DIY Retirement Hacks

 

This is a Site about retirement. It might be right for you if:

1. You are interested in Do-It-Yourself Retirement Planning
2. You have an advisor and you want to better understand some advanced concepts in Retirement Planning
3. You have a retirement plan and want to explore Hacks

I promise I won’t talk down to you. My goal is to provide massive value by sharing insights into retirement planning. This is not meant to be a comprehensive review of strategies, as such a herculean effort is near impossible. Rather, what do you need to understand in order to face each challenging decision with clarity of purpose and mathematical reason? This is not for a beginner; you may need to google some stuff in order to catch up with the themes. That is fine, because you have done well for yourself in the past getting to where you are now. I won’t talk down to you because there is enough stuff out there for the novice.

So, what’s in it for you? Let’s look at the three topics above and break them down.

First, you have adequate resources to plan your retirement. This is important, as statistics show most have under-saved for retirement. These are everyday people we all know, but this site is not for them. I assume you understand the basics of finance and have tucked away a good nest egg. We will not waste your time talking about issues for those who have under-saved, rather we will focus on what you need to understand if you can easily meet your retirement spending goals with your accumulated assets. If you have enough money left over at the end of the retirement month, there are separate issues that are important to call out beyond planning on social security to support most of your spending goals. On the flip side, if you have much more than, say, $20 Million to deal with, there are important estate planning issues I will not address. If you have enough to consider retirement, between $2 and $20 Million, you are just right for this book. You have not under-or over-saved and can benefit from certain retirement strategies.

Next, what if you want to DIY your retirement plans? There are resources out there on the internet and in podcasts. I find these resources disturbingly simple, without any meat on the bone. I would rather challenge to understand complicated topics in retirement planning rather than bore you with what you already know. Of course, my inherent biases will show through, but more about that below..

Finally, what if you have an advisor? Please understand most folks out there are accumulation advisors and have very little interest in retirement planning. They won’t tell you that, so this book might help you sus out some advanced strategies they might be missing. Or, understand the financial advice world is very bipolar at the moment. That is, there are insurance people and asset people. Few know when it is appropriate to cross the lines, and even fewer understand that de-accumulation planning is different than accumulation. I won’t spend too much time embarrassing the advisement industry as they already do that well enough themselves. But what do you need to know if you chose to use an advisor?

What do you need to know? I want to disclose two important themes right now, here early in the introduction. You always must thing of trade offs and incentives when making a decision about retirement.

Trade offs – because if you use an asset for one thing you cannot use it for another.

Incentives – because that colors every decision you make.

Think about this: under almost every circumstance, it is a no brainer to spend down assets in order to delay social security. There is no easier risk/reward decision than delaying social security, especially for the high earner of a married couple. The trade off? You spend down money your advisor may be charging you asset management fees, or your insurance agents wants you to put into insurance or annuities. In return, you get an inflation-adjusted, guaranteed stream of income for the rest of your life. For your advisor, incentives vote to claim social security early and reap the monetary rewards. For, you, the trade off is reaching your goals or padding your advisor’s pockets.

Stop—in no way am I accusing any advisor of suggesting you claim social security early because it is a good decision for him or her, although it may not be right for you. Of course, no advisor would actually do such a thing. But they are incentivized to do so, nevertheless, and the decision is a trade off. It is a decision you need to make with or without help. It is actually an easy decision, and my chapter on social security may be the shortest you ever read on the topic.

But let’s talk about my incentives. I told you may goal was to provide you massive value… what am I getting as a result? I am a retired physician who started late in the financial advising space as something to do during early retirement. I took to retirement planning as it is complicated and has all sorts of moving parts. It reminded me of being an internist, where you have many different organ systems to consider, all at the same time. Not infrequently, we do something that benefits the heart but hurts the kidneys, or visa-versa. That there is a trade off. But what is most beneficial for the patient? Further, as an infectious disease physician, I take great care getting to understand the bacteria and viruses I try to kill. I learn their foibles and how they behave in different circumstances, so I can crush them under my heal. Learning about insurance products and retirement strategies are a little bit like learning about my bacteria. After all, don’t forget the human body carries more bacterial cells in and on it than it has human cells. Most of those bacteria, when they are in the right place and in the right number, are not only harmless, but they are actually beneficial. When certain bacteria get in the wrong place, like a complicated expensive annuity, it must be crushed. But when bacteria or annuities are in the right place and in the right number, then you might find bowel movements and cash flows a pleasant experience.

Now that I have lost most of my readers, let’s discuss in depth trade offs and incentives. In return for reading this book, you will learn about risks, strategies, and products for the intelligent, wealthy retiree. I don’t plan on sugar coating any of my prescriptions for you, but is you who must decide if the prescribed treatments meets your indication. You assume full liability for any decisions that you make. You best understand your goals and desires, and only you can understand the risk/benefits of any decision you make. And me? I get about 70% of the profit when you pay for this book. It won’t be a best seller because it is not for the masses. I get to be an author and hopefully grow respect as a retirement planner for the wealthy. Using my decades of understanding complicated systems (humans as patients, the hospital and clinic, organs and human physiology), I will offer you my very biased view of retirement planning for the wealthy. I am biased. I believe that you can and should chose your retirement vehicles. You can do so if you take the time to understand the products and services that are available to you. Understand they all have trade offs, and advisors have incentives to sell you on one thing or another. Plan to have a wealthy retirement. Understand your risks and mitigate them. Know when to bet on human ingenuity and when to pool your risk. And finally, understand that if you live long enough, you won’t care to think about any of these topics anymore. That’s right, if we are luck and live long enough, we will all get senile enough that we don’t care about financial topics anymore. Set your older self up now for success.