Episode 003:
How Will You Replace Your
Income in Retirement?


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(audio version is below)


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What is Episode 003 All About?

Have you heard of the post-World War II financial planning strategy known as the “Three-Legged Stool”?

Well, on this episode of The Retirement Equals Freedom Podcast we’re here to introduce you to the latest and greatest 21st century alternative!

Host Josh Bretl, a CPA and founder of FSR Wealth Strategies, is explaining his “Pockets on Your Pants” model for spending in retirement.

Income is the No. 1 concern he sees among clients contemplating their long-term financial prospects – and from the sound of it securing a revenue stream is also on sidekick Dave Schmidt’s mind!

The two discuss what “The Great Resignation” means in terms of future financial security, how the “retire at age 65” standard came into being (pretty random, actually) and why younger generations are ordering some of their priorities differently (embracing side hustles and skepticism about the corporate paycheck way of life).

All that said, whatever your approach, everyone benefits from having an actual framework written down, along with realistic milestones and contingency plans for those unexpected rainy days.

And speaking of those rainy days? Nothing could be more comforting than Market Day Chocolate Chocolate Puddin' Cake. We know that makes no sense, but listen in and thank us later!

The show wraps with just a little brainstorming. For future planning, here’s a possibility: The Retirement = Freedom Podcast co-hosts record while enjoying a “Happy Hour” featuring a tasting of Mike Rowe's fantastic Knobel Spirits handcrafted bourbon. Discuss amongst yourselves!

Click here if you’d like to learn more about or listen to previous episodes of the Retirement Equals Freedom Podcast.

Click here to explore the services that FSR Wealth Strategies offers and schedule a discovery call with one of the team’s CPAs. When it comes to living your best life, it’s never too early to get started!

Talking Points

Josh shares the story of his love for Market Day chocolate-chocolate puddin' cakes, which he discovered while hanging out at Dave’s childhood home, and how it all relates to retirement. Wait for it! It’ll eventually make sense.

All about how to think about income throughout your retirement years. It starts with one basic principle: Locking in a stream that is predictable, safe and secure.

A look at some of the approaches to securing income, historically and over time:

  • Commit to one employer, do the time and retire on a pension. (This option mostly doesn’t exist in the modern workplace outside of government and education.)
  • A “three-legged stool,” the legs of which usually vary in size:
    • Social Security proceeds.
    • Some sort of fixed income (an annuity or pension).
    • Savings, which vary considerably among people with different profiles.

Josh has an additional approach to propose: He calls his model the “Pockets on Your Pants.” Various streams of retirement income can come from lots of different pockets, but it’s important to know what’s there, what’s where and have a written plan.

When planning for retirement, the immediate, medium- and longer-term horizon have to be taken into consideration. It’s essential to be looking at least a few years ahead.

What about entrepreneurs or independent contractors with unpredictable revenue streams? How do they figure it out? Josh offers deep thoughts!

  • Retirement is not natural. It started in the late 1800s in Germany due to stagnant turnover in the workforce as the result of older people living/working longer.
  • The mandatory retirement age of 65 was set completely arbitrarily.
  • Entrepreneurs do alright with working indefinitely because by nature they’re scrappy and enjoy earning money and making enterprises go.
  • For people accustomed to a regular corporate paycheck, a bigger shift of mindset is required if they’re going to keep working beyond 65.

Bookmark This: Josh will circle back to do a deep dive into the psychology of money on a future episode, so stay tuned!

The so-called “Great Resignation” has inspired a paradigm shift among younger generations who don’t want to save for some future rainy day. They want to enjoy life sooner – which should work so long as they’re factoring in an earnings timeline that extends beyond the traditional 65 years of age.

Josh projects that the population will live longer and have to work longer to maintain services and a desirable standard of living.

Demographically, Baby Boomers and Gen Xers have the older, traditional mindset while younger generations are unspooling and reconceiving what it means to work, ways in which to work and for what length of time.

Whatever your approach – whether you’re leaning towards a non-traditional work life that doesn’t anticipate retirement or dream of a fixed date on which you’re done, having cash reserves is never a bad idea. It provides peace of mind like nothing else!

Something to Ponder: What’s the best-ever Market Day food? We’re pretty wed to Ne-mo's Chocolate Chocolate Puddin' Cakes but it’s neck-and-neck with their full-size bagel dogs … which need to be brought out of retirement. Listen to the people, Market Day!

Quotable Quotes

“Yeah. I'm going to go with 63% of the reason we're fat. Because those mini bagel dogs you get at Jewel, they're not as satisfying.” ~Dave

“Now that I’ve been in the industry for a while and have spent most of my time sitting across from clients, their biggest concern is ‘My paycheck’s gone. Where’s my money going to come from?’ ” ~Josh

“Everyone thinks about where their money is going to come from – no matter what their scenario is.” ~Josh

“If you’re spending $40,000 $50,000, $60,000, $120,000 a year, understanding where you’re going to get money from is extremely important.” ~Josh

“The pandemic has taught people – especially our age group – that there’s more to life than just working 9-to-5 … something like an estimate 40% of people started a side hustle during 2020-2021 and of that percentage 25% actually made money and are going to continue to do it.” ~Dave

“The mindset of people our age is that we can have more fun with our jobs, make more money on our own, not answer to the man!” ~Dave

“I’m hoping that the ‘Great Resignation,’ that great thought process, is going to lead to a shift in the retirement mindset. We’re going to live longer and longer and it’s going to require more money and economies.” ~Josh

“Financial planning, retirement planning is about managing cash flow. It’s managing income. Be it from a side hustle, something that you love, or be it that you’re truly ‘retired’ … having some guarantees built in is going to make people feel really good compared to the volatility out there.” ~Josh

About your Co-Hosts

A certified public accountant, Josh Bretl has spent the past two decades growing FSR Wealth Strategies into a firm that specializes in tax-focused retirement planning. Because taxes have the single biggest impact on how much you can spend in retirement, Josh is dedicated to developing individualized financial plans that extend and grow his clients’ retirement savings. Based in Elmhurst, Illinois, FSR Wealth strategically preserves and maximizes resources through tax-efficient strategies designed to fulfill retirement dreams.

Apart from producing and co-hosting The Retirement Equals Freedom Podcast, Josh's longtime friend Dave Schmidt is marketing director at FSR. He’s also a content provider and marketing adviser to local businesses and nonprofits. He’s also an advocate for t-shirts, all things 90s (especially the music), short walks and long naps.

Standard Disclaimer:
FSR Wealth Management is a registered investment advisor located in Elmhurst, Illinois. Information and opinions contained in this audio have been arrived at by FSR Wealth advisors. All information herein is for informational purposes and should not be construed as investment advice. It does not constitute an offer, a solicitation or recommendation to purchase any security. FSR is not providing legal, tax, accounting, or financial planning advice in this audio. These views are as of the date of this publication and are subject to change.

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