On this week’s episode of the Secure Retirement Podcast, we continue our series on the concerns of members of the Florida Retirement System (FRS), focusing this week on the mindset of retirement and what that means for your planning process. And, if you’re not a member of the FRS, stay tuned because the information provided in this series is still applicable to any recent retirees, or those in the planning stages.
John says, “When you retire, every day is a Saturday. What do you do on Saturdays? Whatever you want. However, when do you spend the most money? During the week when you're working, or on weekends? Usually on the weekends. So, when you retire, if you truly retire and don't work anymore, every day becomes a Saturday, and you're more likely to spend more money because you're doing more things. We're going to touch on that today.”
We chat about the retirement mindset, as well as:
Determining what retirement looks like for you— will you stop working entirely or start working in a different capacity?
How your mindset will affect how you finance your retirement
Considerations around Social Security and Medicare
And more
Listen now…
Mentioned in this episode:
Transcript
Steve Gordon: Welcome to John H. Curry Secure Retirement podcast. I'm your host today, Steve Gordon and I am here interviewing Mr. Curry. And we are continuing the series of episodes, talking about the concerns of members of the Florida Retirement System and some of the considerations that, if you are a member of the Florida retirement system you want to be thinking about as you head into and plan for your retirement. If you're listening to this, and you're not a member of the Florida Retirement System, today's episode is actually going to apply to you because we're going to talk about when to retire and when you should retire. JOHN, welcome. That question is, I think, probably on everybody's mind, I'm not even 50. Yet, it's on my mind.
John Curry: Well, why would you want to retire?
Steve: That's a good question. That's a whole other conversation. I don't know that I'll ever fully retire. But I think a lot of people want to just know that they have the option.
Determining What Retirement Means To You
John: Well, you turn the tables on me, I'm gonna turn the tables back on you for a moment. Let's do this. Indulge me. So what does retirement mean to you?
Steve: Being able to do what I want when I want with whom I want and where I want? Good definition?
John: Very good definition. So you think in terms of why retire? So when you retire, every day is a Saturday? What do you do on Saturdays, whatever I want, whatever you however, when do you spend the most money during the week when you're working or on weekends, usually on the weekends. So now when you retire if you truly retire, and don't work anymore? Now, every day becomes a Saturday, every day's a weekend. And you're more likely to spend more money because you're doing more things. And we're going to touch on that today, what I like to call the mindset of retirement, what does it mean? And I'm gonna use myself as an example. And we'll talk about my dad and what he did, and also my granddad. And I think there's some corollaries in there. And I have a passion for this. Because I don't care where you work.
I decided many, many years ago that my primary focus would be on retirement income planning. That's true for my FRS clients, university system, school teachers that are clients of mine, business owners, doctors, lawyers, everybody has in common the one thing if someday I want to retire, the question is, what does that look like? And that's the first place I'll start with people where I'm a little different than most people who claim to be doing retirement planning, as a way to it's not just about the money, the money, part, finances, retirement, but why do you want to retire in the first place? And then that helps us determine when.
It’s important to understand the distinction.
Steve: Something you said intrigues me a little bit, maybe you can expand upon it a bit, you use the phrase, retirement income planning, as and use that to describe your focus. And, you know, when I think of a financial advisor, I think of somebody who is going to help me with specific things with life insurance with maybe managing investments, you know, kind of those fine grained sort of specific tasks, because that's not what you're talking about here. Help me understand the distinction.
John: But as part of it, but that's the money side. So first, let's get into the mindset. And then come back to that. Yeah. Okay. So the first thing, you come to my office, and I don't know you, so we have a nice few minutes to chit chat. You have a cup of coffee. So tell me who you are. Tell me about yourself. What are you trying to accomplish? What's your vision over time? Why are you here? Why don't you travel across town? To sit in front of me for an hour, hour and a half? Why are you here? out here? Things like, I don't have a clue. All I know is that my best friends work with you. They love what you've done for them. I just know I have a pension plan. I'm on the GS 20 social security at some point, when to take it? Do I go into drop? Not going to drop? All this stuff is confusing. It's overwhelming. I just need help.
That's great, we'll get there. But based on what you know about yourself today, do you see yourself retiring from the state of Florida taking your pensions and fully retiring and never working again? Or do you think you would do something else where you work part time? We start a business, we start a consulting company, and it's amazing where those conversations get. I've actually helped people who were within say two or three years of retirement, they retire. That's okay, before you retire, once you start thinking about what you're gonna do after retirement, and they've actually started doing businesses because they took what they knew with the state and learned and took it out into the world and got paid for. So now they're able to travel, do things they want to do and get paid to do it.
