The Influential Advisor
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The Influential Advisor
087: Beyond Enough: Building Financial Confidence for Meaningful Impact with Andrew LaFontain
Episode Summary:
Andrew shares the tragic story that changed his career: a couple delayed retirement until reaching a financial milestone, only for the wife to pass away before they could enjoy it. This moment reshaped his mission from managing money to helping people retire with confidence. He breaks down the three pillars of financial planning, explains how small spending habits reflect deeper priorities, and offers strategies that help clients shift from fear to freedom. He also challenges conventional advice on Social Security and urges listeners to take action, not just make plans.
About the Guest:
Andrew LaFontain began as a CPA at a Big Five firm before transitioning to financial planning over 20 years ago. Based in Wisconsin, he works with clients nationwide and authored the Amazon bestseller "Beyond Enough."
Key Concepts Explained:
The Three Pillars of Financial Planning:
- Resource Allocation – Managing money, time, and energy
- Retirement Income – Replacing your paycheck post-career
- Risk Management – Protecting against disruptions
True planning must address all three; focusing on one weakens the whole strategy.
Beyond Enough Philosophy:
Most people want to leave a legacy, but hesitate until they feel secure. Confidence enables generosity, purpose, and freedom to live meaningfully.
Henry & Ava’s Story:
Despite having enough, Henry delayed retirement for a $2M goal. When they reached it, Ava passed away. They never fulfilled their dreams—not from lack of money, but lack of confidence.
Practical Strategies:
The $1,000 Rule:
Cutting $1,000/month reduces retirement needs by ~$300,000 (4% rule). If invested over 15 years at 8%, it grows to over $129,000—boosting both savings and flexibility.
The Pizza Story:
Andrew’s family spent $6,000/year on pizza—a surprise revealed during a spending review. It’s a light-hearted example of how small, unconscious habits add up.
Three-Bucket Retirement System:
- Bucket 1: 1–3 years of cash for near-term needs
- Bucket 2: Mid-term investments to refill Bucket 1
- Bucket 3: Long-term growth for legacy or care
This system cushions clients from market swings and supports steady income.
Qualified Charitable Distributions (QCDs):
After age 70½, people can donate directly from IRAs to charities, tax-free. It’s a simple, underused way to increase impact without increasing out-of-pocket costs.
Challenging Conventional Wisdom:
Social Security Timing:
Waiting until 70 isn’t always best. Andrew shares a case where retiring at full retirement age gave a couple three extra years together—time they couldn’t reclaim by waiting.
Why Financial Plans Collect Dust:
Most plans fail not because they’re wrong—but because no one follows through. Andrew stresses the role of accountability: advisors, spouses, mentors who help ensure action.
Taking Action:
Confidence comes from clarity—and clarity requires action. Andrew urges listeners to reflect on their values, realign spending with purpose, and take the first step toward impact.
Connect with Andrew:
• Book: Beyond Enough (on Amazon)
• LinkedIn: Andrew LaFontain (Brookfield, Wisconsin)
“The goal isn’t just retirement—it’s confidence. When you have it, you stop delaying and start making the impact you were meant for.”
What if I told you that right now, somewhere in America, there's a successful couple staring at their seven-figure portfolio, knowing they could retire tomorrow, but convinced they need to work just three more years? And what if I told you that decision, that seemingly prudent, responsible decision, might be the biggest mistake of their life? Our guest today carries the weight of watching this exact scenario play out, with devastating consequences, and it transformed everything about how he approaches financial planning. Andrew LaFontaine traded a promising career as a CPA with a big five firm for something far more meaningful helping individuals and families find not just financial security but the confidence to actually enjoy it. After 20 years in the trenches of financial planning, he's distilled his hard-won wisdom into Beyond Enough, a guide to financial confidence and meaningful impact. Andrew LaFontaine, how are you doing? I'm doing well. Paul, how about you? I'm doing great. Congratulations on the Amazon bestseller.
Speaker 2:Thank you. Thank you, that was quite a journey. Yeah, it was humbling, it was great. We were very proud of the book we put out and it was gratifying to some of the comments and the results.
Speaker 1:So I appreciate that Definitely. In today's interview we're going to dive into your new book, which I'm holding here in my hands Beyond Enough A Guide to Financial Confidence and Meaningful Impact and I love the cover of it, so if someone listening can't see it, but it's a great book. It's on Amazon now number one bestseller and I just want to dive into just a little bit about your background and then just start talking about some of the concepts that you talked about in the book, so people can get to know both you as well as, essentially, the message of the book. Tell me a little bit about your background and, as I understand it, you started out as an accountant and today you're a financial planner. What was that transition like? What led you from one to the other?
Speaker 2:Yeah, so, like you said, I started in accounting. I actually started with a big five public accounting firm and when I went to school I really I've always enjoyed numbers, because with numbers I feel like there's always an answer. And one of my professors at school he said if you understand the numbers, you understand accounting, then you understand the language of business, and that really appealed to me. Okay, I want to do that and gotten on my career. I'm on the audit side with a public accounting firm and so we're helping very large companies be a little more efficient and make a little more money, which, believe it or not, is not as gratifying as it sounds.
