Everybody’s idea of a dream retirement is different. It could include cruises and vacations, volunteer work, more time with the grandkids…
But whatever you’re looking forward to… you have to take some precautions now to make sure your golden years are protected from things like inflation, taxes, healthcare costs, and more. We outline some solid strategies to make sure your financial and personal freedom stays secure.
We’ll even talk about how long you might live (since people today live longer than ever) might impact your financial planning. In fact, it’s one of the biggest risks to your dream retirement.
Listen in to discover…
The biggest factors in running out of money – and how to make sure your income increases
How to account for your “personal inflation rate”
Ways your pension or benefits plan could sabotage your spouse
Why where you save money is as important as how much
And more
Listen now…
Transcript
April Schoen: Hi, everyone, welcome. This is April Schoen, and I'm glad you guys could join us today. I'm sitting here with John Curry the author of Preparing for a Secure Retirement.
John Curry: So I'm glad to be here. I'm looking forward to our presentations. I think there's some information that is going to help people get clarity and get some focus on how to improve their retirement, whatever it means to them. That's right.
April Schoen: That's right. And I was thinking, I'm glad we've been doing the new little series of webinars last few months. That's a different topic. So I know I'm enjoying the different topics, different topics we're doing and looking forward to the ones to the ones to come.
John Curry: Same here. One of the things that I've discovered about doing webinars and podcasts is if no one ever listened, is beneficial to us, because it's helping us get clarity and take case studies that we've used before tap other people and for some people who listen to this and about to watch what we're doing, I can hear them saying now I will never retire. And I'm one of those people. And I think retirement is a terrible word. Because most of us are going to retire and then do something else. However, my friend with prior likes to say, she said, Don't retire. Oh, yeah, like that. Find something that gets you excited and move home. But the reality is, there are some things some we have some threat, some dangers that could impact our retirement. And today, we're going to be covering that and then we'll jump in if you'll allow me to.
April: Oh yeah, jump in wherever you'd like to. Yeah. So John, as you mentioned, we're going to walk through today some risks that people may face in retirement and talk about some solutions on how to avoid those risks. And then we've also got some questions that we're going to ask people just to kind of get them thinking about their own retirement, and what is their dream retirement look like? What do they want today because it's all as we know, it's all very unique and individual?
John: I think for the people that are participating today, you need to give them a little bit of your background. Because they don't know you the way I know you. So share with them your background, why you have a passion for this because the time you've been with me, you're just like going after all this knowledge.
April: Thank you for that. So yeah, so I joined John's team here at North Florida financial about five and a half years ago. And I worked with a previous firm before that for about four years. So all in all in financial services about nine and a half years. And when I first started it just the more information I learned especially about retirement planning, the more I wanted to learn, I just found it very intriguing and interesting. And now as you know, I tend to kind of geek out on this stuff. So I can I find it very interesting and I love what we do. Being able to sit down and help people and walk them through whether they're still in their working years, and they're starting to think about what retirement is going to look like for them, or working with someone who's about to step off into retirement, just like we were doing this morning, how can someone get clarity about when they retire, what it's going to look like, and what they're going to do this next phase,
John: And you're good at and you enjoy it. And that's the key, folks find somebody who knows what they're doing work with someone who has a passion for it. And I've been doing this for 45 years, a little bit longer than a year, almost a decade. I've got four decades. So I just thought it'd be important to share that. Well. Thank you.
Planning & Thinking About Retirement
April: Let's dive on in today. So as I start planning, start thinking about retirement, there are some challenges that you need to be aware of issues and challenges that can work against you in retirement. So first, we're going to talk about the seven risks. That you may face in retirement. They are longevity, inflation, savings rate, loss of spouse, sequence of returns, tax drag or taxes and rising health care costs. So the first one that we're going to talk about today is longevity. People are living longer than ever, and that's a good thing. It just requires some extra planning. When it comes to retirement, men today have a 50% chance of living to age 85 women have a 50% chance of living to ADA. And as a couple, you have a 50% chance that one of you will make it to age 92. Now longevity, john is you know, it really compounds all the other risks that we're going to talk about. Because the longer you live, the more chance that you have that you're going to run out of money and you have all these other pressures is otherwise economic pressure. It's like taxes, inflation, interest rate risk that can they just get compounded with, the longer that we're living.
John: The way I like to explain that is if I am going to live just for one or two years in retirement, then I'm not worried about inflation or taxes. I'm right. My family is not worried about it. But it's not going to bother me. If I have 20 or 30 years in retirement. Now I have to be concerned about making sure that my money lives as long as I do and worried about inflation and taxation. But if I have a short life expectancy, okay, so uncomfortable. Somebody's got to pay the tax on that. But if I have an alone life expectancy, what I've done is I've magnified the problems of taxation, and inflation, and market risk and lower interest rates, the world we live in today. The volatility takes more than a toll.
