If you are thinking about retiring in the next few years you’re probably wondering what the best tools are to help you plan. Finding the right retirement planning software can not only help you plan retirement but help put your mind at ease so that you can Rock Retirement!

One listener asks my opinion on the best retirement software to use. If you are curious about my answer you’ll press play. 

In this episode, you’ll also hear about the books I read in March, an interview with Steven Chen from the New Retirement Calculator, and learn the benefits of creating horizontal relationships.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

BOOK REVIEWS

• [1:30] Books I read in March

LISTENER QUESTIONS

• [5:30] Which retirement software should I use?
• [11:49] On using dividend investing to fund retirement
• [20:19] On using indexed annuities with downside protection
• [24:04] A recommendation for my wife, Shawna
• [24:55] Looking for a financial planner that is a retirement consultant 

STEVEN CHEN INTERVIEW ON THE NEW RETIREMENT CALCULATOR

• [26:45] What New Retirement Calculator users think about
• [33:06] Planning for the future
• [38:36] What’s new with the New Retirement Calculator

BRING IT ON

• [41:55] The benefits of creating horizontal relationships

TODAY’S SMART SPRINT SEGMENT

• [47:10] Revisit your allocation plan

Resources Mentioned In This Episode

NAPFA

Garrett Planning Network

New Retirement Calculator

Money Guide Pro Elite

Financeware

BOOK - The Courage to Be Disliked by Ichiro Kishimi

BOOK - Make Your Bed by William McCraven

BOOK - Sea Stories by William McCraven

BOOK - Build by Tony Fadell

BOOK - Top Five Regrets of the Dying by Bonnie Ware

Morningstar’s The Long View Podcast - long-view.simplecast.com/episodes/roger-whitney-5XAMXqqD">Retirement Planning Is Not Financial Planning

answer-man.ck.page/4f90fb35ac">LiveWithRoger.com - Register for the webinar on May 11, 2023 to discover the 4 Phases of a Great Retirement Plan

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

We continue our focus on you this month as we dive deeper into listener questions. Today we have a range of questions from various aspects of the retirement process.

If you have a question you want to be answered, head on over to RogerWhitney.com/AskRoger. You can type in a question or leave an audio recording–those are my favorites!

Listen in to learn how to work through the decumulation phase of retirement by developing a withdrawal plan that fits your needs. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

LISTENER QUESTIONS

• [3:32] What are the advantages or disadvantages to using bond funds to create an income floor?
• [9:21] How do I report a QCD on my income tax return?
• [14:50] Can you contribute to a Roth IRA with only a 1099 income?
• [16:00] On doing a series on grey divorce in the future
• [17:14] Where to pull money from first in the decumulation phase
• [23:04] Where to put your passwords

BRING IT ON

• [28:20] Are we ever enough?

TODAY’S SMART SPRINT SEGMENT

• [31:01] Confirm that your spouse knows your passwords

Resources Mentioned In This Episode

Everplans

1Pass

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

All month long, I’ll be answering fantastic questions from listeners like you. Today, we’ll explore the steps you should take if you’re in your 50s and get laid off. 

Have you ever thought about what you would do in this situation? Listen in to find out. 

In the Bring It On segment, Dr. Bobby Dubois helps us understand the effects of stress and what we can do to combat stress so that we can live longer, healthier lives. You won’t want to miss his four exercises for working through everyday stressors.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [3:38] Who is listening

LISTENER QUESTIONS

• [6:38] In my fifties and laid off. What should I do?
• [17:08] Is there a widows group within the Rock Retirement Club?
• [18:11] What can retirees do to protect themselves from the effects of the government reaching the debt ceiling?

BRING IT ON WITH DR. BOBBY DUBOIS

• [25:05] Another skill to keep you healthy 
• [27:45] Defining mind-body activities
• [29:22] Defining stress
• [34:22] Stress affects many areas of our lives
• [38:35] What you can do to combat stress in your life
• [44:20] How to try stress relieving exercises to see if they work for you

TODAY’S SMART SPRINT SEGMENT

• [46:40] Assess your situation and do some basic triage

Resources Mentioned In This Episode

Wings for Widows

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Reimagining life after widowhood can be challenging. In the beginning, it may seem like something that is impossible to imagine. Even if life seems insurmountable at the beginning, it is crucial to remember that someday you will be able to enjoy life again. Just not yet. Yet is an important word. Yet helps you understand that things will not always be as they are now. Today you’ll learn how to change your mindset from I can’t do this to I can’t do this yet. 

On this episode of Retirement Answer Man, you’ll hear wisdom from those who have traveled this same journey. They open up and share their financial and nonfinancial experiences. You’ll hear what has helped and what hasn’t, their challenges and triumphs, and how they have learned to power through and begin to create new dreams.

Listen in to hear these brave widows share their stories so you can understand that a new life after widowhood isn’t impossible. The power of yet can change your mindset and help you rebuild your dreams. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WIDOWS LIVING A GREAT LIFE

• [3:20] Emma has had difficulty navigating the nonfinancial side of widowhood
• [9:30] It has taken time to reimagine her goals
• [11:20] Insights from the financial side
• [17:03] Mary needed time to grieve
• [23:00] How Mary managed the project
• [25:12] The nonfinancial side of widowhood
• [28:20] The financial side of widowhood
• [35:15] A new widow’s perspective

TODAY’S SMART SPRINT SEGMENT

• [42:40] Think about how you can use the word yet to envision what is yet to come

Resources Mentioned In This Episode

BOOK - Getting Grit by Caroline Miller

Everplans

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Nobody wants to face life as a widow or widower. However, it is an unfortunate reality that many must face. Successfully navigating widowhood could be easier if you could prepare yourself in advance. In this Widowed in Retirement series, we aim to do just that. 

Today you’ll learn how you can start life again on your own. Mark Trautman joins me again to discuss his experience moving forward after the death of your spouse. He touches on prioritizing actions to take, setting up a summarized retirement plan, and rebuilding your life as a single person. 

While we didn’t have time for Listener Questions today, we have a bonus interview with Chris Bentley from Wings for Widows as well as a chat with Lori Mage in our Bring It On segment.

Listen in to learn what you can do to rebuild your life and begin again.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT A CHAT WITH MARK TRAUTMAN

• [5:16] Our time is finite - make use of it
• [7:42] Could people have reacted better?
• [10:55] What were short-term actions
• [18:02] A retirement plan summary document
• [20:39] Going forward

A CHAT WITH CHRIS BENTLEY FROM WINGS FOR WIDOWS

• [23:04] How he decided to create Wings for Widows
• [31:52] Working with the financially illiterate 
• [38:02] How to plan for widowhood

BRING IT ON WITH LORI MAGE

• [41:02] On relationships
• [43:33] What Lori did to build a relationship with herself

TODAY’S SMART SPRINT SEGMENT

• [50:30] When you mess up say it was a mis-take

Resources Mentioned In This Episode

Lori Mage

Heroic App

Wings for Widows

Foundation for Financial Planning

BOOK - The Leadership Challenge by James Kouzes

BOOK - After the Death of Your Spouse by Mike Piper

BOOK - Option B by Sheryl Sandberg

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

If you are married, chances are you or your spouse will have to suffer through widowhood. The Widowed in Retirement series aims to help you navigate this difficult transition as best you can. Today, Mark Trautman joins me again to discuss how to work through the huge financial changes that result from losing a spouse. 

There are myriad financial considerations to be aware of during this change, so this may be an episode that you want to bookmark to refer back to later or send to a friend in need. Press play to listen.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [3:26] A common myth of widowhood
• [5:11] What changes occur when you go from two to one
• [9:27] Expenses don’t change
• [16:44] Creating a new financial plan
• [20:20] Tax planning
• [25:25] Social Security benefits

LISTENER QUESTIONS

• [36:55] A 59 ½ IRA withdrawal rule question
• [38:52] How to calculate the 5-year rule for a Roth IRA
• [40:27] How to handle the cash bucket in a down market 
• [45:03] Healthcare before Medicare

BRING IT ON WITH MARK ROSS

• [49:11] What is passion?
• [51:23] How to explore your passions
• [55:15] Building boundaries around your passions so they don’t become work

TODAY’S SMART SPRINT SEGMENT

• [58:45] Put dabble on your calendar

Resources Mentioned In This Episode

BOOK - After the Death of Your Spouse by Mike Piper

BOOK - Taking Stock by Jordan Grumet

BOOK - AARP Checklist for My Family by Sally Balche Hurme

BOOK - So Good They Can’t Ignore You by Cal Newport

BOOK - How to Think Like Leonardo Da Vinci by Michael Gelb

Everplans

Episode 477 - Navigating Life Changes

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Even though it is difficult to think about it, at some point, those of us who are married will have to think about one of you transitioning from two to one. 

This week we’re exploring the nonfinancial impacts of this transition with someone who has walked this journey. Rock Retirement Club member, Mark Trautman shares his personal journey through his life-changing experience. 

Mark shares the challenges and the tools that have helped him get through this heartbreaking part of his life so that he can move forward and rock retirement on his own. 

After the main segment, you’ll hear our listener questions and then we’ll Bring It On with Dr. Bobby Dubois. Dr. Bobby will help us understand why sleep is so important and what we can do to improve the quality of our sleep. Don’t miss out on this important episode. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [3:27] The more open you are the more you can deal
• [7:58] What you lose when you lose a spouse
• [11:38] Redefining goals after widowhood
• [16:23] Dealing with grief
• [21:33] Building community 

LISTENER QUESTIONS

• [31:20] My response to a scathing review on Retirement Plan Live
• [34:54] Another Retirement Plan Live review
• [37:28] How to replenish funds 
• [44:48] A question about Rosie’s HELOC loan
• [46:31] Insight on huzzah!

BRING IT ON WITH DR. BOBBY DUBOIS

• [48:41] Why is sleep so important
• [51:52] How to improve sleep
• [58:33] How to get to sleep
• [1:04:30] Dealing with chronic pain and sleep

TODAY’S SMART SPRINT SEGMENT

• [1:14:59] Use Bobby’s tips to experiment with your sleep

Resources Mentioned In This Episode

Examine.com

BOOK - Why We Sleep by Matthew Walker

Leeds sleep evaluation questionnaire

BOOK - Taking Stock by Jordan Grumet

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

If you have been listening to this show for a while, chances are you already know how to rock your retirement. However, this can all change with the loss of a spouse. All of your best-laid plans change in an instant. That’s why this month we are focusing on going from two to one. 

Learn how to navigate your mindset–transition from this sucks, to how I will work through this, to having a great life. Press play to listen.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [5:47] Announcements
• [6:44] Books I read in February

LISTENER QUESTIONS

• [11:46] Roth conversions and taxes
• [17:31] Roth conversions or capital gains?
• [23:10] How to create a paycheck between ages 62-72

BRING IT ON WITH KEVIN LYLES

• [29:12] Finding meaning and purpose in retirement 
• [38:52] Create a mission statement

TODAY’S SMART SPRINT SEGMENT

• [41:05] Think about your mindset

Resources Mentioned In This Episode

Episode 310 - The Pie Cake

Andy Panko

BOOK - Traction by Gino Wickman

BOOK - Be 2.0 by Jim Collins

BOOK - Rethinking Positive Thinking by Gabrielle Oettingen

TV SERIES - SAS Rogue Heroes on MGM streaming

TV SERIES - Shrinking on Apple TV

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Life is what happens to us when we are busy making other plans. This is especially true during transitions. As I transition to adding a new segment to this show, it’s gotten a bit messy. It’s been a bumpy road and not everything has gone according to plan.

Listen in to hear how this applies to retirement planning. While you’re at it you’ll hear how to decide whether to rebalance a portfolio and how to nurture relationships. Press play so that you can start rocking retirement.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [0:39] Life is happening now

LISTENER QUESTIONS

• [5:35] Should I rebalance now?
• [11:52] Selling rental properties
• [16:13] Do I take the pension or the lump sum?

BRING IT ON WITH NICK KENNEDY

• [21:28] The 4 quadrants of relational nutrients
• [29:29] Take action and be present

TODAY’S SMART SPRINT SEGMENT

• [31:50] Get the relational nutrient card and practice it

Resources Mentioned In This Episode

Pension or Lump Sum on YouTube

BOOK - People Fuel by John Townsend

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Do you ever feel like a curmudgeon when you hear about new technology? Listen in to find out what has me putting on my sourpuss hat this week.

We have a variety of interesting listener questions this week. Listen in to learn about purchasing brokerage CDs and CDs on the secondary market, how to decide whether to take the pension or the lump sum, and how to determine whether to become a 1099 contractor rather than a W2 employee.

In the Bring It On segment you’ll hear about what work looks like in retirement from Mark Ross. Spoiler alert: you can work in retirement!

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

LISTENER QUESTIONS

• [4:06] Brokerage CDs and CDs on the secondary market
• [9:34] How to decide to take the pension or the lump sum
• [14:38] What does huzzah mean?
• [15:18] How to determine whether to become a 1099 contractor rather than a W2 employee

BRING IT ON WITH MARK ROSS

• [22:31] What work looks like in retirement
• [24:45] How to determine whether you should work in retirement
• [28:49] 3 categories of work
• [31:00] What you can do to help you determine your work in retirement

TODAY’S SMART SPRINT SEGMENT

• [31:53] Download the Relational Nutrient Card

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Recently, we had the finale of the Retirement Plan Live series, so I want to share my observations on what we can all learn from Rosie’s experience. There was a lot to unpack from Rosie’s plan. Before we get to the Listener Questions segment, I’ll share my thoughts with you. 

Make sure to stick around after the listener questions to hear the Bring It On segment with Dr. Bobby Dubois. You’ll hear about building energy in retirement through your emotional, cognitive, and social well-being. Learn how to use these powerful ways to live longer and stay healthier in retirement.

My observations on the latest Retirement Plan LIve with Rosie

Rosie recently shared her retirement plan with all of us in our Retirement Plan Live series. This is a very public way to plan for retirement, so she was brave to put herself out there to share her situation openly. Unfortunately, Rosie’s current trajectory is not feasible and she and her husband are on track to run out of money within ten years. 

Coming to this understanding while live in front of 1000+ people is incredibly difficult, but now she can correct course to get back on track. This wasn’t only a learning experience for Rosie, it was for me as well. Here are a few of my takeaways from this experience. 

A plan must be feasible and resilient

Rosie retired in mid-2021 in the middle of a bull market when interest rates were zero. She was working with a financial planner, so there were projections that showed her plan was feasible. However, there was nothing done to make that plan resilient in the face of challenging circumstances. 

Her withdrawal rate did not match up with the assets they have and nothing was done to compensate when the sequence of return risk reared its ugly head. Without resiliency designed into the plan, it fell apart quickly. They are now in a position where they have to make some tough decisions.

A feasible plan is like a lit candle. It can burn; however, a gentle breeze will blow it out. Having a resilient plan is like having a fire. When a wind comes by it won’t go out–it may even gain more strength with the added fuel.

An accumulation investment strategy doesn’t work in retirement

Going into retirement Rosie and Dwayne were invested in 75% equities. Since they were already constrained as they approached retirement, they needed to be a bit more conservative. Their monthly systematic withdrawals came directly from selling those equities and they had no decumulation strategy. The result is that they are now underfunded.

There is a difference between a financial advisor and a retirement planner

Even though Rosie and Dwayne were using a certified financial planner, they still got blown off course. A financial advisor is similar to a general practitioner in medicine. They are not retirement specialists, so they may not understand how to build resiliency into a retirement plan. A retirement planner goes deeper on how to create a decumulation plan that has resiliency built in. They also understand that selling equities to meet withdrawals doesn’t work in a constrained retirement situation. 

Communication is crucial

It was clear that there were communication issues between Rosie and her advisor. She assumed there was safe money set aside somewhere while there wasn’t. This incongruence between what she thought and what her advisor understood has also contributed to their current situation. 

While Rosie had conversations with her advisor, they were surface-level, and she didn’t pose follow-up questions to help improve her understanding of the situation. She didn’t understand the decumulation plan to create her retirement paycheck. This vital detail was missing. One year into retirement and her retirement plan fell apart. 

They didn’t analyze the opportunities to increase their social capital 

Both Rosie and Dwayne took Social Security early so that they could try and preserve their assets as long as possible. This was always what they had planned, so they never considered anything else. Had they carefully considered a different strategy for filing for Social Security, it may have made a difference in their trajectory. 

Have you listened to the latest Retirement Plan Live series? Did you attend the results webinar? If you missed it check out the replay. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [2:05] My observations from the Retirement Plan Live webinar

LISTENER QUESTIONS

• [11:40] Is deferred compensation considered earned income during the distribution period?
• [14:17] When can someone collect Social Security survivor benefits?
• [17:13] On setting aside a 5-year fund as the basis to building the pie cake
• [25:51] On spending psychology during the go-go years

BRING IT ON 

• [30:43] On building energy in retirement through emotional, cognitive, and social well being
• [32:15] Your sleep, social, mind-body connection, and exposure to extreme climate can greatly affect your well-being in retirement
• [35:55] Why is sleep so important?
• [39:10] How social interaction affects your health
• [42:02] What do we mean by mind-body connection?
• [43:03] How does exposure help improve energy?

TODAY’S SMART SPRINT SEGMENT

• [47:33] Choose one thing to start doing to improve your energy

Resources Mentioned In This Episode

The Retirement Plan Live replay

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

I’m excited about our newest segment, Bring It On with Kevin Lyles. The Bring It On segment will discuss mindset and other non-financial aspects of retirement. 

In addition to our newest segment, today you’ll hear about the books I read in January and listener questions. 

Learn how to calculate a decreased benefit when retiring early, which accounts to draw from to minimize taxes, how to manage 401Ks through a company transition, and what to consider when choosing a financial advisor. 

Join me for this episode of Retirement Answer Man to explore the latest issues in retirement and beyond so that you can get ready to rock retirement. 

The latest books I’ve been reading

In January I had the opportunity to finish reading four books. Most are nonfiction, but I threw a fiction book in for good measure.

How to Think Like a Roman Emperor by Donald Robertson - This book is on stoicism and discusses the qualms we have when contemplating our own death and aging. The fear of death and aging can make us fearful, so by bringing that touchy subject out of the shadows, we can embrace the inevitable and live more fully in the moment.

Never Finished by David Goggins - Since this book was written by a Navy SEAL, it has some salty language. However, David is a living example of what you people can endure and do. We have capabilities far beyond what we can imagine.

The Boys from Biloxi by John Grisham - John Grisham writes formulaic legal thrillers, but his formula works. I enjoyed the history and background that he included of Biloxi, Mississippi.

The Comfort Crisis by Michael Easter - This is another book about getting outside your comfort zone. Michael Easter completed a monthlong hunt in the Arctic–far outside of his comfort zone. This book was my favorite this month–it will challenge your thinking. Michael explores the idea of stretching yourself by doing something you think may not be possible. 

If you have any book recommendations for me reply to the 6-Shot Saturday newsletter. 

Why mindset is so important

Mindset is the attitude that you bring to your life and retirement. It drives how you respond to the challenges you face when you’re transitioning and living your life. The mindset you bring to those challenges will make all the difference in the world.

There is now more data regarding mindset with the science of positive psychology. Science shows that mindset matters and affects not only how you feel but outcomes. People who seek out the bad see more bad things, those who look for the good in the world see things in a more positive light. 

What to expect from the Bring It On segment

In our newest nonfinancial segment, we’ll discuss several nonfinancial issues related to retirement: dealing with boredom, losing status, mindset, attitude, aging, identity, gratitude and so much more. 

Think about your own attitude about retirement and aging. What are the top five words that come to your mind? Discuss your thoughts with your loved ones. Could your thoughts be improved? Do you need to change your mindset?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [1:06] The books I’ve been reading

LISTENER QUESTIONS

• [7:42] Addressing feedback on the show
• [9:32] Feedback from the past Retirement Plan Live
• [10:36] How to calculate a decreased benefit when retiring early
• [15:04] Which accounts to draw from to minimize taxes
• [20:42] How to manage 401Ks through a company transition
• [22:03] What to think about when choosing a financial advisor

BRING IT ON WITH KEVIN LYLES

• [27:15] Why mindset is so important
• [32:04] How important a social network is

TODAY’S SMART SPRINT SEGMENT

• [35:50] Write down what comes to mind when you think of aging and death

Resources Mentioned In This Episode

BOOK - Flourish by Martin Seligman

BOOK - How to Think Like a Roman Emperor by Donald Robertson

BOOK - Never Finished by David Goggins

BOOK - The Boys from Biloxi by John Grisham

BOOK - The Comfort Crisis by Michael Easter

GoRuck.com

Social Security Detailed Calculator

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Retirement can be tricky. There are so many unknowns, so preparing yourself mentally can be a challenge. 

Mental toughness is the ability to remain positive and proactive in the most adverse situations. Our Retirement Plan Live volunteer, Rosie, is having to rely on mental toughness to stay on target through an extra challenging early retirement.

Join Rosie and me today as we discuss the impact that the bear market had on her finances at the start of her retirement. 

Rosie is trying to get her retirement back on track

Rosie and her husband Dwayne didn’t retire in the best circumstances. Inflation and market fluctuations haven’t been on their side. This sequence of returns at the beginning of their retirement is not faring well for their portfolio. Now they are trying to assess whether they are on a feasible path or whether they’ll need to make some adjustments. 

Simply by walking through this process they are already being proactive. They are assessing the damage and seeing how they can shape a plan for the future to get back on track. 

It’s challenging to enjoy the go-go years without a safety net

While Rosie is more risk-averse, her husband Dwayne enjoys researching and investing in individual stocks. He uses about 10% of their total savings to play around in the market investing in his favorite publicly traded companies. 

Rosie estimates that about 75% of their total portfolio is in stocks and this makes her feel a bit anxious especially since their portfolio is down about 20% from last year. 

She would like to be enjoying her go-go years, however, without a healthy cash reserve in place, or a long-term care plan, she doesn’t have the security in place to let loose and rock retirement.

Without a cash bucket set up, their $8,500 per month is coming from a systematic selling of their investments, but she’s not sure where they should go from here. 

Don’t miss the culmination of the past four episodes

If your retirement isn’t going to plan, it is important to acknowledge where you are now so that you can mitigate the damages and reset your course. You can’t simply ignore the situation and wait for someone to tell you that everything is going to be okay. You’ll need to understand the nuances of your financial situation to determine the best way forward. 

answer-man.ck.page/40a96a000e">Join us on February 2 at 7 pm CST for the grand finale of this year’s Retirement Plan Live. I’ll walk Rosie through her retirement plan and we’ll determine whether or not it is feasible. Then we’ll look for risks and opportunities. As a participant, you’ll have the opportunity to ask questions and see how the process plays out. 

After the live meetup, consider joining the Rock Retirement Club. The Club was created to give new retirees a solid framework and trusted tools to use to build a feasible, resilient retirement plan that will give members the confidence to rock retirement. In addition, RRC members have created an amazing, inviting community filled with people on the same journey. Learn more by joining the live meetup. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

RETIREMENT PLAN LIVE

• [4:47] Rosie’s questions
• [7:12] Understanding Rosie’s annuity
• [16:52] Understanding the software we use
• [18:32] Understanding the sequence of returns risk
• [27:07] Rosie’s experience with advisors

LISTENER QUESTIONS

• [36:36] Do you calculate using tax-deferred dollars to create a paycheck in retirement?
• [44:32] Using a draw-down strategy for a 401K
• [47:57] How to get a better interest rate from cash

TODAY’S SMART SPRINT SEGMENT

• [50:40] Reassess your trajectory to achieving your goals

Resources Mentioned In This Episode

Join the live meetup on February 2 at answer-man.ck.page/40a96a000e">LiveWithRoger.com

Money Guide Pro Elite retirement tool

New Retirement Calculator

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Take a breath, check yourself, and then observe where things are at. 

That’s what Rosie and I are doing on this episode of Retirement Plan Live.

After the last episode in which Rosie planned out all her hopes and dreams for retirement, today we’re taking a look at her financial picture. We’ll walk through the sources of her social, human, and financial capital to see where she and her husband stand financially. 

Listen in and create your own plan as we go. Make sure to sign up for 6-Shot Saturday to ensure that you get all the worksheets to work through your own retirement plan with me and Rosie.

Sign up for the grand finale on Feb 2, 2023

Have you signed up for the live webinar on February 2? This will be the grand finale to this year’s Retirement Plan Live. We’ll see if Rosie’s dream retirement is feasible with her resources. We’ll also identify potential risks and opportunities that she should watch out for. Head on over to LiveWithRoger to register. 

How will Rosie pay for those retirement dreams?

We can never know anything for certain, about our financial future, but we can build a solid framework to build up our confidence in our plan. Last week, Rosie laid out her retirement goals and as she did so she tied those into her values. Our goals are really just a representation of our values. 

As we walk through Rosie’s finances we analyze three different types of capital: social, human, and financial. Social capital includes guaranteed payment sources. The most familiar example of social capital is Social Security. Rosie and Dwayne don’t have any pensions, but Rosie is collecting $2200 per month from Social Security. Soon Dwayne will also receive $1800 per month from Social Security as well. In about six years they will begin to receive a small annuity payment. 

Dwayne is the one providing human capital with his flexible part-time work online. This work contributes between $15-20,000 per year. He plans to continue working part-time for about six more years. 

Their financial capital includes $30,000 in after-tax assets, $680,000 in pre-tax assets, and $55,000 in tax-free assets. 

Build your net worth statement as you listen

Listen in to hear what other kinds of assets Rosie and Dwayne have as we walk through building a net worth statement. When was the last time you updated your net worth statement? 

January is a great time to observe where you are financially so that you can marshall your resources to ensure that you can achieve your goals. As Rosie and I build her net worth statement you can too. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

RETIREMENT PLAN LIVE

• [4:20] Their social capital
• [6:30] Their human capital
• [7:35] Their financial capital
• [9:02] Their other assets

LISTENER QUESTIONS

• [15:54] A Social Security error - who to call?
• [19:36] What can Beth do to get closer to retirement under less than ideal circumstances?
• [24:00] How to know if benefits will continue to increase

TODAY’S SMART SPRINT SEGMENT

• [26:56] Update your net worth statement

Resources Mentioned In This Episode

SSA.gov - overpayment

Social Security episodes 228, 229, 230, 231, 232

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Setting big goals is great, but they have to be the right goals or else they could become a trap. Rosie joins us again today to set her retirement goals. In this episode, you’ll hear her financial goals for her needs, wants, and wishes. We’ll discuss her financial expectations for each of these categories and how her goals fit into her values. 

Don’t miss out on this second episode of Retirement Plan Live. When you finish listening, head on over to answer-man.ck.page/40a96a000e">LiveWithRoger.com to register for the live meet-up on February 2 where we will break down Rosie’s plan in detail and decide whether or not she’ll be able to live out her retirement dreams. 

Goals must be driven by values

In the previous episode, you met Rosie and learned about her situation and her values. We start each Retirement Plan Live series with values because values are what drive our goals. If you set your goals up too rigidly or shoot for the wrong goals then you are working toward something without really desiring it.

Goals are important to have because they framework of what you are trying to achieve. Listen in to learn how Rosie uses her values to drive her goals. 

What makes a base great life? 

What does it take to build a base great life? The base great life is the line in the sand that you can’t cross. It is what you need to have in place to secure a basic life worth living. 

Rosie estimates that it would take about $5000 per month (excluding healthcare costs) to live her base great life. Listen in to hear what she includes in her base great life and why this doesn’t mean eating rice and beans every day. 

Rosie’s wants and wishes

Rosie values travel and would love to spend about $24,000 per year for the next 5 years on travel expenses. After that, she estimates that she would continue to travel but would slow down on spending but still spend around $15,000 per year for the following 8 years. 

Other discretionary expenses would include $10,000 per year on eating out more frequently and spending on loved ones. Adding in these extra wants and wishes would take Rosie and her husband about $117,000 per year.

Follow along and create your own agile retirement plan 

This week, I encourage you to look at your retirement goals with fresh eyes so as not to limit your thinking. Really hone in on what it takes to build your base great life, then add in the layers that build up your wants and wishes. Shed away your inhibitions as you consider your wishes category.

As you listen to Rosie’s journey, why not follow along for yourself? Make sure you are signed up for the 6-Shot Saturday newsletter to receive the corresponding worksheets for each episode. Every week during the Retirement Plan Live series we’ll send out a worksheet to help you work through each stage in the agile retirement planning process. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

RETIREMENT PLAN LIVE

• [4:03] What is a base great life?
• [10:45] Discretionary spending

LISTENER QUESTIONS

• [25:33] Can Tim’s wife retire?
• [32:37] Can Crimaud collect Social Security without a green card?
• [35:25] How to work in tithing in retirement

TODAY’S SMART SPRINT SEGMENT

• [40:38] Revisit your needs, wants, and wishes

Resources Mentioned In This Episode

Collecting Social Security in Canada

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Rosie and Dwayne retired in a bear market and now they wonder if they will have enough money to rock retirement. We will explore that question all month long in this Retirement Plan Live. 

Over the course of the next few weeks, you’ll learn about Rosie and Dwayne and their journey, their goals, their resources, and their investment strategy. Then we’ll wrap up this series together with a live webinar on February 2. Don’t miss out on the exciting finale, sign up at answer-man.ck.page/40a96a000e">LiveWithRoger.com.

Meet Rosie and Dwayne

Rosie and Dwayne live a fairly simple lifestyle. They don’t own a big house or drive flashy cars. They don’t take lavish vacations or eat at fancy restaurants. Although they live simply they do have their own retirement dreams.

When Rosie retired a year and a half ago she figured the worst of the Covid debacle was behind her. She had seen the flash bear market, but since then, the markets seemed to be doing well. Unfortunately, within a year of retiring, she watched her assets decrease by 25%. Now she is left wondering if she’ll ever be able to live out her retirement dreams. 

Rosie and Dwayne both worked in the IT sector before Covid hit. While Rosie was able to work from home, Dwayne was laid off and has since begun flexible part-time work. Working from home simply enticed Rosie to fully dive into retirement. 

What Rosie loves about retirement

Rosie loves the time freedom that retirement brings. She has plenty to do to keep busy: spending her days with her grandkids, at the pickleball court, going to exercise classes, and cooking. Rosie is a natural organizer and creates a weekly plan complete with to-do lists. 

Enjoying the love of family and friends and traveling are what brings her joy and how she desires to spend her time in retirement. 

Rosie’s fears about retirement

With Covid and the subsequent bear market, Rosie feels that she is missing out on fully enjoying retirement. She is very aware of the passing years and understands that time is precious. She feels frustrated that she may not have enough time to do all the things that she wants to do and go to all the places she wants to go. 

Her financial situation is much different than it was a year ago although that hasn’t caused her to change her spending habits. She’s trying not to let her emotions drive her decision-making. 

Rosie understands that she needs a clear mind and that she should stay the course that she and her husband laid out with their financial advisor. While she understands that logically, she is still concerned about their future.

Over the course of this series, Rosie is looking for more input and a better understanding of what changes she needs to make to ensure that she can live out her retirement dreams.

You can follow along with Rosie by using the Agile Retirement Planning process

Follow along over the next four episodes to hear how we use the Agile Retirement Planning process to discover if she and Dwayne are really ready to live out their retirement dreams.

As we work through this Retirement Plan Live series you can follow along and participate in your own retirement plan with the same helpful worksheets that Rosie is using to guide you on your way. Make sure that you are signed up for the 6 Shot Saturday email newsletter to get each week’s worksheet delivered to your inbox. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [1:35] Just say no to New Year’s resolutions

RETIREMENT PLAN LIVE

• [6:05] Let’s meet Rosie
• [15:17] What Rosie thinks about retirement so far
• [23:56] What makes her most frustrated
• [26:54] How retirement has been financially
• [30:45] Rosie’s top ten values

LISTENER QUESTIONS

• [38:44] Is there an optimal balance among the allocation between tax categories
• [43:43] How to factor a whole life insurance policy into your retirement plan
• [47:51] The max limits to a 457 and 403B
• [50:42] Is it ever better to take Social Security at 62?

TODAY’S SMART SPRINT SEGMENT

• [54:33] Make daily resolutions to improve your energy, work, and relationships

Resources Mentioned In This Episode

Morningstar The Long View podcast #186 - Roger Whitney: Retirement Planning Is Not Financial Planning

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

This is our last episode of 2022, so naturally, there will be a bit of reflection alongside the practical planning and your listener questions. Kevin Lyles also joins me in the Coach’s Corner to discuss living your best life in retirement. 

Let’s noodle on what it means to live authentically and discover the answers to some fantastic questions that will help guide you on your retirement journey. Stick around until the end of the episode to hear my word for 2023 and how I plan to review my year. 

Be the author of your hero’s journey

To be authentic literally means to be your own author. That’s what planning your retirement journey is all about. By building a framework to rock retirement you are writing your own story. 

I’m excited to wake up each day and help give you ideas to write your retirement story. By being the author of your own life you will be authentic and live without regret. To start the new chapter of your life consider where you are on your journey. The hero’s journey framework can help you navigate so that you can figure out what is important to you. 

Don’t miss the call to adventure

The hero’s journey is a cycle of constant death, rebirth, and renewal. Some version of you has to die before you can become reborn into your new self. 

If you haven’t retired yet then you are still in Act One of the hero’s journey. In this first act you are being called to something other than your full-time career. Being called to an adventure can be a powerful force. It is a force so powerful that oftentimes our first response is to resist the call. 

However, if you embrace the call you can find mentors to help you along the way. These mentors can come in the form of books and podcasts and they can be people who are further along in their journey that you can look to answer questions along the way.

Act Two requires a leap of faith

To step into Act Two you must take the leap of faith. As you journey into retirement this means stepping away from your old life and into the unknown. Along the way, you’ll face allies and enemies, but you cannot know the trials and ordeals you will encounter throughout this adventure. 

You’ll need a framework to help you navigate Act Three 

In our Third Act of your hero’s journey, you will overcome the trials and ordeals, but only if you have a framework to help us along the way. This is where I come in. Building that framework to help you through the trials and tribulations of retirement is what this show is designed to help you do. I aim to be your mentor and ally along the way.

