EP 101: The 3 Phases of Retirement Planning
The X's and O's
Hosted by Brent Pasqua, Matthew Theal, and Joshua Winterswyk of Evermont Wealth, the Retirement Plan Playbook podcast delves into investment strategies, retirement planning, and current events to help listeners develop a comprehensive retirement plan.
The episode opens with personal anecdotes from the hosts, before moving on to discuss the three phases of retirement planning in detail, including the preparation, transition, and enjoyment phases.
Additionally, the episode covers hot topics such as Dave and Buster's introducing digital betting, the Federal Reserve's decision to keep interest rates unchanged, and controversial aspects of Biden's capital gains tax proposal.
The hosts emphasize the importance of early preparation for retirement and provide insights into financial planning, investment decisions, and the balance between saving and spending in retirement.
00:52 Casual Conversations: Sleepless Nights and Family Life
02:21 Dave and Busters' New Digital Betting Service: A Game Changer?
06:08 Federal Reserve's Latest Moves and Market Reactions
08:27 Biden's Capital Gains Tax Proposal: A Potential Economic Impact
14:06 Navigating the Prepare Phase of Retirement Planning
25:05 Transitioning to Retirement: Strategies and Considerations
32:23 Enjoying Retirement: Planning for the Golden Years
38:30 Final Thoughts and Recommendations
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Transcript
Intro: Welcome to the Retirement Plan Playbook hosted by Brent Pasqua, Matthew Theal, and Joshua Winterswyk of Evermont Wealth. This podcast dives deep into investment strategies, retirement planning, and current events, equipping you with the insights needed to craft a robust retirement playbook adaptable to any political or economic climate.
Intro: Join Brent, Matthew, and Joshua as they guide you through the complexities of retirement planning. Offering expert advice. to tackle challenges and the later stages of your journey. It's time to build your optimal retirement playbook. Now let's dive into today's episode.
Brent: Welcome to the retirement plan
Brent: playbook. Hey guys, how you doing?
Matthew: I'm doing well. I'm a little sleepy I had a long night with the kids. So, you know, you're getting low energy Matt today you having young kids I mean, that's just normal though. Do you ever get like good quality sleep? No, usually like if I get to sleep till 6 a. m It's pretty nice without getting woken up.
Matthew: But yeah, my sleep's been poor for like two years
Joshua: I feel good. I'm feeling better.
Brent: Last week I was sick. But you're about to have another little one, and so you're going to be in that spot here in about a
Joshua: month or two. About six weeks, yeah. I'm going back into the caring for an infant and not sleeping.
Joshua: Yeah, better take advantage of all the sleep I can get. Now,
Brent: those are hard days
Joshua: and our, our first one sleeps really well. Like we've been so lucky he sleeps. I mean, since like four or five months slept through the whole night, but you know, obviously there's been like little regressions here and there, but we've been really, really lucky with him.
Joshua: So. Maybe you'll be blessed with that with a second. Hopefully.
Brent: All right. So today's episode, we're going to be discussing the three phases of retirement planning. We're going to get into what those phases will look like. And we'll discuss in some detail with that. I'm your host, Brent Pasqua, founder of Evermont wealth, a financial advisor committed to helping people navigate through obviously a complex retirement planning and with us today is obviously Matthew Theal and Joshua Winterswyk.
Brent: Both certified financial planners here at Evermont. I heard, and I read some information about Dave and busters, the popular restaurant and inner chain entertainment chain. They're going to be introducing digital betting service for customers playing. Skilled based arcade games at their locations.
Brent: Like, what is this?
Matthew: I have no idea. I don't know what to make of this. This is a really cool story. So I thought we could talk about it for our warmup. First of all, Brent, are you going to take your kids? When you take them into Dave and Busters, you're going to be doing a
Brent: little side gambling. So am I gambling on my abilities to play arcade games?
Brent: Yes. I don't think that's my strong skillset. You could not go to that.
Brent: Are these the type of games that they're going to be betting on? Like skeeball? Yes.
Joshua: Is it the, is the basketball game available? What's that one called?
Matthew: I don't know, but I would imagine. Cause that's skill based right? Shooting hoops. Dude, this is, this could be really fun. Absolutely.
Joshua: And I think you can bet on other people, right?
Joshua: So like four people line up to go play. You can go bet on them.
Matthew: The only thing is, dude, they better get a lot of more security because this is going to cause some fights. Like, what if you're throwing the skeeball match?
Joshua: Oh yeah. This, this is well, the wagers are small though. You know, you're talking about, I think they're only ranging from five to 10.
Joshua: It's not big money.
Brent: So right now, when you play games at Dave and busters, you get tickets and in the ticket, you take those. Tickets and then you exchange them in the store, like not physical tickets. It's digital tickets now, but you exchange them in the store for little knickknack prizes that kids like.
