May 25, 2025 • 29 mins
Retirement Planning Insights with Harry Abrahamsen | Peaceful Life Radio
Join hosts David Lowry and Don Drew on Peaceful Life Radio as they interview Harry Abrahamson, a leading financial strategist specializing in retirement planning. In this episode, Harry explains the unique nature of money compared to math, discusses his book 'Money Rules: Nine Rules to Massive Wealth', and shares invaluable advice on managing finances before and during retirement. He covers topics like the behavior of money, retirement income strategies, the significance of RMDs, and the importance of having a diversified portfolio. Harry also sheds light on the benefits of whole life insurance and the pre-tax vs. post-tax investment debate. Tune in to get expert insights to help you secure your financial future.
00:00 Introduction to Money and Math
00:22 Meet Our Guest: Harry Abrahamson
00:33 Harry's Financial Philosophy
01:53 Money vs. Math: A Deeper Dive
03:40 Harry's Book: Money Rules
05:13 Retirement Planning Strategies
08:39 Understanding Required Minimum Distributions (RMDs)
14:39 Investment Strategies and Diversification
24:20 The Importance of Financial Preservation
27:51 Final Thoughts and How to Connect with Harry
Visit the Peaceful Life Radio website for more information. Peaceful Life Productions LLP produces this podcast, which helps nonprofits and small businesses share their stories and expertise through accessible and cost-effective podcasts and websites. For more information, please contact us at info@peacefullifeproductions.com.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Harry Abrahamsen (00:00):
Money is not math and math isn't money
(00:01):
because they quite frankly,behave differently.
If you take a look at math, mathis perfect.
One plus one equals two.
And if you and I are around athousand years from today, one
plus one will be two.
But if you take a look at$1today plus$1 a year from today,
$1 plus$1 in a year is nevergonna be$2 between taxes and
inflation.
It erodes.
David Lowry (00:22):
That was Harry Abrahamson, our guest on today's
Peaceful Life Radio.
I'm David Lowry, and with me ismy good friend Don Drew.
Hello Don.
Don Drew (00:30):
Hello, David.
I'm really excited about today'sprogram.
David Lowry (00:32):
I know.
Don, let me tell you a littlebit about Harry.
He's one of the leadingfinancial strategists in
personal financial economicsspecializing in helping
individuals at all stages ofretirement planning, and that's
why we have him on our showtoday.
He works with people who arethinking about retirement, those
who are getting ready to retire,and those who are already in
(00:54):
retirement.
So that's just about everybodywho's going to listen to our
show.
After September 11th in 2001, herealized the critical importance
of properly protecting yourselffrom all kinds of unexpected
life events and controlling yourown destiny.
So today, that's his philosophy.
He helps his clients do the samething.
(01:14):
Throughout his career, Harry'sclientele has shared one common
objective, and that's to receiveexpert advice and guidance from
someone they trust.
Harry has his bachelor ofscience in marketing with a
minor in finance from theUniversity of Tampa in Florida.
Then post-graduation, Harryhelped build a family business
from the ground up, and thenafter 10 successful years, he
(01:35):
founded his own company,Abrahamson Financial Group.
Harry, welcome to Peaceful LifeRadio.
We're so glad you're with ustoday.
Harry Abrahamsen (01:43):
David, thank you so much, And Don, thank you
so much for having me on today.
I'm excited to be here and lookforward to having a nice
conversation.
Don Drew (01:51):
Harry, we're really happy to have you with us.
You know, I first startedinvesting when I was 25.
I'm now 67.
So it's been over 40 years andit was one of the smartest
things I ever did.
Somebody came to me and said,what are you doing to prepare
for the future?
And my answer was, well, not awhole lot.
So I met my first financialadvisor and it really changed a
lot of things for me.
(02:11):
And I know that you can helpother people find their way
financially.
Your well known for saying thatmoney is more like oranges than
math.
I love that.
Can you tell us what that means?
Harry Abrahamsen (02:23):
A lot of times when people are doing planning,
especially retirement planning,you have to run some
calculations to do things,whether it's to figure out when
to take Social Security,different options, maybe with
pension plans.
So people use mathematicalcalculations to determine what
they should be doing.
But I always say that money isnot math and math isn't money
because they quite frankly,behave differently.
(02:45):
If you take a look at math, mathis perfect.
One plus one equals two.
And if you and I are around athousand years from today, one
plus one will be two.
But if you take a look at$1today plus$1 a year from today,
$1 plus$1 in a year is nevergonna be$2 between taxes and
inflation.
It erodes.
And so our money behaves morelike oranges.
(03:05):
If you put four oranges and putit in the middle of the table,
got up left and came back a yearlater, how many oranges would be
in the middle of the table?
None.
They'd rot from mildew.
So you have to really understandhow money works, especially with
retirement planning, becauseit's a little bit easier while
people are working in the wealthcreation phase.
Because you're earning a livingand then you kind of pivot and
(03:28):
you go into the distributionphase where now the money is at
work.
So a very good point to make andpeople to understand that money
is gonna erode over time anddoes behave a little bit
differently than it a puremathematical calculation.
David Lowry (03:40):
Harry, you wrote this wonderful book called Money
Rules.
Nine Rules to Massive Wealth.
And I know that you did this asa result of working with so many
clients over the years with yourpersonal consulting group.
Tell us what you were trying todo in this book and give us some
secrets on how we can do betterwith our retirement planning.
Harry Abrahamsen (04:00):
There's a couple of different components
of the book.
The first couple of chapters arevery philosophical, giving you
some foundation of how to makeplans.
One of the chapters I talk aboutis needs versus wants.
And a lot of times if you'replanning with someone and you're
talking about something andsomeone might say, well, I don't
know if I need that.
Yet they drove up in a Mercedesor a nice car.
(04:21):
They have a beautiful pair ofshoes on which technically they
don't need, right?
So a lot of times I'll say, ifyou're planning based on a need
and we live in a wild world, youmay wanna consider different
options and differentstrategies.
Another one of the chapters Italked about in the book is
protection.
And I use a fun example of backin futile times how people would
(04:42):
display their wealth withcastles.
At the time they would protecttheir castle and have a moat,
hot oil, alligators, to protecttheir wealth.
And today people have theirpaper or online castles, and
there's no protection of thingsthat could potentially happen.
And again, the more you have,the more is at stake.
So you have to be careful on howyou're positioning what you are
doing to properly protect.
(05:04):
And then there's some chaptersin the book that are very
tactical, to give you exampleson how to do certain things and
strategies that they can utilizein their everyday life.
Don Drew (05:13):
One of the things that a lot of folks try and do is
chase the market and try andpredict and win by gambling on
the performance of the market.
You've got something to sayabout that.
Harry Abrahamsen (05:22):
Wherever you are, there's no way to time a
market.
Nobody has a crystal ball.
Right?
So, you don't always wanna bechasing that rate of return.
You don't wanna always be tryingto get that extra couple of
percentage points'cause thereality is all it takes is a
couple of bad downturns orevents that happen in your life,
especially if you have thingslike required minimum
(05:43):
distributions that can throw awrench into any plan.
