0:00:00 - Speaker 1
Discussions in this show should not be construed as specific recommendations or investment advice. Always consult with your investment professional before making important investment decisions. Security is offered through registered representatives of Cambridge Investment Research Inc. A broker-dealer member, finra SIPC advisory services through Cambridge Investment Research Advisors Inc, a registered investment advisor. Cambridge and Greenway Wealth Advisory are not affiliated. It's time to dive into some insider secrets of investing and retirement planning. To make your retirement as smart and as elegant as possible, this is Money Chic with Sherry Rash.

0:00:31 - Speaker 2
Hey everybody, welcome into another edition of the podcast. It's Money Chic, women and Retirement, with Sherry Rash from Greenway Wealth Advisory and myself hanging out talking investing, finance, retirement, and we're going to talk about a pyramid. This go around and kind of using that as the structure to think about, you know for a visual aid, the different layers or levels to retirement planning, if you will, and you think about the different kind of tiers on a pyramid, and that's going to be the topic of our conversation. And it's also about a week before Halloween that we're dropping this. So how are you doing, sherry, and are you a Halloween kind of gal?

0:01:07 - Speaker 3
I love Halloween. I love everything Halloween trick-or-treating, pumpkins, all of it.

0:01:14 - Speaker 2
Nice, it's awesome, my favorite time of year. Do you guys do the? Do you guys ever do like the family costumes, since you have the little ones? Yeah, like a theme. Yes, do you guys have a theme?

0:01:23 - Speaker 3
We did. We've done superheroes Nice, We've done Wizard of Oz. I was the bad witch, I forget her name. But and then my youngest daughter is.

0:01:34 - Speaker 1
Glenda the Good Witch.

0:01:35 - Speaker 3
Yeah, wicked Witch. Yes, we love. We love a theme in our household.

0:01:42 - Speaker 2
I got you so your daughter. She was Glenda the Good Witch then.

0:01:45 - Speaker 3
Is that what you said?

0:01:46 - Speaker 1
Nice.

0:01:47 - Speaker 2
Yeah, maybe I might be showing a little bit too much of my Wizard of Oz knowledge there. I don't know. It's one of those ones that like you know. Just, you've seen like a million times, right, you know growing up and and the various different things. So all right, so now here comes the really important question to this podcast Sherry, what is the worst Halloween candy of all time?

0:02:06 - Speaker 3
The worst. Which one did you?

0:02:08 - Speaker 2
like when you got candy as a kid, or even now with your kids like which one did you get? You're like oh man, I didn't want that.

0:02:16 - Speaker 3
You know I have such a sweet tooth that there there is no bad candy. Well, actually, okay, I take that back. Okay, the, the sweet tarts, or the there's ones in the roll, all the they're just sugar powder. Oh, yeah, yeah yeah. Smarties, smarties. You don't like smarties? Those are the worst. Oh, wow, I hate those. That hurts my heart a little bit, but really.

0:02:42 - Speaker 2
You know, most people say candy corn. Right, they're like candy corn.

0:02:44 - Speaker 3
I love candy corn.

0:02:45 - Speaker 1
I love candy corn. Why?

0:02:47 - Speaker 2
does it get such a bad rap? I don't get it, you know. It just gets such a bad rap. I don't. I don't understand. I was going to say, and maybe you can help me figure out what it is, what is? I think it's made of the same stuff that the marshmallow peeps are made from, but I don't think it's marshmallow. Those you remember. Like these orange, give it a Halloween. It looks like a peanut, like it's shaped like a peanut, like it's imprint, but it's orange and it's it's the colored orange and it's just gross and I cannot think of what in the world that thing is.

0:03:13 - Speaker 3
but they used to give this. They used to give those to us in the 80s Circus, not peanuts. Yeah, that's it. Yes, that's it.

0:03:19 - Speaker 2
But they're totally like mushy. Yeah, the circus peanuts, that's it. But they're totally like these gross little. I don't know what they're made of. I don't even think it's marshmallow.

0:03:27 - Speaker 3
Who knows what it is? Yeah, but all I know you have to find the house that gives away the king size candy bars and go there hit them up first.

0:03:34 - Speaker 2
Oh, yeah, yeah, yeah. Find the hot dog house and you know, go there, hot dog house you have dinner, oh yeah. Now, what is this? This is this is foreign to me Hot dog house.

0:03:45 - Speaker 3
Just the house that gives away the hot dogs.

0:03:48 - Speaker 2
I never encountered that my whole life.

