How to Fail at Retirement

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Today we're discussing 10 ways to fail at retirement. Welcome back to Money Talks. My name is Ken Wink from Summit Financial Consulting. If you'd like more info about what you hear during the show today, give us a call at 586-226-2100 or check us out at the web, www.summitfc.net. While you're at the web, be sure to check out our previous shows on the podcast page. You can also subscribe to us on Apple Music, Amazon Music, or Spotify. So retirement is usually pretty fun, whether you're going on trips or trying to golf 100 rounds of golf in a summer, or just enjoying some extra time with the grandkids. It's, you know, this is what you worked your whole life for. So But what if you mess it up? You know, that's not cool. So we want to try to avoid that. Today, we're going to be talking about 10 ways that you can fail at retirement. But before we jump into this super uplifting topic, let me introduce my co-host, Tony Shore. Tony, I did not wear enough sunscreen this July 4th weekend at the beach. So I'm taking very painful showers right now. Did you have any fails this weekend? Yeah.

That was your fail, huh? You didn't wear enough sunscreen. Is that it? That was the only fail. Oh, wow. Let's see here. I ended up having to move a love seat down to Winona, Minnesota from the Twin Cities for my daughter. which took all day Sunday most of the day, and that was not planned. So I view that as a fail.

A waste of a Sunday?

No, it was good to help her out. It's a nice drive along the river. Anyway, no, I had a good time. We grilled, got to see my kids. I went to a concert, an outdoor concert called the Taste of Minnesota. It was in Minneapolis. They shut down these streets and I got free VIP tickets. So I was in a VIP area with free food and drinks. And. Nice air conditioned restrooms. And it was just like you got the VIP treatment. Yeah. Yeah. And side stage there. And it was Cheap Trick and Joan Jett and the Blackhearts. And it was a great concert. I took my son, a friend of mine, got two free VIP tickets and invited me. So I took my son. And we had a great time. That was Saturday night. Had a great fourth weekend. Always fun to see family. Again, my favorite holiday because I can eat both a burger and a brat. Nobody's going to say a word. No judgment. No judgment. Um, uh, but that's great. But now you can, uh, there's something disturbing and unfortunately for our viewers, uh, that watch the show on YouTube. And if you're listening to the show, go to the YouTubes, uh, go to the YouTube and look up, uh, Money Talks with Summit Financial or Money Talks with Ken Wink.com. And look at this video because you'll see something very disturbing. I don't know if you want to look at the video, but Ken did go to the beach for the 4th, and we have photographic evidence of Ken in what's called a romper with American flags all over it. So I'm showing that on the screen for our listeners out there who are listening to the podcast online. or the show. It's a disturbing image. I'm just going to say that. It's Ken on the beach with his cousin, and they're both wearing these romper things. Ken, that's not a good look for you. I'm just going to come right out and say it. Yeah, it's pretty bad. I don't know. I'll still put this, but you are a brave man. That's very patriotic. It looks like you got some sun. And now talk to us about who you're with here.

So that's my cousin, Kyle. He retired from the military a few years ago. And he's been sporting that overall Romper outfit for a few years. And my wife just felt like, you know, he was lonely. He needed some companionship wearing patriotic gear. But one of the things that stands out is that he's wearing a Cincinnati Reds jersey underneath. That was a new thing this year. And everyone was really curious why. And he gave me permission to share it. The reason he was wearing that is because he was at a Cincinnati Reds game the day he accomplished one of the most patriotic acts in history, which was completing the 999 at a baseball game. Have you ever heard of that, Tony?

I've heard of it. Refresh my memory and our listeners' memory. What is that?

Yeah, Kyle has many talents, but competitive eating I didn't know was one of them. So he managed to eat nine hot dogs and drink nine 12-ounce beers within the nine innings of the baseball game and lived to tell the story. And that's a point of pride for him? Yeah, he said, you know what? I think it's the most American thing I've ever done.

