Retirement Answer Man

Latest Episodes:

31 What You Can Learn From the Retiree Next Door Sep 16, 2014

Show notes

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

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

Recently, I spoke with Moneytips.com's Michael Dubrow about the project and some of the lessons learn for those working towards retirement. Take a listen and learn:

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

These projects are great because they help us learn from those that have walked before us. No theory here, just practical incites into the Retiree Next Door.

30 How to Invest in Your Marriage with Jackie Bledsoe Sep 14, 2014

Show notes

Have you ever felt distant from your wife? I sure have. In my 23 years of marriage, there were times my wife and I drifted apart. It's easy to do. Work, kids, hobbies, etc. can cause a man and wife to drift apart. We eventually learned we needed to be intentional about nurturing our marriage. Plan Well: Invest in Your Marriage

In this week's episode Jackie and I discuss how married men can become the leaders they want to be.

Jackie helps husbands and fathers learn how to lead and love their families so they can have lasting, fulfilling marriages and meaningful influence on their kids.

How to be the leader you want to be
Husband as a servant leader
The G.E.T. strategy: Give, Encourage, Teach
How to control your inner voice
The importance of having a date night with your wife
The top ten dates to improve communication
How to have date nights that fit your time and budget
Lessons he learned from his parents 50 year marriage
Why you need to know the 7 Rings of Marriage

Want to be a better husband and father? Check out Jackie's great resources:

His blog at jackiebledsoe.com
Date Night in a Box
The 7 Rings of Marriage

Invest Wisely: Should I Worry About Big Bad Events?
The recent anniversary of the 9/11 terrorist attack reminds us that big bad events can happen in the world. There always seems to be some catastrophic event "just around the corner":

Russian and the Ukraine
ISIS
Syria
Terrorist threats
China

Should you worry about these as you invest for your future? It sure seems so. This week, I take a look at how markets have acted after some of the biggest "big bad events" over the last 75 years.

It's easy to act emotionally with investing. Our emotions drive most decisions. If you are going to Invest Wisely for your future, it's important you focus on facts and process. This will help you make smarter financial decisionsHere's a table to give you some perspective:

Should I Convert to a ROTH IRA? A Talk with Ed Slott Sep 07, 2014

Show notes

Taxes suck. They erode away your income, savings and investments. One strategy to maximize your retirement savings is to convert your IRA to a ROTH IRA. ROTH IRAs are a powerful tool to help you do this but there are lots tax and planning issues to consider first.

That's why I turned to Ed Slott, America's IRA expert. He is a nationally recognized IRA-distribution expert, a professional speaker, and the creator of several public television specials, including the most recent, Ed Slott’s Retirement Rescue! Investing Corner--The Importance of Dividends

When most people thing of making money in equities, they think of buying low and selling high. That's a great strategy, but it's only part of the story. This week I explore the importance dividends can have in any investment portfolio.

I discuss these 5 reasons dividend can be a benefit to any portfolio:

How dividends have comprised over 50% of the total return of the S&P 500 index
The favorable tax treatment dividends can receive
How dividends can be a good hedge against inflation
Why dividends can help you control risk in your portfolio
What are the attributes of most companies that pay dividends

Retirement Tip of the Week During my conversation with Ed Slott, we cover:

Best places to save for retirement
The benefit of contributing to a ROTH IRA
Ed's "Forever Tax to Never Tax" strategy using a ROTH IRA
The importance of understanding the ROTH IRA conversion rules
When it doesn't make sense to use a ROTH IRA
How to use ROTH IRAs as an estate planning vehicle
The types of people that should consider converting to a ROTH IRA
The order to draw from your taxable, IRA & ROTH IRA accounts during retirement
The benefits of drawing from your IRA in order to delay Social Security during retirement
Biggest mistakes people make with IRAs

Have you considered converting to a ROTH IRA? If you have a question, ask me at rogerwhitney.com

#28 4 Strategies for Beating Retirement Planning Stress Sep 01, 2014

Show notes

Stressed about planning for retirement??? Your not alone, most of use (including me) freak out when we look at what it could take to provide for our family in retirement. Don't believe all the statistics, you can take control. Investing Corner

Listener Question Wayne Asks

My question is are there hidden risks doing my diversifying on top of diversity that I do not realize, other than my time for managing, and the loss of opportunity of my conservative and explore portfolio $s?

