If you miss the Money Puzzle TV Show this past Saturday, we talked about why your retirement looks very different from your parents and generations before. The market changes every day but is not the only explanation for these differences. How we plan for retirement and where that money is coming from make staying up to date with your financial plan even more important with planning for the future.
Speaker 1 [00:00:20] Hello and welcome to The Money Puzzle. I’m your host, Randy Major. Today, I’m with Bryan Ramsey and Eric Douglas of Family Wealth Planning Partners. Welcome, gentlemen.
Speaker 2 [00:00:30] Thanks.
Speaker 3 [00:00:31] Good to be here.
Speaker 1 [00:00:31] Eric, how are you today?
Speaker 2 [00:00:32] I’m fantastic. Thank you.
Speaker 1 [00:00:34] And Brian, how are you doing? Couldn’t be any good to see you again.
Speaker 3 [00:00:37] Good to see you again.
Speaker 1 [00:00:38] Thank you. So today we’re going to get into how retirement has changed so much from then versus now. And boy has it.
Speaker 3 [00:00:48] Yes. Almost another year, but.
Speaker 1 [00:00:50] Yes. Yeah. So let’s talk about retirement then.
Speaker 2 [00:00:53] Okay. Well, when we talk about what retirement used to look like, we think back to like the eighties. Right. And typically you, the traditional worker, would spend 30, 40 years with the company. They would go to retire. They’re going to get their gold watch right, get their gold watch. They’re going to get their pension and they’re going to put their money in in high yield savings or CDs at the bank. And they’re going to get double digit returns. That just doesn’t exist in today’s environment. Right. Now, at the same time, you’re also paying much higher interest rates on your mortgage. But but in today’s very low interest rate environment, you’re just not going to get that type of yield. And so we basically have to completely readjust the way we think about retirement. Talking about those pensions, 85,000 corporate pension plans have been cut within the last couple of decades. That’s really a remnant of the past. We still see some clients and some baby boomers that are coming in, that are approaching retirement, that still have some old school pension type of plans, but they’re really a dying breed.
Speaker 1 [00:01:52] So what are the different ways folks retire now without pensions, Brian?
Speaker 3 [00:01:55] Yeah, well, I want to go back just real quickly. Great question, by the way, but I want to go back into space. All right. So and I’ll even go back, you know, back to where my grandparents or even my parents, which are on the leading edge of kind of the baby boomer generation outside of exactly what is done, that they just didn’t have the longevity in retirement that we see today. So, for example, my grandparents, you retire at 65. You didn’t live very much longer than that. So retirement, you didn’t have to kind of plan for years and years and years in retirement. And it’s we don’t see that today. I mean, longevity now is you could be in retirement for 30 years potentially. So. So it’s changed. It’s changed making. Now, go back. What was your question again?
Speaker 1 [00:02:35] So I think I ask what what do folks do now? You know, you’re not seeing the pensions anymore. How are the other avenues that they’re getting their income stream from to retire?
Speaker 3 [00:02:44] Yeah, well, now it’s all about saving in your four, okay. Or saving, you know, in the past it wasn’t like that. But now it is about how much you can save and create an income for yourself. And we’ll go back to what Chris was talking about in the last show. We talk about permanent predictable income and nonpermanent, non predictable income. And part of the overall planning strategy is to develop that permanent, predictable income. And a lot of people rely on Social Security. Obviously, that’s the big one. But there are avenues or strategies that you can put in place to increase that permanent predictable income. So create like a modified pension, if you will, to cover certain expenses. And so that is that’s where, you know, we can make the, you know, the future or the current sort of kind of look like the past. Right. It’s not quite the same, but we can create the best we can.
Speaker 1 [00:03:32] So what you’re saying is retirement used to be so easy, it was stress free. It’s not quite like that anymore. But your job and what you do at Family Wealth Planning Partners is recreating that, making it stress free, making a solid plan.
Speaker 2 [00:03:47] Well, yeah, we’re putting together the pieces of the puzzle, if you will. So if you think about your retirement and your entire investment portfolio as a puzzle, you know, your life insurance, your investments, your stocks or bonds, all of those different things are puzzle pieces. This is why you go through the financial planning process is to put those pieces together. So at the end of the day, you have a very clear, pretty picture that you can put on the wall and be proud of and understand how all of those pieces fit right.
