Your Retirement - Let's Debate!

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Episode Transcript

(00:00):
The advice given on the following programdoes not necessarily represent the views of iHeartMedia
It's management and staff. Since individualsituations canon will be different, Please consider
this when exercising any options given byour guests. It's time to get your
retirement plan in order. Welcome tothe Empowered Retirement Show with Nick Tooman and

(00:22):
Caleb Simbolac. Reach out to theEmpowered Financial Team now at six O eight
two one two seventy three hundred,or if visit their website empowered fm dot
com. Now here's your host,Nick Tooman and Caleb Simbolact. Well,
happy Saturday morning, everybody out there. This is Nick Tooman Caleb Simbolac,

(00:43):
the Empowered Retirement radio Show here ona Saturday, hoping to make your retirement
better folks. As the show goeson, you can contact us at six
eight two one two seventy three hundred, or you can always visit our website
at retire Madison dot com. Aton of good resource is if you visit
our website. Caleb, how areyou doing on this steamy Saturday morning.

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It's been steamy sea. I'm doinggood. I'm glad that it's cooled off.
A little bit. You know,we had our taste of Arizona weather.
IGU. Yeah, I'm happy thatit's it's cooled off a bit,
but great weather, nonetheless, greatweather. Nonetheless. We're coming up on
Labor Day next weekend. As wesaid last week, the year is going
really fast and some are always seemsto go fast, but still a good

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time. Every Saturday is a goodtime and a good day to help people
think through their money, finances,and specifically, what we do is we
talk about how to properly prepare andhave a thriving retirement. We're going to
continue talking about that today and thetheme today I always like to have a
theme. Yes, is going tobe around or senator around what took place

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this week and that was the firstpresidential debate. Yeah, I don't you
know, I'm not sure if I'mready for this next season of politics in
debating, but nonetheless, it's goingto be a reality for us. But
when it comes to finances, rightas we'll be talking today, there's always
debates about you know, what youshould do. You know, the cooler
conversations, whether it's with your inlaws, friends, people who just come

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up to you on the street andjust tell you how to elect your social
security whatever it might be. Butthere's always debates around finance. There's debates,
those water cooler conversations making your case, and that's what we heard these
candidates up on stage again, nomatter what political party you like, to
hear from people that potentially could leadus as a country. What are their
positions, what is their experience,and then make a case. And so

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we're going to talk today about thosethings as we think through retirement and retirement
preparation. Make a case for doingthings, maybe a certain way versus other
ways. And there's pros and consto all these things, and strategies might
talk some products, some strategies,just things that hopefully get people thinking about

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get those juices flowing. I alwayslike to say, get those juices flowing.
If you're within maybe three years ofretirement, maybe you're within five or
six years of retirement. I'm somepeople this week they're ten years out and
they said, you know what,Nick, we don't feel like it's too
early to start thinking about this.So I encourage you to just think through
this. If you're a business owner, we've talked to some folks that in
the next couple of years, they'regoing to divest themselves of their business,

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and they want to know what shouldwe be considering. And we're going to
talk about some of those topics anddebate some of those topics. Yeah,
absolutely so, folks, if you'rehere with us right now, we're going
to be debating things such as theadvisor pyramid. You know what advisor would
be best for you? Are youdo it yourself? Do you want somebody
who's just going to manage your investments? Do you want somebody holistic? You
get the three worlds of money,Wall Street, banking, insurance. That's

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typically where things get really heated,especially in the professional industry. They want
to keep they want your money right, they don't try to diversify your money,
and all these other places. Andthen the best cooler conversation, of
course, which is social security.When do you take social security? That's
a big debate. That's right,social security, Caleb, quite frankly,
something we could talk about every show. People like to debate that when we
do our retirement courses. By theway, we have some retirement courses coming

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up here and the fall, soyou can go to our website and check
those out. Check the dates outfor those, but that is probably the
number one or number two questions.So if you've listened to us before over
the past few months, we talkabout that topic, social security, how
to think through this, maybe whento consider taking benefits to laying benefits,
very personalized topic, so we're goingto talk about that again, and then

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towards the end, maybe some ofthe tools that are out there available to
you folks to use in retirement,some of the pros cons what to watch
for. So a lot of goodstuff on a steamy end of August Saturday
morning. Yeah, so stay withus. We're going to talk about all
these topics, and as always,there's no silver bullet answer. We're not
going to be keeping silver bullet answers. We're gonna be giving you some advice

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how to consider these things and maybehow how you can plan for your retire
That's right, So grab a cupof coffee. Hopefully you can sit out
on your deck today the weather's nottoo hot. Enjoy this great Saturday morning
as we roll through summer. Thisis Nick Toman Caleb simbolac here on the
Empowered Retirement Radio Show, as alwaystrying to make or retirement better. Welcome

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back, everybody. It's the EmpoweredRetirement Radio Show. This is Caleb Simbolak
here with Nick Toom and CFP asalways to make your retirement better. If
you would like to get in contactwith us, you can do so in
two ways. Firstly, our phonenumber is six oz eight two one two
seventy three hundred. That is sixeight two one two seventy three hundred.
Or you can go online to ourwebsite at retire Madison dot com. Folks.

