Episode Transcript
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(00:01):
In your corner, saving one investorat a time, working for clients,
not companies, all while bullyproofing portfolios, totally committed to sharing academic truths,
a bottom missing, always representing MainStreet and not Wall Street. Team,
It's your Son Money team, andthis is the Sound Money Investment Show with
(00:21):
Drawn Financial Advisors. Hello and welcometo the Sound Many Investment Show with Brown
Financial Advisors. I'm Greg Brown andI'm James both and we are a registered
investment advisor firm. We are independent. We do work for clients, not
companies. Our fun number five onethree five seven five nine sixty five four.
If you're no longer with the companyand you're looking to take control of
(00:44):
your money, we can help youwith individual advice as far as whether you
should roll that out into a taxneutral IRA, maybe split that apart via
the UA. And that's for peoplewith appreciated, maybe perhaps highly appreciated company
stock inside their company plan. Ourfund number five one three five seven five
nine sixty five four. Our websiteBrownfinancial Advisors dot com, email team at
(01:07):
Brownfinancial Advisors dot com, and ourhome offices in Milford, but we also
have locations in Blue Westchester and Florencegreg Today, we're going to discuss something
that could be representative of several financialdecisions if you really break it down,
think about it. The topic forus today is a pension buyout offer right
for you. So if you're confrontedwith the an opportunity to take a pension,
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and that pension, you have apension. Exactly, it's a minority
situation out there these days. Thereare people in public service, government related
and so forth still kind of preservesome of those opportunities. Or if you're
with the corporation, been there along time, and some one of those
companies that's still lingered with the pensionprogram that was eventually many times upgraded or
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replaced with the four one K conceptentirely. Some of those companies, and
if this is connecting with you andparallel plans, they had the legacy plan
of the pension that kind of ranalong forward for a certain group of workers
and then fully replaced for all thenewcomers thereafter with the four and one K
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concept of employee contribution company match.And then when those let's say those older,
more mature workers kind of transition intoretirement, they have the opportunity to
take that pension decision, which we'llfocus on, and the combination of rolling
over there four one K into anira kind of having the best of both
worlds. But when it comes tothe pension buyo, you'll know by the
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sound of this, just the ingredientshere, that you have a bucket of
money with your name on it.Excuse me, so that much is true.
The company will offer to convert thatto a stream of payments. The
pension payment. It's kind of anuidization. It is a monthly payment and
it comes with some options like morefor you and none for anyone else,
or something called a survivor's benefit,where a little bit can go for a
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spouse significant other you'll get slightly lessand they'll get something in case you die.
Has something can be fifty percent,you know, sixty six point six
percent, some number. All decisionsto make, and then oftentimes you'll find
that you have a bit of afork in the road where you can take
a little bit of the monthly paymentas an option and a lump sum,
or we can go all the waythe end around and just say nope,
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keep the monthly payments. I'm goingto take the money, and you take
the lump sum, and there aresome benefits in that. We'll discuss the
ins and outs of all this,but how it also kind of is a
shadow of something else. Well,social security is kind of like an annuity,
an annuity that has money that's convertedto a stream of payments over what
your life. So pensions and socisecurity is similar, and we want you
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to know that we can help youmake these critical decisions and whether it's a
pension buyout, a pension election,a pension selection, the decisions and also
with maximizing your social security, makesure you get the most out of that,
whether it's spousal benefits and what toconsider there just your benefit, when
to turn it on sixty two tworoirement, sixty six through sixty seven ish
or even seventy you know what makesthe most sense? Well, what tell
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you what? We know that whenwe see folks just like you, it's
about what your purpose of money is. How much money you're going to need
is cash flow and retirement. Howmuch would be provided by these ancillary sources
of foundational income, whether pension orsocial security, versus what you really need.
That difference that we focus on asa gap, and we're going to
use these other investment resources that youaccumulate over time to align them properly to
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determine what is the best way toproduce that cash flow, because retirement's about
cash flow. And then the restof your residual moneys and buckets of money
properly invested overy long periods of time, and you know what that's for,
to provide a little growth, hedgeinflation, and be available for some liquidity
as needs arise throughout the journey.So all this can work together, and
it works together well or less thanwell. And we like to remind you
that retirement oftentimes does not come withdover so we encourage you to contact us
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because we are holistic round financial advisorsyour soal many Advisorutine. We do investment
management investments. Of course, allthis in the context of overall financial plan
insurance a lot of purposes of insurance. You know which half your money willing
to lose, well the half thatyou do not want to risk. In
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other words, we could fully insureand have it protect against market loss and
still get some of those gains inthe market without the downside through the use
of annuity products and fully insured accounts. So keep that in mind, then
get old fashioned insurance like how toreplace income if you don't make it through
the journey of working a full careerand saving for the future for the loved
ones. We don't see that asmuch in the pre or near retirement and
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in retirement phase. There's other usesof life insurance and its to protect the
legacy of your state. Prepay sometaxes so it pays a death benefit tax
free into your state when you exitthe planet. And then all this money
hits people right between the eyes,becomes taxable along comes like a superhero swooping
in to save the day. Isthat life insurance a death benefit tax free?
To pay off those taxes, youcan pay taxes, prepay taxes in
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nickels, dimes, and quarters,and cost instead of dollar for dollar later
all kinds of neat ways to bringall this holistically. That means the kitchen
sink together. And that makes thisdifferent than you have a state planning,
You have your legal documents in order. Most people want to plan to but
don't in fact have it done.We'll help you get that done. Tax
is tax preparation. That's one wayto look at it. How about tax
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planning, we can bring it togetherand start working on tax efficiency tax savings
on the old cliche that penny savespenny earned. And when you're on a
fixed income, the more money leftin your wallet pur which is more money
for you to use and less moneyyou have to kind of come up with
through your investments to create the cashflow. Puts less pressure, less burden
on your investment buckets. So youcan see how this works together. And
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we're reminded when we really get tohave the discussion with folks and perspective clients
and even existing clients who seem toforget, and that's on us. We
own that we're responsible for not messagingas clearly and it's frequently as thoroughly as
we should that all these things makea better financial relationship with you and your
money over the rest of your forever. Why settle for one trick pony solutions.
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Why settle for a brokerage firm thatjust does investments and they're not even
necessarily tax efficient because they have nofodiary duty to put your interest first,
nor do they offer the services oftaxes or a state or income planning or
financial planning or fully insured solutions,because really they just want your money inder
management for a fee, and soyou either die or fire them, right,
so anyway brokers bake you broker careful. How so there's a lot to
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talk about in this. We justwant you to be aware again where Holistic
will assess where you currently are,We'll come up with a plan. We'll
give you all the recommendations while holdingthing back that'll be complementary. That'd just
be our time together, putting someresources in to your future. And then
you just have a simple decision.You will see transparently have all the information
to make great decisions, and peopledo giving good information to make better decisions,
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and we'll have it. Agree toagree or agree to disagree. That's
just the time. He's not rightto work together. You'll say, yep,
we want to work together. Howdo we get going? And it's
very simple from there and we beginour journey. So that's just kind of
like all that triggered by pension.Why because retirement is cash flow and pension
is part of cash flow and socialsecurity. So when you're deciding upon a
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lump sum or monthly pension option andwhat's right for you, it all depends
on the situation. You know,decisions, decisions, decisions. These are
some of the larger decisions, andyou make a lot in everyday life.
We're all we're all making decisions allthe time. Some decisions impact this differently,
can be more consequential, have ahuge impact on our future or in
this case, again the phrase theycatch phrase with me when it relates to
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retirement, it's like, it's therest of your forever. So which company
or advisor or group or who's yourwho's your team? Who's it going to
be? Do they really form ateam? Do they really form and provide
a series and a battery of solutionsthat really help you out in these areas
that are so critical, that arespecialists. You know, we'll joke in
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public seminar settings that, let's say, show of hands here, how many
of y'all still work with a pediatrician? You go to see a pediatrician,
and I'll look at each other andkind of gram us, some smile,
some laugh out loud, and it'slike, you get the point. You
need a specialist. This is whatwe do. Why go to some place
else somewhere else where? This isnot, in fact what they do.
So anyway, we we want tohelp you make these decisions best, because
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if you make a bad decision onwhat's an irrevocable decision, I mean,
you can't take one back, soit better be right. And we do
want to get this one right.James, Well, a couple of things,
A couple thoughts about this one isword bias, word association. Here's
what I mean by that. Ifwe ask clients or even perspective clients,
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is about Social Security, about pensions, about annuities. Usually you get the
warm fuzzies about the Social Security programabout pensions, and word bias or word
sometimes association is you kind of getthe cold prickles about annuities. Annuities.
Oh, I don't like annuities,but I like Social Security. I like
the option or the idea of apension where you get a guaranteed paycheck for
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life. We'll guess what. Allthree of these programs are forms of annuities.
The only difference really is who administersthe annuity contract. Social Security absolutely
is a form of annuity pensions.Again, if you take the annuitized option,
sounds like an annuity, right,It is an annuity. That's the
entire point is eliminate your word biasesand that's going to help as far as
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making decisions that are that are better, more holistic for you when it comes
to your not only retirement, butalso making it through retirement. Our funderbent
Delfice five one three, five,seven, five nine sixty five four again
five one three, five, seven, five nine sixty five four callus we
can help, but stay tuned.Listening to the sound Maney Investment Show with
Brown Financial Advisors Shore on fifty fiveKRC Detax station. Opinions expressed are solely
(10:52):
those of Brown Financial Advisors and shouldnot be interpreted as specific advice. Materials
presented are believed to be from reliablesources and no representations can be made as
to its accuracy. All ideas andinformation should be discussed in detail with one
of our qualified investment advisors prior toimplementation. Market based investments involve risk,
and past performance is no guarantee offuture results. Insurance based investments offer guarantees
(11:13):
based upon the claims paying ability ofthe issuing company. All insurance, tax
and mortgage services are offered through BrownInsurance and Tax Advisors LLC. Brown Financial
Advisors and Brown Insurance and Tax Advisorsare affiliated companies and may only transact business
in those states in which registered orwere otherwise legally permitted. Welcome back to
the sound Many Investment Show with BrownFinancial Advisors. I'm Greg Brown and I'm
(11:35):
James foroth Than. We are anindependent ria that's a registered investment advisor firm.
