Navigating The Baby Boomer Retirement Surge

by Mike Lester

Mar 7, 2022

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Speaker 1 (00:02):

Welcome to the Retirement Wealth Podcast. Our goal is to help those retired or soon to be retired investors make more informed financial decisions and live an enjoyable retirement. Our host, Mike Lester is the founder and CEO of Talon Wealth Management. Mike is an investment advisor representative of Retirement Wealth Advisors, Inc, an SEC registered investment advisor. Thanks for joining us today, and let’s get started.

Kristin Taylor (00:30):

If you have questions about your 401k or any investment that you have, and you’re getting close to retirement, or you’re already there enjoying that part of life and just want to make sure you have enough to pull it all off, find out more by visiting

Kristin Taylor (00:48):

Mike, I love it when different institutions come out with suggestions of ways that we can live longer, be healthier by making little changes in our diet and day and according to-

Mike Lester (00:59):

Yeah, because that’ll help everyone, just a few little changes.

Kristin Taylor (01:02):

We need all we can get in this day and age.

Mike Lester (01:05):

There you go.

Kristin Taylor (01:06):

According to a study from the American College of Cardiology, those who consume more than a half a tablespoon of olive oil a day are less likely to die from heart disease, cancer, neurodegenerative diseases like Alzheimer’s, or lung disease. Olive oil has been talked about for a long time as a natural way to help your body. I don’t think we need to start guzzling it, but that’s a fun fact that could be helpful.

Mike Lester (01:31):

Yeah. I saw something on TV years back, 3, 4, 5 years ago. There’s a lady in Italy who’s like 150 years old.

Kristin Taylor (01:39):

They’re always in Italy, always, little old Italian lady.

Mike Lester (01:43):

But she’s an old Italian lady. And she literally drinks, not a glass, maybe it’s like four ounces. It’s not like eight ounces, but four ounces of olive oil every day. Just guzzles it. I don’t know if she’s 100, she might be 130. She’s old, Kristin. I mean, she’s,

Kristin Taylor (02:00):

I thought she were being sarcastic about the number, but she’s well over 100.

Mike Lester (02:03):

Oh yeah. As well, over 100. And granted, she may not be with us any longer. I don’t know. I haven’t checked in on her in the past five years, but there’s something to that olive oil. It’s good for you. Yeah.

Kristin Taylor (02:13):

I have started in recent years, as a Southerner born and raised in the South, I love cooking with butter, but I’ve switched to olive oil because of studies like this. And so something to think about, if you’re just looking for a little something to help with your health along the way, something that we really need help with, Mike, is the labor shortage. It is rough whether you go to the store to buy olive oil, or you go to a restaurant to sit down and have a dish with olive oil in it. It doesn’t matter. According to former McDonald’s CEO, Ed Rensi, this labor shortage, it could get worse. He tells Fox Business that he sees a potential catastrophe for the labor market on the way.

Ed Rensi (02:52):

One of the things I think we’re overlooking a little bit is that the Baby Boomers were born from 1946 to 64. The oldest is 76 and the youngest is 58, but the first child of the Baby Boomers is starting to reach 56 years of age. So the retirement numbers are going to start to accelerate and there’s going to be a lot of upward mobility because they’re leaving the workforce, which is going to leave a shortage at the bottom end. And boy, we’re feeling it big time in restaurants, barber shops, daycare centers. It’s a nightmare.

Kristin Taylor (03:25):

Mike, how do you see this boomer retirement wave impacting our economy across this country in the years ahead, given the labor shortage that we already have?

Mike Lester (03:35):

Well, something we’ve never had to deal with before. So the baby boomer in generation, we’ve heard over and over again, this the largest generation of all time up until that point. Ton of people that went into the workforce that are now transitioning out of the workforce and you can’t discount the impact of them coming out of the workforce, and then who’s going to replace them? I know we talking last week, Kristin, about just this sort of unwillingness of workers to go back to work, and I use the word spoiled and it kind of is what it is, but it’s mostly the younger people who are like going “Well, I don’t know if I want to go back to work unless I can work from home in my pajamas with a cup of coffee, because going to that office thing, not sure I …”

Kristin Taylor (04:16):

I don’t want to do that.

Mike Lester (04:18):

But that’s how I feel like we’ve reached critical mass, I think, on just the country’s tolerance for that kind of an attitude. But part of the problem is exactly what he’s talking about with the workforces. COVID was part of the reason for a while, now part of the reason is the Baby Boomers are retiring. They aren’t being replaced. Corporations that want to continue to stay in business and be successful have to hire someone to backfill those positions with. And I’ve talked with individuals, whether it’s large engineering firms that are looking for skilled labor, or all the way to, again, he was talking about McDonald’s. We have several clients that own McDonald’s franchises and it’s a big issue for them as well. So the labor issue is driving up the cost issue, whether it’s just the cost to employ people or what they want or their willingness, what’s it going to take to get them to actually come to work.

