Nikki: You’ve spent decades building your retirement savings, but no one hands you a manual for turning it into a paycheck.

Today, we’re showing you how the bucket strategy is designed to help create confidence through every stage of retirement.

Featured Advisor Matt Bryant joins me to explain. Welcome to Paladin Financial Talk.

Matt, welcome back.

Matt: Thank you, Nikki. So glad to be here.

Nikki: All right, here we go. So, Matt, I got to talk about you here for just a second and brag on you for just a minute.

So, you have spent uh gosh over a decade as an investment advisor and you really spent those first 10 plus years specializing in the investment management side.

You know the technical side of investing, but one of the things that I really appreciate about listening to you and when you’re engaging with our clients is that you have a deep knowledge of this investment strategy piece and retirement income, but you never make it more complicated than it needs to be.

You have a natural way of helping clients understand not just what you’re recommending but also the why in simplistic terms.

I want you to talk just a little bit about that of help our listeners understand a little bit more about your background but your philosophy in this approach that you have created.

Matt: Yeah, so I’ve been in the finance world for 15 years licensed as an investment adviser for 12 or 13.

So, um previous to Paladin I did work with a firm that built portfolios that advisers would then use with their clients in retirement planning.

So became very familiar with understanding the equity markets, the bond markets, everything in between using those pieces what we do now to as like the building blocks to build a successful financial plan.

Now we live and operate in a very complicated world.

Yes.

I mean you can turn on the financial news and very quickly hear something that you’re like what I don’t even know what that is.

So, for the average person who has a career completely outside of this yeah it can be overwhelming and what I tell people often is I come from a long line of educators.

Yeah.

Right.

So, we have a lot of teachers in our family going back generations.

And I don’t consider myself necessarily a teacher as far as the education system goes, but being able to actually say, “Hey, this is what I know.

Here’s what you need to know about it.” And I will happily educate you as as far along the path as you want to go.

But you definitely need to have an understanding of why are we doing what we’re doing and just like the fundamentals of how this all works so you can sit back and think, “Oh, I remember when Matt was talking about that.

That’s why that’s part of my plan.

If you’re more educated about it, you’re going to be more comfortable about it.

So, I think it’s key to at least try to meet people on the level they’re at to help them understand what we’re doing.

Yeah, there’s so much to be said to having somebody that this is their specialization and them being able to tell you what you need to know and clear out all all of the jargon and the extra stuff that I get that this is a very complicated industry, but boy, it can be overwhelming for the lay person who’s trying to navigate it.

Yeah.

And even the acronyms sometimes it’s like you could say a sentence and we get used to the the acronyms and all the abbreviations and everything but you have to step back and think well that person we might say RMD every day but that doesn’t mean everybody else knows what it is and that gets frustrating when you’re trying to communicate to somebody if they are not even speaking the same language.

So, you really got to step it back because it’s not it’s not an easy process and it can be very intimidating when people come to sit with us.

Yeah, I Matt, you do a nice job of balancing the analytical piece that you know well but putting it in terms that an average ordinary person could understand.

And so, uh, certainly a big piece of what you bring to the table and thank you for taking that approach.

I know I even use you internally from that perspective.

Nikki: Well, what I want to do today is go ahead and get us started, but I want to do a quick recap of where we’ve been.

So, you are our final featured advisor in our series that has covered uh withdrawal strategies and investment strategies and that sounds so technical but we’ve been building towards today’s conversations as we have been covering these fundamentals and they look at the different approaches retirees can use to create income and really our niche is focused on retirement income but what we find is that starts so much earlier than somebody might think about.

So, pre-retiree and retirees, yes, that’s as you’re preparing to make, you know, that transition, but retirement savings really starts the first time you put money in a 401k.

And so, it spans your whole lifetime in your whole career.

But last episode, Ellie Robinson, one of our one of our advisers, explained how the Paladin bucket strategy guides the way we look at investments.

And so today, what I would like you to do is show us how the other half of that equation works when we’re starting to use that money, that same bucket strategy to create reliable retirement income or a paycheck ultimately.

Um, and this can happen in any market.

So, there’s it’s more complicated than let’s just take money out of whatever accounts that are there.

