Dr. Lamar interviews Jason Parker regarding the Sound Retirement Planning Book Launch
Announcer: Welcome back, America, to Sound Retirement Radio, where we bring you concepts, ideas, and strategies designed to help you achieve clarity, confidence, and freedom as you prepare for and transition through retirement. And now, here’s your host, Jason Parker.
Dr. Lamar: Seattle, Tacoma, Olympia, Gig Harbor, all the good people right here in Kitsap County, welcome back to another round of Sound Retirement Radio. Of course, we want to recognize those of you who are tuning in to the radio broadcast this Saturday morning at 8 AM in the Puget Sound area on 1300 AM KKOL. We also want to tip our hats to those of you picking up the show all around the world on the RSS waves via the podcast. As I understand it, the podcast making quite the splash on iTunes, as it continues to hold the number three spot for the keyword search for “retirement.” Thank you for that, and we appreciate your download on iTunes and your ratings and reviews. More information, of course, is available on soundretirementradio.com, so thank you for that.
Welcome, everybody. If this is your first time tuning in to Sound Retirement Radio, you’ve picked a great episode to get you started, and if you’re a regular listener of this program, you’re in for a real treat, because you’ve also picked a great episode to listen to. By now, you’re probably thinking, “This guy is not Jason Parker.” You’re right, I’m not. Never fear, though, because right here in the studio by my side is the host of this program, Jason Parker, and we’re going to get to him in just a moment.
Here’s the deal. Jason’s been doing this radio show for five years now. I can vouch for this, having personally been involved in multiple internet radio podcasts for about the same period of time, interviewing hundreds and hundreds of people. Sooner or later, for your sake as a host, for your audience’s sake, the tables need to be turned and you need to get into the hot seat and be the one being interviewed. That allows people to get to know you more and what you’re about. Who is this guy that we listen to each week? Today, we’re going to get to know Jason a little bit more.
This is a great opportunity to do this, because Jason has just released his book, Sound Retirement Planning, and we’re going to talk about it. Of course, many of you know Jason as the host of this program, Sound Retirement Radio, and you now know that he’s an author of a book on that very subject. He also writes regular articles for the Kitsap Peninsula Business Journal, he’s the founder of Parker Financial, LLC, located right here in Silverdale, Washington, and he’s well-respected in the community as a financial advisor, investment advisor representative, insurance professional, and business leader. But I can tell you, all that aside, Jason is a family man, he’s a man of faith, a man of integrity, and a man who truly cares about those he serves, whether he’s in person with him, or right here through the radio. I’m honored to call him a friend. Jason Parker, welcome to your show!
Jason Parker: Dr. [Lamar 00:02:52], what an introduction. I have to say, I think maybe I made a mistake by asking you to be the guy doing this. You’re making me sound bad. It’s like I’ve got a professional radio guy here.
Dr. Lamar: Hey now. This is going to be a lot of fun. Thank you so much.
Jason Parker: No, thank you. I really appreciate the introduction, and I’m looking forward to this, having the tables turned on me, getting the opportunity to talk to our-
Dr. Lamar: It’s happened to me several times. It’s a really nice, refreshing way to do this, because you’re the one that asked all those questions, and now you get a chance to say your piece.
Jason Parker: Awesome, awesome. I’m looking forward to it. Thank you so much.
Dr. Lamar: Jason, I’ve been listening to some of your programs, and I know that it’s a custom of yours to start out with a joke.
Jason Parker: Oh yes, our audience loves our morning jokes.
Dr. Lamar: To be honest with you, I almost bagged the idea.
Jason Parker: You’ve been listening to the jokes, obviously.
Dr. Lamar: Yeah! But the internet can be a beautiful thing sometimes, and so I said, “You know, why not?” I started digging around a little bit, and since we’re going to talk about your book, why not bring in a couple of jokes that are about books?
Jason Parker: Okay, all right.
Dr. Lamar: Kind of play with me here. Jason, I don’t know if you know this, but I just published a book myself.
Jason Parker: Oh, you did?
Dr. Lamar: Yeah, it’s a do-it-yourself book. It’s blank and comes with a free pen!
Jason Parker: It’s blank and it comes with a free pen?
Dr. Lamar: Can I get a rimshot, please!
Jason Parker: A do-it-yourself.
Dr. Lamar: Did you like that?
Jason Parker: That’s pretty good. That’s like a million-dollar idea, there.
Dr. Lamar: Yeah. I thought I’d bring the rimshot in for you.
Jason Parker: Yeah, I like that, thanks.
Dr. Lamar: I’ll leave it here if you’d like.
Jason Parker: That’s good, that’s good.
Dr. Lamar: I’ve got one more. You know, I’ve also recently written a mystery book. Or have I?
I like sound effects.
Jason Parker: Yeah, that’s great. That’s awesome.
Dr. Lamar: Let’s get into this. I am very excited to be here to help you spread the word about your new book, Sound Retirement Planning. This is a book, ladies and gentlemen, that’s all about how to outpace inflation, provide income for life, and reduce stock market volatility.
