Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
Live from the wgy iHeart Studios. Welcome to Retirement Ready
with your host Dave Kopek from the Retirement Ready Show.
Every week, Dave and his team discuss the ways they
can help people make informed decisions about a wide array
of retirement planning information that can support you and developing
a more certain financial future for you and your family.
(00:21):
Now it's time for Dave Kopec, w G WISE retirement
planning specialist.
Speaker 2 (00:48):
All Right, good afternoon on Dave Kopek, your host WGY's
retirement planning specialists. Been here a long time, but i'm
radio for twenty five years. We are an independent investment
advisory firm, custodian all of our assets through the Mothership Fidelity,
(01:08):
open architecture, no pre determined destination not only on the investments,
but the insurance products. We act in a fiduciary capacity
investment management asset protection legacy. The eighty five trillion dollar
question for a lot of us, and our focus today
on this topic specific show, is what should you do
(01:31):
when that time comes? Either a lump sum distribution or
take the company pension. And for some of you it
will be a very critical decision and one that you
should really, really seek help and assistance before you make
that final decision. Why am I talking about this today
(01:56):
because I picked up the UH Business All of Any
Business Review the website yesterday and on the headline it's
got mohawk fine paper. Pension plans taken over by a
federal agency, the Pension Benefit Beneficiary Benefit Guarantee Corporation, a
(02:26):
federal agency that acts as a backstop the command and
basically protect the retirement assets. Now, this company was sold
recently to an Italian company in February. What this ultimately means,
I guess it will play out, but this is not uncommon.
(02:50):
It has happened many times. All you have to do
is think about Saint Clair's and what that predicament is
for a lot of those individuals that worked at the
hospital for decades. And today we're going to talk a
little bit about what you should be thinking about with
your company's pension plan and the options that are available
(03:12):
to you, and how you should go through and figure
out what makes sense for you. At the Retirement Planning Group,
we are big believers in controlling your own destiny. That
means that I would much rather have Dave Kopek, Julie
(03:37):
my wife, my son's making the decisions with the assets
rather than someone else on the investment committee. So, to
make a long story short, today's program and our topic
today is what should you do? Should you take the
(03:57):
lump sum benefit rolling into an IRA or should you
take the pension benefit that is being provided to you
through your former employer. So we'll go through some of
the pros and cons and some of the things that
you should think about. But before we get into it,
(04:20):
I want to give you a little bit of some data,
some information that you should be aware of. The first
is is that we live in a society today. Well,
there's all sorts of surveys and data and information. There's
overload and as they said, the mothership Fidelity provides us
(04:43):
with a lot of information, a lot of research that
they do. But the bottom line gets down to is
that nearly half of America's retirees say that spending their
savings is creating anxiety and just having an emotional toll
on them, and nearly a third are spending money faster
(05:05):
than what they expected. This is according to the most
recent survey twenty twenty four. So not having a clear
plan for drawing down your savings and know how to
generate income in retirement are major factors in individuals anxiety.
(05:32):
I talk about a laying in bed and watching the
fans spin, and alarmingly, fewer than a third said they
have a specific income plan in place for their retirement years.
Forty one percent that they don't know how to stage
their withdrawals from their retirement accounts in half fewer than
(05:58):
half forty nine percent know how to handle required minimum
distributions rmds to minimize taxes and also to have their
sound retirement income plan stay in place. So our position
is that not having a clear plan for withdrawing from
(06:20):
your qualified plans generating income can be detrimental. First and foremost,
you need to prioritize which things you're going to spend
money on what we call baseline income estimating. Have a
(06:41):
pretty good guestimate of what it's going to cost you
to have a roof over your head, pay the taxes,
some discretionary money, sitting on the sidelines, paying the power bill,
et cetera. Baseline income big one today is course healthcare cost,
which I talked about this morning. How much money are
(07:03):
gonna have to set aside on the sidelines healthy sixty
five year old couple. Today, Fidelity is saying that you
need to have about three hundred and thirty thousand dollars
sitting on the sidelines for out of pocket expenses for
your retirement years one hundred and sixty five thousand dollars
(07:23):
at peace. And of course, compounding a lot of this
anxiety that individual are facing today is the lack of
confidence in the long term salvency of social security, which
(07:44):
ninety percent of the respondents say is important mandatory in
order for them to have quality of life in their retirement. So,
as I said, you're at that stage of life now
where you're gonna have to start approaching retirement and you're
(08:07):
going to have to start weighing the benefits of taking
the check from the company or the lump sum distribution
that you typically are allowed to do with your four
oh one K and your cash balance accounts. As Roy
quite well aware, pension benefits are typically a fixed dollar
(08:31):
amount beginning at retirement and until you pass away. Some
plans offer what they call a survivor benefit to a
spouse and then of course, if you do not take
that option, which is the pension option or the annuity option.
You have the ability to take lump sum distribution one
(08:54):
time trustee to trustee transfer a non taxable event that
willow allows you to basically take responsibility of managing those
assets throughout your lifetime, your entire retirement years, for not
only you, your significant other or your spouse. Daunting task.
(09:22):
How do I do it? Especially for people that spent
their whole life working, not managing assets. So today's show
is about lump sum distribution, the pension option that's available
through your employer, some of the differences between the lump
sum versus the pension payment, and what are the advantages
(09:45):
and disadvantages of both. Again, I'm Dave Kopak, retirement planning
specialists for WGY. We have five locations here in New
York State now Syracuse, Oneono, Glen's Falls, Aubny, Multi Lash, Saratoga.
If anything that I'm discussing is of interest to you,
We've had a lot of people call in from the
(10:06):
radio show that requested our complementary consultation. Our telephone number
at our office is five to one eight five eight
zero one nine one nine. That's five one eight five
eight zero one nine one nine. You can check us
out on the web rpgretire dot com, rpgretire dot com.
(10:27):
I'll be right back the eighty six percenters. Do you
know that eighty six percent of the population has no
defined benefit pension plan. For most of us, we have
to take our life savings and create a paycheck for
the rest of our lives in retirement. What is your
plan for retirement income distribution? How you manage your assets
during the most critical years of your lifetime. Nobel Prize
winning economist William Sharp has called retirement income distribution the nastiest,
(10:51):
hardest problem in finance. He points out that investment, uncertainty,
and mortality can derail the most careful laid out retirement
income plan. Call our offices today to start the process
of building a retirement income distribution plan. After forty one
years of being in the financial services business, you need
to start taking action to start building your own personal
retirement income distribution plan. How do you do that? To
(11:14):
take action? Five one eight five eight zero one nine
one nine. That's five one eight, five eight zero one
nine one nine or RPG retire on the web. Don't procrastinate,
motivate to start building your retirement income distribution plan. Five
one eight, five eight zero one nine one nine. The
greatest risk in retirement. Most of us have no plan
for We're insurance to cover the expense. A long term
(11:37):
care event can impoverish a spouse, drain your life savings,
and cost stress and anxiety on your family. What is
your plan and how will you pay for a long
term care event? Call the Retirement Planning Group today discuss
options you should consider to protect your estate and have
choices and independence. Take action call today five one eight
five eight zero one nine one nine or RPG retire
(11:59):
on the web. All right, we are back. I'm Dave Kopek.
(12:32):
This is Retirement Ready. Topic specific show today. We're talking
about the lump sum distribution versus taking the pension from
the company or the annuity option. You know, we live
in a world today that a lot of us guys
we exit stage right before our spouses. And there's been
(12:54):
a lot of focus, there's been a lot of marketing,
there's been a lot of target marketing towards women because
of this wealth transfer. It's a staggering number, eighty five
trillion dollars. But the thing is is what's staggering is
that eventually a lot of that money is going to
be controlled by women, because why the guys die first.
