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. And I'm Steve Zarek.
[00:00:59] Speaker B: Each week we break down the complex world of retirement in plain English, no
[00:01:03] Speaker C: 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 Phipes and Steve Zarek.
[00:01:16] Speaker D: 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 Taria alongside retirement planning specialist David Pipes and David will be along in just a moment. CDs, retirement accounts and the real truth about your money. Coming up on today's show, we're centered around making this a 60 minute financial wakeup call for 2026. We'll discuss CDs and interest rates dropping and how that could affect you, why you shouldn't rely on CDs and interest rates and we'll touch on real rate of return versus interest rate of return. 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 free offering just for listening to our 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.
CDs under pressure, interest rates are dropping, current numbers fed signals and what it means for You. Let's kick off this week's show talking about this. According to multiple media outlets, the Federal Reserve is holding the federal funds rate steady at 3.5 to 3.75%. But economists widely expect one or two cuts later this year, possibly starting in June. So that means the high yield CDs you locked in during 2024 and 2025 are quietly disappearing. Top national CD rates have already slid to around 4.0 to 4.3% APY for the best short term offers. And many analysts say that more drops could be coming. Certificates of deposit used to be the boring but reliable hero, if you will, of every conservative portfolio. You park your money, lock in a rate and sleep easy. But right now that's unfortunately quickly changing. So, David, with the Fed holding steady at 3.5 to 3.75% and no cuts on the immediate horizon, top high yield CDs are now topping out at 4.3% APY for short terms, down from the 5% plus that we just saw a couple of years ago. So David, should savers be urgent to lock in these rates right now or is that window already closing faster than most people realize?
[00:03:39] Speaker C: I think the window is actually already closed. And it's funny, it's funny because you talk about, you talk about CDs. I, I've never been a big fan of CDs. Okay? And maybe back in the day when they were like 11 to 16% back. The problem with this is when CD rates go up, right? Or they are up, other, other alternatives are up too. So that I'm, that's what makes me a little bit, you know, a little bit, I would say, uneasy about the CD returns, not just about the alternatives, but because of the, the taxation when of course they come due, you know, it doesn't really create a good rate of return for you. So if you have a CD and you're in that 22% bracket and you're thinking you're getting 4, you're really only averaging 3 point, you know, 3.1, 3.2. So it's not a great way to have money and make something off of it.
I think there's a lot of short term products out there that, that we can really utilize, especially with liquidity. And for you guys out there that do have CDs coming due, and I've got tons of clients that I met, you know, last year and this year that can't wait to meet me, you know, and in a month or two I've got a lot of them coming up In April for the end of the first quarter for this year. That's something that you really take a look at and maximize earning potential. Because there are a lot of alternatives right now that actually. For longer, right? For longer than just that, six, nine, you know, 12 month interior that have liquidity options. It's the one thing that I can tell you out there, if you have CDs and they're coming due, don't roll them over. And if you're out there and you think that when you, when you roll over your CD to another cd, if you don't pay taxes, you're wrong, okay? You, there's a, there's a 1099R form that every single company, every single bank sends okay. To you and you have to report to the IRS no matter what. All right? So when people say, well, I just rolled it over into the next cd, no, it doesn't work like that, okay? You still get taxed on that money. Speaking about that, okay, why I think that, why I think the 5%, you know, line is so important is because risk free assets, when you're looking at them and you can generate, especially in retirement, 5 to 7% a year compounded is a good return. You know, you talk about the 4% rule, you talk about people that, you know, want to use, you know, if they have a million bucks, 5%, 50 grand, okay? So if you can produce 50 to 70 grand a year, that's a lot of those income gaps out there that you're looking at, okay? But when you get below that 5% mark, okay, things start to be a little tricky because then you can't use some of that money and really attack and attack that growth and compound that growth. But I think the main line on that, Jim, is anybody out there, if you have Cs coming due or if you're looking at CDs, or you think, hey, look, I've got some coming due in three months, four months, five months, I've helped a lot of people get out of them. The reason why I say that is because, right, Your, your penalty is lower if you're earlier in that CD contract. So, okay, please give me a call, okay? And that's, that's where we really specialize. I really specialize on helping people maximize and compound growth. That number is 850-565-1705. Again, that's 850-565-1705. You can take a look at those CDs and make sure that, you know, you're either getting the return that you need and what's better out there and compare them side by side. Okay. There's nothing better than comparing one product to another and look at the rates of return and what they could become. Okay.
[00:07:06] Speaker D: Well, I, and I think, too, when you talk about CDs and the kind of growth that you could have gotten from them in 2024 and 2025, and now all of a sudden 2026 is here, and CDs aren't as valuable as they may have been a couple of years ago. We've talked about on this show before, before, about the volatility in the stock market as well. The stock market used to be pretty steady, wasn't as volatile as it's been, say, in the last decade or so. So I'm wondering now, and I'm questioning to you if CDs are sort of going the way of the stock market where they're just becoming too volatile, because a couple of years in that period, you could be making money off CDs, and as I mentioned, you could sleep well. But now, here in 2026, if you're thinking about CDs, it relates to your retirement portfolio, you're going to be up all night.
[00:07:52] Speaker C: I think a lot of political factors tie into this.
Interest rates are something that has been a big political discussion for a very, very long time, and interest rates have, have a very, very po. Really positive or negative effect on ev. Everything else. Okay. In, in really the economy in general.
I think that, you know, know, first of all, if you're out there and you're thinking to yourself, you know, rates going to go down, I got to hop in. If rates are going to really get cut that fast, you're not going to want to hop in there. You're going to want to hop in something else. When rates get cut that fast. And, and, and we see that, you know, obviously the economic boom is certainly more, more likely or more probable. I think that we've got a lot of, of people that think that.
How do I say this, Jim? We've got a lot of people that think that 4%'s good.
[00:08:45] Speaker D: Right?
[00:08:45] Speaker C: Okay. In reality, it's just not. Why do they.
