00:00:00
Speaker 1: Welcome to how to Money. I'm Joel, and today I'm talking about building a retirement you'll actually enjoy with West Moss. All right, does anybody else maybe just a little tired of hearing about retirement?

00:00:31
Speaker 2: Right?

00:00:31
Speaker 1: It can feel like this vague, far off finish line that we're told to obsess over for decades. But here's the thing. When you look at the research, a surprising number of people who are retired or who are about to retire, they're anxious. They've got regrets. Some of those regrets are financial, some have nothing to do with money at all. So if we're going to spend years working towards retirement, I don't know. I'm going to say that we should probably make sure we're aiming for a retirement we're actually going to enjoy. I have known this guy, Wes Moss for a long time. He worked at the same radio station as I did for well over a decade. He's still there because, believe it or not, terrestrial radio is still alive and well. His show Money Matters has helped countless listeners make smart helps help listeners make smart decisions about their money, their investments, and yes, their retirement. Wes has a new book out the challenges some commercional thinking about what makes retirement successful. So today we're going to dive into the financial and some of the non financial stuff around retirement. Wes, thanks for joining me.

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Speaker 2: The death of radio has been greatly exaggerated.

00:01:33
Speaker 1: It's still around, and you're still around. You're pumping life into it.

00:01:37
Speaker 2: You know. It was I remember ten years ago or fifteen years ago, the thought was radio is going to go down by three to seven percent per year, so in a few years it's going to be half and then it's going to be half again. And I think it's been more like down one to two percent per year. Okay, so it's lower than what it was fifteen years ago and ten years ago, but not that much. Yeah, I'm surprised. I really I could see soon as great. I mean, it's still I'm sorry to Clark Howard the other day and he said when he started first started podcasting, it didn't it wasn't even called podcasting. It wasn't even like a name for it. And he said his first year he was still doing radio. He said he had like twelve pot pod listeners at the time, and then as it caught fire, I've thought, well, why would anybody listen to the radio because you can just choose your podcast. You can fast forward through the commercials, not that anyone would never do that, No, they wouldn't, and you get you can pick exactly what you want and you listen to it on demand and instead both of both of podcast has thrived and radio has just been down by a tiny bit every year.

00:02:48
Speaker 1: They can coexist. Man, Okay, first question for you though, what is your craft beer equivalent? What are you splourging on these days? Right that some people might be like, well, that's a lot of money in this one line aim of your budget, but you're like, dang, it's so it's so worth it because it moves the needle for me and you know what, I'm doing the smart stuff with my money too.

00:03:08
Speaker 2: Yeah, I think that the I'm trying to think of what seems h what's a big spend for us as a family. There's two of them. One Congress is currently debating because it's you, and it's called youth sports, and it's a bit it's a really expensive proposition and it's it's gotten. You can make the case it's totally gotten out of control of America, and you now have big private equity companies that own most of youth sports, and they're really crafty at extracting money and creating a sense of guilt for every parent. And it's I'm in the middle of it. It's almost like I've been a boiled frog. It's just slowly boiled me. And I look back at what we spent the summer on travel and hotels and do and fees, and it's extraordinary, I believe it. It's a crazy amount of money, but it is. I'm okay with it because the kids do love it and it's a big part of their their athletic life, social life, community. The community is really great around you sports. That's a massive benefit, I think for the whole family. But it's super super expensive, especially when you have and I have four boys and all four of them have done that, and now I'm in the I'm in the age range where three of the four are doing it at the same time. So it's extraordinary but totally worth it. That's my craft beer.

00:04:38
Speaker 1: The heyday of sports spending on your kids, And you're right, they're crafty about it. Like my son's in a little soccer league. He's he's like six and the well they got to have these two jersey colors and they got this training jersey this year, and You're just like, that's I know. I'm just in the initial phase of this, so I will ask you questions as I get further alone.

00:04:58
Speaker 2: Yeah, the little flame under the pot just turned on for you. It did, it did. Just in the water is going to get hotter.

00:05:05
Speaker 1: I know I'll be saving ahead for that phase of my life.

00:05:08
Speaker 2: Okay.

00:05:09
Speaker 1: We were talking before we started recording, and you said, you told me that this new book it supersedes your other work. How how so? And what are the biggest changes maybe from research you've done in the past about what creates happy retirees and kind of the new stuff you found out.

00:05:24
Speaker 2: Yeah, and that was kind of my biggest fear, Joel, when you do it. And I really did the first major project that turned into a book. It's been almost fifteen years, and that was the book about It was you Can Retire Sooner than You Think, and it was the Five Money Secrets of the Happiest Retirees, and it was the it was my first real foray into researching. Hey, I want to study a population. I'm studying fifty five plus and I'm going to figure out the happy group and the unhappy group, and then try to emulate the happy group, and then and avoid I want to avoid the money habits and the lifestyle habits of the unhappy group. And I in trying to update that book, I updated it took an entire year, and then realized that it just it had been too long and I couldn't use the same research because it was so old. And then I thought, Then I contemplated, well, if I read you, if I start from scratch, then what if the new data totally counteracts what I said before? And if it's different. And I remember thinking, like, I don't know if I want to do that. It could be it could like disprove everything that I've been I wrote about, I've been talking about. And I said, you know what, I remember one day I was sitting in my kitchen counter and I just said, I who cares. I was like, at this stage of my career, I don't care. If it's all brand new and it counteracts I'll just write about that because I'm just a big believer in being able to follow the data as opposed to just my opinion. And yeah, there's some opinion in this book about the data, but I wanted to be coming from a statistically significant map to the US census and say, Okay, here's what the data says about happy and unhappy retirees. Let's write about that. So, yes, it's been a lot of years. We've gone through many bear markets, we went through we went through a pandemic hyper inflation, so a lot is changed to some extent in the world. And we've been through We've been royaled many times as investors and retirees, et cetera. But the new research, it doesn't directly counteract and counter what I wrote about ten or fifteen years ago. It just updates all the numbers, and the numbers came back, they're different than they were in the first book. So I'm a believer in these new numbers and what they say about the world that we live in today.