April: You know, a couple of weeks ago, John, you and I were to meet And they were talking about how insurance companies today are planning for a baby being born today living to age 150 150 years old, correct? You know, for us, it's that can be a shocking number to hear, it's just hard to even fathom. wrap your head around that.
John: Well, several years ago, the National Association of insurance commissioners required that every insurance company have at least one product designed to go to age 120 because life expectancy was improving so much, and now you have a new updated mortality table that is indicating that people living on so we have to accept the fact that that's an issue. In our planning, we tell people we're going to assume that you live page 100 right that they will never live that long night. So we don't want you to run out of money on our watch. If you want to do something different, that's okay. But we will test it to make sure that it is 100 and beyond, but at least age 100 the income is there is still one.
April: So let's talk about some solutions around this risk of longevity. One of them is going to be very obvious. That would solve the problem.
John: No, thank you. I'll just take my chances of living a long time. Yes. Just so people know, I'm 66 I'll be 67 in December. And I made it very clear that I'm gonna be like George Burns. I'm a work. I'll be 100 years old, when I died, didn't know to be angry because I couldn't help them with their retirement plan or not that speech or that training session. But on a serious note, though, I share the same birthday as Kirk Douglas, he's 102 suffered a stroke, but he's still productive. He's still writing books. He's doing things and we have to assume for planning purposes of Avalon not but you're right. What good does to say.
April: One of the kinds of more obvious things too, is to make sure that you have enough money saved for retirement so that you don't run out of money so that you can combat all these other risks that you're going to have. That will probably be a reoccurring theme as we go through some of these issues today. But not just about how much you have saved, but really, john, it's about having an emphasis on making sure that you have increasing income in retirement,
John: Correct.
This might be a good time to talk about something that I love to teach and talk with advisors last week. Then at Tampa, there are really three freedoms and we're talking about folks time, freedom, money, freedom and relationship freedom. You may have all the time at work. So let's just suppose you retire 66 or 70, and you do have 20 or 30 years ahead of you. Because you have longevity, what are you gonna do with that time, and I know we'll get into some of that later, but I just want to throw that out there that those are three freedoms that we want to make sure that all Our clients. And if you have streams of income to last you for the rest of your life, if that's one year or a hundred years, now you're stronger. repeat those freedoms one more time, time, freedom, money, freedom and relationship freedom. I've had people say, Well, what about relationship mindset? Matt shared this gentleman yesterday. My agent is I never thought of it. He said I'm good. I have the money. Now have you can because I'm working so hard in my business. So that's great. He said, my relationships are suffering because I don't have time for those people. He’s like holy cow. How to fix this is really simple. Determine what you want. You're so busy helping other people get what they want. You have no clue what you want. Right? And as if you give me 15 minutes uninterrupted, I'll help you with that. And about 15 minutes he had clarity because oh my god, this is what I want. How do I get it? So you've already got it all the pieces of the puzzle, almost always the answer is in front of you. It just takes a coach or a guide to show you that you've got it and to pull it together. And that's the fun part. That's why I'm still doing this. 45 years later, I hope I open every time I hope I'm doing this right up to the day I do.
April: I definitely want you to, we want to keep going for as long as we can. And like you said on your terms, right.
John: As long as I'm relevant, man, I'm making a contribution.
April: That's right.
Inflation & Retirement
John: Okay. Inflation. Yes, that is one of the experts that we're going to get into. So most of us know our prices are going up as time goes by the cost of milk. It costs more tomorrow than it does today. So as time passes, your savings, your income will be able to buy less. So let's put some numbers on that. Let's say that you're making $100,000 today and that the inflation rate is 3%. So 20 years from now, your hundred thousand will spend as if it's like 54,000. So you're still getting 100,000 in, but the cost of goods has gone up so much that it's not that I'm by the same, you're not gonna have the same purchasing power. So that's the danger that we have with inflation.
And I think something would be important for people to know, is when we're sitting across from someone, within our planning process we use, we can demonstrate that you saw the economic factors of inflation taxation, we can we can actually let you test drive that, right, like, how will inflation impact my retirement? So it's not us making up a number. It's taking the clients number they will send for inflation because what is a 2% down 3% or 4% every person has a different inflation rate
April: Yeah and is that in the basket of goods that we're talking about. Right? We're going to talk about healthcare and a little bit and healthcare is rising much faster than the true inflation rate that's closing the media.
