Mastering Retirement Cash Flow (Part 1): Understanding Changing Expenses

On This Episode

In this episode, we’ll explore many of the expenses in your life that might drastically change (one way or another) in retirement. We’ll break those expenses down further to see which ones are the top priorities and analyze some of the other factors that impact your cash flow in retirement.

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PFG Private Wealth Management, LLC is an SEC Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents.

Here is a transcript of today’s episode:


Marc: Welcome back to the podcast. It’s Retirement Planning-Redefined, with John and Nick here with me to talk investing, finance, retirement, and mastering retirement cashflow, part one, is going to be the topic today. We’re understanding just changing expenses. We’re going to break this into really a two-parter here, obviously, by calling it part one. And we’ll do a little more focus on some of the other things on the next session. But for today, I want to explore some of the expenses in life and how they just change as we’re moving some things … as we’re moving from working into retirement. And things you guys see with your clients and how you work through that process for them. So that’s the topic today. Let’s get into it. John, first of all, how are you doing, buddy?


John: I’m doing all right. Getting ready for the summertime here.


Marc: If it happens. I don’t know what’s going on in the south. I’m in North Carolina, and we’ve had one 90 degree day, and it’s almost July. Totally unusual for us, so it’s very, very weird.


Nick: Oh, it’s hot here.


Marc: Yeah. It’s like two states seem to be in a weird spot. I don’t know what’s going on with the middle of the south here. It’s very strange this year. But Nick, I heard you chime in. How are you, my friend?


Nick: Doing pretty good.


Marc: Yeah. So you guys are sweltering, is that what you’re saying?


Nick: It’s definitely hot, yeah.


Marc: Well, kick a little this way because I don’t know what’s going on. It should be warmer here than it has been. So, very weird.


Nick: Well, I’ll trade.


Marc: Okay. All right. Yeah. Like today, it’s … well, we’re getting a ton of rain. Today, taping this podcast, it’s 72 for the high, and tonight’s overnight low is 58. That doesn’t happen usually in North Carolina in late July or late June.


Nick: Yeah. That is pretty surprising. That’s cool for North Carolina.


Marc: Very, very weird. So I don’t know, Mother Nature is off her meds, I guess. But what can you do? So let’s get into this conversation, guys, about changing cash flow, before I keep going down that tangent. I’ve got a few parts here I want to run through. What are some of the expenses that might drastically change one way or the other, either to saving us money or to costing us more money? Whichever way you guys want to take this, whatever you’ve seen with your clients. But let’s start it off with housing. I think housing is probably the number one expense in retirement. Correct me if I’m wrong there, but what do you think?


Nick: Yeah. I would say for a lot of people that maintain a mortgage past retirement, it’s definitely a significant monthly expense. One thing that we are seeing here with the tick up in interest rates over the last 12 months, we had had conversations with multiple clients from 2018 through 2021 about taking advantage of low interest rates and keeping their mortgage and that sort of thing. And for a lot of people, that makes them feel uncomfortable. But to a person, everyone that we’ve talked to that has done that, now that rates are where they are, they’ve been pretty happy about that decision and being able to take advantage and lock in those low rates. But for those people that just naturally, with the schedule mortgage that they had, and ended up paying off the mortgage by the time they retired, that drop in expenses is usually a big help. I would say one thing that jumps out that’s a reminder that we use for people is … especially because the homeowner’s insurance market here has now gone completely insane. Taxes and insurance don’t go away. So I can’t tell you how many times we’ve had a conversation where maybe somebody had a mortgage that was $3,000 a month, and they’re like, well, once I retire, that 3,000 a month is going to go away. And we point out, well, hey, about half of that is. The rest of it’s for taxes and insurance. So sometimes that drop in expense isn’t quite as much as they thought it was going to be.


Marc: Gotcha. Yeah. And it’s easy to do, even with downsizing, because the market’s been high. So it’s not always just lowering things just to go to that downsizing piece. John, what’s your thoughts there?


John: Yeah, I would say the downsizing is a big part of it. Not only if you downsize, you might be able to get some equity out of your house there. So if you downsize, buy a two or $300,000 house, you get some cash that you could do something with. But then you start looking at smaller house, less homeowners insurance, less maintenance costs, things like that, it could really be a pretty significant savings. Especially, as Nick mentioned here, with homeowners insurance. I think mine went up like 60 or 70% in a year, which was … … I’ve heard a lot of people. At first, I thought it was just me. And then I talked to some clients, friends, family, and it seemed across the board that it just shot up.


Marc: That’s hefty.


Nick: Yeah, there’s a lot people that are falling between five and $10,000 a year now. For homeowners insurance down here, it’s gone just wild.


Marc: Well, I imagine the big hurricane added a lot to that, right? That’s probably part of it. From last year.


Nick: Yeah, yeah.


Marc: Yeah, for sure. Insurance companies are like, we got to recoup some money. How are we going to do that? 60% hikes. All right, no more work stuff. Category two on the changing in expenses. I think we probably assume for the most part that no more work stuff means we’re going to save a little bit of money.


John: Yeah. So this is something that when we do planning, we definitely hit on. We have different categories of current expenses and then retirement expenses, and then we actually go one further and we’re looking at advanced age expenses. But this is one where you’re not commuting anymore, or at least to work. So depending on what your commute was, you could be saving quite a bit on gas, car maintenance expenses, things like that. And then the big one, I know when Nick and I worked in West Shore, was the lunch expense. Where it’s like every time for lunch it’s like, all right, where are we going? A good excuse to get out of the office and just get a change of scenery, you find you’re going out to lunch every day. That does tend to add up quite a bit.


Marc: Oh, yeah. You can spend some dough that way, for sure. So I think in this category, we feel like … and this one I think maybe drives a lot of people feeling like, oh, I’m going to spend less money in retirement. Right, Nick? I mean, this is one of those things. Well, I’m not doing all those things now, so I’m going to be saving money. But you’re also doing more stuff because you don’t have to go to work, so you may not save as much as you think.


Nick: Yeah. I would also say too, that this post-COVID work from home shift has prepared a lot more people to have a better idea of the expenses that have changed. We do have a fair amount of clients that used to commute, and no longer do. And so they’ve gotten a peek into what that looks like. And people are creatures of habit. Inevitably, they develop new things that they do, and usually there’s other expenses that replace previous ones, but-


Marc: There’s always something, right?


Nick: Yeah. But oftentimes, there are reasonable reductions in some of those work-related expenses.


Marc: Okay. Let’s go to healthcare. This one here, this one to me seems like this is not going to be going into the positive. This is not going to be putting money back in our pocket. More than likely, this is going to cost us more.


Nick: Yeah. I mean, for a big chunk of people, especially if they work at a company that has pretty good health benefits, and maybe they haven’t had their kids on their plan for a while, so it’s just them and a spouse or them solo. Oftentimes, the shift to what we budget for post-age 65 Medicare-related premiums, oftentimes it goes up for people. So we typically budget about $4,000 a year, and we have a more aggressive inflation number that we use on that. Oftentimes, people come in less than that, especially with a high deductible plan, those sorts of things. I just had this conversation the other day with someone, where they were going to have a pretty substantial jump. And they had worked for the same company for a long time, didn’t realize-


Marc: You mean a jump in the premiums?


Nick: Yes. Yep. They had worked for the same company for a long time. It was big company and had really good health benefits, and premiums were going to go up. So it can be a little surprising that way. If it’s somebody that’s shifting more from the perspective of, kids recently got off their plan and they’re cutting back on … maybe went from a regular health plan to a high deductible, those sorts of things. It can be a drop. But honestly, I see it more neutral or go up than I see it go down.


Marc: Yeah, definitely. John, taxes, let me hit you with this one. This is a big misnomer that’s been around for years. That when we get to retirement, our taxes are just generally lower because we’re not getting a paycheck, we’re not making as much. But more times than not, eight out of 10 times people are not in a lower tax bracket.


John: No. Typically, they tend to be in the same, if not, maybe a little bit lower. Because what you’re really trying to do when you do planning is you want to keep the person’s income where it was while they were working.


Marc: Right. You’re trying to fill in the … you’re shortening the short shortfall. You’re pulling from our assets to make up the shortfall based on Social Security or if you have a pension or whatever those kinds of things are. So you’re trying to keep the numbers basically the same, correct?


John: Exactly, yeah. So we are trying to keep the numbers the same. And we find a lot of people … I would say we find the majority of people have most of their money in pre-tax accounts. So what you’ll find is when you’re pulling out of the pre-tax accounts, you’re paying taxes on it. So this is really important when it comes to planning, where you … and we harp on this constantly. It’s a matter of setting yourself up to adjust. So maybe if you have some tax-free money, some after-tax dollars in some other accounts, you can really try to eliminate … or not eliminate. But try to lower what your taxes are going into retirement. And I’ll say one thing that happens quite often with clients, and this is only maybe a year or two that we see in retirement, is they just have a couple of years of just massive expenses where … we just had someone that’s purchasing a second home and they need to pull out of their retirement account. And all of a sudden, it’s like in that given year, that’s going to be a big tax hit. Or it’s a health expense. Or I’ve had other ones where they want to do a remodel on their house and it’s like, well, I got to pull money out of my account. And everything is pre-taxed, so they really get … we see a significant increase in their taxes in those years.


Marc: Yeah. And that’s why we want to get tax efficient, if we can. And maybe that’s worth looking at, trying to maybe move some money so we don’t have that tax time bomb sitting there waiting on us. Some different things. And speaking of actually that, Nick, let’s go to the next one here because you can chime in, it fits well with that. Is one of the biggest things we’re doing is pumping money, hopefully, especially the last 10 years of working, into our retirement account. Maybe that 401K that John was just talking about. And therefore we’re growing those dollars. And that is an expense that goes away once we stop working, we’re no longer feeding that.


