Women's Money Wisdom

Episode 211: When Should I Get Serious About Saving For Retirement?

• Melissa Joy, CFP ® • Season 4 • Episode 211

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When should you get serious about saving for the future (older) you? It’s never too late to start or reassess your retirement strategy. Whether you’re a super saver, an average saver, or doing well but unsure if you’re on track to retire comfortably—this episode has something for everyone. Melissa Joy discusses options for multiple stages of retirement planning and what you can do if you’re traditionally employed, a business owner, or have experienced career setbacks along the way.

Listen and Learn:

  1. When it's time to get serious about retirement planning
  2. The key steps to take to understand your retirement outlook
  3. How to improve your trajectory no matter which group you fall into

Resources:

  1. Watch our 2023 Retirement Readiness Webinar
  2. Discover how the average American feels about retirement readiness
  3. Learn more about the XYPN Network
  4. Find out how to get started with Pearl Planning’s retirement planning and analysis services

Links are being provided for information purposes only. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Pearl Planning cannot guarantee that the information herein is accurate, complete, or timely. Pearl Planning makes no warranties with regard to such information or results obtained by its use and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation. Please note, changes in tax laws or regulations may occur at any time and could substantially impact your situation. Pearl Planning financial advisors do not render advice on tax matters. You should discuss any tax matters with the appropriate professional.


The previous presentation by PEARL PLANNING was intended for general information purposes only. No portion of the presentation serves as the receipt of, or as a substitute for, personalized investment advice from PEARL PLANNING or any other investment professional of your choosing. Different types of investments involve varying degrees of risk, and it should not be assumed that future performance of any specific investment or investment strategy, or any non-investment related or planning services, discussion or content, will be profitable, be suitable for your portfolio or individual situation, or prove successful. Neither PEARL PLANNING’s investment adviser registration status, nor any amount of prior experience or success, should be construed that a certain level of results or satisfaction will be achieved if PEARL PLANNING is engaged, or continues to be engaged, to provide investment advisory services. PEARL PLANNING is neither a law firm nor accounting firm, and no portion of its services should be construed as legal or accounting advice. No portion of the video content should be construed by a client or prospective client as a guarantee that he/she will experience a certain level of results if PEARL PLANNING is engaged, or continues to be engaged, to provide investment advisory services. A copy of PEARL PLANNING’s current written disclosure Brochure discussing our advisory services and fees is available upon request or at https://stephenPearl Planning.com/

Melissa Joy:

Welcome to the Women's Money Wisdom Podcast. I'm Melissa Joy, a certified financial planner and the founder of Pearl Planning. My goal is to help you streamline and organize your finances, navigate big money decisions with confidence and be strategic in order to grow your wealth. As a woman, you work hard for your money and I'm here to help you make the most of it. Now let's get into the show.

Melissa Joy:

Welcome back to the podcast, and it's Melissa Joy here today, just thrilled to be talking about a topic that I think is on everyone's mind, but you may be afraid to ask. This is so important. When should I get serious about retirement and retirement savings? And I think this is a topic that everybody knows is important, but they don't really know enough to make sure that what they're doing matches what they need to be doing, and so I just thought it was always the right time to have this discussion, and I know, going in, you may be rolling your eyes to say, well, I've heard from financial people. What you should be doing is just get started in retirement saving way way back 10 or 20 years ago, knowing that most of our listeners are Gen X and millennial women and we used to be the babies in the room, but we're not anymore. We're really in that financial adulting phase, and so you may be feeling like, yeah, I know I'm behind, but what am I supposed to do about it, melissa?

