{"id":332779,"date":"2026-03-11T03:30:10","date_gmt":"2026-03-11T03:30:10","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/332779\/"},"modified":"2026-03-11T03:30:10","modified_gmt":"2026-03-11T03:30:10","slug":"jamie-hopkins-and-bonnie-treichel-why-you-cant-set-and-forget-a-retirement-plan","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/332779\/","title":{"rendered":"Jamie Hopkins and Bonnie Treichel: Why You Can\u2019t Set and Forget a Retirement Plan"},"content":{"rendered":"

Listen Now<\/a>: Listen and subscribe to Morningstar\u2019s The Long View from your mobile device: Apple Podcasts<\/a> | Spotify<\/a><\/p>\n

Our guests on the podcast today are Jamie Hopkins<\/a> and Bonnie Treichel<\/a>, who are co-authors of a new book, Your Retirement Sketchbook<\/a>. Jamie is the CEO of Bryn Mawr Trust Advisors<\/a>, Chief Wealth Officer of WSFS Bank<\/a>, and founder of the FinServ Foundation<\/a>. He\u2019s a professor of practice at Creighton University and the American College of Financial Services. He\u2019s also a contributor to Forbes<\/a> and has been elected to the Fellows of the American Bar Foundation<\/a>. Bonnie is the founder and Chief Solutions Officer of Endeavor Retirement<\/a>, a consulting firm dedicated to solving problems for plan sponsors, advisors, and service providers in the retirement plan industry. She also serves as treasurer for the FinServ Foundation<\/a>.<\/p>\n

Episode HighlightsThe FinServ Foundation and Your Retirement Sketchbook Understanding \u201cRewirement,\u201d Mindset Shifts, and Behavioral Biases in RetirementWhy In\u2011Plan Annuities Are Emerging Inside 401(k) PlansRetirement Bucket, Private Assets, and Reducing Sequence\u2011of\u2011Returns RiskRisks to Social Security BenefitsAdvisor-Client Dynamics in Retirement PlanningRetirement Planning Books and PodcastsRetirement Resources Mentioned<\/p>\n

Your Retirement Sketchbook<\/a><\/p>\n

Retirement Planning Guidebook<\/a><\/p>\n

Safety-First Retirement Planning<\/a><\/p>\n

Ikigai: The Japanese Secret to a Long and Happy Life<\/a><\/p>\n

Retiring Minds<\/a> Podcast<\/p>\n

More From Morningstar<\/p>\n

Retirement Withdrawal Sequencing Rules of the Road<\/a><\/p>\n

Here\u2019s How You Can Spend More During Retirement<\/a><\/p>\n

Jamie Hopkins: A Framework for Financial Freedom<\/a><\/p>\n

If you have a comment or a guest idea, please email us at TheLongView@Morningstar.com<\/a>.<\/p>\n

Follow Christine Benz (@christine_benz<\/a>) and Ben Johnson (@MstarBenJohnson<\/a>) on X, and Christine Benz<\/a>, Amy Arnott<\/a>, and Ben Johnson<\/a> on LinkedIn. Visit Morningstar.com<\/a> for new research and insights from Christine<\/a>, Ben<\/a>, and Amy.<\/a> Subscribe to Christine\u2019s weekly newsletter, Improving Your Finances<\/a>.<\/p>\n

If you want more Morningstar podcasts, check out The Morning Filter<\/a> and Investing Insights<\/a>.<\/p>\n

Transcript<\/p>\n

(Please stay tuned for important disclosure information at the conclusion of this episode.)<\/p>\n

Amy Arnott: Hi, and welcome to The Long View. I\u2019m Amy Arnott, portfolio strategist for Morningstar.<\/p>\n

Christine Benz: And I\u2019m Christine Benz, director of personal finance and retirement planning for Morningstar.<\/p>\n

Arnott: Our guests on the podcast today are Jamie Hopkins and Bonnie Treichel, who are co-authors of a new book, Your Retirement Sketchbook<\/a>. Jamie is the CEO of Bryn Mawr Trust Advisors, Chief Wealth Officer of WSFS Bank, and founder of the FinServ Foundation. He\u2019s a professor of practice at Creighton University and the American College of Financial Services. He\u2019s also a contributor to Forbes and has been elected to the Fellows of the American Bar Foundation. Bonnie is the founder and Chief Solutions Officer of Endeavor Retirement, a consulting firm dedicated to solving problems for plan sponsors, advisors, and service providers in the retirement plan industry. She also serves as treasurer for the FinServ Foundation<\/a>.<\/p>\n

Jamie and Bonnie, welcome to The Long View.<\/p>\n

Bonnie Treichel: Thanks for having us.<\/p>\n

Jamie Hopkins: Thanks for having us on.<\/p>\n

Arnott: Well, it\u2019s great to have you here. Both of you are involved with the FinServ Foundation. And to start out, I was wondering if you could talk a little bit about the mission for that organization and what it does.<\/p>\n

