In this episode, April and John dive into the critical financial risks that individuals face as they approach or navigate through retirement, and share valuable strategies to avoid these pitfalls and enjoy a secure retirement.
Listen to learn:
The top five financial risks individuals face in retirement
The problem with traditional retirement planning methods
Effective strategies to mitigate risks associated with market volatility, inflation, taxes, healthcare costs, and longevity
How to build a balanced financial structure
And more
Mentioned in this episode:
Transcript
April Schoen: Hello, and good afternoon. Welcome. So glad you're here. My name is April Schoen and I'm sitting here today with John Curry.
John Curry: Hello, April. Hello everyone.
April: And today we're going to be talking about the five financial risks that you're going to face in retirement and how do you avoid those. Now today, we're going to be focused in on five financial risks, but know that there are more, but we're gonna talk about the top five today. And so first, I just want to acknowledge you for being here today. Because it's so important that you do take time to get ready for this next phase of your life. Or maybe you're already in retirement.
You're like, hey April, I'm already here, but I still have these same risks, how do I navigate those? But it's just important that you're taking the time. So I just want to acknowledge you for doing that today. And this talk that we're going to be going through today is ideal for anyone who plans to retire one day, that could be that you're close to retirement. And like I said, maybe you are already retired.
So it doesn't matter what stage of life you're in right now, no matter if you aren't where you'd like to be financially at this point, maybe you're not quite sure where to start. Or even if you think you've got everything just the way you need it to be. Because the questions that I would ask would be, how many of you would want to retire with less stress? How many of you would like to not have to worry about money, and to have that time, freedom, that money freedom to go and enjoy all the things that you want to do at this stage in your life.
Because if that's you, that's great, that's exactly what we're going to be talking about today. And that starts with addressing these critical financial risks that we have in our lives and trying to eliminate them and reduce them as much as possible. So as we get started into this today, let me just tell you a little bit about us and who we are, and how we help clients. So John and I, we typically help people get ready to retire. We're based in Tallahassee, Florida, so many of our clients are members of the Florida Retirement System.
But we work with people in the private sector as well. And what we find is that sometimes clients when they first meet us, they may struggle a little bit because they've been just so busy with their careers and their family, that they haven't had the time that they'd like to devote to their finances. So they feel frustrated, they feel anxious. Especially as they get closer to retirement, because they want to make sure that they're making the right decisions for their future, but they don't know how to get started.
So what we do is we help them understand a lot in a short amount of time, so that they can make better decisions, they can feel confident about what they're doing. And the end result is that they have systems in place. And they're confident that their money is actually working for them and that they're on track to reach their goals.
John: Absolutely. And I think the most powerful thing is to get clarity on what they're trying to accomplish. Simplify, simplify, simplify. And most people make things too complicated. Too many moving parts. So I would say the value we bring to the table, is number one getting clarity on where you are, what you're trying to accomplish, and then determine a game plan to get you there and then take action.
April: Absolutely. You know, I was just thinking of one of my clients, one of our clients, John. Janet, who when we first met with her, she was 57. And she never thought that she was going to be able to retire. We were asking her, you know, do you plan to retire? What's your plan around that? And she said, oh, no, I'll never be able to retire. And that was like a keyword. It's not that she didn't want to, it's that she felt like she wasn't able to retire.
So when we kind of dug in a little bit and said, well, what if we could show you a way to do that? Like, would you like to see that? Would you like to be able to retire one day? And she was like, oh, yeah, I'd love that. And we were able to help put a plan in place for her. Now that said she was 57. She knew she was a little behind on getting started. So we were able to put a plan in place for her to retire at 70. And what's interesting, and this was several years ago when we first met with her, but she's ahead.
She's ahead of schedule. And I love seeing that. So here's a plan we put in place, and she was happy with it. And here we are a few years later and being able to review that again and say hey, where are we at with this? Wow, you are doing better than you had thought you were originally gonna do. And now you're ahead of schedule.
John: I can tell you, in 49 years of doing this, we've had a lot of those conversations. It's fun to be able to show someone you either are on track, better than you thought, or you're ahead of schedule.
April: That's right. And Janet was like, you know, I could have never done this without you guys. And I said that's very, very nice of you to say that. But really, we just showed you how to do it. You had to take the action.