0:03:50 - Speaker 3
Oh my gosh, it's the best. It's the best because you know you're going to, you're going to get dinner, I feel gypped.

0:03:56 - Speaker 2
All right, folks let us know, Like shoot us in the message here. Let us know Did you get hot dogs at Halloween? Because I'm, I'm feeling gypped here. I didn't get. I never went to a house that gave away hot dogs.

0:04:06 - Speaker 3
Man Growing up, there was a house that gave away hot dogs and then their neighbors did chips and the other neighbor did a drink. It was awesome, that is fantastic man.

0:04:15 - Speaker 2
The neighborhood you grew up in was rocking we walked far for it.

0:04:20 - Speaker 3
Oh, okay, well, okay, we walked. That was a haul, but it was worth it.

0:04:24 - Speaker 2
Definitely worth it, man. I'll tell you what. Well, there you go, folks. That's our whole episode this week. We're done. We're just going to talk about Halloween candy. No, but you know, it's that time of the year. You know, people either love or hate Halloween. We used to do a lot with it. We live in the boonies now so nobody ever comes by, so we don't do anything with the candy anymore. My first year, the first year I here at the new place, the wife was like hey, let me, I'm going to get some candy just in case kids show up. And I'm like you know what's going to happen. They're not going to show up when we're going to eat this candy, so don't buy it.

But anyway, I guess we should transition and segue you here into our financial conversation. But let's talk about this pyramid not necessarily the most evocative of Halloween icons, but we'll talk about a pyramid and it's the candy corn.

0:05:04 - Speaker 3
Thank you.

0:05:06 - Speaker 2
Oh, that's great. Look at this, she's saving the day. She's saving the day candy, all right. So there you go. Think about it like candy corn At the bottom of a solid pyramid. Candy corn is going to be that base level. So let's I guess let's just start it there, sherry, and think about it in this visual aid, if you will. What's the bottom base of your retirement structure when you're putting things together, or do you feel? Is it something that's? Is that just our income, or what is that?

0:05:32 - Speaker 3
So the base of the pyramid is what you can expect to come to you each year. So when you wake up January 1, you know you're having X amount of dollars come from specific places and for everyone it's social security. So that is the base, that's the foundation of your retirement income pyramid income streams.

0:05:55 - Speaker 2
Gotcha Okay, so that's the one we can count on. Well, as of now, we can count on it.

0:06:01 - Speaker 3
As of now, with an asterisk aside from it. But, social security. We can count on it. And then, as you move up the pyramid, it's again streams that most people have, or it's predictable whether that's, and not every layer of the pyramid applies to everyone. But annuities, something again something guaranteed predictable pensions, if applicable, if you're lucky enough to work for a company that provides a pension. Those are the things that fill up the bottom of the pyramid that you know that's coming to. You know if sands are bots, Okay.

0:06:38 - Speaker 2
So let's think about this. Then let's say we've got I don't know six layers or so, right, and so the bottom three, that initial base of the pyramids of Giza, whatever. It's the kind of color codom, if you want to kind of greenish, right? So we've got that stable, that's our income streams basically down there towards the bottom, and that's going to give us that structure to then build upon with some of the other things. So what would be next Is that where we kind of are going to now layer in the investments and the things that we've created? Is that going to be the IRAs and the 401ks and all that kind of stuff?

0:07:13 - Speaker 3
Exactly so. Next, you're moving up from those guaranteed streams to now your responsibility to pay yourself. So that's where we're going to look at your IRAs, your 401ks, your Roth IRAs. Anything that you've saved for retirement essentially layers on top of the guaranteed income stream social security, pensions, annuities, if applicable.

0:07:38 - Speaker 2
Now this if you want to visualize this this layer could be much thicker and bigger as time goes along, because the onus is more on ourselves now than ever before, sherry, to self fund our retirement. So you've got to create a good chunk of your income streams that you're going to need coming in because you may not have a pension right. So to your point. So you're going to have social security, but a lot of it's going to fall on you, and so how you layer these and also the big question becomes is when do we take them and how do we turn them on, and the right times to pull a paycheck from these things.

0:08:15 - Speaker 3
Right, and I would even argue. Each year your pyramid could look different. So something else that could be the very top of the pyramid for many people is part timing. Come that probably represents a small portion of your income each year in retirement, but it's still something.