Nick: Yeah. That deferral is usually the lowest hanging fruit of expenses or cash flow going down.


Marc: Money back in our pocket, kind of thing, right?


Nick: Yeah, exactly. That outflow is usually the biggest drop, especially if it’s … if you’re talking a couple that is essentially, maybe they’re both maxing out or pretty close to maxing out, they’re saving around 25,000. That’s $50,000 a year. Granted, that’s the money that they’re used to living on anyways.


Marc: Yeah. Because we weren’t seeing that. When we’re working, it’s going straight to the paycheck … or straight to the 401, for example. But now that we’re not working, we also don’t have the paycheck. So to me, is it truly a savings or is it a wash, because you weren’t seeing it before either? You know what I mean?


Nick: Yeah. I think for a lot of people it’s a wash. Realistically, in the day-to-day setting and from a lifestyle perspective, it tends to be a bit of a wash.


Marc: Okay. Yeah.


Nick: Yeah, it’s more of an on-paper reduction, more than anything.


Marc: Makes sense.


Nick: And in theory, when you start … if you want to nitpick a little bit. The money that you defer into those plans, you still pay payroll taxes on it. So there’s a little bit of a savings there. So that’s something that can factor in. And one of the changes that fits in with both the tax and retirement things is a lot of times at that point in time, they’re no longer claiming kids. Maybe the mortgage is paid off. So from a deduction perspective, there’s also a change as well from the standpoint of what they’re able to deduct versus what they can deduct in retirement.


Marc: Okay. And so what we’re doing is we’re talking about these categories here on understanding how our expenses are going to change, whether it’s to the plus or to the minus. And then we’ll talk a little bit more later on about how that’s going to affect us in our overall expenses and some things to cover in ways to be more efficient in that. So let’s continue on with a couple more categories here and then we’ll wrap it up for this podcast. So we went through housing, work stuff, healthcare, taxes, the retirement savings account when we’re no longer feeding the 401 animal. John, so you mentioned earlier travel and leisure, when you were talking about there’s different things we’re going to spend money on. So if every Saturday is the day I spend the most money, well, guess what retirement is?


John: Every day seems like it’s a Saturday.


Marc: It’s a bunch of Saturdays, right?


John: Yep.


Marc: It’s Groundhog Day.


John: The more time you have, you find yourself trying to fill the gap of what to do. And we see a lot of people that are, if they’re like golfing, they tend to be golfing a little bit more. Or fishing or whatever it might be. I’ll see-


Marc: But that’s the point, right? That’s the point of retirement. It’s what we’re striving for. But I think the scary part is, is if we haven’t budgeted for how much we’re … the activity. That’s when we can maybe shortfall ourselves.


John: Exactly. Yeah. That’s where it’s important where you’re doing a cashflow analysis for retirement. Like I said, we typically look at retirement expenses. We’ll look at what the person does for hobbies and try to estimate, okay, this is what we can expect. And you always want to go over the amount, you never want to go under.


Marc: I was going to ask you that. Yeah. You want to-


John: Yeah, you always want to go over, because-


Marc: … inflate it a little bit.


John: Yeah, exactly. I’ll tell you this … and my wife doesn’t listen to the podcast. When she’s at home more, I start to notice my Amazon bill goes up and packages end up at the door. So when there’s a lot more downtime, you tend to say, okay, what’s out there? Oh, let me go run to the store. Let me go do this real quick. And all those things add up to just added expenses, which fine-


Marc: Yeah. Well, sitting on the computer or the phone, you’re just like, I’m bored, I’m not doing anything. Next thing you know, you’re on some sort of shopping site because you’re like, I was thinking about this or that, or a new set of golf clubs. Right, it’s easy to do.


John: Home projects because Pinterest is giving you all these different ideas that you should be doing with your home. So yeah, all those things are up.


Nick: All right, John. This is not a therapy session.


Marc: No, but I mean he’s right, though. I mean, it totally … and people do that.


John: So Marc, that’s coming from the single guy right now.


Marc: Right. Yeah, exactly. Yeah, I was thinking the same thing. And you mentioned, you were talking about projects, DIY projects or Pinterest. We’re right in the middle of rebuilding … I’m building a billiards room here next to my office for the pool table. And it’s just, scope-creep has taken over. It’s like, oh, I can … I factored in the budget. I’m like, I could do it for this amount of money. And I’m way over budget. And that’s, again, if you’re retired … I’m still working. But if I was retired, that could be a real problem. If I let scope-creep get in there and I’m spending 25% more than I budgeted for this project, that could be an issue. So you want to make sure that you are inflating it, to your point. Puff those numbers up a little bit, just to be on the safe side.


Nick: Oh yeah, big time. I don’t think I’ve seen anybody come in under budget on anything in the last three years.


Marc: Yeah. And that’s with professionals, let alone doing it yourself, right?


Nick: For sure.


Marc: Okay. So that’s travel and leisure. So the last one here, last category, insurance. Many people, guys, walk into retirement saying, well, I don’t need insurance anymore. That’s also that old standard, as far as the financial services world. Well, who needs … why do you need insurance if your kids are grown and you don’t have to replace your income because you’re not worried about sending them to school. Or all that kind of stuff that you guys have heard probably a million times.


Nick: Yeah. So we’ll see … one of the most common insurances that go away, whether it’s at retirement or early in retirement, is life insurance. So we obviously emphasize the fact that a death early on in retirement is the bigger risk, especially if there’s outstanding debt, those sorts of things, versus later on in retirement. So sometimes we’ll have people that, maybe they’ve got three to five years left on their term policy and the premiums aren’t prohibitive. And we’ll just them keep the coverage because there’s still a mortgage, or just that additional money if something were to happen would be a big boost to the surviving spouse. But disability definitely goes away because disability insurance, by definition ensures your ability to work. So if you’re not working, then you’re not insuring anything. So that’s something that drops. And then some of these supplemental policies that maybe were provided by the employer, aren’t portable and you can’t take them with you anyway. So some of those things will drop off. So that’s definitely something that can be adjusted and adapted to reduce some of the costs.


Marc: Well, I think for every situation, insurance is one of those questions, John, that goes either way. Some people may not, when you guys are developing and looking through the plan, maybe insurance isn’t needed. But then again, maybe it is. Or maybe they’re using an insurance policy for the cash value policy side of things or whatever. So this one is one I think could go either direction.


John: It definitely could go either way, it really depends on the individual. And like we were just talking about here, each person, whatever is important to them will dictate whether your insurance is going to be going up or down. That’s really what it comes down to is, each individual, what they value and what they want to protect with insurance and what they’re … oh, okay. I’m okay without it.


Marc: Well, and that’s a good way to think about what we’re going to get into for the next podcast, is really assessing must-haves, nice-to-haves, things of that nature. And then how other aspects in the financial services world could affect those categories we just ran down. So we’re going to wrap it up this week. So again, these are just the expenses categories, and some major ones here to think about how they may change to the plus or to the minus with our cash flow in retirement. And we’ll be back next week with the second half of this conversation. So do yourself a favor, if you haven’t done so yet. Reach out to the team if you don’t have a strategy or a plan in place, and get started with a consultation and a conversation for yourself. You can find the guys at That’s, where you can get started today on a strategy for yourself. Reach out to John and Nick there. And guys, thanks for hanging out. I’ll see you next week … well, in two weeks on the podcast. Nick, have a good one.


Nick: See you.


Marc: All right, John. Thanks, buddy.


John: Sure.


Marc: And I’ll catch you later. We’ll see you guys here on retirement Planning-Redefined, with John and Nick.

Ep 60: Top Social Security Myths, Part 2

On This Episode

This is part 2 of our Social Security conversation. We will be debunking the remaining 5 myths on today’s show.

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More Episodes

Check out all the episodes by clicking here.



PFG Private Wealth Management, LLC is an SEC Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents.

Here is a transcript of today’s episode:


Marc: Back for another edition of the podcast. This is Retirement Planning redefined with John and Nick from PFG Private Wealth, serving folks all around the area here. So reach out to them on the podcast, is where you can find them online for a lot of good tools, tips, and resources. You can subscribe to the podcast, book some time with the team, all sorts of good stuff. Again, stop by the website if you’re not already working with them at And if you haven’t subscribed to the podcast, consider doing so while you’re there. We’re on Apple, Google, Spotify, and all that good stuff. So you can check that out. And this week we’re going to follow up with the second half of our social security myths. We did the first five on the prior episode. You don’t have to have listened to that one to listen to this one, but it certainly isn’t a bad idea to go back and check that one out. So that one came out a little bit earlier in April. So we’re going to drop this one here and get into the second half of this, the next five myths. Guys, you doing all right this week, John? How are you buddy?


John: I’m doing good, having a little contract work done at the house, which is, as you know Mark is –


Marc: Challenging.


John: I’m dealing with that. It’s always a challenge and fun.


Marc: That’s right.


John: Looking forward to the project being complete.


Marc: Yes, we need more contractors, we need more people who are in the trade services. That is for sure as there is a major shortage all across the country, really I think globally actually as well. But Nick, what’s going on with you bud?


Nick: Staying busy for sure.


Marc: Spring is here and the weather’s nice. That’s always good.


Nick: Yeah. Although it has been warmer here than I feel like typical this time of year.


Marc: Could be a hot summer then.


Nick: Yeah. So hopefully it cools down just a little bit for the next month so we can enjoy the end of spring.


Marc: Have an actual spring, not skip it.


