Retirement is a unique journey for each of us. The thought that there’s a one-size-fits-all solution is a myth, but what if we told you there are certain universal truths that can guide every retiree? Dive deep in this episode, where we juxtapose the individuality of retirement plans with the foundational principles that remain consistent across the board. This is part 1 of a 2-part series.
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Episode Transcript
Note: This transcript was produced using AI, so please excuse any typos and inaccuracies…
00:01
Retirement is a unique journey for each of us. The thought that there’s a one size fits all solution is a myth. But what if we told you there are certainly universal truths that can guide every retiree. On this episode, we’re gonna dive into some of those universal retirement truths
00:22
any successful plan requires wisdom and preparation, and retirement is no different. It’s time for the plan wise retire free podcast. Hey, everybody, welcome into the podcast. It’s playing wise, retire free with Jude Wilson and myself, dude, of course holistic wealth manager at centrist financial strategies and here to help you get to and through retirement. As always, if you’ve got some questions or concerns, need some help, make sure you reach out to a qualified professional like Jude and his team at centrist fs.com. That’s interest fs.com. And we’re gonna dive into some universal retirement truce this week. On the podcast, what’s going on, buddy? How are you? I’m doing great. How you doing my friend hanging in there and just chatting with you looking forward to breaking down some universal isms? I think I’m not sure if that’s a word, but we’re gonna go with it. We’ll make it a word for today. That’s right. That’s right. As how’s things going down there in Florida? Oh, I can feel the weather is about to change. Excited.
01:23
Yeah, yeah, just a little toasty. toasty. But let’s go know what and that’s a universal thing. Right. So that’s my segue. It’s universally gonna be hot in Florida. So and you guys all look forward to I think we all look forward to September, football’s back, kids go back to school temperatures are down. There’s a lot of universal things there that make us all happy. Right? So especially football being back.
01:48
Well, that’s on that side of life. Let’s talk about the financial side. All right, let’s jump into, we’re gonna do 10 of these dudes. So we’re gonna break them down into five on this episode. And then we’ll do five on the next podcast episode. So again, if you haven’t subscribed to us consider doing so. So you can catch future episodes, as well as past episodes, and all that good fun stuff. And I think you can find us on all the major platforms, Apple, Google Spotify, and it’s all on his website, as well as centrist. fs.com. Alright, universal truth. Number one, everybody needs an income plan, dude, you know, even if you say, Well, I got Social Security and pension? Well, that’s still an income plan, isn’t it? You know, this is one that I talked to with almost every client. You know, we’ve talked about this in previous episodes. Our philosophy is called the bucket plan. And whether you’re in the accumulation phase, you’re saving to get to retirement, there’s a bucket plan, or whether you’re about to retire in retirement. That’s where I think a bucket plan really shines, right? Because when you’re looking at your income, two things you want to consider is one longevity. And two of what it cost for you to live the quality of life that you’re accustomed to. Who wants to go Who wants to go backwards in retirement and payments. And people make that mistake, though, dude, right? Sometimes they try to justify, I really hate my job I want to get out. So you go talk to your advisor, or go talk to an advisor for the first time and you go, we could make this work on 6000 a month, we currently live on 10. But we can make it work on six. And you’re like, Oh, you gotta be happy with that. Right. And if you read some of the magazines, they say, you know, anywhere between 60 to 70% of your pre retirement income you’ll use you’ll need in retirement. I’ve been doing this over 25 years now. Most clients that I’ve come across, will live on anywhere between 90 to 100%. Of what they were spending. Pre retirement. Yeah, for sure. So that I don’t know where that 60 to 70% came in. I think people assume the mortgage is going to be paid off. The kids are going to be gone. So I need less. Yeah, but when something leaves, something else takes its place. Yeah. So we always plan for the net income. Yeah, I think that 60 70% probably came from the 60s in the 70s. And people had pensions, Social Security, right. I mean, like you didn’t need as much of a model, you know, like a modest savings would probably get you there, right? But that’s just not the case in today’s environment. So, gotta have an income plan. Universal Truth, number one. Number two, everybody needs a plan to address long term care issues. Dude, the biggest problem with this one is that we don’t even want to talk about it, period, let alone build a plan. Well, you’re exactly right. In fact, I got a story to share with you with a recent client that I that needed to tap into long term care, okay, now when we talk about long term care, and you’re so right, people don’t want to discuss it. It’s almost like discussing your potential end of life. It’s a tough topic, right? But we always bring it up
05:00
