Podcast: Roger Whitney — Agile Retirement Management

Episode 55 of the NewRetirement podcast is an interview with Roger Whitney — author, financial advisor, podcaster, and founder of the Rock Retirement Club — covering Agile Retirement Management and how to truly Rock Retirement.

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Full Transcript of Steve Chen’s Interview with Roger Whitney:

Steve: Welcome to The NewRetirement Podcast. Today we’re going to be talking with Roger Whitney, an author, financial advisor, and podcaster. He runs the Rock Retirement Club, wrote the book of the same name, and hosts the Retirement Answer Man Podcast going on seven years.

Roger: Seven years.

Steve: Congratulations. Roger has spent his career helping people figure out retirement, one on one, via podcasts and through building a community. So Roger flew up today from Fort Worth, Texas, and is with us in studio. We are doing this podcast in person but distanced and with negative airflow, we are far apart. We’re going to be talking about agile retirement management, and how to truly Rock Retirement. So with that, Roger, welcome to our show. It’s great to have you join us.

Roger: I am ready to rock. This is a beautiful setup. This is God’s country right here.

Steve: Yeah, we haven’t done too many in studio. It’s so it’s cool.

Roger: I’m not leaving.

Steve: Yeah, you’re welcome to say. Join us in the garage office. Alright, so before we get going, I just want to kind of disclose to everyone listening that we do have a partnership with Rock Retirement. And it’s bidirectional. So what happened was that Roger licensed our platform for use inside of his club, which has hundreds of members, and we appreciated that. And we also saw the value of his community and wanted to offer that to our users. So we, in turn, allow our users to join his club. And it’s been so far pretty good. I think your audience appreciates the platform, we’re learning quickly, based on how your users are using it, which is super helpful.

Roger: Well, I love virtuous circles, we’re serving the same people, people that are on the verge or in retirement, and it enhances everything for them to figure out how to make great decisions.

Steve: Yep, totally. So Roger, first, I wonder if you can give us kind of a couple minutes on your background, and kind of how you got to where you are today?

Roger: Well, it’s always hard talking about yourself. So I’ve been a financial advisor for almost 30 years, which makes me feel old, by the way. And I’m a certified financial planner, I always say that I’m classically trained as a financial planner, because financial planning in the CFP curriculum hasn’t really had a major update. It’s very process oriented, very cumbersome in ways. And so I’ve had the journey as most financial planners have of growing their business, maturing their business.

Roger: And 15, 20 years ago, we went out and started an independent business. Fast forward to today, now I have a really focused practice, where I only work with clients that are walking the journey into and living in retirement. And it’s one that is pretty much at capacity. So I’m just trying to walk life with those great people and serve the community that we have with the podcast and with the Rock Retirement Club.

Steve: Yeah. So do you feel like what you’re doing today differs in a big way from where you started at UBS. And when you were part of your own kind of boutique, financial advisory, wealth management firm.

Roger: Definitely, financial planning came from insurance and investment people. When financial planning as a profession came to being in the 80s and 90s. And so everything was focused on the hub being the investment portfolio, because it was investment managers, and it was insurance people. So everything was around investments. And even to this day, most financial planning focuses on the assets as the hub of making decisions. And in truth, people aren’t worried as much about that. They’re worried about retiring successfully, making sure they can Rock Retirement and not just survive retirement. And so traditional financial planning is this more one dimensional approach, and now we get to do much more multi-dimensional planning, where we’re talking about life issues and mission issues as much as dollars and cents.

Steve: Do in your head, kind of like the rough split in terms of the time you spend on the traditional asset management investment side versus healthcare, purpose, other activities?

Roger: Oh, boy, that’s a good question with clients. Well, we use an agile approach in our planning practice, and I think we’re going to talk about agile retirement management. So we think of working with a client as an agile project. So if I had to say that the percentage of time usually when we’re looking at the investment assets, it’s in the context of allocating their entire balance sheet, Meaning their whole net worth statement, their liabilities and their assets? Are they aligned to help them take a step forward to achieving the life that they want? So we don’t really think of it in those little buckets.

Steve: Got it. Yeah, can you elaborate a little bit more about what you’re doing with the Rock Retirement Club, and kind of what your vision is there. And then we’ll talk a little more about the Agile retirement management method.

Roger: Now, the Rock Retirement club is a online community. It’s almost three years old. And it came from our podcast, I’ve had this podcast for seven years Retirement Answer Man. And a lot of people were wanting more engagement and education beyond just the podcast. So we asked them. And so we started this community, club, to find like minded people that want to be very intentional about making the most of this period of life. So we just started the community.

Roger: So right now, the community offers, we believe world class education, world class tools, and then world class coaching and inspiration. So people can make smarter decisions to create a great life. So my vision for it is to expand that to be literally the hub where someone goes, if they want to empower themselves to make the most of this period of life. And so that’s going to be expanded on the community, on the education and on the tools offered, for people, too…

Roger: Because a lot of times a tool, like you have an amazing tool, knowing how to bring that tool to life is a whole different level of having a tool. I can buy a calculator. But if I can be around people that are intentionally thinking about how to use a calculator, and how to make it sing their song, just like someone that makes the furniture like the desk you’re sitting at, I could never do that. But they know how to make those tools come alive. That’s where the community comes in. And that’s what we’re trying to provide is not just simply the nuts and bolts, but the blueprint, help people create their blueprint and then use these tools to bring it to life.