So, I’m going to do this through a series of questions and uh if you can throw in as many examples and stories and wherever you’re comfortable going with this, but throughout the series, like again, we’ve talked about investment strategies, we’ve talked about withdraw strategies and this concept of the bucket approach for investing.

So, today let’s bring all of this together and how does the bucket strategy actually work as we start talking about retirement and withdrawals.

Mhm.

Matt: So, and to back up a step, the stock market we know historically averages roughly 10 or 11% a year.

It never does 10 or 11% in a year.

It’s all over the place.

So, we don’t know where the market’s going to be going.

So, if we build this bucket strategy, we feel very confident that we’re always going to have good options to help you get your money back.

Right?

So, simply put, the bucket strategy works by segmenting your assets by time horizon.

Mh.

So, we have a shorter term bucket.

So that’s the money you need tomorrow through maybe the next 3, four, 5 years.

So that is money that we want to we want to feel like it’s more conservative that it has some sort of reliability built into it.

We don’t want to have to wonder what that money is going to be worth day to day.

So conservative you might see slight change in values as you look from week to week or month to month but overall, we know that even if the stock market is performing poorly this money is going to be there.

So we can say look if we know that that money is there it helps us to do the planning to figure out hey this is how much we need over the next several years for whatever purpose whether it’s just regular old retirement income or you’re looking to make a big purchase of some sort.

We want to make sure we know what that money is going to be worth day-to-day and we want to be able to get to it without penalty.

So that’s where liquidity comes in.

Mhm.

Then we step out and say, “All right, so we’ve taken care of the money that we know we need in the next few years, how about that money we need maybe 5 to 10 years down the road.” Well, because we have that extra time horizon, we can afford to take a little bit more risk.

With more risk comes more reward.

So, let’s step out on the risk spectrum and try to have our money earning a little bit more for us.

Because if you think of just past years, and I’ll cover some examples in a bit, even if the stock market declined 20% in a year, with your intermediate bucket, you have some sort of defense built into that bucket specifically, like a buffered strategy that we offered to help give us some predetermined downside protection.

But since you’re not using it tomorrow, you’ve got four, five, six, seven years to let that money rebound.

And over time you’re going to come out ahead because that money is going to earn a lot more than it will just sitting in cash in the bank.

And then the third bucket is long-term.

So, this is money that we don’t think we need for at least 10 years.

Um maybe we don’t need it at all, and we have it earmarked for potential long-term care costs or maybe legacy for our kids or charity, whatever it may be, that money we’re taking stock market risk.

So, even if your risk profile by itself says you shouldn’t have all your money in the stock market, like this long-term bucket is going to be growth because that’s where we beat inflation.

That’s where we build wealth.

That’s how we make sure that we don’t run out of money down the road.

Because if you’re too conservative and you plan on living for 35 years in retirement, well, you need to have something that’s going to grow.

If we look at the last three years in the stock market, they were up almost 20% per year.

So, you don’t want to be missing out on that because you’re getting too conservative.

So, it’s really a blend of having all these different buckets with each having its own objective.

So that when we step back and say, “Hey, you’re a 65year-old that needs money from your portfolio.

Where are we pulling it from?” We’re going to build this so that we know where the next several years are coming from, so we don’t have to worry about what happens in the stock market.

If you’re 45 and you talked about this at the beginning, like it still matters for income planning because you got to build your base somehow.

Yeah.

If you don’t need money out of it, maybe it becomes more aggressive.

At the end of the day, it’s all blended together to make sure we hit your risk profile, which is that color of money risk analysis that clients of ours know, they take it every year.

And so that’s something we’re really trying to target.

um being you know everybody looks through the lens that they know and I’ve talked about this before on the show that I really appreciate the people side of things and the behavioral aspect that goes along with this.

There’s some key triggers that I heard you say that are really people living their life going through their natural decision-m making process and underneath it there is this financial foundation that is taking place and so one of the things I heard you say is goals are a really key piece of this and it’s important to communicate what those look like to your financial partner to your the planner that you’re working with or an adviser that you’re working with or just in general goals can be short-term they can be long-term.

They can fall all, you know, across the spectrum there.

But goals tie back to all of this.

So, we know where to put your money, what level of risk we should have associated with that.

