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 A: Hi everybody. Welcome to this week's edition of the Retirement Planning Pipeline, the show that delivers expert insights, actionable advice and real world financial strategies to help you retire confidently and comfortably. Thank you for making our show a part of your weekend. I'm your host Jim Tarabokia alongside retirement planning specialists David Pipes and Steve Zarek. Those guys will be along in just a moment. Retirement Money the rules, the reasons and the reality. What your accounts are really doing for you before and after you stop working. Coming up on today's show, the guys break down qualified versus non qualified funds in retirement, why the IRS created qualified funds and steering through financial shifts in retirement. But before we get the show started, I do want to encourage our listeners to go ahead and schedule your 100% complimentary consultation with retirement planning specialists David Pipes and Steve Zarek. Today. It's a free offering just for listening to our show. No obligations. Our listeners can meet with us to review their own financial situations for your family or for your business. And again, there's no obligation. So visit retirementplanningpipeline.com to get started.
Qualified versus non qualified funds in Retirement not all retirement dollars guys play by the same rules. There's a confusion that a lot of retirees face and it's simply the mindset or thought of. I Saved, but I don't really know how my money works now. So guys, let's talk about qualified versus non qualified funds. What they mean and what are some common examples of such.
[00:02:43] Speaker C: Yeah, well, I mean first of all we have to go into really the, the basis and the, the meat and potatoes of retirement and that is qualified funds, right? Steve, we talk about that a lot. And I think what happens is, is people get, you know, they end up saving either part of their assets on, on either side. Normally it is qualified, right? And to go over these, you know, certain assets, we're talking about 401ks, 403bs, tsps, right?
IRAs, Roth IRAs, simple IRAs, SEP IRAs, right? All these types of funds are called qualified funds. And what that means is it's basically governed by the irs, okay? The IRS overlooks these funds and they give you certain, let's just say strategies or implications and a lot of times advantages, right? For the tax deferred or maybe tax free into a Roth account, okay? So these kind of accounts are kind of governed by the IRS to where they're giving you advantage to save for retirement in different, different ways, right? The non qualified side, we really get into after tax money, okay? So and what I mean by after tax means you make your salary, okay, let's say it's $100,000 a year, okay? You pay the IRS. Let's say you either paid inside or after, right? When April comes around and you have, let's just say $80,000 yet left of net, okay? That is after tax money, right? Your, your pre tax money is going to be, right, you contributing or your employer and yourself contributing to four 1Ks, four or three Bs and TSP, things like that, even 457Bs. But the bottom line is, is that the majority of retirees, right, they're saving up these funds through these qualified funds and in really matching employer contributions with them to tax defer until they retire. And the whole point of that, right, is to be able to save a certain amount of funds to be able to use to supplement what, Steve, Supplement income. Right? That's, that's the big idea. We're going to kind of get into that later. But again, these qualified funds are the most important part of the pre retirement and then when you retire, okay, the most important part is understanding what these are, how to use them and how to kind of manage them when you retire or getting up to retirement, right. I always say that the goal is five to 10 years before you retire, right? 55 to 60 range, you should really be looking into what, what plan do I have individually to be able to supplement my income and how am I going to be able to take money out or use it as income out of these funds to be able to get there. I'm a non qualified side. I'll touch a small portion on it. But you look at more at the CD range, money markets, right? Brokerage funds, cost basis and I know I'm throwing out a lot of words, but that's more about the stuff that you have. Let's say you buy a stock when you're young, you've been holding onto it forever, more of those capital gains come in, right?
[00:05:43] Speaker D: Well, David. Yeah, you know, if you think about the qualified for not versus non qualified, the easiest way for people to remember that qualified have no preferential tax treatment. So you can invest as little, as much as you want for qual for non qualified money. So when it comes to qualified that gives the title, there's certain guidelines and the government is pushing people to, to fund the qualified accounts. The main reason, you know, quite frankly, is because there's less and less pensions in the more in the workforce today. So if you, I read something not too long ago, you know, a couple decades back, 60% of the people that were working had a pension set up with their company and now it's less than 20%. So you know, what are people doing to supplement that pension income? They're creating these qualified accounts. And the way it works is you get tax credits. So you're putting money into these qualified accounts and you get not counted as income. And then down the road when you retire, you use it for income. So I think whenever you hear the word qualified, that's really your account that you're creating for income when you're retired.
[00:06:46] Speaker C: Right. And those qualified funds, Steve, those are made for you to use. You know, it's funny because in our seminars and we talk to a lot of clients or you know, even people that are asking questions on the, on the show or calling in, you get a lot of questions saying, well, what if I don't need it or what if I don't want to use it? Those should be the first funds that you should be using is the qualified funds. If you have qualified funds, okay, you need an individualized plan for those funds in retirement. And that's what we specialize in. The one biggest thing is, is people make a lot of mistakes on when to take them out, how much to take them out, how Social Security is involved in those qualified funds. Right, because income brackets Come in. Tax efficiencies, come in. That's the big plan. If you're pre retiree or getting retired, you need to give us a call. 850-565-1705. We'll sit down with you. It's a free, it's completely free. We go over a full plan with you, we show you really how to utilize that into what your goal is in retirement and individualize that plan. That's the most important thing. Those TSPs, 401ks, IRAs, many people make a lot of mistakes when it comes into retirement about how to use them, when to use them, and sometimes they never even get the full benefit out of those funds. And Steve, we see that all the time.
[00:08:02] Speaker D: Well, and that's what we do best. When people sit down with us, we create their own plan. And it's, you know, when you're talking about a retirement plan or using qualified funds, a lot of people, and I'll give you my example, and probably your example, I invest in 401k, I invest in a SEP IRA and I have traditional IRA. Not once have I had anybody sit down with me and tell me how to manage that. Thank goodness I'm in this business. So what do you think? People out there that are listening, they're getting ready to retire, they have these funds and really don't know how to use them. And that's where we can sit down with you. We can work on a plan and give you some maximized guaranteed income like David said, you know, we'll do a free plan with you. You come into our office, we can meet you at your home. You know, just call us, we'll sit down and work that. We call it your personal pension plan. And that's what we'll help you with.
