May 15, 2025 • 24 mins
Facing a layoff when retirement is on the horizon can feel devastating. That carefully planned timeline suddenly collapses, leaving you wondering if your retirement dreams are still possible. But what seems like a crisis might actually be an opportunity—if you know how to navigate it.
This episode dives deep into the strategies and considerations for those experiencing job loss within five years of retirement. Rather than making panic-driven decisions, we explore how to take stock of your situation, protect what you've built, and potentially discover that retirement is closer than you think.
Many clients come to us believing retirement is years away, only to discover they already have the resources needed to make the transition. The difference lies in having a comprehensive strategy that maximizes efficiency across all aspects of your financial life. From organizing your finances to rethinking your income sources, every decision can be critical.
Ready to explore your options and determine if retirement is already within reach despite this unexpected change? Contact us for a complimentary consultation at masterplanretire.com or call 770-980-9262.
Have a topic or question you'd like Mark and Evan to address in a future episode? Email us at info@masterplanretire.com or call 770-980-9262.
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Advisory services offered through MasterPlan Retirement Consultants, Inc., a Registered Investment Advisor in the state of Georgia. Insurance, tax and commodities services offered through Fricks and Associates, Inc. dba MasterPlan Retirement Consultants. The aforementioned are affiliated companies.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Evan (00:06):
What if you're laid off right before retirement?
Hey folks, thanks for joiningus.
Welcome back to RetirementRoadmap with MasterPlan
Retirement Consultants.
My name is Evan and with me, asalways, retirement planner Mark
Fricks.
So what if you are laid offright before retirement?
Consider a time when you'reapproaching retirement.
Five years or less.
(00:27):
Retirement is on the horizon,but your timeline has been
abruptly cut short.
With the tumult in the federalemployee sphere, Mark and I have
been working through theseoptions with clients and
prospects alike.
We've seen a lot of this lately, Mark.
Mark (00:41):
A lot of emails, a lot of phone calls from our current
clients that haven't retired yetfrom the federal government.
A lot of their colleagues areasking hey, who do you work with
, who do you talk to?
Who knows the federal benefitworld?
Which is a totally different oranother layer upon already what
can be a complicated retirement.
So a lot of contact.
(01:01):
Of course we teach the federalclasses, so we're getting more
and more people coming to those.
We're actually getting invitedinto departments of the
government to teach.
You know the department headsare inviting us in.
Hey, my people need to knowwhat's going on, how it works in
retirement.
Should they pull the trigger ornot pull the trigger, timing
issues and also, as you know,just, we never know what the
(01:23):
next email is going to say thatcomes from the government into
the, you know, to the employees.
There's always a change or, youknow, maybe the courts have
ruled something.
So a lot of confusion for sure.
But even in the corporate world, you know, there's always
changes happening as well.
So we're going to talk aboutthat whole realm, I believe
today?
Evan (01:43):
Yeah, absolutely.
We're going to take a 10,000foot view and then also get a
little bit more specific onactual steps and things that you
need to focus on.
But the very first step youneed to do is take stock, be
organized.
What do you have?
Where are you?
I'm hoping that within fiveyears or so of retirement, you
have started some pre-planning.
You have maybe a timeline, somegoals and objectives in place,
(02:03):
but you definitely want to makesure that you're organized, have
a solid financial statement inplace, but number one priority
is protect what you've built, sostabilize your finances.
That comes down to cash flow.
Make sure you have an emergencyfund aim for six to twelve
months of expenses, severanceand unemployment.
Maybe you could use these as abridge.
(02:24):
Look into those possiblebenefits.
Spending; maybe you need to cutor pause non-essential spending
.
Travel, subscriptions, luxuryexpenses, these are all 10,000
foot view considerations for youif you were to have to navigate
this sort of situation.
Mark (02:42):
Maybe you can start looking for something part-time.
It may not be something youwant to do forever, of course,
but maybe just to bring in someextra money.
While you're trying to decidedo I retire, do I keep looking
for another job, or what can Ido?
A lot of times when companieslay off, they will go back and
hire folks part-time, kind of ona consulting basis, to save so
many as well.
So maybe check with somecompetition things of that
(03:04):
nature, and I'm sure we're goingto get into it.
But also, you know, how do youhandle your 401k or thrift
savings plan as well.
Evan (03:12):
Another thing that we have been..
.
It's already a huge deal inretirement, but it's becoming
more and more forefront ofpeople's minds because it's
getting more and more expensive.
That's health insurance.
So if you're under 65 and thisis a consideration for you
you're not yet eligible forMedicare.
Cobra can extend youremployer's coverage for up to 18
to 36 months.
(03:34):
However, I did speak to theexpenses of healthcare right now
.
Cobra is not cheap.
The marketplace we oftenrecommend people to check that
out to bridge gaps.
The marketplace we oftenrecommend people to check that
out to bridge gaps.
Offer cheaper and that'sabsolutely that's.
Another option is see what yourspouse's plan has to offer and
join that if possible.
So if you've got a short timeframe, you really want to have
(03:57):
some smart planning and thatgoes down primarily.
I mentioned this beforereassess your retirement timing.
Can you still retire on time?
Mark and I meet with clientsand prospects alike, always
evaluating.
This is what we're looking for,this is what we're shooting for
.
But can we retire earlier?
Can we retire later?
What does that look like?
What changes may or may notneed to take place?
Mark (04:19):
Yeah, a lot of that is just what we do from the very
beginning, which is making moneymore efficient, and we've had
so many people that have come tous and said I think I can
retire in five years and becauseof all the levers we pull and
all the strategies that weintroduce and utilize, that they
actually are able to retiresooner.
So maybe your calculations are,ooh, I can't retire, but then
(04:43):
we take a look at it and reallydo a deep dive into where you're
at and where your spending isand things of that nature, and
what can we get rid of.
Maybe you can go ahead and pullthat trigger.
Hey, you know, I was waiting.
I was going to wait two yearsor one year or three or whatever
, but based on what thesenumbers are telling us and what
we can do with those accounts,might be able to retire now.
