[00:00:00] Speaker A: Any examples used are for illustrative purposes only and do not take into account your particular investment objectives, financial situation or needs and may not be suitable for all investors. It is not intended to predict the performance of any specific investment and is not a solicitation or recommendation of any investment strategy.
[00:00:17] Speaker B: You're tuned into the Retirement Planning Pipeline, the show that helps you take control of your financial Future. Whether you're 5 to 10 years from retirement or just getting started. We've got the strategies, tools and experience to help make the most of your nest. Eg.
Retirement planning specialist David Pipes is a trusted voice in retirement planning, helping Americans navigate 401k rollovers, income planning, tax strategies and everything in between.
Now let's dive into today's show and start paving the way to your smooth retirement. Alongside retirement specialist David Pipes, here's your host, Jim Tarabakia.
[00:00:52] Speaker C: Hi everybody. Welcome to this week's edition, a brand new episode of the Retirement Planning Pipeline, the show that delivers expert insights, actionable advice and real world financial strategies to help you retire confidently and comfortably. Thank you for making our show a part of your weekend. I'm your host Jim Tarabokia alongside retirement planning specialist David Pipes. David will be along in just a moment. Today's 6040 portfolio rethinking the roles of bonds and fixed indexed annuities in a modern retirement income plan. Coming up on today's show, is the traditional 6040 portfolio still right for retirement? Plus, bonds aren't as safe as many investors think. Is there a perfect retirement investment? And we'll test your knowledge with everybody's favorite game, right or Wrong. That's all coming up. But before we get the show started, I want to encourage our listeners to go ahead and schedule your 100% complimentary consultation with retirement planning specialist David Pipes today.
It's a free offering just for listening to this show. Our listeners can meet with us to review their own financial situation for your family or for your business. And there's absolutely no obligation. Visit retirement planningpipeline.com to get started. All right David, welcome in. Let's get the show started with this is the traditional 6040 portfolio still right for retirement? Why? Diversification, not a specific percentage, is the real key to long term success. For generations, many investors have treated the 6040 portfolio as a retirement planning shorthand, put roughly 60% of stocks in for growth, 40% in bonds for stability and income rebalance periodically, and then let diversification do its job. The idea came from the diversification principles behind modern portfolio theory, not from one universal formula Harry Markowitz showed why combining assets with different risk and return characteristics can improve a portfolio. The familiar 6040 split became a practical interpretation of that work. So on today's show, we're asking the bigger question. And David, I want to pose this to you. Should part of the traditional bond allocation be evaluated for a fixed indexed annuity that protect principal from direct market losses and when elected for that purpose, provide guaranteed lifetime income?
[00:03:10] Speaker D: Yeah, I think, first of all, I think that the first problem is, is talking about what we see now compared to what was around back then. Right. And I think everyone can understand this. And for all your listeners out there, either you're listening on, you know, in your car, or let's own. Own the podcast or your. Or Live. First off, good morning. But I think that everyone always tries to do the same tactic that they used to do. And I think that sometimes we, we get caught up in not innovating and not making things different when, when, you know, different, different times come about.
And I think I'm going to leave with this with one question, and that's, you know, do you drive the same car that you did 20 years ago? Okay. And that question can answer a lot of these questions that Jim's asking me right now because we want to go towards the same 60, 40 bond, bond stock portfolio that we used to have, you know, that was spent centuries old, Right. Or, and I think the hard part is understanding that there are better ways now in the economy, different, you know, the economy has different strategies, right? We have, we have different points of time in history and different points of time in the economy where we can take advantage of certain opportunities, whether it's interest rates, whether it's, you know, maybe a market downfall, whether it's, you know, maybe a recession, right. So all these different things, you should be able to change your portfolio depending on, right. Different economy representations. It shouldn't be just a one size shoe fits all. And I think we all know that in the back of our mind, but we can't really bring it up. Right. So what your question was, Jim, was, you know, should that fix index annuity now? Right. Come into that bond proportion? And absolutely, it really can.
And there's a lot of reasons why. You know, one reason is if you've gotten the bond portfolio and you've averaged, you know, what a regular bond ETF or a bond mutual fund has done compared to some of these fixed index annuities, right now, you know, the percentage rates change, right. And you know, they're outperforming the Bond market. I mean, you know, in a lot of different cases now, it depends on which fixed index annuity you're going to sell and, you know, which one fits a client's need. I think the annuity gets such a bad rep out there because of the big bad word, because of the fees and all this and all the nine yards. But really, when interest rates increase, right? It increases the fixed index annuity world, increases the annuity world. It makes annuities more advantageous for the client, just like bonds, right. When interest rates increase, you want to get into a bond because maybe you get a higher interest rate. Okay.
And that works the same way, right. With a fixed index annuity. So I think that obviously with these competitiveness of, of, of companies coming out with income products that are paying out a substantial amount, right. Or even, you know, with market link growth, right. It's not guaranteed growth, but you have, you know, market link index growth, right? Let's say you have a cap of a certain percentage for 9 or 9 or 10%.
You can get that percentage change in that market that year without any risk. Right. And that brings a big side of the portfolio that we don't see with the bond market.
[00:06:27] Speaker E: Right.
[00:06:27] Speaker D: Because the bond market's a fixed interest rate. Right. So I think that the number one thing people have to understand out there is, is that we have to get away from what used to be the old, you know, the old terms. And I think everyone's kind of realizing that those portfolios aren't producing what they need, right? They're not producing enough to, to give someone the retirement that, that they actually want.
[00:06:51] Speaker C: Jim, let me ask you this. You, you meet with so many diverse types of clients. You were busy all morning meeting with clients today. You have met with clients who have called in from the radio show 850-565-1705, by the way. But I want to ask you, who is the right fit? Just kind of generalizing here, the right fit for a 6040 portfolio?
[00:07:14] Speaker D: I, I, I don't have that answer, Jim. I don't have that answer. And I think it's a 6040 portfolio is, is, I don't think the right answer for anyone.
You know, I, I think that everyone has to have their certain goals, what they're, what they're wanting, what they're needing.
