MIKE: Welcome everyone to Retirement Radio, where you get the transparency that you deserve. I’m your host, Mike Decker from Decker Retirement Planning, home of a safer retirement. Folks, if this is your first time tuning in, let me just introduce to you a new way that we’re talking in finance about retirement. See, we are a math based, principle based firm. And this show, it used to be talking about, “Oh, this is what the markets are doing and this is the interpretation, this that and the other,” and just the feedback we got, you want to know how to plan for retirement and the fundamental purpose of this show is to give you not only the transparency that you deserve but also to enable you to make the right decisions, to ask the right questions.
MIKE: Whether you work with me or some guy that’s on the radio, or you work with your local financial advisor, the purpose here is that you can see how the decisions that you are making, the types of plans that you’re putting together, how they can affect your retirement. These are meant to be some of the best years of your life. So, let’s set it up that way and have a great time. I’m gonna share with you three stories today of planning processes where some of these families, they had a way that, a plan that they thought was good.
MIKE: And then, as time came on, they kind of realized, “Okay, well, no there’s this error, there’s that error,” and they had this gut feeling. And so, they ended up coming and we went over the three principles that govern proper retirement planning with them. On top of that, then we stress test and really kicked the tires around their plan and were able to uncover some gaping holes and help set up their plan to be just, uh, just incredible, such a plan that mathematically, quantitatively speaking, they’re set up for success.
MIKE: They’re set up to be able to sail through market crashes unaffected should it go down and they’re also set up to be able to enjoy the most important years of their life and leave a legacy not only financially speaking, but a legacy of great memories with their friends and family. If that’s something you’re interested, stay tuned. We’re gonna go over in detail here on Retirement Radio. As always, if you can’t catch the whole show in one, catch it all later.
MIKE: You can go to deckerretirementplanning.com as we post these shows transcripts and all, and/or, you can listen to the audio recording if you enjoy my voice well enough. But, [LAUGH], also you can get a lot of other articles and do a deep dive with the content we post on our website and deckerretirementplanning.com. Now, throughout the show I’m going to offer the Decker 30 Challenge. The Decker 30 Challenge, just to set the premise is we believe in 30 minutes we can show you a safer 30 plus years in your life for your retirement. Just 30 minutes. And we challenge people to spend a more important 30 minutes of their week this week.
MIKE: If when I go through everything that you’re saying, “Gosh, you know, this is something I want to get double checked. I want to review. Let’s kick the tires together.” We are purebred fiduciaries. We’re legally bound to do what’s in your best interest. And so, in a very neutral, non-threatening way, it’s a wonderful time either to over the phone, at your comfort level, or in person, if you want to do a 90 minute deep dive, that’s up to you on what you want to do. We are shedding the light on hundreds of Americans in our different offices on how to enable to enjoy a safer retirement.
MIKE: It’s quite remarkable. And so, I invite you there. The number that we’ll be giving out, it’s 833-707-3030. Listen for that call. We’ll open the phone lines and we’ll want to invite you in. You must have at least 300,000 of assets saved up for retirement because we’re here to quantify your assets, so you’ve gotta have something for us to quantify. If we can add value we want to add value. And then, we also ask that you’re either currently retired or within five years of your goal of retirement. We’re not accumulation specialists. Sure, we have a background. We have training in accumulation, but we focus our practice solely on distribution.
MIKE: And that’s what we’re gonna focus on today’s show on Retirement Radio. Let’s dive right in. So, the first story here is for a single individual who was 77 years old and only 350,000 of assets. I say only 350,000 of assets, that’s, I want to be very clear, folks. How much you have is less relevant as to what you need. Some people just don’t want or don’t need a lot and some people do. So, wealth in retirement is relative to your needs in comparison to your assets that you have.
MIKE: And it’s a wonderful thing because some people are ecstatic and they have less assets, but they’re ecstatic because their needs are covered, their wants are covered and they’re gonna fulfill some of their dreams. For others, they just want so much more money they can handle. And either way it’s a win situation, but for this client 350,000 of assets, was currently retired and just had this knot in their stomach. She there, his original plan was pension with social security, not bad. Pensions are good. It was a self made pension through an annuity that his HR department had convinced him to purchase.
MIKE: Now, income annuities, we’re not super excited about. Okay? And we’ll talk about that later on in the show, but it already had happened, so we wanted to include it with the plan and plan around it. Once you turn on an income annuity, I have yet to find a situation that you would want to make an adjustment. It just doesn’t happen. But, pension, self made pension, social security that was, he was already taking, obviously, at 77 years old, and had 350,000 of assets and just didn’t know what to do with them. He had them at risk.
MIKE: He was using the accumulation models, a pie chart, diversification, investing in small cap, mid cap, large cap, edging more into bond funds and bonds to be a little safer with the portfolio he got, following the rule of 100 and his assets were still in accumulation mode and it bothered him. He knew inside that he couldn’t take another 2008 hit and with the Trump trade war that’s happening, with speculation running among Wall Street, he just could not bear his 350,000 to all be at risk.
MIKE: He wasn’t really taking much income because he was scared. And folks, if there’s two things you can walk away from this show, the first one is ignorance is not bliss. We want to know what’s going on and we want to have a plan. We don’t want to live in ignorance because when crap hits the fan, that’s when lifestyles have to change and let’s try and avoid that. But, the second thing is, retirement is not meant to be lived in fear and I want to help you get out of that if you are currently in that situation. If you’re scared about your retirement, if you can retire, if you can stay retired what I’m about to tell you is critical, so listen up.
