MIKE: Welcome everyone to Safer Retirement Radio. Where you get the transparency that you deserve. I feel like this show is kind of like a fireside chat. I know sometimes we record Sunday morning, or we air Sunday mornings and other stations we air Sunday evenings in the podcast. Well you can listen to us anytime you want. But when it comes down to it this fire side chat, it’s all about understanding that time is your most precious commodity.
MIKE: And by a math based, principal-based approach to retirement we’re able to replace fear with future, with optimism, with life, with preserving your lifestyle. Getting you more about what you want, more value with your time. Now we can all agree, or at least we should, that one plus two is three. Right? We can all agree on that. When you add principals to the structure, the equation, the how we’re putting it together. A math based, principal-based approach is truly what we believe here at Decker Retirement Planning as the outline, the scaffolding, the sturdiness to a proper retirement plan.
MIKE: Now I know we’ve talked about this over and over here again. But on Decker Retirement Planning dot com we’ve got two eBooks I want to highlight in particular. The first one is our Social Security optimization. Folks, if you haven’t filed Social Security yet, if you’re 55, 56 years old, 62 even. If you haven’t filed Social Security yet I challenge you to see if you are asking yourself all the questions you should about how you should file. Most people are not. Most people are only talking about max income from Social Security. As in, I’m going to maximize my social security and I’m going to file at 70.
MIKE: Or, I’m going to file at 62. Because Social Security… These absolutes are single track minded in the idea that all you’re focused on is Social Security. Well if you want a smooth income and look at your retirement as a whole, retiring early, or excuse me, filing Social Security early as opposed to late may have other ramifications to your retirement plan than you may realize. This conversation is so critical we wrote a eBook about it to open up people’s minds and enable them to ask more questions on what are the ramifications of when I file for Social Security in regards to the entire retirement, my entire retirement plan.
MIKE: You can download it at Decker Retirement Planning dot com for free. You can also download principles that govern proper retirement planning. A second eBook that we wrote specifically to give people the principles, the theories, the lens to which you should put over your retirement plan to stress test it, to make sure, or to help make sure I should say. This is radio. We can’t look at every individual suitability here. But the principles, the stand for all retirement plants. That if you can follow these principles you’ve setup a proper retirement plan. That’s why they’re principles. And being principle based, math based really lends a lot of security I should say to your retirement plan.
MIKE: You can get those at Decker Retirement Planning dot com. I want to talk real quick folks about familiar space. And this is such a critical topic. Because transitions happen. When we’re growing up, we’re with our parents, right? One parents, two parents, maybe grandma raised you. We grow up and then 18-years-old or so, some a little bit later some a little bit sooner, we move out of the house and we transition into the adult life. That is a scary transition for a lot of people. It happens. We do it. And we reinvent our self. It’s a critical transition that all of us go through.
MIKE: At retirement a very similar transition happens. We stop getting a paycheck. We have to change our identity. Because work used to be most of our identity. And now it is not. We have to live off of our own means, our own paycheck so to speak. And not the paycheck of an employer. This transition is critical. But the biggest issue that I’ve been noticing in the last few weeks with people coming in is the need to stay in familiar space. Here’s what I mean, familiar space is the tendency to want to go to what you’re used to and not necessarily what is right for you.
MIKE: Here’s a point, my wife and I, when we first got married, we would have a lot of fun drawing up plans for our dream home that we would build. Not something audacious. We’re not drawing hotels or things like that. You know what? A nice modest home. But it was designed exactly how we would like it. We’re very creative people. The first iteration of my wife’s plan, without any comment of myself, without her realizing it was her childhood home. Why? Because it was familiar space. Now when I pointed it out there was a lot of resistance there. But then I said, “You’ve mentioned X, Y, X, that you’d like be a part of it. It seems like this house, this layout that you’re having fun putting together isn’t conducive to what you’re trying to accomplish.”
MIKE: And she said, “Shoot. That makes sense.” And then did a different iteration. And then became her own. In retirement we spend out entire life working, which is our identity, and getting a paycheck. Which creates financial stability. When you transition out you have to create a new identity. It can be tough. When you leave your last paycheck and you now transition into having to create your own paycheck it is tough. For a lot of people, it is tough. It is scary for a lot of people. But it doesn’t have to be scary.
MIKE: In point and fact, the reason why it’s tough and why so many people are scared is because we’ve seen the disasters over and over again from so many people around us. We remember 2008. We remember what happened when so many people had to go back to work or move in with the kids or downsize their lifestyle. Because their plan didn’t work. Why did their plan not work? Well, let me tell you. Their plan didn’t work because they did not implement the principles that govern proper retirement planning.
