Tools to Get Through This


The following is a transcript of Episode #39 of the Retire Happy podcast with Roger Gainer.

All episodes of the podcast can be found at Apple PodcastsGoogle Podcast, and Spotify.

Roger: And in retirement, it’s not about how much wealth you have. It’s about how much income you can generate from it. Because remember, when we’re working, you’re bringing home a paycheck, and we’re buying food and paying the electric bill, everything else, we’re paying that from our income stream, not from those assets. But once you step off the curb into retirement, that paycheck has to now come from your assets.

Clark: You’re listening to “Retire Happy” with Roger Gainer, President of Gainer Financial & Insurance Services, Inc. Thanks for joining us. I’m your host, Clark Buckner. With so much uncertainty in the world today, it’s more difficult than ever to make decisions that can help you progress toward your financial goals. So in this episode, Roger explains how you can build a retirement income plan that will allow you to stop worrying about where your income will come from in retirement. He also shares some helpful tools you can use to assess your financial situation, and organize your priorities. For more content like this, head on over to Enjoy the show. Hey, Roger, how are you doing?

Roger: Doing well, doing well, holidays are coming.

Clark: Yeah, it’s that time of year. And the holiday season has a certain vibe to it. And this year, that vibe has been inversed, put upside down, inside out. And it’s just a wild time right now. And I know, we’ll sometimes address kind of what time of the year it is, and sort of what we’ve got going on. But all of these episodes that we’re doing, there’s such a long shelf life to it, it’s all evergreen. A lot of the principles that you share here can be used anytime of the year, but…

Roger: We try.

Clark: We definitely do. With so much uncertainty right now especially, I feel like it’d be impossible not to somehow recognize it and see that there is a lot of uncertainty and a lot of things that we definitely cannot control. So what has your experience been helping folks through a time like this? We already know, money is so emotional, and there’s…this is compounded by so many things. Like where do you even begin?

Roger: Well, that’s a great question. And thanks for asking it, Clark. It is a strange time, there’s a lot of things that aren’t making sense, doesn’t matter what side of the political spectrum you’re on. At the end of the day, we all have certain basic things that we want for our lives. We want stability, we want good health, we want good relationships, and we want to be happy, right? Isn’t that what we’re all kind of looking for? And how do we create that? And certainly, if you’re a watcher of news, or a reader of newspapers, right now, there’s just a lot of uncertainty, whether it’s health issues, or political issues, or financial issues, we’re seeing unemployment start to rise again. So there’s a lot of things to be concerned about right now. One of the things I’ve noticed, especially in the last few months, is that people really, because of all this are having a very hard time making decisions. Attention spans are down.

Clark: Brain fog is a real thing right now more than we’ve ever seen.

Roger: Yeah, have you noticed that in your family?

Clark: Yeah, everyone’s just exhausted. And people are on edge and we’re trying to deal with things we’ve never dealt with.

Roger: Right. And it’s kind of an overload. And it just feels strange. We crave that predictability as human beings, we want to find that comfortable groove and really not have the ground shaking all the time. We’re here in the Bay Area in earthquake country.

Clark: Yeah.

Roger: And I don’t know if you’ve ever experienced one, Clark, but…

Clark: I never have. I haven’t, thankfully.

Roger: Well, it’s a very strange experience because we’re so used to the ground being solid, and when the ground turns liquid, it kind of throws your whole world into this feeling of, wow, where am I? is this reality? And how do I get past this? Because the ground is moving in every different direction all at the same time. If you’ve never experienced one, I wouldn’t wish it on you. But it is a unique experience. We’ve had a few since I’ve been here, including the big one, the Loma Prieta one, in the World Series in 1989. And that was pretty crazy. It’s like the ground turned to liquid. And for a lot of people in trying to figure out their saving and investment and financial plans it sort of feels like that as well. Clients are asking me, “The market’s setting new records why?” And we had a recent podcast where we talked about one of the reasons is all this money being thrown into the market by the Federal Reserve.