[00:08:46] Speaker C: And that's, that's super important. Again, guys, what Steve just said was there's a lot of mistakes that happen. You're not ever taught, right, how to disperse or how to, how to use your 401k TSB4.3BS or your qualified funds. Right? Roth IRAs are a big thing in this too. So if you have any of these and you have questions, okay, and you wonder how to use them or turn them into a pension or turn them into a, maybe a, a risk free, you know, portfolio with a little bit of growth with it, with, with some income down the road, that's super important. So to individualize your plan to maximize what you can do with those 401s, this 401ks, TSPS, IRAs and things like that. Give us a call, 850-565-1705. We'll sit down with you. We'll go over an individualized plan, considering what you want, right? It doesn't matter what the irs, when the IRS wants you to take it out, right. Does it matter when, when your, your kids want you to take it out or whether it's, it's your retirement plan and these, this has to come up and this has to be pushed more.
[00:09:51] Speaker D: You see this, David? You know, you know, I'm a numbers guy and I like to throw out different statistics and whatnot, but as of the third quarter of last year, there's over $52 trillion in qualified money. And if you think about that, a lot of you listeners out there have qualified funds, especially the baby boomers. You know, born 46 to 64, you're either already retired, you're getting into retirement, you've saved this money for your retirement income and now there's this big wealth and people don't know what to do with it. And that's where we can help again. We can sit down, work that plan. And you know, some of our clients want income early on in retirement. Someone want to turn to qualified money, spread it out for lifetime, some want to fund it towards the end. Someone a place where they can have protection, you know, for long term care in case that happens. That's all part of your retirement plan. And the qualified money is one of the best assets to use when you're planning that and maximizing your retirement income.
[00:10:43] Speaker C: It is the best, Steve. It is the best. And I tell you, I sit down with people every single day, three or four couples a day, and I cannot stress to you how important it is to be able to maximize and utilize what you have in your qualified funds. Right. One case and IRAs are one of the most important things when it comes to retirement and you have to do it properly. There is no specific plan to utilize those four 1Ks and IRAs for everyone. It's just not, there's, there's no cookie cutter plan. You have to be able to sit down and go towards your goals and utilize those qualified funds. Depending on what you want, what vacations you want to go on, how much you want to give to the grandkids, things like that matter, right? And that's where qualified funds can really become an advantage. And to be able to use those and transition them right. With, let's just say, you know, one of the most common ways is a right as a rollover, right. You can actually roll over those funds and it's a non taxable event and you could be able to use those as an income stream tax efficiently for you. So if you need help with 401ks, TSPS, IRAS, please call us today. 850-4565-1705. And we definitely get, you know, just sit down with you and have a plan. It's really not that difficult.
[00:11:58] Speaker D: Let me put a quick plug in if we have time here for you, David. We, you know, for those of you listening, we do a lot of of seminars, dinner seminars, dinner events in the area.
I know we have some coming up in February at the Grand Marlin on Pensacola Beach. I think I know, David, I believe you're speaking at those. We do do them in the evening at 6pm Because a lot of our clients are still not quite retired and they're still working on their retirement. So they fill up quickly. I mean we limited them 20 people per event.
But I know there is one on the 18th of February and the 24th of February at 6pm at the Grand Marlin. We have other ones in Crestview, Orange Beach, Foley. But if you guys, you know, call that number, we can, you know, we're direct, it's a direct number to us. We can get you as a priority on that seminar.
[00:12:40] Speaker C: Yeah. And if this is something that you guys, you know, you're more interested in, you can see it live, you can see some graphs. We go over some really cool stuff and enjoy an amazing dinner. So give us a call.
[00:12:51] Speaker A: And again, your retirement isn't just about how much you saved. It's about which bucket the money is in for utilization. Something to keep in mind as well. Coming up later, from accumulation to Distribution. We'll talk about that. But up next, what exactly are qualified funds used for? This is the Retirement Planning Pipeline. We're back in a moment.
[00:13:11] Speaker B: Visit Retirement Planning Pipeline to schedule your free no obligation compliment consultation today. The Retirement Planning Pipeline will return in just a moment.
Welcome back to the Retirement Planning Pipeline. Here are your hosts, David Pipes and Steve Zarek.
[00:13:39] Speaker A: Welcome back to the Retirement Planning Pipeline. Thank you for making our show part of your Saturday on WCOA News Talk 104.9 new episodes at 8am again every Saturday right here on 104.9. As we dive back into today's show, a reminder. If you like the content we're providing, subscribe to the YouTube page YouTube.com and search Retirement Planning Pipeline for weekly video highlights and special content. Order Qualified Funds Used for the IRS has a plan for that money do you? Well, okay, let's shift away from definitions and talk about applying real world usage when it comes to qualified funds. David and Steve, let's give everyone in depth look at how to use qualified funds and some common mistakes retirees make regarding qualified funds when you meet them.
[00:14:26] Speaker C: I love, I love the fact that Jim says the IRS has a plan and you don't. That is one of the biggest, biggest mistakes I think that a lot of retirees make. And Steve, I know, I know it's kind of funny to you because, you know, you've been in the industry for forever, but you can see it. I mean, you've seen the evolution of what people don't use in the inheritance of these products and how the IRS can really monopolize off of the funds that clients don't use. Correct?
[00:14:55] Speaker D: Yeah. You know, we talk about the IRS has a plan. And it's kind of funny because I kind of tie the IRS to Social Security and you know, we run into people all the time and too many people out there, if you're listening and you're rolling up your Social Security and you can actually activate it and not have to give any money back. That to me is one of the biggest mistakes because, you know, they think, oh, I'm just going to hit my qualified account and roll up Social Security. And actually if they're not working, it should be flipped. Don't you agree, David?