00:07:50
Speaker 1: And I'm curious to dive into some of that. I also want to kind of maybe ask like a Devil's advocate question here, because when you think about retirement, it's still such a new in so many ways, right, and what I feel like I'm seeing this cultural moment of people just stressing out to the max about retirement and part of it maybe was those commercials from ten years ago where it's like, what's your retirement number? Is it? Is it two point two million? And people are like, oh my gosh, like is that really what I'm supposed to save? So I see a lot of this stress. Do you think maybe we're putting too much pressure on folks to constantly be thinking about and saving for their retirement? Like is that word just used too much and we're making people too too frightened, too scared.

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Speaker 2: Yeah, it's a good question. I think it's it's the flamethrower of twenty four to seven media that we live in in that it's kind of on every topic. It's like, if we think about the health info info, we get flamethrown at us every day. You Baron's last week, you know recently just had a cover of the Everything Pill, which is the you know, the GLP ones. It's not just for weight loss, it's for these forty seven other things and why aren't you taking it? And the But it's it's the media is loud, and then social media amplifies it, and it's really easy to amplify where we're already have internal fear. And my research on what people are afraid of. I don't know if that's ever the main fear we all have, and it's in some cases greater. In two thirds of people, they're more afraid of running out of money than death. So the media can play on that and that fear it never goes away. And then I in my research, it shows that the fear of running out of money goes it never ends. No matter how much money we have. The three million plus camp still one in four one of their greatest fears is running out of money.

00:09:44
Speaker 1: Yeah. I was going to ask you would think that the solution to money fears would be more money, but that doesn't seem to be the case.

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Speaker 2: It's for some reason, it just it won't go away. And then you amplify the confusion, Joel, which is a great point of You hear people that'll say, you know, five millions not not even close to enough, twenty you know, ten million, twenty million dollars, and that's out there initially that.

00:10:10
Speaker 1: Line from the show's succession. You know, he's like, Greg, five million dollars is not enough in her time, like it's one of the best times too.

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Speaker 2: I remember that. Yeah, so good. It's it's like that's a that's the worst amount of money. That's right. I think you have some, but you really don't. That's right, right, that's right. So you get hit from the internal human fear that'll that's just baked in like DNA, that's not going to really go away. And then you bake in the discord of well, you gotta have five, gotta have ten, you gotta have twenty, and then it just creates this really toxic soup that makes us worried forever, and and and also now that you brought this up, the big financial firms are not there to unscare you. You think about it, like the black rocks of the world, the giant trillion dollar companies, they're there to to to blow a little billow on the flame of fear so that maybe you say, well, okay, can you help me? Yeah, yeah, okay.

00:11:09
Speaker 1: So then if saving and investing more money, having a bigger nest, eg A bigger pile, isn't the antidote to the increased anxiety so many of us feel about saving for retirement? Is it like is it completely non monetary related? Like is it just maybe more silent retreats and meditation. I don't do do you have any thoughts on maybe what it looks like to ramp down some of those anxious feelings towards this concept.

00:11:33
Speaker 2: Joel, I think it is that it's a combo of and what I write about in the book the method, the retire shitter method is about having that the financial foundation and the education to wipe away the fear. So yes, part of it is money, and I spend some time in the book talking about that, and I approach it maybe the opposite way, as opposed to how much money do you need to do all the things you want to do and like create enough income? Ask it more and presented in the book from a standpoint of who has a sense of peace of mind and happiness already? And then what are there at? What are those asset levels? So I'm looking at it backwards. I'm saying, Okay, who's the group that is feeling good and they have low levels of anxiety and they're they're happy retirees. And by the way the book, I define that the kind of happiness, the brand I subscribe to you is more the air. It's like the Aristotle brand of happiness, which is fulfillment purpose in your life versus fun and lack of pleasure, which is like the hedonistic way to look.

00:12:40
Speaker 1: At it, and often the modern way we think about happiness right.

00:12:45
Speaker 2: For most people, right, and uh the so so I approach it from that way, and then I say, okay, well, this is the happy group and this is how much they have. So maybe that's the level that we need to get to, because if this group is, and the way I look at it, the way I present these levels of happiness versus unhappy in the book is almost like alpha. Almost like if you're investing, your listeners here probably know alpha. Right, is a little bit of a wonky Wall Street term, which is like the S and P five hundreds up ten, but my portfolio is up fifteen, so I've got five points of alpha, which is cool, right. It's a lot like happiness alpha. I didn't use that term in the book because it's a little wonky. But we look at the US happiness baseline from our research and then we say, okay, this group has hit what I call in this book the money green zones. One is for investable assets, one is for income, one is for years to pay off mortgage. But once I hit a green zone, then my data tells me that that group has a much higher happiness alpha than the rest of the population. So that's how I'm approaching it, is that we get to this green zone. And I'm not saying for you it's it's the exact amount of money you need, but for the for Americans, that gets us into a place where we're feeling good about where we stand and we do have a foundation to retire on. Then then the other pieces of the equation are very much lifestyle based, which okay.

