Control Your Retirement Destiny Dana Anspach

In this episode, podcast host and author of “Control Your Retirement Destiny” covers Chapter 4 of the 2nd edition of the book titled, “Taxes.”
If you want to learn even more than what there is time to cover in the podcast series, you can find the book “Control Your Retirement Destiny” on Amazon.
Or, if you are looking for a customized plan for your retirement, visit us at sensiblemoney.com to see how we can help.
*In this recording, Ms. Anspach incorrectly stated "At least 12% right? After all, in 2017 that was the lowest tax rate."  The 12% tax rate was implemented in 2018, not 2017. The correct sentence would be "At least 15% right? ...at 15% they would pay just over $31,500 in federal taxes.
 
Chapter 4 – Podcast Script
Hi, this is Dana Anspach. I’m the founder and CEO of Sensible Money, a fee-only financial planning firm. I’m also the author of Control Your Retirement Destiny which was initially published in 2013. A 2nd edition was published in 2016, and now, I am working on the 3rd edition. Why a 3rd edition? Well, the tax laws changed - and we want to update Chapter 4, which covers taxes.
This podcast covers the material in Chapter 4, and I’ll be discussing both the old tax rules and the new tax rules. We’ll continue to follow the case study of Wally and Sally based on the 2nd edition of the book.
The book has incredible 5-stars reviews on Amazon. If you like what you hear today, go to Amazon and search for Control Your Retirement Destiny. You won’t be disappointed. And if you are looking for a customized plan, visit sensiblemoney.com to see how we can help.
Ok, let’s get started. In this podcast, I’ll be covering the highlights from Chapter 4 on the topic of “Taxes.”
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There are very few people I know who enjoy doing their taxes. That includes me. I have actually never done my own tax return. To me, it is worth it to pay someone else to handle this task.
Yet, I know a tremendous amount about personal tax rules. So why wouldn’t I do my own tax return? Well, a tax return is a historical account of what happened. Once it is time to file your return, there is nothing you can do to change the outcome.
I prefer to use my tax knowledge to figure out how to pay less in taxes. And, to help other people pay less. To me, that is one of the most rewarding parts of my work.
To pay less in taxes, you have to plan ahead. How far ahead? The more you want to save, the farther ahead you’ll plan.
Think of tax planning in three levels.
Level 1 is pretty basic. For example, assume you turn your tax documents in to your tax preparer, and he or she let’s you know you could fund an IRA for the previous year, and thus reduce your tax bill.  That wasn’t really planning ahead, but you did learn a step you could take to reduce current year taxes.
But is this really the right step to take to lower your taxes in the long run? Not for everyone. Some people are better off funding a Roth IRA instead of a Traditional Deductible IRA. With a Roth, you make after-tax contributions and from that point on, the money grows tax-free. The Roth IRA has several unique advantages for retirees when they enter the phase where they are regularly withdrawing money. For example, Roth withdrawals do not count in the formula that determines how much of your Social Security is taxable. And Roth IRAs do not have what are called Required Minimum Distributions, which begin at age 70 ½ and require you to take out specified amount each year. These unique advantages of Roth IRAs are often missed by traditional tax preparers.
The reality of Level 1 planning is that many tax preparers are so focused on what you can do to reduce this year’s tax bill, that the advice they are giving, with the best of intentions, may not be advice that is ideal for you.
Next, we have Level 2 tax planning. You must tackle Level 2 planning in the fall, and run a tax projection. The bummer part of doing this is that you have to gather estima

In this episode, podcast host and author of “Control Your Retirement Destiny” covers Chapter 1 of the 2nd edition of the book titled, “Why It’s Different Over 50.”
If you want to learn even more than what there is time to cover in the podcast series, you can find the book “Control Your Retirement Destiny” on Amazon.
Or, if you are looking for a customized plan for your retirement, visit us at sensiblemoney.com to see how we can help.
 
