This ‘Lazy Way’ of Financial Planning Should Be Banned

Our 2 Cents – Episode #128

This ‘Lazy Way’ of Financial Planning Should Be Banned

Today we’re poking holes in a common financial planning strategy called a Monte Carlo and explaining why we don’t consider it to be a reliable planning technique. Then, we are giving you 5 ways to keep feeling young throughout your retirement years.

  1. This ‘Lazy Way’ of Financial Planning Should Be Banned:
    • What is a Monte Carlo simulation and how are the results generated?
    • What factors could generate vastly different and unreliable results for the exact same client?
    • Why the “safe” withdrawal rate isn’t really safe
  2. 5 Habits to Feel and Stay Young in Retirement:
    • The importance of creating structure to your day
    • Why breaking up the routine is crucial as well
    • Retiring doesn’t mean you should leave your social life behind
    • Healthy eating and exercise are keys to a longer life (and retirement!)
    • Getting involved can help you live a retirement life with purpose

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Podcast Transcript

Announcer: You are listening to Our 2 Cents with the team from SGL Financial Building Wealth for Life. Steve Lewit is the president of SGL Financial and Gabriel Lewit is the CEO. They’re here to discuss all the latest and financial news trends, strategies and more.

Gabriel Lewit: Hey, good morning, everybody. Welcome to Our 2 Cents. It is Gabriel Lewit, I, in the flesh.

Steve Lewit: And Steve Lewit me in the other flesh.

Gabriel Lewit: And you can’t copy me.

Steve Lewit: Well, I can echo you.

Gabriel Lewit: If you want to.

Steve Lewit: There we go.

Gabriel Lewit: Well, we are here to talk to you on a nice warm February day.

Steve Lewit: With the rain and the clouds.

Gabriel Lewit: Well, that was depressing. I said it was nice and warm.

Steve Lewit: And snow coming on Thursday.

Gabriel Lewit: There better not be any more snow. So yeah, we had a nice little smell here. It’s been about 40, 50 degrees. I don’t know about you, but I got a chance to go outside, take my jacket off.

Steve Lewit: Isn’t that a nice feeling to not wear clothes, the heavy coats and stuff?

Gabriel Lewit: I did wear clothes.

Steve Lewit: Well, you know what I mean?

Gabriel Lewit: I was just teasing you. My snowman melted. My kid’s snowman, I should say.

So that was very sad. He officially disappeared. I guess, Punxsutawney Phil, did he see a shadow, Katie? He did, which means because I totally forget what that means.

Steve Lewit: What does that mean, Kate?

Producer Katie: Six more weeks of winter.

Gabriel Lewit: Well, I think he was wrong. So maybe he saw a cloud.

Steve Lewit: So, what it means is six more weeks of winter.

Gabriel Lewit: I think that’s what it means. That’s what Katie said, so I’m taking your word for that producer, Katie. Well anyways, folks, we hope you’re doing well. We hope you’re enjoying some of this spring-like weather, even though it’s not spring yet. But meanwhile, we’re going to jump into our show here for you today. We’ve got a couple of topics here lined up, and I’m going to start with one that I like to pick on. And so, the topic here is about basically why a Monty Carlo should be banned. Okay?

Steve Lewit: That’s true.

Gabriel Lewit: Monte Carlo, and that’s not the vacation destination.

Steve Lewit: That’s a pretty heady topic, man.

Gabriel Lewit: Yes, it’s a very… Well producer Katie actually was looking up a headline generator.

We could have titled this segment, what about Monte Carlo should you know about? Which is nearly as exciting as why Monte Carlo should be banned.

Steve Lewit:  Or should you live there?

Gabriel Lewit: Or should you live in Monte Carlo, which I hear is actually very, very nice, but extremely expensive.

Steve Lewit: Extremely expensive. Yes.

