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
Hey everybody, welcome in to the podcast. Thanks for tuning in to this edition of Money Chic, with Sherry Rash from Greenway Wealth Advisory and myself Talking investing, finance and retirement, and we're going to talk about age and wisdom and how they play into the financial planning process. Sherry, I got onto this idea and this topic because, well, I'm turning 50 next month, right, so it's kind of You're a Virgo.

0:00:53 - Speaker 1
Yeah, yeah.

0:00:54 - Speaker 4
You as well. I'm a Virgo Nice.

0:00:56 - Speaker 3
Very good. 16th, when are you 19th? Ah, look at that.

0:01:00 - Speaker 4
Fantastic, I knew I liked you. That's right, couple days apart.

0:01:03 - Speaker 3
Fantastic. So, like I said, seriously I'm turning 50 and things. You do start to kind of view things very it's very funny how this happens. And what is that old quote Age is the price of wisdom, something like that, right?

0:01:17 - Speaker 4
Youth is wasted on the young. Youth is wasted on the young right.

0:01:19 - Speaker 3
So as we age we start to view things different, and also from what you do. From a standpoint of being a financial professional, I think 50 is when people start to typically get serious right. They start to really Okay. Maybe I should put some more thought into this whole financial planning, retirement planning thing. 50 seems to be that kind of number for a lot of people.

0:01:39 - Speaker 4
Yes, it does. You're officially adulting by then.

0:01:43 - Speaker 3
I would say Maybe too much adulting, I don't know, We'll see. But anyway I've got some basic questions around this and just chat a little bit on age and wisdom and how it changes and what you see from your client base. So how do you see and how have you seen your clients changing in their own perspectives? About maybe what money or wealth or whatever means to them, as they've been aging and working with you.

0:02:06 - Speaker 4
I do see it. I see priorities start to shift. The younger clients like the stuff and spending money on stuff and traveling and all of that and enjoying their hard-earned money. But then as you get older and you have children in a home and money starts to go there and it is expensive to have kids and have those things, so the stuff doesn't mean as much anymore. But then they also start to, as they age, realize wow, I focused on other things and I did not focus on saving towards my retirement, and then that becomes a focus. So building up a nest egg then becomes a focus. Building up educational savings accounts becomes a focus and not necessarily spending money on a thing when instead they can redirect that to pay for their future self or for their children in the future. And so there is a mentality shift as you get older and priorities change as well.

0:03:12 - Speaker 3
Yeah, I think a lot of times we do this shifting thing and of course, luckily, we do have this kind of I don't know if it's natural or not, but there's some built-in things that start to happen when we get to 50, for example, to maybe start saving more. The kids are hopefully coming off the payroll. There's no more of that. You're making probably the most you've ever made. So it's not all coming together to allow us to hopefully start feeding this retirement account more if we feel like we've been behind or whatever the case might be. And that kind of leads me into my next question a bit, because is there a consistent message that you hear from people saying I wish I would have known or done this sooner? I imagine most of the time it is that I should have started earlier with the savings thing. But is there something else you hear as well?

0:03:56 - Speaker 4
The savings is a big thing. So, especially in a 401k or 403B, an employer-sponsored plan a lot of times what you just hear is well, just contribute up to your match. That seems to be the popular piece of advice that well-meaning neighbors or uncles or parents give out. Is well, just contribute up to your match. But a lot of times people are able to contribute more than that, but they're not even aware that they can. So something that I hear a lot of clients say is, if I only did more than my match, I could have that much more in my retirement. So not just listening to well-meaning family members or friends about their financial advice, I think is also something that people hear. I wish I would have worked with you years ago. I wish I would have started this years ago. So really just having help, professional help, and just saving a little bit extra, sacrificing just a little bit, Because it really is just a little bit, sacrificing just a little bit today, where that'll have your future self will be very grateful for that.