(13:18):
So in this study it talks about the status, what
has happened since the pandemic, and what stage are women
in right now in regards to dealing with this wealth transfer.
The first is this women are taking control of their finances, investments,
(13:39):
and understanding retirement planning better. Fifty eight percent of that
nearly three out of five women worry about money several
times a month, or more less than half of women
(14:03):
know how to make their money last for a lifetime
in retirement. Less than half. Inflation purchasing power is the
top financial concern for nearly three out of four women.
(14:26):
Two thirds of women see a US recession ahead, but
plan to double down on retirement savings. This greatest surge
of retirees eleven thousand, two hundred people almost twelve thousand
(14:47):
a day. Very soon are reaching that magical age of
sixty five. Our retirement systems will be tested like never before.
You're going to have to take control, and you're going
(15:08):
to have to find out and make good financial decisions,
or you're going to find yourself behind the eight ball.
Twenty twenty four saw the greatest surge of Americans turn
in sixty five. I talked about this last week. So
(15:34):
what's your plan when you sit down and you have
your conversation with your financial team and you start talking
about the lump sum versus the pension benefit. Here's some
of the key differences that you need to understand. The
first one on the lump sum, all of the money
(15:59):
that is inside your typically it's a define contribution plan
four oh one K four oh three b TSP New
York State deferred compensation. All that that money is rolled
into a trustee to trustee transfer from your employer's plan
into a self directed IRA, and then you have the
(16:23):
ability to manage those assets based off of your income,
need and also what is required for you to have
quality of life. The second thing on a lumpsom distribution
that you need to be aware of you or someone
that you hire, such as the retirement planning group. You're
(16:49):
now responsible for managing those assets throughout your lifetime, which
could be twenty three prety plus years. My oldest client
that just passed away was one hundred and two. I've
got a lot of clients during their nineties and eighties.
(17:13):
Once you pass away, the money doesn't go away some
of the pension options, which we'll go through in our
next series of bullet points. Here, the remaining assets inside
the IRA go to named beneficiaries. You have a primary
(17:34):
which is typically the spouse, and then you have contingent beneficiaries.
You got three kids, it's Bobby, Billy, and Susie as
the contingent beneficiaries. Pretty straightforward pension payments. You select the
(17:56):
company's pension payment, which is typically offered through an insurance
company or they basically self insured. Payments start with probably
within thirty to sixty days after you retire, and they're
(18:16):
paid monthly into your account until you pass away. The
pench of Benefit Guarantee Corporation which I just talked about,
provides some insurance in case the plan is unable to
(18:38):
make their commitment. There's guidelines as far as how much
they're going to protect the third component. Monthly payments cease
once you pass away, unless there's a survivorship benefit for
(19:01):
the spouse. If the spouse passes away quickly shortly after
the individual that was receiving the payments initially from the employer,
benefits are gone. Benefits are gone. So if you have
an early demise. You've been working for the company for
(19:22):
thirty years, you pass away after five years, both you
and your spouse. That's it. There's no survivor benefits. There
are no survivor benefits. Now there's a gidea up with
some of these which we've seen. Some of the companies
(19:43):
require retirees to take monthly payments to keep their health
insurance proceeds. Some not all, a portion, not all of it.
But you have to read the fine print and see
exactly what that obligates you to. Because you're all quite
(20:04):
well aware. Health insurance is one of the most critical
components of retirement planning today. It used to be number
two or three for a lot of individuals. It's number
one today as far as the cost of healthcare and
how it will affect you in regards to the amount
of cash that you're going to pay out of pocket.
I just told you in the most recent survey and
(20:27):
also the calculation that Fidelity did through their research arm
they estimate a healthy sixty five year old couple today
will spend somewhere between three hundred and twenty to three
hundred and thirty thousand dollars in out of pocket expenses
and this does not take into consideration long term care.
(20:51):
So what are the advantages that take in a lump
sun versus a pension benefit. The greatest advantage is you
own the money, no one else. You're controlling your destiny.
(21:15):
Something happens to you prematurely, the money will go to
your spouse and your loved ones. Not the case for
a lot of individuals. I'll take the State of New
York pension system right now. What's the greatest risk for
a lot of individuals that are going to retire from
the State of New York The first check. If you
(21:39):
don't get to the first check, you get a three
times your salary payment. You're making one hundred and twenty
thousand dollars a year. Your loved one, unless you have
additional coverage group or another life insurance policy in place,
your spouse is going to get three hundred and sixty
thousand dollars, not the sixty some thousand dollars you were
(22:00):
going to receive in a pension benefit. Try to take
three hundred and sixty thousand and create sixty thousand. It's
pretty hard. One of the greatest risks for state retirees
is to get the first check to get the benefit.
(22:21):
So we know what the advantages are taking the lump sum,
we know what the disadvantages are taking the lump sum.
What is it with the pension benefit. Well, the pension
benefit is you can sleep at night. But that doesn't
necessarily mean that it's your best option because if you
take the lump sum distribution, you can go out and
(22:44):
you can competitively, competitively go to insurance companies and see
what they'll offer you. As far as a guaranteed income
payment for life. Yeah, yes, the private pension is going
to pay. But the question is is that what type
(23:07):
of guarantees are so to associate it with the private
pension and who's guaranteeing it New York State, if you
purchase an annuity in the State of New York through
the New York State Insurance Guaranteed Fund, you get an
(23:27):
additional five hundred thousand dollars of protection. If it's a
private pension plan, that's not necessarily so it's only as
good as the credit paying a bit it ability the
credit worthiness of the corporation that's issuing the pension benefit.
(23:53):
So the bottom line bottom line is this, if you're
a some pension selection makes sense for you. You need
to get going and you need to figure out exactly
how you're going to allocate those money what we call
the red zone. Three to five years before you retire,
(24:14):
you should have your plan in place as far as
how you're going to allocate those assets in order for
you to facilitate the income that's necessary. If the pension
benefit is the one that you align most with, then
you have to figure out if the pension that is
being offered to you through the company is advantageous versus
(24:39):
if you took the cash and you created your own
pension benefit that allows you to have a survivor benefit
rather than if the pension benefit goes away, the money
doesn't go away, which is critical for a lot of
people retirees with pension benefits. In this resurvey, too, basically
(25:13):
came out they were more financially stable and they had
more of a comfort. They weren't having such high anxiety.
Now does that mean one hundred percent of your money
should go on there? Absolutely positively not. But what it
does mean is that that baseline income, having a certain
(25:36):
part of your overall and investment portfolio allocate it in
order to pay the bills makes all the sense in
the world. All Right, we're gonna have to break here
in a very short period of time. When we come back,
we're going to talk about this in greater detail. I'm
Dave Kopek, WG Wise Retirement Planning Specialists. We'll be right
(25:59):
back to show. All right, you're back. A little beetles
(26:43):
there the sack. That's the Beatles, right, yeah, the Beatles. Alright,
Oh flairybody's enjoying their day. Happy holidays. Oh my god,
I can't believe Christmas is overwear over overwear. You could
(27:05):
tell I'm dragging over with And we're gonna go into
the year twenty and twenty five in a few days.
So hopefully you had a wonderful holiday and happy New Year.
When I talk to you next time, it will be
two thousand and twenty five, which is hard to believe.
So in the year twenty and twenty five, if that's
(27:26):
year you're going to retire, there's a lot of your retiring.
Almost twelve thousand people a day are going to retire
at the magical age of sixty five. Twenty and twenty four,
we saw the greatest surge of Americans turn in sixty five,
which means a lot of you are gonna have to
(27:47):
make some very important decisions for your retirement safety. So
if you are contemplating going out into the green pastures
of retirement, I would highly recommend that you motivate, don't procrastinate,
(28:07):
because setting up your retirement income distribution plan is critical, critical.
