Episode Transcript
[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.
[00:00:18] Speaker B: You're tuned in to the Retirement Planning pipeline, the show that helps you take control of your financial future. Whether you're five years from retirement or just getting started. We've got the strategies, tools and experience to help make the most of your nest egg. Retirement planning specialists David Pipes and Steve Zarek are two trusted voices in retirement planning with over 30 years of combined experience helping hard working Americans navigate 401k rollovers, income planning, tax strategies and everything in between.
[00:00:49] Speaker C: Thanks for joining us. I am David Pipes and if you're wondering how to get yourself on the right track for retirement or how to turn your savings into steady income, you're in the right place.
[00:00:58] Speaker D: And I'm Steve Zarek. Each week we break down the complex world of retirement in plain English, no jargon, just smart strategies to help you retire with confidence.
[00:01:07] Speaker B: Now let's dive into today's show and start paving the way to your smooth retirement. Here are your hosts, David Pipes and Steve Zarek.
[00:01:16] Speaker C: Well, this is David Pipes, professional retirement planner at Amerilife over here in Pensacola and Baldwin county region.
I got Steve Zarek with me, big partner in crime starting up with here. Steve, you want to talk about a little bit about yourself?
[00:01:34] Speaker D: Yeah, thank you, David. Just getting started here. Like to welcome everybody to the show.
And my experience, you know, in this retirement planning actually started out of college way back in 1993. So I've got over 30 years experience and I've seen a lot in this industry and I think it's really important that we do this show and get the word out there and you know, and try to let everybody know how retirement works today compared to where it was 15, 20 years ago. I'm happy to have you on the show, David. This is your show, it's called the Pipeline for a reason.
And you know your last name's Pipes. But the nice thing about you, David, is you bring a statistical, mathematical background which is a little bit unique to the industry. So we're going to have a lot of exciting things to talk about and I'll turn it back over to you.
[00:02:21] Speaker C: Thank you, Steve. Thank you. Yeah, a little bit about me myself. I actually graduated from Salisbury University with two math degrees. So like Steve said, you know, the analytical background, you know, a lot of the Math comes into play when it comes to the retirement field. I think that that's a, that's a big misconception because everyone's always focused on the financial side when, you know, a lot of the math in the background comes to play when you're actually using your retirement. And of course, you know, the whole goal of retirement is to use that, those funds down the road. So we'll definitely get into some of that, too, and some big topics as well.
But, you know, we have our amazing.
Go ahead, go ahead, Steve.
[00:03:07] Speaker D: Yeah. Let me ask you a quick, quick question, David. We're talking about retirement, so let's kind of put some numbers to that. I, I did some research earlier, and it looks like, you know, as of this year, there's 4.2 million people turning 65. And seems like when people talk retirement, they kind of tie it with aging into Medicare or turning 65.
I also looked up, you know, a couple other things. I noticed one out of every five seniors age 65 or older are still working.
So my mind, you know, getting in this business a long time ago and you being at a younger age, to me, I think, you know, if we're talking retirement, we shouldn't be working. Is that correct?
[00:03:45] Speaker C: Wow. Wow. That's actually, it's actually a really good statistic, Steve, because honestly, I didn't even know those specific numbers. So thanks for looking that up. But no, I think that, you know, I think some of it's a brainwashing mechanism. And I think when we get into the retirement cycle and we see it all the time with the clients that we have and some of the seminars, Steven, that you and I actually do together, we hear a lot of, you know, I have to still work or I don't really want to, but, you know, I don't have enough money in my nest egg or, you know, I want more. Right. And I would say probably most of the time that we actually sit down with a client, we figure out right away that they should be retired. And one of our famous sayings, you, you and I always say this. You know, when you meet us, you'll retire the day you meet us, which that's a pretty cool thing to say, especially when we have tons of clients that we meet every day and, you know, from, from week to week at our, at our Semin, we're at wash house or local or, or, you know, wherever it is in Baldwin County. You know, we make that connection with people, and it's really the confidence that we give them to retire. And no, Steve, I. I think that the one out of the five people that, that are working, I think that number should be drastically lower. I really do.
[00:05:01] Speaker D: Right, right. I agree with you, absolutely. So, you know, we're talking about, you know, if we just open it up to what I've seen. I've been working with you for a year and a half now and been fortunate enough to see your math brain come into the picture in retirement. Again, I think that's different. We, you know, been doing this 30 years, and, you know, you usually read about concepts or you read about rules, and you don't even approach it that way. You really do it on a unique one, on one basis with a customer. And, you know, and you start looking at their portfolio, looking at what their picture of retirement is, because everybody has a different retirement. And, you know, and I know you and I met a client, you know, I don't know, was it six months ago, and the wife was sitting there with the husband, and she said, we'd like to go on two cruises a year.
And, you know, we're concerned. And now those cruises, we asked her, how much do you think a cruise cost? And for her and her husband, it was 25,000 a cruise. Now we're fortunate enough. We went on a cruise last week through the company, and it was paid for, but that was nice, but I can't imagine paying 25,000 going on to a year.
How did you help that client work in their financial retirement plan to afford to be able to keep continuing going on those cruises while they're retired and not earning W2 income?
[00:06:14] Speaker C: Yeah, yeah. And that's. And, you know, that's a great question. But first I want to start off with the basics.
And you brought up a great point that I think we skip a lot on, and a lot of finance professionals really skip on this topic because the industry is so wide. Okay.
I think one of the biggest, you know, complex problems that we have is, is that we have agents in finance professionals out there that aren't really tailoring towards the client's needs. And I think that's the number one, you know, pinpoint accuracy that you need, really need to hit.
