Ep 19: Financial planning for a funeral (Financial Safari)
When planning for retirement, people want to make sure they don't outlive their money. Learn how to design, build, and protect an optimized retirement portfolio that won't run out on you.
This week's episode is brought to you by Capital Financial Advisory Group for all your retirement needs. Well, hello, folks. It's Coach Pete here with Mr Phil Gramm, and we have a very exciting financial safari show for you. This week we're gonna talk about how to design, build and protect that optimized portfolio, the one that will put you in control all the way through retirement. Phil, I think this is gonna be a very good show. We're gonna tease the people a little bit right now about it. But folks, when we come back, it's gonna be very, very enlightening. But But, Phil, what's what's the most important part about retirement? Is income important? Well, I think it's a little bit different for everybody. But what I hear most consistently is that people are scared of outliving their money. At the end of the day, if you run out of money you're gonna do, they're in trouble. What? We talk about maximizing your gains, minimizing your taxes and optimizing your retirement income, getting that flow of income all the way through retirement. We call it income planning on my radio show each week, I call it a financial Philip having money each and every year that's gonna replace itself so that much more this week on the financial safari broadcasting from coast to coast. It's the financial safari with your host coach, Pete the Ruta. 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 and again, folks, Coach Pete here with Mr Phil Gramm and Phil is one of my great friends in the financial arena. I've known him for years. Phil, we've had a great relationship. Talking about the financial world changes every day. That's true. E was back in the financial lab, and we have this something called the 15 minute Retirement Planner. We're gonna talk about how people can get a copy of this. It's 18 pages long, folks, but it's a lot of relevant information here that will get you thinking about what goes into a true and verifiable and successful retirement plan. Feel very important toe to make sure that folks watching their no, all the steps that go into building that perfect retirement plan well, and it's so hard. If you don't know what questions to ask, how do you even start thinking about it? And that's why your material is so great, because it really helps people start getting their thoughts down and start working through some of those issues. We need to think about risk differently as we get older, and I say there's something called Financial Red Zone. That's when we're above 50 years old Now I'm 54. I'm in that red zone. I've never been asked you hold you. Are you younger than May your in your forties? I think Right, So forties, both forties. Well, you got time. I don't have time. It doesn't work that way. But a lot of people out there watching are older than I am, and folks maybe haven't thought about this. But again, it's time to design a perfect plan for you if we need to build it after we design it. And then the most important part, you could build a house. You could design a house, build a house on the beach, but if you don't protect it, you're in trouble and your financial houses valuable like back in the days of medieval days, game of Throne days. They designed and built castles and what they put around the castles, big walls and big moats filled, filled with alligators to make sure to protect what was inside. Phil. What's different from the retirement world than Game of Throne World? It's really not. You have to protect your money because, especially once you get to retirement, you're not making more money. You're not working, adding to your retirement. Once you kind of lock in that number and you start taking money out, you better have some kind of protection around it because you can't afford toe lose money, at least from an income perspective. It's important, I mean, and then, speaking of losing money, if you don't do the right things when you're here when you pass away, your next to Ken might even not even know where you put things or what needs to happen. And so I designed this book years ago called The Little Green Book of Life, and folks, anyone who calls today could get a copy. This 108 pages long. It's an interactive book. It's it asked you questions, but you feel in the answers all the things you never think about until it's too late. Many times, all the things you know, I've been to funerals before. I've heard people say I wish he would have told me or I wish you would have told us where things were or line things up for us or or showing us where things were. This is a way for you to have all those wish I would have taking care of. So now you'll say, I'm glad he did Are glad she did. If you want a copy of this for you, if I want a copy, an extra copy for a mother in law's farther laws Mothers, fathers, grandparents Make sure to give us a call because this is a very valuable book. It's $14.95 if you buy it on Amazon. But if you since you're watching today and you if you're nice to us when you call, just be nice and polite to the staff, so you want a copy. The book. That's all you have to do, and the number will be on the screen for you to call. But Phil, it's just important, though, and you have something you've taken this even a step further. People are passing away and they can't get the next of kin cannot get ahold of any money at all, no matter how much is written in this book, because what do you need when you pass away? And so we created something called a beneficiary liquidity plan because obviously, having your affairs in order and what your family needs to do when you pass away is very important. But the piece that most people leave out is there's no money available immediately for the family to use, and million dollar portfolio doesn't matter. It's not accessible because, well, number one, it's not your fault. You need a death certificate and and it's just a delay. You