The other piece that I heard you say and just um the risk profile and how you might feel about something, you may be naturally conservative and that can be a risk in itself if you push all of this money towards that.

and where you’re talking about spreading it out because you have a longer term and it becomes a blend so that you’re you know inflation risk or um you know interest rates risk and some of those things you take that off the table by having a blend and so and I think a couple points there one and I know the other advisers here at Palin do the same thing is when we sit down and talk with somebody about what are your monthly expenses there’s the discretionary side there’s the non-discretionary side.

It’s important while you’re still working to know what your budget is.

It’s really important once you retire and you don’t have a working paycheck anymore to know exactly what your expenses are.

And the way I frame that with folks is like, hey, if you need 4,000, if you need 8,000, if you need 10,000, that’s not so much the important part is making sure that it’s accurate.

So that when I build your plan relative to what your nest egg is and all your different sources of income are, we’re not saying, “Oh, let’s solve for $4,000 and then 3 years down the road you’ve taken all these different withdrawals because, hey, it turns out that you didn’t really know where your money was going and you’re actually spending seven or $8,000 a month.” That changes the math pretty significantly and now your risk of running out of money has gone way up.

But if we know ahead of time what exactly you’re trying to spend, we can we can solve for that and build a portfolio around that.

And it may be a conversation saying, “Hey, what you want to do and where you’re at currently don’t match.

You need to keep working or you need to make these cuts to your butt, whatever it may be.

At least we’re having the conversation before you quit your career job and have to figure out what you’re going to do for income from there.” Yeah.

Nikki: What I heard you say there is you get to be who you are but at least put it all out on the table and then we can work with whatever the facts are but just by working with a financial professional.

It’s not changing your world.

You get to be who you are.

We just get to help you craft the story around who you are.

And it’s better to know if you have the risk of running out of money when you’re 60 and still working than when you’re 85 and actually out of money.

So we want to try to avoid that as much as possible.

And then I think the bucket approach gives people peace of mind.

So every year even when the stock market has great years, there is a period during that year that does not go well.

Matt: Yeah.

We saw it in the first quarter of this year with the Iranian um conflict.

We saw it last year when tariffs started.

You can go back through history and pretty much every year that the stock market is whether it’s been up or down, there’s been a period that has not done well.

Sometimes those are quick periods that rebound before people even know it.

Sometimes they’re like the year 2022 where it’s just bad all across the board and it takes a long time to come out of it.

Having the plan allows you to ride through that without extra risk.

Yeah, absolutely.

Nikki: Um and I think that’s the piece that um we have people friends that are you know outside the industry or even sometimes when they’re in the industry and one of the questions when we are going through those rocky times they’ll ask me is oh are you getting a lot of calls right now?

Well, the answer is no typically because we have built it in the bucket strategy where it’s designed for the long term and yes, we have short term but it’s well diversified in a blend like you have talked about.

So, as we go through and talk about um this market decline and some of this this um you know wave that we’re riding with the market, one of the biggest concerns for retirees is what happens when the market declines.

And so, you’ve talked a lot about how that bucket strategy helps clients continue to take income without feeling the pressure to sell an investment at the worst possible time.

Anything else that you want to add to that?

Matt: Yeah.

So that’s like the se sequence of returns risk.

I know I think you and Ellie talked about it.

It’s come up in previous shows before, but if you think about your nest egg and let’s take a step back and not look at like what’s in it just overall.

Let’s say you had half a million dollars or a million dollars, whatever it is, and you are actively taking distributions to get by.

Whether it’s to fund the bare necessities or you’re looking to put a down payment on a cabin, whatever it is, you need this money soon.

When the market drops 10, 15, 20%.

And you take a distribution at the same time, you’re never going to make your money back because you’ve taken it out at a pretty Yeah.

poor time.

That’s where some other distribution strategies have problems where it’s like, oh, just take it.

over time it comes back.

Yes, the stock market does come back over time, but if you are using those losers to fund life while it’s down, you’re never going to make it back.

So, with having the bucket strategy, you can let that growth money do its thing.

We know it’s not a straight line, but you’re rewarded for it if you stick with it.

So, yeah, it might be down 20% temporarily, but we’re going to let it go because it’s going to shoot right back up.

we use our conservative bucket that doesn’t have that same risk and so we don’t have to worry about what’s going on around us.

