#52 A Kitchen Table Talk with Carl & Jane About Retirement

I'm still amazed at the level of engagement and transparency "Carl" has had throughout the process of creating his retirement plan on the show. I'm just as amazed at how much the series has resonated with you, the listener. Your questions, comments, suggestions and thank yous made the series better.

In this episode, you'll get to hear directly from Carl and Jane as we discuss the Can Carl series, retirement, planning, investing and where they go from here. Recently, while on a business trip, I had the privilege of spending an evening with Carl and Jane at their home. After a great dinner (thank you, Jane), we sat together and I recorded our conversation. Lots of pearls of wisdom here, so it's worth a listen.

A Personal Reflection on “Can Carl Retire”….

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On September 5th, 2014, a listener to The Retirement Answer Man wrote the following email to Roger:

Roger, 

New to you, impressed. Spent 30 mins in your library today - well done. Wondered if you'd be interested in doing a "deep profile" as a blog? I could share all my detail, you could use as a case study for a blog (keeping me anonymous, preferably?). I'm 51, manage my own $, have ~ $1.8 M net worth and pension, looking to sell house to downsize to cabin (2nd home at the moment),  have a detailed tracking of actually spending by month. Question: Out by 54, 55, or 56?  How much "cushion" is worth the extra time being a corporate rat vs pursuing our dream of RV'ing and working seasonal jobs in National Parks. I could share any level of detail you'd ask for to build an interesting case study. Interested?

That listener was me, who you all now know as Carl.

Three nights ago I had the wonderful experience of sharing dinner in my home with Roger and my wife (who you know as Jane), and found it to be a perfect celebration of success. Success via an innovative podcast series which grew from that seed of an idea first planted in that email 5 months ago.  It’s personally very rewarding to have conceived of an original idea and participated as the idea grew to a beneficial fruition, and I’d challenge all of you to seek similar opportunities. So…..

……What worked?

  1. Beneficial:  To me (free retirement review), The Retirement Answer Man (interesting podcast fodder) and The Listener (education and free resources).  Find something that brings value to folks beyond yourself.
  1. Mentally Stimulating: The podcast recording sessions with Roger were a blast.  I’ve been 100% “Self Studied” until now, having the opportunity to banter with a pro was stimulating.  Find something that stimulates your mind.
  1. Assuring:  Having a professional review of this critical question (Can You Retire?) goes a long way in steading nerves as you approach perhaps the most important decision in your working career. Find something that answers that “nagging question” in your life.
  1. Relationships:  They’re important, and a new relationship was built between Carl and Roger that I am confident will continue for years to come.  Find ways to build relationships.

To close:  Carl didn’t do anything extraordinary.  He came up with an idea (case study), identified the right platform (podcast), then approached the right person for the concept (The Retirement Answer Man).  Any of you can do the same, and I hope this series encourages you to try.

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Your Feedback

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From Dave

"After living through the dot com downturn in 2000-2001, I never really recovered in my ability to deal with the market volatility and staying the course in downturns.  As a result, I have generally stayed out of the market for many years. I know that inflation risk is an issue so I am slowly getting back into the markets.  I would like to see you cover a case study or set of recommendations / strategies that would address these issues."

From Kevin

"I’ve been enjoying your blog & podcast for the last three months, your content is interesting especially for finance geeks like me.  I would be interested in either another real world example or case study of a plan you've previously worked on that does not include a large pension."

From Ken

"I really enjoyed the podcast series with Carl.......I would like for you to do another with someone that isn't perhaps as well off financially and much closer to retirement... I think this would prove beneficial to all age groups."

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 You Get to Help Me Answer: Can Bill and Sally Retire?

 

Starting March 4th, I'll start a new series with a fact set based on your feedback. And the best part is, this time, YOU GET TO HELP. 

Just like last time, you'll have the chance to sign up to plan along side Bill and Sally and attend a live webinar at the end of the month.

