April 26, 2024

Why I'm skeptical of a person's $3 million retirement plan

On this week's episode, we debate whether or not an emailer should retire with his $3 million plan. It's not as cut and try as you might think.

Episode Transcript

Peter Dunn: [00:00:00] All right. So walking through airport security is, is always an adventure. I mean, it's been an adventure for, for years. Yeah. You just want to get on a flight. You got to go through an X ray machine. You got to unpack your toothpaste. You got, you got stuff you got to do. I was in the Charlotte Douglas international airport yesterday and I saw something I.

I didn't even think was possible. I made it through TSA security. I'm looking back cause I hear this noise and I look behind me and there is a woman with a bath and body works sack, but like the big ones with the handles on it, you know, like a grocery style sack. I don't know what that's called. I almost called it cardboard, but it clearly isn't.

And that sack had just busted out the bottom. Something had fallen on the ground out the bottom. And I'm thinking, ah, that's, that stinks. She should have gone with a duffel, but she went with the Bath and Body Works body spray bag. And [00:01:00] you can tell I have a 15 year old daughter. Her room is filled with 30 different flavors of pear mint and these sorts of things.

Anyway so out the bottom of the bag become two giant blocks of cheese. Two giant, I, you know, look, I'm not a cheese weight guesser per se, although I've had my fair share. I would dairy guess, I would say 20 pound blocks of sharp cheddar to fall out and the first thing in my mind is. I mean, those are basically plastic explosives.

Like they, they look like they're packaged like C4. I'm like, how did, how does she get through with these blocks of cheese? You could stuff stuff into them. I don't know if x rays can see through queso. Nah, I don't know. The next thing I see is that there's mold. All over the cheese that sort of cryovac and then [00:02:00] in Sharpie is written.

This is like going on, like right behind me in Sharpie is written not good on both blocks of cheese. This woman was bringing secondhand cheese through TSA and it broke the bag. Ladies and gentlemen, the Pete, the planner show. Hey, everybody. That's disgusting. It left me confused for 45 minutes. I was like, okay, well, if it was melted cheese, can she get it through?

Like, or if it was melted and blend with milk, then it's a liquid and you can't take like, but no, it was hard molded cheese and she was taking it somewhere. Clearly smuggling something. Kristen, what are the chance? Okay. So Kristen, we each get a guess here. Okay. Do you think she was at her home base traveling with molded cheese?

Or do you think she was returning home and had been able to procure some molded cheese that was a great deal? What, what's the, the, the more likely scenario?

Kristen Ahlenius: [00:03:00] I think the more likely scenario is she was bringing someone moldy cheese. Oh,

Peter Dunn: from her home base? From her home, yes. Okay, Dame? I think she was returning with it.

I get the gut feeling she was returning with this great bargain. Like a, like a closeout clearance cheese.

Kristen Ahlenius: You didn't ask her,

Peter Dunn: David notes. What we're all thinking is there is always good cheese on the inside. That's the thing. I mean, if there's probably 20 pound blocks of cheese there's a good 18 pounds of good cheese there.

Sure. If you get a significant enough discount, it's worth the work, but Kristen, would you consume food that on the outside packaging? The retailer marks, not good.

Kristen Ahlenius: No.

Damian Dunn: No. Could've just been for cosmetic reasons.

Kristen Ahlenius: No, I get in my head about stuff like that. I, no, I wouldn't be able to do that, I don't think.[00:04:00]

Peter Dunn: Rick says she could make friends on the flight if they just let her travel with a cheese knife. That's a really good point. That wasn't exactly his joke, but mine was better. Hey everybody! Dame, how are you? I'm well, how are you? All right. Running around a little crazy. Get to wear a tuxedo tonight.

And the good news is it now fits. There's nothing worse than paying money to have someone make something bigger because of the money you spent on food and the lack of money you spend on fitness. I mean, you might've really enjoyed that food. So the jacket fits great. The pants he can only take out so far.

I look like the lead singer of an emo band. Nice. Maybe depends on what you're into. Kristen, how's your life? I, I, I talked to you, I talked to you a lot this week and we actually have a meeting this afternoon. Just you and me.

Kristen Ahlenius: I [00:05:00] know. I'm sorry. You know, it is, it's, it's a lot of conversations, not just with you, just across the board.

I, I like my work from home life that allows me to like decompress, right? Like that's one of my favorite things about not working in an office is I have that, like, I feel like I'm a very. introverted extrovert. And I love that time to decompress. And like, I can be like the center of attention. I can do the things and be at the party and have all the fun.

But when I go home, I just want to like truly decompress and talk to no one. It's my favorite part about working from home. I've had a lot less decompression time here lately and that's okay.

Peter Dunn: I feel like when you're away from the show, like you're the life of the party away from work life, the party in your community amongst your friend group.

Is that, is that fair? Like, do you recharge by being around people? How long have you known me a very long time you missed it you you're clearly saying this was [00:06:00] sarcasm, right? I was just saying that I Feel like people enjoy you outside of the office You don't do it in the office too, but you put your energy But like I feel like you recharge by being around others on the

Damian Dunn: weekend.

I so I Enjoy being around other folks. That's absolutely true. I Don't necessarily like being the center of attention No, sure. Sure. Okay.

Peter Dunn: Let's do a show. I have a proposal here. I, I've been traveling this week. I'm not prepared. I'm never prepared, but I'm extra not prepared today. So much so that I literally have no idea what we're about to do.

Kristen Ahlenius: None.

Peter Dunn: My proposal is Let's just go with it. Let's just, let's just start. I will find a way to introduce a topic of which I don't know what it's going to be in some mystical way, and then we will do it. Who's game? [00:07:00] I

Kristen Ahlenius: suppose

Peter Dunn: I feel like that's what we did last week. No, it's a little different. Who is who, who am I going to first here?

Don't tell me any details. Just say, who am I going to first?

Kristen Ahlenius: I don't like to read. I feel like you should go to.

Damian Dunn: I can read the questions. I mean, that's not an issue. That's fine. Okay. We think we think we can get two segments out of the question. One of the questions. I don't. We'll see where it goes.

We'll figure it out. This is

Kristen Ahlenius: great. Are you going to lead with that one game in case we do get two segments out of it? Yeah, too much.

Peter Dunn: Too much. Kristen, two years ago or whenever you started on the show, you are currently vomiting.