Speaker 1 [00:04:12] So not only does retirement look so much different today, but there’s also a lot going on in the world today. What are the concerns of your clients coming in to see you today?
Speaker 3 [00:04:21] Yeah, for right now, it’s I’d say the biggest is inflation. Inflation is a major issue. I think it’s a topic we’re going to cover sometime over the next couple of weeks. But it’s a major issue because really your dollar that bought, you know, a good, you know, six months ago or two years ago is not, you know, now that’s going to cost you way more than a dollar or so. But that happens. And you can go back in any part of history and and look and see inflation is an issue. So you have to plan for it. And so that’s one of the things that we do in our planning process, is to show clients that, you know, what you’re spending today. So if you’re spending X amount of dollars per month, it’s not going to be the same in 20 years as you have to make sure you plan for that.
Speaker 2 [00:05:00] I’ll even add on to that just a little bit. So inflation is obviously a huge topic of concern for so many people, right. But at the end of the day, their concern isn’t necessarily inflation. It’s running out of money. Yeah. If the money that I have today is not going to buy as much tomorrow, that’s their main concern. And they don’t want to run out of money. And so that’s where we really need to come in and create that. Peace of mind that we’re going to be able to continue the income that they’ve gotten used to throughout their and the entirety of their retirement.
Speaker 1 [00:05:27] Right. And that’s another big change from then to now. As now, thanks to a great health care, we’re living a lot longer, thus needing a lot more money, right?
Speaker 2 [00:05:37] Well, there’s some great stats around that, too. So when Social Security was created, it was designed for a lifespan of about 65 years. And you didn’t turn it on until you got really close to that 65 years. Well, now, if you have a married couple and both spouses live to the age of 65, there’s actually a 92% probability that one of those spouses will live to the age of 90. Mm hmm. So. So you need to be able to we have to plan for that eventuality, especially when we have, you know, a couple where both spouses are that age. We have to include that in our planning, because that really is one of the bigger threats to retirement success. Is outliving your.
Speaker 1 [00:06:15] Money? Absolutely. I’d say that’s the number one concern.
Speaker 3 [00:06:18] Yeah, absolutely.
Speaker 1 [00:06:19] What do you see that clients want the most in their retirement plan?
Speaker 3 [00:06:24] They really want to make sure they’re not going to run out of money. But just that. Yeah, but but it is it is about cash flow. And we talk about this a lot because what they want to know is I’ve got these buckets of money. So Chris mentioned this in the last year. We have different buckets. People have money that’s in a401k and Ira and they have money that’s not in that bucket. And so what they want to know is how do we make all these pieces work? How do I know how much I need to take out of an IRA every month? When do I need to take it out? I think Eric mentioned this in the last show, talking about, you know, making sure that money is consistent, comes in on the first of the month, comes in on the 15th month. Well, where do we need to pull? You know, let’s say Social Security comes out on the first of the month. Where does the money come from on the 15th month? Do we pull some out of an IRA? Do we pull some money out of a Roth IRA? Do we pull some money out of a non-qualified account? That’s really what they want to want to see is, you know, make sure that you set it up and it works. But I just want to know where the money’s going to come from and when it’s going to hit my account.
Speaker 1 [00:07:20] Okay. Such good information and a lot of decisions to make when it comes to retirement, which is why folks should come in and meet with you both. So, Eric, I know you have a very special offer for the first ten callers today. Let’s tell the viewer what that is.
Speaker 2 [00:07:34] Yeah, absolutely. First thing caller is please call us 844 900 5210. Give us a call. Come in, schedule a meeting with us. We’re going to go through and walk you through a full scale comprehensive financial plan. Come in with your puzzle. Bring us your puzzle. We’re going to take all of those different puzzle pieces, your life insurance, your investments, your estate plan, all of those different things. We’re going to put those puzzle pieces together for you so you can understand the picture. We’re going to make it look pretty for you and give you that security as you enter into the income phase of your life.
Speaker 1 [00:08:06] Folks, we are going to go ahead and open the phone lines. What Brian and Eric are offering to you is the opportunity to come and meet with them complimentary and have your retirement plan set up for a peace of mind. Really enjoy these latter years of your life. Pick up the phone right now and give us a call. All it takes is a phone call in about an hour of your time when you come in and meet with them and they’d love to meet you. 844 952 ten. Is the number. It’s on your screen. And we’re going to take a very short commercial break and be right back with more. Please stay tuned.
