Retirement Planning Show 07-05-25 on WSYR

July 5th, 2025. 

Episode Transcript

Speaker 1 (00:00):
The information or 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 an independent financial advisor.

Speaker 2 (00:19):
Live from the ws iHeart Studios, Welcome to the Retirement
Planning Show with your host Dave Kopak from the Retirement
Planning Group. Every week, Dave Kopak 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 in developing a more certain financial future for you

(00:41):
and your family. No, it's time for the Retirement Planning Show.

Speaker 3 (00:46):
Hello, and welcome to the Retirement Planning Show. My name
is Nicholas Dumas, certified Financial planner with the Retirement Planning Group.
Alongside me today I have Christopher McCarthy and Christopher Kopek,
and we're here to discuss some pre and post retirement planning,
mostly on the pre side. If you want to call
our office to talk about your own unique situation, you

(01:07):
can give us a call at five one eight, five eight.

Speaker 4 (01:09):
Zero one nine one nine. This is a pre recorded show, so.

Speaker 3 (01:13):
We're not doing any call ins today. But again, if
you want to call our office anything spikes your interest,
that number is five one eight, five eight zero one
nine one nine. And when I mentioned pre retirement planning,
I wanted to bring up annuities. You know, I think
a lot of folks out there have a bad reputation

(01:35):
with annuities, or they have a bad reputation, so, uh,
maybe they're just misunderstood as well. You know, I've got
an article here it says four out of five Americans
can't even properly define an annuity.

Speaker 4 (01:47):
So maybe it's just.

Speaker 3 (01:48):
The fact of the unknown that scares them. So we
want to sit down today and kind of describe the
different types of annuities that are available for folks out there.

Speaker 5 (02:03):
I think it's an important topic. Like you were saying earlier,
a lot of people have a bad taste in their mouth,
but they haven't had the opportunity to really educate themselves
on all the different areas that people could really benefit
from them.

Speaker 3 (02:17):
Yeah, and it doesn't have to be you know, your
full retirement account or your full four to oh, one
K deferred cop whatever you've accumulated throughout your lifetime. You
don't have to turn that into an annuity. You know,
you can take a piece of it and provide some
baseline income, which we talk about on the show quite
a bit. So you want to make sure you haven't
an adequate amount of resources coming in each month to

(02:39):
take care of your baseline expenses, you know, an annuity
might be the appropriate vehicle to do so. So MacArthur,
you've been doing it for what forty years?

Speaker 5 (02:48):
Forty years yep.

Speaker 3 (02:49):
And you specialized in annuities.

Speaker 5 (02:52):
Yep, pretty much my whole career and what I love
about since joining all of us here, we've got a
great team. Only about three to five percent of all
the investment management we do are annuity, but we understand
that they have a very important place and if the
situation is right and it's a good fit for the client,

(03:16):
we need to look at it and that's what we do.

Speaker 3 (03:18):
Yeah, I completely agree with you, and you know, I
think Chris also has seen, you know, a few scenarios
where annuities.

Speaker 4 (03:25):
Have worked out well for clients.

Speaker 3 (03:27):
You know, your father has been doing them for years,
so we see the back end of these annuities. You know,
if they purchased them back in twenty ten or twenty twelve,
you know, you had those thirteen fourteen years of growth
on the annuity contract and now we're finally turning those
annuities on to generate income for retirees.

Speaker 6 (03:48):
Yeah.

Speaker 7 (03:49):
Yeah, there's a lot of ways that they can help
in different situations. You know, satisfying that baseline income that
we always talk about, and like you were hinting at earlier,
is that it's a it's a portion of the overall
allocation for people, and satisfying you know, your income in

(04:09):
retirement can be done by carving off you know, your
largest asset, which is probably your four one K or
your whatever that may be that you've been saving in
for your entire career. So you take you know, twenty
five percent of that. See what you can do and
what you know, income can be generated off an annuity

(04:30):
for the remainder of your life to you know, help
supplement social security if you don't have a pension, and
just help that, you know, baseline income in retirement.

Speaker 3 (04:41):
Yeah, you need three things in a portfolio, right, guarantees,
you need liquidity, and you need growth, right, G LG
That's how I like to describe it. But the first
G guarantees, you know, the annuity, right, that provides a
pair ashue for a lot of folks, you know, depending

(05:03):
on which type you choose, and it can also provide
guaranteed income, right, so as far as investment returns, you
can purchase what are called writers on these annuity contracts,
which will provide a guaranteed growth rate on the contract
and then guaranteed income at a certain.

Speaker 4 (05:20):
Point in your life.

Speaker 3 (05:20):
So, if you're someone that doesn't have a pension, right,
you've worked hard, You've contributed to a four oh one K,
but you don't have any sort of pension. The only
real pension you're gonna have a Social Security once you
reach you know, sixty two or sixty.

Speaker 4 (05:34):
Seven or whenever you're gonna turn it on.

Speaker 3 (05:36):
An annuity might be an option for you, right, taking
a lump sum from your four oh one K or
you know, twenty five thirty percent of that value and
trying to figure out, you know, what can that provide
me for a monthly income? What can that provide me,
you know, on an annual basis, so that if something
happens to me, my spouse is taken care of as well,

(05:57):
you know, and just pillow planning is what we can
call it, right, being able to sleep at night knowing
there's a paycheck coming in next month.

