Hello and welcome back to another episode of The Retire One Show. I'm your host, Jonathan Rankin, the founder and CEO of Theorem Wealth Management. I'm joined by my lovely co-host. Hi, I'm Melissa Rankin. Thank you so much for joining us. We got a great show for you today.

Uh, over the past couple weeks, we have reached out to some clients and asked them, What do they wish that they knew before they retired? And hopefully we're going to be able to share with you some of those stories that, uh, can help you as you plan your retirement journey. And I'm excited because this one.

Knowing these clients, knowing the stories that they're sharing, and knowing just what they've gone through, I think this to me, is going to be my favorite episode. I think so too. And we always talk about other surveys. We quote them a lot. It's kind of nice to do our own. Yeah, it's our own internal survey of, you know, a few clients.

And just so you know, if you are a client, you're watching this one. Thank you for watching. But, uh, two. If you don't hear your story, uh, and we didn't, you know, really ask you, it's just because we just asked a, uh, a few individuals. This time we're going to get you, save your stories, write 'em out, email us.

You know, we always love to keep a database of things that we can share to as many people as we can. Everybody who watches enlists to this, we want to share as much as we can. So any advice that you have if you are a client or you're just retired, And you feel like you have good advice you can share to other people that are, you know, maybe you have a few years away from where you are today.

All right, so before we jump into everything that we've got planned, Mel, what do we want people to do? We want you to subscribe. We want you to never miss one of these amazing advice filled episodes. Don't miss it. Hit the subscribe button.

Also, make sure that you sign up for our weekly retirement newsletter. Goes out every single week and uh, make sure you join the community because we want to help over a million people hit their retirement goals. And by signing up, just showing us that, you know, you're on the path to, uh, do you want to be a part of it?

Yeah. You're helping us achieve that goal. So with that, let's dive right in. Absolutely. So like we said, we took our own survey. We're fans of surveys, obviously we quote them a lot. Um, we wanted to see what kind of advice like. People had other, mm-hmm. People that might be in your same boat or a few years out, things like that.

But the number one thing that we heard was, I wish I would've been more aggressive early on. Yeah. This is interesting, and I think a lot of this was because of the long bull market that we had since, you know, from 2009 through 2021, and you know, Really going back and thinking about the few clients who told us this, you know, and thinking about their story was that during the past 12, 15 years, I mean, when is there never, when is there always good news?

You know, there's always something that's going to be a, a focus to be a little bit more conservative, to be a little bit more worried. And what I've found is that a lot of people focus on the right now, they focus on what's going on in the news right now instead of thinking. This money that I'm setting away, I'm not touching it for 10, 15, or 20 years.

And, you know, I was, uh, I was having a conversation with someone who was in their thirties, you know, a couple weeks ago, and they were asking about how they should be allocated for retirement. And I said, well, you retiring anytime soon. No, they, of course not. They're retiring 30 plus years away. And they were thinking about, you know, going into, you know, a balanced portfolio or being a, you know, a little bit more conservative because of everything going on right now.

Everything they hear and you know, debt ceiling, you know, you name it. Which by the way, didn't all fear factor stuff, didn't we say debt ceiling wasn't going to be a non-issue anyways? Um, You know, I think about that person and I think that you see things in the news and there's always something to be concerned about.

And the rate of return that that person would receive if they were just balanced and, you know, 50% stock, 50% bond allocation for the rest of their, you know, retirement savings career, we'll say for 30 plus years. There's a lot of gains that are being missed out on. You know, you think back to, uh, there was a study done that showed since 1926, the US stock market has experienced positive returns.

So if you look at it on a daily basis, it's 56% of the time. So yeah, it's a little bit better than a coin flip, uh, on a monthly basis, 63% of the time. But if you look at a 10 year basis, 95%, uh, likelihood of a positive return and over a 20 year period, a hundred percent probability of positive return, and the numbers have even gotten better since 1970.

You look from 1970 through this year. Uh, and even in looking at international and the s and p 500 on a 15 year basis, you were at a hundred percent either investing internationally or in the us. 20 years is a hundred percent and even 10 years, the international markets have a 99.6% probability of a positive rate of return.

