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Episode #578 - Take Action Now for a Resilient Retirement

“The things that matter the most must never be at the mercy of the things that matter least.”

-J.W. Von Goethe

Roger: Welcome to the show dedicated to helping you not just survive retirement, but to have the confidence because you're doing the work to lean in and rock it.

All right, right off the bat, I have a statement and a challenge to you. How's that? We're going to get moving today. Statement? Retirement planning isn't that interesting. It's not. It's not that cool. The cool kids aren't doing retirement planning. You know what the cool kids are doing? They're going and creating a pretty amazing life. Retirement planning is simply a means to create a great life. Got to keep the most important things up front. Planning for retirement is not the most important thing, it's a means to the most important thing. It's important to remember that. So, if you're geeking out on this stuff, God bless you. But don't forget your life. If retirement planning is overwhelming, I want to assure you it doesn't have to be. It can be a good process that you can know enough about so you can get back to your life. Don't get overwhelmed by this stuff. I'll do my best not to go down the geek rabbit hole too often unless necessary.

Okay, that's my statement. My challenge to you is if you're within a few years or in retirement, take action on what we talk about this week. So don't delay, confirm or take action in this part of your retirement plan. How's that?

All right. After all that seriousness, we're going to have Nichole “Rockstar” Mills come on the show to hang out and answer some of your questions. Nicole is the architect of our weekly newsletter, 6-Shot Saturday. We're going to be changing the name soon, which is our weekly recap of the show where we also share links and resources that are of interest to us and we think might be of interest to you. You like the show? You're going to love 6-Shot Saturday. You can sign up for that at rogerwhitney.com and the cool thing is if you hit reply, it comes right to me and I'll be able to read your comments and your thoughts and your mind as well.

With that, let's get on with the show.

PRACTICAL PLANNING SEGMENT

Foreign retirement planning is a self-interested process. Now that's not selfish, that's just self-interested, right? This is a healthy thing because I'm guessing you want financial freedom, financial security, you want time, freedom, the space to be able to pursue your interests and organize Your day to spend time with family and friends, to experience the world and interests that you have. This is all really healthy, but it's easy to forget that. It's easy to forget what your self-interest is at this stage in life. What are you trying to solve for when you're making decisions is the central question. Are you trying to solve for better returns, better stories? Are you telling yourself that better returns, which gives you more money, means you're more secure? Is that the story you're telling yourself? It's easy to start to get a little jumbled in our mind.

Here's a great example. At the end of every year, we see stories of updating our net worth statement. I do this, I talk about this where I like updating my net worth statement and I like seeing the growth when I'm able to get it, that shows progress in my accumulation in order to give me financial security and sometime freedom, etc. I like seeing that growth. I've sat in countless meetings with retirees 3, 4, 5 years into retirement, where the conversation goes something like this, wow, we've been retired for three, four years and we have as much or more money than when we started, even though we're spending. What's nuts in there? This is easy. This is awesome. I'm optimistic. This is what retirement's like. I didn't know that. I thought the markets would go down and I'd lose all my money and everything else. So that becomes what we feel is normal. It has been like that for the most part for the last 15 years, hasn't it? A few hiccups here and there. That can cause us to be more optimistic in spending money, which is not necessarily a bad thing to use the bounty that we have for good. But it can also fool us into how we build our investment portfolios to think that storms never come. I don't have to worry about that anymore because I've figured out how retirement is.

What are you trying to solve for? Better returns and stories? Are you trying to solve for securing your outcomes? The outcomes being the kind of life that you want to live and you want your family to live. Think about this. When we think about planning, what questions do you want to answer in a healthy way? What will you tell yourself or your family if you aren’t able to moderate your spending because you have a resilient plan? Markets go down, everybody's worried, but you're still able to achieve the goals that you said you wanted to achieve. That sounds pretty good, right? How do you want to answer those questions? If you don't build a resilient plan, I'm sorry, we're going to have to slow down on the travel this year. I don't feel comfortable with the markets. What about how you answer this question? Will we be okay? Do you want to be able to say that because you've built a resilient plan of record or do you want to just be like, yeah, we should be okay. We'll ride this out. The markets will come back. How do you want to answer those questions?