[00:08:48] Speaker D: Why, why is it not good? Why do people think it is good?
[00:08:51] Speaker C: If you've got, let's say you're making 4%. If you just increase that rate to 5%, okay.
Your growth increases by 25%.
[00:09:01] Speaker D: Wow.
[00:09:01] Speaker C: Hear that again. When people are out there and you're always looking at, oh, it's 4%, it's only, it's only 4. It's 4. It's not 5. It's just 1%. No, right. It's the growth. Okay, so if I have a million dollars and I make 4%, I make $40,000. If I have a 5%, I make 50. That's $10,000 more a year. It's a lot of money. Yeah, it's a lot of money. So for you guys out there that are thinking to yourselves, hey, oh man, you know, 4% is not that bad. I don't think it's hard to average 7 to 10% in the market. I really don't. And I think a lot of my clients, you know, we really do well on separating income and growth and we're able to use, utilize that growth and utilize the compounding mechanisms to really increase, you know, potential growth and, and, and maximize on sectors and on places that we're at and, and looking at certain, certain areas to really maximize growth in. That's the whole point of an advisor, right, Is to be able to maximize no matter where you are in the market. Right. So if you're out there, you're thinking to yourself, hey, CDs are really the only option for me or money markets are. I mean, there's so many. And, and I, I, I'll tell you to be easy as frank and, and it's, it's not, it's not a hard discussion to have with you when you sit down.
There's an really, really easy way to get above 4. Okay? Now you get to the 7% ratio. You got to be a good advisor, right? You, and especially in retirement. But when it, when it becomes a growth and you can separate income and growth. And that's just me saying this because obviously I take my clients, you know, I take my clients funds into, into, you know, consideration of, of making sure that we can maximize on growth and maximize on really the areas that we can, that we can enter. Right, because you don't want to, you don't want to miss something, right? There's a lot every single quarter in the, in the economical world, whether it's interest rates or whether it's in the stock market, you can, you can maximize and you, your, your potential on certain sectors. Yeah, I think it's really important to be able to take those opportunities that not a lot of advisors take because they've got, they're always as worried about just getting a straight ETF or they're always as worried about getting straight mutual funds. And they're like, and they're just riding it right where they're not maximizing the potential earnings on each client. And that's what I love, doing the best. And for anyone out there, you know, if, if I give you a reason of why you should meet me, it's number one is no, I'm active. It's being active on your portfolios is more important than anything.
[00:11:30] Speaker D: Yeah.
[00:11:30] Speaker C: I cannot stress enough how many, probably 95 to 99% of people, okay. That are retirees have the same portfolio they've had in last year.
[00:11:42] Speaker D: Right.
[00:11:42] Speaker C: It's like, what are you doing? The whole point of the market is to monopolize and capitalize on certain opportunities. If you're not capitalizing on opportunities every single quarter, every month, you're never going to be able to compound your growth. You're going to stick with the same ETF that you had back in 2010. Right? That's right. So I mean, that's something that I think super important. But to go back to the CD part, you know they're going to get cut again. Yes. And it's, and it's going to happen multiple times. But I think that one of the most important things possible for anybody out there listening is you really want to make sure that you can maximize or guarantee yourself more. I've got guaranteed products right now making you 5.5 tax deferred. So it's like, okay, you want to go into CDs, we can, we can, you know, raise that by, you know, 25%. But I still think being able to, being able to maximize and look at the opportunities out there for, for each client on growth is way better. And the liquidity part CDs, the only reason you should really be in CDs is for liquidity. That's it.
[00:12:46] Speaker D: Sure.
[00:12:46] Speaker C: Right. Where I think that if you're, if you're a good advisor, and this is where I think that a lot of people, a lot of my clients will, will see this. And hopefully if you're out there and you come meet me, you'll see it too.
There are, there are short term points when you can really maximize your growth on something. Okay. And to be able to do that and then get out is super, super, super important.
You know, there's, there's a lot of securities out there. There's a lot of, you know, different products out there that you can actually, you know, go into and still have that liquidity factor. Right. I mean, I just helped a client with a couple million dollars, you know, and they've got, I think 4 or 500k liquid and they're still maximizing on their growth, Right. They've got some guaranteed 5, 6% but they've also got, you know, some, some 7 to 10% growth funds. And yes, they have a little bit of risk with it. But the bottom line is CDs are, I just don't believe right now they're just not the way to go. And you don't to want, want them because they don't want to be stuck in that point when the market goes down, right. Or let's just say that market goes up and you're in a cd, then you get out of the CD and the rates are down.
[00:13:55] Speaker D: Right.
[00:13:56] Speaker C: So now you're screwed. Now the CDs are down and the market's up. Now then now you just screwed yourself. Right. So you know, you want to maximize, you want to be able to, to come in and have an actual plan. Please do. I would love to sit down with you, at least compare chart to chart, show some growth. If you want guarantees, we have guarantees obviously that are higher than CDs. But you know, look at the alternatives, really understand what you got going on and really make sure that you're getting the best bang for your buck because guarantees are good but always looking at statistics and the numbers of it and making sure that you can maximize your growth. So again, give us a call, 850-565-1705. Again, that number is 850-565-1705.
[00:14:40] Speaker D: Yeah. And as we wind down this segment, here's the big takeaway. Rates are falling and the CD party that started after the pandemic is also winding down. So if you have any further questions or again you want to meet, give David a call today. Again, that phone number 850-565-1705 or visit retirementplanningpipeline.com and schedule that free no obligation consultation with David Pipes today allow us to inflation proof your portfolio to ensure a successful retirement future. Coming up later in the show, a huge part of the financial world people miss and it's costing them money. But up next, why you shouldn't rely on CDs. This is the Retirement Planning Pipeline. We'll be right back.
[00:15:20] Speaker B: Visit Retirement Planning Pipeline to schedule your free no obligation complimentary consultation today. The Retirement Planning Pipeline line will return in just a moment.
