The X’s & O’s

As you near retirement, there are several different ages to keep in mind, each of which represents an important landmark in retirement planning. Let’s discuss what those landmarks are, and why each of them is vital to consider and discuss with your financial advisor when planning for your retirement future.

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The Hosts:

Brent Pasqua, Matthew Theal and Joshua Winterswyk




Matthew Theal: Welcome to the Retirement Plan Playbook, I’m Matthew Theal, Financial Advisor with RPA Wealth Management. Joining me, as always, is Joshua Winterswyk. Josh, how are you doing today?

Josh Winterswyk: I’m pumped. It’s really hot outside and I’m ready to do this podcast. Glad I’m inside.

Matthew: Yeah, summer’s definitely here. It feels like today’s one of the first real hot days of the year. And lastly, joining us on today’s podcast, founder of RPA Wealth Management, Brent Pasqua. Brent, what do we have on deck for today’s show?

Brent Pasqua: Well, hi everyone, and today’s my favorite day of the week, I love podcast day and today we’re going to talk about important ages that you need to know as you start to approach retirement.

Matthew: Yeah, this is a really great episode, I’m looking forward to it. For those of you who are at home, it might be one of those ones where you get out a pad of paper and a pen and take some notes and maybe draw out a timeline.

Joshua: What if they’re in the car?

Matthew: Well, that’s why I said at home.

Joshua: Oh, okay.

Matthew: Yeah, yeah. But you’re in the car, you might want to maybe pull off to the side and start taking notes.

Brent: Well, I mean if they’re in traffic, I mean in California you can’t go very far without hitting somebody.

Matthew: Yeah, that’s.

Brent: You’re not going very fast.

Matthew: So if you’re crawling along on the 210 take your iPhone out and use the notes app.

Brent: Yeah, well that’s texting and driving. I think you can get ticket for that.

Matthew: Just tell them you’re taking notes.

Brent: You can use the diction were you just talk into the notes section.

Matthew: That’s true.

Brent: Like can you write and drive at the same time, is that against the law?

Joshua: Yeah, I’d think so.

Matthew: Is eating and driving against the law?

Joshua: I’ve done that before, I hope not.

Matthew: Yeah, I eat and drive every day after work in my car, so I hope not too.

Joshua: Is it pork rinds? Is that what snack is?

Matthew: Yeah.

Brent: I mean it’s the same, you’re on that same schedule every day.

Matthew: Schedules are good. All right, so our first important age is at age 50 and that’s when you can start making catch-up contributions. Josh, tell us about that.

Joshua: Matt, catch-up contribution is a type of retirement contribution that allows people aged 50 or older to make an additional contribution into their 401k accounts in their IRAs. And with 401k accounts, it’s actually a pretty significant increase. This year it’s $6,000 so normally you can contribute, if you’re under the age of 50, $19,000 and if you’re age 50 or over, it increases 6,000 to $25,000 in 401k contributions.

Joshua: For IRAs, if you have an IRA or Roth IRA, you can also contribute an extra thousand dollars that bringing the total contribution, instead of being 6,000 to 7,000, and if you have a simple IRA, you’re allowed to add an additional 3,000 bringing your total to 16,000 worth of contributions.

Matthew: Yeah, that could be some pretty big tax savings if you’re able to sock away essentially $25,000 into your qualified retirement plan.

Joshua: Yeah, and a great way to speed up retirement savings. I think the statistic right now is also under 25% of 401k participants over the age of 50, under 25% is actually taking advantage of that contribution increase, which can be, like we said, a great way to speed up retirement savings and a lot of employers even match that catch-up so you could be leaving some additional employer match off of the table for you.

Brent: I was meeting with a client yesterday who was in his late 50s and he thought the max contribution that he could make into the 401k plan was only 19,000. He wasn’t aware of the $6,000 catch-up and he’s missed most of the last 10 years or so, not being able to make those contributions. I think sometimes the plans can be a little bit confusing. When you log in, sometimes they have a separate area where you have to enter in your contribution to get the catch-up.

Joshua: Yeah, I had a client last week as well that did not know. Now they’re just barely reaching the age, they’re not missing out on it but didn’t know that he can increase and was actually just really, really excited because he’s in the situation where he can take advantage of increasing and afford to do so.

