#178 – Life Catalysts Along Your Retirement Journey

Wes Moss [00:00:43]:

We’re talking about here today on the podcast. One of the very few things we know in life and planning for retirement is that we’re going to be in a constant state of change and we’re going to be forced to deal with that change. We’re going to have to make decisions around it, and we’re going to have to make the most out of what’s thrown at us. Whatever life throws at us and knocks us down, we’re going to have to get back up and we’re going to have to lean into whatever’s next. Doesn’t matter. So here on today’s episode, we have a list of 20 lifestyle and financial catalysts that can or in some senses will, but can have a big impact or not so big impact on your overall retirement planning journey and lifestyle. These events, the way I think of them is I think of them as shaking us in some way. Some are little shake, some the whole house is rumbling.

Wes Moss [00:01:43]:

I grew up, for those of you listening, in California, if you’re near the coast, of course you probably know what those tremors feel like. You’ve felt many a quake, an earthquake in your life. Living in California, growing up in Pennsylvania, where I grew up, I remember we really only had one, and it wasn’t in Pennsylvania. It was something like 100 or two or 300 miles away. But I remember feeling that shake to this day. I was a kid. I was probably seven. I remember it really vividly.

Wes Moss [00:02:14]:

And every time I think about these life events, I think, well, how much is that shake in the house? How much is that going to impact my finances and my lifestyle? So each one of these life Catalyst events, for better or for worse, we’re putting a number on it. We call it the Retire Sooner Richter Scale to measure the lifestyle and the financial impact on a scale of one to ten. As an example, having a bit by the way, Mallory comes in. Producer Mallory is on the show. I haven’t even said hello to you. You’ve been here this whole you know.

Mallory Boggs [00:02:52]:

I’m so used to being kind of behind the scenes. I didn’t question it.

Wes Moss [00:02:56]:

You’re not behind the scenes, you’re here. So having a baby impact, let’s call that’s a nine on the scale. I’m trying to teach you the Retire Sooner scale here. And then you’re going to weigh in on some of these, the opposite end of the spectrum, death of a spouse. Of course, that’s a ten. How about this one? Your first kid goes to college. What would you give that on the.

Mallory Boggs [00:03:21]:

Oh, on the Richter? I’m trying to think of like your first kids going to college.

Wes Moss [00:03:28]:

Your first of let’s say you have, oh, I don’t know, four kids.

Mallory Boggs [00:03:31]:

Okay, four kids. I feel like that’s probably going to be I mean, that’s still pretty big deal. So what, like at least like a six.

Wes Moss [00:03:38]:

All right, I gave it a four.

Mallory Boggs [00:03:39]:

Oh, okay.

Wes Moss [00:03:40]:

I could argue it’s even a three. Now, your last kid of the house, baby number four goes to college. Now that I would give a seven.

Mallory Boggs [00:03:52]:

I can see that that makes sense because at that point, all four of the kids are out of the house, right?

Wes Moss [00:03:56]:

All four of the kids. So not only you may have multiple overlapping kids in school, so it’s expensive and you’re getting towards your very peak in spending and you’re also starting to deal with maybe being in an empty nest. And that in itself is a massive life impact. So put those two together and I think that is closer to a seven and a half on the retire sooner rector scale. Now, we do know this. The good news here is that and we’ll start with this. Number one, kids headed to college. This was actually number one on our list.

Wes Moss [00:04:32]:

Two is moving. Three is taking care of parents. Think if any of these apply to you or may eventually apply to you. Number four on the list married, you were getting remarried. Five, some sort of health change or moss of a spouse. Number six, starting a brand new hobby or corporate. Number seven, starting to travel. Number eight, some sort of housing project or could be any giant financial project starting or changing community involvements.

Wes Moss [00:05:05]:

Number 910 on the list, some sort of going back to school for you, not just your kids. So an educational pursuit. Eleven, job change or a retirement package. And really I should probably listed that as two separate ones, but we’ll talk about those together. Twelve, sale of a business. And this could apply not just to your business, but if your business gets sold, the one that you work for. 13 inheritance. 14 this is a multipronged one, and I would call this the retirement eight.

Wes Moss [00:05:39]:

The retirement happy birthdays. So these are just birthdays that end up making for life catalyst events. And those are we’ll get to those. There’s certain years that are just in and of themselves are life catalysts. Lifestyle and retirement planning. 15 unretirement. 16 investment performance can be a catalyst either good or bad. And again, a lot of these can go either way or they can have either a little impact or a lot of impact.

Wes Moss [00:06:09]:

Number 17, tax all changes. 18, some sort of new debt or getting rid of debt? Getting rid of debt 19 long term care Needs 20 estate planning Changes I.

Mallory Boggs [00:06:22]:

Think it has to be said, when we started this, we were like, oh, we’re just going to find ten really important life catalysts in Wes. Then you were like, no, you can’t contain it to just these. Is that how you ended up at 20?

Wes Moss [00:06:34]:

I ended up at 20, but now as I’m going through this list here, I’m thinking that, well, it could have been more because a lot of these are you could separate some of these out, but let’s just keep it in an even 20. It’s enough. Isn’t that enough for our listeners to endure here?

