[00:00:00] Speaker A: You may have spent like 30 or 40 years saving, investing for retirement, but then what happens when the time comes and it's time to actually spend it?
Because having a retirement account and having a retirement income plan is not necessarily the same thing.
And today we're talking with actually a best selling author and personal finance expert, Gene Chatky, about how to turn a lifetime savings into what she calls a forever paycheck.
[00:00:26] Speaker B: Foreign.
[00:00:33] Speaker A: Retirement, the podcast dedicated to helping members of the LGBTQ community protect and grow their hard earned money. Get set for a show full of education and insights with your host and advisor, Matt McClure. We recognize every family is unique. The goal of the show is to help you achieve financial freedom so you and your loved ones can have the retirement you've always dreamed of. A retirement you can take pride in, no matter who you are, where you're from, or who you love.
So now let's start the show. Here's Matt McClure.
Hello there and welcome once again to another edition of Take Pride in retirement. Matt McClure here with you, your host, your advisor, your friend, your pal, and yes, your confidant. And I am Josh Retinable, the attache to the advisor, AKA co host, AKA Matt's husbie.
It's always changed from hubby to Husby now.
[00:01:25] Speaker B: It's just fun.
[00:01:26] Speaker A: It is fun and it's always fun. And Josh is back with me this week and yes, that is him. It is not some child who's in a Joshed suit.
You actually had a gig for which you had to shave.
That is true. I had a week long gig on a wonderful television show, which I can't talk about yet. But yes, I had to shave. So this is what viewers on YouTube get to see right now, which is baby Face Josh. But the beard will be back very quickly. Yes, it doesn't take long to grow in and apparently. Listen, what I heard a little birdie told me we're talking about spending some money today. So I came back exactly at the right time. What we buying, Matt? What we buying?
Well, if you're selling, I'm buying.
But yeah. Now this is actually a serious challenge, I think for a lot of different retirees here. We spend our lives saving and saving and saving and investing and doing all those things.
And we need to accumulate as much as we can. But what happens when you retire? You need to turn that corner and actually start spending money that you've worked so hard to save over the years. It can be a difficult thing to. To reverse course and start living on that Money.
[00:02:34] Speaker B: Yeah.
[00:02:34] Speaker A: And I mean, I can understand why that would feel uncomfortable because, I mean, if, if you've spent decades watching an account balance go up, seeing it begin to go down, then even when that was the entire purpose of saving that money, I'm sure that could be very stressful. Yeah, definitely. So, you know, that's why having a retirement plan is so super important. It involves much more than simply knowing how much money you've saved. You know, people used to always, there was ad campaign about what's your number? Right? And it was like, how much money have you saved up or invested essentially? And that number, having that number is great. But you got to have a strategy for turning that savings and those investments into dependable income with about, you know, just breaking the entire thing and running out of money without having to worry about, you know, your tax burden in the future. You got to take into account Social Security, health care, inflation, possibility of a very long retirement because, yeah, people are living longer these days. And if you're in that like five minute window, a five minute, five year window, if you're five minutes from retirement, boy, call me. But if you're within that five year window either side of your retirement date, that's what we call the retirement red zone. So like five years before, five years after, and you're not sure how all the pieces fit together, reach out. Talk to me. Take pride in retirement.com. initial consultation is absolutely complimentary. And once again, it's take pride in retirement.com. if you are watching this on YouTube, you'll see that, that scroll across, also the phone number scrolling across constantly. 855-246-9211.
And speaking of the old YouTube machine, Mr. Noble, what should people do? They should like and do what?
They should subscribe.
They got a little riff in there and everything. So yes, like, like this video. Subscribe to the channel. It really does help out. Share the video with as many people as you possibly can.
Really, really would appreciate it.