You wanna just make sure thatyou're being sound with your
approach, with how you'reinvesting your money, especially
as you get older.
So you have to be mindful of thefact of not always trying to get
that high rate of return,although you wanna get a decent
rate of return, but you have tobe careful.
Don Drew (06:01):
You used the term black swan events, which means
not just the market, but we allhave events that occur in our
lives that can impact ourfinances, especially at this
time that's so critical that weare protecting the money that we
have.
Harry Abrahamsen (06:15):
I talk about risk and I tell people that true
risk is everything that we'renot talking about right now.
Okay?
So like last year, nobody reallywas talking about tariffs and
the impact that could have.
Nobody was.
It was all about taxes andinterest rates and things like
that.
Real risk lies in everythingthat we're not even talking
about right now.
(06:35):
And that's a global or domesticblack swan that can have an
impact.
Maybe a correction with housing.
But then also is your health,right?
You can have an event.
You just go to a doctor likethis week and then next thing
you know you gotta see aspecialist and your whole entire
world unravels and you have toask yourself, is everything set
up the right way right now?
If something like that happened?
(06:56):
Then, I use an example in thebook the game that we played as
kids, red light, green light.
All of a sudden we're all up theline and you know, green light
comes and we're running and theysay red light and you stop.
But what happens in yourpersonal life if I said, red
light, you can't make a change.
You can't do anything right nowif something happened.
Are you okay?
(07:16):
Do you have everything set up,whether it's wills, umbrella
policies, if there was asickness, whatever that is?
So it's important to really payattention to all these things
because you don't know about'emuntil they happen.
David Lowry (07:27):
Are you a dollar cost averaging kind of guy, when
it comes to laying money asidefor the future?
Harry Abrahamsen (07:33):
I call that a micro in my book.
There's macros and there'smicros, right?
It's really common knowledge ifyou're gonna go into something
you dollar cost average, justbecause we don't know how
markets are gonna behave.
I think what happens withplanning and people is that it's
very important to get macro, tostep outside of the world.
Maybe it's just not, your moneymanager or your insurance
(07:55):
professional, your CPA, and toreally strategically look at
what's available and how can youuse all the tools to do
different things?
I always tell people inretirement, there's three
functions of money and they'resimple, but they're important to
understand.
The first function of money inretirement is income.
Which assets are gonna be usedto create income?
(08:15):
The second function isliquidity.
And that's something where maybeyou might take on a risk.
You don't need it.
Some people today they're like,how about crypto?
You know, if that's yourliquidity, if you need it, you
need an expense.
And then lastly, legacy.
And they kind of waterfalleffect into each other.
So you have to look at thesefunctions and say, okay, what
are we doing now?
Are we in the income function?
(08:35):
And what are the roles andresponsibilities of these assets
or investments?
Don Drew (08:39):
One of the things you mentioned earlier was required
minimum distributions.
I wanted to bring up a couple oftopics that are generally
specific to people who areentering into their retirement
years where they're drawing outof their savings or out of their
investments and they have lessincome or no income.
What is a required minimumdistribution and why is it so
important that we pay attentionto it?
Harry Abrahamsen (09:01):
A required minimum distribution is an
actuarial calculation determinedby the IRS.
That's basically what it is.
And it's all age-based.
So depending on your birthday,there'll be an age, whether it's
72, 73, 74, 75, depending onyour age'cause they just made a
change.
And they're gonna basicallyrequire you to take a percentage
(09:23):
of all of your qualified assets,to satisfy this IRS requirement.
And the reason why you have topay attention to it is if you
understand what a safewithdrawal rate is in general,
in contrast to the RMD, youwould hear like this, the 4%
safe withdrawal rate.
You know, that's something onthe internet and talked about.
The RMD percentage actually isgonna contradict that and be
(09:47):
higher and increase as you getolder.
So even though if you're gonnado prudent planning, the IRS
comes along and says, Hey, bythe way, we don't really care
about your safe 4%.
We need four and a half, five,and it actually increases as you
get older.
So you need to pay attention tothat because, like, this year
happens, and the person I wasactually meeting with, she said
(10:08):
her account was down 30% and itwas an IRA and she's like, I
took my RMD and I said, geez,taking your RMD while it's down
30% is not the best strategy.
So you need to really have aplan.
I find that people need toactually have an RMD strategy
depending on your assets.
And the other thing you have topay attention to is where the
(10:29):
money is.
So if it's in an old 401kbecause you like that 401k
because you didn't move it to anIRA, you have to take that
distribution separately.
Or if it's a TSP separately.
Or if everything moved into anIRA, then you can pick where's
the best spot.
That's something I talk aboutwith a lot of people.
And sometimes, people are notaware that the percentage
(10:50):
increases.
They just thought it was a setamount of money and it's not.
Don Drew (10:54):
Are you able to then reinvest some of that money or
if you have to take out morethan you need?
In other words, are you able todo something with that money
that's smart?
Harry Abrahamsen (11:03):
Yeah, there's a lot of very interesting things
that people can do with thatscenario.
Like I run through an example ofa person that has a million
dollars and they're taking theirRMDs off.
You have to be careful becauseif that account is down 9% while
you're taking that distribution,over that period of time, yes,
you can take that money out andreinvest that maybe.
(11:24):
And it's gonna be anon-qualified account that you
can use, in case you needsomething if you have to access
money for a car or something foryour home.
But, the fact of the matter isthat if you are pulling that RMD
and that account is down 9%, 8%,10%, you are unnecessarily
eroding that account down duringthat period.
And a lot of people, becauseit's not like tangible, they
(11:46):
don't realize because they'llsay, well geez, what else can I
do?
And that's where you just haveto be really careful of like
maybe set aside some money whereit's sitting in cash earning
four or 5% to handle that RMD.
That's where that chasing ratesof return come into.
Because somebody may say, well,geez, the market went up 12%.
I missed out.
But the fact of the matter is,if the accounts dropped 12%, you
(12:08):
just saved a ton of money there,you know?
David Lowry (12:10):
Here we are in a very unusual period of time, I
think.
The market appears to beshrinking right now, and some of
our 4 0 1 ks are decreasing invalue.
We don't wanna panic, and yetsame time we wanna be prudent.
What basic rules or advice wouldyou give us when we have
uncertain times staying thecourse in this kind of
environment?
Harry Abrahamsen (12:30):
You wanna make sure the person you're working
with understands retirementincome and knowing that the
markets are gonna go up and themarkets are gonna go down and
having a plan in place.
And then just being mindful thattheir accounts are properly
invested and allocated the rightway.
It's important if people areworking with an advisor,
probably 80% of the advisors outthere work with people while
(12:52):
they're working.
But there's a small segment ofpeople that just only focus on
people in retirement to helpnavigate what you're talking
about.
I don't work with people whilethey're working.
It's not my area of expertise,and the reason why I'm saying
that is that there's a lot ofvery interesting tools you can
use to simulate, and again,money isn't math, math isn't
(13:13):
money, but simulate certaincircumstances and the number one
priority for you is income.
