A Different Way to Look at Retirement, with Eric Brotman
Welcome to The MapleMoney Show, the podcast that helps Canadians improve their finances to create lasting financial freedom. I’m your host, Tom Drake, the founder of MapleMoney, where I’ve been writing about all things related to personal finance since 2009.
What does retirement look like to you? Whether it’s five years away or fifteen, at some point most of us will stop working our regular jobs and find ourselves with a lot more time on our hands. But retirement in 2021 looks different than it did when our parents stopped working. And a different retirement requires a different approach.
My guest this week is Eric Brotman, CEO of BFG Financial Advisors with over 25 years of experience as a trusted advisor. He is also the author of multiple books on personal finance, including his latest book, Don’t Retire…Graduate! Eric joins me to talk about a new way to look at retirement, and why it might look a lot different than you think.
According to Eric, there are two challenges faced by today’s retirees. We’re living longer than ever before, and life is a lot more expensive than it was for previous generations. Our car payments are as much as our parent’s mortgage payments, and we pay for a long list of things we now consider essential services, i.e. high-speed internet, cell phones, streaming subscriptions, etc.
Eric and I discuss the identity crisis many people face when they leave the workforce because they connect who they are to what they do. This can cause a huge void when their jobs are suddenly no longer there. But it’s not all doom and gloom. Eric shares some tips on how to shift your mindset about retirement, and how it might make you more fulfilled than ever.
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- Retirement today doesn’t look like it used to.
- How do you plan to spend your retirement?
- Too often, our identity is wrapped up in what we do.
- Why you shouldn’t quit your job just because you can.
- In the future, retirement is going to be very expensive.
- Today, we pay bills for things that used to be free.
- Redefining the ‘bucket list’.
What does retirement look like to you? Whether it’s five years away or 15, at some point most of us will stop working our regular jobs and find ourselves with a lot more time on our hands. But retirement in 2021 looks different than it did when our parents stopped working. And a different retirement requires a different approach. My guest this week is Eric Brotman, CEO of BFG Financial Advisors. With over 25 years of experience as a trusted adviser, he’s also the author of multiple books on personal finance, including his latest book, Don’t Retire… Graduate! Eric joins me to talk about a new way to look at retirement and why it might be a lot different than you think.
Welcome to the Maple Money Show, the podcast that helps Canadians improve their personal finances to create lasting financial freedom. Did you know that 57 percent of Canadian adults don’t have a will? Willful has made it more affordable, convenient and easy for Canadians to create a legal will and power of attorney documents online from the comfort of home. In in less than 20 minutes, and for a fraction of the price of visiting a lawyer, you can gain peace of mind knowing you have a plan in place to protect your children, pets and loved ones in the event of an emergency. Get started for free at maplemoney.com/willful and use the promo code, Maple Money to save 15 percent. Now, let’s chat with Eric…
Tom: Hi, Eric. Welcome to the Maple Money Show.
Eric: Thanks, Tom. It’s great to be here.
Tom: Well, thanks for being on. You have a book that came out just recently that covers something I’ve alluded to a few times on the podcast, but we haven’t really dived into. First of all, your book is called, Don’t Retire… Graduate! One of the interesting topics within it is this idea that retirement isn’t the same as it used to be. I’ve said it on the podcast before, it’s not the traditional sense where you retire at 65 and die at 70. It’s much longer now, right?
Eric: Yeah, it can be several decades. It could be half your adult life. One of the challenges is people want to retire early but they could live to be 107, so you better find something to do for what is decades. This is not a five year horizon for most people.
Tom: And that’s just it too. On this podcast we talk a lot about retiring early. More and more that seems like a dream to people. It’s something I push back against a bit because I think of the traditional definition of retirement where you’re sitting on your couch watching TV, or the more fanciful version where you think you’re going to be traveling 365 days of the year. I don’t think either of those is quite right anymore.
Eric: It’s not. There’s only so many golf courses. There’s only so much daytime TV anyone should stomach—basically zero. It’s really important to define what retirement is versus what it was. I think you nailed it. It used to be a five year period where, for most people, they were significantly elderly. I mean, 68 at one point in time was old. Today, people 68 are going back to school. They’re starting companies. They might have 16-year-old children for crying out loud. It’s not what it used to be. We have to get rid of that definition of retirement because it is antiquated and no longer represents our population or the way in which we’re evolving, quite frankly.
Tom: I suppose part of the answer is that it’s going to be different for everyone. But how do you define retirement nowadays?
