Simply Money

Episode Transcript

Speaker 1 (00:05):
Tonight, how to align the hidden forces that shape every
single vision. You're listening to Simple Money, presented by all
Worth Financial. I'm Bob sponseller along with Steve Ruby. So
you run the numbers. The spreadsheet says you can retire,
the portfolio says you're fine, but still you're not pulling
the trigger.

Speaker 2 (00:26):
Why or maybe the numbers.

Speaker 1 (00:28):
Say so, but your gut says, well, life short, let's
buy the beach house.

Speaker 2 (00:34):
That tension. It's not about the math, it's about.

Speaker 1 (00:38):
Something else, Steve, Let's get into the something else tonight.

Speaker 3 (00:41):
I mean, there's a lot of emotion tied to money.
That's the reality of the situation here. Retiring early, it's
not just about assets. It's about whether or not you're
ready to not feel needed. A lot of the times
are are our income earning is tied to our our
sense of purpose. I would say so a lot of

(01:01):
successful people say that they want to retire, but deep
down they're afraid of losing their purpose. You know, there
can be guilt as well, especially around inheritance. So we've
seen people not spend inherited money because it wasn't theirs. Emotionally,
it almost feels like those dollars belong to their parents
and they should forever. But on the flip side that

(01:24):
that same emotions tied to money can lead to overspending.
My thinking about it like this. You know, maybe your
parents never got to spend the money that they accumulated,
so they think, you know, the person that inherited thinks,
you know, I'm going to I'm going to enjoy the
money here. So it's rarely rational decisions are made around money,

(01:45):
especially when things happen quickly.

Speaker 4 (01:47):
I would say, well, and.

Speaker 1 (01:49):
As you go, as you go through both of those scenarios,
I'm thinking, I'm thinking of specific clients in mine that
I've worked with for years and years that are dealing
with both of these emotions. Folks that can retire and
they just haven't thought about what they're gonna do all day.
And I've had those kind of conversations they're they're literally

(02:09):
afraid to walk out the door because they got nothing
else to do. That's not a lot of the time.
It's rarely, but it does happen. And I've also got
I'm thinking of the daughter of a client who was
extremely responsible heavy saver, probably didn't do enough spending on
fun things. You know while they were raising their kids

(02:33):
and whatever have you. Well that you know that couple
passes away and lo and behold the daughters ready to
just fire on all cylinders and give it away, spend
it whatever, to the point where I have to talk
her off the ledge every single year and make sure
you know, hey, your dad left you this money. You're
in a great position to be even to be able

(02:54):
to retire, but not if you continue down the road
you're going right now. So these emotions are real, and
that's the same response I get from her every year. Well,
you know, we didn't get to do this and that,
and I want my kids to be able to do
all that, So I'm going to spend it, give it,
what have you. These emotions are very rear. I see
it real, I see it happen often.

Speaker 3 (03:15):
Yeah, it's a big part of our job is helping
people navigate the emotional side of money. This is a
good opportunity to bring value by, you know, painting the
picture of the financial plan and showing her that potentially
spending at the same level that she is, would you know,
maybe create a situation where she runs out of money
when she's I don't know, seventy nine years old. Sometimes

(03:37):
I can light a fire up underneath people. Not always,
but sometimes.

Speaker 2 (03:40):
Well, it's just it's like.

Speaker 1 (03:42):
A lot of things, and like everything in moderation, you
can usually find a happy medium here that you know,
you can have a little fun but be responsible at
the same time. All right, let's talk about another big
topic that comes up or emotion that people feel. Money
is social. You know, whether or not we admit it
or not, we are all constantly comparing ourselves to other people.

(04:04):
You know, that second home, that fancy car, that gift
to your kids. It's never just about what you want,
It's about how you feel compared to folks in your
social circle.

Speaker 3 (04:18):
Yeah, I mean, the pressure is certainly real, and especially
in this day and age of social media, where you're
seeing only the biggest and best and most exciting aspects
of people's lives and the experiences they have and the
things that they own. So it's easy to be constantly
comparing to others. You know, maybe you see friends that

(04:42):
are going beyond just some small gifts to adult children.
Obviously we don't want our own children to struggle, but
if they're buying houses for kids and grandkids and paying
for college, for their grandkids. You know, obviously not all
of us have the means to be able to go
to that level of of help and assistance for our families,

(05:02):
But looking at that and thinking about it on your
own perspective can be very challenging.