Clark: The injections, basically.

Roger: Yeah, the injections in there, how they’re being used as a conduit to get that money on to Wall Street, and it’s pushing risk assets higher. And then of course, the Federal Reserve is guaranteed a bunch of riskier bonds and stuff, which is encouraged, again, more speculation. And the fuel is this liquidity that’s being injected in the form of stimulus into the economy. So with the ground moving around what I’m hoping to do here, not only in today’s podcast, but in the next few podcasts and blog posts that we’ll be sending out to everybody is to give you ways to get beyond all this craziness, all this uncertainty, that feeling of the ground not being steady, so that you can steady yourself, and you can get where you wanna go. I know we’ve touched on these from time-to-time, but I wanna really kind of narrow our focus so that our listeners have that confidence that is really lacking in a lot of people today, confidence to make good decisions and continue to progress.

I’ve had a number of people I’ve been working with over the last six, eight months just put everything on hold, they moved everything into cash, they don’t wanna move somewhere else. They’re hoping things calm down. But the reality is, they’re losing out because they still need to have retirement income, some of these people have just entered retirement, some have been able to postpone retirement for a few months, because their company has begged them to stay and paid them really nicely to do that. But they still know that they’re gonna have to depend on their assets for income in the not too distant future. But staying in cash, they’re not gonna have enough income to last a lifetime. And so that’s kind of where we’re at. And I wanna give our listeners tools so that they can continue to progress. Does that make sense?

Clark: Yeah. Well, do you wanna start with one of those tools now?

Roger: Sure. The ultimate goal of the work that I do with clients is retirement, being happy in retirement, and what are the things that get us there. And of course, the number one issue is where will my income come from in retirement? So what I’d like to do today is to give clients some really key questions that have to be answered in your retirement income plan, whatever you choose, in order for you to be able to exhale and not just hold your breath in retirement.

Clark: You don’t wanna hold your breath for all those years, what a terrible feeling to imagine, especially when you see the world changing so much and all the unexpected.

Roger: Exactly. So you can’t have a happy retirement if you’re tense all the time. So to relax, your plan should really include a number of elements. So these are kind of the questions. The first question, and one that I go through with clients in our process is how much time and effort do you wanna put in on your planning and executing your income plan in retirement? Let me explain what I mean by that. I see the most prevalent plan being, let’s set up a balanced portfolio of stocks and bonds. Usually, it’s 60/40. And we’re just gonna draw a certain amount of capital off of that each month. But unfortunately, that’s a portfolio that goes up and down in value, but your capital needs are gonna be consistent. So a plan that involves those kind of volatile assets that go up and down in value, you have to sit down periodically. And that doesn’t mean once a year or once every five years, you have to make these adjustments as the markets and the environment around you change so that you don’t get overwhelmed and you don’t run out of money. That’s what we call the Prime Directive in retirement is don’t run out of money. It’s the number one risk.

So if you’re willing to do all that, then a stock and bond type approach works out very, very well. But if you wanna do other things, I have clients that starts second careers, I have clients that go back to school, I have clients that have really intense travel plans. Well, if you’re traveling for three months, and the market starts to drop, what’s gonna happen to you? So I’m not saying avoid the market, I’m saying be in touch with what your retirement life is gonna look like and then have the income planning, the income provision of your plan match the lifestyle you wanna do. Does that make sense?

Clark: Yeah, I’ve heard some folks, maybe even you’ve talked about this where sometimes it’s not about how much money you make. It’s about how much money you’re spending.

Roger: Well, it’s about how much money you’re spending, true. And you want your income to match your spending. And in retirement, it’s not about how much wealth you have. It’s about how much income you can generate from it. Because remember, when we’re working, you’re bringing home a paycheck, and we’re buying food and paying the electric bill, everything else, we’re paying that from our income stream, not from those assets. But once you step off the curb into retirement, that paycheck has to now come from your assets.

