What are the 5 financial risks you will face in retirement (& how do you avoid them)?
With the right planning, you can create your own secure retirement…
That means having the money for the life you want…
But traditional planning doesn’t work for retirement…
Wealth distribution is very different from wealth accumulation…
In this podcast, we show you how to prepare for the top 5 financial risks in retirement and achieve financial balance.
Mentioned in this episode:
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Transcript
April Schoen: Hello, everyone, and welcome. Glad you could join us today. My name is April Schoen. And I'm sitting here today with John Curry.
John Curry: Hey April. Hello, everyone.
April: And today we're going to be talking about five financial risks you're going to face in retirement and what are some things that you can do to avoid them. Okay? Now this talk is really ideal for anyone who plans to retire one day, or if you're close to retirement, or even if you're already retired, because these risks that we're going to go through really impact everyone, honestly, they actually impact you too while you're working. But we're going to talk today about these five financial risks, how they impact you both while you're working and then once you also get into retirement as well.
Now, I can't believe here we are in July 2022. And I can't believe it's been over two years since COVID started, right. And although we are to keep hearing some more about these cases, but that's another story for another day. But you know, COVID, I was thinking about how in March of 2020, when the world shut down, right? When it felt like, here we were going along, everything seemed fine. And then all of a sudden, March of 2020, we had COVID. And there was really all of this uncertainty.
And I remember all the uncertainty and the fear, concerns that we had over our health and our loved ones. We also had concerns over the economy, there was a lot of uncertainty at the time, and we didn't really know what all COVID would mean for us for and what the future would hold. Well, you know, right before COVID, I actually had hired a coach. She's a business coach for women. And I hired her to help me with my public speaking. But really, in working with her, I got so much more than that.
And I'm so grateful I hired her. Because I knew as soon as COVID started that I couldn't do this on my own. And I needed to have someone else, someone that I could lean on. Someone I could bounce ideas off of. And she had been a coach, still is, but a coach for over 30 years. And her experience and her perspective in working with countless other clients was invaluable to me at that time. She was really a good rock, as we like to say. And I'll tell you working with her was well worth the investment.
In fact, I'm still benefiting from the work that we did over two years ago. And why do I tell you all this? I tell you all this, because I think we've all been there. We've been in that place of uncertainty and having fear. And honestly, you may be having that right now. Especially if you're thinking about retirement, what it’s gonna look like for you. Are you ready to retire? And then let's just think about the uncertainty we have right now in the world, much like we did two years ago at the start of COVID. But today, we've got inflation, right? The numbers just came out today that the inflation for June was 9.1%.
The highest it's been in over 40 years. We've got interest rates climbing, we've got still some geopolitical risks, like what's happening with Russia and Ukraine. And so that's why I tell you all this, because I know some of you may be feeling a little bit that today. And so here's what we're going to talk about today. We're going to talk about how you can create your own retirement, okay. It's not my retirement, it's not your neighbor's retirement, it's not John's retirement, it's your own secure retirement.
And what makes it secure is it's not just about money that you have, but it's having the money for the things that you want. Okay, and to have this life that you want in retirement. That's what we're going to talk about today. So I'm gonna bring on John, but before I do, let me tell you a little bit about John.
So, John's amazing. He's really been helping clients for almost 48 years, and we work together. But one of the things that John is great at is his ability to see strategy for someone and really being able, I think of it almost like a chess game, and him being able to see these moves like three or four moves ahead, right, like in a chess game. And he knows you know, how to do it, how to do well when it comes to helping clients get ready for retirement. He knows what works and what doesn't work for people.
And he's great at spotting some red flags. So if there's a point of weakness in someone's plan, he can see it. And you that really just comes from him being in business for almost 48 years and helping 1000s of clients at this point in his career. So I think it's gonna be great today is we'll get some of his perspective as well as we start talking about these financial risks. So glad we're gonna have the call today.
John: Same here. Nice to be sitting across the table. We've done so many of these where we did them via Zoom, and couldn't be sitting across the table. so, I've been very grateful this year that we could do all this. I want to make a comment before I, I'm going to call it bragging about April a little bit. The things that we're going to cover today, it is not new territory for me. I started in business in 1975. It was almost 48 years ago.
So inflation, uncertainty, and we might touch on some of that as we get through today. But what I want to say is this. You went out and hired a coach. I hired a coach. The first time I hired one was back in the early 80s. I think 82. 82, 83. We're coaches, we're not we're not just financial advisors. Most of the work that we do is the standpoint of coaching and listening. I'm thinking of some people we saw yesterday where the guy's very sharp, he understands money. But he asked, what did he say? I need your perspective.
