Retiring is Hard: How to Think About the Financial, Psychological, and Social Sides of Retirement

Join Arsenal Financial advisors Doug Orifice and Jeremy Vaille as they open up their relaxed office conversations about various financial topics for everybody to hear. Today's episode is focused on retirement where you'll hear about:

• What are the factors that make retiring hard?
• Why starting early is important for those in their 20s and 30s (even with all of life's other expenses).
• Why people 10 years or less from retirement (T minus 10s) need a different approach.
• The psychological impact of preparing for retirement and the trade-offs to consider.
• How to approach dealing with the changes in sense of purpose and social connection when you stop working.
• How financial planning tools and Doug and Jeremy's experience can give you the confidence to help make retiring a little less hard.
• What's new in Hanover and Watertown.
• And of course some dad jokes from Jeremy to wrap it up.

Learn more about Doug, Jeremy, and Arsenal Financial at arsenalfinancial.com or call (781) 335-9100.

Securities and advisory services offered through LPL Financial, a registered investment advisor. Member FINRA/SIPC. The information in this podcast is educational and general in nature and does not take into consideration the listener’s personal circumstances. Therefore, it is not intended to be a substitute for specific, individualized financial, legal, or tax advice. To determine which strategies or investments may be suitable for you, consult the appropriate qualified professional prior to making a final decision.

Transcript

Doug: 0:04

Hey, welcome to the Arsenal Money Clip Podcast. Two guys trying to give the people a listenable podcast about money. So we're coming to you from Watertown, Massachusetts, and Norwell, Massachusetts. Arsenal Financial is the name of our firm, where we help people with financial planning and investment management. Help clients with a whole number of topics. My name is Doug Orifice. I'm a financial advisor. I've been an advisor for 25 years. I'm a product of the big bank, big brokerage world, but I've been an independent advisor for the last 14 years, coming to you in a black t-shirt representing our local record store.

Doug: 0:38

I think that's part of the DNA of us and our podcast is, this is not advice that comes in a stuffy suit. We're not trying to show how smart we are. These are pragmatic solutions to really, really important issues that our clients have, and that's what we do every day at Arsenal Financial is try and help people to get from point A to point B, whatever that is. So I'm here with my friend and partner, Jeremy Vaille. Hey man, how you doing? (Jeremy: Doing good.) You jacked up on caffeine this morning?

Jeremy: 1:05

Oh, yeah, always. Too much.

Doug: 1:08

You know what's killing me? (Jeremy: Whatcha got?) I've been out of iced coffee this week. I've been so busy I haven't been able to make it like to the grocery store to get iced coffee and I've had to revert to hot the last few weeks. It's tough, I mean, it's fine.

Jeremy: 1:21

You already got a little sweat on. Hot coffee in the system doesn't help.

Doug: 1:24

No, no, I got to get back on the iced coffee train. I got to put it on my schedule to go to Star Market today. Go reload the iced coffee, you know. So I'll give you guys a couple nuggets about Jeremy. Jeremy, born introvert and also, as he would put it, a recovering engineer.

Jeremy: 1:43

Self-proclaimed introvert.

Doug: 1:45

Also one of the nicest guys you'll ever meet. We have a couple names for you in the office. One of them is the financial bodyguard, because you like to work out. You're a big guy, you like to protect people. I also call you behind your back, I call you the financial teddy bear.

Jeremy: 2:01

I don't know. I don't know what's better or worse.

Doug: 2:03

So once a week, Jeremy and I are just one wall away from each other and it's just like sometimes people just need like the financial hug and I think you're really good at that. So hey, this is me giving you some compliments. (Jeremy: Appreciate that.) I think you're pretty good at this stuff, man.

Jeremy: 2:16

Well, like you, I'm also not comfortable with receiving compliments, but I appreciate it, thank you.

Doug: 2:26

This kind of gets into why we do this right. So again, our Arsenal Money Clip podcast, this is a chance for us to just take our conversations that we have day to day, whether it's on the phone or when we're lucky enough to be in the office together and bring these conversations a little bit closer to our not only our clients, but our community too. Jeremy works hard all day and is usually meeting with and talking with clients and most of my time is one-on-one with clients as well and we don't really get to cross-pollinate that. We don't really share meetings a whole lot. I wish we could share all of our meetings, but divide and conquer it is, right. So this podcast is our opportunity to take some of our conversations that we're having individually and then, even better, our conversations that we get to have when we're not in meetings, whether it's a Tuesday morning with our Starbucks or Dark Magic and just catching up and talking about what's going on that week and the week ahead.

Doug: 3:15

So hey, let's get right into it. This is the t-shirt today, buddy. Retiring is hard. 

