Ep 20: The importance of working with a fiduciary (Financial Safari)
It is the duty of a financial fiduciary to work for the best interest of their clients. From tax write-offs to retirement income to types of IRAs, Coach Pete walks through key retirement advice through the lens of a fiduciary partner.
This week's episode is brought to you by Capital Financial Advisory Group for all your retirement needs. Well, hello, everyone. Is Coach Pete with Mr Steves at all? Steve, we've got a very exciting TV show today, as we always do on radio. We bring the radio excitement right here to the television. It's a fun part of the process. I mean, we just to be here, live to be sitting here with you. It ISS And so this week on the show, we're gonna talk about my book, the Seven Baby Steps to a ridiculously reliable retirement income. Folks, this is a valuable book, Steve, it's been out for about five years now, and people still request this all the time. It's on sale on Amazon. We're gonna go through it on the show today. We're gonna go over all that and more when we come right back 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. Well, Steve you know, it's been a fast moving year. I'm sure everyone watching will agree with. I'll just I'll say It's been a year that's been confusing on, and I put a couple notes together. I thought We'll talk about some things today. We're gonna talk about the book that I've written. I've written eight of them now, by the way, folks, but we're gonna talk about the seven babies textbook. This is my thing. But more importantly, I want to talk about some blind spots that people need to pay attention to in the financial world. Taxation, Inflation. Do you have the right plan? How do you know you have the right plan? How much lifetime income do you have? If I had a nickel for every time someone I talked to? When I talk to him about the retirement plan, get that blank stare on your face about They have no idea what I'm talking about. Like I'm sure your advisor set up a lifetime income plan and they said, Coach, I don't know Here, sir, here's our statements. We've got a great lump sums, but no income. Steve, How important is it for income from someone? Have income there? Well, it's a It's a crucial. I mean, it's it is what defines a successful retirement. In my opinion, Well, because if you don't have income, what are you gonna dio now? When we work, we get that income. It's called a salary or a paycheck. And so what happened with our parents and grand parents back in the day is they'd worked 30 or 40 years for a company. They retire and then the checks would start to arrive. Yeah, the paychecks. They may not have been as Bigas the paycheck they used to get. Or maybe sometimes if they saved right on their own, maybe they got a couple checks that would add up to more than what they were making. I think the goal in retirement is toe have, ah, 120 or 100 30% of what you're making when you were working. Not 60 or 70%. Steve, how many times have someone told you like when you talk to different advisors, they say you don't need as much money in retirement cause you're gonna be in a lower tax bracket? I don't believe that. No, I don't either. And it's really fun to be able to have that conversation because to me, I would be willing to pay more taxes in retirement because they don't have more money. If you're paying a lot of taxes in retirement this two way, there's two reasons why you'll pay more taxes in retirement. Number one, the government's going out of control and the government going wild. This happened in the past. We've had tax rates very high. We've had a very low and then we meet. We reached the middle part where no one's happy. No, no political party, said Azan, American citizen who pays taxes. I would love to see taxes as well as possible. And so I try to get my clients to realize the fact that taxation does not stop. Just because you don't have to goto work anymore doesn't mean you have your money. Doesn't have start Stop working to pay taxes, so taxes are very, very important to identify ahead of time. And we look at the Roth IRA many times Now, folks, you may or may not be familiar with the Roth Steve. We've talked about the Roth for years. Yes, and I know you do radio shows with advisers all across the nation. How many of the advisors that you talked to our competent and serious about the Roth IRA for their clients? Well, the ones that we work with are very competent and have those conversations, and that's where I find it so pretty interesting. Just have the conversation you learn so much and you understand why you make a Roth conversion, how you do it over time, as opposed to Well, I've got $100,000 boom because you do it now, with the tax rates low, you're gonna keep your tax rate. Let me just tell you the Roth IRA. Basically, you pay the taxes now and then you put the money in an account. That account will grow and grow and grow, hopefully if you put in the right place, but when you take the money out, there's no taxation. If you pass away and you haven't touched the money or you have touched some of the money, there's still some money left when you pass away. What do you think? Your Children grandchildren If you eat them? The beneficiaries. What do you think they have to pay tax wise? Nothing zero, which is very important when you reach the age of 72 when you have I IRA or 41 K or regular accounts, not