I'm not a big bond fan. I'm just not, I do not like bonds, Jim. So to talk about a 6040 portfolio, to put 40% of your money into bonds is just, I think, settling short, you know, I, I think it's not doing what it needs to do for the client.
And, and, and I will stick with that into the day I die. I, I'm not a bond guy, just like Warren Buffett. I mean, Warren Buffett hates bonds. I just, I'm not a big firm believer when the mathematics show, bonds never win. So if you have bonds in your portfolio and you're thinking to yourself, David, why do I have them in here? Right. What's the alternative? Give us a call. I would love to sit down with you because that's an easy conversation. So really. And I have that conversation every day. This morning I had it with three different clients, right. Or prospects that are now, you know, joining my, my advising. So I think that a lot of the times people are always looking at what, what they could have or what other people did or trying to, you know, copy other people's strategies when they really should be doing is they should find an advisor that is able to innovate and look at new strategies that are in the now, that are in the economy right now that with the AI boom, with, you know, different tech stocks, maybe at a lower price level, with price per earning ratios, with companies they could buy with, you know, with different alternative products, with fixed index annuities that can maybe give them an 8% return that year without risk. Right. And that's not guaranteed, obviously, but you know, if market goes up, you get that market link growth, right?
So I think people are so stuck on one side, they're not opening their mind up. So if any of you out there have that process and you're thinking to yourself, David, how do I switch up from the bond mentality? You're right, I see it. My portfolio is not producing what I think it should produce. Give us a call, we'd love to help you out.
[00:09:16] Speaker C: The 6040 portfolio earned its reputation because it was built on a powerful concept, diversification. But the allocation itself was never meant to be a one size fits all solution. As your life changes, and especially as you move into retirement, your investment strategy should reflect your current goals, income needs and risk tolerance, not simply a formula that's been around for decades. Again, if you have any questions or let's get started on that retirement portfolio analysis, visit us on the web at retirementplanningpipeline.com or call 850-565-1705. Coming up later, is there a perfect retirement investment tool? But up next, higher interest rates, the risk many retirees overlook. This is the retirement planning pipeline.
[00:10:00] Speaker B: We'll be right back Visit Retirement Planning Pipeline to schedule your free no obligation code complimentary consultation today. The Retirement Planning Pipeline will return in just a moment.
[00:10:18] Speaker A: Retirement should feel secure, not uncertain if market swings have you feeling uneasy. You've probably heard about annuities, but what aren't they telling you? You deserve the full story. That's why we created a free guide that explains the good, the bad and yes, even the fine print.
Inside you'll learn how annuities can create guaranteed lifetime income, what fees and surrender charges may apply, how the different types of annuities really work, and whether an annuity makes sense for you. It's clear, straightforward information so you can make a confident decision. Contact Amerilife now to get your free guide to annuities, the good, the bad and the fine print. Call 866-554-9546 or go to annuitygoodandbad.com that's annuitygoodandbad.com ANNUITY Silex annuities contain withdrawal charges,
[00:11:00] Speaker B: interest and bonus recovery and market value adjustments that may apply to withdrawals made during the withdrawal charge period. Silex annuities are products of the insurance industry and not guaranteed by any bank nor insured by FDIC or ncua. NCUSIF not a deposit not insured by federal government agency. Guarantees are based on the claims paying ability of the issuing insurance company. Restrictions apply. May only be offered by a licensed agent.
[00:11:19] Speaker F: Take a walk through almost any neighborhood in America. Behind every front door is more than a home. It's an asset, one that for generations has helped families build wealth while keeping up with the rising cost of living. I'm Jim Tarabokia with the retirement radio network powered by Amerilife. Today, as inflation continues to reshape retirement planning, more Americans are beginning to view real estate differently. Not simply as a place to live, but as an important part of a long term financial strategy. Inflation quietly erodes purchasing power every year. Everyday expenses, from groceries to health care can cost just a little bit more. But which is why many people nearing retirement are asking a critical question. How can my investments continue working even as prices continue climbing? For many investors, the answer includes real estate. Unlike cash sitting in a savings account, investment property is a tangible asset, one that has historically had the potential to appreciate in value while generating rental income, CNBC Business News editor Robert Frank says. Younger generations millennials, for example, are choosing to gain wealth through real estate over the stock market.
[00:12:27] Speaker D: 88% of Gen Z millennial investors plan to increase their allocation to alts in the next few years. Two thirds say traditional stocks and bonds can no longer provide above average returns.
[00:12:37] Speaker F: And it's not just younger investors. Many retirees are discovering another powerful advantage the tax benefits. Depreciation allows many real estate investors to deduct a portion of a property's value each year, potentially reducing taxable income, even while the property may be apprecia in market value. That's one of the unique characteristics of investment real estate, an asset that may generate income, provide valuable tax incentives, and potentially grow in value over time. Of course, every investment carries risk, and real estate isn't the right solution for everyone. That's why it's important to work with professionals who understand how real estate fits within a comprehensive retirement income strategy. Because retirement isn't simply about saving money,
[00:13:22] Speaker C: it's about owning assets that can continue
[00:13:24] Speaker F: to work work long after you've stopped working yourself. For the Retirement Data Radio Network powered by Amerilife, I'm Jim Tarabokia.
[00:13:32] Speaker B: Welcome back to the Retirement Planning Pipeline alongside retirement planning specialist David Pipes, here's your host, Jim Tarabokia.
[00:13:41] Speaker C: Welcome back to the Retirement Planning Pipeline. Thank you for making our show part of your weekend on WCOA News Talk 104.9 with new episodes every Sunday at 10am as we dive back into today's show, Reminder if you like the content we're providing, you can subscribe to our YouTube page YouTube.com and search Retirement Planning Pipeline for weekly video highlights and special content. Retirement planning isn't about chasing the next hot investment, it's about making informed decisions. That's why we'd like to send you a complimentary copy of our educational guide, the Good, the Bad and the Fine Print. Understanding Annuities for Retirement Confidence.
Inside you'll learn how annuities work, different types available, the potential benefits and the trade offs, and the important contract details you should understand before making any big decision. There's no cost and no obligation, just straightforward information designed to help you become a more informed retirement investor. Call us today at 5651705 or visit us on the web at retirementplanningpipeline.com to request your free copy.