Speaker 4 [00:08:42] How confident are you in your current financial plan? Do you know with certainty how the recent market volatility will affect your future hopes and dreams? How much are you paying in taxes and how much are you losing to unnecessary high fees? You didn’t work to save this money so that you could spend your time worried in retirement. Now is the time to take charge of your finances so you can feel confident about your future. Call in during the next 30 minutes of today’s show, only to set up an absolutely complimentary, no obligation, full blown financial review that will result in your own customized written plan. This is a $999 value that we’re giving away, complimentary to the first ten people who respond. We’ll start with a full blown analysis of what you already have by writing a report to untangle how much you are currently paying in fees, how you’re allocated for risk, and what it’s costing to work with your current advisor. Next will identify your goals. Where do you see yourself in the next five years? Where do you want to go? And who do you hope to go there with? Is your current financial plan set up to get you there without mishap? Let’s design a roadmap to create a financial plan you can follow with confidence. Get the peace that so many people are missing from their retirement. Find out how having a written plan can make a difference to your retirement dreams. Call now to schedule your complimentary, no obligation, full blown Financial Review today.
Speaker 1 [00:10:16] Welcome back to the Money Puzzle. My name is Randy Meijer and I’m chatting with Eric Douglas and Bryan Ramsey of Family Wealth Planning Partners. We’re talking today about retirement then versus retirement now. Boy, has it changed so much, right? Both.
Speaker 2 [00:10:32] Absolutely. Absolutely. It’s quite a bit different than what it used to be.
Speaker 1 [00:10:36] It is. So let’s talk retirement today.
Speaker 2 [00:10:39] In a word. Confusing.
Speaker 1 [00:10:41] Yes. Hence the name, the money for the right.
Speaker 2 [00:10:43] To be very clear, it’s very confusing. So we talked about this earlier, right? You get your gold watch, you get your pension, you put the money in the bank. Pretty simple. Not so much today. You have so much financial media out there that is selling consumers so many different types of products. If you come into our office, we’ll probably talk about a few different recommendations. If you go to another advisor, they might give you something completely different. There are so many different types of products, so many different funds, so many different things that you can utilize. It can all become very overwhelming and very, very confusing too, to the average everyday consumer.
Speaker 1 [00:11:20] So how has retirement changed over the last couple of decades, Brian? What have you seen during your time of being a financial planner?
Speaker 3 [00:11:29] Yeah, well, I’ll go back to it’s all about income. There’s a lot more income sources than what, let’s say my grandparents or my parents had. And we’ll go back to what we were mentioning in the first segment was pretty much a pension and then social equity came in in the thirties, forties or something like I forgot the date, but, but then Social Security came in. We see an awful lot of folks that walk in the door that they pretty much ever lived their retirement on Social Security. And then they kind of find out, well, okay, that’s not necessarily the any more income. It’s not covering all of my income needs. And so so my parents, for example, they didn’t have a whole lot of income sources because they didn’t have a for their entire working career. So they now have a chance to build up a large for okay balance. Now we see that there are lots of opportunities that you can set up income sources in retirement. So as an example, there’s always Social Security or we think it’s always going to be Social Security, put it that way. But we have we have money coming out of an IRA or a Roth IRA, but there’s also strategies you can put in place where you can create a lifetime income benefit or lifetime income. But it goes back to the analogy I used in one of the earlier shows. We were talking about seed versus the harvest release. I think I mentioned that. But if you’re if you’re if you come to us early enough and we have plenty of time to strategize, you can plant a seed that in years to come, you can reap the harvest. But if you come to us and say, I need income today, it’s a little bit tougher to do that. But there’s lots of strategies you can put in place and lots of income sources that can provide lifetime income. But you got to be able to you got to have some time on your side to let it grow. Right.
