Where Do You Stand? Part 1

When it comes to retirement planning, people tend to have one of three distinct mindsets. This week, as the first episode in a three-part series, we’ll discuss the first of those mindsets. What can you do if you’re nearing retirement age and you just don’t know if you’ll have enough money, or you just don’t know where to begin?


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John Stillman: Hello and welcome to Wright Money Tips. I'm John Stillman, alongside Isaac Wright. This is part one of a series that we're calling, Where Do You Stand? We're talking about how people don't know exactly where they stand when it comes to retirement planning. We're gonna talk about three different mindsets over the course of these next three episodes, that people often have. By the way, I should mention of course, Isaac Wright, President of Financial Dynamics and Associates, the author of Navigate Your Way To A Secure Retirement. He's a chartered financial consultant. Hello by the way. I'll let you say hello.

Isaac Wright: That's fine. In fact, I was gonna add an all around swell guy.

John: See, now that is not something ... That's a title that other people have to confer on you.

Isaac: Now, I figure I'll just ...

John: It's not something you can just claim for yourself.

Isaac: I'm gonna go for it man.

John: All right. A little presumptuous, but okay.

Isaac: I try hard.

John: Yeah.

Isaac: I'll tell you what man. This topic, this segment of where do you stand in the mindsets, I'm excited for. I want you to go ahead and kind of layout the three things that we're gonna cover here over the next three episodes, and then of course we can jump into the first one.

John: Yep. Sneak preview. Today we're talking about the mindset of, "I have no idea if I can retire." The next episode will be, "I think I have enough money to retire," and then the week after that is, "I know I have enough money to retire." Let's start today, as we said with the people who are just being brutally honest and not trying to be pretentious about it and pretend like they know more than they do. They're just saying, "I don't know. I don't know if I can retire. I don't know when I can retire. I don't know how much income I can have when I retire. I don't know."

Isaac: John, I think when we talked about creating this series, it's more about the fact that when we had families and individuals that come into see us, we see these three mindsets. I think this will hit different people differently. There's even people that we see that have tons of money, maybe no money, but all in between, that still sometimes have a very hard time conceptualizing the idea of retiring or even transitioning into another phase of "retirement." It doesn't mean necessarily they're gonna sit on the couch and watch the soaps all day. I like this first topic, regardless of, let's call it investments and the amount of money you've accumulated. These are things just to kind of get you off the ground if you're starting to move towards the idea of even considering a lifestyle change or retirement.

John: What are the things we need to be thinking about, just to get us in the ballpark of even knowing, if we can retire or not. What are the questions you walk people through. All right, if you come up with answers to these, we'll at least have a better picture of where you stand.

Isaac: Absolutely. Today, and if you're thinking about retiring and not having any, let's call it meaningful advances towards that goal of, am I ready ... If you have no idea, what I will tell you are three things today. Number one is, what do you want your retirement lifestyle to look like? This is the biggest. Everybody's gonna wanna live differently. You need to figure out what that vision is.

Isaac: If you don't create that vision or that goal, or that result, let's call it, you will never be able to truly feel like you're making progress. You may be accumulating money, but you're not making progress towards what would it look like if you stopped working or if you transitioned to a part-time job, or if you started volunteering, or spending time with kids, or all of the above. Number one, is what do you want your retirement lifestyle to look like? Does that make sense John?

John: Yeah. Makes a lot of sense. How much have people actually thought about that? If you're in that mindset of, I don't know if I can retire or not, it seems like maybe you haven't even taken the time to daydream about retirement.

Isaac: Well, where people fall into a rut sometimes with this, is the simple fact that it does require a little, bit of thought. Sometimes as busy as we all are, it can be tough to put yourself in a mindset of kind of looking at this and revisiting it, or what have you. I think we just completely revamped our website to let people start realizing that this is the true result of what you want to accomplish during the latter half of your years. I don't wanna ramble on this, but I think people hopefully understand the number one thing that they have to consider is, what does that lifestyle look like. From there, we'll move onto the other couple things we've covered today. You have to have that vision first.

John: Another question that seems important Isaac, would be, well how much income will you need to sustain that lifestyle? You do the daydreaming, you figure out what you want life to look like. And then the question becomes, okay, what is that going to cost?

