Summary

Jamie was a professor at The American College and Director of the New York Life Center for Retirement Income. He is a well-recognized writer, speaker and thought leader in the area of retirement income planning. His most recent book, “Rewirement: Rewiring The Way You Think About Retirement,” details the behavioral finance issues that hold people back from a more financially secure retirement. Jamie’s impact on retirement planning has been well recognized as he has been named as both a top 40 financial services professional under the age of 40 by InvestmentNews and a top 40 young attorney under the age of 40 by The American Bar Association.

In this episode Jamie and I discuss the need to rewire the way we think about retirement and challenge the assumptions underlying retirement planning. He emphasises the importance of adapting spending habits in retirement and the need to minimise regret risk. Jamie also highlights the concept of self-insuring in retirement and the tendency to hold onto money due to fear of unknown future events. He suggests adopting a guardrails approach to spending and focusing on adaptive spending rather than a binary view of success or failure in retirement. They highlight the need for a more realistic approach to retirement income planning that takes into account the trajectory of spending and the magnitude of failure. They also emphasise the importance of financial literacy and education in retirement planning, as well as the potential benefits of equity release strategies.

Takeaways

• Retirement planning requires rewiring the way we think about retirement and challenging assumptions about saving and spending.

• Adapting spending habits in retirement is crucial for a fulfilling and successful retirement.

• Self-insuring in retirement can lead to holding onto money and not being able to spend it, limiting the enjoyment and fulfilment of retirement.

• Adopting a guardrails approach to spending and focusing on adaptive spending can help minimise regret risk and create a more flexible retirement plan. Retirement planning models often overlook the trajectory of spending and the magnitude of failure, leading to unrealistic expectations.

• Financial literacy and education are crucial in retirement planning, as individuals need to make informed decisions based on their knowledge and experiences.

• Equity release strategies, such as downsizing or reverse mortgages, can be valuable tools in retirement income planning and should be considered as part of a comprehensive financial plan.

• Individuals should start their retirement planning by identifying their aspirations and using them as a guide for their financial plan, ensuring that their retirement is fulfilling and aligned with their goals.

Sound Bites

"People need to rewire the way they think about retirement."

"The biggest challenge is that everybody thinks retirement is the same phase in life, and we treat it the same."

"Self-insuring is holding onto money for unknown future events, which limits spending in retirement."

"That's a 50% chance that you're going to underspend crucially."

"Why do we talk about anything as success and failure? Because it's actually only partial failure anyway."

"There is a framework of flexibility in retirement spending."

Chapters

00:00 Introduction and Warm Welcome

06:38 Jamie Hopkins' Journey to Retirement Planning

09:00 Rewiring the Way We Think About Retirement

27:07 The Benefits of a Guardrails Approach to Spending

32:53 The Flaws in Retirement Planning Models

37:40 The Importance of Flexibility in Retirement Spending

42:47 The Role of Financial Literacy and Education in Retirement Planning

53:54 The Benefits of Equity Release Strategies

01:00:14 Starting Retirement Planning with Aspirations

Links

Jamie's Book - Rewirement: Rewiring The Way You Think About Retirement!