You have to look at your incomeand say Between social security,
pension, money coming off ofinvestments is this amount of
money per month enough?
Are you okay?
I would just strongly recommendto look at your income goal.
Look at where it's coming from.
(13:34):
We call it a security scores, iswhat's coming in that's fixed
guarantee no matter what goes onin the world that you know
you're okay with.
And then the balance is gonnacome from any risk-based
portfolio.
And things will change in 10years because people in their
sixties, there's a very bigdifference of a conversation I'm
having with them when they'relate seventies and in their
eighties.
So you wanna make sure yourincome is okay, whatever your
(13:57):
strategy is.
If it's dividend income.
You have to be careful becausethose assets can drop 40%.
You have to be okaypsychologically to be saying,
okay, my account down 40%, but Ihave my dividends.
There are some very unique,annuity products that people can
look into that do things verydifferently today than before.
For example, they could providea guaranteed stream of income,
(14:19):
like a pension plan, but theyalso can accumulate.
The old fashioned types ofproducts like that money would
disappear.
So you're trading money forincome.
But for people that are fairlyyoung, like in your sixties, is
a very young retiree, seventiesis where people are most likely
retired, they have to be carefulthey're not outliving the money
that they do have.
Don Drew (14:39):
One of the issues I hear people talk about a lot is
this pre-tax, post-taxchallenge.
Whether or not to invest in aregular IRA or a Roth IRA and so
on.
One of those is pre-tax.
One of those is post-tax.
Should I be looking at the Roth?
Should I be looking at astraditional investments?
What's your advice on that?
Harry Abrahamsen (14:55):
I like the Roth approach.
They grow without a tax and youcan access them without a tax.
Somebody may say, Hey, let's doa Roth conversion.
You can't give generic advice.
It's gonna depend on a lot ofthings.
What's the break even?
How long is it gonna be?
And that has to be done by eachperson differently.
You have to look at what's yourtax brackets today?
Run a proper report.
A lot of times if you're in yourlater sixties and seventies, it
(15:18):
doesn't make sense over timedepending on your bracket or
circumstance.
Roth is fantastic.
I don't know how long it's gonnabe around.
Back in 2014, the government dida study, it's in my book, and
the government concluded theylose out on future tax revenue.
They would prefer you dopre-tax.
That's a home run for them.
David Lowry (15:37):
Harry, it seems like a diversified portfolio is
the way to go.
Harry Abrahamse (15:41):
Diversification is really important and in my
book I talk about life insuranceand specifically about whole
life insurance.
99% of all my clients can't evenget it'cause they're old and
don't qualify.
But when they read about thestrategies and things they can
actually do, they're like, geez,I wish I would've done that.
I myself, I'm 58 and I have 13life insurance policies that are
(16:03):
all paid up when I'm 65.
So everybody does things alittle differently in their
life.
Obviously investments and realestate and all that stuff is
important too, but a lot ofdifferent diversification will
help you in the long run.
Don Drew (16:14):
Harry, one of your rules is, that the best bank is
the one that you build.
I love that phrase.
Can you share with us a littlebit more about that idea?
Harry Abrahamsen (16:23):
Yeah.
For younger people put away somemoney into an insurance policy.
If you design it correctly, it'saccumulating money that's tax
free, that grows tax free, andyou can access it tax free for
the rest of your life.
The compounding or exponentialgrowth never stops.
It will never, ever stop.
College education planning a 5,2, 9 plan.
(16:46):
This is a perfect example.
When you put money away overtime.
It's not until the end of thesecond third, you get
exponential growth, right?
And then once you get to thelast third of exponential growth
is where you really get in thatgrowth.
Well, if you have a baby and youput away some money when they're
born and you do that, and the18th year just prior to that
(17:06):
last third of growth, youliterally take all that money
and you give it to college.
And that curve resets at thatpoint in time.
And so you'll never realize thatright.
But If you understand, likeusing an insurance product where
you're building that bank, whichI've done for my children, when
they're 18, you're now takingthat money out, whether it's 40,
(17:27):
60,$80,000 and that goes to payfor college.
But that 80,000 is still in thataccount, growing and compounding
as if it still is in theaccount.
And that's because it'scollateralized as a loan.
It has to be the right policy,the right company, like all of
the right stuff for what I'mexplaining to work.
It's not an IUL or variableuniversal life or anything like
(17:49):
that.
It has to be the right stuff.
And when you understand it, it'svery powerful because then you
can actually lend that money outover and over for different
things.
For example, if a couple is intheir forties, they're going
through a tough timefinancially, their credit is
bad, they can't get a loan, alot of times we can take out
(18:10):
$20,000.
It doesn't impact your credit atall'cause it's from a policy.
You use the 20,000 to get rid ofyour credit card debt
immediately.
And because it's considered anonrecourse loan, you don't have
to pay it back technically ifyou don't want to.
So your credit will get fixed ina couple of months, no problem.
It helps you out to do differentthings, different tasks in
(18:32):
different periods of your lifethat we're not planning on.
You can also use it, like forme, where my kids are grown.
I'm having my seventhgrandchild, but if you need to
lend money, I can lend money, nomatter what, to my kids.
I don't have to go to a bank, Idon't have to liquidate my
investments.
It's another tool in youroverall mix of what you have and
your plan.
David Lowry (18:51):
I have a question about distributions.
We've talked about RMDs and soforth.
More and more, seniors areworking longer.
Their health is good.
They stay on the job longer.
Some of'em are working in theirseventies, not as many, but some
do.
Should you start taking your 4 01 ks because you qualify or
should you keep on paying in andtaking'em when you retire?
(19:13):
Any ideas on that?
Harry Abrahamsen (19:13):
We take a tax return and run it through a
report, right?
A two-page summary report.
You see if it's not bumping youup into different brackets for
different things.
So year by year, Hey, okay,what's the plan for this year?
Are you gonna work?
How much you anticipate you'regonna earn this year?
Then based on that, what aresome of the distributions we
should take?
Again, nobody really has thatcrystal ball to understand where
(19:34):
federal tax rates are gonna be.
Nobody knows where they're gonnabe next year.
I think working is a great thingfor people if they wanna do it
and they're healthy, of course.
And then just being smart aboutthe distribution.
So as long as it's not bumpingthem up into a bracket,
unnecessarily, but yeah, I thinktaking distributions, enjoying
your life, being smart from atax standpoint.
Even if you are taking a$20,000distribution out of an IRA,
(19:57):
where it's not bumping you up tothe next bracket, you don't need
it, but then you put it in anon-qualified brokerage account,
that's a great move, you know?
Don Drew (20:03):
Harry, you mentioned earlier in the program the 4%
distribution rate, which is sortof the, thing that you'll read
about most on the internet andso forth.
And I think most people havegotten in their heads that okay,
so I should be withdrawing about4% per year, or that's the most
I can, or what I should betaking out every year.
Dave Ramsey talks about it'sokay, take up to 8%.
(20:24):
What kinds of things do we needto think about when we're
looking at how much money weneed to take out per year?
Harry Abrahamsen (20:31):
Great question.
