Episode Transcript
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Speaker 1 (00:03):
Live from the wgy iHeart Studios. Welcome to Retirement Ready
with your host Dave Kopek from the Retirement Planning Group.
Every week, Dave and his team discuss the ways they
can help people make informed decisions about their retirement assets
to maintain, improve, and secure their desired quality of life.
Here's your host, Dave Copet.
Speaker 2 (00:41):
All Right, April twelfth, and it's snowing. There should be
a rule, Zach that says after April feet now snow.
I'll take rain. You know, one snow. It's a four
letter word. No snow. That's two words, right, you know,
(01:05):
no snow is two words, but snow's a four letter word.
Can we make that a law? No snow in April.
Did they change daylight savings time? I think they did.
I it stays permanent now, I think I think I
saw something about that. That's been a discussion for years.
I don't know if they officially did it. I don't
know either. I haven't heard anything more about it. I
(01:26):
thought I quat something when I was driving back from
the New York area the other day. But it's good
to be here, good to see Zach. Holy week. So
for a lot of us, if you're a Catholic, it's
a busy week going to church and probably other denominations.
But I know Holy Week is always I can still
(01:48):
see my mother, you know. It was always a very
very special time of a year. And it finalizes with
a course Sunday, which is Easter Sunday. And we've got
tomorrow Palm Sunday. So enjoy your week and as always,
(02:14):
keep the faith get you through tough times. And as
we are quite well aware, we are going through some
peculiar times. I talked about this this morning, and I'm
going to talk about it in greater detail about individuals
that are close to retirement or in retirement and why
(02:38):
they need to understand how to allocate money. And I
keep on saying this over and over and over and
over again. Managing money during your retirement years when you
need to create a check is a heck of a
lot different than during your accumulation years when you had
to build that pot of gold and then ultimately turn
(03:02):
that into an income stream. So today we're going to
talk about sequence of returns, point of entry, and we're
going to talk a little bit about how retirement income
distribution in this new world that we live in is
critical if you get barons, which I do. It's a
(03:24):
financial publication comes out every Saturday. There's a good article
that's in there this week which I'll kind of highlight
some of the information, and it talks about why you
shouldn't overreact. You know, we're in a mania right now
(03:48):
the market. The title of this article is the market
is frantic, you shouldn't be. And after being in the
business now for forty three years, pretty easy for me
to sit here and tell you all the things that
I've gone through. I know that on nineteen eighty seven,
(04:12):
when the market went down twenty two percent in one day,
there really was a shock to everybody. But if you
also remember, the market came back very quickly after that.
We live in a world today where with a press
(04:33):
of a button, portfolio managers hedge funds can move billions
of dollars of assets, not only on the equity side,
but also on the fixed income side. So if you
think you're smarter than the computers and the algorithms and
(04:57):
the mines on Wall Street, and you can go ahead
and try to beat the odds. But the odds say this,
and they consistently say it over and over and over,
don't try to time the market. So when the stock
market is gyrating wildly and anxious, and headlines are all
(05:20):
over the place, and a lot of investors are scratching
their heads and saying should I stay or should I go?
What should you do? And the answer from Dave Kopek
and the Retirement Planning Group is do nothing, do as
little as possible. That's why it's critical that the components
(05:45):
that you set up the buckets of money before you
walk into retirement are critical. Your cash position, what you
have in fixed income, how much you have allocated to equity,
and if you're listening to all the gurus and all
the smart people on Wall Street, how much do you
(06:05):
have in alternative investments? Now, there was a story going
around this week, whether it's factual or not factual, but
the scuttle butt was is that we were going to
have another major meltdown in fixed income because of the
over leverage of one of the hedge funds. That's why
we saw the gyrations in the fixed income. That's why
(06:27):
we saw the market and the bond market mirror one another.
Bonds did not go down, Bonds went up, and yield
that's not supposed to happen. The flight to safety didn't happen.
Eventually it did, It phased out a little bit. But
there was a lot of people on Wall Street. I
(06:47):
remember watching Bloomberg and Maria Bartomo and there were a
lot of people. You could see it on their face
what is going on here? So you know these brilliant
minds on Wall Street that keep on creating these programs,
(07:08):
investment plans, investment products because they think they're smarter than
the average Joe. Maybe not. There was a lot of
liquidation going on this week, not because they wanted to liquidate,
but they had to liquidate because the force liquidation based
on margin margin calls three to four to five to
(07:31):
one that some of these hedge funds use. So they
had it wrong. The hedge funds had it wrong. They
basically had it set up that they thought that the
bond market would rally if there was a gyration in
the stock market. And guess what, that's not what happened.
So that's why I think a lot of the noise
that came out of the financial markets and all the
(07:53):
comments that came out of the White House was basically
to appease a pease Walls Street, and also the investors.
So all of this that's going on, I haven't heard
one person yet that has the answers to this magical
(08:16):
new word that we're called tariffs. You take ten economists,
you're going to get ten different answers, and usually at
the end of ten, eleven, twelve months, one of them
is going to be right. It's no different when they
try to do the prediction of the stock market at
the beginning of the year how it's going to end
(08:38):
up at the end of the year. As you all
are well aware, in twenty twenty four, very few if any,
were correct the type of gains that we got in
twenty twenty four, and they won't be right this year.
So tariffs are complex, and experts wherever you are to
(09:02):
are giving you a guesstimate of how they will affect
the economy. Now, what's the positive out of all this.
You've got a reduction in spending, You've got lower costs
for energy. Looks like we're getting a major overhaul of
(09:27):
our tax policy and regulations. So all the things that
would be beneficial for powering our economy, our GDP are
falling into place. And I don't care who you listen to.
There's a lot of people that I listen to on
(09:48):
Wall Street that I have a lot of respect for,
and some of them have basically said that this is
an over reaction, an overreaction. These are headlines, it's not
actual data, and the data that has come out has
(10:10):
been positive. Jobs inflation, go through the whole laundry list.
But Wall Street's having its convulsion right. Everybody that's sitting
there on Monday morning has all the answers of what
was going to happen over the weekend, and it's easy
(10:33):
for people to get frightened and scared and make decisions
that are really not in their long term best interests.
So when I say what should you do when you're
in a situation like this, my suggestion is you don't
do anything until you really think it out. I'm never
(10:55):
a big believer to sell and go to cash because
that tells me that you were never allocated properly based
off of your risk tolerance. What I call which roller coaster?
Did you select the kiddy one or the big one.
(11:16):
If you pick the big one, you're probably gonna want
to get off. If you're on the kitty roller coaster,
you're going to say, hey, this isn't bad, right, but
fear fear right? And I started in this business. Guy
said to me, Dave, there's two things that motivate people.
Fear and greed. Right. So if you're trying to get
(11:40):
a hold of people, trying to give them an idea
of suggest you want them to motivate, there's two things
you got to think about, fear and greed. So you
got to start thinking about what are the best moves
for you at this stage of your life. Stage of
your life. And I want to overemphasize there's a quick
rundown that I'll go through with you, but take a
(12:01):
deep breath. We actually had a very strong week. You know,
if you look at the markets, and I'm not a
big believer, and if you listen to the show, you know,
I'm not a big believer on week to week, but
we had a major rally this week. We ended the
week on a positive note. Jamie Diamond told Fox Business
(12:23):
with Maria it's really hard to tell where we're going
to shake out on this whole thing. I have a
lot of respect for Jamie Diamond. He runs an unbelievable
platform called JP Morgan, but he basically says, I can't
give you the hard answer. You know, we could get
through this and not have a whole heck of a
(12:45):
lot of damage, or we could go through this depending
on how prolonged it is, and there could be some damage.
But overall, a lot of these blocks that are being
built are going to be very positive for the economy.
And you needed to take a till you needed to
sit tight. So today we're talking about point of entry,
(13:07):
sequence of returns. Where we are on Wall Street. I'm
here live in the studio. Do you have any questions
or comments if you want to call in? What e
on hundred talk WGY? What eight five fifty ninety nine?
What are you drinking over there? What are you drinking?
