RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:00:00]
NARRATOR: You’ve found it. It’s your safer place for retirement planning. Prepare to be coddled in pure fiduciary goodness with your host and President of Decker Retirement Planning, Mike Decker. This is Safer Retirement Radio. If you’re in or near retirement, listen up and learn about a math based, principle based approach to retirement that is designed to help you enjoy a safer retirement. These strategies are to help protect and grow what you’ve saved and live the life you want today. So grab a pen because your safer path to retirement planning starts now.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:00:37]
MIKE: Welcome to Retirement Radio or Safer Retirement Radio, dare I say. We’re here with the team. I’m Mike Decker. I’ve got Cameron and Josh, the safer retirement team, all about content that you can actually use. As the motto goes, get the transparency that you deserve today. We’ve got a packed show. We’re gonna finish up last week. We talked about a bleeding heart and how your kids could destroy your retirement unintentionally. We want to talk about that as we promised. But today’s show really it’s all about timing. Now I’m not saying market timing though.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:01:11]
MIKE: Let’s just agree. Market, timing the market, or trying to time the market is a great way to look smart and lose money. Okay? But when it comes to timing, timing of when you want to retire, when these life events can happen, how you pivot to some different traumatic events or beautiful events that can happen in retirement, as well as a number of other things. We’re gonna start today with a retirement checklist so you can right now, as you’re listening to this show, just take a mental note and go through your retirement plan. And are you checking off all the boxes here? Very excited to go through this today.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:01:46]
MIKE: Also we’re gonna be talking about, like I said, retirement boundaries, difficult retirement events and how to overcome them, and if we have time, we’re gonna talk about Roth conversions. And they’re very popular right now, especially at the end of the year. If you’ve got the ability to convert some IRA assets to your Roth assets, that could be a very lucrative situation for you long term. Keep in mind, taxes, or tax rates, are relatively low historically speaking and national debt is relatively high, actually historic high. I’m being nice there. Where do you think taxes will go?
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MIKE: Probably up in the future. So when it comes down to do you want to pay a lower rate, relatively speaking, now, convert it to Roth, have it grow, and then distribute your assets tax free, not have required minimum distribution burdens and so on and so forth. There’s a lot to be done here when it comes to a math based, principle based approach. And we’re gonna dive into the details should time permit. All here on safer retirement radio. As always, if you hear something that you like and you want to talk to one of our fiduciary planners, purebred fiduciaries, you can go to Decker Retirement Planning dot com and on the bottom just click “Get Started” and schedule a safer retirement review.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:03:03]
MIKE: You can also call us, write this number down, if you hear anything. It’s 833-707-3030, just that number right there. You can call in if you’re driving or traveling somewhere and don’t want to use your smartphone to get a hold of us. We’re here for you. No cost to you. You must be 55 years or older but we’re here for you to give you the transparency that you deserve. As fiduciaries we’re in your corner. We want to make sure that we can do things correctly here. Especially in regards to your retirement. Especially, I mean I, check this out. When it comes to financial professionals, and their longevity, I think we missed the boat on this one.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:03:43]
MIKE: This is a financial advisor article that had kind of confirmed my suspicion, 37 percent of all financial advisors expect to retire over the next decade. Well I would think so.
CAMERON: And that’s a pretty big percentage.
MIKE: That’s a huge percentage.
JOSH: That’s a giant piece of the market right there.
MIKE: Yeah. Nearly 40 percent. Oh my goodness. What would you do if your financial professional retired? Could you sustain your retirement plan on your own? Well here’s some more statistics on the matter here. Twenty-five percent of them have admitted to having no succession plan. As in they’re done. Good luck.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:04:24]
MIKE: Twenty-eight percent said, well they expect another advisor to just buy out their practice or succeed them. Okay. Well who’s to say they’re gonna continue on what you agreed to? Forty-seven percent, it’s just kind of in the wind. If the average retiree is gonna be 30 plus years in retirement and we’re expected to have one, a bear crash, or a bear market in the next near future and MIT and other researchers are saying, “We’re gonna average two, three, or four percent average returns for the next 10 years” these folks, these advisors, are not gonna want to have to try and make something happen over the next 10 years.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:05:04]
MIKE: And so it’s not like they have 10 more years. They’re just gonna retire over the next decade at some point. I think it was the average retiree’s age, or average financial professionals age is 52 years old. What a conundrum. You want someone with experience yet you don’t want someone to retire with you.
JOSH: Yeah. It’s kind of a daunting fact there knowing that so many of them, you said the average age is 52?
MIKE: Yeah. At the end of 2017 the average age of the United States’ financial advisor was 52 years old.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:05:43]
JOSH: Yikes. That’s scary.
MIKE: Yeah. Most of our retirees that we’re working with are 55 to 60 years old when they retire. So they’ve got three to eight more years, roughly speaking. And if the crash happens and they say, “Forget this. I don’t want to deal with it anymore,” all I’m suggesting here is to make sure that you’re not only working with a fiduciary, someone who’s Series 65 licensed, that’s independent and works for an RIA, so it’s fee based, not commission based, that they also have a succession plan.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:06:19]
MIKE: See what’s interesting here at Decker Retirement Planning, and I’ll use us an example, ‘cause we know ourselves the best, is if your planner at Decker Retirement Planning died, there’s an entire servicing department that takes the plan that you agreed to and continues on. And sure a planner would succeed and step into the place, get to know you and what you’re trying to do, but you’ve already got an army behind you to carry you through retirement. This is a big aspect of what we call a safer retirement and that’s longevity.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:06:50]
CAMERON: Not only that but you’ve had some servicing individuals helping you with this safer distribution plan the entire time you’ve been with that planner. So the transition is merely a get to know you because your distribution plan is already running as it should. You have individuals within the company very familiar with your accounts and your situation and the transition seems much easier than a lot of these alternatives.