Brent: So now it sounds like instead of maybe the stuff for the kids, if you want, there's maybe this gaming element or betting element where you could be playing for not tickets, but now you're playing for money. I think it's an addition
Joshua: to tickets though. Like the tickets aren't going away. Oh,
Brent: I,
Joshua: I don't see how they could, but yeah, yes.
Joshua: You, you can now bet it brings a different element of entertainment to ski ball, basketball, shootouts, and bill billiards.
Matthew: You're going to walk into Dave and busters and there's going to be a crowd of people around the ski ball table. And there's going to be like an 11 year old boy facing off against a 42 year old drunk man.
Matthew: And everyone's going to be cheering. It's going to be wild. So
Brent: we can't bet on sports like sport games in California legally, but we can now bet on players performances in games and we can bet arcade games in restaurants.
Joshua: I don't know. Is this available in California? I don't know. I don't think so. I don't think it's a California
Brent: thing.
Joshua: I think we're going to have to travel to go to this,
Matthew: but I would imagine though you know, most listeners. Of this podcast. No, how weird California rules are.
Brent: I would say it would make going to Dave and Buster's much more interesting. I'd be more inclined to go and take my kids. If I knew when I was playing, I could actually bet my performance.
Joshua: Yeah, absolutely. I think it's a, it's a cool idea. I mean, obviously there's cons to this, right? You know, introducing gambling into a somewhat of a family environment. But I think it's a cool idea for Dave and busters. And I'm interested to find out if it's actually going to be available in California, which I don't think it would be as California doesn't have any legal gambling.
Matthew: I mean, this is just where things are going, right? Gambling, gambling is taken over.
Joshua: Well, how many States is it now? That are, have approved sports betting.
Matthew: I don't know the States, but you know, watch a game and it's constantly all over the games with DraftKings, FanDuel, that's every, every
Joshua: sports channel has some sort of like betting segment now.
Joshua: Yeah.
Brent: Yeah. It's, it's moving in a different direction than I think it was where you would have to go to Vegas to do any gambling. I think now it feels like. It's becoming mainstream. Yeah, absolutely. All right. Let's get to the hot take headlines. The feds had a meeting, the federal reserve kept federal funds rate unchanged.
Brent: At 5. 25 percent to 5. 5 percent range fed will continue reducing securities holdings, but at a slower pace and inflation has eased, but remains too high. The further progress, not really assured at this point. What are your thoughts on what the feds are doing here?
Matthew: They, they kept it steady as is pretty good news for the stock market.
Matthew: The market was up the last couple of days since the fed meeting. The expectation was from a lot of people myself included was, you know, that they might put rate cuts back on the table since inflation has been so strong, but they didn't. And the market, the market liked the news, which is good. So stocks have been going higher since this news and bond rates have been coming down a little bit.
Matthew: So all good news from the fed.
Joshua: Just what I hear is there's no new major headline. It's just kind of stayed status quo. Yeah. No cuts. Good news. No change, nothing new. We're going to continue to monitor and review data as it comes in. And how did the market respond to that?
Matthew: It's been going up and the market's been going up.
Matthew: Yeah, there's been some data in the last few days since the meeting that's pointing to maybe a softening economy. So the market liked that news too, because you know, the fed says, Hey, the economy gets softer. We're going to, we're going to cut rates. So the feds itching to cut.
Joshua: It was interesting though, that there was the comment that.
Joshua: They will keep rates more elevated, even if it does slow growth.
Matthew: Yeah. Cause they got to get
Joshua: inflation down. Yeah, I know. But that's, you know, that's the kind of what I hear could be a hurt the, hurt the market and go the other way.
Matthew: It could, I like 5 percent rates. Don't you guys, it's fun getting
Brent: interest on my money.
Brent: But last meeting, they said that the economic data came out and it was strong and then the market went up. And then this time the market, the kind of economic data comes out and the market goes up with the economic data going down. So like, where is it finding its place here?
Matthew: Yeah. They call it a Fed put.
Matthew: The Fed's got your back, which means you've got the green light to invest in any circumstance, which is good. It probably means the market's going higher, which is what we've been saying for most of the year. Right?
Brent: All right, let's get to the next headline. Biden capital gains tax. He put out a proposal.
Brent: Some experts believe that this can really crush the economy. Tell us a little bit more about where these capital gains taxes could go, what the structure is around them.
Matthew: Yeah, this is a disaster. I'm not going to sugar coat this at all. So in Biden's budget, it hasn't got a lot of main street news coverage.
Matthew: But they're proposing a top long term capital gains in qualified and dividends rate of 44. 6%. For comparison, it's at 15 right now. This will destroy the economy and make it. So being in the investor class is not as good. They're trying to make it so Americans can't gain wealth anymore. And they're trying to take the wealth from the Americans who have gained it.