Mallory Boggs [00:06:49]:

I hope they stick around and listen.

Wes Moss [00:06:50]:

All right, so let me get through these one. We just covered college. Whether we, again, first child going to school, I’d say it’s a moderate to low on the retire sooner Richter scale. Your last kid goes to college, it’s a big one. It’s seven to eight. Number two, moving again, almost all of us are going to go through this. So some of these we may or may not go through. Some low probability.

Wes Moss [00:07:14]:

Some are almost an inevitability. Number two on the list, we’re all going to go through this. We’re all going to move at some .2 kinds of moving. I mean, housing moving in the same city, I give that a two on the retire Sooner Richter scale, moving out of state is a seven or an eight. It’s a big deal.

Mallory Boggs [00:07:32]:

That goes along with a lot of what the guests that we’ve brought on board have said. I feel like because we’ve had people on board who talk about these great communities that you can move to and have be surrounded by people in similar life stages and with similar interests. But it seems like so many have also said moving can be very detrimental to the social aspect of retirement.

Wes Moss [00:07:53]:

Well, it depends. I’ve seen people really struggle. So let’s say you’ve been in a house for 20 years or 30 years, it’s actually pretty emotional to leave that house. So that can happen. Number two. And most importantly and we’ve learned this through our research and I think I’m echoing some Seth Stevens davidovitz here when he talked about what the most important decision you can make as a parent had little to do with all your parenting decisions and mostly to do with your social circle and how your kids perceive that. So essentially, your friends have a bigger impact on you, on your children and their level of, quote, success over time and who they saw you spending time with and who they looked up to as your friends. So my point here is that it’s so much about your moving is less about your house and more about your community.

Wes Moss [00:08:51]:

So a leaving a community can be a big deal, can be difficult, but then gaining a new community can be life changing to the good. And that is why moving can be such a major impact, particularly if you’re going to another state. If you’re going to move all within the same city or of course, in the same neighborhood, it’s very little impact except for the trouble of moving and the cost and the expense. You move into a whole nother side. If you’re in a place like metro Atlanta, moving 15 miles in Atlanta can be like moving to another state because you change your community, because we’re so big and we’re so crowded. Sometimes I think about Atlanta. I think maybe because I get older, the busyness of the city is harder and harder for me, and maybe this happens to everybody. It also may be the case that when I moved to Atlanta, it was three and a half million people, and today it’s seven and a half million people, so it is still the same Atlanta, but it’s just a lot more crowded.

Wes Moss [00:09:52]:

I feel like in Atlanta, you got to get on a waitlist to get on a waitlist. That’s what it’s like here. You make a dinner reservation in Atlanta, you also have to then reconfirm the dinner reservation because it’s just so crowded. And if you don’t text them back, then they might call you, and if you don’t answer the call to reconfirm the reservation you’ve already made, then they might cancel your reservation on you. Same thing this happened to me at the dentist. I made a reservation at the dentist. Actually, it’s an appointment. I made an appointment at my dentist and they texted me to make sure I was coming to the appointment, and I didn’t answer the text.

Wes Moss [00:10:32]:

And then they canceled it because I didn’t answer the text.

Mallory Boggs [00:10:35]:

Oh, my gosh, that’s so frustrating. This is one of those instances where there’s some really great advancements with technology, but this is somebody thought it was a good idea, when in reality, it’s just obnoxious.

Wes Moss [00:10:45]:

You got to reconfirm to reconfirm. You got to get on a waitlist to get on a waitlist. Oh, on the waitlist. Waitlist. Are you on the waitlist or are you on the waitlist to get onto the waitlist? I don’t even know anymore. Maybe just walk up now it’s just a crowded city. I still love Atlanta. I think it’s, I think a top five city in the nation, or the world particularly to raise a family because the economy is so diverse.

Wes Moss [00:11:10]:

There’s so many industries in Atlanta and there’s so many different housing options. And it does get pretty spread out, which it’s not bound geographically by the water, which makes California cities really ultra expensive because there’s no more room. So they’re blocked by the water and they’re blocked by the mountains in the desert here. We can just keep going out and out further rings, further from the center of Atlanta. But I’m diverging here. The point of this conversation has to do with the community, our community. If we’re making a community change, it can be really beneficial and have a really big impact on the Retire Sooner Richter scale and really the Happy Retirement Richter scale. If you’re upgrading your socialization when it comes to moving, is your cash working for you? For years, banks have gotten away with paying next to nothing for the privilege of holding your money.

Wes Moss [00:12:14]:

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Wes Moss [00:13:05]:

It’s a very big deal emotionally. Hopefully your parents, if this happens, they’ve saved enough or their income is going to pay for their next step in caregiving. But even if they’re covering the costs associated with their care, your time and your mental energy, it’s going to get tested. And there’s a reason there are whole books written about taking care of yourself as a caregiver. It’s a really significant undertaking and usually happens. Mallory around the same time as you’re trying to really ramp up your retirement planning, you’re doing your caretaking in your fifty s and sixty s when you’re trying to really think about retirement, because your parents are now in their eighty s, ninety s, and God willing, in their hundreds.

