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 [...]

Retirement disconnect can doom your dreams of having a carefree lifestyle in your golden years before you even get close to quitting your job. The various aspects of planning for retirement can be similar to putting together a jigsaw puzzle. If there is a disconnect where the pieces don’t fit, the final picture just doesn’t come together. The result is a hodgepodge of independent pieces that don’t work together. The disconnect for retirement planning starts with what people know they should do, contrasted by what they do in reality. From spending to planning, financial professionals Joe Anderson and Alan Clopine discuss the biggest disconnects that can keep you from achieving your financial goals. They also discuss specific steps you can take to reconnect your retirement plan so you have a path to the retirement of your dreams.

Important Points:
(0:00) – Intro

(1:43) – Financial Focus

(2:43) – Retirement Disconnect

(4:00) – Spending

(5:22) – Debt vs Savings

(9:07) – Long Term Care

(11:38) – Planning

(13:19) – Goals

(18:12) – Reconnect

(19:22) – Estimate Budget

(21:40) – Savings Shortfall

(23:14) – Pure Takeaway

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Joe: You ever try to put together a jigsaw puzzle and you lost a piece, or you look at it and you just kind of jam it in there and you know it doesn’t necessarily work? You know, your retirement plan is very similar to that. It’s a big jigsaw puzzle, and you’ve got to make sure that all the pieces are together to get that glorious picture that you want. If you don’t want that jammed piece, watch this show today, folks. Welcome, everyone. The show is called Your Money, Your Wealth®. Joe Anderson here, President at Pure Financial Advisors, and of course, we’re with Big Al Clopine.

Al: Hey, Joe.

Joe: He’s the man, the myth, the legend that’s gonna break everything down for us in just a second. But when you look at overall retirement planning, right, we know what we need to do, but a lot of times, we just don’t do it with a lot of things in life. I know I need to lose weight, so I need to go on a diet, I need to exercise, but how many times do we get out of bed? We usually don’t. That is a huge disconnect. Let’s get connected. That’s today’s financial focus.

Joe: When you’re saving for retirement, 100% of us, all of us should be saving at least 10% of our income for retirement, at a bare minimum. 10%. But if you look, 46% of people even know that, so that’s a huge disconnect, but who actually does it? Only 35%. So 2/3 of us are not necessarily doing what we should be doing, and thus, even the bigger problem is a lot more people know that they should do it, but they don’t do it. Here’s another one. If I’m looking at a study that was done, most people believe that they will live a lot longer than their parents. And I think we all believe that. My parents died fairly young, so it’s like, “well, I think I’m gonna live maybe 10, 20, 30 years longer.” we always talk about longevity, but then we ask the people, “hey, you think you need to work a little bit longer than your parents?” “Nope.” 22% said, “yeah, maybe.” almost 80% said no. How about, “do you think you need to save a little bit more?” only 33% said yes, so there’s a little bit of disconnect. If we’re living longer, what does that mean? That means we need cash flow to fund our lifestyles for many more years. Let’s get connected, folks. Let’s bring in Big Al Clopine.

Al: So today, we’re gonna talk about retirement disconnect, and what’s disconnected? Well, a little bit of everything, so we’re gonna talk about spending. Do you know how much you need to spend in retirement? Have you even thought about it? How much you’re saving. Heh! You got to know both of those to create a good plan to get you to where you need to go. And then, finally, let’s reconnect. Let’s put it all together. We’ll do that in the last segment, but you’re not gonna want to miss the first two segments because we’re gonna go over what the problem is. And, Joe, I think a lot of folks just–they bury their head in the sand when it comes to retirement planning. They hope they’ll be fine, and hope isn’t a great strategy when it comes to retirement planning.

Joe: If you think about it, it’s, like, if someone’s super dialed in on their spending, but they’re not saving, all right, or if they’re saving quite a bit, but they don’t know what they’re spending. So when we’re talking about this puzzle, all of these pieces really need to come together to kind of put your overall financial picture in place. You know, this is the biggest one, Al. And I see this is that, all right, you get this rule of thumb: “i think I’m gonna spend a lot less in retirement.” you know, you look at the numbers, you go online, and it’s like, well, you only spend about 70% or 80% of what your monthly income is, or because you’re not going to drive to work, you’ll save money on gas. Maybe you don’t have to wear a suit, but guess what– it’s Saturday every day. Actuality, people are spending a lot more, Al.

