← Ready For Retirement
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- [00:00]
A
James, I alluded to this a few weeks ago, but I spoke to a woman, very nice woman, who said, I'm really upset I have $3 million. And I said, look, I don't want to be mean here or anything, but by you saying that, you know, there's a lot of people who would love to have $3 million. So it's just weird. And I don't hear it every day. Why is it you're mad that you have $3 million? And I said it like that, almost a little bit. Hey, come on. Why are you mad? You have 3 million. And she said, you. You don't get it. I said, you're right. That's why I'm asking you to explain it. And she said, the reason I'm upset That I have $3 million is because I found out that I'm not going to be able to hike to the degree that I'd like, and I will not be traveling because my sciatica has gotten really bad. I said, okay, that's an interesting response. Sad response. Tell me more on the financial side. And she said, well, I was never doing any financial planning because my neighbor always had more money than me, and I always just thought I needed as much money as they had. And they had, I don't remember, four or five million bucks. So I just thought I needed what they had. And they were also single. And so this woman eventually went on to tell me that she has this sciatica, which is essentially a nagging disease that's basically in, like, your hip or outer leg where it's constantly just uncomfortable. You're not in, like, cruciating pain. Some people are. But she was saying this got really bad from her continuing to sit at work. And she said, I didn't need 3 million. I needed about 2 to 2.2 million. And the last three, four years at work was when this got really bad. So here I am upset, thinking, I don't really need this, and now I can't even spend what I have. So the reason that we're transparent on these episodes is because we don't want you to look back going, well, now I can't do what I want to do because. Because financially, I didn't plan well. And the theme of what we're going to be discussing today are, what are some of the biggest lessons that we've learned from our clients? And this was an actual thread left in the community from someone who says, what has root seen from clients who have passed on so who have actually passed away? What are some Things that you could tell us so that we can start preparing more efficiently. The story I just told was, was of someone who's still working or, sorry, they're now retired, but they were working and now they're regretting it. Is there a story that comes to mind when you're hearing this, James?
- [02:20]
B
Yeah, and I think I would drill down even a little bit more. It wasn't necessarily the $3 million that she was upset about. It was what she gave up to get that $3 million. And so there's this. But here's the hard part is the hard part is money is very tangible in the sense you can measure it. Like I know to the dollar exactly how much I have, I can keep score. Whether it's for competition with a neighbor, whether it's just his own, I'll feel safer, I'll feel more confident when I have X amount. You can always see that value. The intangibles are the things like health, the things like relationship, the things like adventure, experience, like the things you actually want to do with your life. But it's hard to keep score in the same way you can keep score with money. And I don't just mean keep score in terms of a competition. Most people don't actually have any idea how much the neighbors have. But it's almost for them, it's. This almost becomes a status thing. Like the more I have, I start to feel better about myself at least short term before it becomes a new normal. And so I think that the stories I think about is, yes, when this, this tangible measure of success has overtaken and displaced what should be the true measure of success in our lives because it's so much easier to manage. And the things that come to mind immediately, a couple of clients planned and saved and planned and saved. And he built up all this money in doing so, unfortunately, kind of sacrificed some health things, sacrificed some other things, and they retire finally with all this money and within 12 months they've passed away. A lot of times health related. And you look at that and it's the client's not sitting there kicking themselves saying, oh man, what a mistake, of course not, they've passed. But you look at that and think how tragic was that that this tangible scorecard of how well your life has gone can be measured. But when we're gone, like that's. That scorecard doesn't mean anything anymore. That money scorecard actually has zero relevance. The only value that it actually has is to the extent that we can translate that financial scorecard into real success. Into real stuff that we want to do, which we talked about this a little bit last time. But it's these experiences that you have. It's time with family. It's living a life that's aligned with your values. And it's the people that never got that opportunity because they prioritized the financial above. And they're not bad people.
- [04:42]
A
They.
