WEBVTT 00:00:00.530 --> 00:00:02.825 Imagine the scenario you've worked your entire life, 00:00:02.825 --> 00:00:03.950 but you're ready to retire. 00:00:03.950 --> 00:00:05.930 So you retire and you have what you 00:00:05.930 --> 00:00:07.970 think is the perfect retirement plan 00:00:07.970 --> 00:00:10.100 to get you through the rest of your retirement. 00:00:10.100 --> 00:00:12.350 But then the market takes an unexpected turn. 00:00:12.350 --> 00:00:14.992 What COULD that mean for your retirement situation? 00:00:14.992 --> 00:00:16.700 There are a couple of different scenarios 00:00:16.700 --> 00:00:18.242 we're going to play out as Sam Liang and I 00:00:18.242 --> 00:00:30.200 discuss on this episode about for the paycheck. 00:00:30.200 --> 00:00:32.753 this is Adam Blye host of after the paycheck here at Rubino 00:00:32.753 --> 00:00:34.170 and Liang Wealth Partners. Today I 00:00:34.170 --> 00:00:38.260 am joined with Sam Liang, CEO and founder of Rubino and Liang Wealth 00:00:38.260 --> 00:00:39.420 Partners. 00:00:39.420 --> 00:00:40.710 It's a mouthful, isn't it. 00:00:40.710 --> 00:00:42.370 You know it gets harder and harder 00:00:42.370 --> 00:00:44.260 for me to say every time. 00:00:44.260 --> 00:00:46.930 Thank goodness you're not the receptionist here. I know right?!? 00:00:46.930 --> 00:00:49.070 Yeah, I could be terrible on the phones, 00:00:49.070 --> 00:00:52.955 but I am enjoying being the host here of the series, 00:00:52.955 --> 00:00:53.830 which is doing a great job. 00:00:53.830 --> 00:00:55.640 Great Thank you very much. 00:00:55.640 --> 00:00:58.540 And in this episode, we wanted to talk a little bit more 00:00:58.540 --> 00:00:59.980 about the scenario that we painted 00:00:59.980 --> 00:01:02.489 was if you're somebody who was really 00:01:02.489 --> 00:01:04.239 retired. There's a lot going on in the world right. 00:01:04.239 --> 00:01:06.540 Sure there's ups and Downs lefts and rights 00:01:06.540 --> 00:01:08.800 you know cats and dogs living together. 00:01:08.800 --> 00:01:12.910 And we there's who knows people that are still retiring today. 00:01:12.910 --> 00:01:15.410 We recently discussed people they're pushing off retirement. 00:01:15.410 --> 00:01:17.910 But there are people that feel pretty confident that, hey, I think 00:01:17.910 --> 00:01:21.010 I can retire today and good on them 00:01:21.010 --> 00:01:22.050 and things are great. 00:01:22.050 --> 00:01:25.180 And you might have a retirement plan that you think is perfect. 00:01:25.180 --> 00:01:26.540 But then you know. 00:01:26.540 --> 00:01:28.990 Who knows what happens a market crash happens. 00:01:28.990 --> 00:01:30.070 What would happen. 00:01:30.070 --> 00:01:33.490 Well, what are some scenarios where that. 00:01:33.490 --> 00:01:36.220 How would that affect your retirement accounts today. 00:01:36.220 --> 00:01:37.340 Not a good situation. 00:01:37.340 --> 00:01:38.560 No, not at all. 00:01:38.560 --> 00:01:41.960 I mean, listen, at the end of day retirement by itself. 00:01:41.960 --> 00:01:44.290 I think is a hard enough task. 00:01:44.290 --> 00:01:47.230 But you put that under current circumstances 00:01:47.230 --> 00:01:48.900 is becomes really harder. 00:01:48.900 --> 00:01:50.230 Mean there's so much going on. 00:01:50.230 --> 00:01:52.000 We've got an election coming on. 00:01:52.000 --> 00:01:56.450 We have very low interest rates for quite some time now. 00:01:56.450 --> 00:01:58.313 I don't really see it going back up. 00:01:58.313 --> 00:02:00.730 I mean, just a lot of unrest and uncertainty in the world. 00:02:00.730 --> 00:02:04.390 So I think there's a lot of people out there 00:02:04.390 --> 00:02:07.780 in the common place in the professional field that 00:02:07.780 --> 00:02:08.539 are feeling. 00:02:08.539 --> 00:02:12.910 Hey, what happens if another market crash like a 2008 00:02:12.910 --> 00:02:13.870 were to happen. 00:02:13.870 --> 00:02:17.192 Right and like you said at the beginning of the episode, 00:02:17.192 --> 00:02:19.150 you know, I thought this was going to be great. 00:02:19.150 --> 00:02:19.650 I already. I already 00:02:19.650 --> 00:02:22.030 have my plane ticket book to go to Florida 00:02:22.030 --> 00:02:24.488 and you know put a down payment on a condo that I was going to 00:02:24.488 --> 00:02:27.980 be going to enjoy and then all of a sudden, 00:02:27.980 --> 00:02:31.100 you know your money goes from here to here. 00:02:31.100 --> 00:02:34.610 So the good news is you can do something about it. 00:02:34.610 --> 00:02:36.750 And hopefully you have a written retirement plan 00:02:36.750 --> 00:02:40.300 and you have sort of a blueprint as to 00:02:40.300 --> 00:02:41.550 what things are going to look like. 00:02:41.550 --> 00:02:44.430 Not only when every is just perfect. 