Retirement Planning Show

September 23rd, 2023

Episode Transcript

(00:01):
Hey, good morning. I'm DaveKopek. You're listening to the Retirement Planning
Show. We're here on the weekendsfrom seven am to nine am to hopefully
educate you, inform you on theoptions and the obstacles that you'll face during
your pre impost retirement years. Iam the retirement planning specialists for WGY,
Very proud of that, very proudof our participation with this great iHeart radio

(00:26):
radio station. Anything that we're discussing, you can give us a call at
one five one eight five eight zeroone nine one nine five one eight five
eight zero one nine one nine willbe more than happy to sit down with
you discuss your personal situation. Youcan check us out also on the web

(00:50):
at rpg retire dot com rpg retiredot com. We are an independent investment
advisory firm located here in Malta oneatooffice at downtown Albany office and of course
cleanse Falls. So if anything thatwe're discussing, we've had a lot of
success at WGY. I've had alot of individuals sit down with us and

(01:12):
have a chat and become clients.And it's always exciting to sit down and
meet new individuals that have been listeningto the show for a long period of
time. Our core client, whichNico and I talk about all the time,
are the hard working savers. Wedo a lot of work with National
Grid, Bimbo, Bakeries, alot of g individuals of course, plumbers,

(01:37):
electricians, people that had their ownbusinesses, people that do not have
pension benefits. That's really a focusthat we build out this retirement income distribution.
That leads me into this morning sayingmorning and Nico good Morton, Dave.
Here we are again back in thesaddle, another Saturday in upstate New

(01:57):
York. But we're gonna a lotof the listeners need to go from around
the country. And iHeart Radio,Yeah, I think we had someone reach
out from Kansas. Yeah. Online, we have a lot of Texas,
a lot of folks in Florida listento us on the iHeartMedia app. So
there's different ways to get a holdof us on Saturday mornings if you want

(02:19):
to tune in. But we've hada lot of great listeners, a lot
of great initial conference conversations sometimes sometimessometimes confrontations, but a lot of great
people have coming to the office anduh yeah, I mean we we travel.
We went to Oneana a couple ofweeks ago and UH visited with a
couple of clients, and then wealso did a couple of house calls,

(02:40):
went to a couple of longer termclients over on Oneida Lake and UH it
made me muffins, We had somecoffee and it was it was a good
appointment. So, but we're traveling. We're more than happy to come see
you. If you're an elder folkthat doesn't drive anymore, we would certainly

(03:00):
come out and see you if youneed our assistance. That's what we hear,
that's what we're here for. Yousaid something the other day that resonnated
with me with a couple of clients. It doesn't matter if you have two
thousand or two million dollars, We'regoing to help you. Yeah. So
I thought that was a very importantdiscussion. And a lot of folks might

(03:22):
think they don't have enough money towork with a financial advisor. That's not
the case. Some advisors do requirea minimum amount of assets to work with
them. We don't do that.There's no account minimums. We're here to
help. Our goal is to helpyou the individual, and we're here to
educate you and inform you on whatyou have. Yeah, I think it's
important if you do radio. Ithink it's critical that if you're giving a

(03:45):
message out there that we're here tohelp people and we're proud to do it.
Of course, that there shouldn't bea barrier for people to work with
us if they have two thousand dollars, twenty thousand or two million, and
know your goals and objectives are goingto be the same as the other individual.
I mean, some people have hadmore success in their life, and

(04:06):
we applaud that, but there's alsowe applaud the people that have worked hard.
I come from a farming background,so if that's the case, you
know then as most people are wellaware, farmers work seven days a week
and they don't make a whole hellof a lot of money. So the
bottom line gets down to is thatit's always an honor to help people,

(04:26):
no matter what your financial situation is. If we can't help you, we're
definitely going to put you in theright direction and find someone that can.
But as you're all quite well aware, we've been doing this. I've been
doing it for forty one years.I've never said you had to have a
half a million dollars to work withus. I think that that's bogus.
I think it kind of defeats thepurpose. Some of our largest accounts have

(04:48):
come from referrals from some of oursmallest accounts. Yeah, and you know
that. Yeah, and you haveto Yeah, you have to help anybody
that's has a handout in our arelooking for help, and that's what we're
here to do. A lot offolks they might inherit assets, they don't
know what to do with them.They don't know how the arm d's are

(05:09):
calculated if they're inherited an IRA account, or how the ten years spend down
works. So if they had someannuities, some difficult assets to deal with,
we have to go through that withthem and make sure they understand what
they have and come up with thebest game plan to make sure that that's
going to last and accomplish what theywant to accomplish with that money. So
yeah, the other things too,is that you know, we're gonna get

(05:30):
right into it here because there's alot of news this week. And I
think the big thing, of course, is everybody's been holding their breath with
interest rates and what the pet whatthe peed, the ped my pets are
debt. What the Fed, misterPowell was going to say, and of
course he came out with the statementthat they were going to sit tight with

(05:51):
rates, but they're going to staylonger, higher, for longer, and
there's the anticipation that they might haveto raise rates again befour years end another
twenty five basis points. So alongwith that decision coming, we're going to
hold rates in the range of fiveto twenty five to five fifty, which
is a twenty two year high.And the FED released updated economic forecast for

(06:15):
interest rates, unemployment, growth,and inflation, which I'm not going to
go through because it will bore youto death. But the bottom line gets
down to is that we are goingto see rates at elevated levels, and
those elevated levels are probably good forpeople that like safety and guarantees, which
we've talked a lot about NICO,because that means that these higher rates that

(06:39):
we've seen in CDs and money marketaccounts, corporate bonds, et cetera,
are not going to go away inthe very near future. They're not talking
about any of these reductions now untiltwo thousand and twenty five and possibly into
two thousand and twenty six. Yep, I mean twenty twenty four. They

(07:00):
were talking about estimates on cuts previouslyin June they mentioned four, but they're
thinking maybe two next year. Butagain, I mean, it's just the
their plot graph that they show,and it's just estimates. They have a
twenty twenty five goal of about threepoint nine percent on the Fed funds rate,
which you mentioned is five point twofive to five five right now,

(07:23):
so they're gonna they're gonna try toget back to three point nine in two
years. So we do have anextended period of time here where rates should
be pretty high and you can guaranteesome of these returns. I mean,
CDs are offering five and a halfpercent for anywhere from three to eighteen months,
and then you're looking at multi yearguaranteed annuity contracts that are at five

(07:46):
percent right now for five years.Outside of New York State, they're as
high as five point six exactly.So if you go outside in New York,
you can get even a little moreon those multi year contracts. Our
clients that are in Connecticut, Massachusetts, Vermont, Florida, all the other
states that we're starting to hear fromprospective clients through the iHeart Radio, Spotify

(08:07):
and of course our podcasts. It'sit's it's it's a good spot to be
in because you have the ability toget some additional safety in your portfolio.
But the bottom lin gets down tohigher rates will also have a negative impact
the sun parts of the economy.And of course the big one is of
course credit cards need go. Yeah, a lot of folks need to spend

(08:31):
more money and where are those dollarscoming from. If their income doesn't raise
at the same pace as inflation andthey continue on their normal spending path,
then they could start building some creditcard debt. And these credit card companies
are charging an arm and a legfor interest nowadays, So it's something you
really want to try to avoid atall costs. But if you are someone

(08:52):
that is struggling, it's tough toget out of the whole, and there's
ways to plan and start creating goalson a long term to get out of
debt. So but no, there'sthere's quite a few things that the Fed
did discuss. One other thing wasthey were talking about monetary policy. This
is as aggressive as it's been sincethe early eighties. Yep, they've done

(09:16):
about eleven hikes since March of twentytwenty two, and we're looking at another
hike before the end of this year. That gives you twelve hikes in the
past year and a half. So, yeah, did the rates have come
up an extreme amount over the lasttwo years. I mean, beginning of
twenty twenty two, you couldn't getanywhere near what we're getting right now on

(09:37):
a lot of these fixed contracts.You know. The thing is is that
what I always say is that there'sthere's always a sweet spot and anything that
is done by the FED. Andthe sweet spot, of course, is
that you're gonna see boden yields,which I'm gonna talk a little bit about
today because I used to trade alot of bonds. These are all quite
well away when I was working atPained Webber, But that was in the

(10:00):
days when we had twelve, thirteen, fourteen, fifteen percent interest rates depending
on the investment grade or high yieldbond portfolios that we were building out.
And you know, there is wecan sugarcoat this a little bit because for
people that are looking for coupon ordividend nico cash flow for their investment portfolios,
it's a pretty attractive time right nowin order to build out bond portfolios

(10:24):
or fixed income portfolios, because ifyou blend them, you're going to get
at least a six percent. Dependingon how aggressive you want to be,
you might get close to eight eight. I mean, we're doing some investments
right now, we're our clients onsome of these alternative products that we use,
we're getting somewhere between twelve or ten, ten, twelve, fourteen percent
depending on the portfolio. So shouldeverybody put their money there, No,

(10:48):
absolutely not. But can you takea little bit of your money and put
it there in order to enhance yourelectus enhance the yield on your portfolio.
You like that, yield enhancers.You've been saying it for a while now,
because it's very attractive right now.We do have these options that are
available. This is making our joba lot easier with the rates being this

(11:09):
high and solving for income. Inthe past, when rates were low,
we had to look at alternative investmentsor dividend producing stocks to get you the
income you need it off your portfolio. Now we can actually look at fixed
income again. We can actually lookat ponds. They're a little safety net
in your portfolio and add the fiftyfifty balanced type of portfolio for growth and

(11:31):
then for also income on the otherside, I think we're in a much
better place when it comes to retireespeople that are trying to collect income off
their accounts. Now, well,you and I both know. You and
I both know that the pendulum alwaysswings too far on Wall Street. And
you and I both know that theappetite for risk. You know when people

(11:54):
when people walk in here and theysay to us, I want more equities
exposure. Now, why are weso allocated towards fixed to income in cash
and safety? You know, thestock markets up, you know, we're
up eight nine percent of the year. You know, the S and P
five hundreds up fourteen or fifteen percent. Now now they're saying, well,

(12:15):
there's a lot of volatility out there. You know, I don't know if
I want to so much equity inmy portfolio, right, Yeah, I
mean you've got to, you know, you've got to drink the kool aid
of what you can absorb, whatyou can emotionally absorb as far as risk
in your portfolio, and don't bechasing after an investment because it's not going

(12:35):
to work out you always buy atthe wrong time. Fear and greed are
two big words that dictate a lotof investments by the individual, and you
need to limit yourself to doing that. Typically, when the markets on a
run, they want to get inand get more aggressive, and then that's
when the market tends to fall offa little bit. So you need to
be careful. Everyone. We're runningup on our first break here. We're

(12:58):
going to take a break back rightafter this. Hey, good morning,
I'm Dave Kopek. You're listening tothe Retirement Planning Show. We're here on
the weekends from seven am to nineam to hopefully educate you, inform you
on the options and the obstacles thatyou'll face during your pre impost retirement years.
I am the retirement planning specialists forWGY. Very proud of that,

(13:22):
very proud of our participation with thisgreat iHeart radio radio station. Anything that
we're discussing, you can give usa call at one five one eight five
eight zero one nine one nine fiveone eight five eight zero one nine one
nine. Will be more than happyto sit down with you discuss your personal

(13:46):
situation. You can check us outalso on the web at RPG retire dot
com, rpg retire dot com.We are an independent investment advisory firm located
here in Malta oneato office at downtownAlbany office and of course cleanse falls.