Speaker 1 (05:08):
You're listening to simply money presented by all Worth Financial.
I'm Bob sponseller along with Steve Ruby. Steve another big
emotional topic that we run into quite often, and that's
money is generational. And by that I mean whether or
not you realize it or aware of it, you're probably
living out some version of the financial story you grew

(05:31):
up with.

Speaker 3 (05:33):
Yeah, so if you were raised by depression erab parents,
you might be a little bit more wired for scarcity,
even if you have plenty. If you saw your parents
spend freely, you might associate money with joy and maybe
even have some reckless habits. I mean, it certainly is

(05:53):
interesting the dynamic that people have with money, you know,
the emotions tied to it, oftentimes.

Speaker 4 (05:58):
Tied to how they were raised.

Speaker 3 (06:00):
I've seen millionaires agon eyes over spending two hundred dollars
on a nice dinner once a year because their parents'
voice is in their head. Saying don't waste money. You know,
they could see that that that little experiences as potentially wasteful.
Opposite end of that are are folks who might be
generous to a fault because they had the opposite situation

(06:22):
growing up. You know, they're they're they're been They've been
shaped by how they were raised, and that's going to
drive the behavior and how they handle their money.

Speaker 1 (06:32):
Yeah, and that this is an important part of what
we do when clients come in and have these review
meetings or you know, initial plans and all that. It's
not just about the dollars and cents. It's getting our
arms around the why behind decisions that are being made.
And oftentimes it feels like we're not just running numbers

(06:53):
and doing tax planning. We really do need and and
and often do counsel people through the motions around their money,
you know, leading to the next point. Money is logical.
There's a part of this that does need to be logical,
and that's where we do. We get into the spreadsheets,
the tax withdrawal rates, the tax projections.

Speaker 2 (07:14):
That's what most.

Speaker 1 (07:14):
People think of when they think of financial planning, but
logic is often used to just justify a decision you've
already made emotionally. I don't know about you, Steve, but
I've had meetings where, you know, somebody comes in and
they really already made the decision to do something. They
want me to sit down and run all these numbers

(07:36):
and create a plan to kind of fit the square
peg into the round hole so they can feel like
they're doing something responsible.

Speaker 2 (07:44):
Have you ever had meetings like that.

Speaker 4 (07:46):
All the time?

Speaker 3 (07:47):
Yeah, And honestly sometimes it's it's it's totally fine to
come in as as a client and have an idea,
an agenda that you know what you want to do
that I mean, that's that's that's why you pay your
advisor to help you answer those questions. But from my perspective,
you know, when somebody has a robust financial plan, when

(08:08):
we have a solid baseline that has an understanding of
time frames, of longevity of spending, goals, of how money
is invested, what those dollars, what those dollars are invested towards,
I mean, what goal they're tied to, that can give
us the opportunity to run some different scenarios like what
if you do X, Y or Z, So that could

(08:29):
be collecting Social Security now a little later or even later.
That could be paying a home off with some inherited
money versus keeping a mortgage and investing with it. And
sometimes people come in and they have that agenda. They
know that they you know, they're just really uncomfortable with
the idea of tapping into assets, so they want to
collect social Security now, even though it's early.

Speaker 4 (08:49):
I had this happen last week.

Speaker 3 (08:52):
The thing is, though, is that they said, Steve, are
you gonna lecture me about this? And I said no,
because we've built a plan and it shows that, yes,
you would be better off financially if longevity is on
your side and you deferred Social Security, But it also
doesn't move the needle. Your chance of success is still
over ninety nine percent. So whatever makes you happier today

(09:14):
is fine. The value would come in if we said no,
your plan will no longer work and we need to
amend Social Security now or else you're gonna run.

Speaker 4 (09:23):
Out of money.

Speaker 3 (09:24):
That could conceivably happen. But for these folks that didn't,
so you know, the logical side of it, they were
able to come in with an idea in mind and
execute it because the advisor said, in a situation I said,
it's not a big deal.

Speaker 4 (09:37):
You can do that. I just don't recommend it.

Speaker 2 (09:39):
Yeah. So in other words, the logic extent is essential.

