How to Enjoy Retirement Without Running Out of Money
Freddie: Retirement forces difficult choices between enjoying life while you're healthy and preparing for an uncertain future. Estate planning helps to address longevity healthcare needs, and the responsibility of protecting a surviving spouse. The goal is to live fully today without creating financial stress for tomorrow.
We're talking about retirees enjoying their money. How do you, how do retirees balance enjoying their money now while still planning for an uncertain future? And there's a lot of uncertainty in the world right now.
Leibel: Yeah, there. It, it is, it is a real challenge and it is something that I talk about extensively in my book, living with Financial Anxiety.
Um, and I, and I outlined there, you know, kind of a framework for how to think through making decisions what I will say, right? It's, it's one of those things. And it's something that. I didn't expect this going in, becoming a financial advisor, but it is certainly something that, that, it seems like one of my roles as a financial advisor is people outsource that worry to me, right?
And so that they can focus on the enjoying the now knowing that I am doing the worrying for them for the future.
Freddie: Lucky you.
Leibel: So, so that is certainly one way that you can do it is by hire, hiring a financial advisor. But even what I will tell you is even if you hire a financial advisor, uh, you don't want to just trust blindly, right?
You want to know that they have a plan. You want to know that they have a process. You want to know that what is that process for thinking through those decisions, right? Because it, everything is a trade off in life. There is no, you know, you don't get a free lunch, right? If you're, if we're enjoying the now, right?
What is it that we're sacrificing for our future or what is the risks that we're taking on for our future in order to be able to enjoy the now? Um, and you need to be okay with those, right? Um, and a lot of the conversations that I have with clients, um, and prospects, and this is a lot of what we do in that.
Free retirement tax law analysis that we do for people is we'll look at their finances now and we'll project it out into the future and we'll highlight for them what are the things that we are most worried about for them. Right? And it's different for every person, right. You know, I have people who come to me and they're like, I'm worried about, you know, um, not, you know, I wanna know how much I can spend without running outta money in, in.
You know, the rest of my life. And I'll say, oh, okay, what's, what's your health like? And they'll be like, well, I'm doing all right right now, but you know, my, my father, you know, nobody in my family has lived past 75. Right? And I'm like, oh, okay. So do you expect to live past 75 or is this something we're planning towards?
Right. He is like, yeah, I probably won't make it past 75. And your wife? Well, my wife, her family they've they just celebrated the a hundred 10th. Birthday, right? Like my mother-in-law still harasses me. Um, and, and so you gotta, you gotta ask these questions, right? So, you know, for some people it's, you know, you plan on living, you know, you think okay, you know, five years, 10 years, 20 years, right?
You're like, oh, I'm never even gonna make it 20 years. Well, okay. What about your spouse? Right? And what if you're wrong? Right? What if you're wrong and you do live 20 years, right? Because your health is better, because your genetics is better because medicine is better. Right? Like I, and I'll give you a very concrete example.
Um, you know, my, my dad, right? Uh, he had gout, his father had gout. Like it's, it is a family tradition, having gout. Mm-hmm. Um. I, you know, uh, I, I, I'll never forget my first gout attack, right? I got it. I was like, I knew exactly what it was because I had watched my father have it so many times. And I went to the doctor and he runs some blood work, right?
And he is like, yeah, you're having a gout attack. And I was like, should we get on any of the medicines that my, my dad had to take? And he is like, nah, your, your numbers don't indicate that. We'll see if it happens again. Well. My dad had really bad, you know, kidney problems. He was on medicine daily to control it, thank God.
Right. You know, I by the same age right? I'm doing fine. I occasionally have to take something for a gout flare up. Uh, I gotta be careful that I, you know, I don't drink. Too much on the same week that I eat too much red meat. But, um, other than that, right, I'm, I'm okay. And, you know, my dad was completely bald, his father was completely bald by my age.
And I got a, you know, I don't have a full head of hair, but I still have hair. Um.
