Jason and Emilia discuss asking what people want in retirement.
Below is the full transcript:
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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. Now, here is your host, Jason Parker.
Jason: America, welcome back to another round of Sound Retirement Radio. So glad to have you joining us as we are on this journey together, preparing for and transitioning into and through retirement. This is going to be a great episode. You’re listening to number 152, so if you’re driving down the road in Seattle this morning, you can’t catch the whole thing, find the archive online. It is my good fortune to have Emilia Bernal back in the studio with me this morning.
Emilia: Good to be back.
Jason: Emilia, you’re getting all kinds of compliments, people comment and they love hearing your voice on the show.
Emilia: I know. I think it’s kind of interesting because I don’t listen to the shows myself, but I hear that, I do get a lot of compliments. It’s exciting because I forget at times that I’m even on the radio, but yes, it’s fun.
Jason: Man, I love it. I love it, you’re doing a great job.
Emilia: Thank you.
Jason: Thank you for being here. We like to start the morning right two different ways. The first is by renewing our mind, and I have a verse here for us. This comes to use from Hebrews 2:1. It reads, “We must pay the most careful attention, therefore, to what we have heard, so that we do not drift away.” And then the second way we like to start the morning is with a joke. You’ve got one for us this morning.
Emilia: Yes. I’m going to do a little sneak peek, I’ll do two jokes today just because-
Jason: Good, extra jokes.
Emilia: We just finished the Thanksgiving holiday so I thought a turkey one was fun, but then I have a different one. First joke is, what side of the turkey has the most feathers?
Jason: What side?
Emilia: The outside.
Jason: That’s true. That would be a little disturbing actually, as I kind of create a visualization in my mind.
Emilia: I was thinking too, I’m like, “The right side?” I’m like, “The back side? I don’t know.” But yeah, the outside. One more, where does the snowman hide his money?
Jason: I don’t know.
Emilia: The snow bank.
Jason: The snow bank, good.
Emilia: That’s all I got for you.
Jason: You know, my sister has chickens. She has chickens and she likes the eggs that she gets from those chickens, but she just mentioned recently that it’s been three weeks since they’ve gotten any eggs from these chickens. She said, “It’s no wonder birds get eaten at Thanksgiving.”
Emilia: It is that time of year.
Jason: No Eggs? So Emilia, episode 152.
Emilia: Yes. 152. What do you want? Jason, you get to meet with a lot of people and there are some questions you try to ask a lot, or stay consistent with. What are some examples of those questions?
Jason: This has been so much fun. I’ve been doing this now for 10 years. Over that 10 year period of time I found that there really are some good questions to ask. I remember somebody once said, “Don’t find me the guy that has all the answers, find me the guy that asks a good question.” I’m always seeking, searching for a better question. I’m reminded of Jesus who was like the ultimate question asker. He asked some really powerful questions, especially at moments when he was really put on the spot or challenged. He would ask a really powerful question. I’m always searching for a better question to ask.
There are some questions that we ask, that I ask pretty consistently. One of them is, what’s the purpose of this money. That’s a very consistent question. Another question my friend, my mentor, Dean taught me to ask, is he said, “What’s your vision? How do you envision retirement?” I like asking that one because I like when people lean back in their chair and they start painting that mental vision of what retirement looks like. But the one I wanted to focus on this morning is I will ask people, if we could accomplish just one thing by spending a couple of hours together, what’s the most important thing you get out of our time? What’s that one thing?
What I’ve done, because I have years and years of archives and many people, many of our listeners may not know this Emilia but I actually go through and I record every conversation that I have with folks. Of course we have to disclose that to them before we hit the record button, but I have years and years of archives, where I go back and I can listen to these meetings. I sound like a broken record because I ask the question the same way over and over and over again, but it’s really fascinating to go back and listen to how people answer those questions. What I’ve done is I’ve gone and I’ve compiled the first thing that I hear people say through a lot of these different conversations over the years. I thought we could maybe share some of those ideas.
Emilia: That’s a great idea. Yeah, thanks.
Jason: Before we do though, you know that verse that I shared this morning, it’s one that I’ve been thinking about a lot for this past week. One of the thing it says is, “so that we do not drift away.” When you hear the word drift what does that mean to you? What do you think of when you hear drift?
Emilia: When you say, drift away, but drift like moving.
Jason: Moving.
Emilia: Like flowing.
Jason: Flowing.
Emilia: Maybe, yeah.
Jason: Yeah. I asked my kids and my son said, “Like a piece of bark in the ocean.” My daughter thought of a boat in the ocean. For some reason, when I heard drift I thought of leaves blowing in the wind, drifting. But I’m reminded that this drift is something that happens, it’s a slow movement. It’s not like a severing. It’s not like somebody one day wakes up and says, “I’m done. I’m out of here.” It’s just this slow drift away.
