#115 Essential Steps to Secure Your Federal Retirement: What You Need to Know

Micah Shilanski  00:00

Hey, welcome to the Plan Your Federal Retirement podcast. I’m your co host, Micah Shilanski and with me is a great financial advisor, Christian Sakamoto, Christian, thanks for joining us today. 

Christian Sakamoto  00:13

Hey, Micah, how you doing? 

Micah Shilanski  00:15

You know what I am doing fantastic. We are recording this prior to the election, so fair disclosure. Don’t spoil it for us on what took place. But a Christian, I’m excited about post election, so I quit getting so many sticking text messages like, that’s what I’m most happy about. 

Christian Sakamoto  00:32

Just getting bombarded all the time, yeah, that’s always fun. Yeah, no, I’m excited to be here today. We’ve got some real life client questions as we’re meeting with our clients this time of year, so yeah, I know you wanted to chat through those today. 

Micah Shilanski  00:44

That’s what I thought was so great about this, right? The end of the year, as you know, is such an important time in our planning process. At least two times a year is important in planning, it’s the spring of the fall for us, but now we’re going through the fall time, and what I love about the fall is we have 10, 11 months under our belt, we have a really good idea on what’s already taken place for this year, so we can have some really big impact into the next couple years, of things we should be thinking about, right? And saying, all right, what happens do we need to set in place, what things do we do, we’re now one year closer to retirement or one year further into retirement, right? What have we learned about this, and how do we keep going on that successful track? So fall planning, whether you work with a financial planner, you do it yourself, you got to carve out time for your fall planning to review. 

Christian Sakamoto  01:27

Absolutely, and in some cases, it’s really that calendar year, especially when it comes to tax planning, that we have to be making these decisions, whereas sometimes we can wait to the following year, if we were making an IRA contribution or whatnot, but there’s certain tax planning that we have to do in the calendar year itself, so yeah, it’s a really good time to be thinking about it.

Micah Shilanski  01:49

100% correct, so what we thought we would do is just share some real client questions that we had coming up during these meetings, or at least the concepts that were coming up with clients, because our thought is right, if our clients have these questions that you are listeners do as well, now our clients do listen to the podcast, so just to be really clear, we’re not sharing any private information, and the questions that make it to the list are the ones that we get repetitively, so when we start getting multiple clients asking the same thing, which would make sense, right? It’s federal employees planning their retirement, when we start getting multiple clients asking the same question, it’s kind of a little trigger for Christian, I’d be like, aha, this is something our audience was probably worried about as well, and some more information that we should share 

Christian Sakamoto  02:28

Absolutely, so boy, every meeting, we’re always talking about cash flow, right? And

Micah Shilanski  02:33

The heartbeat of retirement, absolutely. 

Christian Sakamoto  02:35

Yeah, it is, and so I know I’m very intentional about that in our meetings, and so as we’re going through those, I didn’t see too many questions come up, a lot of maybe rentals that came through when it came to the cost of goods nowadays, going to the grocery store, seeing that bill go up, spending money on gas and all these things, do we’re seeing some of that inflationary impact, and the new COLA was just announced as well. I’m sure you saw it as two and a half percent into next year, so we’re having some of those cash flow related questions that come up, and discussions on how to plan. Did you get any cash flow questions as well? 

Micah Shilanski  03:16

Yeah, cash flow is going to be really important, right, especially as our spending goes up for whatever reason, right? Inflation is definitely a reason for it to go up in grocery bills, but it’s a question about, hey, are we being intentional about where our money goes? Because I’m guilty, I’m not blaming anyone else but me, I am super guilty as Christian, I will get on the you know, this is normal, it’s an old hat kind of thing, and I’ll personally start spending money not paying attention to really where it goes, and then all of a sudden, I look at my Visa bill the end of the month, I’m like, who the heck spent all this money, right? And it just is bigger than I thought, so it’s just one of these things that we got to be diligent in awareness, I don’t like the budget work, it’s more awareness in our categories of spending, how much are we spending in these different areas? And another big reason this is important, I came up with a couple of clients is that they’re thinking about moving, whether it’s moving out of Alaska, whether thinking about downsizing right that next stage, and they’re like, all right, great I think I’m going to sell my home and maybe build another house, and I know Christian, you have some firsthand experience with this we’ll talk about in a second, but when we’re going to build a house, sometimes that’s a little bit of an eye opener or shocker for clients, because the cost of building has gone up so much post COVID. 