So part-time income could be at the very top, you know, or some years you may have a lot of part-time income when you, if you're consulting, if you're transitioning, semi-retiring, so every year your pyramid could actually look very different. I encourage my clients to weigh as long as possible to take Social Security, but they may already be retired, so for the first four years of their retirement Social Security may not be at the bottom at all. So it's you're always solving for the very tippy top of the pyramid, above which is your income, and then solving for your desired income. You're then filling in the gaps with all of these other layers to get you to that desired income amount.

0:09:21 - Speaker 2
Okay, so you know, at the bottom we have Social Security. Let's just kind of round this around and just say Social Security, pensions, annuities, the things that we mentioned. How often do people walk in with the base and the first time you're sitting down with somebody walk in with the base level kind of in place and you might say, well, we get Social Security, so it's already in place, but more so than that. Like, yes, we understand it's coming to us, but do we have any plan for how to do it right, how to turn it on? When's the? I'll use my in-laws, for example. They're both 166, 167, neither one has activated it. You know Social Security yet and they're thinking about it, but they're trying to decide who should turn it on first and things of that nature. I guess that's my point. How often do people come in thinking about it that way? Or do they just say, well, yep, I got Social Security, now what?

0:10:05 - Speaker 3
Very rarely does anyone come in and say here is my plan to take Social Security. Or they may say, well, I can take it, so I'm going to. But after understanding the way the program works and the benefits to waiting, oftentimes their initial thought when they enter the office is different when they leave the office. So it's kind of well, I know I have Social Security, I know I have a pension. And then that's another part of the strategy is diving deeper into the pension, because there are different payoff options, spousal period, certain. So the clients usually just enter knowing they have all of these elements and then it's up to our conversation to then create a strategy around it. And how much of the pyramid is it going to represent at certain points in time?

0:10:57 - Speaker 2
Well, a lot of times we talk on the show, we try to bring things from an angle for everybody, but also it's obviously the show is called Women in Retirement, and Social Security is one of those pieces that can be. You know there's a lot of it's not just turning it on as soon as you can. There's definitely worth having a conversation about the best strategy for doing so. Whether you're single, married, were married, divorced, widowed, whatever, there's a varied amount of strategies that you could employ. So it's certainly worth it to have a conversation with somebody, because a lot of the stuff most people just don't realize.

0:11:27 - Speaker 3
Absolutely. Social Security is definitely a if this, then that conversation Okay.

If you are planning on retiring prior to your full retirement age, then it probably does not make sense to turn on Social Security. If you have other investments or other income streams to live off of, If you plan on working, it may not make sense to turn on Social Security right away, because then your tax consequences could be different. So there's a lot to consider when it comes to Social Security, and it's not just as simple as well. I'm retired. It's time for me to turn on my Social Security income.

0:12:03 - Speaker 2
Yeah Well, they owe me, so it's mine. Give it back, whatever that kind of looks like. All right. So for moving up the list, we've kind of gone through the basics of this. You kind of touched on the top one there, If you like. You said I guess it could change a little bit. So maybe that top one is not part-time work and maybe it's something like okay, at the top of the pyramid is going to be what you want to do with whatever's left, right, Maybe inheritance or legacy or something like that. So everybody's going to be a bit different there.

0:12:32 - Speaker 3
Exactly, yeah, some clients, it's very important to know that they are leaving X amount of dollars to their children and grandchildren, and that's great and that that becomes part of the plan.

0:12:44 - Speaker 2
But it's the I think that needs to be the top of it, or the very top, or even the peak, if you want, because at the end of the day in this, to me it seems like the most healthy way of looking at it. And everybody's different and you can certainly do what you want, but don't sacrifice yourself and every in your, you know your own retirement for the sake of the kids. We've been doing that our whole life. Leave whatever's left right, kind of thing. So like, once you've set yourself up and you've enjoyed the retirement you're looking for, that you've worked hard for, then turn around and leave, you know, the excess, if any, to the kids, and I think that's a healthy way of approaching it. And then of course you could ebb and tweak depending on the individual's wants or needs. But a lot of times if we're not careful, we can, you know, kind of shortchange ourselves.

0:13:26 - Speaker 3
Absolutely. I mean, you hear a bit all the time. Even with my, my grandmother. She did not want to spend money because she wanted to leave it to her children. And you know that's that's not what most children want to hear, right? They don't want to hear about their parents sacrificing.

0:13:43 - Speaker 2
So it's a lovely sentiment, but yeah, but yeah, exactly.

0:13:47 - Speaker 3
And oftentimes I'll just bring up with my clients. Well then, let's just get a life insurance policy If you want to leave money to your children instead of sacrificing or instead of worrying about about leaving money. Have the policy, pay the premiums, and then you know that you are leaving something to your children and, on top of it, it's tax free to them, which could be even better than your 401k that you're leaving.