But before, Jason, we get into talking about the questions that you might expect me to ask you about this book, I want to, gingerly, from a legal perspective, I want to gingerly address a subject that, for some of your listeners, is really an elephant in the room, because they’ve been with you for a long time, and they know, Jason, that you’ve already written a book that is very similar to Sound Retirement Planning. While I’m prohibited from uttering the title, let’s just say that the first word starts with ‘th’ and rhymes with “driving.”
Jason Parker: That’s subtle!
Dr. Lamar: Tell us the backstory on what happened with “Driving” In Retirement.
Jason Parker: Several months ago, probably about six to eight months ago, I received … it was Friday afternoon, I received a letter from an attorney’s office letting me know, it was a cease and desist, basically, letting me know that somebody else owned the federal trademark for the title of my last book. Tom, I don’t know if anything like this has ever happened to you, but that was a real shocker for me, it was a real blow. It was kind of like getting punched in the stomach when I got the notice that we were going to have to stop using the title of the book, and we couldn’t use it in any of our material, whether it was my newsletter that we send out, my email newsletter, or using that phrase on the radio show. It kind of hit me back, took me back. Initially, when that happened, I just wanted to throw in the towel. I was like, “You know, I’m just going to take the book down, I’m not going to have it out there anymore, and just be done with it.”
That’s the short version of that experience with the initial book. What brought us to this point was this opportunity that came up. After having some time to digest that a little bit and say, “You know, this isn’t the end of the world, we can do some work and make the book better,” I decided that we’d give it a new name. We added about 30 to 40% new content, and the new book now, as it’s getting ready to be released, I think it’s really a lot better than the first book. Ultimately, I think it was really a blessing in disguise. I think the book probably needed to be updated, it had been two years since it had been out, and that just forced it. I’m really, actually … as somebody once said, you take lemons and turn it into lemonade, and I think that’s really what’s ultimately going to end up happening here. I think this is a good thing.
Dr. Lamar: You say you wanted to throw in the towel. I can only imagine what that must have felt like, like you said, getting socked in the stomach. What pushed you forward, Jason? Why did you say, “Let’s move forward with this?”
Jason Parker: I got that letter Friday afternoon, and I could not think straight for at least two days. I couldn’t hear when people … when I got home that weekend, my family was talking to me, I couldn’t hear what they were saying. My brain was totally preoccupied. I was in this place where we had put so much time and energy and effort into branding a specific phrase. I was upset with myself, I was embarrassed that I had made a mistake.
I was also, at the same time, I was being asked to speak at my kid’s school, and I was reading through the story of David and Goliath. One of the things that stood out to me in that story of David and Goliath is, before David had to fight Goliath, there was a moment when he was … he’s the youngest of eight kids, and he’s out in this field. He’s got the crummiest job of all his brothers. His brothers have all the glory and they’re out there on the battlefields on the front lines, and here’s little David, and he’s out tending to the sheep. I read that at one point, there was a bear that was sent, and he had to fend off, protect his sheep from this bear. Another time, a lion was sent. I just thought to myself, “Wow, that’s incredible, how God can send obstacles to us, not to beat us down, but really to get us ready for something bigger and better and more important.”
That was my big takeaway from that. When I read further in that story of David and Goliath, and I saw how, when David was getting ready to go up against Goliath, they were trying to put him in all of this armor and give him a big, heavy sword, and David said, “I don’t need any of this stuff.” He said, “I have faced the bear and the lion, and all I need is my sling and a couple of smooth stones, and we’ll get this done.”
What I came to realize was that I believe that these are not setbacks, but they’re setups. It’s a setup to take us to a bigger place, to get us ready for something more important, and I think that’s what’s about to happen. I think that I needed to have some trials with the first book, I needed to make the first book better, and that’s where we’re at. The new book’s coming out, and like I say, I believe that these were not setbacks, but it’s a setup for something bigger and better.
Dr. Lamar: It sounds to me this book is not only bigger and better, improved, but the author behind it is also bigger and better.
Jason Parker: I’m stronger, that’s right. Send me the bears and the lions so that I can be ready for Goliath when the time comes.
Dr. Lamar: Bring it on. Game on. Have you always wanted to write a book? It’s been said that we all have a book in us. Is that something that you’ve wanted to do for a while?
Jason Parker: Writing a book, I was actually at a conference years ago, and the gentleman had said that writing a book was one of the best things that he had ever done. We have these ideas that we can share with people, and I think the ideas actually change people’s lives. Writing a book is a really hard endeavor. It’s very, very difficult, it’s very challenging. It’s very rewarding. I heard somebody once say, I think they were quoting Abraham Lincoln, that the written word is the only way that the dead can communicate with the unborn. It’s really, truly a legacy type of tool.
I think people, when they read Sound Retirement Planning, they’ll recognize that my book isn’t just about money. It’s about things that are … it’s about lifestyle design. It’s about deciding what’s most important in your life. When I wrote my book, I definitely took that into consideration. I thought, “If I were to die tomorrow, and this was my legacy that I was leaving to my kids, what does that mean? What’s important?”