Welcome back to the Retirement Planning Pipeline. Here are your hosts, David Pipes and Steve Zarek.
[00:15:53] Speaker D: Welcome back to the Retirement Planning Pipeline. Thank you for making our show a of part part of your Saturday on WCOA News Talk 104.9 with new episodes every Saturday morning at 8am and as we dive back into today's show, a friendly reminder. If you like the content we're providing, subscribe to that YouTube page, YouTube.com and search retirement Planning Pipeline for weekly video highlights from previous episodes from this episode as well. And of course, special content again, YouTube.com and search retiring Planning Pipeline. So, David, we talked last segment about CD rates. Let's move on to why you shouldn't rely on CDs. The hidden risks of chasing interest rates alone. CDs are safe. FDIC and NCUA insured up to $250,000. No market risk. But safety comes with trade offs that become dangerous when rates fall. As we talked about in the last segment, CDs, they feel safe and predictable. FDIC insured, no market swings. But with the rates trending lower and inflation still at 2.4%, leaning too heavily on them could quietly erode your purchasing power over time. So David, walk us through the biggest hidden traps. Liquidity, liquidity penalties, tax drag, reinvestment risk, and why a CD only strategy might be one of the riskiest moves for your long term wealth and building that wealth in the, in this, in this given environment.
[00:17:11] Speaker C: Yeah, I think first of all, CDs in the long term, I mean if you're out there and you think that then you got to be, you know, you got to be in a different sector or you know, maybe it's not understanding CDs are not meant for long term. Okay. They're meant for short term.
Uh, and, and they have their place, okay. And you're talking about maybe buying a car in three months or six months and you have that money put away. That's, that's totally different, you know, and that's going to come about. But what I'm seeing a lot of now is people that are having CDs that aren't planning to use their money. And again, I'm going to push this into the day that I die. If you have a cd, okay, and you're going to use it and you're not, you don't know when you're going to use the money, right? You don't plan on knowing when to use it for at least a year or so. And why I say that is because it, you're giving yourself so much risk on what you can make everywhere else, but not even other guarantees at a more rate. You have inflation, okay? Inflation alone, like, like Steve said, I mean like, like Jim said was 2.4%. Okay? So if you make 4% and yeah, you Got hit. You got hit by inflation. Your real rate of return is only 1.6. Okay, that's absolutely terrible. Right? So I like to always go the separate. The separate route. I like to say this. Well, add that. Add that 2.4 to your 4% that you would have made on a CD. That should be what you're literally aiming for, okay? So that's 6.4 to 7% mark would be what you're aiming to have if you want that real rate of return of 4 of the actual 4%.
So when we look at those things too, I think a lot of people out there are thinking themselves, well, I'm okay, you know, and blah, blah. But the biggest part about it that I think everyone kind of struggles on is, okay, well, what do I do alternatively?
What, David, what other. What else is there that gives me the liquid strategy to do this? The idea is being able to keep enough money liquid to what you want, okay? And to be able to utilize, you know, and understand. And that's what my job is, is to take advantages of the opportunities.
[00:19:11] Speaker D: Right?
[00:19:11] Speaker C: Okay. So being in the market, having 100k in the money market, to give an example, making, let's say, 2.5, but then going into one, you know, one sector, let's just say you go into one sector for six months or a full year for, and you have a 10 return, okay?
Those advantages and those opportunities are what is presented every single year in the market on different sides. Whether it's a more. Whether it's a drop and you could have a rate of return going up, or whether it's, you know, some momentum going forward with another company or the research is done, you know, and that's where I think many people miss out on. You have one year of growth and you sell and you're in that IRA, or you're in that 401k or you're in that, you know, look at you right now. I mean, you get one year of 20% growth. That's five. Five years of a CD growth. I mean, you don't have to get a CD for five years, and then you are still already one, you know. So I think if you're out there and you're doing CDs, think about that. You only need one good year in the market out of five out of five years to beat that CD rate.
One good year. That's it. Yeah. So if. If you're out there and you're thinking to yourself, oh, well, see, you know, listen, guarantees are great.
I always tell my clients, look, you Know, the first thing I talk about is how much do you want non risk, how much do you want to make sure that that's there? And the money that you want to touch, obviously you want to use for retirement, you want to use for things coming up, traveling, you know, know, expenses, things like that. Yeah, though that, that's super important. But that money needs to be put aside. Right. And that money needs to put something in. The alternatives that we have from CDs are 10 times better than it. I'm averaging clients right now without, you know, without having to, to worry about risk. Right. So these products are out there. If you have CDs and you're looking for more than just that 4% or you're worried about really, you know, what, what you're going to do in a month or two, that's when you need to come meet me. And again, that number is 850-565-1705. That's 850-565-1705.
[00:21:14] Speaker D: You know, the thing that sticks out the most, and I touched on it before, in the beginning of this segment before you were speaking there about rates. I'm going to read it again. Who rates trending lower and inflation still at 2.4% leaning too heavily on CDs could quietly erode your purchasing power over time.
And it sounds like to me that CDs are almost dictated and what you can get out of them by what inflation might be. And we don't know what inflation will be in two years, five years, 10 years down the line.
So there's sort of that rocky, very soft foundation that with CDs it might not be the best thing for your retirement portfolio if you're looking ahead 10 to 20 years down the line.
[00:22:01] Speaker C: No, and I mean there's, you know, everyone always talks about fixed income. I'm just not a big fan. I, I don't mathematically, with my degrees and with the numbers every day that I do, they don't make any sense. I mean you can, you can historically set up any data you want. You can even take the dead decade. You know, I mean, you know, if you're able to maximize off the growth of, you know, some type of index that actually has a substantial growth but minimalize the risk on those years that it goes down, it beats the CDs every single time. So if you're out there thinking to yourself, I don't know what else is out there, that's when you meet me, that's when you need to come in and sit down and we can go over those alternatives with you and really get you to understand that you had other, you know, other advantages or other opportunities. Now, granted, the plan comes in, so don't come in and go, here's what I have. I want to know what you're using, what you're using it for, what the money's there for. I want to get that relationship build and understand really what you, you know, maybe your spouse, what you guys have plans for in the future, where you want to use it. If you do use it, what would it be for? Okay, what's the, what's the, what's the goal of the money? Right, right. That's one of the first questions that I ask every single meeting that I have with the client. I asked it this morning and the client kind of looked at me with a stare. It's like, well, I didn't think about that. Well, you need to think about that. You can't just have money sitting in an account in a CD and not have a goal.
