Steps to a Scandal-Free Retirement

Thanks for joining us on another episode. Mr. Stillman's opus Ben George alongside the president and founder of Rosewood well it is John Stillman you look well rested too. I know little rush to have a glow with the Olivia Rose keeping you up at night. She is she's actually keeping my wife up a little bit more than me. When this is recorded only so might I might be stepping at some point pretty soon.

But yeah, you know, three almost a three week old in the house now. It is life change. We expected it to be right, but the wife and family. Well, it's been it's been a lot of fun.

A lot of times you'll know what you're doing you don't know what the baby is doing. Yet, it doesn't change and try to figure out to be 13 you still owe you but I feel like we can gunning together we can get it done more respect for single parents. That's a tough process understood how that works. I don't know how you could, but more power to them today show I were moving away from children.

A little bit talking about a scandal free retirement. So what exactly is a scandal free retirement. Well you look close enough that most folks financial situation you find out it is almost scandalous how badly their financial matters have been handled so we'll talk about the steps people should take to create a scandal free retirement. So these are to be right up your alley. So we got five on the list of root start off with a strong wind and that is you got it impeach consumer debt with right now will think of this differently than impeaching in the political sense because a lot of people think that impeach means removed from office. Well that's not exactly Clinton was impeached, but he wasn't removed from office right so right is because you impeach the doesn't mean you get kicked out but in this context.

We do want to impeach consumer debt, meaning we want to kick it out will kick it out of the house so when I say consumer debt. No take the mortgage off the table and consumer debt that would be to the extent that there is good debt that would be good, but all the stuff that you've kinda been keeping around like a pet like defendant loans or your credit card debt that you will eventually get around paying off or you just you always have a car payment like as soon as you pay off a car you go out next week and traded in, so that you can get a new car. You just constantly have a carpet like that kind of stuff as were entering into retirement. We want to get that debt off your plate because sure, you might have enough money saved for retirement that you can create the income that you need to service all those debts, but in creating that income.

It's gonna put you in a higher tax bracket.

So if you just get rid of the debt will. You can have the same lifestyle that you would otherwise have. But it's going to require less income to create that lifestyle and you can be lower tax bracket. How many clients are our free and clear their mortgage but atomic it's retirement is a common probably the two thirds okay I would say Irene for a lot of people there paying it off in the last season 05 or so years of working and they might have a couple years of working with no mortgage and then you know they're really pouring gas on the fire in terms of adding to their savings because they will have the mortgage anymore, and any other entering into retirement without it is not to say that your screwed just because you have a mortgage in retirement.

We just have to make sure that the income plan is set up in such a way to make sure you can pay it gotcha. The next step to a scandal free retirement. You gotta stop the leaks in your budget yet so there is something called lifestyle creep that you have to pay attention to and that just means that as your income increases, so do your lifestyle needs.

Okay, so let's say when you first start working you get your first job out of college and you're making $29,000 a year and you have a certain lifestyle, and you're able to pay your bills on the $29,000.

And let's say that you're able to save $500 a month. At that stage of your life. Okay guy just to pick a number. Fast forward a few decades, you're still saving $500 a month exit now your income is $69,000 a year instead of $29,000 eat what happened what your lifestyle you're spending needs increase along with your income you not saving anymore even though you're making more and so that happens to a lot of people. If you're not paying attention if you're not really watching your household expenses. All those lifestyle expenses are just going to increase as your income increases.

So you want to stop those leaks periodically take a look through all the things that your spending money on better in a recurring monthly expenses meet at some point where all can I have like 10 streaming services that were subscribed to by George, do you really need Disney plus and HBO go and DirecTV now and Hulu and Netflix. I would be really need all those Amazon prime TV like at some point you want to say you know what I probably need like two movies and I could spend $20 a month on the services instead of 100 so that is little thing like that use will review periodically. Are you still paying for magazine subscriptions that you will never read that kind of stuff is easy to not pay attention to it doesn't feel like it's a big number. Yeah at eight dollars a month or whatever it is, but you have enough of those expenses add up pretty quick.

The leaks we saw lifestyle creep. I thought that was like a bad advisor like a person, then you live your life, you looked in your window at night EFI cell creep that's deftly different than what I what you were describing the next step is you have to obstruct your catastrophic market losses absolutely want obstruct those losses in and out. It depends on your age to if you're in your 30s.

