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68. Retirement Is Not One Path: Five Models for Modern Retirement Planning with Adam Van Deusen · Planning & Beyond® - Where financial planning meets human understanding

• 0:00
  SPEAKER_00: A lot of clients might be in this default mode of being on this traditional retirement path without perhaps thinking through it.
• 0:08
  SPEAKER_00: So I think advisors really have the opportunity to create a true transformational moment for their clients by introducing these concepts, you know, sort of when and where appropriate for their given situation.
• 0:20
  SPEAKER_00: Because while there's uh plenty of planning opportunities within them, just the idea, and I think you mentioned this stress relief before that maybe I could retire earlier than I expected.
• 0:29
  SPEAKER_00: Maybe I could have additional time in my 30s, 40s, 50s to pursue these goals that I've wanted to do is really a transformational and perhaps life-changing moment for the clients.
• 0:40
  SPEAKER_01: Welcome to Planning and Beyond, the show where financial planning meets human understanding.
• 0:46
  SPEAKER_01: As an exceptional financial advisor, you know that financial planning is about more than just numbers.
• 0:52
  SPEAKER_01: It's about giving clients the clarity they need to align their money with what matters most.
• 0:58
  SPEAKER_01: Which is why each episode is designed with that goal in mind.
• 1:02
  SPEAKER_01: You'll learn how to uncover the psychology behind client decisions and gain insights and behavioral strategies needed to create deeper, more meaningful client relationships.
• 1:12
  SPEAKER_01: You'll discover techniques for navigating emotional client situations drawn from conversations with leading industry experts in behavioral finance, psychology, communication, and more.
• 1:24
  SPEAKER_01: Whether it's mastering discovery meetings, handling sensitive client conversations, or understanding what is truly keeping your client stuck, you'll walk away with not only strategies that you can use in your next client meeting, but also the confidence to do so.
• 1:39
  SPEAKER_01: Oh yeah, hi.
• 1:40
  SPEAKER_01: I should probably introduce myself.
• 1:42
  SPEAKER_01: I'm your host, Ashley Kwame, a therapist who somehow wandered into the world of financial behavior and kind of decided to stay.
• 1:51
  SPEAKER_01: My mission is to help you bridge the gap between financial planning and human understanding.
• 1:57
  SPEAKER_01: Because remember, finances don't have feelings, but your clients do.
• 2:00
  SPEAKER_01: Let's dive in.
• 2:03
  SPEAKER_01: Welcome to Planning and Beyond, the podcast where financial planning meets human understanding.
• 2:08
  SPEAKER_01: I'm your host, and today I'm joined by my new friend, Adam Van Dusen, financial planning nerd at the kids.com platform.
• 2:17
  SPEAKER_01: My first like Kits's team member.
• 2:19
  SPEAKER_01: I was I was sharing Adam with you.
• 2:20
  SPEAKER_01: You're my first one.
• 2:21
  SPEAKER_01: I don't count Meg.
• 2:22
  SPEAKER_01: Hopefully she's not listening, but I don't count Meg, but you're my first one.
• 2:25
  SPEAKER_01: Welcome.
• 2:26
  SPEAKER_00: Terrific.
• 2:26
  SPEAKER_00: Thank you so much for having me, Ashley.
• 2:28
  SPEAKER_00: Really excited.
• 2:29
  SPEAKER_01: Yeah, yeah.
• 2:30
  SPEAKER_01: I am really excited too about the conversation we're going to be having.
• 2:33
  SPEAKER_01: So for those of you listening, I read an article recently about the work that Adam is doing.
• 2:39
  SPEAKER_01: And it was on retirement and on the different types, five types of retirement.
• 2:43
  SPEAKER_01: And this article is just really great.
• 2:44
  SPEAKER_01: And it landed on me in such a way that it just resonated with conversations that I was having with clients, even conversations with advisors and training.
• 2:53
  SPEAKER_01: And so, Adam, you know, you put this article out here.
• 2:56
  SPEAKER_01: And I was like, oh, it was like instantly like, I have to have you on the show to talk about this.
• 3:02
  SPEAKER_01: So thank you for being agreeable.
• 3:04
  SPEAKER_01: Thank you for coming on today and jumping into all the nerdy stuff that we're going to be talking about around the five different types of retirement.
• 3:11
  SPEAKER_00: Yeah, no, I love it.
• 3:13
  SPEAKER_00: Yeah, let's dig in.
• 3:14
  SPEAKER_01: Yeah.
• 3:14
  SPEAKER_01: Okay.
• 3:15
  SPEAKER_01: So I'd love to hear maybe, and for those of you that aren't familiar with the article, we'll link that in the show notes.
• 3:21
  SPEAKER_01: And you do not have to go and read the article as a prerequisite to listening to this.
• 3:24
  SPEAKER_01: But this article, you know, I've kind of briefly shared talking about the five different types of retirement and a lot more there.
• 3:30
  SPEAKER_01: But I would love maybe, Adam, can we just start with like what drew you to like writing this or wanting to explore even a bit more deeply around not just retirement like singularly, but like how can we really expand like that definition and evolve it a bit more to present times and really what advisors are really seeing and working with?
• 3:53
  SPEAKER_00: Yeah, I think advisors are always looking for new ways to add value for their clients.
• 3:58
  SPEAKER_00: And there's so many things that advisors do from everything from tax planning, retirement, estate planning, you know, behavioral coaching, and then more broadly, helping them live their best lives.
• 4:08
  SPEAKER_00: And you know, I think retirement is such this major milestone for folks.
• 4:12
  SPEAKER_00: And of course, a very frequent type of client that advisors work with is the person who's maybe on the cusp of retirement or even, you know, further out, have many more years left in their career.
• 4:22
  SPEAKER_00: So it's really a transformational moment for the clients and a potential opportunity in my mind for advisors to help their clients perhaps identify opportunities that they might not have considered before, something that could, you know, not just affect their retirements, the, let's say, after 65 time, but also the years leading up to it as well.
