Did You Save Enough for Your Empty Nest?

Interview with Roger Whitney

Roger Whitney, “The Retirement Answer Man,” explains how to prepare for the “empty nest,” when your kids grow up and leave home. Also find out how to avoid making some of the most common retirement planning mistakes.

Douglas Goldstein:  I am very excited to have, on The Goldstein On Gelt Show, Roger Whitney, who is a certified financial planner. Roger is also known as the ‘Retirement Answer Man’.  Probably the question I get every time is, “how am I going to retire?” If someone wants to plan for retirement, say he’s in his 40s and he feels he hasn't saved enough, what do you tell someone like that to do?

Roger Whitney: When you're in your 40s, that means kids are either in college or entering college. There is a lot of spending that is done at that time. You're just about to enter what I call ‘phase one’ of the modern retiree: you're about to become an empty nester.  The first thing people need to do is to focus on making the right little decisions now.

Douglas Goldstein:  Sometimes people need to save thousands and thousands of dollars and this is a shock to people. After you pick them up off the ground, how do you help them relate to that?

Roger Whitney:  First off, the premise is that you retire at 60 and 65 and you never earn money ever again in your life. That isn’t modern thinking.  60 is the new 40 in some ways. Most people still want to be engaged and to make a difference when they’re 60. They are at the height of their earning years typically. Most people are working longer that they think they will, and not just because they need the money.  It’s also because they still want to be involved in society. What I try to tell this 40-year-old is to figure out how to gain more freedom and independence in retirement.

When I quiz my podcast audience, I ask, “What's your concept of retirement”? They say they want more freedom and independence in their life. That means living life more on your terms and if you approach it from that premise, you start to have more tools other than just trying to stash away a ton of money.

Douglas Goldstein:  This week, a guy called me up. He told me that he was 63, in the high tech industry, and that he had just gotten laid off. He didn’t really have enough to retire.  This was his idea. He had most of his money in stock of the same company that he had been working for. He thought that he would write covered calls against that for the rest of his life to collect income. What do you say to a guy like that?

The Importance of Planning Ahead

Roger Whitney:  The simplest way of thinking of it in the financial sense is to have an emergency fund. The emergency fund for a lot of people seems like wasted money because it's just sitting there earning 0%. When life happens to them, they don't have that financial airbag, so they end up borrowing money, they have to do without, or they manage through it.  But if they had that airbag, they could have really absorbed that shock.

This guy that you're talking about, he didn't plan ahead. He didn't have that airbag in his career, or have a vibrant professional network, or have a side hustle.  You have to prepare for these types of things or stress test so you're better prepared even if you're going to take the hit in some way.

Douglas Goldstein:  So plan early and prepare for life happening to you because sometimes life happens. Sometimes people say, "I'd like to retire early." Do you think that's ever a good idea?

 What Does It Really Mean To Retire?

Roger Whitney: I always challenge what we mean by “retire.” One of my business partners retired in his late 40s. He sold his business and become ‘financially independent’. He traveled the world for three years and even learned karate. He did different stuff and then he was like, "Okay. What do I do now?"  He then became a financial advisor because he was managing his own money anyway and realized that he could advise people and have fun too.

A lot of us baby boomers feel like we've been workaholics. We've grown a family, built a career, maybe in something that wasn't really our passion, and then when our kids leave the house, we think of retirement as finally getting to live.  Finally getting to live doesn't mean you're going to be like your parents on the park bench. You're still going to be in the playground, but now you get the choice to play in the areas that you want to play in, and you can earn money doing that a lot of times.

Douglas Goldstein: I often tell people not to think that they are going to retire from something, but rather to something.

Roger Whitney: That's a really good point.

Douglas Goldstein:  What would you say is one of the worst mistakes that people make when they're planning for their retirement?

Mistakes People Make When They’re Planning For Retirement

Roger Whitney:  Most people focus on what they're running away from and they don't figure out what they're running to. They want to take away the pain but when they get there they don't know what they're supposed to do.  From a financial standpoint, when you get bored you can make lots of big mistakes.

You can shop too much, or buy big toys, thinking that's going to fill the void. You could start a business and put a ton of capital into it, and all those things could really destroy you financially. I think defining what it is you're going to is super important.

Douglas Goldstein: I agree. If you’re not good at business, and you're 60 or 55 and you take your life savings and invest it in a business that you don't necessarily know about, that’s not an investment. It’s a gamble. When you stop having a regular income, you need to have a real retirement plan, which will include a budget. How can people follow you and follow your work?

Roger Whitney: The best way is to listen or check out the Retirement Answer Man podcast. I focus on not just how to create a great retirement but also how to create a great life.

Douglas Goldstein:  Thanks so much for taking the time.