A beer? Red bull? That's what we tell the listening audience.
(13:29):
That doesn't look like a red bull. It looks like
a Heineken. I'm only teasing, folks. We'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
(13:49):
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, 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
(14:11):
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 take action five one eight,
five eight zero one nine 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
(14:34):
retirement income distribution plan five win eight five eight zero
one nine one nine. The greatest risk in retirement. Most
of us have no plan for or insurance to cover
the expense. A long term care event can impoverish a spouse,
drain your life savings, and cost stress and anxiety on
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(14:55):
Planning Group today discuss options you should consider to protect
your estate and have choices and independence. Take action well
today five one eight five eight zero one nine or
RPG retire on the web. What will you do? You
(15:47):
wa one, wait and buy your side you All right,
we are back in a snowy eighth roll twelfth upstate
New York spring day. I think after the radio show,
(16:09):
I'm going to take a swim in the pool. Zach
so nice outside. All right, we're talking about the gyrations
that were going through. You know, I did an article
not that long ago for the Business Journal and we
talked about black Swan events. I really wouldn't consider this
(16:32):
to be a black Swan event. I would say that
this is definitely definitely a jolt a jarring because the
handwriting was on the wall what he was going to do,
he spoke about it, gave us an indication this was coming,
and then all of a sudden, everybody's freaked out. So
(16:58):
the market action, of course, has been volatile. Why is
that date, Well, you've got computers running the ship now,
not humans, and you got algorithms, and there's certain bots
that will be turned on and turned off based off
of either some verbiage or technical analysis and forget about it. Okay,
(17:23):
So sudden stock market rallies and also on the other
side of the fence, folks sell us are more common
than you think, then they're going to be much more
common in my opinion as we move forward over the
next few years, because of that thing that we hear
about all the time. What's it called again, AI? Artificial intelligence.
(17:50):
So over the past forty five years, there's some homework
on this. Before we came in, the stock market's largest
decline in each calendar year averaged about fourteen percent, and
despite those drawdowns, stocks ended up forty five calendar years
(18:14):
thirty seven of the times positive, thirty seven out of
forty five. So if we remember COVID nineteen, that fun
time the stock market dipped thirty four percent, you remember
how much fun that was in just twenty three days.
Yet within a year of the market had not only
recovered but also risen seventy eight percent from its low.
(18:38):
People who sold got their knees and knock and couldn't
handle the stress. That sold during the panic missed one
of the largest recoveries ever in the market. So if
you can avoid selling, especially as an accumulator and continue
(19:02):
to buy stocks. You're going to find yourself most likely
in a better position. Right, So how do you do it?
How do you force yourself to do this? Well, it's
easy during the accumulation years, right, we all have heard
a dollar cost averaging. It's pretty simple. Right, you're buying
(19:25):
stocks up, sideways down. But over a period of time,
you know your periodic contributions and payments, you're going to
be doing fine. The question becomes, what about when I'm retired?
How do I take all that money and now turn
(19:45):
that into an income stream. Maybe I'll just do the opposite.
I'll start liquidating over a period of time. Well, buyer, beware, buyer, beware,
you could be putting yourself in a whole lot of hurt.
And there's been all sorts of data, all sorts of
information about sequence of returns during your retirement years. I
(20:11):
talk about this in our presentations are workshops. There's a gentleman.
He's an economist. He's a Nobel Prize winning economists, and
he talks about how to solve the nastiest, hardest problem
in retirement. His name is William Sharp. He's a Nobel
(20:35):
Prize winning economist. And has spent most of his career
thinking about that four letter word called risk. And he
has a little thing that most Wall Street people understand.
You got to pass the exam understand capital asset pricing
(20:56):
model for gauging systematic risk, which captures risk adjusted returns
on your portfolio. Now, recently, my good buddy William decided
that he wanted to go into the green pastures of retirement,
(21:17):
and he didn't want to run out of money, So
he said, wouldn't there be a good way for me
to try to figure out how do I take all
this cash that I've accumulated in my lifetime and create
lifetime income not only for myself but for my spouse
And basically have a pretty good idea that the money's
(21:40):
going to be there for an extended period of time, meaning,
in essence, the money doesn't go away before I go away.
So here's his words, not mine. You need to understand
all of the possibility please. To plan for the most
(22:03):
difficult problem in finance, says Sharp, is knowing how to
strike a balance between having enough money to meet your
current needs and having enough money to get you through
your lifetime. HM and he also acknowledges there's no easy answer. Oh,
he has a few ideas how retirees can better manage
(22:28):
their risk and basically addressed what he has called the nastiest,
hardest problem in finance. Those are his words, not mine.
So today when we come back, because we're gonna have
(22:49):
to break here in a couple of minutes, and I
don't want to get into because I got so much
data here, I'm gonna just wow you. We're going to
talk about creating a sustainable retirement income pland that allows
you to sleep at night, what I call pillow plan
like that one Zach pillow planning like that, you put
(23:17):
your hat on your pillow, you sleep, You don't put
your head on your pillow, and you're stressed out and
you're staring at the fan counting on how many revolutions.
So the big sources of uncertainty that can diminish your
money is sequence of returns right in point of entry.
(23:41):
And we're going to talk about how that uncertainty can
be eliminated. Maybe not one hundred percent, but you can
eliminate a lot of it. And it's basically called an
investment program that we call it the Retirement Planning Group.
Baseline income, baseline income, right, what is baseline income? Baseline
(24:10):
income allows you, right, a retirement income plan that gives
you three components, because there's no more pension plans unless
you're a state retiree, work for municipality, county. But in essence,
(24:32):
most of us, nine out of ten of us now
do not have define benefit plans. We're going to have
to create a retirement income plan that incorporates three things, right,
because seven out of ten of us, almost eight out
of ten of us, want this a portion of it
guaranteed guaranteed income component Number two growth potential for purchasing power. Right,
(25:02):
think about twenty years ago with gasoline and fuel and taxes,
all the fun stuff versus today. And then the final
thing number three flexibility. Why do you need flexibility? You
need flexibility because if it doesn't work out and you
don't like it, and you're holding your nose every time
(25:23):
you look at it, you want to be able to
take your money and run some programs. Especially these real
smart people now that have these alternative investments. People are
starting to find out I can't get my mind, well,
I mean you can't get no, you can't get your money.
You can get your money when I give it to you,
it says right there in the fine print right quarterly
(25:44):
you might get it, but there's no one hundred percent
guarantee that we're going to give it to you. So
make sure you understand the apple that you're picking off
the tree, because you might not be happy. So we
got a lot to talk about. I'm Dave Kopek. This
is retirement Ready. We'll be back after the news. I'll
see on the other side.
Speaker 1 (26:29):
How would have wait?
Speaker 3 (26:37):
You know, it's just still.
Speaker 1 (26:41):
Right.
Speaker 2 (26:42):
We are back. I'm Dave Kopek. I'm the president of
the Retirement Plenty Group one. I thank the listeners a
lot of phone calls for people that want to come
in and have chats with us. Five locations in New York.
(27:02):
Our new location is Syracuse, which we are extremely busy
at and we have Albany on State Street, eighty State Street.
We're in Oneana Multi Slash, Saratoga, and then Glen's Falls.
So anything that I'm talking about is of interest to you.
And you're trying to figure out which direction you want
(27:23):
to go. In the last few weeks have caused you
a lot of stress and anxiety. Probably don't have the
right investment platform. So there's a lot of factors for
you to consider on how to take your life savings
and allocate it during your retirement years. And one of
the things that we overemphasize at the Retirement Planning Group
is that we are an open architecture platform. We have
(27:45):
no bias towards any one type of investment, none, zero.
