Make It Last – Ep 115 – Strategies to Increase Happiness in Retirement

In this week’s episode, Victor discusses the idea of being happy in retirement. What are ways people can find joy in retirement and bring down stress? Victor also spends some time giving the latest update to the Medical Aid in Dying for the Terminally Ill Act (or the “Right to Die Act”)

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Make It Last with Victor Medina is hosted by Victor J. Medina, an estate planning and Certified Elder Law Attorney (CELA) and Certified Financial Planner professional (CFP). Through his law firm and independent registered investment advisory company, Victor provides 360º Wealth Protection Strategies for individuals in or nearing retirement.

For more information, visit Medina Law Group or Palante Wealth Advisors. To schedule a free consultation with us call (609) 818-0068.

Transcript below —

Announcer:  Welcome to “Make It Last,” helping you keep your legal ducks in a row and your nest egg secure, with your host Victor Medina, an estate planning and elder law attorney and certified financial planner.

Victor J. Medina:  Everybody, welcome back to Make It Last, the only show that helps you with your retirement planning from both a legal and financial perspective. I’m your host, Victor Medina. I’m so glad that you can join us for another fun and exciting show. I have to tell you right off the top, I can’t win. I just can’t win as a broadcaster.

Here I am, last week’s show, telling you all about the fact that New Jersey stopped the right‑to‑die law that was in place because of a court case that was in there. No sooner did I talk to you about that on Wednesday, than a pair of judges reinstated right off the top.

Let’s talk a little bit about that before we get to the major topic for today’s show. The right‑to‑die law had just taken effect by the way. It was signed into law by Governor Phil Murphy. It was done in the spring.

There was a way of addressing some of the issues for people who advocate for a right to die to have a mechanism for doing that. People already had a way of doing it traveling out of state. What we wanted to do or what the legislature wanted to do was, basically, come in and be able to do it for New Jersey residents.

The law had a bunch of provisions in there. You needed to be terminally ill. You needed to ask for the medication to end your own life two different times. One of them had to be in writing. You need to have certain certifications by doctors and things like that. But, the point was that it had been passed into law.

Then, a judge had stopped it. What they had done is, they had said that the law was not one that could stand up to legal scrutiny. There’s a lot of wranglings behind it about how technically it was done, but then it was appealed to the appellate court.

The appellate court basically took the next level of the legal argument and said that the lower court had abused its discretion in striking down the law.

The way that the lower court had done it, it was awarded a preliminary injunction relief. That’s basically just saying that it could stop anything that was happening because of some irreparable harm, but the way that the restraining order was written, it basically said that the law was going to cause immediate and irreparable damage to the state.

The appellate court ruled that the law does not impose a problem for doctors who may disagree with it, because the right‑to‑die procedure is voluntary. What was happening before was, the doctor that requested the injunctive relief said, “If you make us operate under this law, there’s going to be this irreparable harm to us as doctors.”

The appellate court said, “That’s not really the case. This is all voluntary. You could decide if you want to partake in this particular law, or you could decide that’s not for you and not do anything with it.” What the court basically said is that it was going to reinstate it, and that’s basically what it has done.

I think what this raises is this idea that the law around a right to die is not at all settled. There’s a lot of people who feel very strongly on both sides of the discussion.

On the one hand, people who are proponents of the law feel as though the right to die should be something that every person has, and that there should be a mechanism of doing that that does a couple of things.

First of all, it absolves the doctors from liability. One of the biggest ways that this gets challenged is that if there’s not a law on the books to do that, then the doctors themselves face a lot of liability for prescribing the medication that will help and accelerate somebody’s death in a way that is painless for them.

They’re going to do that with medication. If people just wanted to die, they would take no medical action. They would allow it to run its course, but a lot of people who are terminally ill are in a lot of pain towards the last parts of their life. The first thing that the law does is it provides some cover for those doctors, so that they’re not liable.

The other thing that it does is gives people who are facing this, an opportunity to end their life with dignity. They feel very strongly that what happens at the end of life and scenarios in which they may be looking for ways of accelerating this, but their feeling is that their life doesn’t end with dignity.