00:02:44.430 --> 00:02:47.337 But also to make sure that you're going to be OK. 00:02:47.337 --> 00:02:48.420 And you've sort of tested. 00:02:48.420 --> 00:02:49.378 What's going to happen. Right 00:02:49.378 --> 00:02:52.170 you do have a pullback in the market place. 00:02:52.170 --> 00:02:55.140 But if you don't have that, you know the few things 00:02:55.140 --> 00:02:55.890 that could happen. 00:02:55.890 --> 00:02:59.210 One we've talked about it before, the sequence of returns 00:02:59.210 --> 00:02:59.720 risk. 00:02:59.720 --> 00:03:01.710 Can we talk a little bit more about that, 00:03:01.710 --> 00:03:04.730 which is exactly that you know that the market doesn't 00:03:04.730 --> 00:03:05.280 do this. 00:03:05.280 --> 00:03:07.700 But it does that right need to pull money out. 00:03:07.700 --> 00:03:09.160 It becomes a problem. 00:03:09.160 --> 00:03:09.660 It's OK. 00:03:09.660 --> 00:03:11.630 It's a really slippery slope. 00:03:11.630 --> 00:03:15.110 The second thing is really liquidity liquidity risk. 00:03:15.110 --> 00:03:17.810 You might have certain assets that are tied up. 00:03:17.810 --> 00:03:20.170 We'll talk about that like maybe real estate 00:03:20.170 --> 00:03:23.480 you know that now you need them to be illiquid 00:03:23.480 --> 00:03:26.840 but it's not like you can you know sell the water heater. 00:03:26.840 --> 00:03:28.670 Right and then inflation. 00:03:28.670 --> 00:03:29.960 Inflation is one of those. 00:03:29.960 --> 00:03:33.620 So a silent things that eat away at our and our ability 00:03:33.620 --> 00:03:34.407 to enjoy life. 00:03:34.407 --> 00:03:35.990 So we'll talk a little bit about that. 00:03:35.990 --> 00:03:38.480 Perfect So we're going to go a little bit more 00:03:38.480 --> 00:03:41.390 into detail for each three of those what could a market 00:03:41.390 --> 00:03:44.180 crash mean, if my retirement accounts aren't 00:03:44.180 --> 00:03:45.260 balanced in that sense. 00:03:45.260 --> 00:03:48.320 So what does if I don't have that retirement plan what 00:03:48.320 --> 00:03:52.400 could a sequence of returns risk mean or what does it do. 00:03:52.400 --> 00:03:54.650 Well, you know, listen, if you don't need the money 00:03:54.650 --> 00:03:57.380 if you don't need to pull money out 00:03:57.380 --> 00:04:00.950 of your retirement funds, which not too many people can 00:04:00.950 --> 00:04:01.550 say today. 00:04:01.550 --> 00:04:06.770 Right I think you know, a market crash or a market correction 00:04:06.770 --> 00:04:09.710 as we know, things that go now will eventually come back up 00:04:09.710 --> 00:04:11.040 and you sort of leave it alone. 00:04:11.040 --> 00:04:13.310 You know so you're in your 40s and you don't 00:04:13.310 --> 00:04:14.960 need the money for 20 years. 00:04:14.960 --> 00:04:16.880 It's probably a different situation, right. 00:04:16.880 --> 00:04:19.130 Some of the things that we're talking about right now, like 00:04:19.130 --> 00:04:21.269 I retired you know, two months ago. 00:04:21.269 --> 00:04:24.050 And then all of a sudden 2008 happened again. 00:04:24.050 --> 00:04:27.340 Right and if that were to happen, then 00:04:27.340 --> 00:04:30.050 essentially your money needs to work harder for you. 00:04:30.050 --> 00:04:33.080 If you're in the market to give you the same ability 00:04:33.080 --> 00:04:34.420 to draw money out. 00:04:34.420 --> 00:04:38.910 Right or do I mean by your money working harder. 00:04:38.910 --> 00:04:40.620 So as an example. 00:04:40.620 --> 00:04:44.840 Imagine if you needed $40,000 a year in addition 00:04:44.840 --> 00:04:46.563 to maybe your social security. 00:04:46.563 --> 00:04:49.230 Maybe you're fortunate enough to have a little bit of a pension. 00:04:49.230 --> 00:04:52.760 But you needed to pull out $40,000 a year out 00:04:52.760 --> 00:04:54.340 of your retirement savings. 00:04:54.340 --> 00:04:56.210 I would just call it a million dollars. 00:04:56.210 --> 00:04:56.940 OK All right. 00:04:56.940 --> 00:04:58.520 So that's a 4% withdrawal rate. 00:04:58.520 --> 00:05:02.310 If the market correct a million dollars. 00:05:02.310 --> 00:05:05.080 Now because it's all in the market. 00:05:05.080 --> 00:05:08.550 It goes from a million to $800,000. 00:05:08.550 --> 00:05:09.050 Are you OK. 00:05:09.050 --> 00:05:09.590 OK percent. 00:05:09.590 --> 00:05:11.090 So now you still need to The grand 00:05:11.090 --> 00:05:12.548 because really nothing has changed. Right 00:05:12.548 --> 00:05:17.108 So instead of earning 4% now you need to earn 5% 00:05:17.108 --> 00:05:18.650 So now your money has to work harder. 00:05:18.650 --> 00:05:20.233 That's what I was talking about right. Has 00:05:20.233 --> 00:05:21.440 to work harder. 