Well, hello. Thank you for joining us for another edition of the Providence Financial Retirement Show. I’m your host, Anthony Saccaro. We are your retirement income source, and this is the place where retirees come for income. We’ve got a great show for you today because we’re gonna answer the question: Are you really ready for retirement?
Now, when I ask that question, where did your mind jump? Well, I’ve gotta tell you that there’s two components of retirement. There certainly is the financial component, but then there is also the mental component of retirement as well, and I’m gonna guess that your mind jumped to the financial component.
Most people who I talk to about retirement, they don’t really consider the emotional aspect of it. They really look more at the monetary aspect of retirement, and that’s very important, but it’s only one component. So we’re gonna spend some time talking about both of these components, and we’re really gonna focus on the mindset of retirement as we go through our show today.

Plus, as always, we’re gonna answer your listener questions as well. So you’re gonna wanna stay tuned because we’ve got some really good questions. And just so you’re not clueless as to what we are gonna talk about, we’re gonna touch on income, we’re gonna talk about inflation, we’re gonna dip into taxes, have a question about annuities.
We’re gonna talk about longevity risk and sequence of returns, and a few other things as well, too. But that’s where we’re going in today’s show. Let’s go ahead and jump right in, though, and talk about retirement in general. As I mentioned a minute ago, retirement is not just about the money. It’s about a mindset.

You have to be emotionally capable of handling retirement as well. For some of you, this is not gonna be a big deal at all, gonna be easy-peasy, but for others of you, it’s gonna be a very big transition, a big mental transition, and you wanna make sure that you’re ready for it. Let me share with you the story of a new client that we just took on at Providence Financial, because I think her story is very appropriate for what we’re talking about here.
She is 56 years old, just became a client, and when I started speaking with her, she basically said, “There’s no way I’m gonna be able to retire until I’m 70 years old.” That’s 14 years away, and yet when you look at the money, she’s got somewhere around $1.2 million. She’s saving a ton of money each year. She still has 14 years to go, and yet when I did the analysis, I’ve come up to the conclusion that she could really retire at around 65 or 66 if she wants to.
And she said that from a monetary standpoint she wants to, but from an emotional standpoint, she just doesn’t know if she can handle it. Retirement to her is a very scary thing. Losing the steady component of work, losing that steady income, that’s just very scary. Now, she is only 56 years old, and I’ve seen that a lot, where people come to us at Providence in their mid-50s, and then by the time they get into their mid-60s, their mindset has shifted, and they are ready to retire.
So I’m kind of hoping that’s the same thing that happens with her as well, but I’ve also seen that mental component force someone to keep working longer than they really want to. So it’s not just about the money, but it’s also about the mental component of retiring as well. You have to be mentally prepared to retire, too.
When it comes to the monetary part, though, you do have to have enough income to retire, and it doesn’t really matter what your portfolio size is, other than to the extent that it can give you income. But many of you are thinking about retirement from a monetary standpoint in terms of a certain dollar amount that you have to have.
One million dollars is a common number. You have to have at least one million dollars to retire, or at least so you think. Another thought process that some of you might have that I’ve heard a lot is that you need at least 80% of your income to retire, and that’s really not true either. Retirement is all about income.
It’s not about the amount of money that you have in your portfolio, other than to the extent that it can provide you with the income that you need. Even if you are thinking about retirement though, in terms of income, it’s easy to forget or believe that the amount of income you think you’re going to need in retirement is really the amount of income that you’re actually gonna need.

I’ve worked with retirees now for over a quarter of a century, and oftentimes they forget about things like healthcare and inflation and longevity, and even what I refer to as sequence of returns, which we’re gonna talk about a little bit later. But retirement is often more expensive than non-retirement because in retirement you’re gonna go do the things that you always wanted to do because now you’re gonna have the time to do them.
And it’s easy to think that you’re gonna be okay based on a certain amount of income, when in reality, retirement might show you that you actually need more income than you’re thinking. If you’re among the crowd who is actually wondering how much you actually need to retire, well, I’ve got a resource that you’re gonna want to get in your hands, and that is a commission report that we’ve put together for you.

And the report is called How Much Do You Need to Retire? And I’m willing to email this report to you absolutely free of charge, and when you get it, there’s a checklist. It’s gonna run through some ideas and things that you need to think about so that you can come up with an actual amount that you need to retire based on fact, not based on fiction.
I just wanna make sure that you don’t miss anything. And when you get this report and read it, you’re gonna be able to check yourself against your plan that you currently have and see if you’ve missed anything. If you’d like to get this report, How Much Do You Need to Retire?, and learn the answer to that question, all you need to do is go to providencefinancialradio.com/report.

