Ep #75: The Importance of Building a Financial Plan

Full Episode Transcript
With Your Hosts
Micah Shilanski and Floyd Shilanski

Micah: Welcome back to the plan your federal retirement podcast. I’m your host Micah Shilanski. And with me is the legendary financial advisor Floyd Shilanski. Pops, how’re you doing, sir? 

 

Floyd: You know, I am so excited to be here with you today. And you know, tomorrow we’ve got this great in-person thing going on, so we haven’t done that since what? 2019? The Zoom is great, but I can’t wait to be on stage presenting with you. 

 

Micah: Yeah. It’s going to be fantastic, right? We’re doing that live class which is great for federal employees, Zoom webinars, all these things, man. I use Zoom technology when it works, but doing it in person, being able to interact with people, we got over 80 people sign up with our class and so that is going to be great. But Pop’s, I know today one of the things that we want to make sure that we were talking about, and of course, she didn’t get the reference. By the way, Floyd Shilanski Is my father. This is the reason I’m calling him Dad on the podcast as we go through this. And Floyd started our firm back in the late 70s. And he comes to us with a wealth of experience over 40 plus years of financial planning. And today’s podcast, we really want to talk about the importance of building a financial plan. And so Pop’s, I wanted to have you on the podcast so we could go through and talk about this because you got even better stories than I do. But really about the importance of building the plan, and it’s not about having the super precise when the super accurate all these Monte Carlo and tables and all that the more accurate you try to make it, the more inaccurate it becomes which is a whole different thing we could talk about, but it’s really the starting motion that is taking action and doing something which makes such a big difference. 

 

Floyd: Without a doubt. You know, there was a Harvard study years ago about setting goals for a graduating class; the ones that wrote their goals down 80% succeeded the others. They don’t know where they’re at. It’s the exact same way whether you’re just getting started, 18, 22, to 30 years old, mapping a strategy out. If you’re 30 years old mapping a strategy, you and I know one thing it’s going to change. But with a strategy, you’ve got what you and I refer to as waypoints. We’re always sailing, navigating towards these away points to be successful. 

 

Micah: Yeah, and that’s really the importance, right? So I want to go through a couple of different things on the podcast today and really talking about mistakes, right? Everybody loves mistakes. In their great lessons, what to avoid, what things to be thinking about, but also not just the mistakes, how are we taking action? And pops, I love what you say is creating those waypoints that’s in there. And I think we need to look at them in different ways. And I really like ranges when we’re also creating these because we don’t know exactly what’s going to happen in retirement isn’t exactly Pass Fail. Well, I guess it could be if you run out of money before you die, that was a fail. So fair enough. But I really like ranges are we on the general track of getting there because we can’t control the markets. We can’t control the economy. There’s a lot of stuff we can’t control. So what I want to focus on when we’re working with clients, and I got this from you is I want to focus on things people can do, actions we can take things that are in our control that helped get us on that path. 

 

Floyd: Amen. You know, so many times we talked to young folks getting started, and I like to see that five-year option. So he’s in his envelope five years strategies and about the second year, I can look up Periscope everything kind of like what I thought it was going to be on Periscope; let’s keep sailing. Oh, wait a minute. There’s a storm I got to deviate from. Maybe you’re going to get married, and all of a sudden, now you’ve got kids. That’s a change in the plan. 

 

Micah: Yeah. And the speak of those life events that are the biggest changes the plans, right, what we’re not focused on. We don’t plan on things to say oh, if the market goes down, and I’m still saving, what am I going to do? Great. Buy more, right? We’re thinking about bigger things in the picture. And one of the things you’ve heard us say on the podcast time and time and time again is cash flow is the heartbeat of retirement. It really is and I didn’t first understand that really when I started being a financial planner. I know, pops. You were like No, it’s the heartbeat is heartbeat. So I just did these things. Not really understanding why they’re so important. But as I started working with more people, helping more people now 1000s of federal employees across the nation, it really truly is heartbeat is the essence of retirement. So pops, why is heartbeat so crucial for retirement? Why should? Why is cash flow the heartbeat of retirement? Why is that so crucial in retirement? 