And the reason why I say that is that some
of the things that I talk about on the radio,
even though I think they're very important, they make up
a very very very very very small percentage of our
overall business model. But I think it's important that when
(28:07):
someone sits down with us, because mister April might have
a whole different appetite for risks than missus Zebra. So
if that is the case, we want to be able
to facilitate what they're willing to do as far as
allocating money for their retirement years on that four letter
(28:28):
word called risk. So if you're sitting there and you're
trying to figure out how do I build out my
retirement income distribution plan, all of us, if we have
enough quarters have solid security, so husband and wife, they
both work, We're going to basically put it into our
(28:48):
software package, and some people are actually surprised how much
they're getting now in SOLI security, especially if they've worked,
they had a good job, they waited to fra full
retirement age. Some of us, because we're living longer lives,
have elected not to take our benefit until age seventy.
I'm one of them, right, So I don't need the money.
(29:09):
I'm not going to go get it, and it's going
to be a higher benefit statistically because I'm going to
go before my wife and she's going to be in
a better spot. So solid security really is a big
major component on how we build out our retirement income
distribution plans. Then we ask the question on our questionnaire
face to face, is there any pension benefits For some
(29:30):
of you? The answers yes, But for most of you
the answer is no. And it's tricky, all right, So
we take the sole security benefits. We know that we
lose one of the SOLI security when the first spouse
passes away, the higher the two states with the surviving beneficiary.
Now what do we have to do. Now we have
to try to fill the gap right on the front
(29:54):
end and also when there's the first death. So we
want to make sure that we're comparing apple to apples
as far as what can we rely on. So I
know that they're criticized and most people don't understand them,
but they will criticize them. I know they're complex, but
a lot of people don't take the time to actually
(30:14):
go through them and get underneath the hood. But annuities
are pension benefits in the new world that we live in,
and billions and billions and billions of dollars are going
into annuities on an annual basis now and in essence,
the most basic form is an annuity is a pension
benefit that spreads the risk of that keyword called longevity.
(30:41):
I don't know how long I'm going to live. I
have no idea how long my wife will live. And
we want to be able to risk some of our
money in the market, but we also want to have
some of our money guaranteed so we avoid risk and
(31:01):
we can sleep at night. National Grid has two components
now to their pension system. They have their four oh
on and K matching four oh and K, and they
have a cash balance account. The cash balance account they
can take it, roll it into an IRA and then
(31:24):
build out their own income plan, or they can take
the company plan, which is an annuity. Okay, National Grid
has an annuity, and depending on how much is in
the pot, how much is necessary for income. We go
(31:46):
through how we allocate the dollars in order to pay
the bills on a monthly basis. What I need to
pay the bills January through December and maybe have a
few extra bucks on the sideline so I can do
some Christmas shop and then have some fun. So who
protects it? Well, the insurance company protects it. What do
(32:10):
you mean by that? Well, the money that is being
paid out to you through the insurance company right is
through New York State. They have to be through New
York State in order to be licensed, and they basically
have to have reserve requirements. And we have the highest
standards of any of the fifty states as far as
(32:31):
how much money needs to be allocated to basically guarantee
that that money will be there for your lifetime. Oh
and oh, by the way, New York State also gives
you an additional five hundred thousand dollars of protection in
case the insurance company goes belly up, not two hundred
(32:53):
and fifty thousand like FDIC, but five hundred thousand dollars
in order to protect the corp the money that you
allocated it. Now, it's interesting that a lot of people
don't even discuss this. The question I would say is
(33:16):
that if I'm getting an annuity through XYZ Corporation and
not an insurance companies that issues those contracts through New
York State, my question is is that who guarantees the
money if XYZ Corporation goes bankrupt? Right when? You want
(33:36):
to know that. I think it's a pretty critical component
of building out a retirement income distribution plan. So I'm
not advocating either one or the other, but you should
understand is their protection in case things don't work out.
So when we build out a retirement income distribution, and
(34:01):
just keep it simple, we might take the sole security
benefits at the same time for the husband and wife,
or we might do a spousal benefit and allow either
one of the spouses to allow their theirs to accrue
to or a higher benefit. What we're trying to achieve, well,
let's just keep it simple. Let's just say mister and
(34:23):
missus Apple have fifteen hundred dollars a month apiece. That's
three thousand dollars a month. They have a million dollars
in irais. She's got five hundred thousand dollars, he's got
five hundred thousand, and now we're going to try to
figure out how they can generate five thousand dollars a month.
That's what they feel warm and fuzzy about, right, That's
(34:47):
what they feel warm and fuzzy about. How much money
do they need in order to facilitate five thousand dollars
a month? Well, it's pretty simple. They're getting three from
sol Security. All they need is another two thousand dollars
off of million. It's not a whole heck of a lot.
We can get that at a guaranteed rate right now
over two percent. But the question you got to ask
(35:08):
yourself is is that suitable? You want to shoot for
the moon or you want to play it more on
a conservative basis? Is sixty thousand dollars enough? So sometimes
what we'll do is we'll allocate a certain portion of
the money to the pension benefit. We'll go out and
purchase an annuity that will give them the two thousand
(35:30):
dollars a month. Keep it simple. This is not hard numbers,
but I'm going to keep it simple. Two hundred and
fifty thousand of the million goes to a pension benefit
that will pay out for the rest of their lives
and when they're dead, the money's dead doesn't go anywhere,
but it's guaranteed for life or ten year period certain
(35:53):
that means no matter what happens, as long as they
she'll live. The other seven fifty will now allocate it
based off of their risk profile. They have to fill
out a form. It's called an RTQ, a risk tolerance
questionnaire that for basically is our roads map. It tells
me how much investment risk mister and missus Apple want
(36:17):
and their appetite for risk and how much volatility can
they take in their portfolio without having their hair turn
on fire. So like anything else, okay, I have a
hard time when I hear people talk about stuff that
they really don't know anything that they're talking about. And
I also have a hard time where people basically force
(36:40):
types of investments on individuals because I'm so great at
managing money. Now here's the question I have for you.
How's the ride been last three to four weeks? There's
your stomach doing you like? The volatility? Isn't it fun?
The statement come in the mail. Did you look at
it or you hide it? You have the opportunity to
(37:02):
go online, did you want to look at your portfolio?
That's the difference between allocating and retirement than it is
during accumulation. You have time. You have time during your
accumulation years. Who knows during your distribution years. Who knows
how much time we have? That goes back to Williams. Sharp.
(37:24):
The two greatest risks for you as a consumer of
financial products the sequence of returns and longevity. How long
will I live? And all of these investment banking firms
now are finding out because the volatility that we've had
over the last five to eight to ten years, we
(37:46):
better find ourselves some kind of an investment program in
order for us to give our clients lifetime income products.
So what are they doing now. They're going out major
investment banking firms and they're basically building out products through
insurance companies that will give you and their names are annuities, folks, annuities,
(38:07):
you can call them whatever they want to call them,
you know, Big Bold Income Plan, whatever the name you
want to put on their annuities. Then they're basically they
are setting up house with an insurance company, and they're
building pension benefits for my generation, the boomers. Right, eleven thousand,
five hundred people every day now are turning eight sixty five.
(38:29):
It's the greatest amount of individuals turning sixty five and
it's going to continue for the next three to four years.
And people are looking for what pensions. They're looking to
create a certain amount of guaranteed income. And for me
to sit here and go through it with you, is
it disservice to you. They are complicated. You need to
(38:51):
understand them. There's guaranteed rates, some are not guaranteed, some
give you income benefits, some give you income benefit income
benefits also with other different types of writers that you
can use. So you need to understand it. And that's
what I'm trying to overemphasize. Don't just settle in. Just
(39:14):
don't settle in because mister or miss wonderful tell you
how great they are at banaging money. And then when
you get into these environments, you're not happy. Now retirement
has become stressful rather than happy, and you know I'm
skipping down the road. We have a bucket strategy that
(39:39):
we utilize the Retirement Planning Group. We also have what
we call a baseline income strategy. So yeah, we offer
a complimentary consultation. I'm gonna take my final break here.
Anything that I'm discussing with you, you can call my office
at five one eight five eight zero one nine one nine.
You can check us out on the web rpgretire dot com.
(40:00):
I'm Dave Kopek. We're going to come back. I'm going
to tell you some news. We're going to have a
workshop coming on May twentieth. I'm doing that in conjunction
with my good friend Lupiro. We did it last year.
