Are you planning for your retirement with the confidence that you’re making all the right moves? In today’s episode, we’ll unveil the crucial income planning mistakes that could jeopardize your retirement. Tune in to ensure your retirement strategy is foolproof against common pitfalls and ready to secure your financial future.


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More About This Episode:

From underestimating how many years you’ll be retired to ignoring the impact of inflation, Ryan will highlight some important areas for pilots to watch out for throughout the planning process. He reminds us that even the smallest mistakes or oversights in your retirement planning can have serious consequences. So, click play to learn how to craft a financial plan designed to last decades, not just years.


Here’s some of what we discuss in this episode:

0:00 – Intro

4:38 – Planning to be retired for years instead of decades

6:39 – Starting Social Security too early

11:59 – Assuming bonds will be your main source of income

14:06 – Ignoring the impact of inflation

17:19 – Forgetting to create lifetime income streams outside of Social Security

17:19 – Failing to review and adjust your plan regularly



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Episode Transcription:

(Note, this is an automated transcription. Please forgive any errors.)

Walter Storholt  00:00

So are you planning for your retirement with the confidence that you’re going to make all the right moves? Well, in today’s episode, we’re going to unveil some of the income planning mistakes that we often see people make that could jeopardize your retirement and we’re going to show you how to craft a financial plan that’s built to last decades, not just a couple of years. These are the income planning mistakes you don’t want to make. back for another episode of the pilots advisor, Ryan, it is great to be with you again, my friend, and you’re in your new digs. still under construction, but new digs nonetheless, finally,


Ryan Fleming  00:35

in the new house, it’s been a long time coming. And it got so bad that everybody’s asking when we’re gonna move in. And I finally just started saying Wednesday, because I didn’t know what month I didn’t know what year. But it was just easier than saying no, we’re still not in there. But we’re moving in on Wednesday. But finally in here, we’re finally sleeping here should be my last move ever after being in the military for 20. Oh, that’s a good feeling. Oh, I’d like finally being able to settle. But yeah, it’s going to it’s going to take, you know, a month or two to get to get totally settled in because I’ll be honest with you. Another thing that we did, since my wife was still on active duty, and we’re moving every one to two, one to two years. We just stopped buying anything that was nice, because you know, every time you move, it gets beat up broken, what have you. So we just decided to save money and said, Hey, we’re not doing anything until we move into our final house. And so a lot of the stuff we’re buying is is new, which you know, kind of sucks spending all that money, but we’re finally going to have nice things.


Walter Storholt  01:36

Yeah. And realize you didn’t spend that money then for a couple of years that well,


Ryan Fleming  01:40

that’s the better ation part of it. We’re like, okay, but yeah, it’s still Yeah,


Walter Storholt  01:44

still a little bit painful. felt the same way with our couple of recent moves. We lost a lot of items because we did two moves pretty short together. But we were smart in that one year that we were renting a home before moving into our current house of Yes, same principle. We didn’t hang anything on the walls. So we just lived in kind of a blank home for a year didn’t buy anything new that wasn’t we went to like, you know, hammered down furniture to outfit the rental place. And then when we got our new houses when we went through that same routine, spend a little more than you wanted to, but made everything better. So well. Congrats on moving into the new house. And I know your background and your setup will will morph and change as you get more settled in. But I see you prioritized making sure you got that the plane model and everything set up quickly


Ryan Fleming  02:25

got to have the airplane stuck back there little Air Force stuff from back in the day. I was actually just having a nice conversation here with Walter about how I can up my game and be like him as he’s the professional look at all the lighting back there. And and he does have a cool hat on though. Do you guys noticed the hat he has on?


Walter Storholt  02:43

Yeah, I need to tilt a little further down so you can see it. Look at that. Visor swag. I don’t have my cup. I think it’s in the in the dishwasher at the moment. But normally got that on standby to you’re


Ryan Fleming  02:54

finally moving up in the world looking good,


Walter Storholt  02:57

right? That’s right. Hey, I’m just happy to be able to wear a hat to work. This is fantastic. So


Ryan Fleming  03:03

join in on you do it.


