Delivered on: Thursday, December 15, 2022
Striving for Financial Freedom in Retirement
How taking these steps early can help you to retire with financial confidence
- NUMBERS: what facts and figures need to be on your radar
- TIMELINE: what does your retirement countdown look like
- ADVANTAGES: what unique decisions are available to you to give you an unfair advantage over your peers
- MINDSET: what shifts may need to be made to your thinking about your big retirement plan
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Welcome everyone to today’s FedImpact webinar on striving for financial freedom in retirement.
Of course, retirement is a topic that we talk about all the time, so I know that many of you are looking forward to that moment in time, and that’s what today’s session is going to be all about.
Today’s topic was inspired out of an interesting encounter, that I’ll explain here in a few minutes, that really sparked a lot of ideas for how we’re approaching the retirement window.
Our audience today, of course, we’ve got lots of you on here, we want to support you by answering your questions, so the support team is standing by in the Q&A. So feel free to submit your questions there and look for your responses there as well. Handouts are available for download, so you can either go to the handout section, which is right next to the Q&A area and look for a little red dot where you’ll be able to see the handouts, or you can look to the bottom of your screen where we have a link to the handouts as well. Now, as always, this session is being recorded, so we’ll give you instructions on how to get the replay at the end.
Now, at the end, I’ve got quite a bit to share with you. Of course, we always talk about our next topic, but there are some juicy nuggets in this webinar that I know you don’t want to miss, so stay tuned.
I’m Chris Kowalik, the founder of ProFeds. I’m delighted to be here with you today and share a little bit about this idea of striving for financial freedom in retirement and how taking these steps that we’re going to talk about today early can help you retire with that financial confidence that you’re looking for.
Quickly on the agenda, we’re, of course, going to talk about the numbers: What are the facts and figures that need to be on your radar and kind of how you get to that point? The timeline: What does the retirement countdown look like for you and what should you be doing and when? Some advantages, like what unique decisions are available to you to give you an unfair advantage over your peers? And we’re going to talk about mindset. So what shifts might need to be made in your thinking about your big plan for retirement?
I’m actually going to switch up a little bit of this order because as I was building the session, it made a little bit more sense to put these in a little bit different of an order, but definitely a lot to cover today.
What will this webinar will not cover? Most of the time our webinars are taking a particular federal benefit and breaking down all the numbers, facts, figures, charts, calculations and formulas and all of that. That’s not what today’s webinar is going to be about. Those things are important and we’re going to talk about why they’re important in today’s webinar, but this is not going to be a number-intensive webinar you might be used to from us.
The inspiration for today’s webinar
Before I get into the nitty gritty details of the webinar today, I want to talk about the inspiration for today’s webinar. As we talked about and promoted this webinar on last month’s webinar, I mentioned that this idea really came to me out of a trip that my husband and I took. We were out in beautiful Sedona, Arizona. It happened to be for a coaching program that I’m part of as an entrepreneur that we’re going to talk a little bit about. This particular session was where couples came together. This room was full of 60 entrepreneurs and their spouses, and my husband made an interesting observation that really sparked today’s webinar. His observation was that nobody really talked about retirement there. Everyone’s focused on what’s next and what’s the bigger impact that can be made.
Now keep in mind this is a group of entrepreneurs who are ambitious and they’ve got a lot that they want to see happen in the world, but he compared that to what it’s like for him talking to fellow federal employees. That everyone always seems so focused on “How much longer do you have?” like you’re in jail. “How much longer before you’re eligible?” And it was interesting enough for him to say that to me and it made me wonder, do we talk so much about retirement as the end instead of the beginning for the next phase?
As we were sitting in this session in Sedona, I was with my coaching program called Strategic Coach, I want to give them all the credit for this because they’re really an amazing group, but one of the things we focused on was what we call the four entrepreneurial freedoms. The freedom of time, the freedom of money, the freedom of relationship, and the freedom of purpose.
I don’t think that only entrepreneurs should have these things. Obviously there’s a different mindset for people running businesses and having some of those freedoms more naturally, but I think everyone should have the opportunity to have these freedoms, but it doesn’t happen by accident. It has to happen on purpose and being very intentional about what we’re doing.
Strategic Coach has been an amazing program to be part of. The mindsets that they bring to entrepreneurs really come out in a lot of the work that I do, and I’m so grateful for them and their message. But this really sunk in at the couples session for both me and my husband of the importance of these freedoms and how we can be more intentional about what we’re doing so that we can capture more of these freedoms, not just now, but in retirement, too, in that phase of life.
