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Welcome to the Stay Wealthy Podcast. I'm your host, Taylor Schulte. And today, with help from my good friend, Roger Whitney, we're walking through four retirement misconceptions. In fact, some of these misconceptions might not be misconceptions or misunderstandings at all. They might be concepts that you've never even considered. For example, is retirement planning a complex problem or a complicated problem? And why does that even matter?
Also, should you develop a retirement plan from the outside in or the inside out? Roger is the host of the Retirement Answer Man podcast and co-founder of the Retirement Podcast Network. And along with being a great person, friend, and financial planner, Roger is also a deep, critical thinker who will definitely get your wheels turning. To grab the links and resources mentioned in today's conversation, just head over to youstaywealthy.com forward slash 212. ♪
All right. Well, with that, welcome Roger Whitney to the Stay Wealthy Retirement Show. Excited to be here. What are we doing? All right. Well, before we dive into the meat of today's episode, you recently gave me a chance on your show to share my thoughts on the recently launched Retirement Podcast Network. So
I'd love to turn the tables and ask you to share your perspective, especially I was thinking, especially since you spent a good amount of time considering joining other large established podcast networks before deciding that they weren't really a good fit. So what is the retirement podcast network? Why did we launch it? And I know it's still in its infancy stage here, but like, what do you see it becoming in the next five to 10 years? I am really excited about what the promise of it can be.
And the reason I didn't join any other networks, because generally those networks are formatted around advertising. And I didn't want my show to be about advertising and talking about other people's products for money. And when you and I first talked about the Retirement Podcast Network, which was your idea, and then we built a version one and didn't do much with it and reignited it. I'm excited about the promise because my opinion, and it's going to get worse with AI, there are
few safe places on the internet to get quality information where there isn't a sales funnel or a pitch attached to it. And our show, we took a stand of we're not doing advertising. That's not what we do. I started the show 10 years ago to noodle on my craft and become better at my craft. And so I'm excited about the promise of the Retirement Podcast Network because at the start of
We focused on not what we want, but how do we make this useful and how do we make it a safe place to get information on Roth conversion strategies or how to navigate long-term care planning. And by us collating and gathering that information and putting up quality things, hopefully it will make things easier for people. They don't have to worry about
Getting sold something because it's a sales funnel to something else. So that excites me. I think that's going to be really important going forward, especially as AI starts to become more evolved. Yeah, share more about that. You've said that a couple times that this site will be extremely beneficial in this new world of AI. Why is that? What is it about AI that has you concerned there?
I think AI has the positives where it's a great tool to use, but what's going to end up happening is the amount of content that is published on the internet is just going to skyrocket as chat, GPT, et cetera, get evolved and used more. Here's a good example. My son's ex-girlfriend is a writer and she had a day job for a while of writing reviews for like products like massage wands and things like that.
So one of her tasks would be to write 20 articles on a review of a particular massage wand product. Yeah, her job is gone. Her job is gone, but think of what her goal is. She didn't know anything about it, right? She was writing about things she didn't know anything about. The whole point of the exercise was to get content out there that was optimized for people to be able to find it, to read these reviews of somebody who's never actually used the product. So that is already the state of the internet.
in a lot of ways. And with artificial intelligence, that's just going to balloon. And it's going to be harder for people to find safe places to get information that from one, people that know actually what they're talking about because they do it. And two, where there's not some sales pitch, where it's just trying to lead them down a road in order to make a purchase or buy something. And that's what the podcast network is supposed to be in my mind. One,
The people that have retirement podcasts that are part of the network, they actually do this for a living. They walk life with clients, helping them make decisions and have to stick around in the results of those decisions and all the pivots come around the way. So the people know what they're talking about. And two, they're doing it because it's important to them. It's their craft. It's not a way to get more clients or to sell something.