 

Floyd: You know, I did a podcast just this the other day, and it was one by another Wall Street Journal Money Magazine. They put out this list; how are you doing in comparison to someone else, and you go in arresting, so I’ve got this, you know, young professional making a million dollars a year and I’m a young professional married with three kids. Is that the same thing? All right. So everyone is so different that we have to watch what they’re doing. How do you spend your money? What about what do you want to accomplish? You know, I will; one guy said Floyd, can we kind of retire tomorrow and I said, Yeah, I don’t know how long you can stay retired tomorrow. So it becomes cash flow. Right. How much are you spending in so many times? We see people thinking that well, let’s see my paychecks X today, I’m spending less than x, so when I retire, I’m good. But the paycheck after retirement is x minus and all of a sudden their cash flow remains the same. And if you’re not tracking cashflow, you may be going bankrupt and you don’t even know it. 

 

Micah: Yeah, that is such a great point. We get so caught up in the statistics on the averages, right? What does the average person say? What do you need to do? I know one of the questions our team put together actually came from illustrators; how much do you need to save, you know, for retirement? That’s a great question. But that’s such a depends on question. It depends on you. So I’m all about that. Let’s throw out the averages because they don’t matter. Right. What matters is, are you on track for your work or not? Are not are you on track for somebody else’s retirement? That’s irrelevant. And that’s why cash flow is so important. So when we start looking at cash flow, and every time we meet with clients and pops, you’re great about this. We always start off talking about cash flow. And why are we looking at it number one? We want to track what we’re spending. Do we have what I call financial awareness? Do we have an awareness of where our money’s going? Now, if you don’t know how much money a month you’re spending, that’s going to be an action item. Now, I don’t want you to go create a budget with 72 different line items and to track it to the penny. But I want my clients know generally where is their money going every month, and no more than five categories so quickly, I would just do household, travel, entertainment, medical and kids. Those are my big five categories where my money goes, I make everything kind of fit into those categories. Now, why do I like five? It seems like an easy manageable number. And now what I have is general awareness of where my money’s going if I had a spreadsheet that had 172 different line items and had a budget while the spreadsheet is probably accurate. I don’t really know where my money goes. And I need to know, am I overspending or underspending, especially in the years leading up to retirement the year before and the year of retirement? This is where it can go south right? So pops if someone were retires and they’re not tracking their cash flow what happens to their spending the first year of retirement? 

 

Floyd: Well, you know, I use a bell curve as a example, we know you’re gonna retire at x. And then what happens is that there’s honey dues, there’s travel, all these other things you want to do. So we watch that expense go up somewhere, and I tell them, I always tell our pre retirees somewhere in the 12 to 16 months, if your bell curve isn’t trending down, I say we’d have to come have a talk with come to Floyd talk because you’re going to blow it. And one of the things that you and I do in the firm does so well is that we get people ready to retire. We take that extra and we put it away in a separate account and why do we do that? So we get your retirement check coming to you as we anticipate. All right, and then we know the overspending so I’ve got some place where I can pull the overspending back into it. And when it goes to zero, we better be back on track. 

 

Micah: Yeah, I’m a big fan of those separate accounts too. So whether it’s we’re saving money for travel, says great, I want to spend X amount a year and travel great. Well, here’s a great thing that you should do a kind of hack for retirement side is we should open up a separate travel account, and we should put X dollars a month inside of that travel account. And that’s a spendable account. What does that mean? When you have the money in there, go ahead and spend it for travel. But if you don’t have the money in there, you don’t spend it for travel. One of the biggest mistakes that I see retirees get in the habit of when they’re not tracking the cash flow is they think that they’re in investments or an unlimited bank account. This is especially really challenging in up markets. Because what can happen is the markets are going up your accounts are going up in value and you’re pulling money out but you’re not seeing it go down in value. You’re like oh my gosh, this is amazing. I should have retired decades ago. I am never going to run out of money no matter what I pull out. It just makes it right back up. Yeah, for that year. What about like last year when the market was down 20%? That didn’t happen. So understanding our cash flow and remembering that our bank accounts or investment accounts, our TSP is not unlimited. 

 

Floyd: Micah, it’s like, you know, you’re working, and you take a holiday right, and you got your budget, and about halfway through the budget or halfway through the holiday, you go to hell with it. And you spend more than what you got set aside because mentally, I got a paycheck. Come on when I get back. I’ll catch up. But what happens is, Oh, I love this one. Oh, I can work some overtime and get it caught back up, right? Instead, you come back and then your pension is flatline. Maybe a two or 3% increase every year, but it’s flatline. Word. How do we pay that credit card off? Now we got to chip into the TSP. Now we got to hit the IRA. And all of a sudden, we searched; perhaps it was like 2008 we’re shrinking into principal versus just the earns. 