Mallory Boggs [00:13:52]:

And is this something that you oftentimes see that families have to take on a caregiving role and it might accelerate their move towards retirement?

Wes Moss [00:14:00]:

In some cases, yes. Right. Because you think of, if you’re on the precipice of retirement, you’re a few years out, and then you get pulled into being the sibling in the family if it doesn’t get shared. And it’s often best if it’s shared. I don’t see that working out very often. It’s usually a sibling that’s the one that becomes the caregiver could really push up retirement. Hey, I’ve taken so much time to do this. It’s really difficult for me to work and do this.

Wes Moss [00:14:29]:

I was thinking about retirement anyway, so yes, I’ve absolutely seen it accelerate retirement. I think that’s part of when we saw the labor force. We had an episode here on Retire Sooner about unretirement. Part of it had to do with that caretaking. It was the 60 year old who maybe someone got sick in the family when we were going through the pandemic and they ended up becoming a caretaker. Or a spouse became a caretaker, so it accelerated some retirements. So I think the answer is yes, it can really accelerate your retirement timeline. So how do we plan for this or how do we lean into this? I think the elixir here maybe elixir is not the right word.

Wes Moss [00:15:09]:

I think to soften the blow of the difficulty here is to have someone help you plan for at least getting the right care. And I will say that as an advisor, I’m certainly not an expert at doing this, but there are multiple consultants that I work with and have worked with over the years, and the list has grown here in the state of Georgia of senior consultants on retirement care. What is the right fit for mom or dad to go to this facility versus this facility, for this 55 plus versus this home? I think that as America continues to age and our parents are getting older, the likelihood of us having to find the right spot for our parents goes up and up and up. And you may need some sort of senior care consultant that knows your city, knows your state, knows your area to help you with this. So I would encourage our listeners to seek that person out or just know that you have a resource that you can then find someone relatively quickly. Number four, marriage or remarriage. And we could have put on the list here also divorce, but I’d put that all in this category marriage, divorce, getting remarried. This one is obviously really high on the retiree student director scale.

Wes Moss [00:16:29]:

This is an eight or a nine. This changes your life, particularly your first marriage changes your life. Now, if we were talking about a fourth marriage, I’d probably say it’s pretty low on the Richter scale. Your fourth marriage, you know what you’re getting into. You’ve probably separated your assets if you.

Mallory Boggs [00:16:46]:

Have any assets left.

Wes Moss [00:16:50]:

I don’t want to dismiss anyone in their fourth marriage. More like probably long term dating. But your first marriage, your second marriage, these are a big deal. And we know that retirees are four and a half more times to end up in the happy retiree camp if they’re married. Doesn’t mean you can’t end up as a happy retiree without being married. We also know that a divorce and then a remarriage doesn’t ding your retirement happiness. We know that divorce is very difficult to go through for most people. And then, of course, you’ve got these layers of what this means financially.

Wes Moss [00:17:23]:

It’s no secret if you read Bill Danko Thomas Stanley’s book The Millionaire Next Door, that millionaires have a very high percentage that they’re married. Why? Well, perhaps you can talk about financial stability with two separate jobs, but the reality is that saving your way to retirement and investing your way to retirement is no small task. It’s a tall order, and it helps if you have two people doing it at the same time. You have two people in the boat rowing in the same direction. You have two incomes, you have two people that can save you can share your fixed cost, of course. And you have one house for two or four people, not two houses for two people. It’s economically efficient. So we put this high on the retirement sooner Richter scale.

Wes Moss [00:18:12]:

But for the most part in a good way, it can have a really positive impact long term when it comes to finances.

Mallory Boggs [00:18:19]:

It also makes me think of The Golden Bachelor that’s currently out right now. I think there’s going to be a lot of you’re going to see more cultural movement where we’ll see later in life marriages.

Wes Moss [00:18:29]:

I am so happy that you brought that up because I was actually excited to talk to you about this a couple of weeks ago because I know we talked about it. We’re kind of joking about it. I was like, that’s something I’m never going to watch that. I don’t really watch much of The Bachelor and I was not going to watch this either. But I’m so excited you brought it up because I forgot to tell you that I watched what the Golden Bachelor you did and it is so damn good. It is so well done. I was so compelled from the trailer, so I watched it shows up over and over again.

Mallory Boggs [00:19:09]:

They get it in front of you.

Wes Moss [00:19:11]:

You can’t miss it. And anytime you turn on your smart TV and I’ve got 47 different apps that I subscribe to, I don’t even know where it’s I think it’s just on Google TV or Google TV interface. You can’t miss it. Watch the trailer. Had to watch the first episode. It was so good. And then the episode was so good. Now, in fairness, I haven’t watched another episode.

Mallory Boggs [00:19:36]:

You’re just spacing it out.