And I think that's a rare thing. And I think that's going to be even more important going forward. Yeah, well said. One of the things that I've shared, I shared on your show and mine as well, is that there's only five of us right now that came together to launch this thing. And all five of us are friendly and we have similar philosophies and opinions, but we have different perspectives and we explain things differently. And so what I've shared is,
I hear from listeners all the time that they listen to an episode I did or a series I did on a certain topic and they want to learn more. They want to dive deeper. They want to hear the other side or a different perspective. And I think bringing together trustworthy people, to your point, who actually do this as their craft, it's their passion, it's their expertise.
in hearing those different perspectives so they can kind of come to their own conclusion on some of these topics. So I'm excited to kind of curate this stuff and kind of bring it all into one place. And we have some other ideas as well to come together to create additional content and potentially future events together. And I'm excited about all the possibilities, but we're here taking it step by step. Yeah, we're just walking the journey. It has a lot of great promise and we'll just take it step by step, but I'm excited about it. I'm excited to be able to do with people I like, like you, Taylor.
I agree, Roger. I agree. Well, all right, on to today's show. So today, with your help, we're going to talk through a number of retirement misconceptions or misunderstandings.
As I was thinking about this, maybe for some listeners, it's possible that these are not misconceptions at all. They may have never even attempted to understand these concepts and how they might influence their retirement planning. And I think the first concept that we're going to talk through is a really good example of that, one that's really talked about in the financial planning world. And that is this idea of complicated versus complex problems.
And without putting too much thought into it, a person might assume that complicated and complex are the same thing, that they're synonymous with each other. In fact, if you ask me, Roger, to tell you the difference between the two before I put any meaningful thought into this, I think I'd be hard pressed to give you a good answer. So to start, how do you explain the difference between complicated and complex? And then why is this important to understand and maybe even factor into retirement planning?
So these concepts come from systems thinking, which is a whole academic field and professional field about building systems. And I first got exposed to it listening to a podcast with Arthur Brooks and Cal Newport. Arthur Brooks is a professor and a pretty prolific writer as well.
And he talked about in science, one of the first things you need to identify is what type of problem are you dealing with? Because depending on the type of problem you're dealing with, it's going to dictate how you approach the problem. And he talked about complicated versus complex. And he explained the difference. And I was listening and I'm like, this is what I've been trying to say with all my clumsy words forever. And why I use an agile process in my practice is
So there are three types of problems, and I've done more research on it. A great book on this, if you want to geek out, it's called It's Not Complicated by Rick Nason. So as soon as I learned of this concept, I started doing searching on this topic, and everything went back to this book. Actually, I'm going to interview Rick, who's a professor, next week. But there are three kinds of problems. There's a simple problem.
There's a complicated problem and then there's complex problems. And there are some rules around this, but just to keep this general, a complicated problem is
is one where you can identify what the outcome is going to be. And you can identify, it might be complicated, but you can identify the steps that you need to take to build the algorithm or the process to solve the problem. And then that you can actually get there. And once you solve it, you can repeat it over and over. So an example of that, I did a YouTube video on this
An example of that would be building a railroad. Let's say you want to build a railroad from San Diego where you are to Fort Worth where I am. Well, that seems pretty complicated, right? We have right of way, we have grades, we have materials, we have easements, we have the weight, the fuel, all sorts of things that would have to be figured out. That's pretty complicated, but it can be figured out.
And once it's figured out and we build that railroad from San Diego to Fort Worth, now that we've figured that out, we can much more easily build a railroad from San Diego to Utah, Salt Lake City, or Fort Worth to Chicago. Once you tease out all the issues, you can build the algorithm or the process to repeat it. And the key thing is that repeatability for a complicated problem. Does that make sense? Yeah, it makes complete sense.
And then a complex problem is one where you're not quite sure what the end result is going to look like. You don't have total clarity on that. But the key element of a complex problem is that you have forces that are interacting with each other in ways that you can't predict. Meaning that if you think of retirement, I think of retirement as a complex problem because
If it was just a math problem, all we would need is Excel. But in retirement, we have obviously inflation, sequence of return, tax policy, the economy. But we also have internal factors, life circumstances, preferences, change in family dynamics, et cetera. So when you build- Tax law changes, the Fed. Tax law changes. All of these things are going to interact and influence each other in ways that we can't predict.