Steve: Yeah, totally makes sense. Do you think that people are achieving better outcomes through the community than they did when you coached people or served them one on one?

Roger: I don’t know if it’s better outcomes. Because what I do one on one, I’m really walking life with clients. I mean, I’m fairly integrated in a lot of things going on. When I think of the Rock Retirement club, it’s my opportunity to one, teach with no sales motive, because I think if I was born again, I’d probably be a professor. I think I’m a teacher at heart. And so it allows me to speak into their life and give them education to empower them. So it’s a little bit different.

Roger: And I think when we think about retirement planning, and someone’s in their 50s, or maybe their 60s, and they’re getting ready to retire, it’s very common for them to go to a podcast, go to blogs, start searching for information. And the difficult part is, in my opinion, is that the internet is essentially one huge infomercial. Anything that you read or consume is trying to get you to go somewhere, to the email list, to the course or to whatever. And with the Rock Retirement club, what are the main tenets of it, it’s a safe place. So all the education, there is no upsell in the club. So that means that the education that I get to create, there’s no profit motive other than teaching it and hopefully adding enough values so they stay in the club.

Steve: Yeah, I think it’s a great point. I mean, that’s a big part of the reason we designed our business model the way we did, which is subscriptions. We want people to know that we’re fully aligned with them, they are paying us for the software, that’s all there is, there’s not other stuff. And I think everyone wants things for free, the internet’s all free. But if it’s for free, then you’re the product. And that’s essentially what happens across Facebook, and in every other channel when you’re out there.

Roger: And it’s harder to get respectful conversations with people that have the same spirit as you. You get what you get on Twitter and Facebook at times.

Steve: Yeah, I mean, you don’t always know where they’re coming from, do they have an ulterior motive? And I think that’s one of the problems we’ve seen in financial services, too, is that at a super high level, the business model is based on the consumer having more assets and the advisor making money on those assets. It’s the 1% model, AUM model, or if it’s transaction fees, or whatever, and it’s not transparent, it’s not up front. And so you get these underlying incentives that you don’t necessarily see, the consumer doesn’t necessarily see where, hey for instance, we won’t talk about annuities because that involves you selling assets. We’re just going to talk about things that make you have more assets because that’s good for me as the advisor.

Roger: Yeah, and the incentive is to tell you not to pay off that mortgage or to… Yeah, it doesn’t necessarily align.

Steve: Yeah, exactly. That’s interesting. I like what you said about kind of walking side by side, I think that as an advisor, that’s what they’re doing, which is great. And it does add a lot of value. I think one of the challenges with the space, though, is that there are just not enough advisors to help the number of people that are out there, or because it’s one on one you have to charge a higher price.

Roger: I think it’s a little bit of both of those. I think it’s very bespoke. I work with about 85 clients. And that’s roughly my capacity. And most financial firms, and these are all my opinions, by the way, I’ll let you know if it’s a fact. Most financial firms, in my opinion, they’re always focused on more in scale. And if you’re trying to scale financial planning, two things have to happen. Either one, you have to create massive infrastructure of lots and lots of planners to hit the scale that you want. And that’s expensive. Or two, you have to what I provide what I call faux financial planning. Where you talk financial planning, but you’re not really doing financial planning. You’ll run some Monte Carlo reports you’ll meet but mostly you’re just trying to keep the assets. It’s more of the relationship management theme that financial services have done for decades. And so it’s very difficult to do real financial planning, where it’s really deep, because it’s not scalable, which also means that most people can’t afford it.

Steve: Yeah, no, that’s one of the big… I think, what I like a lot about what you’re doing with the community is that it’s much more scalable model.

Roger: Yeah, well, that’s the idea. If you have this bespoke very expensive, someone’s going to walk life with you, which is a deeper relationship. I think there’s a lot of value in that, obviously, because I do it, and my clients seem to be happy. They’ll tell me if they’re not. And then you have the wild west of financial products or blogs, there’s nowhere in between to really serve people at scale, where there’s no big upsell. And that’s the beautiful part about education and community and these kinds of things is that they scale, being able to speak into people’s lives, as long as it’s an equal transaction where it feels like a win-win. I think it’s filling a big hole in financial services.

Steve: Yeah, for sure. I think that one to many verses one to one approach definitely has legs. So with that, I mean, how’s it going so far? I mean, how long have you been at the club? And how many members? And what are some of the big challenges you’ve run into, as you’ve expanded it?

Roger: You should get my team in here. So we started the club, about two and a half years ago, having no clue what it was going to be. We were surveying listeners, we did a survey to our podcast audience, and I got about 800, 900 responses, which blew me away, most of them were favorable. So I thought, okay, let’s get on the phone. And so I got on the phone and talk to 70 of them in about two days. I had 5, 10 minute conversations. And that’s what the club grew from, and we just started with 15. We said we were taking 15 in and then we would just start there.

