Your Paycheck is Gone—Now What? Avoiding Retirement Surprises

3.7.25: Audio automatically transcribed by Sonix

3.7.25: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Speaker1:
Any examples used are for illustrative purposes only, and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment, and is not a solicitation or recommendation of any investment strategy.

Speaker2:
Welcome to Money Matters with Mike, with your host, Mike Zeno. Mike works hard each day to educate Americans like you on how to reach the financial freedom they've worked so hard for. And he can help you too. So now let's start the show. Here's Mike Zeno.

Speaker3:
What's up people? Happy Saturday. Welcome to the show where we dive into the strategies, insights, and tools you need in order to secure a confident and stress free financial future. I'm Mike Zeno, and my mission is to help you protect your nest egg, outsmart retirement risks, and live the life that you've worked so hard to achieve, whether you're nearing retirement or already enjoying it. We're here to help guide you every step of the way. And boy, do we have a ton of great information for you today. On today's show, we are going to discuss how to improve your retirement plan. Some pretty important things right there. And as always, I have the distinct honor and privilege of being joined by the one and only my co-host and producer extraordinaire, Mr. Matt McClure. Matt, how are you today, sir?

Speaker1:
I'm doing great, Mike. I am looking forward to all the great stuff we've got to talk about today and join any kind of from the road here this week as I am. I've been traveling and am currently coming to you from New York City. So yeah, it's, uh, it's exciting, exciting times here in.

Speaker4:
New York City.

Speaker1:
That's right. Get a rope. Um, I used to love those commercials, but. Yeah. So, uh, how are how are things your way? You've been. You've been, I know, really, really busy because you work a lot in the federal space, and, boy, there's a lot going on there, huh?

Speaker4:
Yeah.

Speaker3:
I've been busier than a one armed wallpaper hanger. Um, which you can imagine would be pretty busy, right? With all the government, uh, you know, consolidation and layoffs. You know, I've been helping and serving those heroes that work for each and every government department and agency. So, yes, I have been very, very busy over the past several weeks.

Speaker1:
Yeah. It's, uh. No, no rest for the weary as far as as that is concerned. And it's easy to be weary when you've got all that going on, but, uh, yeah, busy, busy times and a busy show to come up here. Of course, I wanted to just say thank you to all of our listeners as we start off here, because without you, we don't have a show. So whether you're listening on the radio throughout the Carolinas or if you're listening via the podcast, wherever you might be around the world, whether like me, you're in, you know, New York City or whether you're in Guam or, or, you know, somewhere in, in Asia or, you know, wherever you might be, you could be at the South Pole and listen to us, for crying out loud on the podcast. We thank you for that. Just go to Money Matters with mike.com, Money Matters with Mike comm, and you'll see all the previous episodes there. And of course, anywhere you get podcasts you can subscribe. Leave us a great review and a nice rating there. We'd really appreciate that. You can find us on YouTube as well. Just search for Money Matters with Mike there, subscribe to the channel and watch weekly highlights and more special content. And of course Facebook. Also just search. Money matters with Mike there as well. And don't hesitate to contact Mike Zeno with your questions because he wants to help you. And a couple of easy ways to get in touch with him. You can just go to the website. It's Money Matters with mike.com. That's Money Matters with mike.com. Or you can give them a call at 70456015737045601573. I mean, coming up with plans for listeners, Mike, and for clients all over the Carolinas and beyond, really, that's what you do each and every day.

Speaker3:
That is what I do each and every single day. I love meeting with folks and discussing what your goals are. What's your vision for retirement? How can I help you with the retirement planning, with risk management, estate planning, and a whole lot more? All you got to do is give us a call (704) 560-1573 or like Matt said, just go to Money Matters with Mike comm.

Speaker1:
Yeah. Easy, easy easy stuff. All right, so coming up on the show today, we've got four things that go away when you retire. Um, it might be a little surprised that a couple of these and, you know, a couple of them are a little bit more, I guess, things that you would think of. But we'll show you how to kind of respond to those things and, or to plan ahead so that when those things do go away, it's not going to break the bank for you. Also, why you should not try to time the market. Boy, a lot of people have probably been doing that here lately with kind of all the upheaval, economically speaking, that's rattled the markets. We're going to tell you why that's not a good idea. And of course, how much are you paying in fees. We'll get to that also in just a little bit. First, though, before all of that, let's go into our quote of the week.

Speaker5:
And now for some financial wisdom. It's time for the quote of the week.