We know where our money’s coming from for a specified period of time.

That concept of sequence of return is a big one and it’s not necessarily one that maybe comes that lingo may not become in place for a lot of people.

That’s actually what we have made uh as our complimentary download this month so people can visually see what we’re talking about.

Sometimes when you put a visual to it, you put numbers to it, it becomes Yeah.

It brings it to life a little bit.

And if you’re in your 40s and you’re working and you’re putting a small amount of your paycheck away every month, you don’t really care what the stock market does.

Yeah, you don’t want to look at your 401k balance and see it drop, but you’re not using that.

You’re actually putting more money in even when it’s down, which is going to benefit you.

The story changes when you’re switching from I have a paycheck to I need to basically f for myself.

I might get social security.

I might get a pension.

But the rest of it falls on me.

It’s a little bit different what you know, you want to know what that stock market’s doing and you want to know where your money’s coming from.

So you don’t have to sit there and think, man, I hope the stock market goes up tomorrow because I need my money.

Yeah, that is probably the piece that I try to emphasize the most when we’re talking with prospective clients is it is one thing to be putting money away in those accumulation of earlier years, but as you move into the retirement period and you’re making your own paycheck, there are so many moving parts that you have to make decisions on and you’re making decisions on unknowns and what-ifs.

And a lot of times they’re irreversible.

like they’re related to taxes or government, you know, regulations.

And once you make that decision, there’s no undoing it.

Yeah.

They can be expensive mistakes, too.

And I think what people that have worked with us for a number of years have seen, especially those that have transitioned from working to retired, is they have seen their portfolio evolve from being I’m working for a number of years.

I’m going to keep growing.

We’re helping manage that.

this is what the portfolio looks like to where okay now we know that retirement is coming up in the next few years.

They start to see their portfolio shift to reflect that change in life to where now they have those buckets as for income and the different the different spacing of it all and we start implementing income driven portfolios.

We have a whole host of tools at our disposal that as your life shifts, so does your portfolio.

And that’s where we step in to make sure it does do it the right way.

Yeah.

Nikki: So, if this sequence of return concept is starting to make sense to you and you think that you would like to see that come to life a little bit more, I encourage you to go out to our website at paladinfinancialtalk.com.

We always offer a complimentary download to go with our episodes and that’s the one that we’re featuring right now.

Again, it’s called the sequence of return chart.

Again, complimentary download, so you can see that.

So, do you have a real life example of how we’d adjust withdrawals during a prolonged market downturn?

Matt: Yeah.

So, when people think of

risk in the stock market or having fear of the stock market, a lot of people think back to 2008.

Yeah.

So, that was I mean, we’re coming up on 20 years now, but more recently, 2022 was a bad year.

So if we go back to 2020, there was a very steep decline, but it was very brief.

And by the end of the year, it was a good year in the stock market.

However, decisions made in 2020 as far as interest rates go led to a year 2022 that was really bad in the stock market.

Usually when there’s a bad stock market, people live in bonds that help provide the conservative side.

Well, depending on what index you’re looking at, bonds were down 10 to 15%.

So, all of a sudden, your safer place to be is getting crushed almost as bad as the stock market.

Like, where do you pull your income from?

So, again, we’re not we don’t have a crystal ball.

We don’t know what’s happening in the stock or the bond market over the next 12 months, for example.

But if we build the plan properly and we have pieces that we know are going to be able to ride through whatever storm happens, we feel much more confident in telling people, hey, if this does happen, this is how we’re going to navigate it and you’re going to be just fine.

Again, we don’t know everything that’s going to come out of left field, but that’s why you plan for it.

That’s why we have all these different options in front of us so that even if another 2022 or 2008 happens, we don’t have to panic.

Yeah.

Yeah.

Um, we have some newer individuals on our team that are studying to, uh, become advisers, taking tests, and doing all this.

And I was meeting with one of them this morning.

And there’s so many moving parts to all of this.

And, you know, the kind of the question or the concept is where do you even start?

What are our kind of our guidelines and our rules that we’re living by?

And that’s what we’re trying to communicate through this series is there is a plan and there is a strategy behind things so that we begin with some sort of structure in place and then within that you’re making decisions.