00:05:21.440 --> 00:05:23.570 And it puts really additional strain 00:05:23.570 --> 00:05:29.700 on the probability of success of that actually happening. 00:05:29.700 --> 00:05:32.240 Gotcha You know we've had instances 00:05:32.240 --> 00:05:36.390 where people have shared stories with us that they were tired. 00:05:36.390 --> 00:05:38.503 They had a million dollars they were fine. 00:05:38.503 --> 00:05:40.670 And they've been spending probably a little bit more 00:05:40.670 --> 00:05:41.587 than they should have. And 00:05:41.587 --> 00:05:44.390 then all of a sudden, they lived through and just 00:05:44.390 --> 00:05:48.480 recently about a decade ago in 2008 and by the time, 00:05:48.480 --> 00:05:50.760 everything you know like the dust has settled. 00:05:50.760 --> 00:05:54.840 They have college $650,000 left right now 00:05:54.840 --> 00:05:57.020 to get the same amount of money you 00:05:57.020 --> 00:05:59.360 don't have the same pool of money to start with. 00:05:59.360 --> 00:06:01.400 That's when it has to work hard work harder 00:06:01.400 --> 00:06:03.437 and you're withdrawing from it at that time 00:06:03.437 --> 00:06:05.020 to cause you're already in retirement. 00:06:05.020 --> 00:06:07.310 I think that's a big psychological disconnect 00:06:07.310 --> 00:06:09.480 people have is they're thinking like, 00:06:09.480 --> 00:06:11.330 oh, I can always replenish my for one k. 00:06:11.330 --> 00:06:13.590 But you have a paycheck and you know I'm a paycheck. 00:06:13.590 --> 00:06:14.465 Mean you can't repay. Exactly 00:06:14.465 --> 00:06:16.890 you're not you're not going up that mountain. 00:06:16.890 --> 00:06:18.140 You're coming down a mountain. You so 00:06:18.140 --> 00:06:20.300 you're not accumulating you're actually 00:06:20.300 --> 00:06:21.740 taking withdrawals. 00:06:21.740 --> 00:06:25.200 Right which which is an entirely different scenario, 00:06:25.200 --> 00:06:27.170 which is why it's really important to sort 00:06:27.170 --> 00:06:28.010 of plan for that. 00:06:28.010 --> 00:06:31.200 I mean planning for growing your money is one thing, 00:06:31.200 --> 00:06:35.690 but planning for having a reliable income in retirement 00:06:35.690 --> 00:06:37.280 is an entirely different story. 00:06:37.280 --> 00:06:41.750 Gotcha And that kind of leads us on into another hardship that 00:06:41.750 --> 00:06:44.860 might happen in retirement, which is liquidity options. 00:06:44.860 --> 00:06:48.920 So let's say you don't want to pull from your following k 00:06:48.920 --> 00:06:51.170 options currently because the market did take it down. 00:06:51.170 --> 00:06:52.310 You don't want to lock in a loss. 00:06:52.310 --> 00:06:53.360 It's a lock in last loss. 00:06:53.360 --> 00:06:53.860 Thank you. So you 00:06:53.860 --> 00:06:55.700 look at other avenues from where 00:06:55.700 --> 00:06:59.090 you might be able to pull money, but there's liquidity hardships 00:06:59.090 --> 00:07:01.010 and other places where you see there's always 00:07:01.010 --> 00:07:04.300 risk rise risk and pretty much everything we do in life. 00:07:04.300 --> 00:07:08.060 By stepping off the sidewalk onto the street 00:07:08.060 --> 00:07:10.433 you know we see people that have invested heavily 00:07:10.433 --> 00:07:11.600 into the real estate market. 00:07:11.600 --> 00:07:13.710 OK And that's great. 00:07:13.710 --> 00:07:17.460 You know it's only you and I always go up Well, 00:07:17.460 --> 00:07:20.960 if you live in Boston or live in any metropolitan 00:07:20.960 --> 00:07:23.580 you know major city that that might be a little different 00:07:23.580 --> 00:07:24.340 today, right. 00:07:24.340 --> 00:07:28.540 I just recently my son moved to you goes to Boston University 00:07:28.540 --> 00:07:29.610 as you know. 00:07:29.610 --> 00:07:31.280 And the last minute, he says, you 00:07:31.280 --> 00:07:34.140 know I don't want to live in a dorm or get into an apartment. 00:07:34.140 --> 00:07:36.360 And we looked in an apartment that was 00:07:36.360 --> 00:07:37.620 between him and his buddies. 00:07:37.620 --> 00:07:40.230 I think it was like $4,000 a month. 00:07:40.230 --> 00:07:42.060 And I'm like, what's a lot of money. 00:07:42.060 --> 00:07:44.870 We were able to talk the guy down a $3,300 a month. 00:07:44.870 --> 00:07:46.150 Like like literally like that. 00:07:46.150 --> 00:07:47.777 Is there was so much going on. 00:07:47.777 --> 00:07:48.610 Nobody's going back. 00:07:48.610 --> 00:07:49.530 Right right. 00:07:49.530 --> 00:07:52.290 So just imagine if you were that guy 00:07:52.290 --> 00:07:55.600 and you were depending on collecting for $1,000 a month. 00:07:55.600 --> 00:07:59.010 And that's like really tight you need that four grand a month. 