Gabriel Lewit: Yeah. No, so we’re not talking about the vacation destination. We are talking about the financial tool known as a Monte Carlo. And I actually, I think I looked up why it was called Monte Carlo a long time ago, and I can’t remember. But anyways, the gist of a Monte Carlo is you map out your expenses, your budget, your income needs that you’re projecting. You plug in your investment portfolio and what your holdings are into a software. You put in some assumptions about asset class returns, and then the Monte Carlo simulation will run 1000 versions or sometimes more, 10,000 versions, big numbers because it sounds better, I guess, of various market returns that you could achieve with that given portfolio and those given inputs. And it will tell you whether or not you have a certain percentage chance of success.

Steve Lewit: Which is probability.

Gabriel Lewit: Probability-based chance of success.

Steve Lewit: Which is why they call it Monte Carlo, because that’s like gambling.

Gabriel Lewit: Oh yeah, that’s right. That’s right.

Steve Lewit: What is my chance of getting black on the next turn of the wheel?

Gabriel Lewit: So, what do I mean by probability? Well, if all 1000 simulations showing you having at least $1 left over based on whatever time horizon you plug in there, say age 90, then you have a 100% chance of success according to the Monte Carlo.

Steve Lewit: Yes. To give a little bit of credit, some do more than that, but absolutely right. If a Monte Carlo says you have a hundred percent chance of success in your retirement, then for many $1 is sufficient.

Gabriel Lewit: Yes. So, there’s a lot to unpack with these. And people ask me, do you like Monte Carlos or do you run Monte Carlos sometimes when they’re talking to me about what we do and getting to know us a bit better, and I say, no, I don’t like Monte Carlos. And somebody looks at me and say, oh, how come? And I’m happy to share more about why here on the show in much more detail than I usually tell in just a quick meeting. But there’s a lot of issues with Monte Carlos, but really here’s the lead in to why. It’s something called the safe withdrawal rate that’s often promoted out there in the financial industry.

Steve Lewit: Well, I’d like to go back just one second, Gabriel. So, the reason we’re doing this is because Monte Carlos give, we believe Monte Carlos give folks like you and an, well, how shall I say, an unrealistic confidence in your future that we believe is not as realistic as the Monte Carlo says.

Gabriel Lewit: So yes, yes, yes.

Steve Lewit: It’s misleading.

Gabriel Lewit: The Monte Carlo simulation is a way to assess, do you have to worry about your income in retirement when using a systematic withdrawal-based approach? So, there’s a couple components here we’re going to talk about. And so first, what is a systematic withdrawal approach? Well, it’s when you have a certain amount of money, let’s say a million dollars for easy math, and you take a certain percentage of that each year, systematically each year, and you withdraw it for income, systematic withdrawal, also commonly known as what’s known as the 4% rule.

Steve Lewit: Or the safe money withdrawal rate.

Gabriel Lewit: And so, what was it? This was all based on some research done many, many years ago. We won’t get into names because many of you probably won’t recognize them anyways. But the idea was that if you take out a certain percentage, for example, when it first was created 4%, and then you adjusted that amount for inflation each year, you could run all the Monte Carlos and et cetera, and there’d be a very high probability that you would not run out of money if you stuck to a 4% withdrawal rate. Okay. So then it became synonymous with “safe” which we’re going to unpack that word here in just a moment as well.

Steve Lewit: Which is very compelling on the surface. It says, hey, I can just keep my money in the stock market, simple, pull out what I need. Let’s say pull out three and a half, 4%, whatever I need, and I’m going to be fine because my Monte Carlo says I have 100% or 98% chance of success.

Gabriel Lewit: Yep, exactly. So, this all sounds great, right?

Steve Lewit: Sounds great. I love it.

Gabriel Lewit: Well, we’re going to be some professional hole pokers here today. We’re going to poke some holes into this. Reminds me of my son. He likes to eat cucumbers at snack time when we’re going to bedtime. He eats cucumbers while we read a book. And the other night he was instead of eating it, he was just poking holes in the cucumber. And showing me, “Dad, look at this.” I was like, “So cool. So cool, bud.” So, we’re going to poke some holes in this here.

Steve Lewit: Into this cucumber.

