Ep 29: Financial extended warranty (Financial Safari)
Taking some risk in investing is okay. But this is what it takes to guarantee lifetime income.
broadcasting from coast to coast. It's the financial safari with your host coach beat the root of you'll hear from some of the nation's top financial professionals. So stick around and find out how to make it through the jungle of the financial world right here on the financial safari. E Welcome to financial Safari TV. My name is Cynthia DeFazio, and I'm joined today by coach Pete Derrota, otherwise known as the People's Choice. Coach Pete, how are you today? In a fast moving week? Cynthia, I'm doing great. Hope you are weak. Yes, absolutely been doing really, really well. And again, I'm so thrilled with all of the viewer feedback and questions that we've had throughout the weeks. And actually, since we started the show last year together, it's been amazing. Time flies, doesn't it? That's right, and you've just been so busy, so thank you for taking the time to always come in and do the shows. This is fun. It really is. It's fun to just be in the TV studios. Always fun folks. Have you ever seen a TV studio and from the inside out? It's pretty cool. And yes, these lights are bright E When you're in a TV studio, you figure out why the Hollywood stars and athletes are always wearing sunglasses because the lights are bright. Then when they flash you, like with pictures, get those little blue dots in your eyes. I don't like this with that. Absolutely. That's why they were the sunglasses. Probably that makes that they want a cool, probably e. So I love this episode, Coach P, because we have a lot of viewer questions actually that have been coming in. So if you don't mind, let's just kind of dive in a little bit. And I haven't seen these questions ahead of time. So I like these. These are fun for me because I'd like to be surprised. Me, too. So this is the first caller that we have. It says Coach Pete. I've heard you mention this before. Can you explain that in a little more detail? What is a financial extended warranty? Oh, well, you know, I don't like I'm not a big fan of extended warranties. When you buy things like when you're making a major purchase for a car or a refrigerator or washer and dryer, no sooner than do they get done selling it to you and telling you how great it iss. Then they turn around, tell you it's gonna break. Think about that, right? Eso In the financial world, we don't have the worry of if we set things up correctly, we don't have the worry of them not breaking. So you get a free extended warranty. If you have a lifetime income playing, the warranty is you're never gonna run out of money. How important is that when we get now? The reason why people buy extended warranties for cars and whatever is they never wanna worry about it breaking down. If it does, they know it's going to be taken care of. Well, in the financial world, if we have an extended warranty built into your income plan, you have a lifetime income plan. You can never outlive that, and we call it growth protection income. We need our money to grow, obviously needs to grow fairly to it needs to share in the gains in the market not all the gains but sharing the gains. It needs to walk those gains in where we can never lose them. So once you get again, it becomes part of your principal. In other words, nobody could take that away but you on. But we need to have lifetime income. The lifetime income is the extended warranty in the financial world and have done correctly. It will take the warrior out of living in retirement. Well, Coach, my advisor says he could do that. Well, I don't know if they can or not. If you have stocks, bonds, mutual funds, there's no way you can have extended warranty or the lifetime income with sure to 100% surety. That will be okay, Cynthia. In my lifetime in your lifetime. We've woken up in the morning after going to bed, and everything was fine in the stock market in your lifetime. Have you seen the case where you woke up and things weren't fine after they were fine when you went to bed? Absolutely. September 11th, 2001 comes to mind in 2007, when we started finding out that banks were loaning out money they didn't have, and then we had the mortgage. You have all that stuff happening, so who knows what's around the corner? We had covert last year that hurt a lot of businesses. Some, they're never gonna recover somewhere out of business permanently. Mom and pop businesses. All the money they had they put into the business because the business was gonna be the retirement plan. That's why we practiced diversification. We should never have all our eggs in one basket. Because if the business was gonna be your retirement plan and you're out of business, where's the retirement plan? So it's my business to make sure that everyone else's business is taking care of the right way. And what we do is we design lifetime income plans with some money that people don't wanna lose. Everyone has somebody they don't wanna lose. Everybody does. And depending on who you are, you might want to have more money. You don't want to lose or less. Everybody has a little bit of wild streak in them where they want to take a gamble on Bitcoin on stocks on the next big thing. That's okay, but only after you have your lifetime income account established. So we had we call it core and explore your core accounts. Need to be there for the rest of your life. They need to kick off