Brent: Yeah, I think it’s an important age.

Joshua: Very.

Matthew: The next age is age 55 and age 59 and a half, and at age 55 that’s when you can begin penalty-free retirement withdrawals. And this rule gets a little complex, so Brent and Josh, feel free to jump in if I’m not covering something. But beginning at age 55 you can go to your employer and request a distribution from your qualified retirement plan. That would be a 401k, 403b, or even 457 plan. And you could take a withdrawal of your money and avoid the 10% penalty. You’ll still have to pay taxes on that money, but you can withdraw it.

Matthew: If you have an IRA, at age 59 and a half, you’re allowed to take penalty-free distributions from your account. Now there’s one thing here that’s kind of interesting and this is if you roll your 401k into an IRA, you lose the ability to take your distribution at age 55. Did I explain that correctly?

Brent: That is right. So we have a couple of clients that are police and firemen that retired at age 55 and you can never be 100% sure if they’re actually going to need that money that’s in those retirement plans. So we left the money inside of the plan since they were only 55, if we rolled it to the IRA, then they’re subject to that 59 and a half rule. We didn’t want them to get locked into a 10% penalty if they were going to withdraw it. So we just let the money sit in their deferred comp plan and we’ve done it with people who have 401k plans. That way they could take the money if they need it and not hit that 10% penalty.

Joshua: Yeah, that’s a really good story because I’ve had a client, we’ve worked on clients together, that have had that situation where they’re below 59 and a half but over 55, and they didn’t know that they could potentially take out money tax free or if they did roll it over, they didn’t know that that would not allow them to take any money out tax free. So just really, really important to understand that rule about your employer plan.

Brent: Yeah, and I think that’s the importance of working with a real fiduciary advisor, an advisor that’s legally and ethically going to do what’s in your best interest because a lot of advisors, or a lot of people out there, if they’re just trying to make a commission they’re not going to wait four or five years to roll that money over, they’re going to take it right away and tell the client to move it, which could end up hurting the client tremendously in the long run.

Joshua: Have you seen that before?

Brent: Oh, absolutely. Absolutely. It happens all the time. People will have the client roll that money right out, they’re not going to wait.

Joshua: Yeah.

Matthew: Yeah, that’s the benefit of working with a fee only advisors, is they’re going to act as a fiduciary, which essentially means they’re going to act in your best interest. One tip for people though here is if you do separate from service from your employer and you have kind of an outside IRA and you would like to retire early, you could roll that outside IRA back into the 401k plan and be able to take that penalty free distribution in between the age of 55 and 59 and a half. So even if you’re thinking, “Hey, I want to retire early. I have this IRA that has a substantial chunk of change,” call it a half a million dollars or more, you could roll that into your employer sponsored retirement plan and still accomplish retiring early.

Joshua: It just seems like that’s a really, really important age and a lot to know through 55 and 59 and a half.

Matthew T.: Yeah.

Brent P.: There’s a lot that can happen there.

Matthew: Very important in time. Our next age is age 62. And 62 is interesting because this is when you qualify for social security and that you can start taking your benefit, though it will be reduced. So I’m going to toss this one to you, Brent, since you’re our social security expert, what’s happening at 62?

Brent: So at age 62 is the age where you can first start to begin collecting your social security. If you start collecting your social security at 62, you will actually only collect 75% of your full retirement age amount. So for example, if let’s say your full retirement age amount, the amount that you would collect at 66 or 67, is $1,000 but you collect at 62, you’re really only going to collect $750 a month. You can change that election if you pay it all back in 12 months, but if not, then you’re locked into that $750 a month or that amount, for the rest of your life. And I think one other important thing with that also is if you’re a spouse collecting at 62 based on the primary earner, your other spouse, then you’re actually only going to collect 35% of their benefit versus half. So it is a very important age to know.

Brent: The other important part about 62 is if you do begin collecting your social security at 62, if you’re going to be working, you can only make $17,640 and if you make more than that, then you’re going to be penalized for collecting your social security early.

Matthew: You said a couple of really interesting things, can you go back and explain what you meant when you said you could reverse your election decision within 12 months, but you have to pay it back. How does that work?