Christian Sakamoto  04:27

And I’m in the middle of our house build right now, and hopefully over the halfway point, and so totally see that, and I agree here in 2024 the cost of that, so some of those costs maybe are just the acquisition of the land and then the cost to develop it, if you bought raw land, like my wife, Susie and I did, and then as you’re going through and planning that house build, you have that number you get from your builder, or whatever you’re using that generally doesn’t include some of the contingencies that can come up, and so maybe that’s what you were talking through with. 

Micah Shilanski  05:02

That generally doesn’t include, that never, never includes.

Christian Sakamoto  05:08

Fair enough. 

Micah Shilanski  05:09

Yeah, well, you’re right. So one of the things I always talk about with clients, and it’s hard to grasp our mind around right? Because I understand that we’re hiring a professional, we think we’re going to know what the costs are I’m not trying to blame all the builders on this, but whether we’re buying a house or building a house, there’s unexpected things that are going to come up, so especially if we’re building what I love to do is, when I’m meeting with clients, to say, hey, whatever your budget is, cut it down by 25, 30% and give that number to the builder. Okay, what does that mean? Let’s make my math easy. Let’s say you’re going to build a house for $500,000 is your budget, not the land and everything else , just the house build awesome. We need to cut at least 100 grand, if not 150 from that and go to the builder until we have a $400,000 budget to build the house. Why? Because if you tell a builder you have a $500,000 budget, they will blow all $500,000 oh, by the way, here’s these extra things we need to pay for, which will be another 20 to 30% at the end of the day. Now you may not believe me, and that’s okay, and I hope I’m wrong for you, I hope that doesn’t happen for you, and you’re able to knock this thing out of the park and not go over budget, that has not been my experience, either personally or with my clients, so we got to be really diligent in this, and Christian This is why it comes back to a cash flow question, right? Of saying, okay, when I move to this new location, when I buy or build a house, at the end of the day, how much cash flow am I going to have to do the things that I want to do, and the misconception is I’m going to sell my house, take that money, go buy somewhere else and have all of this money left over, that doesn’t happen very often. 

Christian Sakamoto  06:43

Right, if you think about it, when you sell your house, you’re going to have if you own it, clear and free and clear that’s a different story, but if you have a mortgage, you have to factor the Delta there, but also the closing costs, so if you go around and turn to buy a smaller house or build a smaller house, boy the markets that we’re seeing today in the real estate market are so elevated right now, so great, you sold your house at a premium, and then you have those closing costs, but then you go try to buy something, you might not walk away with as much equity as you might have thought, if any. 

Micah Shilanski  07:14

Yeah, so important to get the real numbers right, and this is an our opinion of the numbers, this is the real numbers, so awesome I reach out to a real estate agent, and I get a CMA at Current Market Analysis, we had a client do this, and the CMA came back $100,000 less than what they think they can sell the house for, and I’m like, okay. I was like, great we’re gonna take the real estate agents numbers for planning purposes, if you want to list it for 100 grand higher I mean, rock on. Let’s go ahead and do that and see if you get it, but for planning purposes, we got to get the pulse of the market, which is actually happening, so if that’s 100 grand less, that’s what we need to take in our planning purposes so often, Christian, I look at my house and I’m like, my house is amazing, it is the best house ever, right? And I love it so much. It’s worth all of this money, and I emotionally put this great value on the house, which to me, it could be worth that, but the value of something is what someone else is willing to pay, so if you’re a tax assessor out there looking at my house, hopefully other people don’t want to pay nearly as much for my house, or that way down, right? So there’s the juggling act that we have, but in all seriousness, we real numbers, so I love your thought, what could you really sell the house for, what’s the closing cost estimate, are there taxes on the house or not, right? These are things we got to figure out before we start spending the money in our mind on other properties. 