Wes Moss [00:19:37]:

I haven’t watched another episode and I don’t think I necessarily need to. But I did think it was really good. The story was super compelling. The guy is the perfect guy. He’s a real 70 plus year old. His wife passed away. He’s not some philandering, billionaire, multimillionaire guy. He’s just your average I don’t know, he seems like an average Midwestern guy.

Wes Moss [00:20:02]:

Midwesterner.

Mallory Boggs [00:20:03]:

What’s funny is I feel like the only things I hear about that show is how wonderful he is. Everyone’s like, he can’t be real.

Wes Moss [00:20:08]:

He’s so, so he’s he looks like he should be right out of Hollywood. So he’s a good looking dude. He could be like a senior model. He is truly a nice guy with a family. His girls love him. The whole thing is amazing. I don’t know if I’ll ever watch another episode. I was I loved it so much because I thought it was going to be terrible and it was really good.

Mallory Boggs [00:20:32]:

I love those good, pleasant surprises.

Wes Moss [00:20:34]:

Speaking of loss of a spouse.

Mallory Boggs [00:20:36]:

Oh, that is not a pleasant surprise.

Wes Moss [00:20:39]:

That’s a Richter scale of a ten. Of course.

Mallory Boggs [00:20:41]:

Yeah, that makes sense.

Wes Moss [00:20:42]:

So again, we’re going to either be the spouse that goes first or we’re going to be left alone at some point. And it’s heart wrenching. It’s a big deal. And of course there’s so much when it comes to the finances, a lot of the financial pain. And I can tell you this because I’ve dealt with so many, I’ve dealt with a lot of families and there’s nothing easy to say when somebody loses spouse. But it is at least comforting to be able to say, I can tell you the one thing right now you don’t have to worry about is the money side of this. You do not need to worry about the money side of this is maybe the only okay thing you can say. And that simply takes planning.

Wes Moss [00:21:30]:

It simply takes planning. Now, not only does it take a lifetime of savings, but it also just takes account. Titling is a really big deal. Just how we title our accounts as we get older really matters. Because if you have everything tied up in IRAs, or each person has their own account, or you have most money in one spouse’s name, because they’re the ones that take care of all the investments and they take care of the bills. Then the spouse that’s left alone can be left locked out and in the lurch of not being able to access money when life gets really expensive. So one small easy thing to do is make sure your Titling is appropriate so you can immediately get to money as opposed to having to go through a process with a death certificate, a letter of testamentary and or even going through probate. All of those things can be mitigated dramatically by either setting up trusts, Titling accounts in an appropriate way, knowing what your beneficiaries are.

Wes Moss [00:22:39]:

So that can help in this really difficult life catalyst, which is the loss of a spouse or a really significant health change. Let’s immediately go to something more positive. Number six on the list starting a new hobby a corporate suit.

Mallory Boggs [00:22:51]:

This is one of our favorites.

Wes Moss [00:22:53]:

How many hobbies on steroids or corporate suits do happy retirees have?

Mallory Boggs [00:22:56]:

At least four.

Wes Moss [00:22:58]:

Exactly 3.6. So let’s call it four.

Mallory Boggs [00:23:00]:

Yeah.

Wes Moss [00:23:00]:

These are massively important to our overall retirement happiness. We know that. However, they don’t need to have a huge financial impact. Look, if we’re skiing in Aspen every month, maybe if we’re traveling once a month on a multi country Viking cruise in the European Union, that could be pretty big. But lots of corporates can be really inexpensive. So look no further than the cost of a tennis racket or the cost of a pickleball paddle or the cost of some new walking shoes. Gym memberships super inexpensive on the grand scale and even less expensive on the positive impact versus cost scale. So I give this one a five on the impact scale.

Wes Moss [00:23:53]:

It’s really important that we have our core pursuits, but there could be almost very little financial impact that you should be worrying about because core pursuits, the best core pursuits are almost free.

Mallory Boggs [00:24:04]:

And I know we’re talking about these being life catalysts. So we’re saying picking up new core pursuits.

Wes Moss [00:24:10]:

Yes, exactly. Sorry, I should have said. So number six on this list here is starting a new corporate one. Corporate suit is not going to make your retirement. Four or five. Yes.

Mallory Boggs [00:24:23]:

And maybe just dabble a little bit first to start, I will say I went and hiked Kennesaw Mountain with one of my good buddies this last week and it was so lovely. We’re just outside.

Wes Moss [00:24:31]:

Was this the first time you’ve done?

Mallory Boggs [00:24:33]:

No, no, it’s one of those things.

Wes Moss [00:24:35]:

That is that a core pursuit for you?

Mallory Boggs [00:24:37]:

I guess it is. I even have hiking boots.

Wes Moss [00:24:40]:

Or is it if you’ve got hiking boots, I call it a core pursuit.

Mallory Boggs [00:24:43]:

I’ve got hiking boots. I think I’m going to count it.

Wes Moss [00:24:45]:

It doesn’t have to be your life passion, just needs to be a hobby on steroids.

Mallory Boggs [00:24:50]:

I definitely enjoy it pretty regularly and I look forward to it and look into different check.

