Retirement Answer Man Show: Retirement Planning That's Fun

The cost of a financial misstep in retirement can be devastating. During retirement it is hard to "earn" your way out of poor decisions. Poor planning or a big loss during retirement can ruin your financial security. In this episode, I discuss the most common retirement "screw ups" I've seen and how you work to avoid them. 7 Ways to Screw Up Your Retirement Having unrealistic return expectations for your investment assets (too high in 1990s, too low in 2007-08) Crazy as it sounds, in the 1990s people retired thinking they could earn 15%-20% per year and take 10% from their assets for retirement income. Today, we see the opposite extreme. After 2008-07, people aren't so optimistic about retirement. In fact, they are down right pessimistic. Not sticking to a spending plan and reviewing it annually When you retire it is essential that you become more intentional about your spending. In retirement your earnings power diminishes. You'll have less opportunities to earn your way out of poor spending choices. Set a spending plan and review it annually. This will allow you to adjust as your situation changes. Falling in love with an investment or investment strategy Real estate; Gold; Rental houses; Tech stocks; Dividend stocks. I've seen it all over the last 23 years. Just because you've had great success with a particular investment or strategy doesn't mean it is the be all end all.  Managing assets during your retirement years is more about consistency and protection than stellar returns. The past is littered with "sure thing" investments that have gone bust. Just look at the list above. Financially supporting/enabling adult children I'm not sure where the line is between occasionally helping a child out and enabling them. We've seen retired parents destroy their financial security by bailing out their children from there poor choices. A good litmus test is to ask yourself: Are you preparing your children for the path, or the path for the child? Starting or investing in a small business Starting a business or investing in a new venture is exciting. Be careful. They all sound exciting at the start but most small businesses fail. Retirement is not the time to invest a lot of money in an entrepreneurial dream. Buying expensive lifestyle toys (vacation home, R.V. or land) Go ahead and dream big but be careful about spending big money on your retirement toy. It's very common to see older retirees saddled with debt on an expensive R.V. or vacation lot that isn't used and worth a fraction of the loan amount. Sticking your head in the sand when it comes to your financial life Not being aware and willing to address the financial realities of your retirement is a sure way to screw it up. Retirement Tip of the Week Complete your estate plan. Yeah it's boring and can cause some uncomfortable conversations, but get it done. Please. Tips to getting the estate planning questionnaire done: * Don't try to do it at home * Set an appointment with your spouse outside of the house to complete * Have your advisor or a trusted friend interview to complete it Tips for Keeping it up-to-date: * Review it once a year with your spouse and trusted advisor * Review the same time each year (like a holiday or annual family gathering)

This week I speak with Burt White, Chief Investment Officer of LPL Financial. Burt and I discuss LPL's mid-year outlook titled The Investor's Almanac. Burt and his team do a great job simply communicating the economic and investing environment.  Their Investor's Almanac is a great tool to help us invest wisely.  No bold predictions or market calls here, just easy to understand insights you can use to make better informed investing decisions. If you'd like a free copy of their Investor's Almanac you can access it in the Retirement Answer Library. In this episode we discuss: * how to use investment outlooks to Invest Wisely * where the U.S. is in the economic cycle * where they see potential risks and opportunities * how international markets are not in sync with U.S. markets * why you should consider harvesting high quality bonds * possible alternatives to traditional fixed income * places to find income * super themes that should provide a benefit the U.S. economy * the importance of turning off the worry factory of financial media Retirement Tip of the Week:  Designating a Trust as a Beneficiary of an IRA Last week a client called requesting the beneficiary of his Individual Retirement Account (IRA) be changed to a trust. This planning strategy has become more popular over the last few years. This strategy for IRAs can has some benefits if the ultimate beneficiary is: * a minor child * someone with special needs * a spouse from a second marriage * a spendthrift with poor financial skills The trust can help protect the inherited assets and better control how those funds are used by the beneficiary of the trust. Be careful using this strategy, though. Done incorrectly, the strategy could conflict with IRS rules and possibly create big tax problems. It is important the attorney drafting the trust be familiar with certain aspects unique to inherited IRAs. Some things to consider are: * Make sure the beneficiaries of the trust are people. They cannot be non-persons (like a charity). * Consider adding language specifically prohibiting distributions to non-persons. * Make sure it is a Conduit Trust. It should include language that requires the distribution from the trust to the beneficiaries of the Required Minimum Distributions (RMDs) coming from the inherited IRA. * If there is more than one beneficiary, consider having a separate trust for each. This will also allow each trust beneficiary to use their own age for required minimum distributions. Find the podcast valuable? Help others discover it by subscribing in iTunes and leaving a review.  I would consider it a great favor.