Gabriel Lewit: Yeah. So, what are some of the holes we can poke here? Well, I’m going to give you some. Number one, the Monte Carlo is going to use inputs that you give it. Okay, so for example, if you tell it that you’re invested in a large cap fund, the software that runs Monte Carlo is going to ask you what range of returns or standard deviations do you anticipate this large cap asset class having?

Steve Lewit: Yes.

Gabriel Lewit: So, a study was done by a very famous researcher, Wade Pfau, that basically said if you put in different rates of returns into the software, you’re going to start getting vastly different results.

Steve Lewit: Exactly.

Gabriel Lewit: For everything else being identical, right? Your inputs, your expenses, your income needs, your portfolio size, Monte Carlo simulations, all that was the same, but people plug in, advisors plug in, people plug in different expected rates of return for different asset classes and will give them vastly different ranges of results.

Steve Lewit: Yes. And that’s called what you put in is what you get out or in economics terms, garbage in, garbage out.

Gabriel Lewit: Yeah. Well, so how can there be such a big range, right? Don’t you think it would be uniform?

Steve Lewit: Well, if you go back in history and look at different asset classes, you can get an average, but over time you could have periods where one asset class outperforms another, and then it turns around and the average really doesn’t mean anything.

Gabriel Lewit: Well, so yeah, market history goes back beyond 30 years. Let’s say you’re doing a Monte Carlo from age 65 to 90, which is 25 years for a large cap asset class. What do you tell the software to model? Do you model recent returns? Do you model old returns? Do you model, right? How many simulations do you model? So you start to get some biases based on what you as the advisor or what you as the client put into that. And the study showed that lots of advisors plug in different rates of return, meaning some advisors will plug in aggressive ranges saying, hey, what if these do closer to historical averages? Other advisors will plug in more conservative ranges all the way in between. And so what we’re starting to say is there’s a lot of variation that you can encounter when running Monte Carlos, and that’s just one of the reasons why you have to be a little bit cautious with what they come out and say.

Steve Lewit: Yeah, but what’s compelling, Gabriel, is that when an advisor looks at you and says, I’m putting this rate of return in, but we cover every different market situation since 1936, let’s say. And so, we really got to covered for you. But you’re still inputting the data based on your feelings or predictions at that time.

Gabriel Lewit: Yeah. So that’s one issue. The second issue is also what end date do you put in?

Steve Lewit: You mean…

Gabriel Lewit: So, if I have 100% chance…

Steve Lewit: You mean when do I pass away?

Gabriel Lewit: Yeah. If I have 100% chance of success when I put in age 85 for my life expectancy, but then all of a sudden I have a 85% chance of success if I put 90 or 92 for my life expectancy, do I have a safe withdrawal plan?

Steve Lewit: Well, we don’t know.

Gabriel Lewit: Well, I would argue no, because what’s the definition of the word safe?

Steve Lewit: Safe, safe.

Gabriel Lewit: Katie, can you go to

Steve Lewit: I can. Well, in my world…

Gabriel Lewit: Hold on a second.

Steve Lewit: Safe means it’s predictable.

Gabriel Lewit: Well, let’s see what the dictionary says. The dictionary knows all. Secure from liability to harm, injury, danger, or risk. Free from hurt, injury, danger or risk, involving little or no risk of mishap or error. So, the other hole I’d like to poke is just the name itself, the safe withdrawal rate. What does that imply?

Steve Lewit: Well, if you look at a Monte Carlo chart, you have lines that are all the way up on the top and lines that are pretty close to the bottom. So, you don’t know where you’re going to wind up. So, when you don’t know where you’re going to wind up, that is not safe.

Gabriel Lewit: Well, the question I’d asked you before is if you have 100% chance of not running out according to Monte Carlo by age 85, but then at age 92 it says you have a 85% chance of not running out, that’s a 15% chance that you will run out, which would belie the word safe.

Steve Lewit: Yes. But what happens, Gabriel, when the report says you have 100% chance of success at 85, 90, 95 and 100? So that’s what people see because advisors kind of make that happen. So, I’m sitting with an advisor and of course…

Gabriel Lewit: You mean a client?