Brent: So let’s say you begin collecting your benefits in January and you’ve been collecting for nine months and the job calls you back and says, “Hey, we want you to come back,” and you realize that it was a good decision to pay back your social security because then you can allow your social security to start rolling up again at 6.25%, you can pay back all of the benefits that you’ve received, in one lump sum check back to social security, and then it kind of acted like it never happened. When you go to retire five years from now, then you can start your benefits and you’ll get that higher benefit amount now for the rest of your life.

Joshua: And that can be beneficial for someone, like you said, who goes back to work, [inaudible 00:10:26] goes back to work as well, expects to make over, you said it was $17,640?

Brent: Right.

Joshua: So instead of accruing a penalty, they can pay back their benefits and then let it roll up essentially.

Brent: Yeah, I’m sure it’s not easy to write an $18,000 check back to social security.

Joshua: No, I wouldn’t want to write them any more money than they already take out of our paychecks.

Brent: No, but you know, if it’s in your best interest longterm, then write that check back.

Joshua: What’s the penalty if you go over the $17,640 income?

Brent: You’ll be penalized $1 for every $2 that you’re receiving from social security. It really makes it not worth collecting your social security because you’re getting penalized on half of it.

Matthew: So that’s a 50% penalty. You’re getting 2000 and you’re now really only getting a thousand.

Brent: Yeah, and at that point, why are you even collecting?

Joshua: And then I guess you would still have to think about taxes with the rest of your income that’s coming in on top of that.

Brent: Yeah, it’s an important age and a lot of people want or think about starting to retire at 62.

Matthew: Yeah, that’s kind of the age where they start to think about it. But I feel like age 65 is a really big age and I feel like most Americans think they’re going to retire at age 65 for some reason, but it’s really kind of, in a way, a meaningless age because all it does is it’s your start for Medicare. Is that correct Josh? What happens at 65?

Joshua: Yeah, so at 65, that’s a start date for Medicare and your initial enrollment period starts for Medicares part A and B. And this is also potentially when you can enroll in the prescription, part D, as well. So once you turn to 65, you’re eligible for Medicare and the supplement plans, most people don’t need a reminder for this, as 12 months before your 65th birthday, your mailbox becomes overloaded with Medicare offers. And I’m sure a lot of other people are reaching out to you because there are services to help you enroll for Medicare and all of that stuff, but just a very important date because there is a penalty if you don’t enroll in part B within a certain timeframe. So very, very important. Healthcare is obviously needed here in America, you want to be enrolled, you want to make sure you have the right coverage. So really that process, even before your 65th birthday, really begins probably six months before that because your initial enrollment period, you want it to be three months before your 65th birthday.

Joshua: So not to make that too confusing, but you know, before your 65th birthday you definitely want to be researching all of the Medicare rules, enrollments, the plans, so you’re very well prepared to be covered once you hit that important date.

Brent: Yeah, and if you’re not collecting your social security and you start your Medicare at 65 and essentially you’re going to be paying for your Medicare quarterly, on a quarterly basis you’ll be writing your check for Medicare. And I think that’s important to know also.

Joshua: And I think they go hand in hand because a lot of people think also, “I’m going to collect my social security,” forget about the medicare costs and they thought they were going to get $2,000 and after now taxes and Medicare, their income comes down a little bit. So just important to plan for.

Brent: Yeah, a lot of people think that they should retire at 65 but I mean, yes, it’s a big time for medical insurance, but it’s not so big for social security.

Joshua: Yeah, yeah, absolutely.

Matthew: Yeah, and that’s a great pivot to our next age, which is actually two different ages. And I think, Brent, you’ll do a great job of explaining why, but these two ages are age 66 and age 67, which is when we learn a new word called full retirement age. Brent, what does that mean? What’s happening then?

Brent: Well, full retirement age is the age in which you can start collecting 100% of your monthly benefit from social security. If you were born from 1943 to 1954, full retirement age is 66 and if you’re born from 1955 to 1959, then your full retirement age is 66 with an increasing amount of months. So if you’re born in 1955 your full retirement age is 66 and two months and if you’re born in 1956 your full retirement ages 66 and four months and it just kind of increases from there.