Christian Sakamoto  08:32

Oh, yeah, absolutely, well, another thing we’ve been chatting through with clients and questions that have come up are related to the markets, right? Real estate markets are up, but so is just the financial markets, so we’re seeing, as we’re meeting and reviewing with clients, really excited to see it, for most of them, increased TSP values, and we’re recording this in October of 2024 and that’s on the year, what was the TSP C fund at for the year, do you remember? 

Micah Shilanski  09:01

Fantastic. I just grabbing this right off the TSP’s website, oh it’s over 22% as of the date we’re recording, which is outstanding. 

Christian Sakamoto  09:10

Yeah, yeah, exactly. So lot of clients are happy right now, as it should be. 

Micah Shilanski  09:16

Now Christian, if I could real quick, I just pull, I’m looking at the TSP website, so pull it up the average, or since inception, I’m going to say that’s the average, the average rate of return since inception of the TSP, which is 1988 the C fund, C as in Charlie was 11% right? And so, and I know our listeners know this I know you guys know you’re very savvy, right? But how averages work if presently, the C fund is up at 22% but the average is 11% in order for that average to stay consistent, what’s going to happen over time? What has to happen?

Christian Sakamoto  09:49

Goes down. 

Micah Shilanski  09:52

That return has to go down at some point, I’m not saying the markets are collapsing and it’s all going to 80s, and am asking, that’s not what I’m saying, I’m just saying, in order for averages to work, right, we’re going to see that return rate go down in the future. This isn’t a bad thing, this is a good planning opportunity of saying, hey, let’s make hay why the sun is shining and right now the sun is shining, but let’s not be greedy about that, right Christian? 

Christian Sakamoto  10:17

Oh, absolutely, yeah. So we look at the numbers in their they’re up, we say, oh, that’s awesome, but absolutely that conversation that you just shared is putting it in perspective that essentially what goes up must come down at some point, and so we have to really look back at again cash flow, if we’re working right now, no big deal, we have many, many years until retirement, no big deal, we’re still earning our paycheck. It’s once we’re within a certain number of years that certain window between working and retirement, or if we are in retirement, how does that affect you with your retirement dollars, and so those are the real life conversations that we’re having, whether it was with the pre retirees or those who have retired, and so we have to turn it back to cash flow, and what are your cash flow needs? If, as a household, for example, you need to spend, you know, $8,000 a month, and we know what your pension is or what it will be, and we know what the FERS supplement is or what it will be, and eventually, Social Security, there might be a little gap there that we’re looking to fill between the fixed income and TSP or other retirement accounts, and so as the markets are up right now, we can quantify how much we can safely take out of those investments to fill that gap, but we have to remind our listeners and our clients that, again, markets are up right now, that’s awesome, but not if, but when they go down again, here’s our plan to weather the storm. I

Micah Shilanski  11:47

I love that, not if, when they go down and Christian, just to pull on that thread a little bit, what I love about that is it’s a that concept is a dynamic plan for each individual person. One of these I don’t like, right, is when we stereotype everyone and say, great news, everyone at 60 should be invested in this. If you’re going to retire, you need $2 million set aside for retirement, or whatever, USA today came out with a couple weeks ago within their survey, right? And that’s just not accurate. We’re all different in how we spend and what we do, so this distribution planning is very it’s a formula which is customized to you, but it works really, really well, do I love that aspect of let’s not get greedy if we’re close within retirement, within the next five years, when you have a serious conversation about saying, how much money do we need to pull out of our investments to live and do we take some off the top, take some out of the equities, out of the growth, move them over into some safer investment, something’s still going to grow, but maybe not as volatile as the market. Now is that saying the market’s going down? No, that’s not what my statement is at all, this is about being a prudent investor and a diversified investor, and this is true diversification is making sure that the money I need to spend is available and the money that’s your earmarked for longer term is working for me in the longer term.

