Worry Free Investing in Retirement Ep. 109 Artwork

Excel in Retirement

Where financial planning becomes understandable. David brings interesting stories each week to listeners of his Excel in Retirement show along with actionable ideas that may help listeners avoid pitfalls that many people face in their retirement. David C. Treece began his career in the financial services industry in 2011. He is an independent financial adviser. He has passed the Series 65 securities exam, and he is health and life insurance licensed in several states. David’s financial advisory firm focuses on retirement income planning.David worked for two other financial advisors before founding his firm in 2018. David launched Clients Excel because he has a desire for his clients to have a second to none experience when it comes to their financial planning for retirement. David relentlessly strives to be the best at helping people prepare for retirement.The bedrock of David’s ethos is treating others as he would want to be treated.David works tirelessly to continually bring pertinent content to our clients and friends through our weekly newsletter and podcast. Through these, David brings informative content that may aid you in preparing for retirement. Through his financial planning work, David’s hope is that his clients are empowered to have a confident financial future.David and his wife, Mallory, have a daughter named Amelia and rescue dog named Oscar. They also have a backyard flock of chickens that Amelia loves to tend. David and his family are active in their church in Spartanburg. He is also a volunteer mentor with JumpStart, which is a ministry for people who have been recently released from prison.

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Excel in Retirement

Worry Free Investing in Retirement Ep. 109

July 27, 2022 • David C. Treece • Episode 109

Wall Street has done a great job of marketing us. So much so that they have convinced us that we should sell our Amazon stock to pay our cable bill. Warren Buffett once said, “If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes.” We take his advice to heart. We can’t be invested in the market for ten years if we are using that same bucket of money to create income. So, what do we do?

This brings us to our last point which is our “income bucket.” The worst year for the stock market in the last hundred years was a loss of over 43%. That’s an impactful loss for the portfolio. We can’t control what the markets are doing so we separate out our income bucket from our growth bucket.

The liquid bucket and income bucket are designed to meet our lifestyle needs in retirement. We use the income bucket to cover all of our income needs for ten years. We want this money to be some place that’s protected. No, we don’t want it buried in the backyard losing purchasing power.

We want it to have some growth. Historically, we could use several asset classes to find something that provides interest or dividends. We’re looking for something that will earn four to six percent on average. This enables us to leave our growth bucket alone for ten years like Buffett suggests and capture the returns of the market.

Does this philosophy resonate with you?

Our approach enables us to tell our clients, like I tell Amelia about school, that we don’t have to be nervous about market volatility. When the difficult times come in the market hopefully you’ll remember the team at Clients Excel set your portfolio up with ten years of income. This gives the market time to recover from any potential losses it may face. We do this because our goal is for it to enable you to be worry free in retirement.

Don’t fall into the trap of being completely in equities or pulled out of the market completely. If we’re all in equities, we are suffering this year. And if we are trying to time the market by selling and buying back in at the right time we’ll likely be disappointed.

Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Investing involves risk, including potential loss of principal. Any references to protection, safety, or lifetime income, generally refer to fixed insurance products, never securities or investments. Insurance guarantees are backed by the financial strength and claims paying abilities of the insuring carrier. This podcast is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet particular needs of an individual’s situation. Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and/or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program.

SPEAKER_01: 0:00

Welcome to the Excel in Retirement Show, where financial planning becomes understandable. Your host, David C. Treece, is a licensed financial advisor who specializes in retirement income planning. David's desire for each of his clients is to have financial confidence, protection, and growth. We believe this is achievable with the right plan in place. Together, we'll build a plan specific to your financial goals. We work with clients from all over, and we'd love to connect with you. Go to clientsexcel.com to connect with us. If you'd like to speak with us, call our office at 864-641-7900 Thanks for listening. Now to the show.

