Episode Transcript
[00:00:00] Speaker A: Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.
[00:00:17] Speaker B: You're tuned into the Retirement Planning Pipeline, the show that helps you take control of your financial Future. Whether you're 5 to 10 years from retirement or just getting started, we've got the strategies, tools and experience to help make the most of your nest egg. Retire Retirement Planning Specialist David Pipes is a trusted voice in retirement planning, helping Americans navigate 401k rollovers, income planning, tax strategies and everything in between.
Now let's dive into today's show and start paving the way to your smooth retirement. Alongside retirement specialist David Pipes. Here's your host, Jim Tarabakia.
[00:00:52] Speaker A: Hi everybody. Welcome to this week's edition of brand new episode of the Retirement Planning Pipeline, the show that delivers expert insights, actionable advice and real world financial strategies to help you retire confidently and comfortably. Thank you for making our show a part of your weekend. I'm your host Jim Tarabolkia alongside retirement planning specialist David Pipes. Dave will be joining us in just a moment. Five steps to catch up on your retirement plan Today we take a deep dive into part four of our series and discuss a simple but sometimes overlooked facet of retirement planning and that's creating a budget and cutting unnecessary funds. These past few weeks, David and I have been presenting a series centered around helping you catch up on your retirement plan, outlining five actionable steps to take right now to ensure a rock solid retirement plan so you can enjoy your golden years. And if you missed any of those shows and want to catch up is the podcast archives on Apple, Spotify or wherever you get your podcasts. All right, coming up on today's show, understanding where your money is really going, building a budget that works, and turning savings into retirement power. That's all coming up. But first, before we get the show started, I do want to encourage our listeners to go ahead and schedule your 100% complimentary consultation with Retirement Planning specialist David Pipes today. It's a free offering just for listening to this show. Our listeners can meet with us to review their own financial situation for your family or for your business. And there's absolutely no obligation. Visit retirement planningpipeline.com to get started. All right, let's get today's show started with a question. David, where is your money really going? Understanding spending habits before building a budget why budgeting fails for most people. And in our humble opinion, it's not a lack of income, it's a lack of a awareness. Some common blind spots that we may see, like streaming services, stacking up, dining out versus groceries, or having a small and efficient grocery list, small daily purchases that compound. So, David, I think it's time to introduce the idea. Idea of people having to do and understanding a financial audit.
[00:02:55] Speaker C: Yeah, I think first of all, I mean, I, I love the, the, the aspect of decreasing expenses. And I tell everyone that too first. You know, I think when, when, especially when you retire and your income starts to. You. Everyone understands their income's going to go down when they retire.
You know, I think that people are kind of planning ahead and they're saying, okay, well, let me budget and make sure I know what my fixed expenses are. The problem is, Jim, and everyone can, can kind of nod their head on this.
They don't understand the variable expenses that come into it. And what I mean by that is if people think, oh, okay, I've got, you know, groceries I can buy every single week or every single two weeks, or I've got, you know, something coming out here. My bills, my electric bill, my rent, my mortgage.
What they're not focusing on is, is the variable expenses that might not, you know, be necessarily a fixed rate. So like, not every month you have to pay it, but, you know, maybe a doctor bill here or there or maybe a dentist bill. So those are the ones that catch up big time.
And the reason why I say that is because almost every client has something in their mind that they're thinking about. They have to pay right, that next year or maybe even the next month. So, you know, like I just said, I mean, I have a client right now that's like, hey, David, I need some extra money. We've got to pay for our, you know, these teeth that we've got pool and being put in. You know, either Medicare's only giving me this much money or insurance is only covering this much. Right?
There's always those type of expenses. And I think that, you know, when people don't understand, hey, look, you don't want to, you don't want to ride across the coast. You want to have enough income, and this goes back to maximizing your income. And I can't stress it enough for you folks out there that are even planning to retire or already in the retirement, you know, phase. You have to guys that have to understand that you have to be able to maximize your income first. And that's what I do. You Know, mainly that's my first big talk about when I sit down with a client is, is what, where are you at with your income? Because yes, we can always talk about expenses and cutting down expenses, but it's always nice to have more income and more guaranteed and lifetime income than anything else.
And a lot of times people are underestimating how much they need because their budget shows their expenses at a certain amount. Right. And I think that's where, where things get tricky. Jim. You know, I have tons of clients out there that tell me every day, David, I want to spend what I want. I don't want to have to worry about what I have in income for that month. And that's where maximizing your income comes in. So if you're out there and you're thinking to yourself, hey, I don't want to worry about my expenses. I don't want to worry about how much I need to spend or where I want to travel or what dentist work I want done or maybe even what I want to buy the grandkids for, for, for Christmas or where I want to go for summertime or the pool or you know, house improvements. That's when you really need to sit down and go over these things. And I think it's super simple. I make it super simple for you.
You know, we would kind of make it as a math equation and go over really how much income we want to maximize you for so that you don't have to worry about those expenses. So again guys, give me a call if it's a free consultation to look over your budget, we can look over your income, we can look over your expenses and kind of dissect them and use math to understand what we need to do to really fix your income and expense ratio. Again, that number is 850-565-1705. Again, that's 850-565-1705.
[00:06:28] Speaker A: You know, I always love every week you talk about how you apply math and your strength in math, your background in math, to what your clients portfolios may look like. Where a lot of times we hear a lot of financial advisors, they use the same lingo, same vocabulary, retirement red zone. Nothing wrong with using that. But a lot of times the math equation is taken out of it and that is your strong suit. And you do such a nice job with your clients on actually applying math. Let me ask you a question though. How do you often do you see clients under a underestimate their expenses? And I asked that because you mentioned there about how people underestimate doctor's visits, dentist visits, even little things, maybe like again, groceries, things like that. So how often do you see clients just underestimating their expenses and actually leaving money on the table?