Melissa Joy:

But I really want to break this episode into three groups. I feel like there's the super savers that started early. Maybe their parents were really nudging them or even helping them to do saving, and they have a unique set of challenges. And then we've got the people that are just plotting along. They're doing some saving, but not sure how much. I'd say they're the middle rotors. And then there's another healthy group of you, and all is not lost. Do not be afraid to listen to the rest of this episode, but you may be, for a variety of reasons, whether you weren't able to get started or had setbacks along the way, way, way behind and so I want to talk to each of you as a group, and you may identify with one or another, and it may be that you are a little bit of both, but I want to talk to you about where you may be based on that group. If you are not in one of these groups, you probably have friends who are, and let's talk about some realistic things that you can do, depending on which group you're in, and I'd love to give you a little bit of a perspective of how a financial planner looks at things. I think the assumption may be oh, I'm going to be judged when we start to have this conversation or discussion, but, believe me, we see all types of situations and really, as a financial planner at least the ones that I know who are really committed to improving people's lives. They aren't judging you based on where you're starting from. They're judging the actions that you're able to take, or not even judging, but they're assisting with the actions that you can take to improve your circumstances or situation.

Melissa Joy:

So, without further ado, let's break down these groups, and I want to start in reverse. Let's start with the people that are just. They have no clue where to start. They're way, way behind. You know, you'd be surprised some of the people that fit in this group.

Melissa Joy:

Of course, there are people that have had either setbacks because they've had to make shifts in their career or chosen to make shifts in their career. There are people that have gone through significant life events, whether it's being widowed or divorced, where you didn't have any control of the circumstances, but you find yourself starting over. Another big group that doesn't necessarily do retirement savings because they're too busy being successful in another area of their financial life is actually business owners. You'd be surprised. You just don't always get started with that retirement plan right off the bat, even if you own a really successful business. So if you're just sitting there and you're like I know I should have been doing something but I haven't already, then there is no time like the present to get started. First of all, go ahead and evaluate your options, and one of those pieces of evaluation is is there any money available to be saving? If you can't find that in the budget, then go work on the things that will allow you to free up your cash flow, be that increasing the amount of money you're making or starting to understand the savings programs or options that you have. If you don't have any savings options let's say that your employer doesn't offer a retirement plan you may still have choices and if all else fails, as long as you have enough money, you can also invest in a taxable investment account that you don't. Nothing says that all of your retirement savings has to be in a 401k or IRA or Roth IRA or things like that. We just did an episode recently which talked about the different ways you can get started investing after you kind of exhausted your pathways in retirement accounts. So you know, listening to that episode would definitely be helpful.

Melissa Joy:

But this group in particular, I think, needs to consider paying for a financial plan. A lot of times financial planners work with people when they already have investment accounts, because they end up having their accounts managed and then that's the way you pay for things. So for this group of people, all is not lost. You can definitely pay for a financial plan. That's separate from managing investments, and I would certainly recommend that to kind of right size your cash flow if you have cash flow issues, but also identify where the money should go to. That would be money well spent because, also, you're in a group at least as I'm assessing and I'm over generalizing I'll say you're in a group that needs to do everything right.

Melissa Joy:

You need to be catching up, you need to be very serious about things and you need to be realistic about what your options are beyond social security, which hopefully you have and so really approaching this with a mindset of I've got to get started and I'm going to make that a priority right now is really where I would suggest going, and I'm just assuming not everybody is like this. Some people are really dialed into their options and it's just the circumstances or they knew they were going to be delayed in terms of getting things started. But for a lot of you, I do think professional advice may be really helpful, and either reaching out to a company like ours or to a group like XY planning, where there are often people that will charge you for a financial plan versus making sure that you have enough money to invest before they're willing to take you on as a client xypncom, the XY planning network that's a great resource, but do go out and seek the advice of a fiduciary. If you think you do not know where to get started. Now, this is not. If you're in a circumstance where you're just buried in debt, then I would go, take a step back and start with a credit counselor or a pathway where you can get out of that debt before you get the retirement savings started. So this is one step ahead of that. But that's what I would do with that group where you're just like I have, should have done something or, you know, did not have control of my circumstances. But I want to get really serious about things. Unless it's the day before retirement, there should be some room for you to improve your circumstances.