JOSH: So the team you’re already working with stays the same. Your planner changes but our servicing team is somebody they should already know.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:07:27]
CAMERON: Correct and have, in many cases, built a relationship with over years of working with ‘em.
JOSH: Mm-hmm.
MIKE: So we have the older age of wisdom and the younger age of longevity paired together to give you what you’re essentially needing, which is a long retirement. I mean for goodness sake, we’re healthier than we’ve ever been before which means we’re living longer than we’ve ever done before. But the problem with that is we’re also living longer than we’ve ever done before. Most people in the retirement age, used to be you retire for about five, six or so years and that was it. And that’s fine.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:08:02]
MIKE: But 30 years, that’s a pretty long-term commitment. There’s a lot of marriages that don’t make 30 years. And I’m not trying to be dark about the situation. What I’m suggesting is to make sure not only do you like and love your plan and believe in it but too, that you’re working with someone that can continue to carry it out for the entirety of your retirement. So as we go through the checklist here, just keep in mind, if there’s some alterations to your plan that may need to happen. If there’s a conversation you’d like to have with a purebred fiduciary, you want to come in and talk to us, let us know. We’re the longevity play.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:08:41]
MIKE: Let’s go through the retirement checklist. Shall we gentlemen? The first two I just want to talk about that are key points when it comes to preparing for your retirement and that is if you’re working, contribute to your 401k, contribute to, or foster the IRA, qualified assets can be very helpful. But too many qualified assets can be detrimental. Savings need to be a balancing act. Josh, you’ve had some clients in particular where all they had was a 401k and they thought, hey, I can take more income, they hadn’t connected the dots yet.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:09:17]
MIKE: They thought that they could take more income and pay less in taxes. And there’s a rude awakening.
JOSH: Yeah. It’s actually really common that we come across this. When people come in and we’ve even had a few come in and say, “Hey, I retired last week. Now what do I do?” Without having a plan in place ahead of time. And then we take a look at it and find out, oh you’re 55 and all of your money is in your 401k. Not necessarily a bad thing. There’s ways around it and there’s things we can do to help ‘em out with it but it definitely makes it so you have to be much more strategic, especially in the first few years of retirement. If you’re not strategic you can dig yourself a hole real quick.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:09:57]
JOSH: And then we can always find a way around things but it makes it a little bit more difficult. But it does happen pretty often that we have clients come in the door that have a lot of qualified assets, they’re trying to retire ahead of time, or they’re trying to retire and just not really understanding what that means to have qualified assets. And then it just becomes a conversation of here’s where you’re at. Here’s what we can do. What would you like to do as the next steps?
MIKE: Mm-hmm. For all you 40 year olds and early 50 year olds, my preference is to have around 60 to 80 percent qualified assets and the rest as non-qualified.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:10:34]
MIKE: So non-qualified being it’s in your checking account your brokerage account, your whatever account. You’ve already paid taxes on it. And it’s just essentially savings and investments or not. But it’s assets that you can take and spend without any consequences. There is a benefit to having IRA assets. There is a benefit to having non-qualified assets. We don’t want to ever work in extremes. There needs to be a balance. Taking your 401k contributions, whether it’s two, three, four, or whatever the percentage that your employer is offering there, that’s free money.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:11:10]
MIKE: Max out that contribution. But once you’ve maxed it out it’s important to take a hard look at what the balance is between your qualified assets, your IRAs, your 401ks, and your non-qualified assets. Now Roth is the, kind of the tricky in between. It’s a qualified asset but it pays tax free and it grows tax free. I mean frankly, if someone came to us and had 100 percent of their assets in Roth, 1.5 million, two million dollars in Roth accounts, [MAKES NOISE]. That’d be a fun plan to put together. It’s never happened.
JOSH: Yeah, not so far.
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CAMERON: As long as, you know, they have that same expectation that this is after 59 and a half. ‘Cause that being the caveat with the Roth is it’s treated the same as the pretax IRA in that you don’t want to access that before age 59 and a half. Sometimes clients have the idea that, well I don’t want to have any non-qualified assets because I have to pay capital gains on that every year. But that bridge account can essentially bridge you between when you want to retire and when you can start taking income from those qualified sources, for many clients.