And I think that a lot of the times when, you know, someone meets with someone or someone comes into an office through another company organization, they're tailored towards what really the agent wants or what they want out or what they think the client should do instead of what the client wants. Right. And I mean, that's one of the big parts, Steve, and I have to give it out to you. Man, I mean, I've learned a lot from you in that aspect, but we really do care, you know, and. And that's something that we would have never even known that they wanted to go on those cruises and they wanted to fit that in their retirement cycle if we didn't ask them what they really wanted to do with their funds. Right. And I think the client had a, you know, a little bit over a million dollars in a tsb, and at that point, they were kind of pulling money out when they wanted to. And really, you know, being fully aggressive in the TSP that the client had was not the right cycle. And I think when you do the math and we'll talk a little bit about this and actually another episode, which I'm super excited to get into some of the spreadsheets that I do. But, you know, when you're actually taking that money out, right. And you're having some losses in the market, if the market is volatile, you see a drastic change when you want growth in your account. Right. We always talk about the losses in the. And in the positives. And that comes a big play in retirement. When you're not funding that 401k or IRA, you're actually taking money out, which actually exponentially reverses that mathematical formula. So it's totally different now for that client specifically. Right. We. We actually helped them out with some guaranteed income, figured out the exact expenses that they wanted to spend on those two cruises.
And. And we did get that done. And. And they are absolutely having a blast. I think they're actually away right now as we speak.
[00:08:37] Speaker D: They may go on three a year after meeting with you. Yeah, right. 100%.
[00:08:42] Speaker C: So.
[00:08:42] Speaker D: So let's talk about, you know, again, I've been fortunate enough to work with you, and I've seen some of your. Your math brain work. And again, it's good for me to see that perspective. And I know, you know, we have a very good client, lives in Fairhope, Alabama. You probably know who I'm talking about. But when we met him almost a year ago now, still working, you know, still looking at where. Whether he should retire or not working. He's actually a dentist up in Atlanta area and coming down here, working two weeks out of the month.
And, you know, one of the things that I was thinking about is how we help that client. But, you know, the important thing is with this show is, you know, we do different things. We do customized planning. I want to make sure, you know, give us a call. You know, you can go to retirement planningpipeline, dot com and reach us. There's, you know, you can put your information in there. You subscribe to our, our web, you know, our YouTube channel. You can call us at 251-236-4371, you know, if you want a custom plan. So the important thing is trying to get some messages out there of how we're helping people in this area.
But, you know, going back to the client that's trying to figure out if he's going to retire from the dental work, you know, he had some concerns. Part of it was income, part of it was healthcare. How did you end up helping that client, if you, if you recall what I'm talking about?
[00:09:58] Speaker C: Yeah, yeah, I recall pretty much every, every single client that I have because of those unique situations. And I think, you know, it's a blessing to have those relationships with the clients and really get to know them on a personal level and understand what they want.
And it goes back to what I said earlier, you know, really figuring out what the client's needs are and assessing those goals.
But with, you know, this was actually a really cool client. You know, we, we sat on his back patio for a long time and talked. He. They're just really, really, really cool people. Really genuine people.
You know, nice house in Fairhope and, and just really enjoys life.
Super positive guy.
Anyways, it's at, at the end of the seminar, he comes up and, you know, David, I, I just really, I really need to figure out what I can do for income when, when I retire, right? I'm selling, like, my dental practice and, you know, I don't know what I'm going to do to supplement my income.
Long story short, the guy ended up having substantial assets that no one really taught him how to use that for income. And it's sad to say that because that's everywhere right now. I mean, we're coming. I'm coming across probably two to three people per day that they don't even know how they can secure guaranteed income for their retirement to supplement that. And Steve, that goes back to what you asked me, right? Why are one in five people still working at 65 years old? Right. It's because they don't know. The financial industry is not telling them what they need to know. And there's a lot of reasons for that. And I don't want to spoil a lot of things that we'll go into down the road, but, you know, we can go into a rabbit hole about it because it's not about the institution, it's not about the companies. It's about the clients and what their best needs are. You know, one of the biggest things I think for, for that client specifically was he had two or three different, you know, advisors. And not only weren't they telling him, you know, what to do, but they were also doing the same thing for him. Right. And he was a stock trader himself, so he loved it, you know, which was kind of cool to talk to him about because I used to day trade myself. So we got along really well. I used to be a wrestler as well. So, you know, we were getting our stance in the living room having some fun with it. But he, no, he just, he was a, he was a guy that wanted help. And it, but it kind of was a little bit heartbreaking that he was such a good guy and no one really told him about what was out there, you know.
[00:12:27] Speaker D: Well, I see that a lot with, with planning for people in retirement or getting close to retirement. I think that's what the unique, you know, and we're going to get into it in this show and I'm really excited. You know, the next segment's going to talk about, you know, the, the big elephant in the room. We'll get to that in a minute. But basically, you know, the income planning is a big part. You know, when I started in this business 30 years ago, people had pensions. They're going away and they have to build their own pension. So I just want to make sure everybody on this call appreciate y' all listening, you know, reach out to us. We don't charge for our services. We'll sit down with you. We treat you like a normal person, like a family member, and we'll evaluate your situation. And there's a lot of people, we say, hey, you're in a good place. A lot of people say, hey, this part works better. Maybe try this.
But that's, you know, we're going to wrap up this segment here and appreciate everybody on the call and I can't wait to get into the next segment.
[00:13:17] Speaker B: Visit retirement planning pipeline to schedule your free, no obligation, complimentary consultation today. The retirement planning pipeline. We're return in just a moment helping you take control of your financial future. This is the retirement planning pipeline where proven strategies meet real retirement success. Your results start here. And now back to the show.
[00:13:48] Speaker C: Hi, welcome back to the retirement planning process Pipeline. David Pipes alongside with Steven Zarick, partner in crime. Both retirement planning specialists over here, helping you navigate your retirement on a weekly basis. Be sure to tune in every day. I'm sorry, every Sunday at 9am right here on WNTM and subscribe to our show podcast as well. Apple, Spotify, whatever you have your podcast on.
You can also reach us on retirement planning pipeline.com and just get on there and help us out. But we're going to continue here. We're going to go into the Annuities 101 section. Steve, bring the elephant in the room, man. Go ahead.
[00:14:29] Speaker D: Yeah, the annuity word is a big word in retirement. And, you know, more and more I see people asking us about it.
I see these people on TV and websites saying they're bad, they're good, they're ugly. So let's talk about annuities. It really, it can be a super important part of retirement if you use the right ones. So I think that's what's important is when you're talking about annuity, you know, there's so many different annuities out there, and it's what I've seen over the 30 years. I mean, it's amazing what we have today compared to what we had a couple decades ago. It's just night and day.
