Retirement Answer Man

Women ask many types of questions that men don't, which is why we’re dedicating this entire month to a series on women, money, and retirement. This series gives you the space to dig in, have your voice heard, and your questions answered.  You’re listening to the 3rd episode in this series and today we’ll be answering so many of your questions. Tanya Nichols from Align Financial joins me once again to add her womanly input and expertise.  There are a lot of women out there with similar concerns. Are you one of them? Find out if your burning questions about retirement have been answered on this episode of Retirement Answer Man. The Rock Retirement Club can help you build confidence in your retirement plan Are you looking for a way to build your confidence in your retirement plan, or maybe you're just looking for ways to create a retirement plan. If so, the Rock Retirement Club is the right place for you.  The RRC provides you with everything you need to educate yourself to build your retirement plan, allowing you to rest easy. By joining the RRC you’ll have access to on-demand courses, education, and tools so that you can learn what you need to know to rock retirement.  Join now to gain access to this information and our knowledgeable team of experts. In the clubhouse, you can ask questions from our experts and enjoy conversations with hundreds of more people who are riding the same retirement wave. The Rock Retirement Club is a great place to share inspiration and get ideas to create the retirement of your dreams.  Should single women with no children consider long-term care insurance? Several women have asked about long-term care insurance. Navigating long-term care is a major concern for women that have no close family or children. They see long-term care insurance as a way to help pay for their care when they may no longer have the capacity to represent themselves.  When looking for a long-term care insurance plan, be sure to specifically look for a plan that features a care navigator. Another possibility is to hire a care navigator out of pocket who only works for your interests. This representative can help you navigate the system so that you know that you will be cared for.  Long-term care navigators are an emerging field, so it can be hard to find someone that specializes in this industry. One way to find this type of representative is to talk to long-term care providers or even your state health department. Have you ever considered hiring a care navigator for your declining years? What kind of questions do you have about retirement?  In this episode, we answer many of your listener questions like what is the difference between a trust and an estate, how to prepare to deal with financial issues during cognitive decline, where to get cash from during the go-go years, the best way to navigate healthcare before Medicare, and many more. Listen in to hear if your pressing questions have been answered. If you have any more questions that weren’t answered in this episode, make sure to join the live meet-up on August 26 at 7 pm CDT. This live webinar will be about an hour long and I’ll be joined, once again, by the lovely Tanya Nichols. We’ll answer your questions live in real-time. These webinars provide a relaxed atmosphere where you can learn the answers to your questions and maybe even hear answers to questions that you haven’t even thought of yet. OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN LISTENER QUESTIONS WITH TANYA NICHOLS [5:30] Don’t miss the live meet up on August 26 at 7 pm CDT [6:37] Long term care insurance for those with no close family [11:00] Trust vs. estates [11:50] How to deal with financial issues during cognitive decline [16:11] Where to take cash from in the go-go years [19:02] How to navigate healthcare before Medicare [26:35] How do you calculate the 4% rule? [30:28] Spend less money than you make [32:07] What to look for in a bond TODAY’S SMART SPRINT SEGMENT [37:22] An update on my smart sprint from last week [41:13] Look at your net worth statement history Resources Mentioned In This Episode Align Financial Don’t miss the live meetup on August 26 at 7 pm sign up here Rock Retirement Club Roger’s YouTube Channel - Roger That BOOK - Rock Retirement  by Roger Whitney Work with Roger Roger’s Retirement Learning Center

Welcome back to the 2nd episode of the Women, Money, and Retirement series. All month long we will be discussing issues specific to women in retirement. Since I am not a woman, I have invited Tanya Nichols from Aligned Financial to co-host the show with me throughout this series. Tanya is here to provide a woman’s perspective and to help me answer your questions. If you are a woman you won’t want to miss this series that is created especially for you  What does it mean to rock retirement? If you have listened to the show before, you know that I frequently use the phrase rock retirement. I even wrote a book called Rock Retirement and I created the Rock Retirement Club, but what do I mean by rocking retirement?  When you are rocking retirement that means you are using your resources to live your best-imagined life. I want you to use the assets you have to design your ideal life in retirement. There are so many decisions to make in retirement. Many people mistakenly think that their financial decisions are separate from their life decisions, but life and money are never separate. Your money should be helping you to create the best life that you can imagine.  