[00:07:16] Speaker C: Almost every single one, Jim. Almost every single. I'm not lying to you. I'm not lying. And for you guys out there, you're like, well, I don't. I mean, every. I, I myself, as a math guy, underestimate my. Underestimate my expenses. And I'll tell you why. Number one reason is because I have a beautiful wife that I love to death, and I. I spend my money on her. But my number two reason is because we don't want to have to care about what we spend, especially in retirement when you've worked your entire life, Jim, to be able to spend what you want, right? And I think everyone's chasing the amount instead of understanding how to transition it into income. And because I tell you what, math is never wrong. Math, numbers don't lie, period. And I go by that dirt every single day. Numbers do not lie. And I think everyone can understand that and agree with me on that point. But what I mean by that is, is that the simple equation is in such a subtraction problem, how much am I spending per year? And I'm going to subtract that from my annual income, my net income, right? Because taxes don't. Don't count. You can say you make 100k a year, but, you know, you really only net 80. You don't make 100k a year. Right? So I think that people kind of underestimate where they're at with their expenses. And even though it's an easy. It's an easy math equation, it's very, very hard. And I think what the tough part is, is no one really wants.
I don't know about anybody else, but I don't want to create a budget for myself. I mean, that's kind of. That's kind of pointless. I mean, you know, I don't want to have to tell myself that I have to spend something here or spend something there in retirement. That's why I worked my butt off. That's, you know, I want to travel, I want to do. I don't want to have to question myself whether I want to get dental work done because my tooth is killing me, right? Or I want to get a new roof on my house or put a pool in because I would love a pool during the summertime. Those things are, Are the, what I like to call expenses, the free expenses, the things that you Know that that will pay off down the road when you save for retirement. Right.
And I think that a lot of people want to push the, the side of, well, you know, a lot of financial advisors use the, oh, well, you know, you don't need the income now. We're going to make sure it lasts a lifetime for you. That's, that part's easy. Okay, so again, if you sit down with me, we'll go over directly which, what you need and what your expenses are and maybe overestimate things. I always overestimate expenses because I'd rather give you more income than you, than you need to deal with than less income. And I think everybody out there can agree, right? I mean, everyone's probably listening right now going, heck yeah, David, I mean, if you gave me an extra 20, 30k a year, I wouldn't care. I mean, I would love it. Right? So overestimate your income always. And that's what I do with every single client. And if they don't use it, we can reinvest it, you know, or they can spend it. That's, that's the whole point of. Right. Of that retirement plan. But you need to be able to do what you want to do. And I think a lot of the times now everyone wants to listen to one specific scenario or one specific equation. That's not the case, Jim. Everyone's going to have different expenses. Everyone's going to have, you know, different ways of life. Everyone's going to have different things they want to spend their money on. It's my job and a financial advisor's job to be able to help you spend what you want to spend, not tell you what you don't want to spend. Right? So remember that there's one thing you can remember from, from this first part of this episode. Do not let someone tell you how much you can spend. Okay? Maximize your income, understand what you want to spend, and then assess that goal as it's needed. Now don't be, don't be over exaggerating and you know, and say, oh, I'm going to spend $400,000 and I only have 400k in my investment account. No, no, that's not what I'm saying. What I'm saying is, is understand that there are ways for you to monopolize and make sure that you have lifetime income for a long period of time and.
Right. That money never runs out because it's easy for someone to use it and then it's gone. Right? So sit down. I mean, again, give me a call. I'LL look at your portfolio. I'll look at what you have. It's a free consultation.
It's, it's always best to have a second person look at your stuff.
The number is 850-565-1705. Again, that's 850-565-1705. And again, guys, we, you know, it's pretty quick. Make an appointment with me. You can come in right downtown Pensacola or I can come to you and you know, you know, we talk and we look over your stuff and we answer any questions you have.
[00:11:56] Speaker A: So, and again, for those of you who are outside the Pensacola market, you can give David a call as well. 850-565-1705. And of course, he can help you virtually as well. I do want to ask you a question really quick, David. As we wrap up this segment, I'm not sure if people care as much about budgeting. It's more of taking that worry away. Is that part of your game plan for your clients? It's taking that not so much, bud, the budgeting part. I mean, sure, nobody really likes to budget, but it's more about not having to worry about that money or that vacation that you are budgeting for or that you really want to take as you near or are in retirement 100%.
[00:12:35] Speaker C: And no financial advisor wants to, you know, tell them that, that they're going to be able to take more money or that they, they should take more money because sadly, the industry is kind of getting a little selfish. But that's, that's why we do things different. We're out for the client. I'm out for the client. You know, I, I, I can't stress enough how, how important it is to, you know, to be the benefit of the client's needs, you know, and the client is always first. And for you guys out there that, you know, you're hearing this, you should never live a retirement the way that someone else wants you to live it. So for me to sit on here and tell you how you need to be budgeting, what you need to be spending your money on, it's just, it's just the wrong way to do it. Really. We need to be talking about how much you can really, you know, expense and really how much you can create and generate cash flow to, to spend what you want to spend.