"I worry" I talk to a lot of people about retirement. Not only clients but most everyone I meet over age 50.  I'll always ask them what their #1 thought is on retirement. I've learned a lot from this exercise. The most important thing I've learned is that people worry about retirement....alot!. They worry about: * all the uncertainty * living without a paycheck * inflation * running out of money * maintaining my standard of living * my health and healthcare costs * being a burden to my children * long-term care costs * losing money in the markets * the economy * my country In this episode, I'll show you how to come to terms with your worry and the uncertainty about retirement. Once you've done that, you'll be free to build a system to manage through the uncertainty in your life. I discuss: * Market uncertainty * Economic uncertainty * Uncertainty in your life How to begin to manage it by: * Scheduling "little conversations" * Using checklists * Making lots of little adjustments as your life unfolds during retirement Building this structure is really what this blog, the Retirement Answer Library and podcast is all about. Retirement Tip of the Week The importance of tax diversity on your balance sheet as you near retirement. If you're within 5 years from retirement, why it may make sense to significantly lower the amount you save in your 401(k) retirement plan. Resources Discussed * The Retirement Answer Library * Tax Deferred vs. Taxable Savings Calculator Enjoy the Podcast? A big THANK YOU to Dean for sending me your kind note, thanking me for the podcast and Retirement Answer Library. So glad it's been helpful to you. It really means the world to me.

“How do I understand Social Security and Medicare?”  This is a question I hear most often from people planning for retirement. Social Security and Medicare benefits will play a big part in your retirement.  In this episode we begin to unwrap both and start to build a framework for you to make decisions about your Social Security and Medicare benefits. I say we “begin” intentionally. In future episodes, we’ll continue to improve your understanding of your Social Security and Medicare. Announcements * If you enjoy the podcast, I would consider it a great favor if you subscribed in iTunes and left a review. This helps others discover the show. * Last week I announced my Retirement 2.0 project. This is my initiative to redesign the retirement planning process to serve you better.  To help, go here and share your thoughts on retirement. Retirement Tip of the Week I suggest you visit and explore our government's Social Security website. It is an easy to navigate useful resource to help you manage your Social Security benefits. YES, I just said “useful” and “government” in the same sentence. They did a great job designing the site.  You can easily: * Apply for benefits * Check the status of an application * Set up direct deposit * Estimate your Social Security * Estimate your spouse’s benefit * Sign up for your Social Security benefit * Set up direct deposit * Access their Retirement Toolkit (a great PDF document that outlines key dates for Social Security and Medicare) Unwrapping Medicare: The Basics This week I talk with Misty Kimbrough, a local insurance expert about the basics of Medicare. She outlines the basic parts of Medicare and the 3 most common missteps people make when planning medicare benefits for retirement. Part A “major medical” coverage covering health care costs at hospitals  Part B Covers the costs of health care outside of a hospital. Doctor visits, outpatient procedures, x-lab test and related services Medicare Supplements (Medigap) Part C Medicare Advantage Plan Part D Prescription Drug Plan 3 Common Medicare Missteps  Resources Discussed * Social Security website * Medicare website * Medicare Plan Finder * Retirement Answer Library * Red Apple Insurance Enjoy the Podcast?