Speaker1:
And this time around, the quote comes from the one and only Charlie Munger, who was, of course, the longtime partner of Warren Buffett at Berkshire Hathaway, long time sort of, you know, Co-collaborator and co-head of things there at Berkshire Hathaway. And Charlie Munger said this knowing what you don't know is more useful than being brilliant. I love that. There's a lot that I don't know. So, hey, as long as you're aware that you don't know the things that you don't know, I guess you're in pretty good shape, right?

Speaker4:
You know, that is absolutely correct.

Speaker3:
You know, may he rest in peace, Charlie. Right. So his quote is a powerful reminder that success, whether that is in investing in business or just in life in general, often comes not from being the smartest person in the room, but from recognizing the limits of your own knowledge and then making informed decisions based on that awareness.

Speaker2:
Hungry for something to chew on? Here's some meat on the bone.

Speaker3:
And when it comes to retirement planning this principle, folks, it's crucial. Many people assume that they can navigate their financial future on their own when in reality, retirement income planning involves extremely complex factors things like market risks, tax strategies, inflation, healthcare costs. And let's not forget, longevity risks, right? It's not about being a financial genius. It's more about recognizing what you don't know and then seeking the right guidance to enable you to avoid making costly mistakes. And here is how you know Charlie's wisdom applies when it comes to preparing for retirement. So the first thing I'm going to say is seek expertise. There are people who do know the things that you don't know. And by working with a professional who understands those nuances of retirement planning and can help structure things like income streams, manage risk management, and also help you maximize your tax efficiency. As far as different strategies, it's just going to set you up for a better retirement. Um, folks need to avoid overconfidence. Thinking that you know enough to handle everything alone can lead you to make really poor decisions, such as maybe you withdrawing too much too soon, you ignore tax implications, or maybe you fail to plan for what happens when the market has some volatility and turns downwards.

Speaker3:
Right? You have to be able to plan for the unknown. A successful retirement plan accounts for what you cannot predict, such as unexpected health care costs or, you know, economic shifts driven by geopolitical concerns. Do we have any of that going on right now, folks? Okay. Having a margin of safety in your strategy ensures that you don't outlive your money. It's imperative that you have more month than money and not the other way around. And then you want to have a lifelong learning mentality. The best retirees are able to stay informed. They ask a lot of questions, and they adjust their plans as needed, rather than assuming a set it and forget it approach that you think is going to work forever. Ultimately, having a humble approach to retirement planning and acknowledging the fact that you don't know what you don't know, and then seek the right guidance. That can be far more valuable than trying to outsmart the system. Matt.

Speaker1:
That's absolutely right. You know, I think that, uh, I forget who who said this. Maybe it's just an old saying that a lot of people have said in the past, but, you know, there are the, the knowns, the the unknown unknowns and the known unknowns, right? It's like you there are the things that you don't exactly, you know, maybe know when they'll happen, but you kind of know they're coming at some point. You you know what you don't know in that particular case. And then there are things that you just don't know. There are those unexpected things in life, and you sort of have to prepare for all of them as much as you possibly can. And I feel like, you know, especially when it comes to finances, working with a financial professional like yourself can really help folks get in a space where they are, you know, working toward success no matter what. Any of those things like you mentioned, like the geopolitical events and things going on and the happenings that are the things that we cannot control. Control the things you can, right? And really make sure you're prepared for whatever comes.

Speaker4:
Yeah, I think.

Speaker3:
People should concentrate on their strengths and then seek people who cater to their weaknesses. Yeah. Right. I mean, that's that's how I have been successful in life. Like, I am fully capable of admitting I don't know everything about everything. And if there's something that I want to learn about or that I need help with, I'm going to the people who know a heck of a lot more than me. I mean, and that's that you. That revelation happened probably in my 30s, because in my 20s I thought I knew everything. Um, I think a lot of people are kind of shaking their head and relating to that. But, you know, somewhere along in my 30s, I recognized the fact that, you know what, it is going to be much easier path if I seek people who are much smarter than me in the areas that I want to get better at.

Speaker1:
Yeah. That's absolutely. You got to fill those gaps that you have in your sort of, you know, knowledge base, right? So, uh, realizing that you don't know everything. Boy, that's a great step toward success in life and a lot of different areas, and especially in your finances. Now, of course, you've got to, as we say, be prepared for whatever comes. And there are things that are going to come in retirement that are going to actually be, I guess the better way to put it is things that go in retirement, things that disappear after you retire. And the question here is, are you prepared to lose them all? This comes from an article that Yahoo Finance put out, Mike. And you know, there's there's sort of this, this big idea here of really, you know, finally having full control of your time. Boy, how appealing that is for a lot of people when they arrive in retirement. Um, for many, it feels like kind of that finish line to this long race you've been running. But, I mean, you're going to gain freedom, but you may lose more than you think, right?