(05:04):
Might be a kind of a bad news.
Oh now good news scenario.
Evan (05:07):
Right, and there are plenty of retirement reports you
can run that are availableonline, but you really need to
take the opportunity to speak toa financial professional,
specifically a retirementplanner, because they're going
to have so many moreconsiderations that this linear
report on your IRA or Roth orwhatever, is going to be able to
offer you Some of those options.
(05:29):
We're going to start to walkinto now, some more specific
considerations, but the firstthing you need to do is rethink
your retirement income sources,and that comes down one to being
smart about withdrawals andtiming of social security, you
know two big things that canaffect retirement a lot and of
course that incorporates is allincorporated into an income plan
(05:55):
, which is the first thing weput together for our clients as
we start working together iswhere is it coming from?
Mark (05:58):
Maybe we need to go and turn on, if it's a couple, maybe
one of those social securities,if they're eligible.
I don't like to turn them bothon early, but we look at the
numbers and then we let theclients make the final decision.
But that's certainly a sourceyou can go to.
Maybe you turn it on for sixmonths and all of a sudden get
another job.
Well, you can actually turn itoff or reset it, pay back what
(06:19):
you got, Because if you're 62 or63 and all of a sudden you get
a job and you're like, wow, I'mmaking $50,000, $100,000,
whatever it may be, you're goingto be penalized on your Social
Security.
So you need to either stop it,adjust it, let them know, or
reset it.
You have one year to reset yourSocial Security.
So, again, if you turn it on,you can actually pay it back and
(06:40):
it goes back to being a largercheck every year.
You wait, and so that comesinto play.
And then the other thing youmentioned was income standpoint,
was Social security timing?
Evan (06:51):
You don't want to be forced into taking it early if
you have other options and youreally need a financial
professional to help look atwhat kind of options might be in
front of you.
And as far as options onwithdrawals from retirement
accounts like 401ks and IRAs,there are some specific things
to consider for each of thoseaccount types.
So if you're 59 and a half orolder, you can access retirement
(07:12):
accounts without penalties.
Those 55 and up may alsowithdraw penalty free from the
401k tied to their most recentemployer.
That's a gotcha that a lot offinancial advisors will ignore.
If they just want to roll allof your money out of your 401k
and you're under 59 and a half,you might lose that option to
some liquid penalty free money.
Mark (07:32):
That right there tells me they either are not
knowledgeable or they're not afiduciary, or they're just
trying to get your money in someaccount.
Yeah, so I'm going to take allthat thrift savings plan money
or all that 401k money or 403bmoney, roll it into iras with us
so we can manage it, and thenyou're left with a penalty if
you try to access those iras.
So, very important, rule 55 andolder at your current or latest
(07:57):
job, you can actually accessthat money without a penalty.
So we always like to leave alittle bit in there.
I say a little bit we, we, wedo some calculations what you
think you will need over thenext one year, two years,
whatever the time limit ortiming may be.
So very important to understandthat.
And again, why you want to getstarted earlier with working
with someone that isknowledgeable, that is a
(08:19):
fiduciary, because they willpoint out things like that.
That can get you, canabsolutely get you.
Evan (08:27):
There are other early access options that may be
worthwhile to consider, likeSEPP, which is substantially
equal periodic payments, butthose come with long-term
commitments and limitedflexibility.
We might get into that option alittle bit later.
But have you also achieved yourfull retirement age,
considering your employerbenefits?
(08:48):
Maybe you have a pension.
If you are a federal employee,you do have a first pension and
depending on how long you'veworked will depend how much
you're going to get paid for therest of your life
post-retirement.
What benefits do you have beingoffered to you through your
employer?
Make sure that you look throughall that as well.
Mark (09:05):
Yeah, and if you're being laid off a lot of times, there
will be a package.
Negotiate the package, don'tjust, especially if you're
middle upper management, makesure you get with them and say,
okay, you know this is a have tothing.
I hate that this is happening.
But you know, is it possible topay my health insurance for the
next year or six months?
Do I get a severance package?
(09:27):
How is that paid?
Is it over time?
Is it a lump sum?
So many different things.
What about my pension?
Can I take it earlier?
If there is a pension there,like you said, with the federal
government, there are options totake it earlier, a lot of rules
around that.
So, just to sure you make gooddecisions, don't panic and again
, we hold a lot of people'shands through this kind of stuff
(09:48):
.
Evan (09:48):
Well, there are a lot of choices to make and a lot of
times folks don't know what'sbetter for them, even coming
down to survivor benefits on apension.
Sometimes you need it, somepeople might not need it, and
then they're paying forsomething for the rest of their
life that they don't actuallyand something they may not ever
use.
Mark (10:03):
If they pass away you know after the uh, the spouse then
that money's wasted as far asthat paying for that survivor
benefit.
So understand all the rulesabout that for sure another
consideration would be to avoidirreversible income moves.
Evan (10:19):
So don't rush into tapping income sources that can't be
paused or adjusted.
Instead, consider using savingspotentially home equity, but
that will get a little bit morecomplicated to consider as well
Downsizing as a more flexiblebridge strategy.
Annuities you know, once youannuitize an annuity, that's on
forever, so make sure thatthat's where it needs to be
(10:40):
before you turn it on and you'regoing to be getting the maximum
amount that you were expectingfrom that.
Annuity Pensions and also somepensions have the option to
freeze as well.
Mark (10:49):
Freeze, or also maybe a lump sum option where they can
roll the whole amount into anIRA.
Then you have the choices of howto take it, when to take it.
Maybe create your own pensionwith a specially designed
annuity that will pay out andcan be stopped.
Sometimes two.
Many of the options they couldstop.
Start maybe at least once, ormaybe just do withdrawals, as we
(11:10):
may or may not get into later.
The importance of having anincome plan is where it's coming
from, because you want a stablesource, you don't want to be
taking money out of a volatilestock market and you probably
want to put the brakes on a lotof your investments.
I don't mean go money marketnecessarily.
I just mean go moreconservative and, again, have a
(11:30):
plan for where that money iscoming from, whether it be
short-term, long-term orwhatever it may be.
