transcript
Speech-to-text transcription can look a little quirky. Please excuse any grammar or spelling errors.
Episode #483 - Listener Questions: “What Retirement Planning Software Should I Use?”
Abraham Maslow said that “there are no perfect human beings.” And you and I are not going to be the first ones.
INTRODUCTION
Well, hey there.
Welcome to the Retirement Answer Man Show. My name is Roger Whitney, I'm your host. This is the show dedicated to helping you not just survive retirement, but to do the work so you can have the confidence and lean in, and rock retirement even in a recession or a bear market or whatever life throws you.
We're going to get to more of your questions today. Before we do that, a couple quick things. I hadn't talked about the books that I completed in March. We've had a lot of fun talking about books, and you have been sharing with me, many of you, great books. So, my list of books to read is getting longer and longer and longer.
March was a little bit of a light month for me book completion wise. I read two by Admiral William McCraven, Make Your Bed, which was a very quick read, 10 lessons to pretty much rock life. 10 lessons you need to know. Lesson one, start each day with an accomplishment, and he talked about making your bed. Success requires teamwork, what's inside counts, et cetera. Very quick read, great book. Just as a reminder, you can complete this book in a day.
The second book that I read was also by William McRaven called Sea Stories that had stories of his career with lessons, life lessons and wisdom around it.
It was a really interesting read because it's an area that I'm not familiar with and I like that kind of stuff. So, two great books with a lot of wisdom on how to live a better life.
The third book I read was Build by Tony Fidel. Tony Fidel was instrumental in the creation of a lot of things. The iTunes store, he worked at Apple, the iPhone, and then the iPad, and then he moved on and helped create the whole Nest ecosystem. What I really appreciated about this book was it was about building a business in an unconventional way, which is sort of fun for me to think about.
What I appreciate about Tony's perspective was it came from a design perspective and how important design and the architecture of things is to the experience that people have. One great example he gave when he was talking about Nest, which was the smart thermostat, he reinvented the thermostat essentially from something that's very boring and not very efficient.
The fact that they included a screwdriver when you purchased a Nest thermostat that was branded and it was from a financial perspective, didn't make any sense. It increased the unit cost. Logistically, it just didn't make sense from a business perspective, but from an experiential perspective, it meant a lot in terms of building the culture of the company and the brand. So, I really appreciated that. But so those are the three that I read. My mind is in strategic planning and creation because we've just recast the vision for the club and the podcast and our financial planning practice, and we're going to have the retreat here at the end of May. So, I've been in this thinking mode around these things.
So far in April this month, I've actually finished a lot of books, so I'm excited to talk about those things next month, and this is sort of how it works. I tend to read three or four books concurrently, and I'm getting through a lot of them. I've been on a plane traveling, meeting potential advisors. We actually just hired our financial advisor for our practice, which I'm really excited about. It was a very difficult decision. I've been on a plane a lot. That helps me complete a lot of books, so hopefully you've read a lot of great books and I'm excited to hear what you share. We'll put links to these books in our 6-Shot Saturday email.
Now, if you are looking to create a retirement plan that you can have confidence in and surround yourself with amazing people to be your cheerleaders and your coaches along the way, join me on May 11th, I think we have one other date that we're going to have an open house to talk about the four phases of a great retirement plan and as well as explain the Rock Retirement Club and how it can empower you to create a retirement plan that you can have confidence in.
We'll put links to sign up for that live webinar, open house where I am going to chat with you about four phases of a great retirement and show you the club, or you can go to livewithroger.com and hang out with a lot of awesome people. With that, let's move on to your questions.
LISTENER QUESTIONS
Let's get to some of your questions. If you have a question for the show, go to rogerwhitney.com/askroger, and you can leave an audio question, you can type in your question. You can just say, howdy. That'd be cool.
QUESTION ONE
Our first question comes from Bill.
Bill says,
"I discovered your podcast following your interview on Morning Stars, The Long View and have been working my way through the archive ever since.
It covers a lot of topics and is incredibly informative."
Awesome, Bill, welcome to the show. We are excited you're here. We have a good group of people here.
Bill's question.
"I have a question about retirement planning software, specifically Monte Carlo Scenario Planning. There are obviously many options out there with varying levels of detail, flexibility, and price.
I have used the basic free version of New Retirement and others. I know that the RRC has access to Money Guide Pro, but this is geared towards financial advisors and very expensive. Are there any retirement planners that you would recommend with the ability to do detailed planning and good alternative scenarios at a low cost?
In addition, how does New Retirement Planner Plus Compare with Money Guide Pro Elite. Thanks for your help, Bill."
That was a good question, Bill. I have not done a survey in a long time of consumer facing retirement planning calculators, mainly because it's not my business, it's not what I do for a living.
