WEBVTT 00:00:00.000 --> 00:00:02.620 Welcome back to Empowering Your Finance. This 00:00:02.620 --> 00:00:05.000 is our deep dive into retirement planning education. 00:00:05.320 --> 00:00:09.660 And today, well, we're zeroing in on understanding 00:00:09.660 --> 00:00:12.259 your retirement options. That's right. It's such 00:00:12.259 --> 00:00:14.880 a critical topic for everyone, really. It absolutely 00:00:14.880 --> 00:00:17.719 is. And planning for retirement, it can feel 00:00:17.719 --> 00:00:20.339 a bit daunting, maybe even overwhelming sometimes. 00:00:20.519 --> 00:00:22.859 Oh, definitely. There seem to be so many choices, 00:00:23.120 --> 00:00:26.460 so many factors. Exactly. So our goal today is 00:00:26.460 --> 00:00:29.660 to kind of cut to that complexity. We want to 00:00:29.660 --> 00:00:32.359 simplify things, clarify those basic choices 00:00:32.359 --> 00:00:34.240 you're likely to face. We'll be using materials 00:00:34.240 --> 00:00:36.479 from Retirement Planning Education Empowering 00:00:36.479 --> 00:00:39.119 Your Finance as our guide. Yes, drawing on their 00:00:39.119 --> 00:00:42.060 insights. And our mission, it's pretty straightforward. 00:00:42.159 --> 00:00:44.299 Just give you a clear handle on the main retirement 00:00:44.299 --> 00:00:46.759 options and the key things to think about as 00:00:46.759 --> 00:00:48.920 you plan your own future. It really boils down 00:00:48.920 --> 00:00:51.659 to making this whole process feel more manageable. 00:00:51.960 --> 00:00:54.539 Taking the key takeaways from these, empowering 00:00:54.539 --> 00:00:56.880 your finance resources, and presenting them clearly. 00:00:57.049 --> 00:00:59.590 OK, so let's jump in. The empowering your finance 00:00:59.590 --> 00:01:01.929 info starts with the basics. What actually is 00:01:01.929 --> 00:01:03.649 retirement planning education? What does that 00:01:03.649 --> 00:01:05.709 mean? Well, fundamentally, retirement planning 00:01:05.709 --> 00:01:08.510 is about figuring out how much income you'll 00:01:08.510 --> 00:01:12.530 need when you stop working full time. OK. Setting 00:01:12.530 --> 00:01:14.489 those goals. Setting the goals, yes. And then 00:01:14.489 --> 00:01:16.450 mapping out the steps to actually reach them. 00:01:16.769 --> 00:01:21.329 It involves a few key things. Like what? First, 00:01:21.489 --> 00:01:23.409 you need to identify where your income might 00:01:23.409 --> 00:01:25.609 come from in retirement. your income sources. 00:01:25.629 --> 00:01:28.310 Makes sense. Then you really need a realistic 00:01:28.310 --> 00:01:30.790 estimate of your expenses. What will you actually 00:01:30.790 --> 00:01:33.189 be spending? Right. That's crucial. And of course, 00:01:33.269 --> 00:01:37.430 it means saving consistently now and also managing 00:01:37.430 --> 00:01:40.290 your assets and any risks effectively over the 00:01:40.290 --> 00:01:42.969 long haul. So it's definitely more involved than 00:01:42.969 --> 00:01:45.290 just, say, putting some money in a savings account. 00:01:45.730 --> 00:01:48.170 It's about understanding that whole future financial 00:01:48.170 --> 00:01:50.950 picture. It really is. And empowering your finance 00:01:50.950 --> 00:01:53.739 makes a strong point here. Having that solid 00:01:53.739 --> 00:01:56.560 base of financial knowledge that education. It's 00:01:56.560 --> 00:01:58.219 pretty much the foundation for a comfortable 00:01:58.219 --> 00:02:00.719 retirement without it You're kind of flying blind 00:02:00.719 --> 00:02:04.180 in a way. Yes It's much harder to navigate all 00:02:04.180 --> 00:02:06.319 the options and make choices that are truly right 00:02:06.319 --> 00:02:08.199 for you. If you don't understand the fundamentals 00:02:08.199 --> 00:02:10.479 It's about giving