Steve: You know, I can imagine a lot of people get to that day. You know, because we've been told that's the goal is you get to that retirement day whenever it happens. And you have the party, you get the gold watch. You jump up and down and celebrate and then I imagine that and I would even wager that the majority of people wake up the next morning and go, now what?
Having a vision of your retirement is critical.
John: I believe that I've heard that, I see that. We see what I need to explain. I've been doing this for 45 years, just celebrated 45 years on September 13, I have seen thousands of plans. Most people see one on their own. And it's not complete. Nine times out of 10 is hodgepodge. So I tell people, let's back up. Before we get into how to invest money, how do you spend the money, let's talk about what you're trying to adapt. And back to your point about a financial advisor. I have people where we'll start at point A, and go through all of the protection that you just mentioned. Car Insurance, homeowners insurance, health insurance, disability, income insurance, their life insurance, we look at all that.
And forever time, I don't care if you're in your 20s or 30s. Or if you're 90 years old. I do not deviate my plan. I look at everything. Then we look as assets, savings, investments, retirement plans, real estate, business interest, we look at everything. Even your obligations, your liabilities, credit card, mortgages, car loans, we'll look at everything. And then we look at cash flow, what your cash flow today, how much are you saving for the future? You know, what happens if we can stay? I mean, look at where we are in this pandemic, as we're recording this. We're facing unbelievable pressure. And some people think the economy is gonna crash like it did in 2008.
Others say the economy's great, you know what I tell everybody, you can't control any of that. All you can control is your personal economy. If you stick your head in the sand like an ostrich, I got news for you, your butt sticking that you're vulnerable, take the time to plan for yourself. And if you work with me, the first thing I'm going to ask is tell me what the future looks like. Tell me what you want. What does retirement mean to you? What's your vision of retirement, and you shouldn't spend $1? You shouldn't invest money until we get clear on that. Because once I have that, guess what? It will come into focus. So clearly. Okay, these are the things I want to do in return. Well, you want to do them when you're in your 60s or 70s, or you want to work in and then do them in your 80s or 90s, when you're less likely to want to travel as much that helps.
Steve: It does, it does. So you go through this entire process. At the end of it, you come out. It's like magic, right? And come up with the date.
John: And obviously, it's magic. I'll use myself as an example there. I'll be 68 on December 9, on paper, I'm retired. Anybody who knows me, then I'll never fully retire. And my retirement definition is very close to yours. I think about four freedoms, number one is a relationship, right? I'm to the point in my life where I have that I don't have to take on a new client. If it's not a good fit, I won't take them. Why should I complicate my life at this point? And take on someone who is a pain in the butt.
So if there's a good fit, we'll work together. If not, okay, I'll refer you to a friendly competitor even. So if we're a good fitness group, time, freedom, I want the time to do things I want to do, money freedom, and location freedom. So I won't do it like you were saying to work when I want to work with whom I want to work with. So if I'm in a relationship narrows it down perfectly, because that includes family, friends, teammates, coworkers. Excellent. So I get the relationship.
How much time am I willing to devote to the relationship. And by having money, I can enjoy that time. So if I have that in place, then I get to work when I want when I want and with him alone. To me, that's pretty darn good. And I also encourage people to look up the word retire. As soon as that's the definition to withdrawal is one of the definitions, withdrawal from one life. So we go to work. And we have a social connection there. And just had a thought and thought about this a long time.
In the 80s I think 83-84 I was asked to do a series of workshops for General Electric employees down in Daytona, Daytona Beach, the war of mudded. One of them was very surprising. They had a psychologist come in and there were four couples being interviewed. And it was really interesting because in this case, all the men were the retirees and the wives were talking about how they felt about them being home and one stood out so clearly, she said, I wish he had never retired. He is a pain in the butt. He is constantly interrupting me and messing up my day. Because everyday he got it for 35 years and went to work. So she played cards with their girlfriends, they had tea. I mean, it was comical, but sad at the same time.
You got to understand when that happened. I'm only about 30 years old. So I gained some insight that has helped me help other people with their planning. And then my dad, my dad, I was worried about him because he retired at 62. Back to this question of when to retire, he was so obsessed with retiring as soon as possible. So at age 62, he took us pension with a state of Florida, took option three, and took Social Security. And he promptly sat in a chair in the living room, his favorite recliner and watched television all day. And I was convinced that my dad wouldn't live any longer than his dad my granddad in retirement. And finally, one day, one of my uncle's convinced him and my mom to get in a car and ride with them on a vacation. And Cherokee, North Carolina, and my dad, something happened on that trip because he wouldn't go anywhere. Though, when he'd come visit me he's in the sun. I gotta get back home now before it gets dark. Now he's saying that at three o'clock, and it's only an hour and a half, two hour and 45 minute drive. So I was worried that he was just gonna sit there and wither away. That's what some people do. And they watch the news all day long. They get stressed and have anxiety, that is not retirement.
