Jason interviews Roger Whitney about his new book, Rock Retirement.

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 conversation 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 rogerwhitney.com.

Roger has gifted 10 free copies of Rock Retirement to our listeners.  Roger will randomly select the 10 listeners from those who sign up by visiting rogerwhitney.com/soundretirement.

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. 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. As you know, we’re always looking to bring experts onto this program who we believe can add significant meaningful value to your financial life as you’re making this transition into and through retirement. It’s my good fortune I’m going to be bringing on a guest here, in just a minute I’ll tell you about him. But before we get started, we like to start the morning right two ways. We do that by first renewing our mind. I’ll tell you the story behind this particular verse, the reason I’m sharing it with you this morning, is one of my hobbies is jogging. I jog about 60 miles a month, is what I’m averaging right now. Usually about four miles in the morning, but the other morning I was trying to get my best record, I was trying to break an eight minute mile, and this is not an eight minute mile on a track or a treadmill, this is an eight minute mile with hills, in fact most of the time it feels like hills all the time.

But I was listening to my bible app and this was the verse that came on, and it just gave me the inspiration to really run hard right in the last little bit. It’s Hebrews 12:1, “Therefore, since we are surrounded by such a great cloud of witnesses, let us throw off everything that hinders and the sin that so easily entangles, and let us run with perseverance the race marked out for us. Fixing our eyes on Jesus, the pioneer and perfecter of faith.” That’s what came on, the last two minutes of my run, that verse started to play in my ears, and gave me a little motivation to run a little bit faster. I’ve had Amelia here the last couple weeks, but she’s not here to share a joke, I’ve got a joke, but actually let me bring our guest on and then I’ll share the joke cause I know he’s gonna enjoy this one.

Today you’re listening to episode one hundred and fifty-nine, it is my good fortune to be bringing Roger, the retirement answer man, from the Podcast Retirement Answer Man, back on the program. He’s a certified financial planner. We’re going to be talking about his new book, Roger, welcome back to Sound Retirement Radio.

Roger: Hey man, what’s the difference between jogging and running?

 Jason: Running is when you after about five minutes you finally turn around and say “okay lady, you can have your purse back.” Jogging is; …

Roger: That’s pretty [inaudible 00:02:38]

Jason: That was not the joke for this morning, but I used to like that one when I was back in high school. I’m more of a jogger, but what about you, Roger? Do you like to run?

Roger: I loved to run, until my knees went out. So now I’m a cyclist, which I love just as much.

 Jason: Okay. Hey, Roger I’ve got a joke here for you. What kind of nut has no shell?

Roger: What?

 Jason: A doughnut. Hey man, it’s only going to get better from here, trust me.

Roger: That is a groan laugh. That is a groan laugh.

Jason: Roger, this is episode 159, your new book I had the opportunity to get an advance copy, or one of the first ones that came out because you and I hooked up, we saw each other at one of these conferences that we like to attend. I got to read through “Rock Retirement” so I’m excited to get into that. I want to start asking you, regarding the book, why’d you write “Rock Retirement”?

Roger: It puts into words a lot of the concepts that I talk about and practice every day. Part of it came from reading a lot of retirement books. Absent yours, I read yours, but absent yours, most retirement books I read are all very technical. I saw very knowledge based books but very few that spoke to the wisdom of life decisions as it surrounds money. So that was a big reason, because I think if we get caught up in the technical stuff too much, we can miss the whole purpose of it all, which is having a great life.

 Jason: I know I love that. One of the things I hear you say frequently is “Don’t miss out on the best life you have, which is the one that you’re living right now”. I always appreciate that. One of the things you talk about are the little conversations about money. What are some of the most important little conversations you’ve been able to help facilitate with people as they’ve been on this journey?

Roger: A lot of the little conversations go around refocusing people on things they actually have a fair amount of control over. Which is lifestyle choices, cash flow choices, and how they allocate their assets. What happens many times is, when we think of retirement planning we automatically go to investments and how should we invest, how much we should invest? We start to make it an investment equation rather than on other things that we have a lot more control over.

So, the major little conversations I have are, okay, so where do we want to be one-two years from now? What are specific things we can actually do right now to take a little baby step to walk that direction? Many times I think we miss that and we focus on these bigger issues that get caught up in the news.