MIKE: They fail to transition from the accumulation investment strategies and they fail to transition into the retirement financial strategies, the distribution financial strategies. I got three different stories here. One about Social Security. Just a quick little change gave over 200000 dollars extra in the retirement. We’re going to be talking about second marriages and how to plan around the different nuances that, that may bring.
MIKE: And so much more here. But I all I want to say is we’re going to offer a few people throughout the show the Decker 30 review. A Decker 30 review costs about 2000 dollars for us to be able to do. For labor, for technology, all that. We’re going to be giving a few away today at no cost to you. If you’re 55-years or older and you hear something you like this will be for you. We’re going to be talking about the principles and how they apply in each situation and really dissecting the overall anatomy of building a proper retirement plan in hopes, not only that you can get the transparency that you deserve.
MIKE: Let’s get out of this rat race that a lot of financial professionals are putting people in and confusing people in submission to doing something. Which is wildly inappropriate. Let’s be uplifting. Let’s be positive and let’s enable. Everyone right now that’s listening into, whether it’s podcast or radio, to build the right retirement plan. Now if you have to go and still want to take me up on this offer just go to Decker Retirement Planning dot com. And you can catch more information, download the eBooks and sign up for the Decker 30 review there.
MIKE: Must be 55-years or older. And have at least 300 thousand of assets to quality for it. But it is for you folks. This is for you. All for you. And we want to make it available to you. Thank you so much. We’re going to take a real quick break. But when I come back, I’ve got just a wonderful story that I’m excited to share about, how does your household handle the finances and all the nuances that we can address by implementing the principles that govern proper retirement planning. Stay tuned.
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MIKE: Every retirement plan, every family, every person is unique. And I don’t mean that as some sort of buzzword. I truly mean a one size fits all plan. The idea that we can just diversify ourselves into success doesn’t make sense. You may have your mortgage paid off and someone else may have their mortgage still happening 10 years into their retirement. You may have the dream of sailing around the world for five years in your first five years of retirement and then coming back and changing your lifestyle. You may not. What we set out to do or what we want to set out to do in retirement is unique.
MIKE: And you should be heard. How does your household handle finances? How do you want to be able to handle the different nuances that may come? Are you in a second marriage? Or are you not in second marriage? Do you have step children? There’s a lot of questions here that need to be answered that should be addressed in your retirement plan. Which isn’t necessarily just about investing. It’s about structuring a plan to be successful. There’s some quote out there that says, “You plan to succeed. If you fail to plan you plan to fail.” Or something to that regard.
MIKE: And it really rings true here. We had a couple that came through our office. Second marriage. And for them they were happy as can be. But their finances were very different. Now this may be with you and this may not be with you. But hear me out on their specific situation. They split different bills. They divvied up who would pay for what. They managed their own finances. And they were allotted to themselves what they could or couldn’t do. And it was a partnership in that they were independent on their finances but together on other family matters.
MIKE: Together on children. Together on family trips. All sorts of things. Second marriage. Okay, this isn’t too far off from reality for those that have that. If this is your first marriage, I know people that are on their first marriage, they both work and they handle their finances different. I know people that where one spouse doesn’t work. And they still have one person handling the finances and the other is allotted an allowance. Because for whatever the reason is, there’s no judgment here, everyone truly is unique on how they’re handling their finances. And that’s so beautiful when it comes to retirement planning if you can do it right.
MIKE: For them, the biggest problem was they weren’t sure, they were just being told over and over, “Well, just put your assets together, diversify and pull it out. And if you pull it out evenly then everyone should be fine. It’s all ratio based.” That didn’t really make much sense. So, with their situation we broke apart and had two separate plans. To where they’re independently being made. Let’s see, well together they put their plan together. And then we started dividing up. One person got their pension. The other person got their social security.
MIKE: And we started dividing things up to give each person their personal expectations that they have in retirement. The dangers that they had when they came into the office though, some of the biggest concerns were, and you may have some of these, is legacy. Who gets what and when do they get it? See folks, the surviving spouse, if not built out. Wills, power of attorney, and the legal documents if not built out correctly can on a whim cut your kids out of the will if there’s a step-family situation.
MIKE: I come from your situation. I’m very aware of this. Setting in the proper parameters that your legacy is setup how you would want to have it. And then when you die that someone can’t change your wishes is critical. And doing it when you’re of sound mind is of most importance. It is something that absolutely needs to be done. And this isn’t to say that right now your loving significant other isn’t going to betray you. That’s not the case at all. Right now, it’s probably a great situation. But money changes people.