Arbroath account, what do you have to start doing? We have to start taking required minimum distributions, and that gets to be a little. And that includes taxing as well. The tax comes out of there, the government looks at your IRAs and your 41 K is your 43 Bs. Your thrift savings plan they look at that is their savings plan because they know you haven't paid the taxation on that. So that whole account, it's gonna be taxable when you need it the most when you don't need them touching it. And so I know it's fun when you get that call from your C P a or your account. And he says, Gosh, you need to put five or $6000 in a regular IRA this year so we can reduce your taxation by $6000 on the bottom line and or the gross income. So then you can lower the taxation, but all you're doing there is kicking the can down the road. So let's say you take that $6000 right off you put $6000 into a regular IRA, you've got that great right off. You're you're all happy. You paid a little bit less in taxes. And let's say you did that 20 years before retirement. Now let's fast forward 20 years into retirement or 20 years into the future, when you just reach retirement, you start to take that money out. Now that 6000, hopefully it's going to maybe 20 or 30,000. Just that 6000 you put there because that money starts to grow. How much of that? 30,000 when you take it out. His tax. Because keep in mind, you only got a write off for the 6000 you put away. How much of that? 30,000. Now that you've built up, how much of that do you not have to pay taxes? Well, you have to pay tax on 100%. E s is a great deal. The government's got going on here, give you a little bit today, so we get a lot tomorrow. It's that little guy with a cheeseburger on Popeye, right, E. So we have to be careful, folks and It's just about identifying where your money is, what you want to do in retirement. And what do we think taxes are gonna be now? Minimizing taxes is important when your ongoing but minimizing taxes all the way through retirement is more valuable because you can't go out in retirement and earn more money. I guess you could You could work part time, but then you're not retired. So the word retirement to me means vacation forever, right? Exactly. Don't wanna have a part time vacation forever, because that doesn't make sense. So what we need to do Keep in mind the Roth Ira. If you were a farmer, you had a field. And you you were planning seeds one day and you saw a bunch of SUV black SUV vehicles pulling up a bunch of guys get out with sunglasses there, iris agents. And they say, Mr Farmer, Steve, we're gonna give you a choice today. This choice of last your lifetime, we're even gonna tax you on that bag of seeds today and will never come back again. We'll never come back. You'll never see us again. No matter how good the harvest is every year or we won't tax you on that little bag of corn seeds today, but we're gonna be back each and every year to tax you on the harvest each and every year. What would you tell them? Why would say, I'll pay the tax right now. Thank you. And see you later. That's a Roth IRA. So that's why it z most of the people I talk to you just like you out there. You're being told the story of a tax write off today and a big tax bill tomorrow. They're not being told about the big tax bill tomorrow, but I'm going to tell you the story keeps going. Volume one stops with the tax write off today volume 23 and four or taxation in the future. So if you are curious about getting your very own plan and being educated on what's really going on in your retirement plan and your whole financial picture, we are a fiduciary planning firm here 28 years over 28 years with never a complaint, and that's a big That's a big deal to me. It should be a big deal with everybody out there a blessed with the better business Bureau of the National Ethics Association. I've been the president to time president, two terms of the International Association of Registered Financial Consultants. So I'm very proud of that to being elected by my peers to be the president of that organization. I got turned out, so we had term limits, so I can't be in there anymore. So but they still But they still like me, right? So there's still happy with me. So So that's, uh, it is valuable to get your own plan. We'll do it. It's $1000 value. But if you're one of the next 10 callers who call right now, you'll see the number on your screen will do it for you at no cost or obligation. You also get my book, the seven baby steps. Gonna talk a little bit about this today. You'll get a box set called the 41 K Survival Manual box. Set call. Right now. Now, a nightmare. Retirement consultation. Yeah. No pain. No gain, right? No risk. No reward. Right. We're going all risk. See, we're gonna put everything you've got in the market. You're gonna love it. Walk run from that office and go to your future retirement partner with your best interest in mind and with a plan that's customized for your risk tolerance, and that can help increase your financial confidence in retirement. Call now to ease your fears and avoid those retirement nightmares. Yeah. Hey, we're back. Financial Safari this coach Peter Ruta and consumer advocates Steve said, Oh, we're talking about Well, we had a great conversation about Roth, and it's a conversation that people are not having Steve, and it's very important to have that conversation