00:07:59.010 --> 00:08:01.200 And now all of a sudden now the demand isn't there. 00:08:01.200 --> 00:08:03.240 Right So you've got a problem. 00:08:03.240 --> 00:08:05.412 So sometimes we see people that have you know, 00:08:05.412 --> 00:08:06.870 they want to keep their money safe. 00:08:06.870 --> 00:08:10.290 They say they go to the bank and they buy five year c.d. 00:08:10.290 --> 00:08:11.730 earning today. 00:08:11.730 --> 00:08:15.000 It's almost laughable how little how much you earn. 00:08:15.000 --> 00:08:18.017 But if you need money if you need to get to that money. 00:08:18.017 --> 00:08:18.600 Yeah, you can. 00:08:18.600 --> 00:08:19.267 You can pull it. I'll pay 00:08:19.267 --> 00:08:20.760 a penalty we get that. 00:08:20.760 --> 00:08:24.030 But there's certainly liquidity risk when it comes to that. 00:08:24.030 --> 00:08:29.520 So I think as we always talk about just having moneys 00:08:29.520 --> 00:08:34.440 set aside for different places for different purposes 00:08:34.440 --> 00:08:35.720 and specific outcomes. 00:08:35.720 --> 00:08:37.470 That's really important. 00:08:37.470 --> 00:08:40.679 I think going back to the rental income situation 00:08:40.679 --> 00:08:42.789 not only is your rental income down, 00:08:42.789 --> 00:08:45.240 but also the value of your house is also depreciated too. 00:08:45.240 --> 00:08:46.990 So if you wanted to sell that house. 00:08:46.990 --> 00:08:49.470 You might be taking a hit or you wouldn't 00:08:49.470 --> 00:08:51.240 be getting, like you said, as much 00:08:51.240 --> 00:08:52.620 as you thought because you thought real estate's only 00:08:52.620 --> 00:08:53.160 going to go up. 00:08:53.160 --> 00:08:53.730 That's right. 00:08:53.730 --> 00:08:55.188 I mean, listen, you know I live it. I live 00:08:55.188 --> 00:08:56.700 in a home. 00:08:56.700 --> 00:08:57.810 That's my house. 00:08:57.810 --> 00:09:00.515 If the market dropped in my real estate 00:09:00.515 --> 00:09:01.890 was worth it used to be worth you 00:09:01.890 --> 00:09:04.198 know $600,000 worth 500,000. 00:09:04.198 --> 00:09:05.740 Listen, I still need a place to live. 00:09:05.740 --> 00:09:07.100 Right So I can stay right here. 00:09:07.100 --> 00:09:08.970 Go anywhere Mike I sell at a loss 00:09:08.970 --> 00:09:11.250 when I know I could get more maybe just wait it out. 00:09:11.250 --> 00:09:12.903 Right But if you need the money that's 00:09:12.903 --> 00:09:14.070 an entirely different story. 00:09:14.070 --> 00:09:18.090 Right So sometimes people you know 00:09:18.090 --> 00:09:22.150 that's why that's why there's that word diversification 00:09:22.150 --> 00:09:22.650 right. 00:09:22.650 --> 00:09:26.490 We just need to have enough moneys in different places 00:09:26.490 --> 00:09:29.850 to do that specific job and specific outcome right. 00:09:29.850 --> 00:09:31.170 Yeah, I think. 00:09:31.170 --> 00:09:33.780 I'm thinking more like in that essential expenses. 00:09:33.780 --> 00:09:38.370 So if also you needed money that to pay off your house. 00:09:38.370 --> 00:09:41.650 I mean and you have rental income but like I said, 00:09:41.650 --> 00:09:42.952 the market has tanked. 00:09:42.952 --> 00:09:44.910 You don't want to touch you fall in case you're 00:09:44.910 --> 00:09:47.502 looking at your rental income, which is now only 2/3 00:09:47.502 --> 00:09:49.210 of what it was initially and you're like, 00:09:49.210 --> 00:09:53.520 oh, I'm going to be short that that you know 700 a month. 00:09:53.520 --> 00:09:55.650 It's hard to find places to go. 00:09:55.650 --> 00:09:57.930 I mean, when we meet folks we talked to folks 00:09:57.930 --> 00:10:01.740 that may call in from the radio or what have you. 00:10:01.740 --> 00:10:04.140 And the conversation ends up going 00:10:04.140 --> 00:10:06.030 towards the direction of listen where 00:10:06.030 --> 00:10:08.070 am I going to get money from retirement. 00:10:08.070 --> 00:10:11.880 We are always huge proponents and advocates 00:10:11.880 --> 00:10:15.930 of just understanding it's not always grown the money. 00:10:15.930 --> 00:10:19.960 Right having wonderful returns is one thing, 00:10:19.960 --> 00:10:23.260 but having consistent returns is really important. 00:10:23.260 --> 00:10:25.360 Right and just when you're in retirement. 00:10:25.360 --> 00:10:26.940 I can't over emphasize how important 00:10:26.940 --> 00:10:30.060 it is to have an income plan to have that income bucket 00:10:30.060 --> 00:10:31.950 right that you know hey no matter 00:10:31.950 --> 00:10:36.370 what if the Dow is at 30,000 or 20,000 I'm going to be OK. 00:10:36.370 --> 00:10:38.920 No money to pay my bills. 