 

Micah: So one of the things that can be different, right, a retiree could be looking at this pops and they could say well look, my spending my net income what I’m spending today, let’s just say your next spend your net income is $7,000 a month and you’re gonna plan on spending 7000 a month in retirement and you have the assets which fantastic seven grand 10 grand whatever your number is. And you say sweet I have the income to do it. How is this any different? I’m already planning that I’m already spending $10,000 A month today, and I’m going to spend $10,000 a month in retirement. Therefore nothing is different. And that’s kind of mentally where our mind goes. But here’s one big thing that’s different. May ask you this question listeners. When do you spend more money Monday through Friday when you’re working, or Saturday and Sunday on the weekends? Now the second part of this question, what happens when every day is a weekend? Yeah, now we started seeing our spending really increased, don’t we? 

 

Floyd: Yeah, they don’t believe that just having a look at their credit card statement the last year and look at the months and see and plot the dates and see oh my god look he’s right. Yeah, now I can vacation more. I can travel more I can do things now. Sometimes I hear this. This is Micah, Well, I won’t need as much professional clothes so I’m gonna have more money. It’s like Ah, all right. We’re creatures of habit. What you’re used to spending you’re gonna continue to spend unless something changes are the house is going to be paid off. Great. The house is getting paid off. Does that mean your house payment goes away? No, you have taxes and insurance that are part of that payment, right? We got to remember these things. So Cash Flow Planning. And again, all of these little pieces are part of cash flow planning. So cash flow is the heartbeat of retirement is so important. And that’s one of the reasons we talk to our clients about if I had my ideal, at least one year, ideally to 12 to 24 months before retirement we have everything set up as if you are retired. Sometimes we can really do that. Sometimes we have to pretend to do that and how it’s set up. But I even like to go to the extreme of saying you know I want to take 100% of your paycheck, have it deposited in an outside investment account, and then from that investment account, once a month, you’re gonna get your net monthly income. So now instead of getting paid every two weeks, you’re gonna get paid once a month, and you could be thinking might get that’s irrelevant. It’s the same money that it added up. Okay, well that’s theory let me tell you, in reality go into once a month. It’s a mindset shift for a lot of our clients. 

 

Floyd: You know, Micah it’s so, so so accurate. You know, in your podcast listeners, I know they’re aware of this, but they’re they’re probably freaking out and going, Wait a minute. I got five years till I retire. What we try to get you to do is five years out and say, Okay, what’s your pension plan going to be? We can accurate, you know, get within five to 10% of that. If you’re retiring before 62. What’s the first supplement gonna be? How do we factor that into that? Now let’s start seeing what the gap is. So now your income which was at 8000 goes down to five now you got a $3,000 gap. First thing you may do when you see the money start to tighten up is you’re going to make the normal changes. A lot of times when we do budget work, there’s a slippage. I can look at your gross income minus taxes minus Social Security minus your benefits, your net income, and we come up with a magic number. And that magic number historically, is 10 to 15% more than what you think it is. So the first thing we do is look at working down that gap trying to find out what that is, then it’s a math question, how much do we need to build up in this account? So when you do retire, and we have to fill this gap, we’re able to do that back to the point where Micah was talking about, you know, once you pay the house off? Well, I bet a lot of your podcast listeners have refinanced your house and you’re down at 3% or less on the interest rates. So if you take a look at your statement, and look at what’s going to principal and interest versus property tax and insurance, you may find out that the difference is less than $1,000. So that really affects your cash flow. It affects the heartbeat. It goes now when you want to retire and travel and do those things. You want to feel good about it. You don’t want to go and can afford to do this. We never want to go to a client say you can’t do that. You’re gonna go bankrupt. We never want to do that. We want you to spend the way you want to. If we plan and we start with a long enough runway to make sure that when you take off to retirement, we have your parachute packed away that you want to to have an enjoyable golden years.

 

Micah: I love it. And just because we don’t want to have those conversations doesn’t mean we won’t right part of our job is to call you out on it any from a good place and say hey, let’s be really clear on what our goals are. And pops, I know one of these things that comes up. I always laugh at this one; to have good stories on this is a big expense, right. Micah, how do I plan for unexpected big expenses that comes up and won’t give me an example? I’m gonna need a new car right now. Okay, great news is we recognize we’re going to need a new car. The next step is recognizing that after this new car, it will be a another new car now if you’re not a new car person, a new to you car, whatever you call that you’re going to replace your vehicle and where does that come from? And this is a cashflow question in my mind, and I say it time and time again. I want all of my retirees normally to have a car payment. Now it could be going to a loan or a bank account, right? We can argue the difference between the two. But cash flow-wise, I want you to be budgeting for the next vehicle because you’re going to have that expense and where retirees make a mistake. They get everything paid off. They get the house paid off, and they get their cars paid off. They get to pay of all these things. Then they go into retirement sailing and spending all of the extra money that they were using to pay off debt, then they have to replace a vehicle, and now vehicles have gone up, and now they’re 50, $75,000 for a vehicle and they’re like holy moly I wasn’t expecting this. So they were so apt to pay it off, but they didn’t set that money aside for the next expense. 

