Become a Creator today!Start creating today - Share your story with the world!
Start for free
00:00:00
00:00:01
Simple Step: Managing Retirement Accounts
231 Plays2 years ago
Managing your retirement accounts starts with the basics: have a number, know what it'll take to get there, and have a way to know whether you're progressing as expected. In this Simple Step, we're talking about that process, wanting more than "set it and forget it", and letting the math of it all be your friend.
Need help in this area? Hit us up at podcast@uncommonwealth.com.
Recommended
Transcript
Introduction to Living an Uncommon Life
00:00:00
Speaker
Everyone dreams of living an uncommon life and the best asset you have to achieve your dreams is you. Welcome to the Uncommon Wealth Podcast. We're going to introduce you to people who are living uncommonly. We're also going to give you some tools and strategies for building wealth and for pursuing an uncommon path that is uniquely right for you.
00:00:27
Speaker
Hello and welcome everybody
Practical Intentionality for Wealth Building
00:00:28
Speaker
to the Uncommon Wealth Podcast, where I'm your host, Phillip Ramsey. And I'm Aaron Kramer. Thanks for tuning in. We've got a simple step for you. We like these things. They're under five minutes. They're fun. We like to talk, so we really have to be intentional of what we're talking about. It's really hard for me. One thing that I wanted to mention and to give people almost like a
00:00:45
Speaker
public service announcement is to change your batteries in your fire detectors. They always go off at the wrong time. That's not the simple step. So we're going to add that as a bonus. That happened to us yesterday about 11 45 at night. All of a sudden it was like low battery and you're like, which one is it? You know, so all the chirping,
Retirement Planning Essentials
00:01:03
Speaker
change your batteries in your fire detector. Yes. In your house. Okay. That's not what we're talking about. Here's what I do want to talk about. Uh, retirement accounts and everybody has them, but they have no idea if they're on track or off track.
00:01:15
Speaker
Yes. So what you need to do in order to do this is try to figure out what you need or what you'd like your retirement account to be at when you're ready to retire.
00:01:26
Speaker
Okay, then you need to backtrack what kind of percentage rate of return do I need every year, and then I would say make an Excel document and start tracking that. Yeah. The reason why I say this is because it's important. It's important to see if you're on track or off track, and it's important for you to then tweak if you're off track a couple years in a row. You hear that? Not one year. Sometimes we're going to have down years. That's just going to happen.
00:01:50
Speaker
But for the most part you need to know like hey on average we are on track for retirement for this number to be what we want it to be. This is something that we do at uncommon wealth partners with all our clients that pay us for financial planning fee. Every year we have a snapshot of what it should be after we've built this glide path for them down to their
00:02:09
Speaker
proverbial runway, we wanna make sure that everything's on track. So that is my,
Real-Life Retirement Tracking Example
00:02:14
Speaker
I guess, thing I wanted to talk through, is why is it important? Track your retirement. I know there's a client about it. His name's Kevin Burke, rock star. Every quarter, he just, hey, what's my numbers? I'm putting it in my system. He tracks it, and I love that he tracks it. That's awesome. Go ahead, Aaron, what do you think about that? That is great. I think there's a couple things you gotta take into account.
00:02:33
Speaker
When you're tracking your numbers and what you want it to be and want it to grow every time, we gotta take into account things like, you know, these past few years, not these recent years, but I guess like go about three years, four years back, when we were getting really good returns in the market.
00:02:49
Speaker
Well, guys like that also helped the average of what we're kind of experiencing the past couple of years. So you see it down, you contributed to it, that's great, but look at what your average return is, but also take into your real return, which is like taking into account
00:03:07
Speaker
What is inflation? Yep. And this can be active or this can be completely passive. You can make a sell document that shows you like what every year growth rate should be, whatever you want it to be. You can
Navigating Financial Planning Challenges
00:03:19
Speaker
even say 25% if you want that to be that. Say you're probably going to be disappointed. But then you can also kind of remember what you're contributing and what your employer is contributing if it's a 401k. Yeah. So there's a lot of factors that go into it.
00:03:32
Speaker
And again, if you don't want to do this, we can totally do this for you. Obviously we charge, that's kind of our main business. But this, you can totally do this. And I think it's important to do it. Now you can have an active where, okay, one year you have a 20% rate of return. Yahtzee. Fun. What does that mean for the rest of the years remaining? Does it mean like, Hey,
00:03:50
Speaker
I wouldn't change the final number because you're never going to have enough money there. So the final number is what it is, but if you wanted that number, what does it make that you need to have on average for years moving forward? If you have a 20% rate of return, chances are that moving average will go down. You need 5% for every year after this. Let's say you have another 20%.
00:04:10
Speaker
Okay, now you only need three and a half percent rate of return to hit you to your ultimate number, okay? But if it doesn't, which we know, and we've known for the past couple of years that it's a little bit choppier, that may increase your rate of return that you need to hit your magic number. These are all things that you can contribute and you can start kind of monitoring tracking. I think it's a really
Staying Objective in Financial Planning
00:04:34
Speaker
good exercise. I hate the saying, set it and forget it.
00:04:40
Speaker
Don't do that. But you need to take the emotion out of it as much as you can because money is emotional. Yes. So how can you take the emotion out of it? I think this is a good way. Keep it to the math. Keep it to the math. Yes. Take the emotions out of it. It's factual. Keep the math, the math problems, you know, and leave the emotion out of it.
00:04:58
Speaker
And like you said, like, yeah, if you get 20% one year, maybe you can pull back a little bit. And if you're young, just know if you're on like we are, you know, it's one of those things. Yeah. The Rocky years are coming. Well, good thing we had those 20% returns. Yeah.
00:05:14
Speaker
You know, they'll help keep us on track, right? But try to put some
Long-Term Financial Goal Setting and Resources
00:05:18
Speaker
kind of performance metrics on your accounts. I think it's going to be helpful for you and your longevity of trying to figure out what is your plan. Yeah. We're right here. If you need any questions answered or anything like that, or like, Hey, what should be my ultimate number? There's calculations for that too. Yeah. There's so many calculators online for free.
00:05:34
Speaker
Yes, so utilize those, utilize us if you'd like to. Yeah. You can listen to Uncommon Wealth podcast. I've been your host, Philip Ramsey. And I'm Aaron Graham. We'll next time go be Uncommon. Thanks. Thank you. That's all for this episode brought to you by Uncommon Wealth Partners. Be sure to visit uncommonwealth.com to learn more about our services. Don't miss an episode as we introduce you to inspiring people who are actively pursuing an uncommon life.