Hopkins: Yeah, well, thanks for bringing it up. I love FinServ Foundation. It\u2019s definitely my passion to give back in life. And it\u2019s a 501(c)(3) nonprofit organization that works with the next generation of financial service leaders. And the whole reason it was built was to become a bridge between the university world and the working world, to help these young professionals be prepared to be successful in this industry, and to come in and be great financial advisors and great leaders. And today, I just don\u2019t see enough purposeful development of this generation out there. And that\u2019s why it started. And we run a fellowship for two years where we do coaching, mentorship, and community. And it\u2019s now, with over 52 different colleges and universities, about 200 fellowships a year. And Bonnie came on as part of the board, and I called her up one day and said, \u201cHey, I\u2019d love for your help on this, too.\u201d<\/p>\n

Treichel: Christine, you might have learned that if you hang around Jamie long enough, he\u2019ll talk you into doing some of the cool projects that he\u2019s a part of. And so FinServ is one of those for me, but it\u2019s been really awesome to learn about the organization itself and to be a part of watching these fellows grow and learn and then come back and help to volunteer as they have gone through the program. And now they\u2019re back and volunteering and watching that next generation come into financial services.<\/p>\n

Benz: Jamie referenced university programs, and that feels like a relatively recent development that a lot of universities are adding programs in financial planning. Can you talk about that? What inning would you say we are in in terms of having financial planning, financial-services professionals integrated into college curriculums?<\/p>\n

Hopkins: I\u2019d say we\u2019re probably midinnings now on that. If you go back about 15 years ago, Christine, you\u2019re absolutely right. We had very, very few CFP or financial planning programs out there across the country. The CFP board<\/a>, the American College<\/a>, and some other organizations have done a really good job of helping promote those to get them to grow out there. And so we\u2019ve seen a proliferation of these. But what you see out there at the universities is we very much have \u201chave\u201d and \u201chave-not\u201d programs, meaning we have well-funded strong programs with great faculty leadership, the representatives. And then we have other universities that are really struggling to even find enough adjuncts or teachers or professionals to help out. And some of these programs have two students a year going into it. Other ones we have 300 students a year going into it. So at the university level, it\u2019s definitely not all even, but it is growing. It\u2019s growing fast. And it\u2019s really exciting that we\u2019re seeing people getting developed toward being advisors and financial planners at the university level, which 30 years ago was not a thing at all.<\/p>\n

Arnott: And as you mentioned, one of the bigger challenges in the industry is the aging of the current pool of financial advisors and how do we develop the next generation of people to fill the pipeline. Do you see other positive trends in that regard? Or are there other things that you would like to see to develop that next generation of financial advisors?<\/p>\n

Treichel: I\u2019ll maybe jump in with one of the things that I\u2019m seeing. And this is where I think FinServ Foundation is able to fill some of this gap is, you do see at some of these organizations\u2014I work with a lot of the aggregators, for example\u2014they\u2019re starting to have some good programs that they\u2019re trying to develop for what they call their \u201cnext gen group.\u201d But there still seems to be this gap where we\u2019ve got to take that student in college and help them with those first couple of years, moving from, \u201cHey, I\u2019m just out of college\u201d to \u201cnow I\u2019m in this organization, and what do I do to really be successful in those first couple of years?\u201d So I think that\u2019s where there\u2019s this really good opportunity to continue, as a lot of these financial-services firms, they\u2019ve really made great strides in creating programs for next gen, and they\u2019ve got some strong momentum, but there\u2019s still a really good opportunity to continue to fill that gap\u2014to take someone from college and help them build a successful opportunity in those first few years.<\/p>\n

Benz: Bonnie, I just have a quick vocabulary question. When you say \u201caggregators,\u201d what does it mean in this context?<\/p>\n

Treichel: Oh, great question. I use the term of the RIA firms, or Registered Investment Advisory firms, who\u2019ve over the years went from smaller organization to acquiring one RIA, then a second, then a third, and then hundreds of them. And now we have a really large-scale RIA. That\u2019s the reference point that I\u2019m using for those really large firms.<\/p>\n

Benz: OK, got it. Thank you. That\u2019s helpful. We wanted to talk about your book that you two collaborated on. It\u2019s called Your Retirement Sketchbook<\/a>. Before we get into the substance of the book, can you talk about how this collaboration came about? It sounds like you two have collaborated on a lot of things professionally, but maybe talk about why you decided to write a book.<\/p>\n