They want the opportunity to do that, and so the law provides a mechanism to do that with some safeguards along the way.

The bill has opponents. The law has opponents, and they’re mostly rooted in religious organizations. There’s a Catholic leader basically saying that the law follows a dangerous and frightening trend, and is a brazen attack against the sanctity of human life.

The bishop for the Metuchen archdiocese issued a statement saying that “the passage of the Medical Aid in Dying for the Terminally Ill Act, which is the name of it, was a sad day for the diocese in the church in New Jersey, which has battled against its passage since 2012 when the bill was first introduced.

“The passage of this legislation follows a dangerous and frightening trend, and is a brazen attack against the sanctity of life.”

There are people who feel as though accelerating death is against not only moral and religious codes, but also ethical codes for doctors, that doctors should never be put in a position of doing that. Nevertheless, it is what is law, I guess, once again.

Tune in next week, we could go [laughs] the other direction again, which would give me another five minutes before I start the bulk of the show. Right now, we’re in that law. As I was mentioning before, it’s got some rules around it.

First of all, we need terminally ill adult patients who reside in New Jersey, and who are looking to self‑administer medication to end their lives peacefully and humanely.

The way that that works is that the patient’s attending and consulting physicians have to determine that the patient has a life expectancy of six months or less. That’s the first thing, is that we have a life expectancy of six months or less.

By the way, when you think about a timeline on that, it’s a little counter‑intuitive. The shorter your timeline is, the less flexible the application of these laws. If you needed a life expectancy of three weeks or less, it would mean that you’re at the very final stages of whatever medical thing is going on. Six months or less is a little bit more generous in that definition.

The second thing is that they have to have the capacity to make healthcare decisions. If they’ve lost capacity, namely, if they’ve become unconscious, or if they’ve become so mentally infirmed that they don’t know what they’re doing, what they’re deciding, then, in fact, the law doesn’t apply.

By the way, this is where a lot of people have questions for me as an attorney to say, “Does the law, the Terminally Ill Right to Die Law, does that supersede the need for a healthcare directive?”

The answer is no, because the healthcare directive is a document that takes effect when you are incapacitated. You can’t take advantage of the right‑to‑die law if you are incapacitated. The two things can work side by side.

We also need to make sure that they are acting voluntarily, that is that they are not being influenced or coerced by anyone else. The bill defines a terminal illness as an irreversible illness that has been medically confirmed and will result in the patient’s death within those six months.

The idea there is that we don’t want something that someone is suffering from that has not been diagnosed as something that is a terminal illness.

The bill then requires the patient suffering from this terminal disease to first verbally request a prescription from their attending physician. Then they need a second verbal request at least 15 days later.

The attending physician has to offer the patient a chance to rescind the request. Then we need to have a consulting physician who is then called upon to certify the original diagnosis and reaffirm that the patient is capable of making a decision.

This is not something that you’re going to be able to make an end run around simply by being in cahoots with your attending physician. Your attending physician’s got to make a diagnosis. You have to verbally request two different times spaced by at least a couple of weeks.

Then we need to bring in a consulting physician. That consulting physician needs to confirm the original diagnosis, and also confirm the patient’s ability to make decisions. Then we also need one request, in writing, signed by two witnesses.

This valid request for medication has to be signed and dated by the patient, and witnessed by two people who, in the patient’s presence swear ‑‑ what they call a test ‑‑ that the patient is capable and acting voluntarily to sign the request.

Only the patient is permitted to administer the drugs to themselves. Once they get them, nobody else can do that. One of the witnesses must be a person who is not a relative, who’s not entitled to a portion of the estate. Not the owner‑operator, employee of a healthcare facility, where they receiving treatment or the patient’s physician.

We need at least one witness that is completely independent of related to that person, going to get something from the will, in the facility where they’re located, or the doctor themselves. They need to have at least one completely independent witness. I would imagine that the other witness, by the reading of law, can be one of those other people, which is fine.

The next thing is, that the bill requires that the patients attending physician recommend that the patient participate in a consultation concerning additional treatment options. Specifically things like palliative care, comfort care, hospice care, pain control options, provide the patient with a referral to a healthcare professional qualified to discuss these options.

