- And good evening.

You've got More Than Money.

You've got Gene Dickison, your host, your personal financial adviser, offering you all of my 780 years of experience.

How is that humanly possible?

It's one of life's great mysteries.

It's kind of like, how do they pull off Musikfest every year?

Millions of people, and it's still fantastic.

That's a mystery!

It's a fabulous one.

Kind of like our experience that we offer you.

A little tongue in cheek, but you've come to expect that.

If you're a loyal viewer of More Than Money, you know that we take our answers, our service, our information to you very, very seriously.

We don't take ourselves very seriously at all.

So hopefully, as you stay with us for the next half an hour, you're going to learn a lot.

You're going to maybe pick up a couple ideas that you can use yourself.

And on occasion, on occasion, you'll be mildly entertained.

We hope all of that for you.

If you're joining us for the very first time, the title More Than Money is very important.

Of course, we talk about retirement, income taxes, estate planning, businesses, but we talk about you.

We talk specifically about the topics that are important to you, the kinds of issues that are keeping you up at night, the kind of questions that you ask, that you wish you had someone who you could trust, somebody that's experienced, somebody it's got 780 years of experience, and can explain these things in English, in words that are easy to understand.

There's no trick into making simple things complicated.

The real skill is making complicated things simple.

Does Gene have that skill?

I think we're going to find out here shortly.

We're going to welcome to the studio our financial correspondent and the young lady who brings us all of your questions.

That would be Megan.

Megan, good evening.

- Good evening, Gene.

How are you?

- Very well.

And how do we serve someone this evening?

- Our first question says, "My husband and I have been reading a lot "about retirement lately.

We're about five years away.

"One of the things we read says that people should spend 70% "of the pre-retirement income when they retire.

"How did they come up with that?

"It makes me nervous thinking we need to "make cuts in our budget.

"What guidance do you give your clients?

"Thank you for your excellent show."

- Well, thank you.

The show is only excellent because of folks like you who asks really, really appropriate questions, really important questions.

Let me be clear.

What you're reading is what is being taught to incoming, what, new rookie financial advisors, and has been taught since my training 780 years ago, when all the training was done on parchments and quill pens.

So, bottom line is, it is a very common rule of thumb, academically driven.

How do they come up with it?

I'll explain that here in a moment.

Is it appropriate?

The answer is no.

That might be a little shocking because what I am advocating is all of those "experts" are wrong.

That is true.

Rules of thumb very often meet the "average", and it's very hard, very difficult, sometimes impossible to find anybody who's average.

Everybody's just a little different.

So, with all of my experience, I have the advantage in the real world of meeting three different couples, all of which had pre-retirement income of approximately $100,000.

And if they followed the academic guidance, they would be needing to prepare in retirement to have a budget of $70,000 a year.

In my experience, these three couples are very different.

Their income is the same, but they're very different in many, many ways, including their spending.

Couple number one spends... All right, I'll throw 'em a bone, exactly $70,000.

Kind of hard to believe, but yeah.

Couple number two spends $30,000.

Couple number two is very frugal.

They have been their whole lives.

Their parents were products of the Depression.

They learned to reuse and re-save, and re-employ, and make do and be creative.

And they've had a wonderful life.

And they spend 30,000 of their $100,000 income.

And the last couple, they make $100,000, and they spend $110,000 every year.

And you say, "Whoa, Gene, how is that possible?

"They can't be nearing retirement spending "more than they make."

Oh, sure they can.

And many people do.

If somebody walks into our More Than Money world headquarters and says, "We just refinanced, we're 65, we just refinanced "our mortgage for another 30 years.

"And that's our third refinance."

I can assure you they are spending more than they make.

If they come in at 65 and they have a mortgage, and they have credit cards and two car loans, and a home equity line of credit, they are spending more than they make.

And here's the interesting...

I will tell you, it is, in my observation, interesting conclusion we can draw.