Clark: Yeah, do some calculation, it’s almost like you’re shooting to the moon, right? You got to figure out how much fuel you need.

Roger: Well, right, except it’s easier to get to the moon. Because you know where that’s at. You can’t tell me how long you’re gonna live. I’ve had many clients over the years saying, “Well, a perfect plan for me is to spend my last dollar on my last day.”

Clark: Good luck.

Roger: And if you can tell me what day that is, I can run a nice mathematical formula and have it all nice and neat. And as an aside, that’s one of the problems historically in our planning community, is they plan your retirement drawdown of your portfolio to what’s called life expectancy. And life expectancy is simply a number that everybody who’s 65, the average amount of time they’re gonna live is to something like 84. But if you’re planning to 84, to spend that last dollar, and you live to 87, what are you gonna live on for those last 2 years, right? And we’re very aware of that out here because where I am sitting in Marin County, California, according to the Department of Health and Human Services, we’re the number one county in the country for life expectancy for women and we’re I believe number four, something like that, for men. So we have longer life expectancies. That means our money’s got to cover an even greater period of time.

So in order to make sure that your plan is gonna work, the first question you have to answer after how much effort am I gonna be able to devote and attention to the plan is, will the plan yield me lifetime income? Will my income last as long as I do? So people with pensions, you already know, if you’re gonna retire on your pensions and Social Security, it’s guaranteed to last as long as you do, right?

Clark: Right.

Roger: As long as your pension plan is adequately funded, okay. And that’s why they send those things out every January that I encourage all our listeners to pay attention to about the health of the funding of your pension plan. Because if they run out of money, you’re not gonna get a check. So that’s it, will my income last a lifetime? Will this plan give me lifetime income? The second thing is will my income maintain its purchasing power during my lifetime?

Clark: And that is because of inflation and changes of value, right?

Roger: Things tend to cost more over time. Now, in the last 10, 15 years, we keep hearing that inflation is dead, there’s very little inflation, the feds got a target to try to get inflation up actually to the 2% range. But when they’re saying that what they’re referring to is something that…a measurement called the CPI-U, the urban Consumer Price Index. And the reality is retirement is really based on different cost of living. People in retirement buy different stuff. So you’re not buying work clothes, you’re not doing work travel, your kids are probably grown and gone. So you’re not paying for their school stuff. But what you are paying for is more healthcare, you are paying for more travel in many cases, and more entertainment. And a lot of things, the cost of housing, the cost of certain types of medical care have really been going up more. So the CPI-E is the Consumer Price Index for the Elderly. And that goes up at a higher rate than the CPI-U, the urban one. I hope that’s not too too much jargon here. But the reality is that just things are gonna cost more, generally speaking, over your retirement lifetime. So how do you maintain that? Your ability to maintain your lifestyle is you have to have the ability to increase your income over time.

Clark: Right. And you wanted that to be diversified and everything you’re saying.

Roger: Well, diversified, but are there guarantees? Who’s making the guarantee? Those kinds of questions. It’s easy for me to say, I guarantee it, but really, I don’t have deep enough pockets to guarantee somebody’s. So we bring in institutions and investments. Which leads me to the another tip, all right, if you have an income resource, how reliable is it, right? A lot of people say, “Well you just buy portfolio stocks and you can live off the dividends.” And yes, there’s some great dividend stocks out there. But if you’re exclusively in dividend stocks, and we have a big drop in the economy, some of those dividends are gonna be at risk. Great example is back a number of years ago, well, not that many years ago, our local utility Pacific Gas and Electric was considered what we used to call a widow and orphan stock. There used to be a lot of Coca-Cola Con Ed in New York, companies that were old, stable and paid a solid, steady dividend, that tended to go up. In fact, there’s something called the dividend aristocrats these days, which are stocks that have many decade track record of increasing their dividends over time. And so that is a popular source, but you have to be aware that that dividend’s not guaranteed. When Enron started messing around with our energy market here in California, PG&E got in some financial trouble, and they eliminated the dividend. So they went from paying a nice, juicy dividend, and people living off of that dividend to no dividend at all. And now a lot of people who were dependent on that for retirement income, it’s gone. So then you’re scrambling to try to figure out, “Well, how am I gonna pay the bills next month?” So where that can be a piece it may not wanna be the biggest piece.