MIKE: Money changes people. And when emotions get into people can’t think straight when they are emotionally triggered, when they are angry. We’ve all been guilty of this. Is it worth it to put your legacy, your wishes at risk to someone else’s emotions knowing that they’re imperfect? Just like we’re imperfect. You’re imperfect. I’m imperfect. Once we address that we can start looking into the specifics of, what it is you want it to look like. How does your household want to handle the finances? And how do we map all of that out?
MIKE: Here’s what we did we implement. In their case they understood the concept that you don’t draw income from a fluctuating account. Which is principle number one. But principle number two, diversify by purpose not just by risk was something that hadn’t been implemented before. So, when we brought the whole plan together and then we separated the two it was a fun situation. I say fun because it’s fun to say, “You know, this is your life. These are all the fun things that you can do.”
MIKE: And this individual, just over a million dollars, low risk, wanted 20 years of income guaranteed. I am not talking about income rider. Folks, income riders, you set them for life. They’ve averaged, as far as I’ve been able to see, from all the different income riders that have come through out office, a 1.8% return on your investment. Actuaries are behind this. Let’s just be very realistic with the idea that they’re a for profit company that wants to make money and hope you die before you cross the break even.
MIKE: There’s a reason why 1.8% is the average return on investment that we’ve been seeing come through our office. So, when I say they have mapped out 20 years, we put assets when them in principal guaranteed accounts after the planning process. But they were not income rider annuities, okay? There’s a plethora of different investment options we can talk about. This is not the time and place for that. That’s more of a personal conversation if you were to come into our office, we can talk about that. Or you can read the Decker Approach or out new book coming out A Safer Retirement. It’s a whole series. It’s going to be phenomenal.
MIKE: But we’ve mapped out for 20 years her income. The reason why 20 years, it seemed right for her suitability given her age, life expectancy and risk tolerance. For her, she wanted to have some risk. So, of the million dollars roughly that she had we put about 200 thousand in a risk account with two sided models that were built to make money in up or down markets. Pretty cool stuff, right? Imagine if you had a computer algorithm that told you what to buy, when to buy it and when to sell it. 2008, not that big of a deal.
MIKE: Future market crashes, not as scary. Let’s get rid of this buy and hold mentality. Anyway, I can go on a huge rant there. But we won’t. We’ll talk about that later. The four percent rule, buy and hold and all that. That’s in the next story. But I want to focus on the legacy here. Built the plan in such a way that her wishes were set. Now she wanted maximum income holistically from retirement. So, we optimize her Social Security with her assets in such a way that she was maximizing her income while still maintaining an appropriate amount for her total basically asset base or her estate.
MIKE: And then we helped her direct with her legal team on how to pass these assets on to her beneficiaries. How incredible is it to know that should something happen tomorrow or something happen in 30 years that you have a plan for the different situations that may come? Now sure there may not be a situation if a meteor hits the Earth in 20 years, okay? Excluding those crazy black swan events, she set herself up for success. We call that here a safer retirement.
MIKE: Folks, when it comes the beauty of taking this level of transparency and work really allows you to share your story, your legacy. And this goes into principle number three, use a distribution plan or a spreadsheet when it comes to mapping out your retirement. Not the silly, gosh the pie-chart. The pie-chart guesser are the people that play Russian roulette. Let’s get rid of that. Let’s have some transparency here. Let’s have some deliberate direction in your finances, in your retirement plan. So, you can tell your story how it was meant to be told.
MIKE: I’m going to take a moment here and extend the offer at the end of this segment here. And the reason why I want to take a little bit more time than usual is because it is so life changing so enabling to be able to map out your wishes on paper and then be able to have confidence in that. It normally costs 2000 dollars to set at the table, to learn your story and to put together at least one draft of your retirement plan. But if you’re 55 years or older and have at least 300 thousand in assets saved up for retirement I’m going to give the next 10 callers, at no cost to you, that benefit for free. At no cost to you. Call right now 833-707-3030 to take me up on this offer.
MIKE: 2000 dollars of value at no cost to you. You’ll call in and they’ll gather your information. So then on Monday the closest office will reach out to you and we’ll either do a 30-minute phone call or a 90-minute deep dive in person at your comfort level. Whichever one you prefer to do. Obviously 90-minute deep dive allows more questions, more interaction with you. But our purpose is to put the lens of the principles that govern proper retirement planning and put them over your retirement plan. Not for judgment purposes.