[00:14:50] Speaker D: Come on down.
[00:14:55] Speaker B: As we test your financial knowledge in Right or Wrong.
[00:15:05] Speaker C: Alright, it's time to test your financial knowledge with a game called Right or Wrong. The rules are simple. I asked David a series of questions and statements and he will tell us if those questions or statements are right or wrong and then give us an explanation behind his answer. Okay David, here we go with our first statement. Right or Wrong, there's an investment option that offers protection from market Volatility, but still allows them to participate in the gains of an underlying stock market index.
[00:15:38] Speaker D: Absolutely correct, Jim. Absolutely correct. And, you know, many people don't, aren't really able to actually see this product because, you know, a lot of financial advisors and a lot of companies are kind of going away from trying to sell, you know, we're trying to, you know, give products to, to clients to keep them in the market. But I, I actually love this product right now because of the interest rates being high. You know, in the past two years, I've, I've done a lot with them and I think they've helped a lot of clients. Right. Because sometimes zero is your hero. And we say that because, you know, your portfolio could be down and, you know, the volatility could destroy your portfolio. Right. But to be able to not take that loss and to have that upside gain still is super, super important.
So I think people need to understand in retirement that this side of, of the retirement phase is, is, is super important when it comes to being able to not have risk and still have substantial gains.
You know, I, I think a lot of the times the income side comes to play too, when people are thinking to themselves, okay, well, you know, how do I make sure that my income never, never runs out? Right? Well, I think that being able to not take those losses, I don't think I know being able to not take those losses in a volatile market is one of the most important things and people don't see it. But if you actually put it on paper and put on a whiteboard and put on a graph, you know, those losses, taking income, retirement mean more than anything. So if that's your worry out there, and you know, that's something that you, you know, that you think about, which I'm sure a lot of you do, you know, well, David, how do I, how do I make sure that, that I'm not going to run out of money in retirement, you know, or if I want to spend more than I want to, why can't I? Give us a call, Give me a call. I can definitely help you out with that.
[00:17:23] Speaker C: And that's when, of course, when we've talked about it before, that retirement red zone also comes into play. Not running out of money, having money for a rainy day, things like that, of course. Okay, Statement number two, right or wrong, there is no product safer than bank CD when it comes to protecting your money.
[00:17:41] Speaker D: This is absolutely wrong, Jim.
You know, there is fixed annuities, fixed index annuities, even money market accounts. Shoot. So there's a lot of different products out there that have a lot of safety and guarantees. I think people just don't see them a lot because they're so used to one being offered by the bank. And I think a lot of people don't realize that a lot of insurance companies out there and a lot of big corporations that are even bigger than some of the banks are offering some of these products with guarantees that are way better than the actual cd. I mean, the rates are higher, your potential for, for growth is higher, and then your risk is still the same. That's zero. Right. So if you're out there and thinking to yourself, man, I need something that's safe, but I want to be able to have more growth than a cd, give me a call. You know, I can easily show you some opportunities, especially right now with the rates so high in the market. And when rates come down, we're not going to be able to see, you know, you're not going to have that cd. So to be able to lock those gains in for a longer amount of time than maybe 6, 12, 18 months, that's super important. I mean, you don't always want. Right. You're not going to turn around and say, okay, well, now I've got to do something else in 12 months. But interest rates are down. My CDs, I mean, they were at 5%. Now they're down to what, 3.754%. You're only going to see them drop if the interest rates fall. So being able to take advantage of opportunities when you can and right now is a big opportunity, Jim. And I think a lot of listeners out there need to be prepared.
[00:19:10] Speaker C: And again, give us a call. 850-565-1705. All right, final statement in this edition of Right or Wrong. David, is this right or wrong? Your Social Security benefit can increase annually due to inflation.
[00:19:28] Speaker D: This is absolutely right there, a cost of living adjustment to every Social Security. Now, is it going to be high? You know, is it going to make a difference? No, I mean, I don't think it ever does. Right. But I think that obviously it's still, it's still there, Right? So you're still going to have, you know, your Social Security is going to increase with cost of living. But to counteract that, you need to be able to take care of the income that's not going to, you know, to take care of what your Social Security is not taking care of. Right. I mean, I think all of you know, out there, Social Security will not take care of all your Expenses in retirement.
[00:20:01] Speaker C: Right.
[00:20:01] Speaker D: It's only meant to take over, I think, 35%.
So, you know, don't be naive about it. Right. Set up your income plan. Make sure your income plan's there. Make sure that it's a guaranteed income plan where you don't have to worry about that CD running due in a year or, you know, or maybe an investment not doing so well for the next couple years where you can't actually touch it. You know, there's a lot of parts to investments into income, and that's involving liquidity, interest rates. Right. Risk. Right. It involves businesses, it involves the economy.
You know, it evolves, you know, how high a stock market is. Right. So all these things are super important to kind of, you know, play into this role. Make sure that you're in, your financial advisor are covering that same topic. Do not just stick your head in the sand and leave your portfolio exactly where it was. If you do that, I'm telling you, you're going to be mad at yourself. Right. Because you should be able to take opportunities every, every time that there is one. Right. Whether it's, you know, with interest rates, whether it's with the market, whether it's with, you know, the economy the way it is. Anything that you can do to make sure that your probability is higher on making money, that should be, you know, that should be the first thing you should go after. So.
[00:21:14] Speaker C: All right, very good. We'll play more right or wrong a little bit later on in the show. But David, let's move on with this. Bonds can lose money, too. Understanding the risks inside the safe side. For generations, many investors have viewed the bonds as the safe part of their portfolio. And compared to stocks, bonds generally are less volatile. But less risky. Doesn't mean risk free. So, David, today we're going to talk about why bond values can still go down and why today's higher interest rates are actually creating new opportunities and how to think about bonds as part of an overall retirement income strategy.
[00:21:50] Speaker D: I, I, like I said, I'm not a huge fan of bonds and I will never be. But I think that, you know, you have to look at what bonds correlate with, and that's exactly on the interest rate world, right? So you're going to have market fluctuation. So when people say there's no risk for bonds, no, there's risk, Right. There's interest rate risk. So you have to look at that. Right. And I think that, you know, as we saw, white people don't know where the, you know, you don't know where interest rates are going to go. I think we just saw again that interest rates were kind of rising a little bit.
