July 23, 2025 • 11 mins
Hey, Mike. I'm 60 years old with 1,200,000.0 in a traditional IRA. Should I convert 120,000 each year so I don't have to worry about RMDs? Discover the trap set by trying to plan and invest like someone else. Listen as Mike breaks down the importance of building a plan and a portfolio that works for your specific situation.
Text your questions to 913-363-1234.
Request Your Wealth Analysis by going to www.retireontime.com
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Mike (00:05):
Welcome to How to Retire on Time, a show that answers
your retirement questions. Myname is Mike Decker. I'm a
licensed financial adviser andfiduciary. And joining me here,
Mr. David Franson.
David, thanks for being here.
David (00:15):
Yep. Happy to be here.
Mike (00:15):
As always, we're gonna answer your questions. Text them
to (913) 363-1234. And remember,this is just a show, not
financial advice, so make sureto do your research and
follow-up with whatever we talkabout. David, let's begin.
David (00:29):
Hey, Mike. I want to plan my retirement like the rich.
What do they do? That's a whole,like, group of people. Right?
Yeah. We have this fantasyabout, you know, quote unquote,
the rich. Right? I mean
Mike (00:40):
Yeah. So I wanna I wanna start by mentioning a book. I
won't say the title of the book,but it talks about what the
Rockefellers did. That mayactually be the title. I forget.
But the book was written to sellindexed universal life
insurance. Now indexed universallife insurance is an insurance
product, and it has a purpose.The purpose, as I'm defining it,
(01:02):
is that you need a death benefitand that you want some cash
flexibility, cash accumulationas a part of it, and maybe
there's some additional thingslike if you were to get sick,
there's some long term care helpor whatever it is. Like, that
that is insurance, though.You're paying fees for it.
Okay? What this book did wasthey took what the ultra wealthy
(01:22):
do, which as an oversimplifiedexplanation, is to lock up their
assets into an irrevocable trustthat they can't touch, so they
separate the tax burden fromthemselves, and then they borrow
against that trust that theycan't touch from a bank, because
if you borrow money tax free,you don't pay taxes on it, and
(01:42):
then whenever they pass, thetrust was set up to then resolve
the debts and things like that,and then pass to the next
generation. They're manipulatingthe estate tax laws and estate
planning laws and working withbanks who are willing to talk
with people with many, manymultiple millions of dollars. If
you have a $100,000, $500,000,even $2,000,000, you're not
(02:04):
going down that path. So that'sa trap.
The idea of I want to investlike the rich is well intended
because you think, well, whatdid they do that I'm not doing?
Well, what the rich did was oneof a couple of things. To get
rich, they either were born intoit, you can't replicate that.
They either took a significantamount of additional risk in
(02:28):
life, like starting a company.They worked extremely long
hours, and luck was on theirside, and they were able to be
industrious in starting abusiness or something like that.
Or maybe they won the lottery.Maybe that's something that's
not replicable.
David (02:42):
Or they're like really, really good at the the sport
that they play. Yeah.
Mike (02:45):
Yeah. Now that's the ultra wealthy. Yeah. And even sports,
should say, most of themsquander their money within five
to ten years. That'sunfortunate.
Very very few are like ShaqRight. Where he picked a boring
adviser, a boring CPA, and theymade boring decisions with
franchises and things that theylearned. Now the other side of
the wealthy, this isn't theultra wealthy. K? So if you've
(03:05):
got $1,015,000,000 dollars,$50,000,000, or more, you did
something where you increasedyour risk or you were born into
a situation that you can'treplicate.
So to compare that amount ofmoney and that lifestyle, it's
an apples to oranges situation.Now for those that are retiring
with one, two, five, or up to$10,000,000, those individuals
(03:28):
typically, this is what I'venoticed, they lived an extremely
simple life. They weren'tlavish. They worked really,
really hard in their careers.They developed a skill set that
was difficult to acquire.
So think of a very specializedengineer. Think of like a
neurosurgeon. Alright? I'm notsaying other doctors are less
than, I'm saying it's justreally tough to be a
(03:52):
neurosurgeon. Yeah.
I don't wanna compare that toany other medical profession
because they're all reallydifficult. But those professions
are very different, and theamount of time and effort and
work it took to get thatspecialized profession the high
school job I had was that theelectronics counter at Target.
That's what I did when I was 16years old. No training
necessary. Right?
