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Planning Matters Radio / Peter Richon
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December 13, 2019 1:58 pm


Planning Matters Radio / Peter Richon

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December 13, 2019 1:58 pm

There are many ways to structure your retirement plan, but what is the optimal way? Author Tom Hegna has studied retirement in detail and wrote 2 best selling books on he topic of retirement planning. Listen in as he discusses with Peter Richon the optimal structure of a retirement portfolio.

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If you fail to plan, plan to fail.

How do you want your future to look? We want you to plan for success. Welcome to Planning Matters Radio.

And welcome into the program. This is Rich on Planning, Planning Matters Radio. I am Peter Rishon, founder and CEO of Rishon Planning, your local independent fiduciary financial investment and retirement planning firm right here in Fuquay Varina, North Carolina. I am a Dave Ramsey smart investor pro.

So happy to have you along for the ride. And on today's program, we have a very special guest joining us. He is one of our favorite guests on the program, author of the books Paychex and Playchex. And don't worry, retire happy host of the PBS special by the same name.

He is Tom Hegna. Tom, welcome back in. Thank you, Peter. Great to be with you.

Always a pleasure, Tom. Now, last time we had you on the program, you were announcing what you called your trial retirement. You were going to take some time off. You were going to relax.

And I'm curious as to how that went. You know, I've always said, you know, what good would it be if the guy who writes the book, don't worry, retire happy, doesn't retire and he's not happy, that wouldn't be very good. I really wanted to see, you know, could I retire? Would I be bored?

Would we drive each other crazy? We recently built a house up in Flagstaff, Arizona for the summer. And so we went up there. I joined a country club for the first time in my life. I played golf almost every day, played in tournaments, had a lot of fun.

I can tell you this. I was not bored at all. We did not drive each other crazy. We felt like we're back in college again.

It was it was really a lot of fun. And, you know, some people don't want to retire and they want to keep working. And I think that's great. I do want to retire.

Okay. I mean, I've been working really hard for the past 30 something years. And I mean, harder than most people. And I've basically had three careers in my life.

And I really do want to know I'll still do some speaking and I'll still do some writing, but I'm not going to be doing 200 days on the road and everything. But here's some of the things I learned from my from my retirement of trial retirement. Number one, you know, I tell everybody when you retire every day of Saturday, because if you think about it, what day do we what day of the week do most people spend the most money? It's Saturday. They go to Home Depot, they play golf, they get their hair done, they get their nails done. Saturday is the day most people spend the most money. Well, when every day is Saturday, guess what happens? You end up spending a lot more money in retirement than what you think, because you know what happens?

You don't have as much I didn't even wear a watch for three months. So we were kind of timeless. And he'd say, Well, what do we want to do today?

I don't know. Let's go. Let's go have a happy hour at the club. So we go over the club, we have a happy hour, happy hour turns out to extended happy hour, then some friends show up, hey, let's go to dinner.

And then somehow the dinner ends up on my tab. And all of a sudden, I was spending a lot more money than what you know, you would think you think in retirement, you're gonna spend less. And the first thing I found is that, you know, you're probably going to spend more. Tom, you're a pretty go go kind of guy, time to reflect and kind of downtime. Did you find yourself antsy at all to get back to it?

I really didn't. I mean, I did get back to it because my schedule is already booked for you know, I was already booked for the fall. So I had to get back to it. But if, if my schedule wouldn't have been booked, I think I could have just continued in retirement.

I did not get antsy for work. But what I did was some things that I hadn't done in the past, I refinished two pieces of furniture, which, you know, I don't have time to refinish furniture doing what I'm doing now. I had time to do some things in the garage and do just just do some stuff that normal people can do that I really couldn't have been able to do over the past 30 years. I spent my, you know, my days and weeks and planes, trains and automobiles.

So I don't know, maybe, maybe it's different for me, but I'm really ready for it. And I do love to play golf. I do love to play tennis, tennis lessons. One of my goals was to beat my son in tennis, and I did. And so I just set up different goals. It wasn't work goals. It wasn't financial goals. It was fun goals, you know, and, and, you know, I can still not justify the country club. I don't think anybody can. The numbers never pay for themselves.

You'd have to play golf, like every single day. And even then, if there's cart fees and other things, you really can't justify it with numbers. But I was listening to another speaker, and he said, you know, there's two types of profit, there's financial profit, and there's life profit. And he said, sometimes we do things that we say it's not financially profitable, but we really get enjoyment from it.