Dr. Lamar: We’re going to talk all about that. We are coming up against a break, which is kind of new to me. Before we go to break here, I personally have a ways to go before retirement, and I’m sitting here in your beautiful studio, looking out the window, but I’m right next to this man who, frankly, looks a little bit younger than me. We’re going to break here, and when we come back, Jason, I want to know why someone who is entering into retirement or is in retirement should be listening to you, someone who is considerably younger. That’s next, right here on Sound Retirement Radio.
Welcome back, everyone, to Sound Retirement Radio. Dr. Thomas Lamar behind the mic, turning the tables to ask your host of this program, Jason Parker, the tough questions, as we learn all about him and his new book, Sound Retirement Planning.
Jason, I promise that I’m going to give you some softball questions here in a little bit, but I think the question I posed just before we went to break is valid. Jason, you’re a relatively young man, as am I. Why should someone who is of retirement age seek the advice of someone who is considerably younger?
Jason Parker: That’s a great question. Actually, early in my career, because not only am I fairly young, but I also look really young, so usually when I tell people how old I am, they’re very surprised. They think I’m actually younger.
Dr. Lamar: You’ve got that Dick Clark look.
Jason Parker: I hope it serves me well, and I appreciate all these ‘young’ comments, too. One of the things I’ve learned, and one of the things I think maybe challenged me a little bit early on in my career because I was young, I am young, is that it really motivated me to be the absolute best that I could be, to learn as much as I possibly could. Today, I don’t see it as a disadvantage. Today, what I hear from a lot of people is that they say, “Jason, we love the idea of finding professionals that are a lot younger than us that we know that we’re going to be able to work with for the rest of our lives, people that are going to be able to help us transition things to the next generation, and that you’re not going anywhere, that you’re in it for the long haul.” Whether people are choosing doctors or dentists or financial professionals, I think that my age is actually not a disadvantage. I think it’s an advantage.
The other thing that I would say is, at our firm, we are very focused. We specialize in working with folks that are retired or just about to retire. Everybody that’s coming through my door, we hear the same concerns over and over and over again. Because of that, everything that we do is geared towards serving that demographic as well as we possibly can. We’re not looking to bring people on from all phases of life. We’re focused like a laser beam on helping people retire, and because of that, I think that we’re very good at what we do.
Dr. Lamar: Your target clientele, obviously people who are looking to retire or might be actually in the retirement phase. I assume the book is geared for the same audience?
Jason Parker: Absolutely, absolutely. Usually what I tell people is folks within five years of retirement, or people who have already retired and now they’re looking to shift for more of an accumulation mindset where they had been accumulating assets to saying, “Okay, I’m retired now. What I have is what I have. I don’t have the time on my side to make a significant mistake in the market and recover. How do we restructure our financial lives in such a way that we can make it throughout our entire retirement without having to worry about running out of money?”
Dr. Lamar: Somebody, let’s say, that’s younger, like myself. Is this book going to be of any value to me?
Jason Parker: I think it could be. One of the things I hear from my clients, actually, after they read my first book, was that many people actually bought the book and gave it to their kids, which surprised me. I hadn’t expected that. Tom, you’re a young guy. I don’t know how relevant my book would be for you, but then again, my own thought process is a little jaded, because I specifically wrote the book based on who it is we serve. We tend to serve people who are within five years of retirement and already retired, so I’m hearing all of those concerns. Does that mean I wouldn’t be relevant?
Dr. Lamar: I would say, because … I haven’t read the book in its entirety, because you haven’t signed my copy yet, but I would say that there are some nuggets in there that even somebody like myself can take home.
Jason Parker: That’s good to hear, that’s good to hear.
Dr. Lamar: I mentioned at the top of the program that I’m a podcaster, and you are too, when you’re not over the radio waves. One of the great things about podcasting, Jason, as you well know, is that it’s time-shifted, meaning that someone could be listening to the program we’re doing right now years down the road. A book, if you think about it, it’s also time-shifted. If someone picks this book up, say, ten years from now, 20 years from now, is it still going to be helpful?
Jason Parker: Is it still going to be relevant, is it still going to be accurate? That’s a great question. I think the financial world is always shifting and it’s always changing. One of the things I’ve made a commitment to or the people that we serve, is to be relevant, to stay up to date, and to accept that fact that what’s the best today may not be the best tomorrow, Tom. I think the underlying principles are … there’s no time limit on the underlying principles, but with respect to the different financial tools that we talk about and the different vehicles you can use, that’s a shifting landscape. We always have to look and be willing to look at what’s happening in the financial reality that we live in right now, and create the best solutions for today. I can tell you, the best solution right now today is different than it was three years ago.
Yes, the principles are constant, but the financial tools will change.
Dr. Lamar: The book, kind of a good mix of nuts and bolts, if you will. Also some kind of 30,000-foot view, head space kind of stuff.
