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One of the most challenging parts of transitioning into retirement is dealing with the fact that you're no longer receiving a paycheck from work. So today we'll discuss how to make that process as smooth as possible, as well as talk about some of the common feelings and missteps that many people face.----more----Here is a transcript of today's episode:Marc Killian: Hey everybody. Welcome in to another edition of Retirement Planning Redefined with John and Nick financial advisors at PFG Private Wealth, an independent RIA serving you in the Tampa Bay area. Their office is also in Tampa Bay. Find the guys online at pfgprivatewealth.com. That's pfgprivatewealth.com, and anytime you're listening to the podcast, not just ours, but anybody's, if you hear something interesting or that you want to learn more about when it comes to your retirement plans, your financial plans, before you take any action, always check with a qualified professional like John and Nick at 813-286-7776. That's how you can call them and ask those questions that you might find interesting or useful. 813-286-7776 and with that I'll say, guys, welcome in. How are you?John Teixeira: Hey, good. How are you doing?Marc Killian: I'm hanging in there. Nick, how are you? Doing all right?Nick McDevitt: Yeah, staying busy.Marc Killian: Staying busy. So what's going on with you guys? I haven't talked to you for just a little bit, and now we're getting back on the podcast here. What's new?John Teixeira: Oh, what's going on with me? I have three year old daughter, Olivia, just started her swim lessons back up. So that's been pretty exciting. Going to the YMCA few times a weekNick McDevitt: And I have been traveling a little bit this summer. Was Up north in my hometown of Rochester, New York for a week for a family reunion, and traveled a little bit out to the west coast to visit an old friend.Marc Killian: Oh, Okay. Cool. So had a little bit of personal stuff going on. What's going on with the business? How's things going in the practice? You know, let's talk about some things today that might help our listeners out when it comes to, you know, just in general when we're thinking about retirement planning and getting these things together. I kind of had a general thing I wanted to talk about, if that's alright with you guys? It's just to kind of touch on the fact that a lot of people would kind of stress over no longer having a paycheck anymore, and that's usually like kind of the big hurdle mentally, at least when you're first hitting retirement is to say, "All right, so, what do I do when I don't have a check?"Nick McDevitt: Sure. We've actually had a lot of clients kind of making the transition to retirement lately, and recently the markets had been a little bit more volatile.Marc Killian: Sure, yeah.Nick McDevitt: One of the interesting things that we've seen is with them being retired, they spend some more time watching TV and watching the news and of- [crosstalk 00:02:14]Marc Killian: Man, that's a bad combination.Nick McDevitt: ... Yeah. Tends to tick up a little bit. And so, you know, we've really been working on emphasizing with them the importance of having an overall strategy and plan, reminding them of that, and helping to work with them to just kind of implement a process where we can kind of recreate what they're used to from the standpoint of, although they don't have a paycheck from work anymore, you know, we are generating a paycheck from their investment accounts. And so we try to create some stability with that, and remind them of the longterm strategy.John Teixeira: Yeah. Kind of jumping on that with Nick, you know, a lot of people, I mean in reality start kind of working what, 16, 18 you getting a paycheck the whole time.Marc Killian: Right.John Teixeira: And it's really almost like your permission slip to go spend things. It's like, "All right, I want to buy this," and all of a sudden, "Hey, all right, after two months of saving I'll go ahead and purchase this." And when that's gone, it really creates a little bit of fear, because now you have your investments that need to provide that. And what we've seen a lot is clients, they get afraid to spend. One of our joint clients was kind of transitioning to retirement and she's like, "I don't know. I'm afraid to spend money, because I don't have my paycheck anymore." So you know, it's really important what Nick mentioned to really focus on trying to create some type of strategy to provide a peace of mind.Marc Killian: Yeah. I mean, you can get the plan put together and all that kind of stuff, but sometimes there's these mental hurdles. The things that you just have to sit down and talk through that part of what you guys do sometimes really is also a bit of counselors, if you will, because it's like, "Okay, let me show you why it's okay for you to spend some of your assets," or you know conversely saying, "Okay, you're going a little too crazy spending. Let's roll that back and whatever and make some adjustments." So clearly that makes it important to have a strategy, you know, like if people are used to getting paid, let's say monthly or bimonthly, do you do the same thing when it comes to disbursing, you know, their retirement accounts?Nick McDevitt: Yeah, we tend to try to focus people on a monthly budget, especially from the standpoint of, you know, for those that have filed for social security, they are getting paid once a month, usually towards the beginning of the month. And then a lot of times what we will do is maybe the automatic distribution that we send to them will be a couple of weeks later, halfway through the month. So they still get, you know, two paychecks, one from social security, one from us. And that provides them with a little bit of stability to kind of get used to. Although the paychecks usually aren't equal, they're still getting paid twice a month. And they get used to figuring out when they have to pay their bills, and how they're going to manage your expenses. But overall we try to really, as we go through the planning, we create a budget. We create, you know, a projected monthly expense.Nick McDevitt: We start sending them, you know, the proper amount based upon that. But we also let them know that that first year or two is really a test, you know, to see, make sure that they're comfortable, emphasize for the planning that what they're spending is okay, and also the factor of trust really comes into play, because we're letting them know that if we're uncomfortable with the amount of money that they're spending, we're going to let them know. And so we try to have them filter some of those concerns through us, so that they're not restricting themselves at times when they don't really need to be.Marc Killian: Yeah, I mean obviously that's going to be the case because like anything as you're moving