Business Innovators Radio - Interview with Eric Liriano, CFP®, Principal and Founder of Liriano Wealth Advisory Group-Moving from Accumulation to Distribution Phases

Episode Date: April 23, 2025

Eric E. Liriano, CFP®, is the Principal and Founder of Liriano Wealth Advisory Group, LLC, with over 25 years of experience in the financial planning industry. A graduate of Boston College with a degree in Business Marketing and Communications, Mr. Liriano employs a distinctive macroeconomic approach to wealth accumulation and preservation.He serves a diverse clientele, including business owners, executives, affluent families, and professionals in academia. As a sought-after speaker, he frequently leads financial planning seminars for employees of major corporations, healthcare organizations, and educational institutions.His areas of expertise include estate planning, insurance, investment strategies, employee and executive benefits, and retirement planning. Through comprehensive financial guidance, he helps individuals and businesses secure their financial futures with confidence.Learn more: http://www.lirianowealthadvisory.com/Phone: [phone]Check the background of your financial professional on FINRA’s Broker Check.https://brokercheck.finra.org/individual/summary/1905998All content in this presentation is for information purposes only. The views expressed in this video are subject to change based on market and other conditions.  Opinions expressed herein are solely those of Eric Liriano.  Material presented is believed to be from reliable sources, however, we make no representations as to its accuracy or completeness. All information and ideas should be discussed in detail with your financial advisor. Content should not be regarded as a complete analysis of the subjects discussed.Investment advisory services offered through Liriano Wealth Advisory Group LLC., an SEC Registered Investment Adviser* located in Newton, MA and its representatives are in compliance with the current registration and notice filing requirements imposed upon SEC registered investment advisers by those states in which Liriano Wealth Advisory Group LLC maintains clients. Liriano Wealth Advisory Group LLC may only transact business in those states in which it is notice filed or qualifies for an exemption or exclusion from notice filing requirements. Liriano Wealth Advisory Group LLC’s website is limited to the disseminations of general information regarding its investment advisory services to United States residents residing in states where providing such information in not prohibited by applicable law.The Living Balance Sheet® (LBS) and the LBS Logo are registered service marks of Guardian. © 2005-2023 The Guardian Life Insurance Company of America.Online Terms & Conditions – https://static.fmgsuite.com/media/documents/b73e8f1c-12a6-4dc0-ac5e-b6bb81e5bea3.pdfOnline Privacy Policy – https://static.fmgsuite.com/media/documents/36a04efa-7d6f-4790-89b6-9cbc6de8d003.pdfImportant Disclosures – http://www.guardianlife.com/Disclosures/index.htmCalifornia Insurance ID # OC63111.Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/interview-with-eric-liriano-cfp-principal-and-founder-of-liriano-wealth-advisory-group-moving-from-accumulation-to-distribution-phases-in-planning-for-retirement

Welcome to influential entrepreneurs, bringing you interviews with elite business leaders and experts, sharing tips and strategies for elevating your business to the next level. Here's your host, Mike Saunders. Hello and welcome to this episode of Influeneral Entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have with us, Eric Liriano, who's the president and founder of Liriano Wealth Advisory Group. and we'll be talking about moving from accumulation to distribution phases in planning for retirement. Eric, welcome to the program.

Thank you so much, Mike. I appreciate the opportunity to be here and speaking with you today. Yeah, I am looking forward to chatting with you as well. And I know that this topic is super important because it's almost like a mindset shift. For so many years, we are striving and working to. to accumulate and build and grow, but there needs to be a shift sometimes to start looking as we get close to retirement in moving to that next phase. So where do you start when you are working with your clients and helping them become aware of that? No, that's great. You hit the nail on the head.

The issue is that we've all been taught and conditioned to think about contributions, contributions. they talk a little bit about dollar cost averaging, the importance of staying in the market, and something very important that is staying in the market when there's market volatility, and all of those things are great and work out really well during the accumulation phase, especially with retirement plans, but also with other savings accounts and investment accounts. And then when time comes to take distributions, a lot of those factors are a little bit different and they work differently. The math is just a little different and people have to change the way that they're thinking about retirement and how they take distributions. So why would you say factors change?

What would be an example of that? Yeah. So an example of this is what we have to take into account, well, we're taking distributions, the biggest concern that I have with clients is that of market volatility. You see, when we're investing, we're putting money in on a monthly basis, and the markets go up and down. It's not a big issue. You have to stay in.