• 4:43
  SPEAKER_01: Yeah, absolutely.
• 4:44
  SPEAKER_01: And so something that I talk about with clients actually is that, you know, retirement is really like this made-up social construct.
• 4:51
  SPEAKER_01: Like we just kind of as a society, like just made made this up.
• 4:56
  SPEAKER_01: And, you know, in your article, like I remember you talking about kind of tracing, you know, some of the retirement history there.
• 5:03
  SPEAKER_01: I'd love to hear maybe you just kind of talk about this and maybe what surprised you most like in that history and how like for an advisor, maybe knowing some of that can change the way that they open up a retirement conversation.
• 5:16
  SPEAKER_00: Yeah, the the history of retirement, you know, the going working full-time until age 65 and then leaving the workforce completely, you know, that wasn't a thing in the 1700s, 1600s.
• 5:27
  SPEAKER_00: This isn't the, you know, sort of history of humans, as it were.
• 5:30
  SPEAKER_00: It really is a much more recent phenomenon.
• 5:32
  SPEAKER_00: You know, looking at the data, if you're looking in the late 1800s, early 1900s, basically the common path was to work until you were no longer physically able to, at which point, you know, retirement, you might have gone into that at that point, was really a period of convalescence, you know, sort of managing your body and no longer able to work.
• 5:51
  SPEAKER_00: Maybe you're living with family.
• 5:53
  SPEAKER_00: And, you know, that's changed over time as you got into the 1900s.
• 5:57
  SPEAKER_00: So, you know, as uh factories were being created and, you know, moving from maybe more agrarian economy to more manufacturing, you had workers who, as they were aging, might not have been able to physically handle the labor that they were doing when they were younger.
• 6:12
  SPEAKER_00: And so uh some of the uh factory owners and things like that saw this as a potential issue and you know had the ideas as, hey, why don't we offer the workers an off-ramp here?
• 6:23
  SPEAKER_00: It'll be sort of a win-win situation.
• 6:25
  SPEAKER_00: We'll provide them with a financial pension, which allows them to uh get by financially in their older age.
• 6:31
  SPEAKER_00: And meanwhile, we can sort of refresh them with younger workers who might be a little bit more efficient.
• 6:36
  SPEAKER_00: So that's where this sort of got kicked off.
• 6:38
  SPEAKER_00: And over time it's changed.
• 6:39
  SPEAKER_00: You know, middle of the century, you have the introduction of social security.
• 6:42
  SPEAKER_00: Now the government is stepping in in addition to private companies for supporting individuals financially in older age.
• 6:48
  SPEAKER_00: And, you know, over time you had the growth in these uh defined benefit pensions from the companies, though in recent decades that's gone on to decline.
• 6:56
  SPEAKER_00: But this idea is, you know, maybe a hundred years old, let's say, of you're gonna work full-time for a long time until you're gonna make this sort of sudden break with it, and then hopefully have resources to support you in your remaining years.
• 7:08
  SPEAKER_01: Yeah.
• 7:09
  SPEAKER_01: And, you know, one of the things that we hear or that I've started to see too, is that, you know, you talked about kind of this age, this magical age of 65, right?
• 7:17
  SPEAKER_01: And it's this anchor, I think, that people have in mind.
• 7:20
  SPEAKER_01: And like we have, you know, I feel like in all of our like messaging and like branding and everything, like perpetuated that 65 is like the retirement age anchor.
• 7:30
  SPEAKER_01: And at least where I've started to see some struggle with that is that many clients now are they're choosing a different like path or a different age, or retirement can come sooner, or they've accumulated wealth to where they don't have to wait for 65.
• 7:46
  SPEAKER_01: But then there's still this like almost internal tension or judgment or like guilt or shame.
• 7:52
  SPEAKER_01: Like, should I?
• 7:54
  SPEAKER_01: And so I like would be curious to hear from you.
• 7:58
  SPEAKER_01: Like, why do you think that default of like kind of 65 maybe is really sticky?
• 8:03
  SPEAKER_01: And what have you seen that shifts for clients, like when they can choose kind of that retirement age?
• 8:11
  SPEAKER_00: Yeah, retirement planning is so tricky, especially for individuals doing it on their own, because there are so many factors involved.
• 8:17
  SPEAKER_00: You don't know what your health is going to be, your interests are gonna be, whether you're gonna be able to work at the same company for that long.
• 8:23
  SPEAKER_00: And of course, there's the challenge of determining whether you've accumulated sufficient uh assets and income streams to support you in retirement.
• 8:30
  SPEAKER_00: So I think in that environment, it's sort of natural to look for sort of anchor points, whether it's social security based, maybe thinking about the minimum retirement age at 62, full retirement age, say 67, maximum benefit at age 70, sort of, I think the popular culture idea of 65 being sort of a natural place, that that sort of becomes an anchor and very easy to assume that that's what everyone else is doing.
• 8:53
  SPEAKER_00: And this is the path I'll take.
• 8:55
  SPEAKER_00: I'll work full-time.
• 8:56
  SPEAKER_00: And I should say too, you know, over the years, there's been a heavy marketing push about imagining this time of retirement, where in starting in the 1950s, it really did transition as being marketed as a time to enjoy and thrive after a long career.
• 9:10
  SPEAKER_00: So you had some of the communities that popped up, the 55 and upper retirement communities, Sun City in Arizona and other places.
• 9:17
  SPEAKER_00: And of course, now they're much more popular.
• 9:19
  SPEAKER_00: At the same time, you also had financial companies promoting this, saying, hey, if you're gonna have this enjoyable retirement, you're gonna want some extra savings in addition to whatever social security and pensions um you've had.
• 9:29
  SPEAKER_00: So come and invest with us.
• 9:31
  SPEAKER_00: You know, thinking back to the 50s and 60s.
• 9:33
  SPEAKER_00: So, you know, I think it's a combination of factors that drive people to sort of this target.
• 9:38
  SPEAKER_00: And of course, people have busy lives as well.
