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Picking a Retirement Date · TaylorMade Retirement with Taylor Demars, CFP®

• 0:00
  SPEAKER_02: When can I retire might be the question we get asked more than any other question.
• 0:04
  SPEAKER_02: And many times people are chasing an age, sometimes they're never trying to ask about a certain number.
• 0:09
  SPEAKER_02: So today we're going to break down what actually helps us determine the answer for our client situation.
• 0:16
  SPEAKER_00: Welcome to Tailor Made Retirement, where we explore what it takes to build a retirement that works for your money and your life with third generation certified financial planner Taylor DeMars.
• 0:31
  SPEAKER_01: Welcome into this week's edition of Taylor Made Retirement.
• 0:34
  SPEAKER_01: Thank you for tuning into the podcast with Taylor DeMars and myself as we yeah talk about today's topic, Taylor, which is you know, picking that retirement date or you know, can versus should, right?
• 0:44
  SPEAKER_01: Whatever how you want to label it.
• 0:46
  SPEAKER_01: Yep.
• 0:46
  SPEAKER_01: The real question uh behind the date.
• 0:50
  SPEAKER_01: I know.
• 0:51
  SPEAKER_02: I know the ominous date.
• 0:52
  SPEAKER_01: That's right.
• 0:53
  SPEAKER_01: Uh penciled in, you know, maybe you know, when did we turn it from pencil to pen kind of thing as far as locking that in?
• 0:59
  SPEAKER_01: And and as you teed up in the opener that, you know, you get lots of questions from from listeners and and clients and all sorts of folks wanting to know how they can determine when it's, you know, I guess for lack of a better, you know, term, safe to retire.
• 1:12
  SPEAKER_01: You know, in your experience, are are most people anchored to the age or the dollar amount?
• 1:17
  SPEAKER_01: You kind of tease both of those.
• 1:18
  SPEAKER_01: Is do you find one carries more weight than the other?
• 1:21
  SPEAKER_02: Right.
• 1:21
  SPEAKER_02: No, I definitely have a thought on that.
• 1:23
  SPEAKER_02: And if I could push back on that premise and zoom out for a moment, Mark, is I like to define the term retirement as a work optional lifestyle, right?
• 1:31
  SPEAKER_02: Right.
• 1:32
  SPEAKER_02: I feel like the the old school, and nothing wrong with the old school style of thinking retirement is you know, you punch your card and you don't you don't look back, right?
• 1:39
  SPEAKER_02: And and you cut cold turkey.
• 1:41
  SPEAKER_02: More and more I'm seeing clients looking for a phased transition to retirement, which means, yeah, they may leave their employer, but they might jump to prioritizing a job that pays, you know, prioritizes a passion over a paycheck, right?
• 1:52
  SPEAKER_02: Okay.
• 1:52
  SPEAKER_02: And many times our process has been to, yes, identify that that golden date of when to retire.
• 1:58
  SPEAKER_02: But what uh counterintuitively, many times I see when people know, hey, at this point, if not already, I'm able to retire based on my goals, they they they tend to not feel as much urgency to retire.
• 2:09
  SPEAKER_02: Even if they are feeling stressed out or burnt, they they they feel like now that they see the light at the end of the tunnel, they're they're they're more willing to just say, Hey, I'm just one bad meeting, one bad Monday from just uh clocking out and and I have nothing to lose because of that.
• 2:23
  SPEAKER_02: But in any case, to to double to center in on your question, because it's a common one, is you know, people centering in on a certain age or trying to tie that, you know, that that timeline to a certain dollar amount.
• 2:33
  SPEAKER_02: I I see both, right?
• 2:35
  SPEAKER_02: I see I see people saying, Oh, I'm gonna retire at 62 because that's when social security starts.
• 2:39
  SPEAKER_02: I'm gonna start at 59 and a half because that's when my my IRA distributions are penalty free.
• 2:44
  SPEAKER_02: I'm gonna retire and get make it to 65 so I don't have to pay for health insurance pre 65.
• 2:48
  SPEAKER_02: Um, the list goes on.