Brent: But if you’re born from 1960 or later, then full retirement age for you is 67. You will not have reduced monthly benefits if you collect at your full retirement age. That’s when you’re collecting the amount that you’re owed from social security on a monthly basis. You lock in that amount. And I think what is actually key to that is, if you start collecting social security at full retirement age, you can work and make as much money as you want and be collecting your social security benefit and you won’t be penalized.

Joshua: Yeah, that’s an important age, obviously then, if you’re planning to continue to work and when you’re going to start collecting. We see a lot of clients, or I’ve seen a lot of clients, that will collect at full retirement age to pay off debt or to fund their vacations before 70 and then continue to work. So just important to know that when you can earn more than that $17,640 is that full retirement age, so we better know when that age is.

Brent: Yeah, and I think it’s still important to know, if you’re going to continue to work, it does make a ton of sense to continue to delay collecting your social security because you get the 8% increase, but if you do need to and you’re going to work, here’s a good time to have in mind because you’re allowed to keep working and collect that benefit.

Joshua: Where can the listeners find their full retirement age at?

Brent: If they log into they can then go onto the social security website, they’ll be able to find out their full retirement age, and then the full retirement age amount, how did they come up with that number. It’s based on your average index monthly earnings based off your 35 working years. So there’s a lot of facts on there that will be able to help you determine what the amount is that you’re going to receive, but it will be right on there in bold letters so you know.

Joshua: Now do you recommend people looking that up? I feel like some people are surprised when we tell them their full retirement age, if they didn’t already know.

Matthew: Yeah, I mean I don’t see why you wouldn’t want to know how much income you’re going to get from social security. I would probably start looking at it sometime in my forties to help me plan better. I mean anything before 40 it’s kind of pointless, you’re probably still trying to work out your career, but after 40, you should check every five years or so. And then I know it’s actually a big way to find out if your identity’s actually been stolen. To make sure that it’s actually linked with your correct social security number.

Brent: I mean, I’m under 40 and I know what mine is.

Matthew: Well you’re a financial planner, I’d hope you know what yours is.

Brent: Yeah, I got my like five years … No, I think it was like three years ago. I still have it in my drawer.

Joshua: You need to bring it into the office, we want to check it out.

Brent: No, I have it in the office, I’m saving it.

Joshua: Oh, very nice. You should frame it.

Brent: Yeah, I’ll just frame it and put up on my wall.

Joshua: Definitely being the social security expert in the office, like we want that framed up in your office.

Brent: Yeah, I should put it up.

Matthew: Have you ran yourself a social security maximization report?

Brent: Oh yeah, I’ve ran it through the software. I’m always trying to figure out what I need to do to get the max benefit from social security. I think it’s important. I mean if you know, then at least you’re going to get the highest fixed income.

Joshua: I always appreciate the practice what you preach, so that’s awesome to know that you ran your social security report for yourself.

Brent: Hey, you got to know what income limits you need to hit so that you get the maximum amount from social security.

Joshua: And it’s funny because you ran it, Matt, have you ran it for yourself?

Matthew: No, I haven’t.

Joshua: And you look a little older than Brent.

Matthew: Yeah, I going to be retiring in a few years, most likely.

Brent: People are probably thinking social security is probably not going to be around when you guys are that age, but that’s another debate which we can save for another day.

Matthew: I think it will be. We’ll just be collecting at 75.

Joshua: Exactly, yeah.

Brent: We’ll be old dinosaurs.

Joshua: I don’t even know if I’m going to make it to 75, geez.

Matthew: They’re going to attach robot limbs to you and stuff. You’ll be half robot, but you’ll still be there.

Joshua: Those keep me going. I hope so, just better plan for all of that Medicare or medical costs.

Matthew: All right, so moving on, let’s get into our 70s now. Nothing really interesting happens between 68 and 69 but at age 70 that’s when your social security benefit stops increasing. So it makes literally zero sense not to collect social security on your 70th birthday if you haven’t already.

Matthew: I believe only 2% of people actually collect social security at age 70, is that correct?

Joshua: Yeah, that’s correct.

Matthew: So you will get your full benefit amount or essentially, with the 8% increases, at age 70. And funny story, we were hosting a social security workshop one time and there was a guy there who was 74 who had yet to collect and he missed out on four years of checks just because he didn’t want to fill out the paperwork, he said he didn’t need the money.

