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#44 - Eric Blake on Senior to Seniors Podcast: Simplifying Retirement for Women in Transition
Eric Blake:
What if everything you thought about retirement was only half the story? Yes, money does matter, but what about the emotions, the unexpected challenges, and the big financial decisions that could make or break your golden years? Welcome to the Simply Retirement Podcast, where we want to make a living to retirement that you deserve just a little easier. I'm your host, Eric Blake. In this episode, I'm sharing a conversation I had with Jim Mazziotti on the Senior to Seniors podcast. The Senior to Seniors podcast is a show dedicated to the unique challenges faced by seniors in today's world. Each episode delves into pressing issues, practical problems, and innovative solutions relevant to seniors. Jim himself being a senior, specializes in real estate needs of seniors, and was one of the very first realtors to achieve the senior real estate specialist designation back in 1999. Now, please enjoy my conversation with Jim Mazziotti.
Jim Mazziotti:
I'm Jim Mazziotti, 33 veteran of the real estate industry, and I'm a national speaker real estate coach and an author. And today my goal is to introduce you to someone very interesting and someone that I think that you should know just a little bit about Today. I am with Eric Blake, and let me just tell you a little bit about Eric so you have an idea just who we're talking to today. I have a pretty inspiring guest. Eric Blake is a certified financial planner professional and the founder of Blake Wealth Management, located in the heart of McKinney. With over 25 years of experience in the financial industry, Eric has dedicated his career to empowering women in their retirement journey, especially those who are single by choice, divorced or widowed. Eric understands that the path to retirement can often feel overwhelming and filled with daunting decisions, and that's why he developed the innovative Simply Retirement Roadmap that we'll talk about designed simply to simplify the complex decision-making involved in planning for a secure future.
His approach prioritizes understanding each client's unique purpose and goals for investing, ensuring that all strategies align with their individual needs. In our conversation today, Eric will share his insights on critical questions, many retirees face such as, how do I ensure I don't run out of money in my retirement and how can I reduce my taxes during these golden years? Eric firmly believes in a principles based investment philosophy where preparation is key by focusing on long-term growth and steering clear of market Feds, he helps clients navigate the unpredictable landscape of investing with confidence. As a certified financial planner. Eric emphasizes collaboration and education throughout the planning process, making it clear that financial security is not just about numbers, it's about peace of mind and the freedom to enjoy life fully. So whether you are nearing retirement or simply want to enhance your financial knowledge, get ready for an enlightening discussion with Eric Blake that promises to equip you with the tools to make informed and empowered decisions about your financial future. One thing I have to mention is Eric's podcast, so you want to make a note of his podcast, which is titled Simply Retirement Podcast. His show provides valuable insights and advice on retirement planning, specifically tailored for women. And Eric, where can people find Simply Retirement your podcast?
Eric Blake:
Absolutely. So it's on all the major platforms. We're also on YouTube, but probably the easiest way is simply to go to the Simply Retirement podcast.com. You'll find all the great resources and podcast episodes, a lot of other free stuff on there as well.
Jim Mazziotti:
Great. Well, I've listened to it and you do a great job.
Eric Blake:
Thank you so much.
Jim Mazziotti:
So Eric, again, thanks for being here. I like for people to get to know you. I often forget to do this with guests that I have, but I think it's important for them to know who you are and why you do what you do. So us a little bit about you and perhaps your family. I'd love to know more.
Eric Blake:
Absolutely. So I've been a financial advisor for quite a while now, as you said, over 25 years of experience. I started back in 1999 right before Y 2K nine 11. Always kind of joke that I, starting in July of 99, I got like four months of a good mark, and then all hell just broke loose for the next three years after that. So I've seen all the ups and downs, but personally, I am married, this is my wife and I, my wife Dawn, and i's 29th year of marriage. It'll be 29 years in June. So we're very happy about that, trying to figure out what that year 30 trip is going to look like, trying to plan that out. Of course, I've got two children. My son Eric, also, his middle name is Lowell. He was named after my grandfather, so he's not a junior, and my daughter is Caitlin Caitlyn. Actually, we are what, one day from Caitlin's birthday, her 28th birthday, and three days from my granddaughter's birthday. Our very first granddaughter was born almost a year ago. Her birthday will be on Sunday, January 12th. So that's my close knit family. And you talked about our focus on women. That's always an interesting question that I get is, well, why would a man focus on helping women plan for retirement?
And that's also part of my family story. I was raised by a single mother. I never actually knew my biological father. He was out of the picture somewhere around when I was a year old. And then my grandparents were very instrumental in my youth and my grandfather passed away when my grandmother was 62. So that's, again, part of my background is just seeing some of those challenges that women have faced, whether it be a divorce or whether it being widowed. And that's really where my passion lied as I gradually made it through the career. And you get started, you work with a lot of different people, and eventually you find your passion and where you feel like you really can bring value to people.
