Jacob: What do the wealthiest retirees do differently from everyone else? That's what we're gonna talk about here today on the show because I want you to be in that category of the top 1% of retirees, and what's different about them is it's not just about having more money. It's not just having more money in the bank account or more taxes saved or whatever the best strategies are they're trying to do. It's more than that to them. It's how they think, plan, and live in retirement.
So I wanna share these different concepts and ideas with you because as a retirement planner, someone who works with hundreds of retirees and has built plans for hundreds of retirees, I want to share with you what I see because I get to see all kinds of people and talk to every type of person out there, different personalities and ideas and thought processes and goals and desires, and I've been able to see what is different about those who truly live and enjoy an intentional retirement. So if I haven't met you yet, my name is Jacob Duke. I'm the host here of the Retirement Answers podcast. I also own a wealth management company called River Tree Wealth, where we help people that are 50 or older plan smarter so they can retire better. Okay.
The first thing that I've observed that sets the 1% apart from everyone else in retirement is their mindset. They had this mindset of abundance, not scarcity. Now here's the problem. Whenever I talk to most retirees, it's how do I make sure I don't run out of money? It's how do I make sure I save on taxes?
It's how do I make sure my investments aren't going to go to zero and I lose everything? That's the biggest questions on everyone's mind, but the top 1% of retirees are asking completely different questions. They're asking, Jacob, how do we live a life of intentionality? How do we make sure we leave a legacy to our family that's not just monetary? How do we make sure we impact those around us in our communities right now today in a positive fashion, either with our money or with our time?
Jacob, how can we make sure we actually enjoy retirement as opposed to always worry about everything that comes with it? Those are the questions that the top 1% are asking themselves as they come to me. They're not asking those questions of how do I make sure I don't run out of money? Because they know they're not gonna run out of money because they're gonna have a plan in place. They're gonna have all of the right things and strategies that they're gonna be doing, and they know that running out's simply not an option.
So that's the first thing, is their mindset is completely different. It's almost the exact opposite of the other 99% of folks out there. They know that all of the basics of retirement, the strategies, the ideas, the actual money part of it, that's table stakes. That's gonna happen. We know we're gonna be successful there.
But to them, success is not about having more money. It's not about accumulating more assets or things or stuff. What they've done is they've shifted their mindset to say, I don't care about how much money I do or don't have. I want to make sure that I use my most valuable resource, my time, in such an intentional way that I get to be fulfilled when I'm on my deathbed one day and I can look back over my retirement and say, yeah, that was a life well lived, as opposed to, man, I'm glad I saved an extra $30 on taxes because those Roth conversions. We want to do the math and all the strategies.
I know I talk about those things all the time. We've got to do those right, and in some sense, those are just table stakes. That's just required in terms of retirement planning in general, but that's not why you retirement plan. You do the tax savings, you do the investment strategies, you do the social security optimization, so that you can actually get to what's really important, which is spending your time in ways that you value and you would be fulfilled if you spend it in that way. So that's the first thing.
These top 1% of retirees have this abundance mindset rather than a scarcity mindset. The second thing around mindset is they have this clarity of purpose. They've got a clear vision of what retirement is for them. It's not just not working, it's what am I doing next? So they're not focused on what they're retiring from or stopping, they're really more focused on what are they going to do or what are they gonna start doing.
And so it's not so much of this, I am trying to escape work because I hate my job and my boss is terrible and mean to me and they won't let me take a day off. It's, oh my goodness, now I'm going to have time to go offer more time there at their local food bank or be able to spend more time with their family that they don't live close to. They can actually travel and be there more often, or maybe just spend more time with friends or picking up new hobbies that they might enjoy. There's a clarity of purpose. Like they understand what they're going to be doing, they're not retiring from something, trying to escape it, they're really retiring to something and trying to go enjoy it.
And the final thing around mindset is this, the top 1% of anything, whether it be in sports, business, life, or retirement, people that are the top 1% operate out of a space of confidence, not fear. So confidence instead of fear is what actually is driving their decisions. They don't just hoard cash because they're scared of the environment they're in or who the president is or isn't or what the current investment markets look like. They find a way to make money work for them, whether it be in the traditional sense of how they're making their money work or they find a new way to make money work for them. But the key is they don't make decisions or operate from a place of fear.