[00:15:22] Speaker C: I think they should turn on. Both Steve and I have my own numbers and my own math on that. But there is no reason that you should not be taking Social Security as early as possible. And I mean, as soon as you retire or as soon as you stop working in General, whether you're 62, 63, 64, shoot, all the way up to 60. Really? I mean, 60, 67 now, I mean, even if you're trying to roll up to 70, there's just no reason for that.
[00:15:46] Speaker D: Yeah. And you've, you've done the math on that. You know, we're talking about mistakes and what the government, you know, I think the last number I read, there's 38 trillion in debt right now. And we don't, there's so much uncertainty with all these baby boomers retiring.
That's why you have to create your own pension plan. The qualified funds work perfect. Turn the Social Security on as soon as you can. Don't let it roll up. That, that's a big, big, big mistake in retirement. And we can sit down with you and, and we can show you a plan that's designed for you, showing you why you should turn that Social Security on.
[00:16:14] Speaker C: Yeah. And Steve, you're hitting it on the head. Right? And that's exactly what Jim asked. What, how, how are we going to use these qualified funds? And if you're listening, you, you already know that there's a reason for it, right? We, we've been talking about it. Okay, but the second part about that is you need to use it as a personalized pension, or it should be used as a personalized pension. Now.
And the way the income stream works, it can vary depending on what your needs and your, you know, whatever your plan is. But that money is supposed to be, you know, started in the, let's just say, distribution phase rather than the accumulation phase. Okay? And that's a big, big problem. We see a lot of the mistakes right now with qualified funds being used as what, trying to be used as inheritance being used as a safety net. That is not the point of the retirement funds. Right. You have to understand that these systems that the IRS built, right, they're not going to tell you, okay, what's best for you. They're not going to tell you to turn Social Security on early. They're just not right. They're going to try to benefit themselves. All right? And same with the companies, same with the 401k companies. Do you think that they want you to have your $500,000 to a million dollars in a 401k taken out of their own account, the money that they're using to invest in and to make quadruple amounts of money that you're even making on your own funds?
[00:17:36] Speaker D: You made a great point, David. Too many people, too many advisors, too much stuff in the media are telling people, don't do this, don't do that, don't take the income, reinvest your 401k, help let it grow. And that's not the philosophy in retirement. You know, people save years and years and years. They put money away in the qualified funds. You know, I think the average, I, I told you earlier, the average person has over 320,000 in a 401k and almost 200,000 IRA. So we're talking a half a million dollars. That took people a lot of time to save, grow it, keep pumping in. When the, when the highs and lows, they're buying their dollar cost averaging. And then when they retire, they have to shift that mentality and don't let people tell them, don't take income, don't turn on, don't turn it into a pension defer Your Social Security. Those are absolutely one of the biggest mistakes in retirement. And that's where we can sit down, plan it out for them and show them why. And one of the things I see that you like to do, David, is you talk to people about, you know, I don't know what the term is you use, but they're, they're mixing their 401ks into growth and conservative investments. And it's really not how it should be done.
[00:18:43] Speaker C: Well, in. Here's the deal, okay? You need to maximize your rate. And I'm going to say that over and over again. That's the one term you're going to hear me say all the time. Maximize your income, okay? Whether it's Social Security, whether it's your, you know, your own retirement qualified funds, whether it, you know, it's a, it's a big house that you sell for investment in real estate, you need to be able in retirement to maximize how much income you're receiving in a cash flow every year so it does not run out, okay, for the rest of your life so that you can live that good retirement. And that's what we do, okay? And that's what we do here. We specialize in those plans. So again, if you need to really, I mean, you need to sit down and go over someone of how to transition those 401ks, TSP, 403bs, right? All those types of plans, IRAs, non qualified funds, anything you have, you need to create a, a solid plan for cash flow or income, guaranteed income coming in for you for the rest of your life so those funds don't run out. And I think what the, the biggest issue is 401k companies will never tell you that. And that's why we're here today trying to tell you beat the system. Those funds are meant for that, okay? And I know a lot of companies are out there saying, well, don't do this or don't do that or let's grow these funds to this. They're worried about themselves, they're worried about the company growing, they're not worried about you, okay? So have someone help you out that can actually go towards your goals. Again, call us today at 850-565-1705. Again, 850-565-1705. Sit down, go over a plan for yourself, right, to maximize your income and to be able to utilize your 401ks, your IRAs and your TSPs, to transition that to work for you, not the companies that are holding them, okay? Because they're Never going to tell you to move it. Obviously, these companies are creating expense ratio, fees, fees and everything else coming out of these. And they're investing for themselves. They're. They don't know your name, all right? They just know your account number and they know how much is in there. And they want to be able to keep these, these assets, the trillions of dollars that are now, well, transitioning over from.
Right. These retirees in.
[00:20:55] Speaker D: David, you know, I kind of look at the title of this show. It's, you know, retirement Planning Pipeline. And obviously with your name being pipes, it's a pretty neat little, little title. Think about a retirement pipeline. You know, what happens if a pipeline is defective? What happens? I mean, we're in a cold season right now. You know, if people didn't insulate their pipes, it's going to burst. And that's the thing. We don't want people to do that, are listening. If you have qualified money, you have this stuff, you know, your account saved up. Don't make the mistakes. Don't, don't have a defect in your pipeline when it comes to retirement. And that's where we can sit down and help work a plan. And we take everything into, you know, we look at the health care, the Social Security income, you know, your goals and your retirement. You know, one of the things we try to do is use secured products to maximize your income so you don't have to worry about what happens. If I live to 95, is that income going to run out? We use guaranteed secured products. You've brought the word up. Guaranteed. And I think when you're peeling off a portion of your retirement and you're making a plan and you're creating a personalized pension, you better make sure it's a guaranteed, maximized personal pension. Because the last thing you want to do is sit there at 83, 84, 85. Didn't think you're going to live that long, and now your money's depleted and you don't have any more income.