Jeremy: 3:21

Right. Why is it so hard?

Doug: 3:35

Man, you know this is what keeps our line of work fun. It's hard, but it’s hard in different ways for different people. I mentioned I’ve been doing this for 25 years so I’ve been privileged enough to watch so many people transition into retirement. It’s not always smooth. It’s definitely never the same. And I think that's what keeps this line of work interesting, challenging, and fun is helping people kind of not only financially transition into retirement but also mentally, pragmatically and logistically transition into working full-time, into not working full-time. And there's a lot that goes into it. It's not just, as we like to joke, reversing flow with your finances.

Jeremy: 4:04

Right. And financially speaking, I mean, it is the most expensive thing you'll ever pay for. That you can't borrow for.

Doug: 4:11

True.

Jeremy: 4:11

So it's hard.

Doug: 4:13

Before I learned better and before I knew better, we used to provide everybody with a printed retirement analysis and the scariest thing that used to be on this retirement analysis would be this little box in the upper right-hand corner and it would say cost of retirement. And that cost of retirement number would be oftentimes a giant seven-figure number. $8 million, $9 million, $10 million. Ultimately, I don't think that's that helpful for people to see. (Jeremy: Definitely not.) Just really scary, especially when you're going into retirement without $8 million. So let's back way up. You asked the question, why is retiring hard? I talk about this concept every week with clients. We both come from hardworking areas and hardworking families and we both had our first jobs pretty early. Jeremy, when did you have your first job? What age?

Jeremy: 5:05

I was working for the family landscape company, probably at 10 or 11.

Doug: 5:10

Yeah, right, I've seen the pictures to prove it. The minute I was able to have a working permit, I donned a red CVS vest and got a job as soon as I could to start putting money away for the things that I knew were coming down the line for me too, right? So, whether it's for your family landscaping company or a retailer, really early we start to be wired to work and to work and to work. And for some people that's at the age of 8, 10, 12, babysitting, landscaping company. My son, he's a serial lemonade stand guy, right.

Doug: 5:47

So like he's got that thing rolling. But we're not only wired to work, work, work, we're wired to earn and earn and earn. And then we're always talking with clients about being wired to save, save, and save. So it's really hard to slam on the brakes. Not only stop working and stop doing something that is really part of you, it's also hard to stop earning and stop saving and then allow yourself to get paid from the pot that you've saved from over a number of years. It's hard. So I think like number one, I joke about that retiring is hard bumper sticker or a t-shirt, but I really feel like that's the number one reason that retiring is hard is because it's just, it's kind of unnatural.

Jeremy: 6:35

Right. Yeah.

Doug: 6:36

I'm going to throw a maybe out there. Maybe the whole concept of retirement might have been a bit easier when the majority of workers were on some sort of pension. (Jeremy: Oh, totally.) Which used to be the case decades and decades ago. And is not the case now after the birth of the 401k plan and then the dialing back of pensions.

Jeremy: 6:57

Well, you go back to the 30s, when Social Security was created. You had a three-legged stool. You had Social Security, you had pensions from companies, and you had personal savings. This day and age, we're more like in a one and a half-legged stool, because pensions have essentially gone away. Now a lot of that burden is on the retiree or the saver to help support those retirement needs.

Doug: 7:18

Yeah, and not to mention when social security came about in the thirties, you waited until 60 something to get social security and the life expectancy was 60 something. So really, government wasn't on the hook for a whole lot. You didn't have a long retirement to prepare for, and that's not the case right now. When you and I are helping folks, we're really looking at a 20 to 30 year or more retirement. Which is why it gets associated with that crazy seven figure number of cost of retirement that we don't like to talk about anymore because it's not helpful.

Jeremy: 7:55

You have to live for 20, 30 years without making a paycheck on whatever you've stuffed away for 40 or 50 years in your working career.

Doug: 8:02

Yeah, so hey, I'll ask you the first question. Jeremy is a recovering engineer, right? So you worked for Boeing and then you transitioned into the financial industry about 15 years ago, working with this tiny little company called Fidelity Investments. But you've seen people retire, right, does it work?

Jeremy: 8:20

Yeah, it does work. It does work. (Doug: Tell me how, man, retiring is hard.) Yeah, well, the funny thing is and I was going to ask you, when is the best time to save for retirement? (Doug: Immediately.) Yesterday, right. You think about that like trajectory, right, because you want that eighth wonder of the world compound growth. So the earlier you save, the better, but that's when you have your highest expenses, your highest debt load, all the things. You got to afford all the things when you're younger. It's very hard to stuff away any amount of money for things that don't go towards essential expenses and things like that. It's just a really tough equation because you need to crack the nut earlier, better than later. And it's never too late, but the earlier the better.

