Jason interviews Roger Whitney who is the host of the podcast, Retirement Answer Man and a registered investment advisor who specializes in retirement planning.
Roger Whitney is the Retirement Answer Man, and he believes you can create a great life that balances living well today AND living well tomorrow by having the right little conversations about money. Over the last 24 years he has worked directly with clients on this journey and shares the wisdom he’s learned on his weekly podcast, The Retirement Answer Man, and his blog at www.rogerwhitney.com.
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. So glad to have you tuning in this morning. I am excited to be bringing you an amazing guest. The Answer Man, The Retirement Answer Man, but before I bring him on and give him a proper introduction, I think we should renew our minds.
One of the best ways, I believe, that we can renew our minds is with a verse so I’ve got one here for us. This comes to us from Act 20:24. However, I consider my life worth nothing to me. My only aim is to finish the race and complete the task the Lord Jesus has given me. The task of testifying to the good news of God’s grace.
Boy that is good news. Then I’ve got a joke for you to share with the grandkids. What kind of bread do elves make their sandwiches with? Why shortbread of course. I can just see all these disgruntled elves running around sick and tired of all these short jokes. Okay folks, you’re listening to Episode 119.
I want to remind you that we archive all these programs for you online at soundretirementplanning.com, and we transcribe them for you, but it is my good fortune to bring Roger Whitney, the Retirement Answer Man, and certified financial planner, one of the top podcasters in this space on to Sound Retirement Radio. Roger Whitney, welcome.
Roger: It is good to be here, and that was a horrible joke.
Jason: I was just going to ask you about … You must have elves as relatives or something.
Roger: I do. I do actually.
Jason: You’re easily offended. Easily offended, buddy. Roger, thanks for being a guest. You are leading the charge here on the internet with a podcast, Helping People Make Better Choices About Retirement. I just want to dig right into this thing this morning, and I want to ask you, if there was … What’s the biggest mistake that you see people making from a retirement planning standpoint?
Roger: Wow, just one? I think the biggest mistake from a financial standpoint I think is thinking of retirement as a number. There’s this charge out there that, “What’s my number?” What’s your number in figuring out how much you need to have in assets to actually be able to retire securely. I think that’s probably … It sets ourselves up for some really hard conversations if we focus on it like that. That’s one of the biggest ones.
Jason: Why do you suppose … Why do you think that’s the number, or why do you think that’s a mistake to describe retirement as a number?
Roger: If you describe retirement as a number, then you’ve just boxed yourself into retirement being all about saving and investing, being a saving and investing issue. That’s been the process for the longest period of time. It’s not a bad process, but it just doesn’t work for our generation, so it worked for say my grandfather who retired when he was 60 and lived until he was 69, and he had a pension, plus his Social Security.
Getting into his number, in terms of what he had to save to help take care of his family, the math worked, but if you look at a 60-year-old today, they have a 50/50 chance of living past 90. We’re talking 30+ years. Then we add in, unlike my grandfather who lived when he retired after a postal worker in Detroit, he did what every Michigander did, they moved to Florida to get out of the cold weather.
Retirement, for him, was a lot of sitting on the park bench of life. He was worn out from a long, physical career in manufacturing and in the postal service, and fighting a war, and all those other things, so retirement for past generations was a lot slower. They wanted to sit on the park bench. They read books, they went to the blue light special.
They weren’t as active, whereas if you look at a 60-year-old today, not only are they going to live a lot longer, but they’re looking at retirement, at least from what my audience tells me, as they’re chance to finally have freedom to live the life that they want.
Jason: I love freedom. Clarity, confidence, and freedom. That is the tagline of my book. Clarity, Confidence, and Freedom. Roger, I want to switch …
Roger: [crosstalk 00:04:58].
Jason: I just want to switch gears here a little bit because you actually have this unique opportunity to meet with a lot of people all around the country as ask them really … just to really get into their heads and find out what’s most important to them. When you’re sitting there, and you’re having this conversations with people, what is most important to them?
Roger: Their life. They want to live … Their biggest concerns or questions, when it comes to this whole retirement or independence conversation, is, “Can I maintain my lifestyle, or will I run out of money?” They’re not worried about … They’re not thinking about investing, or the markets, or maximizing returns relative to the risks you’re taking. They just want to make sure that they’re okay, in terms of living the life that they want, which makes total sense because that’s where they live, right?
I think a lot of times what happens is that we, as planners, are focused on the financial aspects of it, rather than making the main thing, the main thing, which is … Okay, they just want to maximize the only life that they have, and they don’t have a framework.
Jason: As planners then, how do we do that better? How do we help people create that framework? What should the framework look like?
