Ep 37: Retirement readiness toolkit (Financial Safari)
Not every financial planner has your best interest in mind. Learn what to look out for and what questions to ask in this episode.
this week's episode is brought to you by capital financial advisory group for all your retirement needs. Everybody is Coach Pete Greg buried over there this week on the financial safari, we're going to continue to delve into my new book, the book on retirement, we've got four more questions to go over on a retirement readiness toolkit and questions there and we're also going to cover a chapter in the book called financial termites. Again, financial termites or risk fees, commissions, inflation taxation, some of them can be eliminated, some can be tamed down. We need to figure out what's best for us in our retirement plan that much more this week on the phone broadcasting from coast to coast, it's the financial Safari with your host coach Pete Barracuda, 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, Bell Greg another week here folks, Coach Pete Greg burying over their Financial advisor, investment advisor, fiduciary planning team, both of us on the team. The team is more than just me and Greg but me and Gregor here on tv. So Greg, this is the team. Today, we have to Go with the cards we dealt guilt. Alright, so last week on the show, we talked about my book, the book on retirement. Not quite out yet, folks, here it is, here's the manuscript of it, you can say I saw it for, it was a real good book for was out on the bestseller list. But the book on retirement broke down a lot of different chapters here and a lot of different steps inside our total retirement plan which is 22 steps. So the book is 24 chapters because we've got to talk about more than just a total retirement plan in there. So one of things we talked about though was we started talking last week and I recommended folks get a pencil and paper a pen and paper out because these are very important questions to ask yourself and if you don't have a pen and paper or can't do it right now you can always go to financial safari dot com and re watch the T. V. Show. Also some of our radio shows on there and podcast and a lot of great information on financial safari dot com. I recommend everyone go there. And another website folks while you're listening to websites is pete my name PTE on demand dot com. Pete on demand dot com. Greg what will they find if they go there, Everything, everything, audiobooks, uh white papers, research papers, some of my manuscripts of books, we have our box sets, their videos, dvds, workbooks guides, podcasting, you name it, I think you could probably spend a year. It's like the netflix retirement planning and we give it a while away at no cost or obligation. Unlike a lot of the sites where you have to go through a whole bunch of hoops and then they say they're gonna email you something, you never get it, but they've got your information now. So we got you have it right away and it's up to you. It's up to you to benefit from that if you want to or not. Again, pete on demand dot com and to watch the show again, it's financial safari dot com now. Great, Let's get into it. The book was fun to write because I believe I'm passionate about everything in here. And when we break down a retirement plan, it's more than just saying, what do you have safe retirement, give it to us. We'll do better. It's what a lot of guys say you better. Well, how are you gonna do better? Well, we're gonna put it in a mix of mutual funds and E. T. F. S and stocks. How is that going to benefit me? Well, it's gonna, I'll perform and most everything out there. This is another person talking, not immediately. Uh how are you gonna get retirement income off that? Well, you, as long as the market does well, you'll you'll be able to take money out every year and everything will be fine until it isn't because that's called the Monte Carlo simulation kind of planning and you have about and planners have used traditionally for years because you have about a 92% chance of your plan working. Like they say the problem, I have Greg, I don't like those odds is the 8% that it won't work because I meet with folks. And when I meet with folks, I want 100% surety that they're going to get the plan and it's going to work. Like we say it's going to work. We don't want any guesses or gimmicks, We want science and math and real research backing up our plan and we do that every single day using the same strategies that they did to plan the Harvard endowment back in the day. You know, coach, I'm seeing a family up in new Bern on Wednesday morning and my initial, my initial meeting with him was over the telephone and when I got done explaining everything about what we do, of course. First of all our initial meetings, I don't do much talking. I do all listening, listening is important. I mean you got two years, one mouth use those ratios. And and so we're then I started telling her what our process is and how it goes. And right now this, this woman taught economics on university level and uh econ professor and uh she said, I cannot tell you how much