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Episode #603 - How to Choose a Retirement Coach

Roger: Welcome to the show dedicated to helping you not just survive retirement, but to have the confidence to lean in and really rock it because you're focused on the right things.

My name is Roger Whitney. It's exciting to be back. Took a month off to focus on a couple special projects. Made some massive progress on them and there's still a lot more work to do, but that's okay. I'm so excited to be back here hanging with you. One of my favorite things to do.

Today we're going to focus on answering some of your questions so hopefully we can help you take a baby step towards rocking retirement. We have questions from Barb on whether it's Fidelity or Vanguard. A Rule of 55 question from Mark, an inherited IRA question from Craig and a few more. We're going to start off with a question we answered a few months ago on about choosing a retirement coach. I answered the question but Kevin Lyles, a coach in the Rock Retirement Club, had a lot of wisdom because he's an expert in this space. So he and I are going to answer that question as well.

Let's get this party started with rocking retirement in the wild.

ROCKIN’ RETIREMENT IN THE WILD

Roger: So this is the segment where we try to profile someone like you taking action either on the financial end of things or the non-financial end of things, taking action to create a great life in retirement. Brian emailed in and said the way that he is rocking retirement is that he and his wife, I assume, are playing pickleball at various places during open plays, open play times, I guess during the week. So these pickleball facilities say anybody come and play, It's not a league. You don't have to have a reservation. You just get matched up with random people. Brian has been really leaning into this and he says it's so much fun to have the freedom to play during the week, play mostly with people like us, retired people and socializing in the physical activity is an absolute pleasure. He says we could never have predicted how much fun we are having and what a big part of our week it has become.

Brian, kudos to you. I think that's a great idea. What I like about that idea is physical activity for sure. It sounds like it's with your spouse. So you're doing it with your spouse. I love those kinds of group activities and you're getting to meet a lot of different people. You're checking a lot of different boxes there. Physical activity, you're meeting new people and you're doing an activity with the person you love. That's pretty cool. I love that. I think that's a great way to call it habit stacking. This actually, Brian, has been on my mind because this is part of one of the special projects that I've been working on in terms of taking action in the non-financial realm. Kudos to you for putting yourselves out there and putting instilling a new habit that's bringing you a lot of joy.

Now let's have a chat with Kevin Lyles, coach in the Rock Retirement Club about how to choose a retirement coach.

CHAT WITH KEVIN LYLES

The other day Kevin Lyles and I were chatting and he mentioned a question that we answered on the show a few weeks ago. Do I need a financial advisor or do I need a coach? I gave my perspective. But Kevin, I would argue is one of the preeminent retirement coaches in the country. So he said he had a perspective and I thought we'd share it.

Kevin, how do you navigate this decision about what you need?

Kevin: Sure.

Roger, I remember that question and it wasn't clear to me if your listener was asking about a financial retirement coach or a non-financial retirement coach. So we can talk about both of them.

Typically when we talk about retirement coaching, we're talking mostly about the non-financial side of the retirement transition. You know, the meaning and purpose, the status and significance, identity, social network, all those kinds of things. But retirement coaches also deal with some of the financial issues. It's mostly about helping people get confidence number one. Getting confidence to retire. You know, do I have enough money saved? You know how tough that is with your clients. You know, that's a gating question for people to be able to retire.

The second one though, and probably is more prevalent is once they're retired, having the confidence in their financial plan to actually spend the money and live their life that they've, that they've earned by saving all those years. So if we're talking financial coaching, I just wanted to differentiate that from financial advising what you do.

Roger: I wanted to ask about that because the lines here are very blurry.

Kevin: They are, and they're not regulated as you know, they're not particularly regulated. If you're not advising someone on a qualified plan, you don't really come under too much regulation in this area. Anyone can offer financial advice to someone. So it's a little scary.