Isaac: Well, the fact is, when many people go in Google, retirement planning, financial planning, everybody likes to make themselves look really big and bad as far as being all technical, and just making it sound so overly complicated. There are certain aspects that you do have to understand the technicalities of what you're doing. You also gotta be able to communicate well enough, even with yourself, to understand some of these basic, very basic foundational things, that we do here at our office for people that have very high education standards in a lot of respect sometimes when they walk in the door. It's almost like we were expecting you to speak a whole lot more advanced or what have you.

Isaac: Listen, maybe this is just me. I can be as simple or as complicated as you want. Number two is, once you understand that lifestyle, once you understand that vision to be, number two is, how much income will you need to sustain that lifestyle? Now, you may not necessarily know that answer completely. This is where we actually help many families that have accumulated assets, that are trying to figure out how to build to put those assets in place for income. You have to know into what I would call this red zone of retirement, specifically over maybe a five year or less period, hitting into this lifestyle transition.

Isaac: What is it going to cost? What is it going to likely be within a great probability of monthly expenses? We can help you with that. A lot of people don't understand medicare. They don't understand certain things that come along with having what I call a "retirement budget," or that next lifestyle budget. How much income will you need to sustain that lifestyle? Again, number one is, what do you want? What do you want that lifestyle to be? Number two is, how much income will you need to sustain that lifestyle?

John: Very good. We know what the lifestyle is going to look like. We now know how much income is needed, or at least a basic idea of how much income is needed to [crosstalk 00:06:58] sustain that lifestyle.

Isaac: Yep.

John: And then we say, "All right, well what income streams do we have in place already?" If you're retiring after 36 years as a state employee, well you're gonna have a pretty big pension. That's not the case for most people.

Isaac: What kind of income streams will you have in place already? The biggest stream for most of us when it comes to availability of having a monthly check is social security. Start figuring out what that social security check is likely gonna look like. From there, you know we can get a little, bit more technical with you in terms of, if, when, and how to collect it. Just getting an understanding of what it would likely look like at a certain age that you would expect to retire. If you have a pension plan, same thing.

Isaac: Also, if you're married, do you want that pension to be just for yourself or for you and your spouse. Do you want to take survivorship option there? Do you have maybe rental income? Do you have property that you own, that's generating some monthly income from rent, that may not be as highly consistent as social security or pension check. Of course, if you have investments, you gotta figure out how to take distributions from those. You may decide that you still wanna do a little, bit of part-time work.

Isaac: Normally we try to not, what I would call, overly depend on any type of transitional income from a part-time job, depending on if you plan on really, truly going after something. You know, a lot of people retire, then become a consultant and make good money. That may be a little different. Just know, what is the income streams that you'll already have in place, in retirement, the probability of some of these income streams may vary, but the three things here, just to recap ... I wanted to make this really simple, for people today if you have no idea if you can retire, this is your starting point. What do you want your retirement lifestyle to look like? That's number one.

Isaac: Number two is, how much income will you likely need to sustain that lifestyle? And then, third is, what income streams do you have in place already. If you're not fully understanding specifically on two and three, we can help assist that. That's called our foundational income planning. That's one of the beginning stages of our process that we have here called, our complete planning review process that helps many families through this starting point itself.

Isaac: Listen, in the world of complication, I'm hoping I've been pretty straightforward and pretty simple, as far as starting points. That was the purpose of today's program, today's podcast. If you have any questions, feel free to give us a call here. 8-0-4-7-7-7-9-9-9-9. Again, our number is 7-7-7-9-9-9-9. Locally, right here in Richmond. Are code, 8-0-4. You can also text the word, tips, T-I-P-S.

Isaac: Every quarter, we're gonna have a report. This quarter is the recent tax law changes that took effect in 2018. Many people still have confusion, concerns over that. You can text the word, tips. You can pull that report down. We'll obviously be sending that to you as well. John, I think today in terms of just keeping it real, keeping it forward thinking and simple, hope it's been a good show.

John: Again, if you have questions about any of this, or if you'd like to get the special report, that number to call or text, 8-0-4-7-7-7-9-9-9-9. Thanks for tuning into Wright Money Tips. That's part one of where do you stand. The next two episodes will be on this same topic. Again, we talked about, I have no idea if I can retire. That was today. Next time, I think I have enough money to retire and then the third session will be, I know I have enough money to retire. Stay tuned for future episodes of Wright Money Tips. Have a great day.

Announcer: Information is for illustrative purposes only, and does not constitute tax, investment, or legal advice. Always consult with a qualified investment, legal, or tax professional before taking any action. Investment advisory services offered through Global Financial Private Capital, LLC.