- [04:42]
B
You just fall. They're wonder. Some of the best people I've met, in many cases, one lady in particular, I. I loved her like a friend. She was so wonderful and she. I was so devastated to find out that she had passed. She just was not in great shape and she. She passed away less than a year after retiring and she had so many goals of trips she wanted to take, of things that she wanted to do with family, of giving back that she wanted to do. And it was just how tragic financially she was squared away. But she never actually got to, like I said, convert the financial success into. And I don't want to say she didn't live a successful life. She did some great things even before that. But that's the mistake of viewing the money as the. Almost like the main player. The main player in a video game and a baseball game and a soccer. Who is the star? It's not the star that should be the role player. They should be setting up the main player, which is Europe. Probably a horrible analogy, but that's. It's itching only valuable to the extent that it can help support you doing the things that you actually want to do. So that's when I think an even more tragic one is when it's. I remember a client, I sent out an email and the email was essentially, stop what you're doing. What's one thing that you can purchase this year? What's one thing you can do or buy this year that would materially improve your life? And one client, she wrote back saying, hey, I always had dreams to travel to Alaska, to take this train through this magical place to go fly fishing in Idaho. Me and my husband always had those dreams, but unfortunately he passed away and we'll never get to do those. And so it's. And I. So it's not a mistake. You can't control that, obviously. But it's the. If there's a mistake, if there's any lesson to be learned, it's do not wait to start doing a lot of these things. And that's a delicate balance because if someone's, to use an extreme example, up to their eyeballs in debt, no investments under. You have to get that worked out, you have to get your financial house in order. But at some point, there's a spectrum between focus fully on the finances and focusing fully on doing what you want to do and living a meaningful life. And I think people cross the threshold many times to where they could start focusing on the personal more than the financial, but they're still caught in this financial rut. Financial trap of just building the savings is not living life. And I would say that that's. That's a mistake in a lot of cases because they never actually get to do what they wanted to do.
- [07:13]
A
Another example is the framing of if someone passes away. Let's assume, for example, Alice passes away my fiance. Well, if she passes away, I'm the one managing the finances. So, yes, I will be distraught, and I will not want to look at documents that have her name on it. But I do know how things are run. The difference is, if I were to pass away now, Alice has to emotionally go deal with that, in addition to having to figure out where do I now go to log in. And I talked about that on a previous episode where I brought on a widow who talked about how she was so fortunate that her husband had life insurance set up. And these are things that you hope you pay for and never get value for. And it's weird. It's like, why am I paying for this and hoping it never happens, but I'm still paying for it because otherwise those dollars could go to somewhere else. But paying for peace of mind. Well, the reason that we exist in large part is to ensure that your spouse has someone that they can go to. So when you are not here, it's, hey, I don't have to tackle this alone. And I know I've seen, and I'm sure you have, James, where people unfortunately do pass. And then it's, oh, my gosh, I don't know where to go from here. I don't know what to look at it. And there's others that say, no, no, it'll be tough, but I'll be able to do it. And then emotionally, as you can imagine, it's, no, no, no, I cannot do this. I just don't have it in me. So to me, when I at least first saw this thread of, hey, what are the things that Root has seen from clients who have passed on? What can you do today to set up your spouse or children or heirs so that they don't have to worry as much about the not so sexy document side of things?
- [08:53]
B
I think that's because at there's so much going on in that phase, and it's everything from having no idea how. In some cases, I have no idea how to even log into certain accounts. My spouse passed away and I'm left here having no idea how to log in. Or the person who ran things passed away and the home was never properly titled, or the accounts were never properly titled. And now it's our money, but it's now going through probate, and I have to go through this process for a long period of time just to get the assets. Beneficiary designations weren't set up properly. I have no idea where I should be taking income from. There's burial expenses, there's the mortgage that needs to be paid.
- [09:30]
A
All.
- [09:30]
B
Where do I take money from? Is it this cash bank account that I'm having trouble getting a hold of? Is it the investment? Like, what was the actual strategy here? Insurances, did we have any. Do we have life insurance? If something happens to me, do I have disability insurance? Do I. Where do I go for health insurance? So all of these things that we. The person that controls the house, the money in the family, because typically one spouse tends to be more. Maybe we shouldn't say control. It tends to be running the show more so. And the other one just says, yeah, go for it, honey, that's fine. That's not always the case. The person that is running things takes for granted how complex that is. Sometimes they're in it, they run it, they know where everything is. If you had to explain, you know, or if I asked you to explain your exact financial situation to a stranger in 10 seconds, it's gonna be pretty difficult to do. Even if it's like. Even if your financial situation isn't all that complex, where do you log in? For what? Where the insurance is held? Where are the bank accounts held? What about the investment accounts? What are the various beneficiaries? All those things. Think about, could your. Does your spouse know those things? And so a major mistake is if you're the only one that knows that stuff and your spouse hasn't been brought up to speed, or if you don't have a trusted advisor or whatever the relationship is to help with that transition. That's a pretty major mistake that we've seen the widow, the widower come into the office with that proverbial box, cardboard box of just stuff, thinking, I have no idea where to start. Can you help me sort through this? That's a major mistake that could have been avoided on the front end.
