Approaching Retirement? Don’t Miss These 6 Critical Steps

TPIR Ep 110 Audio Extracted.wav: Audio automatically transcribed by Sonix

TPIR Ep 110 Audio Extracted.wav: this wav audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker 1:
Well, hello there and welcome to another edition of Take Pride in Retirement. Matt McClure here with you, your host, your advisor, your friend, your pal and your confidant. Yes, all the things. Thanks so much for being a part of things, as always. And I am Josh Rhett noble, the attache to the advisor, aka co-host. Yes. That's, uh, that's the best I feel like name of a sidekick for a show of any kind ever is The Attache. It just sounds like a fancy way of saying, oh yeah, he the co-host. He's going to assist him. Yeah, yeah. Which, I mean, that is basically what you do. I mean, I'm the advisor here and you are not, but I advise you to reel it in. Yeah. And to layman terms for the people at home. Well, when I go off on my tangents about things like dorky things that I go off in tangents about. Yeah. As endearing as it might be. Um, it is also not the goal of what I need to be doing. So, um, you know, I appreciate people who listen to the show, who watch the show on YouTube. If you're, they're watching us on YouTube. Hello in YouTube land. Appreciate you very, very much. Like this video, subscribe to the channel. That would really, really help. Um, I've noticed an uptick in subscribers here lately, so that's great. I've noticed an uptick in views, especially on, uh, the shorts that we post on YouTube. So that's amazing. Um, and then, you know, follow us on Instagram, follow us on, uh, blue sky on Facebook and all the places that you could possibly think to follow as chances are we're there. Um, and if we're not, just look for it somewhere else. Uh, but.

Speaker 2:
We need to have that song. Matt. We should do a harmony subscribe song.

Speaker 1:
Oh, yeah. We should. So. There it is. There's the subscribe.

Speaker 2:
To find the harmony to.

Speaker 1:
That. They'll become the subscribe. I will see. That's a good idea. I like that, But now take pride in retirement. Com is the website. We do have links to the socials there in the YouTube and all that stuff. You can also, if you go to take pride in retirement.com. Anything that we talk about on the show today, uh, sort of, you know, piques your interest, hits home with you, makes you want to ask more questions and dive in depth into what your situation is. I would encourage you to reach out to me, uh, take pride in retirement.com. The consultation is free of any cost, free of any obligation. I would be glad to do that for you. Also, um, if phone is more your style, uh, just do that as well that, you know, that's that super computer that you carry around in your pocket. Um, it's got a little phone icon on it. And so if you want to actually make a telephone call, you can do it 85524692178552469211. Is that number now today? Um you know, as you get closer to retirement, there is this really critical window of time that can sort of make or break things for you as far as your long term financial security and get ready for this because it's kind of a, it's kind of a sports reference. It's called the retirement red zone. And that is a, that's, you know, football for those of you who are not too sports y, um, there is a, you know, if you're getting close, the closer you get to the goal line, that's called the red zone, right? And so typically when we talk about the retirement red zone, it's 5 to 10 years before retirement and the first several years after you actually call it quits and leave the workforce and, you know, for LGBTQ plus, uh, not only individuals, but couples as well.

Speaker 1:
It's an even more important time, you know, maybe navigating the Social Security rules, planning without traditional family support systems and dealing with gaps in legal protections, depending on where you are, that makes getting it right matter even that much more. So what we're going to do today is go through. This is from Morningstar, actually had a great article that really kind of ran through a lot of these. And we're going to bring our own flavor to it as well. But six key steps that you should be taking right now if retirement is on the horizon. So let's run through these six steps, shall we? Yeah, I love that. Step one, build your human capital. Now listen, Matt, I love this idea that retirement isn't always just about stopping work, right? Because, I mean, we know so many people that are retired quotation marks and a lot of people, especially in our community, they're redefining what retirement even looks like.

Speaker 1:
So what do you mean by human capital? Well, there is it's funny because there's, there's one particular client that I thought of immediately when you said that. Who is someone who, um, is yes, retired, but is not stopping at all and has taken the time to sort of, you know, increase his, um, uh, skills and, and all of that. And so your human capital is really your ability to earn income. You know, it's your skills, it's your experience, it's your network. And for a lot of people, your highest earning years are right before retirement. It's your final opportunity to really build momentum going into your retirement years. And for people in our community, for LGBTQ plus folks, it can be really, really important because historically, a lot of us haven't had access to things like pensions or employer benefits in the same way as the population as a whole, right? So one of the things that you can do is to keep working if you can, and if you want to even part time, maybe learn new skills, pivot to something that's more flexible, continuing to earn that income in a, in a way that you enjoy, right? The goal is to work because you have to not to work because you want to. Rather not because you have to. You don't want to be forced back into the workforce because you don't have enough money to meet your monthly expenses, let alone go and do the traveling that you might want to do or travel to see friends or family or whatever, and do the things that you want to do at home and all of that stuff.

