Don’t forget or ignore 401(k) plans after leaving a former employer. These plans generally have limited investment options and higher costs. When these 401(k)s are ignored, this can lead to inefficient asset allocation, lower returns, or more risk. Understanding options is essential when leaving an employer. Options include: leaving the 401(k) alone, rolling it to the new employer’s 401(k), rolling it into an IRA (or Roth IRA), or cashing out. Make a pros and cons list and take action.
As a part of my series about the “5 Things Retirees Say They Wish They Were Told Before They Began Retirement” I had the pleasure of interviewing Brian Fry CFP®. As a fiduciary financial advisor in Austin, TX, Brian Fry CFP® founded Safe Landing Financial to help busy professionals retire on their terms. Brian has worked in the financial services industry for nearly a decade in various financial planning and investment management roles. Brian specializes in customizing a financial plan and tailoring investments to each client’s unique financial situation.
Thank you so much for doing this with us, Brian! 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?
Thank you for having me!
How did I end up in financial planning? When I was a kid, my family and I went on a vacation to New York City. I became fascinated by the New York Stock Exchange and Nasdaq, and my interest has only increased since then.
I inherited an entrepreneurial spirit coming from a family with a 100-year family moving and storage business. I worked summers and winters in the warehouse and on the trucks in my late teen years.
In college, I was in the business school at the University of Kansas and interned with a financial advisor group. I loved the client relationships and the difference those advisors made for their clients. That is where I knew I’d pursue a career path in financial planning.
There was an elder abuse situation that impacted my family growing up. An advisor was acting very questionable when they weren’t transparent or accountable. I knew from going through that experience; I wanted to be different from them. I ensure my clients don’t have to deal with the same level of stress my family did.
As for my experience, I worked for a few different financial services firms in roles focused on financial planning and investment management. I started Safe Landing Financial to serve busy professionals with complex financial planning situations better as they are approaching retirement.
For my education, I earned my Bachelor of Science in Business Finance from the University of Kansas in Lawrence. I obtained the CFP® (certified financial planner) designation and am currently a CFA (chartered financial analyst) Level II candidate.
Can you share the most interesting story that happened to you since you started your career?
The most exciting time of my career was a four month stretch in 2018. I became a CFP® professional and survived a tornado on the move to Austin, TX to start Safe Landing Financial.
The CFP® designation is considered the gold standard for the financial planning industry. It demonstrates a financial planner’s commitment to education, professionalism, and client-centered planning. It was essential to me to become a CFP® professional, although it is a rigorous process. On the education side, one must earn a bachelor’s degree and complete a CFP Board education program. The CFP Board’s education program focuses on the financial planning process and insurance, investment planning, income tax planning, retirement planning, and employee benefits, estate planning, and financial plan development. Then, one must pass the comprehensive six-hour CFP® Exam. Finally, one must demonstrate three or more years of full-time relevant financial planning experience and adhere to the CFP Board’s ethical standards. Passing the exam was thrilling and relieving.
The day my fiancée Brooke and Imoved from Denver to Austin was a beautiful and bright day, until we were about two hours outside of Lubbock. Out of nowhere, huge wall clouds approached, followed by a severe thunderstorm. After about an hour of driving through back highways, the torrential rain stopped, and a small tornado appeared on a direct collision course to us. There was about 30 seconds to decide what to do. There was no ditch or any escape. I pulled over on the side of the road and told Brooke I loved her while holding her hand tightly. Before I knew it, the tornado passed right through us. Our moving truck shook around for a few seconds, but thankfully we were not lifted off the ground. With this near-life experience, I was thankful to have a fresh start, no damage to our belongings, and a clean bill of health.
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 learned a lot from an extended internship from a group of financial advisors in Kansas City.
While working for them, I was offered an opportunity to work with another financial advisor group in St. Louis. It seemed promising at the time. I accepted a verbal offer with the contingency that the start date on the written offer would allow for enough time to provide two weeks’ notice and move to a new city. I needed to thank my first group of advisors and leave the right way.
After three long weeks, I received my written offer, but with a start date less than a week away. Worst of all, they told me I could start on X day or take a hike.
There were so many red flags. It became clear that I was making a huge mistake. I declined the offer and haven’t looked back since.
Sometimes you have to be patient. I had to turn down an opportunity that may not have been the right fit and remain patient until the right opportunity came along.
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 want to recognize I’ve had a lot of help from family, mentors, and colleagues.
I am most grateful to my fiancée Brooke. She is my biggest supporter. She was there when I started the CFP® process when I began Safe Landing Financial and now as I am pursuing the CFA (currently a Level II candidate).