John: Well, let's do this a little deeper. You'd have not talked about this for today, but think about personal inflation, right? I'm thinking of a friend, an extraordinary fact when I had to place in my town and he never went anywhere. He would come to Tallahassee once every two weeks to shop and he stayed on his back porch. He actually said his rocking chair. He said, Go out there and enjoy the lake. Now a neighbor across the street. friend of ours, they were going on average, a week out of every six weeks on a cruise. About every six weeks that's I can prove that you had the higher personal inflation rate, my neighbor next door to me or the one across the street, one across the street because they were spending more money they were buying more things that were more expensive. So we say inflation, we're talking about the consumer price index that the government is saying that your personal inflation rate good is much higher. It depends on how you spend your money, as you pointed out with the basket of goods.
April: Another thing that goes along with this too, I think, which most people associate with inflation. But it's technology. It's what future goods and services are we going to want to have in our lives or need to have in our lives? They don't even exist today. Like the iPhone is a good example. You know, 1015 years ago, there wasn't no you didn't have a new smartphone coming out, as you know, every single year and doing all the things that they do. Or now that seems very commonplace for people to have the latest and greatest gadget.
John: People want it for half a mile just to get into the store to buy one.
April: That's right. So that's, you know, we have to think about those things to there's these, again, these goods or services that we may need the future that we don't even know what they are yet. Okay, the next risk that we want to talk about
John: Before you leave that I just thought it's not just technology with new things, but also planned obsolescence, things are wearing out. You may say I'm gonna keep this phone until it dies, and when it wears out on your you can't use it. So don't overlook planned obsolescence and you're about to get into savings, right? It's important to save enough money. So we have money available, that we can replace things that were out or buy the new stuff. So we're not stuck. I call it the Brady Bunch, the TV show and then leave you about the Brady's ever Second, the 50s or 60s. We don't want to be stuck there. We want to have the ability to grow and improve, especially if we have a long way. So it goes all back to longevity. If you have a long life. We don't want to be miserable. Do we want that time freedom, money, freedom, that relationship, right?
April: That's right. Yeah, you're, you know, you want the freedom to be able to go get that new gadget, to go on that trip, together.
Retirement… Freedom?
April: Okay, good. Okay, so let's talk about savings, right, a little bit here. What we finding is that Americans, we are not saving as much as earlier generations. So I've got a couple of numbers I'm going to read out today. This is according to the retirement competence study, that 20% to 26% of Americans have less than $1,000 in savings, less than 1000. And then, according to the Federal Reserve report on the economic well being 31% of Americans have zero saved for retirement. Why is this important? You know, I would say that more of the responsibility for retirement planning is on our shoulders today than it was in previous generations. Look at the changes that we've seen the pension plans, look at potential changes to Social Security, if that doesn't get corrected. There's just a lot of changes that have happened where it's more on us. It's our responsible Ready to plan for retirement. And that's why it's so important that we save...
John: But let's talk about the two types of retirement plans. You have the old dinosaur called a defined benefit pension plan, which is going to where the dinosaur. Most companies don't have one anymore, right? People who work in the federal government, state government, county and city governments have a pension. Some corporations still do, but many of them that close them down. That's called a defined benefit plan. And then the one that most people have today are defined contributions would be a 401k for 57 deferred comps for people just like Gordon, photo three being for people who are school teachers, the university system, hospitals, things like that. Set plans for self-employed, IRAs. All of these are important, and it gives you more control over your money. However, it also gives you a false feeling of security. In the sense, you got all this money. That's great, but the game is on who is halftime when you retire Hampton. Now, what do you do? How do you make that money last year for the rest of your life? That's a big risk. And it comes right back to longevity. It comes back to inflation, savings rate, all these seven risks, dangerous threats, call them what you want. They will impact all of us, we will all have to deal with these. It's not may it is you will have to deal with, right.
April: Yeah, good. And I know in our planning, we encourage clients to say between 15 and 20% of their income, currently. And one of the things I also like to point out to people is if you're not doing that yet if you're not, you're not at the 15-year-old, a 20% level, just know that it's not something that you can do overnight. You can't just snap your most times you can't just snap your fingers and make it happen. But it's a goal. It's something we want to strive for something we want to constantly be working towards. So I encourage people just to start today and you know, start saving if you're not saving today Increase your savings by 1%. There are some things that you can do to just go ahead and get started today.
John: Absolutely. And have an emergency and opportunity funds so you're not panicked if something happens. You're not having to destroy your retirement plans, because you need more money.
April: Yes, as much as we talk about, it's important how much you say. It's equally important where you say, so that's part of what we go through in our planning process. Okay, the next rest we're going to talk about is the loss of a spouse. And we go through this with our planning as well. When a spouse passes away, you may find that some of your income stops. So you want to make sure that you have plans in place to make sure that income continues on their succession plan around income, there are wealth transfer plans. So let's talk about how can income can stop at the loss of a spouse?