And when I say it's critical, I'm fighting a cold
a little bit, folks, and I apologize for that. So
(28:28):
there's a word now that we hear all the time
and see l word, and that's called longevity. And what
you want to do myself, I don't know about you.
I don't want to go into retirement and have a
fifty sixty seventy chance of success. I want to have
(28:52):
one hundred percent chance of success as far as the
amount of income that I know it's going to come
in the door, guarantee whether it's any day or any day.
You know, a bad market, a good market. So the
thing is is that there's a lot of gurus out
there Monday morning quarterbacks. They have all the answers and
(29:17):
they have this I guess this combined focus on how
much they hate annuities. And that's fine, that's their prerogative.
But I always, like I've mentioned this on the radio
(29:37):
for a long long time. I've always said, if anybody
wants to come in and debate me about annuities, I'm
here every Saturday, and I'm more than happy to sit
down with you because there's a lot of misinformation out there.
You know, You've got guys that come out and they
(29:59):
say they hate a new and the only reason why
the financial advisor is recommending them is because they get
a big fat commission check. They're ill liquid, you can't
get to the money. Well, my answer to that is
that it's an absolutely one no. You know, you've heard
(30:22):
this one. Annuities have nosebleed level fees right now for
the most part. The answer to that is an emphatic no. Now,
variable annuities have fees that are higher than you would
(30:42):
have in a managed account with ETFs, et cetera. But
fixed annuities, indexed annuities, deferred income annuities, single premium media
annudies don't have any fees at all. No fees ever
get deducted from the stream of income. So the most
(31:04):
important retirement goal for most of you that are listening
today as what to make sure you never run out
of money, right, you want to make sure you never
run out of money. The problem is is that when
your portfolio manager is gone, probably through the pearly gates, right,
(31:30):
and you're sitting there and you're well in your seventies
and eighties, and you're trying to figure out, how do
I make this thing last as long as I'm going
to last, They're nowhere to be found. So, having interacted
with thousands of investors over the last forty three years
(31:53):
that I've been in business, I can assure you. I
can assure you one thing. The individuals that I've worked
with that put an annuity, not all their money, but
put an annuity into their income distribution plan for income
(32:16):
that's guaranteed for the rest of their lives, not one
of them has ever come back to me and said,
you know what, Dave, I wish I never did this
now one So why is there so much misleading information? Well,
they have an agenda. They have an agenda, and what's
(32:36):
their agenda? They're smart, they can manage money. Well, here's
a guy that's really smart. William Sharp. Sharp is smart
Sharp Ratio Stanford University scholar, and he says, right now,
(33:00):
he loves annuities. Why does he love anuties? He loves
annuities because he has two things that no one can answer.
Sequence of returns. You get into the market in a
bull market, a bear market, low interest rate, high interest rates?
(33:21):
Is it a prolonged bearing market? What is the distribution?
What do you have to take off the portfolio in
order to satisfy your income needs? And the second one
is sequence of returns, sequence of returns in longevity? Sequence
(33:43):
of returns in longevity? How long will you live? You
can answer that one. I'll tell you what. You're in
pretty good shape. So the fears that do you have
right now seven out of ten is that you want
(34:09):
to have guaranteed income for the rest of your lives,
and most of you shy away from the only investment
program that can afford you that. And I always say this.
When I got into the business in nineteen eighty two,
which seems like a long time ago, but it went
(34:30):
by awful quick, folks. A lot of things have changed.
Cars have changed, technology has changed, investments have changed, the
brokerage business has changed, and now anuities have changed also
where they will facilitate pension benefits that you you you
(34:54):
you control, not someone else and you don't have to
worry about the pension benefit beneficiary guaranteed corporation coming in
and taking over your retirement plan. You also hear that
the you know annuities have huge tax problems. Well, if
(35:19):
your money's inn I raise four to one k's TSPs
New York State deferred compensation four oh three b's, you're
not going to have a tax problem. It's so relevant.
It's pre tax money. It all grows on a tax
deferred basis, and when the money comes out, it's all
taxes ordinary income. There is no tax preference zero. So,
(35:49):
as I said at the beginning of today's show, running
out of money prior to death is the average retirees
greatest fear. They fear it more than death. And there's
an answer. There's an answer to this puzzle. There are
(36:11):
investments that will give you guaranteed income for life and
those fears will never be realized. So as long as
you're on this side of the grass, you'll keep on
receiving those retirement paychecks and then you're going to have
(36:33):
to find a way how to spend it. And when
I say that they're different and they're complicated, they are
because you can build out a portfolio with them where
you basically give yourself across the living adjustment. Also you
stagger the payments. You stagger the payments. So I know
(36:56):
that this is a little bit more in depth that
you might want to here today. But as I said,
a lot of you, almost twelve thousand of you, every
day will turn sixty five and you're going to have
to make a decision whether you receive a lump sum
or a pension payment. And you need to know the difference,
(37:17):
and you know what's going to be positive for you
in your own particular situation, your family and your loved
ones especially especially, and when to over emphasize this, if
you want to leave money to your family, you can
(37:39):
build a pension inside your own IRA. You don't have
to take the company's plan. And to be honest with you,
you're going to have more flexibility and chances are pretty
high you're going to have what more money. I'm Dave
Kopek today we're talking about lump sum distribution versus a
selecting the pension option through your employer. Anything that I'm
(38:01):
talking about. I know we have a lot of listeners
outside the five one eight area code. Give us a
call at my office of five one eight, five eight
zero one nine nine five one eight five eight zero
one nine one nine. Check us out on the web
rpgretire dot com. Again, that's RPG retire. It's just the
initials of the Retirement Planning Group rpgretire dot com. I'll
(38:23):
be right back after this quick message. Your partner for success,
David Kopik, heir WG Wise retirement planning specialists the Retirement
Planning Group. We understand that retirees face many important decisions
that can affect their long term financial success. Some of
these decisions revolve around making investments that will help create
a hedge against outliving their assets, the impact of inflation, taxation,
(38:48):
and rising healthcare quests. Most of our clients like the time,
the desire, or the experience to manage their own investment portfolios.
We consider it to be an honor and a privilege
to help our clients make sound investment decisions thy will
contribute to a secure financial future for them. Because over
ninety percent of our clients are retirees with similar concerns,
(39:10):
we are in the best position to approach such challenges
with experience and skill. Give us a call today at
five one eight, five eight zero one nine one nine
five one eight five eight zero one nine one nine
or RPG retire on the web. We run out of
money in retirement where your investments provide income for possibly decades.
How do you navigate the two greatest risk in retirement
(39:32):
sequence of returns in longevity at the Retirement Planning Group.
Our Bucket of Money approach addresses these concerns and we
offer a complementary consultation to discuss this with you. Call
our office today for a free complementary consultation to develop
your own personal retirement income Distribution plan at five eight
five EID zero one nine one nine. That's five eight
(39:53):
five eat zero one to nine one nine. All right,
(40:25):
we are back, hopefully Santa Claus was good to you, Behanikah.
There's a saying, and I'm trying to remember it. If
what you were doing was wrong, when would you want
(40:46):
to know about it? There's a book that's out right now.
If you've got a pen and a piece of paper,
or if you're recording the show or whatever it is,
you can go back listen to it. It's a gentleman
by the name of David McKnight. It's called the guru gap.
(41:11):
How America's financial gurus are leading you astray, and how
you should get back on track. There's a lot of
sizzle out there. There's a lot of financial advisors that
(41:32):
are selling books and doing TV shows and radio shows
and ringing the bell in some of the stuff that
they're advising people to do. And I'll read one of
his blurbs here. What David says is in fact, disciplined
investors who have saved well and played by the rules
(41:55):
risk losing hundreds of thousands of dollars over the course
of their retirement by heating this outdated, one size fits
all advice. And I agree, I agree wholeheartedly. I don't
(42:18):
think there should be a cookie cutter approach in managing assets.