Kristen Ahlenius: Oh, yeah, I've, I've pretend I've unplugged my internet from the wall and pretended like there was an outage.

Peter Dunn: I was talking to our new guy. Upstairs about 15 minutes ago and I was like, Hey dude, I've got a scratchy throat from beyond the road. I need you to step in. Kristen will host and Dan will be there and you just need to go.

Kristen Ahlenius: Bless [00:08:00] him.

Peter Dunn: He urinated on himself. Okay, in three, two, one. This week on the Pete the Planner show, we answer your money questions.

Here's how the show works. You email askpete at petetheplanner. com. That's ask the K. I don't know how. Pete at PeteThePlanner. com and we will answer your question on the air or your email will come in and it'll look like spam because you have a bad subject line game and it'll just get ignored. Joining me as often is Kristen Alanius from Your Money Line.

Hello, Kristen Alanius. Hello, Peter Dunn. You claimed I mispronounced your name yesterday accidentally when in fact I did it on purpose.

Kristen Ahlenius: Likely story,

Peter Dunn: Damian Dunn, easier name to pronounce joins us as well from your mini line. Hello, Dame. Hello, Pete. Guys. This week, this show has been on my mind and that's why I'm so thrilled to talk about the topics we are talking about today.

The first one is [00:09:00] something that I'll be honest. I lay awake at night thinking about it for myself. So when others ask about it, I am, I am understanding of that. And so with that, Lead in I turned to Damien Dunn to help us peel back the the curtain on this Dame Help others understand what

Damian Dunn: keeps me up at night.

Yeah Well, we got a question that just came into our inbox about five minutes ago that I want to share with everybody. Yeah

Peter Dunn: Yeah

Damian Dunn: Dear Kristen and support crew. Can I get a timeout timeout granted Pete? What's the best way our favorite way to? That we've been referred to in relation to Kristen in these intro emails

Peter Dunn: two guys in a genius are Dear kristin and co.

What do we I don't know? I I I like the creativity that's being

Damian Dunn: shown though I I encourage that highly to continue

Peter Dunn: what I don't like like I really like in emails I don't like when people compliment me in the first line, but [00:10:00] I do love when they compliment Kristen.

Damian Dunn: Yes. Go ahead. Okay. I'm 53. Not this is the emailer.

Not me. Yeah. 53. And in need of a change, I've done what I think is a good job preparing for retirement. I've got about 3 million in various retirement accounts between IRAs, Roth IRAs, 401ks, and another 1 million in an individual account and 250 in cash. K, not dollars, 250, 000. My wife and I have two kids, seven and 10, and we've managed to save about 125, 000 for their future education.

We will continue to save for their education in my retirement. If we don't put away enough, we'll take out a loan to cover the difference. We have two houses, both with mortgages, but we plan on selling the one we're currently in around age 60 and moving into the other. We'd be able to pay off the remaining mortgage on the other house and still pocket about 400, 000 assuming real estate doesn't do something crazy.

I make close to 150, 000 per year and would like to maintain [00:11:00] that in retirement. I'd really like to call it a career now, but I'm unsure if I can financially manage that with my goals as outlined. Thanks, Douglas.

Peter Dunn: The part that resonates with me is having children. And that's what I mean when I talk about, like, I think about that a lot.

So this guy had children at 46 years old. He had his second child so that child will only be 14 when he's 60, which is what he's outlining here So what's the real question? I i'm like I heard his situation. What is his question?

Damian Dunn: When can he retire? Can he pull the cord now at 53 and walk away? Chris

Kristen Ahlenius: 10.

That is my least favorite way to be addressed in emails. So here's the thing. I, in reviewing this question, the thing that is the hardest for me to wrap my head around is this idea that someone who has invested [00:12:00] presumably pretty aggressively is going to be okay with What it will take from an investment management perspective to be able to pull this off.

Damian Dunn: Yeah, because the mindset of being able to stash away a significant amount of money, unless there were just some crazy home runs hit with investment choices. Is going to get flipped on its head really, really quick because in order to bridge that gap between now and the time you are going to start working on taking money out of the qualified accounts, you're going to burn the non qualified account.

You're going to have nothing left by the time that's all over with now. You'll be able to replenish some of that when you move from two houses to one house. So you'll, you'll end up with a nice little position after that change. However, flipping the switch and going from accumulate, accumulate, accumulate to spend, spend, spend might be a really tough switch.

Here's what I'm trying to get my head around. Is this a [00:13:00]

Peter Dunn: burnout? Sounds like it. And if something goes awry. I always wonder, like, well, how quickly can a person find themselves reemployable? And so I kind of want to know, they didn't mention being able to just go back to what they were doing if things got weird, right?

It's not provided for us, unfortunately.

Kristen Ahlenius: See, Pete, that's where I think, I think this person just needs a sabbatical. I think they need to just take some time, spend some money, Until the kids are out of the house, I just like, I don't know, I maybe I'll feel differently when I'm 53, but I have a really hard time thinking that at age 53, if you're a high achiever that you think I totally get, you could be burnout, but to say that like I'm truly exiting the workforce at 53 personality wise just doesn't seem like it really fits.

Peter Dunn: Okay.

Damian Dunn: Go down. I'm sorry. [00:14:00] I stepped on it. Kristen, were you suggesting the sabbatical lasts until the kids are out of the house? Because if that's the case, then it puts it right up to traditional retirement.

Kristen Ahlenius: Yeah, but if the concern, so maybe sell one of the houses now to help bridge the gap a little bit. I may, I don't know, or at least until the kids are more independent, like driver's licenses.

So maybe six years. I feel like

Peter Dunn: the kids ages have a lot to do with this, at least in my mind. So my perspective on this is just through that lens. Like, so this person until he was 43, had no children for what, for what we know. Right. So it was 43. So he lived what? 20 years of adult life without kids. So Kristen, when you say be a, you know, a 53 to be like, I'm done.

I hear that. And I'm like, okay, well, in my situation, my kids would be a lot older [00:15:00] when I'm, when I'm 50, they both be out of the house. They'd be out of the house. I'm 53. Yeah, I'm done. If I mean, I'm done. Bye. See ya. 10, 000 is not happening. So I, but I think it's because his kids are young that I, I finding myself hesitate cause that feels like there's more risk when kids are that young.