I've used Money Guide Pro for well over 10 years as my core retirement planning software engine. I've also used New Retirement Planner Plus; we had that as a benefit for our RRC members. We pivoted and now give free access as a member to Money Guide Pro Elite. The reason we did that was twofold, really, is that the Monte Carlo engine within Money Guide Pro is just much more robust because it's a more mature product. It's been around for decades. It's the most widely adopted retirement planning software by financial planners. So, it's just been around for a long time, and so they've been able to iterate.
New Retirement Planner Plus at that time had a Monte Carlo engine, but it was in beta, and I didn't quite understand where they were going with it, and so it made sense to use something that was more mature.
The second reason is I use it in my practice every day and so there's a lot of institutional knowledge of how to just use it and make it sing and understand what it can do and what it can't do, and how to adjust it to model certain situations. I wanted to bring that to bear as I integrated it into the Revised Masterclass where I teach people like you how to build a retirement plan of record.
So, it just made sense. That said, if I were to use a public facing retirement planning calculator and I wasn't in the Rock Retirement Club, I would use New Retirement Planner plus. You're going to hear from Steven Chen a little later on this episode where he's going to give us an update of where they're at in their developmental journey in regard to Monte Carlo scenario and doing what if scenarios.
So that's where I'm at on that Bill. Now you asked two good questions. One is Monte Carlo scenario planning, that's important and you want to have a system that's well thought out.
I've used two professionally in my 30 years in retirement planning. Finance ware and Money Guide Pro, I've tested a ton of institutional level Monte Carlo scenario planning for retirement planner. There is a difference in the details of how these things are created because there are so many assumptions that are unseen that create the results. And so, I used to be a Monte Carlo snob because those details are really important.
I've sort of settled into my process and what I'm comfortable with. I understand it more and I'm not as worried about it as I used to be, and the second thing that you hit on Bill that I think is important is the ability to create what if scenarios. Most people and retirement advisors to be honest, I think misuse Monte Carlo scenario software in how they plan out a de-accumulation plan, at least in my experience and in discussions I've had, is that it's not a deterministic tool to justify an investment strategy and it shouldn't give a false sense of confidence that the plan is totally fine.
Really how it should be used, in my opinion, is as a decision-making tool of like you would use a compass. Are we still going to be okay? The value of the tool is in using it within a broader retirement planning process that you iterate, or you use it consistently over a long period of time. That's where the real value is to help inform your decision making. Because if it says you're 99% confident, your life is going to be fine. You're never going to run out of money. Well, it just isn’t so. Next year, if inflation spikes and you have higher expenses and the market goes down and all sorts of things happen, that could change dramatically.
That's why I believe in an agile approach and this ability to do what if scenarios as critical because a year from now, we don't just build a de-accumulation plan in a vacuum. Here is my de-accumulation plan and how I'm going to spend money for the rest of my life, and then you just execute the plan over 30 years. It doesn't work that way.
What's going to happen is next year or the year after, you're going to say, no, I don't want to spend my money that way. I need to add this, add that, take this out. You're going to pivot so many times and readjust the plan based on just what you want out of life, that you need something where you can create what if scenarios to help model all of these pivots along the way.
So, you're smart to think about that. Yes, you want to find software that you can feel comfortable with, that you know how to use really well. That's why we switched to Money Guide Pro and why we integrated it into the course, and you want to have software that is part of a larger decision-making process or retirement planning process.
What's interesting, Bill, is, even in my practice, most of this software gets you to the last mile. But in retirement planning, I am in spreadsheets as much, if not more than in the software. I use the software for long-term projections to inform the decision making and possible strategies. Then I move to excel and templates that we use to really dive into the details of how I'm going to execute that strategy on the near and midterm and those templates we use within the masterclass as well. So even the software is going to force you to go to spreadsheet if you want to get really detailed with it. So hopefully that helps, and the chat with Steven should give you some more insight and welcome to the show, buddy.
QUESTION TWO
Our next question comes from Michael regarding dividend investing. So let's listen to Michael's audio question.
Michael: I have been listening to your podcast for about nine months right now trying to educate myself. I am a retired teacher, since May of 2022. Took early retirement so I can babysit my grandkids in a different city. I've been looking at financial advisors in the city I'm living in right now.
I took a pretty big hit, like probably other people did in 2022. Not a great year to retire. So, I'm looking to preserve my savings right now what I have in retirement, I really don't want to see a decline like that like I had last year. So, I've looked, talked to a couple of financial advisors up here and they have talked about some dividend portfolios where I take my investments, we put them in dividend stocks, and I can either take the dividend or reinvest the dividend. I'd probably reinvest them right now because I don't need them right now. Both companies have said that the downside is very, very low on this. Supposedly the upside though, isn't as strong as if the money was in the market. So, I'm not going to be making home runs, let's say on investments, but I'm not going to have a year like I did in 2022.