Now, the Fed didn't, didn't actually, you know, given a rate hike. But, you know, you're seeing each, you know, I'm seeing it with some of the products that I'm, that I'm helping cloud clients with. Rates are steadily holding. Right. And people thought they were going to go down. Right. But it just shows you, you don't know what the market's going to bring, what interest rates are going to bring, what the economy is going to bring. Right. What Congress, you know, what, what our, you know, our, our President. You don't know, right? You don't know the Fed chair even, you don't know what's going to happen. And it all has to be justified by something. So I think, you know, planning on something and just telling yourself something's going to be there in retirement is just a big risk that everyone's taking. But for to say that bonds don't have risk is just absolutely not right. You know, I mean, we know bonds have that risk still and you know, in selling them at a certain time frame where, you know, interest rates stay high, you know, that could, that could ruin it so.
[00:23:17] Speaker C: Well. And if you can use some help with taking control of your hard earned retirement savings, please reach out. Give us a call at 850-565-1705 or visit us at our website at retirementplanningpipeline.com so we can show you your options and make better decisions that will positively impact your future. This is the retirement planning pipeline, helping
[00:23:39] Speaker B: you take control of your financial future.
This is the retirement planning pipeline.
[00:23:52] Speaker A: Not affiliated with or endorsed by the Social Security Administration or any other government agency. Do you want a steady stream of income for retirement? Then it's time to consider annuities. I'm Matt McClure with the Retirement Radio Network powered by Amerilife. Gone are the days when most employers offered pensions with guaranteed lifetime payouts to their workers.
But what if I told you that you can build your own personal pension? It's possible with an annuity. An annuity is a financial product that provides a series of regular payments to an individual over a specified period of time, often for the rest of their life.
[00:24:26] Speaker G: There are several options for you to consider when choosing an annuity. Be confident in knowing that there is an annuity out there that can meet all of your needs.
[00:24:34] Speaker A: Ford Stokes is founder and president of Active Wealth Management and author of the book Annuity360 there are several different types of annuities and including fixed, variable and fixed indexed.
[00:24:44] Speaker G: A fixed annuity offers a specific guaranteed interest rate on their contributions to the account. A fixed indexed annuity is an accumulation based product offered by an insurance company. The growth of your fixed indexed annuity is dependent on the performance of a chosen stock market index, but your money is not actually invested in this index. This offers you great growth potential and exceptional protection for your investment.
[00:25:09] Speaker A: While each can provide tax deferred growth and a lifetime income stream, variable annuities put your principal at risk in the market.
[00:25:16] Speaker G: If you are currently investing in a variable annuity, your funds could be in serious trouble if the market experiences any downturns.
[00:25:23] Speaker A: With so many possible choices to consider, it's essential you speak to a financial advisor or professional to help you make the best decision for your future.
So are you ready to consider an annuity as part of your retirement plan? It's a key question to consider as you approach what should be your golden years with the Retirement Radio Network. Powered by Amerilife Matt I'm Matt McClure.
[00:25:44] Speaker B: Planning for retirement doesn't have to be overwhelming. Get expert insights, tools and personalized strategies to secure your Future. Visit Retirement PlanningPipeline.com today. Your retirement, your plan, your peace of mind.
[00:26:00] Speaker C: This is the retirement planning pipeline. If you've missed any part of today's program, want to catch up on previous episodes, go ahead and subscribe and listen to the show. Show in podcast form, Apple, Spotify, or whichever podcast platform you enjoy your podcasts. All right, stay with us because coming up, why understanding the trade offs is just as important as choosing the investments themselves. But first, as we do each and every week, it's time to unveil this week's Financial Wisdom Quote of the Week.
[00:26:28] Speaker B: And now for some financial wisdom, it's time for the Quote of the Week.
[00:26:35] Speaker C: And our Financial Wisdom Quote of the Week comes to US from the 16th President of the United States, Abraham Lincoln. Lincoln said, quote, and in the end, it's not the years in your life that count. It's the life in your years. Abraham Lincoln, providing us with this week's Financial Wisdom Quote of the Week and a reminder, be sure to visit us on the web@retirement planningpipeline.com Leave us your questions, we'd love to answer them on the air again. Visit us at retirementplanningpipeline.com for more. All right, moving along with the show, understanding fixed indexed annuities, protection, growth potential, and lifetime income, we've talked about building a retirement Portfolio around purpose instead of percentages. That leads to another question, though. What role, if any, should a fixed indexed annuity play in your retirement income plan? They're often misunderstood. Some people think they're market investments. Other people think they're just simply too good to be true. The reality, though, is somewhere in the middle. So, David, let's break down what a fixed indexed annuity actually is, how it works, and why some retirees use them as a one piece of a broader retirement income strategy.
[00:27:44] Speaker D: Jim, I'm glad we're bringing this up. And I'm in. I've talked about fixed index annuities on other shows, on other episodes, but I want everyone to kind of hear me out, especially, you know, on this episode, because the more and more that you look at it, the more and more that you think about it, the more and more that you look into them, you know, the more advantageous they get. And the reason why I'm saying that is because the fixed index annuity came after the fixed annuity, okay? So, I mean, you got to think about it, right? These annuities, they wanted to make something better to give retirees a more strategic way to retire. And I look at them with both sides. I basically give them two sides, right? And you're going to pick one or the other, okay? I give them one of the sides, which is growth, okay? Growth with security.
And the other side is going to be income, okay? Now, I don't look at them together, okay? And there's a reason why I do this. And if I meet you and you're thinking about buying an annuity or you want to look into fix index annuities, I will be happy to sit down with you.
But I don't look at them together because the companies aren't going to give you the best of both worlds, okay? And I'm sorry. And everyone else out there, you know this, if you think about it right in the word, the too good to be true word comes about. No company is going to give you something that they're not going to profit off of too. So they can't just say, hey, here's the income and here's the growth, and here you go, have it. All, right? What they do is they basically break it up into two sides. And if my client wants growth with security, that's on the growth side, right? And we have certain products that are built that way.
