Retirement Answer Man

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement by Roger Whitney

Retirement Plan Live 2019 - When Life Disrupts Retirement Sep 04, 2019

Show notes

Welcome to a new Retirement Plan Live. If you this is your first time listening to one, be sure to sign up for 6-Shot Saturday to get all the updates. On this Retirement Plan Live, we’ll be working with Emma and Luca. Life has thrown them a curveball and we’ll see if they can still make their ideal retirement a reality given their current situation. Week by week we’ll walk through their situation. On this episode, you’ll hear what happened and what their retirement goals are. Next, you’ll hear about their financial resources. Then we’ll discuss how they can remain agile given their situation. We’ll also discuss their opportunities and the risks that surround them. Each week you’ll get an update in 6-Shot Saturday. Then in October, we’ll have a webinar where we lay it all out on the table to see if they can make their revised retirement dreams a reality. Make sure to listen to the whole series and sign up for 6-Shot Saturday to get all the updates.

Even with the best-laid plans, things can go wrong

Even for those of us who plan and plan and try to prepare for everything, things can go wrong. Life can throw us curveballs from out of nowhere. Your friends, your parents, your kids, your partner and even you can get sick. Death is another curveball that can derail your plans. Divorce, addiction, depression: these can all disrupt our best-laid plans. How do you rock retirement if you don’t even want to get out of bed? Over the next few episodes, we’ll be exploring how you can learn to change your plans to adapt to a new reality.

Who are Emma and Luca?

Emma and Luca have been married for 40 years. She is turning 65 soon and he is 66. They envisioned their retirement to be a combination of work with a bit of flexibility. Travel was a big part of their retirement plans. They enjoy camping and are avid cyclists. Luca is a bit of a workhorse and could never imagine stopping work completely. They are good savers and their ideal retirement didn’t seem too far-fetched. But then one day Luca got sick.

What derailed their retirement plans?

Luca has always been very healthy and was never one for doctors’ visits. But after he got sick and became jaundiced Emma convinced him it was time to see a doctor. Pancreatic cancer was the diagnosis. They didn’t realize it but their retirement plans had changed overnight. With his illness surgery and extensive chemotherapy would be necessary. And even if all went well there is still only a 10% 5-year survival rate. It took them both a while to realize that things would never be the same and their retirement plans would need to change drastically.

How do they deal with all this?

Luca tried returning to work briefly this year but it didn’t last long. Emma’s employer has been considerate of their situation and she has taken some time off as well. It is hard for a man who values work so much to suddenly stop working when he isn’t ready to. Your outlook can become very negative in this situation. They know they can’t go back and change the past so now they must consider what they can do next. They have to balance whether to spend or regret not spending. Emma knows that her retirement plans now must include 2 different versions. Find out what will happen with Emma and Luca by listening to this Retirement Plan Live.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN HOT TOPIC SEGMENT

[2:49] Even with the best-laid plans, things can go wrong

PRACTICAL PLANNING SEGMENT

[10:57] What were their previous retirement plans?
[14:36] What derailed their plans?
[19:32] It took them a while to realize that things will never be the same
[20:54] How do you plan for retirement in this situation?
[26:50] They need to create 2 sets of plans

THE HAPPY LAB SEGMENT

[29:10] It’s only when we cannot change the experience that we look for ways to change the view of the experience

TODAY’S SMART SPRINT SEGMENT

[30:27] Apply that quote to one situation

Resources Mentioned In This Episode

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement by Roger Whitney

Whooooo Are You? (In Retirement) Who? Who? 5 Steps to Creating Your Retirement Identity Aug 28, 2019

Show notes

Over the past month, we have been exploring an important topic in creating your retirement. We have been discussing you. Retirement is another giant life change that can be compared with ending school or beginning a career. This momentous occasion is a great time to give pause and think about who you really are. If you haven’t listened to the previous episodes in this series, you’ll want to go back and listen to episodes 285, 286, and 287. On this episode, you’ll learn 5 steps for creating your retirement identity.

Steps for creating your identity in retirement

Retirement is a long time. You’re starting an entirely new step in life and walking away from the life you once had. This is a great time to think about who you really are and who you want to become. Here are steps you can take to help you create your new identity

Acknowledge who you currently are. What is your current identity?
Reconnect with who you really are via self-examination. Discover what makes you tick.
Examine the past and all the things you built up. Decide what to keep and what to let go.
Begin to test. Play with new ideas and hobbies to discover which ones are a good fit.
Choose. Lean into a new reality that revolves around your interests.
Enjoy the process. Don’t put pressure on yourself to choose, this isn't a race.

