WEBVTT

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your goal financially speaking for
retirement.

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Most likely it's to
make sure that you're able to

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have enough money to last you
your retirement years

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while living the lifestyle
that you plan for.

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Sounds pretty
straightforward, right?

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Where it gets complicated
is negotiating

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between two equally but valid
conflicting concerns

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with your money in retirement.

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Number one, you have the
need for safety and principal

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preservation.

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I mean, you're not
putting more paychecks

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into your retirement accounts.

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But also the need
for growth to hedge

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inflation, and other unexpected
costs during retirement.

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So how do we balance
these two concerns?

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That's where I have
Ryan Marston of Rubino

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& Liang Partners on with
me this week to discuss.

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Welcome to After the
Paycheck, the series dedicated

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to helping people to and through
their retirement process I'm

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your host Adam Blye.

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This week, I'm here with partner
at Rubino & Liang Wealth Partners

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Ryan Marston.

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Pleasure to be here with you. Good

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good to have you here.

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Very cool.

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Yeah And this week,
we're going to talk

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about why your retirement
portfolio strategy needs

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to be different than
when you were working

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and how mentally to make that
adjustment before retiring.

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So you help maximize your
probability of success

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for retirement.

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Yeah great topic.

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I think it's a common question
or like unknown to some

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of the people we sit down with
and talk to them about really

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what the difference is and
how they would change it

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that they have to make
mentally going into retirement.

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Yeah, I think that,
like you said mentally,

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I think there's a big
disconnect between that.

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And we're going to get
into that with that.

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You know you spent 40 years
of your life working for this,

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whether it be a various
amount of companies

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or this other thing.

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And then all of a sudden,
you're just done in a year.

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How do you mentally
prepare for that.

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It's Yeah, it's tough.

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I mean, you've been saving
these entire 30, 40 years,

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however long your working
life was into these retirement

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vehicles you just plow
as much money as possible

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into it hopefully get some
good returns with the market

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and all of a sudden it's build
up to x amount of dollars

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and wealth.

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What do I do now like, what
can I take out of the account.

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Like where do I go from here.

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Heading into retirement right.

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So let's kind of get in
says move this forward

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into what those two
mindsets are you have

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what you guys called
two different phases

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of your most of your life.

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But Yeah you're right.

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There's accumulation and
then deep cumulative.

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Yeah Yeah, exactly.

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So the accumulation phases
is during those working

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years right.

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And not only again, are
you putting money in

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and hopefully
maybe your employer

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is actually matching
some of that money

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you're putting right.

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But you're getting some growth
on the accounts as well.

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So the assets are
accumulating and you're

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really just worried about growth
because you're not taking money

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out.

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So it's like an
emergency or you need it

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for one Cain loan or
some other reason right.

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But you're not taking
money out of the account,

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and then all of a sudden,
as you're getting closer to retirement

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it starts didn't well it
should be cheap.

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Mindset needs to be
changing a little bit.

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And how do I gear up for
that accumulation phase in.

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I'm going to be withdrawing
money from this account.

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How do you position the
account because it is.

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It should be.

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Actually a lot different
than that accumulation phase

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how you position assets
in the retirement

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account for the deep
humiliation phase right.

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Right we spend the majority
of our lives thinking we

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need to grow our assets.

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We're always going to
consistently have that paycheck

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to just again add
into that account

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that when you have to shift over
to that idea of I have to spend

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is there a point where a person
has to, again mentally come out

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of that idea of,
hey, I'm not going

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to see this money
grow as much anymore.

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There's going to be
negatives out of it.

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There could
potentially be a right.

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So I mean that you can't
get into as much trouble

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on the accumulation side.

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Because even if you're
having a bad market year

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you know you're again,
you're plowing money into it. That's

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offset some of
those losses

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and you're actually
dollar cost averaging

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into the market
getting better growth

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on the money you add in
when the market might not be

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doing as well.

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But on the Dickey
emulation side,

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you can actually run into
a lot of more issues,

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potentially if the accounts
not or your retirement accounts

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aren't properly set up.

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You know if it's too risky and
there's too much volatility

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or you're drawing down too
much, which we can get into.

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That's actually what it
when I want to get it right.

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And understanding that I'm
going to be making withdrawals

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because I got my paycheck is now
what my 401(k accounts or what

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my retirement portfolio is there
a point where I'm pulling down

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too much.

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And how do I know what that
balance is so potentially

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right.

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So it's like using a couple
examples or an example

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is, let's say you had an
all stock portfolio going

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into retirement.

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I mean, obviously that be a
little bit aggressive right in.

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You know there could be in your
drawing 4% from the account.

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You have a 4%
withdrawal strategy.

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So you have a million.

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It's in all equities and you're
taking on $40,000 a year.