• 9:40
  SPEAKER_00: So it's, I think they might people might not have a chance to sort of step back and think, is this the optimal path for me?
• 9:46
  SPEAKER_00: And they might not be considering other choices that could be available to them depending on their circumstances.
• 9:52
  SPEAKER_01: Well, and you know, you and Michael talked about this too, and kind of that follow-up like conversation, you know, post-article.
• 9:59
  SPEAKER_01: I can't remember what you guys are calling this, but I say it's like a post-podcast interview conversation, like after the Kitz's article that you guys have been doing.
• 10:07
  SPEAKER_00: Oh, yes, it's the financial advisor technician podcast that we started.
• 10:10
  SPEAKER_00: Okay, yes.
• 10:11
  SPEAKER_01: Thank you for clarifying that.
• 10:13
  SPEAKER_01: In my mind, it's just the post-article like conversation that I want to go and find and listen to.
• 10:19
  SPEAKER_01: And one of the points that you guys, you know, mentioned, and this is something that from a psychological standpoint that we talk about like with clients is this idea of how important it is to be talking about retiring to something versus retiring from something.
• 10:36
  SPEAKER_01: You know, clients that can retire to something else, they tend to make that transition easier, right?
• 10:44
  SPEAKER_01: There's not as many, I'll say psychological hurdles, barriers there versus, you know, the grief aspect of retiring from something can be really heavy.
• 10:54
  SPEAKER_01: And I'd love to maybe just kind of ask like how advisors can listen for maybe are there any like verbal kind of cues or indicators or statements maybe that, you know, they can be listening for really as like a distinction point between, you know, kind of maybe one path towards retirement versus maybe like another.
• 11:13
  SPEAKER_00: Yeah, I think there's a few different things that are out there.
• 11:15
  SPEAKER_00: You might have a client who's still in their working age and they talk about a dream job they've always had.
• 11:21
  SPEAKER_00: They're working in one profession now and they'd love to career change into this other field, but they know that this other field would be lower paying, let's say they'd have to take a pay cut to it.
• 11:31
  SPEAKER_00: So they've just never made the leap to doing it because they didn't think they could afford to.
• 11:36
  SPEAKER_00: Well, that's a potentially powerful moment.
• 11:38
  SPEAKER_00: And we'll talk about the idea of Coast Fire perhaps later on.
• 11:41
  SPEAKER_00: But the idea here is it's very possible that this individual has saved enough assets that maybe they don't need to save for retirement anymore.
• 11:49
  SPEAKER_00: And the salary they could make in this position is would be sufficient for them.
• 11:52
  SPEAKER_00: So I think that's one area.
• 11:54
  SPEAKER_00: Maybe there's someone who says, you know, I've just been hard charging in my career the last 20 years.
• 12:00
  SPEAKER_00: I've barely had a week's vacation.
• 12:02
  SPEAKER_00: And just I have this dream of taking, you know, three months, six months, whatever it is, and I want to go to cooking school in Italy.
• 12:09
  SPEAKER_00: I want to go backpacking while I'm still physically able to do so.
• 12:14
  SPEAKER_00: So that's an opening right there to talk and again, we might talk about this: the idea of taking a sabbatical or regular sabbaticals over the course of your career.
• 12:22
  SPEAKER_00: Or perhaps someone else mentions, you know, they've had the experience and maybe they had friends who passed away early, things like that.
• 12:29
  SPEAKER_00: Maybe who someone who passed away recently after retiring at 65, and they say, you know, I uh have health concerns, I don't want that to be me.
• 12:37
  SPEAKER_00: I'd really like to think about retiring earlier than 65.
• 12:40
  SPEAKER_00: You know, that's an easy entry point to bringing up the conversation of an early retirement or a semi-retirement, which we can talk about as well.
• 12:47
  SPEAKER_00: So yeah, I think that's a great point that there are a lot of cues that could come up, even without the advisor intentionally asking, which they could as well, in terms of what, you know, if there were no boundaries, what would your you know dream retirement look like?
• 13:01
  SPEAKER_00: What would you want to do over the course of your rest of your career as well?
• 13:04
  SPEAKER_00: A lot of cues that you could get that could uh start this conversation off.
• 13:08
  SPEAKER_01: So let's go and dive into really these five, these five types, because you know, you've kind of you've walked us there, you've done the hard part for me there of transitioning us into.
• 13:18
  SPEAKER_01: So, Adam, walk through maybe these five types.
• 13:21
  SPEAKER_01: You've mentioned kind of three here.
• 13:22
  SPEAKER_01: Let's walk through maybe each one of those.
• 13:24
  SPEAKER_01: And I don't know, it might be helpful just to give like maybe high-level just kind of definition there, kind of for each one, because some of this might be new language or the way in which you're thinking about it and working about it, working with clients might be a bit different than how you've described it.
• 13:39
  SPEAKER_00: Yeah.
• 13:40
  SPEAKER_00: So I mean, I think the first one would be what we've been talking about, sort of this traditional retirement model that you're gonna work full-time, perhaps sometime into your mid-60s, and then you're gonna do a full transition into retired, uh no full-time working life.
• 13:54
  SPEAKER_00: And I think this one is important to acknowledge, A, because that's the path a lot of people on.
• 13:59
  SPEAKER_00: It's definitely worked for a lot of people.
• 14:01
  SPEAKER_00: But even if someone is on that path, I think, you know, raising the awareness that their opinions might change over time or they might be forced into something different.
• 14:10
  SPEAKER_00: You know, a lot of people end up having to retire maybe earlier than expected because of a health issue or, you know, loss of a job, downsizing at their company.
• 14:18
  SPEAKER_00: So even if someone does want to be on this path, talking about, hey, what might it look like if you end up wanting to or need to retire earlier could be a really constructive conversation there.
• 14:29
  SPEAKER_00: So definitely, you know, starting things off with that.
• 14:32
  SPEAKER_00: The second type that I might mention that folks might be familiar with is just the idea of an early retirement.
