Finishing Strong Financially, or Old Dawg Learns New Tricks?
By John Checki Jr. and J. J. Checki III
Years ago, a friend gave me a call to let me know his employer had decided his last day would be ending in three months, after 32 years of continued employment and service. He asked if he could come by for a visit and bring along a couple of other engineers in the same situation. I replied, “Sure, love to see y’all.”
That was 14 years ago. He and his wife are still happily retired and the strategies worked the way we had hoped they would work, despite 9/11, the crashes of 2000-2003, 2007-2008, and children’s marriages, mission trips and grandchildren, a heart condition, and a short list of health-coping opportunities. That was then and still is now. Usually it takes a good three years for anyone to realize that golly, Miss Molly, this is actually working the way we had hoped and prayed it would work.
Let’s outline the problem. Show how we address the obstacles, explore the solutions, illustrate the issue, and summarize what we did. Okay? Also, we’ll mention a new trick I just heard of today.
The Problem: Not Working For Money & I Still Have Living Expenses.
Oh, boy. We have been waiting all our lives to identify and address this particular situation. We are well-seasoned (older), not quite as energetic as we once were but still have life and lifestyle, assets, debts, habits, bills, perhaps a car note, or mortgage, or who could imagine, student loans. It boils down to cash flow, in and out of our checkbooks, and related asset accounts, along with our habits, obligations, expenses, and debts. Some people know their expenses and income, others don’t. This is a good time to take a look and thanks to modern inventions augmented with computers, the banks, our debt holders, credit cards and the like are keeping our books for us, except when we ATM cash and whoops, no one knows where that money goes.
Then, after we have a clue of what we own, owe, and flow, we have a good start. It begins to make some sense. Help is available with these steps, locating the numbers, determining who owns and owes what to whom, and when, what living expenses usually are, unless it hails and we need a new roof, or the car(s) need repairs, or air-conditioning/heating system or windows are about to be replaced. Those are nonrecurring expenses in most of our lives.
So, we now know our budget and the sources of positive cash flow (could be social security, pension, business income, investment income, oil royalties, real estate income, farming income, and perhaps even earned income) and know what our expenses are and what is in good repair and what is on its last leg and in need of repair. Oh, yes, we would also like to travel, since we actually have more time and flexibility in our schedules. We might have some goals to go along with our needs, expenses, wants, and wouldn’t it be lovely if we could have the money to travel to dream destinations, eat at nicer restaurants, escape the July and August heat, etc.
Addressing the Obstacles
Golly, we might not enjoy this or that? Getting that call from our boss. Big announcement: early retirement. Or when health deteriorates, taking us from work to doctor-to-doctor appointment misery. Or the business just winds itself down and we are out of a job, if not a career. Or our jobs have moved to a place we do not want to go and are not prepared for the now of it. Yes, some have been planning this since we were in our teens, others have engaged experienced professionals to help not just plan, but plan and implement the plan. The major obstacles seem to be not knowing, what we would like during this stage of our lives, and/or having a natural distrust of anyone or everyone who offers to help us with this, or a really souring experience which has colored our thinking and perception for the rest of our lives until now.
May We Please Have A Solution?
Let’s start with your ideal outcome. Think about it and write it down. I say write it down by hand if you can read your writing, because that seems to stimulate thinking, feeling, and imagining. If not, type it and save it. We are looping back to listing assets (what we own), liabilities (what we owe), which could be our balance sheet. Then list income, all sources, as we mentioned earlier. List your expenses along with your debt payments.
This will let us know what we have to work with now and in the future. The next step in my opinion is allocation, and allocation usually boils down to asset classes, very popular with portfolio managers. Yet there is more to allocation than stocks, mutual funds, ETFs (Exchange Traded Funds), bonds, money market mutual funds, and all flavors of real estate, royalties, and businesses. There is tax diversification as well. Oh? In my opinion tax diversification, is part of advanced planning, along with other wealth enhancement techniques, like relationship management.
We like using tools like retirement calculators, mind maps, graphs, charts, a professional team (CPA, estate/private client attorney, and high-end property and casualty professional, risk planner, and registered investment advisor.) Great discussions ensue, they have been helpful and on point.
So, consulting with experts, no matter how experienced we are, is as essential as getting started on thinking or worrying about the non-working for income stage.
Illustrate the Issue
The question? How do we pay our bills and just how much can we afford to spend during our retirement without running out of money and becoming a burden, and can we leave some legacy to our family as well? We ask a series of questions during our initial interview so we know your values, goals, hopes, dreams, beliefs, your family and friends, and professional relationships, along with what you own and what you owe, how you communicate and how you like to work with your consultants and advisors. Then we present you with a Mind Map to make sure we heard you well. Then see if we have a fit as the right advisor for you and you the right fit client for us. If it is a go, great, we draft a plan of action, map that out and help you get started.
Of the three engineers that came into our office, our friend and his wife and family were the right fit and are all clients these many years later.
Summary
Establish a plan, by analyzing where we are and where we would like to go. Line up the resources, form your team of advisors, take action to transition from where you are toward pursuing your goals.
The new trick? HECM. I had not heard that term until earlier today and I will continue my research and get back to you on that. The Home Equity Conversion Mortgage is a revised technique with several intriguing applications. As I said, more details to follow. And, no, we will not be going into that business. We would have an expert join the professional team and have them work independently.
Securities are offered through Securities America Inc., member FINRA and SIPC, Advisor services offered through Securities America Advisors., an SEC Registered Investment Advisor. John Checki, Jr. Representative. This is not a CPA Firm.
John Checki Jr. and his firm have been helping some of the nicest families in North Dallas, Richardson, Plano, and Frisco for about 30 years. They specialize in Baby Boomers Wealth Management and have a unique and complete Wealth Management Process. You can read the rest of their story on their website. (John’s proudest accomplishment is his family: Children, Grandchildren and Wife.) They love family and to travel, scuba dive, take pictures, study, and attend church gatherings.
