much to be thankful for. So Happy Thanksgiving everyone.

Joshua Winterswyk: Happy Thanksgiving.

Matthew Thiel: Happy Thanksgiving.

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