Forget the “Magic Number”: How to Actually Prepare for Retirement

TPIR Ep 113 Full Show.mp3: Audio automatically transcribed by Sonix

TPIR Ep 113 Full Show.mp3: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker 1:
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.

Speaker 2:
Welcome to Take Pride in 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.

Speaker 1:
Hello there and welcome to another edition of Take Pride in Retirement. Matt McClure here with you, your host or advisor, your friend, your pal and your confidant. Thanks so much for being a part of things, as always.

Speaker 2:
And I am Josh Rhett Noble, the attache to the advisor, aka co-host, aka Matt's husband.

Speaker 1:
I mean, just wears a lot of hats. Um, yes, multitasking is is a thing. And, uh, he does it, but I really do. Thank you. Um, not only you, Josh Rhett noble, but you watching or listening to the show. If you're watching on YouTube, please do us a favor. Give it a big thumbs up and a like and subscribe to the channel. Really would help with the algorithm. Send the video around like spread the word about all the stuff that we're doing here. Um, and just trying to spread the word ourselves about, um, you know, retirement planning specifically for LGBTQ plus folks, but allies, anybody really, as we always say, it's no matter who you love, where you come from, how much money you have, how you identify, um, any of the things, uh, any, any like characterization that you can think of. It doesn't matter because we all deserve a retirement that we can take pride in. And the whole point of the show, right, is to, to help us get there. So that's what we do around these parts. You can also go to take pride in retirement.com. Take pride in retirement.com is the website for the show. Reach out there, schedule a free consultation. I'll talk about the consultation and all of that as we continue on with the show today. Um, if you prefer as well, you can give me a call 85524692118552469211.

Speaker 1:
Um, is that number? And now as we start off the show here, um today we're going to talk about it's the $1.46 million question. Um, how much do you need to retire? Is, is the question that we're going to be asking. And, you know, as we kind of always do in the setup here or not always, but most of the time I'm the advisor around these parts and Josh is here to ask questions so that I can clarify things because, you know, sometimes these financial concepts can kind of go over people's head, right? Yeah. And like I always say, Matt is the advisor that cares. And why I say that is because he knows what he's doing. He knows what he's doing within our community. And everyone's situation is different, right? So please do reach out. And as he said, please subscribe. And I did want to sing that if I could. Matt, um, you have my permission. You don't even have to ask for my permission. Really subscribe. We're still working out the tune, but every time you say subscribe, there has to be something. Subscribe if we want something, though, I know, but yes. Anyway, so we're talking about this magic number, right? Matt. So myth versus reality. So I keep seeing this. I keep hearing this magic number for retirement. And it's 1.46 million because that sounds overwhelming and crazy to me. So should people really be aiming for that number? And why does that feel like that number keeps going up every single year.

Speaker 1:
Well, it does keep going up every year, just about every year. I think last year it actually took a dip from two years ago. So in 2024 it was 1.46. And then it went down to like 1.2 something. And now it's back up to 1.46. That ties for the highest ever on record. And it used to be like, you know, people would say, oh, I need, you know, if I could get to $1 million, that would be amazing for my retirement. But this is kind of that number. According to Northwestern Mutual, the study there, as reported via CNBC. Um, the magic number. Yeah, 1.46 million. And that's up 15% from last year. Um, and here's the thing. Do you need to save that much money? Depends. Wouldn't it be great if we could all kind of, you know, get there or above that? That would be awesome. Um, but it depends because everybody's situation is different. That's what I always say. Like that might that that magic number is kind of like the average. So there are a lot of people who don't think that they'll need that much money in retirement. There are a lot of people, I guess, that being the case, who think they're going to need more than that in retirement.

Speaker 1:
And so it is rising. There is persistent inflation. Um, there's longer life expectancy, right? People are living longer. So it takes more money to live longer, especially when things like health care costs and stuff keep going up. There's uncertainty surrounding Social Security. So people want to have a safety net of their own. So they don't necessarily have to rely on that. If Social Security benefits have to get cut in the future because of budget concerns and that kind of thing. But remember, and this is something that that I'll say probably more than more than just this once retirement is not just about that one big number. It's more about like income and sustainability, like giving yourself an income that you're not going to outlive. And that number is really what's more important. And again, it's kind of different for everybody. Yeah. And so if it's not about the number, then what should people be focused on? Well, you got to focus on that income, right? You got to focus on the different income streams that you're going to have. And pretty much everybody, um, if you have paid into the Social Security system or you qualify because of a qualifying spouse or even ex spouse, that kind of thing, you can count on Social security. Now again, I mentioned a minute ago, are there concerns about like the budget for Social Security, the, um, the, the trust fund, you know, running out of money in less than ten years, it's projected.