We don't have to worry as much about market losses in your portfolio because you have time on your side to recover just not a big deal if you have some catastrophic what we would call catastrophically think 2008 where the S&P loses half of its value in a relatively short period of time. If you're 37. This is not a life-changing issue that in fact is probably good for you because you're putting money into those accounts you're buying stuff on sale this is working out in your favor if you're 59 and you're retiring five or six years. Well now, suddenly, we can't afford to have that kind of downturn because we will have the recovery time you need that money for income before it's going to recover back to where it was before the loss. So you want to be sure that you have some stops in place to make sure that you can experience 50% loss of your money yet. We will have some money that's exposed to that kind of risk because you don't need all of your money. The day that you retire some of it you're not, you need till you're in your 70s or 80s that money can be exposed to that kind of downturn, but if it's money you need in the shorter period of time. Yes, we need to obstruct those market losses. Next up, you see something you gotta say something right so blowing the whistle on unnecessary or excessive fees is the next step. Gotta be careful of those whistleblowers had the and a lot of this is boils down to knowing what your fees are in your portfolio so often people just don't really know what the costs are associated with their investments and it's not that fees are inherently bad mean people in the financial realm we have to make money somehow right but it's important that you understand what the fees are how they're being deducted. Is it a situation where you have an advisory fee and then you're also paying trading costs every time the portfolio gets rebalanced. You also pay commissions every time stuff is bought and sold. How is your advisor making money and you know if you understand that and you're fine with it. Then there is not necessarily a fee. That's right or wrong as long as you know what it is and you're comfortable with what we don't want is fees that you don't know are there that could easily be eliminated, but you don't know to eliminate them because you don't know they exist makes sense in the final step to a scandal free retirement collude with a good advisor so were collusion is a good thing. Well it is in this case, we want collusion absolutely collude with a good advisor so let's define what a good advisor looks like and it might not be the same person for everybody but you need an advisor who is able to talk you through the big picture of your financial plan.

So often I see people who they say there there satisfied with their advisor and I sorry will what has this person said about when you should start your Social Security when they say about your tax plan for next year mean, how much can you take out of your IRA before your paying more taxes on your Social Security. How much you used to go through all these questions all really talk about it at we just talk about the account that is managing and you know he usually asks how my mom is okay well if all you want is somebody to manage the investments. That's fine, but understand that that's all you're getting. I will always use the analogy of the guy who you hire a landscaper to take care of your yard and you say alright well I could have this landscaper a over here or landscaper, be they pretty much charge the same thing so I don't know that there's really a difference in the two but landscaper a is going to come cut your grass during bowling season.

So from April to October and come cut your grass every week is pretty much it. Landscaper be is going to come cut your grass. But he's also been improving your hedges twice a year. Spring and fall. Make sure those are looking good is gonna blow off the driveway and the sidewalk really well after he moves to be sure you don't have clippings all over the place is come clean your driveway in the winter when it snows and ice so can get that away for you and you know maybe he's going to spray weeds in your beds. Now, suddenly, these are not apples to apples comparisons right but because you can explore deeply enough what you were getting. You didn't know exactly what was being provided to you.

So that's one thing on this discussion of colluding with a good advisor understand what the service is that you're paying for and what are you actually getting for your pay.

The second thing is just having somebody that can communicate with you in a way that works for you.

So one. That means responding to calls or emails in a timely fashion, but to. It also demeans the way they communicate I think. So often people go into me with their advisor and is not a long while. The advisor talks about inverted yield curves and write what we should expect next year in the market.

If this happens in this and what were overweighted in global markets right now were overweighted in emerging markets. We need to dial back on that summer because we don't feel as sure like people feel like they're supposed to just not long stay up sounds good. This a lot smarter than me sites.

It is listenable exist. No you have somebody who can explain why they're doing what you're doing in a way that you can digest and that you can then take action steps to apply to your life like each of these steps will help you have a scandal free retirement after hearing on hope your Russian to make changes LOI to your employer because Ukraine make a difference in the day. If you make ice changes how long you been planning that I don't know nothing during the course of this episode, I thin not cooking some things that you know works around. But seriously, though, you can always in touch with John Rosewood wealth management.com is the website and I get your retirement in order to stop the leaks impeach, obstruct, blow the whistle and collude as all the steps that a busy day right there. If you do all those things one day thank you John, that is a arete for this episode of Mr. Stillman's opus subscriber and apple pie Castillo every you get your podcast and talk to you next time