Getting To Your Retirement Exit

Ep 22- The 5-Year Retirement Window and other key elements

October 04, 2020 Jenny Jones Season 2 Episode 22
Getting To Your Retirement Exit
Ep 22- The 5-Year Retirement Window and other key elements
Chapters
Getting To Your Retirement Exit
Ep 22- The 5-Year Retirement Window and other key elements
Oct 04, 2020 Season 2 Episode 22
Jenny Jones

In this episode, Jenny talks about some key elements of your 5-year retirement window. He referenced Episode 3 as a precursor, which substantiates this particular episode. Quantitative is important, but Qualitative is just as important. Tune-In to learn at least one new retirement exit concept or strategy. 

Show Notes Transcript

In this episode, Jenny talks about some key elements of your 5-year retirement window. He referenced Episode 3 as a precursor, which substantiates this particular episode. Quantitative is important, but Qualitative is just as important. Tune-In to learn at least one new retirement exit concept or strategy. 

Hello there, Jenny Jones. Getting to your retirement exit. What I wanted to do was share with you today. I wanted to talk about your five year window. Most people try to figure out what is the best time to start preparing for retirement or when do they start making adjustments, when they start making moves. Now, I talked about in episode three, preparing for your descent. The last point I made in that particular episode was talking about your five year window or trying to make sure you make it within a five to seven year financial period because a lot of things change.

You know, and when I even went back and listened to that episode myself, Episode three, what I discovered, a couple of things stood out to me. And as I'll cover and I'll kind of give you some ideas here in this particular episode, but. It was around June 10th, it was a summer twenty eighteen and the summer twenty eighteen. That's what's so fascinating about these podcasts where you can go back and you talking about that time frame and what was going on definitely in the markets and what you're going to see if I go back and look at even investments and go further back, there's so much change that happens.

So at that particular time in June 10th, twenty eighteen, we had an unemployment rate of about three point nine percent, which was historically low.

It was it was a very unprecedented and it was just super duper low. Right. So now you fast forward. Now, you know, we're looking at, you know, October 4th. Now we're looking at. Seven point nine percent unemployment rate. A lot has changed.

You know, we have the epidemic, the epidemic that's going on. You have a lot of unemployment going on. In fact, if you were to listen to that podcast back then, it would have prepared you for a time such as now, because even when I talk about that podcast, I say, hey, there's a correction coming. I don't know what it is. I don't know how it's going to affect us, but I'm not going to say I predicted a pandemic.

I just know I did not do that. But I did prepare you that an adjustment would need to be made. And so let's look at that scenario. And let's fast forward now and let's talk about the five year window and the reason why I say it's a five year window. I have lots of projects coming up.

I just you know, I pray to my God every day to help me opportunity to get a lot of this stuff out of my head. And I do have a surprise later on that I'll be talking about.

But one of the things I talk about in my book, and I think I have another private podcast that I do with the perfect retirement blueprint that's going to be launching soon.

But one of the things I share is I share, hey, five years out, that's when you should start looking at retirement. And a lot of people say, well, I don't know what, I'm going to retire. Well, prior to that, you need to be able to determine what is your exit. Right. And there's only three exits.

And I talk about that and my book, The Three Retirement Doors. If you don't have that, if you haven't been able to get that e-book from me, reach out to me. Let me know. I'll make sure that you get a copy of that.

But once you determine that you are in fact going to retire, I think it's important for you to know what your actual strategy is going to be five years out. And the reason why you need to know what your strategy is going to be in five years out is because, listen, I just got be in twenty eighteen, right? That was two years ago. Right. So a lot has has happened in two years. The unemployment rate is up four percent.

We went from a historically low to almost historically high period of time due to covid-19. So a lot of things has changed.

And if you look at a five year window, you start making adjustments five years out.

You should be in good position to take advantage of whatever the market gives you.

We have an upcoming election. One of the risks, there's eleven. I think I learned in school that there's eleven risk. I know some of them off the top of my head.

One of the main risk is political risks. So depends on who's going to get elected, whether it be the incumbent or the new entrant into the election that has a fluctuation and that has an effect on your stocks and or your retirement plans. Whether they be beneficial or not beneficial, it really depends on who gets elected, really depends on their policies. So that's a risk you have to look at as well when you're getting ready to retire.

But going back to the five year window, and the reason why I said the five year window is important is because a lot can happen in that window. I gave you a two year span and look what happened. We went from having the best row, robust economy in history to having one of the worst in less than two years.

So what I like to do with my clients and the people that join the perfect retirement blueprint is I always have them put together a retirement retirement policy statement.