Jim Mazziotti:
Yeah, well, it's very specialized, Eric, are there a lot of people in your world of financial planning and so forth that do this or have you cut out kind of a very cool niche of your own?
Eric Blake:
Well, I think there's a lot of advisors who, as you probably guess, focus on the retiree market. When you think about assets and who's got the assets, typically it's going to be people in their sixties, they're getting close to retirement, they've saved into their 4 0 1 Ks or whatever it might be. So financial advisors, a lot of financial advisors focus on that market. But I think one of the things that really distinguishes us is the focus on retirement income and specifically retirement income for women. Once you've gone through a divorce of you've lost a husband, and unfortunately we've seen that way too much here in our practice in the last couple of years. As a matter of fact, those decisions become when it's just you now and you've spent 30, 40 years making joint decisions or hopefully making joint decisions. Obviously that's not always the case either, but you've had a partner, you've had somebody that you've been able to talk about ideas with, and all of a sudden you find yourself on your own and you've got these huge decisions around what are my options with social security? When should I take my survivor benefit? When should I take my benefit? Spousal benefits? You've got all these different variables, and then you get into taxes and say, okay, well, I've filed married finally jointly for the last 30 years, and all of a sudden now I'm single. And there's something called the widow's penalty where all of a sudden you find yourself in a much higher tax bracket and you're on your own
Because you may have a very similar level of income depending on the situation. And now I'm paying more taxes. What do we do about that? How do we make smart decisions around minimizing your lifetime tax liability? So I think from the standpoint of looking at those scenarios, you think about retirement income, that's where you say you've spent the last 30, 40 years building assets. That part is something, I don't want to call it easy, but a lot of it comes down to discipline, right? Saying, okay, I put money in my 401k,
I put money in my Roth IRAs, I put money wherever. That part just really, okay, I take it out of my paycheck every single, every time I get paid, put something in. But now when you start taking it out, that's a whole nother ball game. And it's about, again, what are the tax implications? How does social security play into that? Which accounts should I be drawing from? First, do I start with my Roth IRAs or do I start with my 4 0 1 Ks? Do I start with my brokerage account? Where's my income going to come from and how do we, I always talk about this retirement income puzzle, and it's very much like a puzzle. We've got all these different pieces, and eventually we got to start figuring out how all these pieces really start fitting together into creating a vision of what you want retirement to look like.
Jim Mazziotti:
Yeah. So when is the best time for not only women, but for men, but to start planning for this, I talk mostly to seniors, but when should people start planning? I know I haven't done as good a job as I should have done. I was too busy trying to make money, right? To worry about, yeah, I'm going to get old, but I'm not old yet. Then all of
Eric Blake:
A sudden, one day, one day, one day I'll be old,
Jim Mazziotti:
And then you're celebrating your birthday party thinking, man, it's too late. So when's the best time for somebody to start? And should anybody here feel that it's too late, I can't plan, I might as well, whatever.
Eric Blake:
So I'll answer that second part of that first. And the answer is, there's no, there's always decisions you can make that are going to improve your situation. So there's never too late. Now, you may not be optimal, but you still got to make the best decisions possible as far as how early being biased, of course, as a financial planner, I think you should start planning as early as possible
Even when you're young. And I think that's where education these days has failed to some extent. And I think there's some progress being made, but we didn't take financial classes back in elementary school or high school or college. Now there's more of that that's being offered now, but you're starting, I don't want to say you're starting from scratch. You're almost starting below scratch. They'll teach you about preparing tax returns or managing debt or credit cards and the significant implications of getting the credit card debt. So you want to educate yourself as soon as possible and start planning as early as you can. Now, with that being said, I know that doesn't always work that way. Like you said, life happens.
Jim Mazziotti:
Yeah, yeah. Do you go into high schools or colleges to do any kind of courses or recommendations? Do you do any of that?
Eric Blake:
I don't personally, and I'll tell you why, because one of the things I'm a pretty strong believer in when it comes to financial advisors is you cannot be all things to everybody. So even when you're talking about talking as early as possible, the issue is that the 25-year-old has different decisions to make than the 45-year-old. And the 45-year-old has different decisions than the 65-year-old. I have a very hard time believing any financial advisor can truly specialize in each of those demographics, right? So I think there should be somebody doing that. It's just that, and there are many great advisors that I know that work primarily with young couples, young couples with
Children,
And that's where I always use, use the example of 5 29 plans. I know how five 20 nines plans work. I've utilized them before, but it's not something that today that I do on a day-to-day basis, there are better advisors to help you with a 5 29 plan than me.
Jim Mazziotti:
And
Eric Blake:
I
Don't think there's many people better than retirement income planning than we are.
