MIKE: Folks, June is here. Isn’t it such a great time? I just want to dive right in to talk about how wonderful the time of season is. Kids and grandkids just graduated. The mountain flowers are all out blooming and it’s just the most gorgeous of scenes. And I feel like, this time of the year, it’s kind of like that Goldie Locks situation of seasons. It’s not too hold, it’s not too cold. It’s just right. Before the radio show, I was just golfing actually with a few other friends.
MIKE: And it was so remarkable to just be out there, to be in the sun, to be enjoying the time. And many of you listening right now, you’re probably taking trips or about to take trips. Whether it’s an Alaskan cruise, an African safari, or going back East to see family, it is just wonderful. For all you retirees listening in right now, I hope you can enjoy this time of season. That you really… you’re getting everything out of it. Because it is quite remarkable. Really is. If this is your first time tuning into Retirement Radio, this is a show about building the right retirement for you using the proper…
MIKE: Or the principles that govern proper retirement planning. Now, if you’re just tuning into the show, I want to throw out a few resources here to make sure that this can stick because it is absolutely critical not only to know but to understand and implement. You can always go to our website, Decker Retirement Planning dot com. There’s a number of different resources there for you to be able to use and enjoy. We post our show, this show and all the other shows, via podcast on there so you can listen to it. Or read the transcriptions. The number of articles, this, that, and the other. We also show… or I should say we’re announcing soon… I’ll just announce it right now.
MIKE: We’re going to be having a series of webinars at your convenience. So during your lunch breaks or just during the lunchtime hour, to understand… four different topics. Understanding growth models in retirement, understanding income planning, understanding tax minimization, and understanding social security. That will be coming to you in July. If you want to be able to sign up on those dates, they’re going to be on our website at Decker Retirement Planning dot com. And we’ve also got events. We’ve got events throughout the greater Seattle area, throughout Utah, throughout Las Vegas, throughout San Francisco. Events all throughout the Western United States to help show you what proper retirement planning looks like.
MIKE: Not asking you to replace your advisor. I’m just saying these are principles you need to be aware of, and so whether you work with us or your advisor, to implement them. It feels like we’re at a market top. We’re talking about is the DOW going to hit 30,000 or not. Whether it does or it does not, we plan for the best… or we hope for the best, but plan for the worst. Especially when it comes to retirement and your finances and your lifestyle. I really hope that you take me up on these offers here as we make them readily available. Also you can always call us throughout the radio show. We open up our phone lines. 833-707-3030. It’s something we call the Decker 30 review.
MIKE: This is a review that we believe it only takes 30 minutes to be able to put the lenses of the principles… the lens over your retirement plan and find some very good or very bad aspects of it so you can prepare now as opposed to a reactive fixing of things that is completely unnecessary. And I’ll just throw out there those three principles right now, just so as you hear them throughout the show, that you’ll be able to understand them. We’re talking about principle number one, never, ever, ever draw income from a fluctuating account. That’s any account that can gain or lose principle.
MIKE: The technical term, or the jargon, you could say, is called sequence of return risk. In my opinion it is one of the most deadly, deadly, dangerous parts of retirement planning that keeps people at way more risk than they realize and can destroy people’s retirement. The next one is the… and I’ll just throw it out there. There’s three investment types that should be in your plan. If you’re talking to a professional and he’s only talking about one type of investment, chances are they’re pushing a product or a theory, not a complete retirement plan.
MIKE: Those three types are principle-guaranteed accounts that can grow. That’s where you draw your income from. So emergency cash. These are liquid principle-guaranteed accounts, like a checking or savings account, for when life should happen. And the third one is risk. Yes. Most retirees should have some risk in their portfolio that you don’t need to touch for 10, 15, 20 years because that, according to your suitability, assuming that’s okay, has the greatest growth potential. It’s a balance of all of them, and if you’re going all in one then there’s something lacking in your plan, and it doesn’t make sense to do that.
MIKE: These are signs. If you’re talking about all three different types, you’re working with a purebred fiduciary. And the last bit that’s critical is you’ve got to use a distribution plan. A spreadsheet to map out your income, and not some guessing game pie chart situation that was great for accumulation but can’t tell you how to operate your distributions, your income, in retirement. A pie chart can’t tell you what you should sell, when you should sell it, and how much you should sell it for for your income this year or this month. It just doesn’t work that way, folks. The pie chart is wonderful for accumulation, but when it comes down to retirement planning, you got to have a distribution plan for us.
