Episode 4: Can I Retire? Breaking Down the #1 Financial Question

When clients sit down with us, one question comes up more than any other: “When can I retire?” In this episode of The Financial Huddle, we dive deep into the realities behind that question—why so many Americans don’t know their retirement number, why living longer makes planning more complex, and why early retirement often isn’t a choice.

Ryan also shares his personal story of being forced into “retirement” from professional baseball with the Philadelphia Phillies, and how that shaped his perspective on planning for life’s unexpected transitions.

We’ll cover:

• Why the 4% rule isn’t the full story
• Business owner exit strategies vs. W-2 employee retirement planning
• How Social Security, pensions, and annuities fit into the equation
• The importance of knowing your desired lifestyle number
• Why leaving a legacy takes just as much planning as funding your own retirement

Whether you’re 5 years or 25 years away from retirement, this episode will give you clarity, perspective, and practical steps to start answering the big question: Am I ready to retire?

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Disclosure: Information contained in this podcast is for entertainment and informational purposes only, and should not be considered as financial advice. Financial Planning and Advisory Services are offered through Prosperity Capital Advisors (“PCA”), an SEC registered investment adviser. Registration as an investment adviser does not imply a certain level of skill or training. Keystone Financial Group and PCA are separate, non- affiliated entities. PCA does not provide tax or legal advice.

Transcript

Announcer: 0:00

The Financial Huddle does not provide tax, legal, financial, or other professional advice. Listeners are encouraged to consult with their own advisors in these areas. All right, everybody, huddle up. The play calls in. This is The Financial Huddle.

Ed Beemiller: 0:12

Ready, break. Welcome, everyone, to our next episode of The Financial Huddle Podcast.

Brian Minier: 0:19

Let's get it. What's up, everybody?

Ed Beemiller: 0:21

Where we intertwine sports... in financial topics. You've got to call the right play in the huddle, Ed. I think we finally, the weather's getting warmer, a lot warmer. We're heading into summertime, and with that, I know, Brian, things have changed a bit in your household. You now have two college kids that are

Brian Minier: 0:41

home. How's all that going? I'll tell you, you miss them, and you know this, man. You experience this. You miss them when they're gone, and then you're glad when they come home, but when they're home for about a week, you're like, I'm ready for this. for you to to maybe just come back on the weekends

Ed Beemiller: 0:57

yeah you know certain things clothes are just dropped in the middle of floors you know they ask well what's for dinner and you look at them and say i don't know you tell me right i mean they're they're young adults but they still want the comforts of you know staying at the holiday inn express

Brian Minier: 1:11

that's right i think when my oldest come home i i came home from work and he had gotten home before me and there were like five or six different bags in the hallway

Ed Beemiller: 1:19

yeah

Brian Minier: 1:20

and you know

Ed Beemiller: 1:21

and then they complain at dinner there's nothing for there's no food to eat Yeah,

Brian Minier: 1:25

you've been there. I've been there. Been there, done that. That's right.

Ryan Fleming: 1:28

Now, Ryan, same with you. You've still got two running around. You do got one that came home, but only for a little bit, though, right? Yeah. My son, he's staying up in Cleveland working, getting ready for that internship. My daughter, she's working two jobs, so she's busy, busy trying to save that money for college. You know, it's bittersweet. Going on to be a Bobcat next year. That's right. University Bobcats. Watch out. Here we go. I think in her heart of hearts, she's ready to get out. But we're going to miss her. So we're trying to soak up as much time as we can, man. She's the only girl in my family in 60 years. So no Fleming girls. So... Maybe a little extra special touch. So what you're saying, she's got a lot of pressure on her. Bittersweet, man. That's right. Bittersweet. Right? Yep.

Ryan Fleming: 2:18

Well, good. As a financial planning firm, Keystone Financial, first and foremost, I want to make sure everyone, we greatly appreciate you listening in. As Ryan has said, we've said before, please share this with friends, family, cohorts. We're out to provide that information, that education. We're out to provide that information. to build financial literacy. And in our firm, in our industry, there's certain questions that are always asked. When we have a first meeting with a client, one of the first questions they often ask is, Ryan. Yeah, by far the number one question I get is, hey Ryan, when can we retire? When am I going to be able to retire? Tomorrow? Yeah, tomorrow, yesterday. And it's a very valid question, and it's a very loaded question. So what I did, I thought this would be good information for our listeners out there. It was actually educational to me, too. I went to my best friend, Chad. Chad GPT. I like him. He's a good dude. I mean, this guy's a great human. He's growing into his own. He

Brian Minier: 3:28

really is. He constantly evolves.