• 14:37
  SPEAKER_00: So instead of working until let's say your mid-60s, we're gonna retire earlier.
• 14:42
  SPEAKER_00: Perhaps it's at 60, perhaps it's at 55, or perhaps even earlier.
• 14:46
  SPEAKER_00: Uh, many folks might have heard of the fire movement, financial independence, retire early.
• 14:51
  SPEAKER_00: Now, there are two pieces of that.
• 14:52
  SPEAKER_00: There's sort of the financial independence, which to my mind is you have the full range of options available to you.
• 14:58
  SPEAKER_00: Maybe you continue to work, work at a different job.
• 15:01
  SPEAKER_00: And then, of course, there's the retire early, whereas you might retire as early as your 40s or even earlier for some folks.
• 15:07
  SPEAKER_00: So, you know, the idea here is that you want to enjoy the benefits of retirement, a full-time retirement, being able to travel wherever you want.
• 15:16
  SPEAKER_00: You know, you wake up on Monday with no commute to do to the office, but bringing that earlier in your life when you might be healthy, you might have different sorts of options available to you, having more years ahead of you to enjoy these plans that hopefully you've made in advance to have a sort of an idea of what you're retiring to, as it were.
• 15:35
  SPEAKER_00: So I think this could be attractive for a lot of folks.
• 15:37
  SPEAKER_00: Now, of course, there's the technical element of this.
• 15:39
  SPEAKER_00: You have to have sufficient savings to do it.
• 15:41
  SPEAKER_00: And that's a two-way street, both in terms of the assets that you've saved up and the expenses that you had.
• 15:46
  SPEAKER_00: And of course, something that financial advisors are well positioned to help their clients analyze.
• 15:51
  SPEAKER_00: And other factors, as you consider things like health insurance, uh coverage between from when you're working to your uh Medicare eligible, for example, lots of technical elements.
• 16:01
  SPEAKER_00: But from, I would say that the qualitative side here is someone that says, hey, you know, I've saved sufficiently.
• 16:06
  SPEAKER_00: I'd like to get the benefits of retirement uh earlier.
• 16:10
  SPEAKER_01: Yeah.
• 16:11
  SPEAKER_01: And let's go into maybe some of these other ones that you've mentioned here.
• 16:15
  SPEAKER_01: You talked about sabbatical and about coast.
• 16:17
  SPEAKER_01: Let's maybe dive into those a bit.
• 16:20
  SPEAKER_00: Yeah.
• 16:20
  SPEAKER_00: So, you know, one of the potential tricky parts of a full retirement is it can require a lot of assets to be able to do because you're lengthening that retirement period out.
• 16:29
  SPEAKER_00: You know, maybe a standard retiree you're planning for 30 years.
• 16:32
  SPEAKER_00: Now you're planning for 35, 40, 45, or even more years.
• 16:35
  SPEAKER_00: That can require a lot of assets to feel confident in them sustaining you.
• 16:40
  SPEAKER_00: So, you know, let's say you want to get some of those benefits for retirement earlier in your career.
• 16:44
  SPEAKER_00: Maybe something like a sabbatical could be attractive.
• 16:47
  SPEAKER_00: So this could be anything from one month, three months, six months, a year, or even more, where you want to take advantage of that time in your 30s, 40s, 50s, you're still physically active to take an opportunity you've always wanted to do.
• 17:02
  SPEAKER_00: Maybe it's backpacking through Europe.
• 17:03
  SPEAKER_00: Like I said, maybe it's taking a course, learning something new, living in a different part of the country or in another country, perhaps.
• 17:11
  SPEAKER_00: All these things that you can do.
• 17:12
  SPEAKER_00: And this is a really flexible opportunity because, again, you're not totally shutting off full-time employment.
• 17:17
  SPEAKER_00: In fact, you're planning to go back to full-time employment.
• 17:20
  SPEAKER_00: So while it can be a situation that needs to be planned for financially, and perhaps in association with an advisor in terms of how are you going to cover the period without income coming in, uh, how confident are you that you're going to be able to continue in your job, especially if it's a longer-term sabbatical afterwards, as well as making up savings, lost savings opportunities since you're not bringing in income during that period.
• 17:42
  SPEAKER_00: So definitely some technical elements to hear, but also really a terrific opportunity and something that can be planned for for people who want that extended time away from the workforce without leaving it completely.
• 17:55
  SPEAKER_01: The sabbatical is one of the things that kind of I feel like my dog like would have to like I'm reading your article, if you can envision this.
• 18:03
  SPEAKER_01: And like I read sabbatic and I went, huh?
• 18:06
  SPEAKER_01: Like the, you know, kind of like confused, but like that's interesting.
• 18:10
  SPEAKER_01: And I hadn't thought about that way.
• 18:11
  SPEAKER_01: But sabbatical has come up time and time again just in our conversations, my conversations, like with clients.
• 18:17
  SPEAKER_01: And for those of you that are listening, we had Katie North on episode 47 to talk about just how to conversationally like structure, you know, your meetings with clients who are interested in a sabbatical.
• 18:30
  SPEAKER_01: And I think that that's a really interesting one that many, I'll say clients and probably even financial advisors don't think about as an option, but can provide a lot of physical, emotional, like mental just benefit there.
• 18:47
  SPEAKER_01: And so I was really happy to hear and see like you talking about this as sort of kind of an alternative like retirement strategy, right?
• 18:56
  SPEAKER_01: For how can we do this?
• 18:57
  SPEAKER_01: And it doesn't have to be, you know, I guess maybe we didn't name this at the beginning, but one of the myths that I kind of had before I crossed over to the dark side and working in financial services is like hearing retirement made me think like kind of one and done.
• 19:12
  SPEAKER_01: Like once you were done, like working, like that was it.
• 19:15
  SPEAKER_01: Like this whole like you take time off, you retire, and then you maybe go back later, like to work.
• 19:22
  SPEAKER_01: Like I just didn't, I'm like, well, that's not retirement.