(04:13):
I could just show up and justhang out. So the wealthy, there
is an element of discipline andcompetitiveness. Now that's not
to say that someone who doesn'thave a lot of money is not
disciplined. That's not true atall. There are many professions
that just don't pay as well, butyou enjoyed it, you're more
passionate about it, or it'syour specialty.
So let's let's first just havethis conversation of life is not
(04:34):
equal. It may be quote unquotefair, depending on your
definition, but it's not equalin the opportunities. It's not
equal in all of the pursuitsthat were going on in our life.
Some people are born withdifferent gifts than others.
Some people are more comfortablein certain industries than
others.
Okay? And I'm going to one pointhere. Based on the life that
(04:57):
you've been living will directlyreflect how you should continue
to maintain your life. If youhave a simpler life, you wanna
stick to simpler investments.That's not condescending.
That's not weird. It's just itmay be more appropriate to what
you're doing, and here's why.Let's say you've got x amount of
money and you wanna invest likethe wealthy, and somehow you
(05:18):
find some private deal. Right? Aprivate business.
You're not a business owner. Youdon't understand businesses. You
don't know how to to invest inthis. You just say, oh, they
said it was a good idea, so Iput some money into it. And then
the business goes belly up.
You just lost that money. Youdon't wanna invest out of your
purview of what you'recomfortable with. And if you
think, well, Mike, that's verycondescending. Look at Warren
(05:39):
Buffett. He's not investing inprivate equity.
He's not doing anything fancy.He's investing in American
publicly traded companies. Lookat the janitor out of Vermont
who passed away with manymultiples of millions of
dollars. He just bought a coupleof stocks that he understood and
was disciplined about it. So thereason why I'm going down this
(06:01):
path is, yeah, people are gonnahave more money, and others that
have less money saved forretirement.
Fine. People are gonna expectdifferent amounts of income in
retirement, and it's typicallybased on the life they've
already been living. Someoneliving off of 60,000 a year is
probably gonna want retirementaround 60,000 a year, maybe
70,000 a year, maybe 50,000 ayear, depending on their
(06:21):
lifestyle. Someone who'saccustomed of having more money,
hopefully saved money. But Iknow people that have made
$2,300,000 a year and have nosavings in retirement, and they
have to go to two very simplejobs just to make ends meet, and
it's miserable.
So this idea of it's almost likewe all want the forbidden fruit,
or we all want the thing that wecan't have. Get that out of your
(06:43):
head, because it is a great wayto get manipulated into a
product pitch that may not beappropriate for you. You can get
rich and stay rich off of thestock market. You can get rich
and stay rich off of realestate. You can get rich and
stay rich in so many differentways.
David (07:02):
Just not insurance products. Insurance is not an
investment. There we go. Yeah.Yeah.
I wanted to get that catchphraseout.
Mike (07:10):
Yeah. You're you're not gonna get rich buying a bunch of
life insurance unless youdeliberately got it. Somehow you
had a crystal ball that saysyou're gonna die in five years,
but the insurance companiesdidn't know about that, your
medical and everything was fine,and then the bus hits you. But
then you're not rich. It's yourbeneficiaries are rich.
So the reason why I bring it upis there's a lot of people that
(07:30):
want the over complicated sideof their investment portfolio,
when the reality is a simplerportfolio with a complicated
plan. When I say complicatedplans, I mean, really, our job
is more on taxes than anything.Tax planning and protection
planning, so understandingalternative investments like
buffered ETFs and structurednotes. That but that's not what
(07:53):
the wealthies do. That's just anoption that a lot of people
don't talk about.
So in the end, you don't want todo what someone else is doing
because it may not be suitable.It may not be congruent with
your behavior. I don't believeit's appropriate for people to
invest in things that they don'tunderstand. I am not cut out to
be a landlord. That's why Idon't have real estate
(08:16):
personally.
I'm just not cut out to do it.No. I am not a handyman. I I
don't know how to value thesethings. I have many clients and
many friends that are incrediblysuccessful in real estate, and
that's what they should bedoing.
That makes sense.
David (08:32):
Yeah. They're doing something that they get, they
understand, and they're happydoing, but you couldn't task
those same people to do likewhat you do. Right? I mean,
because it's just not in them.So they shouldn't try to, like,
keep up with the Joneses or dosomething that's just out of
their person.
Mike (08:47):
Know. Here here's an analogy. So incentive
investments, look at career fora second. Take someone that is
in sales. Okay?
