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The Duct Tape Marketing Podcast
Why It's Time to Retire the Idea of Retirement with Derek Coburn
00:21:00
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- [00:00]
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- [00:16]
John Jantz
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- [01:03]
Jon Chance
Hello and welcome to another episode of the Duct Tape Marketing podcast. This is Jon Chance. My guest today is Derek Coburn. He's a seasoned financial advisor and entrepreneur with over 25 years of experience. He is the co founder of Cadre, an exclusive community of CEOs and entrepreneurs which he launched with his wife Melanie. Derek is also the author of the best selling book Networking is not working. And we're going to talk about his latest book today. Let's retire retirement. How to enjoy life to the fullest now and later. So Derek, welcome back to the show.
- [01:36]
Derek Coburn
Thanks, John. So happy to be here.
- [01:39]
Jon Chance
So I know you've done some research on this, so I'm just going to ask you, like, where did retirement come from? Did like people in the middle ages retire or is that like a kind of a new thing?
- [01:47]
Derek Coburn
Yeah, it's, it's barely 100 years old. It first started in 1889. It was the first social program developed by, in Germany by a chancellor named Otto von Bismarck. And they selected the age of 70 at the time because that was the age that most people died. They brought it down to 65 about 10 years later. FDR, when he was setting up Social Security in 1935, thought it sounded like a good number at a time when life expectancy in this country was 71. So, you know, it's barely over 100 years old. And it was certainly never intended to be this thing that, you know, did for 30 plus years.
- [02:29]
Jon Chance
So is that, is, was that an alternate title of your book, work till you die?
- [02:34]
Derek Coburn
I'm not sure. You know, I think that might not have gone over as well. Dan Pink like five or six years ago told me he's like, I think a good title for your book would be how to Never Retire.
- [02:43]
Jon Chance
Yeah.
- [02:43]
Derek Coburn
And I thought it's a good title. But I told him that I think that there's just not enough people, certainly not then, that were raising their hand and knew they already did not want to work. I felt like I needed to have a title that was more inclusive, to bring people in and with, you know, dangling a carrot and then kind of trickle once I got their attention.
- [03:00]
Jon Chance
Yeah, yeah, yeah. Well, and we'll get back to how you're defining retirement because that's key to this. But you know, as a financial advisor, I mean, most financial advisors spend a whole lot of time talking about people saving for retirement. I mean, is that been something you've had to kind of correct in your own advising, or is that something that's never really been a part of your mo?
- [03:20]
Derek Coburn
You know, I've just been doing this. And the reason that I wrote, decided to write this book in 2017 is I realized that collectively the best thing that I had done for the majority of my clients is help them come to the realization that they weren't going to be happy sitting around doing nothing for 30 years. And I started off writing this book with the intention to use it as a business card to attract more high net worth clients that I might want to work with. But I sold my practice to a private equity company in 2019 and got some flexibility. And then Covid happened. I kind of set it aside for a number of years. And I feel like now, because I'm not looking to grow that practice, I was able to write a book that would appeal to a broader audience and be helpful to a broader audience. But to your point, financial advisors are not saying, do you want to retire? They're saying, what age do you want to retire? And everyone is being opted into this concept and they're just going along with it, I think, without really questioning whether it's going to make sense for them or not.
- [04:17]
Jon Chance
Yeah. And of course, one variable to this whole thing is that we're all living longer. Right. I mean, 65, you know, you were maybe incapable of doing a whole lot more, you know, 100 years ago in the workplace, but. Right. But now, you know, it's Warren Buffett, like 90, you know, I mean, so. So how does that factor into this idea that, you know, if you retire at 65, I mean, you are probably looking at 25, 30 years.
