Travis M. Sherman www.travissherman.com | travis@travissherman.com 205-602-6308 (Call or Text)
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HELPING PEOPLE HAVE A
“WORRY-FREE” RETIREMENT!
Travis M. Sherman Retirement Income Specialist CTS™, NSSA™, RICP™ RFC™
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Copyright © 2020
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introduction and acknowledgments
I
’m a follower of Christ, a husband, a father of two girls, and a retirement income specialist. In addition, I’m an Eagle Scout, an Army ROTC Scholarship recipient, a cyclist, and a multiple Ironman Triathlon Finisher for which I am a 2019 All World Athlete (top 5% of Ironman athletes worldwide) award winner. First and foremost, I have to acknowledge God for guiding my steps and leading me to where I’m at now and for giving me the gifts to do what I do; without Him, I would be nothing and would still be lost. I also must acknowledge my wife, Jennifer, for 20+ years of support, putting up with my highs and lows while I “figured” this stuff out. Without her unwavering support, especially during the difficult periods, I would be lost. I would also be remiss if I didn’t acknowledge all of the people in my life who have been instrumental in helping me get to where I am and equipping me with the knowledge and insight to be successful. So as to not inadvertently leave someone out, I’ll express my gratitude to you personally. Without all of your insight, support, love, challenges, etc., I wouldn’t be the person I am today. For all these things I am grateful, and I owe my success to you all.
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foreword
T
here are two types of books on the topic of retirement planning: those in which the author tries to impress you with their extensive education and expertise, often using industry jargon and simple concepts dressed up to look more sophisticated than they actually are (to impress you), and those like mine. I am fully capable of writing a technical “me too” book on retirement planning. In fact, you can read the one that I contributed content titled Retirement Income: An Owner’s Manual if you want to look for it. I’ll be happy to provide you with a copy. If you’d like to read it. I could also spend countless pages of this book trying to be like the authors of books that try to impress you with technical knowledge because heaven knows that I’ve spent enough time studying. I spent a combined total of 7 years at Auburn University and at the University of Alabama at Birmingham (U.A.B) getting a marketing degree and taking advanced accounting courses so that I could sit for the CPA exam. I also spent countless hours studying for insurance licenses like the Series 6, 63, and 65 as well as studying to obtain certificates and designations that include Certified Tax Specialist, Certified College Funding Specialist, National Social Security Advisor Certificate Holder training, Retirement Income Certified Professional, and Registered Financial Consultant. When I started this book project, I didn’t want it to be another technical “me too” book because there are literally thousands of them on Kindle; you can take your pick. You will find books that give you strategies on how to maximize your Social Security; one author will convince you to put all of your money into this bucket, and yet another author will convince you that you should do something completely different. Even if you find a strategy that you believe will work for your situation, that still leaves you with the dilemma of determining where to go to implement the discussed strategies or even how to start. Instead, I wanted this book to let you, the reader, know more about me and my passion for the retirement income industry and my passion for using my God-given gifts and talents to help people achieve a “worry-free-retirement.” I’m not sure how you came across this book— perhaps you attended one of my seminars or were given this book. Regardless of how you came across this book, I want to you learn exactly who Travis M. Sherman is and why you should at least consider Travis as one of your trusted financial professionals.
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what is a worry-free retirement?
T
here is probably no universally accepted definition of a “worry-free retirement.” I suspect this is something that is unique to each person. However, for the sake of this book, I’ll give you my definition and vision of what a worry-free retirement is. A worry-free retirement is one that allows you to live how you want to live and on your terms without fear of having external forces (risks) ruining it or causing “worry” or stress. The external forces that can ruin a retirement and cause worry and stress can include market fluctuations, market crashes, outliving your assets, inflation, not having money to pay for long-term care, the unexpected death of a spouse and the resulting financial strain, running out of money, taxes, etc. The key to a worry-free retirement is to eliminate all or at least as many of these risks as possible.
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Chapter
ONE growing up in a small southern town
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growing up in a small southern town
I
grew up in the fairly small southern town of Sylacauga, Alabama. By Alabama standards, Sylacauga would technically be a small city because it had more than one stop light and a Walmart, a Kmart, and a McDonalds. By all accounts, I suppose that I wasn’t like most kids and teenagers in that I spent my entire childhood trying to get out of Sylacauga to move to the city—preferably one that was out of state and a long way from home—for no reason other than to simply get away or to escape. However, now that I’m an adult, I often find myself longing for the small town life again. Perhaps the nostalgia of growing up clouds my memories or it’s the simplicity that life seemed to offer back in those days. I currently call Pelham, Alabama, home where I’ve been a resident for almost 20 years, and I have no plans to leave. Pelham is a town just outside of Birmingham, Alabama. It’s a good compromise between small city living and life in the big city, which works great for my wife and me because my wife grew up in Homewood (a town even closer to the city). Growing up in Sylacauga (about an hour away from Birmingham) meant things were relatively simple. I lived in Sylacauga with my mom, dad, and younger sister, Kelly. Kelly, and I were fortunate to live in a neighborhood that had a lot of people our age with which we could play. We were also fairly close to the school, which meant we could walk or ride our bikes there most days.*
An Early Photo of My Sister Kelly and Me. Travis M. Sherman Retirement Income Consulting LLC
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Every spring, summer, and fall in Sylacauga was spent flying kites in the cow pastures next to our neighborhood, fishing in the old quarry ponds nearby, riding bikes to friends’ houses to play, lying in the front yard and staring at clouds for hours on end, running barefoot and stepping on dandelion weeds before they reach full bloom and lose the spiky base (ouch), and playing backyard football until the streetlights came on. When the streetlights came on, it was time to head home for dinner—the understood rule all of the kids in the neighborhood seemed to at least loosely abide by. Chores were a big thing with my parents. In the summer, it was mowing the yard. In the fall, it was raking leaves and pine straw, and in the winter, it was chopping wood for the woodburning stove. Even though we had central heating and air, my parents insisted on using the wood-burning stove to heat the house during the winter. I never fully understood that and, truth be told, I still don’t to this day and probably never will. I guess it was the fact that they were “Native Vermonters” and that’s what they grew up with. All I know is that they must have expected a winter blizzard every year that would keep us snowed in for months on end because we had enough firewood stacked up along the side of the yard to essentially form a fence between us and the neighbors. Or, maybe they simply didn’t like the neighbors. Heck if I know…I was only five years old. All in all, life was fairly simple growing up in Sylacauga. My mom was a school teacher until she could no longer maintain a tenured position in any of the school systems. Then she became a crew worker at McDonalds (the minimum wage type), moved up as a manager at McDonalds, and then went on to start a janitorial service. My dad was an engineer at the local marble quarries. My sister and I were what are known as “latchkey kids”. We would come home from first or second grade to an empty house and fend for ourselves until our parents got home from work. Somehow, we survived, didn’t go hungry after school, and didn’t set the house on fire; this seemed to be the norm for most of our friends back in the 80s, whereas today, I’m sure the Department of Human Resources would be called for “child abuse” or neglect.
My Eagle Scout Badge
As I reflect on my childhood, I remember happy times, such as trips to Busch Gardens, road trips to Vermont with the family to visit my grandparents, and other little things like the time my dad put me in my Mickey Mouse footie pajamas and took me up to the fire station to ride in an “old timey” firetruck or when he took me dove hunting or shooting in the fields nearby. Despite all of these happy memories, I don’t really recall my parents showing much love and affection toward me or my sister, or to each other for that matter. It wasn’t really in their nature. In fact, my sister and I would almost expect a shoe to be thrown at our heads more than we would expect a hug or any other signs of affection as a response to a question. Travis M. Sherman Retirement Income Consulting LLC
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This isn’t to elicit a “poor Travis” response; I’m sure that everyone’s parents did something that influenced them both positively or negatively. However, I do believe that my parents’ tendencies did shape me as a person when it comes to getting close to people. It takes me a while…especially with adults. Even to this day, I tend to be guarded with my feelings and reserved. Unfortunately, many people take this the wrong way. They perceive it as being standoffish or the like, when in reality, that’s far from the truth. Anyone who truly knows me will attest that I’ll go out of my way to help someone in need. Because I know how a lack of affection can impact a young child growing up, as a father of two girls, how I showed affection is something that I definitely wanted to change. There isn’t a day that goes by where I don’t tell my girls at least a dozen times a day how much I love them. However, as a parent, I’m far from perfect, and there will probably be a day when my daughters are sharing their experiences as a child growing up, both the positive and the negative. Therefore, I now can understand and forgive any shortcomings my parents may have had in that area; there definitely isn’t a user’s manual to parenting. *Because we walked to school, I can now tell my two daughters how fortunate they are: when I was their age I walked to school in the snow with no shoes and it was uphill both ways. *Our school, Indian Valley, was on the other side of a cow pasture that we had to cross each day. As small children, our minds transformed these docile cows turned into raging bulls, which made for great childhood adventures.