I need April and John, because you could ask the tough questions that I haven't thought about. And sometimes we do like a friend and I call questioning your answer. And you're good at that. And but let me say this. If you look at the picture that's on the screen. April may look really young. But let me tell them, she's got 12 years of experience of helping people. She's very sharp at what she does. So just because someone is young, you want to tell them how old you are?
April: Yes, I'm 38. I'll be 39 in December.
John: I'm 69. I'll be 70 in December. So I would like for you for just a moment to talk about how we feel like we help people because of our age difference, gender. Would you talk about that for a minute.
April: Sure. I think and John had been working together really about eight, a little over eight years now. And we really realized early on the benefit we had of working together to help clients because we cover a couple of different gaps. We cover the gender gap of having both a male and female perspective. We cover the age gap, as he mentioned, he's going to be 70 this year, I'm going to be 39. So we just have different perspectives on things. And it's really just helped us have a very efficient team in working with our clients.
John: I just thought of something I've got to comment on. A while back after one of our webinars. A good friend of mine, I saw him it Publix, he said, you're talking about retirement planning. But when are you going to retire? I said well, smart aleck on paper, I am retired. But I enjoy doing what I'm doing. So I'm still working. So call me semi-retired. That made him happy with that. I got one more thing about April before we get going here. I lovingly refer to April as the investment geek.
April: I wear it proudly.
John: I'm still going to get you a crown.
April: I know.
John: I say that because what April brings to the table is not just looking at charts. And I bring this up because you mentioned inflation. The numbers are out today, but the numbers by themselves mean nothing. That's the published inflation rate, what is your personal inflation rate? And that's why your investment planning, retirement planning, financial planning, estate planning, all that must be personalized. And that's what April brings to the table. It's getting to know the clients, helping them. And it's not just about oh, look how great I am. I made you a lot of money. Because anyone who does investment work, if they're telling the truth, you don't always make money, sometimes you lose money. That's how you manage risk. So I just wanted to get that in there for you get into the, the heart of the presentation.
April: Absolutely. Like you said, I think those two things work really well together. So let's talk about what we're gonna go over today. We're gonna, we're gonna talk about five financial risks in retirement and how to avoid them. And no matter what stage of life you're in right now, no matter if you think you've got it all figured out, no matter if you aren't sure where to start. Or if you're not where you want to be quite honest with you financially. I'm glad that you're here, because this presentation is gonna be really good when we get into these risks.
Now, a couple of questions I have for you on the call today, or if you're listening to this later is, so how many of you would want more freedom? Okay, that can be time freedom, that could be money freedom. Or how many of you would want more security, or more time with your family? Or how many of you really want all of those things, right? I want more freedom. I want more security and more time with my family. Well that's great, because that's what we're going to kind of summarize today as we get into how do you alleviate some of these risks.
So we've got about 45, 50 minutes left in our presentation today, we're going to talk about how to avoid these financial risks so you can enjoy more of your retirement and you're going to know how this is relevant to you as we go through. But if it's okay, what I'm going to do is we're going to save enough time at the end, so that we can set aside some time to talk about next steps and how to do what we call is a discovery call. Because let's be honest, in the time we have together today, we don't have enough time for me to get all of the knowledge out of my head and all the knowledge out of John's head to you.
So we're going to kind of summarize it so you know what's relevant to you. And then we're going to talk about, at the end of our talk, today, we'll show you how we can schedule a discovery call. So we can personalize this to your situation. Okay, but don't stop listening. We've got some really good stuff we're going to go through. But we'll save some time at the end to make sure we can customize it for you. So let's get going here. So here's the three things we're going to cover today.
We're going to talk about why traditional planning doesn't work for retirement. And that's going to include a couple of things. We're going to talk about, what's the difference between saving money and spending money? Okay, that's really what wealth accumulation and wealth distribution means is, are some, I say in more layman's terms of what's the difference between saving money and spending money? And we're going to talk about these five financial risks.
John: I can solve all the everybody's problems right now, yes, with just a simple statement. Here's the key to it. Spend less, save more. It's like losing weight. Eat less, move more. No magic to it. It just sounds good.
April: It sounds good. Well, you know, I think, John, it's pretty important because we talk about how a lot of these financial principles that we've been talking about truly for decades, they're still sound principles today.
