20 Planning Matters Radio - THE OPTIMAL RETIREMENT W AUTHOR TOM HEGNA

Planning matters when you in the program is planning planning matters radio. I am Peter Rochon, founder, CEO of Rochon planning your local independent fiduciary financial investment and retirement planning firm right here in Fuquay Marina, North Carolina. I am a Dave Ramsey's Mark Vester Pro so happy to have you along for the ride and on today's program.

We have a very special guest joining us. He is one of our favorite guest on the program, author of the books paychecks and play checks and don't worry retire happy, host of the PBS special by the same name.

He is Tom Hedman, Tom welcome back in later great to be with you always a pleasure, Tom. The last time we had you on the program you were announcing what you called your trial retirement you were going to take some time off. You were going to relax and curious as to how that went well. I've always said you know what good would it be if the guy who writes the book don't worry retire happy to retire is not happy that would be very good so I really wanted to see you know, could I retire. Would I be bored we drive each other crazy. We recently built a house up in Flagstaff Arizona for the summer and so we went up there I joined a country club for the first half of my life like golf almost every day. Played a lot of fun. I can tell you I was not bored at all. We did not drive each other crazy. We probably were back in college again. It was it was really a lot of fun and you know some people don't want to retire they want to keep working at. I think that's great. I do want to retire okay. I mean, I've been working really hard for the past 30 some years and I mean harder than most people basically have three careers in my life and I really do want to know I'll still do some speaking and also do some writing but I'm not going to be doing 200 days on the road but here's some of the things I learned from my for my retirement trial retirement number one and I tell everybody when you retire every day of Saturday because of you think about what they delete what they believed. Most people spend the most money.

It's Saturday to go to Home Depot. They play golf they get their hair down to get their nails done.

Saturday is the day most people spend the most money will win every day of Saturday happens spend a lot more money in retirement than what you think because you don't happen you don't have as much Worldwatch for three months so we're kind of time what they would learn today. Let's go let's go have a happy are the clubs we go to the club happy hour Appleyard turns out the extended happy hour. Then some French okay let's go to dinner and then somehow the dinner ends up on my tab and all the sudden I was spending a lot more money than what you know you would think. You think in retirement spent last, and the first thing I found is that you know you probably spend more time you're pretty go-go kind of guy time to reflect and kind of down time did you find yourself and see it all to get back to it. I really didn't mean I did get back to because my schedule is already for you for the fall, so I had to get back to it. But if if my schedule would've been booked.

I think I could've just continued in retirement. I did not get a deeper work, but what I did was something that I had done in the past, I refinished two pieces of furniture which I don't have time to refinish furniture door I'm doing now. I had time to do some things in the garage and do just just do some stuff that normal people can do that.

I really couldn't have been able to over the past 30 years spent my you know my days and weeks and planes trains and automobiles so I don't know. Maybe. Maybe it's different for me but I I'm really ready for tonight. You look like golf.

I do look like one of my goals was to be my son and tennis my dad and so II just set up different goals. It wasn't work also was in financial goals.

It was fun. Goals and all and and you know I can still not justify the country club. I don't think anybody can.

The numbers never pay for themselves. You play golf like every single day and even then if this court fees and other things you really can't justify with numbers.

I was listening to another speaker and he said you know there's two types of profit. There's financial profit and there's life profit and he said sometimes we do things that we say is not financially profitable but we really get enjoyment from it really helps our whole life. That's life profit, and that kind of stuck with me that you know some things that I've always been very financially conservative. Make sure it's covered pay the bills, but there's some things you gotta do for life profit. You gotta take that trip. You gotta go do something and I talk about that in the book about being happy and if you have enough income guaranteed income coming in. Then you can actually spend money and it is the spending of money in retirement that allows you to enjoy retirement. If the travel is the cruises.

If the dinners out the bottles of wine with your friend that's how you enjoy retirement. I always tell people I don't care how many millions of dollars you got stashed in some accounts of work you're scared to death to do anything with it.

You're always worried on market crash. All interest rates are low or better not to get out of going to spend it. If you live in retirement that… Just in case retirement. What happens is when you die, your kids are going to join the country club. They're going to buy new boat they're going to go on a cruise and so I tell people you know you're in your go-go years you're young you're healthy. That's when you need to travel. That's when you need to do the things that you want to do and don't just think financial profit also think life profit and emotional happiness will speaking of the financial verse, the life, the money versus mental aspects of retirement.

Tom, what do you feel financially has helped you to enjoy that life profit throughout retirement as much as possible while I mean I've always been a big favor. I mean I've saved over 20% of my income. But sometimes, 30, 40% of my income burp for many many years. So II was an aggressive saver.

III don't I don't waste money.

I don't like want to be. Live a cheap life but I want to get a good value. Want to get the most for the least… Thanks and so I've always been a good saver. But you know what the problem is good. Savers are good spenders and in retirement.