Travis M. Sherman Retirement Income Consulting LLC
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Travis M. Sherman Retirement Income Consulting LLC
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Chapter
TWO we can’t afford it
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we can’t afford it
E
ven though the childhood that I remember was happy, things really started to change when I turned 10 or 11. I started to notice my parents frequently arguing with each other. It honestly seemed like it was a hobby or just something they did when they got home. Money and finances were generally the root causes of the arguments or, at least, what sparked the arguments (many were very heated). Where many families had mottos like “Never quit” or “We are the Griswald Family,” the Sherman family motto was seemingly “We Can’t Afford It.” “We can’t afford it” was a constant refrain. It didn’t matter what the request was, the answer was “we can’t afford it.” “Can I be in the band?” “We can’t afford it?” “Can I get a bike?” “We can’t afford it.” In all honesty, I don’t know if we could or couldn’t manage financially, but the refrain was “we can’t afford it.” It really didn’t matter what the request was because the answer was always ”we can’t afford it.” This one statement influenced my “Money View” growing up and, to an extent, it still does today. I remember one incident when I was 13: my mother bought me a pair of Reeboks that cost $35 dollars. When my dad found out, he exploded. This was one of many such incidents that revolved around money and finances that I never wanted to experience again. The family stress of finances, arguments over money, and other episodes peaked when I was in 6th grade. My sister was younger than I was, so I don’t believe she was fully attuned to what was going on during that period. However, at the age of 12 or 13, I was definitely aware (maybe not fully) of what was going on, and it was definitely impactful and stressful. It was also during this time that my father was let go from his job and the money issues seemed to get worse. During this period of high stress, I would get cluster headaches, which are a very severe form of migraine headaches. We are talking laying in a dark room that causes your parents to think you’re debilitated and on drugs. My grades dropped to the point that I was put into remedial math; I was distracted by the events of my home life. The teachers didn’t think I was that bright and it wasn’t until I got into trouble at school that I even revealed what was going on. I had always been business minded. It comes naturally to me. I was at a yard sale one time and came across these plastic peace symbols. So, I bought the entire lot for $2.00 with the intention of taking them to school and selling them for $1.00 each. The intention was to give my parents this money to help with the money problems that we were facing. For some reason, the teachers and the principal didn’t really see the positives in my entrepreneurial spirit and decided it warranted three “licks” with the wooden paddle. I guess the fact that the students of Mountainview were giving me their lunch money to buy my “trinkets” was Travis M. Sherman Retirement Income Consulting LLC
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something that the school administration couldn’t handle. It was in those moments, however, that I broke down and told them I was simply trying to help my parents. I didn’t fully understand the cause of our family’s money issues. I do recall that my dad lost his job at the marble quarry due to layoffs, and I suspect that that was a large part of the problem. However, I don’t recall any particular cause other than that. Now, don’t get me wrong, my dad was a hard worker. He was educated, and he wasn’t too proud to take any job. He did what he had to do to put food on the table. There were no amounts of hours that he wouldn’t work to get things done. He wasn’t perfect…but he wasn’t lazy. Looking back, as I type this, I realize that a lot of his frustration (which he took out on me and my mother) were due to his perceiving that he wasn’t living up to the status of what he perceived a father should be. As I type these words, I can’t stop the tears from flowing from my eyes because I can envision myself being in his place under those circumstances. For the longest time, I resented—no, I hated—him for that. Thankfully, I have since forgiven him because, although I don’t condone being the physical and emotional outlet for his anger and frustrations, I can understand. It wasn’t too long after this point that my parents split up and went their separate ways—as separate as they could be with two children, anyway. There was coordinating the drop-off point of “half way between ‘my house’ and ‘your house,’” and “it’s ‘my’ weekend.” However, it did seem as if my dad went his way more than my mom was able. She had custody of my sister and I while my dad remarried 6 months later to a lady with a young son. During this period, for the most part, it was just my mother, my sister, and me. My mom was doing what she could in order to support the household. There wasn’t any alimony or child support. Occasionally we would be “blessed” with some money from my father, but that didn’t happen very frequently. It was during this period that money was really tight. We are talking “do we pay the power bill this month or do we keep the water on” kind of tight. I think my entire existence during middle school and high school was mostly cereal, milk, and peanut butter sandwiches. One would think we were constantly stocking up for a snow storm (in Alabama, the population rushes to the store for bread and milk at the mere threat of a storm). I recall one time when I took all of the food we had in the house and I put it all into one cabinet to be funny. To this day, I feel bad about doing that because my mom was doing the best she could. Living through this experience was yet another part of my life that shaped my view on money.
Travis M. Sherman Retirement Income Consulting LLC
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Chapter
THREE the best christmas present ever
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the best christmas present ever
C
hristmas 1990 was probably the best Christmas ever in regards to getting a gift that literally changed my life; in fact, I still consider it a major factor of impact on my life. My mother scrimped and saved up and surprised me with a 10-speed bike. It was underneath the Christmas tree when I stumbled out from my bedroom. It was a Huffy from Walmart, but I didn’t even care. It was a bike! At the time, I didn’t even know it was a cheap bike and I didn’t care. It was freedom! There wasn’t anywhere I couldn’t go. To a boy of 14, it was amazing!
Travis M. Sherman Retirement Income Consulting LLC
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Travis M. Sherman Retirement Income Consulting LLC
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Chapter
FOUR how in the hell did we not die or kill ourselves?
Travis M. Sherman Retirement Income Consulting LLC
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how in the hell did we not die or kill ourselves?
A
s I write this today, I look back on several episodes in my youth and wonder, “how in the hell did I manage that…on that bike…and survive? How in the hell did we not kill ourselves?” My “partner in crime” Jason Young and I would often ride our Walmart specials from Sylacauga to Wind Creek State Park or from Sylacauga to the top of Cheaha Mountain or to Bull’s Gap, which are not 4- or 5-mile trips…we’re talking 50 or 60 miles. We may have had a water bottle with us and we may have even had a dollar combined between the two of us, but we didn’t know anything about hydration or the need to eat while riding to keep our energy levels up. I guess we were too stupid to know any better, which is ultimately what makes it fun. Jason and I would simply leave a note on the table that read, “Hey mom, riding to ______. Not sure when we’ll be back.” Some days, I’m not sure if my mom wanted to hug me when I got home or strangle me. I truly believe that most adults have simply forgotten how to let go and to be kids again. They get tied up in the rat race of life and simply forget the youthful exuberance that they once possessed. This is sad. The worst part is that they don’t realize it doesn’t have to be that way—that there is a way they can go out and attain that energy and begin enjoying life again. I witness this every time I get out on my bike to experience a piece of youthful exuberance. These days, people are so aggravated with life that they take it out on the person riding a bike or out for a jog, or even the person who inadvertently cuts them off in traffic. I believe most of this frustration originates from trouble with money and finances. I was once at a talk where the speaker asked the crowd a question: “Would you rather have a million dollars or a family that loves you?” The people in the crowed answered, “a family that loves us.” He followed it with, “Then why are you working 40, 50, or 60 hours a week chasing money and being frustrated with finances and trying to keep up with the ‘Joneses’ with their new cars and bigger houses? Are you really working to support your family or are you simply trying to maintain a lifestyle?” In my day-to-day conversations with people about obtaining financial freedom, I’ve discovered that although many people say that they want to have financial freedom, their actions say otherwise. They have the big house, the nice cars, the gadgets, and the electronics. They look rich, but that’s where it stops. This kind of lifestyle leads to frustration because people feel like they’re on the proverbial hamster wheel because they’re living a “normal life”. A “normal life” is one that is filled with frustration that they take out on whoever they see. By “normal life” I mean what Ellen Goodman said about normal: “Normal is getting dressed in clothes that you buy for work, driving through traffic in a car that you are still paying for, in Travis M. Sherman Retirement Income Consulting LLC
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order to get to a job that you need so you can pay for the clothes, car and the house that you leave empty all day in order to afford to live in it.” I recall a conversation I had several years ago with Lisa M in which we were discussing her beginning to save money so that she could eventually stop working for money and have money start working for her. She pointed out the window and said, “Do you see that boat out in the parking lot? I can’t do anything about saving money until I pay that off.” Sadly, I see situations like this too often. The one thing that I ask people from time to time (which doesn’t win me any friends) is, “Who else spends all of their money on “toys” and nonsense as soon as they get it?” The answer? Little kids. Sadly, too many adults seem to think their money is burning a hole in their pockets and so feel that they have to spend it as fast as they make it, not bothering to save any or, as I joke with my buddy, “You must be allergic to money because you seem to get it away from you as quickly as possible.” This kind of behavior requires a hard look in the mirror, and some questions you must ask yourself include, “Are you spending more on your monthly cell phone bill with data plans than you’re saving? Is your car payment higher than your monthly savings?” If that’s the case, then financial freedom may not be something that you truly value. Sure, people say that they want to be financially free, but their actions say otherwise. If people would only realize that if they saved a little bit of money each month, earned a decent rate of interest, and protected themselves against losses, then there would be a time where they’re no longer trading their time working for money because instead their money works for them. Then, when the interest being earned off the money that they have saved is more than what they require for monthly expenses, they’re done! They’re job optional. They may choose to work, but they don’t have to. They can do what they want, when they want, and how they want. They can literally rediscover the carefree days of being a child and begin enjoying life again instead of being beaten down by it. During this time of falling in love riding a bicycle, I came across a place in Sylacauga that changed my life. It was called “Sylacauga Cycles” and was owned by Perry Clark. It was here that I met people like Perry, Denis (who would eventually become a brother-in-law), Billy, Fred, Jerry, Elmer, and a few others. These guys were older (to a 15 year old, 25 or 30 was considered “old”) and took me under their wings and became positive figures in my life. We would ride bikes all over the place. They would take me to bike races and to triathlons. They would give me a few dollars here and there to help with my race entry fees. These guys were amazing people, acting as father figures. Words can’t express my gratitude to and love for these guys, nor can I express what they have meant to me, then and now. This was really a great time in my life. The bike gave me the means to escape, and bike racing along with running cross country track was the perfect outlet for someone who is Travis M. Sherman Retirement Income Consulting LLC
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“situationally extroverted” (extroverted in situations that warrant being outgoing, like at the financial seminars and workshops that I teach today but who prefers the solitude of being alone). The bike allowed me to simply be with my thoughts when I wanted to be alone and it allowed me to link up with others for “group rides” when I wanted to be around others. The competitive aspect of my bike activities all helped satisfy my competitive spirit and give me an outlet for my feelings—anger, resentment, frustration, etc.—in a positive way. The more I rode, the more levels I moved up, which allowed me to start competing against better and better people. Soon, the hard work and the hours and the miles of training were rewarded with race wins. This propelled me to even higher levels, and I was fortunate and blessed to have sponsors who helped me spend a few years traveling around the country racing nationally as well as in Europe. My college “career” can be best summarized as follows: It took me 5.5 years to finish up a 4-year degree in marketing because my training for cycling took precedence over a jampacked schedule of classes. The schedule in the fall quarters would be a bit more packed with classes because that was the “off season,” whereas the winter and spring quarters would see my course loads go down because training was ramping up and races were beginning. I wouldn’t let school get in the way of training because I was going to be a professional bike racer and have “the life.”
I was on the winning team for the ROTC Ranger Challenge Competition. Travis M. Sherman Retirement Income Consulting LLC
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To summarize the summary of my college career: I spent my years completely oblivious to reality in multiple ways. For one, I thought the life of a professional cyclist was a life of luxury (it isn’t), and for another, I didn’t understand just how much trouble credit cards, car loans, and student loans could get me into. All I knew at the time was that I could buy stuff now and pay for it later. During this period, I was technically a professional athlete. I was being paid to race my bikes. I used my business and marketing sense to negotiate with sponsors to give me money, bikes, and even an apartment so that I could travel around the country with my bike. I would participate in high-caliber races in Oregon, New Mexico, Arizona, Massachusetts, Vermont, Wisconsin, Pennsylvania, and New York as well as local races in the southeast. I eventually made it over to Europe to race. I was filing tax returns as an athlete; imagine bleached blond hair and earrings (just to agitate my dad) to complete the picture. Afterall, it was the late 90s, and the “Back Street Boy” look was all the rage. I guess on one hand I was doing what you’re “supposed” to do as a young person, but on the other, I was being irresponsible with my money because they don’t teach you about money in school. Even today, when someone tries to impress me with “I have a degree in finance,” my reply is “And?” I took finance classes too, but they don’t teach you about the dangers of debt and credit or the value of creating financial freedom. They teach you about leverage, using other people’s money, and they make you memorize formulas that are immediately forgotten once the final exam is over. The only school that gives you true money lessons is the “School of Hard Knocks” where the money needed to service the monthly debt payments is higher than the money coming in the door. For some reason, most humans seem to want to experience this lesson themselves and don’t take the warning of others who have already gone down the path. I guess it’s the hubris of “this won’t happen to me”; that is, until it does.