So anybody can GoogleMorningstar safe withdrawal
rates.
The interesting thing about thesafe withdrawal rates is they
change every year.
They're 3.8% this year, lastyear was 4%.
The year before that was 3.8.
So think about that.
So this four percent's a generalguideline, and the reason why it
exists is because it gives theportfolio over time, 30 years,
(20:56):
in all market conditions, likehow would it work or behave?
And the reason why people use 4%is because you need to have
reliable income, right?
So you're like, okay, if I'mtaking 4%, I need to have a
budget per month.
But what happens when you lookat Dave Ramsey and he's such a
popular person.
He's written a lot of books.
He's got a Wikipedia page, andit's amazing.
In November of 2023, heliterally doubled down on this
(21:20):
8% and he's having a battle withanother person, Dr.
Wade Fau.
Dr.
Wade Fau is one of the leadingretirement income gurus in the
United States of America, barnone.
Okay?
And these two are battling itout in the media for real.
And it's interesting'cause Dr.
Wade Fau is saying to DaveRamsey markets can be down.
(21:44):
You can't take eight whenthey're down, but for some
reason, he doesn't want torealize the fact that it's not
gonna be a consistent rate ofreturn.
You can't run an analysis on 6%every year, and I'm taking this
percentage off.
It just doesn't work like thatin the real world.
So I did an analysis.
We ran an example if you did 8%in 1980, how would that work for
(22:04):
30 years?
And it worked out okay.
Then we ran it in 1990, andafter the 10th year where it
peaked and then just dropped offright after that and that person
would've ran outta moneytechnically.
And then I ran it for the year2000 and it took nine years.
So it really depends on whereyou are and when you were
actually retire.
(22:25):
I always tell people like thatthere's a myth that you're gonna
run outta money.
You know what really happens?
You don't really ever run outtamoney.
What happens is you actuallylive in fear'cause you're gonna
sit there and that account'sgonna get to a certain point.
And then you're gonna just say,I'm not going, okay, we can't
afford it.
I'm not gonna be able to go tothe restaurant.
(22:45):
So what happens?
You're never gonna run outtamoney, you run outta lifestyle.
That's what you run out of.
Because there'll be thispsychological component that'll
say, Hey, my account's down to250, we can't go on that
vacation or we can't afford thatrestaurant, so we're just not
gonna go.
And then you basically run outtalifestyle, but you keep your
money in that account out offear.
Don Drew (23:04):
It's always important no matter how old we are, to
have a working budget.
I think what you're saying ishow important it is for us to
understand what our needs are,how much we need, and work that
in tandem with our, withdrawalrate, whatever that is.
Harry Abrahamsen (23:18):
Absolutely.
When you look at your expensesof today and you look at wealth
erosion it's not just taxes,inflation, it's planned
obsolescence, technologicalchange, fees, consumer
financing.
I did some research this morningin the state of New Jersey.
There's between 55 to 75different taxes, fees, federal,
(23:42):
state, and local in the state ofNew Jersey.
Okay?
So that's just a component wherewe live in New Jersey, believe
it or not, when we go to thesupermarket, we have to buy
bags.
And it's not just regular bags.
So there's cultural shifts.
Like if you go to a restaurantyears ago you tip the person
between 15 and 20, depending onthe level of service.
(24:02):
You go to a restaurant, at leastaround here, they want.
20, 25, 30%.
I'm like 30% that's a lot ofmoney for a tip.
So it's cultural shifts.
So your money basically iseroding very close to believe it
or not, 15% and it's not justtax inflation that most people
talk about.
David Lowry (24:18):
Man, that's really scary.
One of the things we have to bepaying attention to is
preservation of our money.
What are some strategies you cangive us to make sure that we're
preserving what we have even indifficult times.
Harry Abrahamsen (24:32):
Preserving is very important.
And if you look back 10 yearsago, even five years ago, you
could barely get 1% in a bank,right?
Recently, we've all had thefortune of having four point a
half, 5%, five and a halfpercent.
Right?
And people are like, wow.
It's like Mardi Gras, it'sfantastic.
Which is great.
One of my concerns is that ifrates do drop and it's just a
(24:55):
matter of time, I think, wheredo you put your money where it's
at least getting some type ofgrowth?
And that's where it's importantto understand even some
insurance products that are outthere where you can maybe get
some of these rates of return orsome of the protections that you
have in addition to yourinvestments.
Again, you definitely wanna lookat all options that are out
there.
There's a lot of very new,interesting products that people
(25:17):
can look at, even from along-term care planning
perspective.
The new, products out there,they're not like the old ones
where you're paying that premiumand if you have a heart attack,
you lose everything.
It's a whole different ballgame.
Don Drew (25:29):
Harry, is there anything that we're missing here
that's really criticallyimportant for people who are in
the latter part of their life?
Harry Abrahamsen (25:36):
You're not gonna always be right.
You just never know, right?
So be mindful of, okay, I wannalook at some things that are
conservative, what are myoptions?
And then talk to someone aboutall the different, various
options and then make a decisionbased on that.
It's always important no matterwhere you are even if things are
perfect., I'll give you anexample.
I met a very nice couple, andthey were 67.
(25:57):
They were perfect.
They had rental income, a bunchof CDs that were coming due and
they had this annuity that theyloved and they got it from a
very good friend of theirs.
And they came walking into myoffice and everything literally
was perfect.
And we were able to look at whatthey were doing.
And they had a good amount ofmoney.
We looked at that and they wereable to make one change where
(26:19):
that was giving them$68,000 ofincome a year and we made one
move and they were able, therewas no cost.
There were no fees.
There was literally nothing thathappened where they were able to
get$117,000 a year with the samemoney.
That's a fantastic amount ofmoney.
(26:39):
And think about that.
They're like 67 years old andthey discovered all this extra
money that they have with norisk.
So you wanna go out and explore,have a conversation, talk to
people, get a betterunderstanding of things that you
can utilize.
There's different programs outthere that don't cost money.
And one last piece of advice, Ialways say to someone if you are
self-directing your portfolioand you are adverse to a managed
(27:03):
money fee for your assets, Ialways say to them, listen, you
always wanna have'A' players onyour bench.
Because if you are taking careof things for the last 20, 30,
40 years and you're doing agreat job, the last thing you
want if you're in your lateseventies, eighties with a
health problem, go into doctorsand trying to interview a
(27:24):
planner to help you when that'shappening.
It's the worst time.
If you are at your'A' game, youknow your stuff right now.
Make sure you get people on yourbench to say, Hey, listen, I'm
not fully gonna give youeverything right now, but I just
want to test you out.
I wanna just see how it's going,because I wanna have backup
plans because lemme tell you thelast thing you wanna be dealing
(27:46):
with when you have doctors orhealth concerns is trying to
interview for a newrelationship.
David Lowry (27:51):
We've been talking to Harry Abrahamson, who has
written a book, Money Rules,Nine Rules for Massive Wealth.
Harry, tell us what's going onin your life, how we can get
hold of you, your social media,and any upcoming things.
Harry Abrahamsen (28:05):
Thanks.
