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.

0:00:20 - Speaker 2
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 3
Hey everybody, welcome into the podcast. Thanks for hanging out with Sherry and I here on Money Chic, women and Retirement as we talk about, well, women in retirement. We're talking about getting closer to retirement, things to think about, questions, thoughts, comments, all that good kind of stuff. And, of course, sherry is a financial advisor and money coach at Greenway Wealth Advisory and we're going to do an email question, mail bag show, if you will, things that have come in to Sherry and the website and whatnot. You can stop by GreenwayWealthAdvisorycom if you'd like to drop an email to the show. We don't have to ask your question here. You can still get your question answered, of course, if you have those regardless, but we do put some on here from time to time on the podcast.

I think this is actually our first time doing this, so should be fun to do it. What's going on, sherry? How are you? I'm doing great. How are you Hanging in there getting? Well, we're into November. This is our, I guess, mid-november one and we'll have one more right around Thanksgiving, so I'm excited because that's my favorite holiday.

0:01:24 - Speaker 4
Any holiday that you just sit around and eat and reflect on reflect on how thankful you are for what you have is good. In my book it's a winner, yeah.

0:01:33 - Speaker 3
Well, it's got the three F's, it's got family food and football, so I'm a happy guy, so that works there. But I kind of like Thanksgiving as well, because it's less pressurey than Christmas.

0:01:44 - Speaker 4
Christmas is very pressurey, it can be, and as soon as Thanksgiving's over, I mean everything has to start the music, the trees, all of that.

0:01:54 - Speaker 3
Thanksgiving has started already. It's got to turn it on.

0:01:56 - Speaker 4
I know my daughter turned on the Christmas radio station the other day. I'm not ready yet Soon, but not yet.

0:02:03 - Speaker 3
Yeah, they were doing that even before Halloween. I'm like okay, come on, let's, can we pass an amendment or an addendum or something that says you know, no Christmas music till, at least after Halloween, please, you know. So I don't know I'm losing that argument, but we'll see it keeps happening.

0:02:20 - Speaker 4
Yeah, the stores are too much for me. They're rushing it a little bit too much. A little bit, yeah, a little bit.

0:02:25 - Speaker 3
Well, I'll tell you what. Let's get into some of these email questions, see if you can help some folks out with some of the stuff that they've sent in, and see what we've got. We've got Wanda, who has a question for you and she says sharing. My spouse and I both earn very nice incomes. We don't have any kids, we're 45, but we are thinking that we could retire early, maybe within the next 10 years, around 55. Any items to start checking off the list to make this happen?

0:02:51 - Speaker 4
This is a great question.

I don't often come across clients that are retiring that early, but there are many that want to retire, maybe in their early 60s, and there are some things that you have to be aware of if you are looking to retire younger.

The first thing would be your 401k, your 403b, those IRAs and Roth IRAs that you've been saving into. You really can't use them until you're at least older than 59 and a half. If you were to access those accounts prior to that, you're obviously paying taxes if it's a traditional IRA, traditional 401k, 403b but you could also be paying a 10% penalty on those withdrawals. So you want to make sure, yes, contributing to those retirement accounts is great and important, but you have to make sure you have after-tax savings, and a rather healthy after-tax savings, if you're looking to retire at 55. Because something I also like to point out is that it's realistic that you're going to be spending 20 plus years in retirement, and that's when you're retiring at the traditional mid-60s age. So if you're retiring even younger than that, you're going to be retired for just as long as you are working for.

So you definitely need to make sure you have a healthy savings. You need to think about insurance. That's also another factor, because you're not going to qualify for Medicare until you're in your 60s, mid-60s.

0:04:26 - Speaker 3
Yeah, that's a huge one, Sherry. I'm glad you brought that up, because I mean you're 55. You're talking 10 years before you can get to Medicare, so and it's expensive.

0:04:35 - Speaker 4
Yes, so you know also, everyone has a different definition of retirement. I'm coming to learn, especially in the age of COVID, but when we're working from home and we have more flexible schedules and everything's virtual, you know, some folks may just call retirement. While I'm no longer doing that, I'm no longer working in my career.

