A Retirement Story: The Silent Threat to Your Retirement Savings

incredible retirement story

When my grandparents took early retirement at age sixty-two, they did pretty much what everyone of their era did: My grandfather had worked for the same company for more than thirty years while my grandmother stayed at home and raised the family. When my grandfather retired, they sold their home up north and moved to Florida.

They put all of their savings into bank Certificate of Deposits (CDs). Initially, this strategy worked out quite nicely for them.

Their pension and Social Security provided more than enough income to meet their everyday expenses. They didn’t need the interest from the CDs so they reinvested their returns.

Then something funny gradually began happening…the pension and Social Security that had appeared so generous was no longer enough to support their lifestyle. Consequently, they began to spend the interest they earned on the bank CDs.

This tactic covered their expenses—for a time—but eventually they found that they needed a new source of income to simply maintain their lifestyle. Like many of their peers, they had to decide whether to alter their lifestyle and activities or start spending some of their principal.

Their choice—spending some of their savings—was not surprising. After all, who wants to feel as if they’re stepping back? Why would you want to do less, having spent so many years looking forward to your retirement years?

In an effort to keep their money as safe as possible, my grandparents watched themselves go broke, slowly but safely. They suffered because of their reliance on CDs.

The downside to investments like CDs with a guaranteed return is that these returns won’t keep up with inflation. If you don’t plan for it, inflation will overcome and slowly eat away at what you worked so hard to build.

For more advice on retirement planning, check out Brian Fricke’s book, Worry Free Retirement.


Should You Pay Off Your Mortgage?

should you pay off your mortgage

Planning for retirement brings up numerous and varied questions about how best to plan for your financial future. One of those often is: Should you pay off your mortgage?

The short answer is yes. One of the best ways to lessen the stress of worrying about the economy or the direction of the stock market is to own your home debt free at or before retirement.

There are some myths around whether yes is the best answer to that question. One of them is related to the value of tax deductions.

The popular but inaccurate argument is that you’ll pay more in income tax because of the lost interest deduction. To that argument I have a challenge: The first person to give me a logical answer to this question—How do you make money when you give away $1 of interest to the mortgage company and receive back $.15 to $.35 (depending on your income tax bracket) from the IRS? —Gets $10,000.

It all comes down to one thing: The single biggest hurdle to overcome in building and keeping wealth is eliminating debt.

If you no longer had to make your mortgage payments, credit card bills or car payments, you would have more freedom with your remaining investment funds because you won’t need to get as high a return. Lower investment returns aren’t necessarily bad provided you’re lowering your risk proportionately.

For answers to more common questions related to retirement planning, check out Brian Fricke’s book, Worry Free Retirement.

Filtering Out Good Financial Advice vs. Financial Advice That’s Good for You

Filtering Out Good Financial Advice vs. Financial Advice That’s Good for You


These financial “gurus” reach millions of people a day, and for the most part, give pretty good advice. However, that doesn’t mean that their advice is good for you. Why? The financial shows they advise for are geared towards the sound bite; entertaining, generic, broad, and quick.

For example, a common piece of advice given is that a Roth IRA or Roth 401(k) is the best way to go. And, for some it probably is. To know if it’s best for you requires a financial professional to know more background information on your individual situation.

In this informative video, Brian Fricke explains the kind of background information that is required to make a more informed decision.

Brian’s suggestion? Use advice from media “gurus” as a good source of general information, but keep in mind that your specific situation, values, and goals should drive your final actions.


Incredible Retirement Tip: How To Measure Market Performance

incredible retirement tip


Can you tell me how your investment portfolio performed last year? Don’t worry, this isn’t a trick question.

Some of you will probably answer that your holdings were up X% from the previous year or that you outperformed the stock market. That is one way to assess your investment success but, in my view, it’s not the right way.

There’s no surefire method to “beat” Wall Street, despite what some so-called experts may say. If that were the case, we’d all be lined up outside their door!

The financial markets in this country have had dramatic swings over the past few years. If you were counting on a guaranteed return over time, you may have been disappointed, or worse, dramatically impacted if the losses in your portfolio were significant.

Since you cannot control the timing of either the market or your returns, you have to have an overall strategy to make the most of your life. You cannot count on guaranteed investment returns over an extended period of time.

That said, there’s a valuable financial tool—we call it a Nest Egg Stress Test®—that takes into account timing risk and helps you plan for it.

This tool shows you that your holdings depend on not just returns, but also the order in which you receive them and whether you’re adding to your portfolio and when you’re withdrawing from it.

Contact us to learn more about tools and strategies, like the Nest Egg Stress Test®, that can help you track your portfolio.