Unfortunately, that could be true. That could be true. But, uh, and that's why we live in the greatest country on earth. That's why we can honestly say, yes, this is the greatest country. Where else can you do that? I mean, come on. And get the respect and admiration of your peers and maybe, maybe some disgust, but some disgust. Yeah. Oh my goodness. That's crazy. The nine, nine, nine. That's right. I, now, now it's coming back to me. I I wouldn't even attempt it because I don't like to throw up. But I'm just leaving that picture up there. So it's really ingrained in our viewers memories of you. You're on the left there in a I just. That is a look and your wife is to be applauded. I love her not only getting that for you, but making you wear it.

in public is awesome. Um, it was a weird experience. It is like an elastic waistband. It was very unsettling. I don't, I feel like women wear those all the time now, and people kept asking me like, what are you doing? I was like, am I wearing women's clothing right now? I don't know. I don't think I

wear this particular outfit. It's a romper. I just, uh, that is crazy. That is crazy. Well, um, I've looked at that enough. We're gonna go back to our, uh, normal view here. Yeah, don't burn your eyes out. We'll put our overlay back. We just had to see those legs, Ken. Oh, gosh. Yeah, those gams. All right. Well, hey, now that we've really disturbed our listening audience, I want to get back to this topic you brought up and why you want to call the show this, why we're talking about this, because how to fail at retirement. I think there's a lot of us out here who... I don't need to be told how to fail. I know how to fail at retirement. Do nothing. It's easy to fail at retirement. A lot of people do, unfortunately. But I guess looking at the main reasons why you might fail, even though you think you're trying, that's good to know. Mistakes to avoid is really what we're talking about here, right? You got it. Yep. Okay. Just making sure because... And that's a little concerning to me that we're talking ways to fail at retirement, not to help you fail, but to help you succeed. That's our goal, isn't it?

Right. Yeah. Let's let this is do the opposite day. Don't wear your romper to the beach. Don't do the nine nine nine and don't follow these these 10 mistakes. Right. All right. Well, let's jump into it. All right. Well, the first one is actually a topic that we covered in our show about two weeks ago, and that's just underestimating longevity risk. So if you haven't watched that show or listened to that show, highly encourage you to check it out. But just a very short summary is that a lot of people retire and they don't realize just how long retirement can last. And what that really means is just how much it's going to cost. So that's something that we see with a lot of people. I have people come in the office all the time and say, I got 10 years max. And sometimes they're surprised at how long they actually live, even if they do have some health challenges. Yeah. If you're 65 years old today, you got to plan for at least 20 years of retirement. If you want to play it safe, you can plan until age 100. Who knows what medical breakthroughs will occur in the next 20 or 30 years. Uh, the, uh, there are statistics, there are statistics that are out there that say the number of people that are going to live past age 100 is going to quadruple over the next few decades. So really long retirements may be in store here for some people. So we want to make sure that we have a game plan in place to handle just inflation. We know the cost of everything's going to go up eventually. Healthcare costs, living expenses, uh, possibly long-term care. There's just a lot of stuff that can go on. So you want to make sure that you're planning for it.

Well, for sure. And I think that obviously it can, this is important. We want to enjoy a long, healthy retirement, right? And it's great as long as you have the money to fund it, but you've got to have the money to fund it. You've got to have that saved up. And the way to make sure you have enough is by working with somebody like yourself, right? Yeah.

Yeah, yeah, absolutely. And, you know, it's just once you retire, you usually don't want to go back to work. Some people go back to work part time, but you typically don't want to go back to work full time after you retire. So making that decision on when you retire is is really, really important. And that's that's actually sort of leading up to my next way to not mess up your retirement. And that's just. understand sometimes early retirement happens. So sometimes people have a five-year plan or a 10-year plan and then all of a sudden it turns into a two-year plan or a three-year plan because something changes at work or you get a new boss or you've got some health issues that pop up or maybe you've got a parent that's sick and you have to start taking care of them, buyouts. There's just so many things that can happen very quickly and sort of change the game plan. So Yeah, sure that you have a plan B, especially if you're starting to get a feeling that one of these issues might pop up.