Unlike last time, this will be a pure case study (no live subject) and you'll get to help build the plan for Bill and Sally. Each week, as we walk through each step of process, I'll ask you to brainstorm solutions to help Bill and Sally get close to their IDEAL retirement.

I'm still working out some of the details but here are the basic facts:

  • Bill is 56, Sally is 57
  • Married 13 years (2nd marriage)
  • Both work and their household income is $180k
  • 2 children, ages 20 and 25 (one his, one hers)
  • No pension
  • Started saving late (late 30's)
  • Worried about the markets and economy

More Details Soon (I think this is going to be great!)

 

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The Retirement Answer Man Episode #52

Well, hi there! Welcome to the Retirement Answer Man Show! Wow, that’s my radio voice. Welcome to the Retirement Answer Man Show. My name is Roger Whitney and this show is dedicated to helping you dream up your ideal retirement and then plan a course to work towards it and then finally to live out a plan that fits what you and your family care about most.

I’m a little excited about today’s show and a little sad, too. This is the wrap-up of the “Can Carl Retire?” series that we started at the beginning of the year. Today, you’re going to hear from Carl and you’re going to hear from Jane. Jane – yes, she actually broke her silence. Jane is speaking out! I had the privilege of meeting them yesterday in person. I was travelling to an undisclosed location for work and they happened to live fairly close to it so we decided to get together and they were nice enough to cook dinner at their home and I got to spend an evening with them and it was awesome.

What we did is, after a wonderful dinner that Jane prepared, we sat around the coffee table and just had a talk. Of course, I taped it. What we talked about was Carl’s thoughts from the show, you know, what his expectations were and whether they were met or not. Jane talked a little bit about her impressions of the entire process and her thoughts on Carl retiring. I know a lot of you have had questions on that so this is going to be a great wrap-up in their own words of this entire “Can Carl Retire?” series that we’ve had.

After that, I’m going to share some of the feedback that I’ve gotten from you about what you want to hear next on the show to help you in your retirement journey. And then, I’ve got something special to announce of something we’re going to start in March to keep this momentum going of everyone having the right conversations about retirement. I’ve been amazed, really amazed at the feedback and questions, the emailed question I’m getting, the voicemail questions I’m getting, not just about the “Can Carl?” series but about issues that you’re dealing with in your own life and that’s the whole point of the show. We’re going to try to continue that momentum with a new series starting in March that I’ll tell you about here in just a minute.

But before I get to that, let’s have that all-important disclosure. The music’s already stopped so there’s no happiness going on. Let’s make sure we address this and that is only you know your entire financial situation so think of this podcast, my blog, and most things on the internet as helping hints and education. Before you make any decisions in your life, consult the people that do know you, and that could be your financial advisor, you legal advisor, or your tax advisor. Now, that’s just plain common sense but, even more importantly, it’s a fundamental principle of planning well in your life.

Last week, I asked you for feedback and comments whether it was via iTunes or directly on the website and I heard from a lot of you and I want to share a couple of those and then address what we’re going to start next in order to fulfill the issues that you’re telling me that you’re working with.

First off, I want to thank a couple of people who left a review on iTunes.

I want to thank Ruben who said even though he’s in his 30s, he occasionally wonders about retirement. He’s actually enjoyed the series even though it’s very far off so that’s encouraging. The sooner you get started, Ruben, the better so thank you so much for sharing your reviews on iTunes.

And then, I want to thank SASRDT which was just a very nice review. Thank you so much. “Just some great information from an experienced expert.” Wow. I feel important now. “Delivered with practical sensibility for the lay person,” which is, you know, this stuff isn’t that complicated so it doesn’t need to get talked about in complicated terms so thank you so much for that review.

As silly as it sounds, reviews like these on iTunes do a lot. One, they just – I’ll be honest – it makes me feel good when somebody leaves a review. It just gives me some affirmation and we all need that from time to time but it also helps increase the visibility of the podcast so other people can listen and start to have those important conversations on iTunes.

