378: Jordan Grumet, MD Interviews Casey Weade: Creating a Life of Meaning and Purpose and the Framework for a Successful Retirement

Casey Weade: I’m Casey Weade, and this is the Earn & Invest podcast.

Jordan Grumet, MD: My retirement was completely unplanned, at least emotionally. Sure, I had done the financial work. I had trampled through retirement calculators and considered safe withdrawal rates and drawdown strategies. I made the same mistake as I presumed many of you have or will. My planning started and stopped with money. As I’ve related many times here, and in my book, Taking Stock, I had very little inkling of purpose. Because of this, retirement was a one-way road that suddenly ended in a steep cliff. If I wanted to move forward, I needed to learn how to fly. My guest today spends a lot of time helping his clients learn how to develop wings. He is a retirement expert, podcaster, and dare I say, philosopher.

Casey Weade is the CEO and Chief Visionary of Howard Bailey Financial. He hosts the weekly Retire with Purpose radio and TV shows which air across the Midwest as well as the national Retire with Purpose podcast, aimed to help people maximize your financial confidence and overall financial well-being. He is a multi-time author with his latest book, Job Optional, reaching number one on the Amazon bestseller list in retirement planning and number five on the Wall Street Journal nonfiction e-book bestseller list. Casey has also been featured in national media outlets, including The Wall Street Journal, Fox Business, and CNBC. He’s a firm believer in developing retirement plans that are driven by meaning and purpose.

[INTERVIEW]

Jordan Grumet, MD: Casey Weade, welcome to Earn & Invest. Your brand is Retire with Purpose. Does purpose mean different things before and after retirement?

Casey Weade: Well, Doc, thanks for having me. It’s good to see you again. And does it mean something different before and after retirement? I don’t necessarily believe that that’s the case. I think we often don’t think about it until that moment in time. And then we have to go back throughout our lives and look at those through-lines. What are those things that we’ve always had a sense of purpose around? And then how do we bring those things forward into that next phase of life?

Jordan Grumet, MD: I get into this argument with people all the time. And they tell me I need to retire first and relax and take a bunch of months and just be for a while, and then I’ll think about purpose. How does that hit you? Because a lot of times I feel like we have to have a sense of purpose before we retire if we want to be successful, but I’ve gotten a lot of pushback on that idea.

Casey Weade: Well, I must say, from my own personal experience, I think we need that to happen, that whole experience needs to happen prior to actually stepping into retirement at all. And for myself, I experienced retirement, luckily enough, experienced that very early in my life, and it wasn’t necessarily my choice. Our second son was born with a congenital defect that was potentially going to take his life and required us to relocate to find medical specialists. And I took six months off work and I said, “Well, I guess I’ll just test out retirement at this point.”

Because up to that point, it had always been about that number. And I think it is for so many of us, if we’re financially astute, we’re listening to the Earn & Invest podcast or listening to Retire with Purpose podcast, we’re studying finance or reading about it, it largely becomes quite often about that number. I know for me, I took a very academic approach, grew up around the investing world, got a degree in finance, picked up my certified financial planner designation, and continued that study from an academic perspective. And it was always about the numbers, and getting to that number was the number one priority.

And I reached that number and then I took this six-month hiatus and I said, “Now, let me just shift my focus from building a company to focusing on my health and my family and my spirituality,” those things that I thought I was supposed to do. Once you get the number, now you’re supposed to shift focus to the non-financial aspects of life, these other aspects of life that are supposed to be more meaningful.

And I discovered for myself very quickly that that wasn’t good for me. I wasn’t very happy. If I ever experienced depression, that was probably the time in my life where I experienced depression. And I thought, this is what so many of the families that I’ve helped get to retirement are actually going through. I’ve done them a disservice over the years. I have helped build a financial plan to get them to retirement, and then they’re in retirement and maybe they shouldn’t be. Maybe we should have had a conversation around purpose and meaning before they actually stepped into retirement and they wouldn’t have felt this level of depression. Depression spikes, suicide spikes as people step into retirement because they never had the opportunity to experience it and really identify what that purpose is prior to making that transition.

And I know for myself, I said, “I have special gifts, I have unique abilities, I have ways that God has blessed me to give back to this world. And now, what am I doing? I’m just throwing those things away. Now, what does it need to be about? It shouldn’t be about money. It shouldn’t be about things. It should no longer be about that number, you’re job optional.”

And that’s when I see the true potential of so many individuals really get unlocked is when they realize it’s not about stepping into retirement and doing nothing or traveling or doing those things that maybe you never had the opportunity to do, but leveraging those God-given abilities to now continue to work quite often, but doing so in a capacity that is purely about your purpose, those things that bring you the most joy in life, which usually come back to one thing, helping other people. I believe we all share in that same purpose. We all have the unique purpose of helping people. We have our unique way of doing that as well. And I think it’s very challenging for most people to identify that until they actually get to that point of financial independence. And I think you experience that yourself, Doc.

Jordan Grumet, MD: I definitely did. And it brings up this important question for me of how early do we start talking and thinking about our retirement. It hits me that there were two things that happened to you fairly simultaneously that made you very thoughtful, maybe spun you into this depression, but allowed you to move forward and think about retirement and what you wanted out of life. One was that you were in a financial place where you thought that was viable, right? You had accumulated a certain number of money. There was a certain amount of safety where you could stop worrying about just putting food on the table and start thinking about maybe I don’t need to work.

The second thing was dealing with your child’s congenital issues. You were forced into thinking about these things at a very young age. How should it happen for our average person, for the average person who’s not maybe under the stress and maybe isn’t in that place financially, where it’s really a reality that they could think about stepping away from work either six months or forever, for that matter?

Casey Weade: I mean, so often, don’t we get this experience when we go on vacation? I know for myself, if I go on a two-week vacation, that’s about 10 days too long, right? And if I go on a week vacation, it takes me about five days to unwind. And then I have a couple of days where I’m relaxed. And then finally, okay, it’s time to get back to work.

I don’t think we have to have complete financial independence in order to experience what retirement is like, but I do think it’s incredibly valuable to begin to take some sabbaticals on your way, or at least as you’re getting closer to retirement. The most successful retirees that I see that are most successful in making that transition and are in a very positive and happy place in that next stage of life have experienced some level of intermittent retirement. They already have a feel for what it’s going to be.