John: As you were making that comment? I was thinking about a couple that Jay and I met with last week.
She has a very nice pension. She took option one with the state of Florida. Because when she retired and went to the drop program, she was not married. Now she's we're two years later, she's married. And she had totally forgotten that upon her passing, all that income dies with her. So over 60,000 a year. That's a huge amount of money.
April: Yes, it is. And it's gone.
John: And she said, how do I fix this? Can I get them to change it? We can do this too late. But fortunately, she does have other monies and retirement accounts and she has life insurance so properly coordinated, we can help her with that. But fast forward and think in terms of in your own world. If you have not made the proper choices today. And you progress me too long, you may not be able to fix it. Or if you can fix it, maybe it costs too much money to do. So, the loss of a spouse is big. from your standpoint, the pension plan, Social Security benefits are reduced for somebody dies, right? You may collect the higher you will collect the higher income, the one income is going to be lost.
April: Right. And we see that even see some accounts that have set up that way. Most time unintentionally, but we'll find accounts that someone is set up where it's just income for one spouse and not the other.
John: We see it all the time. That pensions with annuities where people were not even told about how they could have instead of just a single-life option, they can have a joint-life option. And we believe that people should be shown their options and let them make a decision. It's your money, you should be able to make a decision.
April: That's right.
You know, John, when we're doing our retirement rehearsals, the first thing that will do for a client is we projecting forward. Here's what it looks like when we retire. We pull together all of their income streams and retirement. And we play what if? What if they take so security at 62? What if they take it for retirement age delayed age 70. What do they do with their retirement accounts? There are non-retirement accounts. So we pull all that together and look at what their retirements going to look like for them. And then we'll take us a step forward and say okay if spouse a dies first what happens to the income? If spouse B dies first, what happens to the income?
John: So definitely make sure we take a look at that. And what happens when they both die, right because of their children or grandchildren, or in my case great-grandchildren.
April: The next words we're going to get into is a sequence of return. And timing, as I say, is everything. It's not just the average of returns that you may see on an investment account over time. An account that impacts your financial wealth, but it's the sequence of those returns. And most people we find they do focus on a rate of return of investment or retirement account. And they also will focus on the average, what is my accountant done? What do they know? What's the average rate that I can see? And when we're going into retirement, it's not just about the average person when you're going to receive those returns, right? Especially if you're pulling money out of your retirement accounts.
John: It's more critical than... Because if you lose $1, you can't get it back. Okay? Especially if you're taking it consistently.
April: That's right. So the sequence of return risk refers to you have now stepped into retirement, you're pulling money out of your retirement accounts. And as John mentioned, if you pull money out and you're in a down market, that dollar or the amount that you pulled out of your retirement account or your investment account, it knows Longer has a chance to work for you. So what we're looking at is an example of investor a and investor be both of these investors have had the same average rate of return, but the sequence of their returns was different. So investor a, the first six years their account was up 6% then it was up 27. And then it was down 13 investors be had a different experience. Their account was first up 7% then down 13 and then up 27. So again, they have the same average, but a different sequence of when they receive these returns.
John: So let's clarify that so in the first six years, they both had 7% growth, yes. And then the world changed for them. 2008 hit and all of a sudden you lose a bunch of your money. So for one for whatever reason they lost money, the other made money. Correct?
April: Yes. Yeah. And this could be like you said it could be timing, maybe one person retired in 2008. And someone else retired years later, when we've had this bull market, it's all comes down to timing. Again, they've had the same average return, but the sequence was different and it really impacts their ability to have income in retirement. In fact, just looking at some hypothetical sequence of returns, you're looking at a new investor that had the more positive in the earlier years. They have income for an additional six years versus investors be who experienced a downmarket earlier in their retirement. This reminds me of the retirement Red Zone we talked about, about how important and crucial it is and those first five years before retirement and then the five years after retirement, the most critical time
John: Well, we are still seeing clients who in 2008 panicked, moved all their money over to money market phones, or CDs, parked if you will. But they were so worried about this very concept about losing my money, I cannot afford to lose any more money. By definition, they lost money because I missed out on the market, right on the market growth in the last 10 years. So some people out there listen to this are like, I don't care. I'm apartment money, words, nothing the guarantees because I don't lose any money. Basically, go back to longevity and inflation. When we do that, and we do it out of fear. When we do it out of fear we lose. If some of our money is parked there to be a strategic type of savings to give us liquidity. That's one thing. But we need the ability to be in the market because we don't know when it's going to be up or down. If we knew that you and I will be multi-billionaires and we would not be living in Tallahassee doing this work day you'd have to get on a plane come to fly to see it somewhere maybe I will send the Bahamas but not the Bahamas now.