I appreciate the fact that I understood everything you said so many people, they talk over my head and I think they do that to confuse people and so what happens, it gives them that superiority that people have to look up to him. And it's almost like Stockholm syndrome. Greg, do you need to use any word over seven letters to explain the proper retirement plan? I don't know where over seven letters. I hear the same thing well, and a lot of times my wife and my brother are both attorneys and they try to throw big words around. So I looked it up. It's the same, it's the same thing as smaller word would have met. Exactly sounds better. Don't use big words sometimes. So yeah, be very careful on that. So, it comes down to this, What do you have? What do you need and what you have assigned in your portfolio to meet those needs when you're going to need them the most. And also what do you have assigned to to counteract any emergency situation that may come up where you need money. You weren't expected. We call that the unexpected situations and there's a lot of unexpected situations out there. The unforced situations are the worst where someone takes a retirement money and puts it in a place. Absolutely shouldn't put it in. Falls for some fancy brochures or gimmicks and loses all that money in football. They call that an unforced turnover. It's like when a guy is running with the ball, Anita's drops it and the other team gets it and runs the other way. We can't have fumbles in our retirement and we sure can't have them caused by an advisor and we can't cause them ourselves by being greedy or fearful? Those are the two emotions that wreck more retirement plans than anything is greed. All right. So what do you mean? Coach? Well you've got some money in the market and you start watching your market account is outperforming you're safe money account which it should when the market's going up. So you get greeting and you say Coach Pete and Greg say not too. But I'm gonna take my safe money and I'm gonna throw it into the market because the market is doing so well. Greg, have you ever been in a line at the supermarket? And the line you're in doesn't seem to be moving as fast so you jump into the other line. What happens next? And hopefully that goes quicker. But sometimes all of a sudden what happened price check on. I'll to what happens next is the line you went to stops and the other line starts exactly. And so same thing happens many times when we get greedy in the market we jump from the safe to the risk and the minute we do the market decides to go the other way and not a good way for us. And then you say well I guess I should take my money back and put it over there. Now you're putting less money back over to a safe place because you don't have as much money to have in a safe place anymore. Coach. I'm gonna take that market in Algeria bit further. Yeah. I go to the same grocery store every single time I like this grocery store and I know all the checkers. Which grocery store is it? It's Harris teeter, love Harris teeter in Pittsboro and it's a great guy and I know all the single checkers and I know which ones are the best ones, you know the fastest, the fastest ones. So that's why you want to, you want a good fast checker just like you want a good financial retirement plan, you know the fastest checker in the world. It's me when I do myself checking. But really I think they should give us a discount if we're if we're doing their work for but we get we get a time discount cause we don't have to wait in line. So I love the self checkers, but I really think we should get a discount for using a self check. I hear you, that's my opinion. All right. So if we're taking too much risk with our retirement money, nothing good is going to happen. Market doesn't go up forever even though we've been in a great bull market for at least 11 or 12 years now, it's been a great bull market. Unfortunately eventually something's going to change. My dad was a physics professor and he taught physics and one of the things what he always will remember him and there's a lot of physics in the financial world too. We have financial gravity, that's risk fees, commissions inflation taxation. Pulling your values down gravity like we have gravity here. If we didn't have gravity on earth would float away. Gravity is a good thing, but not too much of it. Not in the financial world is pulling you down and then dad would always say what goes up must come down again gravity. So we need to make sure we plan with the same theories in the financial world as the physicists used when they're trying to decide how to get a plane off the ground and keep the plane off the ground to the plane comes down to that glide path and land safely weren't supposed to. And there's things that happened coach in life that you don't plan for that affect one spot in life. But then it has ripple effect, ripple effects for instance, covid, horrible thing. But now the 6.5 a percent inflation we're looking at right now. Came from, from the whole covid because all that money was released. Well, government is just looking for an excuse