Business Innovators Radio - Pete Tychsen, President and Founder of Preservation Financial Group Discussing Time Bucketing in Retirement

Episode Date: November 12, 2024

Pete Tychsen is the President and founder of Preservation Financial Group in Tallahassee.Pete has been helping local residents plan their retirement since 1996 and focuses on the areas of IRA/401(k) distribution, tax strategies, asset protection, and income planning. Pete’s approach has helped his clients:• Avoid needless taxation on IRAs/ retirement accounts• Protect their principal and create a secure retirement income• Avoid unnecessary risks with their retirement assets• Use Retirement Plans to build a lasting legacy for children and grandchildrenPete regularly conducts seminars on a variety of financial topics to groups including Executives, Educators, Government and State employees – as well as to the general public. Pete is author of Retire Worry-Free: Your Guide to A Simpler, Safer Retirement.Pete is an FSU Alumni and lives in the Tallahassee area with his wife LeAnne and their five children, Andrew, Anna, Arden, Christopher, and Sarah. When not working to help secure the financial future of retirees, Pete enjoys involvement at his church, fishing, hunting, and spending time with his family.Investment advisory services are offered through Gibbs Wealth Management, LLC (Preservation Financial Group), a SEC Registered Investment Advisor. Insurance products and services are offered through Preservation Financial Group. Gibbs Wealth Management, LLC (DBA Preservation Financial Group) and Preservation Financial Group, are unaffiliated companies.Learn more: https://www.PFG12.com or https://www.preservationfinancialgroup.comThis interview includes opinions and insights that do not guarantee any specific investment outcomes. Past performance is not indicative of future results. All investing involves risk, including potential loss of principal. The IAR in this interview may benefit from certain products or services discussed. Please consider this potential conflict when evaluating any statements. This interview is for informational purposes only and does not constitute an offer to sell or a solicitation to buy any securities. Gibbs Wealth Management is an SEC-registered investment adviser. Please consult a financial professional for personalized advice.Influential Entrepreneurs with Mike Saundershttps://businessinnovatorsradio.com/influential-entrepreneurs-with-mike-saunders/Source: https://businessinnovatorsradio.com/pete-tychsen-president-and-founder-of-preservation-financial-group-discussing-time-bucketing-in-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 Influential Entrepreneurs. This is Mike Saunders, the authority positioning coach. Today we have back with us Pete Tyson, who's the president and founder of Preservation Financial Group, and we'll be talking about time bucketing in retirement. Pete, welcome back to this.

the program. Thanks, Mike. Glad to be here. Hey, so I know we talked previously about your bucket strategy and where to put your money. Now we're talking about where to put our time. So I'm excited to hear about your views on time bucketing. Where do you start with your clients when you talk about this concept? Well, that's a great question. And before I go into that in more detail, which I'm happy to do, I wanted to refer to a book that I read recently because I think it helps format. at how to set up your time buckets. And this is a lady from Australia. I believe she was a hospice nurse or something like that. And her name was Brani Ware. And she wrote a book called The Top Five Regrets of the Dying. So this is the top five regrets, Mike, that she recalls from spending a lot of

time with people who are soon to be passed away. And let me go through those with you. And because I think this is so important and how to set up your retirement years and to maximize them and enjoy them the most. So let me read these to you. The first one is I wish I had the courage to live a life true to myself and people just wanted to really be who they really are. And that was a deep regret of a lot of people feeling like they had to do something or to please other people. The second one is maybe as a surprise, especially to us Americans. It says, I wish I hadn't worked so hard because some people who have worked so hard have really paid a price. I was always taught to work really hard. My parents were immigrants from Denmark, and my dad was a bricklayer and a small general contractor,

so my dad works six days a week. And so I was always taught to work, work, work, and I love to work, and I love to work hard. But there's what we're going to talk about is there is a place for balance. So the second thing on here was, I wish I hadn't worked so hard. The third one, Mike, is I wish I had the courage to express my feelings. Some people have felt like they couldn't really, again, be who they really were, be their true self, and really express their feelings. Number four, I wish I'd stayed in touch with my friends. They feel like there's people that they loved and cared for. They lost touch with them. And that was really hurtful for them. And number five, is I wish I had let myself be happier.