Okay. Now look at my grandfather. My grandfather was very healthy when he retired, he could do 100 pushups, hundred sit ups are 65 years old. He was a hard working blue collar guy. Because my granddad and my granddad both worked with the Department of Transportation. At one time, they're a part of the bridge crews, rebuilding bridges in Northwest Florida. So I was very concerned about my dad. But then the people that I talk with Steve that have something to look forward to in retirement, and they're not retiring away from something, they do better. So I like to ask people this question. If somebody comes in, they're angry. They're frustrated. The tenant, why are you retiring? I can't stand the people at work. I hate their guts. I got to go. Well, I'm sorry to hear that.
So here's a question. It sounds to me like you're running away from something not running to something. And if that's the case, I don't think you can be happy in retirement. So let's talk about what that retirement looks like. And I pulled out of them. And nine times out of 10 I go, we're gonna things really aren't that bad at work, because now they have hope. They got a future. But if you're sitting there in the heat of the battle, every day struggling with, do I go to work, I can't, I can't stand to go to work. Thank God, I don't have that. I don't have that. And I do have the power that if I do have that, I can clear some days off and go have what we call free days, you know and relax. But that I think the whole thing about when to retire comes down to mindset.
Now let's get into financing retirement, because you can't be pollyannaish about it, you got it, it's got to be realistic. How do I fund or finance my retirement? So first of all, if you remember the Florida retirement system, you have to make a choice of which pension option to take if you haven't already done it. So you take 123 or four, we talked about that in previous episodes. When do you take social security? Do you take it as soon as you can 62 that will be determined by how much income you have. We just use a round number roughly, if you earn over $18,000, you take social security at 62 you'll be penalized $1 fair for $2 above that. So if you know you're going to be working part time, it probably would not make sense to take it at 62. So then do you wait until your full retirement age? Or wait until 70? In another episode, we'll be covering that in more detail. So I'll just leave it as a kind of big picture.
And then if you have money in deferred comp, and drop, what do you do with that money? How do you structure the structure to grow? Or do you start taking income immediately on some of it or all of it? Or do you break it up in this account? I'll take income today to fill the gap until I get social security. And the other many I'll let grow until I'm forced to take it out under the required minimum distribution laws at 72. So a lot of it comes down to how well you've saved what is in is a taxable or non taxable. What are your income needs? And do you want to work?
Steve: So, John, I know there are a lot of a lot of moving parts here. And probably some of these, we need to come back to you. You've talked about drop a little bit. You've talked about Social Security, we probably need to cover this a little more detail is just from a high level. What are a few of the considerations around those two things?
Choosing the right plan for you
John: Well, the big thing is we see this every day that I choose to work with clients. Somebody will come in, just had 2 this week in fact. Okay, I'm trying to decide if I should go into the drop plan. So what's your hesitation? Well, because I'm not sure I really want to leave in five years. Because once you go in, you have to come out at five. And I've had a lot of people who have told me they regretted doing it. I didn't really want to leave. I love my job. I don't know why I did that. I guess you do. You saw an opportunity to have a big bucket of money, the largest chunk of money you have had in your life, and one bucket sitting there. So would you let the money drive your decision instead of focusing on what you really wanted in return. So it's not all about money, you have to have money, don't get me wrong. Nobody works for free. I don't, you're not nobody else's. But if you let money be the full driver, you might make the wrong decision.
So my grandfather did that. He took option one, because that was the highest monthly benefit. He died. My grandmother lived to be two weeks out of 95 years old. So she lost all that income for all those years, all those years? So it comes down to what assets do you have? When do you want to work? When do you want to quit working? Do you ever want to fully retire, or say you know what, I'm going to retire and take all of my retirement income streams. But I still want to be productive. Now you don't have to work for a paycheck. You're not volunteering. I know people who do a lot of volunteer work at churches, some other nonprofit organizations, the key is just keep moving, keep moving. And then when it comes to social security, we'll definitely get into more detail there. Because there's a huge amount of moving parts there. We actually do workshops, and webinars, specifically own social security and medicare, that I would encourage people to tune into occasionally.
Steve: So John, what I'm getting out of all of this, I mean, this is now when we're on our third or fourth, one of the I think fourth episodes in this series. What I'm really getting from this is that this is a giant jigsaw puzzle. And sometimes it's got pieces from other jigsaw puzzles mixed in. And you've got to somehow sort it all out and turn it into the picture of what you want in retirement, and coordinate all of these different things. And I could really see for somebody, you know, you're an expert at this.
