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Ep 22 A: The four pillars for a successful retirement- Part 1-Maria Litzinger - Financial Advisor

Updated: Jul 16, 2023



EPISODE SUMMARY


Hello, This is Sirisha, welcome to my podcast!


To have a comfortable, enjoyable, successful holistic retirement, invest in the 4 pillars of retirement. In Part 1 of her interview, Maria Litzinger talks about the first 2 pillars-Finance and Health. In Part 2 she talks about Family and Purpose being cornerstones of our emotional fulfilment in retirement. These pillars will provide you clarity on when to retire, where to retire, and what steps to take today to have a healthy tomorrow.


Maria Litzinger is a financial advisor with Edward Jones who helps her clients achieve their financial goals. She has extensive experience guiding individuals and families through transitions and planning a successful retirement. She is also a speaker and educator who uses her expertise and platform to have an impact on her local community and beyond.


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Below is a transcript of the episode, slightly modified for reading.



PODCAST TRANSCRIPT OVERVIEW


[00:50] - Meet Maria Litzinger [Jump to section]

[04:50] Four Pillars of Retirement [Jump to section]

[05:52] First Pillar- Finance [Jump to section]

[12:27] Second Pillar - Health [Jump to section]


PODCAST DETAILED TRANSCRIPT


[00:50] - Meet Maria Litzinger


Sirisha: Hello, everyone. Today, I have our guest Maria Litzinger, who's a financial advisor with Edward Jones. Maria is going to talk about the four pillars of retirement. She and I are connected, both of us are Carnegie Mellon alumnus and we actually met through that program when she presented on the four pillars of retirement. For the most part, I really thought retirement was more around the finances and this gave us a much broader holistic scope of everything you need to consider for having a really good quality of life in retirement. Maria, welcome. I'm really looking forward to today's conversation.


Maria: Thank you, Sirisha. So am I, appreciate being here.


Sirisha: To start, what is the definition of retirement?


Maria: That's a great place to start. As we had talked about in that webinar with Carnegie Mellon, the definition of retirement has really changed over the last several years. When we think back - 20, 30 years ago, a lot of people going into retirement, maybe had a pension that they could rely on in retirement. There was social security and between those two items, they were pretty secure in their retirement planning. There wasn't a whole lot more that maybe necessarily needed to be done. Fast forward to today and the landscape is very different. What we find is that less people go into retirement with those pensions. Social security doesn't really pay the rest of what's necessary to have a good retirement income and we're living longer. So, retirement has definitely changed from that perspective. And so, the definition of retirement now from a lot of people is really a reinvention of themselves and a whole new chapter of life that they're looking forward to exploring.


Sirisha: And let me take a step back. What got you to be a financial advisor, what drives your passion around this?


Maria: I have always had a passion for personal finance. Prior to being a financial advisor, I spent a lot of years in the pharma and biotech industry, and it was just always something I loved on the side. I took the reins, if you will, within our own household of managing those finances and just really loving that whole process and found just in talking with family and friends, that this was something that a lot of people had on their mind. Nobody really had great answers. It was all talking amongst one another in terms of, what are you doing over here? Have you thought about this? And I really wanted to be that voice for people and give them that trusted person to come and talk to about what they were working on with their financial goals. So, it really led me to explore this career and make a career switch several years back, to become a financial advisor.


Sirisha: We just talked about the definition of retirement changing, with how the landscape has changed in the corporate world. How companies are enabling people to get ready for retirement. You also talked about the personal side, having conversations with families and friends. So how do you have that conversation with all your members that surround you? What is the best way to have that conversation?


Maria: For me, it really starts out with understanding what's important to people because everyone's definition of retirement can be very different. For some people, it's just knowing that they're not needing to get up in the morning and go to work. They are really happy to just have time that they didn't have before to explore things that are important to them. Whereas other people have many different ideas, whether it's a lot more travel or spending time maybe in a second home in a different location where they haven't had that opportunity before. So, a lot of it is really, very granularly understanding how what those goals look like for everyone and then from there starting to understand what kind of planning has been done. Is there more planning that can be done to help set people up to be successful in their retirement years.


[04:50] Four Pillars of Retirement


Sirisha: And as we're having that conversation, we really have to talk about the four pillars of retirement.


