RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:00:01]
ANNOUNCER: You 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 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:00:37]
MIKE: Happy holidays, everyone, from Safer Retirement Radio. This is Mike Decker, your host, and I’ve got half my crew. I’ve got Cameron Archibald today from our in force side of the business. Cameron, thanks for joining me on the show today.
CAMERON: Oh, great to be back, Mike.
MIKE: And I’ve also got Clayton Bradshaw. He’s been on the show before. It’s been a while. He’s in here subbing for Josh, who’s out on vacation. Clayton, thank you for joining us.
CLAYTON: Mike, thanks for having me on today.
MIKE: Quick background for Clayton. He’s one of our purebred fiduciary financial planners that has been with us for some time now. He comes from a family of homebuilders, yet he’s a retirement planner. So I’ve always called him the retirement builder because he takes almost… I mean, you’ve taken hundreds of different cases from scratch and built up retirement plans.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:01:21]
MIKE: I mean, Clayton, tell me a little bit about your background here and what you’ve been doing in the Utah area in building proper retirement plans.
CLAYTON: So in building the plans, Mike, I guess let me start with my background and growing up. Growing up, growing up around homebuilders, my great-grandfather, grandfather, my father are all homebuilders. And putting people’s plans together, I equate it the same way. With a home, you start with the foundation, then you put the walls on, then you put the roof on. And the plan’s a little the same way. You’ve got to start with the foundation. You’ve got to put the walls and the roof on it.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:01:55]
CLAYTON: But then you’ve got to maintain it as well. So there’s a lot that goes into building the plans, and it’s been a lot of fun to do, and very rewarding to help folks build their plans.
MIKE: And what’s funny is you say maintain it. Cameron’s department, their sole focus is maintaining the plans every step of the way. You can set up a beautiful plan, but if you can’t maintain it, it’s like a perfect car without an oil change. At some point, there’s gonna be some issues. There’s gonna be some issues. So thank you, Clayton, for joining us on the show today. As always, the number to remember is 833-707-3030.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:02:33]
MIKE: If you hear something that you like, if you hear something that says, you know, I want to further my research, my conversation on this topic, you can call us, 833-707-3030. Schedule a visit. We are available five days a week, even in the holiday season. Now, sure, we’re closed Christmas Eve, Christmas Day, New Year’s Eve, New Year’s Day, but besides that, we’re available and we’d love to help you build the right retirement plan.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:03:03]
MIKE: Now, in the holiday spirit, and even with the markets, the markets are getting hammered right now. It’s kind of rough out there. I don’t want to talk about that. I mean, I love to talk about that, but it’s just so negative. Let’s have some fun today, and one of my favorite, it’s a bittersweet song in the holidays, is the 12 Days of Christmas. It’s my favorite because it’s so easy to make fun of, yet it’s so fun at the same time to sing along. Everyone knows the words. I should say that are Christian. But anyway, it’s a [fabulous?] song, and I thought it’d be fun today if we did the 12 Days of Retirement, all in one show.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:03:38]
MIKE: Now, admit that these are a little punny. Be warned. But we wanted to illustrate the content of a wonderful, holistic, whole, complete, beautiful retirement plan in one show today. We’re not gonna be able to cover all 12 topics in depth today, but you can always go to DeckerRetirementPlanning.com, check us out, check out the articles, the research, all that we presented. A number of books. We just released a safer… I wrote three books for our three most common clients that we’re seeing in the door.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:04:13]
MIKE: Safer Retirement for the Engineer. Boeing, we have a lot of engineers that come from Boeing. And they’re great. They’re mathematically-based individuals, who are very logical and love to see the numbers and the research. So I wrote a book for just the engineer. Now, I also wrote another book, A Safer Retirement for the Business Professional. Someone who’s spent their career in meetings, managing projects, working with people, just keeping things going. It’s a fun book, written for you, for your specific situation and your transition from the business professional lifestyle to the retirement lifestyle.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:04:53]
MIKE: And the third one I did was for the hardworking American, the wonderful people that have built this country. From construction to maintenance, from the auto industry to manufacturing. The people who get their hands dirty and have built this country to what it is today. The industrious people, the hardworking American. This is a safer retirement for you. I wrote you that book as well. They’re available on our website December 15th. On that day as well, I’ve got some other books that are being published; A Safer Retirement for the Medical Professional, A Safer Retirement for the Attorney.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:05:28]
MIKE: Remember that old book, do you guys remember this one? A Chicken Noodle Soup for the Soul. I’ll admit, I kind of took that concept and I wanted to write a book for specific people, because I wanted them to be understood. Retirement is very technical. It’s very unique, and I thought it would be a fun thing. It’s taken me all year to write these books, but I did it, and they will all be published and available on our website, DeckerRetirementPlanning.com, on December 15th, for free. I hope you enjoy them.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:06:01]
MIKE: Now, shall we get started? The 12 Days of Retirement. The first one, number one, a distribution plan. You only need one. But everyone here listening to my voice, I hope you can understand the importance of a distribution plan. Now, this is the third principle of retirement planning; use a distribution plan, not the pie chart guesser. Clayton, can you walk me through real quick. You’ve had a lot of experience here of people that have come in the door using the pie chart guesser. Their anxiety seems to be high because they’re guessing through retirement, but yet at the same time, when they see a distribution plan, it’s almost like the anxiety just melts away.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:06:43]
MIKE: Can you walk me through that experience that you’ve had so many times?
CLAYTON: Sure. So for folks that are still working, you’ve got all your money in your 401(k) and in your pie chart and you’re accumulating your money. But when it comes time to retire, I had folks walk in and they said, “All right, I’m ready to retire. Or I think I’m ready to retire. I don’t know.” That was their response. And…
MIKE: Because that’s the way they’ve been taught. This is just how you do it. They’ve been taught the convenience of the banker/broker asset allocation accumulation model. It’s a great retention strategy. [LAUGH]
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:07:16]
CLAYTON: Right, right. So they’d come in and they’d sit down in front of me and they’d say, “All right, let’s do this. Let’s retire.” And I’d say, “All right, what’s your plan?” “I don’t know.” So using the distribution plan, we’d put everything together and then they can see using that safer distribution plan what their income looks like and how it’s going to get them from retirement through the rest of their life, and that is the purpose. And then it gives them that clarity. It gives them the answers that they’re looking for.
