transcript
Speech-to-text transcription can look a little quirky. Please excuse any grammar or spelling errors.
Episode #486 - The 8 Pillars of Rocking Retirement: Financial - Vision and Feasibility
Roger: The cat said, "where are you going?"
Alice replied, "which way should I go?"
The cat said, "well, that depends on where you are going."
"I don't know." Alice said.
"Then it doesn't really matter which way you go,” said the cat.
INTRODUCTION
Hey there.
Welcome to the Retirement Answer Man Show. This is Roger Whitney, I'm your host, and this is the show dedicated to helping you not just survive retirement, but do you have the confidence to lean in and actually rock retirement because you've done the work. It's about that confidence. Welcome to the show.
That is Louis Carroll from Alice in Wonderland. If you don't know where you're going, well, any path will get you there, right? That comes into play when we talk about the first two pillars in the financial realm of rocking retirement, and that is having a vision of where you want to go. Then pillar two, having a pathway that is feasible given the resources you have to achieve that vision.
Those are the first two pillars we're going to talk about today. In addition to that, we are going to answer your questions as we always do, as well as in the Bring It On segment, talk about passion. Happy people have projects, what projects are you going to have to make you happy and interesting. We're going to do that in the Bring It On segment.
We got a lot to cover today, so why don't we get started.
Quick announcement, because I'd be remiss by not letting you know that tomorrow May 11th, we are having open enrollment begin for the Rock Retirement Club for about four or five days. We have an online open house tomorrow evening, May 11th, as well as one on Saturday around noon central. You can learn more about that and register at livewithroger.com.
We're going to talk about the four pillars or stages of creating a financial retirement plan as well as share a resource, a retirement plan summary document that you could use and answer your questions about how the Rock Retirement Club has everything to equip you to have that confidence to rock retirement.
So go check that out at livewithroger.com.
All right. Today in our main segment, we're going to talk about the first two pillars in the financial realm. There are four pillars. Today we're going to talk about vision and feasibility. Next week we're going to talk about making a resilient plan and optimizing that plan. That's the four pillars within the financial realm.
FIRST PILLAR
We're going to start off with vision, and that's why we started off with the quote from Alice in Wonderland.
What do you want? Man, that's such a hard question. The more you ask it, what do I want? What do I want? It can be easy to answer for dinner, but if you're sitting here at age 60 or 65, what do I want when it comes to retirement can be really intimidating, right?
What do I want in retirement? I'm 56. When I think of what do I want, we just went through this from a business planning perspective, what do I want this to be in 10 years? That is such a foreign idea for me. I don't know. I mean, I have some ideas, but it's. Very low resolution. It's a little foggy and I know that it could be a lot of different things.
Up till now in your professional and childhood life, you've sort of been on some guardrails, so to speak, of you were going through K-12 education. Yes. You had some maybe choices in the classes you took, but you were going from grade to grade and then you got a career, and you went from position to position.
There were some guardrails focusing your efforts and the appreciation and the admiration and the compensation along those rails. When you get to this retirement stage and this first pillar of vision, you encounter a lot of obstacles, and we're going to talk about those.
So, we know what we're talking about, and that is your vision. Where do you start to figure out your vision?
We would suggest that you start. In reassessing yourself a little bit, taking a breath and starting to reconnect with who you actually are outside of your identity and work and these rails of professional career that you've been on, or these roles you've played as a mother or a father or a husband or a spouse, and really who are you?
I would challenge you to go down some touchy-feely avenues of what are your core values, and we've shared the core value worksheet many times in our 6-Shot Saturday email, and perhaps Nichole who is listening, we can share that in 6-Shot Saturday this week. But what are your values? Because the idea of your values are that when you are your true, authentic self, you are living a life that encompasses these values.
I have my plaque here I grabbed. My values are my relationship with God, quality, relationships, freedom, laughter, adventure, fitness, service, continuous improvement, positive attitude and bravery. I established those maybe five, six years ago, and I use that as my measuring stick as to am I living in a congruent way with my values?