And one of the piece that I think I’m sorry if I’m stealing the thunder a little bit here but there’s taxes that we haven’t even begun to have a conversation on.

There are thresholds like Irma and social security and things that if you pull the wrong lever, you might have an unintended consequence.

And so it gets quite complicated.

But to know that there is something as the foundation to all of this, I think is a really important piece.

Yeah.

And I’ve had a number of clients who became clients because they’re knowledgeable.

They go out, they research as much as possible, they read a lot.

So what they were telling me is I found a lot of information on social security.

I found a lot of information on Roth conversions.

I found a lot of information on required minimum distributions, but nothing out there brings it all together and explains how it all works together.

And I, you know, if you make a decision on social security that impacts your taxes, it’s going to impact your required minimum distributions.

Medicare with Irma, all that ties into Roth conversions.

Like at a high level, I can give you pros and cons of all these things, but without digging into a person’s specifics, you don’t know if that’s actually a good strategy for them or not.

Because all these different things in our very convoluted tax structure here in the US and Medicare being complicated like it is, you got to know the rules cuz even if you like, oh, this is a great plan and you’re leaving out a couple key points, well, you might have cost yourself more on taxes, missed opportunity in the stock market, higher premiums on Medicare.

So that’s why you need to meet with an adviser that says, “Yes, all those things are true, but if you merge them all together, here’s the actual plan that you should take.” Yeah.

And I think back as we talk about all of this is most of the time when you’re making a decision, it’s coming from something that you simply want or something you need.

Do you need a new roof?

Sometimes you hope you don’t uh you have a little more planning behind that, but not always.

Or you want to do something.

And so those are behavioral emotional pieces.

And you get we then take a phone call saying I want a distribution of x amount of dollars.

Like I even feel like ding ding ding ding the lights start going off about all the different moving parts.

We always want to keep our software up to date so that when you do call and you’re asking for 20 or 30,000 that’s a you know impactful number that we can have our checks and balances in place saying if we do this or if we pull from this bucket and I that this is what the outcome is or this is the impact.

I cannot imagine navigating that without the checks and balances that we have in place.

The most recent example being a late60s person, needed a new car.

Most of the money is IRA money, so never been taxed.

Okay.

Um getting her getting a pension, not having started social security yet.

Question was, all right, I need a new car.

My budget’s $20,000.

How do I do it?

It’s like, well, simplest, most straightforward would be just taking a distribution from your IRA.

All right.

So, you take a $20,000 distribution.

You still owe the Fed and the state taxes.

So, really, that distribution is probably closer to 26 or 27,000 for this car.

Um, on top of that, your social security taxes will likely go up.

Now, you’re on Medicare, so we got to see if you’re going to breach any thresholds there.

That’s not what this person was thinking about.

Then I said, “Hey, not a big advocate for bringing on debt, but go out and see if you can find a good interest rate because yes, we’ll still fund it from the IRA, but if we stretch that $27,000 out over three years instead of one year, you’re going to wind up with a lower tax bill through the course of it.” And she was like, “Makes sense.

Let’s go ahead and do it that way.” And she was able to go back to the dealership and find a good rate that was, you know, very reasonable.

If it was 10%, I said, “No, no way.” But those are the things you got to think about.

How does that impact everything else you’re doing because that’s not what most people are sitting around thinking about.

Yeah.

And that’s where some of the stories when you’re talking to your neighbor or you’re talking to your cousin or whatever it might be and they say, “Oh, I just handled it like this.” How somebody handled it is not necessarily the same way that you would handle it.

And that’s very common to happen as hear it all the time.

You try not to say, “Oh, that wasn’t a good decision.” But yeah, you’re like, “Hey, you know, maybe you should have somebody to consult with.” Yeah.

Well, so as we talk about this bucket strategy, it isn’t something that you set it up once and then you forget about it.

So, how do you go about monitoring and replenishing the different buckets over time?

And what factors determine when it’s appropriate to start refilling?

Yep.

So, we talked about the short, medium, long-term, the time horizons.

The buckets, we actually drill down even further and we look at tax type, which you alluded to.

So, there’s taxable, which is basically money that you pay taxes on as you go.

