Are There Universal Retirement Truths? Part 2
October 12, 2023

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 2 of a 2-part series.

Subscribe & Follow On Your Favorite App:

Apple Podcasts

Google Podcasts


Amazon Music

TuneIn Radio

Episode Transcript

Note: This transcript was produced using AI, so please excuse any typos and inaccuracies…

Marc Killian 0:02
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.

Speaker 2 0:24
Any successful plan requires wisdom and preparation, and retirement is no different. It’s time for the plan wise retire free podcast.

Marc Killian 0:33
Welcome back into the podcast, folks, it’s playing wise, retire free with Jude Wilson, from centrist financial strategies. And we’re going to do part two of our conversation on universal retirement truths. We went through the first five with Jude and ran through some of these items that are going to affect all of us in retirement, we’ve got another five to go through. So we always appreciate your time. And make sure you subscribe to the podcast if you haven’t considered doing so before. That way you catch future episodes and check out past episodes. And if you have and you’re already even working with Jude, maybe share this podcast with others who might benefit from the message, we try to provide useful nuggets of information to help you get to and through retirement. And of course, you then want to take those nuggets, and sit down with a qualified professional and see how it’s going to pertain to your specific situation. Because again, even with today’s topic, these things are universal truths that certainly will affect us all. But how they affect you individually is the key to getting your own personal strategy in place. So Jude is here to help he and his team has interest That’s interest or call them at 800-779-4592. Dude, my friend what’s shakin, how are you? Hey, man,

Jude Wilson 1:41
I’m feeling really good. At the time of this taping. I’m looking forward to the weekend. Because college football season is back and I’m excited.

Marc Killian 1:49
Nice. Yes. Everybody’s working for the weekend to bring in some old lover boy, they’re good song. But you know what? It’s football football time. You’re right. We I think we’re all looking forward to it. We’re enjoying the cooler temperatures. Because soon enough, unfortunately, even in the hottest state of Florida. It’s going to be pumpkin spice everything. Right? Absolutely. That time of the year. We’re This is late September. You know, maybe you’ll get this reference. I’ve done on a couple of podcasts. I have to do it because Chris Berman did it all the time, but it’s late September, and I really should be back in school. It’s time to get back on to the end of the podcast conversation with Jude. He would do that on every episode of Sports Center during the football season. Chris Berman? Well, because he’s a big music fan. And that’s a reference from a Rod Stewart song. So there you go. Okay, you got to know how to throw my Chris Berman reference out there. So I missed I miss Chris Berman and his and his oops, you know, these little squeal? Absolutely great. Good stuff. Good stuff. All right, let’s turn our attention to some financial stuff. Here. We got the other five to go dude. Number six. Diversification is essential for risk management. And I want to phrase this like this. Diversification is not just the one term we think about for our portfolio, it could be other things it can be diversification of your income streams can be diversification of your tax buckets. So it’s a useful word and a lot of things in the financial spectrum.

Jude Wilson 3:10
Again, you’re right on point, I think when I talk to clients, the one thing that they say, again, kind of referencing some of the periodicals they read is don’t put all your eggs in one basket. And I get that. But there is a strategy for diversification. And it’s not just among your investments. We at the firm are tax wise, financial planning firm. So we look at taxes as part of the plan. And I tell everybody, when they’re looking at taxes to look at diversification of taxes, not just diversification of your investments, if you have some accounts that are fully taxable when you pull $1 out and some accounts like your Roth, and raw 401k That will never be taxed. But let’s talk a little bit about investment or diversification because that’s the first thing that pops into people’s heads. Yeah, yeah. If you look at 2022, just last year, okay. There’s something called a Callen chart and Callen chart, it looks like that old high school Periodic Chart of elements. Okay, Callan chart shows all the different sectors of the market and which performed best. And oftentimes we think of diversification as something that will save us from any losses. No, that’s not the ticket. Diversification is trying to try to reduce risk in the portfolio overall. So when you look at the calendar chart, it’s color coded and it looks at every sector of the market. And last year, every sector every type of investment was negative except for cash. So one might say, well then why the heck diversify? What diversification didn’t work? It absolutely worked, because you have some sectors that were down when he 5% And then you have other sectors that were down only 5%. So you’ve got to have diversification in your portfolio based on your risk, your goals and your timeframe. And a good financial planner will help you with that, too. That’s