Speaker 5 (06:05):
I think it's very important also to realize when people
look at the back of a one dollar bill and
they look over the pyramid, one of the words is
a newer tie. It's Latin for to pay. So if
you're sitting there and you're receiving a New York state pension,
or state and federal or local government pension, federal pension,

(06:27):
those are all forms of annuities, and people don't even
realize they have one. And like you said earlier in
the in our talk here, this is something that just
needs to be looked at. Many people out there do
not have any other guaranteed income stream other than Social Security.

(06:52):
So if you can take all your hard earned money
and look to see it doesn't have to be an
immediate annuity where your money is supposing there's so many
different setup for annuity. You can have your money fully
invested and still receive a monthly income straight for the

(07:13):
rest of your life and still have your money fully invested.
So it's not worth poo pooing annuities until we have
an opportunity to sit with people, educate them on what's
out there so they can make an educated decision if
it's right for them.

Speaker 3 (07:32):
Four out of five Americans do not know what an
annuity is, well adult Americans, So that's concerning, right. And
we had a seminar recently with an annuity wholesaler and
he was able to describe some different products that might fit.

Speaker 4 (07:51):
For individuals out there.

Speaker 3 (07:53):
And I think it was a very educational seminar that
we had, and it just goes to show, you know,
a lot of people are curious that they want to
understand what these products are. You know, in the fifties
and sixties, pensions started going away. Right in the past,
a lot of people thought, you know, I'm gonna work
hard and this company's gonna take care of me when

(08:14):
I go into retirement and continue to pay me a
monthly income stream. That wasn't the case after a lot
of those pension those pensions started vanishing. So what did
the government do. We started creating deferred compensation plans, right,
so four oh one ks pre tax accounts that are
turning into an issue. And you heard the gentleman talk
about that on at that seminar on Wednesday.

Speaker 6 (08:37):
Yep, Yeah, he did a good job.

Speaker 7 (08:40):
I think he did a really good job at explaining,
you know how these there's two overall avenues that we're
looking at currently in the annuity space. One is obviously
the pension, generating your own pension, getting guaranteed income for
the remainder of your life. And then the other one was,
you know, putting a belt in suspenders, as my father

(09:00):
would say, on your account. And it's the buffered product,
you know, having a ten or twenty percent downside protection
on your money. And the way he phrased it, you know,
when he's going through and going over, you can get
more than market participation in some of these products. Is
it's not too good to be true. It's too good
to be free and too good to be liquid, you

(09:23):
know so, and too good to be free. Is the
pension product, which is the you know, guaranteed income for life,
and that's that's, you know, a product where you're satisfying
income for the remainder of your life. And if you're
getting into that, you're looking for a pension. And then
the buffered product is just downside protection so being invested in,

(09:44):
you know, an endocy like the S and P five
hundred and having either ten to twenty percent downside for
a certain segment of time that you that you're giving
up liquidity on that money for. So it's definitely something
that if people are in interested in, you know, there's
options out there for them. And these are fairly new products,

(10:04):
even to us. So that's why you know that informational
was not only beneficial for you know, the people that
participated and showed up, but even ourselves.

Speaker 5 (10:14):
You know what I found very impressive, Well, the number
of people that were asking questions right after the presentation
with me, not only between the gentlemen from the company,
but also your father. Yeah, and the interaction the participation
I was I was really happy with because you could

(10:35):
tell I think a lot of people, whatever the perception
was about the annuities, it was different than what they
actually sat and learned about. And I thought it was
a great evening. I really did.

Speaker 4 (10:50):
Yeah, and some nice appetizers.

Speaker 3 (10:51):
I think I ate a whole plate of cantalope and
it was a really good presentation.

Speaker 4 (10:56):
So are these you know, annuities right for everyone? No?

Speaker 3 (11:00):
Right, there's individuals out there that it's not suitable for.
But you know, a majority of people, you know, I
think it is you know, just looking at these products
and giving them ideas. I think Chris brought up a
great point also about the fees, Right, a lot of
people think these are super expensive. You know, it depends
on the product that you get involved with. Right. If
you're gonna provide a guaranteed income source for the rest

(11:23):
of your life, you're gonna pay for that. Right. It's
just like the sunroof on your car or having air
conditioner you're ACU working. My truck is currently not working,
so I did not choose that annuity option with my truck.
But again, you're gonna pay for those guarantees associate with
the contract. You know, some of those parachute you know,
buffered products, they have lower fees, right because liquidity is

(11:46):
the cost. You know, you can't get in and out
of those as as fast. But again, even like the
gentleman was describing, there are some products that do have
liquidity with those buffered products. So again it's a very
difficult landscape to understand for the basic you know investor
out there. But we can educate you and form you

(12:08):
and show you examples that.

Speaker 4 (12:10):
May benefit you.

Speaker 3 (12:11):
So again, if you want to call our office and
schedule an appointment and see if one of these products
might fit your portfolio, you can give us a call
at five one eight five eight zero one nine one nine.
Again that's five one eight, five eight zero one nine
one nine.

Speaker 4 (12:26):
We also have a website.

Speaker 3 (12:27):
Can check us out at www dot RPG retire dot
com and it's RPG retire dot com on the web
and uh and again.

Speaker 4 (12:37):
Just kind of scroll through the website.

