5 Dead Simple Steps to Know If You’re On Track for Retirement (Plus Money Q&A)

In this episode of the Personal Finance Podcast, we're going to talk about the 5 dead simple steps to know if you are on track for retirement. How Andrew Can Help You: Don't let another year pass by without making significant strides toward your dreams. "Master Your Money Goals" is your pathway to a future where your aspirations are not just wishes but realities. Enroll now and make this year count! Join The Master Money Newsletter where you will become smarter with your money in 5 minutes or less per week Here! Learn to invest by joining Index Fund Pro! This is Andrew’s course teaching you how to invest! Watch The Master Money Youtube Channel! , Ask Andrew a question on Instagram or TikTok. Learn how to get out of Debt by joining our Free Course Leave Feedback or Episode Requests here. Car buying Calculator here Thanks to Our Amazing Sponsors for supporting The Personal Finance Podcast. Shopify: Shopify makes it so easy to sell. Sign up for a one-dollar-per-month trial period at shopify.com/pfp Chime: Start your credit journey with Chime. Sign-up takes only two minutes and doesn’t affect your credit score. Get started at chime.com/ Thanks to Fundrise for Sponsoring the show! Invest in real estate going to fundrise.com/pfp Thanks to Policy Genius for Sponsoring the show! Go to policygenius.com to get your free life insurance quote. Go to joindeleteme.com/pfp20 for 20% off! Indeed: Start hiring NOW with a SEVENTY-FIVE DOLLAR SPONSORED JOB CREDIT to upgrade your job post at Indeed.com/personalfinance Turn your business dream into reality! Apply now at www.oneday.org/pfp Go to Acorns.com/pfp and start automating your investments and get a $5 bonus today! Delete Me: Use Promo Code PFP for 20% off! Links Mentioned in This Episode: What Net Worth Puts You in Upper, Middle, and Lower Class How to Invest More Outside of Retirement Accounts, 529 Strategies, & Dividend Growth - Money Q&A 10 Incredible Benefits of a Taxable Brokerage Account! Why Coast FIRE May Be The Perfect Strategy for You with Andy Hill Retirement Calculator : Empower Connect With Andrew on Social Media: Instagram TikTok Twitter Master Money Website Master Money Youtube Channel Free Guides: The Stairway to Wealth: The Order of Operations for your Money How to Negotiate Your Salary The 75 Day Money Challenge Get out Of Debt Fast Take the Money Personality Quiz Learn more about your ad choices. Visit megaphone.fm/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Andrew Giancola?

  Longtime listeners know, one of the best ways to build wealth is to increase your income. And one way to do that is by starting a side hustle. And that's one reason why I absolutely love Whatnot. Now, my son and I, we love collecting sports cards. And we've used Whatnot to buy and sell cards. It's been a really fun way to enjoy something we love together. Now, Whatnot is a live shopping platform where people sell everything from sports cards to clothing, electronics, and collectibles. And what's really cool about it is you can turn something you're passionate about into a business. And you could do it right from your phone. You don't even need a storefront or a website. So whether you're looking to make some extra money or find great deals on your next shopping trip, check out Whatnot.

• 0:44Andrew Giancola?

  Search Whatnot, that's W H A T N O T, in the App Store. Download and start selling right away. When I started the Personal Finance Podcast, I had no idea how big it could become. I just knew I had something I wanted to share, so I started putting it online. And looking back, I definitely wish I would have started a decade earlier. One of the horror parts about building something online, though, is making it look professional. A website used to mean hiring a developer, figuring out design, and potentially spending thousands of dollars. In fact, on my website, I spent tens of thousands of dollars. That's what impressed me when playing around with Hostinger's AI website builder.

• 1:27Andrew Giancola?

  I told it what kind of website I wanted, and I built the first version in minutes. No coding, no designer or developer needed. And Hostinger doesn't stop at launch. Their AI can help with SEO, website copy, email marketing, and more. Plus, your domain, website, email, and marketing can all live in one account, with plans starting at just $3 every single month. Hostinger builds your vision step by step. Create your website today. Go to hostinger.com/pfp and use code PFP for 10% off now. On this episode of the Personal Finance Podcast, five steps to know if you're on track for retirement.

• 2:24Andrew Giancola?

  What's up everybody and welcome to the Personal Finance Podcast. I'm your host, Andrew, founder of MasterMoney.co. And today on the Personal Finance Podcast, we're going to be going through five steps to know if you're on track for retirement. If you guys have any questions, make sure you join the Master Money Newsletter by going to MasterMoney.co/newsletter. And don't forget to follow us on Spotify, Apple Podcasts, YouTube, or your favorite podcast player. And if you're getting value out of the show, consider leaving a five-star rating and review. Cannot thank you guys enough for leaving those five-star ratings and reviews. They truly mean the world to me and really, really help the show grow. So if you want to help the show, follow the show, leave that five-star rating and review.

• 3:09Andrew Giancola?

  It truly does help us move this show forward. And our entire goal with this show is to teach as many people as possible how to build wealth. So today, we're actually going to go through and answer three of your questions. But in addition on this episode, I'm actually going to start the episode off with basically a mini-episode. And the reason why I'm doing this is because we had a question in of someone asking if they're on track for retirement and how they actually know if they are on track for retirement. So before I answer that question, I want to do a mini-episode talking through the five steps you need to know to see if you are on track for retirement. So, we're going to do that mini-episode and then we're going to answer these questions. A, how do I know if I'm on track for retirement? We're going to talk through someone's specific situation. So you're going to learn, hey, how do I figure that out? And then we're going to go through a

• 3:54Andrew Giancola?

  very specific situation. Then secondly, is should I stay with Fidelity Go or invest elsewhere? So this person is using robo-advisors. We're going to talk through their specific situation. How can I lower my rental insurance costs? That's going to be another one where it comes to this person has a rental property and we're going to talk through some of those rental insurance costs. And then also, we're going to be talking about another scam that is out there right now that is getting a lot of people. And there's a lot of people who have succumbed to fraud based on the scam. And so this is something that I want to make sure that you guys are aware of as well. So this is an action-packed episode. Without further ado, let's get into it.

• 4:30Andrew Giancola?