[00:22:08] Speaker C: Right? And most importantly, do not let the IRS or company take advantage of you.
You take advantage of the situation now. Get it handled. Create the plan. Have that 401k, IRA, TSB403D work for you. Not the company, not the IRS. Create a plan for you. Have your goals put in. Maximize your income in retirement. Make sure that your inheritance is there and whatever you have. Right. Is being utilized for your goals in retirement. And not the companies, not the fees. Right. Not all the other, you know, writers that come with it or the People that want you to keep those values to be reinvestment. Right? Don't let that happen, okay? Utilize your goals. Again. If sit down with us at and give us a call today. 850-565-1705. Again, 850-565-1705. We'll sit down with you and go over that plan for you, you and to keep the company's aspect out of it, okay? The IRS and the company are not looking towards you.
[00:23:13] Speaker D: So David, I got a question for you. And we're talking about retirement, we're talking about these asset classes. And you know, I like to use the word buckets. You know, we separate them in different buckets.
You know, if there's one bucket you could identify for qualified funds, what would that bucket be?
[00:23:28] Speaker C: It's got to be income, Steve. It's got to be. And it will never ever change in the history, right? The 401ks and IRAs were meant for the income substitute of what the pensions used to be and we should get it for.
[00:23:43] Speaker D: So what do you think about the non qualified funds? I mean if somebody, if they're looking at their assets and they say, okay, I've got a half a million in qualified, and I've got a half million in the non qualified.
You know, you're saying the qualified income, what do they do with the, the non qualified?
[00:23:58] Speaker C: Well, the non qualified gets tricky, Steve, because you have cost basis and stuff like that. If you have brokerage accounts now, if you just saw a property and you pay off the taxes on it, yes, we can work with that and we can definitely utilize that. But really of the non qualified funds, you want good growth without the risk, okay, to be able to utilize what you can use on an income stream and you could maximize income off that too, don't get me wrong, but 90% of people out there, and I know it's pretty much every retiree has them, we're seeing a lot of it. 401ks, IRAs and TSP are everywhere. And it's a big problem right now. It's a huge problem because they're not getting taught, they're not getting really, I mean, I would say they're not managed properly because the ignorance out there of, of what these things can do, nobody wants to, no advisor wants to tell the person, okay, these are no advice to tell the person, hey, these funds need to be generated in income. Every time I talk to a client, when we went with our first meeting, it's always, well, my other advisor says that I need to Wait, or I can only take out this much. I can only do this.
The goal is always the advisor to keep the funds as long as possible so that the fees can accumulate, offer the bigger accumulation value. And that is not the goal of the client. The goal of the client is to utilize and maximize the income towards their own goal, what they they want. It is not about the advisor, it is not about the company or the irs. Okay. It needs to be tailored towards the client. And again, if you're out there and you have a 401k IRA, TSB, any type of qualified fund, or maybe non qualified funds, if you get a big check in for inheritance, we work with people every day and help them utilize and be able to maximize their full retirement potential. Give us a call today. 850-565-1705.
[00:25:50] Speaker D: One thing I want to bring up, David, we talk you, you touched on it lightly I think in the previous segment is about moving qualified funds. And, and I think one of the things we've seen out there, we run into people all the time that have multiple jobs over over a 30 year, 40 year history and they may have several 401ks, you know, with different companies they worked for and then they move to a different company. And I just ran into it last week with a caller that called me and you know the thing that I think people out there that are listening need to understand, you can move the 401ks if you're no longer with that employer.
So you want to touch on that a little bit about. Yeah, reposition.
[00:26:28] Speaker C: 401Ks can always be moved. Really. I mean, and generally, I mean all 401ks can be moved all the time. You can roll over these into IRAs.
Now it depends on your vesting schedule. Okay. But anyone who is close to the retirement age can move even if you're still working. So if someone's like, well, I'm still working, I'm still putting in my 401k, my tsp, that's, that's when you need to move it. You don't want those funds still in there. I just help my father do this. Okay. You have to utilize what you can do because TSP and 401ks and 4 to 3bs only have certain things that they can invest it. Right. They're only so versatile. There's only, there's only so many things you can do do with those type of funds. When you roll it over into an IRA and things like that, that's when you can really hit the versatility of what you can do with it. Right? I mean, you can put into an income stream. You can roll up an income stream. There's a lot of things in that. Right. That we can use. TSGs and 401ks are a big, big topic about that. Yeah.
[00:27:25] Speaker D: And it's, and there's so many things that, you know, again, it's a custom plan that we do for clients and we do for people that we meet on these calls and at our seminars. And we'd be happy to help you and create your own custom plan with your qualified funds and your non qualified. I know we're focused on qualified. We do both. But today we're really focused on, you know, nailing down qualified money.
[00:27:45] Speaker C: And we see it a lot. And again, do not let the companies or the IRS control when you take your funds and maximize your income. It is your plan, not theirs. Give us a call today, 850-565-1705. And we could sit down with you and actually create that plan.
[00:28:02] Speaker A: And a quick reminder, our listeners can start working with us today. David and Steve are here to discuss your income goals and vision for retirement. They'll take a look at your current income plan and portfolio of assets, walk you through their recommended plan, answer as many questions as you may have for retirement. David mentioned the phone number again. 850-565-1705 or just log on. Visit retirementplanningpipeline.com for a no obligation consultation. This is the retirement planning pipeline.
[00:28:32] Speaker B: Helping you take control of your financial future. This is the retirement planning pipeline.
Planning for retirement doesn't have to be overwhelming. Get expert insights, tools and personalized strategies to secure your future. Visit retirementplanningpipeline.com today your retirement, you plan your peace of mind.
[00:29:03] Speaker A: This is the retirement planning pipeline. If you've missed any part of today's show or want to go back and listen to previous episodes, go ahead and subscribe and listen to the program in podcast form, Apple, Spotify or whichever platform you enjoy your podcast. All right, stay with us because coming up, a major financial shift in retirement. We'll break it down. But as we continue on with the show, let's introduce this week's quote of the week.