Eric: I define retirement as the absence of needing to work, not the absence of work. If you’ve reached a point where if you wanted to never work a day in your life again and you have enough resources, enough income sources, enough principal, enough wealth—and where work is truly optional, as far as I’m concerned, you’re retired. That doesn’t mean daytime TV. It might mean starting something new. It might mean that side hustle you had for all those years is now going to be your full-time gig. It might mean that you’re doing volunteering but at a totally different level, or that you’ve got some other things going on in your life. You don’t necessarily have to make money doing it. But it’s important not to just be retired. I look at LinkedIn as the perfect example of this time. If you look at somebody’s profile, somebody’s profile is going to say, “I’m an architect, I’m an accountant,” or whatever. When they retire, a good profile is going to say, “I am on the board of this hospital,” or, “I volunteer at this school…” If it just says retired, it might as well say deceased. No one’s going to say, “Oh, there’s somebody I got to get to know. They’re really dynamic.” And unfortunately, in North American culture, a lot of times we identify who we are and confuse it with what we do. If somebody asks you, “Who are you?” the first thing people think of is their working title, “I’m a podiatrist…” Well, no, you’re also a husband, a father, a brother, a volunteer, a student and whatever else. You’ve got 15 hats. But if we identify only with what we do when we don’t do it anymore, we lose our identity and that’s tragic. That’s a horrible way to go out.
Tom: I see that a lot. Having had a couple of decades in a corporate environment, that happens all the time. People literally introduce themselves as their job title and just as a networking skill, it seems like a bad idea to not have a better elevating pitch for what you do to show you’re a little more interesting than that current job.
Eric: Well, yeah. Tell me about yourself. “Well, I’m the senior vice president of logistics of X, Y, Z.” Conversation over. I don’t even know what that means. Be interesting, be human, connect with people and have authentic conversations. It won’t matter what your job title is. Your business card is not as important as the fabric of your world. Be something amazing and don’t ever stop growing. Don’t ever stop evolving or you’re dying. There’s no point to stop thriving just because you don’t have your full-time job.
Tom: By thinking this way, I assume it kind of just helps the retirement planning—what you’re going to do in retirement? If you don’t have this mindset that you are just your job it seems like you don’t have to sit down and think about what you’re going to do when this job is over because you already have.
Eric: In a perfect world time you do, but a lot of times that’s not what happens. A lot of times people are ready to quit their so-called day job. They’ve reached financial independence but they haven’t really thought about those other aspects of their lives in depth. For example, if you’re passionate about health care—let’s say you’re passionate about children’s oncology and making kids and their families more comfortable under incredible strain and duress. If that’s your thing, it’s important when you’re still working, to plug into those communities and get involved already so that when you stop working, you already have that network. It’s like having another professional network even though it may not be for profit. You already know the people to call and say, “Guess what? I’m available a whole lot more than I used to be. Let’s plug me in and let me make a difference.” It’s important to have that plan in advance. You can’t just wake up one day and say, “Well, now what?”
Tom: What is your advice to someone with this new framework we’ve established for retirement? How do you feel like you’ve actually sort of crossed into retirement? Is it quitting your job or is there room for a middle spot here where maybe you just reduce your hours? You mentioned the idea of being on a board. You could kind of stay in your same industry without necessarily saying, “I’m done and this is the line I’ve crossed”
Eric: Definitely. For some people, it’s coaching, consulting, mentoring or having internships where you help groom young people in the field they want to be in. I don’t think defining retirement necessarily has to even be a major life event. I think you’re crossing over to where work is truly optional. If you know you have enough money and enough means to go without a paycheck for the rest of time… Or, if you really love your day job and decide to stay, as soon as you say, “I’m out of here. I quit,” it feels different. It’s one thing to work because you love it but it’s a totally another thing to work because you got mortgage payments to make or tuition payments to make or because you got to make ends meet. And people living paycheck-to-paycheck are under incredible strain and duress all the time. And the threat of unemployment, getting hurt, or just having a pay cut could be devastating. So being in a situation where you’ve built a path to abundance rather than looking at a scarcity mindset, matters. And once you’ve reached that, don’t quit your job just because you can. It’s nice to know you could, but don’t quit your job just because you’re of a certain age. If you’re useful, enjoying it, making a difference and it’s what you love, why would you give that up? What are you going to do instead for your 40 or 50 or 60 hours a week? And you’re right, you could absolutely cut back. You could say, “I’m only working nine months, a year or six months a year or three days a week.” You can build a balance any way you want to once you’ve reached that point where you’re not punching a clock because you have no choice.