MIKE: This is about enabling you to be successful for if you are currently retired or nearing retirement. If you’re nearing retirement the time is now, folks. If you’re within five years of retirement the time is now. We don’t want to suffer through another market crash and then delay retirement because we didn’t take action now. You can set yourself up for success. Call us right now 833-707-3030. Only 10 callers. We’ve got limited availability for time slots in our calendar. But we do want to extend it and we do want to help enable you, empower you to have the retirement that you wanted, to be able to share your story how you intended to share it and to be able to set things up to leave the legacy that you intended to leave to your beneficiaries.
MIKE: Whether your kids, your grandkids, a non-profit, a charity, whatever it is you have the right to be able to do that. And we can do it together here at Decker Retirement Planning. To learn more about this offer as well as other information you can always go to Decker Retirement Planning dot com. On the bottom there you can also click, “Get Started,” on the Decker 30 review. We’re going to take a real brief break here, folks. When I come back, I’ve got an incredible story about Social Security. A little tweak that gave an extra 200 thousand dollars. Stay tuned folks.
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MIKE: Folks, I’ve got to ask just for conversation sake about this bull market here. Before we dive into this Social Security conversation, which is going to be just hopefully very enlightening. I’m very excited to share it. But this bull market really does baffle me. I’ll admit it. I’ll admit it. And we use two sided models that are designed to help make money in up years and help protect assets in the down years. So, it’s not necessarily a concern. The algorithms help tell us what to buy, when to buy it and when to sell it for our clients. Which is beautiful and why we’ve been able to secure some incredible returns since 2000.
MIKE: But are we in the ninth inning of this bull market? I mean, really. This is incredible. I mean, good for America to be able to ride this bull market as well as we have and to make as much money as we have. But are we in the ninth inning of this? Are we going to go into overtime? That’s a baffling question. I mean, we’ve got Trump trade that the market seems to be hinging on. We’ve got the Fed. What’s the Fed going to do? I mean, it really feels just like baseball.
MIKE: We got a pitcher, we got a catcher, we got a couple guys on base. Who’s going to steal? Who’s not going to steal? Is it going to be a strike, a ball? I mean, really there is so many variables here that could either take us to the next level, the new record highs. Or it could be devastating. And especially with overseas and what’s happening with Iran, could a black swan event trigger fear into the American economy just like in the ’80s when Iraq invades Kuwait. I think it was Iraq invades Kuwait. It triggered a crash. Could that happen and what would the ramifications be?
MIKE: I knew we just extended an offer for next time callers. I’m going to say the offer one more time. But folks, if you feel the angst with your retirement plan and you want to get the transparency that you deserve that you want to feel like you’ve got a safer retirement call us. Must be 55 years or older, have at least 300 thousand of assets saved up for retirement. Whether you’re retired or not call me, 833-707-3030. That’s 833-707-3030. It’s normally a 2000 dollar offer of services, $2000 value. You can get at no cost to you, to be able to see what the lenses of the principles, the principles that govern proper retirement planning, to put them over your retirement plan and see if there’s any adjustments that need to be made.
MIKE: Let’s have that conversation. From pure bread fiduciaries, people who are legally bound to do what’s in your best interest. Got nothing to lose. But everything to gain. Especially if we’re in the ninth inning, time is now to get those points, to get things in order and win this game, okay? 833-707-3030. That’s 833-707-3030. You can also go Decker Retirement Planning dot com where you can catch more information and still sign up there on the very bottom it’ll say the Decker 30 review.
MIKE: You can click, “Get started,” on the bottom and sign up for that at no cost to you. But it’s a $2000 value. Got nothing to lose there. Let’s talk about Social Security, folks. Sound good? Social Security, what a fun topic. The reason why I like this topic is because it’s something most all of us can get behind. I say most all of us, some people who work for the government don’t qualify for that. But aside from that, if you’ve qualified for Social Security, if you’ve been working most of your life you probably qualify and it’s probably a part of your retirement plan.
MIKE: Blanket statement, okay? But this is mathematically based. And I’ll take the perspective of a 60-year-old. If you file your Social Security too early your income is hurting. But if you file your Social Security too late, you’re hurting your estate. What do I mean by that? I mean that if you file too early, you’re taking Social Security at a discounted rate. And you going to pull more from your assets.
MIKE: But if you’re retiring again at 60-years-old in this example, by drawing Social Security there’s less need to draw income from your assets. Therefore, preserving your estate more. Now I’m not saying you should file at 62. I’m using both ends of the spectrum to illustrate this point. If you file at 70 but you still retire at 60, you’ve got to be able to draw income from your assets all the way to 70 before your assets receive relief from your income, okay?
