Like, you can't waste away your life. You have to be focused on what's gonna get you out of bed and give you purpose in life. Welcome to the Retire On Time podcast. I'm Mike Decker here with David Fransson. This show is all about getting into the nitty gritty and not just talking about the oversimplified advice you've heard hundreds of times.

Text your questions to (913) 363-1234, and we'll feature them on the show. As always, this is not financial advice, just information, education. Do with it as you will. David, what do we got?

Yeah. Hey, Mike. I lost my job no matter who they worked for. I think I can afford to retire, but I don't know what I don't know what to do. How would you build a plan that allows me to go back to work every now and then?

K. So the last thing you want is lifetime income in this situation, and here's why. If you're going to go back to work

Okay.

Then why would you turn on lifetime income from an annuity, which isn't necessarily a bad thing? Annuities are just tools. I know I write about it in the book and complain about it and and all of that, but it's it's just a tool. But let it's the most basic tool that I see. So lifetime income would be terrible for this situation, and the reason is if you go back to work, now you're earning income, and you've got this lifetime income.

Your taxes are higher than needed. I mean, it's just it's kind of an inefficiency.

So what you need, potentially, is to be able to say, okay. Maybe you need, like, a two year rolling two to five year rolling kind of reservoir or bear market reserves. So the bear market reserve is just in case the markets go down, how do you take income?

Okay.

Your plan needs to be very dynamic with short term reserves to just bridge those gaps. But if you don't know what to do, except for work, you should not retire. And the reason is work gives you purpose, gives you fulfillment, it connects with other humans. It hopefully does. Hopefully, it's a good enough work environment.

So if you take a year off and then go back to the workplace, that's a really healthy thing to do. If you become a consultant and take a month work here and a month's worth of work there, whatever it is, that's a very healthy thing for you to do. Don't retire because everyone else is sitting on the golf course getting drunk and and wasting away their life. Mhmm. Not saying all golfers do that, but it's it's the cliche analogy.

Sure. Or you go out on your boat and get drunk on the boat, which you're not supposed to do for boating license laws, but Right. People do that, and just waste away your life. Like, can't waste away your life. You have to be focused on what's gonna get you out of bed and give you purpose in life.

Because if you're not getting a healthy amount of oxytocin, serotonin, and dopamine Uh-huh. You're going to feel sad, lonely, and depressed. Work, when you accomplish the task, when you hit the deadline, when you close the deal, you're getting oxytocin, you're connecting with people through all those interactions, and you're getting hit dopamine because of that win. Mhmm. And then when you don't win, it's sad, but that's okay.

It's good to have a few losses in life too. It's good to have a few, you know, difficult moments. Causes you to work. The oxytocin is that sense of happiness that you're enjoying, you're laughing with people, that you're connecting with them. All humans are hardwired to connect.

We need to connect. And you don't connect by doom scrolling on Facebook and on Instagram or TikTok or even YouTube or what other oh, Reddit's really bad for the doom scroll

Right.

Or x or wherever.

You're not gonna connect with anyone. Uh-huh. There's a reason why depressions have skyrocketed, the the depression rate. So, like, the last thing, if he says I or she says, I I lost my job and I don't know what to do Mhmm. Find another job.

But position your portfolio that you can bridge gaps regardless of market conditions. And that can just be having a couple of treasuries that roll over every now and then. Or having a having a couple of MYGAs that just you it's at a fixed rate, a year or two, or whatever it is. Maybe not so much for MYGAs for this person because they would need it now. Maybe some buffered ETFs.

Maybe a CD ladder that just kind of rolls over, what it might be. But you wanna have, like, one or two years of income that you can that you're you're hedging against. So if you go two years without a job, you know, sucks. Uh-huh. But at least if the markets didn't go down, you're you're accentuating those losses because you were surprised.

That's that's really it. Is building a more dynamic plan instead of these ten, twenty year long income plans? Mhmm. It's like, oh, I wanna go back to work. Okay.

Great. What's the salary you think you you will easily be able to make? I think it's, you know, 60,000 or a 100,000 or 30,000 or whatever it is. Great. Let's put that in here.

Let's say you're gonna not work for one year, maybe you'll you'll work sooner than that. And then next year, gonna start that salary and we'll do it for another three years and you'll keep working. Great. And you solve it all in a very dynamic way, so it's this happens, then you do this. Mhmm.

If that happens, then you do that. Mhmm. That simple. Very a b I mean, that's binary?

Yeah. Binary would be, like, what, two two different

Simplify it down to two two different ways you're Yeah. You're gonna approach each year. Yeah. But keep it open. Liquidity is your friend.

Flexibility is your friend.

You might consider if you are, like, 60, 65 years old, if you do want some security, you could ladder things out, but just keep it within the buckets. So let's say you ladder some things out like structured note in an IRA that pays out into the IRA. And so if you need it, then you're just taking the income. And if you don't need it, it's just growing the the dollar amount in the IRA. You could do stuff like that as well.

Okay. But you don't wanna necessarily turn on income or force distributions because if you work, then it's tax inefficient in that year. And if you're not working, well, it's there, but it's just that's rigidity when you need flexibility.

Yeah. So this kinda sounds like if you are gonna work whether or not you're going to work is going to affect your tax situation. And so you you need to you you don't wanna have a retirement plan that assumes you that you aren't gonna be working and then suddenly you are, then it's kind of all messed up, right, your taxes.

Well, here's where it boils down to. I've had people come in and say, well, should I keep working? It seems tax inefficient. Uh-huh. Because it's getting in the way of the iron rod conversions they may want to do.

It's like, no, you need to work. You've told me you would be depressed if you don't work. Or people will say, well, you know, think about going back to work or do this or that or It's just life's full of surprises.

So if if you're already hinting at you wanna work, you probably should continue to work until you have figured out how to build what I call the purpose portfolio, and that's just how are you going to spend your time in retirement that allows you to get oxytocin, serotonin, and dopamine in healthy levels. And here's something else to consider, just just for what it's worth. Alright. Okay? If you have unhealthy amounts or feelings of it's called blasts.

So bored, tired, angry, stressed or blast. No. It's a sorry. I can spell blast, b l. Yeah.

Bored, lonely, angry, stressed, or tired.

Okay. Okay.

If you have high levels of that in your life, you're more prone to anxiety, depression, and addiction. The last thing you want is to start an addiction in retirement, and you don't choose addiction. The addiction will choose you, and it will become a burden for the rest of your life if you allow yourself to be bored, not have a job, not be pursuing another job, and just say, well, guess I'm retired. I'll just sit around and watch the news. Whether you're a was it Fox and Newsmax kind of person or you're a CNN, MSNBC kind of person.

Mhmm. Alright. Those are the two camps.

Alright. If you watch cable TV, right?

It's just rage. You're just gonna be full of rage if you spend your time trying to waste it away and stay busy with noise Yeah. And not be productive with your individual needs. Right. So, yeah, don't do the traditional plan.

Create a more dynamic plan that allows you to hop in and out of work regardless of market conditions, regardless of the employment environment, and so on. That's all the time we've got for today's show. If you enjoyed the show, tell a friend, leave a rating, and subscribe to us wherever you get your podcast or especially on YouTube. That's where the best stuff is. As always, just go to retireontime.com to catch, this show, other shows, but also the resources, the tools, the planners, the workshops that we do, all of it is found on retireontime.com.

Thank you for spending your time, your most precious asset with us today. We'll see you in the next show.