Jason Parker: Exactly, yeah. We serve amazing people, and I was out to breakfast recently with a gentleman. One of the things he mentioned after reading my first book was, he said, “Jason, you know, so many of the books out there are just very generic.” Obviously, we have some content in there that is universal. I wouldn’t necessarily call it generic, but I’d call it universal. It’s good financial sense, planning things. We also do get into the nitty gritty. We get into those nuts and bolts on specifics that people should be thinking about and considering, and this particular gentleman said, “Your book was the only one that I’ve read that really dives into the specifics.” He really appreciated that. I know that some of the people that we’ve talked to after the fact have said that they’ve enjoyed our book from that standpoint.
Dr. Lamar: Yeah, because somebody who’s listening might say, “Hey, there are a lot of books already out there on retirement and finances. Why your book?” Sell me on your book. Why should I be picking up your book?
Jason Parker: That’s a good point. I have to tell you, though. I read a lot of books on this subject, and I really don’t know of any book that looks at retirement planning as comprehensively as we do. The neat thing about that, one of the great things about having this opportunity to republish the book, is that I had some time to reorganize its structure.
The new structure of the book takes people through the same planning process that we take people through when they come into my office, which is, we want to start out understanding what’s most important to them, most important in their life, and then start looking at some of the risks that they face, things like longevity, inflation, market risk, and then, talking about the different financial vehicles we can use and what that means. Then, taking all of that information to put it together to help people create a retirement plan that’s comprehensive, that’s looking at their income, their budget, their cash flow, looking at their liabilities and their risks, and creating a portfolio. I don’t know of any other book out there that really, as comprehensively as we do, tackles all those subjects.
I haven’t read every book in the marketplace, and I’m pretty jaded here. This book, the initial writing took me a year and a half, and it’s been two years since then, so I’ve got three and a half years of writing and really thinking. The other thing that’s really unique is, I’m not just a financial journalist that’s coming up with ideas. We serve real people. It’s one thing to be a financial journalist and have your opinion and retract your opinion if things don’t go right. It’s a completely different thing to be giving real people real advice, where if your advice is wrong, it can have devastating real world impacts.
I’m probably more conservative than the average financial journalist, because we have so much more on the line than just selling a couple of books. The work that we do really changes people’s lives. We have a different perspective, a unique take on this planning process.
Dr. Lamar: You know what I love about you is the congruency that I see. You are the same Jason behind the mic that you are in the book, that you are with somebody who actually comes through your door.
Jason Parker: That’s for sure. One of the things I sometimes struggle with is balance in every area of my life. I think that’s an important component. I believe, 100% fully, in the work that we do. The story’s going to be consistent through all of these mediums, for sure.
Dr. Lamar: He’s the real deal, everybody. Was this something you always wanted to do? Get into financial advising and doing what you’re doing right now?
Jason Parker: I didn’t know it at the time, but ever since I’ve been a kid, I’ve always loved numbers, I’ve always loved business, and I’ve always been intrigued with personal finance. I found that when I was a young man, even still in college, I would pick up magazines and books on personal finance. It’s something I was always intrigued with. I really feel like it is my calling, it is my purpose. I’m good at it, just naturally. It’s something I’ve been interested in. I don’t know that from a young age … I remember my dad once said to me, he said, “Jason, if you make making money your hobby, that’d be a good hobby to have in life.” I’m trying to also develop my fishing hobby, Tom, because like I said, sometimes I get a little too lopsided in my life, and we spend too much time on things like trying to make money, but it is an interest of mine. It’s something that I enjoy reading about, even when I’m not working.
Dr. Lamar: You mentioned that you’re a family man. You have two kids at home and a beautiful wife to go with that.
Jason Parker: The absolute joy of my life, my number one priority. Sometimes we’re criticized from people here in the community because a lot of people we serve are still working, and they’d like to come meet with me on the weekends or after work. We don’t work on weekends or nights. My family’s my number one priority. My son’s eight years old, my daughter’s six. I’m coaching both of their baseball teams right now. I’ve been very blessed. My beautiful wife, we dated for four years before we got married, and now we’ve been married for 17 years, so, frankly, I can’t believe that she’s stuck with me all this time, but she has. She’s probably going to be considered a saint at some point in the future.
Dr. Lamar: Jason, I know that you’re always talking to other people on the radio, and I wanted to give you a chance to give your family a shoutout.
Jason Parker: Awesome family. Actually, a cool experience I want to share with you. We just got the proof of my new book, Sound Retirement Planning, and I recognize my family on the very first page of the book. My son, obviously he can read now, and my wife handed him the book and said, “Hey, Oliver, read this page.” I get kind of choked up just thinking about this. He read the dedication that is, “To both my beautiful wife and my awesome children,” and he read that and he turned around and he just gave me a big hug and didn’t say anything. That just hit me. It really hit me.
Dr. Lamar: It’s hitting me too. We’re going to take a break. I’ll grab a hanky. When we come back, though, we’re going to ask Jason a question. Jason, are we retiring wrong? I’m going to ask you to critique our current retirement culture. More with your host of this program and his new book, Sound Retirement Planning, Jason Parker, when we return.
Welcome back, everybody, to Sound Retirement Radio. If you’re listening in on the radio and you’re just joining us, I’m with Jason Parker, your host of this program, and we’re talking about his new book, Sound Retirement Planning. You can catch the recorded podcast of this show over at soundretirementradio.com.