Hopkins: Yeah, well, I think Bonnie brought it up before.<\/p>\n

Treichel: Yeah, go ahead, Jamie.<\/p>\n

Hopkins: Bonnie brought it up before that if you hang around me for long enough, I start asking you to do more projects, so whether it\u2019s volunteer or building companies or initiatives. And the book was really a passion thing for me. I\u2019ve done these little funny videos for going on almost 15 years now, where I draw on these white little sheets of paper and talk about retirement topics. And I thought that they always did well with people because there was some visualization, some visual element of this that people could reference and think about and see. And so I wanted to take that thought process and actually put it into a book in our industry because very few of our industry-specific books have visual elements to them, but most people learn better visually. And so that was kind of like the driver behind the creativity of this one. And so then I reached out to Bonnie and I said, \u201cHey, Bonnie, I\u2019m not going to be able to do this by myself. I won\u2019t get it done. Would you like to be part of this?\u201d So then maybe Bonnie can add her part of the next piece.<\/p>\n

Treichel: Yeah, and I think we\u2019ll probably talk more about this, but as he mentioned, if you hang out with Jamie long enough, you\u2019ll team up on things. And we\u2019ve worked together in some other capacities. I think around this time we were starting to work on some of the FinServ things together, and we worked in some professional capacities on building some other programs historically. So we knew we worked well together on programs and projects, but I had spent quite a bit of time on the retirement plan side of things. And that\u2019s where I think our different expertise aligns very well with my work on the retirement plan side and Jamie\u2019s work coming more from the wealth side of the business, thinking, hey, we could really put this together and create something more powerful. And on the retirement plan side, I\u2019ve spent a lot of time over the years really trying to make complicated things very simple for people. How do we really take a complicated topic and make it very simple for the end participant or end employee to want to engage with their retirement plan?<\/p>\n

And that\u2019s where the book really started to come together into we\u2019re not trying to create the most complex analysis for some sort of tax-planning concept or something like that. But how could we really create something usable for an advisor to give a client to walk away with or a plan sponsor to give a participant as they walk out of their office? And that\u2019s where that vision really came to life.<\/p>\n

Arnott: How did you find the artist who did the illustrations for the book?<\/p>\n

Treichel: I live in Kansas City, and we found a local artist, and she is very, very creative. And so we found her and contracted with her to do the sketches. And there was a lot of back and forth where we would give her a concept and go back and forth on each one of the 125 sketches that are in the book.<\/p>\n

Arnott: And one of the big areas of focus for the book is the psychology of retirement. And you introduced the concept of what you call \u201crewirement.\u201d Can you talk a little bit more about that and what type of mindset shifts are the most difficult for people who are transitioning into retirement?<\/p>\n

Hopkins: Absolutely. I think we\u2019ve actually talked about this concept of rewirement before, maybe off air, but it\u2019s actually a term I trademarked going back about 15 years ago now. And what I was seeing out there is Americans, as they say, for retirement, they actually get pretty good at saving. They do start to understand compound interest and investing and these kind of basic financial trademarks of the world. People start to get experience with it, and they do understand it.<\/p>\n

But when we get to retirement, we have to have this whole shift from finding a lot of our meaning and community and lifestyle from the structure of work, getting our income from a paycheck, and saving. And then you retire, and we say, just kidding, you don\u2019t need to know how to save anymore. You need to know how to spend, which we told you was bad for 35 years: Right? Just keep saving. You\u2019re going to be OK.<\/p>\n

And you also now have to find your structure outside of work. You have to find your community and meaning in life outside of work and this kind of more structured environment. And now you live in a new world, in this retirement world, where you have to design it. You have to create your own income. You have to learn how to spend down. And all of those things together, I said, well, it really is almost like a whole change that your mind has to go through. And so that was the idea of rewirement\u2014that we need to rewire the way we think about retirement from this structured savings world to this unstructured part of our life, where we\u2019re really focused on spending and making money last throughout our life.<\/p>\n

Benz: Following up on that, it does seem like this whole issue of retirees not giving themselves permission to spend is a concern, or it\u2019s an issue among affluent retirees. Wondering if you two can weigh in on what do you think are some tricks or hacks or mindset shifts that people can employ so that they do get a little bit more comfortable spending and actually enjoy spending perhaps.<\/p>\n

Hopkins: Bonnie and I both have views on this one. I\u2019ll hop on first, and then Bonnie, I\u2019d love for you to share some of yours on this one. But I talk a lot about permission to spend. And what we see in the data and anecdotally working with clients out there is that we really are focused on \u201csaving is good\u201d and seeing our account balances in our 401(k) and our IRAs and just our total wealth go up and to the right as a good thing. It looks nice and green. And we get to retirement and we go through this spend-down phase and that\u2019s very scary. And not only is the money decreasing that we have, but when we spend money out of our savings, it feels like a loss to many people financially\u2014that somehow we lost this money because that principle, that amount that we had saved is now less.<\/p>\n

And so for a lot of people, they need the comfort to know that I can spend this money, that I\u2019m not going to run out of money. And that is very scary because we\u2019ve never lived through retirement before. And we are really having to make our money, our savings, last for an uncertain period of time. And we don\u2019t know how much we\u2019re going to spend during that time either. So that equation just fundamentally is really hard to solve and gets scary. So I think the more things you can do to give yourself permission to save, to know that you\u2019re going to be OK, to do some retirement income analysis, to have some safe income, the better off you\u2019re going to be and the more fulfilled you\u2019re going to feel in retirement.<\/p>\n