said there's a covert delay going on, right? I mean, historically, it was over 10 business days, which is more than two weeks a long time. Then you gotta process the claim. It was easily 30 days. Pre co vid now in co vid some states air taken 30 45 60 days scary to get the death certificate, and the day you die is already the most stressful day, possibly in your family's life and all this does by not having access to money is gonna cause additional stress, possibly arguments and disagreements amongst family members. It might even cause short term or long term financial hardship. And the sad part that we always saw coach was that all these families had planned on leaving money. They had earmarked money and they thought it was gonna be easy. But they weren't here to fix it, and their families left holding the bag. And so, by having a beneficial liquidity plant, all it is is taking the money that you already wanted your family tohave and simply moving it from your left pocket to your right pocket. And we're making sure that on one of the worst days of your family's life, the day you pass away, they have access to the money when they need it most. So this is a way to make sure that, like if you can't get a hold of the money for the funeral, funeral is not gonna happen, is it? So this is a way for people to east have funeral taken care of for expenses. For those when you're talking about Yeah, well flying family understood for the funeral or all that kind of stuff. But I mean, when we look at it, how many days do we need to plan on not having money and and then we can arrive on that. Then we should have that kind of money put aside and the liquidity situation. Yeah, the goal is to put the minimum in in your office is really good at helping structure that for people they don't make any premium payments. It's money that you already have that were simply setting aside properly. And then it's gonna look like a savings account at the bank. It's gonna turn minimal interest, but then they can. But it's available even without a death certificate passed away. So that's that's amazing right there. And that's important, because again, we've seen people with multimillion dollar portfolios that it's totally locked away when someone passed away and I know what you're thinking. You're gonna say, Well, Phil, what about my life insurance? Well, that requires a desk of it. What about my my bank account set up with T o d transfer on death? Well, that avoids probate coach, but that financial institution is still gonna require a death certificate. What about my revokable trust that requires a death certificate to put the successor. Everything requires that everything requires a except for the beneficiary liquidity. Well, that makes a lot of sense. And so if you're interested in finding out more about that, which you should be, I mean, talk about we don't want to leave. That's why people buy life insurance is because they don't want to either family in a bad way. But in doing so, if you don't have, if it's not liquid and you don't have a death certificate is not liquid, you don't have money. So we need to have a way to have money to pay for the things we're gonna need for what would you say? 2 to 3 months, usually 30 to 45 days. And that's one of the reasons we created the survey coach. So they reach out to your office. They could get our little five minute survey that'll help get your thoughts going on. What exactly should that beneficiary liquidity plan look like? Or does it make sense for you and your family? Definitely. Folks call the number you see on the screen what we've put together a plan and Everyone who calls again gets a copy of the good old Green Book of Life. We'll be right back after this. Our podcast Financial Pizza brings you our favorite radio segments of the week with delivering slices of interviews with financial advisors from around the country, along with special reports on a variety of retirement topics all brought to you hot, fresh and in 30 minutes or less. Listen on your favorite podcasting app for visit financial pizza dot com about Yeah, yeah. So, folks, I've got a twist here. These are my notes. This is my show Notes. 38 different topics I want to talk about today. Feel you know how I am. We'll talk about two of them were not getting throughout. 38. Let's talk about one of the things we're talking here on the break and, uh, future proofing your portfolio, making sure that your money is gonna be there all the way through your wife. And in doing so, I really hate to use the word portfolio because when people hear that word portfolio, they think stock market or manage money. But to me, a portfolio is everything. Silver, gold, precious metals, income, lifetime income annuity CDs, life insurance stocks, bonds, mutual fund managed accounts. Everything you can think of is a portfolio to me. Okay, we need to get away from thinking about portfolios. Just stock market, because stock market is very fun when the market goes up. It's very tedious and very anger inducing when the market goes down. So let's talk about future proofing, and then you want to talk about Let's talk about first what a sequence of return risk is and how people can eliminate or try to eliminate sequence of returns out of their retirement worries. Well, I've always had an issue fundamentally with how the financial services industry talks about average returns, because to get to an average return, you're adding pluses and minuses and dividing by how many years, that period of time waas and have a look at certain dates, specifically the number right? Yeah, 6%. 7%. 