Roger: So now we’re at, we just went over 500 members, we have a complete masterclass, which takes you from the beginning of, I think I might want to retire to understanding whether you have enough money to retire. And then how do you start to allocate your assets to create that retirement. So we have a full masterclass now that we’ve created, built off an agile type of project. We have weekly meetings where we bring in guest experts on specific topics like Medicare, Social Security, and then we bring in the tools, like the planner plus tool, which is awesome. And we bring in Everplans so people can use those tools. And the nice thing is, now we have this ecosystem where everybody has the same language, they’re taking the same course, they’re using the same tools. So together, everybody can learn how to really make these tools sing because they’re all using them together. And the motto of the club is walk with the wise and become wise. So it really creates this again, virtuous circle.

Steve: Nice. Do you think you’re seeing a more diverse population with the community than you do one on one, since it’s more affordable?

Roger: I don’t think so, actually.

Steve: I don’t mean racially. I mean from a wealth perspective and age and race too I guess, on everything. And gender.

Roger: So I think economically, on the economics end of it, not so much because pretty much everybody has come to the club for my podcast. And so if you think of the… It’s a little bit of adverse selection, who’s going to listen to a geeky retirement podcast? You’re going to have the people that probably have done all the other things correct already. And so that has created a more homogeneous group. Now we have about 35% women. It’s fairly diverse from a gender standpoint, I don’t know on any other matrix. I will say and this is what I learned when, initially from those 70 conversations, but now talking pretty much everybody is that a couple common denominators that really blew me away initially, and it stayed that way as one everybody is very intentional. Everybody is solution focused, and everybody is nice.

Steve: Nice.

Roger: And we have a standard of conduct in the club, and I’ve never had to enforce anything. We don’t have the kind of conversations you see on open forums.

Steve: That’s good.

Roger: So if we can keep that I don’t care who’s in it.

Steve: That’s awesome. So what kind of things do you help people with? I mean, I guess, you kind of listed at a high level, are there any outlier things that you would call out.

Roger: Like inside the club?

Steve: Inside the club.

Roger: Well, I have private office hours every Friday. And anybody can schedule a half hour with me to chat about anything, and the line is it is all education, and quote, unquote, entertainment, but education. And most of the time, people are just struggling with framing how to think about a decision. So most of the time, they don’t actually need advice, they just need some perspective. And so we give a lot of perspective there. And one thing that we do that’s been really impactful is we do these things called sprints.

Roger: So for example, we’re in a sprint right now, we just had the first session last night, where we announced to the club, “Hey, we’re going to do this sprint, it’s going to be three weeks, one night a week for three weeks. And this sprint we’re doing is dialing in your spending estimates, your needs, wants and wishes.” So over three weeks, we meet once a week, and I give them tools and I give them homework and we have a private group. And we set a sprint where they are supposed to accomplish things at a particular interval. So at the end of the three weeks, they’ve actually refreshed or dialed in their spending estimates, which is fundamental. That thing that you need for any kind of planning you’re going to do.

Steve: That’s awesome. Yeah, I mean, it definitely resonates. And that’s how we run our software development exercise is that when we’re doing sprints, we’re using the Agile methodology. That’s cool. So how do you think you can reach more people doing this? So what you’re saying about your audience and how they self select definitely resonates, we see that too. So people that will take the time to build a retirement plan tend to be wealthier, they’ve been saving and planning their whole lives, and now they’re taking the next step. But we’re interested in educating people earlier in their life cycles, when they’re less wealthy, and not as knowledgeable. When we’re doing surveys, some people say, “Oh retirement’s not for me that?” I can’t imagine that, and they just don’t even think about it. How do you think about reaching more people and engaging more people?

Roger: I don’t know. I don’t know. My team has asked me with our show Retirement Answer Man. So it’s sort of self selects, it limits it from an audience standpoint. I serve people in a very specific period of life. If you think of life you have the major changes in life are going to be graduating high school, graduating college, getting married, and retirement. I focus on that transition towards retirement. That’s all I think about and that’s all I talk about.

Roger: And so do I want to reach more people that are thinking about those things? Definitely. How do I do that? I don’t know. I do my podcast and try to write for Forbes when I can get my articles out. And but I do think the concepts and this is where I think like the comment you said “Well, I’m not thinking about retirement.” I do think that the concepts that apply to good retirement planning, apply to my 25 year old son. So I think there is much more than that. I just don’t have the bandwidth in my mind to be able to talk to my 25 year old son, and what I’m trying to accomplish here. So that’s a good question.

Steve: Yeah, it’s a good answer to I mean, you have to focus right to be really good at things. And so it’s hard to take everything on. We’re definitely struggling with that. And we want to help more people. But we’re staying focused on kind of 45 plus for now. But I do think longer term, we’ll think about ways to extend it.