- [11:06]
A
I do this on December 31st of every year. All of you do not have to do that. Nothing magical about that date. But it is fun to celebrate New Year's. And so what we do is December 31st is the day to make sure all of that stuff is updated. And the good news is, it's easy. It's not like we're asking you to go, hey, I need you to work 30 more years to save to your 401k so you can retire one day. It's like, no, we need to go look at beneficiaries. We need to make sure you know where to go to log in. And we're doing this so that we both sleep better. It's almost like when someone has anxiety to see if they're on track to retire sometimes. Sometimes it's like, I don't want to check in the same way you don't want to think, what if my spouse wasn't here? But then quickly you realize, no, we're sleeping better knowing we have the answer.
- [11:46]
B
Yeah, exactly. What other mistakes? Mistakes. Kind of an interesting way of thinking about. To me, it all comes from this belief that we'll live forever. And it's not even a belief that we think about consciously as much as a We don't want to deal with what's going to happen today if I were to pass, because I don't feel like I'm going to. And therefore, we never get around to doing many of the things that we should be doing. So I think that's the biggest one. But any other stories that come to mind or lessons that come to mind.
- [12:12]
A
I should have left a job earlier when I knew I wasn't happy, when I couldn't prioritize my health. But that's really hard to do if you don't have another job queued up that also allows you to do what you want to do. So it's like when people say, I wish I thought more about what I wanted to do in retirement before I retired. And I'll often say, hey, there's plenty of times where I'll be transparent and say, hey, you should have done this. This is not one of those. Because until you're actually retired, you don't really know how you want to spend your time. And so I'll ask people, what do you want to do when you retire? And they'll say, I'm going to volunteer in golf. I go, great, let's assume it closes down and you hurt your back. And they're like, I don't know. That was my plan. And so there Are people to some extent that do look back and go, you know what? Yep. I. I should have thought more about it. But most people, I find it's, I stayed in a job longer than I should have, or financially, it's, hey, I put too much money into one account and I didn't educate myself on why. Maybe I wanted a brokerage account instead. Or now that's more on the financial side. And you can see that brain coming out of me because we can't help it. But the biggest things are, hey, and I use my parents as an example. My parents, they were awesome. They paid for my soccer lessons. It's really fun being good at soccer right now, and that's because they help me. But they're working in their 70s and they would love to be retired. So if you ask them what would they want to do, they'd say, hey, we do it over again. But they said, we do it over again, but we'd be a little bit more intentional with our savings. So one of those things that we're not asking you to get perfect, but we're asking you to please be intentional.
- [13:36]
B
Yeah. And that's it. Be intentional. Listen to last week's episode or the previous episode where we talked about, what are those five buckets of five pillars just called Great spending things that you should be spending money on, and how do you stop waiting, stop deferring some of those things and stop doing them now? Both the things to protect you and potentially your spouse we talked about, make sure that you're on the same page and then also to live in a more proactive, intentional way and do the things you actually want to do. So that's, I think the biggest mistakes that we see is more so the things that you didn't do, almost the opportunity cost of the experiences. You can't get back the time. You can't get back the time with grandchildren, the time with family, whatever it is, you can't get that back. So make sure that you're doing those things as much as you can along the way.
- [14:21]
A
Absolutely. So if you all want us to answer, once again, a future question, a comment below, go put that in the root collective. That is where we pull these from. So we encourage you to go share if these stories have been helpful for you, and you can tag us if you are. And there are more of you that are starting to do this, where you'll be out at a restaurant and you'll eat cauliflower and you'll tag me in it on Instagram and you'll post on LinkedIn and you'll be talking on a live show where James is talking about candy bars and you go, hey, this reminded me. So tag us on Instagram, Tag us on LinkedIn. We want to hear from you and it makes our job more fun. So when we record these, it's nice reminders. Hey yeah, there's people who actually are taking lessons. As fun as it is just James and I chatting, we want to make sure that we are helping you guys. So go put in the Root Collective, post on your socials, tag us and we'll see you next time.
- [15:11]
B
Awesome. Thank you everyone. See you all next time. The information presented is for educational purposes only and is not intended as an offer or solicitation for the sale or purchase of any specific securities, investments or investment strategies. Investments involve risk and are not guaranteed. Any mention of rates of return are historical and illustrative in nature and are not a guarantee of future returns. Past performance does not guarantee future performance.
- [15:35]
A
Viewers are encouraged to seek advice from a qualified tax, legal or investment advisor professional to determine whether any information presented may be suitable for their specific situation.
- [15:46]
B
Once again, I'm James Knoll, founder of Root Financial, and if you're interested in seeing how we help our clients at Root Financial get the most out of life with their money and be sure to Visit us at www.rootfinancialpartners.com.