Speaker 1:
Now, that doesn't mean that Social Security is going to go away, but that does mean that unless something happens, benefits are going to have to be cut. And so that not a good thing, but Social Security, it's it's you know, in my opinion, it's still going to be around because it would be political suicide for anybody to any political party or any politician to be responsible for anything else happening with it. Right? So you've got to have that monthly income stream taken into account. Another income stream is from your retirement accounts. So your 401, your IRAs, your 403 B's, your TSP. If you're a federal employee, those type of retirement accounts are tax advantaged accounts that you can count on. And these three things. Now, those are the first kind of two legs of the retirement stool. Here. The retirement is built on a three legged stool, right? So one is Social Security. That's one of the legs. Your retirement accounts are another leg. And then your either pensions or annuities. That's another leg of your retirement. You don't want to have two out of the three legs because I don't know about you. And the last time I sat on a two legged stool, it didn't hold up very long, so I kind of tipped over. So there's a.

Speaker 3:
Oh.

Speaker 1:
Sorry, everything leads to a tune in my head. Everything. Catherine O'Hara. I know God, what a funny, funny woman. And what a funny movie. Waiting for Guffman, everybody. If you haven't seen, go watch that. After you listen to every one of Matt's podcasts and contact him for a consultation. Yes, that's your assignment first. And then you're allowed. Then you're allowed to go. Waiting for Guffman. Watch. Waiting for Guffman. Catherine O'Hara. Yes. 100%. Um, but so that annuities, uh, concept there is like a personal pension because, you know, as I often say, you used to work for a particular company for, you know, 30, 40 years and then you would retire, you'd get a pension and a gold watch and they'd say, okay, great, here's your, your gold watch and your income for the rest of your life. Not many employers do that anymore. And so there's a personal pension concept there that we can talk about how to build your own and give yourself an income that you can't outlive. Um, and then, you know, for our community, for LGBTQ plus folks, there are historically less of those available, historically less by way of like pensions that are available. There are more career disruptions historically as well. As someone who was, you know, the someone who lost a job based on my sexuality years and years ago, I can attest to that. Um, and so that's even just amplifies the need to build your own income plan for retirement, not rely on these outside sources that may or may not exist anymore. And then there's also, you know, chosen family considerations to take into account income planning becomes even more critical because not everybody fits inside the same little, you know, box of, you know, a husband and a wife and two and a half kids and a dog and a cat in the white picket fence.

Speaker 1:
You know, so you've got to just take your own considerations into consideration when you are looking at your retirement and your income specifically in retirement. So if you've been stressing about that one big number, I want to say, let me take some of the stress off of that, uh, whole situation for you. Let's actually shift it to a plan that has to do with income. So reach out. Uh, 8552469211 is the number (855) 246-9211. You can also go to take pride in retirement.com. Take pride in retirement.com. That's the website. You can schedule a consultation. It's right there in the link up at the top of the page. It's absolutely free of any cost. There is no obligation either. Um, and I would love to work with you. So there you go. That's how you get get in touch. Yes. Call Matt. Please email Matt. Contact him. He will help you. And we all need help. Honestly, he asked what I always like to say to. He takes away the scary right? So as. Again, I've said that everyone has a different situation. And I've seen firsthand how you're able to bring these people to understanding the best path forward for their finances so they do feel secure and less stressed. Yeah. Less stress. But here's the thing. So talking about that 1.46 million, um, if people are aiming for that, how close are they actually getting to that number? Well good question.

Speaker 1:
And a lot of people, um, according to this same study, almost half actually of non retirees. So we're looking at 46%. Don't expect to be financially ready to reach that big number. Right. There are some benchmarks that one of the big um sort of companies that manages a lot of 401 S and IRAs and stuff called fidelity. They have sort of these benchmarks or these guidelines that people should kind of strive for. Just as a general rule, you know, not not like a carved in a stone tablet brought down from the mountaintop rule. But like something that's a general guideline for folks. Um, they say that you should have four times your salary in retirement, a retirement account of some sort or retirement accounts of some sort. Four times your salary by the time you're 45. And then by the time you are 60, you should have eight times your salary by the time you're 60. Now, here's a sort of a reality check for people who are in Gen X, so not the people who are currently retiring, but people who are not far away from it, really. The Gen X, the older Gen Xers are getting their, um, 54%. So more than half have four times their salary or less saved. So they're not close. And only 19% if hit that eight times benchmark that's been suggested. So no, I mean, people are not really, by and large getting there to that big number that people keep talking about.