It's easy to put the least important things ahead of securing the outcomes that you want for you and your family in retirement. This is important. It's important now because the markets are near an all-time high. This is my challenge for you today. Now is the time to make sure you have a resilient plan. We'll go over what I believe a resilient plan is as a baseline. But now's the time to do that. If you've won the game, protect the house. If your plan is constrained, do you want to risk having it be underfunded and not being able to retire the way that you want because you're trying to just get more. We're at a pivotal moment here because markets are at an all-time high. I mean, yeah, we've had some rockiness since the Deep Seek AI engine came out and all the craziness with the new administration. We talked about that last week, but this is the step in the process that is the most important and would have the most impact right now. Building resiliency into a plan is often a huge oversight, even by retirement planners, because we've been trained to accumulate and grow, grow, grow. We get through a feasible plan of record like we showed on Retirement Plan Live, and we see the statistics and oh, you're 88%, 99%. But then we don't do the extra work of making it a resilient plan so if a storm comes, it's not destroyed.

Markets are at an all-time high. In the last 10 years S&P 500 averaged 13% a year. Anyone that has retired in the last 10 years has averaged 13% in the last five years. Last year it was almost 25%. Of course, we feel optimistic, like, oh, this is how investing should be. The NASDAQ, which is mainly technology stocks over the last 10 years, averaged 18.28%. Last year it was up by over 25%. Yeah, we feel optimistic. This retirement stuff is easy. Oh, sure, we had that blip of COVID bear market. But that was just like a month. I have more money than when I started. It's easy to start to forget what the main thing is, and the main thing is securing outcomes. One way this can manifest itself is if you have a diversified portfolio, you have some bonds and you have some international stocks, et cetera. You probably have trailed the S&P 500 index. International stocks over the last five or 10 years. Not near as good bonds, they were blah. Then they went down significantly a year or two ago. So, if you had a diversified portfolio, you're looking at your portfolio relative to the feedback loops of the media and all the storytellers saying, wow, I'm a stick in the mud. I only got 10% last year. The S&P 500 was up 24%. Slowly but surely, we make the least important things, money, more returns, more important than making a resilient plan. It just happens over time. It's human nature. If we look at the S&P 500 today, if you look at the top 10 stocks, which make up 35% of the index, they're all technology stocks. Apple, Microsoft, Nvidia, Amazon, Meta Alphabet, Tesla, Broadcom, Alphabet, and then number 10, Berkshire Hathaway. So even the S&P 500 after this huge run of tech is dominated by technology. It's not like this is as diversified as you think it is, but it sure is fun while we ride it, isn't it?

So, my challenge is let's make the main thing the main thing, which is you being able to answer the question, are we okay, can we still do this? If we do have a bear market, that's the main thing. Having the confidence to be able to rock retirement. That's different than having the most money.

All right, so how do we plan resilient once we know we have a feasible plan? Step one is to have a contingency fund or an emergency fund, and that can be anywhere from $20,000 to $100,000, depending on your life and the clarity of your spending. If you're in a season of change, where things are moving around a lot and you might have this happen or that happen, you might want a bigger contingency fund. If you're not very sure on your spending estimates, you don't have a high level of confidence there. Maybe you lean towards the high side on the contingency funds because the purpose of the contingency fund is to be a buffer for life happening unexpectedly and also a buffer for bad estimates. So, the less confidence you have in your spending estimates, your income estimates, maybe the higher your buffer should be because you don't have a lot of high level confidence. Step number one is having a contingency fund. Think of that like an emergency fund. If you want to assume an extra six months of spending, that's a good baseline as any. Then dial it up or down based on the confidence and the stability of your life.

Step two is to pre-fund individual securities for the next five years of the spending that you will need from your financial assets. So, if you have income of $10,000 and you spend $100,000, you're going to need $90,000 from your financial assets. If that's year one, you want that for five years. What's five times nine? Let me use my old finger calculator here. That is $450,000, that means if you want to have a resilient retirement plan and you need $90,000 a year from your financial assets, you're going to want to have $450,000 in individual securities that mature when you need it, full stop.