Once again, it’s providencefinancialradio.com/report, and shortly it’s gonna show up in your inbox and you’ll be able to read it. One more time, to get your free commission report answering the question, how much do you need to retire? Just go to providencefinancialradio.com/report, and shortly you’ll be able to read the report so that you can test yourself and test your plan to see if you’ve actually missed anything or not.

But I’m gonna look forward to sending it to you, and I know you’re gonna enjoy reading it. I’m Anthony Saccaro. You’re locked into the Providence Financial Retirement Show, and we’re answering the question, are you really ready for retirement? And that’s not just from a financial standpoint, but it’s also from an emotional standpoint.
Are you both financially and emotionally ready for retirement as well? If you’re a regular listener of the show, though, you know that here at Providence Financial, we focus on income. Why? Because my definition of a successful retirement is as much income as you need until the day you die. It has nothing to do with portfolio size.
It has everything to do with income, because it’s the income that’s gonna determine the success or the lack of success of your retirement. A successful retirement is going to be to have a plan in place that’s gonna give you as much income as you need. The challenge is that most financial advisors focus on stocks or mutual funds, which are growth-related assets, and those investments are fantastic when you’re growing up in this world, when you’re headed towards retirement.
The challenge, though, is that when you get to retirement, in order to get the cash that you need to sustain your lifestyle in retirement, you have to start spending down those assets. And that’s a term that I’ve just never really been fond of, spending down. Well, why do you have to spend down your portfolio?
Well, because if you’re working with an accumulation-focused advisor, like probably ninety percent of all advisors out there, that’s the only way you’re gonna be able to get cash out of your portfolio. You’re gonna have to sell principal to get the cash that you need because investments that are designed for accumulation are not designed for de-accumulation.
They’re not designed to give you cash flow. If you want cash, you have to sell principal. The problem with that approach is if you sell principal and you keep selling principal to get the cash you need, you’re in a race against time. You’re hoping that you die before your principal does, and that’s gonna have a huge impact on the mindset, the emotional component of retirement, because you can’t have the peace of mind and the stress-free retirement that you deserve if you know that there’s a deadline for you to die.

Having a portfolio that’s going to give you a steady stream of income without having to spend down your principal, that’s gonna give you that mindset that you need. It’s gonna help you reduce stress. It’s gonna reduce uncertainty, and the temptation to time the markets is gonna go away because you don’t have to time the market.
You’re getting income from your portfolio that if you do it right, you’ll never outlive. And that’s why focusing on income when you’re retired is so important. Having a portfolio that won’t give you any income is kind of like having a nice, big, beautiful house, but without any running water. What good is it?
You can’t live there because it’s not usable. It doesn’t matter what the value of the home is. If there’s no running water there, you’re just not gonna be able to live there. Imagine with me for a second that you inherited a $1 million lot, and part of the agreement of your inheritance is that you couldn’t sell it.
Well, if you can’t sell it, and you can’t rent it out, what good is that lot gonna do for you in retirement? Well, the answer is none. It’s not gonna do any good for you at all because it’s not producing any income. Yeah, you’ll be able to leave more to your heirs, and if that’s your goal is to leave as much to your heirs as possible, you’ll be able to leave them this vacant lot.

But for you and your retirement, it doesn’t matter the value of the lot that it’s $1 million, or whether it’s even $10 million or $100 million. It doesn’t matter if it doesn’t produce you income. It’s not gonna help you in retirement. A successful retirement is as much income as you need till the day you die.
It has nothing to do with portfolio value. As a matter of fact, getting income from your portfolio is such an important component of your successful retirement that in my new book, More Life Than Money, I wrote an entire chapter about how to get income from your portfolio and protect your principal at the same time.
And if that’s something you’re wondering how to do, maybe you’ve listened to the Providence Financial Retirement Show for a lengthy period of time, or maybe this is the first time, but you know you need to get income from your portfolio, well, I know that you’re gonna love reading this chapter. I’ll send a brand-new copy of my new book, More Life Than Money, right out to you.

No cost, no obligation. I won’t even charge you shipping And if you’d like to read More Life Than Money, all you need to do is request it, and you can do that by going to providencefinancialradio.com/book. Once again, it’s providencefinancialradio.com/book, and within a few days, a FedEx truck will show up at your house with a brand-new hardcover copy of my new book, More Life Than Money.
To claim your free copy now, go to providencefinancialradio.com/book and we’ll get it right out. But you’re gonna enjoy not only learning how you can get more income from your portfolio, but you’ll also learn about some of the other more common mistakes that a lot of you are probably making that you’re not even aware of.
Just go to providencefinancialradio.com/book and claim your copy of More Life Than Money absolutely free. Thank you for tuning in today to the Providence Financial Retirement Show. My name is Anthony Saccaro, and we’re answering the question, Are you really ready for retirement? And when I ask that question, a lot of you are probably thinking about the financial component.
Do you have enough money to retire? And of course, that’s just natural, but there’s another component that I think a lot of you are probably missing. And I can say that because of the fact that I’ve been a retirement advisor for twenty-five years. And that component that you might be missing is the emotional component of retiring.
Retirement is a mindset. It’s not just all about the money. I know plenty of people who have retired, but they’re miserable in retirement because they don’t have the mindset for retirement. And as we continue to work our way through this show, we’re not only talking about the mindset, but we’re also talking about the money as well.
So we’re intertwining both of those through our conversation today. Let’s take the next few minutes then and focus on a monetary component of retirement, and that is inflation This is an area that I often find retirees miss, or really more commonly, they just underestimate. They don’t really realize how important it is to keep pace with inflation in retirement.