[00:13:26] Speaker A: Exactly right. And of course, a great retirement also means being able to successfully audit yourself financially. We can talk about more in depth strategies, but without the right financial audit, you could be in some real trouble. So Give us a call today at 850-565-1705. Again, that phone number, 850-565-1705 or visit retirement planningpipeline.com and schedule that free no obligation consultation with David allow us to inflation proof your portfolio as well to ensure a successful retirement future. All right, stay with us because coming up later, turning savings into retirement power. But up next, building a budget that actually works. This is the Retirement Planning Pipeline. We'll be right back.
[00:14:08] Speaker B: Visit Retirement Planning Pipeline to schedule your free no obligation cop complimentary consultation today. The Retirement Planning Pipeline will return in just a moment.
Welcome back to the Retirement Planning Pipeline alongside retirement planning specialist David Pipes. Here's your host, Jim Tarabokia.
[00:14:34] Speaker A: Welcome back to the Retirement Planning Pipeline. Thank you for making our show a part of your Saturday of on WCOA News Talk 104.9 with new episodes every Saturday morning at 8am and as we dive back into today's show, a reminder, if you like the content we're providing, subscribe to the YouTube page YouTube.com and search Retirement Planning Pipeline for weekly video highlights and special content. Hey April is National Financial Literacy Month in the United States, a month long initiative dedicated to improving financial knowledge, particularly for youth. For nationwide events, educational campaigns and resources focused on budgeting, saving and managing risk. According to the United States Department of Treasury, the 2026 campaign emphasizes digital literacy, cybersecurity and navigating complex technical issues alongside traditional financial skills. And with it being David Financial Literacy Month, we're discussing today creating a budget and cutting unnecessary funds. Let's move on to building a budget that actually works, simple systems that people could stick to for financial success. Awareness comes first. And now that we know where the money is going, we might ask ourselves, well, what do we want to do with it? So let's look at this from a pre retiree point of view. What are some simple but effective ways a person in their pre retiree stage can go about creating and customizing their own budgets that best suits them?
[00:15:58] Speaker C: Number one, before you even look at your expenses, and I say this all the time because a budget has both parts, you need to be able to fund the budget. Okay? When you look at project managing, you look at businesses, you look at cash flow, you look at income, you look at income sources, you look at gross profits, right? That's the number one thing that you need to worry about is, is is cash flow, revenue. You need something coming in if you're not working or if you're working that you know whether adrenal revenue, whatever it is, okay, There has to be a maximization of cash flow.
And, and I say this all the time, but I have to put it to people's heads. You can always worry about your expenses too. But the problem is, is that if you're not at all increasing or even showing to increase your actual cash flow or your income, you're never going to understand how much you really can spend. Because you know, people always say, okay, well I have a stable, I can, I can make it off $60,000 a year.
Well now you have to, now the dependent variable is what, is what you're dependent off of, which is your expenses. So now you're dependent off that $60,000. Instead of increasing that $60,000 and understanding the gaps that you have to, where you don't have to adjust the expenses as much, you can be free, you can live a little bit freedom on it and say, hey, now I've got an extra 20 or 30k wiggle room to where I don't really have to be strict on this. I can understand what I can spend. And I'm like, I have an extra 10, 10 to 10, $15,000 for, for trips that I want to spend on her. And that, the freedom of that right gives that confidence in retirement. I, I meet clients every single day. Actually, matter of fact a client, literally two probably two weeks ago I had a spouse come in and she had came up for a follow up meeting about two months after they came in before and she said, David, I can't tell you the life changing moment that I, that we've had ever since we met you and we started maximizing our income ever since we started increasing what we've got in the bank, even though we might, might have not needed it. Our comfortability, our confidence, the freedom that we have in retirement, it's just, it's a no brainer, David. It's a no brainer. We wake up every morning with a different feeling in mind. And I try to tell people enough, you know, you can always say I only need to live off of this. That is not the way you want to live your retirement. You have to maximize your income first. If you don't spend it, reinvest it. Maximizing your income is the most important part of the retirement plan. So again, if that's a worry, right, and you're worrying about transitioning into income when you retire or if you're retired or you're maybe you're taking distributions from your retirement accounts, that's a big no, no. You need to Give us a call. You need to give me a call. Okay, we'll sit down, we'll go over, you know, your specific plan for you and make sure that you understand how to maximize your income and to make sure that you can live that stress free retirement. Give me a call at 850-565-1705. Again, that's 565-1705. So again, that's 850-565-1705.
[00:19:12] Speaker A: Okay, I'm gonna put you on the spot here. Now, I wrote this question down.
[00:19:15] Speaker C: Give it to me, Jazz.
[00:19:16] Speaker A: You know, let me. Preparing for the show.
I know you have the answer, but I'll put you on the spot a little bit. What is the biggest mistake people make when they're starting a budget?
Most common mistake?
[00:19:29] Speaker C: Yeah, I mean, that's. That there's a couple. There's a couple of them.
[00:19:33] Speaker A: Okay.
[00:19:33] Speaker C: I think the number one problem is people don't understand inflation. I think that people don't understand the cost of goods change.
Right.
I think people can understand that the gas prices in the matter of two months now, right. What we're dealing with now, I mean, it took me 120 to fill up my truck. That's absolutely insane, right? So that budget alone, the variable expenses are what people aren't. They're not. They don't understand it, right? They're thinking to themselves, I need this much money for this amount of time. And, and what they're doing is they're budgeting their retirement income for the same for the rest of their entire life. So from when they're 60 or 65 to 75, 80, 85. And it's like, you don't think in 10 years that it's going to almost double.
[00:20:16] Speaker A: Like, I'm not sure people know what variable expenses or variable income really even means.
