Why Retirement Calculators Suck (and How to Make Them Your Superpower)

Has been late for a show or two. So sometimes you just gotta wait for the good stuff. But let's get going. Live from the YouTube machine, it's the Stacking Benjamin show. I'm Joe's mom's neighbor, Doug. And tonight we welcome you to mom's basement where we're going to share how to become a ninja with an El Camino. See, first we'll dive into the merits of a dual barrel carb and then the value of a crushed velvet interior. So what. What's that now? Oh, we're not. We're not covering the El Camino. Okay. We'll just move on to the retirement calculator. I guess we'll just teach you how to become a ninja with retirement calculators. What are some of the mistakes people make? What are some of the clever moves you should use calculators for? We'll cover all that and more with our special guest, the man behind the company that builds robust calculators from Bolden, it's Steve Chen. And if you are with us live and you'd like to win a subscription to the Bolden calculator and a copy of Joe's book stacked your super serious guide to monitor money management. Stick around because halfway through today's event, you'll have a chance to win that fabulous prize package behind door number three by submitting an answer to my incredible trivia. And now to two guys who have calculated the odds that this video goes viral. It's Joe and. Oh, jj. Any second now.

I just had to make sure that we're finally live.

Caught behind the curtains back.

I had to make sure we're finally live. I can't believe we're finally live. You guys have no idea. This thing works a thousand percent of the time, except when we need it to work. We got a. We got it looks like 185 people waiting for us on a different channel while we are over here. Hey, everybody. Welcome to the Stacky Benjamin's live event. I am Joe Sal Sehi and right next door to me is the OG who's just checking his sound, making sure he's got the sound all set up.

I think. I think Doug's got something planned playing in the background.

Oh, there is. There is a.

Somebody's got something playing in a different background.

I don't know, somebody's playing it somewhere. This has been fun. This has been. Who is. Who's. Who's playing the.

Yeah, I don't know.

It's dead silent. My corner and I don't hear anything. Instead, silent in my corner of the basement.

Oh, okay.

I can use it. You guys have no idea how fun this has been. So welcome to a live event. If you didn't know it was a live event, you know it's a live event now, right? The guy across the cart table from me is the og. How are you, brother?

Yeah, yeah, great. Fantastic.

What do you.

Stretch it out. Stretch out the open.

We are going to, we're going to be talking about retirement calculators and making them your superpower tonight. It's going to be super fun. Oh, gee. This, this is an important topic because when it comes to retirement, I think the main reason people make mistakes, especially in the little bit bumpy market that we had the first half of this year, you start second guessing your strategy. And when you've got those milestones, you've got the plan and you work the timeline, I think you're going to make far fewer mistakes.

Yeah, I mean, ultimately, when it comes to retirement planning calculations, the, the way that you look at it is over a 25 or 30 year time horizon. So if you make your decisions over 25 or 30 year time horizons, it's a lot easier. But when you start piecing that into or changing that into really short time, short time periods, it's gonna be a lot harder to make good decisions. Especially if you don't have like a plan that shows that this stuff has been built in. I sent a note to all of our newsletter people and clients at the beginning of April and I said, this is part of the plan. Like this is in it. Like what's happening is already there, so we don't have to do anything different.

And as we've talked on the show before about the investments, the importance of an investment policy statement, what to work from, really, the plan guides your investment policy from the beginning. So how much do you need? How much do you need? It really is a simple equation. Oh, gee, how much money do you need to save? What return do you need to get on that money?

Right.

Equals the goal. And then that gives you three levers that you can play with. Number one is, maybe I need to save more, maybe I can save less. Second thing that you can do is you can take more risk with your investments. Of course that's going to change the bumpiness of the ride or you might be taking too much risk and you could back down your risk. The third thing is if you find out that you're comfortable with the risk level that you have and you find out that you're over saving you could push the goal up. You could retire earlier or spend more money in retirement, but it really simply is getting those three levers in line that I think is really the most fun about using a calculator.

Yeah, I mean, it ultimately just gives you. Gives you the freedom to make the decisions that are most. I, I wouldn't necessarily agree with the. You can be riskier. There's. There's a limit to that in terms of human behavior and whatnot. But, but, but I definitely do think it gives you some insight into, I think mostly the. How impactful small changes can be. Like if you add the extra hundred dollars a month and you decide to retire two years later, like, how that stacks in terms of compounding over a long period of time is pretty profound.

Yeah, I think that the. Well, we'll get into the. We'll get into the calculator right now with our friend Steve. So let's talk about this. If you want to check out the bolding calculator, this is my favorite calculator. It's the closest thing from to what I used when I was a professional. I don't see many calculators that are this. This level, give you this amount of flexibility like I had. Our goal tonight, though, is not to sell you the Bolden calculator. That is not our goal. Our goal is no matter what calculator you use to make sure that you use it well and you know where the sticking points are. That trip up a bunch of people. So I want to be clear about that. However, I like the calculator enough that we decided to partner with Steve. If you want to check it out. Let me put this on the screen. If I can figure out one piece of. Let's see if this works right. Look at that, Doug. Wow. I got something to work right. Stacky benjamin.com calculator is the place to go and check out the bold calculator that helps the show and you can see just how robust it is. Our guest tonight builds calculators. He's the guy behind Bolden, and he and his team are always updating, always working it to make sure that it's every bit the robust calculator that we think that. That you need. So let's see if I can work another knob and get Steve Chen here with us. Sid, can I do it? Holy cow.

Steve Graham.

Once we figured out how to get this YouTube machine working like life was, life was pretty good. How are you, man?

I'm good. Good to be here. Thanks for having me on. Absolutely.

Super, super Happy to have you. Glad that you could make time for us and for all the stackers. And so, guys, here's what's going to happen. We're going to. We're going to talk to Steve for about 20 minutes and really dive into some of the mistakes people make. We're going to talk about some of the best practices people have. But the second half of this is going to be your questions. And at the halfway point, we're going to give away three, not one, not two, but three bolden subscriptions and three copies of this amazing book. I know it's Doug's favorite book. Doug, would you like me to show the book?

I like the pictures.

Lots of pictures. My book stacked. We'll give away three of these and three calculators. So stay tuned for Doug's amazing trivia at the halfway point. But, but, but, Steve, let's start. Let's start here. What are some of the biggest mistakes? Well, let me ask you this, because on the, on the promotion for this, we're like, why most calculators suck. And I guess my question is, do the calculator suck or do we suck because we don't know how to use them very well?