Well, if a client also needs guaranteed income, right, maybe their expenses are high and then the retirement or they want to cover some traveling or their expenses, they Have a big loss of income, right. And a lot of you out there have that right. You have a big loss of income coming in.
You stop working, let's say 50 or 60 grand worth at the Social Security. Now you got to make that up. So you have your 401k, you have your IRA, well, that income size to basically give you, right. That guaranteed income for life, kind of like a personalized pension. Right. But it has a lot of other things to it. Right. Still has some growth to it. Now, is it going to be better than the growth in the left side, the growth side? No. Right. But you're still going to have the ability to give you guaranteed income so that your money will never run out. And why that's so important is, you know, if you, if you have a client and you know they've, let's say they live till 100, okay, a lot of the times your portfolio is going to run out at a certain age, right. These income products give you the advantage for those, for that money to never run out. All right, now that's great. Okay. For some people, if some people don't need that much income, right? And they want maybe to take money off of investments or you have pensions, you have things like that, but you want to make sure that your money's safe. That's where the growth side comes in. There's a lot of good products out there with a big potential for growth every year with the market, with the market link gains without risk.
And I think that's one of the biggest things that I'm seeing out there now is the fact that a client can get upwards of, you know, 10% right. On a great market gain that year and lock those earnings in without having to what? Without having to lose a dollar if the market goes down.
And when we think about that, right, to get a 10% return, okay.
And to be able to lock that, that value in. All right. On a fixed product, right. With an index link gain is absolutely absurd. And I think it's one of the best things out there for clients that want safety.
Now, what I also want to point out is, is that if the market does go down and you don't lose, right, you're starting back when the market's down. So if that market rebounds, you still going to get your market link return.
People don't look at it from that side of you. And I think that's where a lot of, you know, retirees and a lot of financial advisors are missing the boat. Now, back in the day, four or five years Ago, when fixed index annuities were, you know, giving small amount returns, say you could only get 5 to 6%.
Right.
That's a little bit less advantageous than being in the market. Right. But now when you have this bigger upside potential because interest rates are higher, we see a more advantageous way for clients and for retirees to go in these things.
And I'm sure a lot of you out there, if you're in an older annuity, you're like, these don't work like that. Yeah. Because you're in an older annuity.
[00:32:11] Speaker C: Right.
[00:32:12] Speaker D: Rates were different back then. Annuities go with rates. Right. Annuities correlate with interest rates. So to be able now, when interest rates are higher than they were, to be able to get into something now is a bigger benefit than, than it ever was. Right. Because we didn't have these four or five years ago. Right. So if, if you, if the client's looking at these and saying, hey, man, wow, like, this is a, this is a big deal for me. Right. That's where you jump in. And the bond alternative is right there. Right. But I think that also to be able to have, you know, understanding how much to put in, understanding what to put in, why to put in. I think that people are selling the annuity so falsely. I think there's a lot of, you know, I don't think there's advisors, I don't think advisors know them well enough. But I think that we've got, you know, people out there that think that they know what they're doing that are selling the wrong products and they're just messing people up because they're selling the wrong annuities to the wrong client that don't need them and it's ruining the annuity.
[00:33:10] Speaker C: Word.
[00:33:11] Speaker D: And there's a lot of annuities out there that I wouldn't put my client in. Right. Obviously.
Right. But there are some that I would, and it depends on the client's needs.
So I think people have to open their minds up more and understand what they are, how they work. And, you know, without someone just saying, oh, well, don't go in those as a big feast. I mean, the ones that I'm talking about have no fees. Right. Not one dollar of a fee. Right. Now, how the company makes their money is if the market goes through the roof. Right. Or let's say that, you know, the company gets to invest your money how they want.
They can short products, they can, you know, bet at the margin to go down. They could do real estate. They can do all these things out there, they don't care about what you're in. Right. You're giving that investment to them kind of like a bank.
[00:33:52] Speaker C: Right.
[00:33:52] Speaker D: You're giving your money to a bank to loan back out again. Right. You're giving your money to an investment company to do what they want to and to invest it. So that's how these things work. And I think that they're a huge, huge, you know, advantage to clients and retirees right now. And if you have any questions about these things or whether you should get in one or whether your portfolio should even fit one, I mean, you need to sit down, you know, give me a call. I would love to help.
[00:34:17] Speaker C: And again, a reminder, if you have any questions, pick up the phone David mentioned. Give us a fall, give us a call, 850-565-1705 or visit us on the web at retirementplanningpipeline.com to schedule that free no obligation consultation. All right, coming up next, final segment, there's no perfect retirement investment.
Will explain on the other side. This is the Retirement planning Pipeline.
[00:34:40] Speaker F: We'll be right back.
[00:34:41] Speaker B: Your retirement questions deserve real answers. Call 850-565-1705 to schedule your free no obligation consultation today.
[00:34:57] Speaker A: Fixed annuities, including multi year guaranteed rate annuities are not designed for short term investments and may be subject to restrictions, fees and surrender charges such as as described in the annuity contract guarantees are backed by the financial strength and claims paying ability of the issuer.
[00:35:12] Speaker B: Missed part of today's show? The Retirement Planning Pipeline is available wherever you get your podcasts
[email protected] welcome back
[00:35:22] Speaker C: inside the Retirement Planning Pipeline, the show that delivers expert insights, actionable advice and real world financial strategies to help you retire confidently and comfortably. Jim Taraboki here alongside retirement planning specialist David Pipes. Thank you for making our show a part of your weekend. As always, on whichever platform of your choosing, education first, decision second. That's what retirement planning should be all about. There's a lot of information and misinformation about annuities today and that's why we put together a free educational guide called the Good, the Bad and the Fine Print. Understanding Annuities for Retirement Plan Confidence. This booklet explains the different types of annuities, how they may fit into a retirement income strategy and just as importantly, the limitations, trade offs and contract details you should know before making any decisions. We believed informed people make better financial decisions. So if you'd like get your free complimentary copy of this booklet, simply Give us a call at 850-565-1705 or visit us on the web at retirement planningpipeline.com Again, there's no cost, no obligation, and it's yours. Free for listening to the retirement planning pipeline.