Brent: Yeah. So basically to simplify this. If you made 100 in profit off of a stock that you purchased, and you held it for longer than a year and a day, and then you sold it, you would pay 44 back in taxes. And you would only keep the other portion of that money. That's correct. That seems very difficult because you're taking a lot of risk when purchasing investments, right?
Brent: Like markets can go up or down. And when you win, you're going to take a big hit on the tax side. Exactly. Didn't they try to do this three years ago though?
Matthew: They have and this is you know, this is coming if Biden gets reelected. Like you said, they floated three years ago. They're not floating again.
Matthew: A portion of their voting base really likes this kind of stuff. You know, tax the wealthy. What they don't realize is taxes themselves because
Brent: it hurts them.
Matthew: Yeah, exactly. I think another big thing too, that is really going to hurt a lot of hardworking American families. They're going to eliminate the step up basis on inherited assets.
Matthew: So right now when you inherit money in the United States, you know, whether a house or portfolio of securities, you don't have to pay tax on it if it's below a certain threshold of money. They would also plan to eliminate that step up in basis. So you'll be paying taxes when you inherit money.
Matthew: That
Joshua: is a bigger event for the middle class than even the capital gains tax rate going up. Absolutely.
Brent: Yeah.
Joshua: We have so many clients that we see that, you know, really benefit from that step up in basis for inherited assets. That going away could change a lot of people's situations.
Matthew: Yeah. If you're an investor, if you want to be an investor one day, if you're trying to build up your net worth and you see the stock market as a good way to do it, or just starting a business, right?
Matthew: Cause this is also is for business owners to real estate, buying a house or buying a rental, you absolutely cannot be voting Democrat. With these proposed changes, because they're just going to take your money from you.
Brent: Now, why did this not go through the last time? Because if, from, if I remember correctly, like it didn't even get close from passing last time.
Brent: These are all just ideas that were floated out there and they never even came close. From my
Matthew: understanding, it was blocked by two senators who are no longer going to be in the Senate anymore. This will pass if Biden's elected.
Joshua: You don't know that for certain. Yeah, I don't. I don't. I think this is a little bit of you know, going along with the agenda as well.
Joshua: And it also doesn't mean that that rate that they propose is going to be the rate. And it also doesn't mean that where they. Cap the income threshold to go over into that higher rate that that's going to be the income threshold So i'll play the other side of this. I I really think this is the most extreme.
Joshua: Yes a case scenario but I don't I don't really see I mean like we talked about this will affect most of these politicians Correct. Most of them are now wealthy and over these thresholds not only even for income but for assets they have securities They have real estate. I I just don't see it in my eyes None of these politicians are going to want
Brent: No,
Joshua: no, I don't see, I think it goes along with that agenda of the Democrats and what they believe of taxing the more wealthy.
Joshua: But I, I don't see this being ultimately the way it was written up if it even does pass and he gets reelected.
Brent: Now, just a reminder, like none of this has to do with retirement accounts, like retirement accounts are already taxed. So 401ks IRAs, Roth IRAs, like this, these, some of these structures don't really pertain to that, but so many people have wealth outside of.
Brent: Just retirement accounts.
Joshua: Absolutely. So you're talking about brokerage accounts. We mentioned real estate Businesses and this is where that could affect
Matthew: they'll come for retirement accounts next we'll be sitting here in two years if this passes and that Will be the next thing we're talking about. I
Brent: think capital gains tax Percentages have been in place for I mean as long as I've been in the business.
Brent: Mm hmm. I don't think they've moved very much Now you're going from one extreme from one level to this massive extreme. I don't know I've never seen extremes like this pass. No, I haven't either you're talking about more than doubling the tax I mean, come on. Yeah, you can't take a risk in stocks like this.
Brent: It makes taking risk in stocks invaluable now It would kill the stock market
Joshua: Yeah. I mean, that's what you're going to potentially hurt is economic and investment growth by doing this as well. There's an indirect effect to this. Correct.
Matthew: That the Democrats don't care guys
Brent: when it's their money. They will.
Brent: I agree with that. All right, let's get in the retirement planning corner. Retirement planning is, is truly a journey. Everybody needs retirement planning. Everybody at some point in their life, unless you pass away unexpectedly, is most likely going to stop working. And when you stop working, you will stop collecting a paycheck.
Brent: And you will have to then live on a fixed income. You probably, most people only have two sources of real fixed income while they're working that they could build up. One is social security. One is potentially from a pension plan. Now I know there's real estate and there's other ways to create income, but we're talking about some of your fixed income sources.
Brent: It's usually generally social security pension. And so most people will have to potentially plan for a third, a quarter of a number of years of their life. Without making a paycheck without making new money, and they will have to live off of what they've saved and worked hard for that is challenging to do if you retire at 60 and you potentially could live till your mid eighties, you could live 25 30 potential years, 35 40 years.