Walter Storholt  03:05

Why not? We shouldn’t we


Ryan Fleming  03:06

should match, we probably needed to get a little bit of a haircut anyway. So


Walter Storholt  03:11

that’s all I could wear a hat for my beard occasionally might be a nice improvement. But in any event, we’ll kick kicking the can down the road here and get started on our conversation, Ryan. So we’re talking about income planning mistakes, I think the place to start here is not so much with the mistakes. But why are we specifically calling these income planning mistakes? Why are we centralizing the focus on those particular mistakes? What’s the big deal about income planning for folks who are going to be watching the show? Well,


Ryan Fleming  03:37

yeah, I think there’s a lot of things about this, like all pilots know, they have to save for retirement, they know that, but they don’t understand how the income phase or the distribution phase of retirement works. And the reason why we have to focus on that stage is because once you get there, if you didn’t plan properly, it’s too late, you’re no longer working. So the little tiny details when we’re planning out what your retirement is going to look like, you can’t make mistakes, and you got to think about all these things and, and we’re going to go through some of them and talk about them. But it’s kind of like you know, you don’t want to jump into that pool unless you know there’s water in there. Yeah. And we’d like to think about how any one of these can can cause cause of retirement picture to not look good. So we don’t want to have a leak in that pool.


Walter Storholt  04:21

Well, let’s jump in here on the pilots advisor. And so number one, Ryan on our list, we’ve got at least five tips here. So at least five income planning mistakes we will jump to oh, well surprise you. Welcome to the new house, you get to do some bonus ones.


Ryan Fleming  04:34

We’ll figure it out. We’ll


Walter Storholt  04:35

see. I don’t think it’ll be a big curveball for you to handle here. First one is don’t plan to be retired for a couple of years. I mentioned this in the teaser of the show plan to be retired for decades if people aren’t using that as their time horizon big issue. Right?


Ryan Fleming  04:50

Well, absolutely. And you know, there’s a stigma in the airline industry that Oh, you’re flying at night or you’re flying airplanes up at altitude to you know, the track record is pilots don’t live that long, but you don’t plan to not live that long. I mean, you know, we definitely can look at data and know that most of the time that the male spouse normally passes prior to the female spouse that you know, women live longer. But but you don’t want to say, oh, you know, I’m gonna only live for 10 years of listening, live it up, because the last thing you want to do is run out of money. Now, when we do an income plan for our pilots, you want to plan out for 25 to 30 years and make sure that you’re not going to run out of money. The other side of it with technology and how much advancement there has been in the medical field, people are living longer and longer. So we don’t really know how long we’re going to live. Because we don’t really have that data of people today. I mean, we know what the life expectancy is. But you want to you want to plan for the worst case scenario. Yeah, it’s great point. And by worst case, I mean, you live long.


Walter Storholt  05:49

Yeah, it’s a good worst case scenario, in an odd way, right? It’s a good problem to have, but a problem nonetheless, that we need to solve and think about. So I heard a


Ryan Fleming  05:59

good joke the other day, and I got to share it, because, you know, I’m very much about with my clients and the air people in the airline industry. offending people. So let’s, let’s roll with this. Okay, so the joke was, you know, how men die before women, okay. And we all know that to be a fact. But God told me the other day, he goes, Well, you know why men die before women? I was like, no, what he said, and he goes, he goes, because they want it. I thought it was kind of funny. That’s


Walter Storholt  06:24

terrible. That’s pilot humor written it is,


Ryan Fleming  06:28

like, I’m done with this. Very good.


Walter Storholt  06:30

Well, yeah, time horizon, make sure you’re planning with the right mindset. That’s our place to start for sure. And you’re making a huge mistake if you aren’t ready to handle that. Alright, so let’s talk about number. Number two mistake here, Ryan on income planning is to starting Social Security too early. If you do that big mistake, doesn’t mean you can’t start it early. But don’t just assume that you can do that. Yeah,


Ryan Fleming  06:51

I think the biggest thing was social security, as needing to understand that once you make that decision, you can’t go back and fix it. I think the whole social security analysis has drastically changed in the past few years. And I think a lot of that is based off of government spending and where we’re going. It used to be a simple calculation, Hey, when are you going to die, you make an assumption to there based off of your health or your family background, and then we can kind of tell you, Hey, you should probably wait till this age and then pull Social Security. And it’s funny, because I feel like a lot of pilots in the airline industry right now they talk about retiring at 60. But they normally don’t they normally go to 65. And then most of them are pulling it right away. And I think the justification right now is simply that, get it while you can. I mean, most pilots have done a very good job of saving they have they’ve had good 401 K’s. And I think the consensus is whether you need it or not, it’s going to allow you to not pull as much money from your 401k for income. And also get it while you can. Because I think I think most people think it’s going to be means tested or at a minimum reduced. I don’t think social security is going to go away, but it’s definitely going to be reduced. The math just doesn’t add up. For how many people are retiring and less people paying into Social Security,


Walter Storholt  08:08

I can see that that same problem is the first equation right? The being retired for decades, and not just yours kind of plays into this too. If people think they’re not going to live a very long time and not going to be retired for all that long, then yeah, you want to start I mean, that would be common sense. You want to start Social Security if you don’t think you’re gonna live for very long. So I can understand why people make that mistake.