00:14:22
Speaker 1: You mentioned purpose just a second ago, and kind of the the Aristotelian version the way of viewing happiness. Some people correlate retirement and a lack of productivity, right, and you talk about that in the book, how that often leads to less happiness, right The people that you don't have to necessarily leave the word a world of productivity and service behind when you reach retirement, although I think the monarch conception of it often leads people to think ditching work. I like picking up seashells at the seashore every day, and that correlation between me being a productive member of society and being a vital part of my community is now greatly diminished.

00:15:05
Speaker 2: Plus the headwinds of socialization gets harder over time, gets harder per decade to meet new friends. Your kids have val probably moved, your socialization at work has gone, your purpose at work has gone. And there's this concept in America that we are going to this new great purpose will be found and it will be it'll land in our lap and we've got some wonderful thing that we're going to do in our next phase. And it's got to be like, hey, I got to land on the man of the year of you know, cover of time in my next phase. And that's that's not the way it works. And if we think that that purpose in our next phase is going to end up finding us is totally wrong. It ain't knocking on the door. But it does need to be It does need to be create aid and it doesn't need to be saved the world. Its what I find. And I was actually an one of the data points that one of the many different ways to look at the data the number of different core pursuits. So this is these are the This is another piece of the method. The happy retirey group where you're getting happiness alpha is when you have five or more of these hobbies on steroids, which is a lot more than my earlier research. So the number four, it was three point six, it was three point six, and then it was one point nine for the unhappy group. Like, that's that's pretty that's that this new data is very different. It's five plus, which is a lot of core pursuits. Yeah, and the unhappy group averaged four or less, which is still a lot. So, and then I measured the number the amount of time. It's not so it's not just the number of different things that that Joel large Guard does when he's not doing how to money. It is the amount of time. So the happy retiree group with the alpha, they're spending and I'm rounding here close to twenty hours a week versus the unhappy group spending more like thirteen. You do the math. Over the course of a year, it's two hundred and eighty hours of creating your purpose and spending that time relative to the unhappy camp. That's like, that's seven if you look at it on a forty hour week, that's seven extra work weeks of committing to the core pursuits that now create our daily purpose in retirement. And then roll up to what I would call it more of a yearly more larger life purpose. So it is about being open, being creative, being exploratory, being adventurous around and by the way, adventure corp pursuits big happiness alpha for the happy group versus the unhappy group. That I categorize the different ends of corpor suits. Adventures is a big key traveling. I categorize to anything travel oriented, exploratory, hunting, fishing. That's I categorize that as an adventure related corp pursuits. The happy retire we spend more time doing that. So that's one of the prescriptions in the retired student method.

00:18:21
Speaker 1: Yeah, I mean there's some things I would say, oh, yeah, that's one of my hobbies, and I'm like, wait, I haven't done that in a couple of years.

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Speaker 2: I'm not. Actually, yeah, maybe a hobby that doesn't count as a corp pursuit. Yeah, it's like, yeah, it's got to be a superactivity that you love. By the way, what are you Let me ask you this? Can you tell me now off the top of your head? Zero prep your five? What if you if you're calling a cor pursuit hobby on sterois, you can't. You had to do it at least like a half a dozen times a year. Do you have five of them right now?

00:18:53
Speaker 1: Oh? I think I probably do. I running is biggest one for me.

00:18:59
Speaker 2: That's a huge one.

00:19:00
Speaker 1: Lots of that, and it also it's highly relational, so it's with other people as well.

00:19:04
Speaker 2: Uh oh cool.

00:19:05
Speaker 1: I'm coaching my daughter's cross country team, so it's like that that crossover, right of running and then also kind of leading young people, which is which is a blast. Let's see backpacking doing like backpacking trips with friends like that's high up there and something I try to do regularly. I don't know if you consider like an obsession with bluegrass musicians or certain types of music going to concerts, does that count as a corporate suit?

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Speaker 2: Hell yeah, okay, okay, so especially if it's billy strings.

00:19:37
Speaker 1: It's definitely billy strings as often as I can make it to those shows.

00:19:42
Speaker 2: So that's that's forb boom. That's awesome. That's awesome. I'm sure I need you need it, yeah, And I'm sure you've got a couple other ones. Yeah, I could take up a couple others. But if I was surprised at people were coming that some of the data coming back, people have you know, seven eight, nine different corporate suits. I'm like, wow, it's awesome.

00:20:02
Speaker 1: Yeah. Well, and this highlights something that during your working career, it's harder to engage in some of those corporate suits like you, especially if you have young kids and you're working a demanding job, like it's hard to have those many that many corpor suits hobbies on steroids in your life in the way they ultimately want to have them in retirement. So how would you suggest people cultivate some of those corpor suits, Because one of the other things you talk about is just like once you do hit retirement age, you don't just like turn the spigott on. You have to be developing those along the way.

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Speaker 2: Yeah, I think that, and I do. It's funny, I almost have like a guilt if I'm not following my own advice. And it so because I have that guilt, I also give myself permission that I should be doing these things where I may not otherwise do them. So, so fifteen years ago, and maybe this is the correlation of like being more early career fifteen years ago or mid career where I was so focused on work, and would would if I looked at myself fifteen years ago and twenty years ago, I would have broken probably every rule in this. But it does get easier as we get a little more established at our careers to be able to say yes to certain things where I used to say no to so many things. Yeah, and is golf, Oh, who has time for golf? Like that takes four or five six hours?

