Shift Your Retirement Goals


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Transcript

Zach:

You are listening to retirement today under co-host is Zach Holcomb. And alongside me, we have a Michael Reese, he’s a certified financial planning professional, and he spent the last 20 years helping families get into and through retirement. It, it, and that’s what today’s show is all about. It’s a about retirement, that retirement red zone that you were just bringing up to me. Mike, can you tell me what that is

Mike:

Again? Yeah. Again, that’s the 10 year period, Zach, between when you retire. So five years before retirement, five years after retirement, that is the period of time where little mistakes become magnified. Yes. It is the most critical stage of your, of your life, really when it comes to financial planning and you’ve gotta make sure that you’ve done everything right, and that you don’t miss anything in that portion of your

Zach:

Life. And you’ve been telling us some stories about the decisions that could just have drastic effect if you don’t make the right ones in this phase. Yeah. Just

Mike:

Family decisions. We talked a about my, my own parents who thought they were set up, right? Because they were a balanced 60, 40 portfolio. And they learned, oh, that’s fine if you’re growing money, but it stinks. If you’re taking money out and the market’s going down, by the way, the financial industry still recommends that same portfolio today, 20 years later, even though it didn’t work in, in the early two thousands and people in 2008, following the same advice got crushed again, but still the financial industry thinks that’s a good portfolio for taking money outta your portfolio in retirement. Let’s be honest. The industry in general, they don’t care about you. They only care about you paying them their fees so they can make money. That’s all they care about your right. So I talked about them and then the last segment I talked about my grandparents now my grandparents Wes, was a stock investor.

Mike:

He, and he built up dividend paying stocks, a portfolio of that over time, because he wanted to buy this cottage for a family enclave in retirement. And he succeeded in that goal, but he made one of those tiny little mistakes in this retirement red zone. We’re talking about. He made the mistake of missing that his goals had shifted. He had a goal of getting the family cottage. Once he got the cottage, his goal had shifted to keeping the family cottage. Now this is a really small but vitally important part when he retired and his goal shifted what my grandfather missed was retirement is a fundamental shift in your life. You no longer have money coming in from a job. You now typically are living off of your retirement savings. To some degree, you have

Zach:

To generate your own income.

Mike:

You’re not adding money to your portfolio anymore. You’re taking money out, right? Right. That is a fundamental shift. And you know, prior to retirement, when my grandfather got dividends, he just reinvested them. Now, what was he doing? Taking them out and spending them, right? This is a fundamental shift. And here’s the deal. Dividends were never designed to be retirement income. That’s they are, they are a return of investment. And the intention is you take those dividends and you reinvest it and, and ask Warren buffet. That’s what he says. Right? So the point is his goals shifted fundamentally mm-hmm <affirmative>, but his strategy, his investment strategies, and what he invested in did not change. And that’s the mistake he made and it broke him. It broke him. And it’s, I mean, just a, a horrible story. So here we are, my grandfather, the very happy guy, when he has to sell the cottage, it breaks him.

Mike:

He becomes just, he is a, a human being. And I never, I never saw him laugh nor smile after that. So now he’s gone leaving my grandmother with basically what, nothing, nothing. Ah, but here we go. My grandfather did something that was really small. You have some life insurance. He had a big life insurance policy because he always believed in life insurance. He left my grandmother a big life insurance policy. Now it wasn’t big enough to replace all of their retirement savings, but it was big enough that it replaced a big chunk of it. So my grandmother gets this huge tax free check huge in the day. Right. Mm-hmm <affirmative> it was probably, I don’t even remember. I don’t know the amount. It was probably a couple hundred thousand or something. But back then, this would’ve been in the seventies that would’ve been pretty significant number.

Mike:

Right, right. So we go from grandmother thinking she’s going to be just Destin who, and she’s obviously freaking out over that to holy cow, this check comes in and bam, she goes from destitute to back to being financially comfortable, like with the snap of your fingers. Right. And I promise you, my grandmother was not interested in buying dividend pain, blue chip company stock after seeing what you know, they just went through. Right. So anyway, she invests in a more balanced portfolio mutual funds at the time. She go goes out, get some help and, and there you go. She’s off and running. Right. So you think, ah, thank goodness. Everything is good. Life is grand. We are happy camp again. Right? Oh, but then what happens? Grandma starts to get a little older. She starts losing it mentally. In fact, they reached a point where you know how there are people that prey on the elderly mm-hmm <affirmative>.