How do women excel in retirement planning? Men and women have different strengths and weaknesses in just about every area of their lives. This is no different in financial planning. As financial advisors, Tanya and I see the differences between the sexes every day. These differences are generalizations, but we have noticed that women excel in several areas of financial planning.  Women are more comfortable with vulnerability; they don’t try to control the uncontrollable. Women look ahead toward the outcome. Women realize the value of collaboration.  Women are more thorough and take more time to make decisions.  Women don’t mind speaking openly about their worries. Think about yourself. How do you excel in financial planning? Is it in one of these areas or in another way? How to confidently plan for retirement when you don’t have much to start with Debbie is worried about retirement. As a single woman without a huge retirement portfolio, she feels overwhelmed and doesn’t know where to start. She feels that financial advisors are only for the wealthy, but she knows that she must start learning about her finances somewhere.  The good news is that Debbie is listening to a financial podcast! That means that she has already started educating herself. Unfortunately, the financial planning industry hasn’t done a good enough job of successfully reaching average income earners. However, this doesn’t mean that financial planning is only for the wealthy.  In addition to listening to retirement and financial podcasts, there are other ways that people can educate themselves in these matters. Garrett Planning Network and XY Planning Network are 2 networks of more affordable financial planners that work on a monthly subscription basis. Listen in to hear more resources that can help you gain the confidence to truly rock retirement.  OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN WHAT DOES THAT MEAN? [1:10] What does rocking retirement mean? PRACTICAL PLANNING SEGMENT [3:34] What do women excel at in retirement planning? Q&A SEGMENT [11:04] Women are less prepared for retirement than men [17:12] How to tackle the feeling you aren’t good enough [19:15] How to generate an income stream in retirement [22:20] Are there common pitfalls for women in transition periods? [27:27] A Social Security planning question [33:14] Who gets to keep a death certificate? [36:28] Make sure spouses communicate regularly about finances TODAY’S SMART SPRINT SEGMENT [38:43] Chat with your spouse about your net worth statement and financial plan Resources Mentioned In This Episode Episode 310 - The Pie Cake Social Security Calculators Aligned Financial Garrett Planning Network XY Planning Network BOOK - The Power of Habit by Charles Duhigg Rock Retirement Club Roger’s YouTube Channel - Roger That BOOK - Rock Retirement  by Roger Whitney Work with Roger Roger’s Retirement Learning Center  

With the financial industry being dominated by men, it makes sense to dedicate time to focus solely on financial issues related to women. Since I am not a woman and can’t speak personally about these issues, I have invited my good friend, Tanya Nichols from Align Financial, to help me tackle this month-long series on Women, Money, and Retirement. Tanya is one of Investopedia’s Top 100 financial advisors and she and her firm work mainly with women.  I’m excited to have Tanya help me explore this area further. We can tackle your questions and you can gain the confidence you need to live the life you want in retirement. With a bit of education, anyone can learn how to manage their finances in retirement. 3 financial power moves women can take now Women often have their own set of issues surrounding money due to traditional gender roles and a misogynistic financial services industry. But once women face these issues head-on they can trample these hurdles and take control of their own financial situation. Learning these 3 power moves can help you take charge of your financial life. Anyone can learn about money. In years past, finances were often left to the husband to control, so the financial industry has typically been dominated by men. The financial services industry likes to make money sound much more complicated than it is, but financial planning is actually a lot like project management. Learning about money is just like learning about anything else and you can learn about money just as well as you can learn about fitness, nutrition, or child-rearing. You can learn to plan your finances regardless of your background. So if you have an interest in your money, then dig in and start learning.  Think of yourself first. Do you often put your family’s needs ahead of your own? Women often sacrifice their entire lives for the ones they love. If you can acknowledge that you should consider yourself first when it comes to finances then you can begin to plan a life that is true to yourself. Before making financial decisions think to yourself: is this at the expense of something that is important to me? You have a rightful seat at the financial advisor’s table and an equal seat at the financial table of your marriage. It is no secret that the finance industry is dominated by men and even has a history of misogyny. You should never have to earn your seat at the table to talk about your money. That seat is already yours. Don’t put up with anyone diminishing you or dismissing your concerns.  