Speaker 2:When I did some self-reflection on what do I really want to do for a career Like where do I want to have my impact, and I thought if I can help people make good decisions, good financial decisions, that would be a satisfying career path. At the time I was looking at something to do at the time mortgages or I could go the financial planning route. I felt going the financial planning route would allow us to help people in more areas and we haven't looked back. It's been a little over 20 years. I'm extremely grateful that I was able to make that transition into financial planning.
Speaker 1:Very cool. You've been a financial planner for around 20 years now, and so what inspired you at this?
Speaker 2:point in time to write your book beyond enough. Yeah, really, I'd say it's two things. One, I got to give all credit to my wife for inspiring the book, okay. And so we do a lot of. We do a lot of work in the community to trade shows. We talked to a lot of people and over the years she's heard me talk about the different stories of clients we've worked with or helped or folks we've talked to that maybe we didn't help or couldn't help.
Speaker 2:And over the course of the last 20 years, we noticed some consistent themes around people making mistakes not only people, but also advisors of people that had advisors. And so, as we really looked at it, we came to the general premise that I really, truly believe that everybody wants to have some kind of impact greater than themselves, right, whether that's on the church, their community, their family, whatever it is. That's individual for everybody, right. But before they can actually have that impact, they need to feel comfortable or confident that they are doing or have enough to meet or satisfy their financial goals. And if they don't feel that way, they don't have the confidence necessary to move forward to have that impact.
Speaker 2:And so the book was inspired by my wife saying, hey, you tell these stories, you should go write a book. And as we reflect and I go, if I'm going to write a book, what is the message we want to get across? And the message is one of having impact, to be able to do things bigger, better and greater than yourself. And I got to be honest the writing a book. The reason I never did it is I don't like writing. So I appreciate my wife pushed me in that direction.
Speaker 2:I give her all the credit for really inspiring and making that happen, so I'm very grateful.
Speaker 1:Yeah, definitely. And just so I understand that, and just so both I and our audience understands it clearly, what I understand you to mean is that retirement and having enough is one of those things that we never know our expiration date, and so we can have a million in the bank or investments, or we could have 2 million, but because the future is inherently unpredictable in terms of when we're going to pass, it's challenging to know. Do I have enough? And the number one fear, as I understand it, for people is running out of money. Is that the core issue that you're describing, or is there something else to it? I think that's part of it. Okay, I think that's part of it.
Speaker 2:Is that the core issue that you're describing or is there something else to it? I think that's part of it. I think that's part of it. I think what it comes down to is having the financial confidence now, because there is no crystal ball, you don't have an expiration date. I don't have an expiration date and realize I can't take it with me, I can't impact that.
Speaker 2:What I can impact is what I am doing now and what are the impact on my actions and my decisions now. And so if I'm comfortable that I'm doing the right things saving enough, have enough if I'm retired, have a good plan on income then I can actually have a greater impact Again, meaning we're only here temporarily, right, I have to be a good steward of the gifts I've been given, and so I want to be able to say, okay, I feel comfortable and confident in what I'm doing right now. And if I'm confident in that, then I can more freely give myself whether it's time, energy, effort, money to wherever where I want my impact to be. So my impact needs might be different than yours, right, like I want to give to the church charities I support, which would be different from what you or somebody else may support, but the consistent theme there is you will not do the extra if you haven't done the basics, if you don't have enough.
Speaker 1:It's almost like the airline analogy of when the oxygen masks come down, you want to put it on yourself before you put it on someone else, just so that you're confident and you can help people better. Oh, that's a great one. Yes, exactly, in the book you tell a story and the characters in the book and I'm sure that the names have been changed to protect people and all that good stuff is about Henry and Ava. Tell us about that story.
Speaker 2:Let me set that up a little bit, so that one was about having financial competence at the time. So Henry and Ava, they were late sixties and they wanted to retire her more than him, actually. And so at the time I was working more of a consulting role. So I would work with advisors to help them do their retirement plans. So they'd bring this stuff to us and we would look at so here's what they can do, here's what they should do. And so every year this advisor team comes to us. We look at Henry and Ava's retirement plan. And they could retire, they had enough, and they had all these dreams or all these things they were going to do in retirement. They wanted to travel, they wanted to spend time with their grandkids, they wanted to be more involved in their church. All this they did. All these beautiful plans, beautiful plans, he said when I have $2 million, then I feel like I'm good, then I can retire. Reality is he could retire on significantly less than that, but that was the number he wanted.
Speaker 2:Every year we tell these advisors hey, this guy can retire, they should retire, go, spend time with the grandkids, go do the trick, go All these dreams, right, yeah. And so you fast forward four years later and the attorney ever coming. This is the year, here we go. This guy's going to retire and he doesn't show up for his meeting and he doesn't call either. And so typically, when somebody does like a no show, no call, like you did something wrong or something happened right, and so I told these guys, I don't know, you might be getting fired, I don't know, what'd you do, what'd you do? Passed away suddenly unexpectedly. And so for me I'll tell you, paul, that was a perspective shift for me from a career point of view. When I looked at that I thought, man, if they'd been my clients.