John: They'll always be sound principles. Principles are just that. They don't change. Okay, they don't change. That's why they're called principles. They work. It's the foundation of proper planning.
April: That's right. So we're gonna go through that as well. So here's why this is so important, what we're talking about today. Is that the decisions you make will determine your destiny. I want you to write that down. The decisions you make will determine your destiny. And here, here's what we find a lot that happens, especially right now, people are making decisions based on feelings. And what we want you to do is we want you to make your decisions based on facts.
Based on knowing all your options, being able to evaluate what's best for you, so that you can make a decision based on what is important for you. And that is how we got our clients. So I keep talking about these five financial risks. Well, what are they? So the five risks we're talking about today is living too long, becoming sick or injured, market volatility, taxation. We're primarily talking about taxation on retirement accounts, although we could get into taxes in general. And then also inflation.
John: I don't know why you would want to spend any time on any of those.
April: Well, and I was just thinking, as I was preparing for this, here we are almost in the middle of July. And some of this is so timely, again, inflation number came out for June 9.1%. Inflation, meaning prices in June were 9.1% higher than they were last June. Market volatility. Look at what's happening in the stock market this year. The S&P is down about 20%. And bonds are down about 10%.
John: It's truly like a roller coaster every day. You can you could turn on the financial TV new shows, and look. It'd be red then green, red, green, red, green, up and down just like a roller coaster. It's insane.
April: So that's why we're gonna get to the some of those sound financial principles.
John: And I'm glad you said that again. Because if you have planned first, and not just rushed out and bought some financial product that somebody was touting, then you can weather the storm. If, however, you put all your money in something that's high risk, and didn't do proper planning, I can see why you'd be worried.
April: Absolutely.
John: I'm concerned, let's be clear. I have money invested. I don't like seeing it go down. I want it to go up and up and up and up every day. Never down.
April: Never down.
John: That not reality. So we have to be positioned to take care of all of these financial risks. And there's more, but these are the key.
April: So you know, I earlier I mentioned, John, about how, you know, you've been doing this almost 48 years and, and I have been able to see this firsthand too about the lessons that we've learned through planning. Through helping hundreds and 1000s of clients at this point. And really what's relevant about today's call and this webinar that we're doing is, you know, what we've found about what works and what doesn't work for clients when it comes to retirement planning. So that's really some of what we're going to share. So I'm gonna kind of contrast that with our planning process with what we find to be the most traditional approach.
John: Keep in mind that most people who are listening today, they've only seen one financial plan, theirs. But as you just pointed out, we've we've seen literally 1000s. And we've learned from those that we can share what we've learned. We've seen this before. We know where this story ends, or how it ends, let us guide you.
April: That's right. So what we find to be is the most traditional approach to planning is something that's called the safe withdrawal plan. Sometimes you might hear it as the 4% rule, or the 3% rule. Now, what I want to mention before we go through some of this is that we do have a different approach to planning. But this is what we see to be the most common. I can't tell you how many client meetings we have where someone comes in and they may not say these exact words. They may not say the exact words, they may not say safe withdrawal plan or the 4% rule. But that's really what they're meaning.
So let me explain what this is. The idea behind this common approach is that you invest your entire portfolio, in some sort of mixtures of stocks and bonds and mutual funds. And then you begin to take fixed consistent withdrawals from that bucket. Okay, again, thinking sometimes it's called the 4% or 3% rule, because that's the idea is you're taking 4% or 3%, out as income. But again, you're taking fixed consistent withdrawals from a bucket of money that's inherently variable and inconsistent.
It as John mentioned, it fluctuates on a daily basis. So, easy for me to say, right. So besides the fact that that brings just in itself, a certain amount of uncertainty and unrest, studies have shown that while it's the most common, it's not the most efficient. It really doesn't create the best outcome for you. But here's what happens. It actually requires the most amount of capital to provide you less income in retirement. You have more taxes, because it's always taxable, because you're always taking interest off the portfolio. It causes you to have more risk than you may otherwise.
There's always the presence of risk, because everything is always invested. And you actually have less liquidity. Because if we have this bucket that we're going to be using for income, we can't take any other withdrawals out of it. Because if you take anything else from this bucket, that means you're going to have what, lower income later. So this approach really leaves a lot to be desired. And we've seen it not work for clients on a consistent basis. And we've really chosen to approach things differently, and to have a different planning process. Okay.
