Jason and Bob talk about the one thing people say is most important to them.

Below is the full transcript:


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 is your host, Jason Parker.

Jason: America, welcome back to another round of Sound Retirement Radio. Remember, you can find all of these programs archived online at soundretirementplanning.com. Today you’re listening to episode 117, the title is “One Thing”, and this is really kind of interesting. I think you’re really going to enjoy this, it’s my good pleasure to have Bob Harkson, certified financial planner, back on the program with us this morning. Bob, welcome back.

Bob: Thank you for having me again, Jason.

Jason: Absolutely, I’ve missed you the last couple of shows.

Bob: Yeah, had a great Thanksgiving like I’m sure you did. My belt’s a little tighter. I was just telling the gentleman that cuts my hair, I said, “If I didn’t jog four or five days a week, I would probably weigh about 300 pounds right now actually.”

Jason: Careful. All right Bob, we’ve got to get this show started, this is going to be a good one. Before we do though, as you know, I like to start the morning right, and I think the best way that we can do that is by renewing our mind, and here’s a verse for you. This comes to us from first Peter five, verse seven: “Cast all your anxiety on him, because he cares for you.”

 That’s a good reminder for me. I know this time of year, I love Christmas and I love Thanksgiving, but I know that for some people, this is a really stressful time of year. I think it’s a good reminder of where we can cast our cares.

 The other one is I like to start the morning with a joke, put a smile on your face. If you’re going to go visit your grandkids, be able to share a joke with the grandkids, so here’s one for you. Bob, can you define claustrophobia?

Bob: Yes, it’s the fear of enclosed spaces.

Jason: Claustrophobia is the fear of Santa Claus, you’re absolutely right, Bob. All right, so this is episode 117, the title is “One Thing”. Now before we get going, I’ve got a little clip I want to share with you, Bob.

City Slickers: Do you know what the secret of life is?

City Slickers: No, what?

City Slickers: This.

City Slickers: Your finger?

City Slickers: One thing, just one thing. You stick to that and everything-

Jason: We’ll cut it out there because it gets a little graphic, but City Slickers, do you remember that movie, Bob?

Bob: Absolutely, Jack Palance and Billy Crystal, I love that movie.

Jason: Gosh, that is such a great movie that just puts a smile on my face. In fact, it’s been a long time since I’ve seen it, I’d like to go back and watch it again.

Bob: Great movie.

Jason: The title of this episode, its number 117, and the title is “One Thing”, and here’s the reason that this came about. You and I, we have this wonderful opportunity to meet with people all over the country to help them with this retirement planning challenge, this exercise as people are getting ready for retirement and as people are transitioning through retirement. There are some questions that I ask every person that we meet with every time. One of the questions I always ask, it’s towards the end of our first hour together, is I always say, “If there were one thing that we could accomplish by spending a couple of hours together, what’s the most important thing that you get out of our time together?”

 What I’ve done is I’ve gone back through the archives, because I record all of these meetings that I have with people, and I wrote down word for word what people said was the most important, the one thing that they were hoping to get out of our time together. As I read these, understand that this is their specific language that they used. This was a really good exercise to remember really what’s most important for people, Bob. It’s their one thing, and my criteria was, I went back through and I looked at everybody that had assets that were from $500,000 to less than $2 million, because I think that covers the bulk of the people that we’re really serving the most as they’re getting ready for retirement. I wanted to make this relevant to our listeners, the people who are listening to this and tuning in from around the country.

 Here you go, here’s the first one. Then I was hoping you and I could have a dialogue about maybe why this is important, what they’re really saying here. The first one I went back and listened to, and this is word for word, they said, “A good feeling, whether we are doing the right thing for our retirement goals.” Bob, what are your thoughts when somebody says, “A good feeling, whether we are doing the right thing for our retirement goals,” what do you think they’re saying there?

Bob: I think what they’re saying is, “Are we on the right path? Are we doing the right thing so that we can step back and be at peace with where we are and what we have?” Very common question.

Jason: Yeah, there’s just a lot of uncertainty out there. Remember the tagline to my book is “Clarity, confidence, and freedom”, and we want people to have that. One of the things that I’ve learned is that the better the plan that people have, the more accurate they are, the more confidence they’re going to have. Unfortunately, my experience has been, and maybe you’ve seen this too, but a lot of people don’t have a plan. A lot of people have just done a good job living simply, saving money, stashing it away, putting it in their 401k, putting it in their TSP, contributing to their IRA’s and their Roth IRA’s. A lot of times people end up with accounts all over the place, so they don’t really know if these accounts are all working together to really support them.

 They’ve done a great job saving obviously. They have between $500,000 to $2 million in every single one of these instances, but they just don’t know if they’ve saved enough and how that money’s going to support them. Let’s go into the next question here, and we’ll dig a little bit deeper into these as we go. The next person, when I asked that question if there was one thing that we could accomplish by spending a couple hours together, what’s most important to you?

