#31 What You Can Learn From the Retiree Next Door [podcast]

Wouldn't it be great to learn about retirement from those that have retired successfully? Here's your chance. Today at FinCon, the National Conference for Money Media, moneytips.com is releasing the book, The Retiree Next Door. The best part is you can get it for free.

Over the last year, the folks at moneytips.com conducted a survey of over 500 successful retirees. Their objective: to identify clear traits and strategies they used to do so.

Recently, I spoke with Moneytips.com's Michael Dubrow about the project and the lessons you and I can learn from the research.

Take a listen and learn:

Where you can get your free book
How to use the research to plan well for your retirement
How the research was conducted
What the biggest surprises were
How you have more control over your retirement than you may think
The wisdom learned from those surveyed

No theory here, just practical insights into the Retiree Next Door.

[spoiler]

The Retirement Answer Man Episode #31 What You Can Learn From the Retiree Next Door

Hello! Hello, this is Roger Whitney. I am the Retirement Answer Man. Why are we having this special Thursday edition of the show? Ah, now I remember! That’s a great reason. You’re going to be happy you tuned in for this special edition.

Welcome to the show. This is the show dedicated to helping you find that balance between living well today without sacrificing your tomorrow. The reason we’re having this special Thursday edition is because today is the introduction of the book, The Retiree Next Door which is a book based off of research of interviews with over 500 happy retirees, being launched today at a conference called FinCon which is the National Conference for Financial Media, and I wanted to make sure I supported this and I also wanted to let you have access to this book for free by going to the show notes, and I’ll have a link to that.

I’m going to talk with Michael Dubrow from moneytips.com who is behind all of this research and the introduction of this book about what the research was, why they did it, what they hoped to get from it, what some of the great results were and pearls of wisdom that you and I can use to plan well and invest wisely in our lives.

So, that’s why we’re having the special Thursday edition. I think that’s a good reason.

Well, you can find me at rogerwhitney.com – that is the home of the Retirement Answer man and that’s also the home of the Retirement Answer Library which is a library of over 20 checklists and worksheets that I use in my practice that you can download for free to make smarter decisions in your financial life. If you’d like access to this library, just go to rogerwhitney.com, register, and you can have free access to the Retirement Answer Library.

All right. So, before we get talking to Michael about The Retiree Next Door, we’ve got to make sure – and we turn that music down – we always do this, just make sure we have that all-important disclosure.

That is, only you know your entire financial situation so you need to look at this and, really, anything you read or hear on the internet as helpful hints and education. Before you make any decisions in your life, make sure you consult the people that know you best, and that can be your financial advisor, your tax advisor, you legal advisor. That’s not just a great legal disclosure; it’s a fundamental principle of planning well and investing wisely in your life.

With that, I want to get to my conversation with Michael Dubrow from Money Tips to tell you about this great research, The Retiree Next Door.

ROGER: Well, I’m here with Michael Dubrow from Money Tips, talking about The Retiree Next Door which is a new book coming out at the FinCon conference. How are you doing, Michael?

MICHAEL: I’m doing great! How are you doing, Roger?

ROGER: I am excited about this project. I think there’s a lot that we’ll be able to glean from this in terms of retirement planning, looking at what successful retirees do to get there.

MICHAEL: Right.

ROGER: So, what is this project exactly, The Retiree Next Door? Why don’t you give me a high-level view of it?

MICHAEL: Thank you. Yes, the project really has three elements, Roger.

First, it was a survey that moneytips.com conducted earlier this summer. We surveyed over 500 retirees and semi-retirees. It was very comprehensive – more than 30 questions. The purpose of the survey was to uncover the best practices and the biggest mistakes and the takeaways from these seniors about how Americans have prepared for retirement and how they’re living today.

The first of this element is the survey itself. The second is a free ebook that, in fact, your listeners can reserve and download, and I’ll tell them how a little bit later. This ebook showcases the results of the survey with a special focus on the best practices that are revealed in the survey so people everywhere can learn from the experience of the survey respondents. Now, they can learn what worked and what didn’t. Third, The Retiree Next Door is a one-day movement that’s, in fact, taking place today, September 18, where some 100 financial bloggers around the country are writing about and promoting the survey and the ebook so that thousands of their followers can get involved with this topic, can get involved with the conversation which we hope to stimulate and share their own experiences and concerns, and also get a free copy of the ebook to harvest some of the nuggets of the project.