So really, what I want to get into and ask you, David, you know, we're talking about the main types of annuities because I think the first thing people need to understand, they're not all made the same. You know, not all vehicles are made the same, not all TVs, cameras, phones, they're all different. So if we're talking about the word annuity, let's try to identify the main ones that we're talking about in retirement. And I know there's a general one called a fixed annuity. Then you have a variable annuity. Then you have what's called a MYGA multi year guaranteed annuity. You have a spia, which is a single premium immediate annuity. This can all get very confusing, especially for somebody who just wants to retire and go on cruises and relax, you know, go to the Blue angel show, you know, whatever. So, David, what do you tell me a little bit about these different type of annuities?
[00:15:48] Speaker C: You know, and it's, it's funny you bring all of them up because you don't, you don't hear a lot of those terms a lot of the times, because all you hear is the word annuity, Steve. That's all you hear. You know, and it's funny to me because someone going to school for this stuff, you know, in my actuarial models class, doing the proofs and the formulas inside of these things, you know, they're very, very complex. And it's hard to break that down to a, to a, just a normal person, it really is, because it's like showing someone how to do a math problem that they'd never seen. Right? It's the same difference. So really, you know, it doesn't matter what type of annuity it is. You know, one might seem easier than the other one to understand.
They're all difficult to understand and have different riders in complex cases and also different strategies as well, you know, which I think every single one has a different part in retirement, which is so funny because, you know, with the just war of the annuity in general, you know, it's been around since 1802. Right. I mean, these things have been around forever. So for us.
Go ahead, go ahead. See.
[00:16:59] Speaker D: Yeah, let me throw the number to you, David. I mean, I, you know, being in this business, we track it. I mean, 2024 was a third consecutive year of record deposits and annuities. I mean, I think we hit Limra, which is a organization that does studies on life insurance and sales and marketing. And they said there was over $434 billion of new to premium deposits into annuities last year, all time record, and it was 13% higher than 2023.
So, you know, the elephant in the room, they're out there and people are inquiring about them. People are talking bad about them, good about them. What's causing all this stir and all this frenzy of putting money into annuities.
[00:17:41] Speaker C: Right, right. I'll have to correct you on one thing. That's actually in the fixed index annuity. So that's not just in annuities in general. So there's more money than just 420, $434 billion. The fixed index world is crazy right now.
And, and I think the, the, the biggest cause of, of, you know, the mass people getting into annuities is because of the retirement cycle. The wealth generation. Right?
The biggest wealth generation United States ever, we've ever had in the world. Right? The boomers. And everyone wants to talk about it and no one wants to really, you know, find out what's going on. But we talked about earlier, there's 8 million people this year, over 8 million people turning 65 years old in the United States. That is absolutely insane when you think about retirement. It really is, you know, so when it dials down to it, there's gotta be a way, right, for someone to retire without having all their money in one asset. Steve, we talk about it all the time, and I'm sure you've seen all my Seminar presentations sometimes. I like a lot of charts. I do a lot of graphs and data. I don't like a lot of words.
Right.
[00:18:50] Speaker D: I call you the spreadsheet man.
[00:18:52] Speaker C: Yeah, Yep, exactly. And the one thing I always pull up first, my first slide is the retirement pyramid.
And why I think the basics of retirement pyramid are so important because the majority of people that are retiring are doing the opposite of what the retirement pyramid actually says to do.
Right. The top of that retirement pyramid is supposed to have stocks, bonds, CDs and mutual funds.
Steve, can you take a guess how many retirees have the majority of their funds in the stock market?
[00:19:24] Speaker D: Well, most of them do. And as to where I think you're seeing a transition here and you know, my experience, like I was mentioning about the pension world, what I've seen over the, you know, go back, let's go back to what an annuity is. If we can go back there. David, what is the principle of an annuity? I mean, where does it, what is, what is the meaning of it? If you want to go back there and you'll see kind of where I'm leading up to.
[00:19:50] Speaker C: Yeah, I, I think the, it's really hard now to talk about what an annuity is because it can do so many different things and I think it's confusing. Now the definition of an annuity in the mathematical world is just a series of payments. That's it, a lump sum, a series of payments. And it's not just that nowadays. Right. We've actually, it's basically like a transformer. We transform these things and into magnificent, magnificent assets, you know, and financial vehicles that we can actually use in retirement, whether it's tax deferring options, whether it's growth without security, without risks of loss. You know, there's so many different ways that we can actually use these things for benefiting of in retirement, other than just a series of payments. And I think that's all people think about.
Right. Especially a lot of advisors out there is, oh, they're just for income. They're just for income. And that's not at all now what they're just for. Right. And Steve, I mean, I'm going to put it, put this back on you because you've been in the business for 31 years. You know, back, back when you first started, what were these things used for?
[00:21:00] Speaker D: Well, the, the funny thing is, really back when I started, there was never even an index annuity.
It was mainly an alternative to a bank CD to try to earn higher interest to capitalize in the tax Deferral. And then we had what's called a spia, where if people needed income, they would give up their money to the insurance company and then they would get a series of payments to supplement their income.
So if you look at, you know, where it's come full, you know, three decades later, it's so different now. It's, it's. I mean, you look at these index annuities came out, and there was a reason for that. And there's a popularity for the index annuity, especially in retirement, you know, because it eliminates the risk of the market, but you can still capitalize on some of the gains of the market. So that's perfect.
In the retirement world, we didn't have that years ago. You know, if you look at aspia, a lot of people were negative on them now because my mother or my grandmother had a. Gave money to an insurance company, got payments, and then when they died, there was nothing left.
So they were sour on that. They were sour on that. So if you look at it now, they've evolved so much. There's so much different. You know, I don't know what the number is in Alabama and Florida, but I know it's over 3,000 different annuities. A consumer can go out and purchase 3,000.
When we ask people that, you've seen it, we ask people how many you think you can choose from. They say 150, 10. Some people say a thousand. There's over 3,000 different annuities. So you're going to have your good, your bad, and your ugly. But the reason there's so many is because now, like you said, you can use them for so many different parts of your life, whether it's retirement, whether you're younger and you've maxed out your, you know, deferral in your 401. And you don't you want to put money into the market and have gains without, you know, worrying about taxes. But in retirement, they serve, you know, mainly a couple key purposes.