You have to be disciplined. Now, when you're taking money out and there is a correction in the market, we have to consider that if we start with a million dollars, and that year the market goes down 20%. we're down to $800,000. And at the end of that year, we have to take money out because we're living off it. So if we pull out another $100,000, now we have $700,000 that will work to recoup and earn interest or profits when the market goes up again. So we don't have now a million dollars working for us.

We only have 700,000, and that can happen in a matter of, you know, weeks or months. You know, that's a really interesting point because at that moment, and it's not really like flipping a switch of going from accumulation to distribution. It's a transition, I would suspect. But what you just described there has got to be planned for because we never know when volatility is going to hit. It could be this month, next month, and then have a patch where there's not a lot of volatility. That would be disruptive. But the example you just gave makes me think of this. When you take a loss, it's one thing if you have plenty of years left to recoup that and you don't need to take money out.

But when you get closer to retirement and you take the money out, you have two things. Number one, you just took more money out because you needed to live. And number two, you have less runway to recoup that. What advice do you give your clients in that scenario? Yes, precisely. So a lot of the work that we do with clients is just having them understand that they should have different buckets of money. And some of those will be diversified with common knowledge in terms of, hey, some stocks, some bonds, some international. We have different exposures.

And then what we recommend is that we really should look at having some either fixed accounts or accounts that are guaranteed not exposed to the markets. so that when these corrections happened, we say, hey, you know what, may not be a good time to take money from our investment accounts, but maybe we take it out of this fixed account for this particular reason. So that's one of the strategies that we use for clients in helping them understand, you know, how things work during the retirement years or distribution years. Yeah, that's a really good point. and it's almost like having that good, you know, don't put all your eggs in one basket and having a good strategy that way.

Because then when you can say, you know, normally we dip into this bucket, but now we need to dip into that bucket and having that planned ahead of time. You know, like we mentioned, this is kind of like a mindset shift. How can individuals shift their mindset from savings to effectively managing retirement income when that comes? because like we touched on, it's not just flipping the switch. It's a process, right? Oh, absolutely. And then the second thing that we do with clients is helping them stand. Hey, now you worked hard for this money.

You worked hard to accumulate this money. And now it's time for this money to take care of you. And something that I always talk to clients and in terms of helping them shift their mindset is that if we have a million dollars in an IRA, we're not going to need it all at once. A lot of people have that mindset that, hey, you know, this is the money that I have and I'm going to need it. So if we start taking distributions, then we understand, hey, let's have a whole plan. We have social security income.

Some clients may have a pension. We have this IRA or retirement plan. So let's take a look at where the money is going to come first. We may have some Roth IRAs. We may have some rental income. So we take a look at this and it's creating a budget, just starting very basic and understanding how do we spend the money from which buckets do we take money first? And all of those things play a role in really having a successful retirement. But we really have to understand and think about that it's not a lump sum of money and it can't work the way that it was working during the accumulation phase.

Yeah, and I feel like you spend a few decades accumulating and then now you need to get into decumulating and it really is not as simple as going, oh, well, now all I need to do is this. When you mentioned Social Security, it made me think of a question. When we think about now distribution phase, that means, well, I'm now planning on being in retirement in a short period of time and now I need to distribute my retirement. my retirement assets, my my cash, so that I last as long as I'm, my life needs to last. And we never know when we're going to die. But talk a little bit about longevity and lifespan, because I feel like do we want our assets to last for five years or 25 or 35 or 45? And I think people are living longer these days, given, you know, the health care and taking better care of yourself and exercise. How does that factor into the distribution phase? Yeah, no.

Great point. You know, there are a lot of statistics. Obviously, we're living in great times of medical excellence. Unfortunately, a lot of times, you know, people live a long time. They may have health issues here and there, but overall, we'll be a longer understanding that we need to eat better. We need to exercise. statistics will tell people longer. So now men and women are living, you know, really 85, 88 very easily. And you're right. Some people, they live to age 95, 98, 100. I had a great conversation with a client a few years ago. And she was in her middle 80s. And I remember it was when Jimmy Carter passed away, I believe, at age 100.