If you use iTunes, do me a favor, just go to leave a review.

Now, I’ve gotten some direct feedback and I want to read a couple of them because they relate to what I want to announce about what we’re going to do next on the show.

The first one comes from Kevin. Kevin says he’s been enjoying the blog and the podcast for the last three months and he says the content is interesting, especially for financial geeks like him. I seem to attract geeks – like, I guess Kevin and Carl and others. “I would be interested in either another real-world example or case study of a plan you’ve previously worked on that does not include a large pension.”

As you know, pensions the size of Carl’s are not common these days. I’m married in my mid-50s with a couple of children and a spouse that works part-time and I’ve been able to save in a corporate 401(k) in taxable account over the last thirty years and I feel like I’m close but not totally sure.

“Keep up the good work! I’ve subscribed to everything and like the show.” And that’s been a question Kevin that I’ve gotten from a lot of people – “Okay, but Carl has this big pension,” and it’s true. That’s a huge benefit. Now, Carl did a lot of things right even with that, but most of us don’t have that. I don’t have that and – I can tell you from my planning experience – having it makes a huge difference so you’re right. Having a case study or a real-world example without a pension I think would be very interesting.

Now, Dave, he left some comments on my website and he says, “Thanks for addressing my question from the ‘Can Carl Retire?’ series.” I had answered a question for him that he had asked previously. “I would like a webinar on market risks and portfolio trade-offs. I need to overcome the fact that I’m very conservative and hold a much larger percentage of cash than I should. After living through the dot-com downturn in 2000, 2001, I never really recovered in my ability to deal with the market volatility and stay in the course during downturns. As a result, I have generally stayed away or stayed out of the market for many years. While I save a high percentage of my income, I don’t invest in the way I should. I know that inflation risk is an issue so I’m slowly getting back into the market and I would like to see you cover a case study or set a recommendation/strategies that would address these issues. I know I need to be in a more balanced investment plan and get back in, but I need to balance that with knowing that the most important thing to me is protecting the portfolio return of my money versus return on my money,” and that comes from Dave.

That’s a really important point, Dave. Thanks so much for sharing that with me. I think we all – even financial advisors – struggle with the same things regardless of what perspective we’re given on history and how things have operated in the past. We don’t live there, right? We live right here. Right here always feels very uncertain, especially with the way the news is structured nowadays. It seems like everything is about to implode on us whether that’s the market or government or debt or whatever it is. I think that concern is going to be something that’s always there and you’re expressing what I hear a lot from listeners so thank you so much for sharing that.

Here’s my big announcement that relates to both Kevin and Dave’s comments. I chose these two comments from many because they represent a lot of the issues that I’m hearing from you that you want to hear about. One is I think you’ll like the case studies.

Now, obviously, the “Can Carl Retire?” series was pretty unique. There aren’t many people that are going to be willing to be so transparent in their dreams and their current plan and all of their financial assets and cash flows. You know, that’s a pretty sensitive subject for a lot of people so I think that was a really unique experience.

We’re going to explore how we find those type of people to do live planning with real individuals but what we’re going to start in March, and we’re going to start this on March 4th, we’re going to start a new “Can…” now it’s going to be Bill and Sally. “Can Bill and Sally Retire?” and we’re going to do this as a case study so I’m not going to have the actual Bill and Sally. But what I’m going to do is I’m going to take a case study from people that I’ve actually worked with and walk through – obviously, I’m changing lots of things so the confidentiality is protected, it will be conglomeration of a number of people probably.