8% we average Whatever. Yeah, the problem is, when you are in retirement and you're withdrawing money specifically from something that could lose value, which stocks real estate, even real estate sometimes, right? Yeah, negative returns early on that income withdrawal are catastrophic because I call it double dipping. You're taking your withdraw for your income than the remaining companies were. Portfolio goes down because of market fluctuations. Next year, you make another withdraw now on a lower overall portfolio value, which means it's the higher percentage withdrawal. And if the market comes back, it's coming back up on a much smaller account value. And then it's just a cycle you can't ever make up for early losses. Which is why I've been so adamant for 25 years that your income needs to be guaranteed. Now does, unless your risk tolerance is off the charts and you just don't care. But you still have to have income, right? And you gotta have a guarantee that just builds more of a peace of mind, Knowing that it doesn't matter what happens in the market, your income checks going to arrive in the mail box. I call it a financial Philip every single month or year, depending how you set it up all the way through retirement. It's like getting a paycheck that you know is coming in, and that frees up other monies for you to do other things with inside that overall investment strategy that you create coach to go along with the sequence of return to just to show you what risk really means to you. If somebody loses 50% which that's happened and it's gonna happen again to some people, especially if you're overweighted in one stock or something. If you lose 50% in that stock or then investment, how much you have to gain just to get back to where you started? I know the answer. Yeah, 100%. 100%. So which is it Blows your mind? Well, wait, I only lost 50%. Why do we have to earn 100% and and the chance of earning 100% of slim to none many times, right? There are some that bounce right back, But I mean, can you imagine even Cisco, the technology company? I don't think they're anywhere near back to where they used to be. In 2000, they went way down. They hovered around the 25 to 35 forever. They're back up a little bit now, but it's still not where they used to be 20 years later, and so now you're losing time and money. If you would've had other places to generating income for you. You don't have that right now. So sequence of return gets a lot of people in trouble. If they're not, if they're not careful now, Future proofing our retirement means we can know with certainty today what your retirement income will be 2030 40 even 50 or 60 years from now, believe it or not. And we can show you the guarantee minimum amount of income you'll get. We can't show you the maximum it could be. It could be mawr. But here's what I love about our plans. We will show you the worst case scenario. Chances are it's not gonna be the worst case scenario, but even if it is, we already told you what that is. So I'd like to come back with you in every month or every year in retirement, and I've got some got some bad news for you. What I told you was gonna be your income retirement. It's not gonna be that it's gonna b'more bad news because Coach Pete lie to you. He told you you're gonna have less now. You could have, um or is that a good way? That's a good way, E plan for the worst and hope for the best. But this is e hate to say Expect the best, but expect it not to be the worst but the beauty this is if we could make the plan work with the worst case scenario you get mawr, You're not gonna complain Or if you do, if you don't want the money, got some good charities I could recommend for you. But how do we do this? Well, we have two. There's two parts of a real plan riel portfolio, field core and explore the core part of your money is the part you can't lose. It's gonna grow. It's gonna have growth protection and lifetime income, Matt. And matter of fact, if you call and say you wanna a growth protection GP, I plan, we're gonna give you a free T shirts his growth protection income dot com on it. You got yours to growth protection income dot com. You can go to the website to and explains in more detail, but math is really money. I told my daughter that years ago, when she didn't want to study math and I said, Well, Daddy wants and she was like six years old. Daddy wants to know if you like, uh, watch. You have? Yeah. Daddy wants to know if you like the yard. You have the dogs, whatever. She thought of it. Daddy, I said, Well, those I'll take money And she said, Oh, it does. Yeah. And money You need to know math to have money. And so, so Shy said, Math is money and she loves that. So it's gonna be a title of book one day. Maybe she'll write it. She's 16 now. All right, so we look at the explore part of your portfolio is we could take some risk, but we don't recommend explore until after you have the core established. And here's why. If you have a core amount of income or core amount of money that's growing, it's never gonna go away because of the market. It's a whole lot easier to take risk with the leftover money. Actually, mawr missed more risk, and you ever imagined because even if you lose money on the the growth part, it's not growing. If he was money but that risk part, you have time because you don't need the money to leave that money alone and let it recover, eliminates the sequence of eternal Doug takes it out, and so we need to eliminate and a lot of people. I mean, Dr Wade Foul has talked to this. He's from American colleges where the smartest guys you better before he talks about sequence of return risk until he's blue in the face and even advisors don't even listen to him or don't really want to pay attention because everyone thinks that the stocks or bonds or mutual funds or real estate there in is gonna be better than everyone else's. But when it comes down to it, we're all in the same boat, and the secret is if that boat ever leaks and starts to sink, you don't wanna be dependent on it. You want your life boats and your lifeboats are the core part of the plan. Your life boats are those that the boat that will never think not the Titanic, but a better boat on the Titanic. But we need to make sure that we have no risk whatsoever, and that's where the core comes, and it really does take the warrior out of living in retirement. If you get a true income plan built into your total plan, and and that's why we try to future proof your portfolio. Look at what you want to do in the future. Make sure you have protected money protected from inflation protected