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3 Habits of Successful Retirees

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3 Habits of Successful Retirees

On this episode of the Retire Once Show, Johnathan and Melissa discuss the difference between a successful and unsuccessful retirement. They share 3 habits of successful retirees. They also answer a question from a listener who wants to know what to he should payoff prior to retirement. Does it make sense to pay off your house before you retire? Check out this episode to find out.

- Johnathan Rankin CRPC® CEPA®, Founder & CEO
-  Melissa Rankin - Wealth Management Advisor
- Theorem Wealth Management

#TheoremWealthManagement #RetireOnce #RetirementPodcast

Disclaimer: Johnathan Rankin is a Registered Representative of Sanctuary Securities Inc. and an Investment Advisor Representative of Sanctuary Advisors, LLC. Securities offered through Sanctuary Securities, Inc., Member FINRA, SIPC. Advisory services offered through Sanctuary Advisors, LLC., an SEC Registered Investment Advisor. Theorem Wealth Management is a DBA of Sanctuary Securities, Inc. and Sanctuary Advisors, LLC.
Retirement Podcast


What makes a retirement successful? Nobody plans on having an unsuccessful retirement, but in reality, sometimes it happens today. We are sharing three habits of successful retire. So that you can maximize your retirement, all that, and more on today's episode of the retire once show

hello and welcome to the retire. Once show the show designed to help you get to retirement, but most importantly, stay retired. I'm your host, Jonathan Ranken. I'm the founder and CEO of theor wealth management. And I am joined as always by my lovely co-host. Hi, I'm Melissa Rankin. Thank you so much for joining.

We have a great show for you today. We are going to be sharing the three habits of successful retirees, but before we do that, what do we want people to do? Mel? We want you to subscribe. We want you to follow us along on this amazing journey. That's right. Hit that subscribe button so that you're notified every time that we release a new episode.

But, uh, now I think we have to get into it, but before we do don't we have something else for him. We actually do. We have a, a listener question and I think this is a very common question. We got a question for Matt and he said, I'm thinking about retiring in the next one to two years, I have some cash savings and I'm curious, what should I have paid off before I retire?

And to the everybody who's listening. I apologize. Allergies have gotten me a little bit, uh, caught up, so you'll have to forgive my voice. Yeah. Trust me. It's worse for me than it is for you because I get to live with it. Every single. But we carry on. We carry on. So, uh, bless you in advance, you know, of the times that we might have to cut so she could sneeze.

I apologize if that happens. That's right. But let's get back to Matt. Let's get back to Matt, Matt, there's a number of different forms of things that you want paid off. Now. He didn't mention what he wants to have paid off or what he should pay off. We have no clue what kind of debt he has. I think he just means in general, in general.

Okay. So let's go through. I would say the, the big ones, obviously there's the house, the biggest one, the biggest one, most likely most, yeah. This is a very polarizing, very polarizing, you know, piece of debt that I've found, you know, throughout my experience that people always, either need to have it paid off by the time they retire or it's something that they wanna make sure they have the most efficient plan.

Well, naturally it's usually the biggest expense it is. But when you think about, if you re let's say you refinance over the past couple years before rates decided to double on everybody, but let's say you refined at a very low rate around, you know, two and a half or maybe 3% kudos to you if that's the case.

Yeah. Very, very much kudos to you. Uh, do you pay that off? Just because that is something that is in your mind of, I want to get to retirement and have my mortgage.  and I think this is with it being an emotional decision. It really is going to depend on the rate. And also if it is something that you have, if you don't have personal comfort with that debt, then yeah.

Have it paid off. But if you want the most efficient, I would say, um, you know, on paper, financial plan, well, it's going to come down to the rate. If your rate is 3%. The odds are that you could get a better overtime, a better return in any sort of market than 3% that will help pay that down. So your, your money is better spent investing it as opposed to paying that down, but it really comes down to a comfort level with that debt.