Brent: Yeah, I remember that.

Matthew: So some free money that he left on the table. So even if you are extremely wealthy and well off, take the money, give it to charity, you’ll probably do a better job at distributing it than the government would.

Joshua: Yeah, take your check. You’ve been putting into it for so many years. It’s yours. And then you get to do with it what you want.

Matthew: Yeah, right. Moving on, five months later, it’s 70 and a half, Joshua, what’s happening?

Joshua: 70 and a half. We get a lot of questions on the 70 and a half and why that age is important. So once you turn age 70 and a half, you must take a mandatory withdrawal from your tax deferred accounts. So giving an example of that, your 401ks, your IRAs, and Roth IRAs are exempt, so we get that question a lot too, on why this is important. But these withdraws are referred to as your required minimum distribution, or RMDs, and the withdrawals can count as incomes and you will be taxed on the withdrawals. So if you failed to take an RMD, you’ll be penalized 50% of your distribution should have been. It is one of the harshest penalties the IRS has.

Brent: I think there’s another fiduciary alert here, right Matthew?

Matthew: There is, and this is something you’ll probably really only get if you’re working with a fee only advisor, but there’s a small percentage of the population who wants to work past the age of 70 and a half and you can actually avoid the RMD if you don’t own the company or your spouse owns the company. And the ownership level is 5%, so if you or your spouse owns 5%, you can’t get get away from the RMD. But if you’re just an employee at a corporation and you want to work past 70 and a half, you could avoid the RMD by keeping all of your money in the employer’s qualified plan.

Brent: Right. So that means that if you’re still working at the company and you have your 401k there, if you leave it in the 401k, not roll it over to the IRA, then you don’t have to take the required minimum distribution, which means if you were still working and it was in the IRA and you took the distribution, now you got your work income plus your distribution income and now you’re paying more in taxes also.

Matthew: Yeah, totally. I mean you could essentially be 75 years old and not taking an RMD if you’re still working.

Brent: Yeah, I mean, and that’s good for you longterm because your money is able to keep compounding and growing and it’s also good for the next generation that might be inheriting that money because that money has been able to continue to grow and compound also.

Matthew: Right, because it compounds tax-free.

Brent: Do you think a lot of either people know that or advisors don’t know that? Because we don’t see a lot of other advisors allowing their clients who are still working to keep their money in the employer plan, they want to get that money out pretty quickly, it seems like.

Matthew: In my opinion, I would say that most advisors probably don’t know this rule. I could be wrong, but I believe I learned this when I was going through the CFP program.

Brent: Yeah.

Matthew: As one of those kind of like stop signs that you hit. Josh, is that when you learned this?

Joshua: Yeah, that’s when I really became aware of that role and how it works for clients and also just talking about fiduciaries and rolling that money out, that could really cause a lot of problems tax wise for clients who are still working, and it just makes a lot of sense potentially to leave it in the employer plan. There was a few other things too that I just kind of had taken notes about this age, but a couple of important things that I’ve had a lot of questions about is that the RMD can actually be taken as a lump sum throughout the year. It can be taken as a monthly payment or quarterly payment, so just clients knowing that they can take the distribution in different ways and then also the money can be reinvested. So we get a lot of questions about, you know, “If I don’t need my RMD, what are those options?” One of the options is to just reinvest the money. It doesn’t necessarily mean that you have to spend it. Is there anything else that you guys want to add to kind of the distribution and the questions about taking that money?

Matthew: Yeah, if you’re extremely well off, you don’t need it, another option is to give it to a charity of your choice. That’s a great one, you avoid actually the tax there on it when you give to charity.

Brent: You get a reduced medicare cost also by doing that.

Matthew: Oh yeah, totally, because [inaudible 00:23:34].

Brent: Yup.

Joshua: And it can even be partially your RMD, right? You don’t have to donate all of it but it could be even a portion. So if your RMD’s $10,000 and you donate five you can still potentially cut down on the taxes.

Brent: Yeah. We have quite a few clients that are giving their required minimum distributions to charity and it helps them tax wise also. And what’s better than that helping to a great cause.

Joshua: Yeah, absolutely.