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Well, what happens
if February, March

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of this past year, the
coronavirus bear market issue

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and happens and you lose.

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If you had an all
stock portfolio you

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could have lost upwards of 30%
in that few week time period.

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So now you no longer
have that million.

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You have 700,000. BUT you're
sticking to the 4% rule. 4%

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on $700,000 is a lot different than
4% on a million.

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So you're going to have to
adjust your expenses or budget.

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And I don't think anyone
really wants to do that.

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That's the issue you
could potentially

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run into without having
too risky of an account

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or retirement account.

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Leading into retirement.

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OK So this kind of
goes back to what

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we were talking
about before about that that balance

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between that safety of
having

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the money that's going to be
available to pay those expenses

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to keep the lifestyle.

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Well I don't want peanut butter & jelly
sandwiches every day just to--

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they're OK every
so often right.

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I don't want to every day.

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Right I know what I
want here and there

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when I'm giving them to my son.

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Yeah Yeah.

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Yeah Yeah.

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Daphne won't eat half of hers.

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The I kind of a thing like.

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But But it's also, again, like
you said, let's say there's.

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So if I have all of my money
in this particular equities

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that I'm sure that's probably
not a good strategy to be it.

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I think it's a very
risky strategy.

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So you want diversification
not only like you know people

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traditionally, they might have
a different mindset of like what

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diversification is in.

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You know you have different
stocks or different asset

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classes, whether it's
financials or health.

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But if you want diversification
of accounts to grow

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you need accounts that are
more stable while you're

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drawing them down.

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You need income
producing accounts.

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There's nothing
wrong with equities

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but equities should be designed
to keep up with growth,

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inflation unexpected costs.

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And that might come down
the line in the future.

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But those that's more long term.

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So you want people can have the
capital you know few buckets

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strategy and for
the short term, you

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might have a fixed income
or an annuity that produces

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some sort of income
stream that is

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going to be stable,
less volatile

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than what that equity was.

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So you don't know if
February and March happen.

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You don't have to
all of a sudden

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take a pay decrease and, and
live on an even reduced

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expense or budget scenario.

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How do I start to calculate
what that balance would be?

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I mean, we go.

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I mean, you and I actually
off to often bring up

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in previous episodes, the
need for understanding

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what your budget is.

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Yeah but how do
we then understand

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what my balance
should be between what

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should be in those small
and what's a safety vehicles

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but like those
more fixed assets.

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Yeah, I have.

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This part like if you're
going to structure it

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that way you know, I always
look at like the next one

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to five years is short
to intermediate term

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like you don't want
the money that you're

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going to need for the
next one to five years

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to live on from your accounts
in something aggressive.

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OK because of the volatility
that the markets potentially in

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again, if you have a setback
a 30% on in the equity.

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And you know say equity markets
and using very general term

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on numbers here.

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But equity markets here
30% setback you don't want

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have to take a pay decrease.

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So if you have those and
more STABLE accounts,

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whether it's fixed
income or annuities

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that aren't going to be
as volatile as equities.

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That's how you're
positioning yourself.

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So you don't have to
actually make any changes

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or sustain any losses
because the losses would come

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on that lot more long term
growth growth oriented stuff

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that you're giving
it time to recover.

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OK All right.

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Because you're not reliant
on that in the short term. OK

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And I'm like, I said, I'm also
not withdrawing from it.

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So Jack the smaller
pool of money

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that has to work harder to
grow you get back to the exact

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like under that example,
like fast forward.

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Market's done pretty well
since that crisis earlier

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in the year.

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And if you didn't
draw down from that.

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Well maybe you've recovered
or close to recovering

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at this point.

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But if you actually
start with spending down

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from that same account
from February to now

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you compounded that effect
of that negative drop.

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You probably haven't
recovered since then.

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OK OK.

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So if I'm someone
who is, let's say

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within five years of retiring.

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So I'm still in this
accumulation phase

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I've been watching
this episode right now.

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And I'm realizing,
OK there is

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a point where I'm going
to start withdrawing from my retirement

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in let's say another pandemic
or another market volatility

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correction thing
happens an event happens

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that causes this big stir.

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What are some steps I can do
today to help balance myself.

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Great question.

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Ready and something like that. Yes,

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so you know someone gearing up
for retirement five years

00:09:37.240 --> 00:09:40.070
is definite not too soon
to start looking into it.

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How do I position my assets.

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You know at that point
in time, you're not.

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You might not want to like put
everything until like safety

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on safety side.

00:09:48.300 --> 00:09:50.580
Yeah but you want to start
risking your portfolio

00:09:50.580 --> 00:09:51.220
a little bit.

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So you don't have the year
before you retire, you're not

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in there's a huge
economic crisis.