We do our for clients, notcompanies. That's Main Street and not
Wall Street. Our fun number fiveone, three, five, seven,
five, nine to sixty five tofour, website, Brownfinancial Advisors dot com,
email share your thoughts to team atbrownfinanci Advisors dot com. And our
home offices in Milford, but wealso have locations in Blue Ash, Westchester
(11:58):
and Florence. Greg, hey,James. Someone said, what do you
mean exactly by Main Street Wall Street? It's kind of like and it's fiduciary
duty that we have to put yourinterest first. What we're doing is sitting
on the same side of the tablewith you. It's kind of like us
versus them as one perspective, ifyou will, who is them Wall Street?
Do they have your best interests inmine? I would suggest you not
think so. Do they have anagenda? You bet? Do they have
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a fiduciary duty to put your interestfirst? Don't count on it. Does
it matter? Of course it matters. It's kind of like the difference between
we'll do things with you and foryou versus doing things to you. You
get the difference there. It's notso subtle. Actually, as we continue
on our topic today, it's aboutpensions, it could be social security decision
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making time. What's the best buyoutproposition for you? Is it to take
a pension buy out and convert itto cash that you control and keeping your
family and your legacy. You usethis income while you need it, invest
it, and then when you're gone, it can actually go to people you
love or charities you care about.Were you going to take the paycheck,
the monthly pay check where you leavethe planet, the bucket of money goes
back up to the mothership and it'sspread across people's while it's in persons you've
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never known or never meet. Onesounds a little more favorable, But we
need to make sure the math isright, the plan is solid, and
the choice and decision is right foryou. And along with that, we'll
look at what's some thoughts, thoughtprovoking questions, Yes, the thought provoking
questions that tie into today's show.So for starters. Should I consider taking
a lump sum this is the lumpsum option on the pension if I need
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an income stream for life. Andsometimes the decision making on this one is
it an I decision or a meatdecision or is it a weed decision?
So if you're looking at taking sometype of payment that's going to last you
for the rest of your forever,well, what about the spouse? Are
you covering them as well? Andusually what happens with the company if you're
doing the annuitized option and they haveto ensure two lives. Once again,
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annuities are forms of insurance, soif they're ensuring two lives, there's a
haircut on the monthly payment. Ifyou're taking a pay that lasts for a
certain number of years, once again, the company has to provide extra insurance,
so they take it out from yourmonthly payments, So you take voluntarily
a lower payout to ensure that secondlife. And here's a question that really
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only you can answer, which isdo you have an emergency fund in case
something unexpected where to happen? Sofirst things first, make sure you have
that emergency cash flow on hand beforeyou start talking about investments. It's like
walking before running. Will my pensionhelp protect me from inflation? This is
another way of saying, is therea built in cost of living adjustment on
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your pension payments? The vast majorityof them do not have this, which
is again one of the other reasonswhy it might make more sense to privately
invest as opposed to taking thenuitized pensionoption. Will a pension allow me to
pass on money to my children andother beneficiaries? Now, this is where
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if there's a spousal benefit, theanswer typically is yes, if you elect
the spousal benefit, either at aone percent or fifty seventy five percent or
whatever the payment options are. Asfar as your spousal benefit options, another
way that you can potentially have somethingfor the beneficiaries is if you elect a
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certain number of years for your pensionpayments. Very commonly one of the options
is you get payments for at leastten years or the rest of your life,
whichever one happens first. Right,Yeah, hey, James, on
that note, just yesterday working witha couple and he had an old lump
somewhere. A lot of the companiesnow are trying to get you to go
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ahead and just make a decision.They're just wrapping up their pension programs.
They just want to roll on,roll forward, and they're saying, take
this as a payment, we'll startat sixty five. Make your decision now.
Let's say you're fifty, used towork at a company had this pension
program. They recognize you're not goingto start it yet, but they're wanting
you to make a decision now becausethey want to just flush the proverbial toilet
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of these programs and get them offtheir book books. So let's say,
choose his payment or choose this lumpsum. And we were kind of looking
the difference between the current age andtheir intention to work till Medicare age is
sixty five. You know, thatwas like fifteen years. And I asked
them, one or or both ofthem together, how long do you see
yourself being in retirement? I mean, we're planning for twenty and thirty years
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at a time, but what doyou feel about Well, he had good
genes, you know, on hisside, and she felt pretty similar that
you know the same, and they'rethinking at least twenty years. We want
a plan. I said, well, is that for both of you?
Said? Yeah, how about thesurvivor of the two of you, and
she said, well that that mayvery likely be me, And so I
guess I could go, what twentyfive should we? Okay, good,
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let's look at that. Now.Let's look at the bucket of money they're
offering you versus the payment stream.What's the breakpoint? We kind of mathematically
back then to about fourteen years,So they're planning on you only having fourteen
years in a retirement. How doyou feel about that? And they said,
well, what do you think?I said, well, I think
you need to not live fifteen andthat is that the plan you want?
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And of course not, And thenyou mentioned all these very good points.
You know, we control the moneyif we take the lump sum, if
it makes sense in our situation.They make the payments kind of unrealistic because
they know that in the end you'regonna die and the money's going to go
back to the company, so theymake the payments look more attractive then they
would be generally if you're just usingthe money in investing and taking yourself.
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But remember you take control of it. You can increase the amount annually to
create a cost of living adjustment.Like James mention, you typically can't with
the pension, and then you don'tget backed in mathematically to a time you
have to die, like you know, Thursday at twelve, just after lunch.
I mean, come on, wedon't want to live that way.
So there's more that goes into this. I know a lot of that sounded
philosophical, but it turns to mathreal quick if it's your reality. So,
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just to reiterate, the only waychildren could receive part of your pension
or in other words, so nonspouse beneficiary is if you elect the term
certain option and you die within thatterm, it's the only way your children
or non spouse beneficiary could receive that. So if you took fifteen year payment
and you're only here thirteen, someoneelse gets two more years. If your
spouse has already gone, your beneficiaries, your children, they would get through
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remaining two years exactly. Now,when it comes to average life expectancies depends
upon when you look and when youstart. If you look at the overall
life expectancies, it's seventy nine formen, eighty one for women thereabouts.
Now, if you've already made itto let's just say age sixty five,
and you're looking at retirement. Now, your average life expectancy is into the
low to mid eighties for both menand women, So we're talking about between
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eighty four and eighty six. Soyou know, depend upon where you're looking
when you start's that's where the lifeexpectancies sometimes look different. Here's another one
very important for some out there.What is the Pension Benefit Guarantee Corporation?
And how much of my pension willthey back? Or maybe another way of
looking at this or saying it iswhat type of haircut will I receive if
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they have to take over my pension? Should I be concerned about the strength
of my pension? Goes back tothe Pension Benefit Guarantee Corporation once again,
So depending upon your company, ifthe government has to rescue your pension,
that's maybe not such a good thingor a good reason why you should choose
the pension and instead maybe privately invest. Hey, we've seen it both ways
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too. We've seen pensions that didnot get rescued, and we've seen many
which did which the benefits were typicallycut down to like fifty percent or fifty
cents in the dollar. Not allthe time, but you just need to
know it's possible and it does happen, and last and sortainly not at least,
why are companies offering the pension buyoutto their current and previous employees and
very simply its liabilities. The riskto them is that you live to be
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too old or to you know,you live too long and they have to
continue making the payments for usue forever, even if you're like mister and missus
Methusalem Greg. Any thoughts just that, I guess kind of have my own
phrase when it comes to this subject. We don't want you land locked into
a specific time you have to dieto make sense of the math of your
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decisions made years earlier, and kindof combining two eclectic shows Mission Impossible in
Star Trek and kind of put togetherlike this. Your mission, if you
choose to accept it, is tolive long and prosper. No no other
thoughts, well, and one otherthought. I will say this because we
mentioned the word irrevocable, and Iwould say about ninety nine percent of the
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pensions out there do have an irrevocabledecision tree when it comes to making that
election. That means door number onechoosing the lump sum, door number two
choosing to denuitize monthly payment options.Once in a very great while, that's
like saying one in one thousand thereaboutsis when the company decides there's a form
of a do over. And againwhat is happening kind of behind the scenes
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with that company is they're looking tooffload liabilities, and you are the liability
when it comes to having the pension. So the company may offer a second
round of the decisions that says,are you sure you don't want to take
the lumps on option? And formany people it's it's kind of getting a
bail out if you will on theirretirement. So if you do have that
second round option, good for you. Take advantage of that, and at
(21:14):
the very least come see us orcall us and we can help you with
that decision. Our fun number fiveone, three, five, seven,
five nine to sixty five four callus. We can help. But stay
tuned. Listening to the Sound MoneyInvestment Show with Brown Financial Advisor's Shore on
fifty five KRC Detac station. Welcomeback to the Sound Many Investment Show with
(21:37):
Brown Financial Advisors. I'm Greg Brownand I'm James Wharton. We are a
registered investment advisory firm. We areindependent. We do work for clients,
not companies, and it does allstart with having a plan, well,
actually having a plan right, knowingwhat you own and why you own it.