MIKE: Mm-hmm. Yeah. If you want to retire before 59 and a half, non-qualified assets is your bridge. Through and through.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:12:22]
MIKE: We’ve seen it. We tell people, if you’re gonna take assets from a qualified source, there’s a 10 percent penalty. Do you want to be taxed an extra 10 percent? No. So let’s avoid that. Oh, Josh I thought you were about to say something there. [LAUGH]
JOSH: I was just [LAUGH] gonna say, we talked a little bit about this last week, some of the tax strategies that we have as far as helping people to overcome some of these hurdles. I don’t want to backtrack too much to last week but it’s one of those things that there’s always a way to figure it out. And that’s something that we can help people with.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:12:55]
MIKE: Mm-hmm. And for the record, for all of you who are nearing retirement, you’re within five years of your target retirement date, I would implore you to come on in at no cost to you. We will run the numbers for you and say, “Okay, based on your qualified to qualified assets, here’s what you’re looking at. Here’s the earliest you can retire. You, I mean latest you, I guess you could retire never if you really wanted to. But we want to show you the earliest you could retire. How much you could draw, net of taxes and with the cost of living adjustment for as long as you live, and just a nice little checkup there at the very least. And we’ll talk more about the principles that govern proper retirement planning but we want to implement those principles.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:13:34]
MIKE: We want to make it possible so you can see, okay. In five years I can do this. Or whoa, I’m way far behind. Or my expectations are far from reality. Or my goodness, I was being way too conservative. What’s interesting is when people come in there’s two things that typically happen. One they can retire sooner than they thought because they were getting bad advice from a financial professional who was a good person but didn’t have the tools to be able to run these calculations. The second is they can take more income than they thought in retirement. It’s a, I mean it’s a no lose situation. It’s just a win, a great situation for you.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:14:14]
MIKE: I mean in fact, I want to extend the offer right now. If you are within five years of retirement or your expected retirement date and you want to see these numbers, give us a call. We will run them for you for free and then explain them to you and then strategize for you at no cost to you what it will take to get to where you want to go, 833-707-3030. Call right now, 833-707-3030 or go to Decker Retirement Planning dot com. And for this one, there’s two things you can do. The first one is you can, you click “Get Started” and you can click either “A full Decker review,” which is highly encouraged because it’s a, more of a holistic, let’s look at everything approach.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:14:54]
MIKE: Or you can just do the safer distribution plan which is gonna show you your map very detailed on what you’re looking at so you can see what reality is. Whether you retire today and we play pretend or you retire in two years, three years, four years, whatever it may be. The point is you can’t know unless you run the numbers. We wrote the algorithms because frankly I got tired of the industry doing smoke and mirrors, running pie charts and fun Monte Carlo simulations that did not properly vet the retiree’s risk or give them the transparency that they would deserve.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:15:36]
MIKE: It was basically fancy footwork of guessing. I hate that. I hate that. So I wrote the algorithms that power a safer distribution plan for that very purpose, 833-707-3030 at no cost to you. That’s 833-707-3030. Or go to Decker Retirement Planning dot com and you can click the button, “Get Started” on the very bottom of the page and we can get cracking away on this. At no cost to you. There’s nothing to lose but it could be the most valuable visit, call you have this week, this month, maybe even this, the rest of the year. Aside from family time, family time’s important.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:16:15]
MIKE: Next point here I alluded to that we need to cover is check your social security. Had a great conversation with someone just in passing. It’s really funny, [LAUGH] whenever I meet people at the grocery store or just at an amusement park even, just anywhere in passing in public and we just get talking. They say, “Well what do you do?” “Well I work in finance.” “Well what about…?” “I work in retirement planning.” The second someone realizes that they work in retirement planning they want to tell me how awesome their plan is. And I think it’s fun.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:16:51]
MIKE: I love hearing what they think is the best thing. The interesting part though is they want to tell me how to do my job based on their experience with not much financial background. And I don’t correct them. I’m not here to criticize anyone. But I had a dentist tell me recently, “Oh, well, based on my calculations here, blah, blah, blah. And I’m taking social security at 62 and blah, blah, blah.” And all sorts of things. I said, “Oh, that’s interesting. Well seems like you’ve thought it through. Thank you for sharing.” Even though I didn’t ask. But the interesting part is one of them recently said, “Well what do you think?” And I said, “Well,” ‘cause I don’t like giving unsolicited advice. I only want to talk to you if you want to talk to me.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:17:32]
MIKE: When he said, “Well what do you think?” I said, “Well that’s interesting. What’s more important, your income or your estate?” He says, “Well both.” I said, “Well that’s fine. But it’s a bit of a teeter totter. See with social security if you take your income too early your income is hurting because you’re taking social security at a lesser amount. It’s a discounted rate. But if you take your social security too late you’re hurting your estate. You’re gap strategizing, which means you’re pulling more assets from your estate to compensate for when social security then would start.” So I said, “Well which one, now they’re both important to you but which one would be more important?”
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:18:06]
MIKE: He says, “I want to leave more for my kids.” And I said, “Great, 62 to full retirement age would suggest to be the more appropriate time. However you’re already in your 60s so let’s look at the numbers and see what difference it would make.” See that’s a very, a much more, I don’t want to say therapeutic but holistic approach to addressing social security. Let’s run the numbers and see how it affects all aspects of your plan, not just your income. Most advisors don’t go to this depth though.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:18:42]
MIKE: So when it comes to social security it’s important to one, understand, this is a dumb question, but are you getting social security? That’s an easy one. But how much are you gonna get from social security at full retirement age? When do you want to retire? And what does that look like within your plan? Those are questions you want to talk about I mean by all means go to Decker Retirement Planning dot com. We have an ebook on there. Or you can talk to one of our financial professionals, one of our purebred fiduciaries at Decker Retirement Planning dot com. Just click the button, “Get Started” and tell us you want to talk about your social security. There are six figures that are typically saved with just optimizing your social security correctly.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:19:22]
MIKE: And I’ll tell you right now, I have yet to see a plan that was mathematically conducive to having it be 62 or 70 years old. Though those are the most common defaults that I have found in the financial profession. It’s like I’ve said before, extremes just are not worth it.
CAMERON: So why don’t more advisors go to that level of detail to help clients figure out when is the optimal time to take their social security, Mike?
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MIKE: That’s a fair question. I don’t think we’ve ever actually discussed that even internally. These are my findings. I have found that social security, when you pay a third party to run a report, it’s a value add to get people into their office so they can then sell you an income annuity. That’s what I have found. Most social security experts are not equipped to be financial advisors. And most financial advisors are not equipped to be social security experts. The training just is not there. They hire a third party. They know their words. And they can add value to your life. Which they do. I don’t want to discredit anyone for that.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:20:30]
MIKE: but social security is typically a value add to do you a quick, free service to get your attention and then talk about something that they want to talk about. I just don’t agree with that. If you already got social security taken care of, that’s fine. We don’t need to talk about it. If you’ve already filed and don’t want to change it, that’s fine. We don’t have to talk about it. I just want you to know, at the end of the day the bottom dollar of what the consequences are, for better or for worse, of your social security. We just approach it a little bit differently but that’s what I’ve noticed in the industry. And it’s easier to say, “Okay. If you think social security’s going away then take it right now at 62.”
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:21:07]
MIKE: Or “If you think social security is never gonna go away, maximize that lifetime income and wait ‘til 70.” It’s an easier conversation than saying, “Well, based on the calculations that we have right here, 68 and two months is the ideal time for you to maximize your income. I don’t know a single other financial professional who can dial it in like that. It doesn’t exist.