I don't know much about these investment categories as far as this dividend plan and wondering if you can give me a little bit more information on that. Thanks.
Roger: Hey, great question Michael. And what a great privilege to be able to retire early, to be grandpa to your grandchildren. That's awesome, congratulations.
Unfortunately, you did that in a bear market hit. So, from an internal standpoint, that has to be a little disconcerting. You retire, you lose your income. You're spending money from your assets in some way. You're not sure about the rest of your life, and you have a bear market, and it's like, oh my goodness, the perfect storm hits.
So take a breath. I know it's stressful, now it's just managing through this and having a good process you can think through. Will I be okay? What does this impact have? Where can I take advantage of this? You're being active. You're being proactive about that, which I love.
Now let's talk about dividend investing, specifically dividend stocks, which you mentioned. Dividend stocks are essentially a company stock equity that pays a dividend, which is a form of payment to the shareholders, the owners of the company, and they'll pay that dividend every single year. Some companies don't pay dividends, a number of companies don't.
Historically, if you look at the returns of, say, the S&P 500, the dividends are a major component of the long-term average return of even the S&P 500, which has about an average of, I think about a 2% dividend right now. If you lean towards stocks that favor paying dividends more, maybe you'll get a 3-4% yield, and that can be a component, Michael, of your entire retirement strategy.
What I'm concerned about in your question is this. You had a bad year last year, so it sounds like you were still invested in accumulation mindset, and probably in hindsight were more aggressive in terms of the investments you had than you really wanted to be now that you are without a job and there's this big transition from going from accumulation to de-accumulation where the whole game is different, you want to think about things differently and it's not unusual to sort of carry the old strategy into the new life. Now you're looking, how can I not have such a severe downturn potential so you can feel more secure about your retirement, I assume.
Now you've gone and you've looked at advisors. I'm a little concerned about what both advisors are telling you, and I say this not knowing all of the story and the whole context, I'm only going off of your question, but the fact that they're talking about dividend strategies as an investment solution to the problem that you're trying to solve, having less downside, more downside protection like last year, that's a warning sign.
That to me says they're more product and investment focused advisors than actual retirement planners. I made this point on The Long View, in that interview, that a financial advisor, even a certified financial planner, is different than a retirement planner. They are generalists.
Well, a financial advisor is probably the most investment oriented. A financial planner will be a planner, probably still focused on investment, but more of a generalist dealing with people and how do I pay for college? How do I pay down debt? How do I save for retirement? As well as retirement. Then a retirement planner thinks only about retirement planning. That is a subspecialty, which is really important because the issues that somebody in retirement faces are very different than somebody that is accumulating assets, the sequence of return risk, the risk of having bad markets up front can exacerbate a plan to the downside.
You have got to be careful, you want to be thoughtful about this, so you don't want to lead with investments. You want to find a retirement planner and you want to build a plan that fits you so you can actually have the confidence to lean in rock retirement because you're in a risky situation here, Michael, in that I'm calling you Michael, he says Mike, so I want to make sure, I don't know what you like to be called.
You need to build "this is what I want my life to look like and this is what I project it's going to cost me" and then you want to organize the three sources of capital that you're going to use to pay for this life. Social capital, which is social security, pension, et cetera, those guaranteed payments, human capital, if you work part-time, and then you also want to arrange your financial capital, all your money, so that you have clarity of how life is going to happen, at least in the near midterm, so you can have confidence even if you have a bare market.
Dividend investing is not going to solve that because one thing that wasn't mentioned, and they said there was limited downside, if you're buying dividend stocks, they are still stocks. They're still going to go down if you're in a bear. With rising interest rates, they could go down more because interest rates have an impact on dividend stocks.
So, I'm not quite understanding how they could say it has limited downside unless there's more to the story than you shared. So be careful there. But ultimately, I think a better approach to take, Michael, is to organize your assets so for the near midterm, meaning one to five or six years, you're focused on having monies that you need to pay for your life, and you're focused on putting that in things that will give you guarantees of the return of your money with the return on your money being secondary. Because all your savings are essentially deferred income and you're going to need some of that to help pay for this great life as a grandfather.
So, you can segment the longer-term money that you need to hedge for inflation, and you would like to grow for monies that you know you're not going to have to touch for 3, 4, 5, 6, 7 years. By doing that, the money that is going to be most volatile going up and down, whether it's dividend stocks or not, are going to be monies that are very long term. So, you don't worry about it so much because you have at least a five-year cushion of safer assets to draw from or use to move around the board. So, if a bear market happens, you shouldn't miss a beat because anything that went down in a bear market is money you're not going to have to touch for at least five years and statistically it sets you up for better success.