The purpose of this money is to fund your paycheck year by year when you need it over the next five years. That's the purpose. The number one priority when you're investing that money is to have the return of that money so you can fund your paycheck. Think of this $450,000 as your payroll reserve. You're the boss of your own life now. You don't get a paycheck from anybody else, so you need to have a payroll reserve to create your own paycheck. So, when you're looking at an investment to put that 90,000 for year one, year two, year three, year four in this example, you need to know the date that you’re getting that money back, a maturity. You need to know what kind of interest you’re going to earn from whomever you're lending it to. That's the first two priorities, from most important to least important. That could be a certificate of deposit, it could be a treasury bill, it could be a fixed annuity, it could be a corporate bond. I would suggest that we start with treasuries, U.S. government treasuries or notes and CDs. Doesn't have to be any more complicated than that. Not a sexy story, but it can secure the outcome, which is you going on that trip or feeling secure if a storm comes. Doesn't have to be more complicated than that.

Once you have that in place now you can start thinking about other types of resilient options. How are you going to take your Social Security, your pension. Do I use some of my money to buy guaranteed payments that will secure income for the rest of my life? Now whether you go down that path or not is going to be individual to your situation. But you want to have some stability so you can start thinking longer term. It also gives you the space to think about all the optimization things that come up, Roth conversions or qualified distributions or QCDs and all the jumbo of stuff that we like to talk about usually too early.

Now what's special about the five years? Honestly, nothing in particular. Five years is the default within a sound process. It gives you enough visibility so that if a storm comes and the markets really go down, you have five years covered. That gives a sense of security that is beyond financial optimization.

Number two, it gives you a lot of liquidity. So, if your life throws you a big curveball, you can use that liquidity to move around easily to reorient your life to your new reality without worrying about where the markets are. If we have a big storm, that five years of liquidity potentially could be stretched to six, seven or eight years depending on how much go-go spending you've pre-funded. You could moderate yourself to even ride out a longer storm. So, it just gives you a lot of flexibility.

Now why might somebody have more or less than five years? Well, somebody might have more security meaning more than five years because their RISA profile and their preferences would lead them to having more of a safety first approach, because they just want more certainty when it comes to markets and securing their pay, their payroll reserve. We have clients that have eight year cash reserves, we have clients that have eight year cash reserves and then they have guaranteed income that's going on after that. At some point that's going to come out through a sound process based off of the financial numbers in their instance. But also, psychologically, what they need to have is confidence because it's not all optimization. So, I always use the analogy of a roller coaster. The science says I can go on a roller coaster and just have a grand old time. But you know what? Now that I'm 58, if they put me on a roller coaster, it doesn't matter whether physiologically the science says that I can do this. I don't enjoy it at all. I don't want to go on a roller coaster anymore. That's the difference.

One reason why you might dial it up is for some of these reasons now, why might you dial it down? Why might you have a less resilient plan when it comes to guaranteed cash? Well, the reason you might dial it down is because you're well overfunded. If you're way overfunded, meaning you have a lot more money than you're ever going to need, well now you can afford to have a less resilient plan in the sense of having pre-funded spending because you have such a buffer of assets. It's already resilient because you can weather a storm without battening down the hatches. But my stress here today is that markets are at an all-time high. Yeah, we've had some rocky roads here, but you may have been retired for 2, 3, 4, 5 years and this is sort of easy. I do my net worth and it looks great. Don't get over optimistic and put least important things feeling great about returns. I love getting returns. I feel the same way. Don't let that drive the bus and forget what the most important thing is, which is that if a storm comes, you can still spend like you want. You can still create the experiences and be okay. Now is the time to make sure you have that resilient plan in place. Do it in 30 minutes to an hour. If you work with an advisor or a planner, make sure when you ask this question that they show you explicitly how the next three to five years will be paid explicitly, not mumbo jumbo. Where exactly is that money going to come from over the next five years? Tell me specifically.