I wish I could not only express myself, I wish I did more of the things that I really wanted to do and be who I really wanted to be and be happier. So let me just repeat these and then we'll jump into the time buckets. The first one was, I wish I had the courage to live life true to myself. Number two, I wish I hadn't worked so hard. Number three, I wish I had the courage to express my feelings.

Number four, I wish I'd stayed in touch with my friends. I wish I had let myself be happier. Number five. I'm sure you can identify with some of those things, can't you, Mike? Yeah. Yeah, those are pretty powerful, especially knowing how they came about a hospice-type nurse going, what are your regrets?

Right, right. And it's really sad, but very important for us to hear that to see what things we can improve upon. So I have another story for you. This is a true story. I've changed the names. I'd like to run that, go over that with you, okay? This is a story about Tom and Linda. And again, this is going to transition into our retirement buckets. And, you know, Tom and Linda, they were in their 60s. And Tom worked at least. He started his career right after college. And he'd been with the same company for over 40 years. He was very dedicated to his job and his family. He was very dedicated to his job. He was well respected, known for his dedication, and often stayed late to help his team meet deadlines. And, you know, his work ethic paid off. It allowed him to save a healthy size nest egg for the retirement. And Tom and Linda, they had big dreams about the retirement. They planned to travel the world, learn new skills, spend time with their children and their grandchildren. They even

made a retirement bucket list with adventures like hiking in the Rockies, taking cooking classes in Italy and volunteering together. Because of their commitment to saving, they, but really mostly Tom, often postpone these trips and experiences until retirement, saying, well, the road. You know, Tom was kind of the old school guy, Mike, and he always said to Linda, someday, honey, we're going to have all the time in the world to travel and do all these things we've been talking about together. He put off vacations saying they'd be too expensive at the current time or interrupt his work schedule. He'd often say to Linda,

just give me a little more time to finish some things up, and I will retire, and we will be able to do these things together. And, you know, one time, while Tom was still working, he thought about taking a big trip out west to visit his brother in Wyoming

and to see the national parks at the same time. But he said to Linda, you know, honey, let's just wait until I retire, and then we'll have more time to stay out there and do all the things that we're discussing.

Unfortunately, just two years before his planned retirement, Tom was diagnosed with an aggressive form of cancer. He fought bravely, hoping he would be able to recover and still experience a life he'd spent so many years planning. But the illness progressed faster than anyone expected, and sadly, Tom passed away just a few months later. Even sadder, after Tom's death, Linda found their retirement bucket list. written with all the dream destinations and experiences they hope to explore together. She really wished that Tom, she really wished she impressed Tom harder about retiring so they really could have gone on some of these trips and had some of these experiences together.

I'd say the big takeaways from this story and from retirement planning and the time bucket planning we're going to go through is Tom and Linda's story is a sad reminder that life is unpredictable. retirement planning is essential, but balancing saving and living fully is just as crucial instead of waiting for someday down the road. Tom and Linda's story teaches us the importance of incorporating small moments of joy, passion, and dreams throughout life rather than deferring them all to the future, which isn't guaranteed. And the story also shows the importance of finding balance between saving for the future

and experiencing life along the way right now. Embracing today's opportunities and creating memories now is just as valuable as planning for the golden years ahead. Any thoughts on that, Mike? You know, regret, time. I mean, those things just stand out just so strong. And, you know, I've said so many times in my personal life to my family, we have to maximize the moments.

Yeah, well, we sure do. because we only have so much time, right? And we don't know when that time is going to end. There's another book written on this topic, which is excellent. We'll talk a little bit about it. It's called Die with Zero written by Bill Perkins. And he's got some great ideas in here. And some of the ideas I'm going to share are his.

Some of the ideas are mine or things I've read other places. But this book, Die With Zero by Bill Perkins is very, very important. And I think it really fits in to time bucket planning. And one of the things that he says is he talks about spending money for experiences. And he calls it an experience dividend. So it's not something you just invest and you make dollars or rates of return. The experience is the memory and all those that you touch along with it. We talked earlier, Mike, on another podcast about that couple out just recently saw who are taking over 30 family members on a cruise to Alaska.