We have a YouTube channel we arelaunching.
It's called Retire With Harry.
It's exclusively designed forpeople that are thinking about
retirement or already in it.
We'll be talking about all kindsof different topics and
whatever's relevant that'shappening right now.
Social media.
Instagram, that's my funaccount.
That's just me living my lifedoing the things I'm doing.
It's not related to business,but it's just all pure fun.
(28:28):
And of course our website and ifthey wanna get the book, it's on
Amazon, they can go there.
Money rules.
They can type in my name, and mybook pops up.
But yeah, that's how they canreach me.
Don Drew (28:37):
Harry, thanks for being with us today, so
appreciate you.
Harry Abrahamsen (28:39):
Thank you, David.
Thank you, Don.
I appreciate being here today.
Money is not math and math isn't money
(00:01):
because they quite frankly,behave differently.
If you take a look at math, mathis perfect.
One plus one equals two.
And if you and I are around athousand years from today, one
plus one will be two.
But if you take a look at$1today plus$1 a year from today,
$1 plus$1 in a year is nevergonna be$2 between taxes and
inflation.
It erodes.
David Lowry (00:22):
That was Harry Abrahamson, our guest on today's
Peaceful Life Radio.
I'm David Lowry, and with me ismy good friend Don Drew.
Hello Don.
Don Drew (00:30):
Hello, David.
I'm really excited about today'sprogram.
David Lowry (00:32):
I know.
Don, let me tell you a littlebit about Harry.
He's one of the leadingfinancial strategists in
personal financial economicsspecializing in helping
individuals at all stages ofretirement planning, and that's
why we have him on our showtoday.
He works with people who arethinking about retirement, those
who are getting ready to retire,and those who are already in
(00:54):
retirement.
So that's just about everybodywho's going to listen to our
show.
After September 11th in 2001, herealized the critical importance
of properly protecting yourselffrom all kinds of unexpected
life events and controlling yourown destiny.
So today, that's his philosophy.
He helps his clients do the samething.
(01:14):
Throughout his career, Harry'sclientele has shared one common
objective, and that's to receiveexpert advice and guidance from
someone they trust.
Harry has his bachelor ofscience in marketing with a
minor in finance from theUniversity of Tampa in Florida.
Then post-graduation, Harryhelped build a family business
from the ground up, and thenafter 10 successful years, he
(01:35):
founded his own company,Abrahamson Financial Group.
Harry, welcome to Peaceful LifeRadio.
We're so glad you're with ustoday.
Harry Abrahamsen (01:43):
David, thank you so much, And Don, thank you
so much for having me on today.
I'm excited to be here and lookforward to having a nice
conversation.
Don Drew (01:51):
Harry, we're really happy to have you with us.
You know, I first startedinvesting when I was 25.
I'm now 67.
So it's been over 40 years andit was one of the smartest
things I ever did.
Somebody came to me and said,what are you doing to prepare
for the future?
And my answer was, well, not awhole lot.
So I met my first financialadvisor and it really changed a
lot of things for me.
(02:11):
And I know that you can helpother people find their way
financially.
Your well known for saying thatmoney is more like oranges than
math.
I love that.
Can you tell us what that means?
Harry Abrahamsen (02:23):
A lot of times when people are doing planning,
especially retirement planning,you have to run some
calculations to do things,whether it's to figure out when
to take Social Security,different options, maybe with
pension plans.
So people use mathematicalcalculations to determine what
they should be doing.
But I always say that money isnot math and math isn't money
because they quite frankly,behave differently.
(02:45):
If you take a look at math, mathis perfect.
One plus one equals two.
And if you and I are around athousand years from today, one
plus one will be two.
But if you take a look at$1today plus$1 a year from today,
$1 plus$1 in a year is nevergonna be$2 between taxes and
inflation.
It erodes.
And so our money behaves morelike oranges.
(03:05):
If you put four oranges and putit in the middle of the table,
got up left and came back a yearlater, how many oranges would be
in the middle of the table?
None.
They'd rot from mildew.
So you have to really understandhow money works, especially with
retirement planning, becauseit's a little bit easier while
people are working in the wealthcreation phase.
Because you're earning a livingand then you kind of pivot and
(03:28):
you go into the distributionphase where now the money is at
work.
So a very good point to make andpeople to understand that money
is gonna erode over time anddoes behave a little bit
differently than it a puremathematical calculation.
David Lowry (03:40):
Harry, you wrote this wonderful book called Money
Rules.
Nine Rules to Massive Wealth.
And I know that you did this asa result of working with so many
clients over the years with yourpersonal consulting group.
Tell us what you were trying todo in this book and give us some
secrets on how we can do betterwith our retirement planning.
Harry Abrahamsen (04:00):
There's a couple of different components
of the book.
The first couple of chapters arevery philosophical, giving you
some foundation of how to makeplans.
One of the chapters I talk aboutis needs versus wants.
And a lot of times if you'replanning with someone and you're
talking about something andsomeone might say, well, I don't
know if I need that.
Yet they drove up in a Mercedesor a nice car.
(04:21):
They have a beautiful pair ofshoes on which technically they
don't need, right?
So a lot of times I'll say, ifyou're planning based on a need
and we live in a wild world, youmay wanna consider different
options and differentstrategies.
Another one of the chapters Italked about in the book is
protection.
And I use a fun example of backin futile times how people would
(04:42):
display their wealth withcastles.
At the time they would protecttheir castle and have a moat,
hot oil, alligators, to protecttheir wealth.
And today people have theirpaper or online castles, and
there's no protection of thingsthat could potentially happen.
And again, the more you have,the more is at stake.
So you have to be careful on howyou're positioning what you are
doing to properly protect.
(05:04):
And then there's some chaptersin the book that are very
tactical, to give you exampleson how to do certain things and
strategies that they can utilizein their everyday life.
Don Drew (05:13):
One of the things that a lot of folks try and do is
chase the market and try andpredict and win by gambling on
the performance of the market.
You've got something to sayabout that.
Harry Abrahamsen (05:22):
Wherever you are, there's no way to time a
market.
Nobody has a crystal ball.
Right?
So, you don't always wanna bechasing that rate of return.
You don't wanna always be tryingto get that extra couple of
percentage points'cause thereality is all it takes is a
couple of bad downturns orevents that happen in your life,
especially if you have thingslike required minimum
(05:43):
distributions that can throw awrench into any plan.
You wanna just make sure thatyou're being sound with your
approach, with how you'reinvesting your money, especially
as you get older.
So you have to be mindful of thefact of not always trying to get
that high rate of return,although you wanna get a decent
rate of return, but you have tobe careful.
Don Drew (06:01):
You used the term black swan events, which means
not just the market, but we allhave events that occur in our
lives that can impact ourfinances, especially at this
time that's so critical that weare protecting the money that we
have.
Harry Abrahamsen (06:15):
I talk about risk and I tell people that true
risk is everything that we'renot talking about right now.
Okay?
So like last year, nobody reallywas talking about tariffs and
the impact that could have.
Nobody was.
It was all about taxes andinterest rates and things like
that.