Speaker 1:
So you want to have that plan in place ahead of time. But you know, if you want to maybe consider an encore career, right? We're both performers as as well. And so, you know, a lot of times at the end of a performance, people will say encore, encore. And so you gotta have something to, to bring for your encore. And maybe you want an encore career, something that's meaningful to you that also brings in income. Maybe if it's, it's, you know, charity work or working for a nonprofit, that kind of thing. Um, maybe, you know, doing something at a local business that has meant a lot to you, that extra income can really reduce how much you need to pull from your portfolio, especially in those early years in retirement, right? And what I love is like retirement doesn't mean you stop living, right? Right. Yeah. So you're getting that extra income, but you're continuing doing things that you love and you enjoy. Yeah. So that sort of leads into step two. Have a Social Security game plan. So this one I hear you talk about all the time, right? Social security. So why is this such a big deal? Well, it's such a big deal because, you know, it's one of the only guaranteed income streams that people will have in their retirement years.

Speaker 1:
You know, for the vast majority of people, um, it makes up a good chunk of their retirement income for too many people, it is their only retirement income source. We don't want that to be the case for you if you were listening or watching. But the thing that really matters a lot here is timing. Um, and coordinating benefits, especially if you're married, coordinating those benefits, those claiming decisions can have hundreds of thousands of dollars worth of impact over the rest of your life. And so the longer you wait up to age 70, the bigger your benefit. But it all really comes down to what's best for you. And LGBTQ plus planning really gets important here as we're talking about this as well, because spousal and survivor benefits can be super, super valuable, but only if your marriage is recognized. It's properly documented, all that stuff. So if you're, if you're married, uh, you're, you're in good shape. If you are partnered but not married, then that's something that you can't take advantage of spousal benefits or survivor benefits. Um, for those who were married later on in life, maybe not at all, but maybe later in life you did get married. Strategies can look different. So, you know, maybe if you've been divorced as well, you may still be eligible to take benefits based on an ex-spouse's earnings record.

Speaker 1:
There's a lot that goes into making this decision. And so I am, you know, an Rcia, a registered social Security analyst. Um, I've taken the time to get educated about this, uh, about this, this particular subject. I offer seminars in this, uh, quite often. And I love talking to people about it and helping them determine what is their best claiming strategy for them. Uh, we've got software, it's called the RSA roadmap. And I can provide you with a really in-depth analysis that is going to show you different claiming decisions that you could make and what makes the most sense for you in your situation. I go to take pride in retirement, take pride in retirement.com get that free consultation. And as part of it, I can give you that RSA roadmap. Um, and also I want to say too, yeah, social Security is under pressure. You know, if the trust fund runs out in about, I don't know, less than ten years now, like they say it could without congressional action that benefits could be cut in the future. But they're going to have to shore it up. I feel like if anybody not shoring up Social Security is just political suicide. I feel like so I have a feeling that something like that will happen before it's too late, probably at the 11th hour.

Speaker 1:
But all things as they stand right now, this is not a throw it at the wall and see what sticks sort of a situation you want to strategy when it comes to your Social Security. So, you know, you know, I get passionate about this and I love talking about it with people. So it's important really, really is. And I mean, like what you've touched on because, you know, giving the examples of how every family is different, you know, you know, that's why I love that you focus on, especially within our community, because sometimes people are married, sometimes they're partnered, sometimes they're widowed. Um, it's just a whole gamut of different things. And that's why it's important to have an advisor like you that understands those different levels as well as how you can help each individual because each individual situation is going to be different. It's not to say one all one off, like, here's the info we're going to give you. You know, it's that's what's great to see. What you do is to actually help these people. Yeah, it really is all about you and your individual situation. There is only one you and in you and your your spouse or your partner, there is only one. Um, familial unit like that, uh, ever. And you don't have the same situation as other people. And so I want to help you, you know, find what's best for you.