Steve Lewit: No, let’s say I’m a client sitting with an advisor who does Monte Carlos.

Gabriel Lewit: Got it. So, you’re not you. You’re you, the client you.

Steve Lewit: And folks, you have to understand that the industry, the money management industry is heavily invested in Monte Carlo. They love this tool because it’s an easy tool. They can run your numbers and say, “Hey look, invest with me and you have a 90, 100, 110% chance of success.” And then they show you books and numbers and charts and you say, “Great, I’m in.” But Gabriel, so someone says, I have 100% chance of success. Isn’t that compelling?

Gabriel Lewit: Well, your favorite quote I think you say, have you asked them to put that in writing?

Steve Lewit: Exactly. You’re reading my mind.

Gabriel Lewit: I know you like to ask them to say that.

Steve Lewit: You are reading my mind. Just say, well if I have 100% chance of success, then you have no problem guaranteeing me that in writing, right? And the answer will be no, we can’t do that.

Gabriel Lewit: Yeah, so that’s another hole to poke in there. And we’re going to poke. I’ll recap the holes here we’re poking. So far, we’ve got just the name of the strategy itself, a safe withdrawal rate, which is used in the Monte Carlo. We’ve got the life expectancy that you choose to use in the Monte Carlo. You’ve got the inputs of the ranges of returns that you use in the Monte Carlo. You’ve got your question, which relate to the name safe, but if it’s safe, are they willing to write, sign off that it’s safe? No, right? Meaning there’s some reason for that.

And then the next one is, what portfolio model are you using in your Monte Carlo assumption? Not the ranges of returns. Are you using 100% equities? Are you using 50% bonds, 50% equities? Are you using a 70/30? Are you using a 30/70? So, what’s interesting is if you ask 100 people what’s the safe withdrawal rate that knew the answer, say it was “4%.” And then you ask them what portfolio model would you use with a 4% safe withdrawal rate strategy? You would get 100 different answers.

Steve Lewit: That’s exactly right. That’s exactly right.

Gabriel Lewit: And so, it’s so hard for people out there. As you start to dig into this really in detail, you say, wow, well then what is the safe withdrawal rate? What kind of portfolio should I use for say for how many years?

Steve Lewit: And that rate changes. Look to three years ago, the safe money withdrawal rate was what, 3.2 or 3.5%. At one point there was an article I read; it was 2.2%.

Gabriel Lewit: Well, now it’s starting to be compounded in confusion because everybody and their mother and brother researchers are coming out with their own interpretations of what was the safe withdrawal rate. So, there’s more confusion than ever on this. So, as you run your Monte Carlo, what rate of return should you plug in to model? Right?

Steve Lewit: It’s very compelling. I mean it’s very confusing. And in that confusion though, the bottom line is what people hear, Gabriel. I keep coming back to this is, oh, I’m 100, I’m good. I’m going to be fine. That’s what people hear, and they forget all the other stuff.

Gabriel Lewit: Yeah. Well, so why do I dislike Monte Carlos? Because in short, just to summarize here, they give you a false sense of security just on the name itself with the safe withdrawal rate. They’re very confusing as to what you should be invested in. And most people have no set consensus. Whether or not they work vastly depends on the input of the advisor running the Monte Carlo. Any advisor could change the parameters of that Monte Carlo to make it look more successful than it could be otherwise. And then last but not least is, I mean it’s the lazy way of financial planning.

Steve Lewit: You bet.

Gabriel Lewit: I think it came about because there are so many advisors at big institutions and what they really want to do is just be investment portfolio managers.

Steve Lewit: Yes, money managers.

Gabriel Lewit: They don’t want to be income planners. So, what do they do? They just ran a Monte Carlo and say, “Hey, you’ve got a 90% chance of not running out of money. If you just take your income, you should be pretty good. Don’t worry about it. The chances are really low, you won’t run out of money. It’s lazy.

