Why You Shouldn’t Plan Retirement- Episode 132

This transcript was auto-generated and may contain errors.

[00:01] Welcome to the Prosperity Podcast, fresh alternative personal finance talk for independent thinkers who prosper outside of Wall Street. Here’s your host, bestselling author, Kim D.H. Butler and No BS Money Guy, Todd Strobel. Hey everybody, welcome to another edition of the Prosperity Podcast. This is No BS Money Guy, Todd Strobel. Once again, got bestselling financial author Kim Butler and our co-host with us today. And we’re going to be talking about the concept that retirement can be planned. And Kim, what do you think? Well, you know, you brought me a struggle because you’ve used two of my most unfavorite words in the world. But let’s have some fun with them. So this concept of retirement, let’s chat about that for a little bit.

[00:53] I attend strategic coach, as many people know, Dan Sullivan, the creator of said strategic coach, is 72 or three or four, I don’t remember exactly. And just came out a few years ago with his new 25 year structure. So here’s a man that absolutely takes free days, absolutely takes vacations, but loves his work and has no intention of retiring. To use an even more extreme example on growing Boulder, this has become one of my favorite websites, growing boulder.com. There is, are you ready for this? A 109 year old financial advisor that is still working. A hundred and nine. Can you imagine what they’ve seen? Incredible. I just love it. Now he may be a typical financial person, but that’s okay. We’ll, we’ll give him kudos cause he’s still working.

[01:52] So I have an issue with the retirement thing. It’s just not something that is helpful. It’s something that’s been in our society, frankly, only for maybe three quarters of a century or so. And we know, and we see on a daily basis that it is not good for people. A lot of people can’t handle it financially. Anyway, as my husband, Todd Langford likes to say, when every day is a Saturday, you’re going to spend less money. I don’t think so. And then furthermore, we have the social lack of productivity that happens in retirement, the psychological degradation that happens when you’re in retirement, of course, lack of physical activity in retirement, et cetera, et cetera, et cetera. So this thing called retirement, I already don’t like it, but then

[02:39] when you tell me that it’s something that can be planned, which we have financial advisors all across this country out in the marketplace, not we, I mean, but just we as a society in the U S that are trying to do just that they’re trying to plan retirement. Well, what does that look like? Well, they’ll sit down with you and they’ll say, okay, what age do you want to retire? So of course the client just throws out a number. And then they try to put all this information into a computer program that then tells you what your income is going to look like during the years that you are assuming you’re going to be alive. And of course, most financial planners are taking the typical age of maybe 90 as death for a particular person.

[03:28] Well, when we have guys like this 109 year old financial person that’s still working and a lot of the people on growing Boulder well in their late eighties and early nineties, still active and involved and doing cool things, there’s no way that a typical financial plan, assuming somebody dies at 90 is safe. And so this idea, the retirement is something that can be planned is horrific. It’s a false sense of peace of mind. It’s something that we should be taking a red pen to. In other words, if somebody wants to print you out a quote retirement plan where you throw in all these assumptions and you spit out this income and if you can earn this and if your tax bracket can be that. And if you die on time, then you’re going to get this much money.

[04:24] We need to take a red pencil or pen to that, just like an F grade English paper and slash through every assumption and make it clear that the information in that document is very false, very misleading. And I know I’m using strong language, but that’s how strongly I feel about this. So Todd, I’ll throw the question back to you. Why do you think our society thinks that retirement is something that can be planned? Well, I think, you know, once again, we want control and we want to be able to predict the future, which I mean, fortunately or unfortunately, we really can’t predict whether we’re going to wake up tomorrow. And that’s a scary thing for a lot of people. So if you have a professional that can say, okay, here’s a plan to

[05:14] age 90, you just do what your part is. And basically they give a sense, false sense of guarantee that the rest of it’s going to fall into place. And the saddest part to me is, is that even if they get all of the numbers right, who knows what the cost of everything else is going to be, how much will that money that you worked so hard to earn that you’re going to get each month, you, no one knows what that will actually buy. Well, and on top of that, we may have new things that come about that you never knew to include in your quote plan that become absolute necessities. I mean, think of a cell phone today. I don’t really know anybody that doesn’t have one. I mean, even the people that were completely disconnected from the