Arnott: Are there any other behavioral issues or biases that can throw people off as they\u2019re approaching retirement or transitioning into retirement?<\/p>\n

Treichel: I approach it, just kind of adding on to what Jamie said, when we\u2019re thinking about the strategies to help people a little bit more of the thinking about things that can help people feel like they have permission to spend. And this is where maybe for the advisors who are listening, we\u2019re thinking about how do people get comfortable feeling like they can spend? It\u2019s helping them understand what they\u2019re going to have for that duration throughout retirement. And I spent a lot of time talking about both in-plan retirement income solutions\u2014or rather use of annuities\u2014and how do you couple that with, and we may talk about this later in the podcast, but how do you couple that with things like Social Security?<\/p>\n

And again, there\u2019s still going to be a lot of uncertainties and unknowns. But when you start to kind of build that layered cake, so to speak, or put together those pieces of your puzzle, helping people think about at least I\u2019ve got these couple of layers of my cake that creates some certainty for me, a little bit of Social Security, a little bit of that annuity component in a retirement plan or otherwise, it does provide some safety and security to be able to feel like, \u201cOK, at least I know I\u2019m going to have this much, and I\u2019m going to be OK.\u201d And it creates that permission to spend. And I think that can really be useful for folks when they start to think about it\u2019s going to be OK to retire. It\u2019s going to be OK to spend a little bit.<\/p>\n

Arnott: I like that idea of thinking about retirement resources as layers of a cake. Are there any other behavioral issues or biases that can throw people off as they\u2019re approaching retirement?<\/p>\n

Hopkins: There are a ton of behavioral challenges. I mean, we\u2019re humans after all, and so we\u2019re going to be a little messy. We\u2019re going to have emotions, right? we\u2019re going to get upset about something on TV or on our phone one day and make a bad decision. And look, I think one of the things, just like the permission to spend, I think the permission to feel and allow emotions to show up in life is OK. We just don\u2019t want them to overrun our whole life. And so in Your Retirement Sketchbook, we do talk about a number of behavioral biases or hurdles that you\u2019re going to run into with retirement decision-making. And some of those are going to be things like home bias that we overindex, we overlean toward things that we know about. And so that could occur from investing\u2014that we overly invest in the industry that we grew up in, that we worked in. We sometimes will overinvest in companies we know are near us. And those can create challenges.<\/p>\n

A couple other ones that I talk about a lot are framing or anchoring. And what are those? Sometimes we anchor to like a recency bias that we see on TV, some news about a company, and they\u2019re doing layoffs. And we go, \u201cOh no, they\u2019re doing layoffs.\u201d Well, layoffs could mean a lot of things when companies report that. It could be, we\u2019re not doing backfills, that we\u2019re not hiring new people we had in a plan but never actually worked here. And they could be doing that because their company is the most efficient it\u2019s ever been, and it could do really well. And when we make that decision off this recent piece of information, it\u2019s narrow-framed sometimes. So we\u2019re not seeing the big picture. And those decisions, when we make them quickly and kind of rashly, it can hurt our long-term portfolio, it can hurt our spending habits, their investing habits. We can see clients when politicians come in and out of office to go all cash for periods of time. And historically, it hasn\u2019t been a very smart move. And so I think tempering those other feelings that you\u2019re having, especially early in retirement, is really important to kind of smoothing out a little bit of our ability to spend and invest.<\/p>\n

Benz: Bonnie, I wanted to follow up on something that you mentioned about guaranteed income in retirement plans. We\u2019ve now seen the uptake of an annuity option with BlackRock, kind of the first-mover and Vanguard more recently. I wonder if you can talk about those developments. Do you see them as a positive for people who are attempting to figure out how to translate their savings into some sort of paycheck in retirement?<\/p>\n

Treichel: This is an area that I get very excited about for people because I think when we think about in-plan annuity options, and you hear it called a lot of different things, but this concept of an annuity in your 401(k) plan, so to speak, I find that to be a very interesting development. There\u2019s a long history of regulators and legislators encouraging this type of option for Americans to have access to. So I think there\u2019s a really nice opportunity. I think we\u2019re still in the very early innings of this becoming widely available. There\u2019s a lot of different, I\u2019m going to say, piping that has to be created between the different platforms for the end investor. So it takes a lot of work between the different platforms, like you mentioned, BlackRock and then the different recordkeeping platforms for that to happen, but overall, I think it\u2019s a really good opportunity.<\/p>\n