00:10:38.920 --> 00:10:40.650 Right right back in the day with pensions 00:10:40.650 --> 00:10:43.595 I mean different story today's you don't have to try. 00:10:43.595 --> 00:10:44.970 You don't have that strain times. 00:10:44.970 --> 00:10:45.512 Yeah, you do. You 00:10:45.512 --> 00:10:47.080 bring up the three legged stool. 00:10:47.080 --> 00:10:48.580 You know the pension social security and 00:10:48.580 --> 00:10:50.382 your personal finances. 00:10:50.382 --> 00:10:52.840 And you know one of the stools for a lot of people is gone. 00:10:52.840 --> 00:10:53.950 That pensions bucket. 00:10:53.950 --> 00:10:55.270 People are confused about. 00:10:55.270 --> 00:10:57.770 What social security benefits might be in a few years. 00:10:57.770 --> 00:10:59.520 And then what we're talking about today is 00:10:59.520 --> 00:11:03.000 your personal finances and what can happen if something 00:11:03.000 --> 00:11:05.370 goes awry and a listen. 00:11:05.370 --> 00:11:07.170 What goes up is going to come down right. 00:11:07.170 --> 00:11:08.870 What goes down is going to come back up. 00:11:08.870 --> 00:11:13.060 And it's no secret that this volatility in the marketplace. 00:11:13.060 --> 00:11:14.730 And it's always going to be there. 00:11:14.730 --> 00:11:17.070 It's just a matter of sort of where you 00:11:17.070 --> 00:11:19.980 are in and in your inner life. 00:11:19.980 --> 00:11:20.650 Are you working. 00:11:20.650 --> 00:11:21.660 You're retired. 00:11:21.660 --> 00:11:22.860 Do you need the money. 00:11:22.860 --> 00:11:25.290 And if you do just you just need to have. 00:11:25.290 --> 00:11:26.740 Again, we go back all the time. 00:11:26.740 --> 00:11:27.960 But having a plan right. 00:11:27.960 --> 00:11:29.800 And there's is so many things I can 00:11:29.800 --> 00:11:34.340 that can just really come and just wreak havoc tac plan. 00:11:34.340 --> 00:11:37.545 Right and yet in this these episodes 00:11:37.545 --> 00:11:39.670 aren't designed to scare people into the idea that. 00:11:39.670 --> 00:11:40.322 Oh my goodness. 00:11:40.322 --> 00:11:42.780 It's more of a like, hey, here's like a situation you could 00:11:42.780 --> 00:11:44.700 be in and how to overcome that, which is what 00:11:44.700 --> 00:11:45.825 we're getting to right now. So we're 00:11:45.825 --> 00:11:47.670 just being realistic about life. 00:11:47.670 --> 00:11:48.280 Yeah right. 00:11:48.280 --> 00:11:49.170 Yeah Yeah Yeah. 00:11:49.170 --> 00:11:49.900 Life happens. 00:11:49.900 --> 00:11:52.440 Life Yeah, that's a new motto that's 00:11:52.440 --> 00:11:54.780 going on my bumper sticker. 00:11:54.780 --> 00:11:55.720 So let's go into. 00:11:55.720 --> 00:11:57.220 I mean, you have inflation exposure, 00:11:57.220 --> 00:11:58.410 which was the third thing that you brought up. 00:11:58.410 --> 00:11:59.670 But we kind of cover that a little bit. 00:11:59.670 --> 00:12:01.620 But just to kind of really dig in and go into. 00:12:01.620 --> 00:12:05.620 Yeah, I mean, you know, you look back in the day, 00:12:05.620 --> 00:12:07.540 I always remember my dad always said, 00:12:07.540 --> 00:12:10.290 you know, when you're working buy like dividend stocks 00:12:10.290 --> 00:12:12.420 you know the blues and you'll be OK. 00:12:12.420 --> 00:12:16.910 And then Sam when you retire go and park your money. 00:12:16.910 --> 00:12:18.070 The bank is it's safe. 00:12:18.070 --> 00:12:18.630 It's insured. 00:12:18.630 --> 00:12:20.970 Great just get a five year c.d. 00:12:20.970 --> 00:12:23.670 you'll get 5% a year and you live off that interest 00:12:23.670 --> 00:12:26.040 and you'll be fine. 00:12:26.040 --> 00:12:28.070 It's not a Jewish state anymore. 00:12:28.070 --> 00:12:29.780 I mean, you look at interest rates. 00:12:29.780 --> 00:12:30.380 It's an. 00:12:30.380 --> 00:12:32.800 You know you're likely to get 0.5 percent someplace else. 00:12:32.800 --> 00:12:35.420 And I'll be in my adult lifetime in my mid 50s 00:12:35.420 --> 00:12:37.910 and it's probably as low as it will ever be. 00:12:37.910 --> 00:12:41.060 Right So that's not keeping up with inflation. 00:12:41.060 --> 00:12:46.160 Right So you have you have you know these are great again. 00:12:46.160 --> 00:12:47.330 Nothing wrong with them. 00:12:47.330 --> 00:12:49.460 But if you, depending on that not only 00:12:49.460 --> 00:12:51.618 take income but to keep up inflation listen, 00:12:51.618 --> 00:12:52.910 you better look someplace else. 00:12:52.910 --> 00:12:56.340 Right So that's one of the things that, again, 00:12:56.340 --> 00:13:00.140 making sure that you have a well balanced portfolio. 00:13:00.140 --> 00:13:03.440 And that's why you know myself and John and Ryan 00:13:03.440 --> 00:13:05.110 you know that's what we strive to do 00:13:05.110 --> 00:13:07.070 is make sure that everybody is well balanced. 