Maria: So, the four pillars of retirement are Health, Finances, Family, and Purpose. To take a step back on where those four pillars were derived, Edward Jones did a survey with age wave research back in 2020. This survey was across 9,000 individuals between the US and Canada and these individuals span five different generations. So, our goal with this research was really to understand how the attitudes toward retirement were changing, as well as just investing in general. How are people feeling about investing? So, with that in mind, this is where these four pillars came to be and really understanding how people were successfully navigating into retirement, making those transitions and feeling really good and positive about this next phase.

[05:52] First Pillar - Finance


Sirisha: So, finances are something that I personally think about when I think about retirement. I think most people think of retirement as finances. So let's start with that as a conduit to the rest of the conversation.


Maria: When you're thinking about finances when it comes to retirement, the main theme with finances is not that people are just accumulating money to accumulate it, to look at it and say, oh, I've saved this much money. The idea of finances in retirement comes down to the theme of freedom, specifically, 'freedom from' and 'freedom to' choose. So freedom from the worry of have I saved enough, freedom from needing to know that you need to continue to work, and freedom to make different choices with how you're spending your time and feeling that confidence again, that you've done the right planning and that you feel really good about what you have set forth for your retirement planning. This idea of finances does integrate a lot into these other three pillars as we'll see through our conversation. Specifically, just to pull out the health pillar as an example of that, generally speaking, health, when talking with the respondents in this survey, people said that health was actually more important than wealth if you will. This makes a lot of sense because if you're in poor health, it really doesn't matter how much you've accumulated. If you're not really able to do the things that are important to you. Also, people who have more assets set aside for retirement, generally have the ability to get the medications that they need to do the different, physical therapies or whatever it may be that keep them healthy and living longer and more robustly doing the things that are important to them. So, when it comes to the financial pillar, there are things that we can be doing now that set us up successfully for retirement, like, are you paying attention to your finances? Do you know where things are? Oftentimes when we're in a situation where we have a partner, a husband, or a wife, one of the two generally takes the lead on finances in a family. It's just it's busy, not everybody can do everything. Just like one person probably primarily takes care of the laundry or cooking. We find the same thing happens with finances, but we've found through this survey that when you're really actively paying attention and engaged in this idea of saving for retirement. Knowing where things are, from bank accounts and investment accounts and so forth, just even having that level of knowledge of your finances can be really important throughout your lifetime. Even just to take it a step further with women specifically, We do find again, just generally speaking, oftentimes it's not the woman in a relationship who is taking the lead. And what happens is by virtue of their spouse or partner becoming ill or prematurely passing away or through a divorce, all of a sudden, there's this whole new piece on top of the circumstance that is leading them to need to be more involved. That makes it a bit more of a difficult transition sometimes. So, again, knowing where things are actively taking part in planning for retirement, for other financial goals that you have out there, are really important things that we can be doing today and not waiting for retirement for that to be when we start.


Sirisha: I'm glad you brought that up, I like the fact that you're talking about freedom from and freedom to because there are two different components of the same piece. We're trying to look at, Okay, I'm going to stop working, as you said, but I should have my health to go travel because that's on many people's bucket lists. They want to travel when they retire, but if I don't carry my health forward to it and I can go, say, I want to do this trail or this hike. I should be physically able to do that. And when you're talking about women and finances, that's part of the reason for the season called 'Let's Talk about Money', because research and studies show that there's a significant difference between how many women manage their finances versus how many men manage it. And also there is a gender investment gap, not just the gender pay gap, but also a gender investment gap that exists, because of that, especially if you're trying to manage it yourself. And as you said, if the spouse in that relationship does get ill, or prematurely passes away, that creates a huge burden on that person. Not just going through that life change, going through the grief and the process of the relationship changing and everything being on your plate. It's a very hard time to get your hands wrapped around all these finances. As you said, there are so many pieces of it, the bank accounts, the retirement accounts, you might have health care accounts. There are just so many pieces of it for you to wrap around. So, how do people get ready and how do they prepare themselves, especially the women, to get ahead of it so they can get prepared and be able to manage their own finances?


Maria: And I think exactly what you said, Sirisha. Compound, all of that, with the stats that say that. As women, a lot of times we have gaps within our careers, whether that's because we've taken care of children, whether it's because we're taking care of ageing parents. So, there are many different factors that tie into that exact same concept in terms of being prepared. A lot of it has to do with knowledge. So, whether that is seeking out things like we're doing today, just to be educated on topics that are relevant. Certainly, talking with a financial advisor is always a great step because they can really help you. They can be objective in very, sometimes emotionally driven elements of life, help you make sure that you've got good plans in place and can really see the big picture. So, not only about today but what about 20 years from now? What about 30 years from now? What does this plan look like? What are things that you can be doing to plan now that may not be on your radar, but would certainly help in terms of setting yourself up successfully for the 20-year or 30-year down the road?