  All right. So to start off the show, we're going to give you five steps to know if you are on track for retirement. Now figuring out if you're on track for retirement is not as complicated as it seems. And I'm gonna try to make this as simple as possible for most people so that they can follow these steps in a simple way. Now, number one is we want to define our retirement goal. Now, this is the number one thing I always want you to do as you start your personal finance journey is we need to figure out what our retirement goal is and what our retirement number is. So we first needed to decipher, well, how much money do we need? Now, this is a loaded question, and it's a lot harder to answer than it sounds. So a lot of times I will ask myself this question all the time, and you

• 5:12Andrew Giancola?

  have heard me talk about it. I struggle with getting the goalposts to stop moving. How much money do I actually need in retirement? Some people, it's gonna be a lot less than other people. And the easiest way to get a starting point for this is to look at how much do I spend right now? And so you can look at how much money you are spending currently in your situation and saying to yourself, do I want to live like this forever? Do I want a little more? Do I want a little less? And this is going to be the easiest gauge to get you a starting point, because we want to figure out how much money we want to have allocated every single year. Now, an old fashioned rule of thumb, people have said, hey, go and figure out how much 80% of your current income is right now, because you're gonna have social security and you're gonna have some other things coming to play. That

• 5:56Andrew Giancola?

  is not the way I look at it whatsoever, is if you look at 80% of your current income right now, maybe you won't have a mortgage, and maybe you won't have some of these other things, and you could subtract those out. But I like to look at 100% of my income right now, just because I'd rather have more cushion. Now, if you get to a point in time where you realize, eh, I'm spending a little less than I thought I was, then that is going to be something that you'll figure out over time, and you can slow down your cadence of saving and investing. But if it's something that you realize pretty quickly, oh, shoot, inflation is accelerating, and I did not save enough, that's the last situation that I want you to be in. So first, look at how much you're spending right now, and let's just say your allocation is you want to spend 100% of what you're spending right now. Maybe you want to spend 120%.

• 6:39Andrew Giancola?

  That's fine too, but what we're going to look at is just 100% of what you're spending right now. Then what we do is we utilize the 25x rule. Now, if you don't know what the 25x rule is, this just means you are going to multiply how much you spend right now by 25. Now, a lot of long time listeners know this formula because we talk about it all the time. But this is going to get you at least a number that is close enough to a starting point to figure out what your North Star is. And so as you start to think through this, you're going to say to yourself, okay, well, I spend $80,000 per year in my current situation. My household does. So this is you and your spouse, or if you're a single person, this is just you. So I spend $80,000 per year. If I multiply that by 25, that is $2 million. So you're going to get $2 million available to you.

• 7:23Andrew Giancola?

  And now what does this mean? What does this $2 million number mean? Does it mean you just stuff this in a savings account and you just put it away? No, this is the number that you are going to have invested. These dollars need to be invested because in order to be able to retire, we have to invest our money so that it preserves our capital over time. Okay? So what this means is that if you have $2 million invested and you spend $80,000 per year, that means you can become financially independent because you can draw down 4% of your portfolio every single year and preserve that money. Then each year thereafter, you adjust for inflation. And so the 4% rule is a beautiful thing that will help a lot of people.

• 8:05Andrew Giancola?

  Now, if you retire really early and you are someone who wants to retire in their 30s or 40s, we have a lot of listeners here who are making progress to retiring in their 30s and/or their 40s. Well, if that is you, you may want to tailor this down to less than 4%. You may want to do 3% if you're in your 30s or 3.5% if you're in your 40s. And the reason for that is because the 4% rule was really crafted for folks who were retiring at traditional retirement age, you know, 59 and a half, 60, 65. Some of those ranges are okay for the 4% rule, but we just want to make sure that we think through this a little bit more. Now, we've done an episode kind of talking about some of the ranges that you can have in retirement with the 4% rule. The 4% rule is most likely slightly conservative in my opinion, but at the same

• 8:49Andrew Giancola?

  I'd rather be conservative over being overly aggressive and then you have to go back to work 20 years later. When you're in your 50s because you retired at 30 and you spent too much. That's the last thing I want for you. So just thinking through that is is going to be really important. But the second consideration is exactly what we're talking about here is what age do you want to retire? Because if you think you're going to retire in your 60s, then that 4% rule is absolutely fantastic. And if you're going to retire at 65, maybe 70, maybe you got a late start, that's completely fine too. But you may be able to draw down 5% a year. And so we just got to look at when we're going to retire so that we can plan for that. In addition, though, outside of how much we're going to spend every single year, we're still on step one, by the way, folks. But when you figure out how much you're going to spend every single year, you also just want to look at what are your other sources of income?

• 9:34Andrew Giancola?

  Because if you have other sources of income, this could be something like social security or pension income that are going to be coming in. Well, those two are fantastic because if social security is coming in for you, you just want to try to figure out exactly where you'll land. So you can go to ssa.gov right now and try to calculate where your social security will be. You have to fill out all these forms. It's actually a pretty annoying website to get a login for. But once you have it, it's actually very useful in terms of making sure that you know kind of where you stand on your social security. And I even would argue that you can look at that every couple of years and kind of adjust your plan based on what the expected social security is. If you are on top of that thing and you're on top of what you think your social security is going to be, then that might be a great option for you. Now, people will say, "Social Security is going away."

• 10:20Andrew Giancola?

  May be true, but may not be true. And most people don't have a crystal ball. From what I've been told from folks who are older than me, they've said that they've been saying that since the 60s, that social security is going to go away. And so this is something I think for most people, we can plan on having it, but we like to look at 100%. It's going to be gravy on top. So my social security, my thought process for that is, "Ooh, that's going to be my extra travel fund, or that's going to be my extra golf fund to do cool trips and things like that." So I see it in that light where I try to take care of the things that I can control and focus on the things that I can control and take care of myself first, and then social security comes after. Now, if you are retiring in the next decade or so, most likely, social security would be there. If they take that away, it would be a political ramifications of the person who is taking that away.

• 11:04Andrew Giancola?