Travis M. Sherman Retirement Income Consulting LLC
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Chapter
FIVE december 31, 1999, at 1:15 p.m. in austin, texas
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december 31, 1999, at 1:15 p.m. in austin, texas
S
everal key moments in my life have changed its trajectory for the positive. What happened in Austin, Texas, was one of those pivotal moments that I absolutely wouldn’t change even if I could do it all over again. What day was it? It was the day that I was nearly killed. However, someone telling me what my future would turn out to be as a result of what had just happened as I laid there in a hospital bed would be a tough sell. “Yeah…sure…morphine please.” My friend Mark Peterson and I decided to drive from Auburn, Alabama, to Austin to visit my good friend Chad Brown. It was the turn of the century: computers were going to fail, and things were going to go to hell in a handbasket, but the party was going to be a good one. We were going to party like it was 1999 (what a contrast to today, where the goal is to simply be in bed by 9). After a morning of playing on the PlayStation, we decided to “kit up” (vernacular for putting on our cycling clothes) and go for a ride. It was a beautiful day in Austin. The three of us were riding our bikes and having a great time. Freedom! We rode up a hill and crested the top. Just as we crested the top of the hill and starting our downward trajectory, a large car passed us, which ordinarily wouldn’t have been a big deal. The problem was that as we were almost reaching the bottom of the hill, the driver decided to stop the car in the middle of the road to do a U-turn. With nowhere to go, I slammed into the front quarter panel of the car (my quadriceps slammed into the side of the car) and I went flipping through the air. It was only by God’s saving hand that I landed on my feet. Had I not landed on my feet, I wouldn’t be typing this today. I would have been on the opposite end of the old saying, “It’s better to be seen than viewed.” Don’t tell my parents, but I also wasn’t wearing a helmet (after all, it wasn’t cool or “Euro” because European bike racers didn’t wear helmets back then). There I was, lying in the road. My knee was split wide open, and I couldn’t move my legs (I couldn’t move my legs for months after the accident). I was in very bad shape. But, on the bright side, after I was released from the hospital later that day, I was on some very powerful painkillers, so I still went out and partied on 12/31/1999 like it was 1999. When people asked me what happened that I needed crutches (I had the crutches set higher than normal so that I could move by supporting my body weight with my arms and shoulders when moving), I simply told them that it was a sky diving accident from earlier in the day. The next day, I woke up to a very sore body. On top of that, the windows of my vehicle had been busted out and everything inside had been stolen. My poor buddy Mark had to drive us Travis M. Sherman Retirement Income Consulting LLC
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all the way back to Auburn with broken windows and a guy too doped up to drive. Needless to say, the year 2000 wasn’t off to a great start. Earlier I mentioned that this experience is one that I wouldn’t trade for anything. “Travis, how in the world can getting hit by car, almost getting killed, paralyzed, etc., be something you wouldn’t trade?” A few weeks before that trip to Austin, I graduated from Auburn University. About a week before graduation, I met Jennifer. Jennifer and I started dating, and 2 years later we would get married. Had I not been hit in Austin, chances are that I would never have slowed down my bike racing and pursuit of a career as a professional bike racer, which means that Jennifer and I probably wouldn’t have gotten married that in turn would mean that I wouldn’t have been blessed with my two amazing daughters, Anneliese and Alexandra, or an amazing set of in-laws, Ann and Frank. My point in sharing this story is to illustrate how my accident set my life on a positive trajectory. I met my future wife. I stopped my pursuit of professional bike racing, which I’m thankful for because the life of a professional bike racer can be summed up as showing up to town with $2 in your pocket, looking for a place to stay (sleeping on a floor or a couch), and then hoping to scrape enough money together to either make it home or to the next race. Basically, you’re slightly above homeless, flat broke, and relying on sponsors or odd jobs to get by. In other words, it’s not a very glamorous or viable pursuit. The accident, while painfully frustrating at the time, is what led me to my current career path. It is also what lead me to take a very hard course in the finance department at the “School of Hard Knocks” and come out the other side with a better understanding of money, how it works, and how it’s better to have money working for you (compound interest) that working against you (debt). During my 5.5 years at Auburn, I fell into the trap that I suspect most people fall into: I traded my future for a free university t-shirt or towel. Or, in other words, I accepted credit card and subsidized student loans so that I could theoretically have a future. A subsidized student loan is a fancy way of saying that the government will charge no interest until you graduate. There used to be stations set up on college grounds—though I’m not sure if they’re still allowed—where students could go and trade their future for a free t-shirt. This was the beginning of the “NINJA Loan Days” or “No Income No Job Applications,” which plunged students into debt before they even had jobs. This was the predecessor of what happened during the housing crisis, during which people could get million-dollar home mortgages without proof of income. There I was, the spring of 2000. I had a broken body that could barely move without pain. I had no job and no prospects for a job. I had all sorts of debt: credit card, car loan, student loan. Oh yeah, and medical debt. All these people seemed to want their money each month. Travis M. Sherman Retirement Income Consulting LLC
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The problem? I had no job and no income. I didn’t know what disability insurance was. I didn’t know what accelerated benefits on life insurance policies were (this is where they pay you a portion of the death benefit if you’re unable to perform 2 of 6 activities of daily living), and I didn’t know what uninsured/ underinsured motorist coverage on my auto insurance was. I didn’t know what any of this was and thus left myself financially exposed. The result? I received a lot of harassing calls from creditors. It was an “afraid-to-pick-up-your-phone” kind of harassment. It got so bad that they found out where my mom lived and her phone number and then harassed her about my debts too. I too fell into the “it won’t happen to me…I’m smarter than they are because I’m better at managing my money trap.” But guess what? I walked right in and bought the tickets for this higher education. My first summer after college was spent looking for a “real” job while cutting people’s lawns and waiting tables at a Lone Star Steak House. All the while, I pursued every “management” job in the paper, all of which turned out to be selling credit card processing machines doorto-door or trying to sell cologne in parking lots. I mean, I tried it all. I was also getting angry because I felt entitled. After all, I had a college degree…wasn’t I supposed to get a good job after getting that good education from a good college because I made good grades? Isn’t that what we are sold early on in school? “Get good grades so that you can get into a good college so that you can get a good job so that you can invest in a bunch of liabilities (house, car, etc.), and then spend the rest of your life paying them off and stressing about money.” They leave the last part out of the sales pitch, but I definitely invested in the liabilities and I believed the first part and thus felt entitled. The problem was, nearly everyone else looking for a job also had a college degree or two. Plus, because most of them took school a bit more seriously than I, most of them had better grades. So, there I was, looking for a career and waiting tables. Fortunately, I had enough good sense to take nearly all of the money I made from waiting tables and use it to pay off debt. The benefit of waiting tables is that you get cash money in hand every day, so I hustled. I would clock in and clock out so that I wouldn’t work too many hours (they sent you home if you worked too many hours). Whenever I didn’t have any tables to wait on, I clocked out. I was hustling at the restaurant all the time because I was motivated to stop the phone calls and get debt out of my life.
You either climb over the mountain or complain about it being in your way. It’s a choice. During this period, I was blessed that Ann and Frank ( Jennifer’s parents and my future inlaws) were very supportive of me and let me stay in the spare bedroom rent free. This helped a lot. I was also very blessed that the person who hit me had auto insurance and that the Travis M. Sherman Retirement Income Consulting LLC
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insurance company was very accommodating when settling the claim, which only took about 9 months. My only goal was to get some money to get me above water so that when I told the insurance company that I would take $X dollars (enough to pay my remaining credit card balance, my student loans, and enough to buy myself a new bike) or I could get an attorney and go for 5 times that amount, they asked where to send the check. As soon as the check arrived, I deposited the check and paid off my debts. This period taught me some very tough lessons regarding money that still impact me today. I guess that I was so scarred from this episode of my life and the feelings of worthlessness that I never want to go back to those feelings. I avoid going into debt because I’m afraid of it. Whenever I get money, my first thoughts are, “Where can I invest this or save this” (making my money work for me)?. Even with substantial savings today, I’m still afraid to spend money, so I practice the art of “delayed gratification,” which is simply putting off major purchases even though I can afford them. Whenever I teach a financial course at church or talk with younger people just starting out in life, I share my experiences with them so that they hopefully follow a much wiser path than I did. In September of 2000, I was hired at my first real job as a loan officer at APCO Employees Credit Union. On one hand, I was glad to have the job. On the other hand, I hated every day of it. I was miserable. I was miserable because I felt entitled to a better type of job (with a higher salary) even without paying my dues. Looking back on it now, I do wish I could do a “Back to the Future” type of thing and knock some sense into the younger me. However, at 24, I’m sure it would have been one of those, “Who the hell are you old man?” situations. My goal for that first job was to simply make it to the 1-year mark so that I could get some experience on my resume and move on to more grandiose things. For some reason, I thought 1 year was the magic number. I don’t know why…it just seemed like a nice number. It was at APCO Employees Credit Union that I learned a valuable lesson about the stock market and the ramifications of having all of your money in the stock market when you’re within 5 years of retirement and in the first 5 years of retirement. It was also here that I discovered the career path that I wanted to pursue. Jim P. was a senior loan officer and loan department manager at APCO CU. From what I could tell, he had spent his entire career there and wasn’t happy. Before I started working there, he was counting down the days before he could retire like an inmate counts down the days before he or she is released from prison. He was miserable, but felt he was too old to go anywhere else. He seemed to be bitter, and his bitterness seemed to be compounded by the events of 2000, which are also known as the “Dot Com Bubble.” You see, Jim had been caught in the excesses of the 90s, when money seemingly doubled every day in the stock market. He also got hung up on the “fear of missing out” and was afraid to put some of his money into safer alternatives that would provide principal protection and a protected lifetime income. He listened to his investment guy (I can’t remember who he said his “guy” worked for. All I recall Travis M. Sherman Retirement Income Consulting LLC
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was it was one of the big name brand companies that advertise alot. It doesn’t really matter because the result was the same) and so didn’t take any of the money off the table because “why would you do that when the market is returning 20%+ per year?” Jim let greed and the fear of missing out derail his entire retirement. I’m also sure his “advisor” talked him out of doing so because that would have meant fewer assets under management, which would mean less in fees to the advisor. As a result, Jim lost (based on what he said) around 50% of his portfolio, which pushed his retirement back by at least 10 years. There he was, ready to get out of a job he wasn’t passionate about only to be faced with the reality that he was going to be stuck there for a longer period of time. His “investment guy” probably even reassured him by saying, “Jim they’re just paper losses...the market will come back…you just have to ‘ride it out’” (all while failing to acknowledge the fact that Jim was working at a job that he wasn’t passionate about). The problem is that people tend to forget about lessons like this. They get caught back up in the euphoria of rising markets and get locked into the fear of missing out again and the greed of big returns. It’s almost as though 2000 was an event in history books. They forget the pain and repeat the mistake (i.e., the definition of insanity). In 2006, when I was with Principal Financial (more on this in a minute), I met a gentleman named Wayne W. at a small financial workshop that I did. Wayne was an awesome guy. He too was close to retirement and was counting down the days, looking forward to retirement. Wayne lived through the Dot Com Bubble, and his portfolio also took a beating. However, by the time I met him, his portfolio was on the road to recovery. I tried to get him to de-risk some of his portfolio, but he refused. He was caught up in the markets are “doing pretty good” spiel and wanted to “wait and see what the market was going to do.” You probably already know what the markets did in 2008: they crashed and his portfolio lost nearly 40% its value. Wayne later told me that he wished he had taken some risk off the table because when the markets declined, which they did in a hurry that year, he was afraid to spend any money from his portfolio to support his retirement spending, which forced him back to work. Unfortunately, he learned the lesson that the markets don’t always go up and can come crashing down. He too let greed and the fear of missing out derail his retirement plans. The problem is that in 2020, after a historic and prolonged bull market, I’m afraid that people are forgetting the lessons learned by others the hard way in 2000 and 2008. People have forgotten the pain of seeing those statements painted in red. People come to my financial seminars, express how fearful they are of a market crash, yet don’t want to take any money off the table because they fear they’ll miss out on something big, or they want to “wait and see what the market does.” What? Do they want to watch it go up and then come crashing down? And then look for someone or something to blame? Many people have seemingly forgotten that the first rule of investing is to buy low and sell Travis M. Sherman Retirement Income Consulting LLC
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high; no one has ever gone broke by taking profits. However, they have gone broke continuing to ride it out to “see what the market is going to do.” They don’t abide by Warren Buffet’s two rules to investing: Rule 1. never lose money, and Rule 2. never forget rule 1. I often joke with people who want to wait and see what the market will do and tell them to call me the week before the market has a major correction so that we can get their money to safety. My question to you is this: will you call me the week before the market has a major correction so that we can get you money to safety? Or would it be better if we locked in some gains now and created some safety and security for you? One of the frustrating parts of some of my interactions with people is that they have the assets to retire with the lifestyle that they want and retire on their terms, but they refuse to take some of the risk off the table. Instead, they choose to stay at the craps table with a pile of chips, rolling the dice just to see what happens next. What happens next is that the house usually wins, i.e., the markets drop. As Jim Cramer, host of the CNBC show Mad Money says, “Bulls make money. Bears make money. Pigs get slaughtered.” Don’t let greed derail your retirement income plan—especially if you already have accumulated the assets you need to support your desired retirement goals or you’re within 5 years of retirement or in the first 5 years of retirement (known as the “Retirement Red Zone”). Losses in this zone can have devastating and lasting effects on your retirement.