It's not about saving anymore. See I got a break myself from the start of my gotta save more money. I don't have to save anymore, but that's what I did when I was working now it's time to turn that into income and the problem is that all you got is a 401(k) or brokerage account. Those are assets and you're always even trained for 45 years not to touch so we got say that we gotta grow what we got protectively can't touch if we got a stable.

We got a goats will guess what you been thinking on the program. Never touch those assets, and most people will go to their graves never touching their ethics.

Think about it.

Your parents never spent their asset but that's what you're supposed to do in the only way that you can really do that is to turn a portion of that for me it's a significant portion, but for most people, should be a portion of that going to guaranteed lifetime income because you been trained to spend paychecks and so when you get a paycheck in the mail you have any problem spending that because you know next week.

Another picture, and met and that's what guaranteed income does guarantee paycheck simply check. That's why I wrote my first book because it's not just about having paychecks to cover your basic living expenses. It's about having police checks. You can Ashley go out and enjoy retirement that you can do the travel that you can buy the bottles of wine with your friend that you can go play golf or tennis or do whatever you want to do so through your time in speaking to thousands over the course of your career writing the books hosting the PBS specials. Tom have you found that what can help to prevent that. Just in case. Unfulfilled retirement is taking some of the asset base and turning it into those guaranteed sources of income. Those paycheck simply checks for retirement. Yeah, I mean that it is so critical and and what I tell people you say there's people out there if they hate annuities. I don't believe in guaranteed income look. The map is clear for those people if they would simply move their bottom or their bond portfolio over into a lifetime income annuity.

It will do two things automatically number one increase returns of the portfolio and number two will reduce the risk of the portfolio that is guaranteed because the way that the annuity functions inside of a portfolio. It functions like a AAA rated bond with a triple C rated yield with zero standard deviation so that may be over the heads of many religions, but great for a financially astute person they know what standard deviation is and they noted AAA rated bond in the triple C rated yield it and and so it gives you a high yield with with very with with with a very high level of safety with no fluctuation. That's with the standard deviation so even even the most sophisticated listener today should move some or all of their bond portfolio into guaranteed lifetime income that is been proven by PhD's all over the world.

There's not a single PhD or a single economist that would say that is incorrect that his math by it's a mathematical, scientific and economic back so for the average person up there in a 64% Barker stock portfolio 40% bonds. What I'm saying is to move 20 to 40% of portfolio. The bonsai over to an annuity you want to move this dockside over, although where the record now that were at all-time record highs on all three markets I give the Dow just a little bit of swing right at the all-time record high and I'm to be putting up by 2020. Economic commentary and in the past. I really focused on the interest rate that interest rates are going to stay low as far as I can see will now everybody knows that they didn't know that over the past eight or nine years of saying it but now I'm focused on.

Gotta take to protect some of your games. You gotta lock in some games, these markets do not go to the sky. The Japanese stock market is been down for over 30 years. The European stock market went up about 20 years emerging market to be down for about 10 years. These markets can go down and stay down for an extended period of time and so I'm not anti-stock at all. I own some Apple iPhones and Google and Facebook down some other stuff but I don't have. This is significant portion of my wealth in there. I have locked in my gains I blocked in profit and I am guaranteed income guarantee to come to me for the rest of my life. My wife's life and that we use life insurance to go to the kids. We bought a life insurance policy go to kids about that for $0.15 on the dollar so we can leave them a million bucks, tax-free, and it only cost $150,000. That's a great deal so we did that for the kids and then we get to spend all the rest of our money and we got lower long-term care policies that protect us. If we need long-term care, so I absolutely am living exactly what I write about. I am doing exactly the things that I've told people to do for the last 30 years, because it's all based in math and science. These are not my opinion these are the optimal ways to retire time you get on a number of topics that I think does lead to doubt and worry in many people's minds. What about the fear of running out of money. What about the potential for long-term care.

What about my desire to leave a legacy behind your saying this optimal portfolio helps address those major questions and maybe helps us live a more fulfilled. Not a just in case retirement absolutely because if you've already established what you're going to leave your kit to be extra money left over.

I know that but were not going to live our retirement to lead many door kits, which is what a lot of people do we better not do that. We got Lisa money to Johnny and Susie.

We got Lisa money Johnny Susie so they deny themselves retirement delete money. There can't number one, don't do that. I want you to spend all of your money the last check you out a right to be the undertaker that baby up about what leave your children life insurance because you can do that for pennies on the dollar menu by some guaranteed lifetime income. Make sure you never run out of money, how long you live and then you gotta have a plan for long-term care now. Ideally you're going to use long-term care insurance but we don't live in an ideal world, people don't always have the money to do that. So on that policy that you brought to leave money to your kids if you want you can add a long-term care rider on there that if you need long-term care that we money their two pay for your long-term care so that would be a way that a dollar can solve three problems number one, it can be an emergency fund. If you needed number two if you don't need an you diagnosed your kids and number three. If you do need it for long-term care. There's no bucket money there long-term care so that would be a simple way to to to use these products and this is what I write about it paycheck simply checks and don't worry retire happy.