• 19:24
  SPEAKER_01: That's just like taking a break.
• 19:25
  SPEAKER_01: But it it really can be.
• 19:27
  SPEAKER_01: And language I think matters here.
• 19:28
  SPEAKER_01: And, you know, talking about things like a sabbatical or just even semi-retirement, but a break right from work.
• 19:35
  SPEAKER_01: I think the language part is really important for advisors to be aware of, but also, you know, for clients too, like how can we or what language or wording would they want to use and how to call this gap?
• 19:46
  SPEAKER_00: Yeah.
• 19:46
  SPEAKER_00: And I really like how you affiliated that with sort of the traditional retirement, because one way you could think of this, let's say you take an extended sabbatical a year and you know, the income you're not making and the savings you're not making, let's say that ends up pushing your eventual full retirement out by a year.
• 20:00
  SPEAKER_00: So you can sort of frame it in that way is like, hey, do you want to pull one of those years later on earlier here?
• 20:07
  SPEAKER_00: In some ways that could be attractive.
• 20:08
  SPEAKER_00: It's sort of um, you know, a guaranteed year where you're getting that retirement enjoyment because you don't know what might be coming 10 years, 20 years down the line.
• 20:16
  SPEAKER_00: So one way to sort of again pull that retirement experience forward, especially if there's something that either you have in mind that you really want to do, or if there's sort of a natural inflection point, you know, maybe uh you're between jobs, something like that, where you might have some natural time where you're not, you know, negotiating with the employer to have the time off to be able to come back, for example.
• 20:36
  SPEAKER_01: Yeah, it makes me kind of think of this.
• 20:38
  SPEAKER_01: I we talk about like experiments a lot, like doing small experiments.
• 20:41
  SPEAKER_01: And something like this makes me think of like, how can we stress test this with like outs, but not like scare, you know, as like the practitioner?
• 20:50
  SPEAKER_01: Like, how can we, you know, actually I'd I'd love to know just kind of your thoughts here.
• 20:55
  SPEAKER_01: Like, how can advisors maybe present this like kind of best, worst, or even middle like cases, like around how to experiment with some of these?
• 21:05
  SPEAKER_01: I don't know, without scaring the client or even like without shutting down.
• 21:09
  SPEAKER_01: Like, I'm just thinking about like a client that comes in and they're like, I absolutely like need a break, like I have to, like, I have to do this.
• 21:16
  SPEAKER_01: And they're almost demanding like, how can advisors talk about this?
• 21:20
  SPEAKER_01: How can they maybe model some of it?
• 21:22
  SPEAKER_01: But even conversationally, what can they say to show some of this and stress test it?
• 21:27
  SPEAKER_01: That's such a amount I have to think so thoughtfully when I say stress test, like stress test it without scaring or coming across dismissive.
• 21:36
  SPEAKER_00: Yeah, I think that's a really good point.
• 21:37
  SPEAKER_00: I mean, I think here too is this is gets to the idea of introducing these the retirement conversation earlier and perhaps some of these ideas, because you know, maybe at this point you introduce it to the client, they're feeling good about a job, and then a year later they're at this sort of breaking point, right?
• 21:52
  SPEAKER_00: Where they need to take time off.
• 21:54
  SPEAKER_00: But in the meantime, that you've um, you know, perhaps introduced the concept, perhaps increased their liquid safety.
• 22:00
  SPEAKER_00: So, you know, that's available to cover their uh costs during the sabbatical, in that, and you know, maybe the individual has talked to their employer, like has an idea of whether they can do it, how long they can do it while staying at the employer, or has considered if they're thinking about you know leaving their job for an extended sabbatical, has sort of surveyed the field of job opportunities afterwards to make sure that's there.
• 22:22
  SPEAKER_00: So yeah, and in terms of like communicating and the framing it, it's yeah, this is a flexible, as I think you want to mention this, sort of perhaps lower risk idea, especially if it's shorter if you're staying at the same employer, and that, you know, you're not necessarily tying yourself to a long-term decision like a traditional retirement is.
• 22:38
  SPEAKER_00: You know, of course, you could go back to work eventually, but this is a more sort of intentional approach to it.
• 22:45
  SPEAKER_01: So let's talk maybe then a little bit about couples, because you know, so much of like at least what we've been talking about, not maybe like directly intentionally, but it's kind of more like on the individual.
• 22:56
  SPEAKER_01: But like advisors, they work with couples.
• 22:58
  SPEAKER_01: And I've had scenarios where, you know, one partner is like, maybe they're like, I'm done, like I want to take a year off and I don't want to work.
• 23:07
  SPEAKER_01: It's so work is so stressful.
• 23:08
  SPEAKER_01: I want to, as you kind of said earlier, like I want to pull from kind of that in, you know, and work and take some time off now.
• 23:15
  SPEAKER_01: But maybe the other partner is like, nah, like I'm not comfortable with that.
• 23:19
  SPEAKER_01: Like it makes me anxious.
• 23:20
  SPEAKER_01: I'm really like uneasy, you know, about that.
• 23:23
  SPEAKER_01: Like, how would you suggest or what would you want an advisor to do or say, like in those scenarios when one partner's kind of lighting up about it and the other is, you know, trying not to throw up just from thinking about it.
• 23:37
  SPEAKER_01: Gross, gross comparison, I know.
• 23:39
  SPEAKER_00: But yes.
• 23:40
  SPEAKER_00: And this is a tricky question across several of the um strategies that we're talking about, because it often involves, you know, at least one partner going without income for a certain period, which could in fact their ultimate retirement age, their, you know, their savings rate, everything else in between.
• 23:55
  SPEAKER_00: So again, I might circle back to the idea of if you can tee up these ideas or introduce this sort of alternative retirement conversation early on, you know, maybe you can bubble up folks, um, you know, the different clients' opinions before it comes to the decision point, right?
• 24:10
  SPEAKER_00: You know, all of a sudden you're in a meeting and the one member of the couple sort of blurts out, like, I need a sabbatical right now.