They think that just because they can retire now, that in 20 or 30 years they’re still gonna be fine, and yet they really haven’t adjusted for that. I met with someone recently who was an engineer, who gave me a big, beautiful spreadsheet, and everything looked good except for one thing. He completely forgot about inflation.
And engineers are generally pretty smart people, and this guy was pretty smart himself, but in his entire retirement plan, nothing about inflation at all. Now, imagine if he would’ve retired on that plan without having had a conversation with me and pointing out that deficiency. That would’ve been devastating 10 or 15 years down the road.
Think about inflation for a minute. If I ask you how much extra income you’re gonna need in 10 or 20 years just to offset inflation, what would your answer be? I’ll give you a minute just to kinda contemplate that, but think about that. How much extra income are you gonna need in 10 or 20 years to offset the impact of inflation?
Well, let me give you the numbers. If inflation is just 3%, the fact is that every dozen years you’re gonna wind up needing about 50% more income just to have the same lifestyle that you have today. Every dozen years. And that’s only if inflation is 3%. For retirees, though, inflation usually is a lot more than just the 3% average inflation rate that we have for the general populace.
Why? Because retirees like to do things that they’re gonna do pretty much no matter what. Traveling is one of those things. It’s the number one bucket list of retirees, and yet it’s an discretionary type of activity And travel companies know that people who are retired are gonna spend money regardless of what it costs.
I mean, you only live once, right? Or maybe you only retire once. That might be a better way of saying it as well. But because you’re gonna be spending money on these activities and doing the fun things you wanna do in retirement because that’s what you’ve saved your whole life to do, well, they take advantage of that, and they can charge more for these same activities.

And so inflation for these activities, like travel and hospitality, those tend to grow faster than your non-discretionary inflationary things like groceries and stuff. And I’ve often seen retirees need 50% more income in nine or 10 years as a result of this, not in 12 years, because inflation grows faster for the fun things that retirees wanna do.
That’s gonna take us to our first listener question of the day, and it comes from Shirley in Mission Viejo. And she writes in this: “Hi, Anthony. I’m 75 years old, and most of my money is in fixed income. Don’t I need some growth in my portfolio to keep up with inflation?” Well, Shirley, that’s a fantastic question, and I know a lot of you are wondering the same thing.

What the question implies, though, is that there really is no growth capability when you’re investing for income. And a lot of you probably think that, but that’s really not the case. When you’re investing for growth, you can get growth from either capital appreciation, meaning buying low and selling high like you would with a mutual fund or stock, or you can get growth from income.
When you’re focused on income investing like we teach here on The Providence Financial Retirement Show, our goal is to help you get somewhere around 5 to 6% a year of interest and dividends from your portfolio without having to sell any principal. And if inflation is only 3% a year, and that’s about what it’s hovered for the last couple of decades…
Of course, there are time periods it’s higher and time periods that’s lower, but you know, 3% a year or so is about average. And if your average inflation is 3% a year, but you’re generating 5 or 6%, you’re doubling the cost of inflation just by investing for income. Just because you’re invested for income, surely, doesn’t mean that you’re not keeping pace with inflation.