Doug: 9:08

I'm going to give you a shout out to our first podcast, which is you talked about the cost of waiting, but this was on our inflation podcast and we were talking about the cost of delaying a purchase that, in theory, gets more expensive. So you know, here we can kind of focus on the cost of waiting as a saver. I've been doing this for 25 years, which, if you do the math, that means maybe somebody who I met 20 years ago, who was 48, is now 68 and their adult child is maybe 33. I've been talking with a lot of adult children, whether they're in their 20s or 30s. We still have these conversations about financial foundation.

Doug: 9:43

So we've had this conversation about, hey, trying to find a way to save and save aggressively now so you can give your future self a break. Because, yeah, rent is really expensive in the Boston area and yeah, you have this whole new subset of expenses which you didn't have maybe when you were in college or maybe when you were just out of college.

Doug: 10:03

Maybe you get your first mortgage payment, your first car payment, whatever it is. But I have to break it to these 20 somethings and early 30 something sometimes is that it's only going to get harder and it's only going to get more expensive. So you know, if you have the ability, especially in your twenties, to answer your question about when do you start saving, you know, the minute that you have that first job and you have the ability to A put into a 401k plan. B, maybe take advantage of a company match. One of the few cases that you're going to actually going to get free money in this world do it, and do it aggressively. When I say aggressively, that means there's the level of comfort that you have about putting money into the thing. Do slightly more than that.

Jeremy: 10:42

Get to your point of discomfort. Right?

Doug: 10:48

 Yeah, exactly right. So if it's, should I put in 10%? It's like hey, put in 15% of your pay and if that's really horrible, then dial back from there.

Jeremy: 10:57

And trick yourself. When you get that 3% raise, put an extra percent in. You're not going to miss it. So when you get that first paycheck, put 10% away. You're not going to miss that and it's going to be with you forever.

Doug: 11:09

Right. So we talk about the topic of retiring is hard. So I think number one is if you're earlier in your career, right, let's make it less hard on yourself by starting early. But I guess, JV, let's talk to our T minus 10s out there. You want to define what T minus 10 is?

Jeremy: 11:27

T minus 10, it's a play on words or an analogy to a rocket launch, right. Launch being the time where the shuttle goes off the platform.

Doug: 11:35

Oh my God. Of course, I ask you a question and you put your engineer hat on and everything. Unbelievable. Jeremy used to be an aerospace engineer. What does it mean in our world man? Somebody who's T minus 10 to launch?

Jeremy: 11:48

I'm getting there. T minus 10 means I'm ready to pull the ripcord within 10 years. And I've got a limited runway of working career. I'm going to do the thing. I'm going to stop working within 10 years from now.

Doug: 12:00

Yeah, sorry, I had to tease you for a second. I think that's where we end up focusing a lot of our energy, for clients is our clients that are within T minus 10 years to retirement. It's one thing to save for retirement if you're 25, 30, or 35 and actual retirement is a couple of decades away. For our quote, T minus 10s. It's a real thing, right? You and I are in our mid 40s I don't know, man, sometimes I wake up and I'm a little bit tired, right, and I can't imagine what it's like for that group up from us in our mid 50s where they've been working for 40 years and, you know, maybe they're just getting through those last couple years of putting kids through school or just did that, And taking care of, maybe, their own parents. And I think we both saw that growing up, right? It's tiring. Our T minus 10s, this is a real thing and we want them to get there.  

Jeremy: 12:54

Right, well, in the 20s and 30s it's all about savings rate how much can you put in there, put in the thing. When you get up there and you're T minus 10, it's more about how do we protect the thing and how do we move all the levers around to make sure that the transition is smooth and we have the sustainability throughout that whole life of the retiree.

Doug: 13:10

You say protect the thing. What do you mean by protect the thing? Give me more.

Jeremy: 13:15

You built the nest egg. You've done the saving. You were 30, 40, saved more than you thought you should, and that's worked out because you've had market growth. You've had returns that have now created quite a nest egg. So now how do you make sure that that nest egg is going to transition you into retirement and then be sustainable for those retirement years, right? So that's that big number that you don't have the luxury of 30%, 40% market correction anymore, like you did in your 20s and 30s. Now how do we battle that phenomenon, or that market return element or risk, as we need the money to be used for living expenses.

Doug: 13:53

I think what you're getting at is two things. It's A as we get closer to retirement, that T minus 10, it becomes a little bit less about growth and a little bit more about protecting that nest egg. So that's investing differently. And I think bullet point number two under that you see this in 2024 versus, you know, 2018, 2014, 2009, 2005. Here in 2024, if you're in your early fifties, what got you here won't necessarily get you there.