We had great success. We had an unbelievable amount of attendance.
So if it's something that will peak your interests or
something that you might want to do, I would hastily
(40:20):
go get a pen and a piece of paper so
you can write some numbers down. We'll be right back.
Your partner for success, David Kopek, 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
(40:41):
that will help create a hedge against outliving their assets,
the impact of inflation, taxation, and rising healthcare costs. 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, though contribute to a secure
(41:04):
financial future for them. Because over ninety percent of our
clients are retirees with similar concerns, 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
(41:26):
your investments provide income for possibly decades. How do you
navigate the two greatest risk in retirement 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 complimentary consultation to develop your own personal
(41:47):
retirement income distribution plan at five wine eight five EID
zero one nine one nine. That's five eight five eight zero,
one nine one nine.
Speaker 3 (42:09):
Is a n when I found hisself load, the team
has gone alive and your mind is not your own
money has a knife when it's not that time, the
feeling times drying sen rimes on the world when the world.
Speaker 2 (42:50):
Just realize that there's opportunities out there. Folks had a
long chat yesterday before he left the office. We haven't
had one phone call from our individuals that have annuities
(43:11):
that we created pension benefits. Now. One why is that
because a portion of their money is guaranteed. We build
guarantees to ensure their core expenses are covered. We've met
growth potential, to meet their long term long term needs,
legacy goals, and flexibility, which we talked about being able
(43:35):
to say goodbye get out of an investment. Now you
know one of the things that it's happening in this
world that we live in, or heard one of the
gurus of Wall Street say the other day, sixty forty
is done. If you remember what sixty forty is, sixty
(43:55):
percent of stock, forty percent in bonds. Depending on your
risk tolerance, could be just the opp forty percent stock
sixty percent bond. It's now fifty to thirty twenty fifty
percent stock, thirty percent bonds, twenty percent alternative investments. I'm
gonna say this to you loud and clear, whether you
come in and see this or not, Buyer beware, I've
(44:17):
seen this before. I've been in the business a long time.
If you can't get out of something right and you
want to get out, I don't know about you, but
that's not the kind of investment program that I want
unless I'm an extremely high net worth people. I mean,
you're basically what they're trying to do is they're trying
to take high net worth investment options and bringing it
(44:42):
to from a high net worth community to main street.
And I say, buyer beware. There's a mutual funk company
all over now talking about their brand new alternative investment platform.
(45:03):
Private equity, you know, private capital. There's just you know what,
There's only so much that's available out there. So that's
why it's important for you to have multiple, multiple sources
of income. I want to overemphasize that it's important for
you to have multiple sources of income from a diversified
(45:26):
portfolio with a certain part of it that is going
to stay there as long as you shall live you know,
when we first got into the business years ago, it
used to be sequencer returns, and then you used to
basically take distributions off your portfolio monthly, quarterly, semi annually, annually,
(45:49):
just by liquidating assets staying fully invested. Well, when we
had the financial crisis and we had the stock market crashes,
that didn't work out too good. But there's also a
lot of you that I think allocate money based off
of principal preservation. That's your overall plan. I don't want
(46:11):
to lose any money. Okay, if you invest in stocks
and bonds, I will guarantee one thing. You're definitely going
to be down. Okay, I can't tell you how far
up you're going to be, but stocks and bonds fluctuate
on a daily place basis, so you want to make sure.
You want to make sure that you understand that. Okay,
there's trade offs. Every situation is different, every household is different,
(46:36):
every family is unique. So there is no one cookie
cutter approach at the retirement planning group for a retirement
income strategy that will work for all of our clients
and investors. Just doesn't happen. We have people that have
a small pension benefit. Some have two pension benefits. Some
took the max benefit, somebody took, you know, a partial benefit.
(47:00):
There's trade offs, and what you need to understand is
that with those trade offs, what I call the holes
in the boat, you want to make sure that they're plugged.
So whoever's left, who's the second spouse is still around
after the first spouse passes away, that you have a
pretty good understanding as far as how good is your
(47:22):
plan is going to protect you for one of your
greatest risk right now, longevity And if it's important to you,
is there anything left over as far as the legacy
to your errors. I met with people the other day,
had a long conversation. They've been listening to radio for
about three or four years. They'd decided to commend and
they go, we listened to your show all the time,
and we just want to sit down and have a
(47:44):
chat and see how we were making out here. And
I said, well, let's sit down. So they brought in
their stuff. I looked at their statements. We had a
long chat, and they're taking a fraction of the money
off their portfolio that they're probably able to take. And
I said, I said to the mail. I said, why
are you just taking such a small amount, Because you've
(48:06):
got to considerable amount of money in iras and you realize,
when you're going to be sitting here chewing on your
you know, mapo, and you're sitting in a chair and
you don't have a lot of mobility and flexibility, you
can get these huge distributions, not because you want them,
but because why the government is going to force you
to liquidate this account when you at least want the distributions. No,
(48:29):
I understand that. Okay, so what are you gonna do?
He says, well, my kids don't need it. Okay, your
kids don't need it, but your wife is going to
need some kind of a legacy. Yeah, we're more than
and he was, we're more than covered on that. And
I said, but are you basically limiting yourself in regards? Yeah,
but I'm you know, the everything's you know, he's scared
(48:50):
of everything. The Boogeyman's going to come out of the closet.
I said, hey, listen, if we design a portfolio for you,
that everything within the portfolio is guaranteed, meaning that you know,
in essence, it's either FDIC or protected by insurance coverage.
Here in New York State, or buying high quality investment
grade portfolios. Is that something that you can live with
(49:12):
and you can start doing some things that you want
to do? Yeah, I think I can. So it was
really not a question of was he using the money
because he wanted to, you know, have fun and dance
in the street and do all the things that he
wanted to do. He had a fear of using his money.
(49:34):
He had a fear. So we took the software package
out and I had my son Christopher do e money,
and I showed him all the bells and whistles. Right,
this is where you are if we, you know, reconfigure this.
This is where you're going to be, and this is
kind of income that I can give you on a
monthly basis. And the guy, if he was a Leupper
(49:55):
County would have got up uf the chair and he
would have kicked his heels up in the air. But
you have to have and I'm trying to overemphasize this,
you have to have your plan and it has to
be appropriate as far as the investment products that you
utilize not only to meet your financial needs, goals and risks,
(50:19):
but also what's going to be adequate as far as
wealth transfer, if it's important, you know, eighty five trillion
dollars is going to pass over the next twenty five
to thirty years. My generation is going to leave somewhere
between eighty to eighty five trillion dollars of wealth. It's
(50:44):
a staggering figure. The question is how are you going
to leave it? Are your children, grandchildren, loved ones, can
(51:04):
they facilitate that kind of a wealth transfer? Are they
able to manage large amounts of money? It's not uncommon
now for a lot of people come in. They have
well over seven figures in iras. It's a lot of
doray me. So five steps. Identify your own personal goals.
(51:30):
What do you want, not the financial organization that you're
working with. Build out your income distribution plan based on
how much money you need, not based off of how
much the portfolio can kick out. So if we can
be of assistance, it would be an honor. Give us
(51:52):
a call five eight five eight zero one nine one nine,
and again if you want to check us out on
the web rpg retiire dot com, it's just rpg retire
dot com. Be safe and have a great weekend.
Speaker 1 (52:09):
Thank you for listening. To Retirement Ready, hosted by Dave Kopek.
If you would like to talk with Dave or someone
at the Retirement Planning Group, called five one eight five
AID zero one nine one nine. That's five one eight
five EID zero one nine one nine during business hours,
or visit RPG retire dot com. The Retirement Planning Group
has five convenient offices located in Albany, Malta, Glens Falls, Pontiata,
(52:34):
and Syracuse. Tune in again next week at noon for
Retirement Planning Strategies with David Kopek, or Saturdays at seven
am for the Retirement Planning Show.
Speaker 2 (52:45):
The information our services discussed on this show is for
informational purposes only and is not intended to be personal
financial advice. The investments and services offered by us may
not be suitable for all investors. If you have any
doubts as to the merits of an investment, you should
seek advice from independent financial advice zer
Live from the wgy iHeart Studios. Welcome to Retirement Ready
with your host Dave Kopek from the Retirement Planning Group.