Clark: Right.

Roger: Then if you have a pension, now we just talked about pensions, if you do have a pension, is it funded well enough to pay you over your lifetime? And there is a requirement after Enron.

Clark: Right, I was just about to say, you said pensions are not necessarily a guarantee, right?

Roger: Well, there is a government guarantee, but it’s kind of like FDIC, there’s a limit to what they’ll guarantee. So there’s a lot of folks that used to work, for example, for steel companies and the airlines 10, 15 years ago and with airlines and even a little bit longer ago, where these companies, these [inaudible 00:17:09] companies went through bankruptcy and in bankruptcy they jettisoned their pension plans to something called the Pension Benefit Guaranty Association, which is an agency like the FDIC, it’s not exactly the government, but it’s an insurance program. And I know that there were, for example, United Airlines pilots who were expecting $15,000 a month pensions that are now collecting $5000 a month. And that’s a lifestyle change. So you wanna open those notifications from your pension plan, they come out the beginning of every year, you’re gonna see one here coming in January of next year. And it tells you how well funded and they even put a color system: green, yellow, and red. And I’ll let you guess which means everything’s good. Actuarially, it’s the green is good, yellow’s like, “Be careful,” and red is, like, flashing, “Better figure out plan B.” Okay. So an example of a pension plan that’s in the red is the Illinois State teachers pension plan, it’s one of the worst funded pension plans for public employees in the country. And it’s sad, I know a couple people who are collecting pretty hefty pensions from there. And only time will tell how long that money is gonna last. But I strongly encourage folks in that situation, just to maybe set some of that pension income aside, plan for that rainy day and have a plan B. Also, if you have a pension, have a plan before you claim a benefit, because once you claim a benefit, you can’t make a change in that election.

But there are ways to maximize your benefit. I find it very sad when people make the wrong choice, they take the default choice when they’re going to retire and they’re leaving, in many cases, hundreds of thousands of dollars on the table over their retirement years. And we just hate leaving money on the table. You earned it, it’s there. It’s the benefit. Company’s happy when you leave it on the table because it goes right back in their pocket. And it’s the same thing with Social Security. That’s another one of those guaranteed income streams. Do you have a plan to maximize your Social Security benefit? We have a program that we can put your information in for you and your spouse and you will get back a report that shows you what the optimal is and then what are the sub-optimal alternatives so that you can then pick which strategy for claiming suits your overall plan and get the most out of Social Security. And again, the wrong decisions are costing people tens of thousands and in some cases, hundreds of thousands of dollars. So very, very important that before you claim these benefits, that you have a plan, a solid plan in place, you understand what your options are. There are a number of financial professionals, including myself, that specialize in this area of retirement income planning. And understanding Social Security and your pension options are very, very critical to that process.

Clark: Well, and there are so many options I feel like that creates more opportunities to make the wrong move.

Roger: Right. So just making formed decisions, I think that’s probably the simplest way to put it, understand what those options are, and make sure you’re comfortable with understanding the trade offs. If there was one perfect answer, there’d only be one option. And the fact is that people are all in different places. So the perfect answer for you is all that really matters, not the perfect answer that somebody else says, “Well, I claim this way. And it really worked out great for me,” or “Here’s what I’m thinking.” It’s great to get that input from people, but understand that your situation is different, and you want the optimal decision and the optimal strategy for you specifically.

Clark: Boom, I love it. That’s great.