But here's to me, the differentiator. Coaches certainly do not sell products, but they don't even recommend specific investments or insurance products or anything like that. You know, if I'm dealing with a retiree and I see they've got 90% of their portfolio in their company stock, I might ask him a question, you know, hey, what would happen if that stock tanked tomorrow? Depending on their answer, they might say yeah, maybe I should sell that, and I'm like yeah, you ought to think about that. But if they're just oh, I don't think that's a real risk, then what I'm going to do is refer them to a financial advisor. I'm going to say call Roger Whitney because you need to understand the risk that that is in there. I won't advise them how to sell 80% of your stock and go into this. That's not what a coach does.

Roger: So how does someone like the gentleman that asked the question, and we'll have a link to it in The Noodle email, how does someone determine the right tool for the job? Sure, I would think first is, I'm answering my own question, but first is what is the job? What am I looking to accomplish would be the first, right?

Kevin: Yeah. If you want someone to manage your investments, to give you advice, maybe to actually handle your investments, then you're looking for a CFP and advisor.

Roger: If you're looking for someone to build a financial plan of record and give you specific recommendations for you to implement, then it might be a plan or a financial planner that does financial flat fee plans.

Kevin: Ah, absolutely. But even there you start to get into a gray area. Right? Because as you know from the Rock Retirement Club, we have a lot of members who do it themselves. An awful lot of those members who aren't working with advisors still would like a second set of eyes. So I think there, depending on how comfortable you are with your own finances and what you've done, you may want a financial planner on a one time basis. I think that's best.

But you may be comfortable with a financial coach to take a look, Like I said, hey, you've got 80% in company stock. Maybe that's not what you want. So it just depends on what you want. You're right, you want the right tool for the job, you need to define the job.

Roger: Then it's much clearer that if you're looking for the non-financial coaching that a coach is probably going to be Best equipped. Because most financial planners don't have training in coaching or the softer skills.

Kevin: Most don't. Although, you know, I would argue you do because you specialize in retirement. So you've dealt with most of those issues with your clients. This is where, you know, your listener asks, what are the credentials I should look for? This is one area in coaching where I think experience matters much more than credentials.

Roger: I would argue it's the same thing in planning.

Kevin: Yes, but. But at least in planning, I think the credentials mean more. There are some coaching certifications. The one I have is that I'm a certified retirement coach through Retirement Options. There is also a certified professional retirement coach through the Retirement Coaches Association, and I work with that organization. I don't have that certification. There are some others. Like, there's a retirement coach certificate you can get through the International association of Professional Career Coaching. There's the Kinder Institute, George kinder, the Life Planner Register does the registered life planner certification. There's a lot of those, frankly, and I've done some of those in my training. They're helpful, but the experience is what matters.

What I think people should really look far beyond credentials and maybe even in lieu of credentials, who do they regularly coach? You know, are they coaching people like me? I tend to work with professionals and executives just because of my background. There are, there are coaches out there that specialize in first responders. If you're a first responder and you're looking for a coach, I would go to her. She's great. There are some that deal with specific issues, like encore careers. I think of Mark Ross in the Rock Retirement Club, one of our coaches. He deals with encore careers. So it really is. You need to define what you're looking for and then find a coach who has that experience.

Roger: It is the wild west finding a retirement planner, it’s always difficult. Andy Panko and I have had breakout sessions where we didn't have a lot of great answers other than interview questions. It's much or more the wild west in retirement coaching because the bar of entry is a little bit lower. How do you sift through someone that actually is able to deliver on what they might be saying?

Kevin: Yeah, you just got to, I mean, obviously referrals is one way you can talk to friends who may have worked with them, but it's really getting a comfort level with them. every coach I know will have an initial session free of charge. You know, you talk for a half hour, just, hey, what's on your mind? What are you working on right now? I'll tell you if I think I can help you with it, and you just have to get a comfortable level with each other. That's the only way I know to do it. But frankly, isn't that true with most professional relationships we have?

I know with doctors. So let's talk of doctors. If I'm going to have brain surgery, I don't care so much if I like the brain surgeon if they are the best brain surgeon there is. That's not what this is. Coaching is different. You've got to have a relationship that you're comfortable with, that you're comfortable sharing your innermost thoughts with and that you feel like you can nudge you in the right direction, because that's really what coaches do.