[00:22:53] Speaker C: And it's funny, it's funny you say SPIA because, you know, for me, it being two years, and I know you're laughing right now, but for two years in the business, I wouldn't sell one of those dang things ever, you know, and I wouldn't even. I would never advise anything, you know, because there's just so much better now. These companies have gotten so much better, and the products and the vehicles that we've have now are 10 times better. I ran across the client two weeks ago, and the poor lady got Put into a spia, you know, and I'm like, what the heck is this person doing?
Random advisor didn't know a lot about annuities because obviously annuities are a whole different sector, right?
More math involved in annuities than anything in the stock market.
[00:23:37] Speaker D: Possible.
[00:23:37] Speaker C: Stock market is very, very forward in finance. And I always say that in a seminar. You know, you have two different sides to this field in retirement. You have the math side and then you have your finance side, right. And you have to understand both of them to really be able to plan accordingly. And I think a lot of people are missing that math side. Right. Which you see a lot, Steve, which is I, I think why we work so great together. You know, we both have that mathematical mind to where we can sit down, go to people's expenses, understand what their planning atmosphere is. But when you can get someone the same guaranteed income, with their death benefit higher and able to grow their money without any risk, Steve, is there a loss to that?
[00:24:18] Speaker D: No.
And the neat thing, if they have the right one. And you've seen this too, in the time we've worked together, look how we simplify retirement for people. And that's after all the years in this business, that's where I get a lot of joy. We make good money, obviously, we help a lot of people, but at the end of the day, we make good relationships, good friends, and to see the simplicity we bring to them. You and I were in a house the other day, were looking at his statements, and I think it was, I think it was over 200 pages.
I mean, yeah, talk about confusion. I mean, you can't. They're going to spend the retirement reading pages instead of retiring, going on cruises. So, you know, I want to make sure everybody on this show realizes, you know, we, we'll sit down with you, we'll. We'll meet with you, we'll talk about these different things. Annuities could play a big part in retirement. They should, you know, give us a call at 251-23-64371. You can go to retirementpipeline.com enter the information. We'll get you on the schedule. If we can't get you on a schedule, we'll invite you to one of our workshops. We do them all through the community. So, you know, I just want to make sure the next segment is going to be neat because we're going to talk about really how the annuities are used in retirement. I want to bring one other thing up here, a case that we ran into and what I've seen, you know, if you're looking at what I started out years ago to now, and you saw it just the other day, we helped that, that gentleman, Orange beach had an annuity that was 13, 14 years old with a company. He was happy with it. It was paying him an income. And he had an advisor. And nobody ever told him, why don't we look at updating that annuity? And you and I both found that same company he had his money with had a better annuity today. And all we had to do was call him and move the money within the same company and we created a higher income form. It didn't, it was like the easiest thing in the world, but he would have never known that. His advisor didn't tell him. But we came in there and uncovered it. And that's just a neat feeling, you know, Steve.
[00:26:17] Speaker C: And that's something that we always talk about, man. And we're going to kind of get into that next one. We're going to be back in one moment, guys.
[00:26:24] Speaker B: 30 years of combined retirement planning experience.
Call David and Steve today at 25123, the retirement planning pipeline. We'll be right back.
[00:26:45] Speaker A: If you've got credit card debt, you are not alone. I'm Matt McClure with the Retirement Radio Network, powered by Amerilife. Consumer debt is piling up in this country. In fact, the Federal Reserve bank of New York says as of this year, Americans hold more than $1 trillion in credit card debt. That's trillion with a T. And the average interest rate, it's hovering around 20%, sometimes even higher. That means if you're only making the minimum payment each month, most of your money isn't even touching the balance. It's going straight into the lender's pocket as interest. And that debt, it adds up quietly, consistently, and often painfully. One of the smartest money moves you can make is to avoid going into debt in the first place. Robin Growley is head of Consumer Deposits at Bank of America.
[00:27:30] Speaker C: Even if you're spending with a credit.
[00:27:31] Speaker D: Card and you have a bit of.
[00:27:32] Speaker C: A higher limit, don't max that out, right? Just spend with what you've allocated for in your budget. But anytime you're spending on that credit card, you have to make sure that you're paying that monthly balance off on time and in full, because that's really the key to building your credit history.
[00:27:47] Speaker A: But maybe you're not there right now if you feel like you're drowning in a sea of credit card debt. There is hope out there. A debt management plan often offered through nonprofit credit counseling agencies can help you consolidate those payments into one monthly amount, often with lower interest rates. These aren't shady payday loans or too good to be true ads, Experian says. These are regulated, real programs built to get you back on your feet. And here's why that matters. Your credit score. Growley says it's not just a number.
[00:28:18] Speaker C: Well, a good credit score is so important to our financial journey, right?
[00:28:22] Speaker D: And all the doors kind of that.
[00:28:24] Speaker C: Good, good credit score can, can open for so things like renting an apartment or getting a favorable rate on an auto purchase. A good credit score is so important to be able to do those.
[00:28:34] Speaker A: And so if you've been avoiding your statements or feeling the stress build every time your phone lights up with a balance alert, make a plan and ask for help if you need it. Because this isn't about shame. It's about taking back control.
With the retirement radio network powered by ameraLife, I'm Matt McClure.
[00:28:52] Speaker B: Welcome back to the retirement planning pipeline. Here are your hosts, David Pipes and Steve Zarik.
[00:29:00] Speaker C: Alrighty. Welcome back to the retirement planning pipeline. And yes, that is a Pipe hyphen line for my last name, David Pipes, alongside Steve. Steve Zarek, partner in crime over here.
We're both retirement planning specialists helping you navigate your retirement on a weekly basis.
Be sure to tune in every single Sunday, 9am right here on WNTM.
And also go visit our website, retirementplanningpipeline.com that's where you can contact us. I'm sure you're gonna get a ton of good information. Again, everyone is unique. Or just give us a call at our calling center at 251-236-4371. Again, 251-236-4371. So, Steve, okay, let's get in to talk about this, man. You know, this is, this is one of my favorite parts.