Jason, I’m going to ask you that question that I teased just before we went to break, but before I do that, I want to dig a little deeper on something here, and it has to do with the book and this radio program. Specifically, as I just mentioned, the podcast of this radio program, because this show, as we said, is being broadcasted locally to the greater Seattle area on AM 1300 KKOL, Saturdays at 8 AM.
From a business perspective, because I’m a businessman too, I can see that broadcasting on a Seattle-based radio station has great potential to serve your consulting business right here in the sleepy old town Silverdale, Washington, and certainly the book and the podcast have the ability to do that as well. But the great thing about the book and the podcast is they’re reaching and serving people that will never step foot in this office because geographically, it’s impossible. Talk about that aspect a little bit more.
Jason Parker: Again, the work that we do, it really does change people’s lives. Somebody once said, I think it was Oliver Wendell Holmes, he said “Once a man’s mind has been exposed to a new idea, it’s stretched in such a way that it never goes back.” When we started Parker Financial, one of the things that I wanted to emphasize was education. I wanted to say, “Let’s go out and really try to serve people well, and bring them the best information we can.” That’s how Sound Retirement Radio was born, and that’s how my email newsletter was born, and that’s how the book ultimately was born.
Really, what I want to is I want the people right here in Kitsap County, I want to serve them the best that we absolutely can. But the reality is, we have had people contact us from all over the country to ask us questions, to recommend experts to bring on the program, which is very cool, but generally, what I want people to do is develop a good relationship with an advisor that’s right in their own community that they can have an ongoing long term relationship with. Maybe that advisor shares similar principles and ideas and values, but the reality is, you’re right, Dr. Lamar. Most of the people that are probably listening to this program, we’ll never meet them. They will never step foot in our office.
My hope is that when people have better access to better information, that it gives them a greater sense of confidence, because I’ll tell you what. Retiring’s a big deal. For some people, we’re talking about unemployment for the next 20 to 30 years. Imagine being unemployed for 20 to 30 years. That is a scary thing. The work that we do adds more confidence to people’s lives, it adds a greater sense of clarity so that they really are focusing on what’s most important. My hope is that, by having that greater sense of confidence, by having access to good information, that they’re able to experience a greater sense of freedom, and that that freedom allows them to go out and really, truly make an impact in this world.
When we’re sitting around watching the internet all day, watching the guy screaming at us on TV, all this conflicting information on the media news and resources about the best choices to make, it can really be unsettling. Then, one day we wake up and our life is wasted because we spent all this time worrying about our money. Our money’s important, but I’m hoping it’s not the most important thing in people’s lives.
Dr. Lamar: You brought up a point as you were explaining that. For that person that is listening, say, on the other side of the United States and meeting with you is practically impossible just from a geographic standpoint, but they are deriving significant value from your book, significant value from this podcast, but you know that they need to eventually find that local advisor that they can meet with face to face, how can they have confidence that they’re working with someone that truly has their best interests in mind?
Jason Parker: Yeah. There’s a couple of things that I always tell people to look for. Number one, I think by working with an independent advisory firm, that’s huge, because you want a company that really, truly represents you and doesn’t necessarily represent the company that they work for. I think independence is big. But probably the most important one, Dr. Lamar, is you want somebody that has a fiduciary responsibility to always act in your best interest. You want somebody that has a legal obligation to act in your best interests, and fiduciaries are usually people that are investment advisor representatives. They hold the Series 65 securities license. You just want to ask people, before you’re looking at forming that relationship, just ask them, “Do you have a fiduciary responsibility to act in my best interest?”
You would think when dealing with people’s money, that everybody in this industry should be held to that highest legal standard, but the reality is, they’re not. Most people, I would say, in this industry have a suitability standard that they have to follow. Brokers have to make suitable recommendations, and they don’t have to be able to prove that it was the absolute best for the client’s interests. Fiduciaries also have a responsibility to disclose conflicts of interest, and as much as we all like to reduce conflicts of interest, everybody has a conflict of interest, even a fiduciary.
My job is to make sure that our clients understand that there’s a lot of different ways to accomplish their goals, to be completely open and honest with them so that they understand all of the different components of that planning process, and to disclose any conflicts of interest that we have so that they’re aware that those exist. I would say choosing a fiduciary is a big one.
Dr. Lamar: Is that something that you have to ask that financial advisor, or is it something that they can find somewhere in the office? Are they looking for an emblem? How does that work?
Jason Parker: It’s probably just easiest to ask the question. Ultimately, it’s a licensing issue, and how people have structured their advisory consulting business. The easiest thing to do is just say, “Do you act in a fiduciary capacity? Are you held to that high standard?”
Dr. Lamar: Is that something that … a special class they have to take, or an oath they have to take? How does that work?
Jason Parker: Well, we are under the Investment Advisors Act, is what regulates our world, our fiduciary world. Brokers do not have that same fiduciary responsibility. Like I say, with all the different licensing, it is possible to be dually licensed, to be both a broker and a fiduciary, so some people act in that capacity. That’s okay. That’s good. You just want to make sure, in my opinion, that you’re working with somebody that truly has your best interests in mind and is going to disclose to you all the conflicts of interest that they have, because, like I say, don’t think there’s any way to eliminate conflicts of interest completely.