MIKE: That means your estate is dwindling at the expense of getting a higher Social Security rate. Which Social Security is for life assuming that politics and government finances don’t get in the way of that? Which is more important to you? Now the beauty of it is you don’t have to pick one or the other. According to Bank Rate dot com there’s 567 different ways you can file your Social Security. So, wouldn’t it make sense to quantify the different options that you have and then say, “Gosh, my estate’s really, really important. But I need to be able to have this much in income.” What does that look like?
MIKE: “Run the numbers, quantify it, math based, principle based. Here you go. Oh, and here’s a couple other options for you to look at.” And then you can decide. Wouldn’t that be a conversation you’d like to have? Well that’s what these folks did. These folks came into our office. And now they were 65 years old. ‘Kay, 66, 65 years old. One had already filed Social Security. The other had not. And they came into our office and they said, “Okay well we’ve got about 350 thousand dollars. We’ve been listening to the radio show for a long time and we really do want to have some principle guaranteed assets in there.
MIKE: We don’t really have a plan. But we get the idea. Draw income from principle guaranteed accounts. We can get behind that all day long. We want to be able to sail through any market crash. The market turbulence, we’re done with it. We’ve experience it our whole life. After 2008 we said, “No more.” We built them a plan, mapped out according to their suitability how many years they wanted. And they wanted 19 years. I can’t remember why it was 19 years. But they wanted 19 years of principle guaranteed income. We said, “Sure, that sounds fine.” 19 years of income guaranteed. We had risk in there using two sided models that make money in up or down markets, quantified their pensions. Which they had already been taking.
MIKE: A hundred percent survivability. Which is great. Especially coming from a spousal risk conversation point. Hundred percent survivability is usually a better option because of spousal risk and the devastation that can happen should the worst happen too early. But the wife in this couple’s situation, who hadn’t filed Social Security, was unaware of a couple of things that she could do in her situation. With just a subtle tweak here we were able to not only provide more income for her Social Security it was a file in suspense situation to where she was able to.
MIKE: And not everyone’s able to do this. But she was able to take or differ her benefit and then take a spousal benefit until she took her own benefit. This was an older technique that’s gone away. But some people still may qualify for this depending on how your situation is and your age. But was a remarkable situation that alleviated a lot of their assets in their plans. So, they were able to take less income from their assets and preserved it and gave them an extra 200 thousand dollars in their plan. Now for them, in this situation, having 350 thousand of assets, roughly speaking, that was a big deal.
MIKE: 200 thousand was a lot of money for them. It’s all ratios here. If you have five million dollars can you imagine the multiplier that could help you with your plan? There are so many different situations here. But folks you don’t know what you don’t know. And being able to address Social Security appropriately is critical to a retirement’s success. So, when it comes down to it folks let’s get you the transparency that you deserve. There are two principles that were critical in avoiding this danger here.
MIKE: Before they listened to the radio show they didn’t understand that the pie chart guesser, the retirement roulette that many people are playing was that risky. Once they got that they wanted to build a plan up correctly and implement principle three, use a distribution plan not a pie chart guesser. When we were able to implement that the life changed. It was incredible. For all those folks that are resonating right now with what we’re talking about with Social Security and optimizing it for what you want to get out of your retirement. Not necessarily being close minded to just maximizing your Social Security benefit.
MIKE: Let’s have a conversation. I invite you to download our eBook on Decker Retirement Planning dot com. Which is Social Security optimization. You can get in education tab. I’m talking a little bit fast here. You can get it in the education tab. Sorry I get really excited about these things. Or you can call us. The Decker 30 review, we’ve mentioned it before, $2000 value. At no cost to you. I am willing right now to take the next 10 callers as well to come in and implement the three principles that govern proper retirement planning with your unique situation.
MIKE: And have a conversation about, here is what it looks like. Is this meeting expectations? Here’s how it reduces your risk. Here’s how we’re reducing your fees. Here’s how we can show you to increased transparency. And for a lot of people increase income and time. Helping people retire years before they thought they could. It’s a remarkable conversation to have. If you are 55 years or older and have at least 300 thousand of assets saved up for retirement, regardless if you’re retired or not, the time is now. Take me up on this offer 833-707-3030. That’s 833-707-3030. When you call in, they’ll gather your information. So, on Monday we can reach out to you and schedule a time with limited availability in our calendars here.