- [04:43]
Derek Coburn
Yeah, well, you're seeing this unretirement movement that's starting to happen. Brian Clark is doing some cool things around it with his New project further. But essentially 25 to 30% of people who have. Who have traditionally retired are going back to work. Some of them are doing it for the money, but most of them are doing it because they missed the connection, the purpose, the ability to contribute in a meaningful way. And I think there's just a lot of people that have gone along with this. They were told if they made sacrifices and did things a certain way, that they were going to be rewarded. They were going to be rewarded with this free time in this happiness and this ability to do whatever they want to do. And it's not playing out the way that they thought it was going to.
- [05:24]
Jon Chance
Well, and even worse, maybe they worked themselves to the bone, worked more hours, sacrifice their family with the promise of what comes after. Right. And then when they got there, it didn't come right.
- [05:37]
Derek Coburn
Exactly. Yep. Like the arrival fallacies, this promise that it would be a certain way, and then it's. And then it's not.
- [05:43]
Jon Chance
Yeah. So that's a big part of your book. And that's why I was saying. I think you're saying, let's retire retirement, but you're also redefining retirement, aren't you, a little bit in this. And a big part of the book is like, let's have a personally fulfilling life retirement right now.
- [05:57]
Derek Coburn
Yeah. I think that a lot of people just don't realize how well the math works out. So I'm saying to work longer, but I'm also saying that by recognizing that you'll probably work longer, it should translate into you not feeling like you have to work a lot of extra hours now when maybe your kids need you more or maybe when you want to travel or date your spouse more aggressively, it's more about taking advantage of the fact that this income will be coming in the future. And it's sort of sponsoring the idea that you can do these other things and invest in these other relationships and skills and experiences in a way that maybe you didn't think you were able to when you wanted to stop at 65.
- [06:35]
Jon Chance
Your next book. I'm sorry, I got distracted there, Derek. Your next book is date your spouse more aggressively.
- [06:42]
Derek Coburn
That's maybe like the second or third time I've said that out loud, but.
- [06:47]
John Jantz
So you.
- [06:48]
Jon Chance
You know, there's a book I read a few years ago that I thought made a lot of sense. I think I might get the title wrong. It was something like die broke. But the idea was that, like, a lot of people also just hang on to all this money that they, you know, squirrel away for retirement instead of like giving it to their kids, who or their grandkids to send them to college now. You know, like my children when they're 55, probably don't need my money as, as much as they might now. And I think that idea of take that, you know, take that vacation now, you know, do that big trip, you know, now, because when you're 75, 80, maybe you don't go to China or you don't go to Vietnam or something because it's harder.
- [07:24]
Derek Coburn
Yeah. You know, I think you're referring to Die with Zero by Bill.
- [07:27]
Jon Chance
Yeah, that's it. That's right. That's right.
- [07:29]
Derek Coburn
And really good book, you know, And I think that one, one area where maybe we differ a little bit is he's making the case that you're going to enjoy a trip to Europe more when you're 35 than when you're 50. You're, you're not going to be as physically capable to do some of these things. But I'm of the belief, and there's a lot of science that backs us up to where if you're taking better care of yourself now, if you're going on more trips now, if you're more active now, you're more likely to be able to continue doing those things in the future. It's really that people aren't doing those things that I have a harder time with it.
- [08:00]
Jon Chance
Yeah, I'm actually an avid bike rider and I'm doing a, I'm doing a triathlon this year, you know, and I'm 65 and, and I, my fear is if I stop doing those, I won't be able to do it anymore.
- [08:11]
Derek Coburn
I think it's a, I think it's a valid fear and it's a fear well backed by science that agrees with you.
- [08:17]
Jon Chance
I, I, I do have to let the cat out of the bag there. The triathlon I'm doing is a run fish drink. So not exactly the same thing, but yeah. So you have obviously in your financial practice that's like literally your research lab, right? To some degree, but then also cadre, you know, you work with a lot of high powered CEOs, folks that run their own companies in that, that are probably looking at, you know, they're not looking at the pension plan, you know, retirement. How has that kind of informed some of your views?