Christian Sakamoto  13:04

Right, so if you have a decade or longer until when you want to spend this money and retire, yeah, maybe, maybe we’re not looking at taking some off the top of our winnings and moving it into cash right now, because we’ve got such a long time horizon perfect, but if you’re within that five year window, as you’re saying, of retirement, and that’s when you’re going to start spending this money, that’s when we have to get really intentional, so could you talk a little bit about what we want to see outside of the market as we get closer and closer to retirement? 

Micah Shilanski  13:35

Absolutely! Now we do a whole the podcast unfortunately, we probably don’t have time to go into super detail, and it’s all let’s hit it at high level, and I know we have different classes on our website, planyourfederalretirement.com that we can jump into, but our basic rule of thumb, this is a rule of thumb, right? So that means it has to be a little bit of an average over time, and everyone’s different, but our basic rule of thumb is, any money you need to spend in the next five years doesn’t belong invest in the market. Why do we say that? 2008, 9, 10, 11, 12, it took roughly five years for the markets to get back to even, so if you were retired in a 2008 if you’re 100% in equities, the market fell roughly 46% in a year, more than that intraday, just round numbers here, that’s half right, half of your money is gone, and now, if you’re retired and you’re selling every single one, sell, sell, sell, sell while the market is falling, you devastate your retirement, so we need some diversification here, and so we need money available outside. Maybe that’s cash, money market, structured products, CDs, short term bonds, right? There’s a list of different things we can look at, but we need something more available that’s not subject to that market volatility. Now we don’t want to go buy a 10 year CD, right? Because, yes, the 10 year CD is not subject to as much market volatility, but it’s locked up for 10 years, right? So we need a short term instrument that when we need the money, it’s available to us. 

Christian Sakamoto  13:42

Well, I love that, and it’s that reminder that we’re sharing with clients in that meeting and making it apply to their exact situation, because we can talk about it with a broad brush, but we really have to understand the unique person that we’re meeting with to see how it applies to them. 

Micah Shilanski  15:19

100% 

Christian Sakamoto  15:20

We’re also meeting right now, like we mentioned in the beginning, a lot of questions are coming on tax planning, so as we said, now’s a good time to be talking about it, just for this time of the year, so I can start, I can share an example. 

Micah Shilanski  15:35

Go for it, I love taxes you know that, go for it.

Christian Sakamoto  15:38

I met with two particular clients this week, where we are looking at doing a Roth conversion, and so, as a reminder, a Roth conversion, we take money that’s in a traditional pre-tax IRA, we pay the taxes and move it to a Roth IRA, where it grows 100% tax free, which is pretty awesome. 

Micah Shilanski  16:01

Fantastic, you got to meet some rules to get there, right? We’re skipping over that but, but they’re pretty easy to meet. Is that a fair statement? 

Christian Sakamoto  16:09

Yes, yes, so just wanted to give a refresher on what the Roth conversion is, and so when we were looking at doing some of that tax planning, and in particular that Roth conversion for these couple of clients right now, we know the tax laws for what they are. This is the Tax Cuts and Jobs Act, right? And this is supposed to sunset at the end of the 2025 tax year, and by 2026 the way the law is written right now, it will revert to what it was prior, so the 22% tax bracket, marginal tax bracket, will become 25% federally, and the 24% will become 28% at the federal level. We’re recording this in October. We don’t know who’s going to be president by the time this airs, and maybe we won’t know even at that point, hopefully we do.So there’s, there’s, there’s potential that it can change, but let’s play with the rules that we know today. Well, for these particular clients, they’re in the 22% tax bracket, and the thought was maybe we’ll do a Roth conversion, not only to maximize the 22% bracket that we’re in, but also maybe we push it up into that 24% tax bracket, because we know that in just two short years, the 22% bracket will be 25% and so even paying taxes at 24% there’s some tax savings there, right? 