Speaker 2:I feel like I could have given them the confidence necessary to actually retire and the trajectory of their life would have been much, much different. So all the dreams they had, all the things they want to do together, now they couldn't do it because they didn't have enough. It's because they didn't have the confidence necessary to make the decision to retire. And so at that point, again from a career perspective, that's when I shifted my focus to actually working with clients again and I'll be honest, like Henry, he didn't make it too much farther past that. I know it was sad, but it's an example of sometimes it's more than just the numbers. It's about having the confidence necessary to make the decision.
Speaker 1:And I think that story perfectly captures the idea. It's beyond enough, because or you tell me, how common is that for people to for a scenario like that to happen, where just people don't have that confidence?
Speaker 2:That's exactly it, and I would say that it happens more often than you want to hear about. People will delay for some arbitrary reason. It's not because the reason is not maybe valid in their own mind. It certainly is. People have their own reasons for what they do. However, a lot of that delay, procrastination, comes down to lack of confidence in the plans they have in place, knowing that they are going to be okay If you knew for certainty that you could retire today.
Speaker 2:Spend time with your grandkids, spend time with your spouse. Do all the things you want to do. Spend time with your grandkids, spend time with your spouse. Do all the things you want to do If you know for certain that you could do that, most people would. But you'll see people stay in a job that they hate, that stresses them out, that's difficult on them physically because they are not confident that they can actually pull the trigger on retirement. So the objective there is to give them the confidence necessary to be able to make those decisions and then go on to do more than just retire, have an impact again, whether it's on family, church, community, whatever. Everybody wants more than, or they should want more than, just themselves.
Speaker 1:Awesome, great story. Next question In the book you talk about three key parts of financial planning. I guess this is the quote unquote secret sauce. To help people have that confidence, tell us about the three key parts of financial planning.
Speaker 2:Yeah. So when we talk about the three key parts, three pillars of financial planning, I'll name them for you. First, I'll tell you why they're important. First one is resource allocation. Resource allocation deals with what you have now, and that's not only your financial what you have, what you're saving, what you're spending, what you're investing, what's your time, your energy, your effort these are all your resources. Resource allocation how do you spend that time, energy, effort, money, retirement income Look, when you stop working, you don't have a paycheck, and so you got to have a plan on how are you going to replace that income. And the third piece is risk management. Risk management deals with all the things that could derail a retirement, and so you have to have all three.
Speaker 2:A lot of times what you'll see is people will focus on one to the exclusion of another. I'll give you an example. Let's say you walk in, you go talk to somebody that's solely focused on risk management. They may only talk about insurance and not focus on what are you doing for your other investments or assets, resources, right? You go talk to somebody that's solely focused on just investments and managing money. That's what they're going to be focused on, and so they ignore other pieces. So true financial planning really takes into account all three. We had a client that comes in, and so we're not a kind of time client now and we come in and we're taking a look at all the things they have set up. They're already retired, as I said, they're already retired and they come in and say, okay, now that you're retired, how are you generating your income?
Speaker 2:Because the answer is when I need money, I sell some stuff and I take some money out From his stocks.
Speaker 1:From his investments.
Speaker 2:From his portfolio. I said okay, so what is your plan around that? He said we have a 60-40 portfolio. Is there an actual plan around distribution management resources? And the answer was no. He just had a portfolio that he was selling when he needed to take money out. How do we address that? In that case they were just focused on one piece the investments. Their plan was a 60-40 allocation. That's not a plan.
Speaker 2:When we looked at it, the risk you run I only just want to cover the risks and so when generating a retirement income plan, the risk he was running if you are selling money, if you're selling investments to generate your income, the market goes up and down. If you're selling into a down market, all you do is compound the declines in your portfolio. That's a mathematical issue. So you run the risk of running out of money because you don't have a proper retirement income plan, because your resources were not properly allocated.
Speaker 2:As we're talking our way through this, the guy knew he had a problem, right what it was. He knew it didn't feel right what he was doing, but he didn't know what the issue was or how to fix it. So the answer in his case and I know we'll talk about this a little bit later on is we looked at what he needed to spend and then we allocated some of his resources, some of his investments, to very short-term conservative that we could draw against, so that we didn't have to worry about market declines. To get him his money, we set up systematic payments so we knew exactly what we were dealing with and so that eliminated the risk of selling into a down market. He had a retirement income plan and his resources were properly allocated. Now there's more to what we did for him.
Speaker 2:But that's an example of making sure we hit all three of those pillars. And but that's an example of making sure we hit all three of those pillars. And so the net result is now the guy's not worried anymore about market decline. He didn't care. He's out fishing on the lake. He's not looking at the market. He's not worried about oh, is the market down? Should I sell, should I not sell? Where do I get my money from? He's got a plan.
Speaker 1:So now, when he talked's interesting, like just in the recent volatility we've had, I understand these concepts. My time horizon for retirement weighs off, so I'm like I want to buy more.
Speaker 2:And the problem is too, if you focus on one to the exclusion of others, right, I mean talking about like pillars, like three pillars that the whole thing, the whole house, crumbles. So you have to take, or you should take, a holistic view that encompasses all three. What are we doing with our current resources? How are we generating retirement income? And, finally, what risks could derail us and how do we handle those risks? Again, no idea. Like you said earlier, no one's got a crystal ball, I don't got an expiration date, but I can be fundamentally sound in terms of how we view the different areas.