MIKE: Yeah. I would say the biggest questions that can be answered through a distribution plan are can I retire, and if so, how much can I draw for as long as I live?
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:07:53]
MIKE: Now, the interesting part is, Clayton, you help put the plans together, but if we’re being honest, the guy who maintains these plans is Cameron. Cameron and his department have been maintaining these distribution plans for our clients. And life happens. I mean, Cameron, off the top of your head, what are some of the crazy things that have happened to some of our clients this year that could not be predicted?
CAMERON: Yeah, great question. Loss of a job. You know, often we had projected that they were gonna work five more years, and they said, “My company just laid me off. We need to redo the plan and see what that might look like if I can’t get a job quickly, if I needed to retire today.”
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:08:31]
CAMERON: Others is unforeseen medical illness, large hospital bills. Hey, I need to draw on some of my assets earlier than I thought. You know, another one that happens fairly frequently is moves with real estate. Deciding, hey, we decided to sell this, you know, second property we had. Now we want to invest it. What does that look like? Or, you know, so many different scenarios, and if you don’t have flexibility built in, it’s kind of like, well, we’re working off assumptions that are now two or three years old, or five or 10 years old. My situation now is totally changed.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:09:09]
CAMERON: If we don’t have the ability to adjust those, then it becomes very difficult for the clients to see that bigger picture like they did when they started.
MIKE: Flexibility. Got to have a plan, but plans can change. The beautiful part is the distribution plan is not an all-in, no flexible situation, like an income annuity would be. It is a plan that has the flexibility to alter as things go. But you still have a clear sight of what to expect.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:09:40]
MIKE: The beautiful thing with a safer distribution plan, and you can read more about this, we’ve got to keep going, but number one, a distribution plan, or dare I say a safer distribution plan… And one last thing too is we didn’t invent distribution planning. It’s been around for some time. The bucket system. The most popular author of the bucket system has it to where there’s three different buckets and they’re interchanging. No, no, no. That’s not what we’re suggesting here. I personally believe that’s a dangerous way of still basically having three pie charts that you’re juggling between itself, which is essentially the same thing as a pie chart guesser.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:10:15]
CLAYTON: It sounds super complicated, right?
MIKE: It’s kind of silly, in my opinion. But a safer distribution plan is a math-based, principle-based approach that gives you incredible transparency, and that’s number one on our 12 Days of Retirement. Number two, a little punny, but two sided risk models. The industry term is called an absolute return model. That’s hard to understand because if you’re not in the industry, that means nothing to you, so let me explain basically what an absolute return model, or what we call a two sided risk model would be.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:10:53]
MIKE: A two sided model, and Clayton and Cameron, chime in as you feel necessary. But it’s designed to make money or keep up with the S and P in the up years, while helping protect your assets in the down years. Simple enough, right? Well, if it’s so easy, why isn’t everyone doing it? Well, let me explain kind of how it works, okay? I’ll use a 200 day moving average as a simple metric here that most people tend to get pretty quickly, and if you don’t get this, it’s okay. You’re not dumb. These are complicated metrics that we’re talking about.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:11:26]
MIKE: But the 200 day moving average takes the average stock price of the last 200 days and then determines if today’s price is above that average or below that average. If it’s above the average by most financial professionals, that would be considered an uptrend. If it’s below that average, it’s in downtrend. Plain and simple. This is one of the many metrics that are there. Clayton, you had an analogy you once told me that I thought was brilliant about the ocean and the waves and how these models are trying to find the right trends and get rid of the noise. Can you walk me through that?
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:12:00]
CLAYTON: Yeah, absolutely. I’m sure that most of you have been to the beach. You understand how the tide works. So the tide comes in, there’s a shift, and the tide goes out. Now, with the markets, the markets do the same thing. The markets go up, there’s a shift, and the markets go down. Now, these models are designed to follow that trend or that tide of the market, ’cause we all know whether the tide’s coming in or whether the tide’s going out, there are waves. Those waves are crashing in. Maybe they’re big, maybe they’re small. That’s the daily noise of the market.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:12:33]
CLAYTON: The market has little fluctuations. You can look at the last week in the market for proof of that. But it goes up, it goes down a little bit, but that’s not the overall trend of the market. So what these models, these two sided models are doing is they are focusing on that overall tide or that overall trend of the market. So when the tide’s coming in, when the market’s going up, those models want you participating in that. They’re helping you participate in that. When the market or the tide is going down or going out, that’s when these models are gonna change their position to allow you to capitalize or protect on that decrease in the market.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:13:10]
MIKE: Now, these two sided models are typically the most popular or the highest topic of interest when? When the buy and hold strategy fails you. Now, typically the markets will crash every seven to eight years. That’s historic. 2008, the markets crashed. 2000, 2001, 2002, the markets were in a terrible three year recession. That’s a long, drawn out crash. That’s just painful. Three years of it going down. But it happened.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:13:40]
MIKE: And it keeps going back. I mean, Clayton, you know the data back to I think ’60, ’60 or so, 1960s. It just keeps going. Now, here’s my personal opinion. 2015 was a flash crash that was somewhat avoided from its real tragedy because of quantitative easing. Here’s a problem, though. We can’t keep doing that. We can’t keep printing money and keeping our interest rates low. At some point, one has to give, which is why there’s a lot of doomsday situations, a lot of doomsday articles out there about oh, the markets are gonna tank and blah, blah, blah, political agenda, political claim here if so and so gets elected, this will happen. If so and so gets elected, this will happen.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:14:21]
MIKE: Who cares? When I say who cares, retirement is not meant to be spent worrying about the noise that’s out there. The noise will never go away. There’s always going to be something to complain about. Retirement I don’t believe is meant to be spent that way. Two sided models allows you to cut through the noise, and if the market’s going up, like the 10 year bull market we’ve had, great. You can participate with it. But you have the indicators that will help you tell or help you sell, or for our clients, we do it for them, when the time suggests that it’s time to sell.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:15:00]
MIKE: We’re not timing the market here. It just says we’re entering into a down trend. It’s time to get out. It’s a beautiful thing to be able to say in 2008 our managers collectively made money. How many people can say that? If you want to learn more about this one in particular, the two sided models, especially with the tough December that we seem to be having, call us at 833-707-3030, or go to DeckerRetirementPlanning.com. And on there you can research, let’s see, we’ve got a number of different articles on two sided models.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:15:38]
MIKE: You can click get started with a review, or you can go into our services here and learn about safer investment options. We talk about the two sided models under that article. All we want to do is give you the transparency. What was that? There was that book that was written a number of years ago What Works on Wall Street. Clayton, you have it in your office.