MIKE: What we did is we first had to just figure out, let’s run the numbers, could he stay retired or would he have to have a part time job? Very neutral, just what is, the state of being, what is with his retirement? We ran the numbers, with social security, his self made pension and his 350,000 of assets, totaled it all up and we used a safer distribution plan. These are algorithms we developed to put it on a spread sheet so we can mathematically see down to the month net of tax how much he could spend for the rest of his life, pretty cool.
MIKE: And we were able to show him net monthly how much he could spend right now ‘til age 100. And folks, if you could see the sigh of relief that just encompassed his body. It was a life changing conversation because now in front of him he could, “Not only can I enjoy my retirement a little bit more, but I have a plan that took the guessing game out and showed me what to expect for the next 20-30 years.” That is remarkable.
MIKE: We were able to increase his annual retirement enjoyment by 10,000 dollars. We were able to incorporate different strategies should there be pension risk. Pension risk is a very real thing, with, especially corporate bonds right now being at all time highs. The covenants are terrible. You know? And it, all of it, depending on the company, right? I don’t think Boeing is, with the 737 Max issues and things like that, I don’t think Boeing’s going under, right? But, if you worked for a small employer, employment or small business, you know, or things like that, these are things that should be addressed.
MIKE: I mean, for goodness sakes, Pam Am, what happened there? They were a credible big company. It’s not instill fear into your plan. It’s just to have a backup plan should the worst happen, and that’s a beautiful thing. So, we incorporated all that, gave him a backup plan, several backup plans and gave him a plan that he could rely on, that was built to survive whatever may happen. And the cool part about this folks, listen up, for the next 25 years he mapped out his income following our principle number two.
MIKE: Make sure to use all three investment classes, principle guaranteed, emergency cash and risk assets appropriately within your plan. He was able to set it up so if the markets do tank because of an unsuccessful trade war or a black swan event happens, or whatever may happen that causes the markets to tank 30-40 percent or whatever it is, this person has a plan built to sail through it unaffected. He won’t even have to change his travel plans. Can you say that about your plan? That’s not to say who’s better here. See, there’s different paths. We all have the same goal.
MIKE: We want you to enjoy a safer retirement. We want you to enjoy your plans and it’s a marvelous thing. And with this plan we are able to quantify that and show someone, who didn’t have a lot of financial background, down to the month net of tax how much he could spend and set expectations right and it was just incredible. We had a few more visits, tighten a few things up here and it was just such a delightful conversation to end with him knowing, “This is what to expect in retirement and this is now how I can live my life.”
MIKE: Then, and I say this all the time, but [LAUGH] once we get to that point the conversation changes because now we’re talking about, “Okay, you’ve got time. You’ve got money. What do you want to do in your retirement? What do you want to do with your spare time?” And it’s a fun time. It’s a fun conversation to say, “Oh, I want to travel here. I want to spend more time with this family there.” Or whatever it may be. “I’ve always wanted to pick up this new hobby, but I was a little bit nervous about it. But, now I know I can afford it.” My wife, gosh bless her soul, from Kansas, she wants to learn how to restore old cars for fun.
MIKE: Not something we’ve talked about. That could be a new hobby. We have no experience in that, but that could be a cool, fun, fulfilling hobby that we learn in our retirement. Things like this, these are great conversations. And just to kind of recap here, the principle, those three principles that govern proper retirement planning, one, never draw income from a fluctuating account. Number two, plan with a distribution plan, and number three, use all three investment classes, with that investment triangle, so you’re not getting pushed a product you’re talking about a whole retirement plan. In this one in particular, the biggest issue with the fear that he had that was resolved was helped or resolved by using a distribution plan.
MIKE: Now, for us, that’s called a safer distribution plan and it’s remarkable. If you want to see down to the month net of tax how much you can spend for the rest of your life throughout retirement, with your current portfolio, give me a call. I’m gonna open the phone lines for the next 10 minutes to be able to take these calls. Call right now and we will do this at no cost to you. Must be 55 years or older and have at least 300,000 of investable assets, or, I should say, assets saved up for retirement, whether they’re stuck in your 401(k) or not. We’re here to help you see transparently and clearly how your retirement should be, set expectations correctly and enable you to have the power to build a plan for the vacations that you want, to be able to plan for the life that you’ve always ho
MIKE: Let’s do it right now. Call me, 8333-707-3030. When you call in they’re gonna gather some basic information so then the most local manager can reach out to you and then schedule your 30 minute call, 30 minutes for a safer 30 plus years of retirement. Or, if you’re a very detailed person, it’s a little bit of a shout out to all my Boeing engineers up in Washington, as well as many other financiers that seem to come over well to us in their retirement. If you’re a numbers person and really want to dive into the details, if you’re someone that likes to budget and you want to know where your cash is going in your budget, this is something that you’re gonna love.
MIKE: Call us at no cost to you. We can do a 90 minute even, no cost to you visit in person and really dive into the details, up to you at your comfort level. We’re just here to help you enjoy a safer retirement. Call 833-707-3030 now and enjoy a safer retirement. 30 minutes for a safer 30 plus years. What’s to lose? It’s no cost to you, 833-7070-303. We’re gonna deviate from our stories. We’ve got two more stories coming up here. We were just talking about the, if you don’t know what to do, you should continue, or should you continue to not do anything about it or do something?