Good question. I think mostly it's humans suck. Humans have a hard time managing their own behavior. We keep hurting ourselves over and over. I mean, the one thing you can count on is that human behavior doesn't change very much. And that's why every time the stock market goes like this, like we just saw, everyone's like, this time it's different. You know, it's never going to, you know, like, we're all ruined. It's never going to come back. And then, like, literally one month after a liberation day, like, if you went to sleep for 30 days, you wouldn't have known. The market went down 20 to 30%. The rates went all over the place. You kind of like, you come back and it's the same as it was, which is kind of crazy.

Yeah, we blow ourselves up. We blow up our plan 100%.

Well, it's kind of like one, one thing that was a bummer is that, you know, during that time, I saw people, you know, on social media and in the news talking about, I'm selling it all. I can't take this risk. People are, like, cashing out their 401ks was getting written about. And those are moves that one cost you because if you're before your retirement age, there's penalties and stuff like that. And most people, when they sell out during a downturn then they're not sure about when to get back in, and then they sit out the market. And I mean, there's the adage about if you miss the top 10 days of the stock market over some period of time, you're going to miss whatever 80% of the upside. And unfortunately, that's real. And people have to kind of avoid that. Those risks.

Absolutely. I think when you have the plan in writing in front of you, and frankly, I think Steve also just going through the process of creating the plan, just that thoughtful time, no matter what you come out with, really, I think that's really time well spent.

100%. You know, I think Eisenhower said plans are useless, but planning is indispensable. I think that's exactly right. Like getting in there, taking the time to kind of one. You know, with us, we think about planning as a lifetime exercise. Right. So you're, you know, you're getting educated as you do it. Right. You're kind of seeing where you stand, seeing what's possible, and then understanding those levers that you have. So the process of doing this has value. And it just makes you think. Yeah. About where you are today, where you want to get to. And, you know, as you, you know what's also very with us? Community driven. So we're learning with other people. What are they thinking about? We're seeing. One thing we're seeing that's really cool is these little micro communities getting formed up where people kind of get together with folks that they may not even know, but they're like, they're connecting and doing these zoom meetups and talking about, that's cool. You know, what could happen in the future.

That's cool. The combination of a calculator and a community of people helping each other is. Is pretty awesome. All right, what are the. What are the biggest mistakes you see people make over and over and over when they oops on their calculator and they come up with some solution that might be a mirage.

Yeah. Well, I think, you know, back to the behavior thing, I think the most. The biggest thing we see people do is doing nothing. Right. Like, that's our biggest competitor for us, like, you know, or anyone selling anything, it's like inertia. People just don't do anything. So there's that. But hopefully, you know, people do get started, I think, you know, not taking enough risk. Right. So people do need to take risk. Like, you do need to learn to save. Right. Which. Which involves learning to manage your expenses and understanding that. And then once you're saving you have to invest. Like, I. I made this mistake my own life. I like, as an entrepreneur, I'm like, okay, great. You know, I work hard, I save money. And I would. I was piling up cash, but I wasn't investing it or enough of it and aggressively enough. And that costs you money because inflation lowers the buying power of your dollars over time. So you need to invest to stay ahead of inflation. And it's like compounding is like the eighth one of the world. It really makes a huge difference. The thing is, you have a hard time seeing that until you're kind of like 10 years into it.

Well, and this is. Oh, gee. What I really like about using a calculator is everybody says that they're conservative, right. I'm conservative. Using a calculator, you can see the direct result of what conservative. How that can destroy your plan.

Yeah. Or save it, depending.

Or save it. Right, Good point.

I mean, ultimately, when you're building your financial plan, at the end of the day, I think having the knowledge of, here's the expected return that I need, or the needed return, I guess you could say, for my plan to be successful, because you can't. You know, you could build a plan that says, well, I just have to save $11,000 a month and everything would be great. It's like, well, I don't have 11,000amonth to save. Like, there's. I can manage my expenses, I can save. You know, I can. I can cut where I need to and be efficient and all that sort of stuff. But if it's just a number, that's not a number that's realistic. There's the, the other lever that you can. That to your point from before, Joe, the other lever that you can pull is rate of return. To a point, obviously.

But.

But I find that once people understand that, hey, this is the impact of, you know, this, you know, this rate of return. Here's what happens in the long run and here's the variability that happens with that. They're much more likely to stick with the plan during times when things are not so fun, like the last month or 20, 22 or the COVID period or something like that. Because it's like, okay, that's part of it. This is all baked into. To get eight, you got to be okay with minus 20. That's already part of the deal. Like, that's the trade off.

So.

So by illustrating that, I think. I think people are a little bit more comfortable with. With sticking with it when things don't go their way. It's easy to be aggressive when things are going great.

I know, I know. One thing we've seen a lot lately, Steve, is, is inflation. And, and I would have to guess that when people mess up, like putting everything into the calculator, like they. I gotta believe a lot of people miss inflation or do inflation wrong.

Yeah. I think one thing, I'll show you this so you can see the impact to bring it to life a bit. Let's see. I'm going to do my screen share. Is that okay if I do a screen share?

Back to technology. Yeah, just watch out. It took us forever to get this thing rolling.

Let's see. Here we go.

All right.

Entire screen. Let's see if I could do this thing. It's thinking about it. All right, here we go. Share. Hopefully you can see this. Boom, There we go.

Nice.

Yeah.

Right.

So like, this is our platform. This is a fully built out plan, right. And I think one thing, you know, you'll obviously this person has a little bit more money. They're, they're approaching retirement, they've been doing a good job of saving. And we kind of, you know, as you look forward, you see their net worth. And we've run a bunch of stats around their probability success and forecast their net worth and things like that. But if you look at this, this was projected in today's dollars, right? So this is like kind of constant dollars. And a lot of folks when they're doing this stuff, they don't understand the difference between today's dollars and future dollars. And future dollars are inflation adjusted. Right. So if you flip this to future dollars, people see this and are like, oh, I'm going to have almost $16 million later in my life. That seems like a huge amount of money. But the reality is when you look at it in today's dollars, you know, you're going to go from three and a half to 5.8. Yeah. You're going to build wealth. Well, yeah, but it's not going to be that. So I think that's like an example of like in a very simple way of seeing the impact of inflation. Really users, it's really good for them to kind of understand the difference between, you know, today's dollars versus future dollars because essentially this amount of this $6 million buys the same amount of money, goods and services as this $16 million. And really what we care about is like our, you know, our ability to use our money to pay for our lives and travel or whatever we want to do or give, you know, give things to our to our heirs and kids and stuff.