Speaker 1 (09:42):
You do need to run the numbers and make sure
the plan is going to quote unquote work, but that's
not the whole picture. It only really works when those
other three very strong emotional components are aligned with the spreadsheets.
Here's the all Worth advice if you're facing a big
decision retire early, helping your kids, buying a home, don't

(10:04):
just ask what the numbers say. Coming up next a
question that many investors ponder all the time, and that's
when is enough money enough? You're listening to Simply Money
presented by all Worth Financial on.

Speaker 2 (10:19):
Fifty five KARC the talk station.

Speaker 1 (10:27):
You're listening to Simply Money presented by all Worth Financial.
I'm Bob Sponseller along with Steve Ruby straight ahead at
six forty three. What's missing from a traditional retirement plan
that you need to shore up? All right, You've done
everything right, you've saved, you've invested, you've got no debt,
your retirement is fully funded, and yet it doesn't feel

(10:50):
like you've arrived. There's still anxiety. There's still a fear
that you might run out still a voice whispering just
a little more. When is enough money really enough?

Speaker 3 (11:02):
Steve So, it's a good question, but there's almost like
an illusion of arrival when it comes to retirement. There's
an unspoken belief, and we see it all the time
that once you hit a certain number, that's when a
switch will flip and you'll finally feel financially secure.

Speaker 2 (11:17):
I've seen commercials about that what's your number? What's your number?

Speaker 3 (11:20):
That is that's not financial planning. That's you know, what
are your goals, your needs, what challenges might you face?
That that's a very high level view of financial planning.
What's your number is an illusion because there's you know,
a range of possible outcomes based on so much more
than just your number. That's why I switch really rarely flips.

(11:41):
You know, enough is not really a number. It's it's
more of a mindset. I would argue, no, and.

Speaker 1 (11:47):
That's a strong argument and one we believe in, and
we see this all the time. It really isn't just
a number. It is a mindset. So let's get into
that mindset. I mean, we've worked with people who have
a million dollars and are totally at peace and feel
completely comfortable. We've got other people that come in, they
got ten million dollars and they're constantly checking the market,

(12:08):
worried about taxes, you know, and they're they're afraid of
something bad coming down the pike. I mean they're living
in fear.

Speaker 4 (12:16):
Yeah.

Speaker 3 (12:16):
I mean, when you spent thirty years focused on building, accumulating,
protecting your wealth, it can be hard to make that
shift into actually enjoying it. It's even harder to shake
that idea in a game that I would argue almost
never ends.

Speaker 1 (12:29):
Yeah, And what we're talking about is that little voice,
you know, that creeps in, you know, just a little more,
just a little more. And we've seen people live in
fear of a market correction even though they're withdrawal rate,
the amount that they're taking out as a percentage of
their total portfolio is only like one to two percent
a year. You stressed us to that portfolio, it can

(12:50):
pretty much withstand anything. But yet people still can't arrive
at that point of peace. And I guess it's just
uncertainty feels like danger even when it's just noise, especially
with all those headlines we see constantly in the twenty
four to seven, you know, cable news space. And that's

(13:12):
why that number can oftentimes just become a moving target,
like playing whack a mole, chasing the future number and
never feeling like it's enough.

Speaker 3 (13:22):
And it's interesting too, because in the example that you gave,
you know, somebody withdrawing one or two percent. If I
were to build a financial plan and we come to
a situation where the expenses are either low enough and
the fixed income is high enough, or maybe the expenses
is high and the fixed income is high too, that
there's you know, the plan. And I say this a

(13:43):
lot because I think it paints a good, pretty good
picture of how a financial plan is honestly a bit
of a superior way to justify acid allocation than just
a risk tolerance questionnaire, because the financial plan will tell
you the amount of risk that you need to take
to meet your goals and the amount of risk that
you can afford to take to meet your goals. And
somebody that only has a one to two percent withdrawal, right,

(14:05):
has the incredible ability to take a lot of risk
if they wanted to, even in the face of assured
future market corrections and bear markets. That portfolio will be
fine if you're only drawing one percent per year.

Speaker 1 (14:19):
You're listening to Simply Money, presented by all Worth Financial
on Bob Sponsler along with Steve Ruby. So let's get
into redefining what enough really should mean, and by that,
it's really not a number.