And I think that’s the great thing about the FIRE movement, right? I think a lot of individuals in that FIRE movement are even realizing it’s not necessarily for them and that they’re stepping into a place where they discover more freedom. They’re still continuing to work, but they have the opportunity to feel what it’s like to go a week, two, three, four, five, six weeks without actually having to go to work. And that is a complete mind shift.

Jordan Grumet, MD: Are we confounding this definition of what retirement is? Because it seems like to many people, retirement equals “not working.” Your perfect example, you got to a point where you’re like, I could retire or I am retired, I’m taking this time off to deal with family issues, yet you chose to go back to work. Did that make you any less retired? I mean, it’s funny because we use this word, this retirement word, but I feel like there’s a whole mindset thing going on.

Casey Weade: Absolutely. And what should retirement be? I don’t know that we should have this– I do agree, I mean, to a certain degree. When it comes to retirement, a lot of individuals are almost against the word retirement, like it’s a bad word. Oh, you retire, you’re dead. It’s oh, we should rewire retirement or call it rewirement or call it second act, whatever. I don’t really care what it’s called and I don’t think we should have a problem with it.

There’s plenty of individuals that I would say, the vast majority of today’s retirees, I think this is changing, but I think the vast majority of today’s retirees that I do meet with, they really love retirement as it is in the traditional sense. But that’s not for everyone. I think those that struggle the most tend to be the individuals that had the highest sense of purpose in their working lives.

And in making that transition, it becomes somewhat of a crisis. And that is where I think it’s evolving. We’re not there, and I don’t think we should ever retire retirement. There’s going to be plenty of individuals out there that find much greater passions and not working. That’s going to continue to persist.

But there has to be a new avenue that I think is opening up for individuals that say, “Okay, I don’t have to go to this traditional retirement. I can actually go to a place that is, in my words, job optional where I no longer have to work.” And quite often, when I find individuals get to that place, we get them to job optional, all of a sudden, they said they want to quit working, but they work even harder because now, they’re not doing it for the money anymore. Now, they’re doing it because they love what they do every day. And that’s really what’s life is all about at the end of the day is love what you do and do it all day long to the level that you want to do it at. And that is something that I think is shifting in the world.

And I believe that future generations of retirees, we’re going to see a greater and greater degree of individuals that are working in a job optional status and not working because they have to. They’re working because they love it, because they’re adding value to the world, because they’re helping people in their own unique way.

Jordan Grumet, MD: I feel like traditionally, people would strut into your office somewhere in their 50s when it was maybe culturally appropriate to start thinking about and talking about retirement. Are you getting a lot of people in their 20s and 30s, maybe earlier mid-career, who are already using kind of like the big R word, starting to think about how to be job optional?

Casey Weade: They’re having these thoughts. Of course, the average individuals that are walking in are coming in and they’re mid-50s. And I actually played golf with a couple of physicians a couple of years ago, and they said, “What do you do?” I said, “Well, we help people transition into retirement.” And he said, “Really? So, these are people you’ve worked with for a long time, and now, they’re transitioning in retirement.” Most of them have never thought about it before, and now, they’re all of a sudden starting to think about how do I start to plan for retirement? Well, that doesn’t make sense. And these guys got it, right? I mean, they had thought about this for a long time and not just built a financial plan but had thought about purpose and meaning along the way.

I’ve had young individuals. My sisters-in-law are a great example that both read my book, Job Optional, which I was really kind of surprised by. I mean, it’s not necessarily a book that’s been written for people that are 20 or 30 years old, but there is a lot of talk about purpose and meaning and understanding your values and then leveraging those things in order to create the perfect life. And a lot of that comes down to also leveraging the right financial tools, having the right financial strategies.

And they said it changed the way that they view their finances. Rather than just simply chasing that dollar and chasing that number, always keeping it top of mind, this is why I am saving these dollars. This is why I’m doing this job. And how can I continue to spend more and more of my time every year in the things that make me happiest and create the most value for others?

Jordan Grumet, MD: How customizable is retirement? I mean, I think people, we want it to fit us the way we are, and yet we feel much more comfortable with something that sounds plug and play. It’s like you take these steps and you get to this outcome. We like to have specific plans for how we get where we want to go. Are most of the conversations you’re having with your clients now very customized to who they are? And is that discomforting in a sense, to people not to have a clear path ahead?

Casey Weade: Yeah. I talked to Alex Murguia, Retirement Researcher, about this very topic, and they’ve done some wonderful work in the customization of retirement strategies. And he did share the same things. These are the kind of conversations that people should be having with a financial planner, but it’s not happening. But I think this is the direction that the world is hopefully headed in. And what is it then? Traditionally, you come in, visit with a financial planner. They run a Monte Carlo simulation, plugged into a traditional, maybe stock/bond index fund portfolio and say, “Hey, you got about a 90% chance success. That feel good to you? Okay, great. Let’s move on.”

And that I do believe is changing, and even Dr. Wade Pfau, Professor of Retirement Income. I think what’s amazing about Wade Pfau, Alex Murguia, the group of guys, Bob French, these guys, they are academics. They approach retirement income planning from an academic place. And if you read Wade Pfau’s research, I’ve had him as a professor, he’ll show you the most academic way, the best way to approach retirement given your unique situation. This is the most financially efficient way for you to plan.

But that doesn’t mean it’s the way that you should plan. And that is what I actually had wrong for so many years. Approaching finance from an academic standpoint, I think that’s the hardest part about bringing on new advisors that have come from other parts of the industry where they have used those types of approaches where I say, I know that is technically the best approach. Give them that one. Now, give them two to three more because it’s not necessarily the academic approach that is going to be the best approach in your unique situation because you are a unique individual. It’s called personal financial planning because it should be personal. And before we even get to the planning part, I mean, that’s what’s so often being missed by financial planners is, well, let’s just build them a financial plan that’ll give them confidence and then they’ll spend in retirement.

