As a Retiree Your Investment Strategy Needs to Balance Time and Risk
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What is Episode 004 All About?
You’d think retiring with a big pile of money is pretty much the Golden Ticket to non-stop good times, but – spoiler alert – it turns out that spending strategically is also a thing.
If we don’t? More and more people are living longer and, well, no one wants to outlive their bank balance.
The goal here is to enjoy our bucket lists, maintain a healthy emergency fund and ultimately still have some inheritance left for relatives who were nice to us.
It’s a complicated equation, which is why The Retirement = Freedom Podcast is here to help get it sorted out. Josh Bretl, CPA and founder of FSR Wealth Strategies, is focused this episode on the tricky business of investment management.
In retirement the whole calculus in terms of time and risk has to change and too often financial planners don’t know how to adapt or serve their clients well in this next phase.
We learn that free meals can be a great marketing tool, not only for drawing prospective clients but also – to Josh’s surprise – for educating people like trusty sidekick Dave Schmidt, who goes 2-for-2 on a little pop quiz.
His arts degree didn’t exactly prepared him for crunching numbers, but we’re seeing an encouraging learning curve here (despite the disruptive slurping – with apologies to Dave’s mom).
Josh keeps us on track with informative highlights from a recent FSR Wealth Strategies lunch presentation and a recap of what we’ve been learning about the jigsaw puzzle that is retirement planning.
Join Josh and Dave next week, when the focus shifts from income sources and investment management to the super-important topic of tax planning. Sound a little dry and confusing?
You clearly haven’t experienced Josh’s “not boring” take on this topic. Dave promises: It’ll be a hoot. Let’s hold him to it …
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!
Is there hope for Dave? Did he come for more than the free food? Josh is taken aback that some of the insights he shared at a recent live presentation stuck. Progress!
Retirees get a lot of junk mail invites and Josh resisted offering free meals as an incentive, since it seemed kind of cheesy. But at the end of the day, it’s a great way to get people in the room. As a bonus, they get helpful, accurate information!
The three primary buckets on which The Retirement = Freedom Podcast will focus:
- Sources of income.
- Investment management.
- Tax strategy.
Riddle Them This: How many boxes of puddin’ cakes must Josh buy in order to get the best price, including shipping and handling?
About investments (a topic that Dave admittedly finds a little scary):
Generally the one area in which most people have done some planning.
The goal is to accumulate money, which can be accomplished in various ways:
- IRAs and Roth IRAs
- SEP IRAs
- Real estate
Financial advisors generally do a good job with helping people amass their nest egg, but a pretty terrible job as far as how to spend that money effectively in retirement. Why? Because they don’t understand how the investment philosophy has to switch.
In retirement, financial planning must factor income and taxes into the equation – and it’s a lot more complex than the straightforward invest, invest, invest model. The paradigm shifts into learning how to spend that money.
How you’re going to spend depends in part on:
- Whether you plan to use all your assets.
- How much you want to have set aside for emergencies.
- How much you hope to leave to others as an inheritance.
POP QUIZ: Does Dave remember the two biggest shifts in post-retirement thinking:
- Time: The frame of reference encompasses near-, medium- and long-term.
- Risk: Too many people are overly invested in the stock market, which despite recent history can be volatile and leave retirees vulnerable to precipitous loss.
Other risk factors outside of the stock market: Tax risk, over-spending, living too long.
Reality Check: People tend not to think they’re going to live as long as they in fact will, which – without proper planning – can stretch thin or burn through resources altogether.
Bonus Info: Why do artists typically dress in black? Allow Dave to explain: Their days are so inundated with color assessments and choices that when it comes to getting dressed it’s simple and liberating just to stick with black.
More on Mature Style Choices: When it comes to his Sunday best flannel, Dave is willing to delay gratification and change into his comfies before diving into a favorite meal!
Next Episode: All about taxes and it’ll be “a hoot.” Josh and Dave promise!
“After hearing you talk and give the same presentation over and over, I do absorb things. Like SpongeBob absorbs water.” (Dave)
“We have a great practice and wonderful clients and I think what we do is really, really special. But in order to grow we have to market.” (Josh)
“Financial advisors as a whole are really good at helping you build up your pile of money … Some people’s piles are bigger than others. But as you get through your working years you’re trying to make this pile bigger.” (Josh)
“The No. 1 job you have when you’re building your nest egg is just to do nothing. Don’t touch it. Let it sit and grow. The unstopping growth of it is so powerful.” (Josh)
“Did you just slurp in the middle of the podcast? You just, right in the microphone, slurped a drink.” (Josh)
“Most people we see in retirement are taking too much risk. And it’s understandable. There’s a very mental reason for it … People forget that the market goes down and that there’s turmoil.” (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.
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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