Damian Dunn: If I go through my mental checklist of things that need to be accounted for, if he makes this jump into retirement, what do you think the need for life insurance is right now?

Peter Dunn: That's a great question. Cause typically when, You retire short of a state planning. You wouldn't need to replace income unless it's derived from a pension or social security alone.

And at this point he's retiring on his assets. So theoretically he wouldn't need life insurance. I mean, other than a state planning, but it feels weird saying that doesn't, I know it does not for me. Why?

Kristen Ahlenius: I'm just always quick to be like, [00:16:00] I tend to be a little more free spirited about the life insurance conversation, truthfully.

Understandably. Yeah. Right. Like we, we have our own personal biases, but I don't to your point is if we're making the argument, can he financially retire now? Can we really make the argument that he needs life insurance?

Peter Dunn: I think we all arrived at the same conclusion, but in different ways to that question, right?

Like it feels weird that he doesn't need it or wouldn't need it. And that's why I almost feel like he shouldn't retire the idea of it. Like, I don't know. I can't believe I'm at a no. I'm at a no, and I don't want that to influence the emailer. It just right now in my life, based on what he's presented, it makes me nervous.

I feel like there is a backup plan, but it's not strong enough and it's too far out and it's selling that house unless they're willing to sell the house before.

Damian Dunn: It would be interesting.

Peter Dunn: Yeah, I know based on the [00:17:00] age of the kids and the weird thing is the person might be a yes because they want to spend time with the kids and they've already had adult life without the kids and I have not had that much time.

Dame, let's do this. Let's take a break. Everyone calm down. Kristen's going to buy life insurance and after the break more of the Pete the Planner show. I'm Pete the Planner. Do you guys want to hear a heartwarming story?

Kristen Ahlenius: Am I going to think it's heartwarming?

Peter Dunn: I think so unless you're dead. We have to find out.

I was, I was talking to a gentleman who's about, I got to make up some facts. I got to guess some facts, probably 60 something. Blue collar guy, blue collar fella guy can fix stuff though. Like he's a, he's like a man, he probably had a flashlight in his pocket. Possibly, you know, like he's, he's done these sorts of things.

I'm talking about his financial life. He's walking me through some stuff and he. About 20 years ago, had some [00:18:00] money and bought some rental properties, two or three of three of them. Really cheap, like crazy cheap. And because this person can fix stuff, it fixed them up and rented them. Okay. And so he's telling me about his retirement plans and what he's got and what he's going to do.

And he said, well, In six months, I'm signing them over. Anyway, I was like, what was he said? I bought them so cheap and I was able to fix them and make them nice for the people. Those three renters have lived there for 20 years. I'd never carried a mortgage cause I had some cash to pay for them. So I've done it before when I got my payment, when I got their rent payment, I just invested it into the market and it's done very well.

So I'm just signing the house over to them on the 20th year mark and say, Hey, thanks for being a good renter. This helped me and my family.

I was, I was speechless. I didn't, I had [00:19:00] not seen that level of humanity in quite some time. That's unbelievable.

Damian Dunn: Oh, Kristen agreed. It was heartwarming. Wait. She said is unbelievable. She might be the

Peter Dunn: dumbest thing I've ever heard.

Kristen Ahlenius: No, no, no.

Peter Dunn: Are your

Kristen Ahlenius: heart warmed? Yeah. A little bit. Yeah.

Damian Dunn: A little

Peter Dunn: bit.

Kristen Ahlenius: The Grinch's heart grew.

Damian Dunn: Do you know how I stood up? I clapped. That's fantastic.

Peter Dunn: I thought you were shifting cause you're older and you didn't want your sciatica to act up. I. I couldn't believe it. And what it made me think about on my drive in this morning, as I knew I was going to tell you the story is like, it's so easy to judge a book by its cover.

It's so easy to look at this blue collar fella who, you know, just talking to him. He's just a dude, you know, he's so secure in his retirement. His plan is so good. He will have given five houses away throughout his landlord, given five houses away. That's

Damian Dunn: nutty. That's, [00:20:00] that is somebody who should be celebrated and know, I bet maybe five families outside of the five families he's impacted with those houses know about it.

It was really inspiring

Peter Dunn: and I was like, Hey, whatever my path might end up being, I'm not giving five houses to anybody, right? I've done some fun things, but like I'm giving people five, like that is life changing. For those families, you know, we talked about last week on the show, that is a primary residence, the ultimate wealth generation tool.

Or and or not wealth. Yeah, and and in this case he has changed though that family's

Damian Dunn: future.

Peter Dunn: Sure That's great.

Damian Dunn: No mortgage instant equity in all of those places. I mean, it's Truly life changing and a property tax bill that they'll be late

Peter Dunn: on i'm kidding No, but I I did think it's like when you win something And you get the upkeep.[00:21:00]

I mean, that's a thing. Like, that's the, I just ruined the story, didn't I? Didn't help it. I mean, that's a whole, I mean, a homeowner, that shift after 20 years of someone taking care of it. It's true. I have. That's true. Maybe,

Damian Dunn: maybe the hire him as a maintenance guy.

Peter Dunn: We'll just sign the house back over. I'm ready for the next segment.

Robert, I've got to put this up. Wouldn't want to be the tenant out in year 19 of the lease. Oh, Bobby. Robert, what forms of Robert are you willing to accept? I think you're like Robert and Charles are two and William are those names where there's five, six different options and some of them are good.

Like Kristen, Kristen will take freely. She'll take Kristen. She will take Christina. She'll take Christie and Chris, nothing else. Love

Kristen Ahlenius: them all.

Peter Dunn: Yeah. So

Damian Dunn: Robert, I'd love to know yours. Molly's Molly's [00:22:00] way more flexible than I thought too. Apparently Mary is a, what's her actual name? Okay, she's

Peter Dunn: She's a fraud.

She's a fraud. She's a fraud walking around. It's like

Damian Dunn: ben ben's name is not ben. It's john Yeah, that is a little concerning to me that you've got so many people close to you Yeah that don't even go by their real

Peter Dunn: names Never mind, you teach me how to dougie collins Like, what's his real name? Who knows?

Hard to tell him. He never heard of that song. His name is Doug. He's never heard of the song. Teach me how to. That's not

Kristen Ahlenius: true. It is true.

