How to Secure Guaranteed Lifetime Income for Your Retirement

12.16.23: Audio automatically transcribed by Sonix

12.16.23: this mp3 audio file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Val Majewski:
Welcome back to The Federal Retirement Show. I'm your host, Val Majewski with American Benefits Exchange. I appreciate you joining me, taking the time out of your schedule to view this episode. Today we're going to be talking about a recent experience I had speaking at an Air Force base in South Carolina, and the talk was on retirement planning. So from time to time, as you may have seen from previous episodes, you've heard me talk about these things. I get asked and our company gets invited to go speak at different engagements across the country for different federal agencies. And sometimes those speaking engagements happen on military installations. This just happened to be in South Carolina. Um, and they wanted me to come and speak on retirement. Now, I've given information here on retirement planning. We've talked about this in various ways that the retirement process, what to do with your pension, how to calculate your pension, social security, the first supplement, TSP, etc., etc., etc. but this was a unique and very cool scenario. I got the chance to be kind of on a panel and it was a two person panel. It was myself and a major general retired, a two star general in the Army, and he recently retired and talked about his retirement experience and the planning that went involved, that was involved, the timing, all of the things that the people in the room should consider. Now, there were military folks and there were civilian folks in attendance, but the the talk is basically the same, right? The concepts and I wish I could share a recording of this, but I want to share some of the experience, because the topics that I heard and the topics that I spoke about in regards to retired planning complemented perfectly what this retired general was saying, and it was awesome to hear.

Val Majewski:
And he went before me and gave his experience, basically his testimony when it comes to retirement and retiring from the military. And a lot of their military retirement parallels federal or civilian retirement. And then what they wanted me to talk about was retirement planning. But from the income side now, previous episodes, just a few episodes ago, actually, we talked about the need for more retirement income in planning or retirement income, but this talk just solidified with with all the heads of the room that were nodding yes. The general next to me nodding yes, along with the talk that we were giving, the need and the necessity to make sure that you are guaranteeing that you're going to have enough money in retirement. Now, let's let's back up just a little bit, because when we talk about, you know, retirement planning, it's not just about the numbers. There's a lot of times I get wrapped up in this too. We talked about the calculations. We talked about the requirements for retirement. We talked about all of the numbers and the things that you're going to be receiving from a benefits perspective.

Val Majewski:
But we don't necessarily stop to talk about lifestyle. We don't necessarily stop to think about where are you going to live in retirement? What are you going to do in retirement? What are your hobbies? What are your desires? Do you want to continue to work? Do you want to work in a similar industry or a similar position that you were in while you were with the government? It's possible that you could be in a similar position just on the civilian side, seeing that time and time again from federal employees that I've talked to about their benefits, retirement. Next thing I know, they're working for another company or a government contractor where they're doing something very similar to what they did when they were within the government, but now they're just doing it on the civilian side and the private sector. Do you want to do nothing? Do you want to travel? You're going to move where the kids are at, the grandkids are at. Do you not really have a plan in place? And these are all factors that are going to go into the pile when it comes to sorting out your retirement planning for it. Now, I've said this before and I'll say it again. I had a guest on one of our representatives from Tennessee, miss Brandy person that said you are planning for retirement from day one. The first day you get hired, whether you know it or not, you are planning for your retirement.

Val Majewski:
And that is true. And she said it. And it's true today. Because if you do not have a plan, if you do not maximize all the time that the government gives you, you may fall short of your goals that you want to hit when you finally walk out that door and retire. Now, when when we were giving this discussion, the general said he started his planning in about 36 months out. Now, that being said, it's never too early, it's never too late to start planning. And I didn't want to one up his discussion. But I said, you know, I appreciate the fact that that he started three years in advance, but. I believe that you are starting to plan for retirement from day one when you first get hired. Now, the earlier that you can learn all of this stuff, the better. And again, heads were nodding. Notes were being taken as we were talking and we were complimenting each other. He was sharing personal experiences and experiences that could be just like some of you that are listening to this, to this episode, you may have similar type experiences, but he's sharing his experiences and I'm backing it up with my knowledge and expertise when it comes to helping federal employees and military folks retire. So the planning aspect is more than just X's and O's and learning the numbers. What you're going to get, it's answering the questions of what are you going to do in retirement? Where are you going to live in retirement? Are you looking to purchase a new home? Are you looking to purchase a new vehicle, a boat, a vacation home, something? These are things that are going to have to factor in to the money you're going to need and retire it.