MIKE: We call that a safer distribution plan. We’ll talk more about that. We’ve got some stories we’re going to be sharing with you today. Um, I just want to share a brief moment with some… I was [INAUDIBLE] actually just last night with my wife. We went to the Parade of Homes here in Utah Valley, which is remarkable. I mean, these are homes that have been engineered. The architecture’s phenomenal. Everything about it just shows customization and detail and thought. And the best part about it is the authenticity of every single home. Now, I’ve got my favorite. Most people have their other favorites, and that’s the beauty of it.
MIKE: We are all unique and we all are different, and every home was built uniquely for that person, their family, and their intentions in whatever stage they were in their life. And it [rains?]… there are some similarities, but most of them were vastly different but so elegant and so beautiful. The reason why I wanted to bring this up, though, on Retirement Radio, folks, it’s because you are unique. Your retirement is going to be unique. And building your custom plan should be unique. Your plan shouldn’t be, “Let’s just take four percent. That seems to be what everyone else is doing and that should work.”
MIKE: Well, everyone else has diversified differently. Has different suitabilities, has different intentions, has different stages. It just… we don’t want to paint such a broad brush on your unique retirement. It doesn’t make sense. Folks, I’m going to throw out there again the Decker 30 Review, here. I want to invite you for 30 minutes, either on the phone or a 90-minute deep dive in person, to come in and look at your plan and then show you what a safer distribution plan could look like. Using the three principles, I can show you what a safer 30 plus years looks like. Call 833-707-3030 right now. Next 10 callers, it’ll be at no cost to you. Must be 55 years or older to qualify.
MIKE: This is for you, folks. A safer 30 plus years, complete transparency at no cost to you. Call 833-707-3030. We’re going to take a real brief break here, but when we come back, I’m going to talk about equal understanding on a retirement plan, so both spouses, regardless of who goes first, they are both set up for success regardless of what happens and what may come.
MIKE: We’ve got such great momentum. I feel like I wasn’t even able to get enough out before that commercial break, but we’re going to keep going here. I’ve got some great stories lined up. As always, this is Retirement Radio, home… or is should say by Decker Retirement Planning, home of a safer retirement. We’ve had a great bull market here, but as a lot of us have noticed… and maybe you have, maybe you haven’t. That’s fine. Markets tend to crash every seven or eight years. So let’s make sure we’re ready to hope for the best, plan for the worst, and enjoy a safer retirement. Now, if you’re just catching this show and you can’t catch the full show, you always go to Decker Retirement Planning dot com.
MIKE: That’s Decker Retirement Planning dot com for this week, previous week’s transcriptions and other articles to help build your retirement. Let’s put it together. I want to talk about, real quick, a story we had. A couple came in months ago and wanted to plan with us. And what I thought was really interesting is… and you may see this in your household, too. One spouse, over the accumulation years, handles the finances. They’re… and I’ve seen this both ways. This isn’t a sexist thing. It seems like half the time, it’s the wife. Half the time, it’s the husband. So that husband and husband, wife, wife…
MIKE: Whatever the situation is, it just seems more of a personality thing on who governs the finances and the other one is dependent on that. Not dependent like in a helpless way, but they contribute in other ways to the relationship. When retirement starts to get near, when the egg’s starting to get bigger, when we start to have these more tough conversations, a bit of a panic typically starts to come over the spouse who has not done the finances throughout the years.
MIKE: That panic is very real and is totally avoidable when the right retirement plan is done. This couple, they came in. And this may be you, may not be you, but hopefully you can appreciate their point of view. They were extremely risk averse. Especially Q4 of last year, it just… these up and downs in the markets are really upsetting. So investing in the market, to them, based on their knowledge, just wasn’t an option, at least at that time. And a lot of us have limited understanding of what’s really available for us. We know what we know. We don’t know what we don’t know.
MIKE: And it’s a nice situation to be able to pull back the curtains and see all of the options, here. But let me continue. They were also not comfortable with the liquidity restraints of the low-interest rates of CDs and bonds, especially like corporate bonds, who are at more and more risk. At least that’s the way it seems these days. And savings accounts, well that’s hardly enough to live off of. You can’t live off of investing in savings account. At least, most people can’t. If you can, gosh, you’ve got a lot of money and don’t need to spend a lot. That’s all I’m saying. But when it comes down to it, unsure about your…
MIKE: If you’re unsure about your plan survivability, as in the surviving spouse able to control the finances as well as being able to keep up with inflation, but not taking too much risk, these were very real concerns for these people. And you may resonate with one, two, or all of them in your life, as well. The danger that they faced was they… the paradox that they essentially had, if they went to savings accounts and very, very low-risk investments, they probably would not be able to keep up with inflation.