Speaker 1:
Again, take pride in retirement. Com or you can go pick up that phone and call (855) 246-9211. Alright, so what's step number three? Maintain your safety net. Okay, so let's talk about safety nets because not everyone has family that they can rely on later in life. Right? Right, right. You sort of can think about retirement as you know, you're, you're an acrobat walking the tightrope, right? And below all of the acrobats who do that. What do they have? They have a net that in case something happens, they lose their balance and they fall. They can fall into that safety net. So it really is crucial to have a safety net for you. That may not be a physical one like the tightrope walker has, but that is a, um, a sort of virtual or, um, uh, a theoretical sort of safety net that's maybe not a literal one. Right? And, and this is a big reality for a lot of Lgbtq+ folks because as you said, you don't have family necessarily that you can rely on later in life. It means your financial safety net has to be stronger. I encourage people to have emergency savings of six months of expenses, um, at the, you know, if you can do that for a year, a year's worth of expenses, that's even better because Lord knows, you know, what could happen a few years ago, six years ago, we were in the middle of a Covid pandemic.

Speaker 1:
Everybody was sitting at home. Nobody was able to do anything. A lot of people lost their jobs. Who knows what's going to happen. And so if you've got that buffer that we talked about that in the last episode, kind of that cash buffer, right? An emergency fund. Then you've got, you know, some some buffer there, you've kind of taken care of and you take some stress off the table. Um, you also need a plan for long term care. And long term care can be super expensive, like super, super expensive. Even if you're just looking at, you know, a home health aide or something like that, that's not as expensive, obviously, as going to a nursing home where you've got full time healthcare and all the things. But no matter what, it's expensive. And so you want to maybe look at long term care insurance, perhaps you want to look at, um, if you are someone who wants to explore a personal pension, there are a lot of those types of investments that are annuities that also have provisions in them or writers that could be benefit writers, like a living benefit writer that says, if you are unable to perform however, many number of things that are the activities of daily living things like, you know, bathing yourself, feeding yourself, that sort of thing, then you would be eligible for, uh, you know, a doubling of your income perhaps, or a lump sum to help you pay for that.

Speaker 1:
There are a lot of different ways that you can get those benefits. Um, but you may need to, as an Lgbtq+ person, if you don't have that sort of built in support system, you may need to rely more on paid care than some others. And so, you know, planning ahead here, I've said it before and I'll say it again, is not optional. It really is essential in this situation. I love that not optional essential. That's something to remember. All right. Step four. And I think this is very important. Schedule a portfolio checkup now. So even if someone feels like they've done a decent job saving money, right. And some people, if not some people have, this is where they bring in a pro, right? And you know what, I know somebody. I happen to know a guy as well. Yeah. Um, who I wonder? But no, I mean, you're no, you're absolutely right because people have done, you know, some people have done better jobs than others. Um, there are some people who I meet with who, um, you know, they, they make a bunch of money a year and have a much smaller, um, you know, portfolio than somebody who maybe doesn't make quite as much as the other person does, but they've just done a better job staying disciplined over the years.

Speaker 1:
And both of those situations, you still deserve to have a retirement you can take pride in, right? And so this is where professional advice and analysis and all the things really comes in handy because you can sort of think of it like a physical, right? But, but it's for your finances. So that that one client that I mentioned earlier, by the way, who is retired, but not really retired because he's still doing stuff and going and you just try and stop him. Um, he actually said the very first time that we that we met and I did the analysis and the whole free consultation, everything for him. Um, he said it's like, I sort of feel like I'm at the doctor, you know, but it's, but it's different when somebody can take a look. It's not taking a look at you physically. They're taking a look at your finances. But it's true though, like a licensed advisor can, can take the pulse of everything. Get those vitals right, but evaluate those investments. Stress test your plan. Um, if you don't have a plan, come up with one. Um, identify the gaps or the risks. And if you're still a few years out, the good news is you've got time to come up with a plan and you've got time to come up with an effective plan.

Speaker 1:
You know, small changes right now can make a big difference later. You know, I always say the earliest that you can start planning the better. But at the same time, if you are closing in on your retirement years and you feel like you're maybe behind or you've got a lot of catching up to do. Don't stress over it. Just take action. Reach out. Take pride in retirement. The consultation is free. Take pride in retirement. You can also go and pick up your phone and call (855) 246-9211. Yes. Now step five sprint to the finish. I love this one because it sounds super intense and dramatic, but what does. Sprint to the finish? Finish. Sprint to the finish. Actually mean if I can say it correctly. That's almost sounded like you were going to finish your spinach. Yes. Sprint finish. Uh, but no sprint to the finish. Yeah, no, it's a it's a good question because it means maximizing the things that you can in your final working years. You know, I mentioned earlier, like in your, your final working years, you're probably making the most money that you have made in your entire career. And so you want to take as much of that as possible and put that towards your retirement, right? Um, a lot of people, let's say, you know, if this applies to you, you're the kids are out of the house. Um, income is at its peak in those final working years, like I said.