The guest that we have as part of the conversation today has been helping people make smarter financial decisions. Not just for, you know, a little while, for decades now. Jean Chatsky is a bestselling author. She's also a personal finance columnist with AARP and the author of a new book called the Forever Paycheck. I recently had the opportunity to sit down and ask Gene about one of retirement planning's most difficult transitions, right? Moving from accumulation that's accruing all that money, saving it up, doing all those things, turning that into income. Right? That's a, that's a big, big thing. And it can be just a really tough mental decision to be able to make a mental transition to make even more so than just the money itself. So we talked about why retirees, you know, sometimes hesitate to actually spend the money that they've saved up and you know, what a retirement paycheck could look like and you know, how somebody might either, you know, build or buy that income. So let's have a listen. Well, planning for retirement has changed drastically over the years, but it also changes during your own lifetime. You know, you've got to make that change, turn that corner from accumulation to distribution at some point. And along those lines, I am very glad to welcome on Jean Chatsky, who is with aarp.
She is a best selling author and author of a new book that is called the Forever Paycheck, which sounds like something that's right up our alley here. Gene, thank you so much for being here. I appreciate it.
[00:06:03] Speaker B: I'm thrilled. Thanks so much for having me.
[00:06:05] Speaker A: Well, no problem at all. I'm thrilled to have you because, you know, it's, it is something that's of the utmost importance to our audience here. And you know, for people who have spent these decades saving and investing and doing all the things that during your working years you're supposed to do, how do you turn that corner and say, you know, a lot of it's mental, of course, but how do you turn that corner and say, okay, now I have, have got to, you know, generate my own paycheck rather than somebody else paying me every couple of weeks.
[00:06:35] Speaker B: Yeah. What we're learning from, from the research is that it's really hard. It's, it's a hard math problem because by the time you get to the end of the road, you probably have money in a maze of accounts, taxable, tax free, tax deferred. You're trying to avoid Medicare penalties, you're trying to avoid bumping yourself into a higher tax bracket. But it's also hard because after saving for 20, 30, 40 years, spending down and seeing the balance in your retirement account go in the other direction is deeply uncomfortable. And what we're finding is that retirees are not spending. In fact, they're hoarding their balances to a large degree, which is such a shame because this is what we saved and invested all of the money for. And so I wrote this book to give people a solution to help them set up a paycheck. They can buy it, they can build it, we can talk about that. But once a paycheck is in place, the research shows it's easier to spend.
[00:07:44] Speaker A: Yeah. And that's, I feel like, so key. And do you think that maybe that's one of the biggest mistakes that you have seen People, and maybe the research bears this out as well, that people make in their retirement planning is they have that plan to accumulate. They may think, oh, I've got that 401k at work. I've got maybe an IRA or something like that. I've got a plan. Well, you know, you've got an account or two, but you don't necessarily have a plan for your actual retirement years.
Is that really kind of one of the bigger mistakes that you see people make is just not planning for that distribution phase?
[00:08:19] Speaker B: Absolutely, yeah.
Thinking that you're done when you have accumulated is the mistake. You're not done. You need a plan for income. You need a plan for getting the money out. You need a plan for leaving a legacy. If leaving a legacy is something that you want to do, but your plan should take you from accumulation through distribution or decumulation, whatever you'd like to call it. And having a paycheck to cover those things that you not only need, but really want enough, not to want to compromise on them is important. It should be enough so that you can combine Social Security with these paychecks. And know this stuff is paid for. No matter how long I live, if I live into my 90s, if I look past 100, I don't have to worry about these things. Things, then you can take the rest of your money and you can invest it even more aggressively because you know that these things are covered.
[00:09:24] Speaker A: Yeah, it's. That's an amazing thing and I think gives people a lot of peace of mind, you know. The book is called the Forever Paycheck.
One of the things that I think about when I think of, you know, like forever paycheck would be something like a pension, which has largely gone the way of the dinosaur for most workers out there. If you have a pension, you are very, very lucky these days.
How do you go about in the book explaining how to create a forever paycheck for yourself so that you don't have to worry about, as you just said, running out of money before you run out.
[00:10:01] Speaker B: Generally, I suggest taking a quarter to a third of the money in your retirement account and using it to build or buy a paycheck? If you're building one, you're building it with investments. You're building it with a ladder of tips or a ladder of treasuries or CDs, or some dividend paying stocks for a combination of those things. If you're buying one, you're buying an annuity or several annuities. And which one is right for you? I'm agnostic. But which one is right for you depends on your risk tolerance and the degree of FOMO you've got. So if you are risk intolerant, you're going to want the kind of guarantees that you can only get from an insurance product or an annuity. If you've got more fomo, if you have fear of missing out, particularly of upside in the market, then you're going to want to build with investments.