• 24:16
  SPEAKER_00: And it's a big surprise.
• 24:17
  SPEAKER_00: And it could be a surprise for the spouse, even maybe they haven't even brought it up to the spouse before.
• 24:21
  SPEAKER_00: You know, that could be a trickier situation to handle as opposed to, you know, you're saying a couple years in advance, saying, like, hey, I have this alternative career I'm interested in.
• 24:30
  SPEAKER_00: Like, let's talk about what that looks like financially from an advisor.
• 24:33
  SPEAKER_00: That gives you the opportunity to create alternative scenarios, for example, perhaps to show the other partner, like, hey, you're still on a really strong track to meet your other retirement goals, even if your spouse is going to take this path.
• 24:47
  SPEAKER_00: Or perhaps, you know, talk about alternatives for that partner, right?
• 24:51
  SPEAKER_00: So maybe there's one who's interested in taking a sabbatical to pursue education or something like that.
• 24:57
  SPEAKER_00: Whereas the other partner maybe is more interested in what we might talk about next, this coast fire idea, where maybe you can take a lower-paying job into something that's maybe a more interesting field for you.
• 25:09
  SPEAKER_00: So I think by by getting that conversation started early, that you know, both partners' cards on the table, as it were, can sort of prepare both technically from a planning perspective, but both understanding where each partner is coming from and so that they each understand where they're coming from to be able to talk it through over time so that when you're ready to sort of implement one of these strategies, hopefully everybody's on board.
• 25:30
  SPEAKER_01: Right.
• 25:30
  SPEAKER_01: Hopefully, that's always kind of like the finger crossed, like hold your breath kind of moment of like hopefully we're still kind of on all on board and that we get like the head nods, right?
• 25:40
  SPEAKER_01: The bias.
• 25:42
  SPEAKER_01: Yeah.
• 25:42
  SPEAKER_01: So let's talk a little bit about Coastfire then, because you brought that up.
• 25:45
  SPEAKER_01: You mentioned that.
• 25:46
  SPEAKER_01: Help us understand maybe a little bit more about like what is it?
• 25:49
  SPEAKER_00: Yeah.
• 25:50
  SPEAKER_00: So this is the idea that you might have or an individual might have saved up enough assets earmarked for retirement over the course of their career to the point that even if they didn't add any more assets to the retirement savings, the future growth of those assets would be expected to be sufficient to cover their retirement needs when they eventually retire fully.
• 26:12
  SPEAKER_00: So, for example, let's say someone has been a diligent saver, maybe they had some sort of equity compensation, liquidity event in their employer.
• 26:20
  SPEAKER_00: So by the time they're 50, let's say they've accumulated$1 million, right?
• 26:24
  SPEAKER_00: And you can put it in planning software, expected returns, inflation, things like that.
• 26:28
  SPEAKER_00: By the time they're expected to retire, let's say they're thinking of retiring at fully at 65, that those assets are expected to grow to the amount that that will meet their income needs.
• 26:37
  SPEAKER_00: So that opens up some freedom at this point to no longer really need necessarily to save for retirement.
• 26:43
  SPEAKER_00: So that, you know, let's say they were saving 20% of their income before.
• 26:48
  SPEAKER_00: Now you don't need that necessarily, which means that you could work at a job that pays less income.
• 26:54
  SPEAKER_00: So for example, you know, maybe someone works in a very high, stressful, high hours a week position, but they have this other job that they've always wanted to do, but it pays, you know, say 20, 30% less, as it were.
• 27:05
  SPEAKER_00: This could be an opening to pursue that position because their retirement assets are expected to grow to meet that future retirement need.
• 27:13
  SPEAKER_00: Now, of course, there's a technical side to this.
• 27:15
  SPEAKER_00: There's a lot of assumptions going into it, future returns, future inflation rate, future spending.
• 27:19
  SPEAKER_00: So there's a lot of technical work for the advisor to do here to see how possible it is and to monitor it over time if a client ends up doing it.
• 27:27
  SPEAKER_00: But I think this is extremely powerful because it could change 10, 15, 20 years of a client's remaining working years to allow them to do something they perhaps find much more fulfilling than the path that they're on today.
• 27:41
  SPEAKER_01: We've had this conversation with clients and with some of the firms that I work for, and I've not heard it called this.
• 27:47
  SPEAKER_01: So, like for me, like having this language, I was like, oh yeah, like that's kind of what this is, and where this has shown up.
• 27:53
  SPEAKER_01: And I love the firms that we work for and like the advisor.
• 27:56
  SPEAKER_01: I just think that they are so brilliant and like their strategies.
• 27:59
  SPEAKER_01: And while they've not named this directly, like where this has been really helpful and impactful is I think about like those clients who are maybe in their 50s, for example, or like late 40s, and they have a family and they've been saving like and putting away money and they've been fantastic, like very like responsible.
• 28:19
  SPEAKER_01: Like their work has pulled them away from maybe family life, or they're looking ahead and they're like, oh my gosh, like my kids are, you know, in middle school and I I really haven't spent much time with them.
• 28:30
  SPEAKER_01: And I really would like to work less or have a different job, right?
• 28:35
  SPEAKER_01: And even though I'd be making less, it would afford me the ability of more time like with my family.
• 28:39
  SPEAKER_01: Like these are like real life scenarios that I know come up for us, like in these, like these decision points, right?
• 28:45
  SPEAKER_01: And so a strategy like this, I think could be really helpful and beneficial, you know, for them giving back some of that time, you know, increasing well-being while also still, I say safe.
• 28:58
  SPEAKER_01: I'm hesitant to say safe, but like a relatively safe like strategy that still provides like security both in the here and later as well.
• 29:05
  SPEAKER_00: Yeah, exactly.
• 29:06
  SPEAKER_00: Because, you know, again, in this one, you're not totally turning off the income faucet altogether as you would in an early retirement or traditional retirement.
• 29:13
  SPEAKER_00: Right.
• 29:14
  SPEAKER_00: So that provides a margin of safety.