Speaker 1:And, as part of that, just the confidence you always hear about the stock market, the roller coaster and just of course, the news media is geared towards trying to scare you about that. But my understanding, based on how you explained it in just the book, is that really you don't need to worry about that. If you have it properly allocated, as you described both now and in the book, you can turn off the news, you can go fishing, you can do those things because you have that proper plan that allows, that, foresees these things, can predict these things and can handle these things.
Speaker 2:Well, it allows you to focus on the things that are important. Okay, the market going up and down is not important. It's impactful. The important things are how you spend time with your family. How are you impacting the community? What are you doing for your health? Yeah, sure, worrying about the market going up and down. It's stressful and counterproductive. And that's why you do need to have a plan and that's the importance of proper planning.
Speaker 1:Yeah, definitely Andrew. I understand from reading your book that you and your family enjoy pizza.
Speaker 2:Yeah, we do Tell us the pizza story, okay. So let me say this. So we're talking about resource allocation, right? So one of the things that we advocate for is, at year end, doing a good review of your spending, right, like, where did you actually spend your money? And so, because we do eat our own cooking here, like the stuff we tell people they should do, we do ourselves right. At the end of every year, I get my credit card, my annual credit card summary, and I download that to Excel and I sort it out. It's okay, where am I spending my money on? And a couple years back, so we go through that exercise and and one of my key spending partners, I guess, was Papa Murphy's. Are you familiar with Papa Murphy's? Do you know?
Speaker 1:what that is. I've heard the name. I don't think I've been there before, but I've heard the name.
Speaker 2:Okay, if you get to Wisconsin they're awesome. It's a take-and-bake pizza place. That was the go-to for our family. So it was like, oh, kids are Murphys. So now I got three kids and a wife at home. Everybody wants something different, paul, and everybody wants a different dessert, sure. So, when all's said and done, you spend a fair amount on pizza. And so we looked at our annual review. We dropped about $6,000 on pizza and going out, it wasn't all Pop Murph, like yeah, we spent how much. I called my wife and I said do you have any idea how much we spent on pizza last year? No, so anyway, I had to explain that to her, and so we decided we needed to cut back a little bit on the pizza. It was no longer a Friday, saturday, sunday and Wednesday.
Speaker 2:It was probably better health-wise as well, and I know the kids didn't like it so much, but now I think we appreciate it more when we get it.
Speaker 1:So working with clients that was your own personal example of discovering unusual spending behavior. When you work with clients. What's a or any stories about just some of the things that you've helped clients discover about their own spending behaviors?
Speaker 2:Here's what happens when you do the spending review. If you ask somebody how much you spend on a monthly basis, they'll quote you probably the mortgage utilities, and people always underestimate what they spend and so when you go back and look at the spending review, it's always these little things that add up on you. A good example we had a client come in. He was in his 50s. He was a little bit behind on his retirement savings. He needed to amp that up a little bit. He was a single guy. We took a look at where he spent his money. There was a local pub that he would stop by about three times a week. He wasn't spending a ton by the time. You get your burger and your beer, maybe another beer dice shaking, and you buy a round for your buddies Sure. And you buy around for your buddies Sure. All of a sudden you're 50, 60 bucks deep three times a week. 180 bucks Yep, you're north of 60. He's actually close to about 700 bucks a month. On average. You spend it at the local pub. Man, that adds up.
Speaker 1:Almost 10,000 a year.
Speaker 2:Yeah, you can more than fund your Roth. When we're looking at some of the easier opposed to three or maybe you go on the wing special night or something right. Or you buy the Pop Murphy's when it's on a Tuesday deals you can cut back, and that by cutting back you don't want to deny, right, we didn't look at it and say we're never eating pizza and you can never go to that bar again.
Speaker 2:That'd be ridiculous. People aren't going to do that. But you can make the decision, the intentional decision, to cut back and reallocate those resources elsewhere, and so I think that's why it's important to do that spending or that expense review at your end. Where did your resources go?
Speaker 1:You said it, but it's amazing how these seemingly little things that we spend money on we don't really think about add up, and so it's just bringing that additional layer of awareness to it. You can find some interesting spending habits.
Speaker 2:And it's interesting too, because you can tell where people's priorities lie based on where they put their dollar. If you have somebody that comes in and says, hey, I'm really prioritizing my retirement savings, I really want to retire.
Speaker 2:And then you look at the resources and they're contributing the minimum to their 401k and spend all the money at the bar. Is retirement really a priority? Or if somebody says, well, I prioritize my impact, I want to prioritize giving money to the church, and then you look at their spending patterns and they're giving a hundred bucks a month to the church and spending $6,000 a piece of something, then where does your priority? So I think doing the review does allow you to prioritize what you're doing. Make sure your resources are moving you towards your ultimate goal.
Speaker 1:I think you use the word which is intentionality. It's making a conscious decision. You can do both, you can do either, you can do what you want, but it's just making sure you're being intentional. Yes, that leads into my next question, which is in the book. You talk about how, if you cut $1,000 in monthly expenses, that could mean that you need about $300,000 less for retirement. That's huge. On one level it's like pizza Is that a big deal? The bar is a big deal, but when you quantify it like that, that's huge.