  It would be a huge uproar. So I think that's something most politicians want to try at least to keep it in place. The other option is, do you have rental income coming in? Is there another income source that you are going to have in place? And are you going to have dividends or passive income in addition to just some of the portfolio drawdown that you're going to be doing? So what are the other income sources? Maybe you'll have a few. Maybe you own a little small business, something like that for retirement. That just helps you earn some more income in retirement. So that is the first question is defining your retirement goal. So we're going to use the 25X rule. We are going to define that retirement goal. And then from there, we are going to figure out exactly where we land. Step two is you need to calculate where you are today.

• 11:47Andrew Giancola?

  We need to figure out where are we today and how can we figure out if we are on track? So I want you to take all of your retirement and investment accounts. I want you to look at your 401K. I want you to look at your IRAs. I want you to look at your Roth IRAs, your brokerage accounts, your HSAs, your pensions, and all other investments in place. And I want you to estimate your total net worth. So if you don't know what your net worth is, it's your assets minus your liabilities. Your assets are things, A, that go up in value over time, or things that are worth something right now. And your liabilities are things that are debts. So it's your mortgage, your loan, and any other debts out there that you may have. And then what I want you to do is kind of figure out that net worth number, assets minus liabilities.

• 12:29Andrew Giancola?

  If you don't know how to do that and you want to dive deeper into that, we have an entire episode talking about net worth and how to calculate that and why it's so important. I would highly recommend that you check that episode out if you have not. Then what I want you to do though, is I want you to start to plug your numbers into a retirement calculator. So there are some fantastic retirement calculators out there. One of my favorites, and we'll link this up down in the show notes below, is Empower. So Empower has a retirement calculator that is free that will help you figure out if you're on track to retirement. Also, if you are a customer of Vanguard or Fidelity, they also have retirement calculators that can help you figure out if you're on track. I like Empower's as one of my favorites just because it gives you a lot of great data. Also helps you plug in your net worth data as well.

• 13:12Andrew Giancola?

  And so Empower is a great tool for that kind of stuff for sure. And what this is going to do is you're going to put in your information and it's going to give you kind of a projected portfolio size at retirement and give you a snapshot of where you are. Now, secondarily, what you can do is you can go to an investment calculator. So one of my favorite investment calculators, for example, is if you go to calculator.net/investmentcalculator. That is a wonderful one to just figure out where you stand right now and what would happen. And so what you could do is I'll give an example right now. Let me go to calculator.net and I'm going to look at this investment calculator. So let's say, for example, you add up all your retirement accounts and you have $40,000 in your retirement accounts. Okay, for some of you, that may be way lower than what you have.

• 13:56Andrew Giancola?

  For some of you, that way be way more than what you have. It doesn't matter what the number is. And what we're going to do is we're going to look at, let's say, for example, you're 30. Okay, if you're 30 years old and you want to retire at the age of 50, we can look at this and say to ourselves, okay, well, we want to retire in 20 years. Is this even possible? Let's try to figure out if it is possible. Let's go with a return rate of 7%. Now, here's one thing I want you to do is when you are trying to calculate for retirement, I want you to be conservative. And people who have been on coaching calls with me in the past have heard me talk about this. I say this all the time, when we're trying to figure out their retirement number, we will look and see, hey, where are you right now? And let's get conservative with the rate of return. I try to motivate you with a 10% rate of return because historically, that's what it's been.

• 14:40Andrew Giancola?

  The rate of return of the S and P 500 has been right around 10% over the course of the last 50 years. You can go back 20 years and it's been a little over 10%. And so what's happening here is that that number is a very real number that is a possibility. But when we are calculating for retirement, we want to make sure that we are conservative. Why? Because the last thing you want to do is screw up the rate of return and the rate of return becomes lower over time. And then you are behind on your savings. Does that make sense? So when you are trying to do this, we do not want to fall behind on our savings when we are trying to stack this up. And so I always use a 7% rate. Return when I'm calculating my retirement specifically. Why? Because then you're just going to save extra no matter what.

• 15:25Andrew Giancola?

  And so if you have that gravy on top, you can do it. Now you can do 8%, that's still conservative enough to me, but I do seven just to see exactly where I land. Okay. And so let's say you have $40,000. You want to retire over the course of 20 years. You have a 7% rate of return and you're going to contribute $1,000 a month. Okay, let's see what's going to happen here. So if you put that number in over the course of 20 years, you're going to have $662,000 in that portfolio. That's probably not going to be enough for most of you to retire because that means you can only draw down like 20 to 23,000 bucks, somewhere in that range. So that's not enough for most people. Okay. Now, if you extend it out to 30 years, you say, okay, I'll retire at 60. That's $1.5 million. That means you can spend right around $60,000 per year retirement.

• 16:09Andrew Giancola?

  If you have extra income filling in those gaps, then that's what you have available right there at that 7% rate of return. Now let me show you how big of a difference the rate of return is because you see $1.5 million there over the course of 30 years. Let's just say we put it at a 10% rate of return. That's going to put it at $2.7 million. So we are hoping for the best. We're hoping we're going to get to $2.7 million, but we are expecting the worst and bringing that down to 7%. Let's say we have a recessionary period or we have some sort of event that causes the market to slow down some. Then we want to make sure that we prepare for that with that 7% rate of return because that is a massive difference. It's over a million dollar difference, $1.2 million.

• 16:50Andrew Giancola?

  And so we want to make sure that we are not overcompensating on that rate of return. So the 7% rate of return is why I like to be conservative. Historically, it's been higher and so it's something you can hope for the best, but prepare for the worst. That's the way I think about that in the way I go through this. So go to an investment calculator and start to plug those numbers in. And that will start to give you an idea if you are on track. Let's take a break and then we'll jump into number three.

• 17:16Andrew Giancola?

  Now, another quick and dirty way to see if you're on track is step three is to compare yourself to retirement benchmarks. Now, a lot of times these retirement benchmarks, they're pretty blanketed, but it is helpful just to kind of see where you land. So fidelity has age-based retirement benchmarks, meaning that depending on how old you are, here's how much of your income you need to have saved. And so by age 30, they say you need to have one times your salary saved. By age 40, they say you need to have three times your salary saved. By age 50, they say you need to have six times your salary saved, and by age 60, eight to 10 times your salary saved. Now, in my opinion, I think those numbers are a little low, and I think you need to probably have more than that if you are really trying to pursue a fruitful retirement and financial independence.