The first couple, in retirement, will spend $70,000.

The second couple, in retirement, will spend $30,000.

And the third couple will never be able to retire.

It's just that simple.

So, our guideline to everyone, and when we interview someone initially in our More Than Money world headquarters, we have a series of questions we explore.

And one of the questions is, what's your budget?

What do you spend on a monthly basis?

And nine out of ten people go, "Gosh, I don't really know.

"We haven't really put pencil to paper."

And that's perfectly acceptable.

At some point, you need to, you need to understand, where are you on this spectrum?

I spend about 70%, I spend way less, I spend way more, because that's likely where you'll be in retirement.

So, if you find that, indeed, after going through your budget, 70% works, that's coincidental.

But if you find 30% is your number, as much as you would like to think, as much as you would like to convince me that in retirement, you'll have lots more time, you'll travel, you're going to spend, spend, spend.

I can assure you that has not been my experience with my clients.

My experience with my clients is, if you've got somebody who's frugal, they're frugal.

And if you've got somebody who's got a good common-sense approach, and they spend appropriately, they're going to stay exactly the same.

And the third couple that spends more than they make, they're never going to retire because they can't afford to.

Hoo, Megs, good question.

That was a really good start.

What's next on the agenda?

- Our next email says, "I'm hearing a lot about I-Bonds, "which are paying 9.62%.

"This almost seems too good to be true to me.

"I know that 10,000 a year is the maximum that I can invest, "but that seems perfect for me.

"Are there any drawbacks to putting most of my savings "into I-Bonds while the rate remains this generous?

"I understand that the rate can change if the inflation rate "drops but that's not happening tomorrow."

We have a couple of questions here.

"Can I withdraw full or partial amounts at any time?

"Do I pay taxes on the interest rate each year, "or only when I withdraw?

"Does each deposit become a separate bond like CDs, "or does all the money go into one account?

"And lastly, does the money need to be held for a fixed "amount of time?

Thank you for your guidance.

"I enjoy and appreciate your show every week."

- Ah, you're very kind, we appreciate you.

And we appreciate you sharing your question with us.

Indeed, I-Bonds have become quite the topic of conversation this year as inflation has hit a...50-year high.

Wow!

No surprise to anybody out there watching, that inflation is so high.

Gasoline prices, of course, utility rates through the roof.

Food prices, all you do is go shopping.

That will convince you.

So this is not a surprise.

What may surprise some people is that the federal government does offer the direct purchase of inflation-responsive bonds, I-Bonds.

Direct purchase, that's key.

You don't go through an adviser.

You don't go through a broker.

You don't go through E-Trade or an online trade.

Excuse me, you go on TreasuryDirect.com, and you go directly to the Treasury, ironically enough, and you purchase up to $10,000 per taxpayer per calendar year.

So, a married couple can buy 20,000.

An individual can buy up to, you don't have to buy the full amount, up to 10,000.

And, since we're getting relatively close to the end of the year, it's only a few months away that in the January 1st, if you wish, of the new year, you can do it again.

So, if you have 30,000 in savings and you want to go 10,000 now, 10,000 in just a few months, and keep 10,000 in your savings account, that likely will work very well.

You must leave the money in minimum of one year.

The maturity is five years.

If you decide to take it out shorter than five years, you will pay, you will forfeit.

It's not a penalty, so to speak, but you will forfeit three months of interest.

The interest is adjusted every six months.

It has already adjusted since this gentleman sent his email to us.

It's down to 8.5.

Still a very high rate of guaranteed return, particularly compared to the banks that are very, very low, almost across the board.

So, eight-and-a-half currently, that will be for six months, and then it will reset.

Gentleman supposes that inflation won't drop any time soon.

It depends on what you mean by "drop", and what you mean by "soon".

We have some folks that we trust, that we get intelligence from, economic intelligence, investment forecasts, etc.