Doug: 14:32

I think that's the, we always talk about the t-shirt and the bumper sticker, right. So for our folks that we're talking to, that have passed that mid-career point and they've done it with the background of low inflation low interest rates. Because of those two things companies that can borrow cheaply, a risk-on environment right which has led to great stock market returns and led to increased housing values and whatnot. It's been this really strong backdrop for investors for not just the last 20 years. I'd argue probably the last 40.

Jeremy: 15:02

Even if it felt horrendous at times.

Doug: 15:07

Even if it felt awful. You know, in 25 years I would tell you that more than half of them did not feel great. So I think the yellow highlighter comes out. What got you here may not get you there.

Jeremy: 15:19

And the game has completely changed for you. What was once a thing in your 30s is not the same thing in the 60s. (Doug: What do you mean by that bud?) Both in market conditions, but also in your position in life, your energy level, like we were just talking about. So you know the dynamics of save, save, save, pump it into the S&P 500 doesn't work anymore in your mid 60s. So the game has completely changed for you. The landscape, the dynamics, the rules.

Doug: 15:46

So I think the big conversation we've had with those folks is trying to find a way that we can A redesign investment strategies that fit for that last crucial 10 years. Because there's one more thing that's obvious but it's not, and I think we like to just kind of put it out there with folks sometimes is that when you're in your late 50s, 75% of your working career or more is over. And your earnings potential is limited and your time to earn and save is limited. And that's super scary to talk about and to think about, but it's also okay because that's life and that's this journey. So I think we're super frank with people when we're talking about that. But I think that also helps to hammer home that if somebody's done a really, really good job for a number of years, they've done all the right things for 20, 30 years.

Doug: 16:34

They've earned the right to invest more conservatively, they've earned the right to be more defensive. As opposed to, maybe, somebody who didn't start early enough. Maybe it's just somebody who their career really just didn't get going until their 40s or 50s. Somebody who was I don't know, maybe a parent out of the workforce for the first 10 or 15 years, went back to school, went to night school, got an MBA at the age of 48 or whatever the heck it is, and that income didn't come until later, right? Unfortunately, you and I have to have the conversation with that person that that investment plan might be different because they weren't able to have that backdrop of saving for 40 straight years just because of those circumstances. It's still a math problem that we can work with. It's still something that we can work with and a puzzle that we can plan for.

Jeremy: 17:25

Back to your other point we always talk about don't take the risk you don't need to take. So if you've done all the things you've lived below your means, right, you've done the right thing, you've saved, you don't need to take excessive risk at that point, right, if the math works. So a lot of times we're talking about how do you catch up. It's taking more risk, saving more, working longer, cutting your expenses. There's a few ways to do that. But if you're fortunate enough to have done the right things and you're there, don't take the risk you don't need to take.

Doug: 17:51

Hey, I'd like to pivot the conversation about something that we've been talking to some of our clients with which you and I refer to as hey, sometimes you just got to go do the thing, right. So I feel like I've seen this movie play out a number of different times over 25 years and people have retired differently, and I definitely have a certain subset of clients that are so afraid to spend money and so afraid to quote do the thing. And doing the thing might be buying that second home in Southern Maine or Cape Cod or wherever it is. Taking the family on that once in a lifetime vacation or Disney cruise or something like that. So I think part of what we're trying to balance with folks is that it's not necessarily all about money and it's not about dying with the most dollars in your investment portfolio. It's about empowering yourself to actually do the thing.

Jeremy: 18:43

You don't win with the biggest number at the end. (Doug: That's right.) You know you win with actually breaking even at the end, leveling it out right.

Doug: 18:51

So yeah, I'm sure you'd agree, right, our initial client conversations with somebody, when we're just getting to know someone, it's really all about, hey, you know what makes you tick. What do you want? What are you aiming for? And if those things are, I want retirement to look like this. I want to be able to spend time with my grandkids and have my support of my family look like this. Then cool, let's try and find a way to get there and let's help empower somebody to do the thing.

Doug: 19:20

And I think another subset of retiring is hard is trading time. Does working one or two or three more years and losing the next three best years of your life, is it worth the trade-off of delaying the thing, delaying that big trip, delaying having more time with your family or whatever it is? It's not a black and white financial thing. I think that's where AI and chat GPT probably won't have necessarily a role in financial planning, because sometimes financial planning lives in that gray area where we have to think about okay, well, here's a real life decision and it's a choice you have to make and a risk you have to take. We know it's not going to work out perfectly, but how much do you want to do the thing, whatever it is? What's the risk worth? So, like, if retiring two years earlier makes your chances of running out of money at 95, 10% greater, is it worth the risk? And then we just kind of put folks in the position to make the decisions themselves, right?