• 2:50
  SPEAKER_02: And I also see on the dollar side, people say, Well, I I guess once I see that round two million dollar number, that round four million dollar number, everyone's got their own number, right?
• 2:57
  SPEAKER_01: Yeah.
• 2:58
  SPEAKER_01: I'll feel better when I see it.
• 2:59
  SPEAKER_01: Yeah.
• 3:00
  SPEAKER_02: Right.
• 3:00
  SPEAKER_02: Yeah.
• 3:00
  SPEAKER_02: Yeah.
• 3:01
  SPEAKER_02: And and and I hate to be a contrarian again, but I think both approaches are wrong, right?
• 3:06
  SPEAKER_02: Because I think the reason people gravitate towards those manners of thinking, Mark, is it's easy.
• 3:11
  SPEAKER_02: And understandably, it's easy to say, well, it's around 65 or it's around$3 million saved.
• 3:16
  SPEAKER_02: I like to frame that as making the decision from the top down.
• 3:19
  SPEAKER_02: Our approach is to prefer to get the answer by working from the bottom up and reverse engineer what an ideal retirement timeline looks like based on your specific situation, right?
• 3:30
  SPEAKER_02: Hence the term of this podcast, tailoring to their own retirement needs.
• 3:33
  SPEAKER_02: And I'd like to think, I can't promise, but with better planning, right, we can be able to center in and give people that clarity and confidence to say, hey, based on how much you're wanting to spend, not only on your needs, but your wants and your wishes, your other, you know, non-quantitative priorities in your life, we can be able to do that reverse engineering to figure out what that custom timeline is to you.
• 3:52
  SPEAKER_02: Because rarely is it, you know, at an exact birthday or an exact dollar amount.
• 3:56
  SPEAKER_02: And that's how real life works.
• 3:57
  SPEAKER_02: So that's that's our approach to try and answer in a nutshell the answer of when it feels safe for lack of a better word to retire.
• 4:03
  SPEAKER_02: Does that make sense?
• 4:04
  SPEAKER_01: Yeah, no, it definitely makes a lot of sense.
• 4:05
  SPEAKER_01: And and I know that everybody's, you know, obviously, this is why we say so many times.
• 4:10
  SPEAKER_01: Like every time we do a show and every time you talk to a client, I'm sure you could just literally start with, yep, it depends.
• 4:16
  SPEAKER_01: Let's take a look, you know.
• 4:17
  SPEAKER_01: Because, you know, but there are these universal things that that affect us all, but then how they play out person to person is what makes the depends part come in, right?
• 4:25
  SPEAKER_01: Agreed.
• 4:26
  SPEAKER_01: So with that kind of said, you know, what's the biggest factors or I guess top factors?
• 4:31
  SPEAKER_01: And I think I'm sure most people probably can think of these on their own, but what are some of the top factors that move that needle to retirement date being pushed sooner or later, however you want to go, right, Taylor?
• 4:42
  SPEAKER_01: Um, you know, than expected.
• 4:43
  SPEAKER_01: So what what are the top ones you guys typically see as to why you've got to move the date up or you gotta push the date back?
• 4:49
  SPEAKER_02: Yeah, great question.
• 4:50
  SPEAKER_02: I I see both, of course, you know, reasons that people push that, push or pull that date.
• 4:54
  SPEAKER_02: The reason I see it people often pull it further is is often burnout from work, right?
• 5:00
  SPEAKER_02: Um they're likely.
• 5:01
  SPEAKER_01: Okay, so get me out of here sooner kind of thing.
• 5:03
  SPEAKER_02: Yeah, they've somewhere they they work somewhere or in an industry 20, 30 years, and either because of office politics, especially post-COVID, it seems, things have shifted in that environment, or uh increased stress by expectations or being stretched thin across a team, right?
• 5:18
  SPEAKER_02: That that drives people to really second guess, you know, is is the are the dollars that are I'm accumulating here worth how much that's eating away at my health, both mental and maybe physical, right?
• 5:29
  SPEAKER_02: That pulls people out, you know, that that starts to get them really thinking about it.
• 5:32
  SPEAKER_02: But sometimes it's an an outside influence, right?