So in your opinion, if he has a low rate, maybe hang onto it. Absolutely. If you've got a, if you locked in an extremely low rate and you're comfortable with that debt, knowing that it's going to impact your cash. Uh, then, you know, then yeah, I would say keep that debt. If it's something where you say it's going to stress me out, it's going to weigh on me and I want this paid off.

By the time I retire, then pay it off. You know, sometimes in finance, yes. There's a correct answer. That is right on paper, but it makes you more uncomfortable. And is that really what retirement's about is being uncomfortable? So of course not, nobody wants to be uncomfortable after the house. I think the next big item that most people have is a.

Yeah, either car or sometimes credit cards now, cars, it depends on, I would say how often you drive it once again, the rate is going to be a factor there. What is that payment? You know, how much longer do you have to pay on that? Do you want that car forever? Yeah. Obviously getting debt free is, is a goal for a lot of people, but it's just making sure that you're putting that cash savings to the best possible use and the options.

Either paying down the debt. And I would say stack rank everything by interest rate because the other option is you invest. I mean, those are really the two options that you have now. Obviously the investing world doesn't, uh, doesn't feel great right now being in a bear market and all, but over time, I would say there's going to be returns that at some point we talked about before, my big prediction is that at some point in the future, the stock market will be higher than it is today.

We just don't know when we sure hope so. Yeah, we definitely. Sure hope so. Uh, but I think looking at where your highest. Interest rates are, if that's your car loan, then yeah. Knock that thing out. If it's credit cards, then you want to aggressively pay those things off, because let's say you decide, you wanna put that, you know, put paying off those high interest rate debts and you want to put off, put that off until you're retired.

Well, the reality is you're probably taking distributions from your retirement savings during that time and paying that off by taking money out of your retirement account. One you're paying taxes depending on the type of account you're taking that out of. So it could possibly push you into a higher tax bracket.

You might be withdrawing more than what your financial plan initially had in place, just because now you're taking out extra to pay off that debt, coming up with a plan before you retire to figure out where the best use of that money is. Now. I know that's what you're thinking about Matt, but really it's going to be on a case by case basis.

There's not one way to. Pay off all your debt and that's the best place for your money, because the reality is depending on the low rates, I know some places, some cars, they might have a 0% interest rate. Do you really wanna pay that thing off? Chances are, if you have 0%, you're gonna wanna hang onto that car, especially if it's a car that you like, right?

Yeah, I think so. And that's why incorporate all this stuff in your financial plan figure. What your debt looks like based on the interest rates. And then go from there, start off with the highest interest rate. Knock that thing out and then move on to the next one. Once you've gone over all the items that you might actually wanna pay off there.

Things to consider maybe purchases you wanna make or trips you wanna go on. Yeah, that's a good point. There are items that aren't necessarily on a balance sheet that maybe you have planned, for example, travel. I know that's a big goal for a lot of retirees is to start taking bigger trips or maybe there's a destination that they've got on their bucket list that that's kind of the first place they go after they retire or going to see family grand.

Yeah, I guess that would be considered a vacation for most. It is for most it is, but making sure that you're, if it's, let's say a larger trip than what you're used to earmarking that money, setting that aside not factoring that into your financial plan is a good way to, you know, I would say pay that off in advance, but it's not necessarily a debt that you're paying off.

The other things that you might wanna factor. Let's say you might need a new car. If you're planning on getting a new car in the first or second year of retirement, or even the first three. Earmark that put that money aside. Don't factor that into your retirement plan. And one thing, a lot of people don't anticipate college or weddings, if you're planning on helping your kids with, uh, with a wedding, which I just have to say, if you're planning on doing that, that's a great job as a parent for you.

I mean, it is coming from two kids where that was not the case for either one of us college or wedding. No offense, mom and dad, but that's something that really, I mean, Doesn't really happen in today's society. So if that's something you're actually planning, I think that's a great thing. Absolutely. I mean, our kids probably won't get those things paid for  because they, I think they should work for it, but we've got a long way to go until they, uh, they get there.

But putting that money aside, all of those different things, if you have any sort of large purchase earmarking that money putting it aside, so that way it's outside of your retirement plan. And then you can plan accordingly to make sure that your retirement will be success. And that all those major purchases that you want are, are factored in.