Real risk lies in everythingthat we're not even talking
about right now.
(06:35):
And that's a global or domesticblack swan that can have an
impact.
Maybe a correction with housing.
But then also is your health,right?
You can have an event.
You just go to a doctor likethis week and then next thing
you know you gotta see aspecialist and your whole entire
world unravels and you have toask yourself, is everything set
up the right way right now?
If something like that happened?
(06:56):
Then, I use an example in thebook the game that we played as
kids, red light, green light.
All of a sudden we're all up theline and you know, green light
comes and we're running and theysay red light and you stop.
But what happens in yourpersonal life if I said, red
light, you can't make a change.
You can't do anything right nowif something happened.
Are you okay?
(07:16):
Do you have everything set up,whether it's wills, umbrella
policies, if there was asickness, whatever that is?
So it's important to really payattention to all these things
because you don't know about'emuntil they happen.
David Lowry (07:27):
Are you a dollar cost averaging kind of guy, when
it comes to laying money asidefor the future?
Harry Abrahamsen (07:33):
I call that a micro in my book.
There's macros and there'smicros, right?
It's really common knowledge ifyou're gonna go into something
you dollar cost average, justbecause we don't know how
markets are gonna behave.
I think what happens withplanning and people is that it's
very important to get macro, tostep outside of the world.
Maybe it's just not, your moneymanager or your insurance
(07:55):
professional, your CPA, and toreally strategically look at
what's available and how can youuse all the tools to do
different things?
I always tell people inretirement, there's three
functions of money and they'resimple, but they're important to
understand.
The first function of money inretirement is income.
Which assets are gonna be usedto create income?
(08:15):
The second function isliquidity.
And that's something where maybeyou might take on a risk.
You don't need it.
Some people today they're like,how about crypto?
You know, if that's yourliquidity, if you need it, you
need an expense.
And then lastly, legacy.
And they kind of waterfalleffect into each other.
So you have to look at thesefunctions and say, okay, what
are we doing now?
Are we in the income function?
(08:35):
And what are the roles andresponsibilities of these assets
or investments?
Don Drew (08:39):
One of the things you mentioned earlier was required
minimum distributions.
I wanted to bring up a couple oftopics that are generally
specific to people who areentering into their retirement
years where they're drawing outof their savings or out of their
investments and they have lessincome or no income.
What is a required minimumdistribution and why is it so
important that we pay attentionto it?
Harry Abrahamsen (09:01):
A required minimum distribution is an
actuarial calculation determinedby the IRS.
That's basically what it is.
And it's all age-based.
So depending on your birthday,there'll be an age, whether it's
72, 73, 74, 75, depending onyour age'cause they just made a
change.
And they're gonna basicallyrequire you to take a percentage
(09:23):
of all of your qualified assets,to satisfy this IRS requirement.
And the reason why you have topay attention to it is if you
understand what a safewithdrawal rate is in general,
in contrast to the RMD, youwould hear like this, the 4%
safe withdrawal rate.
You know, that's something onthe internet and talked about.
The RMD percentage actually isgonna contradict that and be
(09:47):
higher and increase as you getolder.
So even though if you're gonnado prudent planning, the IRS
comes along and says, Hey, bythe way, we don't really care
about your safe 4%.
We need four and a half, five,and it actually increases as you
get older.
So you need to pay attention tothat because, like, this year
happens, and the person I wasactually meeting with, she said
(10:08):
her account was down 30% and itwas an IRA and she's like, I
took my RMD and I said, geez,taking your RMD while it's down
30% is not the best strategy.
So you need to really have aplan.
I find that people need toactually have an RMD strategy
depending on your assets.
And the other thing you have topay attention to is where the
(10:29):
money is.
So if it's in an old 401kbecause you like that 401k
because you didn't move it to anIRA, you have to take that
distribution separately.
Or if it's a TSP separately.
Or if everything moved into anIRA, then you can pick where's
the best spot.
That's something I talk aboutwith a lot of people.
And sometimes, people are notaware that the percentage
(10:50):
increases.
They just thought it was a setamount of money and it's not.
Don Drew (10:54):
Are you able to then reinvest some of that money or
if you have to take out morethan you need?
In other words, are you able todo something with that money
that's smart?
Harry Abrahamsen (11:03):
Yeah, there's a lot of very interesting things
that people can do with thatscenario.
Like I run through an example ofa person that has a million
dollars and they're taking theirRMDs off.
You have to be careful becauseif that account is down 9% while
you're taking that distribution,over that period of time, yes,
you can take that money out andreinvest that maybe.
(11:24):
And it's gonna be anon-qualified account that you
can use, in case you needsomething if you have to access
money for a car or something foryour home.
But, the fact of the matter isthat if you are pulling that RMD
and that account is down 9%, 8%,10%, you are unnecessarily
eroding that account down duringthat period.
And a lot of people, becauseit's not like tangible, they
(11:46):
don't realize because they'llsay, well geez, what else can I
do?
And that's where you just haveto be really careful of like
maybe set aside some money whereit's sitting in cash earning
four or 5% to handle that RMD.
That's where that chasing ratesof return come into.
Because somebody may say, well,geez, the market went up 12%.
I missed out.
But the fact of the matter is,if the accounts dropped 12%, you
(12:08):
just saved a ton of money there,you know?
David Lowry (12:10):
Here we are in a very unusual period of time, I
think.
The market appears to beshrinking right now, and some of
our 4 0 1 ks are decreasing invalue.
We don't wanna panic, and yetsame time we wanna be prudent.
What basic rules or advice wouldyou give us when we have
uncertain times staying thecourse in this kind of
environment?
Harry Abrahamsen (12:30):
You wanna make sure the person you're working
with understands retirementincome and knowing that the
markets are gonna go up and themarkets are gonna go down and
having a plan in place.
And then just being mindful thattheir accounts are properly
invested and allocated the rightway.
It's important if people areworking with an advisor,
probably 80% of the advisors outthere work with people while
(12:52):
they're working.
But there's a small segment ofpeople that just only focus on
people in retirement to helpnavigate what you're talking
about.
I don't work with people whilethey're working.
It's not my area of expertise,and the reason why I'm saying
that is that there's a lot ofvery interesting tools you can
use to simulate, and again,money isn't math, math isn't
(13:13):
money, but simulate certaincircumstances and the number one
priority for you is income.
You have to look at your incomeand say Between social security,
pension, money coming off ofinvestments is this amount of
money per month enough?
Are you okay?
I would just strongly recommendto look at your income goal.
Look at where it's coming from.
(13:34):
We call it a security scores, iswhat's coming in that's fixed
guarantee no matter what goes onin the world that you know
you're okay with.
And then the balance is gonnacome from any risk-based
portfolio.
And things will change in 10years because people in their
sixties, there's a very bigdifference of a conversation I'm
having with them when they'relate seventies and in their
eighties.
So you wanna make sure yourincome is okay, whatever your
(13:57):
strategy is.
If it's dividend income.
You have to be careful becausethose assets can drop 40%.
You have to be okaypsychologically to be saying,
okay, my account down 40%, but Ihave my dividends.