Ryan Fleming: 3:31

Yes. Ever-changing and evolving. He might be trending towards my best friend. Oh, there you go. But old chat, I asked a little bit about this, and these are some things that I thought were interesting that you guys might not know. Well, most people, they obviously don't know their number. That's why they ask us all the time. But according to Northwestern Mutual and a study done in 2023, 55% of Americans, they have no idea what they need to retire. I guess that's why they're asking us so many times, right? They need a plan. You wouldn't get on a road trip. not knowing what the destination was, would you? So retirement works that same way. Another stat, as we know and we hear all the time, people are living a lot longer. You do a lot with Social Security. That was pretty much founded on a life expectancy of 65.

Brian Minier: 4:25

Well, 63. You could take Social Security at 65, but your life expectancy was 63. Ouch. Something

Ryan Fleming: 4:33

wrong with that number.

Brian Minier: 4:33

Yeah, it changed a little bit, morphed into something a little bit different.

Ryan Fleming: 4:37

That's an oxy moron. Well, Well, 65-year-old today, they got a 50% chance of living past 85. And if you're 65 years old today, you have a 25% chance of living past 92. This is from the Society of Actuaries. Retirement really isn't a 10-year sprint anymore, fellas. And our clients need to know this. I mean, parents, some of the parents that I work with with college planning, I mean, they may live another 25, 30, 35 years. And so it's a marathon, and that money's got It's got to last forever. the retirement age myth. A lot of people, they don't understand this, but 40% of retirements say that they retired earlier than they had planned to. And that can happen for a myriad of different reasons. But a lot of times, most of the time, it's due to like health issues or layoffs. And it could be health issues of like, you might be healthy, but your parents are unhealthy and you're forced to go help them. Or a spouse. Or a spouse, that's right. And you may not get to choose when you retire is really the moral. But Yeah. You got to be prepared for that. And most Americans, as we know, are grossly underprepared. And to put some metrics to that, the median retirement savings for Americans today, age 55 to age 64, that range right there is just $134,000. And this is from the Federal Reserve of Consumer Finances in 2022. Just to put that into context, if you had that amount of money, that would provide less than $600 a month in income for life and if you just think about that for a moment i mean that's kind of scary and you can understand why people ask me that so much i'm sure you get asked that so much there's a lot of angst there's a lot of unknown but that's a big hairy question to it's a complicated question so now ryan you uh you have a very unique uh retirement story. A lot of people don't know this. It probably hits a little personal. It hits home. It is. A lot of people don't know this, but I've already retired one time in my life. Congrats.

Brian Minier: 6:47

Did they throw a party for you?

Ryan Fleming: 6:49

No.