 Jason: How would you say ’cause you’re a certified financial planner, and you’ve been helping people for a long time on this path into and through retirement, how would you say your approach has changed over time to helping people on this journey?

Roger: I think I’ve been classically trained as a financial planner, and I taught the retirement planning curriculum for the CFP in our area. I think the way it’s changed for me and the way it’s changing for many of us, I’d definitely include you in this camp, is that most everybody focuses on it like a math problem. Like, “When do you wanna retire? What do you wanna live on? What do you have right now?” Then we just figure out where the gap is and then we make it all about saving and then investing. Our life is much more than a math problem. If we stick with the old ways of just thinking about it as a math problem and an investing problem, what ends up happening is now the math doesn’t work. Because we’re gonna live a lot longer than any other generation, we’re gonna be more active later in life than any other generation, and a lot of times, we’re gonna spend a lot more money later in life than any other generation.

So, sticking to the old structure of dealing with retirement is gonna basically give us a lot of really bad choices because the math is so skewed because of how life has changed. It’s less about figuring it all out and creating this huge plan and what I think to be successful at retirement planning or any kind of planning in general is you need to think about it as change management rather than building some big plan up front that’s gonna have it all figured out. It’s about how do you manage to change as your life unfolds.

 Jason: On that though, on that topic, and I tend to be probably too technical most of the time, I mean it’s just the way my brain works, I know I’ve worked with a lot of engineers over the time, we tend to hit it off because they’re thinking numbers, and I’m thinking numbers. So, how do you help people achieve confidence to make that transition into retirement if you’re not having a discussion around numbers?

Roger: You have to have numbers in there, so I’m not saying avoid the numbers. It’s most about making the most intelligent decisions you can right now and having some framework in place so that as life unfolds and everything changes, you identify the changes quickly, and you make little adjustments along the way. That’s the whole point of a little conversation. What ends up happening if we think of retirement planning or financial planning as a thing rather than a process, and I see this all the time. We build these huge documents that are hundreds of pages long, most of it disclaimers or disclosures, and people feel like they have it down. It doesn’t mean anything to them so they just put it on a shelf and they say “Okay, check the box I’m okay”. With successful planning is, sure you gotta do the numbers, you gotta make sure you’re not headed towards a cliff, but then you better have a mechanism to readjust frequently on the way. So as the situation changes, whether that’s in the markets, or your spending, or your life, that you make course corrections to make the best of the current situation.

It’s hard to do. That’s why we have to be engaged in the process rather than make it as difficult on the front end, because a lot of financial planning isn’t that exciting the way it’s typically done.

Jason: Not exciting, no, in fact gosh I can’t remember who said that investing, when it comes to the investing side of your life, investing should be boring. Bitcoin, boy that’s exciting, but that is not investing. That’s speculation, that’s just kind of wild, the wild west.

Roger, you made a really attractive offer, before we got on the program today. I looked at Amazon and your book has over 90 reviews now and ‘Rock Retirement’, all of them I think, were four or five star reviews. I didn’t see anybody that really gave you a bad review on there. But you had said you would make a couple of copies of your book available for our listeners, will you tell them how they can get a free copy of your book?

Roger: Yeah definitely, you can get a free copy of the book, I’m giving away 10 books free to your listeners including shipping and everything. All you have to do is go to Rogerwhitney.com/soundretirement and enter your email and we will select 10 people at random and get your information and send out a free hard copy of the book.

Jason: Awesome, thank you. Thank you for that gift for our listeners. So, again folks, Rogerwhitney.com/soundretirement and he will pick, I guess you’re just gonna randomly pick 10 people that sign up, is that what you’re gonna do?

Roger: Correct, correct.

Jason: Okay.

Roger: A little secret, I’ll give you a little secret, a little hack, is right now if anybody buys the Kindle or the Nook version, which is a lot cheaper than the hardcover when it comes out, and leaves a review and emails me the review, I’ll send them a free paperback copy of the book.

 Jason: Oh, that’s nice.