We’re going to take a case study of Bill and Sally and here are going to be the basic fact set for Bill and Sally:

• They’re both 56.
• They’re married.
• They have two children – they have one adult and one child that has two years left in college so they have some college expenses.
• Bill has a corporate job and Sally works as well. They have saved all their life but they started a little bit late in 401(k) and normal accounts.
• They don’t have a pension and they’re really wanting to leave their full-time careers but they still want to earn some income. I think they really know they’re going to have to earn some income and we’ll get into that but they want to do something. They don’t want to be like Carl and Jane and really just check out and, you know, travel the country. They want to work. They want to do something but they want to do it more on their own terms.
• They also have a lot of worries about the market and the state of the economy and they don’t know who to trust in terms of figuring a lot of this stuff out.
This is the general fact set that I’m putting together for Bill and Sally. Starting March 4th, for the entire month of March, we’re going to walk through, step-by-step, Bill and Sally’s ideal retirement and what their needs, wants, and wishes are. We’re going to walk through their cash flow situation now in terms of what they’re able to save and what they’re spending plus their cash flow situation when they retire. We’re going to walk through their net worth statement and some of the expenses they have coming up like two years left of college and a few other things and then walk through “Can they achieve that ideal retirement? If not, how do they prioritize so they can reach a retirement solution that fits them best that has a confidence of actually occurring?” This is going to be all without having any pension and with being very sensitive that one of their priorities is not taking a lot of investment risk because they’re worried about the market or getting to a certain level of investment risk that they’re comfortable with since this is a sensitivity for them.

This is going to be the fact set for Bill and Sally that we’re going to walk through in March and we’re going to do the same thing we did with Carl. Throughout the month, you can plan alongside Bill and Sally and I’ll try to share the resources that we shared with Carl and Jane if you planned alongside. But I’m also going to try to add more video tutorials and some more worksheets to help you along the way so we can keep having these retirement discussions that I think are ones that we should all be having. And then, we’re going to have a webinar at the end of March where I present like we did with Carl – and that was my first webinar so hopefully this will have a little bit less tech issues, I guess – and we’re going to walk through this fact set. It’s similar to how we walked through Carl and Jane on January’s webinar.

That’s what we have coming up in March. I’m excited about this. I’m doing this as a response to what you’re telling me you want so hopefully this is something that resonates with you. Keep the feedback coming.

As you’re planning for retirement in your life or if you have topics that you want me to address, shoot me an email. Go to my website, go to “You Ask, I ANSWER” and I’ll respond to you and I’ll incorporate that into the content that I try to create to serve you and that will help us all have the retirement plan conversations that matter.

Now, just last night, I had dinner with Carl and Jane. We sat around their table. You can hear their four dogs running around the house as we talked. Right after dinner, we just sat down and had a glass of water and put the tape recorder on to share some of their thoughts so you can hear their debrief on the whole series and you can actually hear from Jane about some of the things that she’s excited about, some of the things she’s a little bit afraid about or worried about, and how they’re planning to live this retirement or what their concept of retirement is – which, for me, was really cool to hear on a first-hand basis, without someone directing them, letting them say exactly what their concept of retirement is for them.

Here’s our conversation with Carl and Jane.

ROGER: We’re here at an undisclosed location, in a safe house, with Carl and Jane. So, what did you think of the experience, Carl?

CARL: I’ll tell you what, Roger. It was an honor to treat you to dinner tonight in our home because it was absolutely fantastic. We really, really got a lot out of it.

ROGER: Yeah, it was awesome. I got to meet Carl for the first time in person and Jane. Jane, what did you think of this whole experience and having all this done overtly?

JANE: I thought it was good for Carl’s piece of mind because he was, you know, wondering about it and worrying about, you know, the time to retire and if it would work out and if we would be financially able and be able to do what we normally do financially. It was great for him so it was great for me.

ROGER: You didn’t worry about having everything just out there?

JANE: No.

ROGER: No?

JANE: No.

ROGER: No? Okay. Now, it’s interesting, some of the questions that we had were, “Well, what does Carl’s wife think about all this stuff?” because he was the one saying everything, right? Because you were involved but in the background. Are you in a line with him being home so early? I mean, he’s going to be 54 if we go on target. That’s a lot of time to have him around.