Roger: Yeah. I've used a professional coach for years, various ones for various things. It's difficult to put a return on investment to the coach because there is no demonstrable change in trajectory, et cetera. It ends up being the difference in perspective or the conversations that I end up having with my wife or with my team afterwards that are the return.

Kevin: To me, the number one skill you're looking for is, is your coach a great listener? You know, some coaches sort of, and it. I'm sure it's the same with. With retirement planners. They have their script, they have the way they proceed, and it doesn't matter what the client in front of them wants or needs. If someone is looking for a coach they go down their path. There are some coaches like that.

A good coach, though, will listen, will have good intuition about what's really going on here, what's causing the problem, and can suggest things. You know, you're right. It's hard to put a value on it, but it's also easy to recognize occasionally. You got that one idea that completely changes the course of your life or how you feel about the problem.

Roger: Well, I appreciate you sharing that. If someone is looking for a coach, I recommended the book that Kevin was involved in because it was written by coaches, and so there was a bar of entry to that. Mention that book again and we'll put a link to that. Where else could people go?

Kevin: Sure. The book is The Retirement Collective. It was put out by the Retirement Coaches Association. It's shared wisdom from top retirement coaches. I did one chapter in it about. There are, I think, 15 chapters by 14 other coaches on different aspects of retirement. That's a good thing to look for. Quite frankly, you read a book like that, and if one chapter really speaks to you, that might be the coach you should contact. I would recommend people go to the Retirement Coaches Association website. There are a lot of free materials that you can read on there, but also a coach directory. If you want a coach that you can meet in person with, it's by state and by area. You can look at the coaches in your area. You can look at their bios and make an introductory call with them to see if you think it'll work. Most people and most coaches work over zoom, so you don't need someone local. You can look for specific issues that you might be facing in their bios, just like you would do with any other search for a professional.

Roger: All right, thanks, buddy. Go, play with that grandbaby.

Kevin: Talk to you later.

LISTENER QUESTIONS

Roger: Now it's time to answer some of your questions.

If you have a question for the show, go to askroger.me and you can type in your question, leave an audio question, you can even leave an example of how you're rocking retirement in the wild and we'll try to feature it on the show. Just go to askroger.me

BARBARA IS THINKING OF MOVING HER FIDELITY ASSETS TO VANGUARD

All right, our first question. Oh, it's so good to be back.

This is from Barb.

Barb says,

“I currently have $1,700,000 in retirement assets at Fidelity. The rest of it I manage myself in CDs and cash, et cetera. I'm confident in my retirement plan.

I was thinking of moving my Fidelity assets to Vanguard in order to reduce fees. I don't need a lot of hands on management. I mainly want the service of asset allocation management.”

So that's what she's trying to solve for. She did a little comparison chart in her email, which was wonderful. Thanks, Barbara.

She said,

“Brick and mortar access. Fidelity has an office I can go to. So that's a yes. Vanguard does not.”

But then, she says that's not a huge factor for her. So we'll call that a, neutral, A little advantage.

Fidelity fees.

“Fidelity charges us 80 basis points, eight tenths of 1% for the asset allocation program. Vanguard would charge us three tenths of 1% or 30, basis points. So that's a difference of a half a percent a year.”

So if we do the calculation on that, Barb, that's $8,500 a year more that Fidelity is charging you for the exact same service, Big Advantage Vanguard there.

Rebalancing. Fidelity does it ten times a year. She says Vanguard does it four times a year. Is ten better than four in terms of rebalancing an asset allocation? I would argue, no, it is not. Every study that I've seen tries to put value to rebalancing, which is very important. One time a year is probably a decent amount. Ten times a year, data I've seen have shown that it is excessive. So I would say that's neutral to advantage Vanguard.

Personal contact to a financial manager or someone to help you with basic asset allocation decisions or service. Yes for Fidelity, yes for Vanguard. So is it worth $8,500 a year more to stay at Fidelity rather than move to Vanguard if all you want are asset allocation management absent any qualitative aspects? I would argue no, there isn't. But there's more to the story.

Barb says,

“From a fee perspective, the choice appears obvious. But something in my gut is keeping me at Fidelity. Should I go with rational numbers or my gut?”