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Chapter
SIX
how it all started
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how it all started
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uring the summer of 2001, I began to get frustrated with my choice of occupation, partly because I was bored and uninspired, but mostly because I wasn’t making that much money. Additionally, the people working at the establishment didn’t really seem to want to be there either, and I thought if this is where this path ends up (miserable and uninspired) then I don’t want any part of it. My wedding with Jennifer was coming up in November and I needed some more income, so it was time to get looking. The guy in the office next to mine was a gentleman by the name of Chris C. He was a “financial advisor” (I’ll explain the quotations in a moment). Great guy. Chris actually set me up with my first investment account, and he looked like he was having fun. He would have people come in, create “diversified portfolios” for them, and help them craft a financial future. The people would leave his office smiling and excited. That’s what I wanted to do! I asked Chris how I could do what he does. He told me what tests I needed to take in order to be “qualified” to be in the financial services industry. Once he told me what I needed to do, I began in earnest. I ordered the study guides and began studying during my lunch break and at nights after work. I went to the insurance class. I passed all of the licensing tests, so I was now “qualified” to take someone’s life savings and create a “Pie Chart Portfolio” (those portfolios that advisors create for their clients that look really impressive) that was at the whims of the market and had no assurances of success. I was a “financial advisor,” which simply meant that I had minimal training in how to help people manage their assets. I had a loaded gun but no training on how to use it. This basically meant that I could take the tangible representation of a person’s life work, also known as their retirement savings, and put it at risk. During my period of studying, I sent my resume to every financial institution in town and was hired by Principal Financial Group. I would later find that financial services companies by in large operate under the “recruit a bunch of people, throw the spaghetti against the wall, and see what sticks” method and then continue repeating the process. They all do this. They’re looking for people who can sell. To prove my point, there is a recent article in Investment News Magazine, wherein one major group decided they were going to begin focusing on advisor training rather than recruitment (https://www.investmentnews.com/merrill-lynchtraining-over-recruiting-2020-176445). Imagine that. A company admitting it should focus on advisor training. What a novel idea! I spent a few years with Principal and was feeling my way around trying to figure it all out (how to be a planner) but not really getting anywhere. I wasn’t given any direction or resources Travis M. Sherman Retirement Income Consulting LLC
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either. The training that we received focused on introducing their product and its features and benefits, outlining the ideal prospect, and where to find the applications. Then they sent the recruits out. This is a summary of how, in a nutshell, advisors are trained. During my years there, I don’t recall ever receiving any training on financial planning, the financial planning process, or anything else that would benefit the client in any material way. It was all sales training or training on new products. This is why the title “financial advisor” has to be taken with some scrutiny; this type of “advisor training” is pretty much the norm across the board. There may or may not be any substance behind the title. From 2001 until around 2006, I grew increasingly frustrated with the financial services industry. There didn’t seem to be any direction or training for new people such as myself. It wasn’t until much later that it was all on you, the advisor, to get that education and training. However, at that time, I felt that I needed a new direction and decided to begin taking accounting classes so that I could get enough credits to sit for the CPA exam. Jennifer was a CPA, and I felt that my becoming a CPA would give me some direction in my career. My end game was to get my CPA certification and apply for the FBI because they look to hire accountants to follow white collar crime. In early 2008, my pursuit of the FBI as a career came to an end. There was a hiring freeze in the federal government, so my interview process was stopped. As I look back now, I can see how God was leading me down the path that He wanted me to go down. God would open some doors and close others. The FBI was a door that He closed so that He could open up other doors. From late 2008 to 2010, I pursued accounting and continued in the financial services field. I was serving clients while at the same time not overly thrilled with being an accountant. The information was awesome but having a “desk job” wasn’t my style. I hate sitting in a chair all day. I also wanted to be on the front end of tax planning (helping people minimize their tax bill) and realized that, for the most part, that’s not what accountants do. They simply take your documents, compile the data, and tell you what you owe or how much you were going to get back. The standard tax advice that was given if you wanted to lower your taxes was to either buy a bigger house, give more to charities, or put more money into your 401(k). There were several instances where I’d sit in on a review session with a tax client (who was retired) of the firm that I was working for and listening as the partner in the firm would go over a retiree’s income tax return. The client, even though retired, couldn’t figure out or understand why their tax bill was either the same or higher than what it was when they were working. After all, isn’t the common refrain often repeated by advisors of all types is that “you’ll be in a lower tax bracket when you’re retired?” The sad reality that I realized during this time is that wasn’t the case for the majority of people. You see, the oft-spouted advice from advisors, accountants, and talking heads on the radio Travis M. Sherman Retirement Income Consulting LLC
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is to put as much money into tax-deferred accounts, such as IRAs, 401(k)s, 403(b)s, SEPs, SIMPLEs, etc. Max them out. Get the “tax deduction” right now (whereas, in truth, it’s only a deferral, so you’re compounding the tax problem to a future date) because you’ll be in a lower tax bracket when you retire and thus pay less tax on that deferred income. The problem is that the people giving this advice, including “advisors,” don’t realize that the money coming out of these plans is taxable AND the income from these plans could trigger taxation on as much as 85% of a person’s Social Security income. In basic terms, this could be pulling out $1,000 from your tax-deferred plan and causing $850 of your Social Security to be taxed as well. Now you have $1,850 going through the tax grid. The amount of Social Security that is taxed is determined by what is called the Provisional Tax Formula, which is calculated by taking 50% of your Social Security income, putting it into the formula, and then adding in wages, interest, dividends, municipal bond interest, pensions, and distributions from taxdeferred plans such as 401(k)s and IRAs. If this amount was over $25,000 for an individual filer or $32,000 for married filing jointly, then Social Security income begins to be taxed. What I found most commonly is that people do not understand what would happen in the future. They would trade short-term pleasure now (tax “deduction”) for a lifetime of pain during retirement (taxes). There is a study with children and marshmallows that basically proves that children would rather have two marshmallows now rather than delaying their gratification and getting three marshmallows later (https://www.psychologicalscience.org/ publications/observer/obsonline/a-new-approach-to-the-marshmallow-test-yields-complexfindings.html). Adults and tax-deferred plans are a lot like this. They would prefer to get the tax deduction now (and the immediate gratification) rather than forgo the tax deduction now in exchange for tax-free income later. Over the years, I have found that people would put all of their money into tax-deferred plans and completely ignore the step of creating tax diversification and putting their money into tax-free plans as well. The two plans that don’t trigger taxes on Social Security (keeping the benefits tax free) are distributions from Roth IRAs and distributions from properly structured plans found in section 7702 of the tax code, which is where you’ll find good old-fashioned life insurance. The distributions from a properly structured life insurance policy are tax free. Now, I’m not talking about your “Grand Dad’s Whole Life” here. I’m talking about the new breed of life insurance that is designed from maximum accumulation with the ability to earn double-digit rates of return, has low expenses (long-term expenses lower than the cheapest indexed funds), and has a distribution method that will absolutely amaze you! At death, the income is passed on tax free (unlike tax-deferred plans), and many of these plans have what are called “Living Benefits” where you can access tax-free money to pay for long-term care– type needs. I’m not advocating that all of your money should go into these types of plans. However, what I suggest is that you take a hard look at including these plans as a portion of your overall retirement plan. The results will blow you away. In fact, the retirement community is finally Travis M. Sherman Retirement Income Consulting LLC
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coming around to understanding that these plans should be treated as a separate asset class that should be included in an overall retirement income. At the time of this writing, I personally own 6 properly structured life insurance plans and have around $350,000 of personal money tucked away into them. I’m not saying this to brag but rather to convey the point that I believe in this strategy as a cog in the overall retirement income plan enough that I actually have money in the game. If you peel back the layers, you’ll find that many “advisors” touting retirement advice don’t actually utilize the tools or products that they’re showing you. Honesty, I’ve realized through many conversations with them that most don’t have two nickels they can rub together and that being a “financial advisor” is just another stop along their journey of job hopping.
Let me help you protect you family with life insurance instead of Go Fund Me. If you want to avoid the mistakes of the people that are “401(k) rich” who ultimately realize that they’re going to pay a lot in taxes when they retire, then I suggest that you have an overall financial review done to determine how much you should have in tax-deferred plans and how much you should have in tax-free plans so that you can maximize tax efficiency and remove “Uncle Sam” as a beneficiary of your retirement plan. Anyway, after a couple of tax seasons of cranking out 1040 forms and trying to explain to people why their tax bill didn’t go down when they retired, I l decided that the job wasn’t for me. God was opening up a new door for me…one that would lead me to the discovery of how I could help people safely grow their money, create tax freedom, and create a worry-free retirement for themselves and their family.