Speaker 4:
Yeah. Well, that's that's a little scary. So what's causing people to fall behind like that?

Speaker 1:
Life, you know, life gets in the way it does. And that's just you don't have to feel bad about that or guilty about that. It's just it's a human thing. Trust me, I know. I've been there. It is. Um, it's just, it's a fact of life that life gets in the way. So, you know, delayed savings, perhaps like not focusing as early on in life on the savings as you probably should. Like if I knew everything in my 20s that I thought I knew. Uh, boy, I'd probably be like, I don't know, a good millionaire at this point. Um, but I am not. So there we go. Um, but, you know, delaying your savings beyond, uh, what you probably should maybe what's, uh, been recommended, that kind of thing. Um, inflation eating away at your progress because the price of anything and everything not getting cheaper. Right. Um, there is this lifestyle creep, you know. So we're we're sort of get to be in a point where we're not necessarily even living beyond our means, but maybe we are living beyond the means to save first. Right. And we'll kind of talk more about that in just a little bit, but we don't put as much of an emphasis on saving because we're doing other things. We're going, we're doing, we're buying all the stuff. Um, there are also for our community, LGBTQ plus folks have faced historical wage discrimination, wage gaps as a result of that, maybe job discrimination as well.

Speaker 1:
Um, a lack of generational wealth transfers in a lot of cases. Maybe you didn't have a family that was supportive. So, you know, you got written out of the will or something like that. God forbid. Um, and maybe also, you know, you've been caregiving for friends or partners, but without the legal protections that usually come along with that. And so maybe that takes more effort, certainly, and more, more money and more resources of of all kinds. But here's the thing though, is you're not alone in this. You are not the first person to have gone through what you're going through, or at least something similar. Thing is, you do need a plan. And so I would encourage you, you know, no matter where you are, if you're behind that, those sort of guidelines there, if you feel like I'm never going to get to that 1.46 million or whatever my number is, you know, um, if or if you're ahead or if you're somewhere in between, maybe you think you're right on track. Um, sure. But just get a second set of eyes on your plan. And I would be glad to put that second set of eyes on it for you. Absolutely free of charge. No obligation to continue on working with me, but you'll get some in-depth information about where you stand, where you could stand. If you do start working with me and we implement a plan that I would recommend.

Speaker 1:
The key is just taking that step. Reaching out. Go to take pride in retirement.com. Schedule that consultation. Once again, the website is. Take pride in retirement.com. Yes. Contact him. All right. Let's talk about the younger listeners like me. I'm only age 25, right? Matt? Yeah, something like that. Give or take. Give or take a couple of decades. Listen, let's talk to the younger people that may be listening, that have time on their side, right? Time is on their side. So what should they be doing right now to avoid becoming part of those statistics? So basically, like if you could talk to your younger self, Matt, what would you say? A lot of things. Um, but that's a subject for a different show. Um, but when it deals with finances, what would you do there? Okay, there we go. That's actually is a lot of the things that I would say, um, what I would say to anybody and we're talking really about people who are sort of mid 40s or younger, right? So we still do fall into that category technically. But yeah, if I'm talking to my younger self, I would say start early because the power of compounding interest is a real thing. It is huge. And you know, it was Einstein who called it the eighth wonder of the world. Um, you know, because you let's say if you put a certain amount into a retirement account and you start doing that early, yeah, that's going to earn a certain amount of interest.

Speaker 1:
But then let's say that next year, you know, you kind of count what what you've earned in interest as part of the principal now, and that larger amount is going to then earn interest on top of that. And it compounds. It's like a snowball effect in a very good way, in that way. Right. So like, um, there are some, some numbers here, some of the, the good numbers that we're seeing is that younger people are actually starting to get into saving, putting money away for retirement a little bit earlier. Gen Z are they're actually starting as young as age 22 putting money away. So good on you, Gen Z millennials a little bit behind started at 28 and then Gen Xers started at 32. So we can see a trend, right? That things are getting better as far as the generations starting to put money away earlier. And, you know, hopefully that's a good sign that that will continue. But, you know, here's the thing with this. If you are younger, put an emphasis on this is definitely one of those things that I would have told myself. Put an emphasis on saving first, paying yourself first. And Warren Buffett had a great quote that he says, you know, don't save what's left after spending. Spend what is left after saving. And that's a great way to think about it.