Adventure is one I've always struggled with as my life has gotten busier with chatting with you all each week and the club and working with clients, I have gone through periods where I've saw, well, I say adventure is a value for me. But when I look at how I'm living right now, I haven't really embraced that.
I'm not living that value, so I'm not congruent with really who I am. This exercise of establishing what are the things I want my life to look like from a value standpoint, that's going to help stage the next step of vision, which is creating the things that you want to do, the environment that you're going to be in, et cetera.
The identity you're going to have in retirement to make sure that those things incorporate the things that you actually say you value, right? Sort of touchy-feely stuff.
Now, what are some of the obstacles? Well, let me step back a second. What are the objectives here? I think the core objective here in establishing your vision is much less, this is my opinion anyway, there's a lot of different ways you can go about it, is not so much projecting forward where you're going to be in 20 years from now and everything that's going to be happening. The approach that resonates, at least with me, maybe not with you, is the objective is to minimize future regrets.
A challenging question you can ask yourself in this first pillar of vision is okay, what would my 90-year-old self say? What would they want from me? Or what would me on my deathbed looking back at my life, want to make sure they didn't have regrets about Bronnie Wares book, The Five Regrets of the Dying is a good framing for that. If you've ever read that book, we've talked about it a lot before.
How do I live a life that will minimize those regrets, and from a stoicism standpoint, you can actually have a relationship with your 90-year-old self and have that be your guide. Keep asking that person, Hey Roger, dude, who's 90 and still doing well, what should I do here? What would you want me to do here, to try to minimize regrets that we have. I think that's the objective.
The last objective I think is if you are married or have a partner, you want to have not just your vision, but your partner, your spouse wants to have their vision so you can come up with your shared vision where you're each getting some or most of what you want together, because it's not just one person in that case.
All right. So, if that's the objective in this pillar of vision, what are some of the obstacles to creating a vision? One obstacle is going from a sower to a reaper, meaning that you have worked, earned, built a life, saved and seen those savings grow by investing. You've been in accumulation mode for decades. You are likely really, really good at denying yourself and accumulating assets and updating your net worth statement and seeing the balances go up and seeing the amount that you're saving. That is like you having really, really strong chest and arm muscles. You're really good at that.
When you retire, an obstacle can be, you're so strong in one area and retirement is asking you to do totally different things. Take the person that's really strong in their chest and arm muscles, now you're being asked to do squats and lunges, and you haven't worked out those muscles necessarily. In retirement, that's going to be, well, you're not earning money anymore. You're not saving anymore. In fact, you're not just not saving, you're taking money from your resources.
So rather than see your net worth growing because of all these reps you're putting in, you're being asked to do the opposite, the reaping part of it, to use these resources to actually spend on memories and experiences and things, et cetera. That is super hard for someone to do if they have really strong accumulation muscles.
So, this is an obstacle we got to navigate. You're not going to get over it. You're not going to suddenly be the legs person. This is a journey that you're going to struggle with probably for years, and it's actually not a bad thing to struggle or manage, but it's an obstacle if you're not aware of it.
Second obstacle to creating a vision is you're trapped by the life that you've created.
You've essentially created a cage for yourself. You live where you live, probably because of work commute or school districts or parents and family units. Outside forces have channeled you to where you live, the friends that you have, the things that you do, et cetera, and when you are getting closer in retirement, we think within that paradigm.
This is not a bad thing necessarily, but it can be an obstacle for you to think about, well, what could be. What I find people end up doing is playing a game of inches, is what I call, they take their current environment, their current life, and make small tweaks to them.
That's not necessarily a bad thing to do, but it will eliminate a lot of possibilities that you should at least have on the table. This game of inches might be the right approach, but maybe you need a whole blank slate.
I think of this when it comes to a retirement plan or investment portfolio, I like to build an investment portfolio or retirement portfolio that is not even considering what someone owns, what should be not being trapped by the baggage of what is. Once you do that, it doesn't mean you just flip a switch and change your entire life or change your entire retirement portfolio, but what you can do is start to figure out how do I reconcile the two in a way that I'm comfortable with? So that's an obstacle. Is this being trapped by what is.
Then lastly, we've talked about before is you're institutionalized.