All right, that's your action. I will put my soapbox away. Let's go chat with Nicole.

LISTENER QUESTIONS

Now it's time to answer some of your questions. I'm feeling lonely. So, I am going to bring on Nichole “Rockstar” Mills.

Nichole, you're on the show. How are you?

Nichole: Here I am. I dusted the dust off my microphone. Wow, that was a little repetitive, wasn't it?

Roger: You really did have dust on your microphone though.

Nichole: I literally did, yeah.

Roger: How is the life of Nicole?

Nichole: Oh, it's going well. Kids are getting big. I have a teenager now. My oldest son just turned 13 and he just shaved for the first time.

Roger: Oh, my goodness. You've been working in the background and we have some changes happening with 6-Shot Saturday. When are we going to talk about those?

Nichole: Well, we can talk about it now. I don't know when the actual changes are going to happen. That's probably a March project.

Roger: A March launch project?

Nichole: Yeah. Do you want to just be like, a little mysterious now or what?

Roger: Yeah, essentially.

We're going to lean in a little bit more to our weekly newsletter, 6-Shot Saturday. It's going to have a new name that is more aligned. Should we say the name?

Nichole: You can do whatever you want to do and I will frantically work to make it happen in the background.

Roger: Well, we're doing this anyway. Or no, that's not fair. Nichole is the architect of our weekly newsletter, which is valuable to you as a standalone, not just a supplement to the show. So, I'm excited about that because you are the editor and writer, this is your brainchild. I'm excited. You're doing great work as always.

Nichole: Thank you. Yeah, I'm excited too, actually. It was funny. I was reading the listener survey and I asked what's one thing that would make people stop reading 6-Shot Saturday? Some guy wrote death, which I'm like, wow, that's dedication.

Roger: That's a true fan and we love you. Big hugs.

Nichole: Yes.

Roger: I think the other ones were advertising and politics.

Nichole: Right. We will not be incorporating those things, either of those. Don't you worry. I don't want them either.

Roger: They are distractions to rocking retirement. So, you are here to help play the role of the listener with answering some questions.

Nichole: Speaking of distractions, let's get focused.

TJ ASKS ABOUT BUILDING A BOND LADDER AS HE GETS CLOSER TO RETIREMENT

Our first question is from TJ about building a bond ladder.

He says,

“I'm 55 years old and planning on having the option to retire in five to six years. I understand the logic behind having a two year cash bucket going into retirement. However, I was wondering if you could share the pros and cons of building a bond ladder that matures in years one to five that could provide a similar outcome versus having the two years in cash supplemented by a bond ladder.”

So, I think he wants to know, should he build a bond ladder? If so, when? And then he goes on to provide some specifics. But yeah, I might Get a little too nitty gritty here.

Roger: Yeah. Well, you're at a great time to be thinking about this, TJ, you're five or six years away, so you have a lot of runway. When we think about how we allocate assets, and you've probably been like all of us for decades, you've been allocating assets to grow, to take as much risk as you're comfortable with. Understand markets are going up and down, but you have so much time before you need the money. You can ride it out. Plus, you are contributing while these ups and downs are happening. So, you're a great accumulator. You've built those muscles and you're still in accumulation mode because you're five or six years out.

But now you're starting to see the light where you're starting to have more defined purposes for your money. In this case, when you retire, you're going to need to create your own paycheck. That's probably a good way to think about it. TJ the two years cash reserve is like an emergency fund. It is extra cash in case life happens and then cash to cover a year or so of paying for expenses. That is actually the strategy I used in my process going through 2008 with clients that have already retired. As you get closer to retirement, I think it's critical that you build a bond ladder that is essentially a payroll reserve which is meant to pre-fund the spending that you're going to need to fund from your assets for the first five years.

So, as a simple example, if you have $100,000 you need from your actual money because you don't have the income to cover it, that's what you're going to need when you forecast your spending versus your income. Then building a bond ladder of $100,000 that matures in year one and then year two, and then year three, year four is a great way to pre-fund your paycheck because now you have a specific purpose for your dollar. When you're investing those dollars for funding your paycheck in the near term, the most important objective is the return of your money when you need it, because it has to fund your life, which funds your goals, which helps you live out your values. You follow the thread. So, we want return of our money. Return on our money is secondary. So, yes, I think you should build a bond ladder as you get closer to retirement.

