Joe Anderson
ABOUT Joseph

As CEO and President, Joe Anderson has created a unique, ambitious business model utilizing advanced service, training, sales, and marketing strategies to grow Pure Financial Advisors into the trustworthy, client-focused company it is today. Pure Financial, a Registered Investment Advisor (RIA), was ranked 15 out of 100 top ETF Power Users by RIA channel (2023), was [...]

Alan Clopine

Alan Clopine is the Executive Chairman of Pure Financial Advisors, LLC (Pure). He has been an executive leader of the Company for over a decade, including CFO, CEO, and Chairman. Alan joined the firm in 2008, about one year after it was established. In his tenure at Pure, the firm has grown from approximately $50 [...]

Are you cruising into retirement, or are you on a sinking ship? By plotting a good course and using proper tools and strategies, you can cruise into retirement. Unfortunately, many people need a life vest: they’re ill-prepared and without a compass. It’s all about being proactive. Let Joe Anderson, CFP®, and Big Al Clopine, CPA show you how to keep your retirement afloat with the steps to prepare, adapt, and remain on course.

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Download the Cruising into Retirement Checklist

Cruising Into Retirement:

  • All Aboard: Plot Your Course
  • Avoid Seasickness: Adjust to Adverse Conditions
  • Bon Voyage: Getting to Your Retirement Destination

Important Points:

  • 00:00 – Intro
  • 01:16 – Overview
  • 02:50 – Cash Flow
  • 03:51 – Determine Shortfall
  • 05:10 – Determine Savings
  • 06:50 – Time Horizon
  • 07:40 – Download the Free Cruising Into Retirement Checklist
  • 08:33 – True/False: The average household retirement account balance for Americans 65+ is less than half-a-million dollars.
  • 09:13 – Medical Expenses
  • 10:31 – Inflation
  • 11:27 – Withdrawal Rates
  • 13:32 – Required Minimum Distributions
  • 14:07 – Download the Free Cruising Into Retirement Checklist
  • 14:40 – True/False: Most Americans Understand Social Security Distribution Strategies to Maximize Their Benefits
  • 15:38 – Maximize Social Security
  • 16:18 – Stay Invested
  • 17:00 – Missed the Boat? Catch Up!
  • 17:45 – Ask Joe & Al: Are there investments that take advantage of high inflation?
  • 18:45 – Ask Joe & Al: I want to have more spending flexibility but I still want to keep my risk high. What are the best investment choices for me?
  • 20:33 – Pure Takeaway
  • 21:28 – Download the Free Cruising Into Retirement Checklist

Make sure to subscribe to our channel for more helpful tips and the latest episodes of “Your Money, Your Wealth.”


Joe:  Are you cruising into retirement or are you on a sinking ship? Hopefully you’re on that cruise ship. The show is called Your Money Your Wealth®. Joe Anderson here, president of Pure Financial Advisors with the big man, Big Al Clopine sitting right over there. Al, have you ever been on a cruise?

Al: Probably half a dozen times.

Joe: Alright, we’re gonna cruise right into retirement because unfortunately, a lot of people need a life vest in regards to their overall financial plan. 86% believe a retirement plan is important. How many people actually plan? 42% feel prepared for retirement. There’s always this disconnect. Let’s get you on course folks. That’s today’s financial focus.
We always have to have a doom and gloom stat. 46% of Americans are sinking big Al, zero retirement savings. I wonder if they’re including children under the age of 5.

Al: They could be. If you count my sons in there, they could be.

Joe: Here is the fact of the matter, we’re ill-prepared for overall retirement. If you want to get on that fancy cruise ship to retirement, let’s bring in the captain.

Al: Wow. Captain Big Al. I’ll take it, what the heck?! So we’re trying to cruise into retirement. There’s three steps, right? We got to get all aboard. We got to prepare. We got to plan. We gotta figure this stuff out. What do we do? What do we need to improve on? Then we need to be aware of how we can become seasick. Problems, inclement weather along the way. What are things we need to watch out for? Be prepared for. Then finally let’s move into retirement. Let’s cruise into a great retirement.