Wayne has multiple portfolios, each with it's own allocation

Large aggressive portfolio
Small moderately conservative portfolio
Explore portfolio (where he invests based on his economic views)

Hidden risks might include:

You are 55, and close to the danger zone. A time 5 years before and after retirement when big investing mistakes can have the most impact on your retirement. The retirement danger zone is a time to focus on consistent investment returns.
Not having a consistent risk profile of your investments based on what you are trying to accomplish
Not having a process for evaluating the value, performance of each bucket. (no bonus points for complicated investments)
Chasing returns or safety at the cost of focusing on your lifestyle goals for retirement

Retirment Planning Stress: How to take control No Wonder We're Stressed:

60% of all works have less than 25k saving for retirement (USA Today)
Only 22% of workers have over 100k saved for retirement
Only 28% of current retirees have over 100k in savings and investments

4 Strategies for Beating Retirement Planning Stress:

Forgive yourself--We've all made financial mistakes. Stop with the coulda/woulda/shoulda's and own where you are now and focus on the future.
Don’t stick your head in the sand--Don't get discouraged by the statistics about retirement. Regardless of your financial situation, you CAN make progress.
Take control of your financial decisions
Think creatively about your future

rogerwhitney.com

#27 Screw Retirement Goals, Here's a Better Way Aug 25, 2014

Show notes

Setting retirement goals can be a big waste of time.

In my 23 years of advising individuals and families, I've rarely found someone that had clear retirement goals. Guess what? They were still able to live a great life and retire comfortably.

In this episode I'll explore the problems with setting retirement goals and offer a better way to plan. Retirement Tip of the Week

How to Prepare for the Unthinkable: a House Fire

Recently someone close to me went out for a movie and returned to find their home burnt to the ground. They lost everything, including their dog. In a few short hours they had no home, no clothes, no furniture, no family photos, no records, no nothing.

This is the type of thing that can never happen to us, right? It's the type of thing that happens to "other" people. Think again.

Here are some simple tips to help you prepare for this unthinkable crisis. Complete a Video Inventory

Work room to room
Narrate, describing items (brands, models, amounts)
Specifically document valuables (jewelry and artwork)
Don't forget the garage
Keep copy of video outside the home
Update annually

Back Up Important Documents

Tax returns
Photos
Contracts
Estate plan
Financial information
Keep back up offsite (loved one's safe or safe deposit box)
Update Annually

Understand Your Home Fire Coverage

Full replacement cost coverage
Market value coverage
Personal property coverage
Valuables rider for expensive items such as Jewelry, etc.

After the Fire

contact insurance agent immediately
Ask for advance on your claim to cover short-term costs
Secure your property
File claim right away
Keep track of all living expenses (with receipts)
Don't stop paying your homeowners insurance premium
Don't close your claim out too fast
Get grief counseling

Feature Presentation: Screw Retirement Goals, Here's a Better Way
Retirement Goals. In my experience, few people set them and even fewer stick to them over the long-term. Retirement goals are something we are told we need to have so we can plan for them. Traditional planning forces them upon you and then shows you all the saving and sacrificing you'll have to do to achieve them. No wonder nobody plans.
Recently a mentor of mine, Michael Hyatt, wrote a great blog about the problem with the traditional concept of retirement (Why Retirement is a Dirty Word). I agree with him.
If retirement and retirement goals are outdated concepts than how do you plan for the future?
In this episode, I'll explore some of the problems with setting retirement goals and show you a more productive way to plan for the the future.
I discuss:

The problem with traditional retirement goal setting
Why we don't stick with retirement goals
How you might be limiting your future
How you might be limiting your current life
The importance of priorities
How to turn your financial priorities into actions
How to negotiate with yourself
How to live a more balanced life

QUESTION: Do you have retirement goals?

If so, are they meaningful?
If not, Why?

Let me know via Twitter Tweet to @roger_whitney

What You Need to Know Before Investing in Rental Properties Aug 18, 2014

Show notes

If you chose to invest in real estate as part of your retirement plan, you better understand what you're signing up for.

Most "educational" classes, workshops etc. focus on all the benefits of real estate and gloss over the realities of doing it. Buying, owning and operating rental properties is hard work. This week, I talk with Philip Wetzel about the real work that goes into investing directly in real estate. Retirement Tip of the Week

3 lessons from Jim Collins' books Good to Great and Great By Choice that you can use to make smarter financial decisions.

Two of my favorite business books are Great By Choice and Good to Great. Last week, I had the pleasure of hearing the lead author of each, Jim Collins, speak. It was awesome. The lessons learned from his research on what made companies great can easily be applied in managing your financial life. Here are 3 that you should start using today...

First who, than what
Confront the brutal facts (yet never lose faith)
Fire bullets, then cannonballs

Feature Presentation: What You Should Know Before Investing in Real Estate
Investing in real estate can be a good thing-as long it fits your situation, you truly understand the risks and work involved and stay diversified.
There are plenty of workshops, classes, seminars, infomercials systems, etc. out there to "teach" you how you should do it. Unfortunately, they are typically strong on the benefits and light on all the work needed to position yourself for success. In this episode, I start to give you the rest of the story.
Some of the topics we cover are:

Why you need to run it like a business
How to do your homework before you buy your first home
Why passive real estate investing is not really passive
The difference between flipping house and real estate investing
The importance of having cash reserves
The advantages of being a handyman
The advantages and dangers of using leverage
Why you need to put 20% down when you buy a property
The importance of finding quality tenants
How management companies work

#25 How to Organize Your Financial Records Aug 12, 2014

Show notes

My financial records are a mess. Are yours?