Speaker 2 (14:32):
What is enough.

Speaker 1 (14:33):
It's peace, it's clarity, it's the confidence that your money
is aligned with your life and your values, not your fears.
And Steve, you know, this conversation isn't for everyone, but
I've got you know a lot of clients who you know,
have a strong faith based life. They believe in God,

(14:54):
that their faith is very important to them, And this
oftentimes is where I sit with them and I say, look,
do you believe that God allowed you to get to
this place where you are where you have quote unquote enough.

Speaker 2 (15:07):
Money all on your own?

Speaker 1 (15:10):
You know?

Speaker 2 (15:10):
And they'll say.

Speaker 1 (15:11):
No, Well, then don't you believe that that same God
that you believe in very fiercely is gonna be by
your side during your retirement years and have your back
during those years too. And oftentimes we gotta we gotta
allow people or ask them to kind of check their
faith here then sink in a little bit and let

(15:32):
that sink in a little bit. Does that Does that
resonate with you at all?

Speaker 4 (15:36):
Yeah, I mean it certainly does.

Speaker 3 (15:37):
There's plenty of folks we work with that certainly have
faith is a big part of their lives. And you know, understanding,
you know, beyond that too, is what do people actually
want to do with their money? What brings them joy?
Not just safety? What are they afraid of that's keeping
them from feeling free when it comes to the freedom

(15:58):
that we should be reaching towards the financial freedom that
we want to feel when we make that transition into retirement.

Speaker 1 (16:04):
And it really comes down to just being intentional. You know,
if you've already won the game on paper, why are
you still playing like you could lose? And let's be clear,
having enough isn't the same thing as stopping growth. It
just means that you're growing with purpose and not with panic.
So let's talk about a couple practical steps for that

(16:27):
mindset shift.

Speaker 3 (16:28):
Well, you bring up a good point there, because inflation
is a bit of a silent killer in retirement. So
parking your money on the sidelines when you make that
transition to retirement is not a solid strategy. You need
to make sure that your money is still exposed to
some level of risk and reward, usually through stocks, because
that's the best way to keep up with inflation over
the long run. Obviously, diversification within the stock market is

(16:51):
very important for when the markets do slide into a
correction territory. We need to be able to weather that storm.

Speaker 2 (16:57):
You know.

Speaker 3 (16:58):
Revisiting your plan, making sure that you have a plan
that backs up the risks that you're taking with your
investments is very comforting for many.

Speaker 4 (17:06):
You know.

Speaker 3 (17:06):
That's what it boils down to is once you have
that solid financial plan, you've made that transition to retirement.

Speaker 4 (17:12):
I know I get this feedback a lot.

Speaker 3 (17:14):
I'm assuming you do too, where people say, you know,
I felt kind of nervous before I came in just
because of X, y Z, how the markets are doing,
whatever is recent in the news that catches their attention,
and then they say, but I always feel better after
I come in sit down and review my plan with you.

Speaker 1 (17:28):
That's great, Yeah, and what we encourage people to do.
Very few actually do it, but this is what we recommend.
Sit down and actually write your quote unquote enough statement.
Put it on paper. In other words, I have enough
because and write all the reasons and that forces clarity.
In other words, focus on your use of money. Are

(17:50):
you living aligned with your values? Are you giving meaningfully
taking the trips you've dreamed about, helping your kids now
instead of just later. Because having enough isn't just about
what's in your portfolio, It's about what that money does
and can do for your life. Here's the all Worth advice.

(18:10):
The worth of your plan is how it makes you feel,
not how big the number is. Next, how do you
treat your mortgage as you enter retirement and beyond. You're
listening to Simply Money presented by all Worth Financial on
fifty five KARC, the talk station. You're listening to Simply

(18:34):
Money presented by Allworth Financial. I'm Bob Sponseller along with
Steve Ruby, and we have a special guest tonight, our
credit expert Britt Scarce, who's going to walk through how
to handle our mortgage and other debt as we approach
and move into retirement.

Speaker 2 (18:50):
Brit.

Speaker 1 (18:51):
Interesting topic one that comes up all the time for
our clients. What do you talk about with your clients
when it comes to what if anything changes with regard
to your mortgage and overall debt situation as you approach retirement.