Jim Mazziotti:
Yeah. So you want to be an expert in the area that you're in. And so if people need to kind of planning new offer, you're the guy, you're not doing this whole thing, I try to do the same in my real estate or I'm pivoting to that point. I've done a lot of things in real estate, and when I started in for years, I was a general real estate agent. If you needed to buy real estate, okay, I'll show it to you. I'll help you, I'll help get it sold. And now I'm pivoting to just work with seniors because they have their own issues. And I want to be the go-to person that a senior knows that if they need help with a certified financial planner, I've thought this through and I've made connections with the very best people for them to go to and not try to guess, not try to do guesswork. Listen, given that many seniors have been through significant life changes like a divorce, losing a spouse, what unique financial challenges do you see in the clients who are single?
Eric Blake:
Well, again, I think it comes back to not having that other person, that other party to talk about things with, to discuss ideas and strategies and concepts, and coming to an agreement on what's going to be best. It all falls on your shoulders. I always, again, going back to my personal story and thinking about my grandmother, when my grandfather passed away and she was 62, I mean, this is a woman who, she is the definition of matriarch. But at that point in her life, she had barely driven a car on her own, much less be put in a position of having to make financial decisions on her own. And now she's thrust in this position of, Hey, I've got to make all these decisions on my own. So having somebody there, and again, I'm always a believer in financial planning and financial, utilizing a financial advisor, a trusted advisor, having somebody like that on your side of the table,
But you need, all of us need somebody to talk with, somebody to talk to ideas about, because you don't do this on a day-to-day basis. There's things that are going to pop up on you that you just don't know, and you don't know what you don't know. So I think that's part of the issue. So I think that's a big part of it, is just not having somebody there to talk about stuff with, I think is the biggest challenge. And then again, beyond the financial implications of, again, now I'm in a position of having to make a crucial social security decision that if I mess it up, I don't have a lot I can do about it. There's a lot of decisions when it comes to, and again, why I think this phase of life is so critical and why I think a financial advisor, you really have to specialize in that area because there's a lot of decisions you make in those last five years before retirement that you don't get a do over.
And
Social security being one of those, there's certain things you mess up, you live with it for the next 30 years of your life. That's it.
Jim Mazziotti:
And I think there's a lot of people who don't plan at all for anything. They just, again, I think they're trying to make sure they can cover their bills, they can take care of themselves, especially single women. They're just trying to get by. And so this is all put to the back, and then all of a sudden you're getting a little bit of trouble with all of that. So you specialize in retirement planning for women. And so tell me, what unique strategies do you employ to address the specific financial concerns women face as they age? What specifically do you do? What makes you special? Eric?
Eric Blake:
I think the first thing, and I got a number of examples, but we have a new that we actually just went through our Simply Retirement roadmap process with. And the biggest thing that I could do for her was just listen to what her concerns are, what keeps you up at night? Because ultimately that's how, if we can make decisions around that, that's going to put you in a better position. We can't come out of the gate just shooting bullets with products, and you need to put money in an IRA, you need to do this, you need to do that. We got to start with the basics of just what's important to you,
What keeps you up at night? What worries you? What do you want life to look like? What are the things you want to do? In her case, she wanted to be, when she was younger, she did a lot of dance. She was a professional dancer. And unfortunately before, prior to the divorce, there wasn't an opportunity to do a lot of that. But now things, the divorce is final. She's kind of getting things settled. She's putting the pieces of her puzzle together, and that's one of the things she wants to do. She wants to get back to being able to be involved, whether it's her dancing or teaching dancing, how do we make that happen? And that's ultimately, we got to know what your vision of retirement looks like first before we can start talking about strategies and products and investments and all these other things. So I think that's really the key is you got to identify what's most important to you.
Jim Mazziotti:
Yeah. Well, you mentioned it and I find it intriguing. So I certainly want to know more about your Simply Retirement roadmap. That sounded intriguing from when I started reading about you and what you do. So can you walk us through the key components of the process and how it specifically addresses the needs of women and perhaps women over 55, 55 and over?
Eric Blake:
When you think about, you talked about the word process, and I think that's big. So when anybody is thinking about working with a financial advisor, you don't know, always know what's next. You don't know what is this person going to do, what do they do? What can I do to make a decision, an educated and informed decision about whether this financial planner is the right financial planner for me? So for me, having a process identifiable process that we can go through together to help you make that decision, that is huge. So in my opinion, if you're engaging with a financial advisor, you're thinking about hiring a financial advisor, you want to ask, that's one of the first questions I would ask is, what is your process for helping me make a decision about you? And that's really where the Simply Retirement roadmap process started and thinking about it going way, way back of thinking about The Millionaire Next Door, it talks about the characteristics of millionaires and it, it's not the person driving down the road in the expensive car, it's the one driving down the road in the paid off Honda.