Chapter 1 – Podcast Script
Hi, I’m Dana Anspach, the founder and CEO of Sensible Money, a fee-only financial planning firm that specializes in helping people transition into retirement. I’m also the author of the books Control Your Retirement Destiny, and Social Security Sense.
My passion for helping people make the best retirement decisions possible is what led me to write Control Your Retirement Destiny and I’m honored by the incredible 5-star reviews it has received. I wrote it because I wanted people to see what a real retirement plan looks like – and the book spells it all out, step by step.
Today, I’m thrilled to bring to you this podcast where we will discuss highlights from the book. In this episode, I’ll be covering Chapter 1 of the 2nd edition of the book titled, “Why It’s Different Over 50.”
If you want to learn even more than what we have time to cover in this podcast series, I encourage you go to Amazon.com and search for Control Your Retirement Destiny. Or, if you are looking for a customized plan for your retirement, visit us at sensiblemoney.com to see how we can help.
Let’s get started.
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So, why is it different over 50? Sure, your joints ache more, and you can no longer read menus, but, do the financial aspects of life change too?
In many ways, yes, they do.
Think of it like this…
Imagine you’re planning for a road trip. This road trip has two phases.
The first phase is the accumulation phase. This occurs during your working years where your focus is on saving for retirement. You have a set point in time you are saving for – a destination you want to reach by a specific age.
The second phase is the decumulation phase of the road trip. This will be the point in time where you will “live off your acorns”. You have a lot more flexibility in this phase, but also, a lot more unknowns.
Let’s look at each phase more closely.
First, the accumulation road trip.
Assume for this portion of the road trip, you’re not going too far, only about 300 miles.
Your gas tank holds 18 gallons and you didn’t have an electric car, so you only get about 20 miles per gallon.
Taking 18 gallons x 20 miles per gallon, you can estimate you’ll get about 360 miles per tank. Since your destination is 300 miles away, it’s pretty easy to figure out you can get to there on one tank.
This type of calculation is simple and easy to do. When you’re young and actively saving for retirement, this type of calculating helps you figure out how much to save.
For example, if you’re age 40, and you want to save $1.5 million by age 65, how much do you need to put away each year?
The answer is about $24,000 a year – that is assuming you earn about 7% a year on your investments.
This type of math is relatively easy to do using a spreadsheet or a financial calculator. It’s easy because you plug in specific data, such as 25 years and a 7% return.
Now, let’s start the second part of your road trip – the decumulation phase – and see how the math gets harder.
As you start the decumulation phase, here are some of the questions you have.
How long is your road trip going to be?
What terrain will you be driving over?
What will the weather be like?
Are they any gas stations along the way?
What will the price of gas be?
These are all unknowns.
Let’s break these unknowns into four risk categories.
The first category is called “Longevity Risk”. You don’t know how long you’ll live. So you don’t know how many total miles you’ll be driving. Instead of kn

In this episode, podcast host and author of “Control Your Retirement Destiny” covers Chapter 2 of the 2nd edition of the book titled, “Starting with the Planning Basics.”
If you want to learn even more than what there is time to cover in the podcast series, you can find the book “Control Your Retirement Destiny” on Amazon.
Or, if you are looking for a customized plan for your retirement, visit us at sensiblemoney.com to see how we can help.
 