from risk and taxation. To make sure that you get that income all the way through retirements, you could do what you want to do because that's what retirements all about. Well, what's so amazing, Coach, what What you've built is you have a process that's consistent with every client that walks people through because everybody's needs are different and your process helps people visualize. You get those 8 ft 10 ft board's upstairs that it's all crystal clear with customers. See exactly what's going on. Find out what you wanna do, what your situation is now, and we will put together a second opinion or first opinion. We'll do it. A Coach Pete double check for you If you call right now, take advantage of meeting with a professional who will create a one page financial review that will indicate if you're in need of a full blown financial plan. Take the mystery out of financial planning by mapping out where you are now. 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 Pete Dorota, 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 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 in 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 of consultation. Well, folks, welcome back into the financial safari, Phil you know, it's been a fascinating show. I say that every week, by the way. But I thought to be a good time today. Since I have you in here and you're you're from Charlotte. I'm I'm here in Raleigh, but, uh, it's a pleasure every time you come down. I appreciate the trip, By the way. I thought we talked about Dad's a physics professor Bennett, physics professor for 43 years at University of North Carolina, Pembroke. That's a long time, by the way, 43 years teaching it. Keep the class. But I try to make that happy one time because Dad always wanted me to be a scientist, and I'm not a scientist. But I said, You know what? If I invented something called financial physics and had a whole process about what goes up, must come down, you know, physics, all the laws of physics, a time in the financial laws, and one of the main things I think that people watching here will benefit by is understanding what financial gravity is Now. We have gravity here on earth, and it's always pulling us down, which is a good thing because we didn't pull us down would float away. And Dad said a long time ago I was complaining because my Little League baseball team we had a game postponed in the afternoon. It seemed like it had thunderstorm every afternoon, right in the back, in the day, in the summer, time back in the back, in the 18 seventies eighties. And he would say, Pita, if it wasn't for thunderstorms, we would all float away. I said, What do you mean? He said the static electricity would make us all this shoot up like Rockettes. So the thunderstorm is a good thing to keep us all crowded. But in the market they pull downs. The financial termites. I call them risk fees, commissions. They're all weighing you down. Sort of like when you watch these when we're not gonna have it. This year we live. But they're gonna have the parade, the Macy's Day parade, where they have these gigantic floats. And they have what about 30 or 40 people all with strings holding it down? Well, that's what's happening to a lot of your portfolios is you have bad strings attached to your portfolios and they're being pulled down. Risk fees and commissions and we need to understand the proper design of money and how. Thio find out what I call if you have any UFOs. Unidentified financial objects in your portfolio. One of things. I've seen a lot where people don't understand. It's unidentified. So what is what is this doing in your portfolio? I don't know what brokers said it was good real estate investment trust. I've I've really seen a lot of those not really good lately. And if you have non traded real estate investment, trust means you're stuck with it because you can't trade it. That's what non traded, because I don't know what this non traded thing means. It means you're stuck with its the Hotel California of the financial world. You can get in any time you want, but it's hard to get out. So let's talk about just a general. We utilize a lot of a specialized income annuities and income planning thio to have that growth protection, income type environment all the way through retirement, where you don't have worries of if the market's gonna take your money away. And you said you had a success story about or just in general, what annuities are. Well, I only have one client. Yeah, and that's my father. It's a good quiet and we did a guaranteed income playing for him. Very, very similar to what What you guys do here and what my favorite phone call is when the market is down 10 2030% He actually calls me and says thank you because he didn't lose any money. And he knows he's gonna get his paycheck every single month. So he doesn't call you when it's up market. So he calls me when the market drops somebody, or you will say, I don't even watch the tickers anymore. I don't care if it's upward down, because I know I'm getting my paycheck every month. So this helps him by my three things. Maximize retirement income, minimizes ongoing taxation, pay tax on the interest. Each year he pays tax when he takes money out of the growth on, then he's optimized his income for life because he has a lifetime income and we actually did joint income because he wanted income on my mother and him. He wanted it increasing income, and he wanted to make sure that it would never go down for either one of their lifetimes. See, that's important, because if you have an IRA account before one K 43 b tsp those air called Individual retirement accounts the big word there being individual to me, the big word being retirement. But if you back in the old days, Phil, you could not have a spouse on the correct. It was an individual account. So you have basically we could pass away and the balance, whatever. Go on and try to get the same income for your spouse. It probably never happened this way. You can make sure that you and your spouse both get the same check regardless of if you're here or