Roger: This is my humble opinion, right? Just from my journey, is most … Our industry, I used to teach the retirement planning segment for the CFP Program at the university here, and if you follow the best practices of our industry, it leads everybody down a path to save and invest, about getting to that number, and making sure you’re okay in the future.
That’s a very one-dimensional approach in my opinion. I think what we need to do as planners, and from knowing you, Jason, I have no doubt that you do it, is yeah, we want to make sure we’re okay tomorrow, so if you think of that as a teeter totter or a seesaw, and tomorrow, taking care of tomorrow is on one side of that seesaw, and taking care, having a great life today is on the other side, we’re balancing on the top of that teeter totter right in the middle, trying to balance having as good of life as we can today, but still feeling comfortable about tomorrow.
I think what we can do in terms of approaching it is recognize that having a great life today is just as valuable as save more, invest more. I think a lot of times we just focus on saving and investing more, and that has a cost. That cost is potentially missing the only life you have which is the one right now.
Jason: When you think about opportunities to capture, what would you say is the greatest opportunity for people to capture right now today?
Roger: When it comes to retirement?
Jason: Yeah, when it comes to retirement planning.
Roger: I think the greatest opportunity to capture is income. Generating income is the driver of wealth creation. Just like in a business, right? That’s why Apple has so much money in the bank is because they had so much more income or revenue over and above their expenses.
Jason: I love that you said that because one of the things we’re always harping on here is that retirement’s all about cash flow, cash flow, cash flow. It’s your cash flow that will determine your lifestyle in retirement, not your net worth. I think people are feeling a little bit challenged today from a cash flow standpoint, Roger, because typically it used to be you would just buy bonds, and live off the interest income, or you would just buy dividend-paying stocks and live off of the dividends that are being paid.
Now, you’ve got things like preferred stocks that work like bonds and stocks kind of combines, so people are using those or they’re using real estate investment trusts, or they’re using annuities, or they’re using limited partnerships. What do you think, in this interest-rate environment now where we’re actually starting to see interest rates rise, what’s the best way for somebody to create income from this pool of resources that they’ve captured or created?
Roger: When I say income, Jason, I mean work.
Jason: Ah, okay.
Roger: If we’re focused on generating income from a portfolio form that mass of money that we hopefully have built up, yeah, I mean the options are very limited, and then that will lead us down a path of getting too fancy, which could introduce a lot more risks. Let me give you an example of what I mean by producing income.
Right now most people think of retirement or talk about retirement like it’s a date, like it’s a light switch. I work, and then I don’t work. My view of it, and from walking life with clients, and talking to listeners, it’s really much more of a relationship that you ease into, because if freedom is the number one desire of most people when they think of retirement, freedom doesn’t necessarily mean not working, it means having more control over my time, having more margin in my life so I can do the things that I actually enjoy. You can include work in that.
Jason: You know, that’s interesting that you say that because I’ve thought a lot about freedom, and freedom’s an interesting word. You’re either looking for freedom from something, or freedom to do something.
Jason: I think that would be a great exercise for people to, as they’re planning for retirement, is to just sit down … If freedom is important for them, to just kind of sit down and list what it is … I’ll share with you my list here because I have this on my blog. People can go and … I won’t share all of them, but freedom and clarity.
Freedom to love, freedom from debt, freedom from worry, freedom from greed, freedom to express, freedom to create, freedom to follow, freedom to learn, freedom from stuff, freedom from more, freedom to feel, freedom to listen, freedom from sin, freedom from worrying what others will think, freedom from time, freedom to believe, freedom to think, freedom to explore.
I just kind of went through. Like I said, I won’t read them all. You can go to the blog and do a search. Then I also did it with clarity. I sat down and I said, “What … Clarity. What does that mean to me? What is it I’m looking for?” Words like purpose, importance, significant, meaningful. It’s a really great exercise if people are looking for retirement and freedom, something that is important to them.
One of the reasons I did this, Roger, was a couple of years ago I decided to take a couple weeks off, and I took my family on this amazing vacation. After a couple of weeks of being on vacation, walking along the beach in Maui, I was like, “You know what? I’m going totally nuts. If I don’t … If I don’t do something productive with my time …”
I thought what I wanted was freedom to walk the beach until I did that for a short period of time, then I realized, “This isn’t freedom anymore. Now I’m just feeling kind of bored with life doing that.”
Roger: Those are two great perspectives to think about it from. I like that. I like that a lot.
Jason: This is a big transition for people. They’ve spent their entire lives working and saving, really with this end goal in mind. Like you say, now people are living longer than ever. They’ve saved what they’ve saved. What are your thoughts about just having more confidence in that, especially for the people that are coming up on that decision point, Roger? Maybe not the people that are still years out from retirement, and still thinking, working.