Tom: You mentioned this idea that if you don’t need your job, you might just stay there because you like it. I found something similar myself. Now, it’s not that I don’t need a paycheck, but by having a business as well, the day job became something where I didn’t feel like a “must have” or the mortgage won’t get paid. It actually started to happen slowly where I actually enjoyed my work more and I felt like I could speak up. I had better job satisfaction. It wasn’t that it was paycheck-to-paycheck but it was certainly fear of no paycheck. I’m a big fan of people getting things like side hustles and such where they can just take some of that pressure off and actually maybe enjoy their work more.
Eric: I completely agree with you. And millennials have figured this out. And the Xers—and I’m a Gen Xers, a proud Gen Xers. I’m in that little, tiny, generation that will never have political pull because we’ll always do what the boomers want and then what the millennials want. But being in that little, tiny, baby bust, what I can tell you is that there are generations of folks who still were caught between the generation that had the pension, the gold watch and riding off into the sunset and being idle as a goal, versus the generation that says, “Oh, my gosh, we’re on our own and we better have a fallback because we change jobs every three to five years anyway.” There’s this interesting connection between the two. Where I fall, and where a lot of the folks we represent fall, are somewhere in between where their parents had a totally different retirement picture than they do. And their kids are going to have a totally different picture too. My daughter’s in middle school. She’s going to have a totally different retirement picture and plan than I do. Her work and career will be different. Her trajectory will be different. Not better or worse, just different. So side hustles are brilliant because as far as I’m concerned, knowing you’re still going to pay the bills and not going to starve to death if something goes wrong with your primary employment, is really a Godsend. It’s a big deal. For me, I’ve already got side hustles. I now have three companies. One of them is a consulting practice, which ultimately, my retirement plan is to do consulting in addition to some of the financial advising I’m doing. And I’ll still be doing the writing and the media… I never want to give this up. But, if for one reason or another I have to, either for health reasons or for family reasons or for some kind of reason where I have to give something up, I will not be idle. I will instantly have another shingle to hang to show that this is what I’m doing now as my primary. It’s a game changer.
Tom: That seems so much smarter to, to put this in place. Again, it’s not this magic finish line of retirement wondering what I’m going to do. But, if someone were to start something now in their 40s or 50s, whatever it is, you’re going to have a little extra money now. You’re going to enjoy your career more. And, like you said, when that primary source of income and identity is gone, you’re not starting from scratch. You’ve already got something on the go.
Eric: Correct. And it doesn’t necessarily have to be something for money. Although, for people in their 40s, it generally is. But if you’re in your 60s and you want to start a side hustle that’s really more of a volunteer thing than a “for profit” thing so you retain an identity that is more than just your day job, that’s important, too. It doesn’t have to be for money. If you’ve reached a point where the paycheck doesn’t matter… I’m not saying it’s not nice. I’m saying it doesn’t matter. It’s great to have a totally different experience at work than if Friday comes and there’s no check, you’re doomed. Let’s face it, there’s a sense of horror, of fear around that. If you can alleviate that, things can be a whole lot more fun.
Tom: Yeah. When you talk about people in their 60s not doing something necessarily because of the money, I think of some of those traditional retirement jobs where people work at Wal-Mart or Home Depot just because they want to talk tools or just have some interaction. They’re getting paid probably close to minimum wage, I assume, so it’s certainly not all about the money. It’s a little trickle that will help them in retirement and keep things more free-flowing. Besides that, they get to get out and talk to people.
Eric: It’s something to do when you get up in the morning. More than anecdotally, I can tell you, the people who don’t have a reason to get out of bed every morning, stop getting out of bed every morning. It doesn’t mean you have to be up at 5:30 and be reading The Wall Street Journal. It just means if you sleep until 9:00, 10:00 or 11:00, you’ve missed half your day. And while that sounded great in college and I confess to of being nocturnal at the time temporarily, for whatever biological reason that was, it’s not a good way to spend your senior years because it will snowball. You will atrophy, not just physically, but mentally and emotionally. If you don’t use it, you lose it. And that’s true of your relationship skills as much as it is your musculature.
Tom: If your goal is to retire at 50 or 55 and you’re going to live to a 100, we don’t have those pensions as we did before because we are in this odd middle place, that changes savings rates quite a bit. You’re now in charge of your retirement and it looks like it’s going to be a lot longer.