Absolutely. Matt, thank you for the great question. Shifting gears a little bit. We're gonna talk about the three habits of successful retirees first, before we even talk about the three habits, I think we have to talk about what is a successful retirement. Well, do yourself a favor, go to Google type in retirement and just hit images.

I think isn't that? What you get the hand in hand stroll on the beach. Um, you do see a lot with grandkids. You, you do the one throwing it up in the air. You see a lot of photos of water. I, I don't know why it seems like retirement and water kind of go hand in hand as far as Google is concerned. So hopefully you can swim.

But what I think that is a good question. If you're starting to think. I want to set up for a successful retirement, but really what is that you think of is retirement success just I've got enough money to pay all my bills. Is that successful? I wouldn't think so. I think there's so much more that goes into it.

I mean, it's, you're supposed to be personally fulfilled. Yeah. I think that's a good thing. And financially that is, and you wanna make sure you're financially fulfilled or else I would think, think that was an unsuccessful retirement, but, okay. So let's kind of back into what is an unsuccessful retire.

Well, you're probably not financially prepared. Yeah. Going back to work. I would say I'm. What about, uh, if you're just bored, boredom is a big one, or if you're not doing what you thought you would be doing. I mean, if you thought you were gonna be traveling and seeing friends, family, kids, the world, and you're not doing any of that, if you're just kind of hanging out watching birds or if that's, if you wanna be watching birds.

I mean, I don't know. I'm just saying it's probably. Gonna look a little different than you thought. If it's unsuccessful, we, we just lost an entire audience of bird Watchers. I'm so sorry. I hope that actually yesterday I did watch a, uh, a news segment with my mother-in-law about the fact that since 2017, we have lost 2.9 million birds.

So that's, that's actually that, that's what made me think about the bird. Factor. So my wife is now a bird watcher that is good to know. Now that we've talked about what Google portrays as a successful retirement, let's actually talk about what three things make a successful retirement. First up engage in an active financial plan.

A lot of people don't know what this is active planning. I feel like is different than just financial planning or retirement planning, because there is a large segment of people who believe. I did a financial plan once and I'm good to go. It said was good. Said didn't forget it. Method. Yeah, look, we're not baking chickens here.

Okay. This is not that we don't have anything on roast in the oven. No, nothing on roast in the oven. This is not said at forget it. It's not like an estate plan or, uh, or anything like that. This isn't something that you can do one time, put it in a file on your computer and say, okay, I'm good. Because markets change.

I think that's pretty evident as of today. And I would imagine that there's a lot of people whose retirement looks different today than it did last November because of where the market was. Absolutely active planning allows you to put a routine together around how often you're going to update your financial plan.

This gives you the ability to just check in with where you're at, based on the market cycle. And really the, I would say the most successful retirees have a schedule around how often do they update. Not only that, but they allow for flexibility in that financial plan. I know we talked a little bit about that before when talking about withdrawal sequencing, but there are going to be good years where maybe you could spend a little bit more, but having flexibility in your life as well, because there's going to be years where you might have to, you know, tighten up a little bit and, and not be so, uh, you know, rigid.

Yeah. I mean, if you think about it kind of like maintaining a. You always need to take it in for an oil change. Think about that. Like the maintenance, but you never know when you're gonna need to get new tires or brakes or whatever else goes wrong with cars. But I think, I think you make a good point there.

Maybe we should start putting a little sticker on the top left of your windshield that says oil change. 3000 miles away from here. If only somebody had thought of that. It, I know, but if you put now retirement plan and you just put that every six months wi you know, along with your oil change, I think that's a great idea.

Make 'em go hand in hand while you're getting your oil changed. You can call us, we'll help put together that financial plan. And we could check on that. Let's be honest. You're gonna have some time to kill while you're sitting there. I mean, they have to look for things that could be wrong with your.