yourself the knowledge you 00:02:10.479 --> 00:02:12.699 need. Okay, so let's talk about that transition 00:02:12.699 --> 00:02:15.479 moving from working life into retirement I think 00:02:15.479 --> 00:02:18.020 a lot of us we have this sort of ideal vision, 00:02:18.020 --> 00:02:22.110 right? freedom travel Hobbies sure that's the 00:02:22.110 --> 00:02:24.949 dream for many but the practical side is how 00:02:24.949 --> 00:02:27.330 do you actually fund that dream? How do you make 00:02:27.330 --> 00:02:29.889 it happen financially? Yeah, that's the million 00:02:29.889 --> 00:02:31.949 dollar question sometimes literally and that's 00:02:31.949 --> 00:02:33.909 where the planning part is so vital It's not 00:02:33.909 --> 00:02:36.710 just one moment of stopping work It's really 00:02:36.710 --> 00:02:39.069 a whole series of decisions leading up to it 00:02:39.069 --> 00:02:41.430 and afterwards to and empowering your finance 00:02:41.430 --> 00:02:44.849 asks this really direct question Can you afford 00:02:44.849 --> 00:02:48.150 to retire? Mm -hmm that question forces you to 00:02:48.150 --> 00:02:51.379 think about related things to like Is retiring 00:02:51.379 --> 00:02:54.860 early even feasible? Or maybe you need or want 00:02:54.860 --> 00:02:57.280 to keep working in some way. It really forces 00:02:57.280 --> 00:03:00.199 you to get realistic. Absolutely. And the very 00:03:00.199 --> 00:03:02.740 first step in answering that big question, according 00:03:02.740 --> 00:03:05.659 to these resources, is taking a really hard look 00:03:05.659 --> 00:03:08.280 at your expected income sources for retirement. 00:03:08.539 --> 00:03:10.340 And matching that against your estimated needs, 00:03:10.580 --> 00:03:13.080 right? Exactly. Getting that clear view of your 00:03:13.080 --> 00:03:15.400 future financial situation. So maybe we should 00:03:15.400 --> 00:03:18.000 start digging into those potential income streams. 00:03:18.139 --> 00:03:21.419 Good idea. Where should we begin? Well, a major 00:03:21.419 --> 00:03:24.719 one for most retirees in the US is social security. 00:03:25.039 --> 00:03:27.699 Right. Empowering your finance. Finance points 00:03:27.699 --> 00:03:30.879 out it's a huge chunk of retirement income for 00:03:30.879 --> 00:03:34.419 many, many people, something most of us pay into 00:03:34.419 --> 00:03:37.240 our whole working lives. And it's important to 00:03:37.240 --> 00:03:40.439 understand roughly how it works. The materials 00:03:40.439 --> 00:03:42.500 explain that your benefit amount is based on 00:03:42.500 --> 00:03:44.759 your earnings history, how long you worked. OK. 00:03:45.020 --> 00:03:47.020 But here's a really key point they highlight. 00:03:47.280 --> 00:03:49.740 When you decide to start taking your benefits 00:03:49.740 --> 00:03:51.759 makes a big difference to your monthly payment. 00:03:52.139 --> 00:03:54.740 How so? Well, for instance, you can start as 00:03:54.740 --> 00:03:57.840 early as 62, but your payment will be lower than 00:03:57.840 --> 00:04:00.139 if you wait until your full retirement age or 00:04:00.139 --> 00:04:03.039 even later up to age 70. Ah. So there's a trade 00:04:03.039 --> 00:04:05.620 -off. A significant one. Delaying your claim, 00:04:05.639 --> 00:04:08.840 say, from 62 all the way to 70, could actually 00:04:08.840 --> 00:04:11.979 boost your monthly benefit by something like 00:04:11.979 --> 00:04:14.919 76%. That's a massive difference. Wow. OK. So 00:04:14.919 --> 00:04:17.379 that timing decision isn't trivial at all. It's 00:04:17.379 --> 00:04:20.540 a strategic choice. Very much so. It needs careful 00:04:20.540 --> 00:04:23.100 consideration based on your health, other savings, 00:04:23.319 --> 00:04:26.040 your spouse's situation, lots of factors. Got 00:04:26.040 --> 00:04:29.430 it. Now, The resources also mention another type 00:04:29.430 --> 00:04:32.050 of retirement income defined benefit plans. We 00:04:32.050 --> 00:04:34.069 usually call them traditional pensions, right? 