00:21:29
Speaker 1: It takes the time with like four other corporate suits combined.

00:21:32
Speaker 2: Yeah, it's like you can count that like for two. Yeah, And over time I realized that if you say no to all the two things for xyz reason, then you end up with a really short list of corporate suits, which makes socialization so much harder. Like everything you just said here, running groups, coaching with other folks and you see you know other coaches and you know parents. Backpacking is usually other with other people. Music is almost always with other people. Like, if we limit ourselves on those core pursuits and we do it for years and years and years, then we're also limiting our socialization in our community. So it's almost it's really hard goal. And I've seen and I've seen this. Let's say in practice, if you are a workaholic all the way to your sixty sell your company. Now you have plenty of money, but you've you've spent zero time developing anything. So it's really hard. It's like you're starting in a big hole. So in my opinion, to try to say practically, how do we follow that data, We've got to do it. We've always got to do it. We've got to be doing it in our forties. And then it even becomes even more critical to be to say yes to certain things in our fifties, et cetera, to make sure that we have a full palette and a full arsenal, if you will, of different core pursuits because they those change too over time.

00:23:00
Speaker 1: Yeah. Yeah, The truth is you might not like retirement much, right if you can't take your foot off the gas of work enough to engage in some of the activities you're like, yeah, in twenty years, I'm really excited to do some of that stuff. Well, are you even trying or attempting some of those things now? I think that's really important. I want to get to more discussion with you about building a retirement you're gonna actually enjoy. We'll be right back, all right, we're with Wes Moss talking about building retirement you're actually going to enjoy. Part of that is like the corporate suits, the hobbies on steroids, having those develop and pick them along the way, like before you just hit retirement age. One of the things you say in the book West you say that just getting a retire to retirement provides a happiness boost for the average retiree. So it's like just quitting work. I feel like I saw that with my parents, right that, like they hit that mark, they were able to disengage from work and they found plenty of other places to spend their efforts and they found more joy in that. But I'm curious, does that mean that like retiring earlier is better for everyone? And how how early are we talking?

00:24:16
Speaker 2: Okay, so this again, this is just the data, and this was like mind blowing what I saw this. So it's like, okay, we've got all this, We've got the people still working. That's the answered. So the question was are you in a position to be able to stop work and say that you're a quote retired if you choose to yes or no? And the power in the folks that said yes was dramatic and statistically significant, and a twenty one percent difference in happiness levels that the happiness alpha from the group that says, no, I still have to work, versus the group that said no, I'm I'm I can say that I'm done work if I won to right now. Is this twenty one percent change in levels of landing in the happiness camp the happiness propensity, which I think that we should pay a big attention to that, Like, what, like we're twenty if we can. Is it that we all hate our work? Is that we don't have economic freedom? Is it because we have fear? But the power of being able to say yes to that question? Man, I think that's what kicked this thing off. Like what I did the data on that and saw that relationship, and I was like, I had a couple guys that are even that are more analytical than I do, Podter Miller, who's our chief investment officer, who's wildly and strongly analytical. I remember looking at this data. I was like, wait, wait, wait, what's the difference I was like, it's twenty one percent jump in happiness if you answer yes to that question, Like what.

00:25:55
Speaker 1: So that's like a cornerstone question.

00:25:57
Speaker 2: It's like you got to be kidding me, Like we got to we got to get there a little sooner and even if we can do it a year or two or three. And like the analogy I use in the in the book is GPS. Like if if you don't turn on your ways or your Google Maps or whatever, which I almost do every like I've been burned so many times forgetting to do it, then it's like I get in the car, it says thirty minutes, and first of all, I if I forget to do it, I usually hit a road closure, yes, or if i'm if I'm like in a different town for all these youth sports things like if let's say the Internet isn't working and it's like I'm pulling out and my GPS isn't on, It's like, oh my god, we're going the wrong way. Like it's supposed to take ten minutes to get there, now it's going to take thirty. My kids are like, Dad, turn on the Google Maps. I'm like, well, you're the copilot, why don't you help so there, So we don't. So we if we miss the GPS, man, we we add time. And if we use the GPS and it says thirty minutes, and we shave off two. Like Joel Lars's guard gets to the car, it's like thirty minutes. You probably say, like in your mind, how long is it gonna take.

00:27:02
Speaker 1: I'm gonna beat it for sure. Yeah, you're gonna beat.

00:27:04
Speaker 2: It by like I'm gonna get there in twenty eight Yeah, not a big like that's not crazy. But that's six percent. Yeah, six percent on sixty five years. That's like four years. So I think if we if we are really intentional, Joel is the way I look at this, and we follow we know what the happy camp does and we're doing the same five things. Do we shave off one three five years? Because I want people to get there as soon as they can, because it I know that our happiness levels. That's one of the big jumps right there.

00:27:38
Speaker 1: So what would you say a lot of how to money listeners are in the younger camp right like, they're not They've got plenty of time, and time is there? Time, as we know, is our friend when it comes to investing and compounding. So what would you say to those people who are let's say in their thirties, they're thirty A thirty five year old who's like, I like the idea of shortening the gap and having more of that confidence when I do hit retirement age that I will be able to bag work if I want to. What would you say to that person?

00:28:08
Speaker 2: Yeah, well, so first of all, there's a little bit of this comp the halo of fire, which is like the super super early retirees, which I have never seen really work in real life.

00:28:21
Speaker 1: And I think you haven't seen it work in what way?