I want to talk really briefly about mindset. I have a little secret about retirement that might surprise some of you, especially those of you who have really been part of the fan club, so to speak, where you’ve gone to workshops, you listen to our webinars, you’re a podcast listener, and you hear me talk about retirement all the time. Here’s my little secret. I have a really hard time thinking about me retiring, and I know how ironic this is, and it makes me kind of giggle because I help people plan for retirement, but when my husband asked me, “What does retirement look like for you,” I kind of froze. Because if you define retirement, and of course there’s lots of ways to look at this, but if at the core, retirement means being put out of use, I don’t know that I ever want to be in that position because I feel like you lose a lot of purpose and there’s a lot that we can do in this life and I want to be in it. In the fight, so to speak.
Maybe a different way for all of us to look at retirement and what I would encourage you to think about is that retirement isn’t the end, but rather what’s next. What’s the next phase look like? Instead of only looking at retirement as a finish line, what is it opening the door to be able to do?
One of the concepts with Strategic Coach is this idea that you want “freedom from” something. Maybe you don’t like your supervisor, you don’t like your job, you’ve just been doing it too long, you’re burned out, whatever. But you have to have the “freedom to” to feel fulfilled, the freedom to not go to work every day so that I can enjoy some of these other things that maybe I haven’t had time to do, for instance. We’re going to talk a little bit about that, but this idea that we just get to retirement and that’s the end, is really sad for me.
I, unfortunately, work with a lot of widows and we get to a point that sometimes we have to have really hard conversations with widows of people who retired and died days later after they retired. And that is a heartbreaking thought, but what are we doing to make sure that our future continues to be bigger than our past, that your federal service, or in my case, the work that I do as an entrepreneur, that’s not what defines me, but what am I working towards? What am I trying to get freedom to be able to do?
I want to start with finding purpose. And I don’t want to get all psychobabble or anything on anybody, but what gives your life meaning? What is it that if you had the freedom to do, you would do on a regular basis? What’s that purpose look like?
Interestingly, all four of those words have seven letters in them– finding purpose after federal service. And I would encourage you as just a little bit of a hopefully fun exercise is if you were free from the shackles of employment (maybe you have to go into an office, maybe you’re stuck at home in telework, you have certain hours you have to be there, maybe you have a supervisor relationship that’s challenging, whatever that is), if you could free yourself of that, what purpose would your life serve after that point? And what needs to happen to be able to make that come true?
When we think about finding our purpose, we’re talking about things like nurturing relationships with your family and friends. A lot of people want to spend more time with their spouse, they want to travel, they want to be a part of their children and their grandchildren’s lives. All of those things are so important. Others want to retire from federal service but then pursue other professional interests. You might have some follow on work that may or may not be related to what you did in federal service, but there’s maybe more that you have to give, professionally, that is fulfilling to you that comes after federal service.
Next, and I think this is the part of retirement that everyone thinks about, is just enjoying the fun stuff; the hobbies that you want to do that you find fulfilling, things like volunteering for causes that you care about. These are all great purpose-driven goals that people could have in retirement. But if you’re not thinking about these things on a regular basis, you will involuntarily think of retirement as the finish line. When if you’re looking at all of these opportunities that are available to you after you leave federal service, it really frees up that “freedom to” idea. It’s not just the “freedom from” the job, but it’s the “freedom to” be able to pursue all of these things that you really want to be able to do.
I have some observations that I think I have an obligation to share with you as we’re thinking about this concept. The first obligation is that some people retire too early. The grass isn’t always greener on the other side. And that’s not to say we want people to work forever, we don’t, because there’s a negative connotation to that, too. But if we’re not financially prepared and we leave as a knee-jerk reaction to maybe a bad experience at work, or maybe you had a supervisor challenge or a coworker challenge or whatever it might be, if you retire too early, you might find yourself financially unprepared to live the retirement that you want.
On the flip side, there are plenty of people who retire too late and they work and work and work and work and they finally retire and they find that they’re not really up for traveling. They’re not really up for being very active in retirement. They’ve lost their sense of purpose. They think it’s just the end. That can be really dangerous, mentally and relationship wise, when you’ve kind of lost the future. It feels like it’s closer to the end.
Losing that purpose in retirement can happen whether you retire too early or too late. But if we’re not intentional about what we’re trying to get to and defining that purpose for us, then we can kind of be a little bit lost in retirement.
Here’s something that I want everyone to really hear clearly, and that is many people who are unhappy in retirement weren’t clear about what they wanted and what was required of them to have it. Because us wanting a certain lifestyle in retirement or a certain activity in retirement is great, but what is required of us, in our effort today, to put us in a situation where we have done what was required of us to be able to have it?