Speaker 3 (12:39):
We have a question box on there if you want to,
you know, submit any questions to us. If you're too
scared to pick up the phone and speak to one
of us because we bite, then that's fine as well.
So again five one eight five eight zero one nine
one nine. If we're gonna take a quick break again,
my name is Nicholas Dumas, certified Financial Planner with the

(13:00):
Retirement Planning Group, alongside me Chris and Chris the C
and K of the Retirement Planning Group. So we're gonna
take a break and we will be back right after this.

Speaker 8 (13:11):
Are you ready for retirement or just hoping it works out?
Don't leave your future to chance. At the Retirement Planning Group.
We hope you create a personalized retirement plan so you
can relax knowing you are prepared. Take action today called
eight eight eight five eight zero one nine nine. That's
eight eight eight five eight zero one nine one nine,
Or visit us at our website rpgretire dot com to

(13:33):
schedule your complementary consultation. Your future will say thank you.

Speaker 3 (13:40):
And we are back everyone, thanks for tuning in. Today
is the retirement Planning Show. We got Nico, Chris and
Chris speaking to you through whatever sound system you're listening
to this on.

Speaker 4 (13:54):
Did you ever see that show Wicked One?

Speaker 7 (13:57):
No, I don't worry about it.

Speaker 3 (14:00):
But again there's a retirement planning show today. We're speaking
on annuities, so we wanted to, you know, bring it
up and start describing the different types of vehicles that
are out there for retirees to start planning their retirement
and where that next paycheck is going to come from,
because when you put that two week notice in, you

(14:20):
know that paycheck is going to stop coming in also,
so you need to make sure you have a plan.
No plan is a plan and it's a bad plan.
So again, I think an annuity might be an option
for you.

Speaker 4 (14:32):
So before the break, we were.

Speaker 3 (14:34):
Describing, you know, some different types of annuities, income annuities
versus you know, there's buffer annuity products out there now
as well, which we're seeing a lot of inflow in.
But I want to break down what an income annuity is,
how they work, how they grow over time, and how
income is generated. So I know I'm throwing a lot
at you McCarthy, but you know you are the expert,

(14:57):
so I'd like you to go through.

Speaker 5 (14:58):
I certainly wouldn't go that far. I'm just happy to
be here. But like you said, this very there's a
lot of different annuities out there. It is our job
to make sure that if an annuity is a good fit,
what type of annuity is the best fit. And like

(15:20):
you said, I have worked with annuities pretty much all
my forty years in the business, and there's many different types.
The ones that we specialize in and you're referring to,
is an income annuity. It gives you a very unique
ability that you from day one can fully invest your money.

(15:43):
That will always be the case, and while investing your money,
you create an income based which is an amount that
your payout will be based on based on your age,
and it just goes like you said earlier, your money's
working for you. It's invested. You're getting an income stream

(16:07):
that from day one, you build a base minimum income
stream with the ability every year to give yourself a raise.
That raise is because of whether it's a five or
six percent simple roll up, or you have a good
year in the market and you lock up at the
higher income base level. It's it's a lot to take.

Speaker 3 (16:32):
In, yeah, but I think high level. You know, it
was a really good good job describing it. There's two
values with annuities, folks, right, So Chris was just describing
you know, the income benefit. There's an income benefit, and
there's also the contract value. So when you invest, you know,
let's say you put two hundred thousand dollars into one

(16:53):
of these annuity products, you know that two hundred thousand
dollars going is going to be invested. You know, you
can chew use your asset allocation. You know, they might
require a minimum amount in fixed income. You know, so
maybe you can only have eighty percent in the stock market,
but you have to have twenty percent in some.

Speaker 4 (17:10):
Sort of fixed income or bond product.

Speaker 3 (17:13):
You know, but you can invest that money and try
to beat the five or six percent simple growth that's
going to be associated with the income base. The purpose
of these contracts, you know, while you hold them and
don't turn on the income, is to try to get
them to grow, you know, and if you can beat

(17:34):
the five or six percent, then like Chris mentioned, you
get a step up, which is great. So that income
benefit will step up to that new contract value if
your investments perform well, and then next year it'll grow
by the five or six percent simple depending on the contract.
So so again you want to try to grow those
two numbers to the highest you can before you turn

(17:54):
the income on. And then from there, depending on your age,
there's going to be a withdrawal amount that's available to
you too bad.

Speaker 7 (18:02):
Yeah, and depending on I just wanted to throw into it,
depending on you know, what you're looking to do. If
you're going into like this income product, what we'll do
with the investments, like Nico was saying, if they have
like an underlying bond requirement where you have to have
about twenty twenty five percent in the bonds, then we

(18:25):
will just go as aggressive as possible in the equity
side of it. You know or will recommend that you know,
because the bond once you meet that bond allocation, whatever
the requirement is, the goal of the investments is to
beat the five to six percent, like Nico was saying.
So you want to try and you know, outperform what

(18:47):
you're what the guaranteed rate is on the growth to
get those step ups, you know, to continue to outperform
in the contract and lock in like a higher guaranteed
income amount that you'll eventually receive once you start taking
the income.

Speaker 5 (19:03):
I think one of the benefits again, we can't emphasize
this enough. The income annuity we're talking about is for
people that do not have a lot of guaranteed income
each month plan for retirement, this is a beautiful way
to consider setting yourself up for a guaranteed self funded pension.