That's a better way, in my opinion, Michael, to approach it. I'd be very careful with the advisors you're talking to just based on what you said because it sounds like they're leading product first, and I don't understand how they say dividend stocks has limited downside. That doesn't make any sense to. I would say find a true retirement planner.
Conflict of interest alert, we do flat fee retirement plans at retireagile.com. We're currently doing those, and we teach people how to build a plan in an organized way in the Rock Retirement Club. Self-interest alert. FYI, but Michael, I would be wary in pursuing this, and I don't think it's going to get you the result that you want, at least with information that you shared.
QUESTION THREE
So, our next question comes from who is this? Who is this fine person? Phil.
Phil asked a question regarding indexed annuities.
"Hey, Roger. Thanks so much for your podcast. I love them."
Oh, thanks, Phil.
"I have a question for you. What are your thoughts around indexed annuities with guaranteed downside protection?
I am considering investing about 20% of my IRA assets into an annuity that is tied to the S&P 500. It guarantees 20% downside protection, has no explicit fees and pays out in six years. This is long-term money that I don’t have to touch for many years."
That's a good question, Phil, and we haven't really explored in an organized way, indexed annuities, and at some point, we're going to have to do that.
So, what do I think about this? So essentially you put your money into this annuity. They say, hey, you can only lose 20% of your money. After that, you won't lose anymore. And you could earn money tied to a particular index, in this case, the index is the S&P 500, and you'll get your money back in six years. You either get the 20% downside protection or whatever the return of the index was based on our complicated formula on the returns that go to you.
I would think of this, Phil, as I would think of food. There's organic, an apple, and then there's manufactured, on the other extreme, a Twinkie. This is going to lean much more towards the Twinkie end. It's a manufactured product that nobody goes out looking for. It's product design is meant to try to solve for, but also attract people that have a certain worry, fear or in other areas, greed.
It's manufactured to try to fill that void for somebody that's afraid of the markets. I've seen these kinds of products in various forms brought out during every bull market and every bear market. When markets are really, really, really good, you get the attractiveness and the manufactured products of, hey, you can get double the upside of the S&P 500 by investing in this, so you get more of this great thing that you're attracted to.
I've seen so many products come out over the years. Then when we go through a bear market, you see the opposite manufacturing of risk management products that come out. Back after the market crash in 2000, it was the principle protection of mutual funds, you just see all sorts of things that get manufactured over the years.
So, I would be very leery of this Phil, because there's a lot going on underneath that is very difficult to understand. Yes, it's tied to the S&P 500, but the ones that I've seen, they're tied to specific points of what the return was from this date to that date, and you get a percentage of. And it was tied to the fact that you're not getting dividends that's not reinvesting. It's not exactly the S&P 500. The devil is in the details with these very complicated products.
The fact that you say there're no explicit fees, I question that. There are always fees, whether you see them or not, because these things are manufactured to make money by the investment company and the person that's selling it generally gets a very large commission in order to sell that.
The money is coming from somewhere and the company's not doing it out of grace. So, there are fees involved. Generally, with an indexed annuity there are long-term surrender fees that if you sell it prior to the maturity, you're going to pay a big commission on the out in order to make sure the company is made whole for the commission they paid the advisor, so I don't believe that there are no fees in this.
I would be very wary of it. Phil, I think you can go the organic approach of building a feasible plan of record, making it resilient, and then thinking about optimizing it and hold onto a lot more flexibility than something that's manufactured like this.
I would stay away from the Twinkies.
QUESTION FOUR
Our next question's actually a comment from Anna, and it's a health recommendation for Shauna, my beautiful wife.
Anna says,
"Hey, Roger just started listening to your podcast, and I find it very interesting so far."
Ooh, I love that qualification, Anna. I'll try to keep it interesting for you.
"I was listening to the episode where you mentioned the pre-holiday gift guide, and you noted your wife's hands were very painful, and this can make tasks difficult. You may want to read up on red light near infrared light therapy to see if it's an option for her. It's been found to be very useful for pain as well as wound healing, et cetera.
It was initially developed by NASA, so it's a legit modality. Have a great day."
I have a hard time with words, Anna. Great. Thanks so much for the tip. I have to ask Bobby Dubois about that, and I'll definitely mention that to Shauna. Welcome to the show, Anna.
QUESTION FIVE
Let's get to one more question from Carl.
Carl says,
"Hey, Roger.
I recently subscribed to your channel on YouTube, and I liked your content. My question is if I want someone to look at my funds in Vanguard and other investments like 401k and tell me if I'm making the correct selections or whether I should also open an IRA account. I'm not looking for someone to manage my investments, but just to consult or give advice of strategies that set me up for retirement.
Who can I contact? Can you share your thoughts? Thanks very much for your time."
It's a great question. So, Carl's basically asking, how do I find a financial planner who is not managing assets in this case, just someone to be a decision-making partner from time to time? That's a great question.