In a holistic financial plan, that one out of every three Americans over the age of 65 is going to have a long term care event. So you could either plan for it, or you can hope that it’s not going to happen. And that’s not what we do. I mean, there’s two of us here on this podcast. That’s, yeah, you’re right. We’re pretty close right there. So you know, exactly. So quick story, a client that I had over 15 years ago, husband and wife very successful, both very successful professionals, were well ahead of where they needed to be, as far as their accumulation for retirement had millions of dollars. We proposed an income plan, like the previous bullet, and we talked about long term care, which was an issue that they had not considered, we made a plan for the potential for long term care, they continue to work for about another five to seven years. And then three years into their retirement, the wife started showing signs of dementia. And now unfortunately, both of them have moved into an assisted living facility. The wife is at a floor higher than the husband where they have a memory care unit. And the husband is on the floor beneath Oh, wow. And their son came to me
06:24
a couple of years ago and said, Dude, I didn’t agree with you, when you propose the long term care. I’m an NBA, I know that the stock market normally does somewhere between 9% over time. But my dad really believed in you and decided to do the long term care. I can’t thank you enough for that decision. Because Long Term Care Insurance is picking up the cost, which is about $9,000 a month. Yeah. And if we had not done that, we would have probably ran through their retirement savings much quicker than we are now. Yeah, it hefty for sure. Yeah. And that’s, you know, it’s tough calls to make. And it’s tough decisions to go through. But the proofs in the pudding in situations like that, right. So we’ve got to at least, if nothing else, folks, you got to start the conversation with not only your spouse, but also your financial professional, a financial professional, for sure. Because it’s, you know, we’re living longer, and it’s just the the probability is higher and higher. It’s a universal truth, that’s going to certainly affect us all. So have a conversation about long term care issues. All right, number three, Jude, new buddy can consistently time the stock market successfully. And I mean that with all sincerity, new buddy can like you, if it’s probably the worst thing. It’s like playing golf, right? If you’re not a good golfer, and you get this one swing, that just makes your whole afternoon. You’re like, right, yes. And I’m coming back for more, right? And I think I’m the man, I figured this out, right? You know, heaven for me, like if you were gonna, heaven forbid, but if like, if you were to get a hold on one on a par three, I watched a guy do this, right. I talked about this before, he got hold one and par three and thought he had just solved like, the whole riddle that is golf. And the rest of his game was terrible, right. And so the same thing can kind of happen with trying to get it right with the stock market, you might get lucky. But the odds are very much against you. You’re so right. When I talk to people, a lot of times they are referencing things that they read in a magazine. And they’re making decisions based on that, for instance, in the previous bullet, we were talking about that couple And the son said, Well, I know the stock market returns somewhere about eight 9%. Right, you know, over any period of time. Well, yes, that’s true. But it’s not linear. It’s not a straight 9%. Every year over year forever. Yeah, exactly. And through our process, there’s a ton of education that we do for clients, because there’s these things that they hear or they read that they’re basing decisions on that really don’t match the real world experience. And so Warren Buffett would even tell you, there’s no way that anyone can time the market consistently. You got to be right twice, you got to be right on the cell, and you got to be right on the bar. And anybody who’s married knows that your spouse will tell you that you’re never right once, let alone twice. At least that’s what my wife tells me. Right? So
09:27
I don’t get right twice at all, let alone one so yeah, it’s just not a good idea. Right? Especially when there if you want to have that dabble money or that goof off, hey, we’re, you know, going to swing for the fences here and there. Cool, right, but have a strategy and a plan, that taking care of the rest of the stuff, things that have worked for, you know, tried and true isms that have worked for the last 100 years for building wealth and getting to where you want to be and then kind of have your, for lack of a better term casino money, right? You know, that’s exactly what we do. We tell people take 5% of your liquid net worth and go swing further.
10:00
So yeah, exactly. And if you hit it cool, awesome. Now you can buy that $100,000 RV that you had your eye on or something I don’t know. But either way, right? So have a strategy there. Alright, number four, nobody knows how long they’re going to live Jude, your job would be awesome. It’s already awesome. But it would be easy, like super easy if we all had like a little stamp, like, like a gallon of milk that said, when we were going to expire, and I don’t think I’d like to personally have that little thing reminding me when it was going to happen. But, you know, it’d be easy to do. And unfortunately, there’s genetic, you know, predispositions there’s family history, certainly take that into account, right, just like stock market history. But it’s not the be all end all. You hit it on the head. Because, you know, I had a client wants to tell me, dude, if you could plan so that I can use the scheme method of estate planning, that would be perfect. And I said, What is this scheme method of estate planning? He says, The scheme method is spin kids inheritance.
11:00
I don’t think I could get you down to zero. So he wanted to spend the kids inheritance, right? Exactly, exactly wanted to be is his other thing was that if I, if I’m in the coffin with $1, I’ve got 99 cents too much.