Steve Lewit: It’s the old thing, Gabriel. If you have a hammer, everything’s a nail. So, if you are a money manager and all you see is the stock market because you’re ignoring the whole bank side and insurance side of the products offered in the marketplace, which are guaranteed and insured and written out to guarantee which are safe. If you ignore all of that and all you have is the stock market, you’ve got to figure out a way, how do I make this compelling to my client? How do I make my client believe that they’re okay in the market?

Gabriel Lewit: Yeah. So, I mentioned earlier there was a study done by Wade Pfau that was doing some research on the range of inputs, capital market assumptions is what they’re called. The returns for various asset classes used in Monte Carlo. And he interviewed 40 firms, large investment firms. And for example, depending on the firm bond returns were put in either between two and a half percent to 5.82%. And stock returns ranging from 5% to 10.63%. And basically, depending on which firm you go to, you could see a Monte Carlo that shows you either they ran the numbers, either a 95% likelihood of success or a 62% likelihood of success. Right?

Steve Lewit: That’s a huge difference.

Gabriel Lewit: Oh my gosh. Yeah. So, this is very confusing. What do people do? Well, it all goes back to income planning. And yes, we picked on Monte Carlos here today, we poked some holes in them. So, what are the alternatives? You and I, we’re not going to get into it here today. We’ll probably do more of this on a future show we’ve talked about in the past. But you and I like bucket planning.

Steve Lewit: Well, big picture, Gabriel. I think there’s a bigger picture that I’d like to bring up. Big picture if I am retiring or I’m 45 thinking of retiring or not even, just not retiring, I want to know not my chance of success. I want to know what my worst-case scenario is. What’s that worst thing that could happen to me? And if that happened, does my plan still work? Yes. And that’s what we do that is different I think from most other people. They’re always talking about success. And we’re not negative Nellies. But when I look at a client, I’m looking at them like, you look at them and we say, what’s the worst thing that can happen?

Gabriel Lewit: Yeah. Well, yeah. I think one time I had a potential client come to me and he said, “Yeah, this other place I was interviewing, they ran me a Monte Carlo. They showed me having $20 million at the end of age 90. And you’re showing me having 10. Gabe doesn’t their plan seem a little bit better?” Are you laughing over there? He almost spit out his coffee. I don’t know if that’s something I said, or it just went down the wrong windpipe.

Steve Lewit: The wrong windpipe.

Gabriel Lewit: Well, so…

Steve Lewit: Take over for me.

Gabriel Lewit: I will, I will. So, it was interesting because we do, as you said dad, we run our projections very conservatively.

Steve Lewit: I’m alive.

Gabriel Lewit: Good. We run our…

Steve Lewit: No Heimlich maneuver.

Gabriel Lewit: Producer Katie was ready to go for that one.

Steve Lewit: She was up and at ‘em.

Gabriel Lewit: I had to keep the show going, right. No, I’m just kidding.

Steve Lewit: What we do, look, when was the worst 10 years?

Gabriel Lewit: You need me to keep going?

Steve Lewit: Okay. No, no. I think I got it. From 2000, listen, from 2000 to 2013, the S&P made no money. That is the worst. You go into retirement, and you face those 13 years…

Gabriel Lewit: A 13-year down and up and down and up flat market.

Steve Lewit: Making no money and pulling money out of the market. That is a worst-case scenario. And that’s what we do.

Gabriel Lewit: So, we stress test them, yeah.

Steve Lewit: So, stress test is different than Monte Carlo. Explain that.

Gabriel Lewit: Well, just really quick, a stress test is plugging in things that can go wrong into your portfolio. And a Monte Carlo, obviously some of those sequences that they run of different various market returns is going to have some bad years in there. We prefer to just jump all the moderately bad years and go to the worst 10-, 13-year stretch you could model.

Steve Lewit: Yeah, because we know if that works, we have success.

Gabriel Lewit: Yeah, exactly.