Speaker 2 [00:13:09] When we talk about retirement income, especially as it relates to Social Security, I just want to add something on to that, because we do have a lot of clients that come in thinking that Social Security is going to replicate their income. Social Security was only designed to replicate about 40% of your overall income needs. We have another 60% that we have to cover in some way, shape or form. And that’s usually where we’re putting together that puzzle, where we’re pretty much playing with that 60%. And we’re trying to figure out the best way to to fill in those gaps, that gap between the 40% of the income that you need to get to that 100%. And in what Brian was talking about, if we can get that, you know, that income stream that’s kind of that permanent predictable income. If we can get you to about 75 to 80% of your income needs met through permanent predictable income, through Social Security and other sources, and leave that remaining 20, 25% to pull from your investments, from your long term growth. That’s really going to be kind of an ideal retirement income point for you.
Speaker 1 [00:14:06] And Social Security is, of course, just a very important piece of the puzzle, but there’s so many different aspects to it. Retirement Now, how do your clients feel about retiring currently?
Speaker 2 [00:14:17] Apprehensive. Apprehensive, especially with so much media and so many headlines that are just scaring folks to death. We talked about inflation in the earlier in the episode. There’s there’s so many things to worry about. I had a client, actually, as a matter of fact, yesterday to give me a call. And we’ve gone through the planning process and I’ve gone through, you know, five ways to Sunday that he’s going to be okay. We even mapped out his he’s moving down to Florida. He’s buying a Florida house. And he’s about to. So we build a Florida house. He’s already bought the lot. He actually called me from Florida yesterday, as a matter of fact, when I was heading out here to ask me, so, are you sure I can do this right? Yes, we met this out. I’m going to send you some updated numbers, but you’re good. You didn’t do it. It doesn’t really matter too much what happens in the market, because we’ve we’ve laid out in different buckets. We segmented what his portfolio looks like and he’s got so much set aside to meet his short term income needs, he’s going to be okay. But even so, he he knows that. Right. But emotionally, it’s so difficult to grasp and to move into that income phase of your retirement, you know, that that switch in your mindset is really, really difficult to make.
Speaker 3 [00:15:30] You know, I had one piece on to that is you said, how do clients feel? I’d say the prospects that come into our office are folks that are not yet clients. They’re probably a little bit more apprehensive. And the biggest that they made was coming in the door. That’s the that’s the hardest step is is just a walk in the door. But they’re probably a little bit more apprehensive. But once you go through a plan, as Eric was alluding to, and you show them that no matter what they do, they’re going to be successful, or here are the steps to put in place so that you make sure that you’re not ever going to run out of money. It really doesn’t matter what happens in the market. Yes. Know they call and just want to make sure that you are watching over their over their assets and making sure that, you know, you’re kind of on top of things. But for the most part, they just want to know you’re in the corner. Right? Right. And yes, there’s going to be markets, ups and downs, but they know as these things happen, we’ve already stress test your portfolio. You’re not going to run out of money, you know, so we don’t really get a ton of calls. And even back in 0809 when I was in the industry then, we really didn’t get a ton of calls. They were calls questioning how you guess so watching over things, you know, we were still making changes. No, because as long as we continue to do this is a long strategy. This is a long play. This is not something we’re doing. You know, over the course of a couple of months, you’re going to be fine.
Speaker 2 [00:16:52] But one thing we do when we’re putting together plans, if we’re doing our job correctly, you know, it’s almost like a SWOT analysis, strengths, weaknesses, opportunities, threats. We’re going to walk you through the financial plan, show you the rosiest picture possible. If all things go well, this is what it’s going to look like. Okay, then we’re going to then we’re going to throw bullets at it. Okay. We’re going to throw holes and we’re going to find all the weaknesses and all the threats. And we’re going to show you kind of a worst case scenario if this happens. If that happens, right, if someone passes away early, if someone lives too long, medical expenses. Right. We’re going to include all of those different variables specifically to address that concern that Brian just raised is we want you to have that security, that peace of mind, knowing that we’ve run through the gamut of all the different variables that could occur in your retirement. And, you know, even if the worst happens, you’re going to be okay.
Speaker 1 [00:17:41] So almost like a stress test, if you will. Absolutely love that. So important. And that’s why life has so many ups and downs and so many things occur that we do not plan for. So it’s very important to really understand this because we just don’t know, you know, what’s what’s coming around the corner. That’s right.
Speaker 3 [00:17:59] Yeah.
Speaker 1 [00:18:01] So more about this last phase of distribution and retirement than and now. So can you expand on that a little more?