And when you see a room filled with one hundred
people on telephones and they're basically got headsets on and
they're taking in phone calls and they're giving advice, they're
putting the information into a database and it comes out A.
So you go in the A box, it comes out
(42:38):
B on the B box, the segoes in the C box.
That's not retirement planning, that's a marketing strategy. So what
you need to find out is how you can shield
yourself from what I consider it to be marketing versus education,
(43:04):
And at the Retirement Planning Group, we try to make
sure you understand the risk that's associated with qualified assets
iras four oh one k's four oh three bs TSPs
because there's like forty trillion dollars forty of the eighty
five trillion that's passing on, forty of it is qualified assets,
(43:27):
forty trillion dollars. And the thing that you have to
try to figure out is what, how, when, where? Who
is going to take care of that money when you're alive,
when you're passing it on to the spouse, and then
ultimately when you're transferring it to the next generation. It
(43:50):
is complicated to the people that I respect, Natalie Choate,
who's an attorney that's specialized as is in qualified plan distribution,
and also a gentleman who's the CPA ED slot SLOTT,
the Retirement Planning time Bond. It's all the money out
(44:15):
there and qualified assets. So if you're trying to figure
out lump sum versus the pension benefit, if you're trying
to figure out how do I build income streams and
strategies that not only will take care of myself my spouse,
(44:39):
adequate wealth replacement at the first death, transferring assets to
the children tax sufficiently, and you'll never outlive your retirement savings.
There are strategies out there, but you need to motivate.
It's not buying the right stock or buying the right bond,
allocating it properly, building some hea, getting alternative investments. It's
(45:04):
finding out your risk tolerance and are you one of
the group of seventy seventy percent of the people want
safety and guarantees seventy that's seven seven h seventy excuse me.
(45:27):
So you need to motivate. You need to be disciplined.
You've saved well, you've played by the rules. Now it's
time for you to basically get your retirement income distribution
plan together three to five years. The sooner you'd start
doing it, the better off you're going to be. Start
building your buckets of money, Start understanding the dynamics of
(45:49):
qualified assets, learning the different retirement strategies out there, and
the different products that are available to you in order
for you to facilitate what you're looking for. But, like
I said, there's a vast amount of wealth that's being accumulated,
(46:13):
and there's a vast amount of money that is going
to be transferred over the next twenty to thirty years.
But when I gave you those statistics in the beginning
of today's show, I think they're shocking. To be honest
with you, nearly half of American retirees right now say
spending their savings is creating anxiety and it's having an
(46:35):
emotional toll on them half and they're spending money faster
than what they expected. So what I've always said over
and over again, retirement should be a time of enjoyment,
not of anxiety. Retirement should be a time where you're
basically maximizing your go go years. You don't have to
(46:59):
spend as much time in your slow go or your
no go years, But during your go go years, you
want to basically be in a position where you can
do the trips, do the vacations, go to Disney, do
the cruises, do all the things that you want to do,
and not worry about do I have to sit and
watch CNBC all day long the stock market. And then
(47:23):
you also need to understand how sequence of returns inside
a portfolio that doesn't have breaks or what I call suspenders,
and a belt on the portfolio can really have a
dramatic impact as far as the amount of withdrawals that
you can take off the portfolio. So let's kind of
(47:47):
highlight because we're gonna have to leave here in about
three four minutes, say goodbye. If you're in a situation
where you know that you're going to have the option
to either take the lump sum benefit or take the
annuity or the pension payment from the corporation, you need
to know the difference. You need to know the nuts
(48:09):
and bolts. You need to get underneath the hood and
see the fine print. Who's guaranteeing the pension benefit. Like
I said, there's a company here locally in the Capital
District region. It's going through it right now where the
pension benefit Guarantee Corporation is now just took over the
pension liabilities from Mohawk Fine Papers, which is the printing company.
(48:39):
It's been there for decades. I believe you know. One
of the saddest stories I've been in business a long time,
one of the worst stories that I've seen in all
the years that I've been in business, is what happened
to the money at Saint Clair Hospital, Where did it go?
(49:05):
Where did it go? And why isn't there more definite
black and white answers as far as who was responsible
for the demise of that retirement plan, because that has
affected a lot of hard working savers that deserved answers
and deserve to receive those moneies when they went into
(49:27):
their retirement years. Don't ever put yourself in that position.
Don't ever put yourself in that position. As I said,
I'm a big believer in controlling your own destiny. You
can create your own pension benefit. You're going to have
much more flexibility. The money you don't utilize will pass
(49:49):
on to your loved ones, your errors. You can design
a plan that's more than adequate enough as far as
wealth replacement for a surviving spouse, and then live your life.
Do what you're supposed to be doing, having fun, dancing
in the street. But as always, we offer a complimentary consultation.
(50:16):
As I said, we have five locations now. We just
opened up a Syracuse office. We're in Syracuse, Oneana Aubny
Malta slash Saratoga Glenn's Falls. Be an honor, be a
privileged to sit down with you have a chat and
see how we can facilitate what you're looking for during
your pre and post retirement years. Because a lot of
(50:37):
times people come in and we say, hey, listen, you're
doing great, you're in good spot. You're in good spot.
But there's a lot of times too we say, you
know what, we think we can help you, go on
home and think about it. We never do business on
the first appointment because we don't think it's right. We
always want you to go home, get a second opinion,
and then you can make a decision if you feel
(50:58):
comfortable working with the retirement planning. Our website is rpgretire
dot com. It's rpgretire dot com and on there you'll
find out we do all of our business through Fidelity.
They're the custodian of our assets. We are a registered
investment advisor firm Ria. We have open architecture, meaning that
(51:19):
even though we're through Fidelity, we have no pretermined destination
for your assets. We act in a fiduciary capacity for
not only investment management, asset protection, which involves insurance products,
and legacy planning, which also could possibly include insurance products
depending on how you want to leave assets to the
next generation. And as I said, I keep on saying
(51:42):
this over and over again. You have to be aware
of folks that we live in a society today. We're
the greatest wealth transfer in the history of mankind is
now taking place as we speak because some of the
earlier boomers are passing away, and now it's time to
basically get it together, button it up, and put yourself
in a position that you know exactly what's going to happen.
(52:03):
What I call the domino effect. When the first domino drops,
you know where the rest of them are going to go.
So again, our telephone my office is five one eight
five eight zero. Today we talked about lump sum distribution
versus taking the pension benefit. Give us a call if
we could be of assistance. God blessed, be safe and
happy New Year.
Speaker 1 (52:22):
Thank you for listening to Retirement Ready hosted Buying Dave Kopek,
w g WISE Retirement Planning Specialist. If you'd like to
talk with Dave or someone of the Retirement Planning Group,
call five went eight five eight zero one nine one nine.
That's five twenty five eight zero one nine one nine
during business hours, or visit Rpgbretire dot com. The Retirement
(52:45):
Planning Group has five convenient offices located in Albany, Malta,
Glens Falls, Syracuse, and Oneana. Tune in again next week
for retirement planning strategies with Dave Kopek right here on
WG wise Retirement Ready. The information or services discussed on
this show is for informational purposes only and is not
(53:08):
intended to be personal financial advice. The investments in services
offered BYAS may not be suitable for all investors. If
you have any doubts as to the merits of an investment,
you should seek advice from an independent financial advisor.
Live from the wgy iHeart Studios. Welcome to Retirement Ready
with your host Dave Kopek from the Retirement Ready Show.
Every week, Dave and his team discuss the ways they
can help people make informed decisions about a wide array
of retirement planning information that can support you and developing
a more certain financial future for you and your family.
(00:21):
Now it's time for Dave Kopec, w G WISE retirement
planning specialist.