[00:29:29] Speaker B: And now for some financial wisdom. It's time for the quote of the week.
[00:29:38] Speaker A: And our financial wisdom quote of the week comes to us from theoretical physicist Albert Einstein, one of the best, call him the goat if you will. And he said, quote, we cannot solve our problems with the same thinking we used when we created them. Theoretical physicist Albert Einstein providing us with this week's quote of the week. And as we dive back into today's show, if you like the content we're providing, subscribe to the YouTube page YouTube.com and search Retirement Planning Pipeline for weekly video highlights and special content. Also, if you want to write into the show, if you have topic ideas, things that the guys want to want the guys to touch on, just visit retirementplanningpipeline.com and leave a message. All right, before we move on with the show, I want to give some facts about pensions. In the mid-1980s, around 60% of private sector workers in the United States had access to a pension plan through their employers. And during this period and decades prior, pensions were a very common form of retirement benefit. But by 2020, the number of US workers covered by traditional pension plans significantly decreased, decrease. According to data from the Bureau of Labor statistics, in 2020, only about 16% of private sector workers had access to a defined benefit pension plan. Government employees and the federal, state, local levels are more likely to have pensions. That group right there sometimes called a defined benefit plan. So is it possible to create your own pension plan? The answer is yes. And you can establish your own pension plan, a guaranteed lifetime income, using a similar strategy that can companies and governments use to guarantee benefits to former employees. So reach out, Visit the website retirementplanningpipeline.com book that free consultation and let's get started in creating your own personal pension.
All right, guys, why did the IRS create qualified funds? The deal you made, whether you knew it or not. They often say you're a financial partner with the irs whether you want to be or not. Qualified funds are like a joint account with the irs. But guys, they just let you use their half first.
[00:31:44] Speaker C: Yeah, and that's a great point, Jim. You know, the qualified funds are meant for retirement. Now if the IRS doesn't really want to tell you that, neither does these companies. Right? So this is like on the last section, I really, really push towards people to understand that 401k companies and IRS, they're not going to tell you that what these are made for because it's not going to really, it's not going to really help them. Okay. Taxes historically always go up. So we have to understand that. And we have to also understand that if people have make mistakes and utilize and really take out these are these, these qualified funds in a, in a, and let's just say not a bad way, but in a, in a, in the wrong way. Okay. It can be more tax advantage.
It's more of a tax advantage to the IRS than it is to you, right? When you pay more taxes and your income goes up. The IRS loves that, right? They receive those funds, so they're not going to teach you how to use them. Okay? So again, if you're out there and you want to know, or you have a 401k, 403b, TSB, IRA, any type of IRA, okay, you need to be able to use these and maximize income, okay? And that's where we come in and sit down with you and create that plan to maximize your income or to utilize these and transfer these into a cash flow stream or an income stream. That's what these are made for, okay? And again, the companies are not going to tell you that. Okay? So give us a call today at 850-565-1705. Sit down. Understand what the IRS isn't telling you, okay? What the 401k companies aren't telling you or aren't showing you how to use those and figure out a way to create your plan, specifically an individualized plan just for you, not for the company. These, these, these funds are not for the company. They're for you to utilize and maximize your income and maximize your funds for your retirement.
[00:33:41] Speaker D: So, David, I got a question for you. If you, you're talking about the IRS and setting up an income plan and creating their own pension, what I mean, I know there's rules and IRS says you don't have to take your income now. It's, you know, take it to 73. So when you meet people, do you encourage them to start income early or to defer it till 73? What, how do you determine what, what somebody should do out there that's listening about when they should attack their, their qualified money?
[00:34:12] Speaker C: You need to take that income as fast as you can, turn everything on and, and you know, and we'll go over the numbers. When you sit down with us, especially, you know, sitting down in the office, we've got three big whiteboards to really sit down with you and make it pretty simple for you. We want our clients to live a simple retirement. Again, utilize and maximize that income and live a stress free retirement. Okay? And that the stress free retirement does not come from a lack of income, Steve. Okay? That's only going to create more stress for you.
[00:34:41] Speaker D: You were leading right up to my next, my next point. You know, when you think about the people we deal with, you know, what are they worried about? They're worried about losing money in the stock market. They're losing about running out of money. Because they live too long, they worry about maybe not have enough money to cover long term care costs, they're worried about inflation.
You know, all those things can be solved if they have an income solution.
And I think, you know, talking about qualified funds, the income solution, they meet with us, we can work a plan, we can figure that out based on their goals. And that's why it's so important for us to meet with people to look at their qualified money, what their goals are in an ear market for income and give them guaranteed income.
[00:35:19] Speaker C: Right. And all. And you said it perfectly, okay? All those problems or mistakes could be easily solved. Okay? And we can't stress that enough because the goal for the client and the goal for you is to live the best retirement in your terms.
Whether it's use all the money to go on trips or you know, use the money to see the grandkids or travel. Right. These things are different for every single person. Okay, again question for you David.
[00:35:47] Speaker D: You good point. You made.
You see people right now, the market's been up for a couple of years now. They forget about the down years when the market's been up. So people say, well, I'm going to let it keep growing. And yeah, I'm retiring next year, but I'm just going to let it ride and keep growing. I've had very good growth over the last couple of years. What do you, what do you say to people when they bring that up to you?