Micah Shilanski  17:39

And I like to say there, Christian, I agree with 100% right? But it’s not just the brackets, so to speak, the percentages, because a lot of things expire with the TCJA. We have a progressive tax system, right? So the more money we make, the more tax at a higher rate, those brackets shrink just a little bit to progress up the tax ladder faster the standard deduction gets dropped considerably, which may or may not be a good thing for you, depending on what it is, so there’s a lot of little things that we’re skipping over, because it’s the tax code, and it’s super complex, but I love this concept of saying, hey, where are my taxes going to be in the future, right? Can I do something now to trigger to pay taxes today at a lower rate, and then it’s going to grow tax free? Because one thing that you know, and I know as well, working with clients doing us for 24 years now, is that something will come up in our life event, and we’ll have wished we had had a pot of tax free money. Now, I hope it’s something fun, like maybe buying a boat, buying an RV, buying a second home, taking a great vacation. Maybe it’s something not fun, and we got to pay for long term care, or we got to take care of some other things for the family, but having the diversification, I keep using that word today, but this is tax diversification, having these different buckets, and hopefully a big tax free bucket, just makes a ton of sense, and being able to see that been used over the years, man, it’s a must. 

Christian Sakamoto  18:56

Oh, absolutely, and even just to further go on that point to think about from a legacy perspective as well, the impact that a Roth, inherited Roth would have, versus an inherited tradition, so yeah, there’s lots of neat things there. What about your end Micah, any tax related questions from clients this past couple of weeks? 

Micah Shilanski  19:15

Boy, so big one is going to be, you know, what would be my tax bill, you know, next year there’s a lot of uncertainty is what the tax law is going to be, so a lot of those questions, you hear a lot of hype about it. There’s the a lot of questions or concerns about the unrealized capital gains tax keep in mind when we hear about these things, Christian and I, we always pay attention to what’s going on, but we focus on what the law is, right? Federal employees, you guys know this how often do you hear people talking about moving to a high five, but there’s not a law. It’s not moving. It’s not making traction at all, so until that time comes, we’re like, you know, okay, a lot of people talk about things, let’s focus on the laws we have today. when the tax laws change, they will right when they change, here’s the important part, we sit down and look at it earnestly, we say, awesome. What are the new laws, how do we comply with the new laws? It’s a game. The IRS changes the rules, but it’s still a game, now we get to read it, and now we can see how we get a win at the game, right? And how do we win? We legally reduce your tax bill, legally is that key requirement right here, but what do we need to do to over time, to have you pay less in taxes? So a lot of concern about potential unrealized capital gains in the future, another concern is going to be there about clients with maybe rental properties or assets that have capital gains in them. What’s going to happen with capital gains tax? And so that’s another thing we were working on this week with clients as well, about saying, hey, should I sell a rental property this year or next year, should I sell it in two years? And so we’re kind of working on the map with it, and instead of an emotional decision, we’re trying to make it a financial decision, can I quantify, what’s the tax effect if we sell it this year, can I quantify if our tax laws expired, it goes back to pre seed, pre TCJA, what would the tax effect be? Okay, awesome,let’s look at it, maybe there’s $1,000 difference between the two. Okay, it doesn’t matter, right? That’s negligible in the grand scheme of things, maybe it’s $100,000 difference, all right, that’s a big number, right? Now, we really need to look at this and say what’s going to be most appropriate, but it’s trying to remove the emotion and try to put some facts on there, and that’s one of the things I love about taxes, is we get to put real numbers on the paper and say, how do we make this decision to better you? 

Christian Sakamoto  21:24

Yeah, I like that, and again, playing in the sandbox that we have right now, the rules that we know today.