income for the rest of your life, your core never go away. No one could take it away. There'll be no dirty tricks. But then we have our core. We know we with certainty what our lifetime income is going to be all the way through retirement, and we know we will never spend that kind of money. That's good. That's good. A good position then, and only then can we take leftover money. The money that we don't need for the core and put it into the Explore account Explorer account is where you buy silver gold, Bitcoin, real estate, real estate investment trust. If you want to take the gamble there, I'm not a big believer in real estate investment. Trust Variable annuity. Another word that I don't like. There's some good annuities, but not with the ones that have variable in front of eso. I don't even advise that for explore money. Okay, with my clients, you may be different. That's fine, but one thing's for sure. Everybody is the same in this aspect. We need to have core amount of money that we can never lose, never go away, and that core it's a green account we call it. It needs to give you a lifetime income. So it needs to another growth protection income. And I know I talked about it's almost every show, but retirement planning is all about looking at the road you're on now and making sure that that road's gonna get you to the destination you wanna be. And if you do not have a green account, you don't have that lifetime income. You don't know what corn explore is. You don't have any idea what kind of money you can't lose. Then we need to meet. And we need to meet a soon as possible to make sure that you are on the right track. Cynthia, what we do, we meet. There's two things that can happen. Number one is we agreed to meet again and have a better, better plan you have put together based on what? You've already told us what you want to have happen. Then we meet again and show you what we decide or we agree not to meet again because number one either you don't like us or we don't like you that that had happened much never happened or we tell you you're in a perfect place. So we give you that reassurance, have a doctor. But he said 90% of my job is reassuring. The worried. Well, of course, E got a cold. I got a headache. Go. The doctor doctor says you're fine. Just get some rest and relaxation, drink a lot of our issues. Well, if you're doing fine, wouldn't it be great to know you're doing fine? And would it be great to have a fiduciary team give you the honest answer? You know, there's some. There's some people in the financial world. No matter if you're fine or not, they're gonna tell you they're not on day. Wanna get your money? If you are fine, we will tell you you're fine and we'll tell you not to make any changes. Or maybe a couple tweaks is always necessary. But it's good to know this ahead of time. If you approach retirement and you still don't know what's going on now, you really need to meet with us. You're in that financial red zone five years away from retirement all the way through retirement. You're in that red zone. You can't afford to lose any of the money you've accumulated surely there and you need you must have that lifetime income account established. So I talked about this with Rocky Bleier on my CD here. Rocky Bleier is a former running back for the Pittsburgh Steelers, won four Super Bowls after coming back from Vietnam, which he volunteered to go to. By the way, here about Vietnam. I was this little kid then. A lot of people don't want to go to Vietnam, But he volunteered. Lost half a toe going away in mind, okay, came back and won four Super Bowls, blocking for Franco Harris and playing with Terry Bradshaw. So Rocky Bleier says he wrote a book called Don't fumble Your Retirement. He said, Coach, people need to know when they accumulate money. It's your money now. You don't wanna give it back. So we them or more money you can isolate from risk fees, expenses, financial termites, those risks, fees, expenses and not put into what I call unidentified financial objects. UFOs. I see so many UFOs these days where we're financial institutions. They're trying to design something that looks really cool, but we analyze it. It shouldn't be in your portfolio to begin with the flavor of the day kind of thing. And so people ask me about Bitcoin all the time. And that's not That's not a UFO, because Bitcoin has been here a while. But I don't advise people putting money in place. They don't understand. Okay, I don't understand. Bitcoin good enoughto recommend it, right? So not that it's bad or good. I just don't understand it good enough to recommend it because there's nothing behind it. A twist? Well, a dollar. When somebody gives you a dollar, you know the government's back in it. Supposedly back in the day when someone gave you a dollar. You know, there's a big stack of gold behind there, but it's no gold were not on the gold stand anymore. But we still have the power of the U. S. Government back in the dollar. Bitcoin is not even a coin. You basically get electronic thing saying a key, saying You have certain amount of coins, so e just understand. It doesn't mean it's bad, but I would not recommend risk money. You can't afford to lose going in that risk account like that. So let's keep the questions about Bitcoin but Z for the next 20 people. Let's design a total retirement plan for you. It's 22 steps that we do behind the scenes, and we accomplished this with you from a fiduciary standpoint and