So what you're seeking advice on anold four to one K, four
to three b IRA rollover, investmentplanning, retirement planning, income planning,
(22:00):
tax planning, social security maximization,a Roth conversion analysis, and Innuay analysis
and for some perhaps even in servicerollover. All those and more we can
help five one, three, five, seven, five nine sixty five four
our website Brownfinancial Advisors dot com,email team at Brownfinancial Advisors dot com,
and our home offices in Milford,but we also have locations in blue Ash,
(22:22):
Westchester and Florence. Shall well pensionbuyouts if that offer is a right
for you, deciding if the lumpsome payment or maybe monthly pension options the
right combination even for your situation,We want to look at the holistic plan,
look at your cash flow projections,your current investments, can come up
with a decision based on the bigpicture or reduce all the way down to
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this mollus of detail, because otherwiseyou just don't want someone dictating to you
the choice you should make, justsimply because they believe it's right. Certainly
not just the company's perspective. Weneed to make it to make certain it's
right for you. So let's seehere, if you were to have a
pension buy out opportunity, and mostpeople already know, you know today's retirement
landscape, the pensions have they're increasinglyrare, but many employers that have succeeded
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pensions with four to one k stillmight have legacy pensions. That is James
has already mentioned they're trying to weallow of settle up on and move on,
and those are those are there's sometype of defined contribution plan that allows
you to save and build a nestegg. That's what is offered through employers.
Right, you had these these planswhere you're contributing now and they're matching.
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But once upon a time the companywas just setting aside moneys from the
economic performance of the organization and puttingit into this platform that was a pension
platform. So the pros and conshere both the pension and a four to
one k company plan, well,for most people it's like it doesn't matter
to them. They're just they're sofar away from retirement through thinking, yeah,
(23:55):
I'm contributing something to my future.What is the difference. Well,
the pension plans are off some timesfunded by the companies. The fore and
one k's are funded by you andsometimes the company. Not always. There
are not always a match opportunity availablefor employees. And of course, right
there, just insert the old logicthat if there's free money, take it.
(24:18):
If you're going to contribute to saysix percent, to get their three
and that's what you have to do, then you do what you have to
do to get their free money three, you know, don't do seven,
don't do more. And if theydon't have a match, well let's just
look at your participation at all andsee if it even makes sense. But
we're seeing this pretty common occurrence thatyou know, these pensions are being bought
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out, and that's why this subjectis here today. Now for those of
you have recently been offered a buyoutof a pension, you've seen the forms,
you've seen the letter expressing you knowhow they are presenting this opportunity to
you. Until twenty nineteen, theIRIS actually prohibited companies from offering pension buyouts
to former employees who had already receivingstarted to receive those benefits. Now James
(25:03):
mentioned some of those folks are gettinga second opportunity, they oftentimes sweeten the
pot and there are a number ofeconomic reasons and factors and dynamics for that.
But why is this just happening inmass Because it's only been recently that
the government allowed for that to occur. So that's why you're seeing more of
that if you know you've been affectedby this. James, Well, something
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else that we've seen with some recenti'd say these rash of buyout options.
And this is a good thing,by the way, where the company will
provide an actuarial comparison between taking thelump sum option versus the annuitize options.
And this is this is very instructivebecause you can see even by their math,
the company's math, that you areoftentimes about fifteen to twenty percent better
(25:52):
off taking lump sum option versus theannuitize option. So again, don't just
take our word for it. Thecompany themselves will tell you this if they
provide that actuary comparison. So that'ssomething that we have seen more frequently is
where they include that actuarial comparison ofthe lump sum versus the different types of
annuity or annuitized options of your pension. That's very instructive and very helpful to
(26:17):
kind of like make one of theseobjective decisions about your pension. Now,
when it comes to the reason whypeople or i mean these companies are offering
the pension buyouts, starts with thisinterest rates. You look at what's the
recent history of interest rates are andhow there's been kind of a rapid increase
over the past two years of theoverall interest rates. And that's a reason
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why sometimes a major reason why someof these companies' pensions are are underfunded.
Now, balance it out between whatthe government has also done recently comes back
to the government always. But whenyou hear that government has bailed something or
someone out, guess what that means. That means we, the taxpayers have
bailed something or someone out. Sorecently there's been a major influx of capital
(27:03):
funding into the pension plans. Thankyou to all the taxpayers out there,
And yes, the taxpayers are theones who have funded these bailouts. Now,
a second reason why companies are offeringpension buyouts is because of longevity.
Yes, that means people overall arestill living longer than they were compared to
the past decade or two. Now, keep that in mind because there's always
(27:26):
that. Yeah, but because ofthat recent pandemic called the COVID nineteen pandemic,
right, that happened, and thathas affected the longevity landscape. So
it may be compared to say twentyseventeen, eighteen and nineteen, the overall
life expectancies have effectively plateaued since then. But again if you go back to
ten years ago or even twenty yearsago, yes, compared to then,
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people are still living longer. There'sreasons for that. It starts with medical
advances people in general, maybe havingaccess to better healthcare, healthier foods,
and abundance of exercise options. Peopleon medicare, the silver sneakers, things
like that. All the tribute tooverall life expectancies that are still overall going
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up compared to them. And that'skind of a good thing overall, But
it also means that more years thatyou have to pay out that pension.
Right. That means there's an increaseof liability when it comes to the companies,
which leads to recent number three gregwhich is what why companies are offering
the pension by ounce the liabilities Imean, it's pretty simple. If you're
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living longer and they're on a commitmentto pay you monthly for the rest of
your life, and now the restof your life is longer, the economic
exposure to pay more money over timefor every pensioner involved becomes a mathematical avalanche
of liability. And that's what leadsto the illiquidity and the financial challenges and
stress upon the pension planetic that causesthem to slide into failure and then thus
(28:57):
comes in the you know, theguaranteed fund to try to bail these things
out, and it becomes stressed,and then you start to see a compromise
on how much of a pension canin fact be bailed out and honored.
Is it dollar for dollars? It'ssomething less than a dollar per dollar,
and you know, stepping back andsay, you know, you might say,
what is it? Pension buyout?Okay, you mentioned pension several times.
(29:19):
A pension buyout? See your employers. They issue a notice gives you
an option to exchange a monthly benefitoffer for a lump sum or sometimes a
combination. So you opt for alump sum and what happens, Well,
just know that that's eligible to rollover to an IRA. It's never been
taxed yet. It's treated as atax deferred bucket of money. And where
(29:40):
will end up you'll take the lumpsum. Yes, i'd like that,
thank you very much. Where's itcoming to your IRA? Now? If
you try to take it directly,be prepared they might withhold a mandatory twenty
percent tax withholding. So if yousend it straight into a custodian into your
IRA account, it will be taxdeferred dollar for dollar, go in there,
and then it'll just join an existingIRA or be a standlane IRA,
(30:03):
and then we can make that partof a private investment approach, is part
of your overall private investment plan andcontinue planning for your future. And then
when you're ready to start taking moneyfrom that account, you can take it
as well. It's taxable just likean IRA, so we will work that
with you. So IRA the pensionfund for that amount, the pension you
are receiving as a lump sum wouldbe going to a tax deferred IRA.
(30:26):
If you're receiving this monthly income,that's just taxable like income at the point
in time you're eligible to start it. A lot of times they'll start these
payments at sixty five. You mightmake your election prior you might be today,
as mentioned earlier, being confronted andasked to make a decision. Now
a pension program they're trying to wrapup and get all the pensioners, potential
pensioners all decided upon on who's goingto take checks, who's going to take
(30:48):
lump sum, even though you're maybeten years away from being eligible to start
the monthly payment. See, that'stime and money. If you go ahead
and take the lump sum and wefind a more productive way to invest it
over time where you control it,that's a good thing. Also, here's
a note you know how just emphasizedthat this would roll to an IRA.
What if you want to get alittle more tax savvy and you still had
time before you're retiring, you takethis lump sum comes over as an IRA,
(31:11):
we start working a wroth conversion strategyto where so much per year each
year from now through save retirement orwhatever timeframe we get over to a WROTH.
So later when either you start takingmoney from it for real is part
of your income strategy, it'll betax free, or if you die and
we all will, it can betax free death benefits, surviving spouse,
(31:32):
for beneficiaries and heirs. So allthat to say that, you know,
James has covered some reasons. Hepassed it to me for number three,
but his number one was interest rateshave gotten more costly. It makes the
plans more expensive. Longevity living longercreates more potential for larger payouts over time.
Number three is the liability itself thatthat creates because obligation to pay us
(31:53):
still there for life. Now everyone'slive and longer makes it more difficult.
Now when it comes to the Rothconverse analysis, here's maybe a thought about
that the overall tax rates that wehave today are lower than they'll likely be
within two years or just going forward. Just kind of like in general,
it comes to this, how faris our country in debt? What does
(32:15):
the country do next? In otherwords, our government, what do we
do next? Do we either cutspending or raise taxes. It seems unlikely
that we're going to cut spending becauseit seems like that's never an option with
our government. So the alternative,almost without a doubt, is at some
point in time taxes have to beraised. So if you convert to a
(32:35):
Wroth with the tax rates being lower, then that's a way to save money,
perhaps over time, maybe significantly amountof money. Anyways, there's more,
there's much more off phone number fiveone three, five, seventy five,
nine to sixty five to four callswe can help, but stay tuned.
Listening to the sound Man Investment Showwith Round Financial Advisors shore in fifty
five KRC Detax station. Welcome backto how Many Investment Show with Brown Financial
(33:04):
Advisors. I'm Great Brown and I'mJames Moore Than. We are an independent
RIA that's a registered investment advisor firmworking for clients, not companies. Again,
that's Main Street and not Wall Streets. Our fund number five Oneth three
five seven five, mine six fiveto four. Our website, Brownfinancial Advisors
dot com. Email team at BrownfinancialAdvisors dot Com. Our home offices in
Milford, but we also have locationsin Blue Ash, Westchester and Florence.