Roger: Now, a couple of quick notes before we end is the side companion to having that income plan be reliable is figuring out what can derail the income plan. What if somebody gets…is fixing my house and they fall off a ladder and sue me? Do I have a plan in place to make sure that that doesn’t disrupt my retirement? Healthcare costs. Number one reason people go bankrupt in retirement is unforeseen healthcare costs, whether it’s the cost of long term care, or a heart attack, or cancer, and things that aren’t being paid by your insurance or Medicare, that’s the second biggest risk in retirement after running out of money. So make sure your income plan includes contingencies for this. And then just a little tip for our listeners, one of the things that can be brought to bear with this is some what I would consider little known options under the SECURE Act. The SECURE Act has been around for a few years, and I just don’t find a lot of people talking about it. But there are some things you can do with your retirement accounts to access that money, tax-free, your retirement accounts, your 401(k) at work, your regular IRAs. When you take money out, you pay income tax, but you can use some of that money. And instead of paying income tax when it comes out, you can have a tax-free benefit come out to pay for some of those costs. So it’s very important that you understand all of these things and how they fit together. That’s one of the reasons that we designed and created the thought organizer.

Clark: Real quick, what is the thought organizer?

Roger: So the thought organizer is designed to help you think about your situation, and organize your priorities and your feelings around those things. So some of these questions that I’ve brought up here in today’s episode are items right off our thought organizer to help you know what your feelings are, know how inclined you are to spend time, understanding do you wanna keep it simple? Do you wanna add layers of complexity that might give you greater growth in your assets or your income? And there’s trade offs. So the thought organizer, you can go to our website right at the bottom of the first page, you can ask for a copy and download it. And it’s a great conversation starter with a spouse or significant other if there’s somebody else involved in your retirement planning to help get you guys on the same page. And if you’re single, it helps you get on the same page with yourself. I find a lot of people are very conflicted. They talk to their friends and neighbors and they say, “Oh, you have to do this or you should do that.” And they’re like, “Ah, I’m just not comfortable with that. But okay, I’ll go ahead and do it,” and then something goes wrong, and then they’re really upset. “I shouldn’t have listened to Uncle Bill. I shouldn’t have listened to my next door neighbor, Jim or Sally. Those stock tips were terrible that my barber gave me.” So as you enter retirement, if your plans got those contingencies and you’re in touch with how you feel, it’s gonna let you relax. And if you can’t relax, you can’t retire happy. And retire happy, if you go to our website at, you’ll see it right on the front page, that is our thing. We want you to retire happy. So use that tool. Also, we’re gonna be coming out with some additional information I find that, you know, because we’re not meeting with people face-to-face these days, we’ve expanded the offerings and tools that we’re gonna be putting in front of people and providing to our clients, friends and prospects. Over the coming months we’re gonna be starting to send some of these things out here over the next couple of weeks. So keep an eye out in your email box. And if you wanna get that information and be included, again, you can go to our website, go to the blog or the podcast, you can ask to be included in the distribution list. So all of that can be found at

Clark: As always, Roger, thanks so much, man. As there’s so many things flying around, I always find a bit of peace, just looking at all this one step at a time. So thank you for carving out the time today to jump on this.

Roger: It’s my pleasure. I wanna leave you with one thought.

Clark: Yes.

Roger: Remember, people don’t plan to fail. They fail to plan.

Clark: Roger, with the wisdom bombs.

Roger: There you go. All right, Clark. We’ll talk to you in our next episode. Looking forward to it.

Clark: Roger L. Gainer, RICP, ChFC. California insurance license number 0754849, is licensed to sell insurance and annuity products in California, Illinois, Arizona, and Nevada. Roger L. Gainer is an investment advisor representative providing advisory services through HFIS, Inc., a registered investment advisor. Gainer Financial & Insurance Services, Inc. is not owned by or affiliated with HFIS, Inc. and operates independently.