As a matter of fact, I’d argue that it’s a more secure way to keep pace with inflation, even to outperform inflation, than if you’re invested for growth, where the whims of the market could turn against you very quickly. If the idea of investing for income, though, is new to you and you wanna learn more about it, well, we put together an animated video that’s fun to watch because it is animated, and it’s only seven or eight minutes, but it’s called Investing for Income, and you’ll learn exactly how investing for income will allow you to have the peace of mind and stress-free retirement that you deserve and how you will be able to outpace inflation as well in a very steady manner.
We’ll email this video to you absolutely free of charge, and you’re gonna enjoy watching it. If you wanna get your video about investing for income, all you need to do to request it is go to providencefinancialradio.com/video. Once again, it’s providencefinancialradio.com/video. Leave us your information, your email address, and we’ll get it right out.
One more time, to claim your free animated video about investing for income and how that works, go to providencefinancialradio.com/video, and it’ll show up in your inbox shortly. You’re gonna enjoy watching it for sure I’m Anthony Saccaro. You’re listening to the Providence Financial Retirement Show, where it truly is all about the income, and we’re answering the all-important question: Are you really ready for retirement?
And we’re talking about two components of retirement: the financial component and the emotional component. We’ve already touched on why it is that many of you are gonna need more income in retirement than you think you’re gonna need, and we just talked about inflation and how it is that investing for income is really more of a steady way to outperform inflation than even investing in stocks.
I wanna shift gears, though, and start to talk about taxes, and this is a good time for another listener question because it’s right on point. And this listener question comes from George in Oxnard, and he says this: “I’m 74 years old, and I put nearly all of my savings into 401s, thinking my, my taxes would be lower in retirement.
But that hasn’t turned out to be true. How do I manage taxes now?” Well, George, thank you for taking the time to write in that question. It’s probably a good time to remind the rest of our listeners as well that if you have a question for the Providence Financial Retirement Show, just make your way over to providencefinancialradio.com.
There’s a blue button that says Ask a Question. You click on that button and type your question in. Maybe we’ll get a chance to answer it in a future episode. But I wanna take a few minutes and answer George’s question now. Again, George is 74 years old. All of his money is in 401s, and he’s now trying to figure out, how do I deal with that now that I’m 74 and my taxes aren’t lower in retirement as I thought they were going to be?
And I have to say that this is a very, very common mistake. Many of you are putting all of your money into these pre-tax retirement accounts, saving taxes now and believing, like George, that your taxes are gonna be lower in retirement. But let me remind you, I’ve been a retirement advisor for 25 years, and maybe I can count the number of clients on one hand that’s actually been true for.
Most of the times, taxes in retirement are gonna be higher than you actually are paying now. And the reason for that is simple. When you’re working, you have a lot of write-offs. You can write off your mortgage, you can write off interest, you can write off points. And hopefully, when you retire, you’re debt-free, so those write-offs go away.
From a monetary standpoint, that sounds good, and it is good. But from a tax standpoint, you don’t have the write-offs that you did when you were working, so now all of a sudden you’re gonna wind up paying more tax. Another thing to consider is Social Security. Social Security is taxed as well, just depending on the income levels that you’re at.
But most people are paying tax on Social Security, and that’s something that you have to contemplate as well. And then there is Medicare. If you make more than a certain amount, your Medicare premiums are gonna go up as well. And then there comes a point where you have to start taking required minimum distributions.
Especially George, in your case, you’re 74 years old. You’ve been taking required minimum distributions now for a few years, and there’s nothing you can do to stop that. And if all your money is in 401s, you know that the government is requiring you, through required minimum distributions, to start withdrawing from your 401, claim all those withdrawals as income, and now you gotta pay tax on those.

And when you factor in all of those things that didn’t happen while you were working, it equals higher taxes in retirement, and that’s something that I often see people fail to recognize and oftentimes overlook. George, let me address your question, though. And I wanna be ginger about it, but the reality is that when you’re 74 years old, it becomes a little bit too late You’re definitely fighting an uphill battle.
The time to plan for taxes is not once you’re already taking required minimum distributions, because those act as a major, major headwind for any tax planning that you can do. The time to start strategizing for taxes is right around 60 to 65. Somewhere in that 60 to 65 range is when you really have a lot of options.
You’re not RMD age. You can do things like Roth conversions. You can delay Social Security until 70 years old. And there’s just a lot of things that you can do between 60 and 65 years old that now cause taxes to be a minor thing when you get to your mid-70s like you are. But once you get to your mid-70s, if you haven’t done any tax planning, it’s just gonna be very difficult.