Jeremy: 20:23

Right, and that's why I have a tough time with all the companies putting out how much you need for retirement. They put out all right, well, you need eight or 10 times your salary or you need 17.6 times your salary by the time you retire, right? Because there's so many, so many variables and things that are going to change and the assumptions that are part of that. It's just you can't put a number on it.

Doug: 20:44

Right, I even think of in our industry there was the rule of 5%, that became the rule of 4%, that became the rule of 3%, back to the rule of 4%. You know, in some ways it's great to have these guidelines but, as I say, like different strokes, different folks. People have different needs. (Jeremy: Benchmarks.) Yeah, some people don't want to die with $2 million in the bank. There's a book you recently read called Die With Zero, right, what's the premise of that?

Jeremy: 21:15

Die With Zero. (Doug: Talk about that.) It's essentially why are you deferring everything in your life? Now might be the time, the only time in your life that you can take that trip and climb Mount Kilimanjaro. Now might be the only time you can take your aging parent to Norway, a trip that they've always wanted to take. So is it worth deferring all those things to a place where maybe you'll have more money or you'll be in a better financial position, but now all of a sudden you can’t do it. You don’t have that parent anymore. You missed that chance. You can't climb Mount Kilimanjaro anymore because you're now mid-50s and you're not late 20s. The whole premise of the book is do the thing so that you don't regret not doing the thing at the end of your life. And, like we said, you don't win if you have the biggest number at the end.

Doug: 21:58

So retiring is hard. It really is. It's hard for a number of issues and it's always going to be a dynamic issue which is not just solved by mathematics. You know, our job number one is to understand people, understand their bullseye, understand what they're aiming for. Yeah, then put black and white numbers to it and a strategy to it, but also just to continue to be human about it.

Jeremy: 22:22

100%. So in your 20 plus years. We got this big goal coming up. We got retirement out there. Do you find, or how often do you find, that clients change their behaviors in retirement. And I'm talking mostly about spending or doing. So you've deferred these things until retirement. Now you're in that whole new world. Do you find them actually spending the money and doing the thing?

Doug: 22:47

Oh, wow, oh, there's so much here. So let's go with the spending habits first. That's absolutely not a uniform thing. I think I do watch people over time get more comfortable with the fact that they can go and spend the money. And I think I'm talking about the type of individual that has been super pragmatic for a number of years, wired as a saver, still looking for the sale items at the supermarket, right. And I think this is how my family rolls and this is how a lot of our clients roll, right. I think about that group of clients because that represents a good chunk of our practice, and I watch some of those clients start to loosen up and spend the money to do the thing right. The big family vacation or a remodel on the house they've been putting off, or whatever it is. So, yeah, I absolutely see that.

Jeremy: 23:38

Which they would never have done in their working years.

Doug: 23:43

Right, right, right. And it might've been beyond money. It might've been a money and a free time factor, because now there's the extra 40 hours that you have back. On the other side of the coin for changing behaviors, I have one client who I've had for over 20 years. Love this guy. This guy worked a full-time operations job, also had a small business.

Doug: 24:06

And I have a few clients that when they call and we joke about retirement for a number of years, I won't even say hi or hey, it's Arsenal Financial or it's Doug or whatever it is. I'll just say hey, client name, is today, the day you're finally going to retire. Just busting them. You know, I had one particular client that I would answer the phone like that for a couple of years and one day he's like yep, this is it, this is that call. I'm like no way, oh my God, that's so awesome. So this is a guy who I watched work really two 40 hour a week jobs, 40 hours a week for a company and 40 hours a week doing his own business. Now this particular client found the time, we did all the planning, and then the financial part was the easy thing. The psychological part, I think, like not running out of money and how is it going to work on the other end, man, did that figure itself out. This guy adjusted really, really well. Did some community service beforehand, found a way to do community service afterwards. Like to go traveling and camping beforehand in the small amount of free time that he had. Now does an absolute ton of that, probably like four times as much in different places. Also, has a small place in Florida and whatnot. Huge family glue guy and has the extra time to do that. So he's every bit as busy as he used to be, because he was used to being busy helping fix things and other people's problems for 80 hours a week and now he's found a new way to be useful and also have some enjoyment, which is well-deserved. So, yeah, you know it's a really good question and I know you agree with me on this, like our clients are sometimes our best teachers, right. You and I haven't retired yet because we're doing this podcast and we're still working and still help people with their money, right, and someday it's going to be us and our version of the story. But yeah, we have some great teachers and our clients that have figured out a way to tackle one of these things and it's amazing to see when it works out. 