CAMERON: And to that point, you know, you mentioned if you already have filed, we have many clients who come over later, you know in their 60s, early 70s, and yes you’ve already filed. We can still work around that with your plan.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:21:44]
CAMERON: Obviously that one factor we can no longer adjust but there are many other variables which we can help to optimize your income.
MIKE: Oh, there are so many variables. I mean so one of the points here that we’re gonna talk about, and actually let’s just talk about it right now. Is figure in your other financial resources. If you’ve got a pension, wonderful. Let’s see what it looks like with the lump sum and let’s see what it looks like with the pension income. Compare the notes, it’s just math, but that pension analysis has saved people hundreds of thousands of dollars in their retirement and increase, [CLEARS THROAT] excuse me, increase their estate in such a way that when they pass their beneficiaries get significantly more money.
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MIKE: It’s all about what’s most important to you. If you would rather have an income stream, my grandma, my grandfather was a Boeing engineer and he took the pension because he, I mean he was a man, a great man of integrity. He turned down many different positions at Boeing. He didn’t want to be in management. He didn’t want to deal with people. He loved going in there and just being an engineer. He loved it. Lived for it. He was very risk averse. Did not want it. My grandma was the same way. I mean Depression era children, okay?
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:23:01]
MIKE: They chose a pension. Served them well. The pension paid for all of their needs throughout the rest of their life and the social security was just a little extra fun money. So all of their assets, they were really meant to just give to kids, give to grandkids, do vacations. It was just fun money. That was what was most important to them. And it worked. Now they both have passed since then but the beautiful part about it is we don’t care whichever way you go. We just want to make sure we can run the numbers so you can make the decision for yourself what’s best for you. And that’s what’s most important here. Other one’s here is being aware of your taxable investment accounts.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:23:40]
MIKE: If you’ve got an annuity, I know we’ve talked about income annuities and such. If you’ve already triggered the income rider, okay, we can incorporate that as an income stream. If you haven’t, there are options to be able to stop the rider, get rid of those fees and just utilize it in a different way. There’s a lot of options there that people aren’t typically aware of. If you’ve got life insurance, let’s talk about that. Long-term care, it’s a conundrum. If you can afford it you don’t need it. But if you need it you probably can’t afford it. There’s alternatives to long-term care or life insurance so you don’t have to be paying an insurance company a lot of money to get something that you may not even use.
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MIKE: But if you want it, as long as you’re aware of the expenses, we’re okay with that. We just want to look at it from a neutral standpoint because you know your situation best. Stock options from your employer, if you’re still working there, retirement income streams, we talked about pension, but there’s real estate investments that are there. There’s a number of different investments that you could have. We’ve seen people with royalties. It seems like we’ve seen it all throughout the years. But when it comes down to it, figure in your other financial resources, income streams, and how to organize it. This is the second principle of retirement planning.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:25:00]
MIKE: Diversify by purpose not just by risk. You need to understand not only what you have but how to work with what you have. Or else you may be left guessing. If you want to…
JOSH: Sorry. I just want to jump in really quick. You mentioned understanding the financial resources that you have. I think one thing that actually comes up quite often, we have clients that’ll come in and sit down and they’ll talk about their situation and then months later they’ll come back and say, “Oh, by the way, I found this other account that I didn’t know I had.” Which is always good. It’s always fun to find five dollars in your pocket.
MIKE: [LAUGH] Or 10,000 dollars…
JOSH: Yeah. [LAUGH]
MIKE: …or 20,000 dollars or…
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CAMERON: Thirty thousand in an old IRA.
JOSH: Right.
MIKE: There’s one client that seems to, finds another 10,000 dollars every month.
JOSH: Yeah. Yeah. And so it’s always good to know about that money ahead of time so you can make sure it’s in a good spot and it’s working the way you want it to work. You’re hiring that money for the right job. But just keep an eye on where your money is. It’s important as you’re getting closer to retirement to understand what your full situation is, your full picture of retirement.
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CAMERON: You know, and speaking to that, just being able to consolidate and organize your financial life as part of the annual review, and actually as part of the, you know, the process of coming over to become a client at Decker Retirement you get what’s called a Client Profile, which is a detailed list of all your accounts. And so that makes it extremely easy for both spouses, you know, sometimes one may be more financially savvy than the other. But you can look at this list of accounts, know where your funds are, what they’re doing.
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CAMERON: And if anyone were to pass, the accounts, the availability is right there. And, you know, both you have that and then obviously us at the company, we can help provide access to that for you. So it’s a really nice service a lot of clients like, is just being able to see, in addition to their distribution plan, where every one of those dollars is held.
MIKE: Now I want to point out here, we talked about diversification with different accounts. And thank you for that Cameron. Who remembers Bernie Madoff? I want to address the elephant in the room here. [LAUGH]
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JOSH: I think we all remember. [LAUGH]
MIKE: I was even thinking about, oh, I was watching Downton Abbey. My wife and I are on the sixth season before we watch the movie and it’s been so fun. But there’s a part where Robert says, “We should have had our money invested in a better account. I mean there’s this guy in Florida named so and so Ponzi and he’s got great returns.” And I’m going, oh dear. Now thank goodness the gentlemen from Downton Abbey, even though it’s fake, he didn’t invest in that. But Bernie Madoff as well. I mean these Ponzi schemes, these smoke and mirrors, these scams are out there. Self custody should be, in my opinion, illegal.
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MIKE: Just do not agree with it. It still can happen. It’s very important to point out that all of our clients at Decker Retirement Planning, we are not self custody. We clear through TD Ameritrade. And then for those who have insurance products that whatever annuity it’s, that they had when they came in or whatever, it’s at that insurance company. But it’s so important to diversify with different companies. I mean for goodness sake when the financial crisis happened, what would you have done if your assets, maybe they were with Lehman Brothers. What if that was you?