MIKE: But it’s worth it to enable yourself to have this kind of effective change. Especially for an extra 200 plus thousand. For a lot of people, it’s even more than that. It’s quite remarkable folks. Take me up on the offer. 833-707-3030. $2000 value at no cost to you. You can call now and we’ll schedule on Monday when we can get back to you when the office is open. But folks, when it comes down to it these are conversations we should be having. We should be having open discussions about what’s in your best interest and then show the transparency, may it out, be deliberate with the investments and not just wing it.
MIKE: If you’re a budgeter kind of person, if you’re someone that likes to manage or direct the success of your life, this is for you. I hope you call me 833-707-3030. Again that’s 833-707-3030. Or go on Decker Retirement Planning dot com. When you go on there on the bottom you can click, “Get Started,” and sign up there. Especially for all of you driving right now, you can stay off your phone. That’s okay. You can always sign up on the website at Decker Retirement Planning dot com.
MIKE: We’re going to take a brief break here, a real quick break. But when we come back, I’m going to talk about a person that five years before their retirement they started planning and the incredible success that it brought them. Stay tuned.
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MIKE: When people retire, they’ve accumulated assets in their 20, 30s and 40s, the accumulation phase. So that they can retire in their 60s. One of the most important things in their retirement is to know how much they can draw though for the rest of their lives. I think we can all get behind that. Now it’s easy if the person has a pension. Because well that amount comes in each other. It’s easy if they have a good amount of Social Security. That also comes in each month. And it’s easier if they even have rental real estate.
MIKE: But most people don’t have all that. Most people have Social Security and their investment portfolio from around 300 thousand to several millions of dollars. But the question still remains, how much money can I draw for the rest of my life? Fair question, wouldn’t you say? Most of the industry though uses a distribution strategy called the four percent rule. And I want to address this here before we dive into the story. The four percent rule, in my opinion, the most dangerous, destructive retirement planning strategy out there.
MIKE: Let me explain why. The background on the four percent rule goes like this, stocks in the last hundred years they’ve averaged around eight, eight and a half percent. Which is true. Now bonds have averaged around four to four and a half percent since 1980. Which is also true. So, the idea is, the theory stems from, let’s just be very conservative and round down to four percent. We should be able to draw four percent from the portfolio for the rest of your life.
MIKE: And you should be fine. The problem with this strategy is that it works beautifully in a bull market. Which we’ve had for the last 10 some years. Which has been incredibly. It works beautiful in a bull market. But folks, when markets go flat or down the game changes. A bear market very well could destroy your whole retirement. Let me give you an example. Okay, if you retire with a million dollars in 2000, the good news is you’ve retired.
MIKE: It’s a time for celebration. But the bad news is, 2000, 2001 and 2002 there was a 50 percent drop in the market. So, the equity portion of your portfolio took a 50 percent hit. But for you, taking four percent each year, you took four percent, four percent, four percent. You’re down 62 percent going into 2003. Now the good news is the market did double from 2003 to 2007. But the bad news is, you didn’t get all that because you’re drawing four percent in 2003, four percent in 2004, 2005, 2006, 2007. Four percent each year. And then the market takes another hit.
MIKE: From October 2007 to March of 2009. That’s another 50 percent hit. And now when you’re drawing four percent on top of that, you are finished. You can no longer stay retired. And proof of what I’m saying is when in 2009 we saw the gray-haired folks going back to work, moving in with the kids, going to their plan B and plan C. They showed up because they had to. The four percent rule destroyed their retirement. And the guy who invented it, William Bengen, came out in an interview in 2009 he said, “The four percent rule doesn’t work when interest rates are this low.”
MIKE: And he called it dangerous. And he said he doesn’t use it anymore. We believe that in 2009 the four percent should have died at that point. We should have all learned our lesson. When I say, “We,” I’m speaking collectively for the financial professionals out there that are still using it. But sadly, tragically most financial professionals are still using this rule today. Even though it’s been publicly discredited.
MIKE: Why am I telling you this right now? Well especially for the folks that are nearing retirement, having all your assets at risk you can’t just flip a switch and say, “All right, I’m drawing four percent from there. And I can keep my pie chart guesser for life.” If you’re currently retired and using the pie chat guesser, if you’re playing retirement roulette, folks, this is what can happen if the market do roll over. And they have a history of doing so.
MIKE: I want to tell you a story about an individual, actually a couple that come in years ago. They had learned their lesson. They realized okay, principle one, never draw income from a fluctuating account. If you want to Google more about this you are more than welcome to. I encourage the education. You can look up sequence of return risk. That’s what it’s called. At least the technical jargon. But this couple they were years away from retirement. They took too big of a hit in 2008 and they said enough is enough. And they started talking with us. And it was a wonderful conversation.