One of the reasons I think it\u2019s important is that if I go back to that layered-cake example, and we want to give people access to\u2014they\u2019ll have Social Security, they\u2019ll have their investments in the marketplace\u2014and if they want that safety and security, which there\u2019s a lot of data to support that people are willing to give up some of the upside to just be able to have some of that safety and security, to be able to have that, the in-plan annuity option is a way to accomplish that. Many people will never have access to an outside investor. When you think of the typical account balance, call it $250,000, that\u2019s not going to be someone who has access to their own individual advisor, for example. So the annuity option in the plan can, at scale, try to help typical participants or investors with coming up with that retirement income number they\u2019re going to be able to understand: \u201cThis is what my account balance will translate to.\u201d<\/p>\n

That\u2019s a long way of saying, I think it presents a lot of opportunity for a lot of people in their retirement plan to start to understand what they will have in retirement. And it can do a lot of good. I just think we\u2019re in the early innings of those solutions becoming available to many participants or investors.<\/p>\n

Arnott: We also wanted to talk about some of the planning issues related to retirement. And a lot of clients really like the bucketing strategy, where it\u2019s kind of segmenting assets based on when they expect to use them. How do you evaluate when a bucketing strategy is better than a single portfolio strategy?<\/p>\n

Hopkins: Yeah, I think when we\u2019re working with clients day to day, what we\u2019re usually looking at is not that the bucketing strategy is necessarily an investment allocation strategy, but that it is more of a mental or visual framework for clients to understand why they have the assets they have, how they\u2019re going to use them, and to align those assets with different spending goals or time periods in life. I\u2019ll give this example because it just came up recently, and it is a little contrary to some of the pure investment bucketing approaches\u2014is that we were talking about legacy planning and that the third bucket really should also house legacy assets. So if you have kind of Bucket 1, which is your more safe near-term investments, CDs, bonds, some type of term annuity, cash; middle bucket: mixed risk assets, maybe a mixed portfolio of bonds and stocks; and then most people explain Bucket 3 as that\u2019s your investment or high growth assets.<\/p>\n

But I think what gets lost there is that\u2019s actually your time period bucket, and Bucket 3 should also include something perhaps like your house. Because if you\u2019re planning to leave your house to your kids or grandkids, it\u2019s Bucket 3. We\u2019re not using it. Life insurance you might have. If you\u2019re not going to use the cash value early in retirement for other purposes, that\u2019s a Bucket 3 asset. Those are not what I would deem as high-risk investment assets, although there\u2019s their own risks associated with both of those assets, but they really are a Bucket 3 asset. And that to me has really helped people understand also like how to think about legacy and a bucketing approach is: It\u2019s not all about returns and risk here. It\u2019s about how you\u2019re going to use your assets throughout the course of your life. But I think it\u2019s a very powerful tool for people to understand things because, again, right, it\u2019s mental accounting. It\u2019s a visualization. We can now see buckets with things in them, and we can then kind of gravitate and attach to that concept versus just seeing some spreadsheet with numbers in it.<\/p>\n

Benz: I wanted to follow up on that idea of legacy planning and bucketing, Jamie. Do you think that\u2014not to get too overwrought with buckets\u2014but is there a potential use case for like a fourth bucket where it\u2019s like, I would like to leave a legacy or I have uncovered potential long-term-care expenses. I don\u2019t have insurance for that, or I have a lot of longevity in my family, and so I\u2019m worried that if I live to be 100 that I might exhaust my funds. Is there potentially a use case of that fourth very long-term bucket as opposed to thinking of it as part of your growth bucket in Bucket 3?<\/p>\n

Hopkins: Yeah. I mean, the good news, Christine, is there\u2019s no rules, right? This is like, however you want to do bucketing, feel free to bucket how you want, right? But absolutely. I\u2019ve seen advisors actually use five buckets before, because sometimes I think there is an argument both at the tail end, like what we just talked about, is you actually just have a legacy bucket, and that you fill that legacy bucket with assets that you think are going to be left over at the end of your life. And that could be any type of asset, right? Jewelry, coins, right? You know, a gun collection. I\u2019ve seen that with clients many times, right? You have all these different things that could end up in this Bucket 3. But sometimes that middle bucket, I think the time period is too long for people really to grasp, because I have definitely seen people say, oh, we\u2019re going to use three buckets. And then the middle period is like year three to year 20. And I\u2019m like, well, that\u2019s a really long period of time, right? That\u2019s, you know, 17 years was your entire life before you went to college. That\u2019s a long period of time to put in one bucket. So I have seen people kind of segment that one out and get all the way out to five buckets.<\/p>\n

If, as an individual, you connect to five buckets better than three, then you should use five buckets. If you\u2019re an advisor working with clients and you think this particular client would benefit from a different framing of how their investments are being used based off of what they want in life, then yeah, make more buckets. I think there\u2019s a little bit of an argument out there that the power of three and simplifying this down to three buckets is enmass beneficial and useful, which is why we kind of rule of thumb, gravitate to three. I wouldn\u2019t recommend 10, but I think between three and five, there\u2019s a very good argument for it.<\/p>\n