because three advisor who's telling you or like maybe in that c p A. Who is telling you to take that little tax write off so you could get a little bit of ah benefit one year. They they're probably not gonna be around when you're retired. So you're gonna be angry and you're not gonna have you're gonna you're gonna channel that blame on someone who's trying to help you at that time, not the person who gave you the bad advice to video. Now is it really bad advice that, you know, never hurt to put money away? But if you're putting money away for you and somebody else, would you rather put money away just for you. I would love that. Somebody else is your Uncle Sam don't want. They're gonna get there. They're gonna get plenty of money, are going to get all many of taxation. So there's if you can. If there's a way for you to take a detour and not pay taxes legally, you do that. In my opinion, Absolutely. And I mean, we certainly will pay what we owe, but there's but the beauty of what you do a capital financial is because you help mitigate those taxes and you will pay what we owe. But we don't pay any more than what we owe. And that's really important. Is that like the seven Dwarfs of worry about taxes to Did they say I owe? I owe. It's off the I. R. S. I go. Okay. I thought they said that Didn't that's what they were going to say it like 30. Okay, we don't want to do that. I mean, and it's about just making sure that we get properly educated. Steve, we have a lot of fun on the show. Were really serious in person. Sometimes, but life can't be too serious. Every single minute or you'll explode, right? Look, at this year, it's been a crazy year. Super crazy year. Yeah, I mean unlike any other. For sure. One of the things that seems to me to be consistent is is we're still going to retire. We're still got to get there. We still have to plan, no matter what's going on and and again to just be able to get the most out of what we save. We want to retire as soon as possible. That's what I've always told. When I ask somebody when you want to retire, I get a couple of answers. One is yesterday, once tomorrow, and one is whenever I can write eso what? But we wanna make sure when we approach retirement were in what we call the financial red zone, and that's if you're age 50 or above. We really need to start paying attention to what I call the G P I index growth protection income. Now we have a We give you a personal score when you come in, how you set up right now and then we'll give you a score after we could make some changes. If you don't need changes, will tell you. Percentages go from 0 to 100. We haven't seen anybody with a zero on a G P I index score. But if you are totally, totally at risk, no protection and no lifetime income, you probably at about a 5%. Because life is about income. Retirement is about income. Having a successful retirement doing what you wanna do requires money most of the time. Now, there's nothing wrong with having family time. But families these days wanna have Cem Cem luxury items ordering food to go Are you know the grand kids always want the newest device way? Need to make sure that we have what we can have for ourselves. We wanna make sure we have leftover money to help our family out. Well, that's a step in the right plan put together. So again, growth. We need our money to grow. Now. What is growth being? Of course we needed to grow, Coach Pete. I mean, that's stupid. You're saying that well, we needed to grow the right way. If we can grow it in a way where once we get that growth, it'll walk that growth in, and we don't lose it anymore. Now we're doing what I call the advance and protect strategy. You're advancing your money and you're protecting your advance back in World War One and the wars before that, like the game of Thrones, they would advance and then protect their spot. They would advance to protect the spot. That's the only way you could get ahead in life. And so if we go up and then go down and we go up, go down. That's a manic depressive territory. We're never gonna build a real plan. And we're never gonna have the confidence to approach retirement on our terms. And that's really important to remember and to just keep that in mind. And, you know, you say a lot of very cool things, you know, when you talk about advanced protect, you know, um, you talk about growth, protection and income on, but those are all things that they're They're great words to remember. And it's and especially when you start putting together a retirement plan, you know, retirement income plan this coach, I think a lot of folks today are intimidated about coming to see an advisor. They're embarrassed. Well, maybe I don't have enough. Maybe I've done the wrong things. But how do you know unless you go there and do it? I got my start in the financial industry in the nineties, working with educators, teachers, most of the K through 12 some college teachers, professors. My dad's one. My mom was a school teacher, though, and I remember she worked her butt off Steve. She was working all the time at home with lesson plans and grading papers, and Dad would pop in and out. He'd do a couple office hours. He teach for a little while, but he had his PhD. So Dad would always say, Peter, I did my work ahead of time. Now I can not work. It's hard in life so and Mom, because she she had a masters but shouldn't have a PhD, right? So, Dad, there's