Okay? And if there's one thing, and I should probably do an episode just on goals for money. I mean, there's so many people out there, they're like, oh, well, I don't have a goal for. It's just there. No, that's the, if you're, if you're thinking about having money at all, there's got to be a goal set up or something put in there or else you're never going to have somewhere to look forward to. Think about the same thing with, with a job, okay? If you have a career and you're trying to make a certain pay scale and you don't have a goal for a pay scale, you're never going to create any, any, anything better, right? So if you have a goal for your money, at least you're going to strive to make that percentage or strive to make it a, a better growth, you know, and that's what I do with every client. And I sit down and say, look, if you had one thing that you wanted to use this money on, what would it be? Right.
Oh, well, give it to my kids. Okay, well, now we're changing from what, short term to long term horizon. So C really is not. What if I need 40, 30 grand? We can still have liquidity to, to that. To that money. But I in, in one thing that I want to pull up big time, and I think we're going to go over a little bit later and is CDs and IRAs and 401ks, and I think that that's that's a big topic coming up that if you're on here listening now, you're going to want to listen to the four segment because I've seen it so many times and that's just not the way that these, these accounts work, guys. I mean that's 401ks and IRAs give you something that you, that, that no one else has and the, the ability to, to really sell securities and do what you want without paying taxes until you take the money out.
So you know, we'll, we'll get down to that road and I'm, I'm kind of hopping the gun here, Jim. But you know, if there's something that, that really goes, goes through in my head for all my clients and people who want to meet me, you need to come in with at least a goal mindset of hey, this money is being put aside for this or I don't care if it's specific. Well, it can be for, you know, long term care if I need it or it can be for just the kids in general for inheritance. Okay. Well it can be in case I want to buy a new car in two or three years down the road or you know, whatever it is, at least there's a goal.
[00:25:25] Speaker D: Yeah.
[00:25:26] Speaker C: Because if you walk in to any, I mean, especially myself, I'm not, I'm not going to tell you where to put the money unless I know a goal. Right. Unless I could have a goal idea in mind a lot of times too. Maybe that helps you out. If you're listening to this show, maybe it helps you out to understand that you should have a goal. Okay. So hopefully I'm, I'm connecting with some of you guys out there and you're thinking to yourself, well, well, shoot, I don't have a goal, David.
[00:25:48] Speaker D: What?
[00:25:48] Speaker C: I mean the goal can be simple. You know, think about, hey, well, should I, you know, can I, can I use this for Christmas one year? Or hey, right, you don't want to make 5% of my 100 grand to use $5,000 for my grandkids gifts.
That's a goal. Those little things like that get you somewhere to be able to utilize what you have and to be able to impact your life in a positive way. And impact's a big word, you know, and I always say it in here in the office and where I'm at with my team, you have to be able to impact clients and impact colleagues in this business and, and, and I try to do it every single day. And I'm hoping that you guys are out there listening. But, you know, if there's one thing I have to say that that is on a personal level, it's, you need to have something put aside. As far as a goal, it's not tangible, right, because the money's tangible. But you need to have a purpose. The purpose. Maybe not a goal, maybe it's a purpose. Okay, hey, that 200k is just going to sit there and I just want to watch it for the next five years. Well, you definitely should be CD then, because if you're watching it for five years and you're not making double the growth that you had, then you're going to be real mad when you meet me. Right? But just to have a small, a small purpose of what you're doing with the money, I think goes a long way. And sitting down with me, you know, I kind of ask you those questions.
I take things to a personal level. So, you know, Jim and I know that, you know, we've created the great relationship, but like, the one thing that I think is as important about every client and creating a relationship with the client is to understand who they are and really what they, what they care about the most. Because a lot of you out there are probably like, well, some people care more about their inheritance. Some people care more about, you know, what their account looks like, which I kind of ran into that two, two mornings ago. Some people want to care about, you know, what they have to spend on a car or, or some people, you know, it. It depends on the person, but I kind of pull that out. I, I love it because I want to see what someone really cares and why that money is there. And I feel like the CD money, right, or the, we call it the money market money or the, you know, the fixed income part, it's not normally meant. It's not usually meant for just income. It's meant for someone just to be somewhere safe if they need to use the money, just like you said earlier. And to be honest with you, that's just, that's the wrong way to think about it, right? Because you have the money, utilize it to really maximize that growth.
And I think a lot of the times people just have it there to have it there. Right? So if you're out there, again, I'm going to end this segment with just saying if you're out there and you've.
And you've got some CD money or you've got some money market money or some money in a checking or savings, I know pretty much 90% of people out there have some money in checking and savings. And I've helped a lot of people do this.
Sit down with me. Understand your options on what you can make. Don't just make that one to 4%. Okay. Make more than that, but also be safe with your money. Understand that there's alternatives out there for you that we can sit down, that I personally can sit down, create that relationship with you and help you personally, you know, draw it up on the whiteboard, you know, and make it really simple for, for you to understand so that, that way that you can create that goal or create that purpose for your funds and for your retirement. So give me a call at 850-565-1705. Again, that's 850-565-1705.
[00:29:11] Speaker D: Yeah, and as we wrap up this segment, too, the back end of what you were talking about there, David, it sounds like with anything else in life, taking the ambiguity out of your retirement portfolio could really do you well.
[00:29:23] Speaker C: Yes, sir.