They love the intricacies of theconversation, the relationship,
and just how dynamic thatconversation can be, the
competitive nature of livingcommission only, things like
that. And now take that personand put them into an engineering
(09:09):
role or a CPA role where it'sall structure, it's all math,
it's completely rigid. Are theygonna do well in that situation?
No. And take an engineer, forexample, or a CPA, or even like
a teacher, or someone thatoperates off of complete
structure, and put them intosomething where they don't know
where their next paycheck'sgonna come in.
(09:30):
They don't know how theconversations are gonna evolve.
It's completely dynamic. They'reprobably gonna flounder. So when
people say, well, hey, Palantirhas made a lot of money. Let's
invest in that.
Do you realize the risk thatyou're taking, and are you
emotionally capable of takingthat risk? Well, you know, so
and so says I should be all in sand p 500. Are you capable of
(09:54):
taking the risk that you'retaking? It's good in the good
years. It's not good in the downyears.
And what I have found is manypeople talk big until things
change. And you've got to findthe best way that's suitable,
not just for your economics, butalso that your emotions can
(10:14):
handle it.
David (10:15):
I think that's exactly right. And we can really get
caught up in sort of trying tostep in someone else's shoes
because it seems glamorous or itseems really cool or
interesting.
Mike (10:24):
David, do you have Bitcoin? I do not. Do you
understand how Bitcoin works?Not really. Do you have any
interest in getting intoBitcoin?
David (10:31):
None at all. K. But I hear I have some acquaintances
who talk about it, but I I couldtype something to say to them.
Like, oh, yeah. Yeah.
I I wanna get on to that too,but but I've chosen not to.
Mike (10:45):
Yeah. That's exactly how the conversation should probably
be when it comes to yourinvestment product strategies,
plans, and so on. Do youunderstand it? Are you
comfortable with it? Don't dothings because other people are
doing it.
Do what is right for you. Icannot emphasize that enough.
That's all the time we've gotfor the show today. If you
enjoyed the show, considersubscribing to it wherever you
(11:07):
get your podcast. Just searchfor how to retire on time.
Discover if your portfolio isbuilt to weather flat market
cycles if you're missing taxminimization opportunities that
you may not even know exist.Explore strategies that may be
able to help you lower youroverall risk while potentially
increasing your overall growthand lifestyle flexibility. This
(11:27):
is not your ordinary financialanalysis. Learn more about Your
Wealth Analysis and what itcould do for you regardless of
your age, asset, or targetretirement date. Go to
www.yourwealthanalysis.com todayto learn more and get started.
Welcome to How to Retire on Time, a show that answers
your retirement questions. Myname is Mike Decker. I'm a
licensed financial adviser andfiduciary. And joining me here,
Mr. David Franson.
David, thanks for being here.
David (00:15):
Yep. Happy to be here.
Mike (00:15):
As always, we're gonna answer your questions. Text them
to (913) 363-1234. And remember,this is just a show, not
financial advice, so make sureto do your research and
follow-up with whatever we talkabout. David, let's begin.
David (00:29):
Hey, Mike. I want to plan my retirement like the rich.
What do they do? That's a whole,like, group of people. Right?
Yeah. We have this fantasyabout, you know, quote unquote,
the rich. Right? I mean
Mike (00:40):
Yeah. So I wanna I wanna start by mentioning a book. I
won't say the title of the book,but it talks about what the
Rockefellers did. That mayactually be the title. I forget.
But the book was written to sellindexed universal life
insurance. Now indexed universallife insurance is an insurance
product, and it has a purpose.The purpose, as I'm defining it,
(01:02):
is that you need a death benefitand that you want some cash
flexibility, cash accumulationas a part of it, and maybe
there's some additional thingslike if you were to get sick,
there's some long term care helpor whatever it is. Like, that
that is insurance, though.You're paying fees for it.
Okay? What this book did wasthey took what the ultra wealthy
(01:22):
do, which as an oversimplifiedexplanation, is to lock up their
assets into an irrevocable trustthat they can't touch, so they
separate the tax burden fromthemselves, and then they borrow
against that trust that theycan't touch from a bank, because
if you borrow money tax free,you don't pay taxes on it, and
(01:42):
then whenever they pass, thetrust was set up to then resolve
the debts and things like that,and then pass to the next
generation. They're manipulatingthe estate tax laws and estate
planning laws and working withbanks who are willing to talk
with people with many, manymultiple millions of dollars. If
you have a $100,000, $500,000,even $2,000,000, you're not
(02:04):
going down that path. So that'sa trap.