I Hate Keeping a Monthly Budget. Yes, I know that keeping a monthly budget is personal finance 101.  Over the years I've tried, repeatedly, to track every expense in a monthly budget. Each time I failed after a few months. It's just too much work. I have better things to do than be a part-time bookkeeper. Do You Hate to Keep a Monthly Budget? Tracking all your expenses is easier than ever. Programs like Quicken and Mint have powerful accounting tools in simple to use packages. Still...most of us don't track monthly expenses or keep a monthly budget for one simple reason:  we have better things to do with our time. In this episode, I walk you through my budget system which gets you 80% of the benefits of detailed budgeting, without all the work. In just four easy steps, you can take control of your spending and capture the excess income as savings. I Call It the Cash Flow Bucket System. The advantages of the Cash Flow Bucket System: * You don’t waste time tracking every transaction. * You have less stress deciding how to spend money each month. * You don’t spend money just because it’s there. * You easily capture (save) excess income as savings. * You can make smarter decisions on allocating savings. * You maintain flexibility for unexpected expenses. Try It and Stop Feeling Guilty About Not Keeping a Monthly Budget I've added a worksheet to the Retirement Answer Library to walk you through the process. It's free, just sign up here. The Retirement Tip of the Week I give you Sammy's 5 secrets to living a happier retirement. These are worth listening to! Here's Sammy. Doesn't she look happy? Enjoy the Podcast?

Deal with Death By Celebrating Life Last week, I wrote about my sister's passing and her wish that her family have a "Celebration of Life" picnic (you can read it here). In this podcast, I share my thoughts on my sister's choice and one way you can deal with death by celebrating life. How to Overcome New Car Fever New car fever is a difficult bug to beat. Everyday, driving, you window shop as you drive, imagining yourself in the car models you see whizz by. Once you're bitten, the fever typically ends with you in a shiny new car. * Remember your priorities * Detail your car at least every other month * Pay for a complete car wash once per week * Buy a some key accessories to refresh your cars look A Useful App to Help You Identify Spending Habits Once every two months you should track your spending habits with an app like Expensify to: * Create an opportunity to discuss spending habits * Reconcile your spending habits with your stated financial priorities * Identify wasteful spending habits * Keep you and your partner accountable to each other Want to Win a Free Book? I'm giving away a free workbook to help you write your life story. Be the 20th person to submit a review in iTunes and you'll receive Donald Miller's Storyline 2.0. When you complete the Storyline process, you’ll have a life plan that will give you clarity and direction for living a great story.   Resources Discuss * Storyline 2.0 by Donald Miller * Expensify * How to Budget * How My Sister's Death Became a Celebration of Life

How to manage cash flow during retirement is probably the question I am asked most often. When you retire and stop receiving a paycheck each month, how you manage drawing from your savings can have a big impact on your financial health. In this episode, I outline the method we use with our retiring clients. It is called the Cash Flow Reserve system. I also explain why it is important that you ask your Financial Advisor if they have a written succession plan. Less Than 10% of Advisors Have a Succession Plan This is a scary number considering that if your advisor is unable to serve you due to injury or death, the retirement plan you’ve put in place could be in jeopardy. * Who will service you? * Who will advise you? * What communication will you receive? * Who will manage your assets? * Is your plan well organized? These are just some of the important questions that you need answered to ensure your retirement plan is not disrupted. I discuss: * the importance of asking your advisor about their written succession plan * what items to look for * the communication plan that should be in place * how to protect your retirement plan in the event your advisor is suddenly unavailable. This month, I’ll post a checklist in the Retirement Answer Library of items you should look for in your advisor's succession plan to assure you're protected. Listener Question:  Lynn asks, “How do I manage my cash flow without a paycheck during retirement? Not receiving a monthly paycheck during retirement can be unnerving. In retirement, it is important to have a system draw from savings and still feel secure about your financial future. I outline the Cash Flow Reserve system we use to help clients cover their retirement expenses.  It's simple and something you could do yourself. The Benefits to You: * It can help you feel safer about meeting your needs * It provides a margin of safety during turbulent markets * It positions you to make smarter financial decisions * It gives you more flexibility to adjust as conditions change * It helps you sleep at night How It Works: * Checking Account—To pay your lifestyle expenses * Cash Reserve Account—Maintain 2 year’s expected living expenses and distribute a monthly “paycheck” to your checking account * Extraordinary fund—Maintain cash reserves for extra expenses you will incur over the next 12 months * Long-Term Investment—Long-term investment assets that include bonds maturing in 3-5 years * Review and adjust every 6 months This week I’ll post a detailed outline on how to build your Cash Flow Reserve system  in the Retirement Answer Library Resources Discussed Retirement Answer Library Enjoy the Podcast? You can do me a big favor by subscribing in iTunes and leaving your honest review. This would help bring more listeners and questions so we can all work together to PLAN WELL and INVEST WISELY for retirement.