[00:20:20] Speaker C: Well, I mean, I, well, to, to make it really, really simple for the audience out there, Jim. And, and, and this is just to make it easy as can be the prices on expenses that don't stay the same over time, okay? That's what a variable means. So if it's a fixed expense, it's something. It's the same expense, right? If, if rent or your mortgage stays the same for 30 years, it's a fixed expense, right, Jim? But if you have a mortgage that changes every single year, every single, you know, maybe rent goes up next year. It's a variable expense yearly. So when people think about that, you have to understand how things change, right? You can't. Your budget is going to Be nowhere near. You're going to have to create a budget every couple months. If you, if you've been making a budget the past six months, you, you've got to make a new one. Right? From six months ago. So I think for people out there and in the audience listening, I think that the number one important thing on your, if you're budgeting or if you want to budget, if you want to make a spreadsheet, I think you need to understand that things change. And I tell every client this and every client that comes in when you meet me, okay, we, I want to talk to you probably every month or two. I mean, that's just a must. I need to know how your life changed. They need to know your expenses. I need to know what they are. What if something big pops up? If you want to take a grandkid somewhere or. There are a lot of things that life's life, life happens. You have to somewhat take personal and people don't want to do this, Jim. People don't want to take personal life and they won't want to combine it with business.
Sadly, in the retirement industry, you have to. When you have long term and you're just plugging money in and you're, you know, you're waiting to retire, you have your 401k, that's totally different. When you're 25, 30, 35 years old, when you want to retire at 50 or above, your whole system changes, Jim. I mean, and for you and for all your audience out there that are thinking to themselves, well, yeah, the system changes, but I'm going to change with it. Well, that's, that's the entire point. Okay, so you have to have someone that changes with you.
[00:22:18] Speaker A: Not stick and understand how to change it. Right?
[00:22:20] Speaker C: Exactly, exactly. Not stick to the same game plan that your financial advisor had you in the same game plan for 20 years.
Right. I hear so many people. Well, he's been with me for 35 years and, and they, they hold that.
They hold that.
I had a client call it one time. I forget what you call it, but it's like a syndrome they have. It's like a, it's a, oh, you know, they care about me. They take me to dinner and you know, it's like, yeah, but then again, you know, your, your, your opportunity cost is $50,000 a year that you're not, you know, so I think that a lot of people get stuck on the
[00:22:55] Speaker A: feeling side, the emotional dependency as well. Something that, you know, a lot of money is always. When money's Involved. And you know this. There's a lot of emotional dependency on your financial advisor. There's a lot of emotion that's involved just with money and finances in general.
[00:23:10] Speaker C: Right. And the personal side gets too, let's just say not involved, but it takes over, it takes over the financial side. People don't worry about the business side because they're so focused on the emotional and personal side. And we're seeing it a lot. And honestly, probably half of my clients that I get nowadays, they've had brokers that they've had for years. Okay, but when you meet me, things change, right? I mean, when you do the numbers and you look at your portfolios now and they have to tell the brokers, hey, look, you know, I respect you, I thank you for what you did for me. But now things are changing and I've got, I've got, I've got to be. Do things for myself, you know, look, you've made your money for these, for this amount of time, but obviously there's things that other people are better at. And, you know, I think that the change in the retirement and the, the math that's involved when you're retiring makes a big difference when you're starting to take money out. We talk about that on recent shows, but you talk about, you know, the importance of, of planning when the money comes out. That's the most important thing. Putting money in is easy. It's just compounding. Right. But taking money out works exactly opposite, and we've talked about that, but I think that people misunderstand the difference it, that it takes to have a financial advisor when you're working and when you're not working, it is a, it's a night and day difference. And if there's not change happening and, and there might be a plan down the road or, you know, things have to shift, and things have to shift very, very, very fast. And sadly it's not, it's not for the financial advisor's benefit. And I'm being very transparent about this. No one, no financial advisor obviously wants the money that they're getting income off of to leave their hands.
[00:25:01] Speaker A: Right?
[00:25:01] Speaker C: Right. You have to understand there's a bias here. So I try, I really tried to get people to understand that you have to look at your best interest in someone that might not say a lot of things to you when you get into that retirement phase. That's, that's the issue. Right. No one wants to talk about what you do with your 41k money or how you take out your IRAs or how to get a guaranteed income because it might not positively affect them. And again, for you listeners out there, that's the one thing that you have to understand is to protect yourself and beat the system for yourself.
Okay? Do the things that you need to do to take care of your retirement. Give me a call, 850-565-1705. Again, that's 850- folks. 565-1705. We'll sit down, we'll go over your stuff and we'll see if we can help you out.
[00:25:52] Speaker A: And again, reach out to us. Get started on on your own assessment today. Just visit retirement planningpipeline.com if you'd rather go that route or as David mentioned, the phone number 850-565-1705 and schedule that free no obligation consultation. This is the retirement planning pipeline, helping
[00:26:12] Speaker B: you take control of your financial future. This is the retirement planning pipeline.
[00:26:19] Speaker C: There's a story.
[00:26:25] Speaker A: You check your account balance and realize you have no idea where your last paycheck actually went. Bills are piling up. That nagging anxiety kicks in and you wonder, how did I even get here? If that hits too close to home, you're far from alone. And April just happens to be the one month of the year the entire country stops to do something about it. I'm Jim Tarabokia for the Retirement Radio Network powered by Amerilife. Financial literacy is so important because it's what you're going to base the rest of your life on. Resource wise. John Ford of CNBC bringing up an obvious but important pointer about money and finances. April is National Financial Literacy Month. It started back in the early 2000s when Congress realized too many Americans were leaving school without the first clue about how to manage a paycheck, a credit card or a financial future.