Some version of this journey plays out in different ways throughout our lives. I’m excited to begin this new chapter with you. We’ll be focusing on building out the financial plan, but as you know, a financial plan alone isn’t the only thing you need to conquer this journey and rock retirement. I look forward to helping you build your retirement in the new year and beyond. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [3:24] The hero’s journey

COACH’S CORNER WITH KEVIN LYLES

• [9:01] How to live your best life in retirement

LISTENER QUESTIONS

• [19:07] What a yield curve is and why it matters
• [20:42] Should I take my pension lump sum now or later?
• [26:35] Ron’s experience living overseas
• [29:56] Use the Social Security website to help optimize
• [31:07] Can I take outside IRAs and roll them into my 401K?
• [35:22] What should Doug do to help his spouse handle finances when he passes
• [37:51] Whether to take small pensions now or later

TODAY’S SMART SPRINT SEGMENT

• [41:08] Choose your word for 2023

Resources Mentioned In This Episode

Joseph Campbell 

The Heroic App

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Do you wonder what you’ll do with all your free time in retirement? Planning your time by filling your days with purpose and passion can help ease the stress that comes with the sudden emptiness of leaving behind a full-time career. 

On this episode of Retirement Answer Man, we’ll discuss how dabbling in a few different activities can help you find your purpose. You’ll also hear the answers to questions posed by listeners like you.

Coming soon to a podcast app near you: Retirement Plan Live!

Are you ready for the next Retirement Plan Live? Beginning January 4, we’ll return to our most awaited annual series. The next RPL will feature Rosie and Dwayne, a couple that retired with already constrained assets during a bear market. While helping Rosie create her feasible plan of record, I’ll also help her understand how to handle retirement in a bear market and what she can do next to help her through this challenge. 

If this will be your first Retirement Plan Live series, or even if you are a veteran RPL listener, I encourage you to listen to the entire series and join us for the live webinar at the end of January so that you can get a true sense of how the agile retirement planning process works. 

Filling your suddenly empty itinerary in retirement can feel daunting

I recently had a conversation with someone who was considering holding off on retirement because they didn’t know what they would do without the routine of work in their lives. 

We begin our social conditioning from the time we start school. School helps to begin to define the external structures of our lives by giving us a place to go, a reward system, a social network, and a vacation structure. This system continues as we enter our working years which makes it a challenge to suddenly leave this lifelong system and venture into the unknown. 

Try dabbling in something new

Since retirement completely blows up the structure and rhythm of life, it can be intimidating to step out into the unknown and venture forth without a plan. 

Having a purpose in retirement can help you transition into something new. However, not everyone knows what their purpose will be. 

Dabbling in a few areas can be one way to try out new interests. In the way that many kids dabble in various sports and artistic activities when they are young, we can do so as well as we approach retirement. By dabbling in a few different activities you can see what fits without becoming overly invested in one particular area. 

Should Suzy buy out her husband’s portion of their shared rental property?

Suzy has been going through a divorce for the past several years and is ready to finally financially settle. One of their shared assets is a $4 million property that could be used as a short-term or long-term rental. The property needs about $500,000 worth of work and it would require a $2 million loan to buy her husband out, so she is trying to decide whether it makes sense financially to take on such a mortgage at this stage in her life. 

To ensure that Suzy makes the best decision she can, it is important for her to consider what she wants her life to be like in the future. There are multiple pathways we can take in life so it is important to envision your future before jumping into any permanent decisions. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [3:18] How to rock life outside the financial realm
• [11:03] What to do to set yourself up for some structure

LISTENER QUESTIONS

• [13:25] What to do with Suzy’s rental property in her divorce
• [20:24] How the widow’s Social Security works
• [22:13] If I delay Social Security will I get the COLA increase as well?
• [23:55] Should I stop contributing to my 401K?

TODAY’S SMART SPRINT SEGMENT

• [30:10] Dabble with something

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Are you curious about the changes that are coming next year on the Retirement Answer Man show? Today, you’ll have a sneak peek at one of our new segments: the Rock Life segment. Bobby Dubois joins me to discuss how to ensure that you have enough energy so that you can rock retirement. 

On this episode, you’ll also hear my holiday gift-buying suggestions as well as the listener questions segment. Don’t miss out on hearing what to do with a settlement, whether to file for Social Security if you are still working, and whether you should simplify your investments in retirement. 

Don’t miss this episode to hear the answers to these listener questions, get a preview of what’s to come next year, and to get some fantastic gift ideas. 

My holiday gift guide

Buying and receiving gifts later in life can be challenging since many of us already have so much. I prefer to give experiences over anything else, but when an experience isn’t appropriate a game is my go-to gift. These are some of the games that I enjoy playing or might make great gifts for someone you love

Sequence - easy enough for the whole family to enjoy

Quix - a fast-paced dice game

Euchre - a midwesterner’s favorite

Left Center Right - this can actually be played with dice or cards

Ticket to Ride - a longer board game that’s worth learning

Pictionary - great for parties

Scattergories - another classic party game

Kids Against Maturity - a twist on Cards Against Humanity that might be more appropriate for the family

Play Nine - when golf meets cards

Tri-Ominos - a triangular domino game

Listen in to hear what our listeners recommend. One listener has a fantastic tip for learning new games. 

Should James apply for Social Security while still working full-time?

James is still working and approaching full retirement age. He would like to apply for Social Security but continue to work yet he is confused by the whole process. There isn’t much information about collecting Social Security while working full time. 

An added complication is that signing up for Social Security will automatically enroll him in Medicare. However, he still has healthcare coverage through his employer and would like to continue his employer’s coverage. 

James is right. There isn’t much information about collecting Social Security and enrolling in Medicare while still employed full-time. And what is out there is really confusing. 

You can collect Social Security at full retirement age while still working. The financial ramifications may push you into a higher tax bracket. 

Boomer Benefits can help you navigate Medicare’s complexities

One aspect of choosing to collect Social Security at full retirement age is that it will automatically enroll you in Medicare part A. Parts B and D can be delayed, but they must be turned on within eight months of leaving your employer-sponsored health plan. The good news is that Medicare part A will coordinate with your health insurance if you end up hospitalized. 

Since there are so many difficulties in navigating this question, I recommend that anyone in this situation contact a Medicare navigator like Boomer Benefits.

Boomer Benefits is a company that deeply understands Medicare and the entire enrollment process. They don’t charge the consumer and aren’t trying to sell you anything–they are simply trusted advisors. They have numerous educational resources both on their website and on YouTube.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

GIFT BUYING GUIDE

• [1:34] Roger’s holiday gift buying guide

LISTENER QUESTIONS

• [10:30] Should James file for Social Security if he is still working?
• [14:10] What to do with a settlement
• [23:10] Whether to simplify investments
• [29:20] If I just retired can I still make a Roth contribution?

ROCK LIFE SEGMENT WITH DR. BOBBY DUBOIS

• [30:37] The 3 pillars to building energy in our lives
• [34:32] Intentionally observe what works for you

TODAY’S SMART SPRINT SEGMENT

• [45:00] Go buy a game or experiment on yourself

Resources Mentioned In This Episode

Cozy Earth - enter RAM at checkout to receive a 35% discount!

Boomer Benefits

Boomer Benefits on YouTube

Whoop

Oura Ring

Stacking Benjamins

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Is it worth investing in individual stocks or should you simply go with ETFs? Joe has recently parted ways with his financial planner and is beginning to manage his portfolio himself and was wondering about the benefits of these choices. 

Tanya Nichols and I will explore Joe’s questions as well as others on this episode of Retirement Answer Man. Listen in to hear the benefits of owning ETFs vs individual stocks, how to structure your Roth conversions, and what to do about health insurance before Medicare. 

Making decisions is rarely a cut-and-dry process

When making decisions, we usually look for a clear answer: yes or no, do it or don’t do it, jump or don’t jump. However, judgment calls are rarely so simple. Usually, we are operating without all of the pertinent information, so we have to make assumptions about how the future will look. 

The process of brainstorming is messy. There is no crystal clear way to go about making decisions, and once you do you probably won’t know if you chose correctly. 

When confronted with choices you’ll want to have a framework to explore decisions in an organized way. Then you’ll want to relax and consider all the options. When you take the pressure off you’ll have more opportunities to come to a good decision. Next, dive into the process and see what comes. You may explore several different scenarios before coming upon your final decision.

What I’m reading

My strategy for reading this year has been to make reading my default activity. Reading is what I go to when I’m waiting in line, have spare time at home, or when I’m taking a walk (via audiobooks, of course!). This new mindset has led me to read 33 books so far this year. Today I wanted to share with you the most recent books I have read and my thoughts on them. 

Boys in the Boat by Daniel James Brown is an inspiring book that I highly recommend. It chronicles a member of a crew team in the 1920s and 30s and his life journey from childhood and then on to the 1936 Olympics. 

Quit was written by Annie Duke the author of Thinking in Bets. Annie was a professional poker player turned decision-making expert. In this volume, she examines how hard it is to quit something once you have started.

Put Your Ass Where Your Heart Wants to Be by Steven Pressfield is a fast read–you could finish it in a day. This is a great book that helps people work on challenging goals. This book will help you get past the resistance. 

Courage Is Calling by Ryan Holiday is a book that will enrich your soul. 

It Takes What It Takes was written by Trevor Moawad who was a performance coach for elite athletes. This book on mental conditioning promotes the thesis that if you want to be great at something you have to make a choice to do the things to make you great. Making the choice to be exceptional clears the path to greatness because it takes everything else off the table. 

The Dichotomy of Leadership by Jocko Willink was written for leaders on the aspects of finding the virtuous mean. 

If you have any great book recommendations I’d be happy to hear them. Just head on over the Ask Roger page and leave an audio suggestion or write it in. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [1:23] On making decisions
• [4:11] What I’ve been reading

LISTENER QUESTIONS WITH TANYA NICHOLS

• [19:33] Should Joe invest in individual stocks or ETFs
• [27:36] What to put in Roth conversions
• [32:45] What should Todd do about insurance between the ages of 58 and Medicare?
• [42:22] Looking for resources on the ex-pat life

TODAY’S SMART SPRINT SEGMENT

• [44:38] Treat people as they could be

Resources Mentioned In This Episode

Align Financial

BOOK - Boys in the Boat by Daniel James Brown

BOOK - Quit by Annie Duke

BOOK - Put Your Ass Where Your Heart Wants to Be by Steven Pressfield

BOOK - Courage Is Calling by Ryan Holiday

BOOK - It Takes What It Takes by Trevor Moawad

BOOK - The Dichotomy of Leadership by Jocko Willink

Phil Stutz

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

There comes a time when retirement planning becomes retirement doing. Many people get stuck in that gap between knowing vs. doing. While it is important to learn what you can so that you can make educated decisions, you’ll want to build a foundation to give you the confidence to act. My goal is not only to teach you information but also to help you build the structure you need to go out and rock retirement.

On this episode, we’ll discuss how to close the knowing vs. doing gap, answer listener questions, and check out what Kevin has to say in the Coach’s Corner. Listen in to hear a clarification on Social Security and COLA, a new perspective on whether to purchase long-term care insurance and how to find a financial advisor who will simply answer questions. Stick around until the end to hear the Coach’s Corner segment with Kevin Lyles. 

David is still in the wealth accumulation phase

David sounds like a younger listener since he has young children. He’s still in the wealth accumulation stage of life and has a healthy $120,000 emergency fund. He is considering whether he should use that emergency fund to go ahead and pay off his mortgage. The extra money each month could then be used to purchase a rental property or to invest. 

Consider the big picture

Since David still has a long financial journey ahead, it is important to step away from focusing on the financial aspect of this picture for a moment and envision what he wants his life to look like. What is he trying to accomplish? Does he want more financial flexibility? Does he want more time with his young children? Any financial question should be framed with your goals in mind. You want your goals to shape the outcome of your decision rather than the other way around. 

How important is financial flexibility?

By dipping into the emergency fund he takes away the financial flexibility. Having an emergency fund in place limits the number of choices a person has. Another option could be to pay the mortgage off by adding a bit extra each month to the mortgage payment over time. Paying off the mortgage early will improve the monthly cash flow, but at what cost? David needs to assess how he will pay off the mortgage and whether that increased cash flow is important enough to justify the decreased financial flexibility.

Once David pays off the mortgage, then he can decide whether rentals or traditional investments would be the best option based on the financial goals he has for the future. Framing these choices within the context of the bigger picture is so important when making these types of decisions. 

Ask your own question

If you would like to have your questions answered go on over to the Ask Roger tab on RogerWhitney.com where you can either submit a written question or an audio question. We love to play audio questions on the show, so if you would like your question answered sooner press record to submit.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [5:38] Be wary of suspicious text messages and emails

LISTENER QUESTIONS

• [7:34] Should David pay off his mortgage?
• [15:00] How does Social Security COLA work?
• [19:52] Beth’s perspective on long-term care insurance
• [23:31] How to find a financial advisor who will simply answer questions

COACH’S CORNER

• [26:22] On categorizing retirement plans

TODAY’S SMART SPRINT SEGMENT

• [33:50] Set a benchmark for things you want to accomplish in 2023

Resources Mentioned In This Episode

NAPFA.org

Episode 444 - Will My Social Security Benefit Be Impacted By My Divorce? 

CozyEarth.com - use the code RAM to get 35% off!

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Curiosity is an important quality to nurture as you get older; it can even help you find your purpose in retirement. Today, I’ll help you explore how to use your curiosity to discover your purpose as you embark on the next phase of your life. 

This episode is packed with questions that could help you rock retirement. Listen in to learn how to know if an annuity is right for you in retirement, how to apply for social security, whether you can contribute to a Roth IRA if you are an independent contractor, how to choose healthcare alternatives before Medicare, and 401K alternatives for the highly compensated employee. 

Curiosity can help lead you to your purpose in retirement

Finding your purpose in retirement can be one of the most daunting tasks that you undertake in your retirement planning. Going from a career and a life that is essentially planned out for you to one that is completely open-ended can even bring on a bit of anxiety.

However, if you let it, your purpose will come to you. It simply takes a bit of curiosity. Pulling on the threads of curiosity will lead you down the rabbit hole to the crux of what is essential to you. Listen in to hear how you can use your curiosity to ignite your passions.

There is no way to completely remove the uncertainty of retirement

Annuities are guaranteed income sources that can remove some of the uncertainty that comes with retirement planning. However, they are not without their downfalls. 

Using an annuity as a guaranteed income source early on in retirement will help to smooth out sequence of return risk, but it will enhance your inflation risk later on.

Buying an annuity to turn on later in life will help with longevity protection, but what if you don’t need it? 

There is no way to completely remove the uncertainty that comes with retirement–there will always be the element of the unknown.

How to know if an annuity is right for you in retirement

There are two ways to consider an annuity to help fund retirement: qualitative or quantitative. On the quantitative side, it is easy to use calculators like the Schwab Annuity Calculator. While this can help you predict the math, it is important to remember that the best way to maximize guaranteed inflation-proof income is to fully delay claiming Social Security.

To ensure that you are making a decision that is right for you, you’ll want to build a feasible, resilient plan of record that does not include an annuity. Then build out a what-if scenario and compare the two plans side by side. This will give you the context to make the judgment call. Although you will never have a crystal clear answer, this is the best way to work through this kind of question. By using an organized process, you’ll understand what it takes to build a base great life and have the confidence to spend your money and rock retirement. 

Consider when to turn on the annuity

Next, comes the question of when you want to turn on the annuity. Will you want it today or later in life? Giving yourself optionality is important. As you age your priorities will change. It is important to do the research. First consider the quantitative aspects by using calculators and considering the rules, then consider the qualitative side of this decision. Then consider how much you want to go with a safety-first approach. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

LISTENER QUESTIONS

• [6:10] How to know if an annuity is right for you in retirement
• [13:50] How to apply for social security
• [14:55] Can you contribute to a Roth IRA if you are an independent contractor?
• [16:17] A backdoor Roth contribution clarification
• [18:11] Healthcare before Medicare
• [23:15] 401K alternatives for the highly compensated employee

TODAY’S SMART SPRINT SEGMENT

• [26:37] Pull the thread and follow your curiosity

Resources Mentioned In This Episode

SSA.gov

Schwab Annuity Calculator

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

The good life is a direction, not a destination. This is why we are so focused on the process of retirement planning. Rocking retirement is all about having an adaptable process to work through. 

On this episode of Retirement Answer Man, I answer a few process-based questions. You’ll learn how to work through the steps to rebalance a bond ladder and how to analyze whether you have enough to create a sound retirement.

How retirement planning is like meditation

Retirement planning has a lot in common with meditation. With meditation, the idea is to sit quietly and focus on one particular mantra or the breath. While this seems like an easy thing to do, the mind constantly wanders to other places, so the meditator has to bring the mind back to the primary focus. 

Just like with meditation, retirement planning has its own primary focus. The focus of process-based retirement planning is your goals. When you get distracted by the latest problem that you heard on the news, poor market returns, or whichever new, shiny thing comes along it is important to bring your attention back to the plan. We all want to optimize our retirement to achieve the best possible outcome, but we must first see how it all fits within our process.

What is a bond ladder?

A bond ladder is a great way to prefund consumption over the years. It is created by purchasing a bond portfolio with individual bonds that come to maturity over a period of time. There may be bonds that mature each year over several years. This creates an income floor in a type of stair-step fashion. As each bond comes due then you build out the next step of the bond ladder. 

How to rebalance a bond ladder

As each bond in the ladder comes due you may wonder how and when to reallocate your portfolio. The bond portion of the portfolio is there to help you weather poor markets, so should you sell stocks while they are down to build your bond ladder back up? That kind of defeats the point of building up the bond safety net.

Creating an income floor with a bond ladder ensures that you have time to allow your stock portfolio to be successful. There are several ways that you can make this happen. 

You can moderate your spending so that you lengthen the time period of the bond ladder so that it burns down more slowly or you can choose to only partly replenish it. 

There is no right or wrong way to work through this. By using a process-based strategy you can create several scenarios to navigate the situation. The benefit of having a structured process is that you can test it to see what works best for you. 

Think about your own retirement planning process. Do you return back to it when faced with a question or problem? Consider how you can use your planning process to help you reframe questions. You may find that answering those questions gets easier when you use your process. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

LISTENER QUESTIONS

• [6:33] How bond ladders work
• [12:29] Should Rich live on dividends and interest or sell?
• [14:17] How to systematically analyze variables
• [18:40] Is there a specific set of tests to determine whether a retirement plan is sound?

TODAY’S SMART SPRINT SEGMENT

• [23:46] What is your mantra?

Resources Mentioned In This Episode

New Retirement Planning

Cozy Earth use code RAM to get 35% off anything on the site!

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

When planning your retirement journey it is imperative that you fully explore and understand the options available. On this episode of Retirement Answer Man, Shane asks about the best ways to access his retirement accounts early.

Taylor Schulte from Define Financial joins me in the listener questions segment to discuss Shane’s question by clarifying the rule of 55 and 72(t), the ups and downs of using his fiduciary to prepare Jay’s taxes, and how to fund the first 5 years of retirement.

Don’t miss out on the answers to questions from listeners like you. Tune in to hear if Taylor’s response matches my own. 

Accept where you are now

“We must be willing to give up the life that we planned so as to have the life that is waiting for us.”--Joseph Campbell

It is easy to look back with wonder at the plans you had for your life. Even if everything is going well, we’ve all had life plans that were interrupted by curveballs. While those curveballs can throw us off course, it’s important to understand and acknowledge where we are now. Rather than ignoring or avoiding your present situation, accept your situation the way it is. 

Radical acceptance is fully accepting things as they are now. Only when you fully accept what your current reality is can you look forward to creating a fantastic life ahead. Recognize where you are starting from so that you can plan to rock retirement. 

What is the rule of 55?

Shane is currently planning to work until age 55. He would like to use the rule of 55 to access his 401K. The rule of 55 is an IRS provision that allows workers who leave their current job to start taking penalty-free distributions from their current employer's retirement plan upon reaching age 55. 

Note that the rule of 55 does not apply to IRA accounts. It is only to be used for 401Ks. So if you think you may want to use the rule of 55, then you’ll want to make sure that you don’t roll this account over to a Roth IRA. 

Although this provision seems cut and dry, there are a couple of things to look out for. First, you’ll want to be clear about whether your employer will allow you to use the rule of 55 for your 401K. 

Next, you’ll need to see whether the employer will allow you to withdraw the funds on a partial basis so that you don’t have to entirely deplete the account.

Lastly, you should note that the current tax filing rate for the rule of 55 is at 20%.

The ins and outs of using 72(t) for qualified accounts

Shane’s backup plan in case he gets laid off is to use 72(t). Similar to the rule of 55, 72(t) allows workers to gain early access to their 401K or 403B without penalty.

Typically 401K contributors cannot access their retirement savings before age 59.5 without penalty. However, the rule of 72(t) allows for 5 equally periodic penalty-free payments. These payments must be made according to the schedule laid out by the IRS. It is essential that the account holder not add or withdraw anything more during this time period. 

Using the 72(t) rule is tricky and it is critical that you carefully abide by the IRS’s rules. Listen in to hear a tip on what you could do if you only want to access part of the funds in your 401K using rule 72(t).

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [2:01] On radical acceptance in retirement planning

LISTENER QUESTIONS WITH TAYLOR SCHULTE

• [6:40] What should I know before using 72T to fund retirement?
• [13:25] Jay wonders if there are pitfalls to having his family office fiduciary prepare his taxes
• [23:49] How to fund the first 5 years of retirement
• [30:18] Belinda’s question on whether to keep term life insurance in retirement

TODAY’S SMART SPRINT SEGMENT

• [37:42] Radically accept one aspect of where you are now

Resources Mentioned In This Episode

Taylor Schulte - Define Financial

Taylor Schulte’s Stay Wealthy podcast

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

If the bear market and inflation may have you worried, a bit of productive paranoia with a tinge of optimism may see you through. On this episode of Retirement Answer Man, we’ll discuss upcoming monthly themes, the next Retirement Plan Live case study, and ideas for new segments for the show. You’ll also hear answers to several listener questions. Today we’re putting our geek hats on to discuss commodity ETFs, perpetual withdrawal rates, single-pay annuities, and how to mix compounding with growth. Press play to get started. 

What is a commodity?

During this bear market, people are becoming curious about different types of investments. Keith would like to know more about investing in commodity ETFs that follow the indices as a way to hedge against inflation. His big question is, should he invest in commodity ETFs to fight inflation? Before we can answer that question, we need to define what commodities are. 

A commodity is a hard good with economic value that is used to create products. Commodities are a capital gain type of investment that don’t produce any dividends and therefore don’t have a compounding effect. 

One of the attractions of commodities is that they aren’t correlated with other types of assets. Since interest rates and inflation are rising, commodities have become more appealing. They have the added benefit of not behaving in the way that stocks behave. 

How to invest in commodities

There are a few ways that people can invest in commodities. They can buy the commodity directly and hold on to it. However, this creates the issue of how to store it. 

Another way to invest in commodities is to buy shares in companies that manage commodities. One example is Exxon, but since Exxon is an equity as well, that means that shares of Exxon are not pure commodities. 

To get more purity, people look for ways to follow the commodities’ indices. Since we can’t actually buy an index, we could buy an ETF that replicates the index to gain exposure in that market. Popular ETFs use financial instruments like futures contracts and swaps to simulate ownership

Do commodities have a place in a retirement portfolio?

While I’m not opposed to having commodities as a part of a diversified portfolio, it is important to first ask yourself a few questions.

Which vehicle will you use? Which commodities will you track? Make sure that you don’t just choose one. You’ll want to ensure that you have a basket of commodities even though it will add a bit more complexity. 

How much do you plan to allocate? What is the right percentage? You’ll want to purchase enough so that it makes a dent in your portfolio, but it is important to recognize that commodities are volatile compared to other asset classes. Commodities can move drastically in one direction or another based on many factors. Allocating 5-10% in a growth-oriented portfolio might work, but will it really make a difference? 

Understand that adding commodities to your portfolio is a long-term decision. If you do add them then stick to your decision. If you don’t, then you negate the idea of asset allocation. 

It is important to find a process that is right for you and stick to it consistently. Adding commodities into your portfolio can be a useful hedge against inflation, as long as they are used as part of your long-term investment process.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

LISTENER QUESTIONS

• [4:40] Should I invest in commodity ETFs to fight inflation?
• [16:06] Can using a perpetual withdrawal rate increase portfolio security?
• [21:57] Would a single-pay annuity help David’s situation?
• [29:20] Barry’s suggestion for a monthlong theme
• [30:03] Ryan’s correction on NUAs
• [30:30] Jim’s question on compounding and growth

TODAY’S SMART SPRINT SEGMENT

• [37:15] Grab the checklist from the 6-Shot Saturday newsletter and take action

Resources Mentioned In This Episode

Cozy Earth - Enter RAM as a discount code to receive 35% off

BOOK - Good to Great by Jim Collins

BOOK - Antifragile by Nassim Nicholas Taleb

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

If you don’t qualify for a Roth IRA you may be interested in using a backdoor Roth to utilize the advantages of a Roth IRA. One listener wonders about the rules for contributing to a backdoor Roth. Today, I’ll clear up his question and answer many more. 

Other listener questions in this episode cover using RMDs as QCDs, dealing with capital gains, and target date funds. Don’t miss out on discovering the answers to questions from listeners like you. Press play now to listen. 

Should we be optimists or pessimists right now?

Optimism can only get you so far. I tend to be an optimistic person, but that doesn’t mean that I put on rose-colored glasses. I can see that the present situation calls for something more than simply blind optimism.

However, that doesn’t mean that we should reverse our stance and become pessimists. Pessimism is the tendency to see the worst aspect of things or believe that the worst will happen. It calls for a lack of hope or confidence in the future. This isn’t what we should strive for at all. So how should we view things instead?

“Rather than practice pessimism, perhaps we should practice productive paranoia.” - Jim Collins

How about a dose of productive paranoia? Jim Collins, author of Good to Great, helps us understand productive paranoia by explaining that the only mistakes you can learn from are the ones you can survive. Since conditions can change rapidly it is important to build in margins of safety so that you can handle disruptions from a position of strength. This will help ensure that you can mitigate damages or take advantage of opportunities. Use your angst to build structures to help you weather the storms that the market throws at you.

Learn more about the Rock Retirement Club at our live meetup

Join our live meetup tomorrow, 10/27, or 10/29 to hear how you can handle market disruptions from a position of strength by ensuring that you have an agile retirement plan in place. In the meetup, we’ll lay out how you can work through the process to develop your own agile retirement plan. We’ll also showcase the Rock Retirement Club so that you can gain a better understanding of what the Club is all about. 

Can backdoor Roth contributions be made throughout the year?

Scott doesn’t quite qualify for a Roth IRA, so he has been looking into a backdoor Roth.

His question is if he can make backdoor Roth contributions throughout the year or if he can only do them once during the year. Yes, you can make contributions throughout the year; however, there may be a reason that you want to set that money aside and wait until the end of the year to make your contribution. Listen in to hear why. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

LISTENER QUESTIONS

• [5:30] Can backdoor Roth contributions be made throughout the year? 
• [9:53] Can Dennis use RMDs as QCDs?
• [15:03] How to deal with capital gains
• [23:15] Should Marie switch from target date funds to separate funds?
• [28:08] Do you factor in the cost of Roth conversions

TODAY’S SMART SPRINT SEGMENT

• [37:43] Do something that intimidates you

Resources Mentioned In This Episode

BOOK - Good to Great by Jim Collins

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

The latest news in retirement is that Social Security recipients are getting a raise in 2023. While that is helpful for everyone receiving their benefits, what about those who choose to delay taking Social Security? A couple of listeners have been wondering if they, too, will get inflation adjustments if they wait to file for Social Security. We’ll have the answer to that question and many others as well as feedback from recent episodes. If you have been on the fence about whether or not you should delay Social Security, you won’t want to miss out on this episode. 

It’s hard to be optimistic when you are in the middle of a storm

We can all be optimists on a sunny day, but what do we do when we’re in the middle of a storm? It seems we are in the middle of a storm right now. Market downturns, high-interest rates, and high inflation make it difficult to be optimistic about the economic times ahead. Things could get better, or worse, or they could stay the same for a while. Although there is no way for us to know when the economy will get better, there are things we can do to improve our situation. 

Focus on the micro instead of the macro

In a storm, it is important to stay calm, step back, and consider what to do next. You may have the impulse to do many things at once to do all that you can to try and survive the situation, but you’ll spread yourself too thin. Instead, it is important to focus on the micro rather than the big picture. 

Don’t worry so much about optimizing interest rates and whatnot. Alternatively, identify where you have the agency to make incremental changes so that you can weather whatever the storm may bring. Consider your next baby step to creating the life that you want to live. How will you cover your expenses?

You may come out a bit battered and bruised, but if you make compromises, you’ll be able to use your agency to navigate the storm so that you can rock retirement in any weather. 

Will you still get COLA if you wait to file Social Security?

Social Security recipients are in for a big raise again next year, so if you are planning to delay taking it, you may be wondering if you’ll eventually get that raise too. Karen is one listener that has that same question. 

The answer is yes, for the most part. COLA (cost of living adjustments) are included in your future Social Security payouts. There is only one group of individuals that won’t see a COLA adjustment. Listen in to hear who they are and how COLA works in Social Security.

Don’t forget to register for the upcoming webinar on October 27 and 29 where I will share the retirement plan structure I use with my clients. This simple structure will help you gain confidence in your retirement plan so that you can rock retirement. Register at answer-man.ck.page/8efd7c2191">LiveWithRoger.com.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [1:21] What to do to weather a storm

LISTENER QUESTIONS

• [9:17] 2 Questions on Social Security and inflation
• [14:01] The best use of a universal life insurance policy
• [18:14] Should Bill go with a smaller investment vehicle in retirement?
• [24:25] Retirement Plan Live case study
• [26:57] Feedback on how to meet people in retirement

TODAY’S SMART SPRINT SEGMENT

• [34:00] Set a meeting with yourself or your partner to review your plan

Resources Mentioned In This Episode

Retirement Plan Live case studies 

MeetUp.com

Long-term care series episode 311, 312, 313, 314

Hugh Calc retirement calculator

ValueYourPension.com retirement calculator

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

If you are getting close to retirement you have probably been watching the financial news to help you stay up to date with what is going on in the world. If so, you won’t want to miss out on hearing why this is not a good idea. 

Today, I’ll also answer questions about bonds, charitable gifting, and how to find a financial advisor. Make sure to stick around until the end to hear about upcoming changes to Medicare with, Medicare expert, Danielle Roberts from Boomer Benefits. 

Keeping up with the news won't help you navigate your way through retirement

Have you read the news lately? It’s not pretty out there. Inflation, bear markets, rising interest rates, political craziness, a poor economy: it’s non-stop fear peddled 24-7. Staying up with the news will not help you navigate your retirement journey. Trying to stay on top of the news will only bring you more stress and worry.

You're not going to weather this bear market by keeping up with the headlines. Instead, you’ll navigate it by getting to the bottom of things, relaxing, using a process, and making a judgment call. If you are interested in the process that we teach, join one of our live meetups on October 27 or 29. Register at answer-man.ck.page/8efd7c2191">LiveWithRoger.com

Should I switch my bond portfolio to CDs?

When choosing which type of investments to own it is crucial to use a process and consider what the money will be used for. You’ll need to ensure that you have an emergency fund and 5 years of prefunded consumption before building your long-term income floor.

You can prefund your first 5 years of consumption with individual assets that mature when you need them by using CDs, treasury bills, Treasury Inflation-Protected Security (TIPS), MYA-guaranteed annuities, or individual bonds. Build this income floor by creating an income ladder that matures at the time you will need to use it. The current market is a good example of why you wouldn’t want to use stocks and bond funds for these first 5 years of cash on hand. 

Beyond the first 5 years, you’ll build a portfolio that contains a mix of stocks and bonds. At this point, rather than buying individual bonds you may want to purchase ETFs and managed index bonds. This way, as interest rates rise, the funds get reinvested back into your portfolio. 

By ensuring that you won’t need these funds for 5+ years, you don’t have to worry about the markets or rising interest rates. 

Look out for these upcoming changes to Medicare

Medicare’s annual open enrollment period is coming up soon, so Danielle Roberts joins me to discuss the real and potential changes coming to this essential benefit. Listen in to learn about the crucial difference between the annual open enrollment period and the one-time-only initial enrollment period that occurs when you turn 65. 

You’ll also hear about how recent legislation will change drug coverage for many common drugs. Danielle offers a wealth of information, so you won’t want to miss out on her expertise. Stick around until the end to hear her take on what is happening in Medicare news. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [2:11] Staying on top of the news will only bring you more stress and worry

LISTENER QUESTIONS

• [7:23] Should I switch my bond portfolio to CDs?
• [12:07] What to use for your middle bucket
• [13:48] On using charitable gift annuities in retirement planning
• [17:27] How to find a financial advisor to help plan retirement
• [21:44] Should taxable and tax-free assets be weighted differently on a net worth statement?

MEDICARE NEWS WITH DANIELLE ROBERTS FROM BOOMER BENEFITS

• [24:53] Changes to Medicare to look out for
• [37:30] What to look out for in your mailbox
• [45:35] Potential changes upcoming in 2023

TODAY’S SMART SPRINT SEGMENT

• [47:20] Stop trying to stay on top of things

Resources Mentioned In This Episode

answer-man.ck.page/8efd7c2191">LiveWithRoger.com - Make sure to secure your spot for the live event on October 27 or 29!

Boomer Benefits

RetireAgile.com

NAPFA.org can help you find a fee-only, fiduciary financial advisor

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

RMD tables, bond classes, international exposure, and 1099s–we’ve got answers to your questions. First up is which account is best to begin drawing from in retirement. Listen to these answers to listener questions and take some time to reflect with me about how too much data can inhibit our ability to make good decisions. Press play to listen.