MIKE: This person did something and it changed his life. I want to talk about the, “Let’s retire before hand” kind of situation. “Let’s retire years before we thought.” That’s our next story here. And then the last one is a very in-depth conversation about when you’re planning. Let’s look at a pension versus lump sum comparison. Most people will default one or the other and honestly, it’s kind of like sixes. Sometimes it might make sense to take that lump sum. Sometimes it might make sense to take the pension. Can you quantify that? We’re gonna talk about that here.
MIKE: Let’s take our quick side here on fun retirement tips that keep you safer, keep you healthier. Let’s talk about, I love this here, I’m gonna do just a couple here now, then a couple a little bit later in the show. But, did you know that ages 65-74 are the best years for happy retirement? See, studies show that we are the happiest and most content between the ages of 65 and 74. Isn’t that remarkable? Kind of a fun fact, right? But, if any of you are in your early 60’s and you’re expecting to work ‘til 70 and then retire, the reason why I want to bring that up is I hope you call me and let’s run the numbers and see if you could retire at 65.
MIKE: During your happiest years of your life you should not be, if possible, in an office doing something you may not want to do. Let’s take the happiest years of your life and enable to go wherever you want and do whatever you want. That sounds much more fun. Retirement is a new beginning. This is another fun point to point out here. Nine out of 10 baby boomers see retirement as an opportunity for a new beginning. It’s not the end of all things. Sure, there’s a new identity that you’ll probably start to create and some adjustments that are made and change can be difficult. But, it is a new beginning for some of the most happy and fulfilling years of your life.
MIKE: If you’re worried about your finances with your new beginning and that’s what’s keeping you, call us, please. Ignorance is not bliss and this is a beautiful moment to where we can show you as it is, mathematically speaking, set expectations and let you decide at that point. It’s quite liberating. Call us, 833-707-3030 for that. Last little point here I just want to talk about is leisure after retirement is different than leisure before retirement. If you think once you retire you’re gonna sit around all day chances are you may not know enough about all the wonderful things you could do in retirement.
MIKE: There are two kinds of leisure in retirement, but actually, let me back up real quick. When it comes to retirement, before retirement, let’s just clarify. Leisure time is about rest and relaxation. In retirement it’s more about engagement and connection with people and activity. In retirement there’s two kinds of leisure that you’re gonna find. It’s the everyday leisure that you’re gonna do that keeps you healthy, keeps you relaxed, but you’re connecting, you’re still engaged. And then there’s those special occasions, like the one or two trips you do each year and things of that matter. It’s a wonderful time, folks. Retirement is a wonderful time and it’s just so exciting for all those that are coming in to plan for us for a safer retirement.
MIKE: Those are the people that want to enable themselves to get more out of life, that know the happiest years are yet to come and they want to take full advantage of that. If that’s you call me, 833-707-303. No cost to you for a 30 minute phone call or a 90 minute in person deep dive, whatever you’re more comfortable with, but we’ll dive into the details and show you mathematically, principle based what your retirement looks like right now. Must be 55 years or older and have at least 300-000 of assets to qualify for this, but we would love to have that conversation with you as purebred fiduciaries, people bound to do what’s in your best interest. 833-707-3030, call now.
MIKE: Let’s talk about our second story, shall we? Second story here, this one was quite remarkable. Now, it kind of, it’s similar to the last story that I was sharing about the importance of a distribution plan. That kind of clarity you get from distribution planning, the pie chart just can’t do it. So, keep that in mind as I’m talking through this, folks. A pie chart keeps you guessing, a distribution plan shows you what’s really going on. This couple, 64-60 years old, okay? Had assets of 1.5 million dollars and they wanted to retire in five years.
MIKE: Keep this in mind. They moved it up after they saw the numbers. Would you do that? If you could retire earlier would you want to move up your retirement date? They did. Their original plan, they had pension, rental real estate and they only pulled the assets as needed even though they weren’t currently retired. But, that was their plan. They were just gonna live off the pension, off the rental real estate and they would pull assets as needed. They hadn’t experienced it yet because they hadn’t been in retirement. Check out what happened. Their first plan, quite remarkable.
MIKE: Their first plan, we dove into, “Okay, five years gross wages, what was going on there?” We optimized their social security. We calculated their rental income. They said, “You know, gosh, we love rental income. It’s been phenomenal. But at some point in the near future, within the next four years we want to get out of it and we’re gonna start selling our rental homes because we just don’t want to manage it and we don’t want to pay another party to manage them as well, just wanted to be out of the whole game. Now, let’s pause right here for a moment. If you have rental real estate as a part of your portfolio and you want to keep it you should absolutely keep it.
MIKE: What financial advisor would tell you that? Not many. Next to none. But, as a fiduciary, we’re legally bound to do what’s in your best interest and what you want to do is what you should do. If you want to know what’s best for you, let’s quantify it. What’s your return on investment with your rental real estate and what’s your return on investment for if you sold it? Quantify it and then from there let’s talk about the hours that it takes to manage it, if you want to manage it yourself, or the cost of someone else manage it. Open conversation. We’re indifferent as to what you want as long as it’s what you want.
MIKE: So, we showed it on there. They had come in and said, “This is something we already know we want to get out of” and so, we calculated their rental income for the first three years of their plan and they’re slowly getting out of it. We totaled it all up and we showed how much they could get net of taxes monthly, down to the month, net of tax, how much they could spend for the rest of their life, quite remarkable. And it was just as simple as it was quantitative. It was math based. After a 90 minute deep dive with them they said, “Gosh, this is good. Let’s make a few tweaks here. We didn’t tell you everything.” Which is common.