Working during retirement could be the best thing you do to find meaning, stay healthy and earn money while doing what you love. In her book, Second-Act Careers: 50 Ways to Profit from Your Passions During Semi-Retirement, Nancy Collamer has created a great resource for anyone wanting to take their passion and earn income from it during retirement. Nancy Collamer is a speaker, career coach, and author who writes a semi-monthly career column for NextAvenue.org (PBS) and Forbes.com. Her home on the internet is mylifestylecareer.com. In This Podcast We Discuss: * Why second-act careers are a second chance to do what you love * How Baby Boomers will change the concept of retirement * Why it is important to fill your days with meaning * How to blend your passion and work to live more fully during retirement * How part-time income during retirement can allow you to retire earlier * How to take things you love (like travel) and make money doing it during retirement * How to test drive retirement work options before committing * Examples of others that are doing what they love during retirement and earning an income * Common mistakes retirees make with second-act careers Also, 4 Reasons You Should Completely Ignore Extreme Market Predictions Want access to the free Retirement Answer Library? Last week, I  introduced a great resource to help you find the answer to your retirement questions. The Library includes worksheets and checklists to help you plan for and live in retirement. Each month new resources are added based on client and reader questions. Together we can build a library to Plan Well and Invest Wisely for retirement. Gain Access Here Resources Discussed * My Lifestyle Career website * Second-Act Careers: 50 Ways to Profit from Your Passions During Semi-Retirement, by Nancy Collamer * The Retirement Answer Library * Nextavenue.org, online magazine for people over 50

Jeff Goins doesn't want to miss his life. And he doesn't want you to either. In his latest book, "The In-Between: Embracing the Tension Between Now and the Next Big Thing" Jeff reminds himself and us that most of our lives are spent "in-between" the big things. It is in these moments we can find opportunities to live more fully. In This Podcast We Discuss: * Practicing being present in your life * Regrets and how they can lead to positive change * Managing the nature tension between living well today and planning for tomorrow * Jeff's thoughts on retirement and his retirement plan * The portfolio of life concept of living * The prediction that, by 2030 over half of the population will be working as freelancers * Embracing that life is a journey, not a destination Also, I Answer a Listener Question"When Should I take Social Security benefits?" Want access to the free Retirement Answer Library? Last week, I  introduced a great resource to help you find the answer to your retirement questions. The Library includes worksheets and checklists to help you plan for and live in retirement. Each month new resources are added based on client and reader questions. Together we can build a library to Plan Well and Invest Wisely for retirement. Gain Access Here Resources Discussed * When to take Social Security * The In-Between, by Jeff Goins * The Retirement Answer Library * The Age of Unreason, by Charles Handy