It really helps our whole life. And he said, that's life profit. And that kind of stuck with me that, you know, some things that I've always been very financially conservative, I make sure everything's covered, I pay the bills, blah, blah, blah. But there's some things you got to do for life profit, you got to take that trip, you got to go do some things.

And I talk about that in the book about being happy. And then if you have enough income, guaranteed income coming in, then you can actually spend money. And it is the spending of money in retirement that allows you to enjoy retirement. It's the travel, it's the cruises, it's the dinners out.

It's the bottles of wine with your friends. That's how you enjoy a retirement. I always tell people, I don't care how many millions of dollars you got stashed in some account somewhere. If you're scared to death to do anything with it, you're always worried, oh, the market crashed. Oh, interest rates are low.

Oh, I better not take that out. I don't want to spend it. If you live your retirement like that, that's a just in case retirement. What happens is when you die, your kids are going to join the country club, they're going to buy a new boat, they're going to go on a cruise.

And so I tell people, you know, you're in your go-go years, you're young, you're healthy, that's when you need to travel, that's when you need to do the things that you want to do. And don't just think financial profit, also think life profit and emotional happiness. Well, speaking of the financial versus the life, the money versus the mental aspects of retirement, Tom, what do you feel financially has helped you to enjoy that life profit throughout retirement as much as possible? Well, I mean, I've always been a big saver. I mean, I've saved over 20% of my income and sometimes 30, 40% of my income for many, many years. So I was an aggressive saver. I don't waste money.

I don't want to live a cheap life, but I want to get a good value. I want to get the most for the least, that type of thing. And so I've always been a good saver.

But you know what? The problem is good savers aren't good spenders. And in retirement, it's not about saving anymore. See, I've got to break myself from this thought of I got to save more money.

I don't have to save any more money. That's what I did when I was working. Now it's time to turn that into income.

And the problem is if all you've got is a 401k or a brokerage account, those are assets. And you're always, you've been trained for 45 years not to touch those assets. Oh, we got to save it. We got to grow it. We got to protect it. We can't touch it. We got to save it. We got to grow it.

Well, guess what? You've been psychonomically programmed never to touch those assets. And most people will go to their graves never touching their assets.

Think about it. Your parents never spent their assets, but that's what you're supposed to do. And the only way that you can really do that is to turn a portion of that. For me, it's a significant portion. But for most people, it should be a portion of that should go into guaranteed lifetime income because you've been trained to spend paychecks. And so when you get a paycheck in the mail, you don't have any problem spending that because you know, next week, another paycheck will come in the mail. And that's what guaranteed income does to you. It's these guaranteed paychecks and playchecks. That's why I wrote my first book, because it's not just about having paychecks to cover your basic living expenses. It's about having playchecks so you can actually go out and enjoy retirement, that you can do the travel, that you can buy the bottles of wine with your friends, that you can go play golf or tennis or do whatever you want to do. So through your time in speaking to thousands over the course of your career, writing the books, hosting the PBS specials. Tom, have you found that what can help to prevent that just in case unfulfilled retirement is taking some of the asset base and turning it into those guaranteed sources of income, those paychecks and playchecks for retirement?

Yeah. I mean, it is so critical. And what I tell people, even let's say there's people out there, if they hate annuities or they don't believe in guaranteed income, look, the math is clear. For those people, if they would simply move their bonds or their bond portfolio over into a lifetime income annuity, it'll do two things automatically. Number one, it'll increase the returns of the portfolio.

And number two, it'll reduce the risk of the portfolio. That is guaranteed because the way that the annuity functions inside of a portfolio, it functions like a triple A rated bond with a triple C rated yield with zero standard deviation. So that may be over the heads of many of our listeners, but for a financially astute person, they know what standard deviation is and they know what a triple A rated bond and a triple C rated yield is. And so it gives you a high yield with a very high level of safety with no fluctuation. That's what the standard deviation is. And so even the most sophisticated listener today should move some or all of their bond portfolio into guaranteed lifetime income. That has been proven by PhDs all over the world. There's not a single PhD or a single economist that would say that is incorrect. That is math and science.

It's a mathematical scientific and economic fact. So for the average person, if they're in a 64% bond or stock portfolio, 40% bond, what I'm saying is to move 20 to 40% of that portfolio, the bond side over to an annuity. You don't have to move the stock side over, although we're in the record now that we're at all time record highs on all three markets. I guess the Dow just dipped a little bit. I mean, we're right at the all time record highs and I'm going to be putting out my 2020 economic commentary. And in the past, I've really focused on the interest rates and that interest rates are going to stay low as far as I can see. Well, now everybody knows that they didn't know that over the past eight or nine years that I've been saying it, but now I'm focused on, you've got to take and protect some of your gains.