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On our website, you will alsobe able to see the days for
upcoming retirement courses. We're offering retirementcourses in September and October, and it's
a really great opportunity. We getin the sandbox with you over the course
of a couple hours. It takesplace in two parts, so you'll meet
on a Tuesday or Thursday, andyou'd attend two weeks in a row,
and we really just go through thebasis basics of retirement. We go for
what our five pillars are, wherewe really feel like you need to plan

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for maybe how to plan for them, some strategies. You know, we
mentioned in the first segment. We'renot going to offer like silver bullets,
right we're not going to be ablejust to assess your situation and be like
this is the answer, but rightwe are able to provide a lot of
tools to help you, and it'sa good opportunity for some discussion and interaction
because as you just said, Cable, there's no one way to do this.
But what we try to do duringthose two nights together, they're about

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an hour and a half two hourseach night, so, like you said,
on a Tuesday or Thursday, andthen we come back the following week
for the part two. But whatwe try to do is give the opportunity
to the folks to ask questions andbegin to think about those things that maybe
they haven't yet considered or in theirown life feel like things have been on

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automatic for soul, right, becauseat some point when you do get to
be fifty five, sixty sixty fiveyears old and retirements, reality life is
not on automatic anymore. It doestake action, proactivity. So we teach
people some of those things to thinkabout. So it's a good hour and
a half two hours spent together eachnight. So look those up on our
website that's retire madisone dot com.So Caleb, let's get into the show

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today, and we're talking about thingsin retirement, those issues that we can
debate that we have debates about allthe time, whether it's around the water
cooler or with our families during theholidays, or whenever it is coworkers,
those things about our finances and ourmoney, and in particular, we focus
on those areas as you approach retirementthat we debate. And the first thing

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that I want to introduce is,as you think about that next phase of
your life, going from your workingyears to your retirement years, who is
it that you want to partner with? I like how you frame that Usually,
Caleb is who do you want towalk alongside you during those years?
What is it that you need?And we call it the advisor pyramid.
We're going to go through each levelof advisory service in a way that again

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we clarify what each of those advisorscan bring to the table. And like
in the debate, they ask thecandidates, tell us what you bring to
the table? Yeah, what isyour platform? What do you bring as
a leader. Well, we're goingto talk about the advisory platforms and services
in a way that hopefully clarifies forthe folks listening. What's available to them.

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Yeah. Absolutely, So if you'reone of those people who don't want
somebody to come alongside of you inretirement, we'll talk about the first level
of the advisor pyramid, and that'sreally for the do it yourself. This
is going to be for a custodianlike you know, you have your money
and like a Vanguard or a Tediummerit trading, you just manage all of
your assets yourself. It's really cheapfees. Maybe you like to watch the
stock market every day and you reallywhat it does is provides you a platform

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to be able to submit whatever tradesyou want, a place for you to
hold your money and you're not goingto get charged a lot, but there's
not really going to be anybody comingalongside of you or not. So to
add to that, you said forthe people that like to do things themselves,
so so you're out there, andthat is some of the folks who
listen. They like to be veryactive, very hands on. This is
a passion of theirs. They've doneit for years. They want to manage

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their investments in a way that's costeffective, gives them the opportunity to invest
in different areas. So as yousaid, you got the schwabs, the
vanguards, things like that, wherethe fees are pretty minimal, allows you
to trade, and then you dohave questions. Sometimes those platforms will have
people on call you can dialonatee hundrednumber basic questions. Maybe it's about a

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raw thy ray or how to tradeor whatever the case is, very basic
advice and that is probably at thatbottom tier of the platform. So if
you're at that point in life andyou're listening and you're saying, you know,
that's still me. I still enjoydoing this. I want to do
this. I really don't feel likeI'm at the point where I need somebody
to walk alongside me. Maybe you'vedone a lot of planning already and you

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just need to have that platform andminimize your cost. That would be I
guess the base level of service outin the marketplace. Yeah. Absolutely,
And like we said, there's notany wrong answer here. We're just gonna
be providing some evidence, kind ofexplaining who is out there, how you
could utilize them, and why.So that first tier, like we said,
it's really going to be just youkind of managing your money on your
own. Like you said, youcan call the eight hundred number. If