• 18:00Andrew Giancola?

  And so when you look at some of those numbers, you want to try to beat those retirement benchmarks if you can at all possible. So if you want a $1 million retirement, another benchmark that they have is by age 30, you need to have $100,000 saved. Now, if you're just getting started on your personal finance journey, do not let this stress you out, because it should not stress you out whatsoever. This is just a benchmark for people who might have started early. Outside of that, you can catch up. I promise you can catch up, so please do not worry about that. By age 40, 300,000 saved. By age 50, 700,000 saved. And by age 60, 1.5 million is kind of the range that they recommend. Now, the reason why I don't like these blanket recommendations always is because for most people, personal finance is very personal.

• 18:41Andrew Giancola?

  So your situation, you may need way more money, you may need way less money. It depends on where you are on that scale and where you want to be in retirement. Some people are happy with very simple living, and they live in a low-cost-of-living area, and so they need way less money. Some people, their entire family are in the middle of California, and they have to pay a ton of taxes, and they have to spend a lot more on housing and a lot more on transportation, and the cost of living is incredibly high. Very different scenarios, which is why I don't like these blanket benchmarks as much, but they are good gauges to at least look at for a rough, quick, and dirty way. So if you're trying to figure this stuff out fast, it is a good starting point, but then we need to start to get more and more specific as time goes on.

• 19:25Andrew Giancola?

  One thing I would say is if you start to go through all these benchmarks and you're saying to yourself, "Well, I'm behind. I feel like I am not anywhere near where these benchmarks are." That's going to be a great indicator that we need to come up with a plan to catch up. Now, there's a couple of different things that you can do here, and we'll talk more about that in number four here in a second. But there's a couple of different things that you can do here. You can develop your own DIY plan, or you could talk to an advisor who is going to help you kind of put together a financial plan based on what you're looking for. And so they can do that at an hourly rate and help you put together that financial plan that allows you to move forward knowing exactly what to do. So those are two options that you have available. So step four is what we're going to do is we're going to identify gaps and we're going to adjust.

• 20:06Andrew Giancola?

  And so we calculated our net worth. We put some of these numbers into a retirement calculator like at Empower or at Vanguard or at Fidelity. We started to play around with our investment calculator at calculator.net to just kind of see, you know, what's going on here? How can we figure out where we need to land? And now we are starting to gauge it against benchmarks, meaning we're looking at some of these benchmarks and saying to ourselves, "Hey, am I on track or am I ahead of some of these? Am I behind some of these? And what do I need to do?" Now we need to start to make some adjustments and you are looking at that 25X rule and you're saying to yourself, "I'm not on track to be able to have enough that I need based on the 25X rule. Let's adjust now." Now is the time to adjust. The best time obviously was yesterday and the second best time is today.

• 20:48Andrew Giancola?

  And so we're going to make those adjustments right now. So if you're behind on savings, don't panic. Here's how we fix it. One is we're going to increase contributions. You want to try to max out your Roth IRA and your 401K if possible. Now, if that's not possible, we need to find money and we have episodes talking about how we can find more money so that we can increase those contributions. Secondly, though, is we can increase taxable brokerage investing if retirement accounts are maxed. So if you've maxed out your retirement accounts this year, then we can move on to a taxable brokerage account as well. Now, secondly, another thing that we can do is we can invest more aggressively, meaning that if you've been in bonds for your whole life or you've just been saving cash, for example, now it's time to consider and do your research and see if you want to invest a little more aggressively.

• 21:32Andrew Giancola?

  I myself invest in index funds and ETFs. I love investing in just stock index funds and ETFs. Majority of my portfolio is in the S and P 500 or the total stock market index fund. And the reason for that is because over the course of the long run, you get that 10% rate of return when you invest a little more aggressively. That's historically what it's been. Now, in the future, it may not be that. We don't know what the future holds, but all we have is historical data to go off right now. And so that's how we think about that. Now, if you are retiring in 20 plus years, stock heavy portfolios are more so the way that I go. You know, 80 to 100% stock allocation is kind of how I think about that personally. That's the way I do it. Now, if your risk tolerance is lower than mine, then maybe you have a different perspective on that.

• 22:14Andrew Giancola?

  But for me specifically, I like to own more stocks, especially if you're 20 plus years out. Now, if you're retiring in 10 years or less, then maybe including bonds, some additional cash or real estate is going to help you kind of weather out that volatility and weather out that storm. Bonds are not bad. I'm going to kind of bring this up real quick here as we're talking through this is I like bonds. In fact, I like bonds enough, but as you start to approach retirement age, that's where I think the bond allocation needs to rise more and more. And there are some great bonds out there. I like government bonds for the most part because they are backed by the United States government. There are things like T bills. There's things like government bonds and things like that, that are guaranteed and backed by the government. So those are the ones that I'm most interested in because there's a very close to 0% chance

• 22:59Andrew Giancola?

  that you will lose money. And so that's kind of what I'm thinking. People will say 100%. I think there's no scenario in the world that's 100%. And so that is where there's a very close to 0% chance that you would lose money. And so you want to get a little more aggressive if you have, you know, over 10 years left before you retire. Now, reducing expenses is another thing. If you feel like you are spending too much and you're just not saving enough for retirement, that's where you start to reduce your expenses a little bit more. And cutting back on that spending will really, really help you. And then you can explore additional income streams. So if you are someone who is looking to cut back expenses and then increase your income, that means that you will increase the gap, the difference between your income and your expenses, which is going to allow you to invest more for retirement and buy your freedom.

• 23:44Andrew Giancola?

  The reason why we do. This is because we want to buy back our freedom so that we can be free from a job, especially if it's a job we do not like. If we do not like where we go every single day, we want to make sure that we are voting with our dollars and buying back our freedom. You have the power to do that. That's the coolest thing about personal finance is you have the power to be able to buy back your freedom and it's a gradual process that over time your future self will be so thankful that you did that. And so I think for most people, learning to buy back our freedom is going to be one of the best things that we can do and just making sure we think through this. Now, step five, and this is one that is for the advanced folks, a little more advanced, but there are ways to make this a simple process, is I want you to stress test your plan.

• 24:29Andrew Giancola?