00:13:07.070 --> 00:13:07.640 Right Yeah. 00:13:07.640 --> 00:13:09.680 So again, if I'm that person that's recently retired 00:13:09.680 --> 00:13:11.210 and my thought process was that I thought 00:13:11.210 --> 00:13:12.710 you said you said your dad said, you is 00:13:12.710 --> 00:13:15.710 I'm just going to park it all in the bank in the market 00:13:15.710 --> 00:13:17.880 does take a downturn in rates. 00:13:17.880 --> 00:13:20.130 I mean, we're right at a point where rates are so low, 00:13:20.130 --> 00:13:23.330 but they can't get much lower. 00:13:23.330 --> 00:13:23.840 Well, Yeah. 00:13:23.840 --> 00:13:25.730 You can't just keep up with inflation 00:13:25.730 --> 00:13:28.250 by having all of your money in an account. 00:13:28.250 --> 00:13:29.287 Yeah OK. 00:13:29.287 --> 00:13:29.870 Yeah, awesome. 00:13:29.870 --> 00:13:32.180 So then that kind of goes to the way 00:13:32.180 --> 00:13:34.100 to kind of overcome or really have 00:13:34.100 --> 00:13:35.990 that balance in your retirement plan 00:13:35.990 --> 00:13:39.830 is understanding that there's and you called the 3 bucket approach 00:13:39.830 --> 00:13:41.960 and what are those what are those three buckets. 00:13:41.960 --> 00:13:46.010 Yeah So again, I talked to I use those words specific outcomes 00:13:46.010 --> 00:13:47.120 and purposes. 00:13:47.120 --> 00:13:49.920 That's exactly why we designed it this way. 00:13:49.920 --> 00:13:53.210 The 3 buckets, each bucket is meant to do 00:13:53.210 --> 00:13:56.900 a certain thing in each bucket has a specific outcome. 00:13:56.900 --> 00:14:00.080 Right So the first bucket is really the liquidity bucket. 00:14:00.080 --> 00:14:02.570 Making sure you have enough money liquid 00:14:02.570 --> 00:14:04.950 that you can get your hands on. 00:14:04.950 --> 00:14:05.970 If you don't have that. 00:14:05.970 --> 00:14:08.600 And you're approaching retirement you know, 00:14:08.600 --> 00:14:11.090 maybe look at how much you're contributing into your 401(k 00:14:11.090 --> 00:14:14.810 and maybe just sort of stop and make sure that liquidity bucket 00:14:14.810 --> 00:14:16.240 is as plentiful. 00:14:16.240 --> 00:14:19.760 OK Because if you are in retirement and let's say you 00:14:19.760 --> 00:14:23.040 have two years with the living expenses in that bucket 00:14:23.040 --> 00:14:26.660 and the market takes a downturn and you going out 00:14:26.660 --> 00:14:30.230 of your 401(k, which is mostly in the market right now is 00:14:30.230 --> 00:14:32.600 worth you know 25% less. 00:14:32.600 --> 00:14:35.100 I mean, it's not to say you don't have to worry. 00:14:35.100 --> 00:14:37.460 But at the precise moment you know exactly what 00:14:37.460 --> 00:14:40.335 you were you know where your money's going to come from 00:14:40.335 --> 00:14:41.960 to pay your bills because you have that 00:14:41.960 --> 00:14:43.180 built in liquidity bucket. 00:14:43.180 --> 00:14:44.820 Yep So that's the first bucket. 00:14:44.820 --> 00:14:47.960 OK The second bucket again, we talk a whole lot 00:14:47.960 --> 00:14:49.390 about income income income. 00:14:49.390 --> 00:14:53.090 Yeah is to make sure that you have enough money set aside 00:14:53.090 --> 00:14:57.260 that the specific purpose of that second bucket 00:14:57.260 --> 00:15:00.063 is to give you that reliable monthly income. 00:15:00.063 --> 00:15:02.480 Right you know back in the day we used to call it mailbox. 00:15:02.480 --> 00:15:03.020 Yep Yep. 00:15:03.020 --> 00:15:05.800 Today, it just goes right into your account 00:15:05.800 --> 00:15:10.730 with a mailbox with a mailbox with a check. 00:15:10.730 --> 00:15:12.980 So that bucket is really important. 00:15:12.980 --> 00:15:18.260 Again, because we don't want to rely on having the market 00:15:18.260 --> 00:15:22.340 do really well and has to continually do quite well 00:15:22.340 --> 00:15:25.490 in order to pull off the pull off the profits 00:15:25.490 --> 00:15:28.640 and pay the bills or pay the real estate tax 00:15:28.640 --> 00:15:30.170 or maybe go on vacation. 00:15:30.170 --> 00:15:32.120 We want that to be automatic right. 00:15:32.120 --> 00:15:34.070 So that's where that income bucket is. 00:15:34.070 --> 00:15:34.820 And it's not. 00:15:34.820 --> 00:15:37.500 And sometimes people use different asset classes, 00:15:37.500 --> 00:15:38.640 different tools. 00:15:38.640 --> 00:15:42.830 But you really can't judge that bucket by the rate of return. 00:15:42.830 --> 00:15:43.430 Right right. 00:15:43.430 --> 00:15:46.460 It's not designed to give you double digit returns right. 00:15:46.460 --> 00:15:49.620 Or to make you feel, wow, I'm pretty good at what I do. 00:15:49.620 --> 00:15:50.530 I'm smart. 