Roger: Well, the way I would think about that, though, Steve, is you’re in a stream, and those people that are 25 will become 45. Those 45 year olds, I only talk to people over 50, they will become 50. I’m the one that speaks to them at this period of life. They’re like my, my high school teacher, I remember, Mr. Fowler, you probably in some way had an impact on me doing a podcast because I joined the debate club, and he was my debate coach, big influence in my life. He was there during that period of life to speak to me. If I met him today, he probably wouldn’t speak to me in the same way, because that was the teacher for that period of my time. And so I don’t know if we have to figure that out.

Steve: Yeah. There’s definitely value to be just educating this cohort of people, and they in turn, can educate younger people, I think there’s a lot to be said for that.

Roger: Here’s an interesting thing where it might work. One suggestion that I had in our recent survey of club members where I wish you would do some meetups periodically for our children. And so that might be a way about it.

Steve: Yeah. I think there’s a lot of power in bringing together different generations. And there’s also incentives too, because wealth tends to be concentrated in older folks, especially folks that spend their time thinking about retirement and have been planning and saving. Younger people that might be inheriting some of that money probably care about, is it something that could be coming to me. And I think there’s definitely an opportunity around estate planning, but then engage this population just educate other folks, because a lot of people that we serve, they have lots of human capital, and they’re interested in how can I help other people.

Roger: Definitely, definitely.

Steve: We’ll see some of that. Having said that, it is easier for people to course correct at 25 or 30, to start their good habits then so they end up as a I’m a 50 year old that has a million bucks or whatever the number is.

Roger: Everything is about habits. Everything, when it comes to becoming financially independent, rocking retirement, is about habits. And in my mind, they’re about little conversations. That’s always what I say. Is everything is about having the right little conversations. Because that’s how you iterate is you check in, you poke around for risks and opportunities, you reassess where you want to go, you set your next objective, and then you go do and then you iterate again.

Steve: Yeah. Before I move on, I do want to dive into kind of some of the big lessons and what you’re seeing as you serve these folks and work together, get involved, but do you think that there’s a limit on how many people you can serve in your community?

Roger: I’ve never said this out loud. I’ve written it down. But my goal is, as of now, 10,000.

Steve: Wow, that’s a big number.

Roger: I think it’s too important not to. I think 10,000 is where we should be.

Steve: Got it. Yeah, it feels I mean, you’re if you’re a 500.

Roger: Seems like a crazy number at the moment, but it may be too small. I don’t know. But I think this is the place where you can serve people at scale. Most people don’t need a financial advisor. They need some education, some encouragement, and maybe some coaching from every now and then.

Steve: It feels like that could be possible. 85, call it 100 people that one wealth advisor, financial advisor can serve one on one, you’re demonstrating you’re successfully serving 500 people. You look at universities, assuming it wasn’t you, but you built a whole set of teachers.

Roger: Well, I had four coaches in the club that are interacting and doing meetups and teaching as well.

Steve: Yeah. Yeah. That 10,000 or in the tens of thousands could be possible. And then if it was all digital, I mean, you look at some of these online schools, you feel like, oh, maybe there’s a way that it could go beyond that. But I’m sure it’ll evolve. You mean, you’ll learn a time as it grows.

Roger: I’ll iterate to whatever it’s supposed to be. I’m not too worried about numbers. I just keep trying to do good things.

Steve: That’s awesome. So can you list off some of the big lessons you’ve learned, as you’ve gone from helping people one on one to now helping people in groups. What are some of their biggest fears? What are some of the biggest mistakes they’ve run into? And some of the best moves that they’ve made you think?

Roger: So it’s very interesting. When you talk to so many people, and then when you survey them, and have them tell you what they’re most excited about, most afraid of, and everything else., if you really listen, and it I think, if you listen, there’s a lot of commonalities. And I heard a quote the other day, I have no clue who said this, I can’t remember. But it was if you get over yourself, you can accomplish almost anything. And I think that is one of the big things that we all struggle with. So when you’re getting ready to retire, if you think about it, you have spent decades saving and investing and growing. And maybe you had some dream about retirement, or maybe you are just ready to slow down and get off the treadmill. Well, if you think about what retirement does, as soon as you retire, you lose your income. That’s scary. You stop saving, that’s scary.

Roger: You don’t have any project to work on, which means you don’t have anything to finish, no affirmation. That’s scary, you probably lose your friends, if you were traveling, or you didn’t have a good friend network outside of work. You’ve lost all the structure to your life. Most people in my experience, they feel that, they’re anxious about that, but it’s almost misplaced anxiety because nobody talks about those things. Everybody talks about my number, and withdrawal rate and everything else, and they end up putting all this anxiety on the money stuff, when I’m sure there’s a lot of anxiety in the money stuff. But what I’m realizing is, it’s probably a lot of that anxiety that’s just sort of free floating, because they didn’t identify all these other things that are about to happen to them. Because they’re anxious about that stuff. They just don’t think about it. And that’s one thing I’ve learned from the countless conversations, a lot of it is helping them give themselves permission to do what they actually want to do.

Steve: And do you think that they have a very clear idea about what they want to do?