Fast forward to 2026 and the problem hasn't gone away. In fact, nearly half of us adults still give themselves a C minus or worse on money knowledge. And as CNBC's Bertha Combs tells us, one of the best investments you can give yourself learning how to manage your money.
[00:27:30] Speaker C: You know, we all work very hard for our money and we should learn how to make our money work for us. And I think if you invest in money knowing how to manage your money that it will pay off as you get older, it'll pay off in your life.
[00:27:48] Speaker A: It's about knowing enough to stop making the same expensive mistakes and finally starting to make decisions that move your financial life forward. So here are five quick financial wins you can achieve this month. Review one monthly bill and see if you can cut, renegotiate or cancel it. Follow that with pulling up your free credit report and spot any surprises. Next, set one small savings goal. Even 20 bucks a paycheck counts. Don't forget to learn just one new money concept, like how compound interest actually works for you instead of against you. And maybe the most powerful one, sit down with your partner and or your kids and have one honest conversation about money. No judgment, just a real talk. While Financial Literacy Month won't fix every financial bump in the road you may have, it can be the month you finally stop feeling helpless about money and start feeling in control. So pick one thing. Do it this week because the best time to get smarter with your money was 20 years ago. The second best time right now in April for the Retirement Radio Network powered by Amerilife. I'm Jim Tarabokia.
[00:28:50] Speaker B: Welcome back to the Retirement Planning Pipeline alongside retirement planning specialist David Pipes. Here's your host, Jim Tarabokia.
[00:28:59] Speaker A: This is the Retirement Planning Pipeline. Last week we did part three of a five part retirement plan readiness series. And if you missed that and want to catch up or even listen to previous episodes, go ahead and subscribe and listen to the program and podcast form on Apple, Spotify or whichever platform you enjoy your podcast. If you're listening on the radio side to our radio audience in Pensacola. Thank you so much for joining us this weekend. We really do appreciate that. All right, stay with us because coming up, building financial freedom for tomorrow. But right now it's time to unveil this week's financial wisdom quote of the week.
[00:29:34] Speaker B: And now for some financial wisdom. It's time for the quote of the week.
[00:29:42] Speaker A: And our financial wisdom Quote of the week comes to us from American investor Warren Buffett. And Warren said, quote, chains of habit are too light to be felt until they are too heavy to be broken. And that of course, from Warren Buffett, our financial wisdom quote of the week, David's favorite segment. In fact, he told me that. Right, it's your favorite segment. Quote of the week.
[00:30:03] Speaker C: I love f. First of all, I love Warren Buffett. So that's, that's my number one guy. I, a lot of, a lot of my, my investment strategies are tailored towards him actually. So.
[00:30:15] Speaker A: Well, if you like the content we're providing, subscribe to the YouTube page as well, YouTube.com and search retirement Planning Pipeline for weekly video highlights and special content. All right, continuing with the show, cutting the fat without cutting your lifestyle. Smart ways to reduce expenses without feeling deprived. So let's take a scenario of building a budget. The budget is now built, but it needs to be optimized. So, David, let's discuss the concept of value based spending.
[00:30:40] Speaker C: Well, first, let's go back to that quote, Jim. I love the way that Warren Buffett basically says, hey, procrastinating is not going to help at all. And that's with both procrastinating your, you know, your investing or your, your income, right? You're maximizing your income or even procrastinating fixing your expenses.
And I know a lot of the times, a lot of people like to, let's just say, not, not care too much about things until they're really needed to be done. For instance, hey, look, I, my car needs to be fixed, but I'm going to drive on this for another year or so and I'll sell it or hopefully doesn't break down, you know, you hear all the time.
But I think why that quote so important, especially in the retirement industry, is because if you wait too long for some of the things that affect retirement, it can really, really bring you down. And why I say that is because if you're not planning for income early, right? If you're not planning to maximize your income and you know, you're, let's just say you're down the road, you're retiring in five to 10 years and you're not planning on what, what you're going to need or what you're going to do to, to, to, you know, execute the income that you need, that's going to have a big effect on you when you do retire. And I go, and I say this because, and all the listeners are like, what do you mean? I say this because I deal with clients that have planned, right? Or I have helped plan before they retire and I have clients that I haven't helped plan and I'm fixing their retirement.
And man, is it a difference when you don't plan properly. And, and this is where it gets tricky, Jim, is not everyone knows, everyone might think that they did plan or their financial advisor did plan. So that's where this stuff gets tricky is like you, I'm not saying that everyone's not planning. What I'm saying is, is that a lot of people don't know, right? The viewers out there. And then, you know, the listeners might say, oh, well, I've had a plan for this long, but it might be the entirely wrong plan or the plan that shouldn't have been directed towards what their goal was, right? So I feel like not only is it the procrastination of it, but it's also not planning the correct way.
And I see it a lot. And that's why secondhand second eyes on your portfolio, on your plan, on what you have, you know, what you have thought of in retirement and your income plan and how you're going to take out money. A second set of eyes is the most important thing that I can recommend to anyone because you, it brings light, it brings attention. And what I always say is this, two sets of eyes are always better than one, no matter what, right? So, you know, there's times that I have other colleagues that bring me in. I have other times that I go to another colleague and kind of say something and, you know, and call maybe other clients. And every client that I have teaches me something, teach me something new, right? A new strategy or a new way or a new way of thinking, right? So, and that comes with change down the road. But the one big thing I'll say is, you know, don't, don't wait to get that set of eyes on it. A lot of people wanted to say, well, I don't have to touch my 401k, I don't have to do anything, my 401k, I don't HAVE to touch my IRA, I don't HAVE to plan my TSP, right? My retirement plan's been there, my company's doing the best for me, and sadly, that's just not the way that life goes, right? Because they're planning to invest the money, aspect the funds, right. Of you putting money in. They're not planning for when you want to retire.