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Welcome back to episode 109 of the Excel in Retirement Show 109. We are plugging right away. Well, I have to admit, I never really enjoyed going to school. In fact, I dreaded this time of year. Here it is, the end of July. Summer still feels like it's in full swing, but going back to school was right around the corner. Maybe that's why I told my mom, I want to be a hermit So I've really tried to explain to Amelia, our rising K-4 student, all the great things about school. We've told her all about the new friends she'll make and the cool things she'll learn and who her teacher is going to be and so on and so forth. It has been a positive explanation, I will say. Do you know what her response is, though? She says, I'm nervous about school. Then we go into how... There is nothing to be nervous about, and if she just does her best, we'll be happy with her. And then we start to question how our four-year-old knows about nervousness anyway. We don't know if that's a parenting fail or what, but it's a vicious cycle because that's her common response is she's nervous. But we don't want our little girl to worry, and nobody likes worrying, and we really don't like worrying when it comes to our money matters, right? Today, I'm going to share with you how we help our clients allocate That's the name of the game for us. Let's face it, a lot of people are uneasy about the economy this year. The markets this year are out of whack, and with the Federal Reserve raising interest rates and expected to raise them again this week, there's a lot of volatility and unease going around. And you may be one of those folks that's uneasy. Don't blame yourself. Most people are doing the best they know how to do with the information they have, and the right answers aren't always easy to find. So let's talk about how to remedy some of our potential worries that you might be experiencing if you're getting ready for retirement, or maybe even if you're not in retirement quite yet. At our office, we think about retirement portfolio allocations by using three buckets. The first bucket we have is what we call our liquid bucket for our expenses. In retirement, we want our clients to have six to nine months of bill paying money in the bucket, in this liquid bucket. So whatever it takes to pay your bills for six to nine months, that's what we want to try to keep there. If the roof develops a leak or the car needs new tires, we don't want to have to liquidate part of our investing accounts to pay for it. We can go to our liquid bucket to pay for those things that come up along the way. This also helps us save on interest that's commonly incurred by using credit cards for mishaps and things that we weren't expecting. After we have our liquid bucket set up, we'll set up our growth bucket. People sometimes know already what this is. It's our portion of our money or our allocation to the stock market. This is the growth bucket and it goes up and it goes down and it goes up and it goes down but But over time, historically, it has gone up. This bucket is important because it helps us maintain our lifestyle in retirement. When we're looking for long-term growth, this is the type of bucket we're using. We're using something in the stock market that is looking for long-term growth with this allocation. The problem, though, is what happens if the stock market is down when you're needing income. If you just have a growth bucket, you've got a problem. Or worse, what happens if you didn't have enough money in your liquid bucket when the roof blew off? Then you'll have to do a fire sale on part of your positions to get the funds to pay for it. That would be the worst case scenario, and that's never good. Wall Street has done a great job of marketing to us, so much so that they have convinced us that we should sell our Amazon stock to pay our cable bill. Warren Buffett once said, if you aren't willing to own a stock for 10 years, don't even think about owning it for 10 minutes. We really take his advice to heart at our office. We can't be invested in the stock market for 10 years if we're using that same bucket of money to create income. We're having to sell it to pay our cable bill like I was saying. So what in the world do we do? This brings us to our last and third bucket which is our income bucket. The worst year for the stock market in the last 100 years was a loss of about 43%. Now that would be an impactful loss for your portfolio, wouldn't you say? We can't control what the markets are doing, so we separate out our income bucket from our growth bucket. The liquid bucket and the income bucket are designed to meet our lifestyle needs in retirement. We use this income bucket to cover all of our income needs for 10 years. We want this money to be in the same And excuse me, we want it to be in some place that's protected. like Mr. Buffett suggests, and we capture the returns of the stock market in our growth bucket. Does this make sense? Does this philosophy resonate with you? It works out a little bit better if we have some visuals to share with folks, which can be difficult to illustrate on a podcast, but I'd be happy to go over that with you one-on-one, whether that's in person or on a Zoom call. Our philosophy, though, enables our clients, and like we tell Amelia about school, that we don't have to be nervous about market volatility because the team at Clients Excel has set up our clients' portfolios with 10 years of income in mind. This gives the market plenty of time to recover from potential losses and anything that it may face. And our goal is to enable you to be worry-free in retirement. If all of our money is in equities, or worse, we pulled our money out of the market and we're trying to time when to get back in, we're not in a good spot right now. And frankly, we're never in a good spot trying to do that type of strategy because nobody can time the market. So we have to set things up where we can leave it in place and allow it to earn long-term growth. If this idea resonates with you, I would be happy to speak with you more at length, either by Zoom or by in-person, I should say. We have clients in several states. We have some clients out west, and we have some clients primarily in the southeast, in Georgia, North Carolina, and South Carolina. But we'd be happy to help you in any way we can and share our philosophy and tease us out a little bit more. You can reach our office by calling 864-644-7000. Investing

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involves risk, including potential loss of principal. Transcription by CastingWords Clients Excel is not permitted to offer and no statement made during this show shall constitute tax or legal advice. Our firm is not affiliated with or endorsed by the U.S. government or any governmental agency. The information and opinions contained herein provided by third parties have been obtained from sources believed to be reliable, but accuracy and completeness cannot be guaranteed by Clients Excel. The use of logos and or trademarks of podcast hosting sites are the property of their respective owners and are not an endorsement by those owners of our firm or our program