JANE: Yeah. I mean, I’m looking forward to it. I’m really looking forward to getting up to our cabin, selling our house and living up there full-time and starting to travel with the fifth wheel that’s something I’m really excited about.

ROGER: Yeah, one of the things you guys talked about today during dinner was the fact that you guys are used to moving a lot.

JANE: Yeah.

ROGER: Because you lived in the corporate world so it’s not as much of an adjustment as it would be for most people.

JANE: Yeah, no, it’s really not. I’ve enjoyed moving. I grew up in the same house for my whole life until I married Carl and, since then, we’ve moved quite often and I’ve really enjoyed the experience. You know, you meet new people and you get a different house. To me, it’s a lot of fun to move.

ROGER; I’m curious, what’s your biggest fear about him retiring from not working after 29 years of earning income and everything else?

JANE: I can’t really think of a fear. I mean, I joke with him a lot because he’s a very Type A, you know, active type of guy and a lot of Saturdays would be like, you know, “Let’s stay home and do nothing.” Halfway through the day, he’s antsy and wanting to get out and do stuff. That might be it. That might be, you know? But I know some of the plans that we have in store, you know, to do some work camping type of things, you know, and to volunteer a lot – that type of thing. So, I think we’ll keep busy.

ROGER: From a financial perspective, do you have any worries?

JANE: No, I really don’t.

ROGER: No?

JANE: I mean, he’s always taken care of everything so I know.

ROGER: And he is a spreadsheet guy.

JANE: Yes, he is.

ROGER: He demonstrated that very clearly.

JANE: Very much.

CARL: You know, it may actually be interesting, when we first got married, obviously, when you’re on your own, you do everything, right? With me starting to work, we kind of talked about it and I said, “You know, it’s kind of hard for me to do all the bills and everything when I’m working.’ So, from very early on in our marriage, Jane started doing all the bills and I started doing the investments and it’s just been a really balance of responsibility. At the same time, I think the process has been good because it’s exposed her to some of the strategy around the retirement planning and I think you’ve grown through that but she’s never really worried about it. She’s always like, “Oh, Carl’s got that. If he said we’re good, we’re good.” I think it’s worked out well that we’ve both kind of split up the responsibilities in different areas.

ROGER: And that can be a good thing and a bad thing. My household’s the same way. Actually, I do all the bills and more of the planning. My wife, it’s just the natural division of labor and I always challenge her a little bit. It’s like, “You at least need to look at it every now and then because, on the flipside, it’s a big responsibility.” If they’re totally outside the loop of what’s going on, that’s how problems happen too, right?

CARL: Yeah.

ROGER: Even if it’s without intention – good intentions of bad investments. It’s probably good that you have some clarity as to the bigger picture.

CARL: And that’s part of the, you know, we talked about the love letter in whatever episode it was – three, I think – and I think that was part of what drove that. Let’s try to find a way that we can make sure, if anything happened to me, she would know, and then we sat down and went through it. Every year, I show her kind of our net worth.

ROGER: Okay. So, you guys have done that?

CARL: Yeah, she sees what the numbers are but you don’t really care what’s behind it.

JANE: No.

ROGER: Yeah, but you know, that’s good.

JANE: I know, yeah.

ROGER: Now, I want to talk a second because, during dinner, you guys talked about this work camping thing. From a concept, explain to me what it is.

JANE: Well, basically, there’s some sites out on the internet that you can look up jobs that are different types of the season and different lengths of time and people put it out there. Like, one we talked about over dinner was a llama farm that they would want somebody to come and they would lag at a camp there and your electricity and everything would be included but you would work on the farm for like twenty hours a week and it’s part of your payment for staying there and you get the experience. It’s those kinds of things.

ROGER: I had not heard of those before. I guess I had in passing but not so much from a retirement perspective because I think the kneejerk, “Okay, Carl is going to retire at 54 after 29 years of working. You guys are going to be home in the same house.” But, really, the way you described it, you’re going to have a nice little camp, a nice little home base, and really you’re going to be doing these different jobs across the country and having these amazing experiences and saving money because you’re bartering your work for the slot for the trailer.