Sure. And you could show the difference that, let's say inflation accelerates for a while. You could input that.

Yeah. So the thing about our platform is that it, like, it, it does allow like a huge amount of control. So you can do things like, you know, down here actually in expenses, I think, by the way, I'm getting, yeah, this is, you know, this is when you're here, like we, we do, we do things, you know, where you can control like your spending. Right. So in this simple case, I'm, I'm spending a certain, in this case, like him spending a certain amount of money pre retirement, less early retirement, less later retirement. You know, there's the kind of, the, the kind of, the go, go slow, go, no go. But that kind of control, you can do the same kind of thing with returns. So you can say, hey, for this period of time, I think that I'm going to have, you know, different returns. So you can be in here and be like, okay, hey, I expect to get, you know, I'm getting moderately aggressive returns. This is how my portfolio is invested at this time. Right. And in the future I'm going to change this to be conservative and people do this, right. They'll be like, hey, I'm invested and then I'm gonna, I, I think I don't need to have the same level of returns and I want to turn down my risk.

Well, sure.

When you're, when you're, when you're.

Rolling.

Along, you're more than 10 years away from retirement. I mean, it makes sense to put your foot on the gas. And then as we get closer to needing that dollar, then we show a lower rate of return, but also more safety that we can get at the money. Like we can more safely access the money without worrying about the market being down.

Yep, exactly. I think the thing that people like about this platform is that it puts kind of industrial strength planning in the hands of, you know, regular people. And it's either free or, you know, $10 a month. It's pretty inexpensive. And so a lot of our users, they, you know, it's not mutually exclusive with an advisor. Many folks have advisors and they'll be like, okay, great, but look, I built this over the weekend. They'll send this to the advisor. And a lot of folks are, we make it easy to kind of control all the variables, but also build scenarios like, oh, what happens if I retire at 57? Well, you can kind of bring the scenario up and it'll show you the difference.

Can we Talk about another mistake. I think a lot of people make sure. I think. I don't know. Og Tell me if I'm right or wrong here. This. I guess it's lumpiness of these expenses. Like, let's say that you're going to buy an RV right at retirement. I mean, now you're going to take a bunch more money out one year. You're going to take out a bunch more money out one year than you'll take out other years. You know what I mean? Your expenses are not the same every year. And I think that we sometimes fall into a trap of using a calculator and just saying, okay, I'm going to spend $70,000 a year, but without taking into account the first year, I'm going to take out, you know, 120,000.

Well, you have to remember that in the second year, then you put in 62,000 after you sell your RV back. Don't forget, once you realize, include that it's not, it's not. It may not. May not be as glamorous as you. As you think, you know, and when it comes to planning, there's, there's so many levels of complication. I know that some people might look at this and go, holy crap, I don't even know where to start. Obviously, Steve, you've got a onboarding way to deal with this and, you know, kind of a guided tour. So it's not like you're, it's not like you just go, here, good luck. You know, there's, there's some guidance there that you know that you can kind of get into. But, but you can go as simple as an Excel worksheet, right? If you're just trying to point the boat in the right direction and start rowing, you know, if you're trying to get into the, into a little bit more detail, you can build a shell of this. You can go crazy into it and say, from a cash flow standpoint, yeah, I'm gonna have this, this lumpy expense and I'm gonna do a, a big trip with the kids and grandkids once every three years until I'm 80. And, and so it's really limited, just your imagination. I don't know that that's a big mistake that people make in terms of, like, forgetting that those things happen in terms of the lumpy expenses like you're talking about. But, but I, but I do think it's important to. As you get closer and some things start getting more solidified in terms of what you find passionate or what you want to do that, you account for that. You know, when you're 35 and you're building your first, you know, retirement plan on this calculator or other ones, you may not know that you want to get an RV at 65 and travel the world, and that's okay. You can.

You can.

You can still say, well, I think I'm gonna spend 10,000amonth.

Yeah, 100%. Yeah. A lot of our users are engineers and kind of technical people. A lot of people have built their own spreadsheets, right. That people start. And they. That's where we started. I mean, when I built this company, like, when we. We built this because we were helping my mom figure out her own situation, and, like, we couldn't attract a financial advisor, so we did it ourselves. And we built these spreadsheets, my brother and I, and, like, we're kind of going through all this stuff, you know, income, expenses, assets and debt. We're trying to figure out Social Security and healthcare and Medicare, and we're like, this is complicated. How come nothing exists? So that's why we created. Created the software. But yeah, and it does, you know, og. It does go from. It can start simple. It does start simple. A lot of people, and a majority of our users use the free version. And then about 25% of people upgrade and they're like, great. I actually want to have this level of control. It's worth, you know, the two cups of two lattes a month for me to, you know, be able to manage my get. Strategically manage my money the way I want. And, like, I built this little thing for you. If you, you know, go buy the RV, guess what? You know, spending 200 grand, an RV is going to cost you almost half a million dollars in your estate. And it's going to, you know, it's going to impact your plan these different ways.

And so, you know, the actual effects of that, like, what's, you know, what's the cost?

What's the true cost? It decreased my probability of, like, you know, having enough money by 7% from 95 to 88%. So, like, you know, it's easy to do that. And so you can decide, you know, is it worth that trade off. Right.

We're having a nice robust discussion on online here. I do want to highlight one from Leisure Enthusiast 22, who Steve says that's a whole lot of open tabs. Very impressive.

You know, one thing that's happening, this. This whole combination of talking about technical stuff, like, our site actually usually runs really quicker, but I think combination of, like, broadcasting and like, me messing around this thing is like, slowing down my laptop.

7,000 tabs open.

I was. I, by the way, I was, I was. What is it called? Curating. I was grooming my tabs right before this to try and bring it down, I think.

I think. So this is only half of what Steve usually has open. Let's, let's talk about another thing I think people mess up often, Steve, which is, you know, you've got all these income streams coming different places, right? You've got, you've got Social Security coming in. You might have a pension coming in. You might be taking distributions from someplace. Like, I feel like the, the income stream bucket we often forget about or we, we just try to throw a dart at versus getting a little more granular. What's the, what's the effect of showing that or forgetting to show that?