(14:07):
So if anything that we're discussing,we've had a lot of success at WGY.
I've had a lot of individuals sitdown with us and have a chat
and become clients. And it's alwaysexciting to sit down and meet new individuals
that have been listening to the showfor a long period of time. Our
core client, which Nico and Italk about all the time, are the

(14:28):
hard working savers. We do alot of work with National Grid, Bimbo,
Bakeries, a lot of g individualsof course, plumbers, electricians,
people that had their own businesses,people that do not have pension benefits.
That's really a focus that we buildout this retirement income distribution. That leads

(14:50):
me into this morning and say goodmorning and Nico, good Morton, Dave.
Here we are again back in thesaddle another Saturday and upstate New York.
But we're getting a lot of listenersneed to go from around the country
and iHeart radio. Yeah, Ithink we had someone reach out from Kansas.
Yeah. Online, we have alot of Texas, a lot of

(15:11):
folks in Florida listen to us onthe iHeartMedia app So there's different ways to
get a hold of us on Saturdaymornings if you want to tune in.
But we've had a lot of greatlisteners, a lot of great initial conference
conversations. Sometimes sometimes sometimes confrontations,but a lot of great people have coming
to the office. And uh,yeah, I mean we travel. We

(15:33):
went to Oneana a couple of weeksago and uh visited with a couple of
clients, and then we also dida couple of house calls, went to
a couple of longer term clients overon Oneida Lake and uh it made me
muffins. It was. We hadsome coffee and it was it was a
good appointment. So but we're traveling. We're more than happy to come see

(15:56):
you. If you're an elder folkthat doesn't drive anymore, we would certainly
come out and see you if youneed our assistance. That's what we hear,
that's what we're here for. Yousaid something the other day that resonnated
with me with a couple of clients. It doesn't matter if you have two
thousand or two million dollars, we'regoing to help you. Yea. So

(16:18):
I thought that was a very importantdiscussion. And a lot of folks might
think they don't have enough money towork with a financial advisor. That's not
the case. Some advisors do requirea minimum amount of assets to work with
them. We don't do that.There's no account minimums. We're here to
help. Our goal is to helpyou the individual, and we're here to
educate you and inform you on whatyou have. Yeah, I think it's

(16:41):
important if you do radio. Ithink it's critical that if you're giving a
message out there that we're here tohelp people and we're proud to do it.
Of course, that there shouldn't bea barrier for people to work with
us if they have two thousand dollars, twenty thousand or two million, and
you know, your goals and objectivesare going to be the same as the

(17:03):
other individual. I mean, somepeople have had more success in their life,
and we applaud that, but there'salso we applaud the people that have
worked hard. I come from afarming background, so if that's the case,
you know, then as most peopleare well aware farmers work seven days
a week and they don't make awhole hell of a lot of money.
So the bottom line gets down tois that it's always an honor to help

(17:26):
people, no matter what your financialsituation is. If we can't help you,
we're definitely going to put you inthe right direction and find someone that
can. But as you're all quitewell aware, we've been doing this.
I've been doing it for forty oneyears. I've never said you had to
have a half a million dollars towork with us. I think that that's
bogus. I think it kind ofdefeats the purpose. Some of our largest

(17:49):
accounts have come from referrals from someof our smallest accounts. Yeah, and
you know that. Yeah, andyou have to Yeah, you have to
help anybody that's as a handout andare looking for help, And that's what
we're here to do. A lotof folks, they might inherit assets,
they don't know what to do withthem. They don't know how the arm

(18:10):
d's are calculated if they're inherited anIRA account, or how the ten years
spend down works. So if theyhad some annuities, some difficult assets to
deal with, we have to gothrough that with them and make sure they
understand what they have and come upwith the best game plan to make sure
that that's going to last and accomplishwhat they want to accomplish with that money.
So yeah, the other things toois that you know, we're gonna

(18:32):
get right into it here because there'sa lot of news this week, and
I think the big thing, ofcourse, is everybody's been holding their breath
with interest rates and what the pet, what the pet? The ped my
pets are debt? What the Fed? Mister Powell was going to say,
And of course he came out withthe statement that they were going to sit

(18:52):
tight with rates, but they're goingto stay longer, higher for longer,
and there's the anticipation that they mighthave to raise rates again before years end
another twenty five basis points. Soalong with that decision coming, we're going
to hold rates in the range offive to twenty five to five fifty,
which is a twenty two year high. And the Fed released updated economic forecast

(19:17):
for interest rates, unemployment, growth, and inflation, which I'm not going
to go through because it will boreyou to death, But the bottom line
gets down to is that we aregoing to see rates at elevated levels,
and those elevated levels are probably goodfor people that like safety and guarantees,
which we've talked a lot about NICO, because that means that these higher rates

(19:40):
that we've seen in CDs and moneymarket accounts, corporate bonds, etc.
Are not going to go away inthe very near future. They're not talking
about any of these reductions now untiltwo thousand and twenty five and possibly into
two thousand and twenty six up.I mean for twenty twenty four. They

(20:03):
were talking about estimates on cuts previouslyin June they mentioned four, but they're
thinking maybe two next year. Butagain, I mean, it's just their
their plot graph that they show,and it's just estimates. They have a
twenty twenty five goal of about threepoint nine percent on the Fed funds rate,
which you mentioned is five point twofive to five five right now,

(20:25):
so they're gonna they're gonna try toget back to three point nine in two
years. So we do have anextended period of time here where rates should
be pretty high and you can guaranteesome of these returns. I mean,
CDs are offering five and a halfpercent for anywhere from three to eighteen months,
and then you're looking at multi yearguaranteed annuity contracts that are at five

(20:48):
percent right now for five years.Outside of New York State, they're as
high as five point six exactly.So if you go outside in New York,
you can get even a little moreon those multi year contracts. Our
clients that are in Connecticut, Massachusetts, Vermont, Florida, all the other
states that we're starting to hear fromprospective clients through the iHeart Radio, Spotify,

(21:08):
and of course our podcasts, it'sit's it's it's a good spot to
be in because you have the abilityto get some additional safety in your portfolio.
But the bottom lin gets down tohigher rates will also have a negative
impact the sun parts of the economy. And of course the big one is,
of course credit cards need go.Yeah, a lot of folks need

(21:32):
to spend more money, and whereare those dollars coming from. If their
income doesn't raise at the same paceas inflation and they continue on their normal
spending path, then they could startbuilding some credit card debt. And these
credit card companies are charging an armand a leg for interest nowadays, so
it's something you really want to tryto avoid at all costs. But if

(21:52):
you are someone that is struggling,it's tough to get out of the whole.
And there's ways to plan and startcreating goal on a long term to
get out of debt. So butno, there's there's quite a few things
that the FED did discuss. Oneother thing was they were talking about monetary
policy. This is as aggressive asit's been since the early eighties. Yep.

(22:17):
They've done about eleven hikes since Marchof twenty twenty two, and we're
looking at another hike before the endof this year. That gives you twelve
hikes in the past year and ahalf. So, yeah, the rates
have come up an extreme amount overthe last two years. I mean,
beginning of twenty twenty two, youcouldn't get anywhere near what we're getting right

(22:38):
now on a lot of these fixedcontracts. You know. The thing is
is that what I always say isthat there's there's always a sweet spot and
anything that is done by the FED, and the sweet spot, of course,
is that you're going to see bodenyields, which I'm gonna talk a
little bit about today because I usedto trade a lot of bonds these are
all quite well away when I wasworking pain Webber, but that was in

(23:00):
the days when we had twelve,thirteen, fourteen, fifteen percent interest rates
depending on the investment grade or highyield bond portfolios that we were building out.
And you know there is we cansugarcoat this a little bit because for
people that are looking for coupon ordividend nico cash flow for their investment portfolios,

(23:22):
it's a pretty attractive time right nowin order to build out bond portfolios
or fixed income portfolios, because ifyou blend them, you're going to get
at least a six percent. Dependingon how aggressive you want to be,
you might get close to eight eight. I mean, we're doing some investments
right now, we're our clients onsome of these alternative products that we use,
we're getting somewhere between twelve or ten, ten, twelve, fourteen percent

(23:45):
depending on the portfolio. So shouldeverybody put their money there, No,
absolutely not. But can you takea little bit of your money and put
it there in order to enhance yourelect This enhance the yield on your portfolio.
You like that yield enhancers. You'vebeen saying it for a while now
because it's very attractive. Right now, we do have these options that are

(24:07):
available. This is making our joba lot easier with the rates being this
high and solving for income. Inthe past, when rates were low,
we had to look at alternative investmentsor dividend producing stocks to get you the
income you need it off your portfolio. Now we can actually look at fixed
income again. We can actually lookat ponds. They're a little safety net

(24:27):
in your portfolio, and add thefifty fifty balanced type of portfolio for growth
and then for also income. Onthe other side, I think we're in
a much better place when it comesto retirees, people that are trying to
collect income off their accounts. Now, well, you and I both know.
You and I both know that thependulum always swings too far on Wall

(24:49):
Street. And you and I bothknow that the appetite for risk, you
know when people when people walk inhere and they say to us, I
want more equities explode. Now,why are we so allocated towards fixed to
income in cash and safety? Youknow, the stock markets up, you
know, we're up eight nine percentof the year. You know the S

(25:10):
and P five hundreds up fourteen orfifteen percent. Now now they're saying,
well, there's a lot of volatilityout there. You know, I don't
know if I want to so muchequity in my portfolio, right, Yeah,
I mean you've got to, youknow, you've got to drink the
kool aid of what you can absorb, what you can emotionally absorb as far

(25:30):
as risk in your portfolio. Anddon't be chasing after an investment because it's
not going to work out. Youalways buy at the wrong time. Fear
and greed are two big words thatdictate a lot of investments by the individual,
and you need to limit yourself todoing that. Typically, when the
markets on a run, they wantto get in and get more aggressive,

(25:52):
and then that's when the market tendsto fall off a little bit. So
you need to be careful. Everyone. We're running up on our first break
here. We're gonna take a break. We'll be back right after this,
and we are back everyone. Thanksfor tuning in. This morning was the
Retirement Planning Show. My name's NicholasThomas, certified Financial Planner and Professional plan
Consault And with THEE that was amouthful. Ye, you could just say

(26:18):
CFP, CFP and PPC Retirement PlanningGroup we're here every Saturday morning from seven
to nine. Did you like yournew Did you like your new car?
Boy? Where is it? Areyou giving me the forward? Yeah?
Trading trucks? Yeah? Is itthe Beetle? You give me the Civic