0:04:57 - Speaker 3
I'm no longer doing that thing. I could have a job, yeah, yeah.

0:05:01 - Speaker 4
So maybe let's qualify retiring. Let's look at that definition a little bit closer and what you're envisioning, and if it's necessarily a traditional retirement where you're on the beach drinking my ties every day for 30 years.

0:05:15 - Speaker 3
Yeah, I mean that's kudos to them for thinking they can make it happen. Clearly there's a lot of information not shared, but if they're making good incomes they're 45, assuming they're smart folks they're socking stuff away. Hopefully they've got some of this stuff built up. But there are definitely a lot of hurdles to going that early and you pointed out some really good ones, the whole 59 and a half not being have access to accounts. Definitely the medical side and that stuff can take a big chunk out of the money you may have saved. So definitely you want to have a strategy session with your advisor to look at some of these things and see, because in this case the number you might need might need to be higher than you originally anticipated or something like that.

0:05:59 - Speaker 4
So a lot of ground. We need a plan. Yeah, yeah, absolutely.

0:06:02 - Speaker 3
Because it's a lot to manage for it. But hey, if you can pull it off, kudos to you. So thank you so much, wanda, for that question. We really appreciate it. Let's see what Georgia has got for you. And she says I've heard you talking about being aware of risk in the portfolio. I'm 65. So what kind of risk should I be taking?

0:06:21 - Speaker 4
I love this question because when it Georgia's 65. So that means she's probably in or nearing retirement. And what I educate my clients on when they are in or nearing retirement is that you do not treat all of your dollars with the same risk profile. You create what I call buckets and each bucket has a different risk profile. So the money that you're going to be using within the next five years or so when you're first retired is going to have a much, much lower risk than the money you are going to be using when you're 15, 20 years into retirement. That's where you can afford to have a little bit more risk.

So it's not a short answer to the risk of your portfolio when it's not cut and dried, but when you are in or nearing retirement. That's when we need to start thinking about not treating every dollar the same where we were in the past when you were in the accumulation phase. When you transfer over to the distribution phase of your investments now you're living off of that money you need to have different risk profiles depending on in my clients cases where you're accessing the money from, or what buckets you're living off of. So the answer really is when you ask how much risk should I be taking? Each dollar is actually going to have a different risk depending on its purpose in your retirement income plan.

0:07:49 - Speaker 3
That's awesome. I really like that answer because often, you know, in Georgia you might hear something like the rule of 100, right, where you can just do a quick rule of thumb and it says like, for example, if you're 60, you know, then 40% should be at risk and 60% should be safe. In your case it would be 65% safe, 35% at risk. And that's fine for a quick rule of thumb, sherry. But I really like how you broke that down further and said well, let's look at the dollars and find out you know how each one of those should be at risk because it's different when you get to retirement. And those general rules of thumb, that's all they are. It's just a quick rule of thumb for easy math.

0:08:24 - Speaker 4
Exactly. I was actually having this conversation with a client the other day because she said I have a 60-40 portfolio.

And she's working with another advisor and she was interviewing me to work with me and I said I use that as guidance, but I could come up with 100 different 60-40 portfolios and, depending on what's in that 60, as far as the equities go because we're talking equity bond ratio depending on what's in that 60% of equities, the risk could actually be very, very different. So the rule of thumbs are good because they give us some guidance, but we don't want to hold hard and fast to those rules and really working and having a plan once again, just like Wanda we talked about earlier, but having a plan when it comes to the risk of your portfolio and assigning each dollar its own purpose.

0:09:16 - Speaker 3
Yeah, no, that's fantastic. And as I'm scanning through these emails, since you mentioned just, we're talking with someone else and they were interviewing you. Aaron has a question. It's kind of similar, so this is actually pretty apropos. She says for years, sherry, I've had half my money with one person, a broker, and half with someone else. They're both nice people. I thought it would be a good idea to get advice from two different people, you know, to kind of shake it up, make sure they're on the same page. But now it just seems confusing to me. So am I better off to have it all in one place? People sometimes think I think about this like the doctor analogy, sherry. It's like I don't know that you're going to. Yeah, you might have different kinds of doctors that are different disciplines, I suppose, but often you just go to another cardiologist to get a second opinion from the same you know, from the same industry, versus having two cardiologists. It seems like that would be very confusing and competing.