[00:29:24] Speaker D: Right. And, and kind of putting things in order where they need to be is really something that, I mean, people should not take the risk. And all that ambiguity in their, in their retirement portfolios, and you probably see
[00:29:35] Speaker C: it almost every day, every morning, every night, every evening. Yep.
[00:29:41] Speaker D: All right, now, reminder, reach out to us to get started on your own assessment today.
Just visit retirementplanningpipeline.com Take the ambiguity. That's the word segment. Word of the.
[00:29:51] Speaker C: I can't even say, Jim.
[00:29:53] Speaker D: Ambiguity.
[00:29:53] Speaker C: That's our, Hey, I have two math degrees. I don't have an English degree.
[00:29:58] Speaker D: It's the word of the segment right there. Again, retirement planningpipeline.com or call 850-565-1705 and schedule that no obligation consultation. This is the retirement planning pipeline.
[00:30:10] Speaker B: Helping you take control of your financial future. This is the retirement plan planning pipeline.
Welcome back to the retirement planning pipeline. Here are your hosts, David Pipes and Steve Zarek.
[00:30:35] Speaker D: This is the retirement planning pipeline. If you missed any part of today's show or want to go back and listen to previous episodes, go ahead and subscribe and listen to to the program in podcast form on Apple, Spotify or whichever platform you enjoy your podcast. All right, stay with us because coming up, turning assets to income. But as we dive back into today's show, it's time for this week's quote of the week.
[00:30:58] Speaker B: And now for some financial wisdom. It's time for the quote of the
[00:31:04] Speaker D: week in our financial wisdom Wisdom Quote of the week comes to us from American country music singer, television host, actor and businessman Jimmy Dean, Jimmy Dean.
He said, quote, I can't change the direction of the wind, but I can adjust my sails to always reach my destination. Our thanks again to Jimmy Dean for providing us with our financial wisdom. Quote of the week and a reminder, if you like the content we're providing, please subscribe to the YouTube page. We would really appreciate it. YouTube.com and search retirement planning pipeline for weekly video highlights and special content. All right, continuing with the show, how interest rates hit your retirement accounts. Stocks, bonds, 401ks and IRAs. The ripple effects you need to know. And David teased it last segment, Talking about your 401k IRA or pension doesn't matter because falling rates affect these accounts in three powerful ways. So let's go over them really quickly here. Number one, bonds inside your portfolio. When rates drop, existing bond prices rise. Number two, stocks get a tailwind. Lower borrowing costs from companies mean higher profits and stock prices. Number three, income strategies. If you're already retired and using a CD ladder or fixed annuities inside an IRA to generate monthly checks, lower rates could be pretty painful, falling or stable. But lower rates don't just hit your savings. They ripple straight into your 401k, your IRA and your pension strategies, boosting bond prices today, but squeezing future income yields. So, David, for someone nearing or in retirement retirement, how dramatically can even a modest drop in rates change the math on withdrawals, bond ladders or dividend plays? And what adjustments should listeners be making right now?
[00:32:45] Speaker C: Well, I think, you know, first of all, I want to go back to the quote of the week because that's, that's super important. And, and this is, this is something that I think that we picked. And I really, really think that people should look at the insides of what this is saying. Okay, so I'm going to read it again for you guys.
[00:33:01] Speaker D: And don't forget to quote Jimmy, to give Jimmy Dean credit, the legend himself,
[00:33:05] Speaker C: Jimmy Dean, Jimmy Dean.
Now, if you can't change the direction of the wind, just adjust the sales to reach the destination. And the easiest way to explain that is always change what changes. Okay? Don't let the changes affect the portfolio or where your plan's at without changing the plan with the changes. And I think we're seeing a lot of that and it's happening constantly because what happens is, is VI advisors out there, financial advisors, and, and people aren't adjusting. They're not, they're not, you know, being intelligent enough or maybe they're not caring enough. I don't, I don't know which one it is. But they're really just not because things aren't. When things change and, and, and, and, and things happen, we as advisors have, have just, you know, we have to be on our toes. We have to be able to change with it. We have to be able to contact our clients and understand what's going on and how to change, to adjust for those and really to take opportunities for, and make them the best opportunities for our clients. Every change, every volatility, every interest rate fall, every stock market rebound, every stock market fall is an advantage for the client. Everything, every single thing that happens in the economy can be an opportunity some way or somehow for all of your clients as a financial advisor. And I think that that's, if there's any way where I can explain myself to anybody out there, it's. We will always take opportunities to be able to fix portfolios and adjust them as changes come to how we can take the opportunity and really maximize the growth potential off of that opportunity.
And a lot of the times you to make, to make this really easy and simple for you. If you're out there listening, when's the last time that something bad happened and, and you know, or some, something, you know, maybe happens to a certain, a certain sector and all of a sudden you get out of ETF, okay? Or your advisor gets out of ETF or the 401k takes you out of the mutual fund that you're in. Never.
Never. They don't. You have to pick that, right? You have to go in there and pick which funds you want and pick which ones you there. That's not your job, right? So I think the biggest part about this goes into bonds, stocks and income. You have to have an advisor to be able to change plans and be on top of these things. Because your retirement, lifestyle or the one that you want to live when you retire.
I don't think any of you want to stare at the market in the morning like I do, okay? And I love it. So I mean, that's something that's different for me. But I think a majority of you out there, especially if you're listening, you don't want to. That's, that's what you want someone else to do for you. Sadly, okay? A big percentage of advisors are not doing that, okay? They're just sticking with ETFs, they're sticking with model portfolios, and they're not changing with the wind. They're not putting their sales in different directions, okay? They're keeping them the same way and they're going to get blown Backwards. Don't that happened to you, okay? Change those sales. Be able to really take it in and understand what's going on with the Iran conflict, with oil, with, with gold and silver.
Get. All these sectors. Get. Different trends. Get, get. And that's where I come in and really understand these things and why I love it so much is because there's always an opportunity for a client to make money. And I really, really, really push that. And Jim, you've heard me in other episodes.