three meetings or less, and we make sure to number one. Tell you if you go in the right way. If not give you the tweaks that are necessary for that or do a total redesign, you're playing no cost or obligation. Others charged way over $1000 for this. We're gonna do it at no cost or obligation for the next 20 people call. We've also got a three books set of written eight books. I've got three books I want to give away. One is called The Seven Baby Steps, my best selling book on Amazon. Get a lot of checks from Amazon, but I'm gonna give you that at no cost. And I've got my DVD on retirement. This is very good book, and it helps you go through that wealth report card Weaken. Grade yourself a little bit, but more importantly, get on the right track, get your right plan and get that plan done by a fiduciary team at no cost or obligation next 20 people call right now. That's an amazing offer, Coach Pete. To the viewers at home, The phone lines are now open and the number is on your screen. We know you have a lot of questions about how to plan your perfect retirement. Coach Pete has the answers for you again. The phone lines are now open. All you have to do is pick up the phone and call the number on your screen. When we come back, I'm gonna have some more viewer questions for Coach Pete. So please don't go away. We'll be right back. Okay? Education is paramount when it comes down to financial planning, especially if you're in the financial red zone. Folks, I'm consumer advocate Thomas Lips. Come here with Coach Peter wrote a best selling author and the founder of this TV show that you're watching right now. The Financial safari, as well as a nationally syndicated broadcast radio show, this word by millions every year. Coach, This is a great box set that we've put together. I appreciate you doing it well, Thomas. The reason why we put together our shows is to educate folks just like you out there and I've taken some time now and you help me with these. Put together these tremendous box sets with workbooks, guide books, DVDs and worksheets in They're all designed to help you get onto the path that you really need to be on an educational Sending Thomas in your own house so you have to do is call the number you're gonna see on the screen and you get your very own workbook guidebook and set DVD set as well as your no cost consultation. Yeah, yeah, it's a kid. Welcome back to financial Safari TV. My name is Cynthia DeFazio. I'm joined today by coach Pete Derrota, otherwise known as the People's Choice. Coach Pete, a great show that we're having today. And I love this because obviously a lot of it would be the viewer questions. So how can they submit a question of their own if they're curious on how to do so? And I think everybody is. And so we have a new option I'm gonna introduce now, too, but financial safari dot com, and you'll see on that main page where a little tab where you can submit your questions. There's also a microphone tab there if you wanna. If you wanna hear your voice on the show, we're gonna offer that you can ask your question like your computer has a little microphone and can submit it. And you might hear yourself on the show financial safari dot com Thank you so much. So this is a great question. I love this because obviously we've had a lot of fun with this in the past, but this is particularly cute. It says, Coach Pete, can you help me understand What is alert? Yeah, yeah, L I r I know it's a funny term, isn't it? L I R p wife insurance retirement plan. Okay, So if the person who's telling about a work is afraid to say life insurance, then that's probably not the person who should be talking thio life insurance again. A lot of people are afraid they don't wanna have anything to do with life insurance. Cynthia I've never seen anyone complain when I brought a check to a beneficiary after someone passes away. Tax free inheritance basically and so. But Life Insurance retirement plan is using life insurance as a retirement plan for you while you're living, so life insurance has really changed in the last five years to benefiting you now, not just your family that you leave behind. And so what does that mean? Well, you can put you Conover Fund A life insurance plan that's over funding means they say, Hey, the insurance company says you need X amount of dollars for X amount of coverage. Say, uh, you need to give us $10,000 a year for a million dollars of coverage. Let's say I wanna put in $50,000 a year for that same million dollars coverage. Well, then, at other 40,000 is gonna build inside that life insurance chassis. It's gonna build interest rate, and in the future it's gonna grow. Hopefully, right. So in the future, when I retire or whenever I need to, I could borrow money out of that plan. The balance grows pretty big. We've seen some pretty big balances in life insurance for cash value. You could borrow against your cash value and a ZA long as you never cancel your life insurance policy. You never have to pay the loan back. When you pass away, the death benefit will pay the loan back, so it's a way to get a tax free income. Think about that. Tax free is good. You don't pay tax on that money that you're taking out because you're borrowing from yourself. Therefore, it's not really income. It's a loan from yourself that gets forgiven when you pass away. Pretty cool, eh? So it's kind of complex. But when you think about the ways to plan for retirement or in retirement, we have pensions. Maybe