You are in Shawshank Redemption; you're trying to make decisions about a future that you haven't lived. We think of the main character, Morgan Freeman's character in Shawshank Redemption, when he was getting out, it was scary. In fact, there was someone that got out and he couldn't handle it and committed suicide.
You have been on these guide rails of work and school, et cetera, you're institutionalized.
How are you supposed to know what you're going to do in retirement next year, the first year or 10 years from now? How are you supposed to know? You don't know, and so there's going to be a process of getting outside of your mind and understanding that you got to iterate on this and you're probably going to change your mind a lot.
So that is the first pillar. What is the vision? What is the representation of the things that you want to be doing and the people you want to be doing with, and the places that you're going to be doing them. That's even before goals, right?
SECOND PILLAR
So, let's get to the second pillar in the financial realm, and that is having a feasible plan, is it feasible?
So, you cast this amazing vision. What are we trying to do in the feasible realm? We're trying to count the cost to make sure if we go on this grand adventure, we can actually afford it and not run out of money, and it will challenge us if our vision isn't big enough.
The objective here, in the feasible pillar is to establish a foundation of a safe path that we know that is at least feasible given the resources and the choices that we're willing to make and to make choices about your resources, to negotiate with yourself to get most of what you want if you can't have everything that's in your vision. So that's what we're trying to do here.
What are some obstacles to doing this?
Well, one is binary thinking. Meaning that I retire, or I work. I buy the lake house, or I don't. This binary thinking of, and that's a normal way to think because it's a very simple way to think if you don't get a little bit more elegant with it.
Whereas like a light switch right, on off, almost every decision you have can be a dimmer switch. There can be lots of in between, so you want to be aware of that. The next is thinking about your spending because you're going to take this vision and you're going to put cash flows to them, how much you want to travel, how much you need for healthcare, how much you need for a car every five or six years. You're going to put numbers to goals that encompass the values that you want to live by, and it's very easy to think in a one-dimensional way about that, in that it's just one category and I need to get all of that.
My recommendation as you're establishing this pillar, is going to be to think more multi-dimensional of, okay, first, what do I need for a base great life, that needs category.
What is that? Then what is discretionary or the wants category, and then what frequency do those cash flows come in and out? It's easy to say, I need 20,000 a year in travel. It's very easy in a one dimensional. Say you just add that on. I need 20,000 a year for travel for the rest of my life.
A more multidimensional way might be I need 20,000, but I need it for the first 10 years, and then it can be 15,000 for the next five years, and then go down. That's a little bit more nuanced and these little trade-offs might be able to get you more of what you want of something else. Because 20,000 a year for travel for 30 years is a much bigger requirement on your resources than tiering those things down.
By tiering those things down, it might actually allow you to say, retire earlier or to save less right now if you're still working, or to take less investment risks. So these trade-offs, and that's an obstacle of just thinking in a one-dimensional, binary way.
The last thing that can be an obstacle in this is thinking that you can figure all this out within a spreadsheet.
Any spreadsheet or software that you're going to use is going to change a million times.
So, in this phase, the plan to deal with these obstacles to hit that objective and the feasible pillar is going to be putting numbers to your goals in a nuanced way.
Second is to organize the resources you have, and we group that into four categories. Number one is your social capital. Organize your social capital. That's going to be pensions, that's going to be social security, so you know what you're going to be getting in that capital realm.
Your human capital, the part-time work, the consulting work, payouts from your work that you've done in the past. A deferred compensation as an example. Count those costs and get those things organized, and then how much has to come from your financial capital, which is what we think about most when we think about capital, which is your investment accounts, your 401k, the cash accounts, et cetera.
Then the last one is other assets or use assets, which could be your house, which may be a very large portion of your assets, and sometimes that might get turned into financial capital later if you were to downsize. Then we have things like inheritances and all sorts of things. You want to organize your resources and compare them to the cash flows of the spending for your base great life, wants and wishes, and essentially go through a negotiation with yourself to get most of what you want.