There are more and more solutions out there, Carl, so that's a good thing. The two places I would look Carl is. The NAPFA, which is the fee only network, you can find them at napfa.org and they actually have a search feature where you can find hourly advisors or flat fee advisors.
Or I would look at the Garrett Planning Network, which also has a search feature to find advisors that are willing to do that.
Then if you're the, do it yourself type where you just want to have some community and some organization around this, check out the Rock Retirement Club and come hang out with us at the open house at the end of this month.
With that, let's go get an update on the new retirement planning calculator from Steven Chen.
STEVEN CHEN INTERVIEW ON THE NEW RETIREMENT CALCULATOR
I am excited to have a friend that I haven't talked to in a while. Steven Chen from New Retirement, the New Retirement Calculator. How are you doing, Steven?
Steven: I'm good. Roger. Thanks for catching up. It's great to see you.
Roger: I know. There's this idea of its old friends are the best friends, right? You have history together, and you and I are relatively new friends, but you're becoming an old friend, which is actually sort of cool.
Steven: Yeah. I feel like we were Twitter and then Zoom friends, but we have met face-to-face. We have that recording of you in the garage here. Yeah, that was a popular podcast of ours. So, thanks for visiting us here. I have to visit you.
Roger: I want to talk about two things.
One is how many users do you have on the New Retirement Calculator? Roughly?
Steven: We've had about 250,000 people create free plans so far. We have about 50,000 active users and now we have over 10,000 subscribers. So, it's definitely grwoing, it's still a thing where many people don't know who we are, kind of what we're doing, but it is working, and we have an active community. We have 15,000 people on Facebook talking about this stuff all the time. We're taking some cues from what you're doing, but we're, I would say, more online versus feel like your community is definitely, you have that interactive motion going a lot better than we do.
Roger: Well, you have your pulse on, that's a huge cohort of people all thinking about the same issue, and there's a lot of collective wisdom there. What is it that they're talking about the most or worried about, or excited about?
Steven: Yeah, great question. So, our users today, partly because of our name, they're, many of them are approaching retirement.
They're kind of 50 to 65 years old. They've been kind of working and saving. They're mass affluent plus, they've made some good choices, but How does this actually play out when I go to retire? Right? Many of them have their own spreadsheets or they've thought about it. They're realizing, they have to think about not just social security and Medicare, but like how do they bridge healthcare in between? How are they going to draw their assets? Should they move? How can they be tax efficient? If they have more money, how can they efficiently give money to their heirs? There's a lot of these moving parts.
I would say some of the biggest things are for sure, taxes. Right? I think for a lot of users, they realize that it's not about beating the market, it's about capturing the market returns, keeping fees low, being diversified and rebalancing.
So, they kind of have the investing side like down a little bit, and then they're like okay now it's tax efficiency, risk management, what's my glide path from working full-time to part-time? Then one of the things we've leaned into a lot we just launched is a new, a second-generation kind of Roth conversion tool that lets you really solve for certain tax brackets, maximum estate, minimum taxes. It's been driving record repeat engagement.
We're definitely listening to our users. They can log things that they want to see us do, and then they can vote on things that other people have logged. So, we're seeing what people are voting for and that's one of the top things.
Another big thing is scenarios. We let people now really easily create like, okay, what if I stay where I'm living here in California? What if I move to Florida that is a tax-free state? Or what if I move back, close my parents in New York or whatever it is? How does that affect my situation? And keep these scenarios and then compare them.
So, it really lets them kind of play out. In detail and forecast what this could look like.
Roger: That was actually a question that I answered in the segment before this, of what is the best retirement calculator to go use that has some Monte Carlo and specifically scenario planning. I mentioned new retirement as the best public facing one that I'm aware of.
Steven: Thank you.
Roger: Well, it is, and you're iterating really quickly, but it talked about those what if scenarios as being critical of having a plan of record and then creating, well, what if I did this kind of conversion or I moved, and then comparing them back and forth, right?
Steven: Yeah, we've continued to lean into Monte Carlo. We're continuing to get more and more granular there, so we're kind of building our platform two ways.
We have power users, so we're continuing to build it out for them, and then we're also working on making it simpler for kind of the main street America. Right. How do you make this more approachable?
People with a financial plan, they end up with 2.7 times the money, and it's because they get literate, they make good decisions, and then very often, either with an advisor or with a community like yours, if they get the support to actually take action and execute their plan and then hopefully get talked off the cliff if they see a 2008 or a 2020 pandemic, they're like, okay, wait, I can sit tight.
If you zoom out of your money, you think about it so differently than if you're like day trading or thinking about like, hey, I want to try to capture crypto, some return or whatever. But like if you look at your money from like a 5, 10, 20 year perspective, You can see that like there's patterns and you just need to do generally the right things around saving and investing, and then you're going to have much better outcomes.
