Episode 85 – Retirement mindset: Malia

Growing up, Malia often heard a simple message about money: Don’t spend it. Over time, she’s come to see just how much more nuanced financial decisions can be. Now the DRS Defined Contribution Plan Manager, Malia reflects on a 20-year career and the lessons she’s learned from working with real people. From starting small and automating savings to prioritizing health and flexibility, she offers a thoughtful perspective on preparing for retirement.

Episode transcript:

[music intro]

Jenny

Welcome back to Fund Your Future with DRS. Today I’m interviewing one of our frequent guests about their retirement mindset. Malia, who is our defined contribution Plan manager at DRS here. Well, welcome back Malia.

Malia

Thank you, Jenny, for having me.

Jenny

So first off, obviously we’re talking about career and planning for retirement and all that kind of stuff. I heard that you were pretty young when you started at DRS. How old were you when you started working and what was your role?

Malia

Yeah, so that’s a good question. I was very young, probably one of the youngest people, so I started working at DRS when I was just 18 years old as one of the receptionists. Prior to that, I was very lucky. In high school, I got like an internship where I worked at a bank back when it was Washington Mutual, so dating myself even more. And so, I had a lot of financial skills from that job that kind of lent itself well to a path at DRS.

Jenny

Nice. So, you started as receptionist and then eventually worked as a retirement specialist, right?

Malia

Yes. That’s right. Yeah. I’ve been in a few different positions at DRS Retirement specialist, and then I worked on more behind the scenes kind of stuff with the people who did kind of our knowledge management and things like that. And then I left to go work for the City of Seattle for about six years, working on their deferred compensation plan, and then came back here to manage these plans. So, I’ve been in this industry for about almost 20 years now.

Jenny

That’s pretty good. And how would you say that working at DRS and working in, in retirement in general has shaped your own view of retirement?

Malia

That’s a really good question. Especially starting so young, you know, at the start of your career, to work at a place that helps people transition out of their careers is really interesting. And it’s really amazing because I was kind of reflecting on this and thinking about how I think one of the coolest things about, especially my time as a retirement specialist is you really get kind of a crash course in retirement.

And so, you kind of get to see these real life examples and situations and lessons learned of people’s experiences. Now, I don’t always follow those lessons learned, but you get to see, you know, where people are kind of the gap between what they fantasize their retirement is going to be like and what the reality is going to be like.

And to see kind of the impacts of decisions people make throughout their career on their retirement. So, I think that’s been one thing that’s really interesting. Working in the industry in general just gives you so much of a preview of future hindsight. Like I’ve seen people’s paths change in an instance where they have a lot of money, but then they aren’t able to do things in retirement like they had planned.

Or I’ve also seen the psychological aspect of retirement, where people have so much saved and they just can’t let go of their career because that’s their whole identity and purpose. And so definitely, you get to see a lot of lessons learned in that regard with working in the retirement industry.

Jenny

Yeah. And then what about growing up, like, did your parents have a lot of conversations with you as a kid about spending and saving money?

Malia

So, the narrative was more of just ‘don’t spend money’ and not really any practical aspects of how to save. And my parents were both state employees. They both retired from state government. And so, I grew up with this idea that if you get a state job, you’re going to be set. You’re going to be good. And it wasn’t until working at DRS that I learned that things like your pension really isn’t enough, and you need to be saving outside of it with things like deferred comp.

You know, when I first started, I was like, I’m going to take my pension. That’s going to be everything I need, and I’m set and good to go. And it wasn’t until after, again, seeing those people who were ready to retire and getting their pensions, just how much it’s not going to cover when it comes to things like medical premiums, their lifestyle, whatever it may be, really realizing the truth of especially for me, I needed to be more aggressive in my savings being so young.

Jenny

And what’s a financial habit that you’re proud of? And maybe one that you’re still working on?

Malia

So, I think one of the things that I like to say to people is I like to practice what I preach. I’ve obviously been on these podcasts before where I talk about things like just a little bit is better than nothing. And so, I think that that’s something that really resonates with me is I can’t just come on here and say those kinds of things.

I have to actually do it. And like, I’ve made a lot of mistakes in my finances, whether it be not saving early on in DCP, like I said, or living beyond my means or having too much debt, whatever it may be, but you really can tackle those things and come out on the other side, even if you’re just living paycheck to paycheck.

And I think one of the things that I’ve learned that has really impacted my habits is that there’s a mindset to it. It’s not just using the excuse of, “I don’t have enough money to save” because you’re never going to feel like you have enough money to save. It’s about learning to prioritize, saving money, and so you really have to evaluate what you’re spending.