The idea of I want to investlike the rich is well intended
because you think, well, whatdid they do that I'm not doing?
Well, what the rich did was oneof a couple of things. To get
rich, they either were born intoit, you can't replicate that.
They either took a significantamount of additional risk in
(02:28):
life, like starting a company.They worked extremely long
hours, and luck was on theirside, and they were able to be
industrious in starting abusiness or something like that.
Or maybe they won the lottery.Maybe that's something that's
not replicable.
David (02:42):
Or they're like really, really good at the the sport
that they play. Yeah.
Mike (02:45):
Yeah. Now that's the ultra wealthy. Yeah. And even sports,
should say, most of themsquander their money within five
to ten years. That'sunfortunate.
Very very few are like ShaqRight. Where he picked a boring
adviser, a boring CPA, and theymade boring decisions with
franchises and things that theylearned. Now the other side of
the wealthy, this isn't theultra wealthy. K? So if you've
(03:05):
got $1,015,000,000 dollars,$50,000,000, or more, you did
something where you increasedyour risk or you were born into
a situation that you can'treplicate.
So to compare that amount ofmoney and that lifestyle, it's
an apples to oranges situation.Now for those that are retiring
with one, two, five, or up to$10,000,000, those individuals
(03:28):
typically, this is what I'venoticed, they lived an extremely
simple life. They weren'tlavish. They worked really,
really hard in their careers.They developed a skill set that
was difficult to acquire.
So think of a very specializedengineer. Think of like a
neurosurgeon. Alright? I'm notsaying other doctors are less
than, I'm saying it's justreally tough to be a
(03:52):
neurosurgeon. Yeah.
I don't wanna compare that toany other medical profession
because they're all reallydifficult. But those professions
are very different, and theamount of time and effort and
work it took to get thatspecialized profession the high
school job I had was that theelectronics counter at Target.
That's what I did when I was 16years old. No training
necessary. Right?
(04:13):
I could just show up and justhang out. So the wealthy, there
is an element of discipline andcompetitiveness. Now that's not
to say that someone who doesn'thave a lot of money is not
disciplined. That's not true atall. There are many professions
that just don't pay as well, butyou enjoyed it, you're more
passionate about it, or it'syour specialty.
So let's let's first just havethis conversation of life is not
(04:34):
equal. It may be quote unquotefair, depending on your
definition, but it's not equalin the opportunities. It's not
equal in all of the pursuitsthat were going on in our life.
Some people are born withdifferent gifts than others.
Some people are more comfortablein certain industries than
others.
Okay? And I'm going to one pointhere. Based on the life that
(04:57):
you've been living will directlyreflect how you should continue
to maintain your life. If youhave a simpler life, you wanna
stick to simpler investments.That's not condescending.
That's not weird. It's just itmay be more appropriate to what
you're doing, and here's why.Let's say you've got x amount of
money and you wanna invest likethe wealthy, and somehow you
(05:18):
find some private deal. Right? Aprivate business.
You're not a business owner. Youdon't understand businesses. You
don't know how to to invest inthis. You just say, oh, they
said it was a good idea, so Iput some money into it. And then
the business goes belly up.
You just lost that money. Youdon't wanna invest out of your
purview of what you'recomfortable with. And if you
think, well, Mike, that's verycondescending. Look at Warren
(05:39):
Buffett. He's not investing inprivate equity.
He's not doing anything fancy.He's investing in American
publicly traded companies. Lookat the janitor out of Vermont
who passed away with manymultiples of millions of
dollars. He just bought a coupleof stocks that he understood and
was disciplined about it. So thereason why I'm going down this
(06:01):
path is, yeah, people are gonnahave more money, and others that
have less money saved forretirement.
Fine. People are gonna expectdifferent amounts of income in
retirement, and it's typicallybased on the life they've
already been living. Someoneliving off of 60,000 a year is
probably gonna want retirementaround 60,000 a year, maybe
70,000 a year, maybe 50,000 ayear, depending on their
(06:21):
lifestyle. Someone who'saccustomed of having more money,
hopefully saved money. But Iknow people that have made
$2,300,000 a year and have nosavings in retirement, and they
have to go to two very simplejobs just to make ends meet, and
it's miserable.
So this idea of it's almost likewe all want the forbidden fruit,
or we all want the thing that wecan't have. Get that out of your
(06:43):
head, because it is a great wayto get manipulated into a
product pitch that may not beappropriate for you. You can get
rich and stay rich off of thestock market. You can get rich
and stay rich off of realestate. You can get rich and
stay rich in so many differentways.