What are you going to be when you grow up?

We are asked from the youngest age, what are you going to be when you grow up? People have been focused on their career for so long that once they come to retirement they don’t really know what to do. If you have focused solely on your career then retirement will really be a challenge. It’s time to start focusing on the right things and becoming more self-aware. Get to know yourself better and find your passions so that you know what you want to do when work isn’t there anymore.

How can we become intentional about finding our passions?

Most people aren’t proactive about discovering themselves. Life moves quickly and work, family, and other things get in the way of discovering who you really are. Think beyond money. What motivates you, what makes you tick? What are your drivers? Do you want to belong, to be valued, to be recognized? Start thinking about how you can lead the life that you really want.

How do you build your tomorrow today?

Once you discover what motivates you then you can start to fulfill yourself. Take some time to sit down and analyze your life. Use today to build your tomorrow. Think about how you want to fill your time. Doing the prework of understanding yourself will lead to a fulfilling retirement where you retire towards something, rather than away.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN HOT TOPIC SEGMENT

[3:49] A framework for navigating the new you in retirement

PRACTICAL PLANNING SEGMENT

[10:00] People don’t focus on the right things
[18:49] What kind of framework can we use to become intentional about passions?
[26:20] Where are you going to get your fulfillment in retirement?

THE HAPPY LAB SEGMENT

[36:56] Fall is coming!

TODAY’S SMART SPRINT SEGMENT

[38:58] Part A: Use the framework to figure out who you will be in retirement
- Part B: Sign up for 6 Shot Saturday

Resources Mentioned In This Episode

APP - Carrot Weather

BOOK - Atomic Habits by James Clear

BOOK - Love Does by Bob Goff

BOOK - The Book of Mistakes by Skip Prichard

BOOK - Necessary Endings by Henry Cloud

PODCAST - The Enneagram in Your ReaLife with Teresa McCloy

BOOK - The Longevity Economy by Dr. Joe Coughlin

BOOK - Don’t Retire, Rewire by Jeri Sedler

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement by Roger Whitney

Whooooo Are You? (In Retirement) Who? Who? How to Determine What’s Next with Skip Prichard Aug 21, 2019

Show notes

Do you know what’s next for you in retirement? We continue our exploration of self-reinvention and self-discovery today as we have during this whole monthlong series. On this episode, you’ll learn an important step in the process of self-discovery, which is how to close the book on the past. Before you retire you will want to ask yourself who you really are and who you want to be in the coming years. I interview Skip Prichard, author of The Book of Mistakes, to learn tools we can use to help reinvent ourselves. Learn how to close the door on the past and create your new identity for that new season in life on this episode of Retirement Answer Man.

A booklist to help you determine what’s next for you

The Longevity Economy by Dr. Joseph Coughlin. Dr. Coughlin approaches the subject of longevity with an economic spin. This help will help you deconstruct your internal narrative on growing old.
How to Live Forever by Martin Freedman. This book helps you to ponder what life is really about. It connects great stories and gives examples of how to create a meaningful life.
Halftime by Bob Buford. This book is about changing your game plan for success. It will help you reset your new vision and connect with what's driving you. This is an excellent framework to help you reflect on what you can do next.
Don't Retire, Rewire by Jeri Sedler and Rick Miners. Jeri and Rick provide exercises throughout the book to help you find work and a life that is fulfilling in retirement.
Love Does by Bob Goff. This treasure of a book is a call to action to lean in to do amazing things.
The Book of Mistakes by Skip Prichard. You’ll hear more about this one in the Practical Planning segment.
Necessary Endings by Dr. Henry Cloud. We all know that there are different seasons to life, but finding closure can be a challenge. This book will help you identify and navigate the difficult conversations and actions to help you close out seasons of your life.

How do we define success?

The subtitle of Skip Prichard’s The Book of Mistakes is 9 Steps to Creating a Successful Future. But how do we define success in retirement? Making money is no longer a factor. What are other ways we can define success? Skip believes that success can be defined by the maximization of all of your God-given talents. He thinks the trickiest part of success is finding a balance between peace and aspiration at the same time. We’re not meant to be stagnant. We need to continue to aspire for more but still have peace in our lives.

What is your why?

There is so much you can do in retirement. You are no longer bound by the confines of work or family life. Now it’s time to work on your why. One idea is to take a year just to try new things. Learn an instrument, go to shows, look for the things that really drive you. This is your opportunity to design your life to your specifications. But before you do that you need to stop and reflect. Is this really where you want to go? The most important thing you can do in retirement is move toward something, not away from something.