Ryan Fleming  08:27

Yeah, when and you think about it, too, you paid into your whole life. And then if you do pass early, and you never withdraw any of it. You know, and of course, the rules change, whether you have a spouse and all that stuff. But what a horrible thing. And then another advancement of thought is we assume when somebody starts pulling Social Security, they’re using it for income. But let’s say you don’t really need it, but you can pull the Social Security now invest it and get once you’ve opened up the door, is a longer time horizon to let that money grow as well. Hey,


Walter Storholt  09:00

real quick break from the podcast, we want to talk to you about the retirement toolkit. If you have not gotten your copy yet of the toolkit, listen up closely because Ryan is gonna give us the details of what’s in the toolkit. You even have one on hand, Ryan that we can show people and some of the things that are inside of it, and what kind of information can people learn?


Ryan Fleming  09:18

Yeah, absolutely. If you go to retire, you can get a free retirement toolkit and we actually give you a free analysis of your portfolio so you can really see what’s going on. But as you can see, we got some air mail here. Nice. That’s what the toolkit looks like. Some of the things that are in there. There’s a couple tax planning strategies with Zack Smith a pilot tax, we look at long term records where we’ve got a 21 year track record of outperforming the s&p 500 gets certified. We can show you that. And of course I write these with big Kranz, big fat France for pilots. I mean there’s some Marines and army aviators out there but I got a couple of books, a couple of books I’ve written that you can Gonna get to talk about retirement planning how you shouldn’t plan for your retirement talking about taxes and tax planning, some other goodies, other goodies, advice matters, how to let an advisor help you out some of the data behind how much more you will have in retirement, if you hire a professional, what we try to do is to try to get pilots not to speculate and gamble their money. And I want to give you all the tools, you need to not do that. Look at the data. It’s completely free. We’re here to help you out.


Walter Storholt  10:30

Very cool. So this is a free toolkit that you’re going to get. And I don’t want to gloss over that fact that you mentioned at the beginning. It also comes with a free portfolio analysis that you’ll do after people get the toolkit. Yeah,


Ryan Fleming  10:40

absolutely. I mean, if you have no interest in doing anything else, and you just want the free materials, I’ll put your name right here, we’ll send it out to you. But yes, you do get a free portfolio analysis, I think most of the people after they see the content that’s in there and read the book, they want to they want to talk to us, and we can analyze your portfolio. See if we can add any value, the numbers don’t lie. And then we’re gonna find out if we can add value. And we’ll get on a zoom call with you, we’ll go through it, we’ll teach you we’ll show you the numbers. And I like to call that the IQ test. At some point, the numbers don’t lie, and you look at and go, Hey, if we can help you out, you know, and do something better. If there’s a better way. Well, let’s help you implement that strategy. Very good.


Walter Storholt  11:20

So no obligation to work together. But you definitely get the free toolkit, great resource information. And then if you want to take next steps for that portfolio analysis, you get that as well. So a lot of great freebies there, Ryan, we appreciate you offering those to folks in the first place. I know a lot of people throughout the existence of this show have ordered them over the years. But we’ve still got a good chunk of folks that probably are new to the show, or haven’t gotten their copy of the retirement toolkit. So be sure to get yours again, the way to get it is to go to retire That’s retire And right there on the homepage, you’re gonna see an opportunity to get that toolkit. We’ll also link to it directly in the description of today’s episode. So look for it there as well. All right, number three, don’t assume that bonds are going to be your main source of retirement income that’s kind of adapting that old line of thinking that you’re going to move out of stocks and into bonds, right? Well,