[06:05] internet and avid no computer users often get cell phones just because of the safety and the helpfulness that they are. And of course prices come down drastically, but people are spending, let’s just call it an average of 500 bucks every other year or so, plus who knows how much per month on a cell phone, if you had a retirement plan done 20 years for you, 20 years ago for you, you wouldn’t have even known that that item existed. You wouldn’t have even known to make it a line item. And so this is just so not helpful to people to try to plan this out. Now, what can they do instead? What’s a much better way to go about things? Well, number one, it’s to work as long as you can. Without a doubt, you need to keep working as long as possible.

[06:55] Delay social security. You feel you’re contributing though. Yes, without a doubt. And so if you don’t feel like you’re contributing, if you’re not happy with your work, if you don’t love what you do at least 50 to 60% of the time, ideally more like 70 or 80% of the time, then go find other work. There’s so many opportunities today. You could get on taskrabbit.com and find things that you love to do that other people don’t love to do and will pay you to do. You could get onto upwork.com and provide your services there. You know, frankly, you could volunteer just long enough to find something that you love to do and then figure out, oh, turn it into a paying job. So yeah, let’s, let’s be working as long as you can.

[07:47] And then let’s also keep moving. There’s a great additional website that I want to throw out as a resource. It’s called living2100.com. It’s L-I-V-I-N-G and then T-O and then 1-0-0. So living2100.com and in there, you can put in how often you’re exercising, what kind of eating habits you have, et cetera, et cetera, et cetera. And it will actually give you a life expectancy. So that may be a real wake up call for some people and also potentially a helpful thing, but I think we want to be careful doing any quote planning around that because it’s still a guess and it still could be absolutely wrong. Like you said, I mean, we could go tomorrow. We could go 20, 30, 40, 50, 100 years from now. We just don’t know.

[08:41] So the third thing that I want to recommend that people do is we’re wrapping up here is to make sure that they’re continuing to save a percentage of their income, save money every month, ideally, or at least once a quarter, once a year, whatever your structure is. And of course, the easiest way to do that is to pay your whole life insurance premiums because that’s a method of forced savings. And the longer you can build liquidity, the more money that you have in an account that you control and that is liquid, the more peace of mind and the more capable your later years are going to be because of what that money does for peace of mind and liquidity. So those are my three recommendations instead of quote, planning a retirement.

[09:28] Super. And Kim, I know you have worked very, very hard on a, a book. That’s a very easy read also available in an audio version that you make available to just our podcast listeners. And if you could share that, I’d love to hear it. Absolutely. That is called financial planning has failed and there’s some great resources in there, a quick summary of why financial planning or retirement planning, if you wanted to use that term is so ineffective. And then as I indicated some specific things that you can do and some real solutions for having your money be liquid, for having your money create income and for having your money continue to grow. So that is available at partners. Number four prosperity.com slash ebook.

[10:21] And as Todd said, there’s an audio version there as well. Partners. Number four prosperity.com forward slash ebook called financial planning has failed. And again, I just have to compliment Kim. She continues to teach that financial decisions should be simple and they should be made by you and that, uh, you know, you should be able to save, uh, at a rate of return that’s above inflation, say three to 5% tax free. And that you should be able to get a rate of return on what you quote are investing at double digits or at least close to it while preserving safety. Um, and again, if you’d like more information specifically about that, you can send an email to hello at partners, the number four prosperity.com.

[11:14] Anything you’d like to add before we wrap up, Kim? Well, a big thank you to you back. I’m always grateful to have you as a cohost. It makes this podcast fun and hopefully entertaining to our clients. And we welcome questions. So thank you, Todd Strobel and the hello at partners for prosperity.com is the way to get to us. Super. All right. This is no BS money guy, Todd Strobel special. Thanks to Kim Butler. Take care everybody. Thank you for listening to the prosperity podcast to take control of your money and have it work for you. Visit us at partners for prosperity.com. If you liked this episode, make sure you subscribe and leave a review.