They seem to believe that over the next six months, the inflation rate could drop to as low as five-and-a-half.

That's still very, very good.

So, that would mean in the first year, you would get the average of eight-and-a-half and five-and-a-half.

So you'd be getting, what, around 7% return overall?

Wonderful, wonderful!

And then, decide where to go from there.

Should you put the bulk of your savings into an I-Bond?

I think no.

I think you need to be very thoughtful about how much money you need to keep in your savings.

Keep liquid, keep safe, keep guaranteed, keep easily accessible.

Everyone needs a cookie jar, everyone needs easily-accessible emergency funds.

Be very carefully, carefully planning out how much you need personally before you commit the money to I-Bonds.

And then, once you know the number, Treasury Direct.

Knock yourself out.

Nice, simple, easy way to get a high rate of return.

Sadly, we have to go through a very painful time paying very high prices for lots of very necessary items in order for I-Bonds to pay such high interest rates.

But, since it's already here, you might as well get a little something in return.

Speaking of "return," let's return to the mailbag and find out what's next for us to answer.

- Our next question says, "We've been looking at reverse mortgages.

"My wife and I are both 67 and recently retired.

"It seems to me that reverse mortgages are such a good deal.

"Lots of money that you don't have to pay back.

"So I'm wondering, why doesn't everyone do them?"

- Goodness!

That's... That's kind of the opposite of the questions that we typically get about reverse mortgages.

People go, "Oh, it sounds too good to be true.

"I don't think I'll do them.

"There's got to be problem, problem, problem."

And the answer is, neither are they perfect, or are they dreadful.

They simply are.

They're a financial tool.

And, like any tool that can be used for good, that can be used for evil.

Chainsaws, great to cut down a tree.

If you're painting your fence, not a great tool.

Paintbrush is great for painting your fence.

If you've got something in your eye and you want to brush it out, that's not a good idea.

So, there's lots of pros and cons that will focus in on whether a particular tool is useful or not, gets you closer to your financial goals, or not.

A reverse mortgage for folks who have not yet had the opportunity to kind of explore them, allows you, generally speaking, folks who are 62 or older, who own a home, their primary residence, to borrow up to approximately half of the value of their home and have no mortgage payments.

There are no required monthly payments.

The mortgage is paid off when you leave the home, either voluntarily or involuntarily.

Then is when the mortgage is paid off and the mortgage is paid off the amount that you borrow, plus all the accrued interest.

So, that description actually gives you some ideas about where reverse mortgages would fit nicely.

"Hey, I'm 67.

We're retired, we have our home.

"We can get free money, we don't have to pay it back.

"It's going to make our retirement more enjoyable.

"We're going to pay our real estate taxes more easily.

"We're going to have renovations to our homes, "so we can age in place, maybe put in a ramp, "widen some doorways, make the kitchen cabinets "a little lower."

All these can be wonderful things if the reverse mortgage is appropriate.

Reverse mortgages come with fees, and they generally are packed in up front.

So, not surprising for some reverse mortgages to have fees of 3-5%.

So, if you're borrowing 100 grand, it may cost $5,000.

That leads us to the first category of folks who should not do a reverse mortgage.

If you're going to do it for short term, it's not a good idea.

If you think you might move in the short term, not a good idea.

If you think you might pay it back in the short term, not a good idea.

If you have an adult child living in the home that will need to continue living in the home when you're gone, not a good idea.

If you have a child or a beneficiary who would love to live in your home when you are no longer there, it's a legacy, it's a family heirloom, it's the family estate, not a good idea.

if your health is not good and you may be leaving the home sooner than you wish, not a good idea.

So, there are lots of reasons why a reverse mortgage is not perfect.

There are lots of reasons why a reverse mortgage can be very beneficial.

What's right for you?

The only intelligent way to tell is to sit with a trusted, experienced, reverse mortgage expert, hopefully alongside a financial advisor that you trust, as well.