Nick: Yeah, that’s all I’m asking for.


Marc: There you go. Well, let’s jump into some myths here and see if we can help some folks out with some more of these. Again, we did the first five, which are kind of the big five I think that many people hear often, but I’ve got some other unique ones as well. So these might appeal to some folks who are thinking about social security or getting close to that age and are wondering about some of these things that they’ve heard maybe online or on the news or whatever. So let’s jump in, talk about a few things guys. Myth number six, out of the total 10 we were doing, you can’t work and receive social security benefits at the same time. I think this myth revolves around the fact that if this applies to people who take it early, because there are some limitations. So Nick, why don’t you break this one down a little bit?


Nick: Yeah, just like everything else, the devil’s in the details. So essentially the way that SSA, Social Security Administration, looks at this is kind of from a tiered perspective. So they break it down in essentially three sections. So from when you’re first eligible which is 62 up through essentially before the year that you reach full retirement age, and then the year that you reach full retirement age has its own section, and then the period of time after your full retirement age. So as an example to bring that all together and make it make sense, you can have income while collecting social security before your full retirement age, but there is a limit. That limit is about $21,000, little over $21,000. And for every $2 that you make over that amount, you have a $1 reduction or penalty on your social security.


Marc: So almost like part-time, you could do part-time work if you took it early, so to speak, right?


Nick: Yeah. And a lot of times that’s kind of the ticket for some people is to work part-time, keep them busy, help them transition into retirement, and to help prevent them from having to dig into their nest egg. They might file and collect social security and those numbers kind of balance out, they have income less than the amount that would cause a penalty, and so it works out for them. In the year that you reach your full retirement age, that amount goes up to about 56,000. So essentially what they’re saying is we understand that birthdays range and that from a calendar perspective it can get a little bit tricky. So they say that you can collect your benefit and earn up to the 56,000 without any sort of penalty. Once you’ve reached your full retirement age, there’s no income limit at all. So you can do a full double dip per se in that scenario.


Marc: Yeah I mean if you make $1,000,000 a year and you’re 69 years old, that’s fine, right? Let it rip.


Nick: Yeah. What you’re giving up per se is the 8% increase per year on the social security benefit. So there is some sort of give up, but whether or not that has a big impact depends on somebody’s situation.


Marc: If you’re waiting till the 70, right?


Nick: Correct. Yeah. If you’re to wait until 70. So some scenarios that we see this work out really well are somebody hits their full retirement age, they plan on continuing to work, but maybe the mortgage isn’t paid off, so they’d like to turn on the social security with the goal of, when they retire at 70, these social security payments that are coming in, will go directly towards paying down the mortgage and they can retire without having a mortgage. Or maybe they’re behind on their retirement funds. And so they want to make sure that they can really maximize retirement savings, so they’ll collect and save it or just put the money away. So it’s like, I’m going to take this benefit, but instead of just spending it, I’m going to go ahead and save it and then I’ve had people say, this is going to be my vacation fund for our first five years of retirement. We’re going to save as much as we can, and then we’ll use that to pay for our vacations for those first five years where we’re most active in retirement, that sort of thing. So you can get strategic, but that’s kind of the breakdown of how it actually works.


Marc: Yeah and John, I think for many people that that’s where that confusion comes in, like my brother, for example, he’s already 65, but he is retiring before full retirement age, so he has to wait, so he can work part-time make up to that limit that Nick was just describing. But I think that’s where the confusion comes in. At least that’s what I’ve seen from my perspective. How about you?


John: Yeah, I’d agree with that. A lot of people confuse 65 Medicare eligible age to full retirement age and social security, so I’d agree with that. Something else that people typically miss with this or maybe just don’t fully understand is that this is based on the individual’s earned income, not household. So I’ve seen some scenarios where someone was thinking about drawing social security, they were retired, the other spouse was not, and I said, well, I can’t draw yet because our income is higher and our household income is much higher. It’s not based on household income, it’s based on the individual’s earned income.


Marc: Yeah, good point. All right, so that was myth number six. Myth number seven, I don’t think I’ve really heard this one before. Social security benefits are only for US citizens. This seems kind of like a no-brainer. That’s basically the case, wouldn’t it be?


John: Yeah this is definitely a myth, it doesn’t come down to whether you’re a citizen or not, it comes down to have you met the requirements to be eligible.


Marc: Okay, which is that 10 years, 40 quarters thing.


John: Yeah, 10 years, the 40 quarters there, and once you hit those, you are eligible for social security.


Marc: I wonder if some of this is for folks who retire abroad, so there’s some confusion there, because I even thought about it myself. My wife and I were joking. We were going to retire and live in Aruba part-time, and I asked myself, I wonder if you live in Aruba, can you still collect social security benefits? And I think if you have dual citizenship, I think you still have to maintain citizenship is my understanding. But it’s certainly something that you can have a conversation. That’s some of the questions that might make more sense when you’re going to the social security office versus saying, Hey, when should I turn it on? They’re probably better equipped to answer questions like that than they are answer questions about when’s the best time for you to activate it.


Nick: Yeah. One example that goes in with that too is you’ll have people that are considered permanent resident alien. So I can even give an example where in my family, my grandparents came from Cuba. My grandfather work was a professor at State University, and he spoke English and Spanish, but my grandmother had different issues and she never fully spoke English, so she never was able to do the citizen test, that sort of thing. But my grandfather was here his whole adult life and paid into social security, and so she was eligible for a benefit as a spouse and she has permanent resident alien status. So there’s different things like that that kind of come into play.


Marc: Yeah certain non-citizens then.


Nick: For sure.


Marc: Yeah. That’s cool. That’s a great example. Thanks for sharing that. All right, so myth number eight. This one is interesting, and I don’t know if this is state by state or why this myth is around, but see what you think about this one. If you have a pension, you’re not eligible for social security benefits. This just seems weird to me. I don’t think that one precludes the other.


Nick: Yeah, so I can kind of explain this as well. So what some states used to do with their pension system, and a lot of times it was, again, in certain states or even certain kind of counties or municipalities in certain states, they would allow, or their structure would be, instead of the person who was working for them paying into social security, they would pay into the pension. And so it was both they and the employer were paying into the pension system in lieu of paying into social security. And there’s a clause for this, what would happen. I know I for sure had some people in Illinois that dealt with this. And so because of that issue, there was this calculation that would offset the amount that they were eligible for social security. And so where people got in trouble would be sometimes what people would do is they would say, I’ll use a teacher for an example. So this whole program is called the windfall provision. And so what they would do was, so say a teacher, they knew that they weren’t going to be eligible for social security because of the way that their pension was structured, so they might work a summer job so that they could start to build in their 40 quarters and be eligible for social security, but they didn’t realize that there was an offset with how this worked. So the windfall provision, or it’s called windfall elimination provision, is something where if this sounds familiar, it’s something that you want to look into. And it was because the main part wasn’t paying into the social security, but unfortunately when they would get the scenario with the second job or something like that, that’s where it would almost penalize them because they would subtract the amount that’s coming from the pension out of the amount that they’d be eligible for social security.


Marc: Interesting. Okay. So the windfall provision, interesting. All right. John, any thoughts on that one?


John: No, run into the same scenario in Massachusetts where I’ve had some clients up there that have paid into the pension system up there, and basically they got reduction of social security benefits.


Marc: So it sounds like it doesn’t preclude you, it just may alter benefits.


John: There’s different situations.


Nick: Significantly. Yeah.


Marc: Okay. Good to know. Interesting. You never know sometimes, there’s always some sort of kernel to these things which kind of gets distorted and pulled out. So again, if you’ve got questions around this, and especially if you’re on a pension, you may want to certainly talk with your financial professional about that. And John and Nick are here to do so. So again, reach out to them at All right. Good stuff. Let’s do myth number nine. Social security benefits, John, are based on your income and assets. This one’s an interesting one, I think because I guess the confusion of thinking, if you have a, I don’t know, whatever your salary is, but then if you have a $5 million home, it’s somehow different than someone who has a million dollar home.


John: Yeah, that’s not the case. I mean, it is based on your earnings, which I guess some people could say, well, is that my income? And we’re going to talk about this later, it’s based on your highest 35 years of earnings.


Marc: But it’s not means tested, at least not now, not yet anyway.


John: Not means tested, but I’m glad you mentioned that. That is something that has been discussed as doing some means testing to basically help the program out where let’s say if you’re above a certain income or asset level where they start to reduce your social security benefit.


Marc: I mean, could you see Elon Musk ever needing or Oprah Winfrey ever needing social security? but technically they’re eligible, right?


Nick: With the means testing, that’s a tricky thing because the way that it goes kind of hand in hand is that people that exceed the cap, which I think right now is around 150,000, something like that in income, they no longer pay into social security. So there’s almost like a built in kind of means testing.


Marc: But doesn’t that have a donut hole, Nick, where it kicks back in again after a certain higher amount, you start paying again after $400,000 or something?


Nick: They’re discussing that, but not currently for social security. And it’s that way for Medicare, so for example, the Medicare portion of the tax is in perpetuity, and then there’s an additional amount over a certain amount of income. So what could be interesting is almost giving people an option of, and again, this is just speculation, but hey, you have the option to over this cap, you can continue to pay social security or have a means test later on when you retire. That’s something that could be interesting, almost like one or the other, or just remove the cap completely and then just have a maximum amount that could be paid out. So going back to what we had talked about in the other session, there’s definitely a way to figure this out, but somebody’s got to have the guts to do it.


Marc: Well for us, regular folk, I guess. So to John’s point, it’s not really based on those things. Not exactly anyway, it’s more based on your work history and your salary through the years, right?