In this episode, I'll outline the framework I'm going to use to get my recording keeping in order. Could you find that important docuement if you needed to?

If not, listen and we can get organized together.

In the Retirement Tip of the Week, I'll give you a framework for lending money to friends or family so you can help out without ruining the relationship.

#24 Strategies for Handling Market Corrections Aug 05, 2014

Show notes

Is the stock market correction here? In the last week of July the S&P 500 index lost 2.7%. The worst weekly loss in over two years. It didn't take long for the sensationalist headlines to pop up. Here are two of my favorites. Warning: That plunge in stocks is just the beginning

MarketWatch.com 3 market warning signs predict 20% stock tumble Insight: When these indicators flash together, it’s time to sell

MarketWatch.com

Strategies to Help You Handle Market Corrections

I'm all about investing wisely for retirement. If you are a trader, market timer, trend follower, etc. you might want to click away. For the rest of you, here are my suggestions to help you invest wisely and sleep better at night. 1. Have a Plan

Sounds simple but most people don't. They invest based on intuition, emotion and trust rather than facts, process and purpose. Your plan doesn't have to be elaborate it just needs to be clear and actionable. It should include:

Goal for investment assets
Investment timeframe
Risk/reward target
Target investment allocation
Rebalancing policy
Communication and evaluation schedule

2. Have adequate cash reserves
More than anything, this may the most practical strategy to weather market corrections. One of the biggest mistakes you can make is to sell an investment at the wrong time because you need the money.
With interest rates on savings accounts near 0%, it is tempting to put all your money "to work". Don't. Cash reserves give you the flexibility to weather uncertain times in your life as well as the markets. (in episode #17 I discuss cash reserves). Here are the basics of cash reserves
Emergency fund (3 months to 2 years living expenses) + Expected expenses within the next 12 months=Less emotional decisions
3. Have at Least a 3 Year Investment Timeframe
Anything under a three year time frame is speculating not investing. Investing wisely requires time.
4. Be Well Diversified
Every time I say this I feel like the teacher in the Peanuts cartoons...Blah, Blah, Blah. Diversification and asset allocation help you avoid the trap of trying to pick winners and losers. They position you to participate in the economic growth of the world. That is the point of investing. The more you try to game the system, the more likely you'll miss out (Here is a recent episode on investing mistakes).
One thing you can do right now is make sure your allocation is rebalanced back to the target you should have set in the beginning. Over the last 4 years, the stock markets have done quite well. If you haven't rebalanced to your target you probably have a lot more equities than you originally intended. This could mean you have more volatility than you bargained for. Studies have shown that rebalancing your portfolio regularly helps you achieve better results. Rebalancing Feels bad, but works good.
5. Understand Market Corrections are Healthy for the Markets and Your Portfolio
You've heard it said that investing is like gambling. In a sense that's true. If you invest based on intuition, emotions and the advice of the financial press, you're just one of the suckers walking into the casino. If, however, you invest based on history, research, process and prudence you are more likely to have the odds of the casino over the long-term. That is investing wisely.
Retirement Tip of the Week Try it Before You Buy it
You need to be very careful when you are in the Retirement Nesting stage of life. Retirement Nesting occurs during the 3 years prior to retirement and the 2 years after you retire. This is the time of retirement lifestyle dreams. AND a time when you are susceptible to marketers selling the retirement dream.
The Retirement Nesting stage is a danger zone for poor financial decisions. Don't fall for the emotional urges to buy an R.V., vacation lot, condo or big toy. They can be great but you need to be certain, very certain, that it is something you will truly use. Just recently, I had to help a gentleman unload a beach condo he purchased on a whim 5 years ago. He lost over $100k on the deal (and only used once). Don't be that guy.
Here are some tips to avoid the same mistake:

Do LOTS of research over a 12 month period before you buy
Always pay cash.
Rent the object of your desire for the first 2 years to see how much you actually use it. It is easy to rent anything anywhere nowadays.
Test drive vacation homes, R.V.s and resorts over the first 5 years of you retirement. It can be great fun and save you from making a costly mistake.