I come back to that word againefficiency, the efficiencies of
your accounts.
Reassess your social security,timing, the efficiencies of your
accounts.
Evan (11:41):
Reassess your Social Security timing.
You know claiming SocialSecurity.
Maybe you feel panicked or youmight need that, you know what.
Let's just turn it on now.
I lost my job.
Maybe we can retire early.
However, you're going to cutyour benefits by up to 35%,
while in fact, delaying pastfull retirement age boosts them
(12:02):
up to 8% annually until age 70.
So, again, a layoff may force achange in plans, but talk with
a financial servicesprofessional before making any
permanent decisions.
Mark (12:15):
Yeah, and just to mention the website real quickly,
because there are a lot ofresources on our website.
We have checklists forretirement things of that nature
.
So make sure you visitmasterplanretirecom that again a
lot of episodes on there aswell.
Also, there's a button on therethat says schedule now or
schedule an appointment, andbasically what that does is
opens up our calendar to giveyou a chance to have a phone
(12:36):
chat, zoom call, a face-to-facemeeting.
If you're in the area, that wecan help you start taking a look
at where you're, at what'savailable to you, and then we
can also run some reports aswell to see if you are ready for
retirement.
It'll be a higher foot view, aswe like to say a 30,000-foot
view, but then we can take alook and say, okay, we think
(12:57):
that this might work a littlebit better.
We've got to watch out for thisor whatever, and that's all
complimentary, and so we'd beglad to do that for you.
You can also reach us at770-980-9262.
I hope you take advantage ofthat.
Evan (13:11):
I did mention the SEPP earlier substantially equal
periodic payments that allow forpenalty-free withdrawals from
IRAs at any age.
However, they're inflexible andonce you turn them on you're
locked in.
So, basically, do you know theformula off the top of your head
on how much you have to takeout?
Annually?
Mark (13:32):
It depends on your age, but it seems to be between four
and 6%.
It's like an early RMD almost.
Yeah, it's called 72T.
It's something else it's calledbecause that's where it's found
in the IRS code.
But it is a way of getting outfour to 6% from an IRA with no
penalties, but you have to do itfor at least five years and
(13:53):
even if you pass age 59 and ahalf, you still have to keep
doing it, whichever is longer,for at least five.
Exactly, at least five years oruntil you're 59 and a half.
So if you started at 50, you'vegot to do it until 59 and a
half, type of thing.
So be careful.
Again, a lot of advisors don'teven know about this.
I've got a lot of CPAs thatdon't know about this
opportunity.
So another way of working withsomeone that understands.
(14:13):
I mean, we've been in thisbusiness a long time, we've seen
a lot of different scenariosand so we have a depth of
knowledge and if we don't knowit, we know where to get that
information for you.
Evan (14:27):
A pretty substantial client base at this point and we
only have a handful of peoplethat are doing 72Ts.
It's a very specific to yourplan strategic scenario.
So again, this is somethingthat you don't want to just jump
in with a unless you'veconsulted a financial advisor,
retirement planner, specificallyfor your plan.
Mark (14:48):
Just a little caveat on that.
It is also a way of gettingsome of your IRA money into.
Roths.
You , can Can 72T out, putinto a Roth or a specially
designed tax-free account andthat's a way of doing
conversions in addition to aregular Roth conversion.
That's right.
Evan (15:05):
So the overall theme to this section is stay strategic,
not reactive.
This stage of life is aboutplanning, not panic.
Think long term and avoidingboxing yourself into a financial
corner.
You've worked hard.
Now it's time to protect whatyou've built.
Another option forconsideration: a bridge job.
(15:25):
You could stay in the workforcestrategically.
This could preserve savings,extend your benefits, redefine
what work is in retirement foryou.
So early retirement isn'tnecessarily your only path.
Explore part-time, fractional,passion-based work that brings
fulfillment and purpose withoutthe full-time grind.
Mark (15:43):
And maybe health.
Insurance.
Evan (15:44):
And maybe even some benefits.
Mark (15:46):
Depending on how many hours you work.
There's some companies outthere that will give you health
insurance with 20, 25, 30 hoursof work week, so that's a huge
benefit.
Evan (15:58):
It's incredible how much, even on reports, a little bit of
part-time income can extend aretirement on an income plan.
Mark (16:04):
Yeah, it may not be that you can save a lot of that money
, but you're covering yourexpenses and letting your other
money grow for that much moretime, and so again.
So if you're in that position,maybe we get.
We position your money in adifferent way than because
you're not pulling money from it.
So every plan is different,Every scenario is different.
It's just something we have towork numbers and walk through
(16:26):
and talk through.
Evan (16:26):
That's right, that's right .
So the last section to consideris your mindset and your
emotional stability.
Accept the shift.
If you're being laid off andyou're close to retirement and
you know what, this is not partof my plan or my time horizon
that I have been working towards.
Accept the shift and don'tpanic.
This is a transition, not afailure.
Mark (16:46):
Well, anybody that's been on this earth a little while
knows that life is not going togo the way we want it to go.
That's life.
And you have, yes, so you haveto roll with the punches.
I'm not trying to belittle this, I'm just saying that it does.
You know, if I've got, if Ihave a curve ball thrown at me,
I go looking, you know, for help.
You know if it's a personalcrisis, I might go to you know,
(17:09):
my pastor or something.
If it's a tax situation, I goto my seat.
So you go seek help mentally,emotionally, financially,
whatever that it calls for.
I've had people go tocounseling when they get laid
off and stuff to kind of workthrough their feelings and
things like that.
So don't be afraid to do that.
I know, as a guy, sometimes I'mlike I don't need help, but you
(17:32):
know, maybe you do.
Evan (17:35):
Many people work in different ways after a quote,
unquote retirement age.
Just remember, you still haveoptions.
Take care of your mental andemotional health first.
Stress at this stage can alsoaffect your decision making
Panic decisions.
You know, one of the biggestfactors to people losing money
when managing their own money isbecause they have emotional
responses.
Fear and greed One of those two.