MIKE: Folks, let’s say it as it is. For all those that call in, we fully expect, though you want to come and you want to get the numbers, you want the transparency, it’s very normal to be a little bit nervous, to hold back a little bit. Okay? I’m not saying you should. If you hold back from a doctor on all your symptoms they’re not gonna give you the most accurate information. But, if that’s what it takes to get you to a doctor, great. If that’s what it takes you to talk to a purebred fiduciary, then absolutely do it. The bottom line is that you’re getting the transparency that you deserve.
MIKE: I don’t know why, but there was a pension that they didn’t tell us about. We showed the pension, come to find out, I believe it was, and this is my interpretation, my belief, it’s because they wanted it. They knew it would be a part of the plan and they were scared that we would tell them, “you should just take the lump sum.” But, they realized we’re a math based, principle based firm. They numbers just show it as it is. So, we added that in there, the pension, with the 100 percent survivability, which was remarkable. They set things up right. We made a few adjustments on the income, their principle guaranteed income. We optimized it a little bit more and we were able to get them significantly more money, which was great. People like more money. People like a lot more money.
MIKE: But, it doesn’t stop there. See, the, folks, any financial professional, in my opinion, that wants to plan your retirement in two or three meetings is not doing you a favor. They’re doing you a disservice. There is no way, in my opinion that you can plan for a proper retirement in one, two or three meetings. There are too many questions that have to be asked. There are too many points that need to be addressed. There’s too many risk factors that need to be accounted for and you’re either doing one of two things. It’s a gross over simplification of a proper retirement plan, which puts you at unknown risk, or there’s blind trust on the person that you probably just met and is that worth it to you?
MIKE: For me, I trust the people I work with, but I think it’s totally fine and appropriate to trust, but verify. And that’s what we invite you to do. So, we quantified it all and then we moved onto the next meeting right here. They came back in for a visit and this was fun. The plan looked great. They were comfortable with it. It quantified and got them exactly what they were looking for. And then we started saying, “Okay, let’s talk about long term care.” Now folks, we can sell long term care. We have never actually sold long term care. Why? If you need it, chances are you can’t afford it and if you can afford it, chances are you don’t need it.
MIKE: So, we had those discussions with them, “Here are your options. Here’s what you want to do.” They wanted to self insure, which made sense for them and their estate and how all that was working out. And then we also talked about their parents’ estate and they anticipate a little bit of an inheritance lump sum as well in 10 years or so. Now, it should be sooner, but we want to be conservative about that and we incorporated that. Again, we want to be math based and dive into the details, the nitty gritty here, on what your plan looks like. Now, once you set it you don’t forget it. These are plans that you want to maintain every single year.
MIKE: Just like you get your oil changed every few months, that’s what you want to do with your plan, but let’s set it up for success and have a full scope on it. Let’s talk about social security. What’s interesting, folks, and if you haven’t filed for social security, listen up because what I’m about to tell you could make a difference of 10’s if not 100’s of 1,000’s of dollars in your retirement. And what I’m about to tell you, I don’t believe, I have yet to hear another financial professional even mention this and it is absolutely critical for you to hear it.
MIKE: They started to realize they could retire earlier. So, guess what? They bumped up the gross wages, or not bumped up their gross wages, they bumped up their retirement date a few years and then we wanted to look at social security with this change as well. And what’s interesting, their idea was they wanted to file for social security around the time that they were gonna retire because that’s just kind of what was ingrained in them by other blogs and articles and things they had read online. And they said, “Okay, well, we’re gonna bump it up. We want to look at our social security as well.”
MIKE: And so, we quantified it. Now, we have proprietary algorithms that quantify your social security within our safer distribution plan software. But, what’s interesting about social security, and this is what no one else, to my knowledge, is talking about. Most people say, “Get the most out of it as you can possible. File for 70 and every person and maximize your benefit.” That’s one option. And that’s a good option. But, what if you filed at 68 or 69 or 67, full retirement age, whichever one that would be for you, what about 62?
MIKE: What’s your longevity? What’s your health look like? Are we accounting all of those? See, what I think is interesting is, and I’m gonna say this twice, so listen up. If you file, in social security, if you file too early your income is hurting, but if you file too late you’re hurting your estate. Let me say that again. If you file too early your income is hurting, if you file too late you’re hurting your estate. What do I mean by that? Because they are filing their social security at 62 they were more concerned about their estate. So, because they wanted to change that their estate was significantly higher, as in 20 years out, it was about a million higher than what they were projecting.
MIKE: Now, their income did go down a little bit, and how does this happen? It’s math. It’s really hard to explain over the radio, so I’d invite you to come in and we can show you the difference here, run the numbers and explain it to you. But, they wanted their social security to be, for the gentleman, to be at 66, his full retirement age and then hers to be at 62. They wanted to lessen the burden of their income from their assets from a mathematical standpoint and let their estate be just bigger because they wanted to pass it onto their kids.
MIKE: And they already were past the mark that they needed for their line of maintaining their lifestyle. They had already surpassed that. And so, they said, “Great, we can get what we want and then some. Let’s make sure that we can pass on the most amount to our kids because we don’t know when we’re gonna die.” If they do end up passing within 10 years or so, that one decision, and I’m trying to compare the plans here right now, as I’m looking at them, that one decision gave their kids an extra 800,000 dollars. Later on in the plan the number got bigger.
