Episode 39: Three Lies That People Believe About Retirement

ABOUT THIS EPISODE

On this episode of the Build Your Life Podcast with Financial Expert John Browning, we're discussing three lies that people believe about retirement and why you need to know the truth.

Tune in today to hear John share the truth behind retirement including expenses, healthcare, and living off your investments. Don't get stuck behind the lies... You don't want to miss this one!

For more information, visit www.GuardianRockWealth.com to learn more about what John can do for you. Or, give us a call at (312) 372-5000.

Welcome to the build your life podcast with John Browning. Build your life as a relaxed and unedited conversation with financial expert John Browning. John's the founder of Guardian Rock Wealth, with offices in Hawaii, Colorado and Illinois. John's also the author of the book build a life, not a portfolio, a guide to your financial future based on your personal values, which you can purchase on Amazon, or stay around to the end of today's show and I'll tell you how to get a free copy mild right to your door. I'm Michael Delan, your host for the next few minutes as we chat with financial expert, business owner and author John Browning. Well, John Browning, welcome back to another episode of Your podcast. How are you today, bound friend? I'm doing fantastic, good. I love it. I love that shirt, man, that is great blue. That is Hawaiian. If I've ever I'm sorry, Havaan, right, and there you go. Yeah, that's right. Yeah, I'm trying to get the be in there. So looks really good.

Hey, there's a there is a lot of there are a lot of rumors. When we think about retirement planning and all of that. There is there are some some truth there's a lot of truth, but there's also some lies out there that people believe about retirement and we don't have time to talk about all of them, but I want to. I want to focus on some three, at least three lies that people believe about retirement. John, tell me, unpacked for me that what you what you've learned, what you hear from people about some of the lies they believe about retirement. Yeah, this is a this is a big, big topic, and you're and you're right. We can't we can only kind of scratch the surface. But there really are three that really stand out and I hear them almost every single time we talk to somebody for the first time about retirement, what they wanted to look like and and what they think they will need in retirement. And don't...

...let me forget, though, at the end there is good news, okay, but so I think the very first one that tends to come up as well my expenses are going to go down and retirement I'm not working. Yeah, well, here's things to consider on the weekends. What do you do? A lot of times? Maybe not every time, maybe you're fixing the house and everything else, but but what do you do? You most people. They go, maybe they go out see a movie, maybe they maybe they go shopping something else. So what if every day was a weekend? Oh, go golfing more, you're fishing more, go enough. Fishing doesn't cost any money, right, right, asking any fisherman who's really into fishing and fishing you actually cost money. Okay, yeah, well, I don't just I just thought, you know, when you said that eating out, I mean retirement. I'm sorry, it could be very boring if I'm sitting...

...around the house all day, every day with my wife. You know, let's just quat tea. Yeah, that's quad. Again and again, embody, my eating out budget is well, so much for my envelope system, right, yeah, that's great, so much for that budget. And Yeah, that's what we see. It happened and and you know that tends to be, especially when you first retire. Your like, you're like the kid that just got out of school. It's time freedom, right, it's like. And you buy the you buy the new set of golf clubs because we got more time to get off. You want the new set of golf clubs, you want the new shoes, you want the new to even want the best balls, because you want to get better at that and fishing. You want the new Rod, you want to you want the new a new bassball. All right, yeah, the new boat exactly. And you know what a boat is right now? No, it's a hole in the water into which you pour money. I've heard that from multiple boat owners, but I...

...love it, I but I believe it. I don't have a boat, but I would totally believe it. All the maintenance that goes into the man. Wow. Okay, so Mike'smens are going to go down in retirement. That is a lie. Yeah, that is. That is a lie, especially in there's first few years, first three to five years, typically you're spending actually goes up because you're enjoying your retirement, which is the whole point of the book. Build your life, not a portfolio. I tries to get to that point, that goal, and enjoy it. So that's a lie. Your expenses typically do not go down and retirement, especially in the first few years. And then you have another thing. People tend to forget that all these years they've been working, if they've been working for an employer, that employer has been providing them with healthcare, dental, a lot of times vision, when you retire, you're responsible to keep that going. And...

...yes, there's medical there's a yeah, that's right, care, Medicaid, all that, all that kind of stuff. Right. There's there's all of that out there. We actually have an expert that we use on our team, not not directly with us, but we have with conference of financial planning. You have a legal team, you've got a CPA team, you've got an insurance team, which would be that where this guy fits in and he's specifically concentrates when you when you turn about sixty four, you start getting all kinds of information about the programs that you're going to be eligible for. But guess what, they're not all free and they don't cover the same things that you were covered by in your normal employment. So that medical cost typically goes up, not because you're older and you have more problems, but just simply because your employers not covering x percent. All that an yeah, that's what we forget about when we're employed, that the good one employer pays a lot...

...of stuff. Right, that's right, that's going to go away. So and and, frankly, the bottom line is, after you get past the first several years, the reality is that we do have a few more things that go wrong. You know, knees get bad and hips go bad and you've got to pay deductibles and those medical costs tend to rise every single year. So another thing to keep in mind. So your expense is once again not going down. Good Point, especially if you've got that golf game that's not working. So whilere you're throwing that fishing rod so much that shoulders going to go out. Shoulders going to go out, you're going to have a tennis elbow, you're going to have the wrist, the carpal tunnel. You're doing it for yourself now, I'm going to know, but you're having fun right. So expenses, here the lies. The expenses are going to go down, which they're not, and my healthcare costs are really they are going to go up and I forget about that. So that's a lie that my healthcare costs are actually going going to stay the same or go down. They're not, because my employer is not paying the other percentage. That's right.

