What happens when the financial plan you created five years ago no longer matches the life you’re living today? In this episode, John and Tommy explore why great financial planning is never static and how the best plans evolve alongside career changes, unexpected opportunities, market shifts, retirement decisions, and personal goals. Through real-life client stories, they break down how ongoing financial planning relationships help people confidently navigate uncertainty, major career transitions, and complex financial decisions.
You’ll learn how financial planners think through risk, Roth conversions, TSP distributions, equity compensation, retirement readiness, and the emotional side of money. John and Tommy also discuss why long-term planning relationships create better outcomes over time, how AI is changing the financial planning industry, and why financial confidence often comes from having both a strategy and a trusted guide to help you adjust when life throws curveballs.
Listen to the full episode here:
What you will learn:
- Why financial plans should evolve over time. (3:40)
- The value of long-term advisor relationships. (7:00)
- The importance of finding a financial planner who specializes in your industry. (21:00)
- How planners think through risk and contingency planning. (27:15)
- Why retirement plans rarely unfold exactly as expected. (31:00)
- Why emotional readiness matters as much as financial readiness. (38:00)
- How AI is improving (not replacing) human financial advice. (40:30)
Ideas Worth Sharing:
- “Your life is dynamic. Your financial plan is dynamic. And, like it or not, there’s going to be a curveball.” – Mason & Associates
- “At the intersection of being financially able to retire—with that means I have financial security—and the emotional side of being ready to leave my job as a federal employee… really cool things start to happen, and it unlocks possibilities that you can’t really envision until you have that clarity.” – Mason & Associates
- “We want to minimize taxes. We want to pay what you owe, but not leave a tip.” – Mason & Associates
Resources from this episode:
Did you enjoy the Federal Employee Financial Planning Podcast? Never miss an episode by subscribing on Apple Podcasts, Amazon, Spotify, and YouTube Music.
Read the Transcript Below:
Thank you for tuning in to another episode of the Federal Employee Financial Planning Podcast. Are you interested in moving from general education to personalized advice? You can start that process at masonllc.net. That’s masonllc.net, or give us a call at 757-223-9898.
If you’re not ready to take that next step, that’s okay. Keep hanging out with us right here on YouTube and our Federal Employee Financial Planning Podcast.
John Mason: Welcome to the Federal Employee Financial Planning Podcast. In this episode, we’re focusing on what it means to have a dynamic planning relationship with a financial planner.
If you’re a DIYer who will never hire a financial planner, don’t tune out of this episode because, yes, we’re going to focus on the dynamic advisor-client relationship, but this is also a preview into some of the decisions that you may have to make in the future. So even as a DIY person, you need to start planning for these contingencies that may or may not happen to you in the future.
Your life is dynamic, your financial plan is dynamic, and like it or not, there’s going to be a curveball. Like one of my favorite baseball coaches used to say, “Think fastball and then adjust.” Well, folks, that’s exactly what we need to do inside of our financial plans. So in today’s episode, we have two clients in mind.
We’re going to share some stories and details from those relationships, but we’re going to leave out most of the details to protect their information and make sure they’re anonymous. But these are real people who Tommy and I both work with. We’re going to talk about them and how they’ve retired early from federal service.
They’ve changed jobs multiple times since they’ve left. We’re going to talk about how we’ve handled TSP distributions, how we think about things like Roth conversions, traditional versus Roth 401(k) contributions, and more. And in general, the theme here is both of these people gave up more guarantees staying with the federal government for less guarantees but more upside.
So we’re going to hit on all of that today in this episode. Remember, we’re financial planners first. We do this second. Tommy, welcome to the Federal Employee Financial Planning Podcast.
Tommy Blackburn: John, it’s good to do another one of these with you. Looking forward to walking through these and really just the theme at large. Like you said, we’re going to keep it anonymous to protect everybody here. But even as I was thinking through these two clients that you and I are both very familiar with, it’s not that uncommon of a story. So we could draw probably from many different clients if we think about it, either that you and I work with or that the other advisors in the firm work with.
This is not uncommon for these changes in life to happen, which is why it’s just so powerful to have financial planning relationships. And we’re sharing it because even as it happens, we experience it not infrequently working with our clients. Every time, I think we just appreciate almost like the awe of life where you’re like, “Hey, everybody thought this was the trajectory this person was on, and then some things happened, things have changed, and now we’re on this new planning trajectory.”
And it’s just amazing how life is just so fluid and dynamic.
John Mason: It really is. You think you know what the next chapter holds, but you don’t. You don’t know what opportunities are coming your way. And audience, if you think about this as far as when do I engage with a financial planner, or when do I start thinking about my future, when do I start thinking about these decisions?
Well, anxiety’s good. Like, a healthy version of anxiety protects you, then there’s also unhealthy versions of anxiety that push you over the place where it’s not good. But a healthy anxiety about your financial plan is important—planning for these contingencies, thinking about the future. If you realize that that’s the stuff that’s keeping you up at night, maybe you do need a qualified financial planner to help you.
So Tommy, we didn’t talk about this before we hit the record button, but the DRP, the fork in the road, the things that happened in 2025, it takes a while to get up and running with a financial planning firm. You can’t just go to somebody tomorrow and say, “I need a financial plan. Help me with the DRP that’s coming through.” It takes time.