(26:45):
nineteen ninety Chris is the demo Derbycar. I went to the Stoke Fair?
Did you Did you get a chanceto check it out? I saw
buddy of mine yesterday. I stoppedat Stewarts to get gassed, and he
said he went up to the SketticokeFair and he hadn't been there in years,
and he said he had a greattime. And he said that they
had a thing there, uh,karaoke really where you'd have to They were

(27:08):
singing karaoke and there were certain songsand stuff. And his his wife passed
away, so he was there withhis girlfriend, and his girlfriend, uh,
you know, said yeah, let'sdo this. So she gets up
and grabs in the microphone. Heleft. He left, He just began.
He went to sit at a picnictable and ate a bullet showder or

(27:29):
something like that. So I guesshe did it with some other guy.
So yeah, but you know hechickened out those dragtter bulls are really cool.
That's what I went. So.Well, you know, my mother
had the Shaga Bell restaurant for years, so we paid our taxes by parking
cars. So when the Scotticook Faircame, it was never fun for me
because it always meant work where youknow, that's all we did was work

(27:53):
parking cars and the ref run andthe restaurant and stuff. So how much
was it back then, parker car? I think two dollars? I think
two bucks? Two bucks? He'slike fifteen or twenty is it now?
To pay? And right across thestreet where Stewart's is, that was the
Wanco family, Harry Wanco. Hehad the gas station there. He had

(28:14):
a huge field and he used tomake some bank because it was right across
from the gate. Right right acrossfrom the gate, that's where the rides
are and everything. Yeah, that'sexactly right. So the thing is is
that, yeah, it's a greatfamily day and that's it's always fun.
It's always fun to grow up inthe country. Did you go see all
your friends, well friends, theanimals, the cows, the cows and
the goats over there? Now youremember me, I don't know We used

(28:38):
to have goats on the farm anda mini horse. That was about it.
No cows, right, that's allright, all right? What are
we talking about? We're talking aboutrates, bond yields, and discounts.
So closed end fund trading at adiscount right now current rates I wanted to
go through. This is as ofSeptember twenty first, just to put it
out there. I was like atCDs, so it don't hold us to

(29:00):
us, folks, But the chancesare, with interest rates going up,
they're either going to be what we'resaying they are, they're gonna be a
little bit higher. But you know, these are the rates as of right
now, as the twenty first onewe got the statement, So we're looking
at a three month CD. Theannualized yield is about five point five percent?
Is it? Really? It's thesame for the eighteen month So from

(29:23):
three months to eighteen months with fidelity. Wow, that's what we're looking As
far as CDs five and a half, five and a half and that's eighteen
months. Anything further out, wereable to see anything further yep. So
they've got a two year it's tradingat five point three yep. And then
you get a little less every year, So your sweet spot is two is
eighteen months. I would say Iliked the two year, Yeah, the

(29:45):
two year five point three, thethree years at five point one, I
think that's pretty attractive. And thenyou start getting below five. After three
years, you're looking at a fouryear of four point eight, five five
year at four point seven, whichthat's nothing to bok at either. I
mean, I think those are greatrates on the long term. Yea.
If the Feds targeting three point sevenor three three point nine percent in twenty

(30:08):
twenty five, two point nine percentin twenty twenty six, so we're talking
three years from now, they're lookingat two point nine percent rates is what
they want it to be. Yep. And if we can lock in a
three year at five point one,I mean we're more than two percent above
the above the curve. Yeah.And right now as of this warning,

(30:29):
looking at what's trading, we're lookingat a three month treasury at five forty
six, a six month at fivefifty three, five five three, at
a twelve month at five forty seven. So as we said, blend the
portfolio, get some guaranteed rates.The two years out of five seventeen so
the CD, he's giving you alittle bit better a yield and the than

(30:55):
the treasury is right now. Andof course that's back SIPPIC is two hundred
and fifty thousand dollars per financial institution. I mean the one fault with CDs,
I mean the surrender charges that areassociated with them. So if you're
well, you can you can buythem through fidelity. That are they Some
of them have surrender charges you ahundred percent, right, and some are
MVA. So they traded, sothey trade whatever the market value is.

(31:18):
They trade just like a bottle andsomeone would buy it. Right. So
the thing is is at a interestrates drop, you might be able to
get a little more bang for yourbuck. But you know, typically if
you're going to get in a CD, I always tell people they should probably
just sit tight and just look atit as an anchor of the portfolio,
you know, the stabilizer. I'mexcited to see where our money market goes.
We're already at five percent of themoney market. I think you're going

(31:40):
to get more a little more bangfor your buck, but you can remember
that's really short duration paper that couldchange whenever. Yeah. So but yeah,
even if you want just liquidity,complete liquidity. You can park it
in the money market for a fewmonths. They got two hundred thousand dollars
sitting in the savings account. Whatis that doing for you? I mean,
we're talking thousands of dollars. Ifyou move that to some sort of
money market, sure, we coulddo that for yet fidelity. You know

(32:04):
five percent. Again, that's notguaranteed for a duration, but right now
it's getting five percent. So we'rereally trying to advise folks to take advantage
of that rather than letting it sitat the bank. Yep. And the
thing is is that, you know, one of the things that you need
to understand is that these rates thatwe're quoting a change on a daily basis,
especially the ones that are you know, market driven, that trade on

(32:28):
a daily basis, such as treasuries, such as corporate bonds, such as
bond funds such as ETFs. AndI want to get into that a little
bit because I had a guy calledme the other day and says, Dave,
should I be buying individual bonds bondfunds or should I be doing bond
ETFs? And I said, listen, I'll talk a little bit about it
on the radio. This week,So I give you some clarity as far

(32:50):
as what I think you should do. If you want safety a principle,
you build out your own bond portfolio. You build it up. You know,
especially now, what's available to you. Actually their math problems. That's
exactly what you're buying an individual bond. You know what you're buying it for,
whether you're buying it for a premiumor a discount, and you know
what your yield is going to beoff that bond unless they default, So

(33:13):
it is pretty much just a mathproblem at that point. And buying the
yield versus bond price, that's somethingpeople are always like, you know what,
why is my yield lower than thecoupon the interest rate that they're quoting
me? That because you bought abond at a premium, and bonds trade
inversely to interest rates. So ifI got a bond that's out there a

(33:34):
ten percent coupon bond, right,and it goes to twelve percent, right,
then that bond is going to dropin value. Now, I'll still
get the ten if I hold itto maturity, but if I want to
sell the bond, I'm not goingto get par for it or a thousand
dollars per bond, because in orderfor it to compete in the current marketplace,

(33:54):
I have to drop drop the pricein order for it to yield at
least twelve percent for the next guyto pick it up. So just realizes
that yield versus bond price, uhis it's always an inverse relationship. As
interest rates go up, bond pricesgo down. As interest rates go down,
bond prices go up. Yeah.Clearly those older bonds with a lower

(34:16):
coupon, they're going to be worthless. So that's going to trade at
a discount because there's newer bonds witha higher coupon that is more attractive to
people. You know that. Youknow the calculation for current yield. They
have that on the CFPA. Theydid, okay, current, it's go
ahead. I can see if Ican catch you. It's a risk for

(34:37):
something with a risk free rate.It's annual. It's the annual coupon the
interest rate divided by the bond price. Whatever. It's trade. Oh,
that's easy, it's yeah, butit's I'm trying to catch you, man,
But I caught I caught you.That's that's why I've got my math
calculator. I can figure out currentyield just with my financial calculator, and
then you know yield to maturity.Yield to maturity is what you want to

(34:58):
look at, right because that alsothat combines the current what it's trading app
so whether it's a discount or premium, and also the coupon, so it
gives you the total yield you're gonnaget from your investment until that bond matures.
That's exactly right, that's exactly right. So yield to maturity, that's
the one that you want, folks. I think if somebody, because I
can remember when interest rates were droppingand a lot of these bonds they'd be

(35:20):
giving the current yield off the portfolio, that means nothing. You really want
yield to maturity because yield to maturityis the one that you know at your
net return. Yield to maturity.So it's important, so be careful out
there. Give us a call ifwe can help. Well, these segments
are going by really quick today.Well we're quick. That's my nickname.
We're flash were flash over there.I thought it was Fred Flintstone. It

(35:44):
is Fred Frankie Tire. That's ifyou want to give us a call.
And talk to Fred. It's fiveeight five eight zero one nine one nine.
That's five eight five eight zero onenine one nine. Or visits on
the web rpg retire dot com everywhereand take a break. Yea, dad,
We'll be back right after. Andwe are back. I'm Dave Kopec.

(36:07):
I'm here with Nicholas Doomas, CertifiedFinancial Planner. I am the president
of the Retirement Planning Group and alsothe retirement planning specialists for WGY. If
you're a long time listener, youknow that we focus in on pre impost
retirement planning. If you have thedesire to sit down with us, we

(36:29):
love the opportunity. You can giveus a call of five eight five eight
zero one nine one nine. Thatis our office. Our corporate headquarters were
in Oneana, Albity, Glen's Fallsof course, Malta that I just talked
about. Get a lot of phonecalls, a lot of face to face
meetings. It's obvious that our topicsthat we're talking about resonating with people.

(36:50):
And today we're talking about the dynamicsof what's happened with the FED guaranteed rates,
money market accounts, bond fund ZTFand that's what we're going to talk
a little bit about now. Andthe question that I have for Nico is,
of course bond funds, bondy tfsor closed end funds of course give
you dead instruments the ability to getincome. Which one is better? Yeah,

(37:14):
it depends on the investor. Howabout individual bonds too, I'll throw
that one in also. Honestly,I couldn't tell you which one's better because
I don't know who we're talking to. It depends on who you are.
That's a good answer. The riskyou're willing to at, that's a good
answer. Yeah, it was agood answer. I mean it's everyone.
It's got to be suitable. Investmentneeds to fit what you're looking for.

(37:35):
Some of these investments, like youwere saying, individual bonds, those are
more math problems. If you wantto protect the principle, you know what
you're going to get as long asthe company doesn't default, then those individual
bonds are more suited for you.And right now, I was just looking
at some individual bonds on the marketplaceand there's some pretty attractive yields out there,
and you can you can still getthem at a discount too, which
is nice. So you can geta return on the investment, but yield

(37:57):
to maturity, the yield to maturityis what you want to look at.
But yeah, we talked a littlebit before the break about bonds individual bonds.
There's also bond funds. You canlook at mutual funds that invest in
a basket of these bonds, butthose are going to fluctuate in price.
They did all the way back tothe nineteen twenties. Mutual funds, as
far as individual bond portfolios are balancebalanced funds. Yeah, so again you

(38:23):
can look at mutual funds that investin fixed income or bonds and current yields
on what those funds are kicking off. But the principle is going to fluctuate
a little bit as you hold thosedepending on what interest rates are doing and
depending what those bonds are doing withinthat mutual funds, so you need to
be careful. And then also whichwe didn't talk about yet, and you

(38:45):
just mentioned closed end funds. Sothere are closed end funds that trade at
net asset value. You're able tobuy them at a discount to net asset
value or a premium based on whatthe current offering price is, and they
typically never trade a true true value. Yeah, it's always at a discount.