Eric: Not only is it going to be a lot longer it is going to be much more expensive than you dream. Think about some of the bills you pay every month of your life that 20 or 30 years ago didn’t exist. Things that we consider necessities of life now like your Internet service provider, cell phones, streaming services—whatever it is, things that didn’t exist that now are part of every budget because they almost have to be in order to function. There will be something five years from now, 10 years from now, 20 years from now that we haven’t even contemplated that we will feel is a necessity. It will feel like a sudden fixed expense. I don’t know what it’s going to be. If I did, I’d be on a beach with an umbrella and my drink right now. But whatever it’s going to be, it’s going to be part of our realities. I think it’s real important to understand that retirement’s going to be longer than you expect. You’re going to live longer than you dream. And it’s not going to be related necessarily to how long your parents lived. You’re going to live longer than you expect and it’s going to be more expensive than you expect and so, when you look at your financial independence number it is going to look astoundingly large. It’s not. It’s just replicating your income adjusted for inflation for a long period of time. It’s going to feel like a huge number but what I tell a lot of people is that your grandparents paid for their house for what you’re paying for a car. If that doesn’t define inflation and the value of your currency, when you look at those numbers in the future, they’re not the same as what they would be today. I sometimes joke about the Parker Brothers game, The Game Of Life, where you had a spinner and go around until you get to the end of this board game. It was all about if you had a million dollars, you got to go on to Easy Street. Whereas, if you didn’t have a million dollars, it was basically the poorhouse. A million dollars today is somewhere between $30,000 or $40,000 a year. That’s it. Three to four percent withdrawal. That’s not wealthy. That’s recurring income. But most people don’t want to live on $30,000 or $40,000 a year. So it requires big numbers and big thinking to recognize that replicating your lifestyle now in 30 to 35 years is going to require a number that right now feels impossible. But it’s not impossible.
Tom: Yes, it’s an interesting fact about expenses in the future that don’t even exist now. I hadn’t heard anyone say that one before but when you bring up the cell phone and the and the Internet and everything, who knows what’s going to exist in the future that’s going to be the next thing you “must have.”
Eric: Or that you think you must have in order to keep up with the Joneses. But some of it is, if you don’t have the Internet at home, you’re essentially disconnected from the world. And while there may be some free or subsidized options, they’re not the ones you would choose if you had the choice. I’m old enough to remember when all television was free and there were four channels and barely anything on. Now there’s 4,000 channels and rarely anything on so it’s amazing how far we’ve come. But now we pay bills for things that used to be free. Now things that used to be something that was just available that we would choose to buy is now a monthly subscription. We have subscriptions for everything and they add up. I’m not telling you not to do that, just be aware that’s a model that’s not going anywhere because it’s a sustainable business model. There’s a reason why the tires on our cars wear out as fast as they do. It’s not because it’s impossible to make a tire that doesn’t wear out. It’s because it’s impossible to make a tire that doesn’t wear out and to stay in business in the tire business.
Tom: Yeah, that’s an interesting thought. If there were a tire that doesn’t wear out, would people even buy it? Would it keep them in business because it would have to be thousands of dollars.
Eric: Or it would happen once. Everyone would get them and then it’d be done. It reminds me of Y2K. It reminds me of this incredible experience back in 1999 where everyone felt the need to get new computers simultaneously because the computers weren’t set up to handle a four digit year. This was going to change everything. The computer was going to think it was 1900 on January 1st and things were going to shut down in the world was largely going to end—planes were coming out of the sky and it was pandemonium. As it turns out, most of that didn’t come to fruition, thank goodness. But everybody bought computers. And by March of 2000, the computer industry was in deep trouble because no one needed computers. So when you see the bubble burst in a market like that it’s because everybody rushed out to participate in it and then no one needed it for two to three years so the market supply and demand wasn’t there. It hurt a lot of businesses. The same thing is true with anything if there’s a rush on it. Then there’s a period of time where there won’t be one, predictably. You can expect that to work out badly for the manufacturers and distributors of whatever that product is.
Tom: Another thing I want to cover that was in your book is this adventures in retirement idea. What is it you’re going to do? We’ve said that you’re not just going to sit on the couch. You might have a job on the side. But like I mentioned, everybody always says travel, and that’s still just not a big part of your time. Covid aside, people aren’t traveling all year, nonstop. Their life in retirement is still going to look a lot like their current life. But when it comes to these bucket list items, what are your thoughts on that? How do you see this making this list?