(17:56):
Those are the biggestcontributing factors.
So the first thing that youcould do is tap into your
professional network.
Reach out to former colleagues,managers and work acquaintances
.
A simple phone call, coffeechat or message can lead to
unexpected job opportunities.
Mark (18:11):
That's where most jobs come from.
That's right.
So many people have gotten jobsfrom getting on.
It could be LinkedIn withfriends and colleagues, or
they've just kept in touch withfolks over the years.
Don't burn bridges, right.
That's one of the reasons youdon't burn bridges.
But they may not have a jobwhere they're at, but they may
have heard of hey, so-and-so isdoing this or that or the other.
So certainly get on Facebookwith friends and let them know
(18:34):
that hey, this is what's goingon.
Seek that out.
I'm sure these job boards work.
I've just never known too manypeople personally that have
gotten a job on a job board, butI know they work.
But still, those relationshipsare much more powerful.
Evan (18:49):
It seems like the more powerful jobs, the more lasting
jobs come through relationships,but of course that's.
You know that's not every case,but in the sake of posting
online, you know you would wantto take the opportunity to
polish your digital presence alittle bit, update your LinkedIn
profile or create one if youhaven't done so yet.
A professional online presenceacts as your modern day resume
(19:10):
and it opens doors beyond yourimmediate circle, so that could
be helpful.
Mark (19:15):
And depending on what level of job you have or that
you're seeking.
I mean, many folks now arehiring people, of course, to
punch up that resume.
I wouldn't know what to do whenit comes to social media If I
had to look for a job there's somuch out there and so many ways
to present yourself I'dprobably have to hire somebody
to come in and Ever sinceMicrosoft got rid of Clippy.
Evan (19:34):
Now I have no idea how to update my resume.
Mark (19:36):
I have no idea what that is.
Evan (19:38):
You don't even know who Clippy is.
That's a cartoon character.
Mark (19:41):
That is, it is actually.
Evan (19:43):
Another consideration is to start before you're forced to
.
If you're even slightly unsureabout your job security, begin
networking now and alsoeverything we've discussed
before.
Start organizing and takingstock of where you are.
Don't wait for a layoff tostart making career connections
or exploring your options.
That's a great point.
Mark (20:01):
I've heard of many of our clients that, hey, this is
rumbling in our company, we justgot bought or whatever, and
they go and start puttingfeelers out and finding the next
opportunity.
Or again, can I retire, yeah,so come back to that question
again.
Evan (20:18):
And Mark mentioned a little bit of this earlier.
Lean on your personal circle.
Friends can offer emotionalsupport, shared experiences and
helpful advice.
Their encouragement might bethe confidence boost you need to
move forward, or even moveforward boldly.
And I would also say, use thetime to pause and reflect.
You know, if you have afinancial cushion, consider
(20:39):
taking a short breather.
Use this unexpected break toreflect on your purpose, explore
passions and realign your nextcareer or life step with what
matters the most to you.
Mark (20:49):
Yeah, it sounds difficult to do that because you're like I
know when I've been.
You know when I was muchyounger and was between jobs or
whatever.
It's a little bit of a panicinitially, but really just grab
hold of that and then just say,okay, you know, let's do a reset
.
Let's think about was I evenhappy doing what I was doing?
Maybe I can afford to pick upsome online classes or whatever,
(21:12):
brush up some skills, add someskills or whatever.
So it is a good time to kind ofreset, refocus and again, you
know those people around you,whether they be professionals or
friends or whatever, can reallygive you that help.
You know the help that you needto.
Let's think about this.
Evan (21:31):
And if the concept of pausing for a minute in a
quote-unquote crisis whereyou're about to lose your job,
if the idea of pausing for aminute seems completely foreign
or impossible and maybe you sayI don't have that kind of
savings ready, I don't have thatkind of nest egg where I can
afford to not hit the groundrunning immediately, then that's
(21:52):
also a great opportunity.
Maybe you should speak to afinancial professional, discuss
budgeting, discuss how to saveand move forward for your own
retirement.
We mentioned so many differentthings, from employer benefits
and options that you can do withyour withdrawals, timing of all
of these things and how theyall work together.
It's critical that youunderstand how each area works
(22:14):
with other areas, Because whenyou make a change in one area,
it's inevitably going to affectother areas.
You need to speak with aretirement planner, especially
if you're close or within fiveor 10 years to retirement.
Beautiful time to sit down, getorganized.
What are my goals?
What are my dreams?
Dreams?
What am I afraid of?
How do I get to where I?
Mark (22:33):
need to go.
Yeah, I think half our job,evan, as you know, is almost
counseling.
It really is calming folks down, letting them talk, letting you
know, hearing what they've gotto say and then giving them the
assurances.
Well, let's take a look at this.
We really think that that wecan get the situation, get our
heads heads wrapped around itand really maybe find a way to
(22:55):
get you retired or at leastgetting closer to that point.
Again, our experience has shownthat on their own, folks are
not able to be as efficient.
You can Google all you want andit will give you lots of
information, some of it bad,some of it good, some of it does
not.
Most of it does not apply toyou.
What is your situation and howcan we further improve what
(23:18):
you've got to make it moreefficient?
I've used that word severaltimes in this episode, but we
need to squeeze as much lemonout of that lemon as we can, and
I think there's more in thatlemon than you think there is
than you think there is.
Evan (23:33):
I think more folks more often than not folks when they
come to us to look at their ownretirement options, they can,
for the most part, don't realizethat they actually have the
ability to retire.
You just have to walk throughthe process and have your case
analyzed, and if you're not ableto, then we'll show you the
steps to get to where you needto be.
Mark (23:52):
Yeah, I hope you'll plan to come see us take advantage of
the complimentary consultation.
Thank you for joining us today.
Remember, until we see eachother again, plan well and
prosper, take care.
Speaker 3 (24:03):
This was Retirement Roadmap Radio with Mark Fricks
of Master Plan RetirementConsultants.
To schedule a complimentaryconsultation, go to
masterplanretirecom or call770-980-9262.
