Retirement Reality Check: How to Spend Your Money and Still Leave an Amazing Legacy

By Josh Jalinski

HOW TO RETIRE IN A VOLATILE MARKET

Whether you have ten or thirty years until retirement, Josh Jalinski shows you how to maximize your retirement saving and spending plan, while still having something to leave behind for your family, friends, and favorite causes.

Looking at your 401k in a volatile market can lead to panic and poor financial decisions. Even if you have already made some decisions you regret, or you waited until forty-five to think about retirement, there are steps you can take today that will help you reach your financial retirement goals.

Josh Jalinski, host of the popular Financial Quarterback™ radio show, offers his SWAN (sleep-well-at-night) retirement that works for people in all stages of their careers. This proven system for secure retirement planning lets you enjoy your money, and teaches you:

• To challenge fifty years of conventional retirement planning with fresh strategies tailored to today’s volatile economic climate.
• Tax-saving strategies that maximize the amount of money you have available to spend on experiences, travel, and expenses.
• Understanding how to identify the right investment portfolio mix for your individual circumstances.
• How saving cash and different life insurance options help you weather volatility and ensure you can pass wealth on to family members.

The truth is, a 401(k) is not enough for most retirees. Its time create a new paradigm, one that will stand up against market volatility and be there when it’s time to enjoy the years you worked to earn.

• Language: English
• Publisher: Open Road Integrated Media
• Release date: Jul 30, 2019
• ISBN: 9781400212156

Josh Jalinski

Josh Jalinski hosts the popular Financial Quarterback radio show, which attracts approximately 112,000 listeners every week, and is the CEO of Jalinski Advisory Group. He has been a Five Star Wealth Manager five years in a row and was named Advisor of the Year by Senior Market Advisor magazine. Jalinski is committed to helping clients of all income levels maximize wealth and create a realistic financial plan for present and future security.

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DISCLAIMER

This book is designed to provide readers with a general overview of financial markets and how they work. While the method of investment described in this book is believed to be effective, there is no guarantee that the method will be profitable in specific applications or not result in financial loss, given the risks involved in investing of almost any kind. It is very important to do your own analysis before making any investment based upon your own personal circumstances. This book is not designed to be a definitive investment guide or to take the place of advice from a qualified financial planner, legal advisor, or other professional. Laws and practices often vary from state to state, and if legal or other expert assistance is required, the services of a professional should be sought. While the author has made every attempt to ensure that the information contained in this book has been obtained from reliable sources, neither the publisher nor the author is responsible for any errors or omissions, or for the results obtained from the use of this information. Thus, the publisher and the author specifically disclaim any and all liability of any kind for any losses that may be sustained by the use of, or applying the methods described in, this book.

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product, including the investments and/or investment strategies recommended or undertaken by Wealth Quarterback, LLC (WQL), or any noninvestment related content made reference to directly or indirectly in this book will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this book serves as the receipt of, or as a substitute for, personalized investment advice from WQL. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. WQL is neither a law firm nor a certified public accounting firm, and no portion of this book should be construed as legal or accounting advice. A copy of the WQL’s current written disclosure brochure discussing our advisory services and fees is available upon request.

Securities offered through American Portfolios Financial Services, Inc., Member FINRA/SIPC. Advisory services through Wealth Quarterback, LLC (WQ). Insurance services offered through Jalinski Advisory Group, Inc., APFS, and WQ are unaffiliated entities.

While great efforts have been taken to provide accurate and current information regarding the covered material, neither Jalinski Advisory Group, Inc.; Wealth Quarterback, LLC; Financial Quarterback Books, LLC; nor American Portfolios, Inc., is responsible for any errors or omissions, or for the results obtained from the use of this information.

The name of the book is a concept and does not guarantee or imply that changes will be made to your wealth. The act of purchasing any book, course, or financial product holds no such guarantees.

The ideas, suggestions, general principles, and conclusions presented here are subject to local, state, and federal laws and regulations and revisions of same and are intended for informational purposes only. All information in this report is provided as is, with no guarantee of completeness, accuracy, or timeliness regarding the results obtained from the use of this information. And without warranty of any kind, express or implied, including, but not limited to, warranties of performance, merchantability, and fitness for a particular purpose. Your use of this information is at your own risk.

You assume full responsibility and risk of loss resulting from the use of this information.

The stories in this book are for entertainment and not to be construed as a testimonial in any way.

© 2019 Josh Jalinski

All rights reserved. No portion of this book may be reproduced, stored in a retrieval system, or transmitted in any form or by any means—electronic, mechanical, photocopy, recording, scanning, or other—except for brief quotations in critical reviews or articles, without the prior written permission of the publisher.