But one of the things it also talks about is the number of hours those individuals spend planning their finances, and it's a lot of hours. And what I was thinking, okay, if we could simply focus on retirement planning, if we could do the heavy lifting for you, how much more time does that give you to do the things that are really important to you? Back to that concept, is it spending time with grandchildren? Is it spending time traveling? Is it spending time teaching dance? Give those hours back to you to do the things you really want to do. And again, that's where the process itself started, and that's simply retirement roadmap process. Again, we simply focus on retirement. That's it. And then from there it's saying, okay, what's the first step? So it's a very simple three step process. The first thing is we do an introductory phone call. I want to give you the opportunity to ask your questions. What questions do you have about this whole process of working with a financial? What does it look like? What do you do? And you also want to make sure, I also want to make sure that our expertise fits your needs and make sure that what we do is what you're looking for. That's a big part of it's. So that introductory phone call really gives us both a chance to say, is there a potential fit here? Are we a good fit for what you're looking for? And vice versa from there, if we say, okay, yes, this makes sense. I think this is a potential fit. Now we move on to that first meeting,
Eric Blake:
And
Eric Blake:
That's what I call the Simply Retirement Roadmap meeting. And it's about asking a lot of questions. I ask our prospective clients a lot of questions back to that point of what is important to you? What is it you want retirement to look like? Where are you at today? Actually, that's part of this whole process is we've got to establish where you're at today. We need to know how much you have in retirement assets and what your tax situation is and all these different financial issues. We need to know those things, but we also need to make sure we know what your vision of retirement looks like. Where are we headed? And once we have identified that, and I tell our clients, there is no decision. The only decision I'm going to ask you to make in this first meeting is, do you want me to do an assessment of your situation for you? And we don't charge for it. And that's one of the things that I've realized. There's different ways of doing business As an advisor, I've just figured out that this seems to be the best fit for what we do. I don't charge for that initial analysis. So at the end of that first meeting, Hey, would you like me to do a complimentary assessment and analysis of your situation? And if so, then we schedule the second meeting.
Jim Mazziotti:
How much work is involved for them really
Eric Blake:
To get, not necessarily, again, it kind of depends on the situation, but in most cases, somewhere along the way, we're going to ask them to gather their financial documents. We're going to ask them to gather their IRA statements and their 401k statements, their tax returns, social security statements, pension statements. So there is a little bit of homework in terms of just gathering that information. Again, we have to know if we know where you're going, but we don't know where you're at. It's hard to get there. We got to know the starting point. So that's really where a lot those financial documents come in. So we do have a list of items to bring either to that first meeting or we can gather 'em after that meeting depending on the circumstances. So not a whole lot of homework. A lot of it is just, again, I want you to have a view.
I want you to be able to share with me what retirement looks like. What does that final puzzle picture look like once we've got all the pieces put together. And then that third step is I come back to 'em with their roadmap. I say, okay, here's what I would do if I were in your shoes. Here are the steps I would take. And I actually list, it's a bullet pointed list of recommendations for their retirement income plan, their tax plan, their asset protection, whether that be estate planning, long-term care insurance, long-term care strategies, and then investment planning. So I come back with recommendations and I tell 'em, you've got three choices at this point. Again, even after that third meeting, we have our, what I call our final take your time step. So I never want anybody to feel like they're being pressured into making a decision when they're not ready.
So even after that third meeting, I say, okay, I want you to take this information back, digest it, think about it. Let me know what questions you have, and if you decide you want to move forward, awesome. But I tell 'em, you've got three options. Because a lot of our clients, a lot of clients that come to us have worked with financial advisors in the past. So I tell 'em, you got three choices. Number one, you could take this back to your financial advisor and say, Hey, I want you to help me do this. Financial advisor did all this work. I need help with this, this, and then this. Number two is there's a lot of DIYers out there, do it yourselfers. They could take that, those recommendations, and they can do 'em on their own. Or I say, what I tell 'em is number three, and this is my favorite of the three, is you come back and say, Eric, this is amazing work.
I really feel confident in where we would be going from here. What would it look like if I wanted to work with you? And I walk 'em through exactly what that deal looks like, what are the fees, what are the next steps? And that's really it. That's what the Simply Retirement Roadmap process is, is trying to keep it as simple and straightforward as possible. It's a three step process to help you make an educated and informed decision about us. And I would even make the argument that you could probably use that as part of your assessment of anybody else you're looking at too. So if you were looking at 2, 3, 4 different advisors, take our information and use that as a comparison point to say, Hey, I need to find the right person for me, especially again, if you've lost a husband because of death or divorce or you're just single, you're going into retirement on your own. You need to feel, you got to have confidence in what you're doing and what decisions you're making. So whether that's us or somebody else, find the right person for you.
Jim Mazziotti:
Yeah. Well, it sounds like you've thought through this and it's worked for both you and your clients. It's a step-by-step process. It's interesting when you said the three choices people have. I've kind of adopted something like that in my real estate business that when I'm working with somebody and I talk to them, actually before I even get started, I will say, you'll have three choices after we have a discussion today in selling your home first, you can do it on your own. People have done it for years, and you can still do that. So you can sell your house on your own. Number two, if you don't feel I'm the right person for you, you can choose another real estate agent to go with. There are many real estate agents and maybe some that fit your needs better than mine. And number three, you can choose me if I'm the right person for you.