Yeah, yeah. Plan B is good, but don't try to go it on your own is what I always say. And and again, also, if you're a couple, if you're you know, you have a spouse, make sure that you're both in on the plan. Right. I think that's a mistake a lot of people make is lack of communication and retirement. A lot of people don't think about it, but it's like, OK, what if I want to retire at a different time than my spouse? Or what if my goals are different for retirement than my spouse's? You got to work that out.

Right. Right. Yeah. I know, Tony, you've been married for a long time and I have my wife and I, Nicole, have been married for about 15 years now. So you and I know better. You know, if you haven't already clearly discussed this with your spouse, you got to make sure that you have that conversation, whether you're married or living with a partner. Yeah. You know, retirement doesn't just happen to one of you. It happens to both of you. So, yeah. Yeah.

And if you're married and if you're a man and you have a wife and you need to communicate about retirement and that is basically talking about what you each want and then do whatever she wants. That's the absolute success, right? Yeah.

Yeah, one of the most common things I see is actually like the grandma is like, I can't wait for us to retire so then we can just watch the grandkids all day. And some grandpas are 100% on board in that, you know, they're totally looking forward to it. And other ones were thinking, you know, oh, I thought we were going to go. camping in the RV six months out of the year, or, you know, I really want to start making delicious salsa from my vegetable garden. You know, there's just all these things that people sort of daydream about when it comes to retirement. You got to talk it over with your spouse and get it all figured out.

Yeah, you have to. I mean, that's a bottom line. So what's next?

So just coming up with a game plan for how you are going to fill all those hours. So sort of within that same vein as the grandparent conversation. You know, on paper, retirement sounds like an absolute paradise and you can sleep in and go to the beach whenever you want. But the truth is a lot of people don't think about what they're going to do all day. And my dad used to be a mechanical designer engineer. And his first hundred clients were all engineers. So he's like, and I think you have to have a certain mind frame to be an engineer. And he just kept finding that so many of these engineers, after they retired, they were actually dying. So super great way to ruin retirement is die, obviously. So, but that was the thing is they were just so used to every single day, working, working, working, using their mind, feeling useful, I guess. Yeah. And then once they were retired, they just didn't have anything to fill the time or to use that mental energy. And it just didn't turn out so great. So your life has to have a purpose after you retire. So discussing that with a spouse or life partner, if you're running solo, just figuring out how you're going to figure, you know, how are you going to use all this time every single day? So for me personally, my game plan is to get better at playing the guitar and volunteer for charities and trying to those that are less fortunate. So as a retiree, make sure you think about this and come up with a game plan ahead of time.

So your idea can to help people who are less fortunate is to play guitar for them and sing or perform for them. I would think that would make them even more less fortunate. Yeah. Uh, so, so you're saying they have to listen to you and that somehow helps them? Yeah, I'm teasing you, don't mix them, I'm razzing you. Uh, I think that's a very noble and awesome, uh, just make sure you practice, uh, yep, absolutely. Um, at any rate, yeah, that, that's a good one, and, uh, you know what, um, But you've got to have a plan for retirement. Right. I mean, you're going to have all that newfound time. And I think a lot of people think you mentioned this earlier. They think I'm going to golf every day or I'm going to read books all day, every day, catch up on my reading. You know, in retirement, you might spend 20 or 30 years in retirement and you're going to hit a wall real quick. Even I don't care how much you love golf. That can't be your retirement plan. Books and golf. And I love reading books. And I love doing certain things. I love listening to music. But, you know, I can't sit in my music room all day listening to albums every day, all day in retirement. I have to have a purpose, a little stronger purpose than that. And so it's good to volunteer, get involved with things. And then a lot of people I know end up busier that they say I'm busier. I have more going on than I was during my working years. Yeah, definitely. I have less free time. So that's and I get a kick out of that, too. But the key is, is to keep going. My grandfather lived to 101. He was active. He was active through his 100th year. Right. He was still out camping months before he passed. He went on a camping trip. So my grandfather and they always asked him the newspaper, television, local TV would come and interview him, you know, from 90, 95 and 100. The local media was there every time saying, you know, how, you know, how do you do it? Longevity. You're still driving. You're doing all this. It's amazing. And he goes, you just got to keep going. Got to have a purpose. And that was his that's he said, that's how I did it.