I think you should enter retirement with five years of your expected spending from your accounts pre-funded. So that's how you determine the amount and then how much you fund each year. Now you're five years away, so this is probably not as important to you right now. I think having cash reserves and starting to build up liquidity can help you get positioned to build out that bond letter. But I don't think it's urgent for you right now, unless you want to have more security that if the world goes sideways, you could still have that option to retire. I think you said you were like 75% stock.

Nichole: 75% stock, is that right?

Roger: So, that's like a very forward leaning growth. I'm going to take whatever the market gives me, good or bad, and ride it out. Now might be the time to start moderating that by building up liquidity.

So, when should you do it? If you want more options early, do it sooner than later if you are comfortable with a five year time frame. As you get closer, just continue to build up some liquidity and start to build out that ladder when you're closer than five or six years. Then he asked what do you put into it. What are the options of putting it in?

Nichole: Or some options you should consider, yeah.

Roger: In our current environment, treasuries. Buy treasuries that mature when you think you're going to need the money. That could be a treasury bill or a treasury note. The reason I say treasuries is that they're guaranteed, you know exactly when you're going to get your money back. They're yielding around 4% depending on the maturity. I don’t think we need to make this more complicated than that. When we were at zero interest rates, this was a lot more difficult to do. But we're not at 0% interest rates. So, I would say just keep it simple because this isn't something we need to over optimize. It's easy to make this much more complicated than we need to. But I do think when you get close to retirement, T.J. you want to have a clear path for how your life is going to be covered. You want to use specific bonds, not bond funds, because bond funds can go up and down based on interest rates and it's not worth the risk. So, keep it super simple. You'll hear about this in our Rocking Retirement in the Wild. Is that what we decided to call that, Nichole?

Nichole: I like that. Rocking Retirement in the Wild sounds good to me.

Roger: Okay. We have actually some feedback from listeners that have taken action on this that are older than you that will give you some perspective as well. This is definitely an optimization question, just so you know.

JEFF ASKS AN OPTIMIZATION QUESTION ABOUT WITHDRAWING FROM ASSETS

Nichole: All right, our next question is from Jeff.

He says,

“I love the show. Thank you.”

Roger: Thanks, Jeff.

Nichole:

“I've been listening for a few years now and you are my top weekly podcast. I just retired last year and I'm really just now creating my retirement paycheck. I have after tax funds, before tax funds, IRA, 401k, and Roth accounts.

This is definitely an optimization question. What are your thoughts? Proportionally withdrawing from all each year versus the traditional order of taxable pre-tax than Roth.

Thank you also because you inspired me to create an income floor.”

So good job, Jeff.

Roger: What Jeff is talking about is the default way people usually do withdrawals, by spending all of your after tax assets like your checking account and your after tax investment account, drain that and then go to your tax deferred, your traditional IRA, and then go to tax free accounts.

This is definitely an optimization question, Jeff, and I'm glad that you classified it that way. Just as an aside, when we have a decision, it's good to know, is this a vision, is this a feasibility question, a resilience question, or an optimized question? That's a great way to characterize any decision you're making so you can give it the proper weight that it needs.

The way I would approach this, Jeff, is by building out a five year cash flow estimate showing year by year what your expected income is and what your expected spending is and then use some basic tax assumptions that will give you an idea of how much you need from your accounts year by year. That's step one.