Coming up in this first episode, we want to get into really how to use these things and the, the Annuities 101 episode. You know, one thing that I really admire about you, Steve, is, is when I came into the business, you know, watching you really correlate whatever product was in the client's needs to them, you know, and in, and understanding that whether it was going through, you know, which cycle they wanted or, you know, income growth, whatever it was, you know, you, you really correlated it well with the client. What do you think is the most important thing when you're meeting a client and, and discussing their retirement on how to use what Annuity to go with.
[00:30:32] Speaker D: Well, quite frankly, we're very fortunate, as you know, being associated with Amerilife. You know, we have. We're an independent agency nationwide, and we have no restriction on the company that we can choose. And I think that's important a lot. In a lot of times in this industry, I run into a client and they have this annuity. They don't understand it. They bought it from some advisor, you know, maybe a year ago, two years ago, three years ago, whatever the case may be. And the advisor didn't do the right job of identifying why the annuity should be in that retirement plan. And I think that's where you, especially alongside with me, are a little bit different. I mean, I've gone into a house. I remember, I believe it was in Foley, Alabama, a few years ago.
[00:31:13] Speaker C: And.
[00:31:13] Speaker D: And, you know, the client was like, I don't understand this annuity. I don't know how it works. And we went in there and looked at it, and I know this is going to be a little bit complicated for the show, but they had a reset period that reset the interest every five years. Okay. Which I'm not a fan of. Okay. The worst part about that was it was IRA money, and he was over the age where he had to take out his distribution. So he's taken out distribution every year, and he doesn't even get a gain, but every five years. It was not a good situation.
He had no idea the advisor was no longer around the area. And I think we run into that a lot. And I think that's where the bad name comes out. Too many people are getting in the business maybe to earn a commission, to earn some pay, and they're not doing right by the client. It always starts with the client. And that's why, you know, people at these workshops and seminars, they want us to throw out a company or a product, and we don't work that way, and you don't work that way. And I'm proud to have you alongside with me because we sit down and talk to the client, and some of them don't need annuities. And I'm not afraid to tell somebody that, you know, some do, and I'm not afraid to tell people that otherwise, you know, So I think that's where the years I've done this and I've learned it's really about the client first.
[00:32:25] Speaker C: That's awesome. Yeah. And that's. That's one thing that, you know, it's funny because when we're actually teaching some of these people or where we have lessons. You have me, you have me speak on Financial Fridays and Wealth Wednesdays to, to some of the offices in the area.
I, I get that question a lot, Steve. I do. And you, and you heard it for one of our, you know, calls the other day with the corporation and the company.
What's your pitch? You know, why are you so successful? How do you, how do you, how do you get these clients. Interest. Interested in this? It's really not, it's not about how it's, it's not about the pitch.
And it's hard to tell people that because they're like, oh, David, you've got to be lying. You know, and I stress this enough, Steve. You know, it's really just caring. It's caring about what the client needs, and you hit it on the head. Not every client's gonna need an annuity. Not every client's gonna need the same product. But you have to really dive down and care about that client's expenses, about their worries. Right. You told me a cool story the other day about a client, you know, getting laid off in her being able to retire. And, you know, that was a super cool story. You, Another agent went and helped her out and, and really created the income that she just lost and she found you. I mean, that, that's almost godly. I mean, that's, that's, that's, that, that's super touching. Right? So those kind of, you know, those kind of appointments is what makes us love what we do and love the creator.
[00:33:55] Speaker D: I'm glad you bring that up because, you know, that's the thing. It's, you know, I'm not near retirement yet with three children in college next year. So I'll be working, I'll be working along, but, you know, I'm pumping into a 401k. I'm building my retirement because, you know, that's my pension, is my 401k. And a lot of times we see people that retire that don't have an advisor or their advisors, their 401k company, and doesn't really give them advice, then they retire. Or like the lady I just met with who, who actually got laid off at the end of this month and we created income to start in August. She had no idea she was freaking out. Didn't like the stock market, worried about risk, didn't know she had enough money to live, you know, and it was the neatest. She lived in Niceville, Florida, and it was the neatest feeling, you know, yeah, we make good money. But when you're helping clients like that. That's what's going to keep you in the business. 20, 30 years, 40 years, God willing, 50 years, you know, so I can't talk anymore because the money always follows for us. It's what we can do for our clients. And I think a lot of times you see people out there and I can't stand is talking about annuities and I bring up the negatives because you hear a lot of them. You get people, they're selling a bonus annuity and they don't, you know, the advisor doesn't even understand what type of bonus it is, but the client only hears bonus.
They get all excited. You and I, you know who I'm talking about. You met this at a meeting. I got a 30% bonus. Now come on, you know, what kind of bonus is that? Let's figure out why they're giving you a bonus, you know, and it. But the advisors is going out there just pumping these bonus annuities and, you know, and that could put a bad taste in people's mouth because they didn't do the right job of meeting the client, talking to them and finding out where they could fit in their retirement solution. And that's where we excel. You know, that's what I believe. And you're great.
[00:35:36] Speaker C: And that's one thing. I'll piggyback on that. Steve, you know, we're super blessed, I mean, super blessed to be in the company that we are in and to have a Mary Life, you know, be able to sponsor us, you know, being an independent agent, you know, and being able to have all these companies that Mary Life offers us, you know, we're, I think, the largest, I'm pretty sure the largest privately held brokerage in the whole entire country. So, you know, that's, that's something that I take pride in, you know, when I meet my clients is, hey, look, every, pretty much every major carrier, whether it has to do with anything, you know, I'm, I'm able to represent. Which is super awesome when you have to be a buyer biased, you know, a biased person in, in going in that, you know, Amerilife gives us the holistic approach.
We have teams here at the office, Steve, that do everything. The Medicare. Right. The, the life insurance, the stuff that, yes, you and I might not do a lot of. But it matters to the client. That matters. I mean, it's the holistic retirement approach that we, that we push in. And annuities do have their part in retirement. A huge, huge part in retirement. Right. Whether it's anything that the income or, you know, as far as keeping your assets safe. I know, you know, you and I had a client back about a year ago that we had to help save some taxes on some CDs because their income was too high. And so there's a lot of different ways that you can come into this. But, you know, the annuity can work in so many different ways depending on what, what you have or what it's for.