Eric: Well, I think a bucket list is a nice, quaint idea, but it is not enough because if you’re 65 and build a bucket list with 10 things on it, you might accomplish them all by the age of 69. You’re going to live to be 100 so you’d better have more than just 10 things to do. I interviewed somebody on my podcast whose mom, at 93, built a list of 100 hundred things she wanted to do before she died, and did them all. Now, she was 93 so you better think that a bucket list with five things on it, what are you going to do when that’s over? It has to be more than a bucket list. Bucket list is cute. It’s fun. It’s things to dream about. But there has to be more because it is 20 or 30 years of your life. There has to be something that provides more meaning, more context, more humanity than just saying, “I’d like to see the seven wonders.” There is making an impact. It could be community related. Could be family related. It could be philanthropy. It could be consulting. It could be the industry that was kind to you over your 50 years of work that you’re now giving back to in some material way to make sure that it thrives. It could be things like sharing your legacies and your stories and your visions and making sure you’ve built some form of bridge to generations you may never meet. What a cool thing. Each of my parents do a legacy video. We talk about it in the book . What is more important than money? I would argue that immortality is not slapping your name on a building on a school campus. Immortality is being remembered and making a difference that’s ongoing. So if it’s philanthropy, it’s a scholarship that’s every year for the rest of time. It’s endowed. Or if it’s family related, it’s doing videos that allow you, in your own voice (in a digital way) to share how you grew up. The kinds of things that are the stories generations forget like, where did I come from? What was my history? Some of it is possibly for earnings. Some of it’s for community or for charity. Some of it’s for posterity. There’s got to be more than just a bucket list. There’s got to be more than saying, “Here are five things I want to do before I die,” because when you check the fifth one off, what do you do, punch out? I guess you could create a bucket list number two, the sequel with five more things on it. That’s better than not having one but it’s just not enough.
Tom: I like your idea of where the bucket list is a little more perpetual. They’re these goals that actually don’t have an end point. It’s what do you want to do with your life. I’ve tried the bucket list thing and despite what I said about not traveling all the time, my bucket list items were pretty much, “Go to this place. Go to that place…” So, I like your view on it much more.
Eric: There’s nothing wrong with picking five places you want to visit. There’s plenty of places I’d like to go and things I’d like to see and experience. For me, I’ve definitely reached that age where stuff doesn’t matter, now it’s about experiences. When you’re a kid it’s all about tearing open a box and having a gift or a toy in it. A great gift for me now is a nice dinner out with friends. And, of course, with Covid, I miss that more than ever. It’s an experience. It’s going to a certain place or experiencing a certain thing like paragliding in California. Very cool. I recommend it. Whatever it is, these moments that define your life are much more than just money. It’s not just about “he who dies with the most toys wins.” I don’t believe in that at all. I think it’s about making a difference. And ideally, making a difference eternally. Leave something behind that’s of value. And I don’t mean stuff. Change somebody’s life. Change somebody’s life every year for the rest of time with an endowed scholarship. Why not?
Tom: This has been a great run through. I think it will give people a better view of retirement. The idea that it isn’t this magic finish line where then you have to think about what you’re doing on a daily basis. Almost everything we’ve covered here has been very ongoing, from the legacy to the savings and having a little side income. All of this is something that shows it’s not this harsh change on retirement day. It’s just the continuation of your life. So thank you for going through all this and giving people a different way to look at retirement. Can you let people know where they can find you online and let them know about your book?
Eric: Sure. The book is called, Don’t Retire… Graduate! The podcast is by the same name. It’s available on Amazon or anywhere where you buy books. You can also go to brotmanmedia.com. That’s where you’ll find the podcast, the books. There’s some free resources there for folks who want to learn more about the financial planning process. There’s e-books you can download. And the company, BFG Financial Advisors, is at bfgfa.com.
Tom: Perfect. Thanks for being on the show.
Eric: Tom, it’s been fun. Thanks.
Thank you, Eric, for dispelling some of the myths around retirement and for showing us why we may want to rethink our bucket lists. You can find the show notes for this episode at maplemoney.com/142. I want to take a moment to thank you for listening to the Maple Money Show. I appreciate your support in helping us continue to grow. If you have the Apple podcast app on your phone, can you pull up Maple Money and give it a quick rating? Even better, leave a review and let everyone know what you think of the show. I look forward to seeing back here next week when I’ll have Aaron Nannini on the show to discuss spending based on your values. See you next week.