Step two is to look at tax estimates of where you're going to fall from a tax bracket standpoint. Because what will happen is, let's say, you don't have any income in year one because you're not doing anything with your Social Security and your pension didn't turn on. Well, you have zero income. So, tax wise, you're in no tax bracket. You can choose to do a qualified distribution, which is money coming from your IRA and choose to pay taxes on monies coming from an IRA, even if you have after tax assets to fill up the low portions of the tax brackets. A married couple is joint filing. The top of the 12% tax bracket right now is right around $100,000, give or take with standard deduction. You can essentially take $100,000 out of your pre-tax assets and pay 12% or let those accounts continue to grow, which will just simply grow a future tax liability. So, the way I would go about this, Jeff, is to focus on your tax strategy around your withdrawals, not just the ordering, because this is where there are serious dollars that can be gained by being aware of what your future required minimum distributions are. What tax bracket are you going to be in? Then you can make the decision, do I take money from my IRA to fill up a tax bracket or do I do a Roth conversion? That is a deeper look into optimization, but I would do it based on the taxes.

DJ ASKS HOW ROGER DETERMINES WHETHER TO MAKE WITHDRAWALS ANNUALLY, SEMIANNUALLY, QUARTERLY, OR MONTHLY

Nichole: Our next question is from DJ.

They say,

“In retirement, how does your firm decide whether to draw out withdrawals annually, semiannually, quarterly, or monthly? Why? What's your personal preference? 2025 is my first year in retirement and I feel like I need to decide soon.”

Roger: Troy, Aaron, Scott, and I, those are planners on our team. We have a weekly meeting called our chainsaw meeting, which is where we focus on how we improve our planning process. The concept is, rather than sharpening the knife or the blade, we try to make a chainsaw, which is like a force multiplier that makes you go even faster.

Why are you laughing?

Nichole: That's just a funny visual to me.

Roger: We spent over an hour the other day talking about this exact thing. It gets very geeky but it is so much fun.

Nichole: Did you guys disagree?

Roger: No, we collaborated. In a process, it's good to have what the default option is. You know, sort of like the last question. The default option is taking money from after tax money, then pre-tax and then tax deferred. There's good in having a default option. So, we were coming up with and refining what our default option is for creating a paycheck. Here's what we came up with.

You have your operating account, which is like your checking account. That's where you pay your bills. Then when you're creating your paycheck, then you have an account which is called your payroll reserve, which has this cash reserve plus the bond ladder that we were talking about earlier. When you're ready to create your paycheck, let's say DJ, you need $100,000 a year to live the life of DJ just for base spending. Then you want to create a paycheck from this separate account with the cash and the bonds as an automatic deposit to your checking account to simulate your monthly paycheck. So, this is the default. Every month you get paid the same amount and that's what you live your life off of. Essentially, you're recreating the paycheck you had while you were working. We're all used to those kinds of rhythms, right? Nichole has young ones, children love rhythms, right? They got to go to bed at the same time, they got to get up at the same time. They don't like randomness.

Nichole: I mean, I'm an adult and I don't love it either.

Roger: You like rhythms.

Nichole: I mean, especially with a paycheck, predictability is very nice.

Roger: It also is a natural constraint on your spending, right? Because generally we don't spend over what our paycheck is. That would be my suggestion. Have your payroll account and you can even label it that way and have it send you a paycheck on a monthly basis. If you're used to getting it on the 15th, make it on the 15th. If you're used to getting paid twice a month, get it paid twice a month. You can set these things up automatically. Then when you have those extra things that home repair or that go-go vacation, just go and grab that money manually and have it automatically transferred to you like you would from your savings account. That is a good default one. It provides rhythm, it provides predictability.

On the back end, what it provides is at the end of the year when you're looking back at your spending, it's going to be very easy to reconcile what you thought you were going to spend and what you actually spent. Because you're looking at just the outflows from this payroll account. So, you don't have to even know the little categories because you can see how many times you went and grabbed extra money for whatever reason. So, it's really easy on the back end to reconcile projected spending versus actual spending. It's really helpful for us when we work with clients that way.

Now, one little wrinkle here, DJ, and I don't know if you meant this, if you are drawing money from an IRA or a pre-tax account, we still like to do it in this default way rather than take it all out, say in the first quarter of each year. The reason is once you take money out of an IRA, it's a taxable event and you can't really undo that easily if you do it in the first quarter. So, it's good to do this monthly amount because you can adjust it throughout the year. This is a good default, but there are ways you can customize this to whatever the rhythm of your life is.