some people still have pensions. Way have 41 K s and IRAs money. We put a way on ourselves ourselves we put away. But the problem. Then we take that money out. We're gonna attacks on all that money many times. And unless you have a Roth 41 K, which many people don't but a Roth 41 k, you could take the money out tax free in retirement as well. So life insurance and Roth the two main ways to get tax free income in retirement. That's why the work plan makes a lot of sense now. That was good enough. But some of the big insurance companies now say your death benefit again. This million dollar policy we're talking about, let's say you have a long term care event. E think with people watching. I guarantee you a lot of people watching they're gonna know somebody in their family who already has had a long term care event or they may have themselves. The problem with long term care is expensive, isn't it? Like if you buy a long term care policy and they could raise rates on and all that kind of stuff. So you don't need a long term care policy if you have specially designed life insurance policy that will let you take some of the death benefit out when you're here to pay for long term care expense, A lot of people don't really like most people don't realize this, and you may have a life insurance policy. You may be paying a lot more than you should be, and you might not even have this benefit. This rider added on that it's called a living benefit rider. So to have a review of your current life insurance policy and to make sure you're in the right place and if not special instructions on how to get that right place, Cynthia, the next 10 people call, we're gonna waive are planning for you to do this. No cost or obligation will make sure you're on the right track. That's fantastic. Speaking of which, this is a great question, says coach Pete. I'm 10 years away from retirement. What advice do you have for me 10 years away? Retirement comes a lot faster than you think. You may think you're 10 years away from retirement. Your boss may decide you're retiring tomorrow. Early retirement, right? So here's what I say. You're You're getting close to that red zone. I say. If you're over 50 years old, it's time to make sure you have a total retirement plan. 50 and older, I used to say 52 but now things have changed so much in the last year. 50 is a very important age. We reached 50. We need to tame down risk. In other words, we don't need to be losing money. We need to make sure we can't lose money in the future. We need growth. We need protection. We need to protect our money. We need to protect the money that has that we have as growth and their principal, and then we need to have lifetime income and we need to know what that income is going to be every single month for the rest of our lives. And we didn't make sure our spouses also covered with this. So we when we designed a total retirement plan, we design income inside that growth protection income type accounts for husband and wife that never goes away as long as one of them is here, E. Said that correctly, Even if your balance goes to zero, you will continue to get that lifetime income. And you know it's no fun to watch your balance when it's going down. But if you know that even if it goes to zero, you're still gonna get the income. Makes a lot more fun to watch that balance. So that's why we need that total retirement plan. We need to know the income component we need to deal with the planning team who understands lifetime income and how important lifetime income is for you and your family. Now Social Security is gonna be here. I think it'll be here for the rest of our lives. It may be reduced in the future, but we don't need to be depending on Social Security to have our lifetime income Anyway. We need toe for fun things. In retirement, we need a lot more than Social Security. So we designed the core and explore plan inside the total retirement plan for a reason. We need to make sure that your money is always working for you. We need to make sure your money could never go away. And we need to make sure that money will give you a lifetime income whenever you deserve it. When you decide to activate that income, it starts coming for the rest of your life. S O. T. To find out more about this. Cynthia, I think a lot of people are curious because they hear different things from different planners. And and what we hear a lot of times is people say, Well, my planner said he could do that, too. My question is, if you're planner could do that, why haven't they done it? Why? Why do you have to watch this show to find out? There's a lot more going on the financial world that could benefit you that you don't know about. So when you hear me too, I would say me gone, because if the person doesn't know enough to bring you the information. Why would you trust them for future information? That's that's my opinion. I mean, you could continue to watch this show, but the best thing is to watch the show and take action, making sure that you are in the right place for the rest of your life. And we do that every single day and we'll do it for you all. You see the number on the screen, all you do is call it and we wave our planning fee, folks, which could be over $1000. We waive that for up to three meetings with you that begin with. And then once you become a quiet every meetings, free forever, absolutely way help people monitor their 41 case to making sure that money is in the