(39:07):
They're always at a discount or becauseit's the old economics, one on
one, it's supplied to man.That's how they don't different than a stock.
They trade based on net asset values. That correct, A lot of
your hedge funds will buy closed endfunds as a hedge. Then they traded
a major discount to nav because theyknow ultimately it will catch up and it's

(39:27):
a pretty good bang for your buck. Yeah, in regards the yield that
they're getting, and we do somework with some closed end funds. We
also do work with covered call writingstrategies, just trying to increase the yield.
Like you said earlier in the show, yield enhancers, trying to enhance
that yield in the portfolio to makesure you get the income you need in
your retirement years. So for somefolks, these closed down funds might make

(39:50):
sense. If they're offering an extremediscount, you can ride it back up
to the net asset value to getsome capital appreciation while also collecting that yield
off the end. The other positiveclosed end funds is because they trade like
an equity. Listen to me,folks, because This is ding ding ding
and important. The portfolio manager doesnot have to liquidate positions simply because of

(40:19):
people that are looking for their cash. So if there is a windfall and
people are looking to cash in,the port portfolio manager might have to sell
positions to satisfy the income requirements.That is not the case on a closed
end fund. Because a closed endfund trades as a security right and the

(40:39):
key to it is closed in.That means that there's no active management as
far as money going in and goingout. So they trade during market out
too. Because they act like asecurity, you're able to purchase something throughout
the day, whereas these mutual fundsthey would settle at close, so that
market close, that's when you're mutualfunds will be purchased or sold based on

(41:02):
when you enter the trade in thesystem. But so these closed end funds,
you do want to make sure youtake a second and actually know what
you're getting involved in. Just becauseit says it's at a discount doesn't mean
it's going to directly come back tonet asset value. But you need to
make sure you know what your ownat the end of the day. Yeah,
there's there's always risk with investment.Yeah, and there's two keywords here,

(41:27):
Okay, closed end funds versus openedended funds. Okay, opened end
it funds are traditionally the mutual fundsare open ended funds. New shares are
created whenever an investor buys them.They are retired when an investor sells them.
Closed end funds issue only a setwhich I just set okay, set

(41:49):
number of shares which are then tradedon an exchange, so the portfolio managers
can build out his position and notworry about liquidations in order to upset the
apple cart, because he might bethinking three to five years, where some
of his investors might be thinking sixor twelve months. Closed end funds are
considered a riskier choice because they useleverage. YEP. A lot of times

(42:10):
they use leverage, that is,they invest borrowed money in order to multiply
the potential returns. That's why whenwe said it initially today when we open
up the show, we have someclosed end funds that we purchase for our
clients. They're giving us yields ofanywhere from ten to fourteen percent, but
we're willing to do that as ayield enhancer. Beautiful and yeah, with

(42:36):
the beautiful. So the closed endfunds, they only give a set number
or they issue a set number sharesof shares out to the public. That's
why they trade on supply and demand, because there's a supply for those shares,
and people, depending whether they wantit or not, are going to
start providing some demand and that's whatwill influence the price of those positions.
There's billions of dollars out there andclosed end funds. It's an event category

(43:00):
that's known a lot to the retailinvestors brokers, but closed in funds seventy
percent of them use leverage seven outof ten. So using borrowed money,
as I said, creates bigger lossesif you get kicked in the teeth,
they also give you what bigger gains. Yep. So there's a there's a

(43:22):
bunch of different options out there.And the nice thing with Retirement Planning Group
are firm guys. We're nice guysand we have open architecture, so the
doors always open on the investment optionsthat are available to us. We're not
set to any one fund company.We work with companies across the whole market.
There's also unit investment trusts that I'mnot a fan. I don't think

(43:44):
i'm a fan. I've never beena fan of US. I've never seen
them. The only time I'll tellyou where a u T made sense,
Yeah, that I can think ofwhen I started in the business years ago.
Yeah, at unit investment trusts thatwere ensured and they were tax for
New York State municipal bonds and theywere paying like eight or nine percent totally

(44:07):
exampt from state and federal income taxwith a specific time frame before they would
mature. So u T s,I think we see them sometimes for one
of our vendors. I've never beena big believer in them because lack of
liquidity, lack of liquidity transparency.The thing is is that I'm just not

(44:30):
a big fan of US unless unlessit's kind of a hedge position where you
know, it's something unique like acovered coal writing ut, right, which
we've used before. That's that's whyI mentioned it. We've used those in
the past for covered call writing.But no, I mean with a lot

(44:52):
of funds, you can kind ofcapture the same type of investment, not
not utilizing a u T. Soyou can buy some sort of ETF or
mutual fund more liquid but it accomplishesaround the same goal. But all right,
so we got us unit investment truststhat invest in bonds. We have
closed end funds. We have thetraditional mutual funds, right, opened ended

(45:15):
funds, you know that will youknow, like the Pinco Income fund.
And then of course we have oneother one. We have closed end,
opened ended mutual just a traditional mutualfund. And then we have ets.
Yeah, exchange traded funds go throughthat one. So ETFs we do invest

(45:39):
a decent amount in exchange traded funds. They are more meant for I would
say sector plays. I see alot of ETFs that are involved in specific
sectors. You also get some broadbased ETFs. But the nice thing with
those are they trade during market hours, so you can trade them from liquidity

(46:00):
liquidity from nine thirty to four o'clockevery day. And then also with the
ETFs are a lot lower cost.So with these funds there's expense ratios.
Exchange traded funds generally are lower becausethey're more passive type of investments and for
some non qualified accounts, I dothink they make a lot of sense because
the tax treatment with ETFs there theydon't kick out capital gains at the end

(46:22):
of the year, so you alsoget some tax benefits with those ETFs,
whereas mutual funds, if you havethem in a non qualified in December,
you're going to see some capital gaindistributions hit the account. You gotta do
some tax planning around that big thing. Fiddela has a lot of ETFs,
Vanguard has a lot of ETFs.Schwab, you go through the whole laundry

(46:43):
lists, but the end avantage isETFs. You know, you can buy
an ETF. The cost basis iswhat you know, like, let's use
Vanguard point zero five. Yeah,very very low, extremely low. So
when they compete as far as theexpense ratio with a mutual fund or other
alternative types of investments, you're goingto have notable savings as far as the
cost of doing an ETF. ETFsa lot of them, like the S

(47:07):
and P five hundred, Russell twothousand, you know, depending on the
index that they're trying to track,the Dow. It's you know, it's
pretty a nimble way in order toget a huge basket of stocks, broad
diversification for extremely extremely cheap cost basis, and it gives you what we call

(47:28):
huge diversification, huge diversification. Ittrades. You have the key point trades
like a stock YEP trades are inthe days we're able to get in and
out. We utilize some ETFs forsome covered call strategies as well. So
there's covered call strategies that you canfind through ETFs that are providing extremely attractive

(47:51):
yields right now, but you needto be careful. Again, if it's
not suitable for you, we don'trecommend it, So it depends on who
you are as an investor. Butwell, there's a lot of them too
you can use like let's use XLFsectors. There's a lot of sectors that
are ETFs that are you know,specific to either either an industry or a

(48:13):
sector of the market. And thebottom linkets down to is that, you
know, sometimes you got to becareful with that because you don't want to
have overkill. You don't want totry to put too much of your money
in any one particular asset class withoutgetting me be possibly kicked in the teeth.
And the other thing. Most peoplecompare trading ETFs with trading other funds,
but if you compare ETFs to investingin a specific stock, you know

(48:36):
you're probably you know, you know, I don't. I don't see people
trade ETFs like the trade stocks.No, I mean you're comparing apples to
oranges. There ETFs and basket ofstocks or diversification yep. So you're diversifying
across an actual industry or sector,whereas one specific stock, I mean if
something happens in that company, thatcould depreciate the whole stock, Whereas you

(48:57):
have diversification across the whole sector ifyou do an et We're running up on
a break, folks. Ding Ding, Ding already ding if you want to
call our office. Is everybody happytoday? I'm in a good mood.
Are you in a good mood?I am? And you're gonna be out
partying in Lemoine. Absolutely. I'mgoing to Lemoine College and see my daughter
for parents weekend, and I planon having a lot of fun with the

(49:20):
individuals that I will meet out there. They are the Dolphins, Yeah,
the Lemoine Dolphins mascot A whole lotof time Upstate New York or the Dolphins.
I said to bug Buddy, andI said, how to hell did
they get to be the Dolphins?Fingers as a good friend of my able
e builders Ye, his daughter wentthere and I said, Chris, how
to hell did we become the dolphins? Doesn't make a lot of sense,

(49:43):
but but his daughter loved it.If if you want to sit down with
us, have a check if it'sthe call numbers five one, eight,
five eight zero one nine one nine. Again, we don't charge anything for
initial confrontation. I said it again, well conversation, not a confrontation for
the conversation initial because I'm a rapperand you don't know it, for initial
consultations. But we're gonna take abreak. We'll be back right after this,

(50:07):
and we are back. This isretirement Planning show. Hopefully you're having
a great weekend. Get ready togo, have some fun, do something
enjoyable. T GIF was yesterday andof course today is the weekend, and
the weekend. Of course there's notenough time. It always goes by too
quick. But hopefully you're enjoying theshow. We got a lot of listeners

(50:29):
throughout the country now that listen tothis show through iHeartRadio. If you want
to talk to us, we havea toll free number two five eight zero
one nine one nine one eight eighteight five eight zero one nine one nine,
and this morning we're talking about thedynamics of what has happened with the
FED and how you can play itout and what you might want to be

(50:51):
doing with your own personal portfolios.Nicholas Thomas is here a certified financial planner
with the Retirement Planning Group, andwe're here every weekend hopefully educate you and
inform you on the different obstacles andalso decisions that you have to make during
your pre impulse retirement years. SoI want to talk about ladder bond portfolios.

(51:12):
What do you want to talk aboutthem? Well, when you think
a ladder bond, it's a misstatementbecause it doesn't have to be a bond.
You can build a ladder bond portfoliowith all guaranteed investments with different types
of securities. You can use CDs, which we just talked about today.
Yeah, you can use an MYGAmulti year guaranteed annuity. Yeah, you

(51:37):
can use a bond individual bond ifyou want to do that. And you
can also add in some kind oftreasury, a treasury, or you can
actually hedge a little bit and domaturities with you know which we just talked
about us that have specific maturity dates, which we are not big fans of,

(52:00):
but you can add them into theportfolio. Yeah, with different durations.
I would say, so, havesome T bills for short durations,
zero coupon. You're not going toget any interest payments off of them.
You're just gonna get your interest atmaturity. And then you could ladder in
some three year corporate bonds that paya five percent coupon semi annually, so

(52:21):
you have some income coming in there. And then maybe a multi year guaranteed
annuity contract for a five year andthose areas those are getting five percent.
You can take the interest off thatevery year if you want it to,
or you can let it compound ontop of itself to further taxes. There's
a lot of options. So ifyou're building out a laddered bond portfolio today,
the key to successful investing is whatthe D word diversification. How much

(52:50):
cash do you think you would needif you're deciding whether to do a laddered
bond portfolio or go to they're anETF just a guaranteed rate or some specific
you know, open end mutual fund. How much cash do you need to
build your own ladder bond what wouldyou feel comfortable with for me? How

(53:14):
much would it take for clients foreither for you personally or clients for someone
that it would make sense to dothis. Yeah, one hundred thousand dollars.
Yeah, it's got to be atleast one hundred Yeah. I would
say below that you can't do itas you can't do it. Somebody's got
fifty thousand because the cost in orderto do it. But a bond ladder,
I think that's a misstatement. Iwould say ladder fixed income portfolio?