Damian Dunn: I believe that. I believe that. It's a great song. I've never heard it in its entirety. All I've heard is the part that everybody danced to on TikTok.

Peter Dunn: I, I've been a Bob Bobby, Robbie in my life.

Chose by others at various times. Mom still calls me Robert. Fair. Okay. I'd go with Bobbert Dame. Are you reading the next question? Of course. Three, two, one [00:23:00] back on the Pete, the planner show, answering your money questions, my Sergeant at arms, Krav Maga master from Northern Indiana, Damian, Andrew Dunn, let's hear the question.

Damian Dunn: That was quite the introduction. Thanks for that. Alright Dear Pete, Dame, and Kristen, Don't care for that. I like the other ones better. Yeah, dear Pete, Dame, Kristen. I mean, it's accurate, but it's not. Whatever. I'll keep my questions short and sweet. No one does that.

Peter Dunn: No one does that.

Damian Dunn: I know Pete has a lot to do today.

My daughter's planning to attend college semi locally. I can't believe you didn't ask for a timeout. Semi locally? What is semi locally? Semi locally, where the homes the online university. Semi locally. Anyway suggested living at home to save money on housing and other expenses. I want to support her because life is just [00:24:00] unaffordable these days, but I'm also curious about the potential negative impacts.

Should I let her live with us during college and possibly after graduation while she gets on her feet? What are the financial and personal things I should be considering here? Thanks. That's awesome. Just thanks.

Peter Dunn: Kristen, my dark heart has softened on this issue over the years.

Kristen Ahlenius: Yes. I was so hoping when I saw this question, cause you used to have an opinion.

Peter Dunn: I still have an opinion. It's just a little bit more realistic.

Kristen Ahlenius: Okay. Should we rewind the tape? How did you used to feel about this?

Peter Dunn: Well, first off, my head was warmer because I had hair and so that gave me a different level of comfort. I used to say after graduation, absolutely, they're moving out.

They have to move out post graduation. Now I think if done strategically before the fact can be a really good financial [00:25:00] technique to make sure they launch permanently and for good. Right. That's how I feel now, but I used to feel like, no, they're on their own. And I just feel like what's happened in the last 20 years has proven that to not be realistic.

Kristen Ahlenius: So good. What do you think, Chris? 10. I, the most dangerous thing. So I do have access to the email and it says, I'm curious about the potential negative impacts. And right before that, the emailer says, because life is just unaffordable these days. I don't like that. My hot take. I don't like that. Exactly. Is that statement, line of thinking, conversation track is likely the most dangerous part of all of this?

Because whether that is objectively true or not, whether life is truly unaffordable, doesn't really [00:26:00] impact the fact that you still have to participate in these experiences. If she wants to go to college, if she wants to move out, like those expenses just are what they are. I mean, yeah, obviously we can do things to reduce certain areas or what have you, but life is just what it is and isn't going to get cheaper.

So just dwelling on that and just offering that blanket statement, I think is potentially one of the most dangerous things here.

Damian Dunn: I think there's a real chance that Providing this cushion that you potentially allow bad spending habits to creep in and ingrain themselves in the child that you are trying to help out, making future life outside of your house even that much harder to attain because now you have to make changes to what you do and how you're doing it in order to afford the basic necessities of food, shelter and clothing.

Peter Dunn: Both of your comments have set this tender ablaze. I'm feeling more aggressive. Okay, here's my concern. Number [00:27:00] one, if a person going to get an education, which some would say is how they can leverage that education to earn an income and provide a life for themselves. If the if the risk is taken away, From, oh, you have to leverage that to get an income to move out.

Then you would see someone not take the, the choices necessary to find a sustainable career. I, I think a person might choose a different major, good, bad, or otherwise they, they may not realize that at the end of the experience. The point is to get out when there's so much cushion. I think I flipped, I think I flipped

They can, they can live there during college. 100%, especially semi local, which is what, two states away? In the Midwest. I don't know. What do you, what do you think?

Damian Dunn: What if you say, all right, you can move back in, but we're going to set up a budget where you are paying some kind of rent and you are contributing to [00:28:00] food, whatever.

Absolutely. And you set them up on that, and whether or not you choose to actually use that money for expenses in the house, or you set aside in a savings account to, Hopefully give them a little down payment for a house or however long this arrangement is going to last, but you start structuring their financial life closer to what realist what they could realistically expect once they move out.

Kristen is shaking her head. No, no. And I'm curious as to why this great idea doesn't work for Kristen.

Kristen Ahlenius: It doesn't work because. That's the parent doing the work for the child. They're still not setting them up for success. If you say like, these are the things you have to do, you're still providing the guardrails.

Are too like we're not giving this child enough room to spread their wings and be self sufficient

Damian Dunn: You just chuck them into real life and say sink or swim and you're gonna make some really horrible decisions in the meantime But I can help prevent you keep you from doing that. No, but you know what [00:29:00] not my role anymore up to you kid

Kristen Ahlenius: No, that is not what I said.

What I'm saying is this is dependent on the level of openness you already have in money conversations with your kids. This plan does not work for the household that doesn't already include their Children and age appropriate money conversations. You can't just suddenly think your kids going to turn 18 and we can have these conversations with them about money.

So if that's not happening here, I don't think that it works. But if there's already Some level again of age appropriate conversation happening. Then if we keep money conversations open, but not super detailed specific, I think this works. If the parents know that the child is paying for school, if that's what they're choosing to do, if they're working the right amount of hours, if when they get done with school, they're paying off any student loan debt, et cetera, as long as they know they're doing the right things, I don't need I don't think they need to be, like, transactionally [00:30:00] involved.

Peter Dunn: Well, but aren't they at some level trying to eliminate taking on student loans on the first part of this?

Kristen Ahlenius: Maybe they can't. I mean, what if, okay, so let's say for example, let's say this student lives Like close enough that they could go to a public university, but it's still not cheap. Right. We're talking 10, 12, 000 for in state tuition.

How realistic is it to think that a child who, let's say they're pursuing a really aggressive degree program, can they re can they afford to work and pay off school as they go?

Peter Dunn: I feel like when the person said life is unaffordable. you off. I feel like Dane D. Okay. So Dame, you're the third party here.