0:14:12 - Speaker 2
Very true and we're seeing a shift in, you know, recently, in the last few years or whatever the case may be, versus, like your grandmother, for example, where I think people are starting to retire, you're starting to realize, hey, maybe I want to actually leave, you know, money for the grandkids, but I actually want to do things with them. Let me, instead of just leaving them, a check when I'm gone, so to speak. How about I create experiences and we do things together and I can see them, right? I can see them enjoy the money that I worked hard. So you're still getting to kind of give them the money, so to speak, but you're giving it to them in a way that you guys can all enjoy it together, and I think we've seen a real change in in families with that over the years.

0:14:50 - Speaker 3
Absolutely, I think I, and I think that's great and I think that's a beautiful thing, especially for families to create memories together and use the money that you know, their generations before worked hard to accumulate and enjoy it while everyone's still can.

0:15:07 - Speaker 2
Yeah, because I know my grandmother would have looked at me when I was younger and said I'm not leaving you a check, you will blow right through this.

But you know creating something together with, certainly, or doing some things together and taking, you know, family on a big trip or whatever the case is. So I know I got a little off topic there, but still it's part of the pyramid is like how do you want to structure, how do you plan on structuring things? So you got to start with the base. You got to have those income needs. You got to then move into, you know, some of those, the investments, the things that you maybe you've got, real estate, whatever the case might be. Anything else that we kind of missed on there. Sherry, Is there something that I didn't touch on that you kind of try to do in your structures?

0:15:48 - Speaker 3
No, I think what's important to understand is that you know if you were to draw a pyramid on a piece of paper, at the tippy top of it, above the triangle, you write your desired income, and that's what we're always solving for.

At the bottom of the pyramid, in the base. Those are your guaranteed sources of income, stuff you don't have to worry about each year, it's not market dependent. And then, essentially, the gap, the in between, is what we're solving for with your investments, with side income, with part time income, with anything else. We're filling in that gap there with your savings. So it's there's a lot of different pieces to the puzzle, but once you know what you're solving for and what you have coming into you from guaranteed sources, it makes the how am I going to have money in retirement conversation a lot clearer.

0:16:42 - Speaker 2
Alright. Well, you got to start someplace. You got to have that base. Whether you want to call it a pyramid or you want to kind of use a house analogy, whatever the case is, you got to have a foundation and so you know you're solving for income. That's typically the foundation for most things.

So if you've got some questions, you need some help. You want to make sure that you've got the income in place that you're going to need to maintain the lifestyle you want in retirement. That is honestly the biggest reason people turn to working with an advisor is to make sure they've got that base there. Most people don't want to go backwards in retirement. They want to enjoy the lifestyle that they currently have as they approach retirement and, you know, maybe even a bit more as they walk into it. So if you got some questions, you need some help.

Please reach out to Sherry and have a conversation with her. You can find her at GreenwayWealthAdvisorycom. That's GreenwayWealthAdvisorycom. A lot of good tools, tips and resources. There. You can take the Money Sheet quiz. You can also reach out to us and you can shoot her an email and you can subscribe to the podcast on Apple, google, spotify, iheartstitcher all those platforms. You can find all of that there at GreenwayWealthAdvisorycom, and I guess we'll wrap it up this week. Sherry, I'm going to go and be bummed out that I didn't get hot dogs. I'm going to have to pull all my friends now, seriously, and ask them did you guys get hot dogs on Halloween?

0:17:56 - Speaker 3
The hot dog house, the soda house, the king size candy bar house. You got to find out, yeah, the king size candy bar house.

0:18:02 - Speaker 2
I'm down with you there. I got that. That was definitely the norm. I think in the neighborhood we had. There was the one house that everybody knew to avoid because they always gave you the healthy treats Right when you were a kid. They were like this was the one that they were giving you like carrots and stuff, and you're like, oh man, and nobody wanted to go to that house, but I'm bummed about the hot dog thing. It's going to stick with me a while.

0:18:27 - Speaker 3
So obviously I haven't let it go yet you can come to the hot dog house.

0:18:30 - Speaker 2
Well, if I didn't live in the boonies, I would, but there's no kids out here. So, sherry, thanks for hanging out with me. I always appreciate it. I always look forward to talking with you. It's always a good time. Thanks for listening, folks. Please subscribe to us here on Money, chic, women and Retirement with Sherry Rash. We'll be back in November with an all-new episode.