a college fester, you know? Remember the college jesters? They walk in for about an hour and a half talk and then have office hours pretty good life that did research and all that and got grants for UNC Pembroke that he was at two. But it's just about making sure that we're prepared and we get educated the right way But Steve, you asked me a question about people being intimidated or not having enough so to speak. We will meet with anyone and give you a consultation to make sure to get at least get you on the right path so you don't need a minimum amount of money to come meet with us. Now. Our strategies do work best for those of you with over a million dollars safe retirement. But as long as you are dedicated to at least wanting to be somewhere in life, we could help you. It's hard to help somebody who's sitting here like this, and they don't care. But if you really care and you're curious and you wanna get educated, you just haven't had the right person tell you things right or you've been ignored because they thought you didn't have any money. Let's get on that right path. This, this, this simple steps we could take. I am one of the Dave Ramsey smart investors, and so we help folks get well, get out of debt. We could help you do that the seven steps, but then, after we get out of debt, we need to make sure our money starts working for us, so getting out of debt is part one. Parts 2 to 10 is making sure you're doing the right thing after that. Saving right, retiring on the right time, knowing what you want to do in retirement so we can price that out. You know, it's fun to say, Oh, what is gonna have fun to retirement? What does fun mean to you? And then we have to put a dollar amount to that. And then we have to look forward what that's gonna cost to do 10 years from now, 2030 40 years from now, because there's something called inflation Steve, and that means things get more expensive. And they shrink, too. By the way, candy bars. When I was little, they seem to be this big on now. They're like this and they're like 10 times more. Remember the 10 cent candy bar, a dollar each, and so we have a candy bar of the month in our office. This month, it's the whatchamacallit bar. Everyone who comes and gets a candy bar. That's my love of candy bars, and that's my excuse away for me to be able to eat candy bars on. Don't feel guilty about right? Well, when you walk by the front desk, you can help the sample grab a sample e. So it's just important that we, you know, you think about a good point because a lot of people do feel intimidated. Why do you think they do feel intimidated? Well, because it's scary, you know? I mean, retirement is a big deal, and a lot of us are kind of anticipating. Maybe I could get there, find out for sure, Sit down with, you know, with an independent with the fiduciary firm and with a firm that's got experience. Remember that little story? I remember my grand parents and my mom and dad would read it when my mom would didn't read much to me, but they would read a book to put you to sleep, always that little engine going up the hill. And he kept saying he thinks he can, right? So if you think you wanna be on the right track and we could help you because that that train had a good attitude and it ended up getting over the hill right over the hill in the pun intended retired. But folks Let's do this. Let's make sure that you get educated properly. So if you are one of the next 20 people, call well put together for you your very own G p I Index, we'll put a total retirement plan for you. We'll map out a strategy that makes sense for you and your family. We're totally independent, conflict free financial and fiduciary firm, so we'll do the best thing for you. We'll make sure it does the best thing for you all the way through your wife and your family. You also get a copy of my book, the Seven baby steps and a box set call. Right now. Hey, you know the market's going up. You know, we really should put mawr of that retirement money into the market, not those stupid safety accounts. Now listen, you're getting closer to retirement. You need to be less risky with your money, not more. E think think about all the money I you could make in the open market today. You want guaranteed retirement money? Not what if retirement money. Oh, you are so divine and you want advice from a certified fiduciary and not not this climate help take the devil out of the equation. Call now and schedule your free no obligation consultation. Today, the one 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 or visit financial pizza dot com. 