Wes Moss [00:24:55]:

Core pursuit. I give it a core pursuit. Number seven on the list, starting to travel.

Mallory Boggs [00:25:01]:

This sounds like my mom. She retired and she took at least one major trip a month for the first year she retired.

Wes Moss [00:25:08]:

And you may be saying, Wes, what do you mean starting to travel? Not everybody travels. Not everybody travels. And a lot of people travel, travel, travel just for work and vow during retirement not to ever travel. I’ve worked with many people over the years that have anybody that’s got a couple million frequent flyer miles or sky miles is somebody who’s a good candidate to say, I don’t know if I want to ever travel again because I had to do so much of her work. But if you’re somebody that hasn’t really been overly adventurous or maybe you’re scared to travel, just haven’t been able to travel, starting to travel can be a really big life catalyst because first of all, there’s very little downside to this, number one. Number two, except maybe the cost, it can get expensive. But the benefits of travel can be they can be immensely rewarding. They’re positive.

Wes Moss [00:26:03]:

Expand your social network. The statistic is actually if you travel at least once a year with friends, so a group trip, you’re two and a half more times likely to end up a happy retiree.

Mallory Boggs [00:26:19]:

I don’t hate that.

Wes Moss [00:26:21]:

Number eight housing project. Now this one depends if you’re moving, let’s say just to the same city and you need to do some light renovations, should be low on the impact scale. Give this a two or a three, add a bunch of renovations. Or if you’re building a house now, you can jump to a seven or an eight on the Retire Sooner rector scale, because you could end up saddling yourself with more debt or excess spending. If you end up doing a big housing project after you’ve stopped earning and you’re already in retirement. So just be careful about housing projects. I just ended up I have a relatively new home. It’s only three or four years old, which means HVAC is pretty new.

Wes Moss [00:27:07]:

And I just had to replace half an HVAC motor. It was super expensive. So imagine any big housing expense like HVAC, like a roof, or any sort of renovations. It can be hundreds of thousands of dollars and it can put a big dent into retiree if you haven’t planned for it. So planning here, of course, is key. Number ten, starting a new educational pursuit. Now really, this is part of number six or seven, which is core pursuits. This can be super inexpensive and highly rewarding.

Wes Moss [00:27:41]:

Local college, a local community college, or any place where you can start taking classes of anything, whether it’s history, finance, art, you name it. Low pressure, low cost, positive impact. Put it as a five on the retire sooner.

Mallory Boggs [00:27:59]:

Ryan Doolittle had an interesting interview with several people recently who played at Carnegie Hall. And I just remember, by the way.

Wes Moss [00:28:09]:

I love that episode.

Mallory Boggs [00:28:09]:

Oh, such a good episode.

Wes Moss [00:28:12]:

Gail and Dixon Grimes.

Mallory Boggs [00:28:14]:

But they played at Carnegie Hall. The moral of the story here is she really loved playing Luminosity, and that’s one of those learning games, keep your mind active. And I think that learning is such a wonderful thing and you can go to classes, but you can also just keep it really simple and just even play on your phone and keep learning.

Wes Moss [00:28:31]:

I’m not going to vote for luminosity. My kids have phones. I think phones are just terrible unless you’re talking to people. Anyway. Number eleven job change retirement package. This one could be multiples, but this is a big deal. Anytime you change a job, you’ve got a bunch of financial decisions to make. You can make the decision to leave your retiree plan or 401K where it is and just leave it in the plan.

Wes Moss [00:28:55]:

That’s a decision. Or make a decision to roll it into an IRA. So that in itself for most Americans is their largest liquid retirement asset. So you’ve got to figure out what to do there. Secondly, in a job change now if you’re just making the job change, you’re probably doing it to do something you like better, or in America, people are usually doing it to make more. There’s a big financial component to this. But then within these job changes, there are always offers from companies. They’re trying to get you to retire a little early, they’re giving you six month severance to be able to go away because big companies are always laying people off.

Mallory Boggs [00:29:36]:

Surplusing.

Wes Moss [00:29:37]:

Surplusing. It’s our favorite word here on the show when it comes to least favorite word, least favorite word here. But these are major life catalyst. Events, job change, being offered a retirement package. Anything that has to do with the change in your employment forces you to make some real decisions with your retirement planning, your retirement investments, or for example, making the decision to take a lump sum amount from your company. If they’re offering this to you relative to a monthly pension amount, then again, there’s still a lot of Americans that are offered this kind of choice. Number twelve on the list. This is my favorite one on the list.

Wes Moss [00:30:22]:

Mallory sale of a business. What would you give this on a Retire Sooner Richter scale?

Mallory Boggs [00:30:30]:

I feel like it’s off the charts. It’s got to be like an eleven, right? This is huge.