And so it sounds like you do the same kind of thing. Obviously you've got two ears, and it looks like you utilize them to their full potential because listening I think is probably really, really important. So tell me a lot about me. I've always feared talking to financial planners. Maybe I haven't wanted to hear the reality of what I need to do or where I'm at in my life. Do you find that people avoid financial planning out of fear? And if you do believe that, how do you help clients overcome the anxiety that's associated with it? And I think you probably answered it a little bit with the three-step process and so forth, but do you find that people avoid financial planning out of fear?
Eric Blake:
Yeah, and I'll give you a little bit different perspective on that fear, though. I think our industry has done a pretty poor job of educating the public as to what a financial advisor should do and what they really do do. I think that's a big part of it, is there's the A, as soon as I walk in the door, what are they going to sell me? Are they going to sell me an annuity? Are they going to sell me a life insurance policy? What are they going to try to sell me? So I think the industry itself, and one of the most frustrating things for me is you think about it, anybody can call themselves a financial advisor, and insurance agent can call themselves a financial advisor. A stockbroker can call themselves a financial advisor. Anybody can. So how is the public supposed to distinguish between what is the difference between me and this person over here that just sells annuities?
Right? And so I think there's a level of the CFP certified Financial Planner group. They're doing some things to hopefully help with that, to help provide more education about what is a certified financial, what is financial planning? I mean, obviously that's a big step, but we need to help the public better understand and be better educated about what to expect when they're going to talk with a financial advisor or financial planner. What is that? What should I expect? And I think one of the things I've tried to do with our podcast, we talked about that at the very beginning, is that's a big part of what I try to do is provide that type of education. So just an example, like episode six, I talked about what are the 10 questions you should ask your financial advisor if you're planning for retirement?
Because again, those questions are going to be different than again, the 30 5-year-old. The 45-year-old, doesn't necessarily need to be asking those same questions. Doesn't mean they shouldn't be asking questions, but they're probably different questions. But when you're ready to make that transition into retirement those last few years, what questions should I ask my financial advisor? Or if I'm evaluating financial advisors, what questions should I be asking them to make sure I feel confident that they can do the job, that I can help them, that they understand the tax laws, that they understand secure act? And I dunno if we'll have a chance, I would love if we get a chance to talk about the Social Security Fairness Act. I'm happy to chime in on that as well. That was just voted into law. And that has a huge, huge impact on a lot of women. And I don't know that we'll get into that or not, but it's just an example of those are the things that I'm passionate about. So if somebody hasn't heard of it, I have. So that's just one example of educating myself and staying on top of things that are critical to retirement success for our clients.
Jim Mazziotti:
And it's constant, isn't it? I mean, you can't really take a very long rest.
Eric Blake:
You can almost always count on tax law changes every four years, regardless of what they tell you, Hey, this is going to be in place for the next 20 years. Now when the next administration is coming in the door, something's going to change and we're due for it. Actually anytime. Now we talk about the Tax Cuts and Jobs Act, our current tax rates, current law says in 2026, tax rates are going up. So what are you going to do to prepare for that? Now, I think there's a pretty good chance some of that will change with the new administration, but it might not. We don't know. You got to be prepared. You got to make sure what's in front of you and what decisions, what can I do proactively today to minimize my lifetime tax
Jim Mazziotti:
Liability? Right. Well, I think now's as good a time. So tell us about the Social Security Act that you mentioned.
Eric Blake:
Yeah, so Social Security Fairness Act was just signed the law on Sunday by President Biden. This is a law that does away with the government pension offset and the windfall elimination provision. Now, you may or may not know what those are, but if you have a teacher in your family,
Jim Mazziotti:
They
Eric Blake:
Know what it is
Jim Mazziotti:
You talked
Eric Blake:
About. So it's eliminated the WEP and the GPO, which impacts a huge number of women because obviously, think about teachers. A lot of teachers, of course, are women, and a lot of teachers have pensions through their teaching work.
And it basically, it's originally, it was voted in 1983. It was signed into law in 1983, the GPO and the WEP as a way to prevent people from double dipping. But that's 40 plus years ago. And life is just different. You think about a lot of police officers and firefighters, and even teachers who either had past employment where they paid into social Security or they left teaching or left whatever field they were in, and they got another career after that, or they just were working during those years, while they're still teaching, while they're still a firefighter, while they're still a police officer, just to make ends meet where they're paying into Social Security. And basically the WEP eliminated the, I won't say eliminated in every case, significantly reduced how much social security they could receive because they had this other pension over here that they were going to receive.
Jim Mazziotti:
Yeah, see, and when my daughter mentioned this to me this just a week, maybe a few weeks ago, and she mentioned that social security wasn't going to be available for her. And I said, well, that's impossible. That's the most ridiculous. It doesn't even make sense. And it looks like this fairness security Act.