I think, boy, that really stuck with me and I’ve been thinking a lot about it. I’ve been thinking about it so much that it’s actually entered my dreams. I had a dream the other night that I was in the ocean on a boogie board and I was just drifting in the ocean, because I’ve been so focused on this, what does it mean to drift.
Anyways, okay so back to these questions. The one thing … here’s a list, I’m just going to read through the one thing that I’ve heard a lot, that I’ve heard people say over years and years of these conversations. Reassuring us that we are on the right track. Clear picture of what we need to do. Peace of mind. Game plan to follow. Peace of mind. We are doing the right thing. A plan. Not sure if we are doing the right thing. How much more to save? An expert to say what you need to do. To get advice. Direction on what to do with the money. Get these things all into one place, consolidate. Plan, strategy.
How can we make our investment work best for us? I feel confident that you can assist me. Not discouraged. Developing a strategy. Where do we go from here as we prepare for the future? Confidence. Put our affairs in order, so survivor or children are not burdened. Not make a huge mistake. Confidence. Backup plan. Answer concerns. Tax implications. Plan to access funds. How to withdraw funds. How to generate interest income. The best way to generate income. On the right track. Sustainable. Plan how to go forward. Investment plan, that we feel comfortable, that we need to execute and that we’re motivated to get it done. Some reality check. A path to go. I want to plan, an investment plan. What’s the best plan going forward? We are hoping we can trust you for help, to help us make the best decisions.
That’s so fascinating to me, and I hope it is for our listeners too. I hope what this helps them to realize is that if they have these same hopes, these same dreams, these same concerns, these same desire for retirement. That they just know that if this sounds like something that’s going through their head, they’re not alone in that. That there’s a lot of other people with those same questions. But Emilia, as you hear this, what stands out? What are some of the reoccurring things that you heard as I read those too? This is first time you heard this.
Emilia: Yes. To me it was more of like, I get the sense of a feeling that people are looking for a lot of guidance. I think when you come into situations like this, that you’re not familiar with, you want to learn. You want to know and you want to be able to trust somebody. I think they’re looking for somebody to guide them, give them the information, but again be trustworthy. Because this is a big situation in their life, it’s a big change in their life, and I got the sense that a lot of them don’t always know which way to go. I heard a lot more like a seeking of guidance for me.
Jason: Yeah, guidance. I heard that word a lot too, and plan I heard a lot. I heard confidence a lot. It’s such a fascinating, it’s so fascinating to me. I’m so glad that I’ve had the opportunity to record these meetings so I can actually go back and hear these words that people share, because words are so important. Words are how we express what’s going on in our brain.
This morning, as I was getting ready for the show, I was thinking what it must sound like when the husband or wife is sitting at the dinner table and they say to their spouse, “I think I’m ready to retire.” Can you imagine, maybe the fear of expressing that desire, or the reluctance, or just the question, “Are you … ” You know, then the spouse coming back and saying, “Are you sure this is going to work? Can we do it?” Can you imagine what it must be like to ask that question?
Emilia: It’s a big question to ask.
Jason: Or to make that statement, “I think I’m ready to retire.”
Emilia: Yeah, or to be prepared for the, because if you even have to ask, “Can we?” That’s got to be a scary question, “Can we retire?” Yeah.
Jason: Yeah.
Emilia: These questions are really important, like you said.
Jason: It’s really important.
Emilia: I think it’s a lot of self-reflection when you ask questions, you get people to think themselves, “What brought me to where I’m at? How do I get to where I want to be?” Like you said, reflecting on how do you picture your retirement. It’s a big deal.
Jason: It is a big deal.
Emilia: It is.
Jason: Yeah. It’s such an honor for me to be able to be in this position, to be able to ask these people these questions. I was sharing with my men’s group this morning that a lot of times I know more about people’s finances, because finance is a pretty personal subject. Most people, this isn’t something that most people share with the world. So I get an opportunity to have conversations, very meaningful, about something that’s very important to them, their life’s work is reflected often times in the money that they have saved. It’s a neat position. I love the work that I do and I feel blessed. It’s an honor for me to be the one that gets to accumulate all of this wisdom.
Emilia: Do you get this question about what is the one thing, or what is the magic wand? How does that work? Do you hear that often? Or people are looking for that one thing that’s going to make everything right?
Jason: It’s the question that I ask. I used to ask this a different way. I used to say, “If I could give you a magic wand and we could accomplish just one thing by working together, what would you do?” I changed it from a magic wand, because it just seemed to weird. Most people aren’t used to magic wand, and so I simplified it down to more like that City Slickers quote, “One thing.”
Emilia: I like that voice. Yeah, so what are some of the answers to the one thing?