Speaker 1:
Like you're paying future you first. And then if you've got that sort of mindset going in and you can do things like automate, you know, automate your savings, so where it just comes out of your paycheck automatically goes into a savings account. You don't see it, you don't think about it, it's just done for you. That's one easy way to really do that. And then you've got to build a foundation here, right? So you get that savings happening and then make sure that you've got enough for things like an emergency fund, you know, at least like six months worth of your basic expenses, your living expenses, should the unthinkable happen and you like, lose a job or there's a big expense and you got to have a new roof on the house or something like that, pay down any high interest debt. I mean, credit card debt. Today you can be paying upwards of 30% or more in interest. Ridiculous. So don't carry debt on those high interest credit cards. Um, maybe you want to look at, uh, life insurance or maybe even disability type insurance kind of thing, but definitely life insurance that maybe has some living benefits. So if you do become disabled, you can take advantage of those. Um, and then keep that savings rate steady as your income rises or even increase it a little bit. As your income goes up, you get a little bit of a bump in pay, don't you know? Start saving a smaller percentage of your paycheck.

Speaker 1:
No no no. At least save the same percentage of that paycheck. So you're saving a higher amount or up that percentage at least just a little bit. Yeah. And what about our community, the LGBTQ plus community, the younger folks specifically, what should they be doing? Ah, kids today, um, you should be, uh, in a situation where you're doing all those things that I just said, but you also have some speed bumps along the way possibly as well, right? You're more likely to have, uh, some financial support from your family that might not be, as, you know, generous as some others, uh, or a lack of family financial support altogether. You could have higher housing costs that, uh, if you've moved to somewhere that's more inclusive because, you know, obviously like the rent or a mortgage in New York City is going to be a lot more than it is in, you know, I don't know, middle of flyover country somewhere. And so that is an important thing to keep in mind. And that makes that automation piece that I was talking about and discipline even more important. Okay. So set those things up, let them happen without you seeing, but also try not to dip into those funds unless you absolutely need them and make sure your beneficiary designations are correct. Um, you know, if you have like, you know, I go through once a year and I make sure that Josh is my beneficiary on all the things and who I don't, who I don't know, um, I make sure that you are my beneficiary on all of the things because I just want to make sure that nothing's happened, that, that has changed that.

Speaker 1:
And then also, you know, if you have a, if you're in a relationship where you, maybe you weren't previously in a relationship and maybe a parent or a sibling or something was your beneficiary, but now you want to change it to that partner, you need to make that update. And then, you know, as long as you have that in place, I think you'll be in a good spot. Oh, and legal planning really matters as well. Like just making sure that if you are partnered, not married, that you have those powers of attorney even if you are married these days, Lord, who knows? You got to have those powers of attorney, especially like, you know, the medical power of attorney kind of thing and see a legal expert for that. But, you know, if you're just if you're getting started in your career, you want to make sure you're doing things right. If you're just starting, if you've been in your career for a long time, but you're just started retirement planning, I'll help you map it out, right? So just give me a call, 85524692118552469211. Or you can also go to take pride in retirement.com.

Speaker 5:
And now let's talk about those people that are getting closer and closer to retirement. So if someone feels behind right now, is it too late?

Speaker 1:
Yeah, I always go back to I'm thinking about this guy who we met who's now a client, uh, at, uh, Atlanta Pride this past year who said, who came up to me at the, at our booth there. And he said, I'm never, oh, God, I'm never going to be able to retire. Never. And the reason that he started working with me as a client was later on, when I was able to do an in-depth review of all of his stuff and come up with a plan. I looked at him and I said, you, you actually can retire and probably sooner than you thought. And so seeing that look on his face of just relief is huge. Um, so no, it's you're not too late. I don't think ever, uh, adjustments may be needed though to, to make sure that you kind of get caught up. Um, there's a reality when it comes to spending. I mean, a lot of people think that they're going to spend less. I think it was in the survey, more than half of people think that they're going to spend less in retirement. But the reality is a lot of people spend more in retirement. You're going you're doing, you know, you have more time on your hands. So maybe you're traveling more. You're, you know.

Speaker 5:
Ships are not going to pay for themselves.

Speaker 1:
There they are.

Speaker 5:
That's the thing. Like once you have that time on your hands, you're going to want to get out and still live, right?

Speaker 1:
Yeah, absolutely. And then, you know, a lot of people too. If you feel like you're behind, maybe you can do some part time work, something that's fulfilling in your retirement years, maybe something that you want to do, but just do that part time and you can keep putting money away for later on in, in your retirement years there.

Speaker 5:
Yeah. Well, like we've talked about this in the past too, about people that plan to continue working right in retirement. And so that actually sounds pretty positive because you're working because you want to, instead of working because you have to.