Travis M. Sherman Retirement Income Consulting LLC
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Chapter
SEVEN a hot summer day, a flat tire, and a phone call
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a hot summer day, a flat tire, and a phone call
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t was a hot summer day in 2010, and I was out on a bike ride, contemplating what I was going to do with my life. At this point, I hadn’t been saved by the grace of God nor had I invited him into my life, so I was just going through life on my own. I now realize that He was with me the entire time…tapping on my shoulder to get my attention and then eventually hitting me with a figurative 2 x 4 to get my attention because the gentle taps on the shoulder weren’t working. Jennifer and I had our first child, Anneliese, and I was still floating around trying to figure out a true direction in life…my calling. What was I being led to do? What was my purpose? As these thoughts were running through my head, I heard a sound familiar to all cyclists: the innertube of my tire was punctured and the pssst of air as it escaped the tube. A flat tire in July in 100-degree heat...damn! I pulled over, and as soon as I do, the phone rings. Normally I wouldn’t have heard the phone ring and then I’d delete the message as soon as the telemarketer or recruiter uttered the first word of their sentence. This time, however, I answered the phone and immediately realized it’s a recruiter. Damn. How do I politely get off this call? “Ma’am, I have a flat tire. Can you call me back in 3 hours?” That should do it. Three hours later, the recruiter calls back to invite me to a meeting to meet somebody named Clayton. “Sure.” After all, I had nothing else going on. I didn’t know it at the time, but this was God opening the door and me walking through it. What I learned at that meeting changed my life. It’s what started me on the path to enlightenment and helped me realize the need to go out and obtain a self-directed education and truly become a student of the financial services industry and a retirement income specialist. The concept that I learned that day was so life changing that my first thought was, “why was I never shown this?”; the answer I arrived at was “because the company that I was with didn’t sell this type of product.” This concept was something that I had to show my clients to at least let them know about its existence. This concept was something that completely inspired me into a new level of motivation and direction, giving me the ability to help people create a worry-free and a stressfree retirement!
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Travis M. Sherman Retirement Income Consulting LLC
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Chapter
EIGHT the two approaches to creating retirement income
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the two approaches to creating retirement income
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hen it comes to retirement income planning, there are two basic approaches: a safety first approach and a probability-based approach. The problem is that people (advisors) view these approaches as an all or nothing, take-it-or-leave-it method of retirement planning. The default approach that a majority of advisors subscribe to is the probability-based approach, which is otherwise known as “traditional financial planning.” I personally believe in a “hybrid approach” wherein both approaches are combined, depending on a particular client’s needs. I’m completely product and approach Agnostic. The probability-based approach can be best summarized as creating a diversified portfolio of cash, stocks, bonds, and mutual funds based on a person’s risk tolerance. They then create a pie chart portfolio that looks really pretty. The retiree then takes systematic withdrawals from this portfolio and if historical averages pan out (with a little luck thrown in), then things “should” or “probably” will work out. They then use something like Monte Carlo simulations that goes through thousands of sequences and potential outcomes to give you a sustainability score. For example, they’ll say something to the effect of “based on this portfolio and historical returns, you’ll have a 90% probability that your portfolio will sustain your retirement until age 90? Are you OK with this?” This is what most advisors are taught and what the “traditional” approach is. But here are a few problems with this approach: what if the returns don’t come? What if I live beyond 90? What happens if things don’t work out as planned and my spouse passes away and their portion of Social Security goes away? What if inflation is higher than what was modeled? The problem with this approach is that there are no guarantees. It’s even written in the fine print of “past performance does not guarantee future results.” In other words, you’re on your own (but your “pie chart portfolio” looks good on paper, doesn’t it?). This approach also relies on accurate inputs of things such as date of death, inflation, income needs, how long you’ll live (longevity), as well as a host of other inputs. Garbage in = garbage out. But what about the 10% failure rate? Would you be excited to get on an airplane only to hear the pilot come on the intercom and say, “Because we don’t know how long we are going to be in the air (how long you’ll live) or what the winds will be like (inflation, taxes, etc.), there is a 10% probability that we are going to run out of fuel (money) before we get to the final destination (the end of your life). In other words, there is a chance that we may crash.” Would you take that trip, or would you want some guarantees and assurances that you’ll make it to the end with plenty of fuel (money) and no worries? Even though I’m jumping ahead a bit, this is the difference between a probability-based approach to retirement that has no Travis M. Sherman Retirement Income Consulting LLC
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guarantees or assurances and a safety first approach to retirement that does have guarantees and assurances. Unfortunately, this is the retirement income approach that many people unknowingly subscribe to. They look at the beautiful pie chart portfolio and the returns that the advisor is showing them, and they sign up for the trip. The problem is that if the advisor is wrong, it’s the client who pays the price by running out of money or losing a large portion in the market. The Probability Based approach was how I was originally taught to approach retirement planning—just like the majority of the folks out there touting retirement advice. There is a different approach and there are different tools you can use to create a retirement income plan. This different approach is what I was exposed to the day I met with Clayton. That 1-hour-long meeting is what set me on a path of seeking knowledge and truly educating myself on how to become a comprehensive retirement income consultant. Through my studies, I would later learn that this approach is called the safety first approach, wherein you cover your living and lifestyle expenses with guaranteed income from Social Security, pensions, and protected lifetime income from products that have withdrawal guarantees. The rest of your money, money used to fund luxury spending (non-essential spending) can be put into the stock market. The overall premise is to make sure that when you retire you’ll have guaranteed income for life to pay the bills (living expenses) and do the things you want to do in retirement (lifestyle expenses) regardless of what happens in the stock market or how long you live (whether it’s to age 83, 93, 103, or 123). The rest of the money can be put into the stock market to fund luxury expenses such as extra vacations, new cars, etc.
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Chapter
NINE the power of indexing and protected lifetime income
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the power of indexing and protected lifetime income
D
id you know that there are products that will allow you to participate in the growth of a market index, such as the S&P 500, but without participating in the losses? Did you know that there are accounts where you can combine this growth feature with a withdrawal guarantee that would allow you to have a protected lifetime income that would last as long as you and your spouse (if you’re married) lived and would pass any money left over on to your beneficiaries? Did you know that there are accounts that will give you a contractually guaranteed income even if the account value never grows at all? By this I mean that each year you defer taking income, the income will grow by a contractually guaranteed amount, even if your actual account value never grows because of bad market performance. Best of all, you still have access to the majority of your money. By combining these features, it’s possible to create a truly worry-free retirement! What is this tool? It’s called a fixed indexed annuity. I know, I used the “A word.” But here is the reality: annuities are the only retirement vehicle that can use the word guaranteed. Two things to take note of here: 1) I’m not advocating that you put all of your money into these products (unlike many other agents or advisors) and 2) annuities aren’t created equal. Some are good, some are bad, and some are ugly. The other thing is that I’m not recommending these because I’ll get a big commission. Yes, I get a commission. However, I end up making far less money on setting you up with an annuity than I do using the traditional approach with investments or “assets under management.” All I want to do here is to simply suggest that you consider this tool; I’m passionate about it because of what it does and can do. I personally have over $100,000 of assets inside annuities, and my father-in-law has nearly $1,000,000 in annuities from which he is receiving a steady monthly income and has been for nearly 10 years. Should he predecease my mother-in-law, she’ll continue to receive the EXACT SAME monthly income until she passes away. Then, whatever is left over will be passed on to my wife and her two sisters. Before I go on, if you say, “Travis, I don’t like annuities. I’ve heard they are bad,” then you’re also saying that you don’t like Social Security and you’re glad that your company doesn’t offer you a defined benefit pension or that you’d be happy if they would cancel your defined benefit pension if you’re fortunate to have one because, guess what? Those are annuities. Annuities simply provide you with a guaranteed stream of income for life. The income you may receive from a company pension is an annuity. The income from Social Security is an annuity. I have yet to meet a retiree or a future retiree who was angry have a source of guaranteed income. Imagine being able to know exactly what your income will be 2, 3, 5, or 10 years down the road! Imagine knowing that you can take this income without fear of running out in your Travis M. Sherman Retirement Income Consulting LLC
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old age! Imagine the comfort of knowing another check is coming even if your account hits $0.00! Imagine never having to worry about the stock market again! That’s what this tool will do for you. To get a more in-depth education, including the pros and cons of annuities, the different types of annuities, and the features and benefits of annuities, please visit my website www. annuity-specialists.com. On my website, you’ll find a wealth of resources and videos for you to review. In a quick nutshell, here is how the annuities that I recommend work: The growth of the account value is based on what is called the “Indexed Strategy” or “Indexing.” Simply stated, these accounts base the growth of the account value on a market index such as the S&P 500. You won’t get all of the gains of the index, but you also won’t participate in the losses. For example, if the index is up 10%, you may only get 6%. However, once you earn that 6%, it becomes part of your protected principal. If next year the index is up another 10%, you may again only get 6%. Again, once you earn that 6%, it becomes part of the protected principal. Let’s say the index drops 20% in the third year; you’ll simply gain 0% for the year, and if the index is positive in the fourth year, you’ll be right back to making money. Imagine if you’d had your money in this type of account during the 2000-2002 “Dot Com” bubble when markets declined around 50%...you’d have lost $0. Then, during the recovery years between the “Dot Com Bubble” and the “Housing Bubble” you made money. When the “Housing Bubble” hit, you again didn’t lose anything. This is the power of the indexed strategy! Now, let’s take it one step further and add an income guarantee. Imagine having an account that, regardless of what the market did or didn’t do, grew by a contractually guaranteed amount? Meaning that even if the account grew at 0%, this particular product had an income or benefit base that grew at 7% or 8% each year during the deferral years. This means that if you deposited $100,000 and deferred taking income for 10 years, your income base or benefit base (the basis on which your lifetime income is based upon) is guaranteed to be $200,000, even if the account value was still at the original $100,000. Now, this $200,000 isn’t something you can just walk away with. It’s simply a basis from which your guaranteed income for life will be paid. The value to you is that you’ll know exactly what your income will be when you are ready to take the income. The insurance company will simply multiply the distribution rate for someone your age by the benefit base amount to determine your guaranteed lifetime income. For example, let’s say that your benefit base is indeed $200,000 and the distribution rate that the insurance company will pay you at is 5.5%. This means that your guaranteed lifetime income will be $11,000 per year (5.5% x $200,000). Let’s say that you decide to wait another Travis M. Sherman Retirement Income Consulting LLC
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year before taking income and the insurance company has a guaranteed growth of 7.2% compounded on the benefit base and increases the withdrawal rate by .1%. The new benefit base is now $214,400 and the withdrawal rate is now 5.6%. Your guaranteed income for life is now $12,006 per year ($214,400 x 5.6%) for life. Even if the account goes to $0, you’ll still receive those checks. Imagine going through the “Lost Decade” of the 2000s without losing sleep over losing money or worrying if you’ll have enough income to retire—that’s what this product can do for you and why I’m so passionate about it as a tool. Disclaimer: the above example is purely hypothetical and is not specific to any one particular annuity or company. It’s just a simplified top-level view of how the annuities I like work. Any similarities to a particular annuity are coincidental. Annuities are insurance products and are subject to state insurance laws and regulations. Annuities are designed to be long-term investments and may not be suitable for all investors. Annuity guarantees are based on the claims-paying ability of the insurance company. Annuities can involve charges such as administrative fees, annual contract fees, rider fees, mortality and risk expense charges, and surrender charges. Early withdrawals may be subject to surrender charges and can impact annuity cash values and death benefits. Withdrawing more than the guaranteed annual withdrawal amount on an annuity with an income rider can reduce the future guaranteed annual withdrawal amounts. Taxes are payable upon withdrawal of funds. An additional 10% IRS penalty may apply to withdrawals prior to age 59.5. Annuities are not guaranteed by FDIC or any other governmental agency and are not deposits or other obligations of, or guaranteed or endorsed, any bank or savings association. When considering replacing or transferring out of an annuity, it’s important to understand what costs may be incurred, such as surrender charges and the loss of death, tax consequences, and/or income benefits. Guarantees are based on the claims-paying ability of the insurance company.