Yeah, I think, you know, we call ourselves, you know, bolden, like your financial confidence platform. And people build confidence, I think, by kind of having some level of mastery over the whatever situation they're in. And so for us, it's like, we do think, we do know that many people want to understand this. Like, the thing about retirement is. So I interviewed Bob Martin, the Nobel Prize winner, right? And yeah, you know, he was the guy from Long Term Capital Management. If you go way back, like when the whole thing, like, went sideways. But talk about crisis. But anyway, what he was sharing was that, like, the main thing that people get wrong is they think of, they think of retirement as like an asset game, right? Like, you're just trying to have a big pile of money. It's like, really what you want to think about is having enough income that lasts the rest of your life. And when we went from pensions to defined contribution for 1K, everybody had to become their own personal CFO. Like, we're like, okay, good, good luck, America. 300 million people, right? And good luck, world population, 8 billion people. You got to learn all about your money and how to manage it. And so what we're trying to do is, like, people want to dive in and kind of understand their numbers. And so we, if you want to go this deep, you know, you can kind of get into, like, what, you know, where's my income coming from, my.

Drawdowns and like, the different colors or different sources of income. Is that what we're looking at?

Yeah, exactly. So, like, you got investment income, right? RMDs, requirement, distributions, life, you know, savings, drawdown, work. You know, you can see this in the platform and then your expenses what's driving it? Health care costs are a big thing. Like hey, we put the RV in there, your mortgage, long term care. So it people can see how their income and expenses come together and make sure that like they like people get into these plans like every year they're like okay, here's my portfolio, here's my, you know, my income. And then they come back a year later and they kind of reset everything and track it.

And I, and by the way stackers, I know that you know we're diving into some nerdy stuff. I really like Steve, what you said earlier, which is just use the basics first, begin with the basics, build maybe just a set income stream, make sure you get inflation right and then begin putting, get a little bit more granular as you go. I think that because I think in some cases, you know, we get granular right away and then we get freaked out and we just throw the calculator away, which is not what we want to do. But speaking of getting granular and I said that as a prelude because that's what I want to do here is that sometimes this, you know, you mentioned taking required minimum distributions out, right? And a lot of people will wait on requirement distributions and oh gee, you know that for some people this can be a mistake because if I wait to take money out of my pre tax plans I might end up costing myself a lot more money in taxes later versus maybe taking the money earlier.

Well I think that you know, as you were talking about mistakes and income and expenses and things like that, I was thinking about how, how I would kind of phrase that all together in terms of a mistake that I, that I think about which is not understanding how the different streams of income will, will work downstream from one another. And, and what happens when you have a big non qualified account with lots of dividends or a big capital gain and how that affects other things like how does it affect your Social Security income taxation. Right. Like what are the bend points in that and paying attention to it. Right. It kind of sucks to be just over or the wonderful thing that everybody talks about now irmaa, right. Which is the, your surcharge relative to your Medicare premiums. When you make a bunch of money, the Medicare is not as generous to you. It's just like, you know, and the crazy thing is is that it's a two year, it's a two year ago problem. And so a lot of times you don't even like match it up in your brain. You're like why all of a sudden did my Medicare Premiums go up. That was two years ago when I did that. Why am I getting penalized for it right now? It just takes a while to sort it out. But I think thinking about these cash flow items and saying, okay, here's what. Here's, you know, here's the do nothing plan. Here's the what if I take my, you know, qualified distributions, I start taking money on my qualified accounts a little bit earlier, how does it affect my taxation? How does it affect Social Security distributions? Can I defer my Social Security to 70? Because I'm drawing down from my IRAs earlier. So, you know what I mean? Like, now we're starting to put different. Different ideas out there, or, you know, of course, the fun one, which is like Roth conversions and that sort of stuff.

So. Yeah, I mean, I'll show you how this comes together. I mean, I think that you're right. One of the things that we've done that's different is we are showing people how all this stuff relates and that you're O.J. you're exactly right.

The biggest thing is just, it's. It's being empowered to know the info so that you can make a good decision. You mentioned confidence before, Steve. It's like I feel confident when I know I've got all good information and I can make, you know, I can make a decision that's good for me and my family because I know I've got good info. I'm looking at.

That's right. So we, you know, a couple things about that. So, one, we allow people to link accounts. So you can link link accounts through Plaid Meld. These are account aggregations, so your numbers are live. I think the big thing is, you know, people will learn on spreadsheets. And people come to me and like, hey, I built this. Like this. My super spreadsheet is better than your platform. Like, okay, great, you know, and good job. Spent, you know, hundreds of hours building it. Like, I don't know how what you value your time at, but, like, hey, if you value your time at like five bucks an hour, maybe it's a great investment. But, you know, do you know it's right? I mean, the thing that we have is 400, 000 people have built plans on this thing. We have 20, 000 people on Facebook, a bunch of people on Reddit. People are, you know, messaging. Thousands of people are messages every week about, like, what's good. We're always fixing it, right? It's never, I'm not saying, like, it's a hundred. Like, we're always working on this thing too. But you have a lot of other very smart people looking at it and kind of like calling BS if they think that something's wrong. And I think that's, you know, you don't, you also don't want to make mistakes, right? You don't want to make, you can make. There are these one time doors you get to walk through. Like how do you claim Medicare, right. Do you get, you know, you take, prefer you take like regular, you know, regular Medicare, right. When do you claim Social Security, you know, and all that stuff and your spouse. So you want to make these decisions effectively.

So the effects of taxation on this stuff then I guess to, to, to talk about taxes, you'll be able to show how this income comes in and, and the, the tax effect on all the income, Steve, as it comes in.