John: Yeah. How many years you’ve paid into it and what those numbers were.


Marc: And so that just walks us into the number 10 here. So we’ll do that one. John, I’ll let you start with it then. So your social security benefits are based on your last jobs salary. And you kind of alluded to it, it’s really based on the highest 30 years, correct?


John: 35 years of earnings.


Marc: Sometimes I hear advisors say, hey, make sure you go to and take a look and make sure that your numbers are being reported correctly. Heard a lot of this during COVID, especially for folks who may have been laid off or things are kind of wonky to make sure those numbers do get reported correctly because that kind of thing can make an impact. And if you think about your highest earning years, John, many of us, that’s going to be between the ages of 40 and 60 or 45 and 65. So you want to make sure those numbers are correct.


John: Yeah, typically those are the highest earning years, and it’s always good to do a checkup every two or three years, especially after you’re hitting the 40-50 mark you really want to take a look at what did they put in there for me last year? I’d say more often than not, it’s accurate. If there are any issues, sometimes we’ll see them with someone that’s self-employed, so this comes always to the person that is self-employed and I don’t want to say determine their W2 income. It’s kind of like, how much income do you want to show for social security when you’re talking to your accountant? But that could be a negative if you’re doing some accountant stuff and showing lower income.


Marc: It could bother you for your earnings later, for your social security draw later on. I think about the highest 35 years when you’re talking about that, you could hear someone saying, well, I don’t remember what I made at Wendy’s when I was 16, 40 years ago. That one probably gets dropped off. So the idea of being the highest, again, 35 years versus maybe that first job way back when.


Nick: Just to kind of add to that context, because that social security cap has continued to go up over time with inflation it’s the highest 35 years in relation to the cap. So that’s something to understand because effectively your income income today, let’s say in theory, for example, $100,000 today compared to $75,000 20 years ago, that 75 may actually be a higher percentage compared to the cap. So there’s a little bit of nuance in there, but that’s just in general, that’s how it works.


Marc: Okay. All right. Well, some good stuff. John, any other thoughts as we wrap up this podcast on Social Security myths? Anything else you’d like to chime in with?


John: No I think we’ve hit all the points. I think we’re good. I think we did a good job debunking all these myths.


Marc: Certainly some good stuff in there. I think there’s a few things that might catch people by surprise. Nick, anything else before we go?


Nick: No, just the additional emphasis that it is a complicated decision and the good part of that is that there’s usually strategy involved and that you can do things to improve the overall planning for yourself. So just like a lot of things, the gift and the curse per se, but we’d rather have people have the ability to be able to adapt their decision making process to help make this a decision that improves their overall situation than be forced to do just the same old thing.


Marc: I like on the prior episode we were talking, John said that you guys can break things down a couple of ways. You can look at social security in a vacuum, but then also look at it as it applies to everything else that you have going on from a retirement standpoint. And I think that’s going to be a real advantage when folks are trying to sit down and figure out the best ways to handle something that can be actually a lot of money. I mean, social security could be a lot of income, total dollars applied to your retirement nest egg. So you certainly want to make sure you’re getting it right, and that’s what the team can help you with. So again, if you got some questions, need some help. As always, we appreciate the time on the podcast, but don’t forget to subscribe to them. And so you can catch new episodes and check out past episodes. But also just in case you need some help, stop by the website and schedule some time. Have a conversation with John, Nick and the whole team there at PFG Private Wealth. Find them online at That’s to get started today. A lot of good tools, tips, and resources. And of course you can also, again, find the podcast and subscribe there on the website as well. Find us on Apple, Google, Spotify, under Retirement Planning Redefined. Guys, thanks for hanging out. As always. I appreciate your time. I’ll sign off for us. But for John and Nick, I’m your host, Mark. We’ll catch you next time here on Retirement Planning Redefined.

Ep 59: Top Social Security Myths, Part 1

On This Episode

Have you ever wondered if the Social Security system will run out of money before you retire? Or if claiming benefits as soon as you’re eligible is the best decision for your financial future? In this episode, we’ll be debunking common myths about Social Security and answering the questions you’ve been curious about.

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PFG Private Wealth Management, LLC is an SEC Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents.

Here is a transcript of today’s episode:


Marc: Welcome into another edition of the podcast, it’s Retirement Planning-Redefined with John and Nick from PFG Private Wealth. Got a little two-parter going on this podcasting episode. We’re going to spend this one and the next one talking about some social security myths, some of the top social security myths. Some of these certainly, I’ve heard and many of the guys have heard, and maybe even the listeners have heard, but there’s a few in here maybe you haven’t, and hopefully it’ll help you out a little bit if you’ve ever wondered some of the questions or things that we hear on the news all the time. Now we’re constantly making the rounds online. So again, we’re going to break this into a two-parter. So if you have not yet subscribed to the podcast, make sure you do so at That’s P-F-G Just hit the subscribe button or heart button or whatever it is on various different apps you might have already on your phone, like Apple Podcasts or Spotify or Google or whatever the case might be in that regard. So with that said, we got a lot to get through. We got five this week and five for the next episode as well, so let’s dive in. Get started. Nick, what’s going on buddy? How are you?


Nick: Good, good. Just staying busy. I had some family in town this weekend, which is nice to visit, which tends to be a trend this time of year.


Marc: Yeah. Yes, we’re taping this right after Easter, so yeah. Yep.


Nick: Yep. And then tax season is always entertaining.


Marc: Oh, busy. Mm-hmm.


Nick: So yeah, so we’re just plugging.


Marc: Good, good, good. John, how are you my friend?


John: Doing good. Doing good. Just celebrated my oldest daughter’s seventh birthday and I’m like, “Man, she is…


Marc: Where does it go?


John: When she hit school, it’s like, “Man, this is going by much faster than I anticipated.”


Marc: Yeah, it always does.


Nick: Yeah.


Marc: Mine is 25. She’ll be home this week, actually, for a couple of days from the Navy. And yeah, I’m like, “God, 25. Really? Stop.”. It only speeds up my friend, so good luck with all that.


John: I believe it.


Marc: But happy birthday to her. All right, let’s get into some social security myths. Neither one of our kids, John, will need this anytime soon, but for a lot of our listeners, social security is certainly a big topic of conversation, whether you’re, I think, you’re 50 plus. I think anything financially related from a retirement standpoint, we start paying a little bit more attention, maybe getting a little bit more nervous about some things that we see in here. So let’s jump in and talk about some of these myths. Number one, whoever wants to tackle this, I’ll let you guys go. The Social Security Administration will help you make the best decision about when you should start your benefit.


Nick: I’ll jump in on this one. Although I have heard some reports from clients, recently, where some of the information and/or slash, I wouldn’t call it advice, but information has been more comprehensive when they’ve had appointments with Social Security. It’s definitely not going to be the primary resource that one wants to use, as far as helping them to make their decision. Ultimately, this is one of those things where the social security decision should be heavily, or for most people at least, is heavily dependent upon the rest of the parts of the planning and the scenario. Is there a pension involved? When is retirement? Is one spouse still working while the other is retired? So there’s a lot of different factors that go into deciding and figuring out which options, scenario are best. And a lot of times, one of the things that’s come up quite a bit, with people, is we try to explain to them that it’s almost a two-part decision, where three to five years out, we have a good outlook and projection of when we expect to take it. But at the same time, in reality, what ends up happening is that the shorter-term, or more of a micro, decision tends to be impacted by factors that come up. So for example, a spouse gets laid off and retirement for them happens sooner than expected, or the market’s going haywire, and we want to dial back on withdrawals that were taken from investment accounts, those sorts of things. So having the ability to be able to pivot is important, but having a broad, overall plan in general when you want to take it is obviously the most important.


Marc: Yeah, and to your point, they just don’t know your personal, complete situation, so they can give you some ideas on, I’m sure, the best overall… Well, I mean not the best overall, but just looking at some of the claiming options that you have available to you, but how that’s going to play with everything else, they’re going to not have any clue to that, because they don’t know your financial situation. Now that’s the first one. Myth number two, John, you want to tackle this one? You won’t get any social security if you’re a stay at home mom. That’s not exactly right either.


John: Yeah. I’ll jump on this one, and then also I want to go back to myth number one. One thing I have also noticed, that people need to be wary of, is calling Social Security and getting wrong information. I’ve actually had multiple calls with clients and the representative didn’t necessarily know exactly, maybe what was being asked and they basically gave the client bad information, where we had to call up together and ask. And it really affected the client’s strategy that they were going to use, because at first they were kind of like, “Well, this is what Social Security told me.”. And we did our due diligence, realized like, “Hey. No, that’s not accurate.”. So we called up once, continued to got bad information, then we had to call back again. There’s actually specialists that we were able to talk to, that basically gave us the right information, which in her case ended up being quite a bit of money that she ended up gaining, by able to do some widow benefits where…


Marc: Oh yeah. That’s good to know.


John: Otherwise, she wouldn’t have known. So yeah, I just wanted to add that in, because I’ve seen it happen a couple of times.


Marc: No, absolutely. Yeah.


John: And as far as not being eligible as a stay-at-home spouse, basically that is a myth. There are spousal benefits and if you qualify for those, you’re eligible to get half of the other spouse’s full retirement benefit. There’s different strategies that one can implement in that situation, but you are eligible for some spousal benefits, even if you were not working and have earned credits into Social Security.


Marc: Yeah, and so I think some of the confusion, and a lot of times how these myths is usually it’s kind of close, but maybe a little off. So if you’re talking about your own individual benefit, you have to work, what is it, 40 quarters I think, through your lifetime, which is 10 years total, in order to qualify. But, to your point, if you’re married, and I think there’s a caveat there too, is it not that you have to be married at least 10 years. Is that what it is to get the spousal?