Roger and Joyce Y came to one of my workshops. They had great jobs and they wanted to retire in 5 years. They had a combined $600,000 in their retirement accounts. I was able to show them a plan in which we would reposition only around $225,000 of their portfolio into the fixed indexed annuity with a withdrawal guarantee. Once we did that, they both knew exactly when they would be able to retire, and they knew exactly what their minimum income would be. Best of all, they didn’t have to worry about a market correction wiping out their retirement and derailing their plans. Joyce actually stood up and said, “You know, I could go around this entire neighborhood and ask my neighbors if they knew exactly when they would be able to retire, and I bet none of them could tell me. But I know…I know when I’ll be able to do it.” That is some powerful stuff!
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Chapter
TEN
my simplified process
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my simplified process
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hen I meet with individuals, I tell them from the start that I’m not here to try and sell them anything or convince them to do anything. My role, as a consultant, is to simply educate and bring back options and then let them decide which option they feel best fits them. I also let them know that staying where they’re at is also an option and that’s okay too. I do, however, let them know that deciding to stay where they’re at (often disguised as “I want to think about it”) is a choice to remain fully exposed to the stock market risks, accepting the fact that they’ll probably end up paying more in taxes than they otherwise should have had to pay, and that things may or may not work out in their favor. In other words, “I have to think about it” does nothing to solve their underlying problems in regard to their retirement income plan nor can it alleviate their fears. I’ll tell you, reader, the same thing. I’m not trying to sell you anything. I’m simply sharing my life and my passions with you and what I’ve learned over the years and letting you decide if it’s for you or not. The process I use is fairly simple because if it’s not simple, it won’t get implemented. It does no good to you or me if I make this process complex to the point that nobody can understand it. If you don’t understand it, then you won’t implement it. So, here is my simple process:
1. What are your goals? How much do you need/want to have when you retire and when do you want to retire?
2. What sources of guaranteed income do you have available to you and what are the amounts (pensions and Social Security)?
3. What is your income gap? (Desired Income – Guaranteed Income = Income Gap)
4. How do you want to fill this income gap? Do you want to rely on the stock market, do you want guarantees, or a combination of the two?
a. How you answer this helps me determine the combinations of approaches and specific products that will do the job and will allow me to make specific recommendations for you to consider.
b. I’m product and approach agnostic. I’ll simply educate you on what’s available and provide you with options.
5. Once we have created the ability for you to retire and stay retired, we need to remove “Uncle Sam” as a beneficiary of your retirement by creating a tax-
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diversified approach using Roth IRA, Roth Conversions, and distributions from properly structured life insurance plans under IRC Section 7702
6. How do we address the following (note that this is list is not exhaustive list and is in no particular order) risks?
a. Loss of spouse
b. Longevity (living longer than planned)
c. Inflation d. Markets e. Tax
f. Long-term care
7. Estate Planning: How do you want to be remembered when you’re gone? Do you have any charities or causes you’re passionate about? Who do you want to get your remaining assets when you’re gone?
To help my clients achieve the most optimal retirement outcome possible, I have some pretty neat software that I use. For example, I have a Social Security Optimization software that helps me show you the most optimal time for you to file for Social Security so that you can get the highest lifetime benefits possible from Social Security. It takes the guess work out of the filing decision. The software takes your numbers and then determines the best time for you to file for benefits as well as alternative scenarios to consider. I’ve had hundreds of people tell me how useful this one piece of information was. I also have programs that can help me provide you with information on the best products or approaches to use for your unique situation. We also have a variety of tax software to help structure tax efficient retirement strategies as well as software that can help you determine optimal asset allocation and asset location for your retirement savings. So, while my process is relatively simple to explain, the processes in the back ground are robust. For more information on this, you can go to my website at www. travissherman.com and go to resources and video library. Here you can watch short videos on the different tools that I can use to help you create a worry-free retirement. Here is a quick example of the average couple who I’d see at a review session: They are married and each of them are around 60 years old. They’ll have income from Social Security, and they want their money to last as long as they do. Their income needs are modest, and they have around $400,000 in their retirement accounts. They have fears about how to create income with their savings, protect their money from losses, and ensure that their money lasts a lifetime. Travis M. Sherman Retirement Income Consulting LLC
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The traditional approach would be for them to put their $400,000 in a diversified portfolio of stocks, bonds, mutual funds, and cash and take distributions from it. There are no guarantees or assurances; they must simply hope for the best. The approach I would take is to first find out what their income needs are each month and when they want to retire. The typical retirement age is 66 with a desired income of around $6,000 per month. Their combined income from Social Security is typically around $3,600 combined. This leaves a shortfall of $2,400 per month that they’ll need to fill with their assets. My next step is to calculate how much money would need to go into an account that has a withdrawal guarantee to fill the $2,400 income gap when they retire. The remaining money can be invested in the market, which would allow them to support a higher level of spending without fear of running out of money when the market is doing well. However, when the market does poorly, they’re still retired without worry of losing their base income. We’ll then look at removing Uncle Sam as a beneficiary of their retirement by creating tax-diversified income using vehicles such as Roth IRAs or Roth Conversions or properly structured life insurance. Our next step will be to address what would happen should one of them pass away. Many people don’t realize that at the death of a spouse, the surviving spouse loses the lower of the two Social Security checks. For example, if one of them is collecting $2,000 and the other is collecting $1,500, the surviving spouse will continue to collect the $2,000 but will lose the $1,500. Where is the planned-on $18,000/year going to come from? We’ll also address things such as what happens if they live longer than planned, or if one of them gets sick before they die and thus requires some form of long-term care, either in the home or in a facility. What happens if inflation is higher than expected or if taxes go up? All of these items and more need to be addressed for a truly comprehensive approach to retirement income. Unfortunately, most advisors are only focused on creating the “Pie Chart Portfolio” and getting assets under management so that they can charge their 1.25% annual advisory fees. This isn’t my approach. I show people how to create a worry-free retirement that protects their assets and income from stock market losses, taxes, inflation, long-term care, loss of spouse, longevity and more through a combination of properly structured life insurance policies, annuities, and the traditional approach to retirement income planning. This is the true safety-first approach and the only worry-free approach to retirement planning.
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Travis M. Sherman Retirement Income Consulting LLC
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Chapter
ELEVEN you can lead a horse to water, but you can’t make them drink
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you can lead a horse to water, but you can’t make them drink
I
was at a leadership development workshop a few years back, and a question was posed to the group: “What about your line of work makes you the most frustrated?” I pondered this question, and a few months ago, I uncovered the perfect example. Perhaps one of the most frustrating parts of what I do is the difficulty of conveying to the people and couples I meet the danger they’re in and how the plan that I have created for them takes away that danger and helps them meet their goals and dreams and eliminates their fears. They tell me what they’re looking for, what their fears and concerns are, and what they would like to see happen with their retirement, but they won’t make any changes. I mean, they’ve “won the race” by accumulating enough assets, but they won’t make a change to protect those assets and, as a result, secure their future. One couple that I recently met with fit this description perfectly. Matthew was close to 65 and was about to retire, and his wife, Lisa, was 60. She wanted to retire at 65 but wasn’t opposed to retiring at 62. They went to my website, www.travissherman.com, and took the “What’s My Score” quiz and ended up with a risk score of 35 (0 is put the money in the mattress and 100 is roll the dice). A score of 35 meant they were conservative and didn’t want to take much risk with their money. I did an analysis on their retirement savings, which was all in high-risk mutual funds. The risk score on their mutual funds was a 95! Their ideal score was a 35 and they were invested as a 95. This was a major disconnect between where they wanted to be versus where they were at. Worse yet, they had already accumulated enough assets. They didn’t need to take on this much risk. I put together a plan that took a portion of their savings (around 40%) and put it into an annuity with a withdrawal guarantee. They could literally leave the other 60% invested how it was currently invested. The result was that Lisa could retire at 62 (instead of 65) if she wanted to and would never have to worry about running out of money. The plan addressed all of their fears: the market crashing, running out of money, and inflation. The plan I put together for them addressed all of these concerns and more as well as put their risk exposure in line with their risk profile. Their response? “We want to think about it.” They have to think about it? They’ve won the race and accumulated the assets. Why are you risking your financial future? Why can’t I convey the real meaning of the risk you’re taking? IT WAS A BANG-MY-HEAD-AGAINST-THE-TABLE MOMENT! This is perhaps the most frustrating part of what I do. It’s extremely frustrating that when I meet with couples, like the one described above, who are going 100 mph when they should Travis M. Sherman Retirement Income Consulting LLC
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only be doing 35 mph (and they know that they should only be going 35 mph), but they refuse to take the necessary steps to correct the issue. This is either due to not wanting to put forth the effort to do so, fear of making a change or the fear of missing out on higher returns from the market. What they fail to understand is that things may work out for a time, but they’re eventually going to crash. When they do, who are they going to blame? It really doesn’t matter who they blame because their retirement will be derailed. In the end, it’s their fault. It was their responsibility to take control of their retirement. “Thinking about it” is simply an easy way to avoid taking the responsibility. There is no “thinking about it.” “Thinking about it” is a choice…it’s a choice to remain where you’re at. Where you’re at could mean simply being oblivious to your current position because you don’t have time, which is due to life being chaotic or whatever other excuse seems fitting, or it could mean knowing the situation but not wanting to take action to correct it. COULD THIS BE YOU HEADING INTO A MAJOR CRASH? IF SO, THEN LET’S DO SOMETHING ABOUT IT TODAY!
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Chapter
TWELVE compound the love
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compound the love
I
’ve been asked time and time again: where do you think I should start?
It’s nearly impossible to answer that question without knowing more about you. Most times I reply, “You just did!” You have to want to! Understating the seriousness of planning is a big step. Today, there are products and innovations in our industry that I could have only wished for in the past. One of the great advantages of technology is that we can provide our clients with so much more detailed information these days, so that you can make a much more informed decision.
