In today’s episode, Jason welcomes Tim Tenbrink, CFP®, financial planner at Parker Financial, for a conversation about some of the most common concerns facing people as they prepare for retirement. From navigating stock market volatility to estate planning and everything in between, they share practical insights drawn from real conversations with retirees and those nearing retirement. Enjoy this episode of Sound Retirement Planning.

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Transcript:

474 – Real World Client Concerns

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 Parker: America, so glad to have you tuning in to this episode number 474.

The title is Real World Client Concerns. Today, we’re introducing a new segment to the podcast, and from time to time, instead of doing a deep dive into a single retirement topic, I’m gonna sit down with Tim Tenbrink and simply have a conversation about the questions, concerns, and decisions that we’re helping people work through every day.

Tim is a certified financial planner professional here at Parker Financial, and together, we spend our weeks meeting with people who are preparing for retirement, transitioning into retirement, and navigating the many financial decisions that come up at this stage of life. While I enjoy producing in-depth episodes focused on specific topics, some of the most valuable conversations happen behind closed doors in client meetings.

Questions about social security and taxes, investment risk, spending confidence, legacy and estate planning, and the unexpected surprises that retirement can bring. Our hope is that by sharing these conversations, you’ll hear challenges that resonate with your own situation and gain practical insights that you can apply to your retirement journey.

So before we jump into today’s discussion, let’s take a moment to renew our minds with a verse from Matthew 18:12: “What do you think? If a man owns a hundred sheep and one of them wanders away, will he not leave the 99 on the hills and go and look for the one that wandered off?” I don’t know about you, but I am so grateful that we serve a savior who pursues us personally.

No matter how far we’ve wandered, how discouraged we may feel, or how broken life seems at times, Jesus doesn’t forget us. He seeks us out, calls us by name, and invites us into a relationship with him. And before we get started, here are a few jokes that you can share with your family and friends just to remind them how questionable your sense of humor really is.

My financial advisor told me to put something away for a rainy day, so I bought an umbrella. Why can’t you trust a burrito? Because they tend to spill the beans.

Okay, without any further ado, let me introduce you to Tim Tenbrink, certified financial planner, and we’ll have some conversations about real-world financial planning, retirement planning questions people have. And in today’s show, what we really wanna do is just have a conversation, a conversation with you, a conversation with one another, but a conversation so that you can hear some of the concerns that we’re hearing from people as we’re doing real-life financial planning, real-life advising with people as they’re making this transition into and through retirement.

Tim, welcome back as a guest to Sound Retirement Radio.

Tim Tenbrink: Thanks, Jason. Looking forward to spend some time with you.

Jason Parker: Oh, I’m so glad to have you on the show. Um, the first thing I wanted to talk about, well, you know, as we, as we frame this particular conversation, y- a lot of the people that we work with are making a transition from the accumulation phase of life to the distribution phase of life.

As you think about that transition, what are some of the conversations you have with people about making a transition from the accumulation to the distribution phase of life? How is that different? How… What, what are the concerns or questions you hear people coming up with?

Tim Tenbrink: Well, Jason, definitely as people begin to approach that huge transition of retirement, they’re thinking, “Okay, I’ve been saving for decades, now I’m one year, two years, maybe even three years out from retirement.”

S- uh, o- once that date has set, the client has said, “Okay, I’m officially retiring on this date,” then the natural question becomes, should I change my investments? Should we be transitioning now knowing that, okay, I’m gonna enter this new phase of decumulation, of spending down, and so does that impact how I’m currently allocated with, with my investments?

And that certainly is something that we’re talking with clients, um, as they approach, and they wanna know, okay, when is the time for me to shift those investments? And usually talking about dial- dialing them back and saying, “I’ve been invested more aggressively ’cause I had a longer time horizon. That’s all changing here now that I’ve got that date set.”

So then the question becomes, okay, what changes should be made? How should we be allocated? And that’s a great question, one that’s not always a simple answer, as you know. Um, one that takes some planning, it takes some forethought, it takes considering the individual client’s cash flow, narrowing down what, what needs to shift to prepare them for those early retirement days from an investment standpoint.