And here's the problem with this traditional approach, is it fails to acknowledge that there's a difference between saving money and spending money. It fails to acknowledge there's a difference between accumulating wealth and distributing wealth. Okay, so let's talk about an example. So an example, this analogy we're going to use is we're going to talk about if you were climbing up and down a mountain, okay. This is not really unlike the task of a, that we face every day when we're working and saving and hoping to retire one day.
So I want you think about, here you are on the way up the mountain. And that's our working years. And in our working years, our job is to turn our income, to turn our cash flow into net worth. And ideally, we're going to reach this point, we're going to the top of this mountain, and we're going to feel retirement is possible. We're ready to step off in this beautiful thing called retirement. And as we begin to head down the mountain, we actually do the opposite. We're now taking our net worth. And we're going to turn that into income.
So the truth is, is these two ideas, saving money and spending money, just like climbing up and down a mountain, they're opposite goals at the end of the day. And there are economic forces that are always at work that we always have to deal with. So just like when we're climbing the mountain, gravity is always there. It's always gravity, but it impacts us differently. We react to it differently. And the decisions we make going up and down the mountain are different. And that's the same thing is true in retirement.
There are always these economic forces that are always going to be there. But we act differently to them when we're working and when we get into retirement. So these are these five risks. So one of them is, it's mortality, which is the risk of death. So let's talk about this for a minute. A very fun topic. We're just starting off with a bang, the risk of death. Okay, so when we're working, the risk is that something happens to me so I'll get I'll use myself as an example. I'm married and I've got two boys. In fact, my little one's birthday was yesterday. He just turned six.
John: I would debate that. You have three boys. You've got one grown-up boy called a husband, and two sons.
April: And two sons who happen to be about six and nine. That's right. So the risk for me at this stage is if something happens to me and I die too soon, and my income stops, that impact is going to have on the people that I care about. And so I've taken that risk off the table with the life insurance that I have. But we have the same risk when we step off into retirement, but it's different. It's now not dying too soon, but it's living too long. It's outliving our resources. Okay. And again, I don't necessarily use those words.
But I hear a lot of times people say, you know what, I don't want to have to go back to work when I'm 80 because I have to. Or I don't want to be a burden on my children. Right. That's the concerns that we have. And this is that risk that we have to manage again. There's also the risk of becoming sick or injured. Okay, so we don't, so we didn't die, but we become sick or injured. What happens in that case? Well, we were working, the risk is that our paycheck stops. Okay. So I have that same risk today, for my family, that something happens to me today. And I can't get up and come to work tomorrow.
But in retirement, it's not our income that stops, our income actually keeps going. But it's our expenses that skyrocket, right? So we have us, we're sick or we're hurt, and now we have more expenses to deal with. And this can threaten, it can erode our assets over time. So we can tell you stories of clients this year, who got sick, and yeah, they had to start having some help, some care coming to the, to the house to help out with some things, right. So these things are very real. Again, this is a risk, but it impacts our balance sheet in a very different way when we're working and when we get into retirement.
John: Some people on this webinar will know my story about my leg being amputated. Let me tell you, without proper planning, financially speaking, mentally, physically, I'd be in big time trouble. But because I had done a good job of ensuring myself for health insurance along the way, long-term care needs, things like that. And using my life insurance and assets together as a tool, that illness did not destroy me financially. Nor will it. And that's a big time injury. Serious, serious stuff when they cut your leg off. But I'm still going strong.
April: That's right. Definitely things we have to work on and have a plan for. The next is market volatility. These other risks is market volatility. It's something we're feeling today. You know, we've been talking about this for years, but the market's been up and up and up, right. And so here we are, the S&P is down about 20% here today. So what happens with market volatility? Well, when we're working, you know, market volatility is always causes a lot of heartburn. Now, let's be honest about it, so I'm 38 gonna be 39, I don't ike to see my accounts down either. I don't like seeing them down with what the markets doing.
But at the same time, I know that I have time on my hands. I know that I don't need that bucket for income anytime soon. And so I have the time to weather this storm and for the markets to come back. Okay. So when we've got clients who are in retirement, this is something that we have to navigate and a risk that we do have to take off the table. Because this market volatility that can be the thing that really is a can be a threat to your stability, because as you're taking money out of accounts, you have more risk.
John: Well, plus when do I take the money out? And I think back to 1994, buying a house. I had planned on using some money in my investment account for the down payment, and closing costs. Well, for those who were around back then, and watched the market, the accounts were down like they are today. So if I had not had other cash available, savings, cash value insurance, things like that, to help me then if I took that money out, it's a permanent loss. And it especially at my age now, the word foe is really big time. It is definitely the enemy at that point. Volatility. Because if I don't have staying power and liquidity, I could get hurt.