I actually like to go through this phase and have your first feasibility test blow up and be totally unfeasible, which sounds counterintuitive, but the reason I like to do that is it gets more of possibility on the table and then it can help you prioritize the things that you just sort of thought of versus the things that are really important to you. Sometimes you think you know what those things are unless you get them all on the table.
This can be hard for an individual, but if you're married or you have a partner, you two may have different priorities around buying that lake house versus retirement in place, versus moving to where the grandkids are. This will help tease those out because we don't want that to be an unspoken conflict. We want there to be some reconciliation to get to a feasible plan of record, which is the outcome in this pillar, which is I've added numbers to my vision and created goals from them. I've organized all my resources, and I've assessed if this is feasible, to get all of this and not run out of money so I can be a good steward. So, these are the first two pillars.
Now, next week what we're going to do is we're going to talk about the next two pillars within the financial realm, which is now that we have a feasible plan of record, we know that it's possible to set sail, how do we make it resilient so if a storm comes in, we don't get knocked off course or sink? Then we're also going to talk about optimization. But for now, let's move on and get to your questions.
LISTENER QUESTIONS
Now it's time to answer your questions. If you have a question for the show, you can go to rogerwhitney.com/askroger. You can leave an audio question. You can type in a question. You can just type in and say, hey, Roger, how you doing? Whatever you want.
QUESTION ONE
So, our first question is actually a tip from Scott related to our, going from two to one series that we did a couple months ago.
Scott said,
"Hey, great session on going from two to one. I'm actually running through calculations currently to understand what things change if one of us, my wife and I, die and the assumptions that we're using."
Scott just had a tip of one comment though regarding everything being automated for bill payment, which was I think, a tip from somebody that had walked this journey.
Essentially having the bank accounts or the credit cards automatically billed, so if the financial manager spouse is the one that predeceases the other, that there's not a mishap.
Scott says,
"I had this for my father to pay his bills before he died. Everything was billed to his credit card, and the credit card was paid off every month.
However, the day he died, you are not allowed to go on the web to change anything more on his card, and this is even though I was an authorized user of the account, if the card in this case is in his name must not be used after his death. Therefore, all the automated bills would stop and the bills would start piling up as soon as the credit card was shut off.
My plan is to have a list of all the automated bill payments and which credit card they are billed to in my estate plan. That way everybody knows how the billing works. Thanks for all you do."
That's a great tip, Scott, and this coincides with another recommendation from someone like you is that both spouses should have credit cards in their own name, not just as authorized users of someone else's credit card for this exact reason, in that they need to have access to credit and accounts that they have some ownership in and that just aren't allowed to use. One is it's going to help solve for this, as you mentioned, Scott, but another is you want each person to have some credit available that's in their own name and some credit score attached to that, just in case.
So great idea. Scott, thank you so much for sharing the tip.
QUESTION TWO
Our next one comes from Bill, and he wants to provide some baking advice, so I appreciate this, Bill.
"Hey Roger. I love the show." Bill says, and your willingness to share your advice, but Bill says you knew this was coming.
"There's one aspect that drives me nuts. It's your reference to pie cake when describing asset liability matching or the bucketing system or time segmentation, I know you're trying to convey, but pies and cakes are two separate things. Hey, pie is a pastry, and a cake is, well, a cake. You want a metaphor that is a bit more on mark? I suggest layer cake.
Over in my neck of the woods, Maryland, the state dessert is Smith Island cake."
Bill, I appreciate your correction or your nuance. I will challenge you on this though, buddy, in that I have had listeners send me links to literal pie cakes, pies that are different flavors, so different ingredients that are layered on top of each other.
You could call this time segmentation; you could call it bucketing. I tend to create phrases that help me visualize and see things and share them with you, and we definitely all have different flavors of things that resonate with us. Hopefully everybody's still getting to the point when we talk about those, and we will actually dive into these pie cakes.
Next week when we talk about resilience. Thanks, Bill.
QUESTION THREE
Our next question is related to asset allocation in retirement, pie cakes, and it comes from Steve.
Steve says,
"Hey, Roger. I've been a weekly listener to your podcast for the past four years, and thoroughly enjoy the show. I'm hoping that you can help shape my thoughts on something I've been trying to figure out.