Steve Lewit: And the likelihood of a worst-case scenario is very slim. It could happen. You could have another 13 years. Look, if you’re retiring today and the market is down, how do we know that cycle is not about to repeat itself? And a Monte Carlo won’t tell you your worst-case scenario. It’ll tell you your chance of success. I want to know the worst thing that can happen.

Gabriel Lewit: And I think we might have picked on this, but just to poke at it one more time, is I don’t define success for most of my clients as having $1 left over.

Steve Lewit: Exactly right.

Gabriel Lewit: Right. So, if you plug into Monte Carlo a minimum floor to consider being successful as $500,000 or a million dollars, that probability percentage comes way down.

Steve Lewit: That’s right.

Gabriel Lewit: Okay. That percentage withdrawal that’s safe comes way down. And so think about all this if you ever do run Monte Carlos or you hear about Monte Carlos, this is the world of Monte Carlos and what exists in them and some of the things that you should be aware of. And I don’t want to run out of time here today on some of the other things we want to talk about. So I’m going to make a note here that our next episode here, we’re going to talk about ideas for income planning because it might have been a bit since we have, instead of the Monte Carlo. We’re just going to pick right back up on this topic and talk more about it next time.

Steve Lewit: Great, great.

Gabriel Lewit: So, stay tuned for that guys. Part two coming back next show.

Steve Lewit: I’m so glad you brought this subject here today, Gabriel, because it’s been on my mind for years. I’ve always wanted to write an article about it because I’m so against it and how misleading it is.

Gabriel Lewit: And it’s so prevalent out there. Everybody is Monte Carlo here, Monte Carlo that okay. Again, there’s some small value in them. I’m not going to completely say that they’re worthless, but they’re just not my favorite thing.

Steve Lewit: No, no, not mine. Obviously.

Gabriel Lewit: All right, so what are we going to talk about next?

Steve Lewit: Yeah, what are we going to talk about next?

Gabriel Lewit: We are going to have some discussions here about habits that you can use to feel and stay young in retirement.

Steve Lewit: All right. I’m all in, but I’m not retired. Wait a second. But can I be young working?

Gabriel Lewit: Sure.

Steve Lewit: Okay.

Gabriel Lewit: Yeah, of course. So, what’s the goal here? Well, you retire, and you can inadvertently start to lose meaning and lose purpose, and feel like you’re just sitting around getting older.

Steve Lewit: Or just doing stuff to do stuff.

Gabriel Lewit: Just doing stuff to get by and pass the time. Or on the other hand, you can be very purposeful, very driven with what you do and how you spend your time to give yourself a better quality of life, better meaning, better social connections, and feel just a whole heck of a lot better about spending your retirement days.

Steve Lewit: Yeah. I think everybody wants to feel like they have meaning in life. And what happens as we get older is I think the world, we kind of feel marginalized. I think older folks get marginalized in this modern world that we live in. And some cultures don’t do that, but certainly in the US the older person is, how do I say it? Disrespected in a way. So, it becomes a matter of how do I find within myself? Because once you retire, you’re on your own. How do I find some meaning and purpose otherwise, like you said, you spend the day just passing the time.

Gabriel Lewit: So, this article here is from a gal that is a blogger, an older lady gal, which we’ll talk about that from Travel Awaits. And her topic here is Five habits my husband and I practice in retirement to keep us young.

Steve Lewit: Nice. Nice.

Gabriel Lewit: And so, I’m going to quote some of the things from here. And so, what does she and her husband do? She says they get comments all the time about how young they look, and she says she believes it’s because of what they do to stay young in retirement. And I thought there was some great items on this list. So, I wanted to share them with you out there. And of course, if you’d like a copy of the article, let us know. So, number one on her list is making every day an eight-hour day. So, she said, well, first and foremost, she said when they retired, he sold his business. She retired from teaching at a university, and they went on a eight-year travel spree around North America in an RV.

Steve Lewit: I’d love to do that.

Gabriel Lewit: That’s quite the eight-year travel.

Steve Lewit: I don’t know if I do it for eight years but yeah.

Gabriel Lewit: Well, that’ll postpone settling down as she says here.

