Reconfigurement
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Can anyone really afford to retire anymore?
With the rising cost of living, the shrinking or shifting job market, and the lasting effects of Covid and other pandemics to come - most Americans are finding retirement is becoming a fleeting dream they may never realize. Every 4 out of 10 middle-class Americans are
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Reconfigurement - E. Alan Fleischauer
SECOND EDITION, FEBRUARY 2023
Copyright 2023 by E. Alan Fleischauer
All rights reserved.
Reconfigurement
E. Alan Fleischauer
Dedication
I would like to dedicate this book to my clients, who have offered up wonderful questions and support that have enhanced this book immeasurably. Additionally, I’d like to dedicate it to the American College of Financial Services for providing me with a wonderful education about the many topics in the finance industry.
Acknowledgements
First of all, I would like to thank you, the reader, for taking the time to slog through this book. I admit some of the topics may seem a bit dull, but on the other hand, I endeavored to keep things short and sweet—and even a little bit funny.
I would like to give immeasurable credit to one of the finest finance schools in the United States, the American College of Financial Services. At one point in my financial services career, I was at a crossroads. I had an offer from a prestigious bank to work only with very high-net individuals. It was tempting, and I enlisted a great friend and a brilliant consultant, Tim Murray, to help me decide between staying with my creation, Fleischauer Financial Management, or moving to the bank.
Tim’s questions were insightful and to the point, and by the time we’d finished I had decided to stay with my creation and go back to school to get appropriate designations. After much research, I chose the American College of Financial Services, and I’m glad I did. It is a wonderful institution. It was founded in 1927 by Solomon S. Huebner, and in 1928 the school graduated 28 students from its first program, for chartered life underwriter. I’m delighted to say that I’ve received the same distinction, in addition to being a certified financial planner, chartered financial consultant, retirement income professional, and estate planner. I followed this program with a Master of Science in financial planning, with a focus on retirement planning.
It took me nearly five years to complete these programs, and it was worth every moment. I could not have even attempted writing Reconfigurement without all of this education. So, as you read the book, you will see references to the American College of Financial Services on a wide variety of subjects. Thank you to all my instructors as well as the college.
I’d like to thank my writing coach, Elizabeth Ann Atkins of Two Sisters Publishing. She kept me on track and added numerous ideas and suggestions that were invaluable. Additionally, I tip my cap to my editor, Melanie Martin, who supports the owner, Michael Price, at Edit24-7 (edit247.com). If you’re an aspiring writer, give them a try—their turnaround is incredible.
Also, I’d like to extend heartfelt thanks to my friend, publisher, and Amazon warrior, Ken Schubert. I would be lost without him. A big thank you as well to my graphic arts designer, Elena Karoumpali, who has done all my covers for years. She is the very best, and she can be found at 99designs (99designs.com). Thanks also to Melinda Nelson, who found the perfect picture for the cover. And finally, to the love of my life, my wife Paula, for her insight, her accurate spelling, and her support.
Table of Contents
Chapter One
Chapter Two
Chapter Three
Chapter Four
Chapter Five
Chapter Six
Chapter Seven
Chapter Eight
Chapter Nine
Chapter Ten
Chapter Eleven
Chapter Twelve
Chapter Thirteen
Conclusion
Chapter One
What’s the Plan?
There’s a looming chasm that potentially threatens the future of millions of Americans. And, at the core of this chasm, I believe, is a profound disconnect between reality and tradition.
The reality, as we all know, is that Americans are living longer. In the last decade alone, 30 years have been added to the average American lifespan. We can’t pick up a newspaper—yes, baby boomers still do that!—or go online (hey, we’re not dead!) without being reminded of this fact. From vitamins to Botox to hip replacements, we’re constantly being pitched the latest and greatest approach on how to go about this business of living longer. We’re told we can reinvent ourselves, reimagine life, or repack our bags. Magazine articles tell us how to plan ahead, and, more often than not, try to sell us a product. We are told that 50 is the new 30 and 60 is the new 40. Really? When did that happen? And how come my 64-year-old body reminds me daily that 64 feels like 65?
I guess I didn’t get the memo.
Not that these theories are unimportant or unhelpful. They provide insight into the future, give us hope that there’s a better way, and offer stellar examples of what others have done to meet the aging challenge. It’s good stuff. But in my view, it often falls short.
