On June the eighth, 2025, I will have been in this business, in this industry for 30 years. I celebrate a milestone! We’ve been able to help and encourage so many people and help them plan a great retirement. You can’t go through the retirement process with people like that, without falling in love with them. They become a part of your heart. Unfortunately, sometimes you see some of the decisions they’ve made a long the way that breaks your heart. I’m going to talk about a few of those today.

The absolute biggest thing that breaks my heart about people is for me to encounter people, and they might be five years, six years, seven years into retirement, or they might be ready to retire, and they don’t have a plan at all. I’ve said this before, but many some people spend more time planning a two-week vacation to celebrate their retirement in Europe… in Italy (I can give you some spots. By the way, I love Italy), but they spend more time spending and planning a two-week vacation to Italy than they do a two, three, or sometimes a four-decade retirement. It breaks my heart. You need to stop. You need to plan it, and if nothing else, you need to start. Getting started is the hardest part. How do you get started? You just sit down with a blank piece of paper, and you say, what does my retirement look like? Am I going to travel? Are we going to stay home? Are we staying in the house? We’re going to stay in right now? What do we have for assets? What kind of income are we going to have? And just start writing down some things and income. What do you mean income? Do you have two social securities? Do you have a pension? Do you have any rental income? Just write down. You say, “Well, I don’t know what all to ask.” Just write your life. What impacts your life? Do you have a new car? Do you have an old car and you’re going to need a new one? Are you going to move to Texas or Tennessee and follow your kids, but just write it down and start the planning for your retirement.

Just write down what you’re going to do and what it looks like and then eventually, and this is probably where most of you do need some financial planning, help from a retirement specialist, not just somebody who’s good at accumulating money because your 401k has been pretty good at that. Just put money in and you get to the end, and you’ve got a big sum, but now you’re not accumulating anymore. You’re preserving that money and you’re trying to distribute that money and you’re trying to make sure that that money lasts. All of those are the things that go into having a written financial plan. The number one thing that breaks my heart is people are just winging it. Their retirement planning is written down and you can write it down in four letters, H.O.P.E. in case you didn’t do very well in spelling that spells hope.

You hope it’s going to last. You hope you don’t run out of money. You hope that when two people are married and there’s only one of them left, they don’t run out of money and you hope you outlast your money. That’s not a great retirement plan. Get a written retirement plan. It breaks my heart if you don’t have one.

Number two, the thing that breaks my heart is people don’t have an optimal choice on social security or they don’t take an optimal choice on their social security. What does optimal mean? The best one for you. You can always get input from people at work. You can always get input from your brother, your sister. You can always get input from the people that you have in the neighborhood. All of those inputs might be great, but here’s what you need to realize.

Just as you should have your own individual personalized written retirement plan. You also should have a personalized decision when it comes to taking social security at the optimal time. Why social security? Number one, almost everybody has it, unless you have a government pension and you didn’t pay into Social security, Number two, in 2023 Social Security was 41% of the average American’s income in retirement. That’s probably the biggest chunk. What are you going to do to pick it at the right time for you? Here’s what I mean. I had a lady one time named Gladys. I love to tell her story. She came in, she was in tears. She said, I’m $400 a month short and I’m 64 years old. I said, that’s okay. That’s why you came in. I started going through her documents. We got to her social security printout, her report that she got from the social security website, and I said, Gladys, how long have you been taking the $1,400 a month that you have coming to you for social security at age 64?

She said, I’m not. I said, why not? She said, because I went to a social security maximization workshop and they told me I have to wait until I’m 70 to take the maximum to get my social security maximization. Anybody could figure that out. Wait until you’re 70, you get the most, but this lady was $400 a month short, and when I went through all of her documents, guess what? She was right. She was $400 a month short, so what’s her answer? Gladys’s answer was to go down and turn the social security on. Gladys didn’t have an ira. Gladys didn’t have a 401k. Gladys didn’t have an inheritance that maybe she could have drawn some money from if it was the right thing to do and delay social security so it would grow 8% a year until she turned it on. Plus whatever cost of living social security gives each year.