April: Absolutely. And you know, I can't go back to where we are right now in 2022. With the S&P is down 20% and bonds are down 10% here today. Where you feel like there's no place to go. There's no place to hide. You know, even when there's traditional planning of saying, well, I'm going to have more in bonds that hasn't held true for this year because of what's happening. So you have to look at it, look at it differently. And the next thing is taxes.
So you know, a lot of us when we're saving money, we love saving money into our tax-deferred vehicles like a 401k or a traditional IRA or a 457 plan. And we love them because we get to put money in that we're deferring taxes on. So we don't pay tax on the money that goes in and it grows tax-free. But the problem is we get to retirement and every single dollar that comes out is taxed at your highest marginal rate. So what can feel like the best place to save $1 can be the worst place to spend $1.
And we see it all the time with clients who have the money, and they don't want to spend it because of what, they don't want to pay the tax. We see that all the time. So again, going back to having proper planning so that you can plan for taxes, okay, because we know they're going to be there. It's just how do you navigate it? And then we've got inflation. So inflation is, you know, we used to call it the silent thief. I don't think it's that silent anymore.
John: It's loud and bold today.
April: It is, it is. And what inflation does, as we all know, is it erodes your spending power over time. So that same dollar today, doesn't feel like $1 tomorrow because the cost of goods and services go up. So when we're working what we can do to combat inflation is we get pay raises, maybe we get a promotion, we change jobs, we get pay raises, we earn more money. And that way we can naturally offset inflation. But it's very different when we're in retirement. And we're on more of a fixed income, right. And cost of goods and services go up. What does that force us to do? It forces us to spend less money because now we don't want to worry about dwindling down our net worth over time.
So we've got this challenge of how do we combat inflation. And these, these challenges are very different when we're going up and down the mountain. And that means we do need a different strategy to succeed, that has to be different than maybe the strategy that we use while we were working. And this is so our planning process, our approach is something that we've really been fine-tuning over the last 47, 48 years. And we've really developed a set of easy roles that allow our clients to have balance in retirement, and allow them to take some of these risks off the table. So how do we do that?
Well, the first thing that we want to do is we want to address those risks that we just talked about. We want to talk about how do we take some of that risk off the table. Because for most people, you know, it's not really the underperformance of the stock market that causes them a lot of pain, although you might be feeling some pain this year. It's really the under, it's really more of the inability to deal with some of these unexpected events or forces from an economic standpoint.
And so what we want to do is we want to look at these, these risks and say, what can we take off the table that maybe are more personal in nature that affect us one at a time. Like living too long, or dying too soon, or becoming sick or injured. And then how do we also address those more broad economic risks like market volatility and taxes, inflation? Well, the first thing we want to do is try to alleviate some of those risks. And we do that by first looking at not what's your asset allocation, meaning how are you invested in your retirement accounts in your investments, but we want to look at income allocation or cash flow allocation, as we also like to call it.
So when we talk about retirement planning, we look at a couple things. One, we want to look at your guaranteed sources of income. What's Social Security going to be? Do you have a pension? What are your guaranteed sources of income? And is that enough to cover your basic living expenses, okay. And then from there, we really want to have two other buckets on your balance sheet. We want to have a bucket that's going to be for discretionary income. So maybe you're going to take that trip this year.
John: I can buy a boat then.
April: You can buy a boat. You're doing some remodels at the house, right. It's this discretionary bucket. It's not just basic living expenses, but it's really having this bucket for discretionary spending. And then we also want a growth bucket. So we want money that's continuing to grow on our balance sheet. Okay, I'm gonna come back to that inflation. You know, that's something we've been talking about for years that people don't feel it as much as they are right now, in years past. So we know we've got to have money that's continuing to grow on your balance sheet, so that you can have more income later, right.
And one of the things that allows you and helps you do all this is having what we call is true liquidity. Now we define your liquidity as an asset, a bucket on your balance sheet that you're not having to take income from it. Because if you're taking income from it, it's not really that liquid because you need it for income purposes. But we really want to look at having liquidity first. I think sometimes, John, our clients get tired of us talking about liquidity, and how important it is. But it really will help you with some of those risks.
