NJCFE Symposium Presentation-12/3/21

1. Five Tips to Flip Your
Retirement Switch
Dr. Barbara O’Neill, CFP®, AFC®
Owner/CEO, Money Talk
Money Talk: Financial Planning Seminars
and Publications
https://www.moneytalkbmo.com/
@moneytalk1

3. Financial Educators Can
Be Millionaires, Too!
(Part 2)
If you “walk your talk”
If you maximize savings opportunities
If you have time and compound interest
on your side
Then, what?

4. Three Book Sections
 Financial Transitions
 Social Transitions
 Lifestyle Transitions
Amazon Link:
https://www.amazon.com/gp/pr
oduct/1620236869

5. Book Inspiration #1

6. Book Inspiration #2
Research presentation at 7/18 ASEC
meeting about Spending in Retirement
Described some retirees with a unique
“problem”: they saved their whole life and
are not comfortable spending
Speaker quote: “We need financial
education to teach people how to ‘flip a
switch’ from saving to spending”

7. Book Inspiration #3
Grasshoppers and Ants in Retirement article
(Finke, Guo, & Johnson, AAII Journal, 6/18):
https://www.aaii.com/journal/article/grasshoppers-and-ants-in-
retirement
Describes thrifty “ants” who spend less in
retirement than they are financially able to
“Habit formation hypothesis”: people get
accustomed to a certain lifestyle and
spending habits are hard to break

8. There are Many “Switches”
That Need to Be Flipped in
Later Life (Transitions)

9. Some Transitions Are Like
“Dimmer Switches” and
Change Over Time
Working
Spending
Investment asset allocation
Downsizing
Disengagement/engagement activities
Simplification

10. Five Financial Switches

11. Spending Down Savings
 Step outside of your spending comfort zone
 Automate savings withdrawals
 Answer some hard questions:
 Why did you amass savings if you aren’t
going to spend it?
 If you don’t spend your money, who will?
 What are you waiting for?

12. Creating a “Paycheck”
 Set up automatic withdrawal plans (e.g., mutual funds)
 Create a bond or CD “ladder”
 Purchase an annuity
Tweak the “4% Rule” for personal circumstances

13. Adjusting to Changes in
Income
 Income will either increase or decrease
If it decreases…there are catch-up strategies:
Work longer or during retirement
Spend less
Consider “geographic arbitrage”
Tap home equity
Reverse mortgage
Sale-Leaseback

14. Managing Income Taxes
 Request income tax withholding services
Consider the impact of RMDs and widowhood
 Determine your new marginal tax rate
 Time elective cash withdrawals
Consider hiring a tax professional

15. Ramping Up Philanthropy
 “You can’t take it with you”
Check out potential charities
 Specify a purpose
 Plan your donations (gifting budget)
Use tax-advantaged strategies (bunching,
QCDs, donor advised funds, charitable trusts)

16. Three Lifestyle Switches

17. Answering the “What
Do You Do?” Question
 Dodge the “R words”; don’t let other people
impose their social clocks on you
 Practice “identity bridging”
Continue valued commitments
Develop a new “elevator speech”

18. Changing Time
Orientation
 Do some ROLE calculations
 Consider adopting an older pet
Designate a pet guardian; set aside money
Spend lavishly on “lasts” (if possible)

19. Changing Mindset:
Invincible to Vulnerable
 Accept vulnerability (e.g., immune system)
Stave off disease and delay
Follow healthy lifestyle recommendations
Get recommended vaccines/screening tests
 “The greatest wealth is health” (Virgil, BC)

20. Questions and Comments?
@moneytalk1
moneytalk1@juno.com
https://www.moneytalkbmo.com/