I have often felt that transparency is the friend of the advisor who has his client’s best interest at heart. The Federal Reserve recently did a survey that said that over half of Americans could not come up with $400 if they had an emergency. That tells us everything we need to know about our culture. We live for today. Often, we don’t think about tomorrow. In school, we didn’t learn anything about saving money. Not in kindergarten, not in grade school, high school, or even college. Often, our parents never discussed money or the importance of savings with us. But I recently came across a 45-year-old whose father had taught him to begin saving 25% of everything he earned when he took his first part time job in high school. Today, he’s a multimillionaire and he’s free from most of the financial stresses that many of us have. Let me assure you: that is the exception rather than the rule. Our children are rarely given a road map. We’re told to work hard and achieve, at best.
I have often felt that transparency is the friend of the advisor who has his client’s best interest at heart. Every time I tell this story, I get more and more excited! I have seen the uncertainties of life, even at a young age. I decided to search for an answer Travis M. Sherman Retirement Income Consulting LLC
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that would provide protection for my kids no matter where it took them. I decide to call it, “The Child Asset Builder”. The concept isn’t new, but with today’s products, it can be highly enhanced. It’s a program that includes a “fast-start” savings program as well as life insurance, critical, chronic, and terminal illness coverage. It allows the parent, grandparent or whomever is the owner, to use the money as needed as the child reaches maturity. Let’s start with life insurance. At a young age, life insurance costs are minimal. You can buy large amounts, sure, but only if the parents are insured. At least one parent has to have the same amount of life coverage as the child. If there is more than one child in the family, all of them need equal coverage. Common sense, of course. But why would you buy it? The number one factor is future insurability. Once you’re approved, it’s locked in as long as you pay the premiums to keep up the coverage. Think about that for a second. Being able to purchase life insurance at a young age, when costs are low? It makes perfect sense. No matter what happens in the future, your child is insured. Later in life, that insurance can be a great asset that can be used to help secure loans. It can also be used for more immediate needs like paying debts or providing their future family with protection. I called this the risk management aspect of our plan. It’s about making sure that no matter what occurs, our plan is self-completing. In that same thought, consider the fact that the fast-start plan includes critical, chronic, and terminal illness protection. Would it not be helpful for your family, if major events occurred that are outlined in the policy—like invasive cancer, stroke, heart attack or other serious illnesses—and you could pull cash from the death benefit portion of your life insurance, based on severity? Of course it would. But let’s look at our primary reason for developing this plan. It’s known as accumulation. Many grandparents have loved this plan, because they can pay for limited years or even use a single payment to accomplish their goal of starting their grandchild on a “fast-track” to saving. It truly leaves a legacy for you, while providing comfort, knowing that you helped build early assets for you child or grandchild, so that he or she can have the additional comfort and Travis M. Sherman Retirement Income Consulting LLC
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protection they need throughout their entire life. If I just finished here, this would still be a great program. But I’d like to share how I put many of these plans together. I combine all the benefits into one policy. It’s called an “overfunded Indexed Universal Life plan”. There are many carriers, but I look for those that have critical, chronic, and terminal benefits. This works differently from other types of life insurance. It still takes out expenses and then puts the excess into bonds and fixed instruments. Like most plans, it goes a step further and buys options on an index. Depending on the carrier, there are many different options. One of the most popular ones is the one-year point-to-point strategy on the S&P 500 Index. Simply put, the money that is not taken in expenses goes into the carrier’s portfolio of bonds and fixed instruments. However, they purchase what’s known as an “option”, betting that the index will go up in the coming year. At the end of year, if the index did go up, they exercise the option and you take the gain based on the participation level and cap amount. If the market went down, the carrier simply doesn’t exercise the option and your money remains safe. Yes, it’s a bit more complex, than that but that’s why I’m here to help you understand it in detail, if you decide you would like to discuss it with me. This helps to minimize the expenses and life insurance portion to maximize our potential gain. After all, our number one objective is to build a solid asset that your child or grandchild can use for a lifetime. I’m often asked: how much should I put in? Well, that is strictly up to you! You decide. You decide the direction of this plan. By sitting down together, we can dream a little bit and start building the blocks for your future. I believe one of the biggest problems we have today in respect of our savings is that few people teach others how to get from point A to point B. In our 401k plans, we’re told to put money in (and we do). We look at our statements and decide if we’re doing good or not. What does that mean?! What’s our number? If we don’t know how much we need for retirement or life planning, what good does it do to just be putting money away! Seriously, have you ever thought about it? A lot of us believe we’ve done great if we have saved $150,000 in our 401k. What we don’t realize is that we have to live off just 4% of that money. Plus, it is ALL taxable! Travis M. Sherman Retirement Income Consulting LLC
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4% would be $6,000 a year. If we are in a 30% tax bracket, take away $1,800 of that! That leaves us $4,200—which has to be divided by 12, which gives us only an extra $350 a month! Oh my! Proper planning is a must for life and retirement. Social security was meant to cover about 40% of our income. Add just $350 to that and a lot of us are going to be in trouble.
Let ’s teach our kids. Let ’s teach our grandkids. Understanding the value of money and the value of savings is critical learned behavior. You might be saying, “Even if I took out this plan, when my child takes ownership of this, after I’m gone, I’m sure he/she would spend every penny.” That’s true. They might, and they might not. What a time to insert your legacy. Consider adding a handwritten note. It could go something like this.
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Chances are, they will be prudent with this policy and money. Teaching them how to save is so important. With your help, you have given the gift of a lifetime. One of the great benefits of this type of plan are the loan options. Some carriers allow what we call a variable loan. The carrier will “loan” the owner money and use the account value as collateral. Thus, the account value keeps working for the client. When you take the money out as a loan, it is not deemed as income. Replace it as soon as you can, and you can see how valuable this option can be. I love sitting down with grandparents and parents. I think it’s important to show the expenses inside these types of plans. As the years go by, the expense ratios tend to go down rapidly—as opposed to mutual funds or other investment strategies. Building roadmaps with a clear path to your destination requires focus and review. No matter how successful you are, it’s always good to have a hand on your shoulder. This isn’t easy. If it were, 88% of Americans would not be saying we’re in a retirement crisis. Most Americans feel overwhelmed and stressed about their financial future. Wouldn’t it be great, wouldn’t it be wonderful to take some of that stress away from your children and grandchildren? Live life with a purpose. Every morning, I have been more than blessed by waking up, jumping out of bed and declaring, “Today, I will make a difference.” As country music artist Amber Hayes says, “Any Day is a Good Day”.
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Chapter
THIRTEEN making a difference
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making a difference
I
have often been asked, “Why did you get into the Retirement Planning business”?
Today, I smile when I reflect on my career and realize the life changing work that I do. It’s my job to tell the story. To persuade people like you to listen and act. Retirement Planning is a topic that many of us never wish to discuss. Yet almost every day we are reminded of the fragility of life. Financial planning and financial stability begins with proper life insurance planning. Risk management is the core. Then, you develop a spending plan. It’s an important tool for creating and maintaining your financial health
There are uncertainties in life for sure. Being prepared for whatever occurs is so important for life and retirement planning. What are your plans regarding retirement? What are you doing to accomplish your goals? The answers to those questions have never been more important. 85% of all Americans do not have a pension plan. Two-thirds of all employees do not have a company sponsored employer plan at work. Of those that do, 401k or 403 plans were never meant to take the place of pension plans but rather were meant just as a supplement. As I mentioned earlier, a recent study from the National Institute of Retirement Security noted that 88% of American workers believe we are in a retirement crisis. 74% say employers don’t contribute enough for a secure retirement and 79% say the average worker cannot save enough on their own. The story gets more compelling.
A survey in 2016 said that 45% of all American workers have saved nothing for retirement. Zero. Nada Of those that have, the average savings account is $5,000. What is really scary is that the average retirement balance for those about to retire is $17,000. Rightfully so, workers described their feelings when discussing retirement as stressed, Travis M. Sherman Retirement Income Consulting LLC
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worried, depressed and worse, according to the NIRS survey. I have tried to understand why life and retirement planning is not a priority. Recently, I found a quote from psychologist Daniel Goldstein. He said, “The concept isn’t real to the younger you. You simply don’t want to think about it. It’s difficult to imagine yourself as older.” Wow. It reminded me of a scene that my friend and country music legend Ronnie McDowell had painted. It’s a drawing of a young Elvis Presley in his home in Tupelo, Mississippi looking into a mirror to see the reflection of an older Elvis looking back.
As Ronnie has said, “Can you imagine what the older Elvis would tell the younger Elvis if he had a chance?” As we grow old, we take on formal education from kindergarten to post-graduate work. Yet in all the years of education, there is not one class to tell you how to develop a proper spending and budget plan for your life and retirement. No discussion on risk management, how to set a budget, or how to stay out of debt. It’s as if we are in a herd of buffalo following the lead buffalo—huffing, snorting, and puffing— sprinting through the plains, only to run right over the cliff to certain death. It’s hard to realize that when we retire, we only have social security and what we have saved. It seems that we all think that there is gold at the end of the rainbow. As we take the plunge over the cliff, it’s too late to realize we can’t make it back to safety once we’re in midair.
I have made it my life’s work to change the perception of life and retirement planning. To change fantasy to reality. It begins with education and having a helping hand. For many of us, we have no roadmap, no direction. If you don’t have a financial coach, and have no idea how to start or even finish, then how do you do it? It can be a daunting task. But it doesn’t have to be. The best way for a person to save is at their workplace. It’s simple. If it can be payroll deducted and the worker never sees the money but just allocates for it, chances are the worker can begin a plan. However, not everyone can have their plan deducted from their pay. It will require even more Travis M. Sherman Retirement Income Consulting LLC
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discipline to write a check out each pay period, but it can and must be done. It’s your life. It’s your journey. A plan must have a roadmap, a direction. What will it take to get from point A to point B? If you were driving from Dallas, Texas to New York City, you would want to know how much gas it would take to get there. You would also want to know how long it would take and if you had enough resources to get there. Sometimes you need to readjust your direction if you encounter a roadblock. You have to have a plan. A process. One is that it’s self-completing. It begins with risk management for the unknown. Life insurance? The chances are that many workers don’t have it. They don’t see worth in it or don’t realize the power of it. Another aspect is protection for critical or chronic care that could disable the worker before retirement. It should be risk adverse but yet have the ability to have market-like returns. An important part of a successful life and retirement plan is the ability to get to your funds if the need arises. Life is unpredictable, and chances are, you will need some help along the way. My belief is that everyone could use a mentor. Someone to help guide you to the final destination. When it comes time to focus on budget and debt, a financial coach could prove to be invaluable. As with any journey, you must know the starting point, as well, the desired destination. It’s easier said than done, no doubt. Setting a budget, understanding taxes, getting out of debt is at the core. Just as important in creating long-term wealth with asset protection. I call this the “Protection Plan”. It covers most of the bases and puts the older you as a priority. What if we had a roadmap? What if we were excited about the journey ahead?
I love what I do. Being able to bring a direction, a plan, a roadmap. Nothing gives me more satisfaction that to see an individual reach their “diamond day, that day where they retire from work to live a real retirement.” A retirement filled with paychecks for life. It takes discipline. It takes an understanding and a partnership. For one person to take on this challenge alone is almost impossible. That’s why I’m a Retirement Planning professional. Financial goals will help shape your future. Imagine beginning a journey to be debt free, to Travis M. Sherman Retirement Income Consulting LLC
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pay all your bills on time, to establish a savings plan, to have good, if not great credit, and to keep what you have worked so hard to gain. When you don’t know where to start, it’s difficult to be proactive. So many workers have committed a large portion of their paycheck already to making monthly debt payments because they didn’t have someone to help and mentor them. I’ve made my share of mistakes. No doubt about it, this is not easy. But it’s essential.