How do you define yourself in retirement?

As a society, we have attached ourselves to our labels of what we do for work. But what do you do when you stop working? You don’t want to refer to yourself as a retired lawyer for the rest of yourself. Think about creating your own mission statement. What do you want to be known for? How do you achieve those things? It’s important to plan how you will go about achieving your goals and define the true you.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN HOT TOPIC SEGMENT

[1:58] A book list for the new you in retirement

PRACTICAL PLANNING SEGMENT

[10:55] Why did Skip choose to write The Book of Mistakes in parable form?
[14:05] How do we define success in retirement?
[23:44] What is Skip working towards?
[28:48] How do you define yourself in retirement?
[32:54] How do we limit distractions?

THE HAPPY LAB SEGMENT

[39:34] Sometimes we think things are mistakes when they really aren’t

TODAY’S SMART SPRINT SEGMENT

[42:22] Identify what you need to do to give yourself closure

Resources Mentioned In This Episode

BOOK - The Longevity Economy by Dr. Joseph Coughlin

BOOK - How to Live Forever by Martin Freedman

BOOK - Halftime by Bob Buford

BOOK - Don't Retire, Rewire by Jeri Sedler

BOOK - Love Does by Bob Goff

BOOK - The Book of Mistakes by Skip Prichard

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement by Roger Whitney

Whooooo Are You? (In Retirement) Who? Who? Rediscovering Your Authentic Self Using the Enneagram with Teresa McCloy Aug 14, 2019

Show notes

As you approach retirement, take time to reconnect with your authentic self. We continue with the ‘who are you in retirement’ series by learning how to connect with your authentic self using the Enneagram. Today we welcome Teresa McCloy from the Enneagram in Your Real Life podcast. Teresa is here to show you how the Enneagram can help you rediscover your authentic self. Teresa is an Enneagram expert that teaches people how to apply the Enneagram intentionally to create a better life. Listen to this episode to learn how to use the Enneagram to rediscover your authentic self.

Do you have many low stakes casual friendships?

Low stakes casual friendships are those relationships with people that we see in passing. Consider the barista from the coffee shop, your hairdresser or the waitress at your favorite restaurant. They are the people you know a little bit about but you wouldn’t call at 3 a.m. with a problem. A recent study was done on the importance of low stakes relationships in our lives. We need social attachments. We feel comfortable when we go places where we are known and recognized. As you create your deeper social network don’t forget the community around you. You never know where these casual friendships may lead

How can the Enneagram help you discover your authentic self?

The first step in rediscovering your authentic self is to do some self-examination. This will help you to create your identity in retirement You need to identify what drives you and gives you pleasure. There are plenty of personality assessments you can take like the DISC assessment or Meyers Briggs, but the Enneagram can be an even more powerful tool for self-discovery. The enneagram is different from the rest because it speaks more to the heart. It gives us insight into becoming our best selves by connecting the head, heart, and gut.

How can the Enneagram help you in retirement?

When you retire you may be at the top of your game in whatever it is you do to earn money. But that area may not be where your authentic self lies. Retirement gives you another opportunity to reconnect with your true self. The Enneagram gives us insight into becoming our best self through these three centers: the head, the heart, and the gut. With this tool, you can reconnect with all three. The Enneagram gives you the language you can use to connect with others as well. It can also help give you grace and empathy to understand how to communicate with those around you.

How can the Enneagram help you connect with your spouse?

The divorce rate for couples over 50 is at an all-time high. Once you and your spouse are home all day, every day you may have trouble connecting. Many people find that when they retire they no longer feel a connection to their significant other. The Enneagram can help you discover your authentic self but it can also give you an understanding of how you relate to others and understand that others communicate differently. It can give you the language to use with your spouse and help you have grace and empathy. After you listen to this episode check out Teresa’s podcast and give the Enneagram a try.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN HOT TOPIC SEGMENT

[2:49] The importance of the low stakes relationship

PRACTICAL PLANNING SEGMENT

[7:46] Teresa McCloy discusses how to use the enneagram intentionally to create a better life in retirement
[20:14] How can the Enneagram help you find your authentic self?
[28:16] How does the Enneagram help couples?

THE HAPPY LAB SEGMENT

[31:49] Who are your low stakes friends?