Mike Lester (05:15):

All of this, in my opinion, Kristin, it’s an interesting situation, because I think it ends badly for the economy. People have to be willing to go back to work at a reasonable wage. Their version of a reasonable wage might not be the company’s version of a reasonable wage. And in the beginning the corporation could, well hey listen, we got to have this person, we’ll pay him more, whether it’s McDonald’s all the way up to one of these big engineering firms or hey, to get them to come to the office, we got to offer them this benefit. But if you start overpaying people in the beginning, then you’re overpaying people at the end. It’s always still going to come down to the same thing is, what does it take? What’s what’s the perfect mix in this economy for somebody to get a fair wage and for a corporation to still be profitable?

Mike Lester (05:59):

And somebody would say, well, we’ll just pass the cost of the employee that’s now a lot more, or the benefits to the employee now are at cost, we’re going to pass that cost off to the consumer. It’ll be interesting to see because I think we’re getting there with all the inflation and how much things cost. We’re getting to that breaking point where hey, listen, it’s too expensive. I can’t pay more. And whether it’s because of supply chain issues or whether it’s because of employment or just inflation and printing money, at some point, the consumer becomes unwilling to pay for it. And if price of labor has driven the price higher, at some point, the corporation has to say hey gee whiz, we can’t afford you at that rate anymore. And then the economy turns around and goes. So instead of hiring people, you’re now laying off people, it’s a full cycle economic issue, but we have to take a look at that when it comes to our investments. How sustainable do you think current situations are?

Mike Lester (06:56):

I don’t think they’re very sustainable, Kristin. I think we’re getting very close to a breaking point. Even if you take politics out of it, things aren’t looking great right now and we want to make sure we’re prepared in our portfolios, because it’s been real good for a long time. It potentially gets bad for a while, but it only gets bad before it gets good again. These are the cycles that we talk about when it comes to investing, and that’s why we don’t like this hang in there approach where hey, don’t worry about it. Just ride it out. Eventually it will be higher. Well, that’s probably true, but if you’re retired or very close to it and particularly if you’re pulling money out of your portfolio, not making contributions, these markets cycles of bull markets, which we’ve been in for a long time to potentially bear markets, we have all know the market doesn’t go up all the time. What are you doing to prepare yourself for that volatility? And those are the types of questions we can ask through analysis and planning.

Kristin Taylor (07:47):

And that’s what Mike and the team take a lot of pride in doing for their clients at Talon Wealth Management, and for listeners like you that are near retirement or already there, they want to be an advocate for you, inform you about your options. You know, for many Baby Boomers being concerned about rising healthcare cost is not something new with the inflation conversation, but here is some decent news about it. Despite food services and basically everything being higher, price increases for medical services have been modest, at least so far. They only rose about two and a half percent in the last year. Now, since there’s no way to truly predict the future healthcare needs of your clients, Mike, I know you do ask about their parents and grandparents and history of longevity. What are some other ways that you help them prepare for these what ifs with rising healthcare costs that have always been an issue?

Mike Lester (08:44):

Well, they are always going to be an issue, Kristin, but it has to be a part of any plan. So when for most people, not everybody, some people have help through a previous employer or the government, but for most people they’re going to be dealing with Medicare when it comes to retirement. So at 65 you are eligible for Medicare part A and Medicare part B. And that’s going to cover a large percentage the majority of your healthcare costs. But there are costs that Medicare does not cover, and that’s where it becomes an issue for individuals and they shopping around for what’s called either a Medicare supplement plan or Medicare advantage plan.

Kristin Taylor (09:20):

And that can be stressful for Baby Boomers. I’ve seen my folks go through that.

Mike Lester (09:23):

That’s right. You’re trying to find out, well, what plan is best for me? What are the difference? It’s all Medicare. Does it really matter?

Kristin Taylor (09:29):

Is my doctor covered, all these things.

Mike Lester (09:30):

Is my doctor covered, so it is a big deal. And so at the heart of our business, we’re a fiduciary firm that manages portfolios for individuals that are retired or very close to it. And so it’s the money management part of it, Kristin, but we’re also very concerned about the expense side of things. We want to make sure that our clients aren’t paying more for healthcare services than they need to, or that they’re worrying more than they need to about what kind of coverage that they have. When we take a look at the big picture, yes, we’re managing assets, but we’re also offering services. So we have a Medicare plan specialist on the team, Brian.