As we get older, I'm currently 66. How should we think about quote unquote long-term when it comes to structuring our investment portfolio? We know that equities outperform bonds and cash over the long term, but as we age, we have less long-term left in which to realize gains."
He shares some details. I'm not going to go into the detail.
Steve says,
"If legacy is not a major consideration, should we even care about the quote unquote long-term? Or should we invest for shorter time horizons to reduce risk or volatility and simply spend more? Which we struggle to do. I fully anticipate having a legacy, but it is not a planning priority for us. Old habits are hard to break, so we may just keep investing the pie cake three for the long term, even though long term may mean tomorrow. Thoughts?"
That's a really important question, Steve, and let's unpack this. When you build this pie cake or this allocation, many times, Steve, we're not even including the value of the home and other more use fixed assets which do have value. When the both of you pass, we'll have to pass on to someone, right? So I'm going to assume that you are well overfunded, and this is an optimization question more than it is a resilience question and that you're well overfunded. How should I plan that out?
I think you have a lot of options here, which is beautiful. It's just a matter of choosing. One is you can spend more money now and structure it so you can give yourself more permission to spend some money now, even though you're 66 and you still have a fairly long timeframe, the value of equities will say for risky assets in this case is, I just got to see Jeremy Siegel stocks for long run author, classic book, stocks are horrible inflation hedges on the short midterm, they're volatile as heck.
They're not good inflation hedges. Long-term he would say, they're perfect inflation hedges. So, part of the reason you may still want to have at-risk money in terms of equities, we're just going to define it for our purposes here, is really, it's going to have two purposes, Steve.
One is it's going to be a long-term inflation hedge for you if you're 66. We still got 20 plus years of planning, so it's going to be a much better inflation hedge than most anything else. At least as much as real estate.
Two, even if you were to map out and be a total safety first and prepay your anticipated spending with an income floor or guaranteed payments, it will help guard against shocks. It'll help grow your assets for the unexpected. That could be a healthcare shock. That could be a gifting shock. Shocks can come in lots of different ways, Steve, so I would still argue you still need to have some money invested for growth for inflation, but also for the unknown, to build capital for the unknown.
Now, generally we think of long-term care and things like that, but the unknown Steve could literally be the 76-year-old Steve has ideas that you don't have right now that you couldn't even imagine. Whether that's gifting, whether that's spending, who knows what it could be. So, you want to make sure that you give that dude some options later in life.
If you want to feel more comfortable in spending, and part of that's going to be psychological this whole upper body strength versus doing squats. Some of it's going to be around that, but if some of that struggle in spending is worry about the markets, or even though you're technically overfunded, you could still adopt a more safety-first approach, which is going to be guaranteed income. You could literally just simply build a bond ladder to pay for the next 30 years, do the net present value of what you need after interest, and just go ahead and pre-fund all that so you know you could, in theory, blow it and still be okay because you've built out this income floor with various guaranteed pre-funding vehicles, that might give you a little bit more comfort in doing that.
It could be your vision could have some opportunity to expand a little bit beyond what you can imagine right now, and it doesn't have to come down to spending money. I hate that it sort of feels like it does when we think of our vision and goals. I guess in practicality, it does come down to spending more money, whether that's gifting or what have you, but that always feels crass to me.
When we get to the non-financial pillars in two weeks. Steve, There's actually some pre-work. I think there's there to do prior to coming up with vision related in the non-financial realm. So hopefully we'll try to connect some dots there. But specific to your question, I would definitely want to have some money allocated for growth and as an inflation hedge, just for the unknown.
But I think it can be a combination of all of that or spending, right, you can figure that out. The goal here is to minimize regrets. So maybe you and your spouse need to get connected a little bit more with your 90, 95-year-old self and say, okay, if we have all this money at 95, what might we wish we would've done? Even though your current self thinks that's totally unreasonable, there's no way I could do that. Maybe your 95-year-old self. It's like, well, why wouldn't you? Maybe start to build that relationship. Hopefully that gives you some pathway. This will end up being a journey, not just one thing you're going to figure out.