TODAY’S SMART SPRINT SEGMENT

[33:33] Check out the Enneagram in Your Real Life podcast

Resources Mentioned In This Episode

PODCAST - Enneagram in Your Real Life with Teresa McCloy

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement by Roger Whitney

Are You Ready to Redefine Yourself in Retirement? with Dr. Joe Coughlin from the MIT Age Lab Aug 07, 2019

Show notes

How are you going to redefine yourself in retirement? Retirement means making the life transition from a full-time career to full-time living on your own terms. Although this is exciting, it can also be scary. During this series, you’ll learn how to create a framework to do this successfully. Learn how to figure out your identity and who you want to become. Are you ready to redefine yourself in retirement? Listen to this episode of Retirement Answer Man to begin to make this huge transition in your life.

Who are you?

We get so wrapped up in our professional titles that now in retirement you have a void to fill. Not only do you have to figure out the logistics of money, healthcare, where you’re going to live, now you’ll have to figure out your identity. Some people can lose direction when they retire. They think about who they were rather than who they want to become. Creating an identity from a completely blank slate can be a challenge. People don’t do well with blank slates. We prefer multiple-choice questions and don’t have the skills required to choose from such a broad palette. Do you know who you are? Do you know who you want to become?

Why did I shift the focus of this series from finding your purpose?

I had originally planned for this month to be all about finding your purpose in retirement, but then Mike the listener had an objection. Mike feels that there is too much pressure in finding your purpose of retirement. You probably won’t solve the problem of world hunger. Retirement is like the start of college, it’s the beginning of another round of self-exploration. Unfortunately, the analogy ends there since college has a structure and pressure. A well-funded retirement is free of pressure and structure. How will you grow and change in the absence of pressure?

How can you hack longevity?

It used to be that you might get 10 years of retirement in to simply sit on the park bench. Nowadays ⅓ of your adult life consists of retirement. The pattern written by previous generations doesn’t hold up for this new generation of retirees. This new stage of life has to be reinvented. Just because you stopped working doesn’t mean that you stop everything. People are beginning to hack their longevity by identifying their interests early on in retirement. These interests will carry them for the years of their retirement.

Are you ready to redefine yourself in retirement?

When you retire, you can’t just run away from work, you need something to run to. It's not the absence of work that people desire in retirement, it’s the flexibility. Before beginning your retirement it’s time to start thinking about who you really are. What’s your reason to get up in the morning? What will be your storyline? How can you use the skills you have accumulated over a lifetime and translate them into the new game of retirement?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN HOT TOPIC SEGMENT

[3:45] We get so wrapped up in our professional titles
[8:14] Blank slates can be a challenge
[9:00] Why we aren’t searching for a purpose this month
[17:55] What is going on in the Rock Retirement Club this month?

PRACTICAL PLANNING SEGMENT

[19:08] Dr. Joseph Coughlin is the director of the MIT Age Lab
[25:22] People are hacking their retirement
[31:55] How can we build support networks in retirement?

THE HAPPY LAB SEGMENT

[34:44] Axe throwing is really hard to do

TODAY’S SMART SPRINT SEGMENT

[36:56] Identify your identity right now

Resources Mentioned In This Episode

BOOK - The Longevity Economy by Dr. Joseph Coughlin

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement by Roger Whitney

Is an Annuity Right for Retirement? Your Annuity Questions Answered Jul 31, 2019

Show notes

You may still have some questions about annuities so in this episode I answer your annuity questions. We have had several listeners ask some great questions which will help clarify how annuities work. After diving deep into annuities during this 5-week long month, we can all look forward to the next series where you will learn how to figure out who you will be in retirement. But before that, listen to this episode to get all of your annuity questions answered.

Why can’t people just self-annuitize?

Ryan asks: why don’t individuals self-annuitize by using the IRS required minimum distribution (RMD) tables. This way they can keep control of their assets with the additional benefit of being able to leave the assets as an inheritance.

This is actually a great idea and the idea that the IRS has behind the RMD. The primary difference between this example and an annuity is the risk factor. In an annuity, the risk has been removed in exchange for your loss of control of assets. So in this example, you would still maintain control of the assets but you would still need to factor in market risk and execution risk. Would you prefer to use your IRA in this way or get an annuity?

Do RMD’s play a factor in annuities?

Another listener is curious about the role that RMD’s play in annuities. Her husband recently bought an annuity and was told that he would have to begin the annuitization phase at age 70 ½ due to the RMD.

The reason that he has this stipulation is that he must have bought the annuity using tax-deferred assets. If you have other tax-deferred assets you could postpone the annuitization period as long as you are still taking the RMD from other sources. If you have bought an annuity, did you use pre-tax or post-tax assets?