What to do if someone diminishes your questions or concerns Unfortunately, women’s questions and concerns are often dismissed in financial settings. If this happens to you make sure to address the situation immediately and clearly state how and why you feel diminished or dismissed.  If the professional you’re working with doesn’t respond in a satisfactory manner then go somewhere else. It is important to find a financial professional that you can trust. They need to be able to listen to you and hear what your priorities are. Have you ever felt slighted by a financial professional? If you can’t find the right person to work with, don't be afraid to DIY your finances. With a bit of education, managing your own finances is totally doable. Own your awesomeness. You can plan your retirement just as well as the next person. OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN PRACTICAL PLANNING SEGMENT [3:30] A disclaimer [6:33] 3 power moves for women [14:50] A 3 step process if someone diminishes your role LISTENER QUESTIONS [19:45] How do bond funds work? [23:22] What to do if almost all your cash is in a 401K [29:30] Should she consider putting her dad in a nursing home? [32:47] Decisions that couples make in their 50s and 60s will affect the women later [35:37] How will I be cared for if my husband dies first? TODAY’S SMART SPRINT SEGMENT [39:11] Plan your seat at the table Resources Mentioned In This Episode Align Financial My Fitness Pal Rock Retirement Club Roger’s YouTube Channel - Roger That BOOK - Rock Retirement  by Roger Whitney Work with Roger Roger’s Retirement Learning Center

Choosing the right withdrawal strategy is a big part of rocking retirement. Knowing how you will withdraw your money each month will ease the pressure that comes with leaping into retirement and boost your confidence. The right retirement withdrawal strategy for you may not be the same as the one your friend uses, the one you just read about, or even the one your advisor recommends.  On this episode of Retirement Answer Man, we are wrapping up our 4 part series on retirement withdrawal strategies by learning how to build a framework to find the strategy that fits your individual needs. Press play to hear how to piece together the information you have learned in the past 3 episodes to create your own income distribution plan so that you can gain the confidence to really rock retirement.  Changing the language you use could change your mindset about retirement Planning retirement can be like planning to have kids. You don’t often think of the sticker shock that comes with it. Learning that a comfortable retirement might cost you $5 million might give you heart palpitations. But just like with having kids, you don’t have to pay that amount all at once. This amount is spread out over the years and you have control over how much you may spend. This is why it is important to get into the right mindset.  One way you can change your money mindset about retirement is to reframe the way you word things. Yes, you are choosing a retirement withdrawal strategy, but the word withdraw means to take away. That isn’t the most attractive thought.  A better way to think about your financial capital is to realize that it is simply deferred income. You have been deferring this income for decades and the time has finally come to access the income that you have already earned. A simple change in wording can completely change your mindset and help you rock retirement. To choose the right withdrawal strategy, first, consider your financial situation  The first step to take to build your retirement withdrawal strategy is to consider your retirement situation. Think about whether your retirement is overfunded, constrained, or underfunded. To do this, compare your retirement liabilities to your resources. Consider all of your sources of income including your social capital, human capital, and financial capital.  Next, you’ll want to consider the different withdrawal strategies that you have learned about over the past 3 episodes. If you consider each of those retirement withdrawal strategies as being on a dial from 0-10 you can then place your financial situation on that dial. Chances are you land somewhere in the middle of the dial rather than on either extreme. This means that you may want to take a moderate approach to income distribution. Listen in to hear where each withdrawal strategy lands on the dial and how that could affect your personal income distribution plan.  Don’t ignore the qualitative aspects of retirement Not everything in life is about numbers and this is true for retirement as well. This means that you’ll need to consider more than just your finances to create your retirement withdrawal strategy. You’ll want to consider your age, life expectancy, and health. Do you need to fit as much living as you possibly can in the next few years? Or do you need to make your money last on the chance that you live to be 100? In addition, you’ll need to consider your family situation. Are you single or married? Do you have children? These external factors will also play a role in your income distribution plan.  