Speaker 5 (19:08):
Well, I think in a perfect world, we would enter
into retirement with with no debt, with having our mortgage
paid for and you know, be able to, you know,
have a nice nest egg to live on, and you know,
if people have pensions and you know, social Security and
all that, and that's all where you know, you as
financial planners, you kind of help people along with that.

(19:29):
Now with mortgages, you know, we've we've been in a
situation a few years back where rates went to the
twos and threes and fours, and a lot of people
are very much concerned that, hey, you know, I'm getting
more than three or four or five percent return in
my investment portfolio, should I pay off my mortgage? And well,

(19:54):
I would say it depends, you know, And I hate
those kind of answers because it does kind of depend
on what your cash flow is going to look like
going into retirement. I certainly am am a fan of
no debt, but there are opportunities that if you continue
to invest and get a better return than what your
mortgage interest you know, is charging you, you could at

(20:17):
some point be able to you know, at any time,
once you get enough money invested, you could certainly pay
off the mortgage at will if you need it to.
So you know, the answer is it kind of depends.
I would prefer to have someone with no mortgage payments
at all going into retirement, but there are some situations
and it also depends on the timeline the horizon of

(20:38):
when you're going to retire as well.

Speaker 4 (20:41):
I like that that's your answer.

Speaker 3 (20:42):
I'll be honest, because sometimes when you ask a certified
financial planner a loaded question, the answer is, I don't know.

Speaker 4 (20:48):
It depends that we need more information.

Speaker 1 (20:51):
You got to answer all the time, Steve, just like
Brett and Amy just you know, nails me on it
all the time because she likes her little uh you know, well,
I'm joking.

Speaker 4 (21:00):
Yeah, it depends is often a.

Speaker 1 (21:03):
Great answer, and it leads to why every person's situation
is different and every financial plan should be customized.

Speaker 3 (21:11):
It's kind of fascinating sometimes because you run the financial
plan and let's say you run into somebody who is
more of a risk taker. They're comfortable letting their money
work hard for them. They have a very low mortgage rate,
and in a situation like this where they have the
extra investments that they could wipe out the mortgage. Oftentimes
when they're investing more aggressively and they have a longer

(21:32):
time horizon at the end of the plan, you're gonna
have more money by investing with those dollars as opposed
to paying off the mortgage. But when your plan works wonderfully,
it doesn't really matter. I've done that before where somebody
they were gonna have twenty five million dollars at the
end of their plan if they paid off or if
they kept their money invested rather than paying off the mortgage.

(21:52):
If they paid off the mortgage, they were gonna have
twenty four million, and they said, I'm paying off the mortgage.

Speaker 4 (21:56):
I want to be debt free because it gives me
peace of mind.

Speaker 1 (21:59):
Yeah, I think we're all kind of singing off the
same sheet of music here, Britt. Wouldn't you agree that
it depends on the rate of interest you're paying on
that debt. A two point seven eight percent thirty year
fixed mortgage is a whole different ball of wax than
a ten point three percent interest rate on an RV
purchase or something like that.

Speaker 5 (22:19):
Right, you are exactly right, exactly, and that's you know, obviously,
you can outpace the returns. You know, if you're in
the twos and the threes most likely you know, you
guys being investment advisors, you can probably over a long
period of time, get someone a much better return on
that money.

Speaker 3 (22:40):
So I've heard about hidden costs of holding no debt?
You know, does this hold water? Is avoiding all debt
the best financial strategy in your opinion, then.

Speaker 5 (22:49):
Well I'm a I'm a big fan of no consumer debt.
You know, if you if you're talking about what we
in many cases refer to as good debt or bad debt,
good debt being something that is secured by say real estate.
Uh you know that's financed at a very low interest rate.

Speaker 2 (23:07):
Uh.

Speaker 5 (23:07):
You know that kind of debt could actually give you
the ability to leverage and get a much more uh
higher return on your on your money. And right now,
you know and uh investing in real estate. Real estate
is not getting any cheaper. So you know, obtaining a
mortgage to obtain an asset that's going to appreciate in value, Uh,

(23:28):
I don't see, uh you know a problem with that. Now,
if you're going to go out and get personal loans
and like you said, buy r vs and cars, and
we're going to get stuff that's going to go down
in value. That's that that I'm not a big fan
of ritt.