Jason: Well, you know when it comes to, like you just said, the confidence, a guide, and a plan. Those are the things that really stand out to me. I would love to hear from our listeners on this, as they hear me read some of these responses from years and years of responses, what stands out to them. Maybe I’m missing it. But a plan and confidence are two big ones, and that’s what I think a lot of people are missing.
One of the things I was hoping we could do today is number one help people realize we’ve created a resource for them that can help maybe answer some of these questions about what a good plan looks like. Because ultimately my goal is that people have a greater sneeze of confidence and that they ultimately can experience a greater sense of freedom in their lives when they have that confidence, be able to go do the things that are really important to them.
That ultimately is just helping them understand the confidence. One of those resources, Emilia, if people go to soundretirementplanning.com, we just recorded a webinar. It’s called, The Sound Retirement Planning Replay. We have a webinar replay. I find that a lot of people actually don’t have a plan. A lot of people have investments and they have insurance products, but they don’t actually have a plan that puts all of the pieces together. A lot of people don’t even know what that should look like. They go to some of these investment house and all they end up is a risk tolerance questionnaire. You know, how much risk do you want to take with your money? But it’s not a retirement plan, so people don’t even know what they should be thinking about.
That’s the reason that we created the webinar. This is a replay, so people can watch it at their convenience. If it’s two o’clock in the morning and they’re getting ready to retire, and they want to know if they have a good plan, they can actually go watch the webinar replay and just say, “Have we done these, all these steps? Is this going to work?”
Emilia: That’s great. After having worked with you for the past few years Jason, I’ve learned about … Your planning process is comprehensive. I think that’s very different from what I’ve seen in other agencies that are financial advisors. What are the elements of a good plan?
Jason: Yeah, so we’ll start with the most basic. Retirement’s all about cash flow. It’s your income that determines your lifestyle in retirement, but your income has to match up with your spending. So those two pieces, if we simplify it down to the most important things, income coming in and how much do you spend. It doesn’t have to be complicated. It starts getting complicated because we’ve got all these moving parts, we’ve got all these stocks and bonds and mutual funds, and ETF, and annuities and hedge funds and limited partnerships and writs, all these decisions to make about this. But what it all boils down to retirement is, from a financial perspective at least, it is what’s your income? What are your expenses? Do they match up so that you can continue to have the lifestyle that you want?
So of course, people know that we created the retirement budget calculator to help with the spending side of the equation, just so people could put it down in our computer software, so that they really understand what their spending looks like today, and how it’s going to change over time with inflation. That’s the retirement budget calculator. For our listeners, if they don’t know we have a discount. If they use the coupon code PODCAST as they’re registering they get 50% off. As a special Thanksgiving, Black Friday treat for everybody, the retirementbudgetcalculator.com. Understand your spending.
The next piece is income. One of the things I found is that a consistent piece in most people’s lives is social security. Some people have pensions, many people don’t, but most people have social security, that we talk with. They’ve paid into social security. Understanding how social security works, the best way to maximize and optimize those benefits. That’s not a black and white answer because it’s not always about getting the most money from the social security system.
In fact I did an analysis recently for a couple. We ran this three different ways. We looked at starting social security at age 70 to get the maximum benefit. We looked at starting at the earliest, at 62. Or we looked at starting at right at the time of retirement, which is about 66. What was interesting about that is that starting the benefit at 66 was not, in this particular situation what it turned out to be was waiting to take the highest benefit was actually the best scenario, waiting until 70. But the second best scenario was actually starting at 62 from a retirement planning standpoint.
It’s just understanding how that income works in conjunction with the overall cash flow. Sometimes the difference between a good social security claiming strategy and a bad one may be $30,000, or $50,000 for a married couple, under the new rules, how it works today. But that’s over two people’s lifetimes, and so sometimes I just-
Jason: Yeah. Really what it means is, yes the money could last longer as a result of delaying social security, and in some cases it’s very important. But for other cases what it means is you’re going to have to draw down your portfolio sooner, and if you end up dying early that means less money that you’re going to leave to the kids as a result of trying to maximize social security.
There’s a lot of components, but that’s an important one, understanding where your income’s coming from and trying to get the most, very most out of it. Social security’s tax efficient, inflation adjusted and there’s a surviving benefits for a spouse, and there’s benefits for widows and divorced people. There’s a lot of things people need to be thinking about. That’s the second piece.
The next thing is once we create what I call a year by year cash flow plan, and again this is all in the webinar that we created that people can go back and watch. Once we create a year by year cash flow plan, where we make some conservative assumptions about inflation, and we make some conservative assumptions about rates of return, then we want to start stress testing that portfolio. We want to say … Or that retirement plan.