The one thing that I think that people miss out on the most is, is. Is really, really caring and, and understanding. Hey, look, every. There's solutions to every problem, okay?
I can't tell you how, how, you know, how important it is, okay, to understand certain probabilities of certain markets. I can't tell you because I do that every single morning, okay? But the CD laddering stuff, you just, you know, you don't care about it, you don't want to be in it. It's got too much, you know, risk down the road for what you're going to be in or how you're going to be in it. And you can't time anything either. So that's, that's the one thing about ces. It takes the timing, you know, you don't, you don't want to time it, right? I mean, that's just, that's just who we are. But I think the biggest part about this is if you've got 401ks, okay? You've got 401ks, IRAs, 403bs, TSPs. Again, that's 401ks, TSBs, IRAs, 403bs.
You need to sit down with me.
Even if you don't have CDs and you have other bonds, stocks, and whatever it is, you have to be able to change these things with what's going on in the world, with what's going on anywhere. We saw the growth in the international stocks in the past year, we need to be on top of this.
It's what we're here for, that's what financial advisors are here for, is to be able to advise the way that we can, every single step of the way, not just one time, and then get a fee for the rest of your entire life while it's there. But we're able to advise and be able to be on top of the things to understand where we can really maximize the potential for growth for all of our clients in every single sector, in every single quarter, in every single year. Be able to really beat that goal. That we talked about in the last segment, have a goal for our clients and have a goal for ourselves and really maximize that potential and beat what we can out of it so that, guess what? You look good. We look good. We all look great. We all make more money and we're all happy. That's the entire point of why I'm here. Okay? So again, if you're out there and you're thinking to yourself, hey, I've got a 401k, I've got an IRA, I don't know really what I have. Might have some bond or some fixed interest or some stocks. Please, please sit down with me. I can help you out. We can at least come up with a good solid plan for, you know, about your goals, understand what you want out of retirement or what you're planning to do if you want maximizing growth and you're still young or you're a little older and you want to kind of plan for retirement. Now, it's two different topics, but that's what I love doing. Okay? So please give me a call at 850-565-1705. Again, that's 850-565-1705.
[00:39:13] Speaker D: Hot take alert here for you, David. But in my opinion, I don't believe that retirees or people who are nearing retirement or people who are in retirement, they should not be waking up on a Saturday morning. Of course they're going to put on the news. I get it. It's probably their generation. Nothing wrong with that, but. Or they'll flip on this show on Saturday mornings at 8am which they should do, please do. Right. But they shouldn't be waking up doing all of that and wondering, man, how is this affecting my retirement portfolio? How is this affecting my money? As a financial advisor, and you've talked about it many times prior to this show, financial advisor should be worrying about that for you. You as the retiree or someone close to retirement should never have to worry about. Okay, this conflict over here, this conflict over here and how is all of this affecting my money?
[00:40:02] Speaker C: I think one of the coolest things possible, Jim, on that, on that side of things, man, is to be able to have a market turn or something bad happen or even the sector blow up. And you could take the probabilities that you can and ride that train and take that opportunity and a client can see it the next quarter, the next year and go, man, holy smokes, we did a killing. David, I don't know how you did it, but again, it's not learning things early, obviously we don't know, we don't know what's going to come out in the news until it comes out or anything like that. But what we do know is when things come out, we could take the advantage of what we can do for long term aspects. Right. If we know something comes out in the news about oil or something coming out about gas and the demand is going to rise, what's going to happen to the price? The demand's going to rise. It's just true economics. It's going to go up. So let's shift some market assets. Those are the kind of things that I think that every single sector has their timeframes and that's what I love doing is taking that opportunity, but also taking the gains and then repositioning them. Right. Let me make 20% then reposition that. 20% is something else that will have that effect. You don't want to ride the train after you already made the money. I'm sorry to tell you folks, all the guys out there that are saying to themselves, well, this portfolio has done really well for me in the past five years.
[00:41:19] Speaker D: Well, I hope so.
[00:41:21] Speaker C: I really hope so. Because the market, I could throw a dark and make money in the past five years. That's right. Need to be worried about is when stuff doesn't go the way that the last five years went. All right, so. And when that happens, right, we're already seeing a little bit of it, a little bit of volatility, a little bit of un. Unsureness. You got, you got up and down, you got, I know, trillions of dollars added, trillions of dollars taken from the market.
This is when you can take opportunities of certain things, certain things that are, you know, that are lower on undervalued and that, you know, and that you can, you can appreciate and you could know the, these, these sectors and these, maybe Even stocks or ETFs have a great potential for, for earnings down the road. And that's where I really, really recommend you sit down with me. We can go over, you know, really depends on if you've got, you know, something going on for yourself. If you want the war risk portfolio or not.
That's, that's on the client, right? That, that has nothing to do with me. Okay? That's where those questions come in. Everything that I do is for the client and, and to make sure that their goals are met. But when you have a goal, we need to meet that goal. Right? And that's why I'm here. So if you want to meet your goals and you know, you want to sit down and go over a plan to really get to that goal as fast as possible. I'd love to sit down with you again. My number is 850-565-1705. One more time, 850-565-1705.
[00:42:47] Speaker D: Yeah, professional guidance is key here. So if anything that we've shared on this week's show makes sense to you and you can use some help with that Free no obligation Retirement Consultation. As David mentioned, don't hesitate to give him a call. David a call at 850-565-1705 or of course you can visit retirement planningpipeline.com all right, coming up next, real rate of returns versus interest rate return. We'll step aside. This is the retirement planning Pipeline.
[00:43:13] Speaker B: Your retirement questions deserve real answers. Call 850-565-1705 to scare schedule your free no obligation consultation today.
