Speaker 1:

Are you spending too much money in retirement? We have a lot of people come into us, particularly people who come to us from other advisors who’ve maybe not done the planning that we’ve done and they’ve just got a portfolio, and instead of really having a retirement blueprint that we provide for people and a retirement plan, they just really have a statement that shows how much money they’ve got in their account. Okay? Now, a lot of people come in and they want to go through retirement and they walk out that door of retirement and they’re on their own paycheck.

And here’s the issue. You have to start paying yourself from your retirement. And the conditioning that you’ve had is 30, 40, 45 years of putting away money, putting away money, putting away money, and you’ve been good at it. You’ve disciplined yourself, you’ve not wasted money. Maybe you haven’t gone out to eat six nights out of seven of the week and then had cereal the other night. You haven’t done all of those things that a lot of people are doing and they’re spending their retirement right now, but you’ve been a good saver. And here’s what I find. Good savers sometimes have trouble, have very much trouble learning how to spend their money in retirement because now it’s time, instead of accumulation, you’ve got the distribution phase or the preservation phase to make sure you don’t run out of money.

And you’re going to go through stages of retirement. The first stage is the go-go stage. The early stage of retirement is really when you should spend more money because your health is good, your bucket list is big, and you want to go do things that you’ve not been able to do because you’ve been tied down by a job. We call it the go-go stage. And what’s going to happen is you’re going to go to the doctor one day, or if you’re married, you spouse is going to go to the doctor and they’re going to say, “You’ve got this or that and we need to you to bring your spouse the next time you come in.” Or if you’re single, they’ll say, “Maybe somebody needs to come with you next time” and maybe they don’t give you the best of news and all of a sudden you find yourself in the slo-go years. And then if God gives you a long time to live, you find yourself in the no-go years.

So how can, with the uncertainty of, am I going to run out of money? Am I spending too much money in retirement? How can I spend most of the money here? Because you’re going to spend overall less money here than you’re going to spend in the early years of retirement. Let’s call this the 60s, the 70s, and the 80s. Not to put numbers on you because you’re different than anybody else, but how could I spend the money I want to spend in the 60s but also know that I’m going to have the money I need to spend in the 80s? Because that’s the issue. There’s uncertainty. You’re uncertained as to, am I going to live to my 80s and 90s? And if I don’t live to my 80s and 90s and you’re married, is my spouse going to live to 80s and 90s? My husband going to be here? Is my wife going to be here? What’s going to happen to them after I’m gone? So that’s the cloud of uncertainty.

Now, when somebody comes in and that’s their issue, there’s a four letter word I’m going to give you that will solve that, having a retirement plan, P-L-A-N, where you address certain issues earlier. I call it putting all your money in a funnel. And the first thing you do is you guarantee that you’re going to have guaranteed increasing income for as long as you live. And if you’re married, for as long as your spouse survives you. All of those things are important in a plan.

Now, how do we address that income issue? We call it making sure that you have the right paycheck. That’s the most important thing. In retirement, it’s not your lump sum and how much money you have. It’s your income and how much money you need to make the bills and to pay the bills and to do the things that you want to do. So it’s your paycheck that’s important. It’s your income that’s important. And once you have a plan… See, a brokerage statement from one of the big box firms doesn’t answer that. It’s, oh, there’s a 65% chance this might last until you’re… That’s not giving yourself a plan where you’ve got guaranteed increasing income for as long as you live and as long as your spouse lives. That’s a paycheck that you have to take that money that you’ve been saving and begin to spend it out. And you need to allocate in a plan where you tell a certain amount of your money, go do that for me. Give me my paycheck for the rest of my life that’s guaranteed increasing as long as I live, and if I’m married, as long as my spouse is still here and still alive. So your paycheck is important.

Now, what that does is, think about it, that gives you the freedom to know that in my 80s and 90s I’ve got that income coming in that I’m going to need. I’ve got the money for my basic necessities. That’s your paycheck. And so then what? Everything that’s left becomes your paycheck. That’s what allows you to have the confidence and the freedom and the peace that will allow you to say, okay, we need to go to Bora Bora. Okay, we want to go to Australia. We want to go take that European River cruise. The peace to know that I’m going to have my income taken care of with my paycheck. That’s guaranteed. I pass the risk off and now the paycheck is what’s left and I know what I can use. I know what I can spend.

So the go-go years, you can still go and still do, but you take the uncertainty about are… I’ve had people ask this, are we spending the money we are going to need when we’re 80 and 90? The answer is, if you’ve got a plan, that’s not a question because your income is taken care of by addressing your paycheck, and your playful of money and your fun money is taken care of by taking care of your playcheck and doing the things you want to do. Because remember the stages, you got to do it in the go-go stage because before you know it, you’ll be in the slo-go stage. And then, if you’re given a long life on this earth, you’ll go into the no-go stage. So it’s really important that you have a plan. Just like you had a plan to grow the money, you need a plan to spend the money and to use the money in retirement. That’s what we do at Moseley Wealth Management.

If you want more information, send us an email, info@mosleywealthmanagement.com. That’s M-O-S-L-E-Y. You can call us at (714) 421-4288. And just like are you spending too much money in retirement too early, we can give you some confidence that you can spend what you need to spend during the go-go years and not run out of money when you’re in the no-go years.