CLAYTON: Yeah, I do, Mike.
MIKE: I believe that was the biggest study ever done on Wall Street with the investment strategies. Do you remember, this is a leading question, so I apologize, Safer Retirement Radio listeners, but I don’t want to keep talking the whole time. I want to enjoy my panel’s commentary as well.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:16:17]
MIKE: Do you remember the top investment strategies in that book?
CLAYTON: Yeah. So the book was written by I believe James P. O’Shaughnessy, and he detailed, it is probably the most extensive effectively research paper on what the best models out there are, and it was momentum models, or what we call two sided models.
MIKE: Yale, one of the founders of how two sided models work, they’re leaving buy and hold more and more at moving their portfolio of the Yale, I think it’s the pension fund, to absolute return models.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:17:01]
MIKE: These two sided models. Why? Because it just works. It’s a beautiful thing. If you want to see who our managers are, we’ll tell you their names, we’ll show you their third party verified historicals, and when all is said and done, it’s up to you at that point if you want to use them or not. We’re okay either way. We just know historically and from experience that buy and hold may be a bit more risky for retirees than they realize. Unless all of their assets and income are covered and they’re buy and holding for their inheritance… not their inheritance, but to give inheritance to their beneficiaries, their legacy, that’s fine.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:17:43]
MIKE: But if you need your income, retirees can’t afford taking a 40 or 50 percent hit. 40 percent drop in the market, based on the average performance of Morningstar mutual funds takes six years to recover, just to break even. That’s not a break that you can take.
CLAYTON: And that’s assuming you weren’t drawing income throughout that whole time, as if you didn’t need income in retirement those six years.
MIKE: That’s correct. Is it worth the risk? Learn more about two sided models at DeckerRetirementPlanning.com, or call us, 833-707-3030 and schedule a no cost visit to continue your research. We’d be happy to sit down with you. 833-707-3030. Must be 55 years or older and have at least 300,000 of assets saved up for retirement.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:18:29]
MIKE: We’re gonna keep going here, though. We’ve got so much to cover. Number one was distribution plan. Have a plan. Not an accumulation plan, but a distribution plan. Not the pie chart guesser, but a safer distribution plan. Number two, two sided models. Designed to make money in up years, designed to help protect your assets in the down years. Number three, this is great, investment motives. Okay? And I’m [not?] gonna call this the investment triangle, but what’s the purpose of each investment you have?
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:19:04]
MIKE: Now, this is a conundrum here and this is actually the second principle of retirement planning, which is diversify by purpose, not just by risk, okay? Imagine with me you’ve got a triangle and you’ve got at the very top growth. On the right you’ve got principal protection. And then on the left you’ve got liquidity, okay? Those are the traits that make up every investment that you could have as an option. Here’s the conundrum. You can only pick two.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:19:42]
MIKE: What I have seen in my career in finance is that most practices seem to revolve their entire practice around just two of them. For example, growth and liquidity is typically the asset allocation pie chart. It’s all at risk. We try and diversify ourselves through the storms and maximize on the growth, but you can pull out whenever you want. You’ve got that safety net. Well, greed keeps you in the market longer than you should, and fear keeps you out of the market longer than you should. It’s almost like if you were solely in that situation, your emotions will compromise your best judgment.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:20:17]
MIKE: As logical as you think you are, it happens like clockwork, especially every seven to eight years. So does it make sense to have all of your assets without any principal protection, but all at risk? Because it’s liquid, you can pull it out whenever you want, but it’s all at risk? No. These are typically [AUM place?] They want to keep you for life, and that’s fine. Just they keep maintaining your portfolio with value investing or whatever it may be. Does it make sense to be 100 percent this way in retirement? No, it does not. It falls against the first principle of retirement planning, which is never draw income from a fluctuating account or the principal states. Draw income from principal guaranteed sources.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:20:56]
MIKE: But here’s the other conundrum. A growth account with principal protection has a lack of liquidity. We see this as the other spectrum. Some people are so scared of the market that they sign up for the income annuity play. And what’s so devastating is when you buy an income annuity and then you turn on that income rider, you’re set for life. And I think, according to our research and what we’ve observed, the average income annuity is giving the retiree 1.8 percent return on investments.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:21:28]
MIKE: We had a client in San Francisco who just we did an income annuity intake, and Clayton, you’ve done a number of these. They were furious when they found out that their bonus only counts if they do an income rider. It’s like saying I’m saving money by spending money. No, you’re not. You save 100 percent of your money if you don’t buy that thing that you don’t need. Clayton, you’ve sat with clients doing this a number of times. What’s the experience you typically see?