Why do insurance companies handle annuities, and how do they make money?

Insurance companies handle annuities instead of banks or investment firms because they are pooling risk from a large group of individuals to spread the risk in a similar way as that of an insurance policy. But the insurance company makes money much like a bank. They collect money from thousands of individuals and then they are able to invest it and earn a larger percentage than that of their policy payout. It’s like you going and buying a cd. It is important to remember that an annuity shouldn’t be seen as an investment but rather as a pre-purchased pension.

What if you don’t want to know all the details surrounding annuities?

One listener thinks that annuities sound like an excellent option for her retirement but she doesn’t want to know about the fees and charges. With an annuity, it is important not just to read but also understand the contract which is no easy task. The way the contracts are written could cause you to accidentally break the contract if you aren’t careful. If you aren’t looking to be swamped by details, a fixed annuity is much more straight forward than a variable annuity.

If you are considering an annuity you need to first think about your overall retirement strategy. Let the process drive decision making. Consider why you are interested in annuities. Are you looking to insure longevity risk, simplify your financial life, or buy a pension? Remember that you are not buying an investment. So what do you think of annuities? Do they seem like a good option for you?

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN HOT TOPIC SEGMENT

[2:18] Who are you going to be in retirement?

PRACTICAL PLANNING SEGMENT

[6:50] Why wouldn’t people just self-annuitize?
[8:55] Do RMD’s play a factor in annuities?
[10:54] Why do insurance companies handle annuities?
[13:40] What if you don’t want to know all the details surrounding annuities?
[16:06] Are insurance companies selling off their annuity lines because they feel they can’t be profitable?

THE HAPPY LAB SEGMENT

[20:24] I am excited about next month’s series that focuses on who you will be in retirement

TODAY’S SMART SPRINT SEGMENT

[21:14] Eat the frog - do the thing you don’t want to do first thing in the morning

Resources Mentioned In This Episode

BOOK - Eat that Frog by Brian Tracy

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement by Roger Whitney

GoodFinancialCents.com/annuity-riders

Is an Annuity Right for Retirement? The Pros and Cons of Variable Annuities Jul 24, 2019

Show notes

In this episode of the annuity series, we’ll discuss the pros and cons of variable annuities so that you can learn whether a variable annuity should be a part of your retirement plan. During the Hot Topic segment, we’ll discuss the Rock Retirement Club since enrollment just opened back up. Then in the Practical Planning segment, we jump back into our discussion on annuities. You’ll learn all about variable annuities to help you become more informed. Listen to this episode to learn the pros and cons of variable annuities.

Is the Rock Retirement Club right for you?

The Rock Retirement Club has opened its doors once again! Now with over 200 people, the RRC was created last fall as a safe space to help others in various points along their retirement journey. The motto of the Rock Retirement Club is, “Walk with the wise and become wise.” Check out the RRC if you are interested in these 3 things:

Get a world-class education on how to ‘do’ retirement. We do this by creating educational courses, workshops run by experts, and meetups on how to do specific things.
Take action. We have a monthly action plan to help you take baby steps towards your retirement goals and we give you the tools to take action.
It is a safe place to walk with others along this retirement journey.

What is the difference between a variable annuity and a fixed annuity?

There was $200B in annuity sales in 2018. Of that, $100B was in variable annuities. Since variable annuities are such a big part of the market, we should learn more about them. How is a variable annuity different than a fixed annuity? There are still the 2 phases of annuities: the accumulation period and the annuitization or distribution phase. In a fixed annuity you are paid based on a fixed rate specified in the contract. In a variable annuity, you are able to choose from a menu of mutual fund clones then when you go to annuitization you are paid based on what the portfolio was able to grow to. Basically, the case for variable annuities is that you’ll be able to potentially build a bigger pot to annuitize from.

Pros and cons of variable annuities Variable annuities have many riders to choose from

Another thing variable annuities have are riders. There are a lot of riders that are designed to provide you with income at some level without having to annuitize first. But the devil is in the details with these riders. You can often get a death benefit rider or a long-term care rider. There could be a guaranteed withdrawal benefit which may give you some guarantee about how much you’ll be able to withdraw. A lifetime income benefit rider can provide you with a guaranteed lifetime income. There could be a guaranteed minimum accumulation rider and so many others to choose from. Check out the Good Financial Cents website to learn more about the different types of riders you may come across with variable annuities.

What are some disadvantages to variable annuities?