Too much data can hinder your decision-making process

There comes a point where more information doesn’t help you make decisions, it can actually hurt your decision-making. A new low in this bear market recently passed taking it down 22.4% for the year. Rather than dwelling on this fact by looking up news articles, try changing your perspective. Use the data to flip the narrative. Instead of focusing on the current downward trajectory focus on the 10 years of growth that we had beforehand. When you have a feasible, resilient plan in place you won’t need to worry about this bear market. 

Are you curious about the Rock Retirement Club?

Have you heard me talk about the Rock Retirement Club in previous episodes but still aren’t sure exactly what it is? The RRC is a group of just under 1000 members from all over the country all within 10 years of retirement. Our focus is on how to live your best life as you make the transition into retirement.

We do that with a masterclass that helps you create an agile retirement plan. This isn’t simply a class where you watch videos and take a quiz at the end. This structured masterclass walks you step by step as you build your own agile retirement plan. Once you create your plan, then, you’ll learn how to make it resilient by testing it against common risk factors. Next, you’ll optimize and enhance your plan.

In addition to the master class and the camaraderie of the group, you’ll also get the experience of our team of coaches who will coach you through the financial and non-financial aspects of retirement. 

Our goal is to give you the tools to create the ideal retirement plan for you and lifelines to reach out to when you need help. If you would like to learn more about the Rock Retirement Club sign up for our live meetups on October 27 or 29 at answer-man.ck.page/8efd7c2191">LiveWithRoger.com.

Which account should I begin drawing from first in retirement?

One of the classic optimization questions is which account to draw from first. Many are often drawn to the after-tax assets first, but if you take all these away, you will only be left with tax-deferred assets. These are subject to RMDs once you turn 72, so you could be left with a situation where you have to take more out than you need. Consider taking advantage of lower tax brackets now to pay today’s low tax rate. 

Listen in to hear the answer to this retirement question and many others. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [1:56] More data can cause you to distort your view
• [6:34] What is the Rock Retirement Club?

LISTENER QUESTIONS

• [12:42] Which account should I begin drawing from first in retirement?
• [16:46] What are the actual percentages of RMDs taken each year
• [20:10] Comments on my recent comments on international exposure
• [21:59] What to consider as a 1099 contractor
• [26:10] What is the best bond asset class to buy?
• [28:44] How to take advantage of NUA?
• [35:49] Do you need a personal financial advisor? 

TODAY’S SMART SPRINT SEGMENT

• [39:25] Gain some perspective

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Many people choose to save money for their kids and grandkids in a 529 account, but one listener wonders if there is a better way to give. Learn the answer to this question and more on this episode of the Retirement Answer Man show. 

Make sure to stick around until the end to hear the Coach’s Corner segment with Kevin Lyles. Kevin and I discuss growth and accepting challenges in retirement. Find out why it is so important to continue to challenge yourself in retirement.

What is the best way to save money for the grandkids?

Like many people, Kathy saves money for her grandchildren in a 529 account, but she wonders if this is the best way to save for them. What if they choose not to go to college?

Before analyzing the best way to save for the grandkids, consider how you should think through this issue. What are your goals in saving for the grandchildren? 

What do you want to accomplish? Do you want them to graduate from college without debt? Do you want to help them get launched to give them a great start to adult life? Do you want to buy them their first car or help them put a down payment on their first house? Think about your ultimate purpose for giving.

Various methods that can be used for giving

If you would like to ensure that the kids graduate without debt, then, the 529 is an excellent vehicle to accomplish this goal. It’s also important to note that by keeping the 529 in your name you can change the beneficiaries from one child to another. 

Another way to save for the kids is by creating a separate account in your name that you earmark for a specific child in mind. Then later on if that child veers down a wrong path, you can choose not to support their bad decisions. This option also allows for you to have control and you ensure that you aren’t making decisions for them too early. 

The Uniform Gift to Minors Act provides a way to transfer financial assets to a minor without establishing a formal trust. A UGMA account is managed by you until the minor comes of age, at which point they assume control of the account. At this point, you relinquish all control over the funds.

If part of your goal is to help your kids while they raise their kids, then paying for private school or university directly is one way that you could do this. You can even pay directly for medical expenses as well. As long as you are paying the provider directly then you can give unlimited funds. 

If your goal is to gift your assets as a part of estate planning, remember that you can give up to $16,000 to anyone you want each year.

Before gifting anything, understanding your motivation for the gift is essential.

Find purpose with action to propel yourself forward

Thinking about things is, oftentimes, an avoidance behavior. The only way we discover who we are or the things that we enjoy is by doing them. 

“A sense of purpose doesn’t come from thinking about it. It comes from taking action that moves you towards the future. The moment you do this you activate a force more powerful than the desire to avoid the pain of loneliness or inactivity. We call this the force of forward motion.” Phil Stutz.

Continue to challenge yourself physically, socially, and intellectually. By continually expanding you prevent rigid mindsets from setting in. Without challenge, the status quo sets in and while we may feel comfortable with our lives, before long we may discover that our lives will actually shrink without growth. 

How will you challenge yourself in retirement? 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING

• [1:10] Find purpose by doing things

LISTENER QUESTIONS

• [2:45] Giving to grandkids
• [10:44] Is there a list of the major retirement benchmarks?
• [15:00] Who does the RRC consist of?
• [17:22] Social Security claiming

COACH’S CORNER WITH KEVIN LYLES

• [24:27] Try new things in retirement

• [31:55] Developing new routines can help

TODAY’S SMART SPRINT SEGMENT

• [34:10] Do what needs to be done not what you feel like doing

Resources Mentioned In This Episode

Rock Retirement Club

The Retirement Manifesto blog

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Life is about events, the challenges we overcome or not, our successes and failures, but, even more, it’s about how we touch and are touched by the people we meet. 

Nicole is back! She is here this week to help me answer your listener questions. In this episode, we discuss the challenges of making friends in retirement, the value of international diversification, contributing to a Roth 401K vs. a regular 401K, the 4% rule, and much more. 

I created the Retirement Answer Man show to help you, not just with the business side of retirement, but also to help you build a successful life so that you can lean in and really rock retirement. This month we are answering your retirement questions. If you have a question to submit, head on over to RogerWhitney.com/AskRoger to proffer your questions. Remember, if you want to get bumped to the front of the line and use our fastpass option by recording an audio question. 

Check out these resources to learn more about inflation in retirement and the RRC

Have you been thinking about joining the Rock Retirement Club? If so, sign up for our updates so that you can be the first to learn about the next online open house. We’ll be opening enrollment at the end of October and plan to have a few open house opportunities between now and then. These open houses will be an informative way to for you to learn more about the club so that you can decide whether it is right for you. 

Are you worried about inflation in retirement? If so, we have created a resource to help you navigate this worrisome hurdle. Check out DoRetirementRight.com to get this FREE information to help you think strategically about inflation in retirement. 

Trying to make friends as a single person in retirement can be a challenge

In many 55+ communities, it is pretty easy to make new friends. Everyone is a transplant from somewhere else and there are endless opportunities to join activities and clubs. 

However, if you are single it may not be as easy as it is if you are married. Many retirement activities are geared toward couples so single people can have a harder time getting invitations. 

Are you single in retirement? What strategies have you implemented to help you make friends? Reply to the 6-Shot Saturday newsletter with your suggestions. 

Why keep international equities?

Many people wonder what the point of keeping international equities in a portfolio is. It seems as though global equities fall at the time when we need them to be stable or growing, so why bother to include them in our portfolios? Traditionally, they do poorly as compared to other markets, yet including international equities is recommended as a part of having a diversified portfolio strategy. 

I tend to recommend international equities, not for diversification, but for the fact that many fantastic companies aren’t based in the U.S. Think about Toyota, Mercedes, Glaxo, Novartis, and even Ikea. Rather than considering a different asset class to add to your portfolio, choose the best worldwide companies to expand your portfolio to include top-notch mid to large-cap international companies. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [5:23] On making friends
• [8:23] The value of international diversification

LISTENER QUESTIONS

• [12:05] Should I contribute to my Roth 401K or just a 401K near retirement
• [16:12] Are investment advisor fees worth it?
• [26:00] Why haven’t I heard back from the IRS?
• [29:06] Where do my 401K profits go when inflation goes up?
• [32:33] How does the 4% rule apply to dividends?
• [35:22] Is 15% enough to save for retirement?
• [37:20] Why is there a disclaimer about indices at the end of the show?

TODAY’S SMART SPRINT SEGMENT

• [40:43] Be inclusive make an effort to reach out to new people you meet

Resources Mentioned In This Episode

Rock Retirement Club

DoRetirementRight.com

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

We’re back again answering your retirement questions! On the docket for today are questions like whether should you consider taking on a mortgage in retirement, whether it’s feasible to hold only ESG investments in retirement, and if you need life insurance in retirement.

In addition to answering these listener questions, I’ll also share several book suggestions that I got in response to the 6-Shot Saturday newsletter and reflect on insights I learned from my time in Colorado. 

Don’t miss out on upping your retirement game. Press play to hear answers to questions from listeners like you!

Dealing with inflation in retirement

Have you been worried about how you will deal with inflation in retirement? If so, you are not alone. That is why my team and I created an Inflation in Retirement Guide to help you understand and navigate inflation as you approach retirement. In this FREE guide, you’ll learn 6 tactics to consider and practical ways to help you think through the issues that rising inflation brings to retirement. 

6 insights from my time in Salida, Colorado

My goal with the Retirement Answer Man show is to help you navigate not just the financial side of retirement, but also the life side. You need to have both sides in order to really rock retirement. 

If you have listened to the show in the past you may know that my wife and I go to Salida, Colorado, and rent a house for about a month each summer. We love it up there which is why we purchased a lot there last year with the intention of building a home and eventually splitting our time or relocating in the future. 

We just returned from our most recent trip, so I thought I would share a few insights that I gained from my time there. 

1. Set yourself up to experience the things you enjoy. I realized that one of the reasons that I love Salida is that it sets us up to easily do the things we love to do. We love hiking and mountain biking and these activities are easily accessible as opposed to our home in Fort Worth where partaking in these activities requires more planning. In retirement, consider moving closer to the things you love to do. 
2. It’s easier to make friends in Salida. This smaller town has a slower pace and lacks the hustle and bustle of Fort Worth. People are more open to having conversations, so it is easier to make connections.
3. Just do it! Just do the things you enjoy doing. Acting is better than (over)thinking. It is easy to think about doing things rather than acting upon them, but the only thing that will move you forward is actually doing the thing you want to do.
4. It is harder to make decisions when your heart is involved. It is difficult to gain perspective on your own life. Oftentimes, your head goes along with what your heart wants. Listen in to hear how a recent decision backfired on me when I pulled the trigger and acted with my heart. 
5. Home is an important base to have. As much as we enjoy our yearly trips to Salida, a month in a rental never feels like home. 
6. Spend big on the important things and be ruthless about everything else. It is important to strike a balance in life, so make sure that your spending is aligned with what you care about. 

Should we take a mortgage to build our retirement dream house?

This listener is careful with money and has been mortgage and debt free for over a decade. They are looking to build their dream home their “castle in the sky” and are considering whether they should take a mortgage out to build this home. The mortgage would only take 20% of their retirement pension. Is it worth it or should they pay cash for the home? What do you think? Listen in to hear my answer.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [3:30] Insights from my time in Colorado
• [12:38] Listener book suggestions

LISTENER QUESTIONS

• [14:45] Mortgage in retirement
• [22:00] How challenging is it to control where your retirement investments come from?
• [32:03] On the necessity of life insurance in retirement
• [38:41] On credit in retirement
• [42:12] If relying on a dividend approach they need to be diverse

TODAY’S SMART SPRINT SEGMENT

• [45:54] Think about your affluence - are you protecting it? 

Resources Mentioned In This Episode

DoRetirementRight.com - check out our FREE inflation guide to retirement!

BOOK - Red Teaming by Bryce Hoffman

BOOK - Building a Second Brain Tiago Forte

BOOK - My Dear Hamilton by Stephanie Dray

BOOK - Path Between the Seas by David McCullough

BOOK - All That Moves Us by Jay Wellons

BOOK - Five Presidents by Clint Hill

BOOK - The Boys in the Boat by Daniel James Brown

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Are you nearing retirement and wondering how you should pay for large out-of-pocket expenses? Should you dip into your emergency fund, take from your retirement savings, or is there another way? 

We’ll consider this question, hear how Larry is living intentionally, learn how visual aids can help when trying to discuss finances with elderly parents, and discuss dollar cost averaging a lump sum payment on this episode of Retirement Answer Man.

All month we’ll be answering your questions. If you have a question that you would like to submit head on over to RogerWhitney.com/AskRoger and type in a question or use the record a question function to shorten the wait. We love audio questions so we bump those to the front of the line!

Tune in to hear these listener questions plus a summary of what was on my summer reading list. Make sure that you are signed up for the 6-Shot Saturday newsletter to learn all the details about the books I read this summer.

How to pay for big-ticket expenses as you approach retirement 

One listener would like to know the best way to pay for large expenses as she approaches retirement. She has already retired from her career and is now working (for minimum wage) as a teacher’s aide while her husband still works. They live in a high-cost of living area, and while their home is paid for, it requires a bit to keep it up. 

Digging into cash reserves for big-ticket expenses can be scary since it is a drain on the assets, so she would like to know if her husband should decrease his 401K contributions so that they can increase their cash flow. 

This is a good time to ensure that you have enough cash reserves in your after-tax bucket. While you are in the middle of dealing with a large expense it can be challenging to look ahead. But while it is important to meet those immediate needs, it is also essential to plan ahead. 

Take some time to map out your plans for the near future. How long does your husband plan to work? Do you plan to stay in your high-cost-of-living area? Do you plan to downsize? This way you can explore the options you have to discover how to get on a sustainable path for the future. Building a decision-making framework can empower you to improve your situation and your future.  

How I approach reading

Before I share the books that I’ve been reading over the past couple of months, I wanted to share with you my approach to reading so that you can better understand my system and where I’m coming from.

1. I try to make reading my default activity. Instead of looking at my phone or turning on the TV, if I have some extra time, I grab a book and read.
2. The books I read vary based on my interest at the time, but I mostly read nonfiction books about business and retirement. 
3. I always have more than one book going on at a time. I generally have an audiobook and a few different physical books around the house. 
4. I learned a few years back that I don’t have to finish a book and that changed my life! Sometimes I don’t read a whole book, rather, I use certain books like reference books and pick and choose what I want to get out of them. 
5. I prefer physical books to ebooks. I also write, highlight, and underline in my books so that I can easily refer back to them. 

Books I’ve been reading

Now that you understand how I use books and reading in my life you can check out my summer reading list. 

The Lost City of Z by David Grann

Hero of Two Worlds by Mike Duncan

A Tale of Two Cities by Charles Dickens

On the Shortness of Life by Lucius Annaeus Seneca

The Second Mountain by David Brooks  

The How of Happiness by Sonja Lyubomirsky

Originals by Adam Grant

Red Teaming by Bryce G. Hoffman

I’d love to hear any book recommendations that you have. You can simply reply to the 6-Shot Saturday newsletter to let me know what you have enjoyed reading this summer.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

BOOK RECOMMENDATIONS

• [3:30] How I approach reading
• [6:22] What I’ve been reading this summer

LISTENER QUESTIONS

• [14:32] On making your portfolio an all ETF IRA
• [20:21] How Larry is living intentionally in retirement
• [22:39] Dollar cost average or a lump sum
• [27:02] Using a visual aid to help elderly parents understand overspending
• [29:15] Large expenses approaching retirement

TODAY’S SMART SPRINT SEGMENT

• [33:54] Instead of taking big actions find tiny actions that you can do consistently

Resources Mentioned In This Episode

Rock Retirement Club

The Pie Cake episode

Cal Newport

BOOK - The Lost City of Z by David Grann

BOOK - Hero of Two Worlds by Mike Duncan

BOOK - A Tale of Two Cities by Charles Dickens

BOOK - On the Shortness of Life by Lucius Annaeus Seneca

BOOK - The Second Mountain by David Brooks

BOOK - The How of Happiness by Sonja Lyubomirsky

BOOK - Originals by Adam Grant

BOOK - Red Teaming by Bryce G. Hoffman

Michael Connelly books

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Michael Balchan from Heroic and I have been discussing how to live a heroic retirement for the last several episodes. Today, we wrap up this theme and learn to integrate the subjects we have discussed in the past 4 episodes into rocking retirement.

As usual, after the main theme, I’ll answer your listener's questions. If you have a question that you would like answered on the show, now is a good time to ask since next month we’ll focus solely on answering your questions. You can submit your question at RogerWhitney.com/AskRoger. You have the option to either type in your question or leave an audio question. We love audio questions, so leaving an audio recording is like getting a fast pass to the front of the line. 

Rekindle your best self each morning

If you have ever been camping you understand the importance of building a campfire. This camping essential provides heat and a way to cook, however, each night you must turn it off when you go to sleep. In the morning, you rekindle the fire to warm yourself up and start the morning off right.

This is just like living your best self. Each morning you must wake up and consciously rekindle your fire. By setting your intentions, you provide a way to set yourself up for success each day.

Live each moment to create your best life

Since all we have is the now, each moment is an opportunity to live your best life. All you can do is show up one moment at a time to live life fully and completely. Looking back on your life you’ll see a bunch of separate great and not-so-great moments strung together to create a life. 

If you are prepared to show up one moment at a time and live fully and completely you’ll find that those movements create an amazing life. 

Rocking retirement is about living heroically while mastering your finances

Here on this show, in my book, Rock Retirement, and the Rock Retirement Club, we talk about rocking retirement all the time. So it’s important to understand what I mean by rocking retirement. Rocking retirement is integrating the business of retirement with the act of living a heroic life. 

The business side of retirement means getting the financial side of retirement correct. With agile retirement management, you’ll adjust your financial plan in a series of little changes so that you can have the confidence to weather the storms that life throws at you

By living a heroic retirement, you’ll create an amazing life for yourself each day by showing up and consciously choosing to become a better person.

The RRC can help you live a heroic retirement

The Rock Retirement Club helps people with both sides of their retirement journey. Marrying the two together is how to really rock retirement. 

The Rock Retirement Club is a safe place both online and in person to take the baby steps to set you on your way to rocking retirement. In the club, you’ll receive a world-class education from financial and retirement experts while walking this journey with other like-minded individuals who are traveling the same path. 

Our next enrollment for the RRC is at the end of October, so be on the lookout if you have been considering joining the club. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [4:38] It can be easy to beat yourself up for being human
• [9:52] How living your best self has to do with rocking retirement

LISTENER QUESTIONS

• [12:12] Does Social Security count 401K withdrawals as income
• [14:58] Single retirees are often struggling alone
• [16:30] Should we charge for the podcast?
• [17:37] Does it make sense to sell higher fee funds and reinvest in lower fee funds?
• [24:00] On balancing the portfolio in today’s market

COACH’S CORNER WITH KEVIN LYLES

• [30:45] Finding Kevin’s retirement identity

TODAY’S SMART SPRINT SEGMENT

• [36:00] Discover a morning ritual

Resources Mentioned In This Episode

BOOK - Atomic Habits by James Clear

Episodes on retiring single: 210, 219, 220, 221, 222

Heroic app

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

“You are who you are here and now” – Bruce Lee

We all live life with the best intentions, yet rocking retirement is all about what we are actually doing–not intending to do. Do the things that you say are important to you now.

In this episode of the Living a Heroic Retirement series, you’ll learn how you can begin to live a heroic life today. Michael Balchan and I break down what we are doing to live our best lives. We bring the macro level that we have been discussing in the past few episodes down to the micro level. Press play to learn how to embody your virtues by taking baby steps towards your goals.

Life is like a game

When you are young, you going to school is like a game where you get motivation and rewards for doing well. You get to level up each year and then move on to the next stage. Work is also like a game. There are boundaries, a scorecard, and of course, more leveling up. 

In retirement, you have a clean slate, but since we are already so gamified you might as well continue playing. The difference is, that now you get to decide the rules of the game you are playing. Take the game and personalize it to your own needs. 

How to play the game

Your virtues are how you want to play the game. Once you decide which virtues ring true to yourself then you can set targets that align with those virtues. Set 3 targets that you can do today to make sure that you are living a life that aligns with your virtues. These targets are a way to make commitments to the behaviors that you want to act upon. 

When you set your intention your attention follows. 

Remember that this is your own game so set yourself up for success. Listen in to hear how Michael and Roger play their games differently using the Heroic app. 

Why celebration is important

It is important to celebrate your wins, but many of us have a hard time doing so. Celebrating your wins can feel inauthentic, or manufactured. However, celebrating acting on your virtues use positive reinforcement for your brain. Positive reinforcement creates a reward system for your brain to help you rewire and create positive habits. By celebrating your wins you create an internal sense of joy and satisfaction and therefore become more likely to make positive decisions

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [4:03] In retirement, you get to decide the rules of the game you are playing
• [8:50] Set targets
• [18:24] Be excited about showing up in the next moment 
• [19:52] Why is it so important to celebrate the wins?
• [29:38] The heroic app gamifies living out your virtues

LISTENER QUESTIONS

• [36:09] Bart’s inherited IRA question
• [38:48] David’s question on the pie cake
• [47:38] Adam’s simple question
• [49:51] How to fund a hybrid long-term care insurance policy

TODAY’S SMART SPRINT SEGMENT

• [53:33] Set one target that supports living your best self

Resources Mentioned In This Episode

The Heroic app

BOOK - 12 Rules for Life by Jordan Peterson

BOOK - Beyond Order by Jordan Peterson

BOOK - Top 5 Regrets of the Dying by Bronnie Ware

BOOK - An Audience of One by Robin Dellabough

The Long-Term Care series - Episodes 311, 312, 313, 314

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

“What one can be, one must be.”--Abraham Maslow

Do you know who you want to be in retirement? Here at the Retirement Answer Man, we want to give you the confidence to not just survive retirement but to rock retirement. To truly rock retirement you need to have both a financial and non-financial plan. 

Over in the Rock Retirement Club, we have licensed Michael Balchan’s Heroic app and in these past few episodes, we have been discussing how to live a heroic retirement. Today we’ll discuss the 3 domains that are important to develop aspirational identities. You’ll learn why this is important and how to create your own aspirational identities in these 3 areas. 

Make sure you are signed up to 6-Shot Saturday so that you can get the free workbook to help you develop your identity in these 3 domains. 

Break big things down into smaller chunks

How do you run a marathon? One step at a time. By breaking down big things into smaller chunks you can string them together and keep them in motion. 

It’s okay if you don’t know what you are going to do with your entire life. The goal isn’t to have one giant all-encompassing purpose that you strive towards forever. Instead, aim for Ikigai. Ikigai is the current goal, meaning, or purpose that you are working towards right now. 

Identity drives behavior

Most people think that sour feelings drive our behaviors but this isn’t true. Our identity drives our behaviors which then drive our feelings. Our identities are linked to what we do and who we are is what we repeatedly do. Every behavior we display and action we complete is casting a vote for the person that we want to be. 

Think about who you are when you are at your best. You can draw from previous experience or visualize the person that you want to be. That exemplar self is who you are striving to be. 

The 3 identity domains

Our identities are so often linked to what we do for a living so when we retire its like we lose a part of our identity. Now that you are no longer the VP of sales, the corporate attorney, or the head of HR, who are you? You have a blank slate to work from and the ability to reinvent yourself in retirement.

Breaking identity down into 3 domains helps you understand how the different parts of your life intertwine. 

1. Energy is the foundation of everything. 
2. Work doesn’t have to mean a traditional career. It can mean your avocation, activities, or hobbies.
3. Love means how you show up relationally with your partner, family, friends, or even acquaintances. 

When choosing your new identity, it doesn’t have to be set in stone. Pick something that means something and is important to you. If it works well, then that’s great. If not, switch it up. Playing around with your new identity will help you consider how you want to live up to your best self.

Listen in to hear how I identify with each of these three identity domains.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [3:25] the 3 identity domains
• [6:45] Ikigai - what is the current thing you are working towards?
• [14:34] Be willing to break big things into smaller chunks
• [18:56] Identities drive behaviors that drive feelings
• [30:14] Your work identity

LISTENER QUESTIONS

• [41:00] Should Randy sell his home to enjoy the go-go years?
• [49:09] Steve’s suggestions
• [51:46] How to help Cheryl’s parents
• [56:58] Santiago’s Social Security question

TODAY’S SMART SPRINT SEGMENT

• [1:00:32] What can you be at your very best in energy, work, and love?

Resources Mentioned In This Episode

Boomer Benefits

Heroic

BOOK - The Happiness Equation by Neil Pasricha

BOOK - Ikigai by Hector Garcia

BOOK - Atomic Habits James Clear

BOOK - Hero’s Journey by Joseph Campbell

Tony Robbins

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

This month on the Retirement Answer Man we are learning how to live a heroic retirement. Michael Balchan joins me to discuss what it takes to be the hero of your own story. On this episode, we explore the virtues that heroes embody. 

If you are looking to be an exemplar then you’ll exhibit some core universal virtues plus some that are uniquely your own. Learn about these virtues and what it takes to be a hero on this episode of Retirement Answer Man.

Keep striving toward your ideal self

Hercules is a typical hero. We often think of him as being a hero because he was strong, but it was because he put himself on the line and faced mythical beasts to help others. 

Before you can help others you must know yourself and what you are capable of. Striving to be your best self is a heroic act. Self-actualization–expressing the best version of yourself–is impossible yet continually working towards self-actualization will make you a better person.

Striving toward your ideal self is an asymptotic act, like the curved line in mathematics that gets closer and closer to another line without ever touching. You may get closer and closer to your ideal but never actually realize it. You may continually advance on your best self but you’ll never actually reach your highest form. What is important to recognize is that even though you will never reach your ideal, it is important to keep striving.

4 Universal virtues

Every ancient tradition recognized 4 universal virtues

1. Wisdom is knowing the game you are playing and playing it well.
2. Self-mastery is having the discipline, temperance, and structures in place so that you can pause before responding. 
3. Courage comes from the heart and allows you to take action in the place of fear.
4. Love means being present, connected, genuine, and encouraging.

Put your virtues into action

Rather than seeing yourself as falling short of your ideal self, if you keep doing the hard work involved in self-improvement you will continually improve yourself. Instead of judging yourself based on a past or future outcome, study your process. Are you striving to do your best at this moment? If you didn’t make the right choice, try to do so next time. Keep going and do what needs to be done. Our ideals are like a guiding light rather than a distant shore.

You won’t want to miss this episode to hear the rest of the virtues of positive psychology. Listen in to learn how you can apply the virtues and actions test to your heroic retirement quest.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [3:11] You will never achieve self-actualization
• [13:53] The 4 ancient virtues
• [21:12] The 5 virtues of positive psychology
• [27:52] Personal virtues

LISTENER QUESTIONS

• [32:33] A bucketing question
• [35:30] A cash value insurance question
• [39:41] Optionality is undervalued
• [42:50] A Social Security survivorship benefit question
• [46:00] How to protect your legacy from financial abuse
• [51:40] Thoughts on Connie’s question from episode 434

TODAY’S SMART SPRINT SEGMENT

• [54:24] Be aware of the moment between stimulus and response

Resources Mentioned In This Episode

Michael Balchan

New Retirement calculator

Tal Ben Shahar

BOOK - Mindset by Carol Dweck

BOOK - Rethinking Positive Thinking by Gabriele Oettingen

Personal Virtues test 

Episode 434 with Connie’s question

FINRA Brokercheck

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

You may be planning a peaceful retirement, an active retirement, or an engaged retirement, but have you ever thought about living a heroic retirement? Over the course of the next several episodes, we’ll explore what it means to live a heroic retirement with Michael Balchan from Optimize. 

In this series, you’ll learn how to build a framework to lean into the kind of person you want to be every day. I’m excited to bring this teaching that we already use in the Rock Retirement Club to you. Listen to this episode to learn what a hero is and how you can be the hero of your own retirement. 

Michael Balchan understands the search for meaning

Michael Balchan is 36 and not approaching retirement. However, he is working on his second act. His first career was as a commodity options trader and after achieving all of the outward trappings of success he had to reassess his life. He recognized that he had achieved everything he set out to achieve yet he felt that his life was a bit hollow. This led him to explore what would give him true satisfaction. 

Michael understood that the default path that he had fallen into brought wealth, fame, and popularity. These extrinsic goals were not bad goals to have, but they gave him no inner fulfillment. He then began to recognize that a deeply meaningful life comes from expressing the best version of himself in service of something greater than himself.

What is a hero?

Oftentimes, people’s second act steps away from the outward displays of success. They shift from a “what can I get” mentality to one that explores “what can I give?” This is why we are exploring the concept of the hero. 

The word hero comes from the Greek word and means the protector, but not necessarily in the way that you think. Greek heroes are protectors of the values and community that they hold most dearly. Heroes do the hard work by taking courageous action with their secret weapon: love. 

Heroes live a life of deep meaning by intentionally expressing the best versions of themselves in service of something greater. You can be a hero in your own life by looking for the places where you fall short and taking courageous action to improve them. Lean into the amazing abilities that you already have. Consider how you can help or connect with others.

How to find your purpose

The top tier in Maslow’s Hierarchy of Needs is self-actualization, however, it is said that there is actually a level beyond self-actualization: self-transcendence. We can go beyond self-actualization in service of something bigger than ourselves. 

However, being a hero doesn’t mean that you have to set out to save the world. You get to choose your sphere of influence. Being a mentor, a great neighbor, a grandparent, or a spouse are all ways that you can serve others. The size and scope of your impact is up to you. 

Upon retirement, you may not know your reason for waking up in the morning. Your purpose gives you energy and vitality so it is important to think about what lights you up. To find your purpose it can be helpful to look back at what you have done in the past. Look at your past experiences and consider what brought you meaning. 

Find the ways in which you already make an impact in what you are doing. How are you already creating purpose and meaning in your life? Start to look for other opportunities to make contributions in the lives of others.

Make sure to come back next week to learn the core virtues you can use as guideposts to build intentionality into your retirement. If you found this episode helpful, make sure to share it with a friend!

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [6:00[ What is a hero?
• [18:48] You get to choose your sphere of influence
• [21:05] How to find your purpose

LISTENER QUESTIONS

• [30:08] How long does it typically take to recover from a bear market?
• [35:55] Should Bill’s wife take Social Security now or wait for Bill’s delayed benefit?
• [38:31] How should Steven allocate his mom’s savings?

TODAY’S SMART SPRINT SEGMENT

• [43:40] Find the ways in which you already make an impact in your life

Resources Mentioned In This Episode

LTCI Partners

Holding Out for a Hero by Bonnie Tyler

BOOK - The Second Mountain by David Brooks

BOOK - Flourish by Martin Seligman

BOOK - The How of Happiness by Sonja Lyubomirsky

William Damon

Heroic App

Maslow’s Hierarchy of Needs

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Dealing with a bear market after the trials and tribulations of the past 3 years may have you feeling like you are being punched while you are down. Many of us are feeling burnt out and are wondering when the punches will ever end. 

In this episode of Retirement Answer Man, we’ll discuss how we can deal with this issue. Kevin Lyles joins me in the Coach’s Corner to offer his perspective on dealing with burnout. I’ll also answer some fantastic listener questions that range from how to decumulate during a bear market to how to plan for retirement with a disengaged spouse. Don’t miss this episode especially if you feel like you might soon be down for the count. 

It seems like the world keeps punching us while we’re down

The past 3 years have dealt us one blow after another. Covid took us all by surprise in March of 2020 and was followed quickly by the fastest bear market in history, a total economic shutdown, quarantines, work-life disruptions, and so much worry about our health and the state of the world. 

2021 wasn’t much better with the political polarization of the election, Covid’s continuation, mask and vaccine questions, and more

2022 brought raging inflation, rising interest rates, war, and worldwide instability. And still, Covid rages on. 

Our normal rhythm of life has been disrupted. Without that rhythm, it's hard to create stability to ground yourself. No wonder so many of us are feeling burned out. We have more than our fair share of dents in our armor. 

Incremental changes are often the best course of action

It makes sense if you are feeling worn out, but how you respond to these stressors is important. It may seem like drastic action is the best action to take, but during challenging times, often incremental changes are the best course of action. Small changes can help you avoid major unforced errors.

You may want to take a cue from Muhammad Ali and take the punches while you are pinned against the ropes and conserve your energy until you have the opportunity to react.

Steps you can take to deal with burnout

If you are feeling the effects of the past 3 years weighing down on you conserve your energy and then see if you can take these steps to take action.

1. Acknowledge what you have been through. Give yourself some grace for all that you have suffered.
2. Bring past successes to mind. You have the capacity to get through hard things. Think about your past experiences to remind yourself of your resilience.
3. Reexamine those around you. Search for people who are doing what you want to do. You won’t be able to follow their exact path, but you could find ways to integrate some of their strategies into your life. Walk with the wise to become wise. 
4. Surround yourself with support. Surround yourself with people who encourage you and are supportive of your journey. This includes your network of friends and acquaintances as well as the media you choose to consume. 
5. Build the confidence to punch back. Take care of yourself and your energy. Simple self-care is important when you are getting pummeled. Exercise, practice gratitude, and help others. Self-care will help ground you when you are burned out. 

Make sure to check out next month’s series on how to build a heroic retirement. Don’t forget to reply to the 6-Shot Saturday newsletter if you have any advice for Anna on planning retirement with a disengaged spouse. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [1:30] We have all been taking a beating over the past few years
• [7:23] Rhythms ground us
• [11:25] Steps to take to deal with burnout

LISTENER QUESTIONS

• [19:38] Should I reallocate during a bear market?
• [28:50] How to decumulate during a bear market
• [34:17] How to decide between taking a pension in a lump sum or monthly payments
• [38:46] How to deal with a disengaged spouse

COACH’S CORNER WITH KEVIN LYLES

• [46:21] Reframe your negative thoughts to find a positive outlook

TODAY’S SMART SPRINT SEGMENT

• [55:14] Acknowledge how much you’ve been on the ropes this year

Resources Mentioned In This Episode

Boomer Benefits - check them out at no cost to you!