Roger: Just for buying it, and the book review. What I did Jason is one … The book is about the message. You don’t make money on books, which is fine, it’s more about the message and my deal with the publisher was they sent me about 2,000 books, to my house. My goal is to give away those 2,000 books.

Jason: Yeah, you gotta have a place to park your car.

Roger: I could maybe put them upstairs.

Jason: I wanna ask you about investing because this past week has been somewhat crazy for people out there, especially if they’re getting ready to retire. We had a Friday where the market was down over 600 points and then a Monday where it was down nearly 1,200 points. Then the next day it’s up 600 points and then today it’s up 300 points. There’s a lot of volatility back in the market. If somebody’s just getting ready to retire, what kind of adjustments should they be making, what should they be thinking about in terms of stock market volatility?

Roger: This is a really critical point Jason, so I’m glad you brought this up. Because when you’re getting close and entering retirement there are a lot of different changes going on, many that we don’t realize just on the surface. But from an investment standpoint it can be critical. So when you’re getting ready to retire, that means your earning years are going to decrease or stop, which means all your savings is likely going to stop or decrease significantly. You may actually be drawing money out of your accounts, which changes the dynamic of how you invest. So traditional investing does this thing of getting what your risk tolerance is and then designing a portfolio to match your risk tolerance. There’s a big problem with that, and that is what your risk tolerance is has nothing to do with how much risk you actually need to take to achieve your goals.

Now you need to know what your goals are and go through a process to find out what’s the minimum effect of dose of risk from an investment perspective, to position me for success in the life that I want. Whereas most people in the finance world don’t think of it that way, they have you do a risk tolerance questionnaire and says, based on these 10 questions you can tolerate this much risk, and then we develop a portfolio to potentially maximize returns for that given level of risk. Regardless of whether you even really need the risk or not. That is the standard practice, so let me say that another way, and I don’t know if this works or not but it might get the point across. Tolerance and what you desire for your goals are very different. I’ve seen you Jason, you’re a pretty fit guy, I might be able to tolerate you punching me in the face maybe three times, right? Just because I can tolerate that doesn’t mean I want to position myself for that to actually happen.

Jason: I like that.

Roger: So when you are near retirement, it’s in my opinion, very critical that you have some clue of what’s the minimum effect of dose of investment risk I need to position myself for success. That may be a lot lower than what you necessarily can tolerate, because we’ve seen some of the studies that when you have market down turns early in retirement, because you’re possibly withdrawing numbers. Because you’re still at the long end of your life expectancy etc., and you’re not contributing to it, that can really handicap the entire plan. So I think that’s very important thing to think about early in retirement.

 Jason: From a retirement cash flow standpoint in our industry there’s a couple of different methods that are taught for how to diversify. Some use a total return approach and then they’ll take maybe like a three or four percent withdraw rate from an investment portfolio. Some people like a filarian approach, where they figure out what their expenses are and then buy an annuity to get them up to whatever their basic needs are. Some people like the idea of diversifying across time using different buckets or laddering their money. You’ve had the opportunity to see all this, you’ve taught some of these concepts through the financial planning work that you do, what is your preferred method? As you’re helping people figure out the best way to take withdrawals from the money they’ve saved, what do you think makes the most sense?

Roger: What makes the most sense hopefully is the one that I use, at least makes the most sense for me. I think the key is first is, have a process that you execute diligently, that helps a lot. Many people have a process but then they keep switching what their one process is. I use, I’ll guess we’ll call it the bucket approach, so generally when somebody’s taking money out of their investment assets what we do is we build firewalls of two years cash reserves of the monies that we’re expected to take out of assets. Then one year as for those basic needs in life and in retirement, and then one year reserves of the extra ordinary things that are going to be taking out. So we like to do needs, wants and wishes, so those basic needs, the things that we know we need to keep the life going. We have two years reserves of that, one year reserves of the spice of life, trips, the extras. Then we’re constantly managing those buckets and that allows the actual investment assets to be longer term orientated.

Then with the investment assets during retirement we definitely like to have a little bit more income skew, so we have a little bit of that wind at our back. We stop reinvesting in post-tax accounts, so we can have that natural flow of money coming in. Then when we review net worth statements we are constantly managing how much we should have as cash reserves. The reason that works well, at least for me I think it works well, is we’re about managing change. So it gives us a lot of flexibility to dial those numbers based on what’s going on in the world and in the client’s life.