Missed part of today's show the Retirement Planning Pipeline is available wherever you get your podcasts and@retirement planningpipeline.com Led Zeppelin and
[00:43:44] Speaker D: the Rain Song Bringing us back into the retirement plan planning pipeline, Led Zeppelin's fifth studio album, House of Holy, was released on this date, March 28, 1973. You're listening to 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, of course, on whichever platform of your choosing.
Final segment of today's show David Real returns versus Interest rate hype why inflation is stealing your gains. A 4.2% CD sounds solid on paper, but strip away 2.4% inflation. And as you mentioned earlier, David, you're really only earning about 1.6% in real purchasing power. And taxes make it even worse. So let's break down the real return reality check why nominal rates are misleading, how to quickly calculate your true after inflation gains, and why chasing headline yields alone could leave retirees and long term investors far short of the growth that they actually need.
[00:44:50] Speaker C: I think the reality check here, Jim, is bottom line is you don't know what you're making, right? And, and when, until that inflation data comes out, you really don't know. And, and on top of that, don't, don't, you don't have to do all the math to understand that there's going to be a loss of the dollar right when inflation comes into play, right? So I think what hurts the most is when People take a loss inside the market and they make it back the next year and they tell themselves, oh, well, I'm still back to square one again. It's like, no, now you have 2.5 times two.
So you only lost 5% of your purchasing power in general. Okay.
And that's that, that, that goes to maximizing growth. Right. But the other thing that I think that comes up a lot is when people talk about nominal rate of returns or what interest rates are out there. And truthfully, those, those are kind of a brainwashing mechanism. I'd say there's something in there because really, if someone's going to give you a fixed rate of return, they're just taking your money to either loan it out, which is banks. It's all banks do. So you can, you can think that you're making everything all you want, but if someone else already knows that they'll take your money and give you a rate, then what does that tell you about what you can make? Oh, yeah, right. So they already know the inflation's coming. And I always say this, don't let the system beat you. Right? The system is the system. Okay? We won't go into, we won't go into who the system is or why.
[00:46:25] Speaker D: To be another episode.
[00:46:27] Speaker C: Yeah, yeah. Or, or a different kind of episode other than financial.
[00:46:30] Speaker D: But spin off of the retirement planning pipeline.
[00:46:35] Speaker C: The retirement planning systems. That's right. No, I mean just, you don't. Just like Social Security, right. You have to be able to utilize what you can do and maximize for yourself, not for the, not for the government, not for, you know, your, the companies out there, the corporations that tell you and have the advertisements to do it. Okay. All those things are misleading in some sort of way. And they're by. They're not misleading. They're biased. Okay.
They're biased for their own selves. They're biased to where if you put your money in, okay, they make money off you, obviously. Right. But they're biased because they're not telling you everything. And no advertisement for any certain company is going to tell you everything in blue fine print up top, they might be small print at the bottom, it might be a disclosure at the end. But you have to understand that there's no real understanding of what rate of return you can get until that time comes about. And really taking the opportunity to really maximize your growth because you can know one thing. There's always one thing guaranteed, and that's going to be taxes and inflation. It's going to happen. Right? And we over history of time. You're gonna have inflation and you're gonna have taxes, no matter what you do, unless you're in a Roth IRA and, you know, and you've got it back then. And I think Roth IRAs are absolutely amazing. And there's a reason why you can't put too much in there, right? But, you know, there's, there's ways that we as advisors and myself that I think this is where I play a big part of in helping my clients is to be able to beat those systems and understand how to beat them, right? Find the loopholes, understand what way you can do legally, right? To be able to make the money that you can make and to be able to beat, right, the benchmark or you could be able to beat the, you know, whatever advisor you had over there or whatever they promised you, right? But you've got to figure out a way that you could take certain things, okay, and, and really monopolize off of, of, of how you can take them and create opportunities. And that's where I think that that is most important, out of our side as an advisor. And if you meet with me, you'll understand that we want to be able to be actively, actively managing portfolios to where I can always say, hey, I'm, you know, I'm here, I'm calling you. I'm able to, to understand where, where certain sectors are, where certain markets are, where, where the news chains are.
And that's super, super important. And if you're not getting those calls from advisors and trying to change plans on where the wind's blowing, and I go back to this, Jim, because, wow, that was good.
Where the wind's blowing, right? And how to shift your sales. That is super. That is one of the most important things possible in retirement because your sale, your is going the opposite direction.
[00:49:24] Speaker D: Nice.
[00:49:24] Speaker C: You're literally all your life, your sale was going forward, right? Because you're plugging in money. Your four 1Ks, your IRAs, your income's coming in, your debts getting paid off. Now the boat is turning around. You now have to use the money and you don't have income coming in anymore. Whether you're planning for retirement in 10 years or you're planning for it now or, or from two years behind, it all matters. Every single part of it matters. Even if you're 25, 30 years old and you're planning now, you need to be able to capitalize off growth, especially when you need to compound.
These things matter every single day in the market. Every single day the market's open Every single day that your life is here. Right. Having an advisor to be able to do that with is. Is what one of my personal, I would say, strategies that I really. And then that's just because I care. Okay. Obviously, I care about all my clients, but because it matters and you can do it, it's. You're able to do it. I think that's the cool part about it. It's a math equation, right? There is a solution. Yeah. Okay. And I think a lot of times people just ride the wave because it's the easiest thing to do. Oh, let's just keep you an etf. Ab. It's fine. You know, we're all good. You know, it'll come back one day. You know, it's like, what are you doing? Oh, well, this fund is created 25% of growth. We're going to stay with it.
[00:50:46] Speaker D: Yeah.
[00:50:47] Speaker C: What's the probability that. I mean, anybody can say this. Okay, what's the probability if anything, any security goes up more than that percentage, then it comes back down a little bit. The probability is higher than what it was.
[00:50:59] Speaker D: Right.