Is what you’re saying is that you think people should continue, or maybe consider working at Trader Joe’s part-time or just having some kind of part-time employment different from what they did in the past or maybe starting some kind of internet business? What are your thoughts there in terms of [crosstalk 00:12:48] transition?
Roger: If you have the assets to actually … If you’ve built up that massive number to cover the cost of living for 30+ years of retirement, then great, but what I’ve found is almost nobody has. Then what I get really concerned about … You asked about how can you have more confidence, and how can you have more control?
If it is only in a saving/investing issue, you’re never going to feel confident, and you’ll never have any control because it’s all about investing, and we can’t control any of that. We can control our behaviors, but we can’t control what the capital markets can provide. There are lots of different seasons there.
If you look at that, say that first five years of retirement, and you’re just out of your job, your J-O-B, and you’ve gotten free from that, so let’s say they were running away from that. As soon as you’re free from that, you have, hopefully, a good, professional network, you have relevant skills, and you still have some energy.
If you can earn a small fraction of what you earned in your professional life, that’s going to do a couple things for you. One, it’s going to allow you to maybe take less investment risk. It’s going to allow you to make hay while the sun is shining because life will happen, and it will help keep flexibility and options open to you.
Whereas if life happens to you when you’re 70 or 80, and you’re 10, 20 years out of the work force, well now your professional network is all retired too. Your skills have atrophied and you have less energy. You have a lot less flexibility. I think that could really help us in the whole retirement equation.
I think the other part is rather than trying to figure it all out, if you have the right little conversations, then … We can’t prevent things happening, but all we can do is react, and mitigate, and be as prudent as we can, and as we adjust as reality unfolds.
Jason: What are some of the … in this new gig economy they call it. I’m really excited about retirees from this standpoint. It’s really the Millennials that have kind of jumped on the bandwagon, in terms of the gig economy, but you’ve got companies like Uber now where you can go drive a car for a couple hours a day and make a little bit of money.
You’ve got people that create blogs, and write content, and sell stuff online, and they do all that from their home. What are your thoughts about people replacing some of their income from non-traditional? Instead of just buying real estate and becoming a landlord, some of these non-traditional sources, and do you know of any good resources for people if they’re interested in pursuing that type of second career?
Roger: That’s a great question. I think that’s a really important element of it, and I think the time to start noodling on that, and thinking about what you could do, is while you’re still working. It’s in that first … that five to ten years prior to retirement when … I’ll give you some good examples.
I had a client who made … who loved to sew, and she worked her way into a job where she repaired flags, and ended up making like $70,000 a year repairing flags, sewing from her house. You have Uber drivers. You have people that work at golf courses. You have people that retire, and immediately do consulting, all virtually, all virtual-related. I think the opportunities are endless.
Jason: I met a guy recently who … I was dropping my car off to get the oil changed, and he’s retired. He drives a shuttle. He said his wife needed him to get out of the house, so he drives a shuttle a couple hours a day, driving people back and forth to their car, just because he gets to meet people, and talk to them, and get out of the house and do something, and makes a little income.
Roger: Sometimes we obtain these career levels, and we always think it has to be more, but really you get out of the corporate ladder, and you don’t have to make a ton of money, but it does a couple things. One, it keeps you active. It brings in some cash flow, but it also does a couple other things.
Because you’re active, and you’re doing even part-time work, that means you’re not doing thing that you probably would be spending money on, right, because the opportunity costs, if you’re just sitting around all day, it’s easy to golf, internet shop, do whatever.
Then the third one, which I think is really underappreciated, I’d be interested in your opinion on this one, Jason, is when we leave work, we lose a huge portion of our social network, which we always say, “Oh yeah, Johnny, I’ll have lunch with you after I retire,” but as soon as you’re gone from that profession, everybody else is marching along, and I’ve seen it happen where a lot of people, they lose all their friends.
They lose that network around them that supports them and helps create a rich life, and part-time work has the added benefit of it can help you rebuild a friendship outside of that career, a whole friendship circle outside of that career.
Jason: You know I ask people two questions frequently, right after they retire. I’ll ask them what they like the most about now being retired? Then I’ll ask them what do they miss the most about not working? The answer is amazing. I always hear the same things over and over again.
Number one is the thing they love the most is not having the alarm clock go off at 4:00 in the morning. Then the second thing they say is those relationships, that’s what they miss the most is that camaraderie, that team. They miss the people, so I think that’s a great point. Developing, making sure you have those strong relationships.
Roger, you do some amazing work, and I want to make sure our listeners are plugging into all the resources you make available to them through your podcasts, through your website. I know you’ve got a special event coming up the first part of next year. Would you share some of that with our listeners before we run out of time?