QUESTION FOUR
So, our last question for today comes from Steve, a different Steve. Hey Steve. How are you doing?
Steve says,
"Hey Roger. I retired two years ago and left a substantial portion of my retirement assets in a 401k plan with my previous employer. Recently, the company discontinued two Vanguard investment options, a money market fund and a short-term bond fund. To replace these, they added a new fund called the Voyeur Enhanced Intermediate Stable Value Fund. This currently has a 4.92 APR. There's about a 30-basis point or a third of a percentage management fee. The crediting rate or the interest rate is adjusted quarterly, so the current 4.92 will change on July 1st.
Apparently, the stable value funds are becoming more popular in a 401k plan because they seek to offer a stable return in times of volatile interest rates by purchasing insurance contracts. My question is, would a stable value fund be more of a quality food or Twinkie type investment? Is it organic? Is it a Twinkie?"
Good question.
"As you poetically explained in April, any other insights you have on stable value funds would be much appreciated. I'm considering moving my 401K to a large brokerage firm to buy CDs and treasuries, investments that I understand better."
That was a great question, Steve. I am not familiar with the specific one that you are mentioning, and stable value funds are definitely a 401k specific animal. You're not going to find them outside of 401ks. They are designed to be a stable value, dollar in dollar out, similar to a money market, but they generally do have higher interest rates than money markets in most times anyway. You can have seasons where they don't.
This is going to be a resilience question, right Steve? This is money I'm assuming that you need to fund your life with, the income floor, that layer of the pie cake. If that is the case, this is about resilience and the monies that you are investing to fund your life, say over the next five years, the key quality you want is the return of your money and the return on your money in terms of interest rate is secondary to the first. So, I'm assuming that's what the purpose of these funds are for. In theory, a stable value fund should guarantee the return of your money, just like a money market would.
I am not familiar with statistics of stable value funds having issues. The fact that it's yield 4.92%, that's a little bit below six-month treasury currently. I would dive in and at least have a conversation with the plan provider on the return of the money aspect. This is a fund that's been there for a very long period of time. It has a track record of its net asset value or NAV on Morningstar or get this from the provider to get an idea of the history to make sure it's not something that's going to have some price variability.
The major risk with a money market fund or a stable value fund is the outlier where things go so wrong or change so quickly that they're unable to support and honor that net asset value of "a dollar in dollar out".
There have been a couple instances generally with more fringe products where they have what they call broke a buck. They didn't give you quite a dollar out. That is an extreme risk, with this fund I'm not familiar with, but it's an intermediate, enhanced intermediate. Those are two phrases I don't see attached to stable value funds.
I don't think I ever have. "Enhanced" scares the heck out of me. Intermediate means that it's buying a little bit farther, so you're going to want to get some clarity. In theory, stable value funds should be just fine, but you're going to look at this I think also, Steve, from opportunity cost. In the current environment, you could probably do better in treasuries or CDs, which are organic.
That doesn't mean that later if interest rates go down, that the stable value fund might not have been still the better option because a year or two ago, stable value funds were yielding a lot more than CDs and treasuries, but the key here is you're just going to have to decide your comfort level.
If you even have a little bit of discomfort, go with the organic product because this is about the return of your money to help fund your life. It's not about return on your money. Hopefully other assets can do that for you. With that, let's move on to our Bring It On segment.
BRING IT ON WITH KEVIN LYLES
Now it's time to Bring It On and focus on rocking the non-financial area of life with Kevin Lyles. We're going to talk about passion and work today. Kevin, why do we want to work in retirement?
Kevin: Because it keeps us young!
Roger: Happy people have projects. So, what are we going to talk about today?
Kevin: I want to talk about volunteering in retirement, and talk about some tips for doing it, some of the downsides you need to watch out for and why you might want to volunteer more in retirement.
Roger: Work with no pay. I love it. Let's talk about it.
Kevin: It is, and there are a lot of people who think volunteering is really the secret recipe for success for retirement.