Wes Moss [00:30:34]:

Nobody’s given any of these an eleven? No. Yeah, I give this a nine because it depends on the financial impact it could be. But if you’re going to sell a business, it’s usually a pretty big deal. May not have to be $100 million, but even if it’s 500,000 or a million or $2 million, for a lot of entrepreneurs, they’ve reinvested and reinvested in their business to grow it over time. And even though they’ve maybe made a fair amount of money, they may not have saved a whole lot from a liquid retirement savings perspective. So the transaction of selling the business can be their retire liquid retiree amount, which then, of course, has the purpose to generate more income in retirement. So there’s a lot of gravity to the financial impact here, but you’re also walking away from what is often your life’s work. That’s why I give this a nine on the impact scale.

Wes Moss [00:31:33]:

So much planning needs to be done here and can be done here. How do you structure the deal? What are the taxes going to be? How should you then invest the money? The implications for your time and your sense of purpose, put it all together and the sale of a business is huge on the retire Sooner Richter scale. Huge, big financial and life impact. The good news here on this one, though, is that you have lots of opportunity to do planning around this, so the impact is as positive as possible. Number 13 on the list inheritance. Now, this one you don’t choose. This is something that most people don’t even like planning for, because you don’t want to even consider or talk about if something happens to a loved one. Inheritance.

Wes Moss [00:32:23]:

I put this actually, what would you put this, by the way?

Mallory Boggs [00:32:26]:

So I think this one’s a really tricky one. I will say I feel like for some folks it’s going to be super low, which is perfectly fine because it’s so uncomfortable to think about. I think anybody would give any amount of money to keep those that they love. And then for some people, it might be a huge retirement catalyst, though, right?

Wes Moss [00:32:47]:

And what’s interesting, over all these years and I’ve worked with literally hundreds of people that have inherited money. Almost very rarely does it have a life changing financial impact. From what I’ve seen, yes. There are few stories that I know of the long lost aunt or uncle that leaves way more money than you ever thought. Even in those few instances that were pretty big inheritances, those retirees were already in a pretty good financial position, so it didn’t really change their life all that much. We know the statistics around inheritance, it’s multitrillions of dollars will be passing from one generation to the next over the next decade, but it’s not something you have any control over. One and two, it’s not something you won’t ever bank on and you don’t really model it out and plan for it. I think it’s totally fine to acknowledge it, but what I’ve seen people do over the years is acknowledge it but not ever plan on it.

Wes Moss [00:33:55]:

And if it happens, you’re dealing with a sad situation, typically anyway, but then you’ve got extra financial cushion that you didn’t already need. So I put this relatively low on the retire sooner Richter scale. I’d put this down at a three or four, number 14 on the list here. I would call these just Happy Birthdays because these are just birthdays that automatically come with big life catalysts, big financial catalysts. Almost all of these turning age 59 and a half, 62, 65, 67, age 70, 73. These are all huge age milestones that then unlock financial opportunity for the most part at age 59 and a half.

Mallory Boggs [00:34:40]:

Is what you can first access your 401K, right?

Wes Moss [00:34:44]:

Well, you can first access your 401 without the 10% penalty and an IRA without a 10% penalty at 59 and a half. That’s our typical hey, I can use my retirement money age. But there is the rule of 55, which is if you’ve left a company age 55 plus and you’ve left money in a 401K, that’s a special rule where you can access your 401K money potentially, but not IRA money. But that’s only if you’ve left that company and a 401 age 55 plus.

Mallory Boggs [00:35:23]:

So 55 plus is a big 159.

Wes Moss [00:35:26]:

And a half is a big 162. 1st year you can get Social Security. Not saying we want to take Social Security as early as 62, but you can. 65 medicare 67 is going to be within that FRA age, the full retirement age that most people should be looking at. Then of course, age 70, which is the latest you can wait with Social Security and your Social Security payment stops going up at age 70. And of course you would want to start taking Social Security no later than 70 or else you’re just giving money away and then 73. So 73 is the new age for required minimum distributions. If you’ve already started RMDs, then you’ve got to keep doing them.

Wes Moss [00:36:09]:

But now, for example, if you’re age 70 today, your RMDs will start at age 73. Required minimum distributions. Again, all big catalyst here. All right, Mallory, number 15 is unretirement. 16 investment performance. 17 tax law changes. 18 taking on debt or getting rid of debt. 19 long term care, and 20 changes to estate planning.

Mallory Boggs [00:36:38]:

You just ran through a lot of them real quick. Are we going to go through and give some numbers here?

Wes Moss [00:36:41]:

Well, okay, so we already did a full episode on Unretirement.

Mallory Boggs [00:36:44]:

That’s true. I do love that one.

Wes Moss [00:36:46]:

Almost 2 million people have seemingly unretired, and almost 2 million people have now gone back to work. So we’re kind of@a.net zero at this point.

Mallory Boggs [00:36:56]:

And it’s a big catalyst. If you are retiring and if you’re in retirement, then you decide to not retire. You want to talk about a huge life catalyst, you got to figure out then the finances. What do you do with Social Security if you’ve taken it? Do you give it back? And then, of course, you got to take into account the financial planning around having new income, and then what does that even look like with your taxes? It’s all very complex.

Wes Moss [00:37:16]:

You must have been the producer of that episode.