Speaker 2:Yeah, agreed, and so the reason we put that in the book was to offer perspective If you go. So let's say right now, like some of the common searches are how much do I need to retire? You go to Google, right. Or how much can I spend in retirement? A general rule of thumb that you will see is you'll see what they call the 4% withdrawal rule and basically what that says is, if you want your money to last throughout a 30 plus year retirement, you can safely withdraw 4% of your portfolio on annual basis. Now, I'm not advocating for that, I'm not a rule of thumb guy because everybody's different but I put that in there to share perspective. That's about a perspective shift, because people do look at this stuff and that is what you will see. You'll hit the Google machine right what the 4% rule says if you want to sustain your income, you can take out 4% of your portfolio. For example, you have a million dollars. The 4% rule says you can take out $40,000 a year. That's the rule when we talk about. If you can reduce your savings by $1,000 a month, what is the impact of that? I give you the math. I don't want to have a sustained $12,000 a year, based on the 4% rule of thumb. You divide 12,000 by 4%, that gives you $300,000. So if you can cut back or reduce your spending, your unnecessary spending, by $1,000 a month, no-transcript, 10 years, 15 years, before retirement, it matters what you do with those savings.
Speaker 2:I'll give you an example. Let's say you cut the $1,000 a month and you take that $1,000 a month and you then invest that. You allow that money to grow. You will have significantly more towards retirement. But, that said, not everybody can sell an overall super and you're all just going to save $1,000 a month. That's not realistic. But let's take a different tack. So going back to the pizza, so on, here again I'm going to throw some numbers at you. Let's say we're able to reduce our pizza habit by $375 a month. So rather than buying pizza with that, you invest it and you get, let's say again, 8% rate of return. You invest it. Over the next 15 years that $375 a month grows to over $129,000 under those assumptions. So not only are you spending less and needing less in retirement, but you actually have more.
Speaker 1:So you're both spending less and have more, which I would imagine allows you to have more confidence and have additional cash flow to determine what's actually most important.
Speaker 2:Correct, because it doesn't do you any good to say you know what? I'm going to cut back on my pizza habit and I'm going to spend more on bourbon Sure, that's counterproductive, that's just shifting expenses. So when we talk about pre-retirement, if you can cut back on those expenses and actually save or invest that money, not only will you need less in retirement, but you will have more.
Speaker 1:What do you find is how do you guide clients to manage their spending, and what I mean by that. I think you said it is okay, I'm going to be intentional about eating less pizza, I'm going to be intentional about going to the bar less, but then your spending shows up somewhere else because we're just human beings, right? Do you encourage people to do annual look back or do you encourage them to do anything in terms of budgeting? How do you help guide people so that they can actually be intentional and lock in their spending habits?
Speaker 2:Yeah, so it's both. So one is having an understanding of what and where your money is going how are you spending that money and then being intentional about where you send that money. Now, people won't do that unless they can see what the impact of that is. I'm a big fan of setting up systematic programs. So if I tell Joe that, hey, we're going to cut back 100 bucks a month to the bar Now, rather than just letting that sit in his checking account, he would set that up systematically to go to some sort of investment vehicle that takes it off the plate.
Speaker 2:So it's about being intentional not only understanding where are you spending, how do you have to cut that back, but then, when you do that, where do you reallocate those resources? Now, it might be reallocating that towards paying down debt. It might be reallocating it towards an investment account. It might be bumping up your 401k. Everybody's different. But the consistent thing is understanding where you're spending your money, then understanding where you want your money to go and what you want it to do for you, and if you can get a handle on that, what do you have, what are you spending, what are you doing with it and how is that going to impact you in the future. You put together a pretty good financial plan.
Speaker 1:Part of what I heard or took away from that is that you don't want to just have that difference in money sitting there in your checking account. It's almost I'll use the metaphor or the analogy of dieting. It's like my wife makes me a good to help yourself the second you can. I'm going to likely help myself, whereas if I just know that this is my meal and that's it, I'm going to enjoy the meal.
Speaker 2:That's another good analogy. I like that, Paul. Well done. That's exactly right. You don't want to have the portion control meal sitting next to a plate of cookies.
Speaker 1:Exactly so. Social security is a big topic for people. For many people they're only guaranteed source of income. And you know, I've read different books and I've heard from different people on podcasts and whatnot, different strategies. In your book you challenge the idea that waiting until 70 is always the best move. What are your thoughts on Social Security?
Speaker 2:Yeah, so you're right, social Security it's a huge decision, huge impact, big dollars when you take the totality of what people get over time. So you're right, that is a decision people want to get right and there should be thoughtful analysis because everybody is different. But I will tell you, if you go out and ask 10 advisors, when should somebody take Social Security, nine of them are going to say at 70. Why is that? Because they get more, okay, super. How does that actually impact them?
Speaker 2:And where I challenge you sometimes we had a prospective client that was coming in. They wanted to retire. We ran the numbers they could retire and they had an advisor. They said my advisor is telling me to wait until 70 to retire at 67. They're saying that my advisor is telling me to wait until 70 to retire. So why is that? I said, well, because I get more Social Security, so I'll be a little better off. So now, when you ran the numbers, yeah, they'd be better off 30 years from now.