 This is just so interesting to me to actually go back and read these. The next person said, “An analysis, and whatever adjustments are necessary to maximize what we have as to what it should be, because I don’t have confidence that the way it is structured is the best for our big picture financial situation.” Again, I’m a student of the words people use. “Big picture financial situation”, “I don’t know that it’s structured for the best for our big picture financial situation,” again I hear the word “confidence” come up. They say, “Because I don’t have confidence”. They want to maximize, are there any adjustments?

 There’s just this overarching concern that maybe we’re missing something. Do you find that, Bob? Do you find that that’s a concern that people have?

Bob: Yeah, and it get backs to they don’t have a plan or they’ve been reassured by their advisor, “Oh, you’ll be fine,” but what does that mean? That’s a great reassurance, but it’s not fleshed out. Am I able to look over the next 20 years and say, “Yeah, we’re really going to be fine,” or the next 30 years. We’ve got to keep in mind that with longevity and with us living longer and healthier lives, we’ve got to make absolutely sure that we’re not going to run out of money. Oftentimes, “You’re going to be fine,” just doesn’t quite make it, doesn’t quite fit that need.

Jason: Here’s another one. This came from a person who said, “I want to establish a financial plan for the rest of our lives, and then how do we handle a rollover for my 401k to my IRA?” “Establish a financial plan for the rest of our lives”, I mean think about that. Again, this gets back to this idea that when you retire, your money has to work differently for you in retirement than it did during your working years. Sometimes people make the mistake if they’re retired but their portfolio’s still acting like a 30 years old.

Bob: They’re subject to a lot of risk with the market volatility we’ve experienced. One of the things that I really encourage retirees is to take a look. It’s a different art of accumulating something as opposed to distributing it, and you can’t use an accumulation strategy for distribution strategy in retirement, it just doesn’t work. That’s where I think people come and say, “Well this has worked really well to get us where we are, but we’re not sure is this going to get us where we need to be the next 20 years?”

 You know, for a lot of folks it’s not an option to go back to work at age 75 or 80 or anything like that. There’s a lot of uncertainty about Social Security and the market and a whole bunch of things, and they want to have something where they can look at it and say, “We’re going to be okay.”

Jason: I see especially, and this isn’t always the case, sometimes the women are more the engineer type and the number crunchers. In fact just yesterday, that was the couple that I met with, but a lot of times these days what I find is that many of the people we meet with, the husband is kind of the number cruncher. There’s a concern there that if anything happens to him, because us guys, we usually check out of this place first, women tend to be more long living. A lot of men are concerned that their wives, because they’re not in the day-to-day management necessarily of the investments and the savings, they just want to know that if anything happens to them that their wife is going to be able to continue on and maintain the lifestyle. I really admire the men that step up and say, “Hey, let’s get this figured out so that you’re not in crisis management mode if something happens.”

Bob: Having met with a lot of widows, maybe you’re doing a death claim on a life insurance, there’s this look, the grief and just your ability to think clearly, and then you pile on top of that, “I have no idea what’s going on with our investments. What does this mean? Why did we do this? I don’t know what to do next.” I think that’s why it’s so critical for husbands and wives to plan together, so that in the worst case scenario, the wife doesn’t have to be the expert or the husband, but they need to know where to go and who they can trust, and have someone they can trust to give them good guidance in that process. A lot can change after the death of a spouse.

Jason: That’s a great point and it kind of brings up this whole robo-revolution that’s taking place. I know a lot of people are attracted to this idea of robo-investment management, because the promise of keeping your fees as low as possible. I think that’s a real important thing is to keep your fees as low as possible, but is the robo-advisor going to be able to step into the shoes when that event happens, and is that going to give the spouse the confidence to be able to say, “Oh yeah, we’ve got a good plan, let me call my robo-advisor up and figure out what we do next.” That might not cut it, I don’t know.

Bob: Well, and you may get a different person on the phone every time you call, and a person who doesn’t understand your whole financial picture. They’re not necessarily going to know if you have a pension or what your Social Security amount or what choice to make, I mean all those things come into play. In our attempt to go for the lowest fees, we end up putting people in the position to, at the point of crisis, really not have anywhere to turn, and I think that’s really critical. The idea is good, the question is how is it implemented, and that there is really good value in having somebody who is an expert in retirement investments and all those areas that impact our financial lives who can walk you through those different steps.

Jason: Do you think this is just two financial advisors though, trying to hunker down and protect our positions as financial advisors, because we’re like the Uber drivers that see the self-driving cars coming and taking away our jobs. Are we just trying to self-justify this?