But as we’re talking about our, you know, primary topic today, that’s not just a one-size-fits-all, or we’ve gotta be thinking long-term as well. Yeah. Um, yes, you know, the, the client, as we’re speaking with them, they’re thinking, “I wanna, I wanna think about year one of retirement,” okay? Two years I’m done working, my income changes.

But from a financial planning standpoint, we’ve gotta be thinking about, well, what about year 21 or maybe even year 31?

Jason Parker: Yeah,

Tim Tenbrink: yeah. Um, as pe- as people are living longer, you know, the, the statistics say a average couple that’s 65, there’s a greater than 50% chance that one of them is gonna live into their 90s.

So thinking about that longevity, yes, we need to make an adjustment to the overall investment strategy, thinking about distributions coming, but it can’t be a, “Okay, we’ve reached that final point. Now we’re done. Let’s just get safe with all of the investments.” It really takes some intentional planning.

Jason Parker: Yeah, and you can’t be too safe because inflation’s gonna eat your lunch if you try to just put all of your mon- money in a coffee can in the backyard. That’s not gonna work. So it really is a balancing act. I… One of the things I love about the work we do, Tim, you know, years ago, almost 10 years ago now, we started developing proprietary software that only our advisors have access to that help people develop a really comprehensive retirement plan.

It answers a lot of questions because our software specifically is designed for people making the transition into and through retirement. When you sit with people, because there’s a lot of uncertainty, you know, I, I think the, the concern a lot of people have is, “Am I gonna run out of money in retirement?

Have we actually saved enough? Is this gonna work?” And then when we can sit down and we can create that clarity for them around what the numbers look like with conservative assumptions, and they can see it, w- what’s been your experience with people in that second meeting when they’re starting to see everything come together?

Tell m- tell me about what, what that feels like to sit with people through that type of planning.

Tim Tenbrink: Well, one thing that is– I, I’ve learned through my several years of experience of meeting with folks that are going through that transition of retirement is that people are not spreadsheets. Mm-hmm. And, uh, I, I think when you look at a cash flow plan, when you think about distributions from your retirement accounts, um, you know, common sense is you’ve been on this plan where you’ve been contributing every paycheck.

You know, the way that you got to where you are is through just consistent putting money into those accounts over a period of probably several decades. And common sense would say, “Well, what if we just do the opposite of that?” And that’s you take even distributions throughout the course of your retirement, and you start from day one, and you just a-adjust for inflation, and it’s, it’s mathematical.

It’s your money’s gonna last this long. But what I know is, and what you know is that it just doesn’t go that way. People decide to go for special trips on their fortieth anniversary, or you gotta replace a roof ’cause your house hit twenty years old, and it doesn’t just… You know, and, and I guess the traditional wisdom would be that four percent rule.

It’s just, okay, just take the same amount, adjust for inflation. But it’s far more dynamic than that. So when I think about something like, you know, the tool that we have, it gives us a chance to map out far more detail what maybe some of those individual expenses will be to have a better cash flow plan So that that way that distribution’s gonna be impacted maybe three years down the road, you’ve got this big expense coming up.

Instead of just, you know, set and forget on a specific schedule, ’cause people’s lives and their retirement spending doesn’t go on a schedule.

Jason Parker: Yeah.

Tim Tenbrink: Um, things come up, people decide to do things, and that’s why, you know, as financial planners, we’ve gotta meet with people, we’ve gotta stay in touch because their plan is cont- continually changing.

The markets change, their spending changes. So, um, ha- having a detailed plan that’s gonna incorporate those changes as they come is what’s crucial.

Jason Parker: I love that.

Tim Tenbrink: Having

Jason Parker: flexibility. Yeah. It’s… And it’s not just having the plan the first time and being done saying, “Okay, we can do this.” It’s being able to constantly check in with the plan and say, “Oh, we’re still on track.”

Because there are gonna come times, and y- you figure we’ve gotta be planning for at least a 30-year retirement, right? I mean, if somebody retires at 60, there’s a good chance they’re gonna make it to 90. So we have to plan it for at least 30 years. Oftentimes we’ll stress test a plan and say, what happens if they make it all the way to age 100?