People don't understand that, Jim. And again, I'm going to say it one more time a little slower so people understand when they're listening.
When you're putting money into your retirement plans, the companies and the financial advising companies that are advising or managing your portfolios are not caring about when you retire.
They're only caring about growing your funds. Then when you have them, right, they're not planning on the transition for when you retire. I think that's the biggest part, right? Because then tax laws come in. You know, you have to, you know, you have to know how, how, what tax brackets you're in when you're taking the money out, how much you can take out when you want to take it out, how to efficiently do it.
So it's a totally different scenario when, when you're at the time of transitioning. And that's really what I have a passion for and what I specialize in. So again, if you're out there in your listening, you're thinking, I need a second set of eyes, which I'm sure most of you do. You know, it's a free consultation. Sit down with me. You know, we'll go over your things, we'll go over your statements and to see if we can, we can make it better for your goals and your needs. That number is 850-565-1705. Again, that's 850-4565-1705.
[00:35:31] Speaker A: Let me ask you, where do you see the most waste in an average household?
[00:35:36] Speaker C: Oh, man, I see the most waste probably in.
Oh, it, it just depends, man. Yeah, you know, I, I think that, I think, okay, I'm going to get analytical on you. I think the most waste is the opportunity cost.
[00:35:51] Speaker A: Okay.
[00:35:52] Speaker C: I think that people aren't planning properly and they're not growing the funds that they should be.
I think that target date funds and mutual funds and advisors are using models that are. Might be tailored towards everyone instead of one specific person.
I think the opportunity cost of what they can make in the market and what they can make in different opportunities and what they can do for income and rolling up income down the road.
I think they're missing that, Jim. I think they're wasting the opportunity.
[00:36:25] Speaker A: Yeah, yeah, that's.
I mean, when you wait, talk about today creating a budget, cutting unnecessary expenses when you are wasting opportunity, whatever it is, when it comes to that and when it comes to pre retirees and retirees, I mean, you're asking for trouble. Am I right?
[00:36:40] Speaker C: Yeah. I mean, that's. If you have an opportunity, even when you're younger, you take it. Right. So especially when you're older. Right. And there's opportunities to, to increase the funds that you have and compound with a higher fund. As a lot of people don't understand that the role of compounding, when you've got a big lump sum of money and you can make 10% off that lump sum, that's when, that's when things really exponentially grow. Right. You've heard that term where it's a lot easier to get from $1,000 to $10,000 than it is from one to a thousand.
[00:37:13] Speaker A: Yeah, right.
[00:37:14] Speaker C: Same thing difference with, you know, a hundred thousand to a million.
From one, from one to a hundred thousand is a lot different than getting from 100,000 to a million. But 100,000 to a million is $900,000. But you're saying, how does that matter? Well, it's only ten times the amount. Right. 100,000 to one is a hundred thousand times the amount. So the compounding role factors everywhere you look at it. So for a lot of clients, they have to understand that you need to use money to make money, but you also have to understand when to maximize income and keep income separate and then you can maximize your growth. So for you guys out there, and this is one big thing too, a lot of portfolios are not doing this right. They're strictly on one or the other. And I'm sad, it's sad to say that's where the opportunity is missed is with the growth of what money that you do have in take advantage of some of these opportunities, especially when you have an IRA or, and I talk about this all the time, when you have an IRA or you have a 401K or TSB and you're able to use the tax deferred asset and sell securities inside of the asset and not pay capital gains taxes on them, that is a huge advantage to you. And I'm going to go over this in a couple episodes down the road. I could talk about this for days. Okay. But what advisors are taking the taking the right approach on is the fact that these clients and these retirees have the advantage that not a lot of people have. A lot of people are what, using actually bigger money, bigger lump sum, non qualified money after tax money to use, whether they're buying real estate or they're buying stocks and they have to sell it for capital gains. No, you've got a million, $2 million in your IRAs and 401ks and you can actually buy a security and sell it tomorrow and make that money without paying capital gains.
[00:39:02] Speaker A: Right.
[00:39:02] Speaker C: Tell me there's not a more better advantage than that, Jim. Right. So if you're out there and you're thinking to yourself, I'm not taking these advantages, that's when we meet, I mean and that's, that's something that I have a passion for and I love. And I try to tell everyone out there, please, please come in, get a second set of eyes.
I can definitely help you out. Worst case scenario, you walk out my door scot free.
And you know, I can promise you I'll teach you something. So you know, I would love to meet you guys. Give me a call. 850-565-1705. Again that's 850-565-1705.
[00:39:37] Speaker A: And as David alluded to, we'll be talking about tax laws and taxes here in the next couple of weeks. Little teaser for everybody. But again, professional guidance is also key here. So if anything we shared on this week's show makes sense to you and you could use some help with a free no obligation retirement consultation. Don't hesitate to give us a call. We do this show to bring important information to people like you and we love meeting our listeners. Visit retirement planningpipeline.com again retirement planningpipeline.com or call 850-565-1705 for your personalized investment confidence checkup. Coming up next, turning savings into retirement power. Thanks for listening. The Retirement Planning Pipeline. We'll be right back.
[00:40:17] Speaker B: Your retirement questions deserve real and answers. Call 850-565-1705 to schedule your free no obligation consultation today.