You've got to lock in some gains. These markets do not go to the sky. The Japanese stock market has been down for over 30 years. The European stock market has been down for about 20 years. The emerging markets have been down for about 10 years.

These markets can go down and stay down for an extended period of time. And so I'm not anti-stock at all. I own some Apple, I own some Google, I own some Facebook, I own some other stuff, but I don't have the significant portion of my wealth in there. I have locked in my gains. I've locked in profits and I have guaranteed income, guaranteed to come to me for the rest of my life and my wife's life. And then we use life insurance to go to the kids. We bought a life insurance policy to go to the kids. We bought that for 15 cents on the dollar so we can leave them a million bucks tax free and it only costs us $150,000.

That's a great deal. So we did that for the kids and then we get to spend all the rest of our money. And we've got long-term care policies that protect us if we need long-term care. So I'm living exactly what I write about. I am doing exactly the things that I've told people to do for the last 30 years because it's all based in math and science.

These are not my opinions. These are the optimal ways to retire. Tom, you hit on a number of topics that I think does lead to doubt and worry in many people's minds. What about the fear of running out of money? What about the potential for long-term care? What about my desire to leave a legacy behind? You're saying this optimal portfolio helps address those major questions and maybe helps us live a more fulfilled, not a just-in-case retirement?

Absolutely. Because, look, if you've already established what you're going to leave to your kids, there's going to be extra money left over. I know that, but we're not going to live our retirement to leave money to our kids, which is what a lot of people do. Oh, we better not do that. We've got to leave some money to Johnny and Susie. We've got to leave some money to Johnny and Susie so they deny themselves a retirement to leave money to their kids. Number one, don't do that. I want you to spend all of your money.

The last check you ought to write out would be the undertaker and that baby out of bounds. But leave your children life insurance because you can do that for pennies on the dollar. Then you buy some guaranteed lifetime income, make sure you'll never run out of money no matter how long you live, and then you've got to have a plan for long-term care. Now, ideally, you're going to use long-term care insurance, but we don't live in an ideal world and people don't always have the money to do that. So on that policy that you bought to leave money to your kids, if you want, you can add a long-term care rider on there that if you need long-term care, there'll be money there to pay for your long-term care. So that would be a way that a dollar can solve three problems. Number one, it can be an emergency fund if you need it. Number two, if you don't need it and your diet goes to your kids. And number three, if you do need it for long-term care, there's a whole bucket of money there to pay for your long-term care.

So that would be a simple way to use these products. And this is what I write about in Paychex and Playchex and Don't Worry, Retire Happy. This is what I speak about. If people want more information, I've got a free YouTube channel, Tom Hagner, you can find it. And these are just common sense solutions. Everything I do, Peter, is based in math and science.

None of this is my opinion. I've done the research of the PhDs from around the world, the top economists from around the world, including Nobel Prize winners. And this is what the research shows you should do. And this is what I'm living. And I wanted to do a trial retirement. Now this year, I'm taking off even more time. We're going to take time off this winter and go skiing. And then next summer, I'm taking the whole summer off again. And then I'm getting close to where I'm going to say that's it. And I'll just do everything online from now on.

And I'm just going to go and be happy. Well, Tom, we know that there are very limited opportunities for a single dollar to multitask for us. Usually we're assigning dollars with very specific tasks, but where we can get that dollar to leverage, where we can multitask, it will definitely help to optimize that portfolio. Now, you are kind of a go-go kind of guy, three careers, not in full force back in your working career here. But back at it, what are you looking forward to most after your time off and in getting back to your work? Well, I set up some different goals for retirement. One is I want to get my handicap down to seven, which I did. Another one, I wanted to beat my son in tennis and I took lessons and I did.

And so I just set up different goals. I want to go on a Pentagon canal cruise. There are some places we want to go as a couple to travel and see. And I love RVing. I could be a full-time RVer. My wife can't.

So maybe we'll rent one every once in a while and go take it out. And so there's things I want to do. I lost my dad this year. I lost my best golfing buddy two years ago at age 56. So you start seeing that this is not a forever deal. I probably have 20, 25 really good years left. And then after that, health things set in.

I mean, they can set in at any time. But otherwise, mid-80s and 90s, you start slowing down and going in the slow-go, no-go phase. And so I've got 20, 25, maybe 30 years of go-go. And that's if I'm lucky. And that's if everything goes right. And so you kind of got to go out there and do it.