So, you know, you have time to let this money grow. So instead of thinking about the news that's going on right now, focus on what is the purpose of this money that you're saving. Of course, if you're saving money in an account that's meant for a down payment on a house, a 56%, you know, likelihood of success over a one day period, probably not where you want to go.

No, you want to hear it if you're closing tomorrow. However, if you are saving for retirement that you know is going to be 20, 30 years away. It's okay to be more aggressive early on. Yes. Odds are obviously a little bit better. They're, they're a lot better. And so that's what I would say to someone who's younger, someone who's even in their forties or maybe even early fifties, that you have time for this money to grow.

We talk about the longevity that, uh, is going to be a concern for a lot of people as their money's going to have to last longer as life expects. These, you know, continue to increase. So, You know, I wouldn't be so in a rush just to get more conservative if you're an early retirement saver, just because of the fact that you have time and the odds are in your favor.

It's like, uh, hunger Games. The odd, maybe the odds forever be Yeah, in your favor. Something like that. But that, that makes sense. I mean, you kind of hear that and it's like, okay, start thinking about that. Be more aggressive. Yeah. Early on, and just so you know all, let's put a disclaimer out there. This isn't saying to go out and buy all one individual stock, of course, or be extremely aggressive.

This is saying base your allocation on one risk that you can handle, but two, when before you even do that, make sure you put in perspective and really think about what is the purpose of this money. Whatever it is, whatever account you're looking at, if you're looking at your checking account, the purpose of that money is likely to pay your ongoing bills, your day-to-day life.

The purpose of your savings account probably is going. The purpose of that is going to be your emergency fund, but the purpose of your four  is most likely for retirement. So invest accordingly based on the time horizon and the purpose of that individual account. So, so kind of on that same thought, another takeaway just to kind of keep it going here.

I wish I didn't have all of my money in retirement accounts in this one. I, it's funny, I laugh because you know, this client and I, we've had a number of conversations about this because every time that he has to take a distribution from his account, he gets frustrated. He gets mad because, It's, you know, he looks at the balance that he is got in his account and he goes, well, I got to take out 25 or 30% just for, for taxes.

Because you know, for the longest period of time the thought was make sure you saving your 401k. And that's great, you know, you if you could do that. And if you're just doing that, that is okay. That's okay. This isn't saying that it's a bad thing just to have all of your money in your retirement account, but as you start saving more, You want to start thinking about adding different account types that are based around the asset location from a tax perspective.

So when you have all of your money in a 401k, well, at a certain point, You know, anytime you take money out, it's ordinary income tax, and if you need to take more out because of an emergency, that's more income tax could push you into a higher tax bracket. And then a certain point when you're, nowadays, you know the numbers going up to 75 where you need to take required minimum distributions.

Some of those RMDs can get so large that pushes you automatically into that highest tax bracket. So, You want to start thinking early about how can you start diversifying where you're saving from a tax perspective? Didn't we do an episode on that? We did. We, it was episode 37. Okay. Just to make sure, case anybody missed it.

If you missed it, go back and list to episode 37. But we talked about. Where do you save, what type of account? So just a recap. You know, I'll, I'll spoiler alert, if you want to, uh, avoid the spoil alert, you can pause this now or fast forward, you know, 30 seconds, uh, and go back to watch episode 37. But, uh, so the first place you want to save, make sure you have the emergency fund from there, four oh  up to the match.

No need to give away the free money from there. Tackle all the credit card debt because that's the highest interest. HSA. You know, we always, it's a forgotten account. Fans of HSA, fans of HSA accounts got the triple tax benefit there, but you do have to be on a high deductible healthcare plan. So you have to factor in your own healthcare on that.

Um, and then from there, employee stock purchase plan, if it's offered, max out the 401k. Roth ira and then a brokerage account. And then the last place would be an after-tax 401k. So those are kind of the places that you want to start putting the money as it comes in. As you start making more money and you kind of fill those buckets, then you kind of go to the next bucket.