What do we see? People have a perfect financial plan, all the financial confidence in the world, all the income they could ever need, and they can’t spend their retirement because it wasn’t driven by some purpose to begin with. It didn’t identify what their values are and let the values drive the financial plan. And once people connect the values to the financial strategy, the financial strategy actually works. It’s actually effective at the end of the day. So, we’ve created the values. We’ve walked through several different strategies in every circumstance because we want to find the one that’s right for you.

Going back to Retirement Researcher, Wade Pfau shows that while the best, most efficient approach for retirement income planning is guaranteed income with the rest going to equities, well, he doesn’t use that for himself. He subscribes to a risk graph approach. And I believe Alex Murguia is a fan of the total return approach. You have Bob French, who is a fan of the time segmentation approach. And these are academics. So, you cannot say that there is one perfect strategy that everybody should use because it is so much more personal. And that’s not easy, right? We don’t like to hear that.

Like you said, what do we want? We want to go in and know that there’s one perfect answer, and that’s the one I should use. And that’s the easy way out. That’s the easy way out for the advisor. That’s the easy way out for you. And that’s not going to add the level of value you should be receiving from working with a financial planner or building a plan for yourself.

Jordan Grumet, MD: Part of the problem with human beings is sometimes we don’t even know what we want until we experience it. And I’ve seen you make the point that we should be test driving our retirement. How do we do that? How do we put ourselves in those shoes and feel what it feels like before we actually make the jump and retire?

Casey Weade: Well, it’s hard not to go back to the sabbatical, right? It’s really hard not to go back to the sabbatical because they know only the Halftime Institute had some great research on that and talked about how we do this, how important it is to take these sabbaticals. And today’s employers are becoming much more comfortable with these types of things.

And there’s many more opportunities, great bridges to retirement and have sabbaticals because what are we finding? I am finding that the best people that I have the opportunity to recruit quite often are in the 50-plus age group. And what I’ve found as unique in them as a couple that are chief officers that I’ve been interviewing and hired, these are people that have made a lot of money in the past and they’ve run companies and they don’t want to do that anymore. They don’t want to be in corporate America. They understand passion, they understand purpose, they understand the value of loving what you do.

And I don’t know that you get that opportunity very often in the business world until today. I think that is definitely changing. And there’s no question the best thing that you can do is run some sort of sabbatical for yourself, even if that’s intermittent, taking a few more weeks off a year than you typically would. Those are the types of experiences where you wake up and you don’t have anything on your calendar anymore that are going to give you the feel of what it’s actually going to be like.

Jordan Grumet, MD: One of the great absurdities, I think, of the linear progression from occupation to retirement is often when we are at those retirement ages, we actually have the most knowledge and the most to give and the most to return in the workplace. So, it’s kind of absurd because a lot of people can actually then return to the workplace, use their knowledge and experience, and really feel like they’re affecting the people that are working with them and maybe doing some of their best, most fulfilling work.

Casey Weade: The level of clarity you have around your value at that stage in the game is just invaluable to a company as a resource, and I think employers are seeing that.

Jordan Grumet, MD: Now, before we get too mushy, we are talking about retirement. This is the Earn & Invest podcast, so we like things like pillars. So, you talk about the four necessary pillars to a stable retirement. What are they? And why are they important?

Casey Weade: Yeah, so we call our framework. And it is a framework because I think the problem with financial plan is that I get a plan, I can move on now. I’m never going to revisit this again. Reality is life changes, and so do you over time. And so, when we look at our framework that starts with purpose, we identify what that purpose is. It ends with meaning, but sandwiched there in the middle is your financial life plan, as we like to refer to that driven by purpose, designed to elevate meaning in your life. And that is where we find those pillars.

Again, it’s a framework because we are going to evolve and the plan has to evolve as well. And so, when we look at those financial pillars, I think what I have noticed over the years and the reason we really wanted to take a deep dive into creating this proprietary framework was that so many individuals are just running around from thing to thing throughout their financial life and picking up. I picked up this. The guy at the golf course told me to buy their stocks. I went out and purchased a stock on TD Ameritrade. And then my son started working for a whole life company, so I bought a whole life insurance policy. And then I went to a dinner seminar and picked up this annuity. And we just end up with all this stuff.

And that stuff leads to confusion and it leads to just challenges in our life in general. And if instead we can follow a systematic process of identifying each one of the major risks that we face in our financial life and address them systematically, then we won’t have this confusion, we won’t have this overwhelm, we won’t have this wonder. Do we have all of our bases covered? Are we going to be okay? It looks like we’re hitting a debt ceiling. Are we going to be okay? Well, inflation is at 8%. Do we have a plan for inflation? Looks like taxes are probably going to double in the next few years. Do we have a plan for taxes going up in the future?

And those are the types of questions that happen if you don’t systematically follow a strategy like the life plan. And so, when I created the life plan, I looked back at my financial life and said, “How did I get here? How did I get to financial independence?” And I just uncovered this framework that I had used in my financial life that I really didn’t recognize, kind of happened by default. I said, “Well, this is great. Why don’t we just use what I used and then really recreate this for individuals so they can follow that same path and create that same level of independence, certainty, and confidence for themselves?”

And it is very much priority based. It starts with liquidity. We need to have liquidity to make sure that we’re going to be prepared for emergencies that arise throughout our entire lives. So, do we have the liquidity to know we’re prepared for those emergencies that will happen throughout retirement? Then we have to focus on income because we don’t have income, we don’t have retirement. So, we have to create an income strategy that delivers us the confidence that we can spend.

And then number three, we have F. That is flexibility. And originally, this was investment. And it really was just an investment pillar with an I. And I like acronyms, so we need to make an investment. So, it’s life. But at the same time, what do investments provide us with? Traditional investment portfolios provide us with flexibility to adapt to the unknown future that faces us throughout our lives.

One of those things being unknown could be inflation. And people will say, “Well, inflation is, that’s we know what’s going to happen. We need to be prepared for inflation.” Well, not if you pay attention to some of the research by Dr. David Blanchett, the head of retirement research for Morningstar. And some of the research that he’s done shows us that, well, that may not be true for your average retiree, but we don’t know. What if we’re wrong? So, we need to have the right inflation-protected assets and the right investment portfolio to allow us to continue to have that flexibility to adapt over time.