CARL: That’s the thought. And, you know, we might take some time where you don’t work for a while and, like, “Hey, we like this particular area,” and between these seasonal jobs maybe you just take three or four months and truly do just travel. You know, we’re open to however it goes. We’ve also looked at – I think we mentioned this on one of the podcasts – the home exchange where you can actually swap homes. Since our cabin’s in a pretty desirable location, we can swap homes with somebody in Norway and there’s websites that let you do that and you can go live in Norway for two months while they live in your house. You know, we’ve talked about all that kind of stuff and we’re just going to kind of see where it goes.

ROGER: Okay. From your perspective, now, you were going to look at that first email that you sent me.

CARL: I will do that, yes.

ROGER: Because this whole thing was your idea.

CARL: It was.

ROGER: You frugal guy, you were bartering for it and it was a good deal.

CARL: Yeah, it was, it was. I was going to say I got what I paid for but that’s not what I meant to say. I got way more than I paid for!

ROGER: Relative to your expectations going into this, how do you think it turned out since we went through the process and the podcast and then the webinar? It’s okay if you say it was horrible.

CARL: No.

ROGER: Okay.

CARL: I would tell you that if I felt that way but I don’t. I think it exceeded my expectations. I think, when I initially thought about the concept, it was really a way – as Jane said – you know, I’ve done my own numbers but I was kind of seeking assurance. “Am I on the right track?” That was really my thought – just have somebody that does a really good retirement podcast to kind of do a one-podcast episode on “Is this guy going to make it or not?” To have it turn into a four-part series with a webinar and, more importantly, the relationship we’ve developed, and I think the benefit to you in terms of having more people listen to the podcast, I think we’ve really hit a core note with your audience.

ROGER: Yeah, it definitely came through.

CARL: It makes me feel really good that it was just an idea and it’s turned into this month-long series. It’s really been great.

ROGER: Very cool. What were some of the unexpected things? What surprised you from it? I guess, obviously, it turned into more than the original concept which I think worked out really well but did you have anything surprising from the process? Whether it was dreaming your ideal retirement or I’m guessing the financial stuff was pretty dry for you.

CARL: Yeah, I think trying to stretch yourself was interesting because that’s the part that I hadn’t really looked at and thinking through – I think we talked about this on the webinar – that trade-off of “Do you work a little longer to get a little bit more?” or do you say, “No, I’m content with this.” What are your needs, wants, and desires, right? Stratifying those isn’t something that we’d really talked about. That’s number one. Probably the second one – and, you know, Jane and I talked about this when we went through the webinar together after I did it live – looking at it with the Monte Carlo and recognizing how volatile this really is and you can’t really now as you’re going into it, that was probably helpful to me because I kind of want to know, right? You just know you can’t know. You know your probability and then you adjust as you fly, you know? I think that was probably a good learning for me.

ROGER: Oh, it seems like it’s all science, right? It’s all numbers and spreadsheets and there’s a lot of science and math in it but then there’s a lot of just totally unknowable and art in trying to figure it all out and put it together.

CARL: Exactly, yeah.

ROGER: It was interesting how you talked about that trade-off between working longer and not because I’m dealing with a case right now where the deal-breaker – you know, if you do your ideal of exactly everything you want – not only does it allow you to prioritize the things that you might have to give away but it also helps you identify what the deal-breaker is. Like, I have a case right now where the deal-breaker is they will not work longer.

CARL: Ha! Interesting.

ROGER: That is their deal-breaker. For them, the discussion goes, well, if you’re not willing to work longer then, well, something has to give and that means you better be willing to give in some of these other areas.

CARL: Yeah.

ROGER: It’s always important to know what your deal-breaker is, right? For you, you didn’t really have a deal-breaker because it was a little bit more flexible but it was definitely you wanted to be getting out earlier and you couldn’t save anymore – that was one.