Doug: 26:01

So there's another one over here too. This is the sense of purpose one. I think sense of purpose kind of relates to what we were just talking about. I got another great client this past week, a client who is reflecting back on the time served, and the quote kind of went like this it said, I worked for this place for 30 years, put in all this effort, then you leave, it's over, and then life goes on at that place without you. When you’re in the before retirement version of that quote it's well, I feel impactful. And what am I going to impact if I don't do this? And then, on the other side of the coin, this uncomfortable feeling of that company or that city agency or that division that you worked in, or even a small business that you might sell and turn over to a family member or a new owner, goes on without you.

Doug: 26:45

And then it kind of feels weird you know, and then you wonder about how you spent those last 30 years. These are tough emotions to deal with and maybe, almost like the Jeremy Vaille Cedar Cafe order that's the same every week, maybe we order up another few years of working because we don't want to face it.

Jeremy: 26:56

Yeah, and you see that time and time again in the corporate world where you get a new job or you feel like you're indispensable to the company. That job's posted before you're even out the door.

Doug: 27:09

Yeah, you had a stint at fidelity where I'm sure you saw that all the time. (Jeremy: All the time, all the time.) Yeah, well, let's tackle the last one, which you know it does kind of dovetail into psychological, and that's, that's the social piece. Coworkers. If things go right, your coworkers are your buddies. I feel like our Arsenal financial family, as small as it is, like this is an important piece of my social world.

Jeremy: 27:32

You're spending your best hours with each other. 

Doug: 27:36

Yeah, your most awake hours. You're literally trading your family hours for working hours and, depending on what you do, like may even bring out the best in you, right. It's a place where you have the most impact. That's a tough one. That's a tough one to let go of.

Jeremy: 27:50

That is tough. But you know a good client case study would be like when the one spouse retires and they're home, and then they've developed their new routine. They enjoy being home, they get their time alone, this and that. Then the second spouse retires and they're like what are you doing here?

Doug: 28:10

Absolutely happens. You know, being involved in the community here in Watertown, I've been lucky enough to meet folks at dozens and dozens of nonprofits. I always knew there were ways to volunteer and get involved, but really over the last five years here in Watertown I realized how easy it is to get involved and what a shortage of volunteers there are for nonprofits, for different endeavors, for just the things that need to happen day to day. Whether it's for the underserved or for kids or for different parts of the community. It is a lot easier to go out, get involved, and put your energy out there than I ever thought it was. And maybe that's not for everybody, but these last several years have been some evidence for me, as I learned through others, that there's absolutely avenues to a second act or a third act. (Jeremy: You just need to be slightly proactive about it.) Be slightly proactive about it. There's other people like you and there's the whole new social network just awaiting you in a new chapter. But it’s hard.

Jeremy: 29:09

Yeah, you don't want to be the some people we know retire and choose to do nothing. There's a few of those, right, and then things don't always go great in that environment. That's both psychologically, socially, physically. All things are impacted by that.

Doug: 29:25

So let's bring this all together. JV, how do we make retiring less hard? Right, name of our episode is Retiring is Hard. How do we make it less hard on folks? What do you think?

Jeremy: 29:33

I mean, just like in everything we do, earlier the better. Starting early. We end up retiring early, we end up living longer. So the earlier we can start to plan for that, the better. That's where the financial part comes into play. But it's also the psychological right, because the earlier you start having conversations about that transition, the less startling or jarring it's going to be. 

Doug: 29:58

Yeah, less of a surprise it is, right. Really, I think it all starts with financial planning, and financial planning is not just about black and white numbers, as I think we've unearthed here over the last 20 minutes or so. Starting early and getting serious in advance just makes the whole financial part easier. And, like you're talking about, too, planning ahead from a goal point of view, so it's not startling or jarring when you actually get to the goal. Number one, when you plan ahead, it sharpens your bullseye. You know what you're aiming for and if you're aiming for the bullseye long enough in advance, when the bullseye needs to change its size or its location, cool you can move it. You know what I mean. And it's easier to accept the eventual reality of getting to that big goal. And it doesn't have to be retirement. It could be buying that house you're not sure you can afford or helping a family member or whatever it is. But a lot of it is actually just establishing a bullseye and knowing that you're moving towards it, measuring your progress, and understanding where you stand. Probably the greatest tool that we use in the office is we use a package through a company called eMoney. We're doing this retirement income analysis for folks all the time. Shows the financial feasibility of where do you stand towards retirement.

Doug: 31:05

As you know, some people know and many don't, I'm a spreadsheet guy. I need to see things on a spreadsheet and unfortunately annoy some of my clients because I see the world through a spreadsheet and I'm trying to have them look at years and decades on a spreadsheet too. Not that I want to force my worldview onto people, but I do think that when you look at black and white data over decades, it does give you some insight into how all of your money interacts with one another. We know money comes from somewhere. You earn money from working, or you get it from Social Security or pension, fine. We know you're going to spend money. We know you've saved something. We know you owe money somewhere somehow. Credit card, home equity line, mortgage. What happens when we mush these things all together and we overlay taxes and we overlay inflation? Can we at least give a client some insight into where you stand? And I do believe we can.