So you can't actually figure it out. And so the reason it's important when it comes in my mind to retirement planning, and I definitely think the industry has a big issue with this, is that we tend to think of retirement as a complicated problem that is figureoutable, that we can just build the model and get more precise and have the spreadsheet and everybody's confident. That's a fool's errand because it's actually a very complex problem
And the key difference here is a complicated problem can be solved in a repeatable fashion. A complex problem cannot be, it has to be managed. And that's why it's important when we talk about retirement. One of the examples that he brings up in his book, I believe he talks about like an innovative technological disruption being a complex problem. Like he used Uber or Airbnb. Those are complex businesses that just disrupted a certain industry, right?
And your comment that you can't figure out a complex problem, although those companies, those founders, they did figure out an answer to this complex problem. So I'm just wondering, kind of thinking out loud here, is it, I can't figure out how you solved your complex problem around your retirement planning, but I could certainly figure out
my complex problem. It may not be with certainty, but I can certainly put the pieces together to figure out my own problem. I think just sometimes one of the traps is like, well, how did you do it? I'll just do it just like you, or I'll just read that book or listen to that podcast or crunch those same numbers using your calculator the way you did. But your plan, your problem is going to be different than mine. Does that make sense? It makes sense. And I think the figure out part of your description is what I have an issue with in that I
Like Uber. They haven't figured it out. They've had to deal with a lot of uncertainty around local policy and taxes and wages and 1099 versus W-2. Constantly problems are coming up.
that they just have to navigate, sometimes in different ways, depending on what region of the country they are, although they've solved a lot of the bigger issues. So I still think in modern business, especially technology companies, that's why they use, and now we're getting into project management, why they use an agile approach rather than a waterfall approach. A waterfall approach, they used to build software where they'd figure it out all at once and build this big, bloated project, whereas an agile process is,
It acknowledges that you can't figure it all out, so it's more about improving decision-making consistently and iterating a lot along the way. And I think that's the key difference in my mind, Taylor, is retirement is something that you have to iterate on. You have to make lots and lots of little decisions. There's all this complexity involved.
bounces around us. Does that make sense? Yeah, I think that's a good point. Someone could save up $5 million or $10 million for retirement and convince themselves that they've solved this complex problem of building their healthy retirement plan. And then all of a sudden, some unknown thing occurs, right? Some catastrophic event occurs and their $10 million is gone. And so I think what you said there, iterate or even that complex problems can be managed or should be managed, not necessarily solved.
It's important in my mind because it changes our focus from trying to figure it all out and just let me get my assumptions on my spending for the next 30 years just a little bit more precise or my market assumptions on the next 30 years to be a little bit more precise or maybe engineering this product to solve my issues. That tends to be where people focus.
And I think that's a fool's errand. It can waste a lot of time. Rather than really focusing on how am I making decisions and how do I improve the quality of my decisions consistently? Because if I can do that, that can have huge benefits long term. So rather than thinking about solving, thinking about systems and how do I manage, I think changes the perspective of how you address the subject in a lot of healthy ways.
So you mentioned the Agile process a couple times. For those who don't know what Agile is, maybe you can explain that and then maybe share a little bit more about how the Agile process fits into solving complex problems. So our firm is Agile Retirement Management. And so we treat every client like a project. You have to make decisions. So we build, what's our vision? Is it feasible?
How do we make it resilient? And then how do we optimize it? Those are the four stages you go through, but that's the beginning of an ongoing conversation. So an agile project is just a project that is never ended. So you're always reevaluating, is this still where I want to go? Where are my resources right now? You poke around for risks and opportunities and
And then you make decisions on, okay, what do I do next? What do I do next? Because time is such a precious resource that we can't do everything. So we want to have little things, sprints, where we brainstorm where are risks and opportunities to improve our plan or our project. And then which one has the biggest impact or is most important to me. And then I just go do that one thing. And then I just keep repeating that process.
And so that's essentially what agile project management is. Probably the biggest way it shows up for you and me and all of us is that's why your iPhone has all these apps that update a million times. Every other day they're updating because they're doing an agile process. Rather than eliminating all the bugs, they try to ship what's most important. And then they keep shipping more important things and fixing bugs as they present themselves. And so things can move a lot quicker.
So I think it's fair to say that there is this complex problem of planning for retirement and managing your retirement plan and all those unknowns that come with it. But then within your retirement plan, there are complicated problems that can be solved, that can be solved with systems and processes and calculators and an analysis. Maybe share what some of those might be and how and where they live inside of a complex problem.
