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. 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.

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

Welcome into another edition of Money Chic Women in Retirement, with Sherry Rash and myself, and we're going to talk about getting things right the first time. Irreversible financial decisions is on the topic for the podcast today. Now, technically, there's a little bit of a caveat to some of these. They're not completely locked in stone right away, but pretty important to get things right and just like anything in life, hopefully, doing it right the first time is what we're after anyway, so that's going to be our topic this week. Sherry, how are you?

0:00:57 - Speaker 4

Doing all right. Kids are back in school. I do have that normal back to school cold, so I apologize if I sound a little sick, but it's a good thing though, because that means we're back to school and they're out of the house.

0:01:10 - Speaker 3

There you go, that's right. Yeah, the little germ factories. You've got to love them.

but the little germ factories you can get those little colds, and it is September, it's just after Labor Day, so hopefully everybody had a good Labor Day. But I want to jump right into this week's topic, Sherry, because there's plenty of financial decisions and the things that we've got to do in the retirement planning process across the board. I mean just tons of stuff. But there are a few that have some pretty like weighty consequences and often do not have a oops. I made a boo boo kind of fix right. So in you know golf terms, there's no mulligan on a lot of these. So I want to talk about a few of these places, and it's funny that I say that because I'm starting with one that technically does have a mulligan, but yet people don't really want to use this and many people aren't even aware of it. So let's just jump right in and tackle it, Starting Social Security.

If you're one of those that are in the mindset, Sherry, that I'm going to turn it on as soon as possible, right at 62, for whatever reason you're doing, If it's the right reason, it's probably not going to be a problem. But if you're turning it on because you're like, hey, it's going to run out of money or the government owes me, or whatever. And then you realize okay, maybe the math would have made more sense, I'd have done myself a better job, a better service, if I'd waited. Well, technically it's too late, I mean for most people. There's a small caveat which I'll have you explain as well, but for the most part, once you turn this on, you're stuck.

0:02:30 - Speaker 4

Right. I mean, like you said, if you're taking Social Security because, well, I'm retired and that's what you're supposed to do, or it's more of an emotionally based decision. A lot of financial decisions that we're going to talk about are certainly measure twice, cut once. But with Social Security, if you start your benefit early and two years down the line, decide that wasn't a very good idea, unfortunately you are stuck with that decision. Social Security does allow that. Within the first year, if you say, hey, this was a mistake, I'm earning more income that I thought I was going to, this side job is working out for me, or I want to actually get back to work and be a little bit busier, you can say, hey, I made a mistake, social Security, I don't want to take it anymore. Within the first year, pay back everything that you've received and then start at a later time.

0:03:25 - Speaker 3

And that's the kicker. Right Is the paying back part. A lot of times people hear that they go oh, I can redo this, great. And then you go through the front and they wait a minute. I don't want to do that.

0:03:34 - Speaker 4

Yeah, exactly, you do have to pay it back.

0:03:37 - Speaker 3

Yeah, they're like. They're like Hang on, you owe us this money, so, and it gets a little convoluted and again. So why not just get this right the first time? And Social Security is a big one for this sherry because of that reason, because so many people wrap this decision up in a lot of times in emotion maybe more than math, right, and it's a domino effect too.

0:03:55 - Speaker 4

I mean if one spouse is the higher income earner and that higher income earner starts Social Security early, then that means the spouse also has reduced benefits going forward as well, because they get the spousal benefit off of that reduced amount. So you definitely want to think long and hard and have a strategy around Social Security, and a strategy being more than just I'm retired. Let me start my payments Exactly.

0:04:21 - Speaker 3

So that's one you want to get right the first time. Big one there. Let's go to number two, the spousal benefit option. If you're lucky enough to have a pension, this is one that I don't believe you can make a change. I don't think there's any caveat on this one. Once you've selected what you've selected, that's it right. If you did not take the spousal benefit option, someone's going to be really upset with you.

0:04:42 - Speaker 4

This is a big one because one pensions can have so many different payout options a period certain, a life with period certain, a guaranteed payout of a certain dollar amount, life, single life, joint life. So it is confusing and overwhelming. And you're just seeing these dollar amounts, these monthly dollar amounts that you're receiving, and with a spousal payout likely, the spousal payout is less than if it was just on the single life, the worker that earned the pension. So you're looking at and going, man, I don't want $500 a month less with the spousal. But you don't think about, well, what happens if the person receiving the pension passes away a year after they retire. Then the spouse is left with nothing. So, yes, the benefit, monthly benefit, is reduced. They may hurt a little bit, but in the worst case scenario and the retiree passes away soon after starting their pension, you're going to be happy that you have that spousal benefit.

0:05:47 - Speaker 3

And unlike the social security Sherry I'm not familiar. There may be one-off instances of sure anywhere, but if you've elected your spousal, your pension options and then a year later you want to change it, I don't think you can.

0:05:59 - Speaker 4

No, no, you can't, so they don't allow for that.

0:06:01 - Speaker 3

You know whether you're still alive and working for the place. Obviously that would be the deal. But I'm pretty sure that once you've kind of set that one in stone, it's installed.

0:06:09 - Speaker 4

Yeah, that's it.

0:06:10 - Speaker 3

Yeah, okay, let's go to number three, getting life insurance. Now this one, if somebody might go well, wait a minute. Now this is you can change your mind, just cancel the policy. What are you talking about? It's not a, you know, irreversible or it's an irreversible decision and kind of.