Bob: Well, no. Look at somebody who has a 401k and they put their money in a fund that’s a 2015 retirement fund. They come to me all the time and say, “Well what do I do now?” Those are robo-advisors, those things are being adjusted, they’re based upon the target retirement. Not to make it too complex, but the point is that we already have robo-advisors in some of our 401k plans, but that doesn’t mean that what’s the next step when I retire? How do I roll it over? What do I do?

Jason: What I was surprised at too, because I was asked about robo-advisors recently and I went and I did some research on their fees expecting to see these really low fee structures, and I was surprised, Bob, that the fees actually, the fees that we charge people are right in line with what these robo-advisors do. I think they’ve just done a good job of marketing this idea. It’s important to understand that re-balancing a portfolio or allocating assets between non-qualified and retirement accounts, that is not the same as creating a year-by-year cash flow plan. That’s not the same as creating a retirement plan. That’s not the same as maximizing Social Security and building that into the plan. That’s not the same as understanding the tax implications of these different decisions.

 I mean, there’s just so many go pieces that go into re-balancing a portfolio. The fee structure I found, they really range anywhere from 35 basis points to 1% for most of them. Again, I think a lot of advisors out there, real people, humans, are actually doing a lot more number crunching and brain work applying it to a retirement plan than just re-balancing a portfolio.

Bob: I have a family member who’s got a retirement plan with a large provider, and he just looks at the number that just says, “Well, if I just work this long, I’ll have this much income,” but he doesn’t know what that means, but that’s how he’s planning his retirement. “I’m going to work till this says I have enough income.” What’s that income based on? That provider doesn’t provide somebody to talk to necessarily or will help you plan. They’re not even in that business, but they’re putting a number out there to give people confidence, but what does that mean? Does that mean if my money’s invested and I’m averaging 6% a year, what happens if the market drops 15% the year I retire?

Jason: Yeah, some of those 401k calculators, you really got to be very careful with. Because I saw one the other day, they were estimating Social Security benefits to be a certain amount, and the person wasn’t even eligible for Social Security yet. They’re saying that they’re going to have this much Social Security income and they’re not even eligible for it, well that’s not going to work. There was another instance again, one of these retirement 401k calculators, and there’s all these disclosures on there but nobody pays attention to the disclosures. They just look at like you say, that cash flow number, and sometimes those things can be way off track, so you’ve got to be careful with that.

 That again, is a computer feeding you information, and the information that the computer has isn’t accurate, it’s not correct. Just be careful there.

Bob: Well, and the temptation is, what they’ll do is they’ll ask you how you feel about risk, and then they’ll create a portfolio for you which is probably one of five or six generic portfolios. That doesn’t address making sure your money doesn’t run out over a lifetime, it just says, “Here’s how you feel about risk, here’s how we’re going to invest.” Here’s the question I pose to people saying, “Well you know, historically if you did this, you’d be just fine.” My question is, “Then why isn’t there a company who says, ‘Yes, and we believe that so much that we will guarantee an income adjusted for inflation for the rest of your life in writing.'”

Jason: Well there are, there are insurance companies that will give you a guaranteed adjusted contractually.

Bob: These companies that are investing in the market, most of them will say, “You’re going to be just fine,” but they’re not going to guarantee it, because they know that there’s a potential that you may run out of money. You may have a lot, you may run out, but we need to kind of narrow that gap.

Jason: Yeah, absolutely. Here’s the next one. Now remember, you’re listening to episode 117, and this is a question I ask almost every single person I talk to at the end of our first hour together. I say, “If there were one thing that we could accomplish by spending a couple of hours together, what’s the most important thing you get out of our time together?” Here’s another one, it says, I asked that question and the person, they only had one word response, they said, “Trust.” Now that was good, but then I was listening to another one of these interviews, and this is what they said.

 They said, “We know that we are going to have to put our trust into somebody to help us manage our investments properly, make it simpler for us to have it managed through one point rather than multiple points.” In two different instances, that word “trust” came up, and we’ve got to address that, Bob, because there’s not a lot of trust in the financial services arena. I wish there were more, but unfortunately there’s not. We’ve got to talk about why there is a lack of trust in the first place. Why do people have that sense of they just can’t trust people that work in our industry?

 Then the other piece to this is specifically this idea of having one point of contract rather than multiple things all over the place. Let’s talk about that, why do you think there’s this distrust for financial services?

Bob: Well, I think people think they’re going to be sold something or get ripped off. I read a study that said 44% of people don’t pursue a financial advisor because of the fear, they’re afraid they’re going to be sold something or get stuck into something or get ripped off, or that that person’s going to do it based upon his or her own pockets. I know that that’s true to a certain extent, though the vast majority of financial advisors have integrity and do things based upon the client’s needs.