And once we’ve taken care of the liquidity piece income to last a lifetime, flexibility to adapt, then we want to take care of what’s left over. That’s the E and that’s estate planning, to have the confidence to know that what you have today will pass on to your loved ones according to your wishes once you’re gone. And you think about estate planning, most just think of those wills, power of attorneys, trust documents, and all those legal things, but it’s really more than that. If you don’t do a good job disinheriting major medical providers and Uncle Sam, they can be your biggest beneficiary.

So, I like to include our medical plan, our long-term care strategies, our health care strategies, as well as our tax strategy in that estate piece. But really, this tax piece runs throughout your entire life. And you’ll see that on our wall in our office that there’s this dotted line that runs all the way out through life, that life plan. And those dots are tax planning because it needs to show up in your liquidity bucket to reduce ongoing 1099s, needs to show up in your income bucket to maximize the amount you’re actually taking home at the end of the day. It needs to show up in your flexibility bucket to maximize those after-tax returns and in your estate bucket to maximize what’s left behind for your heirs.

So, once we’ve covered all those things, and now, you have this financial life plan that’s covered all of those different bases, I don’t find too many people that go, “Well, I know I think we missed something.” And now, we’ve covered every major identifiable risk that you’re going to face throughout your financial life. And that is what I think is so often missed. Well, I’m concerned about long-term care right now, I’m concerned about the market right now, I’m concerned about inflation right now. No, let’s not jump around. Let’s just focus on it, follow a priority-based strategy, do it systematically so that you know all your bases are covered. And then we can go back and focus on our purpose and elevate meaning in our life.

Jordan Grumet, MD: We are talking to Casey Weade. He is the CEO and Chief Visionary of Howard Bailey Financial. And we are discussing moving from purpose to meaning in your life with retirement planning smack dab in the middle. We’re going to take a short break. I’m Doc G, and this is the Earn & Invest podcast.

We are talking with Casey Weade. He is the CEO and Chief Visionary of Howard Bailey Financial. He hosts the weekly Retire with Purpose radio and TV shows. And his latest book is Job Optional, which reached number one on the Amazon bestseller list in retirement planning and number five on the Wall Street Journal nonfiction e-book bestseller list.

Casey, we’ve been talking about moving from purpose to meaning and retirement planning in the middle. Let’s talk about what being retired looks like today. It used to be that people got retired and they kind of quit work cold turkey, right? They never were employed again. They never made money again. What does it look like today? I mean, are a lot more people working in their retirement?

Casey Weade: Oh, I mean, the statistics show it. There’s many more individuals that are actually working in retirement, but I think it’s not that they’re just working, right? They’re not just working at the local golf course. They’re not just working at the grocery store. They’re not just doing some of the things that I saw my grandparents do, at least not on the Weade side.

On the other side, my grandfather was 93 when he retired and passed away. I mean, he worked until the very end doing the things that he loved in the world of education. I think that’s what we’re seeing more of today. We’re seeing more that are having some of these little woo-wee conversations like this and really thinking a little deeper about meaning and purpose in our lives, what it means to be alive, what it means to add value to the world. And that’s what we want to do.

And we want to create value in this world. And I think that’s just a conversation that we’re getting more comfortable having as a society. And that means that we’re creating much more clarity around what we want the next phase of our life to look like once we’ve reached financial independence.

Jordan Grumet, MD: Is there such a thing as failure when it comes to retirement planning? And if so, what does that look like? What do you see?

Casey Weade: There’s definitely failure when it comes to retirement planning, and we can definitely get it wrong, right? But there’s two different sides of that. I mean, one, I think what do we usually jump to? We go, well, there’s financial failure. I’ll put everything in stock options and thought that I’d be okay the rest of my life, and then, poof, it’s gone. And well, retirement fails, right? But that is something that everybody is, I think, fairly aware of. Maybe they don’t all completely understand the risks. Maybe they haven’t constructed the best financial strategy, whatever it is. But yeah, we’re very aware of the financial risks as we step into retirement. This is why there’s a whole field of individuals like myself that do retirement income planning.

But then there’s this other piece, which is retirement failure on the non-financial side. And that is a risk today that I think is starting to get mitigated. But it’s still one that is bigger simply because the conversation isn’t the norm in working with a financial planner or financial advisory firm. That conversation about what are you actually going to do doesn’t happen because you come in and say, “Hey, I want to retire at 65 and I’m 62. What do they do?” They put a plan together for you to retire at 65 because that’s what you asked for, right? And that’s not what they should hear.

The first question should be, why do you want to retire? And that is not typically the question that is asked. So, what ends up happening is you put so many individuals that are adding so much tremendous value in the world that have so much value to give, as you said earlier, at a stage in their life where they have a massive accumulation of experience and knowledge and wisdom that is invaluable to not just the next generation, but the global economy needs that today.

And if we can identify those areas that bring you passion, that drive value for others, then we can embed that in your retirement versus stepping into retirement, not knowing what we’re doing. And I can’t tell you how many individuals that I’ve run into that have stepped into retirement and not just passed away, but alcoholism is one of the leading causes of depression and anxiety and death and retirement. Alcoholism is a massive spike. We see the consumption of television, news media, and all of these things lead to failure, failure and that we’re not enjoying our lives and really creating a life of meaning and purpose.

We might have had a sense of purpose in our working lives. We step into retirement just because our neighbor stepped into retirement and we were supposed to because that’s a societal norm. And before you know it, we’re in a place that we didn’t want to be. My grandfather on my Weade side was right in line with that, stepped into retirement, probably put on 150 pounds, and ended up passing away not too long into retirement, 78 years old, passed away. And I guarantee you, if he had stayed in his working life doing the things that he was great at, he probably would have lived another 10 years.

Jordan Grumet, MD: So, when we’re talking about this dichotomy, this issue of failing because of purpose versus failing because of money or a technical failure in your finances, it sounds like at least for the group of people you work with, you’re much more likely to run out of purpose than you are to run out of money.

Casey Weade: I sure hope so, yeah.

Jordan Grumet, MD: Otherwise, you’re not doing your job very well.