And for some people like me, I know you’re not like this, Jenny, but I don’t like the budget spreadsheets of apps. I know you love those, so I had to create simple habits to think about my spending. So sometimes it’s like if I want to make one of those dopamine purchases online or something, I have to ask myself: “would I buy this on a fixed income?”

And usually the answer’s no. And so, it’s just creating those little habits of practicing, prioritizing savings over spending, which is something that I’m proud to have come very far on, but definitely still working on.

Jenny

That’s great. I have adopted a bit of those as well. Usually, the one I tell myself is like, “do I need to buy this right now?” It’s like I’ll put it in like my Amazon cart and then save it for later. And then come back to it a week later and be like, “do I still want to buy this?”

Malia

Or I know that’s I know especially they get you with those same day deliveries and you’re like, oh, let me just find ten more dollars. And if you just take that pause to ask yourself, do I really need this right now? The answer is usually no.

Jenny

And then, a habit that maybe you’re still working on.

Malia

I would say that as well. Kind of the same thing. It’s a work in progress. You know, I’m not always successful at it. Right. I’ve also found, I think along the lines of habits is for me, the best habits are the ones you obviously don’t have to think about. So, making it a practice to automate as much as possible.

So again, practicing what I preach, I went in and I set up my DCP contributions to automatically escalate by a certain percentage. And I picked a random day, to do like every quarter or something. So hopefully I wouldn’t notice it. And I did that like a year ago and I really haven’t noticed it. So I can tell everyone you truly most likely won’t even notice it.

So, I think that’s the other habit is just trying to automate as much as possible, whether it’s, you know, getting your bills or if you want to make extra credit card payments, just getting that all automated so you don’t even have to think about it.

Jenny

Yeah, I love that. That’s probably my number one advice too, is automation. I’ve got kind of automation of amounts that go into different accounts, whether it’s also into like my Roth IRA and then also a little checking account that I use for like fun spending.

Malia

Yeah, I know, and there’s some bank accounts now that even like the round up and they put it in a savings. So like bank accounts and options have come a really long way to help with those automations. And for someone like me personally, that has been a lifesaver with helping with all of those kinds of things.

Jenny

So obviously you’ve worked in finance for a while. What would you say is the best financial advice that you’ve ever received, or just something that comes to top of mind?

Malia

Yeah, so top of mind. Obviously what I just said that something is better than nothing. I think as a society as a whole, we really get these ideas of what perfection or a perfect path looks like or the actions we should be taking, and it really immobilizes us into not taking action. I think about when I first started and I didn’t save in DCP for several years because I kept thinking I didn’t have enough, and if I had just done even like the bare minimum, I would have had a bunch had grown over that time.

So sometimes, even though it can look really daunting, the idea of paying off all your debt at once, or putting away the maximum you can in retirement. Just starting small makes such a world of difference, whether that’s paying off one thing or just starting with even the smallest of contributions. It’s about building that habit, and then it will grow as you get more used to it.

Jenny

Good advice. So, when you think about your own retirement, especially from more of the hobby, enjoy retirement standpoint, what does that look like?

Malia

So that’s a good question. And to be perfectly honest, I don’t really have a specific vision in my head. It’s fluid. It changes a lot day to day. There’s days where I think a retirement traveling the world sounds amazing. And then there’s days where that sounds absolutely exhausting and maybe just sitting and being able to read a book all day, it sounds better.

And again, you know, working in the retirement industry, there’s so much talked about with planning meticulously, but you really see how much is outside of anyone’s control. I’ve seen people have to unexpectedly retire because of their health, or they couldn’t mentally bring themselves to retire and then never got to enjoy any of their life savings. Or, people who are grandparents who unexpectedly have to take on the role of parents in their retirement years.

And so, I think one of the things that I found when it comes to my own retirement is that I’ve had to redefine what it means in my head. And so, I think about it as like flexibility to pursue whatever these things might look like. The other thing is too, maybe retirement doesn’t even mean complete rest. Maybe it just means being able to work on your own terms.

Like there’s a lot of cultures where people just continue to work into their 80s and 90s, and they love that. And so, I don’t fully know exactly what it’s going to look like when I think about my future, whatever it may be. I think about, you know, how can I balance stability and ability, whatever that looks like. Maybe it’s moving to another country in retirement.

Maybe it’s continuing to work, maybe it’s just doing nothing. But in terms of my vision, like I said, I don’t really have a clear cut path. I just know I want finances to be able to support, deciding whatever it may be.

Jenny

Yeah for sure. Do you have a hobby that you would like to have more time to spend on a particular hobby?

Malia

Yeah, that’s a great question. So, I enjoy doing a lot of active things. And so that’s something that I’ve actually really been thinking about when it comes to retirement is that health is just as important as wealth. Right? And so, I like doing, you know, hiking, backpacking. I tell myself I’m going to run more. Sometimes I do, sometimes I don’t.