Ryan Fleming  12:09

I think 2020 To change the whole dynamic when we started looking at fixed income or bonds, and how it’s going to fit in your portfolio. And I’m not going to say I’ve done a total pivot, but I try to teach my clients, how can we have if we really want to lower the risk in a portfolio, you know, and we want to lower that standard deviation, we want to make sure that fixed income portion of that portfolio is somewhat guaranteed that it’s not going to lose value. And what happened in 2022 was, you know, of course, it was the worst inflation we’ve seen in 40 years. But a lot of conservative investors that had a lot of bonds in their portfolio as interest rates went up because you know, very steep bond prices just tanked. So if you were in a lot of more conservative investments, like bonds, you almost got out worse off than if you were in equities. And I think what it did is it really shows how, how bad it could be, even if you are a conservative investor. And let’s take for example, if you use some sort of an insurance product or other guarantee mechanism that’s out there to where you knew that fixed income portion of your portfolio would never lose value. Okay, it’s going to drastically reduce your standard deviation. And, you know, if you’re in a normal 6040 model, you could use that guaranteed income in a down market and not have to pull off your portfolio that that was, you know, lower at that time. So it gives you some sequence of returns risk protection. And I have some great videos on this that I’d love to share with any clients that are interested, feel free to email me, and I’ll send it off to perfect, we’ll


Walter Storholt  13:44

put the Ryan’s email in the description of today’s show, but you can also reach him Brian, at pilots. If you’ve got questions or want to check out that video, Ryan at pilots Get some good information on retire You know, further than what we talked about here on the show even all sorts of great reports and things to know about their retire Your place to go for that. Speaking of things that attitudes have changed, or perhaps at least awareness has maybe raised a little bit here, Ryan, don’t ignore inflation. That would be a big mistake to make in your income plan if you didn’t account for inflation.


Ryan Fleming  14:18

Well, absolutely and no different than the conversation that we just talked about. 2020 To put inflation back in front of us.


Walter Storholt  14:26

It’s been gone for a while in terms of people’s radars. Yeah, the crazy


Ryan Fleming  14:30

part is when we still plan long term inflation rates, we’re looking at about 3%. And what had happened is it had been tracking below 3% for so long, which was a good thing, right? Well, then the inflation was so bad. And we watched how much that could affect how we could buy goods and services, you know, to live day to day life with


Walter Storholt  14:52

still feeling it in many ways, right? Oh, absolutely. And especially that’s going to come hard to recalibrate that way than it is you know the other


Ryan Fleming  14:59

direction. And the wild part about it though, for long term planning, the prediction is we’re still going to use 3%. So we’re falling below that 3% for so long, and there’s that buffer. But when they look at long term inflation numbers, we’re still talking about 3%. And what I would say about that is, anytime I do an income plan for someone be conservative. And what I mean by that is, let’s bump up that those inflation numbers a little bit higher than what they probably are going to be. Or if we look at the return on your investments, let’s drop those down a little bit more than what we actually think we’re going to be. And that way, we’re looking a lot more at a worst case scenario. The whole purpose of doing like a Monte Carlo simulation is to see all those different scenarios. But I think it’s a good exercise to be conservative and give give an income plan that’s going to work even if if the market doesn’t perform like we thought it might


Walter Storholt  15:52

I imagined there is maybe some some airplane analogy you could make here, Ryan, where when they’re building planes, they want to stress test different components of those planes. It’s, it’s really more so not how can we make this part succeed? It’s not how can we make this plan succeed? It’s how can we make it fail? What are the things we can do to it to cause failure? And then can we fix those failure points to make it even stronger?


Ryan Fleming  16:15

Well, absolutely are a way I think about it is, hey, let’s, if we’re flight planning from DC to LA, you don’t want the min fuel required, you wouldn’t have a lot of extra gas. Right? Right. And so let’s let’s get that extra gas that extra required or required fuel, and have those reserves because we don’t know what’s going to happen out there. There might be big, that big thunderstorm, we might lose an engine, there might be something that happens to our airplanes, so no differentiator than having multiple systems in case one fails. All pilots like gas. And so when you’re looking at your income plan, let’s let’s plan for the worst case scenario and make sure we have some extra reserves there in case inflation spikes up healthcare costs, continue to do what they do. Or you know, life happens. And unfortunately, Walter, I get those calls when life happens. Yeah,


Walter Storholt  17:05

yeah, you do. It doesn’t take a non pilot to figure out that extra gas gives you options, and you kind of want the same thing in the financial plan, right, we want options, we want flexibility, we want directions we can head in. So that’s helpful. All right, last one for you, Ryan, and then I’ll give you the chance to chime in with any additional you might want to throw in here at the end. But formally, our fifth and final income planning mistake is if you forget to create lifetime income streams, other than social security, so we’ve got to go out and create our own streams. Otherwise, again, we’re setting ourselves up for a frustrating retirement well,


Ryan Fleming  17:39

for sure. And that’s why it’s so much easier to plan for someone if they have a pension, you know, pension plus Social Security, or PBGC, or whatever it might be, where you have a baseline, and you’re pulling less income out of any assets that you have saved. Unfortunately, this is becoming a thing of the past. I mean, more and more individuals are being forced to save money, and they have to create their income from whatever they have saved, and they don’t have that fixed portion or that baseline to work from. And I can tell you right now, it’s there’s so many more variables, it’s a lot harder to plan. So any type of passive income that you can create over time, is only only going to benefit you. And not necessarily in the airline industry, although this does happen. But if you look at the statistics, more and more people are retiring, and then still getting a part time job or doing something whether it’s you know, being an Uber driver or going to greet at the Walmart or the Home Depot just to get that extra spending cash.