to spend money. Let's just put it there Folks, let's do this. So let's protect your money. Let's make sure you get your very own total retirement plan. As long as you have at least 200,000 dedicated retirement call the number on your screen, there'll be no cost or obligation. We'll be right back. Do you know how much you're paying in fees or commissions with your current plan or advisor. What about unnecessary risk or future tax implications? Sit down with the fiduciary advisor who can help you understand important retirement concepts and so you can make the best decisions for yourself moving forward, we may even be able to answer questions you didn't even know needed to be asked. Well folks, welcome back into the financial safari. If you're just joining us, I'm Coach Pete de Rueda. I'm an investment advisor and fiduciary and ceo of a fiduciary planning firm, capital financial advisory group. You've got mr Greg barry in here with me. He handles are Raleigh and Wilmington office back and forth. You on the road warrior man. The Wilmington offices in landfall. Really nice place. Yeah. Uh nice restaurants around the office to its on Colbert Colbert road of Cobras dr Colbert Colbert drive drive. Lot of good restaurants around there. You're not too far from Wrightsville Beach where you can go and have a good seafood right on the Intercoastal waterway. I'm getting hungry. What do you like best about Wilmington nearly. It's interesting. Wilmington is a really beautiful area. First of all, what I what I love is that people are coming from all over the country. So I'm I'm hearing stories from people from all over and it's just, it's really a melting is becoming a melting pot? What's the furthest away the person? The furthest away that you've met? That's moved to Wilmington? Portland? Portland Oregon. Portland Oregon. Well, but they were happy to get Yeah. Used to be such a nice city to doesn't look too good on tv right now. It's a little rougher. Yeah, they're glad they're gone. All right. So things change. Something's disintegrate. Some things fall apart when you're not expecting to fall apart. My book, the book on retirement that we're talking about here, I have a chapter Chapter nine and this is a Chapter nine transcript right here. Financial termites I talk about now. Financial termites number one I hope I don't have termites at my house as far as I know, I don't have termites at my house. But when do people find out usually when they have termites in their house it's too late when they put their foot through the four. So because termites eat from the inside out unless you know what to look like look for and see what the tell tale signs look like. You won't know if you have termites or not until it's too late. So in the financial world it's almost the same thing. There's a lot of things inside your portfolio that could be hurting you not helping you and they could be eating away slowly and that could accelerate in the future if you're paying fees, your losses because of those fees accelerate every single year. Why do I say that Greg because it's bad enough they take a fee out. You didn't see your hidden fee many times, but that hidden fee they took out if it would have stayed in your portfolio number one, it would be there. So your portfolio balance would be more. No two. That would have earned interest the first year they stole it. Sorry, took it out. No stole it. Yeah. And then the interest that it earned would have earned interest the next year. But because they took the fee to begin with, you, not only don't have that money anymore, you don't have the interest it would have earned or the interest the interest would have earned you over and over again every single year. What's, what's a stunning illustration is in your 41 K survival guide. It's a real folks can get it right from our website, Coach Pete on demand and you have pete Pete on Japan when you have a table of what the fees costs over a number of years. It is a staggering staggering table right behind us. On the, On this counter right? There is a box set. It's before we have the 401K survival box set. We have seven financial blind spots, five keys to successful retirement, The Medicare cheat sheet box set And women and money. The box set. Each one of these box sets has a $300 value. It's got DVD, workbooks guidebooks and breakdown sheets in there. And also each one has a golden ticket Greg tell folks what the golden ticket is that gives folks a complimentary advisory. We're talking about termites. We talked about termites when you bought your house? What did they do? They inspected your house. Didn't give me a free box that we're talking. So when the golden ticket folks gives you that no cost total retirement plan Very, very important. Now let's get back to what are you talking about? So we are basically, the inspector comes in and searches your house for termites right up front and that's what we are worthy inspector. So that golden tickets going to buy a free inspection of your retirement plan? Well, More than that though folks, it will give you 22 step total retirement plan. If you don't have a retirement