All Aboard: Plot Your Course

Joe: Well, let’s get all aboard folks. First off, you gotta start thinking about what type of fixed income you are going to have in retirement. Let’s talk about social security. A lot of times people think that social security is going to cover a lot of my living expenses in retirement. That’s one camp. Another camp thinks that social security is not even going to be there. Let’s split the middle here. Let’s say that your income today is around $50,000. Okay, your social security benefit will probably cover 35% of that income. But as your income increases, right? Then the percentage of that social security that’s going to match that income goes down drastically.

Al: It does, and that’s by design, right? It is there so that none of us are in the absolute poorhouse. That we can have a place to live and food to eat, hopefully. It’s geared towards those that make less income and less savings. So just be aware.

Joe: Let’s look at cash flow. So income, let’s say if you have a pension, if you’re lucky enough to have a pension or some sort of annuity payment, then you add in your social security payment, and then you have investments. So you might need to take some dollars from that overall nest egg. Is it 1%, 3%, 4% of the overall nest egg? And then you look at other income. Maybe you have real estate income. Maybe you’re working part time. But this is the monthly income or cash flow, cash inflows. Add that up, that’s your income. Now you have the bottom half of the ledger. Is that you have essential expenses and discretionary expenses. Alright, so this is the must-haves. These are the wants. You can add those two up and look at your total income minus your expenses. That is your cash flow. This is gonna drive all of the investment decisions your tax decisions based on these two columns here.

Al: Yeah, and I think that’s a really good way to look at it when you’re close to retiring. Let’s say you’re 47 and you want to retire in 20 years at 67. In this example, we have $55,000 income In 20 years, we’ve got $144,000 of expenses, not 80. 80 is what it is today. So you have a shortfall of $89,000. So then you’ve got to go to work. You’ve got to figure out how to cover that shortfall in the future.

Joe: If we go back here, we’re looking at monthly cash flow. Monthly expenses. So here you’re estimating what that cash flow is. So your fixed income, whatever that could be, your social security, that could be your pensions, annuities, it could be other income, things of that nature. In this example, we’re going to assume it’s $55,000, right? It’s a guesstimate. But my current spending is $80,000. So that’s the bottom half. So $55,000 is coming in, $80,000 is coming out. I’m going to be short, right? That’s why you have a portfolio. And so we’re going to figure out what this investment needs to be to cover this shortfall, right? So all of this kind of adds up. So I’m 47, 67, you’re doing the math. Hey, $89,000 is the shortfall, inflation adjusted. So, if my shortfall is $89,000, Al, how much money do I need?

Al: That’s a good question. So, we talk about the 4% rule. So, basically, the 4% rule, how much money do you need to have in investments so that the 4% that will produce the amount of income. So, you can either divide by 4%, but an easier way to do it is to multiply that shortfall by 25. And in this example… you get $2.2 million, that sounds like a pretty big number.

Joe: So this $89,000 is what I need from the overall portfolio. So I have my nest egg here. It’s all good. This nest egg needs to produce this $89,000. So I need to divide that by 4%, or I can multiply it by 25, as you see here. So $89,000 times 25 is $2.2 million. So this nest egg that I’ve been saving, this needs to be $2.2 million, 4% of $2.2 million is going to be that $89,000. So it’s like, man, that’s a big mountain to climb. What do I need to do? Well, I’m 47. So I got time. That’s a good thing. And I got some savings. I got a couple of bucks in my 401(k). It’s$ 400,000. So now I need to do some math to figure out how $400,000 over 20 years turn to $2.2 million. Well, the math is I need to save about $26,000 a year. If I can’t save $26,000 a year, I’m going to have to work longer. If I can’t save $26,000 a year, I’m going to have to spend less, right? Or I can work a little bit longer, spend a little bit less, and get to your overall goal. A lot of levers that you can pull here, but just understanding the math in this dirty scribble is the key to success.

Al: You’re right about that. And so a lot of people, when they get to retirement, they haven’t quite hit their goal, and that’s okay. You can work part time. A lot of people these days work part time to generate at least a little income while they’re perhaps collecting social security after full retirement age, for example. So you can spend less, you can downsize. There’s all kinds of things you can do.

