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Welcome to How to Retire on Time, a show that answers your retirement questions. Say goodbye to the oversimplified advice you've heard hundreds of times. This show is about getting into the nitty-gritty so you can make better decisions as you prepare for retirement. Text your questions to 913-363-1234 and we'll feature them on the show. Don't forget to grab a copy of the book, How to Retire on Time, or check out our resources by going to www.retireontime.com.
Are you gonna not retire because of this politician? Like, you can't live your life based on political events. You can't base your life around these potential catastrophes. Welcome to the Retire On Time podcast. I'm Mike Decker here joined with David Franson, my colleague.
Mike:We're gonna be answering your questions. Text them to (913) 363-1234. And remember, this is not financial advice. David, what do we got today?
David:Hey, Mike. What's a retirement regret you saw in 2025?
Mike:I think the biggest regret that I saw as a consistent pattern was the political fear for a lot of people. And it wasn't necessarily the political fear against Donny Jay Mhmm. The big Trump
David:Okay.
Mike:Whatever you wanna call him, Uncle Don. Yeah. Half the country were incredibly scared of him, and many people delayed their retirement because they feared he would tank the economy. The other half of the country seemed to be so excited about him that he was gonna solve all of, you know, all of world's problems, cure cancer, and Everything between them. Kiss every baby.
Mike:You know, politics kissing babies and and handshakes or something. Anyway, they were so excited. They said, well, there he can't not do right, and so they kept all of the money at risk Oh. Thinking that it would just grow and they wouldn't have like, they'd say, oh, it's risk, but, you know, risk is relative, and we don't need to be worried about that because he's he's got it taken care of. Mhmm.
Mike:That's a concern to me. And the reason is it's not principle based in that you are basically saying that right now in this period of time, I am or the market is the exception to the rule. Nothing else could happen. And let's just say for a moment that he is a wonderful president. I'm not taking sides here.
Mike:Let's just say he is
David:Okay.
Mike:The most incredible president possible. That'd be great. There still is the probability of a geopolitical event out of his control. So in 1990, Iraq invades Kuwait. We didn't have I mean, you could argue the CIA was probably involved in some way or another, but that was an external thing that happened that affected the price of oil, which sent shock waves all over the world, and the markets tanked in 1990.
Mike:K? In 1987, the markets tanked because, why? There was an issue in trading and how it was done electronically with these stop losses and so on that cascaded down really aggressively, and people got very, very scared to put a lot of fear in the market. In 2000, I mean, you wanna love Clinton or Bush, it wasn't you could argue they had an influence with this, but the the .com bubble was just incredible. A lot of money was put into the infrastructure, and then it just blew up.
Mike:Mhmm. It wasn't necessarily about good or bad policy. It it was about things beyond their control. So and we could talk about the two thousand eight financial crisis. I think that was more a lot had a lot to do with policy, the loosening of regulations, and so on.
Mike:People got greedy, but that's another conversation. But my point being is, if if President Trump is perfect, things can still go wrong. Now let's say he's not perfect. Well, then obviously things can go wrong. The point being is, if you live your life and your portfolio based on what you think a politician can do or even a political party can do, you're ignoring many other factors that are at play.
Mike:Uh-huh. And so for those that feared the president, I I my mind goes to you you don't you don't have a good plan. Because if you have a plan, you're prepared. You know, you kind of you know what to expect. You know, one plus one equals two.
Mike:You've got your spreadsheet out, and then you've got your strategies. Your strategies are what you do if x happened or y has happened. So let's just play a scenario.
David:Okay.
Mike:Okay. You've got a plan.
David:I have one.
Mike:K. One plus one equals two. The numbers work out. You can retire on time and stay retired based on your projections. That's about as good as a plan gets.
Mike:Right? You can't predict the future.
David:I'm happy.
Mike:K. Now Donald j Trump, the president, now does something incredible and the markets just take off. Alright. Your plan looks better than it is. You feeling good.
Mike:Right? Uh-huh. Was that a part of the plan? Yeah. You you wanted to grow your money.