Val Majewski:
Do you have less expenses in retirement? Are you going to have more expenses in retirement? These are questions that you need to answer. And what are you going to do? Are you going to play golf, travel the world, or do you want to get a part time job or full time job in retirement? Some folks that I talk to cannot stop working, do not want to stop working. They want to continue to to work even though they're collecting a pension, even though they're collecting, uh, retirement income, they still want to work in some capacity. What is your plan look like? Have you talked to your spouse about this? Because in a lot of cases, you know, you have been working. Maybe you're the primary breadwinner, maybe your spouse does work. Maybe you're both better employees. Are you going to coordinate together? Are you having these sit down discussions? Are you putting all these questions out on the table to answer them ahead of time? The earlier you can answer them, the better, because you want to both be on the same page. You don't want to get to retirement. Assume what the other was thinking and find out you were way off.

Val Majewski:
You were very wrong. You miscalculated what the other person your spouse was thinking. Again, what about kids? Are your kids grown? Do you have grandkids? Do you want to be near them? Is it a move in your future? Factoring that in what state are you going to live in out of that? How does that state treat retirees when it comes to taxes? Do they charge taxes? Do they have state income tax now? Federal taxes? Unfortunately, we have a tough time avoiding, but state taxes will vary depending upon which state you live in, which state you retire in. There will also be things that will be different. You're used to doing a certain routine. You're used to having a certain lifestyle. Over the past 2030, however many years you worked as a federal employee or as someone who was in the military, that's going to change. How will you cope with that? Are you ready to cope with that? Are you ready to move on mentally as well? There's a lot of withdrawal from the normal once you retire, and there's a lot of people that I see and I hope this is not you that end up, you know, not being able to cope. It's a depressing aspect. You've been go, go, go. You've had a schedule your entire life or most of your life, and then now you don't. And it may seem like, yes, I want to do nothing and ready to relax, but at some point that might get old and you might have to come up with a plan.

Val Majewski:
So understanding all of the non-financial things that are going to go into the equation, some of the logistical things, as I mentioned, with moving and traveling and being where you want to be in retirement factor, those things in conversations are going to have to have with your family, your spouse. Understanding now that making sure both of you are on the same page when it comes to your retirement. Now, one thing that we did agree upon the the general novel we were talking and go back and forth and we agreed on a lot. But what I mean is our presentations were very similar in this, was making sure that your needs were taken care of in retirement financially. I just mentioned about some non financial goals. So non financial things that you need to discuss. You need to figure out. You need to iron out all those details before you retire. Don't leave that to after you retire. You want to have that plan in place. And both of us during our talks talked about having a plan is the most important thing. Whether you're working with somebody like us who's an expert in federal benefits or somebody different, or you figured this all out on your own, you need to have a plan, hopefully a written down plan, a plan that can be modified, changed if needed, but a baseline outline plan that you can follow step by step, checking all the boxes as you go.

Val Majewski:
But what I said before is that we agreed in our presentation that once you have all that figured out, now it's time to get to the X's and O's and the numbers. To where you're going to be living comfortably in retirement. And we talked about the need for that income. So I bring back up. The need from our previous episodes, the need for having guaranteed lifetime income, having enough money that you can make sure all of your bills, all of your needs, all of your desires, all of your living expenses are 100% taken care of. Now, how do you know what that needs going to be? I know it's tough to estimate, but if we plan far ahead enough, if we plan for all of those circumstances as best as we can, and if plans modify, we we go back to the drawing board and start again. Or we make, you know, edits, changes, modifications to it. We have all of that ironed out ahead of time, and we understand all the options that are available to us. We can make sure that we're going to go into retirement without having as much stress, without having as much concern, hopefully zero stress, zero concern about our financial future. We can retire happy. We can retire in a way that gives us joy without the worry about where our next paychecks from or or you know what that, uh, statement is going to look like in our bank account at the end of each month.