Want a great gift for a graduating high school or college senior? Jon Chevreau’s book, Findependence Day, is a great gift that teaches important financial lessons within an interesting fictional story of a young couple walking through life. In  This Podcast We Discuss: * The definition of financial independence * Retirement vs. financial independence * Life energy and the cost of spending * The war against consumerism * Why it’s harder to save than it used to be * The danger of paying too much attention to financial media * The call to action of “Freedom Not Stuff” Are Your Password Safe? On this podcast, I tell the story of a recent cyber attack on a client. Last week a client of ours had his e-mail hacked. The hacker then requested a wire from the client's account. Our security measures prevented it (Thankfully).  The story should make you seriously consider being more diligent about using strong passwords.  I explain how I manage my passwords. Want access to the free Retirement Answer Library? This week we introduced this great resource to help you find the answer to your retirement questions. The Library includes worksheets and checklists to help you plan for and live in retirement. Each month new resources are added based on client and reader questions. Together we can build a library to Plan Well and Invest Wisely for retirement. Gain Access Here Resources Discussed * The Retirement Answer Library * Money Sense Magazine * Findependence Day * 1Password In Honor of Those That Serve A big thank you this week to Frank Gustafon of One Bold Move for his service and for leaving a review of the podcast in iTunes. Frank is a Marine and has a great podcast for Service Members. Lead like a Marine is a weekly podcast focused on helping Marines and other Service Members translate their leadership skills and abilities as they transition back into the civilian job market.  We interview those who “have been there and done that”.  Great stories of successful transition into the civilian marketplace. If you enjoy the podcast and are so moved, I sure would appreciate a honest review in iTunes. It would help us build the Plan Well community which helps everyone make smarter financial decisions Happy Memorial Day Friends

Johns Hopkins University's Center for Innovative Care and Legg Mason recently issued a study titled "Aging and It's Financial Implications: Planning for Housing. Kathleen Pritchard, Managing Director with Legg Mason, talks with host Roger Whitney about the importance of planning ahead for housing during retirement. Retiring Baby Boomers Will Have Major Implications to Housing Demand * 10,000 baby boomers will turn age 65 each day for the next 19 years * Between 2010-2030 77% of housing demand will be driven by those over age 65 * There may be a "great housing glut" as baby boomers transition into retirement * Boomers will demand different types of housing than they have in the past * Most baby boomers want to age in place but may have to transition in later years of retirement There are Three Typical Phases During Retirement The: * Go Go Years--when you are healthy and active (60s & 70s) * Slow Go Years--when you slow down due to health issues (70s & 80s) * No Go Years--the late retirement years (80s & beyond) By planning ahead for each of these phases, you can make smarter financial decisons and maintain control over your lifestyle choices. Retiring Baby Boomers Will Have Major Implications to Housing Demand * 10,000 baby boomers will turn age 65 each day for the next 19 years * Between 2010-2030 77% of housing demand will be driven by those over age 65 * There may be a "great housing glut" as baby boomers transition into retirement * Boomers will demand different types of housing than they have in the past * Most baby boomers want to age in place but may have to transition in later years of retirement There are five basic housing options for retirees: * Aging in place (Home Safety Assessment) * 55+ independent living communities (Due Diligence Worksheet) * Continued care retirement communities (CCRCs) (Due Diligence Worksheet) * Assisted living facilities (Due Diligence Worksheet) * Skilled nursing facilities (Due Diligence Worksheet) Where Do You Want to Live During Retirement?  Tell me here.

"He who asks a question is a fool for five minutes; he who does not ask a question remains a fool forever." - Chinese proverb   There really are no stupid questions. We're told this all the time but I don't think most of us truly believe it. As a result, we leave many very important questions unasked.  When your planning for your financial future this can be, at best, an inconvenience, at worst, financially devastating. Ask lots of questions. Be the four year old that isn't afraid to ask ANYTHING. Whether you're currently in retirement or just beginning to plan for it, asking lots of questions will empower you to find solutions. The mission of this blog and my podcast, PLAN WELL INVEST WISELY, is to help you make smarter financial decisions and answer those retirement planning questions that keep you up at night. Have a question? Ask me here In this week's episode, I answer questions from three listeners. * Sam Asks “How do you even go about coming up with a plan to pay down debt when the future holds student loan debts for two children in the next few years? Basically, What realistic steps could a family take without completely changing their lifestyle?" * Lisa Asks “I wondered if at some point you might touch upon establishing the necessary documents for elderly parents?” * Kevin asks "What is the best way to consolidate all of the retirement accounts I've accumulated over the years and find good advice to help me plan for retirement? Resources Discussed * Dave Ramsey's Seven Baby Steps * How to Pay For College HQ * Debt Free U: How I Paid for a Great College Education without Loans, Scholarships or Mooching Off My Parents * AmeriCorps * Creating an In Case of Emergency (ICE) Plan * Nine Important Estate Planning Steps * How to Choose a Financial Advisor Have a retirement planning question you'd like answered? Ask me here.  