John: We just talked about that a few minutes ago.
April: That's right. We did.
John: Same thing. We can coach and guide. But the bottom line is you the client have to take action in order to make it happen. We can coach and we can guide, but we can't do it for you.
April: Yeah. And she's a great example of looking at, what do we want in the future. And where are we today, trying to figure out those two things are in alignment are some changes needed. And for her, we did have to put some changes in place. But I think she's also a great example of what's possible as well. So today, as we're going through this, we're going to be talking about some key items. We're going to talk about why traditional planning doesn't work for retirement.
We're gonna go over the five financial risks in retirement, and how do you avoid them. And then we're also going to go through some questions for you to ask yourself so that you can be prepared for retirement. Now, that can be for someone who hasn't retired yet, or maybe you're already there. But these are some great questions for you to review as you're thinking about this next phase of your life.
And this is why this is so important because the decisions you make will determine your destiny. I'm gonna say that again. The decisions you make will determine your destiny. And most people make these decisions based on feelings. And what we want you to do is we want you to make these decisions based on facts. Based on knowing all your options. Being able to evaluate what's best for you, so you can make the best decision.
And that's how it will guide you. Now, John has been helping clients for 49 years, almost 50. And I've been helping clients for 14 years. So in this time we have today we're not going to be able to get all the information out of my head and all the information out of John's head. We're going to try to give you as much information as we can to make this impactful for you. But if it's okay, we're going to save some time at the end so we can talk about how we can customize this for you. But don't stop listening.
Okay, we got some good stuff we're going to go through today. But we will save some time at the end to talk about how to customize this for you. So as we get into this, we're gonna start with talking about this first piece, which is why traditional planning doesn't work when it comes to retirement.
Now, the first thing you may be asking is, well April, what is the traditional plan for that? What would we say would be something that would be considered this traditional approach to retirement? And as we go through this, I say this is a traditional approach to retirement, it's probably the most common, but it's definitely not the one that gives you the best options or gives you this optimal approach to retirement. It doesn't give you the best outcome.
And you may have heard of this rule before, it's sometimes called the 4% rule, or the safe withdrawal rate. So we're gonna get into what that means. And there's a lot that we've learned about this plan, this traditional approach, and what happens with it, and why it does not cause a good outcome for people.
John: May I give you my explanation of the traditional approach? It's simply this. How much money do you think you need in retirement? And then the advisor looks at what you've got and projects to the future, some interest rate. And if there's not enough, they simply put a higher interest rate. Well, we maybe we can get 10 or 12%. So the traditional approach has been to tell me what you need, what you want. And the truth is very few people know what they need and want. It's like me going to a doctor, and I got my arms crossed.
Hey, doc. Figure out what I've got. I'm sick but I'm not going to tell you what it is. Figure it out. And the approach we take is totally different. It's what do you have? How do we make it better? And reduce risk as much as possible? And that is definitely not the traditional approach. More and more people are taking risks that are totally, totally unnecessary.
April: That's right. Yeah. And this traditional approach to retirement planning, like as you're getting closer and saying, like, what's my retirement income going to be? It really involves saving as much as you can into some type of usually a retirement account like a 401k or could be deferred comp or a 403b and then when you retire, you're going to take out a small amount from your retirement accounts like a fixed rate. And at this point, you're hoping that you don't run out of money.
But that's where that 4% rule, or sometimes it's called an interest-only strategy. The idea is that you've got this money invested, and you're going to pull 4% out of that portfolio, right? That's the idea behind it. But what happens with this strategy is, it actually causes you to have less income. Think about that for a second. If you have a million dollars, and you take out 4%, that's 40,000. That doesn't always feel like a lot compared to what you have.
John: And that's gross before tax.
April: Before tax. So it causes less income. It causes you to have more taxes, because every dollar that comes out is always taxable. You cannot escape the tax man with this strategy. It's impossible to do. We were just talking some clients this morning. And every time we got to talking it's, what's the tax gonna be? What's the tax gonna be? And so it's a very real concern that we talk about all the time, is taxes.