through retirement, you're going to have to alter this. The strategy needs to move and flow and ebb. You know, you kind of mentioned earlier that the markets have been pretty volatile the last little bit. At the time of this podcast taping, we've had a pretty good slide. Just earlier this week it was like, I think it was, what, almost a 10% drop or so, but that's going to happen. Right? And so if don't have a paycheck coming anymore, sure it's understandable to get stressed out. I mean, the market does this. I think on average it does move quite often. If you go do the research and the statistics, you'll find that it doesn't always just, even this bull run we've been in, it doesn't just go straight up. There's always ups and downs and ups and downs.Marc Killian: And I think most of us know that, but when we don't have a paycheck, that's when we start to get a little more touchy about it. We start to get a little bit more worried that it's going to alter our lifestyle, and how we are going to be able to, you know, use those monies and so on and so forth. So is there an amount you try to determine? Do you try to go a percentage over what somebody is already doing? Let's say, okay, we were making $5,000 a month, now that we're going to be hitting retirement, is that kind of where you use as a starting point?John Teixeira: So we really will try to take a look at what their expenses into retirement are going to be. So it's not always necessarily going to be the same as what it was. So we really try to, again, with the strategy and the plan, providing the blueprint of, "Hey, this is how much you're going to have to be spending." So we'll start there, but kind of perfect example of what we talked about earlier of people having a hard time spending when they don't have a paycheck because they're afraid, is exactly what happened these last week or so with the market sliding.John Teixeira: That type of kind of market slide creates fear of saying, "Well I don't want to spend my money." So it's important to have kind of the ability to have the strategy, to make sure if something like this does happen, you don't want less income, you want to keep it the same, and then also to be ready to adjust. So if there's a market pullback, it's "Hey, what do I do now?" So that's important when you're building the plan or strategy that you can manage it and adapt to whatever's happening in what environment you're in.Nick McDevitt: One of the things that we found with people that we kind of tend to have an honest conversation with them about is, you know, we figure out how much do they like to have in savings at their bank, because they feel that that money's, you know, accessible and easy to touch. And then we go through and we kind of go through an exercise and figure out what's their personal pain point, or what's going to make them comfortable. How many years of expenses sitting in cash or something close to cash is going to make them feel comfortable? And then what we've found is that when we maintain that, they feel a lot more comfortable, because overall the objective is to make sure that they don't make any rash decisions. So managing that short term money has tended to be an exercise that's made people feel more at peace with what's going on in the short term with the market.Marc Killian: Yeah. Well I mean, that makes sense. You know, so, I mean a lot of times you're going to have to find these places to be able to compensate and deal with the fact that it's going to do that. So, you know, if you're looking at having just a challenge in general of not having a paycheck anymore in retirement, it's going to come with several things, not just the loss of the check because hopefully you've got those retirement accounts that are going to create those funds for you, but really a lot of times, again, it comes down to kind of maybe the mental hurdles that we need to kind of get used to in the transition from working years to retirement years. Would you agree?John Teixeira: Yeah, I would agree with that. And I think the worst thing that as a planner, I think that we see sometimes, is where, you know, working with someone that has enough money to really enjoy their retirement and they don't do it. Especially in the first few years, because they're afraid, again, of not having a paycheck, and it's really those, you know, I hate to say it, but your first five, ten years of retirement should be the most exciting because you're able to do more-Marc Killian: Right. Sure, yeah.John Teixeira: ... as far health goes. So you don't want to waste the first five years just looking at your balance and saying, you know, "Can I spend this or not?" You really want to be comfortable with doing that, which you know, Nick just mentioned there. We really like to get people's kind of comfort point as far as how much, you know, how much do you like to have in the bank and as long as they feel comfortable, they make better decisions, and ultimately, you know, you're doing all this to enjoy retirement and really, you know, have your wish list and start checking those things off.Marc Killian: Yeah, I mean that makes a lot of sense because you do want to get out and what do they call that? The go go phase of retirement. When you first get there, you want to be able to enjoy it.John Teixeira: [inaudible 00:09:50] Yeah.Marc Killian: Yeah, and not look at the market, you know, not tune into these TV shows like as we mentioned at the top of the podcast, and get ourselves all worked up because they're going to lead with, you know, doom and gloom anyway, right? So they're going to make everything sound, you know, just terrible. And so if you're sitting there stressing over that or watching of that, certainly no way that you want to enjoy your retirement. So having a good plan in place, will certainly lead towards that. Well, what I think we'll do is next week on the podcast we'll talk about some strategies to create a paycheck, since we are talking about no longer having a paycheck anymore on this week's show.Marc Killian: And so I think with that, I think that's pretty good thing. We'll wrap this up this week on the podcast. We hope that you got some useful information from it. If you've got a question or concern, again, always reach out, don't hesitate. Give them a call at 813-286-7776. That's 813-286-7776. Call John and Nick at PFG Private Wealth. They are an independent RIA. They are financial advisors here in the Tampa Bay area. And don't forget to go to the website, pfgprivatewealth.com, subscribe to the podcast, listen to it on whatever platform of choice it is that you like, whether it's Google, Apple, iHeart, so on and so forth, whatever, Stitcher, whatever different platform you like. So reach out to them at pfgprivatewealth.com that way. And for John, for Nick, I'm Marc, we'll talk to you next time here on Retirement Planning Redefined.