And they're using some of their money now. They want to do it while they have some of their health now. They don't want to just always put it off because just like Tom and Linda, you might not get that chance. And that's what is the big concern for human beings like you and me. Would you agree with that? Yeah. You know, I've even heard someone say, you know, don't wait until quote unquote retirement to do all that travel in, all the things. Because you never know what will happen.

Your health might decline. You should structure your life so that you take these little mini retirements, maybe take a month off and go and do that fund. thing that you always thought you'd want to do, then come back and go back to work. And so I think that it all relates so much to time. And I really like where you're headed with this time bucketing system. I'm excited to see what these buckets are. Yeah. So let's just, and you don't have to use these buckets exactly, but let's just try to get your thinking and writing down things and taking notes and seeing if you can implement some of these things to go along with your financial retirement planning to really help you enjoy it. And like Bill Perkins said,

build some of these memory dividends with your loved ones, with your friends, with your family. So one of the things that we could look at is let's say our first bucket, you know, we have the financial buckets. We did that on a different podcast, but this is like the time buckets. So the first bucket here, Mike, is like age 60 to 70, just for example. And people can adjust their age. Maybe they're already 65 and so they would adjust the first bucket. But let's just stick with this example. These are the more active years in the first time bucket. This is early. early retirement, early in the retirement, age 60 to 70, the active years. We'd also call this the go-go years.

This might be the years where you're spending time with your kids and grandkids and taking them to theme parks and taking them out for ice cream or walking in the park and you're spending time loving on those grandkids and how important it is because, like we said, well, we don't know if we ever get that time back or we ever get that time to do this again. Some of the other goals that are popular in this first bucket, Mike, the 60 to 70, the first bucket, the active years, the go-go years, is people tend to travel more extensively. Check items off their bucket list. If they're hikers, they're probably going to do this more in their 60s, then they will in their 70s and their 80s, right? Just a common sense approach.

But a lot of popular things that people do, hiking, golfing tennis, other fitness routines, spend more time with family and friends, building memories. with grandchildren, maybe exploring volunteer work, and people have their passions about what things they want to do there. Now, the financial considerations to the first bucket, Mike, is you're going to be more likely to spend more money, obviously, because you're probably, if you're a traveler, you're going to take those trips more in your 60s and maybe early 70s than you will later on. So hobbies and travel and dining out, this makes this more popular or higher amount spent in the first bucket. Most people for their income sources have, they begin drawing on their 401ks and IRAs, like we just talked about in another podcast having a retirement income plan in writing,

but people are drawing from their investments, taking Social Security and a pension if they need it. Also, you've got to make sure that the health insurance is taking care of if you're not on Medicare yet. So from 60 to 65, if you're a young retiree, that's usually an issue that people have questions on. Yeah, go ahead. Oh, I was just agreeing. I agree. That sounds really good.

Yeah. So then the second bucket, the second stage, Mike, would be kind of the mid-retirement years. We just picked ages 70 to 80. These years are maybe a little slower go years. You know, the first bucket's the go-go years. This is a little bit slower go. This is more of the balanced lifestyle years. You know, in this bucket, energy may start to decrease because we all get older.

Health concerns might. be more common. People often shift from high-energy pursuits to more balanced, slower-paced lifestyle while still enjoying life actively. What are the goals for, what are common goals for people in this second time bucket? Still focusing on family time, such as spending more time with grandchildren, some people have great grandchildren, attending family events, or being an active part of your community. You want to make sure to engage in low-impact hobbies if you're having some problem. A lot of us have problems with shoulders or knees or hips. And the lower impact hobbies get more popular here, Mike, like gardening, reading, creative arts, or even like

travel. You start to scale back on more physically demanding activities while maintaining an active social life. Another thing to consider some people discuss that we see a lot of folks do is they consider downsizing their home or moving to a community that better fits their changing needs as they get older. The financial considerations in this second bucket, the 70 to 80, the balanced years, is sometimes there's still some travel and discretionary spending may decrease or other expenses they might have are more common now, like health care or home maintenance. Those things could start to rise. These folks are usually collecting Social Security, and of course they've got to start their required minimum distributions at age 73 out of their IRAs.