Mike:

So my, this is how we found out that our grandmother was losing it. One day we went up to visit her and my dad was kind of going through, you know, helping her balance. She’s like, Hey, I need help bouncing the checkbook. So he starts going through checkbook and he’s like, mom, what’s this what’s this. Well, grandma had been sending in, you know, she’s been getting these letters of, Hey, you won money. Mm-Hmm <affirmative> you gotta send us a check so we can send you the money. And she bought into it hook, line, and sinker. She had been spending like close to over a thousand dollars a month. And again, this was now early eighties. Mm-Hmm <affirmative> like over a thousand dollars a month, which is a lot back then sending various checks to people. And she’s like, it’s okay, I’m getting this money coming back in mm-hmm <affirmative> it was all scams, all scams.

Mike:

And she couldn’t figure that she just couldn’t understand it. Right. And so we got her to a doctor turns out. Yeah, she’s got Alzheimer’s mm-hmm <affirmative> right. So that starts the time where, well, it’s time to start maybe getting someone to watch her, which costs money. Then we gotta get her into assisted living, which costs money. Then we gotta get her into a nursing home. Finally, that costs money. And my grandmother, her lived with over like 10 years with just this Alzheimer’s just getting worse and worse and worse. She lived over 10 years until by the time she passed away, she didn’t even recognize any of us. It was a blessing when she died, because I mean, that’s no quality of life. Right? And a lot of you listening, you might know someone who’s been in that kind of, you know, that type of situation.

Mike:

It’s sad to see. Sometimes I think doctors keep us alive longer than they should. Anyway, by the time, in fact, within, within, I’d say five, six years of this. So, you know, we’re getting through the cycle again, all the money’s gone again and now here she is. She dies based, broke penny list. Right now, think about what happened here with my grandparents. When they retired, they had the equivalent of today’s dollars. Now remember they retired way back, late sixties, you know? And they had an, the amount of money they had was easily equal over a million dollars. And today’s, and it’s not like they were huge spenders mm-hmm <affirmative> they grandfather made a mistake in not realizing that retirement is a fundamental shift of life. Didn’t change his investing as a result. He lost all of it. Thankfully, when he died, he leaves a bunch of life insurance to grandmother, not worth a million dollars today, but probably 800,000 or something.

Mike:

Right. Mm-hmm <affirmative>. But because she ignored the risk of long term care of healthcare, she ended up dying, broken penny list. And do you think that’s how they wanted to die? I mean, holy cow retire with a million, lose it, all get most of it back, lose it all. Not what you want in retirement. Nope. That’s not a financially secure retirement. And the question that you really have to ask yourself is you’re listening. What about you? You know, if you’re middle class, upper middle class, you have between 250,000 to, you know, three, four, 5 million saved in retirement. If you’re in that range, you know, if you make mistakes, you could end up just like my grandparents. You don’t want that. You know, think about it. You’ve worked your whole life and you’ve saved and saved don’t you deserve to really have a, a great retirement don’t you deserve enjoy the fruits of your labors. I mean, I think you do. I think in retirement, you should be focused on enjoying life and not having to worry about your money, right? Yep. But if you’re gonna do that, you gotta be making the right choices. And most advisors you talk to, they’re not retirement advisors. All they do is they help you invest your money. Okay. An investment plan is not a retirement plan. That’s your favorite phrase, right? Zach? It is.

Zach:

But you said, you say it’s my favorite phrase, I guess it is.

Mike:

I I’ll tell you what I know every time I say it that, you know, you just have this, I look at you, I say it and you just get this just light up. It’s like, oh, it’s like, you know, karma or something or not karma, but it’s a wonderful experience for

Zach:

You. Yes, sure. We’ll go with that.

Mike:

<Laugh> my whole point is this, the bottom line is why not get someone to double check your work? Why not get a second opinion from someone that lives this day in and day out it’s free. There’s no obligation. It’s a no brain. And all you have to do. We’ve made 10 spots available. I think half of ’em are already gone. In fact, I think we’re down to about four left. All you gotta do is give us a call, give us a call. And Zach’s gonna give you the number and all you do. You’re gonna talk to the people after hours, right? Talk to our answering service. They’ll help you get set up with that. So Zach, what do our listeners need to do to get this free? Super easy, double check, second opinion. Review on their retirement planning. Oh, Mike, it

Zach:

Really is that easy. All they have to do is give us a call at (512) 886-5850. Again, it’s 5 1, 2 8, 8, 6 58 50. And like Mike said, it’s after hours, get our answering service that is gonna ask you for your name, your number and a good time for us to give you a call back. It really is that easy.

Mike:

All right, don’t go anywhere coming up. I’m gonna share with you some base hypocrisy of the financial industry and why you deserve so much better. We’ll be right back.

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