Explore how it works.

Explore the various programs that are available, explore the pros and cons, and pick what's best for you, including the option that we don't pick any.

We won't use it at all.

Excellent question.

Very interesting.

Megan, do we have an interesting one next?

- We do.

This one is awfully sad, but I know you'll be able to help them.

It says, "My wife passed in early 2020.

"We were married for 41 years.

"The last couple of years have been hard, but I get a lot of "support from my family and my church family.

"Sundays are my best day of the week.

"I figured you would understand.

"I'm going to retire at the end of this year, and I was "wondering if I need to do anything differently, being "widowed, as opposed to folks who are married.

"Thank you for your show, and for not hiding your faith."

- Ah, you're very kind, and our prayers go out to you.

It can't be easy.

And I can't pretend to say that I understand.

I don't.

Saw my mom lose my dad.

I've lost my mom, lost a lot of family, lost a lot of friends.

Several very close friends recently.

It's a challenge.

But you're right.

Faith can be incredibly uplifting.

And I absolutely understand that Sunday could be your very, very best day.

So, my challenge to you, my prayer for you, is that you make every day Sunday.

Make every day your best day, make every day some part of your faith, some part of your family, some part of your church family.

Maybe it's breakfast at the diner.

Maybe it's walking the rail trail.

Maybe it's pickleball!

I hear good things about pickleball.

But make every day Sunday.

Make every day Sunday.

And honor the memory of 41 years by being your best.

Until, in a blink, in a blink, and it doesn't matter if it's 30 years, it's still a blink, in a blink, you're reunited.

Yes, there are a number of things that you need to be concerned about as a single person in retirement that married couples have far less to worry about.

Married couples, to be blunt, can literally ignore all the good advice that's out there.

And there's still probably going to be okay.

One spouse dies.

The surviving spouse almost inevitably will inherit everything.

Pensions, they get a stepped-up Survivor Social Security benefit.

There's little or no taxation.

There's just so much going on that is automatic protection for spouses.

One of the key issues particularly with spouses, or in your case someone who is single, is the possibility that in your senior years, you will need care, you will need assistance due to loss of health.

And again, married couples, they tend to be able to, in many ways, help support each other and care for each other.

That's not an option for you.

So, you need to make sure that you have a very clear, very practical long-term care plan in place for yourself.

That might mean insurance.

That might mean a different approach to your investments.

It might mean a reverse mortgage.

It might mean a combination of all of those things.

It might have something to do with your family, may have something to do with your church family.

There are lots of different things you need to explore, including the potential use of a CCRC, Continuing Care Retirement community.

We have some wonderful ones that we're familiar with, not just in in the Valley, but across the country.

There are some spectacular programs out there, facilities out there where when you're healthy, you live independently, and if you do need care, if you need care, all that care can be provided right there.

And it's, in most cases, assured care.

You can't outlive it.

So, that's something you need to explore.

The other thing you need to explore is your estate plan.

It's not good enough to go, "Well, it'll go to my spouse."

You've got to make sure you're working with a trusted, experienced estate planning attorney.

Make sure that you understand exactly what your options are, in terms of your beneficiaries.

You are committed to your church.

Perhaps you want to fund something important for your church.

Perhaps it's children and grandchildren.

It's not important that I know.

It's important that you know.

That you decide which people, which institutions, which organizations you want to support.

Because if you die without a will, somebody else will make those decisions, and it's not going to be anywhere close to what you would prefer.

I hope I've helped a little bit.

I think we've kind of gotten you going in the right direction.

And, of course, as you're traveling down the path, if you need more assistance, all you have to do is ask.

Just send us the email.

Wow.

God bless.

Megan, who can we serve next?

- Our next question says, "My husband and I retired almost four years ago.

"I'm 71.

He's 73.

"We went from a great economy and really good returns on "our money to what we have today, which is a mess.