John: But let me make a point here. You keep saying 47, almost 48 years, almost half a century of doing what we do. How many times have we had people come in, they're not worried about the market, they don't panic, like their friends, because they do have that liquidity. They have that true liquidity, because they don't need that money to live on. That's power, you're going back to freedom earlier financial and mental, emotional, better, a better word. If you have done a good job of building that bucket, then you can handle risk better. And you can also just, you see me all the time, I'll just, it's like brushing dandruff off my shoulder. You can brush those worries aside. Without liquidity, you're living on the edge.
April: Absolutely.
John: So we'll never stop talking about it.
April: Nope. Again, sometimes I think it may seem counterintuitive to start with liquidity. But it really is, we've got to make sure that you have that bucket, because that's what's gonna help you sleep at night. And that's what's going to help you be insulated from those risks that we talked about. So that you can have permission with your other money to do more and be more efficient. Okay. And then the other thing we want to do too, is we want to minimize taxes. Now this, you know, something we want to work on for it to be something that's strategic. And it's something that we do on an ongoing basis, so that we can minimize taxes over time.
And I'll be honest, there are some clients that we meet with and we can help you minimize taxes and other clients, depending on their current situation, it's a little harder to do that. And that's kind of getting into more of the details and nitty-gritty planning. But we have we've done webinars on tax diversification in retirement. And it's a great presentation to talk about how you can have diversity when it comes to tax planning. So really, what we want to do here is we really want to have a balanced structure.
And this is what I was talking a little bit earlier, we want to first have that true liquidity, meaning we want to have liquid assets on your balance sheet that aren't tied to income. We also want to look at your guaranteed sources for income, what's your, do you have a pension, what's your Social Security going to be? So we really want to make sure that you've got the income in retirement that you need to cover those basic living expenses. Making sure those lifestyle costs are covered. And then from there, we really want to have two other buckets, we want to have that variable income bucket.
And then we also want to have a growth bucket so that you have assets that are continuing to grow on your balance sheet. So our planning process when we're working with clients is really, it's a series of conversations for each client. And it's based on this structure here. And we start also by talking about more, well we start with is what is their vision for retirement? What do they want their future retirement to look like? So if you're getting ready, let's just say you're getting ready, you're thinking about retiring soon.
What do you want the next 15, 20, 30 years to look like? And it's important that we start there. That we start with this idea of what do you want your retirement to look like in the future? And then from there, we really want to look at where are you today? So getting a picture, high level, really, we call it high-level data, but really a snapshot about where you are today. So we can see, are those two things in alignment? Where you want to go, and where you are today. Are those two things in alignment? Or are some tweaks needed to be made?
John: And I would submit to you, like the gentleman told us yesterday, having these conversations, eliminates a lot of things and brings clarity. And getting a clear vision of what you want is, is in my opinion, the most important thing. Because then the steps, the process, if you will, will guide us to the right strategies and products. If we're clear on what we want.
April: That's right. So that's what I want to do now John is I want to actually walk everyone on the call through is they're starting to think about what do they want retirement to look like or even if they're in retirement, let's start kind of thinking about that vision and what are they, what is it that they really want it to look like for them? So when we're starting to think about this vision for retirement, we think of a couple of different categories, but you really want to break this down. This is a great time if you've got a notepad or some paper and pen handy.
And if not, you may want to just grab some so you can jot some down because we're going to be asking a series of questions as we go through and I want you to think about what you want your retirement to look like. So, first thing I like to do is think about how far in the future is this? Is it one year? Is it three years? Five? Is it right now? You know, sometimes we meet with clients, and they say I'm ready now. So when you know, what's this timeline, think of it like a ramp, right? What's this timeline for you and when you want to go into retirement. And there's some, some categories, you want to think about.
What are the relationships, your housing, your lifestyle, your health, and then financial. Okay, so we start with this first one with relationship. Well, who are the most important people in your life? Who is it that you want to spend your time with in retirement? Is it a spouse or a significant other? Is it kids, grandkids? Do you have aging parents that you need to take care of? And Will you be needing to support any of these in any way? So think about who are the people in your life that you want to spend time with? Especially as you're getting ready for retirement. You know, we have a thing, we talked about retirement is, what are you going to do when everyday is a Saturday.
Meaning if you're working, you know, we're used to working Monday through Friday, and you have your weekends to go play? What do you do now that every day is Saturday? How will you spend your time. And I'll tell you, our clients that spend time early planning what they're going to do in retirement are happier. The ones that have more of a sense of purpose in retirement are happier. So relationships are very important to think about. The who in your life. And then housing, we want to think about where.