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you have some questions, they'll providesome services, but it is a cost
effective and more of just you're inthe sandbox on's managing your money. Yeah,
yeah, So that's that's the firstlevel of advisory service. The next
level up would be investment advisors orindividuals advisors that maybe offer specific products insurance
tools. So for instance, there'sadvisors in the marketplace that really focus on

(10:28):
investment or money management for a fee, So they'll charge you a fee could
be one and a quarter one anda half percent per year based on the
assets that they manage, and theirjob primarily is to manage those investments in
a way that it maximize the returnsthat you're trying to achieve. Again,
nothing wrong with that, but it'sprimarily about investment management. Or in the

(10:52):
case of let's say in insurance person, they're charged with representing their insurance company
and selling their basket of tools productslife insurance and newit these things like that
doesn't mean that it's wrong, Itjust means they're going to offer these products,
present what those are, and that'sthe relationship you're going to have with
them. You might purchase the productor you might have an advisor that's really

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just centered and focused around investment management. Right. Absolutely. It's the way
that I kind of think about thissecond this second tier is that whoever you
work with, they're really going tobe dialed into a specific niche. Right.
So you talked about insurance for instance, Right, They're gonna be very
specific to the insurance world. Theyknow everything about it, they're gonna be
working within it. But you know, if they're in the insurance world,

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they're not necessarily going to be doinga whole lot with the investment aspects.
Right. So if you work withlike a Schwab investor or maybe like a
JP Morgan investor, they're going tobe focused primarily on investments, right,
So, like you said, they'regonna be maximizing returns. They might be
trying to reduce your tax liability,they're gonna be looking really how to grow
your portfolio, and it's solely goingto be you know, focused on that.
That's exactly right. So where peoplemay lean into those type of advice

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would be what I would call inthe accumulation phase of their life. And
if you've listened to the show foryears, you hear us say almost every
week there's the accumulation phase of yourlife, and there's the preservation and distribution
phase sprinkled in with some growth that'sie retirement or approaching retirement. So if
you're in your twenties, your thirties, forties, maybe even early fifties,
and you're still focused on that accumulationpart of life, if retirements still maybe

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ten years out, that investment advisorthat's managing that portfolio for a fee,
or maybe there are good products inthe market that have some value to you,
then that's okay. That probably couldbe a good fit, because that
is what it's all about. Asaccumulating wealth, you're not yet ready or
prepared to distribute it. You willbe at some point you'll need to do

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that. But that's where I thinkthat investment advisor, that investment manager of
your portfolio could come into play.Based on my experience, Yeah, and
for some of you listening, youmight find that maybe a blend of these
first two tiers is kind of that'swhere you're aspiring for. We've met with
a lot of individuals right where theyhave an investment advisor, but they us
like to have their own account ontheir side that they're kind of like playing
within the market that they're doing usingtheir own investment tactics, whatever it might

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be. So for these first twotiers, you can kind of have a
little bit of a blend of thetwo. That's a good point, Caleb,
That's a good way to think aboutit, because some people still like
to for a portion of their wealth, get in the sandbox on their own.
They manage things and then bring somebodyelse along. Now, that third
tier, that top tier is advisorsor planners that look at your finances and

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help you plan in totality. Ilike to say totality. Sometimes the words
comprehensive or holistic are use. Ithink sometimes those are overused because we say
holistic and it will kind of rollyour eyes. Well, I hear that
all the time. He's commercial tosay, I'm holistic. Planners looking at
your situation, understanding you in totalityand then coming up with strategies and solutions.

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That is true planning. Ye.Again, if in your twenties,
thirties, and forties, the focusprobably is on accumulation as much as you
can being a really good saver.As you get into your mid fifties sixties,
certainly in your seventies, I believeit's looking at your situation and totality
things outside of just investments, becauseyou're going to have those other areas in

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your life that, as I saida few moments ago, you didn't think
too much about at one point whenyou were earning a paycheck, but now
you're creating a paycheck, and we'regoing to talk about things like social Security
a moment, taxes, tax engineering, estate planning, those things that now
we're at the forefront of your mind. Those advisors address those issues in totality
when thinking about your retirement. Yeah. Absolutely, So you brought up like

(14:35):
the word holistic, right, becauseI think it is very overused and oftentimes
even when it comes to investment advisors, oftentimes they might use the idea of
holistic planning. So holistically, youknow, we're talking about you have an
income plan set up, right,you have an investment plan, you have
a tax plan. You know,you're set up for healthcare. So it's
really this universal planning. And sometimesinvestment advisors and like they're sixty forty fund