Cause Kristen's got these hot takes and that they were formerly my hot takes 20 years ago when I was her age. What, what Dame, what is it? Will, will Kristen soften? Why did I use two t's there? Will [00:31:00] Kristen soften over over

Damian Dunn: the years on this topic? Unlikely. I think she's, I think she's here. I think this is where she's at and she's firmly planted an anchor in the ground.

That's what she's gonna do.

Kristen Ahlenius: I feel like I'm already softer though than your take from previously. I'm saying they should do it, but it's very, it's a very delicate thing. And we have seen so many situations of where this goes so bad, like so bad. And the child is worse than they were before, but the parent was just trying to do the right thing.

Peter Dunn: I feel like I should have started with a disclosure. Once I heard the question, I did a series for good morning, America, about a decade ago, exactly where I went around the country and kicked adult children out of their parents. I didn't know. It's amazing. I've I like, where are they now? Like, I feel like I need to go back to those families.

I've ruined. Don't think I won't look him up. Please don't. All right, let's take a break. The next topic's gonna blow your mind. Like, it's so [00:32:00] unexpected. And that's what we will do next, right here on the Pete the Planner Show. I'm Pete the Planner. Yeah, I did that, Andy.

Damian Dunn: It was only two segments, though, or two two I don't know.

Didn't they only ever air two of them? Yeah, they didn't air two of them.

Kristen Ahlenius: But, I think, seriously, though, Damien, I'm thinking of a specific situation that I think you and I both had to work on that. I mean, it was, it was so, it's just when that situation goes bad, It goes bad. Oh my, that's unflattering. Thank you for that.


Peter Dunn: was wrong with that? Chris, I was going to ask, but then I was like, no one's looking at you in this picture. I have a screenshot livestream right now. Of Kristen and her good little boy in a Zoom meeting this week. That was the best. I was in a weird, I'm always in a weird mood, but that, that was the best.

Which dog is that?

Kristen Ahlenius: That one's Mojito [00:33:00] and he, they're usually not involved in meetings at all, but we have this standing meeting that has gotten in the way of what used to be their previous F. O. O. D. time. And so if he gets up too early, he's like confused as to why we have to wait a little bit longer. So he like gets up in my lap during that meeting and he's like hello, I would like some breakfast please.


Peter Dunn: I love two things that have just happened in this world. Number one, she just spelled food because the dogs are at her feet. Right. Right. And two, one of the foremost experts on launching into adulthood, Caitlin Alanius notes, living at home after college set me up. I know.

Kristen Ahlenius: I did. I know. That's great. My sister is an example of how it totally works.

Right. She

Damian Dunn: As long as the parents and the child have some sort of agreement on how this is going to play [00:34:00] out, and you stick to it, and there's some discipline, I don't see how It's a fantastic opportunity to Set your kids up for long term financial success. You send a docusign and they contract. They're over 18.

It's, it's enforceable. Not like Columbia house records back in the day.

Peter Dunn: Yeah. Look, see, we're almost getting into the student loan forgiveness story. Eric notes community college for two years equals almost no debt. Yes. You know? Okay. And now we have, man, we talk about this. We come at this story from so many different angles and arrive at the same point.

Of college on affordability. Oh do we have another topic here? The radio audience needs stuff. No, I can go. I got some stuff.

Kristen Ahlenius: The only I had this outstanding question, but it's also in the housing arena. So I don't know if we want to do it, but [00:35:00] I had, I had posed the question a few weeks ago and we kind of forgot about it of does the percentage of income you spend on your home matter less as your income?


Peter Dunn: let's do it. Let's do it. I've done no math, so it's going to be perfect

Kristen Ahlenius: deal.

Peter Dunn: Okay, let's do it. Agree. Back on the Pete the Planner show hitting the hard hitting topics that we take weeks to come up with. Right now, Kristen Alanias, Damian Dunn, no relation to each other, nor me. Recently, we've sort of surfaced the idea that potentially the percentage of Of your income you spend on a mortgage or rent payment matters less and less the more money you make how much validity do you believe exists within that that idea dame?

I'll start with you some people call you the real estate mogul

Damian Dunn: Yeah, and you know what? Kristen and I have had some really deep conversations [00:36:00] on this and frankly, I'm just I've been really taken with her thoughts and positions on this. And so I'm going to let her go first. I agree, Kristen.

Kristen Ahlenius: I think that it matters a lot less as your income increases because percentage wise The other things don't increase to the same level if you have a higher income.

So like if you go, for example I'm not good at math. Pete, if you have, if

Peter Dunn: you,

Kristen Ahlenius: I'm not good at math on the fly. Okay. So let's say someone easy math makes a hundred thousand. We would recommend that they spend how much on housing,

Damian Dunn: depending on part of the country, anywhere between what 25, 35%, somewhere in there.

Take home pay. The

Peter Dunn: 100, 000 take home pay. 8, 333 a month.

Kristen Ahlenius: And then we, in our ideal budget, you would say they spend how much on food, [00:37:00] Pete?

Peter Dunn: Of that 1, 000 a month. 1, 200. Oh, no, no. Yeah. 12, 000 a year. 12%. 12%. Correct. Yeah.

Kristen Ahlenius: So does someone need 24, 000 a year? for food if their income increases to 200, 000.

Peter Dunn: Now, look, when you brought up this topic, My thoughts went to food and, and I think you're, you're right, based on food and, and food alone and utilities. I, I, I think there's just certain things that can't scale all the way up. And I actually think the point is better illustrated by jumping not from a hundred to $200,000 of take home pay, but like 100,000 to $400,000 of take home pay.

Because at that level, no one needs $4,000 a month for food.

Kristen Ahlenius: No,

Damian Dunn: I mean, I could easily consume a good chunk of that with some transportation costs. I

Peter Dunn: was talking to a person in the last couple of weeks and I was, they were asking me a question. I felt [00:38:00] like I was on Kristen and Dame's team for a second.

They were asking me a financial question. I was doing my best to answer it. So as Kristen and Dame know, one of the first things you do is you say, well, what's your household income? Right? You just gotta, you gotta actually do the math that we're just talked about, like, cause I'm trying to figure out what they're spending on housing and all this.

And the person hit me with five 50. Right. And I don't do your guys' job anymore. I haven't done it in a while. It's been a while since someone said, yeah, I make five 50. And it sort of hit me in the chest a little bit. I was like, oh, good for you, . Holy cow. Good poker face. Yeah, good poker face. But the, that's one of those situations and I, this isn't a rich get richer sort of thing.