MIKE: But if they took risk, as they understood it and the investments that they understood… and they were decently smart about investments. I don’t want to discredit them. They understood that there was too much risk in their retirement. Too much risk. If they had gone about it wrong, if they had done the risk, two-thirds of their income could have been lost just like that. And I’m not saying by a market crash. I’m saying by bad investing. If one spouse died and the other one had to take over, and things could go sideways.
MIKE: Making sure that both spouses are together, uniform, and have an understanding of how to proceed should life happen and one passes before the other… Folks, I know it’s not the happiest of conversations, but these are real things that need to get addressed. Let’s get into the nitty gritty. Let’s be authentically real here in the conversations that retirees need to face. And I hope that you in your situation are able to address these and talk through them. For this couple, the solutions were quite simple. First off, we had to go over and put the lens in their Decker 30 Review over incorporating all three types of investments that implement into a retirement plan.
MIKE: And for them, they hadn’t worked with a financial professional who was talking about all three types. They were working with someone that just was pushing risk. Now, risk and liquidity is nice for long-term time horizons in your investments because it can grow and you don’t touch it and you’re not tapping into sequence of return risk, which is a huge risk retirees face. No. They could see their other options that can grow and outperform things like the typical three or five-year CD that they were used to seeing. There are other options out there.
MIKE: We were also able to address the… excuse me, the pensions and which options they should have. And this is lump sum versus pension obligation, and for them, it was 100 percent survivability. They did not want to risk it because it was one-third of their inc… or no, excuse me, two-thirds of their income was subject to pensions and social security, and that was too big of a risk. We had to be able to address that and talk about that. And for them, after doing a pension analysis, it made sense for them not to take the lump sum. It made sense for them to take the pension.
MIKE: Folks, what financial professionals can say, “Hey, I’d love to invest those funds, but it makes sense that you don’t give them to me. You need to keep them in the pension.” That’s really rare. That’s a sign of a purebred fiduciary, and that’s what made sense for these folks right here. And we went through and also gave them some emergency cash. Again, all three of these principles. We lined them all out onto a distribution plan, and they could see it. And the anxiety melted away. Anxiety is a fear of the future based on the past. It’s prediction error. And it plagues us all. We’re human, dang it.
MIKE: I tell you what, anxiety is a very real thing, especially for retirement. And most people entering retirement only know accumulation. So when things change, it is very normal to be anxious. We followed the second principle and showed them all three types of investments and how they could work together, and then we showed them principle three into a distribution plan. Now, our proprietary software, we call it a safer distribution plan, but we mapped it all out. And here was the incredible part. They had 300,000 dollars, roughly, in their retirement. Two pensions, one small, one nice.
MIKE: One about 30,000 or so. Both their social securities, which we optimized. And that’s another conversation for another time. And what was incredible about this, folks, is had they followed the four-percent rule, they would not have had a cost-of-living adjustment appropriate to the suitability that is recommended to them. They were inconsistent and unaware of that. The second part of this, which I thought was remarkable, they have the next 20 years of their income planned out. And regardless of if a market crashes, they sail right through it.
MIKE: The third part that was so cool about how we put this together is their outcome, they got an extra 767 dollars net of their effective tax bracket. And I get these are projections. We don’t know what taxes will be in five years or so. 767 dollars a month more in their retirement. It beat the four-percent rule and it reduced their risk by 90 percent. How in the world could we do that? It’s simple. We are a math-based, principle-based retirement planning firm.
MIKE: What we’re talking about here is life changing. For them, they are able to take an extra two or three trips every year. That was huge. They loved it. And 90 percent reduction of risk was huge for them. They were very risk adverse. Remember how we started? Risk adverse and understood they couldn’t invest all their assets in the market. Folks, if this sounds like you, if you’re starting to get that turn in your stomach about the market, can the DOW really go to 30,000 or not, is the market going to continue to do what it’s never done before or will it correct, if these are questions that you have, you or your spouse or both of you, I want to invite you to come in for the Decker 30 Review.
MIKE: 30 minutes on the phone or 90 minutes with a deep dive in person is all it takes, I believe, and we’ve seen this over and over again, to show you what a safer retirement looks like. To be able to help give you more money in retirement while reducing your risk. And for those of you who haven’t retired yet, helping you retire earlier should you want to. I know not everyone wants to retire earlier, but some of you, it’s important to you. Regardless of all that, the most important part about all this is the transparency. When you can see your income down to the month net of tax for the next 30 plus years, it changes your perspective.