Casey Weade: Absolutely. I mean, I really hope that that’s the case, but I hope we don’t run out of either one given that purpose should be driving that financial plan. I really hope that we’ve created enough focus on both aspects that individuals are really in a place where they have an unlimited amount of fuel in the tank because the financial plan is ultimately driven by purpose, which we should never run on E.

Jordan Grumet, MD: So, I kind of learned about personal finance through the lens of Financial Independence Retire Earlier, the FIRE movement, and you contemplated and took a sabbatical and thought about retirement in your 20s. Both of us were fairly young. And I’m wondering if the early retirement movement has changed the game at all. Is this advice different for someone who’s contemplating these issues in their 50s and 60s versus someone who’s contemplating these issues in their late 20s or early 30s?

Casey Weade: Well, it wasn’t for me. I mean, I don’t think it’s any different. And again, retirement is uniquely you, so it doesn’t have to be in one way. It can be whatever you want it to be, and that can be if you’re 20 or 30, 40, 50, 60, 70, 80, it all comes down to the same thing and that is purpose is where you find meaning in life and enjoyment in life and what makes you happiest. That’s what we should be focusing on regardless of the stage of life that we find ourselves in.

Jordan Grumet, MD: We’ve been talking about the resiliency of your retirement plan, especially when it comes to purpose. Let’s look at the other side. I mean, especially and if we bring in this conversation about planning younger, maybe trying to build that life of purpose and changing your work-life balance to really fit that at a younger age and thinking about “retirement” before you hit the traditional age. What do we do about the unknown?

I mean, a lot of people start their planning, they get a date, they get something in mind, and then they get laid off. We saw a lot of that with the pandemic and the associated recession, or they have a health scare or, God forbid, something like disability. How do we plan for the unknown while we’re thinking about things like purpose and trying to get those pillars ready?

Casey Weade: I must say, I think that the unknown is surprisingly plannable in a large part. I mean, all the things that you mentioned there, we can plan for a lot of those different elements of our life. We just tend not to. We tend to ignore the things that we don’t want to focus on, be it disability. I mean, you’re a physician, you know the disability issues that that physicians face, so disability, death, long-term care, and I mean even house fires or general liability insurance.

I’m a huge proponent of insurance. My insurance agent probably absolutely loves me because I call him and say, “Hey, can I get any more insurance?” Because I just love the confidence to know that I’m always going to be insulated against a lot of those unknowns that at least are identifiable, again, more identifiable than we typically think they are. I think a lot of that just comes because maybe we watch too much news and we get a little overwhelmed and we think, oh my gosh, the world’s going to fall down and we’re all going to cryptocurrency and we can kind of spiral out of control.

But really, again, planning for the unknowns is not a whole lot different than planning for the known unknowns from a retirement perspective and focusing on each one of those different pillars. So, first off, we have, yes, should we be planning for those different items that are insurable? Absolutely. And then I think about how do we plan this? Our financial framework, yes, is it designed largely for individuals stepping into retirement? Absolutely.

But I’ve done a lot of thought about how that shows up in my own financial life. I think there were times like, am I really adhering to the philosophy? Because I have a different type of philosophy about creating financial independence that I see in a lot of areas. I was speaking at a summit and they had myself speaking at the summit and another expert speaking at the summit. And we had two polarizing philosophies.

He was all about passive income, which it just seems that has run rampant these days. Everybody’s talking about passive income, create as much passive income as you possibly can. And I’m going, I don’t want passive income. Why would I want to generate a bunch of income that I have to pay taxes on that I’m not spending? Because I’m going to continue to work, so I’m going to continue to save. So, why would I want to continue to generate additional income?

What did Warren Buffett say? Never spend money on money that you’re not spending. My favorite Warren Buffett quote of all time. And that seems to get kind of looked over by a lot of the passive income gurus that, okay, well, generate enough passive income, then you don’t have to work anymore. I go, yeah, but I’m going to continue to work. So, that seems like a problem I just created for myself.

So, would we look at all of these different risks and these unknowns? Just follow the same framework. I mean, it’s the same things Dave Ramsey says with some tweaks, right? So, number one, liquidity. So, yeah, set yourself up with your emergency fund. That’s standard. And then we can start funding what I consider leg one of income. I think we all need a leg one of income. But most of us don’t start planning for leg one of income until we’re maybe five years out from retirement, stepping into retirement.

And what do I mean by that? It is the same work that Michael Kitces has done and some of these great retirement researchers saying you need to have a safe bucket, right? Maybe that’s one year of guaranteed income, two years, five years, ten years. I prefer a 10-year leg. Ten-year legs just give me a lot of confidence, especially as I look back throughout what’s happened in history in the stock market. I go, yeah, I want a 10-year guaranteed income. And that’s a lot to ask for your average American and young individual, right?

And that’s not always right. We had Burt Malkiel on the podcast, and for him, he’s 78 or no– well, he’s older, okay. And he’s in RMD age and he’s taking required minimum distributions and he only keeps, I think it’s 12 or 24 months, of safe cash available to satisfy his distributions. That wouldn’t be enough for me.

But that might be enough for a young individual. So, we have maybe three to six months of emergency expenses funded. And then maybe for you, it’s a five-year leg of income. It’s invested, but you gave up some liquidity and you’re getting a decent rate of return to keep up with inflation.

And now, for me, I know, hey, Casey, I have all the liquidity I need to satisfy a year or two years’ worth of expenses and take advantage of opportunities. I have income. If I lose my job tomorrow, I lose my business, can’t create income, I have 10 years’ worth of income taken care of, and then I can allocate everything else to that flexibility bucket to equities to allow it to continue to grow. By the time I drain that 10-year bucket, I’m going to be able to replenish it with my equity bucket and continue to balance those things out, of course, over that 10-year window.

But I don’t see too many young people doing that. I think that creates a lot of anxiety in their financial lives because everything is going into their 401(k), they’ve become Bogleheads. They’ve put everything into S&P 500 index funds, but hey, I don’t have a problem with low-cost index funds by any means. We use those all the time, but not for the money I might need next year or the year after. Retirees that we’ll meet with have a high level of anxiety quite often because they have everything in the market and they need us to restructure that plan so not everything is in the market and at risk and subject to those fluctuations.