[00:36:33] Speaker B: Come on down as we test your financial knowledge in right or wrong.
[00:36:43] Speaker C: All right, it's time once again to test your financial knowledge with a game called right or wrong. And again, the rules are very simple. I asked David a series of questions and simple statements, and he will tell us if my statement or question is right or wrong and then explain why. All right, David, here we go with our first statement, right or wrong. And this one's kind of easy. It is too expensive to work with a financial professional and most people are better off managing their own financial and retirement plans.
[00:37:13] Speaker D: That is absolutely wrong. You know, and I think that we all kind of know that. I think that there's a, you know, I've helped a lot of people out, you know, and, and especially for education reasons, I do a free, free consultation, you know, no fee, no charge consultation.
I think that, you know, a lot of the times you've got mutual funds out there that are, that are charging fees and you've got brokers that are charging extra fees. And this misrepresentations, you know, this really misrepresents who we are.
You know, I think that there's a lot of different strategies out there for other people. I think that it ruins, you know, what a financial advisor really is.
You know, I think that we're there for the best interest of the client in general, and that's where we should always be at.
So I think that sometimes what people think about and people hear about, it's just the kind of the wrong way to look at it. You know, when, when we have a certain, you know, duty and liability, you know, I just think that there's a lot of people out there, and of course your listeners can, can kind of bounce off this that are too gung ho on, you know, what I'm paying my advisor. Well, if the advisor does well and they're active and they're there and they're, you know, managing in the fees, you know, or let's just say, you know, not, not terrible. Let's just say, you know, it's, it's reliable.
I don't think there's a problem with this. What I do think there's a problem is when people are paying fees for something that's not there. Right. I think that a lot of times I see people Paying fees on portfolios that haven't been touched in years. And I just asked myself, like, why would you pay a fee every single year for someone who just set up your portfolio once, right? It makes no sense. There is no ongoing process. There is no looking at clients, specifics. And if you're out there and that's you, you need help, you know, I would love to help you out. Just give me a call, you know, because that's a lot of you out there, right? Your portfolio. Maybe the guy has called you or the, you know, the woman has called you once or twice a year, but the same time, they haven't fixed anything. You've been in the same dang portfolio. I'm seeing it all the time. If that's you get it fixed, you know, don't stick your head in the sand. Don't just say, oh, I like the guy, you know, this is for you. This is not for them.
[00:39:36] Speaker C: Statement number two, Once you retire, right or wrong, your investment strategy should never change again.
[00:39:42] Speaker D: This is absolutely wrong.
I believe my personal opinion is your investment strategy should change every single quarter to every single year.
And the reason is life changes, things happen, right? I mean, your health changes, your expenditures change, the economy changes. I mean, everything you care, your career, right? Your family, you know, everything is going to be different every single year. So I think the ongoing process, like I said, of being a financial advisor and being able to help someone out every year with their plan, their needs and their goals as a fiduciary is the best way to do it. I don't think that anyone should deserve anything less. And sadly, that's what's happening right now in our world is there's a lot of people out there that are paying fees for people who aren't actively helping them and doing the best thing for their portfolio. It might be a friend, it might be a family member, right? It might be someone that that person trusts, but they're not educated the right way. They're not doing the right thing for the client in their portfolio every single year or every single quarter. Maybe they're not. You don't have the time. Maybe they don't have the education, but they're not putting the right time in right to manage that client's portfolio for their best interest.
[00:40:56] Speaker C: And back to our favorite word again here, inflation. Our final statement on right or wrong. Inflation. David, right or wrong is one of the biggest threats to a successful retirement because it reduces your purchasing power over time.
[00:41:12] Speaker D: I do think it is one of the biggest threats. I do. I Don't think it's the biggest threat. I think right now the biggest threat is, you know, having the right financial advisor personally. But because, I mean, I'm coming across a lot of portfolios that are the same, Jim, and not everyone's the same. So it makes no sense. And for all of you out there that think to themselves, oh, you know, if it was all the same, then none of you would need a financial advisor. You could just look it up online and do it yourself, right?
But it's not, it's, it's different for every single person. And all you listeners know out there that you're all different compared to every financial, every retiree that you, you walk by, right? You have different likes, you have different, you know, structures, you have different families, you have different health, you have different wants, right? Some people want to travel more than others, some people want more luxurious things than the other person does.
So to treat everyone the same is just, that's, that's the big problem. And you know, when we go over that on a different episode. But going back to the inflation, inflation is a big problem. And I think that if you're not being aggressive with the amount of money that you can be aggressive with, and you know, you're covering that growth and income gap separating both sides, and you're taking care of your income and you're taking care of your growth on separate sides. Again, I'm reiterating that on separate sides, you should never have your growth and income in the same bucket. And I will always say that to the day I die, because the math, this does not work out.
You know, I, I think that a lot of times people confuse it, right? And that's where inflation can really hit is when you're, you're stunning your growth, right? And, and you're letting your money dwindle, and that's what inflation can do to you.
[00:42:49] Speaker F: All right, David.
[00:42:49] Speaker C: Well, let's move on with our final segment of today's show. Every retirement tool has trade offs, and we want to make sure that you understand them. Throughout today's program, we've talked about the traditional 60:40 portfolio, why diversification still matters, and how fixed indexed annuities can actually fit into retirement income plans. So, David, if there's one takeaway from all of this, it's really this. There's no perfect investment or no perfect retirement product. Every strategy comes with its, its advantages and disadvantages. Every strategy comes with its trade offs as well. The key is to making sure that you understand both before actually making a decision.
[00:43:24] Speaker D: Yes, 1, 100%. And I think that one of the key things is, and you said it right there, Jim, and I'm so happy that you're running the same page as me. And I think that the chemistry, first of all, that we have on the show through 40 episodes and how you, not even being a financial advisor, can see what I'm talking about and, and relay it to these people out there, is a big impact. And we appreciate you, Jim. You know, you're one of the best producers I've ever seen in the business.
And. But you're also, you know, you're, you're being logical and, you know, you know, and you bring these things up because it's a big impact on these people, right?