00:04:34.189 --> 00:04:37.629 Yes, exactly. Pensions. Empowering Your Finance 00:04:37.629 --> 00:04:40.129 explains these are plans where your employer 00:04:40.129 --> 00:04:43.069 basically promises to pay you a specific, predictable 00:04:43.069 --> 00:04:45.470 income when you retire. Like a guaranteed paycheck 00:04:45.470 --> 00:04:48.839 in retirement? Sort of, yeah. Unlike, say, a 00:04:48.839 --> 00:04:51.100 401k, where the amount depends on contributions 00:04:51.100 --> 00:04:53.620 and investment performance, a pension promises 00:04:53.620 --> 00:04:56.319 a set benefit. But the materials also note these 00:04:56.319 --> 00:04:57.959 aren't as common as they used to be. That's a 00:04:57.959 --> 00:05:00.660 really important point they make, yes. Fewer 00:05:00.660 --> 00:05:03.139 private sector employers offer traditional pensions 00:05:03.139 --> 00:05:05.579 now. They've largely shifted towards defined 00:05:05.579 --> 00:05:08.779 contribution plans, like 401ks. Which puts more 00:05:08.779 --> 00:05:11.199 of the responsibility and the risk on the employee, 00:05:11.339 --> 00:05:14.579 doesn't it? It generally does, yes. With a 401k, 00:05:14.720 --> 00:05:16.639 you're making the investment decisions and your 00:05:16.639 --> 00:05:18.899 final amount depends on how well those investments 00:05:18.899 --> 00:05:21.980 do. Pensions removed that uncertainty for the 00:05:21.980 --> 00:05:25.329 employee. So while 401ks and IRAs are huge parts 00:05:25.329 --> 00:05:27.149 of the picture for most people today, and maybe 00:05:27.149 --> 00:05:29.649 we can touch on those another time, these resources 00:05:29.649 --> 00:05:32.709 are focusing on the fundamentals, including understanding 00:05:32.709 --> 00:05:34.910 pensions if you happen to have one. Exactly. 00:05:35.250 --> 00:05:37.129 If you are one of the fortunate ones covered 00:05:37.129 --> 00:05:39.449 by a pension, it's a key part of your income 00:05:39.449 --> 00:05:42.029 puzzle, and understanding its basics is important. 00:05:42.230 --> 00:05:45.089 OK. So we've covered Social Security and pensions 00:05:45.089 --> 00:05:48.889 as potential income. What else do the empowering 00:05:48.889 --> 00:05:51.269 your finance material stress we need to consider? 00:05:51.579 --> 00:05:54.540 Well, moving beyond just the income side, they 00:05:54.540 --> 00:05:57.279 really emphasize other critical factors for a 00:05:57.279 --> 00:05:59.680 secure retirement, and one of the absolute biggest 00:05:59.680 --> 00:06:03.160 is health insurance. Healthcare costs. That's 00:06:03.160 --> 00:06:05.199 a huge concern for people heading into retirement. 00:06:05.339 --> 00:06:08.220 It really is. As the resources mention, staying 00:06:08.220 --> 00:06:10.819 healthy is obviously important always, but it 00:06:10.819 --> 00:06:13.639 takes on maybe an even greater focus in retirement. 00:06:13.850 --> 00:06:16.050 You hope to have more time for preventative care, 00:06:16.370 --> 00:06:19.069 perhaps? Yes. And just realistically, the chances 00:06:19.069 --> 00:06:22.490 of needing more medical care, prescriptions, 00:06:22.730 --> 00:06:24.889 treatments, tend to go up as we get older. So 00:06:24.889 --> 00:06:26.990 having good health insurance is non -negotiable, 00:06:27.050 --> 00:06:30.189 really? Absolutely vital. Empowering your finance 00:06:30.189 --> 00:06:33.470 puts it simply. Staying healthy is a primary 00:06:33.470 --> 00:06:36.430 goal, and having solid insurance coverage is 00:06:36.430 --> 00:06:38.889 fundamental to that and to your financial security. 