Yeah. You've got a great template there, Tony. That's for sure. My grandpa lived to 90 and it was similar circumstances, still driving. His fountain of youth was walking every day, one to three miles. Yeah. That's huge. Yeah. That's good. So next thing on the list is just make sure that your social life is, is going to be appropriate once you're retired. So especially if you're the first one in your friend of your friend group to like retire and, they might all still be working. So you're just trying to find something to do. So you may want to go make some new friends. You may want to go to an exercise class or volunteer or join a club or something for your, you know, just basically make some new non-work friends that can hang out during the day, just so you're not sitting around all day waiting for everybody to get out of work at five o'clock. So again, just sort of continues within that theme of you got to find something to do both physically From a social aspect, you know, you may have to make new friends. That's what I'm trying to say, Tony. Wait, I have to make friends?

Step one. Step one, don't make fun. If you want to make friends, don't make fun of people if they wear a romper to the beach.

Yeah.

That's not nice. That's not a good way to make friends. And also wearing a romper to the beach might not be. No, that's actually a way to make friends. People are going to come up and start talking to you like, are you crazy? Yeah. Um, well, uh, you're right. And you need to, everybody's going to be different. And you know, you and your spouse might be a little different. You've got to work that out. We talked about that. So what's next?

Uh, just figuring out where you're going to live and how long you're planning to live there. Sure. So, you know, when you're younger, especially if you have, um, you know, children, you might be looking at what school district are they in? Uh, where are the parks? Where's the ball field where they're in their, uh, Baseball league, you know, there's just so many things that sort of revolve around family and in some cases, young children. But it could be as simple as I live in a two story house now and I'm having a hard time getting up the stairs now that I'm 80 or 90 years old. So coming up with a game plan of where you're going to live, how long you're going to live there is a really big consideration. So. Are you going to downsize? Do you want to have space for kids and grandkids to visit? Or do you want a smaller house and you just go to their place and therefore they do most of the cooking? Are there some safety issues? Is there a walkway that's always icy during the winter? Do we need a wheelchair ramp at some point? If I outlive my spouse, God forbid, how am I going to handle that? So there's just a lot of different considerations as to where you want your long-term retirement home to be. So just sort of bounce around these ideas and see if the current place makes sense. And if a person is going to move, we normally recommend that they move as early as possible because in the United States, normally and in the state of Michigan anyways, especially they cap how much your property taxes can go up at 5% or inflation, whichever is lower. So you want to, move into a home and stay there for as long as you can, because eventually the value of the home is going up faster than the property taxes. So a lot of times people move into a home and say, Oh, the property taxes are X. But then a year after they move in, property taxes can double in some cases, even triple, you know, because now it's getting indexed to what you actually bought the home for. So that's a unpleasant surprise for some people. So yeah, It makes sense to do it as young as you can so that as an appreciation happens, your property taxes are lower.

Yeah, that's a great point that I don't think a lot of people think about. And a lot of people want to downsize or, you know, move from a multi-story home once their kids are grown and gone to a one level where they can age in place. I know that's popular now for a lot of folks. My wife and I are looking at doing that. And, um, but you don't want to buy a house and then move right away. Uh, that's for sure. You don't ever want to do that because, uh, you're going to end up, uh, that'll end up costing you a lot. That's a big mistake that people make. And, uh, people do make mistakes, uh, with their living and their so-called downsizing and some people upsize in retirement. And that's not a good idea either. Always. You gotta, you know, if it's not realistic, uh, Depends on your situation, I guess. So what's another one here?