John: And the example this morning, you just mentioned, our dear friends of many, many years, almost 40 years, he is guilty of allowing the tax tail to wag the economic dog. And once he realized that the taxes were not that big of an issue, he was more receptive to the strategies. But he's always been that way. He's always been worried about I don't want to pay taxes. I pay too much in taxes.
April: That's right. But there are things you can do right to mitigate. Sometimes we're kind of stuck. But if we do good planning, there are things that we can do about the taxes. This strategy causes you to have more risks because you're always at the mercy of the market. You have to always be invested, you can't not be invested. And if you think about the stock market the last few years, okay, and especially thinking about 2022, when you had the stock market down 20%, and bonds down over 10. This is a recipe for disaster.
John: Nowhere to hide that year.
April: Nowhere to hide. That's right. And this also means that you have less liquidity. So I'm going to take a minute and talk this through. Because every dollar that you have allocated to create income for you. Now, it's not liquid for other things in your life. So what if you want to take that trip? What if you want, I was talking to someone earlier, and she wants to remodel her kitchen. What if you wanted to do a remodel or you just have general repairs that need to be done?
So the issue with this approach is that you don't actually have access to those things when you need it. So let's explore why this doesn't work. Why this traditional approach doesn't work. And that's because this traditional approach, I get it, it's kind of pretty easy to do. But what it fails to realize is that there's a difference between saving money and spending money. We now don't have the benefit of 30 or 40 years in our future.
We have one year, right? We gotta have income every single year in retirement. And we have to realize that it's a different plan when we're spending money than when we were working and we're saving money. So we have to treat it differently. So let's talk about the differences of those between distributing wealth or spending money and accumulating wealth and saving money. What's the difference between these two things? They're very similar, right? And we're going to talk about these risks today.
Realize that there are all these financial risks that we actually have present during both phases of our life. While we're working and when we're in retirement. But these risks, they affect us differently. And we have to approach them differently. So I want you to, I want to use this analogy. And you'll see in a minute, but I want you to imagine, I want you to think about climbing up and down a mountain and how these are similar activities, but they're very different.
So I want you to think about gravity, and how in this analogy of climbing up and down a mountain. Gravity's always present, right, it's always there. But how you react to it, and how you deal with it is going to be different. So if you've ever fallen going up a hill, okay, or fallen going down a hill, you know what I'm talking about? Gravity impacts you in two different ways.
I also want you to think about Mount Everest for a minute. The majority of actual injuries and fatalities occur on the descent from Mount Everest, not the climb. It's when they're going down the mountain that there's the most fatalities. So when we think about retirement, and so instead of these forces of nature, like gravity, we have economic forces to contend with. And these are those financial risks that we're gonna go through.
And as we go through them, I think you're gonna see one that you've lived through these before. And so you've lived through these already. And you're going to see how they're going to be relevant to you in retirement. So let's kind of get into talking about the difference between when we're saving money, and then when we're spending money.
John: Let me address something real quick here. In 2000, 24 years ago, June 2000, I went to the Boy Scout Ranch. In Philmont. And it was a 12-day hike, 85 miles. So I hired a trainer to help me get prepared. We spent more time on coming down than going up. He said, most people they focus on gotta climb this mountain. But how do you get down? Because we had a lot of hills. It was mountains.
And we spent time working on specific exercises, April, to make sure that I had sort of muscles developed, carrying a 50 to 60-pound backpack. And I had no problems. I had people half my age at the time who were having trouble because they focused on climbing, but not coming down that thing. It's not just in the world of physical life, that it applies to the financial side.
April: Oh, absolutely. Absolutely.
John: Physical and fiscal.
April: Yeah, I like that. So let's talk about one of the first risks that we call mortality. But really, this is the risk of dying. Okay. And so when we're working, this risk is what if I die too soon?
John: Whenever I die it's too soon. What are you talking about?
April: This is true, this is true. I agree with that. But when you're working, you think about what will happen to my family. So I'm gonna give you an example. I'm 40. I'm married, I have two boys that are seven and 10. So if something happened to me tomorrow, I want to make sure that my family is taken care of financially. And I've done that through the planning that I've done. But I want you to see how this changes in retirement.
