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Speaker 1: Hi, I'm Stacey Hyde
and I'm back for another episode

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of Better Financial Health in
15 minutes or less, and today I

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want to talk about something
that comes up a lot in meetings

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that we have at client
workplaces how much money do I

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need to retire?

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Well, I'd like to turn that a
little bit on its head and focus

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on the timeline of retirement,
because retirement is not just a

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number, it's a timeline.

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And if we look at what most of
our retiree clients timeline

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looks like is, the first few
years of retirement are kind of

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expensive because there's this
sort of pent up demand for

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taking a trip, things I've
always wanted to do.

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You know, I want to get a shop
built or I want to remodel my

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kitchen, I wanted to go visit
this big trip to Europe, but

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I've never had time, and so it
tends to be pretty expensive in

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those first few years.

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But then as those things get
done and taken care of and sort

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of checked off the proverbial
bucket list, expenses sort of

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trend downward over time and
sort of level out and it's not

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to say that you don't still
travel, but generally speaking

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it's not as much and in many
times not quite as expensive.

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And then as we get older, then
expenses start popping back up.

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So one of the things that you
need to realize and sometimes I

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have a hard time convincing
people of this is you really do

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need to plan for 25, 30 years in
retirement.

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And if you're one of those
folks that's like I want to

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retire at 60 or 59 and a half or
even 55, well, you're

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potentially looking at a 40-year
retirement, because the

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statistics show that a
67-year-old couple, there is a

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greater than 50% chance that one
of them lives to 90.

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That's a pretty big number, and
so you don't know which one's

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going to be you.

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So you need to plan for that,
and one of the things you can do

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for that if you're already
retired is sort of put your

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money into buckets.

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You have your spending bucket,
you have your income bucket,

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that's, your investments that
are going to generate income,

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and then you have your growth
bucket, because, guess what, as

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you spend from the first two,
you need the growth in that

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third bucket in order to
replenish so that that cycle can

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continue.

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Because if you don't have
growth, chances are your income

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is not going to keep up with
inflation.

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We did have a lot of years
where we didn't have a lot of

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that, but it is important to
look at it.

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The other way you can generate
your income is if you're lucky

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enough to have a pension you
worked for the military and if

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you did thank you for your
service, you're a teacher or you

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worked for some government
agency likely you have a pension

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and that's what I refer to as
mailbox money, like your social

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security that shows up every
month.

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Some people will look at
annuities.

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Just understand those have
trade-offs.

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Most annuities don't increase
with inflation, but most

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pensions don't either.

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Unless you work for a
government agency or the

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military, those will have an
inflation adjustment in most

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cases.

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So that's the way we look at it
for folks that are already

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retired or looking at retiring
very soon.

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But what about for our younger
listeners?

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You may be thinking you know the
idea of ever accumulating a

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million dollars.

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When I'm staring down the
barrel at $50,000 of student

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loan debt, I can't even imagine
saving for a house.

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I've got a car payment and I'm
upside down on my car.

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I'm trying to figure out how to
dig out.

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Well, what you need to think
about is not the $1.7 million or

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whatever some calculator tells
you, it's just look at trying to

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do what you can do today and
looking at replacing one year of

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your spendable income.

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So you want to take advantage
of that 401k at work?

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Definitely get the match
dollars, but don't stop there.

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You want to continue to save,
you want to fund your Roth IRA,

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but first of all, always, always
, always, have $1,000 at least

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in your emergency fund so that,
if something comes up and

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happens, you don't wind up
paying a lot of money in credit

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card debt.

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And because I cannot pass up
this opportunity, because I'm

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just amazed at the people who
think that they have to carry a

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balance on their credit card in
order to have perfect credit,

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the answer is you don't.

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As long as you pay your credit
card bill in full every month,

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you don't have to pay any
interest and you will still have

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a perfect credit score.

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It's more important that you
pay your bills on time and you

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don't carry a big balance
relative to your credit limit.

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That's what factors into your
credit score.

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So just do those little things.

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And so what you're trying to do
is replace one year of spending,

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then you concentrate on the
next, and then what's going to

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happen and I think you're going
to be surprised at how fast it

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happens is you're going to save
up and for the first year or two

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that you're saving, it's going
to feel like it all came from

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you, because pretty much it did.

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But then as your balance grows
and as you earn money on your

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money, the interest and the
growth in your accounts are also

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going to pick up and fund some
of those years.

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And as your account grows, the
more interest and the more

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earnings you're going to have
that come from your earnings.

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So that's the power of compound
interest for your benefit.

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So don't be discouraged.

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Just take that first step.

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And if you haven't already
listened to our episode on 1%,

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go back and give that a listen,
because it's got a lot of good

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tips for how you can get there.

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And the thing to remember if
you said I've made a bunch of

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mistakes, quit digging.

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Just start from where you are
and go forward.

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We cannot fix the past, we can
only move forward.

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So look at your situation and
make better decisions today so

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that you will have a better
financial future tomorrow.

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Thanks for tuning in.

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This has been another episode
of Better Financial Health in 15

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minutes or less.