00:28:24
Speaker 2: It's I just don't think that. I'm sure there's definitely some fire people that stop. You know, they saved it eighty percent of their money and then forty two or thirty eight they stopped working and they live on a super strict budget. Like, yes, there are people that have done that, And Okay, I get it. It's hard enough to shave a couple of years off and do it at fifty eight, sixty one, sixty two. So I just don't believe fire is realistic for ninety nine point nine nine nine percent of people. Yeah, if you started at Facebook in twenty you know, ten or two thousand, or that's too long ago. If you were early in Microsoft, Apple, whatever, Yes, there's some people that are. It's they totally can do that. Yeah, but provided an economic miracle, you're gonna have to do it the long marathon way. But here's what's cool, and this is why I think there's so much hope. If you're thirty listening. We've got a mutual friend, Clark Howard, and I do a what's called an Asking advisor every every week for The Clark Howard Show, and we just get questions of they're very retirement based, and I think they're even even the Krista and Clark are surprised at we get like there's two think of it as two camps. There's the I've been listening to Clark for twenty five years and those folks are like sixty, you know, their late fifties, early sixties, and they got a lot of money. Yeah, and they're like, oh, I've got two point one million here, and I've got you know, four hundred thousand and a roth and I've got four hundred and eighty two thous It's like, whoa these people. These people have a lot of money, but they're in their late fifties, they're in their early sixties. And then you get a question. It's like, Hey, I'm twenty eight and I'm saving two grand a month and I've already got you know, two hundred and fifty k saved. That person is the person that's going to have the two to three million when they're in their late fifties early sixties. So and it's they're not any smarter than anybody else. They're not any there's not some economic miracle like they're making a million dollars a year. They're just regular Americans, hard working that start early and that's ninety nine percent of the battle. And it's so cool to see it, Like when you got to shore, Like a guy like Clark's been around so long, his listeners are like, I had zero when I started listening to you. Twenty five years later, I got a lot.

00:30:49
Speaker 1: Yeah yeah, and I know that that proved to be true. And they disagree. Thing.

00:30:53
Speaker 2: Yeah, the control, the discipline of saving plus investing, it gets people there.

00:30:59
Speaker 1: Yeah yeah, So it's not rocket science. One of the things you talk about in the book is the importance of friends in community for retirees when it comes to happiness. And we hear so much about the I don't know why it's gotten term this, but the loneliness epidemic. It's like it's spreading through our society like cancer, right, And it's sad to see as someone who feels like, man, I've got so many awesome friends in my life and I hate that. Like I read all these studies and I'm like, man, who are these people who don't have anybody to hang out with? How it seems like maybe that's retirees are especially prone to feeling cut off from community and friends. Yeah.

00:31:42
Speaker 2: Look, we're in a friendship recession in America and it's and I don't know if it started in the nineties, but like that's where the data, like, that's where we that's like the earliest back. I can go find data of how many friends we had and how many on average, and it's it is essentially gone down and down and down every year. And the folks that have one or one friend or less or zero friends has gone up and up and up and up and up. It's crazy and and one of the one of the things. And so that's not my research. That's that's research from other spots. So it's like there's a friends ship procession. Yeah, what I measured was I asked a question in the research how easy or hard is it for you to make a new close friend, close connection. And it's a really cool chart. It's probably better in color that it is in the book in black and white. But and by the way, in the book, I have this QR code where you can go see the charts uh in color, So like there's a QR code and you can go look at these charts in color, which I and some of them are. They're they're cool or seeing color. But it's so so visually distinct that in your twenties it's like super easy or really easy, and the very and and that, but and then every decade it gets harder and harder and harder to make close.

00:33:04
Speaker 1: Friends in college two days, you know.

00:33:06
Speaker 2: Yeah, and so we're in this friendship recession and it is the then our community is so incredibly important that if you don't have it, if you don't have four plus close connections in your life, then your happiness levels go down. And they're not you you, You are at risk of falling below the baseline. And you've got and you And so we have to be able to create and keep and cultivate our communities no matter what age we are. And it gets harder over time. And yeah, loneliness and epidemic. I think of it as like a friendship recession. Some people are okay with a little bit of loneliness and isolation. But the vast majority of people need to be able to call on four plus people and not everybody, and not everybody's as cool and likable as Joe large Guard.

00:34:04
Speaker 1: I mean the other thing they can try, you've you've been gifts, you have a gift. They'll never get there. Uh. And yeah, there's there's just something so important about community and friendship that and that can be You're right, like so much harder to get when you get older, and so like one of the things we were talking about before we started recording too is uh. And it sounds like you're not quite sure how to talk about this. But having your family close to you, if you've raised your kids while and they're real smart, Like, I don't know, man, maybe they just moved to Silicon Valley because they're going to start the next big thing and they moved away from home. Like how do you as the parent be like family and community is important to me, and yet what do I do when my kids fly the coop and they move elsewhere?