That's right. They have to inspect everything, even though you just went there for the oil change and then there's always that one issue. That's oh, we didn't see this coming. Oh God. Yeah. Ah, man, this is this isn't covered under that warranty. So you and we actually need to order the part and it's on back order.

So true for anybody who's had to take their car in recently.  that is probably sounds pretty familiar. That is very true. But putting that habit together, uh, making sure you have a routine around updating your financial plan, cuz this allows you to stress test in real time, how well you're doing and you know, making that a discipline approach to financial planning is, is very important.

And it's a very good habit that a lot of successful retirees have down very. Now that we've talked about what it means to engage in an active financial plan. We're gonna go into the second point, having an investment discipline. Successful retirees have this one down. Very good. They have a discipline around their investment strategy to be as unemotional with their portfolio as possible.

And that is, that is what you want to do when investing retire for retirement. It's easier said than done. I mean, it's your money. You've worked hard for this. Yeah, nobody, nobody likes markets like right now, but successful retirees understand that bear markets are a part of investing now. Retirees have invested for 10, 20, 30, maybe in 40 years.

They've been through market cycles, but in years, like now it is gets easy to forget that we go through extended bear market. It's easy to get caught up in headlines and I don't all the noise out there it is. And that's, that's part of creating that investment discipline is making sure that you have an asset allocation based on your financial plan, understanding your own risk tolerance.

And in markets like this. It always reminds people. Okay. What is my risk tolerance? How much risk can I stomach to the downside? Because over time markets are going to go down and yes, obviously this would be a lot better to be said at the top of the market where you're thinking, okay, can I stomach a 25 or 30% draw down right now?

Well, most people would say no, and maybe they're taking too much risk based on their own risk. So successful retirees have that investment discipline down. They don't get caught up in the momentum on either side. You know, they're not saying let's go all to cash and they're not saying let's dive all a hundred percent into the stock market.

It's kind of having a balance on both sides. Yes. It's an investment discipline. However, it's more or less being. Flexible with it and understanding that you're gonna hit highs and lows with it. I mean, there's, and that's a very good point. There's not this isn't us saying, okay. Put together NA allocation and never touch it.

You can operate with what we like to call an overweight method where, you know, there are times where markets look expensive, like they did last year. And we had conversations with the clients that say, Hey, I know we have a 60% stock allocation. That's part of our asset. All.  right now, things look expensive.

Why don't we trim that down to 55 or 50% and putting in some guardrails there and then same thing on the upside. And when markets go up, everybody wants to take on more risk, but having a parameter on the, on the top side to say, okay, at most we're gonna go to 65 or 70% in stocks. So having that on the upside and the downside will help provide that discipline so that, you know, One, I know how much risk I'm taking one, I'm exposing myself to, but two, you're never going to get emotional with let's.

Let's get all the way a hundred percent outta the market or all the way a hundred percent in because that never works out for investors. So with our second point, what we're saying is have an investment discipline, but. Kind of try to keep your feelings out of it, I guess, as, as best as you can. And that's where that's where having a financial advisor really does help.

And I, I let us be emotionless for you. Yeah, we can, you know, that is our, that is our job. That is what we try to do. We want to show you if we can put together a financial plan that. You can say, I feel confident in this financial plan and here's a investment portfolio that's based on that plan.

Absolutely. I think that is, that is what successful retirees do. And, and we've done that for a very long time with people. If you allow us to help you with that second point, it will lead perfectly into the third point, retire with a purpose. Now, this is a habit that I don't think many people think about until after they're retired.

So successful retirees have this one down well in advance, because I know we've talked about this before in previous episodes, retiring with a purpose. Uh, but I did run across this Forbes article that I found pretty interesting. It, uh, the title of it was why your retirement plans may fail on any given Tuesday.

Tuesday. So obscure. It is very obscure, but what the author looked at was how retirees actually spend their time. And, you know, obviously the, the biggest portion of a day was spent sleeping and, uh, I would hope you're catching up on a lot of sleep. Yeah. That's everybody needs sleep to be healthy. We know that the second biggest one was leisure activities.