You only get one chance. And we certainly need to plan for more years of the go-go these days than maybe in generations past, though. Yeah. And step one in the whole process is they got to have a plan and they need to work with a financial professional, which is what you do, Peter. And people can't do it themselves.

You can't. Retirement is not a do-it-yourself project. And if you think you're just going to have a 60, 40 portfolio and cruise to retirement, taking withdrawals out of that, I'm telling you, you're going to fail in retirement, especially with this market at an all-time record high. When this market goes down, and it will, and there's retirees who are taking money out of there, the sequence of returns risk is going to wipe out tens of millions of baby boomers.

So I would just encourage your listeners. Don't be one of those baby boomers. Make sure you've got guaranteed income to at least cover your basic living expenses.

That's a paycheck. I've got more to cover my play checks because I want to have guaranteed fund too. I don't want to just be sitting around if the market crashes and say, well, I can't play golf today.

I can't play tennis today. And I want to sit there and worry like all these people do. So I've set myself up for, you know, to have a happy and successful retirement. And one last thing in the state of Arizona, where I live and in many States, but in the state of Arizona, all the money that's in life insurance and annuities is creditor protected. That means if somebody sues me or whatever, they try to come and get me, they can't get any of my, any of that, none of that, it's all protected.

And to me, that's important because I'm speaking, I'm talking, I'm all, I'm going all around the world. You know, any wacko that wants to sue can sue nowadays. They won't get anything. They won't get in.

They're going to be very disappointed. And so for your doctors, attorneys, you know, chiropractors, dentists, people who are at threat for lawsuits, just remember there are products that can protect you from that. And that's another thing. Well, Tom, there's an old saying about opportunity knocking and how frequently it does that and how long it stays at the door. Markets hovering around all time highs, taxes historically low, income payout rates that are available today. Do you believe this is maybe an ideal moment for the baby boom generation to seize on that opportunity?

Yes. If, if, if they don't have any guaranteed income, because I would, I'll tell you this, retirement's all about income. It's not about assets. It's not about the size of your 401k or your broker's account. It's not because you've been trained not to spend that money.

So you're not going to spend that money. The money you will spend is the money that you turn into guaranteed lifetime income because you can spend that every month. Because the next month, another check comes and then the next month, another check comes and the next month, another check comes.

And as long as you or your spouse is breathing, those checks are coming. And that gives you peace of mind. It makes you happy in retirement. Now the research shows you're likely to live longer as well. I mean, I could just go on and on.

We could, we could do hours and hours on this because it's all based in math and science, but there's an emotional side to it as well. We always love visiting with one of our favorite guests, Tom Hegna, author of the books Paychecks and Playchecks and Don't Worry, Retire Happy. Tom, we're glad to have you back, but also want you to, to enjoy that semi-retirement life. Hey, thank you, Peter. And we'll, we'll have another talk here soon. All right. Thank you, Tom. Appreciate it. Alrighty.

Bye bye. Well, if you would like to find out how to put any of those financial and retirement principles into practice in your planning, pick up the phone, give Rashan Planning a call. We're happy to talk to you about how to structure that ideal retirement plan, how to have that income allocation component for your retirement. 800-338-5944, the number to call, that's 800-338-5944. You can also get started going online,,, or give us a call for that complimentary financial investment retirement portfolio review and strategy session.

800-338-5944. We do again appreciate Tom Hegna joining us on this edition of the program. This has been Planning Matters Radio. The content of this radio show is provided for informational purposes only and is not a solicitation or recommendation of any investment strategy. You are encouraged to seek investment, tax or legal advice from an independent professional advisor. Any investments and or investment strategies mentioned involve risk, including the possible loss of principal.

Advisory services offered through Brookstone Capital Management, a registered investment advisor. Annuity guarantees are based solely on the financial strength and claims paying ability of the issuing company. Withdrawals of growth from annuities may be taxable as ordinary income in the year it is taken. Individuals should review contracts for specific details of the product's features and costs. Early withdrawals may subject the owner to penalties, fees or taxes. Fiduciary duty extends solely to investment advisory advice and does not extend to other activities such as insurance or broker dealer services. Advisory clients are charged a quarterly fee for assets under management while insurance products pay a commission which may result in a conflict of interest regarding compensation.
Whisper: medium.en / 2023-12-07 01:17:40 / 2023-12-07 01:27:35 / 10

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