Matthew: All right. Anything else to add? All right. Well we’ve done a great job really walking the listeners through age 50 to essentially 70 and a half and it leaves kind of a really open ended question. And I know the answer is, it depends, but I’m curious what both of your answers would be. What do you think the best age for someone to retire is, Joshua?

Joshua: It depends, Matt, just like you said. After going through the dates, I mean I always go back and forth with retirement dates and kind of when is a good time, and I know a lot of people think 65, but 65, to me, stands out in my head because then the medical expense worry kind of goes away, right? You can enroll in Medicare. When you’re retiring prior to that you have a lot of issues. But to me I’m very big on it depends. We can plan for any retirement date, we just have to be very mindful of all of the different ages and what to plan for. So if you have the right plan, I think, you know, personally you get to pick that ideal retirement age, but 65 kind of just sticks out in my mind because then the medical cost is kind of fixed and taken care of.

Brent: Yeah. I think the longer that you work, the better, right? Because you’re not going to be taking distributions at a earlier age. So it does help in a sense of we don’t know how long we’re going to live and we want to make sure our money lasts. But then there’s the other side of it, if you know your job’s rough and it’s tough and you’re getting worn down, and you know you can live within your means to retire early and you’re not going to put a big strain on your distributions, I mean the possibility to retire early is there. But retiring later provides a lot of benefits, you delay your social security, you got more money, get your Medicare started, you take distributions at that later age, you allow your money to compound and grow more and it allows you to just possibly live a better lifestyle if that’s what your key goal is.

Brent: But everybody’s goals we know are different. Where I do think is key though is as we’ve already talked about today, there’s a lot of rules here and there’s a lot of rules that can impact you tax wise, investment wise, money wise. It can impact your entire retirement. If you work with the fee only advisor or CFPs, I mean, the rules are there and advisors should know these rules and they should be doing what’s in the client’s best interest, putting the rules on the table when talking about your goals. When a fireman client’s retired, we didn’t say, “Hey, you’re 55 so let’s roll over your money right away,” we knew it made sense for them to leave it in those plans because they may need that money.

Matthew: Yeah, those public service employees, they can retire early and that’s because they’re getting that big state pension that’s close to what they’re making working anyways.

Brent: Yeah, I don’t know why I didn’t become a fireman.

Matthew: Yeah, I mean 55 retirement sounds great.

Brent: That sounds outstanding.

Matthew: But to answer the question, for me, if you’re a public employee and you’re going to get a pension that is very close to your current working income, then you could probably retire anytime after 55 once that pension benefit grows large enough. But for everybody else, you’re going to want to probably have work through the ages of 60 to least 65. Because like Josh was saying, you’re going to want those healthcare costs covered. And even if you get sick of working, you could still kind of quit the full time nine to five grind, but go get a part time job, do something you love doing. There’s no reason to not work.

Brent: Yeah, we see that with a lot of clients.

Matthew: Yeah, absolutely.

Joshua: And I think maybe another important date is at 55 you’re really thinking about work life for the next 10 years and do you follow that passion project or what do you want to do part time at 60 and kind of plan for that instead of being forced in that situation.

Brent: I feel like most people have that passion project, right? Like something you could do on a part time basis, make money, and you’d love doing it.

Joshua: Yeah, and then at that point you have so much experience, you know, in whatever field you are in or if you are part time you could even maybe go back to school and continue education if that was your passion as well or something that you were really [inaudible 00:28:07] about.

Brent: I just think if you carefully plan it out, you know the rules, you know the ages, you know the timelines, then you can successfully live the life you want to live in these next chapters of life.

Matthew: Yeah, I agree, totally. And one thing we see, I know we have quite a few clients who are doctors, engineers, public service employees, and what they might do is quit the full time, stop going in five days a week, become either kind of consultants or per diem employees and maybe just work two, three days a week. Make half of what they were making, which is still great income.

Joshua: Absolutely.

Brent: And planning will give you that clarity to be able to do that. The earlier you start, you start doing that.

Matthew: Great point. Absolutely. Josh, what’s our kind of special topic for today?