(19:28):
And this is really where we have found the best fit. Now,
if you're fortunate, you've got strong social security, you have
a strong pension, that's wonderful. Your need or desire to
look at this type of product may not be as
great as someone who just has Social Security at their

(19:52):
only form of guaranteed income. So what we're trying to
do is we're trying to facilitate as many avenues for
an individual or a couple that they can sleep at
night knowing that even with the money fully invested, even

(20:13):
with markets ups and down, they have a baseline income
already established in the hope that it can only be
increased in time.

Speaker 3 (20:24):
Yeah, one of the biggest concerns with retirees is running
out of money, right, and these income products are going
to guarantee an income stream for the rest of your life,
you know, maybe not only your life, also maybe.

Speaker 4 (20:38):
Also your spouse's life.

Speaker 3 (20:40):
You know, maybe when you elect to annuitize or turn
on the income down the line, you choose some sort
of period certain, right, So it's based on your life
plus you know, ten years period certain, So if something
happens to you, you pass away, it's still going to
pay out to your kids or your nephew, your niece,
you know, for the remaining six five, four years that

(21:02):
are left on that ten year period.

Speaker 8 (21:05):
Certain.

Speaker 3 (21:05):
So when you do get to that age where you're
ready to turn on the income, you just retired and
this account's been growing for the last seven or eight years,
you know, and now you need to make a decision, right,
you get to that age and you decide, hey, I
just want this for my life.

Speaker 4 (21:20):
You know, I have these other assets.

Speaker 3 (21:22):
Maybe I have a life insurance policy that's going to
pay out to my kids, so the.

Speaker 4 (21:27):
Loss, you know, the.

Speaker 3 (21:30):
Inheritance is there for the children. Now you focus on yourself,
right and creating an income stream that you're going to
feel comfortable with and annuitize that and turn it on
based on you know how old you are and what
that withdrawal benefits going to be. So I think they're
great products.

Speaker 5 (21:48):
And I think this is another strong point to emphasize
because I think part of the reason many people may
have a little bad taste in their mouth about annuity.
This is not an annuity where you give the insurance
company a block of money and then they're going to
tell you you're going to get a guaranteed income per month

(22:10):
for the rest of your life and you lose access
to your money. That is an immediate annuity. We are
not talking about them. We're talking about a variable annuity
with an income benefit writer. Your money is available to you,
Your money is fully invested. You will have access to

(22:33):
your money in the future with the hope that as
we do better, your money grows, Your income based grows,
your income grows. It's a very very attractive avenue for
people that do not have a lot of guaranteed income.

Speaker 3 (22:52):
And we're definitely not saying to just go and buy
one of these products, right.

Speaker 4 (22:56):
They need to be suitable. You need to understand what
you own.

Speaker 3 (23:00):
Right, So if you do purchase an annuity, or if
you have an existing annuity and you're not sure what
it is, or what it's doing, or how it's invested,
or what it's going to provide as far as income
down the line, we'd be more than happy to take
a look at that annuity. So the only thing that
we really need is a statement. You know, a statement
tells a thousand words to us. We're able to see
when it was purchased, if there's surrender charges of associate

(23:23):
with the contract, what the current income amount would be,
and you know, also how it's performed. We're really able
to dive into, you know, how it's done over the
last you know, five ten years, however long ago you
bought it. But again, you know, we just we take
a look at that statement, see what you have. You know,
if it's a non qualified annuity, so a non retirement annuity,

(23:45):
there may be better vehicles or more tax efficient vehicles
for income payout, you know, through a different company. So
so again, we do a lot of work with annuities.
I've seen hundreds of annuity statements, and I'm sure you've
seen thousands. So I think we've got the experience here
to understand what you own and try to figure out

(24:06):
the best game plan for you forward.

Speaker 5 (24:08):
I think another very important point you were talking about
suitability if people only realized how much paperwork have to
be submitted for each annuity that is written. This is
not something that anybody can just sell on a whim.
We have a lot of channels that need to be

(24:30):
approved to make sure that we're doing what's right for
the client. So we don't have to worry about the ethics.
But we have to submit all our paperwork to broker dealers,
we have to be in compliance with VENMO, the SEC,
so on and so forth. This is something that is

(24:52):
a very calculated avenue that needs to be explored and
we need to abide by. So it's it's a very
strong contender. Like I said earlier, for people that don't
have guaranteed income other than Social Security.

Speaker 3 (25:12):
We act in a fiduciary capacity, you know, and if
one of these annuities might make sense to you, we're
for you.

Speaker 4 (25:19):
We're we're going to bring it up right.

Speaker 3 (25:21):
So when we sit down, we have to look at
your situation and bring forward the options that make the
most sense and describe them to you, educate them to you,
and make sure that you feel comfortable in understanding what
you're getting involved in. You know, if someone's just throwing
paperwork in your face, don't work with them.

Speaker 4 (25:38):
You know, you want to understand as well.

Speaker 3 (25:40):
You know a lot of people say, oh, I didn't
you know, I have no idea with finance. But hey,
we're going to sit down and we're going to try
to make sure that you do understand what you're getting
involved in and how that relates to to what we're
trying to accomplish. So if you want to sit down
and have a chat, our numbers five one eight, five
eight zero one nine one nine. We'd be happy to
come out there to wherever you may be. You can

(26:02):
come out at your house. We've got multiple office locations, Malti, Syracuse, Albany,
you know you name it, So give us a call.
Five P one eight five eight zero nine. We're gonna
take another break. We'll be back right after this.