One of the most influential books on this topic, Taylor, is Thinking in Bets by Annie Duke. I had her on the show a few years ago, I forget. In that, let's take a Roth conversion or buying a lake house. In theory, that's solvable, if I can speak.
The way that we approach these things, we actually think they're not as solvable as you think they are. I think there are a lot less solvable things than we realize because there's so many things going on. So let's use the example of a Roth conversion. Generally, you don't know whether it's a good decision or not to do a Roth conversion until after the fact. You may never know. You may never know. You may be gone. Your heirs might know. Exactly. The same thing with managing long-term care and do I buy long-term care insurance or not?
You may never know. I tell people, I tell a story of people who say, hey, you may have to live in a trailer. You may have to move from your million dollar house to a trailer if everything goes wrong, even if we make all the right decisions, just because it's so dynamic. The key is making really intentional decisions. So let's take, go back to the Roth conversion just to keep it simple.
We use something called an OODA loop with decision-making, which comes from aviation, specifically fighter pilots, which stands for observe, orient, decide, and act. So if you're a fighter pilot, and I don't know anything about aircraft, I was not in the military, but if you're a fighter pilot, the quicker you can go through that loop of observing, orienting, deciding, and acting, the quicker you can go through that. And if you're battling someone else, you want to be inside their loop
the more likely you're going to be successful. So if you take a Roth conversion, generally we read an article or get motivated because we're worried about something and we just intuitively make a decision. What we focus on is, well, okay, let's make a decision on a Roth conversion. Well, let's observe the current state of things. What does your income look like over the next five years? What's the mix of your asset classes?
What do your RMDs look like if you don't do a conversion or a qualified withdrawal? So let's observe the appropriate things and then let's orient, this is the hard one, what do I want? What am I actually trying to solve for in doing a Roth conversion, right? You could have legacy, I'm solving for future tax risk, I'm solving for the RMD bomb because I have so much in tax-deferred accounts.
Or maybe you want to solve for ACA or Irma. You have to prioritize what is it I want in order to get to a point to make a decision. And that decision is likely going to be a judgment call. So if it's going to be a judgment call, you just want to do it in an organized way and log your decision. So when you look back on it two years from now, you can understand why you made the decision. And I think that is the kind of process we use in all sorts of decisions, right?
Because whether you want to buy the lake house or whether you want to retire this year, well, there's lots of opportunity costs. So the key is think through it in an organized way so you can feel confident in the decision or your judgment call. I don't know if there's a lot of things that really are just simply solvable, maybe social security strategy and things like that.
Yeah, it really makes you think. I mean, I really like the way you framed all of that. And I think to sum up this misunderstanding or misconception, there's a quote from an MIT article from the author who wrote the book that you had mentioned. It said, if you manage complex things as if they're complicated...
you're likely setting yourself up for failure. And I think that that's the misunderstanding right there is if you attack these complex things, like they're just complicated problems that you're just setting yourself up for failure. And I think it's really, really common for retirement savers, investors to watch a YouTube video about Roth conversions and decide this is the best thing ever. And I'm going to go implement it, right? They just solve this, what they perceived as a complicated problem, but it's really complex to your point.
or went and bought a mutual fund because somebody told me to buy it, right? It's not that simple. It's not a complicated problem. It's more complex than that. So I think if there's any takeaway here, it's that if you manage these complex things as if they're complicated, you're likely setting yourself up for failure. And from a profession standpoint, I think, Taylor, and this is true for the professionals that are listening, but also for consumers that are looking for planners,
is ambiguity doesn't sell. It's horrible sales copy. I mean, I spent half of my career thinking that I had to be the smartest person in the room and I had to know the answers because that's what clients expected of me. And they come to you wanting the answer. They want certainty. They don't want uncertainty. They don't want to have to continue to do work. They don't want pain and hard decisions.
But that's the reality of life, and it just doesn't necessarily sell well. So you don't hear it. That's why you don't see. It's not clickbait article headlines to say, I don't know what's going to happen. Right, right.