plan, you still call because you'll get your very own retirement plan done right the first time? Not the second time. So the important step here is to do something, not procrastinate. You have a procrastinate. Yes. Who doesn't, who doesn't everybody does. You know, they got the to do list and then we have piles on our desk of things. We know we need to get done. We don't do a lot of times and then they end up in a box and then we forget about them the same thing in the financial world. We put it aside mentally until something cattle catalysts out there wakes us up and says, gosh, why didn't we do that? Or why didn't we call Greg and Pete and take advantage of that. No cost total retirement planner, why don't we get that box set Greg? Let's do this. If you call right now, you'll get that box set, the 41 K. Survival Guide box set. If you have a 41 K. You really need to read what's in here. Not only does it break down your current situation, but it also shows you how you can keep track of the investments you're in inside the 41 K. And if they are the right ones for you in the time of your life, you're in right now and how to minimize risk while you maximize your retirement income. That's all in the 41 K. Survival box set, you can get that by calling the number you see on screen also has that golden ticket. Again, It is invaluable to take advantage of a total plan from a fiduciary planning team. Greg. A lot of people pay thousands of dollars for something like this. We just and we could do, we could, we are a licensed with the state to charge $300 an hour to put together a plan and it takes a lot more than one hour to put a plan together. It takes a lot more than one hour to analyze where we are right now. A lot more than one hour to build a plan and a lot more than one hour to tweak the plan to make sure it fits you? But we conclude all that in the golden ticket. So it doesn't cost you a penny. And we give a minimal value of $1000 more than that. It's worth a whole lot more. That if you could save thousands of dollars every single year in your retirement by taking advantage of this and making sure you have the right plan. It's already worth a lot more than $1,000. You know it's coach. I have, I have a family coming in on on on Monday from Raleigh. And our first our first meeting was just over over the telephone talking and and he asked me how much is this going to cost me a lot if you don't do it. And I said, well no it's it doesn't cost you anything. What I do is you know is you know on me, wow. He goes earlier, some guy told me he was going to cost him $10,000. I've heard of 1505 100. All I did was laugh well, you know why they charge a fee many times to trap you as their quiet because if you don't pay a fee, you don't feel an obligation to go see him again. If you pay a fee you're going to get you want to get in my opinion won't get a plan as good as well put together and it's gonna cost you because a lot of times they charge you to sell you something. It makes no sense. So how do we get paid? We get compensated by the financial institutions we represent very, very important. And if you do well, we do well as well. So we're in it with you, not against you. And so what do you mean against you? Coach people, if you have an advisor taking money out of european to put in his or her pocket to pay themselves commissions every year, then they're against you because they're causing you not have as much money in retirement, then you would have if you didn't use them and pay their fee every single year. I mean, it really makes sense when you think about it. So everyone is in this world to make money. Some people do it the fairway and some people do it the unfair way and hide it from you. It's important to have full disclosure on anything you do in life. And Greg, we've illuminated a lot of times for folks, we've shown you the hidden fees that your current advisors charging. You didn't know about. Just bad enough to pay a fee that you see. It's even worse to have one come out. You didn't see the classic one, the class that we talked about this in a previous episode. Their clients of ours right now from Wilmington, Nice, nice people. And they had a variable annuity and we're talking, I said, you know, generally you're probably paying 3.5% but let's give him a call just to be sure call it, calling the company, we're calling the company and we get on the phone and she says, well the first one is 1% that's m many, of course that's for mortality and expense. Money is mentality, expense, that's another fee that's hidden inside the variable annuity. If you want to get your very own total retirement plan and that box set, As long as you have 200,000 dedicated to retirement, this offers for you. All you have to do is call the number you see on the screen, we'll be right back after this. Right, Do you hear that? That's me enjoying my retirement traveling around the world to play golf where I want, when I want with whomever I want, even got some customized clubs because years ago I rolled over my ira with the help of a local trusted advisor contact us to get started today. This is