(53:37):
How's that? Or guaranteed rate portfoliohas different maturity dates. Typically it's a
one year, a three year,five year, a seven year, a
ten year, depending on the cashflow that you're looking for and the coupon
that you're looking for. But thematurity dates are evenly spaced across several years

(54:00):
so that the proceeds are either reinvestedor you taking his income and you can
capture higher rates of returns and softenthe burden if interest rates drop because you
have longer maturities within the portfolio.How do you like that explanation? I
love that. I'll tell you whatI agree with. The ID right now
is applauding at home. Yeah,I think so well. She likes dude.

(54:27):
She's great. She's a great lady. She's a fantastic woman. Absolutely
fantastic woman. Thank you did forthe beautiful gift. I appreciate it.
I'm gonna go you didn't get one, but I'm gonna tap into years.
The duration. I do want tosay say something about that because I think
duration, you know, the thingis is that, uh think about it.

(54:49):
I mean, if you got intoa ladder bond portfolio, you know,
ten years ago or so, uh, and you had bonds maturity over
the last two to three years,right, you probably weren't happy because it
was such a low interest rate environment, but you weren't capturing just all your
money in that low interest rate environmentbecause you had investments they had done previously,
they were at a higher rate ofreturn. So to me, that

(55:10):
makes all the sense of the world. The negative in a ladder bond portfolio
is that no one has a crystalball what the future is. So I
always feel like, if you feelcomfortable with whatever the yield is, extend
yourself out maybe a little bit furtherbecause you're capturing rather than doing a one
year do a three instead of doinga five to a seven, instead of

(55:30):
doing a ten, you know,like a twelve, because then you're lacking
in the purpose of what typically aladder bond portfolio is safety guarantees, competitive
rate of return, and oh,by the way, guarantee and income the
cash flow that's coming in the dooron a monthly basis. You can get
five percent for seven years right now. Yeah, I mean who I would

(55:52):
take that? Ah nive percent?Is how much more than what modern portfolio
theory told us to take twenty fivepercent? You're supposed to take four percent,
So you take one percent one percent, You got another twenty five percent
more in cash flow based off ofthat five percent. But you and I
both know we can get six seveneight percent right now, and actively managed

(56:13):
portfolios you can probably get a verycomfortable eight percent if you blend in what
we call, you know, yieldenhancers, absorb a little more risk.
Yep, I'm just guaranteed you canget five on these multi years. It
makes a lot of sense. Yeah, you start getting some corporates that are
getting eight nine percent and some ofthese yield enhancers as far as the closed
end funds that are ten to twelvepercent yield with a little bit of risk,

(56:37):
a little fluctuation, you can collectmaybe seven eight percent off the portfolio
right now with limited risk. AllRight, I gotta see if this was
one of your CFP questions, I'llput you on the spot again. What's
the negative of a ladder bond portfoliowith individual bonds? Individual bonds? What's
the what's the negative default risk?That there was one? That's a good

(57:00):
one. Absolutely, that's a goodone. You got an A. You
got to get an A plus toget the next one? Is there there's
more risk? Oh? So ifthey're callable bonds. If they're callable bonds,
they can be redeemed by the issuerand they get called. You got
a coupon that you really want,a portfolio that you want, and the

(57:20):
guy that sold you the bond andsay, oh, this bond can be
redeemed or it can be called inthe next two years, and you're paying
a premium for it. Because whenbonds mature, right, they don't pay
the premium, they pay part value. So if you pay a thousand and
twenty dollars right one O two,they call it, they follow it face
that, So you got kicked inthe teeth and you lost some money on

(57:42):
your purchase. So make sure makesure that if you're buying individual bonds,
you understand if there is a callfeature, and also what you just said,
if there's default risk, you wantto check the credit rating of the
company that you're buying that bond for. But but yeah, no individual bonds
for the most part. If they'renon callable and it's a good credit rating,

(58:02):
you can kind of solve it likea math problem and see what we're
gonna get on this ladder bond strategyover the next two three years. And
the positive is this, which Iknow a lot of people. You know,
it's still Will Rogers. I don'tcare about the return on my money.
I care about the return of mymoney. I want it. I
want to pay back to me.I don't care about the return on my

(58:25):
money. I care about the returnof my money. I like that.
I don't get it. He wantshis principal back. He doesn't want to
lose any money. Okay, okay, okay, So I've never heard you
say that one before. You know, I just pulled out I want it
back and pull it out. Yeah, pull it out of your hat.
What's the cat in the hat.I just pull it out of my hat

(58:45):
to rabbit. That's what I said, the rabbit in the hat. But
the only way to get a morefavorable price, of course, when you
start talking about building out ladder bondportfolios is that you buy bonds at a
discount with the anticipation that they're goingto trade a little bit more of a
value. You're buying a bond thatmight be upgraded, and you might be
buying a bond that is trading ata discount because of an interest rate scenario,

(59:08):
and you think that bond interest ratesare going to go down, which
we might be in that scenario ina very short period of time. So
be aware, be aware of ladderedbond portfolios. But let's wrap this up,
and I'm gonna have Nico say,if you want to sit down and
talk to us about building income streams, give us a call on numbers five
on eight, five eight zero one, nine one nine. Everyone. This

(59:30):
was the Retirement Planning Show. We'regonna be back on the other side of
the hour, and good morning.It's a retirement planning show. My name
is Nicholas Thomas, certified financial plannerwith the retirement planning group. We are
here every Saturday morning from seven tonine am. Thanks for tuning into this

(59:50):
eight o'clock hour. Those are youjust rolling out of bed? Dave and
I have been up moving around nowfor a couple of hours. Too long,
For too long. I get upwith the roosters. It was up
this morning. You got four foursixteen. I know I can. I
can hear you from across the riverus pretty good, my dirty little bird.

(01:00:17):
My sister in laws chickens and uh, they live right next door.
Ever every morning, and as itgets colder, they keep coming closer and
closer to my house. So I'llbe out there and they'll be They'll be
in the driveway and I'm trying tokick at him and get out of the
way. But it's it's fun livingout there in My next door neighbor has

(01:00:39):
chickens. Uh, you know,I live next to the pingel Skis.
They've been farmers for years and Butchie, her husband died at the age of
one hundred, and she still hasher chickens. And she goes out in
the morning and she lets them out, and she goes back to late in
the afternoon and puts them back inand every time we went up there.

(01:01:01):
We have lots of what eggs,eggs, eggs? What came first the
chickender, the egg, the egg, and where did they come from?
It was it was scientific, createdby God's created by God. It was.
People say to me, where'd youcome from? Were you hatched?

(01:01:22):
Some people came out of the mud. Everybody says Joey Shay. I talked
to Joey, say he's down inFlorida. I'll mention that because Joey's a
great client of ours. And hegets on the phone with him if and
he says, I don't know howyou did it? How have you done
it all this time? Been livingwith him? I plotter, all right,

(01:01:43):
we're talking about the markets. We'retalking about the Fed increasing rates.
Possibly in November they paused, theypaused, but we've seen unpreceded at it
market volatility over the last five toten years, and for some people they
just can't stomach it. For somepeople they want the touchdown account. They

(01:02:07):
want instant gratification. The stock market, in the bond market. If you
look at a graph, we alwaysbring people in say look at this graph.
We're happy. We're happy, We'rehappy. We're sat said, we're
happy, happy, happy. I'mhappy. You're a smart smart, smart,
and I know you're a dumb dumbdumb dumb dumb dumb. Markets are

(01:02:29):
volatile, and you know they tradeevery day, sometimes consistently. They trade
in bear market territory, which we'veseen. Uh, there's the euphoria when
the stock market's going up. Andwe're going to talk today about what you
should be doing in order to putyourself in a position that you can sleep

(01:02:52):
at night. You're not having highanxiety, you're not stressing yourself out,
and there's strategies out there that willallow you to have hedge. So what
is hedge? How would you classifyhedging? So hedges like parachutes. I
mean, you're you're free falling throughthe sky and the parachute kind of slows

(01:03:14):
you down a little bit, ye, or it helps you go the opposite
direction in case you're falling too fast. So as hedge, it would be
it's a risk management strategy. Howdo you like that? I like that?
Yeah. The offset losses or limitlosses, what we used to always
call it is suspenders and a beltand a portfolio. Yep, you've heard

(01:03:37):
me say that over and over andover again, suspenders in a belt,
and there's different ways to put hedgeinto your portfolio. A lot of people
when they think hedge, they thinkultra leverage, these hedge hedge falls that
go out there and invest in themarket three time multiples and they're just being
super aggressive. But when we talkabout hedge, it's about diversification. It's

(01:03:59):
about investing in different asset classes.In case one tanks, I mean,
you also have these other asset classesin your portfolio which might perform the opposite
way relative to that specific sector.So so hedge is very important and diversification
in your portfolio as your friend,especially as you're getting closer to retirement.
Yeah, and you typically when youuse hedge, we're going to talk to

(01:04:21):
some basic We're not gonna get intoderivatives. We're not going to be talking
about future contracts. We can,we can if you want to. No,
no, no, we can ifwe want to. But bottom line,
what we're gonna try to do isto keep it simple and let you
understand a little bit. Last yearwas extremely unique and probably the first time

(01:04:49):
in my forty one years I knowit has been because it's the worst that
ever, ever, was where bondsdid not act as a ballast or a
hedge to an equity portfolio. Noteven close, not even close. Bonds
were down fifteen sixteen percent last yeardepending on the induscy somewhere even lower than
that if you were if you werehigh yield, depending on your duration,

(01:05:13):
credit quality type. But bonds weredown just as well as the market was
down. I mean, SMP wasdown twenty, the tech was down thirty
to thirty five, depending on whichfund you were in or which index you
were in. So last year wasunprecedented, and if you didn't have proper
hedge in your portfolio, you mighthave lost out on a lot of dollars

(01:05:38):
in your retirement basket. And thething is is that you know if you
want to get more into derivatives orfuture contracts and put some calls and all
the different strategies that are out therein order to put a protective layer underneath.
Basically, what you're doing is thatyou're buying protection for the downside against

(01:06:00):
losses. Now, will it saveyou one hundred percent, No, Typically,
what it does is that it basicallybuffers, buffers the destruction that you
can have when the bear shows up. Now you've heard me say this,
and I believe it has nothing todo with any of our investment banking relationships.
But I'm in the camp the twothousand and twenty four folks. We

(01:06:25):
could be in for a bumpy ridefor a lot of reasons. The first
is the undercurrent of what's happening withthe economy right now. The Fed,
of course, is trying to dofinancial destruction. They're doing a pretty good
job. They're also you know,you add in oil and gas, the
cost of what it is right now, and we're in an election year,