Speaker 1:
Yeah. You don't want to be in that situation where you're working because you have to. Um, if you're working because you want to, that's awesome. That's great. You're still able to do that. That's wonderful. But if you are, um, you know, someone who is working because you absolutely could not make ends meet otherwise, that's not a situation that I want you to be in. So I want to help you get out of that potential situation. Um, there was an advisor actually who I spoke with not long ago at a client who in retirement was doing some part time acting, even just like, you know, a local theater show here or there or, you know, we live in the Atlanta area. So everybody's trying to be on TV or in films these days as, as Josh knows. Um, but it, they, that was a really fulfilling thing for them and it helped them put more money away for their retirement years. Um, and, you know, the benefits of working longer, you get to delay your social security and, and so that means your social security income is going to be higher.

Speaker 1:
When you do take that benefit, there's less strain on your investments, you've got more time for growth. So even if you think you don't have time on your side, maybe you do, right? You can, you can just maybe delay that retirement, uh, just a little bit so that you can put more money away. And for Lgbtq+ folks, I mean, flexibility really here is key because you might not have traditional spousal benefits that, uh, you know, at least historically. Maybe you do now, but maybe you haven't always. Um, the dual income sort of assumptions that people make about retirement and being two people, you know, still having their income or two people having Social Security income and all that stuff. Because, you know, you may not be partnered or married or whatever the situation might be. So those assumptions don't always apply. Health care, long term care planning, all of that is even more critical for folks in our community as well. So if any of that sounds like something that you need planning for, take pride in retirement.com is the place to go.

Speaker 5:
Excellent. So if someone's listening right now and they're feeling overwhelmed, what's the one thing they should take away?

Speaker 1:
Well, I would say you don't have to feel overwhelmed. You might feel overwhelmed right now, but you don't have to. Um, the, the big thing to remember is that retirement is not a fixed date. There are a million different choices that you could make as is to, okay, when am I going to retire? And if you get to a date that maybe you would set as a target years and years ago and you're not ready, then just delay that date, right? Or if you're ready sooner, sure, go ahead and do that. But the thing is, if you feel like you're behind, if you feel overwhelmed, don't feel that way. Just make some small adjustments. Now, it doesn't have to be some huge decision that that is just life altering and, and can, you know, I don't know, stop the flow of time as we know it or anything like that. It's nothing that earth shattering. Make some small adjustments as you do that along the way. Those can make a big difference. And, you know, just plan more intentionally and all of that kind of stuff can prevent bigger problems later on. So whether you're 25 or 55 or even older than that, the worst thing that you can do is just continue to delay. Because the sooner you start, the better. The best time to start is right now. So that's, that's kind of the big takeaway here. And what I want you to do is just focus on building a retirement income, right? And work with a professional who has done this for a lot of people, getting them a retirement income stream that they cannot outlive.

Speaker 1:
Boy, a guaranteed income for the rest of your life. That sounds like a plan, doesn't it? And if you want to get started on that plan, go to the website. Take pride in retirement.com. It's take pride in retirement.com. You can also give me a call, 85524692178552469211. Again, is that number the consultation? Absolutely free. Wonderful. Great advice today, Matt. Um, I think that this is something that could really help people, uh, hearing this from you. And again, the advisor that cares. So contact Matt, don't be overwhelmed, don't be stressed and just make a plan. And you're going to feel a lot better knowing that you have security in a path forward and knowing what's best for you. And like we always say, everyone's situation is different. So don't automatically assume that you cannot retire, that you can't do what you think you should be able to do. That's why Matt's there and he always has your best interest at heart, and that's what he's going to stick to. Yeah, absolutely. You deserve a retirement you can take pride in, and I want to get you there. So go once again, take pride in retirement.com. All right. Mr. Noble, thank you so much for being my attache, as always. Thank you, Mr. McClure. A pleasure, Mr. McFarland. Uh, I appreciate that. And if you get that reference, leave a leave a like and a comment.

Speaker 1:
Uh, we'd appreciate hearing about that as well. Uh, but 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 the fiduciary financial advisor who puts their needs first. To schedule a free, no obligation consultation with Matt McClure and the team at Active Wealth Management, call 211 or go online to take pride in retirement.com. Investment advisory services offered through Brookstone Capital Management, LLC. Bcm, a registered investment advisor, BCM and Active Wealth Management Incorporated 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. Matt McClure, an active wealth management are not affiliated with or endorsed by the Social Security Administration or any other government agency. 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 ADV two item four 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.

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