Anything else you want to share on complicated versus complex before we move on? No, I think I'm early in the journey on this and I'm excited about it. Yeah, I think it gives some of our listeners some good things to think about. I'll certainly link to the book and this article in the show notes for today. The next retirement planning misconception, I think these all kind of play into each other. They really do. Yeah. The next one is thinking that you should build your plan from the outside in instead of the inside out. So share more about this. What does this mean to you?
It definitely is related. So I had a conversation with a potential client the other day, and they inherited their advisor. And we were talking about our service model and how we work. And they explained how they currently work. And they said, well, this advisor, the extent of the retirement planning was, tell us what you need, and we'll tell you if it's possible.
Meaning that they had the financial model, and I don't know what they were using, whether it was guardrails or systematic withdrawals or 4% rule or what it was. But this concept of outside in, I think, is big in retirement planning because it's simple, which is it's a 4% rule. You can take out 4% inflation adjusted, and you have to fit your life into that box. Right.
or guardrails, or if somebody has dividend strategy, whatever it is. It's essentially a financial model that someone develops that they just repeat that financial model, 4% rule, guardrails, whatever it is. And then when someone comes to use the process, they're just going to have to fit their life into that box. That's outside in. I think a healthier way to do this and a more human way to do this is from the inside out.
which is messier, harder to do, but much more meaningful to creating life outcomes if you're in retirement, which is essentially starting with what do I want life-wise? I divide that between what is my base great life cost? So we could say that's $100,000 a year, but it's not just $100,000 a year because there might be seasons of higher spending or lower spending because we don't spend in a constant fashion.
And then once we know what the base great life is, what are my discretionary spice that I want to add to this gifting travel on top of my base great life? And then what are my aspirational goals? And then back into what resources do I have and perform a feasibility test to see if it's possible. And if it's not possible, doesn't fit into the model, then
actually working with a client to negotiate with themselves. Meaning if you have a plan, these base great life wants and wishes, and you identified all your resources and you run a Monte Carlo, whatever you're doing for feasibility, and it says, no, you can't do that. Well, then you have to negotiate, help the client negotiate to make sure that you get to a feasible solution that focuses on the things that they care about most. So a good example of that
is a client and we're actually coming full service. A number of years ago, they wanted to buy a lake house. And so we created a what if scenario from their plan of record, adding in the cost of the lake house and the extra expenses. And the initial is like, no, you can't do that. It's not feasible. A lot of times that's where the conversation ends. But with this particular client, we dove into, well, why do you really want the lake house? And we explored different ways of solving for the lake house without buying a lake house.
But they settled on they really wanted the lake house. And so that was really important to them. So they were going to have to give up in other areas. So the way the negotiation ultimately ended was we negotiated away some of the annual travel budget because they cared more about having the lake house for the experiences with their local family and grandchildren, etc.,
And we also factored in the fact that they're not going to own two homes forever. So we worked through, okay, well, it is totally feasible to own the lake house or one house for 10 or 12 years, but just not for the rest of your life. So by identifying what was most important to them, we were able to customize how the project worked so they could get the lake house to achieve what they actually wanted to achieve, but just not forever.
And so that's an example of creating from the inside out rather than, nope, I ran the model. You can't buy a lake house. Sorry.
It reminds me a little bit of George Kinder's three questions. Are you familiar with those? I am. I don't know them off the top of my head, but I am. Yeah, George Kinder, I've had him on the show. It's been a while now, but he's famous for teaching financial planners how to do what he calls life planning. And George Kinder has these famous three questions. And your examples there are very realistic. What are your goals? What do you want? This lake house or whatnot. But where he starts things with his three questions, the first question is what he calls designing your life.
And he says, I want you to imagine that you're financially secure, that you have enough money to take care of your needs now and in the future. The question is, how would you live your life? What would you do with your money? Would you change anything? Just like, don't hold back on your dreams. Describe a life that is complete and what he says is richly yours.
And then the second question builds on top of that. And it's like, now you have less time. This time you visit a doctor, tells you you have five or 10 years to live, that you're not going to feel sick, but you have five to 10 years to live. And you don't know when you're going to die.
What would you do with the time that you have remaining? Will you change your life? And if so, how will you change your life? And then the last question, today is the day he calls it this time, Dr. Shocksey with the news, and you've got one day left to live. What feelings arise as you confront this very real mortality? What dreams will be left unfulfilled? What do I wish I would have finished or what I have been? What do I wish I had done?