0:10:08 - Speaker 4
Absolutely, as you were saying that. I was trying to think of a doctor analogy to use with this, because it's not a bad thought Working with two different advisors or brokers so you can get opinions and, you know, diversify your opinions, that's not a bad thought, but it can definitely get confusing. And then also, what I see happen is that the client will then end up comparing one versus the other or comparing the performance, which is not good.

Yeah, yeah, true, Because you know you're not invested similarly that advisor or brokers only working with what's in front of them, and it's really hard to give holistic advice when you only have half of the information.

0:10:54 - Speaker 3
Well, obviously they're probably not talking either. So it's not like they're being cohesive. It's not like the goal and the mission for the individual is succinct across both people. They're doing their own thing individually, based on what they think. Is that really being the most effective for Aaron's total dollars?

0:11:12 - Speaker 4
Exactly, yeah, the doctor analogy I thought of, and let me know if I'm way off- on this was if you're going into surgery and you were having all your consultations with Dr Smith and then you go in for surgery and Dr Jones is the one that's actually performing it. Dr Jones is kind of blind to any of your previous consultations. They both could be very, very good doctors or surgeons, but when you're not working with only one person, they're not getting all the information and they're kind of blinded to a lot of your assets or a lot of your financial situation. If you're splitting yourself in half.

0:11:52 - Speaker 3
Yeah, no, I'm with you and I think you know that's what I was thinking about with doctors was just a second opinion, and maybe that's how it started for Aaron, right, maybe she went to go and get a second opinion from the other person, really liked a lot of the things they had to say and thought it would be a good idea to, as she put, to kind of diversify the advice. But at some point, yeah, it does become, especially as we get closer to retirement, and you really need that singular focus, in my opinion, sherry, because you're talking about social security and long-term care if needed, and a pension, if it's there, and there's best strategies for tax efficiency and if one's doing some and what you know, it just seems like that could just definitely get messy.

0:12:28 - Speaker 4
Exactly, yeah, exactly.

0:12:29 - Speaker 3
Okay, well, aaron, thanks so much for the question. Hopefully that helps maybe. Yeah, definitely have. You know, nice people at the end of the day, I think that's, you know, that's a given, hopefully. But they're also professionals, so, you know, sitting down and saying, hey, I've made a decision, this is what I need to do. You know, don't beat yourself up too much there. At the end of the day, I think that you've got to do what's best for you.

So reach out to Sherry if you'd like to. You know, add her to the mix, go for a third opinion. You kind of you kind of sort of did by shooting the email. So go ahead and follow it up and have a conversation with her as well. Let's see if we can squeeze in at least one more here, sherry, before we wrap up this week. We've got Mary and she says we never lived our entire lives, sherry, on a budget, and my husband is very resistant to having a budget once we retire. But Without one, how do we make sure we don't run out of money in 10 years? You know, that's like that's the big questions here, because people don't like the b-word, you know it's very kind of off-putting and Yet you kind of have to have a structure.

0:13:30 - Speaker 4
I mean, you don't want, hopefully, just wing it right way back when we did a podcast, an episode on money personalities right and there were some personalities that liked structure. They were savvy shoppers, I think we called them. They were, you know, clipping coupons and you know very aware of the money they're saving and then also misers that Were hated the idea of spending money or felt guilty every time they spent money right but then there's other people that are more emotional when it comes to their spending, or Yolo spenders.

You only live once and when working with clients, I have to quickly identify what their money personality is. And what's interesting is oftentimes and we've talked about this before Spouses don't necessarily have the same personality. So I'm not going to use the b-word with budget with a Emotional spender or a yolo spender, because if I see the word budget to them, they're going to shut down, they're going to feel constrained and restricted.

0:14:36 - Speaker 3
Oh yeah, sounds like the husband, right. He doesn't want to live off one, and I get that makes sense, right?