Al: Well, they are, and I think that a lot of people we talk to, what happens is they do retire. And they’ve put off a lot of things. You can imagine. They travel more, they want to work on the yard more, they want to do home improvements, they want to spoil their kids– whatever they want to do. They want to buy that RV, the sailboat, whatever it may be, and so you tend to spend more those first few years, and if you’re thinking you’re gonna end up spending only 70% to 80% of what you spent before, what we’re suggesting is rethink that because that’s not been our experience with a lot of folks.

Joe: Yeah, I think the people that spend 70% or 80% or even 50%, they don’t want to. They have to because they didn’t necessarily do the planning. You know, think about it. It’s Sunday today. Or yesterday was Saturday. What did you do? Did you think you spent a little bit more money over the weekend than you did Monday, Tuesday, Wednesday, Thursday combined? The answer’s probably yes because you have more time. When you have more time, you want to do different things, and guess what. You’re gonna spend a little bit more money, so these rules of thumb is good to get you there, but you want to make sure that you put other things together. Here’s another one. Pay off all of your debt first and then start saving. But the problem is, is that a lot of us do have some debt and you want to make sure that you get a handle on it, but almost half of people say that the debt gets in the way of their savings.

Al: Yeah, exactly right, and when you think about it, if you’re just only focusing on your debt, you do want to focus, certainly, on your high-interest-rate debt, but you don’t want to miss your retirement because it may take you quite a while to pay off debt, and you may never even quite get there, and then the kids go to college, then you incur more debt. You want to be saving as you go, particularly if you have a company retirement plan that has a match. You want to take advantage of that because that’s like free money into your retirement savings. So don’t just look at this in a vacuum, and debt is very important, but make sure you’re saving along the way in retirement as well.

Joe: When you look at it a lot of us, when we see debt, we get twice as anxious, or we get a little bit more uncomfortable. It doesn’t make us feel good and sleep well at night if we see a big amount of debt versus a big amount of cash. I think most of us would have a lot less debt and a lot less cash versus a lot of cash and a lot of debt. But you have to balance this thing out. We’ve seen people take money out of their retirement account to pay off their mortgage. No–all right, so $300,000, $400,000 mortgage. He’s got $400,000 in his retirement account. Guess what he does. He takes $400,000 out and pays off the debt. “Whoo! I feel really good because I’m debt-free,” ok? And guess what happens next year. The IRS comes knocking because every dollar that comes out of that retirement account is taxed at ordinary income. Al, how much money did he have to pay in tax?

Al: Yeah, probably $150,000, I betcha.

Joe: 150 grand! He doesn’t have any more cash. He’s debt-free, right, but now he owes $150,000 to the IRS. Guess what he has to do. He’s got to refinance his house to get $150,000 out to pay the IRS. Now he’s got debt and no cash. That’s an extreme example, but you want to make sure that you’re careful. Debt is not great, but you don’t necessarily want to get just so laser-focused on paying off the debt without still increasing the other side of the balance sheet.

Al: The other thing, Joe, is, so let’s say you borrow $150,000 to pay the tax. Then it’s like how do you pay the mortgage? Because you got nothing left in the IRA. We see this over and over again. People are house-rich and cash-poor. Make sure you have a balance in all this so you can retire successfully.

Joe: Yeah, without question, it’s, again, understanding your savings, it’s understanding your spending, it’s making sure that you have a strategy and plan put in place. If you need help with that, you can go to YourMoneyYourWealth.com. Our special guide’s reconnecting your retirement. Reconnect your overall retirement, avoid the mistakes, and start doing the things that we need to do. All right, go to YourMoneyYourWealth.com, click on that special offer. That’s our free gift. YourMoneyYourWealth.com. We got to take a break.

Joe: Hey, welcome back to the show, folks. The show is called Your Money, Your Wealth®. We’re reconnecting your retirement. Reconnecting. Go to YourMoneyYourWealth.com, click on that special offer. It’s our reconnecting retirement guide. If you feel disconnected in your retirement, why not get connected with our guide? Go to YourMoneyYourWealth.com. Got a lot of great stuff to go through, but before we do that, let’s see how you did on the true-false question.

Al: “Long-term care is one of the biggest retirement disconnects. Joe, true or false?

Joe: True and false.

Al: Ha ha ha! I knew you were gonna say that.