Steve Lewit: Oh, yes. Yes.

Gabriel Lewit: So that was their initial stab at that, right? Is what to do. Well, we’re going to go RV around the country and check everything out. And if you have this glass half full mentality about all the wonder that is the United States of America, which is kind of how I feel, there’s just so much that you can see and experience.

Steve Lewit: Well, the earth is a beautiful place.

Gabriel Lewit: You can really get out there, and just check it all out. Okay. So anyways, once they got back from that…

Steve Lewit: Are you selling, is this an advertisement for RVs?

Gabriel Lewit: I am not selling RVs, no.

Steve Lewit: Okay, just checking.

Gabriel Lewit: So, she said once they got back from that though, it was really changing up their routine. Then they were sitting around saying, what do we do today? Right?

Steve Lewit: Yeah. Where do you want to go for coffee?

Gabriel Lewit: Yeah, so…

Steve Lewit: Where should we eat dinner?

Gabriel Lewit: So basically, she says she structures her day like this, two hours of social media in writing. Hence, of course, this travel blog that she is writing that I’m reading from, an hour at the fitness center, including hot tub and sauna, an hour of cooking, two hours at various clubs such as a computer, photography club, karaoke club, writing, editing club, and dancing and poker clubs, an hour at the library and an hour painting. And she said her husband continued to have more sports centric days, but he would join her at the gym and the library. And then after dinner, they would wind down by watching a mutually agreed upon movie plus a late-night TV show or reading books or magazines.

Steve Lewit: How cool is that? That is really cool.

Gabriel Lewit: So, there’s a whole smorgasbord of things that are buried in that little sentence that we just read off to you here.

Steve Lewit: Well, I love the idea of having a schedule even in retirement.

Gabriel Lewit: Yeah, it gives yourself some structure. Hey, I think last time your phone rang too. I’m going to start having to teach. This is the movie theater’s like, make sure everybody turns off their phone.

Steve Lewit: Katie, make sure I turn off my phone. So, I’ve had a coughing fit and a phone fit.

Gabriel Lewit: My goodness over here. What’s next, the bathroom break?

Steve Lewit: Full fit, I’ll be back in a few minutes.

Gabriel Lewit: We’ll be over. But yeah, so structure is one of the things that can be recommended to help give you a nice flow throughout your retirement because you have structure in your working years, and people thrive on structure.

Steve Lewit: It’s very hard to live an unstructured life. You got to be like a feather. The wind blows you here or the wind blows you there. It’s very hard to do.

Gabriel Lewit: That. Yep. Okay, number two on the list here was creating special days. So, they said they find ways of breaking up that routine because on the flip side, structure after too long of it can just feel like routine. Okay.

Steve Lewit: You get tired of it.

Gabriel Lewit: They created some special days. So, they say they sometimes on weekdays because there’s less crowds, they’ll go to theaters, concerts, shows, restaurants, or local short travel destinations.

Steve Lewit: They give themselves permission to do something other than the structure.

Gabriel Lewit: And she says when she gives her husband a break from her “excellent cooking” they will carefully research and pick various places for special occasions, nicer dinners out on birthdays, Easter, Mother’s Day, anniversaries, Christmas, Thanksgiving, New Year, et cetera. Plus, occasional travels to see children, grandchildren, road trips, things of that nature, and they also winter in Mexico for three months.

Steve Lewit: This is quite a nice life.

Gabriel Lewit: It doesn’t say how much money they have by the way.

Steve Lewit: Just let me…

Gabriel Lewit: So, let’s say money aside here for a second. Yeah, so some neat ideas in there.

Steve Lewit: Are you trying to entice me into retirement, Gabriel? Do you have an ultimate agenda here?

Gabriel Lewit: Not at all. Not at all.

Steve Lewit: Okay. Because I’m not going anywhere.