But this really does help with asset location when you're investing as well. Cause you think not every investment belongs in. You know, the, the same account, you know, you're not putting municipal bonds in a IRA or a 401k. Of course not. And so, you know, but you think about it a step further, you know, certain stocks, if you have a stock that's got, let's say, a high turnover rate in a, you know, in a fund that you've got or a managed account that you've got, You're not, it's not as tax efficient to have a high turnover type of portfolio in a taxable account that might be best suited for a tax exempt account like a Roth ira.

So structuring your investments based upon where the assets are held can also help reduce taxes and help you invest more efficiently. So, um, but that one always makes me laugh because every time he is got to take out a distribution, it gets frustrating because there's taxes that are there. Taxes everywhere.

That's right. Another thing that we heard from clients was, I wish I had planned better for unexpected costs. I think this is a, a very big one for a lot of people. It is, you know, and you think of the, the biggest fear is obviously running out money in retirement and what can cause that is, you know, is overspending.

Now, most people, it's not overspending in the terms of I'm going to go out and buy an a lavish car, I'm going to spend a bunch of money on travel that I shouldn't be spending, but, It's usually the one off things that turn out to be a little bit more than one off. Now, you know what? We need a new roof. We had, you know, a construction costs that, uh, ran over or always goes over budget.

Always, you know, a big one is, is taxes. You know, sometimes taxes aren't accounted for the right way, whether, you know, it was taxes, holding from social security or pensions or things like that. And then you have this. Larger bill that was unexpected. Uh, and so by planning ahead for those things, it's, you've got to factor in the fact that you're not going to be able to foresee every single cost that's out there.

No, of course not the, there's actually a study that was done that said one in three people experienced retirement surprises. That depleted 25% of their assets. Mm-hmm. And that's, that's a huge chunk of your assets. That's a huge chunk of your assets. And then when you think about going back to the previous client, if all of your money is in a tax deferred account like a 401K or an ira, well if you have to take out 25% of your assets, depending on how much you have now, you are probably paying a lot more taxes than you initially wanted to.

So then that only further depletes the, the account. So you want to make sure that you're thinking ahead of those things. And kind of in that same realm of thinking ahead, only 18% of retirees are prepared to handle home repairs. 18%. Well, I can, I, I could see that just because, You know, you think your house is in good shape, you know, but you don't know.

You don't know when you're going to need a new roof. No. Or it's, I mean, windows or anything. I mean, no, it's not like, you know, like with a car, you know, you know that at some point a car's going to break down. Which is funny because the same study actually says that 27% of people are prepared to deal with car repairs or replacement.

That makes sense to me because it's got no odometer. It tells you how many miles it's been. You know, usually you go get your oil changed. You got the little sticker in your corner that says you need to get this done in another three or 5,000 miles. Well, the, there's not that with a house. You don't, unfortunately, there's no odometer with a house of here's how many times you've ran the dishwasher, here's how many times you've done a load of laundry.

There's not like a counter that says, well, you opened the fridge this many times. How many times? It's just, that's just not there. I mean, I think about our lovely 104 year old home. I can only imagine what the odometer is on that thing based on how many things break. I just leave, just go, just, just sell me.

That's at, at this point's my go in peace. Your kids are too rough on me at this point. It would, should just have a sign that says Lemon Sell me now. Um, which is also interesting because retirees, right now, if you're retiring, you know, over the past, I would say five to 10 years and really over the next five to 10, It's going to be a tough position for a lot of those people because they're known as what is called the sandwich generation, and what I mean by that is that they might have to help out both their kids as well as their own parents.

That's a really unfortunate sandwich. It is a, yeah, it's, it's a, I know other sandwiches that, this is a PG show we won't talk about, but it's a, uh, you know, there're, it's, it's not a good place to be and only 8% of people feel prepared to be able to help out family members. And once again, it's not like a car with an odometer.

There's no, you know, okay, I've had this many calls with, you know, my mom, so that means that on Call 100, she's going to ask me for a little bit of help with some medical bills. It just, that doesn't really happen. And so, you know, I can see how those unexpected costs. Can add up over time and add up pretty quickly.