Every week, Dave and his team discuss the ways they
can help people make informed decisions about their retirement assets
to maintain, improve, and secure their desired quality of life.
Here's your host, Dave Copet.
Speaker 2 (00:41):
All Right, April twelfth, and it's snowing. There should be
a rule, Zach that says after April feet now snow.
I'll take rain. You know, one snow. It's a four
letter word. No snow. That's two words, right, you know,
(01:05):
no snow is two words, but snow's a four letter word.
Can we make that a law? No snow in April.
Did they change daylight savings time? I think they did.
I it stays permanent now, I think I think I
saw something about that. That's been a discussion for years.
I don't know if they officially did it. I don't
know either. I haven't heard anything more about it. I
(01:26):
thought I quat something when I was driving back from
the New York area the other day. But it's good
to be here, good to see Zach. Holy week. So
for a lot of us, if you're a Catholic, it's
a busy week going to church and probably other denominations.
But I know Holy Week is always I can still
(01:48):
see my mother, you know. It was always a very
very special time of a year. And it finalizes with
a course Sunday, which is Easter Sunday. And we've got
tomorrow Palm Sunday. So enjoy your week and as always,
(02:14):
keep the faith get you through tough times. And as
we are quite well aware, we are going through some
peculiar times. I talked about this this morning, and I'm
going to talk about it in greater detail about individuals
that are close to retirement or in retirement and why
(02:38):
they need to understand how to allocate money. And I
keep on saying this over and over and over and
over again. Managing money during your retirement years when you
need to create a check is a heck of a
lot different than during your accumulation years when you had
to build that pot of gold and then ultimately turn
(03:02):
that into an income stream. So today we're going to
talk about sequence of returns, point of entry, and we're
going to talk a little bit about how retirement income
distribution in this new world that we live in is
critical if you get barons, which I do. It's a
(03:24):
financial publication comes out every Saturday. There's a good article
that's in there this week which I'll kind of highlight
some of the information, and it talks about why you
shouldn't overreact. You know, we're in a mania right now
(03:48):
the market. The title of this article is the market
is frantic, you shouldn't be. And after being in the
business now for forty three years, pretty easy for me
to sit here and tell you all the things that
I've gone through. I know that on nineteen eighty seven,
(04:12):
when the market went down twenty two percent in one day,
there really was a shock to everybody. But if you
also remember, the market came back very quickly after that.
We live in a world today where with a press
(04:33):
of a button, portfolio managers hedge funds can move billions
of dollars of assets, not only on the equity side,
but also on the fixed income side. So if you
think you're smarter than the computers and the algorithms and
(04:57):
the mines on Wall Street, and you can go ahead
and try to beat the odds. But the odds say this,
and they consistently say it over and over and over,
don't try to time the market. So when the stock
market is gyrating wildly and anxious, and headlines are all
(05:20):
over the place, and a lot of investors are scratching
their heads and saying should I stay or should I go?
What should you do? And the answer from Dave Kopek
and the Retirement Planning Group is do nothing, do as
little as possible. That's why it's critical that the components
(05:45):
that you set up the buckets of money before you
walk into retirement are critical. Your cash position, what you
have in fixed income, how much you have allocated to equity,
and if you're listening to all the gurus and all
the smart people on Wall Street, how much do you
(06:05):
have in alternative investments? Now, there was a story going
around this week, whether it's factual or not factual, but
the scuttle butt was is that we were going to
have another major meltdown in fixed income because of the
over leverage of one of the hedge funds. That's why
we saw the gyrations in the fixed income. That's why
(06:27):
we saw the market and the bond market mirror one another.
Bonds did not go down, Bonds went up, and yield
that's not supposed to happen. The flight to safety didn't happen.
Eventually it did, It phased out a little bit. But
there was a lot of people on Wall Street. I
(06:47):
remember watching Bloomberg and Maria Bartomo and there were a
lot of people. You could see it on their face
what is going on here? So you know these brilliant
minds on Wall Street that keep on creating these programs,
(07:08):
investment plans, investment products because they think they're smarter than
the average Joe. Maybe not. There was a lot of
liquidation going on this week, not because they wanted to liquidate,
but they had to liquidate because the force liquidation based
on margin margin calls three to four to five to
(07:31):
one that some of these hedge funds use. So they
had it wrong. The hedge funds had it wrong. They
basically had it set up that they thought that the
bond market would rally if there was a gyration in
the stock market. And guess what, that's not what happened.
So that's why I think a lot of the noise
that came out of the financial markets and all the
(07:53):
comments that came out of the White House was basically
to appease a pease Walls Street, and also the investors.
So all of this that's going on, I haven't heard
one person yet that has the answers to this magical
(08:16):
new word that we're called tariffs. You take ten economists,
you're going to get ten different answers, and usually at
the end of ten, eleven, twelve months, one of them
is going to be right. It's no different when they
try to do the prediction of the stock market at
the beginning of the year how it's going to end
(08:38):
up at the end of the year. As you all
are well aware, in twenty twenty four, very few if any,
were correct the type of gains that we got in
twenty twenty four, and they won't be right this year.
So tariffs are complex, and experts wherever you are to
(09:02):
are giving you a guesstimate of how they will affect
the economy. Now, what's the positive out of all this.
You've got a reduction in spending, You've got lower costs
for energy. Looks like we're getting a major overhaul of
(09:27):
our tax policy and regulations. So all the things that
would be beneficial for powering our economy, our GDP are
falling into place. And I don't care who you listen to.
There's a lot of people that I listen to on
(09:48):
Wall Street that I have a lot of respect for,
and some of them have basically said that this is
an over reaction, an overreaction. These are headlines, it's not
actual data, and the data that has come out has
(10:10):
been positive. Jobs inflation, go through the whole laundry list.
But Wall Street's having its convulsion right. Everybody that's sitting
there on Monday morning has all the answers of what
was going to happen over the weekend, and it's easy
(10:33):
for people to get frightened and scared and make decisions
that are really not in their long term best interests.
So when I say what should you do when you're
in a situation like this, my suggestion is you don't
do anything until you really think it out. I'm never
(10:55):
a big believer to sell and go to cash because
that tells me that you were never allocated properly based
off of your risk tolerance. What I call which roller coaster?
Did you select the kiddy one or the big one.
(11:16):
If you pick the big one, you're probably gonna want
to get off. If you're on the kitty roller coaster,
you're going to say, hey, this isn't bad, right, but
fear fear right? And I started in this business. Guy
said to me, Dave, there's two things that motivate people.
Fear and greed. Right. So if you're trying to get
(11:40):
a hold of people, trying to give them an idea
of suggest you want them to motivate, there's two things
you got to think about, fear and greed. So you
got to start thinking about what are the best moves
for you at this stage of your life. Stage of
your life. And I want to overemphasize there's a quick
rundown that I'll go through with you, but take a
(12:01):
deep breath. We actually had a very strong week. You know,
if you look at the markets, and I'm not a
big believer, and if you listen to the show, you know,
I'm not a big believer on week to week, but
we had a major rally this week. We ended the
week on a positive note. Jamie Diamond told Fox Business
(12:23):
with Maria it's really hard to tell where we're going
to shake out on this whole thing. I have a
lot of respect for Jamie Diamond. He runs an unbelievable
platform called JP Morgan, but he basically says, I can't
give you the hard answer. You know, we could get
through this and not have a whole heck of a
(12:45):
lot of damage, or we could go through this depending
on how prolonged it is, and there could be some damage.
But overall, a lot of these blocks that are being
built are going to be very positive for the economy.
And you needed to take a till you needed to
sit tight. So today we're talking about point of entry,
(13:07):
sequence of returns. Where we are on Wall Street. I'm
here live in the studio. Do you have any questions
or comments if you want to call in? What e
on hundred talk WGY? What eight five fifty ninety nine?
What are you drinking over there? What are you drinking?