• 5:35
  SPEAKER_02: Such as uh an unexpected layoff.
• 5:38
  SPEAKER_02: Uh, I'll give you an example, working with a client who's an executive at JP Morgan uh bank, and she was telling us, yeah, I'm thinking about retiring at this date, next year, and so on.
• 5:47
  SPEAKER_02: And halfway through our three-month engagement, she said, I just got an email told me I got laid off.
• 5:52
  SPEAKER_02: Totally blindsided her, right?
• 5:53
  SPEAKER_02: And so good news is as we were already putting the steps in place to get her retired, but it's not uncommon for people to be, you know, kind of coerced into retirement for one reason or another.
• 6:03
  SPEAKER_02: So that's another reason things get accelerated.
• 6:05
  SPEAKER_02: Um so I often hear people get uh hearing or experiencing a health scare, right?
• 6:12
  SPEAKER_02: Yeah, um, either they experience something themselves that helps them just, you know, they just something uh switches, you know, they they really just the light light bulb turns on and realize they don't have forever to live.
• 6:21
  SPEAKER_02: I they see that in a friend, family member, or a colleague, um, and it really helps them wake up to what matters more in life than continue to work.
• 6:28
  SPEAKER_02: Does that make sense?
• 6:29
  SPEAKER_01: Yeah, definitely, for sure.
• 6:30
  SPEAKER_01: And you know, and obviously those are those circumstances that are gonna affect everybody differently.
• 6:35
  SPEAKER_01: But if we were playing the game of okay, the math lines up, Taylor, right?
• 6:39
  SPEAKER_01: So the math math says it's good, you've done the analysis, you've done the breakdown, somebody can retire.
• 6:45
  SPEAKER_01: And they've got a penciled in date.
• 6:47
  SPEAKER_01: What at that point, aside from a medical thing or something, what tends to hold them back for at that point?
• 6:53
  SPEAKER_01: Do you see some of that?
• 6:54
  SPEAKER_01: And if so, what might be the cause?
• 6:56
  SPEAKER_01: Because now it's not the money.
• 6:57
  SPEAKER_01: Now they can't say, well, I'm afraid I'm gonna run out because you've you've covered that, right?
• 7:01
  SPEAKER_01: So what's the kind of like the the excuse?
• 7:04
  SPEAKER_01: Uh not that excuse is a good word, but what's kind of the reasoning at that point?
• 7:07
  SPEAKER_02: Sure.
• 7:08
  SPEAKER_02: Man, there's a there's a bunch.
• 7:09
  SPEAKER_02: I'll narrow it down to a few.
• 7:10
  SPEAKER_02: Okay.
• 7:11
  SPEAKER_02: Um that and I think the further the biggest reason I might encourage someone to, even if the numbers may work on paper, is that they should consider working a little bit longer.
• 7:19
  SPEAKER_02: I I hate to be that proponent, but thinking in their best interest, one of the biggest reasons I say maybe let's let's pump the brakes a bit is if they have uh large expenses uh coming in the near term.
• 7:28
  SPEAKER_02: Largely clients are going to retire uh and it has to do with, you know, uh a home transition.
• 7:33
  SPEAKER_02: Do we really have that fund built up for that home transition?
• 7:36
  SPEAKER_02: Maybe they've got a major home renovation, right?
• 7:38
  SPEAKER_02: These things around transitions and construction costs tend to be unknown timelines and unknown amounts, right?
• 7:43
  SPEAKER_02: And they tend to go only higher.
• 7:45
  SPEAKER_02: So then my my goal is to help clients, you know, if they're nothing else, they can know that they can breathe easier, knowing that, hey, maybe if you work another six months to just make sure that cushion is built up for that knee, then then it may be worth it.
• 7:56
  SPEAKER_02: But other reasons, right?
• 7:58
  SPEAKER_02: It may be psychological.
• 7:59
  SPEAKER_02: It's maybe just be a mental shift from that being a saver for decades to suddenly being a spender that keeps people up at night, despite what the numbers may say on a screen, right?