Just looking at health care costs. So we found an article that said that 95 percent of people that are 60 or older have at least one chronic health condition and 80 percent have two or more. So just getting everyone excited to get old here, Tony. Yeah. A lot of people don't realize that Medicare will only cover about 80 percent of the costs for outpatient care. So 20 percent is on your plate and it tends to add up fast. So Fidelity came out with a study last year that said that your average person is going to have to pay one hundred and sixty five thousand dollars out of pocket for medical expenses. throughout their retirement. So that's a lot of money. You know, what do you do? It's a good idea to basically carve some money out and say, Hey, this is for those healthcare expenses down the road.

Well, yeah. Aren't taxes and healthcare are the two biggest expenses you're going to have in retirement. Right, Ken?

Yeah, absolutely. Those are the two things we want to, you know, again, the 10,000th reason that I think you should meet with a financial advisor, have them look at your entire situation. We'll take inflation, health care, taxes, long term care, all this stuff into account, give you a percentage probability of success. And, you know, when those numbers are high, then you can feel very confident retiring and doing what you want to do.

Yeah. Well, I mean, one hundred and sixty five thousand dollars. Most people are going to spend at least that out of pocket over their retirement on health care. And that does not include long term care costs. That's the that's what's crazy. People think, well, yeah, because assisted living or a nursing home is expensive. No, that's the out of pocket costs for your just general health care. And a lot of people, I think, have the misconception that Medicare is going to cover everything. But there are still costs. There's still premiums. There's still co-pays. There's still drug costs. There's still, you know, you got to have something that covers hearing, vision and dental because Medicare doesn't cover that. So there are things Medicare doesn't cover. There are other insurances you're going to need. So that is important to understand. I'm glad we talked about that. Anything else? I think we have time for one more item, Ken.

Just last thing is just have a conversation with the people you love about how you want things to go when you get older and then eventually when you pass away. Super uncomfortable conversation for some people. So we recommend just start small. You don't have to necessarily tell them what your net worth is or show them the trust, but trust. just tell them a little bit about what your game plan is, what's important to you, what your wishes are, basically what kind of legacy that you want to leave. And as time goes on, you can sort of get into more of the nitty gritty if you want. This is a great time to mention to all of our listeners and viewers, now is a great time to create an estate plan. Maybe it's a will, maybe it's a trust, parv attorney, patient advocate, pour over wills, stretch IRA letters, all of these things can potentially be really important. So we do have a deep bench here at Summit and we've got a group of attorneys that we work with that can help set this stuff up for you. The bottom line is you do not want a judge making decisions in probate court about how all of this stuff is handled. So we wanna make sure that we get it on paper. We wanna make sure that your family and loved ones know exactly how you want things handled. And that is a great way to not fail at retirement, Tony.

Yeah, it is. Well, I'll tell you what, Ken, this has been a great discussion. Let our listeners know. I'm sure if they have questions, they can contact you. And if they want to get a second opinion on where they're at or get that financial plan in place, a retirement plan in place, a written plan, how can they get ahold of you to set up that no charge, no obligation consultation? Yeah.

Give us a call at 586-226-2100 or go to our website, summitfc.net to address all those concerns.

Thanks, Ken. Thanks, Ken. And listeners, and especially for our viewers, head on out to that beach. We're going to leave you with that picture of Ken. I think that's fantastic. And that does it for today's episode of Money Talks with our host, Ken Wink. I just can't stop laughing at that picture, Ken. Thank you for joining us for Money Talks. Don't head into retirement without a strategy that addresses both income and taxes. For more information, please contact Ken Wink at Summit Financial, working with people you trust. Call 586-226-2100 or visit summitfc.net. Join us again soon for another episode of Money Talks.