BILL ASKS FOR CLARIFICATION ON THE DIFFERENCE BETWEEN FIDUCIARY AND NON-FIDUCIARY ADVISORS

Nichole: Our next question is from Bill.

Bill says,

“I have really enjoyed listening to several of your podcasts over the last month. We're looking for guidance as we approach retirement in the next 10 years or so, both for funding our retirement and a special needs trust funding for our disabled son who's 14 today. I used the 15 questions to interview a financial planner and the gentleman was a CFP®, but he said he was not a fiduciary.

I was under the impression that all CFP®’s should be fiduciary. Can you clarify for me?”

Roger: That's a great question, Bill. In years prior to 2019, a certified financial planner is what we're referring to. They didn’t have to be a fiduciary in all instances if they were selling a commission product, but that changed in 2019 when the CFP® board changed their code of ethics and standard of contact where there's a fiduciary at all times obligation for CFP® professionals. So, this particular advisor was wrong in that statement and probably the reason they misstated that, is that fiduciary/non-fiduciary in investment firms focus around selling products for a commission or earning an advisory or financial planning fee. That's the distinction industry wise. If they were selling commissionable products, technically those are not held to the fiduciary standard, so in that sense he was correct. But they may have not remembered or known that in 2019, by being a certified financial planner and having the right to use the marks that they agreed to the code of ethics of the CFP®'s board, which says they actually have to be a fiduciary at all times. They might not even be aware of that. So good question. The CFP® probably just didn't know that by using the marks they have to be, regardless of what kind of product they're selling.

Nichole: Actually I realize some people might be listening and they might not know what the questions to ask your advisor worksheet is that he referenced.

Roger: Good point.

Nichole: That is something that we put together. It's in our resource center on our website, and we can definitely pop it into 6-Shot Saturday this Saturday.

Roger: I'm really glad that you're using that kind of interview format because it brings up these issues.

The key thing when you're hiring somebody is to know the expertise, curiosity, and process of who you’re hiring. I think when you're talking to a financial advisor, a planner, anybody, you should be the one interviewing them. Coming prepared can really help you find somebody that fits what you're looking for.

ROCKING RETIREMENT IN THE WILD

All right, so we're going to have to come up with music for Rocking Retirement in the Wild. This needs to be its own segment.

Nichole: I was just thinking that. I was like, is this going to be, like, exciting music? Are you going to have wild animals?

Roger: I'm thinking, like Jungle Love from Morris Day & the Time, but I probably don't have the rights to that. That's before your time.

Nichole: Probably. No.

Roger: No, probably not. But that's what came to mind. I used to love Morris Day because I wanted to dance like him, I liked him.

Nichole: I don't know if I know that song.

Roger: Probably not. It's 80s rap-ish.

Nichole: I thought there was a Steve Miller song called that.

Roger: That's a different Jungle Love. Yes.

Nichole: Okay. I was like, wait a minute. I think this is.

Roger: Yeah, there's Steve Miller. You're an old soul, so that makes sense. I don't think we have the right to that song either.

What we're doing with this rocking Retirement in the Wild is sharing stories of people that are taking action on rocking retirement in an intentional way. I love these kinds of stories because this show is about you taking action. It's not about becoming an expert. It's about having the confidence to go live the life that you want. That's the point of the exercise. All the financial stuff is just a means to an end.

So, Jeff wants to share his peace of mind. You want to read his story?

Nichole: Sure.

Jeff says,

“Hi, Roger.

As always, I want to thank you for your podcast. So valuable and obviously a labor of love. I've learned so much from you over the years and continue to recommend the Retirement Answer man to all my friends.

This is a comment rather than a question. I officially retired last week, and though rationally I know I'm ready financially, I've worked the numbers to an unhealthy degree. The actual act of retirement stirred up irrational fears of the unknown market downturn in health care costs, etc. Then I followed through on my plan, thanks to you, to create a bond ladder plus cash to fund the next six years. It's amazing how much more relaxed and confident I feel after pulling the trigger to set that up. Knowing that I am set for the next six years has totally freed me from worry about daily market volatility. I'm now more focused on what comes next in life rather than paying so much attention to finances. What a gift.