April: So sequence has returned. So it's a real risk that, again, people don't normally think of because we're we are society, we're so focused on that average rate of return. Definitely, something we want to kind of keep our eye towards. The next word for and talk about is taxes. There's really there's, there are three different types of accounts and how they're taxed. So let's kind of walk through a little bit of this first on then we'll kind of get into how this will impact their retirement. Okay, so you've got a taxable account. I call this page ago, this is going to be a nonretirement account that clients will receive 1099 from every single year because there may have been some capital gain distribution, or they may have some interest dividends that come in and it creates a taxable event for them. So they are tax as they go for these are non-retirement accounts. There are pros and cons to all three of these types of accounts. You also have tax free. So this is these are accounts that grow tax-free, and if structured properly when they pull income out are also tax-free. You do contribute though post-tax, so you pay the tax today you put the money in the account and then it grows tax-free and you can pull money out of tax-free.
Again, if as long as it's all structured properly, and then you have tax deferred. This is going to be your 401k is IRAs, four three B's any type of employer-sponsored retirement account. This is your traditional retirement account. These are accounts that you contribute with dollars today that you haven't paid tax on. It grows tax-deferred but when you go to take money out of the It's taxable. So again, there are pros and cons to all three things. And we could spend an entire webinar going through them all. But then I'll kind of condense this and saying that the people that we see that have all three of these types of accounts, it gives them greater flexibility and freedom, as you mentioned earlier, to be able to make decisions around where they pull money out of which accounts and when it comes to taxes.
John: Absolutely. Because if you're concerned about tax rates, I suppose that tax rates are low. They've been low for quite a while now. Economically speaking, and historically speaking, and most people will be shocked to know that for well over two-thirds of our tax history in this country, the tax rates are over 50%. Right, you go back to 1913. With the passage of the 16th amendment, you look at what the tax rates have done since then, this is a big number, a big number. And if we have all of our money in taxable accounts, we're told, maximize your 401k. your IRA is great. You're saving taxes today. Well, first of all, you're not saving any taxes at all. That's a bunch of little. You are simply deferring the tax into a future date. And if the date that you take your money out, tax rates have gone up, because whoever's in office as president and congress decide we will know revenue, guess what? They're gonna wheelbarrow waiting for you at the doors over time. If you truly are in the lower tax bracket, then that was a good decision. But we don't see that class we're working with they're retiring. They're in the same bracket if not higher.
April: That's right. They're not paying less tax we do not see and that's a common misconception that I'll be in a lower tax bracket when I retire. And that is not what we see.
John: Nope. Because people forget about the fact I got my pen I got my 401k I've got all this stuff for retirement income now got to add on top of that my Social Security, I've got to add on top of that any earnings on my savings account any dividends over on top on top on top.
April: It's all tax and then when you reach 70 and a half as of today, you have to start pulling money out of your retirement accounts, whether you want to or not correct. And that just gets again added on top or taxable income. Correct. So tax is definitely something we want to pay attention to. It's a little bit of an unknown because I don't know what tax rates are going to be 20 years from now, we can only work with what we know right now. So going back to having the flexibility if you have different types of taxable accounts, you're able to make the best decision at that time were to pull money from to supplement your income. The next words we're talking about is rising health care costs. This does go in line with inflation as we talked about earlier and also longevity. I will say though, what we've Is that healthcare is rising at a much faster rate than just inflation that we hear about in the media. So for example, in 2010, it was estimated that a married couple of age 65 would need about $218,000 to pay for Medicare and other out of pocket health care expenses throughout retirement. Now, but that did not include long term care. This is just Medicare and just out of pocket expenses. So back into 2010, that number was 218,000. As of today, in 2020, we're now projecting that people will need around a married couple Monique around 365,000. So you can see the change that we've had in just 10 years.
John: And many people are predicting it'd be much higher, much higher. And that's one of the reasons that I get serious. Learn about more about Medicare Social Security because clients were coming to us asking questions, then as I got closer to 65, myself, it was important to learn. And I think I'm pretty good at it. But I'm still learning things that I did not know. And there's a lot of moving parts to that. And it also depends on where you live. If you're living in, you might live in one state where the health care costs are higher than others. It depends on where you are, right? Or, you know, rural community. Are you living in Miami, New York, Washington, DC, it depends on where you are. So it's not just a flat number across the country varies by where you live, and the type of career you want.