• 8:08
  SPEAKER_02: They may also realize, mentally speaking, that they are finally at the edge of the precipice to take the leap of faith, but they don't realize what they're jumping into.
• 8:17
  SPEAKER_02: It's always been about getting to the finish line and they realize, I don't know what's past that other side of the veil, and they don't know what that retirement lifestyle is actually going to look like.
• 8:25
  SPEAKER_02: And it scares them because they know what they're familiar with, that lifestyle, what they're good at, right?
• 8:31
  SPEAKER_02: But it's not the finances that can't hold them back, but more the identity, right?
• 8:34
  SPEAKER_02: Does that make sense?
• 8:35
  SPEAKER_02: And and and and and not just because people may continue to work because they uh are worried about what's on the other side.
• 8:41
  SPEAKER_02: I find people all the time that actually enjoy their job, right?
• 8:44
  SPEAKER_02: They're at their not just their peak earning years, but their peak efficacy, right?
• 8:47
  SPEAKER_02: They're really providing their best value and they're integral in their roles and their companies, large or small.
• 8:53
  SPEAKER_02: And uh and and and so that may be a reason that they want to continue to work.
• 8:57
  SPEAKER_02: And like I mentioned before, once people's realize that work is optional, retirement is optional, they get a little more bold in the office place, right?
• 9:05
  SPEAKER_02: And when they have got nothing to lose, they feel like they can, you know, I don't know.
• 9:08
  SPEAKER_02: Some people actually just tend to enjoy work a little bit more than they did otherwise, now that they have the clarity that they they don't have to be there anymore, right?
• 9:15
  SPEAKER_02: They may enjoy it, maybe they're sticking it out for one reason or another, but yeah.
• 9:20
  SPEAKER_01: It removes the pressure, yeah, for sure.
• 9:22
  SPEAKER_01: I can see that.
• 9:22
  SPEAKER_01: I could see that, right?
• 9:23
  SPEAKER_01: It's like you're on the fence a little bit, but now you're solid, you know you could walk away.
• 9:28
  SPEAKER_01: Maybe that guy that annoys you in you know, a couple offices down doesn't annoy you as bad now.
• 9:33
  SPEAKER_02: Exactly.
• 9:34
  SPEAKER_02: Yeah.
• 9:34
  SPEAKER_02: Yeah.
• 9:35
  SPEAKER_02: Yeah.
• 9:36
  SPEAKER_02: So it's true.
• 9:37
  SPEAKER_02: I guess and I say the very last thing reason uh or not very last, but one other thought that I see commonly keeping people working, even if other numbers say they can go, is they're kids, right?
• 9:46
  SPEAKER_02: Maybe they're just they they got a kid who's gonna graduate high school or they want to make sure that they can get their kid through college, right?
• 9:52
  SPEAKER_02: Um, is a common goal that's unrelated to their personal finances, but they want to make sure those around them, yeah, their spouse maybe wants to hit a certain milestone at work or whatnot.
• 10:01
  SPEAKER_02: Um I see that all the time as well.
• 10:03
  SPEAKER_01: Okay.
• 10:04
  SPEAKER_01: All right, good stuff here today as we're talking about the retirement date.
• 10:07
  SPEAKER_01: Um, at least just one more question for you, I think.
• 10:10
  SPEAKER_01: Um how does you know the process that you guys go through with people, right?
• 10:15
  SPEAKER_01: So when you guys are going through the roadmap, the retirement readiness roadmap, uh, how does that does that help the the ones that are kind of like still twisting in the wind about well, I don't know when I want to retire?
• 10:26
  SPEAKER_01: Does it help them kind of figure out how to nail that down and and feel good about their decision?
• 10:31
  SPEAKER_02: Yeah, 100%.
• 10:32
  SPEAKER_02: I mean, it goes without saying, but but answering this question of when is the right time to retire for me is is a often a once-in-a-lifetime seven-figure decision.
• 10:41
  SPEAKER_02: So not something you want to take lightly or try and figure out in 30 minutes.
• 10:44
  SPEAKER_02: So for that reason, our our retirement readiness roadmap process is that seven session, three-month process.