Marc Killian 5:14
a great illustration of exactly how that goes, right? Because a lot of times what will happen is folks will just think of the negative as being well, I just lost period. So that wasn’t a good thing. But yeah, because it was a bad year, I mean, even bonds were down, right, which is unusual for stocks and bonds to both be down at the same time. So it is one of those things where you didn’t take as much loss across the board as you could have. And it’s think it’s the same way we we know it how it works on the upside, but we tend to get a little lost sometimes because we’re just so afraid of losing something. But it’s like, because you’ll might you might see on a good year, let’s say, you go hey, the market total was up 32% For last year, but I only got 15%. So my advisor must be doing a poor job. Now, your your allocation was set so that you didn’t take a beating in the event that it was down 35%. Right. You’re playing a balance, you’re on the seesaw. Right? And you got to have that balance on the seesaw. You don’t want a really big kid on the other side, because you’re always right. Yeah, no. Does that make sense?

Jude Wilson 6:14
It makes perfect sense. So that’s, that’s part of the part of the job that I love the most is really educating people. Because we let’s face it, we don’t learn this stuff in high school. No, most of us don’t have exposure to it in college. And then we start our working careers. And we’re, we’re trying to watch CNBC or read Money Magazine, or whatever, and try to get these the right strategies for us. But it really takes a good financial planner, and a team of experts around you good CPA, good financial planning good lawyer to really put together a holistic plan.

Marc Killian 6:47
Yeah, yeah, you’re right. And we’re trying to do that within the five minutes of the day that we have time between getting home from work and spending some time with our kids, and helping them with their homework and figuring out what to do for dinner. Right? I mean, life is just like, bam, bam, bam, bam, it’s always something right. So having a having a pro in your corner in different walks of life. That’s why we turn to professionals, because we don’t have the time to know everything, we just can’t. There’s just too much in the world. So diversification number six, it’s essential. Number seven, well, this goes right with what we just talked about emotions can be an investor’s worst enemy. You just got your butt whipped by all the things we just described, dude. And so now you’re feeling like, let me out of here, get me out of this whole thing. I’m terrified of it, right. And that can be the worst move, you need a professional to help talk you off the ledge, or confirm why it’s a good idea one way or the other.

Jude Wilson 7:36
Yeah, emotions can definitely affect your decision making. Let me give you an example. We recently had a client who inherited a large sum of money from parents who had passed away. And this particular client had been working with their parents learning the stock market investments over the years as as this client was growing up, and had an emotional attachment to some of the investments that his father had in the portfolio. And so when when that client came in, he wanted to relieve some of that pressure of investing the dollars himself. And we talked about it put together a great portfolio. But the market has been volatile over the over the last year. And there were there were four particular stocks in that client’s portfolio that he said, Absolutely, I will not sell those stocks. They are they are part of the inheritance, part of what I had seen my dad do. And so when when we looked at the portfolio and did a client and did a review for the client, been over a year now, the portfolio had not performed well. And the client was kind of upset. And I said, Well, here’s the thing, when we analyze the portfolio and take out those four restricted stocks that you said, we can’t touch that accounted for 80% of the downturn in

Marc Killian 9:02
the portfolio. Oh, wow. So he had an emotional attachment to those for some reason. Yeah, he

Jude Wilson 9:07
had an emotional attachment to that. And when we, when we were able to show him, you know, these dots are contributing to why you’re not being successful. He finally kind of took a breath and understood that one, the portfolio manager is there to help let him do his job. And to it’s okay to let go of some of these not necessarily sell the whole kit and caboodle. Sure, but give us the opportunity to really do our job and look at a proper diversification.