There’s pre-tax money, so money that you got a tax break for making the contribution.

It’s never been taxed.

When you pull that out, you get tax at ordinary income rates.

And then there’s tax-free money.

Most typically thought of as Roth IAS or Roth.

So that money you’ve already paid taxes on.

It grows tax-free.

When you pull it out, it’s tax-free.

There’s rules around all this, but generally that’s how it works.

Nikki: Can I go back and just recap?

So the first one would be what we call a taxable account and that would be something like a savings account, a checking account, maybe just a simple brokerage account.

Matt: Yep.

The next one you talked about was tax deferred.

So common place like a 401k, a 403b, that would fit into that category.

Traditional IRA.

Yep.

Traditional IRA.

And then the final one was more of a Wroth.

That’s probably the most common, but that could also be an HSA account.

Um, that would be most common.

Cash value life insurance.

they’ll have their rules around them when you start dealing with taxes.

But yeah, those are their other buckets to get you your money back taxfree.

So when whether it’s just an ongoing distribution plan that doesn’t change much or a car, a roof, like those things happen every few years like you’re going to have to come up with 20 to $30,000 for something.

It’s if we’ve built the plan properly, and this is what sets us apart from maybe the do-it-yourselfer that’s just buying the stock market and letting it go, is we’re able to look at tax policy.

We’re able to look at where you are in life, plan distributions, all your sources of income.

My goal is to help you get your money back as efficiently as possible, whether from a tax perspective or a stock market perspective.

Yeah.

Last year, the one big beautiful bill passed.

So what that did a lot of things, but generally for the average consumer, it locked in lower federal tax rates with higher standard deductions until it gets repealed by some future Congress.

It did a lot more than that, but to us that says, hey, if taxes are lower now than what they’re forecast to be in the future, maybe we use that money that’s never been taxed now.

So that if taxes go up in the future, we’ve got a tax-free bucket where we don’t have to worry about those future tax increases.

We also ask, hey, where do you live?

Like where do you plan to retire to?

Are you going to be a Minnesotan where taxes are higher or you going someplace sunny where it’s also more tax friendly?

Those are all the questions we’re asking.

The whole idea, it helps us build these buckets so that we can have a very efficient way to get you your money back.

Nikki: So one of the things that um I think is a key piece of this is what it can’t be a set it and forget it.

I mean this is actively happening and so how is this actually managed?

So definitely rebalancing that’s a big one.

That’s also part of the reason that we are pretty adamant that we meet with folks at least annually if not more frequently.

A lot can change over the course of six months or a year.

And so we’re always watching the portfolios.

Even if we’re not talking to you, things are happening behind the scenes where management is happening.

But just to keep it simple, let’s say let’s say somebody came to me tomorrow and there’s I need 20 grand for whatever.

Well, I know I have a conservative bucket that I could use.

Mhm.

Maybe they’re taking distributions already and I don’t want to mess with that.

Stock market in ‘23 was up 18% and then 20 and then 26 last year and it’s up 10% this year.

So naturally someone’s going to get more aggressive, and it might be out of their risk profile.

So that might be an opportunity to take some winners.

Matt: Yeah.

From the growth side.

And what I tell people is like look your equity portfolio has grown significantly.

Let’s let the stock market pay for that car.

So, take the distribution.

It does a few things.

It gets you back in line with your risk tolerance.

You didn’t have to disrupt your conservative bucket and you got your money.

Same thing happens even if you’re not needing to take the distributions.

We’re going to look at your risk profile and see how that matches with your portfolio because when we have these great years, we want to take the winnings off the table and protect them so that if we get a bad year, you’re not losing your winnings that you had.

And for some folks, it’s saying, “Hey, the market’s down.

Let’s go ahead and take advantage of it and actually put some cash to work.” So, just more flexibility for us, but you can’t just let it go because the world around us changes quickly and so we’re always on top of it.

when I was training with uh like I said one of our newer employees I kind of the evolution that I went through with her and as we talk today is there is it starts with knowing what somebody’s goals are and when we talk about goals we’re not talking about just financial goals we’re talking about cabins and kids education and like all the real life things and then the test to that is net worth and then net cash flow and I might actually say those reverse is what’s happening on a monthly basis coming in and out.

