Three Phases of Retirement and Defining Success


The Critical Stages:

Mark Elliot: Welcome to the Retirement Income Show. I’m Mark Elliot here with the CEO and founder of Oak Harvest Financial Group. That of course is Troy Sharpe. Troy’s a certified financial planner professional, and of course, over 300 videos are available now on their YouTube channel, just search Troy Sharpe Oak Harvest, and you will find them, all kinds of topics, all kinds of things that they cover, finance-related, retirement-related, just tons of information.

There’s no cost to you. It’s absolutely free. It’s there for your information, things you want to know more about. You can always check out the YouTube channel with Troy Sharpe and Oak Harvest.

If you want to just find out more about Troy and the team right now, go to their website, and you can always call with questions or concerns. The team is here to help you. They just don’t know if they can help you until they hear from you. There’s no cost for this (800) 822-6434, (800) 822-6434. Of course, Oak Harvest is located at 920 Memorial City Way, right off I-10 and Bunker Hill.

If you’d like to learn more about the retirement success plan that the team will create in conjunction with you because you’re the CEO, it’s your retirement, there, the chief financial officer to help guide you through this. You can always give them a call again at (800) 822-6434.

Troy, today, we’re going to talk about some critical stages that we need to think about or take when it comes to our pre-retirement phase. It really is interesting, if you retired in 1990, the markets were great that decade. If you retired in 2000, that next decade is going to be a real challenge to retire, and so there’s a lot of things that go that we need to consider, I suppose, when we’re leading into that retirement time. Are you talking pre-retirement, is it a 5-10-year period? What’s the timeframe here?

Summer adventure

More than just Investments…

Troy Sharpe: Yes, we talk so much about retirement, and what do we need to do in retirement as far as what– first off, how do you define success in retirement? It’s more than just the investments. It’s where do we get our income from, it’s how do we pay less tax, it’s what are we doing about healthcare, prior to 65, then of course, once Medicare starts, we want to make sure we don’t creep into what’s called those IRMAA brackets. That’s I-R-M-A-A, it stands for Income Related Monthly Adjustment Amount, and it’s an excise tax essentially on your Medicare premiums, if you’re not careful with your income levels in retirement.

Of course, we talk about the estate planning side of things, gifting to kids and grandkids and setting up trusts. If there’s state tax concerns and how do we maintain control, but yet still have asset protection? All of these things we talk about on the Retirement Income Show here. We’ve always primarily focused on that retirement phase, but the pre-retirement phase is what sets you up for success, once you get to retirement. Really, it could be as early as 10 years before you anticipate retiring.
Now, you should really get serious once we get to that five-year mark, and if you’re like most people where one day you wake up and you say, “You know what? I think I’m retiring in a week or two. I probably should go talk to someone.”

Well, that’s still better than nothing, but the sooner you start to position certain assets, inside certain accounts, and you start to look at retirement as a blank canvas. That’s really what it is, and unfortunately, the longer you wait to start to paint on that blank canvas, the more limited your options are.

First off, there’s three distinct phases in your financial life cycle. You have the accumulation phase, and that is from basically the time you start working, it could be 13, 14 years old, maybe it’s 18, 19, maybe it’s 25, 26, but as soon as you start working, we want to build good habits. That is one of the most important things you can do as a young man or woman when it comes to a determinant of your financial success later in life, is building those good habits and the best thing that you can do when you’re young and working, you’re in those earning years, is create the habit of paying yourself first. We want to save, we want to start to put money aside, but we have to pay ourselves first.

We don’t wait until the end of the month, and then, okay, well it’s time to put some money into my savings account or my investment account. When those paychecks get directly deposited biweekly or whatever that pay schedule looks like for you, you should have an automatic recurring transfer set up in your bank account a day or two after that money hits your bank account from your paycheck to go into your investment account.

You can even set up an automatic investment program with a lot of these investment accounts out there now, so you don’t even have to log in to get that money invested. That’s the first stage of your financial life cycle, the accumulation phase, the working years, where your life is pretty complicated. You’re raising children, you have to go to job, you’re fighting traffic. You’re doing all the things that really, they’re amazing, they’re fun, they’re interesting, but life is a bit more complex then.