Dr. Lamar: Okay. Let’s get back to that question I teased before the break. Jason, when you look at our current culture and how it approaches retirement, are we doing it wrong?
Jason Parker: I don’t know that we’re doing it wrong. I just think that, like I said, the financial world’s changing all the time, and so sometimes what people do is they take outdated ideas and just assume that because “this is the way my parents did it,” “this is the way my grandparents did it,” that it’s still going to be the best solution for me. One of the things I’ve learned, Tom, is there really are a lot of different ways to accomplish people’s goals and objectives.
In my book, I share what I believe to be a very solid foundation for creating those strategies to help people really have a sound retirement. There’s really not necessarily one way. There’s a lot of different ways. I think a good advisor is somebody who’s going to be willing to listen to your concerns and help you put together a plan to do it the way that you want it done, not necessarily the way the advisor thinks best. Sometimes I need to remind myself of that. When I’m sitting with people and they come in and they really feel strongly about the financial tools they want to use and how they want to structure their financial life, look. This is your retirement. This is your financial life. If you want it done a certain way and your advisor’s giving you a lot of grief and telling you to go a different path, maybe it’s time to find a different advisor.
I like that old saying that God gave us two ears and one mouth because he wants us to spend more time listening than we do talking. When it comes to people’s financial lives, there are more conservative ways, and that’s the foundation of my book. If we’re going to structure things, what’s the most conservative way to structure them, and that’s usually the way that I like to start the foundation or the conversation with folks, and say, “Look, you’re coming to me for my expertise. Here’s what I believe to be the most conservative way to start building your plan. If you want to take more risk, we’ll ratchet up the risk, but here’s a foundation to work from, at least.”
Dr. Lamar: Talk to that person that’s getting ready to retire. What would you say is probably one of the most important things that they need to consider before they move forward?
Jason Parker: That’s a great one. There’s so many things. First of all, I’m reminded that this is a big transition in your life, and you need to be able to ask yourself the question, “What’s the purpose? Why am I doing this? What’s the purpose of the money?” That’s a big one. That is a really hard question for people to ask. I’ll ask people that one and they’re totally stumped. You want to be able to know, because there’s a frightening statistic out there, I can’t remember the exact way the numbers work, but a lot of men, especially, their identity is associated with their career, and once their career ends, their life ends shortly afterwards. If you don’t have purpose going into this next phase of your life, it can be very disorienting.
From more of a nuts and bolts standpoint, I would say that retirement’s all about cash flow. It is your income that will determine your lifestyle in retirement, not your net worth. The more secure you can put together a plan to solve for cash flow on an inflation-adjusted basis, making some assumptions about inflation, I think the better you sleep at night. The more confidence you have to know.
Because, ultimately, when I ask most people what’s the purpose of their money, Tom, they’ll say, “For retirement,” and I’ll say, “What do you mean by that?” They’ll say, “So that we can maintain our lifestyle.” The more you dig in to that, ultimately, the reason we all save and work and put money aside for retirement is because, when we retire, we want to be able to maintain our lifestyle, and that is really a cash flow issue, not a net worth.
The other side of that equation is, I meet people that come in, they have $2 to 3 million net worth, most of that net worth is tied up in real estate, and that real estate’s not necessarily generating income for them, and their financial life’s, they’re kind of strapped. They’re really feeling a pinch. Even though on paper they look really good, that real estate’s not necessarily generating income for them. What I’ve learned is that, again, retirement is all about cash flow. It’s not your net worth that will determine your lifestyle in retirement.
Dr. Lamar: When you said that most of us, men especially, really get wrapped up in our identity as to what we do, and then this idea of you’re going to be unemployed, basically, for the next 20, 25 years, that’s a big thing.
Jason Parker: It’s huge. I have a good friend who recently retired, retired pretty young. It was about a year ago, actually. It took him an entire year to really get his bearings and to really figure out what this next phase of his life was going to look like, how was he going to spend his time, what’s most important to him. Yeah, it is a big deal.
Here’s the thing. This gentleman that I was meeting with for breakfast the other day, he was telling me, he just recently retired about three weeks ago. He’s in that phase right now. He’s very disoriented. He loved his work, and so when people come up to him and congratulate him and say, “Hey, congratulations on retirement,” he’s thinking, “Well, this isn’t really a congratulations, I really enjoyed what I did.”
Dr. Lamar: “I’m having a hard time with this.”
Jason Parker: Yeah. It’s a hard challenge.
Dr. Lamar: Jason, we’ve got another break. When we come back, I want you to address some of the pitfalls that you see that people are falling into as they ready for retirement. His book is Sound Retirement Planning. Our final segment with the author and the host of this radio show, Jason Parker, when we return.
And, welcome back to Sound Retirement Radio with your host, Jason Parker. We’ve been talking about his new book, Sound Retirement Planning, all hour long, and now we’re in the final segment.