CLAYTON: So one of the things that I always love doing is getting the insurance company on the phone. We’re not combative about it. We just get them on the phone, ask them some straightforward questions with the owner of that policy sitting right there.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:22:07]
CLAYTON: We go through the list of questions and just ask them to get some better understanding of how it works, and then we do the math on it out to life expectancy, and typically we see that those returns, like Mike said, are about that of a savings account. It just seems ludicrous for somebody to put their money into something, lock it up, only to draw income for the rest of their life, when they could be doing something much more effective and still getting that income for their rest of their life. So if you have an annuity, if you think you’ve got one of these riders on it, or an income annuity, any of that type of product, make a note and one of our fiduciaries can talk you through it.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:22:49]
MIKE: Call us, 833-707-3030. We’re here to help you. We won’t charge you to facilitate this conversation. Our bottom line is that you can have the education that you need, that you can get, the transparency that you deserve.
CLAYTON: The end result of those phone calls with the insurance companies was surprise, from the client’s standpoint, that they didn’t know what they had gotten into. So that’s something to keep in mind. Make sure you understand what it is, how it’s working for you, and what it does.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:23:23]
CLAYTON: And if you can’t explain it, if your advisor can’t explain it, then it’s probably not something that you should be in.
MIKE: [LAUGH] Probably. And then the other side, this is the easy one, liquidity and principal protection. Should you have all of your assets in your savings account? Probably not. I have met people that put all of their assets in their savings account, say, “Well, it provides enough we need. We don’t want to deal with it. That’s fine. Like, we’re good to go.” Okay. Just as long as you have enough to keep up with inflation, which those people typically have to have a couple million dollars and have to still live very modestly.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:24:06]
MIKE: Is it worth it? I don’t think so. But I believe these are choices being made due to a lack of education, because they’ve been scared into submission by the financial industry. And if that’s you listening right now and you’re scared into submission by the financial industry, on behalf of the industry, I apologize to you. It is unfair. It’s like going to a doctor’s office and having the doctor saying, “Okay, here’s a bunch of information. Now, good luck. Go do it. Perform that minor surgery on yourself. Hope you don’t get infected. Hope it goes well.” It’s just ludicrous.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:24:43]
CAMERON: Following that exactly, that’s like saying okay, we’ve got a three part surgery here. We’re only gonna do two parts. Pick two. You know, which of these parts of surgery. Well, you know, I want all three.
MIKE: Yeah. [LAUGH] Which part do you want to do?
CAMERON: Yeah, yeah. And so, you know, a big part of this podcast is education, just to let you guys know. You know, there are the three aspects to any investment, and you can have a mix of them with a safer distribution plan and capitalize on the benefits of each of those, of those sides.
MIKE: Can you imagine? I’ve never been in a surgery, but let’s say you’re having a surgery on your leg, okay? Just lack of knowledge here. I’m not a medical professional.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:25:24]
MIKE: But you’re having a surgery on your leg, and to save money, you’re also going to be the nurse. So they just numb the bottom half of your body and the doctor will say, “Okay, scalpel,” and you have to know all the different terms and hand it to them. That’s not gonna be a fun situation. Kind of a silly analogy, but it goes to show so many people have been scared into the decision that they have made for their retirement, and it is absolutely not appropriate.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:25:54]
MIKE: When it comes to investment motives, and there are three of them, and this is the second principle; diversify by purpose, not just by risk. You’ve got three different parts of every retirement plan. You’ve got your liquidity and principal protection, which is your safe money. This is your emergency cash, discretionary cash, whatever it may be, for when life happens. And it does. Then you’ve got your income mapped out for about 10 to 20 years, depending on how you want to map it out. That’s growth with principal protection. We want it to grow, but it has to be principal protected to follow one, the first principle of retirement planning, but two, we want to avoid sequence of return risk.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:26:35]
MIKE: We want to avoid you compromising the gains in the up years, but also, and this is the important part, accentuating your losses in the down years. That is the killer of retirement plans, and most people seem to miss it until it’s too late. And then the last part here is growth and liquidity, it is absolutely appropriate, whether you want to buy and hold or use two sided strategies, that’s up to you. But to have a long term investment strategy that’s at risk for 20 years or so is completely appropriate because you don’t need to touch it for 20 years. This is what you’re used to in your accumulation phase.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:27:15]
MIKE: However, it should never be the entire portfolio. And every retiree within the sound of my voice and not needs to understand what their investment motives are and follow the second principle of retirement planning, which is diversify by purpose, not just by risk. You can’t just wing a retirement plan. That’s the way to have sleepless nights. I tell you what, ooh, Q4 of last year, a lot of sleepless nights. Hard to enjoy the holidays when you’re watching your retirement just dwindle away. Thank goodness in January it bounced back this year. I hope it does the same; it bounces back.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:27:58]
MIKE: Actually, it’d be nice if we just didn’t have any sort of downtown in December, but we’ll see what happens. It’s just, ugh. Quick aside, it’s tough to be retired today, financially speaking. It’s tough. I hope there’s a lot of people that are listening right now thinking, you know, I want to change. I want to get rid of this anxiety. Well, Clayton, we’ve got this new term that we just coined, a safer retirement ROI. This is fun. I’m gonna introduce it right now because I feel like it. It’s coming out January 1, 2020, an education platform that will be on our site.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:28:35]
MIKE: But a safer retirement ROI, research first, then organize, then implement. Let’s not put the cart before the horse, and the research needs to be done on the entire plan before you can start organizing anything. Let’s not organize it as we go. Let’s do enough of the research. Research that you’re comfortable with and can explain yourself. Anyway, we’ve only done three of the 12 Days of Retirement, and we’re already halfway through the show. If you’re just tuning in, this is Safer Retirement Radio by Decker Retirement Planning. I am Mike Decker, and I’m here with Clayton Bradshaw, the retirement builder as I’ve always called him, and I think he’s okay with that nickname.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:29:16]