Speaker 3 [00:18:11] Yeah. So in the so I think we we did a show not too long ago about sort of that income phase of life. And that’s really the if we could say that that’s one of the pieces that we spend a lot of time on is just developing that income strategy. And I can’t stress enough and I know we talk about this a lot, but you’ve got to develop the income strategies to put in place. And some of it you’ve got, like I mentioned, you’ve got to have time to be able to put it in place. But you can almost recreate sort of that income that my grandparents lived with, not a not a long time, but they did live with it with it’s kind of permanent, predictable income. But you got to you got to have some time and you get to plan for it. But it is doable. And we have clients that come in all the time and they are nearing retirement or better yet, they’re earlier than that. Right. So they’re in their say mid-fifties or so and they’re like, Hey, I’ve got about ten years left. I know that I want to cover 75% of my normal income need every month, but we can put strategies in place to make sure that that’s covered.
Speaker 1 [00:19:11] Right in the time to do that is right now. So I think this is a great time to reopen the phone lines. Let’s remind the viewers of the special offer you have for them today, Eric.
Speaker 2 [00:19:20] Absolutely. Give us a call. 844 905 210 first ten callers. We’re going to offer a complimentary financial plan. Bring us your bring us your puzzle. We’re going to put all of those different pieces together for you in a week to help you understand and really grasp where all those different puzzle pieces fit together and in how your portfolio looks in totality.
Speaker 1 [00:19:43] Folks. All you have to do is pick up the phone and call the number on your screen. Today is the day to really get peace of mind on what your future looks like. Don’t procrastinate. Do yourself a favor and just pick up the phone and call 844 952 ten. We’re going to go ahead and open the phone lines. Secure a spot for yourself to meet with Brian and Eric. We’re going to have a quick commercial break and we’ll be right back with more.
Speaker 4 [00:20:09] As a good saver, you’ve been putting away money during your working years. Studies find that the biggest fear of retirees is running out of money. Market volatility isn’t just a downward movement of stock prices. It’s the size and frequency of change. The more dramatic the ups and downs, the higher the volatility. This can put savers who are newly retired or a few years away from being retired at greater risk. Today’s generation of retirees is not receiving traditional pensions, as our.
Speaker 3 [00:20:40] Parents or grandparents did.
Speaker 4 [00:20:42] Instead, we have retirement accounts such as 401 KS or for all three B’s. These accounts typically expose your money to market risk. The last thing you want right before retirement is to lose a portion of the money you need for income. But how do you turn these accounts into a retirement income? Is it safe to keep all your retirement money sitting in the stock market? The last thing you want is to lose a portion of the money you need for income due to market loss. By working with a financial professional, you can learn how to turn a portion of your savings into an income stream for life and income for the life of your spouse. If you’re married, we all have moments in our lives when we wish we had taken action sooner. Don’t let procrastination rain on your retirement parade. Act now before it’s too late. Please call our office to set up your no cost, no obligation retirement income review today.
Speaker 1 [00:21:35] Welcome back to the Money Puzzle. Thank you so much for being with us. I’m your host, Randi Meijer. And I’m talking today with Bryan Ramsey and Eric Douglas of Family Wealth Planning Partners. We are talking about retirement then versus retirement today. And in this segment, we’re going to talk about how you’re trying to recreate the simplicity of retirement like it once was.