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or they're seventy thirty fund, theymight have some like diving in producing stocks,
and they'll be like, oh,that's an income plan, or they
might have some bonds or whatever itmight be. That is like, Okay,
these are going to be principal protectedinvestments. And that's not entirely what
we're talking about. We're really talkingabout somebody who can utilize the many different
facets, whether it's Wall Street,insurance making, they're able to utilize all
of the best tools from these threedifferent areas and help set up your retire

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I love that you brought that upbecause when people understand that these tools,
the tools of Wall Street, thoseinvestments, insurance, and banking generally help
the marketplace don't always play well together, but you can make them play well
together by exploring, understanding, educatingyourself or your advisor, educating you on
the best of all of those worlds, and then figure out at the right
allocation how much you need. It'slike making a pot of chili. If

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you like your chili spicy, youmight put a little more hot sauce in,
or you might put some more peppersin. Somebody a little more bland
might not. That's retirement. Whenyou think about the worlds of money,
the worlds of Wall Street, banking, and insurance, make them play well
together, and that's where you reallyyou can have just a dynamic plan.
So, folks, if you're listeningto the show and you want to learn
more about how we can help clientsnavigate those three worlds of money, what

(16:10):
we do to help view retirement andits totality, prepare that way. Call
us today six eight two one twoseventy three hundred and you can schedule a
one hour complementary visit with one ofour advisors, either at our office out
in your Greenway station, or wecould do this via soome. But it's
just an opportunity for you to learna little bit more about how we help
walk people through retirement, prepare forretirement. Good chance to share with us

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what you've done to this point,which you feel prepared about, what you're
uncertain about. Just an opportunity totalk with each other during that hour together.
And if we decide that we wantto go a little bit deeper,
we can do that during our visit. We can set up a second visit
together, but it is complementary.It's really your one hour time with us
together. We don't ask you toprepare much. Just come in over a
cup of coffee, talk with usand see if what we do is advisors

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in that advisor pyramid, which bythe way, we're in that space where
we do plan and we do lookat things in totality. If that's what
you need at this point in yourlife, if this is what you want,
and if not, what we're goingto help do is direct you where
we think you could go or you'dbe better served. So good time together.
Call us today six to eight twoone two seventy three D and as

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always, folks, it's on aSaturday and our staff is off, So
when you call, leave your name, phone number, maybe an email which
we can then contact you back withon Monday. Caleb, you'll reach back
on a Monday and schedule that withthe folks over the next couple of weeks.
So a lot of good stuff yetto get to. Boy, we're
just getting started here on a Saturdaymorning talking about issues and retirement that we
can debate, and we're going tocontinue doing that on the other side of

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the break. This is Nick TomanCaleb Symbolack the Empowered Retirement Radio Show.
So stay with us, join uson the other side. We're gonna keep
going here on a hot summer Saturdaymorning. We're here as always to make
your retirement outstanding by welcome back everybodyon a Saturday morning to the Empowered Retirement

(18:06):
Radio show. This is your host, Nicktoman and Caleb Symbolach as always trying
to make your retirement better. Youcan reach us at six eight two one
two seventy three hundred if you dowant to set up a one hour consultation
complementary consultation with one of our advisorsat our office out in Middleton or via
zoom to learn more about what wedo as we help people prepare for that

(18:29):
next phase of life. So let'scontinue on, Caleb with that theme of
debate. All thinking about the debatethat happened this week, the first presidential
debate, And there are so manythings in retirement that people like to debate,
advisors like to debate. There's noone right answer, as you said
at the top of the show,there's no silver bullet, there's no one
way to do all of this.And the one topic that I think that

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applies to more than any when itcomes to money is social Security and when
do we even begin to have thosebenefits starred or how do we use those
benefits? I think it's the questionthat we see most often during those retirement
courses. During our planning process thatwe walk through with everybody, it's what
to do with social security? Whento begin, and so we're going to

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talk about some of the things toconsider, some of the questions that come
up. Yeah, I think socialsecurity is one of those topics that people
are probably the most confident in theiropinion in, right, That's why we
see people talk about it so much. But it's way more nuanced than people
think. Right. Oftentimes people arelike, well, you should take social
Security at sixty two because you knowthey're going to be reducing the fund in
like twenty thirty three, there's notgoing to be as much money. You're