(01:06:46):
and the uncertainty as far as what'sgoing to happen with Republicans and the Democrats.
I would hold on tight because Ithink you should. You could see
a lot of volatility in the yeartwo and twenty four. Yeah, and
how do you account for that inyour portfolio? You know what you own,
so you want to make sure youtake a look and see how you're
invested and whether or not your portfoliodoes need some parachutes or like Dave likes

(01:07:12):
to say, suspenders in a belt. And we can help you do that.
If you're not too sure what you'reinvested in. We could start taking
a look if if you've got amillion dollars four oh one k or IRA
account and you're invested in mutual fundstocks, bonds, you don't really have
any other downside protection. We couldstart taking a look at some some different

(01:07:33):
types of investment strategies. Yeah,but the bottom line is is that when
you get involved and actively manage portfolios, the key is that you need to
understand is that risk, that fourlittle word that nobody wants to talk about,
is an essential but it's also avery precarious element of investing. So

(01:07:54):
regardless of what kind of investory thatyou are, having some basic knowledge of
the hedging strategies that we're going tobe talking about this morning, we'll help
you at least inform you that thereare different ways in order to put suspenders
and belts on your portfolio. Youcan do it yourself, you can have
your portfolio manager do it for you, where you can actually go out and

(01:08:17):
buy some of these strategies which Nicois going to talk about. The first
one you want to discuss is whatI'd like to talk about variable annuities.
First. I don't want to getinto the buffered products just yet because I
think folks are still waking up andthat might be a little bit different or
a little bit more difficult to wrapyour brain around. But Dave, you're
a big, big fan of variablevariable annuity products. Have you ever seen

(01:08:41):
anybody walk in here that we've solda variable annuity too that said it it's
the worst thing they ever did.No, No, I've not. I've
never had one person say to methat they wish they never did it.
I love seeing them on the backend when after they've held them for ten
fifteen years and now they're finally startingto turn on the income. Yeah,
based looking at what they put intoit versus what they're now receiving as an

(01:09:02):
income stream is pretty astonomical. It'sincredible with the growth rates that we're associated.
But you listen to the scream andmonkeys are the idiots, and they
know nothing about them, and theytalk negative about them because they want you
to stay with them, and they'regoing to charge you a management fee every
year. You know, they say, big commissions not true, liquidity not
true. You know, the onlyreason why the advisor is doing is to

(01:09:25):
line their pockets. That is onethousand percent not true. With the world
that we live, in today.As far as compliance, you've seen the
paperwork that we have to do inorder for us to facilitate doing How long
does it take the one that youjust did, It's taken It takes us
what three months to get us throughthe pipeline, probably, yeah, three
four months, three four months.In order to go all their approvals.
New York State has additional protection.Now they basically doing what's right and the

(01:09:50):
client's best interest. So don't giveme this nonsense that you know that's just
a sales pitch and somebody doesn't knowwhat the hell they're talking about. I
mean, we're not just selling itto you. You also have to go
through suitability concerns, so our brokerdealer has to actually check and make sure
that this is an appropriate product foryou. Make sure you have enough liquidity

(01:10:10):
on the sidelines. A couple ofthe folks, they I mean, they
come back to us ten or eleventimes telling us we need more information,
we need more information. So wegive them more information and at the end
of the day we make sure itgets pushed through the pipeline. Here's I'm
a statistic guy. Here, I'ma statistic guy. Show me the numbers.
And you'll get the answers right.Seven out of ten people want safety

(01:10:33):
and guarantees with the retirement assets.Seven out of ten in about ten percent
ten percent of that population of theone hundred percent actually actually build portfolios with
safety and guarantees because they get convincedthat mister Wonderful or missus wonderful can manage

(01:10:56):
money and they know what they're doing, it will never be a bear mark,
and they don't want to get inwhen to get out. And then
what happens is that when a bearmarket shows up at their doorstep and they
start pulling the hair out of theirhead and their portfolios down twenty five or
thirty percent, they're still taking distributionsoff the portfolio. They said, jeez,
I should have listened to Dave,or I should have listened to you

(01:11:17):
know, maybe had some of mymoney and guarantees in order for me to
have quality of life so I canweather the storm without having anxiety attacks.
A lot of folks that don't havepensions, I think variable annuities make it
not out of ten people a lotof sense too. Yeah, I mean,
you're only gonna have Social Security asa guaranteed income stream down the line.

(01:11:41):
So why not take a look atsome of these variable annuity products with
your four oh one K or withyour IRA account. If you have a
good amount of money in there,let's take a portion and lock in a
future income stream. This account's goingto grow by six maybe seven, depending
on where the market is per year, and then eventually you'll get a withdrawal
rate based on your age. Thebottom line gets down to we do a

(01:12:03):
very very very small percentage in thesetypes of products. But we're also in
the camp for people that are adverseto risk, adverse to risk that wants
safety and guarantees. We shouldn't havea bias. So we're going to talk
to you about this in greater detailwhen we come back from break. If

(01:12:26):
you want to call our office numbersfive and eight five eight zero one nine
one nine. You're gonna pick upthe telephone first. But again that's five
and eight five eight zero one nineone nine. We're gonna take a telephone.
It's that little thing in her pocket, so get it out and give
us a goll We'll be right back. Now we're back. I'm Dave Kopec,
President of retire of Planning Group.I'm here with Nicholas Doomas, who
is a certified financial planner, partof the team. We're a team.

(01:12:51):
Want to over emphasize that we've gota great staff and we work through Fidelity
as our custody of all our assets. We're open architecture. We don't have
an act to grind, so wedo what's in your best interests. Now
we're talking building hedges in your portfoliofor your retirement income distribution. And I'm

(01:13:14):
going to take this right off offidelities website, Okay, because it resonates,
I think for people when it doesn'tsound like it's just coming from me.
Three keys for retirement income success.Build income plans with guaranteed income number
one. Two growth potential, threeflexibility in mind. A retirement income plan

(01:13:40):
should include guaranteed income, prayer forlife's inventional curveballs, consider working with a
financial professional, and guarantees of course, should be more than adequate enough to
pay for your essential expenses, basebaseline income, your baseline needs. So
how do you do that? Canyou either do it by latter bond portfolio.

(01:14:01):
You can do it with a variableannuity with the income writers. Most
of you like National Grid. Theyhave an option to take their cash balance
account or guess what they get anannuity that's provided to them. We're big
believers that you take the money yourself. We're not a big believer you because
all of it should be allocated toany one particular type of investment. So
as we're all quite well aware,there are curveballs, there are events in

(01:14:26):
life that things change, people change, relationships change, So you also want
to have the flexibility. But asI said, if you want to come
in and have a informative, educated, unbiased conversation of why this type of
investment might be suitable, might be, might not be, might be suitable

(01:14:47):
for you, give us a callat five eight, five eighths or a
one nine one n I'll be morethan happy to sit down with you and
discuss it or nico in great detailso you understand the benefits of having what
I call below planning, being ableto sleep at night and not staring at
the fan and the sailing fan andwatch it as spin worrying about you know,

(01:15:08):
is the money going to go away? It might before I go away.
Yeah, And I want to Iwant to take a step back,
and we were talking about variable annuitiesbefore the break and the benefits and the
guarantees provided as far as an incomestream for your retirement, and I kind
of want to talk how it actsas a hedge, because I know that's
kind of the topic we were wewere on with these variable annuities, they

(01:15:29):
have a guaranteed growth rate associate withhim, some of them, not all
of them. It's so if ifyou have one with the rider, So
if there's a benefit base rider orsome sort of benefit base that's growing along
with the contract value, Now thecontract value that's going to fluctuate. There's
two values when it comes to thesevariable annuities, the contract value what's what's

(01:15:51):
it invested in, and then thebenefit base, which if you have one
of these riders, then it couldpotentially grow at six percent simple interest or
six percent compounded to Again, dependingon the company you use and the product
you're looking at. If the contractvalue performance better than that, sometimes you'll
get what's called a step up onthat benefit base, so your benefit base

(01:16:13):
could jump up a little higher thanagain depending on the contract, maybe the
growth rates based on the new dollaramount. So you can really get some
compound growth on these products with alittle bit of a safety net with a
with a hedge, and we doa lot of work with these Well,
we look at them a lot,but like they was saying, I mean,
we do very very little business withthem because I think they have a

(01:16:33):
bad rap. So well, it'sthe other thing is too, is that
you know, we live in apart of the state that there's a lot
of retirees with pension benefits. Withthe higher rates, of course, it
makes it a little bit more attractiveto get into guaranteed rates. But I'm
still an advocate because of longevity peopleare living. I've been doing it for
forty one years. I've got clientsI've been working with for over thirty years.

(01:16:57):
You're gonna live a hell of alot longer than you anticipate. If
that is the case, do youreally want to have risk or do you
want to have one hundred percent ofyour money allocated into stocks and bonds with
no guarantees. I don't think youdo. Matter of fact, most people
that I talked to in great detailunderstand if you're fortunate enough to marry a
school teacher or someone that works forthe state or a municipality, and whether

(01:17:18):
it's a male or a female,and they have a pension benefit, you're
one step ahead of the competition.If there's two people with pench of benefits,
you hit a home run. Youshould be dancing in the street and
spin it on your head. Youknow, how how strong is this stool?
I mean a lot of folks justhave the two SOLI securities coming in
and then maybe they have their retirementassets. So that's a three legged stool.

(01:17:39):
If you have two pensions along withthat and then two SOLI securities,
two social securities, and then defersome money. I gotta fight five legs.
Can't take a lot tonight. That'swhat I want, man. I
want that five legged stool. It'sgonna take a lot to knock that down.
So yeah, you want to buildyour stool to legs on your stool
and make sure you have enough incometo dissolve of your basic living needs.

(01:18:00):
And if you have a mortgage goinginto retirement, you want to make sure
that's accounted for. And I thinkyou know, I'm gonna interrupt you because
you're making a great point here howmany legs do you have in the stool?
But here this is the thing thatI you know, we say this
all the time in our marketing andon the radio and when we do presentations.
The hardest thing for people to dois to get away from accumulation and

(01:18:20):
start thinking about preservation and income distribution. They start saying, what I get
this year? What I get thisyear? Well, we're salving for cash
flow. Do you understand that,sir, we're serving. We're not doing
ROI return on your investments. We'redoing ROI reliability of income. Do you
understand that it's so critical that peopleget off the idea what did I net?

(01:18:47):
It should be how much cash iscoming in, how much is it
guaranteed? And is it going tocontinue during good times and bad times.
There's a statistic right now because Ihad I was on the radio with Ja
me promoting this show. Do youknow that over like sixty percent of our

(01:19:08):
population right now has no retirement savingsat all? Really zero and almost forty
percent of the population right now,if there's a if there's a nine one
one and need a thousand dollars forthey don't have it. They don't have
it. And you know, andI know a lot of people that are

(01:19:29):
in that boat because we come fromthat background. You know, we didn't
grow up with a silver spoon.You know, you grew up on a
farm. I grew up on afarm. I grew up you know,
my mom and dad busted their tailsin order to make a good living.
And the thing is is that,you know, it's it's I know,
it's depressing for a lot of people. And there's a lot of fear out
there. My family, Julie's brothers, you know, they're hardworking people.