Missed part of today's show. The Retirement Planning Pipeline is available wherever you get your podcasts and@retirement planningpipeline.com Great job, Charles.
[00:40:46] Speaker A: Georgia on My Mind Bringing us back inside the retirement planning pipeline this past week in music history. April 24, 1979, Ray Charles sang Georgia on My Mind at a ceremony where it was named the official state song of Georgia. You're listening to the Retirement Planning Pipeline, the show that delivers expert insights, actionable advice and real world financial strategies to help you retire confidently and comfortably. Jim Taraboki here alongside retirement planning specialist David Pipes. Thank you for making this show a part of your weekend. Of course, on whichever platform of your choosing. If you're on the radio side, if you're watching clips on YouTube or listening on the podcast side, we do really appreciate it. All right, final segment of today's show, turning savings into retirement power. How budgeting today builds financial freedom tomorrow. So let's tie today's show together, discussing creating a budget and cutting unnecessary costs. David, awareness, budget, cutting expenses and how it all impacts your retirement planning. How small savings compound over time, redirecting saved money to say, retirement accounts, 401ks IRAs, things like that, paying down high interest debt. There's a specific psychological shift that comes with this, going from being a spender to actually being your own investor.
[00:42:05] Speaker C: Well, and, and I, I consider spending investing too. I mean, when I put money away and I invest, that's, that's, that's an expenditure. And I know I'm investing, but I think of it like that.
So my first thing is, you know, and this is going to go across pretty much to everyone, like Dave Ramsey always says too. But paying high, high interest debt is the first, most important thing and I'm not going to go too much over that because it's very, very simple. Okay. If you have a high interest debt and you're not making more percentage than you have the debt, you need to, need to pay that off first. That's, that's kind of a no brainer. So kind of cross that one off the list. Okay. If you've got a big loan and you know, and it's, you know, above that threshold of what you're making, you need to pay it off. And if you have any of that too, and you have any questions about that, please call. I can definitely help you out with that. If you've got some debt and you don't know what to do on each side, I've had a lot of, I've had a lot of clients come in and ask me, David, what would you do? And I can easily, you know, go on the whiteboard and show you some numbers and make it really simple for you.
Secondly though, and this is where we're going to talk about why it's so important when you're redirecting your saved money to the retirement accounts you want to be able to spend when you retire.
So think about it like this. Sacrifice what you are doing when you're younger, right? And I know it's kind of late for some people that are retiring, but sacrifice what you're doing when you're younger to get what you can when you're older. And when you get what you can when you're older, that's when, that's when we can really max. And if I have any, anything on this episode that I really want to push to everyone out there and every listener out there, you've got to focus on maximizing your income when you retire, right? You've got to take that, take a lump sum of money, take what you made for one case, IRAs, TSPs, any qualified, any retirement account that you have, maybe some CD money, have that money work for you in a cash flow way, have it pay you, okay? And this is what I, I'm really, really big on when I meet any client is the first thing we go on is, hey, we need to make sure that your cash flow is maximizing so that you can spend how you want to spend.
Retirement is a totally different aspect than when you're saving for retirement. And I think a lot of the times people don't have that power in retirement because they don't know how to spend. They don't know how to spend it right? In the transition of 401ks to the income side, that's where we make things simple. When I make things simple and take care of things for You. Right.
And I say we because I really, really specialize on a lot of this stuff. But, you know, I think that one of the key important points is, is that myself and my team, that I'm growing, right? We're always going to care about the client's needs first. The client's income has to be taken care of. For you listeners out there, if the first point of your conversation with any advisor or any financial broker is not how we're going to maximize your income in retirement, then you can cross them off the list. That should be the most important thing. About what? Your retirement is not about giving money to the kids, okay? Not all that. You've saved your butts off for your entire life. You've maximized your accounts. You've, you know, you put money in, you've invested, you've had the bubble wealth years. You've had me bait, you made money when the, when the bull market shined. Now it's time to learn how to use it, okay? And make sure that the right person is teaching you how to maximize and make the most and the most income for the rest of your entire life. Maximize that cash flow going into your account every single month, every single year for the rest of your entire life. I cannot stress it enough. We are missing out, and I feel bad for a lot of the retirees out there because you guys are missing out on such a big term. You're missing out on what you could do in the lifestyle that you can live in retirement because corporations and financial brokerages aren't really giving the education that you need as, you know, as the client. And I had a client of the day, for example, and they just sat down and they said, david, we've never had education on this stuff. They never had education on how to transition or how to use it or what to do with it. It's just, hey, I've got everything taken care of and just give it to me. That's not how it should work, okay? In retirement, education is one of the most important things because you need to understand where your money is, how it's working for you, and how it's giving you cash flow. If you don't have that knowledge, you can't be free, you can't be confident, and you can't live a simple life when you retire. So again, give me a call.
We'll take a second eye on your portfolio, you know, and it's just, I mean, it's a quick consultation, it's free. Like I said, worst case scenario, you come in and you know, you've got everything taken care of. You don't want to work with me, but there is, there's nothing wrong with having a second look on your portfolio. I recommend it for every single person aging into retirement or in retirement. Both are very, very important. Now obviously, if you're planning it is super, super important. But if you think maybe it's too late, you still have time, okay? You still have time.
And people always say, well, David, what's your minimum that you work with? There is no minimum. Guys, please call me.
You know, I'm here to help anyone out, okay? We're not going to say, hey, you have to have a minimum of $500,000 to. That's not who I am, okay? I know some corporations do that.