That’s really the next section that we’ll talk about, which are numbers. What does financial freedom mean to you? It’s going to mean something a little different to everyone, but all along kind of the same concept here.
Some would say that financial freedom means that they get to live comfortably instead of just surviving. That they get to enjoy kind of day-to-day things without worrying about money. If they have children or grandchildren, they have the freedom to be able to help them, not just in times of peril, but in times of great opportunity. Do you have a grandchild who’s starting a new business that could use some funding? Do you have a child who is pursuing a doctorate degree that might need a little financial help? There’s all sorts of great opportunities that our children and grandchildren can have that we can start, that we can help along the way financially. If we have true financial freedom, we have the ability to do that. Now, financial freedom doesn’t mean you have all the money in the world, but that you have the ability to live out your life in a way that you find really fulfilling.
Others would say that financial freedom is being able to leave a legacy to your family (so this is after you’re gone) – and not just to your family, but your community as well. What do you leave behind after you’re gone? That might be (financially speaking), it might be impact. There’s lots of ways to leave a legacy, but if we’re thinking financially speaking, do you have a goal of what you’re leaving to your family?
We also don’t want you to be in a situation where you lived so frugally while you were in retirement, in the hopes that you leave this big legacy, but you didn’t enjoy the fruits of your labor or that you didn’t extend some opportunities to your family (helping bring families together for the holidays, going on vacation, whatever that might be), where you’re utilizing the financial freedom that you have to bring your family or your community together in a way that you can see while you’re still here.
Others would say that financial freedom is being able to generously support charities that you care about. That’s something that’s important to me. I enjoy being able to support causes and charities that are important to me. I would really hate to be in a financial situation that, kind of living the paycheck to paycheck thing, where you maybe don’t have the opportunity to support those types of charities that have meant something to you.
I would ask you, what do all of these things have in common? The answer is they all cost money. In some way, shape, or form, they all cost you something. So if you want the freedom to be able to do these things or whatever might be on your list, we have to get the money right. None of this financial freedom is possible without knowing your numbers. And it’s really hard to live full-out if you don’t have a good money plan. It’s really hard to live full-out if you don’t have a good money plan.
We can want all of these things, but if we haven’t done the work, if we haven’t done what’s required of us to get it, we won’t be able to have that type of satisfaction once we retire from our jobs. Whether that’s you and federal service or anybody out in the private sector, whatever that might look like, we have to get the money right.
Let’s talk about timelines. We’re often asked the question “When’s the best time to start planning?” And if you’ve attended our sessions, you know that this is a little bit of a double-edged sword. On one hand, the best time to start is a long time ago, but the next best time to start is now. If you want that shade tree that you see here on the screen, planting the seed today doesn’t really help you, you really needed to have done that 20 or 30 years ago to give time and opportunity to work in your favor.
But I would also offer it’s never too late, too early, or too often to plan. Don’t count yourself out of the race if you feel like you’re too behind. Everybody is further behind than they really wanted to be or what they maybe had the capability of doing. But if you put time on your side, that is always a good strategy. This is true if we’re talking about saving, investing, buying life insurance or buying long-term care insurance. All these are just examples of financial tools that, if given time, can work in amazing ways. But if you wait until the very end when you’re about ready to retire, it doesn’t work that way. So please don’t wait until the time that you plan to step into retirement to start planning. Do that as early in the process as you possibly can.
Here’s something … The fact that you’re on this webinar tells me that you’re investing some time to be able to get your head right about retirement and maybe look at different strategies or get knowledgeable on benefits and everything, and that’s all great. But invest the time to get retirement right.
Most of you know we do retirement training for federal employees, so these are full day training sessions, and most agencies allow their employees to attend on the clock as part of their training, and so they’re not charged annual leave. But every once in a while we’ll have an employee email us and say, “Well, I wanted to go to this session, but my agency won’t give me the time off, so I have to cancel.” And it makes my head want to explode because this is your retirement. Is it not worth a day of leave if you really have to take it to get it right? Invest the time to get it right. Of all the things you spend time on, this phase of your life has to be a really important one.
Because if you don’t invest the time to get it right, all you can say in retirement is, “Well, crap, I didn’t get this right and now I’m paying for it.” You don’t want to be stuck like this poor cow. Invest the time to get this right and you will be very grateful later in life that you took the time to really invest in this process and, again, get it right.