When bad things happen in the world, in your family, in the economy, in your investments, and there’s something… It’s the chances of something significant happening, um, financially over a 30-year time period’s pretty high. And so when you have a plan that you can come back to that says, “Oh, I’m, I’m still okay, even with all this craziness going on,” that, I think, helps people stay the course.

And I’m reminded that it’s not what the stock market does that’s gonna have an impact on people’s lives as much as it is how people respond or to what happens in the stock market. It’s usually people’s fear about what’s about to happen. And it brings me to my next subject or topic. Something that I’ve been hearing a lot from people recently has been, um, concerns about volatility.

People are hearing reports, mostly on social media, YouTube, that, um, there are different indicators suggesting that the stock market’s overvalued and we’re on the cusp of a major meltdown. Can you speak to that concern and how we help people navigate this constant barrage of negative news? Because frankly, Tim, in the last 20 years, I’ve, I’ve been hearing the same concern from people every year for the last 20 years.

So it’s not something new, but people feel like it’s something new. So what are your thoughts when you hear people talking about the bad news bearers that are always pointing to things that are about to happen?

Tim Tenbrink: Well, we do have to live in the reality of There’s always the potential as an investor that there’s gonna be some negative returns.

You know, I wish for our clients we could just give them assurance, “You’re never once gonna have a negative return,” but that’s just not the way it works. And when you’re an investor, that comes with the territory, and so you’ve gotta be, in a sense, prepared for that. Now, there’s a lot of noise out there and, and certainly just I think being a successful investor at whatever stage you’re at, you’ve gotta tune out that noise.

You’ve gotta understand that you are not investing for the short term, you’re investing for the long term. There, there is no such thing as short-term success when, when it comes to investing. You’ve gotta be in it for the long haul and have a good strategy that will work over time. Um, otherwise you’re just speculating and, and gambling with your money.

For someone who’s getting ready to retire that’s maybe in their 60s and we’re thinking about a 30-year time span, we also have to live in the reality as well that over 30 years you’re probably gonna have to navigate some bear markets.

Jason Parker: Mm-hmm.

Tim Tenbrink: That’s just, that’s just gonna be the reality. Now, hopefully it’s not, you know, right when you get started and it kills your confidence, and certainly as we are dealing with folks, that’s, that is the concern of, okay, what if I retire and I’ve got this new transition, all of a sudden, bam, I get, you know, hit with something like a, a recession?

And, and the, the reality is, is you are probably gonna have to navigate those steady waters. When I’m working with clients and I’m talking to them about that, I always bring them back to the, the soundness of a good investment plan, you know, and their financial plan We, we don’t use high rates of return in our planning for a reason, because we know there’s gonna be years of negative returns.

And so that’s built into the assumptions we’re using, and I always remind our clients of that, “Hey, this isn’t a surprise. We’ve known that there’s gonna be these troubled waters that you’re gonna have to navigate. That’s why we’ve planned the way that we plan. That’s why we hope for the best, but we plan for the worst.”

And so, um, that’s where we can give the client the confidence. But the key is, is that any investment plan requires you to stick with it. And so as people are thinking about volatility and they’re thinking maybe, “Okay, let me hit the eject button,” well, that is not gonna be what’s gonna help you w- navigate a 30-year retirement.

The reality is, is you’ve gotta keep, um, you’ve gotta keep invested. The same thing that got you here is the same thing that’s gonna get you through. And y- sometimes I think with clients, I’ll kind of remind them, “How did you get to where you’re at, th- where you had these savings of retirement? It wasn’t because you bailed in 2007 to 2009.

If you did, you wouldn’t have probably the retirement assets you do. And so, but you stayed with it and you made it through, and there’s no reason to think that that’s not gonna be the same in the future here. The success is in the longevity. Suc- success is in staying with your investment plan.” And so, you know, that’s, that’s part of conversing with clients and just keeping them on course, because the one thing that’s gonna ruin your fi- your retirement plan more than anything is if you bail when things get rough.

Jason Parker: Yeah. It’s how… It’s not what’s happening in the market, it’s what you think is gonna happen in the market, and then- Yeah … how you respond to that. And that is a psychological challenge. And so one of the ways that we try to help people navigate this is to say, “Look, time is the cure to the volatility of the stock market.