(33:29):
Greg Well, James. As we'reapproaching the financial planning and the decision making
and the analysis that goes into shouldyou take a monthly check or should you
take the lump sum and invest itand do something fantastical, Well James take
us through some of the considerations ofincome, needs and expenses. Yes,
understanding first of all your needs andyour expenses, your inflows versus your outflows.
(33:52):
So think about what you have foryour current income sources, whether it
be from Social Security, pension,if you have a pension, if you
have an annuity also form of amaybe one or the other. You also
might have investments that you might betaking income from, whether it be your
dividends that you're taking basically as mailboxmoney instead of reinvesting, whatever the case
(34:13):
may be. As far as youras your inflows are concerned, in other
words, your income, compare thatto what's going out. And then,
at the point of making the mathperhaps easier, let's just give some numbers.
So let's just say that all ofyour income sources together adds up to
four thousand dollars monthly. And thenyou look at what you calculate for your
essential expenses. And this is whereyou kind of separate your needs versus your
(34:36):
wants when it comes to spending.So think about your food, housing,
insurance, et cetera. And maybethat also comes out to approximately four thousand
a month. So if you thinkabout that, you're kind of at a
break even point. But once again, what's going to happen not only this
month, but next month and ayear from today. What's going to happen
to the purchasing power of your dollaris or a cost of living adjustment built
(34:57):
into these payments. So in thissituation, it might be a better choice
to keep the monthly pension simply becauseit plays a critical role in meeting your
income needs. But let's just sayyou're guaranteed income sources exceed your essential expenses.
In this case, consider taking lumpsum and going back to taking thenuitized
version. Again, if there's nocost of living adjustment, then think about
(35:22):
how your needs will change over timeas far as what your need for income.
So if you if your expenses aregoing up because cost of living is
going up, then once again,is your income also going up to match
that? And with the monthly pensiontypically it does not increase over time.
That means with inflation. So that'svery important to consider, is don't lose
(35:45):
to inflation. Greg Any thoughts,Yeah, before we transition to holding on
the money, controlling it when you'redone using it for your purposes and you
can at longevity and you know,wealth transfer and legacy, let's let's step
back and focus a little bit onincome. What are some income solutions we've
already talked about the power of certainannuity products. Doesn't matter if a fisher
(36:07):
or whoever, whatever, news andnoise the day their entities out there that
all they're trying to do is shakeyou down if you have an annuity,
scary out of it, So youjust throw in the town and jump into
their asset managements. Then get afeed. And I mentioned earlier and I
mean this so you can get afee until you either die or fire them.
And I can tell you some ofthose organizations out there that speak so
poorly about certain annuity products. Numberone, that's their angle, okay.
(36:29):
Number two, be careful the fineprint. What is your old saying,
James about fine print? Oh,the bold print, give it the fine
print. Taketh away. Yeah,here's what they're going to take away.
When you determine you don't like theirinvestment style a few years into the relationship
and you try to walk out thedoor thinking you can, they'll remind you
any surrender charge that they took careof for you, or they took care
(36:50):
of it by reducing your fee forthe first few years they're going to claw
it back. They're going to say, oh, by the way, you
had a six percent surrender on thatannuity. We talked you into surrendering,
and the say one hundred thousand,that was six thousand, the six percent,
and they subsidize their fee by threequarters of a percent or some number.
And you try to walk away.They want that six thousand back.
They're going to claw it back.So look out. It's an angle.
(37:14):
There's always an angle with some ofthese things. And that's the difference between
a true fidiiary and a holistic advisor. Has to look at it, you
know, from every perspective, butnow income itself. So you have these
annuity products that can give you guaranteedlifetime income kind of like an additional pension
check or a self funded Social Securitycheck, all really cool stuff. Meet
(37:35):
your cash flow needs. The restof your investments can be invested at whatever
risk that's necessary needed. Do youprefer hedge inflation, grow money over time,
have liquidity, but you have yourcash flow self. For Another approach
is just traditionally through investing. Maybeit's dividend investing, where most of your
cash is created by the dividend orthe fruit thrown off the fruit tree of
your investments, where the tree isthe stock. You know, it goes
up, it goes down, youknow, just like trees have good seasons,
(37:58):
bad seasons, and it has yield. You know what's the fruit.
It's the yield. What's it yielding? The dividend? What's the dividend cash
that can either be sent to youor reinvested, right, so old dividend
approach, or we can use growthof equities in your investments at large too,
as they kind of percolate and growover time. You're taking a certain
amount of money each year, whichequates to some kind of percentage of drawdown.
(38:19):
If you think about it. Youknow, if you're taking forty thousand
off a million, what is thatfour percent? If you take four percent
every year, is that going tobe forty thousand? Ah? A good
question depends on if you're still holdinga million. If there's a twenty percent
pull back in the market, you'redown to eight hundred thousand, four percent,
it's gonna be thirty two thousand.You just took an eight thousand a
year hit, right, So we'retalking income here. What's another approach?
(38:40):
Well, we have some interesting approachit's one of them is just called designed
income. It's a market strategy.And how this particular thing works is,
let's say you put in I'm goingto say a million, but you know,
just add or subtract zero. Soevery situation is different, the truth
remains the same. Let's say amillion dollars into this one version of a
designed income strategy that we have wouldbe eight point two percent qu pon rate.
(39:06):
What does that mean? Well,I'm going to make it simple math.
Eight percent on a million dollars iseighty thousand a year. How would
you like that paid? Well,this is particular strategy, and it was
eight point two, say'd be eightytwo thousand per year. It'd be paid
monthly. So divide eighty twenty bytwelve and there's your monthly paycheck on a
million. Well, how does thisthing work where your million will be returned
(39:28):
to you in thirty six months?It's a thirty six month duration or maturity
or term. So for this thirtysix month period, you'd be receiving eighty
two thousand per year on a milliondollars divided by twelve months to get a
monthly payment. Now, what couldgo wrong? Okay, sounds too good
to be true. Well, thereare some parameters here. In any given
quarter during the three years, ifthe market were to be down fifty percent,
(39:52):
So this is linked to the lesserperforming the SMP, the DOUBT or
Nasdaq. So if these indices aredown fifty percent in a certain period,
then you won't get your payment forthat period. Okay, Now the end
of the three years, if themarket were down fifty percent from where it
started thirty six months earlier, you'dbe exposed to that market risk. Well,
(40:14):
market industors generally exposed to the marketmovements anyway, right, So no
new news there. It just kindof sounds more provocative. But now,
if we were to take you throughthe statistics, there's that worse always and
to show you that since nineteen twentysix, the number of times the market,
the markets at large, have beendown that much. It's just it's
(40:37):
happened once. Yeah. So thereyou have it. And so you're saying
there's a chance, there's a chanceyou have to be full disclosure. But
this is pretty sweet right here.We have other options. It's just always
and these are boutique like options.This isn't something you walk into a broke
trum or bank and get and it'sjust another thing that makes us different.
You don't know what you're missing byjust running with the herd. Once you
(40:58):
separate from the herd, we'll helpyou avoid the lions and you don't have
to be the average gazelle. We'regoing to get you to the next watering
hole just the way you want.And maybe too philosophical there, but James,
any thoughts on that as we talkedmaybe further about this, or income
producing or pension taking or longevity andwell transfer aspects. Sometimes it's like asking
(41:19):
yourself, what is the primary objectiveyour first mandate for your investments. Typically
there's three categories. There's growth,there's safety, there's income. So if
you're thinking to yourself, my firstthing that I need mindset and investment my
investments. Easy for me to say, first thing I need for my investments
not to do is to lose money. That means you want safety first,
and then you want growth second,and we can take care of that.
(41:42):
And then if you're transitioning to needingto draw income from your portfolios, maybe
income is now number one. Ormaybe if you have multiple different investments,
multiple different investment accounts, maybe youhave one that has a design for growth,
a second one that's designed maybe forsafety, and a third one that's
designed for the income. So usuallyif you can segment out your investment accounts
(42:06):
your portfolio into job descriptions or jobtitles, that's where you can sometimes be
more efficiently invested for each of thosedifferent accounts. But this is the design
income portfolio is a fantastic way toget a higher payout rate at almost as
close to a guaranteed payout as youcan get while still being invested in the
markets. Hey James, on thatsame thought, you know, taking it
(42:29):
down a different, different branch.What if it's not about income. You
literally aren't going to take a pensionpayment. You're going to take a lump
sum because your cash flow is good, your other sources are solid, your
expenses intact, and things are good. So what about some other ways to
invest well, we have traditional methods, stock strategies, multiple stock strategies,
safe money strategies, blends of strategies, also other designed income strategies where you're
(42:53):
not taking the income for the safetyincome, you're just investing the income because
it's it's a sweet strategy. Butthere's also for people that want. I'm
gonna give this one as a teasebecause you just got to come see us
and call us for this one.It's a way to turn a profit in
the stock market with the market doinganything better than losing twenty percent. So
(43:15):
as long as the market doesn't losemore than twenty percent, you would actually
make a profit in this particular portfolio. You mean, if it was down
fifteen percent, I'd make positive fifteenpercent. Yes, we'll come see us
on that. There's more, there'smuch more off front about the office.
Five one, three, five,seven, nine sixty five four. We
can help, call us. Wecan help, and we want to thank
you for listening today. Have agreat week and remember this sound money,
(43:37):
where good things are believable, achievableand true for you.
In your corner, saving one investorat a time, working for clients,
not companies, all while bullyproofing portfolios, totally committed to sharing academic truths,
a bottom missing, always representing MainStreet and not Wall Street. Team,
It's your Son Money team, andthis is the Sound Money Investment Show with
(00:21):
Drawn Financial Advisors. Hello and welcometo the Sound Many Investment Show with Brown
Financial Advisors. I'm Greg Brown andI'm James both and we are a registered
investment advisor firm. We are independent. We do work for clients, not
companies. Our fun number five onethree five seven five nine sixty five four.