[12:27] Second Pillar - Health


Sirisha: I want to talk a little more about health because when we're talking about health, it's not just a physical thing. It's also long-term care insurance and there are so many other aspects of it. So, can you help us walk through it? See the two questions that come to mind when I think about it even personally are, what are the different aspects of this health step that I need to look at to be ready for retirement on top of medicare or Medicaid that might exist? And then the second part of it is, if I was to buy long-term care insurance, so think of a place to stay, When should I be thinking about it? And what are the first steps I should take when I start having that discussion with family members or with my spouse?


Maria: So when it comes to this, the concept of the health pillar, the research was very interesting again, and what I shared a moment ago was that the majority of respondents indicated that health is more important than wealth. But interestingly, when talking with those who were retired, only about 50% feel that they are engaging in exercise regularly and even maintain a healthy diet. So these things, again are completely actionable for all of us today. Just, and they sound so simple, but in a busy life, sometimes it's just not so simple to add in, what does your diet look like now? Are you sleeping enough? Are you moving enough and getting enough exercise, even the concepts of meditation? Just taking time out of your day for yourself to sit and pause. For some, it can be prayer. All of the things that are just important holistically to your health are really areas that make sense to look at now. I think if anybody has ever gained weight, for example, over time, it didn't just happen overnight. You didn't wake up 15 pounds less the day before, and then it's there today. And so, really that journey of health is setting yourself up successfully over your entire lifetime with trying to make the right decisions. It will then help you out better in retirement because this switch doesn't just flip on or off so quickly, but maintaining your health throughout your lifetime often can mean in retirement that you're spending less on those medical costs because you really have tried to maintain your health over your lifetime. So, things like prescription care, are definitely something to be thinking about or procedures that may come up in the future. If you're able to again, live the best healthiest lifestyle you can throughout your life, that will likely lead to having less healthcare costs in retirement. Oftentimes, people have a belief that when they get to Medicare age, which today is age 65, Medicare will cover all of their medical costs and that's not accurate. So, I think that's also something that's important to know before you hit retirement, is that you do still need to plan for the medical costs above and beyond what Medicare would cover at that point and so doing some of that planning as well. When it comes to the concept of long-term care, that's absolutely a great conversation to have as what research also shows is that, a good number of individuals in retirement end up needing long-term care

and the leading cause of that today is related to Alzheimer's. These are things that when we're young and healthy, we think we're never going to need it. But the research shows that again, more often than not, people are needing long-term care or are utilizing long-term care is probably the better way to say that utilizing long-term care in retirement. So, how do you plan? There are different ways to do it. Certainly, one way is making sure that you're saving enough over your working years to pay out of pocket. But another way is insuring against it as it would be utilizing long-term care insurance options to bear some of that burden of cost at the point that it would be needed long-term care. Coverage has come a long way since it originally began, meaning that I think a lot of people have a concept of long-term care, that only works if you're in a nursing home. And that's not true, there are a lot of different aspects that long-term care insurance can cover and I think it's a great option to talk with somebody who manages long-term care. It is something that we offer as well, it is just to have that conversation, to see, to understand how it works, what the costs are, what the benefits are, and to see if that makes sense as part of your financial planning needs.


Sirisha: When you touched upon health, I think the key aspect, as you mentioned, is exercise and diet, which is very critical. We don't always think about that as being part of retirement planning, this comment, you spend your time in life, saving up all your wealth. Don't use all your wealth to keep your health in the end. So make sure you have your health with you when you go into retirement. Not just when you're talking about travelling, but even for all these other reasons, because then you could use your wealth, not only for yourself, but if you choose to use it to run a nonprofit, for whatever other purposes you have in life, for your family to invest, maybe in your grandchildren, or just enjoy the times. There are so many parts than health, that is very important. It's like a four-legged chair. If you take that leg out, three-legged chairs cannot stand and that is probably one of the most important legs.


Maria: Absolutely, you're right. This research that was done on these four pillars is such a breath of fresh air, really looking at retirement so differently and talking about these things that aren't normally part of the retirement conversation and how we can successfully get there and truly the importance of health.


We just wrapping up this episode after talking about Pillar One - Finance and Pillar two - Health. Join us for part two of this episode to Learn about the other two pillars.


Guest:


Host: Sirisha

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