So, it’s those three things – a survey, an ebook, and a movement.

ROGER: Well, I think it’s a great idea to start to get people engaged as to follow the path of others that have done successfully. Now, who came up with the project and who’s involved in this project?

MICHAEL: Great question. We hatched it but you can’t have a movement by yourself. It’s sort of like the sound of one hand clapping. So, early in the concept phase, we approached leaders within the personal finance community, including certified financial planners like Jeff Rose and Cathy Curtis, certified public accountants like (00:05:30 unclear) and Ed Slott, wealth managers like Greg Skidmore and Winnie Sun, and also personal finance bloggers such as Philip Taylor and Bob Lotich. In fact, speaking of Phil Taylor, since I’m speaking to you today from FinCon in New Orleans, Phil is the founder or both PT Money and also FinCon which has, you know, metastasized into this spectacular large and wonderful gathering of the financial industry and the new financial media. So, Phil and FinCon have also had a leading role in ensuring that this Retiree Next Door movement today would be successful.

ROGER: That’s perfect because I know Phil and I know Ed Slott and I know Winnie and I know a lot of those names and they’re all very servant-oriented in their approach to personal finance which is awesome.

MICHAEL: Yeah. Unlike so many financial professionals who kind of act like a brain surgeon and you’re scarcely supposed to ask questions or expose what you don’t know, they want to talk down to you almost from a pedestal. These are the kinds of financial professionals who empower and who educate. And so, I think they really deserve a lot of credit.

ROGER: Wait a second. Are you talking that there are big egos in the wealth management business? Wow!

MICHAEL: No, no, you didn’t hear that from me!

ROGER: In my 24 years of working at major firms and now in my own firm, I’ve never seen that before.

MICHAEL: No, no, of course not.

ROGER: No, I agree with you. I think the democratization of advice and more of a servant-oriented approach is something I think we’re in the evolution of right now, actually, which is really cool.

MICHAEL: Yeah, absolutely, and, if I may just pull on our own suspenders for a moment at moneytips.com, you know, our mission is to democratize and promote the spread of financial information, to remove the cost barrier and the mystic around financial topics as you just pointed out so correctly that legacy financial institutions and many professionals with large egos have perpetuated for so long to justify their high fees and their huge profits. So, Money Tips is all about democratizing this and promoting the spread of financial information and literacy. You know, people are smart. They can successfully take command of their own financial lives.

ROGER: Now, at the end of the day, with the coordination with FinCon and the launch of this Retiree Next Door movement, what would be the one thing that Michael would look back on and say, “This is what I’m most proud of accomplishing”?

MICHAEL: That’s a wonderful question. I would say, Roger, that, as a result of this aggregation of efforts and individuals, if a true financial conversation was stimulated and, if thousands of people around the country took a look in the mirror and spoke to their wives – and their financial advisors perhaps – and thought critically about, “Well, where am I really in my own financial planning?” if we can stimulate that kind of conversation so more people begin to ready themselves earlier in life – and it can be a lot easier than people think to do this, and I’ll give you one example in just a second, if I may – if people have this conversation and begin to take action so that their own retirements are more successful – and their retirement can look very different from what retirement used to look like, it can involve continuing to work, it can involve having a website blog, it can involve a very different kind of lifestyle than it might have meant 20 or 30 years ago but, if that conversation takes place, is initiated, and people begin to take action – I will be very, very proud of this movement.

ROGER: Well, I think that’s going to happen and I think that’s the exact kind of spirit to come with it. Now, you described a little bit of the launch. Do you have anything else that you want to add to that that you have coordinated today at FinCon?