A beer? Red bull? That's what we tell the listening audience.
(13:29):
That doesn't look like a red bull. It looks like
a Heineken. I'm only teasing, folks. We'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
(13:49):
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, 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
(14:11):
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 take action five one eight,
five eight zero one nine 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
(14:34):
retirement income distribution plan five win eight five eight zero
one nine one nine. The greatest risk in retirement. Most
of us have no plan for or insurance to cover
the expense. A long term 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 a retirement
(14:55):
Planning Group today discuss options you should consider to protect
your estate and have choices and independence. Take action well
today five one eight five eight zero one nine or
RPG retire on the web. What will you do? You
(15:47):
wa one, wait and buy your side you All right,
we are back in a snowy eighth roll twelfth upstate
New York spring day. I think after the radio show,
(16:09):
I'm going to take a swim in the pool. Zach
so nice outside. All right, we're talking about the gyrations
that were going through. You know, I did an article
not that long ago for the Business Journal and we
talked about black Swan events. I really wouldn't consider this
(16:32):
to be a black Swan event. I would say that
this is definitely definitely a jolt a jarring because the
handwriting was on the wall what he was going to do,
he spoke about it, gave us an indication this was coming,
and then all of a sudden, everybody's freaked out. So
(16:58):
the market action, of course, has been volatile. Why is
that date, Well, you've got computers running the ship now,
not humans, and you got algorithms, and there's certain bots
that will be turned on and turned off based off
of either some verbiage or technical analysis and forget about it. Okay,
(17:23):
So sudden stock market rallies and also on the other
side of the fence, folks sell us are more common
than you think, then they're going to be much more
common in my opinion as we move forward over the
next few years, because of that thing that we hear
about all the time. What's it called again, AI? Artificial intelligence.
(17:50):
So over the past forty five years, there's some homework
on this. Before we came in, the stock market's largest
decline in each calendar year averaged about fourteen percent, and
despite those drawdowns, stocks ended up forty five calendar years
(18:14):
thirty seven of the times positive, thirty seven out of
forty five. So if we remember COVID nineteen, that fun
time the stock market dipped thirty four percent, you remember
how much fun that was in just twenty three days.
Yet within a year of the market had not only
recovered but also risen seventy eight percent from its low.
(18:38):
People who sold got their knees and knock and couldn't
handle the stress. That sold during the panic missed one
of the largest recoveries ever in the market. So if
you can avoid selling, especially as an accumulator and continue
(19:02):
to buy stocks. You're going to find yourself most likely
in a better position. Right, So how do you do it?
How do you force yourself to do this? Well, it's
easy during the accumulation years, right, we all have heard
a dollar cost averaging. It's pretty simple. Right, you're buying
(19:25):
stocks up, sideways down. But over a period of time,
you know your periodic contributions and payments, you're going to
be doing fine. The question becomes, what about when I'm retired?
How do I take all that money and now turn
(19:45):
that into an income stream. Maybe I'll just do the opposite.
I'll start liquidating over a period of time. Well, buyer, beware, buyer, beware,
you could be putting yourself in a whole lot of hurt.
And there's been all sorts of data, all sorts of
information about sequence of returns during your retirement years. I
(20:11):
talk about this in our presentations are workshops. There's a gentleman.
He's an economist. He's a Nobel Prize winning economists, and
he talks about how to solve the nastiest, hardest problem
in retirement. His name is William Sharp. He's a Nobel
(20:35):
Prize winning economist. And has spent most of his career
thinking about that four letter word called risk. And he
has a little thing that most Wall Street people understand.
You got to pass the exam understand capital asset pricing
(20:56):
model for gauging systematic risk, which captures risk adjusted returns
on your portfolio. Now, recently, my good buddy William decided
that he wanted to go into the green pastures of retirement,
(21:17):
and he didn't want to run out of money, So
he said, wouldn't there be a good way for me
to try to figure out how do I take all
this cash that I've accumulated in my lifetime and create
lifetime income not only for myself but for my spouse
And basically have a pretty good idea that the money's
(21:40):
going to be there for an extended period of time, meaning,
in essence, the money doesn't go away before I go away.
So here's his words, not mine. You need to understand
all of the possibility please. To plan for the most
(22:03):
difficult problem in finance, says Sharp, is knowing how to
strike a balance between having enough money to meet your
current needs and having enough money to get you through
your lifetime. HM and he also acknowledges there's no easy answer. Oh,
he has a few ideas how retirees can better manage
(22:28):
their risk and basically addressed what he has called the nastiest,
hardest problem in finance. Those are his words, not mine.
So today when we come back, because we're gonna have
(22:49):
to break here in a couple of minutes, and I
don't want to get into because I got so much
data here, I'm gonna just wow you. We're going to
talk about creating a sustainable retirement income pland that allows
you to sleep at night, what I call pillow plan
like that one Zach pillow planning like that, you put
(23:17):
your hat on your pillow, you sleep, You don't put
your head on your pillow, and you're stressed out and
you're staring at the fan counting on how many revolutions.
So the big sources of uncertainty that can diminish your
money is sequence of returns right in point of entry.
(23:41):
And we're going to talk about how that uncertainty can
be eliminated. Maybe not one hundred percent, but you can
eliminate a lot of it. And it's basically called an
investment program that we call it the Retirement Planning Group.
Baseline income, baseline income, right, what is baseline income? Baseline
(24:10):
income allows you, right, a retirement income plan that gives
you three components, because there's no more pension plans unless
you're a state retiree, work for municipality, county. But in essence,
(24:32):
most of us, nine out of ten of us now
do not have define benefit plans. We're going to have
to create a retirement income plan that incorporates three things, right,
because seven out of ten of us, almost eight out
of ten of us, want this a portion of it
guaranteed guaranteed income component Number two growth potential for purchasing power. Right,
(25:02):
think about twenty years ago with gasoline and fuel and taxes,
all the fun stuff versus today. And then the final
thing number three flexibility. Why do you need flexibility? You
need flexibility because if it doesn't work out and you
don't like it, and you're holding your nose every time
(25:23):
you look at it, you want to be able to
take your money and run some programs. Especially these real
smart people now that have these alternative investments. People are
starting to find out I can't get my mind, well,
I mean you can't get no, you can't get your money.
You can get your money when I give it to you,
it says right there in the fine print right quarterly
(25:44):
you might get it, but there's no one hundred percent
guarantee that we're going to give it to you. So
make sure you understand the apple that you're picking off
the tree, because you might not be happy. So we
got a lot to talk about. I'm Dave Kopek. This
is retirement Ready. We'll be back after the news. I'll
see on the other side.
Speaker 1 (26:29):
How would have wait?
Speaker 3 (26:37):
You know, it's just still.
Speaker 1 (26:41):
Right.
Speaker 2 (26:42):
We are back. I'm Dave Kopek. I'm the president of
the Retirement Plenty Group one. I thank the listeners a
lot of phone calls for people that want to come
in and have chats with us. Five locations in New York.
(27:02):
Our new location is Syracuse, which we are extremely busy
at and we have Albany on State Street, eighty State Street.
We're in Oneana Multi Slash, Saratoga, and then Glen's Falls.
So anything that I'm talking about is of interest to you.
And you're trying to figure out which direction you want
(27:23):
to go. In the last few weeks have caused you
a lot of stress and anxiety. Probably don't have the
right investment platform. So there's a lot of factors for
you to consider on how to take your life savings
and allocate it during your retirement years. And one of
the things that we overemphasize at the Retirement Planning Group
is that we are an open architecture platform. We have
(27:45):
no bias towards any one type of investment, none, zero.
And the reason why I say that is that some
of the things that I talk about on the radio,
even though I think they're very important, they make up
a very very very very very small percentage of our
overall business model. But I think it's important that when
(28:07):
someone sits down with us, because mister April might have
a whole different appetite for risks than missus Zebra. So
if that is the case, we want to be able
to facilitate what they're willing to do as far as
allocating money for their retirement years on that four letter
(28:28):
word called risk. So if you're sitting there and you're
trying to figure out how do I build out my
retirement income distribution plan, all of us, if we have
enough quarters have solid security, so husband and wife, they
both work, We're going to basically put it into our
(28:48):
software package, and some people are actually surprised how much
they're getting now in SOLI security, especially if they've worked,
they had a good job, they waited to fra full
retirement age. Some of us, because we're living longer lives,
have elected not to take our benefit until age seventy.