The idea is that we want people to know that there are options outside of ending their own life. We want the doctor, who’s in that position of trust who has originally diagnosed this terminal illness to also consult on those issues.

The doctor’s got to document all this in the medical record, indicate whether or not the patient chose to participate in the consultation, and whether the patient is already receiving palliative, comfort, or hospice care.

Only after all of those things are done, do we then get to the point in time in which the prescription is written. Then the patient fills it, and then at their choosing, the patient self‑administers the medication, which then ends their life.

I’ve tried to lay out for everyone who’s listening, both sides of the equation. One of the things that I have talked about here on the show is that I’m a very faithful person.

I’m a Christian, and from my perspective, there is a lot defined by that faith. My own personal belief is that people should have a lot of options in their life, and one of them should be the rights to end their own life.

I know that there are Catholics, there are other religious organizations, religious beliefs, that really feel as though there is a sanctity to life, and that this violates it, that this is some form of a sin. I happen to believe that we can hear a lot of callings if we’re faithful and spiritual, and one of these callings could be a calling to come home.

In my particular belief, when we die, our Father has asked us to come home, and we join them in there. If we have given over our life and belief of that salvation, we’re welcomed in. I don’t see in my own personal belief, a disconnect between the two.

My beliefs aside, though, I think what’s important is that this is voluntary. There is no requirement that you participate in this. If you find yourself wrestling on both sides of it, understand that there are options along the way. What I mean is that maybe New Jersey’s law isn’t the one that you feel fits your situation.

There’s lots of other places to go and find ways to end your own life if you’re terminally ill. I’m only focusing on the terminally ill component of it. I have a lot of mental health professionals in my life. My wife is one, my mother and my stepfather, are in that world as well.

I will tell you that I don’t at all, I don’t at all, endorse any of this for people who have mental health issues. That becomes a sticky line about what that’s defined. If you’re truly terminally ill, if the road ahead of you, medically, is one that you don’t want to travel, you have the option here in New Jersey now to not do that.

If that option violates your personal beliefs, you have the option not to participate in it either. You’ve no mandatory requirement. I think we often get too wrapped up in what our neighbor is doing, and not focused enough, on what we have in front of us, and what we need to handle. Those are my personal beliefs.

Hope you don’t mind that I shared them along the way. I think they’re reasonable, in the sense that I have a belief for myself, and I have a belief for what other people should have the rights to do, without making it something that’s mandatory, or without feeling like it has to violate people on either side. We should be fairly left alone and loved in either situation.

That’s the first segment for today’s show. I hope you didn’t mind that I went into that. My first time to really delve into the terminally ill law. I’m hoping, [laughs] as I mentioned, that we’re going to be going forward with this. I don’t have to report next week that it’s changed once again.

When we come back from the break. I want to explore a topic that has been really interesting to me for a little while. Namely, I have been interested in some of the ways that people are happy in retirement, and when they’re entering the sort of last phase in life, how people can bring joy to their lives. It’s specifically in and around the concepts of retirement.

I’ll give you a brief introduction, for why it’s been something that has really been in my thoughts lately. I’ve got relatives of mine who are facing some significant health care issues right now. They ended up getting a good maybe eight or nine years into retirement before they had to face this.

The question that I was exploring ‑‑ internally, not anything that I’ve asked them about ‑‑ is when they thought back to that period of time, would they consider themselves happy, during those periods of retirement?

I think the answer is yes. The answer is not really material for the exploration of it, because concept here really is, how do we set ourselves up so that we can get the most joy out of the chances and opportunities that we have?

As we’re entering into retirement, I want to make sure that people are figuring that out. It could be a way of having less stress of it. We’re going to talk about some strategies for that.

It could be things where people are finding ways to affirmatively be happy on it. When we come back from the break, I want to explore that a little bit, and maybe give for you, three or four really, really concrete strategies for ways of increasing your happiness.

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Victor:  We’re going to couch it in terms of within retirement. But, quite honestly, as I wrote the notes up for this show and the places I wanted to go with it, I thought to myself, “This probably applies everywhere.” It’s going to be a good topic. Stick with us. We’ll be right back after this quick break.