[00:50:59] Speaker C: Okay. That's just, that's just common math. That's just probability. All right? And you can learn that back in actuarial school when I went to college. You learned that in statistics. Okay. When. And that's the shareholders, the people that buy the stocks or the buy the ETFs, are the ones that really, you know, throw that to the punch. Okay. And you got alpha intervals. And I'm not going to get nerdy on you, but there's, there's a way to understand, right, that, that you can have a higher probability in certain things to make money, or a higher probability in certain ways to be able to benefit you. Right. Whether it's income, whether it's growth, whether it's, you know, long term, short term. And these things change.
Yeah. And that wind changes direction all the time. Just like when I go fishing out the boat, right. If I'm out early in the morning and that wind shifts, I know I gotta change something. I know I gotta start going a different direction to hit those waves. Or, you know, my, my, my trolling motor might not be set the right way. Or, you know, maybe the snapper are gonna be eating a little bit less at certain, certain times of the day. The tides are shifting. Right. These things are important when it comes to everything in financial, too. And again, if you're out there and you're thinking to yourself, well, well, David, what way do I go? Or, or how do I fit into this plan, what do I need? What do I do? What's my purpose? What's I want to. This purpose? I have this purpose for my money. How do I assess that purpose and goal towards my money? Or maybe it's my advisor that I'm with assessing that purpose the right way.
Come in for a second opinion. I can sit down and tell you it's, it's very, very, very simple. Again, my number is 850565. 1705. That number is 850-565-1705. Yeah.
[00:52:41] Speaker D: And the quarter week, in case you're just joining us here, it came from our, our friend Jimmy Dean. Our friend, and he talked about our financial wisdom quote of the week earlier. And he said, quote, I can't change the direction of the wind. I have it right here reading in front of me. I can't change the direction of the wind, but I can adjust my sales to always reach my destination. And you know something, David, if that's the theme of today's show, I think that fits very well because we've talked in, in earlier segments really about getting the right financial advisor to be able to put you in the right place, to understand what direction the wind is going and put you in the right place so you don't have to worry about your money and you can just worry about living what a lot of people like to say, the golden years. And in your retirement, living worry free.
[00:53:23] Speaker C: I would say live like Jimmy Dean. You know, one of those breakfast sandwiches in the morning with sun, the sunshine and everywhere. Yeah, you get absolute.
[00:53:31] Speaker D: Yeah. Sandwiches when you're young and, and during, during the pandemic. That's, that's really the only commercial that I can remember seeing every single day.
[00:53:39] Speaker C: I tell you what, man, Jimmy Dean commercials. Jimmy Dean had a great, had a great quote. And, and I think, and you can apply that to a lot of other things. But I mean, when you talk about financial, that just hits the head. And for you guys out there who think that riding the wave for financial is the way to go, you're, you're wrong. I mean, you're totally wrong. Trust me. I mean, I went to school for this stuff. You, they sometimes corporations, sometimes, you know, certain things. And I won't go into details about it because obviously I, you know, I don't want to, I don't want to get in too much trouble, but they don't want you to know. Sometimes people don't want you to know just like other things, you know, I mean, the more you don't know, the less it hurts you. Right? So that's why I'm here. And that's why I think that what I do is unique, is because I'm able to capitalize off those opportunities for. For my clients. And sometimes I think that, you know, people are told a lot less because it is very, very difficult. But education and I've talked to many clients in this, really, this past year that have told me something that I haven't heard in a while, and it's. I haven't had enough education on my money or my retirement. My job is not only to just make you money, okay. My job is not only to invest your money. My job is also to educate you. Okay? That's why I have the degrees and the licenses that I have. Right. And I. And I can utilize that to make you understand more, but also to clear your mind up, because the more knowledge you have, the less stressed you are. And that's the entire. I think that's missed out on so much in the financial industry is. I've got it taken care of. Like, don't worry about. No, that's not. Yes. At a certain point, I don't want you to pull your hair out trying to understand what goes through my mind. Trust me. My wife doesn't know what goes through my mind, and sometimes I drive her crazy, so don't do that. But the way that I can break down things to clients and make it simpler for them to understand and to feel more confident in their retirement and in their financial plan, in their institution. Institution, in their. Whatever they have in their retirement fund, their 401ks, in their IRAs. That's what we need to do. That's what I really specialize and base my plans off of, is to also be able to. To really help you understand what your purpose is and how to meet that goal. Because a lot of the times you think that your goal is something. And I'm saying this because I've. 90% of my clients, as this happens to you, think that your goal is something. Until I meet you. Then you realize after my questions that your goal is something completely different and that you're able to utilize that. And really, you become confident and you're like, oh, my gosh, I didn't even. David, thank you for letting me think about that. And I need it, too. Okay? I need that for my wife sometimes. But more than one mind is always better than just one. Always. No matter what it is. Right. Two minds are always greater than one. And that's. That's something that I think that, you know, if I can push anything and if I can say anything here for all you guys out there and the ones that I meet, you know, I can't wait to hear from you and I can't wait to sit down with you and help you out, because that's what I love doing. But I really, really, really, you know, I push that. You try to be different and you try to understand the system. Sometimes it's not there for you. The systems there for the corporations, the systems there for, you know, for other ways to ride the wave when we can change those sales and we can ride the wave whatever way we want. Okay? So if you're out there again, please call us. Please call me. You know, I. I can't wait to sit down with you. My number is 850-565-1705. Again, that's 5 8, sorry, 850-565-1705 and
[00:57:28] Speaker D: you can visit retirementplanningpipeline.com as well and schedule that free no obligation consultation 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 to the show on YouTube. Search Retirement Planning Pipeline on YouTube for clips and special content as well. It's the Retirement Planning Pipeline. Thanks for listening and we'll talk to you all next week.
[00:57:53] 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'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 retirement retirement planningpipeline.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. Regardless 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 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. Charles David Pipes and Steven Szarek are individually licensed and appointed agents. Learn more at retirementplanningpipeline.com Investment advisory services
[00:59:24] Speaker A: are 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 individual licensed and appointed agents not affiliated with Social Security, Medicare or any other federal program.
[00:59:43] Speaker D: 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.