00:06:39.079 --> 00:06:41.240 Makes total sense. Now, it's not just income 00:06:41.240 --> 00:06:44.420 and health, is it? The materials also talk about 00:06:44.420 --> 00:06:47.180 other factors, things that can kind of derail 00:06:47.180 --> 00:06:49.379 your plans if you don't account for them. That's 00:06:49.379 --> 00:06:52.160 right. They highlight several potential risks 00:06:52.160 --> 00:06:54.560 that can significantly impact your retirement 00:06:54.560 --> 00:06:57.019 income, things you might overlook in day -to 00:06:57.019 --> 00:06:58.899 -day planning. OK, like what kind of risks are 00:06:58.899 --> 00:07:00.680 we talking about? Well, first, there's investment 00:07:00.680 --> 00:07:03.079 risk. The chance your savings won't grow as much 00:07:03.079 --> 00:07:05.459 as you hoped, or even lose value. Right. The 00:07:05.459 --> 00:07:07.879 market doesn't always go up. Exactly. Then there's 00:07:07.879 --> 00:07:10.620 inflation risk. This is a big one. The risk that 00:07:10.620 --> 00:07:13.600 the cost of living will rise over time, eroding 00:07:13.600 --> 00:07:16.120 the purchasing power of your savings. So the 00:07:16.120 --> 00:07:18.060 money you save doesn't buy as much later on. 00:07:18.399 --> 00:07:20.860 Precisely. Think about it. Even modest inflation, 00:07:20.939 --> 00:07:24.180 say 3 % a year, means something costing $100 00:07:24.180 --> 00:07:28.540 today would cost almost $180 in 20 years. Over 00:07:28.540 --> 00:07:31.360 a long retirement, that adds up significantly. 00:07:31.639 --> 00:07:33.399 That really puts it in perspective. What else? 00:07:33.740 --> 00:07:36.879 The potential for a catastrophic illness, something 00:07:36.879 --> 00:07:39.839 major and unexpected that comes with huge medical 00:07:39.839 --> 00:07:42.949 bills, even with insurance. Hmm a scary thought 00:07:42.949 --> 00:07:45.850 it is and related to that the potential need 00:07:45.850 --> 00:07:48.449 for long -term care like assisted living or nursing 00:07:48.449 --> 00:07:50.790 home care Which can be incredibly expensive. 00:07:50.870 --> 00:07:54.449 Okay, and finally they mentioned taxes You need 00:07:54.449 --> 00:07:56.970 to understand how your retirement income withdrawals 00:07:56.970 --> 00:07:59.269 from saving Social Security benefits will be 00:07:59.269 --> 00:08:01.990 taxed It affects your actual spendable income 00:08:01.990 --> 00:08:05.319 Wow That's quite a list. Investment risk, inflation, 00:08:05.699 --> 00:08:08.939 major illness, long term care, taxes. It really 00:08:08.939 --> 00:08:11.420 highlights that planning needs to be pretty comprehensive. 00:08:11.759 --> 00:08:14.120 It absolutely does. It's not enough just to save. 00:08:14.399 --> 00:08:16.279 You have to think about protecting those savings 00:08:16.279 --> 00:08:18.300 and making sure they'll last and cover these 00:08:18.300 --> 00:08:20.660 potential hurdles. So understanding these risks 00:08:20.660 --> 00:08:23.759 is key to not having your retirement vision disrupted. 00:08:24.079 --> 00:08:27.480 Definitely. Being aware allows you to plan strategies 00:08:27.480 --> 00:08:30.899 to mitigate them as much as possible. Now, empowering 00:08:30.899 --> 00:08:33.100 your finance doesn't just lay out the challenges, 00:08:33.500 --> 00:08:35.799 right? They also point towards resources to help 00:08:35.799 --> 00:08:38.059 people navigate all this. That's right. They 00:08:38.059 --> 00:08:40.159 mentioned their magazine on Flipboard, for example. 00:08:40.320 --> 00:08:42.559 It's a place to find, you know, current articles, 00:08:42.940 --> 00:08:45.919 stories, news about retirement planning. Staying 00:08:45.919 --> 00:08:48.100 informed. That sounds useful for keeping up to 00:08:48.100 --> 00:08:51.179 date. Yeah, things change rules, strategies, 00:08:51.720 --> 00:08:53.759 market conditions, so staying current is important. 