What to Do If You Lose Your Job Right Before Retirement

like you can't waste away your life.

You have to be focused on what's going to get you out of bed

and give you purpose in life.

Welcome to the Retire on Time podcast.

I'm Mike Decker, who are David Francin.

This show is all about getting into the nitty-gritty

and not just talking about the over-simplified advice

you've heard hundreds of times.

Text your questions to 913-363-1234

and we'll feature them on the show.

As always remember, this is not financial advice.

Just information, education, do with it as you will.

David, what do we got?

Yeah, hey, Mike.

I lost my job, no matter who they worked for.

I think I can afford to retire,

but I don't know what I don't know what to do.

How would you build a plan that allows me

to go back to work every now and then?

Okay, so the last thing you want is lifetime income

in this situation and here's why.

If you're going to go back to work.

Okay.

Then why would you turn on lifetime income

from an annuity, which isn't necessarily a bad thing.

Annuities are just tools.

I know I write about it in the book

and complain about it and all of that,

but it's just a tool, but it's the most basic tool that I see.

So lifetime income would be terrible for this situation

and the reason is if you go back to work,

now you're earning income

and you've got this lifetime income,

your taxes are higher than needed.

I mean, it's just kind of an inefficiency.

So what you need, potentially,

is to be able to say, okay,

maybe you need like a two year rolling,

two to five year rolling kind of reservoir

or bear market reserves.

So the bear market reserve is in case the markets go down,

how do you take income?

Okay.

Your plan needs to be very dynamic

with short term reserves to just bridge those gaps.

But if you don't know what to do, except for work,

you should not retire.

And the reason is work gives you purpose,

it gives you fulfillment,

it connects with other humans.

It hopefully does, hopefully it's a good enough work environment.

So if you take a year off

and then go back to the workplace,

that's a really healthy thing to do.

If you become a consultant

and take a month work here

and a month of work there, whatever it is,

that's a very healthy thing for you to do.

Don't retire because everyone else

is sitting on the golf course,

getting drunk and wasting away their life.

I'm not saying all golfers do that,

but it's the cliche analogy.

Or you go out on your boat and get drunk on the boat,

which you're not supposed to do

for voting license laws, but people do that

and just waste away your life.

Like you can't waste away your life.

You have to be focused on what's gonna get you out of bed

and give you purpose in life.

Because if you're not getting a healthy amount

of oxytocin serotonin and dopamine,

you're going to feel sad, lonely and depressed.

Work when you accomplish the task,

when you hit the deadline, when you close the deal,

you're getting oxytocin,

you're connecting with people

through all those interactions

and you're getting a dopamine because of that wind.

And then when you don't win, it's sad, but that's okay.

It's good to have a few losses in life too.

It's good to have a few no difficult moments

causing you to work.

The oxytocin's that sense of happiness

that you're enjoying, you're laughing with people,

that you're connecting with them.

All humans are hardwired to connect.

We need to connect.

And you don't connect by doom scrolling on Facebook

and on Instagram or TikTok or even YouTube

or whatever on Reddit's really bad

for the doom scroll or X or wherever.

You're not gonna connect with anyone.

There's a reason why depressions have skyrocketed

the depression rate.

So like the last thing, or she says,

I lost my job but I don't know what to do.

Find another job.

But position your portfolio that you can bridge gaps

regardless of market conditions.

And that can just be having a couple of treasuries

that roll over every now and then.

Or having a couple of migas that just,

it's at a fixed rate a year or two or whatever it is.

Maybe not so much for migas for this person

because they would need it now.

Maybe some bufferity to you have.

So maybe a CD ladder that just kind of rolls over,

what it might be.

But you wanna have like one or two years of income

that you can, that you're hedging against.

So if you go two years without a job, sucks.

But at least if the markets didn't go down

you're accentuating those losses because you were surprised.

That's really it.

Is building a more dynamic plan

instead of these 10, 20 year long income plans?

It's like, oh, I wanna go back to work.

Okay, great.

What's the salary you think you will easily be able to make?

I think it's 60,000 or 100,000 or 30,000 or whatever it is.

Great.

Let's put that in here.

Let's say you're gonna not work for one year.

Maybe you'll work sooner than that.

And the next year we're gonna start that salary

and we'll do it for another three years

and you'll keep working.

Great.

And you solve it all in a very dynamic way.

So it's if this happens, then you do this.

If that happens, then you do that.

That simple.

Very AB.

I mean, that's binary.

Yeah, binary would be all the way to two different.

Simplify down to two different ways

you're gonna approach each year.

But keep it open.

Liquidity is your friend.

Flexibility is your friend.

You might consider if you are like 60, 65 years old,

if you do want some security,

you could ladder things out,

but just keep it within the buckets.

So let's say you ladder some things out

like structure note in an IRA

that pays out into the IRA.

And so if you need it,

then you're just taking the income.

And if you don't need it,

it's just growing the dollar amount in the IRA.

You could do stuff like that as well.

Okay.

But you don't want to necessarily turn on income

or forced distributions because if you work,

then it's tax inefficient in that year.

And if you're not working, well, it's there,

but it's just that's rigidity when you need flexibility.

Yeah, so this kind of sounds like

if you are gonna work whether or not you're going to work

that's going to affect your tax situation.

So you need to, you don't want to have

a retirement plan that assumes you aren't going to be working.

And then suddenly you are,

and then it's kind of all messed up right, your taxes.

Well, and here's where it boils down to.

I've had people come in and say,

well, should I keep working?

It seems tax inefficient

because it's getting in the way

of the irid Roth conversions they may want to do.

It's like, no, you need to work.

You've told me you would be depressed

if you don't work.

Or people will say, well, you know,

think about going back to work or do this or that.

Or it's just life's full of surprises.

So if you're already hinting at you want to work,

you probably should continue to work until you have figured

out how to build what I call the purpose portfolio.

And that's just how are you going to spend your time

in retirement that allows you to get

oxytocin serotonin and dopamine in healthy levels.

And here's something else to consider,

just for what it's worth.

If you have unhealthy amounts or feelings of,

it's called blasts.

So bored, tired, angry, stressed,

or blasts, no, as a, sorry,

I can spell blast, DL, bored, lonely, angry,

stressed, or tired.

Okay, okay.

If you have high levels of that in your life,

you're more prone to anxiety, depression, and addiction.

The last thing you want is to start an addiction in retirement.

And you don't choose an addiction.

The addiction will choose you

and it will become a burden for the rest of your life.

If you allow yourself to be bored, not have a job,

not be pursuing another job,

and just say, well, I guess I'm retired.

I'll just sit around and watch the news,

whether you're a, was it Fox and Newsmax kind of person

or you're a CNN, MSNBC kind of person.

Right, those are the two camps.

All right.

If you watch the cable TV or anything.

It's just rage.

You're just gonna be full of rage.

If you spend your time trying to waste it away

and stay busy with noise

and not be productive with your individual needs.

Right.

So yeah, don't do the traditional plan.

Create a more dynamic plan that allows you to hop in and out of work

regardless of market conditions,

regardless of the employment environment and so on.

That's all the time we've got for today's show.

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