CARL: Yeah.

ROGER: Because you’d already saved a lot.

CARL: If I think about the other benefit – unexpected or you know – I think getting Jane more involved. You know, we talked through all the podcasts together, we went through the webinar together. I think it’s helped kind of talk together about kind of the broader financial strategy in retirement instead of just, “Hey, what are we going to do?” It kind of got her a little more exposed to the financial side of it which I think has been good.

ROGER: Did you actually listen to everything?

JANE: Yes.

ROGER: You did?

JANE: I did.

ROGER: Was there anything surprising to you?

JANE: No, I don’t think surprising.

ROGER: No? You didn’t hear him spew out a goal and you’re like, “What?!”

JANE: No, it was interesting though when you had him go through his best case scenario.

ROGER: He didn’t want to do that.

JANE: No, that would be hard. While we were listening to it, I was trying to think in my mind, “What would I say?” I mean, it was very similar but that’s really hard.

ROGER: Yeah. Yeah, it is. If you’re in a position to retire, you’ve already been pretty prudent.

CARL: Exactly.

ROGER: And willing to self-sacrifice because that’s what got you there.

CARL: And I guess that’s the other thing I would say, too. You know, you always learn. Obviously, we’re retiring very young, and I’ve thought through, actually, today, I was out walking the dogs before you got here and I was thinking about it. You know, I think the power of compounding, you always hear about it but, you know, I started right out of college, 22 years old, started putting in 20 percent of my pay. As soon as Jane and I got married, she was working. We said, “Okay, you know what, we know you’re not going to work forever. Let’s take all your pay and put it into savings and we just live on my pay so that, whenever our child comes along, you don’t have to work and we’re not dependent on it.” Somebody once told me, it’s relatively easy to get wealthy – you just spend less than you make and it do it for a really long time. That’s so true because that’s all we’ve done – just always been careful. You know, we don’t skimp and save. You know, we go on nice vacations every year. We buy a relatively modest home for my income level. We buy relatively modest cars. But, if you can just consistently save 15 to 20 percent and do that for a long time – and I’m blessed with a pension, we get that – but it’s not that hard to get yourself to where you can be financially comfortable. You know, the US is a great country. You get opportunities and I think that was kind of proven through the webinar.

ROGER: Now, one thing we didn’t talk about and really address – well, I sort of did it on purpose – because everybody wants to talk about this subject which is investing. Everybody thinks investing is a number one when, really, in my view anyway, what’s a number one is all the things that we actually discussed and investing are a portion of that. You know, you talk about how you save prudently over and over but I’m going to guess – and you correct me if I’m wrong – as you invested, it was fairly well diversified and you didn’t really mess with it a lot.

CARL: Absolutely, buy and hold, from the very beginning, and very diversified – as diversified as we could be from the earliest possible age and we never touched it.

ROGER: And that means you went through the tech bubble where you were probably getting less than average returns when things were really running crazy.

CARL: Yeah.

ROGER: And then, you went through the tech crash which you probably felt.

CARL: Yeah, I’ve got a funny story I’ve got to tell you. What we’ve always done, if we take a little bit of money on the side – it’s not play, I mean, you know, it’s a very small percentage of our overall portfolio – and I do crazy trades, right? TD Ameritrade. Right during the tech bubble is when we first got started on this. We got a small, small inheritance from my grandmother. It was like, “Hey, I want to put $10,000 or whatever it was in this TD Ameritrade.” One of my first big bets was the tech stocks that absolutely cratered, you know, six months after we bought it.

ROGER: You remember the name?

CARL: I do. Should I say it?

ROGER: Yeah, go ahead.

CARL: I2. Do you know I2?

ROGER: I know it very well, actually.

CARL: They cratered our first foray into independent trading. It just reinforced the buy and hold because you don’t know what you’re doing. You better just go with play money and not something that’s really significant. Anyway…

ROGER: Yeah. And then, you went through 2008 and 2007.