Freddie: That's a good thing,
Leibel: right? So the my point is, is right, like we can be so certain of things, right? That, but at the end of the day, we are unique individuals and, and so we need to, you know, while we may have an expectation that, you know, okay, we may not live a very long time, or we may only have another five, 10 years, uh, or in whatever it is.
What if we're wrong? Right? What if we live longer than we're expect? We expect to, and so we need to have a plan for that, right? Because the last thing you want to do is, I worked so hard my whole life, I sacrificed to get to this point. Right? And you did sacrifice. Every single person I've met has sacrificed, and I occasionally, I get people who didn't sacrifice and they come to me with nothing and they're like, I, I have to work till the day I die and I wanna retire.
I'm like, you're not gonna retire because you didn't save anything, right? Like there's, you didn't save anything and you didn't work hard enough to get. Had enough from social security and you didn't, you know, your budget doesn't work for you to be able to stop working. But for the most, for most people, right, you sacrifice something to get to this point where you can retire and be like, I can now enjoy my time.
And you wanna enjoy that time and you should enjoy that time, but you need to do it in a way that. When you it, when you get to those last few years of your life where you get to the point where you can't take care of yourself anymore, you need somebody, whether it is somebody to drive you to the grocery store or someone to help you with grocery shopping or take you to the doctor's, right?
It might not be, you might not think of yourself as an invalid, right? It might just be. I can't drive myself anymore because, you know, I, I, I just don't pay attention as much as I should when I'm driving, right? Mm-hmm. Um, and that might come sooner rather than later, right? According to my wife, that's today.
Um, but you gotta, you gotta plan for that, right? Because you have this money, there's no reason why you should be pinching Penn, uh, pinching pinching pennies in those last few years of your life when you need it the most. Right? You know? So it is a matter of balancing. Uh, doing a, a balancing act between enjoying now and making sure that you have that money for the future, so that if those worst case scenarios or the things that we know are probably gonna happen, happen, that you have a plan for that and that you're okay with whatever that plan is.
And it is. It is something that you gotta constantly reevaluate because, you know, as life changes, as you change, as the things that you want, right? Your ability to enjoy things change and you gotta adjust for that. And, and I'm, I'm gonna just add one last tidbit that I've been telling everyone is, you know, um, some people take that to the extreme and they go, well, I'm gonna save everything for those last few years.
Mm-hmm. Um, in which case I, what I tell them is. Well, you can spend the money now, uh, enjoying yourself, or you can spend it on a nursing home because if you, if you spend it now, right, and you do things that keep you active and mentally, you know, sharp, that is the thing that's gonna keep you out of the nursing home, right?
And so you can either, you can either spend it on enjoying yourself or you can spend it on the nursing home. Now we need to balance that, right? So it's not like blow all your money now while you have your health and then have nothing left over for when you don't have health, but. Low enough that you, that those healthy years, uh, last longer so that when it comes time for those unhealthy years, right, it's really the end of your life.
And it's those last, you know, year or two, it's not, and it's not the last 15 years of, you know, um, uh, you know, just being an invalid because you didn't take care of your health and you were sick and you, but you have all this money, right? Like, what point is that? So
Freddie: what an interesting picture. So explain to us how.
Estate planning can address long-term care, can address declining health or even, uh, caregiving needs as you, as you mentioned.
Leibel: Yeah. So, so what I like to, you know, uh, a lot of people talk about estate planning and the, the term that I, I find myself using more and more is, is financial continuity. Right. Um.
Yeah. 'cause that, that, I think that's the, the thing that comes before estate planning is how do I ensure that when I'm no longer able to make financial decisions, right? When my judgment starts to go and when I'm, people can start taking advantage of me. Or when Fox News starts actually making sense.
Right? Um, and I, and I'm not, I'm not. I'm being just a little facetious there, but what the conspiracy theories feel real, right? And you can't distinguish between, you know, what's hyperbole and what's real. Um, you need somebody who's who you can trust, who's gonna be there, who's gonna tell you, you know, hey, no, you really shouldn't, make that investment, right.