Nick: Correct. Married 10 years is the case.


Marc: Yeah, so there’s a couple little caveats, but I think that’s how myths get started and get skewed out of proportion. So yeah, if you’re married and you’ve been a stay-at-home mom raising the kids the whole time, you are still eligible for your spouses. So it’s certainly good information to know there as well. All right. Myth number three, you won’t pay taxes on social security, since you already paid taxes on that money when you paid it into the system. Once upon a time, that was true, but it’s no longer true, right?


Nick: Oh yeah. If you want to get somebody fired up, this is the way to do it. Yeah. So what we try to explain to people, is that for most people, most households, kind of middle class and up, about 85% of their social security income is going to be includable in their taxable income. So there’s a chart and it is dependent upon the other income sources that are coming into the household. But, like I said, for the most part, most people are going to have their income, up to 85% of their social security income, includable in the amount of taxable income that they have. So it is important for people to understand that there’s a difference between that, “Hey, it’s taxed at X amount rate.”, or something like that, because there is confusion in there. So that 85% of the number just is tax at whatever effective tax rate they’re in. So for most people, they’re going to fall into the 10 to 12, 13% effective rate. So it’s not a huge overall impact, but because it is considered a payroll tax that funds it, there is a little bit of firing up that happens when, from an emotional standpoint, where the thought process is, “Well, hey, I paid taxes into it.”


Marc: Yeah.


Nick: Yeah.


Marc: I mean it is… I was going to say, just didn’t mean to cut you off, but I think where people also don’t realize this is a good place where strategy comes into play, because how you’re pulling your income, it’s your income levels that’s going to determine how much that this could get hit. So again, social security should be part of an overall strategy and not just, “Oh, I’m pulling money out of X, Y, and Z account and then also I have this social security thing.”. You want them all working together, right?


Nick: Yeah, and the reality is, and people don’t necessarily want to always hear it this way, but the reality is, is that social security payments through your payroll, while you’re working are essentially, I try to tell people, essentially you’re paying into a pension, is kind of what you’re doing.


Marc: Sure.


Nick: So you’re kind of paying it into a pension, so it is done via payroll tax, but in reality that’s kind of what’s happening.


Marc: Yeah. John, anything you want to add on that one?


John: Well, I guess the one thing would be, as you mentioned, strategy. If you find yourself in a position where your social security is going to be taxed, maybe you have to take extra income in a given year, Roth IRA would be a great spot for it, because that does not count towards your modified, adjusted gross income in this case for the calculation.


Marc: So, maybe looking at ways to lower your taxable income limit, so just to help with that strategy?


John: Yeah, yeah. And that’s why it’s important. And if you tune into this podcast, often you hear Nick and I always say, you want to put yourself in a position to adapt to any situation and have balance, so that’s where that’s important, where it’s like, “Hey, I have to take some money out this year. Health, whatever, house.”. As we were chatting offline of house issues and contractors. Roth could be a good spot to take from, where it doesn’t affect your income.


Marc: Okay.


John: To get off-topic, same thing goes with Medicare. As you have too much income, your Medicare premiums might go up, so planning is very important.


Marc: Exactly. Strategy is completely important in how it might affect that particular myth. All right. Let’s do the last two. Here are some of the big ones, and these are the ones that get people most concerned or whatever. Myth number four, there won’t be any social security left by the time you get to retirement. I just don’t feel like this is probably going to… I can’t see any politician standing up there and doing it. It’s too much of a hot potato. They’re going to continue to kick the can down the road, and I think there’s going to be something, in some form or fashion. Could changes be coming? Sure, but the whole concept of it’s just going to go away, just seems like a lot of fluff to me.


John: Yeah, I would agree with that. Changes are already happening. We already see the cap limit for income going towards social security. That’s been increasing. So there are some updates that we see happening, and this is really an actuarial problem, so it’s a matter of just being like, “Okay, this is what we need to do to fix it and it will be fixed.”. What most people… What’s interesting, is I just got a question last week on this from a client, because they read an article about the trust fund will be exhausted between 2032 or 2034, if no changes happen. So their concern was, “Hey, is the money going to be there?”. And the answer is, your benefits will still be coming in, because it’s funded through your payroll, so there’ll be people paying that system, while people are drawing out.


Marc: Right. And we do have a problem there. That is a concern, right? If you look at those numbers, there’s way less people paying in now than people pulling out, which is why some other changes may need to come into play. But yeah, I think that’s where the confusion comes in too.


John: Yeah, exactly. And I believe a couple.. And you can look this up, if nothing changes, there will be roughly a 20 to 24% reduction in benefits, if they don’t change anything. But we feel confident that they’ll make some adjustments to the program-


Marc: Last minute, yeah.


John: … to get everyone whole. But again, it comes back to planning correctly. So, are you positioned yourself to adapt to this, if this were to happen? If social security benefits were to get cut, how does that affect your plan and what are you going to do?


Marc: Yeah. You hear all sorts of strategies out there, Nick, right? I’ve heard the one that if they just eliminate the early, at 62, and even moved it to 64 or just said, “No, we’re just dropping the early and you’re 66 or 67, depending on your full retirement age.”, it could fund it for another hundred years. Then they’re talking about means testing. So there’s a lot of things on the table, they just haven’t pulled the trigger on any way to actually replenish it yet.


Nick: Yeah, it’s pretty frustrating, because like John said, there is kind of a science to calculating this when you’re talking about this many people, from an actuarial standpoint. Literally from, like you had mentioned, increasing the initial, early retirement age from 62 or even starting to phase it in, like they have in the past as far as what they consider full retirement age, starting to move that towards an average of 65 would make a huge difference. Adjusting the cap, as far as the maximum amount of income that you pay into social security on, if they adjusted that up. So it’s frustrating, because like so many other things, and without going on a rant, it tends to be quite political. And unfortunately what tends to happen is instead of it being the small adjustments, that can make a huge difference, what tends to be in the news is more of like, yes or no. Will it be there or will it not? Versus like, “Hey, we can start to just adjust these numbers and make these… People are living longer, so we can figure this out.”.


Marc: Well, the doom and gloom makes a better headline too.


Nick: Yeah, for sure.


Marc: I mean, look at what’s been happening in France for the last month. They’re totally upset over pushing their pension there, which is basically the same thing that we have, back two years. There’s options there, it’s just a matter of what’s going to be acceptable. And I think for many of us, if you’re probably 50 or over, the chances of it affecting you greatly are probably diminished. I can certainly see though, changes to the ages or things like that affecting people. They say, “Okay, born from this date down, for sure you’re going to see some changes.”. So possibility, but just the quote on quote, “Well, it’s empty. It’s gone. No one gets a check ever.”, I think is just kind of silly.


Nick: Yeah.


Marc: All right. Final one guys and this kind of rolls into that prior one, as well. Number five is go ahead and claim it as soon as possible, turn it on as soon as you possibly can. And I think, again, whoever wants to answer this first, but if you need the money, that’s one thing, right? Turning it on, because the strategy makes sense, because you need the money, but turning it on, because you think it’s going to run out is maybe not the best way to look at that.


Nick: Yeah, we tend to agree. Taking it when you’re first eligible is very rarely a best bet. You give up significant benefits by taking it when you’re first eligible at age 62. And it kind of dovetails a little bit into what we had talked about, just on the previous question, where people that were at the point in time where their full retirement age was 65, so 62 is only three years before that period of time, the reduction, which is about a half a percent per month before your full retirement age, it didn’t have as big of an impact. But now with full retirement age, for many people, being 66 and a half to 67, now we’re talking a wider gap of years, four and a half to five years. So that the compounding effect of that early benefit is significant. So it has a really big impact for people that take it really early, when they don’t necessarily have to. And I get more regretful responses from people that took it early, not understanding the full situation, than I do from people that waited and had more of a strategy for when to take it.


Marc: Yeah. Any thoughts on that take it as soon as possible, John?


John: Yeah. I think it comes back to, like we said, what is the person’s situation? I really see situations where if someone doesn’t need it, taking it early makes sense. The only time is if there’s significant health issue or something like that. But then you also have to think about survivor planning. So there’s a lot of variables that you got to think about and does it make sense?


Nick: And just to dovetail off of that, John mentioned the survivor planning, where sometimes, as an example, one person in a couple taking it earlier and using that to leverage the other person waiting much longer, that combination can work out sometimes, work out-


Marc: Yeah, a couple’s strategy.


Nick: … really, really well. Yeah, yeah, so factoring in both strategies, letting one ramp up and using the other one to make it easier on the overall nest egg, sometimes that can make sense, but this is always something that we use. We have different calculators to strategize for social security and that sort of thing, and so we try to be as strategic as possible.


Marc: And John, I think you’re referring to the break point, so you’re talking about when you’re turning it on, you can run some calculations and see what that break even point would be if you turn it on early versus waiting. Obviously health plays a factor, but you guys can kind of stress test those numbers as well to see the best chance or the best option.


John: Yeah, so we have different programs, which is great, where one, we just look at social security in a vacuum and basically it’s, “Hey, let’s look at taking now versus 67.”, if that’s the person’s retirement age, and we can go look at their break even, which typically is mid-seventies in that scenario. Then we have our comprehensive planning tool, which takes into account other factors of, “Well, if you take it early, your investments can build up a little bit longer. What if you take it early and save it, so you can really put in different factors on it.”. But one thing people really think about if they take it early, and we’ve seen this lately, is the cost of living adjustments. So those in the last few years have been pretty significant. So when you take it early, you’re still going to get those cost of living adjustments, but they would’ve been much greater had you waited, because the balance is bigger that you’ll be getting monthly.