And you talk about those bonuses, man, that, that is a big subject that. I mean, you've got people talking about the bonus everywhere. Everywhere here. Well, they gave me a bonus. Well, they gave me this percentage bonus or that percentage bonus.
And, you know, it makes our job pretty easy.
It's, it sounds terrible, but it really does make our job pretty easy because, you know, they don't know what the heck they're selling. They really don't.
[00:37:34] Speaker D: But.
And to add to that, we walk behind and clean up a lot of people's mistakes in this area. And it's, and I think that's why it's important. I think that's why we decided to go into this show, get the word out there as much as we can, you know, because we're just different, we're unique and, and we, we help people. You know, all status. I mean, you don't have to have $5 million to work with us. You can have a couple hundred thousand. You can have a hard thousand. You know, we're not going to say, you know, I know some advisor firms say you have to have a million or more. We're not like that. I mean, we help people with Medicare. You know, our firms know that Medicare is a big part of retirement. And I don't know too many advisor groups that are helping people with Medicare. There's, you know, and that's just unique thing that we do. And I know a couple new episodes. We're going to talk about Medicare and we're on annuities today. So, you know, we want to keep a focus of annuities, you know, looking at how they're used in retirement.
What do you think, you know, if you had to say one of the biggest things when we're talking about retirement money or 401k or IRA, how are you using annuities to help people with those type of assets?
[00:38:43] Speaker C: That's a great question. I think there's, there's two main, and there's, like I said, there's tons of ways that annuities can work. But my two, I think my two main ways have got to be income, generational income. Okay.
Guaranteed there is no fees out of that income. Okay. People want to talk about fees. Yes, maybe out of your principal if you have a rider, but your income does not go down. Whatever guaranteed income that that comes to is it. And that satisfies a lot of people, Steve. I mean, you're one of the, you're one of the. I think you've probably, in the whole Pensacola and Baldwin county region, you know, you alone have probably put over 10 to 15 million dollars just in six months in income annuity. Right. With the fixed index riders. Because, you know, a lot of people in the area are, have been plugging in this 401ks and are retired and don't have enough, of course, you know, assets and savings to be able to pay for their expenses. So tremendous job to you and, and the team, you know, really, really helping people out with that income. But secondly, which people have been doing a lot of this, a lot of help with, you know, safety.
And the reason why we can is because interest rates are a little high right now. Right. And they've been high. So these, these companies have to be competitive. So they're offering things that, that we've never really seen. I mean, and you can back me up on that because you've been in the business, of course, longer than I have. But you know, I've looked at the statistics, I looked at the facts, you know, in, in five years ago, what the, what the caps and the par rates and the spreads were. They're nowhere near where they are now. Right. I mean, I know we have, you know, one company that's literally giving 10 to 11% of an upside cap on the S and P. Best 500 companies in the whole entire country. So without any risk, Steve, which is absolutely absurd when you talk about year over year and you get to annually reset, you get to keep those gains and then wait for the next one so you don't lose those gains. Right. A lot of, a lot of people always talk about that, that volatility. Right. One year goes up, one year goes down, two years go up, one year goes down. Why not take those good years and not take the bad years? Right? And that's. Yeah, that's.
[00:40:52] Speaker D: Yeah, that's a great, great point. And that, you know, I'm excited about, you know, again, this radio show and, and really getting the word out there, talking about, you know, eliminating risk in retirement. That'll be a great segment.
But coming up next, you know, we're here to help, love to meet with you, you know, free, no obligation consultation with David or I. We've got an office in Baldwin County. We got one in Pensacola. We're opening one in Mobile County. So give us a call. 251-236-4371. We'll be back in a moment with the best part of the show. This is Retirement Planning Pipeline, helping you.
[00:41:28] Speaker B: Take control of your financial future. This is the Retirement Planning Pipeline. Pipeline missed part of today's show. The Retirement Planning Pipeline is available wherever you get your podcasts and@retirement planningpipeline.com we.
[00:41:49] Speaker C: Are back with the Retirement Planning Pipeline Show. You can visit our website over@retirement planningpipeline.com. yes, that is my last name pipe without an S line dot com. Or give us a call at 251-236-4371. We'd love to sit down with you and meet you and help you out and we'll get back with you when we can.
Steve, you want to bring up the next, the best part of the show? Like you said, that's part of the show.
[00:42:19] Speaker D: We saved it for the last part.
What I have here, David, I'm gonna go through basically some questions that I've received from clients that they wanted some answers, some scenarios that came up. So I'm just going to throw them out there, ask your opinion about these questions, kind of go back and forth on that. So the first one that came up, and it comes up quite a bit when we're talking about annuities. What is the difference between a variable annuity and a fixed annuity?
[00:42:47] Speaker C: All right, all right. Yeah, this comes up pretty much every day in this business, especially when we're at those seminars and people are thinking that they have certain kinds. Number one thing is that majority of people don't even know which one they're in, which is bad.
Really, really bad.
And that's a sad subject to talk about because you want, you want to know what you're in. You want to know where your money is. Right. And the one thing I would say that the key difference in both of these vehicles, one has downside risk with management fees, okay. And is in the market. So it has those mutual funds or securities. And one is fixed. So one is a fixed index. Okay. So the, the, on the fixed side, you have no risk for loss of your principal, okay. Unless you have a certain fee on there, which if you're looking for growth, we shouldn't have any fees at all.
But you have a cap of what you can make or our participation rate of what you can make.
Do market link gains or a fixed side so you can get a guaranteed fixed rate. Variable side is totally different. You go up and down with the market and you have those fees. Now there are certain riders that you can add onto there, but they work totally different than the fixed side does, which is super, super important.
[00:44:08] Speaker D: So in our space, in our space that we're dealing with, we're talking about retirement planning in generalities. Does a variable annuity fit the retirement pipeline with a variable annuity?
[00:44:24] Speaker C: Steve, we're going to make you say it, aren't you?
You're probably.
[00:44:28] Speaker D: Steve, let me rewind, let me rewind.
Would you recommend a fixed annuity in the retirement pipeline?
[00:44:36] Speaker C: I would recommend a fixed over a variable. In the retirement field, yes. The one time I would use an actual variable annuity is if I maxed out my 401 or something like that. And I wanted a tax deferred vehicle for accumulation when I was younger.