That’s not to say that there aren’t things you can’t do, but it’s not gonna be nearly as strategic or as beneficial as if you had started a long time ago. I wish I had a better answer for you, but unfortunately, that’s the case. If you’re younger than George, though, and maybe you were thinking the same way as George, that your taxes are gonna be less in retirement, and now you’ve just gotten a wake-up call that that’s probably not gonna be the case, and you wanna learn more about how to be more tax efficient and some of the tax strategies that you can use if you are in your early 60s, well, I wrote a lot about that in my new Amazon number one bestselling book, More Life Than Money.
And I’ll send you a copy free of charge so you can get the education you need so you can start doing some tax planning and avoid some of the more common mistakes that I’ve seen people make in retirement. And I’m willing to send you a copy of More Life Than Money absolutely free of charge. You just have to ask for it, and you can do that by going to providencefinancialradio.com/book.
Once again, that’s providencefinancialradio.com/book, and within a few days, a FedEx truck will show up at your home with a brand-new hardcover copy of my new book, More Life Than Money. You’ll be able to learn what you need about the common mistakes that I’ve seen retirees make over my 25-year career and how to avoid them, and you’ll also get some tax savings tips as well.
To get your free copy of More Life Than Money, just go to providencefinancialradio.com/book and give us your information. We’ll get it right out. You’ll have it in a few days. I’m Anthony Saccaro, and we’re answering the question, are you really ready for retirement, both from a financial standpoint and from an emotional standpoint?
And we have a question on annuities and whether that’s something that really should be in your retirement portfolio or whether or not it’s just a sales gimmick. We’re gonna answer that question right here on the Providence Financial Retirement Show.
I’m Anthony Saccaro. We are your retirement income source, and this is the place where retirees come for income. You’re listening to the Providence Financial Retirement Show. We’re answering the question, are you really ready for retirement? And if you were with us for the first part of this show, you know that there are two components of retirement.
Most of you think just about the financial component, but in reality, the second component, the emotional component, could actually be more important than the financial component. So throughout our show today, we’re talking about both. We’re talking about both the financial component, and we’re talking about the emotional component as well.
And that takes us to our next listener question of the day that comes from Edna in West Covina, and she says this: “Someone pitched me an annuity with a 6% income rider. Are annuities actually a good idea, or are they just a sales gimmick?” And then she throws in that she’s 69 years old and just recently retired.

Edna, thank you for taking the time to write in the question, and let me just answer it very clearly up front that it’s not a gimmick. Annuities are not a gimmick. There are a viable time when annuities make sense in a retiree’s portfolio, and we have a lot of our clients that have annuities in their portfolio.
But we also have a lot of clients that annuities just don’t make any sense for. It really depends on what you’re buying the annuity for, and there’s a lot of different kinds of annuities out there, and you need to be aware of them. The reality, though, is that there are a lot of salespeople out there who are really just trying to push an annuity.
They come off as advisors. They often put themselves out as advisors, but they’re really salespeople disguised as advisors, and that’s where you have to be careful. You have to understand what the motive is behind the individual that’s recommending this annuity. Are they a fiduciary financial advisor like we are here at Providence Financial that is using an annuity as a tool to help you get as much income as possible?
Or are they just an annuity salesperson that doesn’t make a commission if they don’t sell you one? Although annuities are not gimmicks, the reality is you have to understand whether or not you’re being sold one because the advisor wants to make a commission or whether or not it really fits into your portfolio as a proper tool to get you some type of guaranteed lifetime income.

And how do you find out? Well, I’m gonna say to you, ask them. Now, you have to be careful on how you ask. You can’t ask them, “Are you just a salesperson selling an annuity?” Because you know what the answer is gonna be there. But you have to find out, are they a fiduciary financial advisor? That would be a question I would ask.
If they say no, that’s gonna be a big red flag. And you also wanna find out what investments they’re capable of recommending. At Providence Financial, because we are fiduciary financial advisors and because our goal is to help you have the stress-free and peaceful retirement that you deserve, we have access to every investment that exists that all other fiduciary financial advisors have.
So if someone comes to us and they’re trying to get income from their portfolio and make sure that they protect their assets so they don’t have to worry about running out of life before they run out of money, if an annuity doesn’t make sense, then we have access to everything else. So when we recommend an annuity for one of our clients, it’s because it makes sense.

It’s not because that’s the only thing that we sell like a lot of financial salespeople. The answer then to your question, Edna, is not whether it’s a gimmick, because it’s not, but whether or not it’s being recommended because it’s in your best interest or because it’s in the best interest of the person who’s recommending it.
That’s where you wanna be careful. I hope that answers your question. Annuities can be very confusing, though. There are a lot of different types of annuities. There are annuities out there that you could lose your shirt on, and yet there are annuities out there too that are almost just as safe as the bank, if not just as safe as the bank.
There are some annuities out there that don’t charge you any fee at all, and there are other annuities out there that will charge you a hefty fee. So you just have to be careful, and you have to know your annuities. And because at Providence Financial we’ve been annuity experts for over a quarter of a century, in my new book, More Life Than Money, I wrote an entire chapter all about annuities.
I break them down into four different categories, and I talk about each of the four categories and which ones might make sense and which ones I tend to shy away from. If you’re thinking about getting an annuity or that’s something that you’ve heard recently or a topic on your mind, you’re gonna wanna read this chapter before making any final decision.
And you can do that by requesting our book, which I’m gonna send you absolutely free of charge. And if you’d like to get a copy of More Life Than Money, no cost, no obligation, you just have to request it, and you can do that by going to providencefinancialradio.com/book. Once again, it’s providencefinancialradio.com/book, and within a few days, a FedEx truck’s gonna show up at your home with a brand-new hardcover copy of my new book, More Life Than Money.
You’ll be able to learn everything you need to know about m- annuities, and you’ll also learn about some of the other more common mistakes I’ve seen retirees make over my career and how to avoid them. To get a free copy of More Life Than Money, one more time, just go to providencefinancialradio.com/book and we’ll get it right out to you.
I’m Anthony Saccaro. You’re locked into the Providence Financial Retirement Show. We’re answering the question: Are you ready for retirement? We’ve already touched on really some important subjects, including inflation. We’ve touched on taxes already, and now we just talked a little bit about annuities, and a lot of these are monetarily minded.
But if you’ve been with us throughout the show, you know that retirement is not just about the money, but it’s also about the emotion. So we’re gonna switch back to the emotion and talk about that for a few minutes, and we’re gonna talk about it in the concept of longevity risk Longevity risk is the very real risk that people are living longer today than they ever have before in history.