MIKE: When you realize you can retire now and you’re one more bad day away from saying, “I’m done. I don’t need this,” that is empowerment. This invitation’s to empower anyone out there right now that’s like minded like us, that likes a math-based, principle-based approach for a safer retirement. To enable them to have more time doing what they want to do most with their time. Time is a precious commodity and we can help you get more of it. If you’re 55 years or older and have at least 300,000 of assets saved up for retirement, I’m going to invite you to take me up on the Decker 30 Review at no cost to you. Call 833-707-3030 right now.
MIKE: When you call in, they’ll gather your information so on Monday, our closest office manager will reach out to you and schedule your either 30-minute phone call or 90-minute deep dive in person, whatever you would prefer based on your schedule and request. That’s 833-707-3030. 833-707-3030. We’re going to take the next 10 callers, no cost to you, that are calling right now. Because when it comes down to it, folks, can you imagine an extra 760 dollars a month if you have 300,000 or so of assets? How would that change your life?
MIKE: If you have three million, we’re not talking just a couple extra hundred bucks a month. We’re talking thousands of extra dollars. 10s if not 100s of 1000s of dollars extra throughout your retirement. Not to mention the tax minimization we haven’t even gotten into right now. Folks, these are life-changing conversations for the better. I invite you to call right now. 833-707-3030. I look forward to talking with you, or one of my purebred fiduciary planners. We’re going to take a quick break. When we come back, I’ve got another story about building the right plan for that person.
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MIKE: Folks, I just waved to my producer. We’re keeping the phone lines open for another five minutes. So many of you just called in on the Decker 30 Review. Just a reminder, if you’re 55 years or older and have at least 300,000 of assets saved up for retirement, I want to keep those phone lines open, because what we’re talking about right now here is life changing. It’s not only protecting your finances and your retirement, but your lifestyle, your very identity, and being able to continue through the rest of your life.
MIKE: Being able to protect that and enjoy who you are the way you want to enjoy that. Call 833-707-3030 for your no-cost 30-minute review over the phone or 90-minute in person. This is for you. And I want to make it readily available to you as best as I can with calendar limitations. Because I know how important this is. I’m going to share with you just a story in just a moment here about building the right retirement. These folks, they didn’t need to have a distribution specialist. They had saved up enough money. Now, we did plan for their distribution appropriately and we planned for their legacy.
MIKE: Remarkable story, and we’re going to share it in just a moment. Now, if you’re just tuning in, this is Retirement Radio, where you get the transparency that you deserve. And I do mean that. You deserve it. Let’s get these rid of these product-pushing situations that people are pushing an idea for a commission. No. We’re purebred fiduciaries here, legally bound to do what’s in your best interest, and we’re going to carry that all throughout our heart in every single visit. Every one of you that visits us, that’s what you’re going to feel when you come in. At least we hope so. That’s our intention. You can always go, just a reminder, to Decker Retirement Planning dot com.
MIKE: That’s Decker Retirement Planning dot com, to catch this show, past shows, articles, and a number of information all for you to help you be guided to the right retirement plan. Whether you work with us or not, just remember the three principles that govern proper retirement planning are critical to your success, so let’s follow them. They’re there for a reason. Let’s talk about this gentleman right here in one of offices. He came about a year ago into our office, and he had millions of dollars to his name. He had about five point four million dollars to his name. Quite remarkable.
MIKE: He had done a great job, worked hard, saved, budgeted. That sounds like you, you’re probably like minded here. We like math. We like deliberate direction to our assets, our money. It’s important to us. We’re not greedy. We just don’t want to be a victim to letting it just run away. If you don’t tell your money what to do, it will do what it wants, which is run away. So let’s make sure we tell it what to do. This gentleman had come to us, and the need really was he had been with financial advisors for decades. These financial advisors specialized in accumulation, and my hat goes off to them.
MIKE: Because they were the ones saying, “Look, we’re good at building assets. But when it comes to distribution, yeah, we could do the four-percent rule. It may not be in your best interest.” This is the only broker that I’ve ever heard of saying this, by the way. What integrity, for this broker to say something like that. Client then was doing research. Found us, came to one of our events, which you can know about if you want to go to Decker Retirement Planning dot com. We’ve got them consistently going. But came to an event and then came in and wanted to ask questions. Questions about retirement and distribution and how to do it correctly. And there was a beautiful meeting that unfolded, talking about the three principles that govern proper retirement planning.
MIKE: If you’re going to draw income, never draw it from a fluctuating account. Number two, incorporate all three types of investments, not just one or two, in a retirement plan. And number three, use a distribution plan or a spreadsheet to map out your income and distributions as you want it to be. Math based and principle based here, folks. So when he came in, it was a lovely conversation that… well, frankly [LAUGH] changed his life. He said, “This is incredible. Never seen anything like this. We want to be able to proceed.” And… but for him, it was a little bit different.