Resources Discussed

7 Ways You Can Screw Up Your Retirement Jul 25, 2014

Show notes

The cost of a financial misstep in retirement can be devastating. During retirement it is hard to "earn" your way out of poor decisions. Poor planning or a big loss during retirement can ruin your financial security. In this episode I discuss the most common retirement "screw ups" I've seen and how you work to avoid them. 7 Ways to Screw Up Your Retirement Having unrealistic return expectations for your investment assets (too high in 1990s, too low in 2007-08)

Crazy as it sounds, in the 1990s people retired thinking they could earn 15%-20% per year and take 10% from their assets for retirement income.

Today, we see the opposite extreme. After 2008-07, people aren't so optimistic about retirement. In fact, they are down right pessimistic. Not sticking to a spending plan and reviewing it annually

When you retire it is essential that you become more intentional about your spending. In retirement your earnings power diminishes. You'll have less opportunities to earn your way out of poor spending choices.

Set a spending plan and review it annually. This will allow out adjust as your situation changes. Falling in love with an investment or investment strategy

Real estate; Gold; Rental houses; Tech stocks; Dividend stocks. I've seen it all over the last 23 years. Just because you've had great success with a particular investment or strategy doesn't mean it is the be all end all. Managing assets during your retirement years is more about consistency and protection than stellar returns. The past is littered with "sure thing" investment that have gone bust. Just look at the list above. Financially supporting/enabling adult children

I'm not sure where the line is between occasionally helping a child out and enabling them. We've seen retired parents destroy their financial security by bailing out their children from there poor choices. A good litmus test is to ask yourself: Are you preparing your children for the path, or the path for the child? Starting or investing in a small business

Starting a business or investing in a new venture is exciting. Be careful. They all sound exciting at the start but most small businesses fail. Retirement is not the time to invest a lot of money in an entrepreneurial dream. Buying expensive lifestyle toys (vacation home, R.V. or land)

Go ahead and dream big but be careful about spending big money on your retirement toy. It's very common to see older retirees saddled with debt on an expensive R.V. or vacation lot that isn't used and worth a fraction of the loan amount. Sticking your head in the sand when it comes to your financial life

Not being aware and willing to address the financial realities of your retirement is a sure way to screw it up. Retirement Tip of the Week

Complete your estate plan. Yeah it's boring and can cause some uncomfortable conversations, but get it done. Please

Tips to getting the estate planning questionnaire done:

Don't try to do it at home
Set an appointment with your spouse outside of the house to complete
Have your advisor or a trusted friend interview to complete it

Tips for Keeping it up to date:

Review it once a year with your spouse and trusted advisor
Review the same time each year (like a holiday or annual family gathering)

[button_2 color="red" align="center" href="https://itunes.apple.com/us/podcast/plan-well-invest-wisely/id834314596"]Subscribe in iTunes[/button_2]

Invest Wisely: LPL's Investor's Almanac: Mid-Year Outlook Jul 17, 2014

Show notes

This week I speak with Burt White, Chief Investment Officer of LPL Financial. Burt and I discuss LPL's mid-year outlook Titled: The Investor's Almanac.

Burt and his team do a great job simply communicating the economic and investing environment. Their Investor's Almanac is a great tool to help us invest wisely. No bold predictions or market calls here, just easy to understand insights you can use to make better informed investing decisions. If you'd like a free copy of their Investor's Almanac you can access it in the Retirement Answer Library.

In this episode we discuss:

how to use investment outlooks to Invest Wisely
where the U.S. is in the economic cycle
where they see potential risks and opportunities
how international markets are not in sync with U.S. markets
why you should consider harvesting high quality bonds
possible alternatives to traditional fixed income
places to find income
super themes that should provide a benefit the U.S. economy
the importance of turning off the worry factory of financial media

Retirement Tip of the Week: Designating a Trust as a Beneficiary of an IRA
Last week a client called requesting the beneficiary of his Individual Retirement Account (IRA) be changed to a trust. This planning strategy has become more popular over the last few years. This strategy for IRAs can has some benefits if the ultimate beneficiary is:

a minor child
someone with special needs
a spouse from a second marriage
a spendthrift with poor financial skills

The trust can help protect the inherited assets and better control how those funds are used by the beneficiary of the trust.

Be careful using this strategy though. Done incorrectly, the strategy could conflict with IRS rules and possibly create big tax problems. It is important the attorney drafting the trust be familiar with certain aspects unique to inherited IRAs.

Some things to consider are:

Make sure the beneficiaries of the trust are people. They cannot be non-persons (like a charity)
Consider adding language specifically prohibiting distributions to non-persons
Make sure it is a Conduit Trust. It should include language that requires the distribution from the trust to the beneficiaries of the Required Minimum Distributions coming from the inherited IRA.
If there is more than one beneficiary, consider having a separate trust for each. This will also each trust beneficiary to use their own age for required minimum distributions

Our TOPPODCAST Picks

Follow Us

Stay Connected

Related Podcasts

Links

Stay Connected