Brent: Of your life without working and having to live off of what you saved. That is something that needs to be planned for. We here work with people on these different phases of retirement planning. You're either in one of these phases, you're either preparing, you're either transitioning, or you're in that enjoyment phase of being in retirement.
Brent: And so we'll break down some of these different phases. But if you're in that prepare phase, tell us a little bit more about some of the facts about preparing for retirement.
Matthew: Yeah. So I think of the prepare phase really, what I think about is, you know, you're pro you're in this stage for a long time. You probably started when you start working in your early twenties or thirties, and you're starting to save, you're starting to build those good habits.
Matthew: And then as you age, you get into your forties and your fifties, and you're probably starting to think a little bit more about retirement. This is typically when clients start reaching out to us. Late forties, early fifties, they're ready to work with an advisor that built up a big enough nest egg where an advisor can be beneficial not only from a planning standpoint, but from an investment management standpoint.
Matthew: And they're starting to think a little bit more about their goals, their lifestyle, what they want to do when they retire. Their kids are a little older, right? Probably getting ready to send them off to college. Maybe they got 10 or 15 years left in the workforce. They could kind of start to see the gulp, the finish line.
Matthew: And they need professional help to get there.
Brent: Yeah. This is a stage that my wife and I are at now where we put in obviously my 401k plan here at work, we're saving in our other retirement accounts or for retirement. And this is an important phase because the longer you're able to save for, and the earlier you start saving, the higher potential your money has.
Brent: To get to, especially when you start thinking about if I can grow to X amount of level by the time I'm 50, 55, then what can my money do for me in that last 10 years to catapult me into that transition?
Joshua: This phase, what I think of is. This phase could never start. And what you just said, Brent, too, it can never start too soon.
Joshua: I agree. I think the prepare phase starts the minute you start working. I mean, you're talking about, and it might not be that you're thinking of. Retirement, but it could be, you're thinking of financial freedom, right? And so preparing and preparing earlier is only going to propel you to have More financial success, financial freedom, get to retirement sooner or have a better retirement.
Joshua: So I know Matt, you had mentioned, you know, at forties, fifties, you start looking for an advisor, but in like my opinion, you should be talking to some sort of, or researching some sort of financial education. From the minute you start working, because there is no substitute in the preparation phase for time.
Matthew: That's a good point. So if someone's listening to this right now and I don't care who takes this question, Brent or Josh, and they're maybe in their mid forties and haven't really even started preparing yet, what, what should they do?
Brent: Well, to me, this is the organization phase, right? You should be getting everything organized.
Brent: And like you're saying, Josh, I don't care what age it's at. You should be financially organized. And to do that, like we're starting from just the basic levels, get your savings accounts in order. If you have money in a savings account, we want it hurting the highest potential interest rate. That's safe, secure, FDIC insured, that's liquid, that has a place and a purpose.
Brent: And then we can start working on debt reduction management. You know, reducing any amount of debt. And how do we get into the green? Because most people, so many times people come to us and say, just let's make an example, I have 10, 000 in debt. And I have 12, 000 in a savings account at the bank. That's not earning anything.
Brent: Well, you're clearly in the red because you're paying on your debt at 20, 25, 30%. You're making nothing on your cash. We want to get you in the green. So let's get things structured so that you're now making money. How are we going to get you in the green as quickly as possible?
Joshua: What I hear you say too, not to cut you off there, but.
Joshua: You have to have awareness for if you're 40 and you haven't even started planning The first step then is to really understand how much income you have and how much expenses are going out And most people can't answer that question You know, you know really what is that net cash flow out whether if it's positive negative or break even We have to find that out first However, we need to do that and that needs to be the very first step that you take
Brent: and it's It's challenging to find all that out.
Matthew: Absolutely Yeah. Most people don't know their net checks.
Joshua: Yeah. How can you plan if you don't know that though, right? It's really, really difficult to really set a plan and stick to it. If you can't visualize actually how much net cashflow you have,
Brent: people are in their routines and in their daily routines of life doing financial management is not part of people's daily routines and it gets lost.
Brent: It is just something that is just too difficult for a lot of people to think about. And a lot of people aren't given the tools or softwares to be able to do a lot of this stuff. That they're going to need to do it correctly. And so you could see why people fall behind and years go by and all of a sudden you aren't prepared.
Brent: You're going through the prepare stage and you're not prepared. And all of a sudden you hit a transition and you're not ready. Yeah, I mean, everyone can be guilty of this.
Joshua: It's very hard to do. Even as financial advisors, it's hard to stay on top of it.
Brent: I mean, let's just take something else you do in the prepare phase is if you're making contributions to your 401k, you better be darn sure that that money is going into the right investment strategies inside your 401k that's going to maximize their growth for you for when you retire, because you could be sitting in a low interest account in your 401k and all of a sudden you've been doing that for 10 years.
Brent: You didn't even realize it and you haven't made very much money at all. We see that often too.