Arnott: We\u2019ve heard a lot of asset managers talking about the virtues of alternative investments, private equity, private credit, and getting those types of assets into retirement plans for everyday investors. How should advisors think about using those types of assets in retirement portfolios, or should they be using them at all?<\/p>\n

Treichel: The comments that I\u2019ve been making on this topic is just because you can, doesn\u2019t mean you should. I\u2019ll maybe frame that slightly different for this conversation. I\u2019ve been using that in the plan fiduciary context, but I think, to your point, it\u2019s been getting a lot of attention coming from the White House and then perpetuated through regulators right now. I think the concept of alternative investments, which again has a broad meaning to many different things and has even most recently incorporated some annuity aspect to it as well, but in general, when we\u2019re talking about private equity, private credit, hedge funds showing up in your retirement plan, I think there can be a place for it. You\u2019ve seen it in defined-benefit plans for many years, and now it\u2019s making its way into defined-contribution plans like a 401(k). I think the thing to be cognizant of is that it might be best incorporated through something like a target-date fund or a managed account. So in other words, where you have a professional manager who\u2019s actually deciding on those allocations, who\u2019s able to incorporate that through a glide path and make changes as retirement nears, for example. These are not asset types that are appropriate for everyone but can add good value in a retirement portfolio when incorporated appropriately.<\/p>\n

Benz: I\u2019d like to ask about sequence of returns risk, which managing it is central to sustainable withdrawals. Can you talk about what frameworks you find most effective for managing it within, say, the first five or 10 years of retirement?<\/p>\n

Hopkins: Yeah, I\u2019ll take this one for a second. And I think the sequence of returns risk is one of the two biggest challenges really in the retirement income, I guess you would say, equation. If you\u2019re trying to just look at this from a math perspective, we have this uncertain first couple years, potentially, of volatility from the portfolio. The second one is really like, how long are we going to be alive, which we can\u2019t really answer. So it\u2019s really hard to manage that one. And the markets are going to do what they\u2019re going to do. So one of the answers is, we can\u2019t change the investment returns of anything during the first five years, like how bonds are going to perform, how CDs are going to do, how cash is going to do, how real estate is going to do, how the markets are going to do. They are going to move the way they move when we retire in that first five to 10 years. So over time, we might have a better guess of how these are going to perform.<\/p>\n

So how do we deal with this? I think one of the main things is reducing down that risk of having huge losses in our portfolio early on, where we have to take withdrawals from it. That\u2019s the whole idea of sequence of returns risk. So I do think starting off retirement, and I\u2019m a fan of this, is starting off retirement in a more conservative investment framework for the maybe two to three years heading into retirement, and those first maybe three to five. And then actually allowing our portfolios, we spend down CDs, cash, and bonds as a percentagewise to get more aggressive. Now, I\u2019m not telling people to go buy more and more equities, but to essentially deplete down some of our fixed-income sources earlier on, I think, is really helpful. So that\u2019s one framework.<\/p>\n

I think two other frameworks is look at our total asset pool. So I have talked about before tapping home equity during those potential down years early in retirement. So whether it\u2019s a reverse mortgage, and you\u2019re drawing on that line of credit, using a heloc is also a very powerful tool. Maybe you need to redo the roof, and that can be a good way to manage that big expense in the first couple years of retirement without having to spend down our portfolio, especially if we\u2019re seeing a drawdown in the assets we\u2019re in.<\/p>\n

Another one is actually just, it\u2019s fairly straightforward, is being diversified in our investments. I mean, that\u2019s not super-complicated, but I still see retirees sometimes retiring with really high concentrations in just a couple stocks because they were growth vehicles, and they allowed them to accumulate wealth, but that might not be the right vehicle to get through retirement. Wealth generation strategies and wealth preservation strategies, is what we\u2019re talking about now, are different things. So a more diversified portfolio, both among equities and across different asset classes, is really important because it gives us flexibility on being able to sell things at different time periods based off of how they\u2019re performing.<\/p>\n

Arnott: One layer of the cake that you mentioned is Social Security, and for many people, it\u2019s really the biggest layer of the cake. But we\u2019ve talked to a lot of people who are really, really worried about potential funding challenges for Social Security. Is that something people should be worried about, or do you think a scenario of potential benefit reductions in the future is not likely?<\/p>\n

Treichel: Well, I think there\u2019s a real issue that Social Security is facing a funding gap. I think depending on what literature you read or what you listen to, there are some that take a very drastic approach that Social Security is going away, and you\u2019ll never have it again. I believe there will be continued evolutions and that Social Security will not go away. But I do think it\u2019s really, and we talk about this with the sketchbook approach, right, it\u2019s currently facing a funding gap, and the reality is that it may have an impact on future retirees and how they structure their income.<\/p>\n