Oh, that's a hard one, Barb. The money end of it says, oh, yeah, you should be Vanguard if that's all you need. You don't care about brick and mortar. You want asset allocation. You're going to save eighty five hundred dollars a year every year. It's not like there's more value being added. Slam dunk. You go to Vanguard, right? Because that $8500 a year, Barb, is some money that you could actually go and spend on yourself. You could go gift that money, whether it's to a charity or someone you care about. You could create experiences. $8,500 a year, free money. That's like going from free checking to a high yield savings account. Just free money. Mathematically slams dunk Vanguard.

What's going on with this gut here? Barb and I would encourage you to try to peel away some of the layers of that to try to identify what it is. Is it just because you've always been at Fidelity so it’s just easy to stay? That is very powerful in a lot of different areas of our life. Is it because you really like their online portal and you understand how to manage it? Moving money around or whatever it is in the in Vanguard would be totally unfamiliar. Is it that I can understand that? Try to understand what the reason is for staying at Fidelity.

I would say a couple ways to approach this is that it is okay to stay at Fidelity if you think that it keeps you comfortable in knowing that it's going to cost you an extra $8,500 a year. That is a reasonable decision as long as you make it intentionally. Yes, this costs more but it gives me comfort for these reasons. I can imagine the people that are really sensitive fees going,. I can't imagine that. But hey, to each their own.

One way to approach this is obviously you could move all of them to Vanguard all at once. Learn the new system. You would end up getting out of all of the Fidelity funds that you own and maybe have owned for a long period of time because Vanguard's going to put it into their port their model portfolio. In terms of asset allocation models, they're probably very similar. I actually would give a lean towards Vanguard on asset allocation models for these programs. I've brought in clients from Vanguard that were in asset allocation programs and many times they'll have 25, 30 plus mutual fund positions. It's over asset allocated in my opinion. Now I don't know if yours looks like that, whereas Vanguard is going to be a lot tighter. I actually would think that I would go to Vanguard. But realize that when you move or if you move, you're not going to have all those Fidelity funds anymore. You're going to have Vanguard's program.

One middle ground here, Barbara, would be to move some of the assets to Vanguard so you can become comfortable with the process. You can be comfortable with their online portal and access. You can be comfortable with how they invest it in the interactions you have with the personal representative there and give it a six month test. That way you can go through the process once while staying on home base, Fidelity and you may realize you like that portal better or it's really about the same. That would be how I would approach it. But that's significant money to the bottom line, especially if you start to put it towards things that are important to you like gifting or experiences etc.

So Barb, I'd love to hear a, follow up on what your decision is and let me know if you have any other questions.

MARK HAS A QUESTIONS ABOUT THE RULE OF 55

Our next question comes from Mark and he has some Rule of 55 questions.

Mark says,

“I left employment at company A when I was 55 and understand I can do withdrawals from my 401k without penalty prior to 59.5 under the IRS Rule of 55 after a short period of unemployment I began to work at company B, where I have a new 401k. I did not roll my old 401k to the new company yet, nor have I actually withdrawn any money under this Rule of 55 from the Company A Old 401k that I kept intact after I separated service after age 55.

Here are my questions today. While at employer B, can I still make penalty free withdrawals from Company A's 401k if I choose?”

The answer is yes, Mark. If the plan allows it, we'll get into what I mean.

Then he goes on,

“If I leave company B before 59 and a half, can I make penalty free withdrawals from both the old 40k1 from Company A and the new old 401k from Company B? Is there a limit to the number of old 401ks you can do this Rule of 55 amount from?”

So let's talk about this a little bit, Mark, because there are some rules you really want to be mindful of.

First off, simply because there is this Rule of 55 in the code does not mean that the 401k provider has to offer it. Company A. Yes, you separated service after age 55. You need to work with the plan administrator to understand whether they offer that option for Company A's 401k plan because it's not automatic. Some companies don't. The form in which you take withdrawals can be constrained as well.