So will you stay in your current home? Will you downsize? Will you move to another city and state? You know, we've got clients who talk about aging in place. So I'm thinking about some clients of ours that over the last few years, they've been doing some major renovations to their house, because they're planning to stay there. They don't want to leave. So how do they make sure that their house can, they can age in place, and they can stay there. It's very important to think about those things. We have some clients who retired last year here in Tallahassee, and they moved to Orlando, because their daughter was pregnant.
They're about to have their first grandson, their first grandbaby. And so they said, you know what, we're, we're retiring, and we want to move so we can be closer to the grandchildren and be able to watch them grow up. So think about housing, you know, thinking about another client, Rhonda, who she's not, I love talking to her because every time we talk, she's gone to visit a new place, because she's not sure if she wants to settle down yet. But she's narrowing it down.
John: That's always exciting.
April: So she's taking these trips to Georgia and Tennessee and Virginia and North Carolina, to figure out what area does she want to be in next, because she likes to be outdoors and go hiking. So start thinking about some of those things. And then the lifestyle. I jumped ahead earlier when I said what will you do with every day is a Saturday. Okay. But it is something to think about. And I also tell people, what do you think about what are some things that you've always wanted to do, but life got in the way, because now you can have some time for those.
We have clients who tell us, they're busier now than they were when they were working. Or they don't know how they ever actually put time into go to work because they have so much going on. Which is really, really fun. And they're excited about it. It's not ho-hum, they're excited about it.
John: But contrast that to people who sit home in front of a television all day, watching the bad, quote, financial news as they all say. So those are the people that I would say, are the ones that are in the category of not being happy, because they worry about too much. And they're just generally not happy.
April: Well, I'm thinking about our client who's 90, you remember John, I called our client to schedule a time, it's time for him to come in for one of our annual reviews. And I called and we were chatting, I was gonna get a time on the calendar. And he said, well, April, you know, I have got to give up some of my social commitments. I am just too busy for the next three weeks. And, and I laughed, but I just love that story because he's so vibrant. Even at 90, you know, to still be going and doing all these things that he wants to do.
John: Just like our friend Charlie 95 years old, still going strong.
April: Love it.
John: He's probably got more activities on this calendar socially than you and I combined.
April: Right and that's probably what keeps them young. So think about what is it that you want to do in retirement. Now, health. We talk about health a lot. This is.
John: I've got to say something real quick. Just having this conversation, I'm thinking about this lady. I won't call the name but because some people might know her but I think she's 96 years old. And when I was doing ballroom dancing lessons, I would dance with her. And I had the pleasure of dancing, even though I had the prosthesis. She came over, she said, can you dance tonight. I said I can move along with you. It was good. She's either 96 or 97. And she loves the dancing, that ties into lifestyle where you're about to go with health, because she's taken care of herself mentally and physically.
April: Absolutely. Well, you know, health is, I would say, the one area that we get a lot of client questions from clients. They are concerned maybe not about their health right now. But what will their health or their medical situation look like in the future? So we spend a lot of time talking through health care in retirement and what does Medicare look like. Or, you know, if you're under 65, what will you do for health care as you bridge that gap, but thinking about those health care costs, because research says that when you're retired, you actually will spend more on health care than you do on housing.
So it's definitely something that we want to address and have a plan for. So that comes to the financial side of planning. So a couple things for you to think about on the financial side. One is looking at how much money do you earn today? What's your current income? Now this is, especially if you're still working, thinking about how much money you're earning today? And then how much debt do you have? Do you have any debt? Will it be paid off by the time you retire? You know, we have some clients we're working with right now who are retiring about 18 months. And that is their plan.
They've got some fun toys, an RV and motorcycle and things like that. And so that's their plan is to have all the fun toys paid off before retirement. So they can go and travel and do the things they want to do. And then are you saving money right now? How much are you saving? Are you just putting into regular savings? Are you putting into retirement accounts and investments? How much money are you putting back on your balance sheet for the future. And then we also call it a spending plan for retirement. Not a budget necessarily, but more of a spending plan, just so you can think intentionally about where you want your money going in retirement.
So no matter where you are, again, whether you think you can wait or not, I will tell you this, you do have to be proactive when it comes to your money. And when it comes to planning for this, getting ready for this next phase. You have to be proactive with your decisions, so that you just that way you don't know your what your choices are. And then you have to wait. And maybe you're not prepared.