I’ve been a financial advisor for more than 20 years. Today, I find the financial industry is content to encourage us to work hard, save hard and invest as much as we can. Which is all good, but only to a point.
I created this program to address the chasm between reality and tradition, and to provide what I believe is a missing piece of the equation—planning ahead for retirement. As a financial advisor, a big part of my practice is helping people plan for retirement, so I’m always reading books about retirement. Some are very good, some not so much. I’ve found that most address either the right brain or the left brain, but not both. I read many books that address the right brain with compelling stories of retirees who overcame obstacles to get to where they are today. I read other books that focus on the left brain with heavy emphasis on pre-planning for retirement and plenty of numbers. But I found very few that combined both the right brain and the left brain to create a real solution.
Based on my findings, I created the concept of Reconfigurement financial planning to examine both sides of the equation. In a nutshell, Reconfigurement© financial planning is about reconfiguring your life at any stage and planning ahead. I repeat, planning ahead! How many of you have ever quit a job without planning ahead? Even though 70 percent—yes, 70 percent!—of Americans don’t like the job they have, that’s no excuse for quitting abruptly. Reconfigurement financial planning discourages that in favor of planning ahead!
But while Reconfigurement planning is about planning ahead, it’s more than that. I believe my industry—the American financial services industry—needs to rethink the traditional approach to retirement. At the risk of oversimplification, I believe the traditional, numbers-oriented
plan that has long-been used to address one’s ability to retire must be actively and thoughtfully combined with employment and other strategies to fit the new realities.
We need new retirement strategies that extend far beyond the traditional investment asset-focused financial plan. To truly meet the reality of aging Americans, I believe retirement strategies need to include a plan of action that actively incorporates pre-retirement and post-retirement activities. Activities that, by necessity, include gainful employment well beyond the age of 65.
In my world, retirement planning has focused on accumulation and prudent management of assets so that consumers can stop working, ideally at 65. What’s your number?
is a common theme in the financial industry. Unfortunately, it’s an industry-serving concept that pushes people to work as hard as they can while saving as much as possible and subsequently spending as little as necessary, hopefully enabling the individual to live as long as nature allows. As a result, there’s little impetus for the financial services industry to consider the concept of structuring a life that allows for earning less in the short term but earning more over time, encouraging consumers to continue to be gainfully (and happily) employed well past the traditional retirement age of 65.
I’m of the opinion that questions need to be answered, research needs to be done and pathways need to be developed. I think Reconfigurement is a start. Here are some of the questions, strategies, and possibilities that you’ll find in this book.
How powerful is the combination of making less money for a longer period of time and as a result, relieving the burden of funding total expenditures for an extended period of time?
How does this approach best utilize Social Security, tax reduction, investment, and spending strategies?
What income protections (and at what cost) need to be in place?
And that’s just the tip of the iceberg. Furthermore, given these answers, how do you go about incorporating them into your Reconfigured life? When do you start, how do you plan, and what are your goals?
With the financial services industry content to encourage us to work, save and invest, I believe experienced, innovative financial advisors and other practitioners need to break with the traditional approach and spearhead the research necessary to answer these and many other numbers-related questions. Whether you need to continue working later in life for financial reasons or personal challenge and satisfaction, there’s a real need for an approach that provides relevant resources early enough in your life to make a difference.
A 40-year-old or a 50-year-old is in a much better position to reconfigure their life and plan for a second career than a 60-year-old, a 70-year-old, or an 80-year-old. But I believe Reconfigurement is possible at any age, especially given the wisdom that comes with age. But regardless of age, the questions can be daunting—and exciting.
What would you love to do?
What are you really good at?
Can you make enough money doing it?
How much money is enough?
How do you transition into your new career?
How long will it take?
Clearly, these are difficult, complex questions. Combined with a lack of direction and support from most traditional retirement planners, there’s little hope for the vast majority of Americans to tackle the new reality head-on in time to make a significant difference to their lives. And that’s why I believe traditional planning needs to change. But if the industry isn’t going to change, then we need to step up. We need to meet the new reality head-on. We need to provide tools and advice that meld left-brain and right-brain thinking. Along the way, we need to educate, counsel and lead. And we’ll ask our clients and ourselves questions, questions, and more questions, until we get it right.
Reconfigurement is a result of spending a winter on my exercycle studying online for the Retirement Income Certified Professional (RICP®) designation. My staff calls it the Rice Crispy designation but I call it my epiphany designation because it was both an educational and an eye-opening experience for me.