right place. Because that's the big question we get is Well, Coach, I've got 30 options here with about four. Okay. How do I know which one to take? My buddy over here is doing this. My buddy over there is doing that. Should I do a combination? No. You need to do your own plans. People copying other people It's not the best thing. How do you know they're doing the right thing? So let's analyze where you are. Let's analyze where you wanna go, and that was designed. A plan to get you to where you wanna go. We do that every single day. We'll do it for you. And I love that. It's a living, breathing plan Changes throughout the years. No matter what's happening in someone's life, you're able to adjust that you don't want your plan and cement. You don't want it locked in. You want to be able to make changes, have inter portability. We call it. Make sure you have that the proper plan. If things change in life, your plan could change with you. It's very important. This is the perfect time for us to open up the phone lines. Pete, what do you think? I think that everyone needs to call since I think I would call right now because 22 step Total retirement plan. We're gonna help you identify financial termites, risks, fees, expenses you don't need in your plan you shouldn't have in your plan. Your broker may be making a lot of money because it's in your plan. Whose retirement funding? Yours or your broker's? I said you should be refunding yours exclusively. We also identify unidentified financial objects UFOs and eliminate them. They don't need to be in your plan. Many times will help you understand exactly where you are. More importantly, Cynthia, if you want the next 20 people, we will design a total retirement plan that is customized just for you and your family to get you where you need to be. Unbelievable. Offer that you're giving the viewers today to the viewing audience at home. The phone lines are now open. That number to call is right on your screen. Don't miss this opportunity to plan your perfect stress. Free retirement. Coach Pete has theano. Sirs for you again. All you have to do is pick up the phone and call. We have to take a very short commercial break. When we come back, I'm gonna have more viewer questions for Coach Pete. You're not gonna wanna miss his answers. Please stay tuned. This is Joe. Joe has a steady job. Ah, house in the family. But he doesn't know his retirement plan sucks. Really. He's paying high brokerage fees and his retirement savings is not safe or protected. Joe might be screwed, but he doesn't have to be. He can connect with a local trusted advisor and find out how to develop a personalized total retirement income plan to live out that retirement. We all dream about Coast Coach financial, which can be being coach coach. Welcome back to Financial Safari TV. My name is Cynthia DeFazio. I'm joined today by coach Pete Dorota, otherwise known and as better known as the People's Choice. I love your jingle. Let's talk a little bit about that coach Jingle Coach e don't want to sing it, but it is so fun we have. That's the video version of We have an audio version of plays on our national radio show, and every now and then stations get called saying Stop playing a jingle e it z fun. It's It's a group called the Amoebas Okay, and they needed some money to fund an album. They do Children's albums on DSO. They said, if you give us like 1000 bucks to help us with, this album will do a jingle for you. So so that's pretty good deal. So they did it for me The amoeba is really cool band, and what I did is I said, Hey, I'm I just gave us some information. I'm Coach Pete and I like to put plans together. Well, they went within a radio show and I didn't tell him anything else I didn't give him because I would be able to come up with that. They came up with the jingle themselves. That's fantastic, pretty original, and it does not leave your head. They call that a earworm when it sticks in your head. It's a ear worm that's staying there. Just come out of nowhere. You'll start here. I love it. I love it. I'm walking around the house. E. I want you to know that. So our next question I love this one. This is a great question, says Coach Pete. I have a question for you. I've heard financial folks refer to something called the Power of Compounding. Can you explain this, please? Albert Einstein called compounding one of the eight wonders of the world compounding interest so it could be the work for you or against you. How does it work against you? Well, if you ever had a credit card which I did that in college. A credit card that you couldn't pay the total balance off and the interest rate was 29% compound in upon itself every month. That's bad. So if you have compounding interest on your side, it's good. Let me give you a little story about two brothers. Sorry, there's two brothers twins, and at age 15, 1 of the Twins decides to start saving $100 a month. Very smart. He saves $100 a month. Let's just say 6% interest has to be in. The next one is gonna be six to so 6% interest. $100 a month for the for age 15 to 22. So seven years. Then he decides to stop. I don't know why we'll talk about that in a minute. The other brother didn't start. He sees his other brother's stop, and he says, Well, I guess I need to start. So he starts at age 20 to start saving $100 a month again, the same interest rates because interest rates really don't matter on this, and he goes all the way. Age 65. So 22 to 65 30 some years. 