Doug: 31:56

I can't help but to think back to 2008, 2009, where things were really, really scary at the beginning of the financial crisis and you have retirement savings values that dropped that year significantly. When we had the markets in disarray, I always went back to financial planning and for my clients that were T minus 10 years to retirement or less, I kept going back to this retirement income analysis to at least say, hey, what you're doing is not broken. There's no reason to stop putting into your 401k. You're still working, we still have time, and we will get through the cycle. And I don't know what the next cycle looks like, couldn't have predicted what the next whatever 15, 16 years are going to look like, but does give you some insight, especially when there's a rug moves from underneath you moment, like the financial crisis or like a death in the family or whatever it is. So that retirement income tool I think has been huge for our clients for years.

Jeremy: 32:49

Yeah, the planning piece, right. So when you start having that first conversation with clients about retirement probably more so in the younger population it's not just about when. The 20 question gun comes out and you find out a little bit more about what retirement means to somebody, what they're going to do in retirement. And if you're in your 30s, maybe 40, you haven't even thought about it. Because we go back to that wiring. All I know about is work, save, work, save, take care of my family, you know, continue down that path. Oh, I just know I'm going to retire at 65, but I don't know what that means. We stop breaking out the question gun asking about hey, what are you going to do in retirement? What are you going to do when you're 65 or 70? And just drilling into that, and even if they don't have the answer which nobody really does. Some do, but it's rare in my experience. But it gets them thinking about it. And then you meet with them the next year and they're a little bit more solidified because they've started thinking about that. You find that?

Doug: 33:46

Yes, 100%, 100%. Yeah, and that's kind of the sharpening the bullseye, right. I love that you brought up that point too, because it almost enables somebody to start admitting that they deserve to look at that at some point. You know what I mean. It's like, hey, yeah, I can do this at some point. So let me accept that this is a reality and then start to do something with it. Yeah, it's a real thing. (Jeremy: Helps take away the surprise too.) It does. I want to ask you really quick and then I think we'll wrap this topic up. When you're going over a retirement income analysis with your clients and they kind of see their progress over time or some of the what ifs, you know,what if we do this or what if we do that. When you're going through that with a client, what are some of the responses that you get or the feelings that you get maybe the first couple of times somebody is going through that?

Jeremy: 34:33

I think more often than not people are surprised at how well on track they are. And our tools, like you just talked about, they're really detailed. I even had a client comment the other day about how, oh, you're taking into account inflation and growth rates and all that stuff. Right, so it's really comprehensive. It gives a lot of conviction and confidence. And when you're able to take that 30,000 foot view, look at it for the end of the plan and oftentimes we're planning out into our late 80s, early 90s, and that could be 40, 50 years away, I think that helps solidify that confidence and that conviction. Around A being committed to the planning process and having that view that, hey, I'm going to make it. Because I think people feel that it's something out there and nebulous. When you can use the tools and you can put the process behind it, then you can put something tangible in front of a client and they can really see that both visually and in conviction from a third party, us, right, their trusted partner.

Doug: 35:31

So I think, to wrap it all up, yeah, retiring is hard. The whole concept is sometimes hard to latch on to, especially when it's a little bit further away. It's hard financially. It's hard psychologically. And socially it can be quite an adjustment. I think in our experience when we're utilizing financial planning, right and that's a big, broad term, but I think you and I would agree that financial planning involves more than finance. It involves more than your investments. It even involves more than your black and white income, expense assets, liabilities, numbers. It also meets these other non-financial topics like hurdling some psychological issues to try and get to where you need to go to, or hurdling some of the fears that you might have to go and get there. And I feel like financial planning can attack all of those things at once and give you the confidence.

Jeremy: 36:16

Well, it kind of brings me back to what we were talking about with volatility in the markets, right. That psychological element. That's really where our true value comes into play for our client. Right, the math parts, not going to say it's the easy part, but it's the easy part. Because when it comes to the psychological elements, that's where it's really challenging. We're not impervious to that either. We have emotions that come into play when it comes to these things and having that third party help with these decisions and these conversations, I think that's really helpful. Making sure that you stick with that plan. Just because the markets change a little bit this week or that week doesn't mean your goals and your plans have changed. We talk about that a lot when we're in the office together and we're having client meetings.

