fbpx

Retirement Is…

Retirement Is...

Originally aired 6/8/2021

Watch

If we asked you to finish this sentence: “Retirement is…” What would you say? For many people, the idea of retirement can bring up feelings of fear, dread, and uncertainty. On this episode of the Get Ready For The Future Show, we’re doing a little bit of “retirement therapy.”

You’ll learn:
– How to reshape your idea of retirement
– Straight talk about common retirement fears
– Valuable insight from LPL’s Chief Market Strategist Ryan Detrick

Downloadable Content:

What’s the Plan? A Manifesto for Your Life, Your Worth, and What Happens Next

Links:

LPL Research Blog

Listen

SHOW NOTES

“Okay, So How Does That Make You Feel?

  • If we asked you to finish this sentence: “Retirement is…” What would you say?
  • For many people, the idea of retirement can bring up feelings of fear, dread, and uncertainty. On today’s episode of the Get Ready For The Future Show, we’re doing a little bit of “retirement therapy” and helping you reshape your view of retirement.
  • If you’re worried about retirement, you’re not alone.
    • 44% of Americans worry they’ll never be able to retire—an all-time high.
  • Look, we get it. Retirement can be confusing. And the media and self-proclaimed “experts” turn fear-mongering into profit, all at the expense of your peace of mind about the future.
  • But what if we could re-shape your idea of retirement and give you a better perspective of the future?
    • That process starts with addressing the fears you have.
    • Education alleviates most fears. Some examples:
      • Haunted houses – If someone is in front of you and you see them scream and jump, then you know that something is about to happen. It’s not so bad then. Being educated about what is coming helps you to not be afraid.
      • Public speaking – If you are educated about how to present and how to overcome a negative mindset, you won’t fear public speaking as much, maybe not at all.
    • We’ve got some common retirement fears that we’re going to address, but if you have something you’d specifically like us to discuss, drop a comment and let us know!
  • Fear: Balances – How do you know how much money you need to retire?
    • Straight Talk: The key here is to understand that it’s not really about how much money you have in a lump sum. It’s about whether your income needs are met or not.
      • As an example, if you and your spouse have no debt, two Social Security checks, and two good pensions, it is highly likely that you don’t need a lot in terms of a lump sum to be invested for retirement. However, if you are lacking in terms of pension and/or Social Security income, you will need assets to create an income stream for you.
      • The short explanation is that it’s not about the balance that you have. It’s about your income. The question is two-fold:
        • Do you know how much income you need after taxes in retirement?
        • Do you know if you have that income need covered?
      • If you aren’t sure, all you need to do is call.
  • Fear: Investment Allocation – How do you know which investments to use?
    • Straight Talk: The question about knowing which investments to use starts well before retirement. With most people, it starts when they first start investing in their company retirement plan. Regardless of when it starts for you, we believe that the answer is education.
      • Large-cap, Mid-cap, Small-cap, Growth, Value, Bonds, International, Alternative investments
      • There may be a time and place for each of these in your investment lifetime, but how do you know what to use when? We believe that it’s important to work with an advisor over the course of your investment lifetime so that they can help guide you with your allocations.
      • Frankly, you may have thought to yourself that you don’t even know what all those investment types mean. That’s okay! Most people don’t know. Again, education is the antidote to fear.
  • Feeling secure about your future starts with how you see your future.
    • Get our free download with 10 ways to shift your perspective about planning!
    • It’s called What’s the Plan? A Manifesto for Your Life, Your Worth, and What Happens Next.
    • Visit click here for your free copy now.

INTERVIEW: Ryan Detrick, Chief Market Strategist at LPL Financial

  • Fear of market volatility is often one of the reasons people worry about retirement. Can you speak to that concern and what your experience has taught you?
  • So, we have gone beyond the “Sell in May and Go Away” period of time. Now, it seems we are in the middle of what some would call a “June Swoon”.  Your team points out in your latest blog that a weak June is not unexpected, correct?
  • As of Monday, the S&P was near an all-time high and your team is expecting the economic fundamentals to dominate market performance for the remainder of the year. What are those fundamentals looking like and how do they play in to your expectations for market performance?
  • LPL Research has developed a proprietary economic indicator called the “Beige Book Barometer” (We will call it BBB). Tell us about this tool and what it’s telling you about the current state of the economy:
  • After about 3 years of terrible performance, it looks like crude oil and related energy stocks are on a roll again. Is there enough momentum for these new highs to be sustained going forward?
  • We have talked before about the bond market and for your view for higher rates in the future. Remind our viewers and listeners about why bonds are still an essential part of their portfolios?
  • Some of our listeners follow the LPLResearch.com blog and they may have seen a new name at the helm of the research department. Tell us about Marc Zabicki and what he brings to the table?