He, I think, just made it to 100. So she had a real elevation there and thinking about that, oh, my God, you know, this man just lived to 8,100. And I'm 85 and I'm still healthy. I'm still moving around. I still feel great. So now she sees that and says, I have to really plan a little bit more than what she had in her mind before that, you know, maybe her mom passed away at 92 or her aunt passed away at night. you just never know. So when it comes to finance, then we have to take a look at, along with these different programs like Social Security, what other programs are there that can

help us accomplish the same things. And that's where we talk about those different buckets of money. And for some people, where we want to be sure that the income is there, month after month, year after year until the person needs the money, we create a bucket of maybe fixed and healing help in this particular case. And that is a part of our practice that has become more important as our clients are getting older. So 10 and 15 years ago, it's something that we didn't do a lot of. And we're just finding that we need to in order to take proper care of our clients and take care of that longevity issue that you mentioned. Yeah, that's a great point. You know, we've touched on a few of the points to keep in mind where you start helping your

clients begin the process of just embracing this new mindset. What are some of the other key challenges that you're finding your clients facing when making this transition? What are some of the questions that come up when you start making these points? Because if you have a client that's in their 40s or 50s, maybe you're not having. having these conversations in depth. But once you start getting 60-70s, maybe now it's, you know, the rubber meets the road.

Yes, no, absolutely. And one of the things that comes up a lot is just understanding, again, starting very with basic needs and budgeting, rebudgeting a lot of my clients in each group. Everything's changing. Their kids are really completely out of the house. Maybe they're not even helping out here and there. the, you know, grandchildren may be coming and being a little bit older so that the grandparents now are really taking care of themselves, clients.

And they may even not be traveling much, or if they have a second home, they may say, you know what, we only need the one home right now. So there are a lot of changes. So it's almost like restarting the financial planning process over again. And we say, okay, let's take a look at what is your budget now? where you're at, assets are in a way now. And also taking a look, you know,

dovetailing from that conversation that we have on the job, but taking other issues that can come up and the what is long-term care is another issue that we take a look at an issue, very important issue, especially depending on the area of the country where you live,

understand that inflation rates, be different in different parts of the country of the country in California, for example, the northeast. Inflation is higher, for example, some of the Western states, the south of state. It's understanding that. And with inflation comes also inflation on medical needs. That is something that expense are really going up in that area. And we help our clients really prepare for all of that. So it's really refocusing, re-establishing the relationship that they have with money in the new phase that they are in their life. And we work very hard on having clients understand that. You know, that's a huge, several big points you bring up there is the whole idea of just teaching and

educating. That's really big. It's not a matter of telling your client, you're going to do this now. it's teaching them and really bringing that financial education into play. And you mentioned long-term care, and that typically is going to be in the older years when you need long-term care. And that ties so well into the distribution phase because if you need money for long-term care, that's a high price tag. And that sure depletes retirement assets. So talk a little bit about how you're teaching and educating your clients to deal with long-term care, during that distribution phase. Very important topic, Mike.

Something that has happened over the last 10, 15 years is that the landscape and the industry, the long-term care industry has changed. Many companies came out 20, 25 years ago with some very incredible long-term care policies. People were able to buy long-term care insurance that would pay for care when it was needed. And what happened was, I believe that insurance companies may have mispriced these products.

And when claims started coming in, a lot of these long-term care insurance companies, they stopped offering these policies to new clients. Many of them went out of the long-term care business because it was really not sustainable. So it teaches us, A, is a real issue because the claims were too much for these insurance companies to handle. And B, we can't use that as a tool anymore. So we spend a lot of time speaking with clients about, hey, what else can we do for long-term care and how are there other products out there? And we help clients find some hybrid policies that maybe they are life insurance policies with long-term care benefits attached to it. And also there are some annuities there that

have some long-term care benefits attached to those that they would pay out a little bit more to help cover those costs. So those are all things. The major takeaway here is that the industry has changed. What might have worked for our parents is really not available for us today. And those long-term care insurance policies that may be available are very, very expensive. And then clients really have to take a look and say, hey, is this really worth it? Will it work out? And then if we don't need the long-term care policy, we would have paid all these premiums and not use it at all. So a lot of things there, obviously case-by-case basis, but a big, big issue and a lot of changes over the past 10 years that are having a very big impact today. You know, that's a really good point

you brought up about the high premiums typically, and what if you didn't use it, then it's gone. But some of the other options you were mentioning, like annuities and life insurance, if that is there in case they need it, it's a nice benefit. But if you didn't need the long-term care aspect of those products, then it's not wasted premiums, right? It's just a benefit of that tool. Yes, precisely, it's an additional benefit. And they pay them. higher premium, but the insurance companies and the annuity price these things, because, hey, we may not benefit the client in two ways. We're just going to benefit them in one way.