not, that's that's very important. To get a lifetime income check that never goes away could increase right and some of the newer ones. Now we'll let you double that income for up to five years toe to pay for a long term care stay or help pay for long term. Scarcely. It's not long term care insurance. I don't want anyone that mistake that, but but it is doubling your income if you extra money. Now here's the magic of this, and it's what a lot of people don't think about, but if the market goes down, your money doesn't go down. We already established that if you have a game this year, and sometimes it can returns could be pretty good, cause that ties you get to share in the game of the market on the upside. So once you get the game that walks in so you're not going back down, But here's the beauty of it. You start taking income out. You have a long time. You keep taking income out. Well, eventually, the balance is gonna go to zero. If the balance of this annuity that you're talking about your dad has goes to zero and he's still here and your mom still here, does he still get the check? Yes. He still gets a check. It can still increase. And it still goes for both of their lives. So that s for him. It checked every box coach where he was like, I want it for both mom and his life. I wanted increasing. I want it to where it could never go down. And if for some reason, the account gets depleted because we spend it all I wanted to continue even if we live to 120 years old. So the balance goes to zero. He still here? She's still here. He still gets a check. He passed away. Now, back in the old days, if you didn't have the right account, the balance zero Mom would get Mama, get zero. And that's vitally important to know that you have that peace of mind again. You future proof Your portfolio eliminated a lot of financial termites. You've taken financial gravity of equation now because you've got increasing income and you're walking your gains in that never goes back down. Gravity is always pulling us back down. We don't need gravity in our lifetime income accounts. Too many people chase Raider returns. Yeah, when what's most important to me from a planning perspective is, how much money do we put in somebody's pocket? And then how long does it last? How does it work? More so than the actual rate of return is money in the pockets. It's important. So So if this is I mean, I think everyone watching is wondering. Either retired now or you're one about retirement. You're wondering what that lump sum you have is gonna be able to translate to. Many of you haven't had a true total retirement plan done. So if you are with the next 20 people call, we'll do a complete retirement review. I call it a Coach Pete, double check. We're gonna make sure that your current plan or your current planner is doing what they're supposed to be doing for you. We are fiduciary planning firm folks. That means we have to put your needs above our needs. I've been in this industry for 28 a half years. This financial arena is a shark tank. And I've never had a complaint for reason because we always do what we say and say we do. And we we make sure to educate first to make sure you understand fully number one where you are right now. But more importantly, where you are going all the way through your life, many of you have that plan that you got from a plan or a long time ago. They said everything was gonna be fine, but you haven't had a review. So how do you know if you're gonna be fine or not? Keep in mind if a plane takes off from Boston on its way to San Francisco, and it's off by just a couple of degrees. You could end up in L. A. That's a long walk from L. A. To San Francisco, and same thing with retirement planning. Just because someone told you something years ago or use, um uh, Assumpta of returns and the returns might not be what they thought. So you're gonna have lower balance. What would be the best time feel to find out that things are off course now or when you're when it's too late to fix yesterday. But so today it's very important, right? All right. So one of things I forgot to talk about today we didn't have time. We have the 401 k modern rollover guide. This is Survival Guide. If you have a 41 k teaching you all the different things that go on your 41 K if you're over 59 a half, there are ways where you can roll that 41 k tax free many times in your own individual IRA taking advantage of all the things that Phil was talking about like you did for his father having that true time capsule account having that true lifetime income that you can't get from the 41 K 41 case through a great job of helping you build me, do a horrible job of telling you now that you built it, what can you get from it and what can be guaranteed to get from it from the rest of your life? Lifetime income folks. That's the most important part. And the final words. I agree. 41 K is a great accumulation tool, but it takes a different set of tools it does for income and D accumulation. So to summarize, today, if you call right now, you'll get a copy of the 41 K Survival Guide box set. We've got a DVD workbook. Guidebooks. This is a big workbooks. Worksheets. We've also got the 15 minute retirement plan. It will give you folks. This is valuable to just help educate you a little bit. Enlighten you on what's going on in your your own financial portfolio and one of things we didn't get it, i e. I always have big plans for the show, but we've got the Medicare cheat sheet. If you're filing for Medicare and want to know the real ways to file with the best ways we've taken 300 pages from the government whittled it down to 40 pages in a like with no version and then the Little Green Book of Life. Folks, this is a valuable book for you and your family. You you basically write down with a question. Answer tells you what to do there. And my book, The Seven Baby Steps. That's my best seller. You could buy it on Amazon. You could go to Pete on demand. Com to see these. But most importantly, give us a call. We'll get together with you and give your own golden ticket for your own review. Uh huh. Right.