The more time you have, the more risk you can afford to take. Money you need in the short term, let’s have that money allocated more conservatively. Money you don’t need for a long period of time can be invested more aggressively.” And for a lot of people, that means it looks something like a bucket strategy or a barbell strategy, so that they know as they’re taking those portfolio withdrawals, especially in the first couple of years of retirement, that they’re doing it at a time they’re taking money out of those accounts that are less risky.

Now, not everybody needs that type of strategy. We recognize that when we meet with people. Some people have over-saved for retirement. There’s no reason to have low-risk money, or maybe they don’t, um, they’re not impacted negatively emotionally by the concerns of the market. But I think it’s just really important that you have a plan that you’re working from and you have an investment strategy that’s very well thought out and implemented and, like you said, that you stick with it in the good times and the bad times.

Because one… Some of the things I hear from people is they say, “Well, should we go to cash? Should we buy crypto? Should we buy gold?” All of those are fear-based ways to respond to what’s happening in the world. Um, you, you and I have talked before About Matthew 25 and the parable of the talents, and how there are consequences for making decisions based in fear.

You wanna talk to- for a minute about why we are so passionate about not letting the people we serve make decisions that are fear-based?

Tim Tenbrink: Well, when you panic, you don’t make good decisions. And so, um, that’s where you’re not, you’re not in the right frame of ma- mind to even make a good decision if you are panicked, if you’re stressed, if you’re, you know, s- biologically, you’re not, you’re not in a good place to think through that.

And one of the things I love about the work that we do is that people have us to call. And, um, you know, uh, I think an undervalued aspect of working with a good advisor is just the decision-making process that you have someone who knows what they’re doing, that cares about you, still has your best int- to talk through these turbulent times.

And, um, and, and I tend to… You know, it’s when times are tough that you’ve gotta fall back on your principles. This is what I re- like to refer to clients. Just like in life when, when you hit those storms, when you hit those rough waters, it’s your principles that carry you through. It’s, it’s sticking with those.

We’ve got good investment strategies, and, um, that’s a huge part of your retirement plan. And when you hit these turbulent market times, when there’s the volatility that was unexpected, that’s where knowing what those principles are and, and counting on them, believing in them Is what is gonna see you through those difficult times.

And, you know, in, in, in that case, when we’re talking just the tangibles of our investment philosophy, that’s diversification. You’re not putting all your eggs in one basket. That is possibly, you know, a bucket strategy where we’re, we’re addressing that short-term volatility, and we can say, “Hey, yeah, yeah, the market just, you know, going back to March when we had geopolitical things and the market hit a, hit a speed bump here in a sense.”

That’s where we can go back to those that just retired. If we’ve got a cash bucket, if we’ve put money in a s- in a safety buffer for them, that’s where we can say, “This is exactly why we’ve done this, and now you don’t need to worry.” And so, you know, having those principled items is what sees you through when the, the times are tough.

Jason Parker: Yeah. It’s the foundation that you’re building your plan on. The next thing I wanted to talk to you about is estate planning. This has become even more of a topic, especially for the people that we serve locally in Washington State. Um, each state has their own rules about what happens to your, to your assets when you die.

And in Washington State last year, we now have the highest estate tax in the entire country by percentage. So what happened was it used to be that the top tax rate was about 19%, and it was graduated, so you had a, a $2 million exclusion. $2 million of assets were not subject to the assets, and then anything over $2 million was subject to a 19% estate tax.

Last year, the legislature changed this, and now they give us a $3 million exclusion, but the top tax rate, it’s also still graduated, but the top tax rate is now 35%, the highest percentile in the entire country. Washington has become a very expensive place to die. And so people are asking, you know, “What are some of the strategies we should be thinking about as a result of this estate tax?”

Now, the federal estate tax, there’s an exemption there that’s o- over $15 million, um, per person. So most people aren’t going to be dealing with a federal estate tax. But now more people are gonna be dealing with a, a state, potentially a state estate tax. So as these concerns are coming up and we’re sitting down to talk to people about estate planning and coordinating with their attorney, what are some of the conversations you’re having around, uh, estate planning?

Tim Tenbrink: Yeah. Well, certainly we wanna start with just do you have an estate plan? You know, do you have the documents that are gonna be needed so that we’ve got a speedy and correct transfer of your assets to the people, the places that you want them to go? So that’s where we start with in just making sure do you have beneficiaries on your accounts?