There are some very unique,annuity products that people can
look into that do things verydifferently today than before.
For example, they could providea guaranteed stream of income,
(14:19):
like a pension plan, but theyalso can accumulate.
The old fashioned types ofproducts like that money would
disappear.
So you're trading money forincome.
But for people that are fairlyyoung, like in your sixties, is
a very young retiree, seventiesis where people are most likely
retired, they have to be carefulthey're not outliving the money
that they do have.
Don Drew (14:39):
One of the issues I hear people talk about a lot is
this pre-tax, post-taxchallenge.
Whether or not to invest in aregular IRA or a Roth IRA and so
on.
One of those is pre-tax.
One of those is post-tax.
Should I be looking at the Roth?
Should I be looking at astraditional investments?
What's your advice on that?
Harry Abrahamsen (14:55):
I like the Roth approach.
They grow without a tax and youcan access them without a tax.
Somebody may say, Hey, let's doa Roth conversion.
You can't give generic advice.
It's gonna depend on a lot ofthings.
What's the break even?
How long is it gonna be?
And that has to be done by eachperson differently.
You have to look at what's yourtax brackets today?
Run a proper report.
A lot of times if you're in yourlater sixties and seventies, it
(15:18):
doesn't make sense over timedepending on your bracket or
circumstance.
Roth is fantastic.
I don't know how long it's gonnabe around.
Back in 2014, the government dida study, it's in my book, and
the government concluded theylose out on future tax revenue.
They would prefer you dopre-tax.
That's a home run for them.
David Lowry (15:37):
Harry, it seems like a diversified portfolio is
the way to go.
Harry Abrahamse (15:41):
Diversification is really important and in my
book I talk about life insuranceand specifically about whole
life insurance.
99% of all my clients can't evenget it'cause they're old and
don't qualify.
But when they read about thestrategies and things they can
actually do, they're like, geez,I wish I would've done that.
I myself, I'm 58 and I have 13life insurance policies that are
(16:03):
all paid up when I'm 65.
So everybody does things alittle differently in their
life.
Obviously investments and realestate and all that stuff is
important too, but a lot ofdifferent diversification will
help you in the long run.
Don Drew (16:14):
Harry, one of your rules is, that the best bank is
the one that you build.
I love that phrase.
Can you share with us a littlebit more about that idea?
Harry Abrahamsen (16:23):
Yeah.
For younger people put away somemoney into an insurance policy.
If you design it correctly, it'saccumulating money that's tax
free, that grows tax free, andyou can access it tax free for
the rest of your life.
The compounding or exponentialgrowth never stops.
It will never, ever stop.
College education planning a 5,2, 9 plan.
(16:46):
This is a perfect example.
When you put money away overtime.
It's not until the end of thesecond third, you get
exponential growth, right?
And then once you get to thelast third of exponential growth
is where you really get in thatgrowth.
Well, if you have a baby and youput away some money when they're
born and you do that, and the18th year just prior to that
(17:06):
last third of growth, youliterally take all that money
and you give it to college.
And that curve resets at thatpoint in time.
And so you'll never realize thatright.
But If you understand, likeusing an insurance product where
you're building that bank, whichI've done for my children, when
they're 18, you're now takingthat money out, whether it's 40,
(17:27):
60,$80,000 and that goes to payfor college.
But that 80,000 is still in thataccount, growing and compounding
as if it still is in theaccount.
And that's because it'scollateralized as a loan.
It has to be the right policy,the right company, like all of
the right stuff for what I'mexplaining to work.
It's not an IUL or variableuniversal life or anything like
(17:49):
that.
It has to be the right stuff.
And when you understand it, it'svery powerful because then you
can actually lend that money outover and over for different
things.
For example, if a couple is intheir forties, they're going
through a tough timefinancially, their credit is
bad, they can't get a loan, alot of times we can take out
(18:10):
$20,000.
It doesn't impact your credit atall'cause it's from a policy.
You use the 20,000 to get rid ofyour credit card debt
immediately.
And because it's considered anonrecourse loan, you don't have
to pay it back technically ifyou don't want to.
So your credit will get fixed ina couple of months, no problem.
It helps you out to do differentthings, different tasks in
(18:32):
different periods of your lifethat we're not planning on.
You can also use it, like forme, where my kids are grown.
I'm having my seventhgrandchild, but if you need to
lend money, I can lend money, nomatter what, to my kids.
I don't have to go to a bank, Idon't have to liquidate my
investments.
It's another tool in youroverall mix of what you have and
your plan.
David Lowry (18:51):
I have a question about distributions.
We've talked about RMDs and soforth.
More and more, seniors areworking longer.
Their health is good.
They stay on the job longer.
Some of'em are working in theirseventies, not as many, but some
do.
Should you start taking your 4 01 ks because you qualify or
should you keep on paying in andtaking'em when you retire?
(19:13):
Any ideas on that?
Harry Abrahamsen (19:13):
We take a tax return and run it through a
report, right?
A two-page summary report.
You see if it's not bumping youup into different brackets for
different things.
So year by year, Hey, okay,what's the plan for this year?
Are you gonna work?
How much you anticipate you'regonna earn this year?
Then based on that, what aresome of the distributions we
should take?
Again, nobody really has thatcrystal ball to understand where
(19:34):
federal tax rates are gonna be.
Nobody knows where they're gonnabe next year.
I think working is a great thingfor people if they wanna do it
and they're healthy, of course.
And then just being smart aboutthe distribution.
So as long as it's not bumpingthem up into a bracket,
unnecessarily, but yeah, I thinktaking distributions, enjoying
your life, being smart from atax standpoint.
Even if you are taking a$20,000distribution out of an IRA,
(19:57):
where it's not bumping you up tothe next bracket, you don't need
it, but then you put it in anon-qualified brokerage account,
that's a great move, you know?
Don Drew (20:03):
Harry, you mentioned earlier in the program the 4%
distribution rate, which is sortof the, thing that you'll read
about most on the internet andso forth.
And I think most people havegotten in their heads that okay,
so I should be withdrawing about4% per year, or that's the most
I can, or what I should betaking out every year.
Dave Ramsey talks about it'sokay, take up to 8%.
(20:24):
What kinds of things do we needto think about when we're
looking at how much money weneed to take out per year?
Harry Abrahamsen (20:31):
Great question.
So anybody can GoogleMorningstar safe withdrawal
rates.
The interesting thing about thesafe withdrawal rates is they
change every year.
They're 3.8% this year, lastyear was 4%.
The year before that was 3.8.
So think about that.
So this four percent's a generalguideline, and the reason why it
exists is because it gives theportfolio over time, 30 years,
(20:56):
in all market conditions, likehow would it work or behave?
And the reason why people use 4%is because you need to have
reliable income, right?
So you're like, okay, if I'mtaking 4%, I need to have a
budget per month.
But what happens when you lookat Dave Ramsey and he's such a
popular person.
He's written a lot of books.
He's got a Wikipedia page, andit's amazing.
In November of 2023, heliterally doubled down on this
(21:20):
8% and he's having a battle withanother person, Dr.