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Victor:  Hey, everyone. Welcome back to Make It Last. We’re exploring today the ideas of being happy or unhappy, specifically in retirement, because, I guess, I’m a retirement planner. People come into my office, and they’re in one of two different moods. They’re either really stressed out or super confident about what’s going on.

I don’t get many people that are in the middle. That happens from time to time. People who are starting to face that retirement decision, they know that their life is going to change fairly dramatically once they stop working, and they’re nervous. They’re nervous about making sure they’ve figured out a way…Sorry, my mind’s sort of racing there.

They’ve figured out a way to navigate their life in a way that has brought them some form of joy. If it’s not joy, they’ve navigated their life in a way that they can manage it.

Now they’re going to be making a change, and with that change becomes a whole new opportunity to explore things that will make them happy or not. There’s a lot wrapped up in the decision to do that, meaning they could have a lot of expectations about whether or not they will in fact be happy.

If they’ve spent all of this time being unhappy or reasonably content but looking forward to being retired, when they make that jump, part of what they could be doing is really hoping that the next place that they’re going brings them much more joy than where they’ve been.

If for some reason they’re not able to achieve that, then there’s going to be a lot wrapped up into that failure. For them, it’s probably really super stressful. There are some strategies that people can implement that will help lead in one direction or another.

I’ve had the fortune of meeting with a wide variety of people in my practice. Personalities, financial situations that vary in all sorts of ways. People may be well off and unhappy, worse‑off financially, but delighted, and then everywhere in between. The variety is absolutely immense.

The one common thing that I have seen for people that end up in that category of happy in retirement is very eminent. It may sound a little too nebulous of a conclusion around them, but they all seem to be planning ahead.

Some of them have done some heavy thinking in planning, working with somebody that helped them plan for the next 25 years, 35 years of their unemployment. They may have created a plan for themselves in retirement that they can fall back to if times get tough. It’s not anything that they’re marching through lockstep with no variability on that.

Those who focus simply on reaching a date for retirement and have not planned properly are usually the ones carrying a lot of stress on their shoulders. They walk in with tension because they’re worried.

They’re worried about maybe what their lack of planning has left them. They are worried about what the next phase of life brings, because they haven’t thought through those issues.

First of all, I want to let you know that it’s OK. This happens a lot. You’ve spent a lifetime working your job that’s probably in a field extremely different from financial planning or retirement planning. You’re not supposed to be an expert at this if you haven’t spent the time doing it.

You’re supposed to be an expert in the thing that you’ve been doing for forty years unless you are a retirement planner on your own. By the way, welcome to those of you that are listening to this show. I’m flattered.

Unless you’ve been doing that, which is not at all the majority of our clients or even a very small minority of our clients ‑‑ all of our clients were busy and successful doing something else ‑‑ you’re not expected to know the ins and outs of how to plan for retirement.

Even if you did a great job planning for your happiness and success, before you hit retirement, understand that the variables have changed once you enter retirement. The key here, though, is to recognize and understand that planning ahead or planning at all can make a big difference and have a positive impact in your overall mood in retirement.

I know you’ve seen the reports out there. People spend a lot of money to hire a wedding planner to make sure that one evening goes as planned. People who are having a health crisis see a specialist with advanced expertise, knowledge, familiarity with not only your condition, but the fringes of what you have. They go and see those people rather than self‑diagnosis.

By the way, there are a few some of you that try to self‑diagnosis first. You do it on the Internet, and you visit WebMD. That’s when you figure out that you’ve got malaria, and then you go see the doctor, and they say it’s not malaria.

I will tell you that one of the biggest benefits that I have seen in my entire life has been the benefit of planning. I can’t remember the Patton quote, General Patton, but he talked about how all plans are essentially useless and that everyone should have a plan, something like that.

I’ve done a lot of planning in my life. I’ve planned my practice in my firms, the companies that I’ve grown. I have planned my personal life. I have planned with my spouse. I have planned with my children.

What I have found is that when I spend the time to do all of this work, it turns out that my life ends up better then in scenarios when I haven’t. I’ll give you a couple of examples.