David (07:02):
Just not insurance products. Insurance is not an
investment. There we go. Yeah.Yeah.
I wanted to get that catchphraseout.
Mike (07:10):
Yeah. You're you're not gonna get rich buying a bunch of
life insurance unless youdeliberately got it. Somehow you
had a crystal ball that saysyou're gonna die in five years,
but the insurance companiesdidn't know about that, your
medical and everything was fine,and then the bus hits you. But
then you're not rich. It's yourbeneficiaries are rich.
So the reason why I bring it upis there's a lot of people that
(07:30):
want the over complicated sideof their investment portfolio,
when the reality is a simplerportfolio with a complicated
plan. When I say complicatedplans, I mean, really, our job
is more on taxes than anything.Tax planning and protection
planning, so understandingalternative investments like
buffered ETFs and structurednotes. That but that's not what
(07:53):
the wealthies do. That's just anoption that a lot of people
don't talk about.
So in the end, you don't want todo what someone else is doing
because it may not be suitable.It may not be congruent with
your behavior. I don't believeit's appropriate for people to
invest in things that they don'tunderstand. I am not cut out to
be a landlord. That's why Idon't have real estate
(08:16):
personally.
I'm just not cut out to do it.No. I am not a handyman. I I
don't know how to value thesethings. I have many clients and
many friends that are incrediblysuccessful in real estate, and
that's what they should bedoing.
That makes sense.
David (08:32):
Yeah. They're doing something that they get, they
understand, and they're happydoing, but you couldn't task
those same people to do likewhat you do. Right? I mean,
because it's just not in them.So they shouldn't try to, like,
keep up with the Joneses or dosomething that's just out of
their person.
Mike (08:47):
Know. Here here's an analogy. So incentive
investments, look at career fora second. Take someone that is
in sales. Okay?
They love the intricacies of theconversation, the relationship,
and just how dynamic thatconversation can be, the
competitive nature of livingcommission only, things like
that. And now take that personand put them into an engineering
(09:09):
role or a CPA role where it'sall structure, it's all math,
it's completely rigid. Are theygonna do well in that situation?
No. And take an engineer, forexample, or a CPA, or even like
a teacher, or someone thatoperates off of complete
structure, and put them intosomething where they don't know
where their next paycheck'sgonna come in.
(09:30):
They don't know how theconversations are gonna evolve.
It's completely dynamic. They'reprobably gonna flounder. So when
people say, well, hey, Palantirhas made a lot of money. Let's
invest in that.
Do you realize the risk thatyou're taking, and are you
emotionally capable of takingthat risk? Well, you know, so
and so says I should be all in sand p 500. Are you capable of
(09:54):
taking the risk that you'retaking? It's good in the good
years. It's not good in the downyears.
And what I have found is manypeople talk big until things
change. And you've got to findthe best way that's suitable,
not just for your economics, butalso that your emotions can
(10:14):
handle it.
David (10:15):
I think that's exactly right. And we can really get
caught up in sort of trying tostep in someone else's shoes
because it seems glamorous or itseems really cool or
interesting.
Mike (10:24):
David, do you have Bitcoin? I do not. Do you
understand how Bitcoin works?Not really. Do you have any
interest in getting intoBitcoin?
David (10:31):
None at all. K. But I hear I have some acquaintances
who talk about it, but I I couldtype something to say to them.
Like, oh, yeah. Yeah.
I I wanna get on to that too,but but I've chosen not to.
Mike (10:45):
Yeah. That's exactly how the conversation should probably
be when it comes to yourinvestment product strategies,
plans, and so on. Do youunderstand it? Are you
comfortable with it? Don't dothings because other people are
doing it.
Do what is right for you. Icannot emphasize that enough.
That's all the time we've gotfor the show today. If you
enjoyed the show, considersubscribing to it wherever you
(11:07):
get your podcast. Just searchfor how to retire on time.
Discover if your portfolio isbuilt to weather flat market
cycles if you're missing taxminimization opportunities that
you may not even know exist.Explore strategies that may be
able to help you lower youroverall risk while potentially
increasing your overall growthand lifestyle flexibility. This
(11:27):
is not your ordinary financialanalysis. Learn more about Your
Wealth Analysis and what itcould do for you regardless of
your age, asset, or targetretirement date. Go to
www.yourwealthanalysis.com todayto learn more and get started.
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