Joe: Looking at your time horizon as you get closer to your retirement goal. You’re going to have to make sure that you’re making pivots in the overall portfolio, right? Because some storms might come up, especially as you get closer. So let’s see the markets dropped 20% and you’re all in equity still trying to grow that portfolio. Well, now you’re 20%. And you’re trying to get to this nice little island, well, you’re probably gonna have to work a lot more because you have 20% less cash. Okay. So it’s just making sure that you’re managing your overall investments each year as you get closer to that destination.

Alright, when we get back, we’re gonna talk about stormy seas. What happens if things get a little bit of rockiness on your way to that retirement destination. Don’t go anywhere. We’ll be right back.

Joe: Hey, welcome back to the show. The show is called Your Money Your Wealth®. Joe Anderson and Big Al. We’re on a sea cruise, folks helping you with your retirement goals

Before we see these stormy seas, let’s see how you did on the true post question.

Al: The average household retirement account for Americans 65 plus is less than half a million dollars. True or false? Well, that is true, and Joe, I think you’ve got the number.

Joe: $400,000, that’s a great start. The number keeps increasing, so that’s a good sign. So, Al, let’s talk seasick.

Avoid Seasickness: Adjust to Adverse Conditions

Al: Let’s try to avoid getting seasick. It’s paying for all the medical costs that you’re going to have. at 65 and later. So Fidelity does a study every single year to figure out what’s the cost for an average couple in medical expenses from 65 on to the rest of life. And right now they’ve come up with $315,000, which sounds like a lot of money. How does that break down? Well, you can see from the chart there about 17% is drugs, almost 40% is Medicare, parts B and D premiums. And then the copayments, coinsurance, deductibles. That’s about 44%. But before you freak out, let’s think about this a little bit differently. That equates out to maybe 10 or 11, $12,000 a year for a couple, so maybe 5 or $6,000 per person. Now it’s like a little bit more bite-sized than this giant number, which Joe, I think freaks a lot of people out.

Joe: Yeah. I mean, it’s like, well here, if I only have $400,000 in my retirement account and my health, my medical costs are gonna cost me $300,000. It gives me $100,000.

Al: Rice and Beans.

Joe: Right? But no, if you break it out here and it’s a few hundred dollars a month. Right? So some of you will need a little bit more in drugs. Some of you might be a little bit last. You know, depending on what your health is. So, $300,000 is kind of the fear factor, but you break it down, of course, that’s why we’re here. We wanna make sure that you’re doing the appropriate planning.
Another thing that you gotta consider is inflation. Let’s say if you have $1 million dollars today, that $1 million purchasing power in 2038, age 85 is half, right? Less than half. So that’s why we invest, is just because the purchasing power of the dollar may not be the same in 10, 20, 30 years, right? So you have to outpace inflation. So that could be done with CDs, bonds, equities, real estate. But you wanna look at, well, what does your spending need? How much is the capital that you currently have? What inflation rate would you like to use? And then making sure that you outpace it.

Al: Yeah. And I think that can be kind of a confusing concept for a lot of people, but maybe think about it this way. So you’ll still have $1 million, right? If you know, if you just put it in a checking account that had zero interest and you didn’t spend it, right? But that $1 million is going to buy a lot less. And the reason is because your food will cost double in 25 years. Fuel will cost double. Everything costs double. So that $1 million only buys about half of what it does in today’s dollars.

Joe: Let’s use an example, Al. We’ll use that same $1 million. And you want to start creating income from that overall portfolio. So let’s say you’re 67 years old, you have $1 million, your rate of return is roughly 6%. But you cannot forget about inflation, which we just talked about. Let’s just assume that inflation is at 3% over the next 10, 20, 30 years. So I’m receiving a 6% rate of return. I have that $1 million. So a lot of times people think if my expected or average rate of return is six or eight or four, well, that’s how much I can pull out. So if I’m going to pull out 6% per year, right you can see I’m going to run out, I’m gonna burn out of cash and the reason for that is that I’m taking out more than inflation is kind of eating me up. So if I take out 4% that’s kind of the safe withdrawal rate. You can see here with the 6% growth rate, 3% inflation. I’m still roughly at that $1 million.

Al: Yeah, I think that’s a good example, but also be aware, this is just an illustration. 4% for some of you may be too much, right? 6% may be just fine. It just depends upon a lot of variables like life expectancy, for example, like how your investments do, whether you have better investment income and growth in the first few years than In the last few years. Does your spending increase a lot of things? So When we do these charts, just realize this is an illustration, but this is something you kind of have to monitor, year by year.