Roger: Yeah sure. Actually this came from a listener the first year. This will be the third year that we’re doing this, and a listener had emailed me saying, “Hey, Roger, I’m getting ready to retire, and it would be good content if maybe you created a plan for me, and I allowed you to write a blog about it, and make a case study.”
I’m like, “Okay. That’s sort of cool.” I took it one step further, and what we decided to do, and he agreed to it, is we changed his name, and changed some of the financial information, but we created a retirement roadmap, and went through a series of meetings, and I recorded all of our conversations.
Then aired them as an audio case study right on the podcast. Then we did a webinar where he was on there, and everybody that was participating got to watch as I outlined what his plan was, and showed him whether he was going to be able to retire, and if not, we would negotiate how it could work.
We call it Retirement Plan Live. This is the third year that we’re going to do it starting the beginning of February. I’m excited about that. From listener surveys, people love to hear other people’s situations and how they dealt with them so it makes it real exciting.
Jason: That’s awesome. Some people, Roger, if they listen, because I know some of the people that listen to our radio show also listen to yours, so they might think, from a distance, they might initially think, “Well, these guys are kind of competitors. They’re in the same space. Why are they on the podcast together?”
Somebody once said, “Together everyone achieves more.” One of the things I loved … I reached out to you when some of our listeners said they listened to you, and you’re just so open with sharing what you’re doing, and what’s working. To be able to create that environment … Here’s what I know, Roger. You and I, we have firms that do this for people. We help people with this transition into and through retirement.
The reality is there’s 10,000 people a day retiring, and you and I are leading the charge on this thing, so if their only resource is contact Retirement Answer Man or Sound Retirement Planning, I know you and I, we just don’t have enough resources to help everybody out there. I just appreciate your openness and your willingness to share, and your ability to do these webinars for people where you can walk them through step-by-step and show them exactly what that looks like. Thank you for your work there.
Roger: That’s very kind of you. Thank you man. You’re right. We’re all just trying to help figure it out. We’re just sharing out knowledge and our wisdom. That’s going to resonate with some. This is more important than the business end of it.
Jason: Yeah. As you think into 2017, what are you most excited about?
Roger: I’m most excited that my book is finally done, and it will be coming out.
Jason: All right. You got a book out, coming. All right. We’re going to have to have you on again as soon as the book is ready for launch so that we can maybe promote that a little bit. Tell our listeners about it. What’s it called?
Roger: Oh Lord, it’s only …
Jason: Do you have a title yet?
Roger: … taken me a couple years. Yeah, it’s Thrive Outside The Lines.
Roger: The tagline curly, this might change, is how to create retirement masterpieces. It’s about how to think a little bit more multi-dimensionally about life after work.
Jason: Wow, that’s awesome. That’s kind of taking a different … You’re really trying to get away from some of the number crunch, and some of the nuts and bolts of retirement planning, and look at it from more of the relational side of things?
Roger: Yeah, I think the number-crunching is super important, but I think it’s … if that’s all it is, that I think there is a retirement crisis.
Jason: Yeah. Roger, this has really been a lot of fun. Folks, I just want to remind you, you’re listening to Episode 119 on Sound Retirement Planning. I want to encourage you to check out the Retirement Answer Man, Roger Whitney, he’s got a podcast. A lot of followers. He’s doing a lot of great work out there. Roger, what’s your website that people can visit?
Roger: It’s real difficult. It’s rogerwhitney.com.
Jason: rogerwhitney …
Jason: Roger, I want to finish up with one last question. My last question for you is what’s most important to you?
Roger: There’s so many. God, family, all the normal things, right? From a business perspective, it’s changing how people think about retirement because they’re missing the only life they have. That’s what I’m put here … To your quote earlier, [inaudible 00:23:26], I’m here to … That’s what I’m supposed to be doing with the rest of my life.
Jason: Sharing the good.
Roger: I spend a lot of time on that.
Jason: The good news of God’s grace.
Roger: That’s right.
Jason: I just love that. You know what that does? It gives us a lot of flexibility and freedom. We don’t have to be experts, all we have to do is share the good news of God’s grace. That’s pretty awesome. I appreciate your candor and willingness to share that as well. Roger Whitney from the Retirement Answer Man. Roger, thanks for being a guest today.
Roger: Thank you man. It was awesome.
Jason: Keep up the good work.
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Investing involves risk. Jason Parker is the President of Parker Financial, an independent, fee-based wealth management firm located at 9057 Washington Avenue Northwest, Silverdale, Washington. For additional information, call 1-800-514-5046 or visit us online at soundretirementplanning.com.