BOOK - The Expectation Effect by David Robson

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Does navigating this bear market in retirement terrify you? If so, you are not alone. No one can (or should try to) predict what will happen next. 

A financial advisor’s advice during bear markets is often ”stay the course,” however this can leave one feeling powerless. On this episode of The Retirement Answer Man, Tanya Nichols and I analyze what you can do if you are feeling terrified in a bear market, you’ll also learn how to navigate Social Security and an ex-spouse, and how to use retirement funds to self-insure long-term care. Press play to hear Tanya and I answer these listener questions and more. 

What to do when you are terrified about your financial future

It is easy to be terrified about the future when every day you watch the value of your accounts drop precipitously across the board. Everywhere you look the markets are getting worse: the Nasdaq, the S&P 500, and even bonds are plummeting. The vision of the future that seemed so bright just months ago is no longer so optimistic. The words “I’m terrified” are not an overstatement when you are no longer working and you’re living on your life’s savings.

What you can do in a bear market besides “stay the course”

Tony is worried about the current market volatility and wants to do something besides “stay the course.” He understands that markets bounce back, but he also realizes that his time horizon may be shorter than it takes for the market to bounce back. He feels his dream retirement slipping further and further away. 

Unfortunately, no one can predict what the future will bring, so it is important to try not to beat the system during a bear market. If you jump out of the market at the wrong time your accounts may never recover. 

Instead of trying to calculate what will happen, it is important to build a framework to navigate these difficult financial situations. When you are confident in the framework you have built you’ll be able to think through challenges thoughtfully and avoid overreacting one way or the other.

Your framework can help you map out where you want to go and how to get there. If you are feeling terrified, now is a good time to revisit your plan of record. Is it feasible? Is it resilient? Making small iterations while sticking with your carefully laid out process will ensure that you make it through these unsettling times.

Doing something during a bear market provides a sense of agency

Creating an action item can help give you a sense of agency when you have so little control of the big picture. That action item could be something as small as canceling Netflix, checking your net worth statement, or even reassessing your risk tolerance. However you choose to take action, remember to consider how that action fits into your overall financial plan. 

Using retirement funds to self-fund long-term care

Long-term care insurance is expensive which can make planning for a long-term care event challenging. As with any financial plan, it is important to plan for long-term care in an organized way. Rather than writing off long-term care insurance as too expensive, consider all the options. One resource you can use to explore the various possibilities is LTCI Partners. 

Listen in to hear Tanya’s guidance on rebalancing, Social Security, and tax rates. Don’t miss the answers to all kinds of listener questions. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [2:08] Feedback from my recent conversation with Amy Bloom
• [6:48] Why I’m terrified

LISTENER QUESTIONS WITH TANYA NICHOLS

• [15:40] Claiming Social Security based on an ex-spouse’s benefit
• [17:24] What to do when you are terrified about the future of retirement
• [26:18] A tax rate question
• [28:21] What to do with a CD to pay for a parent’s assisted living
• [30:19] On using retirement funds to self-fund long-term care
• [37:17] Guidance on rebalancing

TODAY’S SMART SPRINT SEGMENT

• [44:38] Review your net worth statement and think about what you can do

Resources Mentioned In This Episode

LTCI Partners - take the long-term care insurance questionnaire!

Align Financial

Behavior Gap with Carl Richards

042019.pdf">Vanguard white paper on rebalancing

Episode 442 with Amy Bloom 

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

This month we are answering your listener questions. If you have a question that you would like answered on the show you can jump the line a bit and take the fast track by submitting an audio question. Head on over to RogerWhitney.com/AskRoger and hit record to submit your question.

Today I answer questions on a broad range of topics from paying off a mortgage on a rental property to determining the right balance for investment when there is a significant pension to whether to use a loan to pay for life while the market picks back up. Listen in to hear my thoughts on these questions so that you can not just rock retirement but rock life as well. 

Update your net worth statement (even if it is painful to look at)

How often do you update your net worth statement? It is important to do so annually or every 6 months. I recommend this exercise because your net worth statement is a fantastic tool that shows you the financial impact of the decisions you make. 

However, due to the recent market volatility, opening your monthly investment statements isn’t as much fun as it used to be. Regardless of this fact, it is still important to understand where you stand financially so that you can work to improve your financial decisions. 

Should Tyler pay off his rental property mortgage? 

Tyler is still young, has no debt besides his rental property, and is a great saver. He is wondering if he should pay off the mortgage on his rental property. The traditional wisdom is to keep the mortgage. Since he has a low-interest rate, mathematically it doesn’t make much sense to pay it off. But that doesn’t mean he shouldn’t pay it off. 

These types of decisions are rarely about math. It is important to factor in personal feelings as well. Tyler needs to consider all the factors involved and come to a decision that is uniquely his own. There is no wrong answer to this question. What is most important to consider is which choice will give him peace of mind. 

Should all of Adam’s investments be in equities since he’ll have a pension? 

Adam will soon retire from the military with a $70,000 per year pension. He feels that the traditional 60-40 retirement portfolio won’t be aggressive enough since he has such a large pension. So, he is wondering if all his investments should be in equities. 

Instead of building your portfolio first, start by creating a retirement plan of record to forecast what you need to live a great base life. Consider your income from social capital (Social Security, pension), financial capital (investments), and human capital (work). 

Once you understand how much financial capital you will need, then you can build your pie cake which consists of an emergency fund and a secure income floor with 5 years of spending. Since you have 5 years of prefunded income, then you can invest as aggressively as you would like. This system is a fantastic way to help guide your spending in retirement. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [2:25] Opening your monthly statement isn’t as fun as it used to be

LISTENER QUESTIONS

• [5:00] Should Tyler pay off his rental property mortgage?
• [9:40] Should all of Adam’s investments be in equities since he’ll have a pension? 
• [16:50] Is there a method for deciding the best location to move to in retirement?
• [23:44] Using a loan vs. cashing out on stocks during a bear market
• [29:40] On reframing old age
• [31:38] Pros of cons of timing retirement

TODAY’S SMART SPRINT SEGMENT

• [37:00] Update your net worth statement

Resources Mentioned In This Episode

Boomer Benefits

Ted Lasso

Episode 412 - What Is a Retirement Plan of Record?

Episode 310 - Investing in Retirement: The Pie Cake 

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Many people are concerned about markets and inflation right now, but rather than focusing on this in today’s episode, I’ll answer your investment strategy questions. I choose to focus on strategy because if you can create a feasible, resilient retirement strategy, you’ll be able to weather all kinds of economic uncertainties.

Make sure to stick around until the end to hear an interesting interview that may challenge you to rethink your preconceived ideas. You won’t want to miss it if you are open to hearing different perspectives. 

If you are looking for a fast pass to get your retirement question answered, record an audio question at RogerWhitney.com/askroger.

Unfortunately, you won’t win retirement

I have some bad news for you. You aren’t going to win retirement. There is no way you will figure everything out because there is no right answer. 

Despite this fact, you will be okay. By intentionally working through your decisions you’ll be able to enjoy retirement to its fullest. Not everything will turn out the way you want, but if you work through the decision-making process with the spirit of a scientist, you’ll continually improve. When faced with the results of a poor decision, take time to dissect what went wrong so that you will be able to improve your decision-making the next time around. 

Learning from your mistakes instead of stressing over them will help you improve your decision-making process so that you’ll achieve better results in the future.

How to account for uncertainty in retirement?

When creating a retirement plan, any room for error is scary. Even a 1% uncertainty can be unsettling. So what kind of market returns should one anticipate when using retirement calculators?

The problem with retirement calculators is that you can’t believe the calculator. None of the scenarios that the calculator proposes will actually happen. This makes long-term planning hard to predict. 

It doesn’t matter how much you analyze your future spending, more accuracy will not improve precision. 

You can’t know what your spending will be in 10, 20, or 30 years, which means that you can’t make life decisions based on an imagined future. Rather than trying to completely remove uncertainty, make reasonable assumptions to manage that uncertainty. Managing uncertainty is the essence of retirement planning. 

A feasible, resilient plan will see you through retirement

Once you figure out the basis that you need to live a great life in retirement then you can organize a feasible plan around that great life. Give yourself optionality by making your plan resilient. With your feasible, resilient plan you can use long-term calculations to plan for the short term. 

By creating a resilient plan you’ll create slack in the system so that you can change your mind as you change over time. Managing uncertainty instead of trying to eliminate it will give you agency and build confidence in your retirement plan.

Listen to the answers to all sorts of retirement strategy questions and make sure to listen until the end to hear the riveting interview with Amy Bloom. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

LISTENER QUESTIONS

• [4:50] Should Jennifer count on an average market in retirement?
• [13:52] Should I worry about poor investment returns or look for alternatives?
• [23:42] What about using laddered ETFs rather than a bond ladder?
• [25:07] On my language usage
• [26:40] On using a 72T before age 59.5
• [30:45] Should Dan continue to hold a life insurance policy if his house is paid off?
• [35:03] How to leave behind your life story

INTERVIEW WITH AMY BLOOM

• [40:16] Why did Amy choose to share her story?
• [43:00] When did Amy and Brian approach this topic?
• [50:25] How to be helpful with a life-changing diagnosis
• [51:27] On how to approach this situation
• [54:30] How they navigated the logistics
• [1:01:26] How did the family react?
• [1:04:43] What did Amy learn from this experience?

TODAY’S SMART SPRINT SEGMENT

• [1:09:19] Reassess your relationship with the internet and news

Resources Mentioned In This Episode

LTCI Partners

Dignitas

BOOK - In Love by Amy Bloom

Episode 441 - How to Leave a Lasting Legacy

Fidelity Retirement Calculator

Fidelity 72T calculator

Dan Miller

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

If the market outlook has you feeling uncomfortable, you are not alone. This discomfort may cause you to want to change course, but consider that moments of extreme discomfort are often reverse indicators. Extreme discomfort can mean that you are on the right track to grow in a new direction. 

On this episode of Retirement Answer Man, I answer your questions about choosing a financial advisor, how to weather tumultuous financial markets, and using a Roth 401K. Learn what you can do in the midst of an uncertain future by pressing play. 

Is this the big one?

Weathering market downturns can be like weathering a storm. When you are in the thick of it you may wonder if this is the big one that will wreck your home and change your life. Should you just hold on tight and hope that everything will all work out? 

No. No one can hold your hand and assure you that your finances will recover.

The rules of investing change in retirement

The rules of investing when you are in the accumulation period of life don’t work the same in when you are decumulating assets. 

Since you are nearing or already into retirement you don’t have a 40-year investment timeframe to work with, so you may not be around for the next market upswing. You're in a period of life where you will need money from your investments in a short time frame. 

This is why you’ll need a well-thought-out strategy that can help you to stay agile. As the situation unfolds, you can make little adjustments as needed. Staying agile will help you maintain flexibility and retain agency. 

In a situation that feels out of your control, it is important to find ways to retain agency to do what you have to do to control the things that you can. You don’t want to feel powerless, so focus on what you can control. 

Watch out for false prophets

No one can predict what will happen in the future. However, there are many out there that claim that if you follow them they will lead you down the right path. 

We have to accept our own uncertainty and refrain from trying to figure it all out. Instead of trying to predict the future or following false prophets, it is important to create a plan that you can follow to actively navigate through these tumultuous waters which will see you through any eventuality.

How to know when it is time to switch advisors

How can you know if your financial advisor is doing a good job? What are some red flags that indicate that you should reevaluate your relationship with your advisor?

One listener is concerned about his financial advisor since they had two misunderstandings in the last two years and is wondering if he change advisors.

When researching financial advisors look for a specialist that can advise you through your specific financial situation. Consider whether they have the skillset and expertise to handle the problems and opportunities of your specific situation. Do they focus on what you need?

Is your advisor an active thinker that makes decisions or do they simply follow a checklist? Since the decisions that you are making aren’t crystal clear, it is important to have a process to think through decisions in an organized manner. Does your advisor help you with this? Do they walk you through the pros and cons of each decision?

Is the advisor product-focused or process-focused? If they are product-focused then this is a red flag. Another red flag is if they focus on trying to predict what the markets will do. Since no one can predict the future, it is important to find someone who will focus on the things that are within your control. 

Listen in to hear what else you should consider when choosing a financial advisor and when to consider finding a new one. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [3:23] Moments of extreme discomfort are reverse indicators

COACH’S CORNER

• [7:38] Kevin wants to give to the kids while they're still here
• [12:15] On giving money without strings attached
• [17:25] Kevin is relearning to show his true colors

LISTENER QUESTIONS

• [19:39] How to know when it is time to switch advisors
• [34:05] What gives us the confidence that we will recover this time?
• [41:50] Should Jen switch to a Roth 401K?
• [48:23] What to use as a yield for net present value calculations

TODAY’S SMART SPRINT SEGMENT

• [50:07] Experiment with digital minimalism for a week

Resources Mentioned In This Episode

BOOK - The Checklist Manifesto by Atul Gawande

Boomer Benefits

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

We all want to leave a legacy to those we love, but leaving a legacy doesn’t mean simply making a will. To create a lasting financial and nonfinancial legacy you need to have a strategy that you can rely on. Today you’ll learn the steps to take to create a lasting legacy.

Leaving a legacy is different from estate planning

Often times we read about a hot investment or retirement planning tip in an article or hear some equally savory advice in a podcast and we jump to take action on it rather than thinking about how it could fit into our overall plan. I call this letting the tail wag the dog. 

Instead of letting the tail wag the dog, think about your actions first. Stop for a moment and think about how that new shiny idea or product would fit into your overall retirement plan. When you have a goal-based plan in place, it allows you to think through decisions in an organized way. You’ll want to use similar methods to build a plan to create the most impactful legacy that you can.

How to begin creating your legacy plan

There are a couple of steps you can take to begin creating a strategy that will allow you to develop a lasting legacy. 

The first step is to consider what you can afford to do. You can do this by determining how much excess capital you have. This can be a tricky number since there are so many unknowns to consider. These unknowns make it hard to determine how much you will have at the end of your life. 

Consider what is feasible considering your resources and your projected spending. You can gain a better understanding by using a plan of record. If you have never used a plan of record, keep your eyes open for this week’s 6-Shot Saturday newsletter to get a free template. If you aren’t signed up for the newsletter, head on over to RogerWhitney.com to fill out the form and subscribe. 

What are your legacy goals?

Now that you have determined what is feasible given your life vision and resources you can move on to step 2. Consider what kind of financial and nonfinancial impact you want to have. What do you want to accomplish?

Do you want to be able to contribute to your children’s retirement savings? Or maybe you want to help them buy their first home. 

Do you want to create a nonfinancial impact by developing the tradition of having a weekly family dinner? Do you plan on being an exemplar and coaching them through tough choices?

Create intentionality with your legacy strategy by framing it in financial and nonfinancial ways and considering the impact you want to have during and after your life. 

After these first two steps, you can begin to create your strategy. You’ll want to think about maintaining flexibility with your strategy since markets won’t always cooperate with your plans. Your legacy should be built with discretionary money. The tactics will come easy if you focus on creating a strategy first. Listen in to hear how to build your lasting legacy. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [2:43] Doctors don’t want you to engage and ask questions
• [8:00] Leaving a legacy is different from estate planning
• [13:17] What impact do you want to have during your life?
• [18:09] Take time making large stake decisions
• [25:50] The tactics are easy if you take these previous steps first

LISTENER QUESTIONS

• [27:22] The differences between the representative payee program and advanced designation in Social Security
• [32:20] How to create a discount factor using a household balance sheet
• [40:09] My thoughts on taking Social Security at 68 instead of 70
• [41:25] How the IRMAA brackets work
• [45:30] Reimbursing your Medicare Part B premiums from your HSA

TODAY’S SMART SPRINT SEGMENT

• [47:05] Map out what kind of financial and nonfinancial legacy that you want to leave

Resources Mentioned In This Episode

BOOK - Retirement Planning Guidebook by Dr. Wade Pfau

SSA.gov/payee

44-ext.pdf">SSA-44

How to Be a Better Advocate for Your Health

LTCI Partners

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

When you think about leaving a legacy do you immediately think about passing on your assets? 

What may be more important than passing on money is leaving behind a nonfinancial legacy to those that you love. Have you considered how you will do this? 

If you would like to leave more than just a trust fund to your family then you won’t want to miss this episode of Retirement Answer Man. You’ll learn about setting a nonfinancial legacy objective, plus strategies, tactics, and more.

Should you panic about a bear market?

I just want to acknowledge that it can be challenging to have confidence in your retirement plan right now. We are now in a bear market which means that stocks are down 20% from their highs. That can give you plenty of anxiety, but since that bear market is paired with decreasing bond prices, this can lead to outright panic. 

Now is the time to reflect on your retirement plan. If you have created an objective-based agile retirement plan you will be able to weather this storm. Have confidence in your strategic plan. 

What is the objective of leaving a nonfinancial legacy?

It will be nice to leave money for your loved ones but wouldn’t you like to leave more? 

To truly leave a legacy you need to be an exemplar. An exemplar is defined as one who serves as a role model or an example. 

Even if there is a gap in where you are in life and where you would like to be, your children and grandchildren are learning how to navigate the world based on your example. They emulate you, so being an exemplar is the best nonfinancial legacy that you can create. 

The more you can encourage others the better exemplar you will be. To encourage means to give courage to someone else. Give your loved ones the courage to lead their best lives. Help them on their journey to be their best selves. You can use finances to help others on their journey but encouragement is even more important.

Strategies to use to leave a nonfinancial legacy

Life is full of the mundane, the day today. But the peaks, pits, and transitions are the flagship moments that we remember. These are the moments that influence how we view the world. If you can help someone during one of these moments in their lives, it may go a long way in transforming their future. 

You can help your community by looking out for these moments in their lives and accentuating them. During the peaks, help them to put an exclamation point on that moment in time so that they can look back and reflect on that high. 

You won’t be able to fix their pits, but you can show up and help them through. 

An encouraging word can help mark transitions in ways that you may not predict.

Fill in the pits. Mark the transitions. Celebrate the peaks. This is how to leave a lasting legacy.

Listen in to hear how you can help your loved ones be the best versions of themselves through your nonfinancial legacy. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [3:22] What is the objective of leaving a nonfinancial legacy?
• [9:05] Strategies for leaving a nonfinancial legacy
• [17:55] Tactics for creating a nonfinancial legacy

LISTENER QUESTIONS

• [20:52] How to use a solo 401K
• [28:28] Should you buy one $10,000 Ibond or multiple smaller amounts?
• [31:02] The pro-rata rule and Roth conversions
• [35:35] How can non-sporty people add exercise into their lives?

TODAY’S SMART SPRINT SEGMENT

• [39:37] Listen to somebody with full presence

Resources Mentioned In This Episode

BOOK - The Power of Moments by Chip Heath

BOOK - Giftology by John Ruhlin

BOOK - Tiny Habits by BJ Fogg

IndividualK.com

Check out Boomer Benefits, their services are free to you!

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

We all want to leave a legacy behind after we pass. The legacy you chose to leave is up to you. This episode is part of a 5 part series on leaving a lasting legacy. Today’s episode focuses on leaving a financial legacy. Make sure to look out for the next episode so that you can learn how to leave a non-financial legacy. 

Subscribe to 6-Shot Saturday

We also have the answers to several listener questions on this episode and many others. To submit your own questions for me to answer on the show simply hit reply to the 6-Shot Saturday newsletter. If you aren't subscribed, consider signing up to receive a weekly summary of the show along with any helpful links or tidbits that I find interesting and want to pass along. 

The difference between estate planning and financial legacy 

Estate planning and leaving a financial legacy are not the same. There is a difference between the two. When you pass away you will leave behind property, financial assets, and maybe some liabilities. Estate planning is the official process of closing the books on your financial life. If you leave behind more assets than liabilities then those assets will have to go somewhere. The probate process spells out how that will work. 

You get to decide how to distribute your assets. When deciding who will receive your assets it is important to analyze the outcomes you are trying to achieve. This process is the way to leave your financial legacy. 

Planning the outcomes 

If you are married, it is important to ensure that your surviving spouse financially secure. That is usually the first consideration in leaving a financial legacy. 

Those that have children often choose to leave their legacy to their children, others choose to leave their bequeath to friends or charitable organizations. It is important to remember that if you don’t approve of the financial trajectory that one of your children is on, you don’t have to enable their poor behaviors. You get to choose who to bless with your assets and how. You do not have to support behaviors that you don’t want to support. There are strategies you can use to help your family while at the same time protecting them from themselves. 

There are obstacles that could stand in the way of achieving the financial legacy outcomes that you desire. Our culture makes discussing money a taboo subject. This could stand in the way of the outcome you seek. Many people avoid planning their legacy and choose to ignore this type of plan. A lack of planning will mean that you won’t achieve the outcome you seek. 

Strategies and tools to leave a financial legacy

When you pass you’ll want to transfer your assets as efficiently as possible. While a will is the first tool that you should have in place, many people are surprised to realize that a will is not that efficient since it must pass through probate. There are other ways that you can pass your assets on to those you love without having to go through the probate process. 

A living trust is a revocable trust that bypasses probate. The trust document not only states who receives the assets, but it can also define how those assets are managed.

Another way to efficiently manage your financial legacy is through beneficiary designations. By designating your beneficiaries in your IRAs and 401Ks these assets will bypass probate and flow to your chosen beneficiaries. Make sure that you revisit your beneficiaries regularly to ensure that they are up to date.

Listen in to hear tactics you can use to leave your legacy both during your life and beyond. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [3:20] Estate planning and leaving a financial legacy are not the same
• [6:13] What outcomes do you want?
• [10:45] Obstacles to the outcomes
• [12:14] Strategies and tools to use to leave your legacy
• [17:48] Tactics to use to leave a legacy during your life
• [23:12] The ways you could give

LISTENER QUESTIONS

• [26:08] Dave’s question on investment classes
• [35:44] What exactly is the market?
• [40:11] Carl’s question on selling a large position in one stock

TODAY’S SMART SPRINT SEGMENT

• [44:15] Be courageous. Act in the presence of fear

Resources Mentioned In This Episode

LTCI Partners

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Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Have you considered the legacy you will leave to those whose lives you touch? Does leaving a legacy need to be financial or something more? 

This month we explore how to leave a lasting legacy in an organized way. You’ll learn the ways that you can leave an enduring legacy during your life and beyond. 

Today we are defining legacy and noodling on what that means both financially and non financially. Next week, we’ll discuss the different strategies that you can use to leave a financial legacy, the following week we’ll explore non-financial legacies, and in the 4th episode of this series, you’ll learn how to create your own legacy strategy. 

Live a life true to yourself

Some people are spurred into retirement because they have trouble compartmentalizing work and so it bleeds into other areas of their lives. They choose retirement to escape the pace of a grueling work life.

However, many high performers experience a lot of guilt upon retirement. They may feel an obligation to their team or their clients to continue working and feel held back by other people’s expectations, but living a life true to yourself means letting go of others’ expectations. 

Learn how to not just survive retirement, but gain the confidence to rock retirement. Sign up for the 6-Shot Saturday newsletter to receive a weekly email with a summary of the answers to the questions from the show, plus links, tools, books, and other resources that will help you on your retirement journey

What do you think of when you hear the word legacy? 

When you hear the word legacy do you simply think of money or does legacy mean something more? 

My mom died young–she was only 48 when she passed. When I think back on her legacy I don’t consider the check I received from the lawyer a few months later. Instead, I am reminded of our conversations and debates on how best to live life. You could say that this podcast is an indirect result of her legacy. 

Mom insisted on living a life of delayed gratification so that she could save for the future–a future that she never got to enjoy. I argued that living life in the present was the way to go. However, finding a balance between living well today and delaying gratification is the best way to live a life without regret. Ultimately, that is what this podcast is all aobut. 

What does legacy mean? 

The dictionary defines legacy as money or property given in a will, or something handed down from an ancestor. 

When you die you will leave a legacy. What you choose to leave behind is up to you. 

A nonfinancial legacy includes lessons, memories, and experiences that you share with others. How are you actively working to build a nonfinancial legacy in retirement? 

A financial legacy could be money, property, or other mementos that generally come to your loved ones in a sterile way. A financial legacy could give your heirs the financial fuel they need to get started or continue on their journey through life. Make sure to tune in next week to hear what tools you can use to build your financial legacy. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [5:35] What do you think of when you hear the word legacy?

LISTENER QUESTIONS

• [14:48] A Daily Stoic blog post
• [16:14] Responses to Wendy’s question about postponing travel
• [19:03] A Roth conversion question from Joel
• [22:22] Joe’s question on planning for inflation
• [27:12] What should Joe’s CFP be doing in response to the current market conditions?
• [33:02] Where I learned to fly fish in Colorado

TODAY’S SMART SPRINT SEGMENT

• [34:17] Expand your thinking on legacy

Resources Mentioned In This Episode

Legacy Is Not for You from the Daily Stoic blog

Boomer Benefits - check out their FREE 6-day mini-course!

Episode 429 - Should I Retire Earlier If I Have Health Issues?

IRS Publication 505

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

Navigating the healthcare world in this day and age can make your head spin. It is hard to understand what to believe and what not to believe since there are so many voices telling you their interpretation of the facts. 

This is why it is important to build a healthcare framework from which to operate. Your healthcare framework will ensure that you get your questions answered so that you can make the best decisions for your health. Building a healthcare decision-making framework is similar to the framework we build for making financial decisions. 

Dr. Bobby Dubois joins me again today for the last episode in the Functional Health to Rock Retirement series to discuss how to approach medical problems both conceptually and with your doctor. You won’t want to miss this important conversation, so press play to listen. 

Building a relationship with your primary care physician can help you feel confident in your healthcare decisions

Whether you are dealing with a small, medium, or large medical problem it is important to ensure that you receive the right care. The right diagnosis leads to the right procedure, but that all begins with ensuring that you have the right healthcare provider. 

Many of us don’t have relational currency with our doctors anymore. Gone are the days of the doctor who has treated us and our family for ages. These family doctors have been replaced by the managed care model. 

Even if you haven’t been seeing your primary care doctor for long, you can try and build a relationship with them that puts them in the quarterback position of managing your overall health care. Listen in to hear how.

If this isn’t a possibility you may want to look into finding a concierge doctor. Concierge medicine is an emerging industry that may be beneficial to retirees. For an extra yearly fee, these doctors offer personalized care and direct access since they limit their patient load.

Use a systematic way to build a healthcare decision-making framework

We all want to embrace life physically for as long as possible; however, at some point in our lives, we are all going to face medical challenges. How you choose to confront those challenges could be critical to overcoming them. This is why it is important to have a framework in place for dealing with health issues. It is important to approach medical problems in a systematic way so that you can organize your decision-making.

Building a strong framework starts with asking the right questions

To ensure that you get the right care you must be more than just a passive patient you need to be an active consumer that asks the right questions. 

Rather than creating a list of 100 questions, try to boil them down to 2-4 questions. Understand that doctors operate on a tight schedule, so it can be helpful to let them know that you have questions in advance. You can do this by sending them an email or handing your typed questions to the nurse at the beginning of your appointment. This way you are being proactive yet respectful of their time.

After receiving a diagnosis ask your doctor these questions:

• How long will it last?
• How severe is it?
• How resilient am I?

After discussing treatment options you can ask these questions:

• Why do I need this (procedure, surgery, medication…)?
• What happens if I don’t do it?
• Are there alternatives?
• What are the risks associated with this treatment?
• What is the (out of pocket) cost? 
• What are the costs of the alternatives?

Asking your doctor, how often do you see this? can help you to decide whether you should get a second opinion.

Remember when putting together your framework for answering questions that a good theory is not evidence. Make sure that there is evidence that the treatment will work. A great question to ask is what is the evidence that supports this theory?

The journey of rocking retirement starts with your feet–take that baby step in the right direction now to continue toward your goal of rocking retirement.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING WITH DR. BOBBY DUBOIS

• [4:06] How to approach medical problems with your doctor
• [12:25] Ensure that you get the right treatment
• [19:43] Questions to ask to build a framework
• [25:50] Randomized trials vs observational studies
• [31:12] A case study to understand how to talk to your doctor
• [40:02] A summary of functional health to rock retirement

LISTENER QUESTIONS

• [43:33] How to characterize home equity in planning
• [49:27] On using an advisor for money management vs. keeping assets in a 401K

COACHES CORNER WITH KEVIN LYLES

• [56:47] 4 questions to consider to 

TODAY’S SMART SPRINT SEGMENT

• [1:10:30] Brainstorm a few of these steps to integrate into your life

Resources Mentioned In This Episode

Galleri Cancer test

Oura Ring

WHOOP

Dan Miller 48 Days to the Work You Love

BOOK - Younger Next Year by Chris Crowley

BOOK - The Expectation Effect by David Robson

Andy Panko at Tenon Financial

LTCI Partners

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

All this month we have been discussing functional health so that you can ensure your body works well enough to rock retirement. Last week we learned how finding the right exercise plan can help you stay strong enough to do all the things that you want to do when you retire.

Today, we learn about the opposite side of the functional health coin: nutrition. You probably know that nutrition should be an important part of your overall health plan, but with so many conflicting diets out there how are you supposed to know what you should eat? 

Listen in to hear what functional health expert, Dr. Bobby Dubois recommends to maintain proper nutrition in retirement. 

It’s easy to fall into a nutrition rabbit hole

If you head to the bookstore or ask a question on Google, you’ll quickly realize that there are tons of rabbit holes that you can fall into when it comes to nutrition. How can there be so many different ’right ways’ to eat?

Before starting the cantaloupe diet or another such extreme measure it is important to understand the science that goes into nutrition. 

Why evidence-based nutrition is important

Many fad diets are based on strong emotions and faux science rather than evidence-based science. 

Science is a process by which scientists answer questions. First, they come up with a hypothesis and then design a study to prove or disprove that hypothesis. Next, they test their study.

Just because a scientist may come up with a beautiful theory doesn’t mean that they have any evidence to back it up. For years scientists figured that people with high cholesterol should restrict their cholesterol intake, but science has recently shown that the cholesterol we eat has little effect on the overall cholesterol in our bodies. 

Unfortunately, nutrition is a field that has been based on a lot of bad science. It has had plenty of strong theories but little evidence to back up those theories. 

Scientists all agree that obesity can lead to heart disease

One area of nutrition that scientists can agree upon is that being overweight or obese can lead to heart disease and, ultimately, death. This is why it is important to maintain a healthy weight. 

Maintaining a healthy diet can help you stay at a healthy weight and help your body move more easily. Taking control of your diet can give you agency and help you make a change in your life.

Rather than focus on the small details of what you should eat or not eat, it is more important to plan a basic diet. Since every person’s body works differently, a great way to choose the ‘right’ diet is to test it out for yourself. What works for someone else may not work for you. 

How to construct the ‘right’ nutrition plan

It is important to have some humility when it comes to understanding nutrition. Scientists don’t know as much as they should and no one has the perfect nutrition plan, so you should be skeptical of anyone that claims to have the perfect nutrition plan. 

What we do know is that obesity is a big issue. This is why maintaining a balanced diet of ‘real’ foods is important. Try to shop around the rim of the grocery store to avoid the processed foods that lie in the middle. 

Next week, you’ll learn more about how to build a functional health framework so that you can rock retirement. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT WITH DR. BOBBY DUBOIS

• [7:10] There are many rabbit holes you can chase surrounding nutrition
• [14:13] What to focus on in nutrition
• [16:37] How to know what kind of nutrition is good and what’s bad?
• [26:58] How the placebo effect can affect diet
• [31:28] Having proper weight is important
• [41:20] Takeaways

LISTENER QUESTIONS

• [44:10] A Windfall elimination program question
• [47:20] A retirement regret observation
• [50:26] How to prepare a ‘death manual’ for a spouse

TODAY’S SMART SPRINT SEGMENT

• [57:30] Start preparing a nutritional framework using guiding light principles

Resources Mentioned In This Episode

EverPlans

BOOK - Checklist for My Family by Sally Balch Hurme

Dan Miller

BOOK - How to Lie with Statistics by Darrell Huff

Boomer Benefits

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Roger’s Retirement Learning Center

You may think that having saved a nice nest egg and having a purpose will ensure that you are all set to rock retirement. Unfortunately, you need to think again. Without functional health, you may not be able to enjoy your retirement savings and purpose. 

Creating a specified exercise plan can ensure that you develop the functional health necessary to do all the things you want to do so that you can rock retirement. Listen to this episode with Dr. Bobby Dubois to learn how to cultivate an exercise plan that will help you accomplish your goals. 

Don’t let the economy derail your retirement plan

Watching the news these days can derail your confidence in rocking retirement. A combination of continued inflation, rising interest rates, and falling stock prices are downright scary when you’re in or approaching retirement. Uncertainty is not something that pairs well with carefully thought-out retirement plans. 

Some of us think that more data will help us better our plan for the future. However, no one knows what the future holds. Is this all just a blip on the economic radar or is it the start of something bigger?

The only thing that remains consistent over time is our values. We can use our values as a guiding light to help us make decisions–especially when everything else is so unpredictable. Basing your decision-making on your values will help you stay agile and apply the protocols you have laid out that will see you through troubling times. Your values are the key to bolstering your confidence in your plan so that you can relax and rock retirement. 

Why is exercise important to retirement?

You already know that you have to have financial means and meaning to rock retirement, but you won’t be able to enjoy either of these things if you don’t have the ability to do everything you want to do in retirement. 

Your body changes as you age. It starts to deteriorate and that deterioration is noticeable in the blood vessels, bones, and muscles. The depressing reality is that you are fighting a losing battle with your muscle mass. However, you can get ahead of this decline with exercise. 

Many people are familiar with the concept of doing crosswords and puzzles to keep their minds agile and you can use exercise much in the same way. By starting the aging process with more muscle strength, flexibility, and cardiovascular endurance you will be ahead of the game once mother nature kicks in. Regular exercise protects your body and makes it more resilient so that you can maintain function as you age. 