• 29:15
  SPEAKER_00: And you also made a good point in terms of client communication here, you know, very unless they're, you know, sort of online a lot, the the a lot of clients won't have heard of the term coast fire before, right?
• 29:25
  SPEAKER_00: That's not something that people just talk about.
• 29:27
  SPEAKER_00: And so in the article that you mentioned that we've written on this topic, um, we provide some one-liners basically for each of these strategies in terms of how to explain it.
• 29:35
  SPEAKER_00: So, you know, in this case, it's that, hey, you've saved up enough for retirement that with expected growth, you don't necessarily need to save more in your retirement accounts, which means that you only need to earn enough income to cover your ongoing spending.
• 29:49
  SPEAKER_00: That's sort of, you know, 15 seconds hopefully sort of gets the point across.
• 29:52
  SPEAKER_00: And again, there's going to be more details and assumptions and technical elements, but that hopefully gets the idea across without, you know, getting too into the jargon as it is.
• 30:02
  SPEAKER_01: Yeah, no, and listen, on the person, like personally, Adam, like I was really glad to have like this language because my intent and my plan, and I'm really hoping that Clayton is not listening right now, but when we do our annual like goals and kind of looking ahead and planning for 2027 and you know, thinking about where will we allocate money, I'm actually gonna use this whole like kind of coast fire thing and be like, listen, babe, I feel like we can now stop saving, putting money away towards that.
• 30:33
  SPEAKER_01: And now we can go to all the fun places that I want to go, like instead.
• 30:38
  SPEAKER_01: And Adam wrote all about it in his article.
• 30:40
  SPEAKER_01: And this is what we need to do.
• 30:43
  SPEAKER_01: So I'm personally grateful.
• 30:44
  SPEAKER_01: I'm sorry if you get like a hate email from from you won't.
• 30:47
  SPEAKER_01: I'm just kidding.
• 30:48
  SPEAKER_00: No, that's great.
• 30:49
  SPEAKER_00: And and I should note too, in the article on a high level, these all sound wonderful.
• 30:53
  SPEAKER_00: But there are risks, planning considerations, everything from health insurance, but there are also planning opportunities here, having lower income years being an opportunity for Roth conversions, for example.
• 31:03
  SPEAKER_00: Yeah.
• 31:04
  SPEAKER_00: So there's um, you know, definitely uh multiple factors to consider here.
• 31:08
  SPEAKER_00: But I think at a high level, you know, my goal here is to sort of, you know, hopefully give advisors a chance to open clients' eyes to opportunities that might be available to them in the future and they might not have considered.
• 31:19
  SPEAKER_01: Yeah.
• 31:20
  SPEAKER_01: And, you know, where I have seen some of this and and for our listeners here is that, you know, some of this can provide like psychological relief too.
• 31:29
  SPEAKER_01: Um, it can help with emotional distress.
• 31:32
  SPEAKER_01: And so these are really fantastic strategies to think about.
• 31:35
  SPEAKER_01: They're not going to be appropriate for every client, for every situation, but it might at least spark just kind of some curiosity there for specific clients and for certain ones.
• 31:46
  SPEAKER_01: Adam, I want to ask just kind of lastly here, because you mentioned maybe once or twice around introducing some of these alternatives like early on, like that is kind of a maybe not like best approach, but that is a really helpful approach.
• 32:01
  SPEAKER_01: And so if I'm thinking about this in terms of like how do we build this into a practice, when you say early on, and I don't want to assume here, are you talking about, you know, discovery?
• 32:14
  SPEAKER_01: Are you talking about, you know, annual reviews?
• 32:17
  SPEAKER_01: Are you talking about like website, even like language or copy?
• 32:20
  SPEAKER_01: Can we talk a little bit about like what does early on look like?
• 32:24
  SPEAKER_01: Like maybe when should advisors start to be talking about this?
• 32:28
  SPEAKER_01: So the surprise, right, is maybe a little bit more avoidable.
• 32:33
  SPEAKER_00: Yeah, I think that's a really good point.
• 32:34
  SPEAKER_00: And I think it partly might depend on what type of clients you're serving.
• 32:38
  SPEAKER_00: So, you know, for example, if you're working with the very close to retirement age, the pre-retirees, let's say they're 55, 60, something like that, you know, that can sort of focus you in on what you're thinking of.
• 32:50
  SPEAKER_00: So, for example, someone who's coming to you at age 60, you know, one of the big questions is thinking of as they're thinking of retirement, you know, what are you retiring to?
• 32:57
  SPEAKER_00: I know you you talk about that a lot.
• 32:59
  SPEAKER_00: And so, you know, one of the ways you might introduce that is like, hey, are you thinking of this sort of full retirement, or might you want a different approach?
• 33:06
  SPEAKER_00: One other strategy I haven't mentioned yet is the idea of semi-retirement.
• 33:10
  SPEAKER_00: So this is let's say instead of working, you know, the full 40 hours a week and then going, you know, cold turkey at 65 or 67 or whatever it is, why don't we dial back the hours, uh, maybe 20 hours a week, whatever it is.
• 33:22
  SPEAKER_00: So now you you're starting to experience what it's like to have all these extra hours in the week and how are you filling that time?
• 33:28
  SPEAKER_00: So someone who has a hard time filling 20 hours a week might have a hard time filling 40 hours a week.
• 33:34
  SPEAKER_00: So I think, you know, as you're talking to that sort of client about their retirement goals, and they say, you know, well, there's probably a couple of clients out there who are like, oh, I know it's 67 or bust, and but there's probably other people who are like, well, mid-60s, social security, things like that.
• 33:49
  SPEAKER_00: And I think that sort of moment presents an opportunity to be like, hey, you know, we can also talk about some of these alternative approaches that are out there that they might not have considered.
• 33:58
  SPEAKER_00: You know, thinking, let's say you're working with a younger professional client, you know, that opens pretty much the full range of strategies we've talked today to you.