Do you have- TOD on any brokerage accounts, POD on your cash accounts at your bank. Um, trying to find ways so that number one, your money’s not tied up in probate court, money’s eaten away by the cost of probate. So, you know, those are simple, easy… Those are free fixes that just take a little bit of time.

That doesn’t even require an attorney. Um, so that’s always good. You wanna review who’s gonna receive the money. Do we have these listed on the accounts? Um, and then, you know, when you’re talking about, um, the next step would be having a will, which is, you know, that’s what’s gonna tell you, that’s what’s gonna tell the probate court, “Here’s where those assets go.”

Having maybe a pour-over provision, ’cause there’s always gonna be those other items that maybe didn’t m- didn’t get allocated that you don’t know specifically where that piece of furniture or that heirloom’s gonna go. That’s where that, that’s gonna incorporate into that. Now, when we start to talk about, like you mentioned here, those that are maybe above that three million in Washington state of net worth where estate tax becomes an issue, that’s when it gets a little bit more complex.

That’s when a good attorney is gonna help maybe trying to understand, okay, are there some particular trust vehicles that, that can be utilized to move some of those assets out of your, your net worth and reduce that overall value of that estate? And, um, tr- trying to save some of those taxes. And that’s where that component becomes more important, having someone that is, uh, knowledgeable and an expert in that field.

And certainly for us as financial planners where we can come alongside of that is we know the financial assets you have. And so, you know, it’s understanding, okay, how can that be structured along with the attorney that says, “Okay, here’s the vehicle we wanna use. We know what assets you’ve got,” so then we can link those up and just make sure, again, that the transfers are gonna go where you want them to go in a timely manner.

Ideally, the most of that money’s gonna get where you want it to go to who you want it to go.

Jason Parker: Yeah. It’s really good. It’s really good. It has to be part of a comprehensive retirement plan, is not just thinking about how we’re gonna grow the money now, how we’re gonna use the money to create a, a retirement paycheck or income for you as you’re transitioning through a lifetime of income, but we also have to think about what’s gonna happen when you’re gone.

And by not having a plan, what you could be doing is unintentionally giving more money to the government, more money to taxes. Most people that we serve, I… when I talk with them, they say, “Jason, I don’t mind paying my fair share in taxes, but I don’t wanna pay more than my fair share in taxes.” And I think that’s what we’re trying to help people think through and accomplish, is how can you pay your fair share but not a penny more?

And I’m really loving this conversation. I love this new idea that you’ve come up with where you said, “Hey, Jason, let’s just have a conversation about some of the things we’re seeing with actual people that we’re serving, so that we can bring some of this collective wisdom to our audience so that they can have a better retirement.”

As we finish up today, um, is there anything else that you wanna say as, as we, uh, as we leave our audience?

Tim Tenbrink: Jason, I just wanna say, you know, I enjoy- The fact of getting to serve at Parker Financial and being able to help people is something that just is a, is a passionate purpose of mine. And so, you know, if you’re one of our clients that’s listening, hey, we appreciate you.

We’re thankful to work with you. If maybe you’re out there and you’re a listener getting ready to retire, hope you reach out to us and, um, you know, as you think about the, the challenges that come with retirement and making decisions about maybe relocating or facing the challenges of the markets, all of these things that, you know, we…

It’s our business that we do, but for an individual, this is new territory for them. We can be a help in any way. We wanna be able to do that and hope you reach out to us.

Jason Parker: That’s great. Awesome. Thanks, Tim. Thanks for being a guest today.

Tim Tenbrink: Thanks, Jason.

Announcer: Thank you for tuning in to Sound Retirement Radio. For articles, links, and resources from today’s show, visit soundretirementplanning.com.

If you enjoy the podcast, share it with a friend and give us a five-star review. Ready to kickstart your retirement planning? Head over to retirementbudgetcalculator.com. Need assistance with investment management? Explore our services at parker-financial.net. 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, LLC, an independent fee-based wealth management firm located at 9230 Bayshore Drive Northwest, Suite 201, Silverdale, Washington. For additional information, call 360-337-2701 or visit us online at soundretirementplanning.com.