 

Floyd: Oh, and we were talking before the podcast: Micah’s grandfather, my dad. We retired him from the Air Force, retiring from the Teamsters. And then he did some local things around his hometown, retired the third time, and he said Son, I’m buying my last new car. Four cars later, It was his last new car. All right. It is like a house. You know, I’m gonna build my dream house goes this is. I gotta tell you, statistically, after you retire, you got three additional homes and four moves. All right. Please forgive us wrong, but for 42 years, I can almost 98% guarantee. That’s not your last new house. It’s not the last time; so many times, our plans are when I retire. I’m going to go home; you can go back. But can you really go home? You’ve traveled the world. You’ve done all these exciting things, and maybe when you go home, it’s not the same so there’s so many things that we as planners are your planner or what Micah and I do with our with our clients is we plot and plan in that five year thing up Periscope getting closer. Let’s modify as things come up. Hey, Floyd, I want to go to Peace Corps for a year after I retire. Dynamite. We want to pick a house or sell it, hmm, I had thought about what I would do with the house or something. We got a flattened plan inside there. 

 

Commercial: REMEMBER WHEN YOU STARTED WORKING FOR THE FEDERAL GOVERNMENT? How old were you? Did you plan to stay as long as you have? Are you planning to wait even longer or retire as soon as you hit your Mandatory retirement age? It is critical to learn how to maximize your benefits to “get the most out of them” while you’re working, but knowing what those benefits are is only part of the puzzle. You also need to know how to put all the pieces together. And now, you are preparing for retirement and filling out your retirement applications. But do you know how many costly mistakes are waiting down that road? DO NOT worry – we’ve got you covered. 

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Micah:  When something goes wrong. Or home. Who do we have locally? Do we have a handyman on standby? Do we who’s going to be able to take care of these things? These are things that we’ve talked about with hundreds of clients. These are things that we need to be thinking about of how this is going to affect us and pops. I love that example of the home right because most of our clients, when they retire, they’re still in the big home. Right then they want to move into their dream home. But that’s not going to be the last home, sometimes they’ll move I’m dealing with a client right now they moved in they loved it. And they loved it for about five, six years and now it’s just not the same and even though oh my god, this is the home we’re gonna die in we’re now moving and changing states and they’re looking at another home. Well, great news, we had planned for that. But that’s just one of those things. I know that that home isn’t their last home either they’re going to probably move again. And sometimes it’s chasing grandkids right? So again, this is the reason that when we say hey look, you tried to be so precise in the plan it becomes highly inaccurate. This is when we need to step back and look at ranges and prompts. I remember when I was first you know, getting into financial planning and he would tell me this, we got to use ranges and all these other things and I’d be so frustrated. I’m like, No, I can build it out in Excel. We can model this thing we can do it but but life is different. Right? So we got to create these tolerances. We got to create these ranges and as long as you’re on that side of this range in your financial plan, that’s really good. Now, we spent the better part of 15 minutes just talking about one thing, which is cash flow into retirement. And this is huge. Now this is just one small element in building your financial plan and things you need to do so before we move on a little bit to the next one. One other thing on cash flow. I mean, I could spend all day talking about this. But and it’s the 50/50 rule. One of the things that where people get in trouble when they’re planning their retirement, and as they’re planning it for five years out. 10 years out 20 years out, and they say great news I’m spending here today if you’re watching me on YouTube, you see my hands, right, we’re spending at this level today and I’m saving at this higher level, which is fantastic. And then what happens is this lower level you’re spending starts going up over time. You get pay raises, it hits your bank account, it starts going up but you keep your savings at the same rate. It’s a now all the time that comes by now all of a sudden my spending is exceeding my savings. I’m no longer on track to be able to be financially independent and retire. So one of the things we got to do to keep on top of that is a general 50/50 rule. Now, are there exceptions to this? Sure. But generally speaking, we love a 50/50 rule, any new money, any unexpected income that you have coming in, whether it’s a step increase, whether it’s a pay raise, whether it’s a cost of living adjustment, whether it’s inheritance, any of those things, minimum we should be thinking about 50% goes to the future 50% of the bottom line. It’s okay to improve our lifestyle a little bit when we get pay raises as long as we’re saving for the future. But if our spending and lifestyle outpaces our savings, it’s going to be really hard to stay retired. 