Doug: 36:58

Well, hopefully, for those listening whether it's clients or somebody who doesn't know us from a hole in the wall this has made you think about some things, made you think about your goals and what have you. If you have questions, feel free to drop us a line at info at arsenalfinancial.com. Hey, JV, let's move on to a couple of community things. We serve two main areas. I'm here in Watertown, Massachusetts, west of Boston, and you're in the office in Norwell today, but live in Hanover. Thinking about September, anything going on on the South Shore or your world in the beginning of the fall here that you're really excited about?

Jeremy: 37:30

We're getting ready to start school up, which is exciting. Get off the summer routines, get more plugged in with soccer, and I think we're going to do a couple of different things this year, maybe Cub Scouts or something music related.

Jeremy: 37:43

He's expressed some interest in doing either piano or guitar, which is awesome, and I'm working on cultivating a sourdough starter. Starting to make some bread. So I need somebody's help, though to teach me how to make it more sour. It's not sour enough, so any listener out there that knows how to make sourdough more sour, I want to know. Tell me how to do it. 

Doug: 38:03

Wow, you're a baker now. I love it. Calling all sourdough experts. Hit up JV. Give him some help. Not enough tang in the bread.

Jeremy: 38:13

Can you tell me a little bit about man camp.

Doug 38:15

Oh, man camp. So annual tradition for a group of dads and kids here in Watertown is for seven straight years we have had a bunch of kids that are buddies through youth sports and corresponding dads go hang out in the white mountains for a weekend. Where for the most part, cell phones don't work. We go to the Russell Pond campground just south of Loon Mountain. This year we had a total of 19 between the dads and kids.

Doug: 38:40

Here's some stats. Number of kids lost, zero. Amount of drama was fairly low. It was in the bottom 10th percentile of prior man camps. These guys are getting older and the older that they get, the more the dads get to hang out and have a good time. So, yeah, man camp was a huge success this year. The weather shined on us, literally. Didn't have a drop of rain. It was fantastic. So if you're listening and you're in New England and you haven't checked out Russell Pond Campground up in the White Mountains off exit 31 off 93, beautiful, beautiful spot. So yeah, we lucked out this year, man. It was great. It was great.

Jeremy: 39:15

Speaking of dads, you want the dad joke?

Doug: 39:17

I want to give one shout out and then, yes. I gotta brace myself for the dad joke of the week. One quick shout out to one of our biggest annual events here in Watertown, which is Watertown's Faire on the Square. Faire on the Square is going to happen on September 21st. Saturday, September 21st. That is noon to five. You're going to have all kinds of vendors, local businesses, always activities for kids. There will be music. There will be, of course, the Donahue's Beer Garden coming back once again. It's a great time. The Fair on the Square gets better and better every year. Shout out to Tammy McKenna of the City of Watertown's City Events team, who makes the magic happen there. So looking forward to that. With that man, I have braced myself. Actually, this is a good time to get our producer, Matt Hanna, on screen too, because we get the dad joke, and I think a dad joke is more powerful when you have more groans, right? 

Jeremy: 40:09

Yeah, I have two. One is for Matt, because I already gave it away to you, but the first one. How did the Swedish get so good at building furniture?

Doug: 40:17

Oh, god. Matt, I get so mad every time I don't know these. How?

Jeremy 40:26

No Ikea.

Doug 40:27

Oh, that's fantastic and horrible at the same time. I love it.

Jeremy: 40:33

And I guess you could say the blue ribbon joke that you already got. (Doug: Matt, this one's for you.) It's going to go for Matt Hanna. What do you call a caveman who is walking really slowly?

Matt: 40:47

Neander snail.

Doug: 40:48

Very good.

Jeremy: 40:49

Pretty good. A Meanderthal. That's an impressive response. I'm shocked.

Doug: 40:56

Well, you can tell that you and I are, like you know, the boring guys, and Matt is the creative of the three of us.

Jeremy: 41:02

Yeah, that's for sure.

Doug: 41:04

Love it. Shout out to Matt Hanna for always doing some great work with us here at Arsenal Financial. Thanks, Matt, appreciate what you do. (Jeremy: Thank you, Matt.) All right, friends, that'll wrap up this episode of the Arsenal Money Clip podcast. We hope this has been helpful for you and maybe, just maybe, maybe, maybe the whole concept of retirement is just 1% less hard after our chat today. Well, with that, we're going to wrap this up. Thanks for tuning in to the Arsenal Money Clip Podcast. If you have any questions, please check out our website www.arsenalfinancial.com. We have blogs on a whole number of topics, if you click on our blog section. If you have a question about anything, you can reach us at info at arsenalfinancial.com or you can give a buzz to the office at 781-335-9100. Thanks for joining us and we'll see you next time.

Matt: 41:55

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