Because when we step off into retirement, we're not worried about dying too soon, we're worried about living too long. Okay, what will that do to my financial resources? Will I outlive my money? How will my health be if I live a very long time? So do you see how it's the same risk, but it impacts us differently? And here's the thing. I hope all of you live a very, very long time in retirement and have a beautiful, beautiful life, as healthy as you can be.
That's what we hope for. But we have to plan for those things. But you know, is the same risk, but it just impacts us in two totally different ways. So let's think about what happens if you got sick or hurt. Think of an illness or an injury. Well, in my working years, the concern is what happens to my paycheck, right? If I get sick or hurt tomorrow and can't come into work, what's going to happen to my paycheck?
What's going to happen to my income, am I still going to be able to pay my bills? But in retirement, this threat isn't what happens to my income. It's what happens if you have a high cost of care? What happens to your assets? Because your assets tend to be the thing that protects you from that.
So what are we doing to make sure that you're not going to have an issue there? We've got to have a plan down the mountain to address that risk of what happens if you get sick or hurt. Now these two risks affect us on a one-on-one basis, right? It's very individual. John's mortality and my mortality, your mortality, the risk of us getting sick or hurt are very, they're very individualized.
John: Let me say one thing. Mortality is guaranteed to be 100%.
April: Correct.
John: You are going to die. Only question mark is when and how will you be prepared for it. In different ways. Financially, spiritually, whatever.
April: Now, there are some other risks that are broader, that are more economic in nature. So the first thing we're going to talk about here is market volatility. Now market volatility while you're working, it actually is your friend. And it actually helps you, because when we have market volatility and you're saving money, you're putting money into the stock market, it actually can help you have a better rate of return.
But this same thing that helps you while you're saving money in your working years, hurts you in retirement because you have what's called the sequence of return risk. It only takes a few down years in the market when you're taking money out for it to start this downward spiral. Let me explain what I mean by this. If you're taking money out of your accounts, and the stock market is down, now your account has to work even harder to get back to where it was us.
Because when you take money out, now you've locked in those losses and what's left in that account has to work even harder just to get back to where it was not even just accounting for what you took out, took out that account. And so this is something with proper planning that we can make sure doesn't impact you. Because we just can't be at the mercy of the market, something that we can't control.
And then we want to think about taxes, which is taxes is what we talked about earlier. And the primary way that a lot of people save for retirement is they use traditional retirement accounts. That's that 403b, 457 plan, that's that 401k. And these tax-deferred vehicles, easy for me to say, can be a great place to save money to put money because you feel like you're gonna use quotations, saving on the taxes, but you're not really saving, you're just deferring them into the future.
And so it can feel like a good place to put $1. But then it's going to feel like the worst place to spend $1. Because every dollar that comes out is going to be taxed at your highest marginal rate. And depending on what tax rates are, you could actually find that you've done some reverse tax planning.
John: I see it all the time.
April: Meaning that you saved taxes today at a lower rate, just to pay them at a higher rate later. That's not what you intend to do with that, that's not what you want to do with these tax-deferred vehicles. But that's something that we see. Because a lot of people think, they've heard, they've been told that they are going to be in a lower tax bracket when they retire, but we don't find that to be true. Most people are in the same tax bracket or higher. The next thing is going to be on inflation.
So inflation, and we've been talking a lot about inflation these last few years. And while we're working, a lot of times, you don't feel the effects of inflation. Now, sometimes you may see something very specific, like the price of gas, right, that's something that's easy for us to track. And in the last few years, we've definitely heard a lot about inflation in the media, so we pay attention to it more. But when we're working, as we earn more money, as we get pay increases, as we get raises, as we change jobs, those pay increases help combat inflation.
So when we're in retirement, and we feel like we're on more of a fixed income, and now that everything goes up, gets more expensive, especially health care, you only have two choices. I can take more money out of my accounts, which means I'm taking more risk that I'm going to run out of money. Or you can spend less. You can downsize your lifestyle. That sounds good.
John: That's exciting. That's a heck of a retirement. So I've worked my tail off for 30, 40, 50 years, and then I'm gonna go into retirement and spend less because I'm worried about inflation. And I don't want to take it out because I gotta pay taxes. And that's what people do, and they're calling it a trap. Their money's locked up, they can't enjoy the money.