You know, being able to really justify someone in their portfolio depending on them, their needs and their goals, it's. It sounds so easy, but it's not being done. And we reiterated and we reiterated over and over and over again, but, you know, there, there is no perfect investment. There is no perfect portfolio. And I think that we've broken that down on this episode in prior episodes with the 6040 rule, with bonds, with inflation. Everyone is going to have a different strategy depending on their goals and needs. I mean, I can mention right now five different clients that I met this week that have completely different portfolios, but they all have different strategies, they all have different needs. They all have different, you know, income strategies. They all have different income, you know, distribution. Some have pensions, some don't. Some don't have Social Security. Some do. Right?
There's just so many things that go into a person's portfolio and a person's, you know, needs and goals. And I think that we do it right, Jim, by, by going for the client first and then surrounding that with the plan that fits their goals and needs.
And, you know, we're very successful. I'm very successful in what I do, but it's because of the clients. It's because I listen to the client's goals and needs, not my own. Right? And, you know, people can always say out there, well, there's gotta be a strategy that you like. I mean, and people are always, oh, well, David, you just keep it. No, it's not that I keep it. It's the fact that my clients are different. Every single person is different. And until you treat someone that way and solve their problems according to, to their own solutions and not someone else's solutions, it's never going to get that way. And sadly, the world around us and the financial industry around us is just Just pushing for this goal of everyone's the same person, the same retirement plan, the same function, the same investment strategy, the same putting portfolios away. Everything's the same.
[00:45:54] Speaker C: Well, how many times on this show, how many times on the show, though, have we talked about being able to take a person's retirement portfolio and customizing it for them and not just giving them a retirement portfolio that you would give to another client?
[00:46:09] Speaker D: And it's, and that's the, that's the big problem, Jim. And, but people, and here's the thing is like, it takes too much time and effort for the normal person out there to do that because they can do what they can get hired by a company and get trained to do what, to do what the company says. And that company has been doing the same thing. We're not going to talk about companies here specifically because we all know who those companies are. I've ran into them multiple times. And people, I mean, not even just the companies, but the people, right? People are out for themselves. Financial advisors are out for themselves. Their own commissions, their own goals, their own needs.
And I think that's where the financial industry gets, gets flaky, right? Because when you really sit down and make it mathematical and put it on a board for a client of their own lifestyle, every single picture is different. The depending on the client, depending on where they're at in their lives, right? How much income they have, what they really want in retirement, all that, all those things are going to change everything dramatically.
[00:47:07] Speaker C: Well, whether It's a traditional 60, 40 portfolio, an updated investment strategy, or the use of a fixed indexed annuity, there isn't a one size fits all answer. And I think that's the message that we've talked about today and have gotten across. The best retirement plans aren't built around products, they're built around people. They combine the right tools in the right amounts for the right reasons based on your goals, income needs, timeline and comfort with risk. Any questions, give us a call, 850-565-1705. We would love to meet with you. Visit us on the web as well@retirement planningpipeline.com and schedule that free no obligation consultation. And a reminder if you missed any part of today's show, don't forget to subscribe to the program and podcast form on Apple, Spotify or wherever you get your podcast. Subscribe the show on YouTube. Search Retirement Planning Pipeline on YouTube for clips and special content as well. Thanks for listening. This is the retirement planning Pipeline. Have a great week, everybody.
[00:48:05] Speaker B: Thanks for listening to this week's episode of the Retirement Planning Pipeline, the show that helps you take control of your financial future. Whether you are five to 10 years from retirement or just getting started, retirement Planning specialist David Pipes has the strategies, tools and experience to help you make the most of your nest egg. Take control of your financial future and get started today by visiting retirementplanningpipeline.com and if you missed any part of today's show or want to catch up on past episodes, be sure to subscribe to the Retirement Planning Pipeline wherever you get your podcasts.
[00:48:41] Speaker E: Foreign.
[00:48:48] Speaker B: Not affiliated with the United States Government, Amerilife agents do not offer tax, legal or investment advice. Consult with your tax advisor or attorney regarding specific situations. Opinions expressed are subject to change without notice. These opinions are not intended as investment advice, nor do they predict future performance of any product. All information provided is believed to be from reliable sources. However, we make no representation or warranty as to the accuracy of any statement. This information is intended to be educational in nature and does not provide a guarantee or specific result. All copyrights and trademarks are the property of the respective owners. Amerilife assumes no responsibility or liability for the content of this message. The information contained herein is provided on an as is basis with no guarantees of completeness, accuracy, usefulness, timeliness, or the results obtained from the use of this information.
[00:49:28] Speaker F: Charles David Pipes is an individually licensed and appointed agent. Learn more@retirement planningpipeline.com Investment advisory services offered through Brookstone Capital Management, LLC, a registered investment advisor. BCM and Amerilife are separate companies but are affiliated through common ownership insurance. Products and services are not offered through BCM but are offered and sold through individually licensed and appointed agents. Registered investment Advisors and Investment Advisor Representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interest of our clients and to make full disclosure of any conflicts of interest. Please refer to our firm brochure the ADV2A, item 4 for additional information. Any comments regarding safe and secure products and guaranteed income streams refer only to fixed insurance products. They do not refer in any way to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims paying ability of the issuing company and are not offered by Brookstone. Indexed or fixed annuities are not designed for short term investments and may be subject to caps, restrictions, fees and surrender charges as described in the annuity contract.
[00:50:40] Speaker A: Registered investment Advisors and Investment Advisor Representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interests of our clients and to make full disclosures of any company conflicts of interest, if any exist. Refer to our firm brochure the ADV2A page 4 for additional information. Any comments regarding safe and secure products and guaranteed income streams, refer only to fixed insurance products. They do not refer in any way to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims paying ability of the issuing company and are not offered by bwa. Registered investment advisors and investment advisor representatives act as fiduciaries for all of our investment management clients. We have an obligation to act in the best interests of our clients and to make full disclosures of any conflicts of interest, if any exist. Refer to our firm brochure the ADV2A page 4 for additional information. Any comments regarding safe and secure products and guaranteed income streams, refer only to fixed insurance products. They do not refer in any way to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims of paying ability of the issuing company and are not offered by pwa.