00:08:54.120 --> 00:08:56.100 They also mentioned having a retirement planning 00:08:56.100 --> 00:08:58.019 glossary available. Well, that could be handy. 00:08:58.240 --> 00:09:00.639 Sometimes the jargon can be confusing. It really 00:09:00.639 --> 00:09:03.600 can. So a glossary helps you understand the terminology 00:09:03.600 --> 00:09:06.659 which is empowering in itself. And they also 00:09:06.659 --> 00:09:08.740 offer a newsletter. Yes, a newsletter designed 00:09:08.740 --> 00:09:11.820 to deliver resources, strategies, tools, expert 00:09:11.820 --> 00:09:14.279 tips, that kind of thing, directly to people. 00:09:14.799 --> 00:09:17.139 So ways to continue learning and get ongoing 00:09:17.139 --> 00:09:19.240 support. Exactly. Because retirement planning 00:09:19.240 --> 00:09:21.559 isn't really a one -time event. It's an ongoing 00:09:21.559 --> 00:09:24.279 process. Using resources like these helps you 00:09:24.279 --> 00:09:26.840 stay engaged and informed. OK, so let's try to 00:09:26.840 --> 00:09:29.559 wrap this up. Looking back at everything we've 00:09:29.559 --> 00:09:32.320 discussed from the empowering your finance materials. 00:09:33.450 --> 00:09:36.450 It feels like the core message is that understanding 00:09:36.450 --> 00:09:38.870 your options is really the essential first step. 00:09:39.309 --> 00:09:41.250 Absolutely. You can't make good decisions without 00:09:41.250 --> 00:09:43.789 understanding the landscape. Knowing the potential 00:09:43.789 --> 00:09:46.909 income sources, being aware of the risks, knowing 00:09:46.909 --> 00:09:49.669 where to find help, that's the foundation. It 00:09:49.669 --> 00:09:52.009 empowers you to start building that secure future 00:09:52.009 --> 00:09:54.830 everyone hopes for. It does. It allows you to 00:09:54.830 --> 00:09:56.950 take control of the process. And maybe as people 00:09:56.950 --> 00:09:58.649 listen to this, they can start thinking about 00:09:58.649 --> 00:10:01.250 their own vision for retirement. You know, we 00:10:01.250 --> 00:10:03.309 mentioned that idea of bliss earlier, borrowing 00:10:03.309 --> 00:10:05.889 Betty Sullivan's word. What does bliss look like 00:10:05.889 --> 00:10:08.809 for you? That's a great question to ponder. And 00:10:08.809 --> 00:10:11.330 how do these options, social security timing, 00:10:12.070 --> 00:10:14.509 pensions if you have them, managing risks like 00:10:14.509 --> 00:10:17.970 inflation, how do they fit into making that personal 00:10:17.970 --> 00:10:20.870 vision of bliss achievable? Understanding the 00:10:20.870 --> 00:10:23.309 tools and options helps you build the bridge 00:10:23.309 --> 00:10:25.649 from where you are now to that desired future. 00:10:25.879 --> 00:10:28.080 Betty Sullivan's full quote was something like, 00:10:28.539 --> 00:10:30.820 there is a whole new kind of life ahead, full 00:10:30.820 --> 00:10:33.740 of experiences just waiting to happen. Some call 00:10:33.740 --> 00:10:36.980 it retirement. I call it bliss. It's a nice thought, 00:10:37.059 --> 00:10:39.360 isn't it? It really is. Very positive framing. 00:10:39.860 --> 00:10:42.500 So understanding your options is that first critical 00:10:42.500 --> 00:10:45.379 step towards finding your own version of retirement 00:10:45.379 --> 00:10:48.570 bliss. Well said. And we'd certainly encourage 00:10:48.570 --> 00:10:50.649 listeners to check out those empowering your 00:10:50.649 --> 00:10:52.710 finance resources. We mentioned the magazine, 00:10:52.990 --> 00:10:55.009 the glossary, the newsletter to keep learning 00:10:55.009 --> 00:10:57.129 and planning. Definitely. Take those next steps 00:10:57.129 --> 00:10:57.970 for your own future.