“Can I Offer You Some Feedback?”

  • Fear: Social Security – Will it be gone when you retire?
    • Straight Talk: We believe Social Security will be around for future generations.
      • According to a Social Security Press Release dated April 22, 2019, the trust fund gained a year of solvency and doesn’t plan to be depleted until 2035.
        • Most people skip reading at that point thinking that the government will be broke, and the deposits would stop.
        • Projections for 2035 mean that there will be 80 % of the benefits still payable at that time, not
        • The Press Release states that “there would be sufficient income coming in to pay 80 percent of scheduled payments”.
      • By enacting small changes now, the government could keep Social Security solvent further than 2035. What are some of the possible changes?
        • Raising the full retirement age is the most thought of answer.
        • Increasing the amount of income subject to payroll taxes is another possibility.
        • Raising the amount of FICA tax coming out of wages and self-employment income could be considered.
      • No matter what action Congress decides to take or how close to the depletion date they run, we believe action will be taken.
      • With 1 in 6 Americans currently receiving Social Security benefits, there is a lot of voting power!
        • Congress does not want the backlash from 61 million beneficiaries served by the Social Security program.
  • Fear: Longevity – How do you know your money will last as long as you do?
    • Straight Talk: One of the greatest fears that people have about retirement is outliving their money. There are lots of points to understand and consider here, and it truly is a danger you need to be prepared for.
      • Do you know when the next bear market will be, how bad it will be, how long it will last, or how it will impact your retirement?
      • How can you be prepared to make your money last, regardless of what the market gives you?
      • Depending on your circumstances, your advisor will work with you to help you determine if you need guaranteed income for life.
      • However, even if you don’t need a guaranteed income stream, you will want to invest in such a way that you have a high probability of not outliving your money.
      • This fear ties in strongly with both the balance that you actually need to have for retirement and the investment allocation.
        • They are each critical elements to understand in your retirement planning.
  • Feeling secure about your future starts with how you see your future.
    • Get our free download with 10 ways to shift your perspective about planning!
    • It’s called What’s the Plan? A Manifesto for Your Life, Your Worth, and What Happens Next.
    • Click here to get your free copy.

What’s the Plan

  • The fact of the matter is, we could go on the air and talk until we’re blue in the face about common retirement fears and how to address them, but until you have a plan that addresses them for you personally, it won’t feel as impactful.
  • Reshaping your idea of retirement starts with saying “Retirement is… my choice!”
  • The GenWealth Ready to Retire Process:
    • Covers 7 Key Areas
      • Investment strategy
      • Social Security Maximization
      • Creating guaranteed income to meet your basic needs
      • Protect against inflation and providing for lifestyle income
      • Address long-term care needs
      • Reducing taxes during retirement
      • All documented in a written plan (on paper, on purpose)
    • All of the fears we talked about today are addressed through the Ready to Retire Process.
  • We get that the idea of creating a financial plan can be overwhelming, or intimidating. You worry that you don’t “know enough” about it to do it well. That you might even be “bad” at money.
    • This perceived shame holds people back from making better decisions. Fact is, you’re not expected to know anything. Because unless you’ve spent years studying the behavior of money, how would you know?
    • Being “good” at money isn’t knowing something you were never taught, but choosing a team you can trust to guide you through it.

FINAL THOUGHTS

    • Retirement is ____.
      • You decide what goes in that blank!
  •  
    • Education is the antidote to fear.
      • There are a lot of facets to retirement, and it can be confusing.
      • Whether you’re worried about Social Security, market volatility, running out of money, or investment allocation, education that is based in fact (not feeling) can help alleviate your fears.
  •  
    • Get our free download with 10 ways to shift your perspective about planning!
      • It’s called What’s the Plan? A Manifesto for Your Life, Your Worth, and What Happens Next.
      • Click here for your free copy now.