I'm one of them, right, So I don't need the money.
(29:09):
I'm not going to go get it, and it's going
to be a higher benefit statistically because I'm going to
go before my wife and she's going to be in
a better spot. So solid security really is a big
major component on how we build out our retirement income
distribution plans. Then we ask the question on our questionnaire
face to face, is there any pension benefits For some
(29:30):
of you? The answers yes, But for most of you
the answer is no. And it's tricky, all right, So
we take the sole security benefits. We know that we
lose one of the SOLI security when the first spouse
passes away, the higher the two states with the surviving beneficiary.
Now what do we have to do. Now we have
to try to fill the gap right on the front
(29:54):
end and also when there's the first death. So we
want to make sure that we're comparing apple to apples
as far as what can we rely on. So I
know that they're criticized and most people don't understand them,
but they will criticize them. I know they're complex, but
a lot of people don't take the time to actually
(30:14):
go through them and get underneath the hood. But annuities
are pension benefits in the new world that we live in,
and billions and billions and billions of dollars are going
into annuities on an annual basis now and in essence,
the most basic form is an annuity is a pension
benefit that spreads the risk of that keyword called longevity.
(30:41):
I don't know how long I'm going to live. I
have no idea how long my wife will live. And
we want to be able to risk some of our
money in the market, but we also want to have
some of our money guaranteed so we avoid risk and
(31:01):
we can sleep at night. National Grid has two components
now to their pension system. They have their four oh
on and K matching four oh and K, and they
have a cash balance account. The cash balance account they
can take it, roll it into an IRA and then
(31:24):
build out their own income plan, or they can take
the company plan, which is an annuity. Okay, National Grid
has an annuity, and depending on how much is in
the pot, how much is necessary for income. We go
(31:46):
through how we allocate the dollars in order to pay
the bills on a monthly basis. What I need to
pay the bills January through December and maybe have a
few extra bucks on the sideline so I can do
some Christmas shop and then have some fun. So who
protects it? Well, the insurance company protects it. What do
(32:10):
you mean by that? Well, the money that is being
paid out to you through the insurance company right is
through New York State. They have to be through New
York State in order to be licensed, and they basically
have to have reserve requirements. And we have the highest
standards of any of the fifty states as far as
(32:31):
how much money needs to be allocated to basically guarantee
that that money will be there for your lifetime. Oh
and oh, by the way, New York State also gives
you an additional five hundred thousand dollars of protection in
case the insurance company goes belly up, not two hundred
(32:53):
and fifty thousand like FDIC, but five hundred thousand dollars
in order to protect the corp the money that you
allocated it. Now, it's interesting that a lot of people
don't even discuss this. The question I would say is
(33:16):
that if I'm getting an annuity through XYZ Corporation and
not an insurance companies that issues those contracts through New
York State, my question is is that who guarantees the
money if XYZ Corporation goes bankrupt? Right when? You want
(33:36):
to know that. I think it's a pretty critical component
of building out a retirement income distribution plan. So I'm
not advocating either one or the other, but you should
understand is their protection in case things don't work out.
So when we build out a retirement income distribution, and
(34:01):
just keep it simple, we might take the sole security
benefits at the same time for the husband and wife,
or we might do a spousal benefit and allow either
one of the spouses to allow their theirs to accrue
to or a higher benefit. What we're trying to achieve, well,
let's just keep it simple. Let's just say mister and
(34:23):
missus Apple have fifteen hundred dollars a month apiece. That's
three thousand dollars a month. They have a million dollars
in irais. She's got five hundred thousand dollars, he's got
five hundred thousand, and now we're going to try to
figure out how they can generate five thousand dollars a month.
That's what they feel warm and fuzzy about, right, That's
(34:47):
what they feel warm and fuzzy about. How much money
do they need in order to facilitate five thousand dollars
a month? Well, it's pretty simple. They're getting three from
sol Security. All they need is another two thousand dollars
off of million. It's not a whole heck of a lot.
We can get that at a guaranteed rate right now
over two percent. But the question you got to ask
(35:08):
yourself is is that suitable? You want to shoot for
the moon or you want to play it more on
a conservative basis? Is sixty thousand dollars enough? So sometimes
what we'll do is we'll allocate a certain portion of
the money to the pension benefit. We'll go out and
purchase an annuity that will give them the two thousand
(35:30):
dollars a month. Keep it simple. This is not hard numbers,
but I'm going to keep it simple. Two hundred and
fifty thousand of the million goes to a pension benefit
that will pay out for the rest of their lives
and when they're dead, the money's dead doesn't go anywhere,
but it's guaranteed for life or ten year period certain
(35:53):
that means no matter what happens, as long as they
she'll live. The other seven fifty will now allocate it
based off of their risk profile. They have to fill
out a form. It's called an RTQ, a risk tolerance
questionnaire that for basically is our roads map. It tells
me how much investment risk mister and missus Apple want
(36:17):
and their appetite for risk and how much volatility can
they take in their portfolio without having their hair turn
on fire. So like anything else, okay, I have a
hard time when I hear people talk about stuff that
they really don't know anything that they're talking about. And
I also have a hard time where people basically force
(36:40):
types of investments on individuals because I'm so great at
managing money. Now here's the question I have for you.
How's the ride been last three to four weeks? There's
your stomach doing you like? The volatility? Isn't it fun?
The statement come in the mail. Did you look at
it or you hide it? You have the opportunity to
(37:02):
go online, did you want to look at your portfolio?
That's the difference between allocating and retirement than it is
during accumulation. You have time. You have time during your
accumulation years. Who knows during your distribution years. Who knows
how much time we have? That goes back to Williams. Sharp.
(37:24):
The two greatest risks for you as a consumer of
financial products the sequence of returns and longevity. How long
will I live? And all of these investment banking firms
now are finding out because the volatility that we've had
over the last five to eight to ten years, we
(37:46):
better find ourselves some kind of an investment program in
order for us to give our clients lifetime income products.
So what are they doing now. They're going out major
investment banking firms and they're basically building out products through
insurance companies that will give you and their names are annuities, folks, annuities,
(38:07):
you can call them whatever they want to call them,
you know, Big Bold Income Plan, whatever the name you
want to put on their annuities. Then they're basically they
are setting up house with an insurance company, and they're
building pension benefits for my generation, the boomers. Right, eleven thousand,
five hundred people every day now are turning eight sixty five.
(38:29):
It's the greatest amount of individuals turning sixty five and
it's going to continue for the next three to four years.
And people are looking for what pensions. They're looking to
create a certain amount of guaranteed income. And for me
to sit here and go through it with you, is
it disservice to you. They are complicated. You need to
(38:51):
understand them. There's guaranteed rates, some are not guaranteed, some
give you income benefits, some give you income benefit income
benefits also with other different types of writers that you
can use. So you need to understand it. And that's
what I'm trying to overemphasize. Don't just settle in. Just
(39:14):
don't settle in because mister or miss wonderful tell you
how great they are at banaging money. And then when
you get into these environments, you're not happy. Now retirement
has become stressful rather than happy, and you know I'm
skipping down the road. We have a bucket strategy that
(39:39):
we utilize the Retirement Planning Group. We also have what
we call a baseline income strategy. So yeah, we offer
a complimentary consultation. I'm gonna take my final break here.
Anything that I'm discussing with you, you can call my office
at five one eight five eight zero one nine one nine.
You can check us out on the web rpgretire dot com.
(40:00):
I'm Dave Kopek. We're going to come back. I'm going
to tell you some news. We're going to have a
workshop coming on May twentieth. I'm doing that in conjunction
with my good friend Lupiro. We did it last year.
We had great success. We had an unbelievable amount of attendance.