That investment in, you know, dandelions is not a good idea, um, or tulips, right? Um, so, um, you need to have that trusted. A friend who can see what you're doing. And, and that's kind of the role that we play a lot of times as a financial advisor. The o the other thing is, is who's going to help make sure that, your bills get paid, right?
Who, who's gonna know where all the pieces are moving? And who's gonna make sure that person, you know, whether it's your spouse, whether it's a trusted kid, right? Or kids or it's an attorney, right? Or a trust service, right? Who's that? Person who's gonna kind of step into your life and start running your financial household when you're no longer able to do that.
Um, because you need to have that plan first. Um, once you have that plan, then we can say, okay, if there's money left over, when be by time, I'm gone. What do I want to have happen with that money? Right? How much is gonna be there to take care of my surviving spouse if I have a, you know, an adult kid who can't survive on their own, right?
Who still hasn't figured out how to make it? Or maybe they're just, there's mental challenges that they won't be able to, right? How do we make sure to take care of them? And then how do we make sure to leave enough? To, if we have, if we're lucky enough to leave a sizable legacy, how do we make sure that that goes to our kids and not to the federal government?
Right? Because if we don't play our cards right we'll have done everything right, amassed a huge fortune in retirement accounts, and then the government comes, takes it while we're alive and RMDs, and then when we're dead. Divorce our kids to take it out in over 10 years, and now all of a sudden, 50, 60% of that is going to federal government, state governments, and they become the bene biggest beneficiary of all of your hard work, which is the last thing that any of us want.
So you gotta, you gotta really plan for everything. And this is, this is why. When we do our retirement tax wat analysis, right? We don't just focus on, oh should you do a Roth conversion? We look at, that whole picture. We look at where you are today, we look at what the future looks like and then we kind of map it out and see what are the things that we really need to protect against, um, so that you have a comprehensive plan.
'cause everything's a juggling act.
Freddie: So do you have a tool that'll help, uh, prospective, uh, customers and [email protected]?
Leibel: We have lots and lots of tools. So on our website we've got a 62nd retirement calculator. So, uh, and it is, call it a calculator. It's not a calculator. It's kind of like a automated version of what we do for people.
Mm-hmm. So you go. Fill in some basic information. It asks, it gets enough of all the right data points that it can give you a pretty good picture of where you are today and what that future looks like and some of those big pitfalls that we see. The most common ones. Uh, what I will tell you is if you see if that, if you look at that and you go, oh, that's.
That's not right. Or you look at that and you go, oh, well these are disturbing things I need to take care of. Reach out to us. There's a link on there to our calendar to book some time, because a computer can only see so much, right? There are so many nuances that, computers, you know, no matter how much AI we throw at it, it just not going to pick up those subtleties of what's important to you.
And, you know, um. What's, what's unique about your situation that isn't, doesn't apply to 99% of the people out there, or maybe it does apply to 90% of the people out there, but it applies differently to you, right? Maybe you're willing to pay more taxes now so you pay less in the future, or maybe.
It makes sense for you to, you know, pay the taxes down the road because of how you're invested, or because you're more worried about now versus later, and there's a legitimate reason for that, right? So nobody's a mathematical formula, right? Everyone's unique, and that's really where us as advisors get to shine is how do we connect, you know?
You to the numbers and how do we figure out how to make you how, how do we help you experience your best life possible, um, with the greatest probability of success?
Freddie: That makes a lot of sense so that, uh, you don't have too much life at the end of the money Leibel. We gotta, yeah, we gotta leave it right there.
But we do wanna let you know this, that estate planning is about creating flexibility so that your plan can adapt to how you're living, to your health, changes, to longevity, and all those unknowns that do happen in life. When well done, it protects your loved ones while giving you that satisfaction, that confidence to enjoy your retirement today.
The right balance as Leibel told us, brings us clarity, brings us control, and also most importantly, peace of mind. For Leibel Sternbach, I'm Freddie Bell, and this is Leibel on Fire.
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