And I think it's an interesting way. These are really hard questions to answer, by the way. But I think that gets to the root of starting within and working your way out with some really big, challenging questions to get you thinking. It's an interesting approach. And I think that works for some people. Like for me, those kind of questions, I don't think that way. I think iterating forward is
rather than where I want to be and working backwards. And so I think you have to match the style with the person. Oh, totally, yeah. To some extent, I actually use those in my masterclass in the club as an exercise, but that's not something that works for me. So it's hard to think that far. We don't really relate to who we are the rest of our lives. It's gonna change a million times.
So it's hard. I tend to work from the perspective of the five regrets of the dying. I'm more of a regret minimalization guy. I want to minimize the regrets that are common for people at the end of life. I wish I wouldn't have worked so hard. I wish I would have stayed in touch with my friends. I wish I would have lived a life true to myself. So you have to find what matches you. Most people are like,
I just want to have a great life. And when I want to ask if I can have a lake house, I want you to help me figure it out. That's generally where they come from. Well, at a very simple level, I mean, I like where you started with it, where a lot of people come to an advisor or do this on their own, like, okay, I saved up a million dollars. What does this get me? Right? What does my retirement look as a result of this million dollars that I saved up?
Where instead we're saying, what do you want your retirement to look like? What are the things that are important to you? Now let's back into how we can make those things happen. And to your point, in some of your examples, it may require making some sacrifices or some changes. You may need to learn how to spend less or work a little bit longer, or there's a number of different levers you can pull. But instead of just like,
here's what I got. Tell me what I can do with it. Now it's like, no, what do we want? And how do we design our retirement around that? Right. I mean, it's easier for someone to tell you what to do. And I know you know this, Taylor, the people that have the most options because they were either by serendipity or great accumulators in a variety of things tend to have the hardest problem. I was going to say the same thing. Of overcoming frugality and thinking about spending.
There's a balance. None of us want to be destitute when we're in our 80s, but none of us want to miss our life when we're as young and as healthy as we'll likely ever be. If we don't have a good framework that we own and understand, most people will naturally defer to the future self and just deny themselves. And that means, in my mind, Taylor, when it comes to systems work is,
Retirement planning is a collaboration, not a delegation, because the client, in this case, has to be part of building the plan because they need to have some ownership of it. Because the last thing that builds confidence is the professional saying, oh, don't worry, you'll be okay. That doesn't build confidence. They need to have ownership in it.
I think this segues nicely into our next kind of misconception, and that is that assuming that the transition into retirement is going to be easy. You know, you've worked 30 years, you've saved up all this money, and here I go into this next chapter in my life, and this will be simple.
and not just like the nitty gritty of this major life transition from working into retiring, but also to your point there that it's often hard to start to spend. The type of person it takes to build up a nest egg of one or three or $5 million is not the same type of person that can necessarily go and spend that kind of money. And I really like what you said there that those that have the most options find this part to be the hardest. It's like, okay, I've got $5 million. All my needs are met.
what do I do? Like, what do I do with this money? I don't know what to do. And that makes it much harder to have that conversation. And when you can break through and get to that answer and start to shift our thinking in retirement is a really, really cool part of our work that we do with clients. Like I love when we have that breakthrough with somebody. Because it's not about spending money. That's just feels crass. It's like, I don't need more stuff. It just sounds not dirty, but just spending money to spend money is not the point.
One quick story I want to tell, if that's okay, Taylor, related to thinking about future self and framing decisions, because I just had this conversation. I did it on the fly. I didn't even realize it when I was doing it, but it was impactful, at least in this moment, was I had a client that was going to liquidate a number of real estate properties. They were simplifying their life, and they were just tired of dealing with all the stuff they wanted to deal with. They just didn't want them. But they wanted to make a four-year project out of it.
We'll look at selling this one and then we'll do all this project stuff to get these ready for sale so it can be strategic. And so I said, well, how long are you going to live? And they said 20 years. So you want to spend the next 20% of your life on this four-year project to liquidate these houses so you can actually go live. That's a different way of thinking about it. 20% of your life when you're the most healthiest and you're tired of dealing with these profits, you want to take another, the best 20% of your life potentially to go do this? Why not just sell them?