00:15:50.530 --> 00:15:52.790 Fine it's designed to give you an income stream. 00:15:52.790 --> 00:15:53.870 Right OK. 00:15:53.870 --> 00:15:56.280 And then that third bucket again, very important 00:15:56.280 --> 00:15:58.387 you talked about inflation. 00:15:58.387 --> 00:16:00.720 We know things are going to cost more and more and more. 00:16:00.720 --> 00:16:02.990 And we need to keep up with that and run it to earn 00:16:02.990 --> 00:16:04.860 a really a decent rate return. 00:16:04.860 --> 00:16:06.920 Yeah, but in that bucket chances are 00:16:06.920 --> 00:16:09.600 things are going to be not always 00:16:09.600 --> 00:16:12.660 you know this way it's going to go like this, 00:16:12.660 --> 00:16:13.820 it's going to go like this. 00:16:13.820 --> 00:16:17.720 Right So we want to make sure that we have enough exposure 00:16:17.720 --> 00:16:20.240 to get a good rate of return. 00:16:20.240 --> 00:16:23.030 Right like in my case, I have a fidelity account. 00:16:23.030 --> 00:16:25.597 It's mutual funds and ETFs. 00:16:25.597 --> 00:16:26.430 There are some days. 00:16:26.430 --> 00:16:27.805 I don't want to look at the state because I know 00:16:27.805 --> 00:16:29.870 that it's not a surprise. 00:16:29.870 --> 00:16:30.710 I know. 00:16:30.710 --> 00:16:32.070 But at the same time. 00:16:32.070 --> 00:16:35.085 If I'm depending on taking money out. 00:16:35.085 --> 00:16:36.710 I'm not depending on that third bucket. 00:16:36.710 --> 00:16:38.540 Right I think that's where working 00:16:38.540 --> 00:16:40.370 with the financial advisor really helps. 00:16:40.370 --> 00:16:42.740 It takes that the emotion out of that aspect of it. 00:16:42.740 --> 00:16:44.862 Because if I'm looking at accounts. 00:16:44.862 --> 00:16:47.070 And they're all dropping right now and I'm panicking. 00:16:47.070 --> 00:16:48.778 I might want to pull the trigger like you know 00:16:48.778 --> 00:16:51.350 the ceiling's come out of this thing I'm coming out 00:16:51.350 --> 00:16:54.200 and like you said, I've lost all opportunity for growth 00:16:54.200 --> 00:16:56.270 or I have to re-enter the market. 00:16:56.270 --> 00:16:58.698 Yeah with this growth bucket and I might be. 00:16:58.698 --> 00:16:59.490 So far behind that. 00:16:59.490 --> 00:17:00.823 I can't keep up with their size. I 00:17:00.823 --> 00:17:02.730 mean, I think it's really important. 00:17:02.730 --> 00:17:05.930 And we use this word education all the time. 00:17:05.930 --> 00:17:10.865 I think you'd be looking for a personality 00:17:10.865 --> 00:17:12.240 an attribute from somebody that's 00:17:12.240 --> 00:17:14.349 going to help you with the retirement you 00:17:14.349 --> 00:17:17.530 want to make sure that person is helping you understand why. 00:17:17.530 --> 00:17:19.119 Right being educated for why. 00:17:19.119 --> 00:17:20.410 Yes Why is that. 00:17:20.410 --> 00:17:22.349 Why am I. Why do I have to remark why. 00:17:22.349 --> 00:17:23.829 Why can't I get away with $2. 00:17:23.829 --> 00:17:24.609 Right right. 00:17:24.609 --> 00:17:25.180 Why 3. 00:17:25.180 --> 00:17:26.680 Why not $4. 00:17:26.680 --> 00:17:30.040 So understanding why you have money 00:17:30.040 --> 00:17:34.780 designed for specific purposes, I think is really important. 00:17:34.780 --> 00:17:37.750 And to your point working with somebody in the retirement 00:17:37.750 --> 00:17:40.900 planning space that that really understands retirement right. 00:17:40.900 --> 00:17:42.700 You know what we're you know, we've 00:17:42.700 --> 00:17:45.590 been doing this for a long time quite some time. 00:17:45.590 --> 00:17:48.550 And it's not always it's about making money. 00:17:48.550 --> 00:17:51.160 It's about understanding you know retirement is not just 00:17:51.160 --> 00:17:51.760 making money. 00:17:51.760 --> 00:17:53.010 It's about lifestyle. 00:17:53.010 --> 00:17:56.340 Right it's about making sure that you can weather you 00:17:56.340 --> 00:17:59.410 know the sunny days and the hurricanes. 00:17:59.410 --> 00:18:02.050 Yeah I'm making sure it can take you 00:18:02.050 --> 00:18:03.970 through retirement longevity. 00:18:03.970 --> 00:18:08.940 I mean retirement is like if you think about purchases 00:18:08.940 --> 00:18:11.130 it's probably the biggest purchase of your life. 00:18:11.130 --> 00:18:12.310 Yeah because. 00:18:12.310 --> 00:18:14.340 It might be 20 years 25, 30 years. 00:18:14.340 --> 00:18:16.140 Yeah Wow. 00:18:16.140 --> 00:18:19.222 So if I'm somebody who is diy ING this right. 00:18:19.222 --> 00:18:21.180 I'm taking everything that we're talking about. 00:18:21.180 --> 00:18:23.138 OK, I'm going to restructure my retirement plan to 00:18:23.138 --> 00:18:25.500 be a 3 bucket approach system. 