She helped most with giving me the confidence to leave the corporate world. Without her, I wouldn’t have been able to start up when I did or become the type of financial advisor I am today.
Having her see all of my hard work and struggles makes celebrating wins more meaningful and something we look forward to.
What advice would you suggest to your colleagues in your industry to thrive and avoid burnout?
To other professionals, I recommend finding what they’re passionate about and pursuing it. Make a plan for spending time on a hobby, joining a social group, or even volunteering. If continuing education or obtaining a license will help get you where you want to go, I recommend that too.
For example, as a financial advisor, becoming a CFP® professional helped provide credibility I was seeking.
What advice would you give to other leaders about how to create a fantastic work culture?
A work culture thrives when everyone is working for a common goal. This means starting with the people you are employing. Incentivize pay, offer meaningful benefits, and always treat employees with respect.
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?
That’s a great question. For busy professionals approaching retirement, here are the five most common things I’d make sure they know:
- Save appropriately and aggressively for retirement, especially when they’re younger. There are several ways to save for retirement. Contribute to an IRA or Roth IRA. The 2019 limit is $6,000, or $7,000 if 50 or older. Take advantage of Roth conversions in low-income years. This is especially important if they’re projecting higher taxes during retirement. Utilize the employer’s match for the 401(k) plan. This is free money sitting on the table. When possible, consider contributing more than just the employer match for their 401(k). Saving aggressively will give more options for retirement down the road. Consider utilizing a Roth 401(k) if the employer offers it. This is especially important if projections for taxes are higher during retirement.
- Don’t forget or ignore 401(k) plans after leaving a former employer. These plans generally have limited investment options and higher costs. When these 401(k)s are ignored, this can lead to inefficient asset allocation, lower returns, or more risk. Understanding options is essential when leaving an employer. Options include: leaving the 401(k) alone, rolling it to the new employer’s 401(k), rolling it into an IRA (or Roth IRA), or cashing out. Make a pros and cons list and take action.
- Make sure emergency funds are built up. No one can be sure when they’ll need cash for emergencies. Not having an emergency fund during retirement is especially difficult. Retirees often pull necessary funds from investments to cover the emergency and face sequence risk, issues with timing the market, and may not have forecasted these investments being used early in retirement. While each financial situation is unique, I recommend having a year’s worth of expenses in an emergency fund at retirement. Generally, I recommend having about six months of expenses in emergency funds when within ten years of retirement.
- Time in the market is better than trying to time the market. A retirement plan takes place over a long-term time-horizon. One’s investment strategy should be tailored to align with their plan. Having a portfolio designed to meet their investment objective and time horizon can lead to better returns and lower risk. There is no proven way to time the market. Doing so may result in inefficient asset allocation, lower returns, or more risk.
- Evaluate Social Security options and file at the optimal time, not the earliest time. Social Security is available to start at age 62 and must be taken by 70. There is a lot that impacts when one should start Social Security, such as health, life expectancy, divorce, or being widowed. Social Security accounts for about one-third of all income received by U.S. retirees. The Social Security Administration frequently gives terrible advice. According to a 2018 report by the Social Security Administration, their information has cost Americans $131 million (1). It’s crucial to take all aspects of one’s unique financial situation into consideration for Social Security. According to United Capital, 96% of Americans are claiming Social Security benefits early collectively, losing an average of $111,000 per household (2). If one starts Social Security within the last 12 months and is having second thoughts of the early filing strategy, they can correct the mistake and delay Social Security. This can be done by filing Form SSA 521 and paying back Social Security benefits.
Lets 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?
The three most important financial issues to keep in mind before retiring are Social Security, building an emergency fund, and planning a retirement distribution strategy.
- As I previously mentioned, there is so much that goes into filing Social Security at the optimal time. Getting this right can add a significant impact on lifetime income. Getting this wrong can create an ongoing financial burden.
- Maintaining an emergency fund is vital at any time in one’s life, but especially as approaching retirement. Experiencing a bad sequence of returns can hurt the outcome of a financial plan. Pulling investments at the wrong time may multiply the impact of sequence risk.
- It’s incredibly essential to manage a tax-efficient retirement distribution strategy. Required minimum distributions (RMDs) don’t start until age 70.5. There are ways to limit taxes during retirement and ensure one will reach their desired income. For example, let’s say they are starting retirement at 60 and have an equal sizable portion in an IRA account and taxable account. It may be advantageous to consider Roth conversions from the IRA, and tax-loss harvesting and charitable contributions from the taxable account. It’s also important to focus on recognizing long-term gains over short-term gains when possible. Like I said, each financial situation is unique, and it’s crucial to understand the entire picture to offer sound financial advice.