 I think it becomes really important to have an advisor that you trust that has the knowledge and experience and has the skills to do all the things that they need to do to really provide you a thorough, complete plan. The goal is to make sure that you don’t run out of money in retirement if you live a long life.

Jason: Then there are people like Bernie Madoff, high profile ponzi scheme, hurt a lot of people. I remember one of my clients came in and they like to watch a show on TV at night called American Greed. I’ve never seen American Greed, but my understanding is that there’s all these people that get caught up in these different schemes or scams of some sort. There’s that distrust that people watch this TV show and they think, “Oh, everybody must be operating like that,” and then we all know somebody that’s been hurt by somebody that was running some kind of illegal scheme.

 I think there’s reason for people to be distrusting, and Bob, what are some of the steps people can take to make sure that they’re doing their due diligence, that they don’t get hurt by somebody in our industry. Actually like you say, it’s not usually people that are actually in our industry, it’s these con artists that are posing to be people that are qualified to give advice usually is who’s hurting people. What are some steps people should take if they’re trying to evaluate who they should work with for an advisor? What are some questions you would want to ask or you would tell your mom to ask somebody?

Bob: I think the first question is, is there a concern about your financial situation? When you come into a meeting, are they asking you questions about you and what your goals are and what your needs are, or are they trying to just kind of with a brush stroke fix it with a product. In other words, is the feeling that they’re gathering information to construct a plan that’s going to be functional that fits who you are, or are they trying to fix it with a product? With good intentions, they will do that sometimes, but I think without planning, you really don’t have a basis for recommending something to somebody.

Jason: I think that’s good to kind of have a gut check, but there are some actual things that people can do. They can check people’s licensing, they can check their credentials, they can ask for references from that advisor, they can check FINRA to find out if they’ve had any complaints filed against them, they can check the insurance commissioner’s website to find out if there have been complaints. They can make sure that they’re properly licensed through these different regulatory bodies. I remember even right here locally several years ago, there was a gentleman who was a tax preparer and he was telling people they had these great results, and he wasn’t using a third party custodian, he was just kind of making up these reports when people went into his office. Turns out that he had a gambling problem, so he was taking their money and gambling it.

 A lot of people lost a lot of money, but one of the things you want to make sure is that you have a third party custodian that you’re working with. Where does your money actually reside? Can you log in and check your accounts? Those are all important things that people need to do to protect themselves, and they need to listen to Sound Retirement Radio, because we are their advocates. Through good education people are going to make better decisions, they’re going to feel better about this whole process.

Bob: One other thing I’d say is look at the person’s certifications. Are they a retirement income certified professional? Are they a certified financial planner, charter financial consultant? These are all certifications that that person has spent the time to understand and learn how to plan for retirement.

Jason: There are people that could have good designations that are still giving bad advice. That doesn’t guarantee that they’re going to give you good advice, but that they’re going to have your best interests.

Bob: No, not at all, but it is a screening tool. I think they key is really, you want to check the person out, ask for referrals. Maybe you have friends who are very pleased with the financial advisor that’s done a plan for them.

Jason: Here’s the next one. This person says they want, “Reassurance that we are fine financially, that we don’t need to change anything regarding the path we are on. Reassurance that we are on track so that I can take a deep breath.” In that particular instance, they said the word “reassurance” came up several times, “that we are fine financially”, “that we’re on the right path”, and that they “can take a deep breath”. I can just envision that [deep breath], that sense of, “Gosh, we’re doing okay, we’ve done a good job.” Why is it Bob, do you think so many people don’t have that reassurance, that they don’t have that confidence?

Bob: There’s an old saying, “You don’t know what you don’t know”, and I think we instinctively know that. They’re looking at their portfolio, “Is there something that we don’t know? Is there something we’ve missed?”, or they’re being told they’re fine but they don’t understand why they’re fine. Oftentimes, it’s kind of going through the process and saying, “You’re going to be fine because this is the direction we recommend you to go, and here’s a plan that will make you fine.”

Jason: I think it’s important to recognize, people don’t spend their entire lives in personal finance for the most part. You and I do, because it’s what we do, but most people don’t. I’ll never forget the time the guy came to fix my heater in my home. He popped the cover off, fixed the heater, had it back on in 20 minutes, and I asked him what was wrong and he probably talked to me for about 40 minutes, and it could have been Japanese, Bob, for as far as I was concerned. I didn’t know what the guy was talking about who was talking about my heater.

 That’s who I want fixing my heater, somebody that knows a lot more than me. That’s why people come to people like you and me and they go to financial advisors, because they’re looking for sound financial advice. With that, we’re out of time. Until next week, this is Jason Parker and-

Bob: Bob Harkson.

Jason: Signing out.

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 as solicitation for any securities or insurance products. Please consult with your financial professional before taking action on anything discussed in 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 a subject of 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.