And stop trying to optimize so much. I think people forget some of this perspective, especially as you get older. Time is of an essence. Yeah, 20 years seems like a long time, but yeah, it really isn't. Yeah, four years is 20% of your life. You only got 20 years to live. But I think this getting comfortable with spending money is a journey. We all come from...
a place on a spectrum based off of our discipline, our psychological makeup, our family history, et cetera. So it's not solvable, right? It's a journey to moderate. If you think of Aristotle's golden mean, there's a middle ground, like with courage, right? If you have too much courage, you're rash. If you have too little, you're cowardly. I think there's a golden mean where people can moderate a little bit. Part of it is helping them have frameworks to see that it's okay.
that they are still being a good steward if they loosen up a little bit. And that's part of, I think, having that collaboration so they can see that they're okay. Other tools that we've used are pre-spending, which essentially, you know, like if you, Taylor, you and I go on this golf trip with some friends once a year, and I think this next one, we had to prepay it.
So when I go, it's going to feel free. I'm not going to worry about the money because I paid most of it already. It feels good. Aside from all the money you're going to have to pay me when I beat you on the golf course. Okay. So that's going to be expensive. Yeah. I think I came through last year, but I probably still lost money. A good friend of mine, one of the coaches in the club, Kevin, he has a fun bucket. So every year he puts money into a specific account that's labeled fun bucket. And he has total permission to have that go to zero for the year.
Basically, whenever he charges against it, it's just using gift card balances. He's already spent the money. He put it in there to spend. So separating it out, there are techniques, but this is the journey. Usually the place I tell people to start is spend money to decrease friction in your life. So an example might be, it takes two hours to do the yard every week.
I remember it was a little hard for me to give up my yard work. I like doing it. I'm outside. But then now that I have somebody that does it, it decreased the friction so I can go ride my mountain bike or Sean and I can go golfing. So it gives me back time by decreasing the friction. Another example, this is one that just becomes a joke with clients all the time is going to Europe. Let's say you're doing a trip to Europe. Well, good for you. It's hard for a lot of people to buy first class tickets.
or business class tickets. It just feels extravagant. But it's actually a good place to think about it, especially for a longer trip, because one, it's going to be a more enjoyable experience. You're going to be much more rested when you get there. So you're not going to have to take near as long once you're there to recoup to be able to go enjoy the experience. So it decreases the friction to allow you to have more life experiences when you're going.
You're hitting on all like the really practical things. And I think that certainly resonates with a certain group of people. They're like, oh yeah, if I reframe business class that way, it makes more sense. Like it's not this extravagant thing that I'm just doing just because.
I think the other component, the other way to look at all this is our values and what we value. For example, there are people out there that, again, have plenty of money that have a hard time going out and treating them and their spouse to a beautiful steak dinner that costs hundreds of dollars, right? Like that's hard for them to go and spend money on. And I could join them for dinner and I could pay for the entire bill and they might still feel the same way that like, God,
gosh, like I could have made the same thing at home and it would have been better. And they just don't find value in that experience. So I think we all value things differently. Some people value flying first class just because it is fun and it is extravagant and you get free alcohol and you've got a bed you can lay down. And like, for some people, that is what it is. Like they just value that experience. So I think there are all these practical things, being good stewards of our money and trying to mitigate regret. And I think that is a nice way to look at it and it does resonate. But then other people are like,
I don't value that thing at all. Even if you paid for it, I don't even want to do it because I don't place any value in it. That's where you definitely have to identify. Some of the happiest people I know, they just do stuff that doesn't cost money. They work on their farm. They ride their bicycles. It's not about changing those things. I think the key here, Taylor, is just examining it, examining status quo to either reconfirm it or adjust it.
Just like you would a value. The best way you can get more solidified in what your values are, and my top 10 values behind me, is holding them up for examination. And is that really important to me? And question it so you can either reaffirm it or adjust it because you've looked at it.
And I think some of these spending decisions are part of that. I'm reading a book right now. I'm not all the way through it called Die With Zero by Bill Perkins. Have you read that? I have, yeah. There's a lot of wisdom in there to this conversation. I don't agree with everything he says and some of his perspective, but dying with way too much money is a failure. It's a failure. And that's how you build regret.