Yeah, a hundred percent. And I wanted to show you, like, let me show you this Roth conversion thing because that's something we touched on earlier. So one of the strategies that, you know, people do is a lot of Our users are 401k millionaires, right? They've been working and saving their whole life, making good decisions and then they're like, okay, great, I'm heading towards retirement and I have, you know, a million bucks or a million and a half dollars and I'm heading to have more. But that is also going to mean them have high RMDs. We talked to users. They're going to have more income in retirement than they had when they're working and they're going to pay more taxes, more taxable income. More taxable income, yeah. All that $401 comes out as income, you know, as income, taxable dollars. So people will come in here and they'll be like, okay, I want to solve for, you know, taking money out of the 22% tax bracket. And what we're doing here is we let users kind of set a bunch of parameters and say, okay, help me figure out how to do Roth conversions, right? And so what this thing is doing is, you know, I didn't optimize. I kind of picked some random optimizations, but basically it'll say, hey, you can solve for different strategies. So like I could solve for highest estate value, right? Hang on a second. I might have to. Let me see if this, will, let me do this. Anyway, it will go off and run a bunch of simulations behind the scenes to figure out how you could potentially do better. And you can control the parameters. It will tell you you can consider doing these conversions from these Accounts. And this is how it affects your plan. It helps you think through the tax rate implications and the tax liability and also irmaa, you know, the Medicare means testing. So it, we're, we're putting pretty powerful tools in the hands of users and letting them kind of like get into this themselves. Right. Nor this used to be the domain of only your, your cfg and sure.

Well, and again, you know, when you want to, if you want to dive into the, the depths, you want to make sure you've got a tool that will help you do that. Let's get Doug back out here. Steve, we're going to give you a short break because we promised everybody that we're going to give three subscriptions away and three copies of my book. And so let's see. There we go. Doug, you ready with today's trivia question?

Sure am, Joe. Hey there stackers. I'm Joe's mom's neighbor Doug. And look at all of you beautiful people out there. I mean you think your cameras are off, but I know a guy and I'm looking at, I'm looking at you and also at you and, but you move your. Yeah, at you in the back. I mean I gotta say most stackers are friendly and they're good looking bunch but I mean, except that one guy back there. I mean run a comb through your hair once in a while. Dude, you're on the Internet. Look presentable. Today. Let's dole out a dose of some calculator related trivia. The first mechanical calculator was created by none other than my old friend Blaze Pascal. Oh, Blaz, Blaze. Blaze designed for evil reasons. I'm telling you. Get this. Blaze designed his calculator to assist his dad who was a tax collector.

Oh.

To assist him performing calculations related to sucking the joy out of all the citizens for centuries to come. It could add and subtract numbers directly. Could also perform multiplication and division through repeated addition and subtraction. Pretty advanced for its time. I'll bet you're looking it up right now. When was the Pascaline calculator invented so you can win a one year subscription to Bold and Calculator and that copy of Joe's book. But no, this ain't our first square dance. Kids, because the Internet exists, we've also already done that work for you. I'm just going to tell you he invented it in 1642. That's not the question, but we're going to ask this instead. What year did famous stacking Benjamin's contributor Paula Pant Guess when we asked her what year it was invented.

Look that one up, can you?

No. I'm going to give you a little help here, folks. Paula is consistently the worst person on the planet at trivia. I mean, she's got awards for how bad she is. Just one guest per person. People use the comments in YouTube to send us your guests. Also tell us where you're listening to us right now. I'm sorry to say people from Ohio are ineligible. Look, I don't know. It's not, I don't, it's not my call.

Doug's like, I don't make the rules. Even though Doug just made up that rule.

I'll be back at the end of the event with our winner.

Good stuff, man. Thank you so much. Let's get back into this. So everybody give us your guesses. We're gonna give away three of these at the end here in about 20 minutes. So in just a couple minutes we're gonna take your questions. But Steve, let's, let's talk about, let's talk about this. I want to, I want to, I want to talk about setting up benchmarks and maybe like if I'm on the fence about something, right? In fact, somebody in the, in, in the chat was talking about discretionary expenses. Like, okay, I'm thinking to do this thing, but instead, you know, maybe I'll do this other thing. Like what if. I'm comparing two things. Is there some type of if then stuff that we can use to make this, make this decision easier?

Yeah, for sure. I'm going to go back in here. So back up here. So a couple things. We let people have controls. Like, you know, what do I want to, what am I going to spend based on what I need? Or like what I could spend or a fixed percentage. Right? And we also let people kind of budget different ways, like basically. Or you could do a kind of a detailed one with your must spend dollars and see how that changes everything or like to spend dollars. So we make it pretty easy for people to kind of see the, the differences here and, and pop around. And that's one way they can adapt it.

I wanna, I wanna be clear. Doug was kidding about Ohio, by the way. I got people going, oh no, we live in Ohio, Doug. If you've never heard our podcast, Doug doesn't stop. So we, we Ohio. Ohio.

But was.

He really is all right too. But, but Steve, these, it, it's great because these big expenses, right? I mean, you know, I mentioned the rv, but we're gonna buy the second house or we're gonna retire, let's say at, you know, we're going to retire early. Let's say we want to retire at 55 versus retire at 62.

Yep. Yeah, it's super easy. Like I, before I built the scenario, you know, retiring at 57. And you can see it kind of like pivots the whole thing. So we have this idea of, you know, being able to kind of build and manage scenarios and compare them. So you could come in here and see that and kind of compare these things.

And just look, by the way on the left, it showed 88%. We saw the percentage go down, the chance of success go down.

Yeah, I'm looking at it side by side, right. So here I'm kind of looking at retiring at 62 versus 57. And you can see, hey, my net worth at the end of the plan here is 5 million. Here it's 1.3. Here it's, you know, at retirement age, my net worth is a little bit lower. But yeah, my probability of success is down, average income is down. So it's pretty easy to create a different scenario. You're basically copying the first one and changing a bunch of parameters around. And so users do that and they might have a, I mean, people like to have a plan A, B and C. You know, plan A is, I'm doing this, but plan B is like, oh, you know, I'm forced to retire early, but what's that look like? You know, can I still be confident? A lot of people discover they can retire now. A lot of people want to know if they can retire. And I think it's really powerful them to say, oh, I, I thought I had to work till I was 65 and I can retire at 62.

That's fantastic. So that is, that is great news. Oh, gee, I was going to ask you about something related to, related to that. About, about the fact that a lot of people, you know, looking into now, Monte Carlo simulations, right, where they're looking at this percent chance. And I know that a lot of people doing their own plans, they want to see 99, but I don't think do, do professionals look for 99 or 100 chance that that's happen?