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:28:32]
MIKE: Diversifying your assets, not just by purpose, but by custodian is also extremely important and your financial professional needs to be able to see it but not have any access to it. That separation is critical because greed gets the best of people.
CAMERON: Yeah. Thanks so much for making that clarification. Yeah, at Decker Retirement we do not hold any funds, you know, custodial. We work with these other companies and everything is extremely transparent in that regard.
n RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:29:02]
MIKE: Yeah. Well and most people don’t. I mean there’s very few situations, but it seems like once or twice a year I get the news story or hear through the grapevine about this one person who’s peddling a product, self custody, blows up in their face, and they wind up in jail. It’s just ridiculous. Greed really destroys people through and through. But for what it’s worth [LAUGH] you know, when you hear things like structured notes or guaranteed returns of 10 percent or, we had a client that had a guaranteed return from some sort of situation in Mexico, they were getting four percent return every month allegedly.
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JOSH: Yeah. It was a [LAUGH] definitely an interesting situation.
MIKE: And then you say, “Well can you get your money out?” “I think so.” Oh. Let’s just be very open about not only where your assets are but what are they doing and how you can get them back. These risky investments are not worth it. We’ve had several clients in Utah that had investments in precious metals that they thought were just killing it. And then they found out, the SEC got involved and they lost a lot of money.
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MIKE: Now this is not with us, it’s before, I mean a couple hundred thousand that they lost right before they wanted to retire. They came to us. We fixed things together. But don’t get yourself caught in one of those situations. Gathering all your retirement info and understanding what it does and the liquidity behind it and where it is is critical. We map that out across the board with the safer distribution plan so you can see everything on one page. Great coordination. If you want to see an example of this you can go to Decker Retirement Planning dot com. Click “Get Started” on the bottom there and we can schedule the time to visit and run your own safer distribution plan.
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MIKE: Organize yourself. I know it’s not spring but it’s always good to clean, organize, get ready. And it’s not too difficult. If you want to do this before the holidays, by all means, won’t take us more than one or two visits to at least organize it so you can ski [PH], [LAUGH] see. Ski [LAUGH], you can see where my mind’s… Well you can see where your assets are headed. And that’s an incredible amount of transparency there, 833-707-3030. You can call now or go to Decker Retirement Planning dot com and click “Get started.” That’s 833-707-3030.
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MIKE: Let’s keep going down this checklist shall we gentlemen? Let’s talk about, determine how much you need to retire. This is the third principle of retirement planning. Use a distribution plan not a pie chart. In all my years of doing this I have yet to meet one person who can accurately depict retirement income from a pie chart. Has not happened yet.
CAMERON: A lot people claim they can though, right?
MIKE: They claim they can but it’s by guessing. And there’s so much volatility that it’s, well this could happen.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:32:06]
MIKE: Well a lot of things could happen. I mean for all we know NASA could be landing on Mars again with a real, or not again, but landing on Mars with a real person and not be telling us about it. That could happen. We could have another tornado in Salt Lake. That happened once. It could happen again. Monte Carlo doesn’t calculate black swan events. So when we talk about what could happen, and I hate dealing in hypotheticals in this situation, if you’re not following the principles of retirement planning you’re dealing in a pure guessing game. It’s retirement roulette. That’s all the pie chart offers plain and simple.
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MIKE: When you use a distribution plan you can calculate down to the month net of tax how much you can spend for as long as you live and you think, well Mike, what’s the difference between that and the pie chart? Well does a pie chart structure your income so it comes from principal guaranteed sources for the next five, 10, or 15 or 20 year? Not an income annuity that’s a lifetime guarantee. I mean sure that one gives you transparency. It’s locked in. There’s no flexibility. But it gives you some sort of transparency, self-made pension. But a pie chart, you’re up to the whims of the actual markets.
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MIKE: So if the markets do crash in December is your income gonna change? Because with my plan it doesn’t. It comes from principal guaranteed sources. You sail through the market turbulence. But with a pie chart, that belt can only tighten so much before there’s life changing events within yourself. If MIT is coming out saying, “Yeah, we’re expecting two to five percent returns” how’s that gonna affect your retirement? Do you have to take riskier and riskier and riskier investments? At what point do we hit rock bottom and make a change?
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:34:00]
MIKE: I hope that all those listening to my voice right now will at least consider what we’re offering, what we’re suggesting, what the research has suggested is a better alternative to financial planning for retirement, which is a safer distribution plan. A math based, principle based approach that can sail through the market turbulences unaffected. I’ll never forget in 2008, this is after the major crash happened, I was in the Washington office and a client had come from Oregon, just south of Portland.
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MIKE: Drove all the way up and was knocking on the window. We were, Brian actually was in a meeting at the moment, but knocking on the window, had to come in and say thank you. He was a real estate investor that came over and built his portfolio as we were suggesting, as the research suggests, principal guaranteed sources for 10 to 20 years or so. Risk as appropriate but we use absolute return models, or two-sided models that are built to make money in up or down markets. Had he not made the change, his life would have been devastated. He would have had to sell one or two of his homes. And he had a good portfolio.
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MIKE: Even to the point where he may have had to move in with his kids. Complete life alternation. Instead he sailed through it and didn’t have to change his travel plans. When we talk about financial planning, it’s not just numbers. The numbers are what’s suggesting how you can preserve your lifestyle and your expectations for the rest of your life. That’s why we’re math based, principle based. That’s why we developed these algorithms years ago. That’s why we’re in the business. Is to make sure that you can spend time where it’s most important.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:36:00]
MIKE: Now I’m a family man so I’m suggesting if you can spend time with your grandkids and enlighten them and support them and love them, that’s a wonderful thing. But if you’re also enjoying yourself after years and years of work, that’s also a wonderful thing. It’s okay to enjoy life to the fullest that you can do. But when it comes down to it guessing is not a plan. And the pie chart can only offer you guessing. Call us right now if you want to take us up on this offer.