Tommy Blackburn: Yeah, you’re absolutely right. And man, it’s so much better when you’ve kind of got an existing relationship. As I think through both of these cases on our minds, the fact that there was already deep relationships and understanding there, we were really able to bob and weave as we needed to bob and weave as life was changing, but just have a better understanding of them, and them having a better understanding of us as well, I think. So I think it’s just a better advice relationship when it’s existing.
And yeah, to your point too, we’ve kind of joked around, and maybe not even joked, just internally, we want—we are growing. We want new clients. We want to help people. But sometimes when it’s the fire drill, “hold on to the car door” kind of thing, that’s not the best time to engage. We should have been engaged before we got T-boned, right? And not that these are happy stories we’re going to tell, but it’s the things you don’t see coming, and it does take time to get up and running.
And so, already having the resiliency in place just is a much better experience and the realistic way it should be.
John Mason: I think in both of these cases, Tommy, the client relationships are five-plus years or even longer. So as I was preparing for this and thinking about this episode, the one client that I’m thinking of in particular, the one that I serve directly, then you have the one that you serve directly.
I think about the decision that we made recently, and the decision was, “Do I leave my current W-2 job for more of a sales-based, more of a commission job?” W-2 job is more secure, commission job has more upside potential. This is our second job post-leaving federal service. And I think about the conversation that we had with this individual five years ago, and it was like, “Well, let’s leave money in TSP. When I retire, I’m going to need to take 3% distributions.”
All of these things, like we were planning, and we knew we had to do all these things. Well, fast-forward five years, we haven’t taken one TSP distribution. They’re financing everything they want to do in their life between federal retirement and the W-2 job.
So the baseline plan turned out to be wrong, which, essentially, we say all the time, is that initial financial plan in many circumstances is going to be wrong, and it was in this case. We needed it to help prove that, yes, we can retire now at 48 to 52 years old, but now we’re 52 to 55, and it’s like, well, all those assumptions are wrong.
So for this client in particular, I said, “Well, remember, we were planning on 3% distributions from TSP anyhow.” So you get this lower guaranteed salary. A 3% distribution puts you back to the W-2 where you would have been anyhow, and you have 100, 200, $300,000 more upside potential as long as we’re okay using a hypothetical 3% distribution for living expenses rather than vacation, and the individual is able to accept the new job.
And as I think about that, Tommy, five years ago, clients, they kind of lie a little bit, and I don’t mean that to be mean. They come to you, they tell you all these great details. They answer your questions like, “What is your financial goal? How much money do you need to spend in retirement?” And they do their best, but you can’t replicate five years of financial data, visible data, both the numbers and the emotional, that factors into these decisions.
I wouldn’t have felt comfortable five years ago encouraging this person to take this opportunity, but five years in, I know who they are as humans. I feel much more comfortable.
Tommy Blackburn: Yeah. Well, and I remember that one. I think we were putting together kind of the conservative case, which is hopefully helpful for listeners as well, as the base case that we say we’re trying to usually develop for a client.
And so that one, I remember thinking about, like, are we doing what are called 72(t) distributions, or are we LEO and we’ve met what we need to meet there so that we can take pre-59 and a half from TSP, and thinking through spending. The good thing is that was a conservative case, and none of that’s been needed.
So then we also know, well, we’ve gone through time, and we didn’t do that conservative one. We’re in a much stronger place now for you to take this risk. And yeah, it’s just amazing how dynamic… and part of it is like, John, you and I don’t know the future. We don’t know our future selves. Like, we think we have an idea, but we just don’t know what it’s going to be like in the future. So it’s not even that clients—it’s just like you said, they’re doing their best to envision the future with what they think they know today. But like, who could know?
And it’s, again, it’s just so powerful thinking about both of these situations and how we went from like these super stable type of trajectories to not so much. And how many people would think like, “Hey, John, I’m gonna retire 48, 50, and then I’m gonna go work this second thing,” which is hopefully less stressful, “whatever, it helps me provide.” And then, like, they got a new—it sounds like a new itch or a new something, energy to them once they stepped away and were doing something else, and now they’re on this completely different trajectory.
Like, how many people would know that about themselves? They’re like, “Yeah, I’m gonna retire,” but then five years later, “I think I’m actually gonna wanna go after it hard again for something, some new passion that’s arisen.” So it’s hard. That’s why we do our best with the information and the data we have, and we try to empower you. Put that good case in, that good plan into place that’s able to adapt and say, “Well, that was the base, and now we’re on this really cool trajectory where let’s see where this thing’s going to go.”
John Mason: There was an interesting article in The Wall Street Journal, Tommy, that was talking about married couples having quarterly financial planning meetings or something. And realistically, most couples don’t do a very good job doing many things with finances in particular, but certainly planning is not high on most people’s list.
And then most families also have the person that handles finances and then the person who doesn’t handle finances, and the person who doesn’t handle finances probably doesn’t want to do those quarterly meetings, even if the other person does. So then you have a little bit of a push/pull in the relationship.
The reason I think that’s significant is if you are a DIY financial planning person, great. Those quarterly planning meetings or like those contingency planning meetings are very, very important. And then let’s just put yourself in a position to say you’re a GS employee, you have 25 years of federal service, you’re 50 years old, you don’t have eligibility for an immediate unreduced retirement yet, but you have the opportunity of a lifetime in the private sector.