MIKE: And he said, “Distribution’s fine, and I could put things in very conservative accounts and get that. But I don’t want to just throw it to low-earning interest rates. And rates are too low right now. How do we optimize distribution in a more appropriate way so I would be able to maximize my income in retirement while still protecting my legacy?” So here’s what we did. They had both been past [70?] years old and so social security had already been taken care of. Not much to do past 70 years old. Took the five point four million dollars or so and we said, “Great, here is your first version of your safer distribution plan.”
MIKE: “Down to the month, net of tax. Can you live off of that?” We included also, he and his… he had a pension as well as some rental income as a part of this plan. And he said, “Yeah, that’s about 10,000 more than I need. Don’t need that much money, but I appreciate it. It’s a nice thought. But like I said, I don’t actually need that much.” So we said, “Okay, how much do you need in retirement to live the life that you want?” And he said, “About 15,000.” We said, “Perfect.”
MIKE: So here’s what we did. We figured out how to get him 15,000 dollars every month, net of his effective tax rate, down to the month, net of tax, until his age of 99. That’s the age that he feels is a little bit past where he’s going to live, but we want to be conservative. We want to have a little bit of a buffer there. And keep in mind, too, he’s not using all of his money. We’ve got backup plans built into the plan. He was most concerned about the legacy that he would leave behind for his two children. How precious was that?
MIKE: I mean, it was quite remarkable. He wanted to leave behind a legacy that he never had. Now, everyone’s different. There are folks that come into our office and say, “I didn’t get anything when my parents died and my kids won’t get anything when I die. I’m going to spend it all.” And others, they want to set their kids up, with parameters so they don’t have the lottery effect, to have a little bit of help through college, for the grandkids’ college, for their first home being bought, or whatever may happen. Neither is wrong. I mean, they’re both right, here, folks. It’s what do you want? When I talked at the beginning of the show about the authenticity of the homes that my wife and I toured recently for fun, it was just incredible.
MIKE: That authenticity should reflect in your retirement plan, as well. Very kind, and we split the leftover legacy funds and we put it in the investments that he wanted that would just grow for the next 28 years. 28 years. Whenever he passes, his estate is set up. His assets, his hard-earned life savings, is set up to pass to the beneficiaries, his two children, in such a way to minimize taxes and maximize their benefit. He didn’t want to have Uncle Sam take advantage of his system.
MIKE: That sounds like you, folks, I hope you call me. 833-707-3030. I want to talk to you about the options you have in minimizing your taxes to pass off your estate in a more appropriate way. But we’re not going to get in there this time, right here. We’re talking about building the right retirement plan for you. But it’s still important to understand. 833-707-3030. Call me if you want to talk about tax minimization. We can do a 30-minute phone call or we could do a 90-minute deep dive, whatever you prefer. But back to the story. This client, quite special. Social security was done. We mapped out the rental real estate.
MIKE: Which please note… and this is something you’re probably only going to find in a fiduciary’s office, a purebred fiduciary. And according to Tony Robbins, only 1.6 percent of all financial professionals are purebred fiduciaries. We looked at the rental properties. We looked at the income that they were getting. It made more sense for him and his legacy to keep the properties and continue to get the rental income he was getting than to sell them. Yes, we could have more assets to manage, which would make us more money, but it wasn’t the right thing to do.
MIKE: And so we told him to keep his rental property. How many financial advisors do you know would do that? If we’re being honest with ourselves, I don’t know. Not many. Maybe. Maybe I’m a doomsday guy. But I digress. Pension, they kept them both. Or, kept the two pensions there. We kept the rental real estate. And we set himself up, still with his income, folks. His income was mapped out for the next 20 years to be from principle-guaranteed accounts following principle number two. He had risk.
MIKE: Put about half a million dollars at risk that was going to grow for the next 20 years and then be put into a principle-guaranteed account that would be laddered in such a way, according to what he wanted in his principle-guaranteed accounts. We just show him the options. We would show you the options, and you decide what you think is best for you. The beautiful thing is pulling back the curtain, letting you see, what a financial professional knows and then letting you, the smart individual who got yourself here successfully to retirement, to be able to pick. And we’re happy to give guidance as well. We’re happy to tell you, “This is what I would do.”