Gabriel Lewit: Number three here, living with lots of fun and laughter. It is no surprise being social, having friends, having connection, huge part of being human. It’s proven in lots of research studies to help extend longevity and health. So, she says, of course, we talked about the clubs, but they host dinners and get-togethers and parties for friends. Yeah, friends, family members, and neighbors. So, they also go to some dinner clubs.

Steve Lewit: What would be a dinner club? I’ve never been to a dinner club.

Gabriel Lewit: Like groups that meet up with random people, I think, go out to dinner, really get to know each other.

Steve Lewit: Oh, I have to look that up.

Gabriel Lewit: Then you’ve got, let’s see. Oh, they play with their grandkids. So that’s fun. I think it’s fun. So, taking care of their health. They said exercise, as I mentioned earlier, very important. So, they focus on eating healthy and exercising. And then last but not least, they try to avoid having the same exact food every single day because that can create some boredom. So mixing things up even on the food side. And then last but not least, living with a purpose. If all of that wasn’t enough, they also do some volunteer work. So, they said that she volunteered at the Service Corps of Retired Executives. Her husband volunteered as a court appointed special advocate, and they founded the UP Alumni Association of their University of the Philippines, something like that. But bottom line, they had a lot of things that they did to get involved in local things that they were passionate about.

Steve Lewit: Can I tell you something? I’m exhausted.

Gabriel Lewit: Well, it did say that she structured that eight-hour day.

Steve Lewit: Wow. I’m kind of tired after all of that.

Gabriel Lewit: That’s a long list.

Steve Lewit: You know what I love about that? That they’re still growing and learning and doing, and it’s like retirement is not retirement.

Gabriel Lewit: Well, this reminds me. I had a conversation with a client, younger client, they were 40, and we were talking about their anticipated retirement. And we’re going to have to wrap here in a minute. And they were saying, “Gosh, what would we do if we were retired?” And then you listen to a list like this and it’s like, gosh, they don’t have enough time.

Steve Lewit: Exactly. I mean, that is a really full schedule.

Gabriel Lewit: So, I think there’s…

Steve Lewit: And the nice part about it also, Gabriel, it’s so broad. They’re working out, they’re playing, they’re eating, they’re socializing, learning.

Gabriel Lewit: Traveling, family.

Steve Lewit: Family.

Gabriel Lewit: Volunteering.

Steve Lewit: It’s just a wonderful list.

Gabriel Lewit: Yeah. Well, I thought it was a good article when I read it. Funny producer Katie said, I think this is an okay article. I was like, it’s a great article.

Steve Lewit: It’s a great article, Katie. You know what we should do? We should give that out. We should make this kind of an article part of a package.

Gabriel Lewit: Yeah. No, that’s a neat idea. So, what’s the moral of this story, folks? If you’re trying to figure out what to do in retirement, honestly, it might just be you’re so busy working, you just haven’t even had time to think about what you would do if you had all this free time.

Steve Lewit: Or it scares you to retire because you think you have nothing to do.

Gabriel Lewit: Yeah. So, it’s more of a imagination challenge.

Steve Lewit: Gabriel, I think we promised folks to get to the questions, but we didn’t get there again.

Gabriel Lewit: Think we ran out of time.

Steve Lewit: We ran out of gas.

Gabriel Lewit: Well, we just had the two main– we were going to do the two main topics and then get to our listener questions. And then, oh, we’re going to have to do them first next time. We’ll do those first, next time and followed by our Monte Carlo part two.

Steve Lewit: Part two.

Gabriel Lewit: Okay. Also got some great feedback from y’all on the Medicare podcast topic last time.

Steve Lewit: Yeah, that was good.

Gabriel Lewit: Appreciate your thoughts and notes. Please, if you like anything that we do, it’s always great to hear from you. If there’s anything else you want us to talk about, please let us know. Meanwhile, if you have questions, you can always call us here at (847) 499-3330 or go to Click get started. Contact us or email us of course at

Steve Lewit: Cool.

Gabriel Lewit: Thanks for joining us today. We hope you have a wonderful, wonderful rest of your day and week.

Steve Lewit: Stay well everybody.

Gabriel Lewit: Bye now.

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