Val Majewski:
And if it's going to be enough, know you've planned properly, you've put in your time and you've planned properly. So what am I getting at? What am I trying to say? Number one, I mentioned have a plan, have an ironed out, written down plan that is an ever living and changing document. As times change, as your needs changes, your desires change and you can start as early as today. You may think, well, Val, I've got 30 years until I retire. I'm not sure I need to write all this down. I'm not sure I need to start. I would say absolutely start that way. You've got a goal in mind, and trust me, it'll be here quicker than you think. Now, those that have kids know what I'm talking about. They say in a blink of an eye, they're going to be driving away, graduating on high school, going to college. You see it happen quick. Same thing. Go with your working career. It'll be here quicker than you think. So write down that plan. Have an idea. They may say, oh, I'm a couple of years away and I. I'm too far gone. It's too late for me to plan. Absolutely not. You can still plan. You can still take the time to write it all down, get all of your thoughts on paper. And as I mentioned earlier, all the logistical things of where you're going to live, what you're going to do, how your life is going to go and what you need.

Val Majewski:
Then we can work on the numbers. And if you're not sure about the numbers, that's where you can talk to somebody like me. Talk to somebody on our team. Make sure you get all the numbers figured out and if there's any gaps, if there's any missing pieces, we can try to fill those things with additional plans or additional planning. Make sure you're going to retire how you want, when you want, and with the lifestyle that you want. So number one, have the plan. Number two, that's part of that plan is understanding what your lifetime income is. And we've talked about needing 100% needing guaranteed lifetime income to satisfy at least your basic living expenses, all of your needs, right. Your your gas, your lights, your water, your electric, uh, your mortgage payment, insurances, car payments, food, groceries, clothing, all of your bills, all of your normal monthly expenses are going to be taken care of with this guaranteed lifetime income. Now, what are your typical guaranteed lifetime income sources? Well, as a retiree, you're going to have a pension. That's a lifetime income payment. Social security. That's a lifetime income payment. Those are your two that you don't really have control over as far as do you need to trade a lifetime income payment? No. That automatically qualify for a pension.

Val Majewski:
You're going to get a lifetime income payment qualified for Social Security. You're going to get that lifetime income payment when you turn those things out. The other piece of the puzzle is TSP. Now you can take a portion of TSP or all of TSP and create another lifetime income payment from that. Just talking to another federal employee today, and had done a great job of building up the TSP balance and needed to generate a certain income from that. And it was only going to use a fraction of the TSP balance in order to generate the missing link, right? The missing piece of the monthly income puzzle. Tsp the remaining portion. This person, this federal boy could do whatever they want to do with that income or with that account balance. What that allows you to do is give you the absolute guarantee that you're going to be able to. Lid the way you want, how you want, and make sure you have the money you want when you retire. By setting yourself up with guaranteed lifetime income. Now I say all that to say. You may. You may be thinking, well, how do, how do where do I start? What do I do? How do I know how much income I need? And that's where we can sit down and talk. We can sit down and go over everything. But in this example that I was just talking about this employee, he outlined everything and we looked and said, hey, there's a gap here.

Val Majewski:
There's a gap of X amount of dollars per month in retirement. And let's take care of that today. Let's figure out a way that we can put enough money. What kind of money do we need to set aside in order to generate that income on a guaranteed basis? And that gives you ultimate peace of mind to know when you go into retirement, all of your income needs are going to be taken care of, and all of your income needs are going to be taken care of for the foreseeable future, because those income payments are going to be there for the rest of your life, 100% guaranteed. That's a cool, cool thing to think about. Guaranteed. Doesn't matter. What happens in the market, doesn't matter how well the rest of your funds are doing. You know that those monthly paychecks are going to be there in the amount you need, and they're going to increase, hopefully with inflation, cost of living adjustments, things like that. You could set it up to make sure any additional accounts also set up to pay increasing income to keep up with inflation and rising costs as costs of, you know, food, groceries, gas, whatever it might be. But that gives you that peace of mind, that safety and security. So going back to my talk with the general and our discussion about retirement planning, making sure you've got all of those variables taken care of on the income side, and that was something he talked about, is making sure he knew he had a pension coming in.

Val Majewski:
Uh, new the new Social Security was put money in TSP, uh, still doing some work in retirement. So delaying some of those things with Social Security, delaying taking out TSP, but understanding how eventually he's going to utilize those things when he ultimately retires from the job he's doing in retirement as a plan has it laid out, is sticking to it, but understands that it's a living document and it can change over time. But you need to have that set. So I know we talked a lot on this channel. We talked a lot on this podcast, this radio show about retirement. And we we may sound like we're a broken record at times, but it is very, very important that you sit down with somebody who is an expert in federal employee benefits and go, you go over with that person your entire situation. It lay it all out on the line. And if you get to that point where you said, hey, I think I'm in a good in good shape, I think what we have set up right now is, is perfect for us. It's going to provide for our needs. It's going to check all the boxes. It's going to answer all the questions. That gives you a peace of mind. Knowing that you're set up properly takes the stress off, because that's one thing that I see a lot of retirees that go into retirement without a plan.