Steps to take to form your exercise plan so that you can rock retirement 

Developing the right exercise plan starts with envisioning where you want to be in 10-20 years. Think about what you want to be able to do in the future so that you can understand the body that you will need. Consider the muscle groups, strength, balance, and aerobic stamina you will need. Next, analyze what kind of exercise you are doing now to help you reach this goal. Lastly, consider how you can fill in the gaps and start working on the specific movements that will help you achieve your goals. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT WITH DR. BOBBY DUBOIS

• [9:25] Why is exercise important to retirement?
• [18:44] Think about where you want to be in 10-20 years
• [24:44] Generic exercise helps improve the length of life
• [32:05] Balance is an important area to work on
• [33:55] How intensely should you focus on this?
• [36:13] How to factor in limitations to our exercise plan
• [39:20] Anaerobic strength requires a different set of muscles
• [42:42] Steps to take to form your exercise plan to rock retirement 

LISTENER QUESTIONS

• [45:09] You can withdraw your Roth contributions any time without penalty
• [47:14] Questions to ask your financial planner as you approach retirement
• [58:09] My thoughts on the pros and cons of closed-end mutual funds

TODAY’S SMART SPRINT SEGMENT

• [1:12:45] Evaluate your exercise regimen

Resources Mentioned In This Episode

Don’t miss out on the live webinar on May 19! Register at LiveWithRoger.com

Anna Greenberg Yoga

LTCI Partners

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Purpose and finances are two important legs of the retirement stool; however, a stool needs 3 legs. Finances and dreams don’t mean anything if you can’t function well enough to enjoy them. 

The often-overlooked leg of the retirement stool is functional health–which is why this month we are focusing all 4 episodes on how to improve your functional health in retirement. 

Since I am not a health expert, I have invited Dr. Bobby Dubois to join me for this relevant discussion. This week Bobby helps me define exactly what functional health is and why it is important to retirement. In week two we’ll explore exercise and movement followed by week three’s examination of nutrition. 

On the last episode of this series, you’ll learn how to create your own functional health plan to help you navigate this essential part of your retirement plan. Press play to learn how important functional health is in retirement. 

What is functional health?

We have seen a tremendous increase in longevity over the past 50 years. Now, it is not uncommon for people to live 90+ years. While longevity gives people quantity of life, functional health gives quality of life. Without investing in your functional health you will live longer but your life will suck more. 

When you are young you can do anything–play a round of pick-up basketball, hike up a mountain, or paint your house. But as you age you quickly learn that you aren’t in shape for everything anymore. Since you lose 1-2% of your muscle mass each year starting in your 30s, by the time you reach your 60s you may not be able to do these same activities with ease. 

The happiest retirees are those that have a high quality of life and the ability to do the things they want to do. Functional health doesn’t train you to run marathons or win bike races–unless those are goals that you have for your retirement. Instead, functional health can help ensure that you can pick up your grandkids, lift carry-on luggage over your head and into the compartment, or climb ancient cobblestone steps in Europe. 

How to set up a framework for functional health

The best part of functional health is that you have control over how healthy you want to be. Setting up a functional health framework is much like the rest of retirement planning. You will begin with the end in mind. Who do you want to be in your last decade of life? What do you want to be doing when you are 90? Do you still want to be able to golf or hike? Or do you just want to be able to make it to the bathroom by yourself? Whatever your goal is, start from there. 

Be precise in setting your goals and creating your plan. Just like with a financial retirement plan, you’ll want to personalize your plan based on your goals. Traditional advice, like working out 30 minutes a day 3 days a week or walking 10,000 steps, isn’t the way to achieve your functional health goals. A one size fits all plan won’t work for your health plan just like it won’t work for your retirement plan. 

Next week, we’ll explore ways that you can use exercise and body movement to achieve your functional health goals. If you have a question or thought regarding functional health respond to the 6-Shot Saturday newsletter or hit the Ask Roger button at RogerWhitney.com to leave a voicemail question. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING WITH DR. BOBBY DUBOIS 

• [4:56] Why Dr. Dubois volunteered to discuss functional health on the show
• [9:54] You have to put money in your physical bank to enjoy the life you want to live
• [13:05] What is important to physical health?
• [15:34] What is functional health?
• [19:07] How to set up a framework for functional health

LISTENER QUESTIONS

• [28:18] When to convert from tax-deferred accounts to Roth
• [34:45] An SIPC protection question
• [37:45] Use the Social Security detailed calculator to personalize your earnings
• [40:07] To pay or not to pay off the mortgage

TODAY’S SMART SPRINT SEGMENT

• [44:37] Think about how well rounded your health regimen is

Resources Mentioned In This Episode

Register for the live webinar on May 19 at LiveWithRoger.com

Boomer Benefits

Social Security detailed calculator

Episode 407 - Retirement Planning Guidebook With Wade Pfau 

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Does inflation have you worried about retirement? If so, you’re not alone. A couple of listeners are looking for ways to inflation-proof their retirement. Can you inflation-proof your retirement?

I’ll answer these questions and many more on this episode of Retirement Answer Man. But before we get to our current listener questions we’ll take a look back at a question that was asked earlier this month. I asked you all to help me answer it and today you’ll hear the responses.

Listeners’ responses to Wendy’s question 

On episode 429, Wendy asked for my thoughts on increasing her savings with the goal of retiring early or whether she and her husband should enjoy life now and travel more given her husband’s recent bout with cancer. After giving my thoughts on the matter, I turned the question over to all of you and I received many responses. 

One listener remarked that their 1 million dollar savings wouldn’t be enough to fund an early retirement when considering long-term care and health costs. 

Another listener, Craig, retired early at 62 and regrets not working longer. He feels bored and wishes that he had worked longer while slowing his savings rate. 

Joe took 3 months off of work, then started back to work part-time. He reminds us that we don’t have to choose between work and retirement. By working a flexible or limited schedule you can take advantage of pretirement and enjoy the best of both worlds. Retirement doesn’t have to be binary. Retirement isn’t about getting to a date–it’s about making the most of the time you have.

Kate retired at 56 and is bored. She advises planning how you will create your new life and spend your time in retirement. 

Choices don’t have to be black and white–find a way to work with the grey areas

While Wendy’s question was posed as a choice between two options, it is important to remember that you can go back and forth between the two. Things don’t have to be black and white. You can increase your savings a bit while increasing travel and living life to its fullest now. Don’t wait until retirement to enjoy life since no one is promised tomorrow. We must all live for today while doing our best to make the most out of tomorrow. 

Listen in to hear Kevin Lyle’s ideas on how to blend work into your retirement plans. 

Can you inflation-proof retirement?

Since inflation has continued to rise more and more people are looking for ways to inflation-proof their retirement. Dave is looking at taking a mortgage on his house so that he can buy rental properties and another listener is curious about using gold as an inflation hedge. 

A couple of months ago we did a month-long series on inflation in retirement. You can start the first episode of the series here. In episode 423 we explored several inflation-fighting tactics you can use to enhance your retirement strategy. Some of those were I bonds, TIPS, money market funds, and utilizing debt instead of cash to make large purchases. 

It is important to understand that no retirement plan is inflation-proof. What you can do is ensure that you have a sound retirement strategy in place before rushing into any major decisions. Walkthrough your process and see how the choices align with your values and fit into your retirement plan. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [3:40] Looking back at your responses to Wendy’s question from earlier this month

LISTENER QUESTIONS WITH KEVIN LYLES

• [11:27] A blended retirement question

LISTENER QUESTIONS WITH NICHOLE

• [20:44] Should Dave take on a mortgage to buy rental properties?
• [24:30] Is gold a good way to fight inflation?
• [27:55] The 5-year rule and opening of 2 separate Roth IRAs
• [29:41] Moving a 401K to a Roth IRA before retirement
• [31:43] Should Roy liquidate his stock options into cash and buy a 2nd home?
• [35:55] A rule of 55 question
• [39:03] Sally wants to consolidate accounts and buy crypto how should she do that/

TODAY’S SMART SPRINT SEGMENT

• [44:26] When trying to decide how to balance life today with saving for tomorrow remember that tomorrow isn’t promised to anyone

Resources Mentioned In This Episode

Don’t miss the live webinar on May 19!

Episode 423 - What Investments Help Protect Me from Inflation?

LTCI Partners

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Today we are continuing our month-long series of listener questions. On this episode, you’ll hear questions about Roth conversions, interest rate-hedged ETFs, pension payments, and the value of dividends as a source of income in retirement. If you are ready to gain the wisdom that you need to rock retirement, press play now.

Time to pull out your May calendars

Next month we will be focusing on functional health in retirement. You’ll learn what you can do now to get your body in the right place so that you can do all the things that you have dreamed of in retirement. You won’t want to miss the interview we have lined up with a functional health expert, so be on the lookout for this series coming up in May.

While you’re planning what to listen to in May, mark your calendar for May 19 at 7 pm CDT for our live webinar. During this interactive session, we’ll be chatting about the market and inflation, I’ll answer some retirement questions, and we’ll discuss the Rock Retirement Club’s open enrollment of the spring 2022 cohort.

In this live webinar, you’ll learn more about our inclusive online community of more than 800 members where you can create your financial plan, take masterclasses, and attend online meetups on financial and non-financial topics. If you are looking for a way to meet new, like-minded people in the same situation as you and supercharge your retirement, don’t miss out on the May webinar to hear more about the Rock Retirement Club. 

How to calculate a pension on a net worth statement

One listener has a question regarding pensions on their net worth statement. A net worth statement is a financial statement that lists your assets in one column and liabilities in another. By subtracting your liabilities from your assets you can calculate your net worth.

Up until now he has included the lump sum of his wife’s pension in the assets column, but she will soon start collecting her monthly pension, so he no longer knows where to calculate the pension. 

Once you start collecting your monthly pension, you no longer have an asset. Instead what you have is social capital–similar to your Social Security benefit. Social capital doesn’t belong on a net worth statement; rather, it can be included on a household balance sheet. We use household balance sheets in the Rock Retirement Club when calculating projected retirement budgets. 

Are interest rate-hedged ETFs a good idea?

Interest rate-hedged ETFs trade like stocks and hold like bonds. However, rather than being organic financial products, interest rate-hedged ETFs use derivatives to hedge price movements as interest rates rise. 

While these ETFs are a great idea, in theory, one problem is that much of your cost in buying these funds goes to the derivatives. Since these ETFs are manufactured and don’t naturally occur, they can be quite costly. Try to avoid these synthetic tools in your investments. 

Instead of using interest rate-hedged ETFs, you can look at purchasing TIPS (Treasury Inflation-Protected Securities) or I bonds. Another way to achieve the same goal is to build a bond ladder. Listen in to hear how a bond ladder works to see if that would be a good solution to building the bond portion of your pie cake. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [2:47] My recent win
• [4:46] My morning routine

LISTENER QUESTIONS

• [7:52] Calculating a net worth statement
• [10:45] Are interest rate-hedged ETFs a good idea?
• [15:40] Where to put a lump sum payment so that you wouldn’t have to pay the taxes all at once
• [17:35] Does the 5-year rule apply in a backdoor conversion?
• [20:12] The value of dividends as a source of income in retirement

TODAY’S SMART SPRINT SEGMENT

• [24:20] Write it out – Today is the day…

Resources Mentioned In This Episode

Boomer Benefits

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

This is a fantastic time to enjoy a pretirement tailwind. If you have ever considered using pretirement as a gateway into full retirement, the job market is desperately searching for experienced talent. Listen in to discover how this cultural shift in the workplace could benefit your retirement plans. 

On this episode, you’ll also hear the answers to a number of questions from listeners like you. If you are worried about how to shift from saving to spending, wondering how to plan for taxes in retirement, or how RMDs work for married couples then make sure to press play to hear the answers to these questions. 

Retirement is not binary

Traditionally, retirement is considered to be the opposite of working. You work 40 years or so then one day you stop and retire. However, in today’s world, this does not have to be the case.

There are plenty of ways that people can incorporate a pretirement phase before retiring fully. I like to call part-time work, consulting, or working a flexible schedule before full retirement pretirement. Pretirement can be a great way to ease into retirement while still benefiting from staying engaged in the working world.

Companies are more flexible than ever before

The pandemic reframed the way people work. Companies experimented with remote work and flexible schedules and many corporations that tried to reinstate traditional office work ended up seeing pushback from employees.

This shift has created a talent shortage in many fields which has led to a desperate need for qualified, accomplished individuals to fill various positions. Since corporations are struggling in their search for skilled labor, many are rethinking their cultural rigidness and becoming more flexible. 

Many companies have realized that employees can be just as productive or even more so by working from home or on a flexible schedule. This corporate cultural shift has led to a huge opportunity for those that are seeking alternatives to traditional retirement. 

How to explore pretirement

If you have been considering retirement, but aren’t sure if you are ready, consider exploring the boundaries with your current employer. You may be able to negotiate a 3 day a week schedule or a 100% remote position. 

If you have already retired and would like to enjoy the stimulation of working without the limitations of a full-time schedule, now is a great time to cash in on your career capital by reaching out to your network to explore your options. 

You may discover the right part-time, consulting, or contract position that allows you the time freedom of retirement while enjoying the mental stimulation and income of the working world. 

How to go from being a saver to becoming a spender?

Since you have been saving for retirement your entire working career, making the transition to spending that savings takes a huge shift in mindset. One reason for this is the money scripts that we have ingrained in our minds since childhood. Money scripts are the stories we tell ourselves about money. Changing your money scripts will not happen overnight. 

In retirement, you will have to transition from saving to spending, but this isn’t as easy as flipping a switch. It is a process that you will slowly become comfortable with as you ease into your new life. It will take time, but slowly you will lean into the changes in your life and you will become comfortable with your new life rhythm. Listen in to hear how you can make the shift in mindset from a saver to a spender. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [1:30] Enjoy the pretirement tailwind

LISTENER QUESTIONS

• [7:08] How to go from being a saver to becoming a spender
• [12:55] Why Bob is lamenting being born in 1960
• [15:41] How to access a solo 401K plan
• [17:56] Deciding whether to keep a group universal life plan after retiring
• [21:10] How to include taxes as future liabilities
• [24:33] RMDs for married couples

TODAY’S SMART SPRINT SEGMENT

• [25:27] Reframe the idea that retirement is binary

Resources Mentioned In This Episode

LTCI Partners

BOOK - So Good They Can’t Ignore You by Cal Newport

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Making retirement decisions brings plenty of questions and over the next month, I’ll be tackling your retirement questions. While I love answering your questions, I also enjoy hearing your thoughts. In today’s episode, there are a couple of questions that I’d love to hear your feedback on. If you have any thoughts to share with other listeners please respond to the 6-Shot Saturday newsletter. If you’re not signed up, head on over to RogerWhitney.com and scroll down to the bottom of the page to get weekly tips, news, and resources in your inbox every Saturday morning.

Deciding to spend large sums of money in retirement can be unnerving

Early on in retirement is when people want to have the most fun, but it can also be the most daunting time to spend money. Even if the numbers say that you’ll be ok financially, you can never be certain if you may need that cash when you’re 90. Making the decision to spend large amounts of money in retirement can be daunting.

I got to thinking about decision-making recently when I wrote the biggest check I have ever written. This check will (hopefully) be an investment in my business, but it was still a difficult decision to make that took a lot of thought and counsel from others. 

How I employ my own decision-making tactics

I actually practiced what I preached and used the same decision-making process that I teach on the show. I started with my vision by projecting where I want to be in the future. I thought about how this decision fits into my long-term goals for myself and my company. Then, I got to thinking about the result that I hoped for as well as the worst-case scenario. 

I seek the counsel of others

Since I know I have blind spots in my own decision-making when it comes to myself and my business, I enlisted the help of others to bounce my ideas off of. I started with my wife, Shawna, then sought counsel from Nichole, and others that understand my situation. I encouraged them to challenge my assumptions and poke at my blind spots. We walked through alternatives and discussed opportunity costs. Ultimately, it was up to me to make the judgment call. I won’t know for quite some time whether I made the right decision, however, I know that the process that I used to make this decision was sound. 

With the right process, you can be secure in your decision making

I share this with you, because you may be wondering if you should spend $30,000 to take an epic family trip next year, buy that vacation home, or RV across the country. The memories you create may be well worth the money, but you won’t know if you made the right choice until you reach the end of the road. Nobody can tell you what the correct decision will be for you, but if you work through your decision in an organized way starting with your vision then you’ll know that you made the best decision that you could. 

Speaking of big decisions, Wendy is trying to decide whether to increase her savings now that she and her husband will be empty nesters. Or should they continue to save for retirement at the same rate while taking time to travel and enjoy more of life now while they are both still healthy? Listen in to hear the details of her situation and then let her know what you think by responding in our 6-Shot Saturday newsletter. What would you do if you were in her shoes?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [1:32] My process as I work through a big decision

LISTENER QUESTIONS

• [11:05] Daniel’s comment on needs, wants, and wishes and my response
• [14:22] A consideration on relocating in retirement
• [17:10] Travel now or increase savings and retire early?
• [20:50] Bond accrual structural strategy
• [22:24] A Roth conversion question
• [26:06] On retirement regret

TODAY’S SMART SPRINT SEGMENT

• [31:46] Check out our decision-making worksheet in 6-Shot Saturday

Resources Mentioned In This Episode

Boomer Benefits

PODCAST - Deep Questions with Cal Newport 

Episode 402 - The Tax Toolbox with Andy Panko

Episode 416 - Retirement Plan Live: Why We Moved

Episode 426 - How to Plan Your Agile Retirement: A Feasible Retirement Strategy

BOOK - Wooden: A Lifetime of Observations and Reflections by John Wooden 

BOOK - Born Standing Up by Steve Martin 

BOOK - So Good They Can’t Ignore You by Cal Newport

BOOK - Unstoppable Teams by Alden Mills

BOOK - Antifragile by Nassim Nicholas Taleb

BOOK - The Way I Heard It by Mike Rowe

BOOK - How to Decide by Annie Duke

BOOK - Grit by Angela Duckworth

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

“In preparing for battle I have always found that plans are useless but planning is indispensable.” Dwight D. Eisenhower

Ike is reminding us that the plan is not as important as the process. It is the practice of planning that is critical to success. You’ll never have everything figured out since the perfect retirement plan doesn’t exist, but by planning and staying agile you will be able to correct your course along the way. 

This month we have gone from theory to practice to mastery. On this episode of the Retirement Answer Man show, you’ll learn how to optimize your feasible, resilient plan so that you can rock retirement. 

Have a feasible, resilient plan in place before trying to optimize

Most retirement planning blogs and articles focus on optimization since optimizing retirement plans is the bling of financial planning. 

However, without first having an inspiring goal for your retirement, you wouldn’t have the hope of rocking retirement. It is important to start with a goal at the beginning to ensure that you build a feasible, resilient plan before trying to optimize your retirement plan. Remember that you create a retirement plan to help you focus on achieving the life outcomes that you have envisioned for yourself in retirement not to find the best Roth conversion strategy or qualify for ACA credits. 

Retirement tax planning is the best way to optimize your retirement plan

There are so many ways that you can optimize your retirement plan that it can end up being an infinite pool of possibilities. So you may be wondering what the best way to enhance your retirement journey is. The biggest way you can optimize your retirement journey is through tax management. 

In retirement, you have more control over your taxes than at any other time in your life. This means that instead of planning your taxes from year to year, you now have the capability to plan for lifetime tax savings. Retirement tax management is not about avoiding taxes, instead, it's about timing your taxes

You can plan your withdrawal strategy to optimize for taxes not just for this year but in the future as well. By forecasting your tax rate over the next 5-8 years using a traditional withdrawal approach you can gain an idea of what your RMDs will be once you turn 72. 

From there you can work backward to see if it would make more sense to do Roth conversions and pay more in taxes now so that you don’t have to withdraw so much later on in life. Listen in to hear how working backward can ensure that you focus on where you are going rather than where you are now.

Timing your Social Security benefit is another way to optimize your retirement plan

Social Security timing is another area that is important to think through in an organized way. Once you understand your withdrawal strategy then you can analyze where your Social Security benefits fall into your pie cake structure. 

Establish a retirement plan of record

Once again it is important to start with the end in mind. As you revise your retirement plan it is important to create an abstract with a summary of all the decisions you have made so that you can have a log of how everything plays out within the context of your thinking. This method will give you the framework to see how your decisions fit together over time. 

Every 6 months you’ll want to revisit your plan and ask yourself what has changed. Are your goals still the same? If not, then you can realign as needed. By revisiting your plan you can focus on the risks and opportunities that lie ahead. Try to set action items that focus on 1 or 2 of these risks and opportunities. This will give you an inspiring goal to work toward, the agency to achieve it, as well as the confidence to rock retirement. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [5:53] What can you do to enhance this journey?
• [6:12] Tax management is the biggest thing you can optimize
• [14:42] Should you try to get ACA healthcare subsidies?
• [16:21] Take a look at Social Security
• [20:55] The little conversations

LISTENER QUESTIONS

• [23:37] Why should you use your house on your net worth statement?
• [25:46] On using the strategic assumption of no inflation
• [28:17] A Social Security timing question
• [30:08] An observation on inflation
• [33:23] Using caveats on Roth conversions
• [36:34] How to report decreased income to Medicare

TODAY’S SMART SPRINT SEGMENT

• [41:04] Map out the process that you want to take to walk through your strategy in a fresh way

Resources Mentioned In This Episode

44-ext.pdf">Form SSA-44

Episode 402 with Andy Panko - The Retirement Tax Toolbox

LTCI Partners

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Now that you have come up with a retirement vision and learned to create a retirement plan that reflects your vision it’s time to make your plan agile. On this episode, you’ll learn why you need to have an agile retirement plan and how to make your plan resilient to the unexpected forces that could derail your retirement plans. Make sure to stick around until the end of the episode to hear BW talk about why it’s so important to master the fundamentals of retirement planning.

Don’t get overwhelmed by retirement planning

Over fast few months I’ve been working with a project manager to create an SOP (standard operating procedure) for Agile Retirement Management. This is such a huge project and it can be easy to get overwhelmed. But just like planning your own retirement can be complicated and overwhelming when you break the giant project into smaller actionable steps, it becomes more manageable. Walking through baby steps one by one takes away a bit of the overwhelm that can come with such a grand project.

Creating a resilient plan will help you prepare for the unexpected 

In the last episode, you learned how to turn your retirement vision into a feasible plan. But just like with any plan, it can be easy to knock your retirement plan off course. This is why it is important to create a resilient plan. Incorporating resiliency into your plan will help you to prepare for the unexpected. 

What could knock you off course on your retirement journey?

There are many things that could derail your retirement. Sequence of return risk is one. The markets don’t provide the same returns each year and these ups and downs can greatly affect your retirement–especially if there are a few bad years at the beginning of retirement. Those bad years could easily knock your retirement plans off course. 

Inflation is another issue. As we discussed all last month, inflation over time can put a dent in your purchasing power. 

Unplanned life events have a way of sneaking up and catching us off guard. Illness, death, long-term care events, or children in need are further events that could impact your retirement plan. 

The most common disruption of retirement plans is you. You may simply change your mind. Since you are always changing your needs, wants, and wishes change over time. 

Listen in to hear how you can make your retirement resilient against all of these bumps in your retirement road. 

How to develop slack in your retirement plan

It is important to have slack built into your system. Similar to the way that a very taut rope may break if you try to adjust it, we need to ensure that there is a bit of slack in the line of your retirement plan so that you can ensure that your desired life outcomes are feasible. When you press play you’ll hear how building a pie-cake can help you create slack in your retirement plan. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [3:08] You don’t need to get overwhelmed by retirement planning
• [5:05] You need to create a resilient plan to prepare for the unexpected
• [7:10] Why you need slack in your retirement plan
• [12:12] The difference between the return on your money and return of your money
• [14:32] How to build resilience into your retirement plan
• [25:27] How the pie cake can help you build resiliency in your plan

COACHES CORNER WITH BW

• [32:45] Kevin’s experience with pivoting in retirement

TODAY’S SMART SPRINT SEGMENT

• [40:39] Understand how much liquidity you have on your balance sheet

Resources Mentioned In This Episode

Boomer Benefits 

DISC assessment

Enneagram

RISA retirement profile

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

“Our mind is dyed with the color of our thoughts”--unknown. If this is true, then how are you thinking about retirement in the right way? To have confidence in your retirement plan you need to be thinking about the things that you can control and focusing on what has the biggest impact on your life. 

On this episode of Retirement Answer Man, you’ll learn how to create a feasible retirement strategy by analyzing your goals against where you are now. You’ll then learn about the three types of capital and how to build a net worth statement so that you can create a retirement plan of record. You won’t want to miss this important stage in developing your retirement plan, so press play now. 

Contrast your goal with where you are now 

According to the latest goal-setting research, merely setting goals alone isn’t that empowering. It is important to cast your vision; however, you also need to contrast your goal with your current state of affairs. This way you can see where the gaps lie. These gaps may make you uncomfortable, but acknowledging the incongruency will help you understand how far you need to go to reach your goals. This way you can also start collecting the little wins that inch you closer to your goals. 

The 3 types of capital to fund your retirement 

To create a feasible plan of record, you have to examine the resources that you have to fund your spending. To do this, you need to understand the different types of capital available to you in retirement. 

The first resource to consider is your social capital. Social capital is the payments you receive from a collective program like Social Security or a pension. These are guaranteed payments for the rest of your life. You’ll need to have a good estimate of what those payments are and when they start.

Human capital is next. You may not realize it, but you have used human capital as your primary resource for your entire working life. Human capital is the work you use to create income. 

Traditionally in retirement, this resource is absent, but many people now choose to work differently during, what I call, pretirement. You may choose to do a bit of consulting, open a small business, or do some part-time work for a few years. No matter how small the income may be, include it in your plan of record. Project when will it start, when will it end, how much you plan to make. 

Whatever human capital and social capital don’t pay for has to come from your financial capital. Your financial capital is simply your money. You will need financial capital to fill the gap between your retirement goals and your projected income. 

You can gain a better understanding of your financial capital by creating a net worth statement. Make sure you’re signed up for this week’s 6 Shot Saturday newsletter to receive a net worth statement template that you can use to create your own. 

How to know whether your plan is feasible

To understand whether your plan is feasible you’ll need to create your net worth statement by listing your assets and your liabilities. Even if you have no debt, you’ll want to list your future consumption as a liability to understand how your assets and liabilities balance out. By comparing both sides of the net worth statement you’ll understand your fundedness level. 

Listen in to hear how I use two ways to calculate fundedness to see whether a financial plan is feasible. On next week’s episode, you'll learn how to make your plan resilient, so make sure to check it out.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [3:38] Contrast your ideal retirement with your current situation
• 6:35] How to create a feasible plan of record
• [14:28] Your assumptions will be incorrect
• [18:03] How to know whether your plan is feasible
• [28:20] What does feasible mean?

LISTENER QUESTIONS

• [30:10] Jim’s question on Social Security
• [34:05] Moving from a balanced fund to a stable value fund
• [38:30] Mark’s question about using I bonds in bond ladders

TODAY’S SMART SPRINT SEGMENT

• [41:52] Take baby steps to create micro wins

Resources Mentioned In This Episode

Social Security detailed calculator

LTCI Partners

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Retirement is a journey into the unknown that can be intimidating. This is why you need to build up confidence in your plan so that you can rock retirement. To build your confidence it is important to master the fundamentals which simply means that you must practice them over and over again. 

Last week you learned to let go of the things that are out of your control and how to concentrate on working with the controllables by using an agile approach. This will give you the agency you need to prosper in retirement. 

Today we’ll focus on developing an inspiring goal for your future. Over the rest of the month, we'll explore the pathways to get you to your goal. If you are ready to learn how to rock retirement press play now. 

4 roadblocks that could hinder fulfilling your vision

With retirement on the horizon, you are ready to jump right in, but there can be some things that could hinder your progress. 

The paradox of choice

Who do you want to be when you grow up? This is a challenging question when you are already in your 50s or 60s. You have competency and interest in many domains at this stage of life, so it can be hard to choose what you want for your future. Or you may feel that when you set your goals they are set in stone since there's not a long time to change course. Don’t worry about this because you will change your mind. Life unfolds in twists and turns and plans will change. Don’t let the paradox of choice paralyze you. 

Start retirement with a clean slate

If you are like most of us, your life has been organized around your work or children. When you retire, your commute disappears and your kids are will have been sprung. You can now design your life any way you want. Think about how you can start your new life fresh from a clean slate. 

The accumulation mindset 

You have been a good saver your whole life and at this point, you have built up your net worth. Having these assets is comforting, so it can be challenging to begin to use your savings. However, you chose to defer that income to provide for your life in retirement. Eventually, the balance in your retirement accounts will level off or go down. You’ll have to overcome the fact that your savings are no longer growing. It is important to get over your frugality mindset to enjoy all that you have accumulated. 

Tomorrow is the day

We often plan retirement thinking about tomorrow. We think that tomorrow is the day that we will start x, y, or z. But it is important to remember that we are not guaranteed any tomorrows. To truly rock retirement you have to live for today. Today is the day to show up and pay attention to your life. Life is happening now, so rock your life today.

How to create a vision for your future

Before you begin to financially plan for retirement you need to create a vision for your future. One way to do that is to use the wisdom from those at the end of their lives to make the most of your own. Listen in to hear the top 5 regrets of the dying to help you make the most of your own life.

Have you given much thought to your values? Spend some time establishing your values so that you can envision building a life that is true to yourself. Once you have created a vision for your future you can create a plan to make it feasible. Don’t miss next week’s episode to learn how to create the pathways to reach your retirement vision.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [3:57] Who do you want to be when you grow up?
• [6:05] Your life is organized around your work
• [9:07] Tomorrow is the day
• [12:02] A 3 step process to create a vision for your future
• [19:10] How to bring these goals into a financial perspective

LISTENER QUESTIONS

• [25:57] A question on the 4% expected return used in the Retirement Plan Live webinar
• [29:43] Why use a 5% expected return rate?
• [33:35] A question on delaying taking RMDs
• [35:50] How I pick case studies for Retirement Plan Live
• [40:03] What to do with an inherited IRA

TODAY’S SMART SPRINT SEGMENT

• [44:08] Create a compelling vision for your retirement

Resources Mentioned In This Episode

Check out Boomer Benefits for all your Medicare questions!

BOOK - Wooden by John Wooden

BOOK - The Top 5 Regrets of the Dying by Bronnie Ware

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

 We can be easily distracted by the bright shiny objects of retirement planning which is why it is important to master the fundamentals first. Understanding the fundamentals of retirement planning will help you to create a solid foundation so that you can cope with all of the uncertainty that retirement brings. 

Here on the Retirement Answer Man show, I typically dive into the foundational concepts of retirement planning in bits and pieces by answering questions. However, I haven’t taken a deep dive into teaching the fundamentals here on the show.

Over the course of this 5 week segment, we will start at the beginning and explore the fundamentals of retirement planning in greater detail so that you gain a working knowledge that will give you the confidence to execute your plan. If you have been wondering what Agile Retirement Management is this is the perfect time to press play.

Areas where traditional retirement planning is lacking

There are so many uncertainties surrounding retirement, but most people are worried about just one thing: running out of money.

Traditional retirement planning methods help people build a financial plan to ensure that they don’t run out of money. In conventional planning, retirement becomes a one-dimensional math problem to be solved with investment products. Retirees are asked to place all their trust in the numbers of long-term returns and hope that all will be well.

These planning methods focus solely on the financial future and without considering the person’s life goals. While it is important to plan for the future, life exists now. Retirement should be about living life to the fullest extent that you can. An agile approach to retirement helps you balance the future while living a great life today.

What is an agile approach to retirement?

I designed the agile approach to retirement planning by using a project management methodology. Agile retirement management focuses on achieving an objective by focusing on one thing at a time without trying to figure everything out all at once. With this approach, people are able to quickly iterate as needed as their situation changes. 

The key to an agile methodology lies in understanding the fundamentals of retirement planning so that you can increase your agency and control the controllables. This ensures that you can refine your goals and dreams based on what you can control. 

The principles of an agile approach to retirement planning

An agile approach accepts that you can’t figure out everything. There is no way to predict what will happen with inflation, markets, or even your life in the future. This is why it is important to try not to dial in exactly what will happen 20 years from now. By staying agile, you’ll be able to quickly respond to any shifts in life or the markets and consider how to improve your reactions.

These are the principles to developing an agile approach to retirement: 

Collaboration - It’s important to collaborate rather than delegating someone to plan your retirement. Use your strengths to inform your decision-making. Being creative together allows you to discover joint solutions

Flexibility - You can't figure out everything at once, so value optionality and flexibility.

Prioritize - Try as you might, you can’t do everything at once. With so many levers to pull, it can be easy to focus on the wrong thing. Prioritize to improve focus and find the areas that will make the biggest impact on your life. 

Communication - Even if you do it on your own, you still need to have the right communication. Use a series of little conversations to check in with your plan to make sure that you are on the right track. Take action then review the action once it is complete. Periodically evaluate risks and opportunities in your plan.

Traditional retirement planning doesn't allow you to explore the things that matter in life. You don’t want to miss out on the ride of life, so master the fundamentals of retirement planning. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [2:55] Why it is so important to master the fundamentals of retirement planning
• [9:40] What is an agile approach?
• [11:50] Principles of an agile approach

LISTENER QUESTIONS

• [19:34] Worries about the long term stability of Anne’s annuity
• [23:29] Chen was relieved to hear Dom’s story
• [24:45] A life insurance question
• [26:41] How to determine payout options when the female has the pension

TODAY’S SMART SPRINT SEGMENT

• [30:28] Review the controllables that were discussed in your last retirement plan meeting 

Resources Mentioned In This Episode

Episode 422 - with Don’s interview

LTCI Partners

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Welcome to the last episode in the 4 part series on inflation in retirement. If you are just now joining in, consider heading over to the first episode in this series which covers what inflation is and how to measure it. The second installment discusses the ways that inflation impacts retirement and the previous episode helped you build a framework for combating inflation in your retirement plan. 