Chapter 2 – Podcast Script
Hi, this is Dana Anspach, founder and CEO of Sensible Money, a fee-only financial planning firm that specializes in helping people plan for retirement, and author of Control Your Retirement Destiny.
In our previous episode, we discussed highlights from Chapter 1 on the topic of “Why It’s Different Over 50.” In this podcast, I’ll be covering the highlights from Chapter 2 of Control Your Retirement Destiny, titled, “Starting With the Planning Basics.”
Before we get into Chapter 2 content, a brief history on the publishing and reception we’ve gotten with the book. Control Your Retirement Destiny was initially published in 2013, out of my passion for helping people navigate their way through retirement and to combat the popular retirement rules of thumb in the media that are hurting people more than helping them. Naturally, I was nervous when it was released. Will people like it? Will it help them?
I’m honored at response I’ve received and the feedback on the book – it has incredible 5-stars reviews on Amazon. And it is often the reason clients initially seek us out for assistance.
Before we get going, just a reminder that if you like what you hear today, go to Amazon and search for Control Your Retirement Destiny. You won’t be disappointed. And if you are looking for a customized plan that fits your specific retirement needs, visit sensiblemoney.com to see how we can help.
Let’s get started. ----
In this Chapter you learn how to use a set of basic schedules to build a financial plan. I’ll be explaining these schedules, but first, a story to illustrate why the basics are so important.
I was lucky enough to grow up with a dad who taught me the value of not only smart financial decisions, but also of health and fitness. In my mind, there’s a lot of correlation between the two.
As a family, we went to the gym together. To this day, when I visit my parents in Des Moines, Iowa, we still all go to the gym together.
This habit of working out has served me well. I don’t have to think about it, it’s just what I do. For me, it’s the same with managing my finances. I’ve made it a habit to track what I spend and to save regularly. I don’t have to think about it, it’s just what I do.
Currently I work out at a gym called LA Fitness. They have a slogan that pops up on their TV screens throughout the gym, and a women’s voice exclaims it aloud. This slogan reminds me of how important this chapter is. She says, “What gets measured, gets improved.”
I hear this woman’s voice echo in my head all the time… “What gets measured, gets improved.”
Whether it be the calories you’re consuming, the number of days a week you work out, or the amount of money you spend, when you measure, things improve.
The first time I really experienced how measuring could impact my finances was about a year out of college. I downloaded Quicken, a program that tracks your spending by vendor and category.
“Holy cow,” was what I thought, as I realized I was spending $400 a month on what I called the “Walmart and Target” category.
Now, that may not seem like much if you are running a household with many family members. But for me, just married, a year out of school, living in a 700 square foot apartment, it was a lot.
I started to pay attention to my behavior. Let’s say I needed something basic, like a bottle of Windex. I’d go to WalMart, and come out with $100 worth of items. Most of the time they were decorative knick-knacks that

In this episode, podcast host and author of “Control Your Retirement Destiny” covers Chapter 3 of the 2nd edition of the book titled, “Social Security.”
If you want to learn even more than what there is time to cover in the podcast series, you can find the book “Control Your Retirement Destiny” on Amazon.
Or, if you are looking for a customized plan for your retirement, visit us at sensiblemoney.com to see how we can help.
 