There have been a lot of studies that really show that people who volunteer successfully in retirement get so much out of it. It does a lot of things for you. There was one study out of the University of Michigan that people said volunteering increased their zest for living. It made them feel euphoric, made them feel more energetic, gave them social networks.
So, they're just so many good things volunteering can do for you that it's just a great thing to do now that you have some extra time on your hands.
Roger: Volunteering is definitely passion driven. Many of us don't have time to do it while we're raising a family, doing a career, or it's limited. How do we discover opportunities?
Kevin: A lot of us, when we're working, most of the volunteering we end up doing is something that will help further our career. Right. It's networking. It's some of those kinds of activities and there's nothing wrong with that. That's the way a lot of the volunteer. World goes, but most organizations can really use people with a lot of expertise and some time on their hand.
The first tip for volunteering is to make sure it's a cause that is important to you. Don't just go grab the first person who needs someone to handle a rake or a shovel. Find a cause that you really believe in that will give you the passion for it that you want.
Roger: A good example of that I wanted to share was Fritz Gilbert, Retirement Manifesto.
His wife actually started a nonprofit, so she went a little bit deeper, and they build fences for dogs that are on chains, and I always see Fritz posting photos of the new fence they built and the happy dog inside it. That's probably a good example of that. Bravo, Fritz and spouse.
Kevin: That's exactly right.
It's been great for the two of them. It's an activity that they've done together as his wife needed something to do. She had quit being a caregiver for her mother and had all this time. When you talk to Fritz, he lights up when he talks about freedom for Fido, doesn't he?
Roger: Yeah, and it's something they do together and he's a handy dude.
Kevin: Exactly, and the second tip is to make sure what you're doing for this organization, this volunteer cause, utilizes your skills and abilities. You don't want to be bored at what you're doing. That's where a lot of new retirees fail. They go and sign up for the first thing that becomes available, and then they're there.
Maybe it's a former CEO or a doctor and they're sweeping floors and that's not what they wanted to do. They feel like that's a waste of their skill, and it probably is. So, find some things, and it doesn't have to be what you did in your career. Maybe it's some skills that you just want to bring to the fore, and you want to become more important in your life, but make sure it's going to keep you energized and engaged.
Roger: That's interesting. I tend to go the opposite direction in the volunteering that I have done. I tend to get asked to be on boards or play some financial role, right, as a volunteer, and when I've done that, it’s not that fulfilling for me. I think from an impact level, probably macro, it's maybe a little bit more impactful. I tend to like the opposite. I would rather have a hammer in my hand and see results.
Kevin: Yeah, and that's fine. Number one, you're still working. So, I do think it's different. So, you need a diversion from your work. If you're going out and playing a financial role, that's just an extension of your work.
Roger: That's good point, good point.
Kevin: It's not a diversion for you. Once I've retired from something, then utilizing those skills may be more meaningful to me.
But I agree with you. I have no problem if you have the ability to swing a hammer and know how to do it. That's a great skill to promote in retirement.
I'm just saying make sure whatever role you take doesn't feel beneath your ability level so that you won't become bored.
The next thing I'd like you to do is think about who you're going to come in contact with when you do this volunteering. In other words, I like to get in contact with interesting people, people I find can add to my life, and you want to learn new things from them. So that's another thing to consider as you're thinking about a volunteer role.
Roger: That's interesting because you could be passionate about the cause, have a role that fulfills you, but say, this isn't my cohort of people that I wanted to hang out with doing it.
Kevin: Exactly.
I think we've all served on boards during our careers that occasionally, boy, this board is just not my folks. I have not found my tribe with this board, and it's painful to do that. So, in retirement, really, as you're already hopefully thinking about expanding your social network, Think about who you are going to be coming in contact with on a daily basis as you volunteer.
Then that fourth tip is ease yourself into this. Don't overcommit it first. Don't overschedule yourself. Volunteering can be an important part of retirement, but don't let it overshadow other things that are important to you.
Roger: That's a big one. I've actually had to counsel people to back out of obligations that they created.
They get out of their work. They've been super busy. They're super passionate about doing things and they commit and volunteering. Everybody always needs more help of capable people, right? So, they overcommit because people are, they're asking for more and more and they're like, I just created a job. So good counsel there.