Speaker 8 (26:15):
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(26:37):
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(26:58):
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Speaker 2 (27:19):
Nine five seventy ws yr.

Speaker 7 (27:21):
All right, and we are back. So we just you know,
hit on the income products. So the next thing to
hit on is the the buffered products, the Belton suspender products,
where they you get a ten or twenty percent downside
protection on your assets.

Speaker 5 (27:39):
Uh.

Speaker 7 (27:39):
This is something that is a compliment or can be
a compliment to the other product, and it's where your
money is fully invested in, you know, one of the
major indices like the sm P five hundred, and you
can choose, you know which time frame you're looking to
invest your money in, whether it's a one year, a

(27:59):
three year, or a six year timeframe, and then you
get to choose, you know, how much of a protection
do you want on the downside risk, So that's either
ten or twenty percent on the downside and in some cases,
you know, you get more than market participations, so that's
you know, you can outperform the indassy. So the insurance

(28:22):
companies can offer this because you are losing the liquidity
on your money, although there are some products where your
money is completely liquid to you. And let's dive into it.
Mister McCarthy.

Speaker 5 (28:36):
Well, I think it's very very important that we explain
what we mean by liquidity. It's a very important topic.
When you're looking at these products. They come in one,
three and six year buckets. Like Chris said, what it
is is you're buying a cycle up time. So in

(28:59):
one your bucket, if you want to achieve the potential
of that bucket, you have to hold the money in
for the year. Same with the three year, same as
the six year. Now, if we're going to take a
step back and look at liquidity period, we're fortunate enough
that we can offer these annuities to clients that there's

(29:23):
no handcuffs, there's no surrendered charge period. We set it
up that they can get in and out of the
product as little or as often as possible. There will
not be any sales chargers. The only thing with these
products is, like every other investment we work with clients,

(29:45):
we have it a fee agreement. Will charge a fee
that will be the only cost to the clients. So
from a liquidity standpoint, can I get in and out
of this product? Yes, in order to achieve the rewards
with each bucket, you have to stay in for the year,

(30:08):
or a three year or the six year. I think
it's very very important that people understand that.

Speaker 3 (30:13):
Right, Are you someone that's scared of the market?

Speaker 4 (30:17):
Right?

Speaker 3 (30:19):
These are for folks that, you know, they want market exposure,
but they want protection in case the market doesn't do well.
You know, there's a lot of things happening, you know, geopolitically,
there's bombs flying around right now, interest rates are high,
inflation slowed.

Speaker 6 (30:38):
Just good.

Speaker 3 (30:40):
You know, we've got a really really hot market right now.
You know, the last two years market was up twenty five,
twenty five.

Speaker 4 (30:49):
You know this year market's up what five?

Speaker 6 (30:52):
Yeah, yeah, we've bounced back.

Speaker 3 (30:53):
So we've had, you know, two really good years. Twenty
twenty two the market was down, we've come back. Your
account values are probably above where they were beginning of
twenty twenty two. You know, maybe it's time to look
at that for one k or ira or whatever account
you may have, whether it's a non qualified account or
a qualified retirement account, and start taking some of those

(31:16):
gains and getting it into a vehicle that's going to
provide some protection. On the downside, you know, God forbid
the market does drop over the next year, over the
next three years, you know, it's it's not a bad
idea to put some you know, put a parachute on
your account, especially as you get closer to retirement. You know,
are we saying that this product is suitable for everyone. No,

(31:37):
you know, but if you're someone that's nervous or you know,
you think you've you've had a really good run, you've
been one hundred percent equities and you've just said, you know,
forget about it, I'm just going to keep it there.
The market is resilient over time. You're getting to a
point now where you're going to have to start taking
income off your account. You can't afford a twenty percent downswing.
And I got a million bucks, it's two hundred thousand dollars.
Say you retire next year and you wanted to take

(31:58):
fifty thousand a year. You're down to seven hundred and
fifty thousand dollars in your account when originally it had
a million, right, and just because of poor market timing
on your exit into retirement, now you're struggling to make
ends meet. So again, I think it makes sense for
the people that are getting closer retirement, maybe they're four
or five years out from retirement, in the red zone,

(32:19):
which we like to call it, should be doing a
lot of planning in the red zone, and I think
this is a vehicle that makes sense for people that
want some protection on their portfolios. You know, you can
get market exposure, like Chris said, you get even you know,
better participation. So some of these products, if the market
does one hundred percent, you're up what one hundred and
ten percent or one hundred and five percent, So again

(32:42):
they give you some upside potential with downside protection. So
I think they're great products.

Speaker 5 (32:49):
You know what I love about working with you guys,
I've learned so much over the last year and four
months i've been affiliated, So I'm a perfect example you
can tease old dog new tricks. We've been very fortunate
and even though the annuities of only three to five
percent of our overall book of business that we manage

(33:11):
for clients, we are finding that this is having a
stronger and stronger present. For example, three years ago, interest
rates were next to zero before inflation started the skyrocket
times like that. The product we're talking about right now

(33:35):
is going to be hotter than pancakes. Because we didn't
have a lot of avenue that we could guarantee some
rate of return for our clients. Now we have solid
income portfolios made up of bonds and equity funds that
we've done very well for clients. Interest rates are coming

(33:57):
back down, There's going to be less choices for people
to go other than the equity market. So what better
way to get into the equity market with downside protection.
I think it's a win win. I think it's a
win win how people, I don't think people can afford

(34:19):
not to look at That didn't mean you're going to
do it, But we're here to educate and we'll be
the first one. If you're not a candidate, we'll tell you.