Either one works, but the point is that you need a plan to get it in place. And then again, this is only a quarter to a third of your money. You take the rest of your money and you invest that to keep up with inflation.
[00:11:15] Speaker A: Very good. And quickly here just as we wrap up. This was written, of course, the book Forever Paycheck was written in collaboration with aarp. Where can folks who are listening or watching go to find out more about not only the book, but maybe some resources that are available through AARP as well?
[00:11:33] Speaker B: Sure. There's some great calculators, retirement calculators, Social Security
[email protected] org market very good.
[00:11:42] Speaker A: Gene Chatsky is bestselling author and AARP personal finance columnist, author of the new book Forever Paycheck. Jean, thank you so much for joining me. Really do appreciate your time.
[00:11:52] Speaker B: Thanks for having me.
[00:11:53] Speaker A: It was great to talk to Jean there and get her insights. And one of the comments that really stood out to me was, you know, when she talked about, you know, accumulating money not being a plan. Right. And not. Doesn't mean that your plan is finished. It's. Maybe it's part of a plan. You might have 401k or an IRA or you know, other accounts.
But those are accounts, right. Those are pools of money. That doesn't automatically mean that you know how much you can spend safely each month and from which account it should come and all of that stuff. It's just not the complete picture. Yeah. And I think that's an important distinction because when you're working, your employer obviously handles the paycheck, but in retirement, you essentially, you're becoming responsible for creating your own paycheck yourself because you're kind of like the boss. Yeah, that's the thing. Like a lot of people say, I retire, I'm going to be my own boss or whatever. Yeah, you do. You've got to also write yourself that paycheck as well. Don't be in a situation where you have to live on Social Security alone, certainly, and know how to, you know, accumulate. Well, not accumulate, but I guess, sort of distribute all of that money and where it should come from and when. And you've got to decide which accounts to use and. And as I say, in what order, how it all could affect taxes and all of those things.
And that's where an actual sort of distribution or decumulation plan and strategy becomes really, really so important.
[00:13:17] Speaker B: Yeah.
[00:13:18] Speaker A: And I mean, the other thing I found interesting was just the idea that some retirees may actually be underspending, Right. Because they're afraid of watching their balances decline. Yeah. I've seen this actually with a couple of retirees who are clients of mine. And, you know, we focus so much over the years on the risk of spending and spending too much. Right. Especially when we're in. We're in saving mode, we're in accumulation mode. But it can also be like, you know, are you. Are you a. I've heard some other advisors call them pathological savers, right? Where you just. You can't stop saving. It's just like habit and you're afraid to spend.
But, you know, people may, you know, unnecessarily do things like postpone travel, you know, this bucket list trip that you've always wanted to go on. It's like, go on the trip, right?
Do some, you know, take some time for some experiences, other things that would make retirement more meaningful because a withdrawal to them feels like a loss.
[00:14:17] Speaker B: Yeah.
[00:14:18] Speaker A: I mean, especially when being a dis. I'm going to say it's more like a penny pincher. Is that derogatory to say, now that you're pinching pennies, does the penny even exist anymore anyway? Like, if you've been someone who's like, consistently saved their money, you know, if that's part of your identity for most of your adult life, that's going to be odd. You know, it's a weird transition to make. Right. And that's where, you know, a dependable income strategy can really provide more than just financial stability. It can also provide emotional stability and just that peace of mind. Right. And give you permission to actually enjoy your money.
You know, when you know that the essentials are all taken care of each and every month, then it just becomes so much easier to actually spend and to do it intentionally. Here. And when I was talking to Jean, she actually described two kind of big approaches. Building income with investments or purchasing guaranteed income through an Insurance product, like an annuity. And those are things that we talk about here quite a bit on the show. And the appropriate solution depends on the person. Right? I mean, that's, that's the key.