0:14:41 - Speaker 4
Right, exactly, but and then you know, a savvy shopper or someone that likes restrictions may like the word budget, but I, I try. We're so ingrained in using the word budget that it's kind of like muscle memory, but I like to use the word the, the phrase spending strategy instead, because we need to, we all, we have to spend money. That it just. It is what it is right to live in, the function. We have to spend money, so let's have a strategy around your spending. So I had this conversation with a client the other day and she does not do well with budget where her husband Does like the word budget and she was using one of those online tools where you can create line items and budgets and monthly Um restrictions and she didn't like it because as soon as something happened and it kind of blew up her budget, she felt discouraged and didn't feel good about herself.

So I said, instead, let's create a strategy, and the rule of thumb that I use for spending strategies is 50, 30, 20. 50% of your income goes to needs, so everything you need to live, so housing costs, utilities, groceries. 30% goes to lifestyle, so anything that you do. That's a little something extra, a little something special for yourself. And then the 20% of your income goes to savings, so, um, retirement, emergency fund savings, saving for vacation, what have you? And then everything falls into those three categories and I find that when you categorize your spending, versus having strict line item budgets, you tend to feel a little bit more in control and, um, if life happens and things happen, you can react a little bit better versus it blowing up your entire budget.

0:16:31 - Speaker 3
Exactly yeah, I like the strategy. I've been calling it a spending plan for a while. Uh versus the budget, because you've saved your money, you're getting closer to retirement, you got to use it right, so you're going to use it for your income needs and things of that nature. So call it a spending plan or a spending strategy or whatever, but but it kind of puts that more positive spin on it because it's it's also gives you that freedom to feel like, yes, I can spend this because the plan or the strategy says so.

0:16:57 - Speaker 4
Right, yeah, and I think her question also was a two-parter because she's talking about a budget, but it sounds like her real concern is making sure she doesn't outlive her money.

0:17:07 - Speaker 3
Exactly yeah.

0:17:08 - Speaker 4
There are options out there that can combat longevity risk in retirement. So Well, that's a strategy to plan too, right, exactly, yeah, yeah.

0:17:18 - Speaker 3
And so how can you know is, I think how she phrased that you know how can we make sure that we're gonna run out of money before we pass away, and that's the number one fear for most people. So if you have not done so, mary, then get a strategy in place and that'll help go a long way to helping your husband feel better about those numbers you know. So you can kind of find that happy medium of saying there's some hard data that makes you feel better, a ka out of the budget or whatever, and then you have that kind of freedom within the plan that lets you know that you Guys are going to be alright, which is going to make him feel a little bit better. So hopefully that helps you out. And, folks, as always, if you got questions you know, reach out to Sherry. That's one of the reasons we do the podcast is to share some information, to chitchat, let you get to know her a little bit and just kind of share this generalized information. But at the end of the day, you got to talk about your specific stuff and so it's really nice when we get these email questions come in.

So stop by the website greenway wealth advisory Dot-com. That's greenway wealth advisory dot-com. Drop her a line, set up some time to chat, reach out and give a call, whatever the case might be, and don't forget to subscribe to the podcast on Apple or Google or Spotify or whatever platform you like to use for your podcasting needs here. For money chic women in retirement, you can type that right into the search app for Apple podcast. Let's say, you just type in money chic and you should find it popping up that way. Of course, you can all find all of that stuff at the website greenway wealth advisory dot-com. Well, sherry, thanks for hanging out and answering these questions. I appreciate it.

0:18:42 - Speaker 4
Thanks, I enjoyed these.

0:18:44 - Speaker 3
Yeah, this was fun, yeah well, hope you have a great week and we'll be back right before Thanksgiving. We'll do one more of these for the month of November and I'm sure we'll talk a little bit more about food on that one too. We'll see you next time here on money, chic women and retirement with Sherry rash, financial advisor and money coach at Greenway wealth advisory. Discussions in this show should not be construed as specific recommendations or investment advice.

0:19:09 - Speaker 1
Always consult with your investment professional before making important investment decisions. Securities 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.