Speaker 1:
So increase that savings rate because you don't have the kids to pay for. You don't have, um, you know, maybe some other expenses if you're an empty nester kind of a deal. Um, but increase that savings rate, take that money that was going toward those things and aim for 20 or 30% savings if possible, and investing if possible, max out those retirement accounts. You can, if you're over 50, you have catch up contributions that you can take advantage of. And, uh, you know, I mean, especially for like a 401 K, you can contribute an extra like 7500 bucks a year to a 401 K if you are over the age of 50. And so yeah, the IRS even has, you know, allowances there for you to get caught up to where you might, should be. Later on in your life. And so that's your last big opportunity to really strengthen your retirement foundation. And so that's what I mean by sprint to the finish, do all the things that you can before you get to the finish line. Very great advice, Matt. If I do say so myself. Alright. Step six. Here we are. Protect against sequence of returns risk. Okay, so this sounds like one of those financial terms that scares people. So what is that? This is why you're here? Yes. What is this? To take the wonky sounding things and make them not sound wonky and wonky it for us? Yes, but you know what I mean.

Speaker 1:
It does. You're absolutely right. It does sound complicated. It really isn't, though. Um, it's just one of those things that it's a wonky type term, but sequence of returns risk Really, when it comes right down to it, is the danger of market losses early in retirement. If you listen to the last episode, I mentioned the kind of snowball effect where you're you're withdrawing money early on as the market drops and that can permanently, that can be a huge snowball that really does a big, uh, a large amount of damage to your retirement portfolio. And, you know, we often will to, to sort of combat this shift some assets into safer investments. The closer you get to retirement inside that retirement red zone, you know, first the few years before retirement, a few years after or into retirement, we shift into safer investments, income generating investments as well. And we create those income strategies that don't rely on the market because you don't want to leave your retirement income up to chance. You want to have some guarantees in life. And so that's what I love showing people as there are actually places where you can get guaranteed income, and it can be such a game changer for you. And, you know, especially for LGBTQ plus retirees, those without generational wealth and family backstops here, the protection of planning like this is super, super critical because you don't want to be caught early in your retirement years, be withdrawing money from the market, from your market based investments or retirement accounts while the market is in the middle of a big downturn.

Speaker 1:
Like I said, it can damage your entire retirement, can make hundreds of thousands of dollars worth of difference in your retirement. It easily because, I mean, just ask anybody who retired in 2008, right? I mean, it's, it's kind of crazy, the big impact that it can really, really have. Right? Well, these were great steps, Matt. Why thank you. Um, I do appreciate that. And of course, you know, I appreciate you being here and keeping me, keeping me between the lines, as it were. Um, but one thing that I will say before we go though, for this episode, if you are listening or watching, if you are approaching retirement, even if you're just thinking about it, it's still kind of conceptual for you before it gets too real. Um, now is the time to get serious about it. These, these next few years can really shape the rest of your financial life. And it may not seem like it right now, but the decisions that you make now can have a huge impact on your future. If you want help building a plan that reflects your values, your unique situation, your goals in life, and your identity.

Speaker 1:
Absolutely love to help you go to take pride in retirement.com. Take pride in retirement.com. Schedule that free consultation there. You can also call me 85524692178552469211. Well Mr. Noble, anything else to say before we go? No. I'm good. Very lovely steps today. Matt, I appreciate you spelling this out. Not just for me, but for the listeners at home. Well, good. I hope you got something out of it. Um, and, and do each time that you are able to actually sit down and ask me these questions because I, I enjoy, you know, kind of taking those questions and, and really explaining it. And I know that like, as with you not being an advisor, like if you are not in your head and understanding that gives me great feedback too, because I'm like, oh, good, maybe I am doing a good job explaining this to people. So I hope that that is the case. But thank you for helping me, uh, you know, be, uh, be a better host of this show. I appreciate it very much. Always. Thank you. Thank you. And thank you for listening or watching the show. Uh, and we appreciate that, of course, as always. And once again, go to take pride in retirement.com. Well, until next time, take pride in yourselves and take care of each other. We'll see you then.

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