• 34:06
  SPEAKER_00: Now, some of it's going to depend on their uh financial situation, their savings, their income, things like that.
• 34:11
  SPEAKER_00: But I think this is when you're you're looking for those uh cues, as it were, you know, because at that point, you know, very few people at that point are like, ah, 67, that's my retirement age.
• 34:21
  SPEAKER_00: So as you're talking about the retirement planning conversation writ large, you know, maybe you're talking about their savings.
• 34:27
  SPEAKER_00: You're looking at their workplace retirement plans, IRAs that you're having, say, hey, you know, here are different ways that we can put this savings to work for you before you retire, right?
• 34:38
  SPEAKER_00: I find that when I talk to folks, it's often very motivating for them to know that when they're socking money away in their 401k, Roth IRA, whatever it is, that, you know, if you're 40 years old, you know, it's 25 years into the future seems like a long time.
• 34:51
  SPEAKER_00: You know, I could be spending that money now on whatever it is, vacations, food, house, you know, things like that.
• 34:56
  SPEAKER_00: So to understand that that savings could work for you in the future.
• 35:00
  SPEAKER_00: And not even like in the case for Coastfire example, you're not making early withdrawals from these accounts.
• 35:05
  SPEAKER_00: But the fact that that money is there and compounding lets you have a different lifestyle today, perhaps through a different job.
• 35:13
  SPEAKER_00: So I think it can be motivating to them as well, both in terms of planning for retirement as well as that savings conversation.
• 35:20
  SPEAKER_01: No, absolutely.
• 35:21
  SPEAKER_01: Absolutely.
• 35:22
  SPEAKER_01: Okay, Adam, if there's one thing maybe that you would like for our listeners to just think about or consider, if they're like, hey, like this is all really interesting and also new, just some of the concepts here that we've talked about.
• 35:34
  SPEAKER_01: Maybe what's one practical strategy or tip that you would want to give them?
• 35:38
  SPEAKER_00: Yeah, I think the big thing is that a lot of clients might be in this default mode of being on this traditional retirement path without perhaps thinking through it.
• 35:48
  SPEAKER_00: So I think advisors really have the opportunity to create a true transformational moment for their clients by introducing these concepts, you know, sort of when and where appropriate for their given situation.
• 36:00
  SPEAKER_00: Because while there's uh plenty of planning opportunities within them, just the idea, and I think you mentioned this stress relief before that maybe I could retire earlier than I expected.
• 36:09
  SPEAKER_00: Maybe I could have additional time in my 30s, 40s, 50s to pursue these goals that I've wanted to do is really a transformational and perhaps life-changing moment for the clients, with again, creating the opportunity to create a stronger bond with their advisor who is not only introducing this for them, but also helping them execute it as well if that's what they decide to do.
• 36:30
  SPEAKER_01: No, I think that's fantastic.
• 36:32
  SPEAKER_01: All right, Adam.
• 36:32
  SPEAKER_01: If people want more Adam Van Doosen in their life, if they're like, this guy is so cool, I want to know more about him.
• 36:38
  SPEAKER_01: How can people connect with you?
• 36:39
  SPEAKER_01: Where can they find you?
• 36:40
  SPEAKER_00: Sure.
• 36:40
  SPEAKER_00: Um, you can go to kidsys.com on the NerdsIView blog.
• 36:43
  SPEAKER_00: I write our uh weekend reading for financial advisors articles, some of our uh Monday, Wednesday practice management and technical content.
• 36:50
  SPEAKER_00: I'm also the host of the Financial Advisor Technician podcast, uh, where we talk about the full range of technical issues related to financial planning.
• 36:58
  SPEAKER_00: So available wherever you uh get your podcast there.
• 37:01
  SPEAKER_00: And I'm on LinkedIn uh as well if you'd like to connect with me there.
• 37:05
  SPEAKER_01: Yes, absolutely.
• 37:06
  SPEAKER_01: We'll make sure that we include all of that in the show notes there.
• 37:09
  SPEAKER_01: Thank you, Adam, for coming on and sharing all of your insights, all of your wisdom here with us today.
• 37:13
  SPEAKER_01: It was definitely a pleasure having you.
• 37:16
  SPEAKER_01: Thank you to all of you for allowing Adam and I into your ears and into your mind today.
• 37:20
  SPEAKER_01: It's a part of your week that you don't have to give us, but you're choosing to.
• 37:24
  SPEAKER_01: And for that, we're both incredibly grateful.
• 37:26
  SPEAKER_01: If this conversation resonated with you, I'd love to keep the connection going.
• 37:32
  SPEAKER_01: You can find me on LinkedIn at Ashley Kwame, where I share weekly insights on the human side of planning.
• 37:37
  SPEAKER_01: And if you'd like a little more beyond the plan in your life, you can head over to our website and you can sign up for our monthly newsletter where we share strategies and insights all around how to integrate the human side of planning into your firm.
• 37:50
  SPEAKER_01: While you're there, make sure to check out the tab, the services, that talks about advisor skills school.
• 37:57
  SPEAKER_01: Advisor Skills School will be launching in January.
• 38:00
  SPEAKER_01: It is a 12-month practice relational skill building, and I don't know if I want to say program, because it's really a fun time, all centered around developing the relational skills that advisors like you are working on building in a safe and collaborative environment.
• 38:19
  SPEAKER_01: Go check out the webpage where you can learn more.
• 38:22
  SPEAKER_01: That pre-sale will be going on now until the end of the year.
• 38:25
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• 38:29
  SPEAKER_01: Most importantly, though, my friends, make sure to follow the show wherever you get your podcast so that you never miss a future conversation like this one.
• 38:37
  SPEAKER_01: And as always, remember, finances don't have feelings, but your clients do.
• 38:42
  SPEAKER_01: Until next time, keep planning, keep growing, and keep going beyond.
• 38:49
  SPEAKER_01: Thanks for joining me on this episode of Planning and Beyond.
• 38:53
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• 38:59
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• 39:04
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• 39:10
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• 39:35
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