I attend a session with other lawyers across the country, many of whom are also financial advisors. The goal there is to really think deliberately about how we’re going to serve clients and be able to enhance our practices. It’s not a code word for anything by the way.

We’re looking for a better overall. We want better for our team that serves with us. We want better for our clients who put their faith in us. We want better for ourselves. We get one shot at this life, and so we want the opportunity to really be successful in it. So I meet with this group and we learn something for a couple of days.

At the end of those two days, one of the exercises that is part of the cadence that happens every single time, is that we end up planning for the next 90 days. We want to think about what we’re going to be doing and put a plan together for the next 90 days.

We’ll come up with 10 goals of things that we want to accomplish, ways that we want to grow. Again, not just in terms of the size of the company, but also in terms of personal growth and growth internally within the team, and growth within how we can serve clients.

Growth is all there. We go away and we come back three months later, 90 days later. We check in on how we’ve been doing with our plan. Here’s the thing, many times I don’t really implement 100 percent of the plan. Most of the time I don’t implement 100 percent of the plan.

Sometimes the chess pieces have moved on me. Sometimes I’ve just abandoned what my goal was in the beginning, and I don’t go in that direction. But I make sure that three months later, I sit down, and I plan again.

What I’ve learned over this is that the process of planning gets me the opportunity to think deliberately about the direction that I’m going, gives me an opportunity to pause, and think through variables that might be coming up, anticipate what roadblocks might be present, and chart a little bit of a course for the next 90 days.

Here’s the thing, I’m not always successful. It could turn out that half of that stuff was wrong, but I get another chance to plan again. If I hadn’t planned at all, then I would have no sense about whether or not the direction I’m going is right, because I wouldn’t even know which direction that I’m going.

Here’s my point. I think you should be doing the same around your retirement. I think you should be working with a retirement planning firm that has your best interests in mind.

That’s an important part because you could be dealing with somebody with a lot of expertise in retirement planning, but if they’re not obligated to put your best interests first, then the advice you could be getting is going to be compromised, it’s going to be conflicted.

We want to work with somebody who’s a fiduciary. Thankfully, our firm is a fiduciary. Other independent registered investment adviser firms are fiduciaries, lawyers are fiduciaries. We want to make sure that we have that in place, and that we’re working with them because it could help give us peace of mind.

Let’s go over some of the key factors that make it more enjoyable in retirement. I think that many of these are also applicable outside of retirement as well.

One of the first things that you should attempt to be is debt free. I know it sounds simple. Being debt free, specifically in retirement, but generally speaking, can take a huge weight off your shoulders. Folks in retirement that do not have any debt have way more flexibility to spend money on their current lifestyle, and not be nervous or worried about how to make ends meet.

As I mentioned, this also applies to people that are pre‑retirement or not in retirement at all because debt can cause anxiety in all stages of life. It is very easy to rack up debt. Getting rid of the debt is not as easy.

I’m not saying that you need to be completely debt free in retirement, especially if that means drawing a lump sum from your retirement savings to eliminate all your current debts. People say, “Should I take $150,000 out of my nest egg and pay off my home?” I’m not sure about that.

There’s some math about why that’s potentially not a great thing to do. By the way, if you’re curious, the math is that money that you take out will not be working for you, will not be part of your plan to continue to grow, and that drawing money down for retirement on an income scenario may be a smarter way of using it than using it lump sum.

Again, there’s going to be some math behind that, one way or the other, but I am saying that you should be thinking about any outstanding loans, debt that you’re carrying that is on a revolving basis, and come up with a plan to help reduce it.

If you act on this prior to retirement and eliminate all or a good amount, it’s going to end up providing for a much happier and smoother retirement.

This will help optimize essentially what’s going to be your limited income in retirement, because first of all, you’re not going to be making what you were making when you were working. Even if you have the best pension in the world, it’s going to be some form of a percentage of that money, and not 100 percent.

There are a couple of types of debt and steps you can take to eliminate them. One of them is consumer debt. This is any money that you owe due to acquiring goods and services, so credit cards.

One of the reasons that I suggest this is one of the first things you pay off is because the interest on credit cards is super, super high. Not making your payments off of that can get the credit card companies to increase it even more.