And Tommy, I’m going to pretend you’re my spouse. And I say, “Honey, I’ve got this great opportunity.” And then you say back to me, “Well, what about my health insurance, and what about my pension, and what about this, and are you sure our family’s going to be taken care of?” And you start asking me all these questions, and then I have to say, “Well, yes, no, maybe, I think so.” And then you say back to me, “Well, this sounds like a pretty big risk.” And I say, “Well, I guess you’re right. Maybe it is. Maybe I just shouldn’t take the job.”
And so one, just think about that, audience. If you’re that GS employee talking to Tommy, are you going to be confident enough to make that decision when and if your spouse asks those hard questions? I think in our examples that we’re thinking about, I know my client in particular, I say my client, the one I’m serving, if I said no, he probably would not have taken the job.
Tommy Blackburn: Well, and as you’ve laid that fact pattern out, I think through a lot of our interactions with our clients that usually are married, that we are that kind of unbiased third-party point of view. And I think many couples, they appreciate that, where it’s like, “Hey, John is like all lit up on fire right now with this idea. But Tommy, or Mike, whoever’s the advisor… do you think he’s thought through this all the way?”
And so then we can come through and delicately, more or less, say like, “Yeah, like, here’s where you guys are. Here’s like kind of what would appear to be the worst-case scenario.” And so either, “John, you gotta go another five years, guy. I’m sorry, like, you’re too close to the end,” or it’s actually, “Yeah, y’all are well positioned, and we feel confident in this too.” And so then both spouses can feel pretty confident in the plan.
John Mason: It’s just a healthy place to be, Tommy. I mean, at the end of the day, I, as a spouse, want my spouse to be very taken care of and the decisions we make to feel very thought out. And there’s a certain level of risk with every financial decision we make. Well, having an expert to help you ask the qualifying questions or fully think through all of the “what-if” scenarios.
I mean, for instance, one of the things we didn’t say in that scenario or fact pattern was, “Okay, so John, when you take this job and die, what happens?” or “When you take this job and that company goes out of business, what happens?” Like, what’s our fallback plan? What’s the contingency plan?
And I think as financial planners, it’s a blessing and a curse. We’re trained to think about these remote contingency options and to help our clients think through them, which isn’t always the most pleasant experience to think about death or disability or incapacity, but that’s what we have to factor into our decision.
So what’s the takeaway for the audience here? The initial takeaway for the audience is: A, developing a quality relationship with a financial planner who can help you through these hard decisions takes time. Yes, in the first year of a relationship, Tommy, a planner can add value. In the fourth, fifth, sixth, 10th, 20th year, the value becomes completely different because you still have the technical expertise, but now you have the human expertise.
So the takeaway is start planning for the contingencies now. If you’re a DIY, you need to put the tools in place to put you in a position where you can have this conversation with your spouse. If you’re looking for a financial planning team, then understand you don’t unlock the full potential of that team until years in. That doesn’t mean you don’t get initial value, but just understand that I think it’s a common misconception, Tommy, that the first year you meet with a planner is going to be the year they provide the most value.
The first year you meet with a planner is the year they’re going to bombard you with a bunch of great ideas. Yes, like that is going to be overload. It’s going to be tremendously valuable. It’s going to be like going to a technology conference and seeing 1,000 AI vendors. It’s going to seem amazing and cool and sexy, but then the value is really unlocked over time.
Tommy Blackburn: Yep, as they get to know you, you get to know each other, and you get to bob and weave together. And I was even thinking, John, humility-wise, there are times where—and it’s great—where we’ll be that thought partner. We’ll challenge, “Hey, I’ve got this opportunity I wanna take,” and we may see the risk or be more conservative in our thinking. And sometimes it can… clients will appreciate that.
They’ll say, “Okay, I’m making an informed decision now. You’ve helped me understand the risk I’m taking and maybe what I’m giving up in this to take on this riskier path. But at the end of the day, I believe in this, and I’m willing to take the risk that you just outlined to me.” And at that point it’s, “Hey, well, we’ve talked about it. Now let’s figure out how we go forward together the best we can.”
And that’s at least the situation I’m thinking of—the original turn in that situation of leaving federal employment. There was a lot of risk to that, and then it turned out great, and then that ended and turned out great again, and then it ended. And the next opportunity that’s happening right now has been amazing, and it’s been really cool to support this family along the way, and I imagine the same one that you’re thinking of.
I know the comment that I’ve received, and I know we receive it here as a firm frequently, which is like, “Hey, we couldn’t have done it without you.” And that’s really cool because I always feel humble too, John. It’s like you guys were… I’m not that important, right? At the end of the day, I think to myself like, “You’d have done this without me.” Maybe that’s not true.
So it’s really cool to just hear and be a part of that relationship, and hopefully what the audience is hearing here is it’s a relationship. We’re humbled to be a part of the story and to try to empower you to do what you can. And it’s really cool to, yeah, have 5, 10, 15-year relationships and be a part of the changes and see just where life goes and see families prosper and how things change. It’s very humbling to be a part of it.
John Mason: It’s humbling. It’s an honor. And I wrote down “do it without you” and “guide” were the two things I wrote down as you were speaking there, and we are a guide to our clients. We don’t “should” all over people. We don’t tell them what they should do or what they… I mean, we will tell people what they need to do, specifically the things that they don’t want to hear as well if that’s the case.