401k's and qualified plans. So that's a big thing, required minimum distributions. You have to take that money out and pay taxes on those withdrawals, but you can use them to supplement your income. Healthcare could become, again, more of an issue when you're considering supplemental Medicare plans and budgeting for any out-of-pocket medical expenses. So that's the second bucket. The first one was age 60 to 70, the go-go years. The second one was the slow-go years, age the second bucket, 70 to 80. And then let's talk briefly about the third bucket, the later retirement years, the 80-plus. Some people call them the no-go years. And that's not always true, but that's just what some people call them. And so these are more of their reflection and care years. In this phase,

health and mobility may limit activities, and the focus often shifts to comfort, legacy, and ensuring a peaceful, secure environment. This bucket focuses on maintaining quality of life and ensuring that health care needs are, of course, always met. The goals here, Mike, are prioritized what we're trying to do and help people here, prioritize their peace, their comfort, and their relaxation, enjoy quiet time, personal reflection, less physically demanding activities like reading mentorship, engage in legacy planning, such as ensuring estate planning,

wills and trust are in place. Always want to make sure those are a place. And leaving meaningful contributions, financial or otherwise, to family or charitable causes. As a matter of fact, I think one thing that's really important in this book,

Die Wood Zero, by Bill Perkins, is he's talking about giving some money to your kids and grandkids before you pass away. So if that's appropriate, maybe they're a responsible, young man, young lady, child, that you're encouraging them. You can do something together while

you're alive. You can spend time with them. You can discuss it, maybe help them, mentor. But giving away before we pass away is something I think people should strongly consider having fun along the way. You know, I love how you keep mentioning having fun and enjoyment and the example about the one client that wants to take everyone on that cruise or giving money before you pass away, you know, when applicable, you know, you can't always have fun and be, you know, carefree because you got to have time to be serious and get to work and plan and all of those things. But I think that we need to keep that in mind. And then like what those examples about taking time now to maximize those moments of maybe

you do go on that cruise. Maybe you don't leave them a bigger chunk of money so that they can go on the cruise. Go on right now. I love that. Yeah, it's really the goal is so that while you're alive and smiling and hugging them and helping them, maybe it's with a car. Maybe it's to start a business. Maybe it's to buy a piece of equipment to start a business.

It's something that you feel is important and you feel like the child or the grandchild is a good fit for receiving that gift. But it's just something to consider instead of us dying at 80, 90, or 100 and leaving something to a 60 or 70-year-old. it's nice to consider leaving something to them while they're younger and they have a bigger need for it. Maybe it's a daughter with children. Maybe it's a son with kids. Just helping while we're alive. We're in the moment. We're there where we can enjoy the moment and the satisfaction you get from actually helping that loved one out.

I think it's just such a big deal. Yeah, love it. I love the three buckets, too. The go-go, the slow go, and the no-go. Because it really does make sense. It's easy to remember, but, you know, when you, you know, get to retirement, now remember, like I remember what you said, it's not just getting to retirement, it's getting through. And we're now talking about the through stages, the go-go. You're already retired, but now you're a little bit more nimble and you can go and travel.

But then the next stage in getting through retirement, you're starting to slow down and then maybe that last stage there that you're talking about. Now we really need to, you know, say we can't travel as much as we used to. makes me think of how do you structure some of the financial planning and income and buckets that correlate to these time buckets? Yeah, and we covered that in more detail, but let's go over a summary of that because the financial buckets do coincide with the time buckets. And we talked about three bucket planning strategies, three different buckets, the blue money for the short-term money in the bank, the green money that's safe, guaranteed, and

protected that might be with an insurance company or a bank, and then the red money, the long-term money that's in the stock market for growth. But if we have enough money in the blue bucket, money in the bank and the protected income bucket, the green, if we have enough money there, what in essence it does, Mike, it buys us time. It buys us time to let the volatility of the market go up and down and not bury us, not hurt us. So we design an income plan from the safe buckets that will hopefully get you through at least 15 years. And so the stock market money can then grow. And then later on, we take money from the red bucket, the stock market bucket, and pour some of that and refill the green and blue, the short and medium term buckets. And all of this is helping to

coincide with the time buckets. For example, if you're going to go on more vacations and spend more money in your 60s, let's plan, let's do the bucket planning of time and the finances. So they coincide together with that. Yes, 100%. Just need to mentally see how things start to segment down from your financial buckets to your time buckets, to these stages, how they should connect and correlate. And again, through your planning and having that in writing and having those annual or semi-annual reviews, let's just make sure that everything's tweaked and polished and humming right along. You can't just set it and forget it. But I love these time buckets of things that you need to be aware of.