  So we started to put together a little plan here and I want you to think through, well, how do I stress test this? What does that mean? That means, well, if we have a recession early in your retirement, what's going to happen? What will you do early in retirement? Are you going to have cash on hand? Maybe you have a big, long emergency fund that is going to help you through a couple of years if we do have a recession early on? Or what would that look like? Here's the second question. This is the one I love and one that I study a lot, is can your portfolio handle a 2008-like recession? So the 2008 recession, the Great Recession, is one that is probably one of the worst-case scenarios that we can have. And it's one of the worst-case scenarios we've had since the Great Depression. And so you can look at that scenario and say to

• 25:08Andrew Giancola?

  yourself, can my portfolio handle this? I am amazed. There's probably so many people that retired in 2007, 2006, 2005, that had to handle the 2008 recession early on in their retirement. I cannot imagine how scary and difficult that was, but if you weathered that storm, and if your portfolio could weather that storm, that's the most powerful position that you can be in. And so learning how to stress test your portfolio a little bit can be really, really helpful. And some of those retirement calculators can kind of help you think through that. There's another thing called Portfolio Visualizer that can help you with some of those scenarios too, but they have a paid and free version. And so some of those are really, really helpful. And then what I want you to do is as you start to develop this plan and just think about this plan, this may not be something that you do very quickly, but you want to start to have this

• 25:52Andrew Giancola?

  plan in place so that you can develop it over time. Once you start to do that, then we want to make sure that we start to reassess annually. Every single year, kind of look at this, that's where I say, hey, go to ssa.gov, start to look at the social security numbers, start to look at some of the other numbers that you're going to have available to you so that you know exactly where you're going to land, because you want to make sure that you are on track over time. Those are the five steps I want you to know to see if you are on track for retirement. That's the mini episode. And now what I'm going to do is dive into some questions that you guys sent in via the Master Money Newsletter, and we are going to go through some of these and help you through that. The first one is actually talking about if someone is on track for retirement. So we are going to put what we just learned into practice.

• 26:35Andrew Giancola?

  My relationship with money has changed a lot over the years. Early on, I thought building wealth was about making more money. Now, I know it's really about having clarity. When you know exactly where your money is going and whether you're on track, you make better decisions. That's one of the reasons I love Monarch. It's the personal finance app that tracks everything from your accounts and investments to your savings, goals, and spending. So you can see your entire financial picture in one place. One habit that's made a huge difference for me is my five-minute drill every single morning. I open Monarch, check my spending, investments, cash flow, and net worth, and I'm done in just a few minutes. It gives me confidence that nothing is slipping through the cracks. I also love

• 27:16Andrew Giancola?

  the AI weekly recap, because it'll flag spending changes, upcoming expenses, or shifts in my net worth before they become a problem. Instead of reacting after the fact, I can make adjustments early. It really feels like having a financial advisor in your pocket. Write your own money story with Monarch. Use code PFP at monarch.com to get your first year of Monarch Core half off at just $50. That's 50% off your first year at monarch.com with code PFP. It's kind of amazing how much can change in just a single year. Every summer, the kids are a little bigger, a little more independent, and life looks a little different than it

• 27:56Andrew Giancola?

  did the year before. And it reminds me that while we can't predict the future, we can prepare for it. That's one of the reasons I like Paul. See, Policy Genius isn't an insurance company. They're an online marketplace that lets you compare life insurance quotes from some of America's top insurers, side by side, for free. And their licensed team helps you compare coverage, prices, and terms, answers your questions, and even handles the paperwork so you can get the right policy without the hassle. For me, having life insurance isn't about expecting something to happen, it's about knowing my family is protected so I can actually enjoy these moments together, instead of worrying about what comes next. And with Policy Genius, you can find 20-year life insurance policies, starting at just

• 28:41Andrew Giancola?

  $276 a year for $1 million of coverage. Head to policygenius.com to compare life insurance quotes from top companies and see how much you can save. That's policygenius.com. If you've been listening to this show for a while, you know it's not just me anymore. It takes a great team behind the scenes to make everything happen. And if I had to hire someone tomorrow, I'd want someone who could jump right in and make an impact. That's why I'd use Indeed Sponsored Jobs. When workplace chaos hits, Indeed Sponsored Jobs helps you reach qualified candidates faster. Your job gets boosted in search results, so you're spending less time searching and more time interviewing the right people. Plus, you only pay for results, which I absolutely love.

• 29:25Andrew Giancola?

  Sponsored jobs posted directly on Indeed are 95% more likely to report a hire than non-sponsored posts. That's a huge advantage when you're trying to grow your business. Spend less time searching and more time actually interviewing candidates who check all of your boxes. Less stress, less time, more results. When you need the right person to cut through the chaos, this is the job for Indeed Sponsored Jobs. And listeners of this show will get a $75 sponsored job credit to help get your job the premium status it deserves at indeed.com/podcast. Just go to indeed.com/podcast right now and support our show by saying you heard about Indeed on this podcast. Indeed.com/podcast. Terms and conditions apply. Need to hire?

• 30:10Andrew Giancola?

  This is a job for Indeed Sponsored Jobs.

• 30:13Speaker 01

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• 30:43Andrew Giancola?

  First question is, I'm 41 and my husband just turned 43. And we are small business owners and are close to paying off our obligation to the prior owners. I have a traditional IRA and we both have a Roth and traditional 401k. And we have a little bit invested in the market. We both have maxed out our 401ks the last two years and made regular contributions. The only debt other than the business buyout is our home. All in, our retirement accounts and investment accounts total around $700,000. Amazing. And we also have a bit over $400,000 in cash as a buffer for the business buyout. Since we are nearing the end, we don't need to or want to hold as much cash and plan to invest some in index funds coming soon.

• 31:24Andrew Giancola?