Joe: Well, here’s the issue with long-term care. So what is long-term care? Well, 70% of people will probably need some sort of care in your elder age. Some people might, you know, get hit by a bus, and hopefully that doesn’t happen to any of us, but as we age, right, we’re living a lot longer, as we discussed, and as we live a lot longer, right, the body shuts down. you could break a hip or a knee. That’s long-term care. You could have dementia. That’s long-term care. There’s a lot of different things that could put us in a long-term care state. 33% has done planning, so, really, Al, again, the answer is 100% of people need some sort of plan, and only 33% have really completed anything.

Al: That’s exactly right. We all need to have a plan, and that plan is not necessarily long-term care insurance, it’s just whatever your plan may be. So maybe you’ve got enough savings to cover long-term care. Great. Maybe you’ve got a rental property that you could sell. That could cover long-term care. Maybe your home. Maybe you’ve got sources of income that could fund it. This is what a plan is. Maybe you don’t have any of that and maybe you want to consider long-term care insurance. In many cases, Joe, what we see is when there are two–the spouse, the first spouse takes care of the ailing person. That’s the first long-term care plan, and the second spouse, if they need it, they sell their home. That would be a common–but that is a plan. That’s what you’ve got to think about–how we’re gonna make this work.

Joe: But it’s a terrible plan, too.

Al: it’s not a good plan, but at least it’s something.

Joe: Right. women live a lot longer than men, ok, so for all of you women out there, look at your husband. And is he big, small? Can you pick him up? Think about a caretaker. My grandma was so small, my grandfather was a big guy. She couldn’t drag him out of bed and, you know, help his–so get a plan in place. Just making sure that it’s written down, that the family members know what’s going to happen, but you’re right, Al. It’s not necessarily the insurance, but it’s knowing where the cash is gonna come from or what’s gonna happen if and when, I should say, a long-term care stay happens. Here’s another disconnect, ok? 45% of people, Americans, are afraid that they’ll outlive their funds. I bet–here’s my thought process on this, Al. So 45% are actually worried about it. I think there’s probably maybe 5% or 10% that have enough cash to provide themselves, and I think the middle, they don’t care.

Al: 50% don’t even know they have a problem.

Joe: Yeah, they’re, “hey, we’re good, we’re good.” “Hey, no problem. I think we’re on easy street for my overall retirement.” so 45% are actually looking at it, doing the planning, they’re like, “oh, my gosh, I think I don’t have enough. We need to do some more planning.” another 47% are just guessing. “How much money do I need? I don’t know. Maybe it’s $200,000.” ok, well, that’s great, but how ’bout if you’re spending $100,000 a year? You’re broke in two years. So just kinda be careful, get some planning to figure out a– what you’re spending, again, how much should you be saving to get your numbers dialed?

Al: Well, that’s true, and I think a lot of people–in fact, I’d say most people that we talk to really don’t know what they’re spending, so let me give you a couple thoughts on that. One is if you just have no idea, look at your paystub, your paycheck. What are you bringing in weekly, monthly, annually– whatever it may be? What’s your net? What’s the net after all the tax is withheld, after the money going into the 401(k), and if you’re not saving any more from your paycheck, then that gives you an idea that that net pay is probably what you’re spending, although it could be more. If your credit card balances are going up, maybe you’re spending more than your net. That’s a quick way to figure this out. Even better way, though, is to go to–get quicken or mint.com or any number of sites out there that will track your spending so you can actually see what you’re doing, what you’re spending money on. I think you’ll be surprised. You’re probably spending–people spend more on things than they realize, and sometimes some little changes can make a big difference.

Joe: Right. When you come home from work, does your– you know, open up the front door and there’s, like, 14 packages from Amazon, right, that you got to climb over? You know, it happens. You go to my house, it’s–Amazon loves my house for some reason. It’s like a magnet, so–but this is a problem. If you’re just guessing how much money that you think you need, again, that’s not a really good strategy. If I’m here, right, this is the best one. It’s like, “I don’t want to go to a financial professional.” I don’t blame you. You don’t want to come see Al and I, but maybe the Uber driver is not the best place to get your financial advice, or your parents or your friends or your brother or sister or uncle or aunt. Unless they’re in the business or they have a really keen sense of finances, because, right, it could be the blind leading the blind here. It’s like, “hey, Al,” you know, “what are you doing for retirement?”

Al: Well, yeah, and that’s right because what I’m doing may not fit for you and vice versa because we may have completely different situations. And that’s where retirement planning, it’s kind of important to think about this because everyone’s situation is different. Their spending needs are different. Their desires are different, their income is different, their savings is different, their longevity is different, so you can’t really just go to any–your neighbor and say, “what should I be doing?” because, Joe, we’re all doing different stuff.

