Welcome to TaylorMade Retirement! Featuring Taylor Demars, a 3rd-generation financial advisor and CFP®, this podcast explores what it really takes to build a retirement that works- for your money and your life.
Each episode breaks down strategies, stories, and steps to help listeners approach retirement with clarity and confidence. From cutting taxes to avoiding common retirement traps, Taylor draws on decades of family expertise to make complex financial ideas easy to understand.
Because life should shape your money, not the other way around.
Early retirement gets much easier when you stop treating every financial decision as a one-time judgment call and start building Early Retirement Systems that tell you what to do before uncertainty hits.
Taylor breaks down How to Pull the Trigger on Retirement by creating repeatable systems for income, spending, investments, taxes, and lifestyle. Whether you're trying to Retire With $2 Million, Retire With $3 Million, or simply determine when you've saved enough, having a Retirement Forcing Function can help turn years of planning into an actual decision.
One important framework is understanding a One Way Door Two Way Door Retirement decision. Some choices can easily be reversed, while others have lasting consequences. Knowing the difference can help you approach your Retirement Launch Window with more confidence and flexibility.
He also explains how to create a Retirement Income Machine designed to replace the paycheck you've relied on throughout your career. That can include a Retirement Bucket Strategy, a disciplined Retirement Spending System, and a Retirement Paycheck Replacement process that makes retirement income feel more predictable.
Investment risk doesn't disappear when you retire. Taylor covers Retirement Sequence of Returns, the role of a Retirement Bond Bunker, and what a Retirement Monte Carlo 80 Percent result may actually tell you about your plan.
For anyone hoping to Retire Before 62, taxes and Social Security can become especially important. He discusses a Roth Conversion Retirement Strategy and a Social Security Delay Strategy, including how the years between work and traditional retirement age can create valuable planning opportunities.
But successful retirement isn't only about money. The Retirement Identity Shift can be one of the hardest parts of leaving a career behind. A Retirement Rehearsal Strategy can help you test your spending, routines, relationships, and lifestyle before making the transition permanent.
This Early Retirement Case Study shows how building systems can transform retirement from one overwhelming decision into a series of manageable processes you can follow and adjust over time.
Disclaimer: Since we don't know your specific situation, none of this information should be construed as tax, legal, financial, insurance, financial advice, or other advice and may be outdated or inaccurate. It is your responsibility to verify all information yourself. This content is prepared for entertainment purposes only. If you need advice, please contact a qualified CPA, attorney, insurance agent, financial advisor, or the appropriate professional for the subject you would like help with. Demars Financial Group, LLC or its members cannot be held liable for any use or misuse of this content. Advisory services offered through Demars Financial Group LLC, a Registered Investment Advisor. Demars Financial Group is not affiliated with LPL Financial.
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Today's content is pulled from Taylor's YouTube channel. If you want to watch the video version or catch more great content, subscribe by clicking the link in today's show description. Welcome to Taylor Made Retirement, where we explore what it takes to build a retirement that works for your money and your life. With third generation certified financial planner Taylor DeMars.
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Most people think early retirement is about having enough money saved. But after helping hundreds of people with $2 million or more make this transition, the money is almost never the thing that I find keeping people stuck. What keeps them stuck is that they don't have a system for doing the hard things that early retirement actually requires. Things like pulling the trigger when the math already says go, making permanent decisions that can't be undone, or knowing where income actually comes from on day one without a paycheck. Those are the hard things nobody talks about, and willpower alone will not get you through any of them. My name is Taylor DeMars. I'm a third generation retirement planner and tax strategist. And today I'm going to walk you through five systems that make those hard things automatic so the decisions that have been keeping you stuck get made by a system instead of your anxiety. And the fifth one is the system that I think matters the most because it solves the one problem that no spreadsheet or calculator can touch. The first hard thing that keeps more people stuck than the other four combined is actually pulling the trigger. Specifically, those who have run the numbers, say a hundred times, with two, three, or four million saved, but still can't get themselves to commit to a date. They'll keep telling themselves some version of one more year. And there's a question I hear in meetings that's worded a dozen different ways, something to the tune of, what's the incremental benefit of me working one more year? And after watching this pattern all the time, I can tell you that one more year is actually more of an avoidance decision disguised as a financial one. Let me show you what that looked like for a client I'll call Bruce. He's a surgeon and 60 years old. His wife Elaine is 59 with some significant health concerns. Between the two of them, they have about $2.6 million saved in their retirement accounts and joint brokerage account. But the part that made Bruce's situation tricky is that work had actually gotten easier for him lately. He had given up being on coal and handed off being on the longest surgeries. So on paper, it looked like a man who was winding down. But in practice, it runs in reverse. Because when work stops hurting, one more year feels cheaper as time goes on. So his date naturally kept floating. End of