They have confidence because they have a strategy, they have a plan, and it's written down, and what that does is it frees them up to go enjoy life. And here's the big takeaway. You don't need $10,000,000 to adopt this top 1% mindset. You just need the same intentionality. You need to understand what your vision is, what your goals are, what your purpose is in retirement, what are the things you're going to do and why you're going to do them, and what would be a fulfilling life in retirement for you, and how does creating a clear plan around that actually give you confidence so that you can go do those things rather than constantly worrying about money and operating from a fear based perspective.
The second thing that the top 1% of retirees do is they remain investors. Now what does that mean? Doesn't mean just buying a mutual fund. It means their mindset around investing is this. I have to make more money over time because I know there's so many things that could jump in our way.
Things like inflation. Maybe we have health concerns that cost more money. Maybe we have life events that are completely unexpected, that require more capital, whatever it might be. They know they have to keep investing to maintain their lifestyle, and they can't just be savers or super conservative and take all their chips off the table. They've got to keep that same mindset.
What got us here was investing. We're gonna keep doing that. We're gonna do it in a thoughtful way, and we're gonna have a plan built around this. So what does that mean? That means they're gonna be diversified.
They're not gonna have all their eggs in one basket. Even if they worked at the best company in the whole world throughout their entire career, they received plenty of stock options. They got a bunch of company stock. Guess what? Maintaining and owning just one stock could be extremely risky, and it could put your retirement in jeopardy.
The second thing the top 1% do in investing is they invest in a tax aware approach. So they're thoughtful around taxes and what that looks like every single day, every single year, and how they invest their money plays a big role in that. So a lot of people think that when it comes to retirement or anything around money, you have investments in one hand, you got taxes in another hand, you got Social Security in another hand, and kinda you can make all these decisions separately of each other, and that's completely wrong. That's what most retirees get incorrect. A lot of people think they can invest a certain way and then do a tax plan over here on the side that helps them save taxes, but what they don't understand is that all these things are completely dependent on another.
You can't do a Roth conversion strategy if you don't have a good strategy for Social Security that's mixed in with that Roth conversion strategy, and even then within that Roth conversion strategy, you gotta be able to invest the money correctly within each account type so that you can actually benefit from the Roth conversions themselves. Everything is a cohesive, holistic approach when it comes to retirement planning, and taxes play a big role in that. So whether that be through Roth conversions or donor advised funds or establishing the proper trusts that need to be established for tax savings and future tax savings for the family, these things are important, the top 1% pay attention to these things and know that it is a comprehensive approach. You can't silo or bifurcate all these things out from each other. They all are codependent on each other.
Another thing that the top 1% do is they actually pay for advice. When was the last time you saw anyone who was really wealthy actually doing something on their own? It doesn't happen, right, because they know that the most valuable resource they have is not their money. It's their time. The top 1% rarely do things for themselves.
What they do is they buy back their time. In fact, there's a book by Dan Martell, which I really love. It's called Buy Back Your Time, and Dan Martell is a businessman. He's a multimillionaire, and his businesses generate hundreds of millions of dollars a year, and in his book, Buy Back Your Time, he explains that time is the most valuable resource that any one of us have, and the best way to use that is to use it on things that only we can do. So here's an example.
Right now, I'm sitting here recording a podcast, so you can listen to it. Guess what I'm not going to do? I'm not going to edit it myself. So yeah, I mess up every now and then on this thing. You don't hear that right, because we edit those things out.
But what's going to happen is I'm not going to edit all those mistakes out myself. I'm going to pay someone to actually edit this for me so that you can then listen to it. And guess what I'm gonna do whenever that person is editing my podcast? I'm gonna go push my daughter down the slide again at the house because that's something that only I can do. Only I can be dad to her, and only I can be dad interacting with her and pushing her down the slide or swinging on the swing or playing in the yard.
I can't hire someone to do that for me to replace me as dad, but I can definitely hire someone to replace me as podcast editor. And so whenever we think about this idea of buying back our time, our time is our most valuable resource. So why would we waste it on something that someone else can do? Now I want you to think about this around your money. Why would you waste your time researching the best tax strategies or investment strategies or worrying about this stuff constantly whenever your family is out there saying, hey.
Can we do, like, another vacation or something? Or can we go on that extra trip? Or can we just go on a hike really quick instead of sitting behind a computer researching all those things? Like, please, can we do that instead? We can't do that without you because you're our dad or our husband or our wife or whatever position you hold.