The financial side of things in the accumulation phase is pretty straightforward. You want to save as much as you can, and make sure you pay yourself first , and then understand that you have a very long time horizon. Generally speaking, you should typically want to lean a bit more towards the equities in your investment portfolio because history has shown us over long periods of time, equities outperform bonds and T-bills and CDs and cash, et cetera.

The financial side of things pretty straightforward. You shouldn’t be day trading, you shouldn’t be in and out of your mutual funds. You shouldn’t be really actively managing those accounts. I know that’s easier said than done, but the truth is in the accumulation phase, just by the S and P 500 by the NASDAQ, by the Dow, buy something and just passively own it for the next 40 years. Odds are pretty much stacked in your favor, that if you do that, you’re going to see that wealth grow over time.

Now, once you get to the pre-retirement phase, this is depending on when you start, we really need to identify a few different things. This is what it’s like here at Oak harvest Financial Group. When someone comes to see us and they’re 50 years old, maybe you’re 47, maybe you’re 55 or 58 or 61, but the first few things we have to identify when we’re planning for that day, when your paycheck stop is how much have you have saved or how much do you have saved, and where is that money saved at? Is all of that money inside your tax infested, 401(k) at work? Well, if that’s the case, we need to start to look at what does that mean once you have to start providing your own paychecks? How much income do you need? How do we expect that income need to increase over time? Meaning we need to pull more out, and what does the taxation situation look like?

The first two things we really need to identify are, how much do you have saved? Where do you have that money saved? Do you have anything in non-IRAs? Do you have anything in your Roth accounts? What tax bracket are you currently in? What type of match are you getting from your 401(k) or your employer into your 401(k)? These are the things that once we’ve identified where you’re at, then we can start to have a conversation about where you want to be. Then it’s really an analysis of the decisions that we have to make, that can improve the retirement picture.

For many people, it’s a light bulb moment. You’re driving down the car, you’re up at night in bed, you wake up in the morning, and all of a sudden, it hits you that, oh my goodness, the paychecks are stopping. Whatever money I’ve saved, I have to figure out how much I can take out. I have to keep up with inflation, I have to pay taxes on these distributions. Whatever I take out of my retirement account, I have to pay taxes on. If you retire prior to 65, now you have to figure out the healthcare situation, and if you’re 60 years old, health insurance premiums in this country can run you a thousand dollars per month per spouse. If both spouses are retired at 62, you could easily be looking at $24,000 a year, just in health insurance premiums. That doesn’t take into account your copays, deductibles, out of pocket costs, et cetera.

This light bulb moment is when everything just hits you, how much income, the tax you’re going to pay the healthcare situation. What about social security? Should I take it early? Should my spouse take it early? Should I defer? There’s so much conflicting advice by generalists. If you go onto the internet or if you’re talking at the water cooler, it’s all of its general information.

What you need in the pre-retirement phase is a specific, customized, tailored strategy for saving, contributing to the Roth, to the pre-tax part of your 401(k), determining what makes the most sense there. Looking at the tax analysis, understanding a little bit about Social Security, and what the probabilities are of having certain levels of income, and sustaining them throughout retirement, if you take it at 62, versus full retirement age or deferring all the way out to age 70.

Understanding some of the tax traps in retirement, that can really come up and bite you. The sooner you start preparing for that, the sooner you’re going to be.
It’s really a two-part process. One, it’s an ongoing education and learning, learning though about things that are specific to your situation. Not just learning from articles on the internet that’s generally covering a topic because you’re not like everyone else, you’re not like your neighbor, you’re not like your coworker, you’re not like someone at your church. You’re unique, you have a different amount of assets, you have a different need, you have different health, different longevity, different goals. The plan, and the advice that you’re receiving, it should be customized if you want your retirement to be optimized around who you are, and what you’re trying to accomplish. That is what we start to talk about here when we’re laying that foundation for your retirement success plan.