But we tell you things that you need to hear, not what you want to hear necessarily, but we want to guide you. We want to educate and empower you to make those informed decisions, Tommy, and ultimately, I think that’s… the “doing it without you” part is like, yes, these are… we have smart clients.
Tommy Blackburn: Oh, yes.
John Mason: They’re wealthy. They’re smart. They’re educated. They could do it without us, but the difference is walking through life with a guide, walking with somebody who has experience.
It’s hard to quantify or put a price on that value, and each person’s going to see it differently. But these two clients in particular are both highly intelligent, very capable individuals who manage their money very appropriately without us, made really good decisions without us, but there are enough things that happen in our relationship that say, “Yes, the fee that Mason is charging, we’re getting more value than the fee we’re paying.”
Tommy Blackburn: Yeah, some of it I think is also just like hitting the easy button. Like, we talk about concierge medicine that we have, where it’s like, “I want that partner, and I want somebody to help just sift through all the noise so I don’t have to do it,” right? Where it’s like, okay, I’ve got them in my corner. I hear things, I read things, and I can just come to them, and they can sift it. Here’s what applies to you. Here are my thoughts on it. Let’s talk about it how you want to, but it’s… and it just makes life easier.
So not only is it a thought partner, is it somebody to walk alongside you and guide you, but some of it’s just like, “Hey, I need to go focus on what I’m good at, and I’m hiring you to help me with this other part that I think you’re really good at.” And yeah, it’s really cool when it all works that way. It is a luxury, I guess I would say. It’s not for everybody, but like you said, these are smart people. These are wealthy people. Federal employees often don’t realize they’re wealthy. You are, particularly as you’re approaching retirement. So it’s a lot, and it’s a lot of value that can go on there.
John Mason: Audience, if you’re curious, you probably know this about us, but we’re a fee-only financial planning firm, which means our clients are the only people that ever pay us. We’re not saying that’s the only compensation model that’s good, but we believe it’s a good one and eliminates some conflicts of interest.
If you were to hire Mason & Associates or somebody like us, you only pay a fee typically for the amount of time that you want to hire that firm. So we charge a quarterly fee. If at the end of that quarter you wanted to terminate the relationship, we would help transfer assets back to TSP or wherever they need to go, and you’re paying a fee-for-service for the time that you said you wanted to hire us or somebody like us.
It’s a fairly low risk. Like, we had an intro call the other day, and they were like, “Well, this seems like a fairly low risk to me,” meaning, “I can transfer the assets, I can hire you guys, and if I don’t like it, I can end the relationship.” Well, it is pretty low risk in our opinion.
Opposite of that would be a commission-based person who helps you purchase something with a seven, 10, or even longer year surrender charge. That’s more risky. I mean, that’s a substantial lock-up period and commitment. So just understand what you’re getting. CFP Board, you can do searches there. You can search for NAPFA to find a fee-only planner near you. XY Planning Network has a Find an Advisor tool.
If you’re going to Google “financial planner,” expand your search from “financial planner near me” to “financial planner that specializes with me.” That’s really where we want to be today. So for us, obviously, federal employees, people who have inherited IRAs, things of that nature, is who we specialize with. So just think about that, audience, as you’re searching.
Tommy, I wrote down, we had a good email come in from a podcast listener that asked if we do any project work or hourly work, and if we don’t do any project work or hourly work, they were asking for a referral. The answer to that question is we do not do project work or hourly work. We only have the capacity to do work that returns an ongoing relationship. 90% of the time, the work we put out results in an ongoing relationship, and audience, that’s not like a hard fact. It’s just observation that most of the time when people call and they say they want to become a client, it seems like most of the time it ends up happening that way.
We don’t like the project work. We don’t like the hourly work for all the reasons that we just said, Tommy, and putting something down on paper for a one-time project fee just doesn’t feel—I don’t feel good about it.
Tommy Blackburn: Yeah. The ROI for either doesn’t sound that great, I mean, because we’re investing a lot of time in getting that initial thing done, and it just, like, for that to come to an end doesn’t feel… yeah, it just doesn’t feel like it was worth it for either of us.
John Mason: And it feels like you then just throw all of the recommendations that you could have ever had onto a piece of paper, and you’ve only met the client once or twice. They’re paying you hourly, so they don’t want to meet with you too much, right? So they’re fee-conscious, which means they don’t want to probably dedicate so much time and resources to the process.
So then as an advisor, I can only get to know you so well, at which time you’re asking me to help you make potentially life-changing decisions. I don’t feel good about that. So it’s not that we stick our nose up at the work because we can’t be compensated appropriately. I mean, that’s… maybe that’s part of it, that the legwork for an initial relationship, year one, isn’t necessarily super profitable for the firm. But it’s also not wanting to stick our neck out there and have people run off with these plans knowing that life is so dynamic.
Tommy Blackburn: Well, there’s also a limited amount of time in a day, and we want to have ongoing relationships, so we’ve only got so much time. And so to do hourly, project-based work, we just don’t have the capacity for it, and it’s not where we want to spend our time. Life is going to change. That initial plan project’s going to be wrong pretty quick. Something’s… the directionally, it will probably stay accurate unless something major changes, but there’s going to be a lot of tweaks that need to be made.