  I also plan to roll over our non-company sponsor plans to a pay by hour instead of assets under management setup, thanks to your show. So woo, are we on track? We'd like to hit a $5 million to retire with the lifestyle that we desire in retirement and set our kids up for the future. Oh, all three of our kids have 529s and family to contribute to, and the older two also have Roth IRAs. I appreciate your input and feel like we are headed in the right direction. But I also feel like maybe we are behind a bit. So this is an awesome question. And listen, I understand your feeling. I think a lot of us, as we start to kind of think through retirement, we start to stress out a little bit because we want to be able to become retired and we want to kind of go towards what we are thinking through here. Now, let's look at the math because what I want you to do is I want you to say congratulations

• 32:08Andrew Giancola?

  on your progress because you have a $700,000 portfolio in your early 40s. You are 41 and 43. That is absolutely amazing. That is so impressive and congratulations to you on that. And you have your 529s and you also have your kids Roth IRAs. You are making some amazing progress here. Now, I don't know what the business is going to sell for. And what we will do is we'll kind of take that out of the equation here. But if you are looking to retire, let's just look at the math really quick here. If you don't add anything extra to your investments and you just let them grow. And your current portfolio compounds at 8% a year. So if you got 8% every single year and you, you know, got that historical market average and you continue maxing out your 401ks at $46,000 per year combined, assuming you are

• 32:52Andrew Giancola?

  doing the 23,000 a person plus, here's what the scenarios would look like. And you can run this into calculators that we were just talking about at the top of the show, but here's what you can do is in 20 years at age 61, if you had no additional contributions, meaning it just compounded, you didn't add anything else to this, you have 3.3 million and in 24 years, you'd have 4.5 million. So you, as you see, this is going to compound pretty quickly over time. Now, if you keep maxing out your 401ks in 20 years, you'd have 5.4 million. Okay. And then in 24 years, you'd have 7.1 million, which is way above your goal. Now, if you sell your business and your business sells and you are getting to the point in time where this is a big lump sum and you invest those dollars as well, you're probably going to hit this goal really quickly because I don't know what the business is going to

• 33:37Andrew Giancola?

  sell for, but if that's the case, you'll probably hit this goal a lot faster. Now, if you invest more aggressively from cash reserves, let's say you take another 200,000 of your 400,000 cash buffer, you could shave off three to five years in reaching your $5 million goal. So if you want to do it sooner than 20 years, you could shave off years by investing a lump sum of that cash over time. So you are absolutely on track, especially if you continue to max out contributions and start investing more of your excess cash. But one thing you can look for is I want people to think about this for a second is the concept of coast fire. So coast fire, say you sold your business, you got a lump sum and you started to invest those dollars. There's a highly likely chance that you hit coast fire. Now, there are some coast fire calculators out there that will probably help you just

• 34:22Andrew Giancola?

  figure this number out. Let me see if I can find one here. So, oh, our good friend, Andy Hill, has a coast fire calculator. So if you go to marriagekidsandmoney.com slash calculator slash coast fire, Andy Hill has one here, which I love because Andy Hill has actually come on this podcast and talked about coast fire if you want to check out that episode. So if you go here and you look at your current age, okay? And let's say we're going to do the average age between you and your, your spouse is 42, let's say your retirement age you want to be at is 60 and your annual spending is Going to be since you want to spend $5 million per year, then your annual spending is going to be at $200,000. How did I get that math? Well, if you utilize the 4% rule, draw down 5 million, that means you're going to spend $200,000 per year.

• 35:04Andrew Giancola?

  Current invested assets. So then you put in your current invested assets of $700,000. And then your monthly contributions, you can add those in, you can add in everything from an inflation rate to safe withdrawal rate to investment fees. Awesome, awesome stuff to be able to figure out exactly where you're going to land. And so this is a great calculator, kind of see if you want to become coast fire and you want to be able to hit a certain number and then not have to keep continue investing. That's a great calculator to have as well. So those are concepts I think a lot of people need to think through is when they are looking at this is kind of looking at, hey, what does it take to be coast fire? So I don't have to save so aggressively. And then secondly, how much do I need to continue saving over the course of the next couple of years to hit my big goal? And those two things are going to help a lot. Really having a high income is very helpful.

• 35:48Andrew Giancola?

  And it sounds like your business is really taking off. And so I think there's going to be an opportunity there if you plan to invest in that cash. And you have a business buyout, I think you're going to be in a great position. And so that's a great way to see if you're on track. You can follow the steps at the top of the show too, to kind of see where you land. And then use these calculators online are so great now that just help you kind of with your plan as you start to move forward. And so awesome, awesome stuff. Let me know if you have any other questions on that and we can help you as much as we possibly can.

• 36:18Andrew Giancola?

  The next one is, hey, Andrew, thank you so much for all your guidance and tips. I currently have a few investment accounts, including two fidelity go accounts. One is a general account that I add money to biweekly and the other is a Roth IRA, which I aim to max out each year. Fidelity go is a diversified portfolio of fidelity stock and bond funds, seeking to track the market and be managed over time. However, they have a 0.35% fee once you reach 25,000 in the account, because then you will have access to a coaching team and assess spending debt and planning for retirement. I have listened to your podcast regarding fees and for financial advisors. Should I keep the money in the account until I reach 25,000 and then invest elsewhere? Or possibly open multiple fidelity go accounts? Or do you think I should? Try to continuously grow the account.

• 37:02Andrew Giancola?

  Now, this is a great question. And when it comes to robo advisors, if you are going to get help, basically what you want to do is assess that fee. I don't really think that a 0.35% fee is absolutely going to kill you. Sure, it's going to make an impact in your retirement for sure. If you need the help, though, and you need that guidance, I don't think it's absolutely going to kill you. Now, when you get closer to that 1% range, that's where you're going to see a big, big difference in terms of where the fees need to kind of slow down or you need to pull back a little bit. But when it comes to 0.35%, if you're getting active coaching and help and you think it's beneficial to you, you're getting the value out of that. I'm not totally against that, you know, going forward. Like, I think a lot of people think I want zero fees whatsoever. And I do, I want your fees as low as you possibly can get them.

• 37:46Andrew Giancola?