Walter Storholt  18:43

Yeah. And if we can plan for that, instead of you having to go pick up a part time job to accomplish that. It’s a much better situation to be in, what’s the most income streams you’ve ever had set up for a client off the top of your head, like if you combined pensions, Social Security, maybe if they had an annuity or dividend or I don’t know is that is that a thing you can measure comes to mind,


Ryan Fleming  19:05

you know that there’s every client is a little bit different. But I’ve had I’ve had people that have had PBGC from an old pension, then they ended up getting a pension from the airline, they had a pension from the military, they had some rental income from some houses that they owned, and they still did a part time job on the side. And the reality was, I don’t think they’re going to spend any of their money because they could still live off of what was coming in. Unfortunately, that’s, you know, that’s not the norm. You know, the norm is, I mean, most, most pilots, if they don’t make a lot of mistakes, and we get a hold of them and have time prior to retirement, they’re going to have more tax problems in retirement than income, you know, money problems. But yeah, there’s there’s some cases where, you know, people are Type A personalities and they want to work to the day they’re, they die and it makes that’s when there’s a bigger shift for legacy planning is what I look at, like, Hey, you’re not going to spend this money. What can we do with it now to pass it on to them? Next Generation, or, Hey, let’s plan some vacations.


Walter Storholt  20:03

Right? Yeah, we’ll go we’ll go all out. We’ll travel around the world, but without you having to work. Yeah, that’s fantastic. All right, any other income planning mistakes you think would be wise to bring up? Or did we cover most of the bases today?


Ryan Fleming  20:13

Um, I think I think a couple things I bring up is just making sure you’re constantly adjusting your plan. No different than if you’re flying across the country, you’re want to update and have a fuel log to see how you’re going. Big changes in the market, big changes inflation or medical issues within a family, it’s time to re attack that plan and see where we’re sitting. Yeah, unless


Walter Storholt  20:34

you’re on auto autopilot, right, Ryan, you’re going to come back. And you’re still going to monitor your progress and make sure you’re getting to where you need to be.


Ryan Fleming  20:41

Absolutely. And just think of the big things that happen in life. I mean, healthcare costs, that’s a big deal. So medical issues that happen. Tax laws that change, I think we’re coming up on an election right now that can have some major impact on how we’re taxed, and we might not have the standard deduction going forward. So regardless of how healthy your retirement picture looks, things that happen day to day, whether it’s in politics, laws health, we’re going to have to adjust that plan and look at it, look at your safe withdrawal rate, and make some adjustments, no different and then monitoring the airplane and our fuel state and all those things.


Walter Storholt  21:17

All good points. Well, there you have it, some of the top income planning mistakes that you should try to avoid as you prepare for retirement. Now, if you have not put together a formal financial plan, or have a great guideline or guide to help you get to and through retirement, don’t hesitate to reach out to Ryan and have a conversation. Where do you stand right now? And how do you get from point A to point B for a safe landing, he’s gonna help walk you through that entire process. A couple of ways for you to get in touch 843-475-3038 is the phone number. You can call or text that number to talk back and forth directly with Ryan 843-475-3038. Or you can go online to retire Lots of great resources there for you on the website to check out. And you can engage with a couple of interactive things as well. We’ve got some video series, of course, you can go to the YouTube channel, look up the pilot’s advisor, you can find all sorts of great videos, past podcasts, lots of great educational material for you. So however you want to interact or connect or ask follow up questions, a couple of those ways that you can get in touch with Ryan and whether you’re watching on YouTube or listening on your favorite podcasting app. You can find all that contact info in the description of today’s show. Ryan Great show. Welcome to your new digs. Great to see them and be looking forward to future episodes with you in the new house. This is fantastic.


Ryan Fleming  22:33

Thanks so much, Walter, as always,


Walter Storholt  22:35

we’ll talk to you soon. Thanks for joining us, everybody. We’ll see you next time on the pilots advisor.