Speaker 3 [00:21:58] Yes. I’ll give you a quick example. So there’s been a number of years ago we had a client, they came in and they were, I don’t know, say in the late fifties, 56, 57 or so. They had we had done a financial plan for them. They said, okay, ideally, we’re going to retire at this particular age and, you know, had some other financial goals. So at the time we took some of their assets they had and we basically planted the seed, right? Go back to the same story of plan the seed. And we knew at some point we’re going to be reaping the harvest of this. So they came in about two years earlier than they had originally planned. And they said, hey, you know, some stresses at work and had made the life work balance not so pleasant. And so she she said, hey, I think I’m I think I’m just about finished. You know, can we can we relook at things? We’re like, absolutely. So we went back and we relooked at their plan and we said, let’s look at the alternative of you retiring a little earlier. But that means we’re turning this we’re turning this lifetime income that we’ve been building. So we’re going to now reap the harvest of the seed we planted years ago. And so we did exactly what Erik had mentioned earlier or maybe was a couple of shows ago where we had set up the Social Security when they because they were turning the Social Security on younger or earlier than full retirement age, because that was their plan. Right. And that was coming in on the first of the month. And then we turned on this harvest, if you will, to come in on the 15th of of every month. So that’s exactly the way we set it up. Then we just retested their scenario. So we plugged back in our planning software and said, okay, let’s, let’s go back to the numbers. Like one show we did. At one point we were talking about we want to give information to clients so they can make an educated decision or more accurate financial decision. So we so we ran the numbers again and showed them, yes, you can retire. You could retire today if you really want to do. And the other question, she’s like, well, you know, we we may want to take vacations. We didn’t we had never talked about that. But now retiring is sort of staring us in the face. We may want to do some vacation. And can you plug that number in? I’m like, sure. What’s that number look like, $10,000 a year. So we plugged it in and we said yes. Not only is that you’re still successful if you vacation $10,000 a year or spent that money, you can actually retire now. And the interesting thing was and I told him, don’t make a decision today, take this information, go back and you have to sleep on it to make sure you address the it the emotional side of that financial decision. Because that’s a that’s a big decision to walk away from a career. But the interesting thing was she called me back and we started chatting and she was like, okay, I just want to fine tune these numbers real quick. And we did. And at the end of it, this was a phone call. And and so I plug the numbers into like, you know, you’re still 100%. And she was really quiet on the phone and I was like, Are you okay? And she was crying. Oh, and she was like, I just I never I didn’t think I was going to be able to retire. Now, stress my stress at work was overwhelming. But now I know. And you back to the puzzle. We put all the puzzle pieces. Do we have to change a few? Yeah, we had to modify them, but that’s okay. But we still had. Their puzzle was complete and now she retired. Just you retire or she’s retiring it at the end of 2021. So. So it’s it’s a very cool story. And I’ll tell you, that’s one of the things that is so awesome about our business is we get to take sort of that jumbled up puzzle pieces that are land scattered all over the floor. And by the way, we don’t judge anybody. Right? Come in our door. We don’t judge anyone as my fact. You know, our puzzle pieces were once scattered, too, but we’ve managed to put them all together. And that’s the cool part, is when you get to put a puzzle together and say, this is how it all works. And to see somebody walk out and they’re looking at each other going, Yeah, we’ve done this, we can make this work. It just it’s an awesome feeling.
Speaker 1 [00:25:50] Oh, I’m sure it is.
Speaker 2 [00:25:51] Well, when I got into this business, I mean, that quickly became one of the greatest feelings I’ve ever had. When you’re in a room with a client and you’re walking them through the steps of their plan. Right. And they’re showing you’re showing them how everything fits together. And to see you can literally see the moment when the lightbulb goes off and they start to understand, I’m okay, I can do this. And all the things that they talked about, all the things that they dreamed about, you know, get in the RV and the travel and whatever, whatever it is, the fact that we can make that happen for them or at least help them because really they did all the hard work. We’re just kind of helping them piece it together. Right. But but to be a big part of that is really just a fantastic feeling for us and really very, just very, very rewarding.
Speaker 1 [00:26:31] And it’s so comforting to know that it is an ongoing personal. As times change, as someone’s financial situation may change, you’re there for them to guide them through those changes.
Speaker 3 [00:26:42] Well, yeah. And unfortunate in our business. Well, I was mentioned a minute ago, you know, we get to see people say, okay, yes, we’ve accomplished our goal. They get to go off into retirement and they’re traveling and they send pictures in. And, you know, when they come in, you know, half the meeting is them talking about where they just were, unfortunately, have to deal with the other side, too. So we’re we’re with families that lose loved ones or someone passes away or they go in to phase of long term health care needs. And that’s the tough part. But that’s really where where it’s probably more important. Anything else is that we get to show them, yes, someone’s passed away or someone you know is in full time care. Let’s let’s retest your financial situation and make sure that you’re still going to be in good shape. And that’s really where even though it’s kind of a sad situation, it’s probably more rewarding than anything else to show them. Yes, we can continue to make things successful.
Speaker 1 [00:27:33] Well, Brian, Eric, I want to thank you so much for such valuable information today. It was so nice being here with you and to the viewers at home. Thank you so much for joining us. We appreciate you spending your time with us. Please do call the number on your screen and take advantage of the special offer today. I’m your host, Randy Meijer. We’ll see you next time.