One last consideration is your personality profile. You may need more security even if you are overfunded. Every person has their own risk tolerance threshold. Whichever way you choose to distribute your income in retirement, you need to feel comfortable and confident so that you can rock retirement. Press play now so that you can learn what you need to know to develop your retirement withdrawal strategy.  OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN PRACTICAL PLANNING SEGMENT [4:00] How do you find the strategy that fits for you [7:31] The language you use to describe things really matters [10:00] Think about this in an organized way [17:55] What to take into account to help you evaluate all the aspects [24:01] How does your social capital fit into the equation? ANDY PANKO INTERVIEW [30:21] Why do people have so many questions about this? [34:20] How does Andy approach this question with his own clients? [36:54] How does Andy deal with tax planning in retirement? [44:46] Don’t let the internet scare you into doing something you don’t need COACHES CORNER WITH BW [48:38] Choosing the right strategy can give you the permission to spend [52:08] How BW chose his withdrawal strategy TODAY’S SMART SPRINT SEGMENT [59:35] Map out how you think about your quantitative and qualitative aspects of retirement Resources Mentioned In This Episode Check out the Facebook Live in Andy’s Taxes in Retirement group  Rock Retirement Club Roger’s YouTube Channel - Roger That BOOK - Rock Retirement  by Roger Whitney Work with Roger Roger’s Retirement Learning Center

When it comes to creating your retirement withdrawal strategy there is no one-size-fits-all solution. You have to determine what is right for you. That’s why we have been exploring different withdrawal strategies this month on the Retirement Answer Man show.  If you missed the last couple of episodes go back and listen to learn about the safety-first strategy and safe withdrawal rates. On this episode, we are digging into asset-liability matching. Press play to learn more about this hybrid approach to withdrawing your assets in retirement.  What is asset-liability matching?  Asset liability matching is a term that is used in the pension planning world, but you can use it to describe your own assets and liabilities. Your liabilities are your spending or the debts that you need to cover. Your assets are your financial capital. If you prefer, you can also think of your 401K as deferred income rather than as your investment assets if that helps you come to terms with spending it.  Basically, asset-liability matching is when you match up your deferred assets with your consumption to make sure that you have your spending covered in retirement.  Where does this strategy fall among the retirement withdrawal strategies? On one end of the spectrum, the safe withdrawal rate strategy skims along the top of your investments. It only dips into them as needed. On the other side of the coin, the safety-first approach prefunds all or the majority of your retirement journey.  Asset liability matching falls somewhere in between these two extremes. I may be biased towards this approach since I use this structure coupled with agile retirement management with my own clients. Since I value flexibility in retirement, this withdrawal strategy fits my ideology.  Start thinking about which way you lean on this spectrum, so you can begin to build your retirement withdrawal strategy framework in the next episode. What's your baseline? To execute the asset-liability matching strategy, you’ll first need to establish a contingency fund or a standard emergency fund as a buffer. The next step is to plan your spending over the first 5 years of retirement including your tax estimates.  Once you isolate how much you’ll need from your financial capital, then you can build an income floor. The rest of your assets can then go into a core, growth-based investment portfolio. With this strategy, you’ll get a mix of protection against sequence of return risks in the near term and a hedge against inflation in the long term.  What are the benefits of asset-liability matching?  This is a good strategy to use if you value optionality. Since retirement is such a big life change it is nice to have a lot of liquidity early on. Retirement does not simply mean that you stop working. Your entire life changes and it can be difficult to understand how it will change when you are in the planning stage. Having this liquidity in the income floor can give you confidence and flexibility as you navigate this momentous life change.  Another benefit of asset-liability matching is that you mitigate the sequence of return risk. Having an income floor in place can give you many options if the world falls apart early on in retirement.  You may want to pivot to a safety-first approach or safe withdrawal rate as you age, but asset-liability matching gives you plenty of room to adjust while you are figuring this whole retirement thing out.  I am naturally biased towards matching assets to spending since this is the strategy that I use with my clients, but there is no single best withdrawal strategy to use in retirement. You’ll need to consider what is right for you. Make sure to listen to all 3 Retirement Withdrawal Strategies episodes to consider which strategy fits your needs and come back next week so that you can learn how to create a framework to navigate this crucial piece of retirement planning.  OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN WHAT DOES THAT MEAN? [2:30] What is asset-liability matching? PRACTICAL PLANNING SEGMENT [6:39] Where does asset-liability matching fall in line with the other withdrawal strategies? [9:20] What is a baseline? [12:50] How will you find adjustments along the way? [13:43] What are the benefits of this strategy? LISTENER QUESTIONS WITH NICHOLE [19:15] How to calm the worry about retirement [25:21] Do I take the pension or the lump sum?  [29:55] What happens if your money management platform gets hacked? TODAY’S SMART SPRINT SEGMENT [35:42] Do you know of a void in your first year of retirement? Resources Mentioned In This Episode Rock Retirement Club Roger’s YouTube Channel - Roger That BOOK - Rock Retirement  by Roger Whitney Work with Roger Roger’s Retirement Learning Center

One of the biggest questions of retirement is how to withdraw your money. You can’t have a successful retirement without first planning how to withdraw your money. That is why we are discussing different retirement withdrawal strategies this month. Last week we covered the infamous 4% rule and today you’ll learn about the safety-first approach. In our next episode, you’ll hear about a hybrid approach and in the last episode of this series, you’ll discover how to build a framework for your own retirement withdrawal strategy. Are you ready to educate yourself on the various ways that you can withdraw your money in retirement? Press play to get started.  What is the safety-first strategy? In the previous episode, you learned about a safe withdrawal strategy using the 4% rule. Whereas the 4% rule is a portfolio-based strategy, the safety-first strategy takes the opposite approach. Safety first ignores safe withdrawal rates and asset allocation. Instead, it focuses on creating income sources via various guaranteed income vehicles. The idea behind the safety-first approach is that retirement is too important to have variables like sequence of return risk that could ruin your retirement.  How to implement the safety-first approach  Since you only get one shot at retirement, the safety-first method secures a base income by using the assets you have. Prioritization is a key component to safety first. The first thing one must do to utilize the safety-first approach is to calculate your base needs over the span of your lifetime. Once you have this number, then you’ll subtract the income from your social capital so that you can see what’s left. With safety-first, you will secure your base needs by utilizing bond ladders or income annuities. After creating your income floor, then you can focus on building your contingency fund to help with life shocks. Once both of these bases are met then you can focus on any other retirement goals you may have.  What are the advantages to safety-first? The first advantage that comes to mind with safety-first is peace of mind. By using the safety-first approach you won’t have to worry about the markets because you know that no matter what happens your base needs will be met. Another advantage is that this approach is easy to manage. There is not much to do after you have the plan in place but collect your monthly paycheck which makes this plan ideal for later in life. One more advantage is that since your needs are met you can focus on being more growth-oriented with the rest of your portfolio.  The disadvantages of this approach The main disadvantage that I see with this approach is the lack of flexibility. If you have listened to the show before, you know that my methodology is all about staying agile. People change their minds a lot and life can completely change after retirement, so tying up your assets in an annuity can take away the power to change your mind. Another downfall to safety first is increased inflation risk. Most annuities do not adjust for inflation, so if there are any spikes in inflation you could be at risk. Listen in to discover if the safety-first approach is the right one for you.  OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN PRACTICAL PLANNING SEGMENT [1:30] What is the safety-first strategy? [4:35] What are secure assets? [8:06] When to implement the safety-first strategy [10:20] Advantages and disadvantages to the safety-first strategy LISTENER QUESTIONS [17:55] How should I incorporate an inherited IRA into my retirement plan? [20:10] Taxes and Roth conversions [23:45] Does the 4% rule take into account social capital?  [24:54] How do bonds work? [28:38] A pro-rata question TODAY’S SMART SPRINT SEGMENT [30:40] Do a basic calculation to figure how much of your base needs will be covered by guaranteed income sources THE FEEDBACK BOOTH [32:43] Women run the finances too [34:35] My 3rd attempt to discuss financial planning fees Resources Mentioned In This Episode Wade Pfau BOOK - Safety First Retirement Planning by Wade Pfau Michael Kitces Rock Retirement Club Roger’s YouTube Channel - Roger That BOOK - Rock Retirement  by Roger Whitney Work with Roger Roger’s Retirement Learning Center