  But at the same time, we just want to make sure that we are also actively getting the help that we need so we don't make mistakes. And so if that's helpful for you, that is great. Now, one thing you could do is you can maintain having maybe one of these accounts in there. Let's say, for example, you build up the taxable brokerage account and that builds up to 25,000. You can move your Roth IRA somewhere else and still get some of those tips from them to be able to help with that diversified portfolio. If you feel comfortable managing your own portfolio, because what they're doing is they're probably utilizing robo advisors in place to help you manage that portfolio going forward. And so it's a cheaper way to have a team in place that are helping you manage your portfolio. And so because of this, that is one thing you could do. Now, to open multiple Fidelity Go accounts, that doesn't work only because the rule with Fidelity Go, I kind of, I went and looked this up,

• 38:31Andrew Giancola?

  is that it's your total amount invested across Fidelity Go. And so it's across all of your accounts is when that fee and that kicker will happen. And so you got to make sure that if you're going to try to avoid that, you want to keep them below 25,000, if that's your goal. And so they are a very solid robo advisor. And fidelity, obviously, is one of my big two. I really am a Vanguard fidelity guy. Schwab is the third, if you are looking for something else. But Vanguard and fidelity are my two favorites. And so it's much lower than traditional financial advisors. But it is an added cost in comparison to DIY investing. And so what you're paying for is it gives you that active coaching. And if you're comfortable managing your investments and you want to follow a simple strategy. Then you can kind of get to that $25,000,

• 39:14Andrew Giancola?

  see how much value you are getting from them and it kind of assess from there because that's the big thing is seeing how much value they actually give you. If you feel like it's enough value to justify how much you're paying, then that's worth it. But if it's not enough value to justify what you're paying, then you can just kind of move on. It's a pretty simple formula for that and switch to DIY investing. And so that's kind of how I would think about it for the most part is just seeing, hey, how much value am I getting? And that's how I assess this. And so for a lot of people, that comes with any advisor out there is are you getting a ton of value? Will they help you on an hourly basis? If not, are you getting a lot of value from them or are they changing your life financially? And or is it something that really isn't bringing a ton of value to you? So that's how you want to think about those for sure.

• 39:56Andrew Giancola?

  The final take is if you want an easy kind of automated solution and don't mind paying for it. Fidelity go is still a solid option. But if you're comfortable managing your own investments and you want to avoid that 0.35% fee, transitioning to a self-managed fidelity brokerage account would be the most cost efficient move in the long run. If you feel you're comfortable with DIY investing. Either way, you're making smart moves and what you're doing is absolutely amazing. So congrats on building up those accounts. That's absolutely amazing and fantastic. And I love to see that you're investing. So this is really, really great. And again, let me know what you do and love to see your progress in the future here. All right, so now what I'm going to talk about a little bit here is voice print scams. And this is going to be something that is coming up more and more and more.

• 40:39Andrew Giancola?

  So what you'll notice is that as of late, there are a lot of spam calls that come in. And there are people in this, there's two types of people in this world. People that will answer every single phone call that comes to their phone. And you know who you are, if you're one of those people, maybe you're in sales or something like that. And so you have to always answer your phone. And then there are people who answer 0% of the calls that come in, unless they actually know the number of it's their mom or their dad or something else. You are either one or you are the other. There's no in between there. And so for a lot of folks out there who answer their phone a lot, they are becoming susceptible to voice print scams. Now, what is a voice print scam? Basically, what it is, is these scammers will get your information online and they will

• 41:22Andrew Giancola?

  call your phone and they'll get your information from these data brokers and they will call your phone and when they call your phone and you answer and you say hello, or you say hello, this is Andrew, and you continue to say hello a few times, they will start to record your voice. And what happens when they record your voice? They can now utilize AI with your voice to start to scam you and/or other people in your family. And so this is something that has been happening more and more and more because they have what they call your voice print. So it's like a fingerprint, only it's the sound of your voice and they can take that information and have full-on conversations that sound just like you. And so this is something that is growing more and more and it's kind of scary how good it is getting where it

• 42:04Andrew Giancola?

  sounds just like you. So recently, I just had a friend who had a voice print scam happen to their spouse. And so all of a sudden, they got a phone call and it was their spouse's voice on the phone. Luckily, their spouse was sitting right next to them, so it didn't work, but their spouse's voice was on the phone and it was telling them, hey, I need you to send me money right now. I'm in trouble. And so it was one of those things, they were trying to push urgency on you upfront and their spouse was asking for money because they were in trouble. And so this is something I think that, for me specifically, I have a podcast, like I am susceptible to this no matter what. People could take my voice any which way, form you're listening to me right now and it could be taken anywhere. But for those of you who are trying to protect your financial information online and really

• 42:46Andrew Giancola?

  have a really bulletproof financial protection plan, this may be something that you at least want to inform family members that is happening. And if not, you want to kind of limit some of that voice exposure online and publicly based on some of these phone calls coming in. So if you have random phone calls coming in and you don't know who it is, I would try, unless your job entails that you need to answer them, to not answer them for this specific reason. Now, to make sure that this happens less, here's a couple of things that I would do. One is limit, like I said, your voice exposure online. Two is to screen unknown calls and use text instead. So if somebody calls you, you gotta wait for them to either text you or leave a voicemail to see exactly who it is. Three is you can watch out for red flags and calls. So if a caller wants to verify your personal

• 43:30Andrew Giancola?

  information, or if it's urgent or emotional requests, like what my friend just went through, that's another big one. Or if the caller sounds like a relative or friend, but something feels a little off, that's most likely a situation where you want to ask them a personal question that only you two would know, and that would help you in that situation. And then report any suspicious activity. It's gonna be really important. Now, if you want to get your information off of these lists, if you want to decrease the likelihood that your information is going to be on these call lists, then you need to make sure you get your information removed from those data brokers. Those data brokers are selling your info, and there's not a lot of laws surrounding how they sell your info. And so this is something that a service like Delete Me can help you with. So Delete Me is my favorite service to get your personal information removed. We have been utilizing

• 44:15Andrew Giancola?

  them for years, and what they do is they go to those data brokers and get your information removed for you. So if you go to joindelete.me/pfp20, you can get 20% off of Delete Me. Again, Delete Me is an amazing, amazing service that can help you remove your personal information from these data brokers, because that's what makes you susceptible to all of this fraud. So I want to make sure that you guys are looking into Delete Me, and it is a service that I have been now using for years. They have been a partner of the show for years as well. And so you want to make sure that you get that information removed. So the final thought here is to assume that your voice can be cloned, and you want to make sure that you are taking preventative actions on that. Tell your loved ones, especially your elderly loved ones as well. They are most susceptible to this

• 44:59Andrew Giancola?

  because they will not detect those red flags as quickly. And so you want to make sure that everybody understands that this is another scam out there. I mean, I feel like every single month, there are so many scams going on at the same time, because of technology and AI is making this way more difficult, that this is just going to continuously be something coming out. So I want to kind of keep you guys informed as much as I possibly can, so that you can watch out for these red flags. Let's get to the next question.