Brian Minier: 6:50

No

Ryan Fleming: 6:51

party? I thought they might, but they didn't. The reason why I'm repping my Phillies jersey here is that actually the story, it's emotional for me. It's very personal. Since I was a little boy, I had this dream of playing professional baseball. I really meant it. There's stuff my mom has shown me when I was in kindergarten, first grade. My whole childhood and coming up through middle school and high school, I really, really wanted to play professional baseball. And by the grace of God, I was granted that opportunity for many, many years, played 10 years of professional baseball. And the last team I played for was the Philadelphia Phillies. I had played for three organizations. The Toronto Blue Jays gave me my chance. They made my childhood dream came true and drafted me out of the University of Dayton. I got a chance to play for the Texas Rangers for a brief amount of time. But I finished my last four years with the Philadelphia Phillies organization. And make no mistake about it, when you get into professional baseball, You know that at some point in time, whether you're going to be a Hall of Famer or you flame out in a rookie ball or something, you're not going to play forever. Your time's coming to an end. And I was no different. I knew that it was going to come to an end at some point in time. But April 1 of 2007, I was forced to retire from the game, so to speak. So, like you talked about, forced early retirement. It wasn't necessarily your decision. Yeah, it's interesting because... you know it's a business as we all know I didn't want to retire I still my body felt good I was healthy I I didn't have a lot of injuries but I got called in the office the last day of spring training and they basically said man We love you. It's a business. We invited way too many people into spring training. We're not going to send you back to double A, and we're going to have to let you go. So you didn't get the Bull Durham treatment? I didn't get the Bull Durham treatment. You went down to mentor that rising flamethrower. Well, Crash Davis still was trying to set the home run record. Home run record, yes. I never was known for my home run prowess. So anyways, long story short, they said, we've got to let you go. But ironically, they all said, we've got to let you go. offer me a job in the same breath. They said, hey, we would love for you to stay here and be part of the organization. I declined right on the spot. I literally resigned right on the spot. I didn't go ask my wife. We had two small children. She had given up 10 years of her life. Although I could have gotten rehired back again right away, I retired from that sport and walked away from that. Sometimes in life, we know what's coming, but we're not prepared for it. And it's no different with our clients. They know that they want to retire. They just don't know how or what or where or when. And that's our job. And so I'll retire again someday, maybe. But I got one underneath the belt. Not before me. Well, we'll see. Yeah, you are the elder statesman. That's great. You are the elder statesman, even though you have less gray hair than all of us, believe it or not. But, you know, that got me thinking, you know, When I talk to my clients about retirement, I know you talk a lot about the same exact question. And like we talked about on prior episodes, one of the things you work a lot with and had done in the past are business owners. Well, their retirement questions and their retirement strategies are a whole different set of circumstances than maybe a traditional W-2 employee. So what are some of the exit strategies or questions you hear from business owners about retirement?

Ryan Fleming: 10:27

And working with a business owner, it's very unique. opposed to just a normal individual that has a w-2 type paying job because they spent their entire life building up a business they have employees they want to make sure you know the employees are treated right and there's really three different types of succession planning And once again, it depends on the size of the business. And is this a business that is going to survive them from removing themselves? And at the end of the day, retirement is about one thing, I always say. That's income. Paychecks. Paychecks. You've got to have that income to pay the expenses to live your retirement lifestyle. So even a business owner just can't say, all right, yeah, I'm just going to walk away, unless, of course, he's done a great job throughout the process of basically accumulating wealth and investing correctly, having a plan, which is obviously where we come in. But for many business owners, the company's their baby. It's their child. And so they're very concerned about leaving it in good hands. Many small, mid-sized business owners are able to have family members. Often it's their children, kind of that second generation that they can basically pass the business to. And often that can also be part of the retirement income need. for the present owner, where they buy that out over a period of time. That comes with a lot of different issues and complexities, because how many children do you have, and is it a single owner versus two or three owners, and are all their kids going to come into the business, which a lot of times, honestly, from what I've seen in my past experience, can be a nightmare. It's complex. Oh, it's complicated. There's attorneys, there's... CPAs, there's a lot of people involved in that. Another exit strategy is selling to basically key management or key employees within the company. It's a little different than, obviously, a generational sale, but the same type of thing. You have people that have been involved in the business and have risen up. understand the business and that can often be a very seamless transition but once again the owner kind of his succession planning is often paid out over a period of time so that the business can the cash flow can actually pay that and then the third one is just an outside third-party purchase you know in most cases the business owners there they just want their money they're not willing to take money back on a buyout provision but at the end of the day what we have to do just like an individual because at that point they're an individual right they just happen to own a business we have to be able to have a plan together once again that creates that income sufficient to enable them to further lifestyle and you know you talk to people that are like From these social security workshops that are at the end. I mean, they're getting ready to retire. Getting close. Yeah.

Brian Minier: 13:49

Some of them,

Ryan Fleming: 13:49

yeah. Is there like a certain number that, you know, do they ask you certain questions? Yeah, I

Brian Minier: 13:54

love the question of what is the number that I need? That's

Ryan Fleming: 13:58

what they

Brian Minier: 13:59

say. And it's not only just the folks that are getting close to social security. You'll see this with people in their 40s, early 50s, and they're like, oh, this is going to come before I know it. It's going to be here before I'm a blank and I'm going to be there. And they'll say, well, what is the number? I'm sure you guys get that question as well, right? Like, what's the number that I need? Remember those old commercials that would say, what's your number? And that's just so arbitrary of what is the number that I need. It's like, I got to dig a little bit more. You got to tell me a little bit more about. What's your lifestyle?