So if it's something that will peak your interests or
something that you might want to do, I would hastily
(40:20):
go get a pen and a piece of paper so
you can write some numbers down. We'll be right back.
Your partner for success, David Kopek, 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
(40:41):
that will help create a hedge against outliving their assets,
the impact of inflation, taxation, and rising healthcare costs. 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, though contribute to a secure
(41:04):
financial future for them. Because over ninety percent of our
clients are retirees with similar concerns, 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
(41:26):
your investments provide income for possibly decades. How do you
navigate the two greatest risk in retirement 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 complimentary consultation to develop your own personal
(41:47):
retirement income distribution plan at five wine eight five EID
zero one nine one nine. That's five eight five eight zero,
one nine one nine.
Speaker 3 (42:09):
Is a n when I found hisself load, the team
has gone alive and your mind is not your own
money has a knife when it's not that time, the
feeling times drying sen rimes on the world when the world.
Speaker 2 (42:50):
Just realize that there's opportunities out there. Folks had a
long chat yesterday before he left the office. We haven't
had one phone call from our individuals that have annuities
(43:11):
that we created pension benefits. Now. One why is that
because a portion of their money is guaranteed. We build
guarantees to ensure their core expenses are covered. We've met
growth potential, to meet their long term long term needs,
legacy goals, and flexibility, which we talked about being able
(43:35):
to say goodbye get out of an investment. Now you
know one of the things that it's happening in this
world that we live in, or heard one of the
gurus of Wall Street say the other day, sixty forty
is done. If you remember what sixty forty is, sixty
(43:55):
percent of stock, forty percent in bonds. Depending on your
risk tolerance, could be just the opp forty percent stock
sixty percent bond. It's now fifty to thirty twenty fifty
percent stock, thirty percent bonds, twenty percent alternative investments. I'm
gonna say this to you loud and clear, whether you
come in and see this or not, Buyer beware, I've
(44:17):
seen this before. I've been in the business a long time.
If you can't get out of something right and you
want to get out, I don't know about you, but
that's not the kind of investment program that I want
unless I'm an extremely high net worth people. I mean,
you're basically what they're trying to do is they're trying
to take high net worth investment options and bringing it
(44:42):
to from a high net worth community to main street.
And I say, buyer beware. There's a mutual funk company
all over now talking about their brand new alternative investment platform.
(45:03):
Private equity, you know, private capital. There's just you know what,
There's only so much that's available out there. So that's
why it's important for you to have multiple, multiple sources
of income. I want to overemphasize that it's important for
you to have multiple sources of income from a diversified
(45:26):
portfolio with a certain part of it that is going
to stay there as long as you shall live you know,
when we first got into the business years ago, it
used to be sequencer returns, and then you used to
basically take distributions off your portfolio monthly, quarterly, semi annually, annually,
(45:49):
just by liquidating assets staying fully invested. Well, when we
had the financial crisis and we had the stock market crashes,
that didn't work out too good. But there's also a
lot of you that I think allocate money based off
of principal preservation. That's your overall plan. I don't want
(46:11):
to lose any money. Okay, if you invest in stocks
and bonds, I will guarantee one thing. You're definitely going
to be down. Okay, I can't tell you how far
up you're going to be, but stocks and bonds fluctuate
on a daily place basis, so you want to make sure.
You want to make sure that you understand that. Okay,
there's trade offs. Every situation is different, every household is different,
(46:36):
every family is unique. So there is no one cookie
cutter approach at the retirement planning group for a retirement
income strategy that will work for all of our clients
and investors. Just doesn't happen. We have people that have
a small pension benefit. Some have two pension benefits. Some
took the max benefit, somebody took, you know, a partial benefit.
(47:00):
There's trade offs, and what you need to understand is
that with those trade offs, what I call the holes
in the boat, you want to make sure that they're plugged.
So whoever's left, who's the second spouse is still around
after the first spouse passes away, that you have a
pretty good understanding as far as how good is your
(47:22):
plan is going to protect you for one of your
greatest risk right now, longevity And if it's important to you,
is there anything left over as far as the legacy
to your errors. I met with people the other day,
had a long conversation. They've been listening to radio for
about three or four years. They'd decided to commend and
they go, we listened to your show all the time,
and we just want to sit down and have a
(47:44):
chat and see how we were making out here. And
I said, well, let's sit down. So they brought in
their stuff. I looked at their statements. We had a
long chat, and they're taking a fraction of the money
off their portfolio that they're probably able to take. And
I said, I said to the mail. I said, why
are you just taking such a small amount, Because you've
(48:06):
got to considerable amount of money in iras and you realize,
when you're going to be sitting here chewing on your
you know, mapo, and you're sitting in a chair and
you don't have a lot of mobility and flexibility, you
can get these huge distributions, not because you want them,
but because why the government is going to force you
to liquidate this account when you at least want the distributions. No,
(48:29):
I understand that. Okay, so what are you gonna do?
He says, well, my kids don't need it. Okay, your
kids don't need it, but your wife is going to
need some kind of a legacy. Yeah, we're more than
and he was, we're more than covered on that. And
I said, but are you basically limiting yourself in regards? Yeah,
but I'm you know, the everything's you know, he's scared
(48:50):
of everything. The Boogeyman's going to come out of the closet.
I said, hey, listen, if we design a portfolio for you,
that everything within the portfolio is guaranteed, meaning that you know,
in essence, it's either FDIC or protected by insurance coverage.
Here in New York State, or buying high quality investment
grade portfolios. Is that something that you can live with
(49:12):
and you can start doing some things that you want
to do? Yeah, I think I can. So it was
really not a question of was he using the money
because he wanted to, you know, have fun and dance
in the street and do all the things that he
wanted to do. He had a fear of using his money.
(49:34):
He had a fear. So we took the software package
out and I had my son Christopher do e money,
and I showed him all the bells and whistles. Right,
this is where you are if we, you know, reconfigure this.
This is where you're going to be, and this is
kind of income that I can give you on a
monthly basis. And the guy, if he was a Leupper
(49:55):
County would have got up uf the chair and he
would have kicked his heels up in the air. But
you have to have and I'm trying to overemphasize this,
you have to have your plan and it has to
be appropriate as far as the investment products that you
utilize not only to meet your financial needs, goals and risks,
(50:19):
but also what's going to be adequate as far as
wealth transfer, if it's important, you know, eighty five trillion
dollars is going to pass over the next twenty five
to thirty years. My generation is going to leave somewhere
between eighty to eighty five trillion dollars of wealth. It's
(50:44):
a staggering figure. The question is how are you going
to leave it? Are your children, grandchildren, loved ones, can
(51:04):
they facilitate that kind of a wealth transfer? Are they
able to manage large amounts of money? It's not uncommon
now for a lot of people come in. They have
well over seven figures in iras. It's a lot of
doray me. So five steps. Identify your own personal goals.
(51:30):
What do you want, not the financial organization that you're
working with. Build out your income distribution plan based on
how much money you need, not based off of how
much the portfolio can kick out. So if we can
be of assistance, it would be an honor. Give us
(51:52):
a call five eight five eight zero one nine one nine,
and again if you want to check us out on
the web rpg retiire dot com, it's just rpg retire
dot com. Be safe and have a great weekend.
Speaker 1 (52:09):
Thank you for listening. To Retirement Ready, hosted by Dave Kopek.
If you would like to talk with Dave or someone
at the Retirement Planning Group, called five one eight five
AID zero one nine one nine. That's five one eight
five EID zero one nine one nine during business hours,
or visit RPG retire dot com. The Retirement Planning Group
has five convenient offices located in Albany, Malta, Glens Falls, Pontiata,
(52:34):
and Syracuse. Tune in again next week at noon for
Retirement Planning Strategies with David Kopek, or Saturdays at seven
am for the Retirement Planning Show.
Speaker 2 (52:45):
The information our services discussed on this show is for
informational purposes only and is not intended to be personal
financial advice. The investments and services offered by us may
not be suitable for all investors. If you have any
doubts as to the merits of an investment, you should
seek advice from independent financial advice zer
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