Marc Killian 9:40
Yeah, and that’s a great story for that job. Because they’ll be we can do that we can develop an attachment to it. We worked at the company or dad worked at the company or, you know, whatever, write whatever reason you have for liking something specific and you’re like, No, I can’t get rid of it. Even if you got a dog. Right. And so sometimes it’s hard to let it go. I mean, you know, even if you’re a Seminole fan, sometimes you just gotta move on.

Unknown Speaker 10:00
Ah, I see you had to get that in there.

Marc Killian 10:03
But it’s a great story to illustrate that point, right. So sometimes we can be our own worst enemy, as as illustrated in that story. So that’s number seven. Number eight tax implications matter. Go with your cliche of choice, dude, it’s not what you make, its what you keep whatever you want to say. But taxes are important. Tax buckets are important.

Jude Wilson 10:24
Absolutely. As part of our process, we have something we call our tax management journey. And it’s basically seven pillars on the map that we look at, to try to either reduce taxable liability as much as we can, or increase potential tax free income. In addition to the tax management journey, we have what we call our three tax efficient funnels. Everybody knows that if you put money in a 401 K IRA, it’ll pay taxes, you get a deduction on that. But what you might not know is that you may be causing yourself a future ticking Tax Time Bomb, say that fast three times there’s write off potential taxes, because I don’t know if you’ve looked at our deficit anytime recently. But our deficit keeps on going up. And we are at some of the lowest tax rates that we’ve seen in a generation. So I can’t predict the future. But logically, that tells me if our debt is going up, and the government is receiving less money, at some point in time the tax bill is going to come due, and tax rates are going to go up. So tax diversification, as well as investment diversification is highly important. Yep.

Marc Killian 11:42
You know, and you know, for anybody in the camp of, well, maybe they’ll just leave everything alone, and taxes will stay the same. Well, they’re not gonna stay the same, because they’re gonna go up regardless if they do nothing. They’re going up and 26. Anyway, you know, and you know, Congress is good about doing nothing, or they do too much one of the, you know, one of the two right, so either way, I’m glad you said it. And I did. Yeah, that’s all right. It’s pretty evident. I think we can turn on the news. You see it. Alright, so number nine, dude, retirement does not mean disengagement from work. The catchphrase the hot buzz. Word is work optional, right? Everybody’s doing that around now. And that’s fine. It’s a great term in this respect, because the days of getting to retirement and then just sitting on your front porch and wetland. And yes, I said wetland because I’m in North Carolina. So that’s what we would say, those days are kind of over unless that’s what you really want. You don’t have to just sit on the front porch and do nothing, right. Many of us 70 Is the new 50, right? That kind of thing. We feel good. I look and feel a ton better than my dad did when he was 52. I’ll be 52 on Saturday. And he looked like an old good brother. Thank you. He looked like an old man at 52. Right? And so that all that kind of stuff has changed. And so if you want to volunteer at the animal shelter, or, you know, make some extra money on the side, the big gig maybe is retiring, but maybe you got other things you want to do.

Jude Wilson 13:02
Yeah, making work optional is what we talk about with clients all the time. Yeah. And what I’ve seen personally in my career, is with working with clients, before they retired, several years before they retired, they’re in the accumulation phase, and then they hit retirement, they’re in a distribution phase, they’re using some of that accumulated assets to turn into income. But the neat thing that I’m seeing now is that they’re not sitting in a rocking chair, they’re doing work that is passionate for them. They’re doing work that they maybe they didn’t get a chance to do that paid less, but they really wanted to do. And they have the security of understanding, they can do that. Because going back to the previous so there was an income plan that was created for them well before they retired. So they can either earn nothing, or they can earn a sauce mount salary, and know that they can continue to live the lifestyle that they’ve become accustomed to.