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going to have reduction of benefits oryou know you'll break even anyways, right,
as long as you live to acertain age, if you both you
and your spouse take social security.But really it's a lot more nuanced than
that. As you and I know, Okay, maybe you want to delay
a specific social Security Well whose areyou going to delay? Right? How
are you going to prepare for incomein the process. There's a lot of
questions that need to be answered whenyou're talking about this topic of social security
and Oftentimes people just jump right in. They're like, well, you know,

(20:00):
I read this article online and Iknow that you're supposed to take it
at this point. That's right.So I guess how I would summarize this
whole discussion over the next few minutesis be careful. So you could have
relatives, your buddy at work havethe best intentions, but quite often what
happens is people make their decisions orformula at their opinions based on that water
cooler discussion. My friend at work, he took it early and he told

(20:22):
me that it's going to take methis amount of time to break even.
And what you just described is exactlyright. It's one hundred percent right.
So if you're single versus being marriedor you're divorced, that makes a difference.
Nuanced things such as do you havea pension, do you not have
a pension right? Do you havehealth issues? Do you have longevity in

(20:42):
your family? What's your family dynamic? What kind of legacy do you want
to leave were you getting your incomefrom? So that is kind of from
a ten thousand foot way of sayingit, what we want people to think
about. There's no way today inour next few minutes to cover all the
issues. We just want people tounderstand it's, as you said, a
very nuanced issue, probably one ofthe most important decisions or strategies you're going

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to have to deal within retirement.So be careful, understand what your options
are, understand your concerns. Youalso said people are concerned that it may
or may not be there. Right, Well, that's a concern, no
doubt. Right government has said intwenty what is it, twenty thirty now
or twenty twenty nine, the trustfund to pay the benefits is going to
be depleted and seniors are going tohave to expect a twenty percent discount.

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But as we talk about all thetime, social security politically seems to be
a thing we kicked down the roadand it probably will end up being a
situation Rob Peter to pay Paul andlook at things such as maybe upping the
retirement age. So not that wediscount the concerns, but I don't know
that we lean into the concerns asmuch as maybe others do. Right,

(21:51):
So where do we start? Then? I think it's really important for people
to understand where social Security fits intheir retirement and it fits in your income
plan, right, because it's somethingthat it is going to be predictable,
more or less guaranteed, and it'sgonna be coming in a paycheck. Right.
We talked about the accumulation phase,when people's lives are just kind of
an autopilot. You have that incomethat you know is coming in in social
security, and your retirement plays notthe entire role, but it's going to

(22:12):
play a role in your income.And so understanding what you have for income
in retirement, whether you have apension, whether one of your spouses is
still working, right, Knowing that'sgoing to play like a really important part,
right, because you might be ableto delay social Security if you are
able to cover the gap and you'reable to lay again higher benefits. Maybe
you have other forms of income comingand allowing you to delay social Security,

(22:33):
maybe, like I said, oneof your spouses or maybe your single and
you maybe want to convert money fromyour nest egg and you're going to withdraw
that to reduce your tax liability whenyou're older, and then you'll be able
to hold off your Social Security todecrease your tax liability and then you'll have
a higher Social Security amount. Sothat's a good point those are all good
points to consider, and you mentionedin their Caleb. You know, working
when you're younger, a younger retireeor pre retire you probably have more options

(22:56):
than ability to fill the gaps withpart time work. Remember, folks,
if you take Social Security early,which is at age sixty two, is
when you can begin taking that,there are some income limitations in terms of
how much you can earn before yourbenefits get reduced, so just be aware
of that. Again, I don'tlike to lean too much into generalities,
but one of the things I wouldsay about taking it early is if you

(23:19):
really need the money in the income. There are those times whereas advisors,
we say, yes, definitely beginyour benefits now if there is a need
there, even combined with your jobor part time work. No doubt,
it's a guarantee and predictable source.So go ahead, begin those benefits.
But if you feel like you've createdenough flexibility and wealth accumulation in your life,

(23:41):
you might be able to develop thatincome plant from other sources. To
just be aware of that. Theother side of it, Caleb, is
people delaying their benefits past their fullretirement age, which for most people right
now is about sixty seven, delayingthose benefits to age seventy. There's pros
and cons to doing that. What'sthe big us benefit for somebody if they

(24:02):
delay their social Security all the wayuntil age seventy, Well, you're gonna
get a much bigger social security amount, right, You're gonna have a lot
more money coming in from that specificsocial security income. And so for individuals,
oftentimes, when we're working with spouses, people don't realize, Okay,
if one of the spouses dies,the spouse that's left, they're going to
get the higher of the tire oftheir securities, right, And so oftentimes