What I mean by this one, sherry, where I wanted to go with this is we all know as we age it's going to get more expensive, right, that's just kind of the thing. We all know that. But also you kind of don't want to wait, because what if something was to happen that you, you didn't get the insurance? You get a medical diagnosis and now it's maybe either completely out of range or you can't get it at all, right, because they won't cover you. I'll use myself as an example. I'm 51 now, but at 41 I had, you know, open heart surgery. I had a quadruple bypass and I didn't think about having certain different kinds of insurance at 41. I was kind of like paying attention to long-term care or whatever, and they wouldn't touch me with a 10-foot pole for the next probably seven years, eight years. It took a while before they would even look my way again.

0:07:06 - Speaker 4

This is a big one. I also bring this up if you only have employer-provided health insurance. Employer-provided health insurance is great because you can get coverage. It's cheap, relatively cheap or you don't have to pay for it at all if it covers your salary.

0:07:21 - Speaker 2

Right.

0:07:21 - Speaker 4

But to that same point. If you only are depending on employer-provided insurance, switching from one employer to the next, but then when you no longer have an employer and you're uninsurable, on top of that, that could create a deficit as far as life insurance goes. So definitely having some self-insurance and thinking about it and getting just a little bit either outside of your employer or thinking about it sooner rather than later, is definitely a good thing.

0:07:49 - Speaker 3

Now that's a great point as well, the opposite side of that, thinking from the employee side. So thanks for bringing that up. So again, you can kind of see where we want to make sure we get these decisions right the first time, especially when it comes to the first two. Those are heavy hitters. The life insurance is a little more leeway, but you just never know when life's going to come out of nowhere and you know, and slap us around a little bit, which it often does and we want to make sure we get these things addressed, especially if we're in good health and we have, and it's going to save us money, right, I mean. So that's the key to doing some of that.

The last one's got a little wiggle room in a way too, sherry, but sort of not. If you think about it, you know realistically, and that's choosing a retirement date. You know, not necessarily just penciling something in and saying, oh, I plan to retire at 72 on a, you know, september 1st or something like that. But if you've gone through the process of making this date you've got to play in a place.

You say I'm walking away from work at this you know, whatever date it is, and then you change your mind after the fact. Yes, you could always find a job and probably do something, but what's the reality of you going back to the same job with the same pay and on the same benefits and all that kind of stuff? So it's kind of a decision, once you lock that in stone, to walk away from the big corporate or big job that's been supplying your life, that you're probably not going to be able to get back into it without you know a lot of hurdles in the way.

0:09:06 - Speaker 4

Yeah, like you said, there's definitely wiggle room with this. You can go back to work, you can go back to earning a you know, a healthy paycheck and having more of a set schedule, but is it realistic that you can actually go back to the actual job that you had or something comparable?

if you've been out of the workforce for a handful of years? Maybe not. So you definitely want to make sure that you're retiring at the best time, that it works for you, especially mentally, which next episode we're going to talk about more of the psychological impacts of retirement and things you need to think about beyond just financially. When you retire Right, but, yeah, absolutely Leaving the workforce are you able to reenter it at the same position? Maybe not.

0:09:55 - Speaker 3

Well, and I think there's a difference in this conversation aspect, sherry, of reentering it because you're bored and you want to, versus reentering it because you made a money boo boo and you have to right. That's the big difference in there. So if you've set the retirement date, you walk away from work. You're walking away from the paycheck. You've got a good, sound strategy and a plan in place. You won't have to worry about those things. And then if you do get bored and you do just decide, hey, I want to get back out and have some interaction with folks and do some sort of work or part time or whatever the case is Cool, that makes a lot of sense, right. But if you've walked away, the math no longer works. You've made some mistakes somewhere, something's happened and you need the money and you have to go back to work. Odd's why you're not getting the same gig back for the same pay.

0:10:40 - Speaker 4

Exactly yeah.

0:10:42 - Speaker 3

So important to get it right the first time. I would say so For a couple of these, absolutely crucial. For some others, there's good wiggle room. But I think what's the lesson here, Sherry, it's just have a strategy right. If you're working with someone like yourself, get a plan in place. You work through the processes and can I have this stuff laid out, and then you'll have a roadmap.

0:11:01 - Speaker 4

Think through all of these scenarios and work with someone that will ask you these questions, because these are some things that you may not even think about. Most people just think about when am I going to retire? How much money do I have? Where's it coming from? Yeah, and kind of just going from there, even if they give it that much thought. So definitely there's lots of nuances when it comes to retirement and social security and pensions and all of that, so you need to work through it. It's more than just setting a date in stone and working from it. You need to think it out and have a strategy in place.

0:11:35 - Speaker 3

Yep, and that's what Sherry does all the time. So if you're not already working with her and you need some help. First of all, thanks for checking out the podcast. We certainly appreciate it. Don't forget to subscribe to it if you'd like to catch more content as it comes out. It's money, chic, women and retirement. You can type that right into the search box of whatever application you like using, like Apple Podcast, for example, or you can just find it all at her website, greenwaywealthadvisorycom. There's a great way for you to check out lots of good tools, tips and resources. Plus, you can also again subscribe to the podcast through her main website. We've got links to everything GreenWayWealthAdvisorycom. That is GreenWayWealthAdvisorycom, and, as Sherry mentioned, there's so much more to it than just the X's and O's, and we're going to talk about some of the psychological parts. I can't say it's a big word this morning Psychological.

We're going to talk about some of the psychological stuff on the next episode, so tune in for that as well. Sherry, thanks for hanging out with me. I appreciate it, my pleasure. Thank you, yep. We'll see you next time right here on Money Chic, women and Retirement with financial advisor and money coach Sherry Rash.

0:12:42 - 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. 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 GreenWayWealthAdvisory are not affiliated.

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