MIKE: And then I’ve also got Cameron Archibald from our in force business, the guy who maintains the plan. Or the head of Sherpas, dare I say, who walks every step of the way with our clients with the RMDs, the tax minimization, the distributions, the whole nine yards there. We’ve got a great panel here today for you. And if you’re just tuning in and want to catch the full show, you can always go to iTunes, Google Play, wherever you get your podcasts. Look for Safer Retirement Radio. If you don’t know how to do that, ask your kids, grandkids, whomever it may be, you can get the show.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:29:47]
MIKE: Every Friday morning first thing, get the transparency that you deserve. All information based here. Let’s talk about four. This is punny, but four starts with an F, and so this one starts with an F, fiduciary. Four means fiduciary, and you need to work with a purebred fiduciary. Here’s the research that Tony Robbins presented a while back when he was writing his book. He said, “I was looking through the industry, and I discovered that most financial professionals have a Series 7 license,” and a Series 7 license means that they get paid on securities commission, which creates a conflict of interest.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:30:25]
MIKE: But there’s a key word there. It’s called fiduciary. It’s the F word of retirement. And I’m almost quoting Tony Robbins verbatim. He says, “The F word of finance is fiduciary. It’s an important word, you must know it. It means they are legally bound to do what’s in your best interest.” That’s critical, legally bound, your interest. Not theirs, your interest. The example Tony Robbins gives is if you buy a stock at a certain time of the day, and then the financial professional buys a stock later in the day and gets a better price, according to Tony Robbins’s research, he has to give you that price on that stock.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:31:01]
MIKE: Now, that’s Tony Robbins’s research, okay, and his interpretation of that, but I don’t see it being that far off. I mean, our employee investments are getting the same price point as our clients as well. I mean, we’re all in the same models and doing the same thing here. We’re all on the same page, because that’s how it should be done. But Tony Robbins, he realized and most people don’t realize this, 33 percent claim to be fiduciaries and have a Series 65 or 66 license, which means it’s a fee-based license, you get paid for their advice.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:31:37]
MIKE: But he realized Series 66 license is often paired with a Series 7 license. There’s something called a dual-hat disclosure, which means they can put on different hats and they can say as a fiduciary, I recommend that you invest. Now, as a broker, I’m suggesting these mutual funds. Mm.
CAMERON: Just seems like a way to squirm away from any sort of blow back, right? If the client doesn’t understand or doesn’t like the stocks or, you know, has issue, right?
MIKE: Well, my uncle is a medical doctor, okay? Brilliant guy. [LAUGH]
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:32:17]
MIKE: This is my favorite two truths and a lie game. I’ve played cards with Bruce Wayne, ’cause his name is Bruce Wayne Lee. He’s also Bruce Lee. I use that one sometimes too. Fantastic guy, brilliant, very knowledgeable doctor. Let’s pretend he takes, and he doesn’t do this, but let’s pretend he takes his medical doctorate, that accreditation which is very valuable, and takes the Hippocratic Oath to do what’s in your best interest, and then gets employed by a pharmaceutical company and only can make money off of that drug.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:32:50]
MIKE: Do you think someone in that situation, who needs to feed their family, is going to say, “Hey, you need to heal. Now, here’s this great drug that’s gonna take care of it for you.” There’s a huge conflict of interest there. Do you remember, Clayton, I don’t have it memorized, the Warren Buffet quote on brokers and doctors? I don’t have it memorized.
CLAYTON: Yeah. I’ll see if I can repeat it. He says the broker is not your friend. Again, this is Warren Buffet.
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CLAYTON: The broker is not your friend. He is more like a doctor who charges patients based on how often they change medicines, and he gets paid far more for the stuff the house is promoting than the stuff that will make you better.
MIKE: 33 percent are alleged fiduciaries, but when you take out those who are dual-hat licensed, or are claiming it by an education credential and not actually by the licensing accreditations themselves, when you take out all of the smoke and mirrors, 1.6 percent of all financial professionals are pure fiduciaries, are actually fiduciaries.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:34:02]
MIKE: Statistically speaking, you are working with a salesman and not a fiduciary. All I’m asking, whether you like your current financial professional or not, is to simply find out if they are a fiduciary or not. I work with car salesmen every day. I love going in sales situations and being sold something. It’s America. It’s kind of fun. I went to a tree farm this past week, my wife and I bought a tree, and I love the tree salesman telling me about the benefits of all the products. I think it’s kind of fun. But I have all the power to make a decision. I know he’s gonna try and sell me something, and we bought the tree that we wanted to buy.
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MIKE: We had all the power, but we were aware of the situation. All I’m asking is that you be aware of the situation. If you want to work with them, that’s fine, just understand they are there to sell you a certain kind of investment and will not make money on other investments that may be more appropriate. This goes back to the second principle, diversify by purpose, not just by risk. They’re gonna cut out two of the three investment opportunities you have, because that’s the only way they get paid. And that is what gets my goat. Clayton, can you walk through the three ways that you can tell if there is a fiduciary or not?
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:35:15]
CLAYTON: Yeah. So the three checks to see, and again, make note of these and write them down. But if your advisor can’t answer yes to all three of these questions, then they probably aren’t a fiduciary. So number one, are they Series 65 licensed? So not Series 7, so make sure that you understand the distinction between those, like Mike just reiterated. Number two, are they independent? So you want to find somebody that is working for themselves, that has the control to decide what products they can offer.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:35:48]
CLAYTON: For example, if you walk into, I’m not gonna name names, but one of the major banks that sells a lot of mutual funds…
MIKE: Mm-hmm.
CLAYTON: And if you walk in there and say, “I need to buy a mutual fund,” I can almost guarantee you that you’re gonna walk out of there with one of their mutual funds, even if it’s not in your best interest. And then finally, are they a registered investment advisory? So those are the three checks. Are they Series 65, are they independent, and are they a registered investment advisory.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:36:22]
MIKE: If you want more information on that, you can go to DeckerRetirementPlanning.com, but those three checks, only 1.6 percent of all financial professionals can say yes to all three of those checks, according to Tony Robbins’s research.