Matthew: Yeah, we do that. I think target date funds have helped a lot there. Yeah. And some of the new rules coming on with 401ks where they just default you into a target date fund. So at least you'll have some stock market exposure instead of the people who, you know, how many people do you see are all stable value or all money market or pick the bond fund
Joshua: and target date funds are their risk is determined based off of your age and when you plan to retire.
Joshua: So they're more risky as you're younger and then they slowly get. As you get older.
Matthew: Yeah. Like if you're in your mid thirties, you're probably in a 2055 target date fund getting defaults in. If you're in your twenties, you're probably in a 2060.
Joshua: And that's definitely better than staying in stable value.
Joshua: Like Brent said for 15 years. Yeah.
Brent: So I was working with a client a little while ago and. She'd completed her taxes. She owed about 2, 500 to the feds and she owed on the state. And when we started working together, she was very adamant about contributing to her Roth because social media told her she needs to be contributing to her Roth.
Brent: So her money went into her Roth. She put this deposit in. And when I looked at her taxes, I said, can, let's go back and have this calculated. If you put this money into your IRA versus your Roth, what would your tax situation be like? Cause she did not want to part with that 2,
Matthew: 500.
Brent: We then calculated it out and she was then going to get 800 back on the fed.
Brent: She didn't owe the 2, 500. She's getting 800 back in the Fed money back from the state by switching from her money from a Roth to an IRA. Now I understand the benefits of a Roth. I understand the benefits of an IRA, but if you're doing about that, if you're thinking about keeping three, 4, 000 in your pocket.
Brent: Are you that worried about paying taxes now versus paying taxes later? I'd rather keep the money in my pocket if that's just me.
Joshua: Yeah. And especially if you were upset that you were having to pay, right? I mean, this solves a need right now. And if you're on a tight budget or it's break even, or you're have having trouble saving, that could actually even help you save better.
Joshua: Right. Cause you're, Effectively paying less in tax less is going out So it's helping your situation now Which a lot of people need especially with inflation being higher lately
Matthew: if you're under 60 the Roth IRA is the most overrated account You can have When you get into your 60s if you're retired the most underrated thing you could do is probably Roth conversions if your income slow Yeah,
Joshua: where Ross makes sense and I get it like Brent said I get frustrated because there's so much media hype around Roth IRAs But for the most part like if you're really young and your income's not that high like Fantastic.
Joshua: Go take advantage of that Roth IRA. But like we talked about on the Roth IRA versus IRA show that we did a few months ago, like in most cases that where we see where that income's high, you're getting a lot bigger benefit from contributing in the IRA, like branches mentioned, then you do the Roth.
Joshua: Absolutely. We, I mean, we
Brent: work with a ton of smart people, right? And most people don't understand cause and effect or how structurals work with traditional IRAs versus Roth IRAs, what the long term impact is going to be on their retirement plan by contributing to one or the other. You have to, to work, in my opinion, With an advisor to make sure that the decisions you're making are going to benefit you long term.
Matthew: Absolutely. All right. Let's transition to the transition phase. What happens in this?
Brent: That's great. Is this the stage you're at Matt? You're in your early sixties.
Joshua: This stage, you know, we, we spend a lot of our life preparing for retirement and transitioning can be very scary, right? You're going from a situation where you worked your whole life. Things were pretty much the same as far as, you know.
Joshua: You earning income and preparing for retirement and growing these retirement accounts or investment accounts and your net worth. And then all of a sudden, you know, that retirement date shows up and you're going to no longer work and rely on your fixed incomes and retirement accounts. And this phase is extremely important to basically Enjoying the rest of your life, which is that next face.
Matthew: So let's come maybe put an age on this This is probably early 60s, right when we really start thinking about transitioning.
Brent: I think it's dependent on people in financial situation I mean, I'm working with Several clients that are similar to my age, you know Let's call it mid 40s to late 40s who are now really starting to think about retirement at 55 A lot of people don't want to be married to their job for the rest of their life.
Brent: Even 65 can seem a little bit long. And I think partially because a lot of people are seeing family members pass away at younger ages. You're seeing a lot of cancer. You're seeing a lot of different issues with health. That people don't necessarily want to be stressed out until 65 and wait, but yes, I mean, typically historically we've seen that that early to mid sixties, but so many times we're seeing or late fifties,
Joshua: it even starts at 50.
Joshua: I'll give you an example. You know, I have police officer and firefighters who started at 20, right? And they're 30 years is up. And they're retiring at 50, 51, 52 years old. So, I mean, they're preparing at 45. Yeah. They're not going a year longer. No, not at all.
Matthew: Yeah. That that's their system. 55 retirement's really hard.
Matthew: It is hard. Very, very hard. You have to do a lot of advanced planning to make that successful.
Brent: Correct. Cause you have no social security or any income.
Matthew: You have no healthcare.