Marc: Gotcha. Okay. So again, there’s a lot to the social security strategies, the conversation. These were some of the bigger ones. We’re going to do a second part, with five more myths in a couple of weeks here. So make sure you tune in and check that out. But as always, if you’ve got questions, if you need some help, especially when it comes to claiming strategies and maybe running a maximization strategy to see what the best option’s going to be, don’t just run out and do something. And also don’t treat it as a separate entity from everything else that you’ve set aside for retirement. It really is about them all working together in a cohesive plan. And that’s what John and Nick and the team can help you out with. So if you need some help and you’re not already working with them, jump onto the calendar at for a consultation and a conversation. That’s P-F-G private Get yourself some time onto the calendar, subscribe to the podcast. You can do so while you’re there as well, so there’s a little dropdown tab for podcast. We’re on Apple, Google, Spotify, all that good stuff. So again, P-F-G private is where you can find them online. And we always appreciate your time here on Retirement Planning-Redefined. For John and Nick, I’m your host, Mark, and we’ll see you next time for more social security myths.

Ep 58: Fore Your Retirement: What Golf Teaches Us About Financial Planning

On This Episode

Are you a golfer? Even if you’re not, the game of golf can teach us valuable lessons about retirement planning. For example, hitting a hole-in-one might be thrilling, but it won’t necessarily guarantee your overall success. And just like you need different clubs in your golf bag to play a round, you need a well-balanced approach to your investments in retirement. But perhaps the most important lesson from golf is the value of having a caddy. In retirement planning, a financial advisor can help you navigate the hazards and make the most of your financial “clubs.” Tune in to this episode to learn more about how the game of golf can help you plan for a successful retirement.

Subscribe On Your Favorite App

More Episodes

Check out all the episodes by clicking here.



PFG Private Wealth Management, LLC is an SEC Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents.

Here is a transcript of today’s episode:


Marc: Back in for another edition of the podcast. Thanks for hanging out with John and Nick here with me. Talk investing finance and retirement here on Retirement Planning – Redefined. We’re going to have a little fun with this podcast conversation, a little golf lesson and tie-in to financial planning or retirement planning. So this will be fun. It’s right up your guys’ alley. John, just a few weeks back, you guys had your annual golf tournament, and we had talked on the prior podcast, it went really well. I should have had this ready for you. We could have talked about it then, but that’s okay.


John: Yeah, yeah. It’s all right. If you want to ask questions about it, I can definitely tell you. It was a great event and we donated to Boys and Girls Club of Tampa Bay and Tampa Hope, which provides homeless shelter stuff. So, yeah.


Marc: That’s awesome. Yeah.


John: Yeah.


Marc: All right, so are you a big golfer yourself?


John: No, I’d like to be when I can get back at it, but I’m not very good. It’s been on my to-do list to take some lessons and be able to get on the course, but I like-


Marc: Well, you don’t have to be good to like it. I think that’s most people.


John: Yeah, no, I like going on the cart and driving around and hanging out with my buddies.


Marc: There you go. Nick, what about you? Are you a golfer at all?


Nick: I wouldn’t call it golf, personally, I go out and I hack for-


Marc: Yeah, there you go.


Nick: … about seven or eight holes-


Marc: There you go.


Nick: … and then I’m pretty much done at that point.


Marc: You’re a hacker. Okay.


Nick: Yeah, maybe now that I’m in my forties it’ll be something that I reengage with, but I enjoy being out there when it’s the nicer time of year, the cooler time of year here. It’s fun to hang out with buddies and go and be out, but it tends to be a four to five hour chunk. So it just depends on my mood, I guess.


Marc: Yeah, it certainly can be fun. It can be a frustrating sport, but it’s easy to do, and of course it’s obviously a very popular sport for retirees and pre-retirees, so it’s easy to do some financial analogies with it. Since you guys just had that golf tournament and raised some money, which, again, is fantastic. This’ll be a little fun podcast conversation. So let’s jump in and talk about some lessons we can get from the game of golf financially speaking, and we’ll just have a little fun with this. So hitting a hole in one. I’ve actually seen this done live in person. I was playing with some friends a couple years back and we were playing with…. we got put with an older couple and she won the day, she was killing us. She was right down the fairway every time. We were all left and right around the sun. She was awesome, but her husband, on a par three, popped one up and lo and behold dropped it right in the hole. It was just totally awesome to see that happen. Thinking about this guys, I think about getting lucky in the market one time. Because this guy’s attitude changed when he got the hole in one. He was super excited. He obviously was very cool, but you could see the rest of the day he felt pretty cocky about his game. I would imagine that from a market standpoint, that could be the same thing. You do really well on one investment in the market and you think, oh, I got this whole financial thing figured out, and it might not be that easy.


Nick: Yeah. It can be interesting. Just in general, and you alluded to it, people like to talk about their wins more than their losses. That’s something that we see quite a bit. It’s a similar concept as when you have a friend that goes to Vegas and they talk about how they hit on a certain thing, but not necessarily that they came back less money than they started. It’s that concept. The goal when we’re focusing on financial planning, retirement planning, that sort of thing, is a long, well-thought-out strategy that encompasses multiple decisions, builds in options for different scenarios and really is just more strategic than having a single goal in trying to necessarily get lucky.


Marc: Well, and John, I was going to say, I think most golfers would agree that a hole in one is a little bit of skill, but a whole lot of luck. Maybe that’s the same thing to be said for the market, but you can strategize properly with your retirement and not just be wishing for luck, I suppose, in retirement, right?


John: Yeah, yeah, you definitely want to have a strategy and a plan versus just rolling it all in one event, unlikely event really happening. So you want to make sure that you put together the strategy, and again, you’re just trying to hit, bring it to baseball, those singles and doubles consistently, versus always trying to go for the home run.


Marc: Well, like I was saying, the gentleman’s wife, at the end of the day, he got cocky because of that fairly early, and he clearly was going to beat the two younger guys that he was playing with that day, me being one of them. I think he felt like the day was his because of the hole in one. But she wound up winning the day from having and shooting the best round because she was consistent. To your point with baseball there, she was right down the fairway, 150 yards every time. She ended up just kicking our tush because, like I said, we were all over the map, somebody else’s hole and everything else from slicing and all sorts of good stuff. So consistency, while a hole in one is sexy, consistency is probably the better idea for a strategy. So let’s talk about clubs in the golf bag. This is a fun analogy to think about too. You’re probably not going to go play golf and go Happy Gilmore and just show up with a driver and a putter. You need some more things in there.


John: 100%. This goes with your investments. You can’t just have just one tool in the bag there. You definitely need to have different investment vehicles doing different things so you really hit your goals. In case with golf, you make sure you get the best score possible. Same thing with your retirement planning and investments. You want to have different investments. Here’s the term everyone hears, diversify. You want to have different investments in your portfolio, investment portfolio, and different investments overall, whether that be some fixed income stuff, and then especially nowadays with the rates being the way they are, CDs are definitely a great option right now. So you want to have the different irons, different drivers, different-


Nick: Yeah. One thing that people tend to obsess about is, “What’s best, what’s best, what’s best? Should I have this or should I have that?” So frequently our answer is, “Well, it depends,” and or, “Yes, all of the above,” and it dovetails into this where, “Sure, you do want to have some funds that are going to be pre-tax and also some funds that’ll be tax-free later on,” and really focusing on the fact that just because something is better right now doesn’t mean it’s going to be better later. So the ability to be able to adapt and pivot and adjust to whatever the scenario is, is super important.


Marc: Yeah, and that’s the point of, “It depends,” sometimes with that answer because while it’s not the flashiest of answers, because it’s not a set it and forget it. Your strategy is going to change. Just like the club you’re going to have to pull out of the bag may change. You may think it looks like a simple 7 iron shot, but as you start to look at it and evaluate a little bit more, you might realize that it’s not, you got to go with a different club. So different clubs do different things, different investments do different things. Having that arsenal, I suppose, at your disposal is really what you want to do, versus, again, like I said, just trying to be Happy Gilmore out there and use a driver and a putter only. Probably not going to go the way you want to go. That comes to the final one here for this little fun analogy, guys, is listening to a caddy. Now, granted, when a lot of us go play golf, we don’t have the luxury of having a caddy, but you may have some friends who you’re doing a foursome or whatever and they’re giving you some advice or things of that nature. And while you don’t want to ask your friends necessarily for financial advice, if you ever have got the chance to play with an actual caddy, it’s pretty freaking cool. A true professional can really make the difference. I’d say that’s an easy analogy to what you guys do.


John: Yeah, 100%. I will say having an advisor in your corner, just someone to talk to, ends up having… people end up making better decisions with that. Just go back to the most recent thing, COVID here, where I would say the first month of that was really calming people down and talking them off a ledge. I’ll tell you how many times we heard, “Oh, I’m so glad we got the chance to talk because I was getting really nervous and thank you for your time.” So just having that resource of someone to bounce some ideas off of or just talk things through, ends up in the long run helping someone out financially more than they realize.


Marc: Yeah, definitely. Again, it’s the little things. It’s not always just the Xs and Os, sometimes it is having that sounding board, “Hey, I’m thinking about this idea. What do you think?” “Okay, this is a good idea because X, Y, Z,” or, “This is maybe not a good idea because X, Y, Z.” So it’s certainly important to have those conversations and if you need some help, reach out to the team. Obviously, as always, they’re here to help you with this, to help you get to and through retirement. is where you can find them online., and drop us a line while you’re there, send an email in to the website if you’d like to have your questions answered. Of course, they’re going to certainly do that with each and every question, but we also take those from time to time here on the podcast. So yeah, let’s wrap up with one or two here guys. We’ll see how we can go, see how many we can get through. We got Claire, and she says, “I’m supposed to retire next month, guys, but I haven’t really done any planning at all.” Yikes. “I just realized that I still need to figure out Social Security options, pension options, Medicare options, and as well as what I’m just going to do with my time.” Wow. “Should I push my retirement date back until I figure this out?” Guys, that’s a interesting one and a tough one. Not trying to pick on her, but she’s done zero planning and thinking about retiring in a month.