No, I, I don't. I'd be interested to hear what you have to say about the, the, the data that you see with your users, Steve. But, but I think that kind of what you said there at the very end, which is a lot of people find out they can retire now. I think that the vast majority of people want to See that graph go up and to the right forever and, and even the one that we're looking at right now where it goes down a little bit, there's probably a handful of people that are like, I don't know, it says I die with only 3 million. Is that going to be enough? It's like, yeah, it's enough. Like a dollar is enough, technically, you know. And by the way, I don't know what age you have out here. In our plans, we use age 100 just because, you know, you can't prove to me that it's any other number. So I might as well pick, pick a long one. But, but I think that the vast majority of people can retire sooner than they think and also can be more, I guess aggressive would be the right word, right? More aggressive with the, with the Monte Carlo number, it doesn't have to be 90, 80. I might get a little squirrely below 77. And I'll tell you the, just kind of anecdotally here real quick. What, how I think about this is, I don't think about it in terms of probability of success because that sounds way different than probability of having to make a change. So we've got this plan put together, right? And you say, I want to spend this amount of money, I'm going to have this tax rate, I'm going to have this growth rate. I'm a da da da da da.

Da, da da da.

Well, how likely is it that for the next 30 years you're not going to make any changes to that? You're not going to spend a little more, one year, maybe a little less. You're not going to. I mean, we all know people that have broke a hip and had the trip planned and said, well, I can't go this year. I'm physically unable to, I'll go next year. Changes their spending a little bit, right? Just, you know, the timing of that. I mean, Doug's probably gonna break a hip any day now, frankly. I mean, his feeble bones anyway, so his shots fired. It's like eight o'.

Clock.

Sitting over here, this is what you get. You put me on stage at 8 o'.

Clock.

But my point is, is that you're likely to make changes to your plan anyway. And so when I look at this and I say, hey, there's an 80, 88 chance of success. I, I think about this like there's a 1 in 10 chance about that. You have to make a, a change to one to your plan. And it could be a good change, honestly, but but you might be like, well, this year we have to spend.

A little less, you know, so I don't, Yeah, I mean I, I think that's a great point. OG it's like the, we're actually going to add this kind of these income guardrails. People talk about that, right? So really, you know.

Yeah, it's all these days.

Yeah, people are, they index a lot in this like chance of success. But really you want to index, you know, you're highly likely to be successful. And many people that, you know, people that have money when they retire, they die with more money. They, they keep building wealth. I just talked to one of the guys that had on our podcast, Fritz Gilbert, and you know, he retired six years ago at like 55. And six years later I was like, do you have more money? He's like, I have more money. I'm like, you haven't worked for six years, right?

Yeah.

He's like, I got more money. I'm like, okay, you know, that's what happens. And I think another thing to keep on. I don't know if people have read DAI with zero, but that guy talks about you want to have your kind of peak wealth in your 45 to 65 year old range and then you use your human capital and your money to enjoy yourself when you can. Because a lot of people are indexing. It's like, I'm going to have a ton of money when I'm 90. If you look at your probability of being alive or being not alive, that's really high at the same time. And I think people need to match.

It, match it up to your life expectancy and see the, it's interesting when you, you know, when you talk to people who have retired, especially a little earlier, right? 55, 50, you know, 54, something like that. And then you talk to them a little bit later and they say, yeah, I should have done this in my late fort. Like if I would have known, should.

Have gone sooner, you know, like, what.

Are you going to do with $10 million at 90 that you can't do with $5 million at 75?

Well, and I like, I like in this Monte Carlo simulation discussion, you know, the fact, OG that you said this is chance that I'll have to change because said this earlier, it isn't a plan, it's planning, right? So if I can get there with a 75% chance. And that seems to think of it.

This way too, Joe. When you look at the, when you look at how Monte Carlo and I don't know if you guys use a thousand scenarios, Steve, in your example, or if you use 10,000. But when you say this 88% chance you have to get through retirement one time when you do a Monte Carlo, there's this is a thousand scenarios. A thousand times you ran this and, and you know, or maybe 10,000, it's like 880 of the times it was fine. Like, that's a lot. That's, that's, I mean, 880 people out of the, out of a room of a thousand are not going to make any changes to their plan based on, you know, downside changes to their plan based on various market fluctuation. So full saving.

Yeah, I think that's exactly right. And I think one of the things we want to make clear to people, and this is something we can do better, it's that. Yeah, okay, and 880 times, because we ran it a thousand times. Right. You're good. And the 120 other times, the change you might have to make is probably pretty freaking small.

It happens at 87.

Yeah, right. Everyone's like, oh, for the other 120 times, I'm completely out of money. No, that's not true. The 120 times, you know, maybe you have to spend, you know, $200 less a month and you're fine. So I think that's something we want to make really clear to people.

This is why I like paying attention to the benchmarks too. I need to be at X amount of money by why date so that I know if I'm ahead or behind on that. And by the way, Doug, somehow I got roped into, into your Ohio comment because our friend Frank hanging out with us, he says I'm still butt hurt from the Skyline Chile. I hate.

That is a lie.

And by the way, I did not get a chance that I was sick as Frank knows for most of economy. So I didn't even make it to Skyline Chile, which was, which was tough.

But I would like to submit since I now have a son going to A and M. I would also like to admit anybody from Austin.

That'S my kid. Oh, gee. Oh, that's my. Come on down and. All right, now let's, let's start taking some questions. Doug, have you been looking at some of the questions on here that people have had?

I have, Joe. I have it.

Let me see 7,000 of them.

Yeah, there are a lot of questions. So let me see if I can, I can get some of those up here. You know, I liked, I liked a really simple Question that Jennifer Colby. I'm, I'm gonna nail everybody's name. So if I don't pronounce it, it's.

The way you just say Jennifer. I can't pronounce Jennifer.

Yeah, Jennifer. How do you plan with only a 10 year Runway, with only a 10.

Year Runway before you're going to retire?

That's what, that's what I gather. Yeah.

Yeah.

Look, I think you know the answer. Everyone's gonna say when was the best time to start saving? It was like whatever, 10 years ago. But you know, it is, it is what it is. I, I would say that, you know, I've seen this in my own life. Like my mother in law, she got very serious about saving and building for retirement as she approached retirement and she put a lot of good practices into place and there's also catch up provisions and stuff like that and was able to kind of like get into a much better financial situation. So, you know, I think it's understanding what's available to you. And for many folks that are 50 plus, 55 plus, you can save more, right? You can think about how you're going to claim Social Security. You can, you know, maybe consider working part time, you know, and you know, you can also consider other trade offs. Like, you know, there are many cheaper. I mean I live in Northern California, right. If I didn't live in Northern California, I could retire tomorrow. It's just like I choose to live here. But it's, you know, we can, there's a lot of, you know, go, go live in Mexico for.