Melissa Joy:

I often see people even three to five years prior to retirement making huge changes in terms of their outlook, in their picture, with realistic, sober, hard working kind of you know, roll up your sleeves and get things done. Attitude toward getting ready for retirement. Flexible thinking really helps too. You know you don't get to control all things. If you're going into a situation where you just don't have, you know, the perfect all the stars align for things being perfectly planned, then you need to be flexible. Perhaps in the time of retirement or you know what you're going to focus on you may need to make changes in other parts of your life.

Melissa Joy:

Okay, let's talk about the group in the middle. Many of you have been really focused on retirement. You're making some contributions along the way. I call it plotting along, but that's actually a good thing, because sometimes boring is better. But you, you know, do the things at work to make your contributions. You get your match, and so you've got some money saved. It's growing.

Melissa Joy:

But you really and I hear these people all the time these are typical people that reach out to us. You're just not sure what that would mean when it actually comes to retirement. You are not alone. So you know, if you find your retirement accounts are kind of Getting higher there, you know, maybe somewhere between a hundred thousand and even a million dollars, especially if you're in a family where you work on retirement savings with a partner. Well, you know when I think about getting serious about retirement for this group, what getting serious about retirement may mean is that you start to have a more clear picture of what retirement could look like. And that's not just like how much money do I need to end up with at the end, because in fact, retirement planners and financial planners like me know that there's no magic amount of money that you need. It really needs to be matched that a magical amount to your personal circumstances. And you may roll your eyes and say, melissa, no, I want to hear the magic solution.

Melissa Joy:

But the very specific solution that is magical for many families has to include your specific financial circumstances. What's included in that? Well, do you own one house or do you also have a vacation home? Do you have? Are you planning to pay for college for kids? That hasn't come up already? Well, one spouse retired at the same time as another? Are your ages the same? Also, we would want to think about the income that you expect to have until retirement, and do you have any pension income, whether you were a teacher or a government worker or had a corporate pension from back in the day? All of these specifics don't quite work in just pulling up a retirement calculator on the big 401k websites like empower, fidelity or Vanguard. Instead, you need a little more specific and customized financial planning advice and use of software in order to see the options for different retirement scenarios For this group of people.

Melissa Joy:

You probably, or could, be in your 40s and 50s, or even 60s, and now you are, you know, really starting to dial in on. Tell me what retirement looks like, because I have. I know I've done some of the right things, but I'm not quite sure what to do now, and so, then, the role of financial financial planner is to tell you where you're doing a great job and also uncover some of the opportunities and help you make better decisions by identifying your choices and narrowing them down to the choices that make the most sense for you, based on your life, your needs, your preferences, how you approach things, a lot of psychology and personality kind of fits into that if you work with the right financial planner. So for this group of people, what I think you need to be doing now is kind of refining, weeding for lack of a better word simplifying in spaces where maybe you've collected a bunch of accounts because you've worked a few places along the way and maybe you don't need quite as many, and then making those accumulation years, those years where you have are earning good money, making them really account but being able to say yes to things that you want to do right now, but also keeping an eye toward retirement and kind of planning for your retired self as well. It may sound like an advertisement for financial planners. That's just because of the world that I know and live in, but this can be a really powerful engagement to work with a financial planner To you know, really get to know Go, try and add five that a lot what things are going to look like over time and have very specific advice on what is hopefully getting a little complicated because you have a little more money and a little more opportunity, but it's not all you know. Kind of just like, hey, go, go, max out your 401k to the amount that you get a match. Or, you know, do a Roth IRA and you'll be good. The advice starts to get more specific and a little more complicated, and this is where a well-trained technical financial planner can really help out.