Micah Shilanski  21:30

You know, another thing that kind of comes up as well Christian is making sure we set things up where we can take advantage of it when it happens, I’m a huge fan of the TSP, our listeners know that it is a great tool. I wish the TSP allowed in plan Roth conversions, but they don’t, and so I when I talk to the board, when I talk to the TSP people, it’s definitely something I bring up, is something they should do, but that’s just Micah’s opinion, so the raw is today we can’t do in plan Roth conversions on the TSP, so that means, when a client is able, we like to pull some money at least out of the TSP, maybe it’s 59 and a half, for an in service transfer, and we like to create an IRA to give us the opportunity to do a Roth conversion, and you want to do that sooner than you have to, because sometimes taking the money out of the TSP is easy, sometimes it’s a little bit delayed. We have a client with three quarters of a million TSP check that the TSP office lost it, they say they left it on their office, it hasn’t make it to their bank account, so we had to cancel and reissue this so it’ll be three or four weeks for the client before they actually get their money. Great news is we started this process back in August, so we’re able to make sure the money comes out,we’re able to still do the Roth conversions for them this year. Had we had waited till now to be able to do this? It can be really challenging to sometimes meet those deadlines, so make sure you’re taking initiative on tax planning and doing it sooner rather than later. 

Christian Sakamoto  22:54

Yeah, yep, absolutely, and having a little urgency with it, I like that. Let’s see I had another, had another meeting with a potential client this week, and this one, actually, I’ll bring it back to cash flow, and it does tie into tax planning, so this particular household, they had married couple that were both retired, both receiving pensions, living on a lifestyle where their income was the money that was coming in from both of their pensions and VA disability benefits were already exceeding what they were spending, which is awesome, and that didn’t include taking money out of retirement accounts. One of the spouses went back to work, so they were retired, not working, and then now the one of the spouses went back to work, dramatically increasing their household income relative to how much they were spending, so really, it was just a conversation about, how do we not fall into that potential lifestyle creep, where, if we know that the spouse that’s working right now that won’t last forever, maybe it’s just a temporary job that is being taken right now. How do we avoid that from happening, and so having that good conversation on the cash flow side, to really put it in perspective on what we can replace when they are fully retired again, so what would your thoughts be if you met with them and you saw that situation, what would be some things that they should be thinking about? 

Micah Shilanski  24:17

I love it, the sooner we can sample retirement and stay on that the more successful clients are, period, hands down, so what does that mean? Well, that means, if we know our retirement spending, I’m going to make up numbers Christian so forgive me if I got it wrong here, but let’s say our retirement spending was going to be $8,000 a month, but now we’ve retired, we got a second job, we have more income coming in, and let’s say we have $15,000 a month in income coming in. Okay, great, well, what the problem is, as you mentioned, if we get that 15,000 a month coming in, we’re getting that lifestyle creep that’s going to come up now we stop working in a few years, we go back to eight grand, that’s going to be challenging, so what I’d love to see is saying, okay, awesome, let’s keep your lifestyle at $8,000 a month, let’s take the Delta the difference between the two, which is quick math, is 7000 bucks a month, and with that 7000 put in a bank account you don’t bank at normally, right? So if you’re normally a Capital One or USAA or wherever, wherever it is, I’m going to pick a different bank, and I want it to go to an outside bank account so we don’t see the money easily. And I want that to get saved. Now, maybe that’s project money, maybe that’s travel money, etc, but I don’t want that as day to day lifestyle money, because that’s the lifestyle creep, that’s a problem, now Christian sometimes clients are going to come and sit, well, there’s really no difference. Put the 15,000 in my bank account, and then every month I’ll just move kind of 7000 over into the savings account, and that’s a good theory, but that’s not reality at the end of the day, we need to feel what it’s like to be retired, and I want you to only feel getting $8,000 a month. We talked about this financial thermostat previously on the podcast, but when I log on to my bank account, if I got a balance between X and Y, I feel pretty good I’m good, if it goes above Y, I feel really good as our spending that money and it goes below X, and I’m like, holy crap, who spent all this money, right? It wasn’t me who spent it? And now I start saving and building that money back up, and that’s our financial thermostat, so the hack for the financial thermostat is only put ideal in income, your retirement income that 8000 a month in our example, in your checking and savings, have extra income, go to an outside account you do not see, aha, now we’re playing games with the brain, but we’re saying 8000 a month now we can find out if that’s the real number or not. 