And that's one thing that annuities have a great reputation of, is that tax deferring side. Right? So the whole point of an annuity is for safety and for diversifying your portfolio or for income.
If you want your money in the market, just have it in the market. You don't need to pay extra fees and you already have an ira. What's the point of getting a variable annuity? Does that make sense, Steve?
[00:45:18] Speaker D: Yeah, yeah, that's a good point. You know, because a lot of times when we run into people, they're negative on annuities because of fees, and they have to understand those fees are typically on variables not fixed. Unless, like you've said, if you add a rider to a fixed, when you're adding something to it, there may be a fee, but typically a fixed annuity doesn't come with a fee. So on that note, and I'm going to come to the next one, how are you paid then on that, if you're saying there's no fees on these fixed annuities, you're obviously making money.
You know, does the money come out of my investment if I put it with you?
[00:45:48] Speaker C: I get, I get this question at every seminar. One of the first hands get raised, six, probably six slides through because they're all hooked in. They're all like, man, you know, this is crazy that I get a free meeting with him. And you know, they're super excited and they say, well, how do you make money, David, I haven't had a client ask, hey, can I write you a check?
Right?
And I had to say, no, of course. But no, we get paid through whatever company we go with. So everybody gets paid for whatever they do. And if you're successful and you're good at what you do. Yes. You make a little more than other people. Right.
Which I take pride in. I take pride in having the knowledge and really understanding the client's needs so that they can get what's best for them.
And the commission rate comes from that with whatever company.
Right. So I have no bias. Right. I get paid almost the same percentage per company.
[00:46:43] Speaker D: So. So, so let's ask another question leading into the variable. And you said that really they should be driven from younger clients trying to defer taxes while they're growing. So if, you know. And this was one of my questions, a client asked me, he said, I have an annuity. I think it's seven or eight years old.
Should I switch it to a new one or should I just keep it where it is?
[00:47:05] Speaker C: They were.
[00:47:06] Speaker D: They were pretty happy with it, but they just said, hey, I don't know if I really need to do anything with it. Well, how would you respond to that?
[00:47:13] Speaker C: Well, I would already say, yes, you need to move it. And it's because I have. Again, I. I've dealt with a ton of these, so.
And the reason why I'm so confident in that is because rates were a lot different seven years ago than they are now. Okay. Not only were rates different, all right. And rates are higher now, but what else? Companies have competition. Okay. Do you think that the companies seven years ago were the best companies now?
No, there's.
[00:47:42] Speaker D: There's.
[00:47:42] Speaker C: There's no way. I mean, there might be one or two of them that are still at the top. Right. I know. You know, there's a few of them that are a plus plus rated that have always been amazing, but with those ratings sometimes mean they can get away with a little bit of, you know, lesser caps or things like that. And there's more upcoming companies trying to get business and give better incentives. Right. Whether it's a premium bonus or whether they're giving a higher cap rate or whether they're giving it, you know, a shorter term period, you know, so. Or different index for all I know. So there's. There's different types of ways that you can really look and compare the ones from. From the past to. To now. Right. To the present. And I think one of the biggest things is that we always kind of talk about is doing a T chart. It's simple as a T chart, Steve. As simple as T chart. And you've watched me many Times I go up to that whiteboard with almost every client I have, whether it's talking about Social Security, which we'll have a whole nother episode.
And that's another reason why all of you guys should definitely tune in to a lot of fun things to talk about down the road. And I'm super excited that Steve and I get to be able to talk to everyone in the area again. You know, go to our website, shoot us. You know, shoot us an email, and it shoot. Contact us or call us at 251-236-4371, and we'll definitely sit down with you and help you out with that. And if you have an old annuity like Steve just said, you definitely want to sit down with us. Steve, that's a great question.
And, you know, that's. That's actually most of my business in the past six months have just been from referrals from clients saying, hey, this person needs to get out of this one. You know, a lot of the time, Steve, I. I will say, seven years into it, you know, from back then, if it's a variable annuity, they're not really happy with it, really. And they're. And if they are, they should see what's out there. And then they probably wouldn't be.
Now, if it's a fixed index and they have a great rider on it, or if it's an income product or, you know, with a certain company with a rollup rate, you know, we'd have to do the math, which is what I love. So sitting down and looking side by side, seeing if I can help them, you know, of course, have to go through suitability, so have to show them that it's in the best interest for the client. Right. I mean, that's the coolest part, is showing them side by side. Hey, look, here's what you have, and here's what. What you can't have. Steve, I've seen you've done that plenty of times, too, so.
[00:50:13] Speaker D: Right, right. And I think that's your specialty. I'm happy to have you working aside me. You know, you're the. I call you the spreadsheet guy.
[00:50:21] Speaker C: What.
[00:50:21] Speaker D: What did the client call you? Young Sheldon or Lillian?
Lillian. Alabama, you're a young Sheldon.
So, you know, and I want to. I want to bring that up a little bit because there was something you. You know, the client was an engineer, retired engineer, younger spouse, moved down here. I. I can't remember. A few years ago.
And he was big on numbers. He was big on spreadsheets, and And I said, man, I've got the perfect partner here. This is a spreadsheet guy. You know, I call him Young. You know, she actually coined you Young Sheldon. I had to, you know, at my age, I had to go look up what that meant.
[00:50:53] Speaker C: But.
[00:50:56] Speaker D: Yeah, the neat thing was seeing you in action where he actually, you know, after we got to know him and he was comfortable with us, he said, well, hold on a second. Went in the back of his room, printed up a spreadsheet because he was pulling money out of his accounts and he was worried about it running out. And he started showing you the spreadsheet.
And within 10 minutes, five minutes, you read through it. Read through it. Compliment him on a spreadsheet. It looked good. But you noticed he had one calculation that was off, and that was the important part. He was doing a calculation wrong. He thought his money was going to last longer. When you got in there and showed him, I mean, it was amazing. He was like, yeah, I think I need to go back and look at that. And now you guys are spreading. You're sharing spreadsheets together.
You move some of his money. We got his money secured and got him some guaranteed income, and we. We honestly saved his retirement. I mean, if you think about it, he would have run out of money. You know, he would have run out of money in retirement. And the wife is like, 8, 9, 10 years younger than him.