Published by HarperCollins Leadership,

an imprint of HarperCollins Focus LLC.

Book design by Maria Fernandez, Neuwirth & Associates.

ISBN 978-1-4002-1215-6 (eBook)

ISBN 978-1-4002-1214-9 (TP)

Epub Edition June 2019 9781400212156

Library of Congress Cataloguing-in-Publication Data

Library of Congress Control Number: 2019931172

Printed in the United States of America

19 20 21 22 LSC 10 9 8 7 6 5 4 3 2 1

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CONTENTS

Foreword by John Mauldin

PART I—START YOUR RETIREMENT REALITY CHECK

Reality Check One: Quit Worrying About Your Money

Reality Check Two: Mitigate the Onslaught of Income Taxes

Reality Check Three: Buy Term Life Insurance and Invest the Difference

Reality Check Four: Annuities Aren’t the Devil

Reality Check Five: Monte Carlo Is for Gambling, Not Money Management

PART II—SAVE IT!

Reality Check Six: Start Saving

Reality Check Seven: Don’t Lose Money in the Next Stock Market Crash

Reality Check Eight: How to Generate 10 Checks in Retirement

Reality Check Nine: Bonds Are a Recipe for Disaster

Reality Check Ten: Forget Dollar Cost Averaging

PART III—SPEND ’TIL THE END

Reality Check Eleven: Diversification Is Di-Worsification

Reality Check Twelve: Retire in the Zero Tax Bracket

Reality Check Thirteen: Conservative Withdrawal Stategies

PART IV—LEAVE IT!

Reality Check Fourteen: Protect Your Money

Reality Check Fifteen: Estate Planning: What is That?

Conclusion: Winning the Game

Acknowledgments

Notes

Index

FOREWORD

The Retirement Reality Check is an in-your-face, practical guide to a better retirement. Josh Jalinski looks at how traditional financial planning wisdom has failed retirees and debunks conventional rules that are not setting you up to live your best financial life. Rule 12, The pie is a lie, particularly resonates with me. The average financial advisor or financial magazine may tell you to diversify, according to the Modern Portfolio Theory’s pie, among 60 percent stock and 40 percent bonds. Josh recommends you consider diversifying to trading strategies, not just asset classes. This is something I do for my investors.

Broad portfolio diversification failed in 2008. I predict that in the middle of the next decade, we will enter a similar period I call The Great Reset. This will be a reset of nearly $500 trillion in global debt and a restructuring of massively underfunded pension systems. These problems exist in almost all of the developed world, and there is a way forward, but I encourage you to advance with a plan, and this book is the perfect place to start.

RETIREMENT ISN’T HAPPENING, AND SOCIAL SECURITY ISN’T ENOUGH

I have long said I don’t want to retire, but many Americans don’t have that luxury. Some have to retire because of illness or because their work requires more physical ability than their age allows. Many others don’t retire because they just can’t afford to.

Say you want to stop working when you’re 65. You’re in good health, and your family tends toward long lives. You expect to reach 90, after having been retired for 25 years. Will Social Security alone be enough?

If you have spent most of your life paying as much as legally possible into the system, and you retire in 2019 at age 65, your monthly benefit will be $2,757, which jumps to $3,770 if you delay retirement until age 70. Considering how much you would have contributed over 50-plus working years, it’s probably not a great return, but it’s something. Yet most people get less.

A solid majority of Social Security recipients receive $2,000 a month or less, and many less than $1,000. The average benefit is $1,413, according to Social Security’s latest fact sheet. If that’s all you have, your retirement lifestyle is not going to be very comfortable.

Bottom line: Social Security probably won’t give you much security. You need more. Josh has a great plan for making sure your retirement income is significantly higher than what Social Security will deliver.

IS THAT ALL THERE IS?

Eighty percent of you reading this book have less than $100,000 in savings. That isn’t enough to survive on, much less enjoy retirement. Let’s make the very aggressive assumption that you can take 5 percent a year from your savings plan. If you have $100,000, that’s $5,000 yearly or about $417 a month—on top of your Social Security. And what happens if you don’t have your house paid off? Or your car?

Many of our parents and grandparents had pensions and other guaranteed defined retirement benefits from the corporations they worked for. Those are increasingly an endangered species in the private sector, while 401(k)s, IRAs (Individual Retirement Accounts), and Social Security aren’t giving the average person enough to retire with anything close to a comfortable lifestyle. In this essential book, Josh will show you how to create a personal pension plan.