I create these deep-dive series as a way to sharpen my own skills as a financial advisor and to refresh my thinking on a topic. The order of the episodes allows me to think through a subject in an organized way. This is why I encourage you to listen to the series in order so that you can understand the progression of the subject at hand. Press play now if you have already listened to the preceding episodes so that you can learn the tactical ways to fight inflation in your retirement plan. 

Strategy vs. tactics

Before we dive into the tactical ways to fight inflation, it is important to understand the difference between strategy and tactics. A strategy is a framework for how you achieve a long-term goal. Tactics are the smaller steps that have a shorter time frame. Unlike strategy, tactics are easily started and discarded. They are a means to an end that complement and enhance the strategy. 

Your overall long-term goal is rocking retirement, and hopefully, after the last episode, you have begun to create your strategy to combat inflation so that you can rock retirement. Listen in to learn tactical measures that will enhance that strategy. 

The current tactical situation regarding inflation

We are all wondering where this inflation is taking us. Are we experiencing a monumental shift away from the low inflation and low-interest rates of the past 20 years? At this point, we can’t say for certain that inflation is here to stay, but we can analyze the current situation. 

In January, we experienced 7.5% inflation. If this trend continues, we will see rising interest rates as a result. Rising interest rates can lead to changes in the financial dynamics across the board. Bond and money market rates will rise, but on the flip side, the cost of borrowing money will rise as well. Rising inflation has a financial impact on every part of the economy and we will see a shift of capital across the world. 

It is important to understand that we don’t know for certain what will happen in the future. All we can do is educate ourselves and have a sound strategy in place.

Tactics to use if rising inflation becomes the new trend

If inflation continues to rise there are many ways that you can adjust your tactics in line with your overall retirement strategy. 

• Buy I bonds - These bonds adjust the amount of interest-based on inflation to preserve the purchasing power of the dollar over time
• Check out Treasury inflation-protected securities (TIPS)- TIPS are more like a traditional treasury bond. They adjust the principal balance of the bond based on an inflation factor to achieve the same goal. The price fluctuates based on interest rates and other factors.
• Hold money market funds - Hold more money market and cash assets. As interest rates rise you can lock in at higher interest rates. 
• Use more debt to buy things - take advantage of the current low-interest rates to purchase things that are likely to rise in price in the future
• Buy in bulk - Buy at today’s prices rather than tomorrow’s. 
• Change jobs - The labor market is tight right now and wages have not kept up. This means that companies are starting to bid up.
• Invest - Investing in real estate, companies with pricing power, and commodities have historically been a good idea during times of inflation.

Although there are many tactics you can use to fight inflation risk, it is important to do so with a sound strategy in place. Listen in to hear why you shouldn’t take extreme measures to tackle inflation.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [4:20] Coming next month…
• [6:30] Where to go if you can’t afford a full-time financial advisor
• [8:42] Strategy vs. tactics
• [12:38] What is the current tactical situation regarding inflation?
• [20:20] Tactics to use if rising inflation is the new trend
• [26:55] What I am doing tactically to fight inflation

COACH’S CORNER WITH KEVIN LYLES

• [35:05] How retirement calculators treat inflation
• [39:34] What else inflates in retirement?

TODAY’S SMART SPRINT SEGMENT

• [43:05] Define the guardrails for your tactics

Resources Mentioned In This Episode

Check out the Stacking Benjamins book tour–I’ll be at the Dallas event with Joe Saul-Sehy on March 1

Episode 417 with Joe Saul-Sehy

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Inflation will affect your retirement one way or another. It’s up to you to create a strategy to manage that risk. On this episode of Retirement Answer Man, you’ll learn how you can build your own strategy to deal with the creeping risk of inflation.

In the past two episodes, you learned what inflation is and how it can affect your retirement. Next week you’ll learn how to use tactics to tweak your strategy to optimize it for specific situations, but first, let’s go learn how to come up with your own plan to combat inflation. 

Data vs noise

It is important to understand the difference between noise and signals when coming up with a strategy. It’s easy to be distracted by the everyday noise that surrounds us and fail to heed the signals that we should actually be watching for. 

In today’s overly connected world, we have access to information that is being transmitted instantly. Rather than learning from the signals that can help us create a course of action, we get distracted by the constant noise. As data flow increases, we tend to get overloaded with information. 

According to Nassim Taleb in his book, Antifragile, data is toxic in large and even moderate quantities because it increases our tendency to overreact to the noise. This is an important factor to recognize when coming up with a risk management strategy which is what a retirement plan really is. 

Strategies start with vision

Coming up with a strategy for retirement planning is like checking a recipe before you go to the grocery store. You want to make sure that you have all the ingredients so that you can put them together in the correct portions to create a meal. If you don’t plan before your trip to the supermarket you could come home with plenty of food but nothing that will help you prepare a healthy meal. To ensure a healthy retirement, make sure that your retirement starts with your vision for life.

How to create a strategy to manage inflation

Now you understand that you need to have a goal in mind before you create a retirement strategy. The two risks that you must balance in retirement are sequence of return risk and inflation risk. Sequence of return risk is a near-term risk that occurs when your stocks go down in value shortly after you begin withdrawing from your accounts. The risk of inflation means that the value of your dollar decreases over a longer period of time. 

Your retirement strategy needs to balance these near-term and long-term risks. Listen in to hear how you can manage inflation risk while at the same time considering sequence of return risk.

If some of the terminology I use confuses you, make sure to listen in the month of March. I plan to explain the fundamentals of retirement planning in greater detail. You’ll learn about the pie cake, agile retirement planning, and the retirement plan of record.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [3:29] Noise vs. signals
• [5:35] What is a strategy?
• [12:57] How to create a strategy to manage inflation

LEARNING FROM DONALD’S SITUATION

• [20:40] Learning from Donald’s retirement plans
• [25:46] What happened to Donald’s wife
• [29:15] How Donald’s perspective has changed
• [33:08] How Donald’s financial plans have changed
• [35:20] Use the technology you have to record your loved ones

TODAY’S SMART SPRINT SEGMENT

• [36:47] Evaluate your reaction to inflation

Resources Mentioned In This Episode

LTCI Partners

WSJ article - The Trouble with a Stock Market Bubble by Jason Zweig

FILM - The Social Dilemma

BOOK - Antifragile by Nassim Taleb

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Inflation is on everyone’s mind these days. If you have been wondering how inflation will affect your retirement, you’ve come to the right place.

This is the 2nd episode in a 4 part series on inflation. Last week we defined inflation, today, we’re discussing the impact of inflation on retirement, next week we get strategic, and in the final episode, we’ll get tactical and answer your questions on inflation.

Press play to learn what you need to know about the effects of inflation on your retirement. 

Just choose a number

Inflation is nothing new. It has been affecting us over the course of our entire lives. This is important to remember when planning retirement so that you don’t overthink how you plan for inflation as you build your retirement plan of record.

When building your retirement planning model, you’ll need to assume some number to plan for inflation. This number can be chosen based on history or another method. You don’t need to worry too much about where the number comes from as long as you’ve done a bit of research to get it. The most important thing to remember when choosing a number to assume for inflation is to leave it alone.

It’s important to stay agile

You’ll be consistently iterating and tweaking your retirement plan of record as your lifestyle changes from year to year. Even though inflation rates will fluctuate over the course of your retirement, leave your assumed inflation estimate alone.

You won’t get any more accuracy from your model by tinkering with this number. Instead, you’ll end up tilting the numbers one way or another based on your proximity bias. Iterate based on the reality of your lifestyle rather than some projected assumption. Let your spending habits change based on your life choices. 

How does inflation impact your retirement?

The best way to understand how inflation can impact someone over time is to crunch the numbers. 

If you spend $9,000 per month today and assume a 3% inflation rate, in 15 years your standard of living will decrease by 36%. If you change the inflation rate to 7%, the standard of living will worsen by 64%.

Although these numbers can seem scary, you will have a bit of optionality in the way you spend your money. If inflation is high, you may choose to scale back your spending in many areas. 

Areas where you can’t scale back

There are a couple of areas in life where you won’t be able to scale back spending. A healthcare event is not a choice and will need to be cared for whether you are ready or not.

Unfortunately, due to the healthcare renaissance in medical technology, inflation in the medical field has risen by 3 times the average of other goods and services. Healthcare and long-term care are two areas that have higher than average inflation and you have little control over your need for them.

Even though inflation will cause prices to rise, you will have a safety feature built into your retirement by way of social capital. Social Security has a cost of living adjustment built into the system based on CPI-W. Listen in to hear how these adjustments in addition to your human capital can help you combat inflation in your retirement. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [3:30] Be careful with your assumptions
• [10:01] How does inflation impact your retirement?
• [21:48] How stocks and bonds react to inflation

LISTENER QUESTIONS WITH TANYA NICHOLS 

• [28:40] How Frank can decide if he can continue with his early retirement
• [35:20] Where can someone with modest means go for retirement advice?
• [40:02] What is the role of bond funds in a retirement portfolio with a low-interest rate environment?
• [47:28] Clarification on signature requirements for IRAs

TODAY’S SMART SPRINT SEGMENT

• [51:17] Review your inflation assumptions

Resources Mentioned In This Episode

Episode 405 - Don’t Let Perfect Be the Enemy of Good

Lutheran Social Services Financial Services

XYPN

Align Financial

BOOK - So Good They Can’t Ignore You by Cal Newport

BOOK - The Good Entrepreneur by Nick Kennedy

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Inflation is quite the buzzword lately. Every news network reports that inflation is on the rise which is apparent at the grocery store, the car dealerships, and even in the housing market. If you are planning on retiring soon, worries about inflation could keep you up at night. This is why over the next 4 weeks, we are going to study how to manage inflation in retirement. 

Today you’ll learn what inflation is and how it is measured. In week two of this series, we’ll discuss how inflation affects retirement, the following episode will study how to manage inflation from a strategic level, and our last episode on this topic will explore the investment vehicles that are available to help protect our portfolios against inflation. 

What is inflation?

Everywhere you look you can see that inflation is on the rise which is why we are studying this topic in depth. Before we can learn how to battle it, we must first understand what it is.

Inflation is the decline of purchasing power of a particular currency over time. This means that over time, your dollar will buy less of a particular good or service. 

We often reflect on the good ole days when a gallon of gas was less than a dollar, but we can see how inflation occurs across the board. Today a gallon of milk costs $3.59, but in 1995 it cost $2.50. A dozen eggs are $2.80 today, whereas, in 1990, that same dozen was only $1. This is inflation.

The way we see inflation from a retirement perspective is that the purchasing power of your dollar buys less over time. 

A look at average historical inflation rates

Since the 1920s, the average rate of inflation has been 2.88%. However, this does not mean that each year the inflation rate has been the same inflation fluctuates from year to year. The highest inflation rate was in the 80s and was 15.61%. 

In the past 20 years, the inflation rate has been lower than that 100-year average at 2.06%. Over the past 10 years, we really haven’t worried about inflation and we have had the added benefit of enjoying excellent return rates from the market, so if you retired in 2011, there hasn’t been much to worry about. But this isn’t always the case. 

In the 1970s, inflation was at 7% per year which was coupled with a rough decade in investment returns, this perfect storm could cripple retirements. Inflation risk can be compared to sequence of return risk as you enter into retirement. 

How inflation affects retirement planning

When you are planning your retirement you want to understand how much things cost so that you can predict how much money you will need each year. If you spend $9000 per month now, in 20 years you’ll need much more to have that same purchasing power. 

No one can predict what will happen in the future, but if you study the past and take measures to protect your portfolio, you can hedge against this ever-present risk. Learn how inflation is measured why that is important to plan your retirement on this episode of Retirement Answer Man.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [5:00] What is inflation?
• [12:10] How inflation affects retirement planning
• [13:46] What causes inflation?
• [19:00] How do we measure inflation?

LISTENER QUESTIONS WITH ANDY PANKO

• [26:30] Is it better to do a Roth conversion or take advantage of a 0% capital gains tax rate?
• [34:55] The difference between Roth conversions and Roth contributions
• [39:59] How to adjust the Social Security calculator for early retirement
• [46:45] Is inflation risk higher when one retires early?

TODAY’S SMART SPRINT SEGMENT

• [56:55] Think about your optimization to see if you have enough slack in your system

Resources Mentioned In This Episode

Taxes in Retirement Facebook group with Andy Panko

Tenon Financial Group

LTCI Partners

Watch the Retirement Plan Live replay here!

BOOK - Antifragile by Nassim Nicholas Taleb

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

We learned in the first episode of Retirement Plan Live that Joelle and her husband Mike had moved to a new area to pursue their retirement dreams. Joelle and Mike are now learning how to build community and purpose in their new home. Listen in to learn how Joelle plans to make social connections and find purpose in retirement as she creates her new life.

The Rock Retirement Club is open

The Rock Retirement Club will be open for enrollment for ten days starting on 1/27. If you have been thinking about joining, this is the right time to act. 

We have implemented this short-term enrollment window so that new members can make connections with each other while working to build their retirement plan of record. This way, RRC freshmen can come in as a cohort and fully participate in their membership by taking full advantage of everything that the club has to offer. New members will participate in meetups and have access to the masterclass, retirement planning tools, and the private RRC podcast. 

Even if you are too late to join this enrollment, fill out the application and get on the waiting list so that you will be first in line when enrollment opens again. 

What will Joelle do with her time in retirement?

Once you finally reach retirement you have to figure out what to do with all of your time. When Joelle moved to her new home in Washington she knew that she would need to find a way to fill 40 hours of her time that was previously spent working. 

Joelle has found a new yoga and pilates class to keep fit and connect with others and through these exercise classes, she was even able to connect with a hiking group. 

Exercise and connecting with others are important components of retirement. However, finding a purpose in retirement is even more important. Joelle understands that the success of her retirement hinges on finding a purpose which is why she sought out a nonprofit organization to volunteer with shortly after moving to her new home. Listen in to hear how Joelle found this organization and what she plans to do with her time in retirement.

Making friends in a new place

Moving to a new place can be challenging and when you do so upon retirement it is important to get involved in the community. Without workplace interactions, making friends is even more difficult than in the working years. Joelle has thrown herself into participating in her new exercise classes and volunteering with the nonprofit organization. Although she still doesn’t have anyone that she can truly call a friend, she has several acquaintances with whom she is looking forward to making a deeper connection.

Do you have any strategies for making friends in a new place? How will you expand your friendship base in retirement?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

RETIREMENT PLAN LIVE WITH JOELLE

• [1:30] What will Joelle do with her time in retirement?
• [10:18] Making new friends can be a challenge
• [16:09] Volunteering will give her a sense of purpose

LISTENER QUESTIONS

• [19:13] Greg is worried that the Social Security system will run out of money
• [25:04] Strategies to improve the longevity of the Social Security system
• [27:20] How to find a retirement financial planner
• [29:58] Roth conversions vs. earned income
• [30:53] Where to find a retirement plan of record template
• [32:14] Using human capital and financial capital to retire early and receive ACA credits
• [36:07] Health savings account beneficiaries

TODAY’S SMART SPRINT SEGMENT

• [38:44] Think about your strategy to create community and connections in retirement

Resources Mentioned In This Episode

RetireAgile.com

LiveWithRoger.com

BOOK - How to Begin by Michael Steiner Bungay

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

As you embark on your retirement journey, life’s question changes from what can you do to what will you do? You have so many choices that are available to you that the question of what to do next can be daunting. I explore these questions with Michael Bungay, author of the new book, How to Begin. 

Michael’s interview isn’t the only thing that’s in store for you today on the Retirement Answer Man show. This is the third installment of Retirement Plan Live with Joelle. Last week Joelle shared her dreams for retirement, so today we crunch some numbers to see how she will create her retirement paycheck. Make sure to sign up for the webinar on January 27 to see whether Joelle’s retirement will be feasible. 

What will you do next?

Often in midlife, you reach a crossroads where you have to decide what’s next. At this age, you have experience, contacts, and resources which opens a wealth of opportunities. So, how can you figure out what you should focus on in your next chapter? Think about what will bring out the best in yourself.

Should you create You+ or You 2.0?

Michael likes to compare this process of reinventing yourself to technology. You have the choice of creating You+ or You2.0. 

You+ is like getting a new app on your phone. It will improve your life for a while, but then you begin to plateau and you have to think about what is next. You 2.0 is like getting an entirely new operating system that can last for decades. Take this time to think about what your You version 2.0 will be. 

Michael’s book, How to Begin, lays out the process to help you figure out how to create You 2.0. You’ll learn how to set a worthy goal and make a difference that lights you up all while moving you towards the edge of what is possible. 

How to begin the process with fresh eyes?

Systems start breaking down once you reach the next level in anything that you do. The same holds true for reinventing yourself. To begin again you need to start by thinking about who you are so that you can set a worthy goal. Your first guess won’t be the best one, but as you work through the process it will help you to polish and refine your goal. 

The next step is to commit. Before you commit yourself to your goal, you’ll want to weigh your choices. Think about the prizes and punishments for completing or not completing your goal. 

Finally, it is time to make progress on your worthy goal. Goal setting is a challenging process, that is why it is important not to waste your time on the wrong goals. Your goals should be important to you and make the world a better place. What impact do you want to make on the world? 

If you are trying to figure out who you will become in the next phase of your life, check out How to Begin by Michael Bungay to help you get started. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

RETIREMENT PLAN LIVE WITH JOELLE

• [3:37] Joelle feels content with her retirement dreams
• [7:18] Looking at Joelle’s social capital
• [12:40] Joelle won’t have any human capital
• [16:16] Let’s look at Joelle’s financial capital

MICHAEL BUNGAY INTERVIEW

• [25:25] Who is Michael Bungay?
• [29:36] Michael’s second mountain
• [32:50] The difference between Michael+ and Michael 2.0
• [35:38] How to begin the process with fresh eyes

TODAY’S SMART SPRINT SEGMENT

• [53:46] Challenge yourself to see whether you are improving yourself or can you reimagine a new operating system

Resources Mentioned In This Episode

BOOK - How to Begin by Michael Bungay

BOOK - The Coaching Habit by Michael Bungay

PODCAST - 2 Pages with MBS 

BOOK - The Second Mountain by David Brooks

BOOK - From Good to Great by Jim Collins

Erin Weed - The Dig

Retirement Plan Live Webinar January 27

LTCI Partners

Social Security Detailed Calculator

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Welcome to the second installment of Retirement Plan Live. This is the episode where we run the initial numbers for Joelle’s retirement. We’ll walk through the 3 categories to define Joelle’s base needs, wants, and wishes and put number values to each of these areas. 

In addition to the interview with Joelle, you’ll hear listener questions about how to feel comfortable about retirement, converting 401Ks to Roth IRAs, and how my personal journey finding health insurance has turned out. 

As a bonus, you’ll hear an interview with Joe Saul-Sehy from the Stacking Benjamins podcast who has written a new book called Stacked. Listen in to hear if it is worth the read. 

Check your email this weekend to receive a free retirement planning worksheet

If you are following along with Retirement Plan Live and creating your own retirement plan, make sure that you are signed up for the 6-Shot Saturday weekly newsletter. In this Saturday’s newsletter, you will receive a link to a simple worksheet that will help guide you through your own retirement plan the way that I am walking through Joelle’s retirement plan. 

6-Shot Saturday is full of tips, news, listener questions, and more, straight from the Retirement Answer Man to your inbox. Simply head on over to RogerWhitney.com, scroll down to the bottom of the page, and enter your name and email address to sign up. 

Financial behavior is at the heart of all money management issues

Have you ever listened to the Stacking Benjamins podcast with Joe Saul-Sehy? If so, you’ll want to check out his new book, Stacked. If you haven’t heard his podcast, check it out on your favorite podcasting app. Joe joins me today to discuss why he wrote his new book, how he wrote it, and why it’s important. 

Did you know that 150 million Americans have cried about money? This number doesn’t only include people who live paycheck to paycheck, people who earn more are also concerned about money. These people aren’t crying about the loss of the mega backdoor Roth or cryptocurrency. They are crying about their financial behavior.

Many people who are educated about money and finances still struggle with their financial behavior. Mastering your finances isn’t about what you know, it's about what you do. 

Stacked helps readers take action to improve their financial situation

Traditional finance books often overcomplicate finances or hype certain complicated financial strategies. Stacked helps readers understand what they should be thinking about when it comes to financial matters and why they should think about them.

Since Joe discovered that people need actionable items to complete to successfully change their financial behavior he decided that his book should help readers change their financial behavior through action. The book is based on achievements that are built on micro-actions. Its format is award-based, similar to the way that many educational apps gamify learning. 

Joe begins financial planning with the end in mind

Joe’s book begins with the end in mind. It is goal-based and helps readers create a timeline to put their goals in perspective. Since most of us are visual learners, the book helps to plot things visually so that readers can begin to work on their financial problems. 

As you read, you’ll be able to visualize your goals so that you can put a list together to understand what you truly value and how that applies to your financial plan. Check out Stacked if you are interested in a light-hearted approach to a serious subject matter that gives you actionable items to get you closer to your financial goals. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

RETIREMENT PLAN LIVE WITH JOELLE

• [3:04] Joelle’s base spending needs
• [8:50] Joelle’s future expenses
• [20:25] Budgeting will be a new experience for Joelle and her husband
• [23:49] Joelle’s aspirations
• [29:35] They plan to age in place

LISTENER QUESTIONS

• [34:25] A 401K to Roth transfer question
• [38:39] How to help Tracy’s husband retire again
• [43:04] My health insurance journey
• [46:10] Reverse mortgages

JOE SAUL-SEHY INTERVIEW

• [47:09] Money management can be stressful
• [51:22] How Joe wrote his book
• [59:23] Begin with the end in mind
• [1:07:00] Joe’s goals for his book

TODAY’S SMART SPRINT SEGMENT

• [1:10:19] What will you wish you would have done at the end of this year?

Resources Mentioned In This Episode

BOOK - Stacked by Joe Saul-Sehy

BOOK - How to Begin by Michael Bungay Stanier

BOOK - Half Time by Bob Buford

BOOK - The Second Mountain by David Brooks

PODCAST - Stacking Benjamins with Joe Saul-Sehy

NeuYear.net

Powell’s Books

A new year means a new Retirement Plan Live! Over the course of the next 4 episodes, you’ll hear about Joelle and Mike and their plans for their recent retirement. Then, at the end of the month on January 27, we’ll wrap RPL up with a live webinar that you can participate in. Head on over to LiveWithRoger.com to register.

On this episode, you’ll learn about Joelle and Mike’s thought process on moving to a different state for their retirement. You’ll also hear from Kevin in Coach’s Corner as he explains his Zero Based Budgeting process. This episode is jam-packed with information including one correction to an answer that I recently gave to a listener question. Press play to listen now. 

Coach Kevin’s Zero-Based Budgeting process

Creating your financial plan in retirement shouldn’t only include dollars and cents. It is important to build a plan that encompasses your life goals. Most people tackle their retirement budget from the wrong direction which is why Coach Kevin came up with his own budgeting process.

• Step 1 - Start with 2 major retirement questions. Where will you live? Will you work or generate an income? Both of these questions can drastically change your retirement budget. Think about whether you’ll move somewhere new or whether you’ll stay local and how that decision will affect your budget and your retirement plans. If you choose to work a bit in retirement, that choice won’t simply change your budget; it will also change how you spend your time.
• Step 2 - What activities will you do? Think about 3-5 activities that bring meaning and purpose to drive your life in retirement. Which activities would you like to build your life around? Set yourself up to do the things that you love to do. 
• Step 3 - What would make retirement special for you? This is where you get to think big. What are your retirement dreams? Would you like to travel to distant lands, buy a boat or RV, or maybe renovate your home? 

Once you work through these 3 steps then you can begin to create your retirement budget. It is important to start with these steps rather than the money first so that you can ensure that you are making the most out of your retirement. 

• Step 4 - Continue creating your retirement budget by planning your day-to-day activities in retirement. These activities could include gym memberships, golf fees, sporting event tickets, theater tickets, and other areas where you will spend your time in retirement.
• Step 5 - Finally, you can add in all the other expenses like food, utilities, household expenses, and healthcare.

Leaving your comfort zone is always a bit scary

Remember that the type of life change that retirement brings can be scary. Any time you disrupt the status quo you leave your comfort zone. The good news is that if you start acting out your retirement plans and they don’t measure up to your vision, you can always change the plans. The trick is to develop a plan where you can pivot. With this Zero-Based Budgeting process, you can iterate as needed rather than being stuck with the same plan over the next 30 years.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

A CORRECTION

• [2:20] An HSA question correction

COACH’S CORNER

• [3:52] How to create a retirement financial plan that encompasses your life goals

RETIREMENT PLAN LIVE WITH JOELLE

• [19:50] Why Joelle volunteered to be the new Retirement Plan Live subject
• [24:24] Joelle and her husband have different money styles
• [29:38] How Joelle’s life was different living in L.A.

TODAY’S SMART SPRINT SEGMENT

• [37:42] Give yourself grace about beginning again

Resources Mentioned In This Episode

Register for the Retirement Plan Live webinar on January 27 at 7 pm CST

LTCI Partners

Retirement Manifesto

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Do you own any cryptocurrency? First introduced in 2009, Bitcoin and other cryptocurrencies have exploded in popularity over the past few years. 

On this episode of Retirement Answer Man, we’ll discuss what cryptocurrency is, how it is revolutionizing the banking system and the drawbacks of this new type of currency. Listen in to learn whether you should add a bit of crypto to your retirement portfolio and you’ll also hear the answers to listener questions about IRA contributions and IRMAA surcharges.

What is cryptocurrency?

Nan is curious about whether Bitcoin or other cryptocurrencies would be good investments to add to her retirement portfolio to hedge against inflation. Before we get into the answer to that question, we need to understand exactly what cryptocurrency is. 

Stemming from the word cryptography, the word cryptocurrency means it is a currency that is encoded. This digital currency is secured by cryptography technology which prevents it from getting hacked. 

Why is cryptocurrency such a big deal?

Cryptocurrency is separated into denominations called coins or tokens which are actually cryptographically protected codes. These new currencies are atypical in that they are issued by non-centralized networks or entities and not issued by any government. 

The value of a cryptocurrency coin or token is stored digitally and managed by a blockchain network that facilitates transactions. Blockchain is basically a digital bank replacement that is virtually frictionless. Transactions are instantaneous and can be confirmed quickly. 

The promise of cryptocurrency could revolutionize currency transfers and remove the need for a banking system. With encrypted digital currency there is no need for a bank. Transactions bypass the third-party gatekeepers that are typical of traditional banking transactions, so there is no need for any extra fees. 

How could cryptocurrency help combat inflation?

Inflation occurs when a currency loses value over time. We have seen the inflation rate spike over the past year and the more money that comes into the system the less value the dollar will have. Since the US government is printing currency faster than ever, many people are worried that the dollar will continue to lose its value.

New crypto coins or tokens can only be released by mining, so the value of the currency is based on a degree of scarcity. The finite supply of the currency’s structure is designed to retain its value over time.

What are some concerns over cryptocurrencies?

With all the benefits that come with this revolutionary financial technology come some drawbacks. Since it is so new, cryptocurrency has become a craze with new currencies being released each day. Much like the internet craze of the early 2000s, no one knows which currencies will come out on top. 

The novelty of this new trend has also created volatility in the values of different cryptocurrencies. Currency values can spike up or down 10%-20% in one day.

Investing in cryptocurrency is a bit like heading out to the wild west to pan for gold. Since it is so new, there is little to no government regulation which, paired with the anonymity that these currencies provide, can attract bad actors and lead to money laundering and tax evasion.

Listen in to hear whether I recommend adding cryptocurrency to a retirement portfolio to hedge against inflation. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

LISTENER QUESTIONS

• [5:05] Is investing in cryptocurrency a good way to combat inflation in retirement?
• [11:51] Why is cryptocurrency such a big deal?
• [17:01] What are some concerns over cryptocurrencies?
• [22:10] Contribution limitations in the year that you retire
• [24:41] Appealing the IRMAA surcharge
• [26:27] What counts as income when calculating ACA credits?

TODAY’S SMART SPRINT SEGMENT

• [28:16] Finalize your 2021 net worth statement

Resources Mentioned In This Episode

Episode 300 - Medicare and IRMAA

44-ext.pdf">Form SSA-44 - Medicare Income-Related Monthly Adjustment Amount - Life-Changing Event

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Do you have a system for estimating what your future RMDs will be? Should you keep a mortgage or pay off the balance of your house in retirement? What should you do with the money that you withdraw to fill up your tax bracket? These are just a few of the questions that will be answered on this episode of Retirement Answer Man. Press play to check it out!

My word of the year

The end of the year is always a good time to think about beginning anew in the next year. I’m not big on celebrating New Year, but I enjoy the renewal process that comes with the start of the new year. 

If you have listened to the show in the past, you have heard me discuss my word of the year. I choose a word each year as part of my own process of renewal. I try to use my word of the year as my guiding light to help me stay focused on my goals for the year ahead. Have you ever chosen a word of the year to help you focus on your goals? Listen to this episode to hear what my word is this year. 

How do you calculate what your future RMDs will be?

You know RMDs are coming at age 72, but how can you estimate what they will be? To calculate your RMDs you can create your own spreadsheet to get an estimation. Once you have a feasible retirement plan in place and you know how you will fund your retirement you can use this fantastic exercise to help you optimize your retirement plan. 

To estimate future RMDs, I set up a simple spreadsheet with these columns: your age, the year, the RMD ratio, the end of the year account value for the prior year, estimated withdrawals, and the year-end value. Once you have these values in place you can take the total and divide it by the value provided by the IRS uniform lifetime table to estimate your future RMD. 

How estimating your RMDs could benefit your retirement plan

One way that this exercise can benefit you is by allowing you to project the risks that you might encounter in retirement. You may realize that you won’t need this much money to live on and decide that it is a good idea to fill up your tax bracket by withdrawing from your IRA sooner so that you can lower your RMD in the future. 

What to do with the money that you withdraw from your IRA to fill up your tax bracket 

If you do decide to withdraw from your IRA or 401K to fill up your tax bracket you will have the benefit that you know what your tax rate will be, but what should you do with the money? The way I see it you have 5 options. You can spend it, save it, give it away, invest it in after-tax vehicles, or convert it to a Roth IRA. The most important thing to do when making these arrangements is to think through your process in an organized way. What would you do if you decided to fill up your tax bracket?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

• [1:30] My word of the year

LISTENER QUESTIONS

• [6:55] How do you calculate what your future RMDs will be?
• [15:33] Is it a good idea to keep a mortgage in retirement?
• [21:34] What do you do with the money that you withdraw from your 401K?
• [26:20] A suggestion from Mike
• [28:21] The efficacy of using balanced funds

TODAY’S SMART SPRINT SEGMENT

• [36:18] What will be your word of the year next year?

Resources Mentioned In This Episode

LTCI Partners 

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Do you have a net worth statement that you update regularly? Whether or not you do, you’ll want to learn about the psychological benefits that this exercise can create. In this episode of The Retirement Answer Man show, we’ll discuss what a net worth statement is and how you can gain from creating one regularly. 

You’ll also hear several listener questions that range from inherited IRAs to I-bonds, to SPIA annuities. If you are interested in rocking retirement, you’ll need to arm yourself with the knowledge to help you navigate this change in life. Listen in to get started on your retirement education journey. 

A Rock Retirement Club announcement

If you are looking to join the Rock Retirement Club you can sign up for the waiting list until we open enrollment again in late January. We closed enrollment in early December to restructure the club a bit and introduce periodic enrollment so that new members can be a part of a cohort. This will help freshmen members to take full advantage of their membership as they work their way through all the benefits that the club provides. If you are interested in checking out the Rock Retirement Club, head on over to the website and join the waiting list to receive the latest email updates. 

What is a net worth statement?

If you have listened to the Retirement Answer Man show in the past, then you already know that a net worth statement is a statement of the resources you have accumulated with your wealth. 

Your net worth statement lists all of your assets and their values and your debts and their values. Assets like your retirement accounts, investment accounts, or property are listed on the left side of the net worth statement. These assets can be categorized by whether they are tax-deferred, after-tax, or tax-free accounts. On the right side is the debt column. Total each column up to see the value of each. Once you do that you’ll subtract the debts from your assets and have your net worth. 

Creating this valuable financial tool is a way to understand the cumulative impact of the financial decisions you have earned. Do you have a net worth statement that you update regularly? 

The 5 ways you can use your income

Since there are only 5 things that you can do with your income, your net worth statement reflects those financial decisions that you have made. These are the 5 ways that you can use your money:

1. Spend it. 
2. Pay down debt
3. Give it away.
4. Save it as cash in an emergency fund.
5. Invest for the future.

For every dollar you have earned you have made a decision (whether consciously or unconsciously) to do one of these 5 things, so your net worth statement is a reflection of these choices. 

Creating a net worth statement provides a psychological impact

By updating your net worth statement periodically you’ll be able to compare how your finances reflect your values and whether you are using your finances to stay in line with your goals. If you identify any incongruencies then you can address the behavior before it gets out of hand. 

Have you ever put together a net worth statement? When was the last time you updated it? As a rule of thumb try revisiting it every 6 months.

Make sure to listen to the next episode to hear my word of the year!

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [1:56] What is a net worth statement?
• [4:50] Creating a net worth statement provides a psychological impact

LISTENER QUESTIONS

• [11:21] You can work with LTCI Partners directly
• [14:45] Mike asks if I-bonds are a no-brainer
• [20:12] Examples of how people have blended retirement with meaningful work
• [24:28] A comment about SPIA annuities
• [32:25] Alternatives for the fixed income portion of assets in retirement 
• [35:27] Navigating the changes to the inherited IRA RMD rules

TODAY’S SMART SPRINT SEGMENT

• [37:51] Consider creating experiences rather than giving gifts for the holidays

Resources Mentioned In This Episode

BOOK - Retirement Planning Guidebook by Wade Pfau

Wade Pfau - Retirement Researcher

TreasuryDirect.gov

LTCI Partners

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

You have probably heard me refer to a retirement plan of record in the past few episodes, but you may be wondering what exactly this is. I have had several listeners reach out and ask me to define this term, so in addition to hearing listener questions, today you’ll learn exactly what a retirement plan of record is and how it can help you plan your retirement. Press play to check it out.