this year, probably. Well, maybe why not next Christmas? We'll see. And under the floating sat two real fears that he wouldn't name. And the first was, what if the market potentially drops 30% right as he walks out the door? And the second is how am I going to cover Elaine's healthcare coverage in the year's pre-Medicare? So we put his plan through the meat grinder, a thousand different projected scenarios, comparing retiring at the end of 2026 versus the end of 2027. We also rewired the tax side, which was to spend down from the taxable accounts first, so we could chip away at the pre-tax money with Roth conversions while his tax brackets sat low. The plan's Monte Carlos score jumped significantly, giving him the green light to start talking about retirement in terms of months instead of years. And his projected ending assets went from about $1.3 million to $4.6 million in today's dollars. This is the same portfolio and the same spending strategy, but the extra year was never the thing that was going to make it all work. The strategy was. If you want to see what this kind of rewiring looks like on paper, I've made something for you. I put the whole workflow that we do for clients in a free sample plan that's linked below in the description. I'll talk about it more in a few minutes. Now, the numbers alone don't move a man who's been saying, we'll see, for three years. What moved Bruce to pull the trigger was what was sitting in his HR paperwork the whole time. He was waffling on a proposition his employer was making, which was saying, we'll give you $15,000 for 18 months' notice. And I remember hearing that policy and thinking, well, there's the whole ballgame. Not because of the money, but because of what that money admits. His employer isn't a charity. Because if a business will write you a $10,000 check just to know when you're retiring a year early, that's the market putting a price on clarity about time. So Bruce did the thing that most don't expect. He actually pulled the trigger to give his notice for this December, short of either bonus window, leaving the check on the table. He was foregoing the $10,000 or $15,000, but trading it for starting his retirement about a year sooner than he assumed, he had to wait. I've come to find that we as a society are tragically good at undervaluing our own time. Bruce was seeing the whole picture and seeing life's priorities for what they really were, so he could make the call to put his greater value on his own time. That's a forcing function, and it's different from a goal. A goal can float onwards and onwards, but a forcing function is a system and the structure that makes drifting cost more than deciding. For Bruce's situation, it was a notice in writing to his employer who now plans around it. For you, it might be booking that bucket list trip that you'd have to call and cancel, or having your income plan built around a hard date, so that a delay means unwinding real work. And if part of you is asking, what if I set the date and I'm not ready at that point? Look at your own track record. If the money is there and you've said one more year more than once, readiness was probably never the missing piece, but just having the right structure in place. The moment that a date goes on the calendar, most people might expect a wave of relief. And for about a week, that's what it might feel like. But then the mail starts. Because a date wakes up every permanent decision you've been able to ignore, and it comes due all at once. The couple I want you to meet next had about a dozen of those decisions in front of them. And what started them out was a sorting rule that I like to borrow from Amazon's playbook. Let's start by thinking about those major decisions. When to start Social Security. How about those pension options in front of you? How to cover healthcare, pre-65, or how much to convert to Roth this year, next year, and every year thereafter. Some of these decisions are permanent, and the natural response to a pile of permanent decisions is to make none of them. You might say, oh, I'll just read one more article, watch more one more YouTube video, but all the while the window gets a little smaller every week. I watched a couple work through this problem last spring. I'll call them Wayne and Connie. And they're both 56 years old. He's an attorney, but Connie spent over 30 years at the same logistics company. They've saved $3.9 million for retirement, plus a real estate portfolio I'll get to in a minute. For their situation, they had a lot of these decisions weighing on them at once. Again, the pension paperwork, which and as well as which state to call home before they plan to sell all their real estate and live on the road for a year, as well as how to navigate those Roth conversions that could compete with affording their ideal lifestyle. But the one that nearly ended the whole plan was healthcare. When they sat down with an outside specialist, the feedback they received projected a cost of $2,000 to $3,000 per month every month throughout retirement until they reached age 65. Understandably, this felt like a gut punch for their hopes and dreams, given the extra weight that they are expecting their portfolio to then carry. But here's what saved it. We stopped treating these moving pieces like one giant decision and sorted the pile into what Amazon refers to as one-way doors and two-way doors. They like to think that a one-way door is something that you can't walk back through. So it gets decided slowly, on paper, and in advance. A two-way door is something that you can reverse, so it should never be allowed to stall your life. The one-to-way doors in this client situation were the pension election and the claiming ages that got mapped as if-thens before any other deadline existed. If this is true about your life, then start with these irreversible choices first. From there, almost everything turned out to be a two-way door, or a door that we could leave open to determine later. For example, Wayne's 401k stayed put because leading your job in the year that you turn 55 or later keeps that money reachable without the early withdrawal penalty of age 59 and a half. Spending for them will start also from the taxable accounts, which commits them to nothing today. And the Roth conversion