Since you are investing in markets you could end up with a lower payout. If you do well and the assets grow they will be taxed as ordinary income rather than capital gains. Then there are the fees. There is a mortality expense, an investment expense, a manager expense, a surrender fee, and then, of course, the riders. There could be anywhere from 2.5% - 4% in annual fees, but if you get any riders attached then those fees could bump up to 6%. These types of products are usually sold rather than being sought out. The people that are selling annuities aren’t fiduciaries so they don’t have your best interest at heart.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN HOT TOPIC SEGMENT

[3:31] The Rock Retirement Club has opened its doors once again

PRACTICAL PLANNING SEGMENT

[10:01] How is a variable annuity different than a fixed annuity?
[14:20] Variable annuities have many riders to choose from
[16:35] What are some disadvantages to annuities?

THE HAPPY LAB SEGMENT

[22:45] To be happy we need to minimize confusion

TODAY’S SMART SPRINT SEGMENT

[24:35] What can you simplify in your life?

Resources Mentioned In This Episode

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement by Roger Whitney

Is an Annuity Right for Retirement? The Pros and Cons of Fixed Annuities Jul 17, 2019

Show notes

On today’s episode of Retirement Answer Man, we’ll consider the pros and cons of fixed annuities. During this series on annuities, we are discussing whether annuities are right for your retirement. Many people choose pretirement as an income floor for their first few years of retirement to help them ease into the lifestyle and decrease financial risk. An annuity can be considered a backend floor to cover your retirement spending in your 80’s, 90’s and even 100’s. We all know that longevity is a big factor in retirement planning and a fixed annuity could help supplement your social security income in old age. Listen to this episode to help you consider the pros and cons of fixed annuities so that you can judge whether an annuity is a good choice for your #retirement.

What are the pros and cons of fixed annuities?

What are the pros for a fixed annuity? Since an annuity is like a pension that you pay for in advance, you get a guaranteed income for the rest of your life. Once you buy it and put it in place you can‘t really mess it up. It also offers protection for your future self. You may not be as astute in your later years and an annuity can help protect you against fraud, poor judgment, etc. An annuity also gives you a kind of longevity insurance since you get payments for your entire life whether you live until 80 or 110.

Although an annuity can simplify things, you must give up some things in return. First of all, you give up your lump sum. In doing so, you lose the opportunity to use the money in a different way. You don’t really know how much you will get in return since it is gone if you die the next day. Another potential downside is inflation. By the time you actually begin annuity payments, the inflation can lower your purchasing power by 20% or more. You also give up the opportunity to leave a legacy with the money.

Why did B.W. choose to purchase an annuity?

B.W. is a member of the Rock Retirement Club and has recently retired at age 55. He has decided to dive headfirst into retirement financial planning. Since he chose a bucket strategy for retirement expense planning. He has 10 years of spending set aside until he reaches the age of 65. At age 65 he’ll receive Social Security and a pension which will cover 75% of his costs. He decided to find an annuity to cover the other 25%. B.W. chose a deferred annuity since he doesn’t need the money until the age of 65. He looks at purchasing an annuity as an insurance policy rather than an investment. Listen to this episode to hear why B.W. chose to purchase an annuity to cover his retirement expenses.

How did B.W. determine which annuity to buy?

B.W. started searching for annuities by considering the amount of money that he wanted to cover. He also knew how much he was willing to spend. This led him to explore the options that he could afford. He narrowed his selection down to one consideration: What would be the guaranteed joint life income stream from the annuity? He looked at just about every annuity there was and considered various sources. B.W. ended up choosing a deferred fixed annuity called SPDA (single premium deferred annuity). He chose an annuity that would cover both the lives of he and his wife. Are you considering an annuity as a way to provide income in retirement? Listen now to hear how B.W. figured out which annuity would work best for his goals.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN HOT TOPIC SEGMENT

[4:10] Have you considered a backend floor to cover your retirement spending?
[8:25] What do you give up with an annuity?

PRACTICAL PLANNING SEGMENT

[21:28] Why did B.W. choose to purchase an annuity?
[24:22] How did he determine what to buy?
[27:37] What class of annuity did he end up with?
[30:10] What were the options that he considered?

THE HAPPY LAB SEGMENT

[39:26] I’m happy that my friend Vinny started the Total Life Freedom podcast

TODAY’S SMART SPRINT SEGMENT

[41:40] Go to RockRetirementClub.com and check us out

Resources Mentioned In This Episode

PODCAST - Total Life Freedom

Episode 280

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement by Roger Whitney