Thanks for listening andremember plan well and prosper.
Speaker 4 (24:22):
All matters discussed during this show are for
informational purposes only.
Each individual situation mayvary and the opinions expressed
here may not apply to everyone.
Materials presented arebelieved to be from reliable
sources and no representationscan be made as to its accuracy.
All ideas and informationshould be discussed in detail
with one of our qualifiedrepresentatives prior to
implementation.
Advisory services offered byMaster Plan Retirement
Consultants.
A registered investment advisorin the state of Georgia, mark
Fricks, and Master PlanRetirement Consultants are not
(24:44):
affiliated with or endorsed bythe Social Security
Administration or any othergovernment agency.
What if you're laid off right before retirement?
Hey folks, thanks for joiningus.
Welcome back to RetirementRoadmap with MasterPlan
Retirement Consultants.
My name is Evan and with me, asalways, retirement planner Mark
Fricks.
So what if you are laid offright before retirement?
Consider a time when you'reapproaching retirement.
Five years or less.
(00:27):
Retirement is on the horizon,but your timeline has been
abruptly cut short.
With the tumult in the federalemployee sphere, Mark and I have
been working through theseoptions with clients and
prospects alike.
We've seen a lot of this lately, Mark.
Mark (00:41):
A lot of emails, a lot of phone calls from our current
clients that haven't retired yetfrom the federal government.
A lot of their colleagues areasking hey, who do you work with
, who do you talk to?
Who knows the federal benefitworld?
Which is a totally different oranother layer upon already what
can be a complicated retirement.
So a lot of contact.
(01:01):
Of course we teach the federalclasses, so we're getting more
and more people coming to those.
We're actually getting invitedinto departments of the
government to teach.
You know the department headsare inviting us in.
Hey, my people need to knowwhat's going on, how it works in
retirement.
Should they pull the trigger ornot pull the trigger, timing
issues and also, as you know,just, we never know what the
(01:23):
next email is going to say thatcomes from the government into
the, you know, to the employees.
There's always a change or, youknow, maybe the courts have
ruled something.
So a lot of confusion for sure.
But even in the corporate world, you know, there's always
changes happening as well.
So we're going to talk aboutthat whole realm, I believe
today?
Evan (01:43):
Yeah, absolutely.
We're going to take a 10,000foot view and then also get a
little bit more specific onactual steps and things that you
need to focus on.
But the very first step youneed to do is take stock, be
organized.
What do you have?
Where are you?
I'm hoping that within fiveyears or so of retirement, you
have started some pre-planning.
You have maybe a timeline, somegoals and objectives in place,
(02:03):
but you definitely want to makesure that you're organized, have
a solid financial statement inplace, but number one priority
is protect what you've built, sostabilize your finances.
That comes down to cash flow.
Make sure you have an emergencyfund aim for six to twelve
months of expenses, severanceand unemployment.
Maybe you could use these as abridge.
(02:24):
Look into those possiblebenefits.
Spending; maybe you need to cutor pause non-essential spending
.
Travel, subscriptions, luxuryexpenses, these are all 10,000
foot view considerations for youif you were to have to navigate
this sort of situation.
Mark (02:42):
Maybe you can start looking for something part-time.
It may not be something youwant to do forever, of course,
but maybe just to bring in someextra money.
While you're trying to decidedo I retire, do I keep looking
for another job, or what can Ido?
A lot of times when companieslay off, they will go back and
hire folks part-time, kind of ona consulting basis, to save so
many as well.
So maybe check with somecompetition things of that
(03:04):
nature, and I'm sure we're goingto get into it.
But also, you know, how do youhandle your 401k or thrift
savings plan as well.
Evan (03:12):
Another thing that we have been..
.
It's already a huge deal inretirement, but it's becoming
more and more forefront ofpeople's minds because it's
getting more and more expensive.
That's health insurance.
So if you're under 65 and thisis a consideration for you
you're not yet eligible forMedicare.
Cobra can extend youremployer's coverage for up to 18
to 36 months.
(03:34):
However, I did speak to theexpenses of healthcare right now
.
Cobra is not cheap.
The marketplace we oftenrecommend people to check that
out to bridge gaps.
The marketplace we oftenrecommend people to check that
out to bridge gaps.
Offer cheaper and that'sabsolutely that's.
Another option is see what yourspouse's plan has to offer and
join that if possible.
So if you've got a short timeframe, you really want to have
(03:57):
some smart planning and thatgoes down primarily.
I mentioned this beforereassess your retirement timing.
Can you still retire on time?
Mark and I meet with clientsand prospects alike, always
evaluating.
This is what we're looking for,this is what we're shooting for
.
But can we retire earlier?
Can we retire later?
What does that look like?
What changes may or may notneed to take place?
Mark (04:19):
Yeah, a lot of that is just what we do from the very
beginning, which is making moneymore efficient, and we've had
so many people that have come tous and said I think I can
retire in five years and becauseof all the levers we pull and
all the strategies that weintroduce and utilize, that they
actually are able to retiresooner.
So maybe your calculations are,ooh, I can't retire, but then
(04:43):
we take a look at it and reallydo a deep dive into where you're
at and where your spending isand things of that nature, and
what can we get rid of.
Maybe you can go ahead and pullthat trigger.
Hey, you know, I was waiting.
I was going to wait two yearsor one year or three or whatever
, but based on what thesenumbers are telling us and what
we can do with those accounts,might be able to retire now.
(05:04):
Might be a kind of a bad news.
Oh now good news scenario.
Evan (05:07):
Right, and there are plenty of retirement reports you
can run that are availableonline, but you really need to
take the opportunity to speak toa financial professional,
specifically a retirementplanner, because they're going
to have so many moreconsiderations that this linear
report on your IRA or Roth orwhatever, is going to be able to
offer you Some of those options.
(05:29):
We're going to start to walkinto now, some more specific
considerations, but the firstthing you need to do is rethink
your retirement income sources,and that comes down one to being
smart about withdrawals andtiming of social security, you
know two big things that canaffect retirement a lot and of
course that incorporates is allincorporated into an income plan
(05:55):
, which is the first thing weput together for our clients as
we start working together iswhere is it coming from?