If you're no longer with the companyand you're looking to take control of
(00:44):
your money, we can help youwith individual advice as far as whether you
should roll that out into a taxneutral IRA, maybe split that apart via
the UA. And that's for peoplewith appreciated, maybe perhaps highly appreciated company
stock inside their company plan. Ourfund number five one three five seven five
nine sixty five four. Our websiteBrownfinancial Advisors dot com, email team at
(01:07):
Brownfinancial Advisors dot com, and ourhome offices in Milford, but we also
have locations in Blue Westchester and Florencegreg Today, we're going to discuss something
that could be representative of several financialdecisions if you really break it down,
think about it. The topic forus today is a pension buyout offer right
for you. So if you're confrontedwith the an opportunity to take a pension,
(01:30):
and that pension, you have apension. Exactly, it's a minority
situation out there these days. Thereare people in public service, government related
and so forth still kind of preservesome of those opportunities. Or if you're
with the corporation, been there along time, and some one of those
companies that's still lingered with the pensionprogram that was eventually many times upgraded or
(01:52):
replaced with the four one K conceptentirely. Some of those companies, and
if this is connecting with you andparallel plans, they had the legacy plan
of the pension that kind of ranalong forward for a certain group of workers
and then fully replaced for all thenewcomers thereafter with the four and one K
(02:13):
concept of employee contribution company match.And then when those let's say those older,
more mature workers kind of transition intoretirement, they have the opportunity to
take that pension decision, which we'llfocus on, and the combination of rolling
over there four one K into anira kind of having the best of both
worlds. But when it comes tothe pension buyo, you'll know by the
(02:35):
sound of this, just the ingredientshere, that you have a bucket of
money with your name on it.Excuse me, so that much is true.
The company will offer to convert thatto a stream of payments. The
pension payment. It's kind of anuidization. It is a monthly payment and
it comes with some options like morefor you and none for anyone else,
or something called a survivor's benefit,where a little bit can go for a
(02:58):
spouse significant other you'll get slightly lessand they'll get something in case you die.
Has something can be fifty percent,you know, sixty six point six
percent, some number. All decisionsto make, and then oftentimes you'll find
that you have a bit of afork in the road where you can take
a little bit of the monthly paymentas an option and a lump sum,
or we can go all the waythe end around and just say nope,
(03:20):
keep the monthly payments. I'm goingto take the money, and you take
the lump sum, and there aresome benefits in that. We'll discuss the
ins and outs of all this,but how it also kind of is a
shadow of something else. Well,social security is kind of like an annuity,
an annuity that has money that's convertedto a stream of payments over what
your life. So pensions and socisecurity is similar, and we want you
(03:42):
to know that we can help youmake these critical decisions and whether it's a
pension buyout, a pension election,a pension selection, the decisions and also
with maximizing your social security, makesure you get the most out of that,
whether it's spousal benefits and what toconsider there just your benefit, when
to turn it on sixty two tworoirement, sixty six through sixty seven ish
or even seventy you know what makesthe most sense? Well, what tell
(04:04):
you what? We know that whenwe see folks just like you, it's
about what your purpose of money is. How much money you're going to need
is cash flow and retirement. Howmuch would be provided by these ancillary sources
of foundational income, whether pension orsocial security, versus what you really need.
That difference that we focus on asa gap, and we're going to
use these other investment resources that youaccumulate over time to align them properly to
(04:27):
determine what is the best way toproduce that cash flow, because retirement's about
cash flow. And then the restof your residual moneys and buckets of money
properly invested overy long periods of time, and you know what that's for,
to provide a little growth, hedgeinflation, and be available for some liquidity
as needs arise throughout the journey.So all this can work together, and
it works together well or less thanwell. And we like to remind you
that retirement oftentimes does not come withdover so we encourage you to contact us
(04:51):
because we are holistic round financial advisorsyour soal many Advisorutine. We do investment
management investments. Of course, allthis in the context of overall financial plan
insurance a lot of purposes of insurance. You know which half your money willing
to lose, well the half thatyou do not want to risk. In
(05:12):
other words, we could fully insureand have it protect against market loss and
still get some of those gains inthe market without the downside through the use
of annuity products and fully insured accounts. So keep that in mind, then
get old fashioned insurance like how toreplace income if you don't make it through
the journey of working a full careerand saving for the future for the loved
ones. We don't see that asmuch in the pre or near retirement and
(05:34):
in retirement phase. There's other usesof life insurance and its to protect the
legacy of your state. Prepay sometaxes so it pays a death benefit tax
free into your state when you exitthe planet. And then all this money
hits people right between the eyes,becomes taxable along comes like a superhero swooping
in to save the day. Isthat life insurance a death benefit tax free?
To pay off those taxes, youcan pay taxes, prepay taxes in
(05:58):
nickels, dimes, and quarters,and cost instead of dollar for dollar later
all kinds of neat ways to bringall this holistically. That means the kitchen
sink together. And that makes thisdifferent than you have a state planning,
You have your legal documents in order. Most people want to plan to but
don't in fact have it done.We'll help you get that done. Tax
is tax preparation. That's one wayto look at it. How about tax
(06:19):
planning, we can bring it togetherand start working on tax efficiency tax savings
on the old cliche that penny savespenny earned. And when you're on a
fixed income, the more money leftin your wallet pur which is more money
for you to use and less moneyyou have to kind of come up with
through your investments to create the cashflow. Puts less pressure, less burden
on your investment buckets. So youcan see how this works together. And
(06:41):
we're reminded when we really get tohave the discussion with folks and perspective clients
and even existing clients who seem toforget, and that's on us. We
own that we're responsible for not messagingas clearly and it's frequently as thoroughly as
we should that all these things makea better financial relationship with you and your
money over the rest of your forever. Why settle for one trick pony solutions.
(07:03):
Why settle for a brokerage firm thatjust does investments and they're not even
necessarily tax efficient because they have nofodiary duty to put your interest first,
nor do they offer the services oftaxes or a state or income planning or
financial planning or fully insured solutions,because really they just want your money inder
management for a fee, and soyou either die or fire them, right,
so anyway brokers bake you broker careful. How so there's a lot to
(07:25):
talk about in this. We justwant you to be aware again where Holistic
will assess where you currently are,We'll come up with a plan. We'll
give you all the recommendations while holdingthing back that'll be complementary. That'd just
be our time together, putting someresources in to your future. And then
you just have a simple decision.You will see transparently have all the information
to make great decisions, and peopledo giving good information to make better decisions,
(07:48):
and we'll have it. Agree toagree or agree to disagree. That's
just the time. He's not rightto work together. You'll say, yep,
we want to work together. Howdo we get going? And it's
very simple from there and we beginour journey. So that's just kind of
like all that triggered by pension.Why because retirement is cash flow and pension
is part of cash flow and socialsecurity. So when you're deciding upon a
(08:09):
lump sum or monthly pension option andwhat's right for you, it all depends
on the situation. You know,decisions, decisions, decisions. These are
some of the larger decisions, andyou make a lot in everyday life.
We're all we're all making decisions allthe time. Some decisions impact this differently,
can be more consequential, have ahuge impact on our future or in
this case, again the phrase theycatch phrase with me when it relates to
(08:33):
retirement, it's like, it's therest of your forever. So which company
or advisor or group or who's yourwho's your team? Who's it going to
be? Do they really form ateam? Do they really form and provide
a series and a battery of solutionsthat really help you out in these areas
that are so critical, that arespecialists. You know, we'll joke in
(08:54):
public seminar settings that, let's say, show of hands here, how many
of y'all still work with a pediatrician? You go to see a pediatrician,
and I'll look at each other andkind of gram us, some smile,
some laugh out loud, and it'slike, you get the point. You
need a specialist. This is whatwe do. Why go to some place
else somewhere else where? This isnot, in fact what they do.
So anyway, we we want tohelp you make these decisions best, because
(09:18):
if you make a bad decision onwhat's an irrevocable decision, I mean,
you can't take one back, soit better be right. And we do
want to get this one right.James, Well, a couple of things,
A couple thoughts about this one isword bias, word association. Here's
what I mean by that. Ifwe ask clients or even perspective clients,
(09:39):
is about Social Security, about pensions, about annuities. Usually you get the
warm fuzzies about the Social Security programabout pensions, and word bias or word
sometimes association is you kind of getthe cold prickles about annuities. Annuities.
Oh, I don't like annuities,but I like Social Security. I like
the option or the idea of apension where you get a guaranteed paycheck for
(10:03):
life. We'll guess what. Allthree of these programs are forms of annuities.
The only difference really is who administersthe annuity contract. Social Security absolutely
is a form of annuity pensions.Again, if you take the annuitized option,
sounds like an annuity, right,It is an annuity. That's the
entire point is eliminate your word biasesand that's going to help as far as
(10:28):
making decisions that are that are better, more holistic for you when it comes
to your not only retirement, butalso making it through retirement. Our funderbent
Delfice five one three, five,seven, five nine sixty five four again
five one three, five, seven, five nine sixty five four callus we
can help, but stay tuned.Listening to the sound Maney Investment Show with
Brown Financial Advisors Shore on fifty fiveKRC Detax station. Opinions expressed are solely
(10:52):
those of Brown Financial Advisors and shouldnot be interpreted as specific advice. Materials
presented are believed to be from reliablesources and no representations can be made as
to its accuracy. All ideas andinformation should be discussed in detail with one
of our qualified investment advisors prior toimplementation. Market based investments involve risk,
and past performance is no guarantee offuture results. Insurance based investments offer guarantees
(11:13):
based upon the claims paying ability ofthe issuing company. All insurance, tax
and mortgage services are offered through BrownInsurance and Tax Advisors LLC. Brown Financial
Advisors and Brown Insurance and Tax Advisorsare affiliated companies and may only transact business
in those states in which registered orwere otherwise legally permitted. Welcome back to
the sound Many Investment Show with BrownFinancial Advisors. I'm Greg Brown and I'm
(11:35):
James foroth Than. We are anindependent ria that's a registered investment advisor firm.