This is where the wealth gap is nearly unsolvable because that person. Can take care of their basic needs and even be extravagant on housing And still save 20 times more than someone who's making 100 grand.

Kristen Ahlenius: So When we [00:39:00] started this segment, I don't remember which of you said it you said Mortgage or rent.

I don't think this works for both

Peter Dunn: Okay. So let's, let's go a different direction. Let's say you live in Manhattan, one of my top five favorite cocktails, Manhattan you're more likely to rent than to own and your income is likely to be higher.

Kristen Ahlenius: But what happened? You can't, well, I guess if you're still hitting your retirement goals, but one of the things that we talk about a lot on this show is being mortgage free.

When you reach retirement, so if you're someone who's renting, spending a larger percent of your income on rent, how do we reach a place where we retire successfully? As a renter,

Peter Dunn: you move to a different city. I don't know. That's actually an, it's an amazing question. It puts more pressure on your assets a lot more, right?

But Dan, [00:40:00] okay. So let's go back to five 50. I mean, sure. Well, you make five 50. You've got to be saving a hundred grand a year. Oh yeah. And if you're not, that's a massive problem.

Damian Dunn: And that also means not only are you maxing out your employer retirement plan, you're putting a good chunk away in non qualified individual or joint accounts as well.

Peter Dunn: It actually gets hard to efficiently save a hundred thousand dollars if you're making five 50 and these are not like, Oh, so, Oh, I feel so bad for them. No, but it just like from a tax sensitivity standpoint, it's actually kind of difficult.

Damian Dunn: We just use a whole life insurance policies and everything's fine.

Peter Dunn: Were we going to talk about that on the show this week? No, absolutely not. No, I thought you had to. I thought that was the thing. But hey, I'll do it. I think that is a use case for

Damian Dunn: permanent life insurance. Yeah, there, there actually does become, I said it tongue in cheek just because that's all you see on social media and how a whole, [00:41:00] how insurance policies can be your one stop shop for financial security in longterm generational wealth accumulation.

But there are, and Pete, you and I have said this for years, there really aren't too many bad financial products, just really bad applications of financial products.

Peter Dunn: Kristen, if you were making a million dollars a year, okay, 83, 000 a month,

Kristen Ahlenius: Oh

Peter Dunn: my. And you had to. I didn't. Sounds

Kristen Ahlenius: different than that.

Peter Dunn: Yeah.

What sounds better?

Kristen Ahlenius: I don't know why, but it sounded 83, 000 a month sounded more impactful when that's, I don't know why it just did.

Peter Dunn: Well, let me do even more of a service here. It's 83, 333. 34 cents.

Kristen Ahlenius: That changes the game.

Peter Dunn: So okay. So you think about you've got to, in a tax sensitive way, store money away for later.

Okay. You're going to use what Dame just said, you're going to use whatever tax. Qualificated, qualificated. Yep. Yep. [00:42:00] Yep. Products you can, but then at some level, are you just buying munis? Like, or, or you got to turn to something like life insurance. You kind of have to,

Kristen Ahlenius: I, I don't know. Maybe I just, it's because I just can't relate to this problem in any way, shape, or form.

Peter Dunn: I

Kristen Ahlenius: just feel like if I were in that position, I would just like. Maybe I wouldn't be this. Maybe. If, I just feel like I would just pay my dues, I think. Just, just pay the taxes and live my life the way I want to. At some point, the, I would hope that the income brings me the opportunity to not care about some things.

And I think that, I would hope that would be one of them.

Peter Dunn: Dame, how would you save when you're making 83, 000 a month? By the way, this is Radio for the People. We try to talk about topics that people can relate to. [00:43:00] But today on the show, Oh, I make a million dollars, what do I do?

Damian Dunn: I'd I'd buy a distressed Caribbean island, fix it up and then give it away after 20 years, I think is what I do.

You're going to be using life insurance, right? If you're making 83, 000. Life insurance, some kind of an annuity. There, I think there are some potential opportunities in real estate as well that you could get into in certain economic zones that, that make make some sense for some tax efficiency there as well.

But I mean, life insurance becomes the. The easy low hanging fruit in that case, it

Peter Dunn: really does. And, and, and here's the, here's the biggest caveat I can have. The million dollar income has to be sustainable. Because if you choose to use insurance as a wealth binning tool and your million dollar income turns into 200, 000 or 400, 000, You're toast.

It's the worst idea ever. But if it's consistently, it doesn't have to be a million bucks, but if your income is high and it's [00:44:00] consistently high and it doesn't have a chance to dip, yeah, you gotta do that. But if it's going to dip at all, because it's variable comp or commission or whatever else, I wouldn't even touch it.

Kristen, what's it like knowing that you're helping so many people right now?

Kristen Ahlenius: It feels It feels really good to be doing the work of the people. It does.

Peter Dunn: Oh man. This show is so down to earth. I can just see the iTunes review talks about topics that are pertinent to me and my life coming up after the break.

Speaking of wasting millions of dollars, this is the biggest waste of money of the week and the news right here on the Pete, the planner show I'm Pete, the planner.

Kristen Ahlenius: You know, it would have been better if, when Pete said that these topics keep him up at night, if Dame Wee would have set him up for that. That's

Peter Dunn: funny. [00:45:00] That's

Kristen Ahlenius: funny. We could have done a better job, I feel. You

Peter Dunn: guys could have let me up there. I agree. Okay, I am getting ready to do Biggest Waste of Money of Ja Week.

Okay, well, let's just go, because Jeremiah and I have got to meet up. How badly I want to talk about the news that Indianapolis is pursuing an MLS club. Have you guys heard this? I saw it and I thought, ooh,

Damian Dunn: I wonder if I should

Peter Dunn: put that in there and I didn't. No, I'm glad you didn't. I, I, I have unfortunately various people on the side of that argument that I can't afford to argue anger.

So thank you, but I brought it up. So I'm the dummy. Here we go. Three. Well done. Thank you. Three, two, one. This week's biggest waste of money of the week right here on the Pete, the planner show is sun spells. Drawstring shorts, lightweight [00:46:00] and breathable. Linen is an ideal warm weather fabric. It can also be a little rough against the skin.