MIKE: I’ll tell you what I did for my mom. I’ll tell you what I told her to do. Her situation may be different than yours, but we can have these open conversations, as purebred fiduciaries working for you and your retirement. But following these principles, folks, for him, the principles that needed to be followed was one, he was all that risk in the accumulation phase. For his distributions, we had to change it a little bit so he wasn’t drawing income from a principle-guaranteed account. And then we drew him up a plan, a distribution plan. Or for us, a safer distribution plan to make sure that his legacy did exactly what he wanted while he was drawing the income that he wanted.
MIKE: Talk about deliberate. Talk about the awareness. Talk about the lowering of anxiety in his life that now his hard-earned assets are going to do what he wants them to do. That is remarkable. That is life changing. And I want to extend you an offer right now to call me to schedule either a 30-minute phone call or a 90-minute deep dive in person at one of our offices in Washington, California, Utah, or Nevada. We’re here for you. If you are 55 years or older and have at least 300,000 of assets saved up for retirement, I want you to call me so I can help show you what a safer 30 plus years looks like. Call 833-707-3030.
MIKE: That’s 833-707-3030. When you call in, we’ll gather your information so on Monday we can reach out and schedule a time for you to visit, either office for a 90-minute deep dive or we can schedule a phone call for 30 minutes to go over the principles that govern proper retirement planning so you can enjoy a safer retirement. We’re protecting your very lifestyle here, folks. We want to set it up so you have incredible transparency and get more time. Time is a precious commodity, and we’ve seen over and over, we’ve given people years on the clock. Extra years, all to them. Call 833-707-3030 so that can be you.
MIKE: We’re going to take a quick break in just a moment. I got one more story I want to share, folks. Hang with me. It’s just absolutely incredible. We’ll be right back.
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MIKE: Time is flying by, folks. I can’t believe I’ve got one more story I want to share with you and then some closing remarks. If you’re just tuning in, this is the Retirement Radio, where you get the transparency that you deserve.
MIKE: I’m your host, Mike Decker, from Decker Retirement Planning, home of a safer retirement. And we mean that. Us as fiduciaries, purebred fiduciaries, among the 1.6 of all financial professionals who are legally bound to do what’s in your best interest. We identify ourselves as math-based, precision-based… excuse me. Math-based, principle-based precision retirement planners. If you’re someone that likes to budget, if you’re someone that likes to know what your money is doing and you want to tell it where to go and what to do, this is for you. Only so many things we can control.
MIKE: But of those things, if we’re principle based, we should be able to sail through anything. This story really is kind of like the story that we love. The main character, the fall, the learning experience, and the triumph at the end. This is our Rudy of stories right here, folks, that I want to talk about. Because this can happen to any of you that are still working. This couple came to us and said, “My spouse just lost her job and we have no idea what we’re going to do. Should we retire or should we keep working?”
MIKE: 55 years old and 57 years old. This couple came to us because we invited them to one of our dinner events, which you can find out more about at Decker Retirement Planning dot com, and said, “Gosh, how in the world can we know what we can do? At 55 years old, it’s a little bit more difficult.” These were their words. “It’s a little bit more difficult to find a job than it was in our 20s, 30s, and 40s. we don’t even know how many more years we want to work. We just need answers and we have no idea how to find them.” When they saw that we could back out however much they needed in retirement to be happy, to preserve their lifestyle.
MIKE: Whatever that number was, we could mathematically show them what it would look like. Folks, that’s the remarkable part about all this. The remarkable part about all this is being math based and principle based, we can show you, regardless of your situation, what it actually looks like, forgetting about the opinions, by following these three principles. Listen up. First, understand the principle that you never draw income from a fluctuating account. Hopefully you can understand that diversifying through a pie chart isn’t good enough.
MIKE: That’s an accumulation tool, not a distribution tool, and we need to understand that and accept that. The second is to incorporate all three types of investments in your plan. I’m talking about being able to take income from principle-guaranteed accounts. Whichever ones you want to use, that’s up to you. You just have to get rid of sequence of return risk and draw income from principle-guaranteed accounts. For those of you who, suitability wise, want risk in your plan, perfect. Let’s talk about two-sided models that are built to make money in up or down markets.
MIKE: And for when life should happen, having some emergency cash to cover those unexpected events that most of us will experience, if not all of us. Well, we all experience them. We just experience different versions of them. For them, losing their job… or, I should say the wife losing her job really opened up, in a painful way, this conversation of what do we do. Maybe you’re in this boat. Maybe you’re looking at your employers saying, “Hey, they’re trying to get younger staff in here and there’s an early-retirement package that I could take on. What would that look like for me?”