And so what that means is when I'm in my right mind, as I'm preparing for retirement, as I'm preparing for, as I'm preparing my mindset. Right. Because a lot goes into preparing for retirement, a lot of people think you can just roll out of bed. This is all I'm going to retire next week. Right. And this is all I just want to get to a certain age and retire. It's a lot more to it than that.

You just don't roll out of bed and say, hey, I'm going to retire.

And I think the earlier you start, that five year window gives you time to think every single thing through. Right. You have to know, OK, where am I going to spend my later years? Right. Do you have any kids? Do you have a daughter? Do you have a son? Do you have two daughters. You have two sons. And that's more important than you really think. And the reason why I know is with clients for over twenty years I noticed I'm not going to say this and make this blanket statement.

It's just what I've noticed. I do notice those that have daughters and tended to be close have a close knit family, even very close to their kids.

They could even be close to the sons, but the daughters have a tendency to make sure that mom and dad are going to be fine or they're going to make sure that they get the necessary care that they need. Sons, on the other hand, the sons or they're not emotional. Right? They're not, you know, not thinking about mom and dad at that age, at that level. Right. You know, once a man, twice a child, a son is not thinking about changing his his parents diapers and things that they're just not thinking about that.

And I did before I get all these emails and people saying, hey, that's not right for you to say that.

That is what I have seen. The sons are like, yeah, I I'll pay for that problem for me. I don't want to do it. I'll pay for that problem. I'll try to find a way to pay someone to do that for me, where as a daughter would say, hey, you know, that's my mom, that's my dad, I'm going to make sure that I'm I'm there to help them. If I can. I'm going to put myself in a position to be able to do that myself to to make sure that they're taken care of.

And that's just the way I've seen it unfold.

So with that being said, so don't write me.

Just say, hey, you know, what he's noticed is he saw a higher percentage of the of the of the of the female children taking care of their parents more than he has the male children. Just take that as a factual for my own world. Right.

And you can do your own study. You can check with your own friends. You can check with your own family, or you can even go back and look into it. They did such and such. Take care, Grandma. Take care, Granddad. And you would start coming to this conclusion. So that's one of my points. And I don't want to get I don't want to get pulled into that direction and digress.

What I want you to do is I want you to think all of those things through. Right.

If you think all of those things through, what you're going to determine is that some major decision you have to make? Do I want to be next to my grandkids? Do I want to be next to my kids? Right. And those are all the things that you should be planning for. Do not base your retirement on an age on a no.

Right. That's true. That's a factor for a pension part of your pension maximization formula or part of your pension thought. And hey, if I work here for twenty one years, I'll get an additional two percent, or if I work here for additional three years, I'll get an additional. No, you're how your lifestyle is going to be is going to help you determine some of your steps.

But if you have to be start thinking about it in a five year window, five year window gives you time.

You can I can assure you, based on what I do with the retirement policy statements that I put together for my clients, we already start scoping it out. Right. We already say, OK, and our first year, these are the things we're going to start looking at. Right. And again, we're five years out. Hey, let's start looking at this. Let's start positioning ourselves for this. Right.

One of the things that we also put into retirement policy statement is debt, our debt management. Let's eliminate as much debt. And I've said that I don't know which I don't know which episode I said that in.

And maybe I even said it on one of my other podcasts. I do have another podcast, a finance evangelist's. I talk about debt a lot on that podcast because just I talk about all the areas that I'm an expert in. And that particular podcast, the Financial Evangelists, this particular podcast is for retirement only. But I talk about debt management moving into retirement because it's it's important, right? It's your biggest expense going into retirement. So we we start looking on our debt retirement plan as we go.

And that's part of our retirement policy statement. When we're moving into retirement, we need to get that thing. We need to have that small as possible. Right. Because the last thing you want to be worried about is debt. Right. Because you already got to worry about medical expenses. Right. And those of you who've never retired and those who plan to retire, I've worked with people who went from working into retirement.

And I've noticed in the conversations with different it's now I've got to see if I can afford Part D, Part C, D, all these different medical and medical medical rules and stipulations change every year.

Right? It depends on who's in Congress. It depends on who's in office. It depends on what party controls the House. All of these things come into effect. The last thing you want is to be trying to manage debt and manage those decisions as well. Short story for you.

I was talking to my my mom the other day, and she's like, hey, you know, you know, your dad's he's with the VA. And, you know, the VA had been doing this. They have been covering this for X amount of years. And I said, well, yeah, that's good.

And she says, yeah, well, they don't cover it anymore. Like, so what does that what does that mean? Because I learned a lot from my parents and dealing with their situation. So I learn a lot from my parents. I learn a lot from my clients. And a lot of people say, well, you're not retired yet. No, I don't actually, honestly and I've had this discussion, I don't know if I'm ever going to retire.