• 10:50
  SPEAKER_02: And and doesn't begin as much as and the industry is tempted to.
• 10:54
  SPEAKER_02: It doesn't begin by saying, hey, let me manage your investments or pull up an investment statement and try and figure out what we can do with that.
• 11:00
  SPEAKER_02: But that that that that's definitely an integral part of it.
• 11:02
  SPEAKER_02: But we need to back up and build a plan.
• 11:03
  SPEAKER_02: And before that, we need to back up and understand what's the purpose, what are these dollars actually meant to do, and what's that ideal lifestyle translate to?
• 11:10
  SPEAKER_02: And that's where we start to hear from our clients translate to, you know, what are those needs, wants, wishes, and what does success really look like?
• 11:17
  SPEAKER_02: And and and though that brings up things that are both quantitative and qualitative, and that injects into our planning process, then that we know how to then apply it to the portfolio.
• 11:26
  SPEAKER_02: So, in a nutshell, Mark, right, we're trying to do that bottoms-up approach to reverse engineer based on their personal circumstances and what's specific to their own situation.
• 11:35
  SPEAKER_02: How do we find an ideal timeline?
• 11:38
  SPEAKER_02: And and many times, I can't promise it, but many times people realize that date is in the past.
• 11:41
  SPEAKER_02: They could have already retired, they just were edging on the side of caution because it's higher risk to pull the plug rather than just keep going if you're unsure.
• 11:49
  SPEAKER_02: Um, and that's that's where we we aim to help.
• 11:52
  SPEAKER_01: All right.
• 11:52
  SPEAKER_01: Well, if you'd like some of that help yourself and you're not already working with the team, make sure that you reach out to them at demarsfinancial.com and click on the could we be a fit button again at demarsfinancial.com.
• 12:04
  SPEAKER_01: Taylor and the team there are waiting to help you out with your own retirement readiness roadmap.
• 12:08
  SPEAKER_01: And uh, Taylor, unless I miss something you want to chime in on, I think we got a pretty good, uh, concise conversation here about uh you know trying to help narrow down and pick the retirement date.
• 12:18
  SPEAKER_02: I agree.
• 12:18
  SPEAKER_02: You you had some great questions, Mark.
• 12:20
  SPEAKER_02: I think a lot of people are in a similar boat trying to figure out what that that number is for them.
• 12:24
  SPEAKER_02: And um and it it it it's hard to find that from a podcast, from a YouTube video, from an online article, because they don't know enough about the who's on the other side of that screen.
• 12:33
  SPEAKER_02: And so that's that's where we aim to truly build a tailored plan for each person.
• 12:37
  SPEAKER_01: There you go.
• 12:38
  SPEAKER_01: Well, it certainly gives you food for thought, and that's what we aim to do with the podcast.
• 12:42
  SPEAKER_01: Uh, and Taylor does as well with his YouTube channel.
• 12:44
  SPEAKER_01: So go check that out for some fun content as well.
• 12:47
  SPEAKER_01: You can find that online.
• 12:49
  SPEAKER_01: Of course, you can find all the information uh as well as subscribing to the YouTube channel and the podcast at demarsfinancial.com.
• 12:55
  SPEAKER_01: Try to make it easy and I'll put it all in that one spot there for you.
• 12:58
  SPEAKER_01: But you know, these things are just another tool in the the arsenal, uh, another uh arrow in the quiver to kind of help people find uh who's the right fit for them.
• 13:07
  SPEAKER_01: And do they talk about the things that uh are important to me or that resonate with me?
• 13:11
  SPEAKER_01: So hopefully we've done that yet again here on this episode.
• 13:14
  SPEAKER_01: And uh, we will see you next time.
• 13:16
  SPEAKER_01: Thanks for hanging out with us.
• 13:17
  SPEAKER_01: We always appreciate it.
• 13:18
  SPEAKER_01: Taylor, have a great day, my friend.
• 13:19
  SPEAKER_02: My pleasure.
• 13:20
  SPEAKER_02: Thanks, Mark.
• 13:20
  SPEAKER_01: We'll see you next time here on Taylor Made Retirement with Taylor DeMars.