 

Floyd: You know, Micah, so accurate. You know, in the in the first book, I’ve learned to win the money game, you know, way back in the 80s. We started talking about these percentages, and those podcast listeners YouTubers are listening if you have kids, imagine teaching your children how to use percentages when they first start working. And every time they know they get a pay raise. They get a you know they go from $8, $10 Now to 13 or 14 and get the real jobs. Now they’re accustomed to spinning at this level. You give them new money and guess what they want to do. They’re going to improve theirr lifestyle. Take percentages, put it away, take percentages put it away. It’s not that we want to be regressive. But can you imagine when you first came in as a GS five or GSA, and you started working and you did the percentages over time, and now you’re getting ready to retire 20 years later, what the percentages might be, it might be huge. That’s a game changer if we can convince people to do that early on. 

 

Micah: Yeah, massive, massive improvements. Alright, so another thing inside of this mix, right? It’s not just about cash flow days cash flow in the future. So you need to sit down and look at when you’re building your financial plan as an honest assessment. Number one, what am I spending today? Right, and that needs to be as, yep, that’s what I’m going to be spending in the future. There are a few exceptions to that. If we’re thinking that we’re, you’re shaking your head no, you disagree?

 

Floyd: No, go ahead.

 

Micah: Okay, so what we’re spending now is probably what we’re going to be spending into retirement, right? Few exceptions to that rule, but that’s what I plan on. And then we need to have a very intentional assessment of saying, where’s your income going to come from in retirement? This is another big misconception that I see all the time pops and I know you do as well, is what people think their income is going to be is not actually what their income is. I’m going to pick on the TSP now I love the TSP team says you fantastic, right. But so often we look at the TSP and says, Oh my gosh, I have 800,000 in there, the million or how much in there. It’s amazing, which it is. That is congratulations to you. That is fantastic. Then you look at this TSP statement, and then it says, Hey, you could take a tsp annuity of $2,000 a month, 3000 a month. You’re like Hey, I got my pensions two or three grand a month. Then I got two or three grand a month coming in for my TSP annuity. Plus I’m gonna have 2000 and social security man I am set, that’s fantastic. I’m spending$8,000 a month today. That’s $8,000 a month in the future. This is amazing. Well, if you listen this podcast before you really picked up on this, I’m sure that was a difference. In example of gross versus net. You’re comparing gross income, which is the total amount that would be coming out of the TSP the total amount of your pension to your net spending. So if I’m taking out $8,000 a month from my pension from my TSP and Social Security gross, that is not 8000 net, which is hitting my bank account. That’s less than six, potentially in the five, potentially less than five depending on what your deductions are. So that’s a big difference in these numbers. So we got to have an honest assessment of the gross income but really, what’s our net retirement income gonna look like? 

 

Floyd: Micah and that’s a great segue into our retirees. So many times they stopped doing tax planning. You know, I can remember back in 1980, the highest highest marginal tax bracket in the country was 90%. Alright, we had an election that got dropped to 51 as low as down to 28%. No one at 28%, a lot of the conversation was referred refer, and all of a sudden now we’re getting ready to retire in 2023, 24, 25. The taxes done they’ve crept back up half a day. And then when you hit this thing called required minimum, sorry, almost required mandatory distributions again, required minimum distributions at age 72, or three or four, you’re going to take out of that $2 million TSP, maybe 100,000 bucks or get penalized. Now what’s that $100,000 going to do to your tax bracket? You know, so many times we when I retire, I’ll be in a lower tax bracket. Well, your financial advisors job is probably to keep you in the same if not higher, making sure your assets are working adequately for you. So you can get a pay raise in retirement as inflation kicks up the cost. You can draw a bit more money out.