If you had to advise your loved ones about the 3 most important health issues to keep in mind before they retire, what would you say? Can you give an example or share a story?
The three most important health issues to keep in mind before retiring are healthcare options until Medicare, long-term care insurance, and disability insurance.
- Some people enjoy working until they can’t. Others prefer to enjoy retirement as soon as possible. Others are somewhere in between. If they’re going to retire before 65, it’s imperative to know all the options available. Maybe their spouse continues working until they reach 65. Perhaps they work part-time for benefits, or their former employer offers retirement benefits. If none of these options apply, other considerations may include the Health Care marketplace or COBRA. With healthcare costs rising exponentially, it’s vital to evaluate options and decide how to take action.
- Ages 55 through 65 are considered the sweet spots for long-term care planning. There are many considerations when deciding if long-term care insurance is right for someone. It’s crucial to work with an advisor they trust. While there is not a specific dollar amount needed to apply, I think it’s particularly essential for families with between $1 million and $5 million in investable assets to consider long-term care. For those below $1 million in assets, there may be other strategies worth considering. For those above $5 million in assets, self-insurance may be a preferred option.
- There is so much to consider when evaluating disability insurance. Disability insurance is arguably just as important if not more important than life insurance. Approximately one in four 20-year-olds become disabled at some point in their career. Social Security disability insurance covers very little. Often, employers may offer disability insurance as part of a benefits package. After-tax contributions result in tax-free benefits while pre-tax contributions result in taxable benefits. It’s vital to identify gaps in one’s disability insurance and make sure they’re fully covered.
If you had to advise your loved ones about the 3 most important things to consider before choosing a place to live after they retire, what would you say? Can you give an example or share a story?
The three most important things when considering where to live after retirement are lifestyle, family and friends, and the cost of living.
- For lifestyle, it’s important to determine how they plan to live in retirement. Will they travel? Do they maintain multiple homes? They’ve worked hard their entire life. They should evaluate how they’re going to enjoy the retirement they’ve earned.
- Family and friends should be considered when planning where they’ll live. Will they be caring for elderly parents, or can they be close to their children? A lot of my clients prefer to be closer to their family.
- The cost of living can be significantly different depending on where they live. Northeast and West coast are particularly expensive compared to Midwest and South. Some states offer no income tax, which can be beneficial for large investment accounts in the decumulation phase. However, these states may have high sales tax or property tax. It’s crucial to consider healthcare costs for their desired area, as well.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
The most effective idea I could share and promote is the best place to find a financial planner that can help you reach your unique goals.
With all the rules and regulations in the financial service industry, I understand hesitancy and pressure for choosing the right advisor. Make sure they’re going to align with your values.
People should be wary of salespeople in financial services. You want to work with someone that is on your side and not incentivized to sell you products.
There are three considerations to look for when searching for a financial planner that will work in your best interest. They should be fee-only, a fiduciary, and a CERTIFIED FINANCIAL PLANNER™.
Advisors that are fee-only won’t sell products that benefit them more than you. These advisors should offer transparency in the costs you pay and be able to answer how they get paid. Terms such as commission or fee-based would signify that an advisor is not fee-only.
Advisors that are not fiduciaries may put their interests ahead of your investments. The majority of advisors serve under the suitability standard instead of a fiduciary standard. Suitability requires checking a few boxes to make sure a product can be sold. For example, say there are two identical investment products, with option one costing less and option two costing more and paying the advisor more. An advisor following the suitability standard would likely choose option two. The advisor following the fiduciary standard would choose option one. It’s vital to limit conflicts of interest when working with a financial advisor.
Advisors that earn the CFP® designation have gone through a rigorous education and exam and are required to demonstrate planning experience and adhere to CFP Board’s ethical standards.
There are several resources to find the right fit. One of the better resources is the XY Planning Network’s Find an Advisor Portal. Financial advisors listed on their platform are required to be fee-only, fiduciary, and hold the CFP® designation.
Is there a particular book that made a significant impact on you? Can you share a story?
Tuesdays with Morrie has impacted me the most. Ever since reading that book, I’ve made it an active goal to live in the moment and value the choices I make and the people I spend time with
Can you please give us your favorite “Life Lesson Quote”? Do you have a story about how that was relevant in your life?
“Your time is limited, so don’t waste it living someone else’s life.”
– Steve Jobs
I need to maintain my bucket list and cross off opportunities when I get the chance. I love getting adrenaline rushes, such as the time I skydived.
It was really important to me to leave my personal touch in this industry. I knew I couldn’t have those personal connections or do things my way in corporate America, and that is why Safe Landing Financial is so different.
What is the best way our readers can follow you on social media?
Thank you for these fantastic insights. We wish you only continued success in your great work!