But I continually think about when it comes to retirement that I want to be able to do these active things when it comes to those later years in life. I used to have a workout instructor who would say something like, “we’re doing this because not for now, we’re doing this so when you’re 70 or 80, you’re able to get up the stairs unassisted.”

And so that’s something that’s really important to me too, is thinking about all these active hobbies that I really enjoy doing. How can I make sure I can continue doing them later in life?

Jenny

Yeah. Are you planning any kind of major hiking or backpacking trips in the next couple of years?

Malia

Well, I always have ideas in my head. When it comes to things like backpacking, you have permit systems that you have to navigate. So sometimes you have a great idea, and sometimes you have to be ready on a whim, to be able to get, you know, a last-minute permit or something. So, I just like to kind of see what’s available and what the options are and just be able to get out there.

I have lots of ideas in my head, you know, I think, oh, one day I’d love to do the Wonderland Trail, or one day I’d love to do these bigger trails. But there’s a lot that goes into planning that. And so I also, again, kind of being able to be flexible and fluid with those plans and say, okay, well, I can pivot and go do something else instead.

Jenny

Yeah. And then you kind of mentioned also wanting to travel more. Obviously there’s lots of places to go visit. If you had to go to a foreign country in the next three years, let’s say. What’s on the top of your list?

Malia

That’s a hard question because you want to go to them all, right? I was able to go to Japan a few years back, and I really loved it, and it wasn’t enough time there. And so that’s a place I’d really love to go back to and experience more of. I’ve actually also never been to Europe. So, even though I’ve been to a lot of other places outside of the country, Europe is one I’ve never been to.

So, things around there. But again, there’s just so much to do, and each is really just trying to hone in and pick a place. And of course, I think one of the things that helps me determine, when it comes to travel is what kind of deals are there on flights?

Jenny

Yeah, and there’s lots of good apps for that too. We’ll have to chat about that later. So we kind of touched on it a little bit, but what’s a non-financial habit do you think will matter the most or one that you want to focus on in retirement?

Malia

Like I said, health. In particular, I think about flexibility and mobility. I think when you’re younger, you kind of conflate working out as being like an esthetics thing. And it’s not until your body starts to fail on you a little bit that you’re like, oh, no, there’s reason to do this beyond that. And so, things like even like yoga, flexibility, mobility.

I’ve in the last couple of years been trying to incorporate more of because, you know, you just become more injury prone, being able to stay healthy and have the ability to do all of those things when I get to a place where if I decide I don’t want to work anymore, I’m able to do that, is really important to me.

Jenny

Yeah, like, I know that I try to get out for a walk at least once a day, whether it’s like with my dogs, even if it’s just for like ten minutes. And then I try to do yoga once a week as well.

Malia

I see these stories all the time about these like retirees, like people who are in their 80s or 90s who are running like, they have this world marathon where you run a marathon every continent in seven days, and there’s people in their like 80s doing that. And I’m not saying that that’s something necessarily I’d want to do. Maybe that’s up Seth’s alley, I don’t know.

But, you know, I don’t want to limit my options. On if I did decide to do something like that. I want my body to be able to keep up with that.

Jenny

Yeah. And then kind of one of our final questions, I mean, we touched on this a lot already, but how would you define a good retirement for yourself?

Malia

Yeah. So sometimes the idea of a good retirement is also planning for regret prevention and thinking about what can I be doing now? So, I’m not regretting that I didn’t do it in retirement. And I think that’s something people don’t think about very often, is they kind of push it off to this end game. You know, they look at retirement is like a second lifetime, like I’m going to do all these things.

And so sometimes you also have to think about what can I make sure I don’t regret? I didn’t do. And so for me, I think when it comes to a good retirement, I think about stability versus flexibility. Like it’s not just having enough money to be able to pay for what you need, but it’s also having just control over your time, being able to decide what you want to do.

The real goal isn’t necessarily leaving the workforce. It’s about optionality. It’s about being able to have the financial independence, to have choice, whether that’s exiting the workforce or maybe having the ability to work on my own terms. All that to say, I don’t really necessarily have a clear cut plan or path to retirement, but I think that’s okay.

I just know I work towards an undefined future that will balance flexibility, stability, give me options even if I don’t know what all those options are yet. I just want to save enough and be healthy enough to choose how I want to live as I get older, whatever that may look like.

Jenny

Nice. Well, sounds fabulous. Sounds like you have a lot of options and lots of things to explore and think about in the meantime.

Malia

Yes. Thank you.

Jenny

Yeah, well thanks Malia, thanks for sharing with us. I really appreciate it.

Malia

Thank you!

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