Speaker 2:But him him telling them they had to wait until 70 didn't give them the confidence necessary to be able to retire now when they could, they could retire at 67. They, in their case, they did need to take Social Security to have the confidence they wanted that guarantee because, you're right, it's only guaranteed income, not pensions. And so they opted to take the Social Security at full retirement age rather than waiting until 70, because it gave them the confidence to be able to walk away from the job and spend the time with family and themselves and enjoy their lives. It goes back to what you said before we don't know our expiration date. Now, if they'd have waited until 70 and they'd have more income and 20 years from now they'd have more money super.
Speaker 2:But they would not have gotten back those three years, those three years of creating memories of themselves, their family, the experiences they had. If they waited until 70, just because somebody told them they probably should, because they might have a little more money, they would have missed it and they cannot get that time back. They can't get that time back. So when you make the Social Security decision, I believe there has to be thoughtful analysis around when and how. Why? Because in some cases, yes, if you run the numbers, you would have a little more money when you're 85 years old if you waited.
Speaker 1:If you make it that long.
Speaker 2:If you make it that long, because that's again we don't know. So, when you look at the social security decision, because that is one of those things, having that guaranteed income does impact confidence.
Speaker 2:I can imagine, and so that's where, when you get into the financial planning is a bit of an art and a science. These people don't have the confidence to retire but they could or should, because you gave them a false sense that they have to wait. I think that's doing them a disservice and so decision that will allow you to have confidence in your retirement and stay retired. I've seen some of these financial plans who run the Monte Carlo analysis giving you a percentage likelihood of success. If you wait till 70, your confidence percentage is 96.
Speaker 1:That's awesome.
Speaker 2:What is it if I retire right now and take it 93? It sounds pretty good to me. Okay, I'll take it. So making that decision requires more thoughtful analysis than what I think a lot of people would go through.
Speaker 1:What I'm hearing is that there's the math, and then there's the math applied to the person and ultimately it's what's driving the person, what are their values, what are their goals, what's important to them, and it ties back into the beginning story with Ava. We have enough, and that's where the recommendations I imagine, imagine need to be based on math, but also tied to the person, their goals, their values, et cetera. Absolutely right. The premise of the book, and really the subtitle of the book, is it's a guide to financial confidence and meaningful impact. So let's switch gears a little bit and tell us about the qualified charitable distribution strategy. What is that and how is that and why is that important to people who are looking to make that broader impact with their resources?
Speaker 2:Let me first set up what that is, why it's important. So the qualified charitable distribution is a rule that says that you can send money after age 70 and a half directly from your IRA to a qualified charity. When you do that, you don't pay taxes. That's not income to you, it's center. You don't take possession.
Speaker 2:You send it directly to the charity. This is one of the tools I think is underutilized in financial planning. We're involved in a lot of community events, right, and a consistent conversation I have. I talk to people that are in their 70s. You talk to them. Are you retired? Yep, I'm retired, super. Are you drawing money out of your IRA only because I have to, so you don't need to? No, I don't need to take that money, but I got to take it out, okay, fine. Are you giving to a church charity Of?
Speaker 2:course I am Okay, super. Wouldn't it be nice if you could take your money, rather than taking your money out of your IRA and paying taxes on it and then sending it to the church or charity, wouldn't it be nice if you could not pay the taxes at all to them? And all these people are like hold on, you can do that. You can do that. Yeah, you can do that. There are two consistent themes around these people that we talk to. One is they're impact-minded right, they want, they're giving people, they're charitable people. The second consistent theme is they all have advisors. They all have advisors. How can you increase your impact with that?
Speaker 2:Let's say I want to give $8,000 to the church, but I pay 20% taxes In order to give $8,000 to the church, I would take $10,000 out of my IRA, then $2,000 to the IRS and $8,000 to the church. My alternative would be rather than do it that way, how about I just send $10,000 to the church to cut the IRS out? Unless you feel like you're impacted, you want to give more to the IRS.
Speaker 1:Let's be honest. Have you person that's been like I want to give more to the IRS?
Speaker 2:No, don't, and I tell you, I'll ask you so. Are you the person that checks the box to give extra? I don't know anybody doing that, but I do know that you can increase your impact.
Speaker 1:It's like this to me is a new. I don't think I've heard this explained the way that you just said it, so I don't think that this has been on my radar. And do people realize this, because it seems like a huge difference if your intent is to make impact, and instead of paying the tax and then make an impact at a lower level, you can just make more impact that way. It seems huge.
Speaker 2:I think it is and I think what I think that's big is like for some of these organizations that do have people giving. They should be talking to folks about this. You look at your giving roles. You know that the 73-year-old is giving you $5,000 or whatever. The number is right. If they're just cutting you a check, it's not coming right from their IRA. There's probably an opportunity to enhance the impact there.
Speaker 2:Again, if we can enhance what's going to these charitable organizations, that's a good thing. And it's a simple technique. Simple, but it's not widely talked about, it's not widely known. Be it the folks you talk to. And again, consistently, they all had advisors. But I think up with advisors focus on one thing exclusive. Others, that's the ones that have an advisor, but their financial plan is a 60 40 allocation, not looking at the total picture and how can they maximize what they're doing? So I love the qcd concept. I've personally seen people enhance their impact after you talk to them. Yeah, they like it, they appreciate it, organizations appreciate it. I'm not a huge fan of that particular I I feel like good in two ways.