Mark (05:58):
Maybe we need to go and turn on, if it's a couple, maybe
one of those social securities,if they're eligible.
I don't like to turn them bothon early, but we look at the
numbers and then we let theclients make the final decision.
But that's certainly a sourceyou can go to.
Maybe you turn it on for sixmonths and all of a sudden get
another job.
Well, you can actually turn itoff or reset it, pay back what
(06:19):
you got, Because if you're 62 or63 and all of a sudden you get
a job and you're like, wow, I'mmaking $50,000, $100,000,
whatever it may be, you're goingto be penalized on your Social
Security.
So you need to either stop it,adjust it, let them know, or
reset it.
You have one year to reset yourSocial Security.
So, again, if you turn it on,you can actually pay it back and
(06:40):
it goes back to being a largercheck every year.
You wait, and so that comesinto play.
And then the other thing youmentioned was income standpoint,
was Social security timing?
Evan (06:51):
You don't want to be forced into taking it early if
you have other options and youreally need a financial
professional to help look atwhat kind of options might be in
front of you.
And as far as options onwithdrawals from retirement
accounts like 401ks and IRAs,there are some specific things
to consider for each of thoseaccount types.
So if you're 59 and a half orolder, you can access retirement
(07:12):
accounts without penalties.
Those 55 and up may alsowithdraw penalty free from the
401k tied to their most recentemployer.
That's a gotcha that a lot offinancial advisors will ignore.
If they just want to roll allof your money out of your 401k
and you're under 59 and a half,you might lose that option to
some liquid penalty free money.
Mark (07:32):
That right there tells me they either are not
knowledgeable or they're not afiduciary, or they're just
trying to get your money in someaccount.
Yeah, so I'm going to take allthat thrift savings plan money
or all that 401k money or 403bmoney, roll it into iras with us
so we can manage it, and thenyou're left with a penalty if
you try to access those iras.
So, very important, rule 55 andolder at your current or latest
(07:57):
job, you can actually accessthat money without a penalty.
So we always like to leave alittle bit in there.
I say a little bit we, we, wedo some calculations what you
think you will need over thenext one year, two years,
whatever the time limit ortiming may be.
So very important to understandthat.
And again, why you want to getstarted earlier with working
with someone that isknowledgeable, that is a
(08:19):
fiduciary, because they willpoint out things like that.
That can get you, canabsolutely get you.
Evan (08:27):
There are other early access options that may be
worthwhile to consider, likeSEPP, which is substantially
equal periodic payments, butthose come with long-term
commitments and limitedflexibility.
We might get into that option alittle bit later.
But have you also achieved yourfull retirement age,
considering your employerbenefits?
(08:48):
Maybe you have a pension.
If you are a federal employee,you do have a first pension and
depending on how long you'veworked will depend how much
you're going to get paid for therest of your life
post-retirement.
What benefits do you have beingoffered to you through your
employer?
Make sure that you look throughall that as well.
Mark (09:05):
Yeah, and if you're being laid off a lot of times, there
will be a package.
Negotiate the package, don'tjust, especially if you're
middle upper management, makesure you get with them and say,
okay, you know this is a have tothing.
I hate that this is happening.
But you know, is it possible topay my health insurance for the
next year or six months?
Do I get a severance package?
(09:27):
How is that paid?
Is it over time?
Is it a lump sum?
So many different things.
What about my pension?
Can I take it earlier?
If there is a pension there,like you said, with the federal
government, there are options totake it earlier, a lot of rules
around that.
So, just to sure you make gooddecisions, don't panic and again
, we hold a lot of people'shands through this kind of stuff
(09:48):
.
Evan (09:48):
Well, there are a lot of choices to make and a lot of
times folks don't know what'sbetter for them, even coming
down to survivor benefits on apension.
Sometimes you need it, somepeople might not need it, and
then they're paying forsomething for the rest of their
life that they don't actuallyand something they may not ever
use.
Mark (10:03):
If they pass away you know after the uh, the spouse then
that money's wasted as far asthat paying for that survivor
benefit.
So understand all the rulesabout that for sure another
consideration would be to avoidirreversible income moves.
Evan (10:19):
So don't rush into tapping income sources that can't be
paused or adjusted.
Instead, consider using savingspotentially home equity, but
that will get a little bit morecomplicated to consider as well
Downsizing as a more flexiblebridge strategy.
Annuities you know, once youannuitize an annuity, that's on
forever, so make sure thatthat's where it needs to be
(10:40):
before you turn it on and you'regoing to be getting the maximum
amount that you were expectingfrom that.
Annuity Pensions and also somepensions have the option to
freeze as well.
Mark (10:49):
Freeze, or also maybe a lump sum option where they can
roll the whole amount into anIRA.
Then you have the choices of howto take it, when to take it.
Maybe create your own pensionwith a specially designed
annuity that will pay out andcan be stopped.
Sometimes two.
Many of the options they couldstop.
Start maybe at least once, ormaybe just do withdrawals, as we
(11:10):
may or may not get into later.
The importance of having anincome plan is where it's coming
from, because you want a stablesource, you don't want to be
taking money out of a volatilestock market and you probably
want to put the brakes on a lotof your investments.
I don't mean go money marketnecessarily.
I just mean go moreconservative and, again, have a
(11:30):
plan for where that money iscoming from, whether it be
short-term, long-term orwhatever it may be.
I come back to that word againefficiency, the efficiencies of
your accounts.
Reassess your social security,timing, the efficiencies of your
accounts.
Evan (11:41):
Reassess your Social Security timing.
You know claiming SocialSecurity.
Maybe you feel panicked or youmight need that, you know what.
Let's just turn it on now.
I lost my job.
Maybe we can retire early.
However, you're going to cutyour benefits by up to 35%,
while in fact, delaying pastfull retirement age boosts them
(12:02):
up to 8% annually until age 70.
So, again, a layoff may force achange in plans, but talk with
a financial servicesprofessional before making any
permanent decisions.