And then, of course, it’s like, well, now what? Do we get back together in a couple of years for some type of update and pretend that we don’t basically need to start all over, and we’ve missed everything that’s happened and the relationship that could’ve been built and getting to know you better? It’s just, it’s not how we want to work. We think we’re best served and our clients are best served when we have that ongoing relationship.
John Mason: Audience, we’re going to take a quick commercial break. If you can, make sure you check out masonllc.net and federalemployeefinancialplanning.com. The second website is our podcast- and YouTube-specific website.
Our e-book on survivor benefits is coming to you shortly. Navigate to our websites. Make sure you connect with us there, submit your email address so you can get your copy of the e-book, as well as stay connected with us for our monthly commentary. We know that your email address is flooded with a lot of content. What we promise for you is monthly commentary, pertinent information, and future invitations to things like webinars and other things that we’re doing at Mason. We’re not going to share it with anybody, and we’re not going to take advantage of the trust you’ve placed in us.
So please navigate to our website, check out the new resources that we have there, and as importantly, like, subscribe, hit that bell notification, and continue sharing this content with people across the country.
Tommy, as we jump back into this episode, I was hoping that you would share a little bit about the client that you’re thinking of. Specifically, you know, you and Mike were working with this person and, hindsight’s 20/20, but if we had encouraged that person to stay in the government, that would have been like a very expensive, bad decision. So that person leaving federal employment was really good. So I want to talk maybe a little bit about that.
But I think what’s very interesting about this individual is they went from making not a lot of money to making a lot of money to not making a lot of money to making a lot of money. And we’ve navigated things like donating stock, changing pre-tax to Roth 401(k)s, Roth conversions. So maybe you can just highlight a few minutes on that relationship, and what I hope the audience can gain from this is the value of an ongoing relationship, number one. Number two is this could be you. So how would you handle it if these opportunities presented themselves?
Tommy Blackburn: Yeah, I was actually thinking that because I think maybe we’ve gone through your fact pattern a little bit, but maybe go through this one some more to give it just a little more detail to the audience.
So federal service doing very well, had advanced quite a bit within it, and had an opportunity to go work in the private sector. Come up, and many meetings and discussions around, “Here’s your federal trajectory, everything you’re going to have here doing a career,” and the risks that you’re taking on, kind of alluded to earlier. Client, I believe, more or less was like, “That’s awesome. I appreciate you putting this information in front of me, helping me weigh this. I believe in it. I’m going to go do it.”
And led teams, did amazing things at this private sector company, and very highly compensated as that company did well. So we had things like all of a sudden, stock options, restricted stock, deferred comp plans. So again, we went from the federal world to deep into highly compensated private sector. And as we were going, we’re looking at it and they had too much or they had a significant concentration of wealth now in this company, and they were beginning to just lose interest. I think the company was changing as it was getting larger. It was getting away from what the original missions were. So just beginning to lose interest, and we have a significant amount of wealth tied up in it.
And at the time, which we don’t have a crystal ball—I think this was pre-COVID or probably around then if I’m thinking correctly. Anyway, advised, yeah, we should really, these options are in the money. Let’s go ahead and exercise them. Like, let’s just go ahead and start taking risk off the table. It stinks, but we’re in, at the time, favorable tax brackets, which have continued to stay favorable. We’ve also got this stock that you’ve accumulated outside of it, but you’re charitably inclined. So what we can do is a donor-advised fund where we’ll shift that appreciation away from you. You won’t get taxed on it as if we had sold it, but you’ll get the deduction on your taxes, which are in a very high tax bracket, so this is very helpful for you, and we get to do the charitable giving over time.
So that worked out well, and I think the stock just, again, we don’t have a crystal ball, but I think it then like just kinda tanked after for some odd reason. I don’t know to this day if it’s ever recovered to what it was.
We also—they had young adult kids who, as they’re launching into life, they wanna help them, and some of it was looking like, you know, you could also give some of this stock to the kids and let them pay the tax on it because they’re in a lower tax situation than you. Then, no kiddie tax concerns there. So we did some of that. The kids were able to sell. Still, yes, they had to pay tax, but they were able to do it at a better outcome than if the clients had done it.
So now we’re just knocking things out right and left, right? We’re minimizing that concentrated risk. We’re meeting in charitable giving. We’re meeting giving to our kids. And then as clients go on, it’s like, “Hey, I think I wanna do something different. I just wanna get away from this. I’ve been teaching some classes. Like, I’m thinking maybe I’ll do that for a while.” So we just walked through like, “Hey, your plan is in great shape. Deferred comp’s gonna pay out. Here’s what it’s gonna start looking like, and yeah, go fully retire if you want to, or if you wanna do this project, go right ahead.” They did it. Major decision, but they did it with confidence.
And then what was wild, as the situation changed there, this university—and many of them have this—there’s multiple options to defer money. So it’s like we have a 403(b), a 401(a), and a 457. So we were maxing everything out because deferred comp is starting to pay out in these years that he’s now left the previous job. So we knew we’re still getting pounded with income, so hide as much as we can, and joked internally, we basically knocked his paycheck down to zero. I mean, he was deferring everything he could—HSAs, it was pretty impressive, everything we took advantage of, if I do say so myself in reflection.
Then one year, there’s a lull in the deferred comp, just the way that it was paying out. We actually did a Roth conversion that year. It was crazy. So we went from, “Let’s take advantage of every tax break we can, let’s defer as much income as we can,” to, “We’ve got a window here. Don’t know when we’re gonna see it again. Let’s actually do a Roth conversion this year and pay some taxes because we’re at an abnormally low this year.”