00:34:51
Speaker 2: So this is uh, this is a tough one. I grew up in a family where my dad was a in a lot of periods are like that. We all want independence for our kids. And my dad when we were younger was ultra go get independent. And I remember we were talking about it. Now now I'm looking at college. My kids are looking at colleges right, so they're of that age. And I'm talking to my wife and I was saying, like, gosh, I hope they don't go to UCLA, like they'll never come back, Like I'm in Georgia they go to if they go to Cali, I don't know if they'll ever come back. Yeah, because that's what happened to my family. My dad was like, whatever the best school is you get into, that's where you go. I don't care where it is. I ended up in North Carolina. Then I ended up in Atlanta from PA. So I'm long way away. My brother ended up in California. He's now in Spokane, Washington. Oh, so far like that might as well be a different continent. My other brother moved down here with me, and he's in Atlanta. And so they only have one of their four kids even remotely close to them in PA. Yeah, and that's a that's a problem. It's a problem. And and this I've written about this, not in this book. But I've written a bunch of articles about this that we need to we want to live near at least half of our adult kids. I don't have a great answer of how to get that done. I do know it's fun. Maybe it's a Georgia thing, but I there's a lot. There's a fair amount of families more than one. That's why I kind of this always resonates when somebody tells me this. They're like, oh, yeah, we have a we have a kind of a we kind of have a family compound. And I'm like, what tell me about the compound? It's and these are not, like, you know, people with a billion dollars, but they're like, oh, we got a bunch of land and I live on it, and then like a few acres over my kid lives there with his wife and my grandkid. And I'm like, oh, that's cool.

00:36:47
Speaker 1: That sounds awesome.

00:36:48
Speaker 2: Now, I don't know if I'm going to be able to do that with my kids, but that's one pretty cool concept that I've seen more than more than a few families pull that out, of which I think is cool.

00:37:01
Speaker 1: And even if you can't bribe them or convince them or coerce them, into living right down the street from you, Like I'm thinking about the annual vacations we take together as a family and making that like a vital part. And then this is where money and intentionality kind of intersect. Well, when my kids are grown, hopefully, I'm saying, hey, listen, I'm paying for the vacation. All you got to do is show up, whether it's the beach house or whatever. If you kind of ingrain that in your family culture, and then you've saved and invested well enough to be able to pay the freight for everybody else who's coming along, Like you're creating that desire I think for everyone to be together, even if it's just one week out of the year.

00:37:42
Speaker 2: Yeah, hopefully, And I want it for families to be more than that. I want it to be I want it to be regular proximity and being able to be able being let's call it within driving distance of mom and dad. That's great for mom and day. Yeah, when you're independent and you're in your thirties, forties, fifties, you're less because now you've created your own family and your own kids. But it's harder for for us as retirees. Let's say when we're in our sixties and plus sixties plus I would look for any way possible to be in proximity to my kids.

00:38:21
Speaker 1: So I love like the Bill Perkins die with zero sort of mentality. I think in some ways it's easier to assent to intellectually than it is to actually pull off in reality. But do you think that for people who are hoping to financially at least have the ability to enjoy a happy retirement, that they run the risk of wasting time by trying to amass a nest egg that.

00:38:48
Speaker 2: I don't know.

00:38:48
Speaker 1: When you look at some of the data, wes like a lot of people who've done really well saving and investing for retirement, there's a lot of that money they don't end up needing or using.

00:38:56
Speaker 2: Yeah, there's like an almost a fear. There's so much fear about rod out. There's a lot of statistics about like the underspending now in America, Like we're deathly afraid of touching our IRA money because we don't want it to run out. Number one. Number two, we're worried about the taxes that it creates. It's like, well, I can't take too much out of the IRA because then my taxes go up, So there's a lot there's a battle there, and there is a balance that we need to There's another fear based issue within financial planning, Joel, is this only take. There was a pretty recent article Wall Street Journal that was talking about a book and some researchers that said, if you're nervous about spending too much money in retirement and you're nervous about your accounts ever going down, just to just use a two percent withdrawal rate. Wow, I love here. I'm like, Okay, I no wonder people are freaked out because then and then you've got other folks that are like to take seven or eight percent You're fine. Yeah, Like, there's so much confusion around it, and I'm I do feel like I over emphasize and I bore myself with the four percent plus rule. But it lies at the It's a financial planning cornerstone that allows people to take I think of it as max out without running out. Yeah, and if you understand it, it reduces it greatly reduces This is part of having a plan. Greatly reduces your financial anxiety to be able to spend freely within within some parameters that in my opinion, are realistic and they're not two percent a year.

00:40:32
Speaker 1: And that's that's having the plan, but it's also having a certain amount of education to understand the concepts of the four percent rule, because guess what, sometimes when we understand something more fully, it can reduce fear for us too. Write So so part of that is the education piece that we just need to like fully grasp some of these concepts like a four percent rule and the nuances of it where it's like, it's not necessarily a hard and fast four percent, but this is a great kind of range to think about when you're when you're considering withdrawals. And then maybe flexibility adds into that as well. Right, you're down, you're in the market, and just just to help yourself from freaking out too much, maybe you take out a little bit less and you can take out a little bit more in years where the market's doing well. Yeah, how do you think about that education part of it?

00:41:15
Speaker 2: So it's the education is is a must, but the re educations of us too, because you could listen to a ten minute podcast, twenty minute podcasts on the four percent rule how it works. But even advisors, I remember just trying to do a pulse check when I did my own you know, William Bengen is the aeronautical engineer that invented it and did the research, and then I had our team recreate it. I wanted to do it the same study that he did so that we really understood it. So we've done our own iterations of it, and by the way, it all checked out. And but you go back six months later, the average person, it's like, Okay, well, yeah, four percent? Is it four percent in just this year? What's the inflation piece? How much do I have to have in equities versus bonds? That's part of it. So the four percent rule? Is it in stone? Is it kind of flexible? So it's one of these things where it's a there's enough moving parts to that concept, the four percent plus role concept that people kind of become they forget about it, they forget so you kind of have to re educate and really continue to understand it. I think in the early years of distribution, otherwise you're afraid to spend money.