[00:51:52] Speaker C: Yeah, yeah, that.
That one was probably one of the coolest I've had this year, because when you make an impact like that, and I used impact, that. That. That word. Steve, you know me very well. That word is. Is a big word for me.
You know, whether it's creating impact on colleagues and training people or teaching them. I was a calculus 3 tutor for. For a long time in college, too.
Being able to help people get through certain things. And that's what all retirement's about. And this gentleman, you know, wonderful, wonderful family, lived on the water.
You know, we. I think I walked in and we kind of went over a spreadsheet a little bit, but he had a missing section where he was actually calculating his returns.
What he wasn't doing right was obviously taking each segment and making sure that his compounded rate wasn't compared to his actual rate, which, again, it's easy to plug in the wrong formula on Excel, because if you plug in one formula and it comes down to the column, everything already tracks itself. So you think the numbers are there, but instead you'd have to do the same formula for each cell.
[00:53:01] Speaker D: So you're. You're kind of young. Sheldon, you're talking over my head. So let's bring it back, bring it back to the annuity 101 world. How did you help him with annuity? Because I know that's you. You positioned some annuities in the house.
Can you explain a little bit how you use the annuity to help?
[00:53:15] Speaker C: Yeah, so I was just getting to that, Steve. I was just getting that. So about, about five after he told me all these things, all these, you know, formulas that he had because he was really proud about it, which, you know, it was, it was really cool to see that he spent about, he started about, about $650,000 and he spent around $400,000 in about three and a half years. Okay, meaning you know, his wife I think was like 58 or 59, she was retired. They had, you know, paid off house, but they had quite a big expenses and they love the travel. Right. So obviously they're going to spend around 100k. You right. She hadn't started Social Security yet. He had 30, 30 something thousand dollars Social Security, but he had to spend about 100 grand to go travel. Of course, cost of living is a little higher now, right. With everything going on and especially when you want to travel and you want to do things, you want to live a more luxurious life.
So as I went down with it, he had a spreadsheet that showed me that he would at least last until she turned 65.
And my math behind. I'm like, man, you're gotta be crazy there, there's no way.
So I'm like, you just lost 60% of your portfolio, right? And now you want to tell me that, that you 40% left without any gains on your original principal is gonna stay for another six years and you already spent it in four.
There's absolutely no way.
So he said, you know, I need to learn a little bit more about that. So we ended up sitting down and I ended up showing him and we ended up putting her into a guaranteed rolled up where she's going to be, they're going to be well off and he's going to be able to use his and hers and actually get more guaranteed income than he ever thought that he was going to be able to have down the road.
[00:55:04] Speaker D: So the, the neatest thing and we're, you know, we're getting to the end of the show here.
The neatest thing. You know, David and I were fortunate enough to be on a company trip. It was a cruise in Alaska. It was outstanding. But we saw a lot of retirees on the ship. And you know, we relate to them because that's our business. And the neatest thing was Dave and I were walking down the stairs, getting ready to go to the gangway to get off the boat. He's like, man, I can't wait to get back to work. And that's super unique for a younger man in this business. And there was a senior that overheard us because, man, I wonder what business you guys are in. You know, it's just a neat feeling.
But I want to make sure that everybody on the show here Be sure to subscribe to our podcast form. You can fill it out through Apple, Spotify.
You know, wherever you get your podcast, give us a call at 251-236-4371.
Let's get started on your retirement planning today.
Get on the calendar. We can sit down with you. We can help you. And I'm sure if we can't help you, we may have a family member or friend that we can help. Thanks for listening. We'll talk to you next week.
[00:56:05] Speaker B: Thanks for listening to this week's episode of the Retired Retirement Planning Pipeline, the show that helps you take control of your financial future. Whether you're five years from retirement or just getting started, retirement planning specialists David Pipes and Steve Zarek have 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 the show today or want to catch up on past episodes, be sure to subscribe to the Retirement Planning Pipeline wherever you get your podcasts.
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 by 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, use, usefulness, timeliness, or the results obtained from the use of this information. Charles David Pipes and Steven Zarek are individually licensed and appointed agents. Learn more@retirement planningpipeline.com fixed annuities, including multi.
[00:57:36] Speaker A: Year guaranteed rate annuities are not designed for short term investments and may be subject to restrictions fees and surrender charges as described in the annuity contract. Guarantees are backed by the financial strength and claims paying ability of the issuer. So you know where you are now and where you want to be in retirement. So how do you plan to get there? I'm Matt McClure with the Retirement Radio Network powered by Amerilife.
[00:57:59] Speaker D: Do you have any other questions for me? Counselor?
[00:58:01] Speaker A: There are a lot of questions to ask yourself when you start your retirement plan. Questions like when should I retire? How much money will I need? When should I claim Social Security? What about health care costs and taxes in retirement? This complicated puzzle means you're probably going to need some help coming up with a smart retirement plan.
[00:58:19] Speaker C: If you want to retire successfully, you really need to plan early.
You know, inspect what you expect and get prepared.
Putting a plan in place now while you're still working is a great idea.
[00:58:30] Speaker A: Ford Stokes is founder and president of Active Wealth Management. Once you find a financial professional you want to work with, they can help you answer all the questions you may have.
[00:58:38] Speaker C: Back to what Warren Buffett said, if you don't find a way to make money while you sleep, you're going to work until you die.
So we need to do everything we can to to figure out a way to make money while we're sleeping. We talk about this human capital versus actual capital. When you're young, you have a lot of human capital. You've got a lot of room left, a lot of capital left in your career, right?
But at the same time, a lot of people that are older, let's say you're 65, 70 years old, you don't have a lot of human capital left, but you should have a lot of capital that is making money while you sleep.
And if you don't, then you didn't make the right decisions.
[00:59:15] Speaker A: There are also some retirement costs you may not have considered yet. Long term care, for example. Did you know it's not covered by Medicare? What about home renovations? If you decide to stay in your home instead of moving into a facility, your home might need some updates to ensure you're safe and comfortable. And those are just the tip of the iceberg. So do you have a fiduciary financial advisor or professional to help you wade through the complicated retirement planning process?
That is a key question to consider if you want to make the most of your hard earned money. With the Retirement Radio Network powered by AmericanLife. I'm Matt McClure.