As the late Jim Rohn once said, “Begin with gratitude and watch miracles flow your way.” Today, I rejoice at each day’s beginning. I literally can’t wait to jump out of bed and begin my day. I celebrate life. Virginia Hahn once said, “Without discipline, you’ll have regret”. Combine that with Sam Walton’s quote, “High expectations are the key to everything!” and you have the recipe to start the day!
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Chapter
FOURTEEN conclusion
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conclusion
M
y purpose in writing this book is for you, reader, to learn more about me and my passion for what I do. It’s my life, and it’s what I feel God has placed me on this earth to do. Why do I feel this way? Because God has closed doors that would’ve led me away from this career and opened up the doors that led me to this career. God has placed people in my life who have led me further down the path to understanding. The moment I quit fighting God’s direction for my life was when I truly realized that He was directing my steps. February 22, 2016, was a cold and rainy day. Why do I remember this date so well? It’s the day that I turned 40 and the day that I turned my life over to my Lord and Savior, Jesus Christ. I quit fighting it. I had been doing it my way for 40 years and I didn’t have a great track record. I was frustrated, angry, and struggling. I was out for a run on that cold and wet day when I dropped to my knees and looked up and asked God to take over. I was turning everything over to Him and I wanted Him to lead me. I was a broken person. God had finally hit me with the 2 x 4 to get my attention, and He did. That day, I went to a church and prayed with the pastor there and then I went and got a tattoo on the inside of my arm (a tattoo of the Greek spelling of Christ) to be a forever reminder of who was in control. This was another day that forever changed my life, and I’m not ashamed to tell the story. This may turn some people off, but it’s my story; it is what it is. Ever since that day, I’ve been able to look back at how God was directing my steps and leading me through the valleys. All of those steps weren’t easy, and God definitely gave me some trials to struggle through so that I could become a stronger person. The one thing that I did learn from my years of bike racing and triathlons is that the only way to get better and stronger is to push yourself to failure. It’s only when you reach failure that you grow and get stronger, and this is precisely what God did with me in my career and as a person. I reached failure many times in my path to growth. However, because of this, I came out the other side with more information and education to truly help people. God has truly blessed me, and my job is my mission on this earth. I truly believe this is why I’m here and what He is using me for. He is using me to help people achieve a worry-free existence so that they can help others in ways that utilize their unique talents and skills. You see, I don’t believe that God put us on this earth to simply get up, go to work, pay the bills, and go to bed. My mission is to help people create a worry-free retirement so that they can help others. I’m not doing this for the money; I’m doing this because this is my spirit-filled mission. God has blessed me to help others. My goal when I am called home after my time on earth is for people to come up to my wife Travis M. Sherman Retirement Income Consulting LLC
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and children and tell them how I’ve helped them, whether it was from an encouraging word or through financial gifts that I’ve given to them in secret. I’ve been blessed to be able to use my time, my talents, and my gifts to bless others. God has blessed me with a never-ending stream of people to help. I do monthly workshops on a variety of retirement-related topics such as Understanding Social Security, Taxes in Retirement, Empowering Women – The Unique Challenges that Women Face in Retirement, the New Generation of Retirement, and Don’t Worry! Retire Happy – The 8 Steps to a WorryFree Retirement. God has blessed me tremendously in that each workshop generally has 2535 people in attendance. Money and financial gain are not my motivators; helping you and others is what drives me each and every day.
As a result, I see hundreds of people each year. It’s not my aim to try and make each person a client. Not every person who attends the workshops is the right fit for me, nor am I the right fit for them, and that is 100% okay. We, you and I, may or may not be the right fit for each other and that’s okay too. If you’re looking for the person dressed up in a fancy suit, has a fancy office, will show you a beautiful “Pie Chart Portfolio” that promises you high returns and a retirement that may or may not work out because it depends on the stock market to perform, and views you more as “assets under management” than as a person, then I’m not your person. However, if you want someone who values you as a person, will take the time to meet with you and clearly explain things so that you understand them to you in terms you understand, and doesn’t pass you along to an assistant or office helper right after you come on board as a Travis M. Sherman Retirement Income Consulting LLC
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client, then I may be a fit for you. If you’re looking for someone who allows you to work on your own decision-making timeline—whether it’s 6 days, 6 weeks, 6 months, or 6 years—then I may be a fit for you. If you’re looking for an advisor who answers the phone and personally handles your questions or service needs whenever they arise, then I may be a fit for you. Whenever someone comes on board with Travis, they get Travis and not an office assistant or a junior advisor. If you’re looking for a person who will come to your house and talk about faith, family, finances, and, depending on the time of year, football, then we may be perfect for each other. I’m a simple guy from a small town who wears jeans, boots, and a jacket to meetings and draws out the concepts of a retirement income plan on a piece of paper with a crayon (pen actually)—because Peter Lynch once said “If it can’t be illustrated with a paper and a crayon then it’s too complicated.” However, don’t let my simplicity make you think that I am not experienced or qualified. As I mentioned earlier, I have a lot of initials by my name (CTS, CCFS, NSSA, RFC, and RICP), and I’ll continue to add more as time goes on to continue to grow in my knowledge because I am passionate about this profession and how best to be a servant leader to others. In addition, I have a team of professionals that supports me and the case design when I work with clients. These professionals include Certified Financial Planners (CFPs), Certified Public Accountants (CPAs), Certified Financial Analysis (CFAs), and a host of other professionals. What I am offering to you, the reader, is a no-cost or no-obligation second opinion review of your current plan. You may already have an advisor who you’re comfortable with. That’s awesome. However, the person who gave you the first opinion cannot give you an objective second opinion. That’s what I can do for you: I can give you an objective second opinion on your plan. In my workshops, I joke with the crowd and ask how many of them used to have a “flip phone” and also said that “they didn’t need a smart phone!” Then what happened? They started playing with a “smart phone” and began to realize all of the shortcomings that their old flip phones had and all the things that the flip phone couldn’t do. This is exactly what the second opinion review will do for you. Your current plan may have been perfect for your needs at the time. However, when you start approaching the next phase of your life, you’ll need new tools. My second opinion review will do just that: I’ll show you the strengths and weaknesses of your current plan and the new tools that are available on the market. I’ll provide you with the information, and what you choose to do with that information is 100% up to you. All I ask is that you not be closeminded with an “I’m not interested” or “We are fine where we are” without seeing any new information. There’s an old saying that states, “People don’t know what they don’t know, and they don’t even know that they don’t know it.” Don’t let this be you. Travis M. Sherman Retirement Income Consulting LLC
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Chapter
FOURTEEN epilogue
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epilogue
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eople ask me if I’m still riding my bike or racing and the answer is “yes, I am.” I still compete and I have no plans of stopping. I don’t do a much bike racing today as I once did. It’s not because I don’t enjoy it, it’s because I’ve gravitated over to doing Ironman Triathlons. The reason for the gravitation over to doing Ironman Triathlons is a result of a very bad crash that I had at the US Pro 100K in Atlanta, GA on Labor Day 2010. This was a National Race Calendar race that was the final race of the year. The race had a big money prize list and extra points for the series. Long story short, the race was fast. The first portion of the race started with a very fast downhill portion (50+ mph fast). Roughly 2 minutes into the race there was a massive pileup at the front with bikes and bodies going everywhere. My front wheel hit the back of another rider sliding across the ground and I went straight up into the air and straight down on my back. No “road rash” (thankfully), but the impact did enough to cause massive bruising and spasming in my back and I had a broken foot. I spent the next 6 weeks crawling on the floor with my (then 9 months old) daughter Anneliese. In November of that year, while on muscle relaxers and pain killers and still unable to walk (much less ride a bike or run), I decided it would be a good idea to sign up for an Ironman Triathlon for November 2011. An Ironman consists of a 2.5 miles swim, a 112-116 miles bike segment and then a full 26.2 miles marathon. As of this writing, I have completed 10 events and I have at least 3 more on the radar for 2020 and 2021. The goal is to compete at the Hawaiian Ironman in Kona. In 2019, I was awarded the All World Athlete Silver Medal which signifies being in the top 5% of my age group worldwide.
Professionally, I want to keep doing God’s work while I’m here on earth and that is to help people create the worry-free retirement. I have no plans of ever retiring and doing this for the rest of my life. I want to leave you with these two funny stories: Travis M. Sherman Retirement Income Consulting LLC
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There was once a man that died and went to Heaven. When he got to Heaven, he asked God why God never let him win the lottery. God replied, “You could have at least bought a ticket first.” Point being is that God wants to bless us, but many times it’s up to us to take action first. Having a worry-free retirement is a lot like that. It won’t just happen. The other story is of a person stranded on a rooftop because of a massive flood. A person in a canoe came by and offered to help and the man said, “No. God will save me.” A second person came by in a boat and offered to help and the man said, “No. God will save me.” Later on, a third person came by in a helicopter and offered to help and the man said, “No. God will save me.” The flood waters continued to rise and the man perished. He went to Heaven and he asked God why he didn’t save him. God replied, “I sent a person in a canoe, I sent a person in a boat and I sent a person in a helicopter. You refused help. What more could I do?” There is are a vast amount of resources available to help you create a worry-free retirement. I want to the tool that God has sent to help you—if you’ll let me. I hope and pray to have the opportunity to meet you and to serve you and to have the opportunity to be one of your trusted advisors. Until then, have a wonderful and blessed day! Travis Travis M. Sherman can be reached at travis@travisssherman.com or you can visit his website at www.travissherman.com PS: Should we get ever have the opportunity to get together, we’ll simply have a conversation about where you’re at and where you want to go. I’ll gather some information from you and then go back to my office and my team and I’ll will do the analysis and create a plan. You and I will then get back together and my goal will be to educate you and to provide you with options and let you decide which of the options you feel best fits your needs. Should you decide to implement one of the options, I will get paid by the company that I link you up with (I represent approximately 100 companies—many of which have been in business well over 100 years). If you decide to come onboard as a client then that is awesome! If you don’t, then that is great to. My day will not be affected. I’ll still go out for a bike ride, a run or spend time with my girls. Point being is that you don’t have to feel like you have a large “Bull’s Eye” on your back because I’m trying to earn a commission. However, should you decide to come onboard as a client, you’ll have a crystal-clear picture of how and when you’ll be able to have a worry-free retirement with income that will last your lifetime and, if you’re married, your spouse’s lifetime as well. Thanks, Travis Travis M. Sherman Retirement Income Consulting LLC
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Walking down the red carpet at An impromptu podium picture after winning the the 2019 Academy of Country state championship. Music Awards.
A quick selfie at the 2019 Academy of Country Music Awards show.
On the podium after winning my classification at a Triathlon..
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