Ed Beemiller: 14:36

I remember hearing, and this goes back a little bit of time, maybe I'm showing my age a little bit, but boy, if someone had a million dollars, they were set for life. Nowadays, you don't hear these stories about, oh, this person just became a millionaire. There's actually a lot of millionaires, and in most cases, once again, but dependent upon their income objectives, the needs that they have, when we ask about how much is enough, Well, what's the lifestyle you want to live in your retirement? So a million dollars, if you want $150,000, $200,000 a year of spendable income,

Brian Minier: 15:14

you

Ed Beemiller: 15:14

better plan on a really short retirement.

Brian Minier: 15:16

That's right. And not only that, what other sources do you have? Correct. I have some folks that I work with, I know you guys do too, that Social Security and lucky enough to have a pension or two, game over. It's solved. They don't even need to dip into anything because... that amount that they need to keep the lights on is covered by those mailbox money checks every single month.

Ed Beemiller: 15:37

And I know it's a question you always ask. It's the old saying that you can't take it with you. So you have to identify, well, how much do you want, but how much do you want to leave behind? Whether it's for your kids, a favorite charity, or something like that, the whole legacy side of that equation. Because then if they have those additional assets, hey, good for them. But you either spend it and enjoy yourself, or... You have a plan together to say, all right, I want to leave X amount of money to each of my kids, grandkids, or I have a favorite charity.

Brian Minier: 16:07

That's right. Your money is going to go to three places. It's going to go to your family. It's going to go to a charity or it's going to go in the form of taxes.

Ed Beemiller: 16:15

Yeah. The government.

Brian Minier: 16:16

That's right. You can control two of those.

Ed Beemiller: 16:18

Right.

Brian Minier: 16:18

Right. So to your, to your point, not only do you want to leave money, but how do you want to leave that money? Because there's different tax ramifications. Ryan talked a little bit about tax planning that we can help with. But that can create a whole other set of circumstances depending on how you leave that money.

Ryan Fleming: 16:36

Now, let's say that a client has cleanly defined what their desired lifestyle number is. Maybe it's $10,000 a month after tax. We have a clear definition of what they desire to live on. Maybe let's speak to the fact of, well, okay, how do you start to distribute your money? Should we do the 4% rule? Should we use... an income annuity? Is it more important to not touch the principal? Maybe we can speak to that a little bit because I hear that a lot. I hear people that come in that say, well, I'm just going to take 4% and leave the principal. But then we follow a lot of other really, really smart in our industry, you know, like Dr. Wade Pfau, they may say something different. So, like, for example, I have a lot of people say, well, I'm just going to distribute my $2 million and take 4% because X, Y, and Z advisor ran a Monte Carlo example and said that if I just get average returns of the market that I have an 85% chance of not running out of money. And that could work, right? And the sequence of how those returns come in could work out even better. But, you know, There's the other side of the house where somebody like a Dr. Wade Pfau and some of the academia that's out there that would say perhaps you should consider buying a guaranteed income pension annuity because it's considerably cheaper to solve your income with way more certainty. Yeah, you minimize or mitigate or eliminate risk in terms of that annuity. satisfying the income objective that you need for retirement. Yeah, and I think the point I'm trying to drive is that there's, when people ask, when am I going to be able to retire? There's a whole subset of questions like what I just said. Are we going to solve it with the 4%? Is it really 4%? I mean, somebody like Susie Orman might say it's closer to 3%. Dr. Wade Pfau and other experts might say, well, it's much cheaper to solve it by purchasing a guaranteed pension income annuity and have absolute certainty you'll never run out of money and maybe leave $300,000, $400,000 that you're You can invest into the market to hedge inflation. So there's a lot of different ways to solve once we get the income desired number from the client that maybe you have to cross