Joe: Yeah, and totally. You know, you’re spending a little bit different than I am. You’re a little bit older than I–well, a lot older than I am. We have different goals, different aspirations, and everything else, so this is where you have to take ownership of your own retirement. Start dialing it in on yourself. Start with you first. And then, if you want to ask your neighbor very specific questions, or your friends and family, then I think that’s the better approach. But going to the cocktail hour and saying, “hey, what are you investing in?” or “hey, what is your tax strategy?” that’s not really good because what we find is, “oh, I like this strategy from this family member, I love this strategy from this friend,” and then, all of a sudden, your retirement plan is kind of a terrible puzzle. If we go back to there, the pieces are all just mashed together or it’s like Frankenstein. You have a Frankenstein retirement plan. You don’t necessarily want that. You want to start with yourself and start dialing it in on your own, and then, when you know the questions to ask, that’s when you can reach out. Hey, if you want our help, here’s a good start. Go to our web site, YourMoneyYourWealth.com, click on “reconnecting your retirement.” it’s a guide that will reconnect everything for you. Well, it won’t do everything for you. It’ll give you a list of things that you need to do. YourMoneyYourWealth.com. Click on that special offer. It’s our gift to you this week. YourMoneyYourWealth.com. Hey, don’t go anywhere. When we’re gonna get back, we’re gonna teach you how to reconnect everything. I know we need to do certain things. Our job is to help you kind of push you over the edge and really get things together, so you don’t want to miss this. We’ll be back in just a second.

Joe: Hey, welcome back to the show. The show is called Your Money, Your Wealth®. Joe Anderson. I’m a CERTIFIED FINANCIAL PLANNER™ with, of course, Big Al Clopine. He’s a CPA, breaking things down again for you once a week, talking about finances. Today, we’re reconnecting your overall retirement. Got to reconnect it. A lot of you have some disconnects. We all do in life, and so our job today is to help you reconnect the overall retirement aspect of it. Go to YourMoneyYourWealth.com, click on that special offer. Reconnect your retirement. It’s our gift. Just download it for free right there on the website. So, hey, let’s see how you did on the true-false question.

Al: “The last time 20% of 65-year-olds and older were working was 1962.” Joe, is that true or false?

Joe: Um, no idea, but I’m guessing it’s true.

Al: it is true according to AARP.

Joe: So, back in 1962, a lot of people were working a lot longer, and then it kind of dipped, and now we’re seeing that kind of—

Al: Now we’re coming back.

Joe: Now we’re coming back. Well, I think that’s a good thing. I think that actual full retirement age, you know, for Social Security and everything else should be 70, you know? But most people are still taking it at 62. We should be working, and we’ve done this example a few times, is that if you just work a few more years longer, all right, that’s a few more years of savings. That is also not–that’s delaying your Social Security for a couple of years. That’s 2 years or 3 years of not taking money out of your accounts. you could spread that cash out for another 5, 10 years on the back end if you just decide to delay retirement just a little bit more. So I’m glad to see that trend going up because, again, we’re living a lot longer. So that’s one way to reconnect, Al.

Al: It is.

Joe: What are other ways that we can reconnect?

Al: Yeah, so let’s talk about it. Let’s talk about how to reconnect. So here’s what you need to do. Let’s start with estimating your budget, what’s needed to retire. Like we talked about, maybe go to Quicken or mint.com. Get an understanding what you’re spending now and what you want to spend in retirement. That’s kind of step one. Then put a plan into place based upon what you want to spend, how much money you actually have, and how much income you can create, or cash flow from that money, your fixed income. Pay off high-interest-rate debt if you have it, right, and then automate your savings. This is a good one for people of all ages. If you have a 401(k), make sure a little bit’s taken out of your paycheck each and every month or week or whenever you’re getting paid, and like we talked about, at least 10%. You want to get 10%, maybe 15%, maybe 20%, but, Joe, most people are under that 10% as a minimum.