00:18:25.500 --> 00:18:28.680 How often should I be... monitoring and looking 00:18:28.680 --> 00:18:30.810 at all that stuff to make sure that I'm properly 00:18:30.810 --> 00:18:32.070 balanced at all times. 00:18:32.070 --> 00:18:34.470 Listen at a minimum, a few times a year, 00:18:34.470 --> 00:18:35.740 if you're looking at yourself. 00:18:35.740 --> 00:18:36.240 You go in. There 00:18:36.240 --> 00:18:38.940 you go in your car and you look at it every day. 00:18:38.940 --> 00:18:41.480 I mean, I we know plenty of people. 00:18:41.480 --> 00:18:41.980 I do. 00:18:41.980 --> 00:18:43.940 Yeah And that's all they kill. 00:18:43.940 --> 00:18:47.630 It's not going to really change anything from day to day. 00:18:47.630 --> 00:18:52.020 But if you have a relationship with an advisor at a minimum, 00:18:52.020 --> 00:18:53.400 you know couple of times a year. 00:18:53.400 --> 00:18:57.170 Yeah like in our company, our company. 00:18:57.170 --> 00:18:58.612 It's probably more like quarterly. 00:18:58.612 --> 00:19:00.320 Yeah, so I think that's really important. 00:19:00.320 --> 00:19:01.003 Yeah Yeah. 00:19:01.003 --> 00:19:02.420 When you're working with somebody. 00:19:02.420 --> 00:19:05.045 Yeah the idea is that you don't have a plan that works for you. So you 00:19:05.045 --> 00:19:06.930 don't have to show that mentality. 00:19:06.930 --> 00:19:08.180 What where did that come from. 00:19:11.930 --> 00:19:13.380 But yeah, I when I'm that guy. 00:19:13.380 --> 00:19:15.630 I'm thinking of the diy if I'm listen to this episode, 00:19:15.630 --> 00:19:17.500 I'm like, OK, I'm going to try and you 00:19:17.500 --> 00:19:19.160 know I am someone who recently retired. 00:19:19.160 --> 00:19:21.860 I want to make sure that I'm not exposed if the market does 00:19:21.860 --> 00:19:26.150 crash and this is my how to step is create a liquidity bucket 00:19:26.150 --> 00:19:31.130 or identify a liquidity bucket kind of that fixed asset 00:19:31.130 --> 00:19:33.020 bucket in that growth bucket and just 00:19:33.020 --> 00:19:35.523 make sure that I can do what I can about eye think 00:19:35.523 --> 00:19:36.440 it's really important. 00:19:36.440 --> 00:19:38.232 You know, we've worked with plenty of we've met 00:19:38.232 --> 00:19:41.480 plenty of do it yourselfers along the way. 00:19:41.480 --> 00:19:43.860 And some do become clients because they realize, hey, 00:19:43.860 --> 00:19:46.400 listen, you know, I could be AI could 00:19:46.400 --> 00:19:50.850 be a great mechanic or a great engineer or in some cases, 00:19:50.850 --> 00:19:53.150 we have is a good example. 00:19:53.150 --> 00:19:54.920 We have a great client. 00:19:54.920 --> 00:19:56.640 He's a surgeon. 00:19:56.640 --> 00:19:58.060 Oh, he's a heart surgeon. 00:19:58.060 --> 00:20:00.170 I mean, you know super smart guy. 00:20:00.170 --> 00:20:02.690 Yeah And he knows what he's good at. 00:20:02.690 --> 00:20:04.572 And he said to me many years ago. 00:20:04.572 --> 00:20:06.780 And we've had a relationship for a dozen or so years. 00:20:06.780 --> 00:20:08.990 He said, you know, listen, we save lives. 00:20:08.990 --> 00:20:10.250 We know we're smart. 00:20:10.250 --> 00:20:11.480 But when it comes to this, we don't really 00:20:11.480 --> 00:20:12.180 know what's going on. 00:20:12.180 --> 00:20:13.940 And that's why you need a professional relationship 00:20:13.940 --> 00:20:14.540 with you guys. 00:20:14.540 --> 00:20:18.500 Yep So when you're working with somebody I think sometimes 00:20:18.500 --> 00:20:21.290 it really helps open your eyes to things 00:20:21.290 --> 00:20:24.050 that maybe you've never seen before or you're not aware of. 00:20:24.050 --> 00:20:25.710 Right you know I love that. 00:20:25.710 --> 00:20:27.230 Yeah Sam thank you very much. 00:20:27.230 --> 00:20:28.140 Yes maybe today. 00:20:28.140 --> 00:20:28.960 I appreciate this. 00:20:28.960 --> 00:20:29.670 I really good. 00:20:29.670 --> 00:20:31.170 You know I know I like that. 00:20:31.170 --> 00:20:34.160 I also not in the Blazer to work too. 00:20:34.160 --> 00:20:36.107 If you have any questions for Sam Jonah Ryan 00:20:36.107 --> 00:20:37.940 and you're not at after the paycheck dot com 00:20:37.940 --> 00:20:39.273 already, head over there now 00:20:39.273 --> 00:20:41.065 And you can fill out the form at the bottom and ask 00:20:41.065 --> 00:20:42.050 your question. 00:20:42.050 --> 00:20:43.700 And if you have not already subscribed 00:20:43.700 --> 00:20:45.630 to future episodes of After the paycheck, 00:20:45.630 --> 00:20:48.080 you can also do that wherever you get your podcasts 00:20:48.080 --> 00:20:50.710 or at after the paycheck dot com. Until next time, 00:20:50.710 --> 00:20:52.410 Take care.