Roger: Some of them do, some of them do. But no, not most people. And in the course, if you think about like a business. Everybody thinks about cash flow and allocating the resources and sales and marketing, everything else. What do you need to have to start a business? You need to have a vision? What are you in business for? And I think most people lose their vision. Or a lot of people can lose their vision, when they’re so busy in life raising children, starting a career, building a career, marriage and everything else that they sort of lose who they are.

Roger: And so even in the course, the masterclass that we have, one of the first things people do is they go through re-establishing or maybe establishing for the first time their top 10 values. So, if you establish your values, in my mind anyway, your values represent what you want your life to look like. One of my values is adventure. And so when I look at my values, and I see adventure, if I don’t see myself expressing myself in that fashion, then I feel like I’m not living a full life.

Roger: And so I think some people have to figure out who they want to be. You remember when you graduated college? That was the time when you graduated, most people if you’re like me anyway, you didn’t know what you wanted to do. This was like a blank slate. I can move anywhere. I can build my friend network, I can organize my life any way I want. It was really exciting. Retirement can be like that. Because everything can be a blank slate. But the problem is, most people are so trapped in what is, they’re not thinking beyond of what opportunity really is before them.

Steve: Right. Yeah, it makes a lot of sense that you would want to go on this journey with other people. One so you can see there’s other people doing the same thing. They’re struggling with same questions that you have about some of the wider questions around purpose and how am I going to use my time. Where should I focus.

Roger: I have a great story about that, if you want to hear it. This is my favorite story from the club. So it was in an office hours, a private office hours, I was talking to a member. And they were talking to me, they’re early 60s. And they were describing how they always wanted to go to Europe. They dreamed to go into Europe for years, and they probably go in the next 5, 10 years. So that was first statement. Second statement, tell me some financial stuff, it was very clear that they had enough money, they’re going to be fine in life. So they wanted to go to Europe, they’re going to be fine financially.

Roger: And then they started telling me about their younger sibling. “Oh I have a younger sibling. And well, I have a mom and my mom is blind. And there’s this genetic thing. And my sister who’s younger than me there, she’s seen some things happening, where she may become blind very quickly. And I don’t know if I have it or not. And so maybe it’s going to pop up in me.” And I’m sitting here, just listening. And all I hear is they’re financially sound. They have this genetic trait, mother’s blind, younger sister, it’s showing up, and she may be going down that path, and this person may have it as well. And they’ve always wanted to go to Europe, but they’re not going to go for five or 10 years.

Roger: And I basically said, “Why are you not going to Europe?” And it seemed so obvious to me. But to this person, you could just see in their eyes, they’re like, “Oh.” Like a light went on over their head. I’m like, “Okay.” And so what we did in the club, because this was just a private conversation is I had a meet up in the club, we had maybe 80 people on there. And I told this story, anonymously, because they preferred that and said, “This is what we’re going to do. I need everybody who has gone to Europe, I want you to put in the comments below, tell me the places that you went, what you liked about it. Tell me maybe Bed and Breakfast that you went to. Or any tips, you had, packing and everything else.”

Roger: And we just had all these comments that came in, and then we just collected them and created a little guide of here are all these great places to go. And literally, about four months later, I get an email with photos from London, and from Austria. And this is pre-COVID. Now, so imagine if they had waited Now, that’s a different kind of Europe, that we may not see for years now.

Steve: Yeah, that’s a great story. I think two thoughts on that. So one is, the group would be good for holding yourself accountable. And kind of committing in public doing these things. And have a question around that. Do you see people sticking with the group, because they’re going through this process of getting ready, but then also heading off on this new part of their life and sharing that with other people that they’ve kind of gotten there with?

Roger: I think people come into it for different reasons. I think some people come in because they want to get their questions answered. They want to create their roadmap. They want to become knowledgeable about the journey that they’re about to go on. It makes sense. And that’s really all they want. They are not interested in community. They just want to take the masterclass, use the tools, and they don’t really communicate. I think that’s perfect. That is a solution.

Roger: Some people come in for that, but then just get involved in the meetups and listening to the private podcast because we tape everything so you can listen to them wherever you’re at, and the conversations that are happening around the non financial stuff, and some of the very, very geeky stuff. We have a spreadsheet geek club for those that love spreadsheets. Come for the education, and then they realize, wow, I really wanted all this stuff. I just didn’t realize I wanted it. And we’ve had other members that have come, I can think of one lady in particular, she came when she was going through a big transition where she was moving. And then she got so busy, she left the club, which I think is beautiful. So I think the key is you have to get what you want out of it. For the price point it shouldn’t be too hard in my mind.

Steve: Yeah, exactly. No, I got the value proposition. And the second thing that your story kind of made me think of was, I’m forgetting the person. You probably know, but if you look at when you look at your life, and if you ask yourself this question what would I do differently, or would I make different choices if I only had a year to live, a week to live or a day to live. And I think that being cognizant of time, and that’s our scarcest resource which everyone forgets is they live their life and they’re always focused on building money and not as much about how much time they have left or how much especially useful, healthy time, health span they have left is that is an important thing that people need to be reminded of. And also don’t like to think about because it also reminds them of their mortality.