0:05:08 - Speaker 3
Well, the strategy, that's when it comes in place and for what you do. So if you want to use that conversation that you were just mentioning, where it's like, okay, only contribute up to the match, well that might be some fine advice to get the match in that particular financial vehicle. It doesn't mean that you couldn't look at some other financial vehicles for savings or investing or whatever. And again, that's where the strategy of what you do comes into play, because you could say, you know what, maybe that makes sense. Let's only do the match for the 401k at work, but then let's maybe do another financial vehicle over here and over here, so we can have some other different kinds of buckets and different investment tools.

0:05:42 - Speaker 4
Yeah, right, the 401k doesn't is not the end all be all when it comes to saving. So I think that people think of really two vehicles for savings a savings account and your 401k. And once you hit the match for your 401k, the mentality is kind of like okay, check, done that, all right, I'll send the sum to savings. Well, you know, I have a healthy savings account, okay, I'm done, my job's done Right. When that's not the case, there are many other ways that you can save and contribute to accounts that are not just those two things.

0:06:15 - Speaker 3
Yeah. So like if, for example, if you want to put some numbers to it you could say all right, you know, we can financially afford to put away 20% of our take home into our retirement accounts and let's see, 6% is going in the 401k and that's because that's the company match. Well, now we have 14% to and put into some other vehicles or whatever right, Whether it's a Roth or whether it's some other kind of thing or whatever the case is. So you know, saving or contributing more towards retirement is a good thing. It's just figuring out the right vehicle for you, and that's again. I think that's where the age and the wisdom starts to come into place, because we start thinking all right, wait a minute, I can probably do this more efficiently than what I've been doing, you know, and you turn to a professional and get some help.

So anyway I think that's where we, that's where I'm starting to find myself anyway at this point. As people approach retirement, do you find that they're worrying more or less about the financial issues that they did when they were younger? So if you've got a client that's, let's say, 35, another client that's 65, do you find that the financial issues become less or more as we get closer, as we, you know, get older?

0:07:18 - Speaker 4
I think they worry less. They realize that there's really not much they can do about it. It also depends on what the financial issue is. As clients get older and they're approaching retirement, paying off the mortgage is always a big issue that is brought up. I just want to be debt-free, which is fantastic to be debt-free, but I also want to understand why do you want your mortgage gone? Does it just make you feel better and that's an emotional reaction, but I can help them run the numbers Does it really make sense to have your mortgage paid off?

Because you could get a deduction for it or, you know, then you would have to deplete your savings in order to pay off your mortgage. Does that make sense? So paying off the mortgage is a big quote unquote issue that many clients feel that they have as they're approaching retirement. But many don't seem too worried about things that have happened in the past maybe some poor decisions or lack of savings. It's just I wish I would have known better, but I can pass that knowledge on to my children or my grandchildren or anyone else I care about. So the issue topic does not seem to be as prevalent. It's just more can I retire is the big question.

0:08:34 - Speaker 3
Gotcha. Yeah, the house one always strikes me, and it's understandable, right, because it's an emotional thing. It's also, it's a big stressor, right. So you could easily say, man, I just would feel so much better getting rid of the house. But to your point, you know, you've got to weigh the emotional head part with the mathematical part, or maybe it's the heart part, right, with the mathematical part, to say, does this make the most sense? And at the end of the day, I guess, if it's your money, it's your thing, and if it's just stressing me out to the point where it's just killing you, then and you need to do it and it's there, then that's why you talk with your advisor about saying, okay, this is really what I want to have happen, or how can we do this as efficiently as possible, because it's just driving me insane. So don't let just the emotion overrule the math or the math overrule the emotion. They got to work together.

0:09:17 - Speaker 4
Right, and I think that paying off the mortgage is one of those well-meaning pieces of advice, just like the only contribute up to your match or you have to contribute up to your match. Does it make complete sense to pay off your mortgage if that means you're withdrawing from retirement to do so and no? Or the opportunity cost? Could you make more money by having that money invested versus paying off your 4% mortgage? So, really getting down to the emotion of it, does it feel like an anchor holding you back having a mortgage, or has that just been always what you heard? Do not have a mortgage, do not have a mortgage. That's really getting down to the crux a bit of why do you feel this way, why do you feel that this is an issue and talking through it without emotion, yeah, that's a great point, and certainly one that we all have to tackle, as, again, we get older.