Roger: It is interesting that I think having a plan of record is the first step of being intentional right, and having at least some true north to iterate on, to help bring you back to, this is what I put together when I was not stressed or not greedy or fearful, or whatever.
Steven: Yeah. It's like it gets you thinking about it. There's a guy, Mark Suster, and he wrote about how he's like a venture investor guy in Silicon Valley, anyway, he wrote about how he lost 65 pounds and then, and he is like, what worked for me was not extreme diets or working out for like 20 years, he just says like, I'm going to weigh myself every day and think about it, I'm going to get my mind ready, right? So, think about how I want to approach this problem, learn about it, and be thoughtful of what I eat. Then gradually ramp up exercise.
Just measuring things, being thoughtful, having a plan, learning as he went, having an approach worked and he could see the progress.
Then like 18 months later, he actually set up to drop like 30 pounds, dropping like 65 pounds. Kind of incredible transformation.
Roger: It makes me think of a tweet you actually put out. It was about stoicism, and you said something about, wow, this is a lot more than just what you think of, oh, that person's stoic.
So obviously you've been diving into that a little bit, maybe.
Steven: Well, it's interesting. I had a conversation, so there's one of my son's friends, you know, he's like, these guys are 18, 19, and so he's a drummer. He's actually, he's been doing some work with the Foo Fighters and he's a thoughtful kid and he has been really kind of thinking about like being more intentional in his life and like of trying to avoid the distractions of like smoking pot or drinking, right?
He's doing something hard. I was like, what's a day in life like? He's like, well, I wake up. I drum for hours. I'm trying to get my bike. He's got scoliosis. So, he is trying to make his body stronger and more balanced. Then he has this vision. I'm like, all right, how do you think about your life? He's got this vision for where he wants to get to. I was like, oh.
It reminded me of conversations. I was having some friends about Seneca, and stoicism. I was kind of aware of, but I didn't know much about it. So, I started looking at it and then I was reading about it.
I read about it, and I sent him that. Then I saw his video and it does a great job of explaining stoicism, and I actually realized I always thought stoicism was like just dealing with adversity and that's about it. Actually, it's about wisdom, it's about temperance, it's about justice and it's about courage.
Oh, there's a lot more here. You're in my tweets, which I appreciate.
Roger: Well, listeners are probably like, oh boy, here he goes. Because I'm a fan of Stoicism a lot, I study it and we actually licensed the Heroic Training Platform for the club, which is about intentionality, and it's based off of stoicism, modern positive psychology and ancient religion and such.
The reason I brought it up is because it's about intention, right? When you build a retirement plan, it sets your intention, this is what I want my life to look like. This is how I'm going to organize my resources to create this life that is driven by my values. That's the intention, but what ends up happening is the next day you wake up and you're tired, or you're fearful, or you're stressed.
You forget your intention, and you have to have a system to remind yourself of your intention.
Steven: It's interesting, like I feel like it's so awesome what you're doing and how you think about this, and it's good that people with enough money have the space in their lives to think this way and maybe the experience and context to learn about it and then act on it.
Ideally people would do this in their twenties or something. They think about this now, maybe they don't have the maturity, it's like whatever. We think so differently when we're 20 years old. Do you ever think about, should this be happening, or could this happen?
Roger: What do you mean?
Steven: Could people be more intentional and systematic about their lives? Could there be a community for younger people that does the same thing?
Roger: 100%, I guess if it's not related to money, that's exactly what Brian Johnson's building, is How do I be intentional about my life every single day, right?
You know, we always know Carpe Diem, right? Seize the day. But it really comes down to Carpe Punctum, which is, seize the moment, you only have this moment, and you have a stimulus, looking at the market or looking at crypto, and then you have your response and there's that moment in between and that's what you have to master.
So as an example, if you think about your life with your friend, if you think about Steven, he has three major domains in his life. He has his energy. You have to have the energy to be able to show up, right? If you're eating badly or sleeping badly, or not exercising, your engine's going to be coughing. You have to have an identity there, and then you have to have your work or your passion, happy people have projects, and then who you are in love or relationships, right? With you and I and you and your wife, et cetera.
Anyway, I'm going off on this, but I think how this relates a lot to retirement or even to younger people, is to be teleological and set little targets, and to have a bigger strategic plan. This is the retirement plan that you guys helped build in your tool, but then what do I do in the next month?
I think that really is what needs to be integrated, and it sounds like you're the first step in building this plan.
Steven: Well, we've been definitely thinking a lot about the money side. I think the whole life side is a huge part of this and facilitating that, we've talked about it like time is a scarce resource. But you have to have that intentionality right in your life and then also design it so that you can help other people achieve that. That's something that we'll think about more. This is a good conversation and it's interesting thinking about my son's friend.