[00:36:07] Speaker C: Well, Steve, that's not simplifying retirement, okay? Watching the stock market every day might be your hobby out there, but I'm telling you what, 95, 97% of retirees do not care about watching the stock market every day. It's just not going to happen in retirement. It doesn't simplify. Right. What the retirement sector is about. The retirement sector is to really show the stress free side of things, get the income to supplement. And that's what advisors are missing. Advisors are missing the, the maximizing of the income side out of these qualified funds for one case TSPS and IRAs to be able to utilize the best retirement for their clients. It's not about the advisor's pocket, it's not about the company's pocket, okay? And I think everybody out there and there's a bunch of advisors out there that are being trained to really go towards of the, you know, the more of the corporate side of company side. That is not the goal of retirement. The goal of retirement is to ease the client in a stress free way to maximize their income so they don't have to worry about next year or 10 years or 20 years down the road of having to worry about the expenses being covered or doing what they want to do in retirement. That stress free aspect has to come into play. Again, if you're looking for that stress free retirement, you're looking at what to do with your 401k IRA tsp or transitioning it into maximizing income. You need to call us today. 850-565-1705. Again, that's 850-565-1705. We can sit down with you, create that stress free plan and make sure you live the best retirement.
[00:37:49] Speaker D: And then, you know, and you made a good point because at the end of the day, somebody worked all their life, you know, raised a family, you know, bought a home, worked and worked and worked, put money aside. And when they retire they try to eliminate stress. At least that's what my goal is going to be. And, and that's what the goal of a lot of our clients when we start talking to them. And I don't think they can do that unless they set up that, you know, that guaranteed maximized income in retirement. I think that's the big key. And I know we've talked a lot about that over the last few shows, but I think people are missing the boat because they go talk to other advisors and they're talking about growth and, and keeping the money in the, in the company. And you know, and that's just not what I think people are wanting out there in retirement. They want to have peace of mind, simplicity and they want guarantees and that is going to give a stress free retirement. You know, no, nobody wants to be stressed out in retirement.
[00:38:41] Speaker C: And that's the thing, you guys listening out there, you guys know what you want. I mean, it's not, it's not a difficult subject. Okay. It really should be tailored toward what you want. And I know it sounds so simple, but everything's getting confusing and there's tons of advertisements out there and people are spending millions of dollars on these big platforms for big companies to confuse you, to, to really lock up the fact that you're going to be able to use your money or lock up the fact of where you want to put it. And I know there's a lot of people out there with advisors that are kind of iffy or you're wondering how to really transition because an advisor is not doing so well for you now. And they're transitioning funds different places in different sectors and allocating different things that's where we come in and we can set the plan towards your goal. Okay? So if you're out there and you're having issues with anybody or you know, you've got, you've got, we want a second opinion on things or you're not feeling right and there's 401ks or even your IRAs or things like that aren't performing the way that you want to perform and aren't to going generating that income. Okay, Again, if the 401ks and IRAs and TSPs and 403bs are not generating the income that you need or want to outlive your full retirement so that you are stress free, you don't have to worry about that. Please call us today, 850-565-1705. We can sit down with you, go over a plan to utilize and maximize income or on your side and if.
[00:40:08] Speaker A: Anything that we've shared on this week's show makes sense to you and you could use some help with that free no obligation retirement consultation. As David mentioned, don't hesitate to give the guys a call. 850-565-1705. Again, we do this show to bring important information to people like you and we love meeting our listeners. So Again, visit Retirement PlanningPipeline.com or call 850-565-1705 for your personalized investment confidence checkup. Coming up next, financial shifts in retirement. Very important. This is the Retirement Planning Pipeline. We'll be right back.
[00:40:45] Speaker B: Your retirement questions deserve real answers. Call 850-565-1705 to 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 welcome back inside.
[00:41:14] Speaker A: The Retirement Planning Pipeline, the show that delivers expert insights, actionable advice and real world strategies to help you retire confidently and comfortably. Jim Taraboki here alongside retirement planning specialists David Byes and Steve Zarek. Thank you for making this show a part of your weekend on whichever platform of your choosing. Retirement money, the rules, the reasons and the reality. What your accounts are really doing for you before and after you stop working. And if you missed any part of today's show, be sure to subscribe to the program and podcast form Apple, Spotify or whichever podcast platform of your choosing. We're also on Iheart and Pandora as well. Don't forget to subscribe to the YouTube page for weekly video content and special highlights. All right guys, financial Shifts in Retirement From Accumulation to Distribution why Everything Changes We've been teasing it throughout the show. So let's zoom out to look at the bigger picture, guys. The major retirement shift from saving money to using money.
[00:42:13] Speaker C: This is so important. And, and for you guys out there that you're, that you're, you're retiring, this is the biggest shift in the entire United States ever in history. It's the biggest wealth transfer. It's the most amount of money. Right. The biggest, I would say stock market booms in history have happened over the past 30 years.
Right? Well, really 40 years. So when we look at this, we think about, hey, how do we maximize our income and what we're using it for? Okay. How do we use this money to supplement what Social Security is not supplementing? And again, pensions out there, they might supplement a little bit, but they're not going to supplement. Especially with inflation the way it is and the compounding of inflation, you're not going to be able to supplement all your income from just your pensions or security. It's just not going, especially as a, as a couple, okay, to, to be able to utilize what you want in retirement out there, you know, and I have some clients who like, well, I don't want, you don't need much. Expenses get higher and higher every single year. So you're going to have to adjust for that, adjust for inflation, right? And those are the plans that you have to create to sustainable, really to sustain income. You have to sustain income down the road and now and to be able to generate income that can never leave, that can outlast everything. Okay, if people that are taking money out of their 401ks and IRAs and TSPs and four, three Bs, you've got to find an alternative. And this is where we come in and really specialize that plan towards you. So if you've been taking out money out of your 401k Iraq or you've been thinking about it, or plan to down the road, that's where you have to meet us because that's the most important step. Right? Just like Jim said, really, from making money to taking money. Okay. And that's a great way to explain it. So again, call us today at 850-565-1705. One more time, 850-565-1705. And we could plan how to take that money out efficiently, but also make sure that it outlast yourself and make sure the income is maximized for life.
[00:44:17] Speaker D: So David, you, you talk about maximizing income and, and doing that transition. Jim mentioned it about transitioning. From, you know, accumulation to distribution.
And I think this is one of the biggest areas where, where listeners and people we meet with make a mistake.