Speaker4:
Absolutely.

Speaker3:
I mean, without a plan or a big enough nest egg that can leave you feeling unprepared for what comes next. And so we're going to talk about five different things that tend to disappear in retirement. And then what you can do now to make sure that they don't take you by surprise.

Speaker1:
Yeah. And the first one here that we're going to talk about is the financial safety of your regular paycheck. You know that you go to work and get paid every week or every other week, maybe once a month. That kind of a thing. It goes direct deposit right into your checking account. And like clockwork, there it is. That stability will go away.

Speaker3:
Yeah, absolutely. And I think that is the most immediate and undeniable change in retirement. It's just the disappearance of that steady paycheck. Because just like you said, for decades, your income has arrived like clockwork. And in its place now you have to manage withdrawals from your retirement accounts and then Social Security and then hopefully some other income sources that you have set up along the way, and that may not happen as regularly as your income came from your W-2 or your 1099, um, jobs. Right? So diversifying your income streams with things like annuities, with things like rental income, or with part time work that can also ease your financial stress, as well as just think about maybe delaying Social Security, whether it's until your full retirement age or until your maximum retirement age. By doing that, it can increase your benefits significantly as well.

Speaker1:
Yeah, and like you say, it could be great for some people. It couldn't be all that great for others in their particular situation. It all depends on your particular situation. You know, marital status has a lot to do with that decision. Um, things like, you know, your health and your, your potential longevity, your, your sort of life expectancy, all of that really comes together to paint that picture. And you need to get somebody like Mike Zeno to analyze that picture and see if it fits for you. Just go to Money Matters with Mike comm. That's Money Matters with Mike comm and schedule that initial consultation. It's complimentary. That's free of any cost and any obligation there. Another thing that goes away when you retire, Mike, is your risk tolerance. I mean, really, you know, you can put up with a lot throughout your working years. I feel like as far as the risk that you're willing to take financially, but then you get to retirement and you really can't afford it anymore.

Speaker4:
Yeah.

Speaker3:
When you're working, taking risks with your investment doesn't feel quite as scary because if the stock market dips, you know that you're going to keep contributing to your employer plan. Plus, you have time to recover. But retirement? Guess what, folks? That changes the stakes. And so market downturns can significantly impact your portfolio, as well as how much you can safely withdraw each and every single year. And what this is known as sequence of returns risk. And a lot of folks don't talk about this specific risk, but is extremely important for everybody to understand what it is. So by taking early withdrawals, especially during a market downturn, that can devastate a portfolio much faster than anticipated, which will leave you less capital to recover once the markets do actually rebound. And so having a balanced strategy and a solid income plan can help this risk from impacting your life style in retirement. And so, you know, I'm going to come back to that sequence of returns risk real quick, Matt. Imagine somebody who retired in 2007 when the market was at its, you know, all time high. And then 2008 happened. And for those of you who can't remember back that far, that was only, what, 17 years ago, the market lost about half. Okay. And I know a lot of folks who were are completely just devastated. They ended up having to work another decade just to recover from that loss. Because why? 2008 the market lost. 2009 the market lost. 2010 the market lost before it started rebounding. And then compare that to somebody who retired in 2010, just as it started rebounding and then saw the longest, you know, bull run in the history of the stock market. So you're talking about two people who retired three years apart, one who was devastated, the other who will have more money than they know what you know, they can actually spend. So sequence of returns risk is a real thing folks. And like I've always said and Matt's agreed with our crystal balls are broken. We can't predict when that's going to happen. So you'd best be prepared for.

Speaker4:
It.

Speaker1:
Right? You've got again, as we say, you've got to be prepared no matter what happens, because of that very thing, that crystal ball being broken, the inability to see the future and exactly what is going to happen. I mean, even you think even think back to say as recently as 2019, who could have predicted that Covid was coming and that it would upend society as it did, including people's finances, the way that people earn money and all of that, you know, thing that it just it just wreaked havoc on all aspects of life. So be prepared no matter what happens in preparing for those risks in life, especially something like that. Sequence of returns risk. Super, super important there. Another thing that we're going to talk about here that goes away when you retire. And this one I feel like is can be a shock when you get there. If you're if you haven't planned ahead for it and that's your employer sponsored benefits.