is not going to be decided all today. It gets right-sized each fall once they have clarity on where their taxable income will land for each respective year. And their state of residence gets penciled in and it can adjust in a year once they let that dust settle. And frankly, the healthcare question stays imperfect, but it just stopped holding a veto. Connie picked an action date in early May, her own version of Bruce's forcing function. She's retiring this August. And Wayne follows in September. And here's the part I love. As I'm filming this, their house is listed on as are their rental properties here soon. And their airstream that they have is now being traded up to the one that they're going to be traveling in full time and retirement. Connie admits it still feels scary to leave the place she's worked for three decades. But I would actually be more concerned if she didn't have at least some last-minute jitters. So that's that system. Sort every big decision by whether the door swings one way or two. Map the one-way doors early while nothing is urgent, and keeping those two-way doors open on purpose. The analysis happens when you're calm, then the execution can happen when the clock is running. Now we're two systems in, and notice that they both end in the same way, with a date on the calendar. Every door I walked you through exists on paper, so I built you a full sample plan for a fictional couple I call the Caldwells, who are both 61 years old with 3.1 million saved for retirement. Think of it as a behind-the-scenes look at the exact workflow we use to build a client's comprehensive plan, and all five of today's systems are in it. If you're within a few years of this decision, you can grab your copy of it for free in the link in the description. I suggest you set it out next to your own plan and see what might be missing. Now, eventually, your last paycheck will clear on a Friday afternoon. And for the next month, perhaps for the first time since your 20s, nothing will land on the checking account. And for most people, they aren't concerned about whether they have funds to draw on. It's just a simple yet sophisticated question asking, where does it come from now? Which account, how much, especially what happens if the market's down this week? And I've seen many people come to us after some form of improvising on their own. Something to the tune of log into their brokerage account, sell off some stocks, and transfer it into their bank account, second guessing it all away, and then repeat the process every single month. One client four months into retirement told me it felt like he was cannibalizing his savings. His plan theoretically was fine, but the experience of the plan felt like death by a thousand paper cuts. So here's the machine that replaces all of that. We like to organize retirement money into three time segmented jobs. First is the pantry, then the bond bunker, and the growth engine. What I want to show you is the sizing plus the backup plan of the whole sequence. Let me build it the way that I built it for a couple. I'll call Brenda and Kurt. She's 59 and a school district finance director, and he's 57, and they have around $2.5 million. They're delaying Social Security to 67 to lock in the larger checks for life, which means the portfolio carries the whole load for the first stretch. So we added up what the plan expects to cost them for the next five years. And the number came out to about $888,000. Seeing that big ugly number for Brenda, her initial take was that quitting work was off the table until she saw how it could be funded. Now, the pantry comes first. We think of it not as just a client's emergency fund, but as the funds that we want liquid and accessible for those expenses that are known and in the short term. Theirs was to the tune of a quarter million dollars, which is bigger than most because of the renovation work they've got lined up. And contractors don't bill on a schedule. Over the long term, it holds a hard floor of $75,000. So if cash ever drifts towards that floor, it becomes a tripwire for us to replenish it and keep that safety net strong. What the pantry is not for is that monthly paycheck. That comes from the next two pieces. The bond bunker holds those next five years of plan withdrawals in bonds and short-term holdings. So a bad market year becomes an inconvenience instead of an emergency. The growth engine is everything else on top, invested for the long term for decades. Month to month, income gets drawn from a mix of the latter two buckets, depending on what the markets, taxes, and their plan are doing. And the engine refills the bunker when we choose to, not when the market forces our hand. Then we go a layer deeper, and this is the part that almost no one builds. We wrote down the fallback strategy in advance, and in this order, if a rough stretch runs long in the markets, the wants for their strategy get trimmed for a season. Think one less vacation per year, delaying buying a second car for a few years. But behind that, that home equity line is taken out and opened early and sitting ready and waiting, it's kind of like cheap insurance that you hope to never use. And then third, we consider pulling the Social Security ripcord ahead of schedule. These three moves are decided in advance that help keep the plan standing through the ugliest scenarios without having to sell stocks in a panic. Now remember, the $888,000 never shrink, but the unknowns around it did. Last piece of this is the actual transfer of money. They wanted the same amount on the first of the month, landing in their checking account just like clockwork. So that solves their paycheck problem. And if you stop the video here, you'd think that the hard part was over. But the engine only tells you where the money's coming from, but it has no opinion about the question that every couple quietly argues about, which is how much of it do you get to spend? Because the spending problem I see all the time is actually that people aren't spending too much, but that it's too little and fueled by fear and overly conservative cookie-cutter critics. How's that for a tongue twister? So here's the order that we build a tailored retirement spending plan. We audit the inputs before we trust any output. We don't want garbage in