For those of you that aren't familiar with the Rule of 55, if you separate service from an employer after age 55, Rule of 55 says that if the employer plan allows it, and that's the key feature here, you can take a withdrawal from the 401k prior to age 59 and a half and not pay the 10% penalty. You'll still pay taxes on the distribution, but you won't have the 10% penalty.

So Mark, you need to see if plan A allows that to be done. I have run into situations where this was an option we were exploring but realized the plan didn't allow the rule of 55 withdrawals for that type of separation. I've run into situations where it was constrained in terms of the amounts and the timing of how you took it out. So talk to the plan administrator. For now, let's assume that you check with the plan administrator and what you're thinking of doing with your plan A works. Now let's talk about plan B. This new 401K you have.

If you separate service prior to age 59 and a half and Employer B has this provision in their plan because you didn't want to talk to that administrator, then yes, you could do it from that one too. Yes, you could do it from A and B assuming you separated Service after age 55 and both the plans actually allow it and you understand the rules related to it.

This isn't just a give me because you see, the articles about the Rule of 55 are automatic because a plan can choose not to have that in their plan. So that's the key thing. But as far as the number 401ks, yeah. As long as you meet those requirements, and the plan allows it, go for it.

CRAIG HAS A QUESTION ABOUT AN INHERITED IRA

All right, our next question. I love these practical questions. These are good.

Our next question comes from Craig. Related to an inherited IRA.

“My mother in law passed away in February this year. My wife and my brother in law inherited an IRA from her 5050. When she passed in February, she was taking her required minimum distributions, but had not taken it in this year, 2025. Her required minimum distribution for 2025 was $35,000. We were told that the RMD for my mother in law would need to be made this year. The question is what amount do I need to take this year?”

Craig, in the year that that someone dies and they're taking required minimum distributions, or they're already of that age and haven't taken it yet, if your mother in law had taken her required minimum distribution prior to her death, then there would be nothing to do this year. But because she hasn't, her required minimum distribution goes to you; well in this case your wife and your brother in law, it goes to the beneficiaries who inherited it. So if it was calculated that your mother in law's required minimum distribution was $35,000, that means both your wife and your brother in law each would need to take $17,500 to satisfy that if it was a 50/50% inheritance. It would be different if it was inherited say, 70/30%. That would become taxable income to each of you in this year. Then going forward, you would have to follow the inherited IRA rules that we've talked about numerous times. So in the year that the person passes and they're already taking required minimum distributions, if they haven't done it, you guys have to do it in the percentage that you inherited the account. So hopefully that clears this up for you.

Have a great day.

SCOTT MADE A DISCOVERY ABOUT TSP WITHDRAWALS

Okay, we got two more here.

Scott says,

“I have discovered something about my TSP withdrawals. Now TSP is a governmental like 401k plan. Unfortunately, the plan does not allow you to withdraw from just one fund like the G fund. So in a TSP plan they have different funds. The G fund, the C fund, the S fund, the I fund. S is for stocks, I is for international. Any withdrawal from my TSP plan, I'm assuming after I've retired, will be distributed according to the asset allocation percentages.

In my case, I have 30% in the G fund, which is like the government bond fund, 45% in the C. Oh, what is C? It's just a corporate bond fund, I believe 15% in the stock fund and 10% in international stocks. That limits my agile bucket system approach because if I take a withdrawal, they won't just take it from my G fund like my cash fund, they're going to make me take it pro rata from all the different sources.”

Yes, this is a quirk of the TSP. This is also a quirk from a 401k by the way, for many that if you leave service, you leave a 401k there, that they many, times they'll do the exact same thing. So Scott, what do you do about this if you're trying to do a pie cake or a floor? There are plenty of reasons to maintain a TSP plan. Relatively good investment management, very low cost, ease of management because you've used it for years. So how do you do this?

Well, the good thing I would say, Scott, even though you've found this little quirk in the rules, you still have a lot of it protected in the G fund that hits your bucket. So you have a lot of money not at risk. The difficulty now is you can't get just that money when you want to take a withdrawal to fund your paycheck. So what can you do?

Well, one is if you have outside IRA or Roth assets, you could use those for the short term buckets or the short term pie cake structure and have the TSP be more for upside so you don't have to worry about this quirk.