They, they think they should still be accumulating money even though they're not contributing like they used to. And then they start taking withdrawals. And you mentioned it quite a bit and I know it's more on the one on one consultations when you talk about sequence of returns, especially when you're taking withdrawals. And I know you went back and you've done the math with folks and, and clients and listeners and, and you know, and, and we always say, well, the market's going to come back, it's going to come back and it does.
But when you're taking money out, how does that affect somebody's retirement? In retirement, if they're using those assets, they're keeping them in the market, there's no protection and yet they're taking withdrawals and all of a sudden we have corrections in the market. How does that affect somebody that's retired?
[00:45:14] Speaker C: Yeah, we talk about this a lot, especially in our seminars and it's great to visualize this. So again, you know, you can reach out to us and actually get one of these little pamphlets that we have or you can come to our seminars. We have one in Grand Marlin February 18th and then also the 24th at 6pm so if that's something that you're interested in, to really go one on one and be able to see this live, we buy you a nice dinner, you can sit down. We actually buy you a cocktail as well. Just one, just one for the couples.
And you know, you can come in and watch us there. But you know, one of the most important parts about really the accumulation phase is you're able to buy what's called, what's called dollar cost averaging. You're able to buy at certain periods of time to, to lower your cost basis and to be able to utilize on the maximization of compound interest. You can't do that right when you're taking money out. And this is what I just said earlier. If you are taking money out of your 401k or thinking about it, okay, the distribution phase is starting to happen. You have to plan for that. It is the, it literally correlates in a mathematical formula the total opposite way. It's a, it's an exact inverse correlation to how compound interest works. It actually decumulates as much as it accumulated when you actually used it for retirement. And I always say this right when you're, when you're retiring, what do you, or when you're working, sorry, what are you doing? Right? You're, you're, let's just say you're putting in $30,000 a year in your 4.1k.
Okay, let's say that your, your income was $150,000, right? That, that's what, 20%. Okay? That's 20% of your income that you're putting in there. All right? Guess what?
You're going to need 65% of your income when you retire. Only 35% is, was what Social Security covers.
So now the 20% that you put in, you need 65% every year to come back out. The math doesn't make sense. So if you're, again, if you're pulling money out of your 401ks IRAs, or you're thinking about it down the road, or that's your plan, which a lot of you should, that should be the plan. You need to plan it where you can actually have it outlived. Okay. You have to be able to create an income stream and maximize your income on that side. And again, we can sit down with you and help that out. 850-565-1705 again, 850-565-1705. We can sit down with you, we can go over those numbers and make sure that you're maximizing your income because that plan is tailored differently towards every single person. It's not going to fit every single person. So you have to understand that expenses are different, income's different, the way that you spend your money is different. Okay? Some people are a little more, you.
[00:48:03] Speaker D: Know, a little more expenditure than other.
[00:48:05] Speaker C: So my wife spends more than I do. I know that. Right? So again, I love her to death. But there's a lot of things that are different when it comes to when you're spending money versus putting money in. And I'm telling you now, the biggest mistake you can make is taking money out of your 41k IRA or spending anything in retirement without having a full plan of the income side. You need to maximize income first.
That's the biggest mistake out there.
[00:48:33] Speaker D: Well, and I think you hit the nail on the head, David, because if you look at talking about income and retirement, the two things that we do for folks when we meet them, when we create that plan, is we use the guaranteed plan and an insured plan. So there's no what ifs, there's no, you know, what happens if this, what happens if the country goes to war? These are guaranteed rock solid plans. So when we're sitting down with somebody. We design that income plan in retirement where there's no, there's no what ifs. We get rid of the what if so they can relax, they can sleep well in retirement. They don't have to stress out if inflation goes up, if we go to war, if, you know, we see what's happening in Minnesota, they don't worry about all that because it doesn't affect the income plan. And that's, that's one of the things we do for our clients. Get them an income plan. It's guaranteed rock solid and insured, and they're out there. There's a lot of them out there.
[00:49:20] Speaker C: And again, if, if you're living a little bit on edge and you're stressed out and you're a little bit stressed or you're worrying about how, how you're going to retire, that's what we do. This is what we specialize in. I love it. I, I have a passion for it. I love my clients. I love the people. I love helping. And, and really I, I believe that the Lord brought me into what I do for a reason, okay? To help people retire and to be stress free and to not have to worry about when my money's going to run out, okay? Or how much money can I use each month. That's a big problem right now. And I know a lot of you out there have that problem. It's a short, very, very short problem that we can fix for you and we can help you understand how to do it and when to do it and where to do it. Okay? And that's a, it's a totally free consultation. So again, call us at 850-565-1705. We're people, guys.
We are just people. I'll answer, we'll sit down with you and set that, set that appointment up.
[00:50:20] Speaker D: And I think the listeners need to realize we work at all ages, all, everybody has an independent plan. So it's not one blanket plan that we're throwing out there. It's a customizable plan. You know, we have clients that say, hey, I want, I want a higher income for the first 10 years of retirement. Then I want to level it off later on in retirement because I'm not going as much as I would when I first retire, we can design those plans for you. If somebody says, hey, I'm retiring, you know, maybe three or four years down the road. And we set the plan up now so when they retire, it's already in place. You know, we had a caller Last week, it was, what, in the 70s, still didn't know what to do with his qualified funds. He saw that they were running out. So we immediately transitioned into something that was a more of a guaranteed steady income, you know, where you didn't have to worry about money running out.