What is a plan of record?

The retirement plan of record is something that I work on with my clients and I am in the process of developing a template that will be available in the Rock Retirement Club masterclass. This plan of record will help you create a current representation of your decision-making framework so that you can walk through a decision-making process in an organized way. 

Why is it important to have a plan of record

There is so much to consider in retirement planning--asset allocations, withdrawal rates, Roth conversions, IRMAA, taxes, not to mention who your friends will be and what you’re going to do all day. With all of these considerations, it is easy to become overwhelmed by the choices if you don’t have an organized way to make decisions. Without a clear direction, your decision-making process could have you bouncing around like crazy. 

The 3 pillars of the agile process

When creating a retirement plan of record, it is important to organize your financial goals into 3 pillars so that your plan can remain agile. First, develop a feasible plan, then, make it resilient, and lastly, optimize your plan. If you can arrange your decisions under these 3 pillars, then you can think through the process in an organized way. 

A retirement plan of record can ensure that your decisions reflect your values and goals. You’ll be able to create feasible spending goals based on your resources. Your plan needs to be resilient so that you can manage risks. 

Once you have your plan of record in place then you can work through each decision while referring to your plan. You’ll be able to see the changes you are considering within your organized process and create a what-if scenario by making a copy of your plan of record and adjust accordingly. This way you’ll be able to flush out the implications of this new variable so that you can examine the decision in a thoughtful way. 

The plan of record is a useful tool to accomplish organized thinking that you can execute in a consistent rhythm so that you can stay agile and make the most of your life regardless of what happens. Your plan of record allows you to focus on what you can control.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

• [3:50] What is a plan of record?

OUR SPONSOR

• [12:22] Check out LTCI Partners for your long-term care insurance needs

LISTENER QUESTIONS

• [13:31] Lee is worried about inflation--should she work longer?
• [22:05] Thinking about Social Security claiming strategies
• [28:18] How IRMAA surcharges work each year
• [33:26] How to deal with switching from an HSA to Medicare
• [35:32] Filling up tax bracket buckets

TODAY’S SMART SPRINT SEGMENT

• [39:03] Review your retirement contributions to make sure you are hitting the numbers you want

Resources Mentioned In This Episode

Episode 385 - The 4% Rule

Episode 395 - Retirement Risk Basics

Check out LTCI Partners for your long-term care insurance needs

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Rocking retirement doesn’t mean getting your Roth conversions right, it means minimizing your regrets. At the end of your life, you don’t want to think “yay, I paid fewer taxes!” you want to think “wow, my life was awesome!” Overcoming the frugality that stems from a lifetime of saving is one way to live a life free of regret in retirement.

To ensure that you can live life to the fullest, create a retirement plan that can iterate as life unfolds. When you have a feasible, resilient retirement plan that utilizes the resources you have you’ll be able to build the life you want. You’re already well on your way to rocking retirement by listening to the Retirement Answer Man show. 

On dialing back

Recently I committed publicly to publishing 2 episodes per week in an effort to improve the show. However, very shortly after making this change, I realized that it wasn’t a good change for me. For this reason, I decided to pivot back to one episode per week. I realized that it is important to live my life true to myself rather than base my choices on the expectations of others. Have you ever made a decision that you quickly had to undo? 

Should Gene pay off his house from a pretax retirement account?

Gene is considering paying off his house from his 401K account. He owes $200,000 at 2.5% on a 25-year loan. He would like to know what the best course of action would be in his situation. 

As with any major retirement planning question, my recommendation is to refer to your retirement plan of record. (To get a more detailed understanding of the retirement plan of record, make sure to listen to the next episode!) After walking through that plan with the mortgage in place, then you can create a what-if scenario in which you pay off the mortgage. This way you can compare each choice side by side to see which one would best serve your overall goals.

Listen in to hear why I wouldn’t take the funds from my 401K to pay off my house and hear what I would do instead. 

How to move from accumulation to distribution phase of life

You have saved for decades, so when the time comes to start spending that savings it can be a challenge to loosen the purse strings. Retirement is not simply about spending money: it’s about living your life to the fullest. 

Think about why you chose to save your money and act frugally for so many years. Chances are, you did so to achieve financial security and to pay for the best retirement lifestyle that you could afford. Achieving financial security means that you feel comfortable with your retirement plan. If you don’t have faith in your plan, consider having a professional look over your plan to bolster your confidence so that you can rock retirement. 

How to improve your life and overcome frugality

If you are a naturally frugal person, you may think that you have everything you need at this point in life, so there is no reason to spend more than you do. However, there are many ways that you can improve your life by spending money. Consider whether these activities would enhance your life.

• Eating out with friends more frequently
• Attending physical therapy
• Getting regular massages
• Hiring a personal trainer to improve fitness
• Hiring a nutritionist to help you plan meals

Overcoming frugality can help you live your life to the fullest and rock retirement. Think about how you could increase your spending to maximize your life. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

LISTENER QUESTIONS

• [4:00] A correction on QLACs
• [5:05] Social Security and Cola
• [9:25] An urgent inherited IRA question
• [12:30] On dialing back
• [15:08] Whether or not to pay off the house from a 401K
• [20:48] One listener appreciated learning about Roth conversions 

COACH’S CORNER WITH KEVIN LYLES

• [26:18] On overcoming frugality
• [29:42] Spending guaranteed income is much easier
• [31:26] How you can improve your life by spending
• [34:25] 3 tips to incorporate to spend your money

TODAY’S SMART SPRINT SEGMENT

• [42:55] Look for ways to enhance your life today

Resources Mentioned In This Episode

Start here to listen to the Retirement Tax Management series with Andy Panko

Brian Johnson’s Optimize.me

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

How do you pivot from a moderately aggressive portfolio in the accumulation stage of retirement planning to the decumulation stage? In today’s episode, we tackle two listener questions about the mechanics of decumulation in retirement planning. You’ll also hear a question about using QLACs to reduce RMDs. If you are wondering about the details on how exactly you are going to make this retirement thing work then be sure to press play. 

Retirement plan live is coming soon to a podcast near you! 

In January we’ll be hosting the next edition of Retirement Plan Live. Retirement Plan Live is an extremely popular series that we run each year where I walk out the logistics of creating a retirement plan over the course of 4 episodes with a listener. At the end of the series, we host a live webinar where we analyze whether that particular plan is feasible. Our last Retirement Plan Live series dealt with Trish and her unexpected retirement. 

If you would like to be the next subject of RPL, make sure you are signed up for the 6-Shot Saturday newsletter so that you can access the link to the application form. We’ll choose one listener from the dozens of applications we receive. We will make sure to change the name and details of your situation while at the same time keeping the generalities in check. Listen in to hear the details. 

How to get the most bang for your buck in your retirement portfolio

Steve has invested moderately aggressively, but as he turns 65 and enters retirement he is looking to become more conservative while at the same time getting the most bang for his buck. He is trying to figure out how to structure his portfolio conservatively while providing a bit of growth and income through dividends.

The best way to approach this or any retirement planning question is to take a top-down approach. If you start at the bottom and work your way up you miss out on how your question fits into the big picture. 

Retirement planning starts with your overall goals for retirement. Then you need to understand how this particular question fits into your retirement plan. Once you have a feasible plan, then you can build a cash flow model which plans out your spending over the next 5 years and beyond. Once you have this cash flow model in place then you can make that model resilient. This is where your question comes in. How would you make your plan resilient? 

Do you want to optimize your portfolio for more money and higher returns or do you prefer to have a high level of confidence in your spending no matter the market? Rather than getting the most bang for your buck, consider what kind of outcome you would prefer to secure. 

How to simplify retirement accounts without taking a huge tax hit

Karen is planning on retiring at age 61, but before she does she would like to simplify her retirement accounts. Currently, she has over 50 different investments. She wants to simplify the accounts into as few funds as possible and rebalance them without taking a huge tax hit. 

Once again, we must approach this problem in an organized way. When you consider what you are trying to accomplish by simplifying your accounts then you can see how this exercise will fit into your overall retirement plan. How would you approach this question? 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [1:30] News on the show

LISTENER QUESTIONS

• [6:25] Using QLACs in retirement planning to reduce RMDs
• [11:35] Rita is interested in another series on long term care
• [12:46] Steve’s question getting the most bang for his buck during decumulation
• [30:20] Karen’s question about simplifying her portfolio

TODAY’S SMART SPRINT SEGMENT

• [40:14] Go beyond the normal thankful things--think about the things that warm your spirit

Resources Mentioned In This Episode

Retirement Plan Live 2021 - start here

Decumulation series - start here

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

We often have monthly themes to guide the topics of this show, but this month on Retirement Answer Man we are doing a bit of a mishmash. Today I want to share some thoughts I had on retirement in general and answer a few retirement questions. As you listen, think about which topics apply to you and your situation and see if you can come up with actions that can get you closer to your retirement goals. 

Overcoming frugality can be a challenge

After decades of saving your money and delaying gratification, suddenly letting loose to spend money on the things that make you happy may not come easy. If you have been a diligent saver over the years, you may find it challenging to shift from a saving mindset to a spending mindset especially when that mindset shift is timed with the loss of income from your human capital. 

The good news is that shifting to a spending mindset doesn’t need to happen like flipping on a light switch. This is a gradual change that can occur slowly. One way to help yourself become more open to spending is to construct a framework to help you make decisions.

Becoming a new version of yourself takes time. Give yourself grace and time to make change happen. 

Retirement planning is complicated

If anyone ever tells you that they have all the answers to retirement planning, run in the other direction. This is because no one can ever have all the answers to something so complicated as retirement planning. The way I like to go about planning is by organizing decisions under 3 separate categories. 

1. Are your dreams feasible? Consider the life you want and whether it is feasible given your resources. This means that you need to consider your values and what you really want. Next, you’ll want to discuss it with your spouse if you are married and run the numbers to see if your dreams are truly feasible.
2. Is your plan resilient? The winds of change will come and they could take many forms. They could come in the form of inflation, uncooperative markets, death, or healthcare bills. Having a resilient plan will help you stay the course that you set. Ways that you could make your retirement plan resilient could be through cash flow planning, matching your assets, and managing your risks in an organized way. 
3. Can your plan be optimized? Optimization is a way to enhance your journey. Tax planning, asset allocation, Roth conversions, ACA credits, and Medicare decisions all fall under the category of optimization. These are ways that you can enhance your plan to improve it. However, it is important to remember that these are the extras, not the plan itself. 

Organize your retirement planning to stay on track

By organizing your retirement planning under these 3 pillars you can ensure that you aren’t letting the tail wag the dog. Having an organized way to deal with your retirement plan will ensure that you aren’t missing out on an aspect of retirement that could have a major impact on your life. 

Make sure to stick around for the listener questions segment of the show. You’ll hear me answer questions on how to calculate modified adjusted gross income to include capital gains and I’ll even respond to a recent critique that I had from one listener. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

REFLECTIONS ON RETIREMENT

• [4:35] Overcoming frugality is a challenging thing for many recent retirees
• [6:50] Retirement planning is complicated

LISTENER QUESTIONS

• [13:07] Modified Adjusted Gross Income 
• [16:33] My response to Janet’s critique
• [18:57] Otto’s comments on a recent question I answered

TODAY’S SMART SPRINT SEGMENT

• [22:28] Think about something that you need to undo

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Ever since listeners enjoyed our Retirement Tax Management series with Andy Panko we have received an influx of questions surrounding taxes. I’ll answer several questions today about filling up your tax buckets. 

I’ll also respond to queries about planning when to take Social Security when you will have excess RMDs and how to incorporate balanced funds into your asset allocation. Don’t miss this episode if you still have burning tax questions left over from last month’s series on retirement tax management. 

The Rock Retirement Club has so much to offer

The Rock Retirement Club recently hosted the Retirement Rodeo Round-Up in Fort Worth, Texas. I was so impressed by the levels of motivation and excitement that I saw from the participants. Everyone who attended was excited to share their knowledge and learn from each others’ journeys so that they could make the most out of their retirement. 

Have you considered joining the Rock Retirement Club? If so, or even if you just want to learn more about it, check out the virtual open house that we’re having on November 16. At the open house, you’ll get a sneak peek of the Club’s Retirement Master Class and preview member tools like Everplans and the New Retirement Planner Plus calculator. The open house will be a great way to decide whether the RRC is right for you. Register for this event at LiveWithRoger.com.

Are you having trouble overcoming frugality?

One common concern from the participants at the Retirement Rodeo Round-Up conference was the challenge of overcoming frugality. Like many Retirement Answer Man listeners, RRC members are amazing savers, but after saving and delaying gratification for so many years it is hard to break the habit. 

There is a mental shift that must take place to switch from saving to spending and shifting your mindset can be difficult. Instead of watching your accounts grow, you now see them stay stagnant or decrease over time and this can set off alarm bells in your mind. Have you experienced difficulty navigating this change? What did you do to shift your mindset from saving to spending?

When should Jenny claim Social Security?

Jenny has been a diligent saver and will end up having excess RMDs. This issue has caused her to think about the most beneficial time to claim Social Security. She is considering taking Social Security at age 62 to lower her income, but I have another strategy for her to consider. Listen in to hear my thoughts on what you should do if you have substantial projected RMDs. 

How to fill up your tax bracket bucket in retirement

One of the strategies that Andy Panko and I talked about last month in the Retirement Tax Management series was filling up your tax bracket. When filling up your tax bracket you'll want to take funds from your IRAs or other tax-deferred accounts and either spend that money, invest it in after-tax assets, or convert it to a Roth IRA. Work out the best situation for you by creating a retirement plan of record and then test different outcomes. Have you created a retirement plan of record yet? 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

LISTENER QUESTIONS

• [2:40] It takes a big mental shift to stop saving and start spending
• [4:01] How much to allocate to asset allocation if you have balanced funds in your portfolio?
• [7:05] How Social Security works with RMDs
• [13:10] How to fill up the tax bracket bucket
• [15:15] What to do with the money that you fill up your tax bracket with
• [16:26] Scott really enjoyed the episodes with Tanya Nichols

TODAY’S SMART SPRINT SEGMENT

• [17:10] Calculate your projected income for 2021

Resources Mentioned In This Episode

Register for the Rock Retirement Club’s virtual open house at LiveWithRoger.com

Tanya Nichols with Align Financial

Check out Tanya Nichols in the Women in Retirement series - Start Here

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Do you wish you could find a comprehensive guidebook to help you plan your retirement? If so, you won’t want to miss this interview with Dr. Wade Pfau. Wade is the founder of the Retirement Researcher website and a retirement income professor at the American College. He is also the author of several books and his newest, the Retirement Planning Guidebook, was recently published. This book is the most detailed retirement guide that you will find, so don’t miss out on this interview to hear what to expect from Wade’s guidebook.

There is no one way to plan for retirement

Unfortunately, there isn’t a simple answer to how to plan your retirement. The way that works for you may not be ideal for your next-door neighbor. This is why it's important to come up with a strategy first. That way you can build your retirement plan according to your strategy. If you can come up with a flexible solution then you can make iterations based on changes in the world around you. Retirement planning is all about preparing for uncertainty. With the right strategy, you can make educated decisions to carry you through those uncertain times. 

Retirement choices cause a ripple effect throughout other areas

The choices you make in retirement have a ripple effect in many areas and one decision can create unexpected consequences in another part of your retirement plan. This makes it challenging to make any choices and can lead to analysis paralysis. 

Let’s see how one decision could lead to a domino effect. Say that you are trying to diversify your portfolio. If you sell a major position that you hold then you could end up with capital gains which could push you into another tax bracket which could eliminate the possibility of using ACA credits and so on. 

Rather than be paralyzed by the fear of making the wrong decision, you need to think in an organized way about what problem you would like to solve. If you are trying to lessen your market risk you will need to sell to diversify your portfolio. However, if you are trying to focus on getting ACA credits the decision to diversify all at once may not be the best strategy. 

How much should we consider tax policy in retirement planning

Taxes are one of the great unknowns in retirement planning. No one can say for certain how tax policy may change in the future. So how much should you try to predict tax policy changes when planning for retirement?

It is always good to start with a basis and then test different outcomes. The current tax rates are a good starting point for building your retirement plan of record. Once you build this foundation, you can tease out different outcomes as you learn more information. 

Retirement tax planning isn’t made on a yearly basis, rather you should plan to try and reduce your overall lifetime tax bill.

Learn how to utilize Social Security, plan for the unknown, and lower your lifetime tax bill on this episode of Retirement Answer Man with Wade Pfau. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WADE PFAU INTERVIEW

• [3:30] One decision you make in retirement affects others
• [10:21] There is no one way to plan for retirement
• [13:31] How much should we consider tax policy in retirement planning?
• [16:45] Social Security considerations
• [25:53] Consider the premium cliffs that are out there
• [31:31] How to factor in a cognitive decline
• [34:58] How to navigate the lump sum vs. lifetime income decision

Resources Mentioned In This Episode

BOOK - Retirement Planning Guidebook by Dr. Wade Pfau

Retirement Researcher website

The American College

BOOK - How to Decide by Annie Duke

BOOK - Because a Little Bug Went Ka-Choo by Rosetta Stone

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Do you understand what you need to do to build a happy retirement? My guest today has studied the data to tell the story of happy retirees in his new book, What the Happiest Retirees Know. Wes Moss is not only an author of multiple books, he is the host of the live radio show, Money Matters, and the Retire Sooner podcast. Learn the habits to develop now to create a happy retirement by listening to this interview with Wes Moss. 

Are you retiring to something or away from something?

The real-world data shows that 70% of people don’t like their job and 20% of people actively hate their job so much that they want to hurt the company they work for.

These sad statistics lead to people thinking that retirement is the answer to their unhappiness. However, it isn’t enough to retire away from something. We must retire towards something to find happiness in retirement. Is your objective to retire away from your job or towards happiness? Think about what you would like to retire towards. 

Do pre-retirees have misconceptions about what a happy retirement really is?

Most people have a preconceived notion about retirement. They believe that once you reach a certain level of financial security, you’ll stop working and then the skies will open up and the world will become a happy place. They feel like retirement will be some version of heaven.

However, the reality is much different. There is a period of transition and not an instant magical change. Preparing well in advance will help to create a happy retirement and avoid disappointment. 

It only takes $75,000 per year to be happy

One of the biggest worries in retirement is having enough money, but research shows that it only takes between $70,000 and $80,000 per year to create a happy life. Having more money won’t increase levels of happiness. 

It doesn’t take as much as you think to avoid an unhappy retirement. Even though many people feel the loss of a sense of purpose and increased loneliness once they retire, with a bit of preparation, anyone can create a happy retirement.

Habits to develop to create a happy retirement

Wes describes ten categories in his book that contribute to happiness in retirement. These habits include: 

• Money habits
• Curiosity habits
• Family habits
• Love habits
• Faith habits
• Social habits
• Home habits
• Health habits
• Investing habits

Within these categories, only a few areas actually have to do with money. If you can build up a solid foundation of healthy habits before you retire, you will have a greater chance of creating a happy retirement. 

What the Happiest Retirees Know can even be used as a workbook. As you read through, find the habits that you want to improve and see how you can stack them to work on 3 or 4 together at the same time. Listen in to hear how golfing is a way that I habit stack areas that I am actively working on in my own life. What are you working on to ensure that you create a happy retirement? 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WES MOSS INTERVIEW

• [2:30] The data tells the story
• [3:55] Do pre-retirees have misconceptions about what a happy retirement really is?
• [11:54] It only takes $75,000 per year to be happy
• [15:14] If your base is in place then you don’t need to worry so much about money
• [21:45] How to use Wes’s book as a workbook

Resources Mentioned In This Episode

BOOK - What the Happiest Retirees Know by Wes Moss

BOOK - You Can Retire Sooner Than You Think by Wes Moss

Retire Sooner podcast

Money Matters

BOOK - The Top Five Regrets of the Dying by Bronnie Ware

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Do you let perfection get in the way of progress? Trying to reach perfection could prevent you from reaching your goals. Retirement coach, BW joins me to discuss forward movement and setting realistic goals. 

In this episode, you’ll also hear listener questions about claiming spousal Social Security, preparing for retirement after divorce, and annoying financial surprises. You won’t want to miss the differing points of view on benefit protections, so make sure to listen until the end. 

What can Hazel do to prepare for retirement?

Hazel is 51 and going through a divorce. She doesn’t plan to retire until she is age 65 even though she is eligible for a pension at age 55. She is looking ahead to what she should be doing to prepare for her retirement in the midst of her divorce. 

The first thing that she needs to do is to get through this divorce. Divorces can be messy or they can be amicable. While no one wants to create a messy divorce, it is important to make sure to take care of yourself first. Don’t mistake being nice with sacrificing your own interests. 

The next thing to do is to continue to save in a 401K. Even though Social Security and the pension will be Hazel’s main income streams in retirement, it is important to continue to build her retirement savings. 

The last thing that Hazel and you can do to prepare for retirement is to head over to DoRetirementRight.com and download this guide that will walk you through the steps to take in the years leading up to retirement. 

How to time the spousal Social Security benefit

Mike has a question about the timing of his wife’s spousal Social Security benefit. He is considering taking his benefit early at age 62, but his wife is 3 years younger than him. If he takes his benefit at 62, his wife will still not be eligible for her benefit until she turns 62. However, if he waits until full retirement age at 66 then she could take her benefit at age 62. 

A great way to begin to plan this out is to create a retirement plan of record using the full retirement age as the basis and then to create different what-if scenarios. You can use the Spousal Social Security calculator to help calculate the percentage that your spouse would receive. Check out this recent interview I had with Wade Pfau to hear just how important Social Security is to retirement plans. 

An annoying financial surprise or spousal protection?

Rhonda doesn’t have a question but rather a comment on annoying surprises that she has discovered in her finances. She has a pension and has to decide how she wants to take it. Recently, she discovered that if she decides to take the maximum benefit that only covers her own lifespan then her husband has to sign off on the form to approve this benefit selection. 

This isn’t the only thing that she has noticed that she needs her husband’s notarized signature for. If she chooses to change her beneficiaries on her retirement accounts she must also get approval from her husband. 

Rhonda feels like this is one more obstacle for women to overcome to live life in a man’s world, but I have another perspective. These rules (which vary state by state) were actually created to help protect women when men were the main breadwinners. 

How do you see these rules? Do they protect women or make it more challenging for them to keep their hard-earned money?

Don’t let perfect be the enemy of the good

As we finish off the month-long series on retirement tax management it can be easy to get caught up in the details of optimizing your situation. However, trying to get something perfect can lead to analysis paralysis. Sometimes we just have to point ourselves in the right direction and move ahead. It is important to be realistic about what is possible. There are so many unknowns when it comes to future tax planning that it is hard to be precise. The most important thing to do is to get the big things right and let the small things take care of themselves. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

• [2:30] What can Hazel do to prepare for retirement?
• [8:30] Mike’s Social Security question
• [12:36] You don’t need to feel dumb
• [15:12] Rhonda discovered annoying surprises to deal with as a woman

COACHES CORNER WITH BW

• [21:07] Don’t let perfect be the enemy of the good

TODAY’S SMART SPRINT SEGMENT

• [29:18] Have a safe Halloween

Resources Mentioned In This Episode

Start listening to the Women in Retirement series here

Spousal Social Security calculator

Wade Pfau interview

DoRetirementRight.com

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Over the past several episodes you have learned so much about tax planning in retirement. You learned why tax planning is important, all about the hidden tax bombs, and tools that you can use to defuse those tax bombs. Now it’s time to incorporate all of this newfound knowledge into your retirement plan.

Andy Panko from Tenon Financial joins me once again to discuss how to incorporate tax planning into your retirement plan. Press play to hear how you can create a retirement plan that incorporates tax planning.

How to become comfortable with uncertainty

Oftentimes people are looking for a hard and fast rule to follow to make their retirement plan foolproof; however, there is no magical number or rule to create an iron-clad retirement plan. We can’t predict the unknowable, so we have to become comfortable with the uncertainty that retirement brings. 

To help you conquer that uncertainty, it is important to build a process that will help you make better decisions. The way that you can do this is by creating a retirement plan of record and testing projections and what-if scenarios. By setting up a decision-making framework, you will be able to manage your retirement finances in an uncertain world. 

Tax planning is a way to optimize your retirement plan

Before you can start tax planning you need to ensure that you have the basics in place. As long as you can first map out the fundamentals of retirement planning like your expenses, your retirement paycheck, and your asset allocation you will then be able to optimize your retirement journey with tax planning. Remember that tax planning isn’t the main part of retirement planning, it is simply a way to enhance your retirement experience and financial plan in retirement. 

Choose a retirement planning tool and stick with it

There are plenty of tools on the market that can help you create your retirement plan and projections. In the Rock Retirement Club we use the paid version of the New Retirement Calculator, but there is also a free version that you can use. You may be happy by creating a simple spreadsheet to help guide you.

Just like there is no perfect retirement plan, there is also no perfect retirement planning tool. Whatever you decide to use, stick with that tool the way that you stick with the same scale to check your weight. You don’t want to flip flop back and forth between different calculators since the numbers may not look the same. 

Make an educated guess

Even though you can’t predict what will happen in the future with tax legislation, you can make educated guesses about what would work best for you based on your own situation. Educated guesses are not just guesses. By using your retirement plan of record and modeling what-if scenarios you know that you are doing your best to make the best decisions for your retirement. Your decisions won’t always be the ‘right’ decisions, but that doesn’t mean that you shouldn’t plan in the first place. 

By creating a retirement plan of record and making projections you will be able to create a model that you can work from. Staying agile is the most important way to establish a successful plan so that you can rock retirement. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [4:30] Build a process to make better retirement decisions
• [7:52] Create a resilient plan
• [11:11] What if scenarios are important to creating a retirement plan
• [17:35] Educated guessing is a big part of retirement planning
• [24:24] Action items
• [30:05] How to choose a financial advisor or tool to help you plan

TODAY’S SMART SPRINT SEGMENT

• [31:40] Start the process of getting a plan of record in place

Resources Mentioned In This Episode

Tenon Financial

BOOK - Thinking in Bets by Annie Duke

BOOK - How to Decide by Annie Duke

The New Retirement Calculator

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Roth conversions, HSAs, pension choices, risk management: these are the topics of today’s listener questions. 

Susan, Gina, IM, and Daniel all submitted their questions to me via RogerWhitney.com/AskRoger and you can too! If you have any retirement questions, or even if you simply want to leave a comment about the show, click on the link to present your question. 

Whether you are looking to learn more about HSAs, Roth conversions, or evaluate your pension choices, listening to other listeners’ questions can help you learn how to frame your own questions and consider your options by always keeping your goals in mind.

How to evaluate the best way to take a pension?

Susan recently asked her financial advisor how she should take her pension and wasn’t satisfied with his answer. 

There are several options to choose from when deciding how to take a pension. One choice is to take the pension for a larger monthly sum for the duration of the pensioner’s life. Another option is to take a smaller amount over the course of the lives of both the pension holder and their spouse. A third option is to opt for a lump sum payment and forgo the monthly payments altogether.

When making this decision there are a few ways to evaluate your choices. Create a what-if scenario to help you compare all the options. Then evaluate them next to your retirement plan of record. Listen in to hear how I perform this exercise with my clients. 

HSAs after age 65

HSAs are amazing tools that can help you reach your retirement goals. Gina’s question is about HSAs after age 65. She is still employed and plans to continue working for a few more years. She would like to continue to stay enrolled in her high deductible insurance plan so that she can continue to contribute to her HSA, but she isn’t sure how that would affect her Medicare choices. 

This is a great idea but navigating these waters is tricky since the rules surrounding Medicare are so complicated. Making a mistake could lead to a gap in coverage or even a lifetime penalty on parts B and D premiums. 

You’ll first want to check the rules surrounding your Medicare eligibility with your employee health insurance provider. Next, you should contact a Medicare navigator like Boomer Benefits. 

Should IM roll over her 401K to a Roth if she is worried about financial protections?

IM writes in with a question about rolling over a 401K to a Roth IRA. She is worried about losing ERISA coverage when transitioning this money. ERISA stands for the Employee Retirement Security Income Act which was put in place to protect workers’ retirement plans. 401Ks are covered under this federal law; however, the protections for IRAs vary wildly from state to state. 

The first thing to do when considering this question is to check on the rules governing Roth IRA protections in your state. Next, you’ll want to evaluate your personal financial risk and how important this kind of coverage is to you. 

Make sure to scroll down to the bottom of the show notes to check out all the links to the resources mentioned in this episode.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

LISTENER QUESTIONS

• [4:41] Which pension choice best suits Susan’s needs?
• [13:40] A question about HSAs after age 65
• [17:23] Do the risks associated with Roth IRAs outweigh the benefits?
• [22:12] Daniel has a few Roth conversion questions
• [30:22] Daniel has a few HSA questions

Resources Mentioned In This Episode

YouTube episode with Andy Panko on retirement tax bombs

Boomer Benefits

BOOK - Retirement Planning Guidebook by Wade Pfau

Interview with Wade Pfau

The Retirement and IRA Show

NeuYear.net

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Are you worried that you won’t be able to live the life of your dreams in retirement? This is one of the main issues facing many people on the cusp of retirement. That’s why I created the Retirement Answer Man Show. I want to help you find the confidence to truly rock retirement.

One way that you can become more confident in your retirement plan is by utilizing the tax planning tools that are available to you. Andy Panko from Tenon Financial is here to help you identify all the tools available in your tax toolbox. Press play to open up your tax toolbox and see what is inside.

Opening your tax toolbox 

Before you can pick up a tool from the tax toolbox you must start with a broad understanding of your tax situation both now and in the future. This means that you’ll have to do some educated guessing to figure out what your future tax situation will be.

Projecting your tax situation out 10 or 20 years down the road won’t be an exact science, so don’t try to make it so. More accuracy doesn’t mean more precision in future tax planning; there are too many factors at play.

Simply because your tax situation won’t be exactly the way that you estimate it to be doesn’t mean that you shouldn’t take the time to map it out. You must take this step to get the framework you need to make educated decisions. This framework will be your basis for making practical decisions.

4 useful tools in your tax planning toolbox

1. Fill up your tax brackets. If you retire before you start taking Social Security you may find yourself in an unusual situation. You may not have any income and therefore you won’t have a tax bill! Rather than marveling at this newfound freedom from the taxman, you may actually want to realize enough income to stay within the 12% tax bracket. By paying a bit in taxes now you could be utilizing an opportunity to lower your lifetime tax bill. Remember that those tax-deferred accounts are sitting there waiting for you to pay taxes on them when you reach age 72. 
2. Do Roth conversions. While you’re filling up the lower tax brackets you can convert your tax-deferred assets to Roth. The money will continue to grow, but you’ll be able to rest easy knowing that the taxes have already been paid. By performing Roth conversions you'll ensure that you won’t have all of your assets in tax-deferred accounts waiting for your RMDs. By converting some of your assets into Roth you’ll provide yourself with more flexibility, control, and optionality. 
3. Tax-loss and gains harvesting. Tax-loss and gain harvesting is a little-utilized tool that applies to brokerage accounts when you sell a position and realize a gain or a loss. You can use these gains and losses strategically to optimize your tax situation. Listen in to hear how this tool could work for you. 
4. Qualified charitable donation. If you are charitably minded QCDs are a great way to give to your favorite charity and save money on taxes at the same time. The trick with QCDs is that they must transfer directly from the IRA custodian to the charity. 

In retirement, tax planning isn’t the same as in your working years. You need to plan ahead so that you can optimize your lifetime tax bill.

Next week you’ll learn how to incorporate all of these tools into your retirement plan so that you can avoid those tax bombs. Don’t miss that episode so that you can build a retirement plan that will give you the confidence to rock retirement. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [1:30] Financial planning should be a collaborative process
• [7:25] Opening your tax toolbox 
• [13:29] Filling up your tax brackets should be your first tool
• [21:44] Roth conversions
• [29:39] Tax-loss and gains harvesting
• [39:36] Qualified charitable donation

TODAY’S SMART SPRINT SEGMENT

• [42:03] Map out your future income and build a net worth statement

Resources Mentioned In This Episode

Tenon Financial

Jordan Peterson

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Do you feel like you are late to the ball game in saving for retirement? Have you ever wondered if an annuity could take some of the stress out of writing your own retirement paycheck? Are you trying to figure out the best way to self-fund long-term care for you or your spouse? 

All of these questions come directly from listeners like you. If you have questions about retirement, Fridays are a great time to tune in. We are now releasing 2 episodes a week: one focused on the monthly theme and the other focused on listener questions. 

If you have a query of your own question head on over to RogerWhitney.com/AskRoger to submit your retirement questions. 

How to maximize retirement savings after getting a late start

Catherine writes that this podcast has helped her get over the shame and frustration of not prioritizing her retirement savings earlier. Now that she has worked her way through those feelings she wonders what the best way to increase her retirement savings would be after getting a late start.

Catherine is maxing out her 401K, and her husband has a simple IRA and no access to a 401K. However, if he could convince his partners to switch to a 401K he could max out the contributions and begin to expand their savings. 

Another way to get plenty of bang for your buck is to use an HSA. Many people don’t consider the HSA as a retirement account, but it can be a great way to help play catch up. You can contribute up to $7200 per year to your health savings account if you are enrolled in a high deductible insurance plan. Not only do you get to use pre-tax assets, but you can invest those assets to use in retirement. If you invest your HSA aggressively, it can become like a supercharged Roth IRA.

Would an immediate annuity be a good idea for Mary?

Mary is considering purchasing an immediate annuity with the proceeds from the sale of her house. She would like to receive between $1000-2000 per month from the $300,000 profit.

A single premium immediate annuity (SPIA) could provide this kind of stable return, but before she jumps into such an arrangement she should consider the pros and cons of this type of annuity.