Well and with, yeah, with respect to build to using the calculator, I think I start off with a minimum, right? What's the, what is the small amount that I know that I can do 10 years from now? Like what can I do? And I start calculating out what can I do. And to your point, maybe I do Steve, have to model in some income during the first X number of years. How long do I have to work part time? It may be a job for less money than a job that, that I can stand, you know, to make money part time there. I think that's where I begin modeling. And that's where the, that's where the computer comes in. Like where you know, what's the, what's the baseline? And once I have that, that gives me then something to shoot for that I've got. Doug, I've got one right here that I like. Carl asks, what if I'm already retired? Does this calculator show my progress? I think we showed that it, that it does, Carl. But he says also, it won't let me enter that I have no mortgage.

You should be able to enter that you have no mortgage. So, like, you know, you can set it up that I, you. I mean, when you, if you go through onboarding, it'll let you enter that you have no mortgage. And if you, I mean, it works at any point in time, right? This was designed. We. This company used to be called New Retirement. So it is, like, a little bit more optimized for approaching and then decumulating in retirement. But it does work across your whole life. You can start. We have, you know, people that are 20 years old using this thing, and it's meant to, yeah, you, you enter your plan, you track against your goals, you track your progress and, and keep coming back to it. And I think people like it because it gives them visibility into what's coming. And, you know, the only, the only constant is change, right? Market's changing, interest rates are changing. Right. Taxes and regulation are changing. So we change some stuff for you. Like we'll update taxes in here. You can come in here and, you know, do you know, actually one of the things that's kind of interesting is you can come in here and basically, like, change tax rates and stuff like that, which is, which is kind of interesting. So, like, you can fall back to in here, like, go back to 2017 tax rates and it'll redo your whole plan, stuff like that. But we, you know, but we keep, you know, kind of tax rates up to date for people.

Well, and it's funny, Steve, Rebecca. Rebecca talked about this as. I like the way it is set up. So we can try lots of different scenarios as things change. Let's say taxes change. You could put that right in the calculator to show the, to show the change there. Doug, what's another one we've got. Doug is on mute.

Doug is on mute.

So Robin asks, how often should we look at a retirement calculator? Is this. I'm guessing Robin's wondering, you look at this every week, once a year, once a quarter. How often do you check back in on it? It.

Yeah, that's a good question. Most of our users, when they're getting set up, they're kind of using it a lot more because they're kind of pulling all their numbers together, thinking about their scenarios. And then it's more episodic. You know, some people are quarterly, some people are annually. Some people are, you know, something happened, like, okay, someone lost their job, or I decided to Retire early, Someone got sick, some, you know, someone's getting married, whatever, they want to put it in there, you know, that's what we don't know. Right. But I think having a place that's living like your living plan that you can go back to, and you're like, okay, guess what? Susie's going to get married and we got to pay for this. And it's going to, we think it's going to be 100 grand pay for a wedding. You know, you can throw that in there and say, how does that affect my situation?

I've got one here from Rebecca. How do you, how do you model in the calculator this idea of sequence of return risk, Steve? So maybe I'm going to take money out the first couple of years from, from cash or from very low risk investments.

Yeah. So we have this ability here in money flows, kind of like manage withdrawals and stuff like that. So we have different withdrawal strategies that you can put in here and also withdrawal orders. So some users do this bucket strategy where they'll be like, I'm gonna have an account that, you know is for the next one, two or three, three years, and they'll put that in here and they'll make that, hey, all the money's coming out of this. And then they're kind of going back and reloading that and moving money into that. So that's one way you can do it. Some folks do a, you know, they think about their, their must have spending and they try to fill that with Social Security. Maybe they have a pension, maybe they buy an annuity on top of that. So, like, I'm guaranteed to have enough. Like, I'm not going to run out of, like, I'll always have income that meets my core needs. And with the rest of the money, they take higher risk. So you can model all that kind of stuff in this platform.

You know, when you talked about annuity, it made me think of longevity risk. Can I, can I change my life expectancy in here or is it. Or is it just an average?

Yeah, no, you can, you can come in here and basically, you know, control it.

Because Doug's like, I want to go sooner. Live fast, die hard, man.

You're damn right. Yes.

All this talk about Monte Carlo situations. I love Case Ann's comment. My daughter's just a Monte Carlo. She loved it. So there you go.

Yeah.

I mean, it wasn't even a simulation. They went to the real place. Doug, what else we got?

I've got a question here from Sam who says, I've seen varying net worth estimates in different calculators. What are a few things that make yours accurate?

Yeah, I think. Well, one, you know, you can get super granular with ours, right? You can, you know, and you want, you can dive, I mean, if you want to dive into your number numbers and like look at it with, you can print it out, right? Or you can basically come in here and like, you know, look at all the numbers, right, that are driving your plan. So there's that, there's the fact that there's hundreds of thousands of users that have used it, right. You know, we have CFPs on staff that are using it. We have coaches and CFPs that are using this thing as well. And people are reviewing their plans. They're also a lot of our users, they get, you know, they might get a plan from MoneyGuide Pro or E money from their advisor and they do ours and they compare them, right. They want to get a second opinion.

Oh, that's neat. Yeah.

So we hear from a lot of folks that, hey, good news, my numbers, most people, you know, my numbers matched up, right. I think we would hear it from people if they were like, oh, this is wildly different.

I just like the idea of on a base level even, you know, if you meet with an advisor that you, that you know your stuff, I mean, you know a little bit, a little bit about what you're doing. So you're not just trusting someone. You're actually, you know, you're somebody that, that is the CEO of your financial situation. Somebody asked about if them scenarios. Can we do those? Yes, I think we've shown a few of those. Doug, you got another one. Doug's back on mute again.

Well, I remember my first day doing.

A live when you got. When your dogs are in northern Michigan, they, they bark at every deer that walks by the window. So I'm trying to protect everybody from, from that.

We also don't let Doug talk very much. So.

We have KK who says most calculators use worst case scenarios. Do you think that's reliable or will that cause you to over save?