So they're able to price it very nice. One more thing, Mike, that I want to add, but sometimes, too, is understanding your situation and what, you know, how do we manage long-term care? And for some clients, they may have a lot of money. And we actually have dissected this very, very well. For my clients who may have $8, $10 million or more, they really don't have a long-term care issue. They have enough assets that they'll be able to pay for it. And then clients that maybe haven't put together a whole lot of money, there's always Medicaid that they can qualify for.

And the state will help them pay for a lot of these care. but it's for those clients in the middle, which is now going to be the majority of clients, people who maybe have assets of, you know, two to six million. And those are the folks that really have to think about this and work on this. And I tell them, let's take a look at what you want your money to do for you. And sometimes we just substitute, for example, a life insurance policy with a, with a long-term care need. And what I tell them is, hey, if you wanted to pass as much money as possible to your beneficiaries,

we can take some money allocated to a life insurance policy that will pay out when you pass away. But meanwhile, you can feel comfortable spending down some of your assets paying for your care and not really worry about it because you already left a legacy out there. That's one strategy, but we really have to understand. and the client has to have a nice understanding of, hey, what it is that I want my money to do for me and for my beneficiaries. You know, that's a really good point you bring up, and it makes me realize that there is never one solution that fits for everybody. You have to investigate and ask questions and assess what do they need, what do they want to be, what are the current assets, and here would be an option that you can educate them on. So I think that makes people feel good that you're never going to say, here's the,

option for you and then implement it. You've got to make sure that it's the right thing for them. Absolutely. And, you know, every family is different. We really spend a lot of time just taking a look at the unique situations that are our clients. We have a lot of different family dynamics. We have clients who may be selling a business and now they're turning that business again into an asset, into cash and how is that spent down. Their emotional ties to money as well, especially when it's a business, I find clients get very attached to real estate and just understanding after, you know, a point in time that, hey, it's another asset and it's there to take care of you.

And we have to make it so depending, again, on their particular situation. You know, kind of wrapping up this thought on moving from acute. to distribution, when you have, start having these talks with your clients at the appropriate age so that you have a plan put into place. It seems to me that it gives just a nice piece of mind and security knowing that this is in place and knowing that if certain variables happen, then you've got a plan to go this way or that way. And it just helps you and the client make wise choices because you're pre-planning versus reacting if something comes up. So, Talk a little bit about the peace of mind aspect that that really helps them out seeing that blueprint.

Yes, you know, Mike, we live in a world now when there's so much information available. And a lot of my younger clients, even my older clients, they maybe attempt to do it on their own. And there is, again, a lot of access. There are great companies out there to cater to, you know, what we call it, do-it-yourself client, and Vanguard and fidelity and so forth. But when things change and when we have to sort of take a little bit of a reset, it's just good having guidance, having someone who does this for a living day and day out and saying,

hey, what if we took some time and had a written plan, a guide, a roadmap on how we're going to get there? And then what you say, when you said really comes into play, in terms of now I have peace of mind. I know what's going to happen. I know where my money is. I know how it's going to take care of me. And I know that I have some money that's growing,

maybe for my beneficiaries who are investing more aggressively. But I know that my needs, my month to month, will be taken care of. And also my play money, that if someone has a goal of, hey, I do want to buy a boat, that they're able to do that. And hey, we have a bucket of money designated to buy that boat or whatever it is. So they want to do extensive travel.

So knowing that we have our secure money, our monthly income taken care of, and then we have our play money that we know that we can just take and spend. And if someone has a goal and they say, I like to have a new car every five years, well, we're going to set aside funds that will generate. a certain sum of money every five years for our clients so they can accomplish that goal. And I think once they have a written plan, you're absolutely right. The peace of mind is what comes through.

And that's really the value of the relationship that we have with our clients. Yeah, well, Eric, this has been so helpful to kind of get a glimpse into how you're serving your clients, helping to educate them in this transition from building and growing to distribution. So if someone is interested in learning a little bit more about what you guys do and reaching out and connecting with you, what's the best way that they can do that? Oh, thank you, Mike. Yes, people can reach me by phone or by email. They can visit our website. The office number is 617-969-29-29-33.

And then I will give you my website, which is lariano wealth. And my email is eLeariano at lorianowealth.com. Excellent. Well, Eric, thank you so much for coming on. It's been a real pleasure chatting with you today. This has been great. Great conversation. Very nice to speak with you on this topic.

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