Jason, let’s talk about the pitfalls. I teased it just before we went to break, there. What are some of the pitfalls you see your retirees falling into?
Jason Parker: One of the biggest pitfalls, Dr. Lamar, is that people often times don’t change their money strategy when their life changes. When you’ve been working and accumulating assets, that is a different world than shifting into a preservation and more of an income mode. One of the big mistakes is, when your retire, not also changing your money plan to reflect more of a retirement focus. That’s a big one.
Another big one is just not having a plan. So many people, they plan their vacations better than they plan their financial lives. It takes a couple of hours, a couple of appointments, to really get a good plan together, and boy, so much more confidence in the process once you have that plan established.
Another big pitfall or risk that we see is people not looking at healthcare costs and how that could impact their financial life. There’s a lot of different things. Medicare’s changing, Obamacare’s having an impact on all of this. Longterm care is a big risk for a lot of people. Longterm care is this risk of, what happens when you have a significant health event, you don’t die, but you’re going to need some assistance for the rest of your life. How is that going to be paid for? It can be really, really expensive. That’s a big planning pitfall that we see a lot of people make.
Not understanding their budget. So many people we work with, they’ve been very successful, very good stewards of their resources, but they’ve never really accounted for every dollar that they’re spending. Putting together a budget, Tom, it’s really just a matter of saying, “We’ve got a plan for how each one of these dollars, we’re going to spend them,” instead of looking back after the fact and saying, “Boy, where’d all this money go?” Having a good budget, and something as simple as that, so many people don’t have because they’ve always had enough income. But now, their financial life’s changing, they’re not going to have a guaranteed paycheck anymore, and so they need to understand how are they going to replace that for 20 to 30 years.
Dr. Lamar: Yeah, you mentioned planning. Coincidentally, the title of your book is Sound Retirement Planning, because you have to have a plan.
Jason Parker: You have to have a plan. The book takes people through the exact process we take people through, looking at investments, insurance, tax, cash flow, maximizing Social Security, getting all of your estate documents in order, lifestyle design, putting a plan together to really focus on what’s most important to you, budgeting, and insurance. Nobody likes paying for insurance. I don’t know about you, but I don’t enjoy paying my insurance premiums, but we buy insurance because we want to protect the people that we care about. Making sure that we have the right insurance in place and making sure you’re not paying too much money for insurance is a good part of a good plan.
Dr. Lamar: Before we wrap up here, just some nuts and bolts here, just to give people some more value. How should people be investing their money in retirement?
Jason Parker: Intelligently.
Dr. Lamar: All right, good night, everybody!
Jason Parker: No, you know, here’s my take on investing at this point of somebody’s life. First of all, the first thing you want to do is solve for cash flow and try to do that as conservatively as possible. Put together a good retirement income plan. Once you’ve solved for cash flow, and the that way I like to do this, from more of a technical standpoint, is to diversify people’s time horizon first.
We like to create more of a time-segmented diversification strategy, and frankly, I think the entire financial world should do this for people when they retire. Basically what we do is we say the money that you need in the short term, say zero to five years, you want absolutely no risk with that money. Money that you need five to ten years, again, very little risk. Money that we have a longer time horizon for, ten-plus years, that’s where we can afford to take the most risks, so ultimately, time is the cure to the volatility of the stock market. The more time we have, the more risk we can afford to take.
The reality, Tom, most people, when they’re transitioning into and through retirement, time is the one asset that they have less and less of every year. Generally speaking, as you get older, you want to shift more of your assets out of a position of risk and volatility, and more of your money over to a position of safety. Step number one is to really understand that time is the cure to the volatility of the stock market. Create a plan that diversifies your time horizon first.
Once we’ve done that, once we’ve solved for cash flow and income, then we can start talking about investing your money for growth potential to help us outpace inflation. There’s an old rule of thumb that says you shouldn’t take more risk with your assets than you can afford to risk, and the rule of thumb is 100 minus your age. If you’re 60 years old, you’d have 60% of your money allocated towards more safety and 40% allocated towards more risk, and ultimately, what we’re trying to do there is balance the two competing interests. Inflation’s a risk, so if we’re too safe and we bury our money in our backyard, inflation eats our lunch. If we take too much market risk and we experience a 50% decline in one year, like happened in 2008 for a lot of people, then we’ve got market risk eating away at our purchasing power. It’s balancing between those two things.
Once we’ve created that initial plan, then I think there are two ways we can invest intelligently in the market. The first is what I call strategic asset allocation, and in my book, I have an entire chapter on this. Basically, strategic asset allocation is built on modern portfolio theory, which won the Nobel Prize for Economics back in 1990 for Harry Markowitz and William Sharpe. Again, in 2013, Eugene Fama won the Nobel Prize for efficient market hypothesis, which is often times closely thought of in the world of modern portfolio theory. This is more of a scientific approach to diversification and asset allocation, and helping smooth volatility and create a portfolio that will hold up over the long haul.