- [08:48]
Derek Coburn
What's interesting is even the people that sort of know that they're never going to stop working, they're still living their life like they're going to, they're still Making financial decisions and choices based on the fact they're going to retire at 65 like everyone else. So, for example, when they, you know, when they meet with their financial advisors, they're saying, yeah, like, what do I need to do to stop working at 65 and to stop doing this? And I would say that, that with entrepreneurs and business owners, sometimes it's not retirement, but it's. I'll get around to doing X once I have an exit, once I bring in a CEO, once I bring in someone else. And I think that, that it's the same story. It's the. It's justifying, deferring maybe things in relationships that deserve more of your attention right now in the name of getting around to it. Once you have a certain amount of money or a certain financial, you know, experience or exit from your business, are.
- [09:42]
Jon Chance
You finding, you know, I think some, to some degree, we're talking about just extending how long you work, but what about a major pivot? You know, it's like, I've been doing this for 30 years, done what I want to do here. I want to go do something different. I'm not going to retire, but I'm going to do something totally different. Maybe something that I think is. Seems totally cool or that I'm more prepared to do today.
- [10:01]
Derek Coburn
Yeah, look, so I have an entire chapter. It's the longest chapter in my book that's. That are case studies about people that have. That have taken this and they've gone into a lot of different directions. And one, one, maybe that might be fun to share with you, is just our mutual friend Jay Baer, who I spoke with for the book. And Jay sold his agency, I think, early on in Covid, and was sitting around and decided he wanted to start making videos about tequila. And, you know, so he went from that to really leaning into one of his pass and one of his interests. And after sharing the case study, I have a callback later in the book to say, look, I mean, if Jay Bear can make a lot of money, you know, drinking tequila and talking about it on video, then I'm sure that there's a lot of different cool ideas out there that are waiting for you as well.
- [10:48]
Jon Chance
Yeah. That also, you know, necessitated some amount of travel to some places he hadn't spent time in too. So, I mean, I think he's.
- [10:56]
Derek Coburn
I think he's mostly. He's mostly hurt by the fact that more people recognize him as the tequila guy than the keynote speaker.
- [11:04]
Jon Chance
He's still doing a fair amount of that, too.
- [11:06]
John Jantz
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- [11:25]
Jon Chance
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- [11:27]
John Jantz
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- [11:46]
Jon Chance
So talk about some of the changes. Maybe they're not changes, but if somebody's going to read you pick up your book and. And really the ideas in it just resonate. What are some of the changes that you. They're probably going to encounter or. And maybe it's just mindset. Yeah.
- [12:01]
Derek Coburn
One of the first things that I want to point out is just the financial impact it's going to have. And so I share an example in the book about a fictitious guy named Tony who's 45 years old. He makes 150,000 a year and he has $150,000 saved up for retirement. You could call it 250, 500, 100,000, whatever you want it to be. But if Tony wants to have a traditional retirement at 65, he has to save about $2,500 per month in order to make that happen, which is 20% of what he's bringing home, which is a non starter for most people. That would mean that you are saving about what you're living on. If Tony decides to work until he's 75 instead of 65, the amount he has to save on a monthly basis goes from 2500 down to $110 per month. It goes down by 96%. And even if he doesn't want to work till he's 75, he wants to go till he's 70. It goes down 75% to 600 bucks a month. And so we've all seen these articles that make us feel really dumb about how we should have saved more when we were 22 years old and taking advantage of compounding interest. And while a lot of us didn't do that, and even if we would have done that, we weren't really earning a lot of money at that time compared to what we're earning now anyways, there aren't a lot of articles talking about the benefits of having the advantage of compounding interest by letting it sit in for an extra five or 10 years longer. So immediately I want to, I want people to know, I want people to see they have a lot more money and a lot more time that they can spend differently. Once they realize, you know, I'll probably be doing this a little bit longer than what I was originally thinking.
- [13:32]
Jon Chance
Yeah. I mean, doesn't even factor in assuming it'll be there for a few more years. Doesn't even factor in the escalation to Social Security. Right.