MIKE: Because they’re about five years away from their retirement. And here’s what we did. We said, “Great, how much do you need to earn in your retirement to be happy?” And they said, “We want 12 thousand dollars net of taxes.” And we, “Okay, well we don’t know exactly what the tax rates will be in the future. But we can take roughly today’s tax rates, do an effective tax rate and get pretty close.” We’re not CPAs. But we can get pretty close. We said, “Okay, in five years you can get there if you can also save 30 thousand dollars a year each year.”
MIKE: And they said, “Perfect, I’m going to retire at 60. I’m going to retire on time.” Setup their plan. And we helped diversify their assets with principal guaranteed accounts. So that for the first few years of their retirement when they retire, they are set. They are good to go. They’re drawing income, this is principle number two, diversifying by purpose. They started putting in early assets into principal guaranteed accounts with the deliberate purpose that in five years we’re going to start income for the next five years.
MIKE: And that in 10 years, so we’re five years into their retirement, they’re going to draw income from that account for the next five years. Deliberate purpose and direction in their retirement. The beauty of it is these accounts still have done really well. The bull market, they’ve been able to enjoy their retirement. Or seen their assets grow with the different things that are happening in the market. And if president Trump has a trade war and the markets freak out it’s okay. Because they set themselves up. If it goes down it’s okay. Their income when they enter retirement is taken care of. Now their risk, which is another conversation we’ll have for another time. But they are using two sided models that are designed to make money in up or down markets.
MIKE: Which is also great. It lowers the risk they have as opposed to the buy and hold strategy. Which many people are using. There’s a better way out there. And you can learn more about that at Decker Retirement Planning dot com. But the point of this story, they built themselves retirement early. And so regardless of if the markets did crash seven or eight years after the last crash or not, if we’re going into extra innings of a bull market, they were setup to win either way.
MIKE: That is profound. They were setup to win either way. Why do we need to choose sides? There’s a silver lining here folks. That’s really what stems with the principle number two, diversify by purpose. Now sure if you’re in your 20s or 30s it probably doesn’t make sense to have these kinds of investments. But if you’re mid-50s within five years of retirement or currently retired and you’re not diversifying by purpose you could be putting yourself into a much riskier situation than you realize.
MIKE: And this typically happens because the default to familiar space. But I digress. The beautiful part about it is, and I’ll just use three years after they had invested in their plan, they had earned more than the projected amount that we had accounted for their plan. We optimized and changed their Social Security a little bit as well. And they decided, “You know, we want to leave a little bit more to legacy for our children.” So, we tweaked the plan a little bit. They said, “Look, we’ve paid off the house. We don’t want to go on this, that and the other. We only actually need 10 thousand net of month.”
MIKE: “We want a little bit more. But we really, really want to leave to our kids.” Life changed. So, they’re setup to leave 4.8 million dollars or so to their kid when they retire. Now they have 2.9 roughly right now of assets. They’re going to draw 10k plus. They have their Social Security. Everything’s optimized. And they’re going to leave a ton of money to their beneficiaries. Because that’s what became important to them. The beauty of starting to plan early is that you can diversify by purpose not just by a risk.
MIKE: And with principle number three, using a distribution plan. Not some pie chart guesser. You still have the flexibility to make the adjustments for when life changes. It makes no sense to lock up your assets into something that may be a devastating and not be able to fulfill your needs later on. These are found with privately, non-tradeable reits. These are found with income annuities. I don’t feel like they can properly be flexible enough for the ever-changing needs that retirees face.
MIKE: Folks, if this sounds like something you like to have a plan but have the flexibility of happening a plan. To be able to set yourself up for if the markets do roll over that you’re set. And if the markets continue to go up, you’re still enjoying the benefits there. If this sounds like something that you would like let me extend the last offer for the day the Decker 30 review. A $2000 value at no cost to you. We’re going to extend it today for the next 10 callers. If you are 55 years or older then you can call in. We’ll give at no cost to you.
MIKE: We’re going to be able to show you your own distribution plan. Your unique situation. We’re going to show you what diversification by purpose looks like as opposed to the pie chart guesser. We’re going to be able to show you how much, answering the biggest question, how much you can take from retirement for as long as you live. And then have the conversation, can you live off of that? For most people they’re realizing they can retire early. And it’s just math based, principle-based discussions. We’re neutral to this. We just want to show you the reality and then let you as a grown adult, who has years of experience in making good choices, because you’ve gotten to this point, that you then can articulate how you want your story to roll out.