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MIKE: If you’re 55 or older, or within five years of your expected retirement date and you’ve got 300,000 or more that you’d like us to quantify for you with a math based, principle based approach, won’t cost you a dime. Normally it’s 2,000 dollars to do all the work here. We won’t charge you a dime. We will set it all up for you and show you the first draft at no cost to you. Call 833-707-3030. That’s 833-707-3030. Or you can go to Decker Retirement Planning dot com. On the very bottom you can click “Get Started” and you can let us know what in particular you want to talk about.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:37:13]
MIKE: A full Decker review is the 2,000 dollar offer at no cost to you right now. Or you can do a lesser one and just hone in on just a safer distribution plan. Just a safer tax plan, whatever it may be. But this is your lifestyle. And we want to help you protect it. Let’s continue on the checklist shall we? I mean we’ve had some fun so far. We’ve talked about social security, your 401k’s, we’ve talked about investing your assets and knowing not only what you have but how to work with what you have.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:37:45]
MIKE: We just talked about using a distribution plan in retirement. Now I want to talk a little bit more about that but really the big part is determine how much you’ll need to retire. It’s not less than you’re currently earning. It’s probably a little bit more. And we want to make sure that you can, like Captain Jack Sparrow, ease into that dock and then you step off at the perfect moment. That’s what we’re here to help you with. Cameron…
CAMERON: Great reference. [LAUGH]
MIKE: Yeah. Isn’t that great? Cameron and Josh, you guys work, I mean Josh with new business and putting together the plan, the distribution plan.
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MIKE: Can you talk a little bit about the clients and the power it has when they see it all mapped out as they’re putting together, as the light bulb clicks on? Just kind of talk about that experience. And Cameron, just so you know, afterwards I’m gonna be asking you, as they maintain the plan, the integrity that it lends their retirement and the stability that they can have. Josh?
JOSH: It really makes a big difference for people being able to sit down and see per month how much they can expect in retirement. And, of course, Cameron’s team adjusts it year by year to make sure it’s accurate.
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JOSH: But when somebody sits down coming from working for the last 30, 40 years and now they’re ready to actually step into retirement where they’re gonna change their entire life, it’s incredible to be able to say, “Okay, I know exactly where all my money’s gonna come from. I know exactly where my income’s coming from.” Especially those that are coming from a situation where they didn’t know very much about finance ahead of time. They maybe were experts in their field, whatever that may be. But sitting down they, a lot of times, admittedly can’t make heads or tails of what to do with a lot of their accounts.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:39:31]
JOSH: And it’s nice for them to be able to sit down and say, “Okay. This makes sense. I can understand this. I know exactly what’s gonna happen.” I mean we don’t have a crystal ball but they can see that their income over the next 10, 15, 20 years is coming from principal guaranteed sources. And they know, I’m gonna be alright.
MIKE: This December doesn’t scare them.
JOSH: Right. This December’s gonna come and go and our clients are gonna be just fine.
MIKE: Mm-hmm.
CAMERON: You know, it, what’s interesting, like you mentioned at the beginning of the show, Mike, a lot of clients are a couple of years out from retirement actually pulling the trigger on quitting that job or be getting income from assets.
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CAMERON: And it’s so cool, I think there’s many that even if they’ve seen the plan function for a couple of years there’s still this holding their breath up until the point they actually retire. And they hold that breath through the first month of distributions when, you know, when they see the income actually come in from those principal guaranteed sources. You know, logically everything’s been laid out. They’ve understood it. But I think there’s this big sigh of relief that’s so fun. You know, both in email and over the phone you can just see clients visibly relax.
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CAMERON: Okay. Things are working. Things are on plan. And year by year, you know, and despite what the market does, you know, that income from principal guaranteed sources continues to come in. And year by year they get more familiar with our processes and it’s more of a hey, let’s have a nice check in and then I’m gonna go on a cruise for two months. Or hey, this sounds great. I’m actually, you know, I’m going to see the grandkids for three months. Because they know they don’t really need to do anything. You know, we’re helping them as far as, you know, getting the income. They know it’s gonna come in.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:41:23]
CAMERON: They know, you know, the principles of the plan are sound. And it’s almost this sigh of relief like okay. Now I can enjoy my retirement. And that’s such a cool process to be a part of on my team.
MIKE: Yeah. Supporting you how you want to be supported. It’s a beautiful thing. Now that, you talked a little bit about the, just making sure the checks come every month. That they have the income they need. When we talk about retirement withdrawal strategies there’s essentially three or four that I can think of. When we talk about the general strategies that are happening, the first one is the most popular which is the four percent rule.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:42:02]
MIKE: And it suggests that over the last 100 years the markets have gone up around eight percent or so on average each year, which is technically true. But how many of you are gonna live 100 years old in retirement? Okay? Now how many of you are gonna experience a 100 year retirement? Very different. Very, very different metrics. The second part is that bonds have averaged according to this theory, about four percent or so over the last 30 years. Starting to get around three and some, and change here but roughly speaking, okay.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:42:42]
MIKE: If it’s three percent then you can draw three percent from your portfolio. The problem with this scenario is it negates the 18 year market cycle. And that suggests that the markets are flat and then up, then flat, then up. We want to be mindful of that. The second part is, with quantitative easing, and with the interest rates seeming to be on their own agenda, not agenda like politically speaking, their own agenda in the fact that they’re not necessarily tied to the same monetary policy or suggestion that we did years ago.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:43:19]
MIKE: It’s changed the environment. If the next 10 years we only yield in the markets let’s say three to five percent, not accounting for inflation, is that something you can handle? It doesn’t grow your portfolio. There’s no cost of living adjustment. And when the markets go down, which they do every seven to eight years historically speaking, you’re taking very expensive income. Are you okay with this risk? The other extreme, well Cameron, you want to go ahead?