CLAYTON: And Mike, one more quote that I want to share that came to mind is a quote by one of our past SEC chairmen, Art Levitt. He says if you have more than 50,000 dollars to invest, you should fire your broker and find an investment advisor. Now, investment advisor is code for fiduciary.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:36:54]
MIKE: Thank you, Clayton. Number four, fiduciary, the F word of retirement. It’s absolutely critical. Don’t just catch it as a buzzword. Understand it as it is with those three checks, and then find someone that’s a fiduciary. If you don’t know where to look, I would be more than happy to have one of our planners, who are fiduciaries, sit down with you and then tell you three other fiduciaries in the area that you can go and visit. What we care about is that you get the transparency that you deserve. It can make an educated decision for you. Pure and simple.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:37:28]
MIKE: And if you ask us that, we’re legally bound to give you the right answer. There’s one client in particular I was thinking of in Washington that asked our planner up in Washington, Ben Koval, and says, “Hey, who else does something like this?” That client says, “Well, for this kind of distribution plan, there’s only one other company. Here’s their name, and then here’s another advisor that kind of does it close, but it’s kind of different. They do this and this and this. Those are the closest people to our planning practice.” That client then went to those two practices and said, “Hey, this looks good. Who else does this?”
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:38:06]
MIKE: And both of them said no one. We’re the only ones who do this. We’re completely unique. Very interesting. That client signed with us and is one of our clients today, because of honesty. We hold that fiduciary responsibility very high in our practice. It is absolutely critical in everything that we would do. Even if you’re not gonna work with us, giving you the right information is critical so you can at least have the retirement you’ve hoped and dreamt for your whole life.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:38:38]
MIKE: If you want to have a conversation with us, whether it’s about retirement planning or anything we’ve talked about. One, distribution planning, two, the two sided models, three, investment motives and how to coordinate those, which is the second principle of retirement planning, or four, finding a fiduciary, you can call us at 833-707-3030 or go to DeckerRetirementPlanning.com. Shall we talk about five? This is always the obnoxious one in the 12 Days of Christmas. It’s five golden rings, and that’s when you find out who really wants to be a singer and who actually is a singer. Oh, it’s… [LAUGH]
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:39:13]
MIKE: Let’s talk about when is the ideal time to start planning before retirement. I’m suggesting it’s five years, and here’s why. Ten years, there’s still a lot to happen there. You could start planning 10 years or so, conceptionally speaking. But is it appropriate to invest in all of your assets 10 years before retirement into a retirement plan? Maybe to start, maybe a little bit, just to kind of start easing that way. But when the time is right to start actively planning for your retirement I believe is five years out, or when you’re retired.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:39:52]
MIKE: And here’s a couple of fun facts for you. Markets crash every seven to eight years. Markets are up right now. If you’re five years away from retirement or not, we’re overdue for a market correction. That’s a polite way to say a big crash. If you plan right now and you obey the three principles of retirement planning, you can set yourself up so if the markets do crash between now and five years of when you want to retire, you sail through it unaffected. You can, your plan is built to sail through it. In fact, the principles help protect you from that, and you don’t have to delay your retirement.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:40:30]
MIKE: It’s so tragic to see people who want to retire in five years, for example, for today, and let’s say the markets do crash in 2020, and they delay their retirement an extra three, four, five years. That is devastation. That’s life altering. That’s why we want to avoid it.
CAMERON: And, you know, I’d like to comment here. This isn’t to play on fear, trying to scare you that a crash is coming and you’re overexposed. You know, if you’ve been listening to this show, this is simply helping you get your ducks in a row for that retirement. The last thing we want is to have clients come in after the next correction and say, “Wow, I heard about you guys, I wanted to stay in the market longer, and then I lost 40 percent.”
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:41:12]
CAMERON: You know, let’s make the, you know, have the conversation now, look at where you’re at, what that timeline could look like, and it may be sooner than you think that you could retire. We see so many clients who say, “Okay, I’ve worked all my life. You know, I’ve accumulated well. Now what? You know, when do I pull the trigger? When can I actually retire?” And the safer distribution plans can give you that clarity.
MIKE: Mm-hmm.
CAMERON: And just take away the guesswork. I mean, it’s math-based. We purposely have a team that are set up to help take the emotion out of these decisions, and as far as the distribution aspect, to where it breaks down to the math.
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CAMERON: And it’s really cool, so many clients, once they see the distribution plan start to work. They can just take a breath and relax and say, “Okay, yes, you know, this system is correct, this is working, and now I can really focus on more important things in retirement,” which is what we all want you to do.
MIKE: Yeah. And one of the magical parts about five years is most people can retire sooner than five years. Some people can, when they walk in saying, “We want to retire in five years,” we say, “Well, you could actually retire today. When do you want to retire?” And some people, they retire that day. Some people they say, “Well, I still want to keep working. I like what I do,” and they retire in five years.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:42:32]
MIKE: But like Cameron, we were talking about, the difficulties that happen in retirement, let’s say you plan to retire in five years and you get cut from your job. You get laid off in two years. Your plan is in place. You’re good to go. The investments are aligned. That’s the beauty of the five year mark. And if anyone here is expecting to retire in five years or less, I highly encourage you talk to a retirement specialist, whether it’s us or someone else. That is the time to start talking with someone on planning your retirement, with a deliberate research-focused objective.
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MIKE: Not just a all right, this seems like it’s gonna be happening. Let’s wing it. That’s not what we want to do.
CAMERON: You know, and what’s cool too is some clients will say, “I love what I do. I want to work part time,” not even necessarily for need of more income from assets in retirement, but they want to transition themselves into retirement. You know, that’s gonna both help your retirement plan, because you’re working longer, but it will also allow for the shock of not going into work as much. You know, instead of an abrupt edge, you can ease into it that way.