Okay, so maybe I have something similar to the perspective of a client listening to this maybe where I just want it to be simple. And I just want to make a decision, because it's given me a headache, right? If you're listening to this, nod your head if you can relate. Because this is confusing. I mean, there are so many different options. Not just with all the different plans that that state employees might be involved in. And as you shared in the last episode, it depends on when you got into the plan. And when you are hired, there's all this complexity to it. And certainly Social Security multiple ages when you can begin taking Social Security. So there's decisions to make there, there's decisions around drop. I mean, it goes on and on and on. We haven't even talked about Medicare, we're gonna get into that. We haven't really even talked about rmds we're gonna get into that. I need to go find some aspirin.
John: Well, sometimes it gives me a headache. But two things. One, you made me think something somewhere in probably in a file somewhere, had this visual I had created a jigsaw puzzle. And it had on there as far as Social Security, Medicare, Dropped, Deferred Comp, 403b, IRA, had all these different pieces. And I was going to have that made into a puzzle that I could just give the people in a box here. Good, do your own plan. But you know, it's funny, because when you talk about the complexity, Steve, that's why a lot of people find their way to me and my team. nessa I don't do this, just charge me they do it for me to narrow down my options and get it done. Just make it happen. I'm tired of messing with it. I'm tired of dealing with product sales people who fix the damn thing. So I can enjoy every time. I get that on a regular basis. I say okay, here's my fee schedule. Here's what we do based on what I know. Here’s the fee, would you like us engaged? I go Yes. Take care of it.
Steve: Yeah, I can see that. You know this about me, I have a background in engineering. I don't know that I could sit down and figure this out or that I have the will to do it.
John: Well, first of all, we know you could do it. Everybody could do it. Let's be real blunt here. Anyone Listen to this. You don't really need me. You can do it yourself if that's what you want to do. But I'm the kind of person I'm not doing it myself. NASA ascribed to the same philosophy, instead of saying, How do I do this, I'm saying, who can do it for me or with me. So my deal is this, I only want to attract to me people who know they need help. They want help. And they want to be a partner in that I'm not doing it all for you by myself, you're gonna be engaged in the process, or we can't work together, we will do all of the work that needs to be done to get you ready. But also, you've got to make decisions. I can't make the decisions for you. But I can coach you and guide you and make sure that you're on the right path. I can do that. And I do that very well. And I love doing that.
Steve: Excellent. Well, John, we've got a couple of big topics coming up. Yes, we're going to talk about drop. And you're going to get in deep into that and explain that, that'll be our next episode in the series. And then after that, we're going to dive into Social Security. Because that's another deep topic. And we're going to get into that. And I know you do webinars on that on a regular basis. And when you could do in person seminars, you did those. And, you know, I know that you would fill the room with people curious about that. So I know, that's an important topic for folks. As we go forward in this series, we're also going to be touching on Medicare and how to coordinate that with everything and rmds. And lots of other topics that are going to be important, both to folks in the Florida retirement system, so that you can coordinate that with, with your FRS benefits, but also very important to people of any walk of life, who are thinking about and planning for their retirement because some of these topics are universal.
John: Absolutely. Especially Social Security, Medicare. And there's a lot of talk about social security right now. And both presidential candidates are accusing each other trying to destroy Social Security and Medicare and all this stuff. And what I go right back to what I say every time, you cannot worry about what they're doing. Everybody should go vote, as pay out the politics of you go vote for you, thanks best as your business. I'm going to focus on my personal economy. And if you choose to work with me, I'm going to make you stay focused on your personal economy. So that no matter what these knuckleheads do in Congress, and the legislature, you're secure in your retirement. Love it.
Steve: John, if folks have specific questions about anything we talked about today, how can they reach you?
John: They can call me at my office. Area code 850-562-3000. Or then go to the website, johnhcurry.com.
Steve: Perfect. And folks, that's where you can find all the episodes in this series. So if you're coming into this midstream, and you want to go back and listen to the prior episodes, we've we've talked about the FRS pension options in an earlier episode, we've talked about deferred comp and taxes and how the those kind of work together and what you need to know about those. We've talked about all sorts of things as we go through this. And in the next episode, we're going to jump into drop so stay tuned for that. You can find out more at johnhcurry.com click on the podcast link. You can subscribe to this in your favorite podcast app on your phone. And, John, thank you again. We're going to be back real soon with the next episode.
John: Look forward to it.
Voiceover: If you'd like to know 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 at Park Avenue Securities LLC.
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