Uh, but the biggest thing in there was obviously watching TV. That was. Where that would surprise me. That's where most retirees spent their time is, is watching TV, which, Hey, if that's you, hopefully you have some good show recommendations, but I think most people that wasn't the vision that they had set out for when they planned to retire.

And what the author talks about is a good practice for setting yourself up for success in retirement. Thinking about, or being able to answer the question, what will you be doing on any given Tuesday? Uh, the obscurity comes back in full force. Yes. And now he, he does answer. Okay. Why does he pick Tuesday?

Well, because Tuesday is boring. Tuesday is boring. It's you have nothing to look forward to is what he says. There's not a Thursday or Friday. I was like, well, that's grim. I wouldn't say that.  okay. You have the whole day of Tuesday. That is true. I guess more common than not Tuesday is kind of a, eh, it's Tuesday.

And that's what he, that was the whole point of that is the day where most people don't have anything planned. So if you're able to answer the question, what do you have going on Tuesday afternoon? If you have that day planned out, then it's likely going to be a success retirement. He looks at this as the ability to virtually stress test your retirement goal.

around how you're actually going to live life after work and based on Tuesday based on Tuesday. But that's how, that's what most retirees often forget is I worked all this time. I worked for 30 plus years. I want to stop working, but is it for the sake of just, I want stop working, but really what are you actually going to be doing?

And we've talked a lot about the mental health side of having a purpose, having something. You know, create that social connectivity, uh, making sure that you are fulfilling yourself in whatever you're doing, whether that's volunteer, work, playing, you know, spending time with family, whatever you're doing, just, it kind of goes back to the whole point.

Yes, financially you wanna be prepared for retirement, but you also it's. I would say almost equally as important to, to know what you're going to be doing. Personally, self fulfillment is a huge, huge part of. It is. And he does talk about how half of us are going to live past age 85. Oh God. Now assume you retire at 65.

That means you're going to have more than 1100 Tuesdays to fill. I don't know why that, that just sounds. That's that's a tough one. I don't know. That's a lot. That's a lot of Tuesdays. That's a lot of Tuesdays. Do you have them filled? Do you have them planned? That is the third habit of successful retirees is that they likely have their Tuesdays planned.

They have a, they have things in their life that give them purpose things in their life that give them fulfillment. And when you couple that with the success around the financial part, then it is a very well rounded retirement, because is it, it's not really well rounded when, Hey, you've got all the money that you need in the world.

You have no worries that you're gonna run out. But we're not doing anything with that in mind. If you have nothing going on on Tuesday, give us a call. Yeah. We'd be happy to help you talk to us on Tuesdays. And that, that is a great point. And if you do have questions about anything you could head to retire once show.com, you can ask us a question there.

You can schedule some time for us to connect. We'd be happy to help put together your financial plan to. If you're on track and, and what retirement looks like for you, but before we get outta here, make sure you hit that subscribe button because we want to help you on this journey. We want you to be a part of this, what we're doing here and, uh, with that I'm Jonathan Rankin and I'm Melissa Rankin.

Thank you for joining us.

Registered Representative of Sanctuary Securities Inc. and Investment Advisor Representative of Sanctuary Advisors, LLC.– Securities offered through Sanctuary Securities, Inc., Member FINRA, SIPC. –  Advisory services offered through Sanctuary Advisors, LLC., an SEC Registered Investment Advisor. – Theorem Wealth Management is a DBA of Sanctuary Securities, Inc. and Sanctuary Advisors, LLC. This communication has not been reviewed for completeness or accuracy, does not necessarily reflect the views of Sanctuary Securities, Inc. or Sanctuary Advisors, LLC., and is not a recommendation or endorsement of any product, service, or issuer. Third party posts do not reflect the views of Theorem Wealth Management or Sanctuary Securities, Inc. or Sanctuary Advisors, LLC., and have not been reviewed for completeness and accuracy. All further communications from this representative must be sent from and received by johnathan@theoremwm.com. For additional information, please refer to one of the following consumer websites: www.FINRA.org, www.SIPC.org.

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