Yeah, I mean, that's what I always say that Matt does too, because sometimes things are right for one person, they're not right for the other. And like, so this isn't about everybody putting the same percentage into the same product. Because if you meet with Matt, he's gonna be like, oh, this will work for you, but this would not work for you, you know. Yeah, it's my fiduciary responsibility. Right. It means that I have to take your best interest into account at all times when I work with you in a one on one type situation. And so, yeah, it's not about everybody doing the same.
Same thing at the same time and everybody having the same outcome. Right. I mean, she actually mentioned there using roughly a quarter to a third of retirement assets as a general framework, but that's not a universal thing. The right amount, that right strategy depends on so many things. Your monthly expenses, your Social Security, your pensions, your risk tolerance, health, your longevity, all of those other things, maybe some other resources that are available to you, the other assets that you might have.
So the bigger picture here, the bigger lesson for me is you don't necessarily have to choose between dependable income and future growth. Like a properly designed plan, something that is meant to stand the test of time and built to stand the test of time, may use part of your assets to create income and create that income floor. Right. Giving you those basics already paid for each and every month, and then leave the remainder to cover for inflation to give you some flexibility and give you, like we were saying a minute ago, the permission to spend your money on things short term and long term here. And so if this conversation today has made you wonder whether you have a collection of retirement accounts or whether you have an actual plan, I would be happy to take a closer look and tell you. And if you feel like you're not where you need to be, I would to love, love to take a look at your individual situation and say, actually, you're on the right track, or here's some changes we can make and adjustments that we can make along the way. The initial consultation, as we always say, absolutely free of any cost. There is no obligation there. We can meet by Zoom. We can meet and go a couple of office locations in metro Atlanta if you happen to be in the metro Atlanta area. Otherwise, let's meet via Zoom. We can do that. And you can get started by visiting the website. It's takepride in retirement.com. that's takepride in retirement.Com.
yes. Reach out to him, y'.
[00:17:55] Speaker B: All.
[00:17:55] Speaker A: He's a good.
An oldie, but a good. He's a good. He's a goodie. And I will say, if you want to learn more about Gene's book, the Forever Paycheck, along with additional retirement and Social Security resources, just check out aarp.org money. So that's aarp.org money and Josh, if that is your real name, because, you know, I don't recognize about half the face. I don't know who this is. Like, I'm staring at myself in the little box. Like, what is my face? What has happened?
Well, it's good to have you back. It's good to have you back regardless of whether you look 12 or whether you look your age.
Well, thank you, Mr. McClure. And it's good to be back, especially for an episode that gave me permission to spend money.
Pretty sure that wasn't the actual lesson, but, you know, I guess I'm pretty sure that's what heard is that I can spend money. Okay, well, then when you take it, take that lesson then.
Dinner tonight on you. Thanks. Thanks. I'm like, whose money you spend in here?
Thank you so much for. For being here. Pleasure doing business with you.
You too, Mr. McCro. Thank you. I was waiting for the hat tip there. And thank you so much for watching and or listening to the show. Really do appreciate it each and every time. Spread the word, like and subscribe. Really do appreciate it when you do that. And no matter who you are, where you love, no matter who you are, where you come from, who you love, how you identify, or how much money you have, you deserve a retirement that you can take pride in. All right? So until next time, take pride in yourselves and take care of each other. We'll see you then. Thanks for listening. To Take Pride in Retirement, members of the LGBTQ community deserve to work with a fiduciary financial advisor who puts their needs first. To schedule a free, no obligation consultation with Matt McClure and the team at ActiveWealth Management. Call 855-246-9211 or go online to takeprideinretirement.com investment advisory services offered through Brookstone Capital Management, LLC, BCM. A registered investment advisor, BCM and Active Wealth Management, Inc. Are independent of each other. Insurance products and services are not offered through BCM but are offered and sold through individually licensed and appointed agents. Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation, or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy. Registered Investment Advisors and Investment Advisor Representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interest of our clients and to make full disclosures of any conflicts of interest. Please refer to our firm brochure the ADV2A, item 4 for additional information. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products. They do not in any way refer to investment advisory products. Rates and guarantees provided by insurance products and annuities are subject to the financial strength of the issuing insurance company, not guaranteed by any bank or the FDIC.