Chapter 3 – Podcast Script
Hi, this is Dana Anspach, the founder and CEO of Sensible Money, a fee-only financial planning firm. I’m also the author of the books Control Your Retirement Destiny and Social Security Sense. CYRD was initially published in 2013, and the 2nd edition came out in 2016.
Why a 2nd edition? Well in Nov. 2015, some of the Social Security laws changed. The 2nd edition incorporates all these changes. The good news is that in this podcast, where we cover Chapter 3 on Social Security, everything we’ll talk about uses current rules.
And, even better news, the book has incredible 5-stars reviews on Amazon. If you like what you hear today, go to Amazon and search for Control Your Retirement Destiny. And if you are looking for a customized plan, visit sensiblemoney.com to see how we can help.
Ok, let’s get started. In this podcast, I’ll be covering the highlights from Chapter 3 on the topic of “Social Security.”
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I never set out to be an expert on Social Security. So how did it happen? From 2008 to 2017, I wrote an online advice column called MoneyOver55. My most popular topic was Social Security. I had so much content online on this topic that email questions came pouring in, not only from consumers but also from other financial professionals.
To this day, many of my colleagues call or email me with Social Security questions. While I was working on revising this chapter for the 2nd Edition of this book, I received one of those calls. It was from a friend of mine, a financial planner in Colorado.
She had a client, whom we’ll call Diane. Diane is a widow. Her husband, Paul, had passed away at 57.
Diane is now age 62. She is no longer working - but she had worked for most of her life. Here’s how SS works for Diane.
She is eligible for either her own Social Security retirement benefit, or a survivor benefit, which will be based on her deceased husband Paul’s work record.
Diane wasn’t exactly sure how it all worked, but she heard that she could collect a survivor benefit as early as age 60. Naturally, at 60 she went to the Social Security office to learn more. They told her she could collect this survivor benefit now, but that she would get more if she waited until age 62. Technically this was true.
Just before her 62nd birthday she went back to her local Social Security office. They told her now that she was 62 she could collect her own retirement benefit amount, which would be $1,791 a month. But they also said if she waited until 66 she could collect a widow benefit based on Paul’s Social Security, which would be $2,706 per month.  (This higher widow benefit is based on the amount Paul would have received if he had lived and filed at his age 66). Technically this information they provided to her was also true.
So, what was the problem with this information given to Diane?
If Diane decides not to do anything and to wait and claim a widow benefit at her age 66, she will forfeit up to $200,0000 that she can get over her lifetime.  This $200,000 is measured in today’s dollars.
$200,000!
How can she get so much more?
There are claiming strategies that the workers at the local Social Security office were not aware of. It’s not their fault. It takes years to understand all the claiming choices available - and this is not what your Social Security office worker is trained to do.
So what can Diane do to get $200,000 more?
Well, normally when you file for Social Security benefits you are deemed to be filing for all benefits you are eligible

In this episode, podcast host and author of “Control Your Retirement Destiny” covers Chapter 5 of the 2nd edition of the book titled, “Investing.”
If you want to learn even more than what there is time to cover in the podcast series, you can find the book “Control Your Retirement Destiny” on Amazon.
Or, if you are looking for a customized plan for your retirement, visit us at sensiblemoney.com to see how we can help.
 
Chapter 5 – Podcast Script
Hi, this is Dana Anspach. I’m the founder and CEO of Sensible Money, a fee-only financial planning firm. I’m also the author of "Control Your Retirement Destiny," a book that covers all the decisions you need to make as you plan for a transition into retirement.
The book has outstanding 5-stars reviews on Amazon. If you like what you hear today, go to Amazon and search for "Control Your Retirement Destiny." Or, if you are looking for a customized plan, visit sensiblemoney.com to see how we can help.
In this podcast, I’ll be covering the material in Chapter 5 on investing. We’ll continue the case study of Wally and Sally, and look at how the plan we created for them in Chapters 2 through 4 becomes the blueprint for how they should invest.
Let’s get started.
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When I meet someone new, almost without fail, the conversation goes something like this.
They ask, “What do you do for a living?”
“I’m a financial advisor,” I say, or “I own and run a financial planning firm.”
From there the typical reply is along the lines of,
“Oh, what do you think of the markets right now? What should I be buying? What are your thoughts on Apple stock? What will happen if so and so wins the next election? What should I be investing in?”
“You should be investing in a good financial planner,” is what goes through my mind.
Investing is like a prescription. It’s what you do after you’ve gone through a thorough exam and diagnosis.
This where I think most of the financial services industry gets it wrong.
Take a thirty-year-old as an example. They are investing in their 401k. They are nervous about losing money. They either fill out an online risk questionnaire or meet with a financial advisor - and this is supposedly the exam part. They express their concern about losing money if the market goes down. Then the diagnosis part. The computer model or advisor recommends they invest in a balanced fund that maintains an allocation of about 60% stocks and 40% bonds.
This is not a terrible recommendation - but to me - it seems like a recommendation made for all the wrong reasons.
At age 30, under normal circumstances, the earliest you can withdraw from your 401k is age 59 1/2 - about thirty years in the future. You would think the primary goal would be the investment mix that maximizes the potential for return over a thirty-year time horizon. Yet, almost the entire financial services industry focuses instead on minimizing the downside risk, or volatility, that you might experience in any one year.
Why? It makes no sense to me.
Why would I structure my investments to reduce short term volatility for an account I’m not going to touch for thirty years?
Contrast this with someone who is age 65 and about to retire. One popular rule of thumb says take 100 minus your age and that is what you should have in bonds. I’ve also heard a version of this rule that says take 110 minus your age. Following this type of rule, you come out with a 65 - 75% allocation to stocks and a 25-35% allocation to bonds. In many cases, it is the same recommendation made to the thirty-year-old. Is this recommendation aligned to your goals? It might be. But in many cases it still doesn’t add up.
For example, suppose in your plan you are drawing out of a taxable brokerage account first - then your IRA when you reach age 70, then your spouse’s IRA, and he or she is five years younger than you. Suppose you also each have a Roth IRA, but you don’t plan on touching that account at al