So that was really neat to just see, like, who would have thought any of that would have played out that way? Going back to that original decision point of, “Do I stay in federal employment or leave?” They’re doing this, they’re enjoying it, they’re sharing with me the impact they’re having with students that they’re working with, which is just so cool to hear.
And then another system reaches out and says—I don’t know how these channels work, but more or less it’s like, “We know who you are, we know your history, we know what you’ve done, and we think you’d be great at this program”—it’s a huge step up and a huge new commitment. I mean, it’s like back full throttle, here we go.
But doing it with the decision of: you don’t have to work. They know, that family knows good and well they don’t have to work. They’re in a great place, but this is now, this is something that they’re intrigued by, they’re passionate about. They wanna go make this impact, and they’re gonna get well compensated for it. And so now we’re back almost in that, essentially that C-suite again, and now dealing with a new system and the benefits and maximizing it. But it’s gotta be one of the better cases about the dynamics of planning and just, and life, right? Like, who could guess that we were gonna have all these twists and turns?
John Mason: Phenomenal story. Things that I’m extracting from that are the Roth conversion window. Roth conversions are all the rage, YouTube videos about them, and planned Roth conversions inside of TSP. But at the end of the day, there’s a lot of reasons to do Roth conversions, and there’s a lot of reasons not to.
And one is tax bracket, two is income. We want to minimize taxes. We want to pay what you owe, but not leave a tip. But looking for these specific windows—things like when the market’s down, maybe a Roth conversion could make sense, or if there’s a lull in deferred comp or somebody’s taking a year off in between jobs, you’re looking for these strategic times, layering in a conversion with a donor-advised fund.
Again, fully thinking through the situation, Roth conversions can really hurt you and your financial plan, but there are awesome opportunities and windows that one can take advantage of, so I thought that was a great point. The other point that you mentioned is they’re not working because they think they need to; they’re working because they want to.
And as we think about financial plans, Tommy, and when somebody could or should or ought to retire, the things that I think pop into our mind is—I don’t know if chicken or the egg is the right thing, but if I don’t financially think I’m ready to retire, maybe emotionally I go into work and I say, “I love my job.”
Because I just don’t think I have any other options. But if a financial plan shows me that I can retire tomorrow, maybe it changes my tune. Maybe it changes everything about my emotions and whether or not I actually like my job or not. So knowledge is power, and knowing that you have a financial plan that allows you to leave the federal government to go down this career path that you just highlighted is powerful.
If we never had that financial plan in place and we were never comfortable leaving, we leave millions of dollars on the table. But more importantly than that is the satisfaction of achieving all of those goals and being able to write these new chapters. I mean, I think that’s what’s so cool is if you’re working, why am I working? What’s my goal? Am I doing it because I think I need to, or am I doing it because I want to? And that’s what’s so neat about most of our clients is if they decide to retire and go back to work, it’s not because they have to. It’s because they’re scratching that itch. They’re mentally stimulated through it. They’re giving back. They’re making a difference in the world. So I thought that was awesome.
I also liked how you hit on RSUs and options. We probably don’t talk about these a lot with on this podcast, but federal employees, guess what you do when you retire? Guess what military people do when they retire? They go to work at a defense contractor, and guess what happens when you work at a defense contractor? You unlock things like equity compensation and deferred comps and all these things that Tommy just mentioned.
So yes, we know RSUs and options really, really well, and we know how to exercise them. We know how to make sure they don’t get overweighted in your portfolio. We understand the tax treatment of them and how to layer them in over time. So if you find yourself exploring or maybe you’re in a second career that has equity compensation, we’re good at that too. We can only advertise so much about what we do. So we work with clients that are near retirement who have a million or more. We have the federal employee niche, but like, that does spiderweb often to a lot of things because a husband and… or a husband and wife or two spouses, they may or may not both work for the federal government. They could be HII and government. They could be VRS and federal government. They could be defense contractor and government. They could be biotech in government. So we see this quite a bit, and I think we’d be remiss not to mention to the people on this podcast that we can handle equity comp pretty good too.
Tommy Blackburn: Oh, yeah. Yep. Yeah, you’re right, the spiderweb. Because even if you… often you see that second career, but even if it’s not the second career or third career, the spouse—there’s a good chance the spouse has something going on as well.
But what’s really awesome, as you said, is the writing of those next chapters. That’s what’s so cool. If you just want—which many of you do—yeah, if it’s just, “I want to retire, and I want to travel and be with the family, I’ve got these goals, and I’m doing them,” and we get to be a part of helping you obtain that, that’s awesome. We love doing that. It’s also just really neat to see maybe you did it, and then it’s, “I’ve now got this other thing on my mind, and I’m going to go, not because I have to, but because I want to, and I’m going to bring my passion to this next thing in life, that chapter,” and getting to see. And that’s all empowerment through good financial planning and having that financial, essentially, independence or just understanding in place already.
John Mason: It’s really easy to get into a rut, isn’t it? You wake up, you do the same thing every day, you live the same life every day, you get your butt kicked every day with the same stuff, and maybe you can convince yourself that this is the way it has to be. Or my neighbor says everybody works until 65, so therefore I’m gonna work until 65. So you turn on the news, the stock market’s going down, or whatever it is, and you can get into a rut with negative information or bad information.