Speaker 1:It's like I I feel good about not giving it to the government and then better, and then great about giving it to the cause that I actually care about. That's awesome. In your book you emphasize taking action, not just planning. So question is why do so many good financial plans collect dust?
Speaker 2:That's a good question. I think it comes down to two things. I think it comes down to accountability and procrastination. Here's what happens sometimes. You get this nice financial plan done. It says hey, paul, you're saving enough. You're doing all these good things, you need to adjust this and that, and you'll be fine. You get that plan and say, oh, that's great. Hey, I'm in good shape, I got to make some changes, I'm going to take that home. It's going to hit the shelf, hit the cylindrical file.
Speaker 1:It's not getting looked at and what you do is you dust it, because what I heard from you is that I'm pretty much in good shape. I don't need to worry about these things, at least not for now. I'm solid.
Speaker 2:I don't need to do anything at all, and then they maybe go back and meet with their planner a year later and they get an update or something like that. So nothing actually happens with the whether that's your spouse, a mentor, your advisor, whoever I think accountability is a key piece to actually implementing a plan. So there should be nobody's in perfect shape financially Not me, not you, not anybody. There's always stuff we need to and should be doing, and so having an accountability partner says okay, paul, you need to get this done by end of March 31st or whatever the number is, whatever the day is, and then being able to circle back to that partner and them saying hey, paul, you were supposed to do this, you do that.
Speaker 2:And when you reschedule that meeting because you didn't do it, funny how that works. Yeah, funny how that works. It's crazy. And then the second piece is procrastination. Right, the status quo is always easier. It's always easier to do nothing.
Speaker 2:The most common one you think is kicked down the road is the estate planning. So where that could hurt someone, I had a friend of I wasn't the family advisor he called me and said hey, can you just take a quick look? My dad's sick and I want to just make sure that everything's okay. I said, yeah, let me you find, send it to me, I'll take a look. And we did a review and in this case I looked at one of his account. Boy, I said you didn't have a beneficiary on that account. You need to add a beneficiary to that account. I said okay, because they did call the broker. But the broker and the gentleman kicked the can down the road and they didn't do it.
Speaker 2:So you fast forward. It was probably nine months or so, and then the gentleman passes away. So now my friend calls me and says, hey, can you help me with this stuff? I said, yeah, I'll take a look. Right, and you know what wasn't done. Beneficiary change. You know what they had to do and they're not doing anything. What was the point? I can actually do something with the information.
Speaker 1:In your book you talk about the three-bucket system for retirement income.
Speaker 2:Tell me about that, and so that's a very conservative. I'm going to spend that money this year. Six months, two months, whatever. I know I'm going to spend that money. So when I allocate the resource towards that bucket, that's my near-term spending and with that money I want to be like no risk, because I know I'm going to spend that money. And there's different you can do different amounts but I like to have anywhere from one to three years and very conservative, I know I'm going to spend it. So that's bucket number one. Bucket number two is more of what I call a medium-term kind of portfolio.
Speaker 2:And I'm going to use that portfolio to replenish my near-term bucket that will be invested for some kind of growth. And so what happens there? As you spend down bucket number one, ideally if you get market gains you can replenish from bucket number two. Now let's say I don't. Let's say we go through a period of time where the market is down. I'm not going to be replenishing Market's down, I'm not pulling out a bucket two to go to bucket one.
Speaker 2:But if you think about it psychologically for the client, market to client is not comfortable for anybody. Nobody likes it. But if me as a client knows that I have one to three years sitting in a secure bucket, I can weather that storm a little better. And again in good years you're going to replenish Again. Psychologically that concept says I'm okay, you're okay, we can weather these storms.
Speaker 2:The third bucket is our long-term bucket. That's the money we ideally we're setting aside for long-term care, we're setting aside for the kids. I hope to never touch it. You can maybe be a little more aggressive with that money because I have no intention of touching it anytime in the near term, right? So you're talking about the three buckets and the advantage of the clients is that they know all their different areas are covered. They don't have to worry about what they saw on the news, what they saw on CBC oh my goodness, the market's down or it's up, it doesn't matter. It doesn't matter because they have a plan in place. That bucket system has a plan in place. How are they going to actually functionally manage their retirement income?
Speaker 1:I was just going to say that, and this essentially is. It deals with the sequence of returns risk.
Speaker 2:Correct and that goes back to sequence of return risk. That goes back to if I'm taking out money in a down market, I have to make more to get it back. It's a mathematical problem.
Speaker 1:And the years in the three buckets that's based off of, I'm guessing, just historical data in terms of what?
Speaker 2:Yeah, that's all individualized. If you have somebody that's got a great amount of fixed income, Social Security pension, maybe you need less, and that goes back to the art and science. So there's the hard and fast. Hard and fast. You need to have 1.72 years of it all depends. That's where you get to the end of the individualization.
Speaker 1:I'm glad that you said that. It's good to know, because I look at some of these things sometimes online, like you said, the 4% rule and it's like, really I've enjoyed our conversation so far. And just in starting to wrap up a little bit, I have a few more questions for you. If someone only remembers one thing from your book, or even this conversation, what would you like that one thing to be? What would you like their takeaway to be?