MIKE: If you could give an extra 800,000 dollars to your kids would you, just by changing your social security, if you were to pass 10 years after your retirement? These are the conversations that we’re having at Decker Retirement Planning that most financial professionals are not. Most financial professionals are viewing social security as a value ad to get you in the door and then they sell you a product. Remember that? We talked about that last week. If they’re gonna talk to you about one of the three investment classes, and that’s the principle guaranteed with growth, principle guaranteed, but it’s liquid, or liquid with growth.
MIKE: If they’re only gonna talk to you about one, they’re bringing you in with social security and they’re gonna push a product to you and that’s really just not how financial planning should be. Let’s talk about the whole plan. Let’s have conversations like this so we can quantify down to the month net of tax how much you can spend and how that affects your estate. This is your legacy we’re talking about here and I want you to have that kind of transparency so you can decide what’s best for you. We have some people that like to preserve the estate a little bit more. We have some people that want to take all the income possible and they say, “No, I am a self made person. I did it all myself and my kids will do the same thing.”
MIKE: There is no wrong answer here. Everyone’s unique and we should be able to embrace the uniqueness of your plan and what you want out of that. By the way, if you want to have that social security conversation and you’re at 55 years or older and have at least 300,000 of assets so we can quantify your estate with social security call me. Call me right now, 833-707-3030. Happy to have that conversation at no cost to you, either 30 minutes over the phone or at 90 minute deep dive during a visit in person, up to you and your comfort level, but call us. Love to have that conversation. I’ll open the phone lines here for the next few minutes, 833-707-3030.
MIKE: It’s a fun one. It’s a fun one that most of you, I believe all of you, probably have not actually had with a financial professional and it’s just, you know, an 800,000 dollar difference if you have 1.5 million dollars. If you have less it’s typically, like, if you have 50,000 to 700,000 dollars it’s still a six figure conversation. We’re talking 3-400,000 dollars. Is 30 minutes worth 300,000 dollars for your kids? I bet they would say, “Yes.” [LAUGH]
MIKE: As we wrapped up this whole planning process for them, and we were addressing the risk after risk of the plan and then found the back up plans, found the ways that just this plan will get rid of those risks, like sequence of return risk, spousal risk, market risk, market fluctuation, interest rate risk, the list goes on. There’s a whole page of risks that we like to address to make sure that we can help build a plan that can sail through these risks and minimize any sort of effect. And when I say, “Minimize,” if you lose your spouse, that’s tough, but at least financially we can help you carry on.
MIKE: If the markets go down we can help minimize that risk too. That’s what we do. We’re retirement planners. We’re not plan B planners. We’re not accumulation planners. We’re the ones that are gonna help you enjoy a safer retirement. When everything got quantified here, and keep in mind, the whole time we… oh, I did mention this earlier, we quantified the pension and it made sense for her to keep her pension. What financial advisor’s gonna do that, say, “Hey, I know I could get paid probably by increasing your portfolio and what I want to manage here, but I don’t think you should do that. You’re gonna do more help for your plan and your life by keeping your pension?”
MIKE: They kept their pension because it just made sense mathematically speaking, different kind of conversation here. So, the last plan we did with them before they officially became a client, and we had several meetings here. They came in for several visits. We optimized their different buckets on how they were gonna be quantified mathematically speaking to support their needs for, they wanted 25 years of guaranteed income. And when I say, “Guaranteed income,” I am not talking about an income annuity. Let’s be clear, folks. Income annuities are an expensive way to pay an insurance company to get your own money back.
MIKE: I’m talking about anything that’s principle guaranteed. We just mapped it out with one bucket. That’s gonna take care of years one through five. Another bucket was gonna take care of years five to 10. Another bucket that was gonna take care of years 10 to 20. We just laddered them and we found the best rates. We went through all the principle guaranteed options out there, CD’s, bonds, treasuries, equity linked CD. The list goes on. There’s about 12 of them. We went through them all, said the pluses, minuses and they chose what they wanted to have in their plan and then we built it for them.
MIKE: That’s the fantastic part about working with a purebred fiduciary, someone that’s legally bound to do what’s in your best interest. We have to do that. But, we’re gonna educate you like no one else, in my opinion, that I’ve seen at least so far, because you’re smart. If you got to this point of having 1.5 million or 800,000, if you have a retirement saving, you didn’t do it by accident. That was very deliberate in your planning. You’re a smart individual. So, let’s open the curtains and make sure that we see everything clearly and then let you pick. It’s a great thing. And if you want our advice, we’ll let you know what we think is best, but, ultimately it’s your decision here.
MIKE: So, we quantified everything down to the month net of tax, mapped it all out and for the next 20 plus years their income is taken care of. They have a plan. For them, they wanted 40 years of a plan mapped out before they think they’re gonna die, and that’s ‘til age 99. If you think you’re gonna live ‘til age 120 we can do that. If you think you’re gonna live ‘til 80 we can do that. That’s up to you. The bottom line is we can use math and optimize these plans down to the month net of tax and set expectations.
MIKE: See, disappointment comes when expectations are not met. So, let’s get rid of a lot of that disappointment, shall we? Let’s set expectations and use math to guide us through retirement. As always, after a story I want to share the principles that we were talking about here. For them, plan with a distribution plan. Map it out and stop guessing. Now, for them also, they were gonna draw income from a fluctuating account before they came to us. We showed them mathematically how that compromises their retirement, even though they were gonna pull a little bit on an as needed basis, didn’t want to take that risk.