And what we’re just asking you, audience, as a takeaway here is to not allow yourself to get into a rut, and explore your options, become educated and informed. And who knows what’s gonna happen tomorrow in your life?
But what we can guarantee you is at the intersection of emotionally ready to retire and financial independence, really cool things happen. At the intersection of financially able to retire with—that means I have financial security—and the emotional side of being ready to leave my job as a federal employee or wherever, really cool things start to happen, and it unlocks possibilities that you can’t really envision until you have that clarity.
I think about, Tommy, our life right now, and it’s pretty busy with kids and sports and all the things that we’re doing, but then I look at the future and I say, “Well, oh, my goodness, we’re gonna be empty nesters before you know it.”
Tommy Blackburn: I know.
John Mason: And the opportunities that presents itself at that point are endless. Not that I’m looking forward to it, but for instance, let’s say I wanted to be a better golfer. Well, now all of a sudden, I’ve got seven days a week more opportunities to play golf than I do right now. And that’s just an example. So I think financially it’s similar. When you have that crossover or that intersection, it’s like becoming an empty nester. It’s like a material change in your life that unlocks potential, and what you do with that potential could just be retire and enjoy life, or it could be a new passion project.
Tommy Blackburn: Exactly. Well said.
John Mason: Well, I think we’ve done a good job hitting this. I guess one other kind of random thought that I know we addressed on the last podcast episode is: how is AI transforming our business, and how is this different?
Well, audience, I think you should know that AI is transforming everything that we do, not because it’s replacing human advisors. It’s just gonna make us more efficient. And we’re still learning about it. We’re never gonna be first to market with some of this stuff, but we’re not gonna be far behind because we wanna be in a powerful position to take advantage and leverage technology to better serve you.
I think our commitment, Tommy, which we’ve said for a long time, is we’re always gonna have somebody answering the phone. In today’s age with AI, I think it’s even more important that our audience know 757-223-9898, somebody’s gonna answer the phone. Monday through Thursday during normal business hours—not on the weekends, not on holidays, not at midnight, but during normal business hours, we’re gonna have somebody answer the phone.
And Tommy, as we think about AI and leveraging our time, as well as our operations team and other folks at Mason, we’re not trying to eliminate human contact.
Tommy Blackburn: No.
John Mason: We’re actually thinking about how we can eliminate the stuff that happens behind the scenes that is the non-human part of what we do. How do we automate the non-human part of what we do so we can be more human with our clients? That’s how AI is transforming our business. So I think it just makes sense for the audience to know, like, that’s the level of hand-holding and care that we see as the future of financial planning.
Tommy Blackburn: Absolutely. Yeah, the goal of financial planning is about being human, or at least good financial planning. And all of it is to try to have a better client experience, have automation to get rid of as much mundane things that are still critically important, but maybe have a human supervise it, and it can do it better.
There’s forms, like things that are just very data-heavy that AI can support and make more efficient so that we can bring the human element to it, bring our expertise, our supervision, have a better client experience. But nowhere as we brainstorm in the future are we thinking that the advisors go away, or that the, “Hey, let’s go take time together to do whatever it is we need to do in a financial planning relationship.”
Like many times it’s go file that Social Security or Medicare app, go over the retirement app, review a tax return with you if we need to, or a projection, just… and many other things. Could be visiting somebody in a nursing home, whatever it is, or calling you out of the blue for something important that’s happening in your life. And we want the same for our team. So all of it is to just have a better, more powerful team, firm, client experience. Nothing, nowhere in the vision is the human contact disappearing.
John Mason: It occurs to me that one of the things we say to clients—unfortunately, we have at least one client probably pass away every year—is that, “Mr. or Mrs. Client, we have this under control. We planned for this. You grieve and take the time you need to do those things. We’ve got your back. We’re gonna start the process on retirement applications and SBP claims, life insurance claims. We’re gonna do all that for you so that all you have to do is grieve, and every step of the way, we’re gonna hold your hand through that process.”
That is something that AI can’t do, and it’ll never be able to do. The other thing it can’t do, excuse me, is that it can’t necessarily hear you or understand you or get you, and maybe one day it’ll be convincing enough that it can do those things. But there’s something pretty powerful if Tommy comes in as a client and he’s communicating his deepest, darkest fears and concerns about the world, his financial plan, for me to be able to say, “Tommy, I hear you, and I’ve helped clients just like you navigate that for the last 16 years. And at Mason, we’ve been doing that for even longer.”
There’s something pretty powerful in being able to repeat what another human said and feel for them and understand them and acknowledge the happy times, the sad times, and anything in between. We’re not therapists, but a certain amount of what we do is very therapy-like, and it’s understanding the emotions, the qualitative and the quantitative behind everything.
There was a Wall Street Journal article. I wrote down WSJ. Now I’m trying to remember why I wrote it down. So now I’m having a blank. So Tommy, any thoughts—
Tommy Blackburn: It happens.
John Mason: —that you wanted to add as I think about this WSJ article that I wanted to reference?
Tommy Blackburn: It’s funny, the acronyms we have as we go, as we do things. I think there, as an aside, I was telling my spouse, my wife, about, “Oh, John invited us to the JRCC.” And she’s like, “What?” which is the James River Country Club. We had a nice family outing the other day. The country club had put on a family event, I guess a festival, circus kinda thing of sorts for the spring. It was really cool. We got to hang out with John and his family, and the kids have a blast and enjoy that.