The pros and cons of purchasing a SPIA

One of the main reasons that people consider purchasing an annuity is their ease. With the SPIA Mary won’t have to manage her investments or worry about the markets. She’ll be receiving a guaranteed income for the rest of her life. There is definitely an advantage to this kind of simplicity. 

On the other hand, if she passes away shortly after purchasing the annuity then the money will not be hers to pass on to her heirs. By giving up her $300,000 and committing to an annuity she loses out on optionality. One way to combat this would be to make sure to have liquid assets on hand in case of an unforeseen event.

Press play to hear my thoughts on purchasing an annuity and to learn how to self-fund for long-term care.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

LISTENER QUESTIONS

• [2:57] Getting over the regret of not saving better sooner
• [10:06] Tom wonders if there will ever be an audiobook version of Rock Retirement
• [11:46] Would an immediate annuity be a good idea?
• [17:34] How to best self-fund for long-term care

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Have you been incorporating tax management into your retirement plan? If you have, you won’t want to miss this series, and if you haven’t, you definitely won’t want to miss this series. 

Last week we set the stage for this retirement tax planning series when we discussed how planning for taxes can work within your retirement plan. This week we’ll make you aware of the hidden tax bombs that could wreck your retirement plan. In next week’s episode, we’ll learn which tools you can use to defuse those tax bombs, and then in the last week of this series, we’ll learn how to integrate those tax tools into your retirement plan.

My goal is to give you an organized way to incorporate tax planning into your overall retirement plan which is why I have invited retirement tax expert Andy Panko from Tenon Financial to join me to discuss the nuances of retirement tax planning. If you are ready to learn about the hidden tax bombs that are awaiting you in retirement then press play now. 

Required minimum distributions, the tax bomb that begets other tax bombs

When you contribute your taxable income into a 401K, 403B, or other tax-deferred accounts your taxable income is reduced in the year that you make that contribution. However, many people forget that they are simply deferring that taxable income until later. Remember that taxes are never a question of if you will pay them, it's always a matter of when. Required minimum distributions (RMDs) are the government’s way of insisting that you pay the piper. 

RMDs begin at age 72 and at that time you must take 3.9% out of your tax-deferred accounts at this time. The percentage that you must take from these tax-deferred accounts grows each year.

The best way to defuse this bomb is to project the total that your tax-deferred accounts will grow to so that you can get a feeling of how much you will need to withdraw when the time comes. 

Yes, Social Security can be taxed!

Did you know that Social Security is taxable? It has been since 1984 and up to 85% of your Social Security benefit can be taxed. Just how much is taxable depends on your other sources of income. The more gross income you have, the bigger percentage of your Social Security benefit will be taxed. If you are curious about the percentage of your Social Security income that could be taxed then make sure that you are signed up for the 6-Shot Saturday newsletter. 

Do ACA subsidies fit into your retirement plan?

If you are in need of health care before the age of 65 you may want to use Healthcare.gov. The way the marketplace works is by using a tax subsidy system. If a person makes between 1-4 times the poverty level ($17,000) then they can qualify for tax subsidies on a sliding scale.

If you can keep your income below the threshold, then you could qualify for the ACA tax credits. Keeping your income low needs to be balanced with the rest of your retirement goals which is why it is important to have a retirement plan of record. 

There are several more tax bombs out there ticking away. To learn what they are you’ll have to press play to listen.

If your interest in retirement tax planning has been piqued by this series and you want to learn more, check out Andy’s Taxes in Retirement Facebook group. With over 16,000 members, this group is a great way to exchange ideas with others who are on the same journey. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [2:50] RMDs are the first tax bombs
• [11:30] Social Security is the next tax bomb
• [15:46] Will Social Security go broke?
• [21:41] Taking advantage of the ACA subsidies
• [31:00] When you need to watch out for IRMAA
• [37:50] Do you need to be careful of NIIT?
• [38:55] A change in marital status could surprise you

TODAY’S SMART SPRINT SEGMENT

• [44:29] Understand the important numbers sheet in the 6-Shot Saturday email

Resources Mentioned In This Episode

Tenon Financial

Andy’s Taxes in Retirement Facebook group

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Are you a bit behind on your retirement savings and wondering how you’ll ever be able to retire? One of our listeners feels the same way. In this Listener Questions episode, I’ll answer his question as well as how to handle net unrealized appreciation (NUA), how to shift retirement savings after a job loss, and we’ll wrap it up by discussing the ramifications of taking Social Security early.

We’re trying a new format this month and releasing 2 episodes a week. On Tuesdays, we’ll release the main segment which focuses on the theme of the month, and on Fridays, you’ll hear listener the questions. Make sure to check out all the episodes and let us know if you like the new structure.

Change is hard!

October has been a month full of change for me and change doesn’t always go smoothly. Not only am I publishing 2 episodes per week, but I’ve stopped drinking alcohol and started exercising in the mornings rather than in the afternoons. 

Any time you bring about changes to the rhythm of your life it can be a challenge. This is why the transition into retirement can bring such trepidation. Even if something new seems daunting, with practice over time the situation will improve. The more you practice the bigger your muscles will get.

With a bit of research, planning, and action, you can learn how to create a paycheck for yourself in retirement, how to tackle your taxes, and how to navigate the healthcare system. Listening to retirement podcasts like this one is a great way to get started. 

How to go from zero to retired

Not everyone has a 7 figure retirement portfolio, in fact the majority of the population finds themselves wondering how they’ll ever be able to stop working. One listener asks how he’s supposed to be able to catch up on retirement savings at age 50. 

The first thing you need to do if you feel behind in your retirement savings is to acknowledge and accept where you are. The next thing you need to understand is that there is only so much catching up that you can do at this point. 

Social Security will be a large part of your retirement equation

After you realize that there is only so much you can do it is time to figure out how to maximize your Social Security benefit. There are a couple of ways that you can do this. The first one is to work longer so that you can increase your benefit. 

The next idea is to navigate when would be the best time for you to file for your Social Security benefit. If you take it early at age 62 you may see your benefit decreased by 30%. Waiting until the full retirement age at 66 or 67 will ensure that you get your full benefit amount, and each year that you wait to file your benefit will increase by 8%. The beauty of Social Security is that it is adjusted each year for inflation and it lasts for the rest of your life.

Retirement is about living out the best version of yourself

To create a retirement plan you can live with, you’ll want to increase your income and decrease your monthly obligations as soon as possible. Identify which bills you can pay off and try using the debt snowball method to pay down your debts. The less you can live on the more prepared for retirement you will be. Try to create a living environment that doesn’t require a lot of money. 

Remember that rocking retirement isn’t about spending loads of money, it’s about creating an environment where you can live the best version of yourself. 

If you have a question to ask head on over to RogerWhitney.com/AskRoger to send a written question or leave a voice message. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

• [5:00] How to go from zero to retired in 10 years
• [12:08] How to handle net unrealized appreciation (NUA)
• [20:23] How to shift retirement savings after a job loss
• [25:25] The ramifications of taking Social Security early

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Tax planning in retirement isn’t the same as in your working years. This is why we are dedicating an entire series to helping you understand how to manage your taxes in retirement. To help me navigate this complicated topic, I’ve invited retirement tax expert Andy Panko to join me for the whole month-long program. Over the course of this series, you’ll learn why tax planning is important in retirement, which tax land mines to look out for, what tools to include in your tax toolbox, and how to integrate tax planning into your retirement plan. Are you ready to dive deep into retirement tax planning? Press play now to learn why tax planning in retirement is so important.

How does tax planning change in retirement?

In your working years, tax planning isn’t that complicated. Since your income is based on your wages, you don’t have much control over your tax bracket. However, in retirement, you can control your tax bracket from year to year.

Chances are, you have been contributing to tax-deferred accounts like 401K, 403B, or IRAs for much of your life. These have been wonderful vehicles for retirement savings that has allowed you to defer a bit of your taxable income. Now that you are coming to retirement age, it is time to pay the tax man. These retirement distributions will be taxed, but when you decide to take them is up to you--up to a certain point.

Use long-term tax planning to save money in retirement

In retirement, there are multiple tax planning opportunities that you can take if you plan for the long term. Since you have more control over your sources of income, you have a tax advantage that you didn’t have in your working years. This can make planning complicated and challenging; however, with a bit of research and practice you could end up saving thousands of dollars over the course of your retirement.

Taxes aren’t the only thing to consider in retirement

Don’t let the tax tail wag the dog. Even though it is important to consider your taxes in retirement it is also important to remember that taxes are not the end all be all of retirement planning. What Andy and I are trying to do is to help you build a framework so that you can consider your tax planning in an organized way. When you come up with a strategy to guide your decisions it will help make the complicated world of tax planning a bit easier to digest. 

Check out this episode on YouTube

Did you know that we are now recording the Retirement Answer Man as a biweekly show? Make sure to check back in on Friday mornings to hear the Q&A part of the show. You can also watch this episode in a video format on YouTube so that you can see the charts and tables that we share. When you are done listening head on over to RogerWhitney.com and scroll down to the bottom of the homepage to sign up for the 6-Shot Saturday newsletter so that you can receive the worksheets mentioned in this episode

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [2:33] What are the changes in taxes in retirement?
• [7:00] Think long-term when tax planning in retirement
• [11:36] Taxes are important but not the end all be all
• [17:17] Trying to understand the tax system

TODAY’S SMART SPRINT SEGMENT

• [28:26] Pull out your tax return to find your AGI

Resources Mentioned In This Episode

Tenon Financial 

Andy’s Taxes in Retirement Facebook Group

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

If you are the non-planning type, it can be easy to worry about whether your retirement plan is on track. How are you supposed to know what is going on and whether you should have the confidence to know if your plan is working?

On this episode of Retirement Answer Man, you’ll learn 5 things that you can check periodically to give you an idea if your retirement plan is on the right track. If you are wondering how to investigate whether or not your retirement plan is on track, then make sure to listen to this episode to learn what you need to know. 

Where does confidence come from?

The whole point of retirement planning is to give you the confidence to live life in your retirement without worry. Before you create your retirement plan you need to understand what it is that will give you confidence in that plan. 

Confidence comes from understanding. To understand your plan you need to first set your goals. What is your vision? Once you have a vision of your ideal retirement then you can deconstruct that vision to map out your journey. That journey will take you from the current version of yourself to the future you. To map your journey you need to have clear action items to lead you along each step of the way. 

There is no need to look around at others on their journey since each one is personal. Your retirement journey is yours alone. 

5 things you should track to feel confident in your retirement plan

1. Have your goals changed? Assess your goals with your significant other or advisor to make sure they still reflect what you really want. Are you still aiming for the same target? Is this still the life you want to build or has anything changed? 
2. Check in with your spending. How is your current spending relevant to your overall plan? Track your spending goals to see if they are still relevant. At the end of each year look back at what you actually spent your money on. You’ll want to make sure to track how you did relative to your plan. Sometimes you may deviate from the plan a bit, but by tracking you can identify trends over the long term. Tracking can help you to tease out opportunities and risks
3. Is your plan still feasible? Should you make a change? Big expenditures can pop up, the market could go down, expenses could go up: all of these things could change your plan’s feasibility. One way to check to see if your plan is still feasible is to track your withdrawal ratio. This is the percentage of your assets that you take out of your portfolio each year. Tracking your withdrawal ratio can help you recognize whether your retirement plan is sustainable. Listen in to learn what else you should consider to ensure that your plan will actually work.
4. Make sure your retirement plan is sustainable. Is it resilient? Do you have enough financial nutrients in the near term, midterm, and long term? Check out last week’s episode to hear more about how to plan for the short-term, mid-term, and long-term in retirement. 
5. Focus on the WHAAM. Think about what you should do next. Then figure out how to do it, get accountability, take action, and finally, achieve momentum. In your retirement planning, think about how you can shift your focus to best serve yourself.

If you want to ensure that you will rock retirement, then continually check in with these 5 areas.

Are you ready for more Retirement Answer Man?

For the past 7 years without fail, we have brought the Retirement Answer Man to your earbuds on a weekly basis. That is about to change.

Starting in October we will be splitting the podcast into two separate parts released on two different days. Coming on Tuesdays you’ll hear the Q&A part of the show. On Fridays, we’ll focus on the monthly theme. 

This split will allow us to dive a bit deeper into our monthly topics and answer more of your questions. It will also allow you to decide to listen to what you want to hear. We value your feedback, so please let us know what you think of this new setup. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [6:25] A triathlon story to illustrate how humans overcomplicate things
• [14:40] Where does confidence come from?
• [16:13] 5 things you should track to feel confident in your retirement plan

LISTENER QUESTIONS

• [27:00] How does Josh designate pretax and post-tax contributions when they are commingled
• [33:26] How to understand the options to deal with precious metals

COACHES CORNER WITH BW

• [37:31] What do people need to know about retirement planning the non-financial side of retirement?
• [39:26] How will you spend your days in retirement?

TODAY’S SMART SPRINT SEGMENT

• [43:34] Get answers to the 5 things we covered

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

As the non-planner of your family, you may not be interested in all the nitty-gritty details of retirement investments, but it is important to know the basics. That’s why today we will cover the main concepts about investing your assets. Hopefully, my nutrition analogy will help make these financial concepts more understandable. Press play to hear what you need to know about investment basics for the non-planner. 

Investing in retirement is all about solving for risk

Last week you learned how inflation and market volatility are the two risks to overcome when investing in retirement. Solving for these risks are the most important part of creating a retirement portfolio. 

To explain retirement investing, I like to think of nutrition. When you eat you solve the problem of being hungry now, but you also solve the problem of getting nutrients to your body to help ensure that you stay healthy in the future. Investing also serves to help you in the short and long-term.

How are you nourishing your investments in the short-term and the long-term?

With every meal you eat you are investing in your short-term energy. The vitamins and minerals that you may take help you invest in your long-term health. We keep enough cash and bonds on hand to sustain ourselves for the next 1-5 years and protect from market risk. 

Stocks and real estate investments can have ups and downs which can be scary in the short term but in the long-term they help to hedge against inflation. 

Ask your financial planning partner how you are nourishing your investments in the short-term and the long-term.

The building blocks of investment

It is important to learn the building blocks of retirement investing. Building a retirement portfolio is much like building a meal. There is the salad, the main course, and the dessert. Short-term investments are the funds that you plan to use within 1-5 years, mid-term investments will be used within 5-10 years, and long-term investments are funds that you don’t plan to use for more than ten years. Listen in to learn how these different investments are like building a meal.

Be sure to join us in October for the Taxes in Retirement series

Make sure to join us next month as we dive into taxes in retirement. We have certainly covered this topic before, but a lot has changed since the last time we discussed taxes. We’ll explore proposed tax law changes and discuss how that could affect you and your retirement. 

Andy Panko from the Taxes in Retirement Facebook Group will join me over the course of the entire series. If you are really looking to nerd out on taxes, then don’t miss the episode with Wade Pfau who joins me to discuss his tax management academic research. If you are a part of the RRC you’ll get the added benefit of having both of these guests in the Clubhouse for meetups. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [3:30] An investment analogy
• [10:04] How to invest for the short and long-term
• [18:25] The building blocks of investment

Q&A WITH NICHOLE

• [22:51] What are some solutions to the Social Security funding problem
• [29:19] The Rock Retirement book has been helpful to Steven
• [33:32] Why I haven’t covered the sale of a business to fund retirement
• [35:25] Will Jim’s retirement strategy work?

TODAY’S SMART SPRINT SEGMENT

• [40:24] Think about how you will pay for life in the short-term, mid-term, and long-term

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Are you the person in your family that stays away from financial planning? Do numbers and financial jargon put you to sleep? If so, this is the right retirement planning series for you. This episode is the third in the Retirement Planning for Non-Planners series. In this series, I explain what you need to know without all the financial lingo so that you can understand the most important aspects of retirement planning. 

In this episode, Fritz Gilbert from The Retirement Manifesto blog joins me to discuss the basics of retirement planning risks. Listen in so that you can understand what to look out for in retirement planning.

This is a financial jargon-free series

If you aren’t interested in finance it can be difficult to discuss retirement planning with someone who is. They start throwing terms like RMD, sequence of returns risk, and the 4% rule. When people start using these terms it can be easy to become overwhelmed. The purpose of this series is to empower you so that you can have an understanding of what is happening with your money to help make better choices. My goal is to explain retirement planning in a non-geeky way that anyone can understand.

What are the financial risks in retirement?

Retirement brings different types of risks for your money. Essentially there are two types of risks to be aware of: short-term and long-term risks.

Think about a teeter-totter. On either side of the teeter-totter, you have your short-term risk and your long-term risk. The short-term risk is losing money today and the long-term risk is losing money in the future. You need to come up with a solution that balances both of these risks without tilting too much to one side. 

We lose money in the short term through market risk. If the market takes a tumble, you could lose a significant portion of your savings. The solution to that is to take all of your money out of investments and have it sit in cash. Unfortunately, this solution to the short-term risk doesn’t work in the long term. 

The long-term financial risk is inflation. You may have noticed gas prices or food prices increasing over time. This means that your dollar today won’t be worth the same as your future dollar. As prices increase the value of your money decreases. We combat long-term inflation risk with investing, however, this solution puts us at risk in the short term. 

How to balance retirement risk

To balance both sides of the risk spectrum it is important to think about how much money you will need to support your lifestyle in the near future. You’ll want to consider how much cash you should have on hand if the market drops. This will help you mitigate the short-term risk while at the same time leaving the rest of your savings to grow in the long term. The goal of balancing these risks is to have the confidence to have money to spend next year and also to spend when you are 80.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT WITH FRITZ GILBERT

• [2:30] Financial lingo can be intimidating
• [6:37] Short term risks
• [10:47] Inflation is a long term risk
• [18:37] How to deal with spending shocks
• [25:55] Understand what types of questions to ask
• [28:39] Catching up with Fritz in retirement

LISTENER QUESTIONS WITH NICHOLE

• [38:24] 6-Shot Saturday drama
• [42:15] Should Shari take the lump sum or an annuity?
• [48:20] How do I feel about LIRPs?
• [54:36] What are the non-financial boundaries of a fiduciary?
• [1:00:24] A question about my pronunciation of words
• [1:02:47] A proposal for changing the GAA acronym

TODAY’S SMART SPRINT SEGMENT

• [1:04:34] Organize the strategy that best works for you

Resources Mentioned In This Episode

Retirement Manifesto

Retirement Planning for Non-Planners - start with this first episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

When you hear financial lingo do you immediately begin to tune out? Does retirement planning make you nervous? If so, this is the right series for you. You’re listening to a 5-part series on retirement planning specifically designed for non-planners. 

The goal of this series is to educate you on retirement planning without all of the confusing lingo. We’re going to keep it simple and focus on teaching you the most important aspects of retirement planning. If you haven’t listened to episode 393, go back and check it out so that you can understand how to begin planning for retirement. 

You only need to focus on the important aspects of retirement planning

There are many retirement planning geeks out there that love to focus on the economy, markets, and business cycles. They relish mapping out different Roth conversion scenarios to reduce their RMDs. But if you aren’t a planning geek, talking to those people can make retirement planning seem overwhelming. 

You’ll be happy to learn that to successfully plan for retirement you don’t need to have a degree in economics, you just need to make sure that you focus on the most important things. That is what we are doing here today. I’m here to help you understand what the most important aspects of retirement planning are. 

Can your retirement dreams come true?

During the previous episode, you created a vision of your ideal retirement. Now it’s time to see if you can make your retirement dreams a reality. The biggest question everyone has in retirement planning is will I run out of money? 

The answer is, no one knows. The economy, life’s surprises, and people’s perpetual habit of changing their minds make it impossible to be sure. There are too many unknowns to be certain about the future. However, it is okay to have that uncertainty. 

If you can get a good approximation of a retirement plan then you can make adaptations to your plan as life unfolds. I use agile retirement management to help my clients make adjustments to their retirement plan when life shocks or bad markets disrupt their plan. 

Where will your retirement income come from?

When planning your retirement you’ll want to consider the income you will receive from Social Security, pensions, or even part-time work. The rest of your retirement income will need to be covered by your retirement savings. 

There are many software tools that can help you plan your retirement. It is important to use a retirement calculator to estimate how much money you will need to live out your retirement dreams. In the Rock Retirement Club, we use the New Retirement Plus Calculator. A retirement calculator can give you a long-term projection of your retirement income needs. 

Have your first 5 years of retirement income readily available

While retirement planning software can help you plan out the long-term, you’ll want to understand where your money is coming from in the near term. You should have the next 5 years of spending readily available in accounts that aren’t exposed to the winds of the economy like money market accounts or CDs. 

Listen in to learn what the most important aspects of retirement planning are so that you don’t get worried about getting caught up in the small details that don’t matter as much. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

PRACTICAL PLANNING SEGMENT

• [3:51] Can you safely pay for your dream retirement?
• [6:55] Where will your retirement income come from?
• [13:45] Recheck your retirement compass periodically

LISTENER QUESTIONS

• [19:31] Does it make sense to make after-tax 401K contributions?
• [23:14] How to estimate MAGI for an IRMAA appeal?
• [28:12] Can you start Social Security benefits from one spouse early and then wait for the other spouse’s benefit?
• [29:35] Should I open a non-retirement account?

TODAY’S SMART SPRINT SEGMENT

• [33:45] Understand the resources you have available to use in retirement

Resources Mentioned In This Episode

NewRetirement.com

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Do your eyes glaze over when your significant other starts talking about money? Or maybe you are single and you know that retirement is coming soon, but you simply can’t get motivated to plan it out? Or perhaps you are the planner of the family and you would like your partner to take an interest in what lies ahead in retirement? If so, then this is the series for you!

Those of us who are into retirement planning can quickly overcomplicate things, but to someone that is new to all this or not really into this planning stuff, retirement planning can be overwhelming. In this Retirement Planning for Non-Planners series, I will introduce you to retirement planning in a lingo-free way that won’t put you to sleep. 

The objective of the Retirement Planning for Non-Planners series

My goal for this series is to give you the power to participate in the retirement planning process. If you are planning your retirement on your own I want you to understand what you need to take care of and understand the basics without becoming overwhelmed. You’ll learn the fundamentals and be able to discuss retirement planning in an educated way. Are you ready to get started? Press play now!

What do you envision yourself doing after your working life?

What do you want for your life after work? Have you thought about this question? This is actually one of the most difficult questions to answer, but it is also the basis for retirement planning.

It can be challenging to consider your life after work. There are so many options to consider and you are starting with a clean slate. Many of us treat this question the way we chose a major in college or our first job. But you don’t have to take this so seriously. Your life will not be ruined if you don’t get this question right. Since we use an agile approach to retirement planning, if you want to switch gears you can. Consider your future life after your working years. What can you imagine?

The retirement fundamentals

Once you know what you want to do in retirement, the next question is can you afford it?

After you discover whether you can afford your dream life then you need to learn how to pay for it. You’ll want to find out how you actually create a retirement paycheck. The last question we’ll consider is how to gain the confidence to make it all work. You must have confidence in your plan to rock retirement. 

Over the course of this series, we’ll be taking a look at these questions so that you can build a retirement plan that works for you. 

Set your retirement goals

To prepare for your retirement you’ll need to forecast your spending. To do so, can create different levels of spending. Your must-haves are things like housing, electricity, water, gas, and food. These barebones expenses are nonnegotiables.

In the next category, put the things you would like to do in retirement. Maybe you would like to play golf once a week, travel once a year, or eat out a few times a month.

The last level is your unspoken dreams that you like to think about but you may have never written down. This is your opportunity to think big.

You’ll want to group these different types of spending so that you can have an idea of how much money each type of retirement would need. 

Listen in to hear why this type of exercise is so important in your retirement planning. You won’t want to live a life of regret thinking about what you might have been able to do had you thought bigger when planning your retirement. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

• [2:55] What are the fundamentals of retirement planning?

PRACTICAL PLANNING SEGMENT

• [5:49] What do you want?
• [8:34] Setting retirement goals
• [13:45] Don’t let someone else dictate your life
• [18:51] What will you do every day in retirement?

LISTENER QUESTIONS

• [22:29] When to apply for Social Security
• [23:32] How to reduce the effect of inflation in your 5-year income floor
• [27:48] How to get started early in retirement planning and saving
• [34:30] My own plans for retirement

TODAY’S SMART SPRINT SEGMENT

• [39:48] Think about your must-haves, like-to-haves, and cool-to-haves

Resources Mentioned In This Episode

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

You may notice that this is an extra episode this month. I wanted to make sure that we mark a special ending to the August Women, Money, and Retirement series, so at the beginning of the month I reached out to some amazing female financial professionals. I asked them all for a piece of financial wisdom to share with other women. You can hear their fantastic insight by pressing play now. 

Cristina Guglielmetti’s words of wisdom

Cristina Guglielmettti from Future Perfect Planning offers suggestions about making 401K contributions. She recommends that you update your contributions regularly, especially if your salary has increased. 

Set a goal for yourself. How much would you like to save each year? Are you reaching that goal?

If your goal contribution is more than your current contribution then changing it immediately could eat into your take-home pay and disrupt your budget. Instead of trying to achieve your goal contribution all at once, try increasing your contribution rate a little at a time. 

Then set a reminder for yourself to increase your contribution quarterly until you reach your target percentage. This way you won’t feel the decrease in take-home pay all at once. 

Small, repeatable changes are easier to keep up with which makes it easier to maintain your financial plan. Listen in to hear what else you can do to increase your retirement savings. 

Jane Mepham shares financial advice passed down from her mother

Jane Mepham from Elgon Financial Planning grew up in a different country in a male-dominated society which meant that she had to learn a lot to get ahead in life. When she was young, her mother shared financial advice that she uses even to this day. She knows that attitude is the key to mastering money and it will determine the strategies and tactics that you will use to plan your retirement. Enjoy these words of wisdom from her mother. 

1. Make sure you can support yourself financially. You don’t ever want to have to rely on someone else to support you. 
2. Don’t eat your future today, however enticing it is. Regardless of how tight your budget is, prioritize saving for the future. 
3. If something affects you on a daily basis it is important. You need to know enough about it to make independent, smart decisions. 

The way you spend your money should align with your values

Stephanie Sammons from Sammons Financial and Stephanie McCullough from Sofia Financial have similar advice. They want you to identify what is most important to you. They both stress that you need to define your values so that you can align your spending to reflect what you value the most. All your money decisions should be in alignment with your values and your life. 

Many people often separate their financial decisions from the rest of their life, however, money is connected to everything we do. By aligning your financial life with the rest of your life you will give meaning to your money. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WORDS OF FINANCIAL WISDOM FROM THE EXPERTS

• [1:20] Cristina’s recommendation
• [3:13] Jane Mepham’s words of advice
• [6:25] Stephanie Sammon’s proactive step to improve your financial life
• [9:26] Stephanie McCullough 

Resources Mentioned In This Episode

BOOK - How to Be Here by Rob Bell 

Retirement Money Gal podcast

Take Back Retirement podcast

Sofia Financial - Stephanie McCullough

Sammons Financial - Stephanie Sammons

Elgon Financial Planning - Jane Mepham

Future Perfect Planning - Cristina Guglielmetti

Rock Retirement Club

We have given the entire month of August to the ladies! Since this is the last Wednesday in August, it is the last episode that we are dedicating to the theme of Women, Money, and Retirement. However, that doesn’t mean we’re going to stop taking questions from women. This is simply the last episode to focus solely on women’s questions. We want to ensure that no matter who you are, you have the confidence to rock retirement. 

Make sure to come back next month for the series, Retirement Planning for Non-Planners. This series will speak to those who have little interest in retirement. That means we’ll take out all the jargon and focus on the basics of what you need to know. Even if you don’t want to dive into the day-to-day details, it’s important to have an understanding of how to build a retirement plan. If you have any questions related to this theme please ask them at RogerWhitney.com/AskRoger. 

What does it mean to put the “I” in retirement?

We’re closing out this month with an episode titled, How Do I Put the I in Retirement? But what does the I in retirement really mean? 

Over the course of the retirement planning process, most people focus on their financial situation, but it is more important to understand what you want to do in retirement.

When planning your retirement, you are planning the next stage of your life and you have the opportunity to remake yourself to be anything you want. This is a fantastic time to uncover your deepest desires and make your voice heard. 

Live a life true to yourself

The most common regret that people have at the end of their lives is that they wish they had lived a life true to themselves. Many people simply do what is expected of them without ever thinking about what they want for themselves. 

Retirement is a fantastic time to set aside what others expect of you and explore what you genuinely want to do. 

Since the human condition tends to work in moderation, sometimes you have to peel away the layers to get to the bottom of what you want. Don’t stuff down your needs, dig deep to discover your true self.

Have you lived a life true to yourself or do you have a hard time voicing your desires? 

How to define what you really want

Peeling back the layers can be a challenge, but to live a life true to yourself you’ll have to define what you want out of life. If you don’t voice your desires you’ll never be able to achieve your dreams. 

Think about what you have always wanted to do that you haven’t had the time or space to think about. If you don’t have a clear vision yet, that’s okay, take the time to consider this question with wide-eyed curiosity. Retirement is a time of experimentation, so if you haven't completely defined what you want you’ll soon have an opportunity to further explore your desires. 

If you have a partner, explore this question with them in little conversations over time. Those little conversations can lead to big ideas and create the space to open up a world that you might not have dreamed of before. 

Once you have dreamed up your ideal retirement then you can see how your financial situation fits. You don’t want to go at this from a different perspective. First dream big, then work your retirement plan around your dreams. 

Why join the Rock Retirement Club?

The Rock Retirement Club has everything you need to create your retirement plan. When you join the club, you’ll gain access to education and tools to help you build your own plan. 

Not only that, the club gives you access to a team of professionals that are dedicated to helping you rock retirement. 

Last, but certainly not least, you’ll become part of an amazing community. The RRC is filled with a community of like-minded people who all want to rock retirement. When walking through a huge life change it helps to connect with those who are a bit ahead of you on the same journey. Come check out what the Rock Retirement Club is all about. 

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

WHAT DOES THAT MEAN?

• [5:40] What does the I in retirement mean?
• [13:15] You have to speak up and voice what you want

LISTENER QUESTIONS WITH TANYA

• [19:20] What should you be doing within 6 months of retirement?
• [20:55] Making decisions immediately after the loss of a spouse
• [22:52] How to balance the load of caregiving
• [28:14] How to divvy up parental support between siblings
• [33:22] How to bring up retirement planning without the jargon
• [35:13] How to deal with an unexpected divorce in retirement

TODAY’S SMART SPRINT SEGMENT

• [43:35] How will you put the “I” in retirement?

Resources Mentioned In This Episode

Thinking Ahead Roadmap

BOOK - Moving Forward on Your Own by Kathleen Rehl

BOOKS - Suddenly Single

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center

Women ask many types of questions that men don't, which is why we’re dedicating this entire month to a series on women, money, and retirement. This series gives you the space to dig in, have your voice heard, and your questions answered. 

You’re listening to the 3rd episode in this series and today we’ll be answering so many of your questions. Tanya Nichols from Align Financial joins me once again to add her womanly input and expertise. 

There are a lot of women out there with similar concerns. Are you one of them? Find out if your burning questions about retirement have been answered on this episode of Retirement Answer Man.

The Rock Retirement Club can help you build confidence in your retirement plan

Are you looking for a way to build your confidence in your retirement plan, or maybe you're just looking for ways to create a retirement plan. If so, the Rock Retirement Club is the right place for you. 

The RRC provides you with everything you need to educate yourself to build your retirement plan, allowing you to rest easy. By joining the RRC you’ll have access to on-demand courses, education, and tools so that you can learn what you need to know to rock retirement. 

Join now to gain access to this information and our knowledgeable team of experts. In the clubhouse, you can ask questions from our experts and enjoy conversations with hundreds of more people who are riding the same retirement wave. The Rock Retirement Club is a great place to share inspiration and get ideas to create the retirement of your dreams. 

Should single women with no children consider long-term care insurance?

Several women have asked about long-term care insurance. Navigating long-term care is a major concern for women that have no close family or children. They see long-term care insurance as a way to help pay for their care when they may no longer have the capacity to represent themselves. 

When looking for a long-term care insurance plan, be sure to specifically look for a plan that features a care navigator. Another possibility is to hire a care navigator out of pocket who only works for your interests. This representative can help you navigate the system so that you know that you will be cared for. 

Long-term care navigators are an emerging field, so it can be hard to find someone that specializes in this industry. One way to find this type of representative is to talk to long-term care providers or even your state health department. Have you ever considered hiring a care navigator for your declining years?

What kind of questions do you have about retirement? 

In this episode, we answer many of your listener questions like what is the difference between a trust and an estate, how to prepare to deal with financial issues during cognitive decline, where to get cash from during the go-go years, the best way to navigate healthcare before Medicare, and many more. Listen in to hear if your pressing questions have been answered.

If you have any more questions that weren’t answered in this episode, make sure to join the live meet-up on August 26 at 7 pm CDT. This live webinar will be about an hour long and I’ll be joined, once again, by the lovely Tanya Nichols. We’ll answer your questions live in real-time. These webinars provide a relaxed atmosphere where you can learn the answers to your questions and maybe even hear answers to questions that you haven’t even thought of yet.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN

LISTENER QUESTIONS WITH TANYA NICHOLS

• [5:30] Don’t miss the live meet up on August 26 at 7 pm CDT
• [6:37] Long term care insurance for those with no close family
• [11:00] Trust vs. estates
• [11:50] How to deal with financial issues during cognitive decline
• [16:11] Where to take cash from in the go-go years
• [19:02] How to navigate healthcare before Medicare
• [26:35] How do you calculate the 4% rule?
• [30:28] Spend less money than you make
• [32:07] What to look for in a bond

TODAY’S SMART SPRINT SEGMENT

• [37:22] An update on my smart sprint from last week
• [41:13] Look at your net worth statement history

Resources Mentioned In This Episode

Align Financial

Don’t miss the live meetup on August 26 at 7 pm sign up here

Rock Retirement Club

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Work with Roger

Roger’s Retirement Learning Center