Speaker 1 (23:44):
What are you seeing coming across your desk here, you know,
right now, current topics. People trying to upgrade their home,
you know, move to Florida, what have you? What kind
of conversations are you having most commonly if there is
such a thing as it relates to how to handle
debt right now relating to real estate, Yeah.

Speaker 5 (24:07):
There is a little bit of a lock in effect
right now. We're talking about the low interest rates that
a lot of people have on their on their homes.
If they're in the two threes fours, you know, there's
there's not a lot of desire to move up or
you know, get rid of that particular mortgage and go
to something now that's in the going to be most

(24:27):
likely in the sixes. You still have people that are
buying houses, you know, first time home buyers. There's still
opportunities for that. We have some people that are still
looking at second homes. That's still uh you know, something
that's that's available out there. Uh people, you know, I
don't I don't think you see a whole lot of uh,

(24:48):
you know, people trying to reefinants because you know they're
they're if they're already in the low you know, three
fours and pives, that doesn't make a lot of sense
to reef and ants if you're trying to manage debt.
Some peopleeople are tapping into home equity through home equity
loans and leaving the lower interest rate debt on the
first mortgage in place. But I've also seen people that

(25:10):
have depending on their debt structure, and again this goes
back to our it depends type of answer. If you
have someone with a lot of equity in their home
and they decide, hey, you know, I do want to
either downsize to a different house, or I want to
move up to my dream home. If they're able to
sell a house that has a lot of equity in it,
put a lot of money down on the next house,
even if the new rate's going to be perhaps in

(25:32):
the sixes, sometimes they can still make those numbers work
where the mortgage is still comfortable, and or they could
buy a different house, downsize a little bit, and use
some of that home equity to pay off debt. So
again there's a lot of different answers for a lot
of different people. And it depends on your particular situation

(25:53):
and what your goals are.

Speaker 4 (25:55):
Got it.

Speaker 3 (25:55):
So I want to hear your perspective on, you know,
the conversations you have for for helping set expectations around
transferring property to to to loved ones, passing down real.

Speaker 4 (26:07):
Estate strategically as part of your state plan. What do
you talk about with people?

Speaker 5 (26:13):
Yeah, I mean there's there's definitely ways to do that.
You Uh, you have to be careful. You don't want
to do this when when everybody when you know, let's
say mom and dad are looking to uh pass on
assets maybe homes, you know, to their kids. You don't
want to wait till they're like getting ready to head
into the nursing home to try to start doing that

(26:33):
type of planning. You want to think ahead. First off,
everyone should have a will and uh that kind of
gives everybody an idea of what you plan to do
with the property. Uh that that really removes a lot
of a lot of challenges. Now, there are there are ways,
like you know, establishing trusts ahead of time. There's also

(26:55):
uh the ability to maybe sell a property to a
loved one, you know, at a at a fair market value.
You know, you do have to worry about some of
the uh, you know, things like the Medicaid five year
look back and that sort of thing.

Speaker 4 (27:08):
This is this is.

Speaker 5 (27:08):
Why people really should if you have assets, if you
have homes in real estate that you're looking to pass
down to your errors, you need to get an attorney
and a state planning attorney, and you need to put
in place things like wills and consider things like trusts
or whether it makes sense to add them to deeds
and do you know transferrent death deeds or or doing

(27:33):
you know revocable trusts or irrevocable trusts and things like that.
Those are things that in a state attorney would be
able to really walk you through.

Speaker 2 (27:41):
Great stuff at all.

Speaker 1 (27:42):
As always from our credit expert, Brit Scarce. You've been
listening to Simply Money presented by all Worth Financial on
fifty five KRC the talk station. You're listening to Simply
Money presented by all Worth Financial. I'm Bob sponseller along

(28:03):
with Steve Ruby. Do you have a financial question you'd
like for us to answer. There is a red button
you can click while you're listening to the show right
there on the iHeart app. Simply record your question and
it'll come straight to us, all right, Steve. Retirement it's
a time we all look forward to the moment when
you can finally kick back and enjoy all the fruits

(28:26):
of your hard work. We often think of it purely
in financial terms. You know how much you've saved, what
your assets are worth, whether or not you'll outlive your money.
But tonight we want to take a deeper look into
what's often missing from a traditional retirement plan.