I’m not going to go into too many specifics because I’ll probably lose a lot of people here, but the other way I think you can intelligently invest in the market is using what we call tactical money management. There are times, like 2008, where strategic asset allocation didn’t hold up very well because all asset classes became highly correlated. Tactical money management is more active money management. It says that there are times when it makes more sense to sit on the sidelines than it does to take a lot of market risk, and that’s what we recommend.
I believe that there are two intelligent ways to invest in the market, using both tactical and strategic asset allocation, and what we like to do is allocate a little bit to both of those strategies. We found that most of the people that we serve, they’re not trying to hit a home run at this point in their life. What most people say is, “Jason, if we can earn a fair rate of return on our money, outpace inflation, and do that with as little volatility as possible, that’s really what we’d like to accomplish.”
Dr. Lamar: Sounds like a good plan to me.
Jason Parker: I know I kind of got carried away with the specifics and the details, and that’s the stuff that puts people to sleep, but like I said, I’m kind of a nerd when it comes to this.
Dr. Lamar: Well, you know, we need that in you. You need to know your stuff. We’re getting down to the end, here. Let’s get down to some brass tacks. We’ve been talking about the book, we haven’t said how you can buy it. How can people get the book?
Jason Parker: May 5th is the date that the book will launch and be available. For the initial launch week, we’re doing something really special for our listeners and our community, in that the book is going to be on sale for just $9.99. It’s only going to be available on Amazon that first week. Eventually, you’ll be able to buy it at Barnes and Noble and all the private bookstores, but the first week, we wanted to keep this as simple as possible, give people only one place to buy the book, which is Amazon.com, they happen to be the largest bookseller in the world, and give it to them for a discount. The book price is going to go up to about $19.95 for the traditional book after that first week, but the first launch week, May 5th, it’s only going to be $9.99.
Dr. Lamar: Just so everybody knows, the year is 2014.
Jason Parker: 2014.
Dr. Lamar: I’m always thinking about the time-shifting people on the podcast. We love you guys. You mentioned through Amazon. Is there an ebook in the future, perhaps?
Jason Parker: Eventually, yes, there will be an ebook available.
Dr. Lamar: Audiobook, maybe?
Jason Parker: Potentially an audiobook, yeah.
Dr. Lamar: I like the audiobook. Okay. Of course, we’ve mentioned the website, soundretirementradio.com, but you’ve got other ways that people can connect with you online. Tell us about that.
Jason Parker: Soundretirementplanning.com is our website. It’s also a blog that I write weekly. Parker Financial is where you can learn more about our wealth management firm here in old town Silverdale. We started a Facebook page for Sound Retirement Planning. I’ve never really been into Facebook, but it seems like a really great place to create community, and for people to share what they’re experiencing in retirement and for us to share ideas, so we did create a Facebook page for Sound Retirement Planning, as well. I’d love to connect with more people there and hear what’s important to them.
Dr. Lamar: Fantastic. All those links are available on your website, soundretirementplanning.com.
Jason Parker: Soundretirementplanning.com. I also want to throw out there, we do have a special video on Sound Retirement Planning on how to maximize your Social Security benefits, so that’s a big deal for a lot of people.
Dr. Lamar: Great. Go check that out, everybody. Jason, before we wrap up with my final question here, let me just say this has been a blast. I’ve really enjoyed this. Thank you for the opportunity.
Jason Parker: It was awesome. You are really great at this, and I appreciate your expertise. This really has been fun, to be on this side of the microphone.
Dr. Lamar: It is, it is fun.
Jason Parker: Have somebody ask me the questions.
Dr. Lamar: Well, this is what I want to know, and you and I can both see the shot clock here, we’re almost out of time. Obviously, we all need to make a living to support ourselves and for many of us, provide for our families, but Jason, what I want to know is, what gets you up every morning to come to work, to serve, like you do?
Jason Parker: I know that the work that we do really changes people’s lives. It really significantly impacts people’s lives. One of the things I’ve learned, Dr. Lamar, is that, once, from an income standpoint, from a lifestyle design standpoint, it’s really not money that motivates me anymore. In fact, I’ve, in the past, considered not accepting any more clients to our firm. We have a wonderful firm, we serve wonderful people. We don’t necessarily need to bring more people on. But it is that idea that you can share an idea that changes somebody’s life, and that we’re really making an impact in the world. That’s what motivates me.
Dr. Lamar: That’s awesome. God bless, brother. Thank you so much. This has been fun.
Jason Parker: Awesome, thank you.
Dr. Lamar: Jason’s behind the mic next week, everybody.
Announcer: Information and opinions expressed here are believed to be accurate and complete, for general information only, and should not be construed as specific tax, legal, or financial advice for any individual, and does not constitute a solicitation for any securities or insurance products. Please consult with your financial professional before taking action on anything discussed on this program. Parker Financial, its representatives, or its affiliates have no liability for investment decisions or other actions taken or made by you based on the information provided in this program. All insurance-related discussions are subject to the claims-paying ability of the company. Investing involves risk.
Jason Parker is the president of Parker Financial, an independent, fee-based wealth management firm, located at 9057 Washington Avenue NW, Silverdale, Washington. For additional information, call 1-800-514-5046, or visit us online at soundretirementplanning.com.