Eric Blake:
Well, now it depends. So again, depending on her situation, and that's really where you got to look individually and say, okay, well, has she contributed to social security? Does she have enough earnings history to qualify for a social security benefit?
Eric Blake:
So
Eric Blake:
You can have at least 10 years, but if she gets 10 years, whenever that might be, she will now be able to receive whatever social security that she's eligible for in addition to her teacher's pension plan, if that's applicable for her. Now, here's the bigger part. Here's the part that I was amazed by when I saw these statistics. So we talked about it eliminates the WEP, the windfall elimination provision. It also eliminates the government pension offset. GPO. This is this a mind blowing number. 83% of those impact of individuals impacted by the GPO are women.
So why would that be? GPO is the part of social security or that impact Social security survivor benefits and spousal benefits. So if you are receiving a pension from a non-social security covered position and your husband passes away, they take two thirds of whatever your pension is and subtract it from whatever your survivor benefit was in a lot of cases, either in many cases, it just eliminated it all together. If your husband passed away, you're getting your pension. That's it. Social Security security's gone. You get no Social Security because of the government pension offs at the GPO or spousal benefits. If your husband is still alive and you might've been eligible for a spousal benefit, again, falls under that GPO in most cases. It's been eliminated. So it's a significant impact on, and that's part of it actually. We know a lot of women are teachers, so that's a big part of that 83%. But the biggest part is probably that women outlive men. So that's where the husband passes away. That's when the survivor benefit kicks in. And if women are living longer than men, they're usually the surviving spouse. GPO was either eliminating or significantly reducing what they could have received or what they would be able to receive as a survivor benefit from Social Security.
So
That is huge. That is a huge, I know in our practice we have multiple clients that are going to be significantly impacted by that.
Jim Mazziotti:
Well, that's going to
Eric Blake:
Positively, positively impacted,
Jim Mazziotti:
And that's going to give you a good reason to make a phone call to each of those clients.
Eric Blake:
I know we've already done it. That's already happened. We've already reached out, send an email, post it on Facebook, post it, wherever we could get it out there. We put it out there and individually where a client's at, and I knew we unfortunately had a client that she had lost her husband, maybe, I guess it was they were on Lifetime trip of a lifetime, had eight other friends. They were together with unbelievable Trip. We're keeping up with him on Facebook, seeing all the amazing stuff that's happening. He passes away through it in an accident.
She's eligible because again, she was a teacher, she was in education, she was getting her TRS, she was going to be eligible to receive some amount of survivor benefit, but not all of it for sure is basically probably about 60% of what she would've been eligible for otherwise. Well, now with this Social Security Fairness Act, she's going to get a significant increase in income because she's going to get the full survivor benefit now where this is going to make a huge impact for her. This is somebody that he was still working, making a really good income. This is life changing for somebody like that.
Jim Mazziotti:
I was going to say, it's totally life changing. And do you think it took so long for a bill like this to be passed as because it affected women more than men and women were just not represented as well as they should be? Perhaps?
Eric Blake:
That's hard to say. You think about the impact of some of the groups that represent police officers, that represent teachers. I mean, this has been in the works for a while. I think it just kept getting pushed at the back burner.
Unfortunately, teachers, and that's the case with many teachers, they don't get paid enough. They're never a high priority. The administration puts 'em on the back burner over the parents and so on and so forth. So there's no way to pinpoint a single factor. I think there's multiple factors at play, but I think it's just one of the things that's probably long overdue, just don't think it's ever been given a lot of thought. It obviously, like I said earlier, is voted in 1983. It was voted in the law in 1983, so that year happens to ring a bell. 1983 was also the time when the retirement age was extended. So all this was happening at the same time in an effort to obviously, hopefully help the social security system stay solvent. So that's been the other part of this whole argument. Is there an argument to be made that they don't deserve some of these benefits because it's going to further deplete the social security system. And yes, there's an argument to be made there, but my argument is think about Texas teachers. TRS 2023 was the first cost of living increase they had gotten in 10 years,
And the maximum was 6% increase if you had been retired since 2001. So you got a 6% increase in 2023 if you'd been retired for over 20 years, the cost of living the inflation in 2022 was 8.3%. So you tell me how that's fair that they're going to Yes. So you get TRS, you don't have to worry about anything. Yeah, my TRS hasn't gone up in the last 20 years. You tell me how beneficial that is and why. Now I'll make the argument that yes, they deserve those survivor benefits. They deserve those spousal benefits because they're living on the same thing today as that they were living on 20 years ago.
Jim Mazziotti:
Yeah, it's crazy.
Eric Blake:
Or actually technically less, if you're talking about true purchasing power, it's where it's worth, their pension is worth less today than it was 20 years ago.
Jim Mazziotti:
Yeah,
Eric Blake:
Much less, in fact.
Jim Mazziotti:
Well, I'm glad that you are the one that brought that up to talk about it. I think it's hugely important, and hopefully we've gotten out in front of it for a lot of people who are listening to this.