Val Majewski:
They go with hope. They are stressed out. They do not know what's going to happen. They're not sure what they're going to get. They're not sure what it's going to look like, if they're going to be able to live comfortably, if all of their needs are going to be met, if their bills are going to get paid, they stress out about how awesome would it be if you know the date that you're going to retire and you know 100%, it's going to be a great retirement, you know, 100% that all of your needs are going to be met, you know, 100% that you have planned properly. Now, what if you over plan I've talked about this before your future self. If you over plan today and you get to retire at your future self is not going to be upset with you, but providing too much money in retirement. I've never had a better employee called me and say, Val, you know we messed up. I have too much money that I've saved up for retirement. I don't know what we did wrong. That's not going to be a problem. Now. I certainly want you to live your life today. I don't want you to have to live in the poorhouse today just to provide for tomorrow. But if you can prepare, if you have a plan, if you know what it's going to look like, and you prepare and you happen to over prepare at the bonus, that's a bonus.

Val Majewski:
But I'm telling you, with this recent federal employee that I talked to, we're filling up that gap with the income so that when retirement comes, there is 100% certainty that the money that's coming in is going to be all that is needed to cover the expenses, and that they're going to be able to live comfortably because they get the income that they need in retirement. Don't leave it up to chance. Don't leave it up to hope. Plan ahead. And as a as a general said he said 36 months in advance. Three years. Get your retirement stuff in order. I'm going to warn up. Like I said, I'm going to say start today. Whether you just got hired yesterday or you're five years in or you're 20 years from retirement, 30 years from retirement, start today. Set out a tentative plan today and allow it to change over time. Review it. Talk to an expert. Talk to somebody who specializes in federal government. Federal employee benefits and retirement information so that you can lay it all out and get their advice, their expert opinion, their stamp of approval. Ultimately, all the decisions are yours. You are the employee. This is your working career. This is your retirement we're talking about. But this expert can give you guidance, can give you solutions that you may not have thought of, can think outside the box because this is what they help federal boys with.

Val Majewski:
I can tell you from personal experience, when I talk to federal employees, I can share with them what other federal employees like them have done. Ultimately, again, the decision is up to you, but we can lay out options that maybe you weren't thinking about. We can bring up questions that maybe you forgot to ask. We can look into things that maybe you forgot to look into or didn't realize were important. So look. Look at those things. Okay, take a look with a expert in federal benefits. Look at your entire situation and make sure that your plan is the way you want it. Make sure that your income in retirement is where you want it to be. As I mentioned before, one of the biggest things in the general talk about this is the stresses that come along with retirement, the stress of, you know, did I prepare enough, the stress of is this going to be what I wanted? The stress of, am I going to figure out what I'm going to do or I have to move, I have to go somewhere else, I'm going to downsize. And then it goes. There's a lot of stresses that can come with it. I'd rather you walk with your head held high, your mind clear. Your heart fulfilled knowing that you did all that you needed to do. Your 100% confident that your retirement's going to be great on that last day you walk out.

Val Majewski:
Feeling awesome, excited, doing cartwheels because you know that you've prepared as well as you possibly can, and everything is going to be just as you hoped and planned it would be. So I hope you got a lot of information out of this episode. I hope this hit home with some of you if you're interested in and I and I say this all the time, if you're interested in a complimentary benefits review, if you're interested in a copy of my book, There's No Excuse Your Guide to Maximizing Your Federal Benefits, go to our website, Federal retirement Show.com. Fill out the form one of our representatives. If it's not me personally, be reaching out to schedule time to talk to you about your entire situation. Have a list of questions written down. Make sure that you ask them. No question is too little or too big. Ask it all. We want to make sure we get everything out, and we will be sure to be asking you questions as well, and diving into every little corner so that you make sure you're uncovering and laying it all out on the table to be properly prepared. So thank you for taking the time to join me about this episode on retirement planning, and the discussion I had recently at a military installation with a two star general. My name is Val Majewski, again with the American Benefits Exchange. Thank you for watching The Federal Retirement Show, and we'll see you again on a future episode.

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