Mark (12:15):
Yeah, and just to mention the website real quickly,
because there are a lot ofresources on our website.
We have checklists forretirement things of that nature
.
So make sure you visitmasterplanretirecom that again a
lot of episodes on there aswell.
Also, there's a button on therethat says schedule now or
schedule an appointment, andbasically what that does is
opens up our calendar to giveyou a chance to have a phone
(12:36):
chat, zoom call, a face-to-facemeeting.
If you're in the area, that wecan help you start taking a look
at where you're, at what'savailable to you, and then we
can also run some reports aswell to see if you are ready for
retirement.
It'll be a higher foot view, aswe like to say a 30,000-foot
view, but then we can take alook and say, okay, we think
(12:57):
that this might work a littlebit better.
We've got to watch out for thisor whatever, and that's all
complimentary, and so we'd beglad to do that for you.
You can also reach us at770-980-9262.
I hope you take advantage ofthat.
Evan (13:11):
I did mention the SEPP earlier substantially equal
periodic payments that allow forpenalty-free withdrawals from
IRAs at any age.
However, they're inflexible andonce you turn them on you're
locked in.
So, basically, do you know theformula off the top of your head
on how much you have to takeout?
Annually?
Mark (13:32):
It depends on your age, but it seems to be between four
and 6%.
It's like an early RMD almost.
Yeah, it's called 72T.
It's something else it's calledbecause that's where it's found
in the IRS code.
But it is a way of getting outfour to 6% from an IRA with no
penalties, but you have to do itfor at least five years and
(13:53):
even if you pass age 59 and ahalf, you still have to keep
doing it, whichever is longer,for at least five.
Exactly, at least five years oruntil you're 59 and a half.
So if you started at 50, you'vegot to do it until 59 and a
half, type of thing.
So be careful.
Again, a lot of advisors don'teven know about this.
I've got a lot of CPAs thatdon't know about this
opportunity.
So another way of working withsomeone that understands.
(14:13):
I mean, we've been in thisbusiness a long time, we've seen
a lot of different scenariosand so we have a depth of
knowledge and if we don't knowit, we know where to get that
information for you.
Evan (14:27):
A pretty substantial client base at this point and we
only have a handful of peoplethat are doing 72Ts.
It's a very specific to yourplan strategic scenario.
So again, this is somethingthat you don't want to just jump
in with a unless you'veconsulted a financial advisor,
retirement planner, specificallyfor your plan.
Mark (14:48):
Just a little caveat on that.
It is also a way of gettingsome of your IRA money into.
Roths.
You , can Can 72T out, putinto a Roth or a specially
designed tax-free account andthat's a way of doing
conversions in addition to aregular Roth conversion.
That's right.
Evan (15:05):
So the overall theme to this section is stay strategic,
not reactive.
This stage of life is aboutplanning, not panic.
Think long term and avoidingboxing yourself into a financial
corner.
You've worked hard.
Now it's time to protect whatyou've built.
Another option forconsideration: a bridge job.
(15:25):
You could stay in the workforcestrategically.
This could preserve savings,extend your benefits, redefine
what work is in retirement foryou.
So early retirement isn'tnecessarily your only path.
Explore part-time, fractional,passion-based work that brings
fulfillment and purpose withoutthe full-time grind.
Mark (15:43):
And maybe health.
Insurance.
Evan (15:44):
And maybe even some benefits.
Mark (15:46):
Depending on how many hours you work.
There's some companies outthere that will give you health
insurance with 20, 25, 30 hoursof work week, so that's a huge
benefit.
Evan (15:58):
It's incredible how much, even on reports, a little bit of
part-time income can extend aretirement on an income plan.
Mark (16:04):
Yeah, it may not be that you can save a lot of that money
, but you're covering yourexpenses and letting your other
money grow for that much moretime, and so again.
So if you're in that position,maybe we get.
We position your money in adifferent way than because
you're not pulling money from it.
So every plan is different,Every scenario is different.
It's just something we have towork numbers and walk through
(16:26):
and talk through.
Evan (16:26):
That's right, that's right .
So the last section to consideris your mindset and your
emotional stability.
Accept the shift.
If you're being laid off andyou're close to retirement and
you know what, this is not partof my plan or my time horizon
that I have been working towards.
Accept the shift and don'tpanic.
This is a transition, not afailure.
Mark (16:46):
Well, anybody that's been on this earth a little while
knows that life is not going togo the way we want it to go.
That's life.
And you have, yes, so you haveto roll with the punches.
I'm not trying to belittle this, I'm just saying that it does.
You know, if I've got, if Ihave a curve ball thrown at me,
I go looking, you know, for help.
You know if it's a personalcrisis, I might go to you know,
(17:09):
my pastor or something.
If it's a tax situation, I goto my seat.
So you go seek help mentally,emotionally, financially,
whatever that it calls for.
I've had people go tocounseling when they get laid
off and stuff to kind of workthrough their feelings and
things like that.
So don't be afraid to do that.
I know, as a guy, sometimes I'mlike I don't need help, but you
(17:32):
know, maybe you do.
Evan (17:35):
Many people work in different ways after a quote,
unquote retirement age.
Just remember, you still haveoptions.
Take care of your mental andemotional health first.
Stress at this stage can alsoaffect your decision making
Panic decisions.
You know, one of the biggestfactors to people losing money
when managing their own money isbecause they have emotional
responses.
Fear and greed One of those two.
(17:56):
Those are the biggestcontributing factors.
So the first thing that youcould do is tap into your
professional network.
Reach out to former colleagues,managers and work acquaintances
.
A simple phone call, coffeechat or message can lead to
unexpected job opportunities.
Mark (18:11):
That's where most jobs come from.
That's right.
So many people have gotten jobsfrom getting on.
It could be LinkedIn withfriends and colleagues, or
they've just kept in touch withfolks over the years.
Don't burn bridges, right.
That's one of the reasons youdon't burn bridges.
But they may not have a jobwhere they're at, but they may
have heard of hey, so-and-so isdoing this or that or the other.