By the way, just because I’m an Apple fan, not because I’m a fan of consumer debt, I got the new Apple credit card, which was a fun experience in a way to use your phone. I also got their white titanium card, which is about the heaviest card I’ve ever picked up.

I ended up getting approved for the maximum amount of money that they had on there, plus the lowest interest rates, which is totally fine, but they’re doing things differently, eliminating late fees off of that.

They’ll still accrue the interest, but they’re not adding fees on top of it, giving a certain amount of cashback that is earned immediately off of it, so it’s kind of interesting.

Anyway, consumer debt includes credit cards, other types of consumer debt include personal loans, money owed to friends and family. As interest grows on debt, it works against you potential to build wealth.

What’s even worse is that these debts can hamper your cash flow, which leaves you less money to invest every month, and possibly can cause you to delay your retirement.

That you remember from other shows, one of the things that we recommend is that you get used to living on less, that your savings rate increases, to a minimum of about 15 percent of what you make. When you do that, it helps success in retirement.

One of the things that causes you to have debt is living outside of your means. If you only live on 85 percent of what you make, and then you’re saving that other 15 percent, and you’re not accruing debt, you’re going to be in a much better place in retirement.

Another form of debt is car payments. That’s a consumer debt that is widely used by car buyers. Very few people buy their cars lump sum, just for cash. There’s nothing wrong with a monthly car payment, especially while you’re working and building wealth, but imagine what your life would be like not having a car payment in retirement.

Those who do have car payments when they’re retired know that they need to draw from their savings, or somewhere, to cover this monthly payment. Keeping that extra money each month in your account can make a huge difference if you’re looking for ways to save money, or making sure that your money lasts as long as possible.

One other area of debt that is increasing more and more in retirees is student loan debt. According to a survey by Sallie Mae, 14 percent of parents borrow money to pay for college costs for their children.

As you’re aware, tuition and costs of education are continuing to rise, so many parents end up in debt from this in the years nearing retirement, because they helped their kids pay for school by borrowing for it.

Of course, one of the best ways to avoid having college tuition debt, in your retirement, is to plan ahead and start saving early, a 529 plan and possibly an UTMA or an UGMA account, for your child’s tuition.

I’m not going to go into this too much because most people either have done this, or they haven’t, but if you’re looking for advice on this, this is another area where a good retirement firm can help establish this ahead of time to help eliminate any student debt in the future.

That’s definitely one of those ones. It is not dischargeable in bankruptcy. It is not dischargeable when you die, so this is definitely something that you’re going to have to continue to plan around and pay for.

Your largest hurdle in terms of debt, though, is probably your mortgage. Getting to the point where you’ve paid off your home, and you’re not forking out money each and every month towards your mortgage, could help tremendously with your overall retirement game plan. I know this is not an easy thing to do.

Not everybody is mortgage‑free as they approach retirement. I am a pretty good planner and saver, and I’m not mortgage‑free. Of course, I’m only 44 years old, and I still have some time to knock this out.

The reason why, is that many people buy a home while they’re looking to raise a family. They buy a home large enough for that. One of the things that you can consider is downsizing. You’ve likely built up enough equity to pay off the home and buy the smaller home for cash without a debt.

The last category of debt is going to be medical debt. According to a survey by the Kaiser Family Foundation ‑‑ Kaiser is involved in providing health care ‑‑ one in five working‑age Americans with health insurance report that they have problems paying their medical bills. More than half of those who are not insured find the medical costs to be unaffordable.

As all of you probably know, medical costs rise as you get older. The actual services that you get performed for you are more involved. They’re not routine.

We all know about the importance of health insurance when we retire, but we need to be very careful with planning for it and avoiding any debt related to it. This is an essential component of your retirement plan. Like with the others, again, the retirement planning firm or advisor should be able to help you with this as well.

If you plan to retire before age 65, you will need to find an affordable but comprehensive health insurance plan that fits the needs of not only you, but your family. Why 65? Because that’s the earliest that you will be able to apply for Medicare. We want that as well.

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Victor:  All right, we’ve gone through a couple of things. When we come back from the break I’m going to give you more strategies for being happy in retirement, some that are concrete, some that are a little less concrete. I think they’re important nevertheless. Stick with us, we’ll be right back after this quick break.