April: Okay, so now we've gone through the risks of return. There are some risks that you may face in retirement. And you see there are some things you want to take a look at, but now we're going to dig a little deeper and a little closer at your own retire. So Everyone's retirement is it's different, it's unique. And what's important to me or what's important to john may not be important to you. So we're going to walk through a few questions to help you start defining what retirement is going to look like for you. So relationships, one of the things you want to think about as you're getting prepared for retirement, but who are the people in your life today? Are there friendships you want to rekindle in retirement? What are some things that you will do to help with these relationships? Are you going are there college reunions? Are you going to vacation with friends? What about kids or grandkids, aging parents, other people that you're going to need to support them and how will that impact your retirement?
John: I found in my own case, I had to help my mother. My natural mother had to help my stepmother and my dad died and had I not saved money, where we teach, would have had to tap into my retirement accounts. Our son was involved in a car accident in 2012 was not able to work, so we had to take care of him. So that had an impact on my income that I was bringing in, save less because of taking care of him too. So there are a lot of things that are unknown. When it comes to helping the relationships and our world that we care about. I would even include that your charitable interests or their organizations, people you care about, that you want to help them whether it's worth your time or your money.
April: That's right.
Yeah, we talked a lot about our clients. It's not just the financial piece and Okay, what's your income going to look like? But what's retirement going to look like for you? And you really need to have some clarity about how you've got all this free time because you mentioned earlier, what are you going to do to fill that time and make sure that you're still having An act when you have things to do. Okay, we also talked about housing. So will you stay in the home you're in now? Will you downsize? Will you move to another city and state? We talked about this a lot with clients about it, when are they going to move to be closer to kids and grandkids? Or, you know, having some of that, again, that freedom and that flexibility. We had some clients who sold their house and Tallahassee bought an RV and travel the country for what almost two years?
John: As a matter of fact, one of the podcasts we produce talked about that
April: Yes. And so they went traveled it all things they want to do for two years and they said, okay, we've had enough the road now then they sold the RV and bought a home and closer to kids and grandkids, right? So it's kind of fun. So it doesn't have to be always traditional. There's a lot of fun things that you can do in retirement, especially concerning travel. housing.
John: I say be creative and do what works for you to decide what you want. And then let's build a plan to get you there. But it was a knee jerk reaction. Most people say, Well, I can't do that. I can't afford that. Just this morning, the lady came at 830. We had to help her get rid of some stuff that she had gotten hung up, right? Get all that? Let's just talk about what you want.
April: What do you want?
John: Why do you want to retire on this day? This day? Why would you prefer it? And when people start talking about what they really want, including housing, all of a sudden, it starts getting clear. As the picture gets clearer and clearer as I'm getting your eyes examined, the doctor says which is better A or B? You say hey, click-click now which is where we'll be is better now. Okay, one more time. Take sleep. Well now as better sir They're getting clarity there they're getting it clearer to sleep. So the same thing with all these things was covered right now.
April: Yeah, they're all related.
John: Now related as well and you may have well-meaning friends who say we don't need that big house on the line, you know, it doesn't matter. What you need is what you want at this point in your life. Any point in your life really, and your have well-meaning Francis said Don't do this. Don't do that. But they don't they're not wearing your shoes. They don't understand what you're trying to do. And most people, most of us are guilty of being swayed too easily about what other people think.
April: Okay, talking about goes right in line with that, let's talk about that lifestyle. So what do you see your future looking like when every day is a Saturday?
John: What do you mean by every day is a Saturday?
April: Well, once you do retire, it's now not you don't want to work Monday to Friday now every day Saturday and Sunday, so what's that look like? Are you going to golf every day? Probably not.
John: I tried that, I did it five days in a row and I had enough of it.
April: So again, it goes back to what are we doing? Are we going to travel? Are you going to volunteer are their hobbies that you've been meaning to get around to that you haven't? This is a great time to start thinking about what are you going to do in retirement? And who are you going to do those things with back to the relationships, your health, we talked about health care costs earlier? Health care? It's for a lot of people it's an unknown in retirement because you're not sure what's going to happen later on. Some of the things you can do today, though, is really just taking an inventory of where you are today, health-wise, are there any you know, are there any major surgeries that you know that are coming that you're going to want to do before you go into retirement? So there are some of those things you can walk through and talk about as well. But healthy, get healthy Care. It is one of the most common topics or questions and concerns that we get about our people who are going into retirement.
John: It is complicated. We have people who don't understand how to coordinate Medicare with group plans. And they get in trouble because they didn't enroll a Medicare soon enough never pay a penalty. So I would simply tell people listening in, just pay attention to our announcements, because we do Medicare seminars and webinars from time to time. And I would encourage you to participate in that old competency as one on one about that.