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And you don't want to suffer
a 30% loss that's either

00:10:00.120 --> 00:10:01.420
going to delay your retirement.

00:10:01.420 --> 00:10:03.810
Now or again, reduce expenses
we keep going back to that.

00:10:03.810 --> 00:10:06.030
No one wants no one
would want that.

00:10:06.030 --> 00:10:09.810
So as you do when you're within
five years from retirement

00:10:09.810 --> 00:10:13.860
you want to start looking at the
amount of risk your is taken on

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and really analyze that
and start deal risking it

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and you do that through
the balancing of the funds

00:10:18.750 --> 00:10:21.353
you're using or taking
some chips off the table.

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That was give me
my next question.

00:10:22.770 --> 00:10:24.600
If I'm just you
know Joe Schmo who

00:10:24.600 --> 00:10:26.350
works as a marketing
guy at some company.

00:10:26.350 --> 00:10:29.460
And I don't know what
db risking or balancing

00:10:29.460 --> 00:10:32.027
is, how do I know
where to do that

00:10:32.027 --> 00:10:34.110
or who to talk to make
sure that that's happening.

00:10:34.110 --> 00:10:36.480
Well Yeah, I mean, you
know you can always

00:10:36.480 --> 00:10:37.380
reach out to someone.

00:10:37.380 --> 00:10:38.750
I always I would always
say you can reach out

00:10:38.750 --> 00:10:41.082
to us if you want to take a
look at the amount of risk

00:10:41.082 --> 00:10:42.540
your portfolio was
taken on and see

00:10:42.540 --> 00:10:46.020
if it actually fits where
you are on your time horizon.

00:10:46.020 --> 00:10:50.940
But when you go into like
you log into your 401(k

00:10:50.940 --> 00:10:56.550
or your retirement vehicles you
can always reach out to them.

00:10:56.550 --> 00:10:58.500
I would say they're
not going to give you

00:10:58.500 --> 00:11:01.470
something specific till like
your retirement situation.

00:11:01.470 --> 00:11:04.600
But they can give you some
information on your portfolio.

00:11:04.600 --> 00:11:07.195
But it's more than
just that,

00:11:07.195 --> 00:11:08.570
right. When you're
looking at it, you're

00:11:08.570 --> 00:11:09.987
going to make sure
the risk you're taken

00:11:09.987 --> 00:11:12.540
on fits what your retirement
outlook looks like

00:11:12.540 --> 00:11:14.770
and what your needs are
going to be in the future.

00:11:14.770 --> 00:11:15.720
And how it fits in.

00:11:15.720 --> 00:11:18.900
So it's not like everyone
five years from retirement

00:11:18.900 --> 00:11:21.010
should have the
same risk portfolio

00:11:21.010 --> 00:11:23.100
and everyone is going
to be different.

00:11:23.100 --> 00:11:25.200
So you really want to
sit down with someone

00:11:25.200 --> 00:11:28.210
and go over your
specific situation

00:11:28.210 --> 00:11:31.650
and how all your accounts
filter into that situation

00:11:31.650 --> 00:11:32.400
like you said.

00:11:32.400 --> 00:11:34.008
Everyone's situation is unique.

00:11:34.008 --> 00:11:35.550
You were talking
about like balancing

00:11:35.550 --> 00:11:36.810
and talking to people.

00:11:36.810 --> 00:11:39.040
If I had like a target
date fund type account.

00:11:39.040 --> 00:11:40.800
There's pros and
cons to that right.

00:11:40.800 --> 00:11:41.490
There are.

00:11:41.490 --> 00:11:45.950
Yeah target date fund
accounts are stuff.

00:11:45.950 --> 00:11:48.450
Yeah, I was just talking about
this the other day and target

00:11:48.450 --> 00:11:52.170
date funds are good for someone
that doesn't want to really

00:11:52.170 --> 00:11:55.730
actively manage for 401(k or in.

00:11:55.730 --> 00:11:57.530
We have someone that
they can rely on

00:11:57.530 --> 00:11:59.302
to help them manage
their foreign work.

00:11:59.302 --> 00:12:01.010
Right So you're going
to pay if you want.

00:12:01.010 --> 00:12:03.930
If you're going to retire in
20, 30 you pick a 20, 30 fund,

00:12:03.930 --> 00:12:07.640
and they're going to de-risk
that fund accordingly

00:12:07.640 --> 00:12:10.580
as you get closer
to the finish line.

00:12:10.580 --> 00:12:12.470
But the problem is it
doesn't necessarily

00:12:12.470 --> 00:12:16.240
account for market
concerns economic crises

00:12:16.240 --> 00:12:18.020
and it puts everyone
that's going

00:12:18.020 --> 00:12:21.468
to retire in 2030 into
the same bucket too.

00:12:21.468 --> 00:12:22.260
So maybe you don't.