Or two, you have the allocation to protect a portion of the early buckets because you have got 30% in the G fund, that is great. When you separate service, you can roll that out to an IRA and self-manage it and find just as good of investments with very, very low costs. Yes, they might cost a basis or two more potentially, but I mean that's a fraction relative to the friction of trying to pull money out the way that you want. So I think you have a pathway there either by moving this to an IRA or using outside assets to fund those near term spending that you're trying to prefund.

A QUESTION ABOUT THE SWITZERLAND INTERVIEW WITH SCOTT

So our last question today is related to Scott, who shared his travel journeys specifically to Switzerland. This question, which is an audio question, just made me laugh a little bit.

Anonymous: You recently had someone on that went to Switzerland, but it was a mystery as to where you stayed. Why would you have someone on that didn't tell you where to go? Could you please let me know?

Roger: So true. When Scott was on, he was a little close to the vest on where this place in Switzerland was. I didn't expect that, that's why I didn't want to push him on it because he might have had a reason for it.

Funny enough, the couple that was on the next episode actually spilled the beans on where it was and Scott and I had a laugh about that. Many of you have emailed me. So what's the mystery place? Well, it is Murren, Switzerland. For those of you that have been wondering, and this gentleman, There you go.

All right, now it's time to go set a smart sprint.

TODAY’S SMART SPRINT SEGMENT

On your marks, get set, and we're off to set a little baby step we 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, number one, define something that you would like to do. It could be learning how to play pickleball. It could be, I really want to make a decision on my Roth conversion. It can be whatever it is. Decide something that is new to you that you want to explore and maybe take some action on. Step one.

Step two, I want you to find one person that has done this thing. If it's a Roth conversion, find someone in your cohort of friends or community that has done a Roth conversion. This could be online, this could be in person, it doesn’t matter. Talk to them about how they thought through it, what was their rationale for it, what were the things that they were surprised about. If it's playing pickleball, find somebody that plays pickleball to take you to go play.

Just recently, I rode with Roger here in Salida, another Roger, part of the Monarch Crest Trail. We've done the classic route of this epic mountain bike ride a couple times and I've suffered through it. But recently, actually just today, we did Monarch Crest to Fooses Creek, which I had never done. I was a little intimidated about this because this is a high alpine riding over 10,000ft and a lot of descent. You don't want to go off the edge. I'm a little intimidated going, doing that by myself. So Roger took me, went up to Monarch Pass, we got on it, I suffered up the uphill’s, and then we went down like 3,4000ft of descent, which was just amazing. So flowy. I felt comfortable because I was with someone that has done this numerous times.

We cannot discount how important it is to find people that are doing the things that we imagine ourselves doing. Whether that's just mountain biking or pickleball or very practical things like retiring or making the decision to retire, it is a game changer. If you have a bottle, like I have a bottle of like bubbly water right here. It's a can. In your life, you are in the can. You're in the can. You can't see outside of the can. You can't get perspective. A fish doesn't really know it's in water. If you want to make better decisions about virtually anything, get perspective and people can help you do that. all right.

I have got five and a half more weeks here in Colorado before I go back to Texas. We got the RRC Roundup, our annual conference, which is like 350 people at the end of September. I have to prepare for that. My daughter's getting married in October. I got five weeks with no travel, nobody coming into town. My wife's actually going home for two or three of those weeks. So I got some focus time.

There's something I love about being able to focus on some of these special projects and I can't wait to share these with you.

If you enjoy the show and you want to go deeper to get links to resources that we share or a summary of the show. We share that every Saturday morning in The Noodle. So if you would like to get a weekly email of recap of the show, you hit reply, it comes directly to me, go to rogerwhitney.com and you'll see you can enter your name and email and sign up for that.

Hope you're having a great summer.

The opinions voiced in this podcast are for general information only and not intended to provide specific advice or recommendations for any individual. All, performance reference is historical and does not guarantee future results. All indices are unmanaged and cannot be invested in directly. Make sure you consult your legal, tax or financial advisor before making any decisions.