- [13:39]
Derek Coburn
Yeah, exactly. I'll tell you, like something maybe more specifically 401k plans became all the rage mainly because of the idea that I can put money away on a tax free, free basis while I'm working, get a tax deduction based on my current tax bracket. And when I pull it out, I won't be working, so I'll be in a lower tax bracket. And that seems like a no brainer to anyone when you lay it out like that. But once someone realizes there's a good chance they might be working into their 70s and they're going to be taking required minimum distributions from their 401k plan and they're still earning an income, then maybe they're not in a lower tax.
- [14:17]
Jon Chance
Rate all of a sudden that tax got taxed. Higher bracket.
- [14:20]
Derek Coburn
Yeah. Maybe this 401k plan isn't as good of a deal as it seems. And without getting too technical here, like an easy fix for that. Right. Is I think over 90% of 401 plans right now have the option to convert it to a Roth. And that might be something that people want to do where they're making their contributions on a post tax basis. But that's just one example of maybe how your thinking should change a little bit once you realize you might be working a little bit longer.
- [14:43]
Jon Chance
You also missed, you know, I know in our case we have a 3% match on the, you know, employer match. So that, that certainly helps that out a little bit.
- [14:50]
Derek Coburn
I say that's the place even, like, even maybe before you work to aggressively build up your emergency reserve fund, if you're getting a match, probably take advantage of that.
- [14:58]
Jon Chance
Plus owners, you know, have the ability to profit share into a 401k. So. Yep. You know, which I may or may not have taken full advantage of every one of those.
- [15:08]
Derek Coburn
Amazing. Yep.
- [15:10]
Jon Chance
Is there any lifestyle change? You know, that is, I mean, because.
- [15:14]
John Jantz
I am here and you know, I'm.
- [15:15]
Jon Chance
Just going to work longer. Right. So how does that affect my spouse? How does that affect, you know, other Lifestyle things. I mean, is that, you know, is that something that's going to be realistic in that regard?
- [15:25]
Derek Coburn
I'll give you like an even short term example of how it's playing out for me and some people I know. So I have a 15 and a 12 year old and I spend a significant amount of time with them, with my wife, with my friends, compared to.
- [15:39]
Jon Chance
Most people, as your Instagram account will attest.
- [15:42]
Derek Coburn
Yeah, exactly. And, and, and one of the driving factors behind that is that when my youngest moves out of the house in five and a half years, I'm going to be ready to turn it up a notch. I'm going to be ready to work even more than I'm working now. And just knowing that I'm going to have this income coming in five or six years really frees me up and liberates me to lean into spending as much time with them as possible. And I think that's just the more shorter term, more abbreviated version of how it, it works in my mind for thinking about what I'm going to be doing 20, 30 years from now.
- [16:15]
Jon Chance
Are you doing any coaching workshops, anything outside of the book?
- [16:21]
Derek Coburn
Yeah, I'm not, you know, I'm open to it, I'm interested in it, but I feel really good about where I'm going right now and this message that I have to share and, you know, we'll see where it goes.
- [16:31]
Jon Chance
Yeah, yeah. And because I think one of the challenges, it's not like a, it's not necessarily just a, oh, implement these five steps in this framework and you'll be, I mean, it's really a mindset first.
- [16:41]
John Jantz
Right.
- [16:41]
Jon Chance
I have to accept this idea because I've spent my whole life, you know, thinking a different idea.
- [16:47]
Derek Coburn
Yeah, yeah. I mean, look, and I'll give you an example of that. I mean, I have clients who are in their 70s who have, you know, significant assets. Right. I'll say client A has. Client A and client B both have $15 million. Client A and client B could spend their money as much as they want from now until they pass away, and they're going to be fine. Client A is working a job, making about 100, $150,000 a year, doing things the way they want to do, on their terms, how they want to do it. And client B is not doing anything at all. Client A is spending their money in so much more of a carefree way, I think mainly because they know they're still making money that's still coming and they haven't entered that phase where, oh, my Gosh, like all I'm doing is taking out right now or watching the.