or garbage out. Real spending history is important, not just guesses or feelings about what you're actually spending on. And we'd like to get a little OCD to understand what our clients actually want the money to do, writing it down, including the trips and the splurge expenses that they may be simply curious if they're possible. For example, I recently had a poll confession out of a client who told me that her dream is to stay at an overwater bungalow in Bora Bora. That would fit maybe not in the needs or wants category, but the wish one. To see if that's possible, we put the plan through again that meat grinder, and we read what's technically called the probability of success. Out of those thousand projected scenarios, how many still stand with money still in the bank? And understand what that number assumes, that every input is exactly right and nothing changes for 30 years. Which of course is preposterous, but it's simply the best read we can make with what we know today. And while I may get criticized by planning perfectionists or even other financial advisors, I think it's worth sharing what our philosophy is on what a target score should be. When a retirement plan gives an output of, say, 97, 98 out of 100%, most people will hear that as an A or A plus. In our office, we hear a warning light. Because in our planning, we aim for a sweet spot of around 80%. That missing 20% gap to 100 are not simply the odds that they're going broke, they're the odds that somewhere across a 30-plus year retirement, course corrections are expected, which we were going to do anyway. So if you were to drive cross-country for a week, for example, you wouldn't call rerouting around a storm a failed trip. It would just be driving. A plan targeting 80% is built for real life so you can live it. Because 99% means one thing most of the time. Certainty gets bought by working past your best years, and that bill never shows up on any statement. This less than perfect thinking allows us to unlock more income for the years we want it most. For example, we can now model out for that same client that it's feasible to get that getaway to Bora Bora. And that's what a spending system does. It can hand you a number you can trust, sized to a plan that expects course corrections to be refreshed as things both in and out of your control fluctuate over time. Everything I've shown you lives on either a spreadsheet or an automatic transfer. But this fifth system doesn't. And it's the one I told you at the start matters most because the hardest part of early retirement is not just funding the fun, it's figuring out who is living it. A client I'll call Stan taught me how fast that shows up. He was 61 when he retired from operations management. His first Monday of retirement, he was up at 5.30 out of habit, of course, pouring his daily coffee. At 7.15, he was dressed, showered, and ready for the day with nowhere to go. It took some time for him to get his bearings because week one felt like vacation, but week three felt stale. He told me it felt like playing hooky from a job that doesn't exist anymore. And I keep hearing versions of the same confession in those first months from clients. People who spend 30, maybe 40 years getting good at banking money, but no one ever taught them to stop. The mistake underneath this unspoken assumption is that your new life is supposed to just show up the way your paycheck used to. It doesn't. You have to build the bridge before you cross it. And the way I coach clients to build it actually costs you nothing because you've already paid for it and it's your banked PTO. Most people a few years out from retirement are sitting on at least several weeks of vacation time that they've hoarded the same way they've hoarded everything else. And here's my unconventional advice. Use it as a rehearsal. Take two, maybe three weeks off and don't fly anywhere. Just stay home, wake up on a Monday with nothing scheduled, and live the retired Tuesday, the retired Wednesday. And if your employer would entertain it, maybe a short sabbatical is the full dress rehearsal. You'll find out fast where your real gaps are, whether the days need people in them, whether you need a project to keep yourself from driving your spouse crazy, or whether you need a reason to be out of the house by night. That will help you discover whether there's still time to build those things instead of discovering the holes in week three, the way Stan did. Which brings me back to Bruce, the physician. Everything he had been doing at work for these last few years, stepping back from being on call, clocking in just three days a week, was rehearsing, practicing the shape of a lighter life while still living inside the old one. Because now he has a granddaughter with fewer things to prevent him from seeing her. And his wife Elaine's health keeps reminding him that someday is not a plan. And for the cherry on top, he's now counting the days until December when the whole family is booked to go on a retreat together. His kids, his granddaughter, everyone there to celebrate his retirement. And maybe you've already built that bridge that will carry you into retirement. Maybe it's a shiny new motorcycle itching to hit the road, or a backyard project you can't wait to sink your teeth into, or a hobby that you've already started and you want to experiment with to learn some new tricks along the way. That's the pattern behind our happiest retired clients. Ensuring that you have strong relationships, a hobby, and a purpose in retirement builds the part of the system that never shows up on a spreadsheet or a statement. An ideal early retirement isn't supposed to be a willpower project. These five systems should help make it that much easier, specific to your own life. Because you can automate every dollar of your retirement, but you can't automate a Tuesday. That's when you get to build by hand. If you want to see what these systems look like when they're on paper, that sample financial plan is linked in the description below. And it's a behind the scenes workflow of how a comprehensive plan gets built in our office. I suggest setting it next to your plan tonight, seeing the gaps, and that becomes your to do list. Thanks for spending some of your day with me. I'll see you in the next video.