(24:25):
people will try to delay if theycan, Right, if there's anst like
we said, you're you're gonna endup taking it. But a typical strategy
that is often used, if youhave the ability to delay, you delay
the higher of the two social securitiestoo, that age seventy, because you're
going to get a much higher incomeamount even than just full retirement age.
And so in the off chance thatyou know one of the spouses dies,
or maybe you know that the longevityof life for one of the spouses isn't

(24:47):
very long, that the spouse thathas left over is going to have a
much better social Security check to takecare of them. See it's to our
point. As we mentioned before,this is very customer just in that two
minutes that you were describing this verycustom wiser specific situation. The other thing
to understand is each year that youdelay taking your benefits from age sixty two

(25:07):
up until your full retirement age allthe way through age seventy approximately this is
not an exact calculation, but approximatelyevery year you'll see an eight percent increase
to what your benefits are going tobe. And those are locked in over
the lifetime. So if you incomeengineer your money correctly with all your tools,
you may be able to delay oneof those checks like you said to
lage seventy and now that higher benefitslocked in. And let's keep in mind,

(25:32):
folks, we're just living longer.So even if you do have some
health issues, technology and medicine advancesin medicine, many times we're just living
a long life. Even with someof those health issues that it would benefit
us to have delayed. If wejust come up with a strategy to kind
of bridge that gap from where westart winding down our career to when we
turn those benefits on again. There'snot a right or wrong answer, it's

(25:56):
just what are the things that weshould be considering before we make those decisions.
And so this is a topic thatwe love talking about. And if
you've listened to us over the pastsix months, Caleb, you and I
especially, we really get into thistopic because it's the cornerstone incomes the cornerstone
of retirement. So security is thecornerstone of your income plan. So it
all ties together. So we're goingto keep talking about some of these things

(26:18):
that are debatable issues and retirement issueswith your money and the next segment,
so stay with us on the otherside. This is Nick Tooman Caleb simbolac
here on a Saturday morning, asalways trying to make your retirement better.

(26:41):
Welcome back to the last segment ofthe Empowered Retirement Radio Show. This is
Caleb symbolag here with Nicktoman CFP,as always to make your retirement better.
If you would like to get intocontact with us, you can do so
by going to our website at retireMadison dot com. On our page,
you'll be able to see a lotof info about ourselves. We'll talk a
little bit. There's info on ourpage about these upcoming retirement courses in September

(27:03):
and October. And then also ifyou want to contact us, you'll be
able to do so by clicking contactus in the top right corner. You
can also give us a call atsix zero eight two one two seventy three
hundred, that is six oz eighttwo one two seventy three hundred. So,
Nick, in light of the funthat we've begun, and you know,
the political debates the beginning, weare talking about things that people often
debate in retirement, and so webegan talking about the advisor pyramid, people

(27:26):
debating about, you know, whatis best for me? Is it just
using a custodian where I get tomanage my own funds, is working with
maybe somebody who's an insurance specialist specifically, or an investment advisors specifically, or
is it somebody who kind of doesthings holistically. We mentioned people debate whether
or not you should be in WallStreet or insurance or banking. And then
the fun one social Security. Andit's honestly, for those of you listening,

(27:47):
it might have been quite an overwhelmingshow because, as we were talking
about, there's no silver bullet whenit comes to retirement everything is catered specifically
to your position. And so wetalked about a lot of different nuances,
a lot of different positions might havebeen a lot to take in. And
we're going to keep going with it, and we're gonna be talking about if
you maybe if you don't have apension, or you need some extra income
in retirement, kind of planning forthat by using a controversial one, which

(28:12):
is annuities. Annuities the a word, and you referenced in that recap,
Caleb, the three worlds of moneythat we talk about all the time is
blending together investments in Wall Street andinsurance and banking. So now we're going
to drill down and talk about oneof those insurance tools. And you said
it is polarizing. Annuities are andpeople often ask should I have an annuity

(28:37):
when I retire or as I preparefor retirement, and if so, which
type of an annuity should I use? And I want to caution, I
want to preface what we say.If you're going to use a tool like
this, an insurance product like this, it's always important not to feel like
you're buying an insurance product. Butyou're understanding and you're incorporating an insurance strategy

(28:59):
into your plan. I think thereis a big difference between folks that buy
products because somebody convinced them or soldthem on a particular idea. Maybe they
didn't look at that person. Intotality, they just sold a product,
versus using something like an annuity,which can be very polarizing if you don't
understand how it works. Incorporating thatis a strategy. So we're going to

(29:19):
talk about that. Things to considerand things to just understand as you move
forward in using a tool like anannuity. Absolutely, so the first thing
I want to say, what alot of people they don't really put two
and two together, but annuities apension. A pension is actually an annuity.
It is a tool that you canuse to create income in your retirement