Well, I guess not counting biblical times, right? People lived hundreds of years back then. But in recent history, people are living longer than they have before, and that creates this risk that you might have to worry about outliving your money and having your money run out before you do. Retiring at sixty-five today could mean living another thirty years or more, and your plan has to last just as long as you do.
Recently, I met with someone that was in his late eighties. We were having a lot of good conversation, but he was the first person that I had met that actually had been retired longer than he had been working. And that’s gonna become more commonplace, and yet that’s something that I find that a lot of you have not really taken into consideration.
The longer you live, the more time inflation and market volatility and healthcare costs have to compound And many people think that living a long, healthy life is a blessing, and it is. But from a financial standpoint, is it really? I’m gonna suggest that what is a very positive thing from a life standpoint, living a long, healthy life, is a negative thing from a financial standpoint.

And like a lot of retirees, I’m guessing that a lot of you have probably not looked at it that way. But if you don’t account for it and you don’t prepare for it, when you get 10 or 15 or 20 or 30 years down the road, you could be in trouble. But if you haven’t looked at it that way, then 10 or 15 or 20 or 30 years down the road, you could wind up being in trouble.

And the time to figure that out is not then. The time to figure out that there could be a problem is now. I’m thinking about George’s question just a couple of segments ago, where he was 74 years old and trying to figure out how to do tax planning. And unfortunately, my answer to his question is that it’s almost just a little too late, and you don’t wanna get 30 years into retirement and realize that it’s just a little too late to start planning for not running out of money.
The time to plan is now, not later. That reminds me of someone that I just met with recently, who had about $1.8 million and was taking about $80,000 a year out of their portfolio. And when you do the math, that’s about four and a half percent. And his advisor has put in front of him a Monte Carlo report, and he showed it to me, and I think it was something like 35 pages.

It had a lot of graphs and charts, and it really looked pretty impressive. But at the end of the day, what it showed him is that he has about a 90% chance of making it to 90 years old and not having to worry about running out of money. 90% chance. That means that there’s a 10% chance that he could run out of money.
And this report assumed that he’s gonna die at 90. Well, how does he know he’s gonna die at 90? You realize that the fastest-growing age group today are the centenarians. By percentage, there are more people turning 100 years old today than there ever have been in history, and more than any other age today.
Living longer, then, is absolutely a concern. Longevity risk. This is the risk that you truly could live longer than you think you’re going to live. In the story that I just relayed, the Monte Carlo simulation showed that he had a 90% chance of making it to 90 years old and not having to worry about running out of money.
But that’s because he was spending down his assets, and that’s why investing for income is so important in retirement. Because when you focus on spending income, interest and dividends, you don’t have to worry about spending down your assets. You’re no longer in a race against time. I don’t care if you live to be 90, if you live to be 100, or if you live to be as old as Methuselah.
The reality is, if you’re living off interest and dividends, I don’t need 35 pages to tell you that you don’t have to worry about running out of money. My report is gonna be one page. As a matter of fact, it might only be one sentence. Spend your interest and dividends, and the chances of not running out of money equals 100%.
It’s just that simple I’ll take the opportunity now to remind you again that if you wanna learn more about this idea of investing for income so you don’t have to worry about running out of money before you run out of life, well, that’s why I wrote my new book. It’s called More Life Than Money, and it’s called that for a reason.
It’s an Amazon number one bestseller, and in there I talk about the most common mistakes I’ve seen retirees make that could cause them to run out of money before they run out of life. And I also spend an entire chapter, chapter five, talking about the idea of investing for income so you don’t ever have to worry about that.
I’m willing to send you More Life Than Money absolutely free of charge. You just have to ask for it, and you can do that by going to providencefinancialradio.com/book. Once again, it’s providencefinancialradio.com/book, and within a few days you’ll have a brand-new hardcover copy of my new book, More Life Than Money.
It’ll show up right on your doorstep. To claim your free copy now, just go to providencefinancialradio.com/book, and we’ll get it right out. You’re gonna enjoy reading it, and you’ll learn how to invest for income so you don’t have to worry about running out of money like so many of you are. Thank you for staying with us.