Brent: Yeah, and you, you've gotta really financially be ready for that. But it is possible,
Joshua: but I think that when we're like, speaking of the phases, it might not necessarily mean you're fully retiring to not work, but it could be what we call kind of semi-retirement where you might be working a different job or part-time.
Joshua: And we do see that a lot too.
Matthew: I find a lot of clients have trouble with this stage. I, I think it's probably more of a fear factor than anything else. Moving on telling the job. Hey, like this is it. I'm not coming back. Like March 1st is my last day You know, and I think they don't have the clarity of like what's gonna what it's gonna be like for March 2nd on
Joshua: It's all you've known right, you know,
Brent: I think this is the most valuable stage of planning to any individual I know that all three of them are extremely valuable I think this is the one that brings the most clarity to people.
Brent: What usually tends to happen, and we, we saw this recently with the client, they come in with a very, very murky understanding of what it's going to be like transitioning financially from work and having that paycheck to being on a fixed income. And then all of a sudden you gather all of this data from them, you build it into a plan into a software and you're able to start to see these projections.
Brent: And now what goes from somebody having not a real good idea of what that transition financially is going to look like to now being able to break, we're able to break down the factors. To get them retired and you, we spend meeting after meeting with them, going through the planning, going through the numbers, working on the detail.
Brent: And all of a sudden you see like this sigh of deep breath taken from them. And they're thinking now, I didn't think I was going to be able to retire for five, seven, eight years to, Hey, I can actually retire on two years, three years, whatever it may be. And now they're excited about, Hey, I'm going to finish out the last few years of my work.
Brent: And this is what my transition is going to be like.
Joshua: Yeah. Bringing that clarity is so valuable for a lot of people. Let's just say husband and wife have two W twos and that's the income, right? You get your paycheck each and. You know, you, it's pretty easy to calculate what's coming into the, to the household, but in retirement, what we're seeing is you might have social security pension, you know, IRA Roth, IRA and annuity life insurance.
Joshua: You have all of these different variables and how do you. Piece together all of those incomes to really truly understand what your net amount of income is going to be into the household. So like you had mentioned, providing that clarity with, you know, building a plan is really going to help understand that transition, which again, people are very scared of.
Brent: Let me give you some kind of bullet points of what gets solved for in there. What, what some of the things that we're working on, like just cashflow projections, looking at your in cashflow, looking at your income stopping. And what income is going to be starting creating a balance sheet understanding their own spending right now versus what it may be in retirement and where things may change or may increase like medical insurance.
Brent: Like you said, Matt, medical insurance could be kicking on where you have to pay out of pocket for that. If you retire before 65. It's not cheap. It's not cheap. Their investment cashflow, how much are their withdrawals going to, are they going to take 4%, 3%, 2 percent the tax planning? Can you be taking withdrawals from certain buckets of money to reduce how much you're paying in taxes?
Brent: That could be very helpful because that means you could be pulling less money out to, because you're not having to pay so much in taxes and even understand how much tax you're going to pay. Yes. So that tax planning element, the estate planning element, the insurance planning, do you pay your house off?
Brent: All of that. Comes into this framework that really helps people provide clarity of either a here's what I need to do to get retired. I need to go work five more years and I need to save X, Y, Z, and this is how we're going to do it. Or B, Hey, I'm pretty close to being retired and here's how I'm going to get retired.
Matthew: So what I hear you guys saying is this is the number crunching phase. This is when you're getting into the weeds and it's really nitty gritty. And you're learning how
Brent: to retire.
Joshua: This should also be the phase where you start to think about your goals, right? Or what, what you'd like to do your lifestyle in retirement.
Joshua: I feel like not enough emphasis is put on envisioning what the next phase is going to be like.
Matthew: And usually your goals change. I find a lot of clients, you know, if you meet them young, they'll have one goal. And then you meet, you know, then you're talking 10 years later. Now they have grandkids and it's, Oh, I, I actually don't want to move away.
Matthew: I want to be near the grandkids. So. That's all I want.
Joshua: Yeah. You've been saying that a lot later.
Matthew: Everyone says it.
Joshua: Tell us about the next phase, Josh. Perfect. So the next phase is the enjoyment phase. This is what we all are dreaming about. When I think we think about retirement, the true golden years, exactly.
Joshua: Your golden years. But the phase where you actually get to stop working, right? You get to make that decision to not have to punch that clock and go to that nine to five job or whatever it is, and you get to now enjoy retirement, whether that's traveling or like Matt said, enjoying time with the grandkids.
Joshua: If that's volunteering. You get to do what you want, which a lot of people really look forward to. Watch MSNBC for 12
Matthew: straight
Joshua: hours. That too. If you'd like that, I mean, whatever your flavor is. But this, this phase also comes with some planning techniques, right? It's just not you transition and get to right off into the sunset and enjoy it.