40 some years he's been saving 22. Yeah, 43 years. The other guy only saved for seven years. When he reached age 65. They compared statements. The brother, who started at age 15 and stopped at 22 still had more money than the brother had started at 22 saved all the way to 65. Really? How'd that happen? Compound interest. The sooner you could start saving, the more you have. So I still need to talk to that brother who started 15 and stopped at 22. He never should have stopped. But that just shows you the sooner we heard this phrase before, the sooner the better. There you go. Compound interest will help you or hurt you depending on what you dio. And so the rules were thrown out of the book. If you are in the stock market, because you may have a gigantic return one year and lose it all the next. But we're talking about the tortoise and the hare. This is the tortoise kind of accounts where you're getting a little bit every single year, but it's building upon itself. We call these green accounts because then we have lifetime income, and with this big balance, we could build up. And that gives you that lifetime income, your own personal pension. So a lot of people have 41 k balances that you have no idea what kind of income they get from the lump sum balances. Think about it. You look at your 41 K $500,000 in there. What does that mean for your retirement Means you got 500,000 bucks. But how do you know what kind of income you're gonna get there? And one of the tax is gonna be that kind of stuff. So we spend a lot of time but folks showing them how to transition from their 41 K account into their own personal pension, which gives you lifetime income and a lot more security and surety, knowing you can approach retirement, knowing what your income is gonna be. Sure. And so a lot of people were curious about this. What kind of income can I get from this lump sum? What can I get from that? If I leave it alone five years, what kind of income would it be if I leave it alone 10 years when I activated what kind of income? Why get? We will tell in detail in writing what kind of income you get based on your balances. And so people say, Well, I'm still working for my company. I don't want to touch my 41 k. I don't want my boss Get mad at me, Boss doesn't care if you're 59 a half and over you qualify. Probably. Most companies offer this called in service distribution, where you can sweep some of your money out of the 41 K away from the risk away from the fees. Whatever's going on there, tax free into your very own super i r A. And then know what kind of income you could get from that in the future. So it's your own income account, your own pension account. The 41 K is great, but it basically drops the ball. I'm telling you what kind of income you could get. That's why we save we save in the 41 K because we need a lifetime income in the future. We specialize in that I'm a retirement income certified professional R i C p. It's from the American College, and what it does is I'm an income specialist. I could tell you what kind of income you could get from any kind of melts you have. I could tell you what that income will be different times of your life. Like, let's say you're 55 now and you want to retire at 65 you've got a $700,000 balance in your 41 K, and you wanna know what kind of income you get in 10 years from that, I could tell you that five years from that, maybe you could retire early if you know what kind of income you have. So this is about the surety, the peace of mind that but everybody needs taking the Warri out of planning and living in retirement. Cynthia, the next 20 people call will do for you your very own total retirement plan. 22 steps. Get a golden ticket for that. It's over $1000 value. Our strategies work best for those of you with over 200,000 safe retirement and our strategies work really, really good for those with a million dollars safe retirement board But as long as you have that $200,000 folks, we will be working for you and making sure that you understand exactly what's going on in your plan will burn that midnight oil to make sure that you know exactly what's going on in your portfolio. Your plan. I've got a three books said. I've got a box set on the 41 K as well. We've got a compound interest sheet that we just talked about, showing you how bad fees can affect your portfolio to. And I don't care what account you're in many times 41 k wise. There's a lot more fees and you don't know about it. Could be 22 different fees. We could help you examine that. But more importantly, give that peace of mind and surety as you approach retirement. And we have all the way through retirement knowing that you're in good hands. Absolutely. And that's the most important component you just said, knowing that you're in good hands because no one wants to wake up in the middle of the night. Nervous about retirement? No, ma'am. So, Coach Pete, thank you for another amazing show this week I can't wait to see you back here again next week. Thank you for taking the time to come in. And my pleasure to the viewers at home. Thank you for spending time with us again this week. The number to call is on your screen. We know you have questions for Coach Pete, so please keep those questions coming. Coach Pete is here to answer those for you again. Thank you for watching. Please call the number on your screen. Be safe. Be happy, be Blust. And we look forward to seeing you back here next week. Retire comfortably.