And that's where, you know, starting to plan ahead for those things. And now you can't plan for, can't plan for everything. Unexpected, right? I mean, there's a reason why it's unexpected. However, when you are building out your retirement plan, Run through some of the, some contingencies, do some what if scenarios of some possible bad things.

That's what you want to do. The whole goal about retirement planning is you want to break your retirement. You want to see what it's going to take to make you fail. Because if you know what it's going to make you fail, then you can start planning around that and, and hopefully avoid those things because the last thing you want to do is.

Go through and spend all these unexpected costs. It's not going to make you necessarily run out money that one year, but it's over time, maybe it will. In 10 years from now. And so it's thinking ahead of those things. So that's, uh, that's a big one. So try to plan for the unexpected. Yeah, that's a good one.

Mm-hmm. The next one, I, I can't help but laugh on this one, was I wish I knew how boring retirement could be. Yeah. We, we heard this actually from two clients and uh, it's interesting because they're both on opposite sides of the spectrum. Yes. Meaning one is one retired in their fifties. And one retired in their seventies.

So this had nothing to do with, you know, when, when it was just, you know, one wanted to retire early and was able to, and got to retirement and realized, this is boring. I've got nothing going on. I've got nothing to do. I don't really feel like a sense of purpose because you know, as much as the, as he called it, the honey-do list continues to add up and you realize you have a lot of things to do.

There's not that driving motivating factor to get those things done, you know? No. It just, once it's done, it's done. Yeah. And whereas when you're at work, you have deadlines and you're working towards something. Most people are working in a job that you know has some sort of higher. You know, hire me Some incentive, yeah.

Some sort of reason to get something done in a timely fashion. The other client, you know, he worked until in, in his early seventies, and so he loved what he did. He got to retirement and said, okay, this is boring. I, I actually, I back loved what I did. You know, the first one didn't necessarily love what they did, but it gave them that sense of, you know, meaning, it gave 'me the sense of passion.

So, you know, we talked about it before a number of times when you're going into retirement. Think about how you're going to spend your time. Think about how are you going to fill the days? What is retirement going to look like from a social perspective? Who are you going to be hanging out with? What are you going to be doing?

That's not just, I got yard work to do today. Sitting on the porch watching the birds. Yeah. Are you going to volunteer? What's, you know, having a plan for all those things is very important. It is, it's extremely important. And we did an episode on that also on being fulfilled. Um, but moving on, I think this is probably the most common thing that we heard.

I mean, we heard this from a number of clients. I wish I would've retired earlier. Yeah. This is, we typically, the clients that we've heard this from, when they were thinking about retirement, it was a retirement that was always pushed off. You know, they, they knew they could retire. The, the money wasn't going to be an issue, but it was, I'm going to retire once this project at work is done.

You know, they, they haven't found my replacement at work yet, so I'm going to wait until they do that and then I'm going to retire. Well, the reality is, is that, you know, money isn't everything you, if you can financially retire, the one thing we can't get back is time. And you know what a lot of people don't think about because it is morbid and it's not fun to talk about.

But you know, we once had a client. Who was a big traveler. You know, they loved to travel every single year. They did a very big trip once a year, and it was the one thing they look forward to every single year. And, you know, we've worked with this client for, you know, 15, 16 years and, you know, by the time they got to retire, they wanted to do a lot more traveling, but they kept pushing retirement off because of those projects.

And always there was something, something, always something. A lot of these big corporations, they do this on purpose where they, uh, they put the bonus payout in the middle of the year. So you think, well, you know, I'm going to get my bonus until May. So why retire in January? I'll just stick it out till May.

Mm-hmm. Well, if I'm going to stick it out till May, maybe I'll just wait. Wait for the year end. Yeah. Wait till the year. It always happens. So by the time they actually went and retired, they only had about a year or two before health issues took over and they were unable to travel and maximize that time. So it.