We want to say, what happens if one spouse dies early? Is the surviving spouse going to be okay? We want to look and see, what happens if one person doesn’t die but they start down that slippery slip of needing some long-term care? Do you have enough money to pay for that kind of an expense? Or do you need to be thinking about something like insurance to help protect and cover you there? Then if you’re going with getting insurance, what’s the best type of policy to buy in today’s environment? So stress testing.
Then of course you want to look at sequence of return risk. You want to say, “Okay, if I spend this much money, and at the same time the market’s tanking, what kind of result is that going to have on my financial life?” You also want to stress test your investment portfolio. You want to run historical back tested scenarios to say, “Based on how my money’s invested today, if we were to experience something like another financial crisis or another bear market, how is my portfolio going to be impacted? What are the potential results? Does that match up with the risk that I’m comfortable with?” These are just some of the steps that people need to be taking to create a comprehensive plan. Ultimately, really what we’re looking for is that confidence. We want people to have confidence.
Emilia: Absolutely. You’ve given us some options and things to look at, but how can people learn more about developing a good plan? I know you have some great resources, the retirement budget calculator, your book, even coming in to meet with you. What are some good options to start learning?
Jason: Yeah, we’re always happy to sit down and have a 15 minute phone call with people if they’re looking for an advisor, somebody to help them craft a plan. I think that’s a good starting point. We’re not the right solution for a lot of folks out there but we maybe can let them know through a 15 minute call, whether that we should even have more of a consulting relationship.
But the book of course, Sound Retirement Planning, this has been my life’s work. I get to have these conversations, I get to hear these concerns. We get to develop plans and we get to see how the plans actually work. It’s a lot different being an advisor who’s actually boots on the ground, having real life experiences with people as they’re making this transition into and through retirement. Versus, a lot of these financial journalists out there, that have these ideas that they like to share but they have no accountability and there’s no responsibility. If they write something about, let’s say doing a Roth conversion, and they make all the arguments for it, but they don’t understand how a Roth conversion is going to impact somebody’s cash flow plan. It sounds good, the article is good, it’s got a catchy headline, but what are the results and the impact of making those decisions? It’s a lot different perspective that I have the opportunity to come at this with because we meet with real people all over the country to help them with this planning.
So the webinar replay, number one. If you’re a visual learner see what it looks like. If you learn better by reading, read Sound Retirement Planning, my book. I’ve been down this journey a lot of times. If you’re a listener plug into the podcast and radio show. We’re bringing experts on from all over the country to help people have more confidence and a better plan as they’re preparing for retirement. Those are really the three big ones, listen, watch and read, and find the method that works best for you.
Emilia: That’s great. You shared a little but you were going, leading to my next question was, but how has this career impacted your life overall? Because it sounds like-
Jason: It’s changed my life.
Emilia: You have a passion for it, it’s definitely great.
Jason: It’s totally changed my life. I feel so blessed and so honored that I get to have these conversations with people. Again, they share stuff with me that they don’t share with anybody else. It’s very intimate. It’s very meaningful, and it’s very important work. To be able to have this walk with people, and to be able to learn from them. I think I’m good at what I do because I’m doing this all day long. I compare it to, if you go to a doctor and all he does is knee surgery, and he’s doing nine knees surgeries a day, boy, he’s going to be really good at knee surgery.
Now if you go to see him, that same knee surgeon, for a heart surgery, probably not the right guy to be talking with, right? He’s working on knees all day, it’s not hearts. I think being laser focused on this topic of retirement gives me a unique perspective. But it’s also allowed me to peek out into the future and to see what it’s like to have a marriage that’s lasted 40 or 50 years, and to see how families work and the legacy that people get to create and what they’re building their lives around. I get to hear what’s most important to them and I get to hear their testimonies. It’s such an encouragement to me when somebody comes in and they tell me that you can’t out give God. They share their testimony about tithing and how God showed up right at the moment where they thought they weren’t going to have money to be able to pay the bills, and then all of a sudden a check appears in the mail.
It literally gives me goosebumps and brings tears to my eyes because I enjoy this work so much. I feel that, not only that but the mentors that have come into my life, people like Dean. I guess maybe as I’m thinking about this, we’re coming up on Thanksgiving, and I am very grateful. I’m very grateful for a lot of different reasons. I’m grateful for the opportunity to have a podcast. This allows me to have some creativity in my life. I know that the work that we’re doing, I know that people are listening and I know that it’s changing their lives as a result. I love the comments that we get and the reviews that people leave. It’s really a lot of fun. Emilia, I just realized though, I kind of rattled on. We’re out of time.
Emilia: No problem.
Jason: Thank you for joining us this morning.
Emilia: Thank you.
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 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 subjected to the claims paying ability of the company. Investing involves risks. Jason Parker is the president of Parker Financial, an independent fee-based wealth management firm located at 9057 Washington Avenue North West, Silverdale, Washington. For addition information call 1-800-514-5046, or visit us online at soundretirementplanning.com.