Kevin: Yeah, it's very important in retirement. You have all this new time on your hands. Keep your life in balance. Whatever you do, whatever your passion project is, whether it's working for money or volunteering, just make sure you keep your life in balance.
Roger: All right, so which one step somebody can take today to rock volunteering?
Kevin: Yeah. I want you to list out three volunteer roles that you know about, maybe you've heard this organization needs help, or maybe it's an organization you've thought you would like to get involved with because you really feel for their cause and just list those roles and list out the things we talked about, which is what skills of mine do they need? What skills do I want to enhance? Who will I be involved with if I take on that role? So just come up with your list and I think it might lead you to your first great volunteering opportunity.
TODAY'S SMART SPRINT SEGMENT
Roger: On your marks, get set,
and we're off to create a little baby step you can take in the next seven days to not just rock retirement, but rock life. So, in the next seven days, I want you to. Conduct a thought experiment. I want you to get a piece of paper and create a mind map or you could journal this. You could use sticky notes.
What I want you to do here is think about your life as if it was a clean slate that you didn't live in the house that you lived in, you weren't in the area that you live in. You weren't doing the activities that you're currently doing and friends and so forth. I want you to start with a clean slate and say, if I were to create my life today, knowing what I know, what would I want that to be?
You can think of where in the country would I want to live? What type of area would I want to live in? Would it be a farm, would it be a condo downtown? Would it be in the suburbs? What kind of neighborhood do I want to be in? Do I want to be able to walk everywhere and not own a car? Do I want to have a pickup truck? Think about the environment that you would want to be if you didn't have what you have now.
Then next, think about, well, what activities would you most want to do on a day-to-day basis? Do you want to be able to walk to the park every day? Would you want a mountain bike every day? Do you want to be near museums and activities?
What kind of people do you want to be around? Do you want to be around creative people, readers, people that are doing outdoor activities? Who do you want to be doing these things with? It's very difficult to do this, but the goal is to think about your life outside of your life without all the decisions and structures that you've created.
A lot of are legacy structures. You probably live where you live now because that's where you worked and whether you're retired or getting ready to retire. Sometimes we just continue keeping on, keeping on rather than realizing that we have choices here, and I may not want to live where I'm living.
Maybe I need to expand my friendships and my activities. The goal here is for you to do this, and if you're married or have a partner, have them do it. And just have some discussion. Don't worry about what is realistic and feasible because that's where we're going to trip ourselves up. You don't have to go create whatever it is you and your partner dream up.
But it's an exercise to help you start to be more intentional about where you're going and it might help you tease out ideas and actions that you could take to get a little bit more of that environment or those friends or those activities, and you can identify where those things might be, even if it's in their area and you have to stay where you're at.
Getting outside and thinking about your life with fresh eyes is really important. Another example is when you're looking at your investments, and let's say they've lost money, or you have all these legacy investments, you have the value of those investments today, and you can't be trapped by when you bought them, or how long you've owned them.
It's only worth what it's worth today. Well, your life is only worth what it's worth today. Going forward, you have to put aside the legacy part of it. So that's your exercise. I'd love to hear how that goes.
ROCK RETIREMENT PLEDGE
Thanks for hanging out with me today, and hopefully I'll see you on one of our live meetups here tomorrow or on Saturday livewithroger.com for that.
Okay. Our RAM pledge, we are focused on you and your journey and you're transitioning into and rocking retirement, that's all we care about.
We want you to always have hope, an inspiring goal, and vision for your future.
Agency and pathways so you have control to make it so.
We're going to be super authentic, no pretense. We want to be humble and we want to be respectful to everybody.
We always want to approach life with curious eyes. We want to approach life with fresh eyes, we've talked about that today. We want to hold our beliefs up for examination, so we don't get trapped by them. We can keep evolving.
We as a podcast want to be free from big finance, from products and gimmicks. We're going to try to be authentic and keep it about you.
We always want to help you take action. Not be the smartest person in the room about some particular subject but take action so you can actually create the life that you want.
We are all in on doing this. So, let's go do this.
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