Time out. Yes. When I first read that based on the word that's next, I almost said it can also be a little rough against the cheeks. That's what I almost said. I'm glad I didn't say that. Yeah. That would have been embarrassing. I'm glad I didn't do it. Crafted with a cotton linen blend. These shorts from Sunspell offer the best of both worlds.

They're cut with a straight leg and hidden draw cord, letting them saddle the line between casual. And classy and garment died for a broken in look. All right, friends, they 76 percent cotton, 24 percent linen blend woven by Velcorex in France, straight leg, 8. 75 inch inseam. So Dan, we couldn't get to see those, the musculature of your thighs.

Yeah. And they're made in Portugal. How much Kristen are these linen blend [00:47:00] shorts?

Kristen Ahlenius: Can you really call something a linen blend if it is only 24 percent linen?

Peter Dunn: Let me confirm. That's what you said. Yep. That is true. Maybe that means they won't wrinkle the second you look at them.

Kristen Ahlenius: I'm confused as to why these would.

This is an interesting biggest waste of money. Are they a hundred dollars?

Damian Dunn: Okay. Okay. Dad? We'll go with a hundred and 45.

Peter Dunn: Oh, 265. I don't know why. I really don't know why. That's just like, that's absurd.

Kristen Ahlenius: Yeah.

Peter Dunn: Here's the thing. I would never buy anything. Linen. It's just like, I, I'm a walking wrinkle, you know, like I don't need that especially pressed against my cheeks.

Dave, what's in the news this week?

Damian Dunn: Pete, I'm [00:48:00] about to slack you a picture that if you want to put onto the stream for our, our, Watchers. Okay. Oh, here we go. I'm

Kristen Ahlenius: nervous.

Damian Dunn: Oh, here we go. Oh, my. If you've been wondering what you'll be able to order when you'll be able to order the flame throwing robot that Ohio based throw flame first announced last summer, that day has finally arrived.

The therminator. What Throw flame bills as quote, the first ever flame thrower wielding robot dog is now available for purchase. Terminator is a quadruped robot with an arc flame thrower mounted to its back fuel by gasoline or napalm. It features a one hour battery, a 30 foot flame throwing range and wifi and Bluetooth connectivity for remote control through a smartphone.

It includes LiDAR sensors for mapping and obstacle avoidance, laser sighting, and first person view navigation through an onboard camera. Would you like to guess, [00:49:00] Pete, at the cost of this not waste of money? I feel like you're appropriating my segment. I am a little bit. It's

Peter Dunn: wonderful. You guys. What? We've guessed the price of this before.

I know, but now he's testing my memory. We've literally put this image on the screen before.

Damian Dunn: This is now, like, the, the real deal. You can order it. We have a final price. Ten thousand dollars.

Kristen Ahlenius: I, I feel like it was surprisingly less than I thought it was going to be. So I think, I think, Pete's high. Well let's go.

3, 000, 9,

Damian Dunn: 420. Yes. They put a 420 in there.

Peter Dunn: You know, this reminds me of. A weird moment in my life in which Mrs. Planner and I in college had our very first class together and it was Spanish American literature and we were reading in class about war dogs, right? So [00:50:00] war dogs back in Spanish history, there were these massive dogs that served in war.

They, they were, they were beasts and they were part of your weaponry. And the idea was so wild to me, and I was trying to impress my then girlfriend and fortunately future and current wife, I thought to myself, let's really lean into this. And so that's the first time ever she got to see me in my full environment of class clown.

And I spent. Oh, I don't know, an entire semester referencing war dogs aggressively, no matter what we were talking about as like this bit and I, to this day, I don't know why we're still together. But anyway, war dogs,

Damian Dunn: you say that was Spanish American literature. That's what you were.

Peter Dunn: I believe so. Yeah, I knew she was taking it.

I had an elective. I took it. I'm committed to the cause. I mean, we were already dating for. [00:51:00] At least 18 months, but I had to lock it in. And so I thought, you know what she needs me disrupting her education with my jokes. And, and that's what happened.

Damian Dunn: And we wonder why the cost of college is so high.

Spanish American literature. What else is in the news? If you want a single number to capture America's economic stature, here it is. This year, the U. S. will account for 26. 3 percent of global gross domestic product, the highest in almost two decades. That's based on the latest projections from the International Monetary Fund.

According to the IMF, Europe's share of world GDP has dropped 1. 4 percentage points since 2018 and Japan's by 2. 1 points. The U S share by contrast is up 2. 3 points. China's share is up since 2018 too, but instead of overtaking the U S is the world's largest economy. The Chinese economy has slipped in size to 64 percent of the U S is from 67 percent in 2018.

Well how is China not? [00:52:00] Producing more GDP. I don't know. I mean, this just seems so unbelievable. Seems like maybe a bit of a strong word, but it just doesn't feel it. Does it? I would have lost the house on that bet.

Kristen Ahlenius: Oh my

Peter Dunn: really? So what's the rank? What's the what's the rank? U. S. U. S. Is one. Yeah, but but like two or three down.

No, I'm sorry. Let me click through. Sorry. Here's what I just did. When I go out to like a night with the boys, I get home and Mrs Planner says, Oh, did you ask so and so about this? And the answer is no, I didn't. I would never ask them that. I just hit you with one of those questions. I shouldn't have asked you.

I'm I'm sorry. It's all right. What else is in the news now that I've distracted you away from your copy tracking to track? Oh, did you find it?

Damian Dunn: No, I, I mean, it's here, but it's not really all that helpful in the way that it's presented because it groups the European Union and UK together. So I don't, I can't break it out.

Peter Dunn: [00:53:00] Well, just so you know, from an empathy standpoint, I know what it's like to not be helpful. I appreciate that,

Damian Dunn: I guess. What else is in the news? Pension funds across the country are pulling hundreds of billions of dollars from stocks. They're shifting into bonds, private equity, and private debt as major U.

S. indexes set new records and interest rates are sky high. Funds are slowly adopting to a world of yield. Where they can get sizable returns on risk free assets. This is a welcome change for pensions as underfunded pensions are a big no no. And volatility, particularly in the downward direction, creates expensive problems for companies still offering these retirement plans to their employees.