Mallory Boggs [00:37:18]:

Like, I was paying attention.

Wes Moss [00:37:20]:

We met. You were a marketing person, that you’re all marketing and you didn’t even know what an IRA was. It’s been so many years now, you actually know almost as much as a lot of financial advisors now.

Mallory Boggs [00:37:33]:

Do you know that Wes looks very scared for all of our listeners?

Wes Moss [00:37:37]:

I’m just saying, if you ever get out of marketing, you could actually be a financial advisor if you ever wanted to.

Mallory Boggs [00:37:43]:

Oh, thank you. I’ve got all the knowledge. I will say I don’t love what.

Wes Moss [00:37:47]:

Would ever stop you from doing that.

Mallory Boggs [00:37:48]:

I just don’t love the numbers.

Wes Moss [00:37:49]:

Don’t love the numbers.

Mallory Boggs [00:37:50]:

I don’t love the numbers.

Wes Moss [00:37:51]:

Right. When I ask you numbers, you do say no. You do them.

Mallory Boggs [00:37:55]:

I love to just say that is not my wheelhouse. I do the marketing and I love the producer, but I love learning this.

Wes Moss [00:38:00]:

You’ve gotten to be good at all the financial planning rules. That’s really hard for some people.

Mallory Boggs [00:38:04]:

Thank you. That is one thing that I do really enjoy. And you know what I’ve really enjoyed with this podcast? Getting to learn a lot about them.

Wes Moss [00:38:11]:

Speaking of the numbers, number 16 on the list, investment performance. How’s that a life catalyst that I can totally see?

Mallory Boggs [00:38:19]:

Well, because we know that so many people get very scared whenever things are going down with the markets, I think it ends up pushing some people forward and retiring sooner. Do you see that? Or do you tend to see more people retire sooner when the market’s going up?

Wes Moss [00:38:36]:

Okay, so, yes, I particularly remember when I was very early in the financial industry, I started in the latter ninety s, nineteen ninety s and the nineteen ninety S were the golden ages for the S and P 500. I mean, just amazing returns. We had multiple 20% plus annual retirees over and over and over again, and assumptions got out of whack. And I remember as an intern running financial plans, and it wasn’t uncommon for a grown up financial advisor to run a financial plan at seven or even 8% annualized rate of return.

Mallory Boggs [00:39:20]:

Wow, that feels very aggressive.

Wes Moss [00:39:22]:

And I’ll tell you, it’s pretty easy to make any retirement plan work if you’re running it at seven or 8%. Because at 7.2% we know rule 72 money doubles every ten years. And if you say you’re going to spend 6% of your money, but you’re making particularly in these old financial plans that run linearly, you’re making seven and a half and you’re spending six. That works in infinity. Your money just keeps going up even though you’re taking it.

Mallory Boggs [00:39:51]:

Looks great.

Wes Moss [00:39:52]:

Looks great on paper.

Mallory Boggs [00:39:53]:

Yeah.

Wes Moss [00:39:55]:

Then the year 2000 came and we went into a massive bear market and then the Nasdaq dropped over 80%. So people that were heavy in tech had skewed assumptions of the future. There were a lot of people in the United States that lost a lot of money, and that puts you back at the drawing board. Now, it’s not always this period. There are some scenarios in reverse where you end up making a whole lot of money that you might not have thought of. And I’ve seen people that did really well in particular companies that they maybe had a stake in, and it wes not an overly significant stake, but they held onto it and over the last 20 years it’s up multi thousands of percents. And that’s been a catalyst to be able to retire sooner than they thought. Again, I think investment performance, if you’re following fundamentals where you’re diversified, you’ve got multiple asset classes combined to work together or offset each other or balance each other.

Wes Moss [00:41:04]:

I think with proper planning, this one can be pretty low. On the Richter scale, it can be a three or four. But in the scenarios that we just outlined, people that get caught out on a limb, overly exposed, it could end up as a nine on the impact scale, particularly if you’re losing and getting burned if you’re not diversified. 17. Tax Law Changes now we live in a world where it seems like Congress can’t decide anything what’s for dinner? Let alone get together and do a tax law change. But there will be times when we’re going to face changes in the tax code. It’s just going to happen. But we’re all also under the same set of rules.

Wes Moss [00:41:52]:

Now we’re in different tax brackets and the tax code impacts us differently depending on our income or net worth. But it’s the same tax code for everyone. I’m not dismissing this one, but I’ll put it as a two on the retire sooner rector scale. Debt. Either taking out new debt or paying off debt can have a really big impact. So we know that retirees who are within five years of paying off their mortgage are four and a half times more likely to end up in the happy retiree camp. So paying off debt is a really positive financial accomplishment, and psychologically, it’s a tailwind as well.

Mallory Boggs [00:42:38]:

Yeah, I feel like if you pay off a mortgage, it’s easy to just be like, all right, you know what? That’s all my big bills. I’m about to have my taxes go down. Maybe it’s a good time to retire. That sounds so lovely. It’s so far away from me.