And helping someone realize, okay, I'm going to leave it to my kids. Well, the utility of that money to your kids when you die at age 90 and they're 62 is probably not going to make that big of a difference to them, which is part of what he argues in that book. How can you give to them when it's actually going to make a difference in their life? Or how can you use that money to create experiences with them? Because that's ultimately what they're going to remember.
And I think that's part of this discussion.
Well, our last misconception that we're going to talk through feels a little repetitive here, but I'll see if you have any additional thoughts before we close this conversation. But the last one is just like this misconception that retirement, it lives in a spreadsheet, that it's purely this investment or tax planning issue, kind of back to our complex, complicated problems. And it's just this problem that we just need to solve and then we'll move on and feel good about it. So I don't know any final thoughts here to wrap this up, just like this misconception around thinking retirement is a spreadsheet and it's purely just an investment or tax issue.
Yeah, it's really not at all. I mean, this is how much I believe in it. I have a t-shirt and stickers that says three times, retirement is not a spreadsheet. Retirement is not a spreadsheet. Retirement is not a spreadsheet. They are tools to use. In our Rock Retirement Club, we have like 1,300 people that are very intentional. And we have a spreadsheet geek club within there. And what ends up happening is it becomes a way of feeling like there's some control and
And constantly tweaking it to try to get more precise when we forget that more precision isn't going to give us more accuracy. And I think this is the biggest problem with retirement planning in general and as an industry and financial planning is investments is the hub of everything rather than life outcomes, especially in retirement, because that's how a lot of us got into the business. And I think people miss their life as a result of that.
Investments are important to a point, but their spreadsheet's not going to solve it. The quality of your decision-making and examining all the kinds of issues are going to be the key. And on the tax issues, taxes are one of the biggest levers we can pull as retirement planners. There's lots of opportunity there relative to other periods of your life. But I put that in the optimization stage. If you don't know what you want, and you don't know if it's feasible, and if you don't know it's resilient,
You shouldn't even be talking about tax planning. Tax planning is to enhance an already solid foundation. And what we tend to do is go the other direction. We read about what I call planning bling, all these strategies, this bling, financial bling, and we go back upwards rather than going in a more logical process. So they're important, but not as important if we make them.
Yeah, very well said. I just want to end here by saying, of course, spreadsheets are important. Of course, planning software is important. Of course, well-built retirement calculators are important. We've determined that we want to take action on this thing, maybe Roth conversion. Let's use that example. Sure, we've identified that there is an opportunity here to
optimize our plan through Roth conversions. Well, now we're going to get into the spreadsheets so that we can make an educated and informed decision about pursuing Roth conversions. So I think that's where this all leads to is making an informed and educated decision and using these tools that are available to us to help us make that educated, informed decision, knowing that there are a lot of unknowns, that there isn't like this certainty. I've got a podcast coming up talking about Roth conversions saying like, we don't know if a Roth conversion, we don't
really know the end result of a Roth conversion. We can do everything we can to use the information that we have to make an educated decision. And that should feel really good. But at the end of the day, there's no guarantees here. So I just don't want our listeners to think like spreadsheets are important. Planning software is not important. Just like get all touchy feely here and make a decision. No, of course, they're important part of the process to help us optimize and make sure that we are making decisions with the right information. You're so articulate, Taylor. You should have a podcast. Yeah.
Yeah, exactly. Exactly. Well, this is a lot of fun, Roger. I don't have a lot of open-ended conversations like this. I always enjoy chatting with you and having talks like this. I really appreciate you coming on and talking through all of this with our listeners and sharing more about the Retirement Podcast Network. For those, somehow, if they don't know who you are and where to find you, who are you and where can they find you? Well, we have a podcast, Retirement Answer Man, that's just had its 10th year anniversary, which is crazy. We have a podcast, Retirement Answer Man,
And RogerWhitney.com is where all the show notes and links and resources live. Awesome. Well, we'll link to everything in the show notes. Appreciate you joining me. I look forward to seeing you in Florida in November. This podcast is for informational and entertainment purposes only and should not be relied upon as a basis for investment decisions. This podcast is not engaged in rendering legal, financial, or other professional services. ♪