Roger: My experience with club members and clients as well is, it’s a little bit front and center. And I’m 54. And I mean, I can hear the clock ticking. Now, I’m not the young guy like our engineer here. He doesn’t think about time, he’s got all the time in the world. You get in your 50s, you start thinking, it’s not that, “Oh, I’m only going to live to 90.” It’s really what people worry about. And this is the big quandary of retirement planning in general is, most people want to make the most of earlier retirement, when they’re healthy, they’re active, and they want to go go, that’s what we call it. The go go years. That’s going to be your 50s 60s, maybe some of your 70s. They know that that’s really the sweet spot, where they have the money, they have the time, freedom, and they still have the energy. But they’re afraid, because they want to make sure they’re not destitute when they’re 80 and 90. And those things are at odds.

Roger: And the people that are most position to really rock retirement are the ones that are such good stewards, without the proper context, and encouragement, they will sacrifice and say, “No, we probably shouldn’t do that. No, we probably shouldn’t do that.” Until they get to a tipping point, when they realize they really don’t have to save for a rainy day, they’re going to have more than enough money at the end. And then they’re going to think about what could I have done? And that’s the seesaw that people have to try to balance.

Steve: Yeah, for sure. Well, it’s good that you’re keeping it friends. Again, it’s a self selection group, people that will think about this, they’re aware of this. I think for many people, they’re very focused on the money and making sure they have enough and that overrides their decisioning and leads them to the one more year syndrome I talked to.

Roger: Well, let’s address that. Yeah, let’s address as somebody who doesn’t have more than enough money. And that’s the majority of people, and if you don’t have enough money just to live off of your money, and you have to work or work longer than you would potentially prefer to, if you think about that like a project.

Roger: So one, you still have to think of it like a project, you have to identify, “Oh, I’m not going to have enough money to where I can just retire and live on this.” That means I’m going to have to work and earn something. Well, if that’s the case, you have to identify “Well, what does that mean? What does that make possible then?” Because initially, what will happen is, let’s say you will call it the daily grind job. You’re just in your daily grind job, initially, what you’ll think is “I just have to keep in this daily grind forever.” Or for longer, that’s usually how we think, one dimensionally.

Roger: But if you understand that, now, the sprint or what you can start working towards is, “Alright, if I’m going to have to work longer. How can I slowly move towards something that I enjoy more or slowly move towards something that gives me more time freedom?” Because I will tell you that when I talk to people, it doesn’t matter how much money they have. It has nothing to do with not working. Most people in my experience, are working doing something. They never say they don’t want to work. They say they just want to have more control over their time.

Roger: So this idea of not working is the goal, I don’t think is the goal, really. And it’s definitely not the solution for almost everybody, we’re going to have to work longer, because the numbers are what they are, because of longevity and spending and inflation and everything else. So if that’s the case, then what you have to noodle on is “Okay, well how do I start working towards doing something that is beyond my daily grind job that I can pivot to slowly potentially, where I can maybe have more time freedom.” From that perspective, I think COVID has been a huge benefit to think, “Wow, I could work at home. This isn’t that bad.”

Steve: Yeah, that’s what I was immediately thinking of is that it’s given everyone a sense of schedule control. And what’s possible that don’t have to schlep into San Francisco, spend an hour getting there, sit in an office all day and then come an hour back, or an hour and a half each way. Probably the majority of people that were working, were spending a couple hours a day, 10 hours a week, commuting back and forth. That time is freed up.

Roger: So back in April, May last year, we had a meet up in the club. And this was right after COVID. And we at a prior meeting, “Okay, what do we do financially?” Because the markets are going crazy. And we’re like, Okay, let’s do… Let’s figure out, is there anything burning? But after all, that, we had a meet up about what does this make possible? Which is a beautiful question you’re playing gets canceled, and it’s raining outside and you’re stuck in the hotel. If you just keep asking yourself, what does this make possible that teases out positive thinking.

Roger: But anyway, one of the things that we talked about in that meetup was okay, if you’re working remotely, because a lot of people got to work remotely, were companies, it was totally against their culture to work remotely, they had no choice. So the company had to suck it up and do it. And this was an opportunity to now I need to start, one, showing how productive I am. And start documenting and lobbying with my bosses. So when we go back to normal, I can have the case of “Hey, look at how much more productive I am remotely.” Even if you get yourself one day a week that’s a huge win. But you have to proactively think about how to create that argument.

Steve: Yeah. I mean, what’s interesting, though, is here, many companies, Twitter, Google, Salesforce, they’re going highly hybrid, Salesforce, I think 75% of jobs will be hybrid, or remote. So it’ll probably vary pretty widely across the country.

Roger: I think you’re right. I mean a good company, that’s here is Schwab. And they were very late to go. And I felt the disruption because we use Schwab, they weren’t very late to go remote at all, because culturally, they want everybody in the office. So I don’t know where they’ll go. We’ll settle somewhere in between. But the point is, there’s more opportunities that we have to at least proactively think about if we think we’re going to have to work.

Steve: Yep, for sure. All right. Well, this has been great. I want to jump to a few user questions. So we threw out to our community that you’re going to be here, and we’re going to shift back to some money stuff. So Mary Lou Breiner, asks “What do you look for when making a mutual fund choice?”