We're here to help everyone. Please bring your portfolio. Whether it's 50 grand, 100 grand or $2 million. Right. I deal with them all. Okay? I'm here to help out in any way I can. Give me a call. 850-565-1705. Again, that's 850-565-1705.
[00:47:57] Speaker A: Before we wrap up the show, let me ask you this question. How powerful is consistency versus timing the market? Talking today about creating a budget and cutting unnecessary expenses, consistency versus timing the market.
[00:48:11] Speaker C: I think consistency is important, but I think that you have to be consistent with certain things. I think that you don't want to try to time the full market. I think there's a lot of higher up hedge funds and a lot of, you know, big money moving around. That, that kind of takes advantage of certain things that we can't as little guys, right? But I do think there's always opportunities. And I think everyone can say that you always have an opportunity to make money in the market. No matter where you are, no matter, you know, you could be in stocks or, you know, any, anywhere you want, right? But you always have an opportunity to go into security and, and make money. Now you also have the opportunity to, to lose money, obviously, but I think that there's always opportunities to make money. And that's where people also like, that's where the, the education has to come in technical analysis, understanding value, between not value, understanding what certain companies are worth and what they're not worth, that comes a big play.
Being consistent with education is important. Being consistent with knowing your programs, knowing what's going on, knowing what's changing, knowing what companies are changing on revenues, changing profits, changing, you know, contracts with the government. I mean, there's so many things that you need to Be consistent about.
I don't believe that you need to be consistent about keeping the same portfolio. Why? First of all, I don't believe that that's the way to do it at all. I believe that your portfolio should be changing every quarter. I really do. Especially if you are in qualified funds or PSPs, IRAs, what we like to call, sorry, before tax money, that before tax Money and Roth IRAs at Tax Money, any retirement account, you have the ability, like I said earlier, to sell to securities without capital gains.
[00:50:02] Speaker A: True.
[00:50:02] Speaker C: You need to be taking advantage of these. I mean, you know, the market's going to have its dips, it's going to have its ups, but so are stocks, right? So you need to be able to take advantage of, of a lot of those ups and, and, and be able to minimalize risk when you need to. Right? Take your, I always say this. When you're up big, take your gains. Yeah. I mean, come on, why not? Right? Everyone says, oh, I hear it so many times. And my dad even says this, well, Dave, the market's doing great. I'm going to stay in it for a little bit. Marcus, I want you to stay in. The market is doing great.
[00:50:33] Speaker A: Dave.
[00:50:34] Speaker C: Guys, I mean, if you look at the technical analysis and the rules, right, the probability the market goes down when the market does well is higher than the probability of it going back up. And same thing, when it goes down when the market has a fallen period, the probability that it comes back up is higher. That's just statistics. That's natural numbers. Right. Now the percentages obviously vary. You don't know the percentages, but you know that the, the probability shifts, right? When, when things are different ways.
And that's, that's just because obviously investors want to buy a company stock when what, when it's low valued companies don't, you know, investors don't want to buy stock when it's a higher value. So you're going to have a higher probability of sales at the higher price. That's just natural statistics. I think people don't understand that, Jim. People think the market's doing great, it's going to keep going and it's doing great. So the momentum is going to carry it.
That's how traders lose money. I mean, you know, and then that's. Sadly, that's just not the way to look at it. Right. You have to take your gains, especially when you've been hitting this bull run for the past 10 years, take your dang gains and put them somewhere, split some of them somewhere safe and maximize your income. Guys, maximize your income and make sure that you're making the most out of your portfolio. And again, I don't want to get too nerdy on everybody, but you've got to make sure these things are taken care of.
Sit down, May. We'll go over these, have a second opinion on your portfolio and go over the true numbers, the true facts, right? Go to the whiteboard, put numbers up, understand backtesting, understand certain things, statistics, probability.
Use the math instead of the finance. And again, that's my biggest thing is use the math, not the finance. Again, give me a call. 850-565-1705. Again, guys, it's 850-565-1705 and we'll take
[00:52:32] Speaker A: a look at your portfolio and here's the good news. It's never too late to start and we love hearing from our listeners. So again, if you have any questions, visit retirementplanningpipeline.com also give David a call. He mentioned the phone number there, 850-565-1705 or visit again retirement planningpipeline.com and if you missed any part of today's show, we dispersed a lot of information today. Don't forget to subscribe to the program and podcast form on Apple, Spotify or wherever you get your podcast. Subscribe to the show on YouTube. Search Retirement Planning Pipeline on YouTube for clips and special content as well. Next week we conclude conclude our five part series of catching up on your retirement plan with considering delaying retirement or taking part time work. Is it optimal? We'll talk about it in the meantime. Thanks for listening. Have a great rest of your weekend. This is the Retirement Planning Pipeline and we'll talk to you next week.
[00:53:24] Speaker B: Thanks for listening to this week's episode of the Retirement Planning Pipeline, the show that helps you take control of your financial future. Whether you are five to 10 years from retirement or just getting started. Retirement planning specialists Stake David Pipes has the strategies, tools and experience to help you make the most of your nest egg. Take control of your financial future and get started today by visiting retirementplanningpipeline.com and if you missed any part of today's show or want to catch up on past episodes, be sure to subscribe to the Retirement Planning Pipeline wherever you get your podcast.
[00:54:02] Speaker A: Foreign.
[00:54:07] Speaker B: Not affiliated with the United States Government, Amerilife agents do not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or specific result. All copyrights and trademarks are the property of the respective owners. Amerilife assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness, timeliness, or the results obtained from the use of this information. Charles David Pipes and Steven Zarek are individually licensed and appointed agents.
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