We do our for clients, notcompanies. That's Main Street and not
Wall Street. Our fun number fiveone, three, five, seven,
five, nine to sixty five tofour, website, Brownfinancial Advisors dot com,
email share your thoughts to team atbrownfinanci Advisors dot com. And our
home offices in Milford, but wealso have locations in Blue Ash, Westchester
(11:58):
and Florence. Greg, hey,James. Someone said, what do you
mean exactly by Main Street Wall Street? It's kind of like and it's fiduciary
duty that we have to put yourinterest first. What we're doing is sitting
on the same side of the tablewith you. It's kind of like us
versus them as one perspective, ifyou will, who is them Wall Street?
Do they have your best interests inmine? I would suggest you not
think so. Do they have anagenda? You bet? Do they have
(12:22):
a fiduciary duty to put your interestfirst? Don't count on it. Does
it matter? Of course it matters. It's kind of like the difference between
we'll do things with you and foryou versus doing things to you. You
get the difference there. It's notso subtle. Actually, as we continue
on our topic today, it's aboutpensions, it could be social security decision
(12:43):
making time. What's the best buyoutproposition for you? Is it to take
a pension buy out and convert itto cash that you control and keeping your
family and your legacy. You usethis income while you need it, invest
it, and then when you're gone, it can actually go to people you
love or charities you care about.Were you going to take the paycheck,
the monthly pay check where you leavethe planet, the bucket of money goes
back up to the mothership and it'sspread across people's while it's in persons you've
(13:05):
never known or never meet. Onesounds a little more favorable, But we
need to make sure the math isright, the plan is solid, and
the choice and decision is right foryou. And along with that, we'll
look at what's some thoughts, thoughtprovoking questions, Yes, the thought provoking
questions that tie into today's show.So for starters. Should I consider taking
a lump sum this is the lumpsum option on the pension if I need
(13:28):
an income stream for life. Andsometimes the decision making on this one is
it an I decision or a meatdecision or is it a weed decision?
So if you're looking at taking sometype of payment that's going to last you
for the rest of your forever,well, what about the spouse? Are
you covering them as well? Andusually what happens with the company if you're
doing the annuitized option and they haveto ensure two lives. Once again,
(13:52):
annuities are forms of insurance, soif they're ensuring two lives, there's a
haircut on the monthly payment. Ifyou're taking a pay that lasts for a
certain number of years, once again, the company has to provide extra insurance,
so they take it out from yourmonthly payments, So you take voluntarily
a lower payout to ensure that secondlife. And here's a question that really
(14:13):
only you can answer, which isdo you have an emergency fund in case
something unexpected where to happen? Sofirst things first, make sure you have
that emergency cash flow on hand beforeyou start talking about investments. It's like
walking before running. Will my pensionhelp protect me from inflation? This is
another way of saying, is therea built in cost of living adjustment on
(14:35):
your pension payments? The vast majorityof them do not have this, which
is again one of the other reasonswhy it might make more sense to privately
invest as opposed to taking thenuitized pensionoption. Will a pension allow me to
pass on money to my children andother beneficiaries? Now, this is where
(14:56):
if there's a spousal benefit, theanswer typically is yes, if you elect
the spousal benefit, either at aone percent or fifty seventy five percent or
whatever the payment options are. Asfar as your spousal benefit options, another
way that you can potentially have somethingfor the beneficiaries is if you elect a
(15:16):
certain number of years for your pensionpayments. Very commonly one of the options
is you get payments for at leastten years or the rest of your life,
whichever one happens first. Right,Yeah, hey, James, on
that note, just yesterday working witha couple and he had an old lump
somewhere. A lot of the companiesnow are trying to get you to go
(15:37):
ahead and just make a decision.They're just wrapping up their pension programs.
They just want to roll on,roll forward, and they're saying, take
this as a payment, we'll startat sixty five. Make your decision now.
Let's say you're fifty, used towork at a company had this pension
program. They recognize you're not goingto start it yet, but they're wanting
you to make a decision now becausethey want to just flush the proverbial toilet
(15:58):
of these programs and get them offtheir book books. So let's say,
choose his payment or choose this lumpsum. And we were kind of looking
the difference between the current age andtheir intention to work till Medicare age is
sixty five. You know, thatwas like fifteen years. And I asked
them, one or or both ofthem together, how long do you see
yourself being in retirement? I mean, we're planning for twenty and thirty years
(16:19):
at a time, but what doyou feel about Well, he had good
genes, you know, on hisside, and she felt pretty similar that
you know the same, and they'rethinking at least twenty years. We want
a plan. I said, well, is that for both of you?
Said? Yeah, how about thesurvivor of the two of you, and
she said, well that that mayvery likely be me, And so I
guess I could go, what twentyfive should we? Okay, good,
(16:41):
let's look at that. Now.Let's look at the bucket of money they're
offering you versus the payment stream.What's the breakpoint? We kind of mathematically
back then to about fourteen years,So they're planning on you only having fourteen
years in a retirement. How doyou feel about that? And they said,
well, what do you think?I said, well, I think
you need to not live fifteen andthat is that the plan you want?
(17:03):
And of course not, And thenyou mentioned all these very good points.
You know, we control the moneyif we take the lump sum, if
it makes sense in our situation.They make the payments kind of unrealistic because
they know that in the end you'regonna die and the money's going to go
back to the company, so theymake the payments look more attractive then they
would be generally if you're just usingthe money in investing and taking yourself.
(17:25):
But remember you take control of it. You can increase the amount annually to
create a cost of living adjustment.Like James mention, you typically can't with
the pension, and then you don'tget backed in mathematically to a time you
have to die, like you know, Thursday at twelve, just after lunch.
I mean, come on, wedon't want to live that way.
So there's more that goes into this. I know a lot of that sounded
philosophical, but it turns to mathreal quick if it's your reality. So,
(17:49):
just to reiterate, the only waychildren could receive part of your pension
or in other words, so nonspouse beneficiary is if you elect the term
certain option and you die within thatterm, it's the only way your children
or non spouse beneficiary could receive that. So if you took fifteen year payment
and you're only here thirteen, someoneelse gets two more years. If your
spouse has already gone, your beneficiaries, your children, they would get through
(18:11):
remaining two years exactly. Now,when it comes to average life expectancies depends
upon when you look and when youstart. If you look at the overall
life expectancies, it's seventy nine formen, eighty one for women thereabouts.
Now, if you've already made itto let's just say age sixty five,
and you're looking at retirement. Now, your average life expectancy is into the
low to mid eighties for both menand women, So we're talking about between
(18:34):
eighty four and eighty six. Soyou know, depend upon where you're looking
when you start's that's where the lifeexpectancies sometimes look different. Here's another one
very important for some out there.What is the Pension Benefit Guarantee Corporation?
And how much of my pension willthey back? Or maybe another way of
looking at this or saying it iswhat type of haircut will I receive if
(18:56):
they have to take over my pension? Should I be concerned about the strength
of my pension? Goes back tothe Pension Benefit Guarantee Corporation once again,
So depending upon your company, ifthe government has to rescue your pension,
that's maybe not such a good thingor a good reason why you should choose
the pension and instead maybe privately invest. Hey, we've seen it both ways
(19:18):
too. We've seen pensions that didnot get rescued, and we've seen many
which did which the benefits were typicallycut down to like fifty percent or fifty
cents in the dollar. Not allthe time, but you just need to
know it's possible and it does happen, and last and sortainly not at least,
why are companies offering the pension buyoutto their current and previous employees and
very simply its liabilities. The riskto them is that you live to be
(19:42):
too old or to you know,you live too long and they have to
continue making the payments for usue forever, even if you're like mister and missus
Methusalem Greg. Any thoughts just that, I guess kind of have my own
phrase when it comes to this subject. We don't want you land locked into
a specific time you have to dieto make sense of the math of your
(20:03):
decisions made years earlier, and kindof combining two eclectic shows Mission Impossible in
Star Trek and kind of put togetherlike this. Your mission, if you
choose to accept it, is tolive long and prosper. No no other
thoughts, well, and one otherthought. I will say this because we
mentioned the word irrevocable, and Iwould say about ninety nine percent of the
(20:25):
pensions out there do have an irrevocabledecision tree when it comes to making that
election. That means door number onechoosing the lump sum, door number two
choosing to denuitize monthly payment options.Once in a very great while, that's
like saying one in one thousand thereaboutsis when the company decides there's a form
of a do over. And againwhat is happening kind of behind the scenes
(20:49):
with that company is they're looking tooffload liabilities, and you are the liability
when it comes to having the pension. So the company may offer a second
round of the decisions that says,are you sure you don't want to take
the lumps on option? And formany people it's it's kind of getting a
bail out if you will on theirretirement. So if you do have that
second round option, good for you. Take advantage of that, and at
(21:14):
the very least come see us orcall us and we can help you with
that decision. Our fun number fiveone, three, five, seven,
five nine to sixty five four callus. We can help. But stay
tuned. Listening to the Sound MoneyInvestment Show with Brown Financial Advisor's Shore on
fifty five KRC Detac station. Welcomeback to the Sound Many Investment Show with
(21:37):
Brown Financial Advisors. I'm Greg Brownand I'm James Wharton. We are a
registered investment advisory firm. We areindependent. We do work for clients,
not companies, and it does allstart with having a plan, well,
actually having a plan right, knowingwhat you own and why you own it.