Speaker 6 (34:30):
Yeah.

Speaker 4 (34:31):
I agree.

Speaker 7 (34:32):
I think it's I think it makes a lot of
sense for a lot of people to look in this area.
And that's kind of why we're we're talking about it,
is because, like McCarthy just said, ninety percent of our book,
you know, ninety to ninety five percent of what we
do is manage assets. So that's through model allocations that
we build in office and manage you know, rollover iras

(34:54):
for clients or individual accounts and that sort of you know,
asset management. But you know, we kind of see the
industry as a whole, you know, shifting more and more
towards these variable annuity products as they get more and
more competitive with you know, asset management through a fiduciary
financial advisor. So utilizing these and learning more about them

(35:18):
is you know, something that since McCarthy joined US has
been you know, very at the forefront of like what
we're trying to do this year. And having that you
know seminar was great and talking to a lot of
these different wholesaler representatives, you know, learning more and more
about you know, how these products work and how they
fit into an overall portfolio.

Speaker 6 (35:39):
The more you learn.

Speaker 7 (35:40):
About them, you know, the more they start to make
more and more sense. And I think it's just informing
people more about you know, what's out there and what's
what's going on and you know, these different market situations
and how it can help because like you said, you know,
if if if someone's scared wants S five hundred like returns,

(36:01):
yet they're nervous about you know the downside. Oh man,
I don't want to take a twenty percent hit. I
can't do that over the next five six years. But
they got cash sitting on the sideline that's in you
know the bank where rates are gonna come down. You know,
your money market's not gonna get you four or five
percent anymore. If rates start coming down, you know, it
might come back down to two. Well, that's not really

(36:22):
that competitive anymore. So shifting some of that money off
the sidelines and getting it into a product that is
in the s and P. Five hundred but has a
ten to twenty percent downside eraser, you know, is is great.
And I think to hit on like how that eraser
works is good too.

Speaker 6 (36:41):
You know, we should probably dive into that a little bit.

Speaker 7 (36:44):
And how you know that first ten or you go
into the ten or the twenty, you know how the
how the buffer actually you know works in the product.

Speaker 5 (36:53):
I think it's essential everybody, regardless of what happened, you
have been that thing you're going, we always want to
outperform inflation. If we are not earning enough, we're losing money.
It may not be losing money in a negative or
read on a statement, but we need to outperform at

(37:15):
minimum what inflation is. And this give people a great
opportunity to get into a program where they can have
downside risks like you just shared with market returns and liquidity.
I mean, again, what was so heartwarming? I think recently

(37:39):
at that seminar was the participation of the audience and
all the questions that we're being asked, because I think
a lot of people were turned on in a positive,
positive way that annuities are not what they thought they were.
They were much more comprehensive than need. You're offered much

(38:01):
more because back in the day, all the really was
was ficed intric annuities. You know, then there was a
slow evolution. What's offered right now is more than I've
ever seen in forty years. Yeah, there's a lot to
look at. There's a lot of scenarios that annuities make sense.

Speaker 4 (38:22):
Well.

Speaker 7 (38:22):
I think that also goes to like the insurance companies
probably were listening, you know over the last thirty to
forty years.

Speaker 6 (38:29):
They're like, man, we're getting a bad rap.

Speaker 7 (38:30):
You know, we got to release some products that make
sense for the everyday investor where it's more competitive with
like an asset management firm like ourselves, Like they needed
to find where they what avenue could they take up
that asset managers are doing for their clients. And you
know what we can do is we can build out

(38:51):
an income model and you know, you know, generate as
much interest and dividends as we possibly can, but we
can't say that. You know, we can guarantee lifetime income
from your account, but these products can now guarantee lifetime
income for your money that you're putting into them, or
guarantee downside protection. You know, we can't guarantee downside protection
in your account and through an asset management, you know,

(39:14):
putting you in a model allocation, whether it's a sixty
forty or seventy thirty, however you're invested. But that's I
think where they found their niche in the word guarantee.
You know, when you tell someone you have downside protection
or self funding a pension and guaranteed income for life.

Speaker 6 (39:31):
You know, those two.

Speaker 7 (39:34):
Talking points are very attractive for a lot of you know,
every day investors.

Speaker 4 (39:38):
What does everyone want?

Speaker 3 (39:38):
Everyone wants market participation with no risk. So I think
this is definitely a topic that needs to be addressed
with you know, majority of folks out there. But but
again this is the retirement planning show. Our numbers five
one eight, five eight zero one nine one nine. If
you want to sit down and have a chat everyone,
We got to take another break and we'll be back
right after this.

Speaker 8 (40:00):
We are living through the greatest wealth transfer in the
history of mankind. Trillions of dollars of wealth will change
hands from one generation to the next. Your money for
our beloved children and grant. Are you ready. Your future
is written by chance, it's written by action. Now's the
time to build your plan, protect your assets, and position
yourself for the opportunity. Don't wait, take action. The future

(40:22):
favors those that are prepared well. Eighty eight five eight
zero one nine to one nine. That's eighty eight eight
five eat zero one nine one.