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CAMERON: And so we have some clients who opt to do that, and it’s a wonderful transition for them as well. They’re gonna say, “I’m gonna work one or two years part time,” and be able to see how the distribution plan works, be able to, you know, really, you know, get into it. And then they say, “And then, you know, now at such and such date, you know, I will cease working.” And it’s a really exciting process on the in force side to see.
CLAYTON: One of the things that I’ve seen, I met with a couple, and I stress and emphasize the importance of the five year mark, because I met with a couple that had retired about six months before they came to actually do their retirement planning.
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CLAYTON: They got what they thought were all of their ducks in a row. They came in and they said, “You know, this has been great. We retired six months ago. We’ve just been loving, enjoying retirement. But we think it’s time to kind of buckle down and now get our ducks in a row, get our budget lined up and know what our plan looks like going forward, so we can be comfortable.”
MIKE: Ever heard the expression ready, fire, aim?
CLAYTON: [LAUGH] That’s kind of what they did a little bit. So they sat down, and unfortunately, at the time, they weren’t in the spot that they should’ve retired, based on their living expectations.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:45:00]
CLAYTON: And so that’s a consideration that when you’re looking at retiring, plan ahead. Give yourself a few years, so that you can make some changes, so that you know what it looks like, and so that you can actually plan on retirement, and you can retire the day that you want to, and not the day that you have to.
MIKE: Thank you, Clayton. Five years before ideal retirement date. Now, I’m gonna go through the numbers here. If you’re just tuning in, this is Safer Retirement Radio. I’m Mike Decker. We’ve got Clayton Bradshaw from the retirement builder, and Cameron Archibald, the Sherpa of retirement over here. That’s your new name. I just deemed it to you.
CAMERON: Love it. Thanks, Mike. [LAUGH]
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:45:38]
MIKE: [LAUGH] And we’re dialing in the 12 Days of Retirement. We just talked about five, the magic five years before is when to start really getting your ducks in a row for retirement. Four, the F word, fiduciary in retirement. And by the way, a CFP means you’re very smart. It doesn’t mean you’re a fiduciary. I just want to get that out there. I have a lot of respect for CFPs, but a CFP that’s still Series 7 is still a salesman. They’re just a very smart salesman. Let’s just be very clear about designations here.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:46:11]
MIKE: Number three, investment motives. That’s the second principle of retirement planning, which is diversify by purpose, not just by risk. The investment triangle. If you want to learn more about that, download our e-book, Principles that Govern Proper Retirement Planning. Number two was two sided risk models that are designed to make money in up or down markets. Especially in December. It seems like the markets are getting hammered right now. Doesn’t have to be that way. Learn more about two sided models. You can go to DeckerRetirementPlanning.com for more information about that. And number one, use a distribution plan, not the pie chart guesser.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:46:45]
MIKE: Let’s get a real plan in place here, one that can give you the transparency that you deserve, so you’re not up awake at night, sleepless, especially in the holiday season when markets are going down. Spirits should be going up. You should be enjoying time where it matters most. Time is our most precious commodity. Let’s not waste it. Number six, we’re gonna get halfway through this, so next week we’ll finish up the 12 Days of Retirement. Social security optimization.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:47:17]
MIKE: Now, this one’s a bit of a sensitive topic for me, and here’s why. First off, the expectation of Social Security is a benefit. It’s not a government benefit. We paid into it. We deserve every penny we want to get out of it. The second part is I feel like, and this is a feeling, I’m acknowledging this is not fact-based, and I’m not accusing anyone of anything here, Social Security is a hot topic by financial professionals to get you in and sell you an income annuity.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:47:50]
MIKE: I see it over and over and over again. And sitting from behind the curtain, it really drives me crazy. Social Security, if anyone tells you blanket slate answer of you should take your Social Security at 62 or 70, and not have any regard to the other investments you’re pulling as income, it is short sighted, it is not a complete answer, and it’s a sales pitch to get you in front of them.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:48:26]
MIKE: Mathematically speaking, if you want to maximize your income and you’re 60 years old, 68 and a half is the optimal time for most retirees, at least according to the math-based research we’ve done internally here, 68 and a half years old is the ideal time for you to start drawing income. Depends on the projected COLA, cost of living adjustment you want in your plan, and if you think Social Security is going to increase as well over the years, as the demand, the inflation may go up.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:49:02]
MIKE: How many financial professionals have made that claim? None. None that I’ve ever heard, and the reason why, I think, is because they don’t have one, the technology to back up the research, or two, 70 is a much easier answer to explain, or 62. Is that the kind of information you want? I don’t believe so. Here’s the principle on Social Security. If you file too early, your income is hurting, and if you file too late, you’re hurting your estate.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:49:37]
MIKE: Here’s what I mean. If you file too early, your Social Security takes a dip. You’re taking that 62 at a discount, and that discount is stuck for the rest of your life, okay? Now, if you don’t live very long, if you’re gonna die in your 70s, 62 is a very good option, and that very well could happen. But if you think you’re gonna live in your 80s or 90s, should you file at 70? Well, at some point, if you’re already retired at 60 years old and you want to take your Social Security at 70, where do you take your income?
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MIKE: It’s from your assets. This is called gap strategies, and you’re dwindling your estate to save money on your Social Security, when you still don’t know when you’re gonna die. It is a discredit to your beneficiaries by dwindling your estate, by waiting ’til 70 years old, unless you just have this predisposition, like in Parks and Rec, Chris Traeger, who thinks he’s gonna live to 120 years old. Great show, by the way, Parks and Recreation.
CAMERON: Great show.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:50:44]
MIKE: But when all is said and done, I don’t know another practice, at least in the fiduciary realm, that we’ve come to know and become acquainted with that is doing Social Security optimization in this way. There’s a lot of money that’s being left on the table, either on your personal estate because you’re taking too much income, or an income strategy standpoint, because you’re taking too less income because you’re trying to save for future money that may never come.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:51:23]
MIKE: I’m not even talking about the Social Security political conundrum that’s at hand. I don’t think it’s ever gonna go away, because politicians want to get reelected. And any politician who says we’re gonna get rid of Social Security is not going to be elected. I just don’t think it’s ever gonna happen.