Over the last 20 years studies show that the average investor greatly under performances the stock and bond markets.  Why do investors underperform virtually every capital market? In this week's episode, I speak with Weston J. Wellington a Vice President with Dimensional Fund Advisors about how you can make smarter investment decisions and possibly improve your investment success. Mr. Wellington is an expert in behavioral finance and investing with over 35 years of experience in the investment industry. We discuss: * How the daily diet of investment news can hurt your investing success * Why it's nature to want to know what will happen next in the investment markets * The affect our ingrained "fight or flight" response has on our investment decisions during stressful market periods * Why your behavior as an investor can be the biggest determinate of your investment returns * Why this time is not "different" * Like living a healthy lifestyle, investing is not complicated it is just hard to do consistently * Why using a competent Financial Advisor can help you make smarter investment decisions * How an investor can increase their chance of having a successful investment experience * Why you should ignore most market information and news driven investment predictions Resources Discussed * Dimensional Fund Advisors * Random Walk Down Wall Street * Weston Wellington Articles Surprise! No Sell of in 2013, "You Have to Be in Gold", He Called the Crash In next week's episode, I'll start answering reader and listener questions on investing and financial planning. Have a question?  ask me here.

Walt Disney World is the classic family vacation. If you’re planning on visiting Walt Disney World this year, you’re going to love this week’s podcast. I speak with Lou Mongello, an internationally recognized expert on the Walt Disney World Resort. Lou is a former attorney from New Jersey who has made his lifelong passion his full time career. His website wdwradio.com is an amazing resource for all things Disney.   In this episode we discuss: * His book, 102 Ways to Save For and At Walt Disney World (http://Disney102.com) * How to save money on your Walt Disney World vacation * The best and worse times to visit * When Disney World is busiest * When it costs less to go * How to begin planning your Walt Disney World vacation * How to plan maximize your time and still have fun * Discount ticket sources * The advantages of the Disney annual pass * How to get discounts on food and lodging * Things to consider when buying your ticket package  (to park hop or not?) * Whether to stay on or off property * Simple strategies to save money on food and drinks at Disney * Saving on Souvenirs * What to pack to make your day at Disney World comfortable Resources Discussed * wdwradio.com * The book, 102 Ways to Save For and at Walt Disney World * Disney Authorized Vacation Planner * Mouse Fan Travel

How to pay for college is one of the most frequent questions I get from parents. This week I interviewed Celest Horton from How to Pay For College HQ to learn about  great resources available to help parents pay for college. Celest knows it's possible to pay for college without student loans (she did it). Each week, on her How to Pay for College HQ podcast she interviews industry experts to help listeners learn what is necessary to plan and pay for college without the assistance of loans. In this episode we discuss: * The need for your teenager to be engaged in the process of selecting a college and applying for aide. * The importance of your teenager to show a "demonstrated interest" in colleges they want to go to so they can improve their chances of receiving merit aide. They can do this by following a college on social media and interacting with the admissions department. * How a high school senior could graduate with 1 or 2 years of college credit by taking duel purpose classes in high school. * What the FAFSA form is and why its important to complete in January each year. * The importance of researching potential college's average SAT scores, tuition and how generous they are with merit aide. Resources Discussed * Scholarshipopportunity.org Online resource for scholarship opportunities to help pay for college * College Navigator Online resources to research average tuition, SAT and aide for colleges * College Data Online resources to research average tuition, SAT and aide for colleges Visit How to Pay for College HQ to receive the free report : Top 5 Things Every Parent Should Know To Pay for College Without Loans.