Speaker 3 (40:30):
Nine and we are back everyone. Thanks for tuning in today.
As the Retirement Planning Group. Nicholas Dumas here with Chris
McCarthy and Christopher Kopek, and on today's show, we've been
discussing annuities, you know, the ins and outs. We might
be tired of listening to us, but we're gonna keep
talking anyways, because I think they make sense for a

(40:52):
lot of people out there that are either looking for
an income stream, looking for some sort of protection that
an insurance company will provide. You know, these are insurance
vehicles right at the end of the day, so that
insurance company is absorbing you know, either the first ten
or the first twenty percent on these buffered products, the
risks associated with the market loss. So I think, Chris,

(41:14):
do you want to go through that a little bit
more and the downside protection and how that works.

Speaker 7 (41:18):
Yeah, So as far as like, you know, the protection
on the in the buffered product, so ten percent or
the twenty percent. You know, you got two options as
far as how much protection you want on your invested assets.
So the ten percent, you know, you say, the market's
down fifteen, it's going to erase the first ten of losses,

(41:39):
so your account would be down somewhere around five. And
then if you're within the buffer so markets down eight, whatever,
you'll you're flat. You know your account you know at
anniversary will be flat. And if you're up, great, you're up.
You know you're in the market. You've made money over
the last year. And there are you know, caps on
the up side for some of the products, and they're

(42:01):
different and they're you know, they're varying on how much
market upside potential you can capture. Uh, And that's you know,
the downside to getting into one of the buffer products.
But you know the benefit of the buffer products is
avoiding loss. You know how much loss can we mitigate
in these downside markets over a period of time, and

(42:21):
then the twenty percent buffer works the same exact way.
So the twenty percent buffer, you know, markets down ten
after your timeframe that you're in the product for your flat,
you know, the market's down twenty five. You know, congratulations,
you're down five and everyone else is down twenty five.
So it's just it erases, you know, the You got
to think of it as like that's your max amount

(42:44):
of losses. You can erase ten or twenty. So however
much protection you want to put on your assets or
your investments is, you know, whichever product you know, we
can sit down and review all the different scenarios and
all the different you know, upside potentials with the different
time frames if it's something that interests you.

Speaker 6 (43:04):
But yeah, did I miss anything, McArthur?

Speaker 3 (43:06):
I think people Oh sorry, I think people need to
light a fire, right you need to get moving on
these products. I think they're in a great point right now.
In the past, we've done work with these, you know,
over the last six seven years.

Speaker 4 (43:22):
You know, these caps were a lot lower.

Speaker 3 (43:24):
You know, you looked at a ten percent downside or
fifteen percent downside protection and the cap was maybe seven percent.
On the upside, for the most you can get for
that year was seven percent or eight percent. You know,
now you're looking at over perform or outperforming the indexes
right right up to a certain cap. So I think
some of those are like three hundred percent or something

(43:44):
crazy like that. So so again, these caps are better.
Now annuity companies are competing to try to win your business,
so they're offering better vehicles to do what you're trying
to accomplish. So I think they are at a good point.
When the starts decreasing rates, they might change cap rates
as well. So lighting a fire and getting going while

(44:08):
these options are available, and while these participation rates are
so high, I think makes a lot of sense.

Speaker 5 (44:14):
I couldn't agree more. I mean, there's a lot of
variable that go into what they set, as you guys
have explained beautifully. As far as we cannot talk about
all the different setups and a buffer annuity over the radio,
it's just impossible. There's too much to say. It's definitely

(44:38):
something worthwhile in person, where we can look at a monitor,
go over different scenarios, different avenues that are available to you.
It's kind of mind boggling how many different setups that
you can have.

Speaker 7 (44:56):
Well, they make it fully customizable to whoever you know
is looking for the product, which is a good thing.

Speaker 6 (45:01):
It's not a bad thing, it's a good thing.

Speaker 5 (45:03):
But I'll tell you, I think the most powerful thing
for anybody listening is who wouldn't give up some upside
gain to ensure downside protection. I think that really is
what it comes down to. Like Chrissy did a great job.
You know, if you're in the S and P five

(45:24):
hundred and it's down five percent and you got a
ten percent downside buffer, you didn't lose any money. You're
at zero. Right If the S and P was down
fifteen percent and you got a ten percent buffer, SMP
is down fifteen but you're down five, a lot of
people would be happy you're only being down five verse fifteen,

(45:48):
So they're just exciting product. There's a lot of different avenues.
In order for us to really get into different features,
it's really got to be one on them. One we
need to see in person, go over over a monitor.
But I know this is gonna really blow away a

(46:09):
lot of people.

Speaker 3 (46:09):
Their tax advantage. Tax advantaged products as well for non
retirement accounts, right, So if you take money from the
bank and put it into one of these products, you
can go in and out of indexes without being taxed
on those dollars over the you know, three six or
six years that you hold, you know, your buffered product,
you're deferring all that tax liability. And then you could

(46:32):
take the money at the end of it and in
ten thirty five into a different product and use it
for income if that's something you're looking to do. So
you know, you could do a buffer growth strategy and
then on the back end turn it into some sort
of sort of income stream for the rest of your life.
That's an option as well. So these are very customizable.
There's a lot of options out there. They're insured up

(46:54):
to five hundred thousand dollars by New York State Insurance Fund,
so even if the company were to default, you know
in New York State will step up and covers that
first five hundred dollars per individual investors. So again, they're
great products, and I think a lot of people just
don't know about them, you know, and if you don't know,

(47:15):
then you tend to not move forward, right, So you
need to know all the ins and outs of a
vehicle before you purchase it, like a truck.