• 45:23Andrew Giancola?

  All right, here is the last question. So I have been listening to your show for the last couple of years. I got a relatively late start, but seem to be doing decently well. Since listening to your show, I have accelerated my wealth by taking on some investment properties, maxing out my TSP 401k IRAs for the last two years. And one of the things you put out is to reduce your expenses. In this case, I have a rental in Florida and insurance has skyrocketed over the last few years. You are telling me, boy, it absolutely has. And I am currently with a bigger company, USAA, and the rates have nearly tripled over the last 10 years. I know you live in Florida and was wondering if you have any recommendations for an insurance company with a more reasonable rate. Although USAA's customer service is okay, I feel that I have paid in thousands and thousands

• 46:07Andrew Giancola?

  of dollars for one claim that I have been partially paid out. What is your experience, if any, with some smaller companies? I received much lower quote from companies I haven't heard of like Slide Insurance and MPX Insurance. An obvious concern is whether or not a claim will be filled in the event of something happening. Though this is a great question, and this is one that you definitely don't ever want to take insurance lightly in terms of what's going to be paid out. Now, here in Florida, we have dealt with some crazy hurricanes over the course of the last couple of years. It's most likely just going to continue to keep happening. And so we want to make sure we have the right insurance in place that is actually going to pay out. And so first of all, thank you for the kind words that you're listening to show. That's absolutely amazing. And your progress, the stuff that you're doing there is absolutely fantastic as well.

• 46:50Andrew Giancola?

  Seeing that you are maxing out those retirement accounts, you're investing in rental properties, that is so cool to see you kind of go there. So when it comes to smaller insurers, it's definitely a good idea to look into smaller insurers. And companies like Slide Insurance and MPX Insurance can sometimes offer lower quotes in the bigger's name. But as you rightly pointed out, it's important to consider customer service and whether claims will be honored. So here's how I approach it is first, you can look for financial stability ratings for some of these smaller companies. So things like AM Best or Moody's have some great financial stability ratings. And if they're financially sound and able to pay out claims if needed. You can also check customer reviews. So obviously, most insurance companies are not going to get reviews.

• 47:33Andrew Giancola?

  And so they may have some bad reviews, but you can look at like Yelp, TrustPilot, or the Better Business Bureau to see if you can get a good sense of their reputation. And then also, what I do is you can consider local-based Florida companies. So there are folks like Citizens Property Insurance. So Citizens, I have some policies with. They've been good so far. There are Florida Peninsula Insurance, or Tower Hill Insurance is another one, is a Florida-based provider with good customer feedback. And so some of those, you can look at local Florida insurance providers. Now, what you can do is you can find an insurance broker who kind of deals with all of these, and they can help you and talk you through this. So for example, my insurance agent, he deals with tons of different insurance providers. So he's not just with like State Farm, for example, or just with Farmers Insurance, or whoever else.

• 48:17Andrew Giancola?

  He actually can kind of go to a bunch of different options out there for some of these local-based companies. And so he can go to Citizens, he can go to Florida Peninsula, he can go to Tower Hill, he can go to all these different companies all at once. And he gives me more information in terms of just how this works and how this operates. And so that is one, I think, for sure, that they will help you shop around if you can find a insurance agent who is not just stuck to one thing. And so if you want his information, shoot me an email and I'll send it over to you. But you can look at those levels of deductibles and kind of see the claims process and how responsive they are to customer service. That's the big thing that you want to note, is how responsive they are to customer service claims and who is the most responsive. Now, ultimately, insurance should be about protection and not just price.

• 49:02Andrew Giancola?

  And so it's not always pricing when it comes to this, but if you're paying out the wazoo and you're getting way lower quotes, then it may be worth it. So for example, I actually pay more for my car insurance than I need to because the folks who handle my car insurance are very, very good family friends. So I have had accidents in the past where we're with State Farm. I had accidents in the past where someone else has hit me, or they have sideswiped me, or they have rear-ended me. And this has happened multiple times now because I've been with them since I was 16 years old. And the other insurance provider is trying not to pay. They're trying not to pay the claim. And they have fought tooth and nail for me to be able to get that claim paid. That's a situation where it's 100% worth it to pay more and it's 100% worth it to keep the business with my friends.

• 49:47Andrew Giancola?

  But if it's a situation where you're not getting that service and you feel as USAA is not giving you that service, that's another reason to think through, maybe I should adjust that a little bit. So in any event, insurance is not always about price. It's always about protection and making sure your wealth is protected. But at the same time, reducing some of those costs, if you're not getting the benefit is a great thought. And so my favorite option is to go to an insurance broker like from my home insurance is another friend. And he again, deals with all these different companies all at once. So he's not just with one provider like State Farm. He's with a bunch of different companies at the same time. And so that's how I would think about home insurance some. And that way they can help shop around your policy and get you the absolute best rate. That's what they do is they try to get you the absolute best rate.

• 50:31Andrew Giancola?

  And that is the most helpful way to kind of think about this. So if you have any questions on that, please let me know. But insurance is a beast right now. I think it was the highest increase in costs over the course of the last couple of years for most people. And so we got to make sure that we are looking at those costs because it could be a very big difference. Well, listen, I hope you guys got value out of this episode. I truly appreciate each and every single one of you listening to this episode. And if you're getting value to this episode, make sure you hit that follow button. Make sure you leave us a five star rating review and share this episode with a friend. Cannot thank you guys enough for being here and we will see you on the next episode.

• 51:19Speaker 02

  At Edward Jones, we believe rich is more than caring about the latest and greatest. It's also taking care of what gives your life meaning. That's why your dedicated financial advisor meets you where you are with personalized financial strategies that help protect what matters so you can preserve your progress while creating a path forward. The key to being rich is knowing what counts. Let's find your rich together. Edward Jones. Member SIPC.