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 discover how much you're actually paying in fees and commissions. See if I simply protecting your investment you could experience dramatic growth potential. We'll also perform a tax analysis to reveal how you could possibly reduce your taxes, will even run a customized income plan utilizing proven strategies and techniques, which can turbocharge your retirement income and take the worry out of living in retirement. That's a comprehensive financial review, complementary with no obligation, and we're back on financial safari and coach Pete here we were just talking off the air about color coding money. How? What do you mean, Coach? What does that mean? Well, one of the things I tried to do Steve, is make it simple in the financial because, gosh, life is complicated enough, and and so is the financial world. Up and down all around. I mean, you've got stock splitting stock good, which is a good thing. A lot of times running into the split, that kind of thing. But red. Okay, so red is the stock market. So let's zoom. Long ago, I said, There's gotta be a way for us to make sure to educate folks on the money world in colors that we can understand. So we came up with three colors red, green, yellow, eso red is risk and it could be deeper. And then we go deep red or white, red. So deep red is extreme risk. That's investing in maybe some real estate that's not in a good place. Maybe you got a really good deal on something or you're buying a stock of penny stock. You know what a penny like they call them penny stocks for reason because they're they're like pennies and you get a whole bunch of them. You could brag about having millions of shares in the company you bought for a penny, but if it never goes up, you lost all that money. What happens a lot of times with those penny stocks is there's. There's hardly any regulation. So the stock the stock people behind the scenes with that company will print more and more shares. And then they'll do something called a reverse split. Now, reverse split is for every let's say, every 10 shares you have now. You only have one that's reverse split the splits like Apple and Tesla do for every like one share they have. They get four or five, but a reverse witness for every 10 or 20 or 100 shares you get or 1000. I've seen 1000 of one reverse with get one share, so the price goes up immediately because in proportion, if they take 10 shares away, they multiply the the value of the stock share you have by 10. But what happens is investors lose confidence really quick on the reverse splits, so they start selling so right away it seems like you're right back to where you were before. They did reverse split. And another thing they'll do is after the reverse split it. That's just to minimize the number of shares that are outstanding. So the company maybe has a million shore, let's say 100 million shares and now they do 100 and one reverse split now that we have a million shares. But in the meantime, after they do that, they start printing more shares and selling, drop them into the market. So now all of a sudden you're back to the same price, the same 100 million shares. But you have 100 times less than you started with. So be very careful on penny stocks, cause I see a lot of people saying, Oh, this sounds really good. They're called story stocks. They do that. The reason they make it sound really, really good because they could get away with anything because they're really not regulated. And then you're the one who told the bag, only people making money that people on the inside. So that's just the extreme read. But we talk about regular stock market accounts for one case that's red because you could lose the money if you could lose money. It is a red account. So real estate, Steve, a lot of people say, Well, real estates, not a red account. Why isn't it? Well, my real estates were going up, was gonna continue to go up. What did you do in 2008? It could go up. Yeah, but even if it does it tomorrow, there's no guarantee that tomorrow it's gonna keep going up. And there's another thing about real estate people overlook. Real estate is a great investment. Coach Peter will never go to zero. Yeah, but every single year you hold it, you have upkeep. If it's a house, you have to keep the house in good shape. But you have something called real estate taxes, Steve. And this is why we really never owned what we think we own. Even our cars. Even if it's I paid cash in my car. I own my car. No, you don't. You don't pay your tax bill. At the end of the year, the government will come with a tow truck and take it away and auction it off. Same with the house. If you don't pay or land. Or like if you have a big plot of land and you've been holding it for years, it's costing you money. They're called holding costs, so there's some risk there. Even if the real estate's going up forever, which I haven't really seen, anything go up forever and forever is only today. Tomorrow could be a different things, so we have to be very careful. So real estate is also in the red now yellow. We need to have some money, just in case we have. You ever had a couple flat tires on the car at one time? Well, no, I don't think so. I have to. You ever had a went through a pothole on one side both times. Both both basically sliced him up. So I had emergency account I was able to buy. You know, nowadays we have credit cards to We still got to pay the credit card off, and I'd rather not bill dead up by trying to pay tires on the car. But let's say that we need a new roof at the house. I mean, that's 10 $15,000. Let's say insurance company says they're not gonna pay for some reason. Well, you gotta come out of your pocket with it, right? So yellow money is not gonna grow, but it's gonna be 100% liquid, I say not gonna grow it, Maybe get one or 2%. It's like CDs at the bank. You looked at a CD of the bank lately? Maybe 1%. Maybe if you're lucky. You know, if if we look at inflation being 3% or so and you're making 1% in a bank account, Steve, even after the first year, your negative, too, because inflation is growing. In other words, the cost of goods is going up 3%. Now, inflation is an average