Eric Blake:
Well, I'll tell you, actually, I've got another episode recording on our podcast this afternoon, so I'm going to have a full episode out on it hopefully in the next few weeks.
Jim Mazziotti:
Well, I certainly encourage people to listen to the Simply Retirement podcast. And so tell me, how do you handle clients who are resistant to adapting their financial plans due to emotional attachments or certain investments or assets that they have? I'm guessing that you have your share of resistant clients, the people that you begin to work with or start going through a plan for them. How do you deal with people that are resistant to your suggestions and what you think is best for them?
Eric Blake:
Well, I think you have to start by identifying where does that resistance stem from? There's always something in their past that's putting 'em in that place. What is it? Can you get that out there? Now, there's going to be situations where for whatever reason, they're just not sharing. But you got to, as a financial advisor, it should be your job to dery as deep as they're willing to go with that to help understand what's that factor? What's that life event that's happened for a 65-year-old? It may have been when they were five years old that something happened to a parent, something happened to a grandparent, and there it triggered their mindset about why they have issues today with certain things. Now, actually, the other part to that is, again, when you're getting into those retirement years, you feel like time is limited there. You feel like there's this risk of, well, I can't go back and make up that money. So when you're talking about things like market risk and stock market risk, that's one of those things that does come up is, well, if the market goes down, I don't have time to make it up.
So that really gets into philosophy and from a financial planning perspective and how we go about the process of managing your investments, when you're in those retirement years and you're taking income, we utilize something we call a war chest. That's how people get that. It sinks in. That's how much do I have in my war chest? And in general, we try to keep typically at least about five years of income in your war chest. And there's some method behind that madness, of course, as you probably expect. So you think about, okay, worst case scenario, in most people's mind, when they think worst case scenario, they immediately jump to 2008 financial crisis.
So one of the worst time periods we had. So you think about the timing of that 2007, the end of 2007 is when it started the actual recession. Technically, they said it started in December, 2007, but we hit the high point in the market around November. Market started going down. 2008 was the worst, the very worst of all that. 2009, actually early March, around February, March, 2009 is when it actually bottom where we hit the bottom of the stock market decline, and it started going up from there, but we weren't really out of the woods at that point, but that was the bottom. But it took through 10, 11, and then even early into 12, so about five and a half years for us to go from where we were at the end of 2007, back to breakeven in 2012.
Jim Mazziotti:
Just very much like what the real estate market was, right? I mean, that's
Eric Blake:
Right. Oh, yeah. Without question. I'm sure if you lived through that, you've lived through,
Jim Mazziotti:
I was there. Oh
Eric Blake:
Yeah. So what I tell our clients is, okay, if I could show you that we could go five years without having to worry about this stuff, our longer term assets, because you can think you got to have your money grow. We talked about inflation a couple of times. So you still have to have your money grow. So if you retire at 65, the odds are you're going to live to your mid eighties or maybe early nineties at that point, life expectancy as you get older, changes the general average life expectancy, let's call it 82 for women and 78 for men, whatever it is today, that's for everybody. But once you've hit 65, your life expectancy is now mid eighties to early nineties.
So if you retire at 65, you need that money to last you 30 years. Well, you can't just stick it under your mattress and make that work. You're going to run out. You're basically trading market risk for inflation risk, right? So if I say, okay, if we can have this chunk of money that's going to grow over time to help you maintain your purchasing power, well, we're going to have this chunk over here around five years or so of income stashed away so that not if it happens when we go through the next financial crisis, we're going to be prepared. If I could show you that we could go at least five years not having to worry about touching this other stuff five years where we still have the income, we can still provide your income, you can still maintain your lifestyle. Would that make you feel okay?
And for the most part, the answer is yes. Now, there's some that'll say, well, I know five years has been worst case, but I think I'd rather have 10. That's okay. We can make that work. We might have to reduce your income, your planned income a little bit. But there's nothing wrong with that. So again, it's all about individualized planning, but that's how we avoid, that's one of the biggest, obviously biggest risks, biggest worries that people have is, well, what's the market going to do? And my answer to them is, we can't wait until the market does whatever it's going to do. We have to be prepared. We have to have your war chest in place when you retire. So, because Murphy's Law says you're going to retire on January 1st, 2026, and the market's going to go down 20% on January 2nd.
So we have to be prepared. So as we're approaching retirement, even, we've got to start building that war chest so that we're prepared when that time comes because it is going to come. It's not if it's a win. So we got to be prepared in advance so you're not sitting here in the middle of using that five and a half year financial crisis window again, as an example. We can't be into year two. And you're thinking, well, what do we do? It's too late. We got to do it now. We got to be prepared for it in advance, not waiting until we're in the middle of it to figure it out.
Jim Mazziotti:
Eric, I know you specialize in working with women. Do you take other clients? Do you work with all people?