Nick: Yeah, probably not a good idea. There’s two ways to address this. Well, what we would say to somebody in this situation is, “Okay, yeah, you need to focus ASAP on putting together a plan,” because usually when this happens, it’s because of anxiety of what the answer is going to be. It’s the concern that whatever the results are of the plan are going to say, “Hey, retiring is not a good idea,” or that the plan doesn’t look good or that sort of thing. So taking the action to do something is really, really important, and you can’t rewind time. So getting that plan in place. Would recommend holding off on the retirement until you can put the plan in place. Just there’s probably options in strategies that they’re not familiar with that can be put in gear sooner than later and could help to make that retirement more successful, because people’s ability to reenter the workplace after they have exited is often much more difficult than they realize.


Marc: Yeah, John, I’d say probably just call somebody, right? Get started. Don’t wait one more minute, right?


John: Yeah. Mistakes can be costly and it sounds like Claire has a lot of important decisions to make, especially with the Social Security and the pension there, one wrong move on that, you could be losing thousands of dollars, basically, is what I’m getting at.


Marc: Yeah, yeah. Yeah, so you got to get a strategy, Claire. Do you need to push off retirement? You’re just not going to know until you figure the two… Her question is, “Should I figure this stuff out?” Yeah, get in, sit down with a professional and find out where you stand and they’ll be able to help you determine is retirement next month even possible? I guess my question would be, how do you know that you could retire next month? She says, “I’m supposed to.” Maybe they’re going to retire her from the job. Maybe she’s been told. I don’t know. It could be one of those types of things, but either way I would get in to see a qualified professional, ASAP, and of course John and Nick are here to help. So 813-286-7776. All right, final question here. We’ll do one more. Lee says, “Guys, I don’t understand the Social Security spousal benefit. My wife worked for about five years before we had kids and hasn’t worked since, but she does have some benefit of her own. What is she entitled to? How does it work?”


Nick: This is a good question, and the reason that we wanted to review this with people is because sometimes the tricky part with dealing with planning, retirement planning, is the jargon or the terms that people use. Sometimes they mix up the terminology and that can lead to mistakes, which can lead to big problems. In this case, from a spousal benefit standpoint, in general, people are eligible either for a benefit of their own based upon their own work history, and that is only valid if they have 40 quarters of work. So 10 years of work. Now, if they are married, and there are some additional scenarios, if they were previously married but married for at least 10 years and are divorced, there are some options on spousal benefits at that point. There’s so many different scenarios that if somebody’s situation is complicated, we highly recommend that you reach out to an advisor that’s familiar with this space. But in this specific example, the spouse working for five years is not going to be eligible for her own benefit. She is going to be eligible for a spousal benefit, and that spousal benefit is a calculation factored on the primary earner’s income and how long they’ve paid into the benefit and that sort of thing. So this is something that we would tell, “Hey, we can help with this scenario. The main information we’re going to need is going to be the Social Security statements, and then we have some software that helps us pick, show what those numbers look like. But the spousal benefit is going to be a factor of the primary income earner’s benefit amount.”


Marc: Okay. Yeah, so definitely can get very complicated. Thanks for sending the question in. Hopefully that helps you out, but definitely have a conversation with a qualified financial professional. Reach out to John and Nick to talk more about Social Security and eligibility and all those good things and how it plays into it. 813-286-7776 is the number to call, or stop by the website, That’s Don’t forget to subscribe to the podcast on Apple, Google, Spotify, all that good stuff. As always, we appreciate your time. You can catch past episodes by subscribing or check out future episodes when they come out. Thanks for your time today, for John and Nick. I’m your co-host, Mark Kelly, and we’ll see you next time here on Retirement Planning – Redefined.

Ep 57: Retirement Expenses For Which You Forgot To Plan

On This Episode

Are you preparing for retirement but feeling confident that you have covered all the expenses? Well, think again… It turns out that many retirees overlook some crucial expenses that can leave them financially vulnerable. In this episode, we explore the retirement expenses that most people tend to forget, including skyrocketing medical bills, unexpected travel costs, taxes, and much more. We’ll discuss practical tips and strategies to help you plan for these expenses and ensure a secure and comfortable retirement.

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PFG Private Wealth Management, LLC is an SEC Registered Investment Advisor. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. The topics and information discussed during this podcast are not intended to provide tax or legal advice. Investments involve risk, and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor and/or tax professional before implementing any strategy discussed on this podcast. Past performance is not indicative of future performance. Insurance products and services are offered and sold through individually licensed and appointed insurance agents.

Here is a transcript of today’s episode:


Marc: Hey everybody, welcome into the podcast. Thanks for hanging out with John, Nick and myself here on Retirement Planning Redefined as we talk, investing, finance and retirement with the guys from PFG Private Wealth. And this week we’re going to get into retirement expenses for which you might have forgotten to plan for, which certainly happens. So on this episode, we’re going to discuss some practical tips and strategies to help you plan for these expenses and maybe secure a more comfortable retirement. Guys, what’s going on Nick? How are you buddy?


Nick: Pretty good, pretty good. I got some friends coming into town next week and then family trickling in over the next month, so it’s going to be a hectic month.


Marc: Yeah, that’s not bad though.


Nick: That time of year.


Marc: There you go. And spring is upon us, so that’s always good. We’re into March, so that’s a good deal there. John, what’s happening buddy? How are you feeling?


John: I’m feeling okay. Getting there. Getting a little stronger each week so excited about that.


Marc: There you go.


John: But feeling pretty good. We just wrapped up our golf tournament, nonprofit charity golf tournament.


Marc: Oh, fantastic. Yeah.


John: And looking really good. It was a great time. Nick was out there helping me out because I couldn’t lift anything heavy, but it was a great turnout. And it’s year three and looking forward to year four. So.


Marc: That’s awesome. Yeah, fantastic. Always good to hear those success stories. So let’s share some things this week. Let’s get into the podcast here a little bit and talk about some expenses that we might encounter in retirement. And maybe we planned for them, maybe we haven’t. Hopefully we have. But let’s start with a big one obviously, medical expenses. I mean, typically they outpace normal inflation a lot of times. It seems like medical’s just constantly on the rise. So how do we address some of this stuff?


Nick: Yeah, what’s actually been probably at least most recently with a bunch of our clients, the dental expenses have been pretty wild. I know my parents have kind of run into this too. It seems like once you get into your sixties almost everybody has some sort of major dental work and it’s almost impossible to get out of there for less than 10 grand. So it’s interesting too because without going on a massive tangent, dental practices and offices seem to have really gotten down the financing aspect of things. And really they tend to run the businesses pretty tight and costs have gone up pretty substantially.


So yeah, those dental expenses can be a big deal. We tend to make sure that we have a fair amount of money budgeted each year for healthcare related expenses for clients and making sure that we’re allocating the right amount for insurance premiums in that sort of thing. But yeah, those numbers really do add up over time.


Marc: Yeah. They can get pretty staggering. I think it’s what is the average person what, $250,000, something like that in retirement and medical expenses. So I certainly can take off there for sure.


John, what about unexpected travel? Obviously that’s one that when we think about travel as part of our retirement strategy, but where would we find unexpected travel in that situation where it kind of creeps upon us and costs us more than we realize?


John: Yeah, so one thing we’ll always say is things are always going to come up, you can plan as best you can, but something’s always going to come up whenever life happens. So we’ve seen a lot of times where it could be funerals, long distance where people are having to go places they weren’t expecting to go, obviously. And just hotels stay, travel, whether they’re for a week or two, seeing some of that. Or caring for family members that don’t live in the state. So it’s traveling other sides of the country. We’ve seen that quite a bit.


Marc: I’d say, that’s probably a pretty big one, especially for as your retirees, you might have to go take care of a sibling or something who’s having a long-term care event, extended stay. I think my sister had to do that a while back as well. So that’s a great point.


John: And then there’s always the, which I think we’ve all experienced the destination wedding invite where it’s like, oh man, do I really want go to this place? And it’s just like, okay, all right, let’s start adding up the cost. And if it’s a family member, you typically feel obligated to go.


Marc: Yeah, so that’s good point.


John: Those are some of the top three we’ve seen in our practice.


Marc: Do I really want to go to Cabo? Yes. Do I really want to go for my niece’s wedding? No.


John: Sounds about right.


Marc: Yeah. or something like that. Right. So definitely some places where expenses can come up. The medical obviously certainly can get really costly, but then again, so can parental or child assistance. I mean, Nick, more people now are than ever are in the sandwich generation where they’re taking care of maybe an adult child to some degree, helping out and they’re also taking care of their own parent. That’s one thing I’ve heard about.


Nick: Oh yeah, yeah, so the child’s assistance thing, we saw it quite a bit like back in the years, immediately following the great recession, was kind of the first time I had seen that quite a bit where kids were getting out of school, graduating from college and having a hard time finding a job. So back to the parents and some help and that sort of thing.



And then we got that again in the COVID too.