[00:51:48] Speaker H: Well, nearly one in four Americans have no emergency savings at all and would struggle to cover an unexpected expense. That's according to Bankrate. And having an emergency fund is really, really an important thing because we never know what's going to happen in life after all. Joining me now to talk more about that is Rod Griffin. He's senior Director of Consumer education and Advocacy at Experian. Rod, thanks so much for taking some time for me. I really appreciate it, sir.
[00:52:15] Speaker E: Well, thanks for having me.
[00:52:16] Speaker H: Well, no problem at all. It really is crucial to have some sort of backup, some sort of safety net. Right? I mean, but a lot of people, as we just said that that statistic there From Bank Rate, 1 in 4Americans almost have absolutely no emergency savings.
Why is it so difficult for so many of us to save money right now?
[00:52:42] Speaker E: Yeah, it's life is expensive.
And when you look at where inflation was over the last several years coupled with the holidays just being, you know, just passed and people have what I kind of call the holiday hangover with their debts, you know, trying to pay down those credit card bills and debts they may have taken on during the holidays, that puts a pinch on on the bank account and can make it hard to set aside savings when it feels like all of your money is consumed and just paying the, the day to day expenses and reducing the debts you may have. So that makes it hard and it's, it's difficult to get started because of that.
[00:53:23] Speaker H: Yeah, it really is very difficult These days, as you say there. And I mean, you know, how much should people save in an emergency fund? I know that I've. I've heard different things from different folks. A sort of, you know, general guideline is like three to six months of expenses. Some people say up to a year, some people say not quite so much. What would you say is a good kind of goal for people to set for their emergency fund?
[00:53:50] Speaker E: Yeah, and you're right. The. The rule of thumb has been for many years, three to six months of sort of your daily. Of your monthly living expenses, really. So things like your utility bills, your rent, your mortgage, food costs, those sorts of things. And that can be a really daunting number if you're trying to, you know, set a number to it and reach that goal. The problem with a goal that's large like that can be that it becomes discouraging, and so you emotionally kind of check out and give up, and that defeats the purpose. So my recommendation is start small, and you maybe don't put a large number on it. Maybe it's, I'm going to save $10 a month or $20 a month, whatever you have sort of cushion to do, and start setting that aside, and over time, it will build toward that larger amount. The key is to be able to stay motivated, to build that habit of savings so that you are just kind of naturally putting savings aside over time.
The other thing that is important to focus on is finding ways to reduce your expenses, because that gets in the way of saving.
And, you know, that means tracking your expenses, knowing where your money's going, where it's coming from. You know, I kind of think about, you know, you should be in control of your money. It shouldn't be in control of you, but that's the way it often feels.
And so if you track your expenses and know where they are, and then look at ways you can reduce those expenses, and not just the don't buy coffee once a week, which is kind of the common one, but think about just the regular bills you have every month. People think of Experian as a credit bureau, which we are, but we're much more than that today. And one of the things that we kind of think about and aspire to be is to be a person's big financial friend, meaning we want to help them take control of their finances and to reduce the costs of everyday life. So we have, for example, a service that can help you reduce your auto insurance payments each month.
We have a service that can help you identify streaming services that perhaps you've forgotten about or other subscription services and signed up for, for sporting event or a movie that you wanted to watch and then just didn't use it again. But it's still, you know, being deducted every month and it's an expense. We can help you find those and cancel them. We have a service that can help you negotiate regular monthly bills, things like utilities for many people, to reduce those monthly costs. We have a credit card marketplace that can help you find credit cards that would be at a lower interest rate or lower fees that perhaps you could transfer balances to and pay them off faster. So. So, you know, think of Experian as more than just a credit bureau. It's really about your overall financial health. And saving means having money to set aside to save. And that requires reducing your, your monthly expenses.
[00:56:58] Speaker H: Yeah, absolutely right. And I sort of always think of it as, you know, pay yourself first. Right. It's like your future. You will. Thank you. If, if you do that. And, and an emergency fund is a big part of that. And of course, one of the ways too, that I often hear about, you know, sort of makes. Makes things easier. You were just talking about the subscription services and things like that that we all sign up for and then maybe we forget about, you know, after a certain amount of time. The same thing could be true in a positive way though, if you kind of automate some savings. Right. Just have a certain amount go into a savings account or whatever it might be and just really, you know, set that up to just automatically happen. Maybe you forget about that and then before you know it, you've got enough saved up for your emergency fund.
[00:57:44] Speaker E: Right, right. It's that the old out of sight, out of mind thing. And out of sight, out of mind can be good if you're automating those deposits and they're automatically going into a savings account, you don't think about it and it just becomes habit and you work with then living within the means that you have the funds that are left over.
And. But it could also be bad if it's out of sight, out of mind, and I'm just not going to think about the bill I have to pay. Forgot about it and then I didn't pay it.
That's exactly the opposite. Now you're damaging your credit history potentially. You're reducing your access or making access to financial services more expensive. So automating payments and automating savings can be a great tool for building that, that habit that sort of becomes natural over time.
[00:58:35] Speaker H: Yeah, absolutely right. Well, just about time for us to wrap things up. But anything else that you wanted to mention, Rod, that we haven't touched on that comes to mind?
[00:58:46] Speaker E: Yeah. Well, I mean being either retirement radio network, think about saving for retirement. If you work for a company that offers a 401k for example, and they have a match, never forgo that match. Make sure you take advantage of that. If it's pre tax, you can save potentially tens of thousands of dollars over your career if you're taking that match and putting money in the 401k. And if it's pre tax, it likely won't affect your take home pay or will have very minimal effect.
So if you are not doing that, it could cost you a lot of money over 20 or 30 years.
So you know, make sure you're taking advantage of every savings opportunity you have. Not just we think of as an emergency savings, but also retirement savings as well because they play a part in that too.
[00:59:36] Speaker H: Yeah. 100. I always tell people if you're not taking the the match with your employer if it's offered, you're telling me you don't like free money and I don't believe that for a minute. So there we go.
[00:59:46] Speaker E: Enough with you on that one.
[00:59:48] Speaker H: Rod Griffin, senior director of consumer education and advocacy at Experian. Thank you so much Rod for spending some time with me. Really do appreciate it.
[00:59:58] Speaker E: Great, thank you. Glad to be here.