0:10:12 - Speaker 3
So let's talk legacy. So I was teasing my kid the other day Sherry, you've got a couple young ones, I've got this one that's 24 now, which makes me feel really old but, she just leveled up.

She just ranked up in the military yet again, some super proud of her and she's just killing it. And she called and she was talking to us yeah, we're super proud of her. So I decided to tease her and I said, well, you're making I mean, the amount of money you're making now, versus what I did when I was 24, I'm, like, you know, super proud of you. I said, but you know what? You're not going to need us for retirement or for an inheritance, so your mom and I are going to spend it all right. And she started wait a minute, pump the brakes, buddy. She's like I want some sort of inheritance and we're laughing and having a good time about it. But it got me thinking.

We have started to see a shift in how people view their legacy, not not for everybody, but just in general. You know, 70s and 80s, so on and so forth. I think it was you know, we're going to leave as much behind to the family as we can. I think people and I think this is a good thing and I'd like to get your take on it but people are starting to say, hey, let's do experiences and things with the kids and grandkids while we're still around, and then, if there's something left over, we'll leave that behind for a legacy. I think we're starting to see a shift there, at least in my opinion. What's your take? What do you see?

0:11:23 - Speaker 4
There's definitely a shift and I love the idea of, instead of leaving your kids and grandkids a bunch of money that who knows what they're going to do with when you're no longer here, use that money and watch them enjoy it while you're still here. I think that's beautiful and I think that's wonderful and I definitely bring that up to my clients as far as having leaving memories versus just leaving money, because there is also a risk when you leave money to your children that they may make some mistakes. They may end up paying more taxes than they have to. For example, with retirement accounts, if they completely cash out the account, they're paying a ton of taxes right away where, alternatively, it could be spread out over 10 years. Right now, with the CARES Act, is what they require.

So there's mistakes that your beneficiaries can make and I think clients are realizing that. But they're also realizing that legacies don't just have to be financial or they could be financial in different ways. So leaving money to pay for your grandchildren's college education, so having it earmarked for that, is a beautiful sentiment for my clients as they get older to know. Well, I may not be here, but I know my granddaughter is not going to have to worry about paying for college because of my money's going to finance that for her and I think that's great. And I think people are also realizing that it's expensive to live today and, you know, it might not be as realistic to leave a bunch of money to my children as I once thought it was going to be 20 years ago. So, and I also think clients I'm seeing clients want to enjoy their retirement and not have to sacrifice as much for the purpose of leaving a legacy versus generations before I do think sacrificed because they wanted to leave money to their children.

0:13:18 - Speaker 3
And there's really no right or wrong answer to this. It's really just what you want to do. The big thing becomes, sherry, that you probably have to tackle is making sure that, if it's a couple, that they're on the same page, because we'll see many times where maybe one wants to leave a little bit more. One wants to. Hey, we worked for this, this is ours, let's enjoy it. I was talking with a gent the other day and he's like I'm leaving my kids a credit card bill.

0:13:41 - Speaker 4
That's one question I ask when I start working with clients is do you want to bounce the check to the funeral home? Do you want to make sure that there's a bit of a nest egg left for your children? So it is an important question and, yes, it is important for couples to be on the same page with it.

0:13:58 - Speaker 3
Because that's definitely some friction right there, you know. If not, so going into retirement, and I think really, again, there's no right or wrong answer, but I feel like a healthy one is definitely the hey, let's, let's enjoy it with everybody and if there's something left over and we haven't sacrificed or given up our own, you know, happiness in retirement, then they can have whatever is left. I don't think that that's a bad way to view it. I think that's a very healthy way, because no one wants to go backwards in retirement and live, you know, in a way that they don't want to. So if you can, if you're lucky enough or fortunate enough to be in that situation, I think that's a healthy way to view it. But again, there's no right or wrong answer.