It makes me sad because I, I want more for them, you know? And I want more for clients who, you know, have the passions that are already there. It's not like the clients, well, they know what they want to do, right? Yeah, exactly. They're not bored. They know, here's what I want to do and I'm going to enjoy doing it.

I've got, you know, they light up when they talk about it, but for some reason there's something holding them back. So, you know. I've never heard anybody say, I wish I spent more time at work. You know? Yeah. We didn't hear that at all. No. Being bored and missing, you know, the day-to-day work are, are kind of two different things.

Totally different. So, um, you know, but yes, we hear that from a lot of people that once you figure out you can retire, you know, I've never, I've never talked to someone who said, I wish I retired later. That's non-financial related. Yes, we hear it financial related. Yeah, but never, yeah. For the personal fulfillment part.

So this one, this is probably my absolute favorite. I wish I spent more, this is my, yeah, this is my favorite as well because I love when clients spend money. You know, we run all types of financial plans where, you know, it shows that, you know, at 90 years old or a hundred years old, you're going to have. $4 million or 3 million or $10 million and okay, well what if you, what if that money's just going to go to who?

You know, kids, charity. Charity. You know, you think about maximizing the time that you have to really spend this money in a meaningful way to give yourself life experiences. And that's where when a client tells me they're going to go on a great vacation and it's outside of their normal spending patterns, I get excited about that because, you know, I've never met anybody who's.

In their eighties who says, you know, I wish I didn't spend as much because they're probably still retired. You know, at that point, yes, there are somewhere. Maybe they overspent because of those unexpected costs. But clients who tell me they wish they spent more, there are times where we actually try to get clients to buy things.

You know, there's so, there's so much fear baked into running out money. Yes. And there's this fear that, well, the market's going down, you know, sequence of returns, you know, you got to make sure that you don't run out money. There's this fear. So there are certain times where you don't go out and get a new computer.

I had a, we had a client, remember that was running a, uh, running AOL on a computer that was, I swear, I think it was a compact computer. And if you're watching this, you probably know what a compact computer is because you still remember dial up. They were still running a o l on a CD disc. So yes, this is something that, you know, I was excited when this client went out and actually started spending money, bought a new computer bottle, much needed bottle, laptop, and, you know, just little things like that that helped improve, you know, one, their internet speed, but two, their, uh, you know, just their quality of life without the fear of.

S you know, just, I need to save everything. I can't spend it because if I spend it, I'm going to run out money. So, you know, if you get scared about that, then just plan more. Do more planning while you're retired, you know, budgeted it. Okay. If you spend an extra $10,000 this year, what's that going to do in 10 years from now?

Is it going to cause you run out money? See it, you know, firsthand going through that plan because you know, that is, I love when clients spend more money, so, absolutely. You know, these are great pieces of advice from, you know, clients that I appreciate everybody sharing. Yeah. I wish segment. Yeah, I wish.

Yeah. Well, I think about it from the perspective of whenever we travel the best, the best experience that we've ever had in any city that we've ever traveled to is usually the second time we go to that city. That's true. We do that. What do you do? You avoid the tourist traps. You know? You avoid the things that you probably shouldn't have tried in the first place, and you really get to kind of live it like a local, which is the fun part, or at least for us, of what we love to do when we travel.

And if we would, you know, if there was a segment like this about what I wish I knew before I traveled to Paris or San Francisco, or you name it, whatever city. Yeah. We probably watch that we want absolutely avoid certain places. Same thing with the retirement. Our hope is that this helps whoever's watching this, whoever's listening, you know, avoid certain things that you know, people who you know are in the shoes, that at some point you're going to be in wish that they had done a little differently.

So, uh, we hope this is helpful. If you have questions, don't ever hesitate to email us. If you have your own story and something that we can share on this platform, email us as well, because we'd love to share your story and then we love hearing it. You know, before we get out here, Mel, what do we want people to do?

We want you to subscribe to the channel, to the newsletter, all of it. Subscribe to everything. Join us here next week for another episode. And with that, I'm Jonathan Rankin. And I'm Melissa Rankin. Thank you so much for joining us.

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