CHANCE FAVORS THOSE IN MOTION
Let’s talk about some advantages. I am a big believer that chance favors those in motion. People who are idle, who aren’t engaged, they’re not making decisions, they’re not moving the needle – I don’t think the universe conspires to help you. It’s those people who are in motion, who are trying to do the right things, who are investing in their own planning, who are not afraid to make decisions and adjust as necessary. Being in motion is so important, especially when it comes to money. We can’t sit on the sidelines and pretend like it’s all just going to fall in place.
When I think about the advantages, I want to ask a couple of important questions. The first is, do you take responsibility for your own retirement? It is not the government’s responsibility to give you a great retirement. It’s not. It’s your responsibility to create the atmosphere that allows retirement to be all you had hoped for. But it takes your involvement, it takes your action. Do you take responsibility for your own retirement?
The next question is what can you be doing today to put yourself in a strong position to retire on your terms? Not because the government told you that you were eligible, not because some forum, some Facebook group that you’re on says you’ll be fine and that you should retire as soon as you’re eligible, or that you should work forever, whatever that might look like. What are you doing today to put yourself in a strong position to retire on your terms? To have the retirement that you personally want?
And this next bullet, I kind of mentioned this, who are you taking advice from? Are you so afraid to get advice from financial professionals who do this work for a living, that you turn to your peers or things like a Facebook group to get advice from people who don’t know you, who will never take the time to get to know you and your financial situation? But you think that it’s easier that way. And folks, these are hard questions to ask, and they’re probably hard questions to answer, but if you want a unique advantage over your peers, you have to be thinking this way.
The last question is one that we ask in our retirement workshops. Are you being honest with yourself about the reality of your financial situation? All progress starts by telling the truth. And if you are not honest with yourself about the financial situation that you are in today and the one that you have created for yourself in retirement, the chances of you actually getting the retirement that you hoped for are very slim.
This is just me being very upfront. I want to see you guys succeed. I want to get those messages from feds like, “I went to your workshop”, or “I went to some of your webinars and the advice that you gave about being active and being in the driver’s seat of my own retirement really benefited me. And I’m so grateful that I had that chance to learn before I finally retired.” I love getting those messages. But oftentimes we get messages from people who never did the work. They never took the time to learn these things from qualified people. They never took advice from professionals that can assist in the goal that you have and then they wonder why retirement doesn’t feel good. They’re the cow on the fence, right? “Oh crap, I don’t have enough money. This wasn’t what I expected it to be.”
There have been a lot of lessons that I’ve had in my life. I’ve had time in the Marine Corps, I’ve worked for a financial planning company, I’ve obviously had ProFeds, and certainly on the personal side, layer that on top of the professional stuff. There’s been a lot of lessons that I’ve learned over my time on this earth. One of the lessons was from a POW.
WHAT A POW CAN TEACH US ABOT BEING HONEST WITH OURSELVES
This gentleman’s name is Barry Bridger. Many of you may have heard of his story. He’s a Lieutenant Colonel in the Air Force. Barry was a pilot. He was forced to eject out of his plane over Vietnam. He was captured as a POW and held for 2,232 days at the Hanoi Hilton. Many of you have heard of John McCain. Barry Bridger was John McCain’s cellmate. And in case you’re curious of the math, that’s over six years as a POW.
When Barry was released, he continued and went on to retire from the Air Force, God love him, and when he retired from the Air Force, he worked for a financial planning company that served the military. I worked with Barry at Fort Leavenworth, Kansas, and there was a situation that I firsthand experienced with Barry that I want to share with you because I think it tells us a lot about what we can learn about being honest with ourselves when it comes to money.
Barry, like I said, was a financial advisor. He had a client and client family, husband and wife in his office, and the wife storms out of the office just after maybe 15 minutes being in with him. She storms out of the office and I catch her and I’m like, “What’s going on? What happened?” She said, “I can’t believe what he just said to me.” And I said, “Well, what’d he say?” She said, “He just told my husband and I to pick which one of our kids isn’t going to college because we’re not going to make it. We’re not going to have the money to be able to afford it.” And I paused, and I looked at her dead in the eye and I said, “Is he right?” And she said, “Yeah, he’s right. But he didn’t have to say it that way.”
And while I can appreciate her perspective that no one wants to feel like they haven’t done the work necessary to get the end result that they wanted, in this case, it wasn’t about retirement, it was about funding their children’s education. But I shared with her, “Barry was a POW for six years. He lost six years of his life. He doesn’t have time to beat around the bush with people. He wants to be really straight and candid with people, sometimes in a little bit of a gruff way, but he wants to be upfront and honest so that people know and they can take action. It does you no good for Barry to lie to you and shake his head up and down like, ‘Nope, looks like you’re doing fine.’ And then you get to a point that you’re trying to fund your kids’ college, and it turns out you don’t have enough money.”