MIKE: That is powerful. Call us 833-707-3030. If you want to take me up on this 2000 dollar offer at no cost to you, 833-707-3030. Phone lines are open for the next 10 callers. When you call in, they’ll gather your information. So then on Monday we’ll reach out and schedule a time with our limited calendar availability. But we can still schedule either a 30-minute phone call or a 90-minute deep dive in person. Whichever you’d prefer. But this $2000 offer is a life changing experience for many. And I want to invite you personally to be able to partake in the joy that can come from this meeting.
MIKE: Tears are shed. People thank God that they’ve seen this. Because they knew in their gut the pie chart guesser just wasn’t right. And this they can feel it in their bones. They see math based, principle based just makes sense to gain the confidence to enter and stay in retirement. That’s 833-707-3030. 833-707-3030. Or you can go to Decker Retirement Planning dot com. And on the very bottom, “Get started,” you can click that button and sign up that way.
MIKE: Especially for all you driving in the car. Let’s stay safe out there. Focus on the road. And later tonight or this afternoon you can go in and you can still sign up that way at Decker Retirement Planning dot com. We’re going to take a really quick break. And then I got some fun closing remarks for you. Stay tuned.
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MIKE: In closing folks, I just want to wrap things up with again the baseball analogy. Are we in the ninth inning in this bull market? Are we going to go into extra innings before things change up? No one will ever know. No Monte Carlo simulation can really address black swan events. Which may happen. And we see that. We’re talking with China, we’re talking with North Korea. Things are happening overseas. Your retirement shouldn’t be at the mercy of what other people do. It should be within your power to mitigate that.
MIKE: And that really comes down to a math based, principle-based approach. When it comes down to retirement, when it comes down to what’s most important to you let’s agree that time is the most precious commodity that you have. And to be able to support your current lifestyle you got to be able to have this kind of transparency. You have to be able to have this kind of, gosh, you got to be able to put in the elbow grease.
MIKE: Or at least find someone that’s willing to do it for you to be able to see what your retirement really looks like. For most people that come into our office we’ve been able to help them, if they’re not retired, retire earlier than they expected. Five years even. Which is incredible. For some people who thought they could never retire it’s an incredible conversation to say, “Not only can you retire soon. You can retire today if you choose too.” It’s an incredible conversation to have with folks that can see that if the markets tank, regardless for the next 20 years, their income is setup for success.
MIKE: These are beautiful things that come from a safer retirement. We put a lot of information up on our website, Decker Retirement Planning dot com. And I would love to encourage you to go on the site when you’re done driving, when you’re done with your appointments for the day. Or if you’re listening to us at home in your podcast go to Decker Retirement Planning dot com and look at the education, the books we have. We’ve got eBooks that illustrate and explain the principles that govern proper retirement planning, that talk about Social Security in a way that I bet you’ve never actually looked at that enables you to have extra 10s if not 100s of thousands of dollars in your retirement.
MIKE: These are tools that were made by us because we were tired if any financial professionals having these conversations. We developed a safer distribution plan because we got tired of people using and getting burned on the pie chart guesser, the four percent rule, the disaster maker is what I would call it. When it comes down to it folks this is about you. It’s enabling you. I know a lot of you have been listening to this show for some time. And it’s just about time, when you feel like you want to come in. All I hope is that when you come in that you can feel comfortable knowing that we are pure bred fiduciaries, neutral.
MIKE: We are required by law to do what’s in your best interest. And all we care about, if there’s any agenda, it is to empower you and enable you to have the knowledge you need to make the right decisions for you. If you saved up enough for retirement, if you’ve invested smart and you’ve got the assets to be able to retire, you’re a pretty smart cookie, okay. So why do you need to have someone tell you exactly what to do when you could have someone that educates you and guides you through what you should do. But you’re still in the command seat. That’s how it should be.
MIKE: And if that sounds like something you’d like to do, have transparency, be able to engineer and build your retirement. I hope that when you do call, when you do visit our website at Decker Retirement Planning dot com that you can feel comfortable that there’s no pressure, that you can get the knowledge to get the information that you need to make the right decisions because that’s what matters most. It’s your family. It’s your time. It’s your story. And that’s all I really want to say in closing for today. I really appreciate the show. As always tune in every week. Same time, same place. I’m Mike Decker from Decker Retirement Planning and this Safer Retirement Radio, where you get the transparency that you deserve.