April: Right. And also make sure you have a plan for it because some people retire want to retire before age 65. So before they're on Medicare, so then they have to bridge the gap for health insurance, acknowledge their group plan, and what are they going to do about health insurance before they're 65? So again, it's all part of the big-picture planning. You want to take a look at getting into some of the financial aspects. Oh, no. How do you earn your money today? Is there anything? Do you have a supplemental income? Do you have a side business? Is there consulting that you can do in retirement? You know, a lot of our clients, though, they'll retire from their career. Maybe they take a little bit of time off, and then they'll do some sort of consulting, some sort of contract work, if you will, to supplement their income. Because while they don't, they want to work full time. They want to still have the freedom and flexibility, as you mentioned earlier. And they also want to have the income that they like to have retirement, and that's one way to do it. How much debt do you have? Will it be gone by the time you retire? Is it important for you to leave money to your loved ones? How much are you saving into your retirement accounts, money markets? Do you have any other investments outside of retirement accounts, knowing what how those are structured? And then also how much is your monthly paycheck being used? four basic living expenses like your mortgage utilities, your cell phone, and will any of those expenses change your retirement? So that's some of the financial sides of looking at retirement planning. And Robert Merton wrote an article for the Harvard Business Review on the crisis and retirement planning. We actually have a copy of that john, we can send it to anyone who's interested. Very interesting piece I do highly encourage you to read it. One of the things that he points out is that people should be focusing more on what's their monthly income going to be in retirement, not just a network, not just having some magic number in the bank, but what's the actual income? They're going to be receiving retirement?
John: Yes. And I've had the pleasure of hearing him speak in two different venues. And what's cool about it is it's all based on academic research is not trying to get you to buy a product. And he's a Nobel Prize winner in economics. It's just good stuff. And I would encourage people to read and study and learn everything they can about the importance of saving and investing for retirement. And if you don't want to take the time to do that and just come see us and will guide you and we can give you plenty of stuff to read and study, hopefully starting here with these types of webinars or seminars or podcasts. And we have a lot of people who tell us they get a lot of good valuable information from that.
April: Okay, so looking at retirement, it's really it's impossible to plan financially when you don't know if you're planning for. So by looking at some of the questions that we went through today that in the question section can help you get that clarity help you have a plan, and you can use these questions to talk about with your family. So have a sit-down and have a conversation with your significant other or your kids about what retirements going to look like for you what you want it to apply your Do you have friends and family who already retired. What can you learn from their choices? both the good and the bad? Consider the risks that we've talked about, you know, how will it impact what you want to do in retirement, such as inflation outliving your money, making sure that you've done what you can to take those risks off the table. And then also working with a trusted financial professional, who has you and your best interest in mind to help you reach your goals? And that's one of the things that I think, John, we've done, we've, we've really committed to helping people with every aspect of retirement. And with that, because the truth is, they're all connected. And we've made it our mission to provide customized holistic retirement solutions. So regardless of what happens in the stock market, the economy, how it's doing now, how it's doing the future. Our goal is to make sure that you're prepared and that you're protected as you step off into retirement.
John: Absolutely, because things are going to happen. You're going to see cycles in the market, you're going to see corrections in the stock market, you can see low-interest-rate environments as we have now. If we live long enough, we'll see high inflation again will see high-interest rates. And thinking back to 1983 when I bought a house, the mortgage interest rate was 13% 13. money market funds are paying as much as 20% 20%. So when people talk about it's gonna say this way forever. No, no, it's not gonna stay low. The markets not gonna stay high is going to drop. We might even have a crash down the road, who knows? Those who plan properly will be able to weather whatever comes their way. If we get cocky, we get arrogant byways the only way we're probably going to get hurt. will probably hurt. But if we are planning and we have strategies in place, what is the tank Price go to 70%. Again, right what they go to 90%. Like, there was one time in our country's history is all of your money in retirement plans. So when you take it out, you're going to be hurt, right? But if you have some of it in Roth IRAs or deferred annuities, or mutual funds or stock portfolios, where's tax differently? Maybe you can offset that goes back to what you said earlier about the three ways that the money is the tax. But it's first important is to determine what it is you want. And then start working toward that. Whether it be with us or someone else, or by themselves, you get a plan and then stay focused on that plan. So you're not chasing shiny objects, whether it be a new product that you hear about, or Oh, the talking heads on TV until many moves all my money out of the stock market because it's going to crash tomorrow.
April: We can all be guilty of that right chasing the shiny objects?