MICHAEL: I guess I would just invite your listeners to go to moneytips.com. On each page, there is a search window, type in “retiree next door” and you’ll find a really cool infographic that summarizes the results of the survey, an article that goes into some depth about it, and you’ll also be able to… I forget if it’s reserve now or if you can actually claim your ebook whether that’s today or tomorrow, but you’ll be able to certainly make sure that you get a copy of the ebook. I would just encourage people to do that so, again, they can participate in this very important conversation.

ROGER: Awesome. Awesome. Now, let’s dig in a little bit into the actual survey. So, you surveyed about 500 retirees. Can you describe briefly the process that you used to gain your learning from these retirees?

MICHAEL: Yeah, we scientifically found and then conducted a diverse representative group of both retirees and semi-retirees. There were actually 510 folks who responded and it was, I think, a 37-question questionnaire. It was very detailed. Between July 23rd and August 31st of this year, these 510 Americans, through their responses, revealed how they saved, invested, planned for, and are now living out their golden years.

They talked about what had worked best, what their biggest mistakes had been, and we also asked a number of questions to have them share their own views about how happy they are and how successful they think their retirement is being. We learned some interesting things that, qualitatively speaking, retirement wasn’t just about money; it was about family, it was about fulfilling one’s personal interests, about serving community. It wasn’t just about money.

We also learned, interestingly, that you don’t have to have a fortune necessarily when you retire to still consider yourself happy or living successfully when you are retired. We found that 44 percent of those who self-identified as happy and as successfully retired in the survey retired with $500,000 or less.

One other key finding, just while I’m on that subject, and this was the most disturbing finding, Roger, was that nearly half of the respondents said that financial concerns do keep them up at night and that the ones who were not in that group were the ones who tended to start saving earlier and more methodically, and the ones who hadn’t were the ones who tend to, not surprisingly, have more of those sleepless nights today.

ROGER: Yeah, that’s definitely one of the bigger findings. Also, it makes sense, especially with the messaging around retirement, I mean, anything that we read or hear about when it comes to retirement, it almost feels impossible and I think that’s a pretty interesting insight that you don’t have to have a huge nest egg to actually be able to retire happily.

MICHAEL: Yeah, that is such an important point you just made that, you know, it can look like we’re standing at the base of Mount Everest and looking up at it, but one of the resounding findings of this survey is that, if you start early enough and simply invest incrementally, it can be very modest, it’s amazing what you can have in the end, and I’ll give you one example.

Money Tips just ran an article and a video, your listeners might want to search for this on the site as well just because it’s a lot of fun. There’s about a two-minute video that I think is going semi-viral on YouTube right now called the “$300,000 NFL Ticket” and it basically shows that, if you just took one year of an NFL season ticket, you’re required to go to eight regular season games – or pay for, I should say – and then two pre-season games, that’s ten games. The average seat – and we’re not talking great 50-yard line seats; we’re talking not great seats -- $110 per seat in the NFL so that’s $1,100 for just the tickets. If you add in parking and modest refreshments at the game, it’s $1,600 - $1,700 to have one season seat in the NFL.

Well, if you take $1,700 - $1,600 and invest it in your company 401K throughout the year and you add in the employer match and you add in, if you invest the actual tax savings that you get from this, this one year of $1,600 - $1,700 invested into your 401K turns into $17,000 in 30 years. If you’re to do the same thing, whether you’re giving up NFL season tickets – we don’t mean to take on the NFL, but – if you drink two Budweisers a day at your local bar or if you have two vente mocha frappuccinominos – whatever they call those – at Starbucks, if you give up just one of those two coffees or one of those two Budweisers or martinis a day and you put that money in your 401K, you’ll see, if you go to Money Tips and look for this piece, you’ll see it can turn into $600,000 in 30 years when you retire. That doesn’t take genius. That doesn’t take unbelievable sums of money to stash away. It just takes the discipline to do it.

ROGER: Michael? Michael, I need to stop you here.

MICHAEL: Why?

ROGER: Because you’ve really hit a sore spot. I actually did that calculation with lattes because I had a serious latte addiction for a long period of time and I did that calculation on how much I was spending on a daily basis for lattes and what that was really adding up to. I am happy now, I’m reformed, I have kicked my Starbucks habit for the most part but that’s a very important point of opportunity cost and just understanding the numbers. It doesn’t mean you don’t stick with the NFL tickets in your scenario but, having the proper framework to understand the trade-offs that you’re taking by doing those tickets, that’s an informed decision.