Have you considered what kind of withdrawal strategy you plan to use in retirement? There are more to choose from than you may realize. Over the next 4 episodes, we will focus on different withdrawal strategies and how to choose one that fits your needs.  On this episode of Retirement Answer Man, we’ll cover the most notorious retirement withdrawal strategy: the 4% rule. In week 2 of this series, we’ll discuss the safety-first strategy. In the 3rd episode of the Retirement Withdrawal Strategies series, we’ll learn how to utilize matching liabilities to spending, and finally, in the last week of July, you will learn how to create a framework to help you decide which retirement withdrawal strategy will work best for you.  This episode is packed with information and even includes an interview with Jamie Hopkins, author of Rewirement. Get ready to buckle down and learn what you need to start the decumulation phase of life.  There are 3 big rocks in retirement planning It can be easy to get sidetracked when planning for retirement. There are so many different areas that you need to consider. You don’t want to focus on the wrong thing, but how are you supposed to know what the right thing is when there is so much information out there. I believe that you need to focus on the 3 rocks of retirement planning. Feasibility - This means what is possible given your resources. You’ll want to figure out how to squeeze the most life out of the assets that you have to create the best life that you can.  Resiliency - You don’t want to get thrown off course by inflation, bad markets, or life. This is where choosing the best withdrawal strategy comes into play. Optionality - This covers the tools you can use to enhance the journey - tax planning asset allocation etc What is the 4% rule? The 4% rule was created by William Bengen in 1994 in a landmark academic article. Mr. Bengen wanted to know if there was a fixed amount of money that you could pull from your assets safely each year and never run out of money. To investigate, Bengen looked at historical data and ran models to search for a percentage rate that one could withdraw safely over a typical lifetime. He learned that 4% is the amount that you could withdraw from a portfolio to stay ahead of inflation yet never run out of money. Over the years the paper has gained momentum until it eventually became a rule of thumb. What are the advantages and disadvantages of the 4% rule? As with any withdrawal strategy or general rule, there will be advantages and disadvantages. One advantage of the 4% rule is that it provides you with a safe withdrawal rate. You can be confident that your portfolio is secure and you won’t run out of money. Another advantage is that this rule is simple.  Simplicity is nice because it is easy to follow, however, everyone is different and what works for everyone may not work for you. The 4% rule may be too simplistic and too unbending. The 4% rule also doesn't account for changing market conditions, inflation, and life surprises. Another disadvantage is that you are likely to die with more money than you would like to. This could lead to regret.  Please leave a review! If you have been enjoying the show, make sure to leave an honest review on your favorite podcast app. Reviews help to ensure that those who are walking the same path of life can find this podcast easily. If you’d like the resources that go along with this episode and future episodes, make sure to sign up for the 6 Shot Saturday newsletter. OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN WHAT DOES THAT MEAN? [2:40] There are 3 big rocks in retirement planning INTERVIEW WITH JAMIE HOPKINS [7:40] Going from accumulation to decumulation can be a challenge [13:30] How to get in the right mind frame to spend in retirement [19:53] Set boundaries at work to create balance [22:45] What can you do to feel better about a decreasing balance sheet PRACTICAL PLANNING SEGMENT [29:48] The 4% rule is a safe withdrawal rate [32:31] Advantages of a safe withdrawal rate LISTENER QUESTIONS [38:15] Mountain bike questions [42:22] Assumed portfolio investment returns [51:24] Can you do Roth conversions if you plan to retire early? [54:44] Does home equity help when considering net worth? TODAY’S SMART SPRINT SEGMENT [58:37] Watch this domino chain reaction video Resources Mentioned In This Episode BOOK - Rewirement by Jamie Hopkins Rock Retirement Club Roger’s YouTube Channel - Roger That BOOK - Rock Retirement  by Roger Whitney Work with Roger Roger’s Retirement Learning Center

Welcome back to the last episode in this Listener Questions series. From time to time I step away from our usual monthly themes and dedicate an entire month to answering your questions. This week I have requested help from friends to answer your burning retirement questions. Press play to learn more about the rule of 55, Social Security, using HSAs before Medicare, and more.  Will I regret not paying off my mortgage? Mark and his wife are planners. Most of their life has gone according to the plans they made; including their timeline for retirement. However, recently their retirement plans changed. Instead of paying off their house in preparation for retirement, they decided to buy a new home by the beach with a mortgage. After careful assessment, they realized that they have enough money to live comfortably on their pensions with this mortgage payment, but Mark wonders if he will eventually regret the decision to keep the mortgage and not pay off the house.  