11:19
But for most clients, we want to plan for income beyond what the actuary say, is their typical life expectancy? Because we don’t know. Yeah. And as you said, In the beginning, so many changes are happening in healthcare, people are living longer. So I’d rather you have income for life than more life than income. Yeah, so if you guys, you know, what do you play that, let’s say 85, you know, 90, and then you kind of maybe add a buffer to that as well. Exactly. 9090 is our target. Okay. Yeah. And I think the tables right now are, you know, 82 for Well, it’s funny, the tables are actually lower than that. It’s still the 70s for people a lot of places. But then if you make it to 65, then you have like a greater chance of seeing like 82 for men, I think, and 87 for women or something like that, right. So you know, it’s all kind of a sliding scale. So you still want to have that buffer that plan to get you there in case you are wrong, and live much longer than you thought you were going to. So number five, and we’ll wrap it up for the first half of universal truths. And that is money sitting in cash, or at the bank, just as not keeping up with inflation. And here’s a newsflash folks, even though I know it’s really exciting right now, to see 5% at the bank for the first time and for like ever, it’s still not truly keeping up with inflation might the bank is never going to outpace inflation, it just never has. Exactly what I when I was interning way back in the well, I won’t say what year.
12:54
Well, before the cell phone when I was a young intern, you know, we were seeing rates on CDs of 11 12%. And I have clients that remember that vividly because they were working during that time. And they hope for the days of getting that nine 10% CD and I tell them, you don’t want that. Because if CDs are paying nine 10% Guess what? Inflation is out of control. We just saw it we right? I mean, 5%. It’s at the bank, my current bank right now saying 5% for a 12 month CD. But we had to go through what 9% inflation to get there. Exactly. And so when when we look at it holistically, we’re looking at our buckets, we’re looking at our longevity bucket, or our later bucket, to be our growth bucket to wait to surpass inflation, right. But then our middle bucket is more of a fixed income bucket to try to outpace inflation, maybe by a little bit but be steady money. I don’t suggest anybody put a majority of their money, even if they’re getting 5% in a CD or, or some type of investment, that’s a fixed rate of return that they can’t, you know, outpace inflation. Yeah. And be careful with those things. Anyway, folks, like I was looking at mine and reading the details just for giggles based on what we do. You know, again, I’m not a financial advisor, I just play one on the radio, but it’s, I still have quite a bit of knowledge with it. And I was looking at it, and it was like 5% for 12 months for like, I don’t know, $5,000 or something like that, as the you know, the minimum and then they had like the super mega one, right? And it was 4% for like 36 months at a higher deposit amount, which what does that tell you means that they expect the rates to start to drop at some point over the next three years as well, at least that’s kind of how I read into it. And I think a lot of financial professionals would agree and the Feds even talked about at some point cutting, you know, maybe cutting some of the interest rate changes that they made the last two years they may start to pull off a quarter point here and there.
15:00
as well. So, you know, lots of we’re still in like a weird spot right financially. Absolutely. Absolutely. The Fed will, at some point pull back interest rates, which is going to have a trickle down effect. Yes. And pull down interest rates to your bank and credit union. Yeah. So again, it’s a universal truth, right? These things happen to all of us. They happen because it’s part of the system. It’s part of the way things go. If you’re alive on this rock, you’re going to experience a lot of these universal truths that we went through today on the podcast. So we went through the first five, join us again, for part two that will be out in about two weeks or so. We’ll have the second half of this coming up. So reach out to Jude and his team. If you’ve got some questions need to get yourself on to his calendar. You can find them online at sin trust fs.com, that C E N T R U S fs.com, where you can subscribe to the podcast on Apple, Google Spotify. And also there’s lots of good tools, tips and resources at the website as well. And they just remodeled it so it looks great. So go check it out with centrist Fs backbencher refer. Yeah, man, and we’ll see you next time, buddy. Hey, thanks for hanging out. I appreciate you. Let’s have some fun next. Always do always will and we’ll see you next time here on playing wise, retire free.
Financial Planning and Advisory Services are offered through Prosperity Capital Advisors (“PCA”) an SEC registered investment adviser with its principal place of business in the State of Ohio. Centrus Financial Strategies and PCA are separate, non-affiliated entities. PCA does not provide tax or legal advice. Insurance and tax services offered through Centrus Financial Strategies are not affiliated with PCA. Information received from this podcast should not be viewed as individual investment advice. Product discussions and illustrations are hypothetical in nature and will vary based on many factors including, but not limited to, age, health, product, insurance carrier and product design. You should consult the insurance carrier website and policy for detailed information. For information pertaining to the registration status of PCA, please contact the firm or refer to the Investment Adviser Public Disclosure web site (www.adviserinfo.sec.gov). For additional information about PCA, including fees and services, send for our disclosure statement as set forth on Form ADV from PCA using the contact information herein. Please read the disclosure statement carefully before you invest or send money.