April: And we find for most people, we don't want that for you. We want you to keep the same lifestyle you have today. In fact, I want you to have a better lifestyle. I want you to be able to do more in retirement. Because now you're going to have all that time. So now that I have time, do I have the money to go do the things that I want to do? So because these risks affect us so differently in retirement, we need to have a different set of rules to follow.
And so we're going to share with you some of the rules that we follow in our work with clients. And these are things that we worked on and tweaked over the last few decades to help people have a better outcome. And so as we kind of get into this just know is what we're kind of thinking of is how do we mitigate some of this and put you in a better position. So the first thing that we want to do is we want to manage those risks that we just talked about.
Because what gets people in trouble is that their account isn't invested properly, although that can be a contributor. The issue is that we haven't dealt with these risks. So we need a plan to deal with inflation, to deal with market volatility, to deal with higher health care costs, taxes, and living too long. And how we do that is we first want to look at your cash flow. So I want you to think of like cash flow allocation, not asset allocation, cash flow allocation.
And when we're looking at cash flow, we're looking at your retirement income. We first look at guaranteed sources of income. We want enough guaranteed income to cover those basic living expenses. So that could be a pension, it could be Social Security. And then we want to look at having other variable incomes to cover discretionary spending. And one of the challenges that we face, even when looking at this cash flow allocation, again, is that loss of liquidity that we talked about earlier.
That's true for both guaranteed sources of income and variable income. We often think of money being able to do two things at once, but it really can't. So what we want outside of this cash flow allocation is we want to have true liquidity. And true liquidity to us is money that's not allocated to pay you an income today, or in the future.
So this bucket is here for you, whenever you need it, whenever you want it. You're free, right, without impacting your income later on. And then we also want to work towards minimizing taxes. So we want to look at ways how do we reduce taxes. How do we minimize, and strategically eliminate them over time? I'm going to explore all that so that we're not just at the mercy of whatever the tax rates are, especially if taxes go up.
John: Did you just say if?
April: If, if.
John: We know they're going up. The question is when?
April: Sooner than later.
John: I wish we had time to talk about taxes more, but just a reminder that in 2025, under current law, the income tax rates will go back to what they were before at the end of that year because they're gonna be sunset unless something changes in Congress where they make it permanent, but it's temporary now.
April: That's right. Two more years of current tax law before that changes. So let's talk about how do you have an optimal structure or a balanced structure. So first, we want to have that bucket that's going to give you the liquidity. This is something that we talk about all the time with our clients, sometimes we're kind of beating that drum. Broken record about that liquidity.
John: But it's so important because so many people, they don't have enough money liquid, that if they have an emergency, and then we see people have to raid their investment accounts with their retirement accounts, and the retirement account is the worst place in the world to go pull money out.
April: So we first start with having this true liquidity. And then we will look at again, on this income plan we first look at those guaranteed income sources. So what do you have as far as social security income? Is there a pension? Is there an annuity? Where's that guaranteed income coming from? And we want that to be enough to cover those basic living expenses. And then from there, we want to have two other buckets on your balance sheet.
We want to have one for variable income. So I want you to think variable, I also like the word discretionary. Because we've got basic living expenses covered. So then we want a bucket we can tap into for discretionary income. You want to take that trip, you want to remodel the house, you want to help the kids, whatever that is, but to have this bucket that you can tap into for discretionary income.
And then you also want assets that are going to continue to grow on your balance sheet. Because we know that you're going to need more income tomorrow than you do today. Back to that inflation piece. So if we're going to try to combat inflation, we've got to have buckets on our balance sheet that are continuing to grow, that we're not tapping into yet, yet to being the key word for income.
So this is this structure that we look at from a retirement planning standpoint for clients. What kind of liquidity do we have? Do we have enough liquidity? What are our guaranteed streams of income? And then we want to have discretionary income, and then also growth buckets as well. Because if we do this, and we do this well, we want to create, where we've got this team, think about a team of specialists where each bucket of money is doing exactly what it's intended to do.
It's not doing multiple things. It's doing exactly what it's supposed to be doing. And by doing this, it can help us, we can take less risk. We don't have to be as risky with our money. We can save on taxes by looking at how we're taking the income from our different buckets. And we've got that liquidity. And ideally, we should be able to produce more income as well. So everything is allowed to do its job, just not a different one.