Speaker 2 (00:48):
All Right, good afternoon on Dave Kopek, your host WGY's
retirement planning specialists. Been here a long time, but i'm
radio for twenty five years. We are an independent investment
advisory firm, custodian all of our assets through the Mothership Fidelity,
(01:08):
open architecture, no pre determined destination not only on the investments,
but the insurance products. We act in a fiduciary capacity
investment management asset protection legacy. The eighty five trillion dollar
question for a lot of us, and our focus today
on this topic specific show, is what should you do
(01:31):
when that time comes? Either a lump sum distribution or
take the company pension. And for some of you it
will be a very critical decision and one that you
should really, really seek help and assistance before you make
that final decision. Why am I talking about this today
(01:56):
because I picked up the UH Business All of Any
Business Review the website yesterday and on the headline it's
got mohawk fine paper. Pension plans taken over by a
federal agency, the Pension Benefit Beneficiary Benefit Guarantee Corporation, a
(02:26):
federal agency that acts as a backstop the command and
basically protect the retirement assets. Now, this company was sold
recently to an Italian company in February. What this ultimately means,
I guess it will play out, but this is not uncommon.
(02:50):
It has happened many times. All you have to do
is think about Saint Clair's and what that predicament is
for a lot of those individuals that worked at the
hospital for decades. And today we're going to talk a
little bit about what you should be thinking about with
your company's pension plan and the options that are available
(03:12):
to you, and how you should go through and figure
out what makes sense for you. At the Retirement Planning Group,
we are big believers in controlling your own destiny. That
means that I would much rather have Dave Kopek, Julie
(03:37):
my wife, my son's making the decisions with the assets
rather than someone else on the investment committee. So, to
make a long story short, today's program and our topic
today is what should you do? Should you take the
(03:57):
lump sum benefit rolling into an IRA or should you
take the pension benefit that is being provided to you
through your former employer. So we'll go through some of
the pros and cons and some of the things that
you should think about. But before we get into it,
(04:20):
I want to give you a little bit of some data,
some information that you should be aware of. The first
is is that we live in a society today. Well,
there's all sorts of surveys and data and information. There's
overload and as they said, the mothership Fidelity provides us
(04:43):
with a lot of information, a lot of research that
they do. But the bottom line gets down to is
that nearly half of America's retirees say that spending their
savings is creating anxiety and just having an emotional toll
on them, and nearly a third are spending money faster
(05:05):
than what they expected. This is according to the most
recent survey twenty twenty four. So not having a clear
plan for drawing down your savings and know how to
generate income in retirement are major factors in individuals anxiety.
(05:32):
I talk about a laying in bed and watching the
fans spin, and alarmingly, fewer than a third said they
have a specific income plan in place for their retirement years.
Forty one percent that they don't know how to stage
their withdrawals from their retirement accounts in half fewer than
(05:58):
half forty nine percent know how to handle required minimum
distributions rmds to minimize taxes and also to have their
sound retirement income plan stay in place. So our position
is that not having a clear plan for withdrawing from
(06:20):
your qualified plans generating income can be detrimental. First and foremost,
you need to prioritize which things you're going to spend
money on what we call baseline income estimating. Have a
(06:41):
pretty good guestimate of what it's going to cost you
to have a roof over your head, pay the taxes,
some discretionary money, sitting on the sidelines, paying the power bill,
et cetera. Baseline income big one today is course healthcare cost,
which I talked about this morning. How much money are
(07:03):
gonna have to set aside on the sidelines healthy sixty
five year old couple. Today, Fidelity is saying that you
need to have about three hundred and thirty thousand dollars
sitting on the sidelines for out of pocket expenses for
your retirement years one hundred and sixty five thousand dollars
(07:23):
at peace. And of course, compounding a lot of this
anxiety that individual are facing today is the lack of
confidence in the long term salvency of social security, which
(07:44):
ninety percent of the respondents say is important mandatory in
order for them to have quality of life in their retirement. So,
as I said, you're at that stage of life now
where you're gonna have to start approaching retirement and you're
(08:07):
going to have to start weighing the benefits of taking
the check from the company or the lump sum distribution
that you typically are allowed to do with your four
oh one K and your cash balance accounts. As Roy
quite well aware, pension benefits are typically a fixed dollar
(08:31):
amount beginning at retirement and until you pass away. Some
plans offer what they call a survivor benefit to a
spouse and then of course, if you do not take
that option, which is the pension option or the annuity option.
You have the ability to take lump sum distribution one
(08:54):
time trustee to trustee transfer a non taxable event that
willow allows you to basically take responsibility of managing those
assets throughout your lifetime, your entire retirement years, for not
only you, your significant other or your spouse. Daunting task.
(09:22):
How do I do it? Especially for people that spent
their whole life working, not managing assets. So today's show
is about lump sum distribution, the pension option that's available
through your employer, some of the differences between the lump
sum versus the pension payment, and what are the advantages
(09:45):
and disadvantages of both. Again, I'm Dave Kopak, retirement planning
specialists for WGY. We have five locations here in New
York State now Syracuse, Oneono, Glen's Falls, Aubny, Multi Lash, Saratoga.
If anything that I'm discussing is of interest to you,
We've had a lot of people call in from the
(10:06):
radio show that requested our complementary consultation. Our telephone number
at our office is five to one eight five eight
zero one nine one nine. That's five one eight five
eight zero one nine one nine. You can check us
out on the web rpgretire dot com, rpgretire dot com.
(10:27):
I'll be right back the eighty six percenters. Do you
know that eighty six percent of the population has no
defined benefit pension plan. For most of us, we have
to take our life savings and create a paycheck for
the rest of our lives in retirement. What is your
plan for retirement income distribution? How you manage your assets
during the most critical years of your lifetime. Nobel Prize
winning economist William Sharp has called retirement income distribution the nastiest,
(10:51):
hardest problem in finance. He points out that investment, uncertainty,
and mortality can derail the most careful laid out retirement
income plan. Call our offices today to start the process
of building a retirement income distribution plan. After forty one
years of being in the financial services business, you need
to start taking action to start building your own personal
retirement income distribution plan. How do you do that? To
(11:14):
take action? Five one eight five eight zero one nine
one nine. That's five one eight, five eight zero one
nine one nine or RPG retire on the web. Don't procrastinate,
motivate to start building your retirement income distribution plan. Five
one eight, five eight zero one nine one nine. The
greatest risk in retirement. Most of us have no plan
for We're insurance to cover the expense. A long term
(11:37):
care event can impoverish a spouse, drain your life savings,
and cost stress and anxiety on your family. What is
your plan and how will you pay for a long
term care event? Call the Retirement Planning Group today discuss
options you should consider to protect your estate and have
choices and independence. Take action call today five one eight
five eight zero one nine one nine or RPG retire
(11:59):
on the web. All right, we are back. I'm Dave Kopek.
(12:32):
This is Retirement Ready. Topic specific show today. We're talking
about the lump sum distribution versus taking the pension from
the company or the annuity option. You know, we live
in a world today that a lot of us guys
we exit stage right before our spouses. And there's been
(12:54):
a lot of focus, there's been a lot of marketing,
there's been a lot of target marketing towards women because
of this wealth transfer. It's a staggering number, eighty five
trillion dollars. But the thing is is what's staggering is
that eventually a lot of that money is going to
be controlled by women, because why the guys die first.
(13:18):
So in this study it talks about the status, what
has happened since the pandemic, and what stage are women
in right now in regards to dealing with this wealth transfer.
The first is this women are taking control of their finances, investments,
(13:39):
and understanding retirement planning better. Fifty eight percent of that
nearly three out of five women worry about money several
times a month, or more less than half of women
(14:03):
know how to make their money last for a lifetime
in retirement. Less than half. Inflation purchasing power is the
top financial concern for nearly three out of four women.