Speaker 4 (47:24):
Or a car.

Speaker 3 (47:25):
But you also need to know all the ins and
outs of a variable annuity or a buffer annuity before
you make that decision as well.

Speaker 5 (47:33):
These are great thing to consider also for legacy planning
estate planning. One thing about annuities, when we went to
the Secure Act and they went from taking the inherited
eye raise that people used to be able to excuse

(47:56):
me stretch over their lifetime, now they have to take
them out over ten years. The non qualified stretch is
still the only lifetime stretch that I'm aware of that
was unaffected. So a lot of people that are leaving
money for their children, their grandchildren. These types of annuities

(48:17):
are excellent for legacy planning. A lot of people that
are doing estate.

Speaker 3 (48:23):
Planning, especially if you're unensurable. Yes, so you can't purchase
a life insurance contract. You know, these annuity products might
make sense because you don't have to go through a physical.

Speaker 5 (48:33):
Absolutely, that's a great or a combination they're up. I mean,
there's a lot of different ways that these can be
set up and coordinated that you really can maximize not
only income and investment potential, but also legacy and estate planning.

Speaker 3 (48:52):
I mean, yeah, let's say if if you do, you know,
qualify for life insurance as well. So let's say you're
someone that does have a death benefit on your head
or you and your spouse's head that's going to be
paid out to your children when you pass away. You know,
you've done all your state planning work. You have an
irrevocable trust set up or revocable trust, and that insurance

(49:13):
policy is going to get paid out to that trust.
And instead of giving the trustees the right to access
that you know lump some that gets deposited into the trust,
you have some dictations in there to where it's going
to purchase some sort of lifetime annuity for your kids
and then it's going to pay them out of monthly
income stream versus you know, receiving a four or five
hundred thousand dollars lump some. You know, you see this

(49:36):
for a lot of families who are struggling. The kids
may be struggling with you know, addiction or alcoholism or
gambling problems. So again you want to give them a
monthly income stream versus this lump sum of cash that's
going to be placed on their desks. So again, I
think it's a great estate planning legacy type of play

(49:58):
that can really create some generational wealth or generational income
for you.

Speaker 5 (50:02):
No, I couldn't, you know, like I said, And I've
been around the block a long time and it's just
amazing to me the evolution of the whole annuity business.
And you know, for people to take the time like
they did at the seminar, and we will have future seminars.

(50:22):
The participation was great and I really loved seeing because
you could tell people were enjoying learning more about it
and that their perception was not what they thought it was.
And I know we've already had a number of people
that call for appointment and it's wonderful. It's heartwarming because

(50:45):
you're doing a good service and I think it's valuable, right.

Speaker 7 (50:50):
And the thing is for the advisors out there, if
your advisor isn't bringing up these products to you or
at least mentioning them that they're available or out there,
it's probably because they're not licensed to even provide them
for you. So it's you know, the reason that we're
bringing them up is because they've just come into the
light as far as being very competitive now, so it

(51:12):
makes a lot of sense to talk about them and
bring them up and at least explain them more to
people to get them, you know, a better understanding and
feel more comfortable about them. Because if if it makes
a lot of sense for you know, a large majority
of the people that we meet with, then it makes
sense to talk about So that's why, you know, the
seminars make sense, you know, having the wholesalers come in

(51:33):
and explain them to people if need be, just to
get to people to understand that these products do exist.
You know, you can self fund to pension, you can
add downside protection onto your investments. So there's a lot
of different avenues out there that these insurance companies have become,
you know, a lot more competitive in the space of
asset management.

Speaker 3 (51:55):
So we're running up on the end of the show. Here,
is there one more thing you want to say? McCarthy.

Speaker 5 (52:01):
I just think that we pride ourselves so much as educators.
It's our job to educate our clients what's out there,
find out where they are and what their goals are,
and how can we best meet their goals. Nothing is
off the table, including annuities. If it's a good fit.

(52:22):
We're going to look at it. If it's not, we're
not gonna waste your time. But I think it's so
important let the client make the decision, and it's up
to us to help them make the most educated decision. Right.

Speaker 3 (52:37):
So we're gonna put options in front of you and
you know, discuss who you are and what you're looking
to accomplish. You know, half our job is listening and
then the rest is you know, putting these options in
front of you so you can make an informed decision
on what you're doing with your assets. So everyone, this
is this was the Retirement Planning Show. If you want
to call our office numbers five eight five eight zero

(53:00):
nine again that's five one eight five eight zero one
nine one nine. Everyone, Thanks for listening today. We'll see
you again next time.

Speaker 2 (53:11):
Thank you for listening to the Retirement Planning Show hosted
by Dave Kopec. If you would like to talk with
Dave or someone at the Retirement Planning Group, called eight
eight eight five eight zero one nine one nine. That's
eight eight eight five eight zero one nine one nine
during business hours, or visit rpgretire dot com. The Retirement
Planning Group has five convenient offices located in Syracuse, Adianta, Albany, Malta,

(53:36):
and Glen Falls. Tune in next week for retirement planning
strategies with Dave Kopec right here on WSYRS The Retirement
Planning Show. Right here on WSYRS, The Retirement Planning Show