John: Specialty. Like you said.
April: Yes.
John: It's doing its job.
April: It's doing its job. So important. We are big fans of a bucket strategy for it to have its job and to do that well. So as you're trying to think about retirement for yourself, there are some key questions for you to think about and kind of answer as you're getting prepared for this next phase. So let's go into thinking about these next questions to ask yourself so that you can be prepared for retirement. And when we think about a retirement vision, I want you to think about what do you want retirement to look like for you.
And there are five key areas that we look at. Relationships, housing, lifestyle, health, and financial. So with relationships, think about who are the important people in your life. What about kids? Grandkids? Are their aging parents that you're supporting? We're seeing that more and more. Those that are still working too, sometimes call it the sandwich generation where you're taking care of parents and kids at the same time. And then will you need to support any of them in any way?
But I think it's important to think about who are these people in your life that you want to spend time with. Because again, if we step off into retirement, we're not working, what are we going to be doing with our time? We talk about a lot with clients about making sure that we're retiring to something, not from something. And now that you're gonna have all this free time, what are you gonna do with it?
John: What good is the time if you can't enjoy it? If you can't afford to do the things you want to do? So you can have all the money in the world. But if you don't have the time, is the money that important? And vice versa?
April: That's right. And then what about housing? Will you stay in your current home? Will you downsize? Or will you move to a different city or a different state? I was just talking with a client earlier today. And she's planning to sell her house in the next few years. She doesn't know exactly when. But she's in a big house. She said she doesn't need a big house anymore. It's just her. It's an older home. So it's got some expenses that come with that. Lots of repairs. And so she's considering downsizing. We've had clients that when they retire, they move. I'm thinking of a couple who moved to Orlando to be next to their daughter who was about to have a baby. And that was part of their retirement plan.
John: You know something that has surprised me in my career. In the last 10, maybe 13 years, I've seen more people who just pull the plug and move somewhere. I'm thinking of how many people do we know that moved to North Carolina, North Georgia.
April: Virginia.
John: Virginia. That just simply said, okay, we're unplugging, and I'm like, what? Your life has been yours all these years. And they're just perfectly okay with doing it. 20 years ago, people didn't think that way. But today, we've become more mobile. And people are okay with, hey, I'm just gonna start over. Surprises me. Surprises me the number of people we've had that did that. And it's working for them. But also we've had people move to be closer to children and grandchildren, and they go, oops, that was a mistake. Because now we're nothing more than a glorified babysitter. Remember that?
April: Yes. Yes. And then oh, here's one thing, too, I was going to say about if you do you plan to stay in your home, because we talk about this a lot, is aging in place. So if you're staying in your current home, then we want to have a plan for aging in place. So what are some of those things, those renovations, those remodels that you can do now, so that your house is better prepared for that?
John: I can speak to that one for you. After my amputation, I had to totally remodel my house to where it was wheelchair accessible. Totally had to redo it.
April: So wheelchair accessible, having grab bars, having walk-in showers, roll-in showers. Plan for around stairs. These are all things that you can do to age in place. The other thing I think about too, is just as normal kind of big-ticket items for your house. So a lot of people will replace the roof, replace the air conditioner, and kind of get some of those big ticket items done while they're still working. So they don't have to worry about it in retirement.
John: But there's an issue here. Sometimes people discover that it costs more to downsize than to stay where they are. With the cost of real estate today, and selling that and having to pay a higher property tax. We're seeing more and more people are taking the route of you know what? I think I'll take the money, do the improvements and just stay where I am.
April: That's right. I've seen that a lot. And then, what about lifestyle? What will your lifestyle be in retirement? So I hear this a lot. Hey, we don't have you know, big plans for retirement. We just want to keep the same lifestyle that we have today. But what will you do? How do you see your future when every day is a Saturday?
And what I mean by that is, if you've been working Monday through Friday, and you've just had the weekend to go do what you want to do. What about now that you're in retirement and every day is the weekend? What will you do with your time? Now, we've got clients who say all the time, they're busier now than they were when they were working.