Mike:You wanted flexibility. You wanted growth. You had some of your assets for there, and now you know how to take income. You know what to do with your tax minimization because the markets went up great. And that's most people's plan, by the way.
Mike:It only really works when the markets keep going up. Now markets go down. What do you do?
David:Yeah. What does my plan say
Mike:to do? Your plan say to do? See, that's the thing is if you have a plan for the good and the bad, you don't delay your retirement or how you wanna spend your time because of a politician. Because really, when you delay your time, you're you're delaying you're you're not spending your time, your most precious asset, because of some politician, you're giving them all the power over your life. That's not a way to live.
David:And your retirement's probably gonna be longer than the politician is in is in office. Right?
Mike:Yeah. Eight years. Yeah. The president's in office. I mean, a senator, don't think can have that much control over over the senate.
David:Yeah. Yeah. One single one wouldn't. So yeah. So if we have that in mind, like, hey, my retirement's law is gonna outlast that that party or that that politician.
Mike:So there are things you can do. For example, you could say, I just don't wanna deal with it, and you do an eight year ladder or in this case, a four year ladder because Trump's only in office for four years, so three more years. So you just you buy CDs, treasuries, or or MAGAs, multiyear guaranteed annuities, whatever you want. Can What a few buttons
David:of MAGAs? Is that a can you buy any of those? I don't know. Sorry. I couldn't resist.
Mike:Let's see. Multi annual guaranteed annuity. That's a manga. Okay.
David:There we go. Alright.
Mike:Yeah. Are there any insurance companies opening endorsing them? Probably not. That's no reason to have that kind of
David:Yeah.
Mike:You know, PR nightmare. No. No. No. But but you could ladder it out maybe a few years past his presidency
David:Mhmm.
Mike:Just to be safe
David:Mhmm.
Mike:And then you retire. I mean, in 2008, I can't think of a single fight or insurance company that went under.
David:Oh, right.
Mike:I can't think of financial institutions and banks that went under and needed bailouts, but the insurance companies, which have very strict regulations, very strict like, an auditor is rough on them Mhmm. Because they have made many promises. They have to prove that they can keep those promises.
David:So is it would it be safe to say can you say that it's safer then to put more money with an insurance company versus a bank, or can we not say?
Mike:I don't think we can say that. And the reason is the insurance companies have their own version of risks, banks have their own version of risks
David:Mhmm.
Mike:And institutions have their own versions of risk. So I don't have the legal capacity. I'm not an attorney to really compare the risks. Mhmm. But if I were a betting man, I would I would personally favor Ford insurance company that was A rated, and I understood the insurances that they offered.
Mike:Okay. Let me be clear about that. Yeah. The ones that just offer, like, the annuities, for example, lifetime income or, you know, really boring, almost teetering on asset based or investment kind of products. They have a lot of business in that.
Mike:I'm good. If they are really focused on fire insurance in California, I probably wouldn't go with them. Right. So you have to kind of understand which insurance companies are out there, what do they offer, what are their financials, why are their financials the way they are, do they have other assets or resources? How are they like, those are things that you you don't look at.
Mike:But for the ones that are boring insurance companies, I think they're great. I mean, just here's a simple example.
David:Alright.
Mike:If there was a panic and you needed your money, would you go to a bank first which has your money liquid, or would you go to an insurance company that's gonna have some sort of surrender penalty?
David:I guess I'm going to the bank because I I wanna be able to get it right now.
Mike:And there's no penalty. Yeah. Yeah. Unless it's like a CD, and that's like a very small penalty anyway. Yeah.
Mike:So if you look at those two institutions, those two businesses, I mean, one kind of has more of a liquidity issue. That's why they call it a run on a bank and not a run on the insurance company. Uh-huh. The insurance companies protect themselves with those penalties on purpose. Yeah.
Mike:Now they have their, you know, their their contingency plans and so on. I'm not saying they're perfect. I'm just saying that they're all structurally different. So if if going back to the original the regret of 2025 Yeah. The most consistent one I saw was people making decisions because Trump got elected.
David:So they could have said, oh, I'm gonna put more money in cash or more in CDs, like, less risky?