My question is, what is your optimal social security and so many people miss this. You know what? I’ll just be blunt with this. So many advisors don’t even address this. They just talk about how much are you getting for social security? When do you want to turn it on? They don’t provide feedback and options to the client. The social security office isn’t going to give you your options or your choices. They’re going to give you information. You need to be working with a real retirement specialist who’s going to give you that written plan, number one, and number two, they’re going to make sure and work you through the process to find your optimal time to take your social security.

The third thing that really hurts my heart is people that keep doing in retirement the same thing they were doing when they were accumulating their money.

There’s two phases. I’ve mentioned them already briefly, one is in your working years with your 401k. You’re accumulating your wealth. In retirement. you’re preserving or distributing your wealth, making sure you have enough money, and it goes to the right people once you’re gone. Too many people get used to 40 years of accumulation, mostly using the market, mostly going through the ups and downs of the market as it goes through the rollercoaster, and as we’ve said before, most people when they get older don’t enjoy rollercoasters the way they did when they were in their teens or their twenties and financially, it’s the same way. If you stay in an accumulation mode, which many advisors keep their people in that, you may be shortchanging yourself. Not when you’re in your sixties or seventies because you might’ve saved enough to last through those years, but when you get to 80, are you going to be out of money?  85? Are you going to be out of money? That’s where that written plan comes in and that’s where so many people make a mistake.  Third thing that really breaks my heart is you’re still accumulating, and not preserving. I used to coach football. It’s like a football team that’s three or four touchdowns ahead with five minutes to go in the game. They don’t need to be scoring. They don’t need to be throwing the ball deep. They just need to be letting the clock run out of their life peaceably so that they make sure they win the game and so many people have won the game. I had a guy named Jim came to me and he came to me in about 1999 for the first time, and Jim came to me and he was in that accumulation growth period,  known as the .com boom where everything went up like crazy and everybody was making money in the market and it was supposed to be great because we’ve got this new technology called the internet and money’s just going to be growing on trees. Well, Jim stayed in the market, didn’t come over to us, didn’t take the written plan, didn’t make some things secure, didn’t move into the preservation stage with at least part of what he had, and Jim went through 2000 to 2002 where the market went down 47.4% during that three-year span, and he had just retired, and so he recovered a little bit. Then from September ‘07 until March of ‘09, he lost again 54.4%. Well, Jim had about $1.6 million in 1999, and he was taking out very little during those next few years. It was about 10 years before I saw him again in 2009, and Jim had not spent money, but the market had taken over 80% of what he had in those two downturns, and he was still taking out a little, he had gone from 1.6 million to $150,000 in his retirement savings, and he came in and met with me and he said, you know, Tom, I’m going back to work. He was 74 years old at that time. He said, I finally got a job to go back to work. He’s an engineer, and so he was going back to work. He finally got a job. He said, I’m not making nearly what I was, but I must go back to work because he hit that sequence the wrong way in the market where it went down twice over a period of eight years, and it just killed his retirement plan, his accumulation retirement plan, because he didn’t build a preservation aspect to it. He didn’t build an income flow aspect to it. I want you to use your money, not lose your money. So, it breaks my heart when the market takes away. The market giveth, but the market also taketh away and it’s not always blessed be the name of the market. Sometimes you must build a plan to take some of your assets out of the market and secure and ensure part of what you’ve got saved for retirement.

Let me mention one more. Number four is taxes. So many people have saved their money. We were told, put your money in a 401k. You won’t be in as high a tax bracket when you get to retirement. Tax brackets won’t be that high. You won’t be spending as much. All these stories we’re told, so you just pound that money away in the 401k and it’s good. You don’t have to pay tax on it when it goes in, so you got the full amount in there growing. It just grows. There’s no tax on it year to year. The only time you pay tax on that is when you start taking the money out. That’s retirement. And in retirement sometimes people are realizing that the biggest thing, in fact, I’m stealing a quote from one of my mentors, Ed’s slot who’s known as America’s Authority on IRAs and 401Ks, and he says that taxes are the single biggest factor that’ll separate people from their retirement dreams because you’re sitting there thinking, I’ve got $1.6 million in my 401k.