"I'm the one in our family who looks after our financial life, "and I'm really concerned that I'm making mistakes.

"When we retired, our advisor told us we could take 4% out "of our investments every year and be in great shape.

"That worked fine the first three years, but this year, "our investments are down, and we're still taking money "out at a rate that scares me.

"I'm wondering what changes should we be making "so that we don't run out of money?

"Thank you for your help."

- Bless you.

Lots of folks, first of all, take some comfort in knowing you're not alone.

There are hundreds, millions of folks feeling exactly the way you feel right now.

First change we're going to make is we're going to get your husband involved.

I get that in every marriage, different people take the lead.

I get that.

I happen to be married to a tax accountant.

She likes taking the lead financially.

I like that she does that.

But I'm informed, I'm side by side.

I understand the decisions.

I am supportive.

I understand when there's challenges, I want to be there to support her in that challenge.

It doesn't sound like you're getting the support that you need If you wish, I will talk to your husband.

Might be easier for me.

But bottom line is, yes, you need to face this together because this is as much an emotional challenge as it is a financial challenge.

Now, I don't know the depth of the challenge.

I don't know if 4% income is mandatory.

"We have to have it to pay our bills," or is it possibly, "hey, they said we could take four, so we do."

We, in our More Than Money world headquarters, we have clients who take 4% a year and their savings accounts are growing, growing, growing, growing.

And it makes them very happy.

It makes them smile.

But if their savings accounts are growing, they don't have the heartburn that you do, because they have that extra resource that they can draw on when things get a little tight like it is at the moment.

And you're right, the world does seem a bit crazy.

You're absolutely right.

However, it's not going to be crazy forever.

Spring follows winter, and it will again.

Stock markets that have gone down have gone back up.

Every single time.

We don't know exactly when.

We don't know exactly how fast.

We don't know exactly how high.

We are not psychic.

And anyone who claims to know the answers to any of those questions is not psychic either.

Psychotic, perhaps.

Criminal, perhaps, but not psychic.

It is not in our skill set as humans to know even the next two hours, let alone the next two months, next two years.

So, whatever you decide must be done, it's got to be based on a strategy that fits the realities of our world.

We don't have psychic abilities.

There are investments that are very aggressive and very volatile.

There are other investments that are very conservative and very stable.

And you may need some of each, you may want to push all of your investments directly into the most stable, the most conservative.

And indeed, there are platforms, investment platforms that would guarantee you, guarantee you 4% spendable on your investments for as long as either you or your husband should live.

So, if you're looking for the ultimate in peace of mind, and you absolutely need 4% return on your investments in order to make your bills, be happy, be healthy, be aware you have options that would allow you to invest your retirement funds, pull a guaranteed 4%, perhaps even more, on a annual basis for as long as you should live, as long as either of you should live.

So you have options.

Don't feel that you're, kind of, in a straitjacket, or you're in a box.

I would suggest one of the first things that you might consider doing is getting a second opinion.

If your financial advisor has kind of watched this happen and not be giving you some options, "Hey, we could be doing this.

"Hey, this might be a little different.

"Here are some suggestions how to best handle this downturn," Then maybe the financial advisor you're working with isn't the right one for you.

And maybe he or she is.

The point is a second opinion would explore that and maybe give you some fresh perspective on some of the options that you would consider going forward.

I hope I've helped a little bit.

I understand the anxiety and the agita that these kind of times present to so many people, so very many people.

But to be fair, an experienced, trusted financial advisor can change a lot of that almost overnight, and hopefully will for you.

Folks, we just have seconds left in this edition of More of the Money.

I hope you've learned a lot, you were mildly entertained along the way.

I hope that you appreciate the depth of the kinds of questions, the kinds of challenges that your friends, your families, your neighbors are facing, and the help that's available.

And it's available right here.

Send us your emails... We'll answer every single email, and maybe one on a future show.

We'll see you next week right back here on More Than Money.

Goodnight.