Mike Lester (10:06):

And so basically any one of our clients or anybody who comes in to talk to us that has questions about Medicare, about insurance, about long term care, any of those things, will have the meet with Brian and he will walk them through all of the plans that are available to them. So it doesn’t matter where you live. Medicare plans are typically broken down by state and county. Then there’s a big difference between, like I said, a Medicare supplement versus a Medicare advantage plan, but what’s great is Brian can walk individuals through all of the options available to them.

Mike Lester (10:37):

What happens is there are plenty of sales reps for these health insurance companies that are all promoting Medicare plans, but the sales rep typically work for a specific company. So if you wanted to take a look at what eight different companies are offering, when it comes to the health insurance plans through Medicare, you might have to have eight different meetings. What’s great is Brian can sit down with you and show you what all the different plans are, everything that’s available to you, help you find out if your doctor’s on the list, let you know well, would a Medicare supplement plan be best for you or would a Medicare advantage plan be best for you?

Mike Lester (11:11):

Again, they’re very, very different, but for some people they should go with Medicare supplements, for other people, they should go with Medicare advantage. Our goal as the fiduciary financial advisor is to help people get into the best plan with the least amount of expense. And that’s what I love about having Brian being one of our advisors and our Medicare plan specialist is he can walk people through that. So if you have questions, not just about financial planning, but the expenses in retirement, when it comes to healthcare, we can walk you through all of that.

Kristin Taylor (11:40):

As we wrap up, I wanted to tell you a story from last week, I was sitting in the waiting room at a doctor’s office and a couple in their early ’60s, because couples often go to the doctor together, apparently, started chatting with me. And as our conversation progressed, I told them that I do this radio show with you and their face lit up because they happen to be actively looking for a new financial advisor. I think they assumed I could help them because they told me that they have about $800,000 in 401ks and IRAs and surprisingly, roughly a about one and a half million dollars in cash.

Kristin Taylor (12:15):

I quickly stopped them and said, “Hey, you guys are telling me a lot of information. I’m just the one that asks the questions. Mike’s the expert.” But the reason they feel they need a new advisor is they get the feeling that their current one isn’t retirement focused. Why is it important that someone in their situation have a financial advisor that approaches investing in retirement differently?

Mike Lester (12:36):

We deal with this week after week, and it’s fairly common. A lot of people that are transitioning into retirement have been working with financial advisors for 10, 20, 30 years. And sometimes their financial advisor is also transitioning into retirement. So one thing can be well, listen, we’ve been with them for a long period of time. We feel like they’ve done a good job for us, but what if they retire? That’s one thing. But then also if the relationship goes back that far, that advisor is typically a product for an environment that was more of a hang in their environment. So hey, listen, invest in mutual funds, have diversification, hang in there. Don’t worry about it. Eventually things will get better. It’s okay when you’re in your ’20s, ’30s, ’40s, maybe even ’50s, but late ’50s, getting into ’60s, ’70s, hang in there, in my experience, doesn’t work great for individuals who know they have to rely on their nest egg to live off for the rest of their life.

Mike Lester (13:30):

And it’s simple math. I know if the market does really poorly, like it did, for example, the last crash we had was ’08. S and P and that drawdown was down I think over 50%. You just can’t afford to lose 50%. So your options are well, do I stay in the market or do I go completely conservative and earn nothing right now? Because there’s really no great interest rate on fixed accounts and people are in this sort of limbo, trying to figure out what to do. So that’s why I love the conversation of introducing active management, how it works, working with a fiduciary. Let’s just see if we can provide value in your specific situation. If we can’t there’s no reason to work with us, but if we can, you may want to hire us to manage your portfolio.

Speaker 1 (14:13):

If you would like to have a comprehensive financial plan and an analysis of your current portfolio, go ahead and visit our website at And we can do that for you complimentary. Thanks so much for joining us on today’s show. Be sure to subscribe to our podcast, visit our website at for more free retirement planning and investment resources. Thanks for tuning in to today’s show. And we’ll see you next time on the Retirement Wealth Podcast.

Speaker 1 (14:46):

Exposure to ideas and financial vehicles discussed should not be considered investment advice or recommendation to buy or sell any financial vehicle. This information should not be considered tax or legal advice. Individuals should consult with professionals specializing in the fields of tax, legal, accounting, or investments regarding the applicability of this information to their situation. Past performance is not a guarantee of future results. Investments may fluctuate, and when redeemed, may be worth more or less than originally invested.


Mike Lester

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Navigating The Baby Boomer Retirement Surge