Speaker 2:Our premise is that most people want to have an impact greater than themselves, whether it's on their church, charity, community, family, whatever but they can't do it unless they know that they have enough. That's our starting premise, but I'll follow that up with. A lot of people don't go on to have the impact that they want and the reason they don't is because they don't take action. A lot of people will read books, they'll listen to podcasts, they'll go watch a video, they'll go down the YouTube rabbit hole and then they don't do anything. So the one thing I would like them to take away from that, from this book or this conversation, is you have to take action or nothing will happen. If there are concepts that resonate with you, take action, go do something. Have the conversation, meet with your spouse, assess what you want to have your impact to be, assess where you are, but actually take the action steps. So if I had one key thing, one key thing take action, make some kind of decision and do something.
Speaker 1:I totally agree about action. I think for me personally, my one nugget of new information that I haven't heard elsewhere is that I forget the exact name of it, but the ability to go directly from ira tax free distribution qualified charitable distribution, because that's something that I haven't really at least paid attention to. So I think that's huge.
Speaker 2:That's an awareness thing. A lot of times you go you see like capital campaigns and charities and all that. They're talking about all the stuff they can do with the money and they ask for it. I think that the joke I heard that I liked was the good news is we have the money. The bad news is it's in your bank account.
Speaker 1:I haven't heard that before.
Speaker 2:I like that one, I like that one, and so being able to show people better ways to enhance their giving without enhancing their outflow. So if I can give you more, but I you rather do, mr Charitable Giver.
Speaker 1:Why isn't every single church leader or anyone that receives donations, having this conversation?
Speaker 2:I don't know. That's a good question. I did talk to a local church leader that had the conversation. He said oh, it's great, I love it, we're going to hand start giving. I'm like that's great, I said they did it. But here's the kicker though I said 70 and a half, he goes no when they start taking their required minimum distributions. Because they changed rules on required minimum distributions to bump your age back. It was no longer 70 and a half. They did not change the rules for the qualified charitable distribution, so it doesn't have to be a required minimum distribution. But he was one that had done some research and was communicating that to his parish and had enhanced his giving. But even he didn't know you can get an extra couple of years of giving out of them. He didn't know that. And so even the ones that do and are talking about it and he did say that was at least for his parish they were able to significantly enhance what was given and yet it's shifting dollars.
Speaker 2:Where do you want it to go? Church or the IRS Chair, or the IRS, your call?
Speaker 1:That's a motivator right there for me, For someone who's either listening to this conversation or has finished reading Beyond Enough and feels inspired. What's the first step that they should take or what's the next thing that they should do? Talking about accountability and action, what's the next thing that you would advise them to do?
Speaker 2:The next thing I would advise them to do is I would do some self-reflection on what is actually important to them. Where do they want to have their impact, what goals are important to them? And again, it's different for everybody. But if I don't know what's important, then I can't take the steps necessary, I can't allocate my decisions, I can't adjust my decisions to what's important if I don't understand it.
Speaker 2:So the first thing I would do is I would sit down and I'd do some self-reflection what am I actually, where do I want my impact to be and what am I actually looking to accomplish? Once I've done that, then I would sit down with important to me. Now, what do I need to do? What action steps do I need to take in order to actually accomplish that goal? This is important to you and again, your impact, your importance, is different than mine, different than Joe and Sally, right, but you have to do the self-reflection and decide what is actually important. And then you have to decide it's important enough to actually do something? It doesn't do you any good to talk about it, think about it, do nothing.
Speaker 1:Do you find that people that come to you do they typically have an advisor, but maybe they've outgrown the relationship. Or do you find that they don't have an advisor? Or do you find that they have more of that narrow, not comprehensive planner where they just do one narrow thing?
Speaker 2:It's a combination. I think the vast majority have probably outgrown or are looking for more than what they're getting currently, or, alternatively, they've done all their savings in a 401k or something like that and never really sat with a planner. And so many people come and they have a good financial planner, it's covered all the bases, and they just want some assurance that they're doing things right. I would say having a good financial planner and there are lots of good ones out there it's important, but the ones that come to us typically, like you say, have outgrown and are looking for more as they transition towards retirement, transition towards being able to have more impact.
Speaker 1:And you're located in Wisconsin. Do you work with people only in Wisconsin or do you work with people in other states as well?
Speaker 2:No, we work with people in other states as well. Yeah, we're in Wisconsin, yep.
Speaker 1:Do you find today that more meetings are virtual or in person, or I still?
Speaker 2:prefer Paul. I still prefer in person. I like to be able to look somebody in the eye, shake their hands, really get to know them. I greatly prefer in person, although we do have clients that move throughout the country. As much as I'd like to tell my wife I'm flying down to Florida in wintertime for client meetings. We certainly do the virtual meetings, but I greatly prefer face-to-face. I'd rather be able to look someone in the eye, shake their hands and really get to know them.
Speaker 1:Final question For and or to connect with you. What should they do?
Speaker 2:Yeah, so a book's available on Amazon it's Beyond Enough by Andrew LaFontaine. If they want to connect with me personally, the best way is probably through LinkedIn. It's Andrew LaFontaine, no E on the end. A lot of people do that Over in Brookfield, Wisconsin. I think that'd be the best way to connect. I'm happy to chat.
Speaker 1:Perfect, all right, andrew.