Jason: Boy, that’s really good. Roger with the tax law change that just occurred, do you think this is going to be a positive, neutral or negative for most people?

Roger: You know actually I have no idea. Haven’t really dug into it that deeply. I plan to, but I haven’t done any planning on it.

 Jason: It’s pretty new.

Roger: Yeah, I don’t really have a major opinion one way or the other on it.

Jason: Okay. Folks if you’re just tuning in, I’ve got Roger on the program, he is known as Retirement Answer Man. He’s got a podcast on iTunes that is a really wonderful podcast, I highly encourage you to check it out if you haven’t already. He’s got a new book out called ‘Rock Retirement’ and he is going to give away 10 free copies of that book. Roger one more time, how can our listeners get a free copy, where do they go for that?

Roger: Yeah, Rogerwhitney.com/soundretirement

Jason: Rogerwhitney.com/soundretirement

Roger what’s the most important thing, if you had to boil your book down to just one primary thing you wanted people to take away from it, what’s that most important thing that they get from reading your book?

Roger: Success is about having very intentional little conversations over and over about the right things. It’s not about figuring it all out and it’s about managing change and being intentional, rather than focusing on this big concept of creating a plan and then feeling comfortable. Because we’re never going to be, we’re never going to have certainty about anything. But we can be intentional about managing through the crazy world and the crazy life that we live.

Jason: I like that, you know we’ve got some people that are probably driving down the road this morning in Seattle that have never heard about you or the work that you’re doing. They may be on the younger side, maybe they’re 30, 40 years old, and still quite a ways out from retirement. One of the things you talk about is build the life that you never want to retire from. Will you talk a little bit more about what you mean by that?

Roger: See I think that’s sort of funny because even when you have people that are, like I work with clients only over 50, so that’s baby boomers and they generally have hitched their wagon to the concept of retirement. What I’ve found is, and I think this is a lesson for people that are younger, is that so when they were young, like when I was young, it was you get a job, you work, you try to save up a ton of money so you can be happy and retire later on and then really live your life. Which forces a lot of weird kind of decisions right? It forces working harder, spending less, maybe taking more investment risk, burning the midnight oil. Well what I see, and I don’t know about you Jason, but what I see almost every day is people retiring because they really want to get out of the rat race. They’re just tired of the rat race, but when you really dig deeper they don’t want to not work, they just want more time freedom and flexibility to pursue things they enjoy.

Many of them after a little honeymoon go back to working, but more on their own terms, for a lot less money because they enjoy it, and a lot of times it’s not what they were doing as a career, it’s something they actually enjoy and have a passion for. So I don’t like the word retirement but the lesson for the younger people is if you stop trying to think about what your financial number is, and stop thinking of the concept of retirement. Rather than have it be this huge trek up a mountain of savings and work and sacrifice to be happy, if you reject that and say no, I want to find some balance and have it be more of a trek. Where I can have some freedom and enjoy some things right now knowing that I’m still being a good steward for the future. I think that gives you a huge opportunity.

Jason: Yeah, I like that. To build the life that you never want to retire from. Fortunately you and I we both love the work we do, and so I think you and I we’re in that position. I mean it’s quite possible that I will never retire at this point in my life, just because I love the work that I do. I think I’d get bored. Roger in 30 seconds if you could rewind the clock 20 years, is there anything you would do different in your financial life?

Roger: Wow, 20 years ago I would have avoided lifestyle creep in my 20’s. I would have avoided allowing my lifestyle to creep up as my income creeped up. It’s a very easy thing to let happen.

Jason: Lifestyle creep meaning that you kept upgrading the house, and the car and expenses as your income increased?

Roger: Exactly, and even it’s a very easy thing to do, and it happens in little cuts, not all at once necessarily.

Jason: With that Roger we’re out of time, thank you for being a guest on Sound Retirement Radio.

Roger: Jason thanks, I love your show man.

Jason: Alright thanks, take care.

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 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, Northwest, Silverdale, Washington. For additional information call 1-800-514-5046 or visit us online at soundretirementplanning.com