Joshua: Well, I talked about it being hot now, we’re kind of in the middle of summer and I know that me, Matt, and Brent always talk about our summer vacation plan, so I was just curious to know what you guys, I know it’s important to you to take that summer vacation and you guys really enjoy it, wanted to know what you guys have on the plans for the summer.

Brent: Are you guys ready for a break from me for a week?

Joshua: Yes.

Brent: Matthew?

Matthew: Yeah. Absolutely.

Joshua: You know what though? I say that just to make you smile, but you’re going to be missed and I’m sure I’ll be texting you while you’re gone, even though I probably shouldn’t.

Matthew: Actually Brent, before you answer about your summer vacation plans, let’s take an over under, on the amount of times Brent, texts or calls us about work related items.

Brent: Yeah, I’m just a big service guy. I want to make sure everything is taken care of when I’m gone and if a client reaches out or if there’s something going on, I always want to make sure it gets handled.

Joshua: Do you think it’s a little bit though, like he misses us? So it’s like another way to interact with us?

Brent: Nah, it’s not about you guys.

Matthew: Well I know a lot of our clients are listeners, so there’ll be glad to know that you’re taking breaks from your vacation to help them out.

Brent: Yeah, I got to make sure they’re taken care of.

Matthew: Where are you going?

Brent: So we’re going to go to Hawaii. We’ve been to Maui for the last couple of years, this will be our third year going there and very different than you, Matt, you’re jumping around on different vacation destinations. But for us, we’re going the same place, same area for three years in a row. And the reason why is because I am traveling with a three year old and a five year old. We kind of have our routine now for this vacation. We have everything lined up the way that we like it and we’ve learned from the last couple of times that we went, so we are excited to go, we are excited to take a break, but we’re a little bit less nervous maybe traveling this time because we’ve been there twice already and so it makes it a little bit easy to plan for. But we are excited to head over and just relax and sit by the pool for a while.

Matthew: Yeah, I mean, we saw your kids in here the other day and they’re really excited about the trip, so that’s really cool to see them enthusiastic about it.

Brent: Yeah. They can’t stop talking about it. Everyday they’re asking how many more days and is today the day and they’re just very excited to go. Which makes me happy.

Joshua: That’s awesome. Yeah, I agree. They came in here saying, “We’re going to Hawaii.” That was like one of the first things that they had mentioned. Are you guys more spending all your time on the beach or at the pool?

Brent: They like the pool. They don’t like the beach right now. I think they’re scared of the fish still and they don’t like the sand as much, so I don’t know. I mean, every year they’re a year older when we go. So maybe once we get there they’ll be a little bit different. But they said so far they just want to be by the pool.

Matthew: When I was their age, I was a big ocean guy. I liked the sand. I like playing in the waves. But now that I’ve gotten older, I’m a big pool guy. I’m sorry but I don’t want to get dirty.

Brent: I’m okay being by the pool, I’d rather not have everything full of sand and the mess, but I’ll do whatever they want to do because that’s what I live for.

Matthew: You got be a good [inaudible 00:31:55]. See, if I had kids, I’d probably just hire one of the resort babysitters.

Joshua: Oh geez. It’s surprising that you say that.

Matthew: I’d be at the adults only pool sipping cocktails.

Brent: Yeah. That’s not going to happen for me.

Joshua: Matt, what about your summer vacation plans? What are those?

Matthew: So we’re going on a pretty big trip this year. I think it’s going to be almost 10 days, but I am going to Switzerland and then to Paris, France. So in Switzerland, what we’re going to do is fly into Zurich and we’re going to use the Swiss rail system and essentially travel by train across the country, stopping in two or three different cities. And then after that we’re going to rent a car and drive to Beaujolais, which is in France, it’s a big wine region, and drink some red wine. And then we’re going to take the train from Leone, which is the closest city to Beaujolais, to Paris and hang out in Paris for a few days.

Brent: That sounds nice.

Joshua: That sounds like an awesome trip and you guys already have it all mapped out? Itineraries done?

Matthew: We have a lot of it mapped out, right now we’re on the restaurant phase where we’re trying to pick exactly where we’re going to eat. We’re also taking French lessons right now.

Joshua: Can you say something for us in French?

Matthew: Too much pressure right now.

Brent: That is something you would do though.

Matthew: Well, you need to learn how to kind of speak the language a little bit. And the French, they’re not as open to English speaking as other European countries are. And we want to be as polite as possible.