So what you're seeking advice on anold four to one K, four
to three b IRA rollover, investmentplanning, retirement planning, income planning,
(22:00):
tax planning, social security maximization,a Roth conversion analysis, and Innuay analysis
and for some perhaps even in servicerollover. All those and more we can
help five one, three, five, seven, five nine sixty five four
our website Brownfinancial Advisors dot com,email team at Brownfinancial Advisors dot com,
and our home offices in Milford,but we also have locations in blue Ash,
(22:22):
Westchester and Florence. Shall well pensionbuyouts if that offer is a right
for you, deciding if the lumpsome payment or maybe monthly pension options the
right combination even for your situation,We want to look at the holistic plan,
look at your cash flow projections,your current investments, can come up
with a decision based on the bigpicture or reduce all the way down to
(22:44):
this mollus of detail, because otherwiseyou just don't want someone dictating to you
the choice you should make, justsimply because they believe it's right. Certainly
not just the company's perspective. Weneed to make it to make certain it's
right for you. So let's seehere, if you were to have a
pension buy out opportunity, and mostpeople already know, you know today's retirement
landscape, the pensions have they're increasinglyrare, but many employers that have succeeded
(23:11):
pensions with four to one k stillmight have legacy pensions. That is James
has already mentioned they're trying to weallow of settle up on and move on,
and those are those are there's sometype of defined contribution plan that allows
you to save and build a nestegg. That's what is offered through employers.
Right, you had these these planswhere you're contributing now and they're matching.
(23:32):
But once upon a time the companywas just setting aside moneys from the
economic performance of the organization and puttingit into this platform that was a pension
platform. So the pros and conshere both the pension and a four to
one k company plan, well,for most people it's like it doesn't matter
to them. They're just they're sofar away from retirement through thinking, yeah,
(23:55):
I'm contributing something to my future.What is the difference. Well,
the pension plans are off some timesfunded by the companies. The fore and
one k's are funded by you andsometimes the company. Not always. There
are not always a match opportunity availablefor employees. And of course, right
there, just insert the old logicthat if there's free money, take it.
(24:18):
If you're going to contribute to saysix percent, to get their three
and that's what you have to do, then you do what you have to
do to get their free money three, you know, don't do seven,
don't do more. And if theydon't have a match, well let's just
look at your participation at all andsee if it even makes sense. But
we're seeing this pretty common occurrence thatyou know, these pensions are being bought
(24:40):
out, and that's why this subjectis here today. Now for those of
you have recently been offered a buyoutof a pension, you've seen the forms,
you've seen the letter expressing you knowhow they are presenting this opportunity to
you. Until twenty nineteen, theIRIS actually prohibited companies from offering pension buyouts
to former employees who had already receivingstarted to receive those benefits. Now James
(25:03):
mentioned some of those folks are gettinga second opportunity, they oftentimes sweeten the
pot and there are a number ofeconomic reasons and factors and dynamics for that.
But why is this just happening inmass Because it's only been recently that
the government allowed for that to occur. So that's why you're seeing more of
that if you know you've been affectedby this. James, Well, something
(25:26):
else that we've seen with some recenti'd say these rash of buyout options.
And this is a good thing,by the way, where the company will
provide an actuarial comparison between taking thelump sum option versus the annuitize options.
And this is this is very instructivebecause you can see even by their math,
the company's math, that you areoftentimes about fifteen to twenty percent better
(25:52):
off taking lump sum option versus theannuitize option. So again, don't just
take our word for it. Thecompany themselves will tell you this if they
provide that actuary comparison. So that'ssomething that we have seen more frequently is
where they include that actuarial comparison ofthe lump sum versus the different types of
annuity or annuitized options of your pension. That's very instructive and very helpful to
(26:17):
kind of like make one of theseobjective decisions about your pension. Now,
when it comes to the reason whypeople or i mean these companies are offering
the pension buyouts, starts with thisinterest rates. You look at what's the
recent history of interest rates are andhow there's been kind of a rapid increase
over the past two years of theoverall interest rates. And that's a reason
(26:38):
why sometimes a major reason why someof these companies' pensions are are underfunded.
Now, balance it out between whatthe government has also done recently comes back
to the government always. But whenyou hear that government has bailed something or
someone out, guess what that means. That means we, the taxpayers have
bailed something or someone out. Sorecently there's been a major influx of capital
(27:03):
funding into the pension plans. Thankyou to all the taxpayers out there,
And yes, the taxpayers are theones who have funded these bailouts. Now,
a second reason why companies are offeringpension buyouts is because of longevity.
Yes, that means people overall arestill living longer than they were compared to
the past decade or two. Now, keep that in mind because there's always
(27:26):
that. Yeah, but because ofthat recent pandemic called the COVID nineteen pandemic,
right, that happened, and thathas affected the longevity landscape. So
it may be compared to say twentyseventeen, eighteen and nineteen, the overall
life expectancies have effectively plateaued since then. But again if you go back to
ten years ago or even twenty yearsago, yes, compared to then,
(27:48):
people are still living longer. There'sreasons for that. It starts with medical
advances people in general, maybe havingaccess to better healthcare, healthier foods,
and abundance of exercise options. Peopleon medicare, the silver sneakers, things
like that. All the tribute tooverall life expectancies that are still overall going
(28:11):
up compared to them. And that'skind of a good thing overall, But
it also means that more years thatyou have to pay out that pension.
Right. That means there's an increaseof liability when it comes to the companies,
which leads to recent number three gregwhich is what why companies are offering
the pension by ounce the liabilities Imean, it's pretty simple. If you're
(28:33):
living longer and they're on a commitmentto pay you monthly for the rest of
your life, and now the restof your life is longer, the economic
exposure to pay more money over timefor every pensioner involved becomes a mathematical avalanche
of liability. And that's what leadsto the illiquidity and the financial challenges and
stress upon the pension planetic that causesthem to slide into failure and then thus
(28:57):
comes in the you know, theguaranteed fund to try to bail these things
out, and it becomes stressed,and then you start to see a compromise
on how much of a pension canin fact be bailed out and honored.
Is it dollar for dollars? It'ssomething less than a dollar per dollar,
and you know, stepping back andsay, you know, you might say,
what is it? Pension buyout?Okay, you mentioned pension several times.
(29:19):
A pension buyout? See your employers. They issue a notice gives you
an option to exchange a monthly benefitoffer for a lump sum or sometimes a
combination. So you opt for alump sum and what happens, Well,
just know that that's eligible to rollover to an IRA. It's never been
taxed yet. It's treated as atax deferred bucket of money. And where
(29:40):
will end up you'll take the lumpsum. Yes, i'd like that,
thank you very much. Where's itcoming to your IRA? Now? If
you try to take it directly,be prepared they might withhold a mandatory twenty
percent tax withholding. So if yousend it straight into a custodian into your
IRA account, it will be taxdeferred dollar for dollar, go in there,
and then it'll just join an existingIRA or be a standlane IRA,
(30:03):
and then we can make that partof a private investment approach, is part
of your overall private investment plan andcontinue planning for your future. And then
when you're ready to start taking moneyfrom that account, you can take it
as well. It's taxable just likean IRA, so we will work that
with you. So IRA the pensionfund for that amount, the pension you
are receiving as a lump sum wouldbe going to a tax deferred IRA.
(30:26):
If you're receiving this monthly income,that's just taxable like income at the point
in time you're eligible to start it. A lot of times they'll start these
payments at sixty five. You mightmake your election prior you might be today,
as mentioned earlier, being confronted andasked to make a decision. Now
a pension program they're trying to wrapup and get all the pensioners, potential
pensioners all decided upon on who's goingto take checks, who's going to take
(30:48):
lump sum, even though you're maybeten years away from being eligible to start
the monthly payment. See, that'stime and money. If you go ahead
and take the lump sum and wefind a more productive way to invest it
over time where you control it,that's a good thing. Also, here's
a note you know how just emphasizedthat this would roll to an IRA.
What if you want to get alittle more tax savvy and you still had
time before you're retiring, you takethis lump sum comes over as an IRA,
(31:11):
we start working a wroth conversion strategyto where so much per year each
year from now through save retirement orwhatever timeframe we get over to a WROTH.
So later when either you start takingmoney from it for real is part
of your income strategy, it'll betax free, or if you die and
we all will, it can betax free death benefits, surviving spouse,
(31:32):
for beneficiaries and heirs. So allthat to say that, you know,
James has covered some reasons. Hepassed it to me for number three,
but his number one was interest rateshave gotten more costly. It makes the
plans more expensive. Longevity living longercreates more potential for larger payouts over time.
Number three is the liability itself thatthat creates because obligation to pay us
(31:53):
still there for life. Now everyone'slive and longer makes it more difficult.
Now when it comes to the Rothconverse analysis, here's maybe a thought about
that the overall tax rates that wehave today are lower than they'll likely be
within two years or just going forward. Just kind of like in general,
it comes to this, how faris our country in debt? What does
(32:15):
the country do next? In otherwords, our government, what do we
do next? Do we either cutspending or raise taxes. It seems unlikely
that we're going to cut spending becauseit seems like that's never an option with
our government. So the alternative,almost without a doubt, is at some
point in time taxes have to beraised. So if you convert to a
(32:35):
Wroth with the tax rates being lower, then that's a way to save money,
perhaps over time, maybe significantly amountof money. Anyways, there's more,
there's much more off phone number fiveone three, five, seventy five,
nine to sixty five to four callswe can help, but stay tuned.