(29:40):
where that income is more or less. It's principle protective, it's guaranteed,
you know it's going to be there, right, and it has some growth
component involved as well. And soa lot of people, you know,
that annuity word is a lot ofpeople don't like it, and oftentimes I
think there's a disconnect because a lotof people are pensions. In this medicine
area, and they don't realize thata pension is really just another form of
an annuity. And so when weincorporate annuities, it's it's again like we

(30:02):
talked about with social Security. Youhave to understand where it's going to fit
in your retirement plan, and it'sgoing to fit in that income part of
your retirement. People love their pensions, they love their social securities, so
why wouldn't you love an annuity.Well, some of the problem comes with
just not understanding or somebody not explaininghow some of these tools work. Because

(30:22):
an annuity in general is a tool. It's an insurance tool that helps protect
if you live too long. Whatdoes life insurance? To Caleb, it's
it's protection if you die too soon. An annuity helps protect if you live
a long retirement, so you andyour spouse live a long retirement. And
where things get very polarizing or peopleget uncertain or don't feel confident in that

(30:47):
type of a tool is because there'sthings like fees involved. They say,
what about if I cash out myinsurance contract too soon? Do I have
surrender charges? And they're overpromised howmuch maybe an annuity will grow. They're
not understanding the limitations. If youunderstand there are tools out there that may
have no fees or low fees,and you're positioning this for a long term

(31:10):
situation in your retirement, maybe thesurrender chargers. It's okay to have those
because it's a long term situation.And you understand that annuities do have limitations
and they work differently than your investmentsin Wall Street, so they just operate
differently. They don't have the sameebbs and flows. If you understand that,
that's when you can go on tothe next step and figure out which
one would be right for you.Yeah, you know, a big misconception

(31:32):
that people have. You know,a lot of people listen to Dave Ramsey
right, and Dave Ramsey is veryanti annuity, or a lot of people
are very anti nuity, and typicallythe reason is because they can be a
little bit expensive, and they compareit to Wall Street oftentimes say you might
as well just have your investments,and that's that's a misunderstanding of its purpose.
Like we said, your investments shouldn'tbe your form of income. Income
should be principle protected. You shouldknow that it's going to be there.

(31:56):
It's more or less guaranteed and thenyou do you want a little bit of
a growth component, So you wouldn'tuse an annuity as an investment replacement.
You're using an annuity to produce income, to uphold your quality of life,
to know that there's money going tobe in there, that it's not just
all of a sudden going to begone and drained like you know, say
the stock market took an eighty percenthit. That money's principal protected. It's
still going to be there, andit's meant to produce income. It's meant

(32:19):
to fill the gap of what youmight not have so that you can uphold
your quality of life and continually haveincome. So what you describe, Caleb,
is the purpose, have a purposefor some of your money. So
let's just use an easy example.Let's say you retired last year and you
accumulated a million and a half dollarsand that's what you have in your bucket,
and it's mostly in your investment accounts. Okay, Now you're heading into

(32:42):
retirement, you're trying to figure outhow much income you need. You look
at your pension, you figure outsocial Security timing, and then whatever that
gap is to fill in that youneed to cover your expenses every month,
every year. Start looking at toolswhere you shift the risk to an insurance
company. So maybe you carve outsome of that wealth, not all of
it, Maybe a carve out onehundred thousand or two hundred three hundred thousand,

(33:05):
and you dedicate that to a lifetimestream of income so that the rest
of your money, Caleb can grow, it can survive some of the ebbs
and flows of the market that wesaw last year. And when the market
has a down year, when theyit has negative returns, it doesn't necessarily
affect your income. So that's wherethat annuity comes into play. It's preserving
your money. It's designed for incomeand for moderate growth. And if you

(33:28):
understand that, and you understand thepros, the cons the fees, then
you can implement that as a strategymore effectively than just buying a product.
Absolutely, if anybody pitches like anannuity as a silver bullet right as that
as you're going to be your ultimateform of retirement income, that's just not
the case, right because, likewe said, you have Social Security income
that might be there maybe of apension, So where the annuity may or

(33:52):
may not fit. That's totally dependenton all the other pieces that you have
going into retirement that I are goingto be income producing. So it's not
something that we're saying, oh,you should allocate all of your money into
this product because it's going to beproducing income for you. It's no.
You have to take a look atall of the other pieces that you have
and see where it fits in,or it might not even fit in right.