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CAMERON: You know, I think the biggest breakdown with the four percent rule, and any percent designation, is it assumes that the client will be alright taking much less as income from assets when the market does go down. It’s easy to say. It’s a lot harder to do. And I think that’s where this rule really falls apart for me is this sounds great in an up year or even a series of up years. But you have that tough market correction and say, “Hey, you don’t mind taking 40 percent less income for the next five years while your portfolio recovers, right?” I mean that is a tough pill for anyone to swallow.
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JOSH: The nice thing there with the four percent rule is it’s 100 percent liquid. And so if somebody is in that boat, already retired, expecting to live off the four percent rule, we can help ‘em figure out what to do next as they anticipate something changing in the environment.
CAMERON: Yeah. That’s exactly right. Thanks, Josh.
MIKE: Mm-hmm. Now the other extreme is the income annuity play. I can’t handle market, too much risk, and it’s a play to say, “Okay. Let’s just see what my income is and that’s it. I can live with that.” There’s no flexibility in that play. Your average return, according to the research we have done, is around 1.8 to two percent a year, which is dismal.
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MIKE: I guess not that dismal if the market’s only doing three and five percent, but I mean there’s principal guaranteed sources out there getting seven and such percent a year, principal guaranteed. Most people don’t know they exist though because most financial professionals are not compensated to tell you about it. That’s why we have our internal [quons?] to do this kind of research. And it’s not even risky. It’s not like they’re high yield bonds or something absurd like that. It’s…
CAMERON: It’s not a company in another country. [LAUGH] It’s companies that are 100 years old here that are, have been around. They know what’s going on.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:45:50]
MIKE: Well it’s several companies. But the reason why we can’t say ‘em over the air is for compliance purposes. They don’t like it when we name those specifics because there’s different States and different regulations in each State and suitability must be done before we can make a suggestion. But we do offer free, complimentary visits to get to know us and we’re happy to show you all the data and the names and everything. We’ve got nothing to hide. We just also have to obey compliance. And we’re happy to do so. But when it comes to withdrawal strategies, those are the two extremes. And then you’ve got other ones like dividend portfolio strategy.
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MIKE: But with the interest rates being where they are, it’s very hard to compete in today’s market with a successful dividend based strategy. And then you’ve got a safer retirement, significant upside, very little downside, mapped out down to the month, net of tax with a cost of living adjustment. Just objectively speaking when you put ‘em all to the side, I have a hard time understanding, unless you have pensions that set up your whole life and you’re good to go that you can take that risk. And in that situation that’s fine. I don’t mind that.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:47:07]
MIKE: Most people don’t have that luxury. But I don’t believe they’re being properly educated on the risk that they’re actually taking. Which is why we offer that free introductory visit to talk with a purebred fiduciary. One who can say things as they are neutrally. If you want to take us up on that visit actually it’s been awhile. Call us, 833-707-3030 or go to Decker Retirement Planning dot com and click on the button “Get Started.” We’d love to have a conversation with you about what’s most important to you. That’s 833-707-3030. And the last part of this is stress test your plan.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:47:47]
MIKE: This is an interesting one. Stress test your plan I would suggest with a fiduciary. You’re not gonna go to a physics professor and say, “Hey, let’s stress test my physical health.” No. You’re gonna go to a medical professional for that. You’re not gonna go to, I mean there’s a number of analogies we can throw there but you want to make sure you’re working with the right person who has your best interest at heart.
JOSH: Can I ask, when you say “stress test” can we get a little bit more specific there? What does that mean to stress test your distribution plan?
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:48:23]
MIKE: Sure. So when I mean stress test, I mean let’s line up all of the risks that a retiree could face. There’s spousal risk, there’s interest rate risk, there’s sequence of return risk, there’s, I mean the list goes on, all the different risks. And then we historically look at what has happened in the past, and how your plan would handle in that environment. If you stress test it you can see, okay, here’s worst case scenario. So you can plan for the best or yeah. Hope for the best but plan for the worst.
JOSH: I think you have that backwards. Plan for the worst and hope for the best. [LAUGH]
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MIKE: Hope for the best, yeah. Thank you. But when all is said and done, to objectively look at what your plan does in the different environments is how you stress test it. Now here’s the issue I have in the industry. And we’re caught the same with this. Any free, complimentary visit is not biased. Actually let me say that again. It’s biased. Every free visit is biased because they want you to work with them. Every single one. Come in for a free social security review. It’s fine.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:49:34]
MIKE: But this review is gonna say you need to work with us in these situations. Free tax minimization review, well here’s the issues, here, here, here. You need to work with us now. It’s all biased. We’re somewhat biased. The only reason why I’m okay endorsing us as fiduciaries to have a free review with us that isn’t biased is plain and simple. We’re licensed and can offer you anything that is best for you. We don’t have those restrictions.
JOSH: We’re legally obligated to do what’s in the client’s best interest as well.
MIKE: Yeah. We painted ourselves into that corner.
JOSH: Intentionally.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:50:11]
MIKE: Yeah. [LAUGH] When it comes down to our introductory visit, we do want to talk about as the markets are today. As they currently exist, as the research suggests. Get to know what your retirement looks like and then say, “Okay, based on your answers, here’s a bunch of different options here.” We explain the features, we explain the detriments. And then you can decide. If the best investment is a mutual fund at Vanguard, we don’t clear through Vanguard but we’ll say, “Okay, well according to what you’re looking for,” and we pay for the database at Morning Star, “Here’s a Vanguard mutual fund that may fit your needs. Here’s how you open an account. Thank you.”
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CAMERON: In other words, we recognize that not all clients are a fit and we only want to work with clients that are. You know, it goes both ways, right Mike?