Speaker3:
100%, unless you are a federal or state or, you know, municipality employee that will extend your benefits into retirement. Losing a paycheck is one thing, but losing things like your health insurance, that can be even a bigger shock to your system. So think about this, folks. If you retire before you reach age 65, you're pretty much on your own with health care until you're eligible to receive Medicare, which starts at age 65 unless you're disabled. And even then, coverage gaps can lead to unexpected expenses because Medicare does not cover everything. Things like dental, things like vision, hearing aids, and especially long term care are largely out of pocket expenses. And guess what? They add up really, really quickly. So planning ahead is absolutely essential. Some retirees opt for what is called a Medicare Advantage plan to help cover the gap in coverage. And then others set aside funds through HSAs, which are health savings accounts. So it's just really, really important to plan for the health care component, especially if you are going to retire before you're eligible for Medicare?

Speaker1:
Yeah. Absolutely. Right. Gotta have that plan in place to fill that gap of time. And then of course, this one I feel like Mike is is one that sort of gets overlooked as well. But I know that this was true, um, in a way, at least for my dad. I mean, he retired and he said that, um, you know, he sat around the house for a couple of weeks, and then he was like, okay, gotta do something. I gotta, gotta have a purpose. I gotta be able to, you know, get out of get out of bed in the morning and look forward to doing something and keeping myself occupied. And so that's one of those things. Your sense of purpose can disappear in retirement.

Speaker3:
Yeah. You literally took the words out of my mouth when saying it's often overlooked, right? Work isn't just about earning money because it provides things like routines, social interaction, and a sense of accomplishment. And there was this study in the National Library of Medicine that linked a lack of purpose in retirement to increased health risks, right? Things like depression, cognitive decline, and even verbal memory function. And so the best way to avoid this emotional downturn is to plan beyond just your finances. I always tell people that I meet with, do not retire until you have a plan for how you are going to spend your time, okay? Because it's more than just money, whether that's volunteering, whether it's pursuing passion projects, or maybe even just like I said, working a part time job that can help fill the void and give you a sense of purpose, give you things that keep you mentally and physically engaged. And also, Matt, would, you know, especially in the in the instance of a part time job, would put a little extra jingle in your pocket.

Speaker1:
So and that's that can't be a bad thing either. I mean, as long as you are working because you want to and not because you have to. That's the situation we want to avoid is working because you have to. But if you want to, if it's something that you love or if it's, you know, you just love getting out and meeting people and, and, you know, keeping yourself active, things like that. And it puts a little extra money in your pocket, like you say. That's a good thing. So, you know, folks, if these things have maybe opened your eyes about the things that disappear in your retirement years and you would like to, you know, maybe reach out and get that initial consultation, it's absolutely free of any cost and any obligation. Get that underway. You can do that and start working with Mike Zeno today. And Mike, if people do reach out via Money Matters with Mike comm, or if they call the number (704) 560-1573. What do you do when you sort of take a look at their portfolio, their assets and their plan if if they have one already? Sure.

Speaker3:
I mean, the first thing we're going to do is have a discovery call, 15 minute call or so where, you know, I'm going to ask you some questions and find out a little bit about you. I'll tell you a little bit about me and my philosophy for helping people over the past couple of decades. And basically, we're going to find out what your vision is. We're going to discuss your goals, figure out what you want to be doing in retirement, who you're doing it with, and how you're going to finance all of those visions that you have. If you have a current plan, we're going to take a look at that and take a deep dive into your portfolio, figure out where your assets are, and then if there are any tweaks that need to be made, we'll walk you through what our recommended plan might be. And the biggest thing, Matt, is that we're going to take time and answer as many questions as our listeners have about their specific retirement, because we do not use a cooker. Cutty cooker. The first day with my new tongue folks, a cookie cutter approach. Each one of our sessions is tailor made to each and every single one of our clients individual circumstances, because there are no two that are the same, right?

Speaker1:
Absolutely. Everyone is is an individual, right? There's no cookie cutter, as you say. Easy for me to say. No cookie cutter situation there. And, you know, a lot of people I know these days especially, I have questions about Social Security. There are, you know, there's some uncertainty there. What does, you know, the upheaval in Washington have to do with Social Security? How is it going to be affected? Of course, there's a lot there that may or may not be known right now. But, you know, what do people worry about and ask you about right now with Social Security?