They don't know how they ever managed to have time to work, because their social calendars are so full. I love one of our clients, this is when he was 90, and we were trying to schedule a time to meet. And he said, you know, April, I've got to give up some of my social commitments because I have no free time. And I just love that. And that's what I want to be when I'm 90. I want to have a social calendar so full.
John: That's why he's 90. Because he's kept active.
April: That's right. And then how about those things that you've always wanted to do? And I say life got in the way, but maybe we should say work got in the way. What will you do now that you have the time? Will you volunteer? Will you work on a hobby? Is it golf or pickleball? What are those things that you're going to do now? I was just talking with some clients this week, and they had just been golfing that morning.
And that's something that they do several times a week together. And that's part of their lifestyle in retirement. What about your health? So health care costs are a big unknown in retirement. So there are a couple of questions for you. How much do you currently spend on health care? A lot of times we don't know. We don't know how much we're spending on health insurance. We don't know how much we spend throughout the year on healthcare costs.
And are there known healthcare concerns that might impact you? That's something that you know that you need to plan for? Or is it just going to be more of those unknown issues? When we think about health, a lot of people wait to retire to 65. So they can have health insurance, they can go on Medicare? So do we have a plan for that? What is that going to look like for you?
And I think about just not your health but others' health. Are there other people that you're going to have to help? Or is that going to impact you in some way? And then of course, financial. So financial, couple of key questions for you to think about here. But how do you earn your money today? You have a salary and an income but, how do you earn your money? Do you have any debt? And will it be paid off by the time you retire?
How much money are you putting into savings? So if you know how much your gross income, then how much are you putting into some sort of savings and investment retirement accounts? How much are you putting back on your balance sheet somewhere? And then do you have a spending plan for retirement? I don't like the term budget.
I think it has a negative connotation. I think of a budget like going on a diet. It's very restrictive. You know what, you're not going to stick to a budget very long. And so instead of having a budget that's very restrictive, because with a budget, what we do is we try to say what's the least amount that I can spend, but that's not living your life.
John: We've been talking about time quite a bit. I just had a thought. Think about this, it doesn't matter if you are an employee, or if you're self-employed. What you're doing to earn money is your trading your time, and your talent, and your skills in exchange for money. So if we live long enough, we're gonna find that we may, not may, we will diminish somewhat in those skills and talents. So we hear people say, well I'll never retire. Well, you may be forced to retire because of health issues.
So as long as you're able to work, I'm 71 years old, I'm still working. About three days a week, enjoy what I'm doing, love what I do, so I don't wanna quit. But I want to be able to not work if I don't have to. I've been able to put myself in a position and I call it being financially independent, where I don't have to work, I get to work. And I hope that everybody listening will buy into that concept. Put yourself in a position of work if you want to, but not because you have to.
April: Absolutely. And all of these pieces help with that. Because you might look at the financial side and say, well, I could retire today, but I'm going to continue working because I want to. That puts you in a totally different place.
John: Puts you in a different place mentally, physically, emotionally, where you don't have to put up with nonsense if you don't want to deal with it.
April: So in going through this today we've talked about why traditional planning doesn't work for retirement. We talked about five financial risks in retirement, and how do we avoid those. And then we also went through some questions to ask yourself, so you can be better prepared for retirement. And what you might be wondering now is, okay, April this sounds good, what are the actual steps that I need to take to get there?
And that's an area in which we can help you. And so what we would recommend is the next step would be is to schedule a focus session. Okay, this is where we can start working on your own personal retirement roadmap, is by scheduling a focus session with us. So you do that, you book your focus session by going to our website, which is curryschoenfinancial.com.
And you're going to see, you can click on schedule a call in the upper right-hand corner.
There's gonna be a button for you, it's going to bring you to a calendar, and you can pick a day and time that works for you. You can also call our office at 850-562-3000. And here's what's gonna happen on this call. The first thing we're going to do is we're gonna get clarity. We're gonna get real clear about what are your goals. What are your concerns? What are some opportunities that are available to you?
We're going to talk about that kind of roadmap, we looked at earlier and see, where are you today and do you have some of those pieces in place? What are the roadblocks in your way? And then usually, we have a couple of ideas that we can share with you to help make some tweaks, make some changes that put you in a better place.