Thank you.”

Roger: Awesome that you took action, Jeff. Isn't that cool, Nichole?

Nichole: That's very cool.

Roger: That's awesome. This is the thing that we don't get until we have it. Jeff, it's not about optimizing numbers in a spreadsheet because building a six year bond ladder that you're going to spend may not be the optimal allocation of resources if we're thinking purely from the lens of asset allocation, because the numbers we could get maybe project higher returns. But what doesn't get captured in that spreadsheet, and Jeff I think you're finding this, is that by building this ladder, which you're still getting 4% on now or close too, building this ladder gives you the ability to stick with a plan and reduce unforced errors which would probably save us financially in bad markets.

Number two, like you said, Jeff, you know what the next six years are going to look like from a financial standpoint. Doesn't mean you don't tend to your retirement plan, but now you don’t have to watch the markets every day because you can be like, I don't care. I got six years. Well, let's go play pickleball.

Nichole: I wouldn't want to watch the markets every day.

Roger: I recall early in my career, when I traded stocks in the 90s. It was a big thing. Back in the day you didn't get real time quotes. You had to pay a lot of money to have quotes that are happening as they're happening. I had my watch boards. I had triggers to give me alarms when certain stocks hit certain levels. It was a hamster wheel. It was like social media doom scrolling before we had social media. Now I don’t have any of those and my decision making is better.

I agree with you. Great job, Jeff. Great job. It's about creating a great life and now you have the mental space to go do that, buddy.

Nichole: Bravo.

Roger: Bravo. All right, let's go set a smart sprint.

TODAY’S SMART SPRINT SEGMENT

On your marks, get set, and we're off to set a little baby step we can take in the next seven days to not just rock retirement, but rock life.

Nichole, you really put the pressure on me. This has to be good. Is that pressure music? Under pressure?

Nichole: We don't have a license to that either.

Roger: Yeah, there's like three or four seconds you're allowed to do and you're okay.

Nichole: Okay. I think you’re allowed if you're singing the music.

Roger: Can we call it singing when I do it?

All right. I think this is a good smart sprint. I know it is, actually. You heard my rant at the beginning of the show.

In the next seven days, if you are within three years of retirement or in retirement, get a resilient plan of record in place. Full stop. Pound the desk. Did you hear that when I pounded the desk?

Okay. Get a resilient plan in place. Your life is too important to try to optimize and squeak out extra returns if you've won the game. If your plan is constrained, don't take the chance, you'll still have money invested if the markets continue to go up. But the impact to your life is asymmetric to the downside in terms of having confidence to rock retirement.

That is a good sprint in the next seven days to feel confident like Jeff does. He knows exactly how his life will work and he'll be able to ride out a storm whether it happens in the markets or in your life.

Nichole: I'm dropping the mic for you.

BONUS

Roger: Now we are going to share the next mission of my grandfather. Have you been listening to this part of the show, Nichole? It's a test.

Nichole: Yes, I listen to everything except the very, very end. I don't always listen all the way through.

Roger: By the way, I've been getting so many emails from people about reading my grandfather's journal and others sharing their stories of their parents or their grandparents and sending me photos. Someone sent me a chapter of a book that talked about his mother's first husband who actually died in the war, and then his mother remarried and had him. It's just beautiful stories about people that have done pretty important things. I love reading them.

Nichole: Now, are you digitizing this or is this physical copy the only thing that you have? Wow.

Roger: I have digitized it.

Nichole: Okay.

Roger: Actually, I need to. I've taken photos of pages, but I need to digitize it fully. This is a short one. Mission number 21.

“August 2nd, 1944. Ship number 274, sortie 14. Targets are marshalling yards in Valencia, France. Target demolished. Flak medium, escort P-51s carry 12500 pound bombs. 8 hours and 30 minutes at 21,000ft.”

This one actually is from July to August, so we had a little bit of time off. A lot of times these are like day after day. That was a very short and sweet one today. And I hope you have a wonderful day, Nichole.

Nichole: I hope you do too.

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 references are historical and do 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.