Nick: Yeah, exactly. That’s what I was going to say. From the standpoint of when COVID hit, that was something that impacted quite a bit. The job market’s still pretty good for a lot of fields, but have definitely seen that. And I would say a lot of our clients are also entering into that period of time where there’s more assistance needed for parents. My grandmother’s been living with my parents for, I want to say over 10 years now, but she just turned 90 and now it’s becoming even tougher. And we hear about that quite a bit from clients. And then if their parents are out of town, that’s some that have brought them into town or they travel fairly regularly to go see them. Yeah, it’s a lot on the plate.


Marc: And that’s an expense that can really derail your retirement. I imagine thinking using your parents there as an example, if they weren’t prepared for 10 years of taking care of grandma, I mean that’s an added expense that you just weren’t planning for.


Nick: Yeah, there’s the financial aspect and then even from the standpoint of we are focusing for this on the financial side of things, but even from a lifestyle and mental health standpoint or even just your ability to be able to do the things that you planned and wanted to do, whether it’s travel, that sort of stuff. It can be difficult, for sure.


Marc: Sure. Yeah, definitely affects the family dynamic along with personal relationship and everything because it’s a full-time gig. It can be, for sure.


Nick: Oh yeah.


Marc: So a lot of times we are focusing on the expenses here, but that’s a good point to bring up as well. So planning and strategizing for those things that can maybe be overlooked or forgotten, certainly important. Taxes, John, is the next one. Now we got a plan for taxes, hopefully we’re doing that. But are we thinking about the possibility of a tax hike because it sure does seem imminent.


John: It does, doesn’t it? You figure with all the spending happening, at a certain point, taxes we’ll have to go up. But that is definitely one that I know we cover quite a bit in our planning is making sure clients are flexible and to adapt in an environment where if tax rates do go up, we really try to make sure people have the ability to adapt to the situation. But I will say this is often overlooked where it’s, oh, you’ll have less income. So your funnel, lower tax bracket is kind of what you normally hear, but it’s definitely something that you want to be able to adapt. So perfect example of this, having some tax free money into retirement where tax brackets go up, you can basically say, Hey, this next three or four, five years, I have at least some Roth IRA money I can pull from where it’s not going to really impact my lifestyle too much. But taxes go up 7%. That’s a big, big dip in your nest egg or your living, your lifestyle,


Marc: Especially if your income stays the same. So your income stays the same when your tax rates jumps from you said what, 7%? So let’s say we go from 25 to 32, that’s not so great, you’re not going to feel so good about that.


John: Yeah, and something else I’ll say we see quite a bit with this is where there’s big expenses in a given year. So we talk about, I know I think we’re probably going to touch on it later, but if there’s like a home remodel expense or whatever it might be, or we had the recent years with COVID, like, hey, I want to buy an RV or whatever it might be, it’s big purchases can also affect those where you might be pulling out 50, 60 grand extra in a given year and if all your money’s pre-taxed, that’s going to be a pretty big hit to you in that year.


Marc: And that’s a good point. So Nick, I know you’ve got a list of a few things to think about in that department from maintenance or repair. Now again, we could strategize for the RV, we could strategize for, and I think this is maybe the point people missed, you tell me if I’m wrong here Nick, but if you’re getting close to retirement and somewhere in retirement, you’re going to probably have to replace your roof, start planning for that so that it’s not an unexpected expense versus just going, oh well now we found out the roof is damaged and we need to repair it. That’s a little different. So I don’t know, what do you think?


Nick: Yeah, for sure. From a planning perspective, the way that we typical typically handle that is we have home maintenance and repair expenses on an annual basis and then we will oftentimes every X amount of years add in an extra bump so that we can show people how we model that out and try to factor that in and build that in. But yeah, absolutely. One of the things that I’ve seen too is I guess and this is definitely not for everybody, but there’s a fair amount of people that like to purchase vehicles cash and just not having the car payment. And that’s something that has been a transition for a bunch of clients where just kind of emphasize with them, they may keep a vehicle for 10 years and so when they do make that new purchase, if we’re taking money out of qualified retirement accounts to do that, you’ve got to take out X amount more and then that hits you from a tax perspective, where really stretching out the payment, taking advantage of lower rates that dealers often offer. Just even little things like that where you may tweak how you’ve spent the funds on certain expenses in the past to just take into consideration what your new reality is in retirement.


Marc: Yeah, definitely.


Nick: It’s important.


Marc: Yeah, if you strategize again, you won’t be caught off guard by some of these expenses that you didn’t plan for. But John, the last one, I mean we got caught off guard for sure on the last one. Many people don’t plan for inflation normally, even when it’s in a normal 2% or 3%, let alone what we’ve just been going through.


John: So yeah, the last couple of years have been interesting for inflation. In a normal environment, it’s obviously not this type of hike in a given year. I mean coming out of a pandemic and then obviously with the Fed raising rates the way they have been doing to try to combat some of that. So normally it’s pretty slow and then all of a sudden it’s like you go to the grocery store and it’s like, whoa, what just happened? I’m paying almost 20% higher for milk or whatever it might be. COVID definitely made things interesting with the supply chain, everything like that, which added to it, which we’re starting to see come down a little bit. But this is a big one that you definitely want to put into your financial plan and you want to stress test the plan saying, Hey, what if inflation does hit 2%, 3%? It’s something that we typically do as well. And if you’re working with somebody, you should do is different categories have different inflation rates. So one thing with medical is historically that has been higher than the normal inflation, which you said would serve around 2%. We normally inflate that about 4%. And if you’re planning to pay for, at this point, most people when they retire aren’t paying for kids’ education but might be paying for grandkids because that’s what they want to do. So you got to pay, that has a different inflation rate. So it’s cool to be able to adjust each category with a different inflation rate when you’re doing planning. So if that’s something you are working with an advisor, you want to ask that question, is the inflation rate you’re giving me kind of general over everything or are we actually putting different inflation rates on different categories?


Marc: That’s a great point.


Nick: And just to jump in here on this one too, obviously inflation has been in the news so much lately. One of the conversations that we’ve been having with people is that really from the standpoint of news, the inflation that they report on, what CPI is really such a specific bundle of goods. Anybody that’s been paying attention to expenses over the last five, six, seven years, they’ve been going up. And so just kind of reminding people that this is happening every year. We just get really mad about it every 15, 16, 17 years, over and over again, rinse, repeat. And so really making sure that they understand that. And also just to another take on the inflation side of things is when they’re looking out over the nest egg and the plan and they kind of look to see, all right, well, I’m going to have X amount of dollars in 20 years, or I’m targeting to try to have X amount of dollars in 20 years or at life expectancy and making sure that they understand, hey, is that in present value? Is that in future value? Because 20, 25 years down the road, that number can start to seem a little, if things are going well, like unwieldy or super optimistic when in reality it could be just when you use the right and when you look at it the right way it’s similar to where you’re at today and stuff like that. So just not having that false sense of security if it’s not warranted is always important. But yeah, inflation’s an important topic.


Marc: Yeah, I mean you got to plan for these expenses. Some things we can’t plan for, but many can, or at least we can try to somewhat strategize for things we think are going to happen because inflation’s always going to be there, tax rates are always going to be there. We don’t always know what they’re going to be, but then some of those other items we can certainly try to strategize for. And by not having the conversation, you’re certainly not doing yourself any favor. Let’s finish off with an email question, guys, whoever wants to take this one and we’ll wrap it up. Thomas wrote in and he says, “Look, we’re retiring in two years and plan to sell the house and move to the beach, and values are still pretty high in my neighborhood to sell the house, so I’m wondering if I should sell it now even though we’re not ready to move and just rent a couple years.” His overall question is, “It a bad idea to rent at this stage of life?”


John: Yeah, that’s a great question. This seems to be coming up quite a bit with what we’re kind of seeing happening in the housing market right now. I wouldn’t say it’s necessarily a bad idea to rent at this stage of life. I’d more look at it from what’s going on in the housing market, the economy. So that type of strategy right now could be a pretty big risk depending on what happens. Example, if you were to sell your house and anticipate buying in a couple of years. If house prices, again, who knows what’s going to happen, dramatically go up over that next two year period, you could be putting yourself in a really bad position financially depending on what happens. I talked to someone who actually did something like this during COVID where they said, Hey, house prices went up a little. It was right when the boom kind of started where they looked at it and said, house prices are going up. They’re really high. I think they’re going to go down like they did in ’08 and this gentleman sold and then two years later, I mean they kept going up.


Marc: Right.


John: So now basically he’s caught in a tough spot where he was renting for a couple of years and for him to get back into the same house he just sold, I mean he’s paying almost $200,000 more. That’s a big swing. So I don’t know if it’s worth a risk, let’s put it that way, to do that type of strategy because none of us have that crystal ball.


Marc: Yeah, it’s an interesting proposition. A friend of mine did exactly this, Thomas. So he sold his house at the peak actually about eight months ago. I guess maybe that was the peak in this area or that area. But yeah, he decided he was going to get an RV and just drive around camping for a while and he is waiting for the housing price to come down before he goes and gets another place. So he banked on that strategy. He feels like he made the right decision. He’s enjoying the RV time. But every scenario is going to be a bit different with this, to John’s point. So I think it’s always worthwhile to kind of crunch some numbers, run some numbers, get a strategy put together and just stress test some things. Not only just that question from the email this week, but just a general topic that we talked about this week. Have a conversation with a financial professional like the guys at PFG Private Wealth. Get onto their calendar, have a chit chat with them. Stop by the website, check it out at That’s to talk with John and Nick and the whole team at PFG Private Wealth. And don’t forget to subscribe to us on Apple, Google, Spotify, whatever platform you like to use. We appreciate your time, as always. Thanks for hanging out with us. For John and Nick, I’m your co-host, Mark. We’ll catch you next time here on Retirement Planning Redefined.