John: Yeah, well, but I think the key is With your money, what works for me over the years I remember way back in the early 80s, a guy john savage is his name. He said you should have two savings accounts john, you should have your Save to save account and you're safe to spend. That's why I have zero guilt when he was in my wallet, where all my personal credit cards if I wish to spend it, I can go spend it, go for it. I know I can have that money to play with my serious money, different issues. I don't invade that. And then the nice thing is this point in my life some people just want to I don't have to go to work. I get to go to work. I don't have to sit here today. I could take the rest of the day off or not and then go back to a station or go for a ride on the same more show on the bicycle. But we have to determine what it is we want. And I'll say that 1000 times. What I want is much more important. What I need. Now my need and want the same thing. But I need a pair of shoes or my case cowboy boots. I'm at what? 20 pairs, I don't need 20 pairs but is more of what I want is for you ladies, you don't need 14 handbags or 900 pair of shoes...
April: I might need fourteen handbags.
John: If you want it, you're gonna get it right. That's right.
April: Good. Yeah so I think as you said all you know, all that comes down to have we talked about before, which is having a plan in place, you know, having some clarity about where you are they what plan, you know, having a plan in place to get you to this retirement goal one day. So I encourage you to know, those, you know, listening in to schedule a time for a phone appointment, they can do that they can schedule a 30-minute phone appointment with me they can schedule with you, john with Ed or j on our team as well. And it's just an introductory call to get the process started. So this call would be more just to learn more about them what they're trying to accomplish. We can talk a little bit about our planning process. But really it's more about what their goals and concerns are, and questions they may have we covered a lot of material today. So there may be some questions they want to do again to you as well as other topics.
John: I agree. And I think it's time well invested will say spent because, in a 30 minute 20 to 30-minute telephone Obama, we can determine whether or not we're a good fit. And I think something should be said there. We don't believe in pressuring or pushing anyone to do anything. That's why we love doing webinars. If you've listened today, and you've learned something that you think would help you but you're not sure. Give us a call. We'll have a conversation with you. If you're to the point of where you know for a fact that that you want to meet with us then give us the columns I like to schedule on the public to come in and we'll meet with you face to face. So we can Be California bone face to face, some of our live events, whatever works for you.
April: So the best number to reach us on is if you're in Tallahassee, the best number to reach us at is 850-562-3000. That's the main number for our office. And you can just let that Jay or Debbie know that you'd like to set up a time for a phone appointment. You heard us on a webinar, and you'd like to set up a time for a phone appointment with either one of us John, John Currie or April Schoen. Also my information, I can be reached at 850-544-8464. I live in Jacksonville, but I traveled to Tallahassee for client meetings. But then we have clients all over the state of Florida and about 14 or 15 different states
John: I've lost track.
April: So the location isn't as important when working together.
John: Where you mentioned technology earlier with modern technology, we have been able to do a Skype meeting or go to a meeting or join me. It doesn't matter where the client is, we can help them. We have a class where now we've done Skype meetings for Hong Kong, London, Rome, right? It's pretty cool, actually.
April: Good. Well, thank you, everyone, for joining us on the call today and we look forward to seeing you all in one of our future events. And John, thanks for taking the time.
John: Thank you for doing this. I'm glad you put this together and April these credits because this is a topic that she thought we should do to kind of summarize because in an hour and a half or three-hour seminar, we can cover a lot of stuff but I thought this is well done. Thank you for putting it together.
April: You're very welcome. Glad to do it.
Voiceover: If you would like to know about More about John Curry’s services you can request a complimentary information package by visiting johnhcurry.com/podcast. Again that is johnhcurry.com/podcast, or you can call his office at 850-562-3000. Again, that is 850-562-3000.
John H. Curry, chartered life underwriter Chartered Financial consultant accredited estate planner, Masters in science and financial services certified in long term care. Registered representative and financial advisor of Park Avenue Securities LLC. Securities products and services and advisory services are offered through Park Avenue securities a registered broker-dealer and investment advisor, financial representative of the Guardian Life Insurance Company of America New York. Park Avenue Securities is an indirect wholly-owned subsidiary of Guardian, North Florida Financial Corporation is not an affiliate or subsidiary of Park Avenue securities. Park Avenue Securities is a member of FINRA and SIPC. This material is intended for general public use. By providing this material we are not undertaking to provide investment advice for any specific individual or situation or to otherwise act in a fiduciary capacity. Please contact one of our financial professionals for guidance and information specific to your individual situation. All investments contain risk and may lose value. Past performance is not a guarantee of future results. Guardian, its subsidiaries, agents or employees do not provide legal, tax or accounting advice. Please consult with your attorney, accountant and or tax advisor for advice concerning your particular circumstances. Not affiliated with the Florida Retirement System. The living balance sheet and the living balance sheet logo are registered service marks of The Guardian Life Insurance Company of America, New York, New York Copyright 2005 to 2018. This podcast is for informational purposes only. Guest speakers and their firms are not affiliated with or endorsed by Park Avenue Securities or Guardian and opinions stated are their own.
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