(14:26):
Two thirds of women see a US recession ahead, but
plan to double down on retirement savings. This greatest surge
of retirees eleven thousand, two hundred people almost twelve thousand
(14:47):
a day. Very soon are reaching that magical age of
sixty five. Our retirement systems will be tested like never before.
You're going to have to take control, and you're going
(15:08):
to have to find out and make good financial decisions,
or you're going to find yourself behind the eight ball.
Twenty twenty four saw the greatest surge of Americans turn
in sixty five. I talked about this last week. So
(15:34):
what's your plan when you sit down and you have
your conversation with your financial team and you start talking
about the lump sum versus the pension benefit. Here's some
of the key differences that you need to understand. The
first one on the lump sum, all of the money
(15:59):
that is inside your typically it's a define contribution plan
four oh one K four oh three b TSP New
York State deferred compensation. All that that money is rolled
into a trustee to trustee transfer from your employer's plan
into a self directed IRA, and then you have the
(16:23):
ability to manage those assets based off of your income,
need and also what is required for you to have
quality of life. The second thing on a lumpsom distribution
that you need to be aware of you or someone
that you hire, such as the retirement planning group. You're
(16:49):
now responsible for managing those assets throughout your lifetime, which
could be twenty three prety plus years. My oldest client
that just passed away was one hundred and two. I've
got a lot of clients during their nineties and eighties.
(17:13):
Once you pass away, the money doesn't go away some
of the pension options, which we'll go through in our
next series of bullet points. Here, the remaining assets inside
the IRA go to named beneficiaries. You have a primary
(17:34):
which is typically the spouse, and then you have contingent beneficiaries.
You got three kids, it's Bobby, Billy, and Susie as
the contingent beneficiaries. Pretty straightforward pension payments. You select the
(17:56):
company's pension payment, which is typically offered through an insurance
company or they basically self insured. Payments start with probably
within thirty to sixty days after you retire, and they're
(18:16):
paid monthly into your account until you pass away. The
pench of Benefit Guarantee Corporation which I just talked about,
provides some insurance in case the plan is unable to
(18:38):
make their commitment. There's guidelines as far as how much
they're going to protect the third component. Monthly payments cease
once you pass away, unless there's a survivorship benefit for
(19:01):
the spouse. If the spouse passes away quickly shortly after
the individual that was receiving the payments initially from the employer,
benefits are gone. Benefits are gone. So if you have
an early demise. You've been working for the company for
(19:22):
thirty years, you pass away after five years, both you
and your spouse. That's it. There's no survivor benefits. There
are no survivor benefits. Now there's a gidea up with
some of these which we've seen. Some of the companies
(19:43):
require retirees to take monthly payments to keep their health
insurance proceeds. Some not all, a portion, not all of it.
But you have to read the fine print and see
exactly what that obligates you to. Because you're all quite
(20:04):
well aware. Health insurance is one of the most critical
components of retirement planning today. It used to be number
two or three for a lot of individuals. It's number
one today as far as the cost of healthcare and
how it will affect you in regards to the amount
of cash that you're going to pay out of pocket.
I just told you in the most recent survey and
(20:27):
also the calculation that Fidelity did through their research arm
they estimate a healthy sixty five year old couple today
will spend somewhere between three hundred and twenty to three
hundred and thirty thousand dollars in out of pocket expenses
and this does not take into consideration long term care.
(20:51):
So what are the advantages that take in a lump
sun versus a pension benefit. The greatest advantage is you
own the money, no one else. You're controlling your destiny.
(21:15):
Something happens to you prematurely, the money will go to
your spouse and your loved ones. Not the case for
a lot of individuals. I'll take the State of New
York pension system right now. What's the greatest risk for
a lot of individuals that are going to retire from
the State of New York The first check. If you
(21:39):
don't get to the first check, you get a three
times your salary payment. You're making one hundred and twenty
thousand dollars a year. Your loved one, unless you have
additional coverage group or another life insurance policy in place,
your spouse is going to get three hundred and sixty
thousand dollars, not the sixty some thousand dollars you were
(22:00):
going to receive in a pension benefit. Try to take
three hundred and sixty thousand and create sixty thousand. It's
pretty hard. One of the greatest risks for state retirees
is to get the first check to get the benefit.
(22:21):
So we know what the advantages are taking the lump sum,
we know what the disadvantages are taking the lump sum.
What is it with the pension benefit. Well, the pension
benefit is you can sleep at night. But that doesn't
necessarily mean that it's your best option because if you
take the lump sum distribution, you can go out and
(22:44):
you can competitively, competitively go to insurance companies and see
what they'll offer you. As far as a guaranteed income
payment for life. Yeah, yes, the private pension is going
to pay. But the question is is that what type
(23:07):
of guarantees are so to associate it with the private
pension and who's guaranteeing it New York State, if you
purchase an annuity in the State of New York through
the New York State Insurance Guaranteed Fund, you get an
(23:27):
additional five hundred thousand dollars of protection. If it's a
private pension plan, that's not necessarily so it's only as
good as the credit paying a bit it ability the
credit worthiness of the corporation that's issuing the pension benefit.
(23:53):
So the bottom line bottom line is this, if you're
a some pension selection makes sense for you. You need
to get going and you need to figure out exactly
how you're going to allocate those money what we call
the red zone. Three to five years before you retire,
(24:14):
you should have your plan in place as far as
how you're going to allocate those assets in order for
you to facilitate the income that's necessary. If the pension
benefit is the one that you align most with, then
you have to figure out if the pension that is
being offered to you through the company is advantageous versus
(24:39):
if you took the cash and you created your own
pension benefit that allows you to have a survivor benefit
rather than if the pension benefit goes away, the money
doesn't go away, which is critical for a lot of
people retirees with pension benefits. In this resurvey, too, basically
(25:13):
came out they were more financially stable and they had
more of a comfort. They weren't having such high anxiety.
Now does that mean one hundred percent of your money
should go on there? Absolutely positively not. But what it
does mean is that that baseline income, having a certain
(25:36):
part of your overall and investment portfolio allocate it in
order to pay the bills makes all the sense in
the world. All Right, we're gonna have to break here
in a very short period of time. When we come back,
we're going to talk about this in greater detail. I'm
Dave Kopek, WG Wise Retirement Planning Specialists. We'll be right
(25:59):
back to show. All right, you're back. A little beetles
(26:43):
there the sack. That's the Beatles, right, yeah, the Beatles. Alright,
Oh flairybody's enjoying their day. Happy holidays. Oh my god,
I can't believe Christmas is overwear over overwear. You could
(27:05):
tell I'm dragging over with And we're gonna go into
the year twenty and twenty five in a few days.
So hopefully you had a wonderful holiday and happy New Year.
When I talk to you next time, it will be
two thousand and twenty five, which is hard to believe.
So in the year twenty and twenty five, if that's
(27:26):
year you're going to retire, there's a lot of your retiring.
Almost twelve thousand people a day are going to retire
at the magical age of sixty five. Twenty and twenty four,
we saw the greatest surge of Americans turn in sixty five,
which means a lot of you are gonna have to
(27:47):
make some very important decisions for your retirement safety. So
if you are contemplating going out into the green pastures
of retirement, I would highly recommend that you motivate, don't procrastinate,
(28:07):
because setting up your retirement income distribution plan is critical, critical.
And when I say it's critical, I'm fighting a cold
a little bit, folks, and I apologize for that. So
(28:28):
there's a word now that we hear all the time
and see l word, and that's called longevity. And what
you want to do myself, I don't know about you.
I don't want to go into retirement and have a
fifty sixty seventy chance of success. I want to have
(28:52):
one hundred percent chance of success as far as the
amount of income that I know it's going to come
in the door, guarantee whether it's any day or any day.