When you're younger, unless you come to that realization that you want to learn about this and there's all this stuff to be learned, it's hard. But if you do realize this and engage in it, there's so much out there. All these people have come before who have thought about this deeply and written about it that's out there. I just got to get into it.
Roger: Okay. That was a sidebar. Sorry, everybody. But I saw Steven's tweet and I think the integration of that with retirement planning, any kind of planning, actually even financial planning, doesn't matter whether you're twenty. One big thing that frustrates me and I think I expressed this on the Long View podcast when I was on there, is it's not about the money, especially in retirement when it's sort of the harvest, the reaping, it is about the life and so often, because financial planning or retirement planning was made by financial people. It is all about the money.
Are you guys exploring in New Retirement how to integrate some of the purpose of it all into that more?
Steven: Yeah, that's a great question. I mean, like on our podcast, we do talk about this.
It's definitely in the community, people are talking about it, but I would say from a software design perspective, we have not leaned into it. It is an area of discussion. This will spur it actually, we're about to go into our quarterly business review. We're prepping for that. So actually, right after this I'll bring it up. It's a big area. It's a big white space, I would say.
Purpose is everything, right? If you don't have a purpose in your life, people get depressed, right? They're just like, what am I doing here? It takes away from their life in a huge way and drains them. So, I think that's something we can definitely, and should, facilitate for folks.
Roger: Within your calculator, what's the one thing that you're most proud of that you've iterated on this year that's new for people to use?
Steven: I would say thematically, the big things are, you know, design. So, we hired a Head of Design. This woman, Rachel, she's incredible. She's building a whole design team on our side. People judge products and solutions in microseconds, when you meet people or see things and you decide quickly, does this thing look credible or not?
There's actually this really interesting Stanford, I think it's a credibility center. It talks about all these signals people get and how they decide. Generally making our product more beautiful and easier to use and accessible has been a huge thing, and we're thinking about design everywhere. Not just the software, but like our community, how we talk to people, how we're designing our own company, right?
It's like design infuses everything. I think that's been an evolution, and then I think the big thing is just the platform approach. We definitely have decided, hey, we're this platform. We want to be the stripe of financial planning, so we want to help other organizations access the planning, thinking, calculation capabilities, but also the methods that work, but give them a chassis for them to kind of like do things better and that seems to be working well.
We basically serve three audiences. We serve consumers, which is what people see when they land on our website, we serve advisors now, and we serve enterprises that also serve millions of people.
Enterprise is really what's driving our growth, but with consumers, it's our lab and we learn super-fast, and it makes everything else we build better.
Roger: I do think that if you're looking for a retirement calculator as a consumer, New Retirement is the one to use. It is beautiful, and you have people that are very nerdy about this and it's powerful from that perspective, but it's not intimidating.
At least, I was in it just the other day in preparation to talking with you here, and it's not intimidating, which all this stuff can really be. Just a disclaimer, if you never listen to the pledge at the end of the show, I don't talk about anything for money, so I'm not being compensated here. This is just me looking for how to empower you to rock retirement and New Retirement is a great tool to help you on that journey.
Thanks, Steven.
Steven: Well, thanks Roger. Also, I want to give a shout out to what you're doing. I think that you're clearly succeeding in building your community and audience. You've done a ton for your users, but I think informing other people. When I talk to other people that are building things in this space, a lot of them look at what you're building.
There is a way to build a community driven business model that's geared toward financial advice. This has historically been for wealthy people because the business model is geared around how much wealth you have. So, if you have money, if you have a million bucks, you can get great advice.
If you have less money, great advisors very often are so busy, they don't necessarily have the time. So how do you access it?
I think now more advisors are like, oh wow, I could teach classes. I could build a community. So, I think that what you're doing is spawning replicators or imitators, so an imitation of lesson service form of flattery.
So good job of inspiring a lot of folks.
Roger: That's where we're about. Thank you, buddy.
Steven: All right. Thanks, Roger.
BRING IT ON
Roger: Now it's time to bring it on because you are the hero that you've been waiting for, and today we're going to talk about relationships in retirement or in life in general. Your love, obviously the people you love in your life, but also your relationship with everyone around you, is critically important to rock retirement as we age.
I just finished a book, Ooh, this is a secret.
I just finished a book in April on Adlerian psychology, which I really wasn't that familiar with. The book is called The Courage to Be Disliked, and we'll talk about the book a little bit next month, but I journaled on this concept from the book on relationships, and it wasn't a structure that I've seen before.
We think of praise relationships usually, if you're raising children or if you have employees, you think of praising and rebuking, right? Just like you would an animal. You praise an animal, or you can rebuke an animal to train them.