Marc Killian 14:03
Yep, yeah. So whether you want to pad the numbers to use a sports reference, right, whether you’re just trying to make your stats look good for the end of the season, or whatever the case might be. And you’re adding a little extra income to the bottom line, or you just want to work because you’re just bored or whatever. The point being is that we don’t have to get to 65 now and just do nothing. So that’s a universal truth that is certainly becoming more and more evident as the years go by for people because we’re just in taking a little bit better care of ourselves and better shape to do so. And then plus I don’t think the human body is designed to really sit still for very long, we get a little nutso and sore and all that kind of stuff if we don’t so, another good reason to get out there and do some things. Alright, dude, final one. Number 10. Estate planning is not just for the Rockefellers or the Vanderbilts. You don’t have to be some sort of mega rich person to have an estate plan to even have an advisor some people. I mean, we’re waking up to that and it’s definitely been better the last 20 years, but I remember a time period like even on television to show somebody I’d say, you should totally get an advisor now that financial person now that you’re rich, and it’s like, you don’t have to be rich to have a financial professional.

Jude Wilson 15:07
No, absolutely. And, you know, this is a bone that I have to pick with the media, I think the media is sometimes scares, the average American about the estate tax is going to take all of your net worth that you’ve worked so hard for and that you want to pass on to your heirs. Well, here, here’s the real truth, most Americans will never reach the net worth large enough to pay estate taxes. So to your point, some people say, Well, why do I need an estate plan, if I’m not rich, you need an estate plan, regardless of your net worth, because you want to make sure you have the documents that are going to make it easier on your heirs, for instance, a power of attorney, you want to have a health care surrogate, you want to have all of these documents in place, that when you pass or when you when you have those challenges, that you’re that your loved ones are not stuck struggling to try to figure out. Okay, what do we do now that mom and dad is not here? Or that my spouse is no longer here? Or that, you know, someone, unfortunately, may be in the hospital and incapacitated. So those documents, healthcare surrogate power of attorney and some and sometimes guardianship papers, if you have young children, they’re all a part of the estate plan. Yeah, it’s not just the estate taxes.

Marc Killian 16:38
No, exactly. You know, and there’s so many little pieces to it as well, right? There’s so many little things. Some of them, it’s really low hanging fruit that you can get taken care of pretty darn easily. Some of it can be more complicated depends on your situation, right? So it’s worth having the conversation and even the more complicated stuffs, not as it’s not as costly as people think it is. It’s not like you’re going into it and having this you know, spin crazy, mega big bucks, right? So you want to make sure you’re having a conversation that at least find out what’s the right fit for me? Do I need, you know, only a will or the powers you know, the power of attorney, durable power of attorney and things like that? Do I need to look at a trust, revocable trust or something like that? Lots of different questions you can have the conversation on, and what does it hurt to have the conversation? Worst case scenario? You know, I don’t need that. But now I know, right? So it’s important to have those chats. Do yourself a favor and make sure you reach out. Yeah, absolutely. Make sure you reach out talk with a qualified professional because these are again, our 10 universal truths that are going to affect us all in retirement. Dude, once again, thanks for hanging out my friend.

Jude Wilson 17:38
Always a pleasure. And since you gave me that little zig about my seminars. At the time of this recording, we’re undefeated.

Marc Killian 17:46
So I know I just wanted to tz you guys are playing awesome. You guys are on a good run. But you can’t say it too loud because you might Jinx them. Right.

Jude Wilson 17:53
I know, I probably should not have said that. I did the same thing about

Marc Killian 17:57
mine. So I’m with you there. Don’t forget to subscribe to his folks on Apple, Google, Spotify, whatever platform you like to use, and we’ll catch you next time here on Plan wise retire free with Jude Wilson from sin trust financial strategies send trust

Speaker 4 18:18
The preceding program is sponsored by Judy Wilson, who is solely responsible for its content. Financial Planning and advisory services are offered through prosperity Capital Advisors PCA an SEC registered investment advisor, with its principal place of business in the state of Ohio centers, financial strategies and PCA are separate non affiliated entities. PCA does not provide tax or legal advice, insurance and tax services offered through centrist 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 Advisor public disclosure website WWW dot advisor For additional information about PCA including fees and services sent for our disclosure statement as set forth on Form ADV from PCA using the contact information here in please read the disclosure statement carefully before you invest or send money