(01:19:55):
They won with's HVAC works construction.You know, is that they don't have
the ability to be in a positionto worry about is the money going to
go away? They want safety andguarantees exactly right. A lot of folks
out there are looking for it rightnow, and they worked hard, they
saved up. That's who we workwith, hard working savers. That's who

(01:20:17):
comes through our doors and we havethe most success with. And we understand
them. They understand what we're tryingto do for them. But they get
they get wrapped up with mister Sizzleor you know, mister you know I'm
greater than or miss miss I'm wonderful. You know, we do fantastic and
you know, you know, blahblah, you know it's I call it
the blah blah blah advertisement. Thereality is solved for what the people want.

(01:20:41):
What they want a safety and guaranteesexactly. And that's why we go
through risk tolerance questionnaires, we gothrough suitability. We make sure they understand
what they're invested in. We hearit all the time. I mean,
we do a great job educating.We talk about what we're doing. We're
very diligent. We're very diligent.I like that big word. That's a

(01:21:01):
stook word I was going to use. We're very transparent. So we talked
to you about what it is andwe're not trying to hide anything. We'd
come up and I mean I usuallysay it right in the first appointment.
This is how we get paid.This is what we charge on the accounts
that we manage versus if we dosome sort of insurance product. This is

(01:21:21):
how we're compensated. So we're veryh we disclose everything. Well, the
one that you just did is afeed based there's one hundred percent liquidity.
It's hundreds of choices as far asinvestments, low cost, low fee,
probably even much lower fees than youwould get with one of these you know,

(01:21:42):
screaming monkeys that says, they're sogreat managing money. It's pretty much
and it's an annuity. It's prettymuch the same charge as a brokerage accounts
exactly right, just in an annuity, right, and it's all low costs,
low fees Vanguard and go through thehole laundry list of the investment options.
And you know people will say toyou, is that oh jeez,
I did know that that existed?Well, it does exist. So saving

(01:22:02):
and planning for retirement can be givechoosing. We understand that you're starting a
journey. You're starting a journey okaythat you've never been through before, and
that's called the retirement. So you'vegot a plan you need to understand and
then you need to execute the plan. So when we come back, we'll
talk about this in greater detail.How did they get ahold of this?

(01:22:25):
Nico? You get that telephone outof your pocket, or you go to
a pay phone and drop a quarterand eight. We got a client that
has a bunch of quarters if youneed one, We just met with him
the other day. But if youwant to give us a call on the
numbers five one eight, five eight, zero one nine one nine ever,
we're gonna take a break. We'llbe back on the other side of the
half hour, and we're back happySaturday, or to believe, September twenty

(01:22:51):
three, one more week to go, and we're in October, the last
quarter of the year, two thousandand twenty three. Time flies, man,
time flies when you're having fun.Huh. Yeah. They get the
pumpkins out at market, thirty twopompkins. They get Christmas stuff out.
Yeah, you were saying that,Jesus. I walked in there, said,

(01:23:12):
what the hell did I miss?Did they get hit in the head
and they missed? Hallowek just wokeup, just woke up? Was that
trance December first? Yeah, theygot all the you know, they got
all the guests and the trees andthe lights, and oh my god,
October is coming next next month ornext week, at next week, a
week from today. That's when Imet next week. That's what I mean.

(01:23:35):
I met next week. Clearly,it's next Give me, give me,
give me a hit of that JackDaniels, the only guy I know
that drinks Jack Daniels this early inthe morning in my coffee. Yeah.
So all right, we're talking hedgeand portfolios. We're talking about you know,
what's reality, what's fiction? Youknow, don't listen to the screaming

(01:23:59):
monkeys. They really will put youin a position that I think that you'll
end up, you know, pullingyour hair out, having uncertainty of your
future. You know, Uh,it's easy to be a Monday morning quarterback.
I have great respect for the peoplethat work in this industry. I

(01:24:21):
know how heart it is. Mostpeople don't realize this, but ninety five
percent of the people that come intothis industry don't make it. You know
that yea thousand times. It's hardto believe. That's why it's. Uh,
it's a business that once you getyour feet underneath you, you have

(01:24:46):
the ability to have great success.But also it's a business that you if
you do the right thing what Iwhat I always preach ad t RT,
be honest, do your best.You're never going to be right one hundred
percent of the time. There's couldbe good times and bad times. But
if you hold your head up highand just say we've always done our best,

(01:25:09):
then you're basically you're providing to thepublic into your clients what I think
is a recipe for success for them. You got to hold yourself to a
high standard, especially through the CFPcourses that I took and the exam and
all the questions on doing the properdue diligence, making sure that you keep

(01:25:29):
yourself educated and you inform the clienton implementation and what you're doing with their
portfolio and how you're investing it.And there's a lot of work, and
you need to make sure that youact in a fiduciary capacity for everyone that
walks through the door. And notonly are you held to that standard by
the industry, but you're also heldto that standard by the CFP board.

(01:25:51):
Now for those folks that are cfps, and you need to make sure that
you're complying by by their regulations andmake sure that you continue to hold that
CFP mark and good honor. Well, every week we have to do a
compliance report. Every week. Wehave to basically dotarize and cross our tis.
We've been audited it by the SecuriousExchange Commission pass with flying colors.

(01:26:15):
I'm glad to say that. Butthe bottom linkets down to is, as
you're quite well aware, markets canbe vold till markets can you know when
you least expect it. A blackswan event can show up just like we
went through a COVID nine to eleven, you go through the financial crisis.
I've experienced them all, you know, since in nineteen eighty two. If

(01:26:36):
I go back and I look atthe graph and see the destruction, and
that's really what happens, is thatyou get into financial asset destruction, your
net worth drops dramatically, and you'resaying to myself, will we come out
of this? Well, I can'tpredict the future, but I do know
one thing. We've come out ofall of them. And the stock market
always moves higher. But the questionbecomes and this is the thing that resonates

(01:27:00):
with me a lot when I hearpeople talk about it, Nico, our
generation, the boomer generation, isreally their first generation that has had the
type of wealth that has been createdthat we had to create our own pensions.
Yeah, pensions are going away.I mean they've been going away for
years exactly right. And it's startingto figure out how you're going to fund

(01:27:23):
your own retirement yep. And howare you going to do that with guarantees?
Well, the Fed said they're goingto stick to these high interest rates
for an extended period time. Theremight be one more spike, could be
two who the hell knows. Butthe bottom I gets down to is that
for the people that are adverse torisk, that want guarantees, they're being
rewarded right now, especially with theserates. So you want to go over

(01:27:45):
some of these products that we've utilized, the buffer products, which I think
are great investment opportunities, but theseare more for accumulation than you can ultimately
turn them into income. Right,Yeah, I mean they're also a hedge
so I want to stay in thehedge kind of topics. Will stay in
the hedge train, the love train. Yeah, soul train chugging. But

(01:28:10):
Don Cornelius, baby, remember thatshow. Of course you don't. I
have no idea. Okay, doa little research when we get off YouTube,
do Don Cornelius. Soul train.I was referring to Big and Rich.
I don't know if you've ever listenedto them, but anyway, so
I would listened to him. ButI prefer soul train, okay, uh,
buffered products, bufford products. Soearlier in the show I mentioned I

(01:28:33):
did want to talk about these.There's some some options that are out there
that allow you to have downside protection. So these would be annuity contracts.
But they're buffered annuities, and Ijust want to try to explain this as
high level as possible, so getinto the weeds. Yes, keep it

(01:28:54):
super simple. So you put onehundred thousand dollars into one of these products.
You could do it for one year, three year, six year,
so there's different durations that you canlock the money up for and you're able
to decide whether you want a tenpercent downside buffer fifteen percent downside buffer.
So if your portfolio drop to eightyfive thousand in this case, you got

(01:29:15):
the fifteen percent downside buffer, thenyou get your return of premium back,
so that one hundred thousand dollars.But on the upside for a three year
product, let's just use it cantrack the SMP five hundred index, but
there's a cap, so there's capsout at eighty percent over those three years,
so you have to average twenty fivepercent on the SMP to hit that

(01:29:40):
cap, which is extremely high.So probably not going to hit that cap
unless crazy gains are involved. Butyou still have that fifteen percent downside protection.
So for a lot of folks,this is a great hedge in case
the market does fall. You've gotthe first fifteen percent protected if it goes
below that. So if you're downthirty percent, then yes, you're absorbing

(01:30:01):
that ten percent or fifteen percent ofadditional losses below that buffer. So you
do need to be careful. Thisis also something that you have to lock
it in. There's gonna be surrendercharges if you pull it out before that
three year or six year or oneyear period is up. So you want
to make sure that you also havethat other piece of the portfolio. As

(01:30:24):
far as flexibility, as far asliquidity, you have that in your portfolios.
You can access those dollars over thethree years or six years you have
these dollars tied up. So again, I think it acts as a good
hedge for a lot of folks outthere that are uncertain or they think this
time is different. Well, Ithink it's great for what you know,
what we talk about the red zone. People are walking the door. They

(01:30:44):
got two to three years to gobefore they're going to retire. They want
a competitive ray to return, butthey don't want to have thirty forty fifty
percent downtraft and their equity side oftheir portfolio. And that's the risk to
a lot of people is that youknow, they're trying to shoot for the
moon, saying yes, I wanta little more juice in my portfolio,
or I want to get some moremoney in there. Well that's great,

(01:31:06):
but just realize sometimes is that whatyou wish for as might not what you
want exactly. In aligning one ofthese buffered products up with your retirement date,
I think that makes a lot ofsense. Yeah, when you're three
years out, you're sixty years old, you could do an in service distribution
or in service transfer qualified or nonqualified assets exactly. So you take this

(01:31:26):
money, you move it from yourfour or one K to an I ray
with this buffered product, and youalign it with a three year retirement.
So you're going to retire at sixtythree and you get this downside for protection
along with upside potential over the nextthree years. So I think that makes
a lot of sense. Dave,Yeah, you know. The thing is
is that we have to realize isthat I said this earlier. Today,

(01:31:48):
the human lifespan is growing, andthat means retirement is going to last a
hell of a lot longer than whatyou anticipate is going to be. And
as a result, you're gonna whattwo things you're gonna spend more money because
you're living a longer life. Butthe other thing is is that you can
make sure that when you're spending itand you're managing it, you're prudent.

(01:32:09):
And I think that, you know, you got to ask yourself sometimes.
Genetically, you know, in myor my jeans good for longevity. And
now my my mother lived to beninety. My dad died of forty four.
My father died of a heart attack. But on my grandparents' side,
my parents on both sides, itlooked well late late into their eighties and

(01:32:30):
nineties. So genetically, I guessthe DNA says that as long as I
take care of myself and you know, do what I'm supposed to do and
lose forty pounds, keep keep eatingyour grass. Yeah, it really,
it really stinks to be on adiet, It really does. You know.
It's it's I'm That's why I'm sodepressed. This morning, I got
another salad. You know, didyou step on the scale? No?