So this call, it's really for you, if you're motivated, you're an action taker, you're open to new ideas you're willing to learn. But the call is not for you, if you're not motivated, you're not willing to learn, or you're just looking for some unpaid consulting. And so the best way to schedule that call, again, is to go to our website and click on schedule a call on the upper right-hand side.
So I'd say while we're even on this webinar, or you're listening to this later, I'd recommend you go ahead and book a call while it's on your mind because life gets busy. We forget to do the things that we want to do. Or we think we're going to do it soon. And the next thing we know, it's been six months. And so there's a cost to waiting. And this cost of waiting is we don't have clarity, we don't have direction, we don't reach our goals on time. And time is a precious asset when it comes to wealth building.
You know, I think back to our client, Janet, the one we talked about earlier. And she'd been really busy building her career. And then she realized that time was slipping away. And she started to worry. And when we sat down and looked at everything, she told me, she's like, I feel like I'm behind the eight ball. And she was taking on a lot of risk in her assets, in her retirement account, way too much risk because she was trying to use the market as a way to save less.
But you know, it doesn't always work out that way. Not a very good way to go about it. But here's something that's actually interesting. I actually first spoke with Janet five years prior to working with her when she was 52. And she was referred to us by another client. But she said the timing wasn't good for her then. And it took five years before we got back together.
Now I want you to think for a second if she had worked with us when we first met her when she was 52. And how much of a difference that would have been in her life. That could mean that she would have more spending, more money to enjoy today. That could mean that we would have been planning on her retiring at 65 instead of 70. That's a big deal. That's a big deal.
John: Yes, it is.
April: That's why this is so important. And it's why you've got to be proactive with your money. Now sometimes there are these obstacles that get in our way. And sometimes people say, well, April I already have an advisor. And if you do that's wonderful. Our goal is not to disrupt an already existing relationship, but it's how can we provide value, and some people deep down, they don't want to face their financial situation.
They have these emotional barriers because they're worried about what it might reveal. But just know that we're here to support and guide you. I actually have a sign in my office, that says this is a judgment-free zone. Because it is. It's a great place where you can talk about freely your goals and your challenges and your aspirations. And then this idea of a perceived cost, like how much is this going to cost me?
So our initial talks, this focus session we're talking about, there's no charge, that's complimentary. And we take time to understand your goals and your concerns. And then if we decide, if both of us decide it makes sense for us to move forward and work together, we're going to go through different pricing options with you that align with what you need.
So the best thing, the best way to book that call, again, is to go to our website. So curryschoenfinancial.com. And then you're going to see a button in the top right-hand corner that says book a call. Also on our website is a link to our podcast so you can see our podcasts and see podcasts that we've released.
You can download those onto your phone if you've got the podcast app, through Apple, or even on Spotify, but they're also on our website as well. And I just wanna say thank you guys, again, for joining us today. I think it's really, it's good to see that you're taking this time out of your day to work on something as important as this. We hope you've enjoyed it and found it impactful and look forward to talking to you soon.
John: It's always fun to do these. It's just good information, get it out there. And you know, for the people that are ready, we're here for you.
April: That's right. Bye, everyone. Have a good day.
John: Goodbye.
Voiceover: This material is intended for general public use. By providing this content, Park Avenue Securities, LLC and your financial representative are not undertaking to provide investment advice, or make a recommendation for a specific individual or situation, or to otherwise act in a fiduciary capacity. If you would like additional information about our services, you can visit our website at curryschoenfinancial.com. Or you can call our office at 850-562-3000. Again, that number is 850-562-3000. This podcast is for informational purposes only. Guest speakers and their firms are not affiliated with or endorsed by Park Avenue Securities, Guardian, or North Florida Financial, and opinions stated are their own. April and John are registered representatives and financial advisors of Park Avenue Securities, LLC. Address 3664 Coolidge Court, Tallahassee Florida, zip code 32311. Phone number 850-562-9075. Securities, products, and advisory services offered through Park Avenue Securities, Member of FINRA and SIPC. April is a financial representative of the Guardian Life Insurance Company of America, New York, New York. Park Avenue Securities is a wholly-owned subsidiary of Guardian. North Florida Financial is not an affiliate or subsidiary of Park Avenue Securities or Guardian.
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