MIKE: These are very good questions to ask, and the only way you can answer them is by following the third principle, which is by simply using a distribution plan. A spreadsheet. For us, our proprietary software, we call it a safer distribution plan. When they came in, we had a great conversation about realistic expectations of where the markets are and where they could go, and then we understood their situation and what they wanted. The danger they had was if they retired immediately… and we show this mathematically. If they retire immediately, they would run out of money or would have to significantly change their lifestyle to afford what they could afford based on their lifestyle.
MIKE: Both those options didn’t work. And on the radio especially, we always like to talk about, “Oh, you know, we’re so great and we made this person millions of dollars and we caused this person to retire five, 10, 15 years earlier.” And those are all great stories. But what about the rest of us? What about the rest of us who have to have these hard conversations? And I’m happy to have these conversations with people because I view them as good conversations. Eye-opening conversations so we don’t go down a path too… or don’t go far enough down a path to the point of no return. Let’s find out now what the ramifications really are and then plan for success.
MIKE: They came in. We figured out, and they said, “Okay, what happens if we retire in 10 years, let’s say.” And we said, “Okay, well here’s what it looks like.” We put in the husband’s income at that point. The wife’s business payout that was going to last six years. There was another income that they had. This was rental income that they had throughout their retirement. And then we also optimized their social security. And we said, “Great, do you want to work through the next 10 years?” Oh, and by the way, they had just shy of 700,000 to their name.
MIKE: What’s interesting is what they said was, “You know, that’s nice and all, but it just doesn’t seem right.” And here’s what I mean by “it just doesn’t seem right.” We took a look at everything right here. They needed to have a smooth cost-of-living adjustment from the time that they were earning money to the time that they would retire. Here’s what I mean by that. Most people think, “Gosh, when I’m not working, I’ll be driving less. I’ll be at home more. I’m going to spend less money.” Not the case.
MIKE: In most cases, when you retire you have more time on your hands and you want to do something with that time. Whether it’s a new hobby, whether it’s traveling or something else, you typically spend more money in retirement. So what does that mean for you? Well, let me tell you. Here’s what it means. What it means is okay, right now you’re going to be working for the next five to six… or for the next 10 years, excuse me. The payout’s going to go for the next six years. To keep the same cost-of-living adjustment that you want in there, and for them it was about 10,000 and growing, we said, “Great, we’re going to start income from assets in year seven.”
MIKE: “So when the business payout stops, income from assets comes in and makes up the difference. That’s going to go for the next four years or so, then gross wages is going to happen. Now, social security, you’ve decided to take the 70-year-old filing option, so we’re going to take a lot out of your income from assets for three years and then drop it significantly so you both can take your maximum social security, and then we preserve your assets after that.” That might sound a little complicated. I admit, okay, this is very technical.
MIKE: But folks, this is the kind of detail that gets people more money, reduces their risk, and protects their lifestyle. If they had just said, “We’re going to pull four percent from our assets,” they would have roughly eight years of very, very difficult living. Very tight budgeting. And these are the years that could be their happiest years. But when you can coordinate your income from assets effort and base them around other income streams such as a few more years of gross wages, your social security, your business payouts, and so on and so forth, you are setting yourself up for more success and a smoother lifestyle.
MIKE: A smoother cost-of-living adjustment throughout the rest of your plan. That’s remarkable. Do you want to… and this is hypothetical. But would you rather… no, that’s a better way to say it. Would you rather say, “I’m going to live well… live tight for eight years, and then live well?” Or, “I would like to live well just for the next 30 years?” I mean, it’s a no-brainer question, but think about it this way. If you have a jar, you’ve got rocks in one hand, sand in the other. Which do you put in first? You put the rocks in first and then you put in the sand. The sand will fill the crevices and then you’ve got a full jar of both.
MIKE: If you put the sand in first then the rocks in after, you’re shooting yourself in the foot. Metaphorically speaking. I’m running out of time with this story, folks. I want to be very transparent in saying this is the kind of level of transparency and coordination that we take here at Decker Retirement Planning that allows people to retire with more retirement confidence. It allows them to enjoy a safer retirement. Especially in a market top, this is the kind of detail that sets people up for success. And I want to invite you to enjoy this kind of success.
MIKE: If you are 55 years or older and have at least 300,000 of assets saved up for retirement, whether it’s from your 401k or not, I want to invite you to come in, in person, for a deep dive to go over this. Now, we can do a 30-minute call in person, go over the principles that govern proper retirement planning, and give you that glimpse of what a safer retirement looks like for you, but if you’re willing to come in for a 90-minute deep dive, we can establish what the market really looks like. Establish realistic expectations. We can understand your authentic and unique selves. Self or selves. And understand what your retirement looks like.