MIKE: We showed them a way to minimize their risk and give them more money, pretty cool, right? Now, on top of that, I really want to hone this in. Use all three investment classes on the investment triangle. Life happens. You’ve got to have emergency cash set aside for whenever it may happen. I know I was so grateful… [SIGHS] not grateful, that’s the wrong word here. I can’t think of the word that I really want to say here, but over the last holiday, Christmas vacation, we had a call from a client who had to pull from their emergency cash and just wanted to let us know.
MIKE: The wife had gone into the hospital. They had funds set aside and it was just nice and smooth, from a financial stand point. They didn’t have to worry about how they were gonna make this happen and they knew that the cash was set aside for these types of situations. So, by pulling the cash they weren’t compromising their long term plan. You’ve gotta have emergency cash and we can quantify what that looks like for you. Everyone’s a little bit different on what that should be. And maybe some discretionary cash as well, for one offs that may happen in the near future. But, it’s gotta be principle guaranteed. It can’t just go away when the markets go down.
MIKE: And it has to be liquid so you’re not fighting any sort of contracts or the crazy illiquid agreements that are in things like REETs, for example. True story, I had a client that came in and 90 plus percent of his assets were in illiquid, privately traded REETs. It took me a year and a half to unfold that disaster and he was happy after that. Thank goodness we were able to do that for him because had an accident happened, he would not have been able to get enough funds out to cover just medical costs.
MIKE: On top of that, never draw income from… or excuse me, principle guaranteed accounts is how you draw income and whatever you want to use for principle guaranteed accounts, that’s up to you. We’re happy to educate you on what they look like and all of them that are out there. Most people know about half of them that are out there because they’ve worked with a sales person, a nice person that’s in the financial industry, but a sales person that only wanted to show what they were able to get paid on when there’s some other products, investments, accounts, fill in the blank, that are available to you that could be paying you a surprisingly nice or better than you were expecting interest rate.
MIKE: And then the last thing is risk. Risk is appropriate for most people’s retirements as long as you have the right time frame of 10-20 years, but you won’t really need it. It is an unrealistic expectation to expect every trade to make sense. It’s also a disaster if you expect buy and hold to be your best option. See, there are things called quantitative, or two-sided models that are designed to make money in up or down markets. When the markets are going up, they’re trending up, they tell you to be in and then when the markets go down they tell you to get out. It’s really that simple.
MIKE: They’re very sophisticated, but the results are very simple. Help participate in the up years we’ll help you protect your assets in the down years. Most people, though, I think it’s surprising, have never actually heard of these types of investments because they’re so used to the operationally easy buy and hold strategy that most of the institutions trot out. And I get why they do it. It’s operationally easy and if you fill out the questionnaire that fulfills your buy and hold strategy you can’t sue them anymore.
MIKE: But, what’s best for you? In my opinion, a two-sided model makes a lot more sense than riding the emotional roller coaster of the stock market, which is absolutely devastating. Use all three investment classes in your retirement. If you’re talking to someone that’s only pushing one, chances are you’re talking to someone that has a sales agenda with you. Use a distribution plan. If you’ve never seen one I hope you call me. I’ll give my number out here in just a second as well. And then, the last, but not least is never draw income from a fluctuating account. It is toxic to a retirement plan and I absolutely mean toxic.
MIKE: We saw that in 2008 when people were drawing income from their accounts that were down and just some still have not recovered. If you want this kind of transparency in your retirement plan, if you’re the type of person that has a budget and likes to know what your money is doing or you like to know what your investments are doing, if you care about your financial health and want to finally see what’s going on I invite you to call me right now so we can help show you a safer retirement. We can show you a better way, a way that minimizes risk, minimizes your fees. We haven’t talked about that, but minimizing your fees significantly, like 80 percent minimization of fees is about standard.
MIKE: On top of that, minimizing your taxes. We haven’t even talked about that. That will be in our next story, talking about tax burden minimization. Increasing your income, increasing your transparency and then the next story too, will talk about this, increasing your time during the most happy years of your life. Call me now. If you are 55 years or older, currently retired or not and have at least 300,000 saved up for retirement this is for you. At no cost to you, either a 30 minute phone call or a 90 minute in-depth dive, up to your comfort level, on the next 30 years. 30 minutes is all it takes for a safer 30 plus years in retirement.
MIKE: Call me, 833-707-3030, that’s 833-707-3030. When you call in they’ll gather your information so that within one business day we’ll call you back. We’ll ask you a few questions. We’ll prepare your plan at your comfort level and then we’ll dive into the details during that scheduled call. And when we call back have your calendar ready because we’re gonna want to be able to schedule that time. Our calendars are busy, but we’re making room for people to call in from the radio because we want to give people the transparency that they deserve.
MIKE: It’s an invitation to enable you to have a more successful retirement. 833-707-3303, call now. Phone lines will be open for the next five minutes as we keep going on the show. We’re gonna take a break from the stories, as I’m gonna bring back the… I’ve got a few more fun tidbits when it comes to retirement and these are great. These are great and hopefully you can enjoy them as we’re breaking up the pace and the stories a little bit.
MIKE: These tidbits are meant to help you enjoy not just the financial happiness, these are meant to help you with mental happiness, the physical happiness, the other aspects that affect your general well being because it, just if you’re financially well off, but you’re sick or sad or whatever may happen, it’s not as good of a retirement. Let’s make it the best retirement possible. We want to help you with that. Let’s talk about when you retire the importance of time, being rich in time makes for a happier retirement.