So when we think about the sketchbook approach, what does that mean? It means thinking about how to draw the lines, erase a little, reshade a little, and be thoughtful about other approaches to take in thinking through, OK, what else do we need to build the cake? So if we go back, I keep going back to the cake, but if we think about how to add those layers so that, if that slice of the cake isn\u2019t as thick, we can supplement that with other things. If it\u2019s more in the 401(k), more in a different brokerage account, but being thoughtful about: We\u2019ve still got to build the same cake, so how do we just supplement with other things with the potential of not having as much coming from Social Security in the future?<\/p>\n

Benz: We wanted to ask about advisor-client dynamics in the realm of retirement planning. I\u2019m wondering if you can talk about what you think differentiates great advisors from those who are merely competent during this retirement transition. Can you talk about the characteristics of the really great ones?<\/p>\n

Hopkins: Yeah, I can take that for a second. I think when you look at retirement income planning and this retirement transition, it is a little bit more complicated than just the traditional, let me help you invest and save your money, which is one skill set that you need. But when we get to retirement, it\u2019s a lot about this emotional side, about helping people find meaning, about helping them figure out how they\u2019re going to volunteer and give back in their community, how they\u2019re going to fill out their time, engaging perhaps their kids and grandkids, because at some point, a death is going to occur. It\u2019s inevitable. And are we prepared for that end-of-life planning that our clients don\u2019t always want to talk to us about?<\/p>\n

I actually think the retirement income planning side requires more changes, more adaptive type planning than saving does. I think most saving strategies actually can be kind of a set-it-and-forget-it. I don\u2019t believe most of retirement can be a set-it-and-forget-it. We really should be reviewing how we\u2019re spending money, how we\u2019re living, what our life and health is each year. So a great advisor that is dealing with retirement income planning is actually touching a broader arrangement of topics that are not all investment, not all product, not all savings-oriented, but are very life-driven. Like, how are you living your life? And are you living it in a way that you\u2019re finding fulfillment and enjoyment? And if not, what can we do to the plan to allow you to spend more, to shift and sell your house, or move closer to your kids, or whatever that thing might be that you feel like you\u2019re missing? I think a great retirement income advisor is\u2014I don\u2019t love the term \u201clife coach\u201d–but we\u2019re a little bit more like driving around these life decisions than just financial decisions.<\/p>\n

Arnott: The book really covers a lot of ground, everything from psychology of retirement to advisor-client dynamics to kind of nuts-and-bolts issues around taxes and planning for withdrawals. And I\u2019m curious, what part of your own future retirement planning has changed after you went through the process of writing the book?<\/p>\n

Treichel: Well, I think for me, and maybe I\u2019ll jump in with just, it\u2019s a good reminder to be doing these things myself. It\u2019s really easy to be the person, right, who says, \u201cHey, do these things.\u201d But, you know, as Jamie just mentioned, it\u2019s about looking at these things each year and not just the math part of it or the savings part, but really thinking about the emotional part. Again, if you think about just going back to the whole concept of\u2014it\u2019s a sketchbook\u2014I think the lawyer in me is very analytical. And so it\u2019s hard to think about the emotional impact of things: Family things change, emotional things change. I moved back to Kansas City to be closer to my family. All of those things are part of the equation well beyond maxing out the 401(k) and what to set aside in a brokerage account. So for me, it\u2019s actually been a good reminder that I need to incorporate the emotional side and that piece into how I\u2019m planning, not just the actual dollars and cents.<\/p>\n

Benz: How about you, Jamie?<\/p>\n

Hopkins: Yeah, I think Bonnie and I even changed some of our charitable giving strategies at the end of last year after doing this and talking about some tax planning around it, too, so it\u2019s funny when you kind of know these things, but you draw them out, and we actually did some of that work independently of each other, but we were talking through this stuff and then ended up doing that in December of last year.<\/p>\n

I\u2019ve also updated my estate plan since doing the book. That\u2019s probably the biggest actual driver. I\u2019ve become more and more focused on a lot of this end of life, how does everything transfer, and protecting the family, and some of online fraud and digital asset concerns out there, I think, is just growing. So I went and did an update of our estate plan, my wife and I did hear pretty recently, and I think that\u2019s probably the biggest two that came out of this was personally I\u2019ve shifted that approach around charitable giving and around my estate plan.<\/p>\n

Benz: So the book, Your Retirement Sketchbook, is a wonderful resource. I\u2019m wondering if there are any other books, blogs, podcasts, that are retirement-related that you\u2019d put on people\u2019s must-read or must- listen lists. What are the things that you think are kind of the essential reading or listening?<\/p>\n