You don’t really have $1.6 million. You’ve got 1.6 million as a total in there, but part of that belongs to the government and they make the rules and they take their piece. When you take your piece out of your 401k, you’re going to be taxed on your 401k and your IRAs when you start taking money out, and then people say, well, that’s when I’ll start putting that money into a Roth where I’m never taxed on it again, I’m sorry, that’s not legal. The money you take out of a 401k for a required minimum distribution starting at age 73 is the age right now. You cannot put that money into a Roth. That money – get a load of this – has to go into an after tax account so that every year when it grows a little bit, you have to pay tax on that growth every year, so you’re going to get taxed on it by force even if you don’t need it, and there’s a certain set amount that goes up from 73 every year.

It gets a little bit more and more and more. A bigger and a bigger piece of your pie has to come out every year and you have to pay tax on it. You cannot put that in a Roth where you don’t pay tax on it. Again, you’ve got to put that in an after tax account so you get taxed on the growth of that again, and you want one more. Once you pass away and you leave that IRA to your spouse or your children, they’re going to keep getting taxed on it, and once you leave it to your children, they’ve got to take everything that’s left for them. Now, according to the rules since 2019, they’ve got to take everything out over a period of 10 years and pay tax on that, so taxes in your life, taxes in a surviving spouse, taxes in leaving it to your heirs in an IRA or a 401k taxes.

Taxes, taxes. Not planning for taxes is one of the biggest mistakes that it doesn’t just break my heart, but it’ll break your wallet as well. It’ll break your retirement as well. You say, why don’t people deal with this and tell us about this? Well, a lot of times the rules are constantly changing. They have changed dramatically in the last five or six years. They’ve changed five big times in the past five or six years, so a lot of advisors are just on automatic pilot and they don’t go to Ed Slott training like we do at Moseley Wealth Management, and they don’t stay up with the tax laws and the Secure act or what some people call the Insecure Act of 2019 and the 2022 Secure Act 2.0, and then the correction they had in 2024 in July where they spent 268 pages explaining the two laws that they had passed over the period of the last four years.

It’s a lot of stuff to stay up with, so some of the big box firms have just said, we don’t really want to deal with people on some of the things that could really help ’em. Roth conversions could really help you and could really be an advantage to you in your own time at your own choice, you develop and work with an advisor to have your tax plan rather than the government’s tax plan. For some of our clients that we’ve worked with, we’ve saved them half the taxes that they would’ve paid if they just paid it out on the government’s plan, but you’ve got to have that plan in place and it’s got to also include, what are we going to do with the taxes? How are the taxes going to impact us? Are they going to kill us? How can we avoid that? How can we pay less, maybe even half the tax on our IRAs and 401ks? It’s possible you just got to work with somebody who’s willing to address that and spend the time doing that for you. Breaks my heart when I see people who don’t.

So let me just give you two ideas. The first thing I talked about was having a written plan. You want to know more about that? I’ve got a whole show on that that you can check out. It’ll explain to you in detail just that written plan and what’s involved in that. Number two, Taxes. You want to know and understand more about Roth conversions that maybe your advisor is not talking to you about; you can check out our show on Roth conversions and Taxes and how you can do tax planning to save your money.

Look, I wanted to say, please don’t break my heart anymore, but the reason it breaks my heart is some of these things, if you don’t plan for them, it’s going to break your heart in retirement, and I don’t want to see that if I possibly can.

Hey, I hope this was helpful. If you want to see more about how we help our clients, go to our website, www.mosleywealthmanagement.com  As I always say, if you give me 8 to 10 minutes of your time, I’ll do my best to increase your financial knowledge and help you ease into retirement.