(34:12):
So it's using the culmination of allthe tools that you have and seeing
where this may or may not,And it's really a compliment to those other
things. And in this area wesee quite often people that do still have
pensions. In other parts of thecountry, pensions aren't nearly as prevalent as
they are here in Dane County withthe state workers, people in education,
that pensions are still a part oftheir retirement income. So if they have

(34:35):
that pension and that soul security,and they live pretty modestly and have a
modest budget, maybe an annuity isn'tright for you. For those people that
don't, it just fills the gaps. But we just encourage people to get
educated, ask questions. We liketo lift up the hood. When I
sit down with somebody, say Okay, here are the pros, here are
the cons, here's what you have, this is what it's designed to do,

(34:57):
and then the implement So that's whatwe're stressing you've heard. We're very
passionate about this because it can bea dangerous tool if you don't use it
the right way, but it canbe a very nice tool for peace of
mind. And the happiest people inretirement are the folks that have the most
predictable income. So if you havethat pension and social Security, complement that
with another tool to mitigate some riskto keep your retirement as predictable as possible.

(35:22):
Those are the happiest people in retirement. So if you're listening to the
show today and you want to learnmore about how we help people navigate income
in retirement or all areas of retirement, call us today at six eight two
one two seventy three hundred. Schedulea one hour complimentary visit with one of
our advisors out at our office inMiddleton, your Greenway station, or we
can do it via zoom. Butit's just an opportunity for us to share

(35:45):
with you what we do, howwe help people prepare walk through retirement.
For those listening, if you're withinCaleb, maybe five six years of retirement,
or maybe you recently retired and youenjoyed doing all this work on your
own and now you just want togo enjoy life. Yea, let us
help you out come on in.We'll talk about how we help people navigate

(36:06):
the next phase. And if whatwe do is what you need and want,
we can talk a little bit deeperon how we could help you in
the future. Absolutely, And onething, one way I like to think
about it is even if you justhave questions about retirement, maybe you're like
you said, you're fifty year liketen years away from retirement, and you
just want to know more and youwant to see maybe the benefit that we
offer, or maybe you're just lookingfor guidance. At the very least,

(36:27):
we'll get to know you. You'llget a cup of coffee, right,
and we'll be able to give yousome guidance as to some areas that could
be beneficial for you. Right.It happens actually quite a bit where it's
like, you know, we're nota good fit, but I know what
you're looking for. You should goto this direction. And over the years,
one of the things that I takepride in having done is in those
situations that we're not a fit rightnow, or maybe the folks are just

(36:49):
far enough out that they really justneed to drill into accumulating money and they
can do that in a more costeffective way. And they started to put
the infrastructure of a plan in place, but right now it would best serve
them just to continue focus on cumulationand then reconnect in them years down the
road. We do that. SoI enjoy helping people, even if it's

(37:09):
in that infant stage of getting itin that next part of life thinking through
some of these things. So it'sa good one hour together. You can
call us Caleb. You're going tohave to contact them back on Monday because
everybody is off on Saturday. Butwe're having a good time here. And
folks, as you're listening to theshow, can I add one more thing?
As we're talking about these topics,and we've done frequently asked questions,

(37:30):
and today we're talking about areas ofyour money that we debate. It seems
like quite often when it comes toretirement. If there is a topic that
you would like us to dive intoa little deeper or talk about on upcoming
shows, I would encourage you toemail us, go to retire Madison dot
com. And we love suggestions.We love feedback because when we do this

(37:52):
on Saturday, we want it tobe valuable for the people listening. We
want to help people think about this. So if there's a topic you want
us to talk about in an upcomingshow, trop us a line let us
know. Yeah, absolutely so,folks, we hope this has been beneficial
for you. We know we've talkedabout a lot, We've incorporated a lot
of information and it might be quiteoverwhelming. So I hope you guys got

(38:13):
some benefit from this and that youhave a great rest of your Saturday.
Yeah, great rest of your Saturday. Next week is long Labor Day weekend
feels like the end of summer.Boil Boy is the end of summer.
I don't say that kill but we'rehere to make you our retirement. But
when you retire, you can gofind a home in Florida. Arizona's always
summer then, right if you doit the right way. But we're here
to help you navigate through that nextpart of your life. We hope it's

(38:36):
amazing. This is Nick Toman,Caleb symbolackt the Powered Retirement Radio Show here
to make your retirement better. Investmentadvisory services offered through Trek Capital Management LLLC
and SEC Registered Investment Advisor. Informationpresented is for educational purposes only and it
should not be considered specific Investment advice. Does not take into consideration your specific

(39:00):
situation and does not intend to makean offer or solicitation for the sale or
purchase of any securities or investment strategies. Investments involve risk and are not guaranteed,
and past performance is no guarantee offuture results. For specific tax advice
on any strategy, consults with aqualified tax professional before implementing any strategy discussed here in