Final one here for age and wisdom, playing into this whole financial planning process Risk we're living longer, so risk everything becomes much more multiplied right. And certainly we're living in some risky times, not just financially. There's just all these things bombarding us. So how are you seeing people's opinion on the conversation of risk change and especially Sherry, with the market being basically bullish for 11 years now? There's little blips here and there, but there's been no prolonged downturn since 0809. And I think people have gotten a little comfortable with, maybe, excess risk because they think, oh, the market's going to stay up forever and overall it kind of does, but there's still chances that you're going to see, you know, maybe a prolonged downturn that could cause you some issues.

0:15:22 - Speaker 4
There's still going to be ups and downs, no matter what. Over the long term the market goes up, but there are going to be ups and downs and we have been spoiled for the past 11 years, like you said, with the market generally going up and, yes, the appetite, the risk appetite changes, but not completely. When I talk with my clients about retirement or as they're getting older, I talk about and we talked about this a few shows ago the risks as you get older sequence of return risk. So the market going down, inflation risk, stuff just costing more, and longevity risk living longer than your money. Those are the risks I'd rather talk about versus the market risk, because those are very real risks. But unfortunately, or fortunately, the answer to those risks, those three risks I mentioned, are all different.

So you can't treat all of your money the same way Because if you do, that opens you up to one of the three risks I've mentioned. If you go very conservative because you think, well, I'm older, I can't afford a downturn, you're only thinking about sequence of return risk, you're opening yourself up to inflation risk and longevity risk because you're not seeing as much return on your money. Because you're invested conservatively, because you're only worried about market risk.

Great work, we're conversely, if you're worried about stuff costing more or living longer than your money, you might be more aggressive, but then you're opening yourself up to sequence of return risk and market risk. So it's actually being treating your money in silos and each silo having its own individual risk that it takes. So don't treat all of your money the same way, because it's going to serve different purposes and you're going to use it in different points in time throughout your life.

0:17:15 - Speaker 3
Well, great points indeed. Good conversation is always here on the podcast with Sherry here on Money Chic. So we're going to wrap this up, but if you've got some questions, you need some help. As always, before you take any action, please check with a qualified professional like Sherry, who's been helping folks in getting to and through retirement for many years. Reach out to her at Greenway Wealth Advisory. You can find her online at GreenwayWealthAdvisorycom. That's GreenwayWealthAdvisorycom. Don't forget to hit subscribe on Apple, google, spotify, iheartstitch or whatever platform you like to use. We have it all there you can find it's all very easy to get to there at our website, or you can call her if you need some help as well, at 703-255-2808. And we certainly would appreciate you hitting that subscribe button, as we said, or that heart button or whatever happens to be, on whatever platform you use. Sherry, thanks for hanging out and chatting age and wisdom with me, and I guess next month we'll have to do some like birthday fun for a couple of cool Virgos.

0:18:06 - Speaker 4
I know that'd be awesome.

0:18:08 - Speaker 3
Yeah, we'll have to do Think about what the podcast topics will be next month for our birthday.

0:18:13 - Speaker 2
Since we're only a couple of days apart.

0:18:14 - Speaker 3
Maybe we'll have to have a little party or something. I don't know. We'll have some streamers and some who knows what here on the podcast, but we'll have some fun with that.

0:18:21 - Speaker 4
As long as there's birthday cake. I love birthday cake.

0:18:24 - Speaker 3
OK, you know what I'm with you, I'll roll with some birthday cake. Well, folks, thanks for hanging out with Sherry and I Hope you have a great week. We'll see you next time here on the podcast Money Chic with Sherry Rash from Greenway Wealth Advisory.

0:18:53 - Speaker 1
Sherry Services through Cambridge Investment Research Advisors Inc. A registered investment advisor. Cambridge and Greenway Wealth Advisory are not affiliated.