When I shared this with her, I can see the guard kind of come down and she was like, “I know. I know. It’s not what I needed to hear today. And I thought we were in a better position.” And I’m like, “Listen, you have time. Your children are young. But what Barry is doing is trying to help you to realize and be honest with yourself about the reality of your financial situation so you can take action on it.”
I’ll never forget this lesson from Barry, although it wasn’t intended to give a lesson to me, it did based on the fact that I was involved in the situation, but it gave me so much respect for him that even though it was a little bit gruff, a little rough around the edges, it was the right message for that family. They needed to hear that because without someone on the outside, who didn’t have a dog in the fight, being honest about what was the reality for that family if they did not change their course, that message rang loud and clear. Again, perhaps delivery could have been a little different, but he needed to strike them between the eyes so that they understood they needed to take action.
It’s such a powerful message. I’ve seen this man deliver a keynote message to the Command and Staff College out at Fort Leavenworth. He will bring a room of grown men to their knees in tears with his stories. It is impressive what he went through. But all that time that he spent, those six years as a POW, it changed his perspective. He looked at the amount of time that he had been given in his life to be able to help people. He didn’t have time to beat around the bush. He just wanted to get right to it and help as many people as he could. I’m very grateful for that message from Barry and all the lives that he changed. Many of you may know Barry if you’re interested in military history and that type of thing. But really a powerful message.
I wanted to share that with you because sometimes we have to hear tough news. And what we do with that tough news will determine what the end result looks like– whether we use it as a reason to feel like a victim or we use it as a reason to really motivate ourselves to take action.
All right a quick wrap up of today’s session. I’ve talked about today, if we want financial freedom, we have to take the action to go get it. It doesn’t just happen automatically. It doesn’t happen on accident. It has to happen on purpose.
I encourage you to attend one of our workshops. If you’ve never been, or it’s been a while since you’ve attended and you need a refresher, use this opportunity to double check your retirement math. Many of you will uncover that you have a big retirement math problem that you don’t know how to solve. It is our responsibility to help you to be able to take that action and do so with people who actually understand how your benefits work and the solutions that are available to help you get there, whatever that goal might be.
Attend one of our workshops. This is an in-person training session. There is no cost to attend. And of course, we cover all the federal benefits topics and the decisions to be made about each of those benefits right there in the workshop.
Here’s probably the best part of the workshop. It’s that you have an opportunity to get some one-on-one help after the workshop has concluded. You’ll have an opportunity to be able to meet face-to-face to address your issues, talk about your plans for retirement, and what your numbers look like.
I would encourage you between now and then, think about that purpose. What is the thing that you want the freedom to be able to do in retirement? You can get kind of clear on what that looks like and some financial obligations that come along with those items that are on your list.
You can find all of the workshops available at fedimpact.com/attend. You’ll see these listed by state, and hopefully we’ve got one in your area. They’re all across the country. I know we can’t be in every city throughout the country, but hopefully you can find a workshop that is relatively close by.
I assure you this workshop will be worth your time, worth your attention, and worth your action. There is a ton that you are going to get out of this workshop as far as the knowledge base, but then allowing that momentum to carry you forward into taking proactive steps to create the retirement that you want is so invaluable.
Now for today’s session, the handouts and the replay will be made available to everyone. We will send out that message tomorrow so that you’ll have that nice and handy.
Now for our next webinar, this is going to be a fun one. Everybody’s heard of getting your ducks in a row, but let’s talk about getting your docs in a row. So January 20th, first webinar of 2023, we are going to talk about how to get yourself organized before leaving federal service. There are some lessons learned from folks who have recently retired who are like, “Oh my God, I didn’t even think to do those things before I left. And now that I’m no longer an active employee, I don’t have access to a lot of these documents.” We’ll talk all about how to just get organized, get the documents that you need so that you have access to them in retirement.
You can sign up for that webinar just like you did for today’s at fedimpact.com/webinar. And of course, we look forward to seeing you at a workshop, and, of course, at the next webinar. I appreciate the opportunity to be able to talk with you today on a little bit softer of a topic versus the hardcore numbers that we’re typically talking about. I felt so inspired to give you this message based on that trip that my husband and I had to Sedona, and I felt compelled to share some of these insights with you that may have kind of passed you by a little bit, or maybe you haven’t given a lot of thought to that I hope is helpful on your retirement journey.
Thank you all so much. Hopefully we’ll see you at a workshop or next month’s webinar.