MICHAEL: Right.

ROGER: Now, an interesting tidbit from the survey I saw was the vast majority of happy retirees said that they budgeted either on a monthly, annual, or daily basis. I think only 38 percent didn’t budget at all.

MICHAEL: Yeah.

ROGER: Which goes back to that same issue – putting a name on every dollar and understanding what the trade-offs are of every spending decision. What happens is just that slow decay over time if you don’t think about it consciously.

MICHAEL: Yeah.

ROGER: Yeah, that’s a very good point.

MICHAEL: Yeah. You know, it’s all about making informed choices, as you’ve just put it, I think, so well. That’s really what this movement and this survey is about. It’s about hopefully inspiring and instigating a conversation and a sober but warm spirited appraisal of where we’re at in our lives and what we need to do.

The good news is anything in life – it’s almost anything, I don’t care if it’s cleaning your room when you’re a kid or doing your homework or facing an unpleasant task when you’re an adult – and that is thinking about anything tends to be a heck of a lot worse than actually getting off your fanny and doing it. That tends to be true with retirement savings and planning as well. You know, as a nation, as a culture, let’s get off the couch and do small things with discipline and make informed decisions and we’ll all be a heck of a lot better in the end.

ROGER: Now, the other thing that I noticed was that 64 percent of those surveyed kept and calculated a net worth statement which is ultimately the accumulation of all those little decisions – a latte or NFL – and I was going to ask you about the wisdom gleaned from this survey and The Retiree Next Door project but I think that’s it, isn’t it?

MICHAEL: It is.

ROGER: It’s about being empowered and living intentionally and realizing that you have a lot more control over your financial future than you think you do. It’s not about the stock market. It’s not about Syria or the economy or which president is in place. You have control over the levers that really make a difference in your life if you choose to live intentionally about them.

MICHAEL: Yes, exactly. Really then, what you’re saying is it’s a state of mind. It’s an awareness. It’s a consciousness that you not only should but that you can take control of this and all of your work in this field, the Philip Taylors of the world, hopefully Money Tips can play its own small role in this, is to help people feel empowered rather than – as was so for decades and generations the case with the legacy financial profession and even the financial media – keeping people disempowered, telling them, “No, you need all of this high-priced advice and paraphernalia over here. You can’t do this yourself.” The fact is you can and I thank you, Roger, in your work for helping to democratize financial information and to awaken people to the fact that they really are powerful.

ROGER: Definitely, they are. So, what can people do? Now, obviously, I can’t wait to get a hold of the book. So, how do people get a hold of the book and some of the research and get connected in this movement?

MICHAEL: Send a $1,000 check to Michael Dubrow.

ROGER: No!

MICHAEL: No, no, teasing, teasing. No, it’s so easy and it’s free. You go to moneytips.com and, as I said, there’s a search field on every page. While you’re there, if you want, feel free to take advantage of one of the coolest features that Money Tips has which is Ask an Expert. You can type in a question on any financial topic – it can be investment, retirement-related, mortgages, taxes, insurance – and we will get an answer for you from a bona fide licensed professional within 24 hours, free of charge. So, just forgive that naked plug but it really is fun for consumers to be able to take advantage of that kind of advice for free. But, while you’re there, type in “retiree next door” and you’ll be able to learn all about this movement and survey and you will be able to download the free ebook.

ROGER: Great. I’ll have links on my website that’s connected with this interview.

Michael, thank you so much for talking with me today. It’s an awesome project. I really like it.

MICHAEL: Thank you, Roger. We really appreciate your support and your time today. Take care.

Well, that sounds like an awesome project, The Retiree Next Door. I will have links in the show notes showing how you can get access to this book for free and give you some resources and links over to moneytips.com if you want to learn a little bit more about what they’re doing over there.

Thank you for joining me for this mid-week edition of the Retirement Answer Man.

Until – I guess – Monday, plan well and invest wisely.