I love what I'm doing. I love helping people. I love turning on the lights, which is for people when it comes to finance. So, no, I don't know that I ever retire. Enjoy doing it. I'm doing my wife has already made it plain and clear and simple to me that she will retire and she plans to retire. I told her, I said, well, OK, that's fine.

But what I'm learning from my clients and or my parents is things change. Like every year it's like, hey, they no longer cover this benefit. Well, this is a medication that he's been getting for the last ten or 15 years. It helps him with this. This is swelling. That's not swelling. This is happening. This is not happening.

You know, those things start to break down as you get older. And she says, well, they don't cover it anymore. I said to give you a reason or rhyme or reason or not, she says, no, they just they just don't cover it anymore. And I was like, So you don't have no no reason.

You just received a letter in the mail and that's what happens. This is what turned retirement plans upside down. So all the planning you could do. Right. And then you go into retirement, you're on a fixed income, and then they come and says, oh, well, we were covering you here, right. Lord forbid the business that you were working for and our company and our corporation you were working for goes out of business. Right. So what happens to all the benefits and or things that you once had?

Will that change right?

Or will it be like Kodak and hey, you retired today and then they come back and tell you, hey, we have to cut your retirement in half. Right? You like what do you mean? You're Kodak. You're one of the largest companies in the world, is it? Yeah. Well, you know, they came out with a smartphone, right. So we're not Kodak of old anymore. We're Kodak of bankrupt and our cannot pay our pensions, you know, so those those types of things you need to be thinking.

And that's why we put in our retirement policy statement. We put a we put in parameters for our debt management. We want that to be a certain percentage of our income moving into retirement.

And one of the things that I've started working with in one of my companies that I that I work with young people on and managing their debt and trying to stay away from things that they can't afford, we often talk about, you know, moving to a 15 year mortgage rate and it's easier to do with a obviously a younger couple, but it's something that should be taken into consideration with all ages.

That was really the mortgage they say is a mortgage. That word, if I'm not mistaken, I think it means death sentence in Latin or something like that, something really weird. But I think it means death sentence. I'd have to look that up. I know I heard that and I did not seen it. And I know a lot of the the the fundamental rules of of the legalities come from Latin. And I want to say that means death sentence.

So you sign a 30 year mortgage. That's pretty much what it is, because for one, you're not going to be on a job for thirty years.

You're just not so moving to a fifteen year mortgage. I've moved a couple of clients over and they're thanking me so much right now. And I'm like, hey, it's not that much more, but it gets you in. Move your mortgage a lot faster because you have more going to the principal than you do to the to the interest in thirty year mortgages are really designed just to collect interest banks.

No, they're they're not going to collect on a 30 year mortgage. Well, I'll have to talk about that. You have to listen to that talk on my financial evangelist podcast. It's the financial evangelist dot com. You can find it there or you can find it at most of iTunes and most of your outlets. I think I'm even on Amazon now, but I get into some of the debt strategies and some of this debt management. But listen, I don't want to digress and make this podcast about debt.

What I really want to make it about is just our planning and and planning in that five year window. And in that five year window, those are just some of the things you need to be considering. Those are some of the things you need to be doing. One of them is their debt management. Another is making adjustments and locking in your gains. So back in twenty eighteen, I want to say episode three was around June 10th.

I already told people to start locking in their gains. I told them back then, I said, listen, we are not going to have this robust economy forever. It just have to correct. It's just the nature of the beast, right? Just to control inflation, to avoid people from paying eight dollars for a loaf of bread. They have to the markets had to correct. Unfortunately, it was the covid-19 that did. That's the unfortunate part about covid-19.

And as I said, even when I I talked about when covid-19 first happened and I gave one of my my podcast, I told you it would get a lot worse before it got a lot better.

And so now news is coming out that nearly, I don't know, seven in 10 businesses that close will no longer open ever again because the the weight of the the closure had so much impact on their business that they can no longer open. Right. And a lot of that probably had to do with debt. They're carrying so much debt on the books that they could never recover. Right. And so that's a whole other story. I do want to tell you that that's a very important play.

Definitely should belong in your five year window. And if I were you and if I have an investment adviser, if I have a financial planner, if I have a retirement planner, I definitely make sure that I incorporate in my retirement policy statement, we put together a five year plan. Be very detailed. Take your time right when you're putting together a living trust, the same amount of time you would take to put it together. Living trust, which I recommend for everyone, is you take that same amount of time to put together your retirement policy statement with a five year window.