Wade Fau.
Dr.
Wade Fau is one of the leadingretirement income gurus in the
United States of America, barnone.
Okay?
And these two are battling itout in the media for real.
And it's interesting'cause Dr.
Wade Fau is saying to DaveRamsey markets can be down.
(21:44):
You can't take eight whenthey're down, but for some
reason, he doesn't want torealize the fact that it's not
gonna be a consistent rate ofreturn.
You can't run an analysis on 6%every year, and I'm taking this
percentage off.
It just doesn't work like thatin the real world.
So I did an analysis.
We ran an example if you did 8%in 1980, how would that work for
(22:04):
30 years?
And it worked out okay.
Then we ran it in 1990, andafter the 10th year where it
peaked and then just dropped offright after that and that person
would've ran outta moneytechnically.
And then I ran it for the year2000 and it took nine years.
So it really depends on whereyou are and when you were
actually retire.
(22:25):
I always tell people like thatthere's a myth that you're gonna
run outta money.
You know what really happens?
You don't really ever run outtamoney.
What happens is you actuallylive in fear'cause you're gonna
sit there and that account'sgonna get to a certain point.
And then you're gonna just say,I'm not going, okay, we can't
afford it.
I'm not gonna be able to go tothe restaurant.
(22:45):
So what happens?
You're never gonna run outtamoney, you run outta lifestyle.
That's what you run out of.
Because there'll be thispsychological component that'll
say, Hey, my account's down to250, we can't go on that
vacation or we can't afford thatrestaurant, so we're just not
gonna go.
And then you basically run outtalifestyle, but you keep your
money in that account out offear.
Don Drew (23:04):
It's always important no matter how old we are, to
have a working budget.
I think what you're saying ishow important it is for us to
understand what our needs are,how much we need, and work that
in tandem with our, withdrawalrate, whatever that is.
Harry Abrahamsen (23:18):
Absolutely.
When you look at your expensesof today and you look at wealth
erosion it's not just taxes,inflation, it's planned
obsolescence, technologicalchange, fees, consumer
financing.
I did some research this morningin the state of New Jersey.
There's between 55 to 75different taxes, fees, federal,
(23:42):
state, and local in the state ofNew Jersey.
Okay?
So that's just a component wherewe live in New Jersey, believe
it or not, when we go to thesupermarket, we have to buy
bags.
And it's not just regular bags.
So there's cultural shifts.
Like if you go to a restaurantyears ago you tip the person
between 15 and 20, depending onthe level of service.
(24:02):
You go to a restaurant, at leastaround here, they want.
20, 25, 30%.
I'm like 30% that's a lot ofmoney for a tip.
So it's cultural shifts.
So your money basically iseroding very close to believe it
or not, 15% and it's not justtax inflation that most people
talk about.
David Lowry (24:18):
Man, that's really scary.
One of the things we have to bepaying attention to is
preservation of our money.
What are some strategies you cangive us to make sure that we're
preserving what we have even indifficult times.
Harry Abrahamsen (24:32):
Preserving is very important.
And if you look back 10 yearsago, even five years ago, you
could barely get 1% in a bank,right?
Recently, we've all had thefortune of having four point a
half, 5%, five and a halfpercent.
Right?
And people are like, wow.
It's like Mardi Gras, it'sfantastic.
Which is great.
One of my concerns is that ifrates do drop and it's just a
(24:55):
matter of time, I think, wheredo you put your money where it's
at least getting some type ofgrowth?
And that's where it's importantto understand even some
insurance products that are outthere where you can maybe get
some of these rates of return orsome of the protections that you
have in addition to yourinvestments.
Again, you definitely wanna lookat all options that are out
there.
There's a lot of very new,interesting products that people
(25:17):
can look at, even from along-term care planning
perspective.
The new, products out there,they're not like the old ones
where you're paying that premiumand if you have a heart attack,
you lose everything.
It's a whole different ballgame.
Don Drew (25:29):
Harry, is there anything that we're missing here
that's really criticallyimportant for people who are in
the latter part of their life?
Harry Abrahamsen (25:36):
You're not gonna always be right.
You just never know, right?
So be mindful of, okay, I wannalook at some things that are
conservative, what are myoptions?
And then talk to someone aboutall the different, various
options and then make a decisionbased on that.
It's always important no matterwhere you are even if things are
perfect., I'll give you anexample.
I met a very nice couple, andthey were 67.
(25:57):
They were perfect.
They had rental income, a bunchof CDs that were coming due and
they had this annuity that theyloved and they got it from a
very good friend of theirs.
And they came walking into myoffice and everything literally
was perfect.
And we were able to look at whatthey were doing.
And they had a good amount ofmoney.
We looked at that and they wereable to make one change where
(26:19):
that was giving them$68,000 ofincome a year and we made one
move and they were able, therewas no cost.
There were no fees.
There was literally nothing thathappened where they were able to
get$117,000 a year with the samemoney.
That's a fantastic amount ofmoney.
(26:39):
And think about that.
They're like 67 years old andthey discovered all this extra
money that they have with norisk.
So you wanna go out and explore,have a conversation, talk to
people, get a betterunderstanding of things that you
can utilize.
There's different programs outthere that don't cost money.
And one last piece of advice, Ialways say to someone if you are
self-directing your portfolioand you are adverse to a managed
(27:03):
money fee for your assets, Ialways say to them, listen, you
always wanna have'A' players onyour bench.
Because if you are taking careof things for the last 20, 30,
40 years and you're doing agreat job, the last thing you
want if you're in your lateseventies, eighties with a
health problem, go into doctorsand trying to interview a
(27:24):
planner to help you when that'shappening.
It's the worst time.
If you are at your'A' game, youknow your stuff right now.
Make sure you get people on yourbench to say, Hey, listen, I'm
not fully gonna give youeverything right now, but I just
want to test you out.
I wanna just see how it's going,because I wanna have backup
plans because lemme tell you thelast thing you wanna be dealing
(27:46):
with when you have doctors orhealth concerns is trying to
interview for a newrelationship.
David Lowry (27:51):
We've been talking to Harry Abrahamson, who has
written a book, Money Rules,Nine Rules for Massive Wealth.
Harry, tell us what's going onin your life, how we can get
hold of you, your social media,and any upcoming things.
Harry Abrahamsen (28:05):
Thanks.
We have a YouTube channel we arelaunching.
It's called Retire With Harry.
It's exclusively designed forpeople that are thinking about
retirement or already in it.
We'll be talking about all kindsof different topics and
whatever's relevant that'shappening right now.
Social media.
Instagram, that's my funaccount.
That's just me living my lifedoing the things I'm doing.
It's not related to business,but it's just all pure fun.
(28:28):
And of course our website and ifthey wanna get the book, it's on
Amazon, they can go there.
Money rules.
They can type in my name, and mybook pops up.
But yeah, that's how they canreach me.
Don Drew (28:37):
Harry, thanks for being with us today, so
appreciate you.
Harry Abrahamsen (28:39):
Thank you, David.
Thank you, Don.
I appreciate being here today.
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