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-- talk again about retirement planning I am here where.
Darryl Bryant -- independent retirement strategist thank you for coming thank you for having me you haven't read the article about the tale of two retirees that I was really interesting.
-- Smart people can be and retiring at the exact same time -- really see it different kinds of outcomes now can you tell us a little bit about.
You know what that first mistake is when two people are approaching retirement when one person those and in the direction in the other person -- -- affairs.
Right well in that article what I try to do is to distinguished three different.
-- -- -- retirees had to make some decisions about three I had.
Two guys a 6666.
Year old spousal both of them retiring with a fair amount of money same pension settlement provisions same Social Security.
And me to decide about.
Pension settlement options so -- and how to manage your money the problem is that one -- doesn't seek an outside counseling.
Continues to do we've done so much in the past which is -- stand sort of growth mode with loose with his finances.
He makes wrong pension settlement provision.
Cost him a lot of money and then makes the wrong Social Security decision.
And then the -- and a lot of money there are -- three things when they were in tandem like if you make.
Three particularly bad decisions.
There can really crush a previously well thought out you know retirement so we ran them through from 2000.
Great to see that happen yeah yeah it is and you work so hard to put away for so long and then the decision hinges on.
Just having different kind of advice from different kind of knowledge at the end in any ends up.
Well what -- what a lot of people make the mistake -- doing is not transitioning from a pre retirement mode into a post retirement mode in other words.
It's and it's assumed and the -- is is allowed to continue the thought process so we're still trying to grow money.
What a lot of time when the majority of the time.
The objective of -- of the retirees should be if they're prepared and have enough.
Assets should be to begin to generate income from its all about myself -- ability.
Rather than continuing to grow the money and so we stay at risk and so forth all through retirement we don't adjust your portfolio.
Along with other decisions that we have to make them.
You can sure you -- -- destroy they have a retirement her.
Well let's that they were tightened -- this now because I myself and thinking about all the united future and how you say you have a bunch of different rules and here.
Are calling you tackle the 4% well what is the -- was.
Well -- percent rule was.
A rule of.
-- that we used to use back in the late eighties early ninety's when it was and it -- -- that it was a boom time for -- market and so.
What we would assume -- that we could -- gates we would.
From -- savings.
Leaving enough for inflation in the pay raise in the future and so forth.
But the problem is that because of the volatility of the market particularly -- since 2000 now we have.
Often times early in retirement and so that that number of of a 4%.
Pulled from savings has been -- now according to Michael think.
It is professor financial planning -- -- Texas Tech has been reduced -- -- two point 8%.
Which is a huge difference on your on your income and so we'll have.
In a big deal.
That is a big deal you also talk about.
The sequence of return which kind of touches on what you were talking about -- earlier if you explain what this term means -- Sequence of return is not talked about -- At all.
In even in financial planning.
-- and the reason is because it's actually real irrelevant to the pre retiree if it if you were to make Joseph -- a string of numbers.
Returns those -- -- just trying to grow.
300000 dollars to remember of us who have a positive and a negative I'm -- if you -- -- -- few -- It doesn't matter if we're -- grow assets it doesn't matter with a few with that sequence of return is.
-- in terms of of generating future value noble words those numbers -- appeared in any.
So -- it's irrelevant to pre retiree -- as a growing dollars.
If on the other hand we have a so some negative activity some negative returns early on such as in 2001.
Such as in 2008 -- the significant decline offense should occur early on in retirement.
Suddenly we have a diminished portfolio and we thought we really -- with a 4% rule -- For example now that 4%.
Represented -- that that.
We'll -- 121000 dollars per year something from that 3000 dollar portfolio -- now that 121000 dollars represents a very large portion.
Of that reduced portfolio.
So if for the retiree it's not about what you -- it's about when during your retirement did you.
-- -- Right right compound and now interesting term how you and me in -- -- For retirement.
Do you mean because I don't want any enemies and -- -- retirement planning and I.
Com what I find it.
And in my work and in -- bear in mind in my office all we work with our.
Retirees are -- our average climbed 62 when medium average climbed about seventy years old you know phenomenal talking about.
-- what -- has -- Right and so.
Typically the the interview if if a person looking for -- -- -- there.
And is interviewing typically the interview go something like this well mister Jones or Joseph -- journal last year when.
And now bear in mind you're 65 years old in a matter what you say.
Well we did better come on over our camp and we'll -- generated some higher returns for -- that good -- unfortunately the a typical conversation.
It's important for the retiree to again to make a shift that he's he's beginning to retire and so before we make any decisions as to whether we're even trying to grow dollars.
Must first determine what kind of -- return we need and then invest accordingly no words if we don't need a 12% rate of return in order retire.
And then why invest that -- -- the whole thing -- risk and by the way back again if you do need a 12% rate of return.
Then you're already -- to retire at all so.
-- -- I know it actually doesn't -- talking about a mistake people make -- they're crossing that particular deadline right.
I wanna know that what are your top five mistakes.
What can I take home with me and remember.
And -- my pocket and -- for the future so I don't make same mistakes and -- -- viewers don't make things.
-- great question okay I would say.
The enemy and a 54321.
-- yeah on the in the best or for -- Don't pension settlement provision taking the wrong pension settlement option I know -- seeking -- full pension when of searching reduce pension.
Provide for a surviving spouse rather than taking your full pension -- just getting -- life insurance I would if -- natural.
-- another one is as we just said it investing like you need to earn double digit rate of return when first do the math we'll find out what -- -- -- seeking.
Taking Social Security at the wrong time -- -- -- countless people to say I don't care I'm taken a 62.
Regardless of taxes so -- -- -- as.
Could feel better.
Well there's an 8% increase.
Each year that you defer like your Social Security so we can get -- -- -- we continue to work or we simply get by until a -- forward termination -- 66 or maximum age age seventy.
Those who can have a -- come in with inflationary trend that's going to be king.
Failing to factor inflation into the equation -- 60000 dollar and come today.
Need in fifteen years -- three after inflation rate is going to be about a 100000 dollars in income need to have the -- feels like income are purchasing power.
So if a person does do the math and they're typically.
Not doing all the math in the something you can't do on a legal -- You have to if -- -- would you like to think -- he -- I think.
What is this going to look like ranked and just to have and be comfortable fat right.
Yeah you sure have to be comfortable and most people as we can.
Nine out of ten people interviewed Joseph are saying protect my assets -- just wanna relax and go to dinner in the last one is.
Well -- discovered so just doing the math on the first play so well.
Thank you so much kilos great meaning you don't have -- more on your website.
He said he Brian retirement strategies dot com encourage all of our viewers to take a look at that's right -- your screen.
And thank you again for being inventive reaching my pleasure -- you again soon.
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