(01:32:54):
I won't do it once a weekMonday. Did you do it this week?
No? Monday? Okay, becauseI didn't start and start until Monday.
We started Monday to Monday two weeksago we started. No, I'm
not stepping on the show. Iwant to be optimistically, you know,
I want to make sure I'm losingsome weight here. So, you know,
planning for retirement, as you cantell by these shows and by sitting

(01:33:16):
down with us, it's multifaceted.It's, uh, not only what can
you afford? But how many toolsdo you have in the toolbox. That's
why we bring up stuff like this, the buffers. We bring up stuffs
like variable annuities, with the guaranteedincome writers. We bring up stuff like
equity index annuities. These are allproducts that will give you competitive rates of

(01:33:39):
returns, but they also allow youright to turn them on as income in
order to have income for life.And when people come in and say,
well how much money do I need, well, it depends you know,
how how much do you want todo as far as entertaining and traveling?
And you know the critical component formost of you is going to be still

(01:34:01):
security selection. Yeah, so securityselection is huge. But these buffered products,
you can allow them to continue togrow. So after the three years
are up, you can go intoanother three year and like Dave was saying,
you can there's lifetime income off thesecontracts as well, so eventually you
can turn on the lifetime income option. Some of them are five and a
half percent guaranteed for life. Someget up to six seven percent based on

(01:34:25):
your age band. So if you'resixty five to seventy four, it's a
certain percentage. If you're seventy fiveor above, it's a certain percentage.
So again, depending on when youneed the money, when you need to
turn this on, you're going toget a withdrawal percentage that's there for the
rest of your life and potentially alsoyour spouse is if you choose the joint
life payout option. Yeah. Sothe thing is is that there's always three
questions. You know. The firstone is probably the most common that we

(01:34:48):
hear consistently. Can I retire?Can I retire? And my answer to
that is that if there's no plan, you know, and you're not sitting
down run of the numbers on itannual basis, you know, you're just
rolling the dice. You know.I've set down with people before where they've
never worked with a financial advisor untilthey have, you know, I don't

(01:35:11):
know a year six months to gobefore they're actually going to walk out the
door. So as they say overand over again, give us a call.
How do they reach us, Nico. You give us a call at
five one eight five eight zero onenine one nine again that's five on eight
five eight zero nineteen nineteen if youwant to give us a call. Also,
our website is www dot rpg retiredot com and it's rpg retire dot

(01:35:38):
com on the web. You canask us a question through there. We'll
make sure to get back to you. But everyone, we gotta take our
final break here. We'll be backright after this and we are back.
It's a retirement planning show. Everythanks for tuning in this morning, on
this uh on this Saturday in September. If you want to call our office,

(01:35:58):
sit down, start talking about yourown retirement plan or what you got
going on with your four o onek's deferred comps, pension elections, so
security options, legacy you which leaveyour loved ones, teachers, teachers,
state workers that need to do pensionselection, people that need to talk about

(01:36:19):
long term care. Long term care, let's just briefly talk about that,
because that's really protection. That isa hedge on basically the greatest risk that
retirees face and let me tell you, folks, this is a very complicated
topic right now because there's not alot of options in New York State anymore.

(01:36:39):
There's no New York State partnership.For most of us. It's the
greatest risk in our retirement years.It's fifteen to twenty thousand dollars a month
for a bed and a long termcare facility today, and that's just for
basic coverage. That does include theother services that might be a PT,

(01:37:00):
drugs, et cetera. So howdo you hedge against that? What's your
answer? How do you hedge againstthem? Seeing that you're a young professional.
So if insurance you'll you'll you'll betalking about this for decades. I
will, and hopefully decades the ratescome down a little bit, so that
long term care insurance it's very expensiveright now. So for a lot of

(01:37:24):
folks, it probably doesn't make senseto pay those premiums for the benefit they're
offering. We just terminated one.It's the first one that we've done.
The first one we terminated, wefroze it completely. It's about one hundred
thousand dollars in benefit that's still there. But uh, the premium went through
the roof. She was unable unableto make that those premium payments, and

(01:37:49):
we just said, listen, youknow, you did the trust like we
told you to do. You hadthe double band aid where we did in
irrevocable trust with summer Moneys in thehouse. So now we're going to roll
the dice and we have some protection. And if you get into a case
where you need home care, assistantliving or a long term care facility,

(01:38:10):
you're going to have coverage. Butbecause you did the trust, once you
exhaust the benefits of the policy,you'll probably qualify very quickly for Medicaid.
Yeah, and I think it madea lot of sense. Her look back
period is over, so the houseis fully protected within the trust, so
if something did happen to her,the state or Medicaid would not be able

(01:38:32):
to look back and put a leanup against her property. So that's why
we made the election to do thenon forfeiture option, but it froze it.
So she got a benefit benefit ofabout one hundred thousand dollars she can
use which will cover maybe what sixmonths five sixty six six months optimistic six

(01:38:54):
months. She gets the right attorneythat understands the landscape for Medicaid. She'll
qualify very quickly. But it's justit's it's very depressing. It's very depressing
that we live in a society todaythat we have to start depleting assets or
gifting assets or hiding assets in orderfor us to have quality of life at

(01:39:17):
the end of life. And ifyou're not talking about this, I've got
tons of clients that are either homecare, assistant living or in long term
care facilities. Now one of mygreatest clients, a woman that I love,
is right now over it and sonof you doing rehabilitation at work.
You know I'm talking about, right, yes, yeah. And the bottom

(01:39:38):
Minke gets down to is that,you know, she lost her husband now
she had a stroke, and it'sjust it's very sad. And the bottom
line gets down to is that,you know, you want to be able
to have resources and family and lovedones close by. And I don't know
if anybody that says I want togo to a long term care facility.

(01:39:59):
Everybody wants to do stay home.Everyone wants to stay home. I mean,
even with this situation, she wassaying that she can never see herself
going to a place like that it'sthe last thing she wants, but too
bad, you know, she can'tget up and move around. At the
end of the day. She mightneed it, so we can't rule that
out. And I mean, thissituation, I think can make complete sense.

(01:40:19):
A lot of folks, they mightnot have a trust and they're getting
closer to the h they're maybe lateeighties even early nineties for some folks.
They have these policies where the premiumsare getting increased quite dramatically, but now
they're at the stage where they needit, so it's very hard to justify
them canceling these policies. So theyhave to pay the premiums. And these

(01:40:40):
insurance companies did an injustice by tellingthem one thing, and now they're coming
back and saying, hey, we'regoing to increase your premium one hundred and
fifty percent over the next two years. What is that? It's just it's
it's uh. You know, BobbyAndy was on from Advisors Insurance Brokers,
and he talked in great I havegreat respect for Bob and Brian Johnson.
They're just wonderful, educated, extremelyprofessional people that work in that industry,

(01:41:06):
and uh, you know, they'rebasically saying is that the landscape, yes,
has changed, there are solutions,but it's like anything else. People
procrastinate. They wait until they're tooold to get an affordable I mean people
say, when should you get along term care policy? As soon as
you can? Well, really,when you think about it, because you

(01:41:29):
can, you can do. Nobodywho hell's thinking about that when they're thirty
five and forty years old, becauseeverybody's got the Superman superwoman mentality. It's
never gonna happen to me, orI'm gonna shoot her, she's gonna shoot
me, or we're gonna jump offthe bridge together. Well, if you
can't find the keys to the carand you don't know where the hell you
are, you're not going to beable to find the bridge to jump off.
And that's, you know, that'sthe thing that you need to start

(01:41:50):
thinking about. As much as youdon't want to caregivers, people that have
been caregivers are the ones that thisresonates because Julie was a caregiver for six
and a half years. My wife, Yeah, so we know the destruction
it does to families and relationships andwhat it also does as far as the

(01:42:12):
stress and the anxiety that it putson the caregiver? Is that your plan?
For most of the people that arelistening today, that's their plan.
Yeah, because they don't care.They say, well, yeah, we'll
deal with it when it happens.I'll tell you right now, you're dealing
with dynamite. Probably five percent ofthe people that walk in have some for
some form of long term care protection, but probably less than that is less.

(01:42:38):
And the thing is is that whatpeople don't realize is that, you
know what, by not having discussionsabout this and not involving your family and
your children and having them all sitat the table and say these are things
that we would like to have happen, they don't have those conversations. So
what happens, It blows up thefamily. How many how many people do
we know that are either fighting overmoney or they don't talk to one another

(01:43:00):
because of one person being the caregiveror one person getting you know, we're
gonna put that account in Bobby's namebecause I know that Bobby's going to take
care of Susie and Billy. Nota good idea. Not a good idea.
We see it a lot, andwe see a lot of issues arise
in families based off of their parents'health or what's going on in their lives,

(01:43:21):
and who's what's the proper decision forwhat's going to happen here, clean
up the estate, get your housein order. We've been having that conversation
with a lot of folks over thelast year. How much time do we
have left here? We got abouttwo minutes, okay, because I want
to summarize a little bit, ifwe cut. The big thing that we

(01:43:42):
talked about today is that there aresolutions for people that don't want risk,
especially right now with with the Fedstatement coming out on Wednesday that they basically
said higher interest rates for an extendedperiod of time and there might be one
more increase. That is good forpeople that want guarantees right There's also ways

(01:44:04):
for you to build out portfolios thatyou have hedge, you have protection,
right. Sometimes you got to paya little bit more for that, folks,
Okay, And because of that,it basically allows you to sleep at
night and allows you to have qualityof life. And for some of you,
it's not primary number one to allowyour irrach to keep on growing and

(01:44:25):
growing and growing and growing, andthen when it's age seventy three. Now
you have to spend, spend,spend, spend, spend, and when
you least want the distributions, theybecome the greatest. It doesn't make any
sense at all. Spend down.It's a government's plan. What's your plan.
Well, that's what the government wantsyou to do, So keep on
doing it, keep on doing it. But if you want to face reality
and you want to look at theobstacles, and you want to have a

(01:44:46):
plan, and you want to feelcomfortable when you walk into your retirement years,
then you need to give us acall and you can check us out
on the web at rpgretire dot com. I will never change my picture on
that website people, or in theconference or in the conference room, or
on the door coming in. We'vegot to get the new logo. We

(01:45:09):
are. We got to do that. It's coming, isn't it. Isn't
she doing that? Gets she tookmeasurements, so she's gonna look at it.
Okay, all right, all right, So why don't you do this?
Why don't you tell people how toget ahold of us? It would
be an honor and a privilege tosit down with you. Uh, you
know, we're pretty straightforward sometimes peoplethink I'm too straightforward, but after forty

(01:45:30):
one years, I've seen the destructionthe families investment portfolios. If you procrastinate,
don't procrastinate, motivate. Just pickup the telephone and Nice will tell
you how to get a hold ofus. Give us a call at five
one eight five eight zero one nineone nine. Again that's five one eight,
five eight zero one nine one nine. Everyone. Thanks for listening today.
This is a retirement planning show,and have a great week.