a no cost no obligation retirement review to help educate and enlighten Yeah, Before our podcast, Financial Pizza brings you our favorite radio segments of the week 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 or visit Financial Pizza dot com. Welcome back into the financial Safari Greg. We're coming down to the final stretch right now. But last segment we started the conversation that we should have started because we didn't have enough time. But let's start right now, let's start from the beginning, variable annuities. Now, one thing I don't want to do and I hesitate hesitate many times to even talk about variable annuities because when we talk about variable annuities, I hate variable annuities. I'm not a believer in variable annuities. I've been licensed to offer variable annuities for 29 years. Guess how many variable annuities I've offered my clients because they fit 00 because there has not been one case where I thought a variable annuity made sense for a client. Zero folks. Whether it be the risk, the fees, the hidden expenses, all the kind of things did not make any sense to me. So why do I say that? Because there are some good annuities out there? They don't have the word variable in front of them. Annuities are like a big family. If you picture a family of like, say nine kids and one of the kids is always misbehaving. It's the worst kid in the world. He's always throwing rocks at cars and people's houses and eggs and all that kind of stuff. All eight of his other brothers and sisters are the most polite people you ever met. They'll do anything for you. They'll help old ladies across the street kind of people. Right? So the problem is that whole family name is tainted completely because that one bad son. That's a good looking. And so the variable annuity world, well the annuity world has that bad son, in my opinion, everything in my opinion, everything is your opinion. We're all entitled to opinion still these days and on in America, hopefully this will continue forever. But in my opinion, variable annuities don't make sense for anybody, but there are some annuities that don't have the word variable that do make sense. Do you agree or disagree? Absolutely, absolutely. You know, it's really important coaches, you know, of course, people always reach out and they go to the internet. If it's on the internet, it's gotta be true. Okay. And one thing that you have to be aware of is when you do a search, you looking for that little corner and you look for that one word add. And if there is that if that word add is there, you have to take that with a giant grain of salt, I'll give you one step further Greg. If you go to a major search engines, the first three or four pages usually are people paying to be their eggs, they're paying to have their their their ad or their or their posts on their website seen before other ones. And therefore it's pay to play. So where do I go when I go to search engine, I go to page 10 and co and then go I've worked my way up to page one. And so you see a lot more real educational resources. If you go deep into the search engines many times anyway, this isn't a lesson and I'm not Kim Commando and you aren't either. So we'll leave that Internet up to her. But folks, the most important thing to realize is that number one, you don't, you shouldn't go to the search engines for your financial information and financial planning is something that is very, very complex. And you're not gonna learn it overnight. It's sort of like trying to do your own surgery. You can start Googling No, you go to a real surge in the same thing with dentist, you go to a real dentist financial planning, you have to real financial planning team. Now we were talking about variable annuity. So we're gonna break down the faeces in there because a lot of you watching may have a variable annuity or may not even know what kind of annuity you have. That's why we do an annuity review. And to make sure and during the right place and if not get in the right place. And we do it annuity diversification special to where many of you might have more than one annuity. Let's make sure they're all working in the right way and they're and they're designed the right way and you and you understand what you really have. Now, let's talk about very, let's talk to the folks right now who do have a variable annuity and keep in mind, what we're getting ready to talk about is just for variable annuities, not for fixed or fixed index annuities because they don't have any or many of what we're getting ready to talk about the bad things here. So what's the worst things? Okay. So, we of course we talked about the money that we didn't talk about it yet. The first one is the mortality and expense, which we talked about, which and when I called this lady, yeah, we hit on it. We didn't finish it when I start my lady. Uh, she said yes, there's there's that one fee, but here's the thing coach, they won't dig down. They won't unearth that unless you ask them to. All right. So what is the mortality expense? It's a fee. That's a it's attached to your annuity and also the expenses of running