You know, a bad market, a good market. So the
thing is is that there's a lot of gurus out
there Monday morning quarterbacks. They have all the answers and
(29:17):
they have this I guess this combined focus on how
much they hate annuities. And that's fine, that's their prerogative.
But I always, like I've mentioned this on the radio
(29:37):
for a long long time. I've always said, if anybody
wants to come in and debate me about annuities, I'm
here every Saturday, and I'm more than happy to sit
down with you because there's a lot of misinformation out there.
You know, You've got guys that come out and they
(29:59):
say they hate a new and the only reason why
the financial advisor is recommending them is because they get
a big fat commission check. They're ill liquid, you can't
get to the money. Well, my answer to that is
that it's an absolutely one no. You know, you've heard
(30:22):
this one. Annuities have nosebleed level fees right now for
the most part. The answer to that is an emphatic no. Now,
variable annuities have fees that are higher than you would
(30:42):
have in a managed account with ETFs, et cetera. But
fixed annuities, indexed annuities, deferred income annuities, single premium media
annudies don't have any fees at all. No fees ever
get deducted from the stream of income. So the most
(31:04):
important retirement goal for most of you that are listening
today as what to make sure you never run out
of money, right, you want to make sure you never
run out of money. The problem is is that when
your portfolio manager is gone, probably through the pearly gates, right,
(31:30):
and you're sitting there and you're well in your seventies
and eighties, and you're trying to figure out, how do
I make this thing last as long as I'm going
to last, They're nowhere to be found. So, having interacted
with thousands of investors over the last forty three years
(31:53):
that I've been in business, I can assure you. I
can assure you one thing. The individuals that I've worked
with that put an annuity, not all their money, but
put an annuity into their income distribution plan for income
(32:16):
that's guaranteed for the rest of their lives, not one
of them has ever come back to me and said,
you know what, Dave, I wish I never did this
now one So why is there so much misleading information? Well,
they have an agenda. They have an agenda, and what's
(32:36):
their agenda? They're smart, they can manage money. Well, here's
a guy that's really smart. William Sharp. Sharp is smart
Sharp Ratio Stanford University scholar, and he says, right now,
(33:00):
he loves annuities. Why does he love anuties? He loves
annuities because he has two things that no one can answer.
Sequence of returns. You get into the market in a
bull market, a bear market, low interest rate, high interest rates?
(33:21):
Is it a prolonged bearing market? What is the distribution?
What do you have to take off the portfolio in
order to satisfy your income needs? And the second one
is sequence of returns, sequence of returns in longevity? Sequence
(33:43):
of returns in longevity? How long will you live? You
can answer that one. I'll tell you what. You're in
pretty good shape. So the fears that do you have
right now seven out of ten is that you want
(34:09):
to have guaranteed income for the rest of your lives,
and most of you shy away from the only investment
program that can afford you that. And I always say this.
When I got into the business in nineteen eighty two,
which seems like a long time ago, but it went
(34:30):
by awful quick, folks. A lot of things have changed.
Cars have changed, technology has changed, investments have changed, the
brokerage business has changed, and now anuities have changed also
where they will facilitate pension benefits that you you you
(34:54):
you control, not someone else and you don't have to
worry about the pension benefit beneficiary guaranteed corporation coming in
and taking over your retirement plan. You also hear that
the you know annuities have huge tax problems. Well, if
(35:19):
your money's inn I raise four to one k's TSPs
New York State deferred compensation four oh three b's, you're
not going to have a tax problem. It's so relevant.
It's pre tax money. It all grows on a tax
deferred basis, and when the money comes out, it's all
taxes ordinary income. There is no tax preference zero. So,
(35:49):
as I said at the beginning of today's show, running
out of money prior to death is the average retirees
greatest fear. They fear it more than death. And there's
an answer. There's an answer to this puzzle. There are
(36:11):
investments that will give you guaranteed income for life and
those fears will never be realized. So as long as
you're on this side of the grass, you'll keep on
receiving those retirement paychecks and then you're going to have
(36:33):
to find a way how to spend it. And when
I say that they're different and they're complicated, they are
because you can build out a portfolio with them where
you basically give yourself across the living adjustment. Also you
stagger the payments. You stagger the payments. So I know
(36:56):
that this is a little bit more in depth that
you might want to here today. But as I said,
a lot of you, almost twelve thousand of you, every
day will turn sixty five and you're going to have
to make a decision whether you receive a lump sum
or a pension payment. And you need to know the difference,
(37:17):
and you know what's going to be positive for you
in your own particular situation, your family and your loved
ones especially especially, and when to over emphasize this, if
you want to leave money to your family, you can
(37:39):
build a pension inside your own IRA. You don't have
to take the company's plan. And to be honest with you,
you're going to have more flexibility and chances are pretty
high you're going to have what more money. I'm Dave
Kopek today we're talking about lump sum distribution versus a
selecting the pension option through your employer. Anything that I'm
(38:01):
talking about. I know we have a lot of listeners
outside the five one eight area code. Give us a
call at my office of five one eight, five eight
zero one nine nine five one eight five eight zero
one nine one nine. Check us out on the web
rpgretire dot com. Again, that's RPG retire. It's just the
initials of the Retirement Planning Group rpgretire dot com. I'll
(38:23):
be right back after this quick message. Your partner for success,
David Kopik, heir WG Wise retirement planning specialists the Retirement
Planning Group. We understand that retirees face many important decisions
that can affect their long term financial success. Some of
these decisions revolve around making investments that will help create
a hedge against outliving their assets, the impact of inflation, taxation,
(38:48):
and rising healthcare quests. Most of our clients like the time,
the desire, or the experience to manage their own investment portfolios.
We consider it to be an honor and a privilege
to help our clients make sound investment decisions thy will
contribute to a secure financial future for them. Because over
ninety percent of our clients are retirees with similar concerns,
(39:10):
we are in the best position to approach such challenges
with experience and skill. Give us a call today at
five one eight, five eight zero one nine one nine
five one eight five eight zero one nine one nine
or RPG retire on the web. We run out of
money in retirement where your investments provide income for possibly decades.
How do you navigate the two greatest risk in retirement
(39:32):
sequence of returns in longevity at the Retirement Planning Group.
Our Bucket of Money approach addresses these concerns and we
offer a complementary consultation to discuss this with you. Call
our office today for a free complementary consultation to develop
your own personal retirement income Distribution plan at five eight
five EID zero one nine one nine. That's five eight
(39:53):
five eat zero one to nine one nine. All right,
(40:25):
we are back, hopefully Santa Claus was good to you, Behanikah.
There's a saying, and I'm trying to remember it. If
what you were doing was wrong, when would you want
(40:46):
to know about it? There's a book that's out right now.
If you've got a pen and a piece of paper,
or if you're recording the show or whatever it is,
you can go back listen to it. It's a gentleman
by the name of David McKnight. It's called the guru gap.
(41:11):
How America's financial gurus are leading you astray, and how
you should get back on track. There's a lot of
sizzle out there. There's a lot of financial advisors that
(41:32):
are selling books and doing TV shows and radio shows
and ringing the bell in some of the stuff that
they're advising people to do. And I'll read one of
his blurbs here. What David says is in fact, disciplined
investors who have saved well and played by the rules
(41:55):
risk losing hundreds of thousands of dollars over the course
of their retirement by heating this outdated, one size fits
all advice. And I agree, I agree wholeheartedly. I don't
(42:18):
think there should be a cookie cutter approach in managing assets.
And when you see a room filled with one hundred
people on telephones and they're basically got headsets on and
they're taking in phone calls and they're giving advice, they're
putting the information into a database and it comes out A.
So you go in the A box, it comes out
(42:38):
B on the B box, the segoes in the C box.