[commercial break]

Victor:  Everybody, welcome back to Make It Last. We’re talking about ways to be happy, specifically, happy in retirement. We covered some areas, basically, that people who plan tend to be happier. People who are debt free tend to be happier.

We’ve got a couple other suggestions. One of them is going to be very concrete and financial, and one of them is not going to be so concrete. The last couple are not going to be so concrete, but they will contribute to your joy in retirement.

Let’s go with the concrete one, knock that one out of the way. It is important, I believe, to have a retirement income plan that covers all of your expenses. What we’re doing here is we are addressing that area of uncertainty that was probably going to be part of a cause for why you are anxious and worried.

If you don’t have a comprehensive retirement‑income plan, here’s what’s going to happen. You’re going to get retired but the bills are going to still keep coming. Here we got the bills coming in, and it’s time for you to pay them. You look at your account, and you go, “Well, I guess it’s time to withdraw money.” No plan, you’re just going to go to the well and take money out.

This is the first time that many people have to struggle with this, because when they’re working, their income plan is pretty well set. They get a check twice a month or every two weeks. It gets direct deposited. That’s what’s supposed to cover the bills. If they’re good and prudent, they won’t set spend more than what the account is bringing in. Hopefully, they’re saving stuff along the way.

When you retire, income planning becomes much more of a planning process. You’ve got to develop a budget. That will help make it easier to track your finances and adapt to any changes that are going to occur.

When I see people come into my office, and they’re flustered about their overall plan, a lot of it, it revolves around income. “Where am I going to get the money to live?” It’s important to plan for this income, because pensions are not as common as they once were. Social Security is not going to cover 100 percent.

Instead of having your income be generated automatically by a function of your age and work status, namely that you’re old enough to claim Social Security, and namely that you’re old enough to collect on your pension, we have our 401(k) or IRA plan.

Now, you need to figure out how that money is going to last through your retirement. The key is to understand where your income is going to come from in retirement.

Let’s give a very basic example. Let’s say you have $1,500 a month coming in from Social Security, maybe $1,000 a month from a small pension. You add those two things together, and you have $2,500 a month coming in. The next step is to calculate your expenses in retirement and find out what that number comes to.

Let’s say, you do it, and you learn that you have $3,500 in expenses. That, essentially, is going to leave you with a $1,000‑a‑month shortfall. You’ve got two approaches, ways of dealing with this, if you’ve got $1,000 a month in a shortfall.

Option one, find a way to cut $1,000 from your budget. Cut out unnecessary expenses. That will help even out your income and expense numbers so that they line up. Number two, and hopefully, you have enough savings to draw from that can cover your shortfall.

Whichever route you take, this is one of the most important parts of retirement planning, and you don’t want to go at this alone. The retirement planning specialist who works with people just like you every day, they’re going to be people that can create an income plan in retirement.

Sometimes, in creating that income plan, it’s impossible to make your numbers work out, at least not without a certain degree of certainty over the course of the entire retirement that you’re planning for. Meaning that, I can make $1,000 a month happen for you for 10 years, but I may not be capable of making $1,000 a month work for you for 25 years.

In fact, in order to be successful, you ought to think about only generating about $500 a month. I’m making these numbers up, but the idea is that, the best plan in the world may only be capable of sustaining a certain amount of withdrawal, and that that creates the budget against which you have to live.

I have no particular belief on this that ends up running counter to how many planners address it, because many planners will take your income needs, then tell you that they can make it work, and just essentially create that income shortfall.

I like to think about it more about creating certain constraints on the planning. What I mean by that is that it could be at the end of the day, that your plan can only withstand so much in which case, you have to just live within whatever that budget allows. It don’t matter that you have to create $2,000. I’m going to tell you, “Well, you can only really live off of x.”

I also get a lot of people who are looking to be within a certain budget, and in doing the planning, learn that they can increase their budget, meaning that they can live on more. They can take more out of their account. Their account can withstand more money coming out of it on a regular basis.