MIKE: Listen to this, this is a fun statistic. According to this study, retirees have 7.5 hours of free time each day. Among all baby boomers that will add up to 2.5 trillion hours over the next two decades. That’s a party. I almost want to say the Wayne’s World quote, “Party on Wayne.” Then you’d say, “Party on Garth.” But, no it’s having that kind of free time, that kind of down time, it’s not just sitting around. It is active. Our clients are very active and it’s just so fun, so fun to see the most fulfilling times of their life.
MIKE: Some of the most fulfilling times of their life, I should say. There’s some other important ones as well. The next point I want to bring up here is yourself identity changes for a happy retirement. Once you’re done working and you have that kind of freedom it’s a wonderful thing to reinvent yourself however you want. If you’re not yet retired I hope you ask that question when you come in and call for a 30 minute call, or we have a 90 minute deep dive. But, it’s a fun conversation to also reinvent yourself and, if you can prepare for that before it happens it helps alleviate some of the stresses as you transition into your retirement.
MIKE: And the last one here, and this will be a good segue into our last story here, is oddly enough, we aren’t really planning for all the great things we can do in retirement. According to a Merrill Lynch study, they found that only 23 percent of retirees have done some planning for the leisure activities they want to do in the next five years, let alone later on. And two thirds of couples have not discussed what to do or how much money to spend on leisure. Folks, we might need a better plan if that’s where you are and that’s okay if that’s where you are.
MIKE: But like I said, we’re all about enabling you to have this kind of success. Let’s talk about, in this last story here, I want to highlight the importance of time and the preparation on those other activities, because it’s a remarkable thing to be able to retire and to be able to get into kind of a groove of all these fun leisurely activities, find your identity and be able to plan for the vacations that you want. See, if you saw it down to the month net of tax how much you could spend and you knew your budget it’s really easy to start planning for the vacations and the fun things that you want to do.
MIKE: It’s really easy, so why wouldn’t you want to do that? I’m gonna go onto the next story here, but if that’s you call me right now, 833-707-3030. I invite you to come in and get that transparency, 833-707-3030. 30 plus years, or excuse me, 30 minutes for a 30 plus years of a safer retirement, quite remarkable. And, may I say as well, before we dive into this, a lot of financial professionals, again, I don’t want to use fear here. I want to invite you to be, to you know, have the retirement that you’ve hoped and dreamt for your entire life.
MIKE: A lot of financial professionals complain about how people are spending more time on their travel plans this year than their actual retirement plan. I would say, “Shouldn’t it be that way?” If you have the right plan it is that way and that’s what our clients can do and that’s the remarkable thing here. This last story I’m gonna bring to you here, age 59 and 58 years old, this couple, with 2.2 million in assets and their goal was to retire this year. Wanted to do it, they were concerned about taxes. That was a big hold up.
MIKE: This gentleman was a business owner and just how do you sell your business appropriately and minimize your taxes? Now, we all need to pay our taxes. Tax evasion is completely unnecessary and just, it’s just disgusting, frankly. Pensions, the social security, they were set up on everything. It was just this one thing. They needed an exit strategy that was appropriate. Now, we’re not CPAs. We work a lot with CPAs and we have some incredible tactics with the CPAs that we work with to help people in this situation.
MIKE: Now, whether it’s a situation of, okay, you’re trying to sell your business, or, let’s say you have a significant amount of rental real estate and you want an exit strategy with that and you can’t just keep doing 2031’s and, fill in the blank. There are some very critical and strategic plans that you can do to make things happen. So, let’s talk about it. Now, this couple, again, 59 and 58 years old, wanted to retire this year and with them, we just totaled everything up, real simple, like we always do.
MIKE: We totaled it up and optimized their social security. They had four different fixed income streams, pension, two different pensions and their rental real estate as well. And we quantified it all nice and simple and they looked at it and said, “Wow. That’s more income than we actually need. But, let’s keep going, why not?” I mean, if you can get more money and still keep your risk low, why not? From there what we did is we had to make a few adjustments as we were working with their pension and the HR on is there a COLA, is their pension fixed? Things like that.
MIKE: We got some clarification on there and then we started to calculate the additions from the business, which was quite remarkable. From there, then we decided how are we going to spread this out? This is the kind of in-depth planning that we can do for individuals, which is, I, again, people have taken our plans and our solutions to other advisors and said, “Could you redo this?” And they just say, “No,” because they’re unwilling to put in the time. They want to do a one or two meeting close.
MIKE: For us, we want to put in the time and have the conversations with you so we can provide the solutions that make sense to you. We really do take our purebred fiduciary responsibility very seriously. Then, this was remarkable. We then looked at a pension. Keep in mind, we said rental real estate, it makes sense, keep it. But, we’re gonna take a look at this pension and do a comparison.
MIKE: So, we looked at the lump sum versus the pension that would be paid out and what was remarkable, is in this situation, if they took the lump sum, they would get an extra 1,000 dollars every single month for the rest of their life and it equates to an extra million dollars they were gonna receive over their retirement just by taking the lump sum. And their estate was significantly bigger and we’re talking 1.2 million or bigger throughout their years. The first 10 years is one million and after five more years after that, it was 1.2 million and it kept a grow. It was a remarkable eye opening situation. The clients had no idea that this was even possible.
MIKE: But, here’s what’s interesting. Once they saw this they realized, “Okay. We can retire now. As a business owner, I don’t really know if I want to retire right now, though. I think I might want to consult and just take a different approach to how I’m doing it.” So, he elected to actually work a little bit longer. Again, folks, time is of the essence and it’s whatever you want to do. For him it made sense to do this. He was gonna transition out of his responsibilities and still be involved enough, but work a little bit less.