00:42:39
Speaker 1: And for you to be more confident, you have to probably be more of a continuing learner in the area of personal finance, which is why people listen to this Podcast West, mow too money, and we've got more. We're going to get there. I want to ask you a few questions. In particular, I want to dive down on social security for just a second. Two We'll be right back. You know, when we go to breaks on Video West, it makes me want to do the Derek Zulander face. You know, Magnum, it's gonna be an epic.

00:43:12
Speaker 2: Because a lot of your sounders, they're awesome.

00:43:15
Speaker 1: I don't know what else to do during those times. We're still trying to figure this out. Okay, but let's talk about you were just talking about asset allocation. That's a really important question for retirees. Is there a certain asset allocation that leads to greater levels of happiness? Because I think a lot of people listening to the show again, they're like, hey, I'm in the wealth building phase. Even if I'm one hundred percent stocks like at thirty two, I'm okay with the volatility. I'm fine, I'm not tapping it for a long time. But what should a transition maybe to a more conventional portfolio look like.

00:43:48
Speaker 2: I think again for Moose people, and this is everyone's gonna be different. But by the time we get within a year or two of needing the money shifting from accumulation to distribute. We want to have of our total pie. Not necessarily a percentage, Joel, but a number of years in safety assets, gotcha. So that's gonna be different for everybody. But if I need fifty K a year from a spending perspective to supplement social Security and maybe some other income, maybe rental income, then I would multiply that by three at a minimum, And that means that one hundred and fifty thousand of my overall investments, in my opinion, should at least be in that what I call dry powder, which is the safety assets. It's still invested, but it should be. It's not involatile equities, it's in safer fixed income now, so that's kind of reduced.

00:44:45
Speaker 1: Sphere too, right, just having more money in non volatile assets and maybe even more cash exposure to at that point.

00:44:53
Speaker 2: Right, And there's the three year is intentional because that's the average it takes for Marcus to recover from a bear market. And that's why it's a minimum of three. Now, I work with a lot of folks that'll that'll have five, seven, ten years, and they're totally and it's forty fifty percent of their portfolio, and it's totally comfortable with that. But they say, I really know, I love to know that I have five years of safety assets now, yet we're talking about it depends on your spending, depends on how much you say, but that to me is starts to help inform our asset allocation.

00:45:28
Speaker 1: And speak to this sometimes the not non fully optimized move is the right thing for your psyche right where. I'm sure you talk to summer tirees. One maybe they've got more money than they'll ever need and so they can afford to take higher levels of risk. Or you might be talking to other people and they're just like a nervous nelly, and so five or six years worth of straight up cash is the thing that allows them to remain invested with the other parts of their portfolio. And so it's got to be like person dependent too.

00:45:57
Speaker 2: Yeah, I think you said that great. I think one of the ways I look get safety assets is they are there for a lot of different reasons. One of the cool reasons I think it makes us better equity investors. Yeah, so that that safety zone and that safety bucket, I draw out the buckets in the I think chapter seven or of this book or chapter eight, and it's those safety that safety asset bucket, I call it income. There's an income and cash, but those are that's where the safe money lives. It allows the growth bucket and the alternative income bucket. It extends our time horizon, and it makes our risk tolerance for that bucket to some extent better or or stronger because we have the safety asset.

00:46:41
Speaker 1: Yeah, okay. What are some of the biggest mistakes you see retirees make soon after ditching work? Is there anything that, like first year of retirement, people tend to do that ultimately leads to greater levels of unhappiness? Is like I'm thinking of buying an RV? Is that is that one of the things that someone does impulse buys an RV and that leads to a lot of unhappiness.

00:47:01
Speaker 2: Let me give you a boring answer and then a better answer. The first part is that and I'm looking at a chart here do the answer this question of do you have a formal financial retirement plan? Again, everyone's going to sleep, Okay, Wes, I've heard this a million times. Happy retirees are two and a quarter times more likely to have one than unhappy huge happiness outpha. Just have a plan. Just have a plan doesn't need to take long. You can literally take thirty minutes. So if you don't have a plan ready to yeah, you get lost. Okay. The bigger mistakes that I would say, and again this isn't research based. This is more what I've because I've been in the financial planning industry for over two decades, is the is waiting until you feel like you have time. So I'm retired now and now I have time to do some of these big, expensive projects that I didn't have time to do before. And I've seen these home reno stuff home renovation type projects get really out of control and they get expensive, and you're doing it when your income is no longer and that I've seen seen that be a real issue a couple of times.

00:48:20
Speaker 1: That's good to know. So how much are you worried about kind of what's happening with the Social Security Trust Fund right now? And I'm curious about if you have any data about the correlation of happiness and retirees on like a timeline of when they claim social security? Are the happiest retirees claiming earlier later. Are you any thoughts on that.

00:48:43
Speaker 2: That's a cool question. I never even thought of it that way. That would be good research to do. Don't tell Mallory to show want me to do it the I So let's see, let me think about this for just a second. When we claim social in relation to happiness, Well, first of all, the trust fund. I think that the folks that are in their thirties and forties, there will be a time when social is going to have to get clipped to some extent. And I don't think you know, people in their sixties have to worry about it because the Congress isn't going to impact the current group because you've got like I think you would have like riots, you would have riots in America. Yeah, the only group that young people probably the group that would probably not riot is the thirty year old that doesn't really it's not like they have a bird in hand that's going to get clipped. It's a future payment that they may not fully be counting on any way, and they don't really know, like maybe it would have been three grand a month, but now it's going to be twenty seven hundred or twenty five hundred. That's a constituency that Congress will probably to if they ever do it. I don't think that there's any there's no political will to reduce folks payments today. And the other thing Joel too, is that the math problem for social is not that hard to solve. I mean, you could raise the age. You could, you know, buy a little bit and it and it fixes the math. You could. Uh, there's a bunch of levers mathematically they could pull. It's just the political will having to do. What's that.