Brian Minier: 19:04

that. You have to start off with what is the desired amount. I mean, how many times have you been asked, well, can I retire? Well, what is your income objective, right? You can't answer that question without telling us what you want. So let's say, to your point, you get there. You know, $10,000 after taxes, that's the bogey. Well, do you look at that 4% rule? And that is a very common way that a lot of larger firms will have their advisors implement that practice. And can that work? Potentially, especially if you have a lot of money saved. But the question that I always... Ask back is, does it optimize your plan? Just because it works, and maybe it does, maybe it doesn't, it depends on what the market does. It depends on if you get a really significant market downturn like we had in 2008. So you have to... consider all those but then even more important does it optimize your plan yeah so you may not run out but does it leave you with the ability to leave an inheritance as you asked earlier does it does it give you the ability to give philanthropically to to non-profits so it's it's more than just the four percent it's how do you customize that plan that we've talked about before and to optimize what you have. Some people are just great with, okay, I have enough. I don't really care. And you got to press them of, but does this optimize what you can do, not only for yourself, but for generations and nonprofits and things like that.

Ed Beemiller: 20:39

It's really about, you know, having, making sure you have appropriate allocation of your assets and then something that I know you guys talk about, and Brian, I know you talk a lot about it, is distribution planning. Everyone focuses on, hey, here's how you build wealth, but very few... focus on, well, how am I going to spend that down? And once again,

Brian Minier: 21:00

get back to- I got a 20% return, as you said in a prior episode. What's the

Ed Beemiller: 21:03

optimal way to spend down? Which account do we pull from? How do we offset if we're taking 4% out from a market-based account after a 20, 30% correction? You need to have appropriate asset allocation within some fixed income to help buffer

Brian Minier: 21:20

Yeah,

Ed Beemiller: 21:21

for sure. Those periods of time. For

Brian Minier: 21:22

sure.

Ryan Fleming: 21:22

And part of our mission statement is, as we said, that we want to bring confidence and certainty. Right. So relative to this retirement 4% rule, think about it. I mean, if you had a million dollars, you use the 4% rule adjusted for inflation, you pull out 40 grand your first year. Okay? But that's... That's expensive. That's a very expensive and a not 100% ironclad way to get it. It could work out in your favor, but we just don't know what the rates are. And like I

Brian Minier: 21:49

said, even if it does work, it doesn't mean you put the best thing forward.

Ryan Fleming: 21:53

But that same $40,000 could be generated, let's just say, by maybe only $600,000 and purchasing a guaranteed income lifetime annuity and thus leaving you another $400,000 on the sideline that you can invest. But that's That pension that was created by that annuity is guaranteed for life, no matter what the market does. And so you just got to weigh those back and forth with our clients to not only answer their question, but to also, like you said, maximize. These are something we do on a weekly basis for our clients. And ultimately, our business as financial professionals, as planners, is helping our clients get from point A to point B. In most cases, point B is retirement. right? So you could argue that this is the most important question that we face, right? Because why do people plan? Why do the people plan and why do they build wealth and save money? Once again, we've talked about this. Well, so at some point, they have the opportunity. They're in control of deciding, all right, I want to leave my job. I'm ready to retire. And it all comes back to Can I retire? And those are the questions that we basically have to solve for them. you know, through the process.

Brian Minier: 23:12

They want to feel like they have the certainty, but unfortunately a lot of times they don't know what other questions to ask. Correct. That's what we help with.

Ryan Fleming: 23:20

So if you're watching this today or you're driving on the road and you're listening to us and you've got questions or uncertainty about your retirement plan, your desired lifestyle number, or maybe there's people that you've come across just in passing at the ball game, somebody that you met at work or something like that. If you Do you want more clarity on your questions about retirement and sustainable incomes and the things that we've talked about here today? I would say, you know, Share this with somebody. Pass it on. Give us a shout. And I would encourage you to stay tuned. The next couple episodes, what we're going to cover are a couple other very important questions that we hear time and time and time again. And we're going to address those in detail as well, too. But as always, we thank you so much for tuning in and listening. And don't forget to huddle up with us next time.

Brian Minier: 24:15

Nice segue.

Ryan Fleming: 24:17

I like that. Take care, everybody. See you soon.