MIKE: We re-adjusted the pensions and how things would look as well as the business and everything in between and mapped it all quantitatively. It was a remarkable situation and their estate, they were focused on the estate for their kids and their kids had no idea. That’s okay. You know? It’s the parents were able to fulfill what they want to do, the legacy that they wanted to give for their kids. And then we had to tighten all the numbers. We tightened the numbers with the selling of the business, the pension versus the lump sum, with any additions from the work and everything in between and we got it down to exactly how they wanted it.
MIKE: And it wasn’t someone agenda or one idea. We took all the different factors that make up a retirement plan, we quantified it, we gave them options and they chose what was best for them. What I think is interesting is, yes, they chose what’s best for them. It’s not what I would personally do. I would spend my time a little bit differently than them and I would structure it a little bit differently than them, but that’s okay. They’re not me and I want to help them just as this planner did for this client, help them live the retirement that they want in the way that they want, in the manner that they want. And isn’t that how it’s supposed to be?
MIKE: And that’s what financial planning should be. That’s what purebred fiduciaries do. Just to put the statistic out there again, Tony Robbins did this massive study about financial professionals that are currently working right now and of all of them that were there, it was said that about 30 percent of them were fiduciaries, or at least claimed to be fiduciaries and that’s nice. That’s promising, especially with the DOL rule that was going out a while back, trying to raise everyone to a fiduciary standpoint, which they’re not, and they still are not. But, 30 percent, okay, that’s pretty good.
MIKE: But, then he did a little bit more digging and he discovered what in the industry we call a “Dual hat disclosure” where you could be a fiduciary sometimes and you could be a salesman sometimes. And we really [SIGHS] it was really disappointing, it really broke up Tony Robbins there, and I’m just using Tony Robbins here because he did this study, and I’m glad he did it. 1.6 percent of all financial professionals are actually purebred fiduciaries who could honestly and fully say they are a fiduciary.
MIKE: How many financial professionals are out there? That’s a very small amount and most of them are really good people. They want to do what’s in your best interest, but have limited capability. They want to do what’s best for you, but they’ve got to get paid. What financial professional’s gonna sell you a no load mutual fund, for example, when they could have the same index and get C share fees and make a little bit money? And you’re still invested the same way you’re just getting fees that they don’t actually have to disclose to you. Again, it’s not about good or bad people.
MIKE: It’s about sales structures and if you’re planning in the office that’s independent, as an RIA, which is fee based and with someone that has a series 65 license that means that you’re working with someone who can’t accept security commissions and is legally bound to do what’s in your best interest. They’ve painted themselves into a corner, but they have to help you out. Isn’t that remarkable? And that’s what we should be doing. That’s what we need to be talking about here. So, for everyone listening right now, if anything I’ve said over the last story, especially, says, “You know, gosh, I want that kind of conversation. I want to be able to dive into the details like this.”
MIKE: “I want to know what my retirement looks like and I’m tired of guessing with a pie chart and hoping it’s gonna work.” I invite you to call me right now, no cost to you. You must be 55 years or older and have at least 300,000 of assets saved up for retirement. This is for you to get the information you want. Ignorance is not bliss and we’re sitting in it and we need to get out of it. Let’s do something about it. Call me right now, 833-707-3030. That’s 833-707-3030.
MIKE: When you call in we’ll gather your information and then from there, on Monday, the next business day, we call you at a time that you would prefer. Have your calendar ready. We’ll ask you a few quick questions so we can run the numbers for you on your custom plan at no cost to you. And then we’ll schedule the 30 minute call, if that’s what you want to do, or a 90 minute in-depth in person visit, whatever is to your comfort level. We want to be neutral here and say just this is what your retirement looks like. How do you feel about that? Is this better than what you were expecting or do we need to make some adjustments here to plan on how to get to where you need to go?
MIKE: See, that’s the beautiful thing. We can be neutral here and help you and it’s a win/win situation. Call us, 833-707-3030. We have office in downtown, one office in downtown San Francisco, which is remarkable, overlooking the bay bridge, three offices in Washington: Seattle, Washington, Kirkland, Washington, or Renton, Washington. We’ve also got an office in Las Vegas, which is great, in the Summerlin [PH] area and then we’ve got two offices in Utah, one in Salt Lake City in the Wells Fargo building and one in Lehi, in our own office there as well.
MIKE: Bottom line, though, we want to give you the transparency that you deserve and enable you to be able to have the retirement that you’ve always wanted. So, let’s make that happen. Call me, 833-707-3030. I’m gonna leave the phone lines open for the next 10 minutes to take me up on this offer at no cost to you. I challenge you, the Decker 30 Challenge, 30 minutes for a safer 30 plus years of retirement. I challenge you to find a safer and/or a better way to spend 30 minutes this week. Call us, 833-707-3030.
MIKE: If Trump’s trade war is making you nervous let’s show you how to get rid of that fear and how you can sail through it if it goes down and if it goes up, how to participate in the outcome. So much we could share with you and we can do it all customized to your needs, 833-707-3030. I’m Mike Decker. This is Retirement Radio. Thanks so much for listening. We’ll talk next week.
Decker Retirement Planning Inc. is a registered investment advisor in the state of Washington. Our investment advisors may not transact business in states unless appropriately registered or excluded or exempted from such registration. We are registered as an investment advisor in WA, ID, UT, CA, NV and TX. We can provide investment advisory services in these states and other states where we are exempted from registration.