I don’t think it’s that much different for someone that’s 35 or 40 years old. Those individuals still have anxiety even though they don’t need the money today because they might need the money today. All of our lives are unpredictable, our financial lives, whether you’re an entrepreneur, whether you’re a physician or an attorney or work in a factory. Whatever it is that you do, there is a degree of risk to that. And we often understate that. I think business owners probably understate the level of risk that they’re taking on more than anyone else.

Jordan Grumet, MD: We are good if we’re thoughtful about managing risks. You’re talking about that 10-year bucket and certainly the emergency fund, which for people can run six months to a two-year bucket and then insurance to cover those other things, then our risks that sometimes we can’t deal with. The one that I think dangles out there that we still struggle with is long-term care. I mean, have we solved the long-term care problem?

Long-term care insurance used to be affordable, right? When it first became something that was in the public eye and it’s become more and more unaffordable over time. To me, I see, especially to young people, that’s a big risk that they don’t necessarily know how to mitigate very well because insurance tends to be somewhat costly.

Casey Weade: Yes. I think we also think about the problem wrong at the same time because the problems may be solved in the wrong way for the wrong person. We might look at the cost of long-term care. And how is it pitched? It’s hey, it’s going to cost you $10,000 a month. And who knows how long you could be in there? There’s two of you. So, we need to have this long-term care strategy that’s going to cover all $10,000 a month with a 3% inflation rider. Well, that’s going to be incredibly expensive.

If you end up in a facility and let’s say that you had income of $10,000 a month when you went into that facility, now, do you still need income of $10,000 a month if you’re in the facility? No. I mean, your expenses just went down significantly in a great deal, and really, the 90% of the areas of your life, and then they skyrocketed another.

And so, let’s say that the difference is okay, you’re still going to have Social Security coming in and pension coming in, investment income coming in, now we need to guard against the alpha of that. Maybe that’s having $3,000, $4,000, $5,000 a month in extra coverage. I think, one, we kind of get the coverage equation wrong and we overestimate what we’re actually going to need when we step into that point because we forget about, one, all those extra sources of income that we will no longer need once we’re in a facility. And then we’ve kind of forget what long-term care insurance is for.

So, I think my dad’s a good example of this. He used to live in this neat home down Asheville, North Carolina, and he’d wake up, we’d talk every morning. And I remember one morning he said, “Casey, this is beautiful. Love it here. Someday this is going to be yours.” And I said, “No, it’s not. Not unless we have to sell it to pay for the long-term care facility.” And he said, “Well, if that happens, just walk me off of a bridge, give me a gun.” And I said, “Well, that’s not going to happen. I’m not going to do that.”

And so, did he buy long-term care insurance? No, he didn’t buy long-term care insurance. I did. But I didn’t buy traditional long-term care insurance. I purchased a life insurance policy on him because if he ends up in a nursing facility, he’s single and he has plenty of assets. He could live in the Taj Mahal of nursing facilities and live there as long as he wanted to be there. Who’s that hurt at the end of the day? He leaves less money behind to me. So, who should be paying for the long-term care coverage? Well, the person that’s actually going to hurt and not him. So, I purchased a life insurance policy on him that we can use for long-term care so we can accelerate the death benefit to cover his needs.

Same thing is true for myself. A significant portion of my income goes to cash value. The life insurance policy is just a savings vehicle for that first leg of income needs and liquidity. So, I didn’t go there immediately, right? I filled up that emergency bucket, HSAs, 529s, Roth 401(k)s. You’ll max out those buckets. And then I use a significant portion of my annual savings to go to cash value life. Now, it’s going to be available for me to create tax-free income down the road when I’m ready for that.

However, in the meantime, there’s a death benefit there that my family needs and I can use that death benefit while I’m living if I were to need long-term care. And so many young individuals overlook the risk of them needing long-term care today. There are individuals, I’ve seen 45-year-olds that have needed long-term care. And what do you hear? Well, don’t look at long-term care insurance until you’re 55, 60 years old. Well, what happens if you’re 54 and you need long-term care? What happens if you’re 45 and you need long-term care? Those things can happen. We can become incapacitated. And I want to have some coverage for that.

So many individuals out there have life insurance policies because they wanted to protect their family. And by just adding a rider or just using a different insurance company with the same benefits that they had before, that insurance company allows them to accelerate the death benefit while they’re alive. And instead of going out, buying a big long-term care policy, here we go. You might already have long-term care. You just didn’t know it. You had it in the wrong bucket. You might just need to shift it from one pocket to the next. And now, you have half a million, a million dollars in long-term care coverage that you didn’t know you had before.

So, I guess bottom line is there’s a lot of different ways to think about long-term care, but we need to think about it. We need to make sure we understand what the real cost is going to be, and then look at the avenues that we have to cover for it, which are all traditional long-term care insurance.

Jordan Grumet, MD: The things can get complicated. And I know I’m going to get a biased view here because I’m talking to someone who is a financial advisor. This is what you do for a living, you help and coach people through these decisions. But there’s a large group of people listening to this podcast and out there in the world who really feel like this is something they should and can do by themselves. How technically complicated is good retirement planning? I mean, can this be done by themselves?

Casey Weade: No, they need to work with Howard Bailey Financial, with Casey Weade. No, that’s it. There are no other options.

Jordan Grumet, MD: You either do that or you fail, right?

Casey Weade: No. So, we just had this conversation. I had it with one of our financial advisors here this afternoon, and we talked through, how do you answer this question, especially when you have a young individual that comes in? So, there’s a lot of people we meet with that don’t need a financial planner, they don’t need us. And a lot of them are younger or they haven’t accumulated enough assets yet, or they just don’t have the challenges that maybe other individuals might face.

So, why hire a financial planner? Vast majority of people don’t need a financial planner, right? I mean, on the way to retirement, what’s the goal? Accumulate as much assets as you possibly can. You’re trying to accumulate so that someday you have financial independence. What’s the best way to do that? Invest in equities. Keep your costs low. And it’s not that complicated. You set up your savings accounts, you figure out how much you’re going to save, and you save that amount and as much as you can every year. And you keep your investment costs low, you try to be as tax efficient as possible, investing in tax-advantaged accounts.