Roger: That’s a really good question that feels much more complicated than it should be. And I know I’ve made it way over-complicated in my life, Mary Lou. So when you’re looking for a mutual fund, first off, what is the purpose of that mutual fund? So let’s assume you need a large cap growth fund, I’ll use that as an example. And we’ll call that a screwdriver. Well, the kind of the mutual fund you buy is just the brand of the screwdriver that you’re buying. So then you got to ask yourself, can I just buy the generic screwdriver? Because that’s going to tighten the screw? Or should I buy this one with the fancy stuff attached to it, that’s going to cost a little bit more, and should work but it’s a little bit more complicated so it may break.

Roger: My high level recommendation, Mary Lou is to as much as you can use investments, not investment products. Or being as organic as you can be? And so my answer would be to use very low cost indexed type of funds as a mutual fund choice, because really, you’re trying to fill a slot in your asset allocation. Now, if you’re trying to buy a mutual fund to try to outperform markets, I gave that up long ago, I’ve tried that. And I think that that’s what the industry sells and it’s the sizzle, just no difference than how a Twinkie package looks fancy and yummy, except you don’t understand what’s in it and it might hurt you. So I would say stay as organic as possible. And the bigger decision is, what’s your asset allocation and then go find the tools to fit the individual slots.

Steve: Awesome. Thanks. And here’s a related question a little bit more specific. And again, disclaimer, nothing on this podcast is financial advice. So David Canada asks, “Do you recommend a mutual fund like the Vanguard LifeStrategy Conservative Growth Fund (VSCGX), for a semi retired person who is 59 years old? I’m using this fund in my IRA.”

Roger: So I definitely don’t talk about specific anything. But that is a target portfolio. So it has a specific asset allocation, that doesn’t change. So it’s not a target date fund, like a target date type of fund, it changes its allocation as time goes on. So this is a static allocation. And so when you’re getting into retirement, asset management becomes totally different than you’ve ever done it before. And I don’t think most people realize that. I don’t think most advisors really talk about it that way.

Roger: Because if you think of asset allocation, it’s building this one pie chart of different asset classes, based off of modern portfolio theory to maximize returns for a given level of risk. Well, that entire structure of asset management assumes that there’s no inflows in or out. And it assumes that you’re very, very long term. And so it’s really trying to set up a probability that you’ll have this type of average return with this type of variability. I don’t want to get too geeky here.

Roger: That works wonderfully, when you’re accumulating assets. In retirement, it doesn’t. Because in retirement, you introduce this really important cash flow, which is a withdrawal, you need to pay for your life. And doing a systematic withdraw from a portfolio with volatility, that sequence of return can kill you. And I don’t even want to get into the 4% rule. Anyway, that’s another show. Okay. So when you have consumption that you need from your portfolio, David, you need to build different asset allocations. I affectionately call it a pie cake, you have different pie charts, meaning different allocations, based on when you think you’re going to need the money.

Roger: And so a good example is if you had to pay your bills next month, you wouldn’t put it into even a conservative growth fund, because you don’t know where it’s going to be next month, and you need the money. Well, in retirements it’s the same thing for year one or year two. Each year that you need to take money from your assets, I call them an I owe me. It’s money you owe yourself it’s a debt.

Roger: So a better way of thinking about investing David in or near retirement is what we call asset-liability matching, matching your assets to fund your liabilities, your liability being the money that you need to spend. And so that’s the way I would think about it from a fundamental standpoint. So this target allocation fund that you’re referring to, that may be totally appropriate, depending on where it’s going to fall in that pie cake, how long that money is for. I do like these type of funds more than a target date. Because exactly the target allocation you’re buying, it’s not going to change. So that’s the tool that you want it for that specific job, and it’s not doing all this fancy stuff on the side.

Steve: Got it. Yeah, that’s super helpful. Your pie cake, I like the pie cake image, because it makes sense to me. But it sounds pretty similar to a bucket strategy where you’ve got money, you think, at a certain point. I mean, the money has to do a certain job at a certain point of time in the future.

Roger: Yeah. So if you think of your balance sheet, and this is from the conversation we had earlier, I think of balance sheets. You’re going to have every dollar on your balance sheet is going to go into one of four places. It’s going to go into your reserves which is like your emergency fund. It’s going to go into a pie or bucket that is going to fund anywhere from year two to year 10. And there’s some variability based on the person. Then you’re going to have money that goes into your upside portfolio, which is going to be money that’s going to be there for 10 years, beyond. And then you’re going to have your longevity bucket, which is going to be money that’s going to be there for old age, and that can be asset base, that can be guaranteed income. But literally every one of your dollars is going to be divided in those four areas. And you have to figure out, how thick each layer is going to be dependent on the person.

Steve: No, it’s great.

Roger: And pie cake is much more delicious than buckets.

Steve: Pie cake is good. I hope that gets very famous. Alright. Last question here. Brian Walsh, “What do you think the likelihood of Medicare being…” Medicaid, he said Medicare, “At 60 passing?” So Medicare being available to 60 year olds versus 65 year olds, and how will that impact retirement planning?