THE INDEXING PROBLEM IN RETIREMENT ACCOUNTS

Back-of-the-napkin math (and a rough napkin at that) says your retirement accounts are at least 50 percent invested in equity index funds. Some of you are now asking: What’s the problem? All those index funds have come back. Everybody is back to where they started. And they are cheap.

Not so fast, Jack. As I have said, bear markets that are not accompanied by a recession have V-shaped recoveries. Which is exactly what we got.

Bear markets that are accompanied by recession take a very long time to recover and will likely be in the 40–50 percent loss range. A 50 percent loss requires a 100 percent gain to break even. That took about five years from the bottom of the last bear market.

When the next recession and bear market hit, it will take longer to bounce back, and the recovery will be even slower than this last one. A large amount of debt slows recoveries. Very large amounts create flat economies, and we are approaching extremely large amounts in the US.

The next recession could cause a $30 trillion debt for the US government, which will soon increase to $40 trillion. This book will arm you with strategies for dealing with the upcoming market volatility.

DOUBLE PROBLEM

I speak at various investment events every year. Lack of retirement savings is by far the most common worry I hear about at those events. Sometimes it verges on panic, even among people who spent decades earning good incomes and saving all they could.

The baby boom generation that is now reaching retirement age has a double problem. First, many didn’t save enough cash to support a comfortable retirement. Second, they could lose a great deal of their IRAs when the national debt forces our government to raise tax rates.

I believe we will experience The Great Reset over the coming decade. If you are in your 50s, 60s, or 70s, put a game plan in place that enables you to better navigate the period ahead. This is where Josh comes in. He delivers the Retirement Reality Check that will get you on the right track, whether you are 20 years or just a couple of years out from retirement.

—John Mauldin

PART I

START YOUR RETIREMENT REALITY CHECK

1

REALITY CHECK

QUIT WORRYING ABOUT YOUR MONEY. MOST RETIREMENT PLANNING ADVICE IS WRONG.

MEET KENNY

If you lose my money, I’m going to kill you.

What would possess a 58-year-old man to say that to me? Kenny is six foot five with the build of a lumberjack. His grip nearly crushes the person on the other side of a handshake—in this instance, that was me. I was scared.

When I first met him, Kenny hated financial advisors. His first two advisors had shipwrecked his life savings.

Kenny was so mad at his previous financial advisors that he vowed never to speak to one again. He woke up in the middle of the night in cold sweats from worrying about his future. For Kenny, retirement didn’t beckon; it loomed.

Sound familiar? Millions of people like Kenny, and probably you, have either been failed by the conventional approaches to financial planning or have been too confused or scared to even get involved with them.

You’re not to blame, but much of conventional financial planning wisdom is flawed.

Most of what is sold as sound financial advice is either outdated or marketed as a one-size-fits-all package. It often doesn’t work for people with out-of-the-ordinary circumstances or preferences.

A lot of people I see have dabbled in financial products they’ve seen advertised on TV or the web or heard about in books by financial gurus. These products—and yes, they’re very much products, like a washing machine or a new car—range from stocks and funds to annuities to long-term-care insurance to whole life insurance to bond ladders, and more. They’re all legitimate and can be used in constructing your financial plan.

But . . .

Any financial product is a tool. It can be used for either good or ill, depending on the financial plan. As I will say over and over—it’s the most important thing you should take away from this book—get a plan before you get any product. Plan and process should precede product.

A LEGACY

This book is dedicated to my parents, Bill and Marilyn, who loved Jesus, their family, and Mickey Mouse. They left me a godly legacy of love and selfless service to others. They devoted their lives to helping others struggling with addiction and both recently passed away within six months of each other. They didn’t want to worry about their money but had to due to their many disabilities. They did what normal people were supposed to do—cancel their insurance policies and buy index funds. If they would have followed some of the strategies in this book, they wouldn’t have needed me to give them a job. The reason I wrote this book is because the vast majority of Middle America is misinformed, as my parents were, about money management and protective strategies for their money.

Kenny, like my parents, made bad decisions in part due to a legacy of many decades of rigid, poorly explained advice from countless personal-finance websites, newspapers, and magazines. This information only got more rigid and more poorly explained as computers took over from economists scribbling formulas on chalkboards. Poor advice also abounded with the exponential growth of financial cable networks and the financial celebrities they helped make famous.

Many of these people mean well, but those who book guests for these shows or author these stories are usually former English majors hired for their ability to craft a compelling financial piece. Or they are social media mavens who know