And beyond that, that’s pretty simple, right? You don’t need a financial planner to come in and charge you 1% a year to help you invest in index funds. You could do that through a robo-advisor for maybe 10 bps a year. That’s not why we have financial advisors. I mean, that’s the way it was. That’s the way it was in the 80s, 90s, maybe even early, early 2000s. I think that’s evolved just due to technology and availability of information today. That’s just not the need anymore.

Now, I want a financial advisor myself. I work with a financial advisor, but why do I work with a financial advisor? Why would someone that’s coming in that’s 30, 40, 50, 60 years old work with a financial advisor? Well, someone that is in that retirement stage, they’re no longer worried about growth at all costs. They’re not trying to accumulate as much as they possibly can. Now, the focus is on preservation and distribution. How can I create an income that will last the rest of my life? And how do I minimize my taxes along the way, ensure those assets pass on to my heirs, and maximize those assets for the next generation? Those are different questions than growth at all costs.

Now, we’re talking about Medicare. Now, we’re talking about long-term care. Now, we’re talking about Roth conversions. Now, we’re talking about big Social Security decisions, pension maximization/optimization. That becomes more complex. Now, it’s not that some people can’t handle that on their own. Absolutely. There are some individuals that can handle that on their own that we work with, and they say, “I just want you guys as a backup. What if something happens to me? I want you to be able to step into my shoes and take over the work that I was doing previously.”

So, those are the types of individuals that need that help. And those individuals can be younger. They can be 20, 30, 40 years old. They may have so much income and so much in the way of assets that they need help with business structure, advanced corporate structures. They need help with advanced tax strategies. That’s where the work of a financial advisor creates alpha.

An advisor isn’t going to create alpha in the way of generating more return than you’re finding in the stock market, right? That’s not the reason to work with a financial advisor so they can make you an extra 1% or 2% a year. It’s gone by a Vanguard Total Stock Market Index Fund, and keep your cost low and dollar cost average, you’ll be okay. But someday, there may become a day when your goals change. You accumulate more assets, have more income, and now, your focus becomes about preservation, distribution, protection against risks that you didn’t have previously.

Jordan Grumet, MD: Casey, look into the tea leaves and tell us, are there any unique roadblocks you think coming up in the next decade for people in the midst of retirement planning? Anything new or any stressors you think that are different than what people faced in the last 10, 20 years?

Casey Weade: I can do the headline grabbing stuff, right? Because that’s what people want.

Jordan Grumet, MD: Put it all in crypto?

Casey Weade: Yeah. I mean, it’s just, are there risks? Yes, there’s always been risks. And there’s going to continue to be major risks. I think we have to be careful of grabbing or getting ahead of ourselves and maybe getting a little over our skis as we think too in-depth about what could be in the future. Could there be things that dramatically changed the landscape of retirement planning, investment planning, tax planning? Absolutely. This is why we have a framework to make decisions upon today that we can continue to leverage and adapt to the changes that will come our way.

What are those changes? I think most obviously, we’re going to see Medicare changes. I think we’ll see major changes to our health care system as a whole, whether that’s Medicare, whether that’s long-term care, whether that’s the exchanges. I think that will be major shifts that we’re going to see down the road. We’re going to see major currency changes in the world. There’s going to be an evolution in the world of currency. Does that mean we go all the Bitcoin today? Absolutely not.

But these are the types of things we keep an eye on. We think about the changes that are going to happen in health care. We think about the changes that are going to happen with global currency structures and financial systems. And I think we also– more than anything, especially it depends where you’re at, right? If you’re 65, 75 years old, what’s your biggest risk that maybe you haven’t taken care of yet? Maybe you’ve taken care of health care, maybe you’ve taken care of inflation.

Have you considered the risk of rising taxes in the future? That’s the only one that we can sit here and say, with 100% certainty, taxes are going to be higher in the future because in 2026, the Trump tax cuts retire and we’re going to see taxes increase across the board by about 20%. That’s a significant increase that we already know is on the horizon and we can start planning for today.

And we’ve had previous US Comptroller General of the United States, David Walker, on the podcast, Power of Zero expert David McKnight, I mean, all of these individuals have given us different ideas of what taxes might do in the future. McKnight saying, they could double by the time we get to 2026, 2028. David Walker saying, they’re probably going to increase by about 50%, and so, that’s 20% and another 10%, so maybe 30%, 40% by the time we get into the mid to late 2020s. As we have a lot of reason to believe taxes will be significantly higher in the future, why not start planning for those things today? So, those would be my big three.

Jordan Grumet, MD: Well, Casey, I wanted to thank you for coming on the show today. As I think about our conversation, what I really take from it is this idea that we want to move from purpose towards meaning. And instead of looking at retirement planning traditionally as maybe a roadblock, we have to start seeing it as the conduit that it truly is. And it sounds like that’s what you incorporate into your form of financial advice. I wanted to end this episode the way I end every episode by asking you what is up next in your life and where people can reach out to you. First and foremost, what’s coming up for Casey Weade? What is changing at work, on the podcast, and life?

Casey Weade: Yeah, well, the kids continue to get older. So, our youngest is a two-year-old little girl and well, her getting older just continues to scare the death out of me. She just went to school this week. So, that is definitely where my mind is, at home is on the kids, and especially that little girl, because it is different. The girls are different than the boys.

And from a business perspective, I think we have some really cool things on the horizon as we continue to develop our framework into a digital format that individuals can interact with online. They can go online. They can pay a fee and develop their own financial plan, utilizing our framework that can systematize itself. This is going to be so cool.

I think this is really going to change. I think this is a big change that is on the horizon in the world of retirement planning, where today, if you want a lot of those tools, if you want to have long-term care, life insurance, Medicare, annuities, those types of vehicles, you do have to go through a broker. I think those things are going to get more systematized as we take our framework online, allow individuals to interact with the framework, create their own financial plan, and then purchase those products directly themselves without having to interact with a financial advisor, financial salesperson. That’s going to dramatically reduce their expenses and make the ease of setting up a retirement plan that much easier.