Okay, well, let me one thing, one of the reasons we started this company is that, you know, and I've worked in financial services, most of financial services is a pretty opaque business, right? It's like you don't really know. It's not very transparent. You don't really know how people are paid, right? And they're, they're either paid on assets under management or transaction fees typically, or interest. If it's like, you know, debt Right. And I think one thing that's different about us is we charge users for our product. You will pay us to use the software because we want to be completely aligned with you. And, you know, one of the. Even though RAAs are supposed to be. They are fiduciaries, right? They're. They're. They've committed to acting in your best interest. But, like, one thing we heard, we had, I actually interviewed this guy, Glenn Nakamoto, on our podcast. He was like, hey, I wanted to buy an annuity. You know, this guy's a former CIA analyst, very smart guy. And he's like. He went around. He talked to a bunch of RAs, and he said, can I buy an annuity? And they're like, no, let's do it with bond ladders. Let's do it this way or that way. And he's like, I actually ran the numbers. I think buying an annuity could be good for me, and no one would do it, but part of it could be incentives, right? I would say many folks want you to be afraid so that you save lots of money if their income is tied to how much money you have saved up. Like, it could be that you're going to get input that says save more money, right? Versus we're, like, We're. Our. Our goal is to help you make good decisions. Right, and control your own money. You pay us for that, and we don't make money otherwise. So I think that's one thing. That one reason you might see different outcomes from different kinds of tools.

I think it's always important to know how people are paid. I also think it's important to know, you know, that you've got a person on your team that. That really. That has your back and that you're able to. That you're able to work really well with. Let's. Let's. Let's wrap this up. Do we have. Do we have a winner? Doug? Do we have winners?

Absolutely, Joe.

All right, here. Here we go. I don't see who. Oh, oh. We do have the winners. I see the winners. All right, Doug.

Yeah.

Who's. Who's. Who's taken home the three subscriptions and the copies of my book?

Well, hey there, stackers. I'm math lover and the guy who knew that 5318008 spelled out something really fun on my calculator? Joe's mom's neighbor, Doug.

You got to be a certain age to get that joke.

I think y' all just grabbed your calculator and you're doing it right Now.

Yeah, I'm sure.

Just try. Try turning it upside down. Yeah, you'll figure it out. The Pascaline calculator was built with a series of wheels and gears and because of its complexity and cost, was never widely adopted. But it did lay the groundwork for calculators to come. So, you know, in some ways the Bolden machine is like an awkward, nerdy love child of Pascal's calculator, isn't it? You already know that the calculator was created in 1642 because we told you, but we asked you to guess when Paula Pant thought it was created. And since we had so much great participation tonight, we're giving away three count of three glorious prize packages. And our winners are Joseph Skillin, who missed Paula's guest by just 89 years. ACAR 83. It's a weird name for a birth certificate. Who missed Paula's guest by just nine years. And Gordon Wong was off by zero years.

Bam.

Because he apparently had dinner with Paula tonight because he guessed exactly what Paula guessed, which was 1501. Way to go, everybody.

What if he texted Paula and said.

Hey Paula, what did you help a brother out?

What did you say? All, all three of you, Gordon, Joseph and acar83. Just email me joe stackybenjamins.com and we will get you those subscriptions to Steve's awesome product. Thank you so much, Steve for helping us out. Thanks OG for for doing some night work tonight.

How about that overtime bill will be substantial.

Thanks to all of you for hanging out tonight with us. If you've got other questions, Steve, people got other questions. Where do they find you?

Yeah, people can email me at steve.chenbolden.com or I'm on LinkedIn or you can find me on Twitter. I think I'm under the old handle new retirement. But yeah, I'm out there. And yeah, no, it's. Appreciate the opportunity to be here. Joe and OG and neighbor Doug. And also to everyone here who showed up from the fall start, looks like there's a lot of people that made it over.

So somebody wrote, somebody wrote, show us the button. You have no idea. We pressed the button, we were recording. We had a whole countdown timer. We had all this brilliance. And then I go over and I'm like, why is it not showing up?

We gotta do the outtakes. It was only three times that, you know, you're getting pretty stressed out out over here. Like it's not working.

Yeah, we gotta thank, we gotta thank a few people. But, but OG no, I was just.

Gonna Say while all that was going on, I was just compiling all the funny comments that people were making while it was not going on. Somebody wrote, I used to wait 10 minutes for my professor. I don't think this qualifies.

You get credit for the class.

Oh, my.

Somebody else said, the top five mistakes you can make with YouTube Live events.

It was horrible. Well, you know what? I gotta thank a few people that we don't thank enough around here. Tina in the background.

Thank you, Tina.

She's been helping us a ton. She helped us set this up. It's so frustrating that our. Our solution we use Riverside goes off every time. This time we set it up the same way. Didn't go. Thanks also to. To Kevin, who writes our 201. Kevin Bailey is amazing. If you want to get our newsletter, the 201, there's the link stackybenjamins.com 201. We also have two amazing interns, Debity and Cree, who really did a lot of the legwork to set this up. They're two amazing young ladies who are at our local university, Texas A and M, Texarkana Branch. OG We've got A and M right here in our backyard. So big thanks to Debeney and Cree for the work that they did doing this and thanks to all of you for hanging out with us here tonight. We hope you got a lot out of it. We'd love to do more of these in the future. Future. And Steve, we. Don't be a stranger, man. Let's do this again soon.

Yeah. I appreciate you having me on here. It's been great.

It's. It's been so great. All right, everybody, we made it. Doug, take us home, man. What should we have learned today?

Well, Joe, first, take some advice from Steve Chen. When you're looking for a retirement calculator, pick the one that makes the coolest looking graphs. Like, they get that, right, Steve? I mean, I think I heard you, but if you need to correct me, you need to just polish my words a little bit. Go ahead.

No, it's good. Yeah, we definitely invest in design. I'll give a shout out to Rachel Diesel, our head of design, and she's built a really good design team. We know. People. People appreciate it.

Second, don't forget what OG said about understanding how different income will work downstream with each other. Oh, gee, can you just summarize that again for us?

Yeah, just use the calculator and it will tell you.

Oh, wow. Awesome. But the big lesson, don't try and end an online event without letting Joe's mom say hello. She wanted me to say thank you for coming and she's very proud of you, especially you. Right over. Yeah, you. Thanks to Steve Chen for joining us today. You'll find the Bolden calculator through our link@stackingbenjamins.com Bolden. We'll also include links in our show notes@stackingbenjamins.Com thanks, everybody.

Thank you. Stacking Benjamin Stock calculator. Doug, I think I put that in the wrong.

Okay. Stacking Benjamin. Stuck. Should I start from the top?

We should do the whole thing over again. All right, everybody, have a great night.

All right. Thanks. Good night.