And you know what? Maybe you're in the slow go-go age bracket, but you're still feeling go-go. So fine. That's wonderful. Yeah. And, you know, going inside the talk of the buckets, the three time buckets, and then the three investment buckets, the short, medium, long term. There's one other really important piece here. I just want to mention to you.

And that is a lot of people that we talk to. on the phone or virtually or in person, they often have what I call more of like a junk drawer financial plan versus a true financial plan, meaning most of us have a junk drawer in the kitchen where there's just a bunch of stuff in there that's very random. A lot of people's financial plan is like that. They've got this account. They've got that account. This is over there. This is over here. They don't know the fees. They don't know the expenses. They don't have an income plan. It's just kind of all thrown in a bucket. And what I really think it makes more sense is to designed your accounts so that they flow and work together. One could draw the analogy of a symphony.

If you've been to a symphony and you go there early, you hear all these instruments warming up and practicing, and it could sound like cats and dogs fighting. But once the conductor steps out with the stick and takes control of everybody, everything playing in unison, it's a beautiful, melodious sound. And that's what we want to make sure to do with people's money. We want things to work together in unison, whether it's by risk or your bucket list dreams, your time buckets, and then make sure you have a retirement income plan in writing, and you also have a true financial plan and not just a basket or a junk drawer of financial products. Yeah, I love it. That's so, So true. When you start working with your clients and explaining this time bucketing, you know, plan and system, what are some of the misconceptions that they typically have? And then you need to just kind of make sure that they're moving along the path the right way. How could people avoid any kind of slow down or mistakes when setting up or keeping their time buckets moving forward?

Yeah, that's a great question. I'm going to tell you what I think one of the biggest problems are for people like the way I was raised. and many other folks. And that is that I think some people have a very difficult time enjoying some of their money and enjoying it now. Now, there are plenty of people that don't have that problem, but if a lot of people are listening to me are listening to me right now, they say, yep, my husband is just like that, or my wife's just like that, or they know exactly what I'm saying.

There are some people that have worked hard for 30, 40 plus years. and as we're doing planning, I want them to not go wild and spend and waste all their money, but I want them like to have a little fun along the way. Maybe it's to buy a new vehicle. Maybe it's to go on this vacation. Maybe it's to redo the kitchen. All these things are so important.

And the problem is that if you don't enjoy some of it now, most likely your kids will enjoy it and they will spend it very quickly, is what the statistics say. So I would say one of the biggest problems is, I want to help people to do the bucket planning for the finances and their time bucket for all the fun stuff, time buckets, but I want to make sure they're enjoying their self now while they're ready and able to do it. I love it. So you kind of wrap it up with a nice bow that way. And it just makes me think of how you got those financial buckets you need to be aware of and tweak and your time bucket to be aware of the tweak.

Put it all in writing and check it and make sure that it's working the right way so that you can step away, feel confident that it's going to work, give you that piece of mind, and have a little fun all the way through the process so that you now are enjoying life and retirement. retirement and it shouldn't feel like such a drudgery and pulling up your account statements every 10 minutes going what changed in the last hour. That's not the way that you need to live life. I just love how that that feeling is projected through your process. Yeah, let's make it simple and have more fun. It's not it's not super hard to do it. It's just a matter of doing it. Yep, I love it. Well, Pete, if someone wants to get their time buckets outlined and in place, what's the best way that they can reach out and connect with you? Okay. They can go to our website. Preservation Financial Group or that's Preservationfinancial Group.com or go to YouTube and look up

balanced retirement planning. Excellent. Well, Pete, it's been a pleasure talking with you again. Thank you so much for coming back on. Thank you, Mike. Appreciate it. You've been listening to Influential Entrepreneurs with Mike Saunders. To learn more about the resources mentioned on today's show or listen to past episodes, visit www. www.Influential entrepreneursradio.com.