Taking that and saying, well, would you rather implement it all yourself, purchase products from us, have us manage that, or actually work one on one with a financial planner? I think those are going to be the things that really get me excited and the things that are going to make a big difference in the lives of the individuals that are out there today. So, life, business, and then I suppose I had the opportunity to meet with some of the individuals that are listening in today starting by just giving away our book. And that is I wanted to give away Job Optional to the listeners as our gift here at Howard Bailey to them. We’ll send out a digital copy of my Wall Street Journal bestselling book to them by simply texting over the keyword “Earn” to 866-482-9559 and we will send you out a free copy of the book. So, those are the things that are on my mind right now, Doc.

Jordan Grumet, MD: Casey Weade, that is very generous of you. Again, the book is Job Optional, and we’d love you to get a copy of it. Thank you, Casey, for coming on the show.

Casey Weade: Can’t wait to see you again, my friend.

Jordan Grumet, MD: That’s a wrap.

[CLOSING]

Jordan Grumet, MD: Earn & Invest is now part of the Airwave Media Podcast Network. Visit AirwaveMedia.com to listen and subscribe to this show as well as other fine podcasts.

So, I have to be honest with you. My talk with Casey Weade has made me think a lot about my retirement and specifically my sense of purpose. First and foremost, you may ask, am I retired? And that’s a great question. I left my job practicing full-time medicine in 2018, but I continued doing hospice work and some work with some nurse practitioner companies.

And now, I’m a full-time podcaster and writer. Am I working? Am I retired? And does this have anything to do with making money? I have to tell you, and I’m going to be real honest here. My goal in my activities today is not necessarily to make money. So, while I do make money doing my hospice work and some of my medical work that I do very part-time, I really don’t try to monetize podcasting or writing to any real extent. So, you guys hear advertisements on the podcast. I have the mastermind group Wealth with Purpose. That all creates about enough revenue to pretty much cover the costs of running the podcast. But if you think about it, I spend 20 to 30 hours a week, maybe what you would call work doing this work, but I don’t really do it for money. So, in a sense, I guess, I am retired.

On the other hand, I still have some revenue and I still do the hospice activities and I still make some money there. So, I guess I’m kind of not retired. More importantly than the label is to really try to figure out, am I living a life of purpose? Am I doing the kinds of “work” that is fulfilling to me, the kind of ways I want to be spending my time? And the answer is undoubtedly yes. Podcasting is probably one of the things that I love most, along with writing and public speaking, and I spend an inordinate amount of time doing this. I mean, between creating the podcast, doing the interviews, doing the social media, putting the website together, etc., it ends up being a good chunk of my week.

So, you may ask why I do it. And I would answer, because I love it, because I like being in front of the mic, because I like creating these conversations, because I think they have real value. But that really just touches the surface of why I do this. If I dig deeper and deeper the real why I do this, or maybe the why I do anything is other people. I mean, creating and making a podcast has given me such an excuse to be part of other people’s lives, to talk to other people, to invite them on my show, to give them compliments, to intertwine my lives with theirs.

And I think of this really in two main ways. One is the guests. So, by having your own podcast, you give people the compliment of inviting them to be on your show, and ultimately, hopefully, you make friends with a lot of these people. These experts, these book writers, these business people, over the years, they’ve become my friends and they’re the people who I create content with, the people I share experiences with, I go to conferences with. Ultimately, this has become my community of creators that nourishes me. And if you can think about what do you want retirement to look like, for me, it’s being around creative people who I connect with, who I feel like I’ve built a community with. That’s the first part.

And then the other part of the why, the people that I interact with is all of you, those who are listening to this podcast. If I can interview someone who brings you value, who changes your life, who sets you on a different path in a sense that binds me to you, we are connected. Maybe on one level, I sound like a disjointed voice that you listen to in your earbuds while you’re taking a walk or exercising, but ultimately, we are all connected.

And it may feel like a one-way conversation, but it’s not. Maybe not you specifically, but I get emails from people, I have conversations about the podcast. I meet listeners when I go to conferences and places like that. And so, I very much feel like we all are having a conversation, even if you and I are not talking specifically.

And so, my conversation with Casey today really made me think about these things. What does purpose look like in my life? And it certainly has become this show, Earn & Invest, writing, public speaking, having this conversation with not only my guests, but with the listeners, building community, feeling like I’m a part of something moving from me to us. I can’t think of a better way to spend my “retirement.” And I can’t wait to spend the next, hopefully, 30 or 40 years doing just this.

Thank you for being on the ride with me.

Awesome. I leave things rolling just for a few minutes as we chat afterwards as part of the after-show. Thanks. It was great conversation. I really think we continuously have to redefine retirement and I think this really has become a golden age of looking at it much more as a continuance or even a beginning, as opposed to an ending, which I think it traditionally was looked at. And certainly, for me, again, the conduit was the FIRE movement, which got me kind of interested in this idea of retirement at an early age. But we’re really talking about just building a good life earlier on in your life, regardless of how much or how little you’re “working.” But this lifestyle design idea, I like how you’ve really integrated it into retirement or what we traditionally called retirement, but now it’s something completely different.

Casey Weade: Yeah. And really having the opportunity to just throughout our lives, focus a little bit more on purpose and meaning and that’s really what we should be doing and realizing from our standpoints that money should be leveraged to create even more meaning in life. And that’s what we lose touch with. And I think we’re going to see more retirement coaches, life coaches getting embedded with the financial planner. And that’s having a conversation with a coach Thursday this week regarding integrating him into our process where now, you actually have someone that is a professional life coach, work with people all over the world that’s going to interact with you on the front end to help really, truly get super crystal clear because I know financial advisors just aren’t comfortable having that conversation.

But working with someone that’s comfortable having that conversation, delivering that to the financial advisor to create some talking points, and then on the back end, you have a series of coaching meetings that can be, hey, you have an introductory meeting for once that is free, or you can hire this coach through us at a discounted rate and they can work with you for 6 months, 12 months. I think more of that is going to become mainstream. It’s not quite there. I think still, I find a lot of the individuals that are coming in and going what’s a life coach, what’s a retirement coach purpose. You’re asking me about purpose right now? It’s still a little woo-wee, I think, but it’s definitely and I think hopefully becoming more mainstream to have deeper, more meaningful conversations with your financial professional.