CLAYTON: Mike, one of the things with Social Security that I’ll add is don’t look at it in a vacuum. You’ve got to look at it with all of your other income streams, all of your other assets, and assess the need as a whole, and not individually-based. So looking at the Social Security report, the optimization report in and of itself isn’t gonna provide you all of the answers that you need.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:51:59]
MIKE: You’ve got to look at it with if you have a pension, if you have your rental income, your other income streams that you’re drawing out of your assets. You have to look at your needs. And all of those things need to be taken into account when assessing the Social Security.
MIKE: Oh, go ahead Cameron.
CAMERON: No, I was just gonna say and if you’re already retired and already drawing Social Security, don’t think that counts you out from a safer distribution plan. You know, we have so many clients who do come over after they’ve already filed and were able to work. We can help you wherever you are in your retirement journey. Just wanted to put that plug for some of our retirees who may be up in that age bracket.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:52:37]
MIKE: Oh, yeah. Well, according to Bankrate, there’s 567 ways you can file your Social Security. Whew. Which way is good for you? [LAUGH] That’s more than a coin toss. But we want to be able to address it from a math-based, principle-based standpoint. We want to look at the whole picture. The last part of Social Security I want to address here in today’s show, and we’ve only got five minutes left, is Social Security taxes. Social Security tax is such a conundrum, because you get taxed… Well, I mean, if you’re at the zero tax bracket, then sure, you get Social Security at a good rate, but then most income you can get 50 percent Social Security, of your Social Security is taxed as income tax, or 85 percent.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:53:19]
MIKE: Who in their right mind has a million dollar portfolio and could take, let’s say 100,000 total of income from all their different sources. Not just from income from assets, but all of the different sources, 100,000 of income, but they’re gonna say, “No, I think I only want 36,000 dollars of taxable income this year, because I only want to be taxed on 50 percent of my Social Security.” I don’t know many clients that do that. We’ve painted ourselves into a tax corner which we’re gonna talk about in the 12 Days of Christmas, it’s point number 10 here, when we’re talking about taxes.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:53:57]
MIKE: But when all is said and done, understanding Social Security tax, the ramifications to properly calculate it I think is an effective and appropriate conversation for all retirees to have, just so their expectations are set correctly. ‘Cause if not, it just seems reactive, and that’s not a way to live life. It really isn’t. And the other conundrum here is we’ve been told, and I know I’m doing a little bit of point 10 here, but we’ll talk about that next week, we’ve been told in the ’80s and ’90s and 2000s, put money in your 401(k). Put money in your 401(k).
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:54:32]
MIKE: Well, if the average retiree is gonna take about the same amount of income as they were receiving from their salaries, which is true, when it’s about the same, it’s a nice smooth transition there for a lot of retirees, or more for some of our retirees. Oh. And all of your assets are from a qualified account like an IRA or a 401(k), you’re not saving any money on taxes, unless you do proper tax minimization, which we’ll talk about a safer tax plan, which is very strategic. But the reactive way of, well, I’m retired and I’m paying more taxes, this is a very common problem for retirees today. Very common.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:55:10]
MIKE: And it’s avoidable. We’ll talk more about that. But the chasing of lessening your Social Security taxes, I really think is a small part of a bigger problem for your retirement, and that’s a little plug for stay tuned next week so we can talk about that. Talking about safer tax plan and minimizing your taxes in retirement, as we continue the 12 Days of Retirement. This is Safer Retirement Radio, where you get the transparency you deserve, by Decker Retirement Planning. We’ve got Cameron Archibald and Clayton Bradshaw joining me. I’m Mike Decker, wrapping up the show today.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:55:41]
MIKE: Here’s the quick recap of all the show today. Let’s run them off. Number one, use a distribution plan, not a pie chart. Pie charts guess; distribution plans plan. Number two, two sided models that are designed to make money in up or down markets. This will especially be pertinent in your research for your retirement right now, as the markets are getting pretty hairy out there. The investment motives, this is number three, there are three investment motives between growth, liquidity, and principal protection, and this is the second principle of retirement planning. Diversify by purpose, not just by risk.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:56:17]
MIKE: Number four, it’s the F word of retirement, fiduciary. Find yourself a fiduciary. Only 1.6 percent, according to Tony Robbins’s research, is a fiduciary, a purebred fiduciary. Find one. If you don’t know where to look, call us. We are one, and we’ll point you to a couple others as well, so you can continue your research in the right environment. The next one here, number five, is retire five years before your objective date or your goal, so you can prepare to sail through market corrections that are happening and not delay that beautiful target date.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:56:50]
MIKE: And the last one we talked about here was Social Security. If you file too early, your income is hurting, but if you file too late, you’re hurting your estate. Optimize Social Security with the complete plan. Don’t put it in a vacuum, as Clayton was saying, and just optimize it there without recognition of everything else. There’s a lot of moving parts to a retirement plan. That was a lot. We only got halfway through the show. Retirement Radio listeners, thank you for joining us on the show today. Cameron, thank you for joining us as well and taking the time out.
CAMERON: Oh, it was great to be on the show. Thanks, Mike.
RR S3 E24 THE 12 DAYS OF RETIREMENT PART 1 [00:57:25]
MIKE: Clayton, thanks for being our guest today as well.
CLAYTON: Happy to be here. Thank you, Mike.
MIKE: So we’re gonna be on the air same time, same place, with the same station next week. For all of you tuning in, iTunes, the podcast apps and all of that. Friday mornings, 10 AM Mountain Standard Time, we release the show. If you’re just new to the show, tune in that medium because it’s a great way to interact with some specials coming through there. And don’t forget, December 15th, a lot of publications are available for free at DeckerRetirementPlanning.com. If you like what you heard and want to talk to us, you can call us at 833-707-3030. Thanks for listening.