If that’s the case, they have a couple of options. They can go ahead and live on that money, or they cannot. Regardless, they’re going to gain some comfort knowing that if they needed the two, it was there. Their plan permitted them to learn that because many times they just don’t have the answer to that question. An income plan is important. Let’s cover the last couple that are not as concrete.

One of the things I want to talk about is communication between spouses. I believe that good communication between retired couples is very important, not only to be successful but also to be happy. Too often, I see one person taking care of all of the planning, and the spouse knows very little to nothing about what’s going on.

Financial communication will definitely help couples be better prepared if the spouse who handles the finances passes away or becomes incapacitated. As much as I don’t like talking about that, it happens.

I often have a situation occur where the retiree will come into the office grieving over the passing of their spouse, but also worried about his or her own financial situation because they were not the one who was primarily covering and planning for finances. They don’t know what to do.

The good news is that if you’re working with a retirement specialist, the right kind, one who understands how to educate that transition, somebody coming into that, they can help you with it.

You could have a much better idea about everything if the communication was present with your spouse before the tragedy occurred. Bottom line, I feel like those who are happier in retirement are ones who communicate well as partners. It’s never too late to start communicating better.

In the last area, and this one is really on those soft skills, people who are happier in retirement tend to have an active social life.

Some of the happiest retirees have a plan for how they’re going to spend their time in retirement, not just their money. You are not going to end up spending each day going to work the way you used to. Now, you’re going to have to find ways to spend the tons more time that you now have doing the things that you love.

Whether that’s golf at all the nicest courses around the world, traveling, taking a Viking Cruise, spending time with family and friends. This is the time to enjoy those golden years, and make the most of it.

I often see that retirees who stay busy supporting causes, supporting grandkids, traveling, they’re far happier than those who may be well‑off that they don’t have a plan for retirement. They’re staying busy, maybe they’re staying busy in a way that doesn’t cost as much in terms of money. The net result is that they end up being happier.

I’ll leave you with this. You’ve spent a lifetime working to one day get to the point where you are now in retirement. It’s time to enjoy it. Once you’ve got the income, the debt, and the planning, once you’ve got that all done for retirement, you can stop stressing and start enjoying your social life.

I always make sure that I’m helping plan with many different parts of retirement for my clients so that they can focus more on this part. The part that they want to enjoy.

I’m encouraging you to find the right retirement specialist that’s going to be there for you, and can help give you peace of mind in retirement. You’re going to want somebody who understands what the struggles in retirement are, and how to get people from stressed and worried to happy and successful, because it’s something that they do every single day.

If you’re interested in exploring that with us, we’d be very happy to have that conversation with you. The first thing that you can do is give us a call at 609‑818‑0068. If you’re not ready to make that step quite yet, then what I want to do is leave you with a free resource that you can use in helping with your retirement.

Remember, I said that one of the things that you should be doing is creating an income plan, and I’m going to give you the tools for doing that. The way that you do that is you text the word “income,” I‑N‑C‑O‑M‑E, to this number, 609‑554‑5936. You text the word income to 609‑554‑5936, and you’ll get a free report that will help you planning an income.

If you want to reach out to us directly because you know that you need this help with your retirement planning, and you want our help doing that, then you can contact us by calling the office to schedule a free consultation at 609‑818‑0068.

Hope you like today’s show. If you did, please do me a favor and share it with a friend. The best way that you can do that is tell them to subscribe to the podcast.

They go to “Apple Podcast,” they go to Spotify, or anywhere else where they can get a podcast, type in the words, “Make It Last with Victor Medina.” You type those words in, you will arrive at this show. It’s a nice little orange microphone saying, “Make it Last.”

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Victor:  Subscribe to that, and we will deliver to you a new episode every week. By the way, you’ve got an opportunity to go back into the library and listen in to prior shows. You might find some topic in there that you think just meets the needs that you have, so take a look at that as well.

That’s it for this week. When I come back next week, we’ll have another fun and exciting topic in the area of legal and financial retirement planning. Thanks so much for being my guest here today and joining me on this journey.

We’ll catch you next week on Make it Last, where we help you keep your legal ducks in a row and your financial nest eggs secure. Catch you next week. Bye‑bye.

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