Moving out of stocks could mean surrendering some potential gains, but hold too much for too long and the prices might fall. Pension funds Target specific investment returns to fund future obligations. So taking less risk and staying on track is something they look for.

Peter Dunn: Kristen, have you seen the big short, the movie or read the book, the big short,

Kristen Ahlenius: I've [00:54:00] seen the movie actually.


Peter Dunn: So Adam McKay is the director of that movie. Great movie. Great book by Michael Lewis. So one of the premises of that book is that the regulators were asleep at the Right. The, the, the, they classify things as good when in fact they were very risky. When Dame reads this story, I hear the return of junk bonds.

I hear the return of like the regulators being asleep at the wheel, at the credit worthiness of some of these debt instruments and the pensions getting hung out to dry. And by the way, I have no idea what I'm talking about, but that's what I hear. Anyone else? No, I'm just saying like in the big scheme of things.

Yeah. I know more than most people about this, but probably not as much as I should. Do you sense like, I feel like they could get upside

Damian Dunn: down on that. I think they're probably going into some pretty high quality stuff. I, I, I, I mean, we should have had Mrs. Advice on for this because she's got a little bit of background for this.

But yeah, I, I, I [00:55:00] think they'll be okay unless I mean if they would have been going into CMOs, do you think pensions went into CMOs as well earlier? I mean, I do

Peter Dunn: and I that is true and speaking of true. I'm sending everyone else good vibes because good vibes are all that's in the budget. I'm Pete the Planner.

This is the Pete the Planner Show. They did put pension assets they did buy CMOs, absolutely bought CMOs, what collateralized mortgage mortgage obligations, which is impossible to say on live television, by the way, trust me on that one.

Kristen Ahlenius: What percentage of pensions are currently underfunded? Do we know that?

Not a lot. Yeah. That's what I'm saying. So when it was like in the copy. Probably 150%. That's what I, like, in the copy when it was like, underfunded pensions are not good. It's like.

Peter Dunn: All of

Damian Dunn: them.

Peter Dunn: I have so many thoughts on the Indy MLS thing that I just, they're not for public consumption, but I have so many thoughts.

Kind of,

Kristen Ahlenius: no,

Damian Dunn: he can end it and then I would love to know your thoughts on it, but [00:56:00]

Peter Dunn: I can give you the facts. I can, I can just set this up. How about this? Instead? I can tell you about a very awkward moment I had yesterday at the airport. Another one. This one is on me. All right. And it almost, It got so creepy.

And it's such good intention.

Damian Dunn: I believe you were involved.

Peter Dunn: Yeah, I was at my gate and I was on a call or a very important phone call. Hello. Bye. Sell trade. Yes. I was making very important talks and I got off my call. And as I go for call, nice woman walks up, stands next to me. And she had like the coolest looking skirt.

Like it was, it was just beautiful. It was like, it was long down to the ankle, but it's pleated and it had like a really cool pattern. It was just, it was.

interesting. It [00:57:00] was really pretty. And I said, I love your skirt. And she said, Thank you. And just at that moment, I sort of looked in at the belt line. And then I realized, wait, I think it's actually a dress. And then he's like, well, I mean dress and then I kind of get closer to the beltline and I'm like looking for the delineation point of whether there's two pieces and now I'm in the airport staring at this stranger's midsection and I find myself craning my neck down to just make sure that I'm complimenting her in the most accurate way and then alarm bells start going off in my head, I'm like, you're, you're a creepy bald man in the South, okay.

Harassing this woman who's got other things to do. It was terrible.

Damian Dunn: I'm just glad you didn't say well, you know what? Let me I'll just take a picture and I'll zoom in

Peter Dunn: I found myself, I was like I mean, I love your [00:58:00] skirt dress and I was like pulling down her belt to see, and I pulled up the shirt a little bit just to see if I could expose it was all with good intention.

Kristen, let's say you're traveling. You're traveling and you, you, you just had a really important business meeting and maybe you've got this lovely outfit on, whatever it is, and a person just is not intentionally creepy. It's like, Hey, you look really nice. Is that nice to hear?

Kristen Ahlenius: As long as you do not step too close to me.

Peter Dunn: Fair. And look, I've had people say, Oh, I like your suit or I like your shoes. Oh, yeah. Oh, we'll get there in just a second. That happened to on this trip. I had an eventful week in the Carolinas. Yeah, I just went off the rails so fast and I found myself like shockingly self aware mid, mid compliment and it's, it was unfortunate.

Kristen Ahlenius: I think the proximity [00:59:00] to the person absolutely plays, plays a role.

Peter Dunn: Yeah. I didn't move closer, but I did move my head down because I was trying, I've got bad eyes. And so I just, it sucked. Okay. Last story. And this one's the worst. And I already slacked to you guys or emailed it or texted it or faxed it. I was at the airport leaving for Carolinas and I'm wearing a pair of shoes that happened to be fashion camo.

Like, I, I liked them. I, I, I, what, nothing. And I actually, I don't know if I should tell the story other than to say, let's say Oh my gosh, I ended up feeling really dumb because a, a, an obviously wounded military vet was there in actual camo and [01:00:00] very clearly wounded and I'm standing right there next to him and, and this man next to me looks at my shoes and says, I like your shoes.

And the soldier looks down at my shoes, which are fashion camo. He's wearing camo and has been very clearly injured battling for our freedom. That is stolen valor. I stole valor

Damian Dunn: again. You you assume it was injured battling for our freedom could have been a motorcycle accident. I don't know. I just felt

Kristen Ahlenius: very, I think they separate you from service when it's not a service connected injury, but

Peter Dunn: maybe I would not avoid stolen valor.

Maybe he was riding a motorcycle for the military. Maybe he was in charge of a war dog. Okay, this has gone off the rails. It did. Anyway, don't bring bad cheese to Charlotte. And wear a fashion camo [01:01:00] shoes. They're great shoes. They're more comfortable than you think. Because they're very fashion y, but they do have some nice support.

How old do you think you'll be when you outgrow fashion camo? 10 years ago?

Oh, man. I feel like I do, at some point I'm going to have to get better looking, or I'm going to have to abandon the fashion choices altogether. I just need to like docker it up, you know, penny loafers. Yeah. All right, let's go. I have a sales meeting. I'm going to go, I'm going to go teach these people how to talk to people.

Great. Oh my Lord. Stay getting money.