You’re listening to the Providence Financial Retirement Show, and my name is Anthony Saccaro. We are your retirement income source, and this is the place where retirees come for income, because in retirement it truly is all about the income. We’re in the middle of a great show. We’re answering the question, are you really ready for retirement?
And if you just tuned in and you haven’t heard the first part of this show, well, we’re talking about the fact that retirement is not just a financial component, but it’s also an emotional component as well. Those two components there have to match in order for you to be ready for retirement. I know plenty of retirees who have a lot of money but are miserable in retirement because there are a lot of fears and worries and concerns that they have.
So it’s not just financial, it also is emotional. And during this show, we’ve touched on both. We need to turn our attention now to sequence of returns. And some of you might know exactly what that means, but I’m gonna guess that the majority of you probably don’t. We talked about an individual that has $1.8 million, and he was looking at this Monte Carlo simulation, which was, like, a 35-page report that ultimately showed that he had a 90% chance of making it to 90 years old without ever having to worry about running out of money.

And if you’re like me, you might be thinking about the opposite of that. That means that he has a 10% chance of running out of money by the time he gets to 90. So let me ask you, is that good? I’m gonna suggest that it’s not. What percentage chance do you wanna make sure you have of having some money left when you get to 90 years old?
If you listen to the Providence Financial Retirement Show for any length of time at all, you know that I want that chance to be 100%, not 90%. Why is it, though, that this 35-page beautiful illustration showed that there’s only a 90% chance? Well, it’s because of what you can’t control. And there’s a lot of assumptions that go into a Monte Carlo report like this individual had.

You have to assume a certain rate of inflation. You have to assume that the stock market’s gonna perform at a certain rate of return each year. You have to assume a certain amount that’s gonna be spent out of the portfolio each year. And if any one of these assumptions is wrong, you might as well take the entire 35-page report and throw it in the trash can because it’s not worth anything.

The assumption in this report that we’re gonna spend a few minutes focusing on here is the sequence of return assumptions. And that is that over time, the stock market has to return or the report has to show you returns in a certain order. If the order is correct and the assumptions in the report are correct, then everything will be fine.
But if all you did was reverse the order of the returns, then the entire report blows up. And that’s what’s called sequence of returns. In short, if you get good returns at the beginning of your retirement, then the end of your retirement is likely gonna be much better than if you were to get very poor returns at the very beginning of your retirement.
It’s not just about the returns themselves, it’s about the sequence in which those returns come. Let me give you a real-life example of really how this plays out in the real world based on the real returns of the stock market. Let’s say that you retired 24 years ago in the year 2000. So here you are, brand new retired, I don’t know, let’s say you’re 60 years old.
So you’re 84 years old now, you would’ve been 60 years old in 2000, and you retired with a million dollars. And you followed the rule of 4%, and that means that you just took out $40,000 a year. You didn’t adjust for inflation, just $40,000 a year every single year. Well, do you know how much your million dollars would be worth today based on what the stock market has actually done from 2000 to 2024?
Well, the answer is you’d have about half of your portfolio. Your million dollars would’ve gone down to about $500,000. Half your portfolio would’ve been gone, and all you would’ve done, all you’ve been doing is taking out 4% a year, $40,000 a year. And the reason is because in the first few years of that time period, from 2000 to 2002, those three years, the market was negative all three years.
It was a horrible time to retire And as a result of those three bad years upfront, you’ve cannibalized half your portfolio. And keep in mind, you haven’t adjusted for inflation. If you would’ve been adjusting for inflation all these years, you’d be outta money. You would have no money at 84 years old because you’ve been cannibalizing your principal.
And of course, not adjusting for inflation over the last 24 years, that’s really ridiculous. $40,000 24 years ago is not gonna buy you anywhere near what it’s gonna buy you today. You’d probably need 80 or $100,000 today to have the same buying power that you did 24 years ago. But what if you reversed that sequence?
What if you just take and flipped all the returns that the S&P 500 has done over the last 24 years, and all you did was just reverse them? Well, then you’d be okay. You would have about $1.8 million. Why? Because all you did was flip the r- sequence of returns. That’s why sequence of returns is such an important concept that most of you have not really ever considered.

What if you were invested for income, though? Let’s say that you were invested in something that was gonna give you a 6% dividend or interest every single year, and all you did was take out $40,000 a year. Same example we used before, but now we’re focused on investing for income. Well, at the end of 24 years, you would have almost $1.5 million, almost $1.5 million.
And it doesn’t matter what the sequence is because it’s not dependent on what the stock market does. It doesn’t matter who the president is or what wars are going on. You would’ve had about $1.5 million if you were earning 6% of dividends and interest and only spending 4%. And that’s why on the Providence Financial Retirement Show, we focus on investing for income.
Because you can
count on income, but you can’t count on growth And that’s why my new book, More Life Than Money, is all about how to get income from your portfolio so you don’t ever have to worry about running out of money. And I’d love to send you a copy of More Life Than Money absolutely free of charge.
You just have to ask for it, and you can do that by going to providencefinancialradio.com/book. Once again, it’s providencefinancialradio.com/book, and we’ll get a brand-new copy out to you right away. You’ll have it on your doorstep within just a few days. To claim your free copy of More Life Than Money, go to providencefinancialradio.com/book, and we’ll get it right out.