Joe: Yeah, and if I were to rearrange some of that, I think, of course, putting a plan in place is key, right, but automate your savings is absolutely number-one. You know, go to your 401(k), go to the match, right, and then start increasing that just a little bit, quarter by quarter, month by month, year by year, every time you get a raise. Just get rid of that money. Out of sight, out of mind. Automate your savings. I don’t care if you’re in your 20s or if you’re in your 70s. It doesn’t matter. Start automating that. Then, of course, you want to look at different flares. If you got super high-interest-rate debt, then you want to start having a plan to start paying that off. But guess what. We’re not stopping savings to do that. We are looking at a diversified plan in regards to your cash flow. Start saving, start paying down debt, start thinking about now, ok, what does my retirement look like? And then you can start automating your savings appropriately to make sure that you’re saving enough, you know, to get you to your goal because here’s the next line that most of you hate because we’re gonna tell you how much money that you should have, given certain ages, and I bet a lot of us are not necessarily there.

Al: Yeah, Joe, so this is a little bit of a reality check. So, in this, we’re looking at different ages and how much you should have saved, based upon your current income. So let’s start at age 40. Age 40, you make $100,000. I’m gonna do $100,000 because it’s easy math. You should have 3 times that. You should have $300,000 in savings. Retirement savings or other savings, liquid investments. By 50, you should have 6 times; by 60, 8 times, and maybe you retire at 67. You should have 10 times your current income. I know, when you look at this, a lot of you are saying, “i got nowhere near that.” it’s not time to panic. It’s just time to reconnect and get a plan together so at least you can have the best retirement possible.

Joe: Right, and this is a high rule of thumb, too, because we’re not–we have no idea what you have in regards to the fixed income. A lot of you might have a pension. A lot of you, you know, will have social security. Maybe you have real estate income. Maybe you have all sorts of different things that are bringing in cash flow to the overall family. Cash flow is king. We’re looking at liquid investments because that produces the cash flow to help you maintain the lifestyle that you want. This is assuming that, you know, you don’t have a lot of other fixed-income sources. So, you know, again, it’s really kind of putting the plan in place and then diving in the numbers to their specific–

Al: You’re right, just a quick rule of thumb, but let’s go over an example. We’ll go through this kind of quickly. So this is individual or couple that wants to spend $80,000 a year. So one is 40-year-old and one is 60-year-old, ok, so you got to do a little bit of math for inflation. So we’re assuming a 3% inflation. The 40-year-old, if they want to spend $80,000 in today’s dollars, it’s gonna be about $168,000, whereas the 60-year-old, would be about $93,000. You compare that number to what you expect your future fixed income to be–social security, pension, rental properties, that sort of thing– and then you end up with a shortfall. This is how much you need to produce from your own investments, from your own savings–$86,000 for the 40-year-old, $38,000 for the 60-year-old. So what does that mean? Let’s look at the 40-year-old. You multiply that by 25, so you need about $2.1 million in this example, and you currently have $300,000, ok, so then you got to do a little math, figure how much do you need to save each month, assuming a 6% rate of return? It comes out to $1,200 per month. It’s a big figure, but, you know, that’s a big– even bigger figure there at $2 million. A lot of times, when people see this, they go, “there’s no way I’ll get to $2 million,” but if you do it systematically over time, you can get there. In the same way, a 60-year-old maybe has to save a little bit more because they got less time–a couple of thousand dollars–but that’s the math you need to do to figure this out.

Joe: Yeah, really good point, Al. That’s what we mean by “putting a plan in place,” so you know what you need to do. If you need to save $100 a month, $1,200 a month, or $2,000 a month, whatever the number is, maybe you can’t get there, but you know, “ok, I got to adjust some things. I got to reduce my spending. I got to work longer. I got to get another job. I got to do this. I got to do that.” at least you know, right, what’s ahead of you. You’re not guessing. The guessing game is no longer on the table. So, you know, when we look at how do we reconnect all of this? First things first, you gotta identify, A, that you’re disconnected. It’s ok. We’re all disconnected in some shape or form. Look at your spending, look at your savings starting that plan, and then guess what– then you will reconnect. Go to our website, YourMoneyYourWealth.com, click on our guide. Let’s reconnect your overall retirement. YourMoneyYourWealth.com. Click on that special offer. It will download right there. Print it out, do whatever, pass it out, go to your neighbors, give it to the uber driver. I don’t care. It’s good information to help you reconnect, to get you on the path to a wonderful retirement. Thanks again for joining us today. Big Al?

Al: It was fun once again.

Joe: Are you reconnected?

Al: I’m getting there.

Joe: We got to reconnect your retirement, buddy. All right, we’ll see you again next week. The show is called Your Money, Your Wealth®. We’ll see you next time.




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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.