Eric Blake:
So it depends on how you define all.
Jim Mazziotti:
Okay.
Eric Blake:
So we don't really take on clients from an age perspective. We don't typically take on, we don't really take on clients under 55. So in fact, if you were to go into our take notes, try to go into schedule our 15 minute introductory phone call, if you say I'm under 55, it's going to redirect you to other resources that are probably a better fit. But what I do tell people, and you can see this on our website, is yes, we do work with couples, but there's one huge caveat to that. Both spouses must be involved in the planning process. We're not going to take on a situation where the husband comes in every time and the wife says, I don't really like to do that. I'm not going to come in. We don't do that.
Jim Mazziotti:
So it's a commitment. They need to make a commitment to you, and I understand why. I understand the amount of time that you spend with them to prepare them for the next part of their life.
Eric Blake:
Just one stat, just so there's the stat out here that we, here in our industry, over 70% of women change advisors within the first 12 months of losing their husband, whether it's a death or divorce, within 12 months, more than 70% of women will change financial advisors. And that's because there's multiple reasons. But there a lot of times it's because they didn't have a relationship with a financial advisor. They didn't go into the meetings. They don't know that person. Really. The husband worked with 'em. They want to find somebody now that they feel comfortable with. We've had multiple situations where the wife came in to see us and started working with us because the financial, we've got a relatively new prospective client in the last couple of weeks where one of her quotes was, when I ask a question, I feel dumb. And it's because of the response they get. It can be just the lack of eye contact. If I don't ask a question, I'm done. So it's like she just felt like she was in a no-win situation every time she went in to meet with the financial advisor. When the husband and her went in to meet with the financial advisor, she felt like she couldn't ask questions. So she just didn't ask questions.
Jim Mazziotti:
She didn't know what questions to ask. Right?
Eric Blake:
To some extent, that's probably true that she didn't necessarily know what, but it doesn't matter what you ask the question, if it's on your mind, if it's something you have questions about, ask it. And if you don't feel comfortable enough to ask it, you're in the wrong situation. You need to find a different situation.
Jim Mazziotti:
So Eric, I've asked you a lot of questions. What question haven't I asked you that you feel it's important for the listeners of this podcast and your very own podcast, simply Retirement? What's the one question I haven't asked you that I should have?
Eric Blake:
It's hard to say. I don't know that there's anything you didn't ask. I think for me, the biggest thing is, again, you got to feel comfortable with who you're working with. If you're going to go make the commitment to work with a financial advisor, you got to feel comfortable with 'em. If you, again, back to what we were just talking about, if you don't, you don't feel comfortable asking a question of that financial advisor, you're in the wrong office. You need to find somebody else. You need to feel confident who you're working, that you feel like they have your best interest in mind. One of the things that we do as far as the podcast goes, we try to go way beyond just the dollar signs and the money aspect of it. I've done a lot of episodes on caregiving and those types of issues that face women.
You got to think about the emotional part of retirement as well. It goes again, again, there's more to retirement than money. We talked about creating your vision of what you want retirement, what you want retirement to look like. But there are so many other factors that specifically that women face beyond just that other stuff. So many women end up taking on the role of caregiver for their husband or their parents. So how do I navigate that along with my own retirement? So making sure that you understand some of those variables and just, again, the emotional part of retirement is so important, especially for women, because a lot of women, they don't like the dollar signs and the decimal points and all these kinds of different things.
Eric Blake:
It's
Eric Blake:
What can this do for me? What can I do with this money? What can I do for my family? How can I spend time with my family? How can I take 'em on trips? How can I do all these other things that are truly important to me? The money itself, and honestly, that's the way we all should be thinking, right? Money is just a tool, a vehicle to accomplish these other things. So what are those other things that you want to do? What are the other things that you're responsible for? And if, again, you can't bring those issues up, you can't talk to somebody about those, you need to find somebody that will listen to you.
Jim Mazziotti:
Great. Well, Eric, how do people get ahold of you and tell us where you're located. You're obviously in McKinney, Texas, but how can people find you? What's the best thing for them to do?
Eric Blake:
Best thing to do is go to our website@blakewealthmanagement.com. There you can learn more about us, our firm. You've got our About Us section. It gives you a little more detail, a little more background on us. You can see our Simply Retirement Roadmap process on there. That's a great way. Again, if you're truly evaluating advisors, that's a great way to learn about how we go about helping you make that decision. We're in downtown historic McKinney 2 0 1 West Virginia Street, suite 1 0 2, and then, of course, the podcast. That's a great way to learn more about us and learn what we're about. And that is the Simply Retirement podcast.com. And that's the best way to go learn more about us and again, see if we're the right fit. And then the other thing I'll tell you is reach out. If you've got questions, just reach out to us. We're always happy to help in some way, even if you're not quite the right fit, we'll make sure we get you in the right direction.
Jim Mazziotti:
Good to know. That's good to know. So Eric, I want to thank you for being here.
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