Listening to the sound Man Investment Showwith Round Financial Advisors shore in fifty
five KRC Detax station. Welcome backto how Many Investment Show with Brown Financial
(33:04):
Advisors. I'm Great Brown and I'mJames Moore Than. We are an independent
RIA that's a registered investment advisor firmworking for clients, not companies. Again,
that's Main Street and not Wall Streets. Our fund number five Oneth three
five seven five, mine six fiveto four. Our website, Brownfinancial Advisors
dot com. Email team at BrownfinancialAdvisors dot Com. Our home offices in
Milford, but we also have locationsin Blue Ash, Westchester and Florence.
(33:29):
Greg Well, James. As we'reapproaching the financial planning and the decision making
and the analysis that goes into shouldyou take a monthly check or should you
take the lump sum and invest itand do something fantastical, Well James take
us through some of the considerations ofincome, needs and expenses. Yes,
understanding first of all your needs andyour expenses, your inflows versus your outflows.
(33:52):
So think about what you have foryour current income sources, whether it
be from Social Security, pension,if you have a pension, if you
have an annuity also form of amaybe one or the other. You also
might have investments that you might betaking income from, whether it be your
dividends that you're taking basically as mailboxmoney instead of reinvesting, whatever the case
(34:13):
may be. As far as youras your inflows are concerned, in other
words, your income, compare thatto what's going out. And then,
at the point of making the mathperhaps easier, let's just give some numbers.
So let's just say that all ofyour income sources together adds up to
four thousand dollars monthly. And thenyou look at what you calculate for your
essential expenses. And this is whereyou kind of separate your needs versus your
(34:36):
wants when it comes to spending.So think about your food, housing,
insurance, et cetera. And maybethat also comes out to approximately four thousand
a month. So if you thinkabout that, you're kind of at a
break even point. But once again, what's going to happen not only this
month, but next month and ayear from today. What's going to happen
to the purchasing power of your dollaris or a cost of living adjustment built
(34:57):
into these payments. So in thissituation, it might be a better choice
to keep the monthly pension simply becauseit plays a critical role in meeting your
income needs. But let's just sayyou're guaranteed income sources exceed your essential expenses.
In this case, consider taking lumpsum and going back to taking thenuitized
version. Again, if there's nocost of living adjustment, then think about
(35:22):
how your needs will change over timeas far as what your need for income.
So if you if your expenses aregoing up because cost of living is
going up, then once again,is your income also going up to match
that? And with the monthly pensiontypically it does not increase over time.
That means with inflation. So that'svery important to consider, is don't lose
(35:45):
to inflation. Greg Any thoughts,Yeah, before we transition to holding on
the money, controlling it when you'redone using it for your purposes and you
can at longevity and you know,wealth transfer and legacy, let's let's step
back and focus a little bit onincome. What are some income solutions we've
already talked about the power of certainannuity products. Doesn't matter if a fisher
(36:07):
or whoever, whatever, news andnoise the day their entities out there that
all they're trying to do is shakeyou down if you have an annuity,
scary out of it, So youjust throw in the town and jump into
their asset managements. Then get afeed. And I mentioned earlier and I
mean this so you can get afee until you either die or fire them.
And I can tell you some ofthose organizations out there that speak so
poorly about certain annuity products. Numberone, that's their angle, okay.
(36:29):
Number two, be careful the fineprint. What is your old saying,
James about fine print? Oh,the bold print, give it the fine
print. Taketh away. Yeah,here's what they're going to take away.
When you determine you don't like theirinvestment style a few years into the relationship
and you try to walk out thedoor thinking you can, they'll remind you
any surrender charge that they took careof for you, or they took care
(36:50):
of it by reducing your fee forthe first few years they're going to claw
it back. They're going to say, oh, by the way, you
had a six percent surrender on thatannuity. We talked you into surrendering,
and the say one hundred thousand,that was six thousand, the six percent,
and they subsidize their fee by threequarters of a percent or some number.
And you try to walk away.They want that six thousand back.
They're going to claw it back.So look out. It's an angle.
(37:14):
There's always an angle with some ofthese things. And that's the difference between
a true fidiiary and a holistic advisor. Has to look at it, you
know, from every perspective, butnow income itself. So you have these
annuity products that can give you guaranteedlifetime income kind of like an additional pension
check or a self funded Social Securitycheck, all really cool stuff. Meet
(37:35):
your cash flow needs. The restof your investments can be invested at whatever
risk that's necessary needed. Do youprefer hedge inflation, grow money over time,
have liquidity, but you have yourcash flow self. For Another approach
is just traditionally through investing. Maybeit's dividend investing, where most of your
cash is created by the dividend orthe fruit thrown off the fruit tree of
your investments, where the tree isthe stock. You know, it goes
up, it goes down, youknow, just like trees have good seasons,
(37:58):
bad seasons, and it has yield. You know what's the fruit.
It's the yield. What's it yielding? The dividend? What's the dividend cash
that can either be sent to youor reinvested, right, so old dividend
approach, or we can use growthof equities in your investments at large too,
as they kind of percolate and growover time. You're taking a certain
amount of money each year, whichequates to some kind of percentage of drawdown.
(38:19):
If you think about it. Youknow, if you're taking forty thousand
off a million, what is thatfour percent? If you take four percent
every year, is that going tobe forty thousand? Ah? A good
question depends on if you're still holdinga million. If there's a twenty percent
pull back in the market, you'redown to eight hundred thousand, four percent,
it's gonna be thirty two thousand.You just took an eight thousand a
year hit, right, So we'retalking income here. What's another approach?
(38:40):
Well, we have some interesting approachit's one of them is just called designed
income. It's a market strategy.And how this particular thing works is,
let's say you put in I'm goingto say a million, but you know,
just add or subtract zero. Soevery situation is different, the truth
remains the same. Let's say amillion dollars into this one version of a
designed income strategy that we have wouldbe eight point two percent qu pon rate.
(39:06):
What does that mean? Well,I'm going to make it simple math.
Eight percent on a million dollars iseighty thousand a year. How would
you like that paid? Well,this is particular strategy, and it was
eight point two, say'd be eightytwo thousand per year. It'd be paid
monthly. So divide eighty twenty bytwelve and there's your monthly paycheck on a
million. Well, how does thisthing work where your million will be returned
(39:28):
to you in thirty six months?It's a thirty six month duration or maturity
or term. So for this thirtysix month period, you'd be receiving eighty
two thousand per year on a milliondollars divided by twelve months to get a
monthly payment. Now, what couldgo wrong? Okay, sounds too good
to be true. Well, thereare some parameters here. In any given
quarter during the three years, ifthe market were to be down fifty percent,
(39:52):
So this is linked to the lesserperforming the SMP, the DOUBT or
Nasdaq. So if these indices aredown fifty percent in a certain period,
then you won't get your payment forthat period. Okay, Now the end
of the three years, if themarket were down fifty percent from where it
started thirty six months earlier, you'dbe exposed to that market risk. Well,
(40:14):
market industors generally exposed to the marketmovements anyway, right, So no
new news there. It just kindof sounds more provocative. But now,
if we were to take you throughthe statistics, there's that worse always and
to show you that since nineteen twentysix, the number of times the market,
the markets at large, have beendown that much. It's just it's
(40:37):
happened once. Yeah. So thereyou have it. And so you're saying
there's a chance, there's a chanceyou have to be full disclosure. But
this is pretty sweet right here.We have other options. It's just always
and these are boutique like options.This isn't something you walk into a broke
trum or bank and get and it'sjust another thing that makes us different.
You don't know what you're missing byjust running with the herd. Once you
(40:58):
separate from the herd, we'll helpyou avoid the lions and you don't have
to be the average gazelle. We'regoing to get you to the next watering
hole just the way you want.And maybe too philosophical there, but James,
any thoughts on that as we talkedmaybe further about this, or income
producing or pension taking or longevity andwell transfer aspects. Sometimes it's like asking
(41:19):
yourself, what is the primary objectiveyour first mandate for your investments. Typically
there's three categories. There's growth,there's safety, there's income. So if
you're thinking to yourself, my firstthing that I need mindset and investment my
investments. Easy for me to say, first thing I need for my investments
not to do is to lose money. That means you want safety first,
and then you want growth second,and we can take care of that.
(41:42):
And then if you're transitioning to needingto draw income from your portfolios, maybe
income is now number one. Ormaybe if you have multiple different investments,
multiple different investment accounts, maybe youhave one that has a design for growth,
a second one that's designed maybe forsafety, and a third one that's
designed for the income. So usuallyif you can segment out your investment accounts
(42:06):
your portfolio into job descriptions or jobtitles, that's where you can sometimes be
more efficiently invested for each of thosedifferent accounts. But this is the design
income portfolio is a fantastic way toget a higher payout rate at almost as
close to a guaranteed payout as youcan get while still being invested in the
markets. Hey James, on thatsame thought, you know, taking it
(42:29):
down a different, different branch.What if it's not about income. You
literally aren't going to take a pensionpayment. You're going to take a lump
sum because your cash flow is good, your other sources are solid, your
expenses intact, and things are good. So what about some other ways to
invest well, we have traditional methods, stock strategies, multiple stock strategies,
safe money strategies, blends of strategies, also other designed income strategies where you're
(42:53):
not taking the income for the safetyincome, you're just investing the income because
it's it's a sweet strategy. Butthere's also for people that want. I'm
gonna give this one as a teasebecause you just got to come see us
and call us for this one.It's a way to turn a profit in
the stock market with the market doinganything better than losing twenty percent. So
(43:15):
as long as the market doesn't losemore than twenty percent, you would actually
make a profit in this particular portfolio. You mean, if it was down
fifteen percent, I'd make positive fifteenpercent. Yes, we'll come see us
on that. There's more, there'smuch more off front about the office.
Five one, three, five,seven, nine sixty five four. We
can help, call us. Wecan help, and we want to thank
you for listening today. Have agreat week and remember this sound money,
(43:37):
where good things are believable, achievableand true for you.
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