Speaker 2 (28:44):
Yeah.

Speaker 3 (28:44):
I mean, this is something that I've come across time
and time again, where.

Speaker 4 (28:47):
People work so hard to not work.

Speaker 3 (28:50):
They make the transition to retirement, they're like, Okay, what
the heck do I do now? You know, it's important
because it is an emotional time. There can be major
psychological impacts. You kind of face an identity crisis when
you leave the workforce. You know, when you spend decades working,
it can be jarring to shift from having a specific
role with routines and purpose to somebody without any structure.

(29:12):
If you didn't plan accordingly to create that structure, you know,
people kind of ask, what.

Speaker 4 (29:18):
Am I without my job? What do I do now?

Speaker 3 (29:22):
A lot of folks that I've seen over the years,
many of their friendships are through their work. They're like,
all right, all my friends are at work, and now
I'm retired. What the heck do I do? Yeah, I've
helped dozens of people retire at this point in my career,
at least ten or twenty probably right.

Speaker 5 (29:41):
More.

Speaker 1 (29:42):
Yeah, Well, I have gotten these phone calls, you know,
and a lot of clients I've worked with now for
over thirty years, they're now in their mid to late eighties,
and I can tell you from personal experience, it has
been a bit of an adjustment for some folks to
leave the workforce. So this is a magnificant issue. And
I've had I've had people call me Steve and actually

(30:04):
say I need something to do. I mean, it's that
serious of an issue. So let's get into some of
the things that we can and should be doing in
preparation for retirement, to get out in front of these
what I'll call surprises that might rear their ugly head
if we don't think about them and plan for them
in advance.

Speaker 3 (30:23):
Well, when when I'm building financial plans, and when fiduciary
financial planners are building financial plans, oftentimes we're looking at
when when we track expenses and project expenses and retirement.
I look at your needs, your wants, your wishes, your needs.
That's your house and utilities, groceries, gas, that's your healthcare expenses,

(30:43):
your wants. That's that's how you want to spend your days.
I mean, is that is that traveling? Is that golfing?
Is that volunteering? Is it donating you know, to to
charitable causes that you believe? And this is where I
want people to lean on us heavily, because that's what
gives you that purpose when you know longer working, It's
it's how will you be fulfilled as you make that

(31:04):
transition into retirement. That's why a lot of places out
there that you know, if you just google how much
will I need to retire, You're going to see things
like eighty percent of your pre retirement income. That is
a generality, that is not a one size fits all.
Oftentimes I'm baking in higher expenses for some of these
wants and maybe wishes like you know, buying a home
in Florida or North North Carolina. You know, maybe were

(31:27):
your children, your grandchildren go to college. Whatever that is,
you need to plan accordingly to make sure that you
aren't going to make that transition into retirement and just
sit around.

Speaker 1 (31:40):
Yeah, and advice that I give to folks all the
time as they prepare for retirement. And again this is
just with the benefit of hindsight actually watching people retire
for decades now, you know, clients.

Speaker 4 (31:52):
Dozens and dozens of people.

Speaker 1 (31:55):
I ask people to take, you know, a one to
two week vacation while their work. You know, use your
one to two week vacation time and simulate retirement. You know,
use your vacation as I'm gonna test drive retirement. Where
am I gonna go? Who am I going to spend
my time with? What am I gonna do? And that

(32:16):
gives people kind of a glimpse as far as what
will life look like when I turn a temporary vacation
into a permanent vacation ie retirement.

Speaker 3 (32:26):
You're gonna revert back to teenager and just stay up
watching TV all night and then sleep till one pm.
You know, that's not you don't want to find that
being what happens when you when you transition to retirement.
But you know, we also need to make sure that
that we're preparing accordingly for some of these expenses too,
to ensure that we are able that that our money

(32:47):
is able to live longer than us. It's about finding
a balance. You need to have something to do. But
you know, when I talk about needs, wants, wishes, you
also have to be able to fulfill your needs. Healthcare
expenses are getting more and more costly than every before.
Average sixty five year old couple might need about three
hundred thousand dollars for health care expenses and retirement, So
planning accordingly to find that balance between supporting your needs

(33:11):
and making sure that you have wants and wishes to
work towards so that you have social connections, so that
you have an active lifestyle. This is very important and
it is it is part of a financial advisor's job
to ensure that you are living that rich and meaningful
life when you make that transition into retirement.