Mike:And let's play this out. Let's say you hate J. D. Vance, the vice president, and let's say he gets elected. You're just gonna not retire for another four years and hope he gets out of office?
Mike:And then let let's say he doesn't get elected, and the candidate of your choice, Republican or Democrat, gets elected, but JD comes back and wins, and then you hate him. Are you gonna not retire because of this politician? Like, you can't live your life based on political events. You can't base your life around these potential catastrophes. You've gotta build your plan.
Mike:One plus one equals two. That's it. Then you have to have multiple layers of strategies to understand what you're gonna do and when you're gonna do it so that you can live your life. Because the one thing I can say, not a guarantee because I can't guarantee, you know, anything in finance, really, but it's pretty high there's a high probability here that you're not gonna earn 6% on your portfolio every year for the next thirty years. Some years, it's gonna be better.
Mike:Some years, it's gonna be worse. Your plan says one thing. Are you able to maintain your plan through the strategies available to you? That's that's where I think people miss it because the strategy they're given is keep it in the stock bond fund portfolio and hope it works out and take around 4% each year. There's no control.
Mike:There's no strategy. It's just riding it out. That's a very scary thing that makes sense why people would then not want to retire or delay it and just try to grow their assets a little bit more, just to have a little bit more of a buffer, a little bit more extra wiggle room. So I I get why they do that, but it's because that people are glossing over strategies and saying, here's your product, a portfolio, and you could take out some income. Or they'll say, ah, the heck with it.
Mike:I don't need to be worried about it because I bought this lifetime income stream. Well, got inflation. Yeah. That's a concern. So, yeah, the flexibility I I think it's it comes down to there are, in my opinion, too many financial advisers offering a product, which is ultimately, again, based on based on my definition, a oversimplified product, which is one singular strategy that's intended to solve all of their problems.
Mike:I don't think it works that way. You don't need to be a financial professional by the time that you retire, but you kinda wanna have, you know, your plan a, plan b, plan c, or your strategy a, strategy b, strategy c. Yeah. I think that makes sense.
David:Right.
Mike:What do you think that I missed?
David:I think that's probably the the main one you saw then in in 2025 is basing your basing your your plans on, you know, what happens in Washington or the
Mike:Can I give you number two?
David:Yeah. What's number two? What's this?
Mike:Number two, Too aggressive of tax planning before the one big beautiful bill.
David:Oh, okay.
Mike:So almost every financial adviser's opinion and most investors' opinion was in 2026, taxes were gonna increase. We were gonna go back to 2017 levels. The tax bracket dollars were gonna go down, and the percentages were gonna increase, hitting every tax paying citizen twice. So people were getting very aggressive with their IRA to Roth conversions, like way over the top aggressive.
David:Mhmm.
Mike:And now it's not an issue, they go, oh, maybe I was too aggressive. Yeah. So Yeah. You have to embrace this thing called balance, that you want to kind of ride the strategy or or lean into the direction that favors you, but knowing that things could go in in any given direction.
David:Okay.
Mike:That you wanna dynamically balance between aggressive tax minimization and preserving your assets because the more money you have, the more it can grow. And people miss this. Well, but if it grows tax free in the Roth, for example, then it's not an issue. Yeah. But if you convert, let's say, at 32% or 24%, that's 24% that leaves.
Mike:You have 24% less money in your Roth. Growing less money is harder to do than growing more money. Mhmm. And that has a compounding effect. These are things you have to be aware of.
Mike:So yeah. Number one is delaying because of a politician, and number two was getting tax planning wrong, getting too aggressive out of fear of something that that probably could have happened, but it didn't. Now that's all the time we've got for today's show. If you enjoyed the show, consider telling a friend, leaving a rating, subscribing to us, YouTube, or wherever you get your podcast. And most of all, go to retireontime.com.
Mike:That's www.retireontime.com for the book, the workbooks, all the resources, the calculators that we've got, and workshops. Join me for a live workshop where I actually put a plan together live and answer your questions along the way. All of that's available at www.retireontime.com.