that annuity. So m any mortality. And what's the stand for expense? So, mortality and expense, it should be M. E mortality and expense expenses. They really, because the expenses of the mortality has expense to tie to it as well. All right. So, what could those fees usually be around that? That one particular one I usually hear like, usually around 1%. Okay, a year per year. So 1% doesn't sound bad until you say, well, gosh, over 10 years, that's 10%. And then you've, again, like we've talked about, it's not just the interest you lost, it's the interest you would have gained if that money would have been there. So if you're if you're losing 1% if you could have kept that 1% in there, that 1% that would have stayed in there would have earned interest as well. And we had interest would earn interest. We call that compound interest that you're losing because they do the M. A. D. All right, so that's money, they throw that around like it. So it's like it's like when you go to car lot next talk about the doc fee, is it a big dock out there? Are you talking about paper doc? So it's like a doc, what do you mean? It's a ship Doctor of paper docks anyway? They play games at the car. Lots to. All right, so that's what's the next So that's the first one they offer. But then you actually literally have to ask, you have to ask then you say what about writers? Ryder fees, rider fees. Okay well kind of riders around there and they always they always put those riders on there to trap you into their Yeah. Okay. So the rider fees can average what on average like around 1 1.5%. We're up to about 2% a little bit more now. And what other fees? We haven't And then of course then something and then you really gotta dig into here and you have to ask for what the sub accounts are. Okay sub accounts and sub account fees. You can't just say what the sub accounts you got to say one of the fees. Okay. So alright. But again folks, if you really want this done right, give us a call, we'll walk you through. It will actually help you call the company and be there to ask the questions for you. And these, these folks don't know it. But in this particular case don't do it. The average folks, the average person doesn't know. But watching other people work at anybody with a variable annuity. Most people do not know what people working at the company know it though. Yeah. They know about it to define who we're talking about. But in this particular case with these folks from Wilmington. Yeah. And all of a sudden after she talked about, you know, the the one of the fees she says, hold on a second and all of a sudden there's like quiet, I want this, the company. Okay. This is odd. And I'm looking at my clients. Were they still on, were they still on the phone? Yeah. Yeah. And she says to come back. She was, oh yeah, she goes there's another fee for another rider of 5% 5% a year. What writer was that? It was? I don't even know anymore what it was. It had, it was basically for income or some sort I can't even imagine. And and my and my claim sure it was 5%. I said excuse me. I've never heard that before. I said excuse me. I said, are you certain this is 5% cause I never heard of it either. And usually we're in the 3.5 to 4% range now we're at 7%. And my client was this a major company? It was it was a good sized company. And and my client's going, I'm sure that's right. I'm certain I I am certain I and she goes I feel like I just got hit by a bus. So you were up to over 7% or they were up to over 7% in fees every single year on that thing. How they have they earned any money? Well they didn't they earned $7,000 and the company earned $23,000. Was getting rich coach In one year over the over the lifespan of the new yeah. So seven years. So seven years they only around 7007 years. 7000. All right. And they took a lot of risk being in a variable annuity. So if you got to take a lot of risk, you better be getting a real good return or have a chance of good return. But we must know that if we have a chance of really good return. Usually have a chance of a really bad loss. It's that seesaw of life in the financial world. So. All right Greg what? So what is that? Was that the last feet hopefully. Well that was that was that was the last feet close that we closed we closed the book on that. We moved it. We put them into a fantastic strategy with no fees with lifetime income, lifetime G. P. I pan growth, protect that growth and have lifetime income all with minimal or no fees. Absolutely. That's important folks keep what you earn. And that's the theory of everything in the financial world and and and also the theory behind my book, the book on retirement that I've that I'm writing right now that we've been talking about if you want to get on the the list to have at the book signing party when the book comes out call right now. Also, if you'd like to get your very own total retirement plan, analyzing everything we talked about today and getting that peace of mind, you deserve. All you have to do is call the number you see on the screen for coach Pete Greg berry. See you next week right here on the financial safari