So anyway, WSJ made me think about the acronyms that we use in life. I think we’ve hit it pretty good, John. Hopefully everybody understands, like, the… or is getting a sense of the power of the dynamics, and it’s just very fluid having those relationships. It just gets stronger and better, it seems, as you go through time together.
John Mason: I agree, and thank you for covering for me with the JRCC story, because now I remember what I wanted to say. There was a Wall Street Journal article. I think it was a Wall Street Journal article that, or maybe it was on LinkedIn—I get all of them confused—but it was somebody or something saying that advisors, human advisors, are very offended. Could have been kitces.com, I don’t know.
Advisors are very offended and less likely to want to work with somebody who fact-checks them through AI. So if Tommy came in and he wanted to be a client, I provided some advice about Roth conversions, and then he fact-checks me with Claude or ChatGPT or what have you, the article is suggesting that I, John, would be very offended by this behavior, even more offended than if Tommy had gone out and got a second opinion from another financial planner that specializes with federal employees.
And I just think, wow, I don’t know if that’s true, but I’m not gonna be offended if anybody asks ChatGPT anything. I’m not gonna be offended if they go into Claude and they say, “Is John crazy?” Because ultimately, I want them to feel confident in the plan that they’re implementing.
Now, if you’re going to fact-check or go get a second opinion, it is also important that we understand the full context of why that advice was given to begin with. And I think that it’s not dangerous to get a second opinion, Tommy. It’s when you put people against each other, either human versus human or human versus robot, you have to lay out all the parameters for the decision-making process to see if the human and the robot or the two humans get to the same place.
But if you don’t set those parameters or expectations, human or robot can go very different places very quickly. So, any thoughts on that? I’m not gonna be offended fact-check me.
Tommy Blackburn: Yeah. No. I don’t think I’ll be offended. I think if it’s a… I guess I could see if it was everything we talk about is constantly being challenged, at a certain point, it’s like we’re not developing trust. We’re too bogged down in whatever we’re doing right now. This isn’t productive. I could see that becoming eventually a bridge that you’d have to cross. But to me, that’s just gaining information. It kind of brings it back to the value of like why you have an advisor or a professional. Somebody in your space is like, “Help me distill this down.”
And what I’m thinking about as you share that, John, is some clients, they do share articles and things that they read with me, and generally, I think it’s great. We get to have informed discussions where it’s like, “Oh, we actually believe this, don’t believe it. Here’s our thoughts on it. Here’s our—” to your point, the context for your situation and what we think, but I think it makes a more powerful relationship.
And I think, too, about our concierge doctor, and I just met with her the other day and was telling her, I was like, “I’m naturally curious, and I want to be a good partner in this relationship. So as we’re working on things, I’m trying to educate myself as we go. And yeah, I chatted with ChatGPT or Claude about this thing we’re working on, and it threw these things out there, and I’m just curious, like, what do you think about it?” Like certainly, I pressed the bot some more to help me explain why it was throwing that stuff out there.
I don’t think it came across as offensive to her at all. Part of it’s probably how I framed it, which is, “You are the expert, and I just wanna have a discussion about that. That’s why I’m bringing this forward.” And she immediately made me feel really comfortable about it. She’s like, “Those are tools out there. I don’t think they’re right for your situation at the moment because blah, blah, blah.” And I was like, “Well, great. That’s why I have you here.” I didn’t get twisted around the axle by what it was throwing out, and you actually made me have more confidence in you because you knew exactly what it was talking about and why, in your professional judgment and experience and knowing me, that’s not where we are right now.
John Mason: Our favorite clients are the ones who are educated and informed, and they participate in the planning process, and there’s a healthy amount of—you said it well—participation, but then defaulting to, “Well, this is the recommendation.” If the client never implements anything that we recommend, then there’s no point in having the client-advisor relationship.
But coming in educated and informed, there’s also a tightrope of: you’re doing too much research. Like, it can get to a point where it becomes unhealthy or you’ve done too much or you’ve gone too far. Similar with our concierge doctor, I think she loves working with us because we take our health seriously, and we do come in with good questions. We wanna maximize her time and ours, so we do like that. We like clients who participate, but we also like those same clients who say, “I’m participating. I’m educated, but I still want the official recommendation from you, the human.”
So a lot of great things to unpack there, Tommy. I think we did a good job here, and maybe this will be something we do going forward, which is just continue to talk about how AI is going to transform our business, both from an efficiency standpoint, but also allow us to be more human with our clients than ever. So I think that’s always a nice touch to put in here.
Tommy Blackburn: Yeah, absolutely. Well, I hope the audience enjoyed it. Thanks for hanging out with us as always. And John, same to you. It’s always fun doing these episodes together.
John Mason: Thanks, man. I appreciate it. Audience, remember, we’re financial planners first. We do this content creation second. We hope you leave this episode and every episode feeling educated and empowered to make positive changes in your financial plan. Thank you for hanging out with us on another episode of the Federal Employee Financial Planning Podcast.
The topics discussed on this podcast represent our best understanding of federal benefits and are for informational and educational purposes only, and should not be construed as investment, financial planning, or other professional advice.
We encourage you to consult with the office of personnel management and one or more professional advisors before taking any action based on the information presented.