00:50:28
Speaker 1: It's the political will that we're missing to be able to make the changes to keep Social Security solvent for longer.

00:50:34
Speaker 2: So they're going to pull some levers, but it's not going to be for the current folks. It'll be for the folks that haven't started getting payments.

00:50:41
Speaker 1: Okay. And then in terms of when we take Social Security, do you have thoughts have you seen, even if you don't have statistics on this, people that have the ability to wait longer and get a bigger Social Security check. Does that really fear or is there something about I know some people from a mental perspective, it just feels like, hey, I know, I'm giving up on the eight percent annual increase, but that steady check now allows me to retire, allows me to let my assets can continue to grow, and I'm okay with that trade off.

00:51:10
Speaker 2: I would lean towards this sooner group. And yeah, of course it's the most If you want to max social, there's only one thing to do. Wait, yeah, right, max. But social is about optimizing for your life as opposed to maxing. And if you have plenty money you don't need, it's no big deal, like I can wait, I don't need the four grand a month or thirty five hundred. Usually the people waiting I have these high social Security checks anyway, and they wait till their age seventy. They've now maxed social provided they live for a long time. The group that I see that really uses it as a core piece of their spending and it allows them to stop working a year or two sooner. The answer is yes. I mean, go back to you ask the question, like what that chart of there's a twenty one percent jump in overall life happen is when we say yes to not working yep, and we're done financial freedom And if social is the final piece of that puzzle, because now you turn it on and you can stop, and you can fund your five plus core pursuits and do what you want. Then, yeah, earlier is better from a happiness perspective if it if it shaves a year or two or three off of work.

00:52:22
Speaker 1: And that's where maybe the tendency to optimize can create an inferior lifestyle, even if it means you're trading off some of the financial benefits right that you can get by holding out a little bit longer.

00:52:35
Speaker 2: One of the other.

00:52:36
Speaker 1: Questions that comes up for every retiree is paying off the mortgage. And I feel like for a long time that was the advice, like the standard stock advice was like paid off mortgage in retirement or else like you shouldn't be retiring. Probably that's a high priority. That advice seems to have changed quite a bit, or at least be less strident. What do you come down on that, especially like let's say someone's holding on to a two and three quarters mortgage rate. Gosh, it feels dumb to pay off your mortgage early. If you can afford your lifestyle with that mortgage in attack.

00:53:12
Speaker 2: So then the same way I approach the how much do we need? I approach it from a what serves happiness levels in America best. And that's where we get to the money green zones. I do the same thing with mortgage. Yes, of course paying off a mortgage is still great. Not having a house payment still great. Hard to debate debate that, even if it's a two point eight seventy five percent mortgage. Where I come down on that, the housing money green zone for me in this research is having the payoff is just at least within sight and it's not just a perpetual payment because I have twenty two years left, like that's like the whole my whole retirement. I'm gonna be paying this mortgage if the green zone starts once we get under once we get to nine years or less, and that's where I see happiness levels jump. If we're isolating just that question, how many years left do you have on your mortgage? Well, the group with nine years or less all the way to the group with with zero, so they've paid it off zero years to pay a mortgage. That group, I do see higher levels of happiness. So I still think, yeah, it'd be it's it's a green zone to be at zero years left, but it's also a green zone if at least is coming within sight yep.

00:54:30
Speaker 1: Okay, so single digits, single digits is where you want to be.

00:54:33
Speaker 2: Oh, that's a good way to do it, Mallory. Let's remember that single digits. Let input that in the book. That's that I should have said that, you know, single digit mortgage years when you write.

00:54:42
Speaker 1: The next one, that we'll go in there.

00:54:44
Speaker 2: You can do it. I'm not doing this ever again. This took too long.

00:54:47
Speaker 1: Now I hear about writing a book, I hear about the true true vails of writing a book. I'm not interested. It sounds a little intense, but dude, the book is great work in how the money listeners find out more about it?

00:54:58
Speaker 2: Hey, local books wars Man, the local bookstores. I think I may be underestimated that the people still do that. And I talked to a bookstore and to Cater Georgia that you know, has sold like hundreds of copies of one of my earlier books, And I'm like, you, guys, like, how come nobody ever says anything about bookstores? Why is it always Amazon? I'm like, I was like, I'm sorry, man, I didn't know.

00:55:27
Speaker 1: One of my good friends is launching a bookstore like right now in town Atlanta. I think it's the coolest. I think it's the coolest thing. I do think we're seeing a resurgence.

00:55:36
Speaker 2: I think that's cool. Well, listen, of course Amazon, but and it's but if you've got a bookstore nearby, man, it's it'll be in bookstores as well. And or it's in bookstores as well. It's going to even be an airport bookstores. There you go, you find it. I'm cool with that.

00:55:52
Speaker 1: I'm expecting you to sign them as you walked by, you know, when you're trying to make your part. Phil Jackson, that's right, the Retire Sooner method. Wes Moss, thanks, thanks so much for joining me today.

00:56:01
Speaker 2: You're the best. Thank you so much. Guys,