In this episode, podcast host and author of “Control Your Retirement Destiny” Dana Anspach covers Chapter 6 of the 2nd edition of the book titled, “Life and Disability Insurance.”
If you want to learn even more than what there is time to cover in the podcast series, you can find the book “Control Your Retirement Destiny” on Amazon.
Or, if you are looking for a customized plan for your retirement, visit us at sensiblemoney.com to see how we can help.
 
Chapter 6 – Podcast Script
Hi, I’m Dana Anspach. I’m the founder and CEO of Sensible Money, a fee-only financial planning firm. I’m also the author of Control Your Retirement Destiny, a book that covers all the decisions you need to make as you plan for a transition into retirement.
The book has incredibly thoughtful 5-stars reviews on Amazon. If you like what you hear today, go to Amazon and search for Control Your Retirement Destiny. Or, if you are looking for a customized plan, visit sensiblemoney.com to see how we can help.
This podcast covers the material in Chapter 6, on life and disability insurance. Both types of insurance can protect you and your family against risks that can derail your retirement security.
Today, I’ll be teaching you how to assess your insurance needs, and how those needs change over time.
Let’s get started.
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As a financial planner, I think of financial products as tools… perhaps in the same way a carpenter might view his or her own toolbox. You look at the job, you look at the tools, and you figure out which ones will help you most effectively do the job.
Insurance is a financial tool. Unfortunately, many of us have an instant adverse reaction when we think about insurance, or even hear the word. I believe this happens because most of the time our experience with insurance is associated with either a salesperson trying to get us to buy more, or a benefit selection page where we feel like we are just guessing as to which options to pick.
Overall, we don’t have very many positive experiences with insurance.
That means you have to do a bit of a mental shift to begin thinking about it as a tool. For example, what if you begin thinking of insurance like a seat belt? Then, you view it as a safety feature. Hopefully you never need it, but, if you do, you’ll be glad you got in the habit of buckling in.
Of course, it’s a bit more complicated than that - because the type of insurance you need changes as you age and as your financial situation evolves. Overall, though, both seat belts and insurance are there to protect you against a risk – a risk that you hope never materializes.
Let’s discuss how to think about this type of risk.
Any conversation about insurance should start by assessing your exposure to a financial hardship, as insurance is all about shifting risk. When you buy insurance, you choose to pay a known premium so that if a devastating event happens, the insurance company bears the bulk of the financial burden.
Not all risks are equal. Take the common example of your home burning down. Although unlikely to happen, if it does burn down, the consequences are severe. Therefore, if you own a home, you carry homeowner’s insurance. You choose to pay a reasonable premium to minimize the financial impact of such an event.
Contrast that with death. There is no argument that death is a high-probability event. There is no question of “if” it will happen – it’s only a matter of when. The severity of the financial impact, however, depends on where in your life cycle it occurs, and who is financially dependent on you at the time.
If you’re young, and have a spouse and children, your premature death is likely to cause a big financial hardship for your family.
But, if you are retired, and either single, or your spouse will have the same income and resources regardless of your death, then the financial impact of your death is minimal.
Thus, in your younger years, particularly if you have depende