Christian Sakamoto  26:37

Exactly, we’ve worked together for a while now, so that’s the same exact thing that I shared, and a little friction at first, you know, as we walk through it and we say, hey, let’s just try it for three months and see what’s the worst that’s going to happen? Oh, great. You’ve got an extra you don’t have much in your bank account after three months, okay, well, it’s still a good idea, and the reason I brought this particular question was also just how it affected tax planning if we had done a Roth conversion earlier on in the year, whereas this spouse that just started, they just started their their job six weeks ago, this would have dramatically impacted, in probably a negative way, their tax planning that we did if we did a Roth conversion, so just another reminder there, we generally like to wait till the this time of the year, October, November, maybe early December, on that Roth conversion for tax planning, because there’s a lot of things that can change in your life that affect your income. 

Micah Shilanski  27:34

Christian the other thing could approach it for our listeners out there, if you’re ever interviewing the financial planner, and they come up with an idea, one of the questions you should always ask back is saying, wow, that sounds like a great idea when you implement it in your personal life, how did that work? And what you’re looking for is, are they following their own advice, right? Now, let’s say you ask that question to me and says, well, Micah, when you change from FEHB basic or standard to basic, how did that work? Well, I’m not a federal employee, I don’t have that FEHB, I wish I could, right, so I can talk on that from my clients that have done it, but if things I have the ability to, which is a Roth conversion, income, planning, all of these other things, your financial advisor needs to be following that advice that’s out there, and that’s a really good kind of test out there, saying, hey, are they thinking something’s a good idea versus living it and having that real experience, because I’ll tell you, when I do this income planning, I do the same for my wife and I, we I’m gonna go to outside account, and you said that friction, that tension, absolutely, I feel it right? It sounds like a good idea, then you do it, and it’s like, yeah, there’s a little bit of friction, you get past that, and you start seeing some really good benefits, though, and I know you do the same question. 

Christian Sakamoto  28:42

Yeah, yeah, basically asking your advisor to put their money where their mouth is, and same, same for the the, you know, the investments that we have, that we’re investing our clients, those models that we’re in, you know, that’s where my money is too, right? Maybe not the same percentages, but same, same models that we’re investing in, so, yeah, I like that idea. 

Micah Shilanski  29:00

Perfect! Christian, we went a little long on this podcast, sorry you get Christian and I talking about taxes, we could be here all day, but we want to make sure we’re giving some good action items for our listeners. Christian, what’s a good action item our listeners can take and walk away with this week?

Christian Sakamoto  29:12

I would say review your buckets. If you don’t have your own buckets mapped out between how much is in cash, you know, zero to two years in cash, roughly three years in bonds, is the second bucket, or income bucket, and then the rest that’s in growth, you really need to map out what you have there and base it on when you’re going to be spending money, so if you’re still working and you’re not retiring soon, okay, that’s different, your bucket should look different. If you’re retired and you are spending that money, your buckets are going to look a lot different, so you just need to have that buckets plan, I would also say just if you want help with that, Micah and I can help you with that. We’re able to assist with that if you have questions on that.

Micah Shilanski  29:51

I’m going to throw another one in there, Cash Flow Planning, cash flow awareness, know where your money goes. This is such a big thing, especially for whether it’s savers or spenders, whatever habit, when we are making formed decisions, we make better decisions, and when you know where your money goes, that’s an informed decision, and you are just better steward of your money, so I like that one. The other one I’m going to say, boy, leave us five stars, share this podcast out. Our goal is to help another 1 million federal employees with their retirement. The only way we get to do that is with your help. So share this out there, keep your questions coming, we love getting those on the FERS Federal Fact Check, and the other platforms that we have so we can answer your questions that come in. Christian thank you so muchfor joining us, and until next time, Happy Planning!

Christian Sakamoto  30:34

Happy Planning!