Get started as early as possible. Like I was saying before, the time value of money is incredible and shouldn’t be overlooked as a tool to maximize your retirement readiness. Of course, whether you are 21 or 61, you can still benefit from having a plan in place. But the earlier, the better.
I had the pleasure of interviewing Jim Poolman. Jim serves as the Executive Director of the Indexed Annuity Leadership Council (IALC), a coalition of life insurance companies that have come together to increase the dialogue surrounding fixed indexed annuities (FIAs). In addition to serving as the IALC’s Executive Director, Jim has been elected twice to serve as North Dakota’s Insurance Commissioner. Before that, he served four terms in the North Dakota House of Representatives and was a trust officer for the Bremer Bank. Jim and his wife Nicole, live in Bismarck, North Dakota with their three children, Collin, Grace and Nicholas.
Thank you so much for doing this with us, Jim! Our readers would love to “get to know you” a bit better. Can you share with us the backstory about what brought you to your specific career path?
I started as a trust officer for a regional bank in the Minnesota/North Dakota area, where I helped set up corporate retirement plans, educate consumers and guide employees about saving for life after work. At the same time, I served four terms in the North Dakota House of Representatives.
Later, in 2000, I was elected North Dakota’s Insurance Commissioner. In that role, I’m proud to say I helped strengthen laws to protect citizens against insurance fraud, widened the scope of consumer protection — in North Dakota and nationally — and spearheaded legislation related to the suitability of sales and life settlements. I left the office in 2007 to start my own regulatory consulting practice, and today I serve as the Executive Director of the Indexed Annuity Leadership Council (IALC), a coalition of life insurance companies that have come together to increase the dialogue and education surrounding fixed indexed annuities (FIAs).
Throughout it all, I’ve been motivated by a desire to help prepare Americans for retirement and protect consumers from unscrupulous financial practices.
Can you share a story with us about the most humorous mistake you made when you were first starting? What lesson or take-away did you learn from that?
I don’t know about a particularly funny story, but my biggest mistake was not following my own retirement advice. When I left my job at the bank, I withdrew part of my retirement fund to buy a house and pay off some debt. At the time, it felt like the right financial decision, but I would have been far more ready for retirement today if I had just left that money alone to grow through compound interest.
When you’re planning for retirement, time is one of the most valuable assets you have. Don’t squander it.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?
I actually have two. The first boss I ever had taught me a lot of valuable life lessons about saving for retirement, which mostly boiled down to personal responsibility. I was not a good saver or money manager, and he helped me see that not only did I have an obligation to consumers, but I also owed it to myself to take ownership of my future.
Second, my dad always taught me that when buying things that aren’t necessities, if you can’t pay in cash, you’re not ready to have it. Today I consider myself a “debt reducer.” If I can put extra money away to pay off debt, I do that instead of purchasing new things.
What advice would you give to other leaders about how to create a fantastic work culture?
I’ve always found that empowering people is incredibly important. You have to trust yourself to teach them and give them the authority to do things — with the understanding that they will make their own mistakes. That trust is crucial.
Ok thank you for all that. Now let’s move to the main focus of our interview. Retirement is a dramatic ‘life course transition’ that can impact nearly every aspect of one’s life. Obviously everyone’s experience is different. But in your experience, what are the 5 most common things that people wish someone told them before they retired?
Well, as you said, everyone’s goal and path to retirement is different. But I do agree there are a few best practices that will probably apply to everyone.
First, get started as early as possible. Like I was saying before, the time value of money is incredible and shouldn’t be overlooked as a tool to maximize your retirement readiness. Of course, whether you are 21 or 61, you can still benefit from having a plan in place. But the earlier, the better.
Second, try to put more money away every year than the year before. If you’re comfortable with your current salary, when you get a raise, why not put the entire difference into your retirement accounts? You’ve already proven you don’t need the extra money.
Third, take advantage of any matching contributions from your employer. By not doing that, you’re just leaving money on the table.
Fourth, be sure to perform an annual checkup on all your finances, just like you would a physical checkup. Surprises come along when we aren’t being intentional about our activities, and it’s important to make sure your investments are performing the way they should. This is especially important as you age into new phases of life, like marriage, becoming a parent or moving to a new location.
Finally, and this is my biggest tip, finalize your will. It doesn’t matter if you’re wealthy or not, getting your will in place is important. And just like your retirement accounts, make sure to keep it updated. Five years ago, I almost lost my life in a car accident, and even though I had drafted my will, I hadn’t gotten around to signing it. Luckily, I’m still here, but had that been the end, my family would have had to deal with a massive headache of sorting through our finances — on top of their grieving. The moment I was healthy enough to complete the will, we got it done. I don’t ever want to risk putting my family in that situation again.
Let’s zoom in on this a bit. If you had to advise your loved ones about the 3 most important financial issues to keep in mind before they retire, what would you say? Can you give an example or share a story?
A few decades ago, retirement planning was pretty straightforward, but in the past decade, quite a bit has changed. Since the recession, the United States has witnessed a shift from employer-based retirement planning opportunities, such as pensions, toward a more “do-it-yourself” approach. And in cases of part-time or temporary employment, retirement planning is often entirely in the hands of the employee.
The IALC has done survey research to find many Americans are worried they’ll run out of money during retirement. In fact, less than one third of U.S. adults have a retirement plan that will ensure they don’t outlive their savings. This uncertainty can lead to high levels of financial anxiety, which unfortunately can cause paralysis by analysis.
I’ve always felt that the best thing you can do for yourself is to get real. Break out a calculator (IALC offers several for free that help you calculate expenses, Social Security income and taxes, for example) and crunch the numbers. By understanding what you can realistically achieve for retirement, you can stave off unnecessary worry.
Second, make sure that your plan is diversified. The best plans are built from many tools, which helps lower risk. Some options, like high-risk stocks offer the potential for large returns in exchange for high exposure to potential losses. Others, such as fixed indexed annuities, offer principal protection in exchange for lower returns.
Finally, if you’re worried about outliving savings, take a look at the options for guaranteed lifetime income. We all know about Social Security, but it’s easy to overestimate how much we’ll receive each month. In addition to their ability to provide principal protection, fixed indexed annuities are one of the few products that offer guaranteed lifetime income. I recommend anyone interested in learning more ask a financial professional whether this product makes sense for them.
Is there a particular book that made a significant impact on you? What about a favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life?
I don’t really read financial books if I’m being candid, but I’m big on history. I’m also an avid Wall Street Journal fan.
As for life quotes, my personal favorite isn’t short and sweet, but it’s my favorite for a number of reasons. Roosevelt spent time in North Dakota at a very difficult moment for him after the loss of his wife. For those of us who have run for office, or who are trying to make a difference “in the arena,” his words ring very true:
“It is not the critic who counts; not the man who points out how the strong man stumbles, or where the doer of deeds could have done them better. The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood; who strives valiantly; who errs, who comes short again and again, because there is no effort without error and shortcoming; but who does actually strive to do the deeds; who knows great enthusiasms, the great devotions; who spends himself in a worthy cause; who at the best knows in the end the triumph of high achievement, and who at the worst, if he fails, at least fails while daring greatly, so that his place shall never be with those cold and timid souls who neither know victory nor defeat.” — Theodore Roosevelt
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Thank you for these fantastic insights. We wish you only continued success in your great work!
Thank you! It was great speaking with you as well.