That's not retirement planning, that's a marketing strategy. So what
you need to find out is how you can shield
yourself from what I consider it to be marketing versus education,
(43:04):
And at the Retirement Planning Group, we try to make
sure you understand the risk that's associated with qualified assets
iras four oh one k's four oh three bs TSPs
because there's like forty trillion dollars forty of the eighty
five trillion that's passing on, forty of it is qualified assets,
(43:27):
forty trillion dollars. And the thing that you have to
try to figure out is what, how, when, where? Who
is going to take care of that money when you're alive,
when you're passing it on to the spouse, and then
ultimately when you're transferring it to the next generation. It
(43:50):
is complicated to the people that I respect, Natalie Choate,
who's an attorney that's specialized as is in qualified plan distribution,
and also a gentleman who's the CPA ED slot SLOTT,
the Retirement Planning time Bond. It's all the money out
(44:15):
there and qualified assets. So if you're trying to figure
out lump sum versus the pension benefit, if you're trying
to figure out how do I build income streams and
strategies that not only will take care of myself my spouse,
(44:39):
adequate wealth replacement at the first death, transferring assets to
the children tax sufficiently, and you'll never outlive your retirement savings.
There are strategies out there, but you need to motivate.
It's not buying the right stock or buying the right bond,
allocating it properly, building some hea, getting alternative investments. It's
(45:04):
finding out your risk tolerance and are you one of
the group of seventy seventy percent of the people want
safety and guarantees seventy that's seven seven h seventy excuse me.
(45:27):
So you need to motivate. You need to be disciplined.
You've saved well, you've played by the rules. Now it's
time for you to basically get your retirement income distribution
plan together three to five years. The sooner you'd start
doing it, the better off you're going to be. Start
building your buckets of money, Start understanding the dynamics of
(45:49):
qualified assets, learning the different retirement strategies out there, and
the different products that are available to you in order
for you to facilitate what you're looking for. But, like
I said, there's a vast amount of wealth that's being accumulated,
(46:13):
and there's a vast amount of money that is going
to be transferred over the next twenty to thirty years.
But when I gave you those statistics in the beginning
of today's show, I think they're shocking. To be honest
with you, nearly half of American retirees right now say
spending their savings is creating anxiety and it's having an
(46:35):
emotional toll on them half and they're spending money faster
than what they expected. So what I've always said over
and over again, retirement should be a time of enjoyment,
not of anxiety. Retirement should be a time where you're
basically maximizing your go go years. You don't have to
(46:59):
spend as much time in your slow go or your
no go years, But during your go go years, you
want to basically be in a position where you can
do the trips, do the vacations, go to Disney, do
the cruises, do all the things that you want to do,
and not worry about do I have to sit and
watch CNBC all day long the stock market. And then
(47:23):
you also need to understand how sequence of returns inside
a portfolio that doesn't have breaks or what I call suspenders,
and a belt on the portfolio can really have a
dramatic impact as far as the amount of withdrawals that
you can take off the portfolio. So let's kind of
(47:47):
highlight because we're gonna have to leave here in about
three four minutes, say goodbye. If you're in a situation
where you know that you're going to have the option
to either take the lump sum benefit or take the
annuity or the pension payment from the corporation, you need
to know the difference. You need to know the nuts
(48:09):
and bolts. You need to get underneath the hood and
see the fine print. Who's guaranteeing the pension benefit. Like
I said, there's a company here locally in the Capital
District region. It's going through it right now where the
pension benefit Guarantee Corporation is now just took over the
pension liabilities from Mohawk Fine Papers, which is the printing company.
(48:39):
It's been there for decades. I believe you know. One
of the saddest stories I've been in business a long time,
one of the worst stories that I've seen in all
the years that I've been in business, is what happened
to the money at Saint Clair Hospital, Where did it go?
(49:05):
Where did it go? And why isn't there more definite
black and white answers as far as who was responsible
for the demise of that retirement plan, because that has
affected a lot of hard working savers that deserved answers
and deserve to receive those moneies when they went into
(49:27):
their retirement years. Don't ever put yourself in that position.
Don't ever put yourself in that position. As I said,
I'm a big believer in controlling your own destiny. You
can create your own pension benefit. You're going to have
much more flexibility. The money you don't utilize will pass
(49:49):
on to your loved ones, your errors. You can design
a plan that's more than adequate enough as far as
wealth replacement for a surviving spouse, and then live your life.
Do what you're supposed to be doing, having fun, dancing
in the street. But as always, we offer a complimentary consultation.
(50:16):
As I said, we have five locations now. We just
opened up a Syracuse office. We're in Syracuse, Oneana Aubny
Malta slash Saratoga Glenn's Falls. Be an honor, be a
privileged to sit down with you have a chat and
see how we can facilitate what you're looking for during
your pre and post retirement years. Because a lot of
(50:37):
times people come in and we say, hey, listen, you're
doing great, you're in good spot. You're in good spot.
But there's a lot of times too we say, you
know what, we think we can help you, go on
home and think about it. We never do business on
the first appointment because we don't think it's right. We
always want you to go home, get a second opinion,
and then you can make a decision if you feel
(50:58):
comfortable working with the retirement planning. Our website is rpgretire
dot com. It's rpgretire dot com and on there you'll
find out we do all of our business through Fidelity.
They're the custodian of our assets. We are a registered
investment advisor firm Ria. We have open architecture, meaning that
(51:19):
even though we're through Fidelity, we have no pretermined destination
for your assets. We act in a fiduciary capacity for
not only investment management, asset protection, which involves insurance products,
and legacy planning, which also could possibly include insurance products
depending on how you want to leave assets to the
next generation. And as I said, I keep on saying
(51:42):
this over and over again. You have to be aware
of folks that we live in a society today. We're
the greatest wealth transfer in the history of mankind is
now taking place as we speak because some of the
earlier boomers are passing away, and now it's time to
basically get it together, button it up, and put yourself
in a position that you know exactly what's going to happen.
(52:03):
What I call the domino effect. When the first domino drops,
you know where the rest of them are going to go.
So again, our telephone my office is five one eight
five eight zero. Today we talked about lump sum distribution
versus taking the pension benefit. Give us a call if
we could be of assistance. God blessed, be safe and
happy New Year.
Speaker 1 (52:22):
Thank you for listening to Retirement Ready hosted Buying Dave Kopek,
w g WISE Retirement Planning Specialist. If you'd like to
talk with Dave or someone of the Retirement Planning Group,
call five went eight five eight zero one nine one nine.
That's five twenty five eight zero one nine one nine
during business hours, or visit Rpgbretire dot com. The Retirement
(52:45):
Planning Group has five convenient offices located in Albany, Malta,
Glens Falls, Syracuse, and Oneana. Tune in again next week
for retirement planning strategies with Dave Kopek right here on
WG wise Retirement Ready. The information or services discussed on
this show is for informational purposes only and is not
(53:08):
intended to be personal financial advice. The investments in services
offered BYAS may not be suitable for all investors. If
you have any doubts as to the merits of an investment,
you should seek advice from an independent financial advisor.
Popular Podcasts
Bookmarked by Reese's Book Club
Welcome to Bookmarked by Reese’s Book Club — the podcast where great stories, bold women, and irresistible conversations collide! Hosted by award-winning journalist Danielle Robay, each week new episodes balance thoughtful literary insight with the fervor of buzzy book trends, pop culture and more. Bookmarked brings together celebrities, tastemakers, influencers and authors from Reese's Book Club and beyond to share stories that transcend the page. Pull up a chair. You’re not just listening — you’re part of the conversation.
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Dateline NBC
Current and classic episodes, featuring compelling true-crime mysteries, powerful documentaries and in-depth investigations. Follow now to get the latest episodes of Dateline NBC completely free, or subscribe to Dateline Premium for ad-free listening and exclusive bonus content: DatelinePremium.com