MIKE: Mm-hmm. Well you never, at least we never, want to work with a client that’s not a fit for us because operationally it’s a huge burden on the company to try and do all these extra, outside the ordinary situations. And we’re comfortable saying that. We can take anyone in that introductory visit and have an open conversation, if it’s not a fit, point them in the right direction. And if it is a fit, we can proceed. We are comfortable with that because it doesn’t make sense to put a square peg in a round hole.
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MIKE: And that’s, and it’s hard to not have that conversation when you’re a math based, principle based firm. If we, if you come in and we show you the numbers and say, “This is how much you can have” and you say, “No. Someone else, so and so said it’s, I can receive double that.” I’ve never actually had that situation but I’m just being hyperbolic here. We’re gonna say, “Okay. It sounds like you should work with that person.” We’re not here to get all the business in the world. We want to work with people who appreciate a math based, principle based approach and who want to have stability in retirement.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:52:06]
MIKE: If you’re very, very risk, if you like risk, we may not be a fit for you. I would also suggest are you aware of what the risk is actually in retirement? You can do that kind of situation, you can invest in that manner when you’re in your 20s, 30s, or 40s. But when it comes to retirement, it’s just a different game. And we’re okay with that. And that introductory visit is not only for you to get to know us, but for us to get to know you. And at the end of it, should we both want to proceed, sounds great. We can do so.
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MIKE: If not, every person that walks through though our office they do gain information that they probably didn’t have beforehand. And we’re proud of that. We want to at least educate people as evenly as possible. Gosh, we’re running out of time here. The bottom line is a safer retirement is a math based, principle based approach that allows you to have stability in retirement to maximize your upside while protecting your downside, while having some risk in the account but having it appropriately mapped out so you don’t have to touch it for 20 years. We spend a lot of money and time and research to give you two-sided models that can, are designed to make money in up or down markets.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:53:18]
MIKE: In 2008 these models collectively made money. How many people can say that? How many people can draw their income from principal guaranteed sources, not setting up an income annuity for life but just, okay, this is gonna pay income from year six to 10. And this will pay income from year 11 to 15. How many people can say that? It’s truly unique. It’s something that’s been remarkable. The typical reaction is, “I knew something was wrong.” And actually one recently this week we had is, “I’m so grateful I found you. It was by an accident. I just chose your mailer out of someone else’s from this week’s dinner seminars and I was pleasantly surprised.”
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:54:00]
MIKE: “I wonder had I not chosen that what would have happened in our retirement.” We’d love to chat with you. Safer retirement ready listener call us at 833-707-3030. We’d love to set up a visit with you whether it’s on the phone or in person at one of our offices in Washington, Utah, or California. You can also go to Decker Retirement Planning dot com to continue to learn more or you can continue to, or you can sign up, get started right there. But the bottom line is, let’s build a plan that you can enjoy with a safer retirement. We’re running out of money here. I want to just finish up with this bleeding heart conversation.
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CAMERON: Running out of time there.
MIKE: Yeah. Bleeding heart. Cameron, you had this situation right here. It feels almost like we’re somewhat family counselors as well with our clients. Bleeding heart situation just as, ‘cause we promised we’d talk about this today, a bleeding heart situation is when one of your children keeps asking for money or for help and it slowly dwindles your retirement to where now you’re not able to get the income that you need to support yourself. You love your kids. You want to help them as best as possible but to use the airplane analogy, when the masks come down you put your mask on first.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:55:18]
MIKE: And then you put on other people’s masks around you. If you want to be able to give to your kids, that’s great. Setting it up in such a way to do that and not affect your retirement income is more appropriate than a little bit here, a little bit there. Because a little bit goes a long way and especially in retirement. Cameron do you want to talk about, I know you had a specific situation with one of our clients that kind of just went through this.
CAMERON: You know, and the first thing to preface is is obviously this is all your money. You know, we’re not going to hold funds captive.
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CAMERON: I think the best approach we can have is as your fiduciary team is to be able to show you, hey, if you give away all this money now early in your retirement, these are the downstream implications it could have. And for this particular client he was able to course correct by saying, “Oh, you know, these seemed like one offs. They’re coming up more and more. I need to be able to set some healthy boundaries with my kids and be able to preserve my own retirement.” So it was a happy ending for this client for sure.
MIKE: Yeah. And without calculating the numbers, the ramifications just can’t happen. You just can’t know. So we want to make sure everyone’s aware of that.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:56:31]
MIKE: Folks we’re running out of time here so thank you so much for tuning in. We’ll be here same time, same place next week as it’s a nationally syndicated show. But also you can tune in via podcast every Friday morning at 10 a.m. mountain standard time. We release this show early so you can listen to it at your convenience. But we also make the transcripts available on our website at Decker Retirement Planning dot com. If you’ve heard something you like, you want to talk more, we are purebred fiduciaries, one of the 1.6 percent that Tony Robbins refers to as fiduciaries who actually have your back. We fall into that category and we’d love to have an open conversation with you.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:57:08]
MIKE: Just go to Decker Retirement Planning dot com and at the bottom click “Get Started” so we can then reach out and schedule that visit with you and have an open conversation so you can build a safer retirement. Josh, Cameron, thanks for joining me on the show today.
JOSH: Thanks, Mike.
CAMERON: Thanks, it’s been great.
MIKE: We’ll be here, same time, same place next week. Couple of events in Utah, I’m gonna highlight one in particular. We’ve got a safer tax retirement, a special class at the University of Utah. You can go to Decker Retirement Planning dot com and click on “Safer Retirement Education” to click on the event and RSVP for that. This event we’re sharing our proprietary information on how to minimize your taxes in such a way that some retirees have been able to take all their income as gross.
RR S3 E21 REVIEWING RETIREMENT CHECK LIST [00:57:49]
MIKE: Tune in and RSVP there. And that’s all we’ve got. Thank you for listening. We do appreciate you on the show. And if nothing else just make sure you get the transparency that you deserve.