Have you grappled with the decision of whether to pay off your mortgage or not in retirement? Listen in to hear Chad Smith from the Financial Symmetry podcast answer this question. He may provide some insight that you hadn’t considered.  Should you use a 3-4% increase in Social Security benefits when planning your retirement? You may have noticed that many financial planning tools default to increasing Social Security benefits 3-4% per year in their projections. While a 3-4% increase is the average cost of living adjustment for the program, it does not increase at the same rate each year. As a matter of fact, There have been many years in recent history when Social Security hasn’t risen at all.  Taylor Schulte from the Stay Wealthy podcast prefers to be more conservative in his predictions. He uses a 1% average increase in projected Social Security benefits when helping his clients create their retirement plans. He has found that it is better to be conservative when making assumptions so that his clients are prepared for extreme, unpredictable situations. In retirement, you don’t want to be caught off guard.  Meaning and purpose in retirement To have a successful retirement, you must have meaning and purpose in your life. You may agree with this statement, but have you ever defined these terms?  Meaning is an internal concept that is important to you and gives you pleasure. Meaning allows you to use your unique gifts and talents to feel useful. Since meaning is internal, it doesn’t matter whether society thinks something is meaningful, meaning can only be defined by you.  Purpose is an external concept that involves looking outside yourself to make a difference in the world. It doesn’t matter if that difference is earth-shattering or whether it is as simple as bringing joy to your grandkids.  The key to a successful retirement is to find activities that provide both meaning and purpose. Decide which activities are meaningful to you. Look around to see how you can make a difference in your world so that you can attain a sense of fulfillment. What will you do to find meaning and purpose in your retirement?  OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN LISTENER QUESTIONS [1:30] A rule of 55 question [4:10] The ramifications of the decision to not pay off the mortgage [8:38] A Social Security question [11:27] Using health savings accounts vs. health reimbursement accounts before age 65 COACHES CORNER WITH BW [14:04] Defining meaning and purpose in retirement Resources Mentioned In This Episode Andy Panko, Tenon Financial Group Andy Panko’s Taxes in Retirement Facebook group Chad Smith from Financial Symmetry Taylor Schulte Stay Wealthy podcast Tanya Nichols, Align Financial Rock Retirement Club Roger’s YouTube Channel - Roger That BOOK - Rock Retirement  by Roger Whitney Work with Roger Roger’s Retirement Learning Center

Welcome back to the Retirement Answer Man show. This month we have stepped away from our typical monthly themes, and instead, we are tackling your listener questions regarding retirement. Make sure to listen in July as we discuss retirement withdrawal strategies and join Tanya Nichols and me in August to discuss women in retirement.  Check out this episode to hear how you can create your retirement lifestyle framework, how to source your retirement paycheck, and whether it is best to keep the cash or pay down the mortgage.  Finding a retirement lifestyle framework A big part of beginning your retirement planning is finding a retirement lifestyle framework that you agree with. Many are drawn to the simplicity of the 4% withdrawal rule, but it doesn’t take into account your retirement lifestyle.  One member of the RRC explained that he was looking to maximize his lifestyle given his assets. This is what we are all looking to do, but it’s not as easy as you think. Many people think that you can simply come up with a base number that you can spend each year, but this is based on the assumption that your lifestyle will not change over time.  How to design your retirement lifestyle framework Without a framework in place, people tend to grab onto any random retirement planning strategy and that will drive all of their retirement decision-making.  Instead of asking yourself, how much do I need? A better way to design your retirement framework is to ask yourself how much do I need for this lifestyle? To define this you’ll need to ask yourself more questions. Where do you want to live? Define the location where you will be the happiest. What activities do you want to do in retirement? Asking yourself these questions will help you to create a plan of record. This is a more organized way of considering your life after work. You won’t get it perfect, but it will put you in a much better position to be able to iterate and change your course as needed. How to source your retirement paycheck  One listener wants to know how to source her retirement paycheck. Traditional retirement planning dictates that you drain your after-tax assets first, then move to Roth, and lastly, tax-deferred assets.  