Melissa Joy:

Okay so, super savers I'm generalizing, but this group of people may have been, you know, kind of raised to say, maybe mom, a dad or grandma and grandpa really instilled in you you need to open a Roth IRA in your 20s and you've just like all along the way, been extremely focused on saving as much as possible. This group of people may actually need permission to spend. I know it sounds crazy, but you may be an austerity mode where you just you know, you know how to get the dopamine hit from saving more, but you don't know how to make it okay to spend Money. And so sometimes we're advising people like this and I know it sounds shocking, but how to save a little less and enjoy your life until retirement. So you're not just, you know, kind of on that hamster wheel just saying when can I get out of here for people like this? I may be talking to them about Changing jobs so that they're not quite as unhappy in a position that they really think, reward some financially but doesn't reward them from a quality of life perspective.

Melissa Joy:

Maybe people like this also, you know, if you're in the messy middle, you've got kids and child care or activities and maybe taking over care of aging parents. Sometimes I tell them you know, you've done such a good job saving that we could actually reduce, for example, your 401k contribution during these expensive years for you and your family. And I know that sounds wild, but if you're the super saver, getting serious about retirement may mean Making some adjustments down in terms of what you save, because you saved enough, but you're feeling like you have to Really scrimp on your current life and lifestyle, and so I hope, with this episode, when we're talking about these people, you know Again, this is very specifically tailored to you in your life. The other thing that this group really needs to see that isn't as clear. You've been a superstar, rock star when it comes to saving, but I find this group really like finds it difficult to start spending their retirement money when they actually do get to the point in time that they retire, and so I Know it sounds. It sounds ironic, but these people really, even though they as a group, are just naturals when it comes to reading up on personal financial literacy and taking advice.

Melissa Joy:

When it comes to Getting ready for retirement, they need some different help in terms of helping them, kind of holding their hand or helping them to make decisions about how to spend money in retirement, and you even may even need to be planning Seriously about how to do that spending well in advance, even years in advance, so that you start to get comfortable with the process. Because these are types of people that just Never know if there's enough, and they've been taught to be a little bit more pessimistic about the right amount being enough, and so they always want to kind of be able to kick the tires and have proof that things are going to be right, and so in that case we need a longer period of time to kind of illustrate in very specific ways. I just love the ways we're able to visualize what retirement might look like for people. That I wasn't able to do years ago or even a couple years ago. We can get really specific when it comes to the taxes and retirement and things like that. But that's another time period where it's time to get serious, when you're starting to think about spending it. So there's all sorts of entry levels in terms of when to get serious about retirement and I wouldn't discount that age old wisdom of you know the earlier the better. So the best time to call was yesterday but the next best time is to call today.

Melissa Joy:

But I hope with this episode you've been able to identify which group you might fit in the super savers, the plotting alongs in a good way, or the average savers or the way behind need to get started. In some cases you could be in the same family and you are one person and your spouse or partner is another. So learning you know kind of what makes people tick for each group, I think is good. Or even you may be comparing what you do with friends who are in a different group or subset and they're giving you the right advice that works for them but it's not what fits with you in your life. I find that all the time and I find a lot of value and kind of the water cooler wisdom, the text chain of you should consider this or that.

Melissa Joy:

But then you know it's really difficult for a person who's really been deeply ingrained in their perspective in life to be able to have the perspective to understand that a different person's circumstances may be appropriately different and to meet the personality and psychological perspective of that person.

Melissa Joy:

That's where a financial planner has an advantage of having met hundreds, if not thousands, of people over the years and to really understand what makes you particularly tick and you, along with a partner as is in many of our client engagements where you know one partner says I just really need the advice of a planner, and drags or brings their spouse or partner with them to the conversation. So should you get more serious about retirement? Do you give yourself a gold star as you listen to the today's episode? Both could be true but, based on what you're hearing, either give yourself an add a girl or add a boy, or make a plan so that you can feel like when you get asked the question, when should I get serious about retirement? You know that you already have. Thanks for listening. Thank you for listening to the Women's Money Wisdom podcast. If you found value in this episode, the best way you can support the podcast is to forward an episode to a friend or leave a review. Go to pearlplan. com and the podcast link to get all the resources and links mentioned.

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Melissa Joy, CFP

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