Okay, so I want you to just imagine for a second that you wanted to buy a house and you want to buy this house three years from now. But in those three years, you don't think about it. You don't look at your income, you don't look at you know how much you're going to need for a loan? How are you going to get a loan, you don't look at how much you're gonna need for the downpayment or what our closing costs gonna be. You don't look at anything. And we fast forward three years, guess what, you're not buying a house, you're not going to be ready to buy that house.
John: Party pooper.
April: But here's the fun part, John. But what if you are proactive instead? So you said, okay, I'm gonna buy this house in three years. And so what if you're proactive? What if you started meeting with realtors and mortgage brokers and started getting information? What if you started researching neighborhoods and types of houses that you want to be? You know, do you want to be in a family-friendly neighborhood? Do you want to be in a 55 and up community? Do you want to be in a condo downtown or you want to have more space and more land.
Start thinking about the type of house you want to be in. And then getting price ranges and knowing how you're going to finance that. Think about the difference that will make if you're proactive if you plan to buy the house. Right. So today, we talked about a couple different things. But we talked about five financial risks that you may have in retirement, how to start alleviating some of those risks, right. And we also started talking, talking about how to build a vision for what your retirement will look like.
Well, I think it's incredibly important as you're starting to think about what it's going to look like for you that you don't just do this on your own, but you make sure that you've got a guide that you've got someone that can help you because you're going to have a lot of decisions to make. So I would recommend that we schedule a time for a discovery call. So let me explain what a discovery call is.
A discovery call is a 30-minute call where we're going to help you get clarity. We're going to help you get clarity About that retirement vision, you know, what is it that you want retirement to look like? That's going to include clarity about your financial goals and concerns. We're going to talk about what opportunities are available for you, to you. Is it one of the strategies we talked about in our planning process, right, in being able to alleviate those financial risks in retirement, you know, what opportunities do you have? What's holding you back? What are the roadblocks in your way?
And then what specific steps can you take that's gonna save you time and money and help you get there even faster. Okay, now, I don't know if we're the right fit for you. Because I'll be honest, we're not the right fit for everyone. But if we schedule a time for a discovery call, that's going to help us determine if we're a good fit to work together. So a discovery call, this is great for you, if you're motivated, if you're committed to reaching your goals, you know, you've got this lifestyle in retirement that you want.
If you're coachable, and you're willing to, to learn and be open-minded. And if you take action, okay. But this call is not for you, if you're not coachable. If you're not willing to listen to other ideas, or if you're just expecting some unpaid consulting. So let me go through and walk you through how to schedule a call. You can call our main office at 850-562-3000. Again, that number is 850-562-3000. And you can ask to schedule a discovery call from our webinar. Okay.
We also have a link on our website for you to be able to schedule a call as well. And that is johnhcurry.com/aprilschoen, okay. That's the best way, if you want to do it through the website, it'll pull up my calendar, and you'll be able to see and pick a time, date and time that works for you. So that's johnhcurry.com/aprilschoen. But you know, John, I'll make sure that I send that link out to you. I'll get an email to everybody after the webinar, so that they have the link. And they also have the phone number as well.
John: Make it easy.
April: That's right. That's right. Well, I want to just say thank you to everyone for joining us on the call today. Appreciate you being on and we look forward to talking to you soon.
John: April, this has been fun. We're talking about some things that because of the uncertainty and inflation and the volatility today, it's bringing back memories of people that literally I've been working with since September of 1975. And just thinking about how they're plan has grown. And as I've grown with them, we've grown together, of what you have 48 almost 48 years later, and it's just nice, just kind of walking down memory lane a little bit. It's a serious subject. And I hope that people will be serious about it. Laugh have a good time, but be serious about your planning.
April: That's right. Great. Thanks so much. We'll talk to you soon.
Voiceover: If you'd like to know more about John Curry services, you can request a complimentary information package by visiting Johnhcurry.com/book. Again, that is Johnhcurry.com/book. Or you can call our office at 850-562-3000. Again, that number is 850-562-3000. John Curry, chartered life underwriter, chartered financial consultant accredited estate planner Masters in Science and financial services, certified in long term care. April Schoen and John Curry are registered representatives and financial advisors of Park Avenue Securities LLC. Securities products and advisory services are offered through Park Avenue Securities, a registered broker dealer and investment advisor. This firm is an agency of the Guardian Life Insurance Company of America, Guardian, New York New York. April Schoen is a financial representative of the Guardian Life Insurance Company of America. Guardian, New York, New York. Park Avenue securities is a wholly owned subsidiary of Guardian. North Florida Financial Corporation is not an affiliate of 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 or 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 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 through 2023. 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 are stated or their own.
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