Roger: Health care before Medicare is one of the biggest issues that people deal with, it’s huge. Because it’s a huge expense, the insurance even… It’s a huge monthly expense. And then the insurance you buy have huge deductibles. It’s just not working. And when you get to Medicare, Medicare good or bad, and I’m apolitical on this stuff, I have my opinions, but I just try to work the problem. Medicare works really well. And it’s very inexpensive to the end user, at least with the dollars they have to pay. So it would solve a lot of problems. Just like having a good health care system would solve a lot of problems for me as a employer. The likelihood, I have no clue. I have no clue.

Steve: I hadn’t heard about Medicare at 60. I’ve heard of Medicare for all, there have been discussing that.

Roger: It’s been floated around recently. And generally, I don’t look at forecasts of what… I mean, I’ll pay attention to what might be on the horizon. But until things get past, I don’t factor in because then that just sends you down lots of rabbit holes.

Steve: For sure. Yeah, a big question a lot of our users have is well, the last round of tax cuts stick or go away. And now we have a new administration sounds like taxes are going to go up. So we’ll see. We go off of whatever is written down in the tax code when we’re doing our tax forecasting in our engine.

Roger: Yeah, yeah. And you can’t do anything else. Really. I mean, if you give people… When you start to mess with the assumptions and try to make predictive, even with investment returns, is another great example. Just use the data. I mean, when you start to influence “Oh, well, because the yield curve is here. And the fees are here, the forecasted returns are going to be this.” You go down a rabbit hole predicting the future, which gets your eye off the ball of just making lots of little decisions. Because if returns are bad, or if taxes go up, if you’re iterating, and having the right little conversations, you’re going to be making all these little adjustments along the way that you didn’t have to worry about trying to forecast it.

Steve: Yeah, makes sense. All right. So just before we wrap up here, Roger I would love to kind of hear what’s next for you any big changes on the personal or business front that you foresee over the next four or five years?

Roger: Personal front, and I’ve been through this transition of, I have no plans to retire. I think of retirement as marching up this hill to finally get to the summit and enjoy yourself. My wife and I are empty nesters. So, I’m working more than I ever have, but I have total time freedom. And I’m trying to enjoy my life now and I’m trying not to wait. And the focus is really on the club to continue to build out that ecosystem. Because I think it serves a purpose. It serves a place where there really isn’t anything like it. And it’s a hopefully a good way to do a lot of good in the world.

Steve: Yeah, I’d agree with you. Do you have any predictions? So you shared one number 10,000 goal. Now we’re going to ask you when you think it might be possible by? or you don’t have to answer it if you don’t want to.

Roger: I have no idea. Goal setting is a weird thing for me. Because I try to focus on doing the right things just and not being forced to try to hit numbers, but I understand the logic of it. So no, I have no idea.

Steve: Yeah, well, hopefully it happens sooner than you think. And one thing I like to ask people is what resources have you found useful in your own life as you are in your work in the space that you think our audience might find helpful.

Roger: In the retirement space, I would read the book by Bronnie Ware. She was a hospice nurse in Australia, I can’t remember the name of the book. But essentially, she was a hospice nurse, and she listened. And the book is about the five regrets that people have at the end of life. So when we think of goal setting, sometimes it’s hard to pick numbers and put these things up there, what my number is to retire, or how much I need to have in the bank before I’m ready to leave work.

Roger: I personally like to plan by looking at the people that are ahead of me, these people at end of life and look at their perspective of what they regret in life. And one of them, a good example is, I wish I would have lived a life more true to myself. I focus on trying to minimize my having those kinds of regrets. So that would be I think, a great resource because I think it gives a really important perspective, especially at this period of life when you’re ready to rock retirement.

Steve: Yep, that makes sense. I will point to those. But when I talked to JD Roth, who was our first podcast guest he brought up Bronnie Ware, we talked about this. And we’ve also talked about the regret minimization framework, which is think about your decision and envision you made this decision. And then you’re five years in the future, 10 years in the future or envision the two different paths, you might make a big decision and then think about which one would lead to lower regret.

Roger: I just finished a book by Donald Miller. And he had a good framework that’s even tighter than that. But the exact same concept of every morning journal, “If I had this day to do over again, what would I do differently?” And you do it in the morning of the day.

Steve: All right, good. Well, listen, we’ll wrap it up. So Roger, thanks for being on our show. Davorin Robison, thanks for being our sound engineer. Thanks for listening folks out there. And if you made it this far, I definitely encourage you to check out Roger’s work at Rock retirement club. Join our private Facebook group or follow us on Twitter @Newretirement. And also you can check out our tools at Newretirement.com. Finally, any reviews are welcome. We are reading them, even their critical ones that say that I say you know way too much, which I’m well aware of, need to work on. But we’re working on it. So thanks again. Have a great day.

NewRetirement Planner

Do it yourself retirement planning: easy, comprehensive, reliable

NewRetirement Planner

Take financial wellness into your own hands and do it yourself retirement planning: easy, comprehensive, reliable.

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