- [17:33]
Jon Chance
News or the stock market to see what happened to my retirement account.
- [17:36]
Derek Coburn
Right, yeah, exactly. You know, but I agree with you. I mean, it's, you know, even again, like even the people that know they're going to work longer, they haven't really done the software update to, to, you know, make a change to how they're living their lives.
- [17:49]
Jon Chance
Yeah, yeah. So are there first steps? I mean, is there, like, how do you, how do you get people rethinking their retirement plans?
- [17:57]
Derek Coburn
Well, you know, it's a couple ways. One is I shared the example about how they now have more money just by realizing. And that usually makes people feel a lot better about leaning into it. Oh gosh, yeah, I'll easily work an extra couple of years.
- [18:10]
Jon Chance
Are there, are there calculators? I mean, or have you developed calculators that could actually allow somebody to put that, those numbers in?
- [18:15]
Derek Coburn
Yeah, yeah, I have a calculator on my website which I can share with you. It's Derek coburn.com neverretire and it kind of allows people to enter in their own numbers and, and plug in and see the difference that it would make. But it's that. But it's also combined with maybe, you know, appealing to their fears and their concerns. So one of the, one of the examples I share in the book is when my boys were 10 and 5 or 10 and 7, we had a nighttime routine where we would take turns, my wife and I laying in bed with them for 10 or 15 minutes and helping them settle down and go to sleep. And it's really nice when they're that little. And I caught myself with my oldest. I'm like, this is not going to last much longer. And here I am most nights wishing it would hurry up and end. Hurry up and fall asleep. I'm not telling him this, but I'm saying it to myself. I want to go watch a show. I want to go finish this work, respond to this email. And I really worked hard. I was like, I want to appreciate this and value it more. So I had this thought. What if a company invents a time machine and 20 years from now they offer me the opportunity to stroke a check, to go back in time for one night with the 10 year old version of my kid, for one nighttime routine, one nighttime snuggle. What would I pay for that? And I caught it. 50 grand. I'd pay more than that, but I know that 65 year old me would pay 50 grand in a heartbeat to do that. And I think we're just having. Parents are having these $50,000 moments happening all the time that we're taking for granted. And I think, me personally, I'm going to really miss my kids when they're gone. And I know there's going to be a new phase. I know that it's going to be good, hopefully. I know that our relationship will evolve, but I really don't think that parents are spending the amount of time that they'll wish they would have spent with their kids.
- [19:54]
Jon Chance
Yeah, it's interesting. I'm in a different phase. And then I, you know, I have grandchildren now, and I will tell you that, you know, college is a different phase, but, you know, post college is really, I mean, we spend, you know, they're all over the country now, and we spend a fair amount of time, you know, with them as individual family units. And, you know, I will say that's pretty cool.
- [20:14]
Derek Coburn
Yeah, I see how you're doing it, man. I have a lot of respect, and I have no doubt that you are. That you guys are just amazing grandparents.
- [20:23]
Jon Chance
Well, that's one that there's, you know, just like parenting, there's no, like, course or book that you can read that will actually allow you to know how to do it. So make yourself.
- [20:33]
Derek Coburn
We're all doing this.
- [20:34]
Jon Chance
Yeah, absolutely. Well, Derek, I appreciate you taking a few moments to stop by. It's always great to catch up with you. Is there someplace you. You already mentioned Derek Coburn dot com. Is there anywhere else you mentioned that people might want to connect with you or find more about the book?
- [20:47]
Derek Coburn
Yeah, that's great. Like, I've already been writing and elaborating on a lot of the ideas from the book that aren't in the book on my website. I'm really just looking forward to starting a movement and seeing how far we can take this thing. So I appreciate you having me here, and it's always wonderful to spend the time with you.
- [21:01]
Jon Chance
Yeah. Well, again, appreciate you coming by, and hopefully we'll see you one of these days out there on the road.
- [21:05]
Derek Coburn
All right, thanks, Sean.