Right. It's easy to do when you're not retired.

So all the preparation when it comes to retirement planning is easier to do when you don't have the pressure of a window, right?

Oh, I said I retire by sixty. Right. Well, I'm already fifty seven, you know, and I only have or I'm already fifty eight and I'll have two years to put together a plan versus. Hey, let me start considering that now in the best way to start doing that is to pull out a piece of paper or pull up a word document or something like that and just start drafting something right. And say hey, you're one. I wanted to kind of look like this year, too.

I want to look like that. And this is five years out.

You count it backwards and you start at year five and you go backwards, hey, you're five.

I want this to happen going in your four. I want this to happen. And as you start putting together unfortunate events may happen, you know, there may be a loss of a spouse or anything of that nature. Again, I. I talk and I keep it real on getting to your retirement because these are things that happen. What are your investments. Right.

When you get to the retirement office and says, hey, do you want an annuity that would pay for you and your spouse as long as they live, as long as you both live, all these annuity type of decisions, all of these things should be thought of and talked about in your five year window.

What are we going to do? Are we going to move? Are we going to stay where we currently are?

Is this a retirement friendly state?

All of those things should be considered in your five year window, in your retirement policy statement. Those are the things I talk about in the perfect retirement blueprint that's coming out. I've been working on that. It is the perfect retirement blueprint, covers everything. And that's what's taking so long. As soon as I think I'm done is is hey, I'm going to wrap this up. There's other contents I want to add to it. So I think what I'm to do is a start wrapping it up and put some different versions on it.

Version one, version two. I'll put some some bonus material in there for, like, you know, covid-19 or some different things like that are happening. But everybody's been clamoring to get this in their hands. I'm going to try to finish it up, but I talk about all these things. So what I wanted to give you in this podcast again, episode twenty two, I just wanted to tell you that your five year window is most the most important thing you should be working on right now inside your five year plan.

You should have a retirement policy statement.

Very, very, very key.

Didn't did not want to hold you long. Follow me. There's things I have coming out. Follow me on Facebook, follow me on Twitter, follow my other podcast. I love doing this. I love educating. I'm doing all the reading for you so you don't have to read. And one of the things I wanted to announce and what I said I was going to share was I'm going to start having a segment on getting to your retirement exit.

I'm going to start bringing on guest and I'm going to actually interview and we're going to walk through their retirement plans and at the end, exchange for them sharing their information, not detailed information, but in exchange for them sharing their information, I'm going to be putting together free retirement plan for them, which is probably around a six hundred dollar value they're going to be getting for free in exchange for us to be able to to discuss some of the decision making that they had to do to put their retirement plan together.

So look for that. Retirement can still happen. You'll probably find a link. If you want to sign up for that, you'll find a link there. Retirement can still happen. Dotcom, you're going to find a link. If you want to participate in that, submit your information. We'll give you a call. We'll talk about we'll talk about it. And again, just so you know, it doesn't get into any personal details right now.

I'm going to talk about your social not going to talk about any hard amount's. Right. Not going to talk about anything that would embarrass you. We're going to talk about some of the educational aspects of putting together a real retirement plan in front of the world. Right. And I think that's very key.

I can tell you all day long about my clients.

I never tell you their names. Obviously, that's just the way it is. But in this particular case, we're going to actually interview we're going to actually interview some of my guests that want to be on the radio station, don't want to be on the podcast.

In exchange, they're going to share and let you into their world a little bit and some of the thought processes so that you won't see that you're out there alone. Oh, I always thought that, too. Right. And so that's something we're going to do.

Look for a link on getting to your. Well, look on it. Look for a link. And getting to your retirement exit will have something in my retirement exit. We will have and we will have. We will also have a link on retirement. Can still happen, Dotcom, for you to participate. If you want to take advantage of that as well. I may put a link on retirement chat dotcom maybe, but that's more for clients.

They want to just have a quick conversation about some chat ideas. They can link up with me. They're a retirement chat, dotcom. It's more for conversation at some decision making that they need to make. So we may put a link there, but for definitely we will have a link at retirement can still happen dot com for you to participate in fixing your retirement plan or helping you with your retirement strategy. So that's something I want to be able to offer and I'm excited that I'll be able to start doing that.

And I have, you know, six or seven volunteers right now. So we'll start getting into that and I'll have them on the air and we'll be discussing that. So, again, Jenny Jones, getting to your retirement exit. I want to thank you today for joining me on this episode where we're talking about five years out. We're going to dive a little bit deeper into this conversation. But I wanted to thank you again. I hope all is going well.

Take care.

Be safe. Bye bye.