Speaker 1 (33:29):
Yeah, it's at least worth having the conversations, And I
think having the conversations with both spouses present is important
because when one spouse retires and the other is still working,
that's an adjustment, you know, to the household in terms
of the daily rhythm of the household. You know the
same as if both spouses retire. So it's important to

(33:50):
have those conversations in advance, so no one's disappointed when
we actually, you know, do walk out and retire.

Speaker 3 (33:57):
It's kind of amazing too, because I facilitated some of
these conversations dozens of times in fact, probably where I'll
ask the question, so how do you how do you
want to spend your time in retirement? How do you
want to spend your time in retirement? And the spouses
will have completely different goals, and it's like, all right, well,
you guys talk about this amongst yourselves, will circle back.

Speaker 2 (34:17):
Yeah, but you're at least teeing up the conversation.

Speaker 3 (34:20):
You almost feel like a marriage counselor sometimes yeah, for sure.

Speaker 1 (34:22):
All right, here's the all Worth advice. Don't forget to
plan for the things that really matter. Money isn't everything,
It's just the foundation. Next, we're going to take a
trip inside my own brain, which is scary in and
of itself. Actually, I'm going to take you inside Bob's
world of wealth. You're listening to Simply Money presented by

(34:43):
all Worth Financial on fifty five KRC the talk station.
You're listening to Simply Money presented by all Worth Financial.
I'm bob sponsorller along with Steve Ruby. All right, Steve,
I'm I'm going to spend a few minutes in my

(35:03):
Bob's World of Wealth segment here sticking with our last
topic because it's such an important one, and that's the psychological.

Speaker 2 (35:11):
And emotional part of preparing for retirement.

Speaker 1 (35:14):
Sure, and I know you're trying to drive home the
point of how old I am and how many times
I've done this, But I have done this to your point,
does this in dozens of times? And all joking aside.
I think these discussions about simulating what retirement really is
going to look like, and having both spouses on board
for those discussions, I think it is critical as critical

(35:39):
as the financial part of preparing for retirement. What say you,
mister Steve?

Speaker 3 (35:47):
You know, like I said that, sometimes it almost feels
like we're marriage counselors in a sense, to make sure
that that within the household, we help people come to
realize what their shared goals are and sometimes what their
separate goals are, and make sure that we can plan
accordingly to help them achieve them.

Speaker 1 (36:07):
Yeah, and I mean we're not qualified to be marriage counselors.
And I know you're kind of saying that tongue in cheek,
But I do think our job is to tee up
these conversations in some of our meetings that we're having
as we prepare clients to actually retire, and it's mainly
just facilitating both spouses to talk through what their lifestyle

(36:28):
is going to be in retirement, because I think Steven,
you made the point in the prior segment and I've
seen this as well. When you actually put some of
these questions on the table and have both spouses react
to how you're going to spend your day, where do
you want to travel, who do you want to spend
your time with, some of the answers that different spouses

(36:49):
give can be surprising, and that's what warrant's going back
and having the spouses talk through that together so that
we're prepared for the actual retirement date.

Speaker 3 (37:01):
I think at the end of the day, when you're
hiring a fiduciary financial planner to help you navigate through
some of these big conversations and big emotions, what you're
really paying for is peace of mind and having somebody
in your corner that can help you navigate these big
choices and help get you on the same page as
your spouse or navigate ways to have separate goals from

(37:24):
the same resources. There's a heck of a lot of
value in that, because at the end of the day,
the job is to make sure that you live that
rich and meaningful life without running out of money, and
the expectation is that you're always going to live a
lot longer than you think you are. We need to
stress test the heck out of your plan to ensure
that curve balls don't derail what possibilities are ahead.

Speaker 2 (37:44):
Yeah, a rich and.

Speaker 1 (37:45):
Meaningful life involves many, many things apart from just money.

Speaker 2 (37:50):
Thanks for listening.

Speaker 1 (37:51):
You've been listening to Simply Money, presented by all Worth
Financial on fifty five KARC, the talk station