So certainly get on Facebookwith friends and let them know
(18:34):
that hey, this is what's goingon.
Seek that out.
I'm sure these job boards work.
I've just never known too manypeople personally that have
gotten a job on a job board, butI know they work.
But still, those relationshipsare much more powerful.
Evan (18:49):
It seems like the more powerful jobs, the more lasting
jobs come through relationships,but of course that's.
You know that's not every case,but in the sake of posting
online, you know you would wantto take the opportunity to
polish your digital presence alittle bit, update your LinkedIn
profile or create one if youhaven't done so yet.
A professional online presenceacts as your modern day resume
(19:10):
and it opens doors beyond yourimmediate circle, so that could
be helpful.
Mark (19:15):
And depending on what level of job you have or that
you're seeking.
I mean, many folks now arehiring people, of course, to
punch up that resume.
I wouldn't know what to do whenit comes to social media If I
had to look for a job there's somuch out there and so many ways
to present yourself I'dprobably have to hire somebody
to come in and Ever sinceMicrosoft got rid of Clippy.
Evan (19:34):
Now I have no idea how to update my resume.
Mark (19:36):
I have no idea what that is.
Evan (19:38):
You don't even know who Clippy is.
That's a cartoon character.
Mark (19:41):
That is, it is actually.
Evan (19:43):
Another consideration is to start before you're forced to
.
If you're even slightly unsureabout your job security, begin
networking now and alsoeverything we've discussed
before.
Start organizing and takingstock of where you are.
Don't wait for a layoff tostart making career connections
or exploring your options.
That's a great point.
Mark (20:01):
I've heard of many of our clients that, hey, this is
rumbling in our company, we justgot bought or whatever, and
they go and start puttingfeelers out and finding the next
opportunity.
Or again, can I retire, yeah,so come back to that question
again.
Evan (20:18):
And Mark mentioned a little bit of this earlier.
Lean on your personal circle.
Friends can offer emotionalsupport, shared experiences and
helpful advice.
Their encouragement might bethe confidence boost you need to
move forward, or even moveforward boldly.
And I would also say, use thetime to pause and reflect.
You know, if you have afinancial cushion, consider
(20:39):
taking a short breather.
Use this unexpected break toreflect on your purpose, explore
passions and realign your nextcareer or life step with what
matters the most to you.
Mark (20:49):
Yeah, it sounds difficult to do that because you're like I
know when I've been.
You know when I was muchyounger and was between jobs or
whatever.
It's a little bit of a panicinitially, but really just grab
hold of that and then just say,okay, you know, let's do a reset
.
Let's think about was I evenhappy doing what I was doing?
Maybe I can afford to pick upsome online classes or whatever,
(21:12):
brush up some skills, add someskills or whatever.
So it is a good time to kind ofreset, refocus and again, you
know those people around you,whether they be professionals or
friends or whatever, can reallygive you that help.
You know the help that you needto.
Let's think about this.
Evan (21:31):
And if the concept of pausing for a minute in a
quote-unquote crisis whereyou're about to lose your job,
if the idea of pausing for aminute seems completely foreign
or impossible and maybe you sayI don't have that kind of
savings ready, I don't have thatkind of nest egg where I can
afford to not hit the groundrunning immediately, then that's
(21:52):
also a great opportunity.
Maybe you should speak to afinancial professional, discuss
budgeting, discuss how to saveand move forward for your own
retirement.
We mentioned so many differentthings, from employer benefits
and options that you can do withyour withdrawals, timing of all
of these things and how theyall work together.
It's critical that youunderstand how each area works
(22:14):
with other areas, Because whenyou make a change in one area,
it's inevitably going to affectother areas.
You need to speak with aretirement planner, especially
if you're close or within fiveor 10 years to retirement.
Beautiful time to sit down, getorganized.
What are my goals?
What are my dreams?
Dreams?
What am I afraid of?
How do I get to where I?
Mark (22:33):
need to go.
Yeah, I think half our job,evan, as you know, is almost
counseling.
It really is calming folks down, letting them talk, letting you
know, hearing what they've gotto say and then giving them the
assurances.
Well, let's take a look at this.
We really think that that wecan get the situation, get our
heads heads wrapped around itand really maybe find a way to
(22:55):
get you retired or at leastgetting closer to that point.
Again, our experience has shownthat on their own, folks are
not able to be as efficient.
You can Google all you want andit will give you lots of
information, some of it bad,some of it good, some of it does
not.
Most of it does not apply toyou.
What is your situation and howcan we further improve what
(23:18):
you've got to make it moreefficient?
I've used that word severaltimes in this episode, but we
need to squeeze as much lemonout of that lemon as we can, and
I think there's more in thatlemon than you think there is
than you think there is.
Evan (23:33):
I think more folks more often than not folks when they
come to us to look at their ownretirement options, they can,
for the most part, don't realizethat they actually have the
ability to retire.
You just have to walk throughthe process and have your case
analyzed, and if you're not ableto, then we'll show you the
steps to get to where you needto be.
Mark (23:52):
Yeah, I hope you'll plan to come see us take advantage of
the complimentary consultation.
Thank you for joining us today.
Remember, until we see eachother again, plan well and
prosper, take care.
Speaker 3 (24:03):
This was Retirement Roadmap Radio with Mark Fricks
of Master Plan RetirementConsultants.
To schedule a complimentaryconsultation, go to
masterplanretirecom or call770-980-9262.
Thanks for listening andremember plan well and prosper.
Speaker 4 (24:22):
All matters discussed during this show are for
informational purposes only.
Each individual situation mayvary and the opinions expressed
here may not apply to everyone.
Materials presented arebelieved to be from reliable
sources and no representationscan be made as to its accuracy.
All ideas and informationshould be discussed in detail
with one of our qualifiedrepresentatives prior to
implementation.
Advisory services offered byMaster Plan Retirement
Consultants.
A registered investment advisorin the state of Georgia, mark
Fricks, and Master PlanRetirement Consultants are not
(24:44):
affiliated with or endorsed bythe Social Security
Administration or any othergovernment agency.
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