Joshua: There's some specific things that we need to maintenance, make sure that are implemented within this enjoyment phase to making sure that you can continue to enjoy retirement.
Brent: I think in this phase, our goal is to make sure a client is maximizing the enjoyment of their retirement without putting them at risk of running out of money.
Brent: And that can be a tough balancing act. I think we see a lot of two spectrums too, where you have some people who are just so afraid to spend any money and we try to get to the bottom of that and solve that so they're comfortable spending money. And then we get to the other side where people just want to spend more than they should, but most people generally will fall somewhere in the middle of that.
Brent: And I think part of what the goal is, is helping people understand how much they really can comfortably spend to not put them at risk in the future of running out of money. So that they can go do all the bucket list things that they want to be doing.
Joshua: And when they can do them still, right before they have run into any sort of health problems or family events that restrict them to do that, because I feel like so many people wait because they're afraid of running out of money to do those things that they want to do.
Brent: I was working with a client this week who was recently diagnosed with some medical elements that right now aren't necessarily like an extreme immediate concern, but we know. Over the next several years, this will inhibit the abilities to do some of the things they want to do. And there's some very big bucket list trips that they want to take and they're expensive.
Brent: And the, the, their original thought before meeting was, okay, we'll probably do these in the next couple of years. And my thought was, no, let's not do those in the next couple of years. Let's do those in this year, next year and do the rest of them in the next couple of years. Let's start those now. Start the process.
Brent: Regardless of how much you have to take out of your investments, we'll work on the numbers part of it. We'll figure that all out. You start planning your trip. Because these things are important to you. You need to go do them. And that's the stuff that makes it worth me coming into work every day, because now I get to hear about these experiences that they've been able to accomplish and they get it have that they may not have because these health elements could step in at any time.
Matthew: This phase is short, right? It doesn't last that long. It can be. It can be very short. So you got to make the most of it when you're young and still feeling good, you know, mid sixties, mid seventies is still young today.
Joshua: We can do the math. You know, if you're talking about retiring at 65 and life expectancy, let's just call it 82.
Joshua: It's not a long time. No, it's not. And we've
Brent: talked about those three phases of this phase, right? That the beginning phase is the middle and the end of it. And we've gone into detail about what those three phases could look like in retirement. You want to enjoy your retirement while you can, because it will not be golden.
Brent: If you can't enjoy the money that you've worked hard to save.
Joshua: Absolutely. And I think that's what, you know, I think you framed it perfectly. This is the most rewarding phase to me as well. When we can see client to have really planned and worked hard and now get to enjoy their retirement. But I think it puts more emphasis on, on sharing.
Joshua: People should really start to think about what that perfect retirement is sooner than later. So we can help you accomplish those goals. I also see it on the other side where not enough people have thought about this long enough to where they get to retirement and don't know what to do. And we don't want that.
Joshua: We want you to really dial in what's going to bring you the most happiness and joy in this retirement phase and help you accomplish those goals.
Brent: You know, I think when I, when I see so many people who begin to step into this phase of retirement early on, and they're so concerned about spending money in that first year or two, and then you start to really release that fear and show them what they can enjoy, show them what they can do.
Brent: And then a few as the years go by, they're now coming into those meetings, comfortably talking about the things that they want to do, making sure it's financially astute for them to do that and then doing them. And then that's very, very rewarding to see. We encourage that. Now we charge a fee to manage people's portfolios.
Brent: And the less money they have in their portfolio, the less money we make here. But what I think is important to that is never once have any of us discourage a client from spending money because that may impact us. Our goal is to have them spend as much of their money as they want, because our joy comes from watching them.
Brent: Live their life as best possible.
Joshua: Absolutely. Yeah. Well said anything left? Happy retirees. So we love, I love that. Me too. I do me too. I mean, that's what life's about. Absolutely. I love being able to, you know, if they're nervous about that transaction, here's the money for the travel, here's the money for the home improvement.
Joshua: And that's just so rewarding. Go do it, enjoy it and send us a picture.
Matthew: You guys have any
Brent: parting thoughts on this one? Nope. Those are the three, the three massive phases. We specialize in doing this. So,
Matthew: yeah. So to let's recap the phases real quick. It's prepare transition and enjoy. And just remember retirement planning is a marathon, not a sprint.
Matthew: Evermont recommends.
Brent: I want you, you want to go
Matthew: first?
Brent: Go ahead.
Matthew: Do
Brent: you
Matthew: have a good
Brent: one for us? Say,
Matthew: I don't know. I mean, mother's day is around the corner.
Joshua: They gave you like four good ones before we came into the podcast room.
Matthew: Yeah, but I can't recommend things. I want, yeah, I want to go with something that I haven't done.
Matthew: So, all right. Anyways, mother's day coming up around the corner. You know, if you're, if it's your wife your mom, whatever. I have a one that my wife enjoys. She enjoys this company called skins. Is that the Kim
Joshua: Kardashian coming?