Are we is there excess or is there not?

And so you dig into you know the answer to that and why or why not.

And then the bigger picture is the net worth.

Then you get into the concept of having an investment strategy or a withdrawal strategy that goes along with this.

The tax treatment that gets layered in and that’s what you have been talking about especially as it relates to the withdrawals.

That’s where that tax piece becomes so critical.

And then kind of the final piece is this test of making sure we don’t get to one side or the other of what your comfort level, your risk is and the constant rebalancing that goes along with that.

And so back to what you said is this is a really heavy industry and a lot to understand and a lot of moving parts.

But if you can keep it rather simple of talking about kind of the evolution of the way that we’re looking at it and then kind of I don’t want to say the final piece because it’s an you know it goes round and round but making sure you’re constantly within the scope of where you’re comfortable.

Yeah.

And we haven’t even talked about okay I know I’m supposed to have a long-term bucket or a short short-term bucket.

What actually goes inside of there?

That’s where we come in as advisers to know all right yes I know I need to have x amount of dollars in the stock market but which stock market do I want US do I want international do I want small cap large cap do I want to be heavy into oil or healthcare like those are the things that once we know your profile we can help put you into the proper blend of portfolios that itself can be overwhelming for people what I try to stress to people is like hey this money is growth this is medium-term this the short term.

I’ll handle how it’s actually invested and certainly educate you and you have full transparency to see what it is, but it’s my job to know when we need to be making tweaks in those buckets.

You do the exercises to tell me what your risk profile is and we’ll build it based off that.

back to training this individual.

And what I said on this part, I said, “Every time Matt tells you to do something, ask him why.” Because he it because you have such good common-sense explanations to why you’re doing something.

So just don’t be surprised if uh start coming up and I did I said that gets to another level that often times people don’t really want to know that.

I mean, some people do.

They have an appreciation and they want to have an understanding, but for the most part, that gets to a level that’s beyond what a lot of people understand or care about.

And I tell people, too, clients like, hey, we don’t want to be the adviser that just says, “Trust us.

We got it.” Like, certainly you should trust us and we do have it, but we want you to understand what’s happening.

Like, you don’t necessarily need to know like the metrics of every company making up your portfolio, but we want to educate you as to why that exists.

Yeah.

So, in theory, when things aren’t going well, you can sit back and think, “Oh, that’s okay.” He explained this to me.

Probably couldn’t pass a test on it, but I know it’s in good hands.

Yeah, absolutely.

Nikki: Well, as we start to wrap up our conversation here, Matt, if there was one misconception people have about creating retirement income, what would you say that is?

And do you have or what do you hope listeners would take away from this series and the things that we’ve talked about today?

Yeah, I think M I think people can get lulled into a false sense of security as far as like, hey, I’m invested.

The stock market’s doing great.

It’s done great for three and a half years.

This is easy.

Anybody can do it.

I need money.

I go into my account.

I pull it out.

Matt: Yeah.

Doesn’t matter really because it keeps going up.

When people are making money, when the stock market’s doing well, that covers up a lot of mistakes and it’s just easy to say, “Ah, it’s okay.

I made money anyway.” When things aren’t going well, that is when people start to panic a little bit.

The ones that have a plan tend to do just fine and come out of it a okay, maybe better off.

The ones that don’t have a plan that are just kind of willy-nilly taking as needed, that’s when you’re going to have trouble because then you’re doing the sequence of returns risk.

Then you’re making poor decisions as far as taxation.

So what to me it’s like yeah everything’s going great but you need to plan for when it’s not because that happens every few years and also even though you think you’re doing great because your account keeps growing look at all the look at all the things internally that could have been better if you had had the right person in your corner.

Yeah, Matt, I don’t want to make this over compliment complicated as we recap and I feel like in true Matt spirit, if I just say the recap today is have a plan, I feel like that’s might that might be just fit who you are as part of it.

Uh, as you talk about um the simplicity of that is having a plan and how easy if things are going well, how easy it is to just let it be and let it be okay.

I think back to kind of a common sense things that we all go through and it’s a good time of year to talk about this is you start accumulating subscriptions that you have enrolled in throughout the year and you start you know you spend a little extra on groceries and you you know it gets a little fluffy you know that happens really easy and how fast that can happen.