Speaker3:
Yeah. The biggest thing is, you know, when should I take my Social Security? And then if I suggest that they wait, they're like, why would I wait? And then I have to just run the math for them and show them where their break even is. And then, you know, a lot of people say, well, what's going to happen to my benefits once you know, my husband or my wife or, you know, passes away, and what am I going to be left with? And and then right now, especially because of all the news that's going on, is can I count on Social Security to be there when I need it throughout my 30 plus year retirement? So we address every single one of those questions in our consultations and help you get the answers that you need.

Speaker1:
Yeah. And to set that up, you just go to Money Matters with mike.com. That's Money Matters with mike.com. You can also call Mike (704) 560-1573. 704560 1573. Well just a few minutes left here in the show. Mike, this is something though, that's super important that I want to make sure that we get to because it is, I think, essential for people to hear right now. And that is stop trying to time the market. You know, you've got to be invested for the long term. Right. And so actually, you know, investing now could be the best option for long term returns. Talk about why it's so important to not try and time the market. You know I guess it all starts with the fact, Mike, that as we said earlier, the crystal ball it is broken.

Speaker6:
Yeah. I mean so people.

Speaker3:
Have different strategies, right. But if you look at the two decade period, basically from 2001 through 2020, that's 20 years. There's actually a chart that we can show you about how just a $2,000 annual investment would have performed under different scenario. Right. And when you invest $2,000 a year for retirement, it's not as important to time the market. Um, or when you do it, it's just doing it. Okay. So a lot of people would take that $2,000 and they would invest it in cash, and they would have about a little over $44,000 over the course of those 20 years, if they had perfect timing. In other words, they timed all the ups and all the downs. They're going to have a little over $151,000 after those 20 years. But if they had bad timing, all right, that number drops by almost 20% down to $121,000. So, you know, that is why if you just do, uh, like invest immediately, like as soon as you have the money, invested, that person would have $135,471. So it's just really, really, really important to just get the money in there and invest, not try to time the market and definitely don't stay in cash.

Speaker1:
Yeah, it's not doing anybody any good under the mattress, you know, and or even in a savings account even in those, you know, supposedly high yield savings accounts where you're going to. Yeah, you might earn more interest than you would in, say, a regular savings account, but it's still you're not going to keep up with inflation. Chances are and or, you know, anywhere close to it, right?

Speaker3:
Not even close. Not even close. So, you know, it's important that you get your money working for you as hard as you did for it. And so we definitely invite you to give us a call and see how we can analyze what you've got, show you how you can save money, possibly in fees from where you currently are, and then make sure that we are reducing the risks that you're taking the closer you get to and in retirement, as well as optimize the overall performance of your portfolio. And folks, again, all you have to do is pick up a phone 704 5601573. You can call me. You can also text me at that number. Okay. Or visit us on the web at Money Matters with mike.com.

Speaker1:
Easy breezy ways to get in touch with Mister Mike Zeno there and get your initial consultation. Once again, it is free of any cost and any obligation. Of course, one of the big things that we have had on the docket today that we won't have time to get to because time has just flown by, is how much you're paying in fees, right? A lot of people don't know how much they're paying in fees. I would encourage you folks to get out there. Give Mike Zeno a call, go to the website, schedule that consultation. You can find out how much you're paying in fees, because there's probably a lot happening under the hood that you are not aware of as far as the fees go. All right, Mike, well, that's going to do it for this time around in this edition of the show. But thank you. Of course, as always, for all of the wisdom that you bring to the table each and every week. And we'll do it again next time, sir.

Speaker3:
Absolutely. And folks, I'm going to leave you with these four things to do if you are planning to retire in the next few years. The number one thing is to meet with a financial professional. The number two thing is to make adjustments to your portfolio as necessary. The number three thing is to know your plan for Social Security and check your income gaps. Right. I said four, I only meant three. So those are the big three that I'm going to leave you with. Whatever you're doing this weekend. I hope you enjoy it to its fullest extent and as always, make it a great day.

Speaker2:
Thanks for listening to Money Matters with Mike. You deserve to work with a licensed financial and insurance professional who can offer strategies for protecting and growing your hard earned money. To schedule your free, no obligation consultation, visit Money Matters with mike.com or pick up the phone and call 704560 1573. That's (704) 560-1573. Not affiliated with the United States government. Mike Zeno does not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or a specific result. All copyrights and trademarks are the property of their respective owners. Amara Life assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness, timeliness, or the results obtained from the use of this information.

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