Matthew: It's the Kim Kardashian company, but it's pajamas. The reason she likes them is it's very long pajamas and she's taller.
Matthew: So if you're looking for a nice set of pajamas maybe perfect for your mom or your wife, you know, try skims out. I
Joshua: haven't tried them, but maybe look on their website. Do you like their stuff? They have a men's line.
Matthew: Yeah, it's okay,
Joshua: but there's a lot of beef going on with Taylor Swift and and Kim Kardashian cuz you're a Swiftie right man
Matthew: I I do enjoy Taylor Swift.
Joshua: So I'm kind of surprised that you're recommending Kim Kardashian's line
Matthew: Look, I don't I don't boycott things. Okay, or you know pick sides
Joshua: Okay. Got it. I'll go. I, this is something I don't have, but it was a big conversation in the office this week. So we know that the Stanley cup is like the hottest cup over the last, what, 12, 18 months.
Joshua: And I had called that there's a new cup coming on the market that is going to be the new hot cup. And I haven't actually got one, but I think I'm going to get one for my wife and my mom for mother's day as part of their gift. And it's called a Walla. And I see them now popping up everywhere. So this is just a recommends to look into potentially the new hottest cup of the year.
Matthew: I'm going to stop you right now. You can't buy above, I think it's a 24 ounce.
Joshua: What do you mean?
Matthew: It's not going to fit in your cup holder.
Joshua: That's okay.
Matthew: That's not okay.
Joshua: Are you sure? 100%. Are you 100 percent sure that the 32 ounce can't fit in a cup holder?
Brent: I've never heard of Walla, however, you already heard of it.
Brent: Well, I mean, you hear of everything, but.
Matthew: Netflix branded cups and Haley brought one home. She has this smaller one. It's like a 24, 18 ounce. This is barely fits in a cup holder. I looked up the diameter of the bigger ounces and it even says on their website, these will not fit in couple. This
Joshua: is my, this is why my prediction I think is coming true.
Joshua: I saw it on like a Instagram real that, you know, people were predicting social media grants six months ago and now I'm seeing them pop up all over. Now Matt came in like, Hey, my wife got this cut from Netflix and I was like, you know, It's going to be hot. So be ahead of it.
Matthew: Don't be mad when you get in your wife's car and you hear clink, clink, clink from that water bottle rolling around.
Matthew: Here's the
Joshua: thing. I'm not going to get her the one that doesn't fit in the cup holder.
Matthew: Okay. You're just limiting
Brent: your size.
Joshua: That's okay. Okay.
Brent: I like to sometimes recommend things that are difficult for me to find. And one of the things that has been difficult for me to find for a long period of time is like good workers in different like specialties, right?
Brent: If you need like an electrician or a plumber or whatever, it may be like good quality work. That's honest. It's hard for to find my wife and I have found a painter. Yeah. He painted our house and then he worked on the inside. He did exterior paint. And then we had him do the Claremont office, both inside and out.
Brent: I'm extremely meticulous about how things look. And he has always met those expectations. So I'm going to recommend Juan the painter.
Matthew: So reach out if you need a painter. So you're saying you want the class. Hey, he's good. If you don't
Brent: love his work, he's good. Yeah. I think he's going to be doing your house at some point.
Brent: Right. You said at some point,
Matthew: so let's go through the list of people who have used them because it's not just you. So he's did your house.
Brent: mean, I don't even think we can count because there's just so many people.
Matthew: He's done my parents house. He's done. I think he did work for Paulina at the office. Your, your whole family, my family.
Matthew: Yeah. He'll do my house a lot of family. So that's a lot of
Brent: people. So here's my thought. Obviously our social media is picking up. If you want a recommendation or you need a painter message us on social media, we'll get you his contact info. Yeah, he's great. He's honest. He's reasonable. Does a good job.
Brent: If you need a painter DMS, it's a good recommends.
Matthew: Yeah. And speaking of social media, our Instagram videos are rolling out. So if you haven't followed us yet on social media, follow us on Instagram. We're also up on YouTube. Now just type in Evermont. You'll find us,
Brent: and let us know what you think of our social media.
Brent: I'm a little bit nervous. I look very old. I can't believe how fast I got old.
Matthew: You look
Joshua: good, man.
Matthew: I think they're a good first take, but stick with us people. They'll get better. I'm going to do one on why Roth IRAs are overrated.
Brent: I like to add listen to that.
Matthew: Yeah.
Brent: All right. So as advisors, our passion really lies in assisting others.
Brent: It's the very reason we've chosen this path for those interested in arranging a meeting with any of our team members, please visit us at evermont. com. To get a book or a complimentary concentration. Additionally, we've invited you to download our ebook directly from our website, offering further insights and guidance for access to this episode, show notes and more head over to retirement plan playbook.
Brent: com as always. Thank you for listening. Thank you.
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