Joe: Good point. Because I think the biggest risk that a lot of retirees have is that, how much money are they pulling out and then what does the market or their portfolio do in each of those years? It’s that sequence of return. Let’s say if the market is doing this and you’re pulling out a consistent 6 or 4%, I mean, it doesn’t matter what you’re pulling out. If I’m pulling money out in down markets it’s gonna take me a lot more upside just to get my money back. So it’s just kind of a tumbling effect. So having a really good understanding of how to withdraw your money, I think is one of the most important things.

Al: I think another thing to be aware of in terms of storms ahead is a required minimum distribution. So your IRA money, your 401(k) money, depending upon your age now you have to start taking money out at either 73 Or 75. So just be aware of that. Even if you don’t necessarily want that income, your taxes will be higher because you’ll have more income on your tax return. So just be aware of that.

Joe: Alright a lot of things to consider here. We gotta take another break, but when we get back, we’re gonna say bon voyage. We want to make sure that you’re all set, wrapped up, ready to go. We’ll be right back.

Bon Voyage: Getting to Your Retirement Destination

Joe: Welcome back to the program. Show is called Your Money, Your Wealth®. Joe Anderson here. I’m a CERTIFIED FINANCIAL PLANNER™ And the CPA is sitting right over there. That’s Big Al. We’re on a sea cruise, folks. Helping you with your retirement goals. Let’s see how you did on that true false question, folks.

Al: Most Americans understand social security distribution strategies to maximize their benefits. I think we got a stat that one survey said 59% of people don’t understand social security strategies. I would say it’s probably 98% if you really think about it. There’s a lot of nuances to this.

Joe: If you look at most people, they’re going to take it as soon as they can get it. And there’s a few reasons for that. I think we’re so used to and accustomed to a paycheck. Right, and when you retire, you wanna have some sort of fixed income. So it’s like, I’m gonna turn on social security because hey, a bird in the hand is better than a couple in a bush, right? There’s a very small percentage, even though with all this information and education, is that if you push your social security out to age 70, you get this 8% delayed retirement credit

Al: Because we’re living longer, right? So to have that extra protection can be pretty useful. So if you think about when you can take it, you can start at age 62. You can go all the way to age. 70. If you go from 62 to 70 it’s about a 76% increase. Right? Joe, it’s approaching double the benefit.

Joe: 76 though, it’s a pretty big number.

Al: It’s a pretty big number.

Joe: It encourages people to push out. But I still think they don’t.

Al: I mean, when we see the stats it’s usually around 2, or 3 or 4% to push it out to age 70. So it’s not too many.

Joe: All right. Stay invested, Al.

Al: Okay, we’re on that bond voyage. We’re on the cruise. And so here’s one of the things you want to do. You want to stay invested. Why? Because that produces better long term results. So here’s the last 10 years ending in 2021. If you invested $100,000 and you just stayed and invested in the S&P 500, you’d have about $240,000. Now, if you had gotten out of the market for the best 10 days, you missed the best 10 days. Now your amount is about $150,000 and you can see if you miss 20, 30, 40 days. 40 days you actually lost money and you’re thinking, well, I’m not going to miss the best days. Well, guess what? We often do when we try to time the market because the best days happen after the market crashes or goes down a certain amount and people get afraid they get out of the market and they miss those best days.
So you really want to stay invested to maximize your retirement dollars.

Joe: Hey, it’s never too late to start as well. Let’s say you’re 58 years old. You haven’t saved anything. From 58 to 59, $60,000 contribution over those couple years. Now, the law changed from 60 to 63, they jacked up that catch up from $7,500 to $10,000. So over that time period, now my contributions are up to $130,000. And then from 64 to 70 it goes back to $7,500. But now it’s at $210,000. If I get a 6% rate of return on all of those contributions in the ketchup by age 70, that’s $617,000.

Al: That’s a lot. We do get this question frequently by people in their 50s or even 60. It’s like, I’ve got nothing, now what? Well, you have to have discipline to be able to save at these levels, and that doesn’t even include employer matches, so it could actually be a lot better.

Joe: Let’s flip the script. Turn the show over to the viewers, Big Al.