 

Micah: Oh, this is where I’m gonna push back on you. And so I agree with that. I’m gonna take the one little change in that tax bracket. Comment the financial advisors job is to make sure cash flow is good in retirement, and we’re beating the IRS at 10s of 1000s of dollars as a taxes in the long term. So it’s not just about that tax bracket game, right? It’s really about that cash flow game and saying sweet, what can we do and then you know, this is not just taxes, one a lot of our clients get killed in the Medicare bracket. The clients that didn’t do planning right and and now we’re at the later stage of that when they’re seeing us in their lives is there’s very little we can do to keep them under the Medicare bracket and they’re being bumped up their Medicare premiums more so tax planning is so essential, especially the younger we are how much we putting in Roth, how much you put into the Roth TSP the Roth 401 K, how much Roth conversions are we doing, really looking at what our taxes will be in retirement under current law, and say great How do I beat that today?

 

Floyd:  I’m smiling Micah. What’s your least favorite Uncle 

 

Micah: Sam?

 

Floyd: What’s your least favorite aunt?

 

Micah: Aunt IRS?

 

Floyd: Yeah goes on Medicare, right? Well, the more you take out and you get these adjustments and you hadn’t planned on it, you know now you turn 65 and you part a of course, is free, not free. You paid for it all your life you started at 65 and then you started taking part B and you keeping your income low. And then you sell a house you sell a real estate transaction, you do something all of a sudden your social security Medicare gets kicked up and the maximum now is $534 a month in debt you plan for that? Maybe maybe not. Beach, right? So it can be over $1,000 a month because you sold a piece of investment property and you’re tickled to death because you made so much money you paid your taxes on it. I’m really good. And then here comes an RMA oh, by the way, we want to know this at $169. Now we want $500 that affects you, the heartbeat, and the cash flow. Yeah, thanks cashflow. 

 

Micah: Alright, so this podcast is all about action items. Right? We love having fun a lot of talking about finances and have a good time at it, but pops it’s really about what action items can our listeners take this week in order to make improvements in their financial plans? So I’ll kick it off. Obviously, the first one is you need to have an honest assessment. We talked about some other pods, but I called the financial awareness, financial cash flow conversation. Where does your money go, gross on a monthly basis. How much do you spend and then give me three to five categories no more than five where your money goes? And what are the ranges for that? That’s super, super important. I would start on that this week. 

 

Floyd: Agree to 100 percents on the next thing I’m looking at is how much do you really need this right, a tag along with you? How much do you really need in retirement? And you and I both know that they’re going to spend what they’re going to spend whatever comes in. So structuring that and I’d like to add to that, start five years out from retirement five years start working on getting down to what your pension will be what your first supplement or Social Security will be. How can you do to get to don’t learn to live within those means. And like you said, try it before you retire. Make sure you sell off in retirement, feeling comfortable. You can do this. 

 

Micah: You know that five years is so important, right? It ties right into the next one, which is our last action item. What’s your distribution plan and I love that you need to be setting this up five years in advance. Here’s an easy example. What if you plan on retiring at the end of this year but last year the market was down 20% You lost 20% inside of your TSP account? Yeah, right now now it doesn’t feel so good. Move it into retirement. So now it’s the conversation. Should I work another year? Should I wait till it recover? Well, if we have foresight and we say hey, what’s the soonest I’m thinking about retiring? And let’s create a distribution plan for that. Is it more conservative? Sure. Are you potentially leaving money on the table? That depends what’s the market going to do? Right now if you know exactly what the markets going to do, then don’t heed my advice and please go do that because you know more than me, but if you’re not exactly sure what the markets going to do in the next couple of years, then we need a solid plan for distributions and a down market. In our class, the three critical concepts. We talk a lot about that. So I want to see what’s your distribution plan, make sure that flows into your cash flow, and that’s going to be answering the question, are you on track for retirement or not? 

 

Floyd: Micah, I’ll go back to 2008. And as we talk like this, I can think of eight Feds that didn’t retire because our TSP or the 401 K’s became a tool 1k I mean, such a radical reduction that you know, and I look at them and they were not FERS they were served. It says it doesn’t make a difference. But mentally watching the TSP come down, their heart says I can’t do this right now. And we want to we can’t eliminate it. But to smooth the waters out just a little bit, you know, and to Micha’s point, I can tell you exactly what the mark is going to do. It’s going to fluctuate, fluctuate. And it’s going to be down the day you want to retire to scare the bejesus out of you. And then you know what you’re working is just gonna keep creeping up. We don’t know. No one knows anyone that tells you they can add insurance too much gummies. It’s a part of it. It’s not all of it, but it’s a masterpiece in this plan that you’re going to develop. 

 

Micah: I love it. Well pops thanks so much for joining us on the podcast. It’s always great to have you on here. Well Until next time. Happy Planning!

 

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