I should say, retirement success is about a lot more than just the Xs and Os or the finance part of it. A successful retirement is being able to comfortably, this is my definition, being able to comfortably enjoy every dollar that you’ve saved, without the fear of running out of money, while also taking care of your family, your spouse, your children, if something were to happen to you. If you can have a plan that does that, and allows you to sleep comfortably at night, and allows your spouse and your family to sleep comfortably at night, knowing that all that hard work you’ve put in all the years that you’ve spent saving, there is a strategy in place that gives you the income you need, multiple streams of income, this is what we want to see, that allows you to continue to live your life, and if something happens to you, your spouse can continue to live their life for as long as you’re both living.

That’s the foundation of a successful retirement plan, understanding those core concepts, but then executing, putting tools and financial strategies and tax strategies together in one coherent flowing plan, is how you bring that vision, that dream, the retirement success foundation we just talked about, the financial tools and strategies that we overlay to help that come to fruition. That’s what a retirement success plan is, and that’s where we want to get started with you in the pre-retirement phase.

Most often people call us right before retirement or, “Troy, I got laid off last week,” or, “I finally retired and I’m coming in to see you.” That’s great, we can help you in that situation, but if you come in to see us 2 years before retirement, 4 years, 5 years, 10 years before retirement, there’s so much more that can be done. That’s what I want to encourage you to do, is to give us a call at 1-800-822-6434, set up a consultation with one of our advisors. We have chartered financial consultants, Certified Financial Planner professionals. We are here first and foremost to be a planner of your vision, and then to help you understand how the various financial tools and strategies, working together in concert with one another can help bring that vision of successful retirement into a reality for you.

A few ways you can sit with us. One, you can come down here to Bunker Hill I-10, face to face, let’s sit down, let’s have a conversation, or we can have a Zoom meeting. If you’re listening to this, and you’re out of state, if you’re not in the Houston area, if you’re maybe in The Woodlands if you’re down in Friendswood, or League City, we can have a Zoom meeting, get to know each other, see if we’re a good fit for one another. Then we are going to invite you down here to HQ, we want you to meet the team, it’s a big decision for you.

We want to make sure that we’re working with people that we feel comfortable working with as well, so it’s important that we do get to meet each other. That’s how it starts, just reach out to us, let’s have a conversation, let’s get to know each other a little bit, and see if we can start to lay that foundation for a successful, or I should say, a retirement success plan for you.

1-800-822-6434, contact us on the web at and of course, visit the YouTube channel. Tons of content for you to watch on your own time, just go to YouTube, search Oak Harvest Financial Group and enjoy the content that we’ve spent hundreds of hours, thousands of hours creating, when you talk about post-production and, and so forth. 1-800-822-6434, look forward to seeing you soon.

Mark Elliot: We’re talking about critical steps in the pre-retirement phase. We’re talking 10 years out from retirement, 5 years out from retirement. What are those steps? Troy’s going to go into more depth as we move along today on the program. Glad you’re with us for the Retirement Income Show with Troy Sharpe, the CEO and founder of Oak Harvest Financial. Back with more, right after this.

Investment Advisory services offered through Oak Harvest Financial Group LLC. Oak Harvest Financial Group is an independent financial services firm that helps people create retirement strategies using a variety of insurance, and investment products. Investing involves risk, including the loss of principal. Any references to protection benefits, or lifetime income, generally referred to fixed insurance products, never securities or investment products. Insurance and annuity product guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.

Oak Harvest Financial Group LLC is not permitted to offer, and no statement made during this show shall consist tax or legal advice. You should speak to a qualified professional before making any decisions about your personal situation. We are not affiliated with the US government or any governmental agency. This radio show is a paid placement.

Three Phases of Retirement and Defining Success
Three Phases of Retirement and Defining Success

In retirement, when should you start thinking about retirement and what a successful retirement means to you? What are the three phases of retirement? Success means something different to each of us, and have you defined what that means to you? Working with a CFP® professional can be an important step toward reaching your financial goals. Not only do these advisors meet rigorous education and experience requirements, but they are also held to some of the highest ethical and professional standards in the industry.