[00:51:05] Speaker C: Yeah. And if you listen to people out there and all you hear is pitches or pitches of ideas or pitches of plans, that's not what it's about, folks. It's about your plan. And your plan is going to be individualized and you're going to have to sit down and figure that out yourself with someone like us. Right? Because the idea of you going into an advisor, it's always, well, this is what you should do. This is how you should live, and this is how much money you can spend. That's all. That does not matter, okay? Because it's your retirement, it's how stressful you want to be, it's how stress free you want to be, and that's the utilization of. What we do is we can sit there and tailor towards. And that's why we're so different, is because we tailor towards your goals. The first 15 minutes, we're asking you questions about what you want to do, figuring out, you know, what kind of client you are, right where you want to be in retirement, right, what expenses you have, what you really love to spend money on. Those are the things that advisors should be asking, not, well, this is how much you can take out, and this is how much you will take out. That's not the goal of the client.
Right. It's your retirement. We're just here to help you solve the problem that you have. It's. Everybody has a different problem. And really, that's where I think things get tricky and confusing, is because advisors want to have all those problems solved by one equation. Guys, math doesn't work like that, okay? There's. If you ever took a class or physics class in college, it's called Differential of Equations. It's actually a math class. There's different variables in every single equation and there's different solutions to every single equation. There's never going to be the same solution for every single problem.
Your retirement is your.
I don't want to say problem, but right now it is a problem in the United States because no one is being. No one is taught how to transition your 401ks, TSPs, IRAs, qualified funds into something that utilizes and maximizes income for you. No one teaches you that. Everyone wants to just use it for the company or for the investor or whoever it is, right? The irs, the government, no one is out there for you. Everyone's out there for themselves. Sit down, really understand how to utilize yourself and maximize your system and beat the system, right? That's my motto. Don't let the system beat you, okay? Utilize the income. Maximize what you can do in retirement. Live the stress free lifestyle and really live and live the retirement to the fullest.
It brings a smile to my face every time we sit down with a client and we go over the, you know, the last year of what they did. It's awesome because they're doing that without the thought of, oh, well, I've got, I can't spend too much money or I don't have enough income coming in or how do I transition this income into more. The plan's easy, guys, but it has to be tailored and thought of, right for you and mathematically makes sense. Again, give us a call. We can go over those 401ks IRAs, IR qualified funds to maximize the benefits for you, not for the company, not for the irs and not for the the advisor for you. Okay, again, it's 850-565-1705. One more time, 850-565-1705.
[00:54:34] Speaker A: Steve, you got the last word here, brother.
[00:54:36] Speaker D: Hey, he was on a roll, man. I was letting him fly with it.
[00:54:41] Speaker A: Great job today, guys. And again, we love hearing from our listeners. Again, if you have any questions, visit retirement planningpipeline.com let's chat and also give David and Steve a call. You just heard that phone number. Again, 850-565-1705 or again visit retirement planningpipeline.com if you missed any part of today's show. Both David and Steve were on a roll today. Great show. This is episode 16 of the podcast and of course, thank you listening on the radio side. But again, don't forget to subscribe to the program in podcast form on Apple, Spotify or wherever you get your podcast. Subscribe to the show on YouTube. Our YouTube page search retirement Planning Pipeline for clips and special content as well. This is the Retirement Planning Pipeline. Thank you so very much for listening. Have a great week and we will talk to you all next week. Dad, take care.
[00:55:30] Speaker B: Thanks for listening to this week's episode of the Retirement 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 as 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, useful 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 I'm David Pipes.
[00:57:01] Speaker C: I specialize in retirement planning and I come at it from an analytical point of view, using math, statistics and risk analysis to help people create income they can actually rely on in retirement.
[00:57:10] Speaker D: And I'm Steve Zarek. I've spent over 30 years helping retirees and pre retirees make smart, practical financial decisions. My focus is on keeping things simple, especially when it comes to building dependable income with tools like annuities.
[00:57:23] Speaker C: At Retirement Planning Pipeline, we help connect all the pieces retirement income, life insurance, healthcare planning and strategies to reduce future taxes, including Roth conversions.
[00:57:33] Speaker D: We work with retirees, business owners and investors across the Florida, Panhandle, South, Alabama and beyond, helping people feel confident confident about their financial future no matter what the markets do.
[00:57:44] Speaker C: If you're 55 or older and wondering, am I really ready for retirement, we'd love to help you.
[00:57:49] Speaker D: Call 850-565-1705 or visit retirementplanningpipeline.com to schedule a free new obligation consultation.
[00:57:59] Speaker A: By the time the decorations come down and the credit card statement goes up, many Americans are left with the same quiet question, did I spend too much this holiday season? I'm Jim Tarabokia for the Retirement Radio Network powered by Amerilife. For some, it was gifts for children or grandchildren. For others, travel, hosting or simply wanting one bright moment at the end of a long year. And now in January, the emotional glow is faded, replaced by credit card debt numbers that feel harder to ignore. Financial experts say this post holiday moment is very common, but the good news is it's also manageable. ABC News Elizabeth Scholzie says that one of the best places to start the cut down is by analyzing non essential items.
[00:58:40] Speaker E: This is the time of year where we do tend to see credit card balances spike in December after all of that holiday spending. So really it is the time to try to make a plan to take stock of your debt and pay it off.
[00:58:51] Speaker A: According to a recent article from cnbc, there are further steps you can take to manage and pay off your credit card debt. First is establishing a clear direction. According to Scholzi, this common strategy is called the snowball method.
[00:59:03] Speaker E: So what this does is you paying off your smallest debts first and making minimum payments on all of your other balances. So what this allows you to do is have a bunch of kind of small wins. You move off your first smallest debt, pay it off, go to the next one. Kind of keeps that motivation up.
[00:59:17] Speaker A: Next comes simplification. Options like balance transfers or consolidation loans may help lower interest costs and make payments easier to manage, especially for those juggling work, family or fixed retirement incomes. And finally, there's reallocation, finding small ways to free up cash through modest spending adjustments or directing a bonus towards debt without upending your life. Small changes can significantly shorten the payoff timeline. The main connection through all of these is achieving the goal of stability. So while the holidays are about generosity, January is about intention. And taking control of holiday debt isn't about what you spent, but it's about what you choose to do next. For the Retirement Radio Network powered by Amerilife, I'm Jim Tarabokia.