Same concept of you have to have a checks and balance.

you have to come back to uh having a point that you check in on yourself along the way and that comes from having a plan and so that’s a um that was kind of a convoluted response there but I do think that you know if you don’t have a plan you spend on a lot of things and if you never come back and give yourself that checkup of oh my gosh I have 15 subscriptions I didn’t even realize it I canceled three this weekend there you go so yes it it’s the same you know same concept of coming back and having a vision having a plan and having a strategy that you’re working with.

And so as a reminder and then remember that you know building wealth gets you to retirement but creating a paycheck is what gets you through retirement and it’s often far more complicated as you have pointed out.

So Matt, you are highly educated.

You continue to invest in additional education for yourself.

Do you have any resources you’d like to recommend to our listeners?

Yeah, so I read a lot.

um whether it’s just financial news like a Yahoo Finance is more of an aggregator of all these other services.

Um Investopedia is one that when I was first starting out in the industry I referenced a lot and it’s as simple as what is a bond, right?

You can type in what is a bond and it gives you great videos.

It explains what a bond actually is because most people don’t actually know.

But then you can get complicated whatever financial topic.

They do a pretty good job of distilling it and saying, “Hey, this is a simpler way of thinking about it with videos if you’re into videos versus the text.” But Investopedia is a big one for just education on how the financial markets work.

And then just current events, whatever aggregator you want.

Try to get different sources.

This goes beyond probably just investing, but where’s the source of these stories?

You know, that makes a big deal.

And just trying to understand what’s actually happening.

No one knows for sure what’s going to happen in the future, but stay educated.

I tell clients if you have questions or you see an article and you’re like, I don’t know what this means or this scared me, which a lot of them are designed to scare you.

Send it to me.

Let me either I can answer it myself.

I can talk to one of our portfolio managers.

whatever it may be, I can get you an answer from our perspective.

That tends to take the emotion out of it and says, “This is what this actually means.” That right there is an invaluable offer that you’ve just made because it you can read all you want, but sometimes you don’t understand the lingo.

Sometimes you don’t understand the whole picture.

And so having a resource in your pocket that can help you navigate some of that.

Well, is there anything else that you’d like to add as we wrap up, Matt?

No, I mean it’s uh once you start digging into the financial world, it gets very complicated very quickly.

Um encourage people to read and understand what’s happening, but you need to have an adviser in your corner.

Yeah.

You need to have somebody that understands how all these different pieces work together and also the peace of mind to be able to call somebody when the stock market’s down 20% after a year to say, “Is everything okay?” Yeah.

Though that’s what I encourage people to do.

Nikki: Well, as we wrap up our series on investment strategies and withdrawal strategies, it’s more technical than we get sometimes on our episodes and on the podcast as a whole, but I think it is important to recognize how a plan and a strategy is a really key piece of this.

And back to how you just you just shared there is you can’t know it all.

And having somebody that is a specialist in this really can help you navigate.

And so the last four episodes have been on this.

I highly encourage you if you uh feel like this is something that is speaking you to you, go back and listen to some of the ones if you if you didn’t listen to all four of them.

Or the simpler option here is to book something with us.

We offer a second opinion uh where you would come in for a complimentary full, you know, conversation, one-hour conversation with us or if you want to tiptoe in, we do 15-minute no obligation conversations that would go ahead of that.

So, you can book those by visiting our website at paladinfinancial.com or our podcast website at paladinfinanitalk.com.

Either way, you can book one of those sessions, whether it’s with Matt, myself, or one of the others on our advisor team.

You also uh the old school way, it’s not so old school, but hearing another voice.

Uh you can call us at 651-842-8406.

We just talked this morning about how important it is to pick up the phone to be available uh on the phone to make sure that we are are being a resource for you.

So again 651-842-8406.

We’re doing a lot on social media right now to educate you.

So visit us on YouTube, Facebook, Instagram, LinkedIn.

And we talked about earlier in this in the episode that sequence of return chart that we have made available to you.

You can find that at paladinfinanialk.com.

Well, thanks again Matt for joining us.

You did an excellent job and again kept it simple as you always do.

So, thanks for listening and we’ll see you on the next episode.