We tend to do that in our professional and in our personal relationships. When someone that we love or that we're surrounded by does something we like, we praise, or if they need correction, we rebuke them. That's a natural structure of a relationship, and this is very hierarchical, right? It's one is above the other, and this results in one, always passing judgment on the other.
You think of a parent child, an employee and boss, a teacher and a student, and Adlerian psychology would argue that there are some consequences to this structure in that what we're doing is making the person on the bottom end of this vertical relationship dependent upon the judgments of others. This can result in never believing you're enough, which is something I think we all struggle with. It can also result in living to please other people.
I found that interesting because I was connecting this to The Five Regrets of the Dying. One of the five regrets of dying from Bonnie Ware's work is I wish I had had the courage to live a life true to myself. A vertical relationship in Adlerian psychology would argue, essentially conditions us to always seek praise, which makes us dependent on everyone else for our value. We sort of lose ourselves and we compromise our own life to make sure we get more praise.
Even if you get praise, it argues that this can be bad because it's still a judgment. I bring that up because they would argue that from a relationship standpoint, which is something that you and I want to make sure that we deepen the relationships that we have and we are able to create healthy new ones, not just in retirement, but anytime.
They would argue that a horizontal relationship is a healthier relationship. This is where you're never passing judgment, praise, or rebuke on someone else, but you're living as equal. So as an example, I just hired this financial planner. I am their boss. That is the role I have within this relationship, but we're still equal. We still have equal value as humans, and rather than praise, you give gratitude for their value and then rather than rebuke, you encourage when they need it.
This more horizontal relationship empowers the other person. It gives them agency as an equal human rather than simply trying to please us, and it lets them live their life.
They're supposed to do a task, let's say, like clean up their room. They're either going to do it or they're not, and you can encourage them to do it, but ultimately, unless you are dictatorial in a vertical relationship, you're never going to make them do it.
Sort of that, lead the horse to water but can't make them drink type of thing. So the more horizontal relationship gives them their agency.
This also has some consequences of, hey, you can't just dictate what they do because they're their own person. They're going to live their own life, and we definitely found that in our relationship with our daughter in high school when she wasn't completing her homework or if she completed it, she wasn't turning it in.
We were in a vertical relationship. Rebuking, rebuking, rebuking, and just putting our thumbs down and it took some outside counsel says, Hey, they basically told us, hey, she's not going to do it. You can't make her do it. Stop rebuking her so much. Let her deal with the consequences of her actions. So that's what we did, and the relationship and her agency started to improve greatly.
This is more difficult because we want to do what's best, or sometimes we think we know what's best for the other person, doesn't mean that if they don't do their homework, even though we're encouraging them, they're still going to suffer the consequences of that, but that gives them their agency and they're just going to have to deal with those consequences.
So, there's some other borders, but I thought that was an interesting structure as we think about how we interact in our relationships and how we build new relationships. This is a critical component of you and I growing older and rocking retirement is forming healthy relationships.
With that, let's move on to our smart sprint.
TODAY’S SMART SPRINT SEGMENT
On your marks, get set.
and we're off to take a little baby step you can take in the next seven days to not just rock retirement, but rock life.
All right, in the next seven days. I want you to revisit your allocation plan or your retirement plan.
If you're within five years of retirement, I want you to start thinking about what does it mean investment wise to go from an accumulation strategy to a de-accumulation strategy?
We've talked about that a lot on the show. If you are in retirement, especially early retirement, just confirm for yourself that you've made the pivot to have a retirement strategy and investment strategy to fit what your life looks like so you can avoid unnecessary losses of capital by being overly aggressive in your investments than you intended.
ROCK RETIREMENT PLEDGE
All right.
I want to reaffirm my pledge to you and the pledge of this show and what we're trying to do here.
We are always going to be focused on you and your journey and helping you transition into rocking retirement, which means making life the purpose of this thing.
We always want to focus on you having hope, which means an inspiring goal for where you want to be in your life, identifying where you have power to make it so, and where to apply that power in terms of pathways.
We want to do this in an authentic way. No pretense, be humble, be firm, but be humble and always be respectful.
Always want to be curious. I want you to be curious to approach life with fresh eyes and hold your beliefs up for examination so you either can affirm them or amend them.
We will work to be free from big finance and conflicts of interest and products and gimmicks.
We're just thinking through this for ourselves as much as we're trying to think through it and help empower you.
I always want to focus on you taking incremental action or even if it's just expanding your perspective, because that's how we continue to learn and that's how we rock retirement.
I'm all in on. So, let's go do this.
The opinions voiced in this podcast are for general information only and not intended to provide specific advice or recommendations for any individual. All performance and references are historical and does not guarantee future results. All indices are unmanaged and cannot be invested in directly. Make sure you consult your legal, tax or financial advisor before making any decisions.