That's what's way more important. Right? You're the only person who can fulfill that position within your family structure. What you can do is you can replace retirement planner, you can replace CPA, you can replace tax planner, and buy back your time by hiring those people that are, quite honestly, going to do a better job than you because they're in that world every single day. I'm not saying you should hire me, I'm saying you should hire everyone, estate planners, tax advisors, financial advisors, whatever it is, whatever you need, attorneys, go pay for them because it is way more useful for you to pay for that and then go do something with your family or with your loved ones that you have to be there for in order for them to get the same result out of.
And here's how the top 1% think of this. They think of paying for things as an investment so that they can buy back their time. They don't think of it as a cost or something that hinders them or money out the door. They think of it as time put back in their little piggy bank of time that whenever we spend time, we don't get it back. So that's something different that, again, very different from most people.
People pay for what they don't want to do, and they go do what they want to do because they understand time is the only resource we cannot get back. We can always make more money, but we cannot earn back time, and I want you to focus on that as well as you think about retirement. Stop waiting around. Stop wasting time. Go and do what you've been waiting to do.
Now's the time. You're not gonna get today back. The third thing that the top 1% of retirees do is they design the lifestyle they truly want to live. They're intentional about their spending. They spend on experiences and relationships and health.
They don't just buy stuff. And so what they're doing is they're being intentional around what's important and why that thing is important. They think about legacy, not just in a way of financial legacy for their family. They wanna think about how can we leave a legacy of hard work or how can we leave a legacy of education around money to our kids and grandkids? How can we leave a legacy to our community, whether it be through a charity or through a church?
And the thing about legacy is it starts right now. It doesn't start when you're gone. How you live today is a legacy and the thing that people will remember about you. These top 1% of retirees, they understand that, and they say, I'm gonna start doing the thing now, whatever that is. I'm gonna make sure that I educate my family.
If I am very wealthy and I wanna leave them money, yes, can leave a financial legacy, but what's more powerful is leaving a mindset legacy. Hey, money is simply a tool. It's something that is to be used to buy something else. It's not meant to be had. It's meant to be used.
So money's just a resource to the top 1%, and then what they value more is actually showing and telling the next generations how to use that resource rather than just giving them a bunch of money one day. So the takeaway here is this. Retirement isn't like this end goal. You haven't made it once you get to retirement. Retirement is an intentionally designed life.
It's how the 1% actually make it meaningful. And the final thing that the top 1% of retirees do is they actually have strategies. They actually have written down things they're gonna do. They understand their plan. They have a plan that's written, and so they can do things like Roth conversions and make sure they lower their RMDs because, again, they're focused on all these important tax and investment things, but they're not the end goal.
The end goal is so that they can go live the life that they've designed, but these are table stakes. They have to do things correctly, so they optimize their income buckets. They know which accounts they're gonna draw down first and why. They have a written income plan because most people don't. They truly don't.
So they understand where they're gonna pull money from, when they're gonna pull it from there, how correlates with their Social Security strategies or their other tax strategies, and they're also going to be auditing all of this frequently. They're gonna understand where their money's going and why it's going to those places, and if it doesn't align with their vision and their purpose, they're going to change or shift or move in a different direction. And perhaps one of the biggest things the top 1% do is they have a freedom budget. They are able to spend with confidence, not guilt, because they've tested their plan. They understand their plan.
They know what's happening and why. They can spend that much money every single month or every single year with complete confidence that they're never going to run out, and that ties back into this abundance mindset. They're able to spend and enjoy their wealth with confidence and not worry or guilt. So these are just the observations that I've seen of people who really enjoy retirement compared to those who don't. And I've talked to hundreds and hundreds of people just like you, and guess what?
It's the common theme over and over. It's having the abundance mindset. It's having a written plan, understanding what they can spend every single year. It's understanding what their tax strategies are and why they're doing what they're doing in the order in which they're doing it. And then the final thing is being intentional with their time, their money, their resources, and leaving a legacy that's beyond money.
It's not always about money to these people. It's about so much more than that. And so I want you to think about your life. What are you focused on? What are your worries and fears?
And what is your mindset? Start working on that and improving it if you need to. Alright. If you've got a question and you wanna have it answered here on the show on the next Friday q and a segment, you can click on the link down in the description where you can upload your question using that quick little form, and I would love to have it answered here on the show. Thanks so much for tuning in to this week's episode of Retirement Answers.
I look forward to talk with you again next week. Hey. It's Jacob again, and I wanted to remind you that nothing discussed in today's episode is meant to be financial, legal, or tax advice. Retirement Answers is for educational purposes only. Thanks for tuning in to this week's episode.
I look forward to talking with you again next week.