I don’t think this is a very efficient way to source your paycheck. First, determine how much you need from your financial assets over the next 5-10 years. Then, estimate what your required minimum distributions will be. (Check out the 6-Shot Saturday newsletter for a handy RMD calculator. Next, look at your 5-year income estimate. What kind of income will you have each year? You’ll always want to consider multi-year tax planning in retirement. Keep the cash or pay down the mortgage? Another listener wonders whether he should keep the $100,000 in cash that he has or should he pay down his mortgage. It is common to think of these decisions by themselves, however, you should build your retirement framework first. This will help you create a feasible plan for retirement. After creating your retirement framework, then you can create a what-if scenario. Creating the process first will allow you to be able to see the question from a big picture perspective. Listen in to hear why you may not want to zap all of your liquidity.  OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN RANDOM THOUGHTS [2:30] Find a retirement lifestyle framework that you agree with [8:02] Questions to ask yourself LISTENER QUESTIONS [12:33] Sourcing your retirement paycheck [16:27] Keep the cash or pay down the mortgage? [21:22] Is 3% average return on investment a good conservative average? TODAY’S SMART SPRINT SEGMENT [23:45] Go take a purposeful walk to think about what you want out of life over the next 3-5 years Resources Mentioned In This Episode Cal Newport Rock Retirement Club Roger’s YouTube Channel - Roger That BOOK - Rock Retirement  by Roger Whitney Work with Roger Roger’s Retirement Learning Center

You’ve got retirement questions; I’ve got answers. This month I’m tackling your listener questions. I’m also taking time to reflect on random thoughts I have about the retirement scene. Join me for this laid-back month with no set theme to learn the answers to questions from listeners like you.  Random thoughts on the retirement scene Retirement planning is not about optimizing returns. It is about securing outcomes so that you can feel confident that you can live the life you truly want. You can accomplish anything if you can just get over yourself.  Life happens in the inefficient moments.  Building long-lasting relationships requires making deposits along the way.  “If you don’t change direction you may end up where you are heading.” -- Lao Tzu There are quality, highly competent, and collaborative financial advisors out there. The industry is changing away from a salesy, male-centric attitude to becoming a true profession. Life changes, so it is important to stay agile. Make sure to adjust your plan accordingly so that you can adapt. Should you get more conservative with your portfolio as you enter retirement? Conventional wisdom dictates that as you approach retirement you should become more conservative with your investments. In investment speak, this means having a bigger portion of your asset allocation in bonds or fixed income than in equities.  However, not every person needs to follow traditional wisdom. Rather than consider your retirement portfolio from an asset allocation standpoint, consider the time frame. In retirement planning, your time frame matters. Think about how to match your assets to your retirement liabilities or yearly expenditures. You’ll want to be more conservative with the money you need in the short term but you can let your long-term assets run wild. Listen in to hear how a bucket or pie-cake strategy can help you plan your asset allocation in retirement.  How to calculate pension on a net worth statement in retirement Getting a good overall idea of your financial assets is an important part of the retirement planning process. To help you do so, you’ll want to create a net worth statement so that you can better understand where you stand financially. One recent listener asked where his pension should go on his net worth statement. The answer is nowhere.  Since your net worth statement is a list of your assets and liabilities, a pension would not belong. A pension is neither an asset nor a liability, instead, it can be described as social capital. The 3 sources of income in retirement are social capital, human capital, and financial capital. A net worth statement only takes into account financial capital. Rather than include your social capital on a net worth statement, you can instead put it on a household balance sheet where it can be classified as the net present value of cash flow. You can download a household balance sheet by clicking on the resources tab at RogerWhitney.com. While you’re there check out the other resources we have available to help you get started on your retirement plan. OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN RANDOM THOUGHTS [2:46] Retirement planning is about securing outcomes [6:22] Have you had a bad experience with a financial advisor? [9:07] If you don’t change direction you may end up where you are heading Q&A SEGMENT [10:26] A withdrawal rates and returns question  [21:20] Should you get more conservative with investments in retirement? [27:22] How to calculate pension on a net worth statement in retirement TODAY’S SMART SPRINT SEGMENT [32:50] Go do something fun! Resources Mentioned In This Episode Tanya Nichols Andy Panko Taylor Schulte Benjamin Brandt PODCAST - Wild at Heart, Summer Recovery Plan episode Rock Retirement Club Roger’s YouTube Channel - Roger That BOOK - Rock Retirement  by Roger Whitney Work with Roger Roger’s Retirement Learning Center