CARL: Yeah.

ROGER: If you were well diversified, peak to trough, you probably saw almost half of it go away on paper?

CARL: Yeah, but, you know, I guess the way I looked at it and, obviously, Jane was fine. She doesn’t really worry about this stuff – you know, she just looks kind of over your ear, “How are we doing?”

ROGER: If it doesn’t work out, she’s going to worry.

CARL: That’s true. But I’ve always looked at it where, if you’re far away enough from retirement, you want the stock market to crash because you want to buy cheap. A crash is a good thing, right?

ROGER: Yeah, it’s counterintuitive.

CARL: It’s counterintuitive but I’ve always really felt that way. If it’s collapsing, yeah, you kind of get nervous. You’re like, “I’ve got twenty years so it doesn’t matter.” Now, obviously, we’ve got probably too much in cash. It’s clear that I’m becoming more cautious and conservative as we get closer to the retirement date because you can’t necessarily write out the big downturn.

ROGER: Exactly. You’re really in the hot zone of that three years before and three years after retirement and your hot zone’s going to be wider because you’re retiring earlier.

CARL: Yeah.

ROGER: The reason I wanted to bring all of that up is because we didn’t talk about investing on the podcast or in the series. The other reason is – at least studies show – that most investors drastically underperform in the very things they’re investing in mainly because they are moving when they’re fearful or moving when they’re optimistic and so they end up buying high and selling how and repeating the process. You’re a testament to not doing that and having the Rip Van Winkle type of issue which is really hard to do.

CARL: Yeah, it is.

ROGER: Do you have any final thoughts, Carl? Now, what we’re going to do – I think we talked about this before – we’re going to check in with you from time to time and have additional conversations and updates so we can know exactly where you’re at and get a feel for that and hear how the llamas are when you get to that. But do you have any final thoughts from this whole process or anything you want to share?

CARL: I guess the one thing I would say is, you know, I’ve been pretty much managing the investment side independently for close to thirty years now. I think there is value in dealing with a financial professional when you get to these really critical decision points. Okay, I had a creative way of doing it and I gave you a call and we made this thing work, and I’ll write a little guest post as we talked about earlier during dinner, kind of my thoughts on the whole process. Regardless, I think there are certain times in your life when you’ve got to say, “This is a big enough decision.” You’ve really got to do something a little beyond the ordinary to make sure you’re in good shape and retirement clearly is one of those where you’ve just got to know. It’s too big of a chance.

ROGER: And there’s really only one person to get all that information from.

CARL: Absolutely! Roger, the Retirement Answer Man!

ROGER: Now, I didn’t know he was going to say that, I just had to throw it out there because it was just funny – to me, anyway. But, anyway, do you have any final thoughts, Jane?

JANE: Not really, I just really appreciate you taking Carl’s idea. He’s enjoyed it immensely.

ROGER: Yeah, it’s been a blast.

CARL: Yeah.

JANE: It’s been fun to watch and I appreciate it.

ROGER: It’s amazing that I came out to this area to meet another client and it just worked out and it’s a great thing so thank you so much for being part of it.

CARL: Absolutely!

ROGER: Well, there you have it. You have it from the family.

It was an amazing evening spent with them. I’ll tell you, it felt very cool to be able to wrap it up. It was just happenstance that I was in their area right after this all had concluded. I think that happened for a reason so I was very excited about that.

Hopefully you’ve enjoyed that series. From the responses I’ve got, I think it’s really resonated. I’m really excited about March and Bill and Sally, right? Bill and Sally? Yeah, Bill and Sally! See, they’re made up names obviously so I’m going to have to get to know Bill and Sally by their name. But I’m really excited about that for March. I hope you are, too!

I’ll have more information on that next week.

Until then, this is Roger Whitney, the Retirement Answer Man.

[/spoiler]

RESOURCES MENTIONED IN THIS EPISODE

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Ask Roger a question

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

 
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