and we, on average, is about 3%. It's not 3% every year. Some years, inflation might be 7% and the next year might be negative two or whatever, but still, on average, it does get more expensive to buy things. If you don't believe me, think about what you paid for your first house. However, long ago it was it. Now think about what you pay for your last car. Many of you paid more for your last car than you did your first house and you can't live in the car or you could try. But that would be so. That's inflation. So certificates of depreciation or certificates of disappointment. I call C. D. So we don't need all our money there. But we need some money there, and we should getting a little bit of money. It's a lot better than putting it under your pillow and then the green accounts. Now green is very important. They have the G p I. That's growth. When you don't need the money, it's growing for you. It protects the growth it does that advance and protected, advances your money and then protects your money advances and it protects. So if the market's going down, you're still you're still up, like so. If people are all in the market, they're going down and you're sitting here protected. So that's the protection, then. The most important part of the GP I accounts is the income, the lifetime income you could never outlive. Steve. People are amazed by this because they're saying, Well, gosh, no one ever told me I could get income forever on certain monies. And then they say, Well, what if my account value goes to zero the income account. It's guaranteed in contract to continue to pay you the same income you were getting. Even if your balance is zero. Wow, that's That's how that's how you put a retirement plan together. Now, get this worried about long term care? Well, what if they would double the amount they're giving you? If you have a long term care event for up to five years? Wow, that takes a little bit of war. It's not a long term care policy, but it's a It's a check that comes in addition to a long term care policies or will help you do what you need to dio. So then another question I say I get asked is what happens to my spouse if I pass away? If you set up the GP, I accounts correctly. The income that you were getting if you pass away continues to go to your spouse. It's called spousal continuation very important. If your spouse out there, you need to make sure you get that income to not a reduction in income the same income because I've seen a lot of pensions. If the spouse dies, the spouse gets half. No, this is the full value. Very important. Another question I get. They'll get a lot of questions, Steve, But the question I get asked a lot of times is, What if I pass away and my spouse passed away and there's a balance left? Does he does? The company keeper is a financial institution. Keep it No. Whatever is in there when you pass away, you've already assigned who gets. It is called a beneficiary designations, so that money goes right to them, bypassing probate. So it does take a lot of the warrior out of planning for retirement. It sure takes a lot of worry out of living in retirement when you get a what I call a financial Philip. That's an income check every single year delivered to your mailbox. If you could get that accomplished, and then you can. Also, if you do this right, you can also keep after you get your income set up. You can keep whatever's left and the red accounts the stock accounts toe. Maximize your horsepower and here's the best part because you have that green account. You've got the lifetime income already set up when the market tanks. You don't need to reach in the market to take the money out because you're already getting money from the green Side. So therefore you have time and time on your side. Helps you not do stupid things when the market's going down so you could just watch your market go down over there. And then, as you're still living on your green money, watch the market recover so you would have locked in the losses here. But because you didn't have to do that, if the market came back, you'd be able to enjoy that. Come back with one of the It comes to mind that basically all of the money that you save for retirement has a purpose. That's in other words, Purpose determines placement, which bucket of money that goes into right. And the purpose is to have, Ah, lifetime. You don't have to worry about yet. I see too many folks, folks, you may be watching now, maybe in the same boat who have all the money in red Bucket because they were never told about the G P I. The growth protection lifetime income accounts that have the long term care double are on there and have the way where you'll never run out of money. Even if you do run out of money, it makes a lot of sense, folks. It really does. Let's sit down with you and get your own plan put together. If you're one of the next 20 people called a zoo, we leave for the week. I'll give you a cup of my book, The Seven Baby Steps. Really good book. But more importantly, we'll give you $1000 golden ticket to have your very own total retirement plan worked out for you and your spouse and your family, and really does. If nothing else, it's educational for you. We can also reveal your life insurance to make sure you're doing the right thing and your Medicare claiming options and Social Security All that and more when you call right now. All right, Mhm. Okay,