00:12:22.260 --> 00:12:24.135
And you're fortunate
enough to have a pension and

00:12:24.135 --> 00:12:26.330
you're less reliant on
these funds you

00:12:26.330 --> 00:12:31.010
have in the long k you might
not want to be in the, 30 fund

00:12:31.010 --> 00:12:33.560
because it might be actually
be conservative right.

00:12:33.560 --> 00:12:37.270
Conversely like you might need
more conservative nest egg

00:12:37.270 --> 00:12:38.450
than the 20.

00:12:38.450 --> 00:12:39.840
Just because you're retired.

00:12:39.840 --> 00:12:42.950
So it kind of puts everyone in
the same bucket, which I really

00:12:42.950 --> 00:12:44.340
don't like.

00:12:44.340 --> 00:12:47.240
But it does help
people on the other end

00:12:47.240 --> 00:12:51.080
with managing the
actual portfolio that

00:12:51.080 --> 00:12:53.380
might not be a savvy investor.

00:12:53.380 --> 00:12:54.620
Yeah Gotcha Yeah.

00:12:54.620 --> 00:12:57.090
So to kind of wrap
things up here.

00:12:57.090 --> 00:12:59.700
If I am again, within
five years of retirement.

00:12:59.700 --> 00:13:03.572
I need to understand mindset
wise humiliation means

00:13:03.572 --> 00:13:05.030
understanding that
there's gotta be

00:13:05.030 --> 00:13:08.510
some balance in my portfolio,
which means there's liquidity.

00:13:08.510 --> 00:13:11.270
Sure there's that
safety aspect where

00:13:11.270 --> 00:13:13.670
I can have enough money to
pay those one to five year

00:13:13.670 --> 00:13:14.610
expenses that yes.

00:13:14.610 --> 00:13:16.310
Right but then
also understanding

00:13:16.310 --> 00:13:18.460
that people live longer today.

00:13:18.460 --> 00:13:20.810
There's a longevity
risk that people

00:13:20.810 --> 00:13:22.958
need to understand
in their retirement

00:13:22.958 --> 00:13:24.500
that while they're
pulling down there

00:13:24.500 --> 00:13:28.340
needs to be some moneys
that's generating

00:13:28.340 --> 00:13:31.070
enough interest exist
that is offsetting

00:13:31.070 --> 00:13:32.510
the other costs of living.

00:13:32.510 --> 00:13:33.170
Yeah Yeah.

00:13:33.170 --> 00:13:34.100
There's you know
you should always

00:13:34.100 --> 00:13:36.267
have that safety bucket,
which is like the liquidity money

00:13:36.267 --> 00:13:37.340
in the bank.

00:13:37.340 --> 00:13:38.660
Emergencies happen.

00:13:38.660 --> 00:13:41.660
Nine months of nine months
to a year of expenses

00:13:41.660 --> 00:13:45.420
roughly or more if you
didn't feel comfortable

00:13:45.420 --> 00:13:46.100
with just that.

00:13:46.100 --> 00:13:47.410
And then you have
the income bucket,

00:13:47.410 --> 00:13:48.940
and then you have
the growth bucket.

00:13:48.940 --> 00:13:51.230
That's again, a very general
way of looking at it.

00:13:51.230 --> 00:13:53.600
You need to break down
your assets at least

00:13:53.600 --> 00:13:56.970
to like that sort of aspect.

00:13:56.970 --> 00:13:58.470
Yeah I'm not thinking
that I'm going

00:13:58.470 --> 00:14:00.637
to be able to be the one
picking the spot the stocks that

00:14:00.637 --> 00:14:01.700
I'm in at the time.

00:14:01.700 --> 00:14:03.740
Yeah but I think you
said, it's very important

00:14:03.740 --> 00:14:07.010
to understand that that just
to have that mentality just

00:14:07.010 --> 00:14:09.140
to be able to give
yourself peace of mind

00:14:09.140 --> 00:14:11.442
as you're drawing down from
accounts because you're not

00:14:11.442 --> 00:14:12.650
replacing that money anymore.

00:14:12.650 --> 00:14:14.510
Exactly it's all
about added peace

00:14:14.510 --> 00:14:15.710
of mind added peace of mind.

00:14:15.710 --> 00:14:16.458
I like that.

00:14:16.458 --> 00:14:17.000
You're right.

00:14:17.000 --> 00:14:18.080
Thank you very
much for the time.

00:14:18.080 --> 00:14:18.800
Thank you for having me.

00:14:18.800 --> 00:14:19.300
Thank you. If

00:14:19.300 --> 00:14:20.700
you guys have any questions.

00:14:20.700 --> 00:14:23.490
And you're not already had
after the Paycheck head there.

00:14:23.490 --> 00:14:26.570
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