Wes Moss [00:42:50]:

All right. Number 19 needing long term care. Now, we already covered becoming a caregiver. This is meant for if you end up having to go into long term care.

Mallory Boggs [00:43:02]:

I feel like we get a fair number of questions on this as well.

Wes Moss [00:43:07]:

This one’s tricky because there used to be a period of time where you could buy long term care policies and you could buy long term care policies, and they were relatively affordable. The problem is the industry made them too affordable for what they ended up paying out. So they ended up being really good deals because people didn’t pay a whole lot, and they got a lot of long term care coverage. They got 100 and $5250 a day for long stretches of time. It ended up being highly utilized and continues to be. And that’s why some of these companies just went out of business, because they couldn’t cover the claims. Now, long term care insurance companies have made the care more appropriately expensive. Problem is, people can’t afford it.

Wes Moss [00:43:52]:

So we almost need to look at our own retirement planning to also include our asset to be able to pay for our long term care.

Mallory Boggs [00:44:04]:

And I can see how that would be a major Richter scale shift when it comes to an early and happy retirement.

Wes Moss [00:44:12]:

It is big. I’d put it as a six or a seven because I think it’s something we should certainly be able to plan for. Then at number 20, creating or revising a will.

Mallory Boggs [00:44:25]:

That sounds terrible. No, thank you.

Wes Moss [00:44:29]:

Nobody likes to do this. My first will, it was a long time ago, but the catalyst was us traveling once we had a child. So Lynn and I did a couple of trips. So I think we went to Italy for her 30th birthday. And then pretty soon after we had our oldest ben was one, and we got invited to a destination wedding down to Costa Rica. And it was for one of my friends.

Mallory Boggs [00:44:57]:

And it’s going to be extra dangerous.

Wes Moss [00:45:00]:

Well, no, she goes look, she goes, we’re not going to your friend’s wedding without you getting a will in place.

Mallory Boggs [00:45:08]:

She’s a smart woman.

Wes Moss [00:45:11]:

She had a good leverage point.

Mallory Boggs [00:45:12]:

I was smart on her part.

Wes Moss [00:45:14]:

You know, we didn’t put on this list. And again, here’s my disclaimer. Consult your tax and investment advisor together on a lot of these. Number one. Number two, it’s not a comprehensive list. We could have done 50 of these. One I realized we didn’t put on here. We didn’t even put divorce on this list.

Wes Moss [00:45:32]:

Wes didn’t put divorce on this list, which of course it needs to be. Yeah, bottom line, every single one of these can be a big deal and they can have a huge impact on the course of your life and your money and your overall well being. These life catalysts happen to all of us, to the best of us and the worst of us. Really, all of us, all the time. Some of these are simply your choice. Like moving. Some of these you’re forced to do, maybe with a job. And some of these we have very little control over death.

Wes Moss [00:46:10]:

Who your kids marry? That’s another one on this list we didn’t put in laws. The good news is that and by the way, I love my in laws the good news is that the fundamentals of retirement planning and financial planning and income investing can prepare you for everything on this list. Run a financial plan. Use the 4% plus rule Diversified Income Investing to beat inflation. Don’t let your kids educational costs tack on an extra five years onto your to a job or career that you don’t love. And if your planning doesn’t help you sidestep something on this list, then at least you can be prepared to deal with it.

Mallory Boggs [00:46:55]:

Hey y’all, this is Mallory with the Retire Sooner team. Please be sure to rate and subscribe.

Mallory Boggs [00:47:00]:

To this podcast and share it with a friend.

Mallory Boggs [00:47:02]:

If you have any questions, you can find us@wesmoss.com that’s wesmoss.com. You can also follow us on Instagram and YouTube. You’ll find us under the handle Retire Sooner podcast. And now for our show’s.

Mallory Boggs [00:47:14]:

Disclosure this information is provided to you as a resource for informational purposes only and is not to be viewed as investment advice or recommendations. Investing involves risk, including the possible moss of principal. There is no guaranteed offer that investment return, yield or performance will be achieved. Stock prices fluctuate, sometimes rapidly and dramatically due to factors affecting individual companies, particular industries or sectors, or general market conditions. For stocks paying dividends, dividends are not guaranteed and can increase, decrease or be eliminated without notice. Fixed income securities involve interest rate, credit, inflation and reinvestment risks and possible loss of principal. As interest rates rise, the value of fixed income securities falls. Past performance is not indicative of future results when considering any investment vehicle.

Mallory Boggs [00:47:58]:

This information is being presented without consideration of the investment objectives, risk tolerance or financial circumstances of any specific investor and might not be suitable for all investors. Investment decisions should not be based solely on information contained here. This information is not intended to and should not form a primary basis for any investment decision that you may make. Always consult your own legal, tax or investment advisor before making any investment tax, estate or financial planning considerations or decisions the information contained here is strictly an opinion and it is not known whether.

Mallory Boggs [00:48:28]:

Strategies will be successful.

Mallory Boggs [00:48:30]:

The views and opinions expressed are for educational purposes only as of the date of production, and may change without notice at any time, based on numerous factors such as market and other conditions.