Al: This is Karen, Minnesota. Are there investments to take advantage of high inflation? Well, Karen, that’s a great question. I mean, we generally want you to stay globally invested. in stocks, bonds, low-cost type investments, but if you want to pick out certain investments that do better inflation, like treasury inflation-protected securities tips, for example, i bonds, some stocks tend to do better with inflation, real estate. But if you go back to it, you know, things go up and down at different times. Basically, you just want to stay invested.

Joe: If you look over the long term, stocks have outperformed The rate of inflation and bonds have outperformed the rate of inflation. Gold, precious metals and things like that. It’s just staying invested is what the key is over the long term. You’re going to outpace, underpace, do things like that. But I think it’s again, really understanding what your goals are, what the expected rate of return that you’re looking for and then building the portfolio around it.

Al: So from James in Washington, I’m in my fifties. I want to have more spending flexibility, but I still want to keep my risk high. What are the best investment choices for me? What do you think, Joe?

Joe: You can’t have your cake and eat it too. Again, it’s coming up with a strategy to figure out, what can you spend and what’s an appropriate distribution level for the overall portfolio? Because the problem is, let’s say you have a portfolio that is down 30%. Okay, so you have $100,000, it’s down 30%. Well, most people say, well, if it’s down 30%, I need a 30% rate of return then I have my money back. Guess what? The math doesn’t work that way. You need a much higher rate of return just to get your principal back. So if I’m going to lose 30% of the portfolio, that means I’m taking high risk. I’m taking more risk in the portfolio to get a higher expected rate of return. So if I’m taking on a lot of risk, and I’m trying to take income from the portfolio, and when the market turns on you, And that market goes down and you’re pulling money out. It’s almost impossible to get your money back to where it was. So now you’re just burning through your cash that much quicker. Then that’s when people make mistakes. They get out. They change their strategy. So, it depends on how much money that you have and how much money that you’re trying to spend and what your fixed income sources are. But you can’t have a high flying portfolio. So I think it’s sustainable long term. I think.

Al: Yeah, no questions. So it really goes back to planning. Like what rate of return do you need to accomplish your goals in retirement so that it’s sustainable and tax efficient with low fees on your investments. So that’s where planning comes into play. And if you do the right planning, then you can cruise right into retirement.

Joe: Well, what did we learn? Well, we learned to cruise right into retirement, right Big Al. So all aboard. You gotta plan your trip. You gotta figure out where you’re going and just make sure that you write it down. There’s going to be some weather, you might get a little seasick along the way there, so you gotta adjust. You gotta figure it out. And then just stay the course, making sure that you have the right strategy. Don’t make any rational decisions. You might have to change the course a little bit, but you want to make sure that you do it in a disciplined way. All right, that’s it for us. I’m getting on a ship and I’m getting out of here. For Big Al Clopine, I’m Joe Anderson and we’ll see you next time.


• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC. A Registered Investment Advisor.

• Pure Financial Advisors, LLC. does not offer tax or legal advice. Consult with a tax advisor or attorney regarding specific situations.

• Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.

• Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.

• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy.

• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.

CFP® – The CERTIFIED FINANCIAL PLANNER™ certification is by the Certified Financial Planner Board of Standards, Inc. To attain the right to use the CFP® designation, an individual must satisfactorily fulfill education, experience, and ethics requirements as well as pass a comprehensive exam. Thirty hours of continuing education is required every two years to maintain the designation.

AIF® – Accredited Investment Fiduciary designation is administered by the Center for Fiduciary Studies fi360. To receive the AIF Designation, an individual must meet prerequisite criteria, complete a training program, and pass a comprehensive examination. Six hours of continuing education is required annually to maintain the designation.

CPA – Certified Public Accountant is a license set by the American Institute of Certified Public Accountants and administered by the National Association of State Boards of Accountancy. Eligibility to sit for the Uniform CPA Exam is determined by individual State Boards of Accountancy. Typically, the requirement is a U.S. bachelor’s degree which includes a minimum number of qualifying credit hours in accounting and business administration with an additional one-year study. All CPA candidates must pass the Uniform CPA Examination to qualify for a CPA certificate and license (i.e., permit to practice) to practice public accounting. CPAs are required to take continuing education courses to renew their license, and most states require CPAs to complete an ethics course during every renewal period.