Thank you for joining us today wherever you might be. If you just tuned in, I’m Anthony Saccaro. You’re listening to the Providence Financial Retirement Show, and we’re really answering the question: Are you really ready for retirement? We’ve already talked about the fact that there’s a monetary component of that answer, and there’s also the emotional component.
You might have the money that says you can retire, but emotionally, retirement might be eating you up. If you’re like a lot of people that I counsel with, you might even be just downright afraid to retire. It’s very scary when you think about the fact that you’ve been working for 40 or 50 years and putting money in your portfolio and never taking anything out, and now all of a sudden you’re gonna lose that income?
And now you’re gonna start taking income from your portfolio? That’s just a completely different concept. And to some of you, if you’re doing it wrong, you may very well find yourself worried about that, worried about running out of life before you run out of money. And the whole purpose of the Providence Financial Retirement Show is to make sure that you can live the retirement with the confidence and clarity and the peace of mind and the stress-free retirement that you deserve.

And after 25 years of being a retirement advisor, I truly believe that you can only do that if you have income in your retirement that you know you can count on. If you’re withdrawing money from your portfolio and you’re spending down your principal, and you’re in a race against time hoping that you die before your money runs out, well, how’s your stress level gonna be?

I mean, it’s gonna be high. You can’t possibly live a stress-free retirement if you’re in a race against time, can you? If you’re among the minority and you just have more money than you know what to do with, I guess you can. But if you’re among the majority of people that wanna get 3 or 4 or 5% a year out of their portfolio and have to adjust for inflation and meet unexpected medical expenses and so on along the way, then you really should be focused on income because it’s income that’s gonna determine the success of your retirement.
That’s exactly why here on The Providence Financial Retirement Show, we focus on income. There’s two other things, though, that I have to touch on as we head towards the close of our show. And the first thing that you have to consider as well is, what do you want your retirement to look like? And I don’t want you to cut yourself short, because if you’re gonna be selling assets and selling principal to get the income you need, then the retirement that you wanna look like is gonna be based on that.

And yet if you’re invested for income, from my experience, I can tell you that your retirement can really be a whole lot better than you’re thinking if you’re invested for income and not for growth. But if you don’t know what you want your retirement to look like, well, it’s not a good place to be. You have to have a plan and then a strategy to get you there.
The second thing to consider is that retirement is not a sprint. Retirement is like a cross-country run. You’re not gonna start off at a fast pace because you’re gonna burn out. You have to start off slow. You have to be able to maintain your speed. You have to be able to adjust for inflation and know that you’re in it for the long run, not the short run.
And in order to do that, you have to have the right expectations. You wouldn’t expect that when you buy a stock that you’re gonna double your portfolio or stock value in three months. And you also wouldn’t expect if you buy a home that you’re gonna double the value of that home in a year. And it’s no different with investing for income.
But I do often find that people who invest for income have expectations that are unrealistic. You’re in this for the long run, not the short run. And when you work with us here at Providence Financial, we’re not trying to double your income in the next couple years. We’re trying to make sure that you’re set up for that cross-country run that you never have to worry about running out of life later in life.

It’s a slow and steady kind of a mentality that goes into investing for income. And that’s a big reason why I wrote my new book, More Life Than Money: How to Make Sure That You Never Have to Worry About Running Out of Money Before You Run Out of Life. And I’d like to send you a copy of More Life Than Money absolutely free of charge.
You just have to ask for it, and you can do that by going to providencefinancialradio.com/book. One more time, it’s providencefinancialradio.com/book, and you’ll have a brand-new hardcover copy of my new book show up within just a few days To claim your free copy of More Life Than Money, one more time, just go to providencefinancialradio.com/book and we’ll get it right out.

Well, I certainly hope you’ve enjoyed the show. We’ve been answering the question, are you really ready for retirement? And we talked about not only the financial readiness, but also the emotional readiness as well. And I’ve even offered you a few free resources along the way to help you. I’m Anthony Saccaro.
You’ve been listening once again to the Providence Financial Retirement Show. Thank you for joining us. Really glad that you’ve been here. I certainly hope you’ve learned something that you didn’t know before and something that will help you have a more stress-free and peaceful retirement than you already have.
Have a great week, everyone. God bless.