Money Rules: Expert Insights on Retirement Planning with Harry Abrahamsen
- Ken Connolly
- Apr 9
- 5 min read
In a recent episode of "Talking Retirement," host Ken Connolly welcomed financial advisor Harry Abrahamsen, author of "Money Rules" and a specialist with over 20 years of experience focusing on retirement planning. Their conversation revealed critical insights about retirement preparation that go beyond conventional financial wisdom.
Beyond the Numbers: Understanding the Human Side of Retirement Planning
One of the most powerful concepts Abrahamsen shared was the fundamental difference between money and math. "Money and math behave differently," he explained. "Math is perfect. One plus one equals two. If you and I are around a thousand years from today, one plus one will be two. But $1 today plus $1 a year from today will never be $2 between taxes and inflation and other wealth eroding factors."
This distinction forms the foundation of Abrahamsen's approach to retirement planning. He believes money behaves more like an orange than a mathematical equation: "If you put four oranges in the middle of the table, got up left and came back a year later, how many oranges would be in the middle of the table? None. They rot, turn mildew, someone might come in and take it."
"Money Rules": A Blueprint for Financial Independence
Abrahamsen's book, "Money Rules," provides a comprehensive guide primarily intended for those who have already accumulated assets. "The book really is written for people that have money," he explained. While some chapters focus on philosophical concepts that anyone can apply, the later sections delve into specific strategies for wealth management.
What makes the book unique is its real-world approach to financial planning. Rather than offering one-size-fits-all advice, Abrahamsen acknowledges that different situations require different strategies. "In this version of my book, it doesn't have any guardrails on the strategies," he noted, explaining that he plans future editions specifically tailored for retirees and entrepreneurs.
The book has opened conversations about financial options that clients hadn't previously considered. "The book gave me a platform to write about a lot of things I don't normally talk about with my clients," Abrahamsen shared. "I find it really interesting that the older people, once they read my book, one of the first things they say is, 'hey, we never talked about life insurance.'"
This broader approach allows readers to explore financial concepts they might not have otherwise discussed with their advisors, creating opportunities for more comprehensive planning.
Common Blind Spots in Retirement Planning
Throughout the interview, Abrahamsen highlighted several areas where retirees often get blindsided:
Required Minimum Distributions (RMDs)
Many retirees are unprepared for the tax implications of RMDs. "Their first RMD hits and they think, 'wait a second, what's going on here?'" Abrahamsen noted. "Some of these RMDs are over $250,000 on a first RMD. And when they're surprised, I tell them, 'that's all taxable income.'"
This can push retirees into the highest tax bracket of their entire lives, a reality many don't anticipate.
Inflation's Impact on Expenses
While retirees may have a budget in mind, they often don't account for how inflation will increase those expenses over time. "It may start off $15,000 [monthly expenses], but like 20 years from today, it's maybe $26,000," Abrahamsen explained.
Black Swan Events
Perhaps most importantly, Abrahamsen emphasized the unpredictable events that can derail retirement plans: "A black swan event is something that's totally not [planned for], you cannot predict it. It's literally unpredictable. Real risk is everything that nobody's talking about."
A major health crisis is one such event that can completely shift a retiree's focus and financial situation.
Planning for the Unexpected
For self-directed investors, Abrahamsen recommends establishing relationships with financial advisors while still in good health. "I would highly recommend that you have a relationship with a couple of different financial advisors so that while you have your wits about yourself, while you're at the top of your game, you can see who is a person that you can trust."
The reasoning is clear: "The last thing you're gonna wanna be doing... You're not gonna wanna be interviewing for advisors when you're in your 70s dealing with cancer."
Challenging Conventional Financial Wisdom
Abrahamsen isn't afraid to challenge popular financial personalities. He specifically questioned Dave Ramsey's advice that retirees can withdraw 8% from their portfolios annually: "I don't even understand how he can even say something like that... because the markets go up and markets go down, that sequence of risk returns."
He emphasizes that generic financial advice often fails to account for individual circumstances. When asked about strategies like Roth conversions, Abrahamsen responds: "I don't know. I have no idea. Let's sit down and talk about it. What's your tax bracket? What's your income?"
The Future of Retirement Planning
Looking ahead, Abrahamsen is watching several potential developments that could affect retirees:
Whether the Trump administration will extend tax cuts that are set to expire
Possible changes to Social Security taxation
Potential modifications to RMD calculation methods
He's particularly interested in seeing if retirees might get more flexibility in how their RMDs are calculated, similar to the options available to younger people through 72T distributions.
Life Insurance as a Tool for Retirement Planning
Abrahamsen revealed he personally holds 12 life insurance policies, primarily "paid up policies at 65" (L65s). While acknowledging the financial benefits, he emphasized that life insurance ultimately comes down to one word: "love."
"If something happened to me, whatever the circumstance would be, it's kind of nice having that insurance that's permanent that I know is never going to go away that I can count on," he explained.
He values permanent life insurance because "all the risk is on the insurance company, all of it, 100% of it. They can't change it, they can't get rid of it." This security becomes particularly valuable when facing health challenges later in life.
Conclusion
Harry Abrahamsen's approach to retirement planning combines technical expertise with a deep understanding of the human elements involved. His perspective reminds us that retirement planning isn't just about mathematical formulas—it's about preparing for life's uncertainties while protecting the people and values that matter most.
For those interested in learning more about Harry Abrahamsen's approach to retirement planning, he can be found on YouTube and at www.AbrahamsenFinancial.com, where he regularly shares insights on retirement strategies and financial planning.
To read Harry's book, click this link for Amazon.
Ken Connolly is a licensed life and health insurance broker and host of the "Talking Retirement" podcast.
To learn more Medicare, life insurance options and other supplemental health insurance options, talk to NJ Life and Health. Visit us at www.njlifeandhealth.com or call their Toms River, NJ office at 848-226-6897.
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