Treichel: I\u2019ll mention one that is a newer podcast that is, I think, for those looking for a podcast that could be interesting. It\u2019s called Retiring Minds<\/a>. So it\u2019s Fred Reish and Nevin Adams, and they had a podcast before, and they still do, that is very technical in nature about retirement plans. But then they, as they\u2019ve both moved into retirement, and I\u2019ll call their \u201cretirement\u201d something that I\u2019ll put in air quotes because they both are still doing kind of part-time work as well, they have a new podcast where they\u2019re interviewing retirees. And it\u2019s really talking about more of this emotional side of being in retirement. And so I think that\u2019s an interesting one for more of the softer side of retirement that we\u2019ve talked about in the book as well. And that might be an interesting one for folks to listen to.<\/p>\n

Hopkins: I think a couple resources I really love, and Christine, we can\u2019t go through and not talk about your book, but that\u2019s obviously a great one, right? How to Retire<\/a>. <\/p>\n

Benz: Well, you\u2019re in it.<\/p>\n

Hopkins: But it\u2019s a great book, and one of my favorite retirement thought leaders and a good friend of mine, Wade Pfau, he has a Retirement Planning Guidebook<\/a>, which is, I think, a really, really good book. He\u2019s actually done a couple iterations of retirement. He\u2019s got a Safety-First Retirement Planning<\/a> book, too. He\u2019s an academic, and he adds a lot of analysis into those books, but they\u2019re really powerful. If you\u2019re more of a do-it-yourselfer and you want to educate yourself on retirement research and different distribution strategies, those are really powerful ones.<\/p>\n

I\u2019m going to throw one other one that\u2019s kind of onto the side, but there is a book, and I\u2019m going to forget the full name, but this whole concept of ikigai, if you haven\u2019t been familiar with that, it\u2019s really more about how to be your best self and live your best life. There actually is a version of an ikigai book that overlaps with retirement, but I think there\u2019s a bunch of podcasts that actually cover that concept. There\u2019s a handful of books out there, but I think if you try to understand what do you want in life, what inspires you, what drives you, what convictions you have, what values do you hold, that doing some type of work in that space is equally as important as understanding Social Security and distribution and taxes and estate planning.<\/p>\n

Think about those types of books as actually retirement books, because they are preparing you for this future you and how you\u2019re going to live the most enjoyable and fulfilled life that you can.<\/p>\n

Benz: Well, Jamie and Bonnie, this has been a wonderful conversation. Thank you both for taking time out of your schedules to be with us today.<\/p>\n

Treichel: Thanks so much for having us. This was great.<\/p>\n

Hopkins: We really appreciate it. Thank you so much and, as always, deliver great information out there.<\/p>\n

Arnott: Thanks to both of you. We really enjoyed the conversation.<\/p>\n

Thank you for joining us on The Long View. If you could, please take a moment to subscribe to and rate the podcast on Apple, Spotify, or wherever you get your podcasts.<\/p>\n

You can follow me on social media at Amy Arnott<\/a> on LinkedIn.<\/p>\n

Benz: And Christine Benz<\/a> on LinkedIn or @christine_benz<\/a> on X.<\/p>\n

Arnott: George Castady is our engineer for the podcast, Jessica Bebel produces the show notes each week, and Jennifer Gierat copyedits our transcripts.<\/p>\n

Finally, we\u2019d love to get your feedback. If you have a comment or a guest idea, please email us at TheLongView@Morningstar.com<\/a>. Until next time, thanks for joining us.<\/p>\n

(Disclaimer: This recording is for informational purposes only and should not be considered investment advice. Opinions expressed are as of the date of recording and are subject to change without notice. The views and opinions of guests on this program are not necessarily those of Morningstar, Inc. and its affiliates, which together be referred to as Morningstar. Morningstar is not affiliated with guests or their business affiliates, unless otherwise stated. Morningstar does not guarantee the accuracy, or the completeness of the data presented herein. This recording is for informational purposes only and the information, data, analysis or opinion it includes, or their use should not be considered investment or tax advice and therefore, is not an offer to buy or sell a security. Morningstar shall not be responsible for any trading decisions, damages or other losses resulting from or related to the information, data, analysis, or opinions, or their use. Past performance is not a guarantee of future results. All investments are subject to investment risk, including possible loss of principal. Individuals should seriously consider if an investment is suitable for them by referencing their own financial position, investment objectives and risk profile before making any investment decision. Please consult a tax and\/or a financial professional for advice specific to your individual circumstances. Morningstar Investment Management LLC is a registered investment advisor and subsidiary of Morningstar, Inc. The Morningstar name and logo are registered marks of Morningstar, Inc.)<\/p>\n","protected":false},"excerpt":{"rendered":"Listen Now: Listen and subscribe to Morningstar\u2019s The Long View from your mobile device: Apple Podcasts | Spotify…\n","protected":false},"author":2,"featured_media":322252,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[114,268,85,46,266,267],"class_list":{"0":"post-332779","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-il","11":"tag-israel","12":"tag-personal-finance","13":"tag-personalfinance"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/332779","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=332779"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/332779\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/322252"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=332779"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=332779"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=332779"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}