I am not what the kids would call a "Swiftie," but I recognize talent when I see it!
So how did I end up in the capacity crowd at Arrowhead Stadium last week watching Taylor Swift?
On today's show, we talk about my family's experience at "The Eras Tour" and tie that incredible night into a larger discussion about what money is really for, especially in retirement.
Case Study: "John and Jane"
Of all the questions that folks bring to my team at Keen Wealth, "Do I have enough money to retire?" is at the top of the list. Unfortunately, there's no magic number folks can hit that will guarantee a safe and secure retirement. Everyone's financial situation is different, everyone's retirement timeline is different, everyone's family situation is different, and everyone's goals for retirement are different.
"John and Jane," the hypothetical couple we meet with today, are asking us a better version of this question: "If we retire at age 60, how much money will we be able to spend?" Even better, they came to the office with a list of retirement goals they want to meet.
Here are their details:
John: 58 years old
Jane: 56 years old
Target retirement ages: 60 for John and 58 for Jane
Target Social Security ages: 62 ($2,500/month for John and $1,200/month for Jane)
Annual travel to visit grand kids: $2,000/year
Annual cruise: $4,000/year
Replace cars: $50,000 every 6 years
Household renovations: $30,000 (one-time)
Monthly income needed (excluding goals and health care): $3,000/month
Annuity: $500,000, paying $2,500/month
Real estate: $150,000
401k & ESOP: $1.7 million
Roth IRA: $15,000
Well first of all ... Great job, John and Jane! This couple has done a really impressive job of working hard, saving, and investing. They're also heading into retirement with no debt and they own their home free and clear. And while carrying some debt when you retire isn't necessarily a bad thing, if that side of your balance sheet is clean you certainly have a few more options for getting the most out of your nest egg.
The one big issue that my team will zero in on is John and Jane's health care coverage. If they retire before they're eligible for Medicare at age 65, they'll either need to pay for COBRA to stay on a former employer's health care plan, or go out into the open market for a health plan. Either way, they'll be paying for insurance out of pocket for a couple years, which could cost them more than $1,000 per month depending on their specific health care needs.
But back-of-the-napkin math says that, yes, John and Jane will be able to hit their goals. They have plenty in reserve for those trips and home upgrades. And their annuity alone almost covers the $3,000 of monthly income they're shooting for. Given how healthy and diversified their other assets are, there's a good chance they won't need to take Social Security early to maintain the standard of living they want, which will give them an opportunity to maximize those benefits up to age 70.
In fact, I might ask John and Jane why they "only" want to spend $3,000 per month? Is that level of spending going to realize their dream vision of retirement? If so, great! If not, what other kinds of goals might they consider adding to that retirement vision? Are there any mental or emotional blocks that are keeping John and Jane from spending more, and potentially, enjoying retirement more?
Case Study: Bill Keen and Taylor Swift
Which brings us back to Taylor Swift. And no, I was not one of the folks who spent as much as $14,000 per ticket on the resale market!
A few weeks ago, my wife and I won six tickets at a live charity auction supporting the Kansas City Boys and Girls Club. I wanted to support an organization that's near and dear to Keen Wealth. And Carissa and I thought taking our four daughters to the biggest concert of the year would be a memorable night.
And it really was. I've been to my fair share of shows over the years, but even for a guy who just recognized a few songs, the quality of the production and the connection that Taylor has with her fans was truly overwhelming. Sharing that moment with my family is something I'm always going to treasure. And the fact that buying those tickets also gave back to the Kansas City community only made the night that much more special.
I know from personal experience and from working with so many successful seniors over the years that the older you get, the less important buying stuff and earning more becomes. Doing things you love with the people who matter the most, enriching the lives of others, and taking a few chances here and there on new experiences is a great way for you to get the most for your money. Make an appointment to learn how Keen Wealth's comprehensive planning process could help you have more of those experiences through every era of your life.
Bill Keen is a financial advisor with nearly 30 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he focuses on providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to Forbes, U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.
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