Brent: That’s good.

Joshua: Very nice. And You and your wife love Europe. How many times, I know you’ve been a few times at least?

Matthew: Yeah, this is, I think, going to be our fourth time going, but it’s going to be our first time going by ourselves. So we’ve been lucky enough that my parents are able to still travel with us, so they’ve taken us three times.

Brent: Oh, very cool.

Matthew: Yeah.

Brent: Are you kind of nervous or excited?

Matthew: No, I’m ready to go. I’m excited.

Brent: That it’s your first time alone with your wife traveling Europe?

Matthew: No. Yeah, honestly I love my parents, but you know, they’re on a different vacation path that I’m on. They’re more into the tours and I’m kind of more into walking and a little faster paced vacation.

Brent: Wine.

Matthew: Yeah, wine.

Brent: So am I going to see you in between vacations?

Matthew: You know, we might cross paths for a few days, but maybe we won’t talk to each other.

Brent: Okay. So we’ll be on like three week span.

Matthew: Yeah, that’d be nice. Nice break.

Joshua: I’ll man the fort.

Matthew: There you go.

Joshua: You guys can enjoy your vacations.

Matthew: Yeah. So Josh, where are you going?

Joshua: I just took my honeymoon. I went to Cabo San Lucas and that was an awesome time. I love going down to Cabo, we’ve been there a few times and just eating shrimp tacos and having a margarita by the pool is what me and my new wife love to do. So we had a few days down there to enjoy that. And just wanted to share one of the really cool places that we went to, we went to this place called Flora Farms in Cabo. It’s actually in Los Cabos and it’s an organic farm that has livestock and it also has fruits and vegetables and everything that the restaurant serves is grown on the actual farm. They even brew their own beer from the ingredients from the farm. And just a really, really cool spot. So if you’re ever in Los Cabos or Cabo San Lucas, checkout Flora Farms. Had a great time there, they even have shops and they do tours of the whole farm. So that’s what I did just a few weeks ago. That was my summer vacation.

Brent: That’s neat.

Matthew: Yeah, that’s really cool. Do you have any other trips planned or anything else this year?

Joshua: Yeah, I knew you were going to ask me that. So me and my wife, we’re also going to travel to Europe for the first time, but that’s not until October. So I know it’s not my summer vacation, but we’re going to Europe for the first time and we’re going to try to see a Manchester United soccer match, my favorite team, and then hop on over to Spain and see a few cities in Spain. So we’re in the process of planning all of that out and really excited to go to Europe for the first time. I’m going to have to sit down with you a little bit more and get some more tips since you’re a little bit more seasoned than I am.

Brent: That’s exciting because everyone here gets a nice break and I think that’s so important with that work life balance.

Matthew: Yeah, it is. And it’s one of the things that I think planning out these trips, whether you’re blessed to do it once a year or twice a year, three times a year, but it really helps you keep refreshed and it’s one of those things where if you’re going on your dream retirement trips while you’re still working, that makes a lot of sense. It doesn’t make a lot of sense to take that big trip the day you retire, take it while you’re working and you have income.

Brent: Yeah, I struggled with taking vacations for a long time, just not wanting to take the time away from work, but you know, as I got a little bit older, it’s such an important part of life.

Matthew: It is. And look how happy you are.

Brent: Yeah.

Joshua: And it’s unique that I think that we all value, that’s something that we really value and put time and resources into is planning these vacations and it means a lot to all three of us. It’s kind of fun to share our vacations and stories together because we know it all.

Brent: And we budget for them all year.

Joshua: Yeah and we talk about that. About how we’re budgeting for our vacation for the year.

Matthew: Anything else left?

Brent: No, I think we’re good today.

Joshua: No. Good podcast.

Brent: Good show Matthew.

Matthew: Yeah. Thank you, thank you. Great show boys. Let’s close it.

Matthew: Thank you for joining us today on the Retirement Plan Playbook. If you’re enjoying the show, please rate it and leave a review on the Apple Podcast page. And for more information about the podcast, including the show notes, please go to and click on the podcast tab. Thank you and have a great day.

Joshua: Thank you.

Brent: Thank you, guys.

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