This is where I speak about you people want more information. I got a free YouTube channel, right now you can find it and and these are just common sense solutions and everything I do.

Peter is based in math and science. None of this is my opinion. I've done the research of the PhD's from around the world. The top economist from around the world including Nobel Prize winners and this is what what the research shows. You should do and this is what I'm living and I and I try wanted to do a trial retirement this year I'm taking off even more time to take time off this winter and go skiing. In the next someone taken the whole summer off again and then you know I'm getting close to worming to say that that and I'll just do everything online from now on and I'm just going just going to be happy, we know that there are very limited opportunities for a single dollar to multitask for us usually were assigning dollars with very specific tasks, but where we can get that dollar to leverage where we can multitask it will definitely help to optimize that portfolio now. You are kind of a go-go kind of guy three careers not in full force back in your working career here but back at it. What you looking forward to most after your time often in getting back to your work. Well, you know I I set up some different goals for retirement.

One is I want to get my handicap down to seven, which I did another one I wanted to be my son and Kenneth and I took lessons and I did and so I just set up different goals. We want to I want to lock canal cruise there some places we want to go, you know, as a couple to travel and see. And you know I love RVing I could be a full-time RV or my wife can't so you know maybe we'll rent on every once a while and go take it out and so there's there's things I want to do and I you know I lost my dad this your lost scoping buddy two years ago at age 56 he starts seeing that this is not a forever deal you know you only have a few you know I probably have 2025 really good years left and then after that the health things that NME may consider in any time but otherwise in the mid-80s and 90s start start falling down a gun and this will go no go of phase and so are you and I got 2025 maybe 30 years ago. Go in on that. If I'm lucky and that's if everything goes right and so you kinda gonna become a gotta go there and do it.

You only get one chance. We certainly need to plan for more years of the go-go these days then maybe in generations past yeah and you know, step one in the whole process they got have a plan and they need to work with a financial professional, which is what you do Peter and and you know people can't do it themselves. You can't retirement is not a do-it-yourself project and if you think you're just an average 6040 portfolio and cruise to retirement taking withdrawals that I'm telling you you're going to fail in retirement, especially with this market at an all-time record high.

When this market goes down and it will and there's retirees were taking money out of their the sequence of returns risk is going to wipe out tens of millions of baby so I would just encourage your listeners don't be one of those baby make sure you got guaranteed income to at least cover your basic living expenses that the paycheck I got more to cover my Playtex because I wanted guaranteed fund to. I don't want to just be sit on the market crash golf today Like that of the day and I want don't worry. Like all these people do. So I've set myself up for you don't have a happy and successful retirement and one last thing in the state of Arizona where I live and in many states, but in the state of Arizona. All the money that the life insurance and annuities as creditor protected. That means if somebody sues me or whatever did they try to come and get me they can't get any none of that is all protected and to me that's important because I'm speaking I'm talking although I'm going all around the world on the wacko that wants to sue can sue nowadays they won't get anything they won't get en vogue and be very disappointed and and and so for your doctors, attorneys, you know, chiropractors, dentist people who are threat for lawsuits. Just remember, there are products that can protect you from that and that's another thing Tom there's an old saying about opportunity knocking and and how frequently it does that and how long it stays at the door. Market suffering around all-time highs. Taxes historically low income payout rates that are available today. Do you believe this is maybe an ideal moment for the baby boom generation to seize on that opportunity. Yet if they don't have any guaranteed income. I would outdated retirement already not about that. Not about the five your 401(k) or your brokerage account. It's not even try not to spend that money if you're not going to spend that money. The money will spend is the money that you turn in the guaranteed lifetime income because you can spend that every month the next month. Another check comes in in the next month. Another check comes in the next month. Another checkup and as long as you or your spouse is breathing. Those checks are coming and that gives you peace of mind. It makes you happier retirement now.

The research shows you like to live longer as well. I mean I could just go on and on we could we could do hours and hours on this because it's all based in math and science but there's an emotional side to it as well. We always love visiting with one of our favorite guest.

Tom had no author of the books paychecks and play checks and don't worry retire happy, were glad to have you back, but also want you to to enjoy that semi retirement life. A thank you Peter and will will have another talk you soon.

Thank you Tom Pritchett already but will he would like to find out how to put any of those financial and retirement principles into practice in your planning. Pick up the phone gibberish on planning a call were happy to talk to you about how to structure that ideal retirement plan how to have that income allocation component for your retirement.

800-338-5944 the number to call. That's 800-338-5944. You can also get started going online, which on planning.com which on planning.com will give us a call for that complement financial investment climate.

You strategy session 800-3385 94 you again appreciate Tom on this edition of the program is been planning matters radio the content of this radio show strategy tax or legal advice from a professional visor and investment investment strategies mentioned involve risk the possible loss by three services on capital management for registered investment recently on the strings and claims paying ability withdrawals from annuities may be taxable as ordinary income.

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