What's the third lie that you hear all the time? The third one is probably the biggest one. That people don't realize is that if you are starting to live off of your investments, say your one k money, your traditional IRA money. Guess who you have to pay from all those? Uncle Sam, tax man Max, yes, the tax man. Come. Those don't go away just because you retired. Now, if you have invested in a Roth, which we can talk about on a different, different time. But but most of the time people are going to have a four or three b one K or something like that and as they withdraw all those funds they're going to have to pay taxes on them. So Dad doesn't go down. So you see it? Well, I only need a hundred thousand dollars to live. Well, you a hundred thousand dollars plus the taxes that you're going to have to pay as you withdraw those. Yeah, well, that's a big...

...chunk, as we all know. And and and it's a big chunk. And and a conversation with you sometime soon about your thoughts around tax rates, because we've been traditionally in the last fears decade on that in a pretty low tax rate, and that I would love your thoughts on we're taxes might be headed based on all of your knowledge, and how that's going to impact somebody who's wanting that hundred thousand dollars a year, because that means they're going to need more if taxes indeed go up. Right? Am I tracking with real? Think, yeah, you're you're thinking of it exactly correctly, and there are strategies to deal with that and their strategies to deal with in retirement managing your taxes. And you can manage your taxes if you plan things and execute things. Well, okay, well, that's good. I heard I heard from I don't I know where I heard it, John, but somebody told me years ago that, yeah, your number one are most people's number one...

...air is the government because of the money they have in there for one case and four or three in all of that, and people just we either don't know that or way of forgotten it, and the government just they like to have their money and forget. We don't. I Love Streets, I love nice pass recently, but they don't forget and they're going to show up. And the thing I just heard you say that I really find intriguing is there are always to manage that and, shall I say, even mitigate some taxes. Is that fair? That that is fair to say you cannot avoid taxes, but you can mitigate that and only pay your fair share in it. But if you don't plan well and if you don't execute that plan well, most of the time you're going to pay more taxes than you would have had to have. And the best time to plan. This is the fourth lie. The best time to plan is when you retire, the day you retire, that is when you should start planning your retirement. That is a loe. Yeah, is a lie. That would be one of the worst ideas.

Exactly when you're about twenty and you just graduated from college. That's the best it is. It really is, and people at twenty don't want to think about retirement. But if they start, and have a conversation with you and they start when they're twenty or twenty five, even putting in one or two strategies, they're going to be so much better off down the road. And it doesn't mean they have to invest a thousand or fifteen hundred a month and something. It means that it's a strategy to go, as we talked about last time, if you're going to buy a house by one that you can use maybe as a rental later as you move up, or if you're going to buy a car, begin by buying a used car and save some more money and put yourself in a better position. Right, thanks, right strategies like that that people can get when they when they talk with you, John. But we're not done yet. We just covered three. A fourth lie that I just rere in there, but you started this whole podcast and...

...you said, Hey, remind me about some good news. So the good news is exactly kind of what you just said. Is that if you plan well, you can mitigate the taxes, you can plan for those increased expenses. You can even plan for increased expenses in the first three to five years and then you can plan for how you want to handle, like with maybe long term care insurance or something like that, the increasing medical cost that may happen later down the road, and then, of course, all that tax planning that you can do. And the earlier you start, and this is why we're a little different than a lot of financial advisors. We would love to talk to those of you who are twenty years old or younger and just starting out, or maybe you're thirty years old and you just didn't do it before, the earlier we can help you get started. It just makes all the difference in the world to where you end up. It does, it...

...does. I'm real excited about the program that you mentioned that you're putting together to help people and will probably do an entire episode on that, because one of the things don't I've learned over time, is a lot of people go through a lot of financial advisors in their life and what they need to do is find somebody like you that they can build a relationship with over time to understand. How do I think about retirement, because really that has a lot to do with everything that you're going to do and it's not just about planning for that. Retirements about building a life today, which is really the concept of your whole book of build a life, not just a portfolio. So that's good. I'm interested in this, this program, that's the master class that you called it. So let's let's out like a to podcast on that that, because I'd be really cool, because that's really cool to really attract a younger audience and and help a lot of people. So, wow,...

...this was cool. So three big lies and some good news and and I think that's great. Anything else you want to add? Anything, any cautionary notes or any HMM, I think that's you know what. That'said to for the day, because that that really covers the three big ones. And again, getting started early is your biggest advantage. And are yeah, consistent, consistent, consistent, that's remember. That's my one word, consusistent. That's why we're going to be so John Browning, thank you for being consistent on this podcast, for being consistent in your messaging and helping lots of people avoid the three biggest lies around retirement. So we'll talk to you on the next episode, Sir. Sounds Great. We'll see you soon. A bye. Thanks for listening to the building your life podcast with John Browning. Be Sure to subscribe to this podcast so each new episode will be sent to you automatically when it is released. Have a terrific day.

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