MIKE: And we can, at no cost to you, again, show you what a safer distribution plan looks like. This kind of coordination with your retirement so you are set up for smooth income. For the ability to sail through market crashes should they happen, which they typically do every seven or eight years. To give you the maximum growth possibility and to have conversations about tax minimization, which we haven’t had time today to talk about. Two-sided growth models that are built to make money in up or down markets that have been averaging around 16 and a half percent since 2000. Yes, that much.
MIKE: It’s remarkable. The things we’re doing here, folks, at Decker Retirement Planning are revolutionary. Whether you’re happy with your advisor or not, come in and get this information, work with him or not. That’s up to you. But as purebred fiduciaries, I want you to have this information, so please call me. 833-70-3030. Again, that’s 833-707-3030. When you call in, they’ll gather your information so on Monday, we’ll reach out to you to schedule your 30-minute phone call or 90-minute deep dive in person for what we call the Decker 30 Review. It’s all for you, no cost to you.
MIKE: And you’ve got all the benefit. Hundreds of thousands of dollars are typically left on the table and we want to make sure that you can get them and not leave them. Call 833-707-3030. We’re going to take a real quick break, but when I come back, I’ve got some closing remarks that can change your life. Stay tuned with us on Retirement Radio. Thank you.
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MIKE: What a day and what a way to wrap up this show here. If you’re just tuning in, I encourage you, go to Decker Retirement Planning dot com and catch this show, or any previous show. And this show, we’ve been talking about how to get both spouses on the same page with simple retirement plans that are… I mean, they are very strong. It’s a safer retirement we’re talking about, here. But it’s simple enough that either could handle the finances should one pass before the other. We’ve been talking about should a crisis happen and you lose your job a few years before you want to retire, what it looks like.
MIKE: How to mathematically quantify that and how to still get to the finish line regardless of the few bumbles and tumbles right before the finish line. These are things that we’ve been talking about, as well as protecting your legacy. Making sure that once you pass, getting the assets to the right people in the right way. It’s possible, folks. It’s all possible here at Decker Retirement Planning. A safer retirement. We’ve been talking about the three principles that govern proper retirement planning, and I hope for those of you just tuning in, listen up. It’s critical to know these points. The first principle of retirement planning is always never draw income from a fluctuating account.
MIKE: I know you’re all using pie charts, or most of you, in your accumulation efforts, which is just fine. But once you get to retirement and you need distribution, the rules change and that pie chart, it’s at risk. And your whole retirement income can’t be at risk. It’s called sequence of return risk. If you haven’t heard of it, I encourage you to Google it. Investopedia dot com’s got a great option there. The second principle is incorporate all three types of investments in your plan. The three types are one, making sure you’ve got some emergency cash set aside. Two, having accounts that are principle guaranteed so you can draw income from them and sail through the market turbulence that happens often.
MIKE: As well as the major crashes that seem to happen every seven or eight years. And the third one, for those of you who are suitable for risk, that your risk has a time horizon of 10 plus years so you don’t need to draw on it for income. That you can let it grow as it’s supposed to do. The mini version of the accumulation that you’re used to. Folks, making sure that you can follow that second principle of incorporating all three is critical. And the third one and most critical, in my opinion, is using a distribution plan or a spreadsheet to give yourself the transparency that you deserve. So you can see how much you can earn, down to the month, net of tax. Or I should draw as income, down to the month, net of tax, right now.
MIKE: If you were to retire today. If you’re currently retired, how much you should be taking today. For most people, they could be taking more. Hundreds of dollars more every month. It just comes down to are you willing to come in and talk to someone new or not? Are you willing to revisit things that you’re comfortable with? Are you willing to recognize that familiar territory may not be the right territory to stand in? As purebred fiduciaries, we are here to show you how the three principles can help you accomplish a safer retirement and enjoy more time, more money, less risk, and so much more in your retirement.
MIKE: It’s quite life changing, folks. Call us. 833-707-3030 now. The next 10 callers, at no cost to you, will get a free no-cost first visit. We call it Decker 30 Review and it is all for you, to show you these three principles and how they can enhance your retirement. Must be 55 years or older and have at least 300,000 of assets saved up for retirement. All for you, folks. 833-707-3030. When you call in, they’ll gather your information so on Monday, we can reach out and schedule you for that 30-minute phone call or 